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 3,(5527 %(ss$1, ; 3HWLWLRQHU 1R Y ! ,00,*5$7,21 $1' 1$785$/,=$7,21 6(59,&( s2+1 $6+&52)7$WWRUQH\ *HQHUDORIWKH8QLWHG6WDWHV 5HVSRQGHQWV 1 2Q3HWLWLRQIRU5HYLHZRIDQ2UGHURIWKH ,PPLJUDWLRQDQG1DWXUDOL]DWLRQ6HUYLFH 1R$ $UJXHG0D\ 'HFLGHGDQG)LOHG1RYHPEHU $FFRUGLQJ WR 86& E$ WKH UHVSRQGHQW WR D SHWLWLRQ IRU UHYLHZ XQGHU ,1$ LV WKH $WWRUQH\ *HQHUDO sRKQ $VKFURIW LV VXEVWLWXWHG IRU KLV SUHGHFHVVRU sDQHW 5HQR DV $WWRUQH\ *HQHUDO RI WKH 8QLWHG 6WDWHV )HG 5 $SS 3 F %HMMDQLY,16HWDO 1R %HIRUH1255,6DQG&2/(&LUFXLWsXGJHV +2/6&+8+'LVWULFWsXGJH BBBBBBBBBBBBBBBBB &2816(/ $5*8('5LFKDUG+'UXFNHU'58&.(5 '58&.(5 &OHYHODQG2KLRIRU3HWLWLRQHU6XVDQ.+RXVHU81,7(' 67$7(6 '(3$570(17 2) s867,&( 2)),&( 2) ,00,*5$7,21 /,7,*$7,21 :DVKLQJWRQ '& IRU 5HVSRQGHQWV21%5,()5LFKDUG+'UXFNHU'58&.(5 '58&.(5 &OHYHODQG 2KLR IRU 3HWLWLRQHU 6XVDQ . +RXVHU 5LFKDUG 0 (YDQV 81,7(' 67$7(6 '(3$570(172)s867,&(2)),&(2),00,*5$7,21 /,7,*$7,21:DVKLQJWRQ'&IRU5HVSRQGHQWV BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB s2+1'+2/6&+8+'LVWULFWsXGJH3HWLWLRQHU3LHUURW %HMMDQL m%HMMDQLl VHHNV GLUHFW UHYLHZ RI WKH sDQXDU\ GHFLVLRQRIWKH,PPLJUDWLRQDQG1DWXUDOL]DWLRQ6HUYLFH m,16lWRUHLQVWDWHDSULRURUGHURIGHSRUWDWLRQSXUVXDQWWR DRIWKH,PPLJUDWLRQDQG1DWLRQDOLW\$FWm,1$l 86&D)RUWKHUHDVRQVVHWIRUWKKHUHLQZH *5$17%HMMDQLjVSHWLWLRQIRUUHYLHZ9$&$7(WKHsDQXDU\ RUGHURIUHLQVWDWHPHQWDQG5(0$1'WKLVPDWWHU IRUIXUWKHUSURFHHGLQJVQRWLQFRQVLVWHQWZLWKWKLVRSLQLRQ ,)$&78$/%$&.*5281' 3HWLWLRQHU%HMMDQLLVDQDWLYHDQGFLWL]HQRI/HEDQRQZKR HQWHUHG WKH 8QLWHG 6WDWHV RQ $SULO DV D ODZIXO SHUPDQHQWUHVLGHQW,Q6HSWHPEHU%HMMDQLSOHGJXLOW\ 7KH +RQRUDEOH sRKQ ' +ROVFKXK 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH 6RXWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ 1R %HMMDQLY,16HWDO WRDFKDUJHRISRVVHVVLRQZLWKLQWHQWWRGLVWULEXWHJUDPV RI KHURLQ DQG ZDV VHQWHQFHG WR D WZR \HDU WHUP RI LPSULVRQPHQWDQGDPDQGDWRU\VSHFLDOSDUROHWHUPRIWKUHH \HDUV ,QsDQXDU\WKH,16VHUYHG%HMMDQLZLWKDQRUGHUWR VKRZ FDXVH FKDUJLQJ WKDW KH ZDV VXEMHFW WR GHSRUWDWLRQ SXUVXDQWWRDRIWKH,1$EHFDXVHRIKLVFRQYLFWLRQ IRU WUDIILFNLQJLQDFRQWUROOHGVXEVWDQFH%HMMDQLDSSHDUHG EHIRUH DQ LPPLJUDWLRQ MXGJH DQG DGPLWWHG WKH DOOHJDWLRQV FRQWDLQHGLQWKHVKRZFDXVHRUGHU,QsXQH%HMMDQL UHTXHVWHGOHDYHWRILOHIRUUHOLHIIURPGHSRUWDWLRQSXUVXDQWWR FRIWKH,1$,QsDQXDU\DQLPPLJUDWLRQMXGJH GHQLHG%HMMDQLjVFDSSOLFDWLRQDQGRUGHUHGKLPWREH GHSRUWHG WR /HEDQRQ %HMMDQL DSSHDOHG WR WKH %RDUG RI ,PPLJUDWLRQ$SSHDOVm%,$lZKLFKDIILUPHGWKHGHFLVLRQRI WKHLPPLJUDWLRQMXGJHRQs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sDQXDU\%HMMDQLILOHGDSHWLWLRQIRUD ZULWRIKDEHDVFRUSXVLQWKH'LVWULFW&RXUWIRUWKH1RUWKHUQ 'LVWULFWRI2KLRDVNLQJWKHFRXUWWRUHVWUDLQKLVGHSRUWDWLRQ DQGWRRUGHUWKH,16WRFRQVLGHUKLVDSSOLFDWLRQIRUUHOLHIIURP GHSRUWDWLRQ $OVR RQ sDQXDU\ WKH ,16 LVVXHG D m1RWLFH RI ,QWHQW'HFLVLRQ WR 5HLQVWDWH 3ULRU 2UGHUl LQGLFDWLQJ WKDW WKH ,16 LQWHQGHG WR UHLQVWDWH WKH RUGHU RI %HMMDQLY,16HWDO 1R 1R %HMMDQLY,16HWDO GHSRUWDWLRQ LVVXHG LQ SXUVXDQW WR ,1$ D SURFHVV WKH GDWH WKH DOLHQ LV UHOHDVHG IURP GHWHQWLRQ RU 7KLVQRWLFHVWDWHGmV@HUYLFH RI WKH SHWLWLRQ RQ WKH RIILFHU RU EHWZHHQ WKH UHLQVWDWHPHQW SURYLVLRQV %RWK UHTXLUH WKH HPSOR\HHGRHVQRWVWD\WKHUHPRYDORIDQDOLHQSHQGLQJWKH IROORZLQJHOHPHQWVWREHHVWDEOLVKHGWKHLGHQWLW\RIWKHDOLHQ FRXUWjV GHFLVLRQ RQ WKH SHWLWLRQ XQOHVV WKH FRXUW RUGHUV ZKHWKHUWKHDOLHQZDVSUHYLRXVO\UHPRYHGXQGHUDSURYLVLRQ RWKHUZLVHl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sXQH EDUVDOLHQVIURPDSSO\LQJIRUDQ\IRUPRIUHOLHIRWKHUWKDQD FODLPIRUDV\OXP $OWKRXJKE%SURYLGHVWKHFRXUWVRIDSSHDOV ZLWK WKH DXWKRULW\ WR VWD\ DQ DOLHQjV UHPRYDO LW GRHV QRW 6LJQLILFDQWGLIIHUHQFHVDOVRH[LVWLQWKHSURFHVVZKLFKDQ VSHFLI\ ZKDW VWDQGDUG LV WR EH HPSOR\HG LQ HYDOXDWLQJ WKH DOLHQ LV DFFRUGHG XQGHU WKH FRQFRPLWDQW LPSOHPHQWLQJ DOLHQjVUHTXHVW$QGUHLX)GDW,Q$QGUHLXWKH UHJXODWLRQV8QGHUWKHSULRUUHJXODWLRQ&)5 1LQWK&LUFXLWDGRSWHGWKHVWDQGDUGIURP$EEDVVLY,16 UHSHDOHG DQ DOLHQ LQ UHLQVWDWHPHQW KDG D ULJKW WR D )GWK&LU8QGHUWKH$EEDVVLVWDQGDUG KHDULQJEHIRUHDQLPPLJUDWLRQMXGJHm,sl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jV