Okla. Stat. tit. 74, § 74-5060.21

Investment committee.

A. There is hereby created in the State Treasury a revolving

fund for the Oklahoma Center for the Advancement of Science and

Technology to be designated the "Seed-Capital Revolving Fund". The

fund shall be a continuing fund, not subject to fiscal year

limitations. The fund shall consist of all monies authorized by law

for deposit in the fund including but not limited to gifts, grants,

private donations and funds by government entities authorized to

provide funding for the purposes authorized for use of the fund and

with payments on loans made from the fund, rents, dividends paid on

shares of stock purchased with monies from the fund, royalty

proceeds, or any other form of return on authorized investments made

by the Center. All monies accruing to the credit of said fund are

hereby appropriated and may be budgeted and expended by the Oklahoma

Center for the Advancement of Science and Technology for use as

seed-capital for enterprises and for the purposes set forth in this

section, and shall not be used for administrative, management, or

operating expenses of the Center. Expenditures from said fund shall

be made upon warrants issued by the State Treasurer against claims

filed as prescribed by law with the Director of the Office of

Management and Enterprise Services for approval and payment.

B. The Seed-Capital Revolving Fund shall be managed consistent

with the long-term goal that revenues earned from investment of the

fund be used to cover administrative costs of the fund. The Center

may contract with the Commercialization Center or another entity to

manage the Seed-Capital Revolving Fund and to carry out the

activities set forth in this section.

Oklahoma Statutes - Title 74. State Government Page 1089

C. The Center may use the Seed-Capital Revolving Fund to

provide seed-capital to enterprises and to carry out the purposes of

the Oklahoma Science and Technology Research and Development Act

through authorized investments, including:

1. Loans, loans convertible to equity, and equity;

2. Leaseholds;

3. Management or consultant service agreements;

4. Loans with stock subscription or similar warrants that are

beneficially owned by the Center;

5. Loans with stock subscription or similar warrants that are

beneficially owned by a party other than the Center;

6. Any other contractual arrangement in which the Center is

providing scientific and technological services to any federal,

state, county or municipal agency, or to any individual,

corporation, enterprise, association or any other entity involving

science and technology. The Center, in connection with the

provision of any form of financial assistance, may enter into

royalty agreements with an enterprise;

7. Participation as a general or limited partner in other seed-

capital funds or participation as a limited partner in individual

cases as authorized by the board of directors;

8. Royalty or other interests in patents, licenses, trade

secrets or other technology; and

9. All other seed-capital investments and qualified securities

as defined in the Oklahoma Science and Technology Research and

Development Act.

D. The Center may use the Seed-Capital Revolving Fund to

purchase qualified securities issued by enterprises engaged in new

product or process innovations subject to the conditions set forth

in this section.

E. The Center may use the Seed-Capital Revolving Fund to make

loans for business incubator facilities in exchange for interests in

the enterprises.

F. The Center shall make authorized seed-capital investments in

enterprises engaged in new product or process innovations only

after:

1. Receipt of an application from the enterprise which

contains:

a. a business plan including a description of the

enterprise and its management, product and market,

b. a statement of the amount, timing and projected use of

the capital required,

c. a statement of the potential economic impact of the
pital investments in

enterprises engaged in new product or process innovations only

after:

1. Receipt of an application from the enterprise which

contains:

a. a business plan including a description of the

enterprise and its management, product and market,

b. a statement of the amount, timing and projected use of

the capital required,

c. a statement of the potential economic impact of the

enterprise, including the number, location and types

of jobs expected to be created, and

d. such other information as the Center board of

directors shall request; and

Oklahoma Statutes - Title 74. State Government Page 1090

2. Approval of the investment by the Center. Such approval may

be made after the board of directors finds, based upon the

application submitted by the enterprise and such additional

investigation as the staff of the Center shall make and incorporate

in its minutes, or based on the recommendation of the fund manager,

if the Center contracts with the Commercialization Center or another

entity to manage the Seed-Capital Revolving Fund, that:

a. the proceeds of the investment or financial assistance

will be used only to cover the seed-capital needs of

the enterprise except as authorized by this section,

b. the enterprise has a reasonable chance of success,

c. the Center's participation is instrumental to the

success of the enterprise and will assist in its

retention within the state,

d. the Center's investment is leveraged by at least one

additional equity or near-equity investor,

e. the enterprise has the reasonable potential to enhance

employment opportunities within the state,

f. the entrepreneur and other founders of the enterprise

have already made or are contractually committed to

make an appropriate financial and time commitment to

the enterprise,

g. any securities to be purchased are qualified

securities,

h. there is a reasonable possibility that the Center will

recoup at least its initial investment or financial

commitment, and

i. binding commitments have been made to the Center by

the enterprise for adequate reporting of financial

data to the Center, which shall include a requirement

for an annual report, or if required by the board, an

annual audit of the financial and operational records

of the enterprise, and for such control on the part of

the Center as the board of directors shall consider

prudent over the management of the enterprise, so as

to protect the investment or financial commitment of

the Center, including in the discretion of the board

and without limitation, right of access to financial

and other records of the enterprise, and membership or

representation on the board of directors of the

enterprise.

G. The board of directors shall create an investment committee

to assist in evaluating potential investments in qualified

securities and provision of other forms of authorized financial

assistance. The membership of this investment committee shall serve

at the pleasure of the board and shall consist of:

Oklahoma Statutes - Title 74. State Government Page 1091

1. No more than two members of the board of directors, neither

of whom serves on any advisory committee to the Center; and

2. Persons drawn from sources other than the Center who meet

standards similar to those applying to the board of directors and

who are recognized by their peers for outstanding knowledge and

leadership in their fields, all of whom shall serve at the pleasure

of the board.

H. The Center shall not make investments in qualified

securities issued by enterprises in excess of the amount necessary

to own more than forty-nine percent (49%) of qualified securities in

any one enterprise at the time such securities are purchased by the

Center, after giving effect to the conversion of all outstanding

convertible qualified securities of the enterprise; however, in the

event of severe financial difficulty of the enterprise, threatening,
issued by enterprises in excess of the amount necessary

to own more than forty-nine percent (49%) of qualified securities in

any one enterprise at the time such securities are purchased by the

Center, after giving effect to the conversion of all outstanding

convertible qualified securities of the enterprise; however, in the

event of severe financial difficulty of the enterprise, threatening,

in the judgment of the board of directors, the investment of the

Center therein, a greater percentage of such securities may be owned

by the Center.