Court Opinion

ID: 2970750
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:21:09.116728+00
Date Added: 2024-06-11T15:01:14.614430
License: Public Domain

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
             3XUVXDQW WR 6L[WK &LUFXLW 5XOH                      8QLWHG6WDWHVY+HDYULQ                        1R
     (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU
                 )LOH 1DPH DS
                                                               .HQWXFN\'RQDOG0+HDYULQ+($95,1	$662&,$7(6
                                                               /RXLVYLOOH.HQWXFN\IRU$SSHOOHH
81,7('67$7(6&28572)$33($/6                                                       BBBBBBBBBBBBBBBBB
               )257+(6,;7+&,5&8,7                                                     23,1,21
                 BBBBBBBBBBBBBBBBB                                                   BBBBBBBBBBBBBBBBB
                                                                  521$/' /(( *,/0$1 &LUFXLW sXGJH  $IWHU
 81,7(' 67$7(6 2) $0(5,&$        ;                            SDUWLFLSDWLQJLQDQXPEHURIILQDQFLDOWUDQVDFWLRQVLQYROYLQJ
          3ODLQWLII$SSHOODQW                                DQRZEDQNUXSWFRUSRUDWLRQ'RQDOG+HDYULQZDVLQGLFWHGRQ
                                                               FRXQWV RI EDQNUXSWF\ IUDXG  7KH WULDO FRPPHQFHG LQ
                                     1R              2FWREHURI$WWKHHQGRIWKHWULDOEXWEHIRUHWKHFDVH
            Y                                                ZDVVXEPLWWHGWRWKHMXU\+HDYULQPRYHGIRUDMXGJPHQWRI
                                    !                          DFTXLWWDO RQ DOO RI WKH FKDUJHV SXUVXDQW WR 5XOH  RI WKH
                                                              )HGHUDO 5XOHV RI &ULPLQDO 3URFHGXUH  7KH GLVWULFW FRXUW
 '21$/' +($95,1                   
           'HIHQGDQW$SSHOOHH                                JUDQWHG+HDYULQjVPRWLRQ
                                  1                               +HDYULQ VXEVHTXHQWO\ ILOHG D PRWLRQ WR KDYH WKH
       $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW            JRYHUQPHQWSD\KLVDWWRUQH\IHHVDQGFRVWVSXUVXDQWWRWKH
    IRUWKH:HVWHUQ'LVWULFWRI.HQWXFN\DW/RXLVYLOOH        +\GH$PHQGPHQW86&$)LQGLQJWKDWWKUHHRI
 1RnsRKQ*+H\EXUQ,,&KLHI'LVWULFWsXGJH        WKH VXEVWDQWLYH FRXQWV DORQJ ZLWK WKHLU UHVSHFWLYH PRQH\
                                                               ODXQGHULQJFRXQWVZHUHIULYRORXVWKHGLVWULFWFRXUWJUDQWHGLQ
                   $UJXHG0D\                        SDUWDQGGHQLHGLQSDUW+HDYULQjVPRWLRQ7KHJRYHUQPHQW
                                                               WKHQILOHGWKLVWLPHO\DSSHDOFRQWHQGLQJWKDWWKHGLVWULFW
             'HFLGHGDQG)LOHGsXQH                  FRXUWDSSOLHGWKHZURQJOHJDOVWDQGDUGVWR+HDYULQjVPRWLRQ
                                                               WKHFRXQWVLQTXHVWLRQZHUHQRWIULYRORXVDQG+HDYULQ
   %HIRUH.(11('<6,/(5DQG*,/0$1&LUFXLW                GLGQRWSURYHWKDWKHZDVDQHOLJLEOHmSDUW\lHQWLWOHGWRVHHN
                     sXGJHV                                   UHLPEXUVHPHQWXQGHUWKH+\GH$PHQGPHQW)RUDOORIWKH
                                                               UHDVRQV VHW IRUWK EHORZ ZH $)),50 WKH ILQGLQJ RI WKH
                   BBBBBBBBBBBBBBBBB                           GLVWULFW FRXUW WKDW +HDYULQ TXDOLILHG DV D mSDUW\l XQGHU WKH
                                                               +\GH $PHQGPHQW EXW 9$&$7( WKH MXGJPHQW DQG
                        &2816(/                                5(0$1' WKH DFWLRQ WR GHWHUPLQH ZKHWKHU +HDYULQ LV
                                                               HQWLWOHG WR DWWRUQH\ IHHV DQG FRVWV XQGHU WKH SURSHU OHJDO
$5*8('  7HUU\ 0 &XVKLQJ $66,67$17 81,7('              VWDQGDUGV
67$7(6$77251(</RXLVYLOOH.HQWXFN\IRU$SSHOODQW
+DUOH\1%ODQNHQVKLS/RXLVYLOOH.HQWXFN\IRU$SSHOOHH
