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The Oregon Administrative Rules contain OARs filed through November 15, 2014
 
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DEPARTMENT OF CONSUMER AND BUSINESS SERVICES,
DIVISION OF FINANCE AND CORPORATE SECURITIES

 

DIVISION 65

REGISTRATION OF SECURITIES

441-065-0001

Fees for Registration of Securities

Pursuant to ORS 59.065, the Director sets the following fees for registration of securities:

(1) For initial registration, a fee of 1/10 of 1% of the amount offered in Oregon, with a minimum fee of $200 and a maximum fee of $1,500.

(2) For renewal of a current registration, a fee of 1/10 of 1% of the amount offered in Oregon, with a minimum fee of $200 and a maximum fee of $1,500.

(3) To increase the aggregate offering amount of a current registration, a fee calculated for registration of the desired aggregate offering amount less fees previously paid for the current registration, but not less than $100. Amending the aggregate offering amount does not extend the expiration date of the current registration.

Stat. Auth.: ORS 59.065
Stats. Implemented: ORS 59.065, 59.070
Hist.: FCS 2-2003(Temp), f. & cert. ef. 11-26-03 thru 5-21-04; FCS 1-2004, f. & cert. ef. 5-19-04

441-065-0010

Types of Registration

Types of registration. Securities may be registered under one of the following provisions:

(1) Registration by qualification (OAR 441-065-0020).

(2) Registration by filing (OAR 441-065-0030).

(3) Registration by multijurisdictional coordination (OAR 441-065-0035).

(4) Registration for resale, trading, or dealing (OAR 441-065-0040).

(5) Registration for condominium securities (OAR 441-065-0050).

(6) Registration for non-public offerings not exceeding $500,000 including under SEC Rule 504 (OAR 441-065-0220).

(7) Registration for SCOR offerings not exceeding $1,000,000 including under SEC Rule 504 (OAR 441-065-0225).

(8) Registration for non-public offerings not exceeding $5,000,000 including under SEC Rule 505 (OAR 441-065-0230).

(9) Registration for generic real estate paper offerings (OAR 441-065-0260).

(10) Registration for certain compensatory benefit plans and contracts (OAR 441-065-0270).

Stat. Auth.: ORS 59.065 & ORS 59.285
Stats. Implemented: ORS 59.065
Hist.: FCS 5-1987(Temp), f. 9-24-87, ef. 9-28-87; FCS 5-1988, f. 3-22-88, cert. ef. 3-25-88, Renumbered from 815-030-0050(1); FCS 3-1991, f. & cert. ef. 8-23-91; FCS 7-2000; f. & cert. ef. 6-2-00

441-065-0015

When Registration Application Deemed Abandoned

(1) For purposes of this rule, the term "application" includes all documents, information and fees prescribed for the registration of securities under ORS 59.065 and OAR 441, division 65.

(2) An application shall be deemed deficient when:

(a) Insufficient fees have been paid and the Director has notified the applicant that the fees are insufficient;

(b) Documents required by the rules in OAR 441, division 65 have not been submitted by the applicant;

(c) Additional information requested by the Director as permitted by the rules in OAR 441, division 65 has not been submitted to the Director by the applicant; or

(d) Changes to disclosure documents requested by the Director have not been submitted to the Director by the applicant.

(3) An application for registration of securities is deemed abandoned if:

(a) The application has been on file for a minimum of six (6) months;

(b) The application is deficient; and

(c) The applicant has failed to respond to the Director's written notice of warning of abandonment within thirty (30) calendar days of the date of warning.

(4) Fees paid in connection with an abandoned registration shall not be refunded.

(5) An applicant whose application has been abandoned may reapply by submitting a new application including new fees.

Stat. Auth.: ORS 59.285
Stats. Implemented: ORS 59.065
Hist.: FCS 7-2000, f. & cert.ef. 6-2-00; FCS 2-2003(Temp), f. & cert. ef. 11-26-03 thru 5-21-04; FCS 1-2004, f. & cert. ef. 5-19-04

441-065-0020

Registration by Qualification

(1) Eligibility. Any issuer, owner, licensed broker-dealer, licensed mortgage broker, or any other person on whose behalf an offering is to be made may apply to register or renew by qualification.

(2) Application. An applicant for registration by qualification must use Form U-1 (developed by the North American Securities Administrators Association, Inc.). The application must be complete and accompanied by the following documents as applicable:

(a) One copy of the registration statement filed with the Securities and Exchange Commission;

(b) One copy of the most recent prospectus;

(c) The underwriting agreement, agreement among underwriters, and selected dealers' agreement;

(d) Copies, including all amendments, of the issuer's articles of incorporation, certificate of limited partnership, or charter;

(e) Issuer's bylaws as amended to date;

(f) Other contracts or documents of a material nature including option or warrant plans, proceeds escrow agreements, stock escrow agreements, key employment contracts, leases, patent opinions, preliminary title reports, and loan commitment letters;

(g) Counsel's opinion as to the legality of the securities to be issued and counsel's consent to use the opinion;

(h) Other experts' opinions or reports and consent to use the opinions;

(i) A specimen of the security including any restrictions on its transfer;

(j) Proposed advertising material except material described in Rules 134, 134a, 135, or 135a adopted under the Securities Act of 1933, as amended;

(k) Financial statements as defined in OAR 441-011-0040;

(l) A Form U-4 application and a filing fee as set in OAR 441-175-0002 for each salesperson if the offering will not be made through a licensed broker-dealer; and

(m) A registration fee as set in OAR 441-065-0001.

(3) Post application information. Every applicant or registrant by qualification must:

(a) Advise the Director prior to registration in Oregon of any material change in any information contained in the application or in any documents submitted with or as a part of the application;

(b) File within two business days after filing with the Securities and Exchange Commission:

(A) Any amendments to the federal registration statement designating the changed, revised, or added material or information; and

(B) The final prospectus and any further amendments or supplements thereto.

(c) File within 14 days of the date of registration the final prospectus, if not filed with the Securities and Exchange Commission;

(d) Notify the Director within two business days of receipt of:

(A) Any stop order, order of denial, order to show cause, order of suspension or revocation, injunction, or restraining order, or similar order entered or issued by any state or other regulatory authority or by any court concerning the securities covered by the application or other securities of the issuer currently being offered to the public; and

(B) Notice of effectiveness of the registration by the Securities and Exchange Commission.

(e) Notify the Director at least two business days prior to the effectiveness of the registration with the Securities and Exchange Commission of:

(A) Any requests by the issuer or applicant to any other state or regulatory authority for permission to withdraw any application to register the securities described in the application; and

(B) All states in which applications have been filed where the issuer or applicant has received notice from the state authority that the application does not comply with state requirements and the applicant or issuer cannot or does not intend to comply with such requirements.

(f) Furnish promptly all additional information and documents with respect to the issuer or the securities covered by the application as the Director requests.

(4) Registration. Registration is effective on the issuance of an order of registration.

[ED. NOTE: Forms referenced are available from the agency.]

Stat. Auth.: ORS 59
Stats. Implemented: ORS 59.065
Hist.: FCS 5-1987(Temp), f. 9-24-87, ef. 9-28-87; FCS 5-1988, f. 3-22-88, cert. ef. 3-25-88, Renumbered from 815-030-0050(2); FCS 7-2000; f. & cert. ef. 6-2-00; FCS 2-2003(Temp), f. & cert. ef. 11-26-03 thru 5-21-04; FCS 1-2004, f. & cert. ef. 5-19-04

441-065-0030

Registration by Filing

(1) Securities for which a registration statement has been filed under the Securities Act of 1933 in connection with the offering of the securities may be registered by filing, whether or not they are also eligible for registration under any other rule if:

(a) The issuer is organized under the laws of the United States or any state, as defined in ORS 174.100, or, if the issuer is not organized under the laws of the United States or any state, it has appointed a duly authorized agent in the United States for service of process;

(b) The issuer has actively engaged in business operations in the United States for a period of at least 36 consecutive calendar months immediately before the filing of the federal registration statement;

(c) The issuer has registered a class of equity securities under Section 12(b) or (g) of the Securities Exchange Act of 1934, which class of securities is held of record by 500 or more persons;

(d) The issuer has:

(A) Either a total net worth of $4,000,000 or a total net worth of $2,000,000 and net pretax income from operations before allowances for extraordinary items, for at least two of the three preceding fiscal years;

(B) Not less than 400,000 units of the class of security registered under section 12 of the Securities Exchange Act of 1934 held by the public, excluding securities held by officers and directors of the issuer, underwriters and persons beneficially owning ten percent or more of that class of security; and

(C) No outstanding warrants and options held by the underwriters and executive officers and directors of the issuer in an amount exceeding ten percent of the total number of shares to be outstanding after completion of the offering of the securities being registered.

(e) The issuer has been subject to the requirements of section 12 of the Securities Exchange Act of 1934 and has filed all the material required to be filed under Sections 13 and 14 of that act for at least 36 consecutive calendar months immediately before the filing of the federal registration statement and the issuer has filed in a timely manner all reports required to be filed during the 12 calendar months next preceding the filing of the federal registration statement;

(f) For at least 30 days during the three months next preceding the offering of the securities registered there have been at least four market makers for the class of equity securities registered under section 12 of the Securities Exchange Act of 1934;

(g) Each of the underwriters participating in the offering of the security and each broker-dealer who will offer the security in this State is a member of or is subject to the rules of fair practice of a national association of securities dealers with respect to the offering and the underwriters have contracted to purchase the securities offered in a principal capacity;

(h) The person(s) on whose behalf the securities are offered must receive proceeds equal to 90 percent or more of the aggregate public offering price;

(i) Neither the issuer nor any of its subsidiaries, since the end of the fiscal year next preceding the filing of the registration statement, have:

(A) Failed to pay a dividend or sinking fund installment on preferred stock;

(B) Defaulted on indebtedness for borrowed money; or

(C) Defaulted on the rental on one or more long-term leases which defaults in the aggregate are material to the financial position of the issuer and its subsidiaries, taken as a whole.

