CAPCO_2010

Eleventh Annual Report

(Pursuant to Section 11(j) of the New York Tax Law)

TO

GOVERNOR DAVID A. PATERSON

AND THE NEW YORK STATE LEGISLATURE

ON THE

NEW YORK STATE CERTIFIED CAPITAL COMPANY PROGRAM

June 1, 2010

New York State Insurance Department James J. Wrynn Superintendent of Insurance

TABLE OF CONTENTS Page Executive Summary 1

Introduction 4

1. Certified Capital Companies 6

2. Tax Credits Allocated and Certified Capital Invested by Insurers 7

3. CAPCO Qualified Investments 10

a. Allocations and Invested Amounts 11

b. Size of Qualified Businesses 19

c. Locations of Qualified Businesses 22

d. Industry Sectors of Qualified Businesses 26

e. Employment Growth or Reduction in Qualified Businesses 28

4. CAPCO Compliance with NYTL Section 11(c)(1) and (h)(3), (4), & (5) 31 5. Comments on the CAPCO Program 44

Appendices

A. Insurer Tax Credit Allocations A1 - CAPCO Program One A2 - CAPCO Program Two A3 - CAPCO Program Three A4 - CAPCO Program Four A5 - CAPCO Program Five B. Amounts Invested in Qualified Businesses

B1 - CAPCO Program One B2 - CAPCO Program Two B3 - CAPCO Program Three B4 - CAPCO Program Four B5 - CAPCO Program Five

C. CAPCO Programs One, Two, Three, Four and Five Combined Characteristics of Qualified Businesses D. Sections 11 and 1511(k) of the New York Tax Law, as revised by the

Laws of 2005

1

Executive Summary

New York’s Certified Capital Law was signed into law on August 7, 1997 to spur the growth of businesses and employment in New York State. Program One created $100 million of tax credit incentives for insurance companies that invest in certified capital companies (CAPCOs). The law was amended in 1999, 2000, 2004 and 2005, adding four additional programs. Programs Two, Three, Four, and Five created $30 million, $150 million, $60 million and $60 million, respectively, in tax credit incentives.

The Insurance Department certified five active CAPCOs in each of the first three programs, six active CAPCOs in Program Four and seven CAPCOs in Program Five. In Program One, three of the five received certified capital of approximately $30 million each and two received approximately $4 million each. In Program Two, three received approximately $7 million each, one received approximately $6 million, and one received approximately $4 million. In Program Three, each of the five CAPCOS received different amounts ranging from approximately $12 million to $53 million. In Program Four, four of the CAPCOs received approximately $11 to $14 million and two received approximately $5 million each. In Program Five, three CAPCOs received approximately $11 million each, two received approximately $5 million each, and the last two received approximately $9 and $6 million.

Thirty insurers participated as certified investors in Program One with investments ranging

from $420,000 to $6.75 million. Twenty-eight insurers participated in Program Two, with investments ranging from $453,000 to $1.8 million. Forty-four insurers participated in Program Three, with investments ranging from $252,000 to over $5 million. Forty-two insurers participated in Program Four, with investments ranging from $90,000 to $1.8 million. Fifty-one insurers participated as certified investors in Program Five, with investments ranging from $153,154 to $1.5 million.

Since the program’s inception in 1998, 86.52% of the $100 million allocated by New York’s

CAPCO Program One has been invested in qualified businesses. Each Program One CAPCO was required to invest 50% of its certified capital in qualified businesses within four years of the program's inception, half of which had to be in “early stage” businesses. All Program One CAPCOs have met these milestones.

Since the program’s inception in April 2000, 83.45% of the $30 million allocated by New

York’s CAPCO Program Two has been invested in qualified businesses. Each Program Two CAPCO was required to invest 50% of its certified capital in qualified businesses within four years of the program's inception, half of which had to be in “early stage” businesses. All Program Two CAPCOs have met these milestones.

Since the program’s inception in December 2000, 82.84% of the $150 million allocated by

New York’s CAPCO Program Three has been invested in qualified businesses. Each Program Three CAPCO was required to invest 50% of its certified capital in qualified businesses within four years of the program's inception, half of which, minus Empire Zone investments, had to be invested in “early stage” businesses. All Program Three CAPCOs have met these milestones.

2

Since the program’s inception in December 2004, 70.34% of the $60 million allocated by New York’s CAPCO Program Four has been invested in qualified businesses. As in the prior programs, each Program Four CAPCO was required to invest 50% of its certified capital in qualified businesses within four years of the program's inception, twenty-five percent of which, minus Empire Zone investments, had to be invested in “early stage” businesses and an additional twenty-five percent of which, minus Empire Zone investments, had to be invested in “start-up” businesses. All Program Four CAPCOs have met this milestone.

Since the program’s inception in November 2005, 60.50% of the $60 million allocated by

New York’s CAPCO Program Five has been invested in qualified businesses. As in the prior programs, each Program Five CAPCO was required to invest 50% of its certified capital in qualified businesses within four years of the program's inception, twenty-five percent of which, minus Empire Zone investments, had to be invested in “early stage” businesses and an additional twenty-five percent of which, minus Empire Zone investments, had to be invested in “start-up” businesses. All Program Five CAPCOs have met this milestone.

Two Program One CAPCOs, three Program Two CAPCOs, and one Program Three CAPCO

have each invested an amount cumulatively equal to one hundred percent of their respective certified capital in qualified businesses. Three of the six CAPCOs, having met all other requirements under Section 11(e) of the New York Tax Law, are no longer regulated by the Insurance Department.

It should be noted that the remaining three Program One and two Program Two CAPCOs

have met the 50% milestone, and there are no further statutory requirements to invest the remaining certified capital of approximately $18.4 million. Nevertheless, each remaining Program One and Two CAPCO continues to be subject to regulation by the Insurance Department, pursuant to Section 11(e)(5) of the New York Tax Law, until it has invested 100% of its certified capital in qualified businesses.

The remaining four Program Three CAPCOs have met the 50% milestone and have the

additional statutory requirement to invest at least one-third of their certified capital in Empire Zones and one-third in “Underserved Areas” outside of all Empire Zones. As of December 31, 2009, all Program Three CAPCOs are investing in accordance with the statute and are in position to achieve the target percentages at such time as they have invested 100% of the certified capital and are no longer regulated by the Insurance Department.

Since the time of the initial investments for all of the programs, the overall change in the

number of employees in New York in the qualified businesses has increased by 524. The change in the number of employees in any one business ranged from a decrease of 103 to an increase of 210. Fifty-four businesses showed decreases in the number of New York employees, 13 experienced no change, and of the 49 that experienced increases, only 9 entities showed employee growth of more than 50 employees. No current employee information was included for 55 of the businesses, because the CAPCOs’ relationship as an investor has ended and they no longer have contact with the entities.

3

Program One, Two, Three, Four and Five investments were in 179 qualified businesses. The industries were predominately manufacturing, marketing/sales, computers, and media/entertainment. The investments in qualified businesses ranged from $25,000 to $6.2 million. Total investments in qualified businesses were approximately $314.3 million as of December 31, 2009.

In the five programs combined, approximately 82.7% of the number of qualified businesses

and 82.9% of the dollars invested in qualified businesses were headquartered in New York City, Long Island, Mid-Hudson and Western New York. The remaining 17.3% of the businesses and 17.1% of the dollars invested were in other regions of New York State.

Ninety-three of the 179 qualified businesses that received CAPCO funds had less than $1

million in assets at the time of the initial investment. Approximately 31.1% of the invested funds have been invested in these entities.

CAPCOs have invested 31.6% of the invested funds in early stage businesses, 14.1% in

emerging technology and 3.2% in start-up businesses. CAPCOs also have invested 25.7% of the invested funds in Empire Zones, and 22.3% in “Underserved Areas” defined as areas outside of New York County.

4

Introduction Program One Governor George E. Pataki signed New York’s first venture capital investment bill (Chapter 389

of the Laws of 1997) on August 7, 1997. The bill created a tax credit incentive mechanism to

increase the investment of financial resources of insurers into New York State’s venture capital

markets. The Legislature made a finding that, in order to promote the growth of the State

economy, a need existed to further encourage the investment of private financial resources into

the State’s venture capital markets, emphasizing viable smaller business enterprises which

traditionally have had difficulty in attracting institutional venture capital. In addition, this

Legislation implements the legislative goal of promoting the formation and expansion of new

and existing businesses thereby creating jobs and resulting in growth in the State’s economy.

Sections 142 through 145 of that bill amended the New York Tax Law (“NYTL”) by adding new

sections 11 and 1511(k) providing for:

the establishment of certified capital companies (“CAPCOs”);

the creation of $100 million in tax credit incentives ($50 million each for calendar years

1999 and 2000) to insurance companies that invest in the CAPCOs; and

the New York State Insurance Department’s oversight over the program.

Sections 11 and 1511(k) of the New York Tax Law (“CAPCO statute”) were subsequently

amended by Chapter 544 of the Laws of 1998 to limit the recapture of tax credits by insurers

investing in any CAPCO whose certification is revoked.

Program Two

Part S of Chapter 407 of the Laws of 1999 extended New York’s original CAPCO program

(subsequently to be known as CAPCO Program One) by establishing a Program Two that

provides for $30 million in tax credits starting in calendar year 2001 to insurers that invest in

Program Two CAPCOs.

5

Program Three

Part FF of Chapter 63 of the Laws of 2000 established New York’s CAPCO Program Three.

CAPCO Program Three provides for $150 million in tax credits starting in calendar year 2002 to

insurers that invest in Program Three CAPCOs. It requires qualified investments in early stage

businesses, Empire Zones, and Underserved Areas of New York.

Program Four

Part D of Chapter 59 of the Laws of 2004 established New York’s CAPCO Program Four. This

Program provides for $60 million in tax credits to be used starting in calendar year 2006 to

insurers that invest in Program Four CAPCOs. The CAPCOs are required to invest in Empire

Zones and Underserved Areas of New York, as well as early stage, start-up and Emerging

Technology businesses.

Program Five

Part A of Chapter 63 of the Laws of 2005 established New York’s CAPCO Program Five. This

Program provides for $60 million in tax credits starting in calendar year 2007 to insurers that

invest in Program Five CAPCOs. The CAPCOS are required to invest in Empire Zones and

Underserved Areas of New York, as well as early stage, start up and Emerging Technology

businesses.

A copy of the CAPCO statute, as amended by Chapter 63 of the Laws of 2005, is contained in

Appendix D.

6

1. Certified Capital Companies Section 11(b) of the New York Tax Law sets forth the standards for CAPCO certification.

CAPCOs can be partnerships, corporations, trusts or limited liability companies whose primary

business activity is the investment of cash in qualified businesses. Organized on a “for-profit”

basis, CAPCOs must be located, headquartered and licensed (or registered) to conduct business

in New York State. A CAPCO must have an initial capitalization of at least $500,000. Two

principals (or any manager) must have at least five years experience in the venture capital field.

The Insurance Department certified six CAPCOs under CAPCO Program One. Three CAPCOs

were recertified and two were certified under Program Two. four CAPCOs were recertified and

two were certified under Program Three. One CAPCO was recertified and six were certified

under Program Four. Two CAPCOs were recertified and five were certified for program Five.

Three Program One CAPCOs, two Program Two CAPCOs, four Program Three CAPCOs, six

Program Four CAPCOs, and seven Program Five CAPCOs were active as of December 31, 2009.

Table 1 New York CAPCOs

as of 12/31/09

CAPCO Headquarters Program Advantage Capital New York Partners I, LP (Advantage) New York City 1, 2**, 3** Advantage Capital New York Partners II, LP (Advantage II) New York City 4, 5 Aegis NY Venture Fund, LP (Aegis) Latham 5 BOCNY, LLC (BOCNY) New York City 1** CF Capital Group,Inc. Garden City 4* Enhanced New York Issuer, LLC (Enhanced) New York City 3 Enhanced Capital New York Fund II, LLC (Enhanced II) New York City 4 Enhanced Capital New York Fund III, LLC (Enhanced III) New York City 5 Exponential of New York, LLC (Exponential) South Salem 1, 2, 3* New York Small Business Venture Fund, LLC (NYSBVF) New York City 1, 2**, 3 New York Small Business Venture Fund II, LLC (NYSBVF II) New York City 4 New York Small Business Venture Fund III, LLC (NYSBVF III) New York City 5 Stonehenge Capital Fund New York, LLC (Stonehenge) New York City 2**, 3, 4, 5 Whitecap New York Growth Fund, LLC, (Whitecap) New York City 4 Whitecap New York Growth Fund II, LLC, (Whitecap II) New York City 5 Wilshire Advisers, LLC (Wilshire) South Salem 1**

Wilshire New York Advisers II, LLC (Wilshire II) South Salem 2 Wilshire New York Partners III, LLC (Wilshire III) South Salem 3 Wilshire New York Partners IV, LLC (Wilshire IV) South Salem 4 Wilshire New York Partners V, LLC (Wilshire V) South Salem 5

* Inactive – did not receive certified capital from insurer investors for the program indicated. ** Inactive – 100% of certified capital has been invested as reported by the CAPCO.

7

In January 2002, Newtek Capital, Inc., (the parent company of Program One CAPCO Wilshire

Advisers, LLC, Program Two CAPCO Wilshire New York Advisers II, LLC, and Program Three

CAPCO Wilshire New York Partners III, LLC) acquired Exponential of New York, LLC, a Program

One, Program Two, and Program Three CAPCO.

2. Tax Credits Allocated and Certified Capital Invested by Insurers Chapter 389 of the Laws of 1997 provided insurers a dollar-for-dollar New York State premium

tax credit of up to $50 million for each of tax years 1999 and 2000 for the certified capital

investments made in Program One CAPCOs. Spread out over a 10-year period, the credits

could be applied beginning with the 1999 tax year. Pursuant to Sections 11 and 1511(k) of the

New York Tax Law, the tax credits allocated to insurers are subject to an aggregate limit of $10

million for each of the two allocations. For tax year 1999, a total of three CAPCOs and 24

insurers participated in the $50 million allocation. A total of five CAPCOs and 26 insurers

participated in the tax year 2000 allocation. Details of Program One tax credits granted and

certified capital invested by insurers are contained in Appendix A1.

Part S of Chapter 407 of the Laws of 1999 provided insurers a dollar-for-dollar New York State

premium tax credit of up to $30 million for tax year 2001 for the certified capital investments

made in Program Two CAPCOs. Spread out over a 10-year period, the credits could be applied

beginning with the 2001 tax year. Pursuant to Sections 11 and 1511(k) of the New York Tax

Law, the tax credits allocated to insurers are subject to an aggregate limit of $8 million. A total

of five CAPCOs and 28 insurers participated in the tax year 2001 allocation. Details of Program

Two tax credits granted and certified capital invested by insurers are contained in Appendix A2.

Chapter 63 of the Laws of 2000 provided insurers a dollar-for-dollar New York State premium

tax credit of up to $150 million for tax year 2002 for the certified capital investments made in

Program Three CAPCOs. Spread out over a 10-year period, the credits could be applied

beginning with the 2002 tax year. Pursuant to Sections 11 and 1511(k) of the New York Tax

Law, the tax credits allocated to insurers are subject to an aggregate limit of $10 million. A

total of five CAPCOs and 44 insurers participated in the tax year 2002 allocation. Details of

8

Program Three tax credits granted and certified capital invested by insurers are contained in

Appendix A3.


tax credit of up to $60 million starting in tax year 2006 for the certified capital investments

made in Program Four CAPCOs. Spread out over a 10-year period, the tax credits could be

applied beginning with the 2006 tax year. Pursuant to Sections 11 and 1511(k) of the New

York Tax Law, the tax credits allocated to insurers are subject to an aggregate limit of $8

million. A total of six CAPCOs and 42 insurers participated in the allocation for the tax year

2006. Details of Program Four tax credits granted and certified capital invested by insurers are

contained in Appendix A4.


tax credit of up to $60 million starting in tax year 2007 for the certified capital investments

made in Program Five CAPCOs. Spread out over a 10-year period, the tax credits could be

applied beginning with the 2007 tax year. Pursuant to Sections 11 and 1511(k) of the New

York Tax Law, the tax credits allocated to insurers are subject to an aggregate limit of $8

million. A total of seven CAPCOs and 51 insurers participated in the allocation for the tax year

2007. Details of Program Five tax credits granted and certified capital invested by insurers are

contained in Appendix A5.

9

Table 2

Certified Capital Investments in CAPCOs

PROGRAM 1 PROGRAM 2 PROGRAM 3 PROGRAM 4 PROGRAM 5 1999 2000 2001 2002 2004 2005

GRAND TOTAL

Advantage $17,543,860 $14,505,348 $6,807,867 $27,824,621 $66,681,696Advantage II $10,391,566 $11,486,919 21,878,485Aegis NY 6,126,356 6,126,356BOCNY 14,912,280 14,505,346 29,417,626Enhanced 11,635,750 11,635,750Enhanced II 13,554,216 13,554,216Enhanced III 11,486,920 11,486,920Exponential 3,810,161 3,676,248 * 7,486,409NYSBVF 17,543,860 13,368,984 5,900,151 22,512,648 59,325,643NYSBVF II 12,763,553 12,763,553NYSBVF III 5,360,563 5,360,563Stonehenge 6,807,867 52,866,779 13,554,216 11,486,916 84,715,778Whitecap 4,518,072 4,518,072Whitecap II 5,360,562 5,360,562Wilshire I 3,810,161 3,810,161Wilshire II 6,807,867 6,807,867Wilshire III 35,160,202 35,160,202Wilshire IV 5,218,377 5,218,377Wilshire V 8,691,764 8,691,764Total $50,000,000 $50,000,000 $30,000,000 $150,000,000 $60,000,000 $60,000,000 $400,000,000

* Inactive – did not receive certified capital from insurer investors for the program indicated

10

3. CAPCO Qualified Investments Section 11(c) of the New York Tax Law requires a CAPCO to invest at least 50% of its certified

capital in qualified businesses within four years of the starting date of each CAPCO Program of

which half (25% of certified capital) must be in early stage businesses. The 25% early stage

requirement, however, does not apply to CAPCO Program Three investments made in qualified

businesses located in Empire Zones established pursuant to Article 18-B of the General

Municipal Law. Section 11(h)(3) of the New York Tax Law requires a CAPCO to invest at least

one-third of its Program Three certified capital funds in qualified businesses located in Empire

Zones and another one-third in qualified businesses located in “Underserved Areas” outside

such Empire Zones. Section 11(a)(7) of the New York Tax Law defines a qualified business as

an independently owned and operated business whose headquarters and principal business

operations are located in New York State. Real estate and real estate development firms,

insurance firms, and those businesses that are predominately engaged in professional services

provided by accountants, lawyers or physicians are excluded from consideration. At the time of

the CAPCO’s initial investment, the qualified business may have no more than 200 employees,

80% of whom are employed in New York; if it has more than 100 employees, its gross annual

revenues, together with its affiliates, may not exceed $5 million ($8 million for businesses

located in Empire Zones). Section 11(a)(15) of the New York Tax Law defines an “Underserved

Area” as any county that received less than 25% of the Program One qualified business

investments made as of January 1, 2000. Based on the investment information provided by the

CAPCOs, all counties other than New York County are “Underserved Areas.” The CAPCO’s

investment is to be used to support the New York operations of the qualified business.

Fifteen working days prior to making an investment, a CAPCO is required to file a certified

application with the New York State Insurance Department. Most of the information needed for

this report was obtained from the information requested on the qualified business applications.

In addition, all of the CAPCOs were asked to submit cumulative, updated data on all of their

qualified business investments for this report. The updated information included the actual

amount of money invested at year-end, the number of New York employees at year-end and, if

the investment is no longer held by the CAPCO, the number of employees at the time the

investment terminated. The following data is cumulative for Program One from June 1998, for

11

Program Two from April 2000, for Program Three from December 2000, for Program Four from

December 2004, and for Program Five from November 2005, through December 31, 2009.

a. Allocations and Invested Amounts

For Program One, the CAPCO statute designated $50 million in tax credits for tax year 1999 and

another $50 million for tax year 2000. Together, the insurers requested a total of $312.5

million in tax credits. Since this amount exceeded the available tax credits, the insurers were

allocated credits in proportion to their total requested amounts. A total of $95.5 million was

allocated to the five Program One certified CAPCOs as of June 1998. Due to the fact that two

insurance companies failed to fund their certified capital commitments to Wilshire Advisers,

LLC., a reallocation of the unfunded amount was necessary. This reallocation of the remaining

$4.5 million was made in April 2000.

For Program Two, the CAPCO statute designated $30 million in tax credits for tax year 2001.

Together, the insurers requested a total of $132.2 million in tax credits. Since this amount

exceeded the available tax credits, the insurers were allocated credits in proportion to their total

requested amounts. A total of $30 million was allocated to the five Program Two certified

CAPCOs as of April 2000.

For Program Three, the CAPCO statute designated $150 million in tax credits for tax year 2002.



requested amounts. A total of $150 million was allocated to five of the six Program Three

certified CAPCOs as of December 2000. The sixth CAPCO did not submit any requests for tax

credits.

For Program Four, the CAPCO statute designated $60 million in tax credits for tax year 2006.



requested amounts. A total of $60 million was allocated to six of the seven Program Four

certified CAPCOs as of December 2004. The seventh CAPCO did not submit any requests for

tax credits.

12

For Program Five, the CAPCO statute designated $60 million in tax credits for tax year 2007.



requested amounts. A total of $60 million was allocated to seven Program Five certified

CAPCOs as of November 2005.

Table 3 below lists the total amount of certified capital that the Program One CAPCOs received

for tax years 1999 and 2000 and the total amount of money that they have invested in qualified

businesses as of December 31, 2009. On a combined basis, the CAPCOs have invested

approximately $86.5 million, or a total of 86.5%, of the $100 million of certified capital. The

remaining 13.5%, is invested by the CAPCOs as they deem appropriate. Details of Program

One qualified investments made by the CAPCOs are contained in Appendices B1 and C.

Table 4 below lists the total amount of certified capital that the Program Two CAPCOs received

for tax year 2001 and the total amount of money that they have invested in qualified



remaining 16.5% is invested by the CAPCOs as they deem appropriate. Details of Program Two

qualified investments made by the CAPCOs are contained in Appendices B2 and C.

Table 5 below lists the total amount of certified capital that the Program Three CAPCOs

received for tax year 2002 and the total amount of money that they have invested in qualified


approximately $124.3 million, or a total of 82.8% of the $150 million of certified capital. The

remaining 17.2% is invested by the CAPCOs as they deem appropriate. Details of Program

Three qualified investments made by the active CAPCOs are contained in Appendices B3 and C.

Table 6 below lists the total amount of certified capital that the Program Four CAPCOs received




13

remaining 29.7% is invested by the CAPCOs as they deem appropriate. Details of Program Four

qualified investments made by the active CAPCOs are contained in Appendices B4 and C.

Table 7 below lists the total amount of certified capital that the Program Five CAPCOs received




remaining 39.5% is invested by the CAPCOs as they deem appropriate. Details of Program Five

qualified investments made by the CAPCOs are contained in Appendices B5 and C.

14

Table 3 CAPCO PROGRAM ONE

Certified Capital Allocations and Invested Amounts June 1998 through December 2009

Qualified Investments CAPCO Certified Capital

Allocated @ 12/31/09 Percentage Advantage $ 32,049,208 $26,494,895 82.67%

BOCNY 29,417,626 29,417,626 100.00%

Exponential 3,810,161 2,307,957 60.57%

NYSBVF 30,912,844 24,494,010 79.24%

Wilshire I 3,810,161 3,810,161 100.00%

Total $100,000,000 $86,524,649 86.52%

Graph 1 CAPCO PROGRAM ONE

Allocated and Invested Amounts by CAPCO as of 12/31/09

0

5

10

15

20

25

30

35

40

Advantage BOCNY Exponential NYSBVF Wilshire I

$ m

illio

ns

Allocated Invested

15

Table 4 CAPCO PROGRAM TWO

Certified Capital Allocations and Invested Amounts April 2000 through December 2009

Qualified Investments

CAPCO Certified Capital Allocated @12/31/09 Percentage

Advantage $ 6,807,867 $ 6,807,867 100.00%

Exponential 3,676,248 2,088,667 56.82%

NYSBVF 5,900,151 5,900,151 100.00%

Stonehenge 6,807,867 6,807,866 100.00%

Wilshire II 6,807,867 3,430,000 50.38%

Total $30,000,000 $25,034,551 83.45%

Graph 2 CAPCO PROGRAM TWO

Allocated and Invested Amounts by CAPCO as of 12/31/09

0

1

2

3

4

5

6

7

8

Advantage Exponential NYSBVF Stonehenge Wilshire II

$ m

illio

ns

Allocated Invested

16

Table 5

CAPCO PROGRAM THREE Certified Capital Allocations and Invested Amounts

December 2000 through December 2009

Qualified Investments CAPCO Certified Capital

Allocated @12/31/09 Percentage

Advantage $ 27,824,621 $ 27,824,621 100.00%

Enhanced 11,635,750 7,811,643 67.13%

NYSBVF 22,512,648 19,436,177 86.33%

Stonehenge 52,866,779 51,033,780 96.53%

Wilshire III 35,160,202 18,152,283 51.63%

Total $150,000,000 $124,258,504 82.84%

Graph 3

CAPCO PROGRAM THREE Allocated and Invested Amounts by CAPCO

as of 12/31/09

0

5

10

15

20

25

30

35

40

45

50

55

60

Advantage Enhanced NYSBVF Stonehenge Wilshire III

$ m

illio

ns

Allocated Invested

17

Table 6 CAPCO PROGRAM FOUR

Certified Capital Allocations and Invested Amounts December 2004 through December 2009



Advantage II $10,391,566 $ 9,282,886 89.33%

Enhanced II 13,554,216 11,193,143 82.58%

NYSBVF II 12,763,553 7,963,272 62.39%

Stonehenge 13,554,216 7,759,075 57.24%

Whitecap 4,518,072 3,380,458 74.82%

Wilshire IV 5,218,377 2,625,000 50.30%

Total $60,000,000 $42,203,834 70.34%

Graph 4

CAPCO PROGRAM FOUR Allocated and Invested Amounts by CAPCO

as of 12/31/09

0

5

10

15

Advantage II Enhanced II NYSBVF II Stonehenge Whitecap Wilshire IV

$ m

illio

ns

Allocated Invested

18

Table 7 CAPCO PROGRAM FIVE

Certified Capital Allocations and Invested Amounts November 2005 through December 2009



Advantage II $11,486,919 $ 7,609,077 66.24%

Aegis 6,126,356 3,615,000 59.01%

Enhanced III 11,486,920 8,641,882 75.23%

NYSBVF III 5,360,563 3,079,499 57.45%

Stonehenge 11,486,916 6,127,185 53.34%

Whitecap II 5,360,562 2,879,084 53.71%

Wilshire V 8,691,764 4,350,000 50.05%

Total $60,000,000 $36,301,726 60.50%

Graph 5

CAPCO PROGRAM FIVE Allocated and Invested Amounts by CAPCO

as of 12/31/09

0

5

10

15

Advantage II Aegis Enhanced III NYSBVF III Stonehenge Whitecap II Wilshire V

$ m

illio

ns

Allocated Investments

19

b. Size of Qualified Businesses

As of December 31, 2009, 93 of the 179 qualified businesses that received funds had assets of

less than $1 million at the time of the initial investment, 57 had assets of between $1 million

and $5 million, and 29 had assets of over $5 million. In terms of qualified investments, 167 of

the 443 qualified investments were in qualified business that had assets of less than $1 million

at the time of the initial investments, 164 were in qualified business that had assets of between

$1 million and $5 million, and 112 were in qualified business that had assets of over $5 million.

