This division may be known as the “Corporate Securities Law of 1968.”

References herein to “this law” refer to the applicable provisions of this division.

Unless the context otherwise requires, the definitions in this part apply throughout this division.

“Advertisement” means any written or printed communication or any communication by means of recorded telephone messages or spoken on radio, television, or similar communications media, published in connection with the offer or sale of a security.

include an individual who has no place of business in this state if he or she effects transactions in this state exclusively with broker-dealers.

“Business days” are all days other than every Saturday, every Sunday, and such other days as are specified or provided for as holidays in the Government Code of the State of California.

or sells securities for that person’s own account, either individually or in some fiduciary capacity, but not as part of a regular business.

guaranteeing options. The commissioner may by order certify an exchange under this section upon those conditions as the commissioner by rule or order deems appropriate, and upon notice and opportunity to be heard the commissioner may suspend or revoke that certification, if the commissioner finds that certification, suspension, or revocation to be in the public interest and necessary and appropriate for the protection of investors.

broker-dealer.

“Commissioner” means the Commissioner of Financial Protection and Innovation.

“Entity conversion transaction” means a conversion pursuant to Section 1151, 1157, 15911.02, 15911.08, 16902, 16908, 17710.02, or 17710.08 or a conversion that occurs entirely out of state, unless the interests in the entity resulting from the conversion to be held by the equity holders of the entity being converted as a result of the conversion are not securities. For purposes of Sections 25103 and 25120 an entity conversion transaction is not a change in the rights, preferences, privileges, or restrictions of or on outstanding securities or an exchange of securities by the issuer with its existing security holders exclusively.

“Fraud,” “deceit,” and “defraud” are not limited to common law fraud or deceit.

“Guaranteed” means guaranteed as to payment of principal, interest, dividends, or call premium.

“Investment adviser” does not include persons excepted from the definition of “investment adviser” by Section 202(a)(11) of the Investment Advisers Act of 1940 (15 U.S.C. 80a-1 et seq., as amended), except that with regard to those persons the commissioner may investigate and bring enforcement actions with respect to fraud and deceit, including and without limitation fraud and deceit under Section 25235, and any rules of the commissioner adopted thereunder.

“Issuer” means any person who issues or proposes to issue any security, except that:

“Nonissuer transaction” means any transaction not directly or indirectly for the benefit of the issuer. A transaction is indirectly for the benefit of the issuer if any portion of the purchase price of any securities involved in the transaction will be received indirectly by the issuer. An offering which involves both an issuer transaction and a nonissuer transaction shall be treated for the purposes of Chapters 2 (commencing with Section 25110) and 4 (commencing with Section 25130) of Part 2 of this division as an issuer transaction, but for the purposes of Chapter 1 (commencing with Section 25100) of Part 2 of this division they shall be treated as separate transactions.

“Owners’ association” means a nonprofit corporation or association created to own or lease the commonly owned lots, parcels or areas referred to in clause (a) of Section 25015, or to provide management, maintenance, preservation or control of either such lots, parcels or areas or of the separately owned lots, parcels or areas, or both, or any portion of or interest in them, or interest subject to subdivision (g) of Section 11004.5 of the Business and Professions Code, if the shares or certificates of membership therein are transferable only by transfer of the interests in the lots, parcels or areas. Such shares of stock or memberships shall be considered interests in a real estate development or in subdivided lands or a subdivision.

“Person” means an individual, a corporation, a partnership, a limited liability company, a joint venture, an association, a joint stock company, a trust, an unincorporated organization, a government, or a political subdivision of a government.

“Publish” means publicly to issue or circulate by newspaper, mail, radio or television, or otherwise to disseminate to the public.

“Rollup participant” means a finite-life limited partnership.

“Rollup transaction” means any transaction or series of transactions that directly or indirectly through acquisition or otherwise involves the combination or reorganization of one or more rollup participants and is one of the following:

exempts from the definition of a rollup transaction pursuant to subparagraph (c) (ii) of Item 901 of Regulation S-K adopted by the Securities and Exchange Commission.

Section 12 of the Securities Exchange Act of 1934, as amended, if the resulting issuer is also not required to register or report under Section 12.

restructuring of a single limited partnership if transactions in the security issued as a result of the reorganization or restructuring are not reported under a transaction reporting plan declared effective before January 1, 1991, by the Securities and Exchange Commission under Section 11A of the Securities Exchange Act of 1934, as amended.

the limited partnership assets performed by an independent appraiser unaffiliated with the sponsor or general partner of the limited partnership and which value the assets as if sold in an orderly manner in a reasonable period of time, plus or minus other balance sheet items, and less the cost of sale or refinancing. Compensation to dissenting limited partners of rollup transactions may be cash, secured debt instruments, unsecured debt instruments, or freely tradeable securities; provided, however, that:

compensation, in addition to the requirements of subparagraph (A), limit total leverage to 70 percent of the appraised value of the assets.