21 %5,()  7HUU\ 0 &XVKLQJ &DQGDFH * +LOO
$66,67$1781,7('67$7(6$77251(<6/RXLVYLOOH
.HQWXFN\IRU$SSHOODQW+DUOH\1%ODQNHQVKLS/RXLVYLOOH

                             
1R                      8QLWHG6WDWHVY+HDYULQ                 8QLWHG6WDWHVY+HDYULQ                        1R

                    ,%$&.*5281'                                  LQVXUDQFH SROLF\ WR 0')& SXUVXDQW WR WKH QHJRWLDWLRQV
                                                                      EHWZHHQ+HDYULQDQG0')&,WSDLGWRWKH+DUURG7UXVWWKH
$ )DFWXDOEDFNJURXQG                                                 UHPDLQLQJSOXVLQWHUHVW2IWKH+HDYULQ
                                                                      SDLG KLV VWHSVLVWHU  DQG NHSW  IRU KLPVHOI
   5REHUW +DUURG DQG 0LFKDHO 0DFDWHH ZHUH WKH SULQFLSDO        +DUURGjV SUREDWH UHFRUGV DQG GHDWK WD[ UHWXUQV KRZHYHU
VKDUHKROGHUV RI 7ULSOH 6 5HVWDXUDQWV ,QF  +HDYULQ ZDV       ZKLFK+HDYULQVXEPLWWHGDVWKHH[HFXWRURI+DUURGjVHVWDWH
+DUURGjVVWHSVRQDQG7ULSOH6jVRXWVLGH FRXQVHO7ULSOH6           IDLOHGWRGLVFORVHWKHLQVXUDQFHSD\PHQWWR+HUURGjV
SHULRGLFDOO\REWDLQHGORDQVIRULWVEXVLQHVVRSHUDWLRQVIURP          KHLUV
0F'RQQHOO'RXJODV)LQDQFH&RUSRUDWLRQ0')&,QWKH
HDUO\V0')&UHTXLUHG+DUURGDQG0DFDWHHWRREWDLQ                  +HDYULQODWHUHQWHUHGLQWRDQDJUHHPHQWSXUVXDQWWRZKLFK
NH\PDQ OLIH LQVXUDQFH SROLFLHV DV FROODWHUDO IRU 0')&jV       KH VROG KLV VKDUHV RI VWRFN LQ 7RWDO 9HQG ,QF D YHQGLQJ
ORDQVWR7ULSOH6+DUURGDQG0DFDWHHREWDLQHGVXFKSROLFLHV        FRPSDQ\IRU7KHUHZDVQRFRQQHFWLRQEHWZHHQ
ZKLFKGHVLJQDWHG7ULSOH6DVWKHEHQHILFLDU\7KHNH\PDQ            7ULSOH6DQG7RWDO9HQGEXW+HDYULQjVLQWHUHVWLQ7RWDO9HQG
OLIHLQVXUDQFHSROLF\RQ+DUURGLVVXHGE\sDFNVRQ1DWLRQDO           EHFDPH UHOHYDQW GXULQJ KLV GHSRVLWLRQ WDNHQ LQ FRQQHFWLRQ
/LIH,QVXUDQFH&RPSDQ\ZDVLQWKHDPRXQWRIWZRPLOOLRQ              ZLWK7ULSOH6jVEDQNUXSWF\SURFHHGLQJ,QWKHFRXUVHRIWKH
GROODUV0')&ZDVWKHDVVLJQHHIRUWKHIXOOIDFHYDOXHRIWKH        GHSRVLWLRQZKLFKRFFXUUHGSULRUWRWKHVDOHRIWKH7RWDO9HQG
SROLF\                                                              VKDUHV +HDYULQ FODLPHG WR KDYH QR RZQHUVKLS LQWHUHVW LQ
                                                                      7RWDO9HQG7KHJRYHUQPHQWGLVFRYHUHGGXULQJ+HDYULQjV
   ,Q 0DUFK RI  +DUURG ZDV GLDJQRVHG ZLWK WHUPLQDO       FULPLQDOWULDOWKDWKHGLGQRWPHQWLRQWKHVKDUHVRI7RWDO9HQG
FDQFHU+HDYULQEHJDQQHJRWLDWLQJZLWK0')&WRVHFXUHD              LQKLVGHSRVLWLRQEHFDXVHWKH\ZHUHLQDUHYRFDEOHWUXVWDWWKH
SRUWLRQRIWKH+DUURGLQVXUDQFHSURFHHGVIRU+DUURGjVKHLUV           WLPHWKDWKHZDVGHSRVHG
LQ $SULO RU 0D\ RI WKDW \HDU  7KH EDVLV IRU +HDYULQjV
QHJRWLDWLRQVZDVWKHWKUHDWRIDOHQGHUOLDELOLW\ODZVXLWDJDLQVW     % 3URFHGXUDOEDFNJURXQG
0')&6KRUWO\WKHUHDIWHU+HDYULQUHFRPPHQGHGWR+DUURG
DQG0DFDWHHWKDWWKH\WUDQVIHUWKHLUUHVSHFWLYHNH\PDQOLIH             %RWKWKHEDQNUXSWF\MXGJHKDQGOLQJWKH7ULSOH6EDQNUXSWF\
LQVXUDQFHSROLFLHVWRLUUHYRFDEOHWUXVWV+DUURGDFFRUGLQJO\         DFWLRQ DQG WKH 8QLWHG 6WDWHV 7UXVWHHjV 2IILFH UHSRUWHG
WUDQVIHUUHGKLVSROLF\WRWKH5REHUW+DUURG7UXVWRIZKLFK           +HDYULQjV FRQGXFW WR WKH 8QLWHG 6WDWHV $WWRUQH\jV 2IILFH
+DUURGZDVWKHWUXVWHHDQGVROHEHQHILFLDU\RQsXQH        $IWHUWKHJRYHUQPHQWSUHVHQWHGDFDVHDJDLQVW+HDYULQWRD
+DUURGGLHGRQ6HSWHPEHU                                     IHGHUDOJUDQGMXU\WKHJUDQGMXU\UHWXUQHGDQLQGLFWPHQWLQ
                                                                      6HSWHPEHU RI  FKDUJLQJ +HDYULQ ZLWK IUDXGXOHQWO\
  7ULSOH 6 EHJDQ KDYLQJ ILQDQFLDO GLIILFXOWLHV LQ WKH HDUO\   WUDQVIHUULQJRUFRQFHDOLQJ7ULSOH6jVNH\PDQOLIHLQVXUDQFH
V2Q6HSWHPEHU7ULSOH6ILOHGDSHWLWLRQIRU          SROLF\RQ+DUURGLQYLRODWLRQRI86&&RXQW
EDQNUXSWF\XQGHU&KDSWHU7KH&KDSWHUSURFHHGLQJ                IUDXGXOHQWO\ FRQFHDOLQJ WKH  LQ SURFHHGV IURP
ZDVFRQYHUWHGWRD&KDSWHUEDQNUXSWF\WKUHHPRQWKVODWHU           +DUURGjV SROLF\ WKDW ZHUH SDLG WR WKH +DUURG 7UXVW LQ
%HFDXVHQRERG\WROG'DYLG&KLQQWKHDWWRUQH\ZKRKDQGOHG             YLRODWLRQRI86&&RXQWDQGODXQGHULQJWKH
7ULSOH6jVEDQNUXSWF\ILOLQJDERXWWKHWUDQVIHURI+DUURGjV          WKDWKHKDGIUDXGXOHQWO\GLYHUWHGIURP7ULSOH6LQ
NH\PDQOLIHLQVXUDQFHSROLF\&KLQQGLGQRWOLVWWKHWUDQVIHU        YLRODWLRQRI86&&RXQWV
LQWKHEDQNUXSWF\SHWLWLRQ
                                                                        7KH JRYHUQPHQW GLVFRYHUHG +HDYULQjV VDOH RI KLV 7RWDO
  ,Q 1RYHPEHU RI  sDFNVRQ 1DWLRQDO /LIH GLVEXUVHG         9HQGVKDUHVDQGKLVGLVFODLPHURIRZQHUVKLSLQWHUHVWGXULQJ
PLOOLRQSOXVLQWHUHVWIURPWKHSURFHHGVRIWKH+DUURG         KLVEDQNUXSWF\GHSRVLWLRQZKLFKZDVWDNHQDIWHUWKHJUDQG
1R                      8QLWHG6WDWHVY+HDYULQ                 8QLWHG6WDWHVY+HDYULQ                       1R

MXU\UHWXUQHGLWVRULJLQDOLQGLFWPHQW$VDUHVXOWWKHJUDQG        $IWHUFRQVLGHULQJWKHSDUWLHVjVXSSOHPHQWDOPHPRUDQGDLQ
MXU\ UHWXUQHG D QXPEHU RI VXSHUVHGLQJ LQGLFWPHQWV              ZKLFK +HDYULQ VRXJKW  WKH FRXUW DZDUGHG KLP
FXOPLQDWLQJLQDWKLUGVXSHUVHGLQJLQGLFWPHQWGDWHG2FWREHU           ,WLVIURPWKLVSDUWLDOJUDQWRI+HDYULQjVPRWLRQ
,QWKHWKLUGVXSHUVHGLQJLQGLFWPHQWWKHJUDQGMXU\        WKDWWKHJRYHUQPHQWDSSHDOV
DGGHGFRXQWVIRUFULPLQDOFRQWHPSWRIWKHEDQNUXSWF\FRXUWjV
RUGHUVLQYLRODWLRQRI86&&RXQW                                  ,,$1$/<6,6
IUDXGXOHQWO\ FRQFHDOLQJ IURP WKH EDQNUXSWF\ FRXUW WKH
SURFHHGVWKDW+HDYULQUHFHLYHGIURPWKH7RWDO9HQGVDOHLQ           $ 6WDQGDUGRIUHYLHZ
YLRODWLRQ RI  86&   &RXQW  IUDXGXOHQWO\
PDNLQJ D PDWHULDO IDOVH VWDWHPHQW LQ KLV EDQNUXSWF\               m>'@LVWULFW FRXUW GHFLVLRQV RQ +\GH $PHQGPHQW
GHSRVLWLRQLQYLRODWLRQRI86&&RXQWDQG         DSSOLFDWLRQVDUHUHYLHZHGIRUDQDEXVHRIGLVFUHWLRQl8QLWHG
DGGLWLRQDOPRQH\ODXQGHULQJFRXQWVLQYLRODWLRQRI86&         6WDWHVY7UXH)GWK&LUm$QDEXVH
&RXQWRULJLQDO&RXQWZDVUHQXPEHUHG&RXQW            RIGLVFUHWLRQRFFXUVZKHQWKHORZHUFRXUWUHOLHVRQFOHDUO\
DQG86&D%L&RXQWV                      HUURQHRXVILQGLQJVRIIDFWRUZKHQLWLPSURSHUO\DSSOLHVWKH
                                                                      ODZ RU XVHV DQ HUURQHRXV OHJDO VWDQGDUGl  ,G DW  Q
   $QHLJKWGD\WULDOZDVKHOGLQGLVWULFWFRXUWFRPPHQFLQJ          LQWHUQDOTXRWDWLRQPDUNVRPLWWHG$GLVWULFWFRXUWOLNHZLVH
RQ2FWREHU+HDYULQWHVWLILHGLQKLVRZQGHIHQVH           DEXVHVLWVGLVFUHWLRQZKHQZHDUHmILUPO\FRQYLQFHGWKDWD
'XULQJ +HDYULQjV WHVWLPRQ\ KLV FRXQVHO SURGXFHG D              PLVWDNHKDVEHHQPDGHLHZKHQZHDUHOHIWZLWKDGHILQLWH
GRFXPHQWVKRZLQJWKDW+HDYULQGLGQRWGLUHFWO\RZQVWRFNLQ           DQGILUPFRQYLFWLRQWKDWWKHWULDOFRXUWFRPPLWWHGDFOHDUHUURU
7RWDO9HQGDWWKHWLPHRIKLVEDQNUXSWF\GHSRVLWLRQEHFDXVH           RIMXGJPHQWl,GLQWHUQDOTXRWDWLRQPDUNVRPLWWHG
LWZDVSDUWRIDUHYRFDEOHWUXVWWKDWZDVWUDQVIHUUHGEDFNWR
KLP VRPHWLPH DIWHU KH ZDV GHSRVHG  7KH JRYHUQPHQW            % $ZDUG RI DWWRUQH\ IHHV DQG FRVWV XQGHU WKH +\GH
WKHUHXSRQ DJUHHG WR GLVPLVV &RXQW  HYHQ WKRXJK WKLV            $PHQGPHQWZKHUHRQO\VRPHRIWKHFRXQWVDUHIRXQG
GRFXPHQWKDGQRWEHHQSURYLGHGWRWKHJRYHUQPHQWEHIRUH                  WREHYH[DWLRXVIULYRORXVRULQEDGIDLWK
WULDO
                                                                        7KHJRYHUQPHQWILUVWFRQWHQGVWKDWWKHDZDUGRIDWWRUQH\
  $W WKH HQG RI DOO WKH SURRI EXW EHIRUH WKH FDVH ZDV     IHHVDQGFRVWVZDVXQMXVWLILHGEHFDXVHWKHGLVWULFWFRXUWIRXQG
VXEPLWWHG WR WKH MXU\ +HDYULQ PRYHG IRU D MXGJPHQW RI       WKDWRQO\VRPHRIWKHFRXQWVZHUHYH[DWLRXVIULYRORXVRULQ
DFTXLWWDORQDOOFKDUJHVSXUVXDQWWR5XOHRIWKH)HGHUDO           EDG IDLWK DV RSSRVHG WR D ILQGLQJ WKDW WKH JRYHUQPHQWjV
5XOHV RI &ULPLQDO 3URFHGXUH  7KH GLVWULFW FRXUW JUDQWHG      SURVHFXWLRQRIWKHFDVHZDVJHQHUDOO\YH[DWLRXVIULYRORXVRU
+HDYULQjVPRWLRQ8QLWHG6WDWHVY+HDYULQ)6XSSG          LQ EDG IDLWK  ,Q SDUWLDOO\ JUDQWLQJ +HDYULQjV PRWLRQ WKH
:'.\                                                GLVWULFWFRXUWKHOGWKDW&RXQWVDQGZHUHIULYRORXVEXW
                                                                      WKDW&RXQWZDVQRWIULYRORXV&RXQWVDQG
