Glossary

Accredited Investor: Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer or general partner of a general partner of that issuer.

Any natural person whose individual net worth, or joint net worth with that person's spouse, at the time of his purchase exceeds $1,000,000.

Any natural person who had individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year.

Any trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase of the securities is directed by a person who has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment.

Any organization that was not formed for the purpose of acquiring the securities being sold, with total assets in excess of $5,000,000.

And, any entity in which all of the equity owners are Accredited Investors.

Ask: The lowest price that any investor or dealer has declared that he/she will sell a given security or commodity for. For over-the-counter stocks, the ask is the best quoted price at which a Market Maker is willing to sell a stock. For mutual funds, the ask is the net asset value plus any sales charges. also called asked price or asking price or offering price.

Bid: The highest price any buyer is willing to pay for a given security at a given time; also called bid price. Quoted bid is a maximum price that a market maker will pay for a security.

Call: An option contract that gives the holder the right to buy a certain quantity (usually 100 shares) of an underlying security from the writer of the option, at a specified price (the strike price) up to a specified date (the expiration date). also called call option.

Collateral: Cash and securities, including the Stock Loan Portfolio, or other assets pledged on behalf of the Borrower

Director: as defined in Section 16 of the Securities Exchange Act of 1934

DTC: The Depository Trust Company is a corporation owned by Wall Street Brokerage firms that acts as an intermediary in securities settlements. Ownership of stock and bond certificates is recorded on DTC’s operating platform. The electronic system registers the ownership of stocks and allows for paperless securities transfers.

DVP: A method of settling transactions whereby payment is made as the securities involved in the transaction are delivered and accepted. The term is often used to refer specifically to a transaction settled in this manner where a customer (typically an institutional investor) has purchased securities from a broker-dealer. The term is also used generally to refer to all types of transactions settled in this way.

Escrow Agent: Documents, real estate, money, or securities deposited with a neutral third party (the escrow agent) to be delivered upon fulfillment of certain conditions, as established in a written agreement.

Financing Terms Addenda: The final Fund document defining share price and funding date.

Form G-1: A Federal Reserve form

Form G-3: A Federal Reserve form

Form G-4: A Federal Reserve form

Hedge Fund: A fund, usually used by wealthy individuals and institutions, which is allowed to use aggressive strategies that are unavailable to mutual funds, including selling short, leverage, program trading, swaps, arbitrage, and derivatives. Hedge funds are exempt from many of the rules and regulations governing other mutual funds, which allows them to accomplish aggressive investing goals. They are restricted by law to no more than 100 investors per fund, and as a result most hedge funds set extremely high minimum investment amounts, ranging anywhere from $250,000 to over $1 million

Loan: A non-recourse structured financing and custodial services to a borrower with respect to one or more publicly traded stocks to be pledged as security as part of a Stock Loan Portfolio and Financing Terms Addenda.

LTV: The ratio of the fair market value of an asset to the value of the loan that will finance the transaction. Loan-to-value tells the lender if potential losses due to nonpayment may be recouped by selling the asset.

Margin Call: A call from a broker to a customer (called a maintenance margin call) or from a clearinghouse to a clearing member (called a variation margin call) demanding the deposit of cash or marginable securities to satisfy the Regulation T requirements and the house maintenance requirement for the purchase or short sale of securities or to cover an adverse price movement. also called federal margin call or Reg. T Call (for NASD requirements) or house call (for brokerage requirements).

Master Loan Agreement: The main Fund document outlining in the Terms and Conditions for a Borrower transaction.

Net Loan Proceeds: The exact loan amounts less Fees

Officer: as defined in Section 16 of the Securities Exchange Act of 1934

Principal Shareholder: as defined in Section 16 of the Securities Exchange Act of 1934

Put: An option contract that gives the holder the right to sell a certain quantity of an underlying security to the writer of the option, at a specified price (strike price) up to a specified date (expiration date); here also called put option.

Registered Investment Advisor: An advisor, registered with the Securities and Exchange Commission, who manages the investments of others.

Regulation T: A Federal Reserve Board regulation that governs customer cash accounts and the extension of credit by broker/dealers to customers to purchase and carry securities.

Regulation U: A Federal Reserve Board regulation that limits the amount of credit a bank can extend to customers for buying on margin.

Stock Loan Portfolio: All of a Borrower’s securities pledged through one or more Term Sheets and Financing Terms Addenda prior to Borrower receiving any Net Loan Proceeds, as well as any securities substituted by Borrower pursuant to Section 4(b) herein. As discussed in Section 4

Term Sheet: A non-binding document outlining the potential material terms and conditions relating to a Loan.

Transfer Agent: An agent employed by a corporation or mutual fund to maintain shareholder records, including purchases, sales, and account balances