Public Act 100-0507
 
HB3791 EnrolledLRB100 07306 JLS 21791 b


  
    AN ACT concerning business.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  


 
 
    Section 5. The Illinois Securities Law of 1953 is amended  
by changing Sections 2.35, 4, and 8d as follows:
 
    (815 ILCS 5/2.35)
    Sec. 2.35. Qualified escrowee.  "Qualified escrowee" means 
a person, firm, partnership, association, corporation, or 
other legal entity who: (a) falls under the definition of 
"title insurance company" under, and pursuant to the terms and 
requirements of, the Title Insurance Act, or is otherwise an 
agent or affiliate of such title
insurance company who is 
approved by such title insurance company to act under this 
Section and pursuant to the terms and requirements of the Title 
Insurance Act, and which maintains at least one physical 
business
location within the State; (b) is certified as an 
independent escrowee under, and pursuant to the terms and 
requirements of, the Title Insurance Act; or (c) is a bank, 
regulated trust company, savings bank, savings and loan 
association, or credit union, registered
broker-dealer, or law 
firm which is authorized to do business in the State and which 
maintains at least one physical business location within the 
State.

(Source: P.A. 99-182, eff. 1-1-16.)
 


    (815 ILCS 5/4)  (from Ch. 121 1/2, par. 137.4)




    Sec. 4. Exempt transactions. The provisions of Sections 2a, 
5, 6 and 7
of this Act shall not apply to any of the following 
transactions, except
where otherwise specified in this Section 
4:

        A. Any offer or sale, whether through a dealer or 
    otherwise, of securities
by a person who is not an issuer, 
    underwriter, dealer or controlling person
in respect of 
    such securities, and who, being the bona fide owner of such

    securities, disposes thereof for his or her own account; 
    provided, that
such offer or sale is not made directly or 
    indirectly for the benefit of
the issuer or of an 
    underwriter or controlling person.

        B. Any offer, sale, issuance or exchange of securities 
    of the issuer
to or with security holders of the issuer 
    except to or with persons who
are security holders solely 
    by reason of holding transferable warrants,
transferable 
    options, or similar transferable rights of the issuer, if

    no commission or other remuneration is paid or given 
    directly or
indirectly for or on account of the procuring 
    or soliciting of such sale
or exchange (other than a fee 
    paid to underwriters based on their
undertaking to purchase 
    any securities not purchased by security holders
in 
    connection with such sale or exchange).

        C. Any offer, sale or issuance of securities to any 
    corporation, bank,
savings bank, savings institution, 
    savings and loan association, trust company,
insurance 
    company, building and loan association, or dealer; to a 
    pension fund,
pension trust, or employees' profit sharing 
    trust, other financial institution
or institutional 
    investor, any government or political subdivision or

    instrumentality thereof, whether the
purchaser is acting 
    for itself or in some fiduciary capacity; to any

    partnership or other association engaged as a substantial 
    part of its
business or operations in purchasing or holding 
    securities; to any trust
in respect of which a bank or 
    trust company is trustee or co-trustee; to
any entity in 
    which at least 90% of the equity is owned by persons

    described under subsection C, H, or S of this Section 4; to 
    any
employee benefit plan within the meaning of Title I of 
    the Federal ERISA
Act if (i) the investment decision is 
    made by a plan fiduciary as defined
in Section 3(21) of the 
    Federal ERISA Act and such plan fiduciary is either
a bank, 
    savings and loan association, insurance company, 
    registered
investment adviser or an investment adviser 
    registered under the Federal
1940 Investment Advisers Act, 
    or (ii) the plan has total assets in excess
of $5,000,000, 
    or (iii) in the case of a self-directed plan, investment

    decisions are made solely by persons that are described 
    under subsection C,
D, H or S of this Section 4; to any 
    plan established and maintained by,
and for the benefit of 
    the employees of, any state or political subdivision
or 
    agency or instrumentality thereof if such plan has total 
    assets in
excess of $5,000,000; or to any organization 
    described in Section 501(c)(3)
of the Internal Revenue Code 
    of 1986, any Massachusetts or similar business
trust, or 
    any partnership, if such organization, trust, or 
    partnership has
total assets in excess of $5,000,000.

        D. The Secretary of State is granted authority to 
    create by rule or
regulation a limited offering 
    transactional exemption that furthers the
objectives of 
    compatibility with federal exemptions and uniformity among 
    the
states.  The Secretary of State shall prescribe by rule 
    or regulation the
amount of the fee for filing any report 
    required under this subsection, but the
fee shall not be 
    less than the minimum amount nor more than the maximum 
    amount
established under Section 11a of this Act and shall 
    not be returnable in any
event.

        E. Any offer or sale of securities by an executor, 
    administrator,
guardian, receiver or trustee in insolvency 
    or bankruptcy, or at any
judicial sale, or at a public sale 
    by auction held at an advertised time
and place, or the 
    offer or sale of securities in good faith and not for the

    purpose of avoiding the provisions of this Act by a pledgee 
    of securities
pledged for a bona fide debt.

