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| | 99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB3847 Introduced , by Rep. Elgie R. Sims, Jr. SYNOPSIS AS INTRODUCED:
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Amends the Illinois Securities Law of 1953. Creates an exemption from certain filing and registration requirements under the Act for intrastate securities offerings that meet certain conditions, including that (1) the offering meets all of the requirements of the federal exemption for intrastate offerings provided under the Securities Exchange Act of 1933; (2) the aggregate purchase price of all securities sold by an issuer within any 12-month period does not exceed certain monetary limitations; and (3) the aggregate amount sold to any purchaser in an offering of securities made within any consecutive 12-month period does not exceed certain monetary limitations. Provides that an issuer may make an offering or sale of securities through the use of one or more qualified Internet portals, subject to certain requirements, including that (i) the Internet portal shall at all times be owned by a corporation or other legal entity which is either organized under the laws of, or is otherwise qualified to do business in, this State; (ii) the Internet portal shall establish and maintain commercially reasonable measures to limit access to any information concerning an offering or sale of the subject securities to residents of this State; and (iii) the Internet portal shall establish and maintain a secure method of communication through the Internet portal itself that will permit potential
investors to communicate with one another and with
representatives of the issuer about the offering. Requires the Secretary of State to collect a $100 fee for securities offered or sold under the exemption created under this amendatory Act; and a $300 fee for the registration and renewal of a qualified Internet portal.
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| | | FISCAL NOTE ACT MAY APPLY | |
| | A BILL FOR |
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| 1 | | AN ACT concerning business.
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| 2 | | Be it enacted by the People of the State of Illinois,
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| 3 | | represented in the General Assembly:
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| 4 | | Section 5. The Illinois Securities Law of 1953 is amended |
| 5 | | by changing Sections 4, 11a, and 18.1 and by adding Sections |
| 6 | | 2.34, 2.35, 2.36, 2.37, and 8d as follows:
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| 7 | | (815 ILCS 5/2.34 new) |
| 8 | | Sec. 2.34. Accredited investor. "Accredited investor" has |
| 9 | | the
meaning given to that term in 17 CFR 230.501(a), as amended |
| 10 | | and in effect from time to time.
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| 11 | | (815 ILCS 5/2.35 new) |
| 12 | | Sec. 2.35. Qualified escrowee. "Qualified escrowee" means |
| 13 | | a person, firm, partnership, association, corporation, or |
| 14 | | other legal entity who: (a) falls under the definition of |
| 15 | | "title insurance company" under, and pursuant to the terms and |
| 16 | | requirements of, the Title Insurance Act; or (b) is certified |
| 17 | | as an independent escrowee under, and pursuant to the terms and |
| 18 | | requirements of, the Title Insurance Act.
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| 19 | | (815 ILCS 5/2.36 new) |
| 20 | | Sec. 2.36. Qualified Internet portal. "Qualified Internet |
| 21 | | portal"
means an Internet portal maintained by a corporation or |
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| 1 | | other legal
entity that is being used to offer or sell |
| 2 | | securities and
that meets the requirements of Section 8d of |
| 3 | | this Act.
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| 4 | | (815 ILCS 5/2.37 new) |
| 5 | | Sec. 2.37. Experienced investor. "Experienced investor" |
| 6 | | means: |
| 7 | | (a) a natural person whose individual income exceeded |
| 8 | | $150,000, or joint income with that person's spouse |
| 9 | | exceeded $200,000, in each of the 2 most recent years, and |
| 10 | | such person has a reasonable expectation of reaching the |
| 11 | | same income level in the current year; |
| 12 | | (b) a natural person whose individual net worth exceeds |
| 13 | | $500,000, or joint net worth with that person's spouse, |
| 14 | | exceeds $750,000, provided that net worth for purposes of |
| 15 | | this subsection shall be calculated in the same manner as |
| 16 | | provided in 17 CFR 230.501(a); |
| 17 | | (c) a natural person who has passed the Series 7 and |
| 18 | | the Series 63 licensing exams, or the Series 66 licensing |
| 19 | | exam, or who is otherwise licensed in the State to practice |
| 20 | | as an accountant or financial planner; |
| 21 | | (d) a natural person who has received an advanced |
| 22 | | degree (a master's degree or higher) in finance or |
| 23 | | accounting from an accredited educational institution or |
| 24 | | has completed a State recognized securities investment |
| 25 | | training program; |
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| 1 | | (e) a natural person who has worked at least 3 years |
| 2 | | (consecutively or non-consecutively) out of the then most |
| 3 | | recent consecutive 10-year period in a position materially |
| 4 | | focused on analyzing, accounting for, drafting material |
| 5 | | documentation in connection with (including legal |
| 6 | | documentation), or otherwise advising issuers or |
| 7 | | purchasers with respect to, transactions involving the |
| 8 | | offer or sale of publicly sold or privately placed |
| 9 | | securities; |
| 10 | | (f) any entity (including, without limitation, any |
| 11 | | trust) in which at least 90% of the equity interest is |
| 12 | | owned by (or with respect to any trust, the primary |
| 13 | | beneficiaries are) persons who meet one or more of the |
| 14 | | criteria in items (a) through (e) of this Section; |
| 15 | | (g) with respect to participating in an offering of a |
| 16 | | particular issuer, a natural person serving as an officer, |
| 17 | | director, partner, trustee of, or otherwise occupying |
| 18 | | similar status or performing similar functions with |
| 19 | | respect to, such issuer; or |
| 20 | | (h) with respect to participating in an offering of a |
| 21 | | particular issuer, a natural person or entity who owns 10% |
| 22 | | or more of the then aggregate outstanding voting capital |
| 23 | | securities of such issuer. |
| 24 | | In 2019 and every 5th year thereafter, the Secretary of |
| 25 | | State shall cumulatively adjust the dollar limitations in items |
| 26 | | (a) and (b) to reflect the change in the Consumer Price Index |
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| 1 | | for all Urban Consumers published by the United States |
| 2 | | Department of Labor, Bureau of Labor Statistics, rounding each |
| 3 | | dollar limitation to the nearest $10,000.
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| 4 | | (815 ILCS 5/4) (from Ch. 121 1/2, par. 137.4)
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| 5 | | Sec. 4. Exempt transactions. The provisions of Sections 2a, |
| 6 | | 5, 6 and 7
of this Act shall not apply to any of the following |
| 7 | | transactions, except
where otherwise specified in this Section |
| 8 | | 4:
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| 9 | | A. Any offer or sale, whether through a dealer or |
| 10 | | otherwise, of securities
by a person who is not an issuer, |
| 11 | | underwriter, dealer or controlling person
in respect of such |
| 12 | | securities, and who, being the bona fide owner of such
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| 13 | | securities, disposes thereof for his or her own account; |
| 14 | | provided, that
such offer or sale is not made directly or |
| 15 | | indirectly for the benefit of
the issuer or of an underwriter |
| 16 | | or controlling person.
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| 17 | | B. Any offer, sale, issuance or exchange of securities of |
| 18 | | the issuer
to or with security holders of the issuer except to |
| 19 | | or with persons who
are security holders solely by reason of |
| 20 | | holding transferable warrants,
transferable options, or |
| 21 | | similar transferable rights of the issuer, if
no commission or |
| 22 | | other remuneration is paid or given directly or
indirectly for |
| 23 | | or on account of the procuring or soliciting of such sale
or |
| 24 | | exchange (other than a fee paid to underwriters based on their
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| 25 | | undertaking to purchase any securities not purchased by |
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| 1 | | security holders
in connection with such sale or exchange).
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| 2 | | C. Any offer, sale or issuance of securities to any |
| 3 | | corporation, bank,
savings bank, savings institution, savings |
| 4 | | and loan association, trust company,
insurance company, |
| 5 | | building and loan association, or dealer; to a pension fund,
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| 6 | | pension trust, or employees' profit sharing trust, other |
| 7 | | financial institution
or institutional investor, any |
| 8 | | government or political subdivision or
instrumentality |
| 9 | | thereof, whether the
purchaser is acting for itself or in some |
| 10 | | fiduciary capacity; to any
partnership or other association |
| 11 | | engaged as a substantial part of its
business or operations in |
| 12 | | purchasing or holding securities; to any trust
in respect of |
| 13 | | which a bank or trust company is trustee or co-trustee; to
any |
| 14 | | entity in which at least 90% of the equity is owned by persons
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| 15 | | described under subsection C, H, or S of this Section 4; to any
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| 16 | | employee benefit plan within the meaning of Title I of the |
| 17 | | Federal ERISA
Act if (i) the investment decision is made by a |
| 18 | | plan fiduciary as defined
in Section 3(21) of the Federal ERISA |
| 19 | | Act and such plan fiduciary is either
a bank, savings and loan |
| 20 | | association, insurance company, registered
investment adviser |
| 21 | | or an investment adviser registered under the Federal
1940 |
| 22 | | Investment Advisers Act, or (ii) the plan has total assets in |
| 23 | | excess
of $5,000,000, or (iii) in the case of a self-directed |
| 24 | | plan, investment
decisions are made solely by persons that are |
| 25 | | described under subsection C,
D, H or S of this Section 4; to |
| 26 | | any plan established and maintained by,
and for the benefit of |
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| 1 | | the employees of, any state or political subdivision
or agency |
| 2 | | or instrumentality thereof if such plan has total assets in
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| 3 | | excess of $5,000,000; or to any organization described in |
| 4 | | Section 501(c)(3)
of the Internal Revenue Code of 1986, any |
| 5 | | Massachusetts or similar business
trust, or any partnership, if |
| 6 | | such organization, trust, or partnership has
total assets in |
| 7 | | excess of $5,000,000.