securities in the 20-day period following the transaction. If the issuer of the freely tradeable securities is affiliated with the sponsor or general partner, newly issued securities to be utilized as compensation to dissenting limited partners shall not represent more than 20 percent of the issued and outstanding shares of that class of securities after giving effect to the issuance. For the purposes of the preceding sentence, a sponsor or general partner is “affiliated” with the issuer of the freely tradeable securities if the sponsor or general partner receives any material compensation from the issuer or its affiliates in conjunction with the rollup transaction or the purchase of the general partner’s interest; provided, however, that nothing herein shall restrict the ability of a sponsor or general partner to receive any payment for its equity interests and compensation as otherwise provided by this section.

security with substantially the same terms and conditions as the security originally held, provided that the receipt or retention of that security is not a step in a series of subsequent transactions that directly or indirectly through acquisition or otherwise involves future combinations or reorganizations of one or more rollup participants. Securities received or retained will be considered to have the same terms and conditions as the security originally held if:

originally held.

The rights set forth in paragraphs (1) and (2) are the only rights of dissenting limited partners to which the presumption under this subdivision applies. A general partner or sponsor shall file an application for qualification pursuant to Section 25110 or Section 25120 with respect to any other rights proposed to be offered to dissenting limited partners.

At the time a registration statement is filed with the Securities and Exchange Commission with respect to an eligible rollup transaction, a general partner or sponsor shall notify, to the maximum extent permitted by the federal securities laws, each limited partner who has an address in this state by certified mail of the following: That a registration statement has been filed with the Securities and Exchange Commission with respect to a rollup transaction; that the general partner or sponsor claims an exemption from the review process under the law by

virtue of Section 25014.7, which defines “eligible rollup transaction”; that the general partner or sponsor has the burden of proof under the law that the transaction meets the definition of eligible rollup transaction; and that the commissioner does not recommend or endorse the transaction.

resulting from a rollup transaction may not, without concurrence by the sponsor, general partners, board of directors or trustee, depending on the form of entity, vote to:

transaction.

committee expenses; travel expenses; and all other fees related to the preparatory work of the transaction, but not including costs that would have otherwise been incurred by the subject limited partnerships in the ordinary course of business, or solicitation expenses.

limited partnership is required to pay any of the costs of the rollup transaction and the general partner or sponsor is not required to pay the rollup transaction costs on behalf of the dissenting limited partnerships in a rollup in which one or more limited partnerships determines not to approve the transaction, but where the rollup transaction is consummated with respect to one or more approving limited partnerships.

determined to be a “partnership” pursuant to Section 14(h)(4)(B) of the Securities Exchange Act of 1934 or such other entity having a substantially economically equivalent form of ownership instrument.

partnership.

“Real estate development” means a development (a) which consists or will consist of separately owned lots, parcels or areas with either or both of the following features:

“Rule” means any published regulation or standard of general application issued by the commissioner. “Order” means a consent, authorization, approval, permit, or requirement applicable to a specific case issued by the commissioner.

“Securities Act of 1933,” “Securities Exchange Act of 1934,” “Investment Advisers Act of 1940,” and “Investment Company Act of 1940” mean the federal statutes of those names as amended before or after the effective date of this law.

“Security” means any note; stock; treasury stock; membership in an incorporated or unincorporated association; bond; debenture; evidence of indebtedness; certificate of interest or participation in any profit-sharing agreement; collateral trust certificate; preorganization certificate or subscription; transferable share; investment contract; viatical settlement contract or a fractionalized or pooled interest therein; life settlement contract or a fractionalized or pooled interest therein; voting trust certificate; certificate of deposit for a security; interest in a limited liability company and any class or series of those interests (including any fractional or other interest in that interest), except a membership interest in a limited liability company in which the person claiming this exception can prove that all of the members are actively engaged in the management of the limited liability company; provided that evidence that members vote or have the right to vote, or the right to information concerning the business and affairs of the limited liability company, or the right to participate in management, shall not establish, without more, that all members are actively engaged in the management of the limited liability company; certificate of interest or participation in an oil, gas or mining title or lease or in payments out of production under that title or lease; put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof); or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency; any beneficial interest or other security issued in connection with a funded employees’ pension, profit sharing, stock bonus, or similar benefit plan; or, in general, any interest or instrument commonly known as a “security”; or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. All of the foregoing are securities whether or not evidenced by a written document. “Security” does not include:

“State” means any state, territory, or possession of the United States, the District of Columbia and Puerto Rico.

“Subdivided lands” and “subdivision” have the meanings prescribed in Sections 11000, 11004.5, and 11218 of the Business and Professions Code.

“Underwriter” means a person who has agreed with an issuer or other person on whose behalf a distribution is to be made (a) to purchase securities for distribution or (b) to distribute securities for or on behalf of such issuer or other person or (c) to manage or supervise a distribution of securities for or on behalf of such issuer or other person.

expected death benefit of the life insurance policy or certificate.