        F. Any offer or sale by a registered dealer, either as 
    principal or
agent, of any securities (except face amount 
    certificate contracts and
investment fund shares) at a 
    price reasonably related to the current market
price of 
    such securities, provided:

        (1) (a) the securities are issued and outstanding;

            (b) the issuer is required to file reports pursuant 
        to Section 13 or
Section 15(d) of the Federal 1934 Act 
        and has been subject to such
requirements during the 90 
        day period immediately preceding the date of the
offer 
        or sale, or is an issuer of a security covered by 
        Section 12(g)(2)(B)
or (G) of the Federal 1934 Act;

            (c) the dealer has a reasonable basis for believing 
        that the issuer is
current in filing the reports 
        required to be filed at regular intervals
pursuant to 
        the provisions of Section 13 or Section 15(d), as the 
        case may
be, of the Federal 1934 Act, or in the case of 
        insurance companies exempted
from Section 12(g) of the 
        Federal 1934 Act by subparagraph 12(g)(2)(G)
thereof, 
        the annual statement referred to in Section 
        12(g)(2)(G)(i) of the
Federal 1934 Act; and

            (d) the dealer has in its records, and makes 
        reasonably available upon
request to any person 
        expressing an interest in a proposed transaction in
the 
        securities, the issuer's  most recent annual report 
        filed pursuant to
Section 13 or 15(d), as the case may 
        be, of the Federal 1934 Act or the annual
statement in 
        the case of an insurance company exempted from Section 
        12(g)
of the Federal 1934 Act by subparagraph 
        12(g)(2)(G) thereof, together with
any other reports 
        required to be filed at regular intervals under the

        Federal 1934 Act by the issuer after such annual report 
        or annual
statement; provided that the making 
        available of such reports pursuant to
this 
        subparagraph, unless otherwise represented, shall not 
        constitute a
representation by the dealer that the 
        information is true and correct, but
shall constitute a 
        representation by the dealer that the information is

        reasonably current; or

        (2) (a) prior to any offer or sale, an application for 
        the authorization
thereof and a report as set forth 
        under sub-paragraph (d) of this
paragraph (2) has been 
        filed by any registered dealer with and approved by
the 
        Secretary of State pursuant to such rules and 
        regulations as the
Secretary of State may prescribe;

            (b) the Secretary of State shall have the power by 
        order to refuse
to approve any application or report 
        filed pursuant to this paragraph (2) if

                (i) the application or report does not comply 
            with the provisions of
this paragraph (2), or

                (ii) the offer or sale of such securities would 
            work
or tend to work a fraud or deceit, or

                (iii) the issuer or the applicant has violated 
            any of the
provisions of this Act;

            (c) each application and report filed pursuant to 
        this paragraph (2)
shall be accompanied by a filing fee 
        and an examination fee in the amount
established 
        pursuant to Section 11a of this Act, which shall not be

        returnable in any event;

            (d) there shall be submitted to the Secretary of 
        State no later than
120 days following the end of the 
        issuer's fiscal year, each year
during the period of 
        the authorization, one copy of a report which shall

        contain a balance sheet and income statement prepared 
        as of the issuer's
most recent fiscal year end 
        certified by an independent certified public

        accountant, together with such current information 
        concerning the
securities and the issuer thereof as the 
        Secretary of State may prescribe
by rule or regulation 
        or order;

            (e) prior to any offer or sale of securities under 
        the provisions of
this paragraph (2), each registered 
        dealer participating in the offer or
sale of such 
        securities shall provide upon request of prospective

        purchasers of such securities a copy of the most recent 
        report required
under the provisions of sub-paragraph 
        (d) of this paragraph (2);

            (f) approval of an application filed pursuant to 
        this paragraph (2) of
subsection F shall expire 5 years 
        after the date of the granting
of the approval, unless 
        said approval is sooner terminated by (1) suspension or

        revocation by the Secretary of State in the same manner 
        as is provided
for in subsections E, F and G of Section 
        11 of this Act,
or (2) the applicant filing with the 
        Secretary of State an affidavit to
the effect that (i) 
        the subject securities have become exempt under 
        Section
3 of this Act or (ii) the applicant no longer 
        is capable of acting as
the applicant and stating the 
        reasons therefor or (iii) the applicant no longer

        desires to act as the applicant.  In the event of the 
        filing of an
affidavit under either preceding 
        sub-division (ii) or (iii) the
Secretary of State may 
        authorize a substitution of applicant upon the
new 
        applicant executing the application as originally 
        filed.  However,
the aforementioned substituted 
        execution shall have no effect upon the
previously 
        determined date of expiration of approval of the 
        application.
Notwithstanding the provisions of this 
        subparagraph (f), approvals granted
under this 
        paragraph (2) of subsection F prior to the effective 
        date of this
Act shall be governed by the provisions of 
        this Act in effect on such
date of approval; and

            (g) no person shall be considered to have violated 
        Section 5 of this
Act by reason of any offer or sale 
        effected in reliance upon an
approval granted under 
        this paragraph (2) after a termination thereof under 
        the
foregoing subparagraph (f) if official notice of 
        such termination has not
been circulated generally to 
        dealers by the Secretary of State and if
such person 
        sustains the burden of proof that he or she did not 
        know, and in
the exercise of reasonable care, could not 
        have known, of the
termination; or

        (3) the securities, or securities of the same class, 
    are the subject
of an existing registration under Section 5 
    of this Act.