(j) In the case of an equity security, the price at which the security will be offered to the public is not less than five dollars per share.

(2) A filing under this section must contain the following information and be accompanied by the following documents:

(a) A completed Form U-1;

(b) A statement demonstrating eligibility for registration by filing;

(c) The name, address, and form of organization of the issuer;

(d) With respect to a person on whose behalf a part of the offering is to be made in a nonissuer distribution: name and address; the amount of securities of the issuer held by the person as of the date of the filing of the registration statement; and a statement of the reasons for making the offering;

(e) A description of the security being registered; and

(f) A copy of the latest prospectus filed with the registration statement under and satisfying the requirements of Section 10 of the Securities Act of 1933.

(3) If the information and documents required to be filed by section (2) of this rule have been on file with the Director for at least ten business days, or any shorter period which the Director by rule or order allows, and the applicable registration fee has been paid before the effectiveness of the federal registration statement, a registration statement under this section automatically becomes effective concurrently with the effectiveness of the federal registration statement. If the federal registration statement becomes effective before the conditions in this section are satisfied and they are not waived, the registration statement becomes effective when the conditions are satisfied. The registrant shall promptly notify the Director of the date and time when the federal registration statement became effective and the content of the price amendment, if any, and shall file promptly a post effective amendment containing the information and documents in the price amendment. The Director shall promptly acknowledge receipt of notification and effectiveness of the registration statement as of the date and time the registration statement became effective with the Securities and Exchange Commission.

(4) Registration pursuant to this rule shall be deemed fair, just, and equitable for purposes of ORS 59.085 and 59.105(1)(a).

Stat. Auth.: ORS 59
Stats. Implemented: ORS 59.065
Hist.: FCS 5-1987(Temp), f. 9-24-87, ef. 9-28-88; FCS 5-1988, f. 3-22-88, cert. ef. 3-25-88, Renumbered from 815-030-0050(3)

441-065-0035

Registration by Multijurisdictional Coordination

(1) Securities for which a registration statement has been filed under the Securities Act of 1933 on Securities and Exchange Commission Forms F-7, F-8, F-9 or F-10 in connection with the same offering may be registered by multijurisdictional coordination.

(2) A registration statement filed with the Director under this rule shall contain the following information and be accompanied by the following documents as applicable:

(a) An appropriate registration fee as set in OAR 441-065-0001;

(b) An executed registration application on Form U-1;

(c) One copy of the latest form of prospectus filed under the Securities Act of 1933;

(d) If the Director requests, any other information, or copies of any other documents, filed under the Securities Act of 1933; and

(e) An undertaking to forward all amendments to the federal registration statement, other than an amendment which merely delays the effective date of the registration statement, promptly and in any event not later than the first business day after the day they are forwarded to or filed with the Securities and Exchange Commission, whichever first occurs.

(3) A registration statement under this rule automatically becomes effective at the moment the federal registration becomes effective if all the following conditions are satisfied:

(a) No order is in effect or proceeding is pending pursuant to ORS 59.105;

(b) The application for registration and all required documents have been on file with the Director for seven calendar days or such shorter period as the Director permits by rule or otherwise; and

(c) A statement of the maximum and minimum proposed offering prices and the maximum underwriting discounts and commissions have been on file for two full business days or such shorter period as the Director permits by rule or otherwise and the offering is made within those limitations. The registrant shall promptly notify the Director by telephone or otherwise of the date and time when the federal registration statement became effective and the content of the price amendment, if any, and shall promptly file a post-effective amendment containing the information and documents in the price amendment. "Price amendment" means the final federal amendment which includes a statement of the offering price, underwriting and selling discounts or commissions, amount of proceeds, conversion rates, call prices, and other matters dependent upon the offering price. Upon failure to receive the required notification and post-effective amendment with respect to the price amendment, the Director may institute proceedings to suspend or revoke the registration pursuant to ORS 59.105.

(4) If the federal registration statement becomes effective before all the conditions specified in section (3) of this rule are satisfied, and those pending conditions are not waived, the registration statement automatically becomes effective as soon as all the conditions are satisfied. If the registrant advises the Director of the date when the federal registration statement is expected to become effective, the Director shall promptly advise the registrant by telephone or otherwise, at the registrant's expense, whether all the conditions are satisfied and whether the Director then contemplates the institution of a proceeding pursuant to ORS 59.105. This advice by the Director does not preclude the institution of such a proceeding at any time.

(5) A registration under this rule remains effective for a period of 12 months from the initial date of effectiveness unless earlier terminated by the registrant or the Director. A registrant may renew a registration under this rule by meeting the requirements of this rule.

(6) For purposes of this rule, financial statements and financial information which have been prepared in accordance with Canadian generally accepted accounting principles, consistently applied, and which have been accepted by the Securities and Exchange Commission for inclusion in Form F-7, F-8, F-9 or F-10, with or without reconciliation to United States generally accepted accounting principles, consistently applied, will be accepted.

(7) Any person, not otherwise licensed in Oregon, who is a bona fide officer, director or employee of an issuer whose securities are registered pursuant to this rule and who is not otherwise compensated in connection with the sale of the registered securities, is exempt from the licensing requirements of OAR chapter 441, division 175 pursuant to OAR 441-175-0020 through 441-175-0040.

(8) Any person, not otherwise licensed in Oregon, who serves as a dealer manager for an exchange offer of securities which have been registered pursuant to this rule and who does not perform any active solicitation in this state, is exempt from the licensing requirements of OAR chapter 441, division 175 pursuant to OAR 441-175-0020 through 441-175-0040.

Stat. Auth.: ORS 59.015, 59.065 & 59.285
Stats. Implemented: ORS 59.065
Hist.: FCS 4-1991, f. & cert. ef. 8-23-91; FCS 2-2003(Temp), f. & cert. ef. 11-26-03 thru 5-21-04; FCS 1-2004, f. & cert. ef. 5-19-04

441-065-0040

Registration for Resale, or Dealing and Trading

(1) Eligibility. A licensed broker-dealer may register securities for resale, or dealing and trading purposes if:

(a) The securities are outstanding in the hands of the public; and either:

(A) The issuer is organized under the laws of the United States or any state, as defined in ORS 174.100; or

(B) There are at least 300 beneficial owners of the security domiciled in the United States.

(b) The issuer has not made an offer of the same class of securities for six months except to employees;

(c) The securities were acquired in the ordinary and usual course of business by the seller and are not part of an unsold allotment or an attempt to evade the Oregon Securities Law;

(d) The securities are sold at prices reasonably related to the current market price at the time of sale if a market exists;

(e) Any commissions collected by the broker-dealer on account of the sale are not in excess of the usual and customary commissions collected with respect to securities and transactions having comparable characteristics; and

(f) The issuer agrees or is required to provide an audited balance sheet, statement of income or operations, and statement of cash flows annually to the holders of the class of security to be registered.

(2) Disqualification. Registration for resale, or dealing and trading may be denied if at the time of application the issuer is insolvent or if, within the five years preceding the filing of the application, the issuer or any executive officer, director, or general partner of the issuer:

(a) Has been subject to an administrative order issued by the Director for violation of any provision of the Oregon Securities Law or any rule or order of the Director;

(b) Has been or is engaged in dishonest or fraudulent conduct with regard to the securities;

(c) Has been convicted of a misdemeanor, an essential element of which is fraud, or a felony;

(d) Has made or caused to be made to the Director any false representation of a material fact or has suppressed or withheld from the Director any material information;

(e) Has refused to permit an examination to be made by the Director or failed to file any report including any financial report or furnish any information required by the Director in connection with the Oregon Securities Law;

(f) Has been subject to any order entered by an governmental agency or self-regulatory organization prohibiting or suspending the person from engaging in or continuing any conduct or practice involving any aspect of the securities business; or

(g) Has been subject to any judgment or decree of any court of competent jurisdiction which is based on either securities violations or fraud.

(3) Conditions of registration:

(a) The registration shall not be effective for sales which occur within 90 days after any public offering of the same class of securities which is not registered with the Securities and Exchange Commission under the Securities Act of 1933;

(b) The security shall not be sold pursuant to exemption under ORS 59.035(8), (9), or (10) when the registration is ineffective under subsection (3)(a) of this rule. This condition shall not apply to sales for which the broker-dealer places in its records reasonably sufficient evidence to document that the securities sold were issued and outstanding prior to the public offer, or are not part of the new issue.

(4) Application. An applicant for registration for resale, or dealing and trading shall apply on a form approved by the Director. The application must be accompanied by the following information:

(a) The information required under subsection (5)(b) of this rule;

(b) Appropriate fees;

(c) The annual report of the issuer for the most recent fiscal year including audited financial statements;

(d) Interim financial statements of the issuer not over 135 days old (unless annual statements are current); and

(e) If the issuer is not a United States organization, a signed opinion of counsel duly licensed in any of the United States that the securities are qualified for sale in the United States or evidence that the securities are registered with the Securities and Exchange Commission.

(5) Recordkeeping and notice to purchasers:

(a) The applicant and any other broker-dealer relying upon the registration must:

(A) Maintain the information required in subsection (5)(b) of this rule in its records and keep the information reasonably current for each sale;

(B) Notify any proposed purchaser prior to the time of sale that the information is in its records; and

(C) Make the information reasonably available upon request to any person expressing an interest in a proposed transaction in the security with the broker-dealer.

