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 D S

81,7('67$7(6&28572)$33($/6 )257+(6,;7+&,5&8,7 BBBBBBBBBBBBBBBBB

52*(5 / 0&&/81* ; 3ODLQWLII$SSHOODQW    1R  Y  !  :$/0$57 6725(6 ,1&  'HIHQGDQW$SSHOOHH  1

$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH:HVWHUQ'LVWULFWRI7HQQHVVHHDW0HPSKLV 1R  nsRQ3KLSSV0F&DOOD'LVWULFWsXGJH $UJXHG sXQH 'HFLGHGDQG)LOHG 1RYHPEHU %HIRUH .(11('<6,/(5DQG&/$<&LUFXLWsXGJHV BBBBBBBBBBBBBBBBB &2816(/ $5*8('   %UXFH 6 .UDPHU %252'  .5$0(5 0HPSKLV 7HQQHVVHH IRU $SSHOODQW  : 2 /XFNHWW sU 5266,(/8&.(773$5.(5 /$8*+/,10HPSKLV 7HQQHVVHH IRU $SSHOOHH  21 %5,()   %UXFH 6 .UDPHU (ODLQH 6KHQJ 3 %U\DQ 0DXOGLQ %252'  .5$0(5

  0F&OXQJY:DO0DUW6WRUHVHWDO 1R 

0HPSKLV 7HQQHVVHH IRU $SSHOODQW  : 2 /XFNHWW sU /RUULH . 5LGGHU 5266,( /8&.(77 3$5.(5 /$8*+/,10HPSKLV7HQQHVVHHIRU$SSHOOHH .(11('<sGHOLYHUHGWKHRSLQLRQRIWKHFRXUWLQZKLFK &/$<sMRLQHG6,/(5s SS GHOLYHUHGDVHSDUDWH RSLQLRQFRQFXUULQJLQSDUWDQGGLVVHQWLQJLQSDUW BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB .(11('< &LUFXLW sXGJH  3ODLQWLII 5RJHU 0F&OXQJ DSSHDOV IURP WKH JUDQW RI VXPPDU\ MXGJPHQW WR GHIHQGDQW :DO0DUW6WRUHV,QFLQWKLVDFWLRQDOOHJLQJWKDW:DO0DUW ZDVQHJOLJHQWLQIDLOLQJWRSURYLGHDGHTXDWHVHFXULW\IRULWV SDWURQVRQLWVSUHPLVHVOHDGLQJWRWKHNLGQDSLQJUDSHDQG PXUGHURISODLQWLIIjVZLIH'RURWK\0F&OXQJ7KHGLVWULFW FRXUW JUDQWHG GHIHQGDQW :DO0DUWjV PRWLRQ IRU VXPPDU\ MXGJPHQW FRQFOXGLQJ WKDW WKHUH ZDV QR JHQXLQH LVVXH RI PDWHULDOIDFWDSSURSULDWHIRUMXU\UHYLHZ3ODLQWLIIDSSHOODQW QRZUDLVHVWKUHHLVVXHVRQDSSHDO)LUVWSODLQWLIIDVVHUWVWKDW WKHGLVWULFWFRXUWLQFRUUHFWO\FRQVWUXHGWKHOLDELOLW\VWDQGDUG DSSOLFDEOHWRGHIHQGDQW:DO0DUW6HFRQGO\SODLQWLIIFODLPV WKDWWKHGLVWULFWFRXUWLQFRUUHFWO\H[FOXGHGKHDUVD\HYLGHQFH /DVWO\SODLQWLIIDUJXHVWKDWKHKDVRIIHUHGVXIILFLHQWHYLGHQFH WRUDLVHDTXHVWLRQRIPDWHULDOIDFWIRUDMXU\)RUWKHUHDVRQV RXWOLQHGEHORZZHUHYHUVHLQSDUWWKHMXGJPHQWRIWKHGLVWULFW FRXUWDQGGHQ\GHIHQGDQWjVPRWLRQIRUVXPPDU\MXGJPHQW , 2Q 6HSWHPEHU    'RURWK\ 0F&OXQJjV ERG\ ZDV IRXQGLQ&ULWWHQGHQ&RXQW\$UNDQVDV/DWHUWKDWGD\SROLFH DSSUHKHQGHG sRVHSK $OH[DQGHU +DUSHU ,, DQG +DUSHU FRQIHVVHG LQ D WDSHG FRQYHUVDWLRQ WR DEGXFWLQJ 0UV 0F&OXQJIURPWKHSDUNLQJORWRIWKH'HOWD6TXDUH6KRSSLQJ &HQWHULQ0HPSKLV7HQQHVVHHRQ6HSWHPEHU +DUSHU VWDWHG WKDW KH DEGXFWHG 0UV 0F&OXQJ LQ KHU FDU IURP WKH SDUNLQJ ORW RI D m&LUFXV &LW\l EHFDXVH KH ZDQWHG KHU FDU  0F&OXQJY:DO0DUW6WRUHVHWDO 1R  1R  0F&OXQJY:DO0DUW6WRUHVHWDO 

ZKHWKHU 0F&OXQJ ZDV DEGXFWHG IURP WKH 'HOWD 6TXDUH &LUFXLW&LW\DQHOHFWURQLFVDQGPXVLFVWRUHZDVORFDWHGLQ 6KRSSLQJ&HQWHUSDUNLQJORW,WVHHPVREYLRXVWKDWVKHZDV WKH'HOWD6TXDUH6KRSSLQJ&HQWHULQ0HPSKLV$:DO0DUW DEGXFWHGIURPWKHODUJHUSDUNLQJORWEXWWKDWPD\EHXSWRWKH VWRUHZDVDOVRORFDWHGLQWKH'HOWD6TXDUH6KRSSLQJ&HQWHU MXU\WRGHWHUPLQH 5HFHLSWVIURPWKH'HOWD6TXDUH:DO0DUWVWRUHZHUHIRXQG ZLWK0UV0F&OXQJjVERG\VKRZLQJWKDWVKHPDGHSXUFKDVHV DW DPDQG SPRQ6HSWHPEHU7KHLWHPVVKH SXUFKDVHGZHUHDOVRIRXQGZLWKKHUERG\ ,Q DGGLWLRQ WR WKH 6HSWHPEHU    VWDWHPHQW +DUSHU PDGHWZRRWKHUVWDWHPHQWVGHWDLOLQJWKHNLGQDSLQJUDSHDQG PXUGHURI0UV0F&OXQJ2Q6HSWHPEHU +DUSHU PDGHDVWDWHPHQWWRSROLFHLQFOXGLQJWKHIROORZLQJ >,@ZDONHGRYHUWRWKH&LUFXLW&LW\DQGWKH:DO0DUWWKH QHDUHVW VWRUH DQG , VHHQ WKLV ODG\ DQG WKDWjV ZKHQ , WKRXJKW,VKRXOGJHWKHUFDUµFDXVHWKDWjVWKHVDPHRQH, KDGEHIRUH>@6RZKHQVKHFDPHRXWWKHVWRUHVKHJRW LQWKHFDUDQG,JRWLQULJKWEHKLQGKHUDQG,WROGKHUWR NHHSGULYLQJ6RZHGURYHIRUDOLWWOHZKLWH>VLF@µWLOOZH JRWWRWKLVFKXUFK7KHQZHZHQWEHKLQGWKHFKXUFKDQG SHRSOHZHUHORRNLQJVXVSLFLRXVDWXVµFDXVHWKHZD\ZH ZHUHVHDWHGLQWKHFDU6RWKDWjVZKHQ,WROG,VDLGJHW RXWWKDW,FRXOGSODFHKHULQWKHWUXQN$QG,SODFHGKHU LQ WKH WUXQN DQG WKHQ , ZHQW EDFN WR WKH ZUHFNHU FRPSDQ\DQG,SLFNHGXSP\VWXIIRXWWKHRWKHU9ROYR 6RWKDWWRRNDOLWWOHZKLOHDQGWKHQ,ZHQWEDFNDQGJRW LQWKH9ROYRDQGJRWRQ,QWHUVWDWH:HVWDQGWKDWjV ZKHQ,VWDUWHGKHDGLQJWRZDUGV/LWWOH5RFN$UNDQVDV $QG DV VRRQ DV , JRW RYHU WKH EULGJH WKDWjV ZKHQ , WKRXJKWWRGURSKHURII$QG,ZHQWGRZQDGLUWURDGD ORQJGLUWURDGE\DIDUPDQG,WRRNKHURXWWDWKHWUXQN DQGVKHZDVEUHDWKLQJOLNHVKHKDGUHVSLUDWRU\SUREOHPV 6RWKDWjVZKHQ,EHJDQWRKDYHVH[XDOLQWHUFRXUVHZLWK KHU6KHZDVVWLOODOLYHDQG,PD\KDYHSHQHWUDWHGKHU DQDOKHUDQDOFDYLW\EXW,GLGQjWUHDOL]HLWLI,GLG$QG