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| 8 | | D. The Secretary of State is granted authority to create by |
| 9 | | rule or
regulation a limited offering transactional exemption |
| 10 | | that furthers the
objectives of compatibility with federal |
| 11 | | exemptions and uniformity among the
states. The Secretary of |
| 12 | | State shall prescribe by rule or regulation the
amount of the |
| 13 | | fee for filing any report required under this subsection, but |
| 14 | | the
fee shall not be less than the minimum amount nor more than |
| 15 | | the maximum amount
established under Section 11a of this Act |
| 16 | | and shall not be returnable in any
event.
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| 17 | | E. Any offer or sale of securities by an executor, |
| 18 | | administrator,
guardian, receiver or trustee in insolvency or |
| 19 | | bankruptcy, or at any
judicial sale, or at a public sale by |
| 20 | | auction held at an advertised time
and place, or the offer or |
| 21 | | sale of securities in good faith and not for the
purpose of |
| 22 | | avoiding the provisions of this Act by a pledgee of securities
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| 23 | | pledged for a bona fide debt.
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| 24 | | F. Any offer or sale by a registered dealer, either as |
| 25 | | principal or
agent, of any securities (except face amount |
| 26 | | certificate contracts and
investment fund shares) at a price |
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| 1 | | reasonably related to the current market
price of such |
| 2 | | securities, provided:
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| 3 | | (1) (a) the securities are issued and outstanding;
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| 4 | | (b) the issuer is required to file reports pursuant |
| 5 | | to Section 13 or
Section 15(d) of the Federal 1934 Act |
| 6 | | and has been subject to such
requirements during the 90 |
| 7 | | day period immediately preceding the date of the
offer |
| 8 | | or sale, or is an issuer of a security covered by |
| 9 | | Section 12(g)(2)(B)
or (G) of the Federal 1934 Act;
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| 10 | | (c) the dealer has a reasonable basis for believing |
| 11 | | that the issuer is
current in filing the reports |
| 12 | | required to be filed at regular intervals
pursuant to |
| 13 | | the provisions of Section 13 or Section 15(d), as the |
| 14 | | case may
be, of the Federal 1934 Act, or in the case of |
| 15 | | insurance companies exempted
from Section 12(g) of the |
| 16 | | Federal 1934 Act by subparagraph 12(g)(2)(G)
thereof, |
| 17 | | the annual statement referred to in Section |
| 18 | | 12(g)(2)(G)(i) of the
Federal 1934 Act; and
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| 19 | | (d) the dealer has in its records, and makes |
| 20 | | reasonably available upon
request to any person |
| 21 | | expressing an interest in a proposed transaction in
the |
| 22 | | securities, the issuer's most recent annual report |
| 23 | | filed pursuant to
Section 13 or 15(d), as the case may |
| 24 | | be, of the Federal 1934 Act or the annual
statement in |
| 25 | | the case of an insurance company exempted from Section |
| 26 | | 12(g)
of the Federal 1934 Act by subparagraph |
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| 1 | | 12(g)(2)(G) thereof, together with
any other reports |
| 2 | | required to be filed at regular intervals under the
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| 3 | | Federal 1934 Act by the issuer after such annual report |
| 4 | | or annual
statement; provided that the making |
| 5 | | available of such reports pursuant to
this |
| 6 | | subparagraph, unless otherwise represented, shall not |
| 7 | | constitute a
representation by the dealer that the |
| 8 | | information is true and correct, but
shall constitute a |
| 9 | | representation by the dealer that the information is
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| 10 | | reasonably current; or
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| 11 | | (2) (a) prior to any offer or sale, an application for |
| 12 | | the authorization
thereof and a report as set forth |
| 13 | | under sub-paragraph (d) of this
paragraph (2) has been |
| 14 | | filed by any registered dealer with and approved by
the |
| 15 | | Secretary of State pursuant to such rules and |
| 16 | | regulations as the
Secretary of State may prescribe;
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| 17 | | (b) the Secretary of State shall have the power by |
| 18 | | order to refuse
to approve any application or report |
| 19 | | filed pursuant to this paragraph (2) if
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| 20 | | (i) the application or report does not comply |
| 21 | | with the provisions of
this paragraph (2), or
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| 22 | | (ii) the offer or sale of such securities would |
| 23 | | work
or tend to work a fraud or deceit, or
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| 24 | | (iii) the issuer or the applicant has violated |
| 25 | | any of the
provisions of this Act;
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| 26 | | (c) each application and report filed pursuant to |
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| 1 | | this paragraph (2)
shall be accompanied by a filing fee |
| 2 | | and an examination fee in the amount
established |
| 3 | | pursuant to Section 11a of this Act, which shall not be
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| 4 | | returnable in any event;
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| 5 | | (d) there shall be submitted to the Secretary of |
| 6 | | State no later than
120 days following the end of the |
| 7 | | issuer's fiscal year, each year
during the period of |
| 8 | | the authorization, one copy of a report which shall
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| 9 | | contain a balance sheet and income statement prepared |
| 10 | | as of the issuer's
most recent fiscal year end |
| 11 | | certified by an independent certified public
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| 12 | | accountant, together with such current information |
| 13 | | concerning the
securities and the issuer thereof as the |
| 14 | | Secretary of State may prescribe
by rule or regulation |
| 15 | | or order;
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| 16 | | (e) prior to any offer or sale of securities under |
| 17 | | the provisions of
this paragraph (2), each registered |
| 18 | | dealer participating in the offer or
sale of such |
| 19 | | securities shall provide upon request of prospective
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| 20 | | purchasers of such securities a copy of the most recent |
| 21 | | report required
under the provisions of sub-paragraph |
| 22 | | (d) of this paragraph (2);
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| 23 | | (f) approval of an application filed pursuant to |
| 24 | | this paragraph (2) of
subsection F shall expire 5 years |
| 25 | | after the date of the granting
of the approval, unless |
| 26 | | said approval is sooner terminated by (1) suspension or
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| 1 | | revocation by the Secretary of State in the same manner |
| 2 | | as is provided
for in subsections E, F and G of Section |
| 3 | | 11 of this Act,
or (2) the applicant filing with the |
| 4 | | Secretary of State an affidavit to
the effect that (i) |
| 5 | | the subject securities have become exempt under |
| 6 | | Section
3 of this Act or (ii) the applicant no longer |
| 7 | | is capable of acting as
the applicant and stating the |
| 8 | | reasons therefor or (iii) the applicant no longer
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| 9 | | desires to act as the applicant. In the event of the |
| 10 | | filing of an
affidavit under either preceding |
| 11 | | sub-division (ii) or (iii) the
Secretary of State may |
| 12 | | authorize a substitution of applicant upon the
new |
| 13 | | applicant executing the application as originally |
| 14 | | filed. However,
the aforementioned substituted |
| 15 | | execution shall have no effect upon the
previously |
| 16 | | determined date of expiration of approval of the |
| 17 | | application.
Notwithstanding the provisions of this |
| 18 | | subparagraph (f), approvals granted
under this |
| 19 | | paragraph (2) of subsection F prior to the effective |
| 20 | | date of this
Act shall be governed by the provisions of |
| 21 | | this Act in effect on such
date of approval; and
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| 22 | | (g) no person shall be considered to have violated |
| 23 | | Section 5 of this
Act by reason of any offer or sale |
| 24 | | effected in reliance upon an
approval granted under |
| 25 | | this paragraph (2) after a termination thereof under |
| 26 | | the
foregoing subparagraph (f) if official notice of |
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| 1 | | such termination has not
been circulated generally to |
| 2 | | dealers by the Secretary of State and if
such person |
| 3 | | sustains the burden of proof that he or she did not |
| 4 | | know, and in
the exercise of reasonable care, could not |
| 5 | | have known, of the
termination; or
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| 6 | | (3) the securities, or securities of the same class, |
| 7 | | are the subject
of an existing registration under Section 5 |
| 8 | | of this Act.
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| 9 | | The exemption provided in this subsection F shall apply |
| 10 | | only if the offer
or sale is made in good faith and not for the |
| 11 | | purpose of avoiding any of
the provisions of this Act, and only |
| 12 | | if the offer or sale is not made for the
direct or indirect |
| 13 | | benefit of the issuer of the securities, or the
controlling |
| 14 | | person in respect of such issuer.
