A broker-dealer's agent in State Z completes a sale under a private placement exemption to a non-institutional investor, receiving a commission for her efforts. What is the impact on the exemption?

1. AThe exemption is preserved if no more than 10 persons purchase.
2. BThe exemption is preserved only if no commissions are paid to any party.
3. CThe exemption is lost for that transaction.✓ Correct answer
4. DThe exemption is preserved only if all investors are institutional.

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