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

81,7(' 67$7(6 2) $0(5,&$ ; 3ODLQWLII$SSHOOHH    1R  Y  !  '(55,&. &/,1721 '(1721  'HIHQGDQW$SSHOODQW  $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH:HVWHUQ'LVWULFWRI7HQQHVVHHDW0HPSKLV 1R nsHURPH7XUQHU'LVWULFWsXGJH $UJXHG 0DUFK 'HFLGHGDQG)LOHG $SULO %HIRUH &2/(DQG*,/0$1&LUFXLWsXGJHV $/'5,&+ 'LVWULFWsXGJH BBBBBBBBBBBBBBBBB &2816(/ $5*8(' /LQGD3DUVRQ.KXPDOR3$5621.+80$/2 /$:),500HPSKLV7HQQHVVHHIRU$SSHOODQW6WXDUWs &DQDOH $66,67$17 81,7(' 67$7(6 $77251(<

7KH +RQRUDEOH $QQ $OGULFK 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH 1RUWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ

  8QLWHG6WDWHVY'HQWRQ 1R  1R  8QLWHG6WDWHVY'HQWRQ  0HPSKLV 7HQQHVVHH IRU $SSHOOHH  21 %5,()   /LQGD XQGHUO\LQJ NLGQDSLQJ  ,W LV QRW QHFHVVDU\ WKDW WKH 3DUVRQ .KXPDOR 3$5621 .+80$/2 /$: ),50 JRYHUQPHQWEHDEOHWRFRQYLFWWKHGHIHQGDQWXQGHUWKH 0HPSKLV 7HQQHVVHH IRU $SSHOODQW  6WXDUW s &DQDOH )HGHUDO &DUMDFNLQJ 6WDWXWH WR HQKDQFH KLV NLGQDSLQJ $66,67$17 81,7(' 67$7(6 $77251(< 0HPSKLV VHQWHQFHIRUWKHJHQHULFFULPHRImFDUMDFNLQJl 7HQQHVVHHIRU$SSHOOHH 0DUVWRQ :/DW  HPSKDVLVDGGHG :KLOH BBBBBBBBBBBBBBBBB RXUGHFLVLRQLQ0DUVWRQLVXQSXEOLVKHGDQGWKXVQRWELQGLQJ RQVXEVHTXHQWSDQHOVRIWKLV&RXUWVHH7+ &,5 5 J 23,1,21  F  ZH ILQG RXU UDWLRQDOH LQ WKDW FDVH WR EH HTXDOO\ BBBBBBBBBBBBBBBBB DSSOLFDEOHKHUH$FFRUGLQJO\ZHDIILUPWKHGLVWULFWFRXUWjV HQKDQFHPHQWRI'HQWRQjVVHQWHQFHIRUFDUMDFNLQJ6HH8QLWHG 5 *8< &2/( s5 &LUFXLW sXGJH  'HIHQGDQW 'HUULFN 6WDWHV Y %DWHV  )G   WK &LU  &OLQWRQ'HQWRQDSSHDOVKLVMXU\FRQYLFWLRQDQGVHQWHQFHIRU DIILUPLQJ WZROHYHO HQKDQFHPHQW IRU FDUMDFNLQJ XQGHU NLGQDSSLQJDQGXVHRIDILUHDUPGXULQJDFULPHRIYLROHQFH † % E   ZKHUH GHIHQGDQW ZDV QRW FKDUJHG XQGHU WKH )RUWKHIROORZLQJUHDVRQVZH$)),50WKHMXGJPHQWRIWKH FDUMDFNLQJVWDWXWH  GLVWULFWFRXUW ,,,&21&/86,21 ,%$&.