5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 8QLWHG6WDWHVY$OYDUH]HWDO 1RV 3XUVXDQW WR 6L[WK &LUFXLW 5XOH (/(&7521,& &,7$7,21 )(' $SS 3 WK &LU RPLWWHG7KHUHIRUHm>D@JJUDYDWLQJIDFWRUVRWKHUWKDQDSULRU )LOH 1DPH DS FRQYLFWLRQ WKDW LQFUHDVH WKH SHQDOW\ IURP D QRQPDQGDWRU\ PLQLPXP VHQWHQFH WR D PDQGDWRU\ PLQLPXP VHQWHQFH RU IURP D OHVVHU WR D JUHDWHU PLQLPXP VHQWHQFH DUH QRZ 81,7('67$7(6&28572)$33($/6 HOHPHQWVRIWKHFULPHWREHFKDUJHGDQGSURYHGl,GDW )257+(6,;7+&,5&8,7 BBBBBBBBBBBBBBBBB ,QWKHFDVHDWEDU$SSUHQGLLVLQDSSOLFDEOHIRUWZRUHDVRQV )LUVWWKHMXU\ZDVLQVWUXFWHGWRUHWXUQDYHUGLFWRIJXLOW\RQ &RXQW7ZRRIWKHLQGLFWPHQWLIm>W@KHFRQVSLUDF\LQYROYHGDW 81,7(' 67$7(6 2) $0(5,&$ ; OHDVWNLORJUDPVRUSRXQGVRIPDULMXDQDlsXU\ 3ODLQWLII$SSHOOHH ,QVWUXFWLRQVsRLQW$SSHQGL[DWS7KHUHIRUHWKHMXU\KDV DOUHDG\IRXQGWKDWWKHDSSHOODQWLVUHVSRQVLEOHIRUWKHUHTXLVLWH 1RV DPRXQW RI GUXJV EH\RQG D UHDVRQDEOH GRXEW 6HFRQG WKH Y VWDWXWRU\ SHQDOWLHV DYDLODEOH IRU D YLRODWLRQ RI 86& ! H$LQFOXGHLPSULVRQPHQWIRUOLIH7KHUHIRUHWKH (/,6(2 &$/'(5$ $/9$5(= VHQWHQFHLQWKLVFDVHGRHVQRWH[FHHGWKHVWDWXWRU\PD[LPXP s5 5$8/ FRQWHPSODWHG E\ ODZ $FFRUGLQJO\ WKH GLVWULFW FRXUWjV 6$17,$*2 *21=$/(6 GHWHUPLQDWLRQUHJDUGLQJVHQWHQFLQJLVDIILUPHG *$5&,$ 9&21&/86,21 'HIHQGDQWV$SSHOODQWV 1 7KHUHIRUH WKH MXGJPHQWV RI WKH GLVWULFW FRXUW DUH $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW $)),50(' IRUWKH:HVWHUQ'LVWULFWRI0LFKLJDQDW*UDQG5DSLGV 1Rn*RUGRQs4XLVW'LVWULFWsXGJH $UJXHG$XJXVW 'HFLGHGDQG)LOHG6HSWHPEHU %HIRUH68+5+(,15,&+DQG6,/(5&LUFXLWsXGJHV +22''LVWULFWsXGJH 7KH +RQRUDEOH sRVHSK 0 +RRG 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH (DVWHUQ 'LVWULFW RI .HQWXFN\ VLWWLQJ E\ GHVLJQDWLRQ 8QLWHG6WDWHVY$OYDUH]HWDO 1RV 1RV 8QLWHG6WDWHVY$OYDUH]HWDO BBBBBBBBBBBBBBBBB GHWHUPLQDWLRQLQFUHDVHGWKHPD[LPXPSHQDOW\IRUWKHFULPH FKDUJHG LQ WKH LQGLFWPHQWl 5HEPDQQ )G DW &2816(/ $SSUHQGLH[SOLFLWO\DSSOLHVRQO\WRWKRVHVLWXDWLRQVLQZKLFK mDIDFWXDOGHWHUPLQDWLRQPDGHXQGHUDOHVVHUVWDQGDUGRISURRI $5*8(' &KULVWRSKHU 3 @ WKH $UULYLQJKRPHIURPWKHLUVRQ(ULFjVOLWWOHOHDJXHEDVHEDOO PD[LPXPSHQDOW\IRUWKHFULPHFRPPLWWHGQRUFUHDWH>@ JDPHRQsXQH'HEUDDQG(GZDUG3HUH]ZHUHPHWLQ DVHSDUDWHRIIHQVHFDOOLQJIRUDVHSDUDWHSHQDOW\j WKHLUGULYHZD\E\WKHWZRDSSHOODQWV7KHDSSHOODQWVZHQW LQWRWKHKRXVHDQGGLVFXVVHGWKHZHDWKHUZLWK(GZDUG3HUH] 8QLWHG6WDWHVY6WUD\KRUQ)GWK&LU ZKRRIIHUHGWKHPVRPHEHHU$IWHUDIHZPLQXWHV(GZDUG FLWLQJ 0F0LOODQ Y 3HQQV\OYDQLD 86 3HUH]DQGWKHWZRDSSHOODQWVZHQWRXWWRWKHEDUQRQWKH3HUH] 7R SXW LW DQRWKHU ZD\ WKH 6L[WK &LUFXLW KDV SURSHUW\$ERXWWZHQW\PLQXWHVODWHU$OYDUH]FDPHXSWRWKH GHWHUPLQHG WKDW mWKH DVVHVVPHQW RI IDFWV WKDW LQFUHDVH WKH VOLGLQJJODVVGRRUDWWKHKRXVHWRDVN0UV3HUH]ZKHUHWKH SUHVFULEHGUDQJHRISHQDOWLHVWRZKLFKDFULPLQDOGHIHQGDQWLV IDPLO\GRJZDV0D[DGRJNQRZQIRUKLVPHDQGLVSRVLWLRQ H[SRVHGVXFKDVPRYLQJXSWKHVFDOHRIPDQGDWRU\PLQLPXP ZDVLQWKHKRXVHZLWK0UV3HUH]$OYDUH]FORVHGWKHGRRU VHQWHQFHVLQYRNHVWKHIXOOUDQJHRIFRQVWLWXWLRQDOSURWHFWLRQV DQGZDONHGRIIWKHKRPHjVEDFNSRUFK UHTXLUHG IRU µHOHPHQWV RI WKH FULPHjl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jFDUZDVQRORQJHULQKHUGULYHZD\0UV ZKLFKVKDOOQRWEHOHVVWKDQ\HDUVDQGZKLFKPD\EH 3HUH] IRXQG KHU KXVEDQG LQ WKH EDFN URRP RI WKH EDUQ XSWROLIHLPSULVRQPHQW KDQGFXIIHGDQGEORRG\O\LQJIDFHGRZQRQWKHIORRU ,G,QRUGHUWRDVHFXUHDFRQYLFWLRQWKLVVWDWXWHUHTXLUHVWKDW 7KHDXWRSV\VKRZHGWKDW(GZDUG3HUH]KDGIDFLDOLQMXULHV WKHGHIHQGDQWEHZRUNLQJmLQIXUWKHUDQFHlRIWKHFRQWLQXLQJ FRQVLVWHQWZLWKDNQLIHKDYLQJEHHQGUDZQDFURVVKLVQRVH FULPLQDO HQWHUSULVH ,G 7KH OHJLVODWLRQ GRHV QRW UHTXLUH FKLQDQGPRXWK+HKDGDWZRLQFKEUXLVHRQKLVFKHHNDQG SHUVRQDO UHVSRQVLELOLW\ IRU HDFK DFWLRQ WDNHQ E\ WKH YDULRXVRWKHUEOXQWIRUFHLQMXULHVWRKLVIDFH7KHSDOPRIKLV FRQVSLUDF\*RQ]DOH]jVSDUWLFLSDWLRQIXUWKHUHGWKHZRUNRI ULJKW KDQG KDG D VWDE ZRXQG LQ DQ /VKDSH SRVVLEO\ WKH FULPLQDO HQWHUSULVH DV D ZKROH DQG WKH FRQVSLUDF\j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jVILQGLQJVRQWKLVPDWWHU FKHVW+HZDVSURQRXQFHGGHDGDWWKHVFHQH (1RQFRPSOLDQFHZLWK$SSUHQGLY1HZsHUVH\ 7ULDOWHVWLPRQ\LQGLFDWHGWKDW(GZDUG3HUH]jVVROHVRXUFH RI LQFRPH FDPH IURP WKH VDOH RI PDULMXDQD ZKLFK ZDV 7KH 6L[WK &LUFXLW KDV GHDOW ZLWK D QXPEHU RI FDVHV SXUFKDVHG IURP $OYDUH] *RQ]DOHV*DUFLD KDG PHW ZLWK LQYROYLQJWKHDSSOLFDWLRQRI$SSUHQGLY1HZsHUVH\86 3HUH]RQDWOHDVWWZRRWKHURFFDVLRQVEHIRUHKLVGHDWKRQsXQH 7KH6XSUHPH&RXUWHVWDEOLVKHGLQ$SSUHQGLWKDW ,Q$SULORI*RQ]DOHV*DUFLDDFFRPSDQLHG >R@WKHU WKDQ WKH IDFW RI D SULRU FRQYLFWLRQ DQ\ IDFW WKDW $OYDUH]WRFROOHFWPRQH\IURP3HUH]2YHU0HPRULDO'D\ LQFUHDVHV WKH SHQDOW\ IRU D FULPH EH\RQG WKH SUHVFULEHG ZHHNHQG$OYDUH]DQG*RQ]DOHV*DUFLDDUULYHGRQFH VWDWXWRU\PD[LPXPPXVWEHVXEPLWWHGWRDMXU\DQGSURYHG DJDLQ ORRNLQJ IRU (GZDUG 3HUH] DV WKH 3HUH] IDPLO\ ZDV EH\RQGDUHDVRQDEOHGRXEW,GDWm7KLVFLUFXLW KDV PRYLQJ LQWR D QHZ KRPH 7HVWLPRQ\ LQGLFDWHV WKDW 3HUH] DSSOLHG $SSUHQGL WR GUXJ FDVHV UHTXLULQJ WKDW IDFWXDO RZHGDODUJHDPRXQWRIPRQH\WRWKHGHIHQGDQWVIRUXQSDLG GHWHUPLQDWLRQVZKLFKLQFUHDVHWKHPD[LPXPVHQWHQFHIRUWKH VKLSPHQWVRIPDULMXDQD FULPH FKDUJHG LQ WKH LQGLFWPHQW PXVW EH PDGH µEH\RQG D UHDVRQDEOHGRXEWjl8QLWHG6WDWHVY*DUFLD)G 2Q0DUFKDJUDQGMXU\LQWKH:HVWHUQ'LVWULFWRI WK&LUTXRWLQJ8QLWHG6WDWHVY5HEPDQQ 0LFKLJDQ UHWXUQHG D WZRFRXQW VXSHUVHGLQJ LQGLFWPHQW )GWK&LU DJDLQVWWKHDSSHOODQWVDQGWZRRWKHUGHIHQGDQWV&RXQW2QH FKDUJHGWKHDSSHOODQWVZLWKFRQVSLULQJWRGLVWULEXWHPDULMXDQD 