Court Opinion

ID: 2970106
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:04:31.673364+00
Date Added: 2024-06-11T15:01:34.437397
License: Public Domain

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
            3XUVXDQW WR 6L[WK &LUFXLW 5XOH 

   (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU
               )LOH 1DPH DS

81,7('67$7(6&28572)$33($/6
              )257+(6,;7+&,5&8,7
                BBBBBBBBBBBBBBBBB

:21'(5/$1' 6+233,1*                ;
&(17(5 9(1785( /,0,7('              
3$571(56+,3                        
                                      1R
         3ODLQWLII$SSHOODQW       
                                     !
                                    
0$&20% 0$// $662&,$7(6              
/,0,7(' 3$571(56+,3HWDO        
                      3ODLQWLIIV 
                                    
              Y                    
                                    
                                    
&'& 0257*$*( &$3,7$/               
,1&HWDO                       
         'HIHQGDQWV$SSHOOHHV 
                                    
                                   1
       $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
      IRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQDW'HWURLW
   1Rn'HQLVH3DJH+RRG'LVWULFWsXGJH
               $UJXHG2FWREHU
        'HFLGHGDQG)LOHG'HFHPEHU

                            
     :RQGHUODQG6KRSSLQJ&HQWHU                       1R
      HWDOY&'&0RUWJDJHHWDO

    %HIRUHs21(6DQG&/$<&LUFXLWsXGJHV'2:'
                     'LVWULFWsXGJH
                       BBBBBBBBBBBBBBBBB
                            &2816(/
$5*8('  , : :LQVWHQ +21,*0$1 0,//(5
6&+:$57= 	 &2+1 'HWURLW 0LFKLJDQ IRU $SSHOODQW
.DWKOHHQ$/DQJ',&.,1621:5,*+73//&'HWURLW
0LFKLJDQ (ULF 6 5RVHQWKDO %$55,6 6277 '(11 	
'5,.(5'HWURLW0LFKLJDQIRU$SSHOOHHV21%5,(),
: :LQVWHQ +21,*0$1 0,//(5 6&+:$57= 	
&2+1'HWURLW0LFKLJDQIRU$SSHOODQW5REHUW3+XUOEHUW
',&.,1621 :5,*+7 3//& 'HWURLW 0LFKLJDQ IRU
$SSHOOHHV
                       BBBBBBBBBBBBBBBBB
                           23,1,21
                       BBBBBBBBBBBBBBBBB
  &/$< &LUFXLW sXGJH  3ODLQWLII :RQGHUODQG 6KRSSLQJ
&HQWHU9HQWXUH/LPLWHG3DUWQHUVKLSm:RQGHUODQGlDSSHDOV
IURPWKHGLVWULFWFRXUWjVRUGHUGHQ\LQJ3ODLQWLIIjVPRWLRQVIRU
SUHOLPLQDU\LQMXQFWLRQDQGVXPPDU\MXGJPHQWDQGJUDQWLQJ
VXPPDU\MXGJPHQWLQIDYRURI'HIHQGDQWV&'&0RUWJDJH
&DSLWDO ,QF &'& 'HSRVLWRU 7UXVW 67 , /D6DOOH 1DWLRQDO
%DQNDQG&'&'HSRVLWRU7UXVW67,&RPPHUFLDO0RUWJDJH
3DVV7KURXJK &HUWLILFDWHV 6HULHV 67, RQ 3ODLQWLIIjV
FODLP IRU EUHDFK RI FRQWUDFW XQGHU 0LFKLJDQ ODZ DQG
'HIHQGDQWVjFRXQWHUFODLPUHTXHVWLQJGHFODUDWRU\MXGJPHQWRI
WKH SDUWLHVj ULJKWV DQG OLDELOLWLHV XQGHU D FRQWUDFW  )RU WKH
UHDVRQVVHWIRUWKEHORZZH$)),50WKHRUGHURIWKHGLVWULFW
FRXUW

    
     7KH +RQRUDEOH 'DYLG ' 'RZG sU 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU
WKH 1RUWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ
    :RQGHUODQG6KRSSLQJ&HQWHU                  1R      1R                :RQGHUODQG6KRSSLQJ&HQWHU             
      HWDOY&'&0RUWJDJHHWDO                                                           HWDOY&'&0RUWJDJHHWDO

                      &21&/86,21                                                           %$&.*5281'
  )RU WKH DERYH UHDVRQV ZH $)),50 WKH GLVWULFW FRXUWjV       2Q sDQXDU\   3ODLQWLII DQG QRQDSSHDOLQJ FR
RUGHU JUDQWLQJ VXPPDU\ MXGJPHQW IRU 'HIHQGDQWV RQ             SODLQWLIIV0DFRPE0DOO$VVRFLDWHV/3m0DFRPE0DOOl
3ODLQWLIIjV EUHDFK RI FRQWUDFW FODLP GHQ\LQJ VXPPDU\         DQG&ROXPEXV0DOO$VVRFLDWHV/3m&ROXPEXV0DOOlILOHG
MXGJPHQW IRU 3ODLQWLII DQG GHQ\LQJ 3ODLQWLIIjV PRWLRQ IRU   VXLWDJDLQVW'HIHQGDQWV&'&0RUWJDJH&DSLWDO,QF&'&
SUHOLPLQDU\LQMXQFWLRQRIDPRUWJDJHIRUHFORVXUH                   'HSRVLWRU 7UXVW 67 , DQG &'& 'HSRVLWRU 7UXVW 67 ,
                                                                    &RPPHUFLDO0RUWJDJH3DVV7KURXJK&HUWLILFDWHV67,
                                                                    IRUEUHDFKRIWKUHHORDQDJUHHPHQWVSXUVXDQWWR0LFKLJDQODZ
                                                                    ,Q WKHLU DQVZHU ILOHG RQ )HEUXDU\   'HIHQGDQWV
                                                                    DVVHUWHGFRXQWHUFODLPVUHTXHVWLQJDGHFODUDWLRQRIWKHULJKWV
                                                                    DQGREOLJDWLRQVRIWKHSDUWLHVXQGHUDFRQWUDFWXDOSURYLVLRQ
                                                                    FRPPRQWRDOOWKUHHORDQDJUHHPHQWV2Q0DUFK
                                                                    3ODLQWLIIDQGWKHQRQDSSHDOLQJFRSODLQWLIIVILOHGDQDPHQGHG
                                                                    FRPSODLQW MRLQLQJ 'HIHQGDQW /D6DOOH 1DWLRQDO %DQN
                                                                    m/D6DOOHl DQG DGGLQJ D UHTXHVW IRU DQ LQMXQFWLRQ RI D
                                                                    PRUWJDJHIRUHFORVXUHDQQRXQFHGE\'HIHQGDQWV
                                                                      3XUVXDQWWRWKHGLVWULFWFRXUWjVH[SHGLWHGVFKHGXOLQJRUGHU
                                                                    RQ $SULO   'HIHQGDQWV ILOHG D PRWLRQ IRU VXPPDU\
                                                                    MXGJPHQW ZLWK UHJDUG WR WKH EUHDFK RI FRQWUDFW FODLPV
                                                                    3ODLQWLIIRSSRVHG'HIHQGDQWVjPRWLRQILOLQJDFURVVPRWLRQ
                                                                    IRU VXPPDU\ MXGJPHQW DQG D PRWLRQ IRU D SUHOLPLQDU\
                                                                    LQMXQFWLRQDJDLQVWDIRUHFORVXUHVDOHRQ$SULO&R
                                                                    SODLQWLIIV 0DFRPE 0DOO DQG &ROXPEXV 0DOO VXEVHTXHQWO\
                                                                    VHWWOHG WKHLU FODLPV DJDLQVW 'HIHQGDQWV DQG RQ $SULO 
                                                                    WKHGLVWULFWFRXUWGLVPLVVHGWKHLUFODLPV
                                                                      7KHGLVWULFWFRXUWKHOGDKHDULQJRQWKHVXPPDU\MXGJPHQW
                                                                    PRWLRQVDQG3ODLQWLIIjVPRWLRQIRUSUHOLPLQDU\LQMXQFWLRQRQ
                                                                    0D\7ZRGD\VODWHURQ0D\WKHGLVWULFWFRXUW
                                                                    JUDQWHG 'HIHQGDQWVj PRWLRQ IRU VXPPDU\ MXGJPHQW DQG
                                                                    GHQLHG 3ODLQWLIIjV PRWLRQ IRU VXPPDU\ MXGJPHQW DQG
                                                                    SUHOLPLQDU\ LQMXQFWLRQ  7KH GLVWULFW FRXUW DFFHSWHG
                                                                    'HIHQGDQWVj FRQVWUXFWLRQ RI D NH\ GLVSXWHG FRQWUDFW
                                                                    SURYLVLRQDQGWKXVFRQFOXGHGDSUHOLPLQDU\LQMXQFWLRQZDV
                                                                    XQQHFHVVDU\EHFDXVH3ODLQWLIIFRXOGQRWVKRZOLNHOLKRRGRI
                                                                    VXFFHVVRQWKHPHULWV(YHQWKRXJKWKHGLVWULFWFRXUWUHMHFWHG
                                                                    3ODLQWLIIjV UHTXHVW IRU D SUHOLPLQDU\ LQMXQFWLRQ WKH GLVWULFW
     :RQGHUODQG6KRSSLQJ&HQWHU                      1R       1R                 :RQGHUODQG6KRSSLQJ&HQWHU             
      HWDOY&'&0RUWJDJHHWDO                                                                 HWDOY&'&0RUWJDJHHWDO

