Court Opinion

ID: 2969693
Source: CourtListenerOpinion
Date Created: 2015-09-22 15:55:10.284779+00
Date Added: 2024-06-11T11:41:52.409792
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

s$0(6 6&+5$'(5 %58&(              ;
:,/621 /,%(57$5,$1 3$57< 
2) 2+,2                            
                                      1R
            3ODLQWLIIV$SSHOOHHV 
                                     !
                                    
             Y                     
                                    
s .(11(7+ %/$&.:(//               
2KLR6HFUHWDU\RI6WDWH            
          'HIHQGDQW$SSHOODQW 
                                    
                                    
&/$5. &2817< %2$5' 2)               
(/(&7,216                          
                      'HIHQGDQW 
                                    
                                   1
       $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
        IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW'D\WRQ
   1Rn0LFKDHO50HU]0DJLVWUDWHsXGJH
              $UJXHGsDQXDU\
        'HFLGHGDQG)LOHG)HEUXDU\

                           
        6FKUDGHUHWDOY%ODFNZHOO                      1R   1R                  6FKUDGHUHWDOY%ODFNZHOO      

    %HIRUH'$8*+75(<DQG*,/0$1&LUFXLWsXGJHV                        JDLQHGDFFHVVWRDSSHDURQWKHJHQHUDOHOHFWLRQEDOORWXQGHU
                +(<%851'LVWULFWsXGJH
                                 WKHLQGHSHQGHQWSHWLWLRQSURFHGXUHDVDQm,QGHSHQGHQWl
                       BBBBBBBBBBBBBBBBB                                    ,QFRQFOXVLRQZHDFNQRZOHGJHWKDW2KLRjVEDOORWVFKHPH
                                                                          SODFHV D EXUGHQ RQ SROLWLFDO SDUWLHV WR EHFRPH UHFRJQL]HG
                            &2816(/                                       XQGHU2KLRODZEHIRUHDPHPEHUFDQDSSHDURQWKHJHQHUDO
                                                                          HOHFWLRQ EDOORW DV D FDQGLGDWH RI WKDW SDUW\  :H KROG
$5*8('$UWKXUsDPHV0DU]LDOHsU2)),&(2)7+(                        KRZHYHU WKDW WKLV EXUGHQ LV QRW XQUHDVRQDEOH LQ OLJKW RI
$77251(< *(1(5$/ &ROXPEXV 2KLR IRU $SSHOODQW                     2KLRjVOHJLWLPDWHLQWHUHVWVDQGLVQRWVRRQHURXVDVWRPDNH
:LOOLDP 9 6WHSKHQVRQ :22' &2817< 38%/,&                            WKHODZXQFRQVWLWXWLRQDOXQGHUWKH$QGHUVRQEDODQFLQJWHVW
'()(1'(5 %RZOLQJ *UHHQ 2KLR IRU $SSHOOHHV                        (YHQ WKRXJK WKH 2KLR OHJLVODWXUH UHHQDFWHG 2KLR 5HYLVHG
21%5,()$UWKXUsDPHV0DU]LDOHsU2)),&(2)7+(                      &RGHZLWKRXWUHIOHFWLQJWKHHIIHFWRIWKLVFRXUWjV
$77251(< *(1(5$/ &ROXPEXV 2KLR IRU $SSHOODQW                     UXOLQJLQ5RVHQDVLWSHUWDLQVWRLQGHSHQGHQWFDQGLGDWHV2KLR
:LOOLDP 9 6WHSKHQVRQ :22' &2817< 38%/,&                            UHWDLQV WKH ULJKW WR HQVXUH WKDW FDQGLGDWHV FODLPLQJ WR
'()(1'(5%RZOLQJ*UHHQ2KLRIRU$SSHOOHHV                           UHSUHVHQW D SROLWLFDO SDUW\ PHHW WKH VWDWXWRU\ UHTXLUHPHQWV
                                                                          QHFHVVDU\ WR HVWDEOLVK WKDW WKH SXWDWLYH SDUW\ KDV REWDLQHG
                       BBBBBBBBBBBBBBBBB                                  mVRPH SUHOLPLQDU\ VKRZLQJ RI D VLJQLILFDQW PRGLFXP RI
                                                                          VXSSRUWlEHIRUHDSSHDULQJRQWKHEDOORWDVDFDQGLGDWHRIWKDW
                           23,1,21                                        SDUW\sHQQHVV86DW:HWKHUHIRUHKROGWKDWWKH
                       BBBBBBBBBBBBBBBBB                                  GHQLDO RI SDUW\DIILOLDWLRQ YRWLQJ FXHV WR FDQGLGDWHV RI
   521$/'/((*,/0$1&LUFXLWsXGJHsDPHV6FKUDGHU                      XQTXDOLILHG SROLWLFDO SDUWLHV XQGHU   RI WKH 2KLR
UHFHLYHGWKHQRPLQDWLRQRIWKH/LEHUWDULDQ3DUW\RI2KLRWREH            5HYLVHG&RGHVXUYLYHVFRQVWLWXWLRQDOFKDOOHQJH
LWVFDQGLGDWHIRUWKH8QLWHG6WDWHV+RXVHRI5HSUHVHQWDWLYHV                                   ,,,&21&/86,21
IURPWKH6HYHQWK&RQJUHVVLRQDO'LVWULFWRI2KLRLQWKH
JHQHUDOHOHFWLRQV6FKUDGHUILOHGDQRPLQDWLQJSHWLWLRQZLWK               )RUDOORIWKHUHDVRQVVHWIRUWKDERYHZH5(9(56(WKH
WKH &ODUN &RXQW\ %RDUG RI (OHFWLRQV WKDW FRQWDLQHG           MXGJPHQWRIWKHGLVWULFWFRXUW
VLJQDWXUHVDQXPEHUVXIILFLHQWXQGHU2KLRODZWRVHFXUHKLV
SODFHRQWKHEDOORW7KH/LEHUWDULDQ3DUW\RI2KLRKRZHYHU
KDGQRWPHWWKHUHTXLUHPHQWVWREHUHFRJQL]HGDVDSROLWLFDO
SDUW\LQ2KLRDWWKDWWLPH$VDUHVXOW2KLRODZSURKLELWHG
6FKUDGHUIURPGHVLJQDWLQJKLVDIILOLDWLRQZLWKWKH/LEHUWDULDQ
3DUW\DVDSDUWLVDQmFXHlRQWKHEDOORW
   6FKUDGHUWKH/LEHUWDULDQ3DUW\DQG%UXFH:LOVRQDYRWHU
ILOHG DQ DFWLRQ XQGHU  86&   DJDLQVW 2KLRjV
6HFUHWDU\RI6WDWHDQGWKH&ODUN&RXQW\%RDUGRI(OHFWLRQVWR

     
     7KH +RQRUDEOH sRKQ * +H\EXUQ ,, 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU
WKH :HVWHUQ 'LVWULFW RI .HQWXFN\ VLWWLQJ E\ GHVLJQDWLRQ
    6FKUDGHUHWDOY%ODFNZHOO                      1R        1R                    6FKUDGHUHWDOY%ODFNZHOO          

