United States v. Randolph

5(&200(1'(' )25 3$57,$/7(;7 38%/,&$7,21  8QLWHG6WDWHVY 1RV 3XUVXDQW WR 6L[WK &LUFXLW 5XOH  5DQGROSKHWDO  (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU )LOH 1DPH DS FHUWDLQO\ FRXOG KDYH EHHQ  +H KDG VRPH KRSH WKDW WKH SURVHFXWRUVLQ7H[DVZRXOGFRQVLGHUWKHFDVHFRQFOXGHGDQG 81,7('67$7(6&28572)$33($/6 JRRQWRRWKHUEXVLQHVV,QWRGD\jVZRUOGRIFRQJHVWHGFRXUWV DQGKHDY\SURVHFXWRUFDVHORDGVWKLVZDVQRWDQXQUHDVRQDEOH )257+(6,;7+&,5&8,7 RULOOXVRU\KRSH7KH7H[DVSURVHFXWRUVFRXOGHDVLO\KDYH BBBBBBBBBBBBBBBBB IDLOHG WR JR WR WKH WURXEOH RI SURYLGLQJ PDWHULDO WR WKHLU FROOHDJXHVLQ7HQQHVVHH7KH7HQQHVVHHSURVHFXWRUVPLJKW KDYHGHFLGHGWKDWWKHGHIHQGDQWVKDGDOUHDG\mEHHQSXQLVKHG HQRXJKl DQG WKDW WKH\ KDG ELJJHU RU RWKHU ILVK WR IU\ LQ 81,7(' 67$7(6 2) $0(5,&$ ; 7HQQHVVHH  7KH ZKROH FDVH PLJKW KDYH EHHQ ORVW LQ WKH 3ODLQWLII$SSHOOHH  VKXIIOHLQ7H[DVEHIRUHDQ\RWKHUVWHSVZHUHWDNHQ7KHVH  ZHUHDOOSRVVLELOLWLHVWKDW5DQGROSKJRWWKHDGYDQWDJHRI  1RV Y   $VHYHQWVWXUQHGRXWWKHVHDGYDQWDJHVGLGQRWPDWHULDOL]H !  EXW ZKHQ D GHIHQGDQW LQ WKLV FDVH UHSUHVHQWHG DQG IXOO\ 0(/9,1 /(( 5$1'2/3+ s5  DGYLVHGE\FRXQVHOHQWHUVLQWRDSOHDDJUHHPHQWWKHUHLVQR  $1*(/$ %$//$5'  UHTXLUHPHQW RI HLWKHU FRQWUDFW RU FRQVWLWXWLRQDO ODZ WKDW D  $17+21< 3(77,6  EDUJDLQEDVHGRQFRQWLQJHQWIXWXUHHYHQWVZLOOWXUQRXWWRKLV  DQG&('5,&  EHQHILW7KHFRXUWVWDWHVVXSUDDWWKDW5DQGROSKKDGD  mUHDVRQDEOHH[SHFWDWLRQWKDWWKHSOHDDJUHHPHQWSURWHFWHGKLP s2+1621    IURPSURVHFXWLRQERWKZLWKLQ>WKH1RUWKHUQ'LVWULFWRI 'HIHQGDQWV$SSHOODQWV  7H[DV@ DQG LQ DGGLWLRQ ZLWKRXW WKDW MXULVGLFWLRQ XQOHVV 1 IRXQGHGRQDQLQYHVWLJDWLRQLQGHSHQGHQWRIWKDWSHUIRUPHGE\ WKH7H[DQDXWKRULWLHVl%XWWKHUHFRUGFRQWDLQVQRVXSSRUW $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW RWKHUWKDQ5DQGROSKjVSRVWKRFDVVHUWLRQVWKDWKHKDGVXFKDQ IRUWKH:HVWHUQ'LVWULFWRI7HQQHVVHHDWsDFNVRQ H[SHFWDWLRQDQGQRVXSSRUWZKDWVRHYHUIRUWKHLGHDWKDWLW 1RnsDPHV'7RGG'LVWULFWsXGJH ZDVUHDVRQDEOH $UJXHGDQG6XEPLWWHGsDQXDU\ )LQDOO\WRWKHH[WHQWWKDWWKLVFRXUWVKRXOGUXOHEDVHGVROHO\ RQRXUYLHZRIWKHHTXLW\RIWKHVLWXDWLRQ5DQGROSKGRHVQRW 'HFLGHGDQG)LOHG$XJXVW GHVHUYHVXFKDVRIWHQLQJRIWKHODZ+HLQHIIHFWHQWHUHG LQWR WKH SOHD DJUHHPHQW ZLWK XQFOHDQ KDQGV QDPHO\ WKH %HIRUH*8<5<$1DQG%2**6&LUFXLWsXGJHV JXLOW\NQRZOHGJHWKDWKHZDVLQIDFWDELJJHUILVKWKDQWKH 7H[DV DXWKRULWLHV WRRN KLP IRU  ,W ZDV SULPDULO\ WKHLU BBBBBBBBBBBBBBBBB UHDOL]DWLRQRIWKLVFRQFHDOPHQWDQGRXWUDJHRYHUWKHOHQLHQF\ 5DQGROSK REWDLQHG IRU KLPVHOI WKDW SURPSWHG WKHP WR &2816(/ H[HUFLVHWKHLUULJKWXQGHUWKHSOHDDJUHHPHQWDQGWRFRQWDFW $5*8('5LFKDUG+0RUJDQsU3RQWLDF0LFKLJDQ0 WKH7HQQHVVHHDXWKRULWLHV,WKHUHIRUHUHVSHFWIXOO\',66(17 'LDQQH 6PRWKHUV 08(//(5  6027+(56 3//& sDFNVRQ 7HQQHVVHH 0LFKDHO / :HLQPDQ 7$780   8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY  5DQGROSKHWDO   5DQGROSKHWDO 7$780 +HQGHUVRQ 7HQQHVVHH IRU $SSHOODQWV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 21%5,()5LFKDUG+0RUJDQsU3RQWLDF0LFKLJDQ0 'LDQQH 6PRWKHUV 08(//(5  6027+(56 3//& &21&855,1*,13$57',66(17,1*,13$57 sDFNVRQ 7HQQHVVHH 0LFKDHO / :HLQPDQ 7$780 BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 7$780 +HQGHUVRQ 7HQQHVVHH 3DWULFN ) 0DUWLQ +$5'(( 0$57,1 s$<1(6  ,9< 3$ sDFNVRQ %2**6&LUFXLWsXGJHFRQFXUULQJLQSDUWDQGGLVVHQWLQJ 7HQQHVVHHIRU$SSHOODQWVsHQQLIHU/:HEEHU$66,67$17 LQSDUW,FRQFXULQDOORIsXGJH5\DQjVRSLQLRQIRUWKHFRXUW 81,7('67$7(6$77251(<0HPSKLV7HQQHVVHHIRU