STATE OF CALIFORNIA DEPARTMENT OF BUSINESS OVERSIGHT APPLICATION FOR QUALIF I CATION BY PERMIT (SECTION 260.113) DBO 260.113 (Rev. 4 - 18 ) STA T E OF C A L I F OR N IA DEPARTMENT O F B U S I NESS O V ER S I G H T S M A L L COR P ORATE O F F E R I NG RE G I S TR AT I ON S CO R 1. S mall C ompa n y a ppl i ca n ts fi l ing a n a ppl ic a t i on f o r qu a l i fi ca t i on b y p e rmit und e r Co r por a t i ons c ode S ec t i on 25113 ( b) ( 2) should c onsid e r the f o l lowin g : An a ppl i ca nt under Se c t i on 25113 ( b ) (2) must be ( 1) a C a l i fo r nia c o r po r a t i on, or a f o r e i g n c o r po ra t i on subj ec t t o C o rpo ra t i ons C ode S ec t i on 2115; and ( 2) a small bu s iness c on ce rn a s d e fin e d in 15 U. S .C. S ec t i on 632 (a ) a nd 13 C . F .R. P a rt 121. A c o p y of tho s e state a nd f e d e r a l c ode se c t i ons is a t t ac h e d. 2. I n a ddi t ion, t he ins t ru c t i ons for use o f F o r m U - 7 a s ad o pted b y the N o r th A me r ic a n S ec u rities Admin i str a tors Asso c iation N A S A A ) p r ovide i n p a rt: " The Compa n y should e x p ec t t h a t t he of f i c e of the a dm i nis t r a tor m a y h a ve c om m e nts and qu e st i ons c on ce rni n g the a nsw e rs s e t fo r th on t h e 267 F o r m and th a t c h a n g e s m a y b e r e quir e d to be m a de to t h e a nsw e rs b e f o re the re g i str a t i on is de c la re d e f f ec t ive. C om m e nts and qu e st i ons m a y e i t h e r be inclu d e d in a l e t t e r or ma d e b y tel e phone c om m unic a t i on in i t i a ted b y the o f fi c e o f the a dm i nis t r a tor in r e sponse to t h e f i l in g . " A cc o r di n g l y , a n a ppl i ca n t should r e view the qu a l if ic a t i on st a nd a rds of the C om m is s ioner of B usiness Ov e rsi g ht c on t a ined in A r t i c le 4 (c om me n c ing with S ec t i on 260. 1 40) o f Sub c h a pt e r 2 of Ch a pter 3 of Tit l e 10, C a l i fo r nia Code o f R e g u l a t i ons. 3. F inal l y , t h e N A S AA ins t ru c t i ons for use o f F o r m U - 7 pr o vide in p a rt: B E V E RY CARE F U L A ND P RE C I S E I N A NS W E R I N G A LL Q U ES T I O N S . G I VE F U LL A N D COM P L E T E A N SW ERS S O T H AT TH E Y A RE N O T M I S LE A D I NG U N DER T H E C I RCUMSTA N CES I N V O L VE D . DO N O T D I S CUSS A NY F U T URE P ER F ORMANCE OR OT H ER AN T I C I P AT E D EV E NT U N L ESS Y O U H A VE A REASO N AB L E B A S I S TO B E L I E VE T H A T I T W I LL ACTU A L L Y O C CUR W I TH I N THE F ORE S EE A B L E F UT U RE. I F A NY A N S W ER REQ U I R I NG S I GN I F I C A NT I N F ORMA T I ON I S M A TE R I A L L Y I N AC C URATE, I NCOM P L ETE O R M I S L EA D I N G , T HE COMPA N Y, I TS M A N A GEM E NT A ND P R I N C IP A L S TOCK H O L DERS MAY H A VE L I A B I L I TY T O I N V ESTOR S . THE S E L L I N G A G EN T S S H O U L D E X ER C I S E AP P ROP R I A T E D I L I G E NCE TO DE T ER M I NE TH A T NO S UCH I N AC C URACY OR I NCOM P L ET E NESS H A S OC C UR R ED, O R TH E Y A L S O M A Y B E L I A B L E. As a re sul t , a n a ppl i ca nt m a y wish to s e e k the a ss i stan c e of a n e x p e ri e n c e d a t t o r n e y a t l a w, a ce rtifi e d publ i c a cc ount a nt, as we ll a s oth e r p r o f e s sionals such a s a li ce nsed bro ke r - d ea l e r. American LegalNet, Inc. www.FormsWorkFlow.com STATE OF CALIFORNIA DEPARTMENT OF BUSINESS OVERSIGHT APPLICATION FOR QUALIFIC ATION BY PERMIT (SECTION 260.113) DBO 260.113 (Rev. 4 - 18 ) Page 2 of 13 I nst r u c tions: The f ollowing inst r u c tions m ust be a dh ere d to with re s p ec t to a ll a ppli ca tions f or qu a li f i ca tion b y p er m it u nd e r S ec tions 25102 ( c ) , 25113 a nd 25121; b y c o o r din a tion und e r S ec tion 2 5111, a nd noti f i ca tion b y Se c tion 25112: C o m pl e tion of Appli ca tion. The f a c ing p a g e on t he re v e r se side h ere o f , must be c o m pl e t e d in f ull a nd in a ddition to the fa c ing p a g e , a ppli ca tions must c ontinue b y c o m p l e tion of eac h it e m o f the a ppli ca ble f ollowing f or m s: Appli ca tion f or qu a li f i c a tion b y c o o r din a tion, F o r m No. 260.111 Appli ca tion f or qu a li f i c a tion b y noti f i ca tion, F o r m No. 260.112 Appli ca tion f or p er m it p u r su a nt to S ec tion 25113, F o r m No. 260.113 Appli ca tion f or p er m it p u r su a nt to S ec tion 25121, F o r m No. 260.121 Appli ca tion f or N e g oti a t i ng P er m it pu r su a nt to Se c tion 25102 (c) , F o r m N o . 