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

'(55,&. &2/(6 ; 3ODLQWLII$SSHOODQW        1RV      *:(1'2/<1 '$1,/(6 !  ,QWHUYHQRU3ODLQWLII$SSHOODQW       3ODLQWLII$SSHOODQW       Y   67(9,( :21'(5 0272:1  5(&25' &203$1<  67(9/$1' 0255,6  38%/,6+,1*   'HIHQGDQWV$SSHOOHHV 1

$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW&OHYHODQG 1R n6RORPRQ2OLYHUsU'LVWULFWsXGJH $UJXHG sDQXDU\ 'HFLGHGDQG)LOHG 0DUFK

  &ROHVHWDOY 1RV    :RQGHUHWDO

%HIRUH 1255,6DQG&/$<&LUFXLWsXGJHV 6$5*86 'LVWULFWsXGJH BBBBBBBBBBBBBBBBB &2816(/ $5*8(' %ULDQ'6XOOLYDQ5(0,1*(5 5(0,1*(5 &2&OHYHODQG2KLRIRU$SSHOODQWV6WHYHQ$0DUHQEHUJ ,5(//  0$1(//$ /RV $QJHOHV &DOLIRUQLD IRU $SSHOOHHV  21 %5,()   %ULDQ ' 6XOOLYDQ &OLIIRUG & 0DVFK5(0,1*(5 5(0,1*(5&2&OHYHODQG2KLR &KDUOHV(:DJQHU&OHYHODQG2KLRIRU$SSHOODQWV6WHYHQ $0DUHQEHUJ/DXUD$6HLJOH,5(// 0$1(//$/RV $QJHOHV&DOLIRUQLD'HERUDK$&ROHPDQ+$+1/2(6(5 3$5.6&OHYHODQG2KLRIRU$SSHOOHHV BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB $/$1(1255,6&LUFXLWsXGJH7KH&RS\ULJKW$FWRI    86& †  HW VHT UHTXLUHV WKDW DQ LQGLYLGXDO ZLVKLQJ WR UHJLVWHU D FRS\ULJKW PXVW LQ WKH FDVH RI DQ XQSXEOLVKHG ZRUN GHSRVLW mRQH FRPSOHWH FRS\ RU SKRQRUHFRUGl ZLWK WKH &RS\ULJKW 2IILFH DW WKH WLPH RI DSSOLFDWLRQ86&† E  7KHTXHVWLRQSUHVHQWHG E\WKHFLUFXPVWDQFHVRIWKLVFDVHLVZKHWKHUWKHFRS\RIWKH RULJLQDO ZRUN GHSRVLWHG E\ D FRS\ULJKW DSSOLFDQW PXVW EH PDGHZLWKUHIHUHQFHWRWKHRULJLQDOZRUNLQRUGHUWRHVWDEOLVK D FRS\ULJKW GDWH HDUOLHU WKDQ WKH GDWH RI WKH FRS\ULJKW DSSOLFDWLRQ:HDUHQRWSHUVXDGHGWKDWWKHGLVWULFWFRXUWHUUHG LQUHVROYLQJWKHFRQWURYHUV\EHWZHHQWKHSDUWLHVE\UHO\LQJ XSRQWKHUHDVRQLQJIRXQGLQ.RGDGHNY0791HWZRUNV,QF )G  WK&LU  7KHUHWKH&RXUWRI$SSHDOV

7KH +RQRUDEOH (GPXQG $ 6DUJXV sU 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH 6RXWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ  &ROHVHWDOY 1RV    1RV    &ROHVHWDOY  :RQGHUHWDO :RQGHUHWDO

