OKLAHOMA BUSINESS OPPORTUNITY SALES ACT

801. Short title

Sections 801 through 829 of this title shall be known and may be cited as the "Oklahoma Business Opportunity Sales Act".

802. Definitions

As used in the Oklahoma Business Opportunity Sales Act, Section 801 et seq. of this title, unless otherwise provided:

1. "Administrator" means the Administrator of the Oklahoma Department of Securities.

2. "Advertising" means any circular, prospectus, advertisement or other material or any communication by radio, television or other electronic transmission, newspapers, magazines, pictures or similar means used in connection with an offer or sale of any business opportunity.

3. a. "Business opportunity" means a contract or agreement, between a seller and purchaser, express or implied, orally or in writing, wherein it is agreed that the seller or a person recommended by the seller shall provide to the purchaser any products, equipment, supplies or services enabling the purchaser to start a business and the seller represents directly or indirectly, orally or in writing, that:

(1) The seller or a person recommended by the seller will provide or assist the purchaser in finding locations for the use or operation of vending machines, racks, display cases or other similar devices, on premises neither owned nor leased by the purchaser or seller;

(2) The seller or a person recommended by the seller will provide or assist the purchaser in finding outlets or accounts for the purchaser's products or services;

(3) The seller or a person specified by the seller will purchase any or all products made, produced, fabricated, grown, bred or modified by the purchaser;

(4) The seller guarantees that the purchaser will derive income from the business which exceeds the price paid to the seller;

(5) The seller will refund all or part of the price paid to the seller, or repurchase any of the products, equipment or supplies provided by the seller or a person recommended by the seller, if the purchaser is dissatisfied with the business; or

(6) The seller will provide a marketing plan.

b. "Business opportunity" does not include:

(1) Any offer or sale of an on-going business operated by the seller and to be sold in its entirety;

(2) Any offer or sale of a business opportunity to an on-going business where the seller will provide products, equipment, supplies or services which are substantially similar to the products, equipment, supplies or services sold by the purchaser in connection with the purchaser's on-going business;

(3) Any offer or sale of a business opportunity which involves a marketing plan made in conjunction with the licensing of a federally registered trademark or a federally registered service mark provided that the seller has a minimum net worth of One Million Dollars ($1,000,000.00) as determined on the basis of the seller's most recent audited financial statements prepared within thirteen (13) months of an offer or sale in accordance with generally accepted accounting principles and audited in accordance with generally accepted auditing standards. Net worth may be determined on a consolidated basis where the seller is at least eighty percent (80%) owned by one person and that person expressly guarantees the obligation of the seller with regard to the offer or sale of any business opportunity claimed to be excluded under this division; or

(4) Any offer or sale of a business opportunity by an executor, administrator, sheriff, marshal, receiver, trustee in bankruptcy, guardian or conservator or a judicial offer or sale of a business opportunity.

4. "Department" means the Oklahoma Department of Securities.

5. "Franchise" means a contract or agreement between a seller and a purchaser, express or implied, orally or in writing, where it is agreed that:

a. A franchisee is granted the right to engage in the business of offering, selling or distributing goods or services under a marketing plan prescribed in substantial part by a franchisor; and

b. The operation of the franchisee's business pursuant to such a plan is substantially associated with the franchisor’s business and trademark, service mark, trade name, logotype, advertising or other commercial symbol designating the franchisor or its affiliate.

For the purposes of this paragraph "franchisee" shall mean a person to whom a franchise is granted and "franchisor" shall mean a person who grants a franchise.

6. "Marketing plan" means advice or training, provided to the purchaser by the seller or a person recommended by the seller, pertaining to the sale of any products, equipment, supplies or services and the advice or training includes, but is not limited to, preparing or providing:

a. Promotional literature, brochures, pamphlets or advertising materials;

b. Training regarding the promotion, operation or management of the business opportunity; or

c. Operational, managerial, technical or financial guidelines or assistance.

7. "Offer" or "offer to sell" includes every attempt to dispose of a business opportunity for value or solicitation of an offer to purchase a business opportunity.

8. "On-going business" means an existing business that, for at least six (6) months prior to the offer, has been operated from a specific location, has been open for business to the general public and has substantially all of the equipment and supplies necessary for operating the business.

9. "Person" means an individual, corporation, trust, partnership, limited liability company, incorporated or unincorporated association or any other entity.

10. "Purchaser" means a person who enters into a contract or agreement for the acquisition of a business opportunity or a person to whom an offer to sell a business opportunity is directed.

11. "Sale" or "sell" includes every contract or agreement of sale, contract to sell, disposition of a business opportunity or interest in a business opportunity for value.

12. "Seller" means a person who sells or offers to sell a business opportunity or any agent or person who directly or indirectly acts on behalf of such person.

803. Exemptions

The following business opportunities are exempt from Sections 806 through 811 of this title:

1. Any offer or sale of a business opportunity for which the immediate cash payment made by the purchaser for any business opportunity is at least Twenty-five Thousand Dollars ($25,000.00) if the immediate cash payment does not exceed twenty percent (20%) of the purchaser's net worth as determined exclusive of principal residence, furnishings therein, and automobiles. The Administrator may by rule withdraw or further condition the availability of this exemption.

2. Any offer or sale of a business opportunity for which the purchaser is required to make a payment to the seller or a person recommended by the seller not to exceed Five Hundred Dollars ($500.00). For purposes of this paragraph, "payment" means the total amount the purchaser becomes obligated to pay to the seller or to any third party either prior to or at the time of delivery of the products, equipment, supplies or services or within one year of the commencement of operation of the business opportunity by the purchaser. If payment is over a period of time, "payment" shall include the sum of the down payment and the total periodic payments. If the purchaser may enter at different levels, "payment" means the total sum the purchaser is obligated to pay to enter at the level chosen by the purchaser.

3. Any offer or sale of a business opportunity where the seller has a net worth of not less than One Million Dollars ($1,000,000.00) as determined on the basis of the seller's most recent audited financial statements, prepared within thirteen (13) months of such offer or sale in accordance with generally accepted accounting principles and audited in accordance with generally accepted auditing standards. Net worth may be determined on a consolidated basis where the seller is at least eighty percent (80%) owned by one person and that person expressly guarantees the obligations of the seller with regard to the offer or sale of any business opportunity claimed to be exempt under this paragraph. The Administrator may by rule withdraw or further condition the availability of this exemption.