*5281' )RUWKHIRUHJRLQJUHDVRQVZH$)),50WKHMXGJPHQWRI  )ROORZLQJ D WKUHHGD\ MXU\ WULDO LQ WKH 8QLWHG 6WDWHV WKHGLVWULFWFRXUWLQLWVHQWLUHW\ 'LVWULFW&RXUWIRUWKH:HVWHUQ'LVWULFWRI7HQQHVVHH'HQWRQ ZDVFRQYLFWHGRINLGQDSSLQJIRUWKHSXUSRVHRIUREEHU\LQ YLRODWLRQ RI  86& †  DQG FDUU\LQJ DQG XVLQJ D ILUHDUP GXULQJ DQG LQ UHODWLRQ WR D FULPH RI YLROHQFH LQ YLRODWLRQRI86&†  F 7KHJRYHUQPHQWjVHYLGHQFH GHPRQVWUDWHG WKDW RQ WKH PRUQLQJ RI 0RQGD\ sDQXDU\   'HQWRQNLGQDSSHG*HRUJLD)RUFKLDIURPKHU0HPSKLV 7HQQHVVHH KRWHO IRUFHG KHU DW JXQSRLQW WR GULYH KLP WR D FKHFNFDVKLQJVWRUHLQ:HVW0HPSKLV$UNDQVDVDQGRUGHUHG KHUWRRSHQWKHVWRUHZLWKKHUNH\VVRWKDWKHFRXOGURELW )RUFKLDDQHPSOR\HHRI$PHULFDjV&DVK([SUHVV m$&(l LQ 1HZ2UOHDQV/RXLVLDQDZDVYLVLWLQJ0HPSKLVIRUWZRZHHNV WRRYHUVHHWKHRSHQLQJRIDQHZ$&(VWRUH)RUFKLDWHVWLILHG WKDWVKHKDGVHHQ'HQWRQLQWKHKDOOZD\RIKHUKRWHORQWKH QLJKWRIs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†   LQ 0RRUH LQ LQWHUSUHWLQJ 866* H[DFWO\DVVKHZDVWROGVKHZRXOGQRWEHKXUW)RUFKLDVWDWHG †% E  6HH8QLWHG6WDWHVY%RXFKD)G WKDW 'HQWRQ RUGHUHG KHU LQWR KHU FDU DQG LQVWUXFWHG KHU WR  WK&LU  FRQVLGHULQJFRXUWVjFRQVWUXFWLRQRI GULYHKLPWRWKHVWRUH  8SRQDUULYLQJDWWKHVWRUH'HQWRQ WKH IHGHUDO FDUMDFNLQJ VWDWXWH LQ LQWHUSUHWLQJ 866* RUGHUHG )RUFKLD WR WDNH WKH NH\V DQG RSHQ WKH GRRU WR WKH † % E   WR WKH H[WHQW WKDW WKH VHQWHQFLQJ JXLGHOLQH VWRUH PLUURUVWKHIHGHUDOVWDWXWRU\ODQJXDJH ,Q0RRUHZHUHMHFWHG WKH GHIHQGDQWVj FRQWHQWLRQ WKDW WKH\ GLG QRW mWDNHl WKH $VDQ$&(HPSOR\HH)RUFKLDZDVIDPLOLDUZLWKWKHVWRUHjV YLFWLPjVYHKLFOHZLWKLQWKHPHDQLQJRIWKHIHGHUDOFDUMDFNLQJ VHFXULW\V\VWHP,QSDUWLFXODU)RUFKLDNQHZWKDWWKHVWRUHZDV VWDWXWH VLPSO\ EHFDXVH WKH\ GLG QRW LQWHQG D SHUPDQHQW HTXLSSHG ZLWK D GHYLFH NQRZQ DV D mPDQWUDSl ZKLFK LV D GHSULYDWLRQRIWKHYHKLFOH6HH)GDW m,WPDWWHUVQRW VPDOO KDOOZD\ EHWZHHQ WZR VWHHO GRRUV VHSDUDWLQJ WKH WKDW >WKH GHIHQGDQWV@ RULJLQDOO\ VHW RXW RQO\ WR URE WKH FDE FXVWRPHUDUHDRIWKHVWRUHIURPWKHHPSOR\HHDUHD)RUFKLD GULYHURIKLVFDVKl 7KHGLVWULFWFRXUWUHOLHGRQWKLVKROGLQJ WHVWLILHG WKDW WKH PDQWUDS ZKLFK LV