In terms of actual investment dollars, the smallest companies received 31.1% of the investment

funds. The medium-sized companies received 34.4% of the funds, and the large-sized

companies with assets of over $5 million received 34.5% of the investment funds. Information

on the asset size category of each qualified business at the time of initial investment is in

Appendix C.

20

Table 8 Distribution of Qualified Investments by Size of Company

as of 12/31/09 Program One

Size of Company By Assets

Number of Companies

Amount Invested

Less than $1 million 43 $27,679,921

Between $1 and 5 million 24 $28,466,660

Over $5 million 20 $30,378,068

Total Program 1 87 $86,524,649

Program Two


Number of Companies*

Amount Invested

Less than $1 million 6 $ 5,925,000

Between $1 and 5 million 6 $ 9,088,513

Over $5 million 3 $10,021,038


*Each qualified business is reflected only once in the number of companies column, i.e., the number of companies in Program 2 excludes companies invested in Program 1. Program Three



Amount Invested


Between $1 and 5 million 19 $ 44,929,897

Over $5 million 3 $ 42,171,828

Total Program 3 44 $124,258,504

*Each qualified business is reflected only once in the number of companies column, i.e., the number of companies in Program 3 excludes companies invested in Programs 1 and/or 2.

21

Program Four



Amount Invested



Over $5 million 3 $15,177,134


*Each qualified business is reflected only once in the number of companies column, i.e., the number of companies in Program 4 excludes companies invested in Programs 1, 2 and/or 3. Program Five



Amount Invested



Over $5 million 0 $10,811,247

Total Program 5 8 $36,301,726 *Each qualified business is reflected only once in the number of companies column, i.e., the number of companies in Program 5 excludes companies invested in Programs 1, 2, 3, and/or 4. Programs One, Two, Three, Four, & Five combined



Amount Invested



Over $5 million 29 $108,559,314

Total Combined 179 $314,323,264

*Each qualified business is reflected only once in the number of companies column, i.e., the number of companies in Program 2 excludes companies invested in Programs 1; and the number of companies in Program 3 excludes companies invested in Programs 1 and/or 2.

22

c. Locations of Qualified Businesses

With respect to Programs One, Two, Three, Four, and Five combined, at the time the initial

investments were made, the distribution of the number of qualified businesses by geographic

region was as follows:

93 of the businesses (52.0%) were located in New York City: 74 in New York County, 15 in

Kings County, and 4 in Queens County;

20 of the businesses (11.2%) were located in the Mid-Hudson region: 12 in Westchester

County, 5 in Orange County, 2 in Putnam County, and 1 in Ulster County;

19 of the businesses (10.6%) were in Long Island: 13 in Suffolk and 6 in Nassau County;

16 of the businesses (8.9%) were in the Capitol District: 6 in Albany County, 5 in Rensselaer

County, 2 each in Saratoga and Washington Counties, and 1 in Schenectady County;

16 of the businesses (8.9%) were located in Western New York: 8 in Monroe County, 7 in

Erie County, and 1 in Niagara County;

12 of the businesses (6.7%) were located in the Central New York region: 4 in Tompkins, 2

each in Broome, Cortland and Onondaga Counties, and 1 each in Cayuga and Chenango

Counties; and

3 of the businesses (1.7%) were located in the North Country region: 2 in Clinton County

and 1 in Essex County.

Another way to look at the distribution of the qualified investments made throughout the State

is to compare the actual amounts of money invested in qualified businesses in each region of

the State:

$125.9 million (40.0%) was invested in New York City businesses;

$55.6 million (17.7%) was invested in Western New York businesses;

$40.0 million (12.7%) was invested in Mid-Hudson region businesses;

$39.3 million (12.5%) was invested in Long Island businesses;

$28.4 million (9.0%) was invested in Capitol District businesses;

$23.4 million (7.4%) was invested in Central New York businesses; and

$1.9 million (0.6%) was invested in North Country New York businesses.

Summaries by county are shown in Tables 9 and 10. Detailed information regarding the

location of each business and the amounts invested are provided in Appendices B1, B2, B3, B4,

B5, and C.

23

Table 9

Distribution of Total Qualified Investments by County/Geographic Areas as of 12/31/09 for Programs 1, 2, 3, 4, & 5

Number of Companies* Amount Invested

County Geographic Areas Program

1 Program

2 Program

3 Program

4 Program

5 Program

1 Program

2 Program

3 Program

4 Program

5 New York 39 8 15 10 2 $36,979,477 $ 8,952,990 $34,111,336 $14,493,220 $ 9,459,655

Kings 4 5 3 3 1,028,750 1,527,000 9,684,788 2,853,309 3,926,518

Queens 1 2 1 1,000,000 750,000 1,100,000

New York City Total 44 8 22 14 5 $39,008,227 $10,479,990 $44,546,124 $18,446,528 $13,386,173

Nassau 2 1 2 1 $ 4,545,000 $ 2,670,000 $ 2,484,950 $ 750,000 $ 1,300,000 Suffolk 7 2 2 1 1 5,629,275 2,038,000 16,108,267 1,450,000 2,300,000

Long Island Total 9 3 4 2 1 $10,174,275 $ 4,708,000 $18,593,217 $ 2,200,000 $ 3,600,000

Westchester 5 4 3 $ 3,611,047 $ 1,560,000 $13,473,217 $ 4,541,175 $ 1,263,722

Orange 1 3 1 2,150,000 9,850,100 500,000 Putnam 1 1 1,000,000 250,000 Ulster 1 25,000 975,000 785,000

Mid-Hudson Total 8 8 3 1 $ 6,786,047 $ 1,560,000 $24,548,317 $ 4,541,175 $ 2,548,722

Albany 5 1 $ 5,754,416 $ 2,140,354 $ 3,376,897

Rensselaer 4 1 4,669,500 300,000 300,000 $ 300,000 $ 500,000 Saratoga 1 1 288,890 751,458 1,661,346 1,010,000

Schenectady 1 1,485,317 500,000 Washington 1 1 1,227,198 492,500 1,616,563 985,000 993,438

Capitol District Total 12 2 2 $13,425,321 $ 2,932,854 $ 6,544,918 $ 2,946,346 $ 2,503,438

24

Table 9 (continued) Distribution of Total Qualified Investments by County/Geographic Areas

as of 12/31/09 for Programs 1, 2, 3, 4, & 5

Number of Companies* Amount Invested County

Geographic Areas Program 1

Program2

Program3

Program 4

Program5

Program 1

Program 2

Program 3

Program 4

Program 5

Broome 1 1 $ 117,000 $ 65,000 $ 285,000 $ 915,000 Cayuga 1 380,000 Chenango 1 $ 1,665,000 1,100,000 1,112,815 Cortland 1 1 468,000 342,000 5,740,000 1,333,750 Onondaga 1 1 103,000 3,000,000 Tompkins 1 1 2 228,750 2,448,140 2,525,350 1,555,515

Central NY Total 4 1 4 3 $ 916,750 $ 787,000 $ 12,853,140 $ 5,244,100 $ 3,583,330

Clinton 1 1 $ 650,000 $ 975,750 Essex 1 $ 250,000

North Country Total 1 1 1 $ 650,000 $ 975,750 $ 250,000

Erie 6 1 $ 9,819,029 $ 3,266,707 $ 9,445,198 $ 4,192,210 $ 5,929,353

Monroe 2 1 3 2 3,195,000 750,000 4,675,000 3,983,475 4,300,710

Niagara 1 2,550,000 550,000 2,076,840 650,000 200,000

Western NY Total 9 1 3 3 $15,564,029 $ 4,566,707 $ 16,197,038 $ 8,825,685 $10,430,063

NEW YORK STATE TOTAL

87 15 44 25 8 $86,524,649 $25,034,551 $124,258,504 $42,203,834 $36,301,726

*Each qualified business is reflected only once in the number of companies columns, i.e., the number of companies in Program 2 excludes companies invested in Program 1; and the number of companies in Program 3 excludes companies invested in Programs 1 and/or 2; and the number of companies in Program 4 excludes companies invested in Programs 1, 2 and/or 3 ; and the number of companies in Program 5 excludes companies invested in Programs 1, 2, 3, and/or 4.

25

Table 10 Distribution of Total Qualified Investments by County/Geographic Areas

as of 12/31/09 for Programs 1, 2, 3, 4, & 5 Combined County

Geographic Areas Total Number of

Companies* Percent of Companies

Total Amount Invested

Percent of Amount Invested

Programs 1, 2, 3, 4 & 5 Programs 1, 2, 3, 4 & 5 New York 74 41.34% $103,996,678 33.09%

Kings 15 8.38% 19,020,364 6.05%Queens 4 2.23% 2,850,000 0.91%

New York City Total 93 51.96% $125,867,042 40.04% Nassau 6 3.35% $ 11,749,950 3.74%Suffolk 13 7.26% 27,525,542 8.76%

Long Island Total 19 10.61% $ 39,275,492 12.50% Westchester 12 6.70% $ 24,449,161 7.78%Orange 5 2.79% 12,500,100 3.98%

Putnam 2 1.12% 1,250,000 0.40%Ulster 1 0.56% 1,785,000 0.57%

Mid-Hudson Total 20 11.17% $ 39,984,261 12.72% Albany 6 3.35% $ 11,271,667 3.59%Rensselaer 5 2.79% 6,069,500 1.93%

Saratoga 2 1.12% 3,711,695 1.18%Schenectady 1 0.56% 1,985,317 0.63%

Washington 2 1.12% 5,314,699 1.69%Capitol District Total 16 8.94% $ 28,352,877 9.02%

Broome 2 1.12% $ 1,382,000 0.44%Cayuga 1 0.56% 380,000 0.12%

Chenango 1 0.56% 3,877,815 1.23%Cortland 2 1.12% 7,883,750 2.51%

Onondaga 2 1.12% 3,103,000 0.99%Tompkins 4 2.23% 6,757,755 2.15%

Central NY Total 12 6.70% $ 23,384,320 7.44% Clinton 2 1.12% $ 1,625,750 0.52%Essex 1 0.56% 250,000 0.08%

North Country Total 3 1.68% $ 1,875,750 0.60% Erie 7 3.91% $ 32,652,497 10.39%Monroe 8 4.47% 16,904,185 5.38%

Niagara 1 0.56% 6,026,840 1.92%Western NY Total 16 8.94% $ 55,583,522 17.68%

NEW YORK STATE TOTAL 179 100.00% $314,323,264 100.00% *Each qualified business is reflected only once in the number of companies column, i.e., the number of companies in Program 2 excludes companies also invested in Program 1; the number of companies in Program 3 excludes companies also invested in Programs 1 & 2; etc.

26

Table 11 Counties within each New York State Geographic Area

Designated Geographic Areas

Counties within the Geographic Areas

Capitol District Albany, Montgomery, Rensselaer, Saratoga, Schenectady, Schoharie, Washington

Central NY Broome, Cayuga, Chemung, Chenango, Cortland, Delaware, Madison, Oneida, Onondaga, Ontario, Oswego, Otsego, Schuyler, Seneca, Steuben, Tioga, Tompkins, Wayne, Yates

Long Island Nassau, Suffolk Mid-Hudson Columbia, Dutchess, Greene, Orange, Putnam, Rockland,

Sullivan, Ulster, Westchester New York City Bronx, Kings, New York, Queens, Richmond North Country Clinton, Essex, Franklin, Fulton, Hamilton, Herkimer, Jefferson,

Lewis, Saint Lawrence, Warren Western NY Allegany, Cattaraugus, Chautauqua, Erie, Genesee, Livingston,

Monroe, Niagara, Orleans, Wyoming d. Industry Sectors of Qualified Businesses

The intent of the CAPCO program is to foster growth primarily in high tech industries, although

investments in other industry sectors are permitted. Investments in real estate, real estate

development, insurance, and businesses predominately engaged in professional services

provided by accountants, lawyers or physicians are all excluded from this program. Any other

business that is involved in developing and manufacturing products, product

processing/assembling, product research and development, or providing services, however, is

an acceptable business for a qualified investment.

As shown in the table below, 96.5% of the approximately $314.3 million was invested in 170

qualified businesses in nine major industry sectors. Manufacturing, marketing/sales, and

computers were the three categories with the largest investments and the most qualified

businesses. The manufacturing category included the production of frozen foods, electronics,

optical equipment, and ladies apparel. The marketing/sales category covered advertising, direct

response marketing, and telephone sales. The computer businesses were involved in computer

system design, computer software, and computer education or support services. A complete

list of the entire industry sector classifications of the qualified businesses based on the North

American Industry Classification System (NAICS) is provided in Appendix C.

27

Table 12 CAPCO Programs 1, 2, 3, 4 and 5

Number of Qualified Businesses and Amount of Investments by Industry Sector

Industry Sector Number of

Businesses% of Total

Amount Invested

% of Total

Business consulting 10 5.59% $ 13,636,950 4.34%Computers 28 15.64% $ 68,768,454 21.88%Financial services 14 7.82% $ 25,884,324 8.23%Health/Environmental/Scientific 9 5.03% $ 18,198,823 5.79%Internet 16 8.94% $ 19,226,158 6.12%Manufacturing 38 21.23% $ 71,741,165 22.82%Marketing/Sales 33 18.44% $ 47,191,478 15.01%Media/Entertainment 18 10.06% $ 29,343,125 9.34%Security services 4 2.23% $ 9,250,000 2.94%Other 9 5.03% $ 11,082,788 3.53%

Totals 179 100.00% $314,323,264 100.00%

The “other” category includes communications (2), auto related (1), water transportation (1), beauty salon (1), bowling center (1) and education (3).

28

e. Employment Growth or Reduction in Qualified Businesses

CAPCO Programs One, Two, Three, Four, and Five Combined

The generation of jobs is a major goal of the CAPCO legislation. One of the statutory

requirements to be considered a qualified business is that, upon initial investment in the

business, a minimum of 80% of the employees have to be located in New York State.

The CAPCOs reported information provided by the qualified businesses regarding the changes in

the number of employees in businesses invested in by the CAPCOs in Programs One, Two,

Three, Four, and Five. During 2004, there was a revision in the law that added another method

to measure job creation. Chapter 59 of the laws of 2004 required the CAPCOs to report the

number of employees in a qualified business as of the last day before the investment was

terminated. Using the information from the termination dates, the cumulative employee figures

for all five programs since 1998 shows an increase of 887 positions in New York State.

The current statute also requires the CAPCOs to report the number of jobs in the state that are

retained. Overall, the number of employees in New York in the businesses for which

information was provided as of December 31, 2009 (see Note below) increased by 524 positions

since the inception of the CAPCO program. The change in the number of employees in any one

business ranged from a decrease of 103 to an increase of 210. Fifty-six businesses showed

decreases in the number of New York employees, 13 experienced no change, and, of the 55

that experienced increases, 9 businesses showed employee growth of more than 50 employees.

Note: No current employee information was provided for 55 of the businesses, because the

CAPCOs’ relationship as an investor has ended and they no longer have contact with the

businesses. The businesses (where as of year-end the CAPCO indicated it no longer has

contact, but had reported “0” employees in any prior report year) were counted as having “0”

employees at year-end.

In a couple of instances, the increases in employees were a result of the acquisition of smaller

companies or mergers, and not the result of job creation. It should be noted that in many

instances a CAPCO investment in a qualified business represents only a portion of a qualified

29

business’ overall funding. In an effort to quantify overall funding in the qualified businesses,

the CAPCOs were required to report capital invested by other sources at the same time and/or

subsequent to their CAPCO investments in qualified businesses. During 2009, the CAPCOs

invested approximately $15.7 million in qualified businesses and reported that $579.7 million

dollars of non-CAPCO funds was invested at the same time.

The table below summarizes the increases and decreases in jobs as reported by the CAPCOs.

Further detail is provided in Appendix C.

Table 13 CAPCO Programs 1, 2, 3, 4, and 5 Combined

Change in Number of New York Employees from Time of Initial Investment through 12/31/09

Change in # Employees from

Time of Initial Investment # Businesses as of 12/31/09

Decreases > 20 22

Decreases 11-20 11

Decreases 1-10 23

No changes 13

Increases < 5 8

Increases 5-10 10

Increases 11-20 18

Increases 21-30 3

Increases 31-50 5

Increases > 50 11

Total businesses 179*

Note: *The change in the number of employees was not available for 55 businesses, because the CAPCO's relationship as an investor ended; and it no longer had contact with the business.

30

Changes in the number of employees in CAPCO Programs Three, Four, and Five qualified businesses in Empire Zones Since the time of the initial investments, the overall change in the number of employees in New

York in the 41 qualified businesses located in Empire Zones has increased by 585. Two

hundred nineteen of the increases were in qualified businesses invested in by NYSBVF; 129

were in business invested in by Stonehenge; 107 were in businesses invested in by Advantage;

94 were in businesses invested in by Enhanced; 22 were in businesses invested in by Wilshire;

12 were in businesses invested in by Whitecap; and 2 were in businesses invested in by Aegis.

In instances where more than one CAPCO invested in a qualified business, the gain or loss in

employees was divided between the CAPCOs.

The following were the changes in the number of employees in Empire Zone businesses

invested in by CAPCOs, by location: New York County had an increase of 254; Erie County had

an increase of 214; Ulster County had an increase of 97; Chenango County had an increase of

46; Orange County had an increase of 44; and Tompkins County had an increase of 42. Seven

other counties experienced an increase of less than 25 employees each; namely, Cortland,

Saratoga, Nassau, Albany, Broome, Westchester, and Essex. The remaining seven counties

(Onondaga, Monroe, Kings, Rensselaer, Washington, Suffolk, and Clinton) showed decreases in

number of employees ranging from one to one hundred.

Changes in the number of employees in CAPCO Programs Three, Four, and Five qualified businesses in Underserved Areas

Since the time of the initial investments, the overall change in the number of employees in New

York in the qualified businesses located in Underserved Areas has increased by 427. Qualified

businesses invested in by Advantage showed a net increase of 476 employees. Whitecap and

Enhanced qualified businesses showed net increases of 45 and 41 employees, respectively.

Aegis reported no change in the overall number of employees in qualified business in

Underserved Areas. On the other hand, Stonehenge, NYSBVF and Wilshire qualified businesses

showed net decreases of 74, 52, and 9 employees, respectively. In instances where more than

one CAPCO invested in a qualified business, the gain or loss in employees was divided between

the CAPCOs.

31

The following were the changes in the number of employees in the 49 Underserved Area

businesses invested in by CAPCOs, by county: Erie had a net increase of 234; Suffolk had a net

increase of 130; Queens had a net increase of 118; Tompkins had a net increase of 113;

Orange had a net increase of 108; Niagara had a net increase of 47; and Broome had a net

increase of 12. Washington county showed no change in the overall number of employees in

qualified business in Underserved Areas. Westchester, Nassau, Schenectady, Kings, Ulster,

Monroe and Putnam counties had net decreases of 114; 83, 66, 50, 11, 8, and 3 employees,

respectively.

4. CAPCO Compliance with NYTL Section 11(c)(1) and (h)(3), (4) and (5)

Section 11(c)(1) of the New York Tax Law requires all CAPCOs to invest at least 25% of its

certified capital in qualified businesses within two years of the starting date, 40% within three

years of the starting date, and 50% within four years of the starting date of which half (25% of

certified capital) must be in early stage businesses. Program Four and Five CAPCOs have to

invest one half of the early stage requirement in early stage businesses (12.5%) and the other

half (12.5%) in start-up businesses. The 25% early stage and start-up requirements do not

apply to CAPCO Program Three, Four or Five investments made in qualified businesses located

in Empire Zones.

An early stage business as defined in Section 11(a)(11) is a qualified business which, at the

time of investment, must be involved in activities related to the development of initial product

or service offerings, or must be less than two years old and have less than $2 million in gross

revenues in the immediately preceding fiscal year.

A start-up business as defined in Section 11(a)(16) is a qualified business which, at the time of

investment, must be involved in activities related to the development of initial product or

service offerings, or must be less than two years old and have less than $2 million in gross

revenues in the immediately preceding fiscal year and must have less than 20 employees. In

addition, the business must be one which has emerged within the year prior to the date of the

investment, or is emerging from, or utilizes a technology transferred from, a university or

college research facility located in New York state, a not-for-profit research facility located in

32

New York state, or an industrial research facility located in New York state, or which is

conducting research in conjunction with or in the research facilities of a university or college

located in New York state, or which is located in or has emerged within the year prior to the

date of investment or is emerging from an incubator facility located in New York state.

The starting date is based on the date of the allocations by the Insurance Department, which

were completed in June 1998 for Program One (except for a reallocation of approximately $4.5

million made in April 2000); April 2000 for Program Two; December 2000 for Program Three,

December 2004 for Program Four, and November 2005 for Program Five. If a CAPCO fails to

meet an investment milestone, it is given an additional 120 days to comply. If the deficiency

remains at the end of the extension period, the CAPCO would be decertified and the tax credits

allowed its insurers would be subject to recapture.

According to information provided by the CAPCOs, all Program One CAPCOs have met both the

50% investment milestone and the 25% early stage investment milestone.

It should be noted that there are no further statutory requirements for the Program One

CAPCOs to invest the remaining allocated certified capital of approximately $13.5 million.

However, if the CAPCO fails to invest all of its certified capital within twelve years after the start

of the specific program, it will no longer be permitted to receive management fees. Two

Program One CAPCOs have each invested an amount cumulatively equal to one hundred

percent of their certified capital in qualified businesses and have met all other requirements

under Section (11)(e) of the New York Tax Law. Accordingly, these two CAPCOs are now

released from regulation by the Insurance Department and will no longer be subject to Section

(11)(c) of said statute with respect to certified capital company Program One. Each of the

remaining Program One CAPCOs continues to be subject to regulation by the Insurance

Department pursuant to Section 11(e)(5) of the New York Tax Law until it has invested 100%

of its allocated certified capital in qualified businesses.

Each Program Two CAPCO was required to reach the 50% milestone by April 2004. According

to information provided by the CAPCOs, all Program Two CAPCOs have met both the 50%

investment milestone and the 25% early stage investment milestone.

33

It should be noted that there are no further statutory requirements for the Program Two

CAPCOs that have met both the 50% investment milestone and the 25% early stage investment

milestone to invest the remaining allocated certified capital of approximately $5.04 million.

However, if the CAPCO fails to invest all of its certified capital within twelve years after the start

of the specific program, it will no longer be permitted to receive management fees. Three

Program Two CAPCOs have each invested an amount cumulatively equal to one hundred

percent of their certified capital in qualified businesses. However, only one of the CAPCOs has

met all the other requirements under Section (11)(e) of the New York Tax Law. Accordingly,

this CAPCO has been released from regulation by the Insurance Department and will no longer

be subject to Section (11)(c) of said statute with respect to certified capital company Program

Two. The remaining Program Two CAPCOs continue to be subject to regulation by the

Insurance Department pursuant to Section 11(e)(5) of the New York Tax Law until each has

invested 100% of its allocated certified capital in qualified businesses.

Each Program Three CAPCO was required to reach the 50% milestone by December 2004.

According to information provided by the CAPCOs, all Program Three CAPCOs have met the

50% investment milestone and the 25% early stage investment milestone. Program Three

CAPCOs continue to have the statutory requirement to invest one-third of the certified capital in

Empire Zones and one-third in Underserved Areas outside of all Empire Zones, at the time that

the certified capital is 100% invested. If the CAPCO fails to invest all of its certified capital

within twelve years after the start of the specific program, it will no longer be permitted to

receive management fees. One Program Three CAPCO has invested an amount cumulatively

equal to one hundred percent of its certified capital in qualified businesses; however, it remains

subject to regulation by the Insurance Department until it has met all the other requirements

under Section 11(e) of the New York Tax Law.

Each Program Four CAPCO was required to reach the 50% milestone by December 2008.

According to information provided by the CAPCOs, all Program Four CAPCOs have met the 50%

investment milestone. Each Program Four CAPCO continues to have the statutory requirement

to invest one-third of the certified capital in Empire Zones and one-third in Underserved Areas

outside of all Empire Zones, at the time that the certified capital is 100% invested. If the

34

CAPCO fails to invest all of its certified capital within ten years after the start of the specific

program, it will no longer be permitted to receive management fees. In addition to the above

statutory requirements, Program Four CAPCOs must invest 50% of their total allocated funds in

emerging technology businesses as described in paragraph (b) of subdivision one of section

thirty-one hundred two-e of the public authorities law.