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| 15 | | G. (1) Any offer, sale or issuance of a security, whether |
| 16 | | to residents
or to non-residents of this State, where:
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| 17 | | (a) all sales of such security to residents of this |
| 18 | | State (including the
most recent such sale) within the |
| 19 | | immediately preceding 12-month period
have been made |
| 20 | | to not more than 35 persons or have involved an |
| 21 | | aggregate
sales price of not more than $1,000,000;
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| 22 | | (b) such security is not offered or sold by means |
| 23 | | of any general
advertising or general solicitation in |
| 24 | | this State; and
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| 25 | | (c) no commission, discount, or other remuneration |
| 26 | | exceeding 20%
of the
sale price of such security, if |
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| 1 | | sold to a resident of this State, is
paid or given |
| 2 | | directly or indirectly for
or on account of such sales.
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| 3 | | (2) In computing the number of resident purchasers or |
| 4 | | the aggregate sales
price under paragraph (1) (a) above, |
| 5 | | there shall be excluded any purchaser
or dollar amount of |
| 6 | | sales price, as the case may be, with respect to any
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| 7 | | security which at the time of its sale was exempt under |
| 8 | | Section 3 or was
registered under Section 5, 6 or 7 or was |
| 9 | | sold in a
transaction exempt under other subsections of |
| 10 | | this Section 4.
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| 11 | | (3) A prospectus or preliminary prospectus with |
| 12 | | respect to a security for
which a registration statement is |
| 13 | | pending or effective under the Federal
1933 Act shall not |
| 14 | | be deemed to constitute general advertising or general
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| 15 | | solicitation in this State as such terms are used in |
| 16 | | paragraph (1) (b)
above, provided that such prospectus or |
| 17 | | preliminary prospectus has not been
sent or otherwise |
| 18 | | delivered
to more than 150 residents of this State.
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| 19 | | (4) The Secretary of State shall by rule or regulation |
| 20 | | require the
filing of a report or reports of sales made in
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| 21 | | reliance upon the exemption provided by this subsection G |
| 22 | | and prescribe
the form of such report and the time within |
| 23 | | which such report shall be filed.
Such report shall set |
| 24 | | forth the name and address of the issuer and of the
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| 25 | | controlling person, if the sale was for the direct or |
| 26 | | indirect benefit
of such person, and any other information |
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| 1 | | deemed necessary by the Secretary
of State to enforce |
| 2 | | compliance with this subsection G. The Secretary of
State |
| 3 | | shall prescribe by rule or regulation the amount of the fee |
| 4 | | for
filing any such report, established pursuant to Section |
| 5 | | 11a
of this Act, which shall not be returnable in any |
| 6 | | event. The
Secretary of
State may impose, in such cases as |
| 7 | | he or she may deem appropriate, a penalty
for failure to |
| 8 | | file any such report in a timely manner, but no such |
| 9 | | penalty
shall exceed an amount equal to five times the |
| 10 | | filing fee. The contents
of any such report or portion |
| 11 | | thereof may be deemed confidential
by the Secretary of |
| 12 | | State by rule or order and if so deemed shall not
be
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| 13 | | disclosed
to the public except by order of court or in |
| 14 | | court proceedings. The
failure to file any such report |
| 15 | | shall not affect the availability of such
exemption, but |
| 16 | | such failure to file any such report shall constitute a
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| 17 | | violation of subsection D of Section 12 of this Act, |
| 18 | | subject to the
penalties enumerated in Section 14 of this |
| 19 | | Act. The civil remedies
provided for in subsection A of |
| 20 | | Section 13 of this Act and the civil
remedies of rescission |
| 21 | | and appointment of a receiver, conservator,
ancillary |
| 22 | | receiver or ancillary conservator provided for in |
| 23 | | subsection F of
Section 13 of this Act shall not be |
| 24 | | available against any person by
reason of the failure to |
| 25 | | file any such report or on account of the contents of
any |
| 26 | | such report.
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| 1 | | H. Any offer, sale or issuance of a security to an |
| 2 | | accredited investor, whether made through a
qualified Internet |
| 3 | | portal or otherwise, if no commission or other remuneration is |
| 4 | | paid or given directly or indirectly for soliciting
any person |
| 5 | | in this State, except to broker-dealers and agents licensed in |
| 6 | | this State. (1) any natural person
who has, or is reasonably |
| 7 | | believed by the person relying upon this subsection
H to have, |
| 8 | | a net worth or joint net worth with that person's spouse,
at |
| 9 | | the time of the offer, sale or issuance, in excess of
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| 10 | | $1,000,000
excluding the value of a principal residence, or (2) |
| 11 | | any natural person who
had, or is reasonably believed
by the |
| 12 | | person relying upon this subsection H to have had, an income or
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| 13 | | joint income with that person's spouse, in excess of $200,000 |
| 14 | | in each of
the two most recent years and who reasonably |
| 15 | | expects, or is reasonably
expected to have, an income in excess |
| 16 | | of $200,000 in the
current year, or (3) any person that is not |
| 17 | | a natural person and in which
at least 90% of the equity |
| 18 | | interest is owned by persons who meet either of
the tests set |
| 19 | | forth in clauses (1) or (2) of this subsection H; provided
that |
| 20 | | such security is not offered or sold by means
of any general |
| 21 | | advertising or general solicitation in this State.
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| 22 | | I. Any offer, sale or issuance of securities to or for the |
| 23 | | benefit
of security holders of any person incident to a vote by |
| 24 | | such security
holders pursuant to such person's organizational |
| 25 | | document or any applicable
statute of the jurisdiction of such |
| 26 | | person's organization, on a merger,
consolidation, |
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| 1 | | reclassification of securities, or sale or transfer of
assets |
| 2 | | in consideration of or exchange for securities of the same or
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| 3 | | another person.
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| 4 | | J. Any offer, sale or issuance of securities in exchange |
| 5 | | for one
or more outstanding securities, claims or property |
| 6 | | interests, or partly
in such exchange and partly for cash, |
| 7 | | where such offer, sale or issuance
is incident to a |
| 8 | | reorganization, recapitalization, readjustment,
composition or |
| 9 | | settlement of a claim, as approved by a court of competent
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| 10 | | jurisdiction of the United States, or any state.
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| 11 | | K. Any offer, sale or issuance of securities for patronage,
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| 12 | | or as patronage refunds, or in connection with marketing |
| 13 | | agreements by
cooperative associations organized exclusively |
| 14 | | for agricultural, producer,
marketing, purchasing, or consumer |
| 15 | | purposes; and the sale of
subscriptions for or shares of stock |
| 16 | | of cooperative associations
organized exclusively for |
| 17 | | agricultural, producer, marketing, purchasing,
or consumer |
| 18 | | purposes, if no commission or other remuneration is paid or
|
| 19 | | given directly or indirectly for or on account of such |
| 20 | | subscription,
sale or resale, and if any person does not own |
| 21 | | beneficially more than 5%
of the aggregate amount of issued and |
| 22 | | outstanding capital stock of such
cooperative association.
|
| 23 | | L. Offers for sale or solicitations of offers to buy (but |
| 24 | | not the
acceptance thereof), of securities which are the |
| 25 | | subject of a pending
registration statement filed under the |
| 26 | | Federal 1933 Act and which are the
subject of a pending |
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| 1 | | application for registration under this Act.
|
| 2 | | M. Any offer or sale of preorganization subscriptions for |
| 3 | | any securities
prior to the incorporation, organization or |
| 4 | | formation of any issuer
under the laws of the United States, or |
| 5 | | any state, or the issuance by
such issuer, after its |
| 6 | | incorporation, organization or formation, of
securities |
| 7 | | pursuant to such preorganization subscriptions, provided the
|
| 8 | | number of subscribers does not exceed 25 and either (1) no |
| 9 | | commission
or other remuneration is paid or given directly or |
| 10 | | indirectly for or on
account of such sale or sales or issuance, |
| 11 | | or (2) if any commission or
other remuneration is paid or given |
| 12 | | directly or indirectly for or on account
of such sale or sales |
| 13 | | or issuance, the securities are not offered or sold
by any |
| 14 | | means of general advertising or general solicitation in this
|
| 15 | | State.
|
| 16 | | N. The execution of orders for purchase of securities by a |
| 17 | | registered
salesperson and dealer, provided such persons act as |
| 18 | | agent for the purchaser,
have made no solicitation of the order |
| 19 | | to purchase the securities, have no
direct interest in the sale |
| 20 | | or distribution of the securities ordered, receive
no |
| 21 | | commission, profit, or other compensation other than the |
| 22 | | commissions
involved in the purchase and sale of the securities |
| 23 | | and deliver to the
purchaser written confirmation of the order |
| 24 | | which clearly identifies the
commissions paid to the registered |
| 25 | | dealer.
|
| 26 | | O. Any offer, sale or issuance of securities, other than |
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| 1 | | fractional
undivided interests in an oil, gas or other mineral |
| 2 | | lease, right or
royalty, for the direct or indirect benefit of |
| 3 | | the issuer thereof, or of a
controlling person, whether through |
| 4 | | a dealer (acting either as principal
or agent) or otherwise, if |
| 5 | | the securities sold, immediately following
the sale or sales, |
| 6 | | together with securities already owned by the
purchaser, would |
| 7 | | constitute 50% or more of the equity interest of any
one |
| 8 | | issuer, provided that the number of purchasers is not more than |
| 9 | | 5 and
provided further that no commission, discount or other |
| 10 | | remuneration
exceeding 15% of the aggregate sale price of the |
| 11 | | securities is paid or
given directly or indirectly for or on |
| 12 | | account of the sale or sales.
