1388                             Laws of Maryland                      [Ch. 661

Annotated Code of Maryland (1969 Replacement Volume), title
"Sales and Notices," to follow immediately after Section 165 thereof
and to be under the new subtitle "Multi-level Distribution Com-
panies," and to read as follows:

Multi-level Distribution Companies
166.

(a) Definition:

Multi-level distribution companies—For purposes of this section a
multi-level distribution company is defined as any person, firm or
corporation which distributes, for a valuable consideration, goods
or services through independent agents, contractors or distributors,
at different levels, any level of which enjoys a different rate of
pricing or discounting from any other level.

(B) PROHIBITIONS AND REQUIREMENTS:

(b) (1) No multi-level distribution company shall require partici-
pants in its marketing program to purchase the product or service or
pay any other consideration in order to participate in the marketing
program unless it agrees to repurchase that portion which is in a
resaleable condition which its participant was unable to sell within
three (3) months of his receipt of the merchandise FIRST OR-
DERED. The repurchase shall be at a price of not less than 90% of
the original purchase price paid by the participant.

(c) (2) Multi-level distribution companies must provide in writing
in all contracts of participation that the contract may be cancelled
for any reason by participants by notification to the company in
writing within three (3) months from the date of receipt of mer-
chandise first ordered and that all merchandise then in the posses-
sion of participants shall be repurchased as provided in any other
subsection (B) (1) of this section.

(d) (3) Income representation or projection restricted—Multi-level
distribution companies shall not represent directly or by implication
that participants in a multi-level marketing program may or will
earn any stated gross or net amount, or represent in any manner,
the past earnings of participants unless in fact the past earnings
or predicted gross or net amount represented are those of a sub-
stantial number of participants in the community or geographical
area in which the representations are made and accurately reflect
the average earnings of those participants under circumstances
similar to those of the participant or prospective participant to
whom the representation is made.

(e) (C) Enforcement

The Attorney General or the State's Attorney for any county or
Baltimore City may petition an appropriate court of general juris-
diction to enjoin in whole or in part the activities of any multi-level
distribution company whose activities violate the provisions of this
section, provided, however, that the Attorney General or State's
Attorney shall not seek injunctive relief without first giving the
company ten days' notice of any claimed violation. The notice is to
be directed to the company's principal place of business and shall
be sent either certified or registered United States Mail.