H[FHSW LWV GLVSRVLWLRQ RI WKH SURVHFXWLRQ RI 5DQGROSK LQ $SSHOOHH 7HQQHVVHH  7KH FRXUW LV TXLWH FRUUHFWVXSUD DW  ZKHQ LW VWDWHVWKDWm5DQGROSKjVµDPELJXLW\jDUJXPHQWLVDVXQIRFXVHG 5<$1 s GHOLYHUHG WKH RSLQLRQ RI WKH FRXUW  *8< s DV LW LV XQSHUVXDVLYHl  7KH FRXUW WKHQ JRHV RQ WR H[SODLQ S GHOLYHUHGDVHSDUDWHFRQFXUULQJRSLQLRQ%2**6s FRUUHFWO\ KRZ WKH SODLQ ODQJXDJH RI 5DQGROSKjV  SOHD SS GHOLYHUHGDVHSDUDWHRSLQLRQFRQFXUULQJLQSDUW DJUHHPHQWPHDQVWKDWWKHJRYHUQPHQWGLGQRWYLRODWHWKHSOHD DQGGLVVHQWLQJLQSDUW DJUHHPHQWZKHQWKH8QLWHG6WDWHV$WWRUQH\LQWKH:HVWHUQ 'LVWULFWRI7HQQHVVHHSURVHFXWHG5DQGROSKDVKHZDVIXOO\ BBBBBBBBBBBBBBBBB IUHHWRGRXQGHUWKHSOHDDJUHHPHQW+RZHYHU,GLVDJUHHZLWK WKH FRXUWjV KROGLQJ WKDW mLW LV VLPSO\ XQIDLUl IRU VXFK D 23,1,21 SURVHFXWLRQWRWDNHSODFHZKHQLWLVSURPSWHGE\LQIRUPDWLRQ BBBBBBBBBBBBBBBBB IXUQLVKHG E\ WKH 7H[DV DXWKRULWLHV RU WKDW VXFK D 5<$1&LUFXLWsXGJH'HIHQGDQWV0HOYLQ/HH5DQGROSK GHWHUPLQDWLRQRIXQIDLUQHVVFUHDWHVDELQGLQJUXOHRIODZDQG sU $QJHOD %DOODUG $QWKRQ\ 3HWWLV DQG &HGULF sRKQVRQ ,WKHUHIRUHGLVVHQW DSSHDOIURPWKHLUFRQYLFWLRQVIRUFRQVSLUDF\WRSRVVHVVZLWK 5XG\DUG.LSOLQJFDSWXUHGWKHFRXUWjVDWWLWXGHSHUIHFWO\LQ LQWHQWWRGLVWULEXWH6FKHGXOH,DQG6FKHGXOH,,QDUFRWLFVLQ KLVSRHP1RUPDQDQG6D[RQ YLRODWLRQRI86&† D  $OOIRXUDPRQJRWKHUV ZHUHDOOHJHGWREHPHPEHUVRIDFRQVSLUDF\HQJDJHGLQWKH 7KH6D[RQLVQRWOLNHXV1RUPDQV+HPDQQHUVDUHQRW WUDQVSRUWDWLRQRIFRFDLQHSRZGHUFRFDLQHEDVHDQGPDULMXDQD VRSROLWH EHWZHHQ'DOODV7H[DVDQGsDFNVRQ7HQQHVVHH %XWKHQHYHUPHDQVDQ\WKLQJVHULRXVWLOOKHWDONVDERXW MXVWLFHDQGULJKW 5DQGROSK KDG SUHYLRXVO\ EHHQ SURVHFXWHG LQ D IHGHUDO :KHQKHVWDQGVOLNHDQR[LQWKHIXUURZZLWKKLVVXOOHQ GLVWULFWFRXUWLQ7H[DVIRUDFWLRQVLQIXUWKHUDQFHRIWKHVDPH VHWH\HVRQ\RXURZQ FRQVSLUDF\LQWKDWFDVHKHHQWHUHGLQWRDSOHDDJUHHPHQWZLWK $QGJUXPEOHVm7KLVLVQjWIDLUGHDOLQJl0\VRQOHDYH WKHJRYHUQPHQW+HQRZFODLPVWKHHDUOLHUSOHDDJUHHPHQW WKH6D[RQDORQH VKRXOG KDYH SUHFOXGHG KLV SURVHFXWLRQ LQ 7HQQHVVHH  ,Q DGGLWLRQ 5DQGROSK DVVHUWV D GRXEOH MHRSDUG\ FODLP DQG D :KLOHWKLVLVJHQHUDOO\DQDGPLUDEOHVHQWLPHQW,WKLQNLWLV FODLP RI HYLGHQWLDU\ HUURU %DOODUG DUJXHV QXPHURXV PLVDSSOLHGLQWKLVFDVH HYLGHQWLDU\VHQWHQFLQJDQGRWKHUHUURUV3HWWLVDUJXHVWZR VHQWHQFLQJ HUURUV DQG sRKQVRQ DUJXHV ERWK DQ HYLGHQWLDU\ 7R EHJLQ ZLWK 5DQGROSK REYLRXVO\ GLG VHFXUH VRPH HUURUDQGWKDWWKHGLVWULFWFRXUWHUUHGLQGHQ\LQJKLVUHTXHVWIRU EHQHILW+HZDVQRWSURVHFXWHGIXUWKHU LQ7H[DVZKHQKH DVSHFLDOYHUGLFW  8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY  5DQGROSKHWDO   5DQGROSKHWDO BBBBBBBBBBBBBBBBBBBBBBB )RU UHDVRQV ZH VKDOO GLVFXVV ZH ZLOO 9$&$7( WKH FRQYLFWLRQDQGVHQWHQFHRI5DQGROSK9$&$7(sRKQVRQjV &21&855(1&( VHQWHQFH DQG 5(0$1' KLV FDVH IRU UHVHQWHQFLQJ DQG BBBBBBBBBBBBBBBBBBBBBBB $)),50WKHFRQYLFWLRQVDQGVHQWHQFHVRI%DOODUGDQG3HWWLV *8<&LUFXLWsXGJHFRQFXUULQJ,FRQFXULQWKHFRXUWjV %HFDXVHLVVXHVRISUHFHGHQWLDOLPSRUWDQFHDULVHRQO\ZLWK RSLQLRQ EXW ZULWH VHSDUDWHO\ WR PDNH LW FOHDU WKDW P\ UHJDUG WR GHIHQGDQWV 5DQGROSK DQG s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nPDLQO\ FRFDLQHSRZGHUDQGFRFDLQHEDVHEXWRFFDVLRQDOO\PDULMXDQD DV ZHOOnDQG 5DQGROSK ZRXOG SURYLGH WKH PDUNHW VSHFLILFDOO\ FRQQHFWLRQV WR GUXJ UHWDLOHUV LQ sDFNVRQ 7HQQHVVHH  5DQGROSKjV 7HQQHVVHH FRQQHFWLRQV ZHUH GHIHQGDQWV3HWWLVDQGsRKQVRQZKRDUHFRXVLQVWR5DQGROSKjV FKLOGKRRGIULHQGDQGFRFRQVSLUDWRUsRKQQ\0DFN%XVK 7KH FRQVSLUDF\ LQYROYHG LQ DGGLWLRQ WR %UHZHU DQG 5DQGROSK LQ 7H[DV DQG %XVK 3HWWLV DQG sRKQVRQ LQ 7HQQHVVHH DW OHDVW WKH IROORZLQJ LQGLYLGXDOV  GHIHQGDQW %DOODUG0RQLFD0LFKHOOH,QIDQWH5D\ROD%XUFKDQGsDPHV sRKQVRQ DOO RI ZKRP ZHUH GULYHUV RU mPXOHVl ZKR WUDQVSRUWHGGUXJVIURP'DOODVWRsDFNVRQE\DXWRPRELOHDQG )RVWHU'DYLV&RUULH+DUEHUWDQG7HUUDQFH/RWWXQGHUOLQJVWR %UHZHULQ'DOODV 7ULDOWHVWLPRQ\UHYHDOHGWKDWYDULRXVRIWKHmPXOHVlPDGH QXPHURXVWULSVIURP'DOODVWRsDFNVRQ7HQQHVVHHEHWZHHQ $XJXVW  DQG $SULO  IRU WKH SXUSRVH RI GHOLYHULQJ  8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY  5DQGROSKHWDO   5DQGROSKHWDO GUXJV  2Q HDFK WULS EHWZHHQ WZR DQG ILYH NLORJUDPV RI VHQWHQFLQJFRQVHTXHQFHVLWWKHJRYHUQPHQWPXVWDOVRVHHN FRFDLQHSRZGHURUFRFDLQHEDVHZHUHWUDQVSRUWHG DVSHFLDOYHUGLFW+RZHYHUQRWKLQJLQ'DOHSXUSRUWVWRELQG IXWXUHFRXUWVH[FOXVLYHO\WRWKHUHPHG\JUDQWHGLQWKDWFDVH 7KH EHJLQQLQJ RI WKH HQG RI WKLV OXFUDWLYH QDUFRWLFV WKDWLVDUHPDQGJLYLQJWKHJRYHUQPHQWWKHRSWLRQWRmSHUPLWl HQWHUSULVHFDPHGXULQJD0DUFKmUXQlIURP'DOODV WKHGHIHQGDQWWREHVHQWHQFHGIRUWKHOHVVHUSHQDOW\RUIRUFH WRsDFNVRQ$FFRUGLQJWR%UHZHUjVWHVWLPRQ\%UHZHU/RWW KLPWRVXEPLWWRDQHZWULDOsRKQVRQjVSURVHFXWRUVXQOLNH 'DYLV DQG +DUEHUW PHW 5DQGROSK %XVK DQG %DOODUG LQ D WKRVHRIWKH'DOHGHIHQGDQWKDYHDOUHDG\RQFHGHFOLQHGWR &UDFNHU%DUUHOUHVWDXUDQWLQ'H6RWR7H[DV%UHZHUjVJURXS VHHN D VSHFLDO YHUGLFW DIWHU EHLQJ SODFHG RQ QRWLFH WKDW DUULYHG LQ %UHZHUjV ZLIHjV sDJXDU ZLWK WKUHH NLORJUDPV RI sRKQVRQLQWHQGHGWRDUJXHWKDWKHFRXOGEHKHOGUHVSRQVLEOH FRFDLQHSRZGHUDQGNLORJUDPVRIFRFDLQHEDVHZKLOH RQO\IRUWKHOHVVJUDYHREMHFWRIWKHFRQVSLUDF\ZLWKZKLFKKH 5DQGROSK %XVK DQG %DOODUG DUULYHG VHSDUDWHO\ LQ WZR ZDVFKDUJHGDQGWKHUHIRUHLWZRXOGEHXQMXVWWRUHZDUGWKHLU YHKLFOHV5DQGROSKjV6XEXUEDQDQG&DGLOODF7KHSODQZDV HIIRUWVWRVHQWHQFHKLPLPSURSHUO\ZLWKDQRWKHUmELWHDWWKH IRU%DOODUGWRGULYHWKHsDJXDUZLWKWKHQDUFRWLFVWRsDFNVRQ DSSOHlE\SURYLGLQJWKHPZLWKD'DOHW\SHHOHFWLRQ IRU5DQGROSK%XVK'DYLVDQG+DUEHUWWRIROORZ%DOODUGLQ WKH6XEXUEDQDQGIRU%UHZHUDQG/RWWWRUHWXUQWR'DOODVLQ )RUWKHVHUHDVRQVZHZLOOYDFDWHWKHVHQWHQFHLPSRVHGRQ WKH&DGLOODF%UHZHUDQG/RWWOHIWDVSODQQHGEXWYHU\VKRUWO\ sRKQVRQDQGUHPDQGKLVFDVHIRUUHVHQWHQFLQJZLWKGLUHFWLRQV DIWHU WKH MRXUQH\ EHJDQ %DOODUG QRWLFHG WKDW WKHUH ZHUH QR WKDWKHEHVHQWHQFHGIRUFRQVSLUDF\WRSRVVHVVPDULMXDQDWKH LQVXUDQFHSDSHUVIRU WKHsDJXDUDQGVREDONHGDWGULYLQJLW FRQWUROOHG VXEVWDQFH FDUU\LQJ WKH PRUH OHQLHQW VWDWXWRULO\ IXUWKHU7KHQDUFRWLFVZHUHWKHQWUDQVIHUUHGWRWKH6XEXUEDQ SUHVFULEHGVHQWHQFH ZKLFK%DOODUGZRXOGGULYHZLWK5DQGROSKDVKHUSDVVHQJHU %XVK'DYLVDQG+DUEHUWUHWXUQHGWR'DOODVLQWKHsDJXDUWR ,,, H[FKDQJH LW IRU 5DQGROSKjV &DGLOODF EHIRUH UHVXPLQJ WKH GULYHWRsDFNVRQ )RU WKH UHDVRQV GHVFULEHG DERYH ZH 9$&$7( WKH FRQYLFWLRQ DQG VHQWHQFH RI 5DQGROSK  :H $)),50 WKH 6KRUWO\ WKHUHDIWHU WKH VFKHPH FDPH XQUDYHOHG  7KH FRQYLFWLRQ EXW 9$&$7( WKH VHQWHQFH RI s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jV RFFXSDQWV ZHUH UHOHDVHG ZKHUHXSRQ WKH\ UHWXUQHG WR %UHZHUjVKRPHLQ'DOODV $ 5DQGROSKDQG%DOODUGZHUHSURVHFXWHGLQWKH8QLWHG6WDWHV 'LVWULFW&RXUWIRUWKH(DVWHUQ'LVWULFWRI7H[DV$WWKDWWULDO  8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY  5DQGROSKHWDO   5DQGROSKHWDO EHHQIRXQGJXLOW\RIDPDULMXDQDRQO\FRQVSLUDF\86& WKH GLVWULFW MXGJH LQ FRQQHFWLRQ ZLWK KLV UXOLQJ LQ WKH † E  ' 1HYHUWKHOHVVsRKQVRQjVPRWLRQZDVGHQLHG GHIHQGDQWVjPRWLRQWRVXSSUHVVPDGHWKHIROORZLQJILQGLQJV