RSLQLRQ WKDW I GRHV QRW DSSO\ WR VWD\V RI UHPRYDO ZDV QRW JURXQGHG LQ DV\OXP ODZ 7KXV $QGUHLX jV UDWLRQDOH ,,5,5$ UHSODFHG WKH FRQFHSWV RI mH[FOXVLRQl DQG mGHSRUWDWLRQl ZLWK LV DSSOLFDEOH WR UHPRYDO RU UHLQVWDWHPHQW RUGHUV LQ JHQHUDO WKH FRQFHSW RI mUHPRYDOl 6HH ,,5,5$ G %HMMDQLY,16HWDO 1R 1R %HMMDQLY,16HWDO 7KH LPPLJUDWLRQ RIILFHU PXVW GHWHUPLQH ZKHWKHU WKH DOLHQ &'XH3URFHVV XQODZIXOO\ UHHQWHUHG WKH 8QLWHG 6WDWHV 7KH UHJXODWLRQ SURYLGHV 2XU GHFLVLRQ WKDW ,1$ D GRHV QRW DSSO\ UHWURDFWLYHO\WRLOOHJDOUHHQWULHVZKLFKRFFXUUHGSULRUWRWKH ,QPDNLQJWKLVGHWHUPLQDWLRQWKHRIILFHUVKDOOFRQVLGHU HIIHFWLYHGDWHRIDUHPRYHV%HMMDQLjV'XH3URFHVV DOOUHOHYDQWHYLGHQFHLQFOXGLQJVWDWHPHQWVPDGHE\WKH DUJXPHQWIURPRXUFRQVLGHUDWLRQ+RZHYHUZHQRWHWKDWRXU DOLHQDQGDQ\HYLGHQFHLQWKHDOLHQjVSRVVHVVLRQ7KH UXOLQJLVLQSDUWJXLGHGE\WKHSULQFLSOHWKDWZKHUHSRVVLEOH LPPLJUDWLRQ RIILFHU VKDOO DWWHPSW WR YHULI\ DQ DOLHQjV DFRXUWVKRXOGUXOHRQDQDUURZJURXQGLQRUGHUWRDYRLGD FODLPLIDQ\WKDWKHRUVKHZDVODZIXOO\DGPLWWHGZKLFK FRQVWLWXWLRQDOTXHVWLRQ6HHHJ/DQGJUDI86DW VKDOOLQFOXGHDFKHFNRI6HUYLFHGDWDV\VWHPVDYDLODEOHWR Q&DVWUR&RUWH])GDW6W&\UY,16 WKHRIILFHU )G Q G &LU DIIjG 6&W &)5D '6WD\RI5HPRYDO2UGHU 7KHDOLHQGRHVQRWKDYHDULJKWWRFRXQVHO$OWKRXJKWKH DOLHQPD\PDNHDVWDWHPHQWWKHDOLHQGRHVQRWKDYHDULJKWWR 2Q)HEUXDU\WKH&RXUWLVVXHGDQRUGHUVWD\LQJWKH EXLOG DQ DGPLQLVWUDWLYH UHFRUG EHIRUH DQ LPSDUWLDO H[HFXWLRQ RI WKH RUGHU RI UHLQVWDWHPHQW DQG VWD\LQJ WKH LPPLJUDWLRQMXGJH7KH1LQWK&LUFXLW&RXUWRI$SSHDOVKDV UHTXLUHPHQWWKDW%HMMDQLUHSRUWWRDQLPPLJUDWLRQRIILFHURQ REVHUYHGWKDWm>W@KHUHLQVWDWHPHQWSURFHVVUDLVHVYHU\VHULRXV )HEUXDU\IRUGHSRUWDWLRQ GXHSURFHVVFRQFHUQVDQGLVFDXVHGQRWE\DFKDQJHPDQGDWHG E\ &RQJUHVV DV SDUW RI ,,5,5$ EXW E\ DQ DGPLQLVWUDWLYH 7KH,16DUJXHVWKLV&RXUWPD\JUDQWDVWD\RIUHPRYDO GHFLVLRQ WR DPHQG WKH UHJXODWLRQV JRYHUQLQJ UHLQVWDWHPHQW RQO\LIWKHDOLHQVKRZVE\mFOHDUDQGFRQYLQFLQJHYLGHQFHWKDW SURFHHGLQJV LQ WKH ZDNH RI ,,5,5$l &DVWUR&RUWH] WKHHQWU\RUH[HFXWLRQRIVXFKRUGHULVSURKLELWHGDVDPDWWHU )GDW RIODZl6HH86&I7KH,16KRZHYHUGRHV QRWIXOO\TXRWHIZKLFKSURYLGHVLQLWVHQWLUHW\ $/HJDOLW\RIUHHQWU\ 1RWZLWKVWDQGLQJ DQ\ RWKHU SURYLVLRQ RI ODZ QR FRXUW %HMMDQLPDLQWDLQVWKDWKHOHJDOO\ UHHQWHUHGLQWKH8QLWHG VKDOOHQMRLQWKHUHPRYDORIDQ\DOLHQSXUVXDQWWRDILQDO 6WDWHVLQZKHQKHSUHVHQWHGKLV$OLHQ5HJLVWUDWLRQ&DUG RUGHUXQGHUWKLVVHFWLRQXQOHVVWKHDOLHQVKRZVE\FOHDU m$5&l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jVUHHQWU\ZDVOHJDOD UHPRYDOSHQGLQJDSSHOODWHUHYLHZ6HH$QGUHLXY$VKFURIW ZRXOG QRW DSSO\ DQG %HMMDQLjV SULRU RUGHU RI GHSRUWDWLRQ ZRXOGQRWEHVXEMHFWWRUHLQVWDWHPHQW$VDSUDFWLFDOPDWWHU WKLV ZRXOG UHTXLUH WKH ,16 WR LQLWLDWH D QHZ UHPRYDO %HMMDQLY,16HWDO 1R 1R %HMMDQLY,16HWDO )LQDOO\ ZH DJUHH ZLWK &DVWUR&RUWH] WKDW &RQJUHVVjV SURFHHGLQJDJDLQVW%HMMDQLLQRUGHUWRUHPRYHKLPIURPWKH VLOHQFHRQWKHLVVXHRIDjVDSSOLFDWLRQLVVLJQLILFDQW FRXQWU\ &RQJUHVV LV SUHVXPHG WR EH IDPLOLDU ZLWK WKH MXGLFLDO SUHVXPSWLRQ DJDLQVW UHWURDFWLYH DSSOLFDWLRQ DQG WKXV 7KLV &RXUW KDV EHHQ SUHVHQWHG ZLWK YLUWXDOO\ QR IDFWV &RQJUHVVPXVWH[SOLFLWO\SURYLGHIRUVXFK,QWKHFDVHRIWKH UHJDUGLQJ%HMMDQLjVUHHQWU\LQ7KLVGHDUWKRIHYLGHQFH ,1$j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jV UHHQWU\ EDVHG XSRQ WKH LQIHUHQFHDUJXPHQWLQWKLVFRQWH[WWRDUJXHWKDWFRQJUHVVLRQDO PHDJHUUHFRUGSUHVHQWHGWRWKH&RXUW,QYLHZRIWKH&RXUWjV LQWHQWLVQRWFOHDU$OWKRXJKWKH&RXUWDJUHHVZLWKWKH,16RQ FRQFOXVLRQVUHJDUGLQJRWKHULVVXHVRQWKLVDSSHDOKRZHYHU WKDWSRLQWZHILQGWKDWWKHUHLVRWKHURYHUZKHOPLQJHYLGHQFH WKH &RXUW DFFHSWV IRU SXUSRVHV RI WKLV DSSHDO WKH ,16 RIFOHDUFRQJUHVVLRQDOLQWHQWWKDWDVKRXOGQRWDSSO\ DUJXPHQWWKDW%HMMDQLjVUHHQWU\ZDVQRWDOHJDOUHHQWU\ UHWURDFWLYHO\WRUHLQVWDWHSULRURUGHUVRIUHPRYDORIDOLHQVZKR UHHQWHUHGWKHFRXQWU\SULRUWRWKHHIIHFWLYHGDWHRID $V D UHVXOW ZH QHHG QRW DGGUHVV WKH VHFRQG VWHS RI WKH /DQGJUDI DQDO\VLV QRU WKH TXHVWLRQ RI ZKHWKHU &KHYURQ GHIHUHQFH LV DSSURSULDWH 7KH UHLQVWDWHPHQW SURYLVLRQ VHW IRUWKLQ,1$DDQG&)5PD\QRWEH DSSOLHGWRWKHUHLQVWDWHPHQWRI%HMMDQLj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jV@ FRQWHQWLRQ WKDW KH KDG QRW DFWXDOO\ EHHQ GHSRUWHG RU KLV FODLP WKDW KH KDG QRW DFWXDOO\ LOOHJDOO\ 7KLV GHFLVLRQ RI FRXUVH GRHV QRW LPSO\ WKDW %HMMDQLjV RUGHU RI UHHQWHUHG ZH ZRXOG EH GHSULYHG RI WKH EHQHILW RI DQ\ HYLGHQFH GHSRUWDWLRQ PD\ QRW EH UHLQVWDWHG 2XU GHFLVLRQ VLPSO\ UHTXLUHV WKDW LI WKH WKDW >WKH DOLHQ@ ZLVKHG WR LQWURGXFH ,16 FKRRVHV WR UHLQVWDWH WKDW RUGHU LW PXVW GR VR SXUVXDQW WR SUH,,5,5$ ODZ DQG UHJXODWLRQV &DVWUR&RUWH] )G DW %HMMDQLY,16HWDO 1R 1R %HMMDQLY,16HWDO % 'RHV ,1$ D DSSO\ UHWURDFWLYHO\ WR DOLHQV ZLWKLQ 6XEWLWOH & QR LQIHUHQFH DULVHV IURP FRPSDULQJ ZKR UHHQWHUHG SULRU WR WKH HIIHFWLYH GDWH RI WKH VHFWLRQVORFDWHGZLWKLQ6XEWLWOH&,WIROORZVWKHQWKDWQR DPHQGPHQW" LQIHUHQFH FDQ EH GUDZQ IURP FRPSDULQJ VLOHQW SURYLVLRQV ORFDWHGLQ6XEWLWOH$WRUDQGRPO\VHOHFWHGH[SUHVVSURYLVLRQV 5HWURDFWLYLW\DQDO\VLV LQ 6XEWLWOH & 8QOLNH WKH SURYLVLRQV DW LVVXH LQ/LQGK LQ ,,5,5$WKHUHLVQRFOHDUGLVWLQFWLRQEHWZHHQVLOHQFHLQRQH 7KH SULPDU\ LVVXH EHIRUH WKLV &RXUW LV ZKHWKHU WKH QHZ SURYLVLRQ DQG D FOHDU VWDWHPHQW RI UHWURDFWLYLW\ LQ DQRWKHU UHLQVWDWHPHQW SURYLVLRQ JRYHUQV %HMMDQLjV UHLQVWDWHPHQW 6HH9HODVTXH]*DEULHO)GDWQ SURFHHGLQJ +RZHYHU FRPSDULQJ D WR RWKHU SURYLVLRQV LV $VWKLV&RXUWKDVSUHYLRXVO\UHFRJQL]HGm>E@DVLFSULQFLSOHV XVHIXO LQ GHPRQVWUDWLQJ WKDW ZKHUH &RQJUHVV VSHFLILFDOO\ RI IDLUQHVV DQG QRWLFH XQGHUOLH D MXGLFLDO VNHSWLFLVP RI ZLVKHGIRUDSURYLVLRQWRDSSO\LQDFHUWDLQPDQQHU&RQJUHVV VWDWXWRU\UHWURDFWLYLW\l%DUWRV]HZND=DMDFY,16)G NQHZKRZWRDFFRPSOLVKWKDWDQGGLGVRWKURXJKRXW,,5,5$ WK &LU FLWLQJ /DQGJUDI Y 86, )LOP 7KHDEVHQFHRIDQH[SUHVVGLUHFWLYHIURP&RQJUHVVYLHZHGLQ 3URGXFWV 86 7KLV MXGLFLDO OLJKWRI/DQGJUDIjVGHIDXOWUXOHSHUVXDGHVXVWRDJUHHZLWK SUHVXPSWLRQDJDLQVWUHWURDFWLYLW\FDQEHRYHUFRPHKRZHYHU &DVWUR&RUWH] WKDW LQ WKLV FDVH mFRQJUHVVLRQDO VLOHQFH LV mZKHQ &RQJUHVV FOHDUO\ LQWHQGV WKDW UHVXOWl ,G FLWLQJ LQVWUXFWLYHl 6HH )G DW 0RUHRYHU WKLV FDVH /DQGJUDI86DW7KH6XSUHPH&RXUWKDVUHFHQWO\ GLIIHUVIURP&HUYDQWHV*RQ]DOHVLQZKLFKWKHSURYLVLRQDW VWDWHG WKDW mGHVSLWH WKH GDQJHUV LQKHUHQW LQ UHWURDFWLYH LVVXHZDVPRYHGWRDGLIIHUHQWVXEWLWOHDQGZDVSODFHGDPRQJ OHJLVODWLRQ LW LV EH\RQG GLVSXWH WKDW ZLWKLQ FRQVWLWXWLRQDO SURYLVLRQVZLWKYDULRXVWHPSRUDODSSOLFDWLRQV,QRXUFDVH OLPLWV &RQJUHVV KDV WKH SRZHU WR HQDFW ODZV ZLWK WKH SULRU YHUVLRQ RI WKH UHLQVWDWHPHQW SURYLVLRQ LQFOXGHG UHWURVSHFWLYHHIIHFWl,16Y6W&\U866&W UHWURDFWLYH ODQJXDJH ZKLFK ZDV HOLPLQDWHG LQ GUDIWLQJ WKH m$ VWDWXWH PD\ QRW EH DSSOLHG DPHQGPHQWV 7KXV LW LV QRW QHFHVVDU\ WR FRPSDUH WKH UHWURDFWLYHO\ KRZHYHU DEVHQW D FOHDU LQGLFDWLRQ IURP UHLQVWDWHPHQWSURYLVLRQWRRWKHUVHFWLRQVLQRWKHUVXEWLWOHVLQ &RQJUHVVWKDWLWLQWHQGHGVXFKDUHVXOWl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m$('3$l 3XE / 1R 6WDW HW VHT KDYH XQGHUWKHSULRUUHLQVWDWHPHQWSURYLVLRQI86& UHOLHG RQ D QHJDWLYH LQIHUHQFH WR FRQFOXGH WKDW WKH SURYLVLRQ GRHV QRW I UHSHDOHG DQG WKH SULRU UHJXODWLRQ &)5 DSSO\ UHWURDFWLYHO\ 7KH VHFWLRQV FRPSDUHG LQ 3DN DQG WKH RWKHU FDVHV UHSHDOHG FLWHG E\ %HMMDQL DUH DQDORJRXV VHFWLRQV ZLWKLQ $('3$ 7LWOH ,9 ZKLFK DGGUHVV GLDPHWULFDOO\ RSSRVHG VXEMHFW PDWWHUV 6HH 6DQGRYDO Y 5HQR )G G &LU +HQGHUVRQ Y ,16 )G 7KH ,16 PDLQWDLQV WKDW WKH GDWH RI %HMMDQLj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mZKROO\GLVWLQFWVXEMHFWPDWWHUVl :KHQDFDVHLPSOLFDWHVDIHGHUDOVWDWXWHHQDFWHGDIWHUWKH 6HH+DGL[867KH&RXUWDJUHHVZLWK HYHQWV LQ VXLW WKH FRXUWjV ILUVW WDVN LV WR GHWHUPLQH WKH ,16 WKDW FRPSDULQJ SURYLVLRQV ZKLFK DUH ORFDWHG LQ ZKHWKHU&RQJUHVVKDVH[SUHVVO\SUHVFULEHGWKHVWDWXWHj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jV ZKLFK&DVWUR&RUWH]FKRVHIRUFRPSDULVRQDGGUHVVGLIIHUHQW OLDELOLW\ IRU SDVW FRQGXFW RU LPSRVH QHZ GXWLHV ZLWK VXEMHFW PDWWHUV WKH\ DUH QRW VLPLODU LQ DQ\ UHVSHFW WR UHVSHFWWRWUDQVDFWLRQVDOUHDG\FRPSOHWHG,IWKHVWDWXWH D $V WKH )RXUWK &LUFXLW REVHUYHG m>W@KRVH ZRXOGRSHUDWHUHWURDFWLYHO\RXUWUDGLWLRQDOSUHVXPSWLRQ VXEWLWOHVJRYHUQGLIIHUHQWFRQGXFWDQGKDYHQRUHODWLRQWRWKH WHDFKHVWKDWLWGRHVQRWJRYHUQDEVHQWFOHDUFRQJUHVVLRQDO FRPSUHKHQVLYHUHYLVLRQRIUHPRYDOSURFHGXUHVFRQWDLQHGLQ LQWHQWIDYRULQJVXFKDUHVXOW 6XEWLWOH$ZKLFKDUHDWLVVXHLQWKLVFDVHl6HH9HODVTXH] *DEULHO)GDW 