4. Any offer or sale of a business opportunity where the purchaser has a net worth of not less than Two Hundred Fifty Thousand Dollars ($250,000.00). Net worth shall be determined exclusive of principal residence, furnishings therein, and automobiles. The Administrator may by rule withdraw or further condition the availability of this exemption.

5. Any offer or sale of a business opportunity where the purchaser is a bank, savings and loan association, trust company, insurance company, credit union, investment company as defined by the Investment Company Act of 1940, pension or profit sharing trust or other financial institution or institutional buyer or a dealer registered pursuant to the Oklahoma Securities Act, where the purchaser is acting for itself or in a fiduciary capacity.

6. Any offer or sale of a franchise as defined in Section 802 of this title provided that the seller delivers to each purchaser fourteen (14) calendar days prior to the earlier of the execution by a purchaser of any contract or agreement imposing a binding legal obligation on the purchaser or the payment by a purchaser of any consideration in connection with the offer or sale of the business opportunity, one of the following disclosure documents:

a. A Uniform Franchise Offering Circular prepared in accordance with the guidelines adopted by the North American Securities Administrators Association, Inc., or

b. A disclosure document prepared pursuant to the Federal Trade Commission rule entitled Disclosure Requirements and Prohibitions Concerning Franchising, 16 C.F.R. Section 436.

For the purposes of this paragraph, a personal meeting shall mean a face-to-face meeting between the purchaser and the seller or their representatives, which is held for the purpose of discussing the offer or sale of a business opportunity. The Administrator may by rule adopt any amendment to the Uniform Franchise Offering Circular that has been adopted by the North American Securities Administrators Association, Inc. or any amendment to the disclosure document prepared pursuant to the Federal Trade Commission rule entitled Disclosure Requirements and Prohibitions Concerning Franchising, 16 C.F.R. Section 436, that has been adopted by the Federal Trade Commission.

7. Any offer or sale of a business opportunity for which the required cash payment made by a purchaser to participate in any business opportunity does not exceed Seven Hundred Fifty Dollars ($750.00) and the required payment is made for:

a. the not-for-profit sale of sales demonstration equipment, material or samples, and/or

b. product inventory sold to the purchaser at a bona fide wholesale price.

8. Any offer or sale of a business opportunity which the Administrator exempts by order or a class of business opportunities which the Administrator exempts by rule upon the finding that such exemption would not be contrary to public interest and that registration would not be necessary or appropriate for the protection of purchasers.

9. Any business which is operated under a lease or license on the premises of the lessor or licenser as long as such business is incidental to the business conducted by the lessor or the licenser on such premises, including, without limitation, leased departments, licensed departments and concessions.

804. Denial or revocation of exemption--Orders and violation thereof

A. The Administrator may issue a final order denying or revoking any exemption specified in Section 803 of this title, not including the exemption provided for in paragraphs 2 and 7 of Section 803 of the Oklahoma Business Opportunity Sales Act, with respect to a particular offering of one or more business opportunities if the Administrator finds that the order is in the public interest and that:

1. Any provision of the Oklahoma Business Opportunity Sales Act or any rule, order or condition lawfully imposed pursuant to the act has been willfully violated, in connection with the offer or sale of the business opportunity by the seller, any partner, officer or director of the seller, any persons occupying a similar status or performing similar functions, or any person directly or indirectly controlling or controlled by the seller;

2. The business opportunity is the subject of an administrative order denying, suspending, or revoking a registration or a permanent or temporary injunction of any court of competent jurisdiction; but the Administrator:

a. may not institute a proceeding pursuant to this paragraph more than one (1) year from the date of the order or injunction relied on, and

b. may not enter an order pursuant to this paragraph on the basis of an order or injunction entered under any other state act unless that order or injunction was based on facts, other than facts which establish jurisdiction, which would currently constitute a ground for an order under this section;

3. The seller's enterprise or method of business, or that of the business opportunity, includes or would include activities which are illegal where performed;

4. The business opportunity or the offering of a business opportunity has worked or tended to work a fraud upon purchasers or would so operate; or

5. The seller's literature or advertising is misleading, incorrect, incomplete or deceptive.

Except as provided in subsection B of this section or unless the right to notice and hearing is waived by the person against whom the final order is to be issued, no order may be issued under this section without notice and opportunity for hearing as required by the Administrative Procedures Act. If the person to whom such notice is addressed does not request a hearing within fifteen (15) days after the service of such notice is effective, a final order shall be issued.

B. If the Administrator makes written findings of fact to support the conclusion that the public interest will be harmed by delay in issuing an order pursuant to subsection A of this section, the Administrator may by order summarily deny or revoke any of the specified exemptions, not including the exemption provided for in paragraphs 2 and 7 of Section 803 of this title, pending final determination of any proceeding under this section. Upon the entry of the summary order, the Administrator shall promptly notify the respondent or respondents:

1. That the summary order has been entered and the reasons therefor;

2. That the person subject to the summary order, if desiring a hearing, must make written request for a hearing to the Administrator within fifteen (15) days after service of the notice is effective;

3. That within fifteen (15) days after receipt by the Administrator of a written request the matter will be set for hearing to determine whether the summary order should be modified, vacated or extended pending final determination of any proceeding under subsection A of this section; and

4. That a hearing shall be commenced within fifteen (15) days of the matter being set for hearing. The summary order shall remain in effect until the conclusion of the hearing on the summary order unless the Administrator or the Administrator's designee extends the summary order pending a final determination of any proceeding under subsection A of this section. If no hearing is requested and none is ordered by the Administrator, the summary order will remain in effect until it is modified or vacated by the Administrator or the Administrator's designee. If a request for hearing on the summary order is timely made and if the hearing is not commenced by the Administrator within the time limit set forth herein, the summary order shall dissolve and an order shall not be issued pursuant to subsection A of this section except upon reasonable notice and opportunity for a hearing.