Each Program Five CAPCO was required to reach the 50% milestone by November 2009.

According to information provided by the CAPCOs, all Program Five CAPCOs have met the 50%

investment milestone. Each Program Five CAPCO continues to have the statutory requirement

to invest one-third of the certified capital in Empire Zones and one-third in Underserved Areas

outside of all Empire Zones, at the time that the certified capital is 100% invested. If the

CAPCO fails to invest all of its certified capital within ten years after the start of the specific

program, it will no longer be permitted to receive management fees. In addition to the above

statutory requirements, Program Five CAPCOs must invest 50% of their total allocated funds in

emerging technology businesses as described in paragraph (b) of subdivision one of section

thirty-one hundred two-e of the public authorities law.

Tables 14, 15, 16, 18, and 21 summarize information supplied by the CAPCOs for Programs

One, Two, Three, Four, and Five respectively, regarding amounts invested through December

2009 in qualified businesses and early stage/start-up businesses. Collectively, the seventeen

CAPCOs have $85.7 million remaining to be invested in the five CAPCO programs.

35

Table 14 CAPCO PROGRAM ONE

Certified Capital Allocations and Invested Amounts

Qualified Investments Early Stage Investments CAPCO

Certified Capital

Allocated @12/31/09 Percentage @12/31/09 Percentage

Advantage $ 32,049,208 $26,494,895 82.67% $10,446,717 32.60%BOCNY 29,417,626 29,417,626 100.00% 15,458,081 52.55%Exponential 3,810,161 2,307,957 60.57% 1,745,640 45.82%NYSBVF 30,912,844 24,494,010 79.24% 9,395,157 30.39%Wilshire I 3,810,161 3,810,161 100.00% 1,495,000 39.24%

TOTAL $100,000,000 $86,524,649 86.52% $38,540,595 38.54%

Table 15 CAPCO PROGRAM TWO

Certified Capital Allocations and Invested Amounts

Qualified Investments Early Stage Investments CAPCO

Certified Capital

Allocated @12/31/09 Percentage @12/31/09 Percentage

Advantage $ 6,807,867 $ 6,807,867 100.00% $ 2,694,500 39.58%Exponential 3,676,248 2,088,667 56.82% 930,000 25.30%NYSBVF 5,900,151 5,900,151 100.00% 2,794,577 47.36%Stonehenge 6,807,867 6,807,866 100.00% 2,403,333 35.30%Wilshire II 6,807,867 3,430,000 50.38% 3,380,000 49.65%

TOTAL $30,000,000 $25,034,551 83.45% $12,202,410 40.67%

36

Table 16 CAPCO PROGRAM THREE

Certified Capital Allocations and Early Stage Invested Amounts

Early Stage Requirement

CAPCO Certified Capital

Allocated 50% of Certified Capital

Empire Zone Investments @12/31/09

Col. 3 less Col. 4

Required Investment

(50% of Col. 5)

Early Stage Investments @12/31/09

Advantage $ 27,824,621 $13,912,310 $11,664,997 $ 2,247,313 $ 1,123,657 $ 6,942,703

Enhanced 11,635,750 5,817,875 1,951,458 3,866,417 1,933,208 3,310,185

NYSBVF 22,512,648 11,256,324 8,122,435 3,133,889 1,566,945 4,809,726

Stonehenge 52,866,779 26,433,389 23,128,192 3,305,197 1,652,599 5,165,316

Wilshire III 35,160,202 17,580,101 4,230,667 13,349,434 6,674,717 8,703,283

TOTAL $150,000,000 $75,000,000 $49,097,749 $25,902,251 $12,951,126 $28,931,213

37Table 17

CAPCO PROGRAM THREE Certified Capital Allocations and Invested Amounts

December 2000 through December 2009

Qualified Investments Empire Zone Investments

Underserved Area* Investments Other Investments


Allocated @12/31/09 Percentage @12/31/09 Percentage @12/31/09 Percentage @12/31/09 Percentage

Advantage $ 27,824,621 $ 27,824,621 100.00% $11,664,997 41.92% $13,123,733 47.17% $ 3,035,891 10.91%

Enhanced 11,635,750 7,811,643 67.13% 1,951,458 16.77% 2,275,000 19.55% 3,585,185 30.81%

NYSBVF 22,512,648 19,436,177 86.33% 8,122,435 36.08% 3,775,125 16.77% 7,538,617 33.49%

Stonehenge 52,866,779 51,033,780 96.53% 23,128,192 43.75% 17,425,611 32.96% 10,479,977 19.82%

Wilshire III 35,160,202 18,152,283 51.63% 4,230,667 12.03% 4,499,950 12.80% 9,421,666 26.80%

TOTAL $150,000,000 $124,258,504 82.84% $49,097,749 32.73% $41,099,419 27.40% $34,061,336 22.71%

* An Underserved Area is any area outside of New York County and outside of all Empire Zones.

38


Certified Capital Allocations, Early Stage, and Start-Up Invested Amounts



Allocated

50% of Certified Capital


Col. 3 less Col. 4

Required Investment

(25% of Col. 5)


Start-Up Investment

Advantage II $10,391,566 $ 5,195,783 $ 2,991,647 $ 2,204,136 $ 551,034 $ 4,267,523 $ 623,716

Enhanced II 13,554,216 6,777,108 4,893,779 1,883,329 470,832 3,474,586 1,441,278

NYSBVF II 12,763,553 6,381,777 2,484,964 3,896,813 974,203 3,028,309 1,350,000

Stonehenge 13,554,216 6,777,108 2,773,000 4,004,108 1,001,027 1,151,612 1,102,000

Whitecap 4,518,072 2,259,036 877,000 1,382,036 345,509 1,215,748 610,000

Wilshire IV 5,218,377 2,609,189 2,625,000 0 0 0 0

TOTAL $60,000,000 $30,000,000 $16,645,390 $13,354,610 $3,338,653 $13,137,778 $5,126,994

39







Advantage II $10,391,566 $ 9,282,886 89.33% $ 2,991,647 28.79% $ 4,991,239 48.03% $1,300,000 12.51%

Enhanced II 13,554,216 11,193,143 82.58% 4,893,779 36.11% 4,532,086 33.44% 1,767,278 13.04%

NYSBVF II 12,763,553 7,963,272 62.39% 2,484,964 19.47% 2,778,309 21.77% 2,700,000 21.15%

Stonehenge 13,554,216 7,759,075 57.24% 2,773,000 20.46% 2,002,000 14.77% 2,984,075 22.02%

Whitecap 4,518,072 3,380,458 74.82% 877,000 19.41% 1,887,710 41.78% 615,748 13.63%

Wilshire IV 5,218,377 2,625,000 50.30% 2,625,000 50.30% 0 0.00% 0 0.00%

TOTAL $60,000,000 $42,203,834 70.34% $16,645,390 27.74% $16,191,344 26.99% $9,367,101 15.61%


40


Certified Capital Allocations, Invested Amounts and Emerging Technology Investments December 2004 through December 2009

Qualified Investments Emerging Technology Investments CAPCO Certified Capital

Allocated @ 12/31/09 Percentage @ 12/31/09 Percentage

Advantage II $10,391,566 $ 9,282,886 89.33% $ 4,491,239 43.22%

Enhanced II 13,554,216 11,193,143 82.58% 6,325,244 46.67%

NYSBVF II 12,763,553 7,963,272 62.39% 4,938,272 38.69%

Stonehenge 13,554,216 7,759,075 57.24% 5,032,075 37.13%

Whitecap 4,518,072 3,380,458 74.82% 2,087,000 46.19%

Wilshire IV 5,218,377 2,625,000 50.30% 125,000 2.40%

TOTAL $60,000,000 $42,203,834 70.34% $22,998,831 38.33%

41


Certified Capital Allocations, Early Stage, and Start-Up Invested Amounts



Allocated

50% of Certified Capital


Col. 3 less Col. 4

Required Investment

(25% of Col. 5)


Start-Up Investment

Advantage II $11,486,919 $ 5,743,460 $ 1,915,004 $ 3,828,456 $ 957,114 $3,244,073 $1,000,000

Aegis 6,126,356 3,063,178 1,665,000 1,398,178 349,545 600,000 1,050,000

Enhanced III 11,486,920 5,743,460 3,940,299 1,803,161 450,790 2,269,361 860,722

NYSBVF III 5,360,563 2,680,282 1,370,000 1,310,282 327,570 1,034,999 674,500

Stonehenge 11,486,916 5,743,458 1,925,030 3,818,428 954,607 1,198,326 636,229

Whitecap II 5,360,562 2,680,281 0 2,680,281 670,070 1,404,000 671,000

Wilshire V 8,691,764 4,345,882 4,350,000 0 0 0 0

TOTAL $60,000,000 $30,000,000 $15,165,333 $14,834,667 $3,708,667 $9,750,759 $4,892,451

42







Advantage II $11,486,919 $ 7,609,077 66.24% $ 1,915,004 16.67% $ 4,744,073 41.30% $ 950,000 8.27%

Aegis 6,126,356 3,615,000 59.01% 1,665,000 27.18% 1,050,000 17.14% 900,000 14.69%

Enhanced III 11,486,920 8,641,882 75.23% 3,940,299 34.30% 3,318,861 28.89% 1,382,722 12.04%

NYSBVF III 5,360,563 3,079,499 57.45% 1,370,000 25.56% 912,000 17.01% 797,499 14.88%

Stonehenge 11,486,916 6,127,185 53.34% 1,925,030 16.76% 1,300,555 11.32% 2,901,600 25.26%

Whitecap II 5,360,562 2,879,084 53.71% 0 0.00% 1,404,084 26.19% 1,475,000 27.52%

Wilshire V 8,691,764 4,350,000 50.05% 4,350,000 50.05% 0 0.00% 0 0.00%

TOTAL $60,000,000 $36,301,726 60.50% $15,165,333 25.28% $12,729,573 21.22% $8,406,821 14.01%


43


Certified Capital Allocations, Invested Amounts and Emerging Technology Investments December 2004 through December 2009

Qualified Investments Emerging Technology Investments CAPCO Certified Capital

Allocated @ 12/31/09 Percentage @ 12/31/09 Percentage

Advantage II $11,486,919 $ 7,609,077 66.24% $ 4,615,635 40.18%

Aegis 6,126,356 3,615,000 59.01% 2,400,000 39.18%

Enhanced III 11,486,920 8,641,882 75.23% 4,071,585 35.45%

NYSBVF III 5,360,563 3,079,499 57.45% 2,367,499 44.17%

Stonehenge 11,486,916 6,127,185 53.34% 4,860,859 42.32%

Whitecap II 5,360,562 2,879,084 53.71% 1,271,000 23.71%

Wilshire V 8,691,764 4,350,000 50.05% 1,750,000 20.13%

TOTAL $60,000,000 $36,301,726 60.50% $21,336,578 35.56%

44

With respect to Programs Three, Four, and Five, pursuant to Sections 11(h)(3), (4), and (5) of

the New York Tax Law, each CAPCO is required to invest at least one-third of its certified capital

in qualified businesses in Empire Zones and at least one-third in qualified businesses in

Underserved Areas outside of all Empire Zones. Tables 17, 19, and 22 summarize the

cumulative investments in the designated areas as of December 31, 2009. All of the CAPCOs

are proceeding toward the achievement of the required distribution at the time that 100% of

the certified capital is invested, and they are no longer subject to regulation by the Insurance

Department.

Programs Four and Five have an additional category of investments that must be achieved at

the time that 100% of the certified capital is invested. Pursuant to Sections 11(h)(4) and (5),

the CAPCOs must invest fifty percent of their total allocated funds in emerging technology

businesses that are in activities set forth in paragraph (b) of subdivision one of section thirty-

one hundred two-e of the public authorities law. These businesses must also have a ratio of

research and development expenditures to net sales that equals or exceeds six percent during

the fiscal year immediately preceding the qualified investment. Tables 20 and 23 summarize

the emerging technology investments as of December 31, 2009.

5. Comments on the CAPCO Program

The generation of jobs is a major goal of the CAPCO Programs. As a result of the approximately

$314 million that has been invested in qualified businesses by all of the CAPCO programs, there

has been a net increase of 524 jobs in the state, according to the information provided by the

CAPCOs.

Based on a review of the terms of the investments made in 2009, we noted that the terms of

the debt instruments continued to be generally of a shorter duration than in the prior years. In

2009, about 8% of the loans (7% in 2008) had terms of five years or more, as compared to

34% in 2007; and 46% of the loans (69% in 2008) had two-year terms, as compared to 14% in

2007. Given the current state of the economy in New York City and in New York State as a

whole, it would seem that making funds available for longer terms would better enable

enterprises to fully execute their business plans and to continue as viable businesses in the

State.

A p p e n d i x A1

CAPCO Program One Insurer Tax Credit Allocations

PROGRAM 1INSURER ADVANTAGE BOCNY NYSBVF TOTAL ADVANTAGE BOCNY NYSBVF EXPONENTIAL WILSHIRE TOTAL* TOTAL

1 Allstate 0 2,673,797 2,673,797 B 568,181 3,241,9782 Allstate Life of NY 3,508,772 3,508,772 0 3,508,7723 Am Family Life of NY 1,052,632 1,052,632 0 1,052,6324 Am Gen Life of NY 1,666,667 1,666,667 1,336,898 1,336,898 3,003,5655 Am Manufacturers Mut 850,000 850,000 681,818 681,818 1,531,8186 Am Motorists 233,333 233,333 187,166 187,166 420,4997 Bankers Am Life 1,666,667 1,666,667 1,336,898 1,336,898 3,003,5658 Conn Gen Life 3,508,772 3,508,772 2,673,797 2,673,797 6,182,5699 Employer's of Wausau 0 2,673,797 2,673,797 2,673,797

10 Equitable Life 1,754,386 1,754,386 2,673,797 2,673,797 4,428,18311 Financial Sec Assur 0 1,243,316 1,243,316 1,243,31612 1st Allmerica Finc'l Life 1,666,667 1,666,667 1,871,658 1,871,658 3,538,32513 1st SunAmerica Life 0 2,673,797 2,673,797 W 1,136,364 3,810,16114 Frontier 0 721,925 721,925 721,92515 Guardian Life 1,666,667 1,666,667 1,336,898 1,336,898 3,003,56516 Hartford Life 3,508,772 3,508,772 2,673,797 2,673,797 6,182,56917 John Hancock Mut Life 3,508,772 3,508,772 2,673,797 2,673,797 6,182,56918 Lumbermen's Mut Cas 583,333 583,333 467,914 467,914 1,051,24719 Mass Mut Life 2,456,140 2,456,140 2,673,797 2,673,797 5,129,93720 Metropolitan Life 1,666,667 1,754,386 3,421,053 955,885 802,139 1,758,024 5,179,07721 Mut Life of NY 1,754,386 1,754,386 0 1,754,38622 Nationwide Mut 1,666,667 1,754,386 3,421,053 1,089,572 668,449 1,758,021 5,179,07423 New York Life 1,666,667 1,666,667 1,336,898 1,336,898 A 1,136,364 4,139,92924 Northwestern Mut Life 1,666,667 1,666,667 1,336,898 1,336,898 3,003,56525 Phoenix Home Life Mut 1,754,386 1,754,386 3,508,772 1,336,898 1,336,898 2,673,796 B 568,181 6,750,74926 Reliance 833,333 833,333 668,449 668,449 1,501,78227 Reliance Nat'l Indem 833,333 833,333 668,449 668,449 1,501,78228 Traveler's Indemnity 877,192 877,192 1,754,386 3,508,770 668,449 1,336,898 2,005,347 5,514,11729 Utica Mut 0 2,673,797 2,673,797 E 1,136,364 3,810,16130 US Life in City of NY 1,754,386 1,754,386 0 1,754,386

TOTAL 17,543,860 14,912,280 17,543,860 50,000,000 13,368,984 13,368,984 13,368,984 2,673,797 2,673,797 45,454,546 4,545,454 100,000,000

* NOTE: A=B= BOCNYE=W=

CAPCO PROGRAM ONE -- TAX CREDIT ALLOCATIONSTAX YEAR 2000 TAX YEAR 1999

APPENDIX A1

REALLOCATED

ADVANTAGE

EXPONENTIALWILSHIREINSURERS DID NOT HONOR. THIS $4,545,454 WAS REALLOCATED IN APRIL 2000.

DOES NOT INCLUDE THE FRONTIER INSURANCE COMPANY & PUBLIC SERVICE INSURANCE COMPANY IRREVOCABLE FUNDING COMMITMENTS IN THE RESPECTIVE AMOUNTS OF $1,871,657 & $2,673,797 MADE TO WILSHIRE ADVISERS, LLC WHICH THESE

A p p e n d i x A2

CAPCO Program Two Insurer Tax Credit Allocations

ADVANTAGE STONEHENGE NYSBVF WILSHIRE II EXPONENTIALINSURER TOTAL

1 Allstate Life of NY 1,361,573 1,361,5732 Ambac Assurance 1,815,431 1,815,4313 Am Gen Life of NY 680,787 680,7874 American Bankers of FL 885,023 885,0235 AMEX Assurance 567,323 567,3236 Columbian Mutual Life 680,787 680,7877 Equitable Life 680,787 680,7878 First Fortis Life 885,023 885,0239 GE Capital Life Assur of NY 1,134,644 1,134,644

10 Guardian Life 1,361,573 1,361,57311 The Hanover Ins 907,716 907,71612 IDS Life of NY 567,323 567,32313 John Hancock Mut Life 1,815,431 1,815,43114 Massachusetts Bay 453,858 453,85815 Mass Mut Life 1,134,644 1,134,64416 MBIA Ins Corp 1,770,045 1,770,04517 Metropolitan Life 1,361,573 1,361,57318 New York Life 1,361,573 1,361,57319 Philadelphia Indemnity 1,134,644 1,134,64420 Phoenix Home Life Mut 1,770,045 1,770,04521 Principal Life 1,134,644 1,134,64422 Pudential Ins. of America 1,134,644 1,134,64423 Security Mutual Life of NY 612,708 612,70824 Traveler's Indemnity of IL 1,497,730 226,929 1,724,65925 Unity Mutual Life 567,323 567,32326 US Life in City of NY 680,787 680,78727 Utica Mutual 1,210,288 1,210,28828 Utica National Life 605,144 605,144

TOTAL 6,807,866 6,807,866 5,900,152 6,807,866 3,676,250 30,000,000

APPENDIX A2

CAPCO PROGRAM TWO -- TAX CREDIT ALLOCATIONS FOR TAX YEAR 2001

A p p e n d i x A3

CAPCO Program Three Insurer Tax Credit Allocations

INSURER ADVANTAGE ENHANCED NYSBVF STONEHENGE WILSHIRE III TOTAL1 Aetna Life Ins Co 5,059,022 5,059,022 2 American Automobile Ins Co 1,517,707 1,517,707 3 American Bankers Ins Co 1,806,071 1,806,071 4 American Mayflower Life 2,023,609 2,023,609 5 American Security Ins Co 591,906 591,906 6 AMEX Assurance Co 1,517,707 1,517,707 7 Atlantic Mutual Ins Co 1,264,755 1,264,755 8 AUSA Life Ins Co 4,047,218 4,047,218 9 Bankers American Life Assurance 2,661,046 2,661,046 10 Colonial Penn Franklin Ins Co 505,902 505,902 11 Colonial Penn Ins Co 505,902 505,902 12 Commonwealth Land Title 2,377,740 2,377,740 13 Equitable Life Assurance of US 3,035,413 3,035,413 14 Finger Lakes Long Term Care 1,517,707 1,517,707 15 Firemen's Fund Ins Co 3,541,315 3,541,315 16 First UNUM Life Ins Co 5,059,022 5,059,022 17 GE Capital Life Assur Co of NY 2,023,609 2,023,609 18 Guardian Life Ins Co of America 5,059,022 5,059,022 19 Hanover Ins Co 5,059,022 5,059,022 20 Hartford Life Ins Co 4,047,218 4,047,218 21 IDS Life Ins Co of NY 3,541,315 3,541,315 22 John Hancock Life Ins Co 5,059,022 5,059,022 23 Lawyers Title Ins Co 1,669,477 1,669,477 24 Life Ins Co of Boston & NY 252,951 252,951 25 Massachusetts Mutual Life Ins Co 1,264,755 1,264,755 1,264,755 1,264,755 5,059,022 26 MBIA Ins Co 5,059,022 5,059,022 27 Medical Liability Mutual Ins Co 5,059,022 5,059,022 28 Metropolitan Life Ins Co 2,529,511 2,529,511 5,059,022 29 National Life Ins Co 5,059,022 5,059,022 30 National Union Fire of Pittsburgh 5,059,022 5,059,022 31 Nationwide Mutual Ins Co 5,059,022 5,059,022 32 New York Life Ins Co 2,529,511 2,529,511 5,059,022 33 Northwestern Mutual Life 2,529,511 2,529,511 5,059,022 34 Penn Mutual Life Ins Co 5,059,022 5,059,022 35 Philadelphia Indemnity Ins Co 758,853 758,853 36 Phoenix Ins Co 4,553,120 4,553,120 37 Principal Life Ins Co 2,529,511 2,529,511 38 Prudential Ins Co of America 2,529,511 2,529,511 5,059,022 39 Reliastar Life Ins Co of NY 5,059,022 5,059,022 40 Teachers Ins & Annuity Assoc 5,059,022 5,059,022 41 Travelers Indemnity of Illinois 505,902 505,902 42 Union Central Life Ins Co 2,023,609 2,023,609 43 United Services Auto Assoc 5,059,022 5,059,022 44 US Life Ins Co in the City of NY 5,059,022 5,059,022

TOTAL 27,824,621 11,635,750 22,512,648 52,866,779 35,160,202 150,000,000

CAPCO PROGRAM THREE -- TAX CREDIT ALLOCATIONS FOR TAX YEAR 2002

APPENDIX A3

A p p e n d i x A4

CAPCO Program Four Insurer Tax Credit Allocations

INSURER ADVANTAGE II ENHANCED II NYSBVF STONEHENGE WHITECAP WILSHIRE IV TOTAL

1 American Family Life Ass Co of NY 1,807,229 1,807,2292 Automobile Ins Co of Hartford, CT 1,084,337 1,084,3373 AXA Equitable Life Ins Co 1,807,229 1,807,2294 Banker's Life Ins Co 1,807,229 1,807,2295 Citizens Ins Co of America 903,614 903,6146 Columbian Mutual Life Ins Co 225,904 225,9047 Continental Casualty Co 1,807,229 1,807,2298 Erie Ins Co 1,807,229 1,807,2299 Federal Ins Co 1,807,229 1,807,22910 Financial Security Ass, Inc. 1,807,229 1,807,22911 First Fortis Life Ins Co 1,807,229 1,807,22912 First Unum Life Ins Co 1,807,229 1,807,22913 General Ins Co of America 903,614 903,61414 Government Employees Ins Co 1,807,229 1,807,22915 Guardian Life Ins Co of America 1,807,229 1,807,22916 Hanover Ins Co 903,614 903,61417 John Hancock Life Ins Co 1,807,229 1,807,22918 Lincoln Life and Annuity Co of NY 1,242,470 564,759 1,807,22919 Massachusetts Mutual Life Ins Co 903,614 903,614 1,807,22820 MBIA Ins Corp 1,807,229 1,807,22921 MedAmerica Ins Co of NY 1,807,229 1,807,22922 Medical Liability Mutual Ins Co 1,807,229 1,807,22923 Metropolitan Life Ins Co 903,614 903,614 1,807,22824 Mortgage Guaranty Ins Corp 1,242,470 1,242,47025 Nation Union Fire Ins Co of Pittsburgh, PA 1,807,229 1,807,22926 National Benefit Life Ins Co 903,614 903,61427 National Life Ins Co 1,807,229 1,807,22928 Nationwide Mutual Ins Co 1,807,229 1,807,22929 New York Life Ins Co 451,807 1,355,422 1,807,22930 Northwestern Mutual Life Ins Co 1,807,229 1,807,22931 Pacific Life and Annuity Co 158,133 158,13332 Penn Life Mutual Ins Co 1,129,518 1,129,51833 Phoenix Life Ins Co 903,614 903,61434 Prudential Ins Co of America 903,614 903,614 1,807,22835 SAFECO Ins Co of America 903,614 903,61436 Sun Life Ins and Annuity Co of NY 1,807,229 1,807,22937 Transamerica Financial Life Ins Co 1,807,229 1,807,22938 Travelers Indemnity Co of CT 722,892 722,89239 Travelers Ins Co 903,614 903,61440 United Services Automobile Association 1,807,229 1,807,22941 Unity Mutual Life Ins Co 90,364 90,36442 US Specialty Ins Co 225,904 225,904

TOTAL 10,391,566 13,554,216 12,763,553 13,554,216 4,518,072 5,218,377 60,000,000

CAPCO PROGRAM FOUR -- TAX CREDIT ALLOCATIONS FOR TAX YEAR 2006

APPENDIX A4

A p p e n d i x A5

CAPCO Program Five Insurer Tax Credit Allocations

INSURER Advantage II Aegis Enhanced III NYSBVF III Stonehenge Whitecap II Wilshire V TOTAL