DQGKHUHFHLYHGDVHQWHQFHRIPRQWKV RIIDFWZLWKUHJDUGWRWKH6XOSKXU6SULQJVVWRSDQGVHDUFKRI WKH6XEXUEDQ 7KLV FRXUW KDV DOUHDG\ KDG RFFDVLRQ WR H[DPLQH WKH VLWXDWLRQLQZKLFKDGHIHQGDQWLVFRQYLFWHGXQGHUDJHQHUDO 3ROLFH RIILFHUV LQ D PDUNHG SROLFH YHKLFOH VDZ WKH YHUGLFWIRUFRQVSLUDF\WRSRVVHVVDFRQWUROOHGVXEVWDQFHZKHQ GHIHQGDQWVj mYDQl PRPHQWDULO\ FURVV D ODQH PDUNHU DQG PRUH WKDQ RQH VXEVWDQFH LV LQYROYHG DQG WKH VXEVWDQFHV WKHUHXSRQSXOOHGDORQJVLGHWKHYDQWRORRNDWLWVRFFXSDQWV LQYROYHGFDUU\GLIIHUHQWVHQWHQFLQJFRQVHTXHQFHV6HH8QLWHG :KHQ5DQGROSKDQG%DOODUGIDLOHGWRPDNHH\HFRQWDFWZLWK 6WDWHVY'DOH)G WK&LU 7KH'DOHFRXUW WKHPWKHRIILFHUVSXOOHGLQIURQWRIWKHYDQDQGVORZHGWR KHOGWKDWLWZDVmSODLQHUURUl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mPDQLIHVW ODQH DQG LPSHGLQJ WUDIILF  9DULRXV FROORTXLHV RFFXUUHG PLVFDUULDJHRIMXVWLFHl6HH)HG5&ULP3 E 8QLWHG EHWZHHQ WKH RIILFHUV DQG WKH GHIHQGDQWV GXULQJ ZKLFK 6WDWHVY&R[)G WK&LU 'DOHjVFDVH 5DQGROSK SURYLGHG D IDOVH QDPH DQG YDULRXV IDOVH VRFLDO ZDV UHPDQGHG WR WKH GLVWULFW FRXUW IRU D GHFLVLRQ HLWKHU WR VHFXULW\QXPEHUVEHIRUHILQDOO\DGPLWWLQJKLVUHDOQDPH7KH VHQWHQFH 'DOH DV WKRXJK KH KDG EHHQ FRQYLFWHG RI D RIILFHUV UHSHDWHGO\ DVNHG IRU SHUPLVVLRQ WR VHDUFK WKH PDULMXDQDRQO\FRQVSLUDF\RUHOVHWRRUGHUDQHZWULDODWWKH GHIHQGDQWVj YHKLFOH EXW ERWK GHIHQGDQWV UHIXVHG  7KH SURVHFXWLRQjVHOHFWLRQ GHIHQGDQWVZHUHKHOGDWWKHVFHQHZKLOHDQRIILFHUZHQWWRD GLVWULFWDWWRUQH\jVRIILFHLQRUGHUWRREWDLQDVHDUFKZDUUDQW sRKQVRQjVVLWXDWLRQGLIIHUVIURP'DOHjVRIFRXUVHLQWKDW EXWWKHZDUUDQWZDVUHIXVHGRQWKHJURXQGWKDWWKHUHZDVQR sRKQVRQjVFRXQVHOH[SOLFLWO\UHTXHVWHGDVSHFLDOYHUGLFWRQWKH SUREDEOHFDXVHWRMXVWLI\DVHDUFK$SSUR[LPDWHO\RQHKRXU TXHVWLRQ ZKHWKHU sRKQVRQ KDG FRQVSLUHG WR GLVWULEXWH DIWHU WKH RULJLQDO VWRS D GUXJVQLIILQJ GRJ DQG LWV KDQGOHU PDULMXDQD FRFDLQH RU ERWK  +HUH WKH WULDO MXGJH DQG WKH ZHUHEURXJKWWRWKHVFHQH6RRQWKHUHDIWHULWEHJDQWRUDLQ JRYHUQPHQWZHUHRQQRWLFHWKDWsRKQVRQZLVKHGWRKDYHWKH DQGWKHZKROHFDYDOFDGHPRYHGWRWKH6XOSKXU6SULQJVSROLFH RSSRUWXQLW\ WR FRQYLQFH D MXU\ WKDW KLV SDUWLFLSDWLRQ LQ WKH VWDWLRQWRFRQWLQXHWKHSURFHHGLQJVXQGHUDFDQRS\5DQGROSK FRQVSLUDF\UHODWHGRQO\WRPDULMXDQD%\GHQ\LQJsRKQVRQjV ZDVDUUHVWHGIRUIDOVHO\LGHQWLI\LQJKLPVHOIWRDSROLFHRIILFHU UHTXHVWWKHWULDOFRXUWHIIHFWLYHO\GHQLHGs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† F  WKHIHGHUDODQWLEULEHU\VWDWXWH%HFDXVHWKLVYLHZ   DQDO\VLV WR WKH GHIHQGDQWVj PRWLRQ WR VXSSUHVV WKH KDV EHHQ H[SORGHG HYHQ LQ WKH 7HQWK &LUFXLW ZH QHHG QRW HYLGHQFH7KLVQHFHVVLWDWHGDWZRVWHSLQTXLU\ILUVWLQWRWKH H[SORUHWKHDUJXPHQWLQIXOO UHDVRQDEOHQHVVRIWKHLQLWLDOVWRSDQGWKHQLQWRWKHUHODWHGQHVV RIWKHVHDUFKWRWKHLQLWLDOVWRSjVSXUSRVH 6LQJOHWRQ,ZDVUHYHUVHGHQEDQFLQWKH7HQWK&LUFXLWDQG WKHRULJLQDO6LQJOHWRQKROGLQJZDVH[SOLFLWO\UHMHFWHGLQWKLV 7KHMXGJHIRXQGWKDWWKHmLPSHGLQJWUDIILFlMXVWLILFDWLRQ FLUFXLWLQ8QLWHG6WDWHVY:DUH)G WK&LU  ZDVLQYDOLGEHFDXVHWKHSUHVHQFHRIWKHYDQLQWKHOHIWODQH FHUWGHQLHG86  7KH:DUHFRXUWQRWHG ZKHUHLWWUDYHOHGDWQHDUO\WKHVSHHGOLPLWZDVODUJHO\DUHVXOW WKDWm>W@KHSURVHFXWRULDOSUHURJDWLYHWRUHFRPPHQGOHQLHQF\ RIWKHRIILFHUVjRZQDFWLRQV+HDOVRKHOGWKDWWKHGHIHQGDQWVj LQH[FKDQJHIRUWHVWLPRQ\GDWHVEDFNWRWKHFRPPRQODZLQ IDLOXUHWRPDNHH\HFRQWDFWZLWKWKHRIILFHUVZKLOHGULYLQJRQ (QJODQGDQGKDVEHHQUHFRJQL]HGDQGDSSURYHGE\&RQJUHVV WKHKLJKZD\FRXOGQRWEHFRQVLGHUHGVXVSLFLRXVDQGLQGHHG WKH FRXUWV DQG WKH 6HQWHQFLQJ &RPPLVVLRQ RI WKH 8QLWHG