C. No order under this section may operate retroactively.

D. No person may be considered to have violated Section 806 of this title by reason of any offer or sale effected after the entry of an order under Section 804 of this title if he or she sustains the burden of proof that he or she did not know, and in the exercise of reasonable care could not have known, of the order.

805. Burden of proving exemption

In any administrative, civil or criminal proceeding related to the Oklahoma Business Opportunity Sales Act, the burden of proving an exemption, an exception from a definition or an exclusion is upon the person claiming it.

806. Certain sales unlawful

It is unlawful for any person to offer or sell any business opportunity, as defined in Section 802 of this title, in this state unless the business opportunity is registered under the provisions of the Oklahoma Business Opportunity Sales Act or is exempt under Section 803 of this title.

807. Registration procedure

A. In order to register a business opportunity, the seller shall file with the Administrator one of the following disclosure documents with the appropriate cover sheet as required by Section 808 of this title, a consent to service of process as specified in subsection B of this section, the appropriate fee set forth in Section 829 of this title, and any other information determined by the Administrator to be necessary:

1. A Uniform Franchise Offering Circular prepared in accordance with the guidelines adopted by the North American Securities Administrators Association, Inc. The Administrator may by rule adopt any amendment to the Uniform Franchise Offering Circular that has been adopted by the North American Securities Administrators Association, Inc.;

2. A disclosure document prepared pursuant to the Federal Trade Commission rule entitled Disclosure Requirements and Prohibitions Concerning Franchising and Business Opportunity Ventures; 16 C.F.R. Section 436. The Administrator may by rule adopt any amendment to the disclosure document prepared pursuant to 16 C.F.R. Section 436 that has been adopted by the Federal Trade Commission; or

3. A disclosure document prepared pursuant to Section 808 of this title.

B. Every seller shall file the consent to service of process required by Section 818 of this title.

C. A registration automatically becomes effective upon the expiration of fifteen (15) full business days after a complete filing, provided that no order has been issued or that no proceeding is pending pursuant to Section 810 of this title. The Administrator may by order waive or reduce the time period prior to effectiveness, provided that a complete filing has been made. The Administrator may by order defer the effective date until the expiration of fifteen (15) full business days after the filing of any amendment. For purposes of this subsection, a filing shall be deemed complete upon receipt by the Administrator of the items described in subsections A and B of this section.

D. The registration is effective for one (1) year commencing on the day of effectiveness and may be renewed annually upon the filing of a current disclosure document accompanied by any documents or information that the Administrator may by rule or order require. A renewal fee as set forth in Section 829 of this title shall accompany each request for renewal. Failure to renew upon the close of the one-year period of effectiveness will result in expiration of the registration. The Administrator may by rule or order require the filing of a sales report and payment of a report filing fee as set forth in Section 829 of this title.

E. The Administrator may by rule or order require the filing of all proposed literature or advertising prior to its use and payment of the review fee as set forth in Section 829 of this title for each sales literature or advertising package.

808. Disclosure document

A. It shall be unlawful for any person to offer or sell any business opportunity required to be registered pursuant to the Oklahoma Business Opportunity Sales Act unless a written disclosure document as filed pursuant to Section 807 of this title is delivered to each purchaser at least ten (10) business days prior to the execution by a purchaser of any contract or agreement imposing a binding legal obligation on the purchaser or the payment by a purchaser of any consideration in connection with the offer or sale of the business opportunity.

B. The disclosure document shall have a cover sheet which is entitled, in at least ten-point bold type, "DISCLOSURE REQUIRED BY THE STATE OF OKLAHOMA". Under the title shall appear the statement in at least ten-point type that "THE REGISTRATION OF THIS BUSINESS OPPORTUNITY DOES NOT CONSTITUTE APPROVAL, RECOMMENDATION OR ENDORSEMENT BY THE STATE OF OKLAHOMA. THE INFORMATION CONTAINED IN THIS DISCLOSURE DOCUMENT HAS NOT BEEN VERIFIED BY THIS STATE. IF YOU HAVE ANY QUESTIONS OR CONCERNS ABOUT THIS INVESTMENT, SEEK PROFESSIONAL ADVICE BEFORE YOU SIGN A CONTRACT OR MAKE ANY PAYMENT. YOU ARE TO BE PROVIDED TEN (10) BUSINESS DAYS TO REVIEW THIS DOCUMENT BEFORE SIGNING ANY CONTRACT OR AGREEMENT OR MAKING ANY PAYMENT TO THE SELLER OR THE SELLER'S REPRESENTATIVE". The seller's name and principal business address, along with the date of the disclosure document shall be provided on the cover sheet. No other information shall appear on the cover sheet. The disclosure document shall contain the following information unless the seller uses a disclosure document as provided in Section 807 of this title:

1. The names and residential addresses of those salespersons who will engage in the offer or sale of the business opportunity in this state;

2. The name of the seller; whether the seller is doing business as an individual, partnership, corporation, limited liability company, or any other form of business entity; the names under which the seller has done, is doing or intends to do business; and the name of any parent or affiliated company that will engage in business transactions with purchasers or which will take responsibility for statements made by the seller;

3. The names, addresses and titles of the seller's officers, directors, trustees, general managers, principal executives, agents and any other persons charged with responsibility for the seller's business activities relating to the sale of the business opportunity;

4. Prior business experience of the seller relating to business opportunities including:

a. the name, address and a description of any business opportunity previously offered by the seller,

b. the length of time the seller has offered each such business opportunity, and

c. the length of time the seller has conducted the business opportunity currently being offered to the purchaser;

5. With respect to persons identified in paragraph 3 of subsection B of this section:

a. a description of the persons' business experience for the ten-year period preceding filing date of the disclosure document. The description of business experience shall list principal occupations and employers, and

b. a listing of the persons' educational and professional backgrounds, including the names of schools attended and degrees received, and any other information that will demonstrate sufficient knowledge and experience to perform the services proposed;

