5(&200(1'(' )25 )8//7(;7 38%/,&$7,21  8QLWHG6WDWHVY/XFDV 1R  3XUVXDQW WR 6L[WK &LUFXLW 5XOH 

(/(&7521,& &,7$7,21  )(' $SS 3 WK &LU

PD\ DUJXDEO\ KDYH FRPSHOOHG  /XFDV  WR  UHOLQTXLVK  KLV )LOH 1DPH DS

FRQVWLWXWLRQDOULJKWWRWULDOE\MXU\ 81,7('67$7(6&28572)$33($/6 7KH PDMRULW\ FRQWHQGV WKDW EHFDXVH DOO SDUWLHV NQHZ WKH PD[LPXPTXDQWLW\RIGUXJVWKDWFRXOGEHDWWULEXWHGWR/XFDV )257+(6,;7+&,5&8,7 IHOOXQGHU† E  $ WKHGLVWULFWFRXUWSURSHUO\VWDWHGWKH BBBBBBBBBBBBBBBBB SRWHQWLDOSHQDOW\WKDW/XFDVIDFHGZKHQKHHQWHUHGKLVJXLOW\ SOHD 81,7(' 67$7(6 2) $0(5,&$ ; +RZHYHU HYHQ FRQFHGLQJ WKDW /XFDV ZDV DZDUH RI WKH 3ODLQWLII$SSHOOHH  SRVVLELOLW\ RI VHQWHQFLQJ SXUVXDQW WR † E  $  WKH  GLVWULFWFRXUWZKROO\IDLOHGWRLQVWUXFW/XFDVDVWRWKHUDQJHRI  1R  DSSOLFDEOHSHQDOWLHV$VVXFKLQVXEVWDQFHDQGVFRSHWKH Y  GLVWULFW FRXUWjV LQVWUXFWLRQ DV WR VHQWHQFLQJ ZDV FOHDUO\ !  HUURQHRXV 0$5&86 /$9$/( /8&$6  'HIHQGDQW$SSHOODQW  $FFRUGLQJO\DV WKHGLVWULFWFRXUWjVHUURQHRXVLQVWUXFWLRQ SUHYHQWHG/XFDVIURPNQRZLQJO\DQGYROXQWDULO\ZDLYLQJKLV 1 FRQVWLWXWLRQDOULJKWV,ZRXOGUHYHUVH/XFDVjVFRQYLFWLRQ $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH:HVWHUQ'LVWULFWRI.HQWXFN\DW/RXLVYLOOH 1R n&KDUOHV56LPSVRQ,,, 'LVWULFWsXGJH $UJXHG sXO\ 'HFLGHGDQG)LOHG )HEUXDU\ %HIRUH 6,/(5DQG*,/0$1&LUFXLWsXGJHV '21$/' 'LVWULFWsXGJH BBBBBBBBBBBBBBBBB &2816(/ $5*8('   3DWULFN s %RXOGLQ $66,67$17 )('(5$/ 38%/,&'()(1'(5/RXLVYLOOH.HQWXFN\IRU$SSHOODQW & 'HDQ )XUPDQ sU $66,67$17 81,7(' 67$7(6

7KH +RQRUDEOH %HUQLFH % 'RQDOG 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH :HVWHUQ 'LVWULFW RI 7HQQHVVHH VLWWLQJ E\ GHVLJQDWLRQ

  8QLWHG6WDWHVY/XFDV 1R  1R  8QLWHG6WDWHVY/XFDV 

$77251(< /RXLVYLOOH .HQWXFN\ IRU $SSHOOHH BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 21%5,() 3DWULFNs%RXOGLQ$66,67$17)('(5$/ 38%/,&'()(1'(5/RXLVYLOOH.HQWXFN\IRU$SSHOODQW &21&855,1*,13$57',66(17,1*,13$57 0DUN/0LOOHU7HUU\0&XVKLQJ$66,67$1781,7(' BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 67$7(6$77251(<6/RXLVYLOOH.HQWXFN\IRU$SSHOOHH '21$/' 'LVWULFW sXGJH  , DJUHH ZLWK WKH PDMRULW\jV *,/0$1sGHOLYHUHGWKHRSLQLRQRIWKHFRXUW6,/(5s GHFLVLRQUHJDUGLQJWKHGLVWULFWFRXUWjVHUURULQILQGLQJWKDW SS   DQG '21$/' ' s SS    GHOLYHUHG /XFDVFRQVWUXFWLYHO\SRVVHVVHGWKHILUHDUP:LWKUHVSHFWWR VHSDUDWHRSLQLRQVFRQFXUULQJLQSDUWDQGGLVVHQWLQJLQSDUW WKHGLVWULFWFRXUWjVFRPSOLDQFHZLWK)5&ULP3 5XOH  KRZHYHU,UHVSHFWIXOO\GLVVHQW BBBBBBBBBBBBBBBBB %HIRUH DFFHSWLQJ /XFDVjV  SOHD WR WKH FKDUJHV LQ WKH 23,1,21 LQGLFWPHQWWKHGLVWULFWFRXUWZDVUHTXLUHGE\5XOHWR BBBBBBBBBBBBBBBBB GHWHUPLQHWKDW/XFDVXQGHUVWRRGDQ\DSSOLFDEOHPLQLPXP DQG  PD[LPXP  SHQDOWLHV SURYLGHG  E\ ODZ  $V /XFDVjV 521$/'/((*,/0$1&LUFXLWsXGJH0DUFXV/DYDOH LQGLFWPHQW FKDUJHG GUXJ SRVVHVