Court Opinion

ID: 2970145
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:05:44.344516+00
Date Added: 2024-06-11T11:43:28.241787
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

s26(3+ 0 32329,&+               ;
            3ODLQWLII$SSHOOHH 
              &URVV$SSHOODQW 
                                     1RV
                                   
           Y                       !
                                   
                                   
&8<$+2*$ &2817< &2857              
2) &20021 3/($6'RPHVWLF 
5HODWLRQV'LYLVLRQ                
         'HIHQGDQW$SSHOODQW 
                                   
               &URVV$SSHOOHH 
                                   
&8<$+2*$ &2817<                   
          'HIHQGDQW$SSHOOHH 
                                 1
      $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
       IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW$NURQ
   1RnsDPHV6*DOODV0DJLVWUDWHsXGJH
                 $UJXHGsXQH
         'HFLGHGDQG)LOHGsDQXDU\
  %HIRUH0$57,1&KLHIsXGJH0(55,775<$1
    %2**61255,668+5+(,15,&+6,/(5
%$7&+(/'(5'$8*+75(<0225(&2/(&/$<
            DQG*,/0$1&LUFXLWsXGJHV

                           
    3RSRYLFKY&X\DKRJD                 1RV      1RV                 3RSRYLFKY&X\DKRJD        
     &RXQW\&RXUWHWDO                                                                            &RXQW\&RXUWHWDO

                    BBBBBBBBBBBBBBBBB                            GHWHUPLQDWLYH  7KDW DFWLRQ VLPSO\ VHW WKH VWDJH IRU WKH
                                                                 KHDULQJRQWKHPHULWVWKDWWRRNSODFHVL[PRQWKVODWHU
                        &2816(/
                                                                    sXGJH0HUULWWZDVQRORQJHUDQDFWLYHMXGJHZKHQWKHFDVH
$5*8('  %UXFH % (OIYLQ (/)9,1 	 %(66(5                ZDV KHDUG HQ EDQF LH RUDOO\ DUJXHG GLVFXVVHG LQ
&OHYHODQG 2KLR IRU $SSHOODQWV  5LFKDUG & +DEHU       FRQIHUHQFHDQGWHQWDWLYHO\GHFLGHGRQsXQH+HZDV
5(0,1*(5	5(0,1*(5&2/3$&OHYHODQG2KLRIRU               WKHUHIRUHLQHOLJLEOHWRVLWDVDPHPEHURIWKHHQEDQFFRXUW
$SSHOOHH  21 %5,()  %UXFH % (OIYLQ %DUEDUD .D\H     SXUVXDQWWRWKHH[SUHVVWHUPVRI86&FGHVSLWH
%HVVHU$P\6*OHVLXVIRU$SSHOODQWV5LFKDUG&+DEHU       ODQJXDJHWRWKHFRQWUDU\LQWKLVFRXUWjVWKHQH[LVWLQJ,23
%ULDQ'6XOOLYDQ5(0,1*(5	5(0,1*(5&2/3$                 D([SUHVVHGDQRWKHUZD\RXUIRUPHU,23DZDV
&OHYHODQG2KLRIRU$SSHOOHH6HWK0*DODQWHU81,7('         YRLG EHFDXVH LW GLUHFWO\ FRQIOLFWHG ZLWK WKH FRQWUROOLQJ
67$7(6'(3$570(172)s867,&(:DVKLQJWRQ'&                  VWDWXWRU\ODQJXDJHRIF0HPSKLV3ODQQHG3DUHQWKRRG
IRU,QWHUYHQRU0LFKDHO.LUNPDQ6N\3HWWH\2+,2/(*$/         ,QF)GDW,QFRQWUDVWERWKsXGJH1RUULVZKR
5,*+76 6(59,&( &ROXPEXV 2KLR 6WHSKHQ 3 &DUQH\         WRRNVHQLRUVWDWXVRQsXO\DQGsXGJH6XKUKHLQULFK
2)),&( 2) 7+( $77251(< *(1(5$/ 2) 2+,2                    ZKRWRRNVHQLRUVWDWXVRQ$XJXVWDUHDXWKRUL]HGE\
&ROXPEXV2KLR5LFKDUG1&RJOLDQHVH2)),&(2)7+(             WKHODQJXDJHRIFWRFRQWLQXHSDUWLFLSDWLQJLQWKLVFDVH
$77251(<*(1(5$/(03/2<0(17/$:6(&7,21                        EHFDXVHWKH\ZHUHERWKDFWLYHMXGJHVZKHQWKHPDWWHUZDV
&ROXPEXV 2KLR 0DU\ 0 &ROOLHU $66,67$17                  KHDUGRQsXQH
$77251(<*(1(5$/1DVKYLOOH7HQQHVVHH0LFKDHO(
0RRUH7(11(66(($77251(<*(1(5$/j62)),&(                         ,UHDFKWKLVFRQFOXVLRQZLWKJUHDWUHOXFWDQFHERWKEHFDXVH
1DVKYLOOH7HQQHVVHHIRU$PLFL&XULDH                        ,UHFRJQL]HWKDWWKHYDOLGLW\RIRXUIRUPHU,23DKDVQRW
                                                                 EHHQSUHYLRXVO\TXHVWLRQHGLQWKLVFDVHDQGEHFDXVH,DJUHH
   0(55,77sGHOLYHUHGWKHRSLQLRQRIWKHFRXUWLQZKLFK     ZLWKWKHUHVXOWUHDFKHGLQsXGJH0HUULWWjVRSLQLRQ1RUGR,
VHYHQRIWKHWKLUWHHQMXGJHVRIWKHHQEDQFFRXUWMRLQHGLQ      ZLVKWRLPSXJQLQDQ\ZD\sXGJH0HUULWWjVLQWHJULW\RUKLV
6HFWLRQV,,DQG,,,DQGLQWKHMXGJPHQWRIWKHFRXUWUHYHUVLQJ   JRRGIDLWKEHOLHIWKDWKHLVHQWLWOHGWRVLWDVDPHPEHURIWKH
WKHMXGJPHQWRIWKHGLVWULFWFRXUWDQGUHPDQGLQJIRUDQHZ       HQEDQFFRXUW%DVHGXSRQP\DQDO\VLVRIFKRZHYHU
WULDOQDPHO\0$57,1&s0(55,77'$8*+75(<                ,IHHOWKDW,KDYHQRFKRLFHEXWWRYRLFHP\GLVDJUHHPHQWZLWK
0225(&2/(&/$<DQG*,/0$16L[MXGJHV5<$1                WKHFRPSRVLWLRQRIWKHHQEDQFFRXUWLQWKLVFDVH
%2**6 1255,6 68+5+(,15,&+ 6,/(5 DQG
%$7&+(/'(5ZRXOGUHYHUVHWKHMXGJPHQWRIWKHGLVWULFW
FRXUW DQG GLVPLVV WKH FDVH  0$57,1 & s 0(55,77
5<$1%2**61255,668+5+(,15,&+6,/(5DQG
%$7&+(/'(5ssFRQFXULQ6HFWLRQ,RIsXGJH0HUULWWjV
RSLQLRQIRUWKHFRXUW0225(sSSGHOLYHUHGD
VHSDUDWHFRQFXUULQJRSLQLRQLQZKLFK'$8*+75(<&2/(
&/$<DQG*,/0$1ssMRLQHG5<$1s SS 
GHOLYHUHGDVHSDUDWHRSLQLRQFRQFXUULQJLQSDUWDQGGLVVHQWLQJ
LQ SDUW LQ ZKLFK %2**6 1255,6 68+5+(,15,&+
6,/(5DQG%$7&+(/'(5ssMRLQHG*,/0$1sSS
    3RSRYLFKY&X\DKRJD                    1RV        1RV                            3RSRYLFKY&X\DKRJD                 
      &RXQW\&RXUWHWDO                                                                                            &RXQW\&RXUWHWDO

   ,QFZDVDPHQGHGWRDOORZDVHQLRUMXGJHmWR             GHOLYHUHG D VHSDUDWH RSLQLRQ FRQFXUULQJ LQ WKH
FRQWLQXHWRSDUWLFLSDWHLQWKHGHFLVLRQRIDFDVHRUFRQWURYHUV\       MXGJPHQWDQGGLVVHQWLQJIURPWKHFRPSRVLWLRQRIWKHHQEDQF
WKDWZDVKHDUGRUUHKHDUGE\WKHFRXUWLQEDQFDWDWLPHZKHQ          FRXUW
VXFKMXGJHZDVLQUHJXODUDFWLYHVHUYLFHl86&F
3XE/1R7KHOHJLVODWLYHKLVWRU\UHIOHFWVWKDW                                 BBBBBBBBBBBBBBBBB
WKHDPHQGPHQWWR86&FZDVSURSRVHGLQ
RUGHUWRUHVROYHWKHDPELJXLW\RIZKHWKHUDMXGJHRQDFWLYH                                          23,1,21
VWDWXVZKHQDQHQEDQFFDVHLVRUDOO\DUJXHGFDQFRQWLQXHWR                                     BBBBBBBBBBBBBBBBB
SDUWLFLSDWHLIKHRUVKHWDNHVVHQLRUVWDWXVEHIRUHWKHRSLQLRQ
LV LVVXHG  6HQDWRU 6LPRQ RI ,OOLQRLV VWDWHG WKH LVVXH DV      0(55,77&LUFXLWsXGJH7KHVWDWHVRYHUHLJQLPPXQLW\
IROORZVm7KHELOO,LQWURGXFHWRGD\ZRXOGVLPSO\FODULI\WKDW         SURYLVLRQ RI WKH (OHYHQWK $PHQGPHQW UDWLILHG LQ  WR
FLUFXLWMXGJHVZKRKHDUDQHQEDQFFDVHDVDFWLYHMXGJHVPD\           RYHUUXOH&KLVKROPY*HRUJLD86'DOO
SDUWLFLSDWHLQWKHXOWLPDWHGHFLVLRQRIWKHFDVHHYHQLIWKH\          SURKLELWV&RQJUHVVIURPGLUHFWLQJWKHIHGHUDOFRXUWVWRKHDU
WDNHVHQLRUVWDWXVEHWZHHQWKHWLPHWKHFDVHLVDUJXHGDQGWKH         VXLWVE\FLWL]HQVDJDLQVWDVWDWHRULWVH[HFXWLYHOHJLVODWLYHRU
WLPHLWLVGHFLGHGl&RQJ5HF6GDLO\HG)HE          MXGLFLDO GHSDUWPHQWV  2Q WKH RWKHU KDQG WKH )RXUWHHQWK
  6LPLODUO\ 5HSUHVHQWDWLYH 0RRUHKHDG RI &DOLIRUQLD        $PHQGPHQW LQ 6HFWLRQ  UDWLILHG  \HDUV ODWHU SDUWLDOO\
PDGHWKHIROORZLQJREVHUYDWLRQ                                        DEURJDWHVWKLVVWDWHLPPXQLW\IURPVXLWLQIHGHUDOFRXUWVE\
                                                                       JLYLQJ &RQJUHVV WKH mSRZHU WR HQIRUFH >6HFWLRQ  RI WKH
  >6HFWLRQF@KDVEHHQLQWHUSUHWHGWRUHTXLUHDFLUFXLW            $PHQGPHQW@ E\ DSSURSULDWH OHJLVODWLRQl LQFOXGLQJ WKH
  MXGJHLQUHJXODUDFWLYHVHUYLFHZKRKDVKHDUGDUJXPHQW               FUHDWLRQRIIHGHUDOFDXVHVRIDFWLRQDJDLQVWVWDWHVLQIHGHUDO
  LQ DQ HQ EDQF FDVH WR FDVH >VLF FOHDUO\ D PLVW\SH RI     FRXUW  +RZ H[DFWO\ WR UHFRQFLOH WKHVH WZR FRQIOLFWLQJ
  mFHDVHl@ SDUWLFLSDWLQJ LQ WKDW FDVH XSRQ WDNLQJ VHQLRU
  VWDWXV  7KLV SUREOHP OHDGV WR XQFHUWDLQW\ LQ GHFLGLQJ
  ZKRZLOOEHHOLJLEOHWRYRWHRQWKHILQDOGLVSRVLWLRQRIDQ              
                                                                             7KH (OHYHQWK $PHQGPHQW SURYLGHV DV IROORZV
  DSSHDO DQG PD\ FUHDWH WKH SHUFHSWLRQ WKDW D MXGJH LV
  GHOD\LQJUHOHDVHRIDQHQEDQFRSLQLRQXQWLODPHPEHURI                      7KH   sXGLFLDO   SRZHU   RI   WKH   8QLWHG   6WDWHV   VKDOO   QRW   EH

  WKHHQEDQFFRXUWWDNHVVHQLRUVWDWXV                                   FRQVWUXHG WR H[WHQG WR DQ\ VXLW LQ ODZ RU HTXLW\ FRPPHQFHG RU
                                                                           SURVHFXWHG DJDLQVW RQH RI WKH 8QLWHG 6WDWHV E\ &LWL]HQV RI

&RQJ5HF+GDLO\HGsXO\                            DQRWKHU 6WDWH RU E\   &LWL]HQV RU 6XEMHFWV RI DQ\ )RUHLJQ 6WDWH

                                                                       6HPLQROH 7ULEH RI )ORULGD Y )ORULGD          86    JLYHV D
  7XUQLQJQRZWRWKHPDWWHUDWKDQG,EHOLHYHLWTXLWHFOHDU          EULHI KLVWRU\ RI LWV LQWHUSUHWDWLRQ
WKDWWKLVFDVHZDVmKHDUGlRQsXQH7KLVZDVWKHGDWH
RI RUDO DUJXPHQW WKH GDWH ZKHQ WKH MXGJHV RI WKH HQ EDQF       
                                                                             7KH SHUWLQHQW SURYLVLRQV RI WKH )RXUWHHQWK $PHQGPHQW DUH DV
FRXUWUHWLUHGWRGLVFXVVWKHPHULWVIROORZLQJRUDODUJXPHQW           IROORZV
DQGWKHGDWHZKHQZHWHQWDWLYHO\YRWHGRQWKHRXWFRPHRIWKH
FDVH,QFRQWUDVWWKHUHTXHVWIRUDSROORIWKHDFWLYHMXGJHVLQ         6HFWLRQ  $OO SHUVRQV ERUQ RU QDWXUDOL]HG LQ WKH 8QLWHG 6WDWHV
                                                                           DQG VXEMHFW WR WKH MXULVGLFWLRQ WKHUHRI DUH FLWL]HQV RI WKH 8QLWHG
'HFHPEHU RI  WR YDFDWH WKH UXOLQJ RI WKH WKUHHMXGJH          6WDWHV DQG RI WKH 6WDWH ZKHUHLQ WKH\ UHVLGH 1R 6WDWH VKDOO PDNH
SDQHO DQG FRQVLGHU WKH FDVH HQ EDQF ZDV QRW RXWFRPH              RU HQIRUFH DQ\ ODZ ZKLFK VKDOO DEULGJH WKH SULYLOHJHV RU
                                                                           LPPXQLWLHV RI FLWL]HQV RI WKH 8QLWHG 6WDWHV QRU VKDOO DQ\ 6WDWH
                                                                           GHSULYH DQ\ SHUVRQ RI OLIH OLEHUW\ RU SURSHUW\ ZLWKRXW GXH
         3RSRYLFKY&X\DKRJD                        1RV        1RV                   3RSRYLFKY&X\DKRJD          
          &RXQW\&RXUWHWDO                                                                                       &RXQW\&RXUWHWDO

SURYLVLRQVKDVLQUHFHQW\HDUVGLYLGHGFRQVWLWXWLRQDOVFKRODUV                SROOZDVUHTXHVWHGEXWZKRWRRNVHQLRUVWDWXVEHIRUHWKHFDVH
WKHIHGHUDOFRXUWVDQGWKH6XSUHPH&RXUW7KLVDSSHDOWRWKH                ZDVRUDOO\DUJXHG
HQ EDQF FRXUW DVNV XV WR H[DPLQH IXUWKHU WKH UHODWLRQVKLS
EHWZHHQ WKHVH WZR FRQVWLWXWLRQDO DPHQGPHQWV  7KH FDVH                    7KHLVVXHDV,VHHLWLVQRWZKHWKHURXU,23FRQWUROVRYHU
DULVHVXQGHU7LWOH,,RIWKH$PHULFDQVZLWK'LVDELOLWLHV$FWRI                F,GRQRWEHOLHYHWKDWDQ\RQHVHULRXVO\FRQWHVWVWKH
86&ZKLFKSURYLGHVWKDWmQRTXDOLILHG                     SULQFLSOHWKDWDQDFWRI&RQJUHVVSUHYDLOVRYHUDQLQFRQVLVWHQW
LQGLYLGXDOZLWKDGLVDELOLW\VKDOOE\UHDVRQRIVXFKGLVDELOLW\              LQWHUQDOUXOHRIFRXUW0HPSKLV3ODQQHG3DUHQWKRRG,QFY
EHH[FOXGHGIURPSDUWLFLSDWLRQLQRUEHGHQLHGWKHEHQHILWVRI                 6XQGTXLVW)GWK&LUm:KHQDUXOH
WKHVHUYLFHVSURJUDPVRUDFWLYLWLHVRIDSXEOLFHQWLW\RUEH                RIFRXUWFRQIOLFWVZLWKDOHJLVODWLYHDFWWKHJHQHUDOUXOHLVWKDW
VXEMHFWHG WR GLVFULPLQDWLRQ E\ DQ\ VXFK HQWLW\l HPSKDVLV               WKHDFWFRQWUROVl5DWKHUWKHRQO\TXHVWLRQLVZKHWKHURQH
DGGHG  7KH VWDWXWH GRHV QRW GHILQH mH[FOXGHG IURP                    FDQSRVVLEO\UHFRQFLOHWKLVFRXUWjV,23ZLWKWKHVWDWXWHE\
SDUWLFLSDWLRQlRUmGLVFULPLQDWLRQl                                            DUJXLQJWKDWDQHQEDQFFDVHLVmKHDUGRUUHKHDUGlZKHQWKH
                                                                               SROOLVUHTXHVWHGUDWKHUWKDQZKHQWKHFDVHLVRUDOO\DUJXHG
  +HUH D KHDULQJLPSDLUHG SHUVRQ EURXJKW DQ DFWLRQ LQ
IHGHUDOFRXUWXQGHU7LWOH,,DJDLQVWDVWDWHFRXUWIRUDOOHJHGO\                  )RU WKH SXUSRVH RI WKLV GHFLVLRQ WKHUH LV QR UHOHYDQW
IDLOLQJWRSURYLGHKLPZLWKDGHTXDWHKHDULQJDVVLVWDQFHLQKLV                 GLVWLQFWLRQEHWZHHQDFDVHEHLQJKHDUGHQEDQFDVRSSRVHGWR
FKLOGFXVWRG\FDVH+HREWDLQHGDMXU\YHUGLFWLQWKHGLVWULFW                EHLQJUHKHDUGHQEDQF$FDVHLVKHDUGHQEDQFLQWKHUDUH
FRXUW EHORZ DJDLQVW WKH VWDWH FRXUW IRU  LQ                    VLWXDWLRQZKHQWKHZKROHFRXUWGHFLGHVWRWDNHXSDQDSSHDO
FRPSHQVDWRU\ GDPDJHV EDVHG RQ DQ HTXDO SURWHFWLRQW\SH                   GLUHFWO\ ZLWKRXW WKH PDWWHU ILUVW EHLQJ GHFLGHG E\ D WKUHH
FODLP RI GLVFULPLQDWLRQ D GXH SURFHVVW\SH FODLP RI                    MXGJH SDQHO  ,Q FRQWUDVW D FDVH LV UHKHDUG HQ EDQF LQ
XQUHDVRQDEOH H[FOXVLRQ IURP SDUWLFLSDWLRQ LQ WKH FXVWRG\                 VLWXDWLRQV ZKHUH WKH FRXUW JUDQWV D SDUW\jV SHWLWLRQ IRU
SURFHHGLQJ DQG D FODLP RI UHWDOLDWLRQ IRU ILOLQJ DQ                   UHKHDULQJ E\ WKH HQWLUH FRXUW DIWHU D WKUHHMXGJH SDQHO KDV
DGPLQLVWUDWLYH FRPSODLQW IRU IDLOLQJ WR DFFRPPRGDWH KLV                  UXOHGDGYHUVHO\WRWKDW SDUW\7KLVFDVHLQYROYHVWKHPRUH
GLVDELOLW\7KHVWDWHKDVDVVHUWHGLWLVLPPXQHIURPWKLVVXLW                W\SLFDOUHKHDULQJDIWHUDGHFLVLRQE\DWKUHHMXGJHSDQHO)RU
XQGHUWKH(OHYHQWK$PHQGPHQW7KHTXHVWLRQVEHIRUHXVDUH                     WKH VDNH RI VLPSOLFLW\ DQG FODULW\ KRZHYHU , ZLOO FRQILQH
ZKHWKHU&RQJUHVVLQ7LWOH,,RIWKH'LVDELOLWLHV$FWKDVYDOLGO\               IXUWKHUGLVFXVVLRQWRWKHLVVXHRIGHWHUPLQLQJZKHQDFDVHLV
                                                                               KHDUGHQEDQF7KHVDPHFRQFOXVLRQQHFHVVDULO\IROORZVIRU
                                                                               DFDVHUHKHDUGHQEDQF
      SURFHVV RI ODZ QRU GHQ\ WR DQ\ SHUVRQ ZLWKLQ LWV MXULVGLFWLRQ WKH
      HTXDO SURWHFWLRQ RI WKH ODZV
                                                                                 7XUQLQJ QRZ WR WKLV NH\ LVVXH , ILQG QR VXSSRUW IRU WKH
                                                                               SURSRVLWLRQ WKDW D FDVH LV KHDUG HQ EDQF ZKHQ D SROO LV
                                                                           UHTXHVWHGWRGHWHUPLQHZKHWKHUWKHFDVHVKRXOGEHFRQVLGHUHG
                                                                               E\WKHFRXUWDVDZKROH3ROOLQJLVDSURFHGXUDOPDWWHUQRWD
      6HFWLRQ  7KH &RQJUHVV VKDOO KDYH SRZHU WR HQIRUFH E\
      DSSURSULDWH OHJLVODWLRQ WKH SURYLVLRQV RI WKLV DUWLFOH
                                                                               GHFLVLRQ RQ WKH PHULWV RI WKH FDVH  1RU GRHV VXFK D
                                                                               SURSRVLWLRQFRPSRUWZLWKWKHFRPPRQXQGHUVWDQGLQJRIZKDW
                                                                              EHLQJmKHDUGlPHDQV%ODFNjV/DZ'LFWLRQDU\WKHG
     /DXUHQFH + 7ULEH     $PHULFDQ &RQVWLWXWLRQDO /DZ   G HG         GHILQLQJDmKHDULQJlDVm>D@MXGLFLDOVHVVLRQXVX>DOO\@
 (YDQ + &DPLQNHU     6\PSRVLXP 6KLIWLQJ 7KH %DODQFH RI 3RZHU"
7KH    6XSUHPH   &RXUW   )HGHUDOLVP   DQG   6WDWH   6RYHUHLJQ   ,PPXQLW\    RSHQWRWKHSXEOLFKHOGIRUWKHSXUSRVHRIGHFLGLQJLVVXHVRI
m$SSURSULDWHl 0HDQV(QGV &RQVWUDLQWV RQ 6HFWLRQ  3RZHUV            6WDQ   IDFWRURIODZVRPHWLPHVZLWKZLWQHVVHVWHVWLI\LQJl
/ 5HY  
    3RSRYLFKY&X\DKRJD                   1RV        1RV                  3RSRYLFKY&X\DKRJD           
      &RXQW\&RXUWHWDO                                                                                 &RXQW\&RXUWHWDO