HPSKDVL]HV WKH LPSRUWDQFH RI RXU UROH XQGHU $QGHUVRQ WR             GHVLJQDWH6FKUDGHUDVDm/LEHUWDULDQlRQWKHEDOORWFODLPLQJ
EDODQFH2KLRjVLQWHUHVWVLQUHJXODWLQJSROLWLFDOSDUWLHVDJDLQVW            WKDW WKH 2KLR EDOORWIRUP VWDWXWH YLRODWHG WKH )LUVW DQG
WKHFRQVWLWXWLRQDOULJKWVRI6FKUDGHUDQGWKH/LEHUWDULDQ3DUW\             )RXUWHHQWK$PHQGPHQWVWRWKH8QLWHG6WDWHV&RQVWLWXWLRQ
RI2KLR                                                                  7KHGLVWULFWFRXUWKHOGIRU6FKUDGHUGHFODULQJWKDWWKH2KLR
                                                                            VWDWXWHSURKLELWLQJYRWLQJFXHVIRUXQTXDOLILHGSROLWLFDOSDUWLHV
   )XUWKHUPRUHRWKHUFLUFXLWVKDYHHQJDJHGLQVLPLODUUHYLHZV              ZDVXQFRQVWLWXWLRQDO7KHVWDWHRI2KLRQRZFKDOOHQJHVWKDW
RIVWDWHHOHFWLRQODZVDQGKDYHFRQFOXGHGWKDWWKHVWDWHVKDYH              GHFLVLRQ)RUWKHUHDVRQVVHWIRUWKEHORZZH5(9(56(WKH
VLJQLILFDQW DXWKRULW\ WR UHJXODWH WKH IRUPDWLRQ RI SROLWLFDO         MXGJPHQWRIWKHGLVWULFWFRXUW
SDUWLHVDQGWKHLGHQWLILFDWLRQRIFDQGLGDWHVRQWKHEDOORW6HH
0F&ODXJKOLQ Y 1RUWK &DUROLQD %G RI (OHFWLRQV  )G                                    ,%$&.*5281'
 WK &LU  XSKROGLQJ DV FRQVWLWXWLRQDO 1RUWK
&DUROLQDjV UHTXLUHPHQW WKDW D FDQGLGDWH RI D QHZ SROLWLFDO          $ 2KLRHOHFWLRQODZVSHUWDLQLQJWRYRWLQJFXHV
SDUW\JDWKHUVLJQDWXUHVRIRIYRWHUVVWDWHZLGHZLWKDWOHDVW
VLJQDWXUHVIURPUHJLVWHUHGYRWHUVUHVLGLQJLQHDFKRI                    $WLVVXHLQWKLVDSSHDODUHWZRVHFWLRQVRIWKH2KLR5HYLVHG
FRQJUHVVLRQDO GLVWULFWV DQG WKHQ UHTXLULQJ WKH QHZ SDUW\            &RGHWKDWFRPELQHWRUHJXODWHKRZHOLJLEOHFDQGLGDWHVDSSHDU
FDQGLGDWHWRSROODWOHDVWRIYRWHVLQWKHJHQHUDOHOHFWLRQ             RQWKHJHQHUDOHOHFWLRQEDOORW7KHILUVWGHVFULEHVWKHEDOORW
IRUWKDWSDUW\WRUHPDLQRQWKHEDOORW5DLQERZ&RDOLWLRQY               IRUPDW6HH2KLR5HY&RGH9RWLQJFXHVZKLFK
2NODKRPD6WDWH(OHFWLRQ%G)GWK&LU                  DUHGHVFULSWLRQVRISROLWLFDODIILOLDWLRQDUHDOORZHGXQGHUWKLV
ILQGLQJ FRQVWLWXWLRQDO 2NODKRPDjV HOHFWLRQ VFKHPH WKDW                VHFWLRQEXWRQO\IRUFDQGLGDWHVRISROLWLFDOSDUWLHVWKDWDUH
DXWKRUL]HV FDQGLGDWHV RI UHFRJQL]HG SDUWLHV WR EH                     UHFRJQL]HG XQGHU 2KLR ODZ  m8QGHU WKH QDPH RI HDFK
DXWRPDWLFDOO\ LGHQWLILHG RQ WKH EDOORW E\ SDUW\ ODEHO EXW          FDQGLGDWHQRPLQDWHGDWDSULPDU\HOHFWLRQDQGHDFKFDQGLGDWH
UHTXLUHV XQUHFRJQL]HG SDUWLHV WR ILOH SHWLWLRQV EHDULQJ WKH          FHUWLILHGE\DSDUW\FRPPLWWHHVKDOOEHSULQWHGLQOHVV
VLJQDWXUHV RI DW OHDVW  RI WKH WRWDO YRWHV FDVW LQ WKH ODVW   SURPLQHQWW\SHIDFHWKDQWKDWLQZKLFKWKHFDQGLGDWHjVQDPH
JHQHUDOHOHFWLRQWRDFKLHYHVLPLODULGHQWLILFDWLRQ/LEHUWDULDQ            LV SULQWHG WKH QDPH RI WKH SROLWLFDO SDUW\ E\ ZKLFK WKH
3DUW\ Y )ORULGD  )G   WK &LU                FDQGLGDWHZDVQRPLQDWHGRUFHUWLILHGl,G
XSKROGLQJDVFRQVWLWXWLRQDODQHOHFWLRQODZXQGHUZKLFKmD
PLQRU SROLWLFDO SDUW\ PD\ QRW UXQ D FDQGLGDWH LQ D ORFDO              7KHVHFRQGUHOHYDQWVHFWLRQGHILQHVDSROLWLFDOSDUW\XQGHU
HOHFWLRQZLWKRXWILUVWREWDLQLQJDFFHVVWRWKHVWDWHjVJHQHUDO              2KLRODZ6HH2KLR5HY&RGHm$SROLWLFDOSDUW\
HOHFWLRQ EDOORW WKURXJK WKH  VWDWHZLGH SHWLWLRQLQJ                  LVDQ\JURXSRIYRWHUVWKDWDWWKHPRVWUHFHQWUHJXODUVWDWH
UHTXLUHPHQWl                                                              HOHFWLRQSROOHGIRULWVFDQGLGDWHIRUJRYHUQRULQWKHVWDWHRU
                                                                            QRPLQHHVIRUSUHVLGHQWLDOHOHFWRUVDWOHDVWILYHSHUFHQWRIWKH
   %HFDXVH mWKH 6WDWHjV LPSRUWDQW UHJXODWRU\ LQWHUHVWV DUH            HQWLUHYRWHFDVWIRUWKDWRIILFHRUWKDWILOHGZLWKWKHVHFUHWDU\
JHQHUDOO\VXIILFLHQWWRMXVWLI\UHDVRQDEOHQRQGLVFULPLQDWRU\               RI VWDWHl  ,G  ,I KRZHYHU D QHZ SROLWLFDO SDUW\ VHHNV WR
UHVWULFWLRQVl $QGHUVRQ  86  D SDUW\ FKDOOHQJLQJ           EHFRPH TXDOLILHG WKHQ LW PXVW ILOH D mSHWLWLRQ VLJQHG E\
2KLR5HYLVHG&RGHEHDUVDKHDY\FRQVWLWXWLRQDO                    TXDOLILHGHOHFWRUVHTXDOLQQXPEHUWRDWOHDVWRQHSHUFHQWRI
EXUGHQm7KDWDSDUWLFXODULQGLYLGXDOPD\QRWDSSHDURQWKH                WKH WRWDO YRWH IRU JRYHUQRU RU QRPLQHHV IRU SUHVLGHQWLDO
EDOORW DV D SDUWLFXODU SDUW\jV FDQGLGDWH GRHV QRW VHYHUHO\          HOHFWRUVDWWKHPRVWUHFHQWHOHFWLRQGHFODULQJWKHLULQWHQWLRQ
EXUGHQWKDWSDUW\jVDVVRFLDWLRQDOULJKWVl7LPPRQV86               RIRUJDQL]LQJDSROLWLFDOSDUW\WKHQDPHRIZKLFKVKDOO EH
DW:LWKRUZLWKRXWWKHFXHm/LEHUWDULDQl6FKUDGHUKDG                VWDWHG LQ WKH GHFODUDWLRQ DQG RI SDUWLFLSDWLQJ LQ WKH
                                                                            VXFFHHGLQJSULPDU\HOHFWLRQKHOGLQHYHQQXPEHUHG\HDUV
                                                                            WKDWRFFXUVPRUHWKDQRQHKXQGUHGWZHQW\GD\VDIWHUWKHGDWH
     6FKUDGHUHWDOY%ODFNZHOO                   1R       1R                   6FKUDGHUHWDOY%ODFNZHOO       