DFWLYDWHG WZHQW\IRXU WRFRQFOXGHWKDW'HQWRQKDGmWDNHQl)RUFKLDj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†% E  ,Q8QLWHG6WDWHVY0DUVWRQ1R  PDQWUDS LQWR WKH HPSOR\HH DUHD RI WKH VWRUH WRJHWKHU  :/ WK&LUsDQ   XQSXEOLVKHG  )RUFKLDjVSODQZRUNHGDQGZKHQWKHSROLFHSKRQHGWKHVWRUH WKHGHIHQGDQWZDVFKDUJHGZLWKNLGQDSSLQJXQGHU86& DVKRUWWLPHODWHUVKHZDVDEOHWRXVHm\HVlDQGmQRlDQVZHUV †'XULQJWKHNLGQDSSLQJWKHGHIHQGDQWVWROHDFDUDW WRDGYLVHWKHPWKDWDUREEHU\ZDVLQSURJUHVV JXQSRLQWIURPWKHNLGQDSSLQJYLFWLPEXWZDVQRWFKDUJHG XQGHUWKHIHGHUDOFDUMDFNLQJVWDWXWH$IWHUWKHGLVWULFWFRXUW $W WKH VDPH WLPH WKDW )RUFKLD ZDV LQVLGH WKH VWRUH ZLWK HQKDQFHGWKHGHIHQGDQWj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jV FRQGXFW LQ WKLV VLWXDWLRQ  7KH FRQGXFW RI DQGDWWHPSWHGWRFUDZOLQWRWKHEDWKURRPLQWKHEDFNRIWKH UREELQJ WKH YLFWLP RI KHU FDU WKURXJK WKH WKUHDW RI VWRUH  $W WKDW SRLQW )RUFKLD UDQ WKURXJK WKH PDQWUDS DQG YLROHQFH PDGH WKH NLGQDSLQJ PRUH HJUHJLRXV DQG RXWVLGH WR VDIHW\  7KH SROLFH WKHQ HQWHUHG WKH VWRUH DQG &RQJUHVV FKRVH WR SXQLVK WKDW FRQGXFW WKURXJK DQ DUUHVWHG'HQWRQ,QWKHVWRUHjVEDWKURRPWKHSROLFHIRXQGD HQKDQFHPHQWLQWKHVHQWHQFLQJJXLGHOLQHV7KHWZRSRLQW EDJRI'HQWRQjVFORWKLQJDQGDWKLUW\HLJKWFDOLEHUUHYROYHU HQKDQFHPHQW IRU FDUMDFNLQJ UHIOHFWV WKH VHULRXVQHVV RI FDUMDFNLQJ LQ DGGLWLRQ WR WKH VHULRXVQHVV RI WKH  8QLWHG6WDWHVY'HQWRQ 1R  1R  8QLWHG6WDWHVY'HQWRQ $ MXU\ WULDO UHVXOWHG LQ FRQYLFWLRQ RQ ERWK FRXQWV  7KH ZLWKWKHSRUWLRQRIDVWDWHPHQWH[FHUSWHGE\DQDGYHUVHSDUW\  GLVWULFWFRXUWVHQWHQFHG'HQWRQWRPRQWKVLPSULVRQPHQW $FFRUGLQJO\ ZH DIILUP WKH GLVWULFW FRXUWjV DGPLVVLRQ RI RQWKHNLGQDSSLQJFKDUJHDQGPRQWKVLPSULVRQPHQWRQ )RUFKLDjVUHKDELOLWDWLYHWHVWLPRQ\ WKHILUHDUPVFKDUJH'HQWRQILOHGDWLPHO\QRWLFHRIDSSHDO DQGQRZDVVHUWVWKHIROORZLQJSRLQWVRIHUURU   WKHGLVWULFW &(QKDQFHPHQWIRU&DUMDFNLQJ FRXUWHUUHGLQGHQ\LQJKLVSUHWULDOVXSSUHVVLRQPRWLRQ   WKH GLVWULFWFRXUWHUUHGLQDOORZLQJDJRYHUQPHQWZLWQHVVWRUHDG 'HQWRQ ILQDOO\ FRQWHQGV WKDW WKH