 +DUSHU KDG SUHYLRXVO\ VWROHQ D   9ROYR LQ &KDWWDQRRJD 7HQQHVVHH ZKLFK KH GURYH WR 6KHOE\ &RXQW\ +DUSHU ZDV WKHQ LQ D FDU DFFLGHQW DQG IROORZLQJ WKH DFFLGHQW WKH   9ROYR ZDV QR ORQJHU GULYDEOH DQG ZDV WRZHG WR )DUUHOO :UHFNHU &RPSDQ\ LQ 6KHOE\ &RXQW\  0F&OXQJY:DO0DUW6WRUHVHWDO 1R  1R  0F&OXQJY:DO0DUW6WRUHVHWDO 

WKDWjVZKHQ,SODFHGKHUEDJVULJKWQH[WWRKHUDQGVKH 0RUHRYHU , GLVDJUHH ZLWK WKH PDMRULW\ WKDW 0F&OXQJ Y ZDVVWLOOEUHDWKLQJWKHVDPHZD\VKHZDVDQGKHUH\HV 'HOWD 6TXDUH /WG  3DUWQHUVKLS  6: G   7HQQ ZHUHRSHQDQGWKHQ,OHIWDQGJRWEDFNRQ,QWHUVWDWH    VWDQGV IRU WKH SURSRVLWLRQ WKDW D WHQDQW LQ D ODUJH DQGSURFHHGHGWRJRWRZDUGV/LWWOH5RFN$UNDQVDV VKRSSLQJFHQWHURZHVDGXW\RIFDUHWRDOORILWVFXVWRPHUV ZKR PLJKW SDUN DW WKH IDU HQG RI D FRPPRQ SDUNLQJ ORW s$  7KHUHFRUGLQGLFDWHVWKDW+DUSHUFKHFNHGLQWRWKH VHUYLQJPXOWLSOHWHQDQWVRIWKHVKRSSLQJFHQWHU,UHDOL]HWKDW ZUHFNHUFRPSDQ\LPSRXQGORWDW SPRQ6HSWHPEHU WKHFRXUWLQ0F&OXQJVHWRXWDQHZOLDELOLW\VWDQGDUGIRUVWRUH s$  ZLWK0UV0F&OXQJDOUHDG\LQWKHWUXQNRIWKHFDU RZQHUVEXW,GRQRWWKLQNWKDWLWH[WHQGHGOLDELOLW\DVEURDGO\ +DUSHUXOWLPDWHO\SOHDGHGJXLOW\WRWKHNLGQDSLQJDJJUDYDWHG DVWKHPDMRULW\IHHOVWKDWLWGLG7KHVWURQJHVWODQJXDJHLQ UDSH DQG PXUGHU RI 0UV 0F&OXQJ  $W WKH JXLOW\ SOHD 0F&OXQJWRVXSSRUW:DO0DUWjVOLDELOLW\LVZKHUHWKHFRXUW SURFHHGLQJ+DUSHUDIILUPHGWKHDERYHYHUVLRQRIWKHVWRU\E\ LQGLFDWHVWKDWDEXVLQHVVKDVmDGXW\WRWDNHUHDVRQDEOHVWHSV DQVZHULQJm\HVlWRGHVFULSWLRQVRIWKHHYHQWVSRVHGE\WKH WRSURWHFWFXVWRPHUVLIWKHEXVLQHVVNQRZVRUKDVUHDVRQ DVVLVWDQWDWWRUQH\JHQHUDO,QSDUWLFXODUWKHDVVLVWDQWDWWRUQH\ WR NQRZ   WKDW FULPLQDO DFWV DJDLQVW LWV FXVWRPHUV RQ LWV JHQHUDO VWDWHG WKDW m0U +DUSHU FRQIHVVHG WKDW    RQ WKDW SUHPLVHVDUHUHDVRQDEO\IRUHVHHDEOHl,GDW 7KLV )ULGD\PRUQLQJKHKDGLQIDFWDWWKH:DO0DUWSDUNLQJORWLQ ODQJXDJHGRHVQRWDGGUHVVWKHNH\LVVXHZKLFKUHPDLQVDQG 0HPSKLV6KHOE\&RXQW\7HQQHVVHHXVHGDZHDSRQDJXQ ZKLFK ZDV QRW DQVZHUHG LQ 0F&OXQJ   ZKDW DUH WKH WRNLGQDS0UV'RURWK\0F&OXQJKDGWDNHQKHUKDGUREEHG mSUHPLVHVl",QP\RSLQLRQWKHUHLVQR7HQQHVVHHDXWKRULW\ KHUDQGKDGUDSHGKHUZKLOHKHKDGKHULQKLVFXVWRG\E\ DVWRWKLVLVVXH,GRQRWWKLQNWKDW7HQQHVVHHFRXUWVZRXOG YLUWXHRIWKHZHDSRQl s$ 7KHGLVWULFWMXGJHDVNHG KROG HYHU\ WHQDQW OLDEOH LQ D PHJD VKRSSLQJ FHQWHU IRU +DUSHUm,VZKDWWKH$WWRUQH\*HQHUDOVDLGDERXWWKHIDFWVRI FULPLQDODFWVE\WKLUGSDUWLHVFRPPLWWHGDWWKHIDUHQGRIWKH WKHVH FDVHV WUXH"l DQG +DUSHU UHVSRQGHG m<HV VLUl s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jVOHDVHZLWK'HOWD6TXDUH :DO0DUW SRUWLRQ RI WKH 'HOWD 6TXDUH 6KRSSLQJ &HQWHU :DO0DUW KDG QRQH[FOXVLYH XVH RI WKH FRPPRQ DUHDV SDUNLQJORWEHIRUH:DO0DUWFRXOGEHKHOGOLDEOH LQFOXGLQJWKHHQWLUHVKRSSLQJFHQWHUSDUNLQJORWVKDUHGZLWK DOO RWKHU WHQDQWV RI 'HOWD 6TXDUH  :DO0DUWjV OHDVH DOVR 2Q WKH WKLUG SRLQW ZKHWKHU WKH GLVWULFW FRXUW HUUHG LQ SURYLGHG IRU D SDUWLFXODU UDWLR RI VSDFHV DQG OLJKWLQJ FRQFOXGLQJWKDWWKHHYLGHQFHSUHVHQWHGE\0F&OXQJGLGQRW VSHFLILFDWLRQVIRUmWKHSRUWLRQRIWKHSDUNLQJORWVHUYLQJ>:DO SUHVHQWDJHQXLQHLVVXHRIPDWHULDOIDFWIRUDMXU\WRFRQVLGHU 0DUW@l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

BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB ,Q6HSWHPEHU GHFHGHQWjVKXVEDQG5RJHU0F&OXQJ 0F&OXQJ EURXJKWWKLVFDVHLQ7HQQHVVHHVWDWHFRXUWDJDLQVW &21&855,1*,13$57',66(17,1*,13$57 'HOWD6TXDUH6KRSSLQJ&HQWHU6DPXHO/RQJLRWWLDQG:DO BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 0DUW6WRUHV,QFDOOHJLQJWKDWGHIHQGDQWVZHUHQHJOLJHQWLQ IDLOLQJWRSURYLGHDGHTXDWHVHFXULW\IRUSDWURQVVKRSSLQJRQ 6,/(5&LUFXLWsXGJHFRQFXUULQJLQSDUWDQGGLVVHQWLQJLQ WKHLUSUHPLVHV7KH7HQQHVVHHWULDOFRXUWJUDQWHGVXPPDU\ SDUW  , FRQFXU ZLWK WKH PDMRULW\jV FRQFOXVLRQV RQ WKH MXGJPHQW LQ IDYRU RI DOO GHIHQGDQWV DQG WKH VWDWH FRXUW RI DGPLVVLELOLW\RIWKHVWDWHPHQWVPDGHE\s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jVZLIHZDVDEGXFWHGIURPWKDW EH OLDEOH XQOHVV WKH MXU\ IRXQG WKDW WKH YLFWLP 'RURWK\ SRUWLRQRIWKHVKRSSLQJFHQWHUjVSDUNLQJORWZKLFKFRQVWLWXWHG 0F&OXQJ ZDV DEGXFWHG IURP WKH :DO0DUW VHFWLRQ RI WKH :DO0DUWjV SUHPLVHV  3ODLQWLII QRZ DSSHDOV WKH GLVWULFW 'HOWD6TXDUH6KRSSLQJ&HQWHUSDUNLQJORW$GPLWWHGO\WKH FRXUWjV JUDQW RI VXPPDU\ MXGJPHQW LQ IDYRU RI GHIHQGDQW GLVWULFW FRXUW UHOLHG XSRQ D ZRUNHUjV FRPSHQVDWLRQ FDVH :DO0DUW /ROODU Y :DO0DUW 6WRUHV ,QF  6: G  7HQQ   IRULWVGHILQLWLRQRImSUHPLVHVl7KDWREYLRXVO\LV ,, QRWVWURQJDXWKRULW\LQDFDVHVXFKDVWKLV$VLQPRVWVWDWHV 7HQQHVVHH FRXUWV FRQVWUXH ZRUNHUjV FRPSHQVDWLRQ VWDWXWHV 7KLV FRXUW UHYLHZV DQ RUGHU RI D GLVWULFW FRXUW JUDQWLQJ OLEHUDOO\ZLWKDQ\UHDVRQDEOHGRXEWDVWRZKHWKHUDQLQMXU\ VXPPDU\MXGJPHQWGHQRYR7HUU\%DUU6DOHV$JHQF\,QF ZDV FDXVHG E\ ZRUN LV WR EH UHVROYHG LQ IDYRU RI JUDQWLQJ Y$OO/RFN&R )G WK&LU  6XPPDU\ UHOLHIWRWKHLQMXUHGHPSOR\HH6HH5HHVHUY<HOORZ)UHLJKW MXGJPHQW LV DSSURSULDWH mLI WKH SOHDGLQJV GHSRVLWLRQV 6\VWHPV,QF 6:G   7HQQ   m:RUNHUjV DQVZHUVWRLQWHUURJDWRULHVDQGDGPLVVLRQVRQILOHWRJHWKHU &RPSHQVDWLRQ $FW PXVW EH OLEHUDOO\ FRQVWUXHG DQG DQ\ ZLWKWKHDIILGDYLWVLIDQ\VKRZWKDWWKHUHLVQRJHQXLQHLVVXH UHDVRQDEOHGRXEWDVWRZKHWKHUDQLQMXU\ZDVFDXVHGE\ZRUN DVWRDQ\PDWHULDOIDFWDQGWKDWWKHPRYLQJSDUW\LVHQWLWOHGWR PXVW EH UHVROYHG LQ IDYRU RI WKH HPSOR\HHl  +DUPDQ Y MXGJPHQW DV D PDWWHU RI ODZl  )HG 5 &LY 3  F   ,Q 0RRUHjV4XDOLW\6QDFN)RRGV,QF6:G  7HQQ GHFLGLQJ D PRWLRQ IRU VXPPDU\ MXGJPHQW WKH FRXUW PXVW &W $SS    m,Q NHHSLQJ ZLWK WKH OLEHUDO FRQVWUXFWLRQ YLHZWKHHYLGHQFHDQGGUDZDOOUHDVRQDEOHLQIHUHQFHVLQIDYRU DFFRUGHG WKH :RUNHUjV &RPSHQVDWLRQ VWDWXWH WKH WHUP µDFFLGHQWDULVLQJRXWRIDQGLQWKHFRXUVHRIHPSOR\PHQWjKDV EHHQ FRQVWUXHG E\ RXU FRXUWV EH\RQG WKH OLPLWHG ODQJXDJH  FRQWDLQHG LQ WKH VWDWXWHl   7KHUHIRUH D ZRUNHUjV 0F&OXQJ SURFHHGHG WR WULDO LQ WKH GLVWULFW FRXUW DJDLQVW WKH

FRPSHQVDWLRQ GHILQLWLRQ RI SUHPLVHV ZRXOG VHHP WR UHPDLQLQJ GHIHQGDQWV DQG MXGJPHQW ZDV HQWHUHG LQ KLV IDYRU XSRQ D MXU\

HQFRPSDVVPRUHWHUULWRU\WKDQZRXOGDGHILQLWLRQEDVHGXSRQ YHUGLFW 7KDW MXGJPHQW ZDV WKH VXEMHFW RI D FURVVDSSHDO E\ WKRVH GHIHQGDQWV LQ FDVH QR  2Q sXQH   WKH GLVWULFW FRXUW JHQHUDOWRUWOLDELOLW\ HQWHUHG DQ RUGHU JUDQWLQJ WKH SDUWLHVj PRWLRQ IRU YROXQWDU\ GLVPLVVDO SXUVXDQW WR )HG 5 $SS 3   0F&OXQJY:DO0DUW6WRUHVHWDO 1R  1R  0F&OXQJY:DO0DUW6WRUHVHWDO 