3XUVXDQWWR/DQGJUDIDFRXUWPXVWILUVWGHWHUPLQHmZKHWKHU &RQJUHVVKDVH[SUHVVO\SUHVFULEHGWKHVWDWXWHjVSURSHUUHDFKl 7KH ,16 DOVR FULWLFL]HV &DVWUR&RUWH] IRU GUDZLQJ D /DQGJUDI 86 DW ,I &RQJUHVV KDV H[SUHVVO\ QHJDWLYHLQIHUHQFHRISURVSHFWLYHDSSOLFDWLRQIURPFRPSDULQJ SUHVFULEHG WKH VWDWXWHjV WHPSRUDO VFRSH WKHQ WKH LQWHQW RI DWRSURYLVLRQVZLWKH[SUHVVUHWURDFWLYHDSSOLFDWLRQ &RQJUHVVFRQWUROV,I&RQJUHVVKDVQRWGRQHVRWKHQDFRXUW ,Q /LQGK WKH 6XSUHPH &RXUW FRPSDUHG D VHFWLRQ RI WKH PXVWSURFHHGWRWKHVHFRQGVWHSDQGGHWHUPLQHZKHWKHUWKH $QWLWHUURULVPDQG(IIHFWLYH'HDWK3HQDOW\$FWm$('3$l VWDWXWHDFWVUHWURDFWLYHO\E\LPSDLULQJDYHVWHGULJKWFUHDWLQJ ZKLFKVSHFLILHGWKDWLWZRXOGDSSO\WRFDVHVSHQGLQJRQWKH DQHZREOLJDWLRQLPSRVLQJDQHZGXW\RUDWWDFKLQJDQHZ GDWHRIWKHVWDWXWHjVHQDFWPHQWWRDVHFWLRQZKLFKZDVVLOHQW GLVDELOLW\ ZLWK UHVSHFW WR WUDQVDFWLRQV RU FRQVLGHUDWLRQV DVWRLWVDSSOLFDWLRQ6HH/LQGK86DW,,5,5$ DOUHDG\SDVW6HHLGDW SUHVHQWV D GLIIHUHQW VLWXDWLRQ EHFDXVH VRPH VHFWLRQV RI 6XEWLWOHV % DQG & H[SUHVVO\ SURYLGH IRU UHWURDFWLYH ,Q /LQGK Y 0XUSK\ 86 WKH 6XSUHPH DSSOLFDWLRQ VRPH H[SUHVVO\ SURYLGH IRU SURVSHFWLYH &RXUWFODULILHGWKHILUVWVWHSRIWKH/DQGJUDIDQDO\VLV7KH DSSOLFDWLRQDQGVRPHGRQRWDGGUHVVWKHLVVXHRIWHPSRUDO /LQGK RSLQLRQ GLUHFWV WKDW LQ GHWHUPLQLQJ WKH LQWHQW RI DSSOLFDWLRQDWDOO,Q&HUYDQWHV*RQ]DOH]WKH1LQWK&LUFXLW &RQJUHVV D FRXUW VKRXOG HPSOR\ WKH mQRUPDO UXOHVl RI FRQFOXGHGWKDWJLYHQWKHYDULRXVDSSURDFKHVWRHIIHFWLYHGDWHV VWDWXWRU\FRQVWUXFWLRQ6HHLGDW7KLVPHDQVWKDWWKH FRXUW PXVW ILUVW GHFLGH ZKHWKHU &RQJUHVV KDV H[SUHVVO\ %HMMDQLY,16HWDO 1R 1R %HMMDQLY,16HWDO SUHVFULEHG WKH VWDWXWHj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jV HQDFWPHQWRUDWWKHWLPHWKHUHLQVWDWHPHQWSURYLVLRQEHFDPH +55HS1R,DW:/ HIIHFWLYH $FFRUGLQJ WR WKH ,16 %HMMDQLjV SUHYLRXV HPSKDVLVDGGHG65HS1RDW GHSRUWDWLRQ SURFHHGLQJ HQGHG ZKHQ KH OHIW WKH FRXQWU\ LQ :/HPSKDVLVDGGHG 0DUFKDQGWKHFXUUHQWUHLQVWDWHPHQWSURFHHGLQJGLG QRWEHJLQXQWLOsDQXDU\ 7KXV QRW RQO\ GLG &RQJUHVV HOLPLQDWH WKH UHWURDFWLYH ODQJXDJHIURPILWDOVRFRQVLGHUHGDQGUHMHFWHGQHZ 7KH ,16 FRUUHFWO\ DUJXHV WKDW QR SURFHHGLQJ LQYROYLQJ ODQJXDJHZKLFKZRXOGKDYHDSSOLHGWKHQHZUHLQVWDWHPHQW %HMMDQLZDVSHQGLQJDWWKHWLPHRIWKH,,5,5$jVHQDFWPHQWRU SURYLVLRQWRLOOHJDOUHHQWULHVZKLFKRFFXUUHGEHIRUHWKHGDWH HIIHFWLYHGDWH+RZHYHUWKLVGRHVQRWQHFHVVDULO\PHDQWKDW RIHQDFWPHQW7KXV&RQJUHVVQRWRQO\UHPRYHGUHWURDFWLYH WKHLVVXHRIUHWURDFWLYLW\LVQRWLPSOLFDWHG$OWKRXJKWKH,16 ODQJXDJH IURP WKH ,1$jV UHLQVWDWHPHQW SURYLVLRQ LW DOVR GLGQRWLQLWLDWHWKHUHLQVWDWHPHQWSURFHHGLQJXQWLOWKH UHMHFWHG QHZ UHWURDFWLYH ODQJXDJH ZKLFK ZRXOG KDYH EHHQ FRQGXFW ZKLFK VHUYHV DV WKH EDVLV IRU WKH SURFHHGLQJ LQFOXGHGLQD6HH&DUGR]D)RQVHFD86DW %HMMDQLjVDOOHJHGO\LOOHJDOUHHQWU\RFFXUUHGLQSULRUWR m)HZSULQFLSOHVRIVWDWXWRU\FRQVWUXFWLRQDUHPRUH WKHVWDWXWHjVHQDFWPHQWDQGHIIHFWLYHGDWH FRPSHOOLQJWKDQWKHSURSRVLWLRQWKDW&RQJUHVVGRHVQRWLQWHQG VXE VLOHQWLR WR HQDFW VWDWXWRU\ ODQJXDJH WKDW LV KDV HDUOLHU 7KH,16DVVHUWVWKDWWKH&RXUWVKRXOGXWLOL]HWKHDQDO\VLV GLVFDUGHGLQIDYRURIRWKHUODQJXDJHl3DN)GDW VHW IRUWK LQ &KHYURQ 86$ ,QF Y 1DWXUDO 5HVRXUFHV m2VWHQVLEO\ &RQJUHVV KDG FRQVLGHUHG D UHWURDFWLYLW\ 'HIHQVH&RXQFLO,QF86DQGGHIHUWR SURYLVLRQEXWGHFLGHGDJDLQVWLW:LWKVXFKVWURQJHYLGHQFH WKH ,16 LQWHUSUHWDWLRQ FRQFHUQLQJ WKH DSSOLFDELOLW\ RI RIFRQJUHVVLRQDOLQWHQWZHUHIXVHWRLQFOXGHLQWKHODQJXDJH D7KH,16GRHVQRWKRZHYHUGLUHFWRXUDWWHQWLRQ RIWKHVWDWXWHDSURYLVLRQWKDW&RQJUHVVFKRVHWRRPLWl WRDQ\SDUWLFXODUmLQWHUSUHWDWLRQlUHQGHUHGE\WKHDJHQF\ 7KH &RXUW QH[W WXUQV WR WKH ,16 DUJXPHQW WKDW &DVWUR &RUWH]jV UHOLDQFH RQ WKH QHJDWLYH LQIHUHQFH DUJXPHQW LV PLVSODFHG)LUVWWKH,16DUJXHVWKDWWKH&RXUWFDQQRWUHO\RQ :H QHHG QRW DFFRUG GHIHUHQFH WR LQIRUPDO DJHQF\ LQWHUSUHWDWLRQV RU RSLQLRQV 6HH HJ &KULVWHQVHQ Y +DUULV &RXQW\ 86 SURYLVLRQVORFDWHGLQVXEWLWOHVZKLFKDGGUHVVGLIIHUHQWVXEMHFW m,QWHUSUHWDWLRQV VXFK DV WKRVH LQ RSLQLRQ OHWWHUVOLNH PDWWHUV6HFRQGWKH,16DVVHUWVWKDWQRQHJDWLYHLQIHUHQFH LQWHUSUHWDWLRQV FRQWDLQHG LQ SROLF\ VWDWHPHQWV DJHQF\ PDQXDOV DQG %HMMDQLY,16HWDO 1R 1R %HMMDQLY,16HWDO RIPDGHVZHHSLQJUHYLVLRQVRILPPLJUDWLRQSROLF\l 8QGHU&KHYURQDQDJHQF\jVLQWHUSUHWDWLRQRIDVWDWXWHPXVW $VKNLY,16)GWK&LU,,5,5$ZDV EHDFFRUGHGGHIHUHQFHZKHUH&RQJUHVVKDVOHIWDJDSIRUWKH mGHVLJQHGWRH[SHGLWHWKHUHPRYDORIGHSRUWDEOHDOLHQVDQGWR DJHQF\ WR ILOO RU ZKHUH WKH DJHQF\ RIIHUV D UHDVRQDEOH OLPLW WKHLU DELOLW\ WR REWDLQ GLVFUHWLRQDU\ UHOLHI IURP LQWHUSUHWDWLRQRIDSURYLVLRQWKDWLVDPELJXRXVRUXQFHUWDLQ GHSRUWDWLRQl6HHDOVR$\DODY5HQR)6XSS 6HH7ROHGR+RVSLWDOY6KDODOD)GWK&LU :'7H[DVm$VVHWIRUWKVHFWLRQDLQGLFDWHV MXGJPHQWYDFDWHGRQRWKHUJURXQGV86 WKDW&RQJUHVVLQWHQGHGWRH[SHODOLHQVIURPWKH8QLWHG6WDWHV ,QGHWHUPLQLQJZKHWKHUVXFKGHIHUHQFHLVDSSURSULDWH ZLWKRXW DQ\ RSSRUWXQLW\ WR FKDOOHQJH WKH SULRU GHSRUWDWLRQ KRZHYHUWKH&RXUWPXVWHQJDJHLQDWZRVWHSDQDO\VLV,QD RUGHURUWRDSSO\IRUUHOLHILIWKH\HYHULOOHJDOO\UHHQWHUHGDIWHU SULRURSLQLRQDGGUHVVLQJWKHUHWURDFWLYLW\RIDQRWKHU,,5,5$ GHSRUWDWLRQl+RZHYHUDVWKH6XSUHPH&RXUWKDVUHFHQWO\ SURYLVLRQ WKLV &RXUW H[SODLQHG WKH &KHYURQ DQDO\VLV DV UHFRJQL]HG m>E@\ LWVHOI WKH FRPSUHKHQVLYHQHVV RI D IROORZV FRQJUHVVLRQDO HQDFWPHQW VD\V QRWKLQJ DERXW &RQJUHVVjV LQWHQWLRQVZLWKUHVSHFWWRWKHUHWURDFWLYLW\RIWKHHQDFWPHQWjV &KHYURQ UHTXLUHV XV ILUVW WR DVN ZKHWKHU &RQJUHVVjV LQGLYLGXDOSURYLVLRQVl6W&\U6&WDW LQWHQWLVFOHDUDVWRWKHSUHFLVHTXHVWLRQDWLVVXH,IE\ mHPSOR\LQJVWDQGDUGWRROVRIVWDWXWRU\FRQVWUXFWLRQlZH *LYHQ&RQJUHVVjVJHQHUDODSSURDFKLQ,,5,5$WRUHYLVLQJ GHWHUPLQHWKDW&RQJUHVVjVLQWHQWLVFOHDUmWKDWLVWKHHQG LPPLJUDWLRQODZRQHZRXOGH[SHFW&RQJUHVVWRKDYHOHIWWKH RI WKH PDWWHUl ,W LV RQO\ ZKHQ D VWDWXWH LV VLOHQW RU I UHWURDFWLYH ODQJXDJH VXEVWDQWLDOO\ LQWDFW WKHUHE\ DPELJXRXV WKDW D FRXUW PXVW GHWHUPLQH ZKHWKHU DQ HQVXULQJWKHUHWURDFWLYHDSSOLFDWLRQRIDWKHQHZ DJHQF\jVLQWHUSUHWDWLRQLVDSHUPLVVLEOHFRQVWUXFWLRQRI PRUHVWULQJHQWUHLQVWDWHPHQWSURYLVLRQ%XW&RQJUHVVGLGQRW OHDYHWKDWODQJXDJHLQWDFWQRUGLGLWDPHQGWKHODQJXDJHWR LQFRUSRUDWH WKH HIIHFWLYH GDWH RI D &RQJUHVV HQIRUFHPHQW JXLGHOLQHV DOO RI ZKLFK ODFN WKH IRUFH RI ODZGR QRW ZDUUDQW FRPSOHWHO\HOLPLQDWHGWKHUHWURDFWLYHODQJXDJHIURPWKHQHZ &KHYURQ VW\OH GHIHUHQFHl%RZHQ Y *HRUJHWRZQ 8QLY +RVS 86 SURYLVLRQ:HDJUHHZLWKWKH1LQWK&LUFXLWWKDWWKHFRPSOHWH LQWHUSUHWDWLRQ DGYDQFHG IRU ILUVW WLPH LQ OLWLJDWLRQ QRW HOLPLQDWLRQRIWKHUHWURDFWLYHODQJXDJHIURPWKHUHLQVWDWHPHQW HQWLWOHG WR GHIHUHQFH 6RXWKHUQ 8WDK :LOGHUQHVV $OOLDQFH Y 'DEQH\ SURYLVLRQLVSHUVXDVLYHHYLGHQFHWKDW&RQJUHVVGLGQRWLQWHQG )G WK &LU m$ SRVLWLRQ WDNHQ E\ DQ DJHQF\ GXULQJ OLWLJDWLRQ KRZHYHU LV QRW VXIILFLHQWO\ IRUPDO WKDW LW LV GHVHUYLQJ RI IRU WKH QHZ UHLQVWDWHPHQW SURYLVLRQ WR DSSO\ WR UHHQWULHV &KHYURQ GHIHUHQFHl ZKLFKRFFXUUHGSULRUWRWKHVWDWXWHjVHIIHFWLYHGDWHm)HZ SULQFLSOHVRIVWDWXWRU\FRQVWUXFWLRQDUHPRUHFRPSHOOLQJWKDQ $OWKRXJK WKH ,16 GRHV QRW GLUHFW RXU DWWHQWLRQ WR DQ\ SDUWLFXODU WKHSURSRVLWLRQWKDW&RQJUHVVGRHVQRWLQWHQGVXEVLOHQWLRWR LQWHUSUHWDWLRQ ZH FDQ VXUPLVH WKDW WKH ,16 ZRXOG KDYH WKLV &RXUW GHIHU HQDFWVWDWXWRU\ODQJXDJHWKDWLVKDVHDUOLHUGLVFDUGHGLQIDYRU WR 0DWWHU RI *1& ,QW 'HF %,$ DQG &)5 +RZHYHU WKHVH LWHPV GR QRW VXSSRUW WKH JRYHUQPHQWjV SRVLWLRQ 6HH RIRWKHUODQJXDJHl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jVLQWHQWLQFOXGHWKHIDPLOLDU DSSOLFDWLRQ6HHLG SUHVXPSWLRQVWKDWDUHDSSOLHGLQFOXGLQJWKHSUHVXPSWLRQ DJDLQVW UHWURDFWLYLW\ VHW IRUWK LQ/DQGJUDI Y 86, )LOP 7KHFRXUWKHOGWKDWEHFDXVH&RQJUHVVjVPRWLYHLQPRYLQJ 3URGV WKH SURYLVLRQ ZDV DPELJXRXV DQG EHFDXVH RI WKH YDULRXV WHPSRUDOSURYLVLRQVVHWIRUWKZLWKLQ6XEWLWOH&QRLQIHUHQFH 3DN Y 5HQR )G WK &LU FLWDWLRQV FRXOGEHGUDZQDVWRWKHODFNRIDQHIIHFWLYHGDWHIRU,,5,5$ RPLWWHG 6HH DOVR 7ROHGR +RVSLWDO )G DW 6HHLG$FFRUGLQJWRWKH,16LIQRLQIHUHQFHDULVHV FRQJUHVVLRQDO LQWHQW mFDQ DSSHDU LQ WKH ODQJXDJH RI WKH IURP FRPSDULQJ VHFWLRQV ZLWKLQ 6XEWLWOH & WKHQ VXUHO\ QR VWDWXWHRULWFDQEHFRPHDSSDUHQWLQOLJKWRIWKHVWDWXWRU\ LQIHUHQFH DULVHV IURP FRPSDULQJ D VHFWLRQ OLNH D VFKHPHWDNHQDVDZKROHl ZKLFKLVORFDWHGLQ6XEWLWOH$WRVHFWLRQVORFDWHGLQ6XEWLWOH & ,Q3DNWKH,16DUJXHGWKDWWKH&RXUWVKRXOGGHIHUWRWKH $WWRUQH\*HQHUDOjVHDUOLHULQWHUSUHWDWLRQRIWKHSURYLVLRQDW $QDO\VLV LVVXH LQ ZKLFK WKH $WWRUQH\ *HQHUDO FRQFOXGHG WKDW WKH SURYLVLRQZDVIXOO\UHWURDFWLYH6HH3DN)GDW ,QGHWHUPLQLQJWKHDSSOLFDWLRQRIDZHEHJLQE\ $OWKRXJK WKH &RXUW