    The exemption provided in this subsection F shall apply 
only if the offer
or sale is made in good faith and not for the 
purpose of avoiding any of
the provisions of this Act, and only 
if the offer or sale is not made for the
direct or indirect 
benefit of the issuer of the securities, or the
controlling 
person in respect of such issuer.

    G. (1) Any offer, sale or issuance of a security, whether 
    to residents
or to non-residents of this State, where:

            (a) all sales of such security to residents of this 
        State (including the
most recent such sale) within the 
        immediately preceding 12-month period
have been made 
        to not more than 35 persons or have involved an 
        aggregate
sales price of not more than $1,000,000;

            (b) such security is not offered or sold by means 
        of any general
advertising or general solicitation in 
        this State; and

            (c) no commission, discount, or other remuneration 
        exceeding 20%
of the
sale price of such security, if 
        sold to a resident of this State, is
paid or given 
        directly or indirectly for
or on account of such sales.

        (2) In computing the number of resident purchasers or 
    the aggregate sales
price under paragraph (1) (a) above, 
    there shall be excluded any purchaser
or dollar amount of 
    sales price, as the case may be, with respect to any

    security which at the time of its sale was exempt under 
    Section 3 or was
registered under Section 5, 6 or 7 or was 
    sold in a
transaction exempt under other subsections of 
    this Section 4.

        (3) A prospectus or preliminary prospectus with 
    respect to a security for
which a registration statement is 
    pending or effective under the Federal
1933 Act shall not 
    be deemed to constitute general advertising or general

    solicitation in this State as such terms are used in 
    paragraph (1) (b)
above, provided that such prospectus or 
    preliminary prospectus has not been
sent or otherwise 
    delivered
to more than 150 residents of this State.

        (4) The Secretary of State shall by rule or regulation 
    require the
filing of a report or reports of sales made in

    reliance upon the exemption provided by this subsection G 
    and prescribe
the form of such report and the time within 
    which such report shall be filed.
Such report shall set 
    forth the name and address of the issuer and of the

    controlling person, if the sale was for the direct or 
    indirect benefit
of such person, and any other information 
    deemed necessary by the Secretary
of State to enforce 
    compliance with this subsection G.  The Secretary of
State 
    shall prescribe by rule or regulation the amount of the fee 
    for
filing any such report, established pursuant to Section 
    11a
of this Act, which shall not be returnable in any 
    event.  The
Secretary of
State may impose, in such cases as 
    he or she may deem appropriate, a penalty
for failure to 
    file any such report in a timely manner, but no such 
    penalty
shall exceed an amount equal to five times the 
    filing fee.  The contents
of any such report or portion 
    thereof may be deemed confidential
by the Secretary of 
    State by rule or order and if so deemed shall not
be

    disclosed
to the public except by order of court or in 
    court proceedings.  The
failure to file any such report 
    shall not affect the availability of such
exemption, but 
    such failure to file any such report shall constitute a

    violation of subsection D of Section 12 of this Act, 
    subject to the
penalties enumerated in Section 14 of this 
    Act.  The civil remedies
provided for in subsection A of 
    Section 13 of this Act and the civil
remedies of rescission 
    and appointment of a receiver, conservator,
ancillary 
    receiver or ancillary conservator provided for in 
    subsection F of
Section 13 of this Act shall not be 
    available against any person by
reason of the failure to 
    file any such report or on account of the contents of
any 
    such report.

        H. Any offer, sale or issuance of a security to an 
    accredited investor provided that such security is not 
    offered or sold by means of any general advertising or 
    general solicitation, except as otherwise permitted in 
    this Act.

        I. Any offer, sale or issuance of securities to or for 
    the benefit
of security holders of any person incident to a 
    vote by such security
holders pursuant to such person's 
    organizational document or any applicable
statute of the 
    jurisdiction of such person's organization, on a merger,

    consolidation, reclassification of securities, or sale or 
    transfer of
assets in consideration of or exchange for 
    securities of the same or
another person.

        J. Any offer, sale or issuance of securities in 
    exchange for one
or more outstanding securities, claims or 
    property interests, or partly
in such exchange and partly 
    for cash, where such offer, sale or issuance
is incident to 
    a reorganization, recapitalization, readjustment,

    composition or settlement of a claim, as approved by a 
    court of competent
jurisdiction of the United States, or 
    any state.