RIILOLQJl,G$VDUHVXOWDFDQGLGDWHPXVWEHWKHQRPLQHH          V\VWHP WKDW GLVWLQJXLVKHV EHWZHHQ FDQGLGDWHV RI mSROLWLFDO
RI D TXDOLILHG SDUW\ DV GHILQHG XQGHU 2KLR 5HYLVHG &RGH        SDUWLHVl DQG XQUHFRJQL]HG mSROLWLFDO ERGLHVl DQG UHTXLUHV
  LQ RUGHU WR REWDLQ D SDUWLVDQ FXH RQ WKH EDOORW    LQGHSHQGHQW FDQGLGDWHV DQG FDQGLGDWHV RI XQUHFRJQL]HG
SXUVXDQWWR2KLR5HYLVHG&RGH$QLQGHSHQGHQW                SROLWLFDO ERGLHV WR ILOH QRPLQDWLQJ SHWLWLRQV FRQWDLQLQJ WKH
FDQGLGDWHIRUHOHFWLRQWRDQRIILFHLQFRQWUDVWPXVWVLPSO\           VLJQDWXUHVRIILYHSHUFHQWRIWKHHOLJLEOHYRWHUVLQWKHSUHYLRXV
ILOHDVWDWHPHQWRIFDQGLGDF\DQGDQRPLQDWLQJSHWLWLRQZLWK            HOHFWLRQ
WKH UHTXLVLWH QXPEHU RI VLJQDWXUHV  6HH 2KLR 5HY &RGH
                                                            ,QGHFODULQJXQFRQVWLWXWLRQDOWKHGLVWULFWFRXUW
                                                                        QHYHUWKHOHVV PDLQWDLQHG WKDW m>Q@RWKLQJ LQ >LWV@ 'HFLVLRQ
  ,QVXPDOOFDQGLGDWHVOLVWHGRQWKH2KLREDOORWPXVWJDLQ            VKRXOG EH UHDG DV FDVWLQJ GRXEW RQ WKH YDOLGLW\ RI 2KLR
DFFHVV HLWKHU DV WKH QRPLQHH RI D TXDOLILHG SROLWLFDO SDUW\   5HYLVHG &RGH  l  7KLV SRVLWLRQ KRZHYHU LV
WKURXJKWKHLQGHSHQGHQWSHWLWLRQSURFHGXUHRUDVDPHPEHU              XQWHQDEOH%\DOORZLQJDFDQGLGDWHZKRJDLQVDFFHVVWRWKH
RIDSUHYLRXVO\XQTXDOLILHGSROLWLFDOSDUW\WKDWREWDLQVHQRXJK         EDOORWWKURXJKWKHLQGHSHQGHQWSHWLWLRQSURFHGXUHWRFKRRVH
VLJQDWXUHV WR EHFRPH D SROLWLFDO SDUW\ DV GHILQHG LQ 2KLR      DQ\SDUWLVDQFXHWKDWKHRUVKHGHVLUHVWKHGLVWULFWFRXUWKDVLQ
5HYLVHG &RGH    %RWK 6FKUDGHU DQG WKH 2KLR            HIIHFW GHQLHG 2KLR WKH ULJKW WR UHDVRQDEO\ UHJXODWH WKH
$WWRUQH\*HQHUDODJUHHWKDW2KLR5HYLVHG&RGH                 IRUPDWLRQRISROLWLFDOSDUWLHVZLWKLQLWVERUGHUV
ZDVSURSHUO\LQWHUSUHWHGWRGHQ\6FKUDGHUDQGRWKHUIXWXUH
FDQGLGDWHV ZKR OLNH KLP DUH PHPEHUV RI XQTXDOLILHG                )LQDOO\WKH$QGHUVRQWHVWUHTXLUHVEDODQFLQJWKHFKDUDFWHU
SROLWLFDOSDUWLHVDSDUWLVDQFXHRQWKHEDOORW                       DQGPDJQLWXGHRIWKHFRQVWLWXWLRQDOLQMXU\WR6FKUDGHUDQGWKH
                                                                        /LEHUWDULDQ3DUW\RI2KLRDJDLQVWWKHVWDWHjVLQWHUHVWV2KLR
   2KLRjVHOHFWLRQODZVKDYHEHHQWKHVXEMHFWRIFRQVWLWXWLRQDO         DUJXHV WKDW LWV EDOORWDFFHVV VFKHPH WKDW GLIIHUHQWLDWHV
VFUXWLQ\LQVHYHUDOSULRUFDVHV2QHLV:LOOLDPVY5KRGHV            EHWZHHQ WKH SDUW\SHWLWLRQ SURFHGXUH DQG WKH LQGHSHQGHQW
 86    GHFODULQJ 2KLRjV EDOORWDFFHVV           SHWLWLRQ SURFHGXUH LV SUHFLVHO\ WKH W\SH RI UHDVRQDEOH
VFKHPHWKDWUHTXLUHGDQHZSDUW\WRFROOHFWWKHVLJQDWXUHVRI           UHJXODWLRQWKDWUHTXLUHVDFDQGLGDWHRIDQXQTXDOLILHGSDUW\WR
 SHUFHQW RI WKH HOHFWRUV LQ WKH SUHYLRXV JXEHUQDWRULDO        VKRZDmVLJQLILFDQWPRGLFXPRIVXSSRUWlLQRUGHUWRVHFXUHD
HOHFWLRQ XQFRQVWLWXWLRQDO EHFDXVH LW ZDV VR UHVWULFWLYH DQG     SDUW\DIILOLDWLRQYRWLQJFXHRQWKHEDOORW7KH6XSUHPH&RXUW
EHFDXVH LW HIIHFWLYHO\ SURYLGHG WKH 'HPRFUDWLF DQG                LV LQ DJUHHPHQW  m7KH 6WDWH VXUHO\ KDV D YDOLG LQWHUHVW LQ
5HSXEOLFDQSDUWLHVZLWKDmFRPSOHWHPRQRSRO\l$QRWKHULV             PDNLQJ VXUH WKDW PLQRU DQG WKLUG SDUWLHV ZKR DUH JUDQWHG
$QGHUVRQY&HOHEUH]]H86VWULNLQJGRZQ              DFFHVVWRWKHEDOORWDUHERQDILGHDQGDFWXDOO\VXSSRUWHGRQ
2KLRjV HDUO\ GHDGOLQH IRU LQGHSHQGHQW FDQGLGDWHV WR ILOH D      WKHLURZQPHULWVE\WKRVHZKRKDYHSURYLGHGWKHVWDWXWRULO\
VWDWHPHQW RI FDQGLGDF\ DQG D QRPLQDWLQJ SHWLWLRQ DV DQ          UHTXLUHGSHWLWLRQRUEDOORWVXSSRUWl7LPPRQVY7ZLQ&LWLHV
XQFRQVWLWXWLRQDOEXUGHQRQWKHYRWLQJDQGDVVRFLDWLRQDOULJKWV          $UHD1HZ3DUW\86
RIWKHLUVXSSRUWHUV0RUHUHFHQWO\KRZHYHUWKLVFRXUWKDV
XSKHOG WKH VLJQDWXUH UHTXLUHPHQW RI 2KLRjV LQGHSHQGHQW              6FKUDGHU KRZHYHU PDLQWDLQV WKDW 7LPPRQV LV IDFWXDOO\
SHWLWLRQ SURFHGXUH XQGHU 2KLR 5HYLVHG &RGH             GLVWLQJXLVKDEOHDQGVKRXOGQRWDSSO\WRWKHFDVHEHIRUHXV$W
ILQGLQJ WKDW WKH EXUGHQ RI REWDLQLQJ WKH VLJQDWXUHV RI RQH     LVVXHLQ7LPPRQVZDV0LQQHVRWDjVDQWLIXVLRQODZZKLFKWKH
SHUFHQW RI WKH TXDOLILHG HOHFWRUV LQ WKH ODVW JXEHUQDWRULDO     &RXUWXSKHOG8QGHUWKDWODZDFDQGLGDWHRQDEDOORWFDQQRW
HOHFWLRQLVQRWXQFRQVWLWXWLRQDOO\EXUGHQVRPH6HH0LOOHUY           DSSHDUDVWKHFDQGLGDWHRIPRUHWKDQRQHSDUW\6HHLGDW
/RUDLQ&RXQW\%GRI(OHFWLRQV)GWK&LU             $OWKRXJK WKH FRQWH[W RI WKH 7LPPRQV GHFLVLRQ LV
                                                                        GLIIHUHQW IURP WKH 2KLR ODZ XQGHU VFUXWLQ\ KHUH 7LPPRQV
    6FKUDGHUHWDOY%ODFNZHOO                   1R       1R                   6FKUDGHUHWDOY%ODFNZHOO        