6. Whether the seller or any person identified in paragraph 3 of subsection B of this section:

a. has been convicted of any felony, has pleaded nolo contendere to a felony charge or has been the subject of any criminal, civil or administrative proceedings alleging: The violation of any business opportunity law, securities law, commodities law, franchise law, fraud or deceit, embezzlement, fraudulent conversion, restraint of trade, unfair or deceptive practices, misappropriation of property or comparable allegations; or

b. has filed in bankruptcy, been adjudged bankrupt, been reorganized due to insolvency, or was an owner, principal officer or general partner of any other person that has so filed or was so adjudged or reorganized during or within seven (7) years of the date of the disclosure document;

7. The name(s) of the person(s) identified in paragraph 6 of subsection B of this section, nature of and parties to the action or proceeding, court or other forum, date of the institution of the action, docket reference to the action, current status of the action or proceeding, terms and conditions or any order or decree, the penalties or damages assessed and terms of settlement;

8. The initial payment required, or when the exact amount cannot be determined, a detailed estimate of the amount of the initial payment to be made to the seller;

9. A detailed description of the actual services the seller agrees to perform for the purchaser;

10. A detailed description of any training the seller agrees to provide for the purchaser;

11. A detailed description of services the seller agrees to perform in connection with the placement of equipment, products or supplies at a location, as well as any agreement necessary in order to locate or operate equipment, products or supplies on a premises neither owned nor leased by the purchaser or seller;

12. A detailed description of any license(s) or permit(s) that will be necessary in order for the purchaser to engage in or operate the business opportunity;

13. Any representations made by the seller to the purchaser concerning sales or earnings that may be made from the business opportunity, including, but not limited to:

a. the bases or assumptions for any actual, average, projected or forecasted sales, profits, income or earnings,

b. the total number of purchasers who, within a period of three (3) years of the date of the disclosure document, purchased a business opportunity involving the product, equipment, supplies or services being offered to the purchaser, and

c. the total number of purchasers who, within three (3) years of the date of the disclosure document, purchased a business opportunity involving the product, equipment, supplies or services being offered to the purchaser who, to the seller's knowledge, have actually received earnings in the amount or range specified;

14. A detailed description of the elements of a guarantee made by a seller to a purchaser. Such description shall include, but shall not be limited to, the duration, terms, scope, conditions and limitations of the guarantee;

15. A statement describing any contractual restrictions, prohibitions or limitations on the purchaser's conduct. The seller shall attach a copy of all business opportunity and other contracts or agreements proposed for use or in use in this state including, without limitation, all lease agreements, option agreements and purchase agreements;

16. The rights and obligations of the seller and the purchaser regarding termination of the business opportunity contract or agreement;

17. A statement accurately describing the grounds upon which the purchaser may initiate legal action to terminate the business opportunity contract or agreement;

18. A copy of the most recent audited financial statements of the seller. If the seller's audited financial statements are dated more than four (4) months prior to the filing of the disclosure document, the seller shall submit unaudited financial statements for the interim period;

19. A list of the states in which the business opportunity is registered;

20. A list of the states in which the disclosure document is on file;

21. A list of the states which have denied, suspended or revoked the registration of the business opportunity;

22. A section entitled "Risk Factors" containing a series of short concise statements summarizing the principal factors which make the business opportunity a high risk or one of a speculative nature. Each statement shall include a cross-reference to the page on which further information regarding that risk factor can be found in the disclosure document; and

23. Any additional information as the Administrator may require by rule or order.

809. Contracts or agreements required--Contents

A. It is unlawful for any person to offer or sell any business opportunity, as defined in Section 2 of the Oklahoma Business Opportunity Sales Act, unless the business opportunity contract or agreement is in writing and a copy of the contract or agreement is given to the purchaser at the time the purchaser signs the contract or agreement.

B. Contracts or agreements shall set forth in at least ten-point type the following:

1. The terms and conditions of any and all payments due to the seller;

2. The seller's principal business address and the name and address of the seller's agent in this state authorized to receive service of process;

3. The business form of the seller, whether corporate, partnership or otherwise;

4. The delivery date or, when the contract provides for a periodic delivery of items to the purchaser, the approximate delivery date of the product, equipment or supplies the seller is to deliver to the purchaser to enable the purchaser to start his or her business; and

5. Whether the product, equipment or supplies are to be delivered to the purchaser's home or business address or are to be placed or caused to be placed by the seller at locations owned or managed by persons other than the purchaser.

810. Suspension or revocation of registration--Grounds--Procedure

A. The Administrator may issue a final order denying effectiveness to, or suspending or revoking effectiveness of, any registration if the Administrator finds that the order is in the public interest and that:

1. The registration as of its effective date or as of any earlier date in the case of any order denying effectiveness, or any amendment as of its effective date, or any report is incomplete in any material respect or contains any statement which was, in the light of the circumstances under which it was made, false or misleading with respect to any material fact;

2. Any provision of the Oklahoma Business Opportunity Sales Act or any rule, order or condition lawfully imposed pursuant to the act has been willfully violated, in connection with the business opportunity:

a. by the person filing the registration, or

b. by the seller, any partner, officer or director of the seller, any persons occupying a similar status or performing similar functions, or any person directly or indirectly controlling or controlled by the seller, but only if the person filing the registration is directly or indirectly controlled by or acting for the seller;

3. The business opportunity registered or sought to be registered is the subject of an administrative order denying, suspending or revoking a registration or a permanent or temporary injunction of any court of competent jurisdiction; but the Administrator:

a. may not institute a proceeding against an effective registration pursuant to this paragraph more than one (1) year from the date of the order or injunction relied on, and

b. may not enter an order pursuant to this paragraph on the basis of an order or injunction entered under any other state act unless that order or injunction was based on facts, other than facts which establish jurisdiction, which would currently constitute a ground for an order under this section;

4. The seller's enterprise or method of business, or that of the business opportunity, includes or would include activities which are illegal where performed;

5. The business opportunity or the offering of a business opportunity has worked or tended to work a fraud upon purchasers or would so operate;

6. There has been a failure to file any documents or information required by Section 807 of this title;

7. The seller has failed to pay the proper filing fee but the Administrator may enter only a denial order under this paragraph and the Administrator shall vacate any such order when the deficiency has been corrected; or

8. The seller's literature or advertising is misleading, incorrect, incomplete or deceptive.

Except as provided in subsection C of this section or unless the right to notice and hearing is waived by the person against whom the order is to be issued, no order may be issued under this section without notice and opportunity for hearing as required by the Administrative Procedures Act. If the person to whom such notice is addressed does not request a hearing within fifteen (15) days after the service of the notice is effective, an order as provided in this subsection shall be issued.