  EDQF DW D WLPH ZKHQ VXFK MXGJH ZDV LQ UHJXODU DFWLYH      DEURJDWHGWKHVWDWHFRXUWjV(OHYHQWK$PHQGPHQWLPPXQLW\
  VHUYLFH                                                            IURPVXLWDQGLIVR ZKHWKHUWKHSODLQWLIIKDVDYDOLGFDVH
                                                                      XQGHU WKH $FW  :H FRQFOXGH WKDW WKH SODLQWLIIjV DFWLRQ LV
7KLVFRXUWjVIRUPHU,23DLQFRQWUDVWUHDGDVIROORZV       EDUUHG E\ WKH (OHYHQWK $PHQGPHQW LQ VR IDU DV WKH DFWLRQ
                                                                      UHOLHVRQFRQJUHVVLRQDOHQIRUFHPHQWRIWKH(TXDO3URWHFWLRQ
  7KHHQEDQF&RXUWLVFRPSRVHGRIDOOMXGJHVLQUHJXODU              &ODXVH EXW LW LV QRW EDUUHG LQ VR IDU DV LW UHOLHV RQ
  DFWLYHVHUYLFHDWWKHWLPHRIDUHKHDULQJDQ\VHQLRUMXGJH         FRQJUHVVLRQDOHQIRUFHPHQWRIWKH'XH3URFHVV&ODXVH$V
  RIWKH&RXUWZKRVDWRQWKHRULJLQDOSDQHODQGDQ\MXGJH           DSSOLHG WR WKH SODLQWLIIjV FDXVH RI DFWLRQ 7LWOH ,, LV
  ZKRZDVLQUHJXODUDFWLYHVHUYLFHDWWKHWLPHDSROOZDV            mDSSURSULDWHOHJLVODWLRQlXQGHUVHFWLRQDQGWKH'XH3URFHVV
  UHTXHVWHGRQWKHSHWLWLRQIRUUHKHDULQJHQEDQF            &ODXVHRIVHFWLRQRIWKH)RXUWHHQWK$PHQGPHQW:HDOVR
                                                                      FRQFOXGHWKDWRQWKHIDFWVWKHYHUGLFWEHORZPXVW
(PSKDVLVDGGHG                                                     EHVHWDVLGHDQGWKHFDVHUHPDQGHGIRUDQHZWULDOXQGHUWKH
                                                                      'LVDELOLWLHV$FW
   ,QFRPSDULQJFZLWKWKLVFRXUWjVWKHQH[LVWLQJ,23
DRQHFDQLPPHGLDWHO\VSRWWKHGLVFUHSDQF\WKH,23                ,(QIRUFHPHQWRI7KH(TXDO3URWHFWLRQ&ODXVH
DOORZHGDVHQLRUVWDWXVMXGJHWRVLWRQDQHQEDQFFDVHLIWKH
MXGJHZDVDFWLYHZKHQWKHUHTXHVWIRUDQHQEDQFSROOZDV                7KHRULJLQDOWKUHHMXGJHSDQHOLQWKLVFDVHDJUHHGZLWKWKH
PDGHEXWWKHVWDWXWHUHTXLUHVDMXGJHWRVWLOOEHDFWLYHDWWKH      VWDWHjVHTXDOSURWHFWLRQDUJXPHQWWKDWLWZDVLPPXQHIURP
WLPH WKH FDVH LV KHDUG RU UHKHDUG HQ EDQF  $OWKRXJK QRW   SODLQWLIIjVVXLWXQGHUWKH(OHYHQWK$PHQGPHQWDQGWKH&RXUW
FRQWUROOLQJ LQ WKH SUHVHQW FDVH WKLV GLVFUHSDQF\ KDV EHHQ    GLVPLVVHGWKHVXLWZLWKRXWUHDFKLQJWKHPHULWVsXGJH5\DQjV
UHVROYHGIRUIXWXUHFDVHVE\WKLVFRXUWDGRSWLQJDQHZ,23         RSLQLRQ IRU WKH &RXUW  FRQFOXGHG WKDW &RQJUHVV KDG
DRQ2FWREHU7KHQHZ,23DUHDGVDV             LPSURSHUO\ H[SDQGHG WKH (TXDO 3URWHFWLRQ &ODXVH E\
IROORZV                                                              LPSRVLQJ mKHLJKWHQHG VFUXWLQ\l LQ GLVDELOLW\ FDVHV ZKHQ LW
                                                                      RQO\UHTXLUHVmUDWLRQDOEDVLVlVFUXWLQ\7KH&RXUWVDLGWKDW
  7KH HQ EDQF FRXUW LV FRPSRVHG RI  DOO MXGJHV LQ        m>L@WLVZHOOHVWDEOLVKHGWKDWGLVDELOLW\LVQRWDVXVSHFWFODVVIRU
  UHJXODU DFWLYH VHUYLFH DW WKH WLPH RI RUDO DUJXPHQW HQ     SXUSRVHVRIHTXDOSURWHFWLRQDQDO\VLVlDQGVRmWKH6WDWHPD\
  EDQFRULIQRRUDODUJXPHQWHQEDQFLVKHOGRQWKHGDWH           GLVFULPLQDWHRQWKHEDVLVRIGLVDELOLW\LIVXFKFODVVLILFDWLRQLV
  WKDWWKHHQEDQFFRXUWDJUHHVWRGHFLGHWKHFDVHZLWKRXW            UDWLRQDOO\UHODWHGWRDOHJLWLPDWHVWDWHLQWHUHVWl3RSRYLFKY
  RUDODUJXPHQWDQGDQ\VHQLRUMXGJHRIWKH&RXUWZKR            &X\DKRJD &RXQW\ &RXUW RI &RPPRQ 3OHDV 'RPHVWLF
  VDWRQWKHRULJLQDOSDQHO2QO\6L[WK&LUFXLWMXGJHVLQ            5HODWLRQV'LY)GWK&LU7KHSDQHO
  UHJXODUDFWLYHVHUYLFHPD\FDVWYRWHVRQDSROORQWKHHQ           GLGQRWUHDFKDQ\TXHVWLRQFRQFHUQLQJZKHWKHU&RQJUHVVKDG
  EDQFSHWLWLRQLWVHOI6HH86&F                       DXWKRULW\ XQGHU WKH 'XH 3URFHVV &ODXVH WR UHTXLUH
                                                                      DFFRPPRGDWLRQ RI WKH GLVDEOHG LQ VWDWH FKLOG FXVWRG\
)RUWKHUHPDLQGHURIWKLVRSLQLRQ,ZLOOEHUHIHUULQJWR,23      SURFHHGLQJV
DDVLWH[LVWHGZKHQWKLVFDVHZDVRUDOO\DUJXHGRQsXQH
%HFDXVH,23DGLGQRWFRQIRUPZLWKFXQWLO           2Q'HFHPEHUZHHOHFWHGWRUHKHDUWKLVFDVHHQ
WKHUHYLVHGYHUVLRQRIWKH,23ZDVSDVVHGRQ2FWREHU           EDQF EXW GHOD\HG FRQVLGHUDWLRQ XQWLO WKH 6XSUHPH &RXUW
ZHDUHOHIWWRGHWHUPLQHWKHSURSHUVWDWXVRIRQHLQWKH        DQQRXQFHGLWVGHFLVLRQLQ%RDUGRI7UXVWHHVRIWKH8QLYHUVLW\
SRVLWLRQRIsXGJH0HUULWWZKRZDVDFWLYHZKHQWKHHQEDQF             RI$ODEDPDY*DUUHWW866&WGHFLGHG
     3RSRYLFKY&X\DKRJD                     1RV         1RV                   3RSRYLFKY&X\DKRJD          
      &RXQW\&RXUWHWDO                                                                                     &RXQW\&RXUWHWDO

)HEUXDU\,QsXQHRIWKHHQEDQFFRXUWKHDUG              BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
RUDODUJXPHQW,Q*DUUHWWWKH6XSUHPH&RXUWWRKHOG
WKDW WKH (OHYHQWK $PHQGPHQW EDUV IHGHUDO HPSOR\PHQW                  &21&855,1*,13$57',66(17,1*,13$57
GLVFULPLQDWLRQ VXLWV DJDLQVW D VWDWH EDVHG RQ GLVDELOLW\ DV      BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
DXWKRUL]HGE\7LWOH,RIWKH$PHULFDQVZLWK'LVDELOLWLHV$FW
7KH &RXUW QRWLQJ WKDW WKH 7LWOH , OHJLVODWLRQ LV OLPLWHG WR      521$/'/((*,/0$1&LUFXLWsXGJHFRQFXUULQJLQWKH
HPSOR\PHQWGLVFULPLQDWLRQDJDLQVWWKHGLVDEOHGVDLGWKDWmWKH           MXGJPHQWEXWGLVVHQWLQJIURPWKHFRPSRVLWLRQRIWKHHQEDQF
VFRSH RI WKH FRQVWLWXWLRQDO ULJKW DW LVVXHl LV VLPSO\ mHTXDO    FRXUW$OWKRXJK,IXOO\FRQFXULQWKHMXGJPHQWRIWKHFRXUW
SURWHFWLRQl,GDW7LWOH,GRHVQRWHQFRPSDVVFODLPV             WKDWXSKROGVWKHFRQVWLWXWLRQDOLW\RI7LWOH,,RIWKH$PHULFDQV
EDVHGRQVXEVWDQWLYHULJKWVXQGHUWKH'XH3URFHVV&ODXVHDQG            ZLWK 'LVDELOLWLHV $FW , ILQG P\VHOI LQ WKH XQXVXDO DQG
WKHUHIRUH WKH VFRSH RI WKH FRQVWLWXWLRQDO ULJKW &RQJUHVV LV      XQFRPIRUWDEOHSRVLWLRQRIKDYLQJWRZULWHVHSDUDWHO\EHFDXVH
HQIRUFLQJGRHVQRWJREH\RQGHTXDOSURWHFWLRQOLDELOLW\7KH            ,EHOLHYHWKDWWKHUHLVDSURFHGXUDOIODZLQWKHFRPSRVLWLRQRI
&RXUWWKHQKHOGWKDW6HFWLRQRIWKH)RXUWHHQWK$PHQGPHQW               WKHHQEDQFFRXUW6SHFLILFDOO\,DPRIWKHRSLQLRQWKDW
GRHV QRW JLYH &RQJUHVV WKH SRZHU WR HQIRUFH WKH (TXDO           86&FGHOLQHDWLQJZKLFKMXGJHVDUHHOLJLEOHWRVLWRQ
3URWHFWLRQ &ODXVH E\ DXWKRUL]LQJ IHGHUDO HPSOR\PHQW                 DQHQEDQFFRXUWSUHFOXGHVsXGJH0HUULWWIURPSDUWLFLSDWLQJ
GLVFULPLQDWLRQVXLWVDJDLQVWVWDWHVEDVHGSXUHO\RQGLVDELOLW\          LQWKLVFDVHGHVSLWHODQJXDJHWRWKHFRQWUDU\LQWKHYHUVLRQRI
/LNH sXGJH 5\DQjV RSLQLRQ IRU WKH SDQHO LQ WKLV FDVH WKH      WKLVFRXUWjV,QWHUQDO2SHUDWLQJ3URFHGXUH,23DWKDW
&RXUW UHDVRQHG WKDW XQGHU HTXDO SURWHFWLRQ SULQFLSOHV             H[LVWHGRQWKHGDWHRIRUDODUJXPHQW
GLVDELOLW\nXQOLNHUDFHnLVQRWDmVXVSHFWFDWHJRU\lDQG
GRHV QRW GHVHUYH mKHLJKWHQHG VFUXWLQ\l  7KHUHIRUH 6WDWHV           7KH SUREOHP DULVHV IURP WKH IDFW WKDW DOWKRXJK sXGJH
PD\PDNHUHDVRQDEOHHPSOR\PHQWGHFLVLRQVRQWKHEDVLVRI                 0HUULWWZDVDQmDFWLYHlMXGJHZKHQWKHUHTXHVWZDVPDGHLQ
GLVDELOLW\  7LWOH , RI WKH 'LVDELOLWLHV $FW ZKLFK DGGUHVVHV   'HFHPEHURIWRUHKHDUWKLVFDVHHQEDQFKHWRRNmVHQLRU
GLVFULPLQDWLRQLQHPSOR\PHQWEDVHGRQGLVDELOLW\PD\RQO\               VWDWXVlRQsDQXDU\86&EGHILQLQJ
WULJJHUmPLQLPXPUDWLRQDOEDVLVUHYLHZlLGDQG&RQJUHVV               D VHQLRU FLUFXLW MXGJH DV RQH ZKR LV mUHWLUHG IURP UHJXODU
PD\QRWHQIRUFHWKH(TXDO3URWHFWLRQ&ODXVHE\FUHDWLQJD                DFWLYHVHUYLFHlsXGJH0HUULWWZDVWKXVQRWDQDFWLYHMXGJH
KLJKHUVWDQGDUGRIOLDELOLW\DQGHQIRUFLQJLWDJDLQVWWKHVWDWHV         DWWKHWLPHWKLVFDVHZDVRUDOO\DUJXHGRQsXQHQRU
LQ IHGHUDO FRXUW  6RYHUHLJQ LPPXQLW\ XQGHU WKH (OHYHQWK         ZDVKHDPHPEHURIWKHRULJLQDOWKUHHMXGJHSDQHODVVLJQHGWR
$PHQGPHQWIRUELGVKHLJKWHQHGVWDWHOLDELOLW\LQIHGHUDOFRXUWV           WKLVPDWWHU
LQGLVDELOLW\FODLPVEHFDXVHVXFKFODLPVKDYHQHYHUEHIRUH
UHFHLYHG PRUH FRQVWLWXWLRQDO SURWHFWLRQ WKDQ UDWLRQDO EDVLV          7KHDSSOLFDEOHVWDWXWH86&FDVDPHQGHGLQ
UHYLHZ7KH&RXUWKHOGWKDW7LWOH,LVQRWmFRQJUXHQWlZLWK             SURYLGHVLQSHUWLQHQWSDUWDVIROORZV
WKH (TXDO 3URWHFWLRQ &ODXVH EHFDXVH LW JUHDWO\ H[SDQGV
mGLVFULPLQDWLRQlOLDELOLW\E\DGGLQJDYHU\ODUJHQHZVXVSHFW              $ FRXUW LQ EDQF VKDOO FRQVLVW RI DOO FLUFXLW MXGJHV LQ
FODVVRISODLQWLIIV,GDW7KXVWKH6XSUHPH&RXUW               UHJXODUDFWLYHVHUYLFHH[FHSWWKDWDQ\VHQLRUFLUFXLW
IROORZHG WKH VDPH OLQH RI UHDVRQLQJ FRQVWUDLQLQJ                     MXGJHRIWKHFLUFXLWVKDOOEHHOLJLEOHWRSDUWLFLSDWH
FRQJUHVVLRQDOHQIRUFHPHQWRIWKH(TXDO3URWHFWLRQ&ODXVHDV                DVDPHPEHURIDQLQEDQFFRXUWUHYLHZLQJDGHFLVLRQRI
WKHSDQHORIWKLV&RXUWVXJJHVWHGLQLWVRSLQLRQLQWKLVFDVH             D SDQHO RI ZKLFK VXFK MXGJH ZDV D PHPEHU RU  WR
,W LV FOHDU DIWHU *DUUHWW WKDW FRQJUHVVLRQDO DXWKRULW\ XQGHU       FRQWLQXH WR SDUWLFLSDWH LQ WKH GHFLVLRQ RI D FDVH RU
VHFWLRQWRHQIRUFHWKH(TXDO3URWHFWLRQ&ODXVHLVOLPLWHGDQG            FRQWURYHUV\ WKDW ZDV KHDUG RU UHKHDUG E\ WKH FRXUW LQ
    3RSRYLFKY&X\DKRJD                    1RV        1RV                       3RSRYLFKY&X\DKRJD               
      &RXQW\&RXUWHWDO                                                                                       &RXQW\&RXUWHWDO

VWDWHVFRQWDLQOLWWOHHYLGHQFHGLUHFWO\LPSOLFDWLQJGXHSURFHVV       ZLOO QRW VXVWDLQ WKH 'LVDELOLWLHV $FW DV DQ H[FHSWLRQ WR
7KH6XSUHPH&RXUWKDVPDGHLWYHU\FOHDUWKDW&RQJUHVVPD\             (OHYHQWK$PHQGPHQWVWDWHLPPXQLW\
QRWWKURXJKmHQIRUFHPHQWlOHJLVODWLRQUHPHG\WKDWZKLFK
LWKDVQRWLGHQWLILHG
                                ,9
   ,Q VXPPDU\ (OHYHQWK $PHQGPHQW DEURJDWLRQ XQGHU
&RQJUHVVjVSRZHULVYDOLGRQO\LIWKHOHJLVODWLRQLVWUXO\
HQIRUFLQJ OHJLVODWLRQ  7KH 6XSUHPH &RXUWjV DQDO\VLV RI             
                                                                            sXGJH 0RRUH ZKR FRQFXUV LQ RXU RSLQLRQ RQ GXH SURFHVV EXW QRW
ZKHWKHUOHJLVODWLRQLVSHUPLVVLEOHHQIRUFLQJOHJLVODWLRQWXUQV         HTXDO SURWHFWLRQ VWDWHV TXLWH FOHDUO\ LQ KHU FRQFXUULQJ RSLQLRQ WKH
RQ WKH GHWHUPLQDWLRQ RI ZKHWKHU WKH OHJLVODWLRQ UHPHGLHV        SUREOHP ZLWK XSKROGLQJ 7LWOH ,, RQ HTXDO SURWHFWLRQ JURXQGV
XQFRQVWLWXWLRQDO VWDWH DFWLRQ DQG ZKHWKHU LW LV WDLORUHG WR
DYRLGHIIHFWLQJDVXEVWDQWLYHUHGHILQLWLRQRIWKHFRQVWLWXWLRQDO           , UHFRJQL]H WKDW D VXEVHW RI GLVFULPLQDWRU\ VWDWH DFWLRQ PD\ EH
                                                                           UDWLRQDO XQGHU WKH &RQVWLWXWLRQ EXW XQUHDVRQDEOH XQGHU 7LWOH ,,
ULJKW7LWOH,,YHQWXUHVIDUEH\RQGWKH&RXUWjVGHILQLWLRQRI             ,Q RWKHU ZRUGV 7LWOH ,, PD\ µSURKLELW FRQGXFW ZKLFK LV QRW LWVHOI
HQIRUFLQJ OHJLVODWLRQ  )LUVW &RQJUHVV IDLOHG WR LGHQWLI\ D       XQFRQVWLWXWLRQDO DQG LQWUXGH LQWR OHJLVODWLYH VSKHUHV RI DXWRQRP\
SDWWHUQRIVWDWHDFWLRQWKDWYLRODWHVGLVDEOHGLQGLYLGXDOVjGXH            SUHYLRXVO\ UHVHUYHG WR WKH VWDWHVj &LW\ RI %RHUQH Y )ORUHV 
SURFHVV ULJKWV DQG VHFRQG 7LWOH ,, RI WKH $'$ LV QRW          86   
FRQJUXHQWDQGSURSRUWLRQDOWRDQ\LGHQWLILHGVWDWHFRQGXFW
7KHUHIRUH7LWOH,,RIWKH$'$LVQRWDFRQVWLWXWLRQDOO\YDOLG             %XW sXGJH 0RRUH WKHQ FRQFOXGHV