1 Aetna Life Insurance Company 1,531,589 1,531,5892 Arch Insurance Company 1,531,589 1,531,5893 AXA Equitable Life Insurance Company 1,148,692 1,148,6924 Balboa Insurance Company 574,346 574,3465 Bankers Life Insurance Company of New York 1,531,589 1,531,5896 Canada Life Insurance Company of New York 1,470,325 1,470,3257 Citizens Insurance Company of America 735,163 735,1638 Columbian Mutual Life Insurance Company 574,346 574,3469 Continential Casualty Company 1,531,589 1,531,58910 CUNA Mutual Insurance Society 1,531,589 1,531,58911 Erie Insurance Company 1,531,589 1,531,58912 Federal Insurance Company 1,531,589 1,531,58913 Financial Security Assurance Inc. 765,795 765,79514 GE Capital Life Assurance Company of New York 1,531,589 1,531,58915 General Insurance Company of America 765,795 765,79516 Government Employees Insurance Company 1,531,589 1,531,58917 Graphic Arts Mutual Insurance Company 765,795 765,79518 John Hancock Life Insurance Company 1,531,589 1,531,58919 Lincoln Life and Annuity Company of New York 1,531,589 1,531,58920 Massachusetts Mutual Life Insurance Company 0 765,795 765,795 1,531,59021 MedAmerica Insurance Company of New York 1,194,639 1,194,63922 Medical Liability Mutual Insurance Company 1,470,325 1,470,32523 Merchants Mutual Insurance Company 1,531,589 1,531,58924 Meritplan Insurance Company 191,449 191,44925 Metropolitan Life Insurance Company 765,795 765,795 1,531,59026 MONY Life Insurance Company 382,897 382,89727 Mortgage Guaranty Insurance Corporation 1,531,589 1,531,58928 National Benefit Life Insurance Company 1,470,325 1,470,32529 National Grange Mutual Insurance Company 1,531,589 1,531,58930 National Life Insurance Company 1,470,325 1,470,32531 Nationwide Life Insurance Company 441,098 441,09832 Nationwide Mutual Insurance Company 1,029,228 1,029,22833 New York Life Insurance and Annuity Corporation 191,449 191,449 382,89834 New York Life Insurance Company 574,346 574,346 1,148,69235 Nova Casualty Company 306,318 306,31836 Phoenix Life Insurance Company 1,531,589 1,531,58937 Physicians' Reciprocal Insurers 1,531,589 1,531,58938 Principal Life Insurance 1,531,589 1,531,58939 Prudential Insurance Company of America 1,531,589 1,531,58940 SAFECO Insurance Company of America 765,795 765,79541 Sun Life and Annuity Company of New York 1,531,589 1,531,58942 The Automobile Ins Company of Hartford, CT 765,795 765,79543 The Guardian Life Insurance Company of America 1,531,589 1,531,58944 The Hanover Insurance Company 735,163 735,16345 The Northwestern Mutual Life Insurance Company 1,531,589 1,531,58946 The Penn Mutual Life Insurance Company 765,795 765,79547 The Travelers Indemnity Company of Connecticut 765,795 765,79548 Transamerica Financial Life Insurance Company 1,531,589 1,531,58949 United Services Automobile Association 1,470,325 1,470,32550 Unity Mutual Life Insurance Company 153,154 153,15451 Utica Mutual Insurance Company 1,531,589 1,531,589

Total 11,486,919 6,126,356 11,486,920 5,360,563 11,486,916 5,360,562 8,691,764 60,000,000

CAPCO PROGRAM FIVE -- TAX CREDIT ALLOCATIONS FOR TAX YEAR 2007

APPENDIX A5

A p p e n d i x B1

CAPCO Program One Amounts Invested in Qualified Businesses

InitialAssets

1 1-800-Gift Certificate LLC <1M NYC New York 0 0 0 0 325,000 325,0002 1Call4All LLC dba Biazo <1M Rensselaer Rensselaer 500,000 0 125,000 0 0 625,0003 7thOnline Inc <1M NYC New York 0 287,500 0 0 0 287,500

7thOnline Inc 1-5M - - NYC New York 0 25,000 0 0 0 25,0004 Actiant Inc (Electronic Sales Systems Inc) <1M Tarrytown Westchester 0 0 0 550,000 0 550,0005 Advanced Internet Design and Application <1M Buffalo Erie 0 0 0 0 570,000 570,0006 Alloy Inc. (InSite Advertising Inc) <1M - - NYC New York 0 0 0 1,000,000 0 1,000,0007 Allworx Corp. 1-5M Fairport Monroe 225,000 0 0 0 0 225,0008 American Scholar Inc 1-5M - - Bay Shore Suffolk 0 789,275 0 0 0 789,2759 AngelSociety LLC <1M NYC New York 0 0 0 250,000 0 250,00010 Applied Robotics Inc 5M+ - - Glenville Schenectady 0 1,485,317 0 0 0 1,485,31711 Autotask Corporation <1M Rensselaer Rensselaer 0 0 200,000 0 200,000 400,00012 Blue Slate Ventures, LLC <1M - - Albany Albany 0 0 75,000 0 0 75,00013 Broadway Digital Entertainment Inc (Broadway 5M+ NYC New York 0 0 0 249,600 0 249,60014 C3i Inc 1-5M - - NYC New York 0 0 0 875,000 0 875,00015 Cambium Learning (New York) Inc. 5M+ - - NYC New York 0 951,451 0 0 0 951,45116 Cedric Kushner Promotions Ltd 1-5M - - Watermill Suffolk 0 0 0 0 400,000 400,00017 Chapman Instruments Inc <1M - - Rochester Monroe 2,370,000 0 0 0 0 2,370,000

Chapman Instruments Inc <1M Rochester Monroe 500,000 0 0 0 0 500,000Chapman Instruments Inc 1-5M - - Rochester Monroe 100,000 100,000

18 Chestnut Direct Inc.dba Home Bistro <1M - - Plattsburgh Clinton 0 0 0 150,000 0 150,000Chestnut Direct Inc.dba Home Bistro <1M - - Plattsburgh Clinton 0 0 0 500,000 0 500,000

19 City Street Solutions, Inc. <1M Brooklyn Kings 213,750 0 0 0 0 213,75020 Click Things Inc (Hotspace Inc) 5M+ NYC New York 0 0 0 999,995 0 999,99521 Comet Systems Inc <1M NYC New York 663,467 0 0 0 0 663,46722 Commerce Systems Inc dba 2Scoot 1-5M Kingston Ulster 0 25,000 0 0 0 25,00023 CreditEx Inc <1M NYC New York 0 0 0 250,000 0 250,00024 Critical Mention, Inc. <1M NYC New York 0 275,000 0 0 0 275,000

Critical Mention, Inc. <1M NYC New York 0 167,024 0 0 0 167,02425 DataSynapse, Inc. 1-5M NYC New York 0 178,457 0 200,000 0 378,457

DataSynapse, Inc. 5M+ - - NYC New York 0 47,904 0 0 47,904

TOTAL

CAPCO PROGRAM ONE -- AMOUNTS INVESTED IN QUALIFIED BUSINESSESAs of December 31, 2009

Early

Sta

ge LOCATION AMOUNT INVESTEDQUALIFIED BUSINESS

City County ADVANTAGE BOCNY EXPONENTIAL NYSBVF WILSHIRE I

APPENDIX B11 of 4

InitialAssets TOTAL


Early

Sta



26 dB Design LLC <1M - - Johnson City Broome 0 0 117,000 0 0 117,00027 Direct Creations, LLC <1M NYC New York 0 0 0 0 400,000 400,00028 EasyLink Services Inc (Mail.com Inc) 5M+ NYC New York 0 2,150,000 0 0 0 2,150,00029 Edgehill Technologies LLC <1M Syracuse Onondaga 0 0 103,000 0 0 103,00030 Engineered Products Group, LLC 5M+ - - Niagara Falls Niagara 1,050,000 1,500,000 0 0 0 2,550,00031 eOneGlobal <1M NYC New York 0 0 0 500,000 0 500,00032 FinTrack Systems Corp <1M NYC New York 0 0 0 500,000 0 500,00033 GarageTek Inc <1M Port Washington Nassau 0 3,275,000 0 0 0 3,275,00034 Globecon Group Ltd 1-5M - - NYC New York 0 0 0 750,000 0 750,00035 Golden Goal, LLC 1-5M Fort Ann Washington 369,375 0 0 0 0 369,375

Golden Goal, LLC 1-5M Fort Ann Washington 615,625 0 0 0 0 615,625Golden Goal, LLC 5M+ - - Fort Ann Washington 96,099 96,099Golden Goal, LLC 5M+ - - Fort Ann Washington 96,099 96,099Golden Goal, LLC 5M+ - - Fort Ann Washington 50,000 50,000

36 Gourmet Plate Inc (Fulton Street Lobster & <1M Long Island City Queens 0 0 0 1,000,000 0 1,000,00037 GridApp Systems, Inc. 1-5M - - NYC New York 750,000 0 0 0 0 750,000

GridApp Systems, Inc. 1-5M - - NYC New York 750,000 0 0 0 0 750,000GridApp Systems, Inc. 1-5M - - NYC New York 666,667 0 0 0 0 666,667GridApp Systems, Inc. 1-5M - - NYC New York 250,000 250,000

38 HalfthePlanet (AdaptZ.com Inc) <1M NYC New York 0 0 0 500,000 0 500,00039 IA Systems Inc <1M Albany Albany 0 0 250,000 0 0 250,00040 IMPROV Technologies Inc 1-5M NYC New York 250,000 0 0 0 0 250,00041 Intelli-Tec Security Services LLC 1-5M Westbury Nassau 1,270,000 0 0 0 0 1,270,00042 Internet Financial Services Inc / A.B. Watley 1-5M - - NYC New York 0 0 0 1,838,750 0 1,838,75043 IntraLinks Inc 1-5M - - NYC New York 0 0 0 2,500,000 0 2,500,00044 Invision.com, Inc. 5M+ - - Commack Suffolk 50,000 0 0 0 0 50,00045 i-Stream TV Inc <1M NYC New York 0 0 0 500,000 0 500,00046 J.F.G. Food Corp. 1-5M - - Brewster Putnam 0 0 0 1,000,000 0 1,000,00047 JCR Business Services, LLC <1M - - Great River Suffolk 0 0 0 0 570,000 570,000

APPENDIX B12 of 4

InitialAssets TOTAL


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48 Kanoodle.com, Inc. 5M+ - - Getzville Erie 850,000 1,000,000 0 0 0 1,850,000Kanoodle.com, Inc. 5M+ Getzville Erie 3,250,000 0 0 0 3,250,000

49 K's Salon, LLC <1M - - NYC New York 0 0 111,000 0 570,000 681,00050 L&K Top Design Corp. <1M - - Brooklyn Kings 0 0 0 0 90,000 90,00051 Medicom, LLC 1-5M - - Brooklyn Kings 0 375,000 0 0 0 375,00052 Merchant's Ad-Vantage Corp 1-5M Melville Suffolk 1,900,000 0 0 0 0 1,900,00053 ModelWire Inc <1M NYC New York 0 0 0 650,000 0 650,00054 MR Holding Company, LLC 5M+ Goshen Orange 0 2,150,000 0 0 0 2,150,00055 New Monarch Machine Tool, Inc. 5M+ - - Cortland Cortland 468,000 0 0 0 0 468,00056 New York Business Development Corporation 5M+ - - Albany Albany 0 0 0 1,123,103 0 1,123,10357 Nextidea Corp <1M Albany Albany 0 0 75,000 0 0 75,00058 Niagara Dispensing Technologies, LLC <1M Buffalo Erie 500,000 0 0 0 0 500,000

Niagara Dispensing Technologies, LLC 1-5M - - Buffalo Erie 290,000 290,00059 NightFunk Inc <1M Ithaca Tompkins 0 0 228,750 0 0 228,75060 Oxford Collection Agency 1-5M - - Melville Suffolk 0 170,000 0 0 0 170,000

Oxford Collection Agency 1-5M - - Melville Suffolk 0 750,000 0 0 0 750,00061 Parkview Health Services, LLC 5M+ - - Buffalo Erie 0 1,929,712 0 0 0 1,929,71262 PECO Pallet, Inc. 5M+ - - Yonkers Westchester 325,000 1,800,000 0 0 0 2,125,000

PECO Pallet, Inc. 5M+ - - Yonkers Westchester 190,841 0 0 0 190,841PECO Pallet, Inc. 5M+ - - Yonkers New York 245,045 0 0 0 245,045

63 PowerOne Media LLC <1M Troy Rensselaer 3,439,500 0 175,000 0 0 3,614,50064 Prefer Network Inc (Prefer.com Inc) 1-5M NYC New York 0 1,350,000 0 0 0 1,350,00065 PressCorps Inc 1-5M - - NYC New York 2,705,000 0 0 0 0 2,705,00066 R.D.N.Y.C. Inc 1-5M - - NYC New York 0 0 0 100,000 0 100,00067 RenalTech International LLC 1-5M NYC New York 0 0 0 500,000 0 500,00068 ReQuest Inc <1M Ballston Spa Saratoga 0 0 288,890 0 0 288,89069 Right Track Recording LLC 1-5M - - NYC New York 0 0 0 1,250,000 0 1,250,00070 Ryder System, Inc. 5M+ - - Brooklyn Kings 0 0 0 0 350,000 350,00071 SchoolNet, Inc. 5M+ - - NYC New York 0 0 0 1,500,000 0 1,500,00072 Sesha, Inc. <1M - - South Salem Westchester 0 0 0 0 335,161 335,16173 Show Digital Inc <1M NYC New York 0 0 0 1,000,000 0 1,000,000

APPENDIX B13 of 4

InitialAssets TOTAL


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74 Skyline Ambulance 1-5M New Rochelle Westchester 0 0 0 115,000 0 115,00075 SOMS Technologies <1M - - Valhalla Westchester 50,000 0 0 0 0 50,00076 Synacor, Inc. 5M+ - - Buffalo Erie 1,150,000 0 0 0 0 1,150,00077 TAKKLE, Inc. <1M NYC New York 0 0 0 329,999 0 329,99978 TeleMedia Accelerator LLC 1-5M NYC New York 0 0 0 500,000 0 500,00079 The Metropolitan Switch Board Co., Inc. 1-5M - - Amityville Suffolk 0 1,000,000 0 0 0 1,000,00080 The SmartPill Corp. <1M Buffalo Erie 0 0 270,000 0 0 270,000

The SmartPill Corp. <1M - - Buffalo Erie 0 0 9,317 0 0 9,31781 TheStreet.com Inc 5M+ - - NYC New York 0 0 0 312,000 0 312,00082 Tire Conversion Technologies Inc <1M Troy Rensselaer 0 0 30,000 0 0 30,00083 Thumbplay 5M+ - - NYC New York 0 0 0 2,000,000 0 2,000,00084 UGO Networks Inc (Bla-Bla.com Inc) 5M+ NYC New York 0 2,800,100 0 0 0 2,800,10085 Veer Inc (Direct Stock, Inc) <1M - - NYC New York 0 1,250,000 0 0 0 1,250,00086 VisionPlay LLC 1-5M - - Latham Albany 3,981,313 0 250,000 0 0 4,231,31387 Worldo.com Inc <1M NYC New York 0 0 0 1,000,563 0 1,000,563

26,494,895 29,417,626 2,307,957 24,494,010 3,810,161 86,524,649

APPENDIX B14 of 4

A p p e n d i x B2

CAPCO Program Two Amounts Invested in Qualified Businesses

InitialAssets

1 7thOnline Inc <1M NYC New York 250,000 250,0002 Acquire Systems Inc (Phlair Inc) <1M NYC New York 150,000 150,0003 Activision, Inc. (Vicarious Visions Inc) <1M - - Troy Rensselaer 300,000 300,0004 Advanced Internet Design and Application <1M Buffalo Erie 430,000 430,0005 Allworx Corp. 1-5M Fairport Monroe 500,000 500,0006 American Scholar Inc 1-5M - - Bay Shore Suffolk 353,000 353,0007 Apollo Revue LLC 1-5M NYC New York 450,000 450,0008 Astro Electroplating Inc 1-5M - - Farmingdale Suffolk 360,000 360,0009 Blue Slate Ventures LLC <1M Albany Albany 400,000 400,000

Blue Slate Ventures LLC <1M - - Albany Albany 275,000 275,00010 Cambium Learning (New York) Inc. 5M+ - - NYC New York 836,826 836,82611 Capital Thinking Inc 5M+ NYC New York 250,000 250,000

Capital Thinking Inc 5M+ - - NYC New York 65,574 65,57412 DataSynapse, Inc. 1-5M NYC New York 58,333 58,33313 dB Design LLC <1M - - Johnson City Broome 65,000 65,00014 Direct Creations, LLC <1M NYC New York 1,000,000 1,000,00015 Engineered Products Group, LLC 5M+ - - Niagara Falls Niagara 550,000 550,000 1,100,00016 GarageTek Inc <1M Port Washington Nassau 700,000 700,00017 Global Miroge Inc / Spectracom Corp 1-5M - - Rochester Monroe 250,000 250,00018 Golden Goal, LLC 1-5M Fort Ann Washington 492,500 492,50019 GridApp Systems, Inc. 1-5M - - NYC New York 227,680 227,68020 Harvest Strategies, LLC <1M East Meadow Nassau 950,000 950,00021 Intelli-Tec Security Services LLC 1-5M Westbury Nassau 1,020,000 1,020,00022 Invision.com Inc 1-5M - - Commack Suffolk 700,000 700,000

Invision.com Inc 5M+ - - Commack Suffolk 200,000 200,00023 Kanoodle.com, Inc. 5M+ - - Getzville Erie 150,000 750,000 900,00024 LMB Sales Corp <1M Bayshore Suffolk 250,000 250,00025 M.R.B. Securities Corp. 5M+ - - NYC New York 750,000 750,000

EXPONENTIAL NYSBVF STONEHENGE WILSHIRE II TOTAL

As of December 31, 2009CAPCO PROGRAM TWO -- AMOUNTS INVESTED IN QUALIFIED BUSINESSES

LOCATION AMOUNT INVESTEDQUALIFIED BUSINESS

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APPENDIX B2

1 of 2

InitialAssets EXPONENTIAL NYSBVF STONEHENGE WILSHIRE II TOTAL

As of December 31, 2009CAPCO PROGRAM TWO -- AMOUNTS INVESTED IN QUALIFIED BUSINESSES

LOCATION AMOUNT INVESTEDQUALIFIED BUSINESS

City CountyEarly

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26 Medicom, LLC 1-5M - - Brooklyn Kings 375,000 375,00027 Medidata Solutions, Inc. 1-5M NYC New York 295,000 295,000

Medidata Solutions, Inc. 1-5M NYC New York 500,000 500,00028 ModelWire Inc <1M - - NYC New York 225,000 225,00029 New Monarch Machine Tool, Inc. 5M+ - - Cortland Cortland 262,000 262,000

New Monarch Machine Tool, Inc. 5M+ - - Cortland Cortland 80,000 80,00030 Nextidea Corp <1M Albany Albany 250,000 250,00031 Oxford Collection Agency 1-5M - - Melville Suffolk 175,000 175,00032 Parkview Health Services, LLC 5M+ - - Buffalo Erie 1,004,707 1,004,70733 PartSearch Technologies, Inc. 1-5M NYC New York 850,000 850,00034 PECO Pallet, Inc. 5M+ - - Yonkers Westchester 575,000 575,000

PECO Pallet, Inc. 5M+ - - Yonkers Westchester 100,000 100,00035 Ryder System, Inc. 5M+ Brooklyn Kings 102,000 1,050,000 1,152,00036 SchoolNet, Inc. 1-5M - - NYC New York 885,000 885,000

SchoolNet, Inc. 5M+ NYC New York 809,577 809,57737 SellJewelry Inc. <1M - - NYC New York 300,000 300,00038 Skyline Ambulance 1-5M New Rochelle Westchester 885,000 885,00039 Synacor, Inc. 1-5M Buffalo Erie 682,000 682,000

Synacor, Inc. 5M+ - - Buffalo Erie 250,000 250,00040 The Jacobs Press <1M - - Auburn Cayuga 380,000 380,00041 vault.com Inc 5M+ - - NYC New York 500,000 500,00042 VisionPlay LLC 5M+ - - Latham Albany 1,018,687 166,667 1,185,35443 Yahoo! Inc. 1-5M Albany Albany 30,000 30,000

6,807,867 2,088,667 5,900,151 6,807,866 3,430,000 25,034,551

APPENDIX B2

2 of 2

A p p e n d i x B3

CAPCO Program Three Amounts Invested in Qualified Businesses

1 1-800-Gift Certificate LLC <1M - - - - - - NYC New York 0 0 0 0 950,000 950,0002 7thOnline Inc 1-5M - - - - - - NYC New York 0 0 50,000 0 50,000

7thOnline Inc <1M - - - - NYC New York 0 0 12,500 0 12,5003 Acquire Systems Inc (Phlair Inc) <1M - - - - NYC New York 0 0 600,000 0 0 600,0004 Adirondack Plastics & Recycling, Inc. <1M - - - - Fort Edward Washington 125,000 0 0 0 0 125,0005 Advanced Internet Design and Application <1M - - - - Buffalo Erie 0 0 0 0 3,500,000 3,500,0006 Alfa Medical Equipment Specialists Inc <1M - - - - Hempstead Nassau 0 0 250,000 0 0 250,0007 Allworx Corp. 1-5M - - Fairport Monroe 475,000 0 0 0 0 475,0008 APF Group, Inc. 1-5M - - - - Mount Vernon Westchester 2,000,000 0 0 0 0 2,000,0009 Applied Robotics Inc 5M+ - - - - Glenville Schenectady 0 0 0 500,000 0 500,00010 Astro Electroplating Inc 1-5M - - - - Farmingdale Suffolk 0 0 0 2,852,500 0 2,852,50011 Autotask Corporation <1M - - - - East Greenbush Rensselaer 0 0 0 0 300,000 300,00012 Azimuth Alternative Assets, LLC <1M - - - - NYC New York 0 1,000,000 0 0 0 1,000,00013 Brooklyn Boat Company <1M - - - - Brooklyn Kings 0 0 2,419,788 0 0 2,419,78814 Burly Bear Network Inc 1-5M - - - - NYC New York 0 0 999,936 0 0 999,93615 Burst LLC <1M - - - - NYC New York 300,000 0 0 0 0 300,00016 Capital Stream, Inc. (Capital Thinking, Inc.) 5M+ - - - - - - NYC New York 0 0 185,000 0 0 185,00017 CEC Elevator Car Company 1-5M - - - - Long Island City Queens 0 0 250,000 0 0 250,00018 College Broadband Inc <1M - - - - NYC New York 0 0 100,000 0 0 100,00019 Commerce Systems Inc dba 2Scoot 1-5M - - Kingston Ulster 0 0 0 975,000 0 975,00020 Coresense, Inc <1M - - - - Saratoga Springs Saratoga 0 600,000 0 0 0 600,000

Coresense, Inc <1M - - - - Saratoga Springs Saratoga 0 150,000 0 0 0 150,000Coresense, Inc <1M - - - - Saratoga Springs Saratoga 0 1,458 0 0 0 1,458

21 Cortland Plastics International LLC 1-5M - - - - Cortland Cortland 0 0 0 3,600,000 0 3,600,00022 Critical Mention, Inc. <1M - - - - NYC New York 0 0 0 250,000 0 250,00023 DataSynapse, Inc. 1-5M - - - - NYC New York 0 0 222,790 97,816 0 320,606

DataSynapse, Inc. 1-5M - - - - - - NYC New York 0 0 93,891 25,000 0 118,89124 Direct Creations, LLC <1M - - - - - - NYC New York 0 0 0 0 708,333 708,33325 D'Lisi Food Systems, Inc. - - - - Rochester Monroe 0 500,000 0 1,150,000 0 1,650,000

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CAPCO PROGRAM THREE -- AMOUNTS INVESTED IN QUALIFIED BUSINESSESAs of December 31, 2009

TOTALQUALIFIED BUSINESS

LOCATION

City County ADVANTAGE ENHANCED

APPENDIX B31 of 4

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26 eBidenergy Inc <1M - - - - West Henrietta Monroe 0 550,000 0 0 0 550,00027 Ecoboard Holdings Inc 1-5M - - - - Farmingdale Suffolk 0 0 0 1,300,100 0 1,300,10028 Emergingmed.com, Inc. <1M - - - - NYC New York 1,000,000 0 0 0 0 1,000,00029 Engineered Products Group, LLC 5M+ - - - - Niagara Falls Niagara 1,000,000 0 0 1,045,810 0 2,045,810

Engineered Products Group, LLC 5M+ - - - - Niagara Falls Niagara 31,030 0 0 0 31,03030 Filco Carting Corp 1-5M - - - - Brooklyn Kings 0 0 0 2,085,000 0 2,085,000

Filco Carting Corp 1-5M - - - - Brooklyn Kings 0 0 0 250,000 0 250,000Filco Carting Corp 5M+ - - - - Brooklyn Kings 0 0 0 450,000 0 450,000Filco Carting Corp 5M+ - - - - Brooklyn Kings 0 0 0 600,000 0 600,000Filco Carting Corp 5M+ - - - - Brooklyn Kings 0 0 0 325,000 0 325,000Filco Carting Corp 5M+ - - - - Brooklyn Kings 0 0 0 400,000 0 400,000Filco Carting Corp 5M+ - - - - Brooklyn Kings 280,000 280,000

31 FinTrack Systems Corp <1M - - - - - - NYC New York 0 0 600,000 0 0 600,00032 Gaia Power technologies <1M - - Peekskill Putnam 0 0 250,000 0 0 250,00033 GarageTek Inc <1M - - Port Washington Nassau 0 0 0 25,000 0 25,00034 Golden Goal, LLC 1-5M - - Fort Ann Washington 1,245,313 0 0 0 0 1,245,313

Golden Goal, LLC 1-5M - - Fort Ann Washington 246,250 0 0 0 0 246,25035 GridApp Systems, Inc. <1M - - - - NYC New York 250,000 0 0 0 0 250,000

GridApp Systems, Inc. 1-5M - - - - - - NYC New York 750,000 0 0 0 0 750,000GridApp Systems, Inc. 1-5M - - - - - - NYC New York 735,891 0 0 0 0 735,891

36 Group 3 Design Corp <1M - - - - - - NYC New York 0 1,250,000 0 0 0 1,250,00037 GSD Productions Inc 1-5M - - - - West Hempstead Nassau 0 0 500,000 0 0 500,00028 Harlem Bowling Center, LLC <1M - - - - NYC New York 0 0 50,000 0 0 50,00039 Harvest Strategies, LLC <1M - - East Meadow Nassau 0 0 0 0 999,950 999,95040 HDS Cosmetics Lab Inc 1-5M - - - - Yonkers Westchester 0 0 300,000 0 0 300,000

HDS Cosmetics Lab Inc 1-5M - - - - Harrison Westchester 0 0 200,125 0 0 200,12541 Home Bistro Foods Inc. (Chestnut ) <1M - - - - Plattsburgh Clinton 0 0 750,000 0 0 750,000