|
| 13 | | P. Any offer, sale or issuance of securities
(except face |
| 14 | | amount certificate contracts and investment fund shares)
|
| 15 | | issued by and representing an interest in an issuer which is a |
| 16 | | business
corporation incorporated under the laws of this State,
|
| 17 | | the purposes of which are to provide capital and supervision |
| 18 | | solely for
the redevelopment of blighted urban areas located in |
| 19 | | a municipality in
this State and whose assets are located |
| 20 | | entirely within that municipality,
provided: (1) no |
| 21 | | commission, discount or other remuneration
is paid or given |
| 22 | | directly or indirectly for or on account of the sale or
sales |
| 23 | | of such securities; (2) the aggregate amount of any securities |
| 24 | | of
the issuer owned of record or beneficially by any one person |
| 25 | | will not exceed
the lesser of $5,000 or 4% of the equity |
| 26 | | capitalization of the issuer; (3) the
officers and directors of |
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| 1 | | the
corporation have been bona fide residents of the |
| 2 | | municipality not less than
3 years immediately preceding the |
| 3 | | effectiveness of the offering sheet for
the securities under |
| 4 | | this subsection P; and (4) the issuer files with the
Secretary |
| 5 | | of State an offering sheet descriptive of the securities |
| 6 | | setting
forth:
|
| 7 | | (a) the name and address of the issuer;
|
| 8 | | (b) the title and total amount of securities to be |
| 9 | | offered;
|
| 10 | | (c) the price at which the securities are to be |
| 11 | | offered; and
|
| 12 | | (d) such additional information as the Secretary of |
| 13 | | State may prescribe
by rule and regulation.
|
| 14 | | The Secretary of State shall within a reasonable time |
| 15 | | examine the
offering sheet so filed and, unless the Secretary |
| 16 | | of State shall make a
determination that the offering sheet so |
| 17 | | filed does not
conform to the requirements of this subsection |
| 18 | | P, shall declare the offering
sheet to be effective, which |
| 19 | | offering sheet shall continue effective for a
period of 12 |
| 20 | | months from the date it becomes effective. The fee for
|
| 21 | | examining the offering sheet shall be as established pursuant |
| 22 | | to Section
11a of this Act, and shall not be returnable in any |
| 23 | | event. The Secretary
of State shall by rule or regulation |
| 24 | | require the filing of a report or
reports of sales made to |
| 25 | | residents of this State in reliance upon the
exemption provided |
| 26 | | by this subsection P and prescribe the form of such
report and |
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| 1 | | the time within which such report shall be filed. The Secretary
|
| 2 | | of State shall prescribe by rule or regulation the amount of |
| 3 | | the fee for
filing any such report, but such fee shall not be |
| 4 | | less than the minimum
amount nor more than the maximum amount |
| 5 | | established pursuant to Section
11a of this Act, and shall not |
| 6 | | be returnable in any event. The Secretary
of State may impose, |
| 7 | | in such cases as he or she may deem appropriate, a penalty
for |
| 8 | | failure to file any such report in a timely manner, but no such |
| 9 | | penalty
shall exceed an amount equal to five times the filing |
| 10 | | fee. The contents
of any such report shall be deemed |
| 11 | | confidential and shall not be disclosed
to the public except by |
| 12 | | order of court or in court proceedings. The
failure to file any |
| 13 | | such report shall not affect the availability of such
|
| 14 | | exemption, but such failure to file any such report shall |
| 15 | | constitute a
violation of subsection D of Section 12 of this |
| 16 | | Act, subject to the
penalties enumerated in Section 14 of this |
| 17 | | Act. The civil remedies
provided for in subsection A of Section |
| 18 | | 13 of this Act and the civil
remedies of rescission and |
| 19 | | appointment of a receiver, conservator,
ancillary receiver or |
| 20 | | ancillary conservator provided for in subsection F of
Section |
| 21 | | 13 of this Act shall not be available against any person by |
| 22 | | reason
of the failure to file any such report or on account of |
| 23 | | the contents of any
such report.
|
| 24 | | Q. Any isolated transaction, whether effected by a dealer |
| 25 | | or
not.
|
| 26 | | R. Any offer, sale or issuance of a security to any person |
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| 1 | | who purchases
at least $150,000 of the securities being |
| 2 | | offered, where the purchaser's
total purchase price does not, |
| 3 | | or it is reasonably believed by the person
relying upon this |
| 4 | | subsection R that said purchase price does not, exceed
20 |
| 5 | | percent of the purchaser's net worth at the time of sale, or if |
| 6 | | a
natural person a joint net worth with that person's spouse, |
| 7 | | for one
or any combination of the following: (i) cash, (ii) |
| 8 | | securities for which
market quotations are readily available, |
| 9 | | (iii) an unconditional obligation
to pay cash or securities for |
| 10 | | which quotations are readily available,
which obligation is to |
| 11 | | be discharged within five years of the sale of the
securities |
| 12 | | to the purchaser, or (iv) the cancellation of any indebtedness
|
| 13 | | owed by the issuer to the purchaser; provided that such |
| 14 | | security is not
offered or sold by means of any general |
| 15 | | advertising or general solicitation
in this State.
|
| 16 | | S. Any offer, sale or issuance of a security to any person |
| 17 | | who is, or
who is reasonably believed by the person relying |
| 18 | | upon this subsection S to
be, a director, executive officer, or |
| 19 | | general partner of the issuer of the
securities being offered |
| 20 | | or sold, or any director, executive officer, or
general partner |
| 21 | | of a general partner of that issuer. For purposes of this
|
| 22 | | subsection S, "executive officer" shall mean the president, any |
| 23 | | vice
president in charge of a principal business unit, division |
| 24 | | or function
(such as sales, administration or finance), any |
| 25 | | other officer who performs
a policy making function, or any |
| 26 | | other person who performs similar policy
making functions for |
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| 1 | | the issuer. Executive officers of subsidiaries may be
deemed |
| 2 | | executive officers of the issuer if they perform such policy |
| 3 | | making
functions for the issuer.
|
| 4 | | A document being filed pursuant to this Section 4 shall be |
| 5 | | deemed filed,
and any fee paid pursuant to this Section 4 shall |
| 6 | | be deemed paid, upon the date
of actual receipt thereof by the |
| 7 | | Secretary of State.
