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 DS 81,7('67$7(6&28572)$33($/6 )257+(6,;7+&,5&8,7 BBBBBBBBBBBBBBBBB &+$5/(6 1257+523 ; 3HWLWLRQHU$SSHOOHH 1R Y ! '$9,' 75,33(77:DUGHQ 5HVSRQGHQW$SSHOODQW 1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQDW%D\&LW\ 1R n9LFWRULD$5REHUWV'LVWULFWsXGJH $UJXHG $SULO 'HFLGHGDQG)LOHG 6HSWHPEHU %HIRUH %2**6DQG&/$<&LUFXLWsXGJHV *:,1 'LVWULFWsXGJH BBBBBBBBBBBBBBBBB &2816(/ $5*8(' sHIIUH\:&DPLQVN\&2817<2):$<1( 3526(&8725j62)),&('HWURLW0LFKLJDQIRU$SSHOODQW 'DYLG $ 0RUDQ 67$7( $33(//$7( '()(1'(5 7KH +RQRUDEOH sDPHV 6 *ZLQ 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH 1RUWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ 1RUWKURSY7ULSSHWW 1R 1R 1RUWKURSY7ULSSHWW 2)),&( 'HWURLW 0LFKLJDQ IRU $SSHOOHH 21 %5,() ,W DSSHDUV WR PH WKDW LQ JUDQWLQJ WKH ZULW WKH FRXUW KDV sHIIUH\ : &DPLQVN\ &2817< 2) :$<1( ILOWHUHG WKH IDFWXDO UHFRUG WKURXJK WKH OHQV RI WKH FXUUHQW 3526(&8725j62)),&('HWURLW0LFKLJDQIRU$SSHOODQW DVVHUWLRQVRIWKHSHWLWLRQHUDQGFRQWUDGLFWHG0RUULVRQjVDQG 5RQDOG ( 6WHLQEHUJ 67$7( $33(//$7( '()(1'(5 6WULFNODQGjV6L[WK$PHQGPHQWMXULVSUXGHQFHDVZHOODVWKH 2)),&('HWURLW0LFKLJDQIRU$SSHOOHH PRUHUHFHQWWHDFKLQJRI:LOOLDPVY7D\ORUDVWROLPLWVRQRXU UHYLHZ RI VWDWH MXGLFLDO GHFLVLRQV +DG HLWKHU RI P\ *:,1'sGHOLYHUHGWKHRSLQLRQRIWKHFRXUWLQZKLFK FROOHDJXHV UHSUHVHQWHG SHWLWLRQHU KH PLJKW ZHOO KDYH &/$< s MRLQHG %2**6 s SS GHOLYHUHG D VXFFHHGHG LQ VXSSUHVVLQJ WKH HYLGHQFH WKDW OHG WR KLV VHSDUDWHGLVVHQWLQJRSLQLRQ FRQYLFWLRQ8QIRUWXQDWHO\IRUSHWLWLRQHUZHDUHQRWFDOOHG XSRQWRGHFLGHVROHO\LIWKHUHZDVHUURULQZKDWZDVGRQHE\ BBBBBBBBBBBBBBBBB 2IILFHUV&ROOLQVDQGsDFNVRQ$WWRUQH\%UDYHUPDQRUHYHQ WKH0LFKLJDQMXGLFLDOV\VWHPPXFKOHVVZKHWKHUZHFRXOG 23,1,21 KDYHGRQHEHWWHU8QGHU$('3$WKHQHFHVVDU\LQIHUHQFHRI BBBBBBBBBBBBBBBBB WKHFRXUWjVRSLQLRQLVWKDWDOOUHDVRQDEOHFRXUWVZRXOGILQG %UDYHUPDQ mJURVVO\ LQFRPSHWHQWl LQ EHOLHYLQJ KLV FOLHQWjV *:,1'LVWULFWsXGJH,QWKLVFDVH5HVSRQGHQW:DUGHQ FODLPWKDWKH IHOW QR FRPSXOVLRQWRDFFHGHWRWKHRIILFHUVj 'DYLG7ULSSHWWDSSHDOVWKHGLVWULFWFRXUWjVJUDQWRIDZULWRI UHTXHVWV7KLVLVDFOLHQWZKRDOVRREOLJLQJO\YROXQWHHUHGWKH KDEHDVFRUSXVWR3HWLWLRQHU&KDUOHV1RUWKURSSXUVXDQWWR LQIRUPDWLRQWKDWKHKDGmEXGlKLGGHQLQKLVVRFNLQUHVSRQVH 86&,QJUDQWLQJ1RUWKURSjVSHWLWLRQWKHGLVWULFW WR D SUR IRUPD UHTXHVW DERXW ZKHWKHU KH KDG DQ\ GUXJV FRXUWIRXQG1RUWKURSKDGEHHQGHQLHGKLV6L[WK$PHQGPHQW :KDWHYHUZHPD\WKLQNDERXW0U%UDYHUPDQjVRYHUDOOOHJDO ULJKW WR WKH HIIHFWLYH DVVLVWDQFH RI FRXQVHO $OWKRXJK IRU DFXPHQ KH ZDV FHUWDLQO\ LQ WKH EHVW SRVLWLRQ WR DVVHVV GLIIHUHQWUHDVRQVWKDQWKRVHUHOLHGXSRQE\WKHGLVWULFWFRXUW 0U1RUWKURSj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jV UHMHFWLRQ RI WKLV FODLP 1RUWKURSY7ULSSHWW 1R 1R 1RUWKURSY7ULSSHWW 1RUWKURSWROGKLVDWWRUQH\WKDWKHZDVDVNHGWRDSSURDFK 1RUWKURSVD\VKLVWULDOFRXQVHOVKRXOGKDYHPRYHGWRVXSSUHVV WKHRIILFHUVDFRQYHUVDWLRQRFFXUUHGEHWZHHQWKHRIILFHUVDQG WKHFRFDLQHHYLGHQFHRIIHUHGDJDLQVWKLPDWWULDO WKDWRQHRIWKHPDVNHG1RUWKURSWRHPSW\KLVSRFNHWVmLIKH ZRXOGl1RUWKURSVDLGmVXUHlDQGGLGVR *LQWKHU+UjJ,DW 2Q $XJXVW DQ DQRQ\PRXV FDOOHU LQIRUPHG WKH s$ %UDYHUPDQPDGHFOHDUKLVmSHUVSHFWLYH 'HWURLW3ROLFH'HSDUWPHQWWKDWWZREODFNPDOHVRQHZHDULQJ DWWKHWLPHlWKHSHUVSHFWLYHIURPZKLFKZHDUHWRMXGJHKLV D JUHHQ m8VHGl MHDQV RXWILW ZHUH VHOOLQJ GUXJV DW WKH FRQGXFWDQGFKRLFHV6WULFNODQG86DW m7DNLQJ *UH\KRXQG%XV6WDWLRQLQ'HWURLW7KHFDOOHUSURYLGHGQR DOOWKHLQIRUPDWLRQ,JRWLQWRFRQVLGHUDWLRQLQFOXGLQJWKHZD\ RWKHULQIRUPDWLRQ 0U>1RUWKURS@UHOD\HGWKHZD\WKLVKDSSHQHG,GLGQRWIHHO 0U>1RUWKURS@ZDVGRLQJDQ\WKLQJLQYROXQWDULO\7KDWZDV 7KDWVDPHGD\'HWURLW3ROLFH2IILFHUV5REHUWsDFNVRQDQG WKHZD\,SHUFHLYHGLWl *LQWKHU+UjJ,DWs$ $ 2OLYHU&ROOLQVUHFHLYHGDUDGLRFDOOUHOD\LQJWKHDQRQ\PRXV PRUH DJJUHVVLYH