   +HDYULQVXEVHTXHQWO\PRYHGIRUDQDZDUGRIDWWRUQH\IHHV           WKURXJK  ZHUH PRQH\ODXQGHULQJ FKDUJHV DQG ZHUH
DQGFRVWVSXUVXDQWWRWKH+\GH$PHQGPHQW3XE/1R            GHULYDWLYHRIWKHVXEVWDQWLYH FRXQWV,IFHUWDLQVXEVWDQWLYH
    6WDW   UHSULQWHG LQ  86&   FRXQWV ZHUH IULYRORXV SUHVXPDEO\ VR ZHUH WKHLU
 $ +LVWRULFDO 	 6WDWXWRU\ 1RWHV  7KH GLVWULFW FRXUW   FRUUHVSRQGLQJGHULYDWLYHFRXQWV
KHOG WKDW +HDYULQ ZDV HQWLWOHG WR DQ DZDUG DQG UHTXHVWHG
DGGLWLRQDO EULHILQJ UHJDUGLQJ WKH SURSHU DPRXQW  8QLWHG
6WDWHV Y +HDYULQ  ) 6XSS G  :' .\ 
1R                       8QLWHG6WDWHVY+HDYULQ                    8QLWHG6WDWHVY+HDYULQ                      1R

     ,QWHUSUHWDWLRQRIWKH+\GH$PHQGPHQW                                  7KH)RXUWKDQG(OHYHQWK&LUFXLWVKDYHORRNHGWR%ODFNjV
                                                                             /DZ 'LFWLRQDU\ WR GHILQH WKHVH WHUPV  m9H[DWLRXVl LV
   7KHDZDUGRIDWWRUQH\IHHVDQGFRVWVSXUVXDQWWRWKH+\GH                 GHILQHG DV mZLWKRXW UHDVRQDEOH RU SUREDEOH FDXVH RU
$PHQGPHQW ZKHUH VRPH RI WKH FRXQWV DUH IRXQG WR EH                  H[FXVHl  m%DG IDLWKl LV GHILQHG DV mQRW VLPSO\ EDG
IULYRORXV DQG RWKHUV DUH QRW LV DSSDUHQWO\ D PDWWHU RI ILUVW       MXGJPHQW RU QHJOLJHQFH EXW UDWKHU LW LPSOLHV WKH
LPSUHVVLRQLQWKHIHGHUDODSSHOODWHFRXUWV%HFDXVHZHDUH                  FRQVFLRXVGRLQJRIDZURQJEHFDXVHRIGLVKRQHVWSXUSRVH
SUHVHQWHGZLWKDSUHYLRXVO\XQH[SORUHGTXHVWLRQRIVWDWXWRU\                 RUPRUDODPELJXLW\LWFRQWHPSODWHVDVWDWHRIPLQG
LQWHUSUHWDWLRQZHVKRXOGILUVWORRNWRWKHSODLQPHDQLQJRIWKH             DIILUPDWLYHO\RSHUDWLQJZLWKIXUWLYHGHVLJQRULOOZLOOl
VWDWXWRU\ODQJXDJH8QLWHG6WDWHVY5RQ3DU(QWHUV,QF
86m7KHWDVNRIUHVROYLQJWKHGLVSXWH            ,GDWFLWDWLRQVRPLWWHGDOWHUDWLRQLQRULJLQDO
RYHUWKHPHDQLQJRI>DVWDWXWH@EHJLQVZKHUHDOOVXFKLQTXLULHV
PXVW EHJLQ ZLWK WKH ODQJXDJH RI WKH VWDWXWH LWVHOIl  7KH     :HDUHOHIWWRLQWHUSUHWWKHWHUPVmSRVLWLRQlDQGmIULYRORXVl
+\GH$PHQGPHQWSURYLGHVLQSHUWLQHQWSDUWDVIROORZV                    DV XVHG LQ WKH +\GH $PHQGPHQW  7KH (OHYHQWK &LUFXLW
                                                                         UHVRUWHGWR%ODFNjV/DZ'LFWLRQDU\DQG5XOHRIWKH)HGHUDO
  'XULQJILVFDO\HDUDQGLQDQ\ILVFDO\HDUWKHUHDIWHU             5XOHVRI&LYLO3URFHGXUHWRGHILQHmIULYRORXVl,WVDLGWKDW
  WKHFRXUWLQDQ\FULPLQDOFDVHRWKHUWKDQDFDVHLQZKLFK            mIULYRORXVlPHDQVm>J@URXQGOHVV>@ZLWKOLWWOHSURVSHFWRI
  WKHGHIHQGDQWLVUHSUHVHQWHGE\DVVLJQHGFRXQVHOSDLGIRU              VXFFHVVl8QLWHG6WDWHVY*LOEHUW)G
  E\WKHSXEOLFPD\DZDUGWRDSUHYDLOLQJSDUW\RWKHU            WK&LUILUVWDOWHUDWLRQLQRULJLQDOVHHDOVR8QLWHG
  WKDQWKH8QLWHG6WDWHVDUHDVRQDEOHDWWRUQH\jVIHHDQG                6WDWHV Y %UDXQVWHLQ  )G   WK &LU 
  RWKHUOLWLJDWLRQH[SHQVHVZKHUHWKHFRXUWILQGVWKDWWKH              DGRSWLQJWKH*LOEHUWFRXUWjVGHILQLWLRQRImIULYRORXVl,QUH
  SRVLWLRQRIWKH8QLWHG6WDWHVZDVYH[DWLRXVIULYRORXVRU             *UDQGsXU\)GWK&LUVDPH
  LQ EDG IDLWK XQOHVV WKH FRXUW ILQGV WKDW VSHFLDO
  FLUFXPVWDQFHVPDNHVXFKDQDZDUGXQMXVW6XFKDZDUGV                    7KHGLVWULFWFRXUWEHORZDIWHUFLWLQJ*LOEHUWDQGTXRWLQJLWV
  VKDOO EH JUDQWHG SXUVXDQW WR WKH SURFHGXUHV DQG                 GHILQLWLRQ RI mIULYRORXVl SURYLGHG D PRUH FRPSUHKHQVLYH
  OLPLWDWLRQVEXWQRWWKHEXUGHQRISURRISURYLGHGIRUDQ              GHILQLWLRQRIWKHZRUG
  DZDUGXQGHUVHFWLRQRIWLWOH8QLWHG6WDWHV&RGH
                                                                             >$@ IULYRORXV FKDUJH LV HLWKHU RQH ZLWKRXW VRPH OHJDO
 86&  $  %HFDXVH WKH ZRUGV mSRVLWLRQl                    SUHFHGHQW IRU WKH JRYHUQPHQWjV SRVLWLRQ RU LI OHJDOO\
mYH[DWLRXVlmIULYRORXVlDQGmEDGIDLWKlDUHQRWGHILQHGLQ                 VRXQGDFKDUJHEURXJKWZLWKRXWDUHDVRQDEOHH[SHFWDWLRQ
WKH VWDWXWH WKH\ PXVW EH DFFRUGHG WKHLU RUGLQDU\ PHDQLQJ           RI HYLGHQFH DW WULDO WR VXSSRUW WKLV SRVLWLRQ  7KH
&KDSPDQ Y 8QLWHG 6WDWHV  86                      JRYHUQPHQW QHHG QRW KDYH DFWXDO HYLGHQFH EHIRUH