|
| 8 | | T. An offer or sale of a security by an issuer that is |
| 9 | | organized
and, as of the time of the offer or sale, in good |
| 10 | | standing under
the laws of the State of Illinois, provided: |
| 11 | | (1) The offering meets all of the requirements of the
|
| 12 | | federal exemption for intrastate offerings provided in |
| 13 | | Section
3(a)(11) of the Securities Act of 1933 (15 U.S.C. |
| 14 | | 77c(a)(11)) and
Rule 147 adopted under the Securities Act |
| 15 | | of 1933 (17 CFR
230.147). |
| 16 | | (2) The aggregate purchase price of all securities sold |
| 17 | | by an issuer in reliance on the exemption under this |
| 18 | | subsection, within any 12-month period, does not exceed |
| 19 | | $20,000,000; unless the issuer has been in business for |
| 20 | | more than one full consecutive calendar year period and has |
| 21 | | made available (directly, or through a qualified Internet |
| 22 | | portal) to each prospective purchaser and the Secretary of |
| 23 | | State, copies of its most recent annual financial |
| 24 | | statements which have been audited by an independent |
| 25 | | auditor and certified by such auditor, and by one or more |
| 26 | | senior officers of the issuer, as fairly, completely and |
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| 1 | | accurately presenting the financial condition of the |
| 2 | | issuer, in all material respects, as of the dates indicated |
| 3 | | therein. In 2019 and every 5th year thereafter, the |
| 4 | | Secretary of State shall cumulatively adjust the dollar |
| 5 | | limitations in this paragraph (2) to reflect the change in |
| 6 | | the Consumer Price Index for all Urban Consumers published |
| 7 | | by the United States Department of Labor, Bureau of Labor |
| 8 | | Statistics, rounding each dollar limitation to the nearest |
| 9 | | $500,000. |
| 10 | | (3) The aggregate amount sold by an issuer to any |
| 11 | | purchaser (other than an accredited investor or an |
| 12 | | experienced investor) in an offering of securities made in |
| 13 | | reliance on the exemption provided in this subsection, |
| 14 | | within any consecutive 12-month period, does not exceed the |
| 15 | | greater of $10,000 or 10% of the purchaser's expected |
| 16 | | annual income in the year of sale. With respect to whether |
| 17 | | a purchaser has, or has not, exceeded the maximum purchase |
| 18 | | limitation provided in this paragraph (3) during the |
| 19 | | applicable 12-month period, an issuer may rely on the |
| 20 | | written self-representation of the purchaser, provided |
| 21 | | that the issuer has no knowledge, or other reason to |
| 22 | | believe, that such limitation has been exceeded by the |
| 23 | | purchaser. |
| 24 | | With respect to satisfaction of the foregoing, an
|
| 25 | | issuer may rely on the written self-representation of a
|
| 26 | | purchaser as to whether such purchaser has, or has
not, |
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| 1 | | exceeded such applicable maximum purchase limitation |
| 2 | | during
the applicable 12-month period, provided the issuer |
| 3 | | has no
knowledge, or other reason to believe, that such |
| 4 | | limitation has
been exceeded by the purchaser. |
| 5 | | (4) The issuer: |
| 6 | | (a) establishes a minimum and a maximum amount of
|
| 7 | | securities to be sold and a deadline for selling (or
|
| 8 | | otherwise getting commitments for the purchase of) the
|
| 9 | | established minimum amount of securities; |
| 10 | | (b) conspicuously discloses the information |
| 11 | | required pursuant to subparagraph (a) in any agreement |
| 12 | | evidencing a purchaser's
subscription to purchase |
| 13 | | securities of the issuer and that
the purchaser may |
| 14 | | cancel such commitment at any time upon
notice to the |
| 15 | | issuer and without penalty, if the minimum
target |
| 16 | | offering amount is not raised on or before the
proposed |
| 17 | | deadline; and |
| 18 | | (c) enters into an escrow agreement with a
|
| 19 | | qualified escrowee providing that, at a minimum: |
| 20 | | (i) all funds to be received in connection with |
| 21 | | the
proposed offering shall be delivered to, and |
| 22 | | held by, the qualified escrowee pursuant to the |
| 23 | | terms of the escrow
agreement; and |
| 24 | | (ii) the issuer shall not have access to the |
| 25 | | escrow
funds, or any portion thereof, until the |
| 26 | | aggregate funds
received by the qualified escrowee |
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| 1 | | in connection with
the proposed offering equals or |
| 2 | | exceeds the minimum amount
of securities to be sold |
| 3 | | as established by the issuer. |
| 4 | | (5) The issuer shall have made available to each |
| 5 | | prospective purchaser and the Secretary of State, copies of |
| 6 | | its most recent financial statements personally certified |
| 7 | | by one or more senior officers of the issuer as fairly, |
| 8 | | completely and accurately presenting the financial |
| 9 | | condition of the issuer, in all material respects, as of |
| 10 | | the dates indicated therein. |
| 11 | | (6) No commission or other remuneration is paid or |
| 12 | | given
directly or indirectly to any person or entity |
| 13 | | (including,
without limitation, any qualified Internet |
| 14 | | portal) for
soliciting any person in this State, except to |
| 15 | | broker-dealers
and agents licensed in this State. |
| 16 | | (7) Not less than 5 days before the earlier of
the |
| 17 | | first sale of securities made in reliance on the exemption |
| 18 | | provided in this subsection T,
or the use of any general |
| 19 | | solicitation with respect thereto
(other than a general |
| 20 | | announcement made by (or on behalf of) an issuer in
|
| 21 | | accordance with paragraph (13) of this subsection T), the |
| 22 | | issuer: |
| 23 | | (a) files a notice with the Secretary of State, in |
| 24 | | a
written or electronic form as prescribed by the |
| 25 | | Secretary
of State (which form the Secretary of State |
| 26 | | shall make
available on the Secretary of State's |
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| 1 | | Internet website),
which specifies that the issuer |
| 2 | | intends to make an
offering of securities in reliance |
| 3 | | on the exemption provided in this subsection T and
|
| 4 | | which includes the names and addresses of: (i) the
|
| 5 | | issuer; (ii) all persons or qualified Internet portals
|
| 6 | | that will sell or offer to sell the security on behalf |
| 7 | | of
the issuer; and (iii) the qualified escrowee engaged |
| 8 | | to
escrow the funds from the subject offering; further, |
| 9 | | for so long as the offering remains open, the issuer |
| 10 | | shall file a new notice with the Secretary of State
|
| 11 | | (without additional charge, provided such notice is
|
| 12 | | identified as an amendment to a previously filed |
| 13 | | notice)
if any information previously provided has
|
| 14 | | changed or has since become erroneous, false, or
|
| 15 | | materially misleading; |
| 16 | | (b) delivers a fully executed copy of the escrow
|
| 17 | | agreement required pursuant to subparagraph (c) of |
| 18 | | paragraph (4); further, for so long as the offering |
| 19 | | remains open, the
issuer shall promptly deliver to the
|
| 20 | | Secretary of State a fully executed copy of all
|
| 21 | | amendments to the escrow agreement; the information
|
| 22 | | provided pursuant to this subparagraph (b) shall not be |
| 23 | | a public
record and shall not be available for public |
| 24 | | inspection;
and |
| 25 | | (c) pays the notification filing fee established
|
| 26 | | under Section 11a of this Act. |
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| 1 | | The Secretary of State shall, within a reasonable time,
|
| 2 | | examine the materials filed pursuant to this paragraph (7) |
| 3 | | and, unless the Secretary
of State notifies the issuer (or |
| 4 | | the qualified Internet
portal, to the extent used), on or |
| 5 | | before the initial
commencement date of the offering, of |
| 6 | | his or her determination that any
one or more of the filed |
| 7 | | materials fails to conform to the
requirements of this |
| 8 | | subsection T, the proposed offering shall
be deemed |
| 9 | | permitted. |
| 10 | | The Secretary of State shall prescribe by rule the |
| 11 | | amount of the fee for filing the notice required in |
| 12 | | subparagraph (a), established pursuant to Section
11a of |
| 13 | | this Act, which shall not be returnable in any event. The
|
| 14 | | Secretary of State may impose, in such cases as he or she |
| 15 | | may
deem appropriate, a penalty for failure to file any |
| 16 | | such notice
in a timely manner, but no such penalty shall |
| 17 | | exceed an
amount equal to 5 times the filing fee. The |
| 18 | | contents of any
such notice or portion thereof may be |
| 19 | | deemed confidential by the
Secretary of State by rule or |
| 20 | | order and if so deemed shall not
be disclosed to the public |
| 21 | | except by order of court or in court
proceedings. The |
| 22 | | failure to file any such notice does not
affect the |
| 23 | | availability of such exemption, but such failure to
file |
| 24 | | any such report constitutes a violation of subsection
D of |
| 25 | | Section 12 of this Act, subject to the penalties in Section |
| 26 | | 14 of this Act. The civil remedies provided in
subsection A |
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| 1 | | of Section 13 of this Act and the civil remedies of
|
| 2 | | rescission and appointment of a receiver, conservator, |
| 3 | | ancillary
receiver, or ancillary conservator provided in |
| 4 | | subsection F
of Section 13 of this Act are not available |
| 5 | | against any
person by reason of the failure to file any |
| 6 | | such report or on
account of the contents of any such |
| 7 | | report. |
| 8 | | (8) The issuer provides a copy of the escrow
agreement, |
| 9 | | the disclosure document, and all other
documents or |
| 10 | | information then provided to the Secretary of
State under |
| 11 | | subparagraph (a) or (b) of paragraph (7) to each
|
| 12 | | prospective purchaser at the time the offer of securities |
| 13 | | is
made. Further, for so long as the offering remains open, |
| 14 | | the
issuer is required to promptly provide a copy to each
|
| 15 | | prospective and completed purchaser of all replacements, |
| 16 | | modifications, attachments, updates, or other information
|
| 17 | | provided to the Secretary of State pursuant to subparagraph |
| 18 | | (a) or (b) of paragraph (7). An issuer may satisfy the
|
| 19 | | reporting requirement of this paragraph (8) by making the
|
| 20 | | information available, in a printable format, on its own |
| 21 | | website
or through a qualified Internet portal provided |
| 22 | | such information
is promptly made available by the issuer |
| 23 | | and the issuer promptly alerts
each prospective purchaser |
| 24 | | or completed purchaser of the
availability of the |
| 25 | | information. |
| 26 | | (9) All payments for purchase of securities offered
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| 1 | | pursuant to the exemption provided under this subsection T |
| 2 | | are made directly to, and held by,
the qualified escrowee |
| 3 | | identified in the escrow agreement
required pursuant to |
| 4 | | subparagraph (c) of paragraph (4). |
| 5 | | (10) The issuer includes (and, to the extent a
|
| 6 | | qualified Internet portal is used, the qualified Internet
|
| 7 | | portal includes) the following legend conspicuously on the |
| 8 | | cover
page of any disclosure document delivered to a |
| 9 | | prospective
purchaser or to which a prospective purchaser |
| 10 | | has been
granted electronic access: |
| 11 | | IN MAKING AN INVESTMENT DECISION, INVESTORS MUST |
| 12 | | RELY
ON THEIR OWN EXAMINATION OF THE ISSUER AND THE |
| 13 | | TERMS
OF THE OFFERING, INCLUDING THE MERITS AND RISKS
|
| 14 | | INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED
|
| 15 | | BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR
|
| 16 | | DIVISION OR OTHER REGULATORY AUTHORITY. FURTHERMORE,
|
| 17 | | THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE
|
| 18 | | ACCURACY OR DETERMINED THE ADEQUACY OF THIS
DOCUMENT. |
| 19 | | ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL |
| 20 | | OFFENSE. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS |
| 21 | | ON TRANSFERABILITY AND RESALE AND MAY NOT
BE |
| 22 | | TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE |
| 23 | | SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE |
| 24 | | STATE SECURITIES LAWS, OR PURSUANT TO REGISTRATION OR |
| 25 | | EXEMPTION THEREFROM.