7KH5HEPDQQFRXUWGHWHUPLQHGWKDWmWKHUHVSRQVLELOLW\RI IURP WR sXO\ &RXQW 7ZR DOOHJHG WKDW WKH DQDSSHOODWHFRXUWUHYLHZLQJLPSRVLWLRQRIµHQKDQFHPHQWVj DSSHOODQWV LQWHQWLRQDOO\ NLOOHG (GZDUG 3HUH] RQ sXQH SRVW$SSUHQGLLVWRH[DPLQHZKHWKHUWKHVHQWHQFLQJIDFWRU LQWKHFRXUVHRIWKHFRQVSLUDF\WRGLVWULEXWHPDULMXDQD LQ WKLV FDVH ZDV D IDFWXDO GHWHUPLQDWLRQ DQG ZKHWKHU WKDW 8QLWHG6WDWHVY$OYDUH]HWDO 1RV 1RV 8QLWHG6WDWHVY$OYDUH]HWDO 7KHDSSHOODQWVZHUHWULHGVHSDUDWHO\DQGERWKZHUHFRQYLFWHG 86 $Q DSSHOODQW mFODLPLQJ *RQ]DOHV*DUFLDZDVVHQWHQFHGWRWKHVWDWXWRU\PD[LPXPRI LQVXIILFLHQF\RIWKHHYLGHQFHEHDUVDKHDY\EXUGHQl8QLWHG PRQWKV LPSULVRQPHQW RQ &RXQW 2QH DQG OLIH 6WDWHVY0DOLV]HZVNL)GWK&LU LPSULVRQPHQWRQ&RXQW7ZR$OYDUH]ZDVVHQWHQFHGWRWZR 7KH 8QLWHG 6WDWHV PD\ mPHHW LWV EXUGHQ WKURXJK FRQFXUUHQWOLIHVHQWHQFHVIRUWKHFRQYLFWLRQVRQ&RXQWV2QH FLUFXPVWDQWLDOHYLGHQFHDORQHDQGVXFKHYLGHQFHQHHGQRW DQG 7ZR %RWK 'HIHQGDQWV KDYH ILOHG D WLPHO\ QRWLFH RI H[FOXGH HYHU\ SRVVLEOH K\SRWKHVLV H[FHSW WKDW RI JXLOWl DSSHDO 8QLWHG6WDWHVY6DOJDGR)GWK&LU ,,s85,6',&7,21 ,QDVVHVVLQJWKHVXIILFLHQF\RIWKHHYLGHQFHWKHFRXUWGRHV mQRW ZHLJK WKH HYLGHQFH DVVHVV WKH FUHGLELOLW\ RI WKH 7KH&RXUWRI$SSHDOVKDVMXULVGLFWLRQRYHUWKHGLUHFWDSSHDO ZLWQHVVHVRUVXEVWLWXWHRXUMXGJPHQWIRUWKDWRIWKHMXU\l,G RIFULPLQDOFRQYLFWLRQVDQGVHQWHQFHVSXUVXDQWWR7LWOH FLWDWLRQVRPLWWHG:KHQUHYLHZLQJDGHIHQGDQW VFODLPRI 86&$DQG7LWOH86& LQVXIILFLHQF\WKHFRXUWGUDZVmDOODYDLODEOHLQIHUHQFHVDQG UHVROYH>V@ DOO LVVXHV RI FUHGLELOLW\ LQ IDYRU RI WKH MXU\ V ,,,&/$,062)(5525 YHUGLFWl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jV HYLGHQWLDU\ UXOLQJ RQ WKH VXSSRUW WKLV FRQVSLUDF\ WKH HYLGHQFH SUHVHQWHG DW WULDO DGPLVVLELOLW\ RIDKHDUVD\VWDWHPHQWXQGHU)HGHUDO5XOHRI DOORZHGWKHMXU\WRFRQFOXGHWKDWWKHFRQVSLUDF\GHDOWZLWK (YLGHQFHEIRUDEXVHRIGLVFUHWLRQ6HH8QLWHG6WDWHV RYHU NLORJUDPV RI PDULMXDQD 7KH MXU\ PDGH WKLV Y3ULFH)GWK&LU8QLWHG6WDWHVY ILQGLQJ E\ UHWXUQLQJ D JXLOW\ YHUGLFW RQ &RXQW 7ZR RI WKH +LOOLDUG)GWK&LU LQGLFWPHQW,QRUGHUWRUHWXUQVXFKDYHUGLFWWKHMXU\ZDV UHTXLUHGWRGHWHUPLQHWKDWm>W@KHFRQVSLUDF\LQYROYHGDWOHDVW 7KH VHFRQG DQG WKLUG FODLPV RI HUURU HPDQDWH IURP WKH NLORJUDPV RU SRXQGV RI PDULMXDQDl sXU\ GLVWULFW FRXUWjV LQVWUXFWLRQV WR WKH MXULHV *RQ]DOHV*DUFLD ,QVWUXFWLRQVsRLQW$SSHQGL[DWS$VWKHDSSHOODQWGRHV DOOHJHV WKDW WKH GLVWULFW MXGJHjV IDLOXUH WR LQVWUXFW WKH MXU\ QRWDVVHUWWKDWWKHHYLGHQFHIDLOHGWRVXSSRUWDILQGLQJWKDWWKH UHJDUGLQJ$OYDUH]jVUHOHYDQWFRQGXFWLVUHYHUVLEOHHUURU$ FRQVSLUDF\LQYROYHGRYHUNLORJUDPVRIPDULMXDQDWKH GLVWULFW FRXUW V UHIXVDO WR JLYH D VSHFLILFDOO\ UHTXHVWHG MXU\ FRXUW ZLOO RQO\ DGGUHVV WKH WULDO MXGJHjV GHWHUPLQDWLRQ WKDW LQVWUXFWLRQLVUHYLHZHGIRUDEXVHRIGLVFUHWLRQ6HH)LVKHUY *RQ]DOH] ZDV