VKRXOGQRWHYHQKDYHEHHQFRQVLGHUHGDVDQHOHPHQWLQWKH 6WDWHVl,GDW mWRWDOLW\RIWKHFLUFXPVWDQFHVl+RZHYHUKHIRXQGWKDWWKH mIDLOXUH WR PDLQWDLQ D ODQHl MXVWLILFDWLRQ ZDV VXIILFLHQW WR 7KH:DUHFRXUWKHOGWKDWWKHZRUGm:KRHYHUl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jV GXUDWLRQ EXW LQ WKLV LQVWDQFH WKH PDWWHU RI VROLFLWHG E\ WKH JRYHUQPHQW LQ H[FKDQJH IRU SURPLVHV RI 5DQGROSKjVLGHQWLW\DQGWKHTXHVWLRQZKHWKHUWKHYDQPLJKW OHQLHQF\LQVHQWHQFLQJ6HHLGDW KDYHEHHQVWROHQZHUHFRPSOHWHO\VHWWOHGDWOHDVWPLQXWHV EHIRUH WKH GRJ DOHUWHG DQG SURYLGHG SUREDEOH FDXVH IRU D 7KLVFKDOOHQJHLVZLWKRXWPHULW VHDUFK RI WKH YHKLFOH  7KH MXGJH KHOG WKDW WKLV ZDV DQ XQUHDVRQDEOH OHQJWK RI WLPH DQG FRQVHTXHQWO\ JUDQWHG 6SHFLDO9HUGLFW5HTXHVW 5DQGROSKjVDQG%DOODUGjVPRWLRQVWRVXSSUHVVWKHHYLGHQFHRI DOO HYHQWV WDNLQJ SODFH DIWHU 5DQGROSK UHYHDOHG KLV WUXH 'XULQJ SURFHHGLQJV EHORZ sRKQVRQ UHTXHVWHG WKDW WKH LGHQWLW\7KLVLQFOXGHGWKHGLVFRYHU\RIWKHQDUFRWLFV GLVWULFWFRXUWVXEPLWDVSHFLDOYHUGLFWIRUPWRWKHMXU\IRUWKH SXUSRVH RI DVFHUWDLQLQJ ZKHWKHU sRKQVRQ ZDV JXLOW\ RI $IWHU WKH HYLGHQFH IURP WKH 6XOSKXU 6SULQJV VWRS ZDV FRQVSLUDF\ WR SRVVHVV ZLWK LQWHQW WR GHOLYHU FRFDLQH RU VXSSUHVVHG5DQGROSKHQWHUHGLQWRDSOHDDJUHHPHQWZLWKWKH ZKHWKHU KLV SDUW LQ WKH FRQVSLUDF\ SHUWDLQHG PHUHO\ WR JRYHUQPHQWZKHUHE\KHSOHDGHGJXLOW\WRWKHOHVVHUFKDUJHRI PDULMXDQD  7KH UDWLRQDOH IRU WKH UHTXHVW LV WKDW sRKQVRQ XVLQJDWHOHSKRQLFGHYLFHWRIDFLOLWDWHDQDUFRWLFVWUDQVDFWLRQ ZRXOGKDYHEHQHILWWHGIURPDPRQWKVHQWHQFLQJFDSKDGKH  8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY  5DQGROSKHWDO   5DQGROSKHWDO FRQVWLWXWLRQDO JXDUDQWHH RI GXH SURFHVV UHTXLUHV XV WR JLYH LQYLRODWLRQRI86&† E DQGDJUHHGWRFRRSHUDWH ZHLJKW WR 5DQGROSKjV UHDVRQDEOH H[SHFWDWLRQ WKDW WKH SOHD ZLWK WKH JRYHUQPHQWjV LQYHVWLJDWLRQ  )RU LWV SDUW WKH DJUHHPHQWSURWHFWHGKLPIURPSURVHFXWLRQIRUWKHFRQVSLUDF\ JRYHUQPHQW DJUHHG WR GURS WKH FKDUJH RI FRQVSLUDF\ WR FKDUJHZLWKZKLFKKHZDVLQGLFWHGLQWKH1RUWKHUQ'LVWULFWRI SRVVHVVZLWKWKHLQWHQWWRGHOLYHUD6FKHGXOH,,QDUFRWLF7KH 7H[DVERWKZLWKLQWKDWMXULVGLFWLRQDVSURYLGHGLQWKHWH[WRI JRYHUQPHQW DOVR SURPLVHG mQRW WR IXUWKHU SURVHFXWH WKH WKHSOHDDJUHHPHQWDQGLQDGGLWLRQZLWKRXWWKDWMXULVGLFWLRQ GHIHQGDQW IRU DQ\ RWKHU RIIHQVHV RI ZKLFK LW PD\ KDYH XQOHVV IRXQGHG RQ DQ LQYHVWLJDWLRQ LQGHSHQGHQW RI WKDW NQRZOHGJH SULRU WR VHQWHQFLQJl EXW WKH VDPH SDUDJUDSK SHUIRUPHGE\WKH7H[DQDXWKRULWLHV%XWDVZHNQRZWKH H[SUHVVO\ OLPLWHG WKH DJUHHPHQW WR mWKH 8QLWHG 6WDWHV 7HQQHVVHHDXWKRULWLHVZHUHHQWLUHO\GHSHQGHQWXSRQWKH7H[DQ $WWRUQH\jV2IILFHIRUWKH1RUWKHUQ'LVWULFWRI7H[DVDQG>GLG@ LQYHVWLJDWLRQ'UXJ(QIRUFHPHQW$GPLQLVWUDWLRQ$JHQW%LOO\ QRW ELQG DQ\ RWKHU IHGHUDO VWDWH RU ORFDO SURVHFXWLQJ sRH 0XQG\ ZKR UDQ WKH 7HQQHVVHH LQYHVWLJDWLRQ WHVWLILHG DXWKRULWLHVl,QsXQH5DQGROSKUHFHLYHGDVHQWHQFHRI WKDWKHNQHZQRWKLQJDERXWWKH'DOODVHQGRIWKHFRQVSLUDF\  PRQWKVj LPSULVRQPHQW WKH PD[LPXP DYDLODEOH IRU WKH XQWLO '($ $JHQW sHIIUH\ *UHHQ ZKR UDQ WKH 7H[DV FKDUJHWRZKLFKKHSOHDGHG LQYHVWLJDWLRQWROGKLVRIILFH DERXWLWZKLFKRFFXUUHGDIWHU 5DQGROSK%UHZHUDQGRWKHUVEHJDQWRFRRSHUDWH $IWHU 5DQGROSK FRPSOLHG ZLWK WKH WHUPV RI KLV SOHD DJUHHPHQW E\ SURYLGLQJ WKH JRYHUQPHQW ZLWK FRPSOHWH )RUWKHVHUHDVRQVWKHH[LJHQFLHVRIGXHSURFHVVDQGWKH LQIRUPDWLRQDVWRKLVNQRZOHGJHRIWKHFRQVSLUDF\DQGKLVUROH RSHUDWLRQRIWKHIXQGDPHQWDOFDQRQVRIFRQWUDFWFRQVWUXFWLRQ LQ LW WKH 7H[DV SURVHFXWRUV HYLGHQWO\ IHOW 5DQGROSK ZDV D FRPSHOXVWRWKHFRQFOXVLRQWKDW5DQGROSKjVSURVHFXWLRQLQ mELJJHUILVKlWKDQWKH\KDGWKHUHWRIRUHVXVSHFWHG7KH\WKHQ 7HQQHVVHH ZDV HQWLUHO\ EDUUHG E\ WKH SOHD DJUHHPHQW KH FRQWDFWHGWKHLUFRXQWHUSDUWVLQ7HQQHVVHHDQGSURYLGHGWKHP HQWHUHG LQWR LQ WKH 1RUWKHUQ 'LVWULFW RI 7H[DV  +DYLQJ VR ZLWK DOO WKH LQIRUPDWLRQ REWDLQHG DV D UHVXOW RI WKH 7H[DQ KHOGZHQHHGQRWDGGUHVV5DQGROSKjVUHPDLQLQJDUJXPHQWV LQYHVWLJDWLRQ % %sRKQVRQ 2Q1RYHPEHUWKHFDVHQRZRQDSSHDOEHIRUHWKLV sRKQVRQDSSHDOVRQWZRJURXQGV  WKDWWKHGLVWULFWFRXUW FRXUW EHJDQ ZKHQ 5DQGROSK 3HWWLV sRKQVRQ %XVK DQG HUUHG LQ DGPLWWLQJ WHVWLPRQ\ SURFXUHG E\ SURVHFXWRUV LQ ,QIDQWHZHUHLQGLFWHGLQWKH:HVWHUQ'LVWULFWRI7HQQHVVHH H[FKDQJHIRUUHGXFWLRQVRUSURPLVHVRIUHGXFWLRQVLQWHUPVRI ,Q$XJXVWDVXSHUVHGLQJLQGLFWPHQWFKDUJHG5DQGROSK LQFDUFHUDWLRQLQYLRODWLRQRI86&† F DQG  WKDW %DOODUG3HWWLVsRKQVRQ%XVK,QIDQWHDQG%XUFKZLWKRQH WKH GLVWULFW FRXUW HUUHG LQ GHQ\LQJ KLV UHTXHVW IRU D VSHFLDO FRXQW RI FRQVSLUDF\ WR SRVVHVV ZLWK LQWHQW WR GLVWULEXWH D YHUGLFW:HZLOODGGUHVVWKHVHLVVXHVVHSDUDWHO\ 6FKHGXOH,QDUFRWLFDQGRQHFRXQWRIFRQVSLUDF\ZLWKLQWHQWWR GLVWULEXWH D 6FKHGXOH ,, QDUFRWLF ERWK LQ YLRODWLRQ RI  )HGHUDO$QWLEULEHU\6WDWXWH 86& †  D    3HWWLV %XVK DQG %XUFK DOO SOHDGHG JXLOW\  ,QIDQWH DEVFRQGHG DQG KHU ZKHUHDERXWV UHPDLQ 7RVXSSRUWKLVILUVWDUJXPHQWsRKQVRQUHOLHVRQWKH7HQWK XQNQRZQ7KHUHPDLQLQJGHIHQGDQWVZHQWWRWULDO &LUFXLWjVVKRUWOLYHGGHFLVLRQLQ8QLWHG6WDWHVY6LQJOHWRQ )G WK&LU  6LQJOHWRQ, UHYjGHQEDQF 5DQGROSKjVDQG%DOODUGjVFDVHVZHUHVHYHUHGIURPWKRVHRI 8QLWHG6WDWHVY6LQJOHWRQ)G WK&LU FHUW WKHLUFRGHIHQGDQWVDQGWKH\ZHUHWULHGMRLQWO\EXWVHSDUDWHO\ GHQLHG6&W   6LQJOHWRQ,, 7KHDUJXPHQW  8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY  5DQGROSKHWDO   5DQGROSKHWDO IURPWKHLUDOOHJHGFRFRQVSLUDWRUV%DOODUGILOHGDPRWLRQWKDW IXQGDPHQWDO SULQFLSOHV RI FRQVWLWXWLRQDO IDLUQHVV GR QRW KHUFDVHEHVHYHUHG IURP 5DQGROSKjVEXWWKLVPRWLRQZDV SHUPLWXVWRDELGHWKLVSDWHQWO\XQMXVWUHVXOW GHQLHG $GHIHQGDQWLQ5DQGROSKjVSRVLWLRQLVHQWLWOHGWRSUHVXPH sRKQVRQUHTXHVWHGWKDWDVSHFLDOYHUGLFWIRUPEHVXEPLWWHG WKDW D SOHD DJUHHPHQW ZRXOG FRQIHU VRPH EHQHILW RQ KLP WRWKHMXU\WRDVFHUWDLQZKHWKHUKHZDVJXLOW\RIFRQVSLULQJWR (YHQLIWKH1RUWKHUQ'LVWULFWRI7H[DVDORQHZDVERXQGE\WKH SRVVHVV FRFDLQH D 6FKHGXOH , QDUFRWLF RU PDULMXDQD D DJUHHPHQWVXFKDGHIHQGDQWFRXOGUHDVRQDEO\LQIHUWKDWWKH 6FKHGXOH,,QDUFRWLF7KHGLVWULFWMXGJHGHQLHGWKLVUHTXHVW UHVXOWVRIWKH1RUWKHUQ'LVWULFWjVSURVHFXWRUVjLQYHVWLJDWLRQ VWDWLQJWKDWmWKHUHZDVRQHFRQVSLUDF\WKDWRQRFFDVLRQV ZRXOG QRW EH KDQGHG RYHU WR SURVHFXWRUV IURP RWKHU UHVXOWHGLQWKHGLVWULEXWLRQRIHDFKRIWKHWKUHHGUXJVDOOHJHGl MXULVGLFWLRQV QRW ERXQG E\ WKH DJUHHPHQW  7KLV LQIHUHQFH ZRXOG KROG WUXH ZLWK UHJDUG RQO\ WR RIIHQVHV WKH 1RUWKHUQ 5DQGROSK%DOODUGDQGsRKQVRQZHUHIRXQGJXLOW\DIWHUD 'LVWULFW RI 7H[DV SURVHFXWRUV NQHZ DERXW DW WKH WLPH WKH\ MXU\ WULDO  5DQGROSK UHFHLYHG D VHQWHQFH RI  PRQWKV HQWHUHG LQWR WKH DJUHHPHQW ZLWK 5DQGROSK WKH 7H[DV %DOODUGRIPRQWKVDQGsRKQVRQRIPRQWKV3HWWLV SURVHFXWRUV ZRXOG QRW RI FRXUVH EH EDUUHG IURP VKDULQJ UHFHLYHGDVHQWHQFHRIPRQWKVDIWHUKLVJXLOW\SOHD$OO LQIRUPDWLRQ ZLWK RWKHU MXULVGLFWLRQV FRQFHUQLQJ QHZO\ IRXUGHIHQGDQWVEURXJKWWLPHO\DSSHDOV GLVFRYHUHGRIIHQVHVMXVWDVWKH\ZRXOGQRWEHEDUUHGIURP SURVHFXWLQJ5DQGROSKWKHPVHOYHVIRURIIHQVHVWKH\OHDUQHGRI ,, RQO\ DIWHU KLV FRRSHUDWLRQ ZLWK WKH JRYHUQPHQW  ,QGHHG VKRXOG WKLV UHDVRQDEOH LQIHUHQFH SURYH IDOVH WKHQ WKH $5DQGROSK DJUHHPHQW5DQGROSKHQWHUHGLQWRFRXOGSURYLGHQREHQHILWEXW RQO\ GHWULPHQW WR WKH GHIHQGDQW DQG LV WKXV DQ 5DQGROSKEULQJVWKUHHDVVLJQPHQWVRIHUURU  WKDWKLV XQFRQVFLRQDEOHFRQWUDFWDQGXQHQIRUFHDEOH SURVHFXWLRQLQ7HQQHVVHHZDVZURQJIXOLQWKDWLWVKRXOGKDYH EHHQHQWLUHO\EDUUHGE\WKHSOHDDJUHHPHQWKHHQWHUHGLQWR 7KHUHTXLUHPHQWWKDWDGHIHQGDQWEHDIIRUGHGGXHSURFHVV ZLWK WKH JRYHUQPHQW LQ WKH 1RUWKHUQ 'LVWULFW RI 7H[DV RIODZQHFHVVLWDWHVWKDW5DQGROSKjVUHDVRQDEOHH[SHFWDWLRQRI  WKDWKLVSURVHFXWLRQLQ7HQQHVVHHYLRODWHGWKHSURKLELWLRQ EHQHILW IURP WKH SOHD DJUHHPHQW EH UHVSHFWHG IRU LW LV D DJDLQVWGRXEOHMHRSDUG\LQOLJKWRIKLVSUHYLRXVSURVHFXWLRQLQ YLRODWLRQ RI GXH SURFHVV WR KROG D GHIHQGDQW WR DQ 7H[DVDQG  WKDWWKH7HQQHVVHHGLVWULFWFRXUWHUUHGLQWKH XQFRQVFLRQDEOHDJUHHPHQWLQWKHDEVHQFHRISURRIRIKLVIXOO\ GHJUHH WR ZKLFK LW JDYH HIIHFW WR WKH 7H[DV GLVWULFW FRXUWjV LQIRUPHGFRQVHQWWRWKHULVNWKDWWKHEDUJDLQHGDZD\FRXQWRI RUGHUWKDWHYLGHQFHIURPWKH6XOSKXU6SULQJVWUDIILFVWRSEH WKHLQGLFWPHQWPLJKWUHWXUQOLNH+\GUDjVKHDGWKHVWURQJHU VXSSUHVVHG%HFDXVHZHDJUHHZLWKKLVILUVWDVVLJQPHQWRI IRUKDYLQJEHHQRQFHFXWRII HUURUnDOWKRXJKQRWZLWKDOORIWKHDUJXPHQWVKHHQOLVWVLQLWV VXSSRUWn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jV SURPLVH  7KH FRQVWUXHG DJDLQVW WKH JRYHUQPHQW  6HH 8QLWHG 6WDWHV Y  8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY  5DQGROSKHWDO   5DQGROSKHWDO $VLQWHUSUHWHGE\WKHGLVWULFWFRXUWIRUWKH:HVWHUQ'LVWULFW sRKQVRQ)G WK&LU %XWWKDWGRHVQRW RI7HQQHVVHHWKHHIIHFWRIWKH7H[DVDJUHHPHQWLVWKDWWKH OHDGXVWRWKHFRQFOXVLRQIRUZKLFK5DQGROSKDUJXHV7KH JRYHUQPHQWFRXOGEDUJDLQZLWK5DQGROSKH[WUDFWDEHQHILW SDUDJUDSK FRQWDLQLQJ WKH JRYHUQPHQWj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jVFRRSHUDWLRQ3XUVXDQWWR†%RIWKH DQG WKHQ EHLQJ SURVHFXWHG LQ 7HQQHVVHH ZDV WKDW WKH 8QLWHG 6WDWHV 6HQWHQFLQJ *XLGHOLQHV WKH JRYHUQPHQW SURVHFXWRUV LQ 7HQQHVVHH KDG WKH DGGLWLRQDO EHQHILW RI DOVR DJUHHV WKDW DQ\ VHOILQFULPLQDWLQJ LQIRUPDWLRQ 5DQGROSKjV IXOO FRRSHUDWLRQ ZKLOH 5DQGROSK KDG WKH SURYLGHG SXUVXDQW WR WKLV DJUHHPHQW ZLOO QRW EH XVHG DGGLWLRQDOGHWULPHQWRIWKH7H[DVJXLOW\SOHDDQGFRQYLFWLRQ DJDLQVW WKH GHIHQGDQW LQ GHWHUPLQLQJ KLV DSSOLFDEOH IRU WKH WHOHSKRQH FKDUJH LQ KLV FULPLQDO UHFRUG QHLWKHU RI JXLGHOLQHUDQJH7KLVDJUHHPHQWLVOLPLWHGWRWKH8QLWHG ZKLFKDGYDQWDJHVWKH7H[DVSURVHFXWRUVZRXOGKDYHHQMR\HG 6WDWHV $WWRUQH\jV 2IILFH IRU WKH 1RUWKHUQ 'LVWULFW RI KDG5DQGROSKUHIXVHGWKHEDUJDLQKHZDVRIIHUHGDQGFKRVHQ 7H[DVDQGGRHVQRWELQGDQ\RWKHUIHGHUDOVWDWHRUORFDO WRJRWRWULDO SURVHFXWLQJDXWKRULWLHV ,QKLV7HQQHVVHHSURVHFXWLRQ5DQGROSKjV7H[DVFRQYLFWLRQ 5DQGROSKjVmDPELJXLW\lDUJXPHQWLVDVXQIRFXVHGDVLWLV ZDV XVHG LQ WKH FRPSXWDWLRQ RI KLV RIIHQVH OHYHO IRU XQSHUVXDVLYH$VZHXQGHUVWDQGLW5DQGROSKLVVD\LQJWKDW VHQWHQFLQJSXUSRVHVWKHDPRXQWRIQDUFRWLFVLQYROYHGLQWKH WKH ODQJXDJH RI WKH TXRWHG SRUWLRQ RI WKH DJUHHPHQW LV WHOHSKRQHRIIHQVHZDVLQFOXGHGDWVHQWHQFLQJLQ7HQQHVVHHDV DPELJXRXVEHFDXVHWKHUHIHUHQFHVWRmWKH*RYHUQPHQWlDQG EHLQJLQYROYHGLQDUHODWHGRIIHQVH+RZHYHUDUXOHZKLFK mWKH8QLWHG6WDWHV$WWRUQH\jV2IILFHlDQGSDUWLFXODUO\WKH ZRXOGSHUPLWIHGHUDOSURVHFXWRUVLQDVHFRQGMXULVGLFWLRQWR PDQQHU LQ ZKLFK WKH SURYLVLRQV RI WKH DJUHHPHQW DUH DFFHSW WKH IUXLWV RI DQ LQYHVWLJDWLRQ SHUIRUPHG LQ D ILUVW VHTXHQFHGOHDYHLWXQFOHDUZKHWKHU5DQGROSKjVmGHDOlLVZLWK MXULVGLFWLRQZLWKRXWVXEVWDQWLDOLQYHVWLJDWLRQRIWKHLURZQDQG