        K. Any offer, sale or issuance of securities for 
    patronage,
or as patronage refunds, or in connection with 
    marketing agreements by
cooperative associations organized 
    exclusively for agricultural, producer,
marketing, 
    purchasing, or consumer purposes; and the sale of

    subscriptions for or shares of stock of cooperative 
    associations
organized exclusively for agricultural, 
    producer, marketing, purchasing,
or consumer purposes, if 
    no commission or other remuneration is paid or
given 
    directly or indirectly for or on account of such 
    subscription,
sale or resale, and if any person does not 
    own beneficially more than 5%
of the aggregate amount of 
    issued and outstanding capital stock of such
cooperative 
    association.

        L. Offers for sale or solicitations of offers to buy 
    (but not the
acceptance thereof), of securities which are 
    the subject of a pending
registration statement filed under 
    the Federal 1933 Act and which are the
subject of a pending 
    application for registration under this Act.

        M. Any offer or sale of preorganization subscriptions 
    for any securities
prior to the incorporation, 
    organization or formation of any issuer
under the laws of 
    the United States, or any state, or the issuance by
such 
    issuer, after its incorporation, organization or 
    formation, of
securities pursuant to such preorganization 
    subscriptions, provided the
number of subscribers does not 
    exceed 25 and either (1) no commission
or other 
    remuneration is paid or given directly or indirectly for or 
    on
account of such sale or sales or issuance, or (2) if any 
    commission or
other remuneration is paid or given directly 
    or indirectly for or on account
of such sale or sales or 
    issuance, the securities are not offered or sold
by any 
    means of general advertising or general solicitation in 
    this
State.

        N. The execution of orders for purchase of securities 
    by a registered
salesperson and dealer, provided such 
    persons act as agent for the purchaser,
have made no 
    solicitation of the order to purchase the securities, have 
    no
direct interest in the sale or distribution of the 
    securities ordered, receive
no commission, profit, or 
    other compensation other than the commissions
involved in 
    the purchase and sale of the securities and deliver to the

    purchaser written confirmation of the order which clearly 
    identifies the
commissions paid to the registered dealer.

        O. Any offer, sale or issuance of securities, other 
    than fractional
undivided interests in an oil, gas or other 
    mineral lease, right or
royalty, for the direct or indirect 
    benefit of the issuer thereof, or of a
controlling person, 
    whether through a dealer (acting either as principal
or 
    agent) or otherwise, if the securities sold, immediately 
    following
the sale or sales, together with securities 
    already owned by the
purchaser, would constitute 50% or 
    more of the equity interest of any
one issuer, provided 
    that the number of purchasers is not more than 5 and

    provided further that no commission, discount or other 
    remuneration
exceeding 15% of the aggregate sale price of 
    the securities is paid or
given directly or indirectly for 
    or on account of the sale or sales.

        P. Any offer, sale or issuance of securities
(except 
    face amount certificate contracts and investment fund 
    shares)
issued by and representing an interest in an issuer 
    which is a business
corporation incorporated under the laws 
    of this State,
the purposes of which are to provide capital 
    and supervision solely for
the redevelopment of blighted 
    urban areas located in a municipality in
this State and 
    whose assets are located entirely within that 
    municipality,
provided:  (1) no commission, discount or 
    other remuneration
is paid or given directly or indirectly 
    for or on account of the sale or
sales of such securities; 
    (2) the aggregate amount of any securities of
the issuer 
    owned of record or beneficially by any one person will not 
    exceed
the lesser of $5,000 or 4% of the equity 
    capitalization of the issuer; (3) the
officers and 
    directors of the
corporation have been bona fide residents 
    of the municipality not less than
3 years immediately 
    preceding the effectiveness of the offering sheet for
the 
    securities under this subsection P; and (4) the issuer 
    files with the
Secretary of State an offering sheet 
    descriptive of the securities setting
forth:

            (a) the name and address of the issuer;

            (b) the title and total amount of securities to be 
        offered;

            (c) the price at which the securities are to be 
        offered; and

            (d) such additional information as the Secretary 
        of State may prescribe
by rule and regulation.

        The Secretary of State shall within a reasonable time 
    examine the
offering sheet so filed and, unless the 
    Secretary of State shall make a
determination that the 
    offering sheet so filed does not
conform to the 
    requirements of this subsection P, shall declare the 
    offering
sheet to be effective, which offering sheet shall 
    continue effective for a
period of 12 months from the date 
    it becomes effective.  The fee for
examining the offering 
    sheet shall be as established pursuant to Section
11a of 
    this Act, and shall not be returnable in any event.  The 
    Secretary
of State shall by rule or regulation require the 
    filing of a report or
reports of sales made to residents of 
    this State in reliance upon the
exemption provided by this 
    subsection P and prescribe the form of such
report and the 
    time within which such report shall be filed. The Secretary

    of State shall prescribe by rule or regulation the amount 
    of the fee for
filing any such report, but such fee shall 
    not be less than the minimum
amount nor more than the 
    maximum amount established pursuant to Section
11a of this 
    Act, and shall not be returnable in any event.  The 
    Secretary
of State may impose, in such cases as he or she 
    may deem appropriate, a penalty
for failure to file any 
    such report in a timely manner, but no such penalty
shall 
    exceed an amount equal to five times the filing fee.  The 
    contents
of any such report shall be deemed confidential 
    and shall not be disclosed
to the public except by order of 
    court or in court proceedings.  The
failure to file any such 
    report shall not affect the availability of such
exemption, 
    but such failure to file any such report shall constitute a