RI WKH QRQPRYLQJ SDUW\ 0DWVXVKLWD (OHF ,QGXV &R Y FXVWRPHUV WR VXUYLYH VXPPDU\ MXGJPHQW  7KH 7HQQHVVHH =HQLWK5DGLR&RUS86   DQGWKHMXGJH 6XSUHPH&RXUWKHOGWKDW LVQRWmWRZHLJKWKHHYLGHQFHDQGGHWHUPLQHWKHWUXWKRIWKH PDWWHUEXWWRGHWHUPLQHZKHWKHUWKHUHLVDJHQXLQHLVVXHIRU &RQVLGHULQJ WKH QXPEHU IUHTXHQF\ DQG QDWXUH RI WKH WULDOl$QGHUVRQY/LEHUW\/REE\,QF86 FULPHV UHSRUWHG WR SROLFH PDQDJHPHQWjV     ,Q DGGLWLRQ XSRQ UHYLHZ RI WKH GLVWULFW FRXUWjV DFNQRZOHGJPHQW RI VHFXULW\ SUREOHPV DQG RWKHU GHFLVLRQ WKLV FRXUW LV OLPLWHG WR FRQVLGHULQJ WKH HYLGHQFH HYLGHQFHLQWKHUHFRUGZHFRQFOXGHWKDWWKHSURRIZRXOG ZKLFK ZDV VXEPLWWHG WR WKH GLVWULFW FRXUW  0DUNRZLW] Y VXSSRUWDILQGLQJWKDWWKHULVNRILQMXU\WRSODLQWLIIjVZLIH &DPSEHOO )G WK&LU  ZDV UHDVRQDEO\ IRUHVHHDEOH  2I FRXUVH IRUHVHHDELOLW\ DORQH GRHV QRW HVWDEOLVK WKH H[LVWHQFH RI D GXW\  2Q $ UHPDQG WKH PDJQLWXGH RI WKH SRWHQWLDO KDUP DQG WKH EXUGHQLPSRVHGXSRQGHIHQGDQWVPXVWDOVREHZHLJKHG 3ODLQWLIIILUVWFKDOOHQJHVWKHGLVWULFWFRXUWjVUXOLQJWKDWLQ WRGHWHUPLQHWKHH[LVWHQFHRIDGXW\ RUGHUWRVDWLVI\WKHOHJDOVWDQGDUGIRUOLDELOLW\DMXU\ZRXOG KDYHWRILQGWKDW0UV0F&OXQJZDVDEGXFWHGIURPWKHm:DO 0F&OXQJ 6:GDW 7KXVWKH7HQQHVVHH6XSUHPH 0DUWVHFWLRQl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mPXVWSURYH   DGXW\RIFDUHRZHGE\GHIHQGDQW IXUWKHUKHHGWKH7HQQHVVHH6XSUHPH&RXUWjVUXOLQJWKDWmWKH WRSODLQWLII   FRQGXFWIDOOLQJEHORZWKHDSSOLFDEOHVWDQGDUG TXHVWLRQRIGXW\DQGRIZKHWKHUGHIHQGDQWV KDYHEUHDFKHG RIFDUHWKDWDPRXQWVWRDEUHDFKRIWKDWGXW\   DQLQMXU\RU WKDWGXW\E\WDNLQJRUQRWWDNLQJFHUWDLQDFWLRQVLVRQHIRUWKH ORVV   FDXVHLQIDFW DQG  SUR[LPDWHRUOHJDOFDXVHl MXU\WRGHWHUPLQHEDVHGXSRQSURRIDWWULDOl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j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