Home Bistro Foods Inc. (Chestnut ) <1M - - - - Plattsburgh Clinton 0 0 225,750 0 0 225,750

APPENDIX B32 of 4

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42 Hornet Group, Inc. 1-5M - - - - Port Jervis Orange 0 0 0 3,750,100 0 3,750,10043 Intelli-Tec Security Services LLC 1-5M - - Westbury Nassau 710,000 0 0 0 0 710,00044 Invision.com Inc 1-5M - - - - Commack Suffolk 1,050,000 0 0 0 0 1,050,000

Invision.com Inc 5M+ - - - - Commack Suffolk 1,750,000 0 0 0 0 1,750,00045 JCR Business Services, LLC <1M - - - - Great River Suffolk 0 0 0 0 430,000 430,00046 Kanoodle.com, Inc. 5M+ - - - - Getzville Erie 900,000 0 0 1,000,000 0 1,900,00047 Karen's Fabulous Foods, Inc. <1M - - - - White Plains Westchester 0 600,000 0 0 0 600,00048 Kionix, Inc. 5M+ - - Ithaca Tompkins 1,050,000 1,125,000 0 0 0 2,175,000

Kionix, Inc. 5M+ - - Ithaca Tompkins 273,140 0 0 0 273,14049 Knovel Corporation <1M - - - - Norwich Chenango 0 0 1,000,000 525,000 0 1,525,000

Knovel Corporation <1M - - - - Norwich Chenango 0 0 140,000 0 140,00050 L&G Bakery Enterprises, Inc. 1-5M - - - - Rochester Monroe 0 0 0 2,000,000 0 2,000,00051 M.R.B. Securities Corp. 5M+ - - - - - - NYC New York 0 0 500,000 0 0 500,00052 Marketing Technology Solutions, Inc. 1-5M - - - - - - NYC New York 0 0 250,000 0 0 250,00053 Medicom, LLC 1-5M - - - - Brooklyn Kings 0 0 0 300,000 0 300,00054 Medidata Solutions Inc <1M - - - - NYC New York 0 0 0 1,655,000 0 1,655,000

Medidata Solutions Inc 5M+ - - - - - - NYC New York 0 0 0 6,227,938 0 6,227,93855 Metropolitan TLC Holdings Inc 5M+ - - - - - - NYC New York 0 0 0 2,211,723 0 2,211,72356 MilMar Food Group, LLC 1-5M - - - - Goshen Orange 0 700,000 0 0 0 700,00057 MR Holding Company, LLC 5M+ - - Goshen Orange 0 0 0 2,150,000 0 2,150,000

MR Holding Company, LLC 5M+ - - - - Goshen Orange 3,000,000 3,000,00058 New Monarch Machine Tool, Inc. 5M+ - - - - Cortland Cortland 1,970,000 0 0 0 0 1,970,000

New Monarch Machine Tool, Inc. 5M+ - - - - Cortland Cortland 170,000 0 0 0 0 170,00059 New York Business development Corp. 5M+ - - - - Albany Albany 0 0 3,000,000 0 0 3,000,000

New York Business development Corp. 5M+ - - - - Albany Albany 0 0 376,897 0 0 376,89760 Newtek Securities LLC (PPMLink LLC) <1M - - - - NYC New York 0 0 0 0 2,103,333 2,103,33361 Oasis Children's Services <1M - - - - Brooklyn Kings 0 0 625,000 0 0 625,000

Oasis Children's Services <1M - - - - Brooklyn Kings 0 0 650,000 0 0 650,000

APPENDIX B33 of 4

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62 Oxford Collection Agency 1-5M - - - - Melville Suffolk 0 0 0 3,725,000 0 3,725,00063 Parkview Health Services, LLC 5M+ - - - - Buffalo Erie 0 0 0 1,665,581 0 1,665,581

Parkview Health Services, LLC 5M+ - - - - Buffalo Erie 0 0 0 386,620 0 386,62064 Partsearch Technologies Inc 1-5M - - - - NYC New York 0 1,185,185 0 0 0 1,185,185

Partsearch Technologies Inc 1-5M - - - - - - NYC New York 0 150,000 0 0 0 150,00065 PECO Pallet, Inc. 5M+ - - - - Yonkers Westchester 3,000,000 0 0 3,000,000 0 6,000,000

PECO Pallet, Inc. 5M+ - - - - Yonkers Westchester 100,000 0 0 238,982 0 338,982PECO Pallet, Inc. 5M+ - - - - Yonkers Westchester 700,000 0 0 334,110 0 1,034,110

66 Picasso Lighting Inc 1-5M - - - - Brooklyn Kings 0 0 300,000 0 0 300,00067 Production Designer LLC dba Wet Electrics <1M - - - - NYC New York 0 0 750,000 0 0 750,00068 Rapid Response Monitoring Services Inc 1-5M - - - - Syracuse Onondaga 3,000,000 0 0 0 0 3,000,00069 ReVal.com Inc 1-5M - - - - - - NYC New York 0 0 1,000,000 0 0 1,000,00070 Sasun LLC 1-5M - - - - Brooklyn Kings 0 0 0 1,000,000 0 1,000,00071 Scarsdale Security Systems Inc 1-5M - - - - Scarsdale Westchester 3,000,000 0 0 0 0 3,000,00072 SchoolNet, Inc. 5M+ - - - - NYC New York 0 0 1,100,000 0 0 1,100,00073 SellJewelry Inc. <1M - - - - - - NYC New York 0 0 550,000 0 0 550,00074 Shake-N-Go Fashions Inc 5M+ - - - - College Point Queens 0 0 500,000 0 0 500,00075 Small Business Lending, Inc. <1M - - - - NYC New York 0 0 0 0 2,000,000 2,000,00076 Solbright Inc 1-5M - - - - NYC New York 0 0 537,000 0 0 537,00077 Synacor, Inc. 1-5M - - Buffalo Erie 68,000 0 0 0 0 68,000

Synacor, Inc. 1-5M - - Buffalo Erie 1,325,000 0 0 0 0 1,325,000Synacor, Inc. 5M+ - - - - Buffalo Erie 599,997 0 0 0 0 599,997

78 Tayor Recycling Facility LLC (TKM Materials LL <1M - - Middletown Orange 0 0 250,000 0 0 250,00079 The Metropolitan Switchboard Co Inc <1M - - - - Amityville Suffolk 0 0 0 1,500,000 0 1,500,00080 Transworld Business Brokers of New York <1M - - - - Great River Suffolk 0 0 0 0 3,500,667 3,500,66781 Universal Processing Services LLC <1M - - - - NYC New York 0 0 0 0 3,600,000 3,600,000

Universal Processing Services LLC <1M - - - - - - NYC New York 0 0 0 0 60,000 60,00027,824,621 7,811,643 19,436,177 51,033,780 18,152,283 124,258,504

APPENDIX B34 of 4

A p p e n d i x B4

CAPCO Program Four Amounts Invested in Qualified Businesses

1 Allworx Corp. 1-5M - - - - Fairport Monroe 800,000 960,000 0 0 0 0 1,760,000Allworx Corp. 1-5M - - - - Fairport Monroe 300,000 162,383 0 0 0 0 462,383Allworx Corp. 1-5M - - - - Fairport Monroe 108,256 0 0 0 0 108,256Allworx Corp. 1-5M - - - - Fairport Monroe 151,120 0 0 0 0 151,120

2 APF Group, Inc. 5M+ - - - - - - - - Mount Vernon Westchester 263,919 0 0 0 0 0 263,9193 Autotask Corporation 1-5M - - - - - - - - East Greenbush Rensselaer 0 0 0 0 0 300,000 300,0004 BinOptics Corporation 5M+ - - - - - - Ithaca Tompkins 0 250,000 0 0 0 0 250,0005 CDS Business Services, Inc. 5M+ - - - - - - - - West Hempstead Nassau 0 0 0 0 0 750,000 750,0006 City Winery New York, LLC 1-5M - - - - - - - - - - NYC New York 0 400,000 0 0 0 0 400,0007 Coresense, Inc. 1-5M - - - - - - Saratoga Springs Saratoga 0 400,000 0 0 200,000 0 600,000

Coresense, Inc. 1-5M - - - - - - Saratoga Springs Saratoga 0 250,000 0 0 0 250,000Coresense, Inc. 1-5M - - - - - - Saratoga Springs Saratoga 0 111,346 0 0 0 111,346Coresense, Inc. 1-5M - - - - - - Saratoga Springs Saratoga 0 500,000 0 0 0 500,000Coresense, Inc. 1-5M - - - - - - Saratoga Springs Saratoga 0 200,000 0 0 0 200,000

8 Cortland Plastics International 1-5M - - - - - - - - Cortland Cortland 0 0 0 400,000 0 0 400,0009 Critical Mention, Inc. <1M - - - - - - NYC New York 0 0 0 151,612 0 0 151,612

10 Engineered Products Group, LLC 5M+ - - - - - - - - Niagara Falls Niagara 0 0 0 650,000 0 0 650,00011 Filco Carting Corp. 5M+ - - - - - - - - Brooklyn Kings 0 0 0 250,000 0 0 250,000

Filco Carting Corp. 5M+ - - - - - - - - Brooklyn Kings 0 0 0 175,000 0 0 175,000Filco Carting Corp. 5M+ - - - - - - - - Brooklyn Kings 0 0 0 500,000 0 0 500,000

12 Flower Hill Advisers, LLC <1M - - - - - - - - Great River Suffolk 0 0 0 0 0 700,000 700,00013 Golden Goal, LLC 1-5M - - - - - - Fort Ann Washington 738,750 0 0 0 0 0 738,750

Golden Goal, LLC 1-5M - - - - - - Fort Ann Washington 246,250 0 0 0 0 0 246,25014 GridApp Systems, Inc. <1M - - - - - - NYC New York 1,000,000 0 0 0 0 0 1,000,000

GridApp Systems, Inc. 1-5M - - - - - - - - NYC New York 300,000 0 0 0 0 0 300,00015 Harlem Bowling Center, LLC <1M - - - - - - - - NYC New York 0 0 500,000 0 0 0 500,00016 Hotel Technology Solutions, Inc. 1-5M - - - - Amherst Erie 0 157,500 0 502,000 0 0 659,500

Hotel Technology Solutions, Inc. 1-5M - - - - - - Buffalo Erie 0 539,312 0 280,000 0 0 819,31217 i-Cardiac Technologies, Inc. <1M - - Rochester Monroe 223,716 0 0 300,000 0 0 523,716

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APPENDIX B41 of 3

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18 Infinia Group LLC <1M - - - - - - - - NYC New York 0 300,000 0 0 0 0 300,000Infinia Group LLC <1M - - - - - - - - - - NYC New York 0 126,000 0 0 0 0 126,000Infinia Group LLC <1M - - - - - - - - - - NYC New York 0 300,000 0 0 0 0 300,000Infinia Group LLC <1M - - - - - - - - - - NYC New York 0 100,000 0 0 0 0 100,000

19 Intra-Cellular Therapies, Inc. 5M+ - - - - - - NYC New York 0 0 204,964 0 0 0 204,96420 JCR Business Services, LLC <1M - - - - - - - - Great River Suffolk 0 0 0 0 0 750,000 750,00021 Kanoodle.com, Inc. 5M+ - - - - - - - - Getzville Erie 1,100,000 0 0 0 0 0 1,100,00022 Kionix, Inc. 5M+ - - - - Ithaca Tompkins 332,523 292,827 0 0 0 0 625,350

Kionix, Inc. 5M+ - - - - Ithaca Tompkins 1,500,000 0 0 0 0 1,500,00023 Knovel Corporation 1-5M - - - - - - Norwich Chenango 0 0 0 100,000 0 0 100,000

Knovel Corporation 1-5M - - - - - - Norwich Chenango 0 0 0 1,000,000 0 0 1,000,00024 Lumetrics, Inc. <1M - - - - West Henrietta Monroe 0 0 0 300,000 610,000 0 910,000

Lumetrics, Inc. <1M - - - - - - West Henrietta Monroe 0 0 0 68,000 0 68,00025 Medicom, LLC 1-5M - - - - - - - - Brooklyn Kings 0 0 0 250,000 0 0 250,00026 Medidata Solutions, Inc. 5M+ - - - - - - NYC New York 0 0 0 1,000,000 0 0 1,000,000

Medidata Solutions, Inc. 5M+ - - - - - - - - NYC New York 0 0 0 997,463 0 0 997,46327 Mezmeriz, Inc <1M - - Ithaca Tompkins 150,000 0 0 0 0 0 150,00028 Mystique Brands, LLC 1-5M - - - - - - - - NYC New York 0 870,482 0 0 0 0 870,482

Mystique Brands, LLC 1-5M - - - - - - - - NYC New York 0 52,086 0 0 0 0 52,086Mystique Brands, LLC 1-5M - - - - - - - - NYC New York 0 52,086 0 0 0 0 52,086Mystique Brands, LLC 1-5M - - - - - - - - NYC New York 0 28,467 0 0 0 0 28,467

29 NANIRX Therapeutics Inc. 1-5M - - - - - - NYC New York 0 0 375,000 0 0 0 375,00030 New Monarch Machine Tool, Inc. 5M+ - - - - - - - - Cortland Cortland 900,000 0 0 0 0 0 900,000

New Monarch Machine Tool, Inc. 5M+ - - - - - - - - Cortland Cortland 33,750 0 0 0 0 0 33,75031 New York Information Services Corp. <1M - - - - New Rochelle Westchester 0 0 0 0 600,000 0 600,00032 Niagara Dispensing Technologies, LL <1M - - - - Amherst Erie 850,000 0 0 0 0 0 850,00033 NYC Seed, LLC <1M - - - - - - Brooklyn Kings 0 0 550,000 0 0 0 550,00034 Outside.in Inc. <1M - - - - Brooklyn Kings 0 0 653,309 0 0 0 653,309

Outside.in Inc. 1-5M - - - - Brooklyn Kings 250,000 250,000

APPENDIX B42 of 3

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35 OwnEnergy, Inc. 1-5M - - - - - - Brooklyn Kings 0 0 225,000 0 0 0 225,00036 Parkview Health Services, LLC 5M+ - - - - - - - - Buffalo Erie 0 0 0 0 640,000 0 640,000

Parkview Health Services, LLC 5M+ - - - - - - - - Buffalo Erie 0 0 0 0 37,710 0 37,71037 PartSearch Technologies, Inc. 5M+ - - - - - - - - NYC New York 0 740,000 1,000,000 0 0 0 1,740,00038 PECO Pallet, Inc. 5M+ - - - - - - - - Yonkers Westchester 429,823 0 0 0 0 0 429,823

PECO Pallet, Inc. 5M+ - - - - - - - - Yonkers Westchester 579,155 0 0 0 0 0 579,15539 Pixfusion <1M - - - - - - - - NYC New York 0 0 0 750,000 0 0 750,000

Pixfusion 1-5M - - - - - - - - NYC New York 0 0 0 85,000 0 0 85,00040 PowerChow, LLC (d/b/a NuKitchen) <1M - - - - - - - - Long Island City Queens 0 0 750,000 0 0 0 750,000

PowerChow, LLC (d/b/a NuKitchen) 1-5M - - - - - - Long Island City Queens 0 0 350,000 0 0 0 350,00041 SchoolNet, Inc. 5M+ - - - - - - NYC New York 0 0 1,900,000 0 0 0 1,900,00042 Soft Sight-Threadsmith <1M - - - - - - Endwell Broome 285,000 0 0 0 0 0 285,00043 Soms Technologies, LLC <1M - - Valhalla Westchester 250,000 0 0 0 0 0 250,00044 Synacor, Inc. 5M+ - - - - - - - - Buffalo Erie 500,000 0 0 0 0 0 500,00045 The SmartPill Corp. <1M - - - - - - Buffalo Erie 0 0 0 0 0 125,000 125,00046 TradeComet.com, LLC <1M - - - - - - - - NYC New York 0 0 0 0 100,000 0 100,000

TradeComet.com, LLC <1M - - - - - - - - NYC New York 0 0 0 0 500,000 0 500,000TradeComet.com, LLC <1M - - - - - - - - NYC New York 0 0 0 0 15,748 0 15,748

47 Verde Energy USA, Inc. <1M - - - - - - Yonkers Westchester 0 0 0 0 677,000 0 677,00048 Webenergy.Net, Inc. 1-5M - - - - - - NYC New York 0 0 630,000 0 0 0 630,000

Webenergy.Net, Inc. 5M+ - - - - - - NYC New York 150,000 150,00049 Word World, LLC <1M - - - - - - NYC New York 0 900,000 0 0 0 0 900,00050 Xtreme Mobile, Inc. <1M - - - - - - - - White Plains Westchester 0 541,278 0 0 0 0 541,278

Xtreme Mobile, Inc. <1M - - - - - - White Plains Westchester 0 600,000 0 0 0 0 600,000Xtreme Mobile, Inc. <1M - - - - - - White Plains Westchester 0 50,000 0 0 0 0 50,000Xtreme Mobile, Inc. <1M - - - - - - White Plains Westchester 0 175,000 0 0 0 0 175,000Xtreme Mobile, Inc. <1M - - - - - - White Plains Westchester 0 75,000 0 0 0 0 75,000Xtreme Mobile, Inc. <1M - - - - - - - - White Plains Westchester 0 300,000 0 0 0 0 300,000

51 YellowJacket Software, Inc. 1-5M - - - - - - NYC New York 0 0 375,000 0 0 0 375,000YellowJacket Software, Inc. 1-5M - - - - - - NYC New York 0 0 50,000 0 0 0 50,000

9,282,886 11,193,143 7,963,272 7,759,075 3,380,458 2,625,000 42,203,834

APPENDIX B43 of 3

A p p e n d i x B5

CAPCO Program Five Amounts Invested in Qualified Businesses

1 Adirondack Digital Imaging Sys 1-5M - - - - - - Keeseville Essex 0 250,000 0 0 0 0 0 250,0002 Allworx Corp. 1-5M - - - - Fairport Monroe 200,000 0 1,040,000 0 0 0 0 1,240,000

Allworx Corp. 1-5M - - - - Fairport Monroe 501,120 0 137,617 0 0 0 0 638,737Allworx Corp. 1-5M - - - - Fairport Monroe 0 91,744 0 0 0 0 91,744Allworx Corp. 1-5M - - - - - - Fairport Monroe 0 100,000 0 0 0 0 100,000

3 Autotask Corporation 1-5M - - - - - - East Greenbush Rensselaer 0 0 0 0 0 0 500,000 500,0004 BinOptics Corporation 5M+ - - - - - - Ithaca Tompkins 0 0 250,000 0 0 0 0 250,0005 Brooklyn Boro Film Company <1M - - - - - - Brooklyn Kings 0 915,000 0 0 0 0 0 915,0006 CDS Business Services, Inc. 5M+ - - - - - - - - West Hempstead Nassau 0 0 0 0 0 0 1,300,000 1,300,0007 Chapman Instruments Inc <1M - - - - Rochester Monroe 594,000 0 0 0 0 0 0 594,0008 City Winery New York, LLC 1-5M - - - - - - - - - - NYC New York 0 0 350,000 0 0 0 0 350,0009 Coresense, Inc. 1-5M - - - - - - Saratoga Springs Saratoga 0 0 390,000 0 0 0 0 390,000

Coresense, Inc. 1-5M - - - - - - Saratoga Springs Saratoga 0 0 200,000 0 0 0 0 200,000Coresense, Inc. 1-5M - - - - - - Saratoga Springs Saratoga 0 0 200,000 0 0 0 0 200,000Coresense, Inc. 1-5M - - - - - - Saratoga Springs Saratoga 0 0 60,000 0 0 0 0 60,000Coresense, Inc. 1-5M - - - - - - Saratoga Springs Saratoga 40,000 40,000Coresense, Inc. 1-5M - - - - - - Saratoga Springs Saratoga 120,000 120,000

10 DataSynapse, Inc. 5M+ - - - - - - NYC New York 0 0 0 0 500,000 0 0 500,000DataSynapse, Inc. 5M+ - - - - - - NYC New York 0 0 0 0 125,000 0 0 125,000

11 Dogmatic Products, Inc. <1M - - - - Brooklyn Kings 0 150,000 0 0 0 0 0 150,000Dogmatic Products, Inc. <1M - - - - Brooklyn Kings 100,000 100,000

12 Engineered Products Group 5M+ - - - - - - - - Niagara Falls Niagara 0 0 0 0 200,000 0 0 200,00013 Filco Carting 5M+ - - - - - - - - Brooklyn Kings 0 0 0 0 420,000 0 0 420,00014 Flower Hill Advisers, LLC <1M - - - - - - - - Great River Suffolk 0 0 0 0 0 0 1,300,000 1,300,00015 Golden Goal, LLC 1-5M - - - - - - Fort Ann Washington 747,188 0 0 0 0 0 0 747,188

Golden Goal, LLC 1-5M - - - - - - Fort Ann Washington 246,250 0 0 0 0 0 0 246,250GridApp Systems, Inc. 1-5M - - - - - - - - NYC New York 500,000 0 0 0 0 0 0 500,000GridApp Systems, Inc. 1-5M - - - - - - - - NYC New York 400,000 0 0 0 0 0 0 400,000GridApp Systems, Inc. <1M - - - - - - - - NYC New York 50,000 50,000

STONEHENGE WHITCAP II WILSHIRE VAdvantage II AEGIS ENHANCED III NYSBVF IIISta

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16 Hotel Technology Solutions, Inc. 1-5M - - - - - - - - Amherst Erie 0 0 342,500 0 298,000 0 0 640,500Hotel Technology Solutions, Inc. 1-5M - - - - - - Amherst Erie 0 0 402,000 0 198,326 0 0 600,326Hotel Technology Solutions, Inc. 1-5M - - - - - - Amherst Erie 0 0 220,374 0 195,453 0 0 415,827Hotel Technology Solutions, Inc. 1-5M - - - - - - Amherst Erie 88,740 118,057 206,797Hotel Technology Solutions, Inc. 1-5M - - - - - - Amherst Erie 133,110 78,705 211,815

17 i-Cardiac Technologies, Inc. <1M - - - - Rochester Monroe 1,000,000 0 0 0 300,000 0 0 1,300,000i-Cardiac Technologies, Inc. 5M+ - - - - Rochester Monroe 0 0 0 154,229 0 0 154,229

18 Infinia Group LLC <1M - - - - - - - - - - NYC New York 0 0 274,000 0 0 0 0 274,000Infinia Group LLC <1M - - - - - - - - - - NYC New York 0 0 100,000 0 0 0 0 100,000Infinia Group LLC <1M - - - - - - - - - - NYC New York 0 0 200,000 0 0 0 0 200,000

19 Intra-Cellular Therapies, Inc. 5M+ - - - - - - NYC New York 0 0 0 500,000 0 0 0 500,000Intra-Cellular Therapies, Inc. 5M+ - - - - - - NYC New York 0 0 0 300,000 0 0 0 300,000

20 Invision.com, Inc. 5M+ - - - - - - - - Commack Suffolk 500,000 0 0 0 0 0 0 500,00021 Kionix, Inc. 5M+ - - - - Ithaca Tompkins 305,515 0 1,000,000 0 0 0 0 1,305,51522 Knovel Corporation 1-5M - - - - - - Norwich Chenango 0 0 0 0 1,000,000 0 0 1,000,000

Knovel Corporation 5M+ - - - - - - Norwich Chenango 0 0 0 0 112,815 0 0 112,81523 Lumetrics, Inc. <1M - - - - West Henrietta Monroe 0 0 0 0 182,000 0 0 182,00024 Medidata Solutions, Inc. 5M+ - - - - - - NYC New York 0 0 0 0 1,000,000 0 0 1,000,000

Medidata Solutions, Inc. 5M+ - - - - - - - - NYC New York 0 0 0 0 714,600 0 0 714,60025 Mystique Brands, LLC 1-5M - - - - - - - - NYC New York 0 0 1,129,518 0 0 0 0 1,129,518

Mystique Brands, LLC 1-5M - - - - - - - - NYC New York 0 0 67,585 0 0 0 0 67,585Mystique Brands, LLC 1-5M - - - - - - - - NYC New York 0 0 67,585 0 0 0 0 67,585Mystique Brands, LLC 1-5M - - - - - - - - NYC New York 0 0 36,938 0 0 0 0 36,938Mystique Brands, LLC 1-5M - - - - - - - - NYC New York 0 0 82,800 0 0 0 0 82,800Mystique Brands, LLC 1-5M - - - - - - - - NYC New York 59,799 59,799Mystique Brands, LLC 1-5M - - - - - - - - NYC New York 8,850 8,850

26 NANIRX Therapeutics Inc. 1-5M - - - - - - NYC New York 0 0 0 187,500 0 0 0 187,50027 New York Information Services <1M - - - - New Rochelle Westchester 0 0 0 0 0 600,000 0 600,00028 Niagara Dispensing Tech <1M - - - - - - - - Amherst Erie 150,000 0 0 0 0 0 0 150,00029 NYC Seed LLC 1-5M - - - - - - Brooklyn Kings 0 0 0 487,000 0 0 0 487,00030 Outside.in Inc. 1-5M - - - - Brooklyn Kings 0 0 0 200,000 0 0 0 200,000

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31 OwnEnergy, Inc. 1-5M - - - - - - Brooklyn Kings 0 0 0 225,000 0 0 0 225,00032 Parkview Health Services, LLC 5M+ - - - - - - - - Buffalo Erie 0 0 0 0 150,000 760,000 0 910,000

Parkview Health Services, LLC 5M+ - - - - - - - - Buffalo Erie 0 0 0 0 44,084 0 44,08433 PartSearch Technologies, Inc. 5M+ - - - - - - - - Kingston Ulster 0 0 785,000 0 0 0 0 785,00034 Pixfusion 1-5M - - - - - - - - NYC New York 0 0 0 0 275,000 0 0 275,000

Pixfusion 1-5M - - - - - - - - NYC New York 0 0 0 0 15,000 0 0 15,000Pixfusion 1-5M - - - - - - - - NYC New York 0 0 0 0 90,000 0 0 90,000