LQWHUSUHWLQJ D IHGHUDO VWDWXWH DQG WKH 8QLWHG 6WDWHV                 EULQJLQJ FKDUJHV RQO\ D UHDVRQDEOH H[SHFWDWLRQ RI
6HQWHQFLQJ*XLGHOLQHV                                                      DWWDLQLQJLWDWWULDO
  7KLVFRXUWLQLQWHUSUHWLQJWKHPHDQLQJVRImYH[DWLRXVlDQG               :HEHOLHYHWKDWWKHSRUWLRQRIWKHGLVWULFWFRXUWjVGHILQLWLRQ
mEDG IDLWKl IRU SXUSRVHV RI WKH +\GH $PHQGPHQW KDV              RImIULYRORXVlHQFRPSDVVLQJWKHSKUDVHmZLWKRXWVRPHOHJDO
DGRSWHGWKH)RXUWKDQG(OHYHQWK&LUFXLWVjGHILQLWLRQVRIWKRVH           SUHFHGHQWl LV WRR UHVWULFWLYH  7KH JRYHUQPHQW VKRXOG EH
ZRUGV  7UXH  )G DW  DIILUPLQJ WKH GHQLDO RI D      DOORZHGWREDVHDSURVHFXWLRQRQDQRYHODUJXPHQWVRORQJDV
PRWLRQ IRU DWWRUQH\ IHHV DQG FRVWV XQGHU WKH +\GH                LWLVDUHDVRQDEOHRQHZLWKRXWIHDUWKDWLWPLJKWEH VHWWLQJ
$PHQGPHQW,WVWDWHG                                                LWVHOI XS IRU OLDELOLW\ XQGHU WKH +\GH $PHQGPHQW  sXVW
                                                                         EHFDXVH WKH JRYHUQPHQW ODFNV mSUHFHGHQWl GRHV QRW
1R                       8QLWHG6WDWHVY+HDYULQ                  8QLWHG6WDWHVY+HDYULQ                        1R

DXWRPDWLFDOO\PHDQWKDWLWVSRVLWLRQLVIULYRORXV&I8QLWHG           YH[DWLRXV IULYRORXV RU LQ EDG IDLWKl HPSKDVLV DGGHG
6WDWHVY0DQFKHVWHU)DUPLQJ3jVKLS)G                 +HDYULQ DUJXHV WKDW WKH GLVWULFW FRXUWjV FRXQWE\FRXQW
WK&LUm7KHFDVHLVIULYRORXVZKHQWKHJRYHUQPHQWjV            DSSURDFKLQHYDOXDWLQJ+\GH$PHQGPHQWFODLPVLVFRQVLVWHQW
SRVLWLRQZDVIRUHFORVHGE\ELQGLQJSUHFHGHQWRUVRREYLRXVO\             ZLWK WKH ODQJXDJH RI WKH VWDWXWH  2Q WKH RWKHU KDQG WKH
ZURQJDVWREHIULYRORXVl:HWKHUHIRUHDGRSWWKHIROORZLQJ           JRYHUQPHQW FRQWHQGV WKDW WKH GLVWULFW FRXUW JDYH OLWWOH
GHILQLWLRQRIWKHWHUPmIULYRORXVlIRUWKHSXUSRVHRIWKH+\GH           FRQVLGHUDWLRQWRWKHZRUGmSRVLWLRQlZKHQLWDZDUGHGDWWRUQH\
$PHQGPHQW$IULYRORXVSRVLWLRQLVRQHODFNLQJDUHDVRQDEOH              IHHVDQGFRVWVDIWHUFRQGXFWLQJDFRXQWE\FRXQWDQDO\VLV
OHJDO EDVLV RU ZKHUH WKH JRYHUQPHQW ODFNV D UHDVRQDEOH
H[SHFWDWLRQRIDWWDLQLQJVXIILFLHQWPDWHULDOHYLGHQFHE\WKH                7KH+\GH$PHQGPHQWH[SUHVVO\VWDWHVWKDWLWLVVXEMHFWWR
WLPHRIWULDO                                                   WKHSURFHGXUHVDQGOLPLWDWLRQVRIWKH(TXDO$FFHVVWRsXVWLFH
                                                                         $FW($s$86&86&$m6XFK
    $W WKLV MXQFWXUH ZH IHHO FRPSHOOHG WR PRUH SUHFLVHO\        DZDUGV VKDOO EH JUDQWHG SXUVXDQW WR WKH SURFHGXUHV DQG
H[SOLFDWHWKHGLIIHUHQFHEHWZHHQWKHZRUGVmIULYRORXVlDQG               OLPLWDWLRQV EXW QRW WKH EXUGHQ RI SURRI SURYLGHG IRU DQ
mYH[DWLRXVl EHFDXVH *LOEHUWjV GHILQLWLRQ RI mIULYRORXVl LV         DZDUGXQGHUVHFWLRQRIWLWOH8QLWHG6WDWHV&RGHl
VLPLODU WR WKLV FRXUWjV GHILQLWLRQ DOEHLW LQ GLFWD RI          VHHHJ8QLWHG6WDWHVY5DQJHU(OHF&RPPXQLFDWLRQV,QF
mYH[DWLRXVl  &RPSDUH 7UXH  )G DW  GHILQLQJ             )G   WK &LU  DSSO\LQJ WKH ($s$
mYH[DWLRXVl DV mZLWKRXW UHDVRQDEOH RU SUREDEOH FDXVH RU           VWDWXWHRIOLPLWDWLRQV SURYLVLRQ WR D +\GH $PHQGPHQW
H[FXVHlZLWK*LOEHUW)GDWGHILQLQJmIULYRORXVl           PRWLRQ7KH($s$SURYLGHVLQSHUWLQHQWSDUWWKDWmDFRXUW
DV m>J@URXQGOHVV>@    ZLWK OLWWOH SURVSHFW RI VXFFHVVl    VKDOODZDUGWRDSUHYDLOLQJSDUW\RWKHUWKDQWKH8QLWHG6WDWHV
$OWKRXJKWKHUHLVXQGRXEWHGO\DQRYHUODSLQWKHPHDQLQJRI               IHHVDQGRWKHUH[SHQVHVLQFXUUHGE\WKDWSDUW\LQDQ\
WKH WZR ZRUGV WKH WHUP mYH[DWLRXVl HPEUDFHV WKH GLVWLQFW        DFWLRQEURXJKWE\RUDJDLQVWWKH8QLWHG6WDWHVXQOHVV
FRQFHSW RI EHLQJ EURXJKW IRU WKH SXUSRVH RI LUULWDWLQJ          WKH FRXUW ILQGV WKDW WKH SRVLWLRQ RI WKH 8QLWHG 6WDWHV ZDV
DQQR\LQJRUWRUPHQWLQJWKHRSSRVLQJSDUW\6HH:HEVWHUjV               VXEVWDQWLDOO\MXVWLILHGl86&G$
7KLUG1HZ,QWHUQDWLRQDO'LFWLRQDU\8QDEULGJHG
VHHDOVR8QLWHG6WDWHVY.QRWW)GVW&LU               ,Q LQWHUSUHWLQJ WKH WHUP mSRVLWLRQl LQ WKH FRQWH[W RI WKH
m:LWKRXWDILQGLQJRIEDGIDLWKRULPSURSHUPRWLYH               ($s$WKH6XSUHPH&RXUWGHFODUHGm7KHIDFWWKDWWKH>ZRUG@