WKHIHGHUDOJRYHUQPHQWJHQHUDOO\RUZLWKWKH86$WWRUQH\LQ NQRZLQJ WKDW SURVHFXWLRQ RI D VSHFLILF RIIHQVH LQ WKH ILUVW WKH1RUWKHUQ'LVWULFWRI7H[DV MXULVGLFWLRQnKHUHWKHFRQVSLUDF\FKDUJHnZDVEORFNHGE\D SOHDDJUHHPHQWWKDWWKHILUVWMXULVGLFWLRQjVSURVHFXWRUVZHUH 7KLV LPSUHFLVH ODQJXDJH 5DQGROSK DUJXHV PXVW EH VHHNLQJWRDYRLGTXLWHDVLGHIURPEHLQJPDQLIHVWO\XQIDLU FRQVWUXHGDJDLQVWWKHJRYHUQPHQWDQGWKHUHIRUHLQIDYRURI ZRXOGDOORZWKHSOHDDJUHHPHQWWREULQJVWLOOIXUWKHUGHWULPHQW 5DQGROSKjVLQWHUSUHWDWLRQWKDWWKHODQJXDJHRIWKHDJUHHPHQW WRDGHIHQGDQWVXFKDV5DQGROSK,WZRXOGSHUPLWXVHRIWKH SUHFOXGHGWKH7HQQHVVHHIHGHUDOFRXUWSURVHFXWLRQ FRQYLFWLRQ IRU WKH FKDUJH SOHDGHG WR LQ WKH ILUVW MXULVGLFWLRQnKHUH WKH WHOHSKRQH RIIHQVHnWR LPSHDFK WKH ,WLVWUXHWKDWWKH8QLWHG6WDWHV$WWRUQH\jV2IILFHIRUWKH GHIHQGDQWjV WHVWLPRQ\ DW WULDO LQ WKH VHFRQG FDVH DQG WR 1RUWKHUQ'LVWULFWRI7H[DVLVUHIHUUHGWRZLWKLQWKHDJUHHPHQW DXJPHQW KLV FULPLQDO KLVWRU\ DW VHQWHQFLQJ  7KH PRVW DVmWKH8QLWHG6WDWHVRI$PHULFDlDQGDVmWKH*RYHUQPHQWl  8QLWHG6WDWHVY 1RV 1RV 8QLWHG6WDWHVY  5DQGROSKHWDO   5DQGROSKHWDO EXWWKLVLVDZLGHVSUHDGDQGFXVWRPDU\SUDFWLFHQRWFDOFXODWHG EH HLWKHU RI WKH SDUWLHV WR FRPPHUFLDO FRQWUDFWV  IRU WR JLYH ULVH WR FRQIXVLRQ LQ D GHIHQGDQW UHSUHVHQWHG E\ LPSUHFLVLRQVRUDPELJXLWLHVLQWKHSOHDDJUHHPHQWVl FRXQVHO,WLVDOVRWUXHWKDWWKHODQJXDJHOLPLWLQJWKHHIIHFWRI WKHSOHDDJUHHPHQWWRWKH1RUWKHUQ'LVWULFWRI7H[DVFRXOG sRKQVRQ  )G DW  FLWDWLRQV RPLWWHG   $PRQJ WKH KDYHEHHQEHWWHUSODFHGZLWKLQWKHVWUXFWXUHRIWKHGRFXPHQW FRQVWLWXWLRQDOFRQFHUQVUHIHUUHGWRDUHWKRVHSHUWDLQLQJWRWKH VR DV WR EH ERWK PRUH VDOLHQW DQG PRUH FOHDU LQ LWV HIIHFW GXH SURFHVV FODXVH RI WKH )LIWK $PHQGPHQW  7KH 8QLWHG 1HYHUWKHOHVV XQGHU DQ\ UHDVRQDEOH LQWHUSUHWDWLRQ RI WKH 6WDWHV6XSUHPH&RXUWKDVVWDWHGWKDWZKHUHWKHFRQVHQVXDO GRFXPHQW DV D ZKROH WKH OLPLWLQJ ODQJXDJH FDQ RQO\ EH QDWXUHRIDSOHDDJUHHPHQWLVFDOOHGLQWRTXHVWLRQnZKHUHmWKH RSHUDWLYHZLWKUHJDUGWRWKHWRWDOLW\RIWKHDJUHHPHQW GHIHQGDQWZDVQRWIDLUO\DSSULVHGRILWVFRQVHTXHQFHVlnLWFDQ EHDWWDFNHGXQGHUWKHGXHSURFHVVFODXVH0DEU\YsRKQVRQ +RZHYHU 5DQGROSK LGHQWLILHV DQ LVVXH RI PXFK JUHDWHU 86   GLIILFXOW\ZKHQKHDUJXHVWKDWZKDWHYHUWKHWHFKQLFDOQLFHWLHV WKDW JRYHUQ WKH FRQWUDFWXDO PHDQLQJ RI WKH SOHD DJUHHPHQW 7KHSOHDDJUHHPHQW5DQGROSKHQWHUHGLQWRLQ7H[DVZDVD ODQJXDJH LW LV VLPSO\ XQIDLU IRU WKH JRYHUQPHQW WR H[WUDFW FRQWUDFWZLWKRXWEHQHILWRUDGYDQWDJHWRKLPnLQGHHGDVZH XVHIXO LQIRUPDWLRQ DQG D JXLOW\ SOHD IURP 5DQGROSK LQ VKDOOH[SODLQLWFRXOGRQO\EULQJKLPGHWULPHQWnDQGDVVXFK H[FKDQJHIRUDSURPLVHQRWWRSURVHFXWHKLPIXUWKHUDQGWKHQ ZDVRIIHQVLYHERWKWRWKHIXQGDPHQWDOFRPPRQODZFDQRQVRI WRGRVRDQ\ZD\ FRQWUDFWFRQVWUXFWLRQDQGWRWKHFRQVWLWXWLRQDOJXDUDQWHHRI GXHSURFHVV,QWKHDJUHHPHQW5DQGROSKSURPLVHGERWKWR 7REHVXUHm>S@OHDDJUHHPHQWVDUHFRQWUDFWXDOLQQDWXUH,Q SOHDG JXLOW\ WR WKH FULPH RI XVLQJ D WHOHSKRQLF GHYLFH WR LQWHUSUHWLQJ DQG HQIRUFLQJ WKHP ZH DUH WR XVH WUDGLWLRQDO IDFLOLWDWHDQDUFRWLFVWUDQVDFWLRQDQGWRmFRRSHUDWHZLWKWKH SULQFLSOHVRIFRQWUDFWODZl8QLWHG6WDWHVY5RELVRQ JRYHUQPHQWE\JLYLQJWUXWKIXODQGFRPSOHWHLQIRUPDWLRQDQG )G WK&LU +RZHYHUWKH\DUHPRUHWKDQ RU >VLF@ WHVWLPRQ\ FRQFHUQLQJ KLV SDUWLFLSDWLRQ LQ DQG WKDW,Q6DQWREHOORY1HZE@RWKFRQVWLWXWLRQDODQGVXSHUYLVRU\FRQFHUQVUHTXLUH mUHPDLQLQJ FRXQW>@l WKH 7H[DV SURVHFXWRUV KDG DJUHHG WR KROGLQJ WKH JRYHUQPHQW WR D JUHDWHU GHJUHH RI GLVPLVV UHVSRQVLELOLW\WKDQWKHGHIHQGDQW RUSRVVLEO\WKDQZRXOG