(b) The applicant must maintain in its records at the time of sale and for two years after any sale the information listed in this section. The broker-dealer must have obtained the information from sources which it has a reasonable basis for believing are reliable. Forms filed by the issuer with the Securities and Exchange Commission are deemed a reliable source:

(A) The exact name of the issuer and its predecessor (if any);

(B) The address of its principal executive offices;

(C) The date and state, province, or nation of organization and type of organization;

(D) The exact title and class of the security;

(E) The par or stated value of the security;

(F) The number of shares or total amount of the securities outstanding as of the end of the issuer's most recent fiscal year;

(G) The name and address of the transfer agent;

(H) The nature of the issuer's business;

(I) The nature of products or services offered;

(J) The nature and extent of the issuer's facilities;

(K) The name of the chief executive officer and members of the board of directors;

(L) The issuer's most recent balance sheet and statement of income or operations and cash flows, which must be audited;

(M) Similar financial information, which may be unaudited, for such part of the two fiscal years preceding the audited balance sheet and statements as the issuer or its predecessor has been in existence;

(N) Whether the broker-dealer or any associated person is affiliated directly or indirectly with the issuer;

(O) Whether the registration is submitted directly or indirectly for the benefit of any other broker-dealer, and, if so, the name of such broker-dealer; and

(P) Whether the registration is being submitted directly or indirectly on behalf of the issuer, or any director, controlling person, officer, or any person, directly or indirectly the beneficial owner of more than ten percent of the outstanding units or shares of any equity security of the issuer and, if so, the name of such person and the basis for any exemption under the federal securities laws for any sales of such securities on behalf of such person.

(c) When the information described in subsection (5)(b) of this rule is made available to others upon request pursuant to this rule, such delivery, unless otherwise represented, shall not constitute a representation by such broker-dealer that such information is true and correct, but shall constitute a representation by such broker-dealer that the information is reasonably current in relation to the day the information is submitted, that the broker-dealer has no reasonable basis for believing the information is not true and correct, and that the information was obtained from sources which the broker-dealer has a reasonable basis for believing are reliable.

Stat. Auth.: ORS 59
Stats. Implemented: ORS 59.035(9) & ORS 59.065
Hist.: FCS 6-1987(Temp), f. 9-24-87, ef. 9-28-87; FCS 5-1988, f. 3-22-88, cert. ef. 3-25-88, Renumbered from 815-030-0050(4)

441-065-0050

Condominium Securities

(1) Definitions:

(a) "Condominium Security" shall be defined to include the sale of a condominium in fee, leasehold, undivided interest or a license or right to use a facility with any of the following arrangements: Units offered in conjunction with:

(A) The offer of a rental arrangement or similar service with emphasis on the economic benefits derived by the purchaser from the managerial efforts of the promoter in connection with the rental of the units;

(B) The offering of participation in a rental pool arrangement;

(C) The offering of a rental or similar arrangement which requires the purchaser to hold a unit available for rental or to use an exclusive rental agent or otherwise materially restricts the purchaser's occupancy of his units.

(b) "Net Fee Contract" means a contract under which a management company, for a percentage of the gross rental income, provides overall management of the rental operation of the condominium project but the operating costs are borne by unit owners;

(c) "Gross Fee Contract" means a contract under which a management company, for a percentage of the gross rental income, provides management services. The cost of operation of the rental aspects of the project are borne by the management company but the cost of maintenance of the project is borne by the unit owners;

(d) "Unit" shall mean either a condominium unit, a leasehold interest in a condominium unit, or condominium project, a partial or limited partnership interest, or undivided interest in a condominium unit;

(e) "Operator" means the individual or company which does or will operate the project for the condominium unit owners;

(f) "Developer" means the individual or company which constructs, acquires or converts a property in which condominium unit securities, as herein defined, are to be sold.

(2) Project Financing:

(a) The financing arrangements for completion of the project shall be fully disclosed in the prospectus;

(b) If the project is to be phased or staged, the prospectus should clearly disclose what the effect of failure to complete the phases would be on the recreational amenities, public facilities and future use of the units;

(c) No encumbrances or liens of any kind shall be permitted on any portion of the project, except an individual investor-purchaser may arrange for financing the purchase of his unit and encumber the unit for the purchase price, including a mortgage or other arrangement to purchase the furniture package;

(d)(A) The developer or operator shall undertake to commit the restaurant, bar, hotel, and convention facilities to their specific uses through dedication in the Declaration of Unit Ownership; and any other use of those facilities shall only be permitted by a majority of unit owners;

(B) If, for any reason, the developer or operator shall be unable or unwilling to continue the operation of those facilities, the unit owners shall have the right to acquire title to the facilities, with the purchase price to be determined by arbitration;

(C) There shall be no separate ownership of service areas and other maintenance facilities necessary for the operation of the restaurant, bar, hotel, and convention facilities, and the unit owners shall own pro rata shares in all such service areas and maintenance facilities.

(e) The amount of any profits to the developer, whether by way of construction fee, finder's fee, acquisition fee, conversion costs, developer's fee, or otherwise should be disclosed in the prospectus;

(f) The proceeds of the offering shall be escrowed until the following conditions have been met:

(A) That the other condominium units can be delivered free and clear of any encumbrance (other than the major lease or long-term ownership, if such is the case). This shall not prevent a unit purchaser from encumbering a unit by purchase money lien or mortgage. In lieu of the escrow requirement, a satisfactory completion bond or guaranty by a financial institution may be substituted;

(B) A number of units have been sold which, in the opinion of the Director and as represented in the prospectus, will make the project feasible in light of the objectives promised to the investor-purchaser;

(C) The submission to the Director of an architect's certification that the units have been constructed according to specifications and in accordance with industry standards. In the case of a conversion of an existing structure into units, the architect's certificate should include a statement that the conversion has taken place according to specifications and in accordance with industry standards. As an alternative to the architect's certificate, an Engineer's Certification may be submitted which includes a structural or condition report on the units.

(3) Management Contracts:

(a) The management fee shall be reasonable in light of the number of units proposed to be managed and the duties imposed thereby and shall be disclosed in the prospectus. The fees, rights, and duties of the operator and unit owners may be negotiated at the end of not more than the three-year period from the date of the first notice and at any time after the first three years, and may be canceled upon a majority vote of the unit owners. The operator shall provide for full-time management of the units and hotel facilities. In lieu of the above, a management contract with a major hotel operator with demonstrated management capabilities and expertise will be permitted for a term of up to ten years. Any such contract can be terminated by a vote of the holders of at least two-thirds (2/3) of the units;

(b) A minimum number of rooms committed to a rental program shall be required and withdrawal from such a rental program shall not be permitted except upon approval of the manager and all other unit owners participating in the rental program;

(c) The management contract shall provide that the operator shall submit to the unit owners, at least once annually, a written report summarizing the receipts and disbursements affecting the operation of the hotel facilities;

(d) In addition, the management contract shall provide for the disbursement to the unit owners, at least quarterly, their pro rata share of receipts from the operations of the hotel facilities.

(4) Financial Statements:

(a) If the operator is a subsidiary of another company, the financial statements of both the parent and subsidiary will be required to be furnished in the prospectus. Such statements shall be audited in accordance with the standards prescribed by Securities and Exchange Commission Release S-X;

(b) In an interstate offering of units, the use of projections will be encouraged unless prohibited by the Securities and Exchange Commission. In all intrastate offerings of units, the operator/developer shall provide the Director with a projected cash flow for the first three years of operation, the projection shall be realistic in its predictions and shall clearly identify the assumptions made with respect to all material features of the presentation.

(5) Commissions and Fees: The combined real estate brokerage selling commission and securities underwriting commissions and fees in total shall not exceed 15 percent of the aggregate purchase price of the units being offered. All such commissions and fees shall be disclosed in the prospectus. Additional costs for accountants' fees, attorneys' fees, printing costs, and any additional costs required by any state or federal regulatory agency may be allowed in addition to the 15 percent limitation.

(6) Prospectus:

(a) The prospectus or other document used in connection with the solicitation or sale must be filed with the Director;

(b) The prospectus shall be in a form required by the Director and may also include such information as would make it acceptable under the real estate laws or regulations of any state in which the offering is to be made;

(c) The prospectus shall contain a facsimile of an engineer's survey and report of architect's certificate concerning the condition of the project in a form prescribed by the Director.

(7) Authority of Director: The Director may amend these rules if, in his discretion, it is determined to be in the public interest and appropriate for protection of investors.

Stat. Auth.: ORS 59
Stats. Implemented: ORS 59.065
Hist.: CC 27, f. 4-9-76, ef. 4-16-76, Renumbered from 815-030-0056

Registration of Securities Offered in
Connection with or Structured as a Regulation
"D" or Similar Non-Public Offering

441-065-0060

Creation of Classifications

(1) The Director creates the following classifications of transactions in securities:

(a) An offering relying on "Regulation D" adopted by the Securities and Exchange Commission in 17 CFR Part 230, except 230.506; and Part 239;

(b) An offering relying on a federal statute or rule other than "Regulation D" but designed to meet the applicable requirements of OAR 441-065-0070 through 441-065-0230 as a non-public or limited offering.

(2) Transactions in securities described in section (1) may be registered under the appropriate provisions of OAR 441-065-0060 through 441-065-0230.

[Publications: The publication(s) referred to or incorporated by reference in this rule are available from the agency.]

Stat. Auth.: ORS 59.065 & ORS 59.285
Stats. Implemented: ORS 59.065
Hist.: CC 9-1982(Temp), f. 4-7-82, ef. 4-15-82; CC 11-1982, f. 8-11-82, ef. 10-10-82; FCS 11-1988(Temp), f. & cert. ef. 6-2-88; Renumbered from 815-036-0000; FCS 15-1988, f. & ef. 11-21-88; FCS 4-1992, f. & cert. ef. 10-1-92; FCS 2-1998, f. & cert. ef. 4-30-98

441-065-0070

Definitions

The following definitions are adopted for the purposes of OAR 441-065-0060 through 441-065-0230:

(1) "Accredited Investor" means a person as defined in OAR 441-035-0010.

(2) "Affiliate" means a person that directly or indirectly controls, is controlled by, or is under common control with, the person specified.

(3) "Aggregate Offering Price" means the sum of all cash, services, property, notes, cancellation of debt, or other consideration to be received by an issuer for issuance of its securities. Where securities are offered for both cash and non-cash consideration, the aggregate offering price shall be the price at which the securities are offered for cash. Any portion of the aggregate offering price attributable to cash received in a foreign currency shall be translated into United States currency at the currency exchange rate in effect at a reasonable time prior to or on the date of the sale of the securities. If securities are not offered for cash, the aggregate offering price shall be the value of the consideration established by bona fide sales of that consideration made within a reasonable time, or, in the absence of sales, on the fair value as determined by an accepted standard. Such valuations of non-cash consideration must be reasonable at the time made.

(4) "Business Combination" means any transaction of the type specified in paragraph (a) of Rule 145 under the Securities Act of 1933 (17 CFR 230.145) or any transaction involving the acquisition by one issuer, in exchange for all or a part of its own or its parent's stock, of stock of another issuer if, immediately after the acquisition, the acquiring issuer has control of the other issuer (whether or not it had control before the acquisition).

(5) "Calculation of Number of Purchasers" means the process of determining the number of purchasers under OAR 441-065-0230(2)(b) by:

(a) Excluding the following purchasers:

(A) Any relative, spouse, or relative of the spouse of a purchaser who has the same principal residence as the purchaser;

(B) Any trust or estate in which a purchaser and any of the persons related to the purchaser, as specified in paragraph (5)(a)(A) or (C) of this rule, collectively have more than 50 percent of the beneficial interest (excluding contingent interests);

(C) Any corporation or other organization of which a purchaser and relatives of the purchaser specified in paragraph (5)(a)(A) or (B) of this rule, collectively are beneficial owners of more than 50 percent of the equity securities (excluding directors' qualifying shares) or equity interests; and

(D) Any accredited investor.

(b) Counting as a single purchaser a corporation, partnership or other entity. If, however, that entity is organized for the specific purpose of acquiring the securities offered and is not an accredited investor under OAR 441-035-0010(8), then each beneficial owner of equity securities or equity interests in the entity shall count as a separate purchaser, except to the extent provided in subsection (5)(a) of this rule;

(c) Counting as a single purchaser a non-contributory employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974 where the trustee makes all investment decisions for the plan;

(d) Counting as a single purchaser each client of a federal or state investment adviser or customer of a broker-dealer regardless of the amount of discretion given to the investment adviser or broker-dealer to act on behalf of the client or customer.

(6) "Effective Date of Registration" means the date an issuer is authorized to sell securities under an order of registration issued by the Director.

(7) "Executive Officer" means the president, any vice president in charge of a principal business unit, division or function (such as administration, sales or finance), any other officer who performs a policy making function, or any other person who performs similar policy making functions for the issuer. Executive officers of subsidiaries may be deemed executive officers of the issuer if they perform policy making functions for the issuer.

(8) "Issuer" shall have the meaning given it in ORS 59.015, except that in the case of a proceeding under the Federal Bankruptcy Code (11 USC 101 et seq.), the trustee or debtor in possession shall be considered the issuer in an offering under a plan of reorganization, if the securities are to be issued under the plan.

(9) "Notice filing " or "notice filing rule" means a filing made under ORS 59.049, OAR 441 division 049 or under former 441-065-0240.

(10)(a) "Permitted Oregon Purchaser" means any person who at the time of sale is or who the issuer reasonably believes is:

(A) A natural person who purchases the security for cash, marketable securities or both at least $10,000 of the securities offered, provided the purchase does not exceed ten percent of the purchaser's net worth at the time of purchase;

(B) A natural person who purchases the securities for cash, marketable securities or both provided:

(i) The purchaser's personal income exceeded $70,000 in each of the two most recent years;

(ii) The purchaser reasonably expects an income in excess of $70,000 in the current year; and

(iii) The amount purchased does not exceed ten percent of the purchaser's personal income for the most recent year.

(C) A partnership, corporation, trust or other entity in which all of the equity owners, or holders of beneficial interests in the case of a trust, satisfy the requirements of paragraph (A) or (B) of this section and the amount invested by the entity would be allowable as an individual purchase by each person under the same subsections.

(b) In subsection (a), the net worth and personal income of a spouse may be included in determining whether a purchaser is a "Permitted Oregon Purchaser."

(11) "Purchaser Representative" means any person who satisfies all of the following conditions or who the issuer reasonably believes satisfies all of the following conditions:

(a) The person is not an affiliate, director, officer or other employee of the issuer, beneficial owner of ten percent or more of any class of the equity securities or ten percent or more of the equity interest in the issuer, except where the purchaser is:

(A) A relative of the purchaser representative by blood, marriage or adoption and not more remote than a first cousin;

(B) A trust or estate in which the purchaser representative and any persons related to the purchaser representative, as specified in paragraph (a)(A) or (C) of this section, collectively have more than 50 percent of the beneficial interest (excluding contingent interest) or of which the purchaser representative serves as trustee, executor, or in any similar capacity; or

(C) A corporation or other organization of which the purchaser representative and any persons related to the purchaser representative, as specified in paragraph (a)(A) or (B) of this section, collectively are the beneficial owners of more than 50 percent of the equity securities (excluding directors' qualifying shares) or equity interest.

(b) The person has such knowledge and experience in financial and business matters that the person is capable of evaluating alone, or together with other purchaser representatives of the purchaser, or together with the purchaser, the merits and risks of the prospective investment;

(c) The person is acknowledged by the purchaser in writing, during the course of the transaction, to be the purchaser representative in connection with evaluating the merits and risks of the prospective investment; and

(d) The person discloses to the purchaser in writing a reasonable time prior to the sale of the securities any material relationship between the purchaser representative or affiliates and the issuer or its affiliates as well as compensation involved that:

(A) Exists presently;

(B) Existed within two years; or

(C) Is planned.

(12) "Sophisticated Purchaser" means any person, acting alone or with a Purchaser Representative, that has, or that the issuer reasonably believes has, sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the proposed investment.

(13) "Suitable Purchaser" means any person who purchases the securities of the issuer through a licensed broker-dealer on a solicited basis.

(14) "Termination of the Offering" means the earlier of:

(a) The expiration of an order of registration; or

(b) A written notice of termination filed with the Director.

[Publications: The publication(s) referred to or incorporated by reference in this rule are available from the agency.]

Stat. Auth.: ORS 59.065
Stats. Implemented: ORS 59.065
Hist.: CC 9-1982(Temp), f. 4-7-82, ef. 4-15-82; CC 11-1982, f. 8-11-82, ef. 10-10-82; FCS 11-1988(Temp), f. & cert. ef. 6-2-88; Renumbered from 815-036-0005; FCS 15-1988, f. & ef. 11-21-88; FCS 4-1992, f. & cert. ef. 10-1-92; FCS 2-1998, f. & cert. ef. 4-30-98

441-065-0080

General Requirements and Limitations

(1) OAR 441-065-0060 through 441-065-0210 are applicable to offerings registered pursuant to 441-065-0220, 441-065-0225 or 441-065-0230.

(2) Registration of offerings pursuant to OAR 441-065-0220, 441-065-0225 or 441-065-0230 is only available to the issuer of the securities for purposes of the issuance of its securities.

(3) No offering of the securities of a "blank check company" may be registered pursuant to OAR 441-065-0220, 441-065-0225, or 441-065-0230. A "blank check company" is defined in 441-045-0010.

(4) Options, warrants and similar rights to purchase securities which are part of an offering registered pursuant to OAR 441-065-0220, 441-065-0225 or 441-065-0230 constitute a continuous offering of the underlying securities during the exercise period and require the securities to be registered and renewed on an annual basis and any disclosure materials to be kept continuously current throughout the exercise period.

(5) All forms mentioned in OAR 441-065-0060 to 441-065-0230 are available from the Director.

Stat. Auth.: ORS 59.065
Stats. Implemented: ORS 59.065
Hist.: CC 9-1982(Temp), f. 4-7-82, ef. 4-15-82; CC 11-1982, f. 8-11-82, ef. 10-10-82; FCS 11-1988(Temp), f. & cert. ef. 6-2-88; Renumbered from 815-036-0010; FCS 15-1988, f. & ef. 11-21-88; FCS 4-1992, f. & cert. ef. 10-1-92; FCS 2-1998, f. & cert. ef. 4-30-98

441-065-0090

Integration

All separate sales of securities by the issuer that are a part of the same offering that is registered pursuant to OAR 441-065-0220, 441-065-0225 or 441-065-0230; for which a notice filing is made pursuant to ORS 59.049(5) and OAR 441-049-1051 or registered for failure to comply with notice filing requirements of ORS 59.049(5) and OAR 441-049-1051 shall be counted and included as securities sold under the same offering except as provided in this rule:

(1) A separate sale of securities within or without this state will be included as part of the same offering if, after considering the following elements, there are compelling reasons to treat the sale as part of the same offering. The elements to be considered are:

(a) Whether the sales are part of a single plan of financing;

(b) Whether the sales involved issuance of the same class of security;

(c) Whether the sales are made at or about the same time;

(d) Whether the same type of consideration is received; and

(e) Whether the sales are made for the same general purpose.

(2) Employee benefit plans. Offers and sales of any securities under an employee benefit plan as defined by 17 CFR 230.405 or 230.701 are not included for purposes of this rule.

(3) Safe harbor by absence of sales. Sales of securities made more than six months prior to the effective date of registration under OAR 441-065-0220, 441-065-0225, 441-065-0230; notice filing pursuant to ORS 59.049(5) and OAR 441-049-1051; or registration for failure to comply with notice filing requirements of ORS 59.049(5) and OAR 441-049-1051, or more than six months after the termination of the offering will not be counted or included as sales made as part of the same offering under this rule if there are no sales of securities of the same or similar class by the issuer during either six month period other than sales of securities under an employee benefit plan as defined by 17 CFR 230.405 or 230.701.

(4) Safe harbor for "discrete offerings" of partnership interests. Offerings of interests in a partnership shall not be included as securities sold under the same offering, even where there is a common sponsor or affiliate involved in offerings of interests in another entity, if all of the conditions of subsections (4)(b) through (f) of this rule are satisfied:

(a) As used in this subsection only, the following definitions are applicable:

(A) A "partnership" includes a general partnership, limited partnership, joint venture or other similar entity. A "partnership" includes existing entities as well as those that are to be formed in the future;

(B) A "sponsor" is a promoter or any person directly or indirectly instrumental in organizing the entity wholly or in part, or any person who will manage or participate in the management of the partnership. A "sponsor" includes a general partner and affiliate of the sponsor. A "sponsor" does not include independent third parties such as attorneys, accountants, and underwriters whose only compensation is for professional services rendered in connection with offering of interests in the partnership.