  JRYHUQPHQWE\HOHFWLQJLWVFDQGLGDWHVWRSXEOLFRIILFH                  7KH VSHFLILF VHFWLRQV DW LVVXH LQ 6FKUDGHUjV FDVH
  )URPWKHVWDQGSRLQWRIDSRWHQWLDOVXSSRUWHUDIILOLDWLRQ               DQG  ZHUH VFUXWLQL]HG E\ WKLV FRXUW LQ
  ZLWK D QHZ SDUW\ ZRXOG PHDQ JLYLQJ XS KLV WLHV ZLWK         5RVHQY%URZQ)GWK&LU,QSDUWLFXODU
  DQRWKHUSDUW\RUVDFULILFLQJKLVRZQLQGHSHQGHQWVWDWXV              WKHSODLQWLIILQ5RVHQFKDOOHQJHGWKHIDLOXUHRIWR
  HYHQWKRXJKKLVSRVVLEOHLQWHUHVWLQWKHQHZSDUW\FHQWHUV            DOORZWKHFXHRIm,QGHSHQGHQWlWREHXVHGIRUFDQGLGDWHVZKR
  DURXQGDSDUWLFXODUFDQGLGDWHIRUDSDUWLFXODURIILFH                JDLQ DFFHVV WR WKH EDOORW WKURXJK WKH LQGHSHQGHQWSHWLWLRQ
                                                                        SURFHGXUH  7KLV FRXUW KHOG WKDW   ZDV
6WRUHU Y %URZQ  86    XSKROGLQJ DV        mXQFRQVWLWXWLRQDOEHFDXVHLWYLRODWHVWKH)LUVWDQG)RXUWHHQWK
FRQVWLWXWLRQDO&DOLIRUQLDjVUHTXLUHPHQWWKDWDQLQGHSHQGHQW             $PHQGPHQW ULJKWV RI ,QGHSHQGHQW FDQGLGDWHV WR EH VR
FDQGLGDWH IRU FRQJUHVVLRQDO RU SUHVLGHQWLDO RIILFH PXVW EH       GHVLJQDWHGRQ2KLRjVJHQHUDOHOHFWLRQEDOORWVl5RVHQ
SROLWLFDOO\ GLVDIILOLDWHG IRU DW OHDVW RQH \HDU SULRU WR WKH   )GDW
LPPHGLDWHO\SUHFHGLQJSULPDU\HOHFWLRQ7KHGLVWULFWFRXUWjV
KHDY\UHOLDQFHRQ5RVHQZDVWKHUHIRUHPLVSODFHGSDUWLFXODUO\             'HVSLWHWKLVFRXUWjVUXOLQJLQ5RVHQWKH2KLROHJLVODWXUH
LQOLJKWRI2KLRjVLQWHUHVWVWKDWPXVWEHEDODQFHGDJDLQVWWKH          UHHQDFWHG   LQ  ZLWKRXW DQ\ FKDQJHV WR WKH
HQFURDFKPHQWXSRQ6FKUDGHUjVDQGWKH/LEHUWDULDQ3DUW\RI               SRUWLRQRIWKHVWDWXWHWKDWGHDOVZLWKYRWLQJFXHVRQWKHEDOORW
2KLRjV)LUVWDQG)RXUWHHQWK$PHQGPHQWULJKWV                           6FKUDGHULVWKXVFKDOOHQJLQJWKHVDPHYRWLQJFXHODQJXDJHLQ
                                                                        2KLR5HYLVHG&RGHWKDWWKLVFRXUWVWUXFNGRZQYLV
  0RYLQJWRWKHVHFRQGVWHSRIWKH$QGHUVRQEDODQFLQJWHVW             DYLV LQGHSHQGHQW FDQGLGDWHV LQ 5RVHQ  $W RUDO DUJXPHQW
ZH PXVW QRZ LGHQWLI\ DQG HYDOXDWH 2KLRjV LQWHUHVWV WKDW         KRZHYHU FRXQVHO IRU WKH VWDWH QRWHG WKDW 2KLR UHJXODUO\
ZRXOGMXVWLI\LPSRVLQJDEXUGHQRQDVVRFLDWLRQDOULJKWV6HH           IROORZV5RVHQHYHQWKRXJKWKHUHOHYDQWSRUWLRQRIWKHVWDWXWH
$QGHUVRQ  86 DW   1R RQH TXHVWLRQV WKH EDVLF        KDVQRWFKDQJHG,WGRHVVRE\LQIRUPDOO\DVNLQJFDQGLGDWHV
SUHPLVHWKDWVWDWHVDUHHQWLWOHGWRUHJXODWHHOHFWLRQVm>$@VD        ZKRJDLQDFFHVVWRWKHEDOORWWKURXJKWKHLQGHSHQGHQWSHWLWLRQ
SUDFWLFDO PDWWHU WKHUH PXVW EH D VXEVWDQWLDO UHJXODWLRQ RI     SURFHGXUHZKHWKHUWKH\ZLVKWRKDYHWKHFXHm,QGHSHQGHQWl
HOHFWLRQVLIWKH\DUHWREHIDLUDQGKRQHVWDQGLIVRPHVRUWRI         DIILOLDWHGZLWKWKHLUQDPHVRQWKHJHQHUDOHOHFWLRQEDOORW
RUGHU UDWKHU WKDQ FKDRV LV WR DFFRPSDQ\ WKH GHPRFUDWLF
SURFHVVl6WRUHU86DW2KLRFODLPVWKDWGHQ\LQJ             6FKUDGHUQRWHVWKDWDVDUHVXOWRIWKHFRQQHFWLRQEHWZHHQ
SDUW\ ODEHOV WR FDQGLGDWHV RI XQTXDOLILHG SROLWLFDO SDUWLHV      DQGDSUHYLRXVO\XQTXDOLILHGSDUW\WKDW
PLQLPL]HV YRWHU FRQIXVLRQ SUHYHQWV YRWHU GHFHSWLRQ DQG          ZLVKHVWRSODFHDFDQGLGDWHRQWKHJHQHUDOHOHFWLRQEDOORWZLWK
SURPRWHVSROLWLFDOVWDELOLW\                                         WKH SDUW\jV YRWLQJ FXH PXVW ILOH WKH UHTXLVLWH QXPEHU RI
                                                                        VLJQDWXUHVDSSUR[LPDWHO\RQH\HDUEHIRUHWKHJHQHUDOHOHFWLRQ
  7KH 6XSUHPH &RXUW KDV DFNQRZOHGJHG D VWDWHjV VWURQJ            7KLV UHVXOWV LQ DQ HDUOLHU ILOLQJ GHDGOLQH IRU FDQGLGDWHV RI
LQWHUHVWLQPDLQWDLQLQJWKHVWDELOLW\RILWVSROLWLFDOV\VWHP6HH     XQTXDOLILHGSROLWLFDOSDUWLHVWKDQIRULQGHSHQGHQWFDQGLGDWHV
(X86DW6WRUHU86DW$GGLWLRQDOO\            7KH GLVFUHSDQF\ LQ WKH WLPLQJ RI WKH ILOLQJ GHDGOLQHV
WKH&RXUWKDVKHOGWKDWWKHUHLVDQmLPSRUWDQWVWDWHLQWHUHVWLQ        KRZHYHUZDVQRWUDLVHGDVDQLVVXHRQDSSHDODQGLVWKHUHIRUH
UHTXLULQJVRPHSUHOLPLQDU\VKRZLQJRIDVLJQLILFDQWPRGLFXP             QRWEHIRUHXV6FKUDGHUREWDLQHGDFFHVVWRWKHEDOORWXQGHU
RI VXSSRUW EHIRUH SULQWLQJ WKH QDPH RI D SROLWLFDO              WKHLQGHSHQGHQWSHWLWLRQSURFHGXUHDQGKLVRQO\FKDOOHQJHLV
RUJDQL]DWLRQjV FDQGLGDWH RQ WKH EDOORW o WKH LQWHUHVW LI QR   WR WKH FRQVWLWXWLRQDOLW\ RI 2KLRjV EDOORWFXH V\VWHP XQGHU
RWKHULQDYRLGLQJFRQIXVLRQGHFHSWLRQDQGHYHQIUXVWUDWLRQ           
RIWKHGHPRFUDWLFSURFHVVDWWKHJHQHUDOHOHFWLRQlsHQQHVVY
)RUWVRQ  86    XSKROGLQJ *HRUJLDjV
     6FKUDGHUHWDOY%ODFNZHOO                    1R       1R                   6FKUDGHUHWDOY%ODFNZHOO       