FRXUWFRQFOXGHGWKDWDVHFXULW\ERQGRIPLOOLRQZRXOG                 % 5XOHF%RQG
KDYHEHHQDSSURSULDWHSXUVXDQWWR)HG5&LY3FLID
SUHOLPLQDU\LQMXQFWLRQKDGLVVXHG                                          )HGHUDO 5XOH RI &LYLO 3URFHGXUH F SURYLGHV  m1R
                                                                         UHVWUDLQLQJRUGHURUSUHOLPLQDU\LQMXQFWLRQVKDOOLVVXHH[FHSW
   2Q0D\WKH6KHULIIRI:D\QH&RXQW\0LFKLJDQ                XSRQWKHJLYLQJRIVHFXULW\E\WKHDSSOLFDQWLQVXFKVXPDV
FRQGXFWHGDPRUWJDJHIRUHFORVXUHVDOHRQWKHSURSHUW\VXEMHFW            WKH GLVWULFW FRXUW GHHPV SURSHUl  (YHQ WKRXJK WKH GLVWULFW
WR WKH ORDQ DJUHHPHQW  'HIHQGDQW /D6DOOH SXUFKDVHG WKH          FRXUWGHQLHGWKHSUHOLPLQDU\LQMXQFWLRQDQGGHWHUPLQHGWKH
SURSHUW\                                                                LVVXHRIDERQGZDVPRRWWKHGLVWULFWFRXUWDQDO\]HGWKHLVVXH
                                                                         DQGFRQFOXGHGDPLOOLRQERQGZRXOGEHDSSURSULDWHKDG
                               )DFWV                                     WKHLQMXQFWLRQLVVXHG
   3ODLQWLII:RQGHUODQGLVD0LFKLJDQOLPLWHGSDUWQHUVKLSZLWK              3ODLQWLII FKDOOHQJHV WKH GLVWULFW FRXUWjV FDOFXODWLRQ RI D
LWV SULQFLSDO SODFH RI EXVLQHVV LQ 6RXWKILHOG 0LFKLJDQ          VHFXULW\ERQG:HUHIUDLQIURPUXOLQJRQWKLVFKDOOHQJH5XOH
3ODLQWLII RZQV DQG RSHUDWHV D VKRSSLQJ PDOO LQ /LYRQLD          FGRHVQRWPDQGDWHVHWWLQJRIVHFXULW\DEVHQWLVVXDQFHRI
0LFKLJDQ2Q'HFHPEHU1RPXUD$VVHW&DSLWDO                    D UHVWUDLQLQJ RUGHU RU SUHOLPLQDU\ LQMXQFWLRQ  7KH GLVWULFW
&RUSRUDWLRQ m1$&&l ORDQHG 3ODLQWLII                  FRXUWjVUHIXVDOWRHQMRLQWKHIRUHFORVXUHUHQGHUHG PRRWWKH
SXUVXDQW WR D ORDQ DJUHHPHQW mWKH DJUHHPHQWl RU mWKH            SURSULHW\ DQG DPRXQW RI VHFXULW\ XQGHU 5XOH F
FRQWUDFWlDQGSURPLVVRU\QRWHmWKHQRWHl,QHDUO\             0RUHRYHUWKHGLVWULFWFRXUWGLGQRWDFWXDOO\LPSRVHRUUHTXLUH
1$&&WUDQVIHUUHGWKHORDQWRLWVDIILOLDWH1RPXUD'HSRVLWRU              3ODLQWLIIWRSRVWVHFXULW\%HFDXVHZHKDYHFRQFOXGHGWKDWWKH
7UXVW 67 , m1RPXUD 'HSRVLWRUl ZKLFK VXEVHTXHQWO\                GLVWULFWFRXUWSURSHUO\UHIXVHGWRHQMRLQWKHIRUHFORVXUHRXU
DVVLJQHGWKLVDQGRWKHUORDQVWRDWUXVW1RPXUD'HSRVLWRU               H[SUHVVLQJDQRSLQLRQRQWKHSURSULHW\RIWKHGLVWULFWFRXUWjV
7UXVW 67 , &RPPHUFLDO 3DVV7KURXJK &HUWLILFDWHV 6HULHV             IRUHFDVWRIZKDWLWZRXOGKDYHGRQHKDGDQLQMXQFWLRQLVVXHG
67, mWKH 7UXVWl  'HIHQGDQW /D6DOOH D QDWLRQDOO\         ZLOO QRW DIIHFW WKH ULJKWV RU LQWHUHVWV RI HLWKHU SDUW\  &I
FKDUWHUHGEDQNZLWKLWVSULQFLSDOSODFHRIEXVLQHVVLQ&KLFDJR          sRKQVRQY7XUQHU)GWK&LUmD
,OOLQRLVZDVWKHWUXVWHHIRUWKH7UXVW                                 IHGHUDO FRXUW KDV QR MXULVGLFWLRQ WR KHDU D FDVH WKDW FDQQRW
                                                                         DIIHFWWKHOLWLJDQWVjULJKWVlFLWDWLRQRPLWWHG*HRUJH)LVKHU
  2Q$XJXVW'HIHQGDQW&'&0RUWJDJH&DSLWDO,QF                )RXQGU\ 6\V ,QF Y $GROSK + +RWWLQJHU 0DVFKLQHQEDX
m&0&,lD1HZ<RUNFRUSRUDWLRQZLWKLWVSULQFLSDOSODFHRI             *PE+  )G   WK &LU  DSSO\LQJ WKH
EXVLQHVVLQ1HZ<RUN&LW\DFTXLUHGWKHORDQVIURP1$&&                 SULQFLSOHWKDWIHGHUDOFRXUWVODFNWKHSRZHUWRUHQGHUDGYLVRU\
LQFOXGLQJ DOO RI 1$&&jV ULJKWV REOLJDWLRQV DQG OLDELOLWLHV      RSLQLRQVDQGWRUHVROYHLVVXHVWKDWKDYHQRHIIHFWRQWKHULJKWV
XQGHUWKHORDQDJUHHPHQWEHWZHHQ1$&&DQG3ODLQWLII:LWK               RI OLWLJDQWV  3ODLQWLIIjV FKDOOHQJH WR WKH GLVWULFW FRXUWjV
WKLVDFTXLVLWLRQWKH7UXVWEHFDPHNQRZQDV&'&'HSRVLWRU                FDOFXODWLRQRIVHFXULW\LVWKHUHIRUHWDQWDPRXQWWRUHTXHVWLQJ
7UXVW67,&RPPHUFLDO0RUWJDJH3DVV7KURXJK&HUWLILFDWHV                 D GLVIDYRUHG DGYLVRU\ RSLQLRQ IURP WKLV &RXUW  6HH ,QWjO
6HULHV67,7KH7UXVWLVWKHKROGHURIWKHORDQVDQG             8QLRQ8QLWHG$XWR$HURVSDFH$JULF	,PSOHPHQW:RUNHUV
&0&,jV DIILOLDWH 'HIHQGDQW &'& 'HSRVLWRU 67 , LV WKH           RI$PY'DQD&RUS)GWK&LU
GLUHFWLQJ KROGHU RI WKH 7UXVW ZLWK WKH ULJKW WR WDNH FHUWDLQ   HQEDQF
DFWLRQV ZLWK UHJDUG WR WKH ORDQV LQ WKH 7UXVW  /D6DOOH
UHPDLQHGWUXVWHHIRUWKH7UXVW
    :RQGHUODQG6KRSSLQJ&HQWHU                    1R       1R               :RQGHUODQG6KRSSLQJ&HQWHU            
      HWDOY&'&0RUWJDJHHWDO                                                             HWDOY&'&0RUWJDJHHWDO