LQVLJKWIXO RU GHYLRXV DWWRUQH\ PLJKW QRW WLS0LQXWHVODWHUWKHXQLQIRUPHGRIILFHUVDUULYHGDWWKHEXV KDYHEHHQVRTXLFNWRHTXDWHKLVFOLHQWjVFKDUDFWHUL]DWLRQRI VWDWLRQ ZKHUH WKH\ REVHUYHG WZR EODFN PDOHV VLWWLQJ DQG mYROXQWDULQHVVlZLWKWKHOHJDOGHILQLWLRQ1HYHUWKHOHVVLWLV WDONLQJ 2QH RI WKH PDOHV ZRUH DQ RXWILW PDWFKLQJ WKH ZLWKLQWKHPLQLPXPUDQJHRIFRPSHWHQFHWRSHUFHLYHDFODLP GHVFULSWLRQLQFOXGHGLQWKHWLS7KHRWKHUPDOHZDV&KDUOHV DVZHDNZKHQWKDWFODLPLVEDVHGRQFRPSXOVLRQDQG\RXU 1RUWKURS RZQFOLHQWLQGLFDWHVWKDWKHDFWHGIUHHO\ $VWKHRIILFHUVDSSURDFKHG1RUWKURSWRRNDGXIIHOEDJRII 7KH FRXUW WUHDWV DV SDWHQWO\ REYLRXV WKH SUHVHQFH RI DQ KLVVKRXOGHUDQGSODFHGLWXQGHUKLVVHDW+HWKHQURVHIURP LQYROXQWDU\ GHWHQWLRQ SULRU WR 1RUWKURSjV DGPLVVLRQ RI KLVVHDWDQGDWWHPSWHGWRZDONSDVWWKHRIILFHUV%HIRUHKH PDULMXDQD SRVVHVVLRQ VWDWLQJ m>W@KHUH LV QR TXHVWLRQ WKDW FRXOGGRVR&ROOLQVVWRSSHG1RUWKURS sDFNVRQDQG&ROOLQVGHWDLQHG1RUWKURSl6XSUDDW(YHQ ZLWKWKHEHQHILWRIWHQ\HDUVjKLQGVLJKW,GRQRWWKLQNWKHUHLV &ROOLQVDQGsDFNVRQERWKDVNHG1RUWKURSIRULGHQWLILFDWLRQ mQR TXHVWLRQl DERXW WKLV DV , KDYH GLVFXVVHG &HUWDLQO\ &ROOLQVQH[WDVNHG1RUWKURSWRHPSW\KLVSRFNHWV1RUWKURS %UDYHUPDQ GLG QRW SHUFHLYH WKDW WKHUH ZDV mQR TXHVWLRQl FRPSOLHG$IWHUILQGLQJQRFRQWUDEDQGLQ1RUWKURSjVSRFNHWV DERXWWKHPDWWHUSULPDULO\EHFDXVHLQ 1RUWKURSGLGQRW &ROOLQVDVNHG1RUWKURSLIKHKDGDQ\GUXJVRQKLVSHUVRQ,Q EHOLHYHKHKDGEHHQGHWDLQHGGXULQJKLVLQLWLDOTXHVWLRQLQJ UHVSRQVH 1RUWKURS DGPLWWHG WKDW KH KDG PDULMXDQD LQ KLV %UDYHUPDQFRXOGQRWUHO\RQ0U1RUWKURSDVKLVH[SHUWRQ VRFN&ROOLQVWKHQDUUHVWHG1RUWKURSIRUYLRODWLQJDPXQLFLSDO WKH)RXUWK$PHQGPHQWEXWKHQHFHVVDULO\UHOLHGRQKLPDVWR PDULMXDQDRUGLQDQFH 1RUWKURSjVRZQVWDWHRIPLQGDQGDVWRWKHFRHUFLYHQHVVRI WKH RIILFHUVj FRQGXFW %HFDXVH %UDYHUPDQ EHOLHYHG WKDW D $IWHUDUUHVWLQJ1RUWKURS&ROOLQVVHL]HGWKHGXIIHOEDJWKDW 7HUU\VWRSKDGQRWRFFXUUHGDQGLWLVQRWXQUHDVRQDEOHWR 1RUWKURSKDGSODFHGXQGHUKLVVHDWMXVWPRPHQWVEHIRUH$ ILQGKLVEHOLHIZLWKLQWKHUDQJHRISURIHVVLRQDOFRPSHWHQFH VHDUFKRIWKHEDJUHYHDOHGDODUJHTXDQWLW\RIFRFDLQH KLV IDLOXUH WR ILOH D VXSSUHVVLRQ PRWLRQ FDQQRW PHHW WKH 0LFKLJDQFKDUJHG1RUWKURSZLWKSRVVHVVLRQRIDFRQWUROOHG VWDQGDUGRIFRQVWLWXWLRQDOLQHIIHFWLYHQHVVUHTXLUHGRQIHGHUDO VXEVWDQFH2Q1RYHPEHU DIWHUDEHQFKWULDOLQWKH KDEHDVDQG1RUWKURSj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jV FRQGXFW EDVHG RQ ZKDW KDV EHHQ GLVFRYHUHG E\ 7KH0LFKLJDQ6XSUHPH&RXUWGHQLHG1RUWKURSjVOHDYHIRUD PRUH WKDQ D GHFDGH RI IXUWKHU SURFHHGLQJV m$ IDLU VHFRQGDSSHDO DVVHVVPHQWRIDWWRUQH\SHUIRUPDQFHUHTXLUHVWKDWHYHU\HIIRUW EHPDGHWRHOLPLQDWH WKHGLVWRUWLQJHIIHFWVRIKLQGVLJKWWR $IWHU XQVXFFHVVIXOO\ DSSHDOLQJ KLV FRQYLFWLRQ 1RUWKURS UHFRQVWUXFW WKH FLUFXPVWDQFHV RI FRXQVHOjV FKDOOHQJHG ILOHGDSHWLWLRQIRUDZULWRIKDEHDVFRUSXVZLWKWKH8QLWHG FRQGXFW DQG WR HYDOXDWH WKH FRQGXFW IURP FRXQVHOjV 6WDWHV'LVWULFW&RXUWIRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQ2Q SHUVSHFWLYHDWWKHWLPHl6WULFNODQG86DW 1RYHPEHU WKHGLVWULFWFRXUWJUDQWHGWKHZULW ,Q WKH LQHIIHFWLYHQHVV KHDULQJ DIIRUGHG 1RUWKURS E\ 5HVSRQGHQW:DUGHQ 'DYLG 7ULSSHWW QRZ DSSHDOV WKH 0LFKLJDQ %UDYHUPDQ WHVWLILHG WR ZKDW KH ZDV WROG DERXW GLVWULFWFRXUWjVUXOLQJ 1RUWKURSjVmDWWHPSWWROHDYHl%UDYHUPDQEHOLHYHG1RUWKURS KDGEHHQDVNHGWRFRPHRYHUDQGVSHDNWRWKHRIILFHUDQGWKDW ,, KLVPRYHPHQWZDVSURPSWHGE\ZKDWmORRNVOLNHDUHTXHVW DQG WDNHQ LQ FRQQHFWLRQ ZLWK P\ FRQYHUVDWLRQ ZLWK 0U :HUHYLHZWKHGLVWULFWFRXUWjVGHFLVLRQWRJUDQWRUGHQ\D >1RUWKURS@LWDSSHDUHGOLNHDUHTXHVWl *LQWKHU+UjJ,DW ZULWRIKDEHDVFRUSXVGHQRYR%DUNHUY1RUWKURS@ WKDW 0U >1RUWKURS@ YROXQWDULO\ HPSWLHG FRXUWVKDOOQRWEHJUDQWHGZLWKUHVSHFWWRDQ\FODLPWKDW KLV SRFNHWV DGYLVHG WKDW KH >KDG@ EXG LQ KLV VRFN DQG WKH OLNH 7KDWjV P\ ZDVDGMXGLFDWHGRQWKHPHULWVLQ6WDWHFRXUWSURFHHGLQJV ILQGLQJl *LQWKHU +UjJ 9 DW s$ $('3$ GHPDQGV WKDW mD XQOHVV WKH DGMXGLFDWLRQ RI WKH FODLP UHVXOWHG LQ D GHWHUPLQDWLRQ RI D IDFWXDO LVVXH PDGH E\ D 6WDWH FRXUW VKDOO EH SUHVXPHG GHFLVLRQ WKDW ZDV FRQWUDU\ WR RU LQYROYHG DQ WR EH FRUUHFWl 86& H 7KH FRXUW DSSDUHQWO\ DJUHHV WKDW XQUHDVRQDEOHDSSOLFDWLRQRIFOHDUO\HVWDEOLVKHG)HGHUDO ZH PXVW GHHP 1RUWKURS WR KDYH WROG %UDYHUPDQ WKDW KLV UHVSRQVHV WR WKH SROLFH ZHUH YROXQWDU\ EXW LW WKHQ LPSRVHV D XQDUJXDEOH FRQVWLWXWLRQDO ODZDVGHWHUPLQHGE\WKH6XSUHPH&RXUWRIWKH8QLWHG GXW\ IRU FRXQVHO WR GLVEHOLHYH KLV FOLHQW DQG SXUVXH FODLPV LQFRQVLVWHQW 6WDWHV RU UHVXOWHGLQDGHFLVLRQWKDWZDVEDVHGRQDQ ZLWK KLV FOLHQWjV VWDWHPHQWV 2WKHUZLVH DSSDUHQWO\ KH LV mQRW DFWLQJ DV XQUHDVRQDEOH GHWHUPLQDWLRQ RI WKH IDFWV LQ OLJKW RI WKH FRXQVHOl XQGHU 6WULFNODQG 7KH FRXUWjV KROGLQJ FRPHV FORVH WR PDQGDWLQJ HYLGHQFHSUHVHQWHGLQWKH6WDWHFRXUWSURFHHGLQJ WKDW D )RXUWK $PHQGPHQW FKDOOHQJH EH SDUW RI HYHU\ FULPLQDO SURFHHGLQJ ZKHUH WKHUH HYLGHQFH WR EH VXSSUHVVHG VRPHWKLQJ WKDW JRHV ZHOO EH\RQG ZKDW WKH 6L[WK $PHQGPHQW UHTXLUHV DQG ZKLFK FDQQRW VHUYH WKH HQGV RI WKH MXGLFLDO V\VWHP RU SURYLGH WKH DSSURSULDWH ODWLWXGH WR GHIHQVH FRXQVHO 1RUWKURSY7ULSSHWW 1R 1R 1RUWKURSY7ULSSHWW FXUUHQWRQHZHVWDWHGWKDWmRIILFHUVGLGQRWHQJDJHLQDQ\ 7KH8QLWHG6WDWHV6XSUHPH&RXUWUHFHQWO\LQWHUSUHWHGWKLV RYHUEHDULQJRUFRHUFLYHDFWLYLW\LQPDNLQJWKHVHUHTXHVWVDQG VWDWXWH VSHFLILFDOO\ DGGUHVVLQJ WKH GLVWLQFWLRQ EHWZHHQ WKDWDFRQVHQVXDOHQFRXQWHURFFXUUHG:HILQGWKDWWKHUHLV GHFLVLRQV mFRQWUDU\ WRl DQG LQYROYLQJ DQ mXQUHDVRQDEOH QRWKLQJWRLQGLFDWHWKDWWKHRIILFHUVFRQYH\HGDPHVVDJHWKDW DSSOLFDWLRQlRIFOHDUO\HVWDEOLVKHGIHGHUDOODZ:LOOLDPVY FRPSOLDQFHZLWKWKHLUUHTXHVWWRVSHDNZLWKGHIHQGDQWDQG 7D\ORU 866 &W /(GG H[DPLQHKLVWLFNHWZDVUHTXLUHGDQGQR7HUU\VWRSRFFXUUHGl 7KH &RXUW H[SODLQHG WKDW D VWDWH FRXUW GHFLVLRQ LV 8QLWHG6WDWHVY3HWHUV )G WK&LU VHH mFRQWUDU\WRlFOHDUO\HVWDEOLVKHGIHGHUDOODZmLIWKHVWDWHFRXUW DOVR 8QLWHG 6WDWHV Y )UD]LHU )G WK &LU DUULYHV DW D FRQFOXVLRQ RSSRVLWH WR WKDW UHDFKHG E\ >WKH m:HKROGWKDWEHFDXVHWKHGHIHQGDQWYROXQWDULO\JDYH 6XSUHPH &RXUW@ RQ D TXHVWLRQ RI ODZ RU LI WKH VWDWH FRXUW WKHWLFNHWWRWKHRIILFHUDQGWKHRIILFHUGLGQRWUHIXVHWRUHWXUQ GHFLGHVDFDVHGLIIHUHQWO\WKDQ>WKH6XSUHPH&RXUW@KDVRQD WKHWLFNHWWRWKHGHIHQGDQWWDNLQJWKHWLFNHWGLGQRWFRQVWLWXWH VHWRIPDWHULDOO\LQGLVWLQJXLVKDEOHIDFWVl,GDW DVHL]XUHl ,QFRQWUDVWDVWDWHFRXUWGHFLVLRQLQYROYHVDQXQUHDVRQDEOH 7KHTXHVWLRQWKHQEHFRPHVZKDWHYLGHQFHH[LVWVRUH[LVWHG DSSOLFDWLRQRIFOHDUO\HVWDEOLVKHGIHGHUDOODZRQO\ZKHUHWKH WKDW WKH RIILFHUVj VWDWHPHQWV FRQYH\HG WKH PHVVDJH WKDW VWDWH FRXUWjV DSSOLFDWLRQ RI VXFK ODZ ZDV mREMHFWLYHO\ 1RUWKURSjVFRPSOLDQFHZDVUHTXLUHG7KHUHLVDQGZDVQRQH XQUHDVRQDEOHl,GDW $IHGHUDOKDEHDVFRXUWPD\QRW 2IILFHUsDFNVRQ HTXLYRFDWHGDERXWZKHWKHUKHZRXOGKDYH ILQGDVWDWHDGMXGLFDWLRQXQUHDVRQDEOHmVLPSO\EHFDXVHWKDW GRQH DQ\WKLQJ KDG 1RUWKURS UHIXVHG WR FRPSO\ &RPSDUH FRXUWFRQFOXGHVLQLWVLQGHSHQGHQWMXGJPHQWWKDWWKHUHOHYDQW sDFNVRQjV VWDWHPHQW WKDW KH ZRXOG KDYH GRQH mSUREDEO\ GHFLVLRQDSSOLHGFOHDUO\HVWDEOLVKHGIHGHUDOODZHUURQHRXVO\ QRWKLQJl *LQWKHU +UjJ ,,, DW s$ ZLWK KLV RULQFRUUHFWO\l,GDWm5DWKHUWKDWDSSOLFDWLRQPXVWDOVR VWDWHPHQWTXRWHGE\WKHPDMRULW\VXSUDDWQVD\LQJKH EHXQUHDVRQDEOHl,G ZRXOG QRW KDYH OHW 1RUWKURS ZDON DZD\ GXULQJ KLV LQYHVWLJDWLRQ2IFRXUVHQRRQHoHYHQ2IILFHUsDFNVRQo 7KH GLVWULFW FRXUW EHORZ UHYLHZHG 1RUWKURSjV KDEHDV NQRZVZKDWKHZRXOGKDYHGRQHDQGLWLVDQLVVXHRIRQO\ SHWLWLRQ XSRQWKHUHFRUGGHYHORSHGDWWKHVWDWHFRXUW7KH SHULSKHUDOLPSRUWDQFH:KDWWKHUHFRUGGLVFORVHVWKHRIILFHUV GLVWULFW FRXUW FRQGXFWHG QR HYLGHQWLDU\ KHDULQJ :KHQ D GLGGRLVWRH[SODLQWKDWWKH\KDGUHFHLYHGDWLSDVNVRPH GLVWULFW FRXUW GHFLGHV D KDEHDV SHWLWLRQ ZLWKRXW HYLGHQWLDU\ TXHVWLRQVDQGUHTXHVWWKDW1RUWKURSmLIKHZRXOGlHPSW\KLV KHDULQJ ZH UHYLHZ WKDW GLVWULFW FRXUWjV IDFWXDO ILQGLQJVGH SRFNHWV 'HSHQGLQJ RQ WKH ZD\ WKH RIILFHUV EHKDYHG WKLV QRYR:ROIHY%ULJDQR)G WK&LU PLJKWFRQVWLWXWHD7HUU\VWRSEXWLWPLJKWQRWDQG1RUWKURS m$Q\ILQGLQJVRIIDFWPDGHE\WKHGLVWULFWFRXUWDUHQRUPDOO\ HYLGHQWO\OHG%UDYHUPDQWREHOLHYHWKDWLWGLGQRW UHYLHZHG RQO\ IRU FOHDU HUURU EXW ZKHQ WKH GLVWULFW FRXUW V GHFLVLRQLQDKDEHDVFDVHLVEDVHGRQDWUDQVFULSWIURPWKH (YHQ ZHUH WKHUH VXIILFLHQW UHFRUG HYLGHQFH WR VXSSRUW SHWLWLRQHU VVWDWHFRXUWWULDODQGWKHGLVWULFWFRXUWWKXVPDNHV ILQGLQJ D 7HUU\ YLRODWLRQ ZH DUH QRW DVNHG WR DGMXGLFDWH CQR FUHGLELOLW\ GHWHUPLQDWLRQ RU RWKHU DSSDUHQW ILQGLQJ RI ZKHWKHU LQ D FRXQWHUIDFWXDO XQLYHUVH D VXFFHVVIXO IDFWj WKH GLVWULFW FRXUW V IDFWXDO ILQGLQJV DUH UHYLHZHG GH VXSSUHVVLRQ PRWLRQ FRXOG KDYH EHHQ PDGH E\ 1RUWKURS LQ QRYRl FLWDWLRQVRPLWWHG 0RRUHY&DUOWRQ)G 1RUWKURSjV SHWLWLRQ LV EDVHG RQ WKH VXSSRVHG XWWHU WK&LU m7KHGLVWULFWFRXUWPDGHQRFUHGLELOLW\ IDLOXUH RI %UDYHUPDQ WR OLWLJDWH DQ REYLRXV DQG GHFLVLYH GHWHUPLQDWLRQRURWKHUDSSDUHQWILQGLQJRIIDFW LWVGHFLVLRQ )RXUWK$PHQGPHQWFODLP%XWEDVHGRQZKDW1RUWKURSWROG ZDVEDVHGXSRQWKHWUDQVFULSWRI0RRUH VWULDO$VVXFKLWLV %UDYHUPDQDERXWKLVHQFRXQWHU%UDYHUPDQKDGQRUHDVRQWR UHYLHZHGGHQRYRl :HWKHUHIRUHUHYLHZWKHGLVWULFWFRXUWjV EHOLHYHWKDWD7HUU\FODLPZRXOGEHVXFFHVVIXO)RUSXUSRVHV IDFWXDOILQGLQJVGHQRYR 1RUWKURSY7ULSSHWW 1R 1R 1RUWKURSY7ULSSHWW ,,, RI WKH GLVWULFW FRXUWjV RSLQLRQ ZRXOG YLHZ LW DV FKRRVLQJ EHWZHHQDOWHUQDWHDFFRXQWVRIWKHLQFLGHQWFRQWDLQHGLQWKH ,Q KLV SHWLWLRQ 1RUWKURS VD\V KLV WULDO FRXQVHO (ULF UHFRUGDQGPDNLQJQRWRQO\DQmDSSDUHQWILQGLQJRIIDFWl DV %UDYHUPDQPDGHHUURUVVRVHULRXVWKDWKHFHDVHGWRIXQFWLRQ GLVFXVVHG LQ 0RRUH DQG :ROIH VXSUD DW EXW DQ DFWXDO DVWKHFRXQVHOJXDUDQWHHGXQGHUWKH6L[WK$PHQGPHQW86 ILQGLQJWKDWWKHRIILFHUVFDOOHGWR1RUWKURSDQGWKDWKHVWRRG &RQVWDPHQG9, m,QDOOFULPLQDOSURVHFXWLRQVWKHDFFXVHG XSDQGFDPHRYHUWRVHHZKDWWKH\ZDQWHG:HUHYLHZWKH VKDOOHQMR\WKHULJKWWRKDYHWKH$VVLJQPHQWRI&RXQVHO GLVWULFWFRXUWjVIDFWXDOILQGLQJVRQKDEHDVRQO\IRUFOHDUHUURU IRUKLVGHIHQFHl +HLQVLVWV%UDYHUPDQLQFRPSHWHQWO\IDLOHG 'H/LVOH Y 5LYHUV )G WK &LU HQ WR PRYH IRU WKH VXSSUHVVLRQ RI WKH FRFDLQH HYLGHQFH XVHG EDQF DQG WKH PDMRULW\ KDV QRW IRXQG WKH GLVWULFW FRXUWjV DJDLQVW KLP DW WULDO $FFRUGLQJ WR 1RUWKURS WKH SROLFH DFFRXQWZKLFKRPLWVDQ\PHQWLRQRI1RUWKURSjVVHHNLQJWR GLVFRYHUHG WKLV FRFDLQH GXULQJ DQ XQODZIXO VHL]XUH DQG OHDYHWREHFOHDUO\HUURQHRXV VHDUFK $OWKRXJK FRQFOXGLQJ WKDW D 7HUU\ VWRS KDG RFFXUUHG o D 7KH)RXUWK$PHQGPHQWSURKLELWVmXQUHDVRQDEOHVHDUFKHV OHJDOFRQFOXVLRQWRZKLFKQRGHIHUHQFHLVGXHoWKHGLVWULFW DQGVHL]XUHVl86&RQVWDPHQG,9(YLGHQFHUHFRYHUHG FRXUWDOVRPDGHQRILQGLQJWKDWWKHRIILFHUVKDGFRPSHOOHG IURP DQ LOOHJDO VHDUFK LV LQDGPLVVLEOH :HHNV Y 8QLWHG 1RUWKURS WR HPSW\ KLV SRFNHWV DQG QR ILQGLQJV DERXW WKH 6WDWHV86 6&W/(G RIILFHUVjWRQHPDQQHURUVKRZRIIRUFH:HFDQQRWDVVXPH )XUWKHUHYLGHQFHUHFRYHUHGLQGLUHFWO\IURPDQLOOHJDO FRPSXOVLRQSHUVH)ORULGDY%RVWLFNKHOGWKDWQRmVHL]XUH VHDUFK RU VHL]XUH LV DOVR LQDGPLVVLEOH DV mIUXLW RI WKH RFFXUV ZKHQ SROLFH DVN TXHVWLRQV RI DQ LQGLYLGXDO DVN WR SRLVRQRXVWUHHl6HJXUDY8QLWHG6WDWHV86 H[DPLQHWKHLQGLYLGXDOjVLGHQWLILFDWLRQDQGUHTXHVWFRQVHQW 6&W/(GG :RQJ6XQY8QLWHG WRVHDUFKKLVRUKHUOXJJDJHoDVORQJDVWKHRIILFHUVGRQRW 6WDWHV866&W /(GG FRQYH\ D PHVVDJH WKDW FRPSOLDQFH ZLWK WKHLU UHTXHVWV LV 6LOYHUWKRUQH/XPEHU&RY8QLWHG6WDWHV86 UHTXLUHGl 86 FLWDWLRQ DQG LQWHUQDO 6&W/(G TXRWDWLRQPDUNVRPLWWHG ,QDFDVHIDFWXDOO\VLPLODUWRWKH %XWDGHIHQGDQWPXVWVHHNWKHH[FOXVLRQRIVXFKHYLGHQFH DWWULDORURQGLUHFWDSSHDO%HFDXVHTXHVWLRQVUHJDUGLQJWKH 1RUWKULS >VLF@ GLGQjW KDYH WKLV EDJ ZKHQ KH FDPH RYHU DGPLVVLELOLW\ RI RWKHUZLVH UHOHYDQW HYLGHQFH VHOGRP WRXFK WR \RX ULJKW" XSRQWKHmEDVLFMXVWLFHlRIDFRQYLFWLRQWKH6XSUHPH&RXUW $ m:KHQ 0U 1RUWKULS >VLF@ JRW XS ZLWK P\ SDUWQHU EDUV )RXUWK $PHQGPHQW FODLPV IURP KDEHDV UHYLHZ WKDWjV ZKHQ , VDZ KLP NLFN LW XQGHU WKH VHDW 7ULDO .XKOPDQQY:LOVRQ866&W 7U DW s$ HPSKDVLV DGGHG 7KLV LV FRPSOHWHO\ LQFRQVLVWHQW ZLWK 1RUWKURS DWWHPSWLQJ WR VOLS DZD\ SULRU WR DQ\ LQWHUYLHZ 2IILFHU sDFNVRQ ZDV DSSDUHQWO\ FRQIXVHG WKUHH \HDUV ODWHU DV FRPSDULVRQ RI WKH FRQIOLFWLQJ WHVWLPRQ\ VKRZV RYHU ZKLFK RI WKH SDUWQHUV KDG GRQH ZKDW WR ZKLFK RI WKH WZR VXVSHFWV DQG KLV WHVWLPRQ\ GRHV QRW DSSHDU WR KDYH IRUPHG WKH EDVLV RI DQ\ SUHYLRXV 7KH 6L[WK $PHQGPHQW DSSOLHV WR WKH 6WDWHV WKURXJK WKH DGMXGLFDWLRQ , VHH QR UHDVRQ IRU WKH FRXUW QRZ WR SLFN IURP WKH UHFRUG )RXUWHHQWK $PHQGPHQW *LGHRQ Y :DLQZULJKW 86 WKLV YHUVLRQ RI WKH IDFWV HYHQ LI LW KDG WKH SRZHU WR GR VR o H[DFWO\ ZKDW 6 &W / (G G RFFXUUHG DW WKH *UH\KRXQG VWDWLRQ LV XQFHUWDLQ DQG SHUKDSV XQDQVZHUDEOH )RUWXQDWHO\ WKH DQVZHU GRHV QRW PDWWHU EHFDXVH WKH RQO\ UHOHYDQW /LNH WKH 6L[WK $PHQGPHQW WKH )RXUWK $PHQGPHQW DSSOLHV WR TXHVWLRQ LV %UDYHUPDQjV NQRZOHGJH LQ DQG HYHQ QHZ LQIRUPDWLRQ WKH 6WDWHV WKURXJK WKH )RXUWHHQWK $PHQGPHQW 0DSS Y 2KLR 86 SHUKDSV JLYHQ E\ 2IILFHU sDFNVRQ LQ FDQQRW DIIHFW WKLV 6 &W / (G G GHWHUPLQDWLRQ 1RUWKURSY7ULSSHWW 1R 1R 1RUWKURSY7ULSSHWW OLEHUW\RIWKHFLWL]HQ7ZRLQVWDQFHVRIFRHUFLRQDUHDGGXFHG /(GG 6WRQHY3RZHOO86 WRVXSSRUWWKHILQGLQJWKDW1RUWKURSZDVVHL]HG3ULPDULO\ 6&W /(GG WKHFRXUWUHOLHVRQ1RUWKURSjVEHLQJVWRSSHGDVKHmVRXJKWWR OHDYHWKHDUHDl6XSUDDW6HFRQGDULO\LWUHOLHVRQWKH +RZHYHU D KDEHDV SHWLWLRQHU PD\ DVVHUW D 6L[WK VXSSRVHG FRPSXOVLRQ SODFHG RQ 1RUWKURS WR HPSW\ KLV $PHQGPHQWFODLPEDVHGRQKLVFRXQVHOjVIDLOXUHWRPRYHIRU SRFNHWVDQGSURGXFHKLVLGHQWLILFDWLRQ7KHUHFRUGLVDWEHVW WKHVXSSUHVVLRQRIHYLGHQFHWKDWVKRXOGEHH[FOXGHGXQGHU DPELJXRXV DV WR ERWK RI WKHVH mHYHQWVl KRZHYHU DQG WKH)RXUWK$PHQGPHQW.LPPHOPDQY0RUULVRQ86 LQVXIILFLHQWIRUXVWRDOWHUWKHFRQWUDU\IDFWXDOILQGLQJVRIWKH 6&W /(GG 7R GLVWULFWFRXUWDQGWKHVWDWHFRXUWV HVWDEOLVKD6L[WK$PHQGPHQWFODLPWKHSHWLWLRQHUPXVWVKRZ KLV FRXQVHO SHUIRUPHG GHILFLHQWO\ DQG WKDW WKH GHILFLHQW $OWKRXJK 0U 1RUWKURS RQ DSSHDO FODLPV WR KDYH EHHQ SHUIRUPDQFHUHVXOWHGLQSUHMXGLFH6WULFNODQGY:DVKLQJWRQ UHVWUDLQHG IURP OHDYLQJ GXULQJ KLV LQLWLDO VWRS E\ 2IILFHUV 866&W/(GG sDFNVRQDQG&ROOLQVWKHGLVWULFWFRXUWPDGHQRVXFKILQGLQJ 7KHGLVWULFWFRXUWGHVFULEHVWKHLQLWLDOHQFRXQWHUWKXV +HUH1RUWKURSVD\V%UDYHUPDQjVSHUIRUPDQFHZDVERWK GHILFLHQWDQGSUHMXGLFLDO1RUWKURSDUJXHVWKDW%UDYHUPDQ m2IILFHU2OLYHU&ROOLQVWHVWLILHGDWSHWLWLRQHUj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l WKH\QHYHUZRXOGKDYHGLVFRYHUHGWKHFRFDLQHLQWKHGXIIHO EDJ 7KH FRFDLQH DFFRUGLQJ WR 1RUWKURS ZDV WKXV 'LVW&W2SDW 7KHGLVWULFWFRXUWjVRSLQLRQ DQGWKH LQDGPLVVLEOHDVIUXLWRIWKHLOOHJDOVHL]XUH HYLGHQFHSUHVHQWHGDW1RUWKURSjVWULDO SURYLGHQRVXSSRUWIRU 1RUWKURSjVFXUUHQWFODLPWKDWKHZDVUHVWUDLQHGIURPOHDYLQJ $QG1RUWKURSLQVLVWV%UDYHUPDQjVGHILFLHQWSHUIRUPDQFH WKHEXVVWDWLRQZKHQKHVWRRGXSIURPKLVFKDLUDQGDQVZHUHG UHVXOWHG LQ SUHMXGLFH ,I %UDYHUPDQ KDG PRYHG IRU WKHVXPPRQVRIWKHRIILFHUV$Q\UHDVRQDEOHLQWHUSUHWDWLRQ VXSSUHVVLRQ 1RUWKURS VD\V WKH WULDO FRXUW ZRXOG KDYH H[FOXGHGWKHFRFDLQHHYLGHQFHDQGDFTXLWWHGKLPRIFRFDLQH SRVVHVVLRQ 7KLV VKRXOG QRW EH PLVFRQVWUXHG DV D FODLP WKDW WKHUH LV QR 1RUWKURS UDLVHG WKLV 6L[WK $PHQGPHQW FODLP RQ GLUHFW VXSSRUW DQ\ZKHUH IRU SHWLWLRQHU 2IILFHU sDFNVRQjV WHVWLPRQ\ DW WKH *LQWKHU KHDULQJ WKUHH \HDUV DIWHU WKH LQFLGHQW DOWKRXJK UHOLHG XSRQ E\ WKH DSSHDO,QGHQ\LQJWKHFODLPWKH0LFKLJDQ&RXUWRI$SSHDOV FRXUW ZDV FRQWUDGLFWHG QRW RQO\ E\ %UDYHUPDQjV UHFROOHFWLRQ RI ZKDW IRXQGWKDW%UDYHUPDQPDGHDQDFFHSWDEOHVWUDWHJLFGHFLVLRQ 1RUWKURS WROG KLP DERXW WKH LQFLGHQW EXW DOVR E\ 2IILFHU &ROOLQVjV LQFKRRVLQJQRWWRVHHNVXSSUHVVLRQRIWKHFRFDLQHHYLGHQFH