VD\WKDWWKHDZDUGLQWKLVFDVHPHULWVUHYHUVDO2XUGHFLVLRQ IRUWKH1LQWK&LUFXLWFRQFOXGHGWKDWmDQ\FRS\GHSRVLWHGDV LV EROVWHUHG E\ WKH IDFW WKDW WKH GLVWULFW FRXUW H[HUFLVHG LWV SDUWRIDQDSSOLFDWLRQIRUDFHUWLILFDWHRIFRS\ULJKWUHJLVWUDWLRQ GLVFUHWLRQ E\ UHGXFLQJ WKH DZDUG VLJQLILFDQWO\ EDVHG XSRQ PXVWEHYLUWXDOO\LGHQWLFDOWRWKHRULJLQDODQGPXVWKDYHEHHQ HTXLWDEOHFRQFHUQV SURGXFHGE\GLUHFWO\UHIHUULQJWRWKHRULJLQDOl,GDW LQWHUQDOSXQFWXDWLRQDOWHUHG  ,9 7KHGLVWULFWFRXUWJUDQWHGVXPPDU\MXGJPHQWWRGHIHQGDQWV 7KHMXGJPHQWRIWKHGLVWULFWFRXUWLVDIILUPHG LQWKLVDFWLRQZKLFKLQYROYHVDOOHJDWLRQVE\SODLQWLII'HUULFN &ROHVWKDWGHIHQGDQW6WHYLH:RQGHUPDGHXQODZIXOXVHRIKLV FRS\ULJKWHGVRQJ)RU<RXU/RYH)RUWKHUHDVRQVRXWOLQHG EHORZ ZH DIILUP WKH JUDQW RI VXPPDU\ MXGJPHQW WR GHIHQGDQWVDVZHOODVWKHGLVWULFWFRXUWjVGHFLVLRQWRDZDUG WKHPDSRUWLRQRIWKHLUDWWRUQH\jVIHHVDQGFRVWV , 2Q6HSWHPEHU SODLQWLII'HUULFN&ROHVDSSOLHGIRU DFRS\ULJKWUHJLVWUDWLRQRI)RU<RXU/RYH7KHDSSOLFDWLRQ LQGLFDWHVWKDWWKHVRQJZDVFRPSOHWHGLQ +RZHYHUWKH UHFRUGLQJRIWKHVRQJGHSRVLWHGZLWKKLVDSSOLFDWLRQZDVPDGH LQ )XUWKHUPRUHDOWKRXJKSODLQWLIIWHVWLILHGGXULQJKLV GHSRVLWLRQWKDWKLV UHFRUGLQJZDVLGHQWLFDOWRWKHYHUVLRQ RIWKHVRQJFUHDWHGLQ KHFRXOGQRWUHIHUWRWKHRULJLQDO YHUVLRQRIWKHVRQJZKHQKHPDGHWKH UHFRUGLQJEHFDXVH KHGLGQRWSRVVHVVDFRS\RIDUHFRUGLQJWKDWKHPDGHDWWKH WLPHRIWKHVRQJjVFUHDWLRQ+HDOVRWHVWLILHGWKDWKHKDGQRW NHSWDZULWWHQFRS\RIWKHVRQJ 6WHYLH :RQGHU ZKR KDV HQMR\HG D OHQJWK\ FDUHHU DV D VRQJZULWHUDQGUHFRUGLQJDUWLVWUHOHDVHGDVRQJFDOOHG)RU