DEURJDWLRQRIVWDWHVRYHUHLJQLPPXQLW\                                  +RZHYHU WKLV SRVVLELOLW\ GRHV QRW QHFHVVDULO\ PHDQ WKDW 7LWOH ,,
                                                                           H[FHHGV &RQJUHVVjV HQIRUFHPHQW SRZHU XQGHU 6HFWLRQ  RI WKH
  ,UHVSHFWIXOO\GLVVHQW                                                )RXUWHHQWK $PHQGPHQW 7KH 6XSUHPH &RXUW KDV LQVWUXFWHG WKDW
                                                                           &RQJUHVV PD\ HQDFW µUHDVRQDEO\ SURSK\ODFWLF OHJLVODWLRQj ZKHQ
                                                                           IDFHG ZLWK µGLIILFXOW DQG LQWUDFWDEOH SUREOHPV> ZKLFK@ RIWHQ
                                                                           UHTXLUH SRZHUIXO UHPHGLHVj .LPPHO Y )ORULGD %G RI 5HJHQWV
                                                                            86    ,Q HQDFWLQJ WKH $'$ &RQJUHVV QRWHG
                                                                           WKDW GLVFULPLQDWLRQ DJDLQVW LQGLYLGXDOV ZLWK GLVDELOLWLHV ZDV µD
                                                                           VHULRXV DQG SHUYDVLYH SUREOHPj  86&  D

                                                                             sXGJH 0RRUHjV SRVLWLRQ DSSOLHV WR 7LWOH ,, WKH UHDVRQLQJ RI sXVWLFH
                                                                       %UH\HUjV GLVVHQWLQJ RSLQLRQ LQ *DUUHWW %XW WKH SUREOHP LQ IROORZLQJ WKLV
                                                                       OLQH RI DUJXPHQW LV WKDW WKH PDMRULW\ RI WKH 6XSUHPH &RXUW LQ *DUUHWW
                                                                       VHHPV WR KDYH UHMHFWHG WKLV SRVLWLRQ LQ UHMHFWLQJ sXVWLFH %UH\HUjV
                                                                       GLVVHQWLQJ YLHZSRLQW 5DWKHU WKH PDMRULW\ RI WKH 6XSUHPH &RXUW DSSHDUV
                                                                       WR KDYH HVWDEOLVKHG D FOHDU UXOH WKDW GLVDELOLW\ GLVFULPLQDWLRQ GHVHUYHV RQO\
                                                                       UDWLRQDO EDVLV UHYLHZ DQG WKDW &RQJUHVV PD\ QRW JR EH\RQG WKLV VWDQGDUG
                                                                       XQGHU WKH (TXDO 3URWHFWLRQ &ODXVH E\ LPSRVLQJ QHZ OLDELOLWLHV RQ WKH
                                                                       VWDWHV 7KLV *DUUHWW UXOH ZRXOG DSSHDU WR DSSO\ WR ERWK 7LWOH , DQG 7LWOH
                                                                       ,, DOWKRXJK WKH &RXUW KDV QRW PDGH WKLV KROGLQJ H[SOLFLW DV WR 7LWOH ,, DQG
                                                                       LW LV SRVVLEOH WKRXJK XQOLNHO\ WKDW D PDMRULW\ RI WKH 6XSUHPH &RXUW PLJKW
                                                                       GLVWLQJXLVK *DUUHWW DORQJ WKH OLQHV sXGJH 0RRUH SURSRVHV LQ KHU
                                                                       FRQFXUULQJ RSLQLRQ
      3RSRYLFKY&X\DKRJD                 1RV        1RV                   3RSRYLFKY&X\DKRJD          
       &RXQW\&RXUWHWDO                                                                                &RXQW\&RXUWHWDO

    ,,7LWOH,,$SSURSULDWHO\(QIRUFHV7KH'XH3URFHVV             DQG SURSRUWLRQDOLW\ EHWZHHQ WKH LQMXU\ WR EH SUHYHQWHG RU
                            &ODXVH                                   UHPHGLHGDQGWKHPHDQVDGRSWHGWRWKDWHQGl&LW\RI%RHUQH
                                                                      86 DW   7LWOH ,, IDLOV WKH FRQJUXHQFH DQG
   7KH6XSUHPH&RXUWLQGLFDWHGKRZHYHUWKDW7LWOH,,RIWKH        SURSRUWLRQDOLW\WHVW
'LVDELOLWLHV$FWLVGLIIHUHQWIURP7LWOH,$OWKRXJKWKH&RXUW
KDGJUDQWHGFHUWLRUDULWRFRQVLGHUWKHDSSURSULDWHQHVVRI7LWOH         7LWOH,,LVDQRYHUEURDGSURVFULSWLRQ7KLVFRXUWKDVQRWHG
,, DV DQ H[FHSWLRQ WR (OHYHQWK $PHQGPHQW LPPXQLW\ WKH       RQ D SUHYLRXV RFFDVLRQ WKDW   RI 7LWOH ,, ZKLFK
PDMRULW\LQ*DUUHWWUHVHUYHGMXGJPHQWRQWKHYDOLGLW\RI7LWOH       SURKLELWVGLVFULPLQDWLRQDJDLQVWWKHGLVDEOHGmHQFRPSDVVHV
,,XQGHU6HFWLRQ,WFRQFOXGHGWKDW7LWOH,,GHDOLQJZLWK        YLUWXDOO\ HYHU\WKLQJ WKDW D SXEOLF HQWLW\ GRHVl  sRKQVRQ Y
mVHUYLFHVSURJUDPVRUDFWLYLWLHVRIDSXEOLFHQWLW\lUDWKHU       &LW\RI6DOLQH)GWK&LU7LWOH,,
WKDQ HPSOR\PHQW mKDV VRPHZKDW GLIIHUHQW UHPHGLDO               SURKLELWVDOOVWDWHFRQGXFWWKDWUHVWULFWVDFFHVVRIWKHGLVDEOHG
SURYLVLRQVIURP7LWOH,lDQGLVQRWFRQWUROOHGE\WKH&RXUWjV        WRSXEOLFVHUYLFHVIRUDQ\UHDVRQZLWKRXWUHJDUGWRZKHWKHU
GHFLVLRQUHVWULFWLQJHTXDOSURWHFWLRQFODLPVDJDLQVWVWDWHV,G    WKHVHUYLFHLQYRNHVDFRQVWLWXWLRQDOULJKW$GPLWWHGO\7LWOH
DWQ7LWOH,,XQOLNH7LWOH,HQFRPSDVVHVYDULRXVGXH      ,, UHTXLUHV RQO\ mUHDVRQDEOH DFFRPPRGDWLRQl  ,G DW 
SURFHVVW\SHFODLPVZLWKYDU\LQJVWDQGDUGVRIOLDELOLW\DQGLV       $QG D FODLPDQWjV UHFRYHU\ XQGHU 7LWOH ,, LV OLPLWHG WR
QRWOLPLWHGWRHTXDOSURWHFWLRQFODLPV,QDGGLWLRQWREULHIO\      FRPSHQVDWRU\GDPDJHV,GDW%XWWKHVHOLPLWDWLRQVDUH
QRWLQJGLIIHUHQFHVEHWZHHQWKHWZRWLWOHVWKH&RXUWLQ*DUUHWW      RIOLWWOHFRPIRUW7KH(OHYHQWK$PHQGPHQWGRHVQRWSURWHFW
DOVR QRWHG WKDW 6HFWLRQ  DOORZV &RQJUHVV WR SURKLELW D     VWDWHVRYHUHLJQW\RQO\DJDLQVWUHODWLYHO\ODUJHGDPDJHDZDUGV
mEURDGHUVZDWKRIFRQGXFWlWKDQWKHFRXUWVKDYHWKHPVHOYHV           RU VXEMHFWLYHO\ mXQUHDVRQDEOHl LQFXUVLRQV LW SURWHFWV WKH
LGHQWLILHGDVXQFRQVWLWXWLRQDO,GDW                         ZKROH RI VWDWH VRYHUHLJQW\  %\ LWV RYHUEUHDGWK 7LWOH ,,
                                                                     LPSHUPLVVLEO\ DWWHPSWV D VXEVWDQWLYH UHGHILQLWLRQ RI
   ,Q*DUUHWWWKH6XSUHPH&RXUWDGYLVHGWKHORZHUIHGHUDO           )RXUWHHQWK$PHQGPHQWGXHSURFHVV
FRXUWV WKDW mWKH ILUVW VWHSl LQ UHFRQFLOLQJ WKH (OHYHQWK
$PHQGPHQWZLWKOHJLVODWLRQDGRSWHGXQGHU6HFWLRQLVmWR               $ SODLQ UHDGLQJ RI 7LWOH ,, GHPRQVWUDWHV WKDW HYHQ LI
LGHQWLI\ZLWKVRPHSUHFLVLRQWKHVFRSHRIWKHFRQVWLWXWLRQDO         &RQJUHVVKDGEHIRUHLWDSDWWHUQRIVWDWHEHKDYLRUYLRODWLYHRI
ULJKWDWLVVXHlWKDW&RQJUHVVLVmHQIRUFLQJlDQGWRGHILQHWKH      GLVDEOHG LQGLYLGXDOVj GXH SURFHVV ULJKWV ZKLFK LW GLG QRW
mPHWHVDQGERXQGVlRIWKDWSDUWLFXODUULJKWl,GDW        7LWOH,,LVQRWVXIILFLHQWO\QXDQFHGWRSURWHFWWKDWULJKW,WLV
2EYLRXVO\ VWDQGDUGV RI FRQVWLWXWLRQDO OLDELOLW\ GLIIHU         EH\RQG TXHVWLRQ WKDW &RQJUHVV FDQ SURWHFW FRQVWLWXWLRQDO
GHSHQGLQJRQWKHQDWXUHRIWKHFRQVWLWXWLRQDOULJKWLQTXHVWLRQ     ULJKWVEXWLWPD\QRWFUHDWHWKHP$VWKH6XSUHPH&RXUWKDV
,QWKHFDVHEHIRUHXVWKHHVVHQWLDOFRQVWLWXWLRQDOULJKWVRXQGV     REVHUYHGm>:@HKDYHQHYHUKHOGWKDWSUHFOXGHV&RQJUHVV
PRVWFOHDUO\QRWLQHTXDOSURWHFWLRQEXWLQGXHSURFHVV7KH        IURPHQDFWLQJUHDVRQDEO\SURSK\ODFWLFOHJLVODWLRQl.LPHO
JHQHUDO FODLP LV WKDW WKH VWDWH FRXUW LQ D FKLOG FXVWRG\   86DW%XW7LWOH,,SURKLELWVPXFKPRUHEHKDYLRU
SURFHHGLQJGHQLHGWKHSDUWLDOO\GHDISODLQWLIIDUHDVRQDEOHZD\      WKDQLVQHFHVVDU\WRUHPHG\DQ\VWDWHYLRODWLRQVRIGLVDEOHG
WRSDUWLFLSDWHPHDQLQJIXOO\LQWKHSURFHHGLQJVRWKDWKHFRXOG       LQGLYLGXDOVjGXHSURFHVVULJKWV$VWKH&RXUWKHOGLQ.LPHO
DVVHUWKLVFKLOGFXVWRG\ULJKWV+HZDVKHFODLPVmH[FOXGHG       m&RQJUHVVj IDLOXUH WR XQFRYHU DQ\ VLJQLILFDQW SDWWHUQ RI
IURPSDUWLFLSDWLRQLQlWKHSURFHHGLQJnWRXVHWKHSUHFLVH           XQFRQVWLWXWLRQDOGLVFULPLQDWLRQKHUHFRQILUPVWKDW&RQJUHVV
ZRUGVRI7LWOH,,,QGHILQLQJWKHmPHWHVDQGERXQGVlRIWKH        KDGQRUHDVRQWREHOLHYHWKDWEURDGSURSK\ODFWLFOHJLVODWLRQ
FRQVWLWXWLRQDO ULJKW EHIRUH XV ZH PXVW FRQVLGHU ZKHWKHU      ZDVQHFHVVDU\LQWKLVILHOGl,GDW$VGLVFXVVHGDERYH
SODLQWLIIjVGXHSURFHVVW\SHFODLPWRSDUWLFLSDWHIXOO\LQWKH       WKH OHJLVODWLYH ILQGLQJV RI XQFRQVWLWXWLRQDO EHKDYLRU E\ WKH
    3RSRYLFKY&X\DKRJD                  1RV       1RV                  3RSRYLFKY&X\DKRJD           
      &RXQW\&RXUWHWDO                                                                               &RXQW\&RXUWHWDO

  >'@LVFULPLQDWLRQ DJDLQVW LQGLYLGXDOV ZLWK GLVDELOLWLHV        KHDULQJLQKLVFKLOGFXVWRG\VXLWLVDQH[FHSWLRQWR(OHYHQWK
  SHUVLVWVLQVXFKFULWLFDODUHDVDVHPSOR\PHQWKRXVLQJ           $PHQGPHQWLPPXQLW\
  SXEOLF DFFRPPRGDWLRQV HGXFDWLRQ WUDQVSRUWDWLRQ
  FRPPXQLFDWLRQ UHFUHDWLRQ LQVWLWXWLRQDOL]DWLRQ KHDOWK           7KH6XSUHPH&RXUWKDVUHFRJQL]HGWKHVSHFLDOQDWXUHRI
  VHUYLFHVYRWLQJDQGDFFHVVWRSXEOLFVHUYLFHV                SDUHQWDO ULJKWV DQG KDV FRQVHTXHQWO\ LPSRVHG VSHFLDO GXH
                                                                    SURFHVV JXDUDQWHHV VR WKDW VWDWHV PD\ QRW OLJKWO\ WHUPLQDWH
,GDWD2QHKDVWRVWUHWFKPLJKWLO\WRUHDGWKLV     SDUHQWVj UHODWLRQVKLSV ZLWK WKHLU FKLOGUHQ  7KH SURFHGXUDO
ODQJXDJHDVDQDIILUPDWLYHVWDWHPHQWE\&RQJUHVVWKDWLWZDV        JXDUDQWHHVWKDWWKH&RXUWKDVSUHYLRXVO\KDGDQRFFDVLRQWR
LGHQWLI\LQJDQGUHPHG\LQJVWDWHDFWLRQWKDWYLRODWHGGLVDEOHG       GLVFXVVLQFOXGHWKHUHTXLUHPHQWVWKDWVWDWHVSURYLGHLQGLJHQW
LQGLYLGXDOVjGXHSURFHVVULJKWV7KLVVHFWLRQLVDVWDWHPHQWRI    SDUHQWVZLWKFRXUWDSSRLQWHGFRXQVHOGXULQJFHUWDLQSDUHQWDO
WKHDFWjVSXUSRVHIRUHDFKRIWKHILYHWLWOHVLQWKH$'$DQGLW    ULJKWVKHDULQJV/DVVLWHUY'HSDUWPHQWRI6RFLDO6HUYV
FDQQRWEHUHDGWRUHIHUWR7LWOH,,VSHFLILFDOO\)XUWKHUPRUH     86QRWLQJWKDWFRXUWVKDYHmJHQHUDOO\KHOG
ZLWKWKHH[FHSWLRQRIWKHUHIHUHQFHWRYRWLQJ,GRQRWUHDGLQ     WKDW WKH 6WDWH PXVW DSSRLQW FRXQVHO IRU LQGLJHQW SDUHQWV DW
WKHQHFHVVDU\ILQGLQJE\&RQJUHVVWKDWWKHGLVDEOHG         WHUPLQDWLRQSURFHHGLQJVlXWLOL]HDmFOHDUDQGFRQYLQFLQJl
VXIIHUHGYLRODWLRQVRIWKHLUGXHSURFHVVULJKWVDWWKHKDQGVRI     HYLGHQWLDU\ VWDQGDUG ZKHQ FRQVLGHULQJ WKH WHUPLQDWLRQ RI
VWDWHV                                                           SDUHQWDO ULJKWV6DQWRVN\ Y .UDPHU  86  
                                                                    DQGSURYLGHLQGLJHQWSDUHQWVIUHHRIFKDUJHZLWKWKH
  7KHUHIRUH ZKDWHYHU PLJKW EH VDLG IRU WKH KLJKO\           WULDO UHFRUGV QHFHVVDU\ IRU SURSHU FRQVLGHUDWLRQ RI DSSHDOV
JHQHUDOL]HG VWDWHPHQW RI SXUSRVH ZLWK ZKLFK &RQJUHVV          FKDOOHQJLQJWHUPLQDWLRQRIWKHLUSDUHQWDODXWKRULW\0/%Y
HOXFLGDWHGLWVJRDOLQHQDFWLQJWKH$'$LWFHUWDLQO\GLGQRW       6/s86&I/LWWOHY6WUHDWHU
LGHQWLI\DSDWWHUQRIGXHSURFHVVYLRODWLRQV                     86VWULNLQJGRZQ&RQQHFWLFXWjVUHTXLUHPHQWWKDW
                                                                    LQGLJHQWGHIHQGDQWVEHDUWKHFRVWRISDWHUQLW\WHVWVLIWDNHQDW
                                                                  WKHLQGLJHQWjVUHTXHVW,QIDFWDOWKRXJKWKH&RXUWKDVLVVXHG
                                                                    DQXPEHURIGLYLGHGRSLQLRQVLQGHFLGLQJWKHVHTXHVWLRQVLW
  &RQJUHVVjVDXWKRULW\WRHQDFWJHQHUDOUHPHGLDOOHJLVODWLRQ        KDVXQDQLPRXVO\DJUHHGWKDWmWKHLQWHUHVWRISDUHQWVLQWKHLU
XQGHU   LV OLPLWHG WR UHFWLI\LQJ FRQGXFW WKDW LV         UHODWLRQVKLSZLWKWKHLUFKLOGUHQLVVXIILFLHQWO\IXQGDPHQWDOWR
XQFRQVWLWXWLRQDO QRW PHUHO\ XQGHVLUDEOH  :KLOH &RQJUHVV     FRPHZLWKLQWKHILQLWHFODVVRIOLEHUW\LQWHUHVWVSURWHFWHGE\
GHWHUPLQHV ZKHWKHU DQG ZKDW OHJLVODWLRQ LV QHFHVVDU\ WR      WKH )RXUWHHQWK $PHQGPHQWl 6DQWRVN\  86 DW 
HQIRUFH WKH JXDUDQWHHV RI WKH )RXUWHHQWK $PHQGPHQW           5HKQTXLVWsGLVVHQWLQJ
&RQJUHVV PD\ QRW GHILQH WKH ERXQGV RI D FRQVWLWXWLRQDO
YLRODWLRQ.LPHO86DWRQO\WKHFRXUWVPD\GR            ,Q /DVVLWHU WKH &RXUW VDLG WKDW VWDWH WHUPLQDWLRQ RU
WKDW$QGWKDWLVSUHFLVHO\WKHFRQVWLWXWLRQDOIODZLQWKH$'$    DOWHUDWLRQ RI SDUHQWDO ULJKWV UHTXLUHV SURFHGXUDO VDIHJXDUGV
7KH DFW SURVFULEHV WRR PXFK FRQGXFW WKDW LV QRW             XQGHUWKH'XH3URFHVV&ODXVHLQRUGHUWRLQVXUHmWKHDFFXUDF\
XQFRQVWLWXWLRQDODQGWKXVHIIHFWVDVXEVWDQWLYHUHGHILQLWLRQRI     DQG>MXVWLFH@RIWKHGHFLVLRQl86DWDQGLQRUGHUWR
FRQVWLWXWLRQDO ULJKWV  7KH $'$jV SURYLVLRQV PXVW mEH        DYRLGmWKHULVNWKDWDSDUHQWZLOOEHHUURQHRXVO\GHSULYHGRI
XQGHUVWRRG µDV UHVSRQVLYH WR RU GHVLJQHG WR SUHYHQW        KLVRUKHUFKLOGl,GDW7KXVWKHDSSRLQWPHQWRIFRXQVHO
XQFRQVWLWXWLRQDO EHKDYLRUjl  )ORULGD 3UHSDLG  86 DW   IRU LQGLJHQW SDUHQWV PD\ EH UHTXLUHG LQ FRPSOH[ MXGLFLDO
 TXRWLQJ &LW\ RI %RHUQH  86 DW   ,Q WKH   SURFHHGLQJVWKDWPD\LQFOXGHWKHQHHGIRUm>H@[SHUWPHGLFDO
ODQJXDJHRIWKH6XSUHPH&RXUWm7KHUHPXVWEHDFRQJUXHQFH          DQGSV\FKLDWULFWHVWLPRQ\ZKLFKIHZSDUHQWVDUHHTXLSSHGWR
        3RSRYLFKY&X\DKRJD                    1RV         1RV                    3RSRYLFKY&X\DKRJD          
          &RXQW\&RXUWHWDO                                                                                     &RXQW\&RXUWHWDO