35 Polar Industries, Inc. <1M - - - - - - New Windsor Orange 0 500,000 0 0 0 0 0 500,00036 Resolute Digital, LLC <1M - - - - - - NYC New York 0 0 0 0 0 671,000 0 671,00037 Rosenfeld Advisors, LLC <1M - - - - - - - - Brooklyn Kings 0 300,000 0 0 0 0 0 300,00038 SchoolNet, Inc. 5M+ - - - - - - NYC New York 0 0 0 190,000 0 0 0 190,00039 SLM Holdings Inc. <1M - - - - Melville Suffolk 0 500,000 0 0 0 0 0 500,00040 Soft Sight, Inc <1M - - - - Vestal Broome 500,000 0 0 0 0 0 0 500,000

Soft Sight, Inc <1M - - - - - - Endwell Broome 415,000 415,00041 Synacor, Inc. 5M+ - - - - - - - - Buffalo Erie 1,500,004 0 0 0 0 0 0 1,500,00442 TAKKLE, Inc. <1M - - - - - - NYC New York 0 0 0 419,999 0 0 0 419,99943 The SmartPill Corp. <1M - - - - - - Buffalo Erie 0 0 0 0 0 0 1,250,000 1,250,00044 TradeComet.com, LLC <1M - - - - - - - - NYC New York 0 0 0 0 0 804,000 0 804,00045 Vincent Partnership Inc. <1M - - - - - - NYC New York 0 300,000 0 0 0 0 0 300,000

Vincent Partnership Inc. <1M - - - - - - NYC New York 0 600,000 0 0 0 0 0 600,00046 Webenergy.Net, Inc. 1-5M - - - - - - NYC New York 0 0 0 570,000 0 0 0 570,00047 Xtreme Mobile, Inc. <1M - - - - - - - - White Plains Westchester 0 0 458,722 0 0 0 0 458,722

Xtreme Mobile, Inc. <1M - - - - - - - - White Plains Westchester 0 0 50,000 0 0 0 0 50,000Xtreme Mobile, Inc. <1M - - - - - - - - White Plains Westchester 0 0 50,000 0 0 0 0 50,000Xtreme Mobile, Inc. <1M - - - - - - - - White Plains Westchester 0 0 75,000 0 0 0 0 75,000Xtreme Mobile, Inc. <1M - - - - - - - - White Plains Westchester 0 0 30,000 0 0 0 0 30,000

7,609,077 3,615,000 8,641,882 3,079,499 6,127,185 2,879,084 4,350,000 36,301,726

APPENDIX B53 of 3

A p p e n d i x C

CAPCO Programs One, Two, Three, Four, and Five Combined Characteristics of Qualified Businesses

NY TOTAL1 1-800-Gift Certificate LLC 1 3 <1M NYC New York 514199 Telephone Sales 0 0 * * * * *2 1Call4All LLC dba Biazo 1 <1M NYC New York 514191 Online information services (Internet Relocation Portal) 5 5 0 0 0 (5) (5)3 7thOnline Inc 1 2 3 <1M NYC New York 514210 Data Processing Services 0 0 0 15 15 15 15 4 Acquire Systems Inc (Phlair Inc) 2 3 <1M Brewster Putnam 541512 Computer Systems Design services 25 25 * * * * *5 Actiant Inc (Electronic Sales Systems

Inc)1 <1M Kingston Ulster 541512 Computer Systems Design 8 9 0 0 0 (8) (9)

6 Activision, Inc. (Vicarious Visions 2 <1M Brooklyn Kings 541990 Software Game Developer 60 60 * * * * *7 Adirondack Digital Imaging Systems, 5 1-5M NYC New York 339900 Manufacturing - Optical Equipment 4 4 * 6 6 * *8 Adirondack Plastics & Recycling, Inc. 3 <1M Melville Suffolk 421930 Recyclable Material Wholesalers 7 7 0 0 0 (7) (7)9 Advanced Internet Design and 1 2 3 <1M Rensselaer Rensselaer 541519 Other computer related services 8 8 * * * * *

10 Alfa Medical Equipment Specialists 3 <1M NYC New York 339113 Sterilizer Manufacturer 23 23 0 5 5 (18) (18)11 Alloy Inc. (InSite Advertising Inc) 1 <1M Saratoga Saratoga 541850 Advertising Services 0 0 0 0 0 0 0 12 Allworx Corp. 1 2 3 4 5 1-5M NYC New York 334210 Telephone Apparatus Manufacturing 0 0 0 0 0 0 0 13 American Scholar Inc 1 2 1-5M NYC New York 421490 School equipment and supplies wholesaling 23 23 * * * * *14 AngelSociety LLC 1 <1M NYC New York 54199 Network for Angel Investors 2 2 0 0 0 (2) (2)15 APF Group, Inc. 3 4 1-5M Ithaca Tompkins 339999 Frames, mirror and picture, all materials, manufacturing 73 80 1 88 89 15 9 16 Apollo Revue LLC 2 1-5M Bayshore Suffolk 711110 Musical theater productions, live 50 50 0 0 0 (50) (50)17 Applied Robotics Inc 1 3 5M+ West

HempsteadNassau 333298 All other industrial machinery mfg (Robotic Equipment) 62 66 * * * * *

18 Astro Electroplating Inc 2 3 1-5M Great River Suffolk 332813 Electroplating, Plating, Polishing, Anodizing and Coloring 70 70 * * * * *19 Autotask Corporation 1 3 4 5 <1M Long Island Queens 541519 Other computer related services 13 13 * * * * *20 Azimuth Alternative Assets, LLC 3 <1M Goshen Orange 522320 Financial Transactions Processing, Reserve and Clearinghouse

Activities9 9 * * * * *

21 BinOptics Corporation 4 5 5M+ Ithaca Tompkins 334413 Semiconductors and Related Devices 36 42 7 35 42 (1) 0 22 Blue Slate Ventures, LLC 1 2 <1M Albany Albany 541611 Administrative Management and General Management Conulting

Services12 12 * * * * *

23 Broadway Digital Entertainment Inc 1 5M+ NYC New York 513200 Cable Network/Program Distribution 5 6 0 0 0 (5) (6)24 Brooklyn Boat Company 3 <1M NYC New York 483212 Inland Water Passenger Transportation 2 2 * * * * *25 Brooklyn Boro Film Company, LLC 5 <1M Latham Albany 512100 Production/Media Production 2 2 0 2 2 0 0 26 Burly Bear Network Inc 3 1-5M Goshen Orange 4841 Cable Networks 42 45 0 0 0 (42) (45)27 Burst LLC 3 <1M NYC New York 512240 Sound recording studios 1 1 0 0 0 (1) (1)28 C3i Inc 1 1-5M NYC New York 61171 Computer Sales Support & Consulting 84 84 865 0 865 (84) 781 29 Cambium Learning (New York) Inc. 1 2 5M+ NYC New York 51113 Book Publishers 75 93 * * * * *30 Capital Stream, Inc. (Capital 2 3 5M+ Getzville Erie 541511 Custom Computer Programming Services 0 0 0 0 0 0 0

PROGRAM

CHARACTERISTICS OF QUALIFIED BUSINESSESCAPCO PROGRAMS 1, 2, 3, 4 & 5 COMBINED

As of December 31, 2009

QUALIFIED BUSINESSSectorNAICS

NO.

INITIAL ASSETS City Outside NY

Investment

NO. OF EMPLOYEES IN THE QUALIFIED BUSINESS

InvestmentTOTAL

LOCATION

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Since Initial Inc (Dec)As Of 12/31/09At InitialINDUSTRY

NYCounty TOTAL

APPENDIX C1 of 6

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31 CDS Business Services, Inc. 4 5 5M+ College Point Queens 522298 All Other Non Depository Credit Intermediation 0 0 1 13 14 13 14 32 CEC Elevator Car Company 3 1-5M NYC New York 333921 Elevators, Manufacturing 66 66 0 54 54 (12) (12)33 Cedric Kushner Promotions Ltd 1 1-5M NYC New York 71132 Sports Promotion Business 9 10 * * * * *34 Chapman Instruments Inc 1 5 <1M Johnson City Broome 334515 Measuring Instruments and meters, electric, manufacturing

(Optical instruments and lenses)24 29 0 2 2 (22) (27)

35 Chestnut Direct Inc.dba Home Bistro 1 <1M NYC New York 445299 All other specialty food stores 1 1 0 0 0 (1) (1)36 City Street Solutions, Inc. 1 <1M Rochester Monroe 235210 Paiting and Wall Covering Contractors 5 5 0 0 0 (5) (5)37 City Winery New York, LLC 4 5 1-5M NYC New York 312130 Wineries 4 4 0 60 60 56 56 38 Click Things Inc (Hotspace Inc) 1 5M+ Brooklyn Kings 541512 Computer Related Services 8 8 0 0 0 (8) (8)39 College Broadband Inc 3 <1M Cortland Cortland 511140 On-line Publisher 1 1 0 0 0 (1) (1)40 Comet Systems Inc 1 <1M NYC New York 541511 Applications software programming services, custom computer 40 40 0 0 0 (40) (40)

41 Commerce Systems Inc dba 2Scoot 1 3 1-5M Watermill Suffolk 522320 Electronic Financial Payment Systems 10 11 * * * * *42 Coresense, Inc. 3 4 5 1-5M Albany Albany 423430 Software, computer, packaged, merchant, wholesalers 11 11 0 29 29 18 18 43 Cortland Plastics International LLC 3 4 1-5M Cortland Cortland 326160 Plastic Bottle Manufacturing 35 35 0 36 36 1 1 44 CreditEx Inc 1 <1M West Monroe 523999 Services Allied with the Exchange of Securities 5 5 0 0 0 (5) (5)45 Critical Mention, Inc. 1 3 4 <1M Rochester Monroe 511210 Software Publishers 9 9 2 35 37 26 28 46 DataSynapse, Inc. 1 2 3 5 1-5M NYC New York 541511 Custom Computer Programming Services 27 28 0 0 0 (27) (28)47 dB Design LLC 1 2 <1M Brooklyn Kings 54133 Designs & sells Radar Calibration Equip. for use by Law

Enforcement agencies1 1 * * * * *

48 Direct Creations, LLC 1 2 3 <1M Tarrytown Westchester 541613 Direct response marketing 2 2 * * * * *49 D'Lisi Food Systems, Inc. 3 1-5M New Westchester 311412 Frozen specialty food manufacturing 32 34 * * * * *50 Dogmatic Products, Inc. 5 <1M NYC New York 33999 Misc Manufacturing 11 11 1 8 9 (3) (2)51 EasyLink Services Inc (Mail.com Inc) 1 5M+ Farmingdale Suffolk 541512 Computer Systems Design Services 90 95 * * * * *52 eBidenergy Inc 3 <1M NYC New York 54162 Environmental Consulting Services 12 12 * * * * *53 Ecoboard Holdings Inc 3 1-5M Albany Albany 326199 Plastic Products Manufacturing 31 35 * * * * *54 Edgehill Technologies LLC 1 <1M Syracuse Onondaga 334519 Measuring Controlling Device (Electronic Timing Labels) 1 1 * * * * *55 Emergingmed.com, Inc. 3 <1M Buffalo Erie 516110 Internet Publishing and Broadcasting-Medical Journal and

Periodical Publishers, Exclusively on Internet10 10 7 16 23 6 13

56 Engineered Products Group, LLC 1 2 3 4 5 5M+ Troy Rensselaer 332410 Power Boiler and Heat Exchanger Manufacturing 74 75 2 120 122 46 47 57 eOneGlobal 1 <1M NYC New York 611000 Education services 0 0 0 0 0 0 0 58 Filco Carting Corp. 3 4 5 1-5M Ithaca Tompkins 562111 Solid Waste and Recyclable Collection 47 48 1 66 67 19 19 59 FinTrack Systems Corp 1 3 <1M Plattsburgh Clinton 541512 Computer Software Development, custom 9 9 0 0 0 (9) (9)60 Flower Hill Advisers, LLC 4 5 <1M New Westchester 523930 Investment Advice 0 0 * 0 0 * *

APPENDIX C2 of 6

NY TOTAL

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NO.


Investment


InvestmentTOTAL

LOCATION

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NYCounty TOTAL

61 Gaia Power technologies 3 <1M Brooklyn Kings 335999 Electronic equipment Manufacturing 3 3 0 0 0 (3) (3)62 GarageTek Inc 1 2 3 <1M Keeseville Essex 326199 All Other Plastic Product Manufacturing 2 2 0 8 8 6 6 63 Global Miroge Inc / Spectracom Corp 2 1-5M West

HenriettaMonroe 3698 Manufacturer of syncronized time & frequency products 32 32 3 49 52 17 20

64 Globecon Group Ltd 1 1-5M Niagara Falls Niagara 611000 Education services 35 35 0 0 0 (35) (35)65 Golden Goal, LLC 1 2 3 4 5 1-5M Fort Edward Washington 713900 Other Amusment and Recreation Industries 0 0 0 0 0 0 0 66 Gourmet Plate Inc (Fulton Street 1 <1M NYC New York 454110 Non-Store Retail - Electronic Shopping 19 20 * 0 0 * *67 GridApp Systems, Inc. 1 2 3 4 5 1-5M Buffalo Erie 334110 Computer and Peripheral Equipment Manufacturing 0 0 1 24 25 24 25 68 Group 3 Design Corp 3 <1M Brooklyn Kings 541490 Clothing Design Services 24 24 * * * * *69 GSD Productions Inc 3 1-5M Brooklyn Kings 713900 Theatrical lighting and equipment sales and rentals 35 35 0 0 0 (35) (35)70 HalfthePlanet (AdaptZ.com Inc) 1 <1M Brooklyn Kings 514100 Portal Web Site 10 10 0 0 0 (10) (10)71 Harlem Bowling Center, LLC 3 4 <1M Brooklyn Kings 713950 Bowling Centers 0 0 0 45 45 45 45 72 Harvest Strategies, LLC 2 3 <1M White Plains Westchester 541611 Business Consulting Services 1 1 * * * * *73 HDS Cosmetics Lab Inc 3 1-5M Melville Suffolk 325620 Cosmetics Sales 57 57 0 0 0 (57) (57)74 Home Bistro Foods Inc. (Chestnut ) 3 <1M Buffalo Erie 445299 All other specialty food stores 1 1 0 0 0 (1) (1)75 Hornet Group, Inc. 3 1-5M NYC New York 332439 Other metal container manufacturing 48 48 0 35 35 (13) (13)76 Hotel Technology Solutions, Inc. 4 5 1-5M Melville Suffolk 334419 Electronic Component Manufacturing 0 0 6 5 11 5 11 77 IA Systems Inc 1 <1M NYC New York 5045 Computer Peripherals & Software 21 21 * * * * *78 i-Cardiac Technologies, Inc. 4 5 <1M NYC New York 541710 Research and Development in the Physical, Engineering, and Life

Sciences0 0 3 18 21 18 21

79 IMPROV Technologies Inc 1 1-5M Great River Suffolk 51121 Software publishers 25 25 0 0 0 (25) (25)80 Infinia Group LLC 4 5 <1M Vestal Broome 541613 Consulting Services 6 6 1 18 19 12 13 81 Intelli-Tec Security Services LLC 1 2 3 1-5M Hempstead Nassau 561612 Security alarm systems sales combined with installation,

maintenance, or monitoring services35 35 0 0 0 (35) (35)

82 Internet Financial Services Inc / A.B. 1 1-5M Peekskill Putnam 523120 Security Brokers on the Internet 62 62 * * * * *83 Intra-Cellular Therapies, Inc. 4 5 5M+ NYC New York 541710 R&D in the Physical, Engineering, and Life Sciences 0 0 3 20 23 20 23 84 IntraLinks Inc 1 1-5M Port

WashingtonNassau 51339 Computer Processing, Data Prep & Processing Service 32 36 0 0 0 (32) (36)

85 Invision.com, Inc. 1 2 3 5 1-5M NYC New York 541513 Computer systems facilities management & operations services 69 69 151 237 388 168 319

86 i-Stream TV Inc 1 <1M Rochester Monroe 512191 Video Production Services 14 14 0 0 0 (14) (14)87 J.F.G. Food Corp. 1 1-5M NYC New York 422400 Grocery Wholesaler 35 35 0 41 41 6 6 88 JCR Business Services, LLC 1 3 4 <1M Brooklyn Kings 561499 Other Business Support Services 1 1 * * * * *89 Kanoodle.com, Inc. 1 2 3 4 5M+ Fairport Monroe 541840 Media Advertising Representative 76 77 2 58 60 (18) (17)90 Karen's Fabulous Foods, Inc. 3 <1M Yonkers Westchester 311991 Perishable prepared food manufacturing 8 8 * * * * *

APPENDIX C3 of 6

NY TOTAL

PROGRAM




NO.


Investment


InvestmentTOTAL

LOCATION

NY


NYCounty TOTAL

91 Kionix, Inc. 3 4 5 5M+ Brooklyn Kings 334413 Semiconductor and Related Device Manufacturing 47 47 17 142 159 95 112 92 Knovel Corporation 3 4 5 <1M NYC New York 511140 Electronic database Publishing 16 18 30 34 64 18 46 93 K's Salon, LLC 1 <1M Fort Ann Washington 812112 Beauty Salon 1 1 * * * * *94 L&G Bakery Enterprises, Inc. 3 1-5M New Windsor Orange 311412 Frozen Specialty Food Manufacturing 32 34 * * * * *95 L&K Top Design Corp. 1 <1M Long Island Queens 315292 Fur Clothier Manufacturer 4 4 * * * * *96 LMB Sales Corp 2 <1M NYC New York 424990 Merchant Wholesalers, Non Durable Goods: Other Misc.

Nondurable Goods Merchant Wholesalers3 3 * * * * *

97 Lumetrics, Inc. 4 5 <1M Valhalla Westchester 333314 Optical Instrument and Lens Manufacturing 3 3 0 13 13 10 10 98 M.R.B. Securities Corp. 2 3 5M+ Ithaca Tompkins 523900 Finance-Securities broker-dealer 0 0 8 32 40 32 40 99 Marketing Technology Solutions, Inc. 3 1-5M Long Island Queens 54191 Marketing Research and Public Opinion Polling 24 24 0 61 61 (24) 37 100 Medicom, LLC 1 2 3 4 1-5M Bay Shore Suffolk 423990 Durable Goods Wholesaler 9 9 0 14 14 5 5 101 Medidata Solutions, Inc. 2 3 4 5 <1M Norwich Chenango 511210 Software Publishers 9 9 242 219 461 210 452 102 Merchant's Ad-Vantage Corp 1 1-5M NYC New York 52222 Sales Financing 6 7 0 0 0 0 0 103 Metropolitan TLC Holdings Inc 3 5M+ Troy Rensselaer 51113 Book Publishers 75 93 * * * * *104 Mezmeriz, Inc 4 <1M NYC New York 334419 Other Electronic Component Manufacturing 2 2 0 3 3 1 1 105 MilMar Food Group, LLC 3 1-5M NYC New York 311412 Frozen specialty food manufacturing 53 53 * * * * *106 ModelWire Inc 1 2 <1M Brooklyn Kings 541512 Online Information Services 1 1 * * * * *107 MR Holding Company, LLC 1 3 5M+ NYC New York 311412 Frozen Specialty Food Manufacturing 88 89 10 189 199 101 110 108 Mystique Brands, LLC 4 5 1-5M Buffalo Erie 42480 Wine and Distilled Alcohol Beverage Merchant Wholesalers 0 0 0 0 0 0 0 109 NANIRX Therapeutics Inc. 4 5 1-5M NYC New York 541710 R&D in the Physical, Engineering, and Life Sciences 0 0 * * * * *110 New Monarch Machine Tool, Inc. 1 2 3 4 5M+ NYC New York 333200 Machine Manufacturing 42 42 2 28 30 (14) (12)111 New York Business development

Corp.1 3 5M+ NYC New York 5222 Nondepository Credit Intermediaries 39 39 0 51 51 12 12

112 New York Information Services Corp. 4 5 <1M Middletown Orange 541618 Telecommunications management consulting services 7 7 0 12 12 5 5

113 Newtek Securities LLC (PPMLink 3 <1M NYC New York 523999 Financial Investment Activities 0 0 * * * * *114 Nextidea Corp 1 2 <1M NYC New York 33992 Sports Promotional Items / Marketing 2 2 * * * * *115 Niagara Dispensing Technologies,

LLC1 4 5 <1M NYC New York 333310 Commercial and Service Industry Machinery Manufaturing 9 11 2 8 10 (1) (1)

116 NightFunk Inc 1 <1M West Hempstead

Nassau 514191 Online Campus-Specific Information Services 2 2 * * * * *

117 NYC Seed, LLC 4 5 <1M Great River Suffolk 514 Information Services and Data Processing Services 1 1 0 1 1 0 0 118 Oasis Children's Services 3 <1M NYC New York 611110 Educational Services 49 49 0 20 20 (29) (29)119 Outside.in Inc. 4 5 <1M NYC New York 519130 Internet Publishing and Broadcasting and Web Search Portals 16 16 0 17 17 1 1 120 OwnEnergy, Inc. 4 5 1-5M Auburn Cayuga 221119 Other Electric Power Generation – Solar, Wind and Tidal Power 4 5 1 7 8 3 3

APPENDIX C4 of 6

NY TOTAL

PROGRAM




NO.


Investment


InvestmentTOTAL

LOCATION

NY


NYCounty TOTAL

121 Oxford Collection Agency 1 2 3 1-5M Mount Westchester 561440 Collection Agencies 66 83 * * * * *122 Parkview Health Services, LLC 1 2 3 4 5 5M+ NYC New York 446110 Pharmacy 0 0 0 70 70 70 70 123 PartSearch Technologies, Inc. 2 3 4 5 1-5M NYC New York 454110 Electronic Shopping and Mail Order House 21 22 2 215 217 194 195 124 PECO Pallet, Inc. 1 2 3 4 5M+ Glenville Schenectady 532490 Other Commercial and Industrial Machinery and Equipment

Rental and Leasing15 18 43 26 69 11 51

125 Picasso Lighting Inc 3 1-5M NYC New York 421610 Wholesale Lighting Fixtures 30 30 * * * * *126 Pixfusion 4 5 <1M Amityville Suffolk 512110 Video Production and Distribution 0 0 0 6 6 6 6 127 Polar Industries, Inc. 5 <1M NYC New York 334111 Manufacturing - Electronic Computer 0 0 * * * * *128 PowerChow, LLC (d/b/a NuKitchen) 4 <1M NYC New York 3119910 Perishable Prepared Foods 0 0 0 0 0 0 0 129 PowerOne Media LLC 1 <1M NYC New York 51121 Software Publishers (Online Auto Marketing) 8 8 0 0 0 (8) (8)130 Prefer Network Inc (Prefer.com Inc) 1 1-5M NYC New York 511140 Mailing List Compilers 44 45 * * * * *131 PressCorps Inc 1 1-5M East Meadow Nassau 511120 Periodical publishing 20 20 0 0 0 (20) (20)132 Production Designer LLC dba Wet 3 <1M Syracuse Onondaga 541511 Custom Computer Programming Services 21 21 0 0 0 (21) (21)133 R.D.N.Y.C. Inc 1 1-5M Yonkers Westchester 315234 Manufacturing of Women's Apparel 15 15 0 0 0 (15) (15)134 Rapid Response Monitoring Services 3 1-5M NYC New York 561422 Telephone call centers (inbound) 95 100 0 0 0 (95) (100)135 RenalTech International LLC 1 1-5M Plattsburgh Clinton 541710 Scientific Research and Development 14 14 7 0 7 (14) (7)136 ReQuest Inc 1 <1M Port Jervis Orange 33431 Electronic Multimedia Storage/Audio & Video Equip. Mfg 3 3 * * * * *137 Resolute Digital, LLC 5 <1M NYC New York 541511 Custom computer programming services 4 4 0 14 14 10 10 138 ReVal.com Inc 3 1-5M Ballston Spa Saratoga 523930 Investment Advice 10 10 85 84 169 74 159 139 Right Track Recording LLC 1 1-5M Amherst Erie 334611 Recording Studio and Service Business 23 23 0 0 0 (23) (23)140 Rosenfeld Advisors, LLC 5 <1M Brooklyn Kings 541618 Other Management Consulting 1 1 0 2 2 1 1 141 Ryder System, Inc. 1 2 5M+ NYC New York 53212 Truck Rental & Leasing 0 0 * * * * *142 Sasun LLC 3 1-5M NYC New York 339911 Jewelry, precious metal, manufacturing 35 35 * * * * *143 Scarsdale Security Systems Inc 3 1-5M NYC New York 561621 Security system services (except locksmiths) 53 54 0 0 0 (53) (54)144 SchoolNet, Inc. 1 2 3 4 5 5M+ Farmingdale Suffolk 541511 Application Computer Software 39 46 47 64 111 25 65 145 SellJewelry Inc. 2 3 <1M Rochester Monroe 42194 Jewelry, watch, precious stone, & precious metal wholesalers 6 6 12 24 36 18 30 146 Sesha, Inc. 1 <1M Albany Albany 445120 Convenience Stores 5 5 * * * * *147 Shake-N-Go Fashions Inc 3 5M+ Brooklyn Kings 42231 Piece goods, Notions and Other Dry Goods Wholesalers 40 40 * 170 170 * *148 Show Digital Inc 1 <1M Rochester Monroe 54519 Communication Services 20 20 0 0 0 (20) (20)149 Skyline Ambulance 1 2 1-5M NYC New York 621910 Ambulance Services 80 80 0 0 0 (80) (80)150 SLM Holdings Inc. 5 <1M White Plains Westchester 518210 Data processing, Hosting and related web 0 0 0 0 0 0 0 151 Small Business Lending, Inc. 3 <1M Brooklyn Kings 522390 Loan Servicing 0 0 0 0 0 0 0 152 Soft Sight, Inc 4 5 <1M Albany Albany 511210 Software Publishers 5 5 (1) 18 17 13 12 153 Solbright Inc 3 1-5M Scarsdale Westchester 541512 Online information systems 35 37 * * * * *154 Soms Technologies, LLC 1 4 <1M NYC New York 441300 Automotive Parts, Accessories, and Tire Stores 1 1 (1) 2 1 1 0 155 Synacor, Inc. 1 2 3 4 5 1-5M Rensselaer Rensselaer 519100 Other Information Services 28 30 11 198 209 170 179

APPENDIX C5 of 6

NY TOTAL

PROGRAM




NO.