QRW UHTXLUHG WR EH SHUVRQDOO\ OLDEOH IRU WKH )RUG0RWRU&R)GWK&LU8QLWHG NLORJUDPV RI GUXJV LQ RUGHU WR EH FRQYLFWHG XQGHU 6WDWHVY%DNHU)GWK&LU8QLWHG &RXQW7ZRRIWKHLQGLFWPHQW 6WDWHVY)URVW)GWK&LU$OVRERWK GHIHQGDQWV DOOHJH WKDW WKH GLVWULFW FRXUWjV MXU\ LQVWUXFWLRQV &RXQW 7ZR DVVHUWHG D FODLP DJDLQVW *RQ]DOH] XQGHU HOXFLGDWLQJ WKH WHUP mLQWHQWLRQDO NLOOLQJl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jV LQVWUXFWLRQV DFFXUDWHO\ 7KH IRXUWK DQG ILIWK FODLPV RI HUURU LQYROYH WKH GLVWULFW UHIOHFWHG WKH VWDWXWRU\ SURYLVLRQV RI 86& LQ FRXUWjVGHWHUPLQDWLRQWKDWWKHDPRXQWRIPDULMXDQDLQYROYHG FRQIRUPDQFHZLWK&RXQW7ZRRIWKHLQGLFWPHQWWKLVFRXUW LQWKLVFRQVSLUDF\H[FHHGHGNLORJUDPVDQGWKDWVDLG ILQGVQRHUURULQWKHGLVWULFWFRXUWjVLQVWUXFWLRQV DPRXQWFRXOGEHXWLOL]HGWRFDOFXODWHWKHVHQWHQFHVIRUERWK $SSHOODQWV *RQ]DOHV*DUFLD FODLPV WKDW WKHUH ZDV ' 6XIILFLHQF\ RI (YLGHQFH 5HJDUGLQJ 4XDQWLW\ RI LQVXIILFLHQW HYLGHQFH WR FRQFOXGH WKDW KH FDQ EH KHOG 0DULMXDQD UHVSRQVLEOH IRU RYHU RQHWKRXVDQG NLORJUDPV RI PDULMXDQD WUDIILFNLQJ7KHWULDOMXGJHGHQLHGKLVUHTXHVWIRUDFTXLWWDORQ $SSHOODQW *RQ]DOH] DVVHUWV WKDW WKH GLVWULFW FRXUW &RXQW 2QH :KHQ UHYLHZLQJ D GLVWULFW FRXUWjV GHQLDO RI D LPSURSHUO\ GHQLHG KLV 5XOH PRWLRQ IRU D MXGJPHQW RI PRWLRQIRUDFTXLWWDOWKHUHOHYDQWTXHVWLRQLVZKHWKHUDIWHU DFTXLWWDORQ&RXQW7ZRRIWKHLQGLFWPHQW*RQ]DOH]DUJXHV YLHZLQJ WKH HYLGHQFH LQ WKH OLJKW PRVW IDYRUDEOH WR WKH WKDWKHLVQRWJXLOW\RIYLRODWLQJ86&EHFDXVHKH SURVHFXWLRQDQ\UDWLRQDOWULHURIIDFWFRXOGKDYHIRXQGWKH LV QRW SHUVRQDOO\ UHVSRQVLEOH IRU WKH NLORJUDPV RI HVVHQWLDOHOHPHQWVRIWKHFULPHEH\RQGDUHDVRQDEOHGRXEW PDULMXDQDUHTXLUHGIRUDFRQYLFWLRQXQGHUWKLVVWDWXWH7KH s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m6WDWXWRU\LQWHUSUHWDWLRQLVD VWDWXWH :KLOH NLORJUDPV LV WKH SUHUHTXLVLWH DPRXQW TXHVWLRQRIODZZKLFKWKLV&RXUWUHYLHZVGHQRYRl8QLWHG UHTXLUHG IRU D FRQYLFWLRQ WKH GLVWULFW FRXUW UXOHG WKDW VDLG 6WDWHVY+HDOWK3RVVLELOLWLHV36&)GWK DPRXQWFRXOGEHLPSXWHGWR*RQ]DOH]DVWKHHQWLUHFRQVSLUDF\ &LU8QLWHG6WDWHVY&DVVLG\)GWK LOOHJDOO\VROGDQGWUDQVSRUWHGWKDWTXDQWLW\RIPDULMXDQD,Q &LU,QUH9DXVH)GWK&LU HVVHQFH *RQ]DOH] ZDV IRXQG WR EH D PHPEHU RI WKH FRQVSLUDF\RQHZKRDLGHGDQGDEHWWHGWKHLOOHJDOWUDQVSRUW 7KH ILIWK DQG ILQDO LVVXH LQYROYHV WKH DSSOLFDWLRQ RI DQG VDOH RI WKH SUHUHTXLVLWH TXDQWLW\ RI GUXJV WKHUHIRUH $SSUHQGLY1HZsHUVH\86WRWKHFDVHDW *RQ]DOH]ZDVDSSURSULDWHO\FRQYLFWHGXQGHU&RXQW7ZRRI EDU7KH6L[WK&LUFXLWKDVSUHYLRXVO\KHOGWKDWm$SSUHQGL WKHLQGLFWPHQW H[SOLFLWO\ DSSOLHV RQO\ LQ WKRVH VLWXDWLRQV ZKHUH D IDFWXDO GHWHUPLQDWLRQPDGHXQGHUDOHVVHUVWDQGDUGRISURRIWKDQWKH ,Q UHYLHZLQJ WKH GHQLDO RI D PRWLRQ IRU DFTXLWWDO WKH