Sec. 80.10. Exemption procedure

The following procedure should be followed in applying for an exemption from the prospectus or accounting provisions of the New York Intrastate Financing Act under regulations 80.6, 80.7, 80.8, 80.15(b) or 80.15(d). The issuer should submit an application verified by all of the officers, directors and promoters of the corporation, general partners, trustees, etc., as the case may be, containing the following information, where applicable:

(a) The name and address of the petitioning entity.

(b) The nature of the petitioning entity, the date of its organization and the nature of its business.

(c) The purpose of the offering, the dollar amount to be raised, the expenses of the offering, whether or not the funds will be held in a special account in trust for specific purposes and the order of priority and usage of the net proceeds. Set forth whether or not there will be minimum and maximum investment limits for any individual investor.

(d) The nature of the security to be offered and the rights and obligations of the purchasers thereof.

(e) The names, home addresses and business addresses of all officers, directors and principals of the issuer, their business background for the preceding five years, their annual compensation from the issuer, the percentage of time they intend to or do devote to the affairs of the issuer and their current or proposed personal investment in the securities of the issuer.

(f) Whether or not any of the officers, directors or principals has ever been convicted of a crime, adjudicated a bankrupt or made a general assignment for the benefit of creditors or been a principal of any company which was reorganized in bankruptcy, adjudicated a bankrupt or made a general assignment for the benefit of creditors.

(g) All anticipated profits of the promoters from this venture.

(h) The basis upon which the exemption is sought.

(i) If the exemption is on the basis of an offering to sophisticated investors indicate the class or categories of persons to be contacted, the nature of their financial and business background and their minimum net worth. Provide a representation that all investors will sign the following statement BEFORE ANY MONIES ARE RECEIVED FROM THEM, a copy of which will be provided to the Attorney-General upon completion of the offering:

I understand that I am purchasing this interest in

 

without being furnished any offering literature or prospectus and that this transaction has not been scrutinized by the Attorney-General of the State of New York as a full registration because of the representation made by the issuer that the offering is only being made to a group of sophisticated investors whose business and financial background and experience is such as to not require any offering literature. I warrant that this interest is being purchased for my own account and that no portion is for the interest of any other and not for resale to others. I further warrant that my personal net worth is in excess of $__

It is understood that all documents, records and books, pertaining to this investment have been made available to my attorney, my accountant and myself.”

(j) If the exemption is on the basis of an offering to a promoter group, indicate that each of the petitioners warrants and represents that he is in truth a promoter of this venture and will or will not take an active part in the operation or management of this venture, knowing full well that he may lose all or part of his investment if the venture is not successful.

(k) If the exemption is sought on the basis of a specialized offering, attach copies of all documentation relating to the offering, including any proposed offering literature and advertising material, and set forth the way in which the offering is to be made.

(l) Set forth any facts showing why the grant of the exemption would not be inconsistent with the public interest or the protection of investors.

(m) A representation that all investors will be provided with annual financial statements containing all of the information required by the regulations issued pursuant to the New York Intrastate Financing Act.

(n) A statement that this application is in lieu of any previous application, if this affidavit supersedes a previous one.

(o) A concluding statement reading: “WHEREFORE, it is respectfully requested that the offering for sale of securities of __ be exempted from the __ provisions of the New York Intrastate Financing Act.”