(b) Separate entity. The partnership must:

(A) Be a separate legal entity;

(B) Have separate books and records;

(C) Not commingle funds of the partnership with that of the sponsor or any other entity having the same sponsor.

(c) Economic independence. The partnership at the time the interests are sold must have an independent opportunity to meet its primary investment objective. If the partnership is substantially dependent on the creation, continued existence or economic results of investments of another entity having a common sponsor, then the partnership does not have an independent opportunity to meet its primary investment objective.

(d) Application of proceeds. No material portion of the gross offering proceeds of the partnership shall be invested in properties where another entity having a common sponsor has also invested and continues to hold invested, a material portion of its gross offering proceeds.

(e) Unspecified programs. An offering that does not identify at least 50 percent of the assets in which the partnership intends to invest does not qualify under this safe harbor if:

(A) Another entity with a common sponsor was formed to conduct the same general type of activity and that entity has not invested or committed the major portion of its gross offering proceeds prior to commencement of this offering by the registering partnership; or

(B) The sponsor creates a simultaneous or subsequent offering through another entity to conduct the same general type of activity before the registering partnership has invested or committed for investment the major portion of its gross offering proceeds. This paragraph does not apply if the investment to be made by the other entity is fully identified.

(f) An offering of interests in a partnership which is formed to engage in sale and leaseback transactions does not qualify under this safe harbor if the ultimate intended lessee of the assets in which the partnership invests is a sponsor of the partnership.

(5) Safe harbor by order of registration:

(a) Applicants desiring the Director's concurrence of non-integration under section (1) of this rule or applicability of the safe harbors in section (3) or (4) of this rule shall file a written request with their application for registration. Applicants shall attach arguments and citations in support of their position;

(b) By order of registration, the Director may determine whether separate sales will be integrated under this rule;

(c) No presumptions are created by the non-availability of safe harbors under section (3) or (4) of this rule.

Stat. Auth.: ORS 59.065
Stats. Implemented: ORS 59.065
Hist.: CC 9-1982(Temp), f. 4-7-82, ef. 4-15-82; CC 11-1982, f. 8-11-82, ef. 10-10-82; FCS 11-1988(Temp), f. & cert. ef. 6-2-88; Renumbered from 815-036-0015; FCS 15-1988, f. & ef. 11-21-88; FCS 4-1992, f. & cert. ef. 10-1-92; FCS 2-1998, f. & cert. ef. 4-30-98; FCS 4-1998, f. & cert. ef. 8-5-98

441-065-0100

Information Requirements

(1) In general. The rules in OAR 441 Division 065 rule shall not be construed as waiving or modifying the provisions of the Oregon Securities Law relating to disclosure of material information to investors.

(2) Except for offerings pursuant to section (4) of this rule, no specific disclosure or method of disclosing information is required for sales made exclusively to accredited investors.

(3) Registered offerings under OAR 441-065-0220. For an offering registered under 441-065-0220, each prospective purchaser of the securities shall be given written disclosure materials material to an understanding of the issuer, its business and the securities being offered.

(4) Registered offerings under OAR 441-065-0225. For an offering registered under 441-065-0225, each prospective purchaser of the securities shall be given a copy of the Form U-7 Disclosure Document (including all amendments) filed with the Director pursuant to 441-065-0170.

(5) Registered offerings under OAR 441-065-0230. For an offering registered under 441-065-0230, each prospective purchaser of the securities shall be given disclosures as provided in this rule.

(a) The disclosure materials shall either:

(A) Include at least the type of information and documentation as provided in Securities and Exchange Commission Rule 502(b)(2) (17 CFR 230.502(b)(2)), which rule is adopted by reference; or

(B) Be in writing, include all information material to an understanding of the issuer, its business and the securities being offered, be full, fair and complete, and be presented in a clear, concise and understandable manner.

(b) The issuer must give each prospective purchaser an opportunity to ask questions and receive answers concerning the terms and conditions of the offering and to obtain any additional information that the issuer possesses or can acquire without unreasonable effort or expense that is necessary to verify the accuracy of information provided under subsection (5)(a) of this rule; and

(c) Each prospective purchaser who is not an "accredited investor" shall be given upon written request, a brief description in writing of any written information concerning the offering that is provided by the issuer to any accredited investor provided that the purchaser makes a written request for the information.

(6) Time for disclosures. All disclosures shall be provided prior to the time a person becomes a purchaser of the securities.

(7) Written legend. Except for offers and sales of securities registered under OAR 441-065-0225, (to which the provisions of this section shall not apply), when written information is provided to a prospective Oregon purchaser, the written information shall contain one of the following legends which shall be prominent and in print that is easy to read:

(a) "The securities offered are registered with the Director of the Department of Consumer and Business Services for the State of Oregon under provisions of OAR 441-065-0060 through 441-065-0230. The Director reviewed the registration statement only briefly and has not reviewed this document. In deciding whether or not to invest in these securities, you should rely on your own examination of the company issuing the securities and the terms of the offering including the merits and risks involved;"

(b) "In making an investment decision investors must rely on their own examination of the person or entity creating the securities and the terms of the offering, including the merits and risks involved. These securities have not been recommended by any federal or state securities commission or regulatory authority. Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this document. Any representation to the contrary is a criminal offense. These securities are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under the Securities Act of 1933 as amended, pursuant to registration or exemption therefrom. Investors should be aware that they will be required to bear the financial risks of this investment for an indefinite period of time;" or

(c) "In deciding whether or not to invest in the securities offered, you should rely on your own examination of the company issuing the securities and the terms of the offering, including the merits and risks involved. These securities have not been approved or disapproved by any federal or state securities commission or other regulatory authority. Also, no such agency has determined if this document is truthful or complete. Any representation to the contrary is a criminal offense. You will not be able to transfer or resell these securities except pursuant to registration under the federal Securities Act of 1933 or an exemption from registration if available. Consequently, you may be required to bear the financial risks of this investment for an indefinite period of time."

[Publications: Publications referenced are available from the agency.]
[ED. NOTE: Forms referenced are available from the agency.]

Stat. Auth.: ORS 59.065 & 59.085
Stats. Implemented: ORS 59.065
Hist.: CC 9-1982(Temp), f. 4-7-82, ef. 4-15-82; CC 11-1982, f. 8-11-82, ef. 10-10-82; FCS 11-1988(Temp), f. & cert. ef. 6-2-88; Renumbered from 815-036-0020; FCS 15-1988, f. & ef. 11-21-88; FCS 4-1992, f. & cert. ef. 10-1-92; FCS 2-1998, f. & cert. ef. 4-30-98

441-065-0110

Public Advertising and General Solicitation

(1) Offerings conducted pursuant to OAR 441-065-0225 may be offered and sold using public advertising or general solicitation provided the sales materials to be used are reviewed and cleared by the Securities Section prior to use. Any sales materials proposed to be used shall contain no more than the following:

(a) The name of the issuer;

(b) Characterization of the issuer as indicated on the cover page of the Form U-7 Disclosure Document to be delivered to prospective investors;

(c) Address and telephone number of the issuer;

(d) A brief description of the issuer's business or proposed business;

(e) The number and type of securities offered and the offering price per security;

(f) The name, address and telephone number of any selling agent authorized to sell the securities;

(g) A statement that the offering does not constitute an offer to sell or solicitation of an offer to purchase and that any such offer must be made by the Disclosure Document;

(h) The procedure for obtaining the Disclosure Document; and

(i) The issuer's corporate logo.

(2) Offerings conducted pursuant to OAR 441-065-0220 or 441-065-0230 may not be offered or sold using any form of public advertising or general solicitation without the prior authorization of the Director.

[ED. NOTE: Forms referenced are available from the agency.]

Stat. Auth.: ORS 59.065 & ORS 59.085
Stats. Implemented: ORS 59.065
Hist.: CC 9-1982(Temp), f. 4-7-82, ef. 4-15-82; CC 11-1982, f. 8-11-82, ef. 10-10-82; FCS 11-1988(Temp), f. & cert. ef. 6-2-88; Renumbered from 815-036-0025; FCS 15-1988, f. & ef. 11-21-88; FCS 4-1992, f. & cert. ef. 10-1-92; FCS 2-1998, f. & cert. ef. 4-30-98

441-065-0130

Disqualification

(1) The Director may deny the use of the optional registration provisions in OAR 441-065-0220 through 441-065-0230 if:

(a) Federal Disqualification. Applicant is disqualified from using any provisions of SEC Regulations A or D; or

(b) Oregon Disqualification. Any of the parties of interest described in the Securities Act of 1933, Regulation A, SEC Rule 230.252 Sections (c), (d), (e), or (f):

(A) Filed a registration statement which is the subject of a currently effective stop order entered by any state within five years prior to the registration of the offering;

(B) Was convicted within five years of the application for registration of:

(i) Any felony or misdemeanor in connection with the offer, purchase or sale of any security or involving the making of a false filing with a state; or

(ii) Any felony involving fraud or deceit including but not limited to forgery, embezzlement, obtaining money under false pretenses, larceny or conspiracy to defraud.

(C) Is currently subject to any state administrative order or judgment, including an injunction entered within five years prior to the filing of the application of registration in which fraud or deceit, including but not limited to making untrue statements of material facts and omitting to state material facts, was found; or

(D) Is currently subject to any order, judgment or decree of any court of competent jurisdiction entered within five years of the application for registration, restraining or enjoining such party from engaging in or continuing any conduct or practice in connection with the purchase or sale of any security or the making of any false filing with a state.

(2) The disqualifications of section (1)(b) of this rule shall not apply if the party of interest subject to the disqualifying action is duly licensed to conduct securities-related business in the state in which the disqualifying action was entered or if the broker-dealer employing such party is licensed in this state and the Form B-D filed with this state discloses the order, conviction, judgment, or decree relating to such person.

(3)(a) The Director reviews each application to register to determine whether registration should be granted or denied.

