Current through Register Vol. 63, No. 9, September 1, 2024
(1) The North
American Securities Administrators Association, Inc., has adopted a Statement
of Policy regarding Selling Expenses and Selling Security Holders. This rule is
designed to parallel, with modifications, the Statement of Policy regarding
Selling Expenses and Selling Securities Holders adopted by the North American
Securities Administrators Association, Inc. Except as otherwise provided
pursuant to sections (5) and (6) of this rule, the provisions of this rule will
apply to offerings of securities registered pursuant to ORS
59.065.
(2) Except for offerings by issuers specified
in section (5) of this rule, an Application to Register Securities filed
pursuant to ORS 59.065 may be denied by the
Director pursuant to ORS
59.105(1)(a) or
(h) if the selling expenses of the offering
exceed 15 percent of the aggregate offering price (before deducting discounts
and commissions) as computed only on the portion of the aggregate offering
price when and as paid to the issuer.
(3) Selling expenses shall mean:
(a) Total underwriting and brokerage
discounts and commissions;
(b)
Accountable and non-accountable fees or expenses to be paid to the underwriter
or broker-dealer;
(c) Underwriters'
attorney fees and expenses paid by the issuer;
(d) Fees payable pursuant to consulting or
financial advisory agreements or similar arrangements;
(e) Printing and engraving
expenses;
(f) Advertising and other
promotional expenses;
(g) Charges
of transfer agents, registrars, indenture trustees, escrow holders,
depositories, engineers, appraisers and other experts; and
(h) Any other expenses incurred by the issuer
directly related to the offering and sale of the securities, excluding:
(A) Accountants' fees and expenses;
(B) Issuer's attorney fees and
expenses;
(C) Expenses of
qualification, including issue taxes and registration fees, for the sale of
securities under Federal and State laws; and
(D) Options, future registration rights and
rights of first refusal granted to underwriters.
(4) In any event, the selling
expenses and all other costs associated with an offering subject to this rule,
including those tangible costs set forth in paragraphs (3)(h)(A) through (C) of
this rule, must be reasonable. Selling expenses and all other costs associated
with an offering subject to this rule which exceed 25 percent of the aggregate
offering price (before deducting discounts and commissions) shall be presumed
to be unreasonable.
(5) The
following offerings by issuers shall not be governed by section (2) of this
rule, but selling expenses and other costs in connection with such offerings
must be reasonable:
(a) Partnerships,
corporations or other similar organizations, formed and operated for the
primary purpose of investment in or the operation of or gain from commodity
pools;
(b) Partnerships or other
similar organizations, other than corporations, formed and operated for the
primary purpose of investment in or the operation of or gain from an interest
in equipment, including equipment leases;
(c) Partnerships or other similar
organizations, other than corporations, formed and operated for the primary
purpose of investment in or the operation of or gain from the exploration for
oil, gas or other hydrocarbon substances;
(d) Partnerships or other similar
organizations, other than corporations, formed and operated for the primary
purpose of investment in or the operation of or gain from an interest in real
property, including such entities formed to make or invest in mortgage
loans;
(e) Offerings by issuers
pursuant to OAR 441-065-0030, which shall be
subject to OAR 441-065-0030(1)(h);
(f) Offerings by issuers pursuant to OAR
441-065-0035;
(g) Offerings by issuers pursuant to OAR
441-065-0060 through
441-065-0240, which shall be subject to OAR
441-065-0140; and
(h) Offerings by issuers pursuant to OAR
441-065-0270.
(6) An Application to Register
Securities that includes selling security holders and is filed pursuant to OAR
441-065-0020 or
441-065-0260 may be denied by
the Director pursuant to ORS
59.105(1)(a)
unless the following conditions are met:
(a)
Selling security holders shall pay a pro rata share of all additional selling
expenses that are the result of the inclusion of their securities in the
offering; and
(b) The prospectus or
offering document shall disclose the amount of selling expenses which the
selling security holders shall pay.
(7) With the exception of underwriter's or
broker-dealer's discounts or commissions, the provisions of subsections (6)(a)
and (b) of this rule shall not apply if:
(a)
The security holders have a written agreement with the issuer, that was entered
into one year or more prior to the filing of the Application to Register
Securities, whereby someone other than the selling security holders has agreed
to pay all of the selling security holders' selling expenses;
(b) The agreement was arrived at through
arm's-length negotiations; and
(c)
The selling security holders have held their securities for at least one year
prior to the filing of the Application to Register Securities.
(8) The Director may, by order,
impose a condition requiring the Registrant to file with the Securities Section
a written report setting forth the actual amounts of selling expenses and other
costs incurred in connection with the offering.
Stat. Auth.: ORS
59.085 & ORS
59.285
Stats. Implemented: ORS
59.085