XQGHUVWDQGl  ,G DW   /DVVLWHU PDNHV LW FOHDU WKDW LQ        ILQGLQJVEXWRIXQH[DPLQHGDQHFGRWDODFFRXQWVRIDGYHUVH
DQDO\]LQJWKHVDIHJXDUGVQHHGHGLQFKLOGFXVWRG\SURFHHGLQJV               GLVSDUDWHWUHDWPHQWE\VWDWHRIILFLDOVl*DUUHWW86DW
WKH'XH3URFHVV&ODXVHUHTXLUHVDEDODQFLQJRImWKHSULYDWH                  LQWHUQDO TXRWDWLRQ PDUNV DQG FLWDWLRQ RPLWWHG  7KH
LQWHUHVWVDWVWDNHWKHJRYHUQPHQWjVLQWHUHVWDQGWKHULVNWKDW            QRWLRQWKDWWKHPHPEHUVRI&RQJUHVVUHOLHG XSRQWKH7DVN
WKHSURFHGXUHVXVHGZLOOOHDGWRHUURQHRXVGHFLVLRQVl,GDW              )RUFHDOOHJDWLRQVWRGHWHUPLQHWKDWWKHVWDWHVZHUHHQJDJLQJ
  7KLV EURDG EDODQFLQJ VWDQGDUG XQGHU GXH SURFHVV n             LQ D SDWWHUQ RI GXH SURFHVV YLRODWLRQV LV DQ XQVXSSRUWDEOH
XQOLNHWKHIODWUXOHJLYLQJRQO\UDWLRQDOEDVLVDQDO\VLVXQGHU              ILFWLRQ  0RUHRYHU RI WKH  RU PRUH LQVWDQFHV RI
HTXDO SURWHFWLRQ LQ GLVDELOLW\ PDWWHUV n LV RSHQ WR                 GLVFULPLQDWLRQ LGHQWLILHG E\ WKH 7DVN )RUFH DQG OLVWHG LQ
LQWHUSUHWDWLRQE\&RQJUHVVDVZHOODVWKHFRXUWVIRURWKHUZLVH             $SSHQGL[ & RI sXVWLFH %UH\HUjV GLVVHQW LQ *DUUHWW , FDQ
WKH&RXUWjVDGPRQLWLRQLQ*DUUHWWWKDW&RQJUHVVPD\VHHNWR                 ORFDWH QR PRUH WKDQ  ZKLFK DUJXDEO\ UDLVH GXH SURFHVV
GHWHU D mEURDGHU VZDWK RI FRQGXFW WKDQ WKH FRXUWV KDYH             FRQFHUQV  2I WKH OLPLWHG QXPEHU WKDW FRXOG EH UHDG WR
WKHPVHOYHVLGHQWLILHGDVXQFRQVWLWXWLRQDOlZRXOGKDYHQRUHDO               LPSOLFDWH GXH SURFHVVnZKHWKHU LW EH SURFHGXUDO RU
PHDQLQJ RU HIIHFW  2WKHUZLVH WKH mFRQJUXHQFHl UHTXLUHG              VXEVWDQWLYHGXHSURFHVVLVDQRWKHUPDWWHUnWKHYDVWPDMRULW\
EHWZHHQ D SLHFH RI 6HFWLRQ  OHJLVODWLRQ DQG WKH VSHFLILF          DUHFRQFHUQHGZLWKSK\VLFDODFFHVVWRSROOVDQGFRXUWKRXVHV
FRQVWLWXWLRQDO SURYLVLRQ HQIRUFHG E\ WKH OHJLVODWLRQ ZRXOG            :KLOH,GRQRWGRXEWWKDWWKHVHDUHVHULRXVLPSHGLPHQWVIRU
PHDQWKDW&RQJUHVVPD\RQO\SURYLGHUHPHGLHVWRHQIRUFHD                   WKHGLVDEOHGLWLVQRWFOHDUZKDWLQGLYLGXDOOHJLVODWRUVPDGHRI
VSHFLILF FRXUW GHFLVLRQ  7KLV ZRXOG HIIHFWLYHO\ XVXUS               WKHVH7DVN)RUFHILQGLQJVLILQGHHGWKH\HYHUKHDUGRIWKHP
FRQJUHVVLRQDODXWKRULW\WRSDVVmDSSURSULDWHlOHJLVODWLRQDQG               7KH EHVW WKDW FDQ EH VDLG IRU WKHP LV WKDW WKH\ UDLVH HTXDO
ZRXOGJLYHOHVVGHIHUHQFHWR&RQJUHVVWKDQFRXUWVRUGLQDULO\                SURWHFWLRQ FRQFHUQV  , KDYH GLIILFXOW\ DVVLJQLQJ PXFK
JLYHWRDGPLQLVWUDWLYHDJHQFLHVLQLQWHUSUHWLQJVWDWXWHV                   FUHGHQFHWRWKHDUJXPHQWWKDWPHPEHUVRI&RQJUHVVUHOLHGRQ
                                                                            7DVN)RUFHUHSRUWVZKLFKLQFOXGHFRQFOXVLRQVVXFKDVmVWDWH
  7KH LQVWLWXWLRQDO UROH RI &RQJUHVV XQGHU 6HFWLRQ  LQ             XQLYHUVLW\GHQLHGVDEEDWLFDOSURSRVDORIIDFXOW\PHPEHUZLWK
LQWHUSUHWLQJ WKH )RXUWHHQWK $PHQGPHQW VKRXOG EH QR OHVV              GLVDELOLW\lLGDWRUmFKLOGGHQLHGDGPLVVLRQWRSXEOLF
H[SDQVLYHWKDQWKHUROHRIWKHFRXUWVLQLQWHUSUHWLQJVWDWXWHVDW           VFKRROEHFDXVHILUVWJUDGHWHDFKHUUHIXVHGWRWHDFKKLPlLG
FRPPRQODZ&RQJUHVVVKRXOGKDYHDWOHDVWWKHVDPHSRZHU                   DW7KHLQWHUYHQRUDQGWKHPDMRULW\RSLQLRQZRXOGKDYH
DV/RUG&RNHGHVFULEHGIRUMXGJHVLQLQWHUSUHWLQJVWDWXWHVLQ               XVLQIHUWKDWWKHLQGLYLGXDOVjGLVDELOLWLHVFDXVHGWKHVWDWHWRDFW
                                                                       DVLWGLG%XWVXFK7DVN)RUFHmILQGLQJVlSURYLGHOHJLVODWRUV
                                                                            ZLWK QR VXSSRUW IRU WKH FRQWHQWLRQ WKDW WKH VWDWHV YLRODWHG
  DFRQVWUXFWLRQPDGHE\WKHMXGJHVWKDWFDVHVRXWRIWKH                  GLVDEOHG LQGLYLGXDOVj GXH SURFHVV ULJKWV VR URXWLQHO\ DV WR
  OHWWHURIDVWDWXWH\HWEHLQJZLWKLQWKHVDPHPLVFKLHIHRU              DPRXQWWRDSDWWHUQRIGLVFULPLQDWLRQ,QGHHGWKHILQGLQJV
  FDXVHRIWKHPDNLQJRIWKHVDPHVKDOOEHZLWKLQWKHVDPH                 WHOOOHJLVODWRUVQRWKLQJDERXWVWDWHDFWLRQVWRZDUGWKHGLVDEOHG
  UHPHGLHWKDWWKHVWDWXWHSURYLGHWKDQGWKHUHDVRQKHUHRI
  LVWKDWIRUWKHODZPDNHUVFRXOGQRWSRVVLEO\VHWGRZQH                     0RUHRYHUWKH$'$jVVWDWHPHQWRIOHJLVODWLYH)LQGLQJVDQG
  DOOFDVHVLQH[SUHVVHWHUPV                                             3XUSRVHRIIHUVQRVXSSRUWIRUWKHFRQWHQWLRQWKDW&RQJUHVV
                                                                            LGHQWLILHG D SDWWHUQ RI VWDWH GXH SURFHVV YLRODWLRQV  )RU
                                                                            LQVWDQFH86&H[SUHVVLQJWKH$'$jV)LQGLQJV
                                                                            DQG3XUSRVHRIIHUVWKHIROORZLQJLQSHUWLQHQWSDUW
     
         6LU (GZDUG &RNH 7KH )LUVW 3DUW RI WKH ,QVWLWXWHV RI WKH /DZV RI
(QJODQG   DW E 3KLODGHOSKLD 5REHUW + 6PDOO  
    3RSRYLFKY&X\DKRJD                  1RV        1RV                      3RSRYLFKY&X\DKRJD            
      &RXQW\&RXUWHWDO                                                                                    &RXQW\&RXUWHWDO

LQGLYLGXDOVKDYHEHHQGHQLHGSK\VLFDODFFHVVWRFRXUWVWKH          sXGJHVPXVWDGMXGLFDWHRQHFDVHDWDWLPHDQGXVXDOO\GRQRW
ULJKWWRYRWHDQGHGXFDWLRQDORSSRUWXQLWLHV%XWLWLVTXLWH       JREH\RQGWKHFDVHDWKDQGWRDQWLFLSDWHRUUXOHRQRWKHUIDFW
FOHDUWKDW&RQJUHVVDVVHVVHGVXFKHYLGHQFHRIGLVFULPLQDWLRQ         SDWWHUQV WKDW PD\ IDOO mZLWKLQ WKH VDPH PLVFKLHIHl  /DZ
DVGHQLDORIHTXDOSURWHFWLRQQRWGHQLDORIGXHSURFHVV)RU       PDNLQJIRUIXWXUHFDVHVZLWKGLIIHUHQWIDFWSDWWHUQVLVXVXDOO\
LQVWDQFHWKH&RPPLWWHHRQ(GXFDWLRQDQG/DERUIRXQGWKDW            WKH UROH RI WKH OHJLVODWRU QRW WKH UROH RI FRXUWV LQ D VLQJOH
GXH WR GLVFULPLQDWLRQ WKH GLVDEOHG KDYH EHHQ GHQLHG mWKH    GHFLVLRQRQDVLQJOHVHWRIIDFWVDIWHUDFRXUWURRPEDWWOHE\
RSSRUWXQLW\WRFRPSHWHRQDQHTXDOEDVLVZLWKRWKHUVl        DGYHUVDULHV7KHUHIRUHWKHFRXUWVVKRXOGQRWWLHWKHKDQGVRI
+55HS1R,,DWUHSULQWHGLQ           &RQJUHVVXQGHU6HFWLRQPHUHO\WRWKHLPSOHPHQWDWLRQRI
86&&$1HPSKDVLVDGGHG7KH&RPPLWWHHRQ            SUHYLRXV FRXUW GHFLVLRQV  &RQJUHVV VKRXOG KDYH XQGHU
WKHsXGLFLDU\ZURWHWKDWmWKHJRDO>RI7LWOH,,@LVWRHUDGLFDWH     6HFWLRQDWOHDVWWKHSRZHUWKDWFRPPRQODZMXGJHVSRVVHVV
WKH LQYLVLELOLW\ RI WKH KDQGLFDSSHG  6HSDUDWHEXWHTXDO       WRHQIRUFHmWKHHTXLW\RIWKHVWDWXWHlDVGHVFULEHGE\/RUG
VHUYLFHVGRQRWDFFRPSOLVKWKLVFHQWUDOJRDODQGVKRXOGEH           &RNH
UHMHFWHGl+55HS1R,,,DWUHSULQWHG
LQ  86&&$1   LQWHUQDO TXRWDWLRQ PDUNV        +HUHWKHSODLQWLIIjVGXHSURFHVVLQWHUHVWLVVLJQLILFDQWLQWKDW
FLWDWLRQDQGRULJLQDODOWHUDWLRQVRPLWWHG)LQDOO\RQHRIWKH    WKHMXGLFLDOSURFHHGLQJZLOOGHWHUPLQHWKHDPRXQWRIWLPHLI
$'$jV VSRQVRUV LQ WKH +RXVH RI 5HSUHVHQWDWLYHV VWDWHG        DQ\KHFDQVSHQGZLWKKLVGDXJKWHU)DLOXUHWRDFFRPPRGDWH
m7LWOH,,RIWKLVDFWLVGHVLJQHGWRFRQWLQXHEUHDNLQJ GRZQ         KLVKHDULQJGLVDELOLW\PD\UHQGHUKLPXQDEOHWRSDUWLFLSDWH
EDUULHUV WR WKH LQWHJUDWHG SDUWLFLSDWLRQ RI SHRSOH ZLWK       PHDQLQJIXOO\LQWKDWGHWHUPLQDWLRQ,IKHFDQQRWXQGHUVWDQG
GLVDELOLWLHVLQDOODVSHFWVRIFRPPXQLW\OLIHl&RQJ5HF      ZKDW LV KDSSHQLQJ GXULQJ WKH FXVWRG\ KHDULQJ LW ZLOO EH
(
(GDLO\HG0D\VWDWHPHQWRI5HS            LPSRVVLEOHIRUKLPWRUHIXWHFODLPVPDGHDJDLQVWKLPRUWR
+R\HU                                                            RIIHU HYLGHQFH RQ KLV RZQ EHKDOI &RQVHTXHQWO\ D VWDWHjV
                                                                     IDLOXUH WR DFFRPPRGDWH SODLQWLIIjV GHDIQHVV PD\ JUHDWO\
  7KHFRXUWjVHIIRUWWRDGYDQFHWKHGXHSURFHVVWKHRU\DWRUDO       LQFUHDVHWKHULVNRIHUURULQWKHSURFHHGLQJSUHFOXGLQJRQH
DUJXPHQWRQO\FRQILUPHGIXUWKHUWKDWWKHILQGLQJV&RQJUHVV           VLGHIURPUHVSRQGLQJWRFKDUJHVPDGHE\WKHRSSRVLQJSDUW\
KDGEHIRUHLWVRXQGHGLQHTXDOSURWHFWLRQ$IWHUFRQVLGHUDEOH       DQHVVHQWLDOHOHPHQWRIRXUDGYHUVDU\V\VWHP)URP2KLRjV
SURPSWLQJIURPWKHEHQFKWRVKLIWIURPDQHTXDOSURWHFWLRQ           SHUVSHFWLYHWKHSDUDPRXQWJRYHUQPHQWDOLQWHUHVWLVWRLQVXUH
WKHRU\WRDGXHSURFHVVWKHRU\DQGWKHQRQO\LQUHVSRQVHWRD       WKDWWKH6WDWHjVPRVWYXOQHUDEOHFLWL]HQVDUHSODFHGZLWKWKH
TXHVWLRQIURPRQHRIWKHMXGJHV3RSRYLFKjVFRXQVHODVVHUWHG         SDUHQW EHVW VXLWHG IRU SURYLGLQJ IRU WKHLU ZHOIDUH  7KLV
WKDW&RQJUHVVKDGPDGHILQGLQJVWKDW7LWOH,,ZDVLQWHQGHGWR        LQWHUHVWLVDFKLHYHGWKURXJKDSURFHHGLQJWKDWSHUPLWVERWK
UHPHG\GXHSURFHVVYLRODWLRQV6HL]LQJXSRQsXVWLFH%UH\HUjV        SDUHQWVWRXQGHUVWDQGDQGWRUHVSRQGWRWKHDUJXPHQWVPDGH
GLVVHQWLQJRSLQLRQLQ*DUUHWWFRXQVHOLQYLWHGRXUDWWHQWLRQWR      E\ WKHLU DGYHUVDULHV WKHUHE\ JLYLQJ WKH MXGJH D FRPSOHWH
$SSHQGL[ & RI WKH %UH\HU GLVVHQW ZKLFK FRQWDLQV D           SLFWXUH RI HDFK SDUHQWjV DELOLWLHV WR FDUH IRU WKH FKLOG LQ
GHVFULSWLRQRIWKHVXEPLVVLRQVRIIHUHGWRWKH7DVN)RUFHRQ          TXHVWLRQ $W WKH VDPH WLPH 2KLR KDV DQ REYLRXV QHHG WR
5LJKWV DQG (PSRZHUPHQW RI $PHULFDQV ZLWK 'LVDELOLWLHV         DGPLQLVWHULWVGHFLVLRQVLQDFRVWFRQVFLRXVDQGWLPHHIIHFWLYH
*DUUHWW86DW7KHVHDUHQRWFRQJUHVVLRQDO
mILQGLQJVl  7KH\ DUH QRWKLQJ PRUH WKDQ FODLPV RI
GLVFULPLQDWLRQRIIHUHGDWWKHPDQ\SXEOLFKHDULQJVKHOGE\WKH           
                                                                             6HH
                                                                             sRKQ ) 0DQQLQJ     7H[WXDOLVP DQG WKH (TXLW\ RI WKH 6WDWXWH 
7DVN )RUFH QRW E\ &RQJUHVV  7KH*DUUHWW &RXUW PDMRULW\     &2/80 / 5(9  :LOOLDP 1 (VNULGJH sU      $OO $ERXW :RUGV

QRWHG RI $SSHQGL[ & WKDW LW mFRQVLVWV QRW RI OHJLVODWLYH   (DUO\    8QGHUVWDQGLQJV    RI   WKH   msXGLFLDO   3RZHUl    LQ   6WDWXWRU\
                                                                     ,QWHUSUHWDWLRQ     &2/80 / 5(9  
    3RSRYLFKY&X\DKRJD                    1RV        1RV                      3RSRYLFKY&X\DKRJD        
      &RXQW\&RXUWHWDO                                                                                      &RXQW\&RXUWHWDO