    violation of subsection D of Section 12 of this Act, 
    subject to the
penalties enumerated in Section 14 of this 
    Act.  The civil remedies
provided for in subsection A of 
    Section 13 of this Act and the civil
remedies of rescission 
    and appointment of a receiver, conservator,
ancillary 
    receiver or ancillary conservator provided for in 
    subsection F of
Section 13 of this Act shall not be 
    available against any person by reason
of the failure to 
    file any such report or on account of the contents of any

    such report.

        Q. Any isolated transaction, whether effected by a 
    dealer or
not.

        R. Any offer, sale or issuance of a security to any 
    person who purchases
at least $150,000 of the securities 
    being offered, where the purchaser's
total purchase price 
    does not, or it is reasonably believed by the person

    relying upon this subsection R that said purchase price 
    does not,  exceed
20 percent of the purchaser's net worth at 
    the time of sale, or if a
natural person a joint net worth 
    with that person's spouse, for one
or any combination of 
    the following: (i) cash, (ii) securities for which
market 
    quotations are readily available, (iii) an unconditional 
    obligation
to pay cash or securities for which quotations 
    are readily available,
which obligation is to be discharged 
    within five years of the sale of the
securities to the 
    purchaser, or (iv) the cancellation of any indebtedness

    owed by the issuer to the purchaser; provided that such 
    security is not
offered or sold by means of any general 
    advertising or general solicitation
in this State.

        S. Any offer, sale or issuance of a security to any 
    person who is, or
who is reasonably believed by the person 
    relying upon this subsection S to
be, a director, executive 
    officer, or general partner of the issuer of the
securities 
    being offered or sold, or any director, executive officer, 
    or
general partner of a general partner of that issuer. For 
    purposes of this
subsection S, "executive officer" shall 
    mean the president, any vice
president in charge of a 
    principal business unit, division or function
(such as 
    sales, administration 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 such policy making

    functions for the issuer.

        A document being filed pursuant to this Section 4 shall 
    be deemed filed,
and any fee paid pursuant to this Section 
    4 shall be deemed paid, upon the date
of actual receipt 
    thereof by the Secretary of State.

        T. An offer or sale of a security, by an issuer that is 
    organized
and, as of the time of the offer and the time of 
    sale is , in good standing under
the laws of the State of 
    Illinois and that is , made solely to persons or entities 
    that are, as of the time of the offer and time of sale, 
    residents of the State of Illinois, subject to the 
    following provided: 
            (1) The offering is made in compliance with the 
        requirements of meets all of the requirements of the