 ,Q WKH FRXUVH RI WKLV OLWLJDWLRQ SODLQWLIIjV UHFROOHFWLRQ DERXW ZKHQ KH FUHDWHG )RU <RXU /RYH KDV VKLIWHG :KLOH KLV FRS\ULJKW DSSOLFDWLRQ LQGLFDWHV WKDW WKH VRQJ ZDV ZULWWHQ LQ   SODLQWLII ODWHU FODLPHG WKDW KH EHJDQ ZRUNLQJ RQ WKH VRQJ LQ WKH ODWH  V DQG UHFRUGHG LW LQ   *LYHQ WKH SURFHGXUDO SRVWXUH RI WKH FDVH ZH ZLOO mYLHZ WKH IDFWXDO HYLGHQFH DQG GUDZ DOO UHDVRQDEOH LQIHUHQFHV LQ IDYRU RI WKH QRQPRYLQJ SDUW\l 'H3LHUR Y &LW\ RI 0DFHGRQLD  )G   WK &LU   *LYHQ RXU KROGLQJ LQ WKLV FDVH ZKHWKHU WKH VRQJ ZDV FUHDWHG LQ   RU   GRHV QRW DIIHFW WKH RXWFRPH  &ROHVHWDOY 1RV    1RV    &ROHVHWDOY :RQGHUHWDO :RQGHUHWDO

<RXU /RYH LQ   RQ WKH DOEXP &RQYHUVDWLRQ 3HDFH WHVWLPRQ\LVDOVRKLJKO\GLVWXUELQJ7KLVLVSDUWLFXODUO\ :RQGHUREWDLQHGDSXEOLVKLQJFRS\ULJKWRIWKHVRQJLQ  VR JLYHQ WKDW &ROHV FKDQJHG WKH GDWHV LQ UHVSRQVH WR DQGWKHIROORZLQJ\HDU0RWRZQ5HFRUG&RPSDQ\DFTXLUHG HYLGHQFH DGGXFHG E\ 'HIHQGDQWV WKDW :RQGHU KDG DFRS\ULJKWLQWKHVRXQGUHFRUGLQJIURP&RQYHUVDWLRQ3HDFH FUHDWHG KLV VRQJ SULRU WR WKH FUHDWLRQ GDWH DOOHJHG IRU $OWKRXJKKHKDGQRWFRS\ULJKWHGWKHVRQJXQWLOPXFKODWHU &ROHVjYHUVLRQRI)RU<RXU/RYHLQWKH&RPSODLQW :RQGHUZDVLQYROYHGLQDQXPEHURIUHFRUGLQJVRIWKHVRQJ WKDWGDWHIURPWKHHDUO\ VLQFOXGLQJWZRPDGHLQ$XJXVW /DVWO\ WKH FRXUW ILQGV WKDW FRQVLGHUDWLRQV RI   FRPSHQVDWLRQ GHWHUUHQFH DQG WKH REMHFWLYH RI WKH &RS\ULJKW$FWZHLJKLQIDYRURIDZDUGLQJDWWRUQH\IHHV ,Q KLV ODZVXLW ILOHG LQ WKH GLVWULFW FRXUW LQ   &ROHV $QDZDUGLQWKLVFDVHZLOOGHWHUZRXOGEHSODLQWLIIVIURP FRQWHQGVWKDW:RQGHUj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jVIHHV FODLP  ILUVW WKDW KH KDG RZQHUVKLS RI D YDOLG FRS\ULJKW VHFRQGWKDWDQRWKHUSHUVRQFRSLHGDSURWHFWHGLQWHUHVWLQWKH ,Q DQ\ FLYLO DFWLRQ XQGHU WKLV WLWOH WKH FRXUW LQ LWV ZRUN2UGHUsXQHDW FLWLQJ)HLVW3XEOjQV,QFY GLVFUHWLRQ PD\ DOORZ WKH UHFRYHU\ RI IXOO FRVWV E\ RU 5XUDO 7HO 6HUY &R   86       :KLOH DJDLQVW DQ\ SDUW\ RWKHU WKDQ WKH 8QLWHG 6WDWHV RU DQ FRS\ULJKWSURWHFWLRQGDWHVIURPWKHWLPHWKDWDQDUWLVWFUHDWHV RIILFHU WKHUHRI  ([FHSW DV RWKHUZLVH SURYLGHG