PDQQHU DQG DW VRPH SRLQW WKH UHTXHVWHG DFFRPPRGDWLRQV          GHILQLQJ WKH VFRSH RI SDUHQWVj GXH SURFHVV ULJKWV GRHV QRW
PD\ EHFRPH VR H[SHQVLYH RU RQHURXV DV WR RXWZHLJK WKHLU       FRQFOXVLYHO\GHWHUPLQHZKHWKHUWKHOHJLVODWLRQLQTXHVWLRQKDV
XVHIXOQHVVLQUHDFKLQJDGHFLVLRQ                                    PHWWKH6XSUHPH&RXUWjVZHOOVHWWOHGFULWHULDIRURYHUFRPLQJ
                                                                       WKH(OHYHQWK$PHQGPHQW3URSHUO\IRFXVHGRQWKDWWDVN,
   ,Q OHJLVODWLQJ RQ WKH VXEMHFW RI GLVDELOLW\ &RQJUHVV PD\   FRQFOXGHWKDWLWLVHQWLUHO\FOHDUWKDW&RQJUHVVPHWQHLWKHURI
UHTXLUHVWDWHVLQFKLOGFXVWRG\SURFHHGLQJVWRFRQVLGHUWKH        WKHFULWHULDIRUWUXPSLQJWKH(OHYHQWK$PHQGPHQWLWGLGQRW
mYLWDOl DQG mIXQGDPHQWDOl QDWXUH RI WKH ULJKWV DW VWDNH LQ    PDNHDGHTXDWHILQGLQJVRIDSDWWHUQRIVWDWHWUDQVJUHVVLRQV
SDUHQWDOFXVWRG\KHDULQJV6DQWRVN\86DWWKH          DQG WKH OHJLVODWLRQ GRHV QRW FUHDWH D FRQJUXHQW DQG
IDFWWKDWFRVWVRIVXSSO\LQJWKHUHTXHVWHGDFFRPPRGDWLRQDUH           SURSRUWLRQDOUHPHG\
IDLUO\ ORZ DQG  WKDW SDUWLHV PD\ EH YLUWXDOO\ mH[FOXGHG
IURPSDUWLFLSDWLRQLQlWKHVWDWHSURFHHGLQJXQOHVVDGMXVWPHQWV                                           %
DUHPDGHWRDFFRPPRGDWHWKHSDUW\jVGLVDELOLW\7KHVXEMHFW
PDWWHULQYROYHGLQWKHLQVWDQWFDVHnDIDWKHUVHHNLQJWRIRUFH                                          
WKHVWDWHWRSURYLGHKLPZLWKKHDULQJDVVLVWDQFHIRUXVHLQD
VWDWHMXGLFLDOSURFHHGLQJGHWHUPLQLQJKLVFXVWRG\ULJKWVZLWK             7LWOH,,SURKLELWVWKHH[FOXVLRQRIGLVDEOHGLQGLYLGXDOVIURP
UHVSHFWWRKLVGDXJKWHUnUDLVHVREYLRXVGXHSURFHVVFRQFHUQV          SDUWLFLSDWLRQLQWKHDFWLYLWLHVRIDSXEOLFHQWLW\86&
ZKLFK&RQJUHVVKDVWKHDXWKRULW\WRDGGUHVVXQGHU6HFWLRQ           1HLWKHUWKHODQJXDJHRIWKHVWDWXWHQRULWVOHJLVODWLYH
%DVHG RQWKH6XSUHPH&RXUWFDVHVFRQFHUQLQJWKHSURFHVV               KLVWRU\ JLYH WKH VOLJKWHVW LQGLFDWLRQ WKDW ZKHQ FUHDWLQJ WKH
UHTXLUHGLQFKLOGFXVWRG\VXLWVLWLVFOHDUWKDW2KLRLVUHTXLUHG     VWDWXWRU\ ULJKW &RQJUHVV LGHQWLILHG D KLVWRU\ RU SDWWHUQ RI
WRSURYLGH3RSRYLFKZLWKVRPHOHYHORIKHDULQJDVVLVWDQFH             YLRODWLRQV RI GLVDEOHG LQGLYLGXDOVj GXH SURFHVV ULJKWV  ,Q
GHSHQGLQJRQWKHGHJUHHRIKLVGLVDELOLW\IRUKLVGDXJKWHUjV          SDUWLFXODU WKHUH LV QR PHQWLRQ LQ WKH VWDWXWH HLWKHU LQ LWV
FXVWRG\KHDULQJDQGPD\QRWUHWDOLDWHDJDLQVWKLPIRUPDNLQJ           VWDWHPHQWRIOHJLVODWLYHSXUSRVHRUHOVHZKHUHRIWKHULJKWVRI
VXFK D UHTXHVW  $V DSSOLHG WR WKH FDVH EHIRUH XV WKH      GLVDEOHGSDUHQWVLQWKHFRQGXFWRIFKLOGFXVWRG\WHUPLQDWLRQ
mSDUWLFLSDWLRQl UHTXLUHPHQW RI 7LWOH ,, VHUYHV WR SURWHFW       KHDULQJV  :KLOH &RQJUHVV PDGH DPSOH ILQGLQJV RI
3RSRYLFKjV GXH SURFHVV ULJKW WR D PHDQLQJIXO KHDULQJ  ,Q     mGLVFULPLQDWLRQlDOPRVWDOORIWKHILQGLQJVSURSHUO\VRXQGLQ
FKLOG FXVWRG\ FDVHV LQYROYLQJ KHDULQJLPSDLUHG SDUHQWV           HTXDO SURWHFWLRQ QRW GXH SURFHVV  , GR QRW TXHVWLRQ IRU D
&RQJUHVVLVZHOOZLWKLQLWVH[SUHVVDXWKRULW\XQGHU6HFWLRQ          PRPHQWWKHIDFWWKDWGLVDEOHGLQGLYLGXDOVLQRXUVRFLHW\KDYH
WRUHTXLUHVWDWHVWRDFFRPPRGDWHSDUHQWDOGLVDELOLW\DQGWR            IDFHGVHYHUHGLVFULPLQDWLRQDQGKDUGVKLS%XWWKH6XSUHPH
UHIUDLQIURPUHWDOLDWLRQIRU&RQJUHVVLVmHQIRUFLQJlWKHGXH          &RXUWjV(OHYHQWK$PHQGPHQWMXULVSUXGHQFHUHTXLUHVVSHFLILF
SURFHVV ULJKW UDWKHU WKDQ  mH[SDQGLQJl LW  7KHUH LV QR      ILQGLQJVRIGLVFULPLQDWRU\VWDWHDFWLRQ$QGWKRVHILQGLQJV
VHSDUDWLRQ RI SRZHUV SUREOHP KHUH DV LQ *DUUHWW ZKHUH        PXVW LQFOXGH WKH FRQFOXVLRQ WKDW GXH SURFHVV ULJKWV LQ
&RQJUHVV DFFRUGLQJ WR WKH YLHZ RI WKH PDMRULW\ IDLOHG WR    SDUWLFXODUZHUHYLRODWHG7KHOHJLVODWLYHKLVWRU\RI7LWOH,,
REVHUYHDFOHDUUXOHRIHTXDOSURWHFWLRQODZ&RQJUHVVKDVQRW        VXSSRUWVQRVXFKILQGLQJ
FKDQJHGWKHQDWXUHRIWKHGXHSURFHVVULJKWRUZDWHUHGGRZQ
WKHFRQVWLWXWLRQDOVWDQGDUG7KHFRQJUHVVLRQDOmH[FOXGHIURP             7KHUHLVVRPHLQGLFDWLRQLQ7LWOH,,jVOHJLVODWLYHKLVWRU\WKDW
SDUWLFLSDWLRQl VWDQGDUG DV DSSOLHG KHUH FHUWDLQO\ GRHV QRW    LWZDVSDVVHGLQUHVSRQVHWRGLVFULPLQDWLRQLQWKHSURYLVLRQRI
SURKLELWDmEURDGHUVZDWKRI>VWDWHMXGLFLDO@FRQGXFWlWKDQWKH        SXEOLF VHUYLFHV DQG DFFRPPRGDWLRQV  ,Q DQ H[KDXVWLYH
6XSUHPH&RXUWVXJJHVWVLVZLWKLQWKHFRQJUHVVLRQDOSRZHU               H[DPLQDWLRQRIWKHOHJLVODWLYHKLVWRU\WKHLQWHUYHQRULQWKLV
XQGHU6HFWLRQ                                                     FDVH QRWHV D ERG\ RI GDWD GHPRQVWUDWLQJ WKDW GLVDEOHG
    3RSRYLFKY&X\DKRJD                      1RV         1RV                      3RSRYLFKY&X\DKRJD              
      &RXQW\&RXUWHWDO                                                                                         &RXQW\&RXUWHWDO

                                  $                                              ,,,7KH0HULWVRI3ODLQWLIIjV&ODLPVXQGHUWKH
                                                                                                  'LVDELOLWLHV$FW
   $VWKH6XSUHPH&RXUWVWDWHGLQ*DUUHWWm7KHILUVWVWHS
LV WR LGHQWLI\ ZLWK VRPH SUHFLVLRQ WKH VFRSH RI WKH                 7KLVFDVHZKLFKUHVXOWHGLQDGDPDJHDZDUGIRU
FRQVWLWXWLRQDO ULJKW DW LVVXHl   86 DW   +HUH WKH   SODLQWLIIZDVWULHGLQWKHGLVWULFWFRXUWRQWKUHHEDVLFWKHRULHV
FRQVWLWXWLRQDO ULJKW WKH PDMRULW\ FODLPV LV DW LVVXH LV WKH       UHWDOLDWLRQ E\ WKH VWDWH GRPHVWLF UHODWLRQV FRXUW DJDLQVW
)RXUWHHQWK $PHQGPHQWjV GXH SURFHVV ULJKW  ,W VKRXOG EH           SODLQWLIIIRUUHTXHVWLQJKHDULQJDVVLVWDQFHDQGWKHQILOLQJDQ
REYLRXVKRZHYHUWKDWDQDO\]LQJWKHSODLQWLIIjVFODLPDVDGXH           DGPLQLVWUDWLYH FRPSODLQW ZLWK WKH 'HSDUWPHQW RI sXVWLFH
SURFHVV ULJKW DQG QRW DQ HTXDO SURWHFWLRQ ULJKW GRHV QRW       XQGHUWKH'LVDELOLWLHV$FWLQYLRODWLRQRI86&
DXWRPDWLFDOO\ UHPHG\ 7LWOH ,,jV (OHYHQWK $PHQGPHQW                   H[FOXVLRQIURPSDUWLFLSDWLRQLQWKHFXVWRG\FDVHEHFDXVH
YLRODWLRQ                                                              RISODLQWLIIjVGLVDELOLW\DQGGLVFULPLQDWLRQDJDLQVWSODLQWLII
                                                                          E\GHQ\LQJKLPnLQWKHODQJXDJHRIWKHGLVWULFWFRXUWjVMXU\
  7KHPDMRULW\FRQIODWHVWKHWDVNRIGHILQLQJWKHULJKWDWLVVXH          FKDUJHnmDQHTXDORSSRUWXQLW\WRHQMR\WKHEHQHILWVRID
ZLWK WKH FULWLFDO VWHS RI GHWHUPLQLQJ ZKHWKHU WKH VWDWXWH LV     VHUYLFHFRQGXFWHGE\WKHSXEOLFHQWLW\>WKHVWDWHFRXUW@lDQG
DSSURSULDWH UHPHGLDO OHJLVODWLRQ  7UXH GXH SURFHVV               mWKH RSSRUWXQLW\ WR SDUWLFLSDWH HTXDOO\ LQ WKH SURFHHGLQJ
FKDOOHQJHVPHULWGLIIHUHQWOHYHOVRIUHYLHZGHSHQGLQJRQWKH              SHQGLQJEHIRUHWKHFRXUWl3RSRYLFKY&X\DKRJD&RXQW\
VSHFLILF GXH SURFHVV ULJKW HQIRUFHG  +RZHYHU WKH                 1R1'2KLRFKDUJHWRMXU\$SULOWULDO
HPRWLRQDOO\DSSHDOLQJDUJXPHQWPDGHLQWKHPDMRULW\RSLQLRQ               WUDQVFULSWDW
WKDWSDUHQWVKDYHGXHSURFHVVULJKWVLQWHUPLQDWLRQRIFXVWRG\
SURFHHGLQJVGRHVQRWREYLDWHWKHQHHGWRFRQIURQWDQGDQDO\]H               :HUHYHUVHDQGUHPDQGWKHFDVHIRUDQHZWULDOEHFDXVHWKH
WKHFRQVWLWXWLRQDOYDOLGLW\RI7LWOH,,E\ILUVWH[DPLQLQJWKH            FKDUJHWRWKHMXU\DSSHDUVWRSHUPLWWKHMXU\WRILQGLQIDYRURI
(OHYHQWK $PHQGPHQW MXULVSUXGHQFH KDQGHG GRZQ E\ WKH
6XSUHPH&RXUW
                                                                              
   5HJDUGOHVV RI WKH ULJKW SURWHFWHG LI &RQJUHVV ZLVKHV WR             86&   3URKLELWLRQ DJDLQVW UHWDOLDWLRQ DQG FRHUFLRQ

OHJLVODWLYHO\ DEURJDWH WKH VWDWHVj FRQVWLWXWLRQDO SURWHFWLRQ         XQGHU WKH $'$ VWDWHV LQ UHOHYDQW SDUW

DIIRUGHGE\WKH(OHYHQWK$PHQGPHQWLWPXVWILUVWLGHQWLI\D                  D 5HWDOLDWLRQ
KLVWRU\RUSDWWHUQRIVWDWHWUDQVJUHVVLRQRIWKHVSHFLILFULJKWLQ
TXHVWLRQ$VDVHFRQGVWHSWKHFRXUWPXVWGHWHUPLQHZKHWKHU                 1R SHUVRQ VKDOO GLVFULPLQDWH DJDLQVW DQ\ LQGLYLGXDO EHFDXVH VXFK
WKH UHPHG\ LV mFRQJUXHQ>W@ DQG SURSRUWLRQDO>@l WR WKH                  LQGLYLGXDO KDV RSSRVHG DQ\ DFW RU SUDFWLFH PDGH XQODZIXO E\ WKLV

WUDQVJUHVVLRQ&LW\RI%RHUQH86DW&DVWLQJWKH                 FKDSWHU RU EHFDXVH VXFK LQGLYLGXDO PDGH D FKDUJH WHVWLILHG
                                                                              DVVLVWHG RU SDUWLFLSDWHG LQ DQ\ PDQQHU LQ DQ LQYHVWLJDWLRQ
DUJXPHQW LQ WHUPV RI SDUHQWDO ULJKWV LQ FKLOG FXVWRG\                 SURFHHGLQJ RU KHDULQJ XQGHU WKLV FKDSWHU
WHUPLQDWLRQSURFHHGLQJVWKHPDMRULW\RSLQLRQILQGVWKDWWKH
6XSUHPH&RXUWmKDVXQDQLPRXVO\DJUHHGWKDWµWKHLQWHUHVWRI                   E ,QWHUIHUHQFH FRHUFLRQ LQWLPLGDWLRQ
SDUHQWVLQWKHLUUHODWLRQVKLSZLWKWKHLUFKLOGUHQLVVXIILFLHQWO\
IXQGDPHQWDOWRFRPHZLWKLQWKHILQLWHFODVVRIOLEHUW\LQWHUHVWV              ,W VKDOO EH XQODZIXO WR FRHUFH LQWLPLGDWH WKUHDWHQ RU LQWHUIHUH
                                                                              ZLWK DQ\ LQGLYLGXDO LQ WKH H[HUFLVH RU HQMR\PHQW RI RU RQ
SURWHFWHGE\WKH)RXUWHHQWK$PHQGPHQWjl0DM2SDWBB                      DFFRXQW RI KLV RU KHU KDYLQJ H[HUFLVHG RU HQMR\HG RU RQ DFFRXQW
HPSKDVLVDGGHGTXRWLQJ6DQWRVN\Y.UDPHU86                   RI KLV RU KHU KDYLQJ DLGHG RU HQFRXUDJHG DQ\ RWKHU LQGLYLGXDO LQ
5HKQTXLVWsGLVVHQWLQJ%HWKDWDVLWPD\                  WKH H[HUFLVH RU HQMR\PHQW RI DQ\ ULJKW JUDQWHG RU SURWHFWHG E\
                                                                              WKLV FKDSWHU
    3RSRYLFKY&X\DKRJD                    1RV        1RV                   3RSRYLFKY&X\DKRJD          
      &RXQW\&RXUWHWDO                                                                                   &RXQW\&RXUWHWDO

WKHSODLQWLIILILWILQGVGLVFULPLQDWLRQDJDLQVWKLPRUH[FOXVLRQ      $PHQGPHQW LV QRW VXSSRUWHG E\ RXU FDVH ODZl  &LW\ RI
IURPSXEOLFSURFHHGLQJVEDVHGRQHTXDOSURWHFWLRQSULQFLSOHV          %RHUQH Y )ORUHV  86     7UXH
$IWHU*DUUHWWWKLVLVDQLPSHUPLVVLEOHEDVLVRQZKLFKWREDVH         m&RQJUHVVjSRZHUµWRHQIRUFHjWKH>)RXUWHHQWK@$PHQGPHQW
IHGHUDO MXULVGLFWLRQ XQGHU WKH (OHYHQWK $PHQGPHQW RU D          LQFOXGHVWKHDXWKRULW\ERWKWRUHPHG\DQGWRGHWHUYLRODWLRQRI
YHUGLFW DQG GDPDJHV DJDLQVW D VWDWH FRXUW XQGHU WKH            ULJKWV JXDUDQWHHG WKHUHXQGHU E\ SURKLELWLQJ D VRPHZKDW
'LVDELOLWLHV$FW*DUUHWWKRZHYHUGRHVQRWIRUHFORVHDWULDO        EURDGHUVZDWKRIFRQGXFWLQFOXGLQJWKDWZKLFKLVQRWLWVHOI
DQG YHUGLFW EDVHG RQ UHWDOLDWLRQ RU XQUHDVRQDEOH H[FOXVLRQ      IRUELGGHQE\WKH$PHQGPHQWjVWH[Wl.LPHOY)ORULGD%GRI
IURP MXGLFLDO SURFHHGLQJV EDVHG RQ GLVDELOLW\ LQ D GXH         5HJHQWV86TXRWLQJ&LW\RI%RHUQH
SURFHVVW\SHFODLP:HEHOLHYHWKDWWKHIDFWVSUHVHQWHGLQWKH        86DW%XW&RQJUHVVjVHIIRUWVDWUHPHGLDOOHJLVODWLRQ
FRXUWEHORZUDLVHMXU\LVVXHVRQWKHUHWDOLDWLRQDQGH[FOXVLRQ         FDQQRWLPSHUPLVVLEO\HIIHFWDVXEVWDQWLYHUHGHILQLWLRQRIWKH
FODLPV                                                                )RXUWHHQWK$PHQGPHQW,G
   7KHWULDOLQWKHGLVWULFWFRXUWWKDWUHVXOWHGLQWKH          2XU SULPDU\ IRFXV LQ WKLV FDVH VKRXOG EH ZKHWKHU LQ
GDPDJHDZDUGFRQVLVWHGRIWHQZLWQHVVHVSUHVHQWHGRYHUIRXU            HQDFWLQJ7LWOH,,RIWKH$'$&RQJUHVVKDVYDOLGO\DEURJDWHG
GD\V  0XFK RI WKH WHVWLPRQ\ GHVFULEHG SODLQWLIIjV FXVWRG\     WKHVWDWHVj(OHYHQWK$PHQGPHQWLPPXQLW\7KHDQVZHULV
GLVSXWHRYHUKLVGDXJKWHUDQGWKHLQLWLDOH[SDUWHKHDULQJLQ          WKDWLWKDVQRWDQGWKDWDQVZHULVGLFWDWHGE\WKH6XSUHPH
$XJXVW  WKDW OHG WR D VWDWH FRXUW RUGHU WUDQVIHUULQJ      &RXUWjV (OHYHQWK $PHQGPHQW MXULVSUXGHQFH ZKLFK PXVW
FXVWRG\RIKLVGDXJKWHUWRKHUPRWKHU7KLVWHVWLPRQ\DERXW           JXLGHRXUDQDO\VLVRIWKHLVVXH$VWKH6XSUHPH&RXUWVWDWHG
WKHFXVWRG\GLVSXWHDQGWKHLQLWLDOH[SDUWHKHDULQJLVUHOHYDQW       LQ&LW\RI%RHUQHDQGPRVWUHFHQWO\GHYHORSHGLQ*DUUHWW
RQO\WRWKHH[WHQWWKDWLWSURYLGHVWKHFRQWH[WRUEDFNJURXQG          DEURJDWLRQ RI (OHYHQWK $PHQGPHQW LPPXQLW\ XQGHU WKH
LQZKLFKWKHIDFWVFRQFHUQLQJUHWDOLDWLRQDQGH[FOXVLRQZHUH           )RXUWHHQWK$PHQGPHQWjVSRZHULVYDOLGRQO\LIDFRXUW
SUHVHQWHG2QWKHUHWDOLDWLRQFODLP0U7KRPDV.RQG]HU              FDQLGHQWLI\WKHVFRSHRIWKHULJKWDWLVVXHDQGHQVXUH
SODLQWLIIjV ODZ\HU GXULQJ WKH FXVWRG\ GLVSXWH DQG KHDULQJV      WKDW&RQJUHVVLVWUXO\mHQIRUFLQJlWKDWULJKWE\DSSURSULDWH
KHOGLQWHVWLILHGWKDWKLVFOLHQWZDVSUHVHQWHGZLWKDQ          OHJLVODWLRQ  *DUUHWW  86 DW   $ VWDWXWH LV
mRSWLRQlLQ'HFHPEHURIE\WKHSUHVLGLQJMXGJHRIWKH             DSSURSULDWHO\HQIRUFLQJOHJLVODWLRQXQGHURQO\LILWLVWUXO\
FXVWRG\SURFHHGLQJWKDWUHTXLUHGSODLQWLIIWRHLWKHUJLYHXSKLV       mUHPHGLDOl  6HH )ORULGD 3UHSDLG 3RVWVHFRQGDU\ (GXF
ULJKWV XQGHU WKH 'LVDELOLWLHV $FW RU VXIIHU D GHOD\ LQ WKH   ([SHQVH%GY&ROO6DY%DQN86
DGMXGLFDWLRQ RI WKH FXVWRG\ FDVH  7HVWLPRQ\ RI 7KRPDV         m>)@RU &RQJUHVV WR LQYRNH   LW PXVW LGHQWLI\ FRQGXFW
.RQG]HU0DUWULDOWUDQVFULSWDW0U.RQG]HU          WUDQVJUHVVLQJ WKH )RXUWHHQWK $PHQGPHQWjV VXEVWDQWLYH
WHVWLILHGWKDWWKHZDLYHUmZDVQjWDZDLYHUIRUWKDWGD\,WZDV       SURYLVLRQVDQGPXVWWDLORULWVOHJLWLPDWHVFKHPHWRUHPHG\LQJ
DWRWDOZDLYHUl,GDW$FFRUGLQJWR0U.RQG]HUmWKH           RUSUHYHQWLQJVXFKFRQGXFWl,GDW,QHQDFWLQJ7LWOH,,
RSWLRQZDVWRZLWKGUDZWKHPRWLRQ>IRUFORVHGFDSWLRQLQJRU            &RQJUHVVKDVQRWSURSHUO\LQYRNHGEHFDXVHLWKDVIDLOHGWR
UHDOWLPHWUDQVFULSWLRQ@ZDLYH\RXUULJKWVXQGHUWKH$'$DQG          LGHQWLI\FRQGXFWWUDQVJUHVVLQJWKH)RXUWHHQWK$PHQGPHQWjV
SURFHHGWRGD\lRUKDYHWKHSURFHHGLQJSRVWSRQHG,G:LWK            GXH SURFHVV ULJKW DQG IDLOHG WR WDLORU 7LWOH ,, WR FDUHIXOO\
0U .RQG]HUjV DGYLFH WKH SODLQWLII UHIXVHG WR ZDLYH KLV       UHPHG\VXFKFRQGXFW
'LVDELOLWLHV $FW FODLP RU ZLWKGUDZ KLV PRWLRQ  $IWHU KLV
UHIXVDOWKHKHDULQJZDVWKHQGLVFRQWLQXHGDQGGLGQRWUHVXPH
DJDLQXQWLOWKHIDOORIRYHUD\HDUDQGDKDOIODWHU,Q
IDFWWKHSDUWLHVVWLSXODWHGLQWKHFRXUWEHORZWKDWWKHMXGJH
    3RSRYLFKY&X\DKRJD                    1RV        1RV                     3RSRYLFKY&X\DKRJD           
      &RXQW\&RXUWHWDO                                                                                     &RXQW\&RXUWHWDO

