THE NEWFOUNDLAND AND LABRADOR GAZETTE EXTRAORDINARY

Part II PUBLISHED BY AUTHORITY ST. JOHN'S, FRIDAY, JANUARY 28, 2005 NEWFOUNDLAND AND LABRADOR REGULATION 5/05

Extraordinary Gazette 3 January 28, 2005 NEWFOUNDLAND AND LABRADOR REGULATION 5/05 Labour-Sponsored Venture Capital Tax Credit Regulations (Amendment) under the Labour-Sponsored Venture Capital Tax Credit Act (O.C. 2005-012) (Filed January 28, 2005) Under the authority of

section 18 of the Labour-Sponsored Ven- ture Capital Tax Credit Act, the Lieutenant-Governor in Council makes the following regulations. Dated at St. John’s, January 27, 2005. Tim Murphy Deputy Clerk of the Executive Council REGULATIONS Analysis 1. S.2 Amdt.

Interpretation 2. S.4 R&S Criteria for registration 1. Subsection 2(1) of the Labour-Sponsored Venture Capital Tax Credit Regulations is amended by adding immediately after para- graph (

c) the following: (c.1) "non-convertible", with respect to eligible shares, means shares that are not convertible or exchangeable other than as prescribed under subparagraph 3(1)(a)(iv) of the regulations; NLR 153/04

Labour-Sponsored Venture Capital Tax Credit Regulations (Amendment) 5/05 Extraordinary Gazette 4 January 28, 2005 (c.2) "non-redeemable " with respect to eligible shares means shares that are (

i) not redeemable until the time set out in subsection 9(2) of the Act has expired, except as permitted under the Act and regulations made under the Act, or (ii) redeemable at any time provided that amounts payable under subsection 9(2) of the Act shall be deducted from the redemption proceeds and remitted by the labour- sponsored venture capital corporation or the fund man- ager to the minister on behalf of the redeeming share- holder;

Section 4 of the regulations is repealed and the following substituted: 4. For the purpose of

section 4 of the Act, the criteria that shall be met for a corporation to be a registered labour-sponsored venture capi- tal corporation are that the corporation (

a) maintain a permanent establishment in the province; (

b) establish a separate investment committee in the province, with a majority of its members being residents of the prov- ince provided that the investment committee is delegated the full authority and control to approve and reject investments in the province; (

c) has or will have, immediately after registration and after- wards, capital of at least $250,000; (

d) has authorized capital that includes Class A shares having rights, privileges, restrictions and conditions attached to them that provide that the Class A shares are either (

i) not redeemable until the time set out under subsection 9(2) of the Act has expired, except that the holder of the shares or that holder’s personal representative may re- quire the corporation to redeem those shares on the holder’s death or under circumstances that are pre- scribed under these regulations, or Criteria for registra- tion

Labour-Sponsored Venture Capital Tax Credit Regulations (Amendment) 5/05 Extraordinary Gazette 5 January 28, 2005 (ii) redeemable at any time provided that amounts payable under subsection 9(2) of the Act shall be deducted from the redemption proceeds and remitted by the labour- sponsored venture capital corporation or the fund man- ager to the minister on behalf of the redeeming share- holder; (

e) has a constitution that provides for (

i) assisting businesses in creating and maintaining em- ployment by making specified investments in eligible business entities, (ii) exercising ownership rights with respect to investments made by the corporation in eligible business entities, and (iii) providing the administra tive support necessary to carry on the business of the corporation, including preparation of annual reports and the holding of meetings of share- holders and the board of directors; (

f) issues shares in compliance with the Securities Act; (

g) or its manager employ, or will employ within 6 months of registration, one full time equivalent investment manager who is resident in the province and, unless otherwise agreed by the minister, the corporation or its manager commits to additional investment managers in proportion to the amount of capital raised and under management in the province; and (

h) is in compliance with the Securities Act. ©Earl G. Tucker, Queen's Printer

ST. JOHN'S, FRIDAY, JANUARY 28, 2005 6 Index Title of Act and Subordinate Legislation CNLR or NL Gazette made thereunder NL Reg. Amendment Date & Page No. Labour-Sponsored Venture Capital Tax Credit Act Labour-Sponsored Venture NLR 5/05 NLR 153/04 Extra. Jan 28/05 p. 3 Capital Tax Credit Regulations S.2 Amdt. S.4 R&S