E\ WKLV WLWOHWKHFRXUWPD\DOVRDZDUGDUHDVRQDEOHDWWRUQH\ VIHH WRWKHSUHYDLOLQJSDUW\DVSDUWRIWKHFRVWV  7KH GLVWULFW FRXUW SHUPLWWHG *ZHQGRO\Q 'DQLOHV WR LQWHUYHQH EDVHG  86& †   $V WKH GLVWULFW FRXUW UHFRJQL]HG WKH XSRQ KHU FRQWHQWLRQ WKDW &ROHV FRQYH\HG KLV LQWHUHVW LQ WKH VRQJ WR KHU LQ   %HFDXVH KHU LQWHUHVWV FRLQFLGH ZLWK WKRVH RI &ROHV WKH\ DUH 6XSUHPH &RXUW KDV H[SOLFLWO\ H[WHQGHG WKLV VHFWLRQ WR FROOHFWLYHO\ UHIHUUHG WR DV mSODLQWLIIl LQ WKLV RSLQLRQ GHIHQGDQWV  )RJHUW\ Y )DQWDV\ ,QF  86       6XFK IHHV DUH VXEMHFW WR WKH GLVFUHWLRQ RI WKH WULDO  FRXUW DQG VKRXOG EH EDVHG XSRQ WKH IDFWRUV OLVWHG LQ WKH :HOO LQWR WKLV OLWLJDWLRQ SODLQWLII SURGXFHG D UHFRUGLQJ RI )RU <RXU /RYH WKDW DOOHJHGO\ GDWHV IURP   7KH GLVWULFW FRXUW TXLWH ULJKWO\ GLVWULFW FRXUWjV RUGHU VXFK DV IULYRORXVQHVV RI WKH FODLP GLVPLVVHG WKLV UHFRUGLQJ DV LUUHOHYDQW WR WKH SURFHHGLQJV 7KH   PRWLYDWLRQUHDVRQDEOHQHVVDQGGHWHUUHQFH,G86DW UHFRUGLQJ ZDV IRXQG DPRQJ WKH SRVVHVVLRQV RI SODLQWLIIjV EURWKHU ZKHUH Q  LW KDG UHPDLQHG VLQFH LW ZDV PDGH 7KHUHIRUH LW LV LPSRVVLEOH WR DUJXH WKDW WKLV UHFRUGLQJ FRXOG KDYH EHHQ KHDUG OHW DORQH EHHQ DSSURSULDWHG E\ :RQGHU 0RUHRYHU WKH FRS\ULJKW UHJLVWUDWLRQ DW LVVXH PDNHV QR PHQWLRQ *LYHQWKHGHIHUHQFHWKDWZHPXVWSD\WRWKHGLVFUHWLRQRI RI WKLV   UHFRUGLQJ WKHGLVWULFWFRXUWLQWKHDZDUGRIDWWRUQH\jVIHHVZHFDQQRW  &ROHVHWDOY 1RV    1RV    &ROHVHWDOY  :RQGHUHWDO :RQGHUHWDO

EHFDXVH WKH FRXUW GHFLGHG 'HIHQGDQWVj 0RWLRQ IRU DQRULJLQDOZRUNWKDWPD\EHFRS\ULJKWHGVXFKDVDVRQJD 6XPPDU\sXGJPHQWRQDQRYHOOHJDOLVVXH7KHFRXUW FDXVHRIDFWLRQIRULQIULQJHPHQWFDQQRWEHHQIRUFHGXQWLOWKH ILQGV WKLV QRW WR EH WKH FDVH  $ YDOLG FRS\ULJKW DUWLVW DFWXDOO\ UHJLVWHUV WKH FRS\ULJKW SXUVXDQW WR WKH UHJLVWUDWLRQ LV DQ HOHPHQW RI D SULPD IDFLH FDVH RI UHTXLUHPHQWVRIWKH&RS\ULJKW$FW86&† D  