        federal exemption for intrastate offerings provided in 
        Section
3(a)(11) of the Securities Act of 1933 (15 
        U.S.C. 77c(a)(11)) and
Rule 147 adopted under the 
        Securities Act of 1933 (17 CFR
230.147), Rule 147A (17 
        CFR 230.147A), or any other federal exemption 
        providing for intrastate offerings from time to time in 
        effect. 
            (2) The aggregate purchase price of all securities 
        sold by an issuer in reliance on the exemption under 
        this subsection, within any 12-month period, does not 
        exceed: (i)  $1,000,000; or (ii) $4,000,000 if the 
        issuer has undergone and made available (directly, or 
        through a registered Internet portal), to each 
        prospective purchaser and the Secretary of State, 
        copies of its most recent financial statements which 
        have been audited by an independent auditor and 
        certified by a senior officer of the issuer as fairly, 
        completely, and accurately presenting the financial 
        condition of the issuer, in all material respects, as 
        of the dates indicated therein. Amounts received in 
        connection with any offer or sale to any accredited 
        investor or any of the following shall not count toward 
        the calculation of the foregoing monetary limitations:
                (a) any entity (including, without limitation, 
            any trust) in which all of the equity interests are 
            owned by (or with respect to any trust, the primary 
            beneficiaries are) persons who are accredited 
            investors or who meet one or more of the criteria 
            in subparagraphs (b) through (d) of this paragraph 
            (2);
                (b) with respect to participating in an 
            offering of a particular issuer, a natural person 
            serving as an officer, director, partner, or 
            trustee of, or otherwise occupying similar status 
            or performing similar functions with respect to, 
            such issuer;
                (c) with respect to participating in an 
            offering of a particular issuer, a natural person 
            or entity who owns 10% or more of the then 
            aggregate outstanding voting capital securities of 
            such issuer; or
                (d) such other person or entity as the 
            Secretary of State may hereafter exempt by rule.
            The Secretary of State may hereafter cumulatively 
        increase the dollar limitations provided in this 
        paragraph (2). 
            (3) The aggregate amount sold by an issuer to any 
        purchaser (other than an accredited investor or a 
        person or entity which meets one or more of the 
        criteria in subparagraphs (a) through (d) of paragraph 
        (2) of this subsection T) in an offering of securities 
        made in reliance on the exemption provided in this 
        subsection T, within any consecutive 12-month period, 
        does not exceed $5,000. 
            (4) The Secretary of State shall establish by rule 
        the duties of the issuer  including disclosure and 
        filing requirements, treatment of escrow funds and 
        agreements, production of financial statements, and 
        other requirements as deemed necessary. 
            (5) The issuer has made available, to each 
        prospective purchaser and the Secretary of State, 
        copies of its most recent financial statements 
        personally certified by one or more senior officers of 
        the issuer as fairly, completely, and accurately 
        presenting the financial condition of the issuer, in 
        all material respects, as of the dates indicated 
        therein. 
            (6) No commission or other remuneration is paid or 
        given
directly or indirectly to any person or entity 
        (including,
without limitation, any registered 
        Internet portal) for
soliciting any investor, other 
        than such payments made person in this State, except to 
        registered dealers
and registered salespersons 
        licensed in this State and such finder fees and other 
        payments now or hereafter permitted under applicable 
        Federal law or a United States Securities and Exchange 
        Commission rule or interpretive letter. 
            (7) Not less than 15 days before the earlier of
the 
        first sale of securities made in reliance on the 
        exemption provided in this subsection T,
or the use of 
        any general solicitation with respect thereto
(other 
        than a general announcement made by or on behalf of), 
        an issuer shall file a notice filing with the Secretary 
        of State together with such other forms, materials, and 
        fees as required by the Secretary of State by rule. 
            The Secretary of State shall prescribe by rule the 
        amount of the fee for filing the notice filing required 
        under this subsection, but the fee shall not be less 
        than the minimum amount nor more than the maximum 
        amount in subparagraph (a), established under pursuant 
        to Section
11a of this Act and shall not be returnable 
        in any event. The
Secretary of State may impose, in 
        such cases as the Secretary he or she may
deem 
        appropriate, a penalty for failure to file any such 
        notice
in a timely manner, but no such penalty shall 
        exceed an
amount equal to 5 times the filing fee. The 
        contents of any
such notice or portion thereof may be 
        deemed confidential by the
Secretary of State by rule 
        or order and if so deemed shall not
be disclosed to the 
        public except by order of court or in court

        proceedings. The failure to file any such notice does 
        not
affect the availability of such exemption, but such 
        failure to
file any such report constitutes a violation 
        of subsection
D of Section 12 of this Act and is 
        subject to the penalties and remedies available in this 
        Act and under the law. 
            (8) All payments for purchase of securities 
        offered
pursuant to the exemption provided under this 
        subsection T are made directly to, and held by, a
the 
        qualified escrowee identified in the escrow agreement

        required pursuant to subparagraph (c) of paragraph 
        (4). 
            (9) The issuer includes each of the following in 
        one or more of the offering materials delivered to a 
        prospective purchaser, or to which a prospective 
        purchaser has been granted electronic access, in 
        connection with the offering:
                (a) a description of the issuer, its type of 
            entity, the address, and telephone number of its 
            principal office;
                (b) a reasonably detailed description of the 
            intended use of the offering proceeds, including 
            any amounts to be paid, as compensation or 
            otherwise, to any owner, executive officer, 
            director, managing member, or other person 
            occupying a similar status or performing similar 
            functions on behalf of the issuer;
                (c) the identity of all persons owning more 
            than 20% 10% of the voting capital securities of 
            the issuer;
                (d) the identity of the executive officers, 
            directors, managing members, and other persons 
            occupying a similar status or performing similar 
            functions in the name of and on behalf of the 
            issuer, including their titles and a reasonably 
            detailed description of their prior experience;
                (e) the identity of any person or entity who 
            has been or will be retained by the issuer to 
            assist the issuer in conducting the offering and 
            sale of the securities (including all registered 
            Internet portals but excluding persons acting 
            solely as accountants or attorneys and employees 
            whose primary job responsibilities involve the 
            operating business of the issuer rather than 
            assisting the issuer in raising capital) and a 
            description of the consideration being paid to 
            each such person or entity for such assistance;
                (e-5) to the extent the issuer is an affiliate 
            or
related party of the registered Internet portal 
            being used
to conduct the offering, a reasonably 
            detailed description
of the relationship between 
            the parties; 
                (f) any additional information material to the 
            offering, including a description of significant 
            factors that make the offering speculative or 
            risky for the purchaser;
                (g) (blank). the information required pursuant 
            to subparagraphs (a) and (b) of paragraph (4) of 
            this subsection T;
                (h) such other information as the Secretary of 
            State may hereafter require by rule. 
            (10) The issuer (directly or through a registered 
        Internet
portal) requires each purchaser to certify, 
        in writing or
electronically, that the purchaser:
                (a) is a resident of the State of Illinois;
                (b) understands that the purchaser he or she is 
            investing in a high-risk, highly speculative, 
            business venture, that the purchaser he or she may 
            lose all of the his or her investment, and that the 
            purchaser that he or she can afford such a loss of 
            the his or her investment;
                (c) understands that the securities being 
            offered are highly illiquid, that there is no ready 
            market for the sale of such securities, that it may 
            be difficult or impossible for purchaser to sell or 
            otherwise dispose of such securities, and (where 
            applicable) that purchaser may be required to hold 
            the securities for an indefinite period of time; 
            and
                (d) understands that purchaser may be subject 
            to the payment of certain taxes with respect to the 
            securities being purchased whether or not 
            purchaser has sold, or otherwise disposed of, such 
            securities or whether purchaser has received any 
            distributions or other amounts from the issuer. 
            (11) The issuer (directly or through a registered 
        Internet
portal) obtains from each purchaser of a 
        security offered under
this subsection T evidence that 
        the purchaser is a resident of
this State and, if 
        applicable, is an accredited investor. Without 
        limiting the generality of the
foregoing, and not to 
        the exclusion of other reasonable methods
which may be 
        used by the issuer in connection with the
foregoing, an 
        issuer may rely on
any evidence permitted under the 
        applicable Federal exemption
relied upon pursuant to 
        paragraph (1) of this subsection T.
            (12) The issuer (and to the extent a registered 
        Internet
portal is used, such registered Internet 
        portal) maintains
records of all offers and sales of 
        securities made
pursuant to the exemption granted by 
        this subsection T and provides ready access to such 
        records to the Secretary of State,
upon notice from the 
        Secretary of State. 
            (13) The issuer is not, either before or as a 
        result of
the offering: 
                (a) an investment company, as defined in 
            Section 3 of the Investment Company Act of 1940 (15 
            U.S.C. 80a-3), as amended and in effect (unless the 
            issuer qualifies for exemption from the terms 
            thereof exclusion from such definition pursuant 
            to: one or more of the exceptions provided in 
            Section 3(c) of the Investment Company Act of 
            1940; , any other provision of the Investment 
            Company Act of 1940; , or any United States 
            Securities and Exchange Commission administrative 
            rule,
regulation, or interpretive letter ruling 
            rule or regulation promulgated with respect to the 
            Investment Company Act of 1940 or in connection 
            therewith; or any other applicable Federal 
            regulation or exemption); or
                (b) subject to the reporting requirements of 
            Section 13 or 15(d) of the Securities Exchange Act 
            of 1934 (15 U.S.C. 78m or 15 U.S.C. 78o(d). 
            (14) Neither the issuer, nor any person owning more 
        than 20% of the voting capital securities of the issuer 
        affiliated with
the issuer (either before or as a 
        result of the offering), nor
the offering itself, nor 
        the registered Internet portal (to the
extent used) is 
        subject to disqualification established by the

        Secretary of State by rule or contained in the 
        applicable Federal exemption relied upon pursuant to 
        paragraph (1) of this subsection T the Securities Act 
        of 1933
(15 U.S.C. 77c(a)(11)) and Rule 147 adopted 
        under the Securities Act of 1933 (17 CFR 230.147), 
        unless both of the following are
met: 
                (a) on a showing of good cause and without

            prejudice to any other action by the Secretary of 
            State,
the Secretary of State determines that it is 
            not necessary
under the circumstances that an 
            exemption is denied; and 
                (b) the issuer establishes that it made a 
            factual
inquiry into whether any disqualification 
            existed under
this paragraph (14), but did not 
            know, and in the exercise of reasonable care could 
            not have known, that a
disqualification existed 
            under this paragraph (14); the nature
and scope of 
            the requisite inquiry will vary based on the

            circumstances of the issuer and the other offering

            participants. 
            (15) A separate investment vehicle may be used to

        aggregate investments in the offering being made by an 
        issuer
under this Section provided that such separate 
        investment vehicle is permitted pursuant to Federal 
        law or the rules or an interpretive letter of the 
        United States Securities and Exchange Commission. The 
        Secretary shall adopt rules consistent with Federal 
        law, rules, or interpretive opinions regarding such 
        separate investment vehicles. For purposes of 
        determining compliance with the
provisions of this 
        subsection T and the related administrative
rules, 
        such investment vehicle shall be disregarded and the

        subject offering shall be assessed as if the issuer had

        made a direct offering to the participating investors. 
        Such separate investment vehicle shall not be 
        considered as an entity qualifying under subparagraph 
        (c) of paragraph (2) of this subsection T for purposes 
        of calculating the purchase price totals permitted 
        under the exemption. The Secretary of State may 
        establish by rule the duties of the separate investment 
        vehicle under this subsection including the production 
        of financial statements, maintenance of certain books 
        and records of the separate investment vehicle, and 
        other requirements as deemed necessary.
(Source: P.A. 99-182, eff. 1-1-16.)