(b) Notwithstanding the requirements of subsection (1)(b), registration may be allowed if the Director finds adequate public safeguards are provided for the offerings and:

(A) The applicant for registration provides sufficient facts from which the Director finds it is in the public interest to allow the registration; or

(B) The state that caused the disqualification recommends registration of the offering.

[Publications: The publication(s) referred to or incorporated by reference in this rule are available from the agency.]

Stat. Auth.: ORS 59.285
Stats. Implemented: ORS 59.065 & ORS 59.285
Hist.: CC 9-1982(Temp), f. 4-7-82, ef. 4-15-82; CC 11-1982, f. 8-11-82, ef. 10-10-82; FCS 11-1988(Temp), f. & cert. ef. 6-2-88; Renumbered from 815-036-0035; FCS 15-1988, f. & ef. 11-21-88; FCS 4-1992, f. & cert. ef. 10-1-92; FCS 2-1998, f. & cert. ef. 4-30-98; FCS 4-1998, f. & cert. ef. 8-5-98

441-065-0140

Limitation on Sales Expenses

(1) All expenses of an offering registered pursuant to OAR 441-065-0220 or 441-065-0230, including sales expenses, acquisition expenses, expenses for preparing the offering and the like shall be reasonable after taking into account the nature of the offering, amount to be raised and proposed use of funds.

(2) The provisions of OAR 441-085-0010 shall apply to offerings registered pursuant to OAR 441-065-0225, except that "20%" shall be substituted for "15%" in OAR 441-085-0010(2) relating to selling expenses.

Stat. Auth.: ORS 59.085
Stats. Implemented: ORS 59.065, ORS 59.085 & ORS 59.105
Hist.: CC 9-1982(Temp), f. 4-7-82, ef. 4-15-82; CC 11-1982, f. 8-11-82, ef. 10-10-82; FCS 11-1988(Temp), f. & cert. ef. 6-2-88; Renumbered from 815-036-0040; FCS 15-1988, f. & ef. 11-21-88; FCS 4-1992, f. & cert. ef. 10-1-92; FCS 2-1998, f. & cert. ef. 4-30-98

441-065-0150

Escrow of Proceeds

(1) The applicant for registration pursuant to OAR 441-065-0220 through 441-065-0240 must establish an escrow or similar arrangement for funds raised in an offering if the conditions set forth in section (2) of this rule exist, unless the requirement is waived under section (4) of this rule.

(2) An escrow must be established where, because of the nature of the intended use of the funds or the nature of the project or business plan, a minimum amount of funds must be raised within or outside this state in order that the project can get underway with a reasonable chance of success even if no further sales are made.

(3) Where an escrow is required:

(a) The escrow agent must be an institution licensed to conduct banking, savings and loan, trust or other escrow activities or a licensed professional whose requirements of licensure requires the segregation of funds of others into fiduciary trust accounts; but it cannot be the issuer, a promoter of an issuer to be formed, or an affiliate of such issuer or promoter;

(b) The escrow terms must include instructions that the funds placed into escrow shall be held in trust for the benefit of the investors and shall not be released to the issuer until the minimum amount of funds set forth in the application for registration has been raised; and

(c) The provisions of this section may be satisfied by the holding of the funds without formal escrow arrangement by a person described in subsection (3)(a) of this rule, until the minimum amount of funds has been received for the account of the purchasers.

(4) The requirements of this rule may be waived by the Director upon a showing that an escrow is not necessary and that investor rights are adequately protected.

Stat. Auth.: ORS 59.085 & ORS 59.285
Stats. Implemented: ORS 59.065 & ORS 59.085
Hist.: CC 9-1982(Temp), f. 4-7-82, ef. 4-15-82; CC 11-1982, f. 8-11-82, ef. 10-10-82; FCS 11-1988(Temp), f. & cert. ef. 6-2-88; Renumbered from 815-036-0045; FCS 15-1988, f. & ef. 11-21-88; FCS 4-1992, f. & cert. ef. 10-1-92

441-065-0160

Rescission of Improvident Sales Including Oversales

(1) The improvident closing of a sale of securities in violation of any of the provisions of OAR 441-065-0060 through 441-065-0230 will not by itself invalidate the registration of securities if the conditions of subsections (a), (b), (c), and either (d) or (e) of this section are satisfied:

(a) The registrant seeks an appropriate amendment to the registration with the Director, provides full details of the transaction, and receives an amended order authorizing the proposed transaction;

(b) The registrant and the person acting on behalf of the registrant who sold the security demonstrate to the Director that they had acted in good faith and sustain the burden of proof that they acted without intent to violate the provisions of this rule;

(c) The registrant cancels the sale or provides rescission to the purchaser involved within a reasonable time after discovery;

(d) The rescission or cancellation is made prior to release of proceeds from escrow;

(e) The registrant has the financial capacity to make a rescission payment out of separate funds, which payment does not create additional risks or obligations to the remaining purchasers or the project for which the funds were raised and offers or makes the rescission payment.

(2) Nothing in this rule shall allow a rescission payment or payment date to be made subject to resale of the interest to be canceled.

(3) This rule may be used by the registrant as well as all persons liable as a result of the sale of securities.

Stat. Auth.: ORS 59.065 & ORS 59.125
Stats. Implemented: ORS 59.065
Hist.: CC 9-1982(Temp), f. 4-7-82, ef. 4-15-82; CC 11-1982, f. 8-11-82, ef. 10-10-82; FCS 11-1988(Temp), f. & cert. ef. 6-2-88; Renumbered from 815-036-0050; FCS 15-1988, f. & ef. 11-21-88; FCS 4-1992, f. & cert. ef. 10-1-92; FCS 2-1998, f. & cert. ef. 4-30-98

441-065-0170

Registration Procedures for "Regulation D" and Similar Type Offerings

(1) An application to register securities filed pursuant to OAR 441-065-0220 (small offerings not exceeding $500,000 including under SEC Rule 504) shall include the following:

(a) A completed Form 440-2013 (a form for the registration of limited or non-public offerings);

(b) A copy of the written disclosures required by OAR 441-065-0100(3);

(c) A registration fee as set in OAR 441-065-0001;

(d) Unless the offering is being sold through a licensed broker-dealer or by a person exempt from the licensing requirements of ORS 59.165, at least one completed salesperson application on Form U-4 and a per person license fee as set in OAR 441-175-0002; and

(e) Any additional or supplementary materials requested by the Director.

(2) An application to register securities filed pursuant to OAR 441-065-0225 (small corporate offerings not exceeding $1,000,000 including under SEC Rule 504) shall include the following:

(a) A completed Form U-7 (a uniform disclosure document for small corporate offerings) including the following exhibits, to the extent applicable:

(A) Form of underwriting or selling agency agreement;

(B) Issuer's articles of incorporation or other charter documents and all amendments thereto;

(C) Issuer's bylaws, as amended to date;

(D) Copy of any resolutions by the issuer's board of directors setting forth terms and provisions of capital stock to be issued;

(E) Any indenture, form of note or other contractual provision containing terms of notes or other debt, or of options, warrants or rights to be offered;

(F) Specimen of security to be offered (including any legend restricting resale);

(G) Copy of all advertising or other materials directed to or to be furnished investors in the offering;

(H) Form of escrow agreement for escrow of proceeds;

(I) Consent to inclusion in Form U-7 Disclosure Document of accountant's report;

(J) Consent to inclusion in Form U-7 Disclosure Document of tax advisor's opinion or description of tax consequences;

(K) Consent to inclusion in Form U-7 Disclosure Document of any evaluation of litigation or administrative action by counsel;

(L) Form of any Subscription Agreement for the purchase of the securities;

(M) Opinion of counsel that the securities to be sold in the offering have been duly authorized and when issued upon payment of the offering price will be legally and validly issued, fully paid and nonassessable and binding on the issuer in accordance with their terms;

(N) Schedule of residence street addresses of the issuer's officers, directors and principal stockholders;

(O) Work sheets showing computations of responses to Questions 6, 7(a), 8(a), 8(b) and 17(b) of Form U-7 Disclosure Document; and

(P) Any additional or supplementary materials requested by the Director.

(b) A registration fee as set in OAR 441-065-0001; and

(c) Unless the offering is being sold through a licensed broker-dealer or by a person exempt from the licensing requirements of ORS 59.165, at least one completed salesperson application on Form U-4 and a per person license fee as set in OAR 441-175-0002.

(3) Amendments to Small Corporate Registrations under section (2). If a material change occurs concerning the issuer or the offering while the offering is effective in this state:

(a) The Form U-7 Disclosure Document shall be amended to make the disclosures accurate and complete;

(b) The amended Form U-7 showing additions and deletions shall be filed with the Director for approval;

(c) The offering shall be suspended in this state until approval is received from the Director to proceed with the offering; and

(d) The registrant shall report the status of the offering in this state and file a plan for dealing with present purchasers in this state.

(4) An application to register securities filed pursuant to OAR 441-065-0230 (limited offering for offerings not exceeding $5,000,000 including under SEC Rule 505) shall include the following:

(a) A completed Form 440-2013 (a form for the registration of limited or non-public offerings);

(b) A registration fee in accordance with OAR 441-065-0001;

(c) Unless the offering is being sold through a licensed broker-dealer or by a person exempt from the licensing requirements of ORS 59.165, at least one completed salesperson application on Form U-4 (available from the Securities Section) and a per person license fee in accordance with OAR 441-175-0002; and

(d) Any additional or supplementary materials requested by the Director.

[ED. NOTE: Forms referenced are available from the agency.]