FKHFNHGLQWRWKHLPSRXQGORWZLWK0UV0F&OXQJDOUHDG\LQ KDYH EHHQ REVHUYHG RU IURP SDVW H[SHULHQFH WKDW WKHWUXQNRIWKHFDUDW SPRQ6HSWHPEHU,QDGGLWLRQ FULPLQDODFWVDJDLQVWLWV FXVWRPHUVRQLWVSUHPLVHVDUH WZRRI+DUSHUjVVWDWHPHQWVDVWRWKHORFDWLRQRIWKHDEGXFWLRQ UHDVRQDEO\ IRUHVHHDEOH HLWKHU JHQHUDOO\ RU DW VRPH DSSHDUWREHDGPLVVLEOHDVGLVFXVVHGDERYHLQ3DUW%RIWKLV SDUWLFXODUWLPH RSLQLRQ$OWKRXJKWKHGLVWULFWFRXUWFRUUHFWO\FRQFOXGHGWKDW WKLVHYLGHQFHZDVQRWVXIILFLHQWWRSHUPLWDUHDVRQDEOHMXU\WR ,GDW 7KH&RXUWH[SODLQHGWKDWmWKHFUXFLDOLQTXLU\LVWKH FRQFOXGHWKDW0UV0F&OXQJZDVDEGXFWHGIURPWKHSDUWLFXODU IRUHVHHDELOLW\ RI D FULPLQDO DFW RFFXUULQJ RQ GHIHQGDQWjV VHFWLRQRIWKHSDUNLQJORWLQIURQWRI:DO0DUWZHDIILUPWKH SUHPLVHVl,GDW  GLVWULFWFRXUWjVILQGLQJWKDWWKHHYLGHQFHLVVXIILFLHQWWRSHUPLW DUHDVRQDEOHMXU\WRFRQFOXGHWKDWWKHDEGXFWLRQWRRNSODFH 2QGHIHQGDQWjVPRWLRQIRUVXPPDU\MXGJPHQWWKHIHGHUDO VRPHZKHUHLQWKH'HOWD6TXDUH6KRSSLQJ&HQWHUSDUNLQJORW GLVWULFW FRXUW UHYLHZHG WKH 7HQQHVVHH VWDQGDUG RXWOLQHG LQ 0F&OXQJ  6:G   7HQQ     &RUUHFWO\ WKH 7KXVZHFRQFOXGHWKDWSODLQWLIIKDVUDLVHGDJHQXLQHLVVXH GLVWULFWFRXUWDFNQRZOHGJHGWKDWWKHFULWLFDOILUVWTXHVWLRQZDV RIIDFWDVWRZKHWKHUWKHDEGXFWLRQRFFXUUHGRQGHIHQGDQWjV ZKDW FRQVWLWXWHG GHIHQGDQWjV SUHPLVHV  7KH GLVWULFW FRXUW SUHPLVHV6LPLODUO\SODLQWLIIKDVUDLVHGVXIILFLHQWHYLGHQFHDV H[SODLQHGWKDW WR WKH IRUHVHHDELOLW\ WR GHIHQGDQW RI WKH KDUP WR VWRUH 3ODLQWLIIEHDUVWKHEXUGHQRISURYLQJWKDW0UV0F&OXQJ ZDVDEGXFWHGIURP:DO0DUWjVSUHPLVHVLIVKHZDVQRW WKHQQROLDELOLW\DWWDFKHVWR:DO0DUWLQWKLVFDVH  7KH SURRI LQGLFDWHV WKDW 0UV 0F&OXQJ ZDV DEGXFWHG /ROODU Y :DO0DUW :H DFNQRZOHGJH WKDW DV WKH GLVVHQW SRLQWV RXW IURPWKH'HOWD6TXDUH6KRSSLQJ&HQWHUSDUNLQJORW7KH 6WRUHV ,QF  6:G  7HQQ    LV D ZRUNHUjV FRPSHQVDWLRQ ILUVWTXHVWLRQWKHUHIRUHLVZKHWKHUDQ\SDUWRIWKH'HOWD FDVH ZKHUH FRXUWV DUH SHUKDSV PRUH OLEHUDO LQ GHWHUPLQLQJ ZKHWKHU DQ LQMXU\ LV FDXVHG E\ ZRUN 1RQHWKHOHVV WKHUH LV OLWWOH RWKHU 7HQQHVVHH 6TXDUH6KRSSLQJ&HQWHUSDUNLQJORWPD\EHFRQVLGHUHG DXWKRULW\ DYDLODEOH ZLWK UHVSHFW WR ZKDW FRQVWLWXWHV WKH mSUHPLVHVl XQGHU SDUWRI:DO0DUWjVSUHPLVHV WKH 0F&OXQJ OLDELOLW\ VWDQGDUG ,Q0F&OXQJ  WKH 7HQQHVVHH 6XSUHPH &RXUW ZDV DGGUHVVLQJ WKLV YHU\ FDVH DQG GLG QRW DWWDFK DQ\ LPSRUWDQFH WR s$  $OWKRXJKWKH7HQQHVVHH6XSUHPH&RXUWGLGQRW GLVWLQFWLRQV EHWZHHQ YDULRXV SRUWLRQV RI WKH PDOO SDUNLQJ ORW 5DWKHU WKH H[SOLFLWO\GHILQHmSUHPLVHVlLQ0F&OXQJLWGLGGHWHUPLQHWKDW FRXUW WUHDWHG :DO0DUW DQG LWV FRGHIHQGDQWV LQ SUHFLVHO\ WKH VDPH SODLQWLII ZRXOG VXUYLYH GHIHQGDQWjV PRWLRQ IRU VXPPDU\ PDQQHU HYHQ WKRXJK RQH RI WKH FRGHIHQGDQWV RZQHG WKH HQWLUH VKRSSLQJ FHQWHU ZKLOH :DO0DUW ZDV RQO\ D VLQJOH WHQDQW ,Q D ODWHU 7HQQHVVHH MXGJPHQW ZKHUH WKH DEGXFWLRQ WRRN SODFH LQ GHIHQGDQWjV FDVH 6WDSOHV Y &%/ $VVRF ,QF   6:G  7HQQ   WKH FRXUW SDUNLQJ ORW  7KH 7HQQHVVHH &RXUW H[SODLQHG WKDW LW ZDV FRPPHQWHG RQ D SRUWLRQ RI WKH 0F&OXQJ RSLQLRQ m>,@Q 0F&OXQJ  ZH HVWDEOLVKLQJmWKHDSSURSULDWHWHVWIRUGHWHUPLQLQJWKHGXW\RI UHFRJQL]HG WKDW  FULPLQDO LQFLGHQWV KDG RFFXUUHG RQ WKH UHOHYDQW FDUHLQFDVHVLQYROYLQJEXVLQHVVSUHPLVHVOLDELOLW\IRUWKHDFWV SUHPLVHV ZLWKLQ WKH VHYHQWHHQ PRQWK SHULRG SUHFHGLQJ WKH SODLQWLIIjV RI XQNQRZQ WKLUG SDUWLHVl  0F&OXQJ  6:G DW  LQMXU\    ZH DFNQRZOHGJHG WKDW µ>D@V D SUDFWLFDO PDWWHU WKH UHTXLVLWH GHJUHH RI IRUHVHHDELOLW\ HVVHQWLDO WR HVWDEOLVK D GXW\ WR SURWHFW DJDLQVW 7KH 7HQQHVVHH &RXUW VWDWHG WKDW mSODLQWLIIjV ZLIH ZDV FULPLQDO DFWV ZLOO DOPRVW DOZD\V UHTXLUH WKDW SULRU LQVWDQFHV RI FULPH KDYH UHWXUQLQJWRKHUFDULQGHIHQGDQWVjSDUNLQJORWZKHQVKHZDV RFFXUUHG RQ RU LQ WKH LPPHGLDWH YLFLQLW\ RI WKH GHIHQGDQWjV SUHPLVHVl ,G DFFRVWHGl,GDW DQGXOWLPDWHO\UHYHUVHGWKHWULDOFRXUWjV DW  Q DOWHUDWLRQ LQ RULJLQDO  7KH 0F&OXQJ FRXUW H[DPLQHG WKH JUDQWRIVXPPDU\MXGJPHQWWRGHIHQGDQWV7KH7HQQHVVHH QXPEHU RI LQFLGHQWV RFFXUULQJ RQ RU QHDU WKH HQWLUH SDUNLQJ ORW GHVSLWH WKH VWDQGDUGVHWIRUWKLQ0F&OXQJIRUGHWHUPLQLQJOLDELOLW\LQWKLV IDFW WKDW GHIHQGDQW :DO0DUW ZDV RQO\ RQH WHQDQW ,Q YLHZ RI WKH VWDWHPHQWV PDGH LQ WKHVH FDVHV ZH FRQFOXGH WKDW WKH 7HQQHVVHH 6XSUHPH FRQWH[WRQO\DSSOLHVWRDFWVRIWKLUGSDUWLHVZKLFKRFFXURQD &RXUW ZRXOG QRW GLVWLQJXLVK DPRQJ WKH YDULRXV SDUWV RI WKH PDOO SDUNLQJ EXVLQHVVj SUHPLVHV  7KH 7HQQHVVHH &RXUW WKXV HIIHFWLYHO\ ORW ZKHQ GHWHUPLQLQJ :DO0DUWjV GXW\ WR LWV FXVWRPHU LQ WKLV FDVH  0F&OXQJY:DO0DUW6WRUHVHWDO 1R  1R  0F&OXQJY:DO0DUW6WRUHVHWDO 