Investment


InvestmentTOTAL

LOCATION

NY


NYCounty TOTAL

156 TAKKLE, Inc. 1 5 <1M NYC New York 519130 Internet Publishing and Broadcasting and Web Search Portals 0 0 * * * * *157 Tayor Recycling Facility LLC (TKM

Materials LLC) 3 <1M NYC New York 421930 Non-hazardous waste treatment & disposal facilities & gypsum

beneficiating2 2 * * * * *

158 TeleMedia Accelerator LLC 1 1-5M NYC New York 541614 General Management Consulting Service 1 1 0 0 0 (1) (1)159 The Jacobs Press 2 <1M NYC New York 323122 Printing 11 11 0 8 8 (3) (3)160 The Metropolitan Switchboard Co Inc 1 3 1-5M NYC New York 421610 Electrical Apparatus and Equipment Wiring Supplies and

Construction Material Wholesalers26 26 0 25 25 (1) (1)

161 The SmartPill Corp. 1 4 5 <1M Westbury Nassau 334510 Electromedical and Electrotherapeutic Appartaus Manufacturer 0 0 4 20 24 20 24

162 TheStreet.com Inc 1 5M+ NYC New York 514191 Online Information Services 74 81 * 0 0 * *163 Thumbplay 1 5M+ NYC New York 519130 Internet Publishing and Broadcasting and Web Search Portals 66 70 6 112 118 46 48 164 Tire Conversion Technologies Inc 1 <1M NYC New York 32629 Tire Recycling/Other Rubber Product Mfg 1 1 * * * * *165 TradeComet.com, LLC 4 5 <1M Buffalo Erie 425110 Business-to-business electronic markets, durable goods,

wholesale trade0 0 0 1 1 1 1

166 Transworld Business Brokers of New 3 <1M NYC New York 56199 All Other Business Support Services 2 2 * * * * *167 UGO Networks Inc (Bla-Bla.com Inc) 1 5M+ NYC New York 514100 Distributes aggregated Web content 39 39 * * * * *168 Universal Processing Services LLC 3 <1M South Salem Westchester 52232 Financial Transactions Processing, Reserve & Clearinghouse

Activities (Credit Card Processing Sales)1 1 * * * * *

169 vault.com Inc 2 5M+ Brooklyn Kings 514191 Media company 103 103 0 0 0 (103) (103)170 Veer Inc (Direct Stock, Inc) 1 <1M Commack Suffolk 514199 All other Information Services 9 10 * * * * *171 Verde Energy USA, Inc. 4 <1M Yonkers Westchester 221122 Electric and other services combined 4 5 0 3 3172 Vincent Partnership Inc. 5 <1M NYC New York 54189 Other Services Related to Advertising 0 0 0 6 6 6 6 173 VisionPlay LLC 1 2 1-5M NYC New York 511210 Software Publishers (Interactive Entertainment) 29 30 0 0 0 (29) (30)174 Webenergy.Net, Inc., d/b/a

ConsumerPowerline 4 5 1-5M NYC New York 22112 Electric Power Transmission, Control, and Distribution 0 0 62 16 78 16 78

175 Word World, LLC 4 <1M NYC New York 512110 Television Show Production 0 0 1 9 10 9 10 176 Worldo.com Inc 1 <1M NYC New York 541511 Custom Computer Programming Services 8 8 0 0 0 (8) (8)177 Xtreme Mobile, Inc. 4 5 <1M Troy Rensselaer 513322 Cellular and other Wireless Communications 0 0 * * * * *178 Yahoo! Inc. 2 1-5M NYC New York 5418 Internet Publishing Company 0 0 * * * * *179 YellowJacket Software, Inc. 4 1-5M NYC New York 541511 Application Computer Software 0 0 0 0 0 0 0

3,584 3,731 1,647 3092 4739 524 2,171

* All employee information excluded because the CAPCO is no longer an investor and no longer has contact with the business.

APPENDIX C6 of 6

A p p e n d i x D

Text of

CAPCO Statute as amended by the Laws of 2005

NEW YORK TAX LAW

ARTICLE 1--SHORT TITLE; DEFINITIONS; MISCELLANEOUS Current through L.2005, c.63, p.A. (Reformatted for readability.)

§11. Certified capital companies (a) Definitions. For the purpose of this section the following terms shall mean:

(1) "Certification date" - the date on which a certified capital company is so designated by the department for a specific certified capital company program.

(2) "Certified capital" - an investment of cash by a certified investor in a certified capital company which fully funds

the purchase price of either or both its equity interest in the certified capital company or a qualified debt instrument issued by the certified capital company. Any such investment shall be subject to the provisions of article fourteen of the insurance law.

(3) "Certified capital company" - a partnership, corporation, trust or limited liability company, organized on a

for-profit basis that is located, headquartered and licensed or registered to conduct business in New York, that has as its primary business activity the investment of cash in qualified businesses and that is certified by the department as meeting the criteria set forth in subdivision (b) of this section.

(4) "Certified investor" - any insurance company that contributes certified capital. (5) "Department" - the department of insurance.

(6) "Net profits on certified investments" - the amount of money returned to the certified capital company

in repayment of or exchange for the certified capital company's qualified investment or investments in the qualified business in excess of the amount of such qualified investment or investments. Such number shall aggregate all of the certified capital company's qualified investments where gains on qualified investments are netted against losses on qualified investments.

(7) "Qualified business" - an independently owned and operated business that meets all of the following conditions

as of the time of the first investment in the business:

(A) It is headquartered in New York state, and its principal business operations are located in New York state, and the qualified investment it receives is used solely to support its business operations in the state, except for advertising, promotions and sales purposes. In cases where the qualified investment is made in a start-up company such capital must be used solely to establish and support its business operations in New York state, except for advertising, promotions and sales purposes.

(B) It has either

(i) no more than one hundred employees, at least eighty percent of whom are employed in New York state or,

(ii) no more than two hundred employees, at least eighty percent of whom are employed in this state, and during the fiscal year immediately preceding the qualified investment it had, together with its affiliates, gross revenues of no more than five million dollars, on a consolidated basis as determined in accordance with generally accepted accounting principles, except that, with respect to certified capital company program three and certified capital company program four and certified capital company program five, in the case of a company located in an empire zone established pursuant to article eighteen-B of the general municipal law such gross revenues shall not exceed eight million dollars.

(C) It is involved in commerce for the purpose of developing and manufacturing products and systems,

including but not limited to high technology products and systems such as computers, computer software, medical equipment, biotechnology, telecommunications equipment and products, processing or assembling

Page 2

all types of products, conducting research and development on all types of products or providing services, but excluding real estate, real estate development, insurance and businesses predominantly engaged in professional services provided by accountants, lawyers or physicians.

(D) The business was not organized by a certified capital company or an affiliate of a certified capital company,

but this paragraph shall not prohibit a certified capital company from providing financial, technical or similar advice to a business before making an investment in such business.

(E) The business does not have a financial relationship, such as an ownership interest, investment interest, or

compensation agreement, with a certified capital company or any affiliate of a certified capital company before the date on which a certified capital company makes its first investment in the business, but this paragraph shall not prohibit a certified capital company from providing financial, technical or similar advice to a business before making an investment in such business.

(F) For purposes of this paragraph, the term "independently owned and operated business" means

(i) in the case of a corporation or limited liability company, a corporation where no more than fifty percent of the voting stock of the corporation or limited liability company is owned or controlled, directly or indirectly, by a single corporation, a single partnership or a single limited liability company, and

(ii) in the case of a partnership, association, or other entity, a partnership, association or other entity where no more than fifty percent of the capital, profits or other beneficial interest in such partnership, association or other entity is owned or controlled, directly or indirectly, by a single corporation, a single partnership or a single limited liability company;

provided, however, that the term shall include, as a single "independently owned and operated business," parent and subsidiary or affiliated corporations or limited liability companies (i) that are engaged in an integrated for-profit business enterprise, and (ii) in which at least eighty percent of the voting stock or membership interests of all of the

corporations or limited liability companies is owned or controlled, directly or indirectly, by a common group of shareholders or members, and no more than fifty percent of the voting stock or membership interests of all of the corporations or limited liability companies is owned or controlled, directly or indirectly, by a single corporation, single partnership, or single limited liability company that is not part of such group or parent company or affiliated corporations or limited liability companies.

(8) "Qualified debt instrument" - a debt instrument issued by a certified capital company, at par value or a

premium, with an original maturity date of at least five years from date of issuance, a repayment schedule which is not faster than a level principal amortization, and interest, distribution or payment features which are not related to the profitability of the certified capital company or the performance of the certified capital company's investment portfolio.

(9) "Qualified distribution" - any distribution or payment by a certified capital company in connection with the

following:

(A) Reasonable costs and expenses of such equity holders incurred by such equity holders in connection with forming, syndicating, managing and operating the certified capital company, including

(i) an annual management fee in an amount that does not exceed two and one-half percent of the certified capital of the certified capital company with respect to a particular certified capital company program;

(ii) the reasonable and necessary fees paid for professional services (such as legal and accounting services) related to the operation of the certified capital company;

(iii) with respect to program four and any subsequent program, all payments by the certified capital company in satisfaction of its indebtedness to its certified investors, provided that no more than thirty-five percent of such certified capital company's certified capital may be used to purchase U.S.

Page 3

treasury securities, other investment-grade securities, a guaranty, indemnity, bond, insurance policy or other payment undertaking, or any combination thereof; and provided further, that nothing in this provision shall be construed to limit a certified capital company from expending non-certified capital in satisfaction of such indebtedness; and

(iv) with respect to program four and any subsequent program, the reasonable costs and expenses of forming, syndicating, or organizing the certified capital company, separate from the costs of insuring or defeasing the obligations of the certified capital company, provided, however, that such costs and expenses shall not exceed five percent of the certified capital company's certified capital; and

(B) Any increase or projected increase in federal or state taxes, including penalties and interest related to

state and federal income taxes, of the equity owners of a certified capital company resulting from the earnings or other tax liability of the certified capital company to the extent that the increase is related to the ownership, management or operation of a certified capital company.

(10) "Qualified investment" - the investment of cash by a certified capital company in a qualified business for the

purchase of any debt, equity or hybrid security, of any nature and description whatever, including a debt instrument or security which has the characteristics of debt but which provides for conversion into equity or equity participation instruments such as options or warrants, provided however, in the case of certified capital programs three, four and five, that any such debt instrument have a maturity of at least twenty-four months from the date such debt is incurred; and further provided that a certified capital company, after the investment and assuming full conversion and exercise of any equity participation instruments, shall not own more than fifty percent of the voting equity of the qualified business, except in the case of a follow-on investment where a specific exemption is granted by the department under subparagraph (D) of paragraph one of subdivision (c) of this section. Furthermore, except in the case of a follow-on investment, if a certified capital company owns more than fifteen percent of the equity in a company or has a seat on the board of directors of such company, then a certified capital company cannot invest in such company unless the following conditions are met: (i) at least one other investor who is not an affiliate of the certified capital company participates in the

same round of investment on the same terms and conditions as the certified capital company; and (ii) the certified capital company and its affiliates invest no more than fifty percent of the total investment

made in that round of investment.

(11) “Early stage business” - a qualified business which is involved, at the time of investment, in activities related to the development of initial product or service offerings, such as prototype development or establishment of initial production or service processes, or, which is less than two years old and during the fiscal year immediately preceding the qualified investment had, together with its affiliates, gross revenues of no more than two million dollars, on a consolidated basis as determined in accordance with generally accepted accounting principles.

(12) "Superintendent" - the superintendent of insurance.

(13) "Certified capital company program" - a calendar year or years for which taxpayers may be allocated and

allowed credits pursuant to this section and subdivision (k) of section fifteen hundred eleven of this chapter and delineated as a separate program by this section.

(14) "Starting date" - the date on which a certified capital company is allocated certified capital for a specific

certified capital company program pursuant to subdivision (b) of this section.

(15) "Underserved area" - a county, including a county wholly within a city, in which, as of January first, two thousand, less than twenty-five percent of the qualified investments in qualified businesses were made by certified capital companies under certified capital company program one. The superintendent shall prepare a list of such counties by July first, two thousand.

(16) "Start-up business" - a qualified business which is involved, at the time of investment, in activities related to

the development of initial product or service offerings, such as prototype development or establishment of initial production or service processes, or, which is less than two years old and during the fiscal year

Page 4

immediately preceding the qualified investment had, together with its affiliates, gross revenues of no more than two million dollars, on a consolidated basis as determined in accordance with generally accepted accounting principles and has fewer than twenty employees at the time of the investment; and, in addition, which has emerged within the year prior to the date of investment or is emerging from, or utilizes a technology transferred from, a university or college research facility located in New York state, a not-for-profit research facility located in New York state, or an industrial research facility located in New York state, or which is conducting research in conjunction with or in the research facilities of a university or college located in New York state, or which is located in or has emerged within the year prior to the date of investment or is emerging from an incubator facility located in New York state.

(b) Certification.

(1) The superintendent shall establish by rule or regulation the procedures for making an application to become a certified capital company. The applicant shall pay a non-refundable application fee of five hundred dollars at the time of filing the application with the department.

(2) The superintendent may certify partnerships, corporations, trusts or limited liability companies, organized on

a for profit basis, which submit an application to be designated as a certified capital company if such applicant is located, headquartered and licensed or registered to conduct business in New York, has as its primary business activity the investment of cash in qualified businesses and meets the other criteria set forth in this subdivision.

(3) A certified capital company's initial capitalization, at the time of seeking certification, must be five hundred

thousand dollars or more.

(4) The superintendent shall review the organizational documents of each applicant for certification and the business history of the applicant, determine that the applicant's cash, marketable securities and other liquid assets are at least five hundred thousand dollars, and determine that the officers and the board of directors, general partners, trustees, managers, or members are trustworthy and are thoroughly acquainted with the requirements of this subdivision.

(5) The superintendent shall verify that at least two principals of the certified capital company or any manager

of the certified capital company each have no less than five years of experience in the venture capital or a venture capital-related industry.

(6) Any offering material involving the sale of securities of the certified capital company shall include the

following statement: "Authorizing the formation of a Certified Capital Company does not constitute the endorsement of the state of New York as to either the quality of management or the potential for earnings of such company and the state of New York is not liable for damages or losses to a Certified Investor in the company. Use of the word 'certified' in an offering does not constitute a recommendation or endorsement of the investment by the state of New York. Investments in a prospective Certified Capital Company prior to the time such company is certified with respect to a certified capital company program are not eligible for tax credits. In the event certain statutory provisions (as specified in section 11 of the Tax Law) are violated, the state of New York may require forfeiture of unused tax credits and repayment of used tax credits."

(7) Within sixty days of application, the superintendent shall issue the certification or shall refuse the

certification and communicate in detail to the applicant the grounds for the refusal, including suggestions for the removal of those grounds.

(8) The superintendent may certify any previously certified capital company which has remained in compliance

with the requirements of this section upon the application of such company to be designated a certified capital company for a certified capital company program for which it is not so designated. Such new certification shall be considered a separate certification from any other such certification under this section and investments in and by such company shall be considered separately for purposes of subdivisions (c) and

Page 5

(d) of this section.

(9) The superintendent shall start accepting applications to become a certified capital company in certified capital company program two by November first, nineteen hundred ninety-nine, and shall start accepting applications to become a certified capital company in certified capital company program three by August first, two thousand, and shall begin accepting applications to become a certified capital company in certified capital company program four by the later of August first, two thousand four or not more than sixty days after the effective date of section one of part D of chapter fifty-nine of the laws of two thousand four and shall begin accepting applications to become a certified capital company in certified capital company program five by the later of July first, two thousand five or not more than sixty days after the effective date of the chapter of the laws of two thousand five which amended this paragraph.

(10) A certified capital company may obtain a guaranty, indemnity, bond, insurance policy and/or other payment

undertaking for the benefit of its certified investors from any entity; provided, however, that, in no case shall more than one certified investor of such certified capital company or affiliates of such certified investor be entitled to provide such guaranty, indemnity, bond, insurance policy and/or other payment undertaking in favor of the certified investors of the certified capital company and its affiliates in this state.

(c) Requirements for continuance of certification.

(1) To continue to be certified with respect to a particular certified capital company program, a certified capital company must make qualified investments according to the following schedule:

(A) Within two years after the starting date of a specific certified capital company program of a certified

capital company, at least twenty-five percent of its certified capital allocable to such certified capital company program must be placed in qualified investments.

(B) Within three years after the starting date of a specific certified capital company program of a certified

capital company, at least forty percent of its certified capital allocable to such certified capital company program must be placed in qualified investments.

(C) Within four years after the starting date of a specific certified capital company program of a certified

capital company, at least fifty percent of its certified capital allocable to such certified capital company program must be placed in qualified investments, at least fifty percent of which must have been placed in early stage businesses, except that in the case of program four and any subsequent program, at least twenty-five percent of which must have been placed in early stage businesses and an additional twenty-five percent of which must have been placed in start-up businesses, and except that in the case of qualified investments made in qualified businesses located in empire zones established pursuant to article eighteen-B of the general municipal law under the provisions of certified capital company program three, program four and program five from allocations of certified capital made specifically for such targeted investments in such zones, the requirement for qualified investments in early stage and start-up businesses shall not apply.

(D) A certified capital company, at least fifteen working days prior to making a proposed investment in a

specific business, shall certify in writing to the superintendent that (i) the business in which it proposes to invest meets the definition of a qualified business as set forth

in subdivision (a) of this section or, in the case of a follow-on investment, that such business continues to meet the requirements set forth in subparagraphs (A) and (C) of paragraph seven of subdivision (a) of this section and, in either case, an explanation of its determination that the business meets such requirements, and

(ii) with respect to certified capital company program three, program four and program five, whether or not such business is located in an empire zone established pursuant to article eighteen-B of the general municipal law or in an underserved area outside an empire zone. The certification to the superintendent shall include a sworn statement from the business in which the certified capital company proposes to invest, which statement shall evidence the intention of the business to maintain its headquarters in New York and conduct its primary business operations in the state of

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New York after its receipt of the investment by the certified capital company. If the superintendent determines that the business does not meet the definition of a qualified business, or, in the case of a follow-on investment, that such business does not meet the requirements set forth in subparagraphs (A) and (C) of paragraph seven of subdivision (a) of this section, then it shall, within the fifteen working day period prior to the making of the proposed investment, notify the certified capital company of its determination and provide an explanation thereof, provided, however, that the department may, upon written request of a certified capital company and at the discretion of the department, grant, in writing, an exemption to the percentage limitations of paragraph ten of subdivision (a) of this section.

(E) All certified capital not placed in qualified investments by the certified capital company may be held or

invested in such manner as the certified capital company, in its discretion, deems appropriate. The proceeds of all certified capital returned to a certified capital company after being originally placed in qualified investments may be placed again in qualified investments and shall count toward any requirement in this subdivision with respect to placing certified capital in qualified investments.

(F) If within ten years after the starting date of certified capital company program four or program five, and

within twelve years after the starting date of certified capital company programs one, two, and three, one hundred percent of the certified capital allocable to a certified capital company participating in such program has not been placed in qualified investments, the specific certified capital company shall no longer be permitted to receive management fees; provided that such restriction shall not apply (i) with respect to certified capital company programs one, two, and three, to any certified capital company that has not, prior to October thirty-first, two thousand four, received, as opposed to accrued, any management fees, or (ii) with respect to any certified capital company program, to a certified capital company in which at least fifty percent of the voting stock, capital, membership interests, or other beneficial ownership interests, as the case may be, are owned by an entity that is managed, directly or indirectly, by a non-profit corporation.

(2) Any business which is classified as a qualified business at the time of the first investment in said business by

a certified capital company shall remain classified as a qualified business and may receive follow-on investments from any certified capital company, and such follow-on investments shall be qualified investments even though such business may not meet the definition of a qualified business at the time of such follow-on investments, provided, however, that such business continues to meet the requirements set forth in subparagraphs (A) and C) of paragraph seven of subdivision (a) of this section, and such business reaffirms its intention to maintain its headquarters in New York and conduct its primary business operations in the state of New York as required in subparagraph (D) of paragraph one of this subdivision.

(3) No qualified investment may be made by a certified capital company to the extent such investment would

cause the company's total qualified investment outstanding with respect to the qualified business receiving such investment to exceed fifteen percent of the total certified capital of the certified capital company at the time of such investment.

(4) Documents and other materials submitted by certified capital companies or by businesses for purposes of

the continuance of certification shall not be public records if such records are determined by the superintendent to be trade or business secrets and shall be maintained in a confidential manner by the superintendent.

(5) The aggregate cumulative amount of all qualified investments made by the certified capital company for a

certified capital company program from its starting date for such program will be considered in the calculation of the percentage requirements under subparagraphs (A), (B) and (C) of paragraph one of this subdivision, provided, however, that any amounts received by a certified capital company from a qualified business as (i) commitment fees, closing fees, or other similar fees (excluding reimbursement of out-of-pocket expenses, including legal fees and accounting fees) in excess of one percent of the certified capital company's investment in the qualified business or (ii) license fees, royalties, or similar charges shall not considered in any of the percentage calculations under this section.

(6) Each certified capital company shall report the following to the superintendent:

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(A) As soon as practicable after the receipt of certified capital or an irrevocable funding commitment subject only to the receipt of an allocation pursuant to subdivision (h) of this section, (i) the name of each certified investor from which the certified capital was received, including such

certified investor's insurance tax identification number; (ii) the amount of each certified investor's investment of certified capital; and (iii) the date on which the certified capital was received. Provided, however, that requests for allocation of tax credits with respect to certified capital company program two by certified capital companies on behalf of their certified investors which are received by the superintendent on or before March first, two thousand shall be treated as having been received on March first, two thousand for tax credits to be utilized in two thousand one, and if satisfactory, shall be given equal priority for allocation, and provided, however, that requests for allocation of tax credits with respect to certified capital company program three by certified capital companies on behalf of their certified investors which are received by the superintendent on or before December first, two thousand shall be treated as having been received on December first, two thousand for tax credits to be utilized in two thousand two, and if satisfactory, shall be given equal priority for allocation, and provided, however, that requests for allocation of tax credits with respect to certified capital company program four by certified capital companies on behalf of their certified investors which are received by the superintendent on or before December first, two thousand four shall be treated as having been received on December first, two thousand four for tax credits to be utilized in two thousand six, and if satisfactory, shall be given equal priority for allocation, and provided, however, that requests for allocation of tax credits with respect to certified capital company program five by certified capital companies on behalf of their certified investors which are received by the superintendent on or before the later of (i) November first, two thousand five and (ii) the one hundred twentieth day after the date on which the superintendent began accepting applications for certification in connection with certified capital company program five pursuant to paragraph nine of subdivision (b) of this section shall be treated as having been received on such later date for tax credits to be utilized in two thousand seven, and if satisfactory, shall be given equal priority for allocation.

(B) On an annual basis, on or before January thirty-first of each year,

(i) the amount of the certified capital company's certified capital at the end of the immediately preceding year;

(ii) whether or not the certified capital company has invested more than fifteen percent of its total certified capital in any one business;

(iii) all qualified investments that the certified capital company made during the previous calendar year, including the number of employees of each qualified business in which it has made investments at the time of such investment and as of December first of the preceding calendar year. For any qualified business where the certified capital company no longer has an investment, the certified capital company shall provide employment figures for such company as of the last day before the investment was terminated. Such report shall provide a separate accounting by each certified capital company program; and

(iv) all qualified investments made in empire zones and underserved areas outside such empire zones as required under certified capital company program three, certified capital company program four and certified capital company program five.

(C) Each certified capital company shall provide to the superintendent annual audited financial statements,

which shall include the opinion of an independent certified public accountant, within ninety days of the close of its fiscal year. The audit shall address whether the funds received by the certified capital company have been invested as required under subparagraphs (A), (B) and (C) of paragraph one of this subdivision. Upon receiving notification and documentation by a certified capital company that it has satisfied the requirements of subparagraph (C) of paragraph one of this subdivision that it has invested fifty percent of its certified capital, the department shall have sixty days to notify such certified capital company that it has or has not met such requirement, with a reason for such determination if it has not, in the judgment of the department, met such requirement. If the department does not provide such notification within sixty days, the certified capital company shall then be deemed to have met such requirement.

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(D) On or before April first of each year, each certified capital company shall pay an annual, non-refundable certification fee of five hundred dollars to the superintendent; provided that no such fee shall be required within six months of the initial certification date of a certified capital company.

(E)(1) Within thirty days of the decision on an application for certification pursuant to subdivision (b) of

this section, the superintendent shall submit a copy of such application and the related decision to the department of taxation and finance. The superintendent shall submit a copy of all filings of certifications pursuant to subparagraph (D) of paragraph one of this subdivision and any determination made thereon within fifteen days of such filing.

(2) The superintendent shall annually, by March first, submit to the department of taxation and finance

a list of persons who may claim the tax credit for the previous taxable year and any other information necessary to assist the department of taxation and finance to determine eligibility for such tax credit.

(d) Distributions.

(1) A certified capital company may make qualified distributions at any time. In order for a certified capital company to make a distribution other than a qualified distribution from a certified capital company program, to its equity holders, either (A) the aggregate cumulative amount of all qualified investments for such program must equal or exceed

one hundred percent of its certified capital allocable to such certified capital company program, or (B) it must have received written authorization to make such distribution from the superintendent. In no event, however, shall any such distribution to its equity holders, other than a qualified distribution, be made by a certified capital company from a certified capital company program unless an amount equal cumulatively to at least ninety percent of its certified capital of such program is invested in companies that conduct their principal business operations in New York state.