XQGHUVWDQGDEO\VXUSULVHGFRXQVHOm2QHQHHGRQO\UHYLHZWKH           SUHVLGLQJRYHUWKHFXVWRG\SURFHHGLQJmJDYHWKHSODLQWLIIWZR
H[FKDQJH DW WKH HQ EDQF KHDULQJ RI WKLV FDVH WR NQRZ WKDW   RSWLRQV3ODLQWLIIFRXOGZLWKGUDZKLVPRWLRQIRUDKHDULQJ
PDQ\µTXHVWLRQVjSRVHGE\ODZ\HUVDQGMXGJHVZKLOHSKUDVHG           DFFRPPRGDWLRQDQGWKHFRXUWFRXOGSURFHHGWRGD\µZLWKWKH
LQ WKH IRUP RI TXHVWLRQV DUH VWDWHPHQWVl 8QLWHG 6WDWHV Y   FRQWLQXHGKHDULQJjRU>WKHMXGJH@FRXOGµVFKHGXOHDKHDULQJ
6XVVNLQG  )G   WK &LU  HQ EDQF         WRGHWHUPLQHWKHH[WHQWRIKLVKHDULQJGLVDELOLW\DQGZKDWLI
0HUULWW s GLVVHQWLQJ  'HVSLWH WKH SHUVLVWHQFH RI VRPH    DQ\DFFRPPRGDWLRQQHHGHGWREHPDGHIRUWKDWjl6WLSXODWHG
PHPEHUVRIWKHFRXUWFRXQVHOIRUWKHSDUWLHVIDLOHGWRVHL]H          )DFWVRIWKH3DUWLHV$SUWULDOWUDQVFULSWDW
XSRQWKHGXHSURFHVVDUJXPHQW                                       7KHORQJGHOD\LQWKHSURFHHGLQJVWKHQHQVXHG
                                %                                        $WDSUHWULDOFRQIHUHQFHKHOGRQ)HEUXDU\WKHQHZ
                                                                       MXGJHDVVLJQHGWRWKHFDVHSUHVHQWHGSODLQWLIIZLWKDSURSRVHG
   7RVXPPDUL]HWKHUXOHLQWKLVFLUFXLWLVWKDWLWLVQRWWKH        VWLSXODWHG RUGHU LQ ZKLFK RQH RI WKH SURYLVLRQV ZDV WKDW
DSSHOODWHFRXUWjVIXQFWLRQWRFUDIWDSDUW\jVDUJXPHQW$EVHQW        SODLQWLIIZRXOGDJUHHWRZDLYHDQ\REMHFWLRQWRRUDSSHDORI
VRPH SUHVVLQJ FRQFHUQ VNHOHWDO FRQWHQWLRQV DUH EHVW OHIW       mWKLVSURFHHGLQJlDQGmDQ\SULRUSURFHHGLQJVRQWKHEDVLVRI
XQDGGUHVVHG(QEDQFSURFHHGLQJVUHSUHVHQWDQRSSRUWXQLW\             sRVHSK 3RSRYLFKjV KHDULQJ GLVDELOLW\l  'HI ([ %
WRFODULI\GLVSXWHGPDWWHUVRIODZIXOO\YHWWHGYLDORZHUFRXUW        7HVWLPRQ\ RI sXGJH $QWKRQ\ 5XVVR $SU   WULDO
GHFLVLRQVSDQHOUHYLHZDQGHQEDQFEULHILQJ7KH\DUHQRW           WUDQVFULSW DW   $JDLQ SODLQWLII ZLWK WKH DGYLFH RI KLV
RFFDVLRQVIRUWKHDGYDQFHPHQWRIQHZFRQVWLWXWLRQDOWKHRULHV           DWWRUQH\UHIXVHGWRVLJQWKHSURSRVHGRUGHU
XQH[SORUHGE\WKHSDUWLHVZLWKWKHDWWHQGDQWULVNRIFRQIXVLQJ
LPSRUWDQW DUHDV RI FRQVWLWXWLRQDO ODZ  ,Q *DUUHWW WKH          7KHVHIDFWVUDLVHDYLDEOHMXU\LVVXHRIUHWDOLDWLRQ7KHMXU\
6XSUHPH&RXUWGHFODUHGm:HDUHQRWGLVSRVHGWRGHFLGHWKH            EDVHGXSRQWKHVHIDFWVZRXOGEHHQWLWOHGWRILQGWKDWIRUFLQJ
FRQVWLWXWLRQDO LVVXH ZKHWKHU 7LWOH ,,    LV DSSURSULDWH    3RSRYLFKWRFKRRVHEHWZHHQJRLQJIRUZDUGZLWKWKHFXVWRG\
OHJLVODWLRQXQGHURIWKH)RXUWHHQWK$PHQGPHQWZKHQWKH             KHDULQJVDQGZDLYLQJKLVGLVDELOLW\FODLPnDQGWKHQXSRQ
SDUWLHV KDYH QRW IDYRUHG XV ZLWK EULHILQJ RQ WKH VWDWXWRU\    KLVUHIXVDOWRZDLYHGLVFRQWLQXLQJWKHSURFHHGLQJVIRUD\HDU
TXHVWLRQl*DUUHWW86DWQ7KLVFRXUWVKRXOG           DQG D KDOI n FRXOG FRQVWLWXWH UHWDOLDWLRQ LQ YLRODWLRQ RI
DELGHE\WKDWVDPHFDXWLRQ7KHSDUWLHVKDYHQRWVXIILFLHQWO\         
SUHVHQWHGDQGWKHFRXUWKDVQRWVXIILFLHQWO\FRQVLGHUHGWKH
GXHSURFHVVLVVXHLWLVIRUDQRWKHUGD\                              7KHVHVDPHIDFWVFRQFHUQLQJWKHORQJGHOD\LQWKHFXVWRG\
                                                                       FDVHEDVHGRQSODLQWLIIjVUHIXVDOWRZDLYHKLVGLVDELOLW\FODLPV
                               ,,,                                    SOXVWKHFODLPHGUHIXVDORIWKHVWDWHFRXUWWRSURYLGHSODLQWLII
                                                                       ZLWKFORVHGFDSWLRQHGWUDQVODWLRQRIWKHSURFHHGLQJRURWKHU
   ,JQRULQJWKHVHFRPSHOOLQJUHDVRQVIRUQRWDGGUHVVLQJWKH            IRUPVRIKHDULQJDVVLVWDQFHPD\FRQVWLWXWHDQXQUHDVRQDEOH
GXH SURFHVV WKHRU\ WKH PDMRULW\ KDV FKRVHQ WR GR VR DQG    H[FOXVLRQ RI SODLQWLII IURP SDUWLFLSDWLRQ LQ WKH SURFHHGLQJ
ZRUVHKDVUHDFKHGDQHUURQHRXVFRQFOXVLRQ&RQVHTXHQWO\             XQGHU SULQFLSOHV RI GXH SURFHVV RI ODZ  7KH FDVH PD\ EH
,WRRPXVWDGGUHVVWKHVXEVWDQWLYHPHULWVRIWKDWDUJXPHQW          UHWULHGRQERWKWKHRULHVRIOLDELOLW\XQGHUWKH'LVDELOLWLHV$FW
  &RQJUHVVLRQDO HIIRUWV WR DEURJDWH (OHYHQWK $PHQGPHQW
LPPXQLW\ VKRXOG SURFHHG PLQGIXO RI WKH 6XSUHPH &RXUWjV              
                                                                            ,Q UHVSRQVH WR sXGJH 5\DQjV GLVVHQWLQJ RSLQLRQ FRPSODLQLQJ WKDW WKH
DGPRQLWLRQ WKDW m>D@Q\ VXJJHVWLRQ WKDW &RQJUHVV KDV D           03 s,3.   FRXUW VKRXOG QRW UHDFK WKH 'XH 3URFHVV &ODXVH WKHRU\ IRU
VXEVWDQWLYH QRQUHPHGLDO SRZHU XQGHU WKH )RXUWHHQWK              XSKROGLQJ 7LWOH ,, ZH VKRXOG SRLQW RXW WKDW XQWLO WKH JUDQW RI 03 s,3.
     3RSRYLFKY&X\DKRJD                         1RV            1RV                   3RSRYLFKY&X\DKRJD           
       &RXQW\&RXUWHWDO                                                                                            &RXQW\&RXUWHWDO

  +HQFHWKHSODLQWLIIjVFODLPVEDVHGRQHTXDOSURWHFWLRQW\SH                   SDUWLHV6XDVSRQWHUXOLQJVRQLVVXHVRIFRQVWLWXWLRQDOLPSRUW
SULQFLSOHVRIGLVFULPLQDWLRQDUHIRUHFORVHGDVVWDWHGDERYH                    ILUVW FRQMXUHG E\ WKH FRXUW LQ LWV LQWHUQDO GHOLEHUDWLRQV DUH
DQG WKH MXU\ YHUGLFW RI  LV VHW DVLGH DQG WKH FDVH            SODLQO\ DW RGGV ZLWK RXU GXW\ WR JLYH VXFK LVVXHV IXOO\
UHPDQGHG IRU UHWULDO RQ WKH UHWDOLDWLRQ DQG XQUHDVRQDEOH                  LQIRUPHGDQGGHOLEHUDWHFRQVLGHUDWLRQ
H[FOXVLRQIURPSDUWLFLSDWLRQFODLPV
                                                                                    7KH6XSUHPH&RXUWKDVGHPRQVWUDWHGLWVDOOHJLDQFHWRWKLV
                                                                                 SUXGHQWDSSURDFKLQGHFOLQLQJWRGHFLGHWKHYHU\LVVXHEHIRUH
                                                                                 WKLV SDQHO  ,Q 3HQQV\OYDQLD 'HSDUWPHQW RI &RUUHFWLRQV Y
                                                                                 <HVNH\86WKH6XSUHPH&RXUWGHFOLQHGWR
                                                                                 UHDFK WKH IXOO\ EULHIHG DUJXPHQW WKDW 7LWOH ,, RI WKH $'$
                                                                                 YLRODWHVWKH(OHYHQWK$PHQGPHQW$VWKH&RXUWQRWHGHYHQ
                                                                                 WKRXJK WKH SDUWLHV KDG EULHIHG WKH DUJXPHQW QHLWKHU WKH
                                                                                 GLVWULFWFRXUWQRUWKHFRXUWRIDSSHDOVKDGDGGUHVVHGWKHLVVXH
                                                                                 LQLWVRSLQLRQVDQGLWGLGQRWZLVKWRGHFLGHVXFKDQLPSRUWDQW
UHKHDULQJ QR SDUW\ KDG D UHDVRQDEOH RSSRUWXQLW\ WR DGYDQFH WKLV DUJXPHQW        PDWWHUZLWKRXWWKHORZHUFRXUWVjYLHZV,GDW,WLVD
,Q WKH 'LVWULFW &RXUW QR SDUW\ DGYDQFHG DQ (OHYHQWK $PHQGPHQW                   ZRQGHU ZK\ WKLV FRXUW ZRXOG SURFHHG ZKHUH WKH 6XSUHPH
LPPXQLW\ DUJXPHQW EDUULQJ WKLV DFWLRQ DQG WKHUHIRUH QR SDUW\ ZDV FDOOHG         &RXUWZRXOGQRW
XSRQ WR DGYDQFH DQ\ MXVWLILFDWLRQ IRU 7LWOH ,, EDVHG RQ HTXDO SURWHFWLRQ RU
GXH SURFHVV XQGHU 6HFWLRQ  RI WKH )RXUWHHQWK $PHQGPHQW %HIRUH WKH                7R EH VXUH WKH EULHIV RI WKH DPLFXV DQG WKH LQWHUYHQRU
RULJLQDO SDQHO WKH 6WDWH DV DSSHOODQW DGYDQFHG QR DUJXPHQW EDVHG RQ WKH
(OHYHQWK $PHQGPHQW LQ LWV RULJLQDO EULHI DQG RQO\ PHQWLRQHG LQ LWV ODVW
                                                                                 SUHVHQWHG GXH SURFHVV DUJXPHQWV  7KH DPLFXV 2/56
UHSO\ EULHI 7KH 6WDWHjV LPPXQLW\ DUJXPHQW EHIRUH WKH RULJLQDO SDQHO ZDV         DGYDQFHGGXHSURFHVVDVRQHRIWKUHHJURXQGVIRUDIILUPDQFH
EDVHG RQO\ RQ DQ HTXDO SURWHFWLRQ DUJXPHQW 7KH SDQHO DFFHSWHG WKH               RIWKHGLVWULFWFRXUWjVMXGJPHQW,QLWVLQWHUYHQRUjVEULHIWKH
6WDWHjV HTXDO SURWHFWLRQ WKHRU\ DQG GLVPLVVHG SODLQWLIIjV DFWLRQ HYHQ            '2sjV GXH SURFHVV DUJXPHQW DULVHV DV SDUW RI LWV JHQHUDO
WKRXJK WKH 6WDWH ZDLYHG DQ\ VXFK DUJXPHQW E\ QRW UDLVLQJ LW LQ WKH WULDO         FRQWHQWLRQ WKDW &RQJUHVV KDG EHIRUH LW D ODUJH ERG\ RI
FRXUW RU LQ LWV RULJLQDO EULHI
                                                                                 HYLGHQFH VKRZLQJ XQFRQVWLWXWLRQDO VWDWH DFWLRQ LQ WKH
       2QFH WKH &LYLO 5LJKWV 'LYLVLRQ RI WKH sXVWLFH 'HSDUWPHQW OHDUQHG WKDW
                                                                                 SURYLVLRQRISXEOLFVHUYLFHVWRWKHGLVDEOHG7KH'2sDUJXHG
7LWOH ,, ZDV XQGHU FRQVWLWXWLRQDO DWWDFN EHIRUH WKH RULJLQDO SDQHO LW VRXJKW    WKDW 7LWOH ,, HPERGLHV D YDULHW\ RI FRQVWLWXWLRQDO ULJKWV
WR LQWHUYHQH XQGHU  86&  D (YHQ WKRXJK  D JUDQWV WKH         LQFOXGLQJ)RXUWHHQWK$PHQGPHQWGXHSURFHVVULJKWV,W LV
JRYHUQPHQW D ULJKW WR LQWHUYHQH ZKHQ WKH FRQVWLWXWLRQDOLW\ RI D IHGHUDO          GLIILFXOW WR UHDG HLWKHU RI WKHVH DUJXPHQWV DV VXIILFLHQWO\
VWDWXWH LV DWWDFNHG WKH &RXUW mVKDOO SHUPLW WKH 8QLWHG 6WDWHV WR LQWHUYHQH
                                                                                 EULHILQJ WKH GLIILFXOW DQG DEVWUXVH GXH SURFHVV LVVXH WKH
   IRU DUJXPHQW RQ WKH TXHVWLRQ RI FRQVWLWXWLRQDOLW\l WKH SDQHO LVVXHG
D RQHOLQH RUGHU GHQ\LQJ LQWHUYHQWLRQ 7KXV WKH SDQHO SUHYHQWHG WKH
                                                                                 PDMRULW\KDVKDQGHGWR3RSRYLFK
JRYHUQPHQW IURP PDNLQJ DQ\ DUJXPHQW DQG UHDFKHG LWV FRQFOXVLRQ LQ WKH
DEVHQFH RI DQ\ DUJXPHQW EDVHG RQ WKH 'XH 3URFHVV &ODXVH 7KH 03 s,3.               'HVSLWHWKHSDXFLW\RIGXHSURFHVVDUJXPHQWSUHVHQWHGLQ
FRXUW DOORZHG WKH JRYHUQPHQW WR LQWHUYHQH DQG LW WKHQ ILOHG D EULHI UDLVLQJ     WKHEULHIVDWRUDODUJXPHQWRQHRUWZRPHPEHUVRIWKHFRXUW
WKH GXH SURFHVV MXVWLILFDWLRQ IRU XSKROGLQJ 7LWOH ,, LQ WKLV FDVH 0RUHRYHU     PDGHUHSHDWHGDWWHPSWVWRLQWHUHVW3RSRYLFKjVFRXQVHOLQWKH
0U 0LFKDHO .LUNPDQ RI WKH 2KLR /HJDO 5LJKWV 6HUYLFH ILOHG DQ H[WHQVLYH
                                                                                 GXH SURFHVV WKHRU\ KH KDG QHYHU DGYDQFHG  ,Q WKHLU
DPLFXV EULHI VXSSRUWLQJ WKH JRYHUQPHQWjV GXH SURFHVV MXVWLILFDWLRQ IRU
7LWOH ,, :H WKHUHIRUH EHOLHYH LW DSSURSULDWH WR UHDFK WKH GXH SURFHVV EDVLV
                                                                                 mTXHVWLRQVlWKHVHPHPEHUVDWWHPSWHGWRH[SORUHDWKHRU\RI
IRU XSKROGLQJ 7LWOH ,,   ,W LV QRW WKH IDXOW RI WKH   03 s,3.   &RXUW RU WKH   (OHYHQWK$PHQGPHQWDEURJDWLRQXQGHUDGXHSURFHVVWKHRU\
JRYHUQPHQW WKDW WKH RULJLQDO SDQHO FKRVH WR LJQRUH WKH 'XH 3URFHVV              7KH\ JRW YHU\ OLWWOH FODULILFDWLRQ IURP 3RSRYLFKjV
&ODXVH DV D EDVLV IRU 7LWOH ,,
    3RSRYLFKY&X\DKRJD                       1RV          1RV                    3RSRYLFKY&X\DKRJD          
      &RXQW\&RXUWHWDO                                                                                         &RXQW\&RXUWHWDO

WKLVERG\ZLVKHVWRFRQVLGHU(OHYHQWK$PHQGPHQWDEURJDWLRQ                                      BBBBBBBBBBBBBBBBBBBB
E\WKH$'$XQGHUDGXHSURFHVVWKHRU\XQGRXEWHGO\LWZLOO
VRRQKDYHWKDWRSSRUWXQLW\,QFRQVLGHULQJDQGGHFLGLQJWKLV                                     &21&855(1&(
FDVH RQ D mGXH SURFHVV WKHRU\l WKH HQ EDQF FRXUW LV QRW                             BBBBBBBBBBBBBBBBBBBB
mUHKHDULQJlDQ\WKLQJLWLVFRQGXFWLQJDQRULJLQDOKHDULQJDQG
HYHQWKHQRQDQLVVXHWKHOLWLJDQWVKDYHQRWSUHVHQWHG                     .$5(11(/6210225(&LUFXLWsXGJHFRQFXUULQJ,
                                                                            FRQFXULQWKHMXGJPHQWRIWKHFRXUWDQG3DUW,,RIWKHPDMRULW\
                                                                          RSLQLRQ EXW , ZULWH VHSDUDWHO\ ZLWK UHVSHFW WR 3DUW ,  7KH
                                                                            FRXUW UHOLHV RQ WKH 6XSUHPH &RXUWjV KROGLQJ LQ %RDUG RI
  7KH FDVH SUHFHGHQW LQ WKLV FLUFXLW LQVWUXFWV FRXUWV WR            7UXVWHHVRIWKH8QLYHUVLW\RI$ODEDPDY*DUUHWW86
ZLWKKROGMXGJPHQWRQLVVXHVQRWIXOO\GHYHORSHGE\WKHEULHIV                 WKDW VWDWH HPSOR\HHV PD\ QRW UHFRYHU PRQH\
RULQWKHUHFRUG:HKDYHREVHUYHG                                      GDPDJHVIRUWKHVWDWHjVIDLOXUHWRFRPSO\ZLWK7LWOH,RIWKH
                                                                            $PHULFDQVZLWK'LVDELOLWLHV$FWm$'$lWRIRUHFORVHHTXDO
  m>,@VVXHV DGYHUWHG WR LQ D SHUIXQFWRU\ PDQQHU                      SURWHFWLRQFODLPVIRUPRQH\GDPDJHVDJDLQVWWKHVWDWHXQGHU
  XQDFFRPSDQLHG E\ VRPH HIIRUW DW GHYHORSHG                            7LWOH,,RIWKH$'$,EHOLHYHWKDW*DUUHWWGRHVQRWFRQWURO
  DUJXPHQWDWLRQDUHGHHPHGZDLYHG,WLVQRWVXIILFLHQW                   WKLV FRXUWjV GLVSRVLWLRQ RI WKLV FDVH  0RUHRYHU , ZRXOG
  IRUDSDUW\WRPHQWLRQDSRVVLEOHDUJXPHQWLQWKHPRVW                    FRQFOXGHEDVHGRQWKHVLJQLILFDQWGLIIHUHQFHVEHWZHHQ7LWOHV
  VNHOHWDO ZD\ OHDYLQJ WKH FRXUW WR    SXW IOHVK RQ LWV     ,DQG,,WKDW&RQJUHVVYDOLGO\HQDFWHGWKHODWWHUSXUVXDQWWRLWV
  ERQHVl                                                                 HQIRUFHPHQW DXWKRULW\ XQGHU   RI WKH )RXUWHHQWK
                                                                            $PHQGPHQWWRUHPHG\RUWRSUHYHQWYLRODWLRQVRIERWKWKH
0F3KHUVRQY.HOVH\)GWK&LU                   'XH3URFHVVDQG(TXDO3URWHFWLRQ&ODXVHV
TXRWLQJ&LWL]HQV$ZDUHQHVV1HWZRUN,QFY8QLWHG6WDWHV
1XFOHDU5HJXODWRU\&RPPjQ)GVW&LU                       $OWKRXJKFODVVLILFDWLRQVEDVHGRQGLVDELOLW\DUHQRWVXEMHFW
VHH%RURIIY9DQ:HUW&LW\%GRI(GXF)G                  WRKHLJKWHQHGVFUXWLQ\WKH6XSUHPH&RXUWKDVUHFRJQL]HGWKDW
WK&LUFLWLQJ8QLWHG6WDWHVY(OGHU                 WKH(TXDO3URWHFWLRQ&ODXVHSURKLELWVDUELWUDU\DQGLQYLGLRXV
)G   WK &LU  FHUW GHQLHG  6 &W        GLVFULPLQDWLRQDJDLQVWLQGLYLGXDOVZLWKGLVDELOLWLHV&LW\RI
2IUHOHYDQFHWRZKDWLVEHLQJGRQHLQWKLVFDVH              &OHEXUQHY&OHEXUQH/LYLQJ&WU86
ZHFDXWLRQHGLQ8QLWHG6WDWHVY3KLEEV)GWK                 KROGLQJWKDWmWKH>GLVDEOHG@OLNHRWKHUVKDYHDQGUHWDLQWKHLU
&LUWKDWmLWLVQRWRXUIXQFWLRQWRFUDIWDQDSSHOODQWjV            VXEVWDQWLYHFRQVWLWXWLRQDOULJKWVLQDGGLWLRQWRWKHULJKWWREH
DUJXPHQWl,GDWQ:HKDYHKHOGWKDWXQEULHIHG                  WUHDWHGHTXDOO\E\WKHODZl$VFRUUHFWO\QRWHGLQ3DUW,RI
LVVXHVDUHFRQVLGHUHGZDLYHGDQGXQUHYLHZDEOH7KXUPDQY                  WKHPDMRULW\RSLQLRQWKH6XSUHPH&RXUWKHOGLQ*DUUHWWWKDW
<HOORZ)UHLJKW6\V,QF)GWK&LU              &RQJUHVV KDG H[FHHGHG LWV   HQIRUFHPHQW DXWKRULW\ LQ
,W LV IRU WKH SDUWLHV QRW WKH MXGJHV RI WKLV FRXUW WR UDLVH   DEURJDWLQJ VWDWH VRYHUHLJQ LPPXQLW\ IURP VXLWV IRU PRQH\
LPSRUWDQWFRQVWLWXWLRQDOLVVXHVIRURXUUHYLHZDQGRQO\ZKHQ               GDPDJHVXQGHU7LWOH,RIWKH$'$86DW,QVR
VXFKLVVXHVDUHUDLVHGSUHVHQWHGDQGGHFLGHGLQWKHORZHU                 KROGLQJWKH*DUUHWW&RXUWREVHUYHGWKDWWKHOHJLVODWLYHUHFRUG
FRXUW  2XU GXW\ WR GHFLGH VXFK JUDYH TXHVWLRQV DV WKH            RIWKH$'$mIDLOVWRVKRZWKDW&RQJUHVVGLGLQIDFWLGHQWLI\
FRQVWLWXWLRQDO YDOLGLW\ RI DQ $FW RI &RQJUHVV LV SURSHUO\           D SDWWHUQ RI LUUDWLRQDO VWDWH GLVFULPLQDWLRQ LQ HPSOR\PHQW
GLVFKDUJHGRQO\ZKHQZHKDYHWKHEHQHILWRIDORZHUFRXUW                   DJDLQVWWKHGLVDEOHGl,GDWHPSKDVLVDGGHG+RZHYHU
GHFLVLRQ IROORZHG E\ IXOO EULHILQJ DQG DUJXPHQW E\ WKH             WKH&RXUWH[SUHVVO\UHVHUYHGWKHTXHVWLRQZKHWKHU7LWOH,,RI
       3RSRYLFKY&X\DKRJD                      1RV           1RV                 3RSRYLFKY&X\DKRJD         
         &RXQW\&RXUWHWDO                                                                                      &RXQW\&RXUWHWDO

