issuer and each other, freely transferable and registered under some provisions of the federal securities laws;
(b) the entity is an “operating company," meaning it is primarily engaged in the production or sale of a product or service other than the investment of capital either directly or through a majority-owned subsidiary or subsidiaries; or
(c) the entity is a “venture capital operating company,” meaning that at least 50% of its assets, determined on certain testing dates, are invested in operating companies with respect to which the entity has contractual management rights which the entity actually exercises in the ordinary course of its business; or
(d) there is no significant investment by benefit plan investors, which is defined to mean that less than 25% of the value of each class of equity interest is held by the employee benefit plans referred to above, IRAs and other employee benefit plans not subject to ERISA, including U.S. and non-U.S. governmental plans.
The General Partner intends to operate the General Partner and KUE in such fashion that, for purposes of the plan asset regulations, the assets of KUE and the General Partner will not be considered assets of any plan investing in KUE and the General Partner. The Limited Partnership Agreement (and the organizational documents of the General Partner) will confer on the General Partner (and the Principals) the authority to take any action necessary or desirable in order to prevent Company assets and General Partner assets from being considered to be plan assets, including the authority to restructure any aspects of KUE and the authority to cause the redemption or sale of Units held by some or ail plan investors.
KUE is considering whether and to what extent to permit plan investors to invest in the Units. Due to the complexity of the applicable rules and the penalties imposed upon persons involved in prohibited transactions, it is particularly important that potential purchasers that are plans consult with their counsel regarding the consequences under ERISA of their acquisition and ownership of the Units. Employee benefit plans that are governmental pians (as defined in Section 3(32) of ERISA) and certain church plans (as defined in Section 3(33) of ERISA) are not subject to ERISA requirements but may be subject to analogous provisions under applicable state, local or non-U.5. law.
17.3. Anti-Money Laundering — Cayman Islands
In order to comply with regulations aimed at the prevention of money laundering in any applicable jurisdictions, the General Partner and KUE are required to adopt and maintain anti-money laundering procedures, and may require prospective investors to provide evidence to verify their identity. Accordingly, the General Partner (and its directors) reserve the right to request such information as they consider necessary to verify the identity of a prospective investor. Where permitted, and subject to certain conditions, the General Partner and KUE may also delegate the maintenance of its anti-money laundering procedures (Including the acquisition of due diligence information) to a suitable person. The General Partner (and Its directors} may refuse to accept any subscription application if a prospective investor delays in producing or fails to produce any information required by the General Partner (and its directors) for the purpose of verification and, in that event, any funds received will be returned without interest to the account from which the moneys were originally debited.
The General Partner and KUE also reserve the right to refuse to make any redemption payment to a shareholder of the General Partner or a partner of KUE, as applicable, if hey suspect or are advised that the payment of redemption proceeds to such person might result in a breach of applicable anti-money laundering or other laws or regulations by any person in any relevant jurisdiction, or if such refusal is considered necessary or appropriate to ensure the compliance by the General Partner and KUE with any such laws or regulations in any applicable jurisdiction.
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