KHOG WKDW WKH SDUNLQJ ORW RI D VWRUH FRQVWLWXWHV SDUW RI WKH DJDLQVW +DUSHUjV LQWHUHVW WR DGPLW WKDW WKH DEGXFWLRQ WRRN VWRUHjVSUHPLVHV SODFH LQ 7HQQHVVHH EHFDXVH KH FRXOG EH H[WUDGLWHG IURP $UNDQVDVWR7HQQHVVHHDQGWKHQWULHGIRUKLVFULPH :H PXVW GHWHUPLQH KRZHYHU ZKHWKHU GHIHQGDQWjV SUHPLVHVLQFOXGHVWKHHQWLUH'HOWD6TXDUH6KRSSLQJ&HQWHU ,Q DGGLWLRQ WR VDWLVI\LQJ WKH VWDWHPHQW DJDLQVW LQWHUHVW SDUNLQJORWRURQO\WKHVPDOOHU:DO0DUWGHVLJQDWHGSRUWLRQ H[FHSWLRQ +DUSHUjV VWDWHPHQWV PXVW VDWLVI\ WKH JHQHUDO RI WKH ORW  3ODLQWLII DUJXHV WKDW WKH HQWLUH 'HOWD 6TXDUH KHDUVD\ UHOLDELOLW\ VWDQGDUG  :H VHH QR UHDVRQ WR ILQG 6KRSSLQJ&HQWHUSDUNLQJORWFRQVWLWXWHVSDUWRIGHIHQGDQWjV +DUSHUjVILUVWWZRVWDWHPHQWVXQUHOLDEOH$OWKRXJKLWLVQRW SUHPLVHVEHFDXVHXQGHUWKHWHUPVRILWVOHDVHGHIHQGDQW:DO HQWLUHO\ FOHDU LW DSSHDUV WKDW WKH GLVWULFW MXGJH IRXQG WKH 0DUWKDGDmQRQH[FOXVLYHULJKWWRXVHLQFRPPRQZLWK VWDWHPHQWV UHOLDEOH ZKHQ KH FRQFOXGHG WKDW m>W@KH SURRI WKH    RWKHU VWRUHV LQ WKH 6KRSSLQJ &HQWHUl WKH HQWLUH LQGLFDWHV WKDW 0UV 0F&OXQJ ZDV DEGXFWHG IURP WKH 'HOWD VKRSSLQJFHQWHUSDUNLQJORW s$ :DO0DUWDUJXHV 6TXDUH 6KRSSLQJ &HQWHU SDUNLQJ ORWl s$     ,Q DQ\ WKDWLWVmSUHPLVHVlLQFOXGHGRQO\WKHVPDOOHUSRUWLRQRIWKH HYHQWWKHGLVWULFWMXGJHLVQRWIRUHFORVHGIURPFRQVLGHULQJWKH SDUNLQJORWZKLFKLVVXEMHFWWRWKH:DO0DUWVSHFLILFOLJKWLQJ UHOLDELOLW\RI+DUSHUjVILUVWWZRVWDWHPHQWVRQUHPDQG DQGVSDFHUDWLRDJUHHPHQWVLQWKHOHDVH & 7KHGLVWULFWFRXUWFRQFOXGHGWKDWWKH:DO0DUWSUHPLVHV LQFOXGHGRQO\WKHVPDOOHUm:DO0DUWGHVLJQDWHGlSRUWLRQRI 3ODLQWLIIjV ILQDO FODLP LV WKDW WKH GLVWULFW FRXUW HUUHG LQ WKHORW,QUHDFKLQJWKDWFRQFOXVLRQWKHGLVWULFWFRXUWUHOLHGRQ FRQFOXGLQJWKDWWKHHYLGHQFHSUHVHQWHGE\ SODLQWLIIGLGQRW D7HQQHVVHHZRUNHUjVFRPSHQVDWLRQFDVH/ROODUY:DO0DUW UDLVHDJHQXLQHLVVXHRIPDWHULDOIDFWIRUDMXU\WRFRQVLGHU 6WRUHV,QF6:G 7HQQ  IRUWKHGHILQLWLRQ 5DWKHUSODLQWLIIDUJXHVWKDWWKHGLVWULFWFRXUWLPSHUPLVVLEO\ RISUHPLVHV:HILQGKRZHYHUWKDWWKHGLVWULFWFRXUWHUUHGLQ ZHLJKHGWKHHYLGHQFHDQGXVXUSHGWKHUROHRIWKHMXU\ LWVFRQFOXVLRQ,Q/ROODUWKH7HQQHVVHH6XSUHPH&RXUWKHOG WKDW IRU SXUSRVHV RI D ZRUNHUjV FRPSHQVDWLRQ FODLP DQ (PSOR\LQJ WKH 7HQQHVVHH OLDELOLW\ VWDQGDUG RXWOLQHG LQ HPSOR\HUSURYLGHG HPSOR\HH SDUNLQJ DUHD LV SDUW RI WKH 0F&OXQJZHPXVWGHWHUPLQHZKHWKHUDUHDVRQDEOHMXU\FRXOG HPSOR\HUjVSUHPLVHVUHJDUGOHVVRIZKHWKHUFXVWRPHUVRUWKH FRQFOXGH WKDW 0UV 0F&OXQJ ZDV DEGXFWHG IURP WKH 'HOWD JHQHUDOSXEOLFPD\DOVRSDUNWKHUH,GDW([WHQGLQJ 6TXDUH 6KRSSLQJ &HQWHU SDUNLQJ ORW  ,I D MXU\ FRXOG VR /ROODUWRWKHSUHVHQWLVVXHRIOLDELOLW\RZHGWRFXVWRPHUVIRU FRQFOXGHZHPXVWWKHQGHWHUPLQHEDVHGRQWKH7HQQHVVHH DFWVRIWKLUGSDUWLHVUHTXLUHVDKROGLQJWKDWLIDVWRUHRZQHU VWDQGDUGZKHWKHUDUHDVRQDEOHMXU\FRXOGFRQFOXGHWKDWmWKH RIIHUVSDUNLQJWRLWVFXVWRPHUVWKDWSDUNLQJDUHDLVSDUWRIWKH IRUHVHHDEOH SUREDELOLW\ DQG JUDYLW\ RI KDUP SRVHG E\ VWRUHSUHPLVHVUHJDUGOHVVRIZKRHOVHPLJKWDOVRSDUNWKHUH GHIHQGDQWjVFRQGXFWRXWZHLJKWKHEXUGHQXSRQGHIHQGDQWWR 7KH SURYLVLRQ RI SDUNLQJ DUHDV IRU FXVWRPHUV FUHDWHV D HQJDJHLQDOWHUQDWLYHFRQGXFWWKDWZRXOGKDYHSUHYHQWHGWKH UHODWLRQVKLSEHWZHHQWKHVWRUHRZQHUDQGFXVWRPHUIURPZKLFK KDUPl0F&OXQJ 6:GDW  DGXW\PD\DULVH 7KH GLVWULFW FRXUW IRXQG WKDW m>W@KH SURRI LQGLFDWHV 0UV ,QWKHSUHVHQWFDVH:DO0DUWKDGULJKWVWRWKHHQWLUH'HOWD 0F&OXQJ ZDV DEGXFWHG IURP WKH 'HOWD 6TXDUH 6KRSSLQJ 6TXDUH 6KRSSLQJ &HQWHU SDUNLQJ ORW DQG :DO0DUWjV &HQWHUSDUNLQJORWl s$  3ODLQWLIIRIIHUHGWKH:DO FXVWRPHUV ZHUH IUHH WR SDUN DQ\ZKHUH LQ WKH ORW  1RWKLQJ 0DUWUHFHLSWVVKRZLQJSXUFKDVHVDW DPDQG SP LQGLFDWHGWRFXVWRPHUVWKDW:DO0DUWKDGDQ\VSHFLDOSDUNLQJ RQ 6HSWHPEHU  DQG WKH :DO0DUW VKRSSLQJ EDJV DQG DUHDRUH[WHQGHGDVSHFLDOLQYLWDWLRQWRSDUNLQDSDUWLFXODU SXUFKDVHVIRXQGZLWK0UV0F&OXQJjVERG\DVHYLGHQFHWR VXSSRUW WKDW FRQFOXVLRQ  7KH UHFRUG VKRZV WKDW +DUSHU  0F&OXQJY:DO0DUW6WRUHVHWDO 1R  1R  0F&OXQJY:DO0DUW6WRUHVHWDO

SUHPLVHVGHILQHGKHUHDVLQFOXGLQJWKHHQWLUH'HOWD6TXDUH SDUWRIWKHVKRSSLQJFHQWHUORW7KXV:DO0DUWjVUHODWLRQVKLS SDUNLQJORW ZLWK LWV FXVWRPHUV ZDV EDVHG RQ DQ LQYLWDWLRQ WR SDUN DQ\ZKHUHLQWKH'HOWD6TXDUH6KRSSLQJ&HQWHUSDUNLQJORWLQ ,QKLV6HSWHPEHUVWDWHPHQWWRSROLFH+DUSHUVWDWHGWKDW RUGHUWRVKRSDW:DO0DUW)RUWKLVUHDVRQZHFRQFOXGHWKDW KHDEGXFWHG0UV0F&OXQJIURPDm&LUFXV&LW\lSDUNLQJORW WKHGLVWULFWFRXUWHUUHGDQGWKDWWKH7HQQHVVHH6XSUHPH&RXUW LQ0HPSKLV s$ 2Q6HSWHPEHU+DUSHUVWDWHGWR LQWHQGHGLWVQHZOLDELOLW\VWDQGDUGWRDSSO\DQ\ZKHUHRQ:DO SROLFHWKDWKHmZDONHGRYHUWR&LUFXLW&LW\DQGWKH:DO0DUW 0DUWjV SUHPLVHV ZKLFK LQFOXGHG WKH HQWLUH 'HOWD 6TXDUH WKH QHDUHVW VWRUH DQG , VHHQ WKLV ODG\ DQG WKDWjV ZKHQ , 6KRSSLQJ&HQWHUSDUNLQJORW$VDUHVXOWZKLOHSODLQWLIIPXVW WKRXJKW,VKRXOGJHWKHUFDU6RZKHQVKHFDPHRXWRIWKH VKRZ WKDW D UHDVRQDEOH MXU\ FRXOG FRQFOXGH WKDW 0UV VWRUHVKHJRWLQKHUFDUDQG,JRWLQULJKWEHKLQGKHUl s$ 0F&OXQJ ZDV DEGXFWHG IURP WKH 'HOWD 6TXDUH 6KRSSLQJ  (DFKRIWKHVHVWDWHPHQWVZDVPDGHZLWKLQDJHQHUDO &HQWHUSDUNLQJORWSODLQWLIIQHHGQRWVKRZWKDW0UV0F&OXQJ DGPLVVLRQ RI JXLOW EXW XQGHU :LOOLDPVRQ m5XOH  E  ZDVDEGXFWHGIURPDQ\SDUWLFXODUDUHDZLWKLQWKHSDUNLQJORW FRYHU>V@ RQO\ WKRVH GHFODUDWLRQV RU UHPDUNV ZLWKLQ WKH FRQIHVVLRQWKDWDUHLQGLYLGXDOO\VHOILQFXOSDWRU\l86 % DW 7KXVWKHTXHVWLRQLVZKHWKHU+DUSHUjVVWDWHPHQWVDV WRKLVORFDWLRQVXEMHFWHGKLPWRVXIILFLHQWSHQDOOLDELOLW\WKDW 3ODLQWLIIFODLPVWKDWWKHGLVWULFWFRXUWHUUHGE\H[FOXGLQJ D UHDVRQDEOH SHUVRQ ZRXOG QRW KDYH PDGH WKH VWDWHPHQWV VWDWHPHQWV PDGH E\ +DUSHU GHWDLOLQJ WKH DEGXFWLRQ DQG XQOHVVEHOLHYLQJWKHPWREHWUXH,Gm>:@KHWKHUDVWDWHPHQW NLGQDSLQJRI0UV0F&OXQJ3ODLQWLIIRULJLQDOO\ZLVKHGWR LVVHOILQFXOSDWRU\RUQRWFDQRQO\EHGHWHUPLQHGE\YLHZLQJ XVH WKHVH VWDWHPHQWV WR VKRZ WKDW 0UV 0F&OXQJ ZDV LWLQFRQWH[Wl,GDW DEGXFWHGIURPWKHVSHFLILF:DO0DUWSRUWLRQRIWKHSDUNLQJ ORW  ,Q SDUWLFXODU DSSHOODQW SRLQWV WR +DUSHUjV JXLOW\ SOHD +DUSHUjVVWDWHPHQWVSODFHKLPDWWKHVDPHORFDWLRQDVWKH SURFHHGLQJ LQ ZKLFK KH DIILUPHG WKH DVVLVWDQW DWWRUQH\ YLFWLPDVVKRZQE\WKH:DO0DUWFDVKUHJLVWHUUHFHLSWVDQG JHQHUDOjVVWDWHPHQWWKDWm0U+DUSHUFRQIHVVHGWKDWKHKDGLQ DUH HYLGHQFH RI KLV RSSRUWXQLW\ DQG LQWHQW WR FRPPLW WKH IDFW    DW WKH :DO0DUW SDUNLQJ ORW LQ 0HPSKLV 6KHOE\ FULPH  7KHVH VWDWHPHQWV ZHUH FRQWUDU\ WR +DUSHUjV SHQDO &RXQW\ 7HQQHVVHH XVHG D ZHDSRQ    WR NLGQDS 0UV LQWHUHVWDQGWKHUHLVQRUHDVRQWRVXJJHVWWKDW+DUSHUZRXOG 'RURWK\0F&OXQJl s$ %DVHGRQWKHFRQFOXVLRQ KDYH PDGH WKHVH VWDWHPHQWV ZLWKRXW EHOLHYLQJ WKHP WR EH UHDFKHG DERYHWKDWGHIHQGDQWjVSUHPLVHVLQFOXGHWKHHQWLUH WUXH  7KH 6XSUHPH &RXUW LQ :LOOLDPVRQ RIIHUHG D VLPLODU 'HOWD6TXDUH6KRSSLQJ&HQWHUSDUNLQJORWSODLQWLIIQHHGRQO\ H[DPSOHRIDGPLVVLEOHHYLGHQFH7KH&RXUWFRPPHQWHGWKDW VKRZWKDW0UV0F&OXQJZDVDEGXFWHGIURPVRPHZKHUHLQ mµ,ZDVUREELQJWKHEDQNRQ)ULGD\PRUQLQJjFRXSOHGZLWK WKH 'HOWD 6TXDUH 6KRSSLQJ &HQWHU SDUNLQJ ORW  )RU WKDW VRPHRQHjV WHVWLPRQ\ WKDW WKH GHFODUDQW DQG WKH GHIHQGDQW SXUSRVH SODLQWLII VHHNV DGPLVVLRQ RI HDFK RI +DUSHUjV GURYH RII WRJHWKHU )ULGD\ PRUQLQJ LV HYLGHQFH WKDW WKH VWDWHPHQWV UHIHUULQJ WR KLV ORFDWLRQ DW WKH WLPH RI WKH GHIHQGDQW DOVR SDUWLFLSDWHG LQ WKH UREEHU\l ,G DW  DEGXFWLRQ 6LPLODUO\ZHILQGWKDWFRXSOHGZLWKRWKHUHYLGHQFHRI0UV 0F&OXQJjVSUHVHQFHDWWKH'HOWD6TXDUH6KRSSLQJ&HQWHU +DUSHULVQRZGHFHDVHGDQGKLVVWDWHPHQWVDUHLQDUJXDEO\ +DUSHUjVVWDWHPHQWVWKDWKHDEGXFWHG0UV0F&OXQJIURPWKH KHDUVD\  3ODLQWLII DUJXHG EHIRUH WKH GLVWULFW FRXUW WKDW WKH &LUFXLW&LW\DQG:DO0DUWSDUNLQJORWVDWLVI\WKHVWDWHPHQW VWDWHPHQWVZHUHDGPLVVLEOHKRZHYHUXQGHUWKHVWDWHPHQWV DJDLQVWLQWHUHVWH[FHSWLRQWRWKHKHDUVD\UXOHDVHYLGHQFHWKDW DJDLQVW SHQDO LQWHUHVW H[FHSWLRQ WR WKH KHDUVD\ UXOH  $ WKH DEGXFWLRQ RFFXUUHG RQ :DO0DUWjV SUHPLVHV VWDWHPHQWDJDLQVWLQWHUHVWLV $GGLWLRQDOO\WKHVHVWDWHPHQWVZHUHPDGHLQ$UNDQVDV,WZDV  0F&OXQJY:DO0DUW6WRUHVHWDO 1R  1R  0F&OXQJY:DO0DUW6WRUHVHWDO 