INVESTORS SHOULD BE AWARE THAT |
| 26 | | THEY WILL BE REQUIRED
TO BEAR THE FINANCIAL RISKS OF |
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| 1 | | THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME. |
| 2 | | (11) The issuer (directly or through a qualified |
| 3 | | Internet
portal) requires each purchaser to certify, in |
| 4 | | writing or
electronically, as follows: |
| 5 | | I UNDERSTAND AND ACKNOWLEDGE THAT: |
| 6 | | I am a resident of the State of Illinois. |
| 7 | | I am investing in a high-risk, speculative
|
| 8 | | business venture. I may lose all of my investment and
I |
| 9 | | can afford the loss of my investment. |
| 10 | | This offering has not been reviewed or approved
by |
| 11 | | any State or federal securities commission or
division |
| 12 | | or other regulatory authority and no
such person or |
| 13 | | authority has confirmed the accuracy or
determined the |
| 14 | | adequacy of any disclosure made to me
relating to this |
| 15 | | offering. |
| 16 | | The securities I am acquiring in this offering
are |
| 17 | | illiquid, there is no ready market for the
sale of such |
| 18 | | securities, it may be difficult or
impossible for me to |
| 19 | | sell or otherwise dispose of this investment, and, |
| 20 | | accordingly, I may be required
to hold this investment |
| 21 | | indefinitely. |
| 22 | | I may be subject to tax on my share of the
taxable |
| 23 | | income and losses of the company, whether or
not I have |
| 24 | | sold or otherwise disposed of my investment
or received |
| 25 | | any dividends or other distributions from
the company. |
| 26 | | ........ (Signature) |
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| 1 | | (12) The issuer (directly or through a qualified |
| 2 | | Internet
portal) obtains from each purchaser of a security |
| 3 | | offered under
this subsection T evidence that the purchaser |
| 4 | | is a resident of
this State and, if applicable, is an |
| 5 | | experienced investor or
accredited investor. Without |
| 6 | | limiting the generality of the
foregoing, and not to the |
| 7 | | exclusion of other reasonable methods
which may be used by |
| 8 | | the issuer in connection with the
foregoing, an issuer may |
| 9 | | rely: |
| 10 | | (a) on a copy of a valid driver's license (or |
| 11 | | third-party verification based on a purchaser's valid |
| 12 | | driver's license information), or verification |
| 13 | | (independently or by a third-party) of the state of |
| 14 | | origination of the purchaser's Internet Protocol (IP) |
| 15 | | address, for purposes of establishing an individual |
| 16 | | purchaser's residence, provided the issuer has no |
| 17 | | knowledge, or other reason to believe, that the |
| 18 | | individual purchaser is not a resident of the State; |
| 19 | | and |
| 20 | | (b) on representations signed, in writing or |
| 21 | | electronically, by a purchaser for purposes of |
| 22 | | establishing such purchaser's status as an experienced |
| 23 | | investor and identifying each of the requirements of |
| 24 | | Section 2.37 which apply to such purchaser (and, with |
| 25 | | respect to subsections (c), (d), (e), or (g) of Section |
| 26 | | 2.37, as applicable, a description of the applicable |
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| 1 | | license, advanced degree, or job position), provided |
| 2 | | the issuer has no knowledge, or other reason to |
| 3 | | believe, that such representations are, or may be, |
| 4 | | false in whole or in part; and |
| 5 | | (c) on representations signed, in writing or
|
| 6 | | electronically, by a purchaser for purposes of
|
| 7 | | establishing such purchaser's status as an accredited
|
| 8 | | investor, provided the issuer has no knowledge, or |
| 9 | | other
reason to believe, that such representations |
| 10 | | are, or may
be, false in whole or in part. |
| 11 | | (13) The issuer (and to the extent a qualified
Internet |
| 12 | | portal is used, such qualified Internet portal)
takes |
| 13 | | commercially reasonable measures to limit access to any
|
| 14 | | information concerning the offer or sale of the subject
|
| 15 | | securities to residents of this State. Notwithstanding the
|
| 16 | | foregoing, an issuer is permitted to disseminate (and
is |
| 17 | | not deemed in violation of this paragraph (13) for
|
| 18 | | disseminating) through a qualified Internet portal or
|
| 19 | | otherwise a general announcement regarding the issuer's |
| 20 | | intent to
make an offer in reliance on the exemption under |
| 21 | | this
subsection T, so long as such general announcement |
| 22 | | contains a
statement making it clear that the offering is |
| 23 | | directed only to
residents of this State and the |
| 24 | | information provided in such
general announcement is |
| 25 | | limited only to one or more of the
following: |
| 26 | | (a) a statement that the issuer is conducting an
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| 1 | | offering in reliance on the exemption under this
|
| 2 | | subsection T; |
| 3 | | (b) the name and web address of a qualified
|
| 4 | | Internet portal (if any) conducting the offering; |
| 5 | | (c) the minimum and maximum amount of the offering;
|
| 6 | | or |
| 7 | | (d) factual information about the legal identity
|
| 8 | | and business location of the issuer, limited to: the |
| 9 | | name
of the issuer; the address, phone number, and |
| 10 | | website (if
any) of the issuer; a one sentence |
| 11 | | description of the
business of the issuer; or the |
| 12 | | contact information of
a representative of the issuer. |
| 13 | | (14) The issuer (and to the extent a qualified Internet |
| 14 | | portal is used, the entity maintaining such qualified |
| 15 | | Internet portal) reasonably
believes that all purchasers |
| 16 | | are purchasing for investment and
not for sale in |
| 17 | | connection with a distribution of the security. |
| 18 | | (15) Until no securities issued under this exemption |
| 19 | | are outstanding, the issuer shall provide quarterly to each |
| 20 | | purchaser, free of charge, internally or accountant |
| 21 | | prepared quarterly financial statements of the issuer, |
| 22 | | certified by a senior officer of the issuer as fairly, |
| 23 | | completely and accurately presenting the financial |
| 24 | | condition of the issuer, in all material respects, as of |
| 25 | | the dates indicated therein. An issuer may satisfy the |
| 26 | | reporting requirement of this paragraph (15) by making the |
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| 1 | | information available on its own website or through a |
| 2 | | qualified Internet portal if the information is made |
| 3 | | available within 45 days after the end of each fiscal |
| 4 | | quarter, the information remains available until the |
| 5 | | succeeding quarterly report is issued, and the issuer |
| 6 | | promptly alerts each purchaser of the availability of the |
| 7 | | information. |
| 8 | | (16) The issuer (and to the extent a qualified Internet
|
| 9 | | portal is used, such qualified Internet portal) maintains
|
| 10 | | records of all offers and sales of securities made
pursuant |
| 11 | | to the exemption granted by this subsection T and provides |
| 12 | | ready access to such records to the Secretary of State,
|
| 13 | | upon reasonable prior written request. |
| 14 | | (17) The issuer is not, either before or as a result of
|
| 15 | | the offering: |
| 16 | | (a) an investment company, as defined in Section 3 |
| 17 | | of the Investment Company Act of 1940 (15 U.S.C. |
| 18 | | 80a-3), as amended and in effect (unless the issuer |
| 19 | | qualifies for exclusion from such definition pursuant |
| 20 | | to one or more of the exceptions provided in Section |
| 21 | | 3(c) of the Investment Company Act of 1940, any other |
| 22 | | provision of the Investment Company Act of 1940, or any |
| 23 | | administrative rule or regulation promulgated with |
| 24 | | respect to the Investment Company Act of 1940 or in |
| 25 | | connection therewith); or |
| 26 | | (b) subject to the reporting requirements of |
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| 1 | | Section 13 or 15(d) of the Securities Exchange Act of |
| 2 | | 1934 (15 U.S.C. 78m or 15 U.S.C. 78o(d). |
| 3 | | (18) Neither the issuer, nor any person affiliated with
|
| 4 | | the issuer (either before or as a result of the offering), |
| 5 | | nor
the offering itself, nor the qualified Internet portal |
| 6 | | (to the
extent used) is subject to disqualification |
| 7 | | established by the
Secretary of State by rule or contained |
| 8 | | in the Securities Act of 1933
(15 U.S.C. 77c(a)(11)) and |
| 9 | | Rule 147 adopted under the Securities Act of 1933 (17 CFR |
| 10 | | 230.147), unless both of the following are
met: |
| 11 | | (a) on a showing of good cause and without
|
| 12 | | prejudice to any other action by the Secretary of |
| 13 | | State,
the Secretary of State determines that it is not |
| 14 | | necessary
under the circumstances that an exemption is |
| 15 | | denied; and |
| 16 | | (b) the issuer establishes that it made a factual
|
| 17 | | inquiry into whether any disqualification existed |
| 18 | | under
this paragraph (18), but did not know, and in the |
| 19 | | exercise of reasonable care could not have known, that |
| 20 | | a
disqualification existed under this paragraph (18); |
| 21 | | the nature
and scope of the requisite inquiry will vary |
| 22 | | based on the
circumstances of the issuer and the other |
| 23 | | offering
participants. |
| 24 | | (Source: P.A. 90-70, eff. 7-8-97; 91-809, eff. 1-1-01.)
