Sec. 117-3-2 - Definitions

§ 117-3-2. Definitions

2.1. "Act" means the West Virginia Venture Capital Act, W. Va. Code §§ 5E-2-1 et seq.

2.2. "Authority" means the West Virginia Economic Development Authority, provided for in W. Va. Code §§ 31-15-1 et seq.

2.3. "Authorized Tax Credits" means the tax credits provided for in W. Va. Code § 5E-2-4.

2.4. "Debt" means a loan to be repaid pursuant to a loan instrument, and includes debt convertible into equity.

2.5. "Director" means the Executive Director of the West Virginia Economic Development Authority, or his or her designated representative.

2.6. "Entity" means a corporation, Partnership, limited liability company, trust or other business organization.

2.7. "Equity" means common stock or preferred stock in a corporation including warrants and options which upon exercise entitle the purchaser to common or preferred stock. Equity also means an ownership interest in other Entities.

2.8. "Federal Program Participant" means

(a) An SBIC;

(b) a New Markets Venture Capital Company; or

(c) an Entity which is not an SBIC or a New Markets Venture Capital Company but which is designated by the Authority as a Federal Program Participant due to the Entity's participation in a venture capital program administered by the United States Small Business Administration or other federal agency.

2.9. "Fiscal Year" means July 1 through June 30, which is the fiscal year of the State.

2.10. "Fund" means one (1) or more Entities authorized by the Authority pursuant to the Act for the investment of capital in the West Virginia economy. A Federal Program Participant, as defined in Subsection 2.8 of this Rule, may serve as a Fund, Fund Manager or in a dual capacity. A Federal Program Participant that serves as a Fund, Fund Manager, or in a dual capacity, is subject to all the requirements set forth in this Rule applicable to Funds and Fund Managers.

2.11. "Fund Manager" means an individual, Federal Program Participant or Entity selected pursuant to Section 4 of this Rule to manage the assets of a Fund or a Fund Share.

2.12. "Fund Share" means a segregated portion of the assets of a Fund.

2.13. "Governance Agreement" means the agreement entered into by a Governing Entity and the investors for the management of the affairs of a Fund.

2.14. "Governing Entity" means the Entity or Entities which have the authority to control the business and affairs of a Fund.

2.15. "Investor" means an individual or Entity which has invested in a Fund or a Fund Share.

2.16. "Managing Body" means the board of directors in the case of a corporation, voting partners in the case of a general partnership, general partners in the case of a limited partnership, members or managers in the case of a limited liability company and the management committee or similar decision making body in the case of a joint venture.

2.17. "New Markets Venture Capital Company" means an Entity which has been designated by the United States Small Business Administration as a New Markets Venture Capital Company pursuant to 13 C.F.R. § 108 et seq.

2.18. "Partnership" includes a syndicate, group, pool, joint venture, or other unincorporated organization, through or by means of which any business, financing operation, or venture is carried on; and the term partner includes a member of the syndicate, group, pool, joint venture or organization. The term "Partnership" includes a general or limited partnership.

2.19. "Participation Agreement" means a written agreement executed by a Fund Manager and the applicable Fund or Governing Entity, as the case may require, setting forth the terms and conditions of the Fund Manager's service to the Fund or Fund Share. In instances where the Fund or Fund Share purchases an ownership interest in its Fund Manager, "participation agreement" may, as applicable, include the limited partnership agreement, limited liability company operating agreement or other applicable written agreement entered into by the Fund and other owners of the Fund Manager.

2.20. "Pass-Through Entity" means any person, other than an individual, which is not classified for federal income tax purposes as an association taxed as a corporation.

2.21. "Person" includes an individual or Entity.

2.22. "SBIC" or "Small Business Investment Company" means only an Entity which is licensed by the United States Small Business Administration as a Small Business Investment Company under the Small Business Investment Act of 1958, 15 U.S.C. §§ 661 et seq., as amended.

2.23. "S Corporation" or "Subchapter S Corporation" means a small business corporation as defined in Section 1361(b) of the Internal Revenue Code of 1954, 26 U.S.C. §§ 1 et seq., as amended, for which an election under Section 1362(a) of the Code is in effect.

2.24. "State" means the State of West Virginia.

2.25. "West Virginia Business" means an Entity which, at all times in which monies from the Fund are invested in the Entity unless otherwise agreed to by the Governing Entity, is located in or is principally based in West Virginia, with more than fifty percent (50%) of its assets and operations located in West Virginia, and with more than fifty percent (50%) of its employees being West Virginia residents. For purposes of this definition, more than fifty percent (50%) of the "operations" of a business means more than fifty percent (50%) of the gross revenues of a business.

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