B. The Administrator may not institute a proceeding under this section against an effective registration on the basis of a fact or transaction known to the Administrator when the registration became effective unless the proceeding is instituted within thirty (30) days from the date the registration became effective.

C. 1. If the Administrator makes written findings of fact to support the conclusion that the public interest will be harmed by delay in issuing an order pursuant to subsection A of this section, the Administrator may by order summarily postpone or suspend the effectiveness of the registration pending final determination of any proceeding under this section.

Upon the entry of the summary order, the Administrator shall promptly notify the respondent or respondents:

(a) that the summary order has been entered and the reasons therefor,

(b) that the person subject to the summary order, if desiring a hearing, must make written request for a hearing to the Administrator within fifteen (15) days after service of the notice is effective,

(c) that within fifteen (15) days after receipt by the Administrator of a written request the matter will be set for hearing to determine whether the summary order should be modified, vacated or extended pending final determination of any proceeding under subsection A of this section, and

(d) that a hearing shall be commenced within fifteen (15) days of the matter being set for hearing.

2. The summary order shall remain in effect until the conclusion of the hearing on the summary order unless the Administrator or his or her designee extends the summary order pending final determination of any proceeding under subsection A of this section. If no hearing is requested and none is ordered by the Administrator, the summary order will remain in effect until it is modified or vacated by the Administrator or his or her designee. If a request for hearing on the summary order is timely made and if said hearing is not commenced by the Administrator within the time limit set forth herein, the summary order shall dissolve and a final order shall not be issued pursuant to subsection A of this section, except upon reasonable notice and opportunity for a hearing.

D. The Administrator may vacate or modify an order issued under this section if the Administrator finds that the conditions which prompted its entry have changed or that it is otherwise in the public interest to do so.

811. Minimum net worth requirement

In connection with the offer or sale of a business opportunity, no seller may make or use any of the representations set forth in divisions (4) and (5) of subparagraph 3 of Section 2 of the Oklahoma Business Opportunity Sales Act unless the seller has at all times a minimum net worth of Fifty Thousand Dollars ($50,000.00) as determined in accordance with generally accepted accounting principles.

812. Administration of act--Use or disclosure of information

A. The Oklahoma Business Opportunity Sales Act shall be administered by the Administrator.

B. It is unlawful for the Administrator or any of his or her officers or employees to use for personal benefit any information which is filed with or obtained by the Administrator and which is not made public. No provision of the Oklahoma Business Opportunity Sales Act authorizes the Administrator or any of the Administrator's officers or employees to disclose any such information except among themselves or when necessary or appropriate in a proceeding or investigation under the act or in cooperation with other law enforcement agencies. No provision of the Oklahoma Business Opportunity Sales Act either creates or derogates from any privilege which exists at common law or otherwise when documentary or other evidence is sought under a subpoena directed to the Administrator or any of the Administrator's officers or employees.

813. Investigations and proceedings--Powers and duties of Administrator

A. The Administrator:

1. May make such public or private investigations within or outside of this state as the Administrator deems necessary to determine whether any person has violated or is about to violate any provision of the Oklahoma Business Opportunity Sales Act or any rule or order hereunder, or to aid in the enforcement of the act or in the prescribing of rules and forms hereunder;

2. May require or permit any person to file a statement, under oath or otherwise as the Administrator determines, as to all the facts and circumstances concerning the matter to be investigated; and

3. May publish information concerning any violation of the Oklahoma Business Opportunity Sales Act or any rule or order hereunder.

B. For the purpose of any investigation or proceeding pursuant to the Oklahoma Business Opportunity Sales Act, the Administrator or the Administrator's designee may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence and require the production of any books, paper, correspondence, memoranda, agreements or other documents or records which the Administrator deems relevant or material to the inquiry.

C. In case of contumacy by, or refusal to obey a subpoena issued to any person, the district court of Oklahoma County or the district court in any other county where service can be obtained on one or more of the defendants, upon application by the Administrator, may issue to the person an order requiring him or her to appear before the Administrator, there to produce documentary evidence if so ordered or to give evidence touching upon the matters under investigation or in question. Failure to obey the order of the court may be punishable by the court as contempt.

D. No person is excused from attending and testifying or from producing any document or record before the Administrator or the Administrator's designee, or in obedience to the subpoena of the Administrator or the Administrator's designee, in any proceeding instituted by the Administrator, on the grounds that the testimony or evidence, documentary or otherwise, required by the Administrator may tend to incriminate him or her or subject him or her to a penalty or forfeiture; but no individual may be prosecuted or subjected to any penalty or forfeiture on account of any transaction, matter or thing concerning which he or she is compelled, after claiming his or her privilege against self-incrimination, to testify or produce evidence, documentary or otherwise, except that the individual testifying is not exempt from prosecution and punishment for perjury or contempt committed in testifying.

814. Violation of act--Cease and desist order--Injunction

A. Whenever it appears to the Administrator that any person has engaged in or is about to engage in any act or practice constituting a violation of any provision of the Oklahoma Business Opportunity Sales Act or any rule or order hereunder, the Administrator may:

1. Issue an order directing each person to cease and desist from continuing the act or practice and/or issue an order imposing a civil penalty up to a maximum of Five Thousand Dollars ($5,000.00) for a single violation or transaction or of Fifty Thousand Dollars ($50,000.00) for multiple violations or transactions in a single proceeding or a series of related proceedings; or

2. Prior to, concurrently with, or subsequent to an administrative proceeding pursuant to paragraph 1 of this subsection, bring an action in the district court of Oklahoma County or the district court in any other county where service can be obtained on one or more of the defendants to enjoin the acts or practices and to enforce compliance with the Oklahoma Business Opportunity Sales Act or any rule or order hereunder. Upon a proper showing, a permanent or temporary injunction, restraining order or writ of mandamus shall be granted and a receiver or conservator may be appointed for the defendant or the defendant's assets or the court may order rescission, which shall include restitution plus the legal interest rate, for any sales of business opportunities determined to be unlawful pursuant to the Oklahoma Business Opportunity Sales Act or any rule or order hereunder. The court shall not require the Administrator to post a bond. No costs shall be assessed for or against the Administrator in a proceeding under the Oklahoma Business Opportunity Sales Act brought by or against the Administrator in any court except as otherwise provided by law.