|
| 25 | | (815 ILCS 5/8d new) |
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| 1 | | Sec. 8d. Offerings made through
qualified Internet |
| 2 | | portals. An issuer may make an offering or
sale of securities |
| 3 | | pursuant to subsection T of Section 4 of this Act
through the |
| 4 | | use of one or more qualified Internet portals, subject to
the |
| 5 | | following: |
| 6 | | (a) The Internet portal shall at all times be owned by |
| 7 | | a
corporation or other legal entity which is either |
| 8 | | organized
under the laws of, or is otherwise qualified to |
| 9 | | do business in,
this State and the entity shall be in good |
| 10 | | standing in this State as of the date of the proposed |
| 11 | | offering of securities. |
| 12 | | (b) The Internet portal shall establish and maintain |
| 13 | | commercially reasonable measures to limit access to any |
| 14 | | information concerning an offer or sale of the subject |
| 15 | | securities (other than information permitted of the type |
| 16 | | permitted in connection with a general announcement by the |
| 17 | | issuer pursuant to paragraph (13) of subsection T of |
| 18 | | Section 4) to only residents of this State. Without |
| 19 | | limiting the generality of the foregoing, and not to the |
| 20 | | exclusion of other reasonable methods which may be utilized |
| 21 | | by the Internet portal in connection with the foregoing, an |
| 22 | | Internet portal may rely: |
| 23 | | (i) for purposes of access to offering materials in |
| 24 | | connection with a proposed offering, a representation |
| 25 | | signed, in writing or electronically, by an individual |
| 26 | | prospective purchaser, or verification (independently |
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| 1 | | or by a third-party) of the state of origination of the |
| 2 | | purchaser's Internet Protocol (IP) address, for |
| 3 | | purposes of establishing such purchaser's residence, |
| 4 | | provided the entity maintaining the Internet portal |
| 5 | | has no knowledge, or other reason to believe, that the |
| 6 | | individual purchaser is not a resident of the State; |
| 7 | | and |
| 8 | | (ii) in connection with an actual purchase and sale |
| 9 | | of a security pursuant to a proposed offering, on a |
| 10 | | copy of a valid driver's license (or third-party |
| 11 | | verification based on a purchaser's valid driver's |
| 12 | | license information), or verification (independently |
| 13 | | or by a third-party) of the state of origination of the |
| 14 | | purchaser's Internet Protocol (IP) address, for |
| 15 | | purposes of establishing an individual purchaser's |
| 16 | | residence, provided the entity maintaining the |
| 17 | | Internet portal has no knowledge, or other reason to |
| 18 | | believe, that the individual purchaser is not a |
| 19 | | resident of the State. |
| 20 | | (c) The Internet portal shall establish and maintain |
| 21 | | (during the time the offering appears on the Internet |
| 22 | | portal) a secure method of communication through the |
| 23 | | Internet portal itself that will permit potential |
| 24 | | investors to communicate with one another and with |
| 25 | | representatives of the issuer about the offering. Further, |
| 26 | | the foregoing communications must be made visible and |
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| 1 | | accessible (at all times during the time the offering |
| 2 | | appears on the Internet portal) to all those with access to |
| 3 | | the offering materials of issuer. |
| 4 | | (d) The Internet portal shall establish and maintain a
|
| 5 | | secure method of communication through the Internet portal
|
| 6 | | itself that will permit the issuer and purchasers to |
| 7 | | communicate
with one another. |
| 8 | | (e) The Internet portal: |
| 9 | | (1) shall be a registered broker-dealer under the
|
| 10 | | Securities Exchange Act of 1934 (15 U.S.C. 78o); |
| 11 | | (2) shall be a funding portal registered under the
|
| 12 | | Securities Act of 1933 (15 U.S.C. 77d-1) and the
|
| 13 | | Securities and Exchange Commission has adopted rules
|
| 14 | | under authority of Section 3(h) of the Securities
|
| 15 | | Exchange Act of 1934 (15 U.S.C. 78c) and Section
304 of |
| 16 | | the Jumpstart Our Business Startups
Act (P.L. 112-106) |
| 17 | | governing funding portals; |
| 18 | | (3) shall be a dealer or an investment advisor
|
| 19 | | registered and in good standing under this Act as of
|
| 20 | | the date of any offer or sale of securities made
|
| 21 | | through the Internet portal; or |
| 22 | | (4) shall, to the extent it meets
the |
| 23 | | qualifications for exemption from registration
|
| 24 | | pursuant to subsection (g) of this Section: |
| 25 | | (A) file, not later than 30 days
before the |
| 26 | | date of the first offer or sale of
securities made |
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| 1 | | within this State, an
application for |
| 2 | | qualification (or renewal of
qualification, as |
| 3 | | applicable) as a qualified
Internet portal with |
| 4 | | the Secretary of State, in
writing or in electronic |
| 5 | | form as prescribed by
the Secretary of State, which |
| 6 | | the Secretary of
State shall make available as an |
| 7 | | electronic
document on the Secretary of State's |
| 8 | | Internet
website, containing such information and
|
| 9 | | required deliveries as specified therein; and |
| 10 | | (B) pay the application filing fee
established |
| 11 | | under Section 11a of this Act; the Secretary of |
| 12 | | State shall, within a reasonable
time, examine the |
| 13 | | filed application and other
materials filed and, |
| 14 | | unless the Secretary of State
notifies the |
| 15 | | Internet portal of the rejection of
such |
| 16 | | application (or renewal application, as
|
| 17 | | applicable) on or before the initial commencement |
| 18 | | date of the offering, the Internet portal shall be |
| 19 | | deemed
to be a qualified Internet portal for |
| 20 | | purposes of this
Act. |
| 21 | | (f) If any change occurs in the information submitted |
| 22 | | by,
or on behalf of, an Internet portal to the Secretary of |
| 23 | | State,
an Internet portal shall notify the Secretary of |
| 24 | | State within 30
days after such change occurs and shall |
| 25 | | provide the Secretary of
State with such additional |
| 26 | | information (if any) requested by the
Secretary of State in |
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| 1 | | connection therewith. |
| 2 | | (g) Notwithstanding anything contained in this Act to |
| 3 | | the
contrary, neither an Internet portal nor its owning or |
| 4 | | operating
entity is required to register as a dealer or an
|
| 5 | | investment advisor under this Act if each of the following |
| 6 | | applies
with respect to the Internet portal and its owning |
| 7 | | or operating
entity: |
| 8 | | (1) It does not solicit purchases, sales, or offers
|
| 9 | | to buy the securities offered or displayed on the
|
| 10 | | Internet portal. |
| 11 | | (2) It does not collect or hold funds in
connection |
| 12 | | with any purchase, sale, or offer to buy any
securities |
| 13 | | offered or displayed on the Internet portal. |
| 14 | | (3) It does not compensate employees, agents, or
|
| 15 | | other persons for the solicitation or based on the sale
|
| 16 | | of securities displayed or referenced on the Internet
|
| 17 | | portal. |
| 18 | | (4) It is not compensated based on the amount of
|
| 19 | | securities sold. |
| 20 | | (5) The fee it charges an issuer for an offering of |
| 21 | | securities on the Internet portal is a fixed amount for |
| 22 | | each offering, a variable amount based on the length of |
| 23 | | time that the securities are offered on the Internet |
| 24 | | portal, a variable amount based on the total proposed |
| 25 | | offering amount, or any combination of such fixed and |
| 26 | | variable amounts. |
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| 1 | | (6) It does not offer investment advice or
|
| 2 | | recommendations; however, an Internet portal
is not |
| 3 | | deemed to be offering investment advice or
|
| 4 | | recommendations simply by virtue of: |
| 5 | | (A) selecting transactions in which the
|
| 6 | | Internet portal shall serve as an intermediary; |
| 7 | | (B) establishing reasonable selection criteria
|
| 8 | | for an issuer to meet in order to establish an |
| 9 | | offer or
sale of securities through the Internet |
| 10 | | portal; |
| 11 | | (C) establishing reasonable selection criteria
|
| 12 | | for a potential purchaser to meet in order to
|
| 13 | | participate in an offer or sale of securities made
|
| 14 | | through the Internet portal; or |
| 15 | | (D) terminating an issuer transaction at any
|
| 16 | | time before the first sale of the securities of |
| 17 | | such
issuer if the Internet portal determines such |
| 18 | | action
is appropriate, after reasonable due |
| 19 | | diligence, to
protect potential purchasers and the |
| 20 | | Internet portal
is able to direct the qualified |
| 21 | | escrowee to return all funds then provided by |
| 22 | | potential purchasers, if
any. |
| 23 | | (7) It does not engage in such other
activities as |
| 24 | | the Secretary of State, by rule, determines
are |
| 25 | | prohibited of such an Internet portal.