   LI WKH JRYHUQPHQW SXUVXHV D SURVHFXWLRQ ZLWKRXW DQ\      µSRVLWLRQjLVDJDLQGHQRPLQDWHGLQWKHVLQJXODUEXWWUHVVHV
IRXQGDWLRQ RU EDVLV IRU EHOLHI WKDW LW PLJKW SUHYDLO VXFK D   WKHFRQFOXVLRQWKDWRQO\RQHWKUHVKROGGHWHUPLQDWLRQIRUWKH
SURVHFXWLRQZRXOGPRUHDSSURSULDWHO\EHGHHPHGµIULYRORXVj               HQWLUHFLYLODFWLRQLVWREHPDGHl&RPPjU,16YsHDQ
WKDQµYH[DWLRXVj5HDGLQJµYH[DWLRXVjWRHQFRPSDVVVXFKD               86,WFRQFOXGHGWKDWmWKH($s$IDYRUV
FDVHZRXOGUHQGHULWV\QRQ\PRXVZLWKµIULYRORXVjlFHUW        WUHDWLQJDFDVHDVDQLQFOXVLYHZKROHUDWKHUWKDQDVDWRPL]HG
GHQLHG868QLWHG6WDWHVY6KHUEXUQH                OLQHLWHPVl  ,G DW  VHH DOVR 5RDQRNH 5LYHU %DVLQ
)GWK&LUQRWLQJWKDWmYH[DWLRXVl             $VVjQY+XGVRQ)GWK&LUVWDWLQJ
mLQFOXGHV DQ HOHPHQW RI PDOLFLRXVQHVV RU DQ LQWHQW WR           LQ DQ ($s$ FDVH WKDW mZKHQ GHWHUPLQLQJ ZKHWKHU WKH
KDUDVVl                                                                JRYHUQPHQWjVSRVLWLRQLQDFDVHLVVXEVWDQWLDOO\MXVWLILHGZH
                                                                         ORRNEH\RQGWKH LVVXHRQZKLFKWKHSHWLWLRQHUSUHYDLOHGWR
  7KH JRYHUQPHQW DQG +HDYULQ IXUWKHU GLVDJUHH RYHU WKH            GHWHUPLQHIURPWKHWRWDOLW\RIWKHFLUFXPVWDQFHVZKHWKHUWKH
GHILQLWLRQRIWKHZRUGmSRVLWLRQl6HH86&$                JRYHUQPHQWDFWHGUHDVRQDEO\l
DXWKRUL]LQJDQDZDUGRIDWWRUQH\IHHVDQGFRVWVmZKHUHWKH
FRXUW ILQGV WKDW WKH SRVLWLRQ RI WKH 8QLWHG 6WDWHV ZDV
1R                       8QLWHG6WDWHVY+HDYULQ                 8QLWHG6WDWHVY+HDYULQ                         1R

   %HFDXVHWKH+\GH$PHQGPHQWLVVXEMHFWWRWKHSURFHGXUHV               WKDW WKH +\GH $PHQGPHQW LV QRW FRQFHUQHG ZLWK WKH
DQGOLPLWDWLRQVRIWKH($s$WKHWHUPmSRVLWLRQlVKRXOGEH               SHUFHQWDJHRIFRXQWVWKDWDUHIRXQGWREHYH[DWLRXVIULYRORXV
DFFRUGHGWKHVDPHPHDQLQJXQGHUWKH+\GH$PHQGPHQWDVLW                 RU LQ EDG IDLWK  5DWKHU WKH DQDO\VLV WXUQV RQ ZKHWKHU WKH
LVLQWKH($s$:KHQDVVHVVLQJZKHWKHUWKHmSRVLWLRQRIWKH             SURVHFXWLRQjVmSRVLWLRQlDVDZKROHLVGHHPHGWRPHHWRQHRU
8QLWHG6WDWHVZDVYH[DWLRXVIULYRORXVRULQEDGIDLWKlWKH            PRUHRIWKRVHFULWHULD
GLVWULFWFRXUWVKRXOGWKHUHIRUHPDNHRQO\RQHILQGLQJZKLFK
VKRXOGEHEDVHGRQWKHmFDVHDVDQLQFOXVLYHZKROHlsHDQ                 :KHWKHUWKHSURVHFXWLRQjVSRVLWLRQDVDZKROHLVGHHPHG
86DW$FRXQWE\FRXQWDQDO\VLVLVLQFRQVLVWHQW              IULYRORXVUHTXLUHVWKHFRXUWWRLQTXLUHLQWRWKHPHULWVRIWKH
ZLWKWKLVDSSURDFK                                                      HQWLUH FDVH  7KH GLVWULFW FRXUW EHORZ KRZHYHU GLG QRW
                                                                         FRQGXFWVXFKDQDQDO\VLV,QVWHDGLWGHWHUPLQHGWKDWWKUHHRI
   (YDOXDWLQJDFDVHDVDQLQFOXVLYHZKROHLVQRWVXVFHSWLEOH            WKHVXEVWDQWLYHFRXQWVZHUHIULYRORXVDQGDZDUGHGDWWRUQH\
WRDSUHFLVHOLWPXVWHVW7KHIDFWWKDWRQO\RQHFRXQWDPRQJ            IHHV DQG FRVWV DFFRUGLQJO\ :KDW WKH GLVWULFW FRXUW VKRXOG
PDQ\LVIULYRORXVRUQRWIULYRORXVLVQRWGHWHUPLQDWLYHDVWR            KDYH GRQH ZDV DVVHVV WKH FDVH DV DQ LQFOXVLYH ZKROH  ,W
ZKHWKHUDPRYDQWVKRXOGUHFHLYHDQDZDUGXQGHUWKH+\GH                  WKHUHIRUHDEXVHGLWVGLVFUHWLRQE\DSSO\LQJDQHUURQHRXVOHJDO
$PHQGPHQW(YHQLIWKHGLVWULFWFRXUWGHWHUPLQHVWKDWSDUWRI           VWDQGDUGLQDZDUGLQJDWWRUQH\IHHVDQGFRVWVWR+HDYULQ
WKHJRYHUQPHQWjVFDVHKDVPHULWWKHPRYDQWPLJKWVWLOOEH
HQWLWOHGWRD+\GH$PHQGPHQWDZDUGLIWKHFRXUWILQGVWKDW                  %HFDXVHWKHGLVWULFWFRXUWGLGQRWDSSO\WKHFRUUHFWOHJDO
WKH JRYHUQPHQWjV mSRVLWLRQl DV D ZKROH ZDV YH[DWLRXV             VWDQGDUG WR WKLV FRPSOH[ IDFWXDO VLWXDWLRQ ZH UHPDQG WKH
IULYRORXVRULQEDGIDLWK%\WKHVDPHWRNHQDGHWHUPLQDWLRQ         DFWLRQ VR WKDW WKH GLVWULFW FRXUW FDQ DVVHVV ZKHWKHU WKH
WKDW SDUW RI WKH JRYHUQPHQWjV FDVH LV IULYRORXV GRHV QRW        SURVHFXWLRQjVSRVLWLRQZDVDVDZKROHIULYRORXV&I8QLWHG
DXWRPDWLFDOO\HQWLWOHWKHPRYDQWWRD+\GH$PHQGPHQWDZDUG               6WDWHVY6NHGGOH1R:/DW
WK
LIWKHFRXUWILQGVWKDWWKHJRYHUQPHQWjVmSRVLWLRQlDVDZKROH           &LU$XJSHUFXULDPm7KHGLVWULFWFRXUWKDYLQJ