WHVWLPRQ\ DW 1RUWKURSjV WULDO D IHZ PRQWKV DIWHU WKH DUUHVW &ROOLQV VDLG UHSHDWHGO\ WKDW KLV SDUWQHU ZDV LQLWLDOO\ WDONLQJ WR 1RUWKURS ZKLOH 7KLV&RXUWLVFRQYLQFHGWKDWGHIHQGDQWZDVQRWGHQLHG 1RUWKURS ZDV mVLWWLQJ WKHUHl 7ULDO 7U DW s$ DQG WKDW KLV SDUWQHU KLVFRQVWLWXWLRQDOULJKWWRHIIHFWLYHDVVLVWDQFHRIFRXQVHO mEURXJKW KLP RYHU WR PHl 7ULDO 7U DW s$ DIWHU &ROOLQVjV GLVFXVVLRQ ZLWK 1RUWKURSjV FRPSDWULRW DV LW LV DSSDUHQW IURP WKH SURFHHGLQJV WKDW GHIHQVH 4 %\ 0U %UDYHUPDQ FRQWLQXLQJ m2ND\ 1RZ 0U FRXQVHO FRQVLGHUHG PRWLRQV WR VXSSUHVV HYLGHQFH EXW 1RUWKURSY7ULSSHWW 1R 1R 1RUWKURSY7ULSSHWW ZDV FRQYLQFHG DIWHU KLV FRQYHUVDWLRQV ZLWK GHIHQGDQW BBBBBBBBBBBBBBBB DQGRWKHULQYHVWLJDWLRQWKDWVXFKPRWLRQVZRXOGQRWEH JUDQWHG DQG WKDW WKH PRVW HIIHFWLYH WULDO WDFWLF ZDV WR ',66(17 PDNH WKH GHIHQVH WKDW WKH OXJJDJH ZDV QRW WKDW RI WKH BBBBBBBBBBBBBBBB GHIHQGDQW %2**6&LUFXLWsXGJHGLVVHQWLQJ,IXOO\FRQFXUZLWKWKH ,QJUDQWLQJ1RUWKURSjVSHWLWLRQWKHGLVWULFWFRXUWKHOGWKDW FRXUWjVFRQFOXVLRQWKDWWKHEDJZDVVHDUFKHGODZIXOO\LQFLGHQW WKLV UXOLQJ IHOO mRXWVLGH WKH XQLYHUVH RI SODXVLEOH FUHGLEOH WRDUUHVWDQGZLWKWKHUHMHFWLRQRIWKHGLVWULFWFRXUWjVEDVLVIRU RXWFRPHVl7KHGLVWULFWFRXUWIRXQGQRUHDVRQDEOHEDVLVIRU ILQGLQJ D YLRODWLRQ RI WKH 6L[WK $PHQGPHQW +RZHYHU , H[FXVLQJ%UDYHUPDQjVIDLOXUHWRPRYHIRUVXSSUHVVLRQRIWKH FRQVLGHUDVZKROO\LQDGHTXDWHWKHFRXUWjVDOWHUQDWLYHEDVLVIRU FRFDLQHHYLGHQFH$FFRUGLQJWRWKHGLVWULFWFRXUWWKHFRFDLQH ILQGLQJLQHIIHFWLYHQHVVRIFRXQVHO ZDVVXEMHFWWRVXSSUHVVLRQEHFDXVHWKHRIILFHUVGLVFRYHUHGLW ZKLOHSHUIRUPLQJDQLQYDOLGVHDUFKLQFLGHQWWRDUUHVW ,QDIILUPLQJWKHZULWLQWKLVFDVHWKHFRXUWGRHVQRWUHVSHFW WKHKLJKEDUWKDWKDVEHHQVHWIRUFODLPVVXFKDV1RUWKURSjV :HGLVDJUHH$OWKRXJKDVH[SODLQHGEHORZZHDIILUPWKH ,QRUGHUIRUXVWRDIILUPWKHJUDQWRIWKHZULWZHPXVWQRW GLVWULFWFRXUWjVJUDQWRIKDEHDVUHOLHIRQRWKHUJURXQGVZH RQO\ ILQG DWWRUQH\ %UDYHUPDQ WR KDYH DFWHG LQFRPSHWHQWO\ ILQG WKH GLVWULFW FRXUW HUUHG LQ UXOLQJ WKH RIILFHUVj VHDUFK EDVHGRQWKHLQIRUPDWLRQKHKDGDWWKHWLPHZHPXVWILQGWKH XQFRQVWLWXWLRQDO RSSRVLQJLQWHUSUHWDWLRQXQGHU6WULFNODQGZKLFKDFFRUGVZLGH GHIHUHQFHDQGDSUHVXPSWLRQRIFRPSHWHQFHWRWULDOFRXQVHO 8QGHUWKH)RXUWK$PHQGPHQWDVHDUFKDEVHQWDZDUUDQWLV WREHVRIDUIHWFKHGWKDWQRUHDVRQDEOHFRXUWFRXOGFUHGLWLW SHU VH XQUHDVRQDEOH mVXEMHFW RQO\ WR D IHZ VSHFLILFDOO\ 6HH:LOOLDPVY7D\ORU 86 (YHQSULRU HVWDEOLVKHGDQGZHOOGHOLQHDWHGH[FHSWLRQVl.DW]Y8QLWHG WR$('3$WKHH[LVWHQFHRIDYDOLG)RXUWK$PHQGPHQWFODLP 6WDWHV 866&W /(GG QRWUDLVHGDWWULDOZDVLQVXIILFLHQWIRUIHGHUDOKDEHDVUHOLHI 2QH VXFK H[FHSWLRQ LV IRU VHDUFKHV LQFLGHQW WR D 6HH .LPPHOPDQ Y 0RUULVRQ 86 ODZIXODUUHVW&KLPHOY&DOLIRUQLD 86 m2QO\ WKRVH KDEHDV SHWLWLRQHUV ZKR FDQ SURYH XQGHU 6&W/(GG 6WULFNODQGWKDWWKH\KDYHEHHQGHQLHGDIDLUWULDOE\WKHJURVV LQFRPSHWHQFHRIWKHLUDWWRUQH\VZLOOEHJUDQWHGWKHZULWl :KHQFRQGXFWLQJDVHDUFKLQFLGHQWWRDUUHVWSROLFHPD\ ,ELG7KHSURYLVLRQVRI$('3$UHTXLULQJXQUHDVRQDEOHQHVV VHDUFK LWHPV ZLWKLQ WKH mLPPHGLDWH FRQWUROl RI WKH SHUVRQ RIDVWDWHGHFLVLRQFLWHGE\WKHFRXUWLQLWVLQLWLDOGLVFXVVLRQ DUUHVWHG,GDW7KH6XSUHPH&RXUWKDVFRQVWUXHGWKH VXSUDDWEXWDSSOLHGRQO\LQDFRQFOXVRU\PDQQHUWRWKH DUHDZLWKLQDSHUVRQjVLPPHGLDWHFRQWUROWRLQFOXGHWKHmDUHD GHFLVLRQ RI WKH 0LFKLJDQ &RXUW RI $SSHDOV 3HRSOH Y IURPZLWKLQZKLFKKHPLJKWJDLQSRVVHVVLRQRIDZHDSRQRU 1RUWKURS 1: G 0LFK &W $SS GHVWUXFWLEOHHYLGHQFHl,G SODFHDQHYHQKHDYLHUEXUGHQRQWKHSHWLWLRQHUWKDQWKHRQH LPSRVHGE\0RUULVRQ +RZHYHU WKH ULJKW WR VHDUFK DQ LWHP LQFLGHQW WR DUUHVW H[LVWV HYHQ LI WKDW LWHP LV QR ORQJHU DFFHVVLEOH WR WKH 7DNLQJ WKH IDFWV DV WKH\ KDYH EHHQ SUHVHQWHG WR XV GHIHQGDQWDWWKHWLPHRIWKHVHDUFK6RORQJDVWKHGHIHQGDQW 1RUWKURSFDQQRWWDNHWKHILUVWVWHSWRZDUGPHHWLQJKLVEXUGHQ KDGWKHLWHPZLWKLQKLVLPPHGLDWHFRQWUROQHDUWKHWLPHRIKLV EHFDXVHKHGRHVQRWHYHQKDYHDYDOLG)RXUWK$PHQGPHQW