Stat. Auth.: ORS 59.065 & 59.235
Stats. Implemented: ORS 59.065
Hist.: CC 9-1982(Temp), f. 4-7-82, ef. 4-15-82; CC 11-1982, f. 8-11-82, ef. 10-10-82; FCS 11-1988(Temp), f. & cert. ef. 6-2-88; Renumbered from 815-036-0055; FCS 15-1988, f. & ef. 11-21-88; FCS 4-1992, f. & cert. ef. 10-1-92; FCS 7-1994, f .& cert. ef. 5-13-94; FCS 2-1998, f. & cert. ef. 4-30-98; FCS 2-2003(Temp), f. & cert. ef. 11-26-03 thru 5-21-04; FCS 1-2004, f. & cert. ef. 5-19-04

441-065-0180

Licensing of Salespersons

(1) General License Requirements. Offers and sales of offerings registered pursuant to OAR 441-065-0220, 441-065-0225 or 441-065-0230 may only be made by licensed broker-dealers, licensed salespersons or persons excluded by rule pursuant to OAR 441-175-0020 through 441-175-0040.

(2) Issuer Salespersons; Licensing Conditions. The following special licensing conditions are applicable to salespersons licensed to an issuer:

(a) An issuer may license up to five persons as issuer salespersons;

(b) Issuer salespersons must be bona fide officers, directors or employees of the issuer;

(c) Issuer salespersons are exempt from examination requirements and are not required to file a surety bond or an irrevocable letter of credit;

(d) An issuer salesperson shall not be simultaneously licensed to two or more employers; and

(e) The issuer and salespersons shall comply with OAR 441-175-0120.

(3) Issuer Salespersons; Licensing Procedures. An issuer shall submit to the Director a complete application to license each salesperson, including:

(a) A completed Form U-4 (salesperson application); and

(b) A salesperson licensing fee for each salesperson as set in OAR 441-175-0002.

[ED. NOTE: Forms referenced are available from the agency.]

Stat. Auth.: ORS 59.165 & 59.175
Stats. Implemented: ORS 59.165 & 59.175
Hist.: CC 9-1982(Temp), f. 4-7-82, ef. 4-15-82; CC 11-1982, f. 8-11-82, ef. 10-10-82; FCS 11-1988(Temp), f. & cert. ef. 6-2-88; Renumbered from 815-036-0060; FCS 15-1988, f. & ef. 11-21-88; FCS 4-1992, f. & cert. ef. 10-1-92; FCS 2-1998, f. & cert. ef. 4-30-98; FCS 2-2003(Temp), f. & cert. ef. 11-26-03 thru 5-21-04; FCS 1-2004, f. & cert. ef. 5-19-04

441-065-0190

Reports

(1) For offerings registered pursuant to OAR 441-065-0220 or 441-065-0230, the Director may, as a condition of registration, require the issuer to file one or more sales reports.

(2) For offerings registered pursuant to OAR 441-065-0225, the issuer shall file the following reports with the Director:

(a) If the offering is made pursuant to SEC Regulation D, a copy of any completed Form D with appropriate state signature pages which shall be filed at the same time that the Form D is filed with the Securities and Exchange Commission; or

(b) If the offering is not made pursuant to SEC Regulation D, a report on a form and at times specified by the Director as a condition of registration.

[Publications: The publication(s) referred to or incorporated by reference in this rule are available from the agency.]

[ED. NOTE: The Form(s) referenced in this rule is not printed in the OAR Compilation. Copies are available from the agency.]

Stat. Auth.: ORS 59.085
Stats. Implemented: ORS 59.085
Hist.: CC 9-1982(Temp), f. 4-7-82, ef. 4-15-82; CC 11-1982, f. 8-11-82, ef. 10-10-82; FCS 11-1988(Temp), f. & cert. ef. 6-2-88; Renumbered from 815-036-0065; FCS 15-1988, f. & ef. 11-21-88; FCS 4-1992, f. & cert. ef. 10-1-92; FCS 2-1998, f. & cert. ef. 4-30-98

441-065-0200

Records

The issuer shall, for three years following the termination of the offering, maintain and keep open for inspection by the Director:

(1) Records relating to purchaser representatives used and materials and data relied upon to determine the qualifications of the purchaser representatives;

(2) Records relating to purchasers and materials and data relied upon to determine the qualifications of the purchasers;

(3) Records relating to securities sales following the close of the offering that are considered as part of the offering; and

(4) All offering materials used in connection with offerings registered under OAR 441-065-0220 through 441-065-0230.

Stat. Auth.: ORS 59.235
Stats. Implemented: ORS 59.235
Hist.: CC 9-1982(Temp), f. 4-7-82, ef. 4-15-82; CC 11-1982, f. 8-11-82, ef. 10-10-82; FCS 11-1988(Temp), f. & cert. ef. 6-2-88; Renumbered from 815-036-0070; FCS 15-1988, f. & ef. 11-21-88; FCS 4-1992, f. & cert. ef. 10-1-92; FCS 2-1998, f. & cert. ef. 4-30-98

441-065-0210

Waiver of Provisions

The Director may, by Order, modify or waive any requirement of OAR 441-065-0060 through 441-065-0230. The applicant for waiver must provide proof and arguments, pursuant to OAR 441-011-0020, that the action requested is consistent with the Oregon Securities Law and that the investors are otherwise adequately protected.

Stat. Auth.: ORS 59.065
Stats. Implemented: ORS 59.065
Hist.: CC 9-1982(Temp), f. 4-7-82, ef. 4-15-82; CC 11-1982, f. 8-11-82, ef. 10-10-82; FCS 11-1988(Temp), f. & cert. ef. 6-2-88; Renumbered from 815-036-0075; FCS 15-1988, f. & ef. 11-21-88; FCS 4-1992, f. & cert. ef. 10-1-92; FCS 2-1998, f. & cert. ef. 4-30-98

441-065-0220

Small Offering Registration Procedure for Offerings Not Exceeding $500,000 (Including Under SEC Rule 504)

(1) General Requirements. An applicant for registration pursuant to this rule must comply with all applicable provisions of OAR 441-065-0060 through 441-065-0210.

(2) Specific Requirements and Limitations. In addition to the provisions of section (1) of this rule, an applicant for registration must comply with the following specific requirements and limitations:

(a) The total of the amount being registered, plus the aggregate offering price of all securities of the issuer sold within or outside this state within the 12 months preceding the effective date of the order of registration, plus the aggregate offering price of all securities of the issuer sold within or outside this state during the course of the offering being registered, where the securities are sold in reliance on Section 3(b) of the Securities Act of 1933 or in violation of Section 5(a) of that Act, may not exceed $500,000; and

(b) No limits are placed upon the number of persons who may purchase securities registered pursuant to this rule.

(3) Purchaser Qualifications. Sales of securities registered pursuant to this rule may only be made to purchasers in one or more of the following categories:

(a) Accredited investors;

(b) Permitted Oregon purchasers;

(c) Sophisticated purchasers; or

(d) Suitable purchasers.

Stat. Auth.: ORS 59.065
Stats. Implemented: ORS 59.065
Hist.: CC 9-1982(Temp), f. 4-7-82, ef. 4-15-82; CC 11-1982, f. 8-11-82, ef. 10-10-82; FCS 11-1988(Temp), f. & cert. ef. 6-2-88; Renumbered from 815-036-0080; FCS 15-1988, f. & ef. 11-21-88; FCS 4-1992, f. & cert. ef. 10-1-92

441-065-0225

Small Corporate Offering Registration Procedure for Offerings Not Exceeding $1,000,000 (Under SEC Rule 504)

(1) General Requirements. An applicant for registration pursuant to this rule shall comply with all applicable provisions of OAR 441-065-0060 through 441-065-0210.

(2) Qualifications checklist:

(a) The issuer shall be a corporation or limited liability company organized under the laws of one of the states or possessions of the United States;

(b) The issuer shall not engage in a petroleum exploration or production, mining or other extractive industries business;

(c) The offering shall not be a "blind pool" or other offering for which the specific business to be engaged in or property to be acquired by the issuer cannot be specified;

(d) If the offering includes debt securities, the application for registration shall include information demonstrating the ability of the issuer to service its debt;

(e) The offering price for any common stock (and the exercise price, if the securities offered are options, warrants or rights for common stock, and the conversion price if the securities are convertible into common stock) registered under this rule shall be equal to or greater than $1 per share. In addition, the issuer shall not be permitted to split its common stock or declare a stock dividend for two years after the effectiveness of the registration without the prior written approval of the Director;

(f) The total of the amount being registered, plus the aggregate offering price of all securities sold within or outside the state within the 12 months preceding the effective date of the order of registration, plus the aggregate offering price of all securities of the issuer sold within or outside the state during the course of the offering being registered, where the securities are sold in reliance on section 3(b) of the Securities Act of 1933 or in violation of Section 5(a) of that Act, shall not exceed $1,000,000;

(g) The issuer shall not be an investment company within the meaning of Section 3 of the Investment Company Act of 1940;

(h) The issuer shall not be subject to the reporting requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934.

(3) Purchaser Qualifications. No limits are placed upon the number of persons who may purchase securities registered pursuant to this rule. Sales of securities registered pursuant to this rule shall only be made to purchasers who are:

(a) Accredited investors;

(b) Permitted Oregon purchasers;

(c) Sophisticated purchasers;

(d) Suitable purchasers; or

(e) Direct purchasers from the issuer.

Stat. Auth.: ORS 59.065
Stats. Implemented: ORS 59.065
Hist.: FCS 4-1992, f. & cert. ef. 10-1-92; FCS 3-1998, f. & cert. ef. 7-2-98

441-065-0230

Limited Offering Registration Procedure for Offerings not Exceeding $5,000,000 (Including Under SEC Rule 505)

(1) General Requirements. An applicant for registration pursuant to this rule must comply with all applicable provisions of OAR 441-065-0060 through 441-065-0210.

(2) Specific Requirements and Limitations. In addition to the provisions of section (1) of this rule, an applicant for registration must comply with the following specific requirements and limitations:

(a) The total of the amount being registered, plus the aggregate offering price of all securities of the issuer sold within or outside this state within the 12 months preceding the effective date of the order of registration, plus the aggregate offering price of all securities of the issuer sold within or outside the state during the course of the offering being registered, where the securities were sold in reliance on section 3(b) of the Securities Act of 1933 or in violation of section 5(a) of that Act, may not exceed $5,000,000; and

(b) The total number of non-accredited, counting purchasers may not exceed 35.