$VWDWHPHQWZKLFKZDVDWWKHWLPHRILWVPDNLQJVRIDU *HQHUDOjV UHFLWDWLRQ RI WKH HYHQWV RI 0UV 0F&OXQJjV FRQWUDU\ WR WKH GHFODUDQWjV SHFXQLDU\ RU SURSULHWDU\ DEGXFWLRQ UDSH DQG PXUGHU LQ RUGHU WR FODULI\ ZKHUH LQWHUHVWRUVRIDUWHQGHGWRVXEMHFWWKHGHFODUDQWWRFLYLO H[DFWO\LQWKHSDUNLQJORWKHNLGQDSSHG0UV0F&OXQJ RUFULPLQDOOLDELOLW\RUWRUHQGHULQYDOLGDFODLPE\WKH GHFODUDQWDJDLQVWDQRWKHUWKDWDUHDVRQDEOHSHUVRQLQWKH s$  GHFODUDQWjVSRVLWLRQZRXOGQRWKDYHPDGHWKHVWDWHPHQW XQOHVVEHOLHYLQJLWWREHWUXH :HDJUHHZLWKWKHGLVWULFWFRXUWWKDW+DUSHUjVVWDWHPHQWVLQ KLVJXLOW\SOHDSURFHHGLQJVUHJDUGLQJWKHH[DFWORFDWLRQRIWKH )HG 5 (YLG  E    2QO\ WKRVH VSHFLILF VWDWHPHQWV FDUMDFNLQJ GR QRW VDWLVI\ WKH VWDWHPHQW DJDLQVW LQWHUHVW ZLWKLQ D JHQHUDO FRQIHVVLRQ ZKLFK DUH VHOILQFXOSDWRU\ DUH H[FHSWLRQWRWKHKHDUVD\UXOH1RQHRIWKHIDFWRUVSHUPLWWLQJ DGPLVVLEOH XQGHU 5XOH  E   KRZHYHU  7KH 6XSUHPH KHDUVD\VWDWHPHQWVXQGHUWKHVWDWHPHQWDJDLQVWLQWHUHVWUXOH &RXUWKDVVWDWHGWKDW DSSO\ WR KLV VWDWHPHQW  :H FRQFOXGH PRUH EDVLFDOO\ WKDW +DUSHUjV VWDWHPHQW DW WKH JXLOW\ SOHD SURFHHGLQJ GRHV QRW ,QRXUYLHZWKHPRVWIDLWKIXOUHDGLQJRI5XOH E  VDWLVI\WKHUHOLDELOLW\VWDQGDUGIRUKHDUVD\HYLGHQFH+DUSHU LV WKDW LW GRHV QRW DOORZ DGPLVVLRQ RI QRQVHOI JHQHUDOO\ DIILUPHG WKH DVVLVWDQW DWWRUQH\ JHQHUDOjV HQWLUH LQFXOSDWRU\VWDWHPHQWVHYHQLIWKH\DUHPDGHZLWKLQD VWDWHPHQW ZKLFK LQFOXGHG D QXPEHU RI WKLQJV WKDW +DUSHU EURDGHUQDUUDWLYHWKDWLVJHQHUDOO\VHOILQFXOSDWRU\7KH ZRXOG KDYH KDG QR ZD\ RI NQRZLQJ  )RU H[DPSOH WKH GLVWULFWFRXUWPD\QRWMXVWDVVXPHIRUSXUSRVHVRI5XOH DVVLVWDQWDWWRUQH\JHQHUDOjVGHVFULSWLRQRIWKHIDFWVLQFOXGHG  E  WKDWDVWDWHPHQWLVVHOILQFXOSDWRU\EHFDXVHLW DVWDWHPHQWWKDW0U0F&OXQJVSRNHWRKLVZLIHDW DP LVSDUWRIDIXOOHUFRQIHVVLRQDQGWKLVLVHVSHFLDOO\WUXH RQWKHPRUQLQJRIWKHDEGXFWLRQDQGDVWDWHPHQWUHJDUGLQJ ZKHQWKHVWDWHPHQWLPSOLFDWHVVRPHRQHHOVH SKRQH FDOOV UHFHLYHG E\ WKH &ULWWHQGHQ &RXQW\ 6KHULIIjV RIILFH s$ +DUSHUjVVLQJOHm\HVlDQVZHUDIILUPHGWKH :LOOLDPVRQY8QLWHG6WDWHV86     DVVLVWDQWDWWRUQH\JHQHUDOjVHQWLUHVWDWHPHQW\HWKHFRXOGQRW SRVVLEO\KDYHNQRZQZKHWKHUPDQ\RIWKHVHHYHQWVRFFXUUHG 7KHGLVWULFWFRXUWFRQFOXGHGWKDW+DUSHUjVVZRUQDIILUPDQFH $VWKHGLVWULFWFRXUWKHOGWKHUHLVQRUHDVRQWREHOLHYHWKDWLQ GXULQJKLVJXLOW\SOHDKHDULQJWKDWKHNLGQDSHG0UV0F&OXQJ WKLV FRQWH[W +DUSHU ZRXOG KDYH FRUUHFWHG DQ LQFRUUHFW IURPWKHm:DO0DUWSDUNLQJORWlDVRSSRVHGWRWKH&LUFXLW VWDWHPHQWE\WKHDVVLVWDQWDWWRUQH\JHQHUDODVWRWKHORFDWLRQ &LW\SDUNLQJORWZDVQRWLQLWVHOIDVWDWHPHQWDJDLQVWLQWHUHVW RIWKHDEGXFWLRQ+DUSHUjVVLPSOHm<HVVLUlUHVSRQVHZKHQ EHFDXVHLWGLGQRWVXEMHFW+DUSHUWRDQ\DGGLWLRQDOOLDELOLW\ DVNHGZKHWKHUWKHDVVLVWDQWDWWRUQH\JHQHUDOjVUHFLWDWLRQRIWKH ZKLFKKHGLGQRWDOUHDG\IDFHEHFDXVHRIKLVKHLQRXVDFWV IDFWVZDVDFFXUDWHLVQRWVXIILFLHQWO\UHOLDEOHWREHDGPLVVLEOH 7KHGLVWULFWFRXUWH[SODLQHGWKDW  :HWKHUHIRUHDIILUPWKHGLVWULFWFRXUWjVKROGLQJWKDW+DUSHUjV VWDWHPHQWDWWKHJXLOW\SOHDSURFHHGLQJLVQRWDGPLVVLEOH >$@UHDVRQDEOHSHUVRQLQ+DUSHUjVSRVLWLRQDWWKHWLPHKH DIILUPHG WKH $VVLVWDQW $WWRUQH\ *HQHUDOjV UHFLWDWLRQ +DUSHUjVRWKHUWZRVWDWHPHQWVPDGHRQ6HSWHPEHUDQG ZRXOGKDYHFRQVLGHUHGLPPDWHULDODQGLUUHOHYDQWIURP 6HSWHPEHU  SODFHG +DUSHU RXWVLGH m&LUFXV &LW\l DQG ZKLFKVSHFLILFSRUWLRQRIDVKRSSLQJFHQWHUSDUNLQJORW RXWVLGHERWK&LUFXLW&LW\DQG:DO0DUWUHVSHFWLYHO\%DVHG KHFDUMDFNHG0UV0F&OXQJ+DUSHUjVDGPLVVLRQRIWKH RQWKH7HQQHVVHHOLDELOLW\VWDQGDUGRXWOLQHGDERYHZHPXVW DEGXFWLRQ UDSH DQG PXUGHU ZHUH VWDWHPHQWV DJDLQVW FRQVLGHUZKHWKHUHLWKHURIWKHVHVWDWHPHQWVDUHDGPLVVLEOHWR +DUSHUjV LQWHUHVW DW WKH WLPH RI WKH JXLOW\ SOHD VKRZ WKDW 0UV 0F&OXQJ ZDV DEGXFWHG IURP :DO0DUWjV SURFHHGLQJV  ,W LV WUXO\ LQFRQFHLYDEOH WR EHOLHYH WKDW +DUSHU ZRXOG KDYH FRUUHFWHG WKH $VVLVWDQW $WWRUQH\