 $QH[DPLQDWLRQRIWKHRWKHUSUHOLPLQDU\LQMXQFWLRQIDFWRUV             7KHORDQH[WHQGHGWR3ODLQWLIILVFDOOHGDm5HYHUVH(DUQ
FRQILUPVWKLVFRQFOXVLRQ$OWKRXJK3ODLQWLIIZRXOGVXVWDLQ            2XW/RDQlDW\SHRIORDQVHFXUHGRQSURSHUWLHVZLWKFXUUHQWO\
LUUHSDUDEOH LQMXU\ WKURXJK D IRUHFORVXUH LQ WHUPV RI ORVLQJ    XQVWDEOHFDVKIORZVH[SHFWHGWRH[SHULHQFHLPSURYHPHQWLQ
XQLTXH UHDO SURSHUW\ HQMRLQLQJ WKH IRUHFORVXUH ZRXOG DOVR      WKHIXWXUH,QUHFRJQLWLRQRIWKLVH[SHFWHGLPSURYHPHQWWKH
KDYHDGHOHWHULRXVHIIHFWRQ'HIHQGDQWVZKRZRXOGKDYHWR             RULJLQDOORDQDPRXQWZDVEDVHGRQ3ODLQWLIIjVDQWLFLSDWHGQHW
GHOD\DQ\VDOHRIWKHSURSHUW\LQDQXQFHUWDLQHFRQRP\DQG             RSHUDWLQJLQFRPHm12,l'XULQJWKHILUVWWKUHH\HDUVRIWKH
FRQWLQXHWRUHO\RQWKHIXQGVLQWKH&DVK7UDSIRUWKHPDOOjV          ORDQWKHORDQDJUHHPHQWREOLJDWHG3ODLQWLIIWRPDNHLQWHUHVW
RSHUDWLQJH[SHQVHV3ODLQWLIIDOVRSUHGLFWVGUDPDWLFKDUPWR          SD\PHQWV RQO\ EXW VHW SHUIRUPDQFH JRDOV IRU 3ODLQWLII
PDOO WHQDQWV LQ WKH HYHQW RI D PRUWJDJH IRUHFORVXUH           3ODLQWLIIjVVWDWHGWKUHH\HDUJRDOLQWKHODQJXDJHRIWKHORDQ
3ODLQWLIIjVFRQFHUQIRUDQDEUXSWPDVVHYLFWLRQRIPDOOWHQDQWV        DJUHHPHQWZDVDm6WDELOL]DWLRQ12,>WKDW@SURGXFHVD'HEW
LVKRZHYHUVRPHZKDWEHOLHGE\'HIHQGDQWVjFRQFHUQIRUWKH            6HUYLFH&RYHUDJH5DWLRRI>JUHDWHUWKDQ@WRls$DW
ILQDQFLDOUDPLILFDWLRQVRIGHOD\LQJWKHIRUHFORVXUHDQGWKUHH          ,QRWKHUZRUGVWKHORDQDJUHHPHQWJDYH3ODLQWLIIWKUHH
WHQDQWVj YDFDWLRQ RI WKH SURSHUW\  )LQDOO\ 3ODLQWLII DQG     \HDUVWRDWWDLQQHWRSHUDWLQJLQFRPHVXIILFLHQWWRFRYHU
'HIHQGDQWVRIIHUVRXQGSROLF\UHDVRQVLQVXSSRUWRIDQGLQ             RILWVGHEW
RSSRVLWLRQWRHQMRLQLQJWKHIRUHFORVXUH3ODLQWLIIVXJJHVWVWKDW
SXEOLF SROLF\ VHHNV WR SURWHFW FRQVXPHUV IURP ZURQJIXO            ,IDIWHUWKUHH\HDUV3ODLQWLIIKDGQRWDWWDLQHGWKLVJRDOWKHQ
IRUHFORVXUHVRQSURSHUW\DQGWKDWWKHSXEOLFLQWHUHVWIDYRUV          WKHORDQDJUHHPHQWSURYLGHVDPHFKDQLVPIRUmUHVL]LQJlRU
WKHLQWHJULW\RIVHFXULWLHVPDUNHWV$OORZLQJ'HIHQGDQWVWR           UHGXFLQJ WKH ORDQ DPRXQW WR D OHYHO VXIILFLHQW WR DOORZ
WDNHDSRVLWLRQFRQWUDU\WRWKHUHSUHVHQWDWLRQVRIWKHRIIHULQJ        3ODLQWLIIWRFRYHURILWVGHEW6HFWLRQERIWKHQRWH
FLUFXODUFRXOG3ODLQWLIIDUJXHVFRQWUDYHQHWKHSXEOLFLQWHUHVW       DQGVHFWLRQRIWKHDJUHHPHQWDGGUHVVPDWWHUVSHUWDLQLQJWR
LQ WKH VHFXULWLHV PDUNHWV  'HIHQGDQWV FRQWHQG WKDW SXEOLF     WKLVUHVL]LQJPHFKDQLVP6HFWLRQERIWKHQRWHSURYLGHV
SROLF\IDYRUVWKHHQIRUFHPHQWRIFRQWUDFWVDFFRUGLQJWRWKHLU
WHUPV'HIHQGDQWVIXUWKHUFRQWHQGWKDWHQMRLQLQJIRUHFORVXUH            ,I WKH 6WDELOL]DWLRQ 12, SURGXFHV D 'HEW 6HUYLFH
ZRXOGGHVWDELOL]HIDLWKLQ PRUWJDJHQRWHVFUHDWLQJVHFXULW\             &RYHUDJH 5DWLR EDVHG XSRQ WKH 2ULJLQDO 3ULQFLSDO
LQWHUHVWVLQUHDOHVWDWHILQDQFLQJ:HDJUHHZLWKWKHGLVWULFW          $PRXQWDQGWKH'HEW6HUYLFH&RQVWDQWRIOHVVWKDQ
FRXUWWKDWDOORIWKHVHSROLF\DUJXPHQWVDUHYDOLGDQGVWURQJ           WR3D\HHVKDOOKDYHWKHRSWLRQLQLWVVROHDQGDEVROXWH
DQG WKDW RYHUDOO WKH DUJXPHQWV IDYRU QHLWKHU 3ODLQWLII QRU     GLVFUHWLRQWRGHFUHDVHWKHSULQFLSDODPRXQWRIWKH/RDQ
'HIHQGDQWV                                                             WKH m5HVL]LQJl LQ RUGHU WR DFKLHYH D PLQLPXP 'HEW
                                                                         6HUYLFH&RYHUDJH5DWLRRIWREDVHGXSRQVXFK
  :H WKHUHIRUH ILQG QR DEXVH RI GLVFUHWLRQ E\ WKH GLVWULFW      UHGXFHG SULQFLSDO EDODQFH WKH m5HVL]HG 3ULQFLSDO
FRXUW LQ GHQ\LQJ 3ODLQWLIIjV PRWLRQ IRU D SUHOLPLQDU\             %DODQFHlDQGWKH'HEW6HUYLFH&RQVWDQWE\UHTXLULQJ
LQMXQFWLRQ                                                              >3ODLQWLII@ WR UHSD\ D SRUWLRQ RI WKH /RDQ ZLWKRXW
                                                                         SUHPLXP RU SHQDOW\ HTXDO WR WKH GLIIHUHQFH
                                                                         m'LIIHUHQFHlEHWZHHQLWKH2ULJLQDO3ULQFLSDO$PRXQW
                                                                         DQG LL WKH 5HVL]HG 3ULQFLSDO %DODQFH  7KH 5HVL]HG

                                                                            
                                                                             7KH QRWH LGHQWLILHV 1$&& DV m3D\HHl $V 1$&&jV VXFFHVVRUV LQ
                                                                       LQWHUHVW 'HIHQGDQWV DUH FRQVLGHUHG m3D\HHl
       :RQGHUODQG6KRSSLQJ&HQWHU                         1R   1R                :RQGHUODQG6KRSSLQJ&HQWHU           
        HWDOY&'&0RUWJDJHHWDO                                                               HWDOY&'&0RUWJDJHHWDO

    3ULQFLSDO %DODQFH VKDOO EH VXEMHFW WR DGMXVWPHQW LQ           WKH GLVWULFW FRXUW UHOLHG XSRQ FOHDUO\ HUURQHRXV ILQGLQJV RI
    DFFRUGDQFHZLWK6HFWLRQGEHORZ >3ODLQWLII@VKDOO               IDFW LPSURSHUO\ DSSOLHG WKH JRYHUQLQJ ODZ RU XVHG DQ
    UHSD\ WKH 'LIIHUHQFH WRJHWKHU ZLWK DOO DFFUXHG DQG            HUURQHRXVOHJDOVWDQGDUGl%RQQHOOY/RUHQ]R)G
    XQSDLGLQWHUHVWWKURXJKWKHHQGRIWKHLQWHUHVWFDOFXODWLRQ            WK &LU   m$ OHJDO RU IDFWXDO HUURU PD\ EH
    SHULRGLQZKLFKWKHUHSD\PHQWLVPDGHRQWKHGDWHWKH               VXIILFLHQW WR GHWHUPLQH WKDW WKH GLVWULFW FRXUW DEXVHG LWV
    m&RQYHUVLRQ'DWHlZKLFKLVWKHHOHYHQWKWKGD\RI                GLVFUHWLRQ+RZHYHUDEVHQWVXFKDQHUURUWKHGLVWULFWFRXUWjV
    WKHILUVWFDOHQGDUPRQWKIROORZLQJWKHFDOHQGDUPRQWKLQ              ZHLJKLQJDQGEDODQFLQJRIWKHHTXLWLHVLVRYHUUXOHGµRQO\LQ
    ZKLFK3D\HHQRWLILHV>3ODLQWLII@RI3D\HHjVGHWHUPLQDWLRQ             WKHUDUHVWRIFDVHVjl,QUH(DJOH3LFKHU,QGXV,QF
    RI WKH 'LIIHUHQFH  >3ODLQWLII@ PD\ RQO\ UHSD\ WKH            )GWK&LUTXRWLQJ1$$&3Y&LW\RI
    'LIIHUHQFHIURPDWKH%X\XS)HHSD\DEOHWR>3ODLQWLII@             0DQVILHOG2KLR)GWK&LU
    XQGHU6HFWLRQGEFDVKIURP>3ODLQWLII@ZKLFKGRHV
    QRW UHVXOW LQ D OLHQ RQ WKH /RDQ SURFHHGV RU WKH               7KHGLVWULFWFRXUWPXVWFRQVLGHUDQGEDODQFHIRXUIDFWRUVLQ
    0RUWJDJHG 3URSHUW\ RU F WKH SURFHHGV RI WKH                 GHFLGLQJZKHWKHUWRLVVXHDSUHOLPLQDU\LQMXQFWLRQWKH
    0H]]DQLQH)LQDQFLQJGHVFULEHGLQWKH/RDQ$JUHHPHQW                  PRYLQJSDUW\jVOLNHOLKRRGRIVXFFHVVRQWKHPHULWVWKH
                                                                          PRYLQJ SDUW\jV OLNHOLKRRG RI VXIIHULQJ LUUHSDUDEOH LQMXU\
s$ DW  IRRWQRWH  DGGHG  6HFWLRQ  RI WKH           DEVHQWWKHLQMXQFWLRQWKHUHTXHVWHGLQMXQFWLRQjVSRWHQWLDO
DJUHHPHQWKHDGHGm0H]]DQLQH)LQDQFLQJlSURYLGHV                        IRUFDXVLQJVXEVWDQWLDOKDUPWRRWKHUVDQGWKHGHJUHHWR
                                                                          ZKLFKWKHLQMXQFWLRQZRXOGVHUYHWKHSXEOLFLQWHUHVW6XVWHU
    ,I WKH 6WDELOL]DWLRQ 12, SURGXFHV D 'HEW 6HUYLFH               Y0DUVKDOO)GWK&LU
    &RYHUDJH5DWLRRIOHVVWKDQDQGDQG>3ODLQWLII@
    GRHVQRWLHOHFWWRUHSD\WKH'LIIHUHQFHLQFDVKSXUVXDQW              7KHGLVWULFWFRXUWYLHZHG3ODLQWLIIjVOLNHOLKRRGRIVXFFHVV
    WR LWV ULJKWV XQGHU WKH 1RWH RU LL SUHSD\ WKH /RDQ LQ    RQ WKH PHULWV DV WKH NH\ IDFWRU IRU GHWHUPLQLQJ WKH
    DFFRUGDQFHZLWKWKHSURYLVLRQVRI6HFWLRQ%RUURZHU              DSSURSULDWHQHVVRIDSUHOLPLQDU\LQMXQFWLRQ7KHGLVWULFWFRXUW
    VKDOOUHSD\WKH6HQLRU0H]]DQLQH/RDQ$PRXQWZLWKWKH                 FRQFOXGHG3ODLQWLIIKDGIDLOHGWRPHHWLWVEXUGHQRISURRIZLWK
    SURFHHGVRIVHQLRUPH]]DQLQHILQDQFLQJZKLFKVKDOOEH                 UHJDUG WR WKLV LVVXH ILQGLQJ WKH ORDQ DJUHHPHQW DQG QRWH
    SURYLGHG E\ /HQGHU RQ WKH IROORZLQJ WHUPV DQG                  FRQILUPHG 'HIHQGDQWVj GLVFUHWLRQ WR UHVL]H WKH ORDQ  2XU
    FRQGLWLRQV                                                  LQWHUSUHWDWLRQ RI WKH FRQWUDFW OHDGV WR WKH VDPH FRQFOXVLRQ
                                                                          VWDWHGE\WKHGLVWULFWFRXUWWKHFRQWUDFWJUDQWV'HIHQGDQWVWKH
s$ DW  IRRWQRWH  DGGHG  6HFWLRQV  DQG      GLVFUHWLRQDU\DXWKRULW\WRUHGXFHWKHSULQFLSDODPRXQWRIWKH
SURFHHG WR GHVFULEH mPH]]DQLQH ILQDQFLQJl D VHULHV RI             ORDQ%HFDXVHZHKDYHFRQFOXGHGWKDWVXPPDU\MXGJPHQWRQ
XQVHFXUHG ORDQV IRU WKH H[FHVV XQUHVL]HG ORDQ SULQFLSDO           3ODLQWLIIjV EUHDFK RI FRQWUDFW FODLP ZDV ZDUUDQWHG DQG
UHSD\DEOH RQO\ IURP DYDLODEOH FDVK EXW FRQYHUWLEOH E\              EHFDXVH mWKH SURRI UHTXLUHG IRU WKH SODLQWLII WR REWDLQ D
'HIHQGDQWVRUDVXFFHVVRULQWRHTXLW\LQWHUHVWVLQ3ODLQWLII             SUHOLPLQDU\LQMXQFWLRQLVPXFKPRUHVWULQJHQWWKDQWKHSURRI
                                                                          UHTXLUHGWRVXUYLYHDVXPPDU\MXGJPHQWPRWLRQl/HDU\Y
                                                                          'DHVFKQHU)GWK&LUZHFRQFOXGH
                                                                          3ODLQWLIIKDVIDLOHGWRVKRZDQ\OLNHOLKRRGRIVXFFHVVRQWKH
                                                                         PHULWVDQGDQLQMXQFWLRQRIWKHIRUHFORVXUHZDVQRWQHFHVVDU\
      7KH FRQWHQW RI  G LV QRW JHUPDQH WR WKLV DSSHDO