GLVWULFW FRXUW HUUHG LQ SULRUFRQVLVWHQWVWDWHPHQWVLQWRWKHUHFRUGIRUWKHSXUSRVHRI HQKDQFLQJKLVFULPLQDORIIHQVHOHYHOE\WZRSRLQWVXQGHUWKH UHKDELOLWDWLQJ WKH ZLWQHVVjV FUHGLELOLW\  DQG   WKH GLVWULFW FDUMDFNLQJ SURYLVLRQ RI WKH 6HQWHQFLQJ *XLGHOLQHV  ,Q WKH FRXUWHUUHGE\HQKDQFLQJKLVVHQWHQFHXQGHUWKHFDUMDFNLQJ SUHVHQWHQFH LQYHVWLJDWLRQ UHSRUW m365l  WKH SUREDWLRQ JXLGHOLQH GHVSLWH 'HQWRQ QRW KDYLQJ EHHQ FKDUJHG ZLWK RIILFHU IDLOHG WR LQFOXGH D WZROHYHO HQKDQFHPHQW IRU FDUMDFNLQJ FDUMDFNLQJ LQ FDOFXODWLQJ 'HQWRQjV RIIHQVH OHYHO  7KH JRYHUQPHQWREMHFWHGWRWKLVSRUWLRQRIWKH365DQGDUJXHG ,,',6&866,21 WKDW D WZROHYHO HQKDQFHPHQW ZDV ZDUUDQWHG XQGHU 86 6(17(1&,1* *8,'(/,1(6 0$18$/†% E     $W $0RWLRQWR6XSSUHVV VHQWHQFLQJ WKH GLVWULFW FRXUW VXVWDLQHG WKH JRYHUQPHQWjV REMHFWLRQDQGHQKDQFHG'HQWRQjVRIIHQVHOHYHOE\WZRSRLQWV 3ULRUWRWULDO'HQWRQILOHGDPRWLRQWRVXSSUHVVVWDWHPHQWV KHPDGHDWWKHWLPHRIKLVDUUHVWDVZHOODVVWDWHPHQWVPDGH 'HQWRQFRQWHQGVWKDWWKHGLVWULFWFRXUWHUUHGLQUHO\LQJRQ GXULQJ D YLGHRWDSHG LQWHUURJDWLRQ FRQGXFWHG E\ /LHXWHQDQW RXUGHFLVLRQLQ8QLWHG6WDWHVY0RRUH)G WK&LU $OOHQRIWKH:HVW0HPSKLV3ROLFH'HSDUWPHQWODWHUWKHVDPH   LQGHWHUPLQLQJZKHWKHUWRHQKDQFH'HQWRQjVVHQWHQFH GD\7KHGLVWULFWFRXUWUHIHUUHGWKHPRWLRQWRDPDJLVWUDWH XQGHU†% E  'HQWRQDVVHUWVWKDW0RRUHLVLUUHOHYDQW MXGJHZKRFRQGXFWHGDQHYLGHQWLDU\KHDULQJ7KHPDJLVWUDWH WR WKH LQWHUSUHWDWLRQ RI † % E   EHFDXVH WKDW FDVH MXGJHUHFRPPHQGHGWKDWWKHPRWLRQEHJUDQWHGZLWKUHVSHFW LQYROYHGWKHFRQVWUXFWLRQRIWKHIHGHUDOFDUMDFNLQJVWDWXWH WRVWDWHPHQWVPDGHE\'HQWRQDWWKHWLPHRIKLVDUUHVWEXW 86& †   UDWKHU WKDQ WKH FDUMDFNLQJ VHQWHQFLQJ GHQLHGZLWKUHVSHFWWRVWDWHPHQWVPDGHE\'HQWRQGXULQJKLV JXLGHOLQH  'HQWRQ IXUWKHU FRQWHQGV WKDW WKH GLVWULFW FRXUW YLGHRWDSHG LQWHUURJDWLRQ  7KH GLVWULFW FRXUW FRQGXFWHG D HUUHGLQHQKDQFLQJKLVVHQWHQFHXQGHU†% E  EHFDXVH GH QRYR UHYLHZ RI WKH PDJLVWUDWH MXGJHjV 5HSRUW DQG 'HQWRQ ZDV QRW FKDUJHG RU FRQYLFWHG XQGHU WKH IHGHUDO 5HFRPPHQGDWLRQDQGDIWHUDQHYLGHQWLDU\KHDULQJFRQFOXGHG