44-1844

44-1844. Exempt transactions

A. Except as provided in subsections B and C of this section, sections 44-1841 and
44-1842, section 44-1843.02, subsections B and C and sections 44-3321 and 44-3325 do not
apply to any of the following classes of transactions:

1. Transactions by an issuer not involving any public offering.

2. The sale of securities by an executor, administrator, guardian or conservator or
by a bank the business of which is supervised and regulated by an agency of this state or
of the United States, as trustee under a will or trust agreement, or by a receiver or
trustee in insolvency or bankruptcy approved by a court of competent jurisdiction of this
state or the United States.

3. The sale in good faith and not for the purpose of avoiding the provisions of
this chapter by a pledgee of securities pledged for a bona fide debt.

4. The sale in good faith and not for the purpose of avoiding the provisions of
this chapter of securities by the bona fide owner of such securities, other than an
issuer or underwriter, in an isolated transaction, in which the securities are sold
either directly or through a dealer as agent for the owner but where the sales are not
made in the course of repeated or successive transactions of similar character by the
owner and are not made directly or indirectly for the benefit of the issuer or an
underwriter of the securities.

5. The distribution by a corporation of capital stock or other securities to its
stockholders or other security holders as a stock dividend or other distribution out of
retained earnings.

6. Any transaction or series of transactions incident to a statutory or judicially
approved reorganization, merger, triangular merger, consolidation, or sale of assets,
incident to a vote by securities holders pursuant to the articles of incorporation, the
applicable corporate statute or other controlling statute, a partnership agreement or the
controlling agreement among securities holders.

7. The exchange of securities by an issuer with its existing security holders
exclusively, where no commission or remuneration is paid or given, directly or
indirectly, for soliciting the exchange, if such exchange has been duly authorized and
has been approved by the holders of not less than a majority of the outstanding
securities of each class affected by the exchange.

8. An offer or sale of securities to a bank, a savings institution, a trust
company, an insurance company, an investment company as defined in the investment company
act of 1940, a pension or profit sharing trust or other financial institution or
institutional buyer or a dealer whether the purchaser is acting for itself or in a
fiduciary capacity.

9. The issuance and delivery of securities in exchange for other securities of the
same issuer pursuant to a right of conversion entitling the holder of the securities
surrendered in exchange to make such conversion.

10. The issuance and delivery of securities of a corporation to the original
incorporators, not exceeding ten in number, where the securities are not acquired by the
incorporators for the purpose of sale to others and are not directly or indirectly sold
to a third party within twenty-four months unless an incorporator experiences a bona fide
change of financial circumstances within such time period, providing original
incorporators are notified of their right pursuant to title 10 to review the financial
books and records of the corporation at reasonable times.

11. A nonissuer transaction in an outstanding security, including the sale by a
dealer, including an underwriter no longer acting as an underwriter in respect to the
securities involved, of securities sold and distributed to the public, but not including
securities constituting an unsold allotment to or subscription by the dealer as a
participant in the distribution of the securities by the issuer or by or through an
underwriter, if the class of security has been outstanding in the hands of the public for
not less than ninety days preceding the date of the transaction and a recognized manual
of securities designated by the commission by rule or order at the time of sale contains
the names of the issuer's officers and directors, a statement of financial condition of
the issuer as of a date within eighteen months of the date of the sale and a statement of
income or operations for each of the two fiscal years next before the date of the
statement of financial condition or for the period from the commencement of the issuer's
existence to the date of the statement of financial condition if the period is less than
two years.

12. The sale by a dealer, including an underwriter no longer acting as an
underwriter in respect to the securities involved, of securities of an issue sold and
distributed to the public, but not including securities constituting an unsold allotment
to or subscription by the dealer as a participant in the distribution of the securities
by the issuer or by or through an underwriter, if securities of such issue have been
registered by description under sections 44-1871 through 44-1875 or registered by
qualification under sections 44-1891 through 44-1902.

13. The sale of commodity investment contracts traded on a commodities exchange
recognized by the commission at the time of sale.