WKH $'$ ZDV DSSURSULDWH OHJLVODWLRQ        XQGHU   RI WKH             $Q HQ EDQF KHDULQJ RU UHKHDULQJ LV QRW IDYRUHG DQG
)RXUWHHQWK$PHQGPHQW,GDWQ%HFDXVH*DUUHWWGLG                     RUGLQDULO\ZLOOQRWEHRUGHUHGXQOHVV
QRWDGGUHVVZKHWKHU&RQJUHVVLGHQWLILHGDKLVWRU\DQGSDWWHUQ
RI XQFRQVWLWXWLRQDO GLVFULPLQDWLRQ E\ WKH VWDWHV DJDLQVW                     HQ EDQF FRQVLGHUDWLRQ LV QHFHVVDU\ WR VHFXUH RU
SHUVRQVZLWKGLVDELOLWLHVLQWKHSURYLVLRQRISXEOLFVHUYLFHV,                 PDLQWDLQXQLIRUPLW\RIWKHFRXUWjVGHFLVLRQVRU
ZRXOGQRWUHDGWKHGHFLVLRQWREHGHWHUPLQDWLYHLQWKHFRQWH[W
RI 7LWOH ,,  5DWKHU WKDQ UHO\ RQ DXWKRULW\ WKDW LV DW EHVW            WKHSURFHHGLQJLQYROYHVDTXHVWLRQRIH[FHSWLRQDO
PHUHO\LPSOLHG,ZRXOGDQDO\]HWKHFRQVWLWXWLRQDOLW\RI7LWOH                   LPSRUWDQFH
,,RQLWVRZQPHULWV
                                                                               )HG5$SS3DHPSKDVLVDGGHG7KLVFOHDUODQJXDJH
  ,QUHMHFWLQJWKHHTXDOSURWHFWLRQFODLPLQWKLVFDVHWKHFRXUW              FDXWLRQV FRXUWV WR H[HUFLVH HQ EDQF UHYLHZ ZLWK
GLVFRXQWVWKHVLJQLILFDQWGLIIHUHQFHVEHWZHHQ7LWOHV,DQG,,RI               FLUFXPVSHFWLRQ  7KH 6L[WK &LUFXLW KDV H[SRXQGHG IXUWKHU
WKH$'$)LUVW&RQJUHVVPDGHH[SUHVVILQGLQJVEDVHGRQDQ                   XSRQWKLVUXOH
                                                                                 $VXJJHVWLRQIRUUHKHDULQJHQEDQFLVDQH[WUDRUGLQDU\
                                                                                 SURFHGXUHZKLFKLVLQWHQGHGWREULQJWRWKHDWWHQWLRQRI
                                                                                 WKHHQWLUH&RXUWDSUHFHGHQWVHWWLQJHUURURIH[FHSWLRQDO
                                                                                 SXEOLFLPSRUWDQFHRUDQRSLQLRQZKLFKGLUHFWO\FRQIOLFWV
                                                                                 ZLWKSULRU6XSUHPH&RXUWRU6L[WK&LUFXLWSUHFHGHQW
     
     ,QGHHG WKH *DUUHWW &RXUW DFNQRZOHGJHG WKDW m>W@KH RYHUZKHOPLQJ
PDMRULW\ RI >WKH KXQGUHGV RI DFFRXQWV FRPSLOHG E\ sXVWLFH %UH\HU LQ KLV
                                                                               WK&LU5FHPSKDVLVDGGHG,QWKHPDWWHUEHIRUHXV
GLVVHQW@ SHUWDLQ WR DOOHJHG GLVFULPLQDWLRQ E\ WKH 6WDWHV LQ WKH SURYLVLRQ RI   WKHUHLVQRSUHFHGHQWVHWWLQJHUURUDQGWKHUHLVQRFRQIOLFWZLWK
SXEOLF VHUYLFHV DQG SXEOLF DFFRPPRGDWLRQV ZKLFK DUHDV DUH DGGUHVVHG LQ        SULRU SUHFHGHQW  ,QGHHG LQ *DUUHWW WKH 6XSUHPH &RXUW
7LWOHV ,, DQG ,,, RI WKH $'$l    86 DW  Q
                                                                               DIILUPHGWKHUHDVRQLQJRIWKLVFRXUWjVRULJLQDOSDQHO7KDW
                                                                              VKRXOGGLVSRVHFRQFOXVLYHO\RIWKHPDWWHU7KHRQO\UHDVRQ
       &I *DUFLD Y 681< +HDOWK 6FLV &WU RI %URRNO\Q BBB )G BBB     WKHUH LV DQ\ XQFHUWDLQW\ LQ WKLV FDVH LV EHFDXVH DW RUDO
 :/  DW 
 G &LU 6HSW   KROGLQJ WKDW 7LWOH ,,
DFWLRQV IRU PRQH\ GDPDJHV PD\ EH EURXJKW E\ SODLQWLIIV ZKR FDQ
                                                                               DUJXPHQWRQH RUWZRPHPEHUVRIWKLVFRXUWPDQXIDFWXUHG
mHVWDEOLVK WKDW WKH 7LWOH ,, YLRODWLRQ ZDV PRWLYDWHG E\ GLVFULPLQDWRU\
                                                                               FRQIXVLRQ  7KH HTXDO SURWHFWLRQ WKHRU\ RI $'$
DQLPXV RU LOO ZLOO EDVHG RQ WKH SODLQWLIIjV GLVDELOLW\l VHH DOVR 7KRPSVRQ    DEURJDWLRQnWKH DUJXPHQW DGYDQFHG E\ 3RSRYLFKnIDLOHG
Y &RORUDGR  )G    WK &LU  VWDWLQJ SRVW        7KDW DYHQXH RI UHYHUVDO IRUHFORVHG WKH PDMRULW\ JDPHO\
*DUUHWW WKDW mWKLV FRXUW QRZ ZULWHV RQ D FOHDQ VODWH LQ DGGUHVVLQJ ZKHWKHU    FRQGXFWVDQHQGUXQDURXQGWKHSUHFHGHQWDQGDGYDQFHVLWV
7LWOH ,, RI WKH $'$ LV D YDOLG DEURJDWLRQ RI WKH VWDWHVj (OHYHQWK
                                                                               QHZWKHRU\EDVHGRQGXHSURFHVV*UDQWHGZKHQGHFLGLQJ
$PHQGPHQW LPPXQLW\l DQG KROGLQJ WKDW LW LV QRW
     , DOVR ILQG LQVWUXFWLYH WKH SURFHGXUDO KLVWRU\ RI 'DUH Y &DOLIRUQLD
                                                                               *DUUHWWWKH6XSUHPH&RXUWOHIWRSHQWKHTXHVWLRQRI7LWOH,,
 )G  WK &LU  FHUW GHQLHG  86   LQ           DQGZKHWKHULWDEURJDWHG(OHYHQWK$PHQGPHQWLPPXQLW\EXW
ZKLFK D GLYLGHG SDQHO RI WKH 1LQWK &LUFXLW QRWHG WKDW m&RQJUHVV PDGH           WKDWGRHVQRWJLYHOLFHQVHWRORZHUFRXUWVWRUHIUDPHDSSHOODWH
H[WHQVLYH IDFWXDO ILQGLQJV UHJDUGLQJ WKH ZLGHVSUHDG DUELWUDU\ DQG              LVVXHVRQUHKHDULQJLQRUGHUWRDYRLGUHVXOWVZLWKZKLFKWKH\
LQYLGLRXV GLVFULPLQDWLRQ ZKLFK GLVDEOHG SHRSOH IDFHl DQG KHOG WKDW             SHUVRQDOO\GLVDJUHH7KHHQEDQFSDQHOjVHIIRUWWRFUHDWHD
&RQJUHVV YDOLGO\ DEURJDWHG VWDWH VRYHUHLJQ LPPXQLW\ SXUVXDQW WR LWV
)RXUWHHQWK $PHQGPHQW SRZHUV LQ HQDFWLQJ 7LWOH ,, RI WKH $'$ ,G DW
                                                                               GLVSXWHZRUWK\RIUHFRQVLGHUDWLRQUHQGHUVWKHDGPRQLWLRQLQ
 7KH 6XSUHPH &RXUWjV GHQLDO RI FHUWLRUDUL LQ 'DUH FDPH D ZHHN             )HG5$SS3DQXOOLW\(QEDQFSDQHOVVKRXOGQRWFUHDWH
DIWHU WKH &RXUW DQQRXQFHG *DUUHWW                                             FRQIOLFWVPHUHO\WRDOORZWKHSURQRXQFHPHQWRIQHZODZ,I
    3RSRYLFKY&X\DKRJD                    1RV         1RV                        3RSRYLFKY&X\DKRJD              
      &RXQW\&RXUWHWDO                                                                                         &RXQW\&RXUWHWDO

                                ,,                                     H[WHQVLYHVWXG\DQGUHFRUGRIDSDWWHUQRIXQFRQVWLWXWLRQDO
                                                                        GLVFULPLQDWLRQ E\ WKH VWDWHV DJDLQVW LQGLYLGXDOV             ZLWK
  ,WLVWURXEOLQJWRSXWLWPLOGO\WKDWWKHVWURQJHVWDGYRFDF\        GLVDELOLWLHVLQWKHDUHDVFRYHUHGE\7LWOH,,7KHVHILQGLQJV
IRUWKHWKHRU\WKDWWKH'XH3URFHVV&ODXVHRIWKH)RXUWHHQWK            DSSHDU LQ WKH WH[W RI WKH VWDWXWH LWVHOI ZKHUH &RQJUHVV
$PHQGPHQWSURYLGHVVSHFLDOSURWHFWLRQIRUSDUHQWVLQFXVWRG\            VSHFLILFDOO\ QRWHG WKDW mGLVFULPLQDWLRQ DJDLQVW LQGLYLGXDOV
RUWHUPLQDWLRQSURFHHGLQJVFDPHIURPRQHRIWKHPHPEHUVRI              ZLWKGLVDELOLWLHVSHUVLVWVLQVXFKFULWLFDODUHDVDVHGXFDWLRQ
WKH FRXUW DW RUDO DUJXPHQW QRW WKH SDUWLHV DQG KDV QRZ         LQVWLWXWLRQDOL]DWLRQ    YRWLQJ DQG DFFHVV WR SXEOLF
EHFRPHWKHEDVLVIRUWKHFRXUWjVMXGJPHQWLQWKLVFDVH               VHUYLFHVl86&D7KHILQGLQJVDOVRDSSHDU
                                                                        LQWKHOHJLVODWLYHKLVWRU\RI7LWOH,,+5 5! 1 
   6LQFHWKHGXHSURFHVVWKHRU\LVDFRXUWFRQMXUHGUDWLRQDOH           SWDW6 5! 1 DW
IRU GHQ\LQJ 2KLR (OHYHQWK $PHQGPHQW LPPXQLW\ LW LV
DSSURSULDWHWRDVNZKHWKHUWKHFRXUWVKRXOGXSRQHQEDQF
UHKHDULQJDGGUHVVWKHGXHSURFHVVWKHRU\RI$'$DEURJDWLRQ                 
DWDOO7KHPHPEHUVRIWKHFRXUWDUHDOPRVWHYHQO\GLYLGHGRQ                 &RQJUHVV LWVHOI KHOG QR OHVV WKDQ WKLUWHHQ KHDULQJV LW DOVR FUHDWHG WKH
WKHFULWLFDOO\LPSRUWDQWLVVXHZHDUHGHFLGLQJZKHWKHULQ            7DVN )RUFH RQ WKH 5LJKWV DQG (PSRZHUPHQW RI $PHULFDQV ZLWK
                                                                        'LVDELOLWLHV m7DVN )RUFHl ZKLFK KHOG VL[W\WKUHH SXEOLF IRUXPV LQ HYHU\
7LWOH,,&RQJUHVVKDVYDOLGO\RYHUULGGHQWKHVWDWHVj(OHYHQWK          VWDWH WKDW ZHUH DWWHQGHG E\ WKRXVDQGV RI SHRSOH    *DUUHWW   86 DW 
$PHQGPHQWLPPXQLW\7KHLVVXHLVQRYHO7KHUHLVQRWD                 %UH\HU s GLVVHQWLQJ 7KH 7DVN )RUFH HYHQWXDOO\ VXEPLWWHG mVHYHUDO
VLQJOH DSSHOODWH FDVH RQ SRLQW LQ WKLV FLUFXLW RU HOVHZKHUH   WKRXVDQG GRFXPHQWVl WKDW HYLGHQFHG mPDVVLYH GLVFULPLQDWLRQ DQG
&HUWDLQO\ WKHUH LV FRQVLGHUDEOH LQWHUHVW LQ DGGUHVVLQJ WKH      VHJUHJDWLRQ LQ DOO DVSHFWV RI OLIHl DQG mWKH PRVW H[WUHPH LVRODWLRQ
PDMRULW\jV QRYHO GXH SURFHVV LVVXH EXW LQ P\ YLHZ WKH       XQHPSOR\PHQW SRYHUW\ SV\FKRORJLFDO DEXVH DQG SK\VLFDO GHSULYDWLRQ

SURSHU FDVH IRU GRLQJ WKDW LV RQH LQ ZKLFK WKH LVVXH LV                                           7$)) 2) 286( 200
                                                                        H[SHULHQFHG E\ DQ\ VHJPHQW RI RXU VRFLHW\l  6                +       &      
                                                                        21 '8& $1' $%25
                                                                            (           / 67 21* (*,6/$7,9( ,6725< 2) 8%
                                                                                                      &     /             +              3    /
DGGUHVVHGDQGGHFLGHGLQWKHORZHUFRXUWnRXUVDIWHUDOOLVD           2        +( 0(5,&$16 :,7+ ,6$%,/,7,(6 &7
                                                                        1   7      $                   '             $      &RPP
UHYLHZLQJFRXUWnDQGWKHQIXOO\EULHIHGDQGDUJXHGKHUH,                         (*,6 ,67
                                                                        3ULQW  m /       +     l
REMHFW VWURQJO\ WR WKH PDMRULW\jV GHFLVLRQ WR LQYHQW IRU WKH
SODLQWLIIDWKHRU\RIUHFRYHU\KHGLGQRWUDLVHEULHIRUDUJXH           
                                                                              ,Q FRQWUDVW WKH *DUUHWW &RXUW HPSKDVL]HG WKDW &RQJUHVV KDG
DQGWRZKLFKWKHGHIHQGDQWKDVQRWKDGDVXLWDEOHRSSRUWXQLW\           PHQWLRQHG WKH SULYDWH VHFWRU n EXW QRW WKH VWDWHV n LQ LWV OHJLVODWLYH
WRUHVSRQG                                                           ILQGLQJV DERXW HPSOR\PHQW GLVFULPLQDWLRQ DJDLQVW SHUVRQV ZLWK
                                                                        GLVDELOLWLHV  86 DW 

  7KLV GLVDSSURYDO LV QRW PHUHO\ D PDWWHU RI SHUVRQDO               
SUHIHUHQFH LW LV DV , VKDOO GHPRQVWUDWH D SRVLWLRQ ZHOO            )XUWKHUPRUH WKH FDVHODZ FRQWDLQV VRPH HYLGHQFH RI mH[WHQVLYH

VXSSRUWHGE\WKHDSSHOODWHUXOHVRISUDFWLFHDQGWKLVFRXUWjV           OLWLJDWLRQ DQG GLVFXVVLRQ RI WKH FRQVWLWXWLRQDO YLRODWLRQVl *DUUHWW 
                                                                        86 DW  .HQQHG\ s FRQFXUULQJ LQ WKH SURYLVLRQ RI SXEOLF VHUYLFHV
SUHFHGHQW                                                            WR WKH GLVDEOHG 6HH HJ /HDFK Y 6KHOE\ &RXQW\ 6KHULII  )G 
                                                                          WK &LU  ILIWHHQ SDUDSOHJLFV UHFHLYHG mGHSORUDEOH
                                 $                                     WUHDWPHQWl DW D FRXQW\ MDLO n WKH\ ZHUH QRW EDWKHG IRU VHYHUDO GD\V DQG
                                                                        IRUFHG WR UHPDLQ LQ WKHLU KXPDQ ZDVWH FHUW GHQLHG  86  
                                                                      3KLODGHOSKLD 3ROLFH 	 )LUH $VVjQ IRU +DQGLFDSSHG &KLOGUHQ ,QF Y &LW\
                                                                        RI 3KLODGHOSKLD  )G   G &LU  FLW\ DQG VWDWH GLG QRW
 (QEDQFSURFHHGLQJVDUHJRYHUQHGE\)HG5$SS3                YLRODWH WKH )RXUWHHQWK $PHQGPHQW LQ UHGXFLQJ RU HOLPLQDWLQJ VHUYLFHV WR
                                                                        PHQWDOO\ UHWDUGHG SHUVRQV OLYLQJ DW KRPH /D)DXW Y 6PLWK  )G 
ZKLFKVWDWHVLQSHUWLQHQWSDUW                                       WK &LU  SDUDSOHJLF LQPDWH ZDV GHQLHG DGHTXDWH WRLOHW
                                                                        IDFLOLWLHV IRU WKUHH PRQWKV DQG QHFHVVDU\ SK\VLFDO WKHUDS\ *DOODJKHU Y
     3RSRYLFKY&X\DKRJD                       1RV           1RV                   3RSRYLFKY&X\DKRJD          
       &RXQW\&RXUWHWDO                                                                                         &RXQW\&RXUWHWDO