UHDVRQDEOHGRXEWVWDQGDUGµLQFUHDVHVWKHSHQDOW\IRUDFULPH UHOHYDQWTXHVWLRQLVZKHWKHUDIWHUYLHZLQJWKHHYLGHQFHLQWKH EH\RQGWKHVWDWXWRU\PD[LPXPjl8QLWHG6WDWHVY*DUFLD OLJKWPRVWIDYRUDEOHWRWKHSURVHFXWLRQDQ\UDWLRQDOWULHURI )GWK&LUTXRWLQJ$SSUHQGL IDFW FRXOG KDYH IRXQG WKH HVVHQWLDO HOHPHQWV RI WKH FULPH 86DW EH\RQGDUHDVRQDEOHGRXEW8QLWHG6WDWHVY/DQGKDP )GWK&LUFLWLQJsDFNVRQY9LUJLQLD (DFKRIWKHVHLVVXHVZLOOEHDGGUHVVHGLQWXUQ 8QLWHG6WDWHVY$OYDUH]HWDO 1RV 1RV 8QLWHG6WDWHVY$OYDUH]HWDO ,9',6&866,21 6L[WK &LUFXLW@ UHYLHZ>V@>WKH@ FRQFOXVLRQV GH QRYRjl &KRZGKXU\ )G DW TXRWLQJ 8QLWHG 6WDWHV Y $3UHFOXVLRQRI2XWRI&RXUW6WDWHPHQWV %XFNOH\)GWK&LU8QLWHG6WDWHVY %URZQ)GWK&LU $OYDUH] DWWHPSWHG WR HVWDEOLVK WKDW (GZDUG 3HUH] RZHG PRQH\WRRWKHULQGLYLGXDOV7KLVHYLGHQFHZDVSXUVXHGLQ &RXQW7ZRRIWKHLQGLFWPHQWFKDUJHGWKHDSSHOODQWVZLWKD RUGHU WR SUHVHQW WKH MXU\ ZLWK WKH WKHRU\ WKDW $OYDUH] DQG YLRODWLRQ RI 86& H$ ZKLFK LV EUHDFKHG *RQ]DOHV*DUFLDZHUHQRWWKHRQO\SHRSOHZLWKDPRWLYHWR ZKHQDGHIHQGDQWmLQWHQWLRQDOO\NLOOVRUFRXQVHOVFRPPDQGV NLOO3HUH]$OYDUH]jVDWWRUQH\WDSHUHFRUGHGDFRQYHUVDWLRQ LQGXFHV SURFXUHV RU FDXVHV WKH LQWHQWLRQDO NLOOLQJ RI DQ ZLWK D GUXJ GHDOHU IURP 7H[DV QDPHG *HUDOGR /XFLR LQGLYLGXDODQGVXFKNLOOLQJUHVXOWVl,G7KHFRXUWjVmILUVWVWHS +RZHYHUDWWULDO/XFLRLQYRNHGKLV)LIWK$PHQGPHQWULJKW LQFRQVWUXLQJDVWDWXWHLVWRUHYLHZWKHODQJXDJHRIWKHVWDWXWH DJDLQVWVHOILQFULPLQDWLRQLQUHVSRQVHWRDOOTXHVWLRQVDERXW LWVHOIl8QLWHG6WDWHVY0LOOV)GWK&LU KLV LQYROYHPHQW ZLWK (GZDUG 3HUH] 7KHUHIRUH $OYDUH] FLWLQJ8QLWHG6WDWHV Y2VSLQD)G DWWHPSWHG WR HQWHU WKH SUHYLRXVO\ WDSH UHFRUGHG VWDWHPHQWV WK &LU +RZHYHU WKH mLQTXLU\ LQWR OHJLVODWLYH LQWRHYLGHQFHXQGHU)HGHUDO5XOHRI(YLGHQFHE7KH PHDQLQJLVDGGLWLRQDOO\DLGHGE\FRQWHPSRUDQHRXVOHJLVODWLYH GLVWULFWFRXUWUXOHGWKDWWKHVHVWDWHPHQWVZHUHQRWVXIILFLHQWO\ KLVWRU\DQGWKHVWDWXWRU\FRQWH[WRIWKHSHUWLQHQWODQJXDJHl DJDLQVW/XFLRj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jLQWHUHVWDWWKHWLPHWKH\ZHUHPDGH DVDJJUDYDWLQJIDFWRUVIRUDGHDWKSHQDOW\GHWHUPLQDWLRQWKH :KHQWKHVWDWHPHQWLVRIIHUHGmWRH[FXOSDWHWKHDFFXVHGLQD 8QLWHG6WDWHVFRUUHFWO\DUJXHVWKDWWKHGHDWKSHQDOW\FDQQRWEH FULPLQDO FDVHl 5XOH E mLPSRVHV WKUHH WKUHVKROG LPSRVHGXQOHVVWKHGHIHQGDQWKDVEHHQFRQYLFWHGRIDQDFWLRQ DGPLVVLELOLW\UHTXLUHPHQWVWKHGHFODUDQWLVXQDYDLODEOHWR WKDWDPRXQWVWRDQLQWHQWLRQDONLOOLQJXQGHUWKHVWDWXWH7KH WHVWLI\WKHVWDWHPHQWVXEMHFWVWKHGHFODUDQWWRUHDOFULPLQDO IDFWRUVOLVWHGLQQPXVWVXSSRUWWKHVWDWHRIPLQG OLDELOLW\DQGFRUURERUDWLQJFLUFXPVWDQFHVFOHDUO\LQGLFDWH UHTXLUHGWRXSKROGDFRQYLFWLRQXQGHUWKLVVWDWXWHRWKHUZLVH WKHWUXVWZRUWKLQHVVRIWKHVWDWHPHQWl+LOOLDUG)GDW VDLGIDFWRUVZRXOGEHLQDSSURSULDWHO\FRQVLGHUHGDWWKHGHDWK FLWLQJ)HG5(YLGE8QLWHG6WDWHVY$UWKXU SHQDOW\SKDVH )GWK&LU 