14. The sale or issuance of any investment contract or other security in connection
with an employee's pension, profit sharing, stock purchase, stock bonus, savings, thrift,
stock option or other similar employee benefit plan which meets the requirements for
qualification under the United States internal revenue code.

15. Transactions within the exclusive jurisdiction of the commodity futures trading
commission as granted under the commodity exchange act.

16. Transactions involving the purchase of one or more precious metals which
require, and under which the purchaser receives, within seven calendar days after the
payment in good funds of any portion of the purchase price, physical delivery of the
quantity of the precious metals purchased by such payment. For the purposes of this
paragraph, physical delivery is deemed to have occurred if, within such seven day period,
the quantity of precious metals purchased by such payment is delivered, whether in
specifically segregated or fungible bulk form, into the possession of a depository other
than the seller which is a financial institution, a depository the warehouse receipts of
which are recognized for delivery purposes for any commodity on a contract market
designated by the commodity futures trading commission or a storage facility licensed or
regulated by the United States or any agency of the United States and such depository or
other person that qualifies as a depository issues and the purchaser receives a
certificate, document of title, confirmation or other instrument evidencing that such
quantity of precious metals has been delivered to the depository and is being and will
continue to be held by the depository on the purchaser's behalf, free and clear of all
liens and encumbrances, other than liens of the purchaser, tax liens, liens agreed to by
the purchaser, or liens of the depository for fees and expenses, which have previously
been disclosed to the purchaser. For the purpose of this paragraph, "financial
institution" means a bank, savings institution or trust company organized under, or
supervised pursuant to, the laws of the United States or of this state.

17. Transactions involving a commodity investment contract solely between persons
engaged in producing, processing, using commercially or handling as merchants each
commodity subject to the contract or any by-product.

18. A nonissuer transaction in an outstanding security, including the sale by a
dealer, including an underwriter no longer acting as an underwriter in respect to the
securities involved, of securities sold and distributed to the public, but not including
securities constituting an unsold allotment to or subscription by the dealer as a
participant in the distribution of the securities by the issuer or by or through an
underwriter if both of the following apply:

(a) The class of security has been outstanding in the hands of the public for not
less than ninety days preceding the date of the transaction.

(b) The securities are listed on an automated quotation system of a national
securities association registered under the securities exchange act of 1934.

19. Transactions involving the sale of securities to persons who are not residents
of this state and are not present in this state if all of the following conditions are
met:

(a) The securities being offered are not blind pool offerings.

(b) At least ten days before the offering date:

(i) The issuer certifies that the securities being offered will be offered and sold
in compliance with the securities act of 1933 and the laws and regulations of those
states in which the offers and sales will be made.

(ii) The issuer files as a notice filing one copy of any offering materials which
may be required by the SEC or the laws and rules of those states in which the offers and
sales will be made.

(iii) The issuer submits a filing fee of two hundred dollars.

(c) Within ten working days of completion of the offering the issuer files a
description of the actions taken as to compliance with the securities act of 1933 and the
laws and rules of those states in which the offers and sales were made.

(d) The transaction complies with any rule adopted by the commission further
restricting the exemption created by this paragraph to prevent any fraudulent practices.

20. Transactions involving offers or sales of one or more promissory notes directly
secured by a first lien on a single parcel of real estate on which is located a dwelling
or other residential or commercial structure and participation interest in those notes
that are exempt under section 4(5) of the securities act of 1933.

B. The provisions of subsection A, paragraph 11 of this section do not apply to
either of the following:

1. Sales by a dealer or salesman who is not registered in this state.

2. Solicited sales to or purchases from a resident of this state by a dealer who
does not have, before the initial solicitation, a written new account form signed by the
resident or a customer agreement signed by the resident and a previous sale or purchase
of a security with the resident.

C. The commission may by order revoke or suspend the exemption under subsection A,
paragraph 11 or 18 of this section with respect to any securities or the use of the
exemption under subsection A, paragraph 11 of this section by any dealer if it finds that
the further sale in this state of the securities or by the dealer would work, or tend to
work, a fraud or deceit on the purchaser.