     
      7KH FRQWHQW RI   LV QRW JHUPDQH WR WKLV DSSHDO
     :RQGHUODQG6KRSSLQJ&HQWHU                         1R        1R                :RQGHUODQG6KRSSLQJ&HQWHU              
       HWDOY&'&0RUWJDJHHWDO                                                                    HWDOY&'&0RUWJDJHHWDO

 RQ ZKLFK GDWH WKH :RQGHUODQG 0DOO /RDQ ZLOO EH                    ,Q DQ DIILGDYLW VXEPLWWHG LQ RSSRVLWLRQ WR 'HIHQGDQWVj
UHVL]HG    l  s$ DW   3ODLQWLII DVFULEHV SDUWLFXODU   PRWLRQ IRU VXPPDU\ MXGJPHQW 'DYLG : 6FKRVWDN
PHDQLQJ WR WKH SUHVHQFH RI WKLV LQWHQWLRQ LQ WKH RIIHULQJ            m6FKRVWDNl SUHVLGHQW RI 3ODLQWLIIjV JHQHUDO SDUWQHU
FLUFXODUJLYHQWKHH[LVWHQFHRIFULPLQDODQGFLYLOSHQDOWLHVIRU             GLVFXVVHG WKH QHJRWLDWLRQV OHDGLQJ WR WKH ORDQ DJUHHPHQW
PLVVWDWHPHQWV XQGHU WKH VHFXULWLHV ODZV  0XFK RI WKH                 6KRVWDNVWDWHGWKDW1$&&RIILFLDOV
ODQJXDJHLQWKHRIIHULQJFLUFXODUKRZHYHULVKLJKO\WHQWDWLYH
)RU LQVWDQFH WKH ILUVW SDJH RI WKH FLUFXODU VWDWHV WKH 7UXVW         DOOWROGPHWKDWWKH/RDQVZRXOGEHSRROHGZLWKRWKHU
mZLOOFRQVLVWSULPDULO\RIDUHYROYLQJSRRORIFRPPHUFLDODQG                   ORDQVVRWKDWWKHULJKWVWRWKHSULQFLSDODQGLQWHUHVWIURP
PXOWLIDPLO\ PRUWJDJH ORDQV WKDW PD\ IURP WLPH WR WLPH EH               DOORIWKHVHSRROHGORDQVFRXOGEHVROGWRLQYHVWRUVLQD
FRPSULVHGRI>YDULRXVPRUWJDJHV@DQGPD\DOVRFRQVLVWRI                  VHFXULWLHVRIIHULQJWKH/RDQjVUHVL]LQJIHDWXUHIXQFWLRQHG
>YDULRXVVHFXULWLHV@WKDWZLOOEHWUDQVIHUUHGWRWKH7UXVW                DVDµSUHSDFNDJHGZRUNRXWSURYLVLRQjWKXVSUHYHQWLQJ
)XQGls$DWHPSKDVLVDGGHG&RQFHUQLQJWKH                 D GHIDXOW RU IRUHFORVXUH RI WKH /RDQV DQG WKHUHE\
PRUWJDJHV FRQWDLQHG LQ WKH 7UXVW WKH FLUFXODU VWDWHV m,W LV          IDFLOLWDWLQJ WKH VHFXULWLHV RIIHULQJ WKH OHQGHU ZDV
H[SHFWHGWKDWDVLJQLILFDQWSRUWLRQRIWKH&XUUHQW0RUWJDJH                     UHTXLUHG WR UHVL]H HDFK /RDQ LI D %RUURZHU GLG QRW
$VVHWVZLOOQRWUHPDLQLQWKH7UXVW)XQGIRUWKHOLIHRIWKH                    DFKLHYHWKHUHTXLUHG 12,VRDVWRDYRLGDGHIDXOWWKDW
&HUWLILFDWHVl  s$ DW   %HDULQJ WKHVH SURYLVLRQDO               ZRXOGLPSDLUWKHVHFXULWLHVRIIHULQJDQGWKHVHFXULWLHV
VWDWHPHQWVLQPLQGZHPXVWUHMHFW3ODLQWLIIjVDVVHUWLRQWKDW                   RIIHULQJ ZDV HQKDQFHG E\ WKH UHVL]LQJ IHDWXUH WKDW
WKHRIIHULQJFLUFXODUDPRXQWVWRVRPHVRUWRImVPRNLQJJXQl                    UHGXFHGWKHDPRXQWRIWKHVHFXUHG/RDQWRDOHYHOZKHUH
                                                                                WKH%RUURZHUZRXOGQRWEHLQGHIDXOW
  :H WKHUHIRUH FRQFOXGH WKDW WKH GLVWULFW FRXUW SURSHUO\
FRQVWUXHG WKH ORDQ DJUHHPHQW  7KH SURYLVLRQ RI WKH QRWH             s$DW
JUDQWLQJ'HIHQGDQWVGLVFUHWLRQWRUHVL]HLVLQFRUSRUDWHGLQWR
WKH ORDQ DQG GRHV QRW FRQIOLFW ZLWK RWKHU WHUPV RI WKH                 2Q 6HSWHPEHU   1RPXUD 'HSRVLWRU UHOHDVHG DQ
DJUHHPHQW7KHFRQWUDFWDQGLWVWHUPVDUHXQDPELJXRXVDQG                    mRIIHULQJ FLUFXODUl DV SDUW RI DQ HIIRUW WR LVVXH RYHU 
WKXVWKHGLVWULFWFRXUWSURSHUO\UHIXVHGWRFRQVLGHU3ODLQWLIIjV              ELOOLRQ LQ VHFXULWLHV mWKH RIIHULQJ FLUFXODUl  7KH RIIHULQJ
H[WULQVLF HYLGHQFH  7KH GLVWULFW FRXUW SURSHUO\ JUDQWHG               FLUFXODULGHQWLILHGDQGGHVFULEHGWKH7UXVWjVPRUWJDJHDVVHWV
VXPPDU\MXGJPHQWLQ'HIHQGDQWVjIDYRURQ3ODLQWLIIjVEUHDFK                   LQFOXGLQJ m5HYHUVH (DUQ2XW /RDQVl DQG VSHFLILFDOO\
RIFRQWUDFWFODLP                                                           GLVFXVVHG WKH ORDQ WR 3ODLQWLII  &RQFHUQLQJ WKLV ORDQ WKH
                                                                              FLUFXODUH[SODLQHGm7KH:RQGHUODQG0DOO/RDQLVD5HYHUVH
,, 027,21 )25 35(/,0,1$5< ,1s81&7,21                                      (DUQ2XW /RDQ ZKLFK ZLOO EH UHVL]HG WR D >'HEW 6HUYLFH
    $1'&$/&8/$7,212)%21'                                                   &RYHUDJH 5DWLR@ RI  EDVHG RQ D   GHEW VHUYLFH
                                                                              FRQVWDQWls$DW
  $ 0RWLRQIRU3UHOLPLQDU\,QMXQFWLRQ
                                                                                2Q 1RYHPEHU   1$&&jV VXFFHVVRU 'HIHQGDQW
  7KLV&RXUWUHYLHZVWKHGLVWULFWFRXUWjVGHQLDORIDPRWLRQ                  &0&,ZURWHWR6FKRVWDN7KHOHWWHUVWDWHGm%DVHGRQRXU
IRU D SUHOLPLQDU\ LQMXQFWLRQ IRU DEXVH RI GLVFUHWLRQ                  UHYLHZ RI WKH PRVW UHFHQW ILQDQFLDO UHSRUWV IRU HDFK RI WKH
&RQQHFWLRQ'LVWULE&RY5HQR)GWK&LU                  SURSHUWLHV VHFXULQJ WKH /RDQV &'& DQWLFLSDWHV WKDW HDFK
8QGHUWKLVVWDQGDUGWKH&RXUWZLOORYHUWXUQDGLVWULFW               %RUURZHUZLOOEHUHTXLUHGWRSD\GRZQDVLJQLILFDQWSRUWLRQ
FRXUWjVGHWHUPLQDWLRQUHJDUGLQJDSUHOLPLQDU\LQMXQFWLRQmLI                  RILWV/RDQRQWKH&RQYHUVLRQ'DWHsDQXDU\ls$
      :RQGHUODQG6KRSSLQJ&HQWHU                  1R      1R                 :RQGHUODQG6KRSSLQJ&HQWHU            
       HWDOY&'&0RUWJDJHHWDO                                                            HWDOY&'&0RUWJDJHHWDO