B. Except as provided in subsection D of this section or unless the right to notice and hearing is waived by the person against whom the sanction is imposed, the sanctions provided in paragraph 1 of subsection A of this section may be imposed only after notice and opportunity for hearing as required by the Administrative Procedures Act. If the person to whom notice is addressed does not request a hearing within fifteen (15) days after the service of the notice, a final order as provided for in subsection A of this section may be issued.

C. For purposes of determining any sanction to be imposed under subsection A of this section, the Administrator shall consider, among other factors, the frequency and persistence of the conduct constituting a violation of the Oklahoma Business Opportunity Sales Act or a rule or order of the Administrator under the Oklahoma Business Opportunity Sales Act, the number of persons adversely affected by the conduct, and the resources of the person committing the violation.

D. 1. If the Administrator makes written findings of fact to support the conclusion that the public interest will be harmed by delay in issuing a cease and desist order pursuant to paragraph 1 of subsection A of this section, the Administrator may issue a summary order pending the hearing required by subsection B of this section.

Upon the entry of the summary order, the Administrator shall promptly notify the person subject to the summary order:

a. that the summary order has been entered and the reasons therefor,

b. that the person subject to the summary order, if desiring a hearing, must make written request for a hearing to the Administrator within fifteen (15) days after service of the notice is effective,

c. that within fifteen (15) days after receipt by the Administrator of a written request the matter will be set for hearing to determine whether the summary order should be modified, vacated or extended pending final determination of any proceeding under paragraph 1 of subsection A of this section, and

d. that a hearing shall be commenced within fifteen (15) days of the matter being set for hearing.

2. The summary order shall remain in effect until the conclusion of the hearing on the summary order unless the Administrator or the Administrator's designee extends the summary order pending a final determination of any proceeding under paragraph 1 of subsection A of this section. If no hearing is requested and none is ordered by the Administrator, the summary order will remain in effect until it is modified or vacated by the Administrator or the Administrator's designee. If a request for hearing on the summary order is timely made and if the hearing is not commenced by the Administrator within the time limit set forth above, the summary order shall dissolve and a cease and desist order shall not be issued pursuant to paragraph 1 of subsection A of this section except upon reasonable notice and opportunity for a hearing as provided in subsection B of this section.

E. When the Administrator has authority to institute an action or proceeding pursuant to this section, the Administrator may accept an assurance of discontinuance of an act or practice that is alleged to be unlawful under Section 819 of this title from the person who is alleged to have engaged or be about to engage in the act or practice. The assurance shall not constitute an admission of guilt. The assurance may include a stipulation for any or all of the following:

1. The voluntary payment by the person for the costs of investigation;

2. An amount to be held in escrow pending the outcome of an action; or

3. An amount for restitution to an aggrieved person.

An assurance of discontinuance shall be in writing and filed with the Administrator. Unless rescinded by the parties or voided by a court for good cause, the assurance may be enforced in the district court of Oklahoma County by the parties to the assurance. The assurance may be modified by the parties or by a court for good cause.

815. Review of orders

A. Any person aggrieved by a final order of the Administrator may obtain a review by the Oklahoma Securities Commission by filing with the Oklahoma Securities Commission at the offices of the Department of Securities, within fifteen (15) days after the entry of the order, a written petition praying that the order be modified or set aside in whole or in part and stating his ground therefor. The petition, the record upon which the final order was issued, and written briefs submitted by the appealing parties and the Administrator shall be reviewed by the Oklahoma Securities Commission. The cost of preparing the record of the administrative hearing shall be borne by the appealing parties. Oral argument by all parties shall be heard by the Oklahoma Securities Commission en banc unless waived by the party. Other than newly discovered evidence, additional evidence may only be presented by the appealing party and/or the Administrator on the request of the Oklahoma Securities Commission. Upon the written request of the party on whose behalf the appeal is brought, or upon his own motion, the Administrator shall cause complete stenographic notes to be taken of the proceeding before the Oklahoma Securities Commission. If requested by the appealing party, the cost of taking and transcribing such notes shall be borne by the said appealing party. If such notes are taken upon the motion of the Administrator, the cost shall be borne by the Department. The Oklahoma Securities Commission or a majority thereof shall make such order as is deemed proper, just and equitable within sixty (60) days of receipt by the Oklahoma Securities Commission of the written petition of the appealing party or at such later time as agreed to in writing by all parties.

B. Any person aggrieved by a final order of the Oklahoma Securities Commission may obtain a review of the order by the Supreme Court of Oklahoma. The proceedings for review shall be as now prescribed by law and by rules of the reviewing court, subject to the power of the other court to make other and further rules with reference thereto.

C. The commencement of proceedings under this section before the Oklahoma Securities Commission shall not operate as a stay of the Administrator's order, unless so ordered by the Oklahoma Securities Commission. The commencement of proceedings under this section before the Supreme Court shall not operate as a stay of the Oklahoma Securities Commission's order, unless so ordered by the Court.

816. Rules, forms and orders--Making, amending and rescinding

A. The Administrator may make, amend, and rescind rules, forms and orders as are necessary to carry out the provisions of the Oklahoma Business Opportunity Sales Act including rules and forms governing disclosure documents, application and reports, and defining any terms, whether or not used in the Oklahoma Business Opportunity Sales Act insofar as the definitions are not inconsistent with the provisions of the act. For the purpose of rules and forms, the Administrator may classify business opportunities, persons and matters within his or her jurisdiction, and prescribe different requirements for different classes.

B. No rule, form or order may be made, amended or rescinded unless the Administrator finds that the action is necessary or appropriate in the public interest or for the protection of the purchaser. In prescribing rules and forms the Administrator may cooperate with the administrators of other jurisdictions with a view to effectuating the policy of the Oklahoma Business Opportunity Sales Act to achieve maximum uniformity in the form and content of disclosure statements, applications, and reports whenever practicable.