ZDV QRW YH[DWLRXV IULYRORXV RU LQ EDG IDLWK  7KH GLVWULFW   FRQGXFWHG WKH HQWLUH WULDO DQG ZLWQHVVHG WKH JRYHUQPHQWjV
FRXUWLQRWKHUZRUGVPXVWQRWIDLOWRVHHWKHIRUHVWIRUWKH           FDVH LV LQ D IDU VXSHULRU SRVLWLRQ WR HYDOXDWH ZKHWKHU WKH
WUHHV                                                                   JRYHUQPHQWjV SRVLWLRQ ZDV YH[DWLRXV IULYRORXV RU LQ EDG
                                                                         IDLWK7KHFRXUWKDVDIUHVKUHFROOHFWLRQRIWKHJRYHUQPHQWjV
     $SSOLFDWLRQRIWKH+\GH$PHQGPHQWWRWKHFULPLQDO                 FRQGXFW WKDW WKLV FRXUWjV UHYLHZ RI WKH FROG UHFRUG VLPSO\
       SURVHFXWLRQRI+HDYULQ                                            FDQQRW SURYLGHl  ,Q DGGLWLRQ WKH GLVWULFW FRXUW VKRXOG
                                                                         UHFRQVLGHUWKHJRYHUQPHQWjVSRVLWLRQLQOLJKWRIWKHSURSHU
   7KHJRYHUQPHQWPDLQWDLQVWKDWWKHGLVWULFWFRXUWHUUHGE\             GHILQLWLRQRIWKHWHUPmIULYRORXVlDVVHWIRUWKDERYH2QO\LI
DZDUGLQJDWWRUQH\IHHVDQGFRVWVXQGHUWKH+\GH$PHQGPHQW                WKHGLVWULFWFRXUWFRQFOXGHVWKDWWKHJRYHUQPHQWjVSRVLWLRQDV
ZKHQLWGHHPHGRQO\RIWKHFRXQWVWREHIULYRORXV7KHUH           DZKROHZDVIULYRORXVDVSURSHUO\GHILQHGZRXOGDQDZDUG
DUHWZRSUREOHPVZLWKWKHJRYHUQPHQWjVDUJXPHQW)LUVWWKH             RI DWWRUQH\ IHHV DQG FRVWV EH DSSURSULDWH XQGHU WKH +\GH
GLVWULFW FRXUW H[SOLFLWO\ UHFRJQL]HG WKDW m>V@LQFH WKH PRQH\      $PHQGPHQW
ODXQGHULQJFKDUJHVDUHGHULYDWLYHRI>WKHVXEVWDQWLYHFKDUJHV@
WKH&RXUWQHHGQRWFRQVLGHUWKHPVHSDUDWHO\l+HDYULQ              & +HDYULQjVQHWZRUWK
)6XSSGDW,QHIIHFWLWIRXQGQRWRQO\WKDW&RXQWV
 DQG  ZHUH IULYRORXV EXW LPSOLHG WKDW WKH PRQH\              $V DQ DOWHUQDWLYH JURXQG IRU UHYHUVDO WKH JRYHUQPHQW
ODXQGHULQJFKDUJHVDVVRFLDWHGZLWK&RXQWVDQGZHUH               FRQWHQGVWKDW+HDYULQVKRXOGQRWKDYHTXDOLILHGIRUDQDZDUG
DOVRIULYRORXV7KHVHFRQGSUREOHPDVGLVFXVVHGDERYHLV              RIDWWRUQH\IHHVDQGFRVWVEHFDXVHKHZDVQRWDmSDUW\lXQGHU
                                                                         WKH+\GH$PHQGPHQW7KH$PHQGPHQWDXWKRUL]HVDQDZDUG
1R                     8QLWHG6WDWHVY+HDYULQ               8QLWHG6WDWHVY+HDYULQ                         1R

RI DWWRUQH\ IHHV DQG FRVWV RQO\ WR D SUHYDLOLQJ mSDUW\l    mLQGLFDWLRQDERXWKRZKHDUULYHGDWKLVHVWLPDWHl,WDUJXHV
86&$                                                   WKDWm>D@WDPLQLPXPDGHIHQGDQWVKRXOGILOHWKHVWDWHPHQW
                                                                     RI DQ DFFRXQWDQW FRQVLVWHQW ZLWK JHQHUDOO\ DFFHSWHG
  1RGHILQLWLRQLVIRXQGLQWKH$PHQGPHQWDVWRWKHPHDQLQJ          DFFRXQWLQJSULQFLSOHVEHIRUHKHLVHQWLWOHGWRDWWRUQH\jVIHHVl
RIWKHWHUP,QVWHDGWKH$PHQGPHQWDGRSWVWKHGHILQLWLRQVHW
IRUWKLQWKH($s$8QGHUWKH($s$DQLQGLYLGXDOmSDUW\lDV           %HFDXVHWKHFDVHODZFRQWDLQVQRLQGHSWKDQDO\VLVRIWKH
RSSRVHGWRDFRUSRUDWHmSDUW\lLVmDQLQGLYLGXDOZKRVHQHW          WHUPmSDUW\lXQGHUWKH+\GH$PHQGPHQWZHDUHGLUHFWHGWR
ZRUWKGLGQRWH[FHHGDWWKHWLPHWKHDFWLRQ         WKHUHOHYDQW($s$MXULVSUXGHQFHIRUJXLGDQFHLQUHVROYLQJWKH
ZDVILOHGl86&G&%LGHILQLQJWKH        FRQIOLFWLQJDUJXPHQWV,QGLYLGXDOPRYDQWVVHHNLQJDWWRUQH\
WHUP mSDUW\l LQ WKH ($s$ VHH DOVR 8QLWHG 6WDWHV Y        IHHV DQG FRVWV SXUVXDQW WR WKH ($s$ KDYH WKH EXUGHQ RI
$GNLQVRQ)GQWK&LUDSSO\LQJ         HVWDEOLVKLQJ WKDW WKHLU QHW ZRUWK LV OHVV WKDQ WZR PLOOLRQ
WKH($s$GHILQLWLRQRImSDUW\lWRDPRWLRQSXUVXDQWWRWKH           GROODUV(VWDWHRI:ROOY8QLWHG6WDWHV)GWK
+\GH$PHQGPHQW+HDYULQ)6XSSGDWVDPH             &LU  m$V WKH SDUW\ VHHNLQJ WR UHFRYHU LWV OLWLJDWLRQ
                                                                     FRVWVWKHHVWDWHERUHWKHEXUGHQRIHVWDEOLVKLQJWKDWLWPHWWKH
  7KHGLVWULFWFRXUWGLGQRWH[SODLQLWVDQDO\VLVZLWKUHVSHFW       QHWZRUWKOLPLWDWLRQVRIWKH($s$l/RYHY5HLOO\)G
WR +HDYULQjV QHW ZRUWK  5DWKHU LW VXPPDULO\ VWDWHG WKDW   WK&LUVDPH1HWZRUWKLVGHWHUPLQHG
m>+HDYULQ@KDVJLYHQWKH&RXUWVXIILFLHQWUHDVRQWRFRQFOXGH         LQ DFFRUGDQFH ZLWK mJHQHUDOO\ DFFHSWHG DFFRXQWLQJ