% 3URFHGXUDO KLVWRU\ RI WKH /LEHUWDULDQ 3DUW\ RI                  DQG PHDQLQJIXOO\ DVVRFLDWH E\ SURYLGLQJ D µYRWLQJ FXHj WR
   2KLRjVFKDOOHQJHWRWKH2KLREDOORWVFKHPH                            'HPRFUDWLF DQG 5HSXEOLFDQ  FDQGLGDWHVl EXW QRW WR
                                                                         LQGHSHQGHQWFDQGLGDWHV,GDW)XUWKHUPRUHWKHFRXUW
  7KH/LEHUWDULDQ3DUW\RI2KLRZDVIRUPHGLQDQGLV                KHOGWKDWmWKHVWDWXWHYLRODWHVWKH(TXDO3URWHFWLRQ&ODXVHRI
WKH2KLRDIILOLDWHRIWKHQDWLRQDO/LEHUWDULDQ3DUW\IRXQGHGLQ         WKH)RXUWHHQWK$PHQGPHQWEHFDXVHLWSODFHVXQHTXDOEXUGHQV
&RORUDGRLQ,WREWDLQHGWKHVWDWXVRIDSROLWLFDOSDUW\DV        RQ,QGHSHQGHQWDQGWKLUGSDUW\FDQGLGDWHVDQGLVGHVLJQHGWR
GHILQHGXQGHU2KLR5HYLVHG&RGHLQDQGZDV               JLYH'HPRFUDWVDQG5HSXEOLFDQVDGHFLGHGDGYDQWDJHDWWKH
WKHUHIRUH HOLJLEOH IRU D YRWLQJ FXH RQ WKH JHQHUDOHOHFWLRQ      SROOV LQ D JHQHUDO HOHFWLRQl  ,G DW   ([SDQGLQJ RQ
EDOORWWKDW\HDUDVSHUPLWWHGE\2KLR5HYLVHG&RGH            5RVHQjV DQDO\VLV WKH GLVWULFW FRXUW GHWHUPLQHG WKDW WKH
7KH /LEHUWDULDQV IDLOHG WR SROO DW OHDVW ILYH SHUFHQW RI WKH   DVVRFLDWLRQDOLQWHUHVWVRI6FKUDGHUDQGWKH/LEHUWDULDQ3DUW\
YRWHUVLQWKHHOHFWLRQKRZHYHUWKXVORVLQJWKHLUVWDWXV           RI2KLRWRREWDLQDEDOORWFXHZHUHHYHQVWURQJHUWKDQWKRVH
DVDUHFRJQL]HGSROLWLFDOSDUW\1RWXQWLO1RYHPEHURI             RI LQGHSHQGHQW FDQGLGDWHV EHFDXVH 6FKUDGHU DFWXDOO\
oD\HDUDIWHUWKHHYHQWVLQTXHVWLRQoGLGWKH/LEHUWDULDQ3DUW\        UHSUHVHQWV D VSHFLILF LGHRORJ\ WKDW KH ZRXOG OLNH WR KDYH
RI 2KLR DJDLQ VXFFHHG LQ REWDLQLQJ HQRXJK VLJQDWXUHV WR          FRQYH\HGWKURXJKDYRWLQJFXHRQWKHEDOORW
TXDOLI\DVDSROLWLFDOSDUW\RQWKHJHQHUDOHOHFWLRQEDOORW
                                                                           7KH6XSUHPH&RXUWKDVDFNQRZOHGJHGWKDWm>W@RWKHH[WHQW
   2Q$SULOWKH/LEHUWDULDQ3DUW\RI2KLRKHOGLWV             WKDWSDUW\ODEHOVSURYLGHDVKRUWKDQGGHVLJQDWLRQRIWKHYLHZV
DQQXDOFRQYHQWLRQLQ$NURQ$PRQJRWKHULWHPVRIEXVLQHVV              RI SDUW\ FDQGLGDWHV RQ PDWWHUV RI SXEOLF FRQFHUQ WKH
LWQRPLQDWHG6FKUDGHUDVLWVFDQGLGDWHIRUWKH8QLWHG6WDWHV             LGHQWLILFDWLRQRIFDQGLGDWHVZLWKSDUWLFXODUSDUWLHVSOD\VDUROH
+RXVH RI 5HSUHVHQWDWLYHV IURP WKH 6HYHQWK &RQJUHVVLRQDO            LQ WKH SURFHVV E\ ZKLFK YRWHUV LQIRUP WKHPVHOYHV IRU WKH
