| (a) Section 4005.007 of the Act includes any offer
and any transaction pursuant to any offer by the issuer of its "securities"
to any one or more of its "existing security holders" even though
such offer or transaction does not relate to all existing holders
of such securities or to all existing holders of a class or series
thereof.
(b) "Existing security holder" within the context of
§4005.007 does not include the following:
(1) the holder of an option, whether transferable or
nontransferable, issued by an entity other than the issuer of the
security underlying the option;
(2) the holder of an account which is devoid of securities.
(c) An employee's activities such as mailing reports,
dividend notices, and revised prospectuses do not constitute "soliciting"
within the context of §4005.007. Furthermore, if an employee's
job is fully justifiable even without soliciting existing security
holders, occasional solicitations of existing security holders in
this state will not affect the availability of §4005.007. However,
if an employee's primary job is to solicit existing security holders
in this state either on a full-time or part-time basis, §4005.007
is not available.
(d) Where an open-end investment company adopts a plan
pursuant to SEC Rule 12b-1 (17 CFR §270.12b-1, as amended) and
funds are used to pay commissions or other remuneration for soliciting
existing security holders in this state, §4005.007 is not available.
(e) Where an offering provides for a minimum investment
and only a portion of such minimum is paid initially, §4005.007
is not available for payments made subsequently to meet the required
minimum investment.
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| Source Note: The provisions of this §109.1 adopted to be effective January 1, 1976; amended to be effective May 17, 1976, 1 TexReg 1180; amended to be effective January 7, 1985, 9 TexReg 6472; amended to be effective July 18, 2024, 49 TexReg 5141 |