DUUHVWWKHLWHPUHPDLQVVXEMHFWWRDVHDUFKLQFLGHQWWRDUUHVW FODLPEDVHGRQKLVLQLWLDOHQFRXQWHUZLWKWKHSROLFH$7HUU\ 1HZ M@XGLFLDOVFUXWLQ\RI HYLGHQFH+LVIDLOXUHWRGRVRSUHMXGLFHG1RUWKURS FRXQVHO V SHUIRUPDQFH PXVW EH KLJKO\ GHIHUHQWLDOl 6WULFNODQG 86 DW ZH FDQ WKLQN RI QR SRVVLEOH 7KH)RXUWK$PHQGPHQWOLPLWVSROLFHRIILFHUVjDXWKRULW\WR VWUDWHJLF PHULW LQ QHJOHFWLQJ WR VHHN WKH VXSSUHVVLRQ RI GHWDLQLQGLYLGXDOV86&RQVWDPHQG,9 m7KHULJKWRIWKH GDPQLQJHYLGHQFHGLVFRYHUHGDIWHUDVWRSEDVHGVROHO\XSRQ SHRSOHWREHVHFXUHLQWKHLUSHUVRQVDJDLQVWXQUHDVRQDEOH DQDQRQ\PRXVWLSODFNLQJSUHGLFWLYHGHWDLO VHL]XUHVVKDOOQRWEHYLRODWHGl 6SHFLILFDOO\DQ ,9&RQFOXVLRQ )RUWKHUHDVRQVVHWIRUWKDERYHZH$)),50WKHMXGJPHQW ,Q WKLV SHWLWLRQ 1RUWKURS GRHV QRW FKDOOHQJH WKH 0LFKLJDQ RIWKHGLVWULFWFRXUW &RXUW RI $SSHDOVj DUWLFXODWLRQ RI WKH OHJDO SULQFLSOHV DSSOLFDEOH WR KLV 6L[WK $PHQGPHQW FODLP ,QVWHDG 1RUWKURS LQVLVWV WKH FRXUW PLVDSSOLHG WKRVH OHJDO SULQFLSOHV LQ GHQ\LQJ KLV FODLP $FFRUGLQJO\ ZH GHFLGH ZKHWKHU WKH 0LFKLJDQ &RXUW RI $SSHDOV XQUHDVRQDEO\ DSSOLHG FRQWUROOLQJ SUHFHGHQW LQ ILQGLQJ 1RUWKURS KDG IDLOHG WR VKRZ %UDYHUPDQ SHUIRUPHG LQHIIHFWLYHO\ 1RUWKURSY7ULSSHWW 1R 1R 1RUWKURSY7ULSSHWW RIILFHUFDQQRWDUUHVWDQLQGLYLGXDODEVHQWSUREDEOHFDXVHLH ,Q VXSSRUW RI WKLV DUJXPHQW 5HVSRQGHQW UHOLHV RQ WKH DmIDLUSUREDELOLW\lWKDWWKHLQGLYLGXDOKDVHLWKHUFRPPLWWHGRU 6XSUHPH&RXUWjVRSLQLRQLQ/RFNKDUWY)UHWZHOO86 LQWHQGVWRFRPPLWDFULPH8QLWHG6WDWHVY6RNRORZ 6&W/(GG ,QWKDWFDVH 86 6&W/(GG )XUWKHU WKH &RXUW IRXQG WULDO FRXQVHOjV IDLOXUH WR REMHFW WKDW DQ DQRIILFHUFDQQRWHYHQEULHIO\GHWDLQDQLQGLYLGXDOXQOHVVWKH DJJUDYDWLQJIDFWRULQDGHDWKSHQDOW\FDVHXQFRQVWLWXWLRQDOO\ RIILFHUUHDVRQDEO\VXVSHFWVWKHLQGLYLGXDOKDVEHHQLQYROYHG GXSOLFDWHGDQHOHPHQWRIWKHXQGHUO\LQJIHORQ\PXUGHUFKDUJH LQFULPLQDODFWLYLW\7HUU\Y2KLR 866 GLGQRWFRQVWLWXWHWKHmSUHMXGLFHlUHTXLUHGWRVKRZLQHIIHFWLYH &W/(GG DVVLVWDQFHRIFRXQVHO5DWKHUWKDQIRFXVLQJRQZKHWKHUWKH XOWLPDWHRXWFRPHPLJKWKDYHFKDQJHG/RFNKDUWVDLGKDEHDV 7KHUH LV QR TXHVWLRQ WKDW s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m2EYLRXVO\QRWDOOSHUVRQDOLQWHUFRXUVHEHWZHHQSROLFHPHQ EHFDXVHWKHRXWFRPHZRXOGKDYHEHHQGLIIHUHQWEXWIRU DQG FLWL]HQV LQYROYH VHL]XUHV RI SHUVRQV 2QO\ ZKHQ WKH FRXQVHO V HUURU PD\ JUDQW WKH GHIHQGDQW D ZLQGIDOO WR RIILFHUE\PHDQVRISK\VLFDOIRUFHRUVKRZRIDXWKRULW\KDV ZKLFKWKHODZGRHVQRWHQWLWOHKLP LQ VRPH ZD\ UHVWUDLQHG WKH OLEHUW\ RI D FLWL]HQ PD\ ZH FRQFOXGHWKDWDVHL]XUHKDVRFFXUUHGl,GDW Q LQWHUQDO ,GDW VHHDOVR+ROPDQY3DJH )G WK TXRWDWLRQVRPLWWHG 7KHWHVWLVZKHWKHUFRQVLGHULQJDOORI &LU m>,@Q WKH FRQWH[W RI DQ LQHIIHFWLYH DVVLVWDQFH WKHFLUFXPVWDQFHVmDUHDVRQDEOH SHUVRQZRXOGIHHOIUHHWR FODLPµDJRRG)RXUWK$PHQGPHQWFODLPDORQHZLOOQRWHDUQ GHFOLQH WKH RIILFHUV UHTXHVWV RU RWKHUZLVH WHUPLQDWH WKH D SULVRQHU IHGHUDO KDEHDV UHOLHI 7KHUH PXVW EH PRUH HQFRXQWHUl,G 6RPHWKLQJPXVWFDOOLQWRTXHVWLRQWKHYDOLGLW\RUIDLUQHVVRI WKHWULDOjl TXRWLQJ0RUULVRQ86DW +HUHDUHDVRQDEOHSHUVRQLQ1RUWKURSjVSRVLWLRQZRXOGQRW KDYH IHOW IUHH WR WHUPLQDWH WKH HQFRXQWHU ZLWK sDFNVRQ DQG +RZHYHUWKH6XSUHPH&RXUWKDVUHFHQWO\PDGHFOHDUWKDW &ROOLQV1RUWKURSVRXJKWWROHDYHWKHDUHDEHIRUHsDFNVRQ WKH RXWFRPHGHWHUPLQDWLYH WHVW VHW IRUWK LQ 6WULFNODQG GLUHFWHG&ROOLQVWRVWRSKLPsDFNVRQKDVWHVWLILHG WKDWKH JHQHUDOO\ GHWHUPLQHV ZKHWKHU WULDO FRXQVHOjV SHUIRUPDQFH ZRXOG QRW KDYH OHW 1RUWKURS ZDON DZD\ mGXULQJ P\ SUHMXGLFHGDKDEHDVSHWLWLRQHU:LOOLDPV 86DW LQYHVWLJDWLRQRIKLPl$QGWKHRIILFHUVJDYH1RUWKURSD m&DVHVVXFKDV/RFNKDUWGRQRWMXVWLI\DGHSDUWXUH FOHDULQGLFDWLRQWKDWKHZDVQRWIUHHWROHDYHE\DVNLQJKLPWR IURP D VWUDLJKWIRUZDUG DSSOLFDWLRQ RI 6WULFNODQG ZKHQ WKH LQHIIHFWLYHQHVV RI FRXQVHO GRHV GHSULYH WKH GHIHQGDQW RI D VXEVWDQWLYH RU SURFHGXUDO ULJKW WR ZKLFK WKH ODZ HQWLWOHV KLPl *ORYHUY8QLWHG6WDWHV86 6&W / (G G m7KH &RXUW H[SODLQHG ODVW sDFNVRQ WHVWLILHG DW WKH WULDO FRXUWjV KHDULQJ RQ 1RUWKURSjV 7HUP WKDW RXU KROGLQJ LQ /RFNKDUW GLG QRW VXSSODQW WKH LQHIIHFWLYH DVVLVWDQFH RI FRXQVHO FODLP 3HRSOH Y *LQWKHU 1:G 6WULFNODQGDQDO\VLVl /LNHZLVHWKLVFRXUWKDVUHFRJQL]HG 0LFK HVWDEOLVKLQJ VWDWH FRXUW SURFHHGLQJ IRU FODLPV RI LQHIIHFWLYH DVVLVWDQFH RI FRXQVHO 1RUWKURSY7ULSSHWW 1R 1R 1RUWKURSY7ULSSHWW 1RUWKURSj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jV DVVHUWLRQ WKH UHFRUG VXSSRUWV sDFNVRQjVVWRS 1RUWKURSjV FODLP WKDW 2IILFHU &ROOLQV VWRSSHG 1RUWKURS DIWHU 1RUWKURS DWWHPSWHG WR H[LW WKH EXV VWDWLRQ DV 2IILFHUV &ROOLQV DQG sDFNVRQ +DYLQJ IRXQG %UDYHUPDQjV UHSUHVHQWDWLRQ GHILFLHQW ZH DSSURDFKHG 7KH GLVVHQW LV DOVR ZURQJ LQ VXJJHVWLQJ WKDW 1RUWKURS QH[WDGGUHVVZKHWKHU%UDYHUPDQjVSHUIRUPDQFHSUHMXGLFHG DSSURDFKHG WKH 2IILFHUV DW WKH 2IILFHUjV UHTXHVW $W WKH *LQWKHU KHDULQJ 2IILFHU sDFNVRQ WHVWLILHG 1RUWKURS 7R HVWDEOLVK SUHMXGLFH 1RUWKURS PXVW VKRZ D UHDVRQDEOHSUREDELOLW\WKDWmEXWIRUFRXQVHO VXQSURIHVVLRQDO 4 Z@KHUH GHIHQVH FRXQVHO V IDLOXUH WR OLWLJDWH D )RXUWK $ 1R $PHQGPHQWFODLPFRPSHWHQWO\LVWKHSULQFLSDODOOHJDWLRQRI 4 +RZ GLG 0U 1RUWKURS JHW RXW RI KLV VHDW" LQHIIHFWLYHQHVVWKHGHIHQGDQWPXVWDOVRSURYHWKDWKLV)RXUWK $PHQGPHQW FODLP LV PHULWRULRXV DQG WKDW WKHUH LV D $ +H VWRRG XS UHDVRQDEOH SUREDELOLW\ WKDW WKH YHUGLFW ZRXOG KDYH EHHQ GLIIHUHQW DEVHQW WKH H[FOXGDEOH HYLGHQFH LQ RUGHU WR 4 :LWKRXW \RX RU \RXU SDUWQHU DVNLQJ KLP RU GHPRQVWUDWHDFWXDOSUHMXGLFHl0RUULVRQ86DW WHOOLQJ KLP WR VWDQG XS" $ &RUUHFW :HKDYHDOUHDG\IRXQGWKDW1RUWKURSjV)RXUWK$PHQGPHQW FODLPKDGPHULW7KXVZHQHHGRQO\GHFLGHLIWKHYHUGLFWDW 4 6R DW WKLV SRLQW SULRU WR 0U 1RUWKURS MXVW 1RUWKURSjV WULDO mZRXOG KDYH EHHQ GLIIHUHQW DEVHQW WKH VWDQGLQJ XS XS RQ KLV RZQ \RX DQG \RXU H[FOXGDEOHHYLGHQFHl,G SDUWQHU KDG QRW FRQGXFWHG DQ\ SHUVRQDO VXUYHLOODQFH WR GHWHUPLQH LI WKHUH ZHUH DQ\ QDUFRWLF VHOOLQJ RU DQ\ VXFK DFWLYLW\ EHLQJ 0LFKLJDQ FRQYLFWHG 1RUWKURS RI FRFDLQH SRVVHVVLRQ FRQGXFWHG E\ 0U 1RUWKURS RU WKLV RWKHU :LWKRXWWKHLQDGPLVVLEOHFRFDLQHHYLGHQFH0LFKLJDQZRXOG JHQWOHPDQ LQ WKH JUHHQ 8VHG RXWILW KDG \RX" REYLRXVO\KDYHIDLOHGWRPHHWLWVEXUGHQRISURYLQJ1RUWKURS SRVVHVVHGFRFDLQH7KXV%UDYHUPDQjVIDLOXUHWRPRYHIRUWKH $ 1R VXSSUHVVLRQRIWKHFRFDLQHHYLGHQFHSUHMXGLFHG1RUWKURS 4 6R DIWHU 0U 1RUWKURS VWRRG XS GLG KH SURFHHG WR ZDON DQ\ZKHUH" %XW5HVSRQGHQW:DUGHQ7ULSSHWWVD\V1RUWKURSPXVWVKRZ PRUHWRHVWDEOLVKSUHMXGLFH5HVSRQGHQWVD\V%UDYHUPDQjV $ 2IILFHU@ &ROOLQV KDG FDPH LQ VXSSUHVVLRQPRWLRQFRXOGQRWKDYHSUHMXGLFHG1RUWKURS 4 +DG \RX VDLG DQ\WKLQJ WR 0U 1RUWKURS \RX 1RUWKURSY7ULSSHWW 1R 1R 1RUWKURSY7ULSSHWW HYLGHQFHEHIRUHWKH0LFKLJDQ&RXUWVDQGWKHGLVWULFWFRXUWGR $QG%UDYHUPDQVKRXOGKDYHUHFRJQL]HGDVPXFK+HNQHZ QRW VXSSRUW WKH GLVVHQWjV DVVHUWLRQ WKDW m&ROOLQV VDLG WKHRIILFHUVVWRSSHG1RUWKURSEDVHGVROHO\RQDQRQSUHGLFWLYH UHSHDWHGO\WKDWKLVSDUWQHUZDVLQLWLDOO\WDONLQJWR1RUWKURS DQRQ\PRXVWLS3ULRUWR1RUWKURSjVWULDOWKH6XSUHPH&RXUW ZKLOH1RUWKURSZDVµVLWWLQJWKHUHjl,QIUDDWBBBBB VXJJHVWHGVXFKDWLSJHQHUDOO\FRXOGQRWVXSSRUWD7HUU\VWRS :KLWH 86DW ,QGHHGLQILQGLQJDVWRSEDVHGRQD QRQSUHGLFWLYH DQRQ\PRXV WLS XQODZIXO WKH &RXUW LQ s/ DSSOLHG VWDQGDUGV GLVFHUQDEOH IURP:KLWH DQG RWKHU HDUOLHU RU \RXU SDUWQHU DW WKLV SRLQW" FDVHVs/ 86DW)LQDOO\EHFDXVHWKHIUXLWRI $ 1R WKH SRLVRQRXV WUHH GRFWULQH KDV ORQJ H[FOXGHG HYLGHQFH UHFRYHUHGDVDUHVXOWRIDQXQODZIXOVHL]XUH6HJXUD86 4 +DG o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jP VRUU\ , DVNHG WKH HIIHFW WZR EODFN PDOHV VXVSHFWHG RI RWKHU VXEMHFW WR FRPH WR PH 0\ SDUWQHU , VHOOLQJ QDUFRWLFV RQH GUHVVHG LQ D EHOLHYH KH ZHQW WR 0U 1RUWKURS JUHHQ 8VHG MHDQ RXWILW" 4 2ND\ $QG GLG \RX ZKHQ \RX ZHUH WDONLQJ WR $