DW7KHOHWWHUWKHQUHTXHVWHGm>L@QFRQQHFWLRQZLWKRXU         :HDUHFRQYLQFHGWKDWQRDPELJXLW\H[LVWVZKHWKHURQWKH
GHWHUPLQDWLRQ RI WKH UHVL]HG /RDQ DPRXQWVl FHUWDLQ           IDFHRIWKHFRQWUDFWRULQOLJKWRI3ODLQWLIIjVH[WULQVLFHYLGHQFH
LQIRUPDWLRQ UHJDUGLQJ WKH SURSHUW\ VXEMHFW WR WKH ORDQ        &RQFHUQLQJWKHFRQWUDFWLWVHOI3ODLQWLIIIDLOVWRLGHQWLI\DWHUP
DJUHHPHQWs$DW7KHOHWWHUDOVRSURYLGHGDQDPH          RU SURYLVLRQ RI WKH FRQWUDFW UHDVRQDEO\ VXVFHSWLEOH WR WZR
DQGSKRQHQXPEHUIRUmTXHVWLRQVUHJDUGLQJWKHSHQGLQJORDQ           PHDQLQJV,QVWHDG3ODLQWLIIUHLWHUDWHVLWVIODZHGDQDO\VLVRI
UHVL]LQJSURFHVVls$DW                                  WKH RSHUDWLRQ RI WKH UHVL]LQJ PHFKDQLVP  $FFRUGLQJ WR
                                                                     3ODLQWLIIWKLV&RXUWQHHGVWRFRQVLGHUH[WULQVLFHYLGHQFHRI
  3ODLQWLII UHFHLYHG D VHFRQG OHWWHU IURP 'HIHQGDQWV RQ       WKH SDUWLHVj LQWHQW WR FUHDWH PDQGDWRU\ UHVL]LQJ LQ RUGHU WR
'HFHPEHU,QWKLVOHWWHU'HIHQGDQWVH[SODLQHGWKH\         DYRLGWKHmDEVXUGDQGLOORJLFDOUHVXOWlRILQWHUHVWSD\PHQWVLQ
ZHUHSXUVXDQWWRRIWKHQRWHHOHFWLQJQRWWRUHGXFHWKH        SHUSHWXLW\
ORDQDPRXQWjVSULQFLSDOEDODQFH7KHOHWWHUIXUWKHUH[SODLQHG
                                                                        $OWKRXJK WKH ORDQ DJUHHPHQW DQG WKH QRWH GHILQH WKH
    7KLVHOHFWLRQSURGXFHVD'LIIHUHQFHRI]HURDQGWKHUHIRU         FRQWUDFWjV HVVHQWLDO SURYLVLRQV LQ D VRPHZKDW FRPSOH[
    WKHERUURZHUZLOOQRWEHREOLJDWHGWRSUHSD\DQ\SRUWLRQ         PDQQHU WKH GHILQLWLRQV DUH FOHDU DQG XQDPELJXRXV
    RI WKH ORDQ RU WR HQWHU LQWR WKH PH]]DQLQH ORDQV        6SHFLILFDOO\3ODLQWLIIjVDQDO\VLVPLVFRQVWUXHVDQGPLVDSSOLHV
    FRQWHPSODWHGLQ6HFWLRQRIWKH/RDQ$JUHHPHQW7KH          WKH NH\ GHILQLWLRQV RI mWKH 'LIIHUHQFHl DQG m&RQYHUVLRQ
    ORDQVHUYLFHUZLOOEHQRWLILHGRIWKLVGHWHUPLQDWLRQDQG         'DWHlERWKRIZKLFKDUHDFFHVVLEOHWKURXJKFDUHIXOUHDGLQJRI
    VKDOOEHLQVWUXFWHGWREHJLQDPRUWL]LQJWKHORDQRQWKH          WKH FRQWUDFW   3URSHUO\ GHILQLQJ DQG DSSO\LQJ WKHVH WHUPV
    &RQYHUVLRQ'DWHLQDFFRUGDQFHZLWKWKHORDQGRFXPHQWV           ZLWKRXWJRLQJEH\RQGWKHORDQDJUHHPHQWDQGQRWHOHDGVWR
                                                                     DFRKHUHQWDQGXQDPELJXRXVFRPPHUFLDOWUDQVDFWLRQ:KLOH
s$DW7KHVDPHGD\'HIHQGDQWVQRWLILHG0DFRPE             FRPSUHKHQVLRQ RI WKLV FRPSOH[ FRPPHUFLDO ILQDQFLQJ
0DOODQG&ROXPEXV0DOORIWKHLUHOHFWLRQWRUHVL]HVLPLODU           DUUDQJHPHQWPD\UHTXLUHVRPHFRQWUDFWLQWHUSUHWDWLRQWKDW
ORDQVH[WHQGHGWR0DFRPE0DOODQG&ROXPEXV0DOO                   IDFWDORQHGRHVQRWUHQGHUWKHFRQWUDFWDPELJXRXV
  3ODLQWLII EHOLHYLQJ WKH ORDQ DJUHHPHQW REOLJDWHG               0RUHRYHUWKHmVROHDQGDEVROXWHGLVFUHWLRQlODQJXDJHLV
'HIHQGDQWVWRUHVL]HFDOFXODWHGWKHDPRXQWGXHLIWKHORDQ          XQDPELJXRXV&RQWUDU\WR3ODLQWLIIjVSUHGLFWLRQHQIRUFLQJ
DJUHHPHQWUHTXLUHGUHVL]LQJ3ODLQWLIIWKHQVHQWSD\PHQWWR         WKHmVROHDQGDEVROXWHGLVFUHWLRQlODQJXDJHGRHVQRWOHDGWR
'HIHQGDQWVj ORDQ VHUYLFHU IRU WKH DPRXQW RI SULQFLSDO DQG    DQ  DEVXUG RU LOORJLFDO UHVXOW  (YHQ LI WKLV SURYLVLRQ ZHUH
LQWHUHVWGXHIRUWKHUHVL]HGDPRXQWDVRIsDQXDU\          VRPHKRZDPELJXRXV3ODLQWLIIjVH[WULQVLFHYLGHQFHGRHVQRW
'HIHQGDQWVUHVSRQGHGE\QRWLI\LQJ3ODLQWLIILWKDGIDLOHGWR         H[SODLQWKHPHDQLQJRIDWHUPRIWKHFRQWUDFW3ODLQWLIIRIIHUV
PDNH IXOO SD\PHQW DQ HYHQW LW FRQVLGHUHG DQ m(YHQW RI      WKHHYLGHQFHDVDGLUHFWFRQWUDGLFWLRQWRWKHmVROHDQGDEVROXWH
'HIDXOWl'HIHQGDQWVUHTXLUHG3ODLQWLIIWRFXUHWKHPRQHWDU\        GLVFUHWLRQlODQJXDJHLQWKHFRQWUDFW
GHIDXOW E\ PDNLQJ D SULQFLSDO DQG LQWHUHVW SD\PHQW RQ WKH
XQUHVL]HGORDQE\sDQXDU\:KHQ3ODLQWLIIGLGQRW             )LQDOO\WKHH[WULQVLFHYLGHQFHLWVHOIGRHVQRWGHPRQVWUDWH
PDNHDFXUDWLYHSD\PHQW'HIHQGDQWVRQ)HEUXDU\            DQDPELJXLW\LQWKHSDUWLHVjDJUHHPHQW3ODLQWLIIjVRIIHULQJ
                                                                     FLUFXODUHYLGHQFHGRHVVXJJHVWDQXQGHUVWDQGLQJDWOHDVWDW
                                                                     WKH WLPH WKH FLUFXODU ZDV UHOHDVHG WKDW WKH ORDQ ZRXOG EH
                                                                     UHVL]HG7KHFLUFXODUVWDWHVm7KH:RQGHUODQG0DOO/RDQ
                                                                     UHTXLUHVIL[HGSD\PHQWVRILQWHUHVWRQO\ XQWLO)HEUXDU\
    :RQGHUODQG6KRSSLQJ&HQWHU                     1R       1R                  :RQGHUODQG6KRSSLQJ&HQWHU               
      HWDOY&'&0RUWJDJHHWDO                                                                 HWDOY&'&0RUWJDJHHWDO

