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RULE §139.14Non-Issuer Sales

The State Securities Board, pursuant to the Securities Act, §5.T, exempts from the securities registration requirements of the Securities Act, §7, the offer and sale of any securities, provided the following conditions are met.

  (1) Who may sell. Offers or sales may be made by an owner of the securities, or any person acting on the owner's behalf, so long as the owner is not the issuer of the securities.

  (2) Dealer and agent registration. Any person (other than the owner) who acts as an agent of the owner in connection with a sale to any prospective purchaser in a transaction exempt from securities registration by virtue of this section shall be registered as either a dealer or agent under the Act, as applicable.

  (3) Use of proceeds. The proceeds of the sale shall be for the benefit of the owner and not directly or indirectly for the benefit of the issuer of the securities.

  (4) Number of sales.

    (A) Except as the allowable number of sales may be increased as provided in subparagraph (B) of this paragraph, the owner, together with any persons acting in concert with the owner, may make no more than 15 sales in any 12-month period under and in reliance on this section, exclusive of sales made:

      (i) to the issuer;

      (ii) in compliance with the Act, §§5.O, 6.F, or 5.H; or

      (iii) in compliance with the following:

        (I) §109.4 of this title (relating to Securities Registration Exemption for Sales to Financial Institutions and Certain Institutional Investors);

        (II) §139.7 of this title (relating to Sales of Securities to Nonresidents); or

        (III) §139.13 of this title (relating to Resales under SEC Rule 144 and Rule 145(d)).

    (B) The number of sales that may be made under subparagraph (A) of this paragraph may be increased to a higher number as approved by the Securities Commissioner in response to a written request based on the particular circumstances of a specific transaction. If the Securities Commissioner approves a higher number of sales in accordance with the provisions of this subparagraph, then in the particular case addressed by the written request, the higher number of approved sales will be allowed.

    (C) The exemption provided by this section may not be combined with sales made pursuant to the Act, §5.C(1), to exceed sales otherwise allowable under this section.

  (5) Filing requirement for certain persons. Any person who is a director, executive officer, or owner of 15% or more of a class of voting securities or other ownership interests of the issuer who wishes to make sales under and in reliance on this section must file a Form 133.34 with the Securities Commissioner no later than 15 days after the first receipt of any portion of the consideration for the securities being sold.

  (6) Anti-fraud provisions. Nothing in this section relieves owners or persons acting on behalf of owners from the duty to disclose to prospective investors information adequate to satisfy the anti-fraud provisions of the Act.

Source Note: The provisions of this §139.14 adopted to be effective August 28, 1992, 17 TexReg 5681; amended to be effective June 8, 1994, 19 TexReg 4196; amended to be effective January 8, 2006, 30 TexReg 8869

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