FDUMDFNLQJVWDWXWH WKDW 'HQWRQjV PRWLRQ WR VXSSUHVV VKRXOG EH GHQLHG LQ LWV HQWLUHW\ 'HQWRQVj DUJXPHQWV DUH QRW SHUVXDVLYH  :H UHYLHZ WKH GLVWULFWFRXUWj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† % E    7KH $SSOLFDWLRQ WKHIORRU   WKHDUUHVWLQJRIILFHUVIRUFHGKLPWRDGPLWWKDW 1RWHVGHILQHmFDUMDFNLQJlDVmWKHWDNLQJRUDWWHPSWHGWDNLQJ WKHJXQIRXQGLQWKHVWRUHjVEDWKURRPEHORQJHGWRKLP   WKH RIDPRWRUYHKLFOHIURPWKHSHUVRQRUSUHVHQFHRIDQRWKHUE\ DUUHVWLQJRIILFHUVJDYHHDFKRWKHUmKLJKILYHVlDIWHUVWRPSLQJ IRUFHDQGYLROHQFHRUE\LQWLPLGDWLRQl866*†% RQRUNLFNLQJKLP DQG  RQHRIWKHDUUHVWLQJRIILFHUVWROG FPWQ  8QLWHG6WDWHVY'HQWRQ 1R  1R  8QLWHG6WDWHVY'HQWRQ  JRYHUQPHQWjVPRWLRQ7KHGLVWULFWFRXUWFDXWLRQHGWKHMXU\ KLPWKDWKHZDVOXFN\WREHDOLYHEHFDXVHLQm:HVW0HPSKLV KRZHYHUWKDWLWVKRXOGFRQVLGHU)RUFKLDjVWHVWLPRQ\RQO\IRU WKH\jOO NLOO \RX DQG GULQN D EHHU DQG WDON DERXW LW ODWHUl WKH SXUSRVHV RI GHWHUPLQLQJ ZKHWKHU GHIHQVH FRXQVHO KDG 'XULQJ KLV YLGHRWDSHG LQWHUURJDWLRQ ODWHU WKDW GD\ 'HQWRQ LPSHDFKHG )RUFKLDjV FUHGLELOLW\  7KH FRXUW H[SUHVVO\ UHLWHUDWHGKLVFODLPWKDWKHKDGEHHQNLFNHGLQWKHKHDGE\DQ LQVWUXFWHG WKH MXU\ QRW WR FRQVLGHU )RUFKLDjV VWDWHPHQWV DV DUUHVWLQJ RIILFHU  'HQWRQ DUJXHV WKDW WKH DOOHJHG FRHUFLRQ VXEVWDQWLYH HYLGHQFH DJDLQVW 'HQWRQ  )RUFKLD WKHUHDIWHU GXULQJKLVDUUHVWUHQGHUHGKLVLQFXOSDWRU\VWDWHPHQWVWRWKH UHWRRN WKH VWDQG DQG UHDG LQWR WKH UHFRUG WKH WKUHH ZULWWHQ SROLFHLQDGPLVVLEOH'HQWRQIXUWKHUFRQWHQGVWKDWEHFDXVH VWDWHPHQWVVKHJDYHWRWKHSROLFHIROORZLQJ'HQWRQjVDUUHVW WKHJRYHUQPHQWIDLOHGWRSURYHWKDWWKHFRHUFLYHHQYLURQPHQW FUHDWHGE\WKHDUUHVWLQJRIILFHUVjFRQGXFWKDGGLVVLSDWHGE\ 7KHGLVWULFWFRXUWGLGQRWDEXVHLWVGLVFUHWLRQLQDOORZLQJ WKHWLPH'HQWRQZDVLQWHUURJDWHG E\ /LHXWHQDQW$OOHQWKH )RUFKLD WR UHDG LQWR WKH UHFRUG KHU SULRU VWDWHPHQWV WR WKH YLGHRWDSHHYLGHQFHRIKLVFRQIHVVLRQPXVWDOVREHVXSSUHVVHG SROLFH,QUXOLQJWKDW)RUFKLDjVWHVWLPRQ\ZDVDGPLVVLEOHIRU 6HH 8QLWHG 6WDWHV Y sHQNLQV  )G   WK &LU UHKDELOLWDWLYH