  RUDO RU ZULWWHQ DUH VXSHUVHGHG E\ WKH WHUPV RI WKLV         GHFODUHG D m&DVK 7UDS (YHQWl XQGHU WKH ORDQ DJUHHPHQW
  $JUHHPHQWDQGWKHRWKHU/RDQ'RFXPHQWV                               UHTXLULQJ 3ODLQWLIIjV EDQN WR WUDQVIHU WR /D6DOOH DOO UHQWV
                                                                        UHFHLYHG E\ 3ODLQWLII  2Q 0DUFK   'HIHQGDQWVj
s$DW8QGHU0LFKLJDQODZWKLVLQWHJUDWLRQODQJXDJH           DWWRUQH\QRWLILHG3ODLQWLIIWKDWGXHWRWKHm(YHQWRI'HIDXOWl
FRQFOXVLYHO\HVWDEOLVKHVWKHILQDOLW\DQGFRPSOHWHQHVVRIWKH           RQsDQXDU\'HIHQGDQWZDVDFFHOHUDWLQJWKHGHEWVHFXUHG
ZULWWHQDJUHHPHQW6HH&RRN)GDW                        E\WKHORDQDJUHHPHQWDQGZRXOGIRUHFORVHRQWKHPRUWJDJH
                                                                        /D6DOOHSXUFKDVHGWKH:RQGHUODQG0DOOSURSHUW\DWD0D\
  6FKRVWDNjVDIILGDYLWVHHNVWRVKRZDQXQGHUVWDQGLQJWKDW              PRUWJDJHIRUHFORVXUHVDOHFRQGXFWHGE\WKH6KHULIIRI
WKH UHVL]LQJ PHFKDQLVP ZDV PDQGDWRU\ UDWKHU WKDQ                 :D\QH&RXQW\
GLVFUHWLRQDU\  7KLV DVVHUWLRQ GHVFULELQJ VWDWHPHQWV
FRQWHPSRUDQHRXVZLWKFRQWUDFWQHJRWLDWLRQVFRQWUDGLFWVWKH                                        ',6&866,21
mVROHDQGDEVROXWHGLVFUHWLRQlODQJXDJHRIERIWKHQRWH
7KH GLVWULFW FRXUW SURSHUO\ UHIXVHG WR FRQVLGHU 6FKRVWDNjV       , %5($&+2)&2175$&7&/$,0
DIILGDYLWSXUVXDQWWRWKHSDUROHYLGHQFHUXOH
                                                                          $ 7KH/RDQ$JUHHPHQW
   3ODLQWLIIXUJHVWKH&RXUWWRFRQVLGHU6FKRVWDNjVDIILGDYLW
DQGWKHRIIHULQJFLUFXODUXQGHUDGLIIHUHQWWKHRU\$FFRUGLQJ             7KHNH\DUHDRIGLVSXWHEHWZHHQWKHSDUWLHVLVZKHWKHUWKH
WR3ODLQWLIIWKHQRWHjVmVROHDQGDEVROXWHGLVFUHWLRQlODQJXDJH        ORDQ DJUHHPHQW LPSRVHG D PDQGDWRU\ RU GLVFUHWLRQDU\
LVDPELJXRXV%HFDXVHRIWKLVDPELJXLW\3ODLQWLIIFRQWHQGV            REOLJDWLRQRQ'HIHQGDQWVWRUHVL]HWKHORDQDPRXQW3ODLQWLII
6FKRVWDNjV DIILGDYLW DQG WKH RIIHULQJ FLUFXODU VKRXOG EH         DUJXHVWKHm0H]]DQLQH)LQDQFLQJlSURYLVLRQRIRIWKH
DGPLVVLEOHWRH[SODLQWKHPHDQLQJRIWKHORDQDJUHHPHQWDQG             ORDQ DJUHHPHQW FRQWUROOHG RYHU RWKHU SURYLVLRQV RI WKH
WKHSDUWLHVjLQWHUSUHWDWLRQRILW                                 FRQWUDFW DQG UHTXLUHG 'HIHQGDQWV WR UHVL]H  'HIHQGDQWV
                                                                        GLVDJUHHZLWK3ODLQWLIIjVLQWHUSUHWDWLRQRIWKHFRQWUDFWDUJXLQJ
  0LFKLJDQSHUPLWVWKHXVHRIH[WULQVLFHYLGHQFHWRGLVSRVH             WKDW WKH FRQWUDFW LQFRUSRUDWHG  E RI WKH QRWH DQG WKDW
RIDSRWHQWLDODPELJXLW\WRSURYHWKHH[LVWHQFHRIDSRWHQWLDO          E H[SOLFLWO\ PDGH UHVL]LQJ D PDWWHU IRU 'HIHQGDQWVj
DPELJXLW\RUWRLQGLFDWHWKHDFWXDOLQWHQWRIWKHSDUWLHVZKHUH        GLVFUHWLRQ  7KH GLVWULFW FRXUW FRQVWUXHG WKH FRQWUDFW DV
DQDFWXDODPELJXLW\H[LVWV$P$GQRGFR,QFY5H\QROGV              HQGRZLQJ 'HIHQGDQWV ZLWK WKH GLVFUHWLRQDU\ DXWKRULW\ WR
0HWDOV&R)GWK&LU:KHWKHUDQ              UHVL]H WKH ORDQ DQG JUDQWHG VXPPDU\ MXGJPHQW LQ
DPELJXLW\H[LVWVLQDZULWWHQFRQWUDFWLVDTXHVWLRQRIODZIRU         'HIHQGDQWVjIDYRURQWKHEUHDFKRIFRQWUDFWFODLP7KLV&RXUW
WKH&RXUWjVUHVROXWLRQ6DXOW6WH0DULH7ULEHRI&KLSSHZD             UHYLHZVWKHGLVWULFWFRXUWjVRUGHUJUDQWLQJVXPPDU\MXGJPHQW
,QGLDQV Y (QJOHU  )G   WK &LU   $     GH QRYR  :KLWH &RQVRO ,QGXV ,QF Y :HVWLQJKRXVH (OHF
FRQWUDFWRUWHUPLVDPELJXRXVLILWLVUHDVRQDEO\VXVFHSWLEOHWR        &RUS)GWK&LU
PRUHWKDQRQHPHDQLQJ5DVNDY)DUP%XUHDX0XW,QV&R
RI0LFK1:G0LFK$WWKHVDPH
WLPH D mFRXUW GRHV QRW KDYH WKH ULJKW WR PDNH D GLIIHUHQW
FRQWUDFWIRUWKHSDUWLHVRUWRORRNWRH[WULQVLFWHVWLPRQ\ WR              
GHWHUPLQHWKHLULQWHQWZKHQWKHZRUGVXVHGE\WKHPDUHFOHDU                  6HFWLRQ D RI WKH ORDQ DJUHHPHQW UHTXLUHV 3ODLQWLII WR NHHS DOO
                                                                        UHQWV LQ D SDUWLFXODU EDQN DFFRXQW DQG LQ WKH HYHQW RI D m&DVK 7UDS
DQG XQDPELJXRXV DQG KDYH D GHILQLWH PHDQLQJl  0LFK            (YHQWl UHTXLUHV 3ODLQWLIIjV EDQN WR WUDQVIHU WR 'HIHQGDQWVj EDQN WKH
&KDQGHOLHU&RY0RUVH1:0LFK                  GHSRVLWV FRQWDLQHG LQ WKLV DFFRXQW 6HFWLRQ D OLVWV DQ m(YHQW RI
                                                                        'HIDXOWl DV RQH RI VHYHUDO m&DVK 7UDS (YHQWVl
       :RQGHUODQG6KRSSLQJ&HQWHU                   1R       1R                :RQGHUODQG6KRSSLQJ&HQWHU             
         HWDOY&'&0RUWJDJHHWDO                                                             HWDOY&'&0RUWJDJHHWDO

  %HFDXVH WKLV LV D GLYHUVLW\ DFWLRQ LQ D PDWWHU ILOHG LQ D   DJUHHPHQW7KLVDEVHQFHRIFRQIOLFWUHTXLUHVXQGHU0LFKLJDQ
0LFKLJDQ GLVWULFW FRXUW WKH VXEVWDQWLYH ODZ RI 0LFKLJDQ          ODZDQGWKHFRQWUDFWLWVHOIWKHHQIRUFHPHQWRIERQHTXDO
DSSOLHV.OD[RQY6WHQWRU(OHF0IJ&R86            IRRWLQJ ZLWK RWKHU SURYLVLRQV RI WKH FRQWUDFW  'HIHQGDQWV
+LVULFKY9ROYR&DUVRI1$P,QF)G             SURSHUO\FDUULHGRXWWKHLUREOLJDWLRQVXQGHUWKHFRQWUDFWE\
 WK &LU   7KLV &RXUW PXVW IROORZ DQG DSSO\         HOHFWLQJDJDLQVWUHVL]LQJ
0LFKLJDQODZLQDFFRUGDQFHZLWKWKHFRQWUROOLQJGHFLVLRQVRI
WKH 6XSUHPH &RXUW RI 0LFKLJDQ  'HWURLW (GLVRQ &R Y             % 3ODLQWLIIjV([WULQVLF(YLGHQFH
1$%&2,QF)GWK&LU
                                                                           7KH H[WULQVLF HYLGHQFH 3ODLQWLII RIIHUV LQ VXSSRUW RI LWV
   $FRXUWjVSULPDU\UHVSRQVLELOLW\LQFRQVWUXLQJD0LFKLJDQ             FRPSHWLQJ LQWHUSUHWDWLRQ RI WKH QDWXUH RI WKH UHVL]LQJ
FRQWUDFWLVWRDVFHUWDLQDQGHQIRUFHWKHLQWHQWRIWKHSDUWLHV          PHFKDQLVP GRHV QRW DIIHFW RXU DQDO\VLV RI WKH FRQWUDFW RU
5DVKHHGY&KU\VOHU&RUS1:GQ0LFK                 UHVROXWLRQ RI WKLV DSSHDO  3ODLQWLIIjV H[WULQVLF HYLGHQFH
 6REF]DN Y .RWZLFNL  1:G   0LFK            FRQVLVWV RI    6FKRVWDNjV DIILGDYLW GHVFULELQJ
7KHFRXUW H[DPLQHVWKHFRQWUDFWDVDZKROHJLYLQJ               UHSUHVHQWDWLRQV PDGH E\ 1$&& RIILFLDOV GXULQJ ORDQ
HIIHFW WR DOO SDUWV DQG ODQJXDJH RI D ZULWWHQ DJUHHPHQW         QHJRWLDWLRQV LQ  DQG  1RPXUD 'HSRVLWRUjV 
DFFRUGLQJWRWKHLUmRUGLQDU\DQGQDWXUDOPHDQLQJl&LW\RI              RIIHULQJ FLUFXODU  0LFKLJDQ ODZ SHUPLWV FRQVLGHUDWLRQ RI
:\DQGRWWHY&RQVRO5DLO&RUS)GWK&LU             QHLWKHURIWKHVHLWHPVRIH[WULQVLFHYLGHQFH
FLWLQJ&RPHULFD%DQNY/H[LQJWRQ,QV&R)G
WK&LU6HHDOVR:RUNPRQY3XEOLVKHUV                  0LFKLJDQjV SDURO HYLGHQFH UXOH EDUV WKH XVH RI H[WULQVLF
&OHDULQJ +RXVH  )G   WK &LU                 HYLGHQFHWRFRQWUDGLFWWKHWHUPVRIDZULWWHQFRQWUDFWLQWHQGHG
H[SODLQLQJWKDW0LFKLJDQFRQWUDFWVDUHFRQVWUXHGDVDZKROH            WR EH WKH ILQDO DQG FRPSOHWH H[SUHVVLRQ RI WKH FRQWUDFWLQJ
DQGWKDWFRXUWVVKRXOGQRWHOLPLQDWHDQ\SDUWRUZRUGmXQOHVV            SDUWLHVjDJUHHPHQW&RRNY/LWWOH&DHVDU(QWHUV,QF
DEVROXWHO\QHFHVVDU\l:KHQWKHZULWWHQDJUHHPHQWUHIHUVWR            )G   WK &LU   (YHQ WKRXJK H[WULQVLF
DVHSDUDWHGRFXPHQWIRUDGGLWLRQDOFRQWUDFWWHUPVWKHFRXUW             HYLGHQFH RI FRQWHPSRUDQHRXV RU SULRU QHJRWLDWLRQV LV
PXVWUHDGWKHZULWLQJVWRJHWKHU)RUJHY6PLWK1:G             DGPLVVLEOH WR VKRZ WKH SDUWLHV GLG QRW LQWHQG WKH ZULWWHQ
  0LFK   0RUHRYHU ZKHWKHU WKH SDUWLHV            DJUHHPHQWWREHILQDODQGFRPSOHWHDQLQWHJUDWLRQFODXVHLQ
LQFOXGHG WKH WHUPV LQ D VHSDUDWH LQFRUSRUDWHG GRFXPHQW RU        D ZULWWHQ FRQWUDFW FRQFOXVLYHO\ HVWDEOLVKHV WKDW WKH SDUWLHV
ZLWKLQWKHDJUHHPHQWLWVHOIWKHFRXUWPXVWVWULYHWRKDUPRQL]H          LQWHQGHGWKHZULWWHQFRQWUDFWWREHWKHFRPSOHWHH[SUHVVLRQRI
DSSDUHQWO\ FRQIOLFWLQJ WHUPV RU FODXVHV  )UHVDUG Y 0LFK      WKHLU DJUHHPHQW  ,G FLWLQJ 1$* (QWHUV ,QF Y $OO 6WDWH
0LOOHUV0XW,QV&R1:G0LFK                 ,QGXV,QF1:G0LFK8$:*0
,IWKHSDUWLHVjLQWHQWLVXQDPELJXRXVO\FOHDUIURPWKHODQJXDJH          +XPDQ5HV&WUY.6/5HFUHDWLRQ&RUS1:G
RIWKHZULWWHQDJUHHPHQWWKHFRXUWPXVWHQIRUFHWKHSDUWLHVj            0LFK&W$SS
LQWHQWDVH[SUHVVHGLQWKHZULWLQJ%LUFKFUHVW%OGJ&RY
3ODVNRYH1:G0LFK                               6HFWLRQ  RI WKH ORDQ DJUHHPHQW HQWLWOHG m3ULRU
                                                                         $JUHHPHQWVlGHFODUHV
                                                                          7KLV$JUHHPHQWDQGWKHRWKHU/RDQ'RFXPHQWVFRQWDLQ
      7KH JHQHUDO UXOHV RI FRQWUDFW FRQVWUXFWLRQ DSSO\ HTXDOO\ WR DQ
                                708,7/
LQVXUDQFH FRQWUDFW WKH VXEMHFW RI                              ,72
                                          DQG DQ\ RWKHU FRQWUDFW
                                                                           WKHHQWLUHDJUHHPHQWRIWKHSDUWLHVKHUHWRLQUHVSHFWWRWKH
:70,:  0XW ,QV &R RI 0LFK Y 1LNNHO  1:G   0LFK       WUDQVDFWLRQV FRQWHPSODWHG KHUHE\ DQG WKHUHE\ DQG DOO
                                                                     SULRUDJUHHPHQWVDPRQJRUEHWZHHQVXFKSDUWLHVZKHWKHU
    :RQGHUODQG6KRSSLQJ&HQWHU                    1R       1R                :RQGHUODQG6KRSSLQJ&HQWHU            
      HWDOY&'&0RUWJDJHHWDO                                                              HWDOY&'&0RUWJDJHHWDO