FRS\ULJKWLQIULQJHPHQWDQGHVWDEOLVKLQJWKDWDFRS\RI WKHDOOHJHGO\LQIULQJHGZRUNKDVEHHQGHSRVLWHGZLWKWKH $PRQJ WKH UHTXLUHPHQWV RI FRS\ULJKW UHJLVWUDWLRQ LV D &RS\ULJKW 2IILFH KDV ORQJ EHHQ D UHTXLUHPHQW IRU UHTXLUHPHQWWKDWDQDSSOLFDWLRQLQFOXGHDFRS\RIWKHZRUN HVWDEOLVKLQJDYDOLGFRS\ULJKWUHJLVWUDWLRQ,WLVWUXHWKDW 86&† E ,QWKLVFDVHGHIHQGDQWVPDLQWDLQWKDW WKHFRXUWKDVEDVHGLWVGHFLVLRQRQFDVHVRXWVLGHRIWKH SODLQWLIIIDLOHGWRREWDLQDYDOLGFRS\ULJKWRID UHFRUGLQJ 6L[WK&LUFXLW KRZHYHUVXFKFDVHVZHUHGLUHFWO\RQSRLQW RI)RU<RXU/RYHEHFDXVHWKHUHFRUGLQJVXEPLWWHGZLWKKLV ZLWK WKH IDFWV RI WKLV FDVH  ,Q RSSRVLQJ 'HIHQGDQWVj DSSOLFDWLRQ ZKLFK GDWHV IURP   ZDV D UHFRQVWUXFWLRQ 0RWLRQIRU6XPPDU\sXGJPHQW3ODLQWLIIVGLGQRWSUHVHQW UDWKHUWKDQDFRS\RIWKHHDUOLHUUHFRUGLQJ DQ\FDVHODZIURPWKLVRUDQ\RWKHUFLUFXLWZKLFKZDV GLUHFWO\RQSRLQWDQGZKLFKVXSSRUWHGWKHLUSRVLWLRQWKDW $VPHQWLRQHGHDUOLHUWKHGLVWULFWFRXUWUHOLHGKHDYLO\RQD &ROHVjFRS\ULJKWUHJLVWUDWLRQZDVYDOLGGHVSLWHWKHIDFW FDVH IURP WKH 1LQWK &LUFXLW.RGDGHN VXSUD WR MXVWLI\ LWV WKDW &ROHV GLG QRW GHSRVLW D FRS\ RI WKH DOOHJHGO\ JUDQW RI VXPPDU\ MXGJPHQW WR GHIHQGDQWV  ,Q WKDW FDVH LQIULQJHGZRUNDQGGLGQRWHYHQRZQDQ\FRSLHVRIWKH SODLQWLII DOOHJHG WKDW KH PDGH QXPHURXV GUDZLQJV RI WKH DOOHJHGO\LQIULQJHGZRUN FDUWRRQ FKDUDFWHUV m%HDYLV DQG %XWWKHDGl EHIRUH WKH WHOHYLVLRQVKRZRIWKHVDPHQDPHZDVDLUHG,Q WZR 7KHFRXUWDOVRILQGV3ODLQWLIIVjPRWLYDWLRQLQEULQJLQJ \HDUVDIWHUWKHVKRZZDVILUVWEURDGFDVWSODLQWLIIDSSOLHGIRU WKLVFDVHVXVSHFW3ODLQWLIIVGRQRWGLVSXWHWKDWEHIRUH DQGREWDLQHGDFHUWLILFDWHRIUHJLVWUDWLRQIURPWKH&RS\ULJKW &ROHVILOHGWKHLQVWDQWODZVXLWKLVFRXQVHOFRPPXQLFDWHG 2IILFH+LVDSSOLFDWLRQLQGLFDWHGWKDWWKHGDWHRIFUHDWLRQZDV ZLWK:RQGHUjVRIILFHDQGWKUHDWHQHGWRVXHLI:RQGHU    KRZHYHU WKH GUDZLQJV VXEPLWWHG SXUVXDQW WR WKH GLGQRWVHWWOH0RUHRYHUVKRUWO\DIWHUWKHODZVXLWZDV