 
    (815 ILCS 5/8d)
    Sec. 8d. Offerings made through
registered Internet 
portals.
    (a) An issuer shall make an offering or
sale of securities 
pursuant to subsection T of Section 4 of this Act
through the 
use of one or more registered Internet portals.
    (b) The Internet portal: 
        (1) shall be a registered broker-dealer under the

    Securities Exchange Act of 1934 (15 U.S.C. 78o); 
        (2) shall be a funding portal registered under the

    Securities Act of 1933 (15 U.S.C. 77d-1) and the
Securities 
    and Exchange Commission has adopted rules
under authority 
    of Section 3(h) of the Securities
Exchange Act of 1934 (15 
    U.S.C. 78c) and Section
304 of the  Jumpstart Our Business 
    Startups
Act (P.L. 112-106) governing funding portals; 
        (3) shall be a dealer registered under this Act as of

    the date of any offer or sale of securities made
through 
    the Internet portal; or 
        (4) shall, to the extent it meets
the qualifications 
    for exemption from registration
pursuant to subsection (d) 
    of this Section: 
            (A) file, not later than 30 days
before the date of 
        the first offer or sale of
securities made within this 
        State, an
application for registration (or renewal of

        registration, as applicable) as a registered
Internet 
        portal with the Secretary of State, in
writing or in 
        electronic form as prescribed by
the Secretary of 
        State, which the Secretary of
State shall make 
        available as an electronic
document on the Secretary of 
        State's Internet
website, containing such information 
        and
required deliveries as specified therein; and
            (B) pay the application filing fee
established 
        under Section 11a of this Act; the Secretary of State 
        shall, within a reasonable
time, examine the filed 
        application and other
materials filed and, approve or 
        deny the application. 
    (c) If any change occurs in the information submitted by,

or on behalf of, an Internet portal to the Secretary of State,

the Internet portal shall notify the Secretary of State within 
10
days after such change occurs and shall provide the 
Secretary of
State with such additional information (if any) 
requested by the
Secretary of State in connection therewith. 
    (d) Notwithstanding anything contained in this Act to the

contrary, neither an Internet portal nor its owning or 
operating
entity is required to register as a dealer or an

investment advisor under this Act if each of the following 
applies
with respect to the Internet portal and its owning or 
operating
entity: 
        (1) It does not solicit purchases, sales, or offers
to 
    buy the securities offered or displayed on the
Internet 
    portal. 
        (2) It does not collect or hold funds in
connection 
    with any purchase, sale, or offer to buy any
securities 
    offered or displayed on the Internet portal.
        (3) It does not compensate employees, agents, or
other 
    persons for the solicitation or based on the sale
of 
    securities displayed or referenced on the Internet
portal.
        (4) It is not compensated based on the amount of

    securities sold. 
        (5) The fee it charges an issuer for an offering of 
    securities on the Internet portal is a fixed amount for 
    each offering, a variable amount based on the length of 
    time that the securities are offered on the Internet 
    portal, a variable amount based on the total proposed 
    offering amount, or any combination of such fixed and 
    variable amounts. 
        (6) It does not offer investment advice or

    recommendations; however, an Internet portal
is not deemed 
    to be offering investment advice or
recommendations simply 
    by virtue of: 
            (A) selecting transactions in which the
Internet 
        portal shall serve as an intermediary;
            (B) establishing reasonable selection criteria
for 
        an issuer to meet in order to establish an offer or

        sale of securities through the Internet portal;
            (C) establishing reasonable selection criteria
for 
        a potential purchaser to meet in order to
participate 
        in an offer or sale of securities made
through the 
        Internet portal; or 
            (D) terminating an issuer transaction at any
time 
        before the first sale of the securities of such
issuer 
        if the Internet portal determines such action
is 
        appropriate, after reasonable due diligence, to

        protect potential purchasers, and the Internet portal

        is able to direct the qualified escrowee to return all 
        funds then provided by potential purchasers, if
any. 
        (7) It does not engage in such other
activities as the 
    Secretary of State, by rule, determines
are prohibited. 
    (e) Upon completion of an offering made pursuant to 
subsection T of Section 4, each registered Internet portal 
involved with the transactions (and the issuer, to the extent 
applicable) shall store any and all electronic materials 
related to the completed offering (including copies of all 
offering documents, all offering materials, and all purchaser 
information) on a secure, non-public, server or in such other 
manner as the Secretary of State may hereafter deem acceptable 
by rule. 

    (f) Notwithstanding anything contained in this Act to the

contrary, in connection with any offering or sale of securities

pursuant to subsection T of Section 4 of this Act, the hosting

registered Internet portal may elect, in its discretion, to

accept as compensation (in whole or part) for the services

provided in connection with the subject offering:
        (1) such equity in, or other securities issued by,

    issuer on the Internet portal as part of the subject

    offering; or
        (2) equity in, or other securities issued by, issuer
of 
    any kind, provided that any right to distribution or

    payment with respect to such class of equity or other

    securities received by the registered Internet portal be

    equal, or junior, in terms of priority to the distribution 
    and payment
rights, as applicable, of the securities being 
    offered on the Internet
portal as part of the subject 
    offering. 
(Source: P.A. 99-182, eff. 1-1-16.)