DEFINITION OF “INVESTMENTS”
For purpose of determining whether the Member qualifies as a “qualified purchaser” under the Company Act, the term Investments means:
- Securities (as defined by §2(a)(1) of the Securities Act of 1933, as amended (the “Securities Act”)), other than securities of an issuer that controls, is controlled by, or is under common control with the Member, unless the issuer of such securities is: (A) an investment company, a company that would be an investment company but for an exclusion provided by §3(c)(1) through §3(c)(9) of the Company Act or the exemptions provided by 17 CFR §270.3a-6 or 17 CFR §270.3a-7, or a commodity pool; (B) a company that files reports pursuant to §13 or §15(d) of the Securities Exchange Act of 1934, as amended, or has a class of securities that are listed on a “designated offshore securities market” as such term is defined by Regulation S under the Securities Act; or (C) a company with shareholders’ equity of not less than $50 million (determined in accordance with generally accepted accounting principles) as reflected on the company’s most recent financial statements, provided that such financial statements present the information as of a date within 16 months preceding the date on which the Member acquired an interest in the Fund;
- Real estate held for investment purposes. Real estate shall not be considered to be held for investment purposes by the Member if it is used by the Member or a “Related Person” (A) for personal purposes or as a place of business, or (B) in connection with the conduct of the trade or business of the Member or a Related Person, provided that real estate owned by the Member if the Member is engaged primarily in the business of investing, trading or developing real estate in connection with such business may be deemed to be held for investment purposes. Residential real estate shall not be deemed to be used for personal purposes if deductions with respect to such real estate are not disallowed by §280A of the Internal Revenue Code of 1986, as amended. A “Related Person” means a person who is related to the Member as a sibling, spouse or former spouse, or is a direct lineal descendant or ancestor by birth or adoption of the Member or is a spouse of such descendant or ancestor; provided that, in the case of a Family Company, a Related Person includes any owner of the Family Company and any person who is a Related Person of such owner;
- Commodity Interests held for investment purposes. “Commodity Interests” means commodity futures contracts, options on commodity futures contracts, and options on physical commodities which are traded on or subject to the rules of any contract market designated for trading such transactions under the Commodity Exchange Act and the rules thereunder or any board of trade or exchange outside the United States, as contemplated in Part 30 of the rules under the Commodity Exchange Act. A Commodity Interest owned by the Member who is engaged primarily in the business of investing, reinvesting, or trading in Commodity Interests in connection with such business may be deemed to be held for investment purposes;
- Physical Commodities held for investment purposes. “Physical Commodity” means any physical commodity with respect to which a Commodity Interest is traded on or subject to the rules of any contract market designated for trading such transactions under the Commodity Exchange Act and the rules thereunder or any board of trade or exchange outside the United States, as contemplated in Part 30 of the rules under the Commodity Exchange Act. A Physical Commodity owned by the Member who is engaged primarily in the business of investing, reinvesting, or trading in Physical Commodities in connection with such business may be deemed to be held for investment purposes;
- To the extent not securities, financial contracts (as such term is defined in §3(c)(2)(B)(ii) of the Company Act) entered into for investment purposes. A financial contract entered into by the Member who is engaged primarily in the business of investing, reinvesting, or trading in financial contracts in connection with such business may be deemed to be held for investment purposes;
- If the Member is a commodity pool or company that would be an investment company except that it is relying on an exception provided in §3(c)(1) or §3(c)(7) of the Company Act, any amounts payable to the Member pursuant to a firm agreement or similar binding commitment pursuant to which a person has agreed to acquire an interest in, or make capital contributions to, the Member upon the demand of the Member; and
- Cash and cash equivalents (including in currencies other than the U.S. dollar) held for investment purposes, including: (A) bank deposits, certificates of deposit, bankers acceptances and similar bank instruments held for investment purposes; and (B) the net cash surrender value of an insurance policy.