SXUSRVHV WKH GLVWULFW FRXUW UHOLHG RQ RXU    KROGLQJ WKDW ZKHUH LQLWLDO FRQIHVVLRQ ZDV LOOHJDOO\ GHFLVLRQLQ(QJHEUHWVHQY)DLUFKLOG$LUFUDIW&RUS)G FRHUFHGE\SROLFHJRYHUQPHQWPXVWSUHVHQWDIILUPDWLYHSURRI  WK&LU  ,Q(QJHEUHWVHQZHKHOG WKDWWKHFRHUFLYHWDLQWRIWKHHDUOLHUFRQIHVVLRQKDGGLVVLSDWHG EHIRUHWKHVXEVHTXHQWFRQIHVVLRQZDVWDNHQ  7KH WULDO FRXUW KDV JUHDWHU GLVFUHWLRQ WR DGPLW SULRU FRQVLVWHQW VWDWHPHQWV WR UHKDELOLWDWH DQ LPSHDFKHG 'HQWRQjV DUJXPHQWV DUH QRW ZHOOWDNHQ  :H UHYLHZ WKH ZLWQHVVE\FODULI\LQJRUH[SODLQLQJKLVSULRUVWDWHPHQWV GLVWULFWFRXUWj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jVFRQWHQWLRQWKDWKHKDGEHHQEHDWHQE\WKHSROLFH SULRU FRQVLVWHQW VWDWHPHQWV LV DOVR LQ DFFRUG ZLWK WKH GXULQJ KLV DUUHVW HYHQ WKRXJK 'HQWRQ KDG UHSHDWHG WKLV SULQFLSOHRIFRPSOHWHQHVVSURPRWHGE\5XOH DOOHJDWLRQ GXULQJ KLV YLGHRWDSHG LQWHUYLHZ ZLWK /LHXWHQDQW $OOHQ7KHFRXUWIRXQGWKDW'HQWRQjVVWDWHPHQWWR/LHXWHQDQW ,GDW LQWHUQDOTXRWDWLRQPDUNVDQGFLWDWLRQVRPLWWHG  $OOHQ WKDW KH KDG EHHQ NLFNHG LQ WKH KHDG ZDV PHUHO\ D (QJHEUHWVRQ FOHDUO\ DXWKRUL]HV WKH DGPLVVLRQ RI )RUFKLDjV IDEULFDWHGDWWHPSWWRH[SODLQZK\KHKDGOLHGWRWKHDUUHVWLQJ UHKDELOLWDWLYH WHVWLPRQ\ LQ WKLV FDVH  'HIHQVH FRXQVHO RIILFHUVRQWKHVFHQHWKDWPRUQLQJ7KHFRXUWVWDWHG DWWHPSWHGWRLPSHDFK)RUFKLDjVWHVWLPRQ\E\KDYLQJKHUUHDG VHOHFWHGTXHVWLRQVDQGDQVZHUVIURPKHUZULWWHQVWDWHPHQWVWR , LQWHUSUHWHG WKH YLGHRWDSH WKH VDPH ZD\ /W $OOHQ WKHSROLFH,QRUGHUWRUHEXW'HQWRQjVDVVHUWLRQWKDW)RUFKLDjV LQWHUSUHWHGWKHYLGHRWDSHDQG,WKLQNWKDWjVWKHIDUPRUH VWDWHPHQWVZHUHLQFRQVLVWHQWWKHJRYHUQPHQWZDVHQWLWOHGWR UHDVRQDEOH H[SODQDWLRQ RI LW SDUWLFXODUO\ ZKHQ RQH KDYH )RUFKLD UHDG KHU VWDWHPHQWV LQWR WKH UHFRUG LQ WKHLU FRQVLGHUVWKHFRQWH[WLQZKLFKWKDWUHVSRQVHZDVJLYHQ HQWLUHW\  6HH )(' 5 (9,'  SURYLGLQJ WKDW D SDUW\ LV , PHDQ 0U 'HQWRQ LV H[SODLQLQJ ZK\ KH OLHG WR WKH HQWLWOHGWRWKHDGPLVVLRQRIDQ\SDUWRIDUHFRUGHGVWDWHPHQW RIILFHUVDWWKHVFHQH,PHDQKHjVJLYLQJDUHDVRQIRUKLV