(2) In the event that a business in which a qualified investment is made relocates its principal business

operations to another state during such investment, or within three months after the termination of such investment, the cumulative amount of qualified investment shall be reduced by the amount of such qualified investment, for the purposes of this subdivision only, unless (A) the certified capital company invests an amount at least equal to the investment of certified capital in

the relocated business in a qualified business located in New York state within six months of the relocation or

(B) unless the business demonstrates that it has returned its principal business operations to New York state within three months of such relocation.

A business shall be deemed to have relocated its principal business operations outside New York state if the primary workplace of more than fifty percent of the employees of such business within the state is relocated to another state.

(3) In the event that a business in which a qualified investment is made under certified capital company

program three, certified capital company program four or certified capital company program five, relocates its principal business operation within the earlier of four years after the date of such qualified investment or three months after the termination of such investment, whereby the requirements of paragraph three of subdivision (h) of this section to make qualified investments in qualified businesses located in empire zones established pursuant to article eighteen-B of the general municipal law or in underserved areas outside such empire zones no longer are satisfied, the cumulative amount of qualified investment shall be reduced by the amount of such qualified investment, for the purposes of this subdivision only, unless

(A) the certified capital company invests an amount at least equal to the investment of certified capital in

the relocated business in a qualified business located in either an empire zone or in an underserved area outside an empire zone so that the requirements of paragraph three of subdivision (h) of this

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section are again satisfied within six months of such relocation, unless the certified capital company certifies to the superintendent that a good faith effort was made to make additional qualifying investments under the requirements of paragraph three of subdivision (h) of this section, or

(B) the business demonstrates that it has returned its principal business operation to New York state in

either an empire zone or in an underserved area outside an empire zone within three months of such relocation, or

(C) the business demonstrates that it had a valid business purpose for relocating its principal business

operation. A business shall be deemed to have relocated its principal business operations outside of an empire zone or an underserved area outside an empire zone if the primary workplace of more than fifty percent of the employees of such business within an empire zone or an underserved area outside an empire zone is relocated to an area outside the state or outside an empire zone or an underserved area outside an empire zone.

(4) Payments to debt holders of a certified capital company may be made without restriction with respect to

repayments of principal and interest on indebtedness owed to them by a certified capital company, including indebtedness of the certified capital company on which certified investors earned tax credits. A debt holder that is also a certified investor or equity holder of a certified capital company may receive payments with respect to such debt without any restriction whatsoever.

(5) A certified capital company that receives certified capital investments under program four and any

subsequent program shall pay to the department for deposit in the general fund an amount equal to thirty percent of the net profits on qualified investments. A certified capital company shall make all payments required under this paragraph concurrently with and pro rata to distributions of profits and gains to its equity owners; however, nothing contained in this paragraph shall be construed to affect qualified distributions.

(6) The amount of any payment required under paragraph five of this subdivision shall be reduced to fifteen

percent of such net profits on qualified investments if, at the time of such net profits distribution, such certified capital company irrevocably commits to both: (A) re-invest the remaining fifteen percent of such net profits not being paid to the general fund under paragraph five of this subdivision into qualified businesses, and (B) invest an additional amount equal to at least fifteen percent of such net profits distribution into qualified businesses which additional amount shall come from a separate pool of venture capital that is controlled by the certified capital company but that does not contain certified capital. In making investments from funds established under this paragraph, the certified capital company shall follow the requirements set forth in subparagraph (D) of paragraph one of subdivision (c) of this section pertaining to obtaining approval of the investment being in a qualified business, except that requirements pertaining to empire zones and underserved areas requirements shall not apply. Once qualified investments in qualified businesses have been made pursuant to this paragraph equal to thirty percent of the net profits on qualified investments, then the requirements under this subdivision shall have been satisfied and the proceeds from such qualified businesses may be distributed without restriction.

(e) Decertification.

(1) The superintendent shall conduct an annual review of each certified capital company to determine if the certified capital company is abiding by the requirements of certification, to advise the certified capital company as to the eligibility status of its qualified investments, and to ensure that no investment has been made in violation of this subdivision. The cost of the annual review shall be paid by each certified capital company according to a reasonable fee schedule adopted by the superintendent.

(2) Any material violation of subdivision (c) of this section with respect to a particular certified capital company

program shall be grounds for decertification of the certified capital company with respect to such program. If the superintendent determines that a certified capital company is not in compliance with the requirements

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of subdivision (c) of this section with respect to a particular certified capital company program, it shall, by written notice, inform the officers of the certified capital company that the certified capital company will be subject to decertification with respect to such program in one hundred twenty days from the date of mailing of the notice, unless the deficiencies are corrected and the certified capital company is again in compliance with all requirements for certification.

(3) At the end of the one hundred twenty day grace period, if the certified capital company is still not in

compliance with subdivision (c) of this section with respect to a particular certified capital company program, the superintendent shall send a notice of decertification to the certified capital company with respect to such program and to all other appropriate state agencies.

(4) Notwithstanding the provisions of paragraphs two and three of this subdivision, if a certified capital company in

certified capital company programs three, four and five fails to satisfy the requirement in subparagraph (B) of paragraph one of subdivision (c) of this section because it has been unable to make a sufficient amount of qualified investments in qualified businesses located either in empire zones established pursuant to article eighteen-B of the general municipal law or in underserved areas outside such empire zones, such certified capital company shall not be subject to decertification at that time. However, if such certified capital company fails to satisfy the requirement in subparagraph (C) of paragraph one of subdivision (c) of this section because it has been unable to make a sufficient amount of qualified investments in qualified businesses located either in such empire zones or in underserved areas outside such empire zones, but certifies to the superintendent that it had made a good faith effort to make such investments, such certified capital company shall be allowed two additional years to satisfy the requirement in such subparagraph (C). If, after the conclusion of such two year period, the certified capital company still has not been able to satisfy the requirement to make such investments, and such certified capital company certifies to the superintendent that it had made a good faith effort to make such investments, the requirement in paragraphs three, four and five of subdivision (h) of this section to make qualified investments in qualified businesses located in empire zones or in underserved areas shall be waived. Such certified capital company shall then be allowed one additional year to satisfy the requirement in such subparagraph (C), and if, at the conclusion of that additional one year period, such requirement is still not satisfied, such certified capital company shall be subject to decertification and the provisions of paragraphs two and three of this subdivision shall apply.

(5) Once a certified capital company has invested an amount cumulatively equal to one hundred percent of its

certified capital with respect to a particular certified capital company program in qualified investments and has met all other requirements under this subdivision, the certified capital company shall no longer be subject to regulation by the superintendent and shall no longer be subject to the requirements of subdivision (c) of this section with respect to such program. Upon receiving documented certification by a certified capital company that it has invested an amount equal to one hundred percent of its certified capital, the department shall have sixty days to notify such certified capital company that it has or has not met such requirement with a reason for such determination if it has not, in the judgment of the department, met such requirement. If the department does not provide such notification within sixty days, the certified capital company shall then be deemed to have met such requirement.

(6) The superintendent shall send written notice of such decertification to the address of each certified investor

whose tax credit has been subject to recapture or forfeiture, using the address shown on the last filing submitted to the superintendent.

(f) Revocation of certification.

The superintendent may revoke the certification of a certified capital company, or, at the discretion of the superintendent, the certification of a certified capital company with respect to a particular certified capital company program only, if any material representation to the superintendent in connection with the application process proves to have been falsely made or if the application materially violates any requirement established by the superintendent pursuant to this subdivision. In addition, the superintendent may revoke the certification of a certified capital company if such certified capital company (i) falsely certified, pursuant to paragraph three of subdivision (d) of this section that a good faith effort was

made to make additional qualifying investments under the requirements of paragraph three of subdivision

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(h) of this section, or (ii) falsely certified, pursuant to paragraph four of subdivision (e) of this section, that it had made a good faith

effort to make a sufficient amount of qualifying investments in qualifying businesses located in empire zones established pursuant to article eighteen-B of the general municipal law or in underserved areas outside such empire zones.

(g) Registration requirements.

All investments for which tax credits are allowable under the provisions of subdivision (k) of section fifteen hundred eleven of this chapter shall satisfy the conditions of being registered or specifically exempt from registration by provisions or regulations under sections three hundred fifty-nine-e through three hundred fifty-nine-ff of the general business law.

(h) Maximum permitted credits.

(1) Certified capital company program one. The aggregate amount of certified capital for which taxpayers may be allocated and allowed tax credits pursuant to this paragraph and subdivision (k) of section fifteen hundred eleven of this chapter may not exceed fifty million dollars for calendar year nineteen hundred ninety-nine, which certified capital may be invested in certified capital companies beginning in calendar year nineteen hundred ninety-eight. In calendar year two thousand or thereafter, tax credits may be allowed pursuant to this paragraph and such subdivision (k) for an additional fifty million dollars of certified capital, which certified capital may be invested in certified capital companies beginning in calendar year nineteen hundred ninety-nine, if not allocated to calendar year nineteen hundred ninety-eight in accordance with this paragraph. Therefore, the total amount of certified capital for which tax credits may be allowed pursuant to this paragraph and such subdivision (k) shall be one hundred million dollars.

During any calendar year in which the limitation described in this paragraph will limit the amount of certified capital, certified capital will be allocated in order of priority based upon the date of filing of information described in subparagraph (A) of paragraph six of subdivision (c) of this section. Certified capital limited in any calendar year by the application of the provisions of this paragraph shall be allowed and allocated in the immediately succeeding calendar year in order of priority set forth in this paragraph. The superintendent shall advise any certified capital company in writing within fifteen days after receiving such filing, whether the limitations of this paragraph then in effect will be applicable with respect to the investments and credits described in such filing with the superintendent.

Certified capital may be raised by each certified capital company with respect to certified capital company program one at any time subsequent to its certification date, and credits shall be allocated to and vested in certified investors at the time of each such investment as provided in this paragraph, although such credits shall not be first allowed or incurred for state tax purposes, until, at the earliest, tax years beginning in nineteen hundred ninety-nine with respect to the first fifty million dollars of credits and tax years beginning in two thousand with respect to the next such fifty million dollars of credits.

(2) Certified capital company program two.

The aggregate amount of certified capital for which taxpayers may be allocated and allowed tax credits pursuant to this paragraph and subdivision (k) of section fifteen hundred eleven of this chapter may not exceed thirty million dollars for calendar year two thousand one, which certified capital may be invested in certified capital companies beginning in calendar year nineteen hundred ninety-nine.

During any calendar year in which the limitation described in this paragraph will limit the amount of certified capital, certified capital will be allocated in order of priority based upon the date of filing of information described in subparagraph (A) of paragraph six of subdivision (c) of this section. The superintendent shall

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advise any certified capital company in writing, within fifteen days after receiving such filing, whether the limitations of this paragraph then in effect will be applicable with respect to the investments and credits described in such filing with the superintendent.

Certified capital may be raised by each certified capital company with respect to certified capital company program two at any time subsequent to its certification date, and credits shall be allocated to and vested in certified investors at the time of each such investment as provided in this paragraph, although such credits shall not be first allowed or incurred for state tax purposes, until, at the earliest, tax years beginning in two thousand one.

(3) Certified capital company program three.

The aggregate amount of certified capital for which taxpayers may be allocated and allowed tax credits pursuant to this paragraph and subdivision (k) of section fifteen hundred eleven of this chapter may not exceed one hundred fifty million dollars for calendar year two thousand two, which certified capital may be invested in certified capital companies beginning in calendar year two thousand.

During any calendar year in which the limitation described in this paragraph will limit the amount of certified capital, certified capital will be allocated in order of priority based upon the date of filing of information described in subparagraph (A) of paragraph six of subdivision (c) of this section. The superintendent shall advise any certified capital company in writing, within fifteen days after receiving such filing, whether the limitations of this paragraph then in effect will be applicable with respect to the investments and credits described in such filing with the superintendent. Certified capital may be raised by each certified capital company with respect to certified capital company program three at any time subsequent to its certification date, and credits shall be allocated to and vested in certified investors at the time of each such investment as provided in this paragraph, although such credits shall not be first allowed or incurred for state tax purposes, until, at the earliest, tax years beginning in two thousand two. One-third of the certified capital raised by each certified capital company with respect to certified capital company program three shall be used to make qualified investments in qualified businesses located in empire zones established pursuant to article eighteen-B of the general municipal law, and one-third of such certified capital shall be used to make qualified investments in qualified businesses located in underserved areas outside such empire zones.

(4) Certified capital company program four.

The aggregate amount of certified capital for which taxpayers may be allocated and allowed tax credits pursuant to this paragraph and subdivision (k) of section fifteen hundred eleven of this chapter may not exceed sixty million dollars for calendar year two thousand six, which certified capital may be invested in certified capital companies beginning in calendar year two thousand four. During any calendar year in which the limitation described in this paragraph will limit the amount of certified capital, certified capital will be allocated in order of priority based upon the date of filing of information described in subparagraph (A) of paragraph six of subdivision (c) of this section. The superintendent shall advise any certified capital company in writing, within fifteen days after receiving such filing, whether the limitations of this paragraph then in effect will be applicable with respect to the investments and credits described in such filing with the superintendent. Certified capital may be raised by each certified capital company with respect to certified capital company program four at any time subsequent to its certification date, and credits shall be allocated to and vested in certified investors at the time of each such investment as provided in this paragraph, although such credits shall not be first allowed or incurred for state tax purposes, until, at the earliest, tax years beginning in two thousand six. One-third of the certified capital raised by each certified capital company with respect to certified capital company program four shall be used to make qualified investments in qualified businesses located in empire zones established pursuant to article eighteen-B of the general municipal law, and one-third of such certified capital shall be used to make qualified investments in qualified businesses located in underserved areas outside such empire zones, provided, however, that in the case of an investment made

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by a certified capital company in an empire zone located in an underserved area, the certified capital company making such an investment may choose to designate such investment as an investment in an underserved area but not as an investment in an empire zone for the purpose of meeting the requirements of this paragraph. Fifty percent of the total amount of capital invested by a certified capital company at the time of one hundred percent investment of funds shall be invested in qualified businesses that are involved in commerce for the primary purpose of developing and manufacturing products and systems covered by the activities set forth in paragraph (b) of subdivision one of section thirty-one hundred two-e of the public authorities law and have a ratio of research and development expenditures to net sales which equals or exceeds six percent during the fiscal year immediately preceding the qualified investment.

(5) Certified capital company program five.

The aggregate amount of certified capital for which taxpayers may be allocated and allowed tax credits pursuant to this paragraph and subdivision (k) of section fifteen hundred eleven of this chapter may not exceed sixty million dollars for calendar year two thousand seven, which certified capital may be invested in certified capital companies beginning in calendar year two thousand five. During any calendar year in which the limitation described in this paragraph will limit the amount of certified capital, certified capital will be allocated in order of priority based upon the date of filing of information described in subparagraph (A) of paragraph six of subdivision (c) of this section. The superintendent shall advise any certified capital company in writing, within fifteen days after receiving such filing, whether the limitations of this paragraph then in effect will be applicable with respect to the investments and credits described in such filing with the superintendent. Certified capital may be raised by each certified capital company with respect to certified capital company program five at any time subsequent to its certification date, and credits shall be allocated to and vested in certified investors at the time of each such investment as provided in this paragraph, although such credits shall not be first allowed or incurred for state tax purposes, until, at the earliest, tax years beginning in two thousand seven. One-third of the certified capital raised by each certified capital company with respect to certified capital company program five shall be used to make qualified investments in qualified businesses located in empire zones established pursuant to article eighteen-B of the general municipal law, and one-third of such certified capital shall be used to make qualified investments in qualified businesses located in underserved areas outside such empire zones, provided, however, that in the case of an investment made by a certified capital company in an empire zone located in an underserved area, the certified capital company making such an investment may chose to designate such investment as an investment in an underserved area but not as an investment in an empire zone for the purpose of meeting the requirements of this paragraph. Fifty percent of the total amount of capital invested by a certified capital company at the time of one hundred percent investment of funds shall be invested in qualified businesses that are involved in commerce for the primary purpose of developing and manufacturing products and systems covered by the activities set forth in paragraph (b) of subdivision one of section thirty-one hundred two-e of the public authorities law and have a ratio of research and development expenditures to net sales which equals or exceeds six percent during the fiscal year immediately preceding the qualified investment.

(i) Maximum certified capital.

The maximum amount of certified capital per certified capital company program invested in one or more certified capital companies allowed in any one year to any one certified investor shall not exceed ten million dollars for certified capital company programs one and three, and eight million dollars for certified capital company programs two, four and five for such year, provided, however, that if the aggregate amount of certified capital for such year, as set forth in subdivision (h) of this section, has not been reached sixty days prior to the end of the year to which such aggregate amount applies, the provisions of this subdivision shall cease to apply for the remainder of such year. In addition, the aggregate amount of tax credits allowed in any taxable year to any affiliated group of taxpayers in relation to certified capital may not exceed such maximum amount, whether or not such taxpayers file a combined return pursuant to subdivision (f) of section fifteen hundred fifteen of this chapter. For purposes of the preceding sentence, the term "affiliated group" shall have the same meaning as described in section 1504 of the internal revenue code, except that the references to "at

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least eighty percent" in such section 1504 shall be read as "more than fifty percent". (j) Reports.

The superintendent shall report to the governor, the temporary president of the senate, and the speaker of the assembly, on or before June first of each year beginning in the year two thousand, the number of certified capital companies holding certified capital; the amount of certified capital invested in each certified capital company; the cumulative amount that each certified capital company has invested as of January first of the year two thousand and the cumulative total each year thereafter; the cumulative amount that the investments of each certified capital company have leveraged in terms of capital invested by other sources of capital in qualified businesses at the same time or subsequent to investments made by a certified capital company in such businesses; the total amount of tax credits granted under this section each year that credits have been awarded under this section and subdivision (k) of section fifteen hundred eleven of this chapter; the performance of each certified capital company with regard to the requirements for recertification set forth in subdivision (c) of this section; the classification of companies in which each certified capital company has invested according to industrial sector and size of company; the total gross number of jobs created by investments made by each certified capital company using certified capital and the number of jobs retained; the location of companies in which each certified capital company has invested in a manner to indicate if the requirements for qualified investments in qualified businesses located in empire zones established pursuant to article eighteen-B of the general municipal law set forth for programs three, four and five and in underserved areas outside such empire zones have been met; the total gross number of jobs created in empire zones established pursuant to article eighteen-B of the general municipal law and in underserved areas outside such empire zones made by each certified capital company using certified capital in certified capital company programs three, four and five, reported by geographic location of each empire zone and underserved area and the number of jobs retained; and those certified capital companies that have been decertified, or have had their certifications revoked, including the reasons for decertification or revocation.

(k) Rules and regulations. The superintendent, in consultation with the department of taxation and finance, shall prescribe such rules and regulations as he or she shall deem necessary in order to implement the provisions of this section within one hundred twenty days of the effective date of this section.

(1) For the purposes of this section, the term "empire zone" shall also include, in relation to investments made by a certified capital company in which at least fifty percent of the voting stock, capital, and membership interests, as the case may be, are owned by an entity that is managed directly or indirectly, by a non-profit corporation, the liberty zone as defined in section one of part AA of chapter three hundred eighty-three of the laws of two thousand one, the resurgence zone as defined in section one of part A of chapter three hundred eighty-three of the laws of two thousand one and a federal empowerment zone designated pursuant to section 1391 of the internal revenue code.

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NEW YORK TAX LAW ARTICLE 33 -- FRANCHISE TAXES ON INSURANCE

CORPORATIONS Current through L.2005, c.61, p.H. (Reformatted for readability.)

§ 1511 (k) Credit for certain investments in certified capital companies.

(1) A taxpayer shall be allowed a credit, to be computed as hereinafter provided, against the tax imposed by this article. The amount of the credit shall be equal to one hundred percent of an investment of certified capital in a certified capital company program made by the taxpayer pursuant to section eleven of this chapter.

(2) Ten percent of such credit shall be allowed in the taxable year to which such investment is allocated pursuant

to subdivision (h) of section eleven of this chapter and in each of the nine following taxable years. In addition, in any taxable year subsequent to the taxable year for which such investment is so allocated, any amount carried forward under paragraphs three and four of this subdivision may be carried forward indefinitely until such credits are utilized.

(3) No credit allowable pursuant to this subdivision shall reduce the tax payable under this article to less than the

minimum tax fixed by paragraph four of subdivision (a) of section fifteen hundred two of this article or by section fifteen hundred two-a of this article, whichever is applicable. If, however, the amount of credit allowable under this subdivision for any taxable year reduces the tax to such amount, any amount of credit not taken in such taxable year may be carried over to the following year or years and may be deducted from the taxpayer's tax for such year or years.

(4) If for any taxable year the credit allowable under paragraph two of this subdivision exceeds such minimum tax

for such taxable year, then the amount by which such credit exceeds such minimum tax liability shall be carried forward as a credit under paragraph two of this subdivision to the following year or years and may be deducted from the taxpayer's tax for such year or years.

(5) Decertification of a certified capital company from a certified capital company program shall cause the

disallowance and the recapture of the credit allowed under paragraph one of this subdivision, as follows:

(A) Decertification of a certified capital company from a certified capital company program within two years of its starting date prior to meeting the requirements of subparagraph (A) of paragraph one of subdivision (c) of section eleven of this chapter shall cause disallowance of one hundred percent of the credit allowed under paragraph one of this subdivision with respect to such certified capital company program and the recapture of any portion of such credit that was previously taken.

(B) Decertification of a certified capital company from a certified capital company program which, having met

all requirements of subparagraph (A) of paragraph one of subdivision (c) of section eleven of this chapter, subsequently fails to meet the requirements for continued certification under the provisions of subparagraph (B) of such paragraph one, shall cause the disallowance of eighty-five percent of the credit allowed under paragraph one of this subdivision with respect to such certified capital company program and recapture of any portion of such credit in excess of fifteen percent that was previously taken.

(C) Decertification of a certified capital company from a certified capital company program which, having met

all requirements of subparagraphs (A) and (B) of paragraph one of subdivision (c) of section eleven of this chapter, subsequently fails to meet the requirements for continued certification under the provisions of subparagraph (C) of such paragraph one, shall cause the disallowance of seventy percent of the credit

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allowed under paragraph one of this subdivision with respect to such certified capital company program and the recapture of any portion of such credit in excess of thirty percent that was previously taken.

(D) Decertification of a certified capital company from a certified capital company program pursuant to

paragraph two of subdivision (e) of section eleven of this chapter, other than on the grounds of the failure of such certified capital company to meet the requirements of subparagraphs (A), (B) or (C) of paragraph one of subdivision (c) of such section, shall not cause the disallowance of any of the credits allowed under paragraph one of this subdivision with respect to such certified capital company program, nor the recapture of any portion of such credits that was previously taken.

(E) If, after twelve years after a certified capital company receives an investment of certified capital under

certified capital company program four and any subsequent program, such certified capital company has failed to invest one hundred percent of its certified capital allocable to such certified capital company program in qualified investments, such certified capital company shall be required to pay to the department, for deposit in the general fund, an amount equal to two times the amount of net profits on qualified investments as required under paragraph five of subdivision (d) of section eleven of this chapter at such subsequent time when it has fully invested one hundred percent and has begun to make a distribution of its net profits; provided that such requirement shall not apply to a certified capital company in which at least fifty percent of the voting stock, capital, membership interests, or other beneficial ownership interests, as the case may be, are owned by an entity that is managed, directly or indirectly, by a non-profit corporation. This amount of payment to the department shall not be reduced by the amount set forth in paragraph six of subdivision (d) of section eleven of this chapter, and a certified capital company making a payment under this paragraph shall not be eligible to create a fund pursuant to such paragraph six of subdivision (d) of section eleven of this chapter for that particular certified capital company program.

(6) Revocation of certification from a certified capital company program pursuant to subdivision (f) of section

eleven of this chapter, before the later of (i) the third anniversary of the certification date of the certified capital company or (ii) the date on which the certified capital company satisfies the requirements of subparagraph (C) of paragraph one of subdivision (c) of section eleven of this chapter, shall cause disallowance of one hundred percent of the credit allowed under paragraph one of this subdivision with respect to such certified capital company program and the recapture of any portion of such credit that was previously taken.

(7) No credit shall be allowed in any tax year in which the taxpayer shall, individually or with or through one or

more affiliates, be a managing general partner of or underwrite or control the direction of investments of a certified capital company for which the credit was allowed under paragraph one of this subdivision. This provision shall not preclude a certified investor, insurance company or any other party from exercising its legal rights and remedies (which may include interim management of a certified capital company) in the event that a certified capital company is in default of its statutory obligations or its contractual obligations to such certified investor, insurance company or other party or from monitoring the certified capital company to ensure its compliance with section eleven of this chapter or disallowing any investments that have not been approved by the superintendent pursuant to subparagraph (D) of paragraph one of subdivision (c) of such section eleven. For purposes of this paragraph, affiliate shall mean a business entity in which the taxpayer holds at least a ten percent beneficial interest.

(8) A certified investor allowed a credit against its state tax liability earned through an investment in a certified

capital company shall not be required to pay any additional retaliatory tax levied pursuant to section eleven hundred twelve of the insurance law as a result of claiming such credit.

(9) A taxpayer is permitted to transfer or sell tax credits allowed under this subdivision, in whole or in part, to any

affiliate within an affiliated group of taxpayers, who are subject to tax in this state under this article. Such transfer or sale shall not affect the time schedule for claiming the credit transferred or sold. Any credit recaptured shall be the liability of the taxpayer who actually claimed the credit. The claim of a transferee shall be permitted in the same manner and subject to the same provisions and limitations of section eleven of this chapter as applied to the taxpayer to whom the credit was originally allowed. For purposes of this paragraph, the term "affiliated group" shall have the same meaning as described in section fifteen hundred four of the

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internal revenue code, without exclusion for a company listed under paragraph two of subsection (b) of section fifteen hundred four of the internal revenue code, except that the references to "at least eighty percent" in such section fifteen hundred four shall be read as "more than fifty percent". Whenever a taxpayer transfers or sells a tax credit pursuant to this paragraph, such taxpayer shall notify the department and the insurance department of such transfer or sale within forty-five days.

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