(1) Pursuant to the authority delegated to
the Commissioner by Section
10-5-12 of the Act, any offer or sale of securities offered or sold in compliance with
SEC Rule 505 adopted pursuant to the Securities Act of 1933, including those
exempt by application of Rule 508 under the Securities Act of 1933, that is
made in accordance with the conditions and limitations set forth below, is
determined to be exempt from the registration provisions of Section
10-5-20 of the Act if:
(a) No commission, fee, or
other remuneration is paid or given, directly or indirectly, to any
broker-dealer for soliciting any prospective purchaser in this State unless the
broker-dealer is appropriately registered under the Act. It is a defense to a
violation of this subsection if the issuer sustains the burden of proof that
the issuer did not know and in the exercise of reasonable care could not have
known that the person who received a commission, fee, or other remuneration was
not properly registered;
(b) The
issuer shall file with the Commissioner no later than fifteen (15) Business
Days after the receipt of consideration or the delivery of a subscription
agreement by an investor in this State that is the result of any offer made in
reliance upon this exemption:
1. A copy of the
most recently filed Form D as filed with the SEC, and
2. A non-refundable filing fee of
$250.00.
(c) In all
sales to investors, other than Accredited Investors, in this State, one (1) of
the following conditions must be satisfied or the issuer and any person acting
on its behalf shall have reasonable grounds to believe, and after making
reasonable inquiry shall believe, that one (1) of the following conditions is
satisfied:
1. The investment is suitable for
the purchaser upon the basis of facts, if any, disclosed by the purchaser as to
the purchaser's other security holdings, financial situation, and needs. For
purposes of this condition only, it may be presumed that, if the investment
does not exceed ten percent (10%) of the investor's net worth, it is suitable;
or
2. The purchaser, either alone
or with his or her Purchaser Representative or representatives, has the
knowledge and experience in financial and business matters that he or she is
capable of evaluating the merits and risks of the prospective
investment.
(d) A
failure to comply with a term, condition, or requirement of subdivisions (a),
(b) or (c) will not result in loss of the exemption from the requirements of
Section
10-5-20 of the Act for any offer or sale to a particular individual or entity if the
person relying on the exemption shows:
1. The
failure to comply did not pertain to a term, condition, or requirement directly
intended to protect that particular individual or entity;
2. The failure to comply was insignificant
with respect to the Offering as a whole; and
3. A good faith and reasonable attempt was
made to comply with all applicable terms, conditions, and requirements of
subdivisions (a), (b), and (c).
(e) The Commissioner, at his or her
discretion, may waive one or more conditions of this Rule if the Commissioner
determines, upon a showing of good cause, that it is not necessary under the
circumstances.
(2) In
the event the Offering is to continue pursuant to this exemption more than
twelve (12) months after the date of the initial filing made pursuant to this
exemption, then it shall be necessary for the issuer to file a renewal notice
on or prior to the one year anniversary of the original filing date, containing
a completed SEC Form D and a non-refundable filing fee in the amount of
$100.00.
(3) The filings and fees
required by this Rule may be made electronically if permitted by the
Commissioner.
(4) Nothing in this
exemption is intended to or should be construed as in any way relieving issuers
or persons acting on behalf of issuers from providing disclosure to prospective
investors adequate to satisfy the antifraud provisions of Section
10-5-50 of the Act in view of the objective of this section, and purposes and policies
underlying the Act.
(5) This
exemption shall not apply to those transactions offered and sold in reliance
upon 506 of SEC Regulation D or any other Offering or security otherwise exempt
under Sections
10-5-10 through
10-5-12 of the Act or Rule or Order of the Commissioner.
(6) The exemption authorized by this section
shall be known and may be cited as the "Georgia Uniform Limited Offering
Exemption" or "Georgia ULOE".
O.C.G.A. Secs.
10-5-3, 10-5-10, 10-5-12, 10-5-70.