WKDW KLV QHW ZRUWK LV PXFK OHVV WKDQ  PLOOLRQl  7KLV   SULQFLSOHVl6KRRWLQJ6WDU5DQFK//&Y8QLWHG6WDWHV
FRQFOXVLRQ ZDV SUHVXPDEO\ EDVHG XSRQ DQ DIILGDYLW WKDW        )GWK&LU,WLVWREHFDOFXODWHGmE\
+HDYULQVXEPLWWHGWRWKHFRXUWVWDWLQJWKDWKLVQHWZRUWKGLG       VXEWUDFWLQJ WRWDO OLDELOLWLHV IURP WRWDO DVVHWVl ,G TXRWLQJ
QRWH[FHHGWZRPLOOLRQGROODUVDWWKHWLPHWKHFULPLQDODFWLRQ       +5 5HS 1R  DW   UHSULQWHG LQ 
ZDVILOHG,QDGGLWLRQKLVDIILGDYLWVHWVIRUWKWKHIROORZLQJ      86&&$1
FDOFXODWLRQV
                                                                        $PRYDQWjVEDUHDVVHUWLRQWKDWKLVRUKHUQHWZRUWKIDOOV
    ,I,FRXOGJUDGXDOO\OLTXLGDWHP\DVVHWVVRPHRIZKLFK          VKRUWRIWZRPLOOLRQGROODUVZLOOJHQHUDOO\EHLQVXIILFLHQWWR
  DUHRZQHGLQMRLQWVXUYLYRUVKLSZLWKP\ZLIHDIWHUDOO            VDWLVI\WKLVEXUGHQ,G5DWKHUWKHPRYDQWVKRXOGDWOHDVW
  ELOOV DUH SDLG , HVWLPDWH WKDW , ZRXOG HQG XS ZLWK      SURIIHUDQDIILGDYLWVKRZLQJWKDWWKHVWDWXWRU\FULWHULDKDVEHHQ
  DSSUR[LPDWHO\OHVVFDSLWDOJDLQVWD[DQGOHVV             PHW  ,G KROGLQJ WKDW D PRYDQWjV XQVZRUQ DQG XQYHULILHG
  DQ\PRQH\WKDWLVUHFRYHUHGE\WKHWUXVWHHLQEDQNUXSWF\           OHWWHU E\ LWVHOI GRHV QRW VDWLVI\ WKH PRYDQWjV QHWZRUWK
  LQWKHWZRDGYHUVDU\SURFHHGLQJVWKDWDUHSHQGLQJ7KH            EXUGHQ  %XW VHH 'j$PLFR Y ,QGXV 8QLRQ RI 0DULQH 	
  GROODU DPRXQW LQ WKRVH WZR SURFHHGLQJV LV RYHU              6KLSEXLOGLQJ:RUNHUVRI$P)6XSS'0G
  SOXVDFFXPXODWHGLQWHUHVW                             QRWLQJWKDWPRYDQWVQHHGQRWSURYHLQDQDIILGDYLWWKDW
                                                                     WKH\DUHmSDUWLHVlXQGHUWKH($s$mXQWLOVRPHREMHFWLRQWR
    ,I,TXLFNO\VHOOV>VLF@P\DVVHWV,HVWLPDWHWKDW,ZRXOG      WKHLUHOLJLELOLW\LVUDLVHGE\WKHJRYHUQPHQWl
  KDYHDERXWOHIWDIWHUDOOELOOVZHUHSDLGOHVV
  WD[HVDQGOHVVDQ\DPRXQWVWKHWUXVWHHLVDEOHWRUHFRYHU             :H KDYH EHHQ XQDEOH WR ILQG DQ\ DXWKRULW\ KROGLQJ WKDW
  SXUVXDQW WR WKH WZR DGYHUVDU\ SURFHHGLQJV WKDW DUH          HLWKHUD+\GH$PHQGPHQWPRYDQWRUDQ($s$PRYDQWIDFHG
  SHQGLQJ                                                          ZLWK D FKDOOHQJH WR KLV RU KHU QHW ZRUWK PXVW SURYLGH DQ
                                                                     DIILGDYLW DQ\ PRUH VSHFLILF WKDQ WKDW ILOHG E\ +HDYULQ  ,Q
 7KH KHDUW RI WKH JRYHUQPHQWjV FRQWHQWLRQ UHJDUGLQJ            SDUWLFXODUZHILQGQRVXSSRUWIRUWKHJRYHUQPHQWjVDUJXPHQW
+HDYULQjV QHW ZRUWK LV WKDW KH IDLOHG WR SURYLGH DQ\
1R                      8QLWHG6WDWHVY+HDYULQ       

WKDW D PRYDQW PXVW ILOH mWKH VWDWHPHQW RI DQ DFFRXQWDQW
FRQVLVWHQW ZLWK JHQHUDOO\ DFFHSWHG DFFRXQWLQJ SULQFLSOHV
EHIRUHKHLVHQWLWOHGWRDWWRUQH\jVIHHVl
   +HDYULQjVDIILGDYLWQRWRQO\VWDWHVWKDWKLVQHWZRUWKmGLG
QRWH[FHHGWZRPLOOLRQGROODUVDWWKHWLPHWKHFULPLQDODFWLRQ
ZDV ILOHGl EXW DOVR SURYLGHV WKH VXPPDU\ FDOFXODWLRQV RQ
ZKLFK KH EDVHG KLV FRQFOXVLRQ  7KLV LQ RXU RSLQLRQ LV
VXIILFLHQWWRFRQVWLWXWHSULPDIDFLHSURRIRI+HDYULQjVVWDWXV
DVDmSDUW\l:HUHDFKWKLVFRQFOXVLRQEHFDXVHZHEHOLHYH
WKDWLWZRXOGEHXQQHFHVVDULO\EXUGHQVRPHWRUHTXLUHHYHU\
+\GH$PHQGPHQWPRYDQWWRVXEPLWDQDFFRXQWDQWjVILQDQFLDO
VWDWHPHQWZKHUHRQO\DWLQ\IUDFWLRQRIWKHSRSXODWLRQKDVD
QHWZRUWKDQ\ZKHUHQHDUPLOOLRQ  ,Q WKHUHODWLYHO\IHZ
FDVHVZKHUHWKHJRYHUQPHQWVHULRXVO\TXHVWLRQVWKHPRYDQWjV
VWDWXVDVDmSDUW\lLWLVIUHHWRSXUVXHGLVFRYHU\RQWKLVLVVXH
6HH  86&  $ m7R GHWHUPLQH ZKHWKHU RU QRW WR
DZDUGIHHVDQGFRVWVXQGHUWKLVVHFWLRQWKHFRXUWIRUJRRG
FDXVHVKRZQPD\UHFHLYHHYLGHQFHl,WVIDLOXUHWRGR
VRLQWKLVFDVHFDQEHFRQVLGHUHGDQLPSOLHGFRQFHVVLRQRI
+HDYULQjV VWDWXV DV D mSDUW\l  :H WKHUHIRUH FRQFOXGH WKDW
+HDYULQSUHVHQWHGVXIILFLHQWHYLGHQFHWRTXDOLI\DVDmSDUW\l
XQGHUWKH+\GH$PHQGPHQW
                    ,,,&21&/86,21
   )RU DOO RI WKH UHDVRQV VHW IRUWK DERYH ZH $)),50 WKH
ILQGLQJRIWKHGLVWULFWFRXUWWKDW+HDYULQTXDOLILHGDVDmSDUW\l
XQGHUWKH+\GH$PHQGPHQWEXW9$&$7(WKHMXGJPHQWDQG
5(0$1' WKH DFWLRQ WR GHWHUPLQH ZKHWKHU +HDYULQ LV
HQWLWOHG WR DWWRUQH\ IHHV DQG FRVWV XQGHU WKH SURSHU OHJDO
VWDQGDUGV