C. No provision of the Oklahoma Business Opportunity Sales Act imposing any liability applies to any act done or omitted in good faith in conformity with any rule, form or order of the Administrator, notwithstanding that the rule, form or order may later be amended or rescinded or be determined by judicial or other authority to be invalid for any reason.

817. Filing of document--Register--Public inspection--Interpretive opinions

A. A document is filed when it is received by the Administrator.

B. The Administrator shall keep a register of all applications for registration pursuant to the Oklahoma Business Opportunity Sales Act and all orders which have been entered under the act. The register and all such orders may be maintained in computer form or any other form of data storage and shall be open for public inspection.

C. The information contained in or filed with or subsequent to any application for registration filed pursuant to this title, or any report filed with the Administrator may be made available to the public under such rules as the Administrator may prescribe. Litigation files and investigatory files and reports shall be kept confidential. If an investigatory file is created as a result of a complaint, grievance or inquiry, the complaint, grievance or inquiry shall be a part of such investigatory file and the existence of the complaint, grievance or inquiry and the matters and documents contained therein shall not be disclosed except pursuant to this title. A settlement agreement may, upon determination of the Administrator, remain part of the investigatory file and may be used against the person or entity involved only if the person or entity involved violates the terms of the settlement agreement. The Administrator may disclose any information obtained in connection with an investigation pursuant to this title for the purpose of a civil or administrative action brought by the Administrator, or a criminal referral. The Administrator may disclose such information to a law enforcement agency or another governmental or regulatory entity so long as the receiving entity represents in writing that under applicable law protections exist to preserve the integrity, confidentiality and security of the information.

D. The Administrator in his or her discretion may honor written requests from interested persons for interpretive opinions or may issue determinations that the Administrator will not institute enforcement proceedings against certain specified persons for engaging in certain specified activities where the determination is consistent with the purposes fairly intended by the policy and provisions of this act upon the payment of a fee as set forth in Section 829 of this title.

818. Application of act--Offer to sell, communication thereof and acceptance--Service of process and agent therefor

A. The provisions of the Oklahoma Business Opportunity Sales Act concerning sales and offers to sell apply to persons who sell or offer to sell when:

1. An offer to sell is made in this state;

2. An offer to purchase is made and accepted in this state; or

3. The purchaser is domiciled in this state and the business opportunity is or will be operated in this state.

B. For the purpose of this section, an offer to sell is made in this state, whether or not either party is then present in this state, when:

1. The offer originates from this state; or

2. The offer is directed by the offeror to this state and received at the place to which it is directed or at any post office in this state in the case of a mailed offer.

C. For the purpose of this section, an offer to sell is accepted in this state when acceptance:

1. Is communicated to the offeror in this state; and

2. Has not previously been communicated to the offeror, orally or in writing, outside this state; an acceptance is communicated to the offeror in this state, whether or not either party is then present in this state when the offeree directs it to the offeror in this state reasonably believing the offeror to be in this state and it is received at the place to which it is directed or at any post office in this state in the case of a mailed acceptance.

D. An offer to sell is not made in this state when:

1. The publisher circulates or there is circulated on his or her behalf in this state any bona fide newspaper or other publication of general, regular and paid circulation which is not published in this state, or which is published in this state but has had more than two-thirds (2/3) of its circulation outside this state during the past twelve (12) months; or

2. A radio or television program originating outside this state is received in this state.

E. Every seller shall file with the Administrator, in such form as the Administrator may prescribe, an irrevocable consent appointing the Administrator or the Administrator's successor in office to be the seller's agent to receive service of any lawful process in any noncriminal suit, action, or proceeding against the seller or the seller's successor, executor, or administrator that arises under the Oklahoma Business Opportunity Sales Act or any rule or order hereunder after the consent has been filed, with the same force and validity as if served personally on the person filing the consent. Service on the Administrator may be made by leaving a copy of the process in the office of the Administrator, but is not effective unless:

1. The plaintiff, who may be the Administrator, in a suit, action, or proceeding instituted by the plaintiff, promptly sends notice of the service and a copy of the process by certified mail, return receipt requested and delivery restricted to the addressee, to the defendant or respondent at the defendant's or respondent's last address on file with the Administrator; and

2. The plaintiff's affidavit of compliance with this subsection is filed in the suit, action or proceeding on or before the return date of the process, if any, or within such further time as the court, or the Administrator in a proceeding before the Administrator, allows.

F. When any person, including any nonresident of this state, engages in conduct prohibited or made actionable by the Oklahoma Business Opportunity Sales Act or any rule or order hereunder, and the person has not filed a consent to service of process under subsection E of this section, that conduct shall be considered equivalent to the person's appointment of the Administrator or the Administrator's successor in office to be the person's agent to receive service of any lawful process in any noncriminal suit, action or proceeding against the person or the person's successor, executor or administrator which grows out of that conduct and that is brought pursuant to the Oklahoma Business Opportunity Sales Act or any rule or order hereunder with the same force and validity as if served on the person personally. Service on the Administrator may be made by leaving a copy of the process in the office of the Administrator, and it is not effective unless:

1. The plaintiff, who may be the Administrator in a suit, action or proceeding instituted by the Administrator, promptly sends notice of the service and a copy of the process by certified mail, return receipt requested and delivery restricted to the addressee, to the defendant or respondent at the defendant's or respondent's last-known address or takes other steps that are reasonably calculated to give actual notice; and

2. The plaintiff's affidavit of compliance with this subsection is filed in the suit, action, or proceeding on or before the return day of the process, if any, or within such further time as the court, or the Administrator in a proceeding before the Administrator, allows.

G. Service by mail shall be effective or the date of receipt by the defendant or respondent or, if refused, on the date of refusal by the defendant or respondent. Acceptance or refusal of service by mail by a person who is fifteen (15) years of age or older shall constitute acceptance or refusal by the party addressed. Acceptance or refusal by any officer or by any employee of the registered office or principal place of business who is authorized to or who regularly receives certified mail shall constitute acceptance or refusal by the party addressed. A return receipt signed at such registered office or principal place of business shall be presumed to have been signed by an employee authorized to receive certified mail.