$OWKRXJK XQWLO WKH &RQYHUVLRQ 'DWH 3ODLQWLII KDG RQO\             ,Q DGGLWLRQ WR WKHVH JHQHUDO UXOHV RI 0LFKLJDQ FRQWUDFW
LQWHUHVWSD\PHQWREOLJDWLRQVDIWHUWKH&RQYHUVLRQ'DWHWKH            FRQVWUXFWLRQWKHORDQDJUHHPHQWSUHVFULEHVVRPHFRQVWUXFWLRQ
QRWHDOWHUV3ODLQWLIIjVREOLJDWLRQV$IWHUWKH&RQYHUVLRQ'DWH       UXOHVRILWVRZQ3HUWLQHQWWRWKLVDSSHDODUHWKHSUHVFULSWLRQV
WKH QRWH UHTXLUHV D FRQVWDQW SD\PHQW EDVHG RQ   WKH      FRQWDLQHGLQHQWLWOHGm([KLELWV,QFRUSRUDWHGlDQG
DSSOLFDEOHLQWHUHVWUDWHDVSHFLILHGDPRUWL]DWLRQVFKHGXOH         HQWLWOHG m&RQIOLFW &RQVWUXFWLRQ RI 'RFXPHQWVl
DQGmWKHRULJLQDOSULQFLSDODPRXQWRULID5HVL]LQJDV     6HFWLRQ  LQFRUSRUDWHV DWWDFKHG H[KLELWV LQWR WKH
VXFK WHUP LV KHUHDIWHU GHILQHG LQ 6HFWLRQ E LV HIIHFWHG   DJUHHPHQWmZLWKWKHVDPHHIIHFWDVLIVHWIRUWKLQWKHERG\
SXUVXDQW WR 6HFWLRQ E WKH 5HVL]HG 3ULQFLSDO $PRXQWl        KHUHRIls$DW6HYHUDOH[KLELWVDUHDWWDFKHGWRWKH
s$DWHPSKDVLVDGGHG                                       ORDQ DJUHHPHQW LQFOXGLQJ ([KLELW % D VDPSOH PRUWJDJH
                                                                       SURPLVVRU\ QRWH GRFXPHQWLQJ D ORDQ RI  WR
   $OWKRXJK 3ODLQWLII FRQWHQGV WKDW WKH 'LIIHUHQFH FDQQRW        3ODLQWLII  ([KLELW % DQG WKH QRWH H[HFXWHG E\ 3ODLQWLII RQ
HTXDO]HURDQGWKDWGHFODULQJD'LIIHUHQFHRI]HURZRXOGEH            'HFHPEHUDUHLGHQWLFDO6HFWLRQGHVFULEHVWKH
LQFRQVLVWHQW ZLWK WKH UHVL]LQJ PHFKDQLVP ZH HQYLVLRQ            WUHDWPHQWRIDFRQIOLFWEHWZHHQWKHDJUHHPHQWDQGDVHSDUDWH
QRWKLQJLQFRQVLVWHQWZLWKUHTXLULQJ'HIHQGDQWVWRGHFODUHD            GRFXPHQWH[HFXWHGLQFRQQHFWLRQZLWKWKHORDQ7KLVVHFWLRQ
'LIIHUHQFH EHIRUH 3ODLQWLII EHFRPHV REOLJDWHG WR PDNH            SURYLGHV
SULQFLSDO DQG LQWHUHVW SD\PHQWV RQ WKH ORDQ  %HIRUH
'HIHQGDQWVFDQUHFHLYHSULQFLSDOSD\PHQWV'HIHQGDQWVPXVW               ,QWKHHYHQWRIDQ\FRQIOLFWEHWZHHQWKHSURYLVLRQVRIWKLV
FRQVLGHUWKHDGYLVDELOLW\RIORZHULQJWKHSULQFLSDODPRXQWRI            $JUHHPHQW DQG DQ\RIWKHRWKHU/RDQ'RFXPHQWVWKH
WKH ORDQ LQ H[FKDQJH IRU HTXLW\ LQWHUHVWV RI 3ODLQWLII          SURYLVLRQVRIWKLV$JUHHPHQWVKDOOFRQWURO7KHSDUWLHV
'HIHQGDQWVFRXOGGHWHUPLQHDVWKH\GLGZLWKWKH0DFRPE                  KHUHWR DFNQRZOHGJH WKDW WKH\ ZHUH UHSUHVHQWHG E\
0DOO DQG &ROXPEXV 0DOO ORDQV UHVL]LQJ ZDV DSSURSULDWH           FRXQVHOLQFRQQHFWLRQZLWKWKHQHJRWLDWLRQDQGGUDIWLQJ
GHWHUPLQH DQ DPRXQW E\ ZKLFK WR UHGXFH WKH ORDQ                  RIWKH/RDQ'RFXPHQWVDQGWKDWVXFK/RDQ'RFXPHQWV
GHWHUPLQLQJWKH'LIIHUHQFHDQGSURFHHGZLWKWKHWHUPVRI              VKDOOQRWEHVXEMHFWWRWKHSULQFLSOHRIFRQVWUXLQJWKHLU
ERIWKHQRWHDQGRIWKHORDQDJUHHPHQW2QWKH            PHDQLQJDJDLQVWWKHSDUW\ZKLFKGUDIWHGVDPH
RWKHU KDQG 'HIHQGDQWV FRXOG H[DPLQH WKH FLUFXPVWDQFHV
VXUURXQGLQJ3ODLQWLIIjVORDQDQGGHWHUPLQHWKDWORZHULQJWKH           s$ DW   7KH QRWH PRUWJDJH DQG DJUHHPHQW DUH
SULQFLSDO DPRXQW ZDV QRW LQ WKH LQWHUHVWV RI WKH ORDQ         DPRQJYDULRXVPDWHULDOVLGHQWLILHGDVm/RDQ'RFXPHQWVl
WUDQVDFWLRQ  7KH QRWHjV SD\PHQW IRUPXOD IDYRUV WKLV
FRQVWUXFWLRQ E\ EDVLQJ 3ODLQWLIIjV SRVW&RQYHUVLRQ 'DWH             'HIHQGDQWV DUJXH WKDW DV DQ LQFRUSRUDWHG SDUW RI WKH
SD\PHQWVRQLQDGGLWLRQWRDQDPRUWL]DWLRQWHUPDQGLQWHUHVW         DJUHHPHQWWKHSURYLVLRQVRIWKHQRWHKDYHWKHVDPHHIIHFWDV
HLWKHUWKHRULJLQDOSULQFLSDODPRXQWRUWKHUHVL]HGSULQFLSDO          PDWWHUVFRQWDLQHGLQWKHDJUHHPHQW%HFDXVHERIWKH
DPRXQWLI'HIHQGDQWVGHFLGHWRXQGHUWDNHUHVL]LQJ,QVWHDG           QRWHJLYHV'HIHQGDQWVmWKHRSWLRQLQ>WKHLU@VROHDQGDEVROXWH
RISURGXFLQJWKHmDEVXUGRULOORJLFDOlUHVXOW3ODLQWLIISRUWHQGV      GLVFUHWLRQlWRUHVL]HWKHORDQWKHQWKHDJUHHPHQWSHUPLWWHG
'HIHQGDQWjV HOHFWLRQ DJDLQVW UHVL]LQJ DQG GHFODULQJ D           EXW GLG QRW UHTXLUH 'HIHQGDQWV WR UHGXFH WKH SULQFLSDO
'LIIHUHQFH RI ]HUR OHDGV WR SULQFLSDO SD\PHQW REOLJDWLRQV      WKURXJKUHVL]LQJ'HIHQGDQWVDUJXHWKH\HOHFWHGQRWWRUHVL]H
DFFRUGLQJWRWKHDUUDQJHPHQWSURYLGHGLQWKHQRWH                    DQGWKXVFRPSOLHGZLWKWKHLUFRQWUDFWXDOREOLJDWLRQV3ODLQWLII
                                                                       DUJXHVWKDWDVDSURYLVLRQRIWKHORDQDJUHHPHQWUDWKHUWKDQD
  *UDQWLQJ'HIHQGDQWVWKHmVROHDQGDEVROXWHGLVFUHWLRQlWR            VHSDUDWHm/RDQ'RFXPHQWlRIWKHORDQDJUHHPHQWLV
UHVL]H GRHV QRW FRQIOLFW ZLWK RWKHU WHUPV RI WKH ORDQ         VXSHULRUWRDQ\SURYLVLRQRIWKHQRWHDQGWKXVVKRXOGJRYHUQ
    :RQGHUODQG6KRSSLQJ&HQWHU                       1R       1R                :RQGHUODQG6KRSSLQJ&HQWHU           
      HWDOY&'&0RUWJDJHHWDO                                                                 HWDOY&'&0RUWJDJHHWDO