GHSRVLWUHTXLUHPHQWRIWKH &RS\ULJKW$FWZHUHPDGHIURP ILOHG3ODLQWLIIDQGKLVDWWRUQH\ERWKDSSHDUHGRQDORFDO PHPRU\LQ DIWHUSODLQWLIIKDGVHHQWKHWHOHYLVLRQVKRZ WHOHYLVLRQ QHZV SURJUDP LQ &OHYHODQG DQG DFFXVHG :RQGHURIVWHDOLQJ3ODLQWLIIjVVRQJ7KHFRXUWGRHVQRW /RRNLQJWRLWVHDUOLHUGHFLVLRQLQ6HLOHUY/XFDVILOP/WG PHDQWRVXJJHVWWKDWSDUWLHVRUWKHLUFRXQVHOVKRXOGEH )G WK&LU  WKHFRXUWRIDSSHDOVQRWHGWKDW SUHFOXGHGIURPFRPPXQLFDWLQJZLWKWKHPHGLDDERXWD WKHUHZDVDGLVWLQFWLRQEHWZHHQWKHERQDILGHFRSLHVRIDQ ODZVXLW RU IURP YLJRURXVO\ DWWHPSWLQJ WR UHVROYH D RULJLQDO ZRUN UHTXLUHG E\  86& †  E  DQG GLVSXWHEHIRUHILOLQJVXLW+RZHYHULQOLJKWRIWKHIDFW UHFRQVWUXFWLRQV  .RGDGHN  )G DW   'HVSLWH WKDWWKLVFDVHZDVREMHFWLYHO\XQUHDVRQDEOHWKHWDFWLFV SODLQWLIIjVFRQWHQWLRQZKLFKLVVLPLODUWRWKHRQHDGYDQFHGE\ DQGVWUDWHJLHVSXUVXHGE\3ODLQWLIIDQGKLVDWWRUQH\VFDQ SODLQWLII LQ WKLV FDVH WKDW KH FRXOG UHSURGXFH mYLUWXDOO\ EH LQWHUSUHWHG DV VHHNLQJ WR IRUFH D VHWWOHPHQW ZLWK D LGHQWLFDOl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

SXUSRVHRIFHUWDLQW\LQREWDLQLQJFRS\ULJKWUHJLVWUDWLRQ :KLOHWKHUXOHWKDWZHDGRSWPD\VHHPKDUVKLWDYRLGVWKH VXFKUHSURGXFWLRQVDUHVLPSO\LQVXIILFLHQW$JDLQ6HLOHU IDFWXDOGLVSXWHVRYHUFUHDWLRQGDWHVWKDWDUHRQYLYLGGLVSOD\ KHOGWKDW†SHUPLWVWKHGHSRVLWRImERQDILGHFRSLHV LQWKLVFDVH7KHUXOHSHUPLWVDQDUWLVWWRSURWHFWDQRULJLQDO RI WKH RULJLQDO ZRUN RQO\l  ,G  7KLV PHDQV WKDW DQ\ VRQJDJDLQVWSRWHQWLDOLQIULQJHPHQWE\UHJLVWHULQJWKHRULJLQDO mFRS\l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jV GUDZLQJVZHUHPDGHIURPKLVPHPRU\ SURWHFWWKHPVHOYHVDJDLQVWFODLPVRIFRS\ULJKWLQIULQJHPHQW RIWKH GUDZLQJV7KH\ZHUHQRWPDGHE\GLUHFWO\ RULIQHFHVVDU\HQIRUFHWKHLURZQFRS\ULJKWV%HFDXVHKH UHIHUULQJ WR WKH RULJLQDOV RU ERQD ILGH FRSLHV RI WKH UHWDLQHGFRSLHVRI)RU<RXU/RYHWKDWGDWHGIURP 6WHYLH RULJLQDOV:HKROGWKDWWKH