ZKLFKRXJKWLQIDLUQHVVEHFRQVLGHUHGFRQWHPSRUDQHRXVO\ RZQXQWUXWKIXOVWDWHPHQWVDQGKHEDVLFDOO\LVEODPLQJ  8QLWHG6WDWHVY'HQWRQ 1R  1R  8QLWHG6WDWHVY'HQWRQ  KLVODFNRIWUXWKIXOQHVVRQVRPHRQHHOVHDQGWKHRIILFHUV QRWFRHUFHG'HQWRQZDVSURSHUO\DGYLVHGRIKLVULJKWVDQG DUH \RX NQRZ DYDLODEOH SHRSOH EXW , GRQjW  , GRQjW VLJQHGDIRUPZDLYLQJKLVULJKWVEHIRUHDJUHHLQJWRWKHWDSHG XQGHUVWDQG KLP WR EH PDNLQJ \RX NQRZ D FODLP WKDW LQWHUYLHZZLWK/LHXWHQDQW$OOHQ'HQWRQKLPVHOIDGPLWWHG JRHVEH\RQGDFODLPWKDWUHODWHVWRWKHIRUFHQHFHVVDU\WR GXULQJWKHLQWHUURJDWLRQWKDW/LHXWHQDQW$OOHQZDVUHVSHFWIXO LQLWLDOO\ EULQJ KLP WR WKH JURXQG DQG WR HIIHFW WKH DQGOHQLHQWZLWKKLPZKLFKZDVRQHUHDVRQZK\'HQWRQIHOW KDQGFXIILQJZKLFKRIFRXUVH,GRQjW,GRQjWFRQVLGHUWR DEOH WR RSHQ XS WR /LHXWHQDQW $OOHQ DERXW WKH FULPH EHIRUFHVRWKDWWKDWZRXOGKDYHLQDQ\ZD\RYHUERUQHKLV 0RUHRYHU/LHXWHQDQW$OOHQWHVWLILHGDVWR'HQWRQjVFDOPDQG ZLOO FDXVHG KLV RQWKHVFHQH VWDWHPHQWV WR EH UHOD[HGGHPHDQRUGXULQJWKHYLGHRWDSHGLQWHUURJDWLRQZKLFK LQYROXQWDU\ IXUWKHU VXJJHVWV WKDW 'HQWRQjV VWDWHPHQWV ZHUH JLYHQ YROXQWDULO\$FFRUGLQJO\ZHDIILUPWKHGLVWULFWFRXUWjVGHQLDO 'HQWRQFKDUDFWHUL]HVWKHLVVXHEHIRUHWKH&RXUWDVmZKHWKHU RI'HQWRQjVPRWLRQWRVXSSUHVV DVXEVHTXHQWFRQIHVVLRQLVYDOLGZKHUHDSULRUFRQIHVVLRQKDV EHHQIRXQGWREHLQYROXQWDU\l,QDVPXFKDVWKHGLVWULFWFRXUW %3ULRU&RQVLVWHQW6WDWHPHQWV UHIXVHGWRILQGWKDW'HQWRQjVLQLWLDOLQFULPLQDWLQJVWDWHPHQWV WR WKH SROLFH ZHUH LQYROXQWDU\ KRZHYHU 'HQWRQjV 'HQWRQ QH[W FRQWHQGV WKDW WKH GLVWULFW FRXUW HUUHG LQ FKDUDFWHUL]DWLRQRIWKHLVVXHLVLQFRUUHFW7KHSURSHULVVXHIRU DOORZLQJ D JRYHUQPHQW ZLWQHVV WR UHDG SULRU FRQVLVWHQW RXU FRQVLGHUDWLRQ LV ZKHWKHU WKHUH LV FUHGLEOH SURRI LQ WKH VWDWHPHQWVLQWRWKHUHFRUGIRUWKHSXUSRVHRIUHKDELOLWDWLQJWKH UHFRUG WR VXEVWDQWLDWH 'HQWRQjV FODLP WKDW KLV ZLOO ZDV ZLWQHVVjV FUHGLELOLW\  :H UHYLHZ WKH GLVWULFW FRXUWjV RYHUERUQH E\ FRHUFLYH SROLFH DFWLYLW\ WKHUHE\ PDNLQJ KLV DGPLVVLRQRIWHVWLPRQ\IRUDEXVHRIGLVFUHWLRQ6HH8QLWHG VWDWHPHQWVLQYROXQWDU\m7RVXSSRUWDGHWHUPLQDWLRQWKDWD 