Okla. Stat. tit. 68, § 68-2357.61

As used in the Small Business Capital Formation Incentive Act:

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1. "Acquisition" means the use of capital by an Oklahoma small

business venture within six (6) months after obtaining the capital

to purchase fifty-one percent (51%) or more of the voting interest

entitled to elect the governing board, or its equivalent, of any

other legal entity, regardless of the legal form of the entity. As

used in the Small Business Capital Formation Incentive Act,

"acquisition" does not mean the right to participate in the proceeds

from sale of goods or services, whether denominated a royalty,

royalty interest or otherwise, and does not mean the right to

intellectual property, whether the rights arise from copyright,

trademark or patent law;

2. "Capitalization" means the amount of:

a. any funds that have actually been contributed to the

qualified small business capital company,

b. any contractual commitment to provide funds to the

qualified small business capital company to the extent

that such commitment is payable on demand and has

substantial economic penalties for breach of the

commitment to provide such funds, and

c. any allocation of tax credit authority awarded to the

qualified small business capital company by the

Community Development Financial Institutions Fund

pursuant to Section 45D of the Internal Revenue Code

of 1986, as amended, to the extent such allocation has

not been previously designated by the qualified small

business capital company as contemplated by Section

45D(b)(1)(C) of the Internal Revenue Code of 1986, as

amended;

3. "Equity and near-equity security" means common stock,

preferred stock, warrants or other rights to subscribe to stock or

its equivalent, or an interest in a limited liability company,

partnership, or subordinated debt that is convertible into, or

entitles the holder to receive upon its exercise, common stock,

preferred stock, a royalty or net profits interest, or an interest

in a limited liability company or partnership;

4. "Financial lending institution" means a bank, credit union,

savings and loan, commercial finance company or other entity

principally engaged in the extension of credit;

5. "Oklahoma small business venture" means a business,

incorporated or unincorporated, which:

a. has or will have, within one hundred eighty (180) days

after a qualified investment is made by a qualified

small business capital company, at least fifty percent

(50%) of its employees or assets located in Oklahoma,

b. needs financial assistance in order to commence or

expand such business which provides or intends to

provide goods or services,

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c. is engaged in a lawful business activity under any

Industry Number appearing under any Major Group Number

of Divisions A, C, D, E, F or I of the Standard

Industrial Classification Manual, 1987 revision with

the following exceptions:

(1) Major Group 1 of Division A, and
ess which provides or intends to

provide goods or services,

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c. is engaged in a lawful business activity under any

Industry Number appearing under any Major Group Number

of Divisions A, C, D, E, F or I of the Standard

Industrial Classification Manual, 1987 revision with

the following exceptions:

(1) Major Group 1 of Division A, and

(2) Major Group 2 of Division A,

d. qualifies as a small business as defined by the

federal Small Business Administration, and

e. expends within eighteen (18) months after the date of

the qualified investment at least fifty percent (50%)

of the proceeds of the qualified investment for the

acquisition of tangible or intangible assets which are

used in the active conduct of the trade or business or

to provide working capital for the active conduct of

the trade or business for which the determination of

the small business qualification pursuant to

subparagraph d of this paragraph was made. For

purposes of this subparagraph, “working capital” shall

not include consulting, brokerage or transaction fees.

Provided, that the Oklahoma Tax Commission, upon

request and demonstration of need by a qualified small

business capital company or an Oklahoma small business

venture, or an investor or an authorized agent of any

such entities, may extend the 18-month period

otherwise required by this subparagraph for a period

not to exceed six (6) months. Provided, the

expenditure of the invested funds by the Oklahoma

small business venture shall otherwise comply with the

requirements applicable to the usage of tax credits

for qualified investment in the Oklahoma small

business venture. As used in this subparagraph,

“tangible assets” shall include the acquisition of

real property and the construction of improvements

upon real property if such acquisition and

construction otherwise comply with the requirements

applicable to the usage of tax credits for qualified

investment in the Oklahoma small business venture, and

“intangible assets” shall be limited to computer

software, licenses, patents, copyrights and similar

items;

6. "Qualified investment" means an investment of funds in the

form of "equity" and "near-equity" as defined in paragraph 3 of this

section or "subordinated debt" as defined in paragraph 8 of this

section; provided, an investment which is contingent upon the

occurrence of an event or which is subject to being refunded or

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returned in the absence of such event shall only be deemed to have

been made upon the occurrence of the event;

7. "Qualified small business capital company" means a C

corporation or a subchapter S corporation, as defined by the

Internal Revenue Code of 1986, as amended, incorporated pursuant to

the laws of Oklahoma, limited liability company or a registered

business partnership with a certificate of partnership filed as

required by law, which meets the following criteria:

a. the corporation, limited liability company or

partnership is organized to provide the direct

investment of equity and near-equity funds to

companies within this state,

b. the principal place of business of the corporation,

limited liability company or partnership is located

within this state,

c. the capitalization of the corporation, limited

liability company or partnership is not less than One

Million Dollars ($1,000,000.00), and

d. the corporation, limited liability company or

partnership has investment of not more than twenty

percent (20%) of its capitalization in any one company

at any time during the calendar year of the

corporation, limited liability company or partnership;

and

8. "Subordinated debt" means indebtedness with a maturity date

of not less than five (5) years that is subordinated to all other

indebtedness of the issuer that has been issued or is to be issued
has investment of not more than twenty

percent (20%) of its capitalization in any one company

at any time during the calendar year of the

corporation, limited liability company or partnership;

and

8. "Subordinated debt" means indebtedness with a maturity date

of not less than five (5) years that is subordinated to all other

indebtedness of the issuer that has been issued or is to be issued

to a financial lending institution. The indebtedness shall not have

a repayment schedule that is faster than a level principal

amortization over five (5) years.