(3) Purchaser Qualifications. Sales of securities registered pursuant to this rule may only be made to purchasers in one or more of the following categories:

(a) Accredited investors;

(b) Permitted Oregon purchasers;

(c) Sophisticated purchasers; or

(d) Suitable purchasers.

Stat. Auth.: ORS 59.065
Stats. Implemented: ORS 59.065
Hist.: CC 9-1982(Temp), f. 4-7-82, ef. 4-15-82; CC 11-1982, f. 8-11-82, ef. 10-10-82; FCS 11-1988(Temp), f. & cert. ef. 6-2-88; Renumbered from 815-036-0085; FCS 15-1988, f. & ef. 11-21-88; FCS 4-1992, f. & cert. ef. 10-1-92

Registration of Securities Involving Real Estate Paper

441-065-0250

Definitions

The following definitions are adopted for the purpose of this Division:

(1) An "agency transaction" is defined as a transaction in securities where one person acts for the account of another person.

(2) A "generic registration" of securities is defined as a registration procedure where a variety and series of securities to be offered is registered based on a gross dollar volume.

(3) A "participation" or "fractional interest" is defined as a transaction where several investors are given an interest in a single mortgage, trust deed, or single land sales contract. This is sometimes referred to as a "split."

(4) A "pooled investment or interest" is defined as a transaction where the investor is given a partial interest along with other investors, in more than one mortgage, trust deed, or land sales contract.

(5) A "principal transaction" is defined as a transaction in mortgage broker securities where a person sells or deals for the person's own account or for the account of an affiliate, officer, director or person holding a similar position with the principal.

Stat. Auth.: ORS 59
Stats. Implemented: ORS 59.065
Hist.: CC 6-1981(Temp), f. 10-27-81, ef. 11-2-81; CC 2-1982, f. 1-18-82, ef. 2-1-82; FCS 8-1987(Temp), f. 9-24-87, ef. 9-28-87; FCS 7-1988, f. 3-22-88, cert. ef. 3-25-88; Renumbered from 815-037-0005

441-065-0260

Optional Registration Procedures for Securities Involving Real Estate Paper

(1) Creation of Classification. A classification of "mortgage broker offering" is created.

(2) Optional Mechanisms for Registration. An applicant for registration of a mortgage broker offering may elect to register the offering under this rule in lieu of following the full registration procedure by:

(a) The filing of a generic registration covering a series of offerings; and

(b) The filing of a specific offering for a specified security which incorporates by reference documents filed under subsection (a) of this section.

(3) Registration Procedure:

(a) All registrations shall be filed on forms provided by the Director;

(b) The registrant shall file, along with the registration form, two copies of the proposed offering documents;

(c) The registration, when granted, will be effective for one year from the date of registration;

(d) If any material changes are made or occur concerning the offering, these changes must be filed with the Director, and an amendment of the registration order must be obtained before further sales are made; and

(e) The registrant must file with the Director all advertising materials before they are used.

(4) Retention of Documents. Documents, including specific offering materials and records, concerning purchasers and investors must be kept by the registrant for whichever of the following periods is longest:

(a) Four years from the date of sale;

(b) As long as the registrant, or principals of the registrant remain obligated to make payments or deliver documents on loan transactions; or

(c) As long as the registrant is obligated to provide servicing in connection with the transaction.

(5) Use of Legend. The offering document used in connection with a registered mortgage broker offering shall contain the following legend set out in a prominent place in the document:

"This offering has been registered with the Director of the Department of Consumer and Business Services of the State of Oregon as a mortgage broker offering under the provision of OAR 441-065-0260.

Registration does not constitute an endorsement or recommendation by the Director. It is not a representation that the Director has passed upon or reviewed the accuracy or values claimed. Any representation to the contrary is a criminal offense."

(6) Limitations on the Use of the Generic Registration Procedure:

(a) The following types of securities cannot be offered or sold under a generic registration of securities unless written permission is obtained from the Director based upon a showing that the investors are adequately protected:

(A) Construction loans and loans exceeding 90 percent of the property and improvements that are in place. Offerings involving construction loans and loans exceeding 90 percent of the value of the property including existing improvements may not be sold as part of a generic registration. These have to be registered separately. An offering exceeds 90 percent of the value of the property and existing improvements if the principal amount of the note secured by a mortgage or trust deed or land sale contract together with the unpaid principal amount of any encumbrances on the property, plus unpaid interest to date of the transaction, exceeds 90 percent of the reasonable market value of the real property including improvements;

(B) Principal Transaction. Offerings involving the broker, its officers, agents, affiliates, and persons controlling the broker or affiliates may not be sold as part of a generic registration unless the registration with the Director includes a full description of these transactions. An offering "involves" the persons listed where the person is the owner, the borrower, or has an interest in the proceeds other than fees, commissions, or mark-ups;

(C) Offerings involving documents reserving the right to subordinate the investor's position. Offerings involving real estate paper which reserve the right to subordinate the position of any investor to any mortgage, trust deed or lien created at or after the sale may not be sold under a generic registration;

(D) Offerings to more than ten persons. Offerings involving pooling or participations involving more than ten investors may not be sold under a generic registration. However, where only first liens are involved, the registrant may apply for a modification to allow sales up to 25.

(b) A registrant requesting a modification under this section must request it in writing and must provide satisfactory evidence that the interest of the public will be adequately protected.

Stat. Auth.: ORS 59
Stats. Implemented: ORS 59.065
Hist.: CC 6-1981(Temp), f. 10-27-81, ef. 11-2-81; CC 2-1982, f. 1-18-82, ef. 2-1-82; FCS 8-1987(Temp), f. 9-24-87, ef. 9-28-87; FCS 7-1988, f. 3-22-88, cert. ef. 3-25-88; Renumbered from 815-037-0045

Registration for Certain Compensatory
Benefit Plans and Contracts

441-065-0270

Compensatory Benefit Plans and Contracts

(1) Creation of Classification.

(a) The Director creates a classification of transaction in securities by an issuer designated as a compensatory benefit plan offering that is exempt under SEC Rule 701 (17 CFR 230.701).

(b) An issuer of a compensatory benefit plan offering that is exempt under SEC Rule 701 (17 CFR 230.701) may use this registration rule.

(2) Application to Register. The issuer shall submit:

(a) A completed Form U-1 (Application to Register Securities), except documents required under section 8 of Form U-1;

(b) A registration fee in accordance with OAR 441-065-0001;

(c) At least one completed Application to License a Salesperson on Form U-4 and license fee as set in OAR 441-175-0002. The salesperson must be a bona fide affiliate of the issuer, its parent or majority-owned subsidiary, and must either:

(A) Be an officer, director, general partner or trustee of the issuer, its parent or majority-owned subsidiary; or

(B) Have significant involvement in the administration of the benefit plan or contract.

(d) The following information:

(A) Type of business organization;

(B) Full title of plan or description of contracts;

(C) Type of plan;

(D) Affirmation that the offering is exempt from federal registration pursuant to SEC Rule 701; and

(E) Aggregate offering price of securities to be offered or sold pursuant to this application.

(e) An election regarding expiration date of an Order of Registration pursuant to section (5) of this rule; and

(f) Any supplementary materials requested by the Director.

(3) Discrete Offering. Subject to the inclusion of certain offers and sales of securities pursuant to OAR 441-065-0060 through 441-065-0230 or notice filing, offers and sales of securities registered pursuant to this rule shall be deemed to be part of a single, discrete offering and shall not be subject to integration with any other offer or sale by the issuer, whether registered pursuant to other provisions of OAR chapter 441, division 65 or otherwise exempt from the registration requirements of ORS 59.055.

(4) Review of Application. An application for registration pursuant to this rule shall be subject to the authority of the Director, pursuant to ORS 59.075, to deny registration or, pursuant to 59.085 and section (8) of this rule, to impose conditions on registration.

(5) Order of Registration. Renewal. An initial Order of Registration, if issued, shall, at the election of the registrant, expire 30 days following the end of the issuer's fiscal year, otherwise, one year after the date of issuance. The election must be made at the time application is made pursuant to section (3) of this rule. An application may be submitted for renewal. An Order of Renewal, if issued, shall expire one year after the date of issuance.

(6) Conditions of Registration. The following conditions shall be imposed upon every Order of Registration or Renewal issued pursuant to this rule:

(a) The issuer, its parent or majority-owned subsidiary shall provide each participant in a compensatory benefit plan with a copy of such plan, and a copy of a written contract relating to compensation shall be provided to the parties; and

(b) This registration shall be effective only while the federal exemption under 17 CFR 230.701 is available to the issuer for this offering.

(7) Order of Registration. Continued Effectiveness. An issuer may rely on this rule with respect to offers made pursuant to this rule prior to the issuer becoming subject to the reporting requirements of Section (13) or (15)(d) of the Securities Exchange Act of 1934 (15 USC 78a et seq.), and sales consummating such offers may be made thereafter in reliance upon this rule and an effective Order of Registration or Renewal.

(8) Full Disclosure. This rule shall not be construed as waiving or modifying the provisions of the Oregon Securities Law relating to disclosure of material information to investors.

[ED NOTE : Forms & Publications referenced are available from the agency.]

Stat. Auth.: ORS 59.065 & 59.285
Stats. Implemented: ORS 59.065 & 59.285
Hist.: FCS 3-1991, f. & cert. ef. 8-23-91; FCS 2-1998, f. & cert. ef. 4-30-98; FCS 4-1998, f. & cert. ef. 8-5-98; FCS 2-2003(Temp), f. & cert. ef. 11-26-03 thru 5-21-04; FCS 1-2004, f. & cert. ef. 5-19-04

The official copy of an Oregon Administrative Rule is contained in the Administrative Order filed at the Archives Division, 800 Summer St. NE, Salem, Oregon 97310. Any discrepancies with the published version are satisfied in favor of the Administrative Order. The Oregon Administrative Rules and the Oregon Bulletin are copyrighted by the Oregon Secretary of State. Terms and Conditions of Use

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Phone: (503) 986-1523 • Fax: (503) 986-1616 • oregon.sos@state.or.us

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