H. Refusal by any person to accept delivery of the certified mail provided for in this section, or the refusal to sign the return receipt, or the lack of knowledge of the Administrator of any address to which process may have been mailed, shall not in any manner affect the legality of the service, and the person shall be presumed to have had knowledge of the contents of the process.

I. Service as provided for in subsection E or F of this section may be used in a suit, action, or proceeding before the Administrator, or by the Administrator where the Administrator is the moving party. When process is served under this section, the court, or the Administrator in a proceeding before the Administrator, shall order such continuance as may be necessary to afford the defendant or respondent reasonable opportunity to defend.

819. Fraud or deceit unlawful

It is unlawful for any person, in connection with the offer or sale of any business opportunity in this state, directly or indirectly:

1. To employ any device, scheme or artifice to defraud;

2. To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading; or

3. To engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon any person.

820. False or misleading statements unlawful

It is unlawful for any person to make or cause to be made, in any document filed with the Administrator or in any proceeding pursuant to the Oklahoma Business Opportunity Sales Act any statement which is, at the time and in the light of the circumstances under which it is made, false or misleading in any material respect or, in connection with such statement, to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading.

821. Conclusiveness of filed document

Neither the fact that an application for registration has been filed nor the fact that a business opportunity is effectively registered constitutes a finding by the Administrator that any document filed pursuant to the Oklahoma Business Opportunity Sales Act is true, complete and not misleading. Neither any such fact nor the fact that an exemption or exception is available for a business opportunity means that the Administrator has passed in any way upon the merits or qualifications of, or recommended or given approval to, any person or business opportunity. It is unlawful to make, or cause to be made, to any purchaser or prospective purchaser any representation inconsistent with the provisions of this section.

822. Misleading advertising unlawful

It is unlawful for any person, in connection with the offer or sale of any business opportunity in this state, to publish, circulate or use any advertising which contains an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading.

823. Violations--Penalties--Criminal prosecutions

A. Any person who willfully violates Section 6, subsection A of Section 8, subsection A of Section 9, Sections 11, 19, 21 or 22 of the Oklahoma Business Opportunity Sales Act or who willfully violates any rule under the act or who willfully violates any order of which the person has notice, or who violates Section 20 of the Oklahoma Business Opportunity Sales Act knowing that the statement made was false or misleading in any material respect, shall be guilty of a felony and may upon conviction be fined not more than Ten Thousand Dollars ($10,000.00) or imprisoned not more than ten (10) years or both for each offense. Each of the acts specified shall constitute a separate offense and a prosecution or conviction for any one of such offenses shall not bar prosecution or conviction for any other offense.

B. The Administrator may refer such evidence as may be available concerning violations of the Oklahoma Business Opportunity Sales Act or any rule or order hereunder to the Attorney General of the State of Oklahoma or the district attorney for the county where a violation occurred, who may, with or without such a reference, institute the appropriate criminal proceedings under the act. The Attorney General or district attorney may designate and appoint one or more lawyers of the Department as special assistants available for the purpose of assisting in or conducting all criminal prosecutions arising by reason of proceedings under this section.

C. Nothing in the Oklahoma Business Opportunity Sales Act limits the power of the state to punish any person for any conduct which constitutes a crime under any other statute.

824. Violations--Civil actions

A. Any person who violates Section 6, subsection A of Section 8, subsection A of Section 9 or Section 11 of the Oklahoma Business Opportunity Sales Act, is liable to the purchaser who may sue either at law or in equity for rescission, for recovery of all money and other valuable consideration paid for the business opportunity and for actual damages, together with interest at the legal rate from the date of sale, reasonable attorney's fees and court costs.

B. Any person who violates Sections 19, 21 or 22 of the Oklahoma Business Opportunity Sales Act is liable to the purchaser who may sue either at law or in equity for rescission, for recovery of all money or other valuable consideration paid for the business opportunity and for actual damages, together with interest at the legal rate from the date of sale, reasonable attorney's fees and court costs.

825. Aiding and abetting violation

Any person who controls or materially aids a person liable under Sections 22 or 23 of this act shall be liable jointly and severally with and to the same extent as the person committing the violation.

826. Limitation of actions--Remedies not exclusive--Waiver of compliance, duty or liability void

A. No action shall be maintained under subsection A of Section 24 of this act unless commenced before the expiration of three (3) years after the act or transaction constituting the sale. No action shall be maintained under subsection B of Section 24 of this act unless commenced before the expiration of two (2) years after the untruth or omission was, or in the exercise of reasonable care should have been, discovered, or such longer term of limitation as may be otherwise provided by law.

B. The rights and remedies under the Oklahoma Business Opportunity Sales Act are in addition to any other rights or remedies that may exist at law or in equity.

C. Any condition, stipulation or provision binding any purchaser of a business opportunity to waive compliance with or relieving a person from any duty or liability imposed by or any right provided by the Oklahoma Business Opportunity Sales Act or any rule or order issued pursuant to the act is void.

827. Construction of act

The Oklahoma Business Opportunity Sales Act shall be so construed as to effectuate its general purpose to make uniform the law of those states which enact it.

828. All of the administrative procedures applicable to investigations and proceedings conducted pursuant to the Oklahoma Securities Act which are not in conflict with the provisions of this act shall apply to any offer and/or sale of a business opportunity in this state.

829. A. Unless otherwise provided for by law, the following shall be the fees charged pursuant to the provisions of the Oklahoma Business Opportunity Sales Act. Once paid, the fees shall be nonrefundable.

1. Registration filing fee $250.00

2. Registration renewal fee $150.00

3. Review of sales literature or advertising package $ 50.00

4. Sales report filing fee $ 50.00

5. Interpretive opinion or no-action request $250.00

6. Request for order of exemption $250.00

B. All fees and other charges collected by the Administrator shall be deposited in the General Revenue Fund, except for the fees deposited in the Oklahoma Department of Securities Revolving Fund. The fees deposited in the Oklahoma Department of Securities Revolving Fund shall be the fees set forth in paragraphs 3, 5, and 6 of subsection A of this section.