   7KHIDFWWKDW7LWOH,,LPSOLFDWHVFRQVWLWXWLRQDOYLRODWLRQVLQ             Y2OVRQ86ZHUHVWHGRXUGHFLVLRQRQ
DUHDV UDQJLQJ IURP HGXFDWLRQ WR YRWLQJ DOVR VXJJHVWV WKDW             WKHHTXDOSURWHFWLRQDUJXPHQW
KHLJKWHQHGMXGLFLDOVFUXWLQ\XQGHUERWKWKH'XH3URFHVVDQG
(TXDO 3URWHFWLRQ &ODXVHV LV DSSURSULDWH  7LWOH ,,jV JHQHUDO            :H KHOG WKDW HTXDO SURWHFWLRQ ZDV QRW D FRQVWLWXWLRQDOO\
PDQGDWHFRYHUVDOOmRIWKHVHUYLFHVSURJUDPVRUDFWLYLWLHVRI               VXIILFLHQW EDVLV RQ ZKLFK WR UHVW WKH $'$jV DEURJDWLRQ RI
D SXEOLF HQWLW\l   86&    ,Q WKLV FDVH ZKLFK        (OHYHQWK $PHQGPHQW LPPXQLW\ UHDVRQLQJ WKDW VLQFH
LQYROYHV WKH ULJKW RI D KHDULQJLPSDLUHG SHUVRQ WR KDYH               JRYHUQPHQW FODVVLILFDWLRQV LQYROYLQJ GLVDEOHG LQGLYLGXDOV
DGHTXDWHKHDULQJDVVLVWDQFHLQDFKLOGFXVWRG\SURFHHGLQJWKH                UHFHLYHUDWLRQDOUHYLHZWKH$'$SURKLELWHGDPXFKEURDGHU
FRXUWFRQFOXGHVWKDWmWKHHVVHQWLDOFRQVWLWXWLRQDOULJKWVRXQGV               VZDWKRIFRQGXFWWKDQGLGWKH)RXUWHHQWK$PHQGPHQWjV(TXDO
PRVWFOHDUO\QRWLQHTXDOSURWHFWLRQEXWLQGXHSURFHVVl0DM               3URWHFWLRQ &ODXVH  7KH HTXDO SURWHFWLRQ UHDVRQLQJ RI RXU
RSDW+RZHYHULQILQGLQJZLGHVSUHDGXQFRQVWLWXWLRQDO                    GHFLVLRQ ZDV XOWLPDWHO\ DSSURYHG DQG DGRSWHG E\ WKH
GLVFULPLQDWLRQ DJDLQVW SHUVRQV ZLWK GLVDELOLWLHV &RQJUHVV               6XSUHPH &RXUW LQ %RDUG RI 7UXVWHHV RI WKH 8QLYHUVLW\ RI
KHDUGH[WHQVLYHWHVWLPRQ\QRWRQO\DERXWWKHVWDWHVjIDLOXUHWR               $ODEDPDY*DUUHWW86LQZKLFKWKH&RXUW
PDNHFRXUWURRPVDFFHVVLEOHWRDOOSHUVRQVEXWDOVRDERXWWKH                  KHOGWKDW&RQJUHVVGLGQRWYDOLGO\DEURJDWHVWDWHVj(OHYHQWK
VWDWHVj GLVFULPLQDWLRQ DJDLQVW WKH GLVDEOHG LQ DUHDV VXFK DV          $PHQGPHQWLPPXQLW\ZKHQLWSDVVHG7LWOH,RIWKH$'$
                                                                                 3RSRYLFKPRYHGIRUUHKHDULQJDQGDPDMRULW\RIWKLVFRXUWjV
                                                                              DFWLYH PHPEHUV DJUHHG WR UHKHDU WKH FDVH HQ EDQF  ,Q WKH
                                                                              LQWHULP WKH 'HSDUWPHQW RI sXVWLFH LQWHUYHQHG RQ EHKDOI RI
                                                                              3RSRYLFKDQGDQDPLFXVEULHIZDVVXEPLWWHGRQKLVEHKDOIE\
                                                                              WKH2KLR/HJDO5LJKWV6HUYLFH2/562GGO\E\WKHWLPH
                                                                              WKHSHWLWLRQIRUUHKHDULQJHQEDQFZDVJUDQWHGDQHZ$'$
                                                                              WKHRU\ ZDV EHLQJ DGYDQFHG QRW E\ 3RSRYLFK EXW E\ WKH
                                                                              DPLFXV DQG WKH LQWHUYHQRU  /DWHU DW WKH HQ EDQF KHDULQJ
                                                                              VRPHPHPEHUVRIWKHFRXUWLQTXLUHGRIFRXQVHOFRQFHUQLQJ
                                                                              WKH QRYHO DQG XQEULHIHG mGXH SURFHVVW\SHl WKHRU\ HYHQ
                                                                              WKRXJKWKHSDUWLHVKDGQRWDUJXHGLW$VDUHVXOWPXFKRIWKH
                                                                              DUJXPHQWEHIRUHWKHHQEDQFFRXUWGLIIHUHGPDUNHGO\IURPWKH
                                                                              HTXDO SURWHFWLRQ WKHRU\ WKH SDUWLHV KDG EULHIHG DQG DUJXHG
                                                                              EHIRUHWKHRULJLQDOSDQHODQGKDGDJDLQEULHIHGDQGDWWHPSWHG
3RQWLDF 6FK 'LVW   )G   WK &LU  VFKRROV GLG QRW
                                                                              WR DUJXH EHIRUH WKH HQ EDQF FRXUW  1HYHUWKHOHVV DW ZKDW
YLRODWH WKH )RXUWHHQWK $PHQGPHQW E\ IDLOLQJ WR SURYLGH mDGGLWLRQDO            VXUHO\ ZLOO FRPH DV D VXUSULVH WR WKH SDUWLHV WKH PDMRULW\
VSHFLDO VHUYLFHVl WR D GHDI DQG PHQWDOO\ KDQGLFDSSHG VWXGHQW ZKR ZDV          XQELGGHQVDYHIRUWKHXUJLQJRIDQDPLFXVDQGDQLQWHUYHQRU
HQUROOHG LQ VSHFLDO HGXFDWLRQ SURJUDPV 3DUULVK Y sRKQVRQ  )G         ILQGVWKDWLWLVWKURXJKHQIRUFHPHQWRIWKH'XH3URFHVV&ODXVH
   WK &LU  SULVRQ JXDUG UHSHDWHGO\ DVVDXOWHG WZR          RIWKH)RXUWHHQWK$PHQGPHQWDQGQRWDVWKHSDUWLHVWKRXJKW
SDUDSOHJLF LQPDWHV ZLWK D NQLIH FDXVHG WKHP WR VLW LQ WKHLU RZQ IHFHV DQG
WDXQWHG WKHP ZLWK UHPDUNV OLNH mFULSSOHG EDVWDUGl FI 3XVKNLQ Y 5HJHQWV
                                                                              WKH(TXDO3URWHFWLRQ&ODXVHWKDW&RQJUHVVKDVVXFFHVVIXOO\
RI 8QLY RI &RORUDGR  )G   WK &LU  GRFWRU
                                                                              DEURJDWHGWKHVWDWHVj(OHYHQWK$PHQGPHQWLPPXQLW\
DOOHJHG WKDW VWDWH XQLYHUVLW\ H[FOXGHG KLP IURP LWV 3V\FKLDWULF 5HVLGHQF\
3URJUDP LQ YLRODWLRQ RI WKH 5HKDELOLWDWLRQ $FW EHFDXVH KH VXIIHUHG IURP
PXOWLSOH VFOHURVLV
    3RSRYLFKY&X\DKRJD                     1RV         1RV                     3RSRYLFKY&X\DKRJD           
      &RXQW\&RXUWHWDO                                                                                       &RXQW\&RXUWHWDO

FRPELQDWLRQ RI D WHPSRUDU\ UHVWUDLQLQJ RUGHU DJDLQVW               YRWLQJ DQG HGXFDWLRQ ZKLFK FOHDUO\ LPSOLFDWH WKH (TXDO
3RSRYLFK RQ PRWLRQ E\ KLV H[ZLIH D UHIHUHHjV LOOQHVV          3URWHFWLRQ&ODXVH
PRWLRQVUHJDUGLQJ3RSRYLFKjVKHDULQJDFFRPPRGDWLRQDQG
XQH[SODLQHGVFKHGXOLQJGHOD\V                                            )LQDOO\ , EHOLHYH JLYHQ WKH H[WHQVLYH UHFRUG RI
                                                                         FRQVWLWXWLRQDO YLRODWLRQV LQ WKH VWDWHVj SURYLVLRQ RI SXEOLF
  )ROORZLQJDMXU\WULDO3RSRYLFKZDVDZDUGHGLQ               VHUYLFHVWRSHUVRQVZLWKGLVDELOLWLHVWKDW7LWOH,,LVDPRUH
FRPSHQVDWRU\GDPDJHV7KH'5'ILOHGSRVWWULDOPRWLRQV                 FRQJUXHQWDQGSURSRUWLRQDOUHPHG\WKDQ7LWOH,$OWKRXJK
ZKLFK ZLWK RQH H[FHSWLRQ ZHUH UHMHFWHG  7KH '5' WKHQ         7LWOH,,GRHVUHTXLUHWKHVWDWHVWRWDNHVRPHDIILUPDWLYHVWHSV
DSSHDOHGWRWKLVFRXUW                                                WR HQVXUH WKDW WKH GLVDEOHG KDYH DFFHVV WR JRYHUQPHQWDO
                                                                         SURJUDPVLWWDUJHWVGLVFULPLQDWLRQWKDWLVXQUHDVRQDEOH7LWOH
   ,Q LWV DSSHDO WKH '5' DGYDQFHG DUJXPHQWV EDVHG RQ            ,, UHTXLUHV UHDVRQDEOH PRGLILFDWLRQV RQO\ ZKHQ D GLVDEOHG
MXGLFLDOLPPXQLW\DQGWKHLQVXIILFLHQF\RIWKHORZHUFRXUWjV             LQGLYLGXDOLVRWKHUZLVHHOLJLEOHIRUDSXEOLFVHUYLFHDQGWKH
ILQGLQJV3RSRYLFKUHVSRQGHGWRHDFKRIWKRVHDUJXPHQWVLQ              PRGLILFDWLRQVZRXOGQRWIXQGDPHQWDOO\DOWHUWKHQDWXUHRIWKH
WXUQ  2QO\ LQ WKH '5'jV UHSO\ EULHI ZDV WKH LVVXH RI LWV    VHUYLFH7KHVWDWHVWKHUHIRUHPDLQWDLQWKHLUGLVFUHWLRQRYHU
(OHYHQWK $PHQGPHQW LPPXQLW\ UDLVHG  ,Q OLJKW RI WKH             WKH SURYLVLRQ RI SXEOLF VHUYLFHV VR ORQJ DV WKH\ GR QRW
REYLRXVLPSRUWDQFHRIWKH(OHYHQWK$PHQGPHQWLVVXHDQGWKH               DUELWUDULO\GLVFULPLQDWHDJDLQVWWKHGLVDEOHG,UHFRJQL]HWKDW
VSOLW LQ FLUFXLW DXWKRULW\ WKH SDQHOLVWV WKRXJKW WKLV            DVXEVHWRIGLVFULPLQDWRU\VWDWHDFWLRQPD\EHUDWLRQDOXQGHU
DEEUHYLDWHG DIWHUWKRXJKW UHIHUHQFH WR WKH (OHYHQWK                 WKH &RQVWLWXWLRQ EXW XQUHDVRQDEOH XQGHU 7LWOH ,,  ,Q RWKHU
$PHQGPHQWLPPXQLW\GHIHQVHZDVWURXEOHVRPHSDUWLFXODUO\                 ZRUGV 7LWOH ,, PD\ mSURKLELW>@ FRQGXFW ZKLFK LV QRW LWVHOI
VLQFH WKH SULQFLSOH RI VWDWH VRYHUHLJQW\ WKDW WKH (OHYHQWK       XQFRQVWLWXWLRQDO DQG LQWUXGH>@ LQWR µOHJLVODWLYH VSKHUHV RI
$PHQGPHQW FRGLILHV GLUHFWV XV WR FRQVLGHU FDUHIXOO\                DXWRQRP\SUHYLRXVO\UHVHUYHGWRWKH6WDWHVjl&LW\RI%RHUQH
OHJLVODWLYH DFWLRQV WKDW FXUE LWV SURWHFWLRQV  7R DVVLVW RXU   Y)ORUHV86TXRWLQJ)LW]SDWULFNY
HIIRUWWRUHDFKDQLQIRUPHGGHFLVLRQRQWKHPDWWHUDQGSURYLGH           %LW]HU86+RZHYHUWKLVSRVVLELOLW\
WKHSDUWLHVDIDLUKHDULQJZHWKHRULJLQDOSDQHOLVWVGLUHFWHG         GRHVQRWQHFHVVDULO\PHDQWKDW7LWOH,,H[FHHGV&RQJUHVVjV
WKH SDUWLHV WR VXEPLW OHWWHU EULHIV VSHFLILFDOO\ DGGUHVVLQJ       HQIRUFHPHQWSRZHUXQGHURIWKH)RXUWHHQWK$PHQGPHQW
(OHYHQWK$PHQGPHQWLPPXQLW\DQGWKH$'$:HGLGVR
DIWHUVDWLVI\LQJRXUVHOYHVWKDWLWLVZHOOVHWWOHGWKDW(OHYHQWK
$PHQGPHQW VWDWH VRYHUHLJQ LPPXQLW\ FRXOG SURSHUO\ EH                   
                                                                               6HH HJ 6 5(3 12  DW  FLWLQJ WHVWLPRQ\ DERXW VWDWH
UDLVHGIRUWKHILUVWWLPHRQDSSHDO3RSRYLFKY&X\DKRJD               GLVFULPLQDWLRQ LQ PDNLQJ SROOLQJ SODFHV DFFHVVLEOH WR WKH GLVDEOHG DQG
&RXQW\)GWK&LU                          IRUFLQJ YRWHV E\ DEVHQWHH EDOORW EHIRUH FDQGLGDWHV SDUWLFLSDWHG LQ NH\
                                                                         GHEDWHV  /(*,6 +,67  WKH FKDLUSHUVRQ RI WKH 5KRGH ,VODQG
  7KHSDUWLHVDUJXHGWKDW&RQJUHVVjVDEURJDWLRQRI(OHYHQWK              *RYHUQRUjV &RPPLVVLRQ RQ WKH +DQGLFDSSHG WHVWLILHG DERXW LPSHGLPHQWV
$PHQGPHQWLPPXQLW\UHVWHGRQFRQJUHVVLRQDOSURWHFWLRQRI                 WR D GLVDEOHG LQGLYLGXDOjV DELOLW\ WR UHJLVWHU DV D YRWHU DQG WR YRWH

WKH )RXUWHHQWK $PHQGPHQWjV HTXDO SURWHFWLRQ SULQFLSOH                  
1HLWKHUSDUW\VXJJHVWHGWKDW&RQJUHVVDFWHGWRHQIRUFHDQ\                     6HH HJ 6 5(3 12  DW  ILQGLQJ LOOXVWUDWLYH WKH

GXHSURFHVVSURWHFWLRQ,QOLJKWRIWKHDUJXPHQWEHIRUHWKH             WHVWLPRQ\ RI D SDUDSOHJLF ZKR mZDV SURPSWO\ UHIXVHG DGPLVVLRQ >WR WKH
                                                                         ORFDO SXEOLF VFKRRO@ EHFDXVH WKH SULQFLSDO UXOHG WKDW >VKH@ ZDV D ILUH
FRXUWDQGPLQGIXOWKDWIHGHUDOFRXUWVDUHIRUELGGHQWRLVVXH            KD]DUGl GXH WR KHU ZKHHOFKDLU  /(*,6 +,67  D OHJDOO\ EOLQG
DGYLVRU\RSLQLRQV86&RQVWDUW,,,FOVHH0RUULVRQ        VWXGHQW DW WKH 6WDWH 8QLYHUVLW\ RI 1HZ <RUN mKDG WR GURS D UHTXLUHG
                                                                         WKHRU\ FRXUVH EHFDXVH >VKH@ ZDV XQDEOH WR UHDG WKH SKRWRUHGXFHG VFRUH
                                                                         RI D %DFK FDQWDWDl
    3RSRYLFKY&X\DKRJD                  1RV        1RV                      3RSRYLFKY&X\DKRJD        
      &RXQW\&RXUWHWDO                                                                                    &RXQW\&RXUWHWDO

7KH6XSUHPH&RXUWKDVLQVWUXFWHGWKDW&RQJUHVVPD\HQDFW              BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
mUHDVRQDEO\ SURSK\ODFWLF OHJLVODWLRQl ZKHQ IDFHG ZLWK
m>G@LIILFXOWDQGLQWUDFWDEOHSUREOHPV>ZKLFK@RIWHQUHTXLUH           &21&855,1*,13$57',66(17,1*,13$57
SRZHUIXOUHPHGLHVl.LPHOY)ORULGD%GRI5HJHQWV             BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
86,QHQDFWLQJWKH$'$&RQJUHVVQRWHGWKDW
GLVFULPLQDWLRQ DJDLQVW LQGLYLGXDOV ZLWK GLVDELOLWLHV ZDV mD       5<$1&LUFXLWsXGJHFRQFXUULQJLQSDUWDQGGLVVHQWLQJLQ
VHULRXV DQG SHUYDVLYH VRFLDO SUREOHPl   86&             SDUW  , FRQFXU HQWLUHO\ LQ WKH PDMRULW\jV FRQFOXVLRQ WKDW
 D  7KH UHFRUG LQGLFDWHV WKDW WKH VWDWHV KDYH   &RQJUHVV GLG QRW YDOLGO\ DEURJDWH WKH VWDWHVj (OHYHQWK
GLVFULPLQDWHG DJDLQVW WKH GLVDEOHG LQ PDQ\ DVSHFWV RI         $PHQGPHQWLPPXQLW\ZKHQXQGHU7LWOH,,RIWKH$'$LW
JRYHUQPHQWDORSHUDWLRQVDQGWKDWWKH\PD\FRQWLQXHWRGRVR         DWWHPSWHGWRHQIRUFHWKH(TXDO3URWHFWLRQ&ODXVH%XWDV,
&RQIURQWHGZLWKWKLVUHFRUGRIXQFRQVWLWXWLRQDOWUHDWPHQW,         VKDOO H[SODLQ , VWURQJO\ GLVDJUHH WKDW LQ HQDFWLQJ 7LWOH ,,
FRQFOXGHWKDWWKHDFFRPPRGDWLRQVWKDW7LWOH,,UHTXLUHVDUH          &RQJUHVVYDOLGO\DEURJDWHGVWDWHVjLPPXQLW\IURPDOOHJHGGXH
QHFHVVDU\WRIXOILOO&RQJUHVVjVSXUSRVHmWRSURYLGHDFOHDUDQG      SURFHVVYLRODWLRQVRIWKHNLQGSODLQWLIIKDVEURXJKWsXVWDV
FRPSUHKHQVLYH QDWLRQDO PDQGDWH IRU WKH HOLPLQDWLRQ RI          &RQJUHVVGLGQRWYDOLGO\H[HUFLVHLWVFRQVWLWXWLRQDODXWKRULW\
GLVFULPLQDWLRQ DJDLQVW LQGLYLGXDOV ZLWK GLVDELOLWLHVl       XQGHURIWKH)RXUWHHQWK$PHQGPHQWZKHQLWVRXJKWLQ
86&E                                                7LWOH,,WRRYHUULGHVWDWHVj(OHYHQWK$PHQGPHQWLPPXQLW\
                                                                     IURPHTXDOSURWHFWLRQFODLPVLWOLNHZLVHIDLOHGWRGRVRZLWK
  )RUWKHIRUHJRLQJUHDVRQV,ZRXOGKROGWKDWWKH(OHYHQWK          UHVSHFWWRGXHSURFHVVFODLPV
$PHQGPHQWGRHVQRWEDU7LWOH,,DFWLRQVIRUPRQH\GDPDJHV
DJDLQVWWKHVWDWHVEDVHGRQYLRODWLRQVRIWKH(TXDO3URWHFWLRQ                                         ,
&ODXVH
                                                                       sRVHSK03RSRYLFKILOHGDFRPSODLQWLQDOOHJLQJWKDW
                                                                     WKH 'RPHVWLF 5HODWLRQV 'LYLVLRQ RI WKH &X\DKRJD &RXQW\
                                                                     &RXUWRI&RPPRQ3OHDV'5'GLVFULPLQDWHGDJDLQVWKLPLQ
                                                                     YLRODWLRQRI7LWOH,,RIWKH$PHULFDQVZLWK'LVDELOLWLHV$FW
                                                                     $'$86&3RSRYLFKDOVRDUJXHG
                                                                     WKDW WKH '5' UHWDOLDWHG DJDLQVW KLP DIWHU KH ILOHG D
                                                                     GLVFULPLQDWLRQFKDUJHDJDLQVWWKHFRXUWZLWKWKH8QLWHG6WDWHV
                                                                     'HSDUWPHQWRIsXVWLFH
                                                                       3RSRYLFKZKRVXIIHUVIURPSDUWLDOKHDULQJORVVFODLPHG
                                                                     WKDWWKH'5'YLRODWHG7LWOH,,ZKHQLWUHIXVHGWRSURYLGHKLP
                                                                     ZLWK UHDOWLPH FDSWLRQLQJ VHUYLFHV GXULQJ FXVWRG\ KHDULQJV
                                                                     FRQFHUQLQJKLVGDXJKWHU+HIXUWKHUFODLPHGWKDWWKH'5'jV
                                                                     HIIRUWWRDFFRPPRGDWHKLPE\SURYLGLQJDQ)0DPSOLILFDWLRQ
                                                                     V\VWHPZDVQRWUHDVRQDEOHEHFDXVHWKHV\VWHPjVKHDGSKRQHV
                                                                     KDGJLYHQKLPDQHDULQIHFWLRQ3RSRYLFKDOVRFRPSODLQHGRI
                                                                     QXPHURXV SURFHGXUDO GHOD\V ZKLFK FDXVHG WKH KHDULQJV WR
                                                                     GUDJ RQ RYHU IRXU \HDUV  7KH GHOD\V ZHUH FDXVHG E\ WKH