'LVWULFW6FKUDGHUKDGEHHQFLUFXODWLQJSHWLWLRQVWRREWDLQWKH         H[HUFLVHRIWKHIUDQFKLVHl7DVKMLDQY5HSXEOLFDQ3DUW\
UHTXLVLWHVLJQDWXUHVWREHSODFHGRQWKHJHQHUDOHOHFWLRQEDOORW         86     ,Q GHFODULQJ 2KLR 5HYLVHG &RGH
SULRUWRWKHFRQYHQWLRQ%HFDXVHKHZDVDSSO\LQJWKURXJKWKH            XQFRQVWLWXWLRQDOLQ5RVHQWKLVFRXUWGHWHUPLQHG
LQGHSHQGHQWSHWLWLRQSURFHGXUH6FKUDGHUQHHGHGWRFROOHFWDW            WKDWm>R@QFHD6WDWHDGPLWVDSDUWLFXODUVXEMHFWWRWKHEDOORW
OHDVWYDOLGVLJQDWXUHVDQXPEHUHTXDOWRRQHSHUFHQWRI           DQGFRPPHQFHVWRPDQLSXODWHWKHFRQWHQWRUWROHJLVODWHZKDW
WKHYRWHUVZKRSDUWLFLSDWHGLQWKHODVWJXEHUQDWRULDOHOHFWLRQ           VKDOO DQG VKDOO QRW DSSHDU LW PXVW WDNH LQWR DFFRXQW WKH
LQWKH6HYHQWK&RQJUHVVLRQDO'LVWULFW6FKUDGHUXVHGRIILFLDO           )HGHUDODQG6WDWH&RQVWLWXWLRQVUHJDUGLQJIUHHGRPRIVSHHFK
QRPLQDWLQJSHWLWLRQIRUPVSUHSDUHGE\WKHVWDWHRI2KLRIRU              DQGDVVRFLDWLRQWRJHWKHUZLWKWKHSURYLVLRQVDVVXULQJHTXDO
XVHE\LQGHSHQGHQWFDQGLGDWHV'LUHFWO\DERYHWKHm6WDWHPHQW            SURWHFWLRQRIWKHODZVl)GDW
RI&DQGLGDF\lKHDGLQJRQHDFKQRPLQDWLQJSHWLWLRQKRZHYHU
6FKUDGHUW\SHGWKLVDGGLWLRQDOVWDWHPHQWmsDPHV$6FKUDGHU               1HYHUWKHOHVV WKH 6XSUHPH &RXUW KDV UHFRJQL]HG WKH
LVWKHQRPLQHHRIWKH/LEHUWDULDQ3DUW\l2Q$SULO            GLVWLQFWLRQEHWZHHQWKHUROHRILQGHSHQGHQWFDQGLGDWHVDQG
6FKUDGHUVXEPLWWHGSHWLWLRQVFRQWDLQLQJVLJQDWXUHVWR              WKDWRISROLWLFDOSDUWLHV
WKH&ODUN&RXQW\%RDUGRI(OHFWLRQV
                                                                           >7@KH SROLWLFDO SDUW\ DQG WKH LQGHSHQGHQW FDQGLGDWH
  %HFDXVH6FKUDGHUPHWWKHUHTXLUHPHQWVRIWKHLQGHSHQGHQW                DSSURDFKHVWRSROLWLFDODFWLYLW\DUHHQWLUHO\GLIIHUHQWDQG
SHWLWLRQSURFHGXUHWKH%RDUGRI(OHFWLRQVSODFHGKLPRQWKH               QHLWKHULVDVDWLVIDFWRU\VXEVWLWXWHIRUWKHRWKHU$QHZ
EDOORW DV DQ LQGHSHQGHQW FDQGLGDWH  2Q sXO\              SDUW\ RUJDQL]DWLRQ FRQWHPSODWHV D VWDWHZLGH RQJRLQJ
6FKUDGHUVHQWDOHWWHUWR%RE7DIWWKHQWKH2KLR6HFUHWDU\RI             RUJDQL]DWLRQZLWKGLVWLQFWLYHSROLWLFDOFKDUDFWHU,WVJRDO
6WDWH UHTXHVWLQJ WKDW 6FKUDGHU UHFHLYH WKH YRWLQJ FXH RI          LV W\SLFDOO\ WR JDLQ FRQWURO RI WKH PDFKLQHU\ RI VWDWH
    6FKUDGHUHWDOY%ODFNZHOO                  1R      1R                    6FKUDGHUHWDOY%ODFNZHOO          