7KHOHJLVODWLYHKLVWRU\DSSHDUVWRVXSSRUWWKLVDQDO\VLV7KH $OYDUH]jVDWWRUQH\ZKHQPHHWLQJZLWK/XFLRVWDWHGWKDWm, FRQJUHVVLRQDO UHFRUG LQGLFDWHV WKDW FRQJUHVV LQWHQGHG WKH ZLOOGRHYHU\WKLQJ,FDQWRQRWKXUW\RXlDQGWKDW$OYDUH]DQG QSURYLVLRQVWREHDUHFDSLWXODWLRQRIWKHmHOHPHQWV KLVDWWRUQH\GLGQjWmKDYHDQ\LQWHUHVW>LQ@JHWWLQJ\RX>/XFLR@ RIWKHRIIHQVHl&RQJ5HF6GDLO\HGsXQH LQ WURXEOHl sRLQW $SSHQGL[ DW S 7KH DSSHOODQWjV VWDWHPHQW RI 6HQ 'j$PDWR 7KH FRQJUHVVLRQDO DWWRUQH\ ZHQW VR IDU DV WR LQGLFDWH WKDW ODZ HQIRUFHPHQW GLVFXVVLRQLQGLFDWHGWKDWQmEDVLFDOO\UHLWHUDWH>V@ SHUVRQQHOmFDQjWMXVWFKDUJH\RX>/XFLR@ZLWKDFULPHlEXW WKHHOHPHQWRIWKHFULPHl,G WKDWLIWKH\GLGWKHSURVHFXWLRQZRXOGQRWmJHWYHU\IDULILWjV 8QLWHG6WDWHVY$OYDUH]HWDO 1RV 1RV 8QLWHG6WDWHVY$OYDUH]HWDO WKHFRQVSLUDF\ZKLFKZHUHmUHDVRQDEO\IRUHVHHDEOHWRKLPDQG MXVW \RX >/XFLR@ VD\LQJ µD@PDULMXDQDGHDOjl,GDW7KHVHVWDWHPHQWV FULPLQDODFWLYLW\l,GDW ZHUH GHVLJQHG WR SXW /XFLR DW HDVH DQG HQWLFH KLP LQWR PDNLQJ D VHOILQFXOSDWRU\ VWDWHPHQW WKDW ZRXOG EHQHILW $V WKH DSSHOODQWjV SURIIHUHG MXU\ LQVWUXFWLRQ ZDV QRW D $OYDUH] FRUUHFW VWDWHPHQW RI WKH ODZ WKH WULDO MXGJHjV GHFLVLRQ WR H[FOXGHLWIURPWKHILQDOMXU\LQVWUXFWLRQVSUHVHQWHGDWWULDO ,Q WKH FDVH DW EDU WKH FLUFXPVWDQFHV LQGLFDWH WKDW WKH ZDVQRWHUURU VWDWHPHQWVGLGQRWOHDYH/XFLRZLWKWKHXQGHUVWDQGLQJWKDWKH ZDV VXEMHFWLQJ KLPVHOI WR mUHDO FULPLQDO OLDELOLW\l WKXV &sXU\,QVWUXFWLRQVRQ,QWHQWLRQDO.LOOLQJ EULQJLQJ WKH mWUXVWZRUWKLQHVVl RI VXFK VWDWHPHQWV LQWR TXHVWLRQ +LOOLDUG )G DW 7KH EDVLV RI 5XOH 7KHDSSHOODQWVERWKFRQWHQGWKDWWKHGLVWULFWFRXUWHUUHGE\ E LV mIRXQGHG RQ WKH FRPPRQVHQVH QRWLRQ WKDW SUHVHQWLQJWKHMXULHVZLWKDGHILQLWLRQRImLQWHQWLRQDONLOOLQJl UHDVRQDEOH SHRSOH HYHQ UHDVRQDEOH SHRSOH ZKR DUH QRW WKDW LQFRUSRUDWHG WKH PHQWDO VWDWHV GHVFULEHG LQ 86& HVSHFLDOO\ KRQHVW WHQG QRW WR PDNH VHOILQFXOSDWRU\ Q 7KH GLVWULFW FRXUW LQVWUXFWHG WKH MXU\ WKDW VWDWHPHQWVXQOHVVWKH\EHOLHYHWKHPWREHWUXHl9LQFHQWY mLQWHQWLRQDONLOOLQJlFRXOGEHUHDGWRLQFOXGHmLQWHQWLRQDOO\ 6HDEROG)GWK&LU7KHUHIRUHLIWKH LQIOLFW>LQJ@VHULRXVERGLO\LQMXU\lmLQWHQWLRQDOO\HQJDJ>LQJ@ VWDWHPHQWVZHUHQRWWUXO\VHOILQFXOSDWRU\LQWKHVHQVHWKDW LQFRQGXFWLQWHQGLQJWKDWWKHYLFWLPEHNLOOHGRUWKDWOHWKDO VDLG VWDWHPHQWV GLG QRW VXEMHFW /XFLR WR FULPLQDO OLDELOLW\ IRUFH EH HPSOR\HG DJDLQVW WKH YLFWLPl DQG mLQWHQWLRQDOO\ WKHQWKHVWDWHPHQWVjUHOLDELOLW\LVFDOOHGLQWRTXHVWLRQWKXV HQJDJ>LQJ@LQFRQGXFWZKLFKWKHGHIHQGDQWNQHZZRXOGFUHDWH VXSSRUWLQJWKHGLVWULFWFRXUWjVH[FOXVLRQRIVXFKVWDWHPHQWV D JUDYH ULVN RI GHDWK WR D SHUVRQ RWKHU WKDQ RQH RI WKH 7KHSURSHULQTXLU\LVmZKHWKHUWKHVWDWHPHQWZDVVXIILFLHQWO\ SDUWLFLSDQWV LQ WKH RIIHQVH DQG UHVXOW>LQJ@ LQ GHDWK WR WKH DJDLQVWWKHGHFODUDQWjVSHQDOLQWHUHVWµWKDWDUHDVRQDEOHSHUVRQ YLFWLPlsRLQW$SSHQGL[DWS LQWKHGHFODUDQWjVSRVLWLRQZRXOGQRWKDYHPDGHWKHVWDWHPHQW XQOHVVEHOLHYLQJLWWREHWUXHjDQGWKLVTXHVWLRQFDQRQO\EH 7KLVFRXUWmUHYLHZVDMXU\FKDUJHLQLWVWRWDOLW\WRGHWHUPLQH DQVZHUHGLQOLJKWRIDOOWKHVXUURXQGLQJFLUFXPVWDQFHVl,G ZKHWKHULWIDLUO\DQGDGHTXDWHO\VXEPLWVWKHLVVXHVDQGODZWR FLWDWLRQVRPLWWHG*LYHQWKHIDFWVRIWKHFDVHDWEDUWKHWDSH WKHMXU\l8QLWHG6WDWHVY&KRZGKXU\)G UHFRUGHGVWDWHPHQWVZHUHQRWDGPLVVLEOHXQGHU)HGHUDO5XOH WK&LUTXRWLQJ8QLWHG6WDWHVY0LOOLJDQ)G RI (YLGHQFH E DQG WKH FRXUW XSKROGV WKH GLVWULFW WK&LUm$MXGJPHQWPD\RQO\EHUHYHUVHG FRXUWjVUXOLQJH[FOXGLQJWKHP LIWKHLQVWUXFWLRQVYLHZHGLQWKHLUWRWDOLW\ZHUHFRQIXVLQJ PLVOHDGLQJRUSUHMXGLFLDOl,G % )DLOXUHWR,QVWUXFWWKHsXU\DVWR$OYDUH]jV5HOHYDQW &RQGXFW 7KH TXHVWLRQ LV mZKDW D UHDVRQDEOH MXURU FRXOG KDYH XQGHUVWRRGWKHFKDUJHDVPHDQLQJl&DOLIRUQLDY%URZQ $SSHOODQW$OYDUH]FRQWHQGVWKDWWKHGLVWULFWFRXUWHUUHGE\ 868QLWHG6WDWHVY%XFNOH\)G UHIXVLQJ WR JLYH DQ LQVWUXFWLRQ UHJDUGLQJ WKH FRQFHSW RI WK &LU m(YHQ LI DQ LQVWUXFWLRQ SURYHV UHOHYDQW FRQGXFW LQ D GUXJ FRQVSLUDF\ FDVH 7KLV UXOLQJ LV LPSHUPLVVLEOH YLHZHG LQ LVRODWLRQ WKH UHYLHZLQJ FRXUW UHYLHZHGIRUDEXVHRIGLVFUHWLRQ)LVKHUY)RUG0RWRU&R XSKROGVWKHLQVWUXFWLRQLILWWDNHVRQDSHUPLVVLEOHPHDQLQJLQ )GWK&LU WKHFRQWH[WRIVXUURXQGLQJLQVWUXFWLRQVl%URZQ86DW m:KHUHLQIRUPXODWLQJLQVWUXFWLRQVWKHµGLVWULFWFRXUW %HIRUH$OYDUH]ZDVWULHGWKHJRYHUQPHQWHQWHUHGLQWRD HQJDJHVLQVWDWXWRU\FRQVWUXFWLRQDVDPDWWHURIODZ>WKH SOHD DJUHHPHQW ZLWK KLV DOOHJHG FRFRQVSLUDWRU 5H\QDOGR 8QLWHG6WDWHVY$OYDUH]HWDO 1RV 1RV 8QLWHG6WDWHVY$OYDUH]HWDO 5LRV 5LRVjV SOHD DJUHHPHQW FRQWDLQHG D QRQELQGLQJ RIKHURLQGHVSLWHWKHIDFWWKDWmWKHHQWLUHFRQVSLUDF\>@GXULQJ VWLSXODWLRQWKDW5LRVVKRXOGEHKHOGDFFRXQWDEOHIRUWKHLOOHJDO KLV SHULRG RI SDUWLFLSDWLRQl VROG mURXJKO\ VHYHQ RU HLJKW WUDQVSRUWDWLRQ DQG VDOH RI EHWZHHQ RQH KXQGUHG DQG IRXU NLORJUDPVlRIKHURLQ,GDW7KHGLVWULFWFRXUWFRQFOXGHG KXQGUHGNLORJUDPVRIPDULMXDQD$OYDUH]ZLVKHGWRXVHWKLV WKDW WKH SURIIHUHG MXU\ LQVWUXFWLRQ ZDV D PLVOHDGLQJ DQG SOHD DJUHHPHQWDVHYLGHQFHWKDWWKHFRQVSLUDF\DVDZKROH LQFRPSOHWHVWDWHPHQWRIWKHODZ LQYROYHG OHVV WKDQ RQH WKRXVDQG NLORJUDPV RI PDULMXDQD ZKLFKZDVDUHTXLUHGHOHPHQWWRSURYHJXLOWXQGHU&RXQW7ZR 7KH 6L[WK &LUFXLW UHYLHZV WKH LQVWUXFWLRQV JLYHQ E\ D RIWKHLQGLFWPHQWDJDLQVWKLP6HH86&H$ GLVWULFWFRXUWWRGHWHUPLQHmµZKHWKHUWKHFKDUJHWDNHQDVD ZKROHIDLUO\DQGDGHTXDWHO\VXEPLWVWKHLVVXHVDQGDSSOLFDEOH $OYDUH]SURSRVHGDMXU\LQVWUXFWLRQZKLFKHGXFDWHGWKHMXU\ ODZWRWKHMXU\jl8QLWHG6WDWHVY%XFNOH\)G RQ IHGHUDO VHQWHQFLQJ SULQFLSOHV IRU WKH SXUSRVH RI WK&LUTXRWLQJ8QLWHG6WDWHVY0DUWLQ)G GHWHUPLQLQJ ZKHWKHU WKH FRQVSLUDF\ LQYROYHG WKH UHTXLVLWH WK &LU 7KH FRXUW ZLOO UHYHUVH DQ DPRXQWRIPDULMXDQDLQRUGHUWRVXSSRUWDJXLOW\YHUGLFW7KH DSSHOODQWjV FRQYLFWLRQ IRU IDLOXUH WR JLYH D UHTXHVWHG MXU\ UHOHYDQWSDUWRIWKHSURSRVHGLQVWUXFWLRQUHDGDVIROORZV LQVWUXFWLRQ RQO\ ZKHQ m WKH UHTXHVWHG LQVWUXFWLRQ LV D FRUUHFWVWDWHPHQWRIWKHODZWKHUHTXHVWHGLQVWUXFWLRQLV 6HQWHQFLQJLQIHGHUDOGUXJFRQVSLUDF\FDVHVGHSHQGVLQ QRWVXEVWDQWLDOO\FRYHUHGE\RWKHUGHOLYHUHGLQVWUXFWLRQVDQG ODUJHPHDVXUHXSRQWKHTXDQWLW\RIGUXJVDWWULEXWDEOHWR WKHIDLOXUHWRJLYHWKHLQVWUXFWLRQLPSDLUVWKHGHIHQGDQW V WKHGHIHQGDQWZKRLVEHLQJVHQWHQFHG$QGXQGHUWKH WKHRU\RIWKHFDVHl8QLWHG6WDWHVY&KHVQH\)G IHGHUDO ODZ WKDW JRYHUQV GUXJ VHQWHQFHV QRW HYHU\ WK&LUFLWLQJ8QLWHG6WDWHVY&DUU)G PHPEHURIDFRQVSLUDF\KDVWREHKHOGUHVSRQVLEOHIRUWKH WK&LU HQWLUHDPRXQWRIGUXJVGLVWULEXWHGE\WKHFRQVSLUDF\%XW HDFKGHIHQGDQWLQDGUXJFRQVSLUDF\FDVHPXVWEHKHOG 7KHDSSHOODQWjVSURIIHUHGLQVWUXFWLRQWKDWmHDFKGHIHQGDQW DFFRXQWDEOH QRW RQO\ IRU WKH DPRXQW RI GUXJV GLUHFWO\ LQDGUXJFRQVSLUDF\FDVHPXVWEHKHOGDFFRXQWDEOHQRWRQO\ KDQGOHG E\ KLP EXW DOVR IRU DOO TXDQWLWLHV RI GUXJV IRUWKHDPRXQWRIGUXJVGLUHFWO\KDQGOHGE\KLPEXWDOVRIRU KDQGOHG E\ FRFRQVSLUDWRUV LI WKRVH TXDQWLWLHV ZHUH DOO TXDQWLWLHV RI GUXJV KDQGOHG E\ FRFRQVSLUDWRUV LI WKRVH NQRZQWRWKHGHIHQGDQWRUUHDVRQDEO\IRUHVHHDEOHWRKLP TXDQWLWLHV ZHUH NQRZQ WR WKH GHIHQGDQW RU UHDVRQDEO\ IRUHVHHDEOHWRKLPlLVDQLQFRUUHFWDQGLQFRPSOHWHVWDWHPHQW sRLQW$SSHQGL[DWS7KHGLVWULFWFRXUWUXOHGWKDWWKLV RIWKHODZsRLQW$SSHQGL[DWS)RUHVHHDELOLW\DORQHLV SURSRVHGMXU\LQVWUXFWLRQZDVLUUHOHYDQWDQGPLVOHDGLQJDQG LQVXIILFLHQWWRKROGDFRQVSLUDF\GHIHQGDQWDFFRXQWDEOHIRUWKH UHIXVHGWRLQFOXGHLWLQWKHILQDOMXU\LQVWUXFWLRQV7KHWULDO DFWLRQVRIFRFRQVSLUDWRUV,Q8QLWHG6WDWHVYsHQNLQV)G MXGJHQRWHGWKDWZKDWWKHJRYHUQPHQWEHOLHYHG5LRVVKRXOGEH WK&LUWKLVFRXUWKHOGWKDWmWKHVFRSHRIWKH KHOGDFFRXQWDEOHIRUZDVLUUHOHYDQWLQGHWHUPLQLQJZKDWWKH FULPLQDO DFWLYLW\ MRLQWO\ XQGHUWDNHQ E\ WKH GHIHQGDQW WKH WRWDOVFRSHRIWKHFRQVSLUDF\ZDV mMRLQWO\XQGHUWDNHQFULPLQDODFWLYLW\lLVQRWQHFHVVDULO\WKH VDPHDVWKHVFRSHRIWKHHQWLUHFRQVSLUDF\DQGKHQFHUHOHYDQW 'UXJGHIHQGDQWVPD\EHVHQWHQFHGDQGKHOGDFFRXQWDEOHIRU FRQGXFWLVQRWQHFHVVDULO\WKHVDPHIRUHYHU\SDUWLFLSDQWl,G DQDPRXQWRIFRQWUDEDQGUHSUHVHQWLQJOHVVWKDQWKHFRPSOHWH DW%HIRUHGHWHUPLQLQJWKHmGHIHQGDQW VDFFRXQWDELOLW\ VFRSH RI WKH FRQVSLUDF\ 7KH GLVWULFW FRXUW LQGLFDWHG WKDW IRUWKHFRQGXFWRIRWKHUVXQGHUVXEVHFWLRQD%lWKHWULDO 8QLWHG6WDWHVY$UUHQGRQGR)GWK&LU FRXUWPXVWmILUVWGHWHUPLQHWKHVFRSHRIWKHFULPLQDODFWLYLW\ VXSSRUWHGWKLVFRQWHQWLRQ,QWKDWFDVHWKHFRXUWZDVFDOOHG WKH SDUWLFXODU GHIHQGDQW DJUHHG WR MRLQWO\ XQGHUWDNHl ,G WRGHWHUPLQHZKHWKHU$UUHQGRQGRVKRXOGEHKHOGOLDEOHIRU 7KHUHIRUHHDFKFRQVSLUDWRULVUHVSRQVLEOHRQO\IRUDFWLRQVE\ OHVVWKDQRQHNLORJUDPRIKHURLQRUPRUHWKDQRQHNLORJUDP