Before the offer or sale of any note, bond, debenture, or other evidence of indebtedness by a not-for-profit issuer specified in K.S.A. 17-12a201(7) and amendments thereto, the issuer shall register the security pursuant to K.S.A. 17-12a304 and amendments thereto, unless one of the following conditions is met:

1. (a) The security or transaction is exempt under any provision of the Kansas uniform securities act other than K.S.A. 17-12a201(7), and amendments thereto.
2. (b) The issuer is excluded from the definition of an investment company, and the security is issued in exchange for assets contributed to a fund pursuant to section 3(c)(10)(B) of the investment company act of 1940, 15 U.S.C. section 80a-3(c)(10)(B), as adopted by reference in K.A.R. 81-2-1.

(Authorized by K.S.A. 17-12a605(a); implementing K.S.A. 17-12a201(7)(C); effective, T-81-8-22-05, Aug. 22, 2005; effective Dec. 16, 2005; amended Jan. 4, 2016.)