SURWHFWHG E\ WKH )LUVW DQG )RXUWHHQWK $PHQGPHQWV  6HH        m/LEHUWDULDQlRQWKHJHQHUDOHOHFWLRQEDOORW6FKUDGHUGXO\
$QGHUVRQ  86 DW   1R RQH FKDOOHQJHV WKH EDVLF     QRWHG LQ KLV OHWWHU WKDW WKH VWDWH KDG IDLOHG WR DPHQG WKH
SULQFLSOH WKDW WKH 8QLWHG 6WDWHV &RQVWLWXWLRQ SURWHFWV WKH     UHOHYDQWSRUWLRQRI2KLR5HYLVHG&RGHGHVSLWHLWV
ULJKWVRIWKRVHLQYROYHGLQWKHSROLWLFDOSURFHVV$VVWDWHGE\      KDYLQJEHHQGHFODUHGXQFRQVWLWXWLRQDOE\5RVHQ6HFUHWDU\
WKH 6XSUHPH &RXUW LQ (X Y 6DQ )UDQFLVFR &RXQW\               7DIWGLGQRWUHVSRQGWR6FKUDGHUjVUHTXHVW6FKUDGHU:LOVRQ
'HPRFUDWLF&HQW&RPP86                          DQGWKH/LEHUWDULDQ3DUW\RI2KLRWKHQILOHGDFRPSODLQWRQ
                                                                      $XJXVWLQWKHGLVWULFWFRXUWUHTXHVWLQJLQMXQFWLYH
  ,W LV ZHOO VHWWOHG WKDW SDUWLVDQ SROLWLFDO RUJDQL]DWLRQV     DQGGHFODUDWRU\UHOLHI
  HQMR\IUHHGRPRIDVVRFLDWLRQSURWHFWHGE\WKH)LUVWDQG
  )RXUWHHQWK$PHQGPHQWV)UHHGRPRIDVVRFLDWLRQ                 $IWHU6FKUDGHUILOHGDQDPHQGHGFRPSODLQW ERWKSDUWLHV
  PHDQVQRWRQO\WKDWDQLQGLYLGXDOYRWHUKDVWKHULJKWWR            PRYHGIRUVXPPDU\MXGJPHQW2Q6HSWHPEHUWKH
  DVVRFLDWHZLWKWKHSROLWLFDOSDUW\RIKHUFKRLFHEXW         GLVWULFWFRXUWHQWHUHGDSUHOLPLQDU\LQMXQFWLRQGLUHFWLQJWKH
  DOVRWKDWDSROLWLFDOSDUW\KDVDULJKWWRLGHQWLI\WKHSHRSOH      6HFUHWDU\RI6WDWHWRSODFHWKHGHVLJQDWLRQm/LEHUWDULDQlDIWHU
  ZKR FRQVWLWXWH WKH DVVRFLDWLRQ    DQG WR VHOHFW D     6FKUDGHUjV QDPH RQ WKH EDOORW  6FKUDGHU UHFHLYHG 
  VWDQGDUGEHDUHUZKREHVWUHSUHVHQWVWKHSDUW\jVLGHRORJLHV          YRWHV RU  SHUFHQW RI WKH YRWHV FDVW LQ WKH UDFH IRU WKH
  DQGSUHIHUHQFHV                                                    6HYHQWK &RQJUHVVLRQDO 'LVWULFW ZLWK WKH YRWLQJ FXH RI
                                                                      m/LEHUWDULDQl DSSHDULQJ RQ WKH JHQHUDOHOHFWLRQ EDOORW LQ
,GDWFLWDWLRQVDQGLQWHUQDOTXRWDWLRQPDUNVRPLWWHG          1RYHPEHURI
6LPLODUO\WKH)LUVW$PHQGPHQWULJKWVRIYRWHUVDQGSROLWLFDO
SDUWLHVDUHSURWHFWHGIURPXQHTXDOUHJXODWRU\EXUGHQVXQGHU              )ROORZLQJWKHHOHFWLRQWKHGLVWULFWFRXUWDOORZHGWKHSDUWLHV
WKH(TXDO3URWHFWLRQ&ODXVHRIWKH)RXUWHHQWK$PHQGPHQW              WRILOHVXSSOHPHQWDOEULHIVDQGUHQHZHGPRWLRQVIRUVXPPDU\
6HH:LOOLDPVY5KRGHV86                      MXGJPHQW'HWHUPLQLQJWKDWWKHLVVXHZDVQRWPRRWEHFDXVH
                                                                      LWZDVmFDSDEOHRIUHSHWLWLRQ\HWHYDGLQJUHYLHZl5RVHQY
   ,QWKHSUHVHQWFDVHWKHGLVWULFWFRXUWUHOLHGRQWKLVFRXUWjV     %URZQ)GWK&LUWKHGLVWULFWFRXUW
GHFLVLRQLQ5RVHQY%URZQ)GWK&LUWR          HQWHUHG DQ RUGHU JUDQWLQJ 6FKUDGHUjV PRWLRQ IRU VXPPDU\
GHWHUPLQH WKDW 2KLR 5HYLVHG &RGH   YLRODWHG            MXGJPHQW DQG GHQ\LQJ 2KLRjV PRWLRQ  7KH GLVWULFW FRXUW
6FKUDGHUjV DQG WKH /LEHUWDULDQ 3DUW\ RI 2KLRjV )LUVW DQG      FRQFOXGHG WKDW 2KLRjV GHQLDO RI D SDUWLVDQ YRWLQJ FXH IRU
)RXUWHHQWK $PHQGPHQW ULJKWV  7KH FRXUW LQ 5RVHQ KHDUG        6FKUDGHU DQG IRU RWKHU FDQGLGDWHV OLNH 6FKUDGHU ZKR DUH
WHVWLPRQ\IURPWZRSROLWLFDOVFLHQWLVWVDQGDPDUNHWLQJDQG           PHPEHUVRIXQTXDOLILHGSROLWLFDOSDUWLHVLVDYLRODWLRQRIWKH
FRPPXQLFDWLRQV SURIHVVLRQDO WR WKH HIIHFW WKDW SDUW\            )LUVWDQG)RXUWHHQWK$PHQGPHQWV
LGHQWLILFDWLRQ DQG WKH LQGLFDWLRQ RI D FDQGLGDWHjV SDUW\
DIILOLDWLRQRQDEDOORWLQWKHIRUPRIDYRWLQJFXHSOD\DFUXFLDO       ,QWKLVDSSHDOWKH2KLR6HFUHWDU\RI6WDWHFRQWHQGVWKDWWKH
UROHLQDYRWHUjVDFWLRQVDWWKHmFOLPDFWLFPRPHQWRIFKRLFHl         GLVWULFWFRXUWHUUHGLQKROGLQJWKDWWKHUHHQDFWHGYHUVLRQRI
LQ DQ HOHFWLRQ  5RVHQ  )G DW   %HFDXVH        2KLR 5HYLVHG &RGH   LV XQFRQVWLWXWLRQDO  2KLR
  SURYLGHV FXHV RQO\ IRU FDQGLGDWHV RI TXDOLILHG      VSHFLILFDOO\DUJXHVWKDWWKH6L[WK&LUFXLWSUHFHGHQWRI5RVHQ
SROLWLFDO SDUWLHV LW GLG QRW DOORZ IRU WKH GHVLJQDWLRQ RI   GRHVQRWH[WHQGWRWKLVFDVHEHFDXVHWKHVWDWHjVLQWHUHVWVLQ
m,QGHSHQGHQWlDVDYRWLQJFXHIRUWKRVHZKRJDLQHGDFFHVVWR          UHJXODWLQJSROLWLFDOSDUW\FDQGLGDWHVLVLQKHUHQWO\JUHDWHUWKDQ
WKHEDOORWWKURXJKWKHLQGHSHQGHQWSHWLWLRQSURFHGXUH              LWV LQWHUHVWV LQ UHJXODWLQJ LQGHSHQGHQW FDQGLGDWHV
                                                                      )XUWKHUPRUH 2KLR PDLQWDLQV WKDW LWV OHJLWLPDWH LQWHUHVW LQ
  7KLV ODZ 5RVHQ FRQFOXGHG mLQIULQJHV XSRQ WKH ULJKW RI     UHJXODWLQJ HOHFWLRQV DQG FRQWUROOLQJ WKH UHFRJQLWLRQ RI
VXSSRUWHUV RI ,QGHSHQGHQW FDQGLGDWHV WR PHDQLQJIXOO\ YRWH
      6FKUDGHUHWDOY%ODFNZHOO                   1R      1R                   6FKUDGHUHWDOY%ODFNZHOO        