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| 1 | | (815 ILCS 5/11a) (from Ch. 121 1/2, par. 137.11a)
|
| 2 | | Sec. 11a. Fees.
|
| 3 | | (1) The Secretary of State shall by rule or
regulation |
| 4 | | impose and shall collect reasonable fees necessary for
the |
| 5 | | administration of this Act including, but not limited to, fees |
| 6 | | for
the following purposes:
|
| 7 | | (a) filing an application pursuant to paragraph (2) of |
| 8 | | subsection F of
Section 4 of this Act;
|
| 9 | | (b) examining an application and report pursuant to |
| 10 | | paragraph (2) of
subsection F of Section 4 of this Act;
|
| 11 | | (c) filing a report pursuant to subsection G of Section |
| 12 | | 4 of this Act,
determined
in accordance with paragraph (4) |
| 13 | | of subsection G of Section 4 of this Act;
|
| 14 | | (d) examining an offering sheet pursuant to subsection |
| 15 | | P of Section 4 of
this Act;
|
| 16 | | (e) filing a report pursuant to subsection P of Section |
| 17 | | 4, determined
in accordance with subsection P of Section 4 |
| 18 | | of this Act;
|
| 19 | | (f) examining an application to register securities |
| 20 | | under
subsection B of Section 5 of this Act;
|
| 21 | | (g) examining an amended or supplemental prospectus |
| 22 | | filed
pursuant to the undertaking required by |
| 23 | | sub-paragraph (i) of paragraph (2)
of subsection B of |
| 24 | | Section 5 of this Act;
|
| 25 | | (h) registering or renewing registration of securities |
| 26 | | under Section 5,
determined in accordance with subsection C |
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| 1 | | of Section 5 of this Act;
|
| 2 | | (i) registering securities in excess of the amount |
| 3 | | initially registered,
determined in accordance with |
| 4 | | paragraph (2) of subsection C of Section 5 of
this Act;
|
| 5 | | (j) failure to file timely an application for renewal |
| 6 | | under subsection E
of Section 5 of this Act;
|
| 7 | | (k) failure to file timely any document or information |
| 8 | | required
under Section 5 of this Act;
|
| 9 | | (l) examining an application to register face amount
|
| 10 | | certificate contracts under subsection B of Section 6 of |
| 11 | | this Act;
|
| 12 | | (m) examining an amended or supplemental prospectus |
| 13 | | filed
pursuant to the undertaking required by |
| 14 | | sub-paragraph (f) of paragraph (2)
of subsection B of |
| 15 | | Section 6 of this Act;
|
| 16 | | (n) registering or renewing registration
of face |
| 17 | | amount certificate contracts under Section 6 of this Act;
|
| 18 | | (o) amending a registration of face amount certificate
|
| 19 | | contracts pursuant to subsection E of Section 6 of this Act |
| 20 | | to add any
additional
series, type or class of contract;
|
| 21 | | (p) failure to file timely an application for renewal |
| 22 | | under subsection
F of Section 6 of this Act;
|
| 23 | | (q) adding to or withdrawing from deposits with respect |
| 24 | | to
face amount certificate contracts pursuant to |
| 25 | | subsection H of Section 6, a
transaction charge payable at |
| 26 | | the times and in the manner specified in
subsection H of |
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| 1 | | Section 6 (which transaction charge shall be in addition to
|
| 2 | | the annual fee called for by subsection H of Section 6 of |
| 3 | | this Act);
|
| 4 | | (r) failure to file timely any document or information |
| 5 | | required
under Section 6 of this Act;
|
| 6 | | (s) examining an application to register investment |
| 7 | | fund
shares under subsection B of Section 7 of this Act;
|
| 8 | | (t) examining an amended or supplemental prospectus |
| 9 | | filed
pursuant to the undertaking required by |
| 10 | | sub-paragraph (f) of paragraph (2)
of subsection B of |
| 11 | | Section 7 of this Act;
|
| 12 | | (u) registering or renewing registration of investment |
| 13 | | fund shares
under Section 7 of this Act;
|
| 14 | | (v) amending a registration of investment fund shares
|
| 15 | | pursuant to subsection D of Section 7 of this Act to |
| 16 | | register an additional
class or
classes of investment fund |
| 17 | | shares;
|
| 18 | | (w) failure to file timely an application for renewal |
| 19 | | under paragraph
(l) of subsection G of Section 7 of this |
| 20 | | Act;
|
| 21 | | (x) examining an application for renewal of |
| 22 | | registration of
investment fund shares under paragraph (2) |
| 23 | | of subsection G of Section 7 of
this Act;
|
| 24 | | (y) failure to file timely any document or information |
| 25 | | required under
Section 7 of this Act;
|
| 26 | | (z) filing an application for registration or |
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| 1 | | re-registration of a
dealer or limited Canadian dealer |
| 2 | | under Section 8 of this Act for each
office in this State;
|
| 3 | | (aa) in connection with an application for the |
| 4 | | registration or
re-registration of a salesperson under |
| 5 | | Section 8 of or this Act, for the
following purposes:
|
| 6 | | (i) filing an application;
|
| 7 | | (ii) a Securities Audit and Enforcement Fund fee; |
| 8 | | and
|
| 9 | | (iii) a notification filing of federal covered |
| 10 | | investment
advisers;
|
| 11 | | (bb) in connection with an application for the |
| 12 | | registration or
re-registration of an investment adviser |
| 13 | | under Section 8 of this Act;
|
| 14 | | (cc) failure to file timely any document or information |
| 15 | | required
under Section 8 of this Act;
|
| 16 | | (dd) filing a consent to service of process under |
| 17 | | Section 10 of this
Act;
|
| 18 | | (ee) issuing a certificate pursuant to subsection B of |
| 19 | | Section 15 of
this Act;
|
| 20 | | (ff) issuing a certified copy pursuant to subsection C |
| 21 | | of Section 15
of
this Act;
|
| 22 | | (gg) issuing a non-binding statement pursuant to |
| 23 | | Section 15a of this
Act;
|
| 24 | | (hh) filings by Notification under Section 2a;
|
| 25 | | (ii) notification filing of federal Regulation D, |
| 26 | | Section 506 offering
under the
Federal 1933 Act;
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| 1 | | (jj) notification filing of securities and closed-end |
| 2 | | investment company
securities;
|
| 3 | | (kk) notification filing of face amount certificate |
| 4 | | contracts;
|
| 5 | | (ll) notification filing of open-end investment |
| 6 | | company securities;
|
| 7 | | (mm) filing a report pursuant to subsection D of |
| 8 | | Section 4 of this Act;
|
| 9 | | (nn) in connection with the filing of an application |
| 10 | | for registration or
re-registration of an investment |
| 11 | | adviser representative under subsection D of
Section 8 of |
| 12 | | this Act; .
|
| 13 | | (oo) filing a notice pursuant to paragraph (6) of |
| 14 | | subsection T
of Section 4 of this Act; and |
| 15 | | (pp) applying for qualification, or renewing |
| 16 | | qualification, as a
qualified Internet portal pursuant to |
| 17 | | paragraph (iv) of subsection
(b) of Section 8d of this Act. |
| 18 | | (2) The Secretary of State may, by rule or regulation, |
| 19 | | raise or lower
any fee imposed by, and which he or she is |
| 20 | | authorized by law to collect
under, this Act.
|
| 21 | | (Source: P.A. 90-70, eff. 7-8-97; 91-357, eff. 7-29-99; revised |
| 22 | | 12-11-14.)
|
| 23 | | (815 ILCS 5/18.1)
|
| 24 | | Sec. 18.1. Additional fees. In addition to any other fee |
| 25 | | that the
Secretary of State may impose and collect pursuant to |
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| 1 | | the authority contained
in Sections 4, 8, and 11a of this Act, |
| 2 | | beginning on
July 1, 2003 the Secretary of State shall also |
| 3 | | collect the following additional
fees:
|
|
| 4 | | Securities offered or sold under the Uniform |
|
|
| 5 | | Limited Offering Exemption Pursuant to |
|
|
| 6 | | Section 4.D of the Act............................ |
$100 |
|
| 7 | | Securities offered or sold under the Uniform | | 8 | | Limited Offering Exemption pursuant to subsection | | 9 | | T of Section 4 of this Act. | $100 |
|
| 10 | | Registration and renewal of a dealer.............. |
$300 |
|
| 11 | | Registration and renewal of a qualified Internet | | 12 | | portal. | $300 |
|
| 13 | | Registration and renewal of an investment adviser. |
$200 |
|
| 14 | | Federal covered investment adviser notification |
|
|
| 15 | | filing and annual notification filing............. |
$200 |
|
| 16 | | Registration and renewal of a salesperson......... |
$75 |
|
| 17 | | Registration and renewal of an investment adviser |
|
|
| 18 | | representative and a federal covered |
|
|
| 19 | | investment adviser representative................. |
$75 |
|
| 20 | | Investment fund shares notification filing and annual |
| 21 | | notification filing:
$800 plus $80 for each series, class, or |
| 22 | | portfolio.
|
| 23 | | All fees collected by the Secretary of State pursuant to |
| 24 | | this amendatory Act
of the 93rd General Assembly shall be |
| 25 | | deposited into the General Revenue Fund
in the State treasury.
|