XOWLPDWHO\ GLG QRW DGGUHVV WKH VHFRQG FRQVLGHULQJ WKH GLIIHUHQFH EHWZHHQ D DQG LWV &KHYURQ LQTXLU\ EHFDXVH LW FRQFOXGHG WKDW &RQJUHVV KDG SUHGHFHVVRUI$VVHWIRUWKDERYHWKH,1$jVLQLWLDO FOHDUO\H[SUHVVHGLWVLQWHQWWKDWWKHSURYLVLRQVKRXOGQRWDSSO\ UHLQVWDWHPHQW SURYLVLRQ I ZDV HQDFWHG LQ UHWURDFWLYHO\ WKH &RXUW QRWHG LWV GRXEW WKDW &KHYURQ LV 6HFWLRQIH[SUHVVO\SURYLGHVWKDWUHLQVWDWHPHQWDSSOLHV DSSOLFDEOHWRWKHLVVXHRIUHWURDFWLYLW\7KH&RXUWZURWH WRLOOHJDOUHHQWULHVZKLFKRFFXUUHGmEHIRUHRUDIWHUsXQH l7KLVODQJXDJHFOHDUO\H[SUHVVHG&RQJUHVVjVLQWHQWWKDW ,WLVXQFHUWDLQZKHWKHU&KHYURQDSSOLHVLQWKLVFDVHHYHQ SULRU RUGHUV RI GHSRUWDWLRQ FRXOG EH UHLQVWDWHG HYHQ LI WKH LI WKHUH KDG EHHQ DQ DEVHQFH RI DQ H[SUHVVLRQ RI DOLHQ UHHQWHUHG WKH FRXQWU\ SULRU WR WKH HQDFWPHQW RI WKDW FRQJUHVVLRQDO LQWHQW m&KHYURQ DSSHDUV WR VSHDN WR UHLQVWDWHPHQW SURYLVLRQ 7KDW ODQJXDJH KRZHYHU ZDV VWDWXWRU\LQWHUSUHWDWLRQLQWKRVHLQVWDQFHVZKHUH&RQJUHVV UHPRYHGIURPWKHQHZUHLQVWDWHPHQWSURYLVLRQDWLVVXHLQWKLV GHOHJDWHGUXOHPDNLQJSRZHUWRDQDJHQF\DQGWKHUHE\ FDVHD VRXJKWWRUHO\RQDJHQF\H[SHUWLVHLQWKHIRUPXODWLRQRI VXEVWDQWLYH SROLF\l 'HWHUPLQLQJ D VWDWXWHjV WHPSRUDO 7KH,16DUJXHVWKDW&RQJUHVVLQWHQGHGDWREH UHDFKKRZHYHUGRHVQRWUHTXLUHDJHQF\H[SHUWLVHEXW mVXEVWDQWLYHO\ GLIIHUHQWl IURP I DQG WKXV D UDWKHU SUHVHQWV D mSXUH TXHVWLRQ RI VWDWXWRU\ FRPSDULVRQ RI WKH SURYLVLRQV FDQ EH PLVOHDGLQJ :H LQWHUSUHWDWLRQ IRU WKH FRXUWV WR GHFLGHl $FFRUGLQJO\ XQGHUVWDQG WKH ,16 WR PHDQ WKDW &RQJUHVV LQWHQGHG WR VRPHFRXUWVDGYDQFHWKHSRVLWLRQWKDWWKLVGHWHUPLQDWLRQ VWUHQJWKHQ WKLV SURYLVLRQ DQG UHQGHU UHLQVWDWHPHQW PD\ EH PDGH mZLWKRXW DIIRUGLQJ DQ\ GHIHUHQFH WR WKH SURFHHGLQJVHDVLHUWRLQLWLDWHDQGH[HFXWH $WWRUQH\*HQHUDOl :HDJUHHWKDW&RQJUHVVLQWHQGHGWKHQHZSURYLVLRQWREH ,GDWQLQWHUQDOFLWDWLRQVRPLWWHG VXEVWDQWLYHO\GLIIHUHQWDQGIXOO\UHFRJQL]HWKDWWKHKLJKO\ GHWDLOHG FRPSUHKHQVLYH QDWXUH RI ,,5,5$ ZDV D UHVXOW RI 2WKHU FLUFXLWV KDYH OLNHZLVH TXHVWLRQHG WKH SURSULHW\ RI &RQJUHVVVHHNLQJWRVWUHQJWKHQLPPLJUDWLRQODZV6HHHJ &KHYURQGHIHUHQFHZKHQGHWHUPLQLQJWKHWHPSRUDOVFRSHRI %DUWRV]HZVND=DMDFY,16)GWK&LU D VWDWXWH 6HH HJ sXUDGR*XWLHUUH] Y *UHHQH )G m7KH,OOHJDO,PPLJUDWLRQDQG,PPLJUDQW5HVSRQVLELOLW\$FW %HMMDQLY,16HWDO 1R 1R %HMMDQLY,16HWDO SUREOHPV ZLWK WKH QHJDWLYH LQIHUHQFH DUJXPHQW )LUVW WKH WK &LU FHUW GHQLHG 86 ,16DUJXHVWKDWDQHJDWLYHLPSOLFDWLRQPD\QRWEHGUDZQIURP QRWLQJWKDWWKHGHWHUPLQDWLRQRIDVWDWXWHjVWHPSRUDO D FRPSDULVRQ RI VHFWLRQV ZKLFK DGGUHVV GLVWLQFW VXEMHFW UHDFKGRHVQRWLQYROYHDQ\mVSHFLDODJHQF\H[SHUWLVHlDQG PDWWHUV7KH,16UHOLHVRQ0DUWLQY+DGL[86 UHDFKLQJVXFKGHWHUPLQDWLRQZLWKRXWDIIRUGLQJDQ\GHIHUHQFH LQZKLFKWKH6XSUHPH&RXUWLQGLFDWHGWKDWWKH WRWKH$WWRUQH\*HQHUDO6DQGRYDOY5HQR)G QHJDWLYH LQIHUHQFH DUJXPHQW PD\ EH XVHG RQO\ ZKHQ G&LUQRWLQJGRXEWWKDW&KHYURQGHIHUHQFHLV FRPSDULQJVHFWLRQVRIDVWDWXWHZKLFKDGGUHVVVLPLODUVXEMHFW DSSURSULDWH LQ GHWHUPLQLQJ D VWDWXWHjV HIIHFWLYH GDWH EXW PDWWHUV:KHUHWKHVWDWXWRU\VHFWLRQVDGGUHVVmZKROO\GLVWLQFW DVVXPLQJ DUJXHQGR WKDW &KHYURQ GRHV DSSO\ DQG ILQGLQJ VXEMHFWPDWWHUVlQRQHJDWLYHLQIHUHQFHDULVHV6HHLGDW XQGHUWKHILUVWVWHSWKDW&RQJUHVVH[SUHVVHGLWVLQWHQWLRQWKDW 6HFRQGWKH,16ILQGVIDXOWZLWKWKHQHJDWLYHLQIHUHQFHWKDW WKHVWDWXWHQRWEHDSSOLHGUHWURDFWLYHO\*RQFDOYHVY5HQR EHFDXVH &RQJUHVV VSHFLILHG WKH WHPSRUDO VFRSH RI VHYHUDO )G VW &LU m:H WKLQN LW LV D SURYLVLRQVRIWKH,,5,5$EXWGLGQRWGRVRIRUD VLJQLILFDQW TXHVWLRQ ZKHWKHU WKH GHWHUPLQDWLRQ RI WKH &RQJUHVVPXVWKDYHLQWHQGHGWKDWWKHSURYLVLRQZRXOGQRWEH DSSOLFDWLRQRIWKHHIIHFWLYHGDWHRIDJRYHUQLQJVWDWXWHLVWKH DSSOLHG WR SUHHQDFWPHQW FRQGXFW 7KH ,16 DUJXHV WKDW VRUWRISROLF\PDWWHUZKLFK&RQJUHVVLQWHQGHGWKHDJHQF\WR &DVWUR&RUWH]LJQRUHGWKHIDFWWKDW,,5,5$KDVDZLGHYDULHW\ GHFLGH DQG WKXV ZKHWKHU WKH GRFWULQDO XQGHUSLQQLQJV RI RIWHPSRUDOVFRSHSURYLVLRQVDQGWKDWQRQHJDWLYHLQIHUHQFH &KHYURQDUHSUHVHQWKHUHl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mWRROV RI VWDWXWRU\ FRQVWUXFWLRQVl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jV LQWHUSUHWDWLRQ RI PRYHGIURP6XEWLWOH$WR6XEWLWOH&6HHLG:LWKLQ DjVDSSOLFDWLRQ6HH9HOD]TXH]*DEULHO)G 6XEWLWOH&VRPHVHFWLRQVVSHFLILFDOO\SURYLGHIRUSURVSHFWLYH DWQ DSSOLFDWLRQ RWKHUV VSHFLILFDOO\ SURYLGH IRU DSSOLFDWLRQ WR ,QOLJKWRI6W&\U9HOD]TXH]*DEULHODQG3DNWKLV&RXUW ILQGVWKDW&KHYURQLVQRWDSSOLFDEOHWRWKHLVVXHEHIRUHWKH %HMMDQLY,16HWDO 1R 1R %HMMDQLY,16HWDO &RXUW +RZHYHU HYHQ LI ZH ZHUH WR DSSO\ WKH LQ/LQGKZKHUHWKHUHZDVDmQHDWGLVWLQFWLRQlEHWZHHQVLOHQFH &KHYURQDQDO\VLVLWUHTXLUHVWKHVDPHLQLWLDOLQTXLU\DVWKH DQGDFOHDUVWDWHPHQWRIUHWURDFWLYLW\6HHLGDWQ /DQGJUDIDQDO\VLVLHZKHWKHU&RQJUHVVj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j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jVHIIHFWLYHGDWH 7KHSDUWLHVjDUJXPHQWV 7KHFRXUWUHDFKHGWKLVFRQFOXVLRQE\ILQGLQJWKDW&RQJUHVV LQWHQGHG D WR HQFRPSDVV RQO\ UHHQWULHV ZKLFK %HMMDQL XUJHV WKLV &RXUW WR IROORZ WKH &DVWUR&RUWH] RFFXUUHGDIWHUWKHHIIHFWLYHGDWH$IWHUWKHRUDODUJXPHQWRI GHFLVLRQ7KH,16FRQWHQGVWKDW&DVWUR&RUWH]ZDVZURQJO\ WKLV FDVH WKH )RXUWK &LUFXLW &RXUW RI $SSHDOV GHFLGHG GHFLGHG 9HODVTXH]*DEULHOY&URFHWWL)GWK&LU 7KH)RXUWK&LUFXLWFRQFOXGHGWKDWDDSSOLHVWRDQ )LUVWWKH,16ILQGVIDXOWZLWKWKHFRXUWjVUHOLDQFHRQWKH DOLHQZKRUHHQWHUHGWKHFRXQWU\SULRUWRWKHVWDWXWHjVHIIHFWLYH HOLPLQDWLRQRIWKHUHWURDFWLYLW\ODQJXDJHZKLFKZDVLQFOXGHG GDWH8QOLNHWKH1LQWK&LUFXLWKRZHYHUWKH)RXUWK&LUFXLW LQ I $FFRUGLQJ WR WKH ,16 ,,5,5$ LV D FRQFOXGHG WKDW &RQJUHVV GLG QRW H[SUHVV DQ\ LQWHQW DV WR FRPSUHKHQVLYH OHJLVODWLYH VFKHPH ZKLFK GUDPDWLFDOO\ DjV DSSOLFDWLRQ 7KXV WKH FRXUW IRFXVHG RQ WKH FKDQJHG LPPLJUDWLRQ ODZ DQG WKXV FRPSDULVRQV EHWZHHQ VHFRQG/DQGJUDIVWHSDQGFRQFOXGHGWKDWWKHVWDWXWHGRHVQRW ,,5,5$SURYLVLRQVDQGWKHLUSUHGHFHVVRUVFDQEHPLVOHDGLQJ KDYH DQ LPSHUPLVVLEOH UHWURDFWLYH HIIHFW DV DSSOLHG WR WKH 6SHFLILFDOO\WKH,16SRLQWVRXWWKDWDH[SDQGHGWKH DOLHQ LQ TXHVWLRQ $OWKRXJK WKH SDUWLHV GLG QRW KDYH WKH JRYHUQPHQWjVDXWKRULW\DQGLVPRUHKDUVKWKDQIDQG EHQHILW RI WKH 9HODVTXH]*DEULHO RSLQLRQ SULRU WR WKH DUJXHVWKDWWKHVHFKDQJHVLQGLFDWHWKDW&RQJUHVVLQWHQGHGWKH VXEPLVVLRQRIWKLVPDWWHUZHZLOOQHYHUWKHOHVVFRQVLGHUWKH QHZSURYLVLRQWREHVXEVWDQWLYHO\GLIIHUHQW$FFRUGLQJWRWKH RSLQLRQ EHFDXVH LW UHSUHVHQWV WKH YLHZ RI DQRWKHU FLUFXLW ,16 D mFUDFNGRZQl RQ LOOHJDO UHHQWULHV ZRXOG QHFHVVDULO\ FRXUW HQWDLO UHWURDFWLYH DSSOLFDWLRQ RI WKH QHZ UHLQVWDWHPHQW SURYLVLRQ &RQJUHVV GLG QRW H[SUHVVO\ DGGUHVV WKH DSSOLFDELOLW\ RI DWRDOLHQVZKRUHHQWHUHGWKHFRXQWU\SULRUWRWKH 6HFRQG WKH ,16 DUJXHV WKDW &DVWUR&RUWH] LPSURSHUO\ VWDWXWHj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µVWDWHPHQW WKDW D VWDWXWH ZLOO EHFRPH HIIHFWLYH RQ D LQIHUHQFHDUJXPHQWIRUWZRUHDVRQV)LUVWWKHFRXUWQRWHGWKDW FHUWDLQGDWHGRHVQRWHYHQDUJXDEO\VXJJHVWWKDWLWKDV DOWKRXJK &RQJUHVV PDGH VHYHUDO SURYLVLRQV LQ 7LWOH ,,, DQ\ DSSOLFDWLRQ WR FRQGXFW WKDW RFFXUUHG DW DQ HDUOLHU H[SUHVVO\ UHWURDFWLYH LW DOVR PDGH VHYHUDO SURYLVLRQV GDWHj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jV HIIHFWLYH GDWH EHFDXVH WKLVFDVH8QOLNH6XEWLWOHV%DQG&6XEWLWOH$LQFOXGHV &RQJUHVV FOHDUO\ LQWHQGHG WKDW WKH VWDWXWH VKRXOG QRW EH DJHQHUDOHIIHFWLYHGDWHWKDWDSSOLHVWRDOPRVWDOORILWV DSSOLHG UHWURDFWLYHO\ WR DOLHQV ZKR UHHQWHUHG SULRU WR WKDW SURYLVLRQV 6HH ,,5,5$ D 7KXV LW LV QRW WLPH 6HH &DVWUR&RUWH] )G DW 7KH VXUSULVLQJWKDWPDQ\VHFWLRQVRI6XEWLWOHV%DQG&KDYH FRXUWjVRSLQLRQZDVEDVHGRQWKUHHDVSHFWVRID WKHLURZQHIIHFWLYHGDWHVDQGDGRHVQRW7KH PHUHIDFWWKDWWKHLQGLYLGXDOHIIHFWLYHGDWHSURYLVLRQVLQ )LUVWDUHSODFHGIWKHSULRUUHLQVWDWHPHQW 6XEWLWOHV%DQG&FRQWDLQH[SUHVVWHPSRUDOUHVWULFWLRQV SURYLVLRQ ZKLFK ZDV HQDFWHG LQ 6HFWLRQ I VKHGV QR OLJKW RQ &RQJUHVVjV LQWHQW UHJDUGLQJ VSHFLILHG WKDW UHLQVWDWHPHQW ZDV DSSOLFDEOH WR UHHQWULHV DjVDSSOLFDWLRQWRSUHHQDFWPHQWUHHQWULHV mZKHWKHU EHIRUH RU DIWHU sXQH l :KHQ &RQJUHVV UHSODFHG I ZLWK D WKH QHZ UHLQVWDWHPHQW ,GDW7KHFRXUWDFNQRZOHGJHG&DVWUR&RUWH]jVUHOLDQFH SURYLVLRQLWFRPSOHWHO\HOLPLQDWHGWKHUHWURDFWLYLW\ODQJXDJH RQWKHQHJDWLYHLQIHUHQFHEXWGLVDJUHHGZLWKWKDWUHOLDQFH LQVWHDGRIOHDYLQJLQWDFWWKHUHWURDFWLYLW\ODQJXDJHIURPWKH EDVHG RQ WKH mGLVWLQFW VXEMHFW PDWWHUVl DGGUHVVHG LQ WKH SULRUSURYLVLRQRUVLPSO\PRGLI\LQJWKHGDWH6HH&DVWUR GLIIHUHQW VXEWLWOHV 7KH FRXUW QRWHG WKDW D DQG &RUWH] )G DW $FFRUGLQJ WR &DVWUR&RUWH] ,,5,5$SUHVHQWDVLWXDWLRQGLVWLQJXLVKDEOHIURPWKDWSUHVHQWHG