6WDWHVY%RQGV)G WK&LU   FRQIHVVLRQZDVFRHUFHGWKHHYLGHQFHPXVWHVWDEOLVKWKDW   WKHSROLFHDFWLRQZDVREMHFWLYHO\FRHUFLYH   WKHFRHUFLRQLQ 'XULQJWULDO)RUFKLDWHVWLILHGWKDWVKHJDYHWKUHHVHSDUDWH TXHVWLRQLVVXIILFLHQWWRRYHUEHDUWKHGHIHQGDQWjVZLOO DQG  ZULWWHQ VWDWHPHQWV WR ODZ HQIRUFHPHQW RIILFHUV IROORZLQJ WKHGHIHQGDQWjVZLOOZDVLQIDFWRYHUERUQHDVDUHVXOWRIWKH 'HQWRQjVDUUHVW,QDQHIIRUWWRLPSHDFKKHUFUHGLELOLW\DWWULDO FRHUFLYHSROLFHDFWLYLW\l8QLWHG6WDWHVY5LJVE\ )G GHIHQVHFRXQVHODWWHPSWHGRQFURVVH[DPLQDWLRQWRSRLQWRXW  WK&LU   LQFRQVLVWHQFLHV LQ )RUFKLDjV WKUHH VWDWHPHQWV  'HIHQVH FRXQVHODVNHG)RUFKLDWRUHDGDQVZHUVWRVSHFLILFTXHVWLRQV 7KHWRWDOLW\RIWKHUHFRUGHYLGHQFHKHUHGRHVQRWVXSSRUWWKH SRVHGWRKHUE\ODZHQIRUFHPHQWRIILFHUVEXWGLGQRWSHUPLW FRQFOXVLRQ WKDW 'HQWRQjV LQFULPLQDWLQJ VWDWHPHQWV WR WKH KHUWRH[SODLQWKHFRQWH[WRIKHUDQVZHUVRUUHDGWKHDQVZHUV DUUHVWLQJ RIILFHUVZHUHFRHUFHG2WKHUWKDQ'HQWRQjVVHOI WR RWKHU TXHVWLRQV SRVHG E\ WKH SROLFH  2Q UHGLUHFW VHUYLQJWHVWLPRQ\DWWKHVXSSUHVVLRQKHDULQJDQGDWWULDOWKHUH H[DPLQDWLRQ WKH JRYHUQPHQW DWWHPSWHG WR LQWURGXFH LQWR ZDVQRFUHGLEOHSURRIWKDW'HQWRQZDVPLVWUHDWHGLQDQ\ZD\ HYLGHQFHDOORI)RUFKLDjVZULWWHQVWDWHPHQWVWRWKHSROLFHDV 7KH GLVWULFW FRXUW H[SUHVVO\ FUHGLWHG WKH DUUHVWLQJ RIILFHUVj SULRU FRQVLVWHQW VWDWHPHQWV XQGHU 5XOH  RI WKH )HGHUDO WHVWLPRQ\RYHU'HQWRQjVWHVWLPRQ\DQGIRXQGWKDW'HQWRQjV 5XOHVRI(YLGHQFH7KHGLVWULFWFRXUWKRZHYHUUHIXVHGWR WHVWLPRQ\ZDVQRWFUHGLEOH7KHGLVWULFWFRXUWjVILQGLQJVRI DGPLWWKHVWDWHPHQWVXQGHUWKH5XOHKHDUVD\H[FHSWLRQ IDFWZLWKUHVSHFWWRWKHFRQGXFWRIWKHDUUHVWLQJRIILFHUVZHUH QRWFOHDUO\HUURQHRXV $IWHUWKHFORVHRILWVFDVHLQFKLHIWKHJRYHUQPHQWPRYHG WKDW)RUFKLDEHDOORZHGWRUHDGKHUWKUHHSULRUVWDWHPHQWVLQWR 1RUGLGWKHGLVWULFWFRXUWFRPPLWFOHDUHUURULQFRQFOXGLQJ WKH UHFRUG VR WKDW WKH MXU\ FRXOG GHWHUPLQH ZKHWKHU VXFK WKDW'HQWRQjVYLGHRWDSHGFRQIHVVLRQWR/LHXWHQDQW$OOHQZDV VWDWHPHQWVZHUHWUXO\LQFRQVLVWHQWZLWKRQHDQRWKHU$IWHU FRQVLGHULQJ WKLV UHTXHVW WKH GLVWULFW FRXUW JUDQWHG WKH