LQ WKH FDVH RI D FRQIOLFW  6HFWLRQ  GRHV QRW IUDPH       DQGLI3ODLQWLIIFDQQRWUHDFKWKHWDUJHWQHWRSHUDWLQJLQFRPH
m0H]]DQLQH)LQDQFLQJlRQHRIWKHPHFKDQLVPVIRUUHSD\LQJ                 WKHQ D &RQYHUVLRQ 'DWH ZRXOG QHYHU RFFXU DQG 3ODLQWLII
WKH H[FHVV SULQFLSDO DIWHU UHVL]LQJ LQ GLVFUHWLRQDU\ WHUPV       ZRXOGQHYHURZHSULQFLSDOSD\PHQWVWR'HIHQGDQWV
,QVWHDG   VWDWHV LI 3ODLQWLII KDV IDLOHG WR UHDFK LWV
RSHUDWLQJLQFRPHDQGGHEWFRYHUDJHJRDOVDQG3ODLQWLIIGRHV                 3ODLQWLIIjVGHILQLWLRQRIWKH&RQYHUVLRQ'DWHLVDWRGGVZLWK
QRWSUHSD\WKHORDQDPRXQWRUmUHSD\WKH'LIIHUHQFHLQFDVKl             WKHGHILQLWLRQLQWKHQRWH7KHQRWHGHILQHVWKH&RQYHUVLRQ
3ODLQWLIImVKDOOUHSD\lDFFRUGLQJWRPH]]DQLQHILQDQFLQJ)RU             'DWHDVmWKHHOHYHQWKWKGD\RIWKHILUVWFDOHQGDUPRQWK
WKLV UHDVRQ 3ODLQWLII DUJXHV  E RI WKH QRWH FRQWDLQLQJ     IROORZLQJWKHFDOHQGDUPRQWKLQZKLFK3D\HHQRWLILHV0DNHU
GLVFUHWLRQDU\ ODQJXDJH DQG   RI WKH DJUHHPHQW              RI3D\HHjVGHWHUPLQDWLRQRIWKH'LIIHUHQFHls$DW
FRQWDLQLQJQRGLVFUHWLRQDU\ODQJXDJHDUHLQFRQIOLFW3ODLQWLII         $OWKRXJKERIWKHQRWHDQGRIWKHORDQDJUHHPHQW
FRQWHQGVWKDWLVDSDUWRIWKHORDQDJUHHPHQWDQGLV             ERWK DGGUHVV mWKH 'LIIHUHQFHl DQG 3ODLQWLIIjV PHWKRG RI
WKXVVXSHULRUWRDFRQIOLFWLQJSDUWRIDQ\ORDQGRFXPHQWVXFK            UHSD\LQJLWRQO\EGHILQHVmWKH'LIIHUHQFHl3XUVXDQWWR
DVWKHQRWH                                                               E RI WKH QRWH mWKH 'LIIHUHQFHl HTXDOV WKH GLIIHUHQFH
                                                                          EHWZHHQ WKH RULJLQDO SULQFLSDO DPRXQW RI WKH ORDQ DQG WKH
  *LYHQLWVLQFRUSRUDWLRQLQWRWKHDJUHHPHQWYLDWKH             UHVL]HG SULQFLSDO EDODQFH  ,Q RWKHU ZRUGV WKH 'LIIHUHQFH
QRWHLVDSDUWRIWKHDJUHHPHQWDQGWKH&RXUWPXVWDWWHPSWWR             DPRXQWV WR WKH UHGXFWLRQ LQ WKH RULJLQDO SULQFLSDO GXH WR
KDUPRQL]H LWV WHUPV ZLWK RWKHUV FRQWDLQHG WKH FRQWUDFW            UHVL]LQJ5HSD\PHQWRIWKH'LIIHUHQFHEHFRPHVGXHRQWKH
)UHVDUG1:GDW6HHDOVR8QLRQ,QY&RY)LG              &RQYHUVLRQ'DWHWKHGDWH'HIHQGDQWVQRWLI\3ODLQWLIIRIWKHLU
	'HSRVLW&RRI0G)GWK&LU                 GHWHUPLQDWLRQ RI KRZ PXFK WKH\ ZLOO UHGXFH WKH ORDQ
m$FRQWUDFWZLOOQRWEHFRQVWUXHGVRDVWRUHMHFWDQ\ZRUGVDV           SULQFLSDO
VXUSOXVDJHLIWKH\UHDVRQDEO\FDQEHJLYHQPHDQLQJlFLWLQJ
9DU\Y6KHD0LFK3ODLQWLIIDUJXHV                  &RQWUDU\ WR 3ODLQWLIIjV GHILQLWLRQ WKH QRWH GRHV QRW
KDUPRQL]LQJ WKH GLVFUHWLRQDU\ ODQJXDJH RI WKH QRWH ZLWK            H[SOLFLWO\PDQGDWHUHVL]LQJWRWULJJHUWKH&RQYHUVLRQ'DWH
  RI WKH DJUHHPHQW LV QRW UHDVRQDEO\ SRVVLEOH              ,QVWHDGWKHQRWHUHTXLUHV'HIHQGDQWVWRPDNHDGHWHUPLQDWLRQ
$FFRUGLQJWR3ODLQWLIILIWKHFRQWUDFWPDGHUHVL]LQJDPDWWHU            RIWKH'LIIHUHQFHWKHDPRXQWRIUHGXFWLRQLQWKHSULQFLSDO
IRU'HIHQGDQWVjGLVFUHWLRQWKHSURYLVLRQVRIWKHQRWHZRXOG              DQGQRWLI\3ODLQWLIIRIWKDWGHWHUPLQDWLRQ7KH&RQYHUVLRQ
OHDGWRWKHmDEVXUGDQGLOORJLFDOUHVXOWlRIREOLJDWLQJ3ODLQWLII         'DWHRFFXUVRQWKHHOHYHQWKGD\RIWKHQH[WPRQWK
WR PDNH PRQWKO\ LQWHUHVW SD\PHQWV EXW QHYHU WR PDNH
SD\PHQWVRISULQFLSDO7KHmDEVXUGUHVXOWl3ODLQWLIISUHGLFWV               'HIHQGDQWVQRWLILHG3ODLQWLIIRIWKHLUGHWHUPLQDWLRQRIWKH
DULVHV RXW RI 3ODLQWLIIjV LQWHUSUHWDWLRQ RI D NH\ WHUP LQ WKH   'LIIHUHQFHLQDOHWWHUGDWHG'HFHPEHU2QWKDWGDWH
QRWH                                                                     'HIHQGDQWV LQIRUPHG 3ODLQWLII RI WKHLU GHFLVLRQ DJDLQVW
                                                                          UHVL]LQJWKHORDQ%HFDXVH'HIHQGDQWVFKRVHQRWWRUHVL]H
  7KHQRWHREOLJDWHV3ODLQWLIIWRPDNHLQWHUHVWRQO\SD\PHQWV             WKH\GLGQRWUHGXFHWKHRULJLQDOSULQFLSDODWDOOSURGXFLQJD
XQWLO WKH m&RQYHUVLRQ 'DWHl DQG SULQFLSDO SD\PHQWV                 'LIIHUHQFHUHGXFWLRQLQRULJLQDOSULQFLSDOWKURXJKUHVL]LQJ
WKHUHDIWHU  3ODLQWLII XQGHUVWDQGV WKH QRWH WR GHILQH WKH         RI ]HUR  'HIHQGDQWV VSHFLILFDOO\ QRWLILHG 3ODLQWLII RI WKLV
m&RQYHUVLRQ'DWHlDVHLWKHUWKHHOHYHQWKGD\RIWKHPRQWK                 'LIIHUHQFHGHWHUPLQDWLRQLQWKH'HFHPEHUOHWWHU3XUVXDQW
DIWHU'HIHQGDQWVUHVL]HRUWKHHOHYHQWKGD\RIWKHPRQWKDIWHU           WRWKHWHUPVRIWKHQRWHWKHQsDQXDU\WKHHOHYHQWK
3ODLQWLIIDFKLHYHVWKHWDUJHWGHEWVHUYLFHFRYHUDJHUDWLR,I           GD\RIWKHPRQWKIROORZLQJ'HIHQGDQWVSURYLGLQJQRWLFHRI
DFFRUGLQJWR3ODLQWLII'HIHQGDQWVDUHQRWREOLJDWHGWRUHVL]H            WKH 'LIIHUHQFH GHWHUPLQDWLRQ ZDV WKH &RQYHUVLRQ 'DWH