m&RQJUHVVjV GHFLVLRQ WR UHPRYH WKH UHWURDFWLYLW\ ODQJXDJH IURPWKLVSDUWRIWKHVWDWXWHSURYLGHVVWURQJVXSSRUWIRUWKH FRQFOXVLRQWKDWLWGLGQRWLQWHQGWKDWWKHUHYLVHGSURYLVLRQEH %HMMDQLY,16HWDO 1R 1R %HMMDQLY,16HWDO DSSOLHGWRUHHQWULHVRFFXUULQJEHIRUHWKHGDWHRIWKHVWDWXWHjV LQWHQGHGWKDWDZRXOGQRWDSSO\WRUHHQWULHVSULRUWR HQDFWPHQWl6HHLGDW WKH HIIHFWLYH GDWH 7KH FRXUW QRWHG WKDW DIWHU /LQGK m&RQJUHVV LV GHHPHG WR HQDFW OHJLVODWLRQ ZLWK /DQGJUDIjV 6HFRQG&DVWUR&RUWH]H[DPLQHGWKHUHVWRI,,5,5$DQG µGHIDXOWUXOHjLQPLQGlDQGPXVWEHH[SOLFLWLILWLQWHQGVD FRQFOXGHGWKDWZKHUH,,5,5$FKDQJHVUXOHVIRUFRQGXFWZKLFK SURYLVLRQWREHDSSOLHGUHWURDFWLYHO\6HHLGDW RFFXUUHG SULRU WR WKH HIIHFWLYH GDWH &RQJUHVV VSHFLILFDOO\ LQGLFDWHGWKDWWKRVHVHFWLRQVZRXOGDSSO\WRSUHHQDFWPHQW 7KXV LQ FRQFOXGLQJ WKDW &RQJUHVV GLG QRW LQWHQG FRQGXFW 7KXV &DVWUR&RUWH] UHDVRQHG E\ QHJDWLYH DWRDSSO\WRDOLHQVZKRUHHQWHUHGWKHFRXQWU\SULRU LPSOLFDWLRQ WKDW WKH IDLOXUH WR H[SUHVVO\ SURYLGH IRU WR WKH VWDWXWHjV HIIHFWLYH GDWH&DVWUR&RUWH] UHOLHG RQ UHWURDFWLYHDSSOLFDWLRQLQDLQGLFDWHVWKDW&RQJUHVV &RQJUHVVjV GHFLVLRQ WR UHPRYH WKH H[SUHVV UHWURDFWLYLW\ GLG QRW LQWHQG IRU WKH UHLQVWDWHPHQW SURYLVLRQ WR DSSO\ ODQJXDJH IURP WKH ,1$jV UHLQVWDWHPHQW SURYLVLRQ UHWURDFWLYHO\WRDOLHQVZKRUHHQWHUHGWKHFRXQWU\SULRUWR$SULO &RQJUHVVjVGHFLVLRQWRH[SUHVVO\PDNHVHYHUDORWKHU,,5,5$ 6HHLGDW SURYLVLRQV DSSOLFDEOH WR SUHHQDFWPHQW FRQGXFW DQG &RQJUHVVjVIDLOXUHWRLQFOXGHODQJXDJHDSSO\LQJD 7R VXSSRUW WKH QHJDWLYH LPSOLFDWLRQ DUJXPHQW WKH FRXUW WRLOOHJDOUHHQWULHVZKLFKRFFXUUHGSULRUWR$SULO H[DPLQHG VHYHUDO SURYLVLRQV RI ,,5,5$ ZKLFK VSHFLI\ WKDW WKH\ DSSO\ WR SUHHQDFWPHQW FRQGXFW 7KH FRXUW ILUVW $VDUHVXOWRIILQGLQJDFOHDUH[SUHVVLRQRIFRQJUHVVLRQDO H[DPLQHGORFDWHGLQ6XEWLWOH%ZKLFKPRGLILHVWKH LQWHQW&DVWUR&RUWH]GLGQRWSURFHHGWRWKHVHFRQGVWHSRIWKH GHILQLWLRQRImDJJUDYDWHGIHORQ\lDQGSURYLGHVWKDWWKHWHUP /DQGJUDI DQDO\VLV 6HH LG DW 7KH FRXUW UHIXVHG WR DSSOLHV UHJDUGOHVV RI ZKHWKHU WKH FRQYLFWLRQ ZDV HQWHUHG DFFRUG WKH $WWRUQH\ *HQHUDOjV LQWHUSUHWDWLRQ &KHYURQ mEHIRUHRQRUDIWHUWKHGDWHRIHQDFWPHQWl6HHLGDW GHIHUHQFHEHFDXVHJLYHQWKHH[WUHPHO\GHWDLOHGUXOHVVHWWLQJ 7KH FRXUW QH[W H[DPLQHG SURYLVLRQV ZKLFK SURYLGH WKDW IRUWK,,5,5$jVDSSOLFDWLRQWKHFRXUWIRXQGLWmLQFRQFHLYDEOH FRQGXFW ZKLFK RFFXUUHG EHIRUH HQDFWPHQW PD\ VXEMHFW DQ WKDW&RQJUHVVLQWHQGHGWRGHOHJDWHWRWKH%,$WKHGHFLVLRQ DOLHQWRH[FOXVLRQRUSURKLELWDZDLYHU6HHLGDW ZKHWKHUWRDSSO\,1$DWRFRQGXFWWKDWSUHGDWHVLWV 7KHFRXUWFLWHGDVDQH[DPSOHFORFDWHGLQ6XEWLWOH& HQDFWPHQWl ,G DW 7KH GHWDLOHG WUDQVLWLRQ UXOHV ZKLFKSURYLGHVWKDWDQH[FOXVLRQEHFDXVHRIXQODZIXOYRWLQJ HYLGHQFH WKDW &RQJUHVV mDVVXPHG IRU LWVHOI WKH WDVN RI DSSOLHVWRDQ\DOLHQZKRKDVYRWHGmEHIRUHRQRUDIWHUlWKH GHWHUPLQLQJ ZKHQ DQG KRZ ,,5,5$jV YDULRXV SURYLVLRQV GDWH RI HQDFWPHQW 6HH LG DW )LQDOO\ WKH FRXUW ZRXOGEHFRPHDSSOLFDEOHl,G0RUHRYHUEHFDXVHWKHFRXUW H[DPLQHGFDOVRORFDWHGLQ6XEWLWOH&ZKLFKSURYLGHV FRQFOXGHG WKDW D LV QRW DPELJXRXV DV WR WKDW FHUWDLQ DPHQGPHQWV WR WKH ,1$ VKDOO DSSO\ WR FRQJUHVVLRQDOLQWHQWGHIHUHQFHWRWKH,16LQWHUSUHWDWLRQZDV DSSOLFDWLRQVIRUZDLYHUVILOHGmEHIRUHRQRUDIWHUlWKHGDWHRI QRWDSSURSULDWH HQDFWPHQW6HHLG7KXVE\FRPSDULQJDZKLFKLV VLOHQW DV WR DSSOLFDWLRQ WR RWKHU ,,5,5$ VHFWLRQV ZKLFK VSHFLI\ WKDW WKH\ DUH WR EH DSSOLHG UHWURDFWLYHO\ WKH FRXUW sXGJH )HUQDQGH] GLVVHQWHG IURP WKH SDQHOjV RSLQLRQ DQG DUJXHG WKDW FRQFOXGHGWKDW&RQJUHVVPXVWKDYHLQWHQGHGWKDWD D PD\ EH UHWURDFWLYHO\ DSSOLHG WR DOLHQV ZKR LOOHJDOO\ UHHQWHUHG ZRXOG QRW DSSO\ UHWURDFWLYHO\ WR SUHHQDFWPHQW LOOHJDO WKH FRXQWU\ SULRU WR WKH VWDWXWHjV HIIHFWLYH GDWH EHFDXVH VXFK LQGLYLGXDOV UHHQWULHV GLG QRW DFW LQ UHOLDQFH RQ WKH SULRU UHLQVWDWHPHQW SURYLVLRQ DQG EHFDXVH WKH VWDWXWH GRHV QRW DIIHFW DQ\ YHVWHG ULJKWV QRU GRHV LW LPSRVH DQ\ QHZ GXWLHV RU QHZ OLDELOLWLHV $OWKRXJK WKH GLVVHQW ZRXOG SHUPLW WKH 7KLUG&DVWUR&RUWH]UHOLHGRQ&RQJUHVVjVVLOHQFHDVWRWKH UHWURDFWLYH DSSOLFDWLRQ RI D LW H[SUHVVHG GRXEW LQ GLFWD LVVXH RI UHWURDFWLYLW\ WR FRQFOXGH WKDW &RQJUHVV PXVW KDYH UHJDUGLQJ WKH FRQVWLWXWLRQDOLW\ RI WKH mKDUVKHYHQ SHFXOLDUl UHJXODWLRQV LPSOHPHQWLQJ D 6HH LG DW )HUQDQGH] s GLVVHQWLQJ