SROLWLFDO SDUWLHV RXWZHLJKV DQ\ HQFURDFKPHQW RQ WKH                86 DW   7KH 6XSUHPH &RXUW KDV VXEVHTXHQWO\
DVVRFLDWLRQDODQGHTXDOSURWHFWLRQULJKWVRI6FKUDGHUDQGWKH           UHFRJQL]HGKRZHYHUWKDWLIDVWDWHjVHOHFWLRQODZVXEMHFWVWKH
/LEHUWDULDQ3DUW\RI2KLR                                            )LUVWDQG)RXUWHHQWK$PHQGPHQWULJKWVRISDUWLFLSDQWVLQWKH
                                                                        SROLWLFDOSURFHVVWRmµVHYHUHjUHVWULFWLRQVWKHUHJXODWLRQPXVW
                          ,,$1$/<6,6                                  EHµQDUURZO\GUDZQWRDGYDQFHDVWDWHLQWHUHVWRIFRPSHOOLQJ
                                                                        LPSRUWDQFHjl%XUGLFNY7DNXVKL86
$ )UDPHZRUNIRUHOHFWLRQODZDQDO\VLV                                  KROGLQJWKDW+DZDLLjVSURKLELWLRQRIZULWHLQYRWLQJZDVQRW
                                                                        D VHYHUH UHVWULFWLRQ WKDW LQIULQJHG XSRQ LWV FLWL]HQVj ULJKWV
  :HUHYLHZGHQRYRWKHGLVWULFWFRXUWjVJUDQWRIVXPPDU\               XQGHU WKH )LUVW DQG )RXUWHHQWK $PHQGPHQWV FLWDWLRQ
MXGJPHQW6HHHJ+ROORZD\Y%UXVK)G              RPLWWHG  $V WKH GLVWULFW FRXUW IRXQG DQG WKH IROORZLQJ
WK&LU6XPPDU\MXGJPHQWLVSURSHUZKHQWKHUHDUH             DQDO\VLVZLOO VKRZWKHEXUGHQSODFHGRQ6FKUDGHUDQGWKH
QRJHQXLQHLVVXHVRIPDWHULDOIDFWLQGLVSXWHDQGWKHPRYLQJ            /LEHUWDULDQ3DUW\RI2KLRZDVQRWVRVHYHUHDVWRWULJJHUWKH
SDUW\LVHQWLWOHGWRMXGJPHQWDVDPDWWHURIODZ)HG5&LY         VWULFWVFUXWLQ\ UHYLHZ DV RXWOLQHG LQ %XUGLFN  :H ZLOO
3 F,QGHFLGLQJDPRWLRQIRUVXPPDU\MXGJPHQWWKH               WKHUHIRUHIRFXVRQWKHDSSOLFDWLRQRIWKH$QGHUVRQEDODQFLQJ
FRXUW PXVW YLHZ WKH HYLGHQFH DQG GUDZ DOO UHDVRQDEOH            WHVWWR6FKUDGHUjVFKDOOHQJHWR2KLR5HYLVHG&RGH
LQIHUHQFHVLQIDYRURIWKHQRQPRYLQJSDUW\6HH0DWVXVKLWD
(OHF,QGXV&RY=HQLWK5DGLR&RUS86               % 7KHGLVWULFWFRXUWIDLOHGWRJLYHVXIILFLHQWZHLJKW
  7KH MXGJH LV QRW WR mZHLJK WKH HYLGHQFH DQG             WRWKHVWDWHjVLQWHUHVWLQUHJXODWLQJHOHFWLRQVZKHQ
GHWHUPLQHWKHWUXWKRIWKHPDWWHUEXWWRGHWHUPLQHZKHWKHU                 DSSO\LQJWKH3/07843EDODQFLQJWHVW
WKHUHLVDJHQXLQHLVVXHIRUWULDOl$QGHUVRQY/LEHUW\/REE\
,QF  86     $ JHQXLQH LVVXH IRU WULDO     ,Q DSSO\LQJ WKH $QGHUVRQ EDODQFLQJ WHVW WR 6FKUDGHUjV
H[LVWVRQO\ZKHQWKHUHLVVXIILFLHQWmHYLGHQFHRQZKLFKWKH             FODLP WKH GLVWULFW FRXUW FRQFOXGHG WKDW WKH LQWHUHVWV SXW
MXU\FRXOGUHDVRQDEO\ILQGIRUWKHSODLQWLIIl,GDW              IRUZDUGE\2KLRZHUHQRWVRFRPSHOOLQJDVWRRYHUULGHWKH
                                                                        )LUVWDQG)RXUWHHQWK$PHQGPHQWULJKWVRI6FKUDGHUDQGRWKHU
  ,Q GHWHUPLQLQJ WKH FRQVWLWXWLRQDOLW\ RI HOHFWLRQ ODZV WKH     VLPLODUO\VLWXDWHGFDQGLGDWHVRIXQTXDOLILHGSROLWLFDOSDUWLHV
EDODQFLQJWHVWVHWIRUWKLQ$QGHUVRQY&HOHEUH]]H86            7KH GLVWULFW FRXUW WKHUHIRUH GHFODUHG 2KLR 5HYLVHG &RGH
  PXVW EH DSSOLHG  $QGHUVRQ GLUHFWV FRXUWV WR       XQFRQVWLWXWLRQDO&KDOOHQJLQJWKLVGHFLVLRQ2KLR
SURFHHGDVIROORZV                                                     FRQWHQGV WKDW WKH GLVWULFW FRXUW PLVWDNHQO\ UHOLHG RQ WKLV
                                                                        FRXUWjVGHFLVLRQLQ5RVHQLQDVVHVVLQJWKHH[WHQWWRZKLFKWKH
    >$FRXUW@PXVWILUVWFRQVLGHUWKHFKDUDFWHUDQGPDJQLWXGH           2KLR HOHFWLRQ ODZV GHSULYHG 6FKUDGHU DQG WKH /LEHUWDULDQ
    RIWKHDVVHUWHGLQMXU\WRWKHULJKWVSURWHFWHGE\WKH)LUVW         3DUW\RI2KLRRIWKHLU)LUVWDQG)RXUWHHQWK$PHQGPHQWULJKWV
    DQG)RXUWHHQWK$PHQGPHQWVWKDWWKHSODLQWLIIVHHNVWR               )XUWKHUPRUH 2KLR DUJXHV WKDW WKH GLVWULFW FRXUW JDYH
    YLQGLFDWH,WWKHQPXVWLGHQWLI\DQGHYDOXDWHWKHSUHFLVH          LQVXIILFLHQW ZHLJKW WR WKH VWDWHjV LQWHUHVW LQ UHJXODWLQJ
    LQWHUHVWVSXWIRUZDUGE\WKH6WDWHDVMXVWLILFDWLRQVIRUWKH        HOHFWLRQVZKHQHYDOXDWLQJWKHEDODQFHRILQWHUHVWVXQGHUWKH
    EXUGHQ LPSRVHG E\ LWV UXOH  ,Q SDVVLQJ MXGJPHQW WKH      $QGHUVRQ WHVW  7KH IROORZLQJ DQDO\VLV RI WKH FRPSHWLQJ
    &RXUW PXVW QRW RQO\ GHWHUPLQH WKH OHJLWLPDF\ DQG             EXUGHQVDQGLQWHUHVWVXQGHUWKH$QGHUVRQEDODQFLQJWHVWZLOO
    VWUHQJWKRIHDFKRIWKRVHLQWHUHVWVLWDOVRPXVWFRQVLGHU          DVVHVVWKHVHFODLPV
    WKHH[WHQWWRZKLFKWKRVHLQWHUHVWVPDNHLWQHFHVVDU\WR
    EXUGHQ WKH SODLQWLIIjV ULJKWV  2QO\ DIWHU ZHLJKLQJ DOO       7KHILUVWVWHSRIWKH$QGHUVRQWHVWUHTXLUHVXVWRH[DPLQH
    WKHVHIDFWRUVLVWKHUHYLHZLQJFRXUWLQDSRVLWLRQWRGHFLGH        WKHFKDUDFWHUDQGPDJQLWXGHRIWKHDVVHUWHGLQMXU\WRWKHULJKWV
    ZKHWKHUWKHFKDOOHQJHGSURYLVLRQLVXQFRQVWLWXWLRQDO