GUDZLQJVDUHPHUHO\ :RQGHU ZDV DEOH WR SUHYDLO LQ WKLV DFWLRQ HYHQ WKRXJK KH mUHFRQVWUXFWLRQVl DQG QRW DSSURSULDWH mFRSLHVl RI WKH REWDLQHGKLVFRS\ULJKWRIWKHVRQJDIWHUSODLQWLII6LQFH&ROHV   GUDZLQJV IRU SXUSRVHV RI REWDLQLQJ D YDOLG IDLOHGWRUHWDLQDFRS\ RI KLV  UHFRUGLQJKHFRXOGQRW FHUWLILFDWHRIFRS\ULJKWUHJLVWUDWLRQ7KXV.RGDGHNGLG VDWLVI\ WKH GHSRVLW UHTXLUHPHQW RI †  $FFRUGLQJO\ WKH QRWSURSHUO\UHFHLYHDFRS\ULJKWUHJLVWUDWLRQLQWKH  GLVWULFW FRXUW SURSHUO\ JUDQWHG VXPPDU\ MXGJPHQW WR GUDZLQJVDQGKLVLQIULQJHPHQWDFWLRQLVIRUHFORVHG GHIHQGDQWV ,GDW6LPLODUO\LQWKHFDVHEHIRUHXVKDG&ROHVEHHQ ,,, DEOH WR HVWDEOLVK WKDW KH PDGH WKH   UHFRUGLQJ DIWHU OLVWHQLQJWRDQDXGLRFRS\RIKLV UHQGLWLRQRI)RU<RXU 7KHGLVWULFWFRXUWIRXQGSODLQWLIIV&ROHVDQG'DQLOHVMRLQWO\ /RYH KH FRXOG KDYH PHW WKH GHSRVLW UHTXLUHPHQW DQG KLV DQG VHYHUDOO\ OLDEOH IRU  LQ DWWRUQH\jV IHHV IRU FRS\ULJKW ZRXOG EH YDOLG IURP WKH GDWH OLVWHG RQ KLV  LQWD[DEOHFRVWVDQGIRULQQRQWD[DEOH DSSOLFDWLRQ/LNHZLVHKDGKHPDGHKLV UHFRUGLQJDIWHU FRVWV$OWKRXJKWKHVHDZDUGVDUHKLJKWKH\UHIOHFWWKHGLVWULFW UHYLHZLQJDWHDUVKHHWRURWKHUZULWWHQVXPPDU\WKDWGDWHG FRXUWjVGHFLVLRQWRUHGXFHWKHPE\ILIW\SHUFHQWIRUHTXLWDEOH IURP KHFRXOGKDYHVDWLVILHGWKHGHSRVLWUHTXLUHPHQW UHDVRQV  ,Q PDNLQJ LWV IHH DZDUG WKH FRXUW SURYLGHG WKH /LNHWKHSODLQWLIILQ.RGDGHNKRZHYHU&ROHVGLGQRWUHIHUWR IROORZLQJUDWLRQDOH WKH RULJLQDO ZRUN LQ SURGXFLQJ WKH UHFRUGLQJ RI )RU <RXU /RYHWKDWKHWKHQGHSRVLWHGZLWKKLVFRS\ULJKWDSSOLFDWLRQ $OWKRXJKWKH3ODLQWLIIVjFODLPVDQGSURVHFXWLRQRIWKLV 7KXVWKH UHFRUGLQJPXVWEHYLHZHGDVDUHFRQVWUXFWLRQ FDVHZHUHQRWQHFHVVDULO\IULYRORXVWKH\ZHUHREMHFWLYHO\ RQO\QRWDFRS\DQGWKHUHIRUHKHFRXOGQRWUHFHLYHDYDOLG XQUHDVRQDEOH  3ODLQWLIIV DUJXH WKH\ ZHUH QRW FRS\ULJKWUHJLVWUDWLRQLQWKH YHUVLRQRIWKHVRQJ XQUHDVRQDEOHLQSXUVXLQJWKHLUFODLPVDJDLQVW'HIHQGDQWV