260.113 The nu m b er i n g s e q u e n c e in the f o r m s m ust be a d h ere d to. A n y it e m whi c h is in a ppli ca ble should be list e d b y the nu m b e r on the f o r m , f ollow e d si m p l y b y the w o r d " in a ppli ca b l e ." F o r m of Appli c a tion. The a ppli ca tion should be t y p e w r itt e n or p r int e d in t he En g lish l a n g u a g e , on one side on l y o f e ith e r l e g a l or l e tt e r si z e p a p er . S i g ning o f Appli ca tions. An a ppli ca tion f or p er m i t pu r su a nt to S ec tion 25113 ( b )( 2) m ust be re vi e w e d a nd s i g n e d b y e ac h m e m b e r of the b o ar d of di rec to r s of the s m a ll c o m p a n y a ppli ca nt. A n y oth e r a ppli ca tion should be si g n e d b y a n o f f i ce r o r g e n e r a l p ar tn e r of the a ppli ca nt; how e v er , it m a y be si g n e d b y a noth e r p e r son holding a po w e r of a tto r n e y f or s u c h pu r pos e s fr o m the a ppli ca nt, a nd if s i g n e d on b e h a lf of the a ppli ca nt pu r su a nt to su c h pow e r of a tto r n e y , should in c l u de a s a n a ddition a l e x hibit a c o p y o f s a id pow e r of a t t o r n e y or a c o p y of the c o r po ra te r e solution a utho r i z ing the a tto r n e y to a c t. I t e m 5 - - " P ublic m ar k e t . " A " public m a r k e t " e x ists f or this c l a ss of s ec u r iti e s if it ( 1) is list e d on a n a tion a l s ec u r iti e s e x c h a n g e , ( 2) is t ra d e d in the o v er - th e - c ount e r m ar k e t a nd quot e d in the Wa ll S t r ee t J ou r n a l or oth e r n e wsp a p e r of g e n era l c i rc ul a tion, or ( 3) is h e ld of r e c o r d or b e n ef i c i a l l y b y 500 or mo r e p er sons. I n c o r po r a tion b y Re fe r e n ce . I n li e u of a nsw e r ing a n y s p ec i f ic it e m in this f o r m , a n a ppli ca nt m a y in c o r po ra te t h e in f o r m a t i on ca ll e d f or b y re f ere n c e to a n y a tt ac h e d do c u m e nt, or to a n y d o c u m e nt c u rre nt l y on f ile with the D e p ar t m e nt. S u c h re f er e n c e should indi ca te the p a g e s or po r tion of the do c u m e nt wh e r e the in f o r m a tion is lo ca t e d. A m e nd m e nts to Appli ca t ions. An a m e nd m e nt to a n y a ppli ca tion f or q u a li f i ca tion should c ont a in on l y the in f o r m a tion b e ing a m e nd e d b y it e m nu m b e r a nd should be v er i f i e d in the f o r m p re s cr ib e d f o r the a ppli ca tion. E ac h a m e n d m e nt should be acc o m p a ni e d b y a f a c ing p a g e in t he f o r m p r e s cr ib e d b y Se c tion 260.110 of the r ul e s on w hi c h the a ppli ca nt sh a ll i ns er t the fac t th a t the f il i ng is a n a m e nd m e nt a nd t he nu m b e r of the a m e nd m e n t if m o r e th a n one a m e n d m e nt. F iling Fe e C a l c ul a tion. The f iling f e e f i x e d b y S ec tion 25608 m ust acc omp a n y e a c h a ppli ca tion a n d the a m ount of f iling fe e p a id is to be s e t f o r th on the fac i n g p a g e in the upp e r r i g ht h a nd c o r n er . B y w a y of illust ra tion, the f iling f e e f or q u a li f i ca tion of s ec u r iti e s b y c o o r din a tion, noti f i ca tion, or p er m it, u n d e r S ec tions 25113 ( b )( 1) or 25121 is c o m put e d b y t a king 1/5th of 1% o f the m a x i m um a g g r e g a te o f f e r ing p r i c e of s e c u r iti e s b e i n g qu a li f i e d in C a li f o r ni a , s e e a pp r op r i a te c olu m n on fac i n g p a g e , a nd a ddi n g $200. Thus, a qu a li f i ca tion wi t h a n a g g r e g a te o f fer i n g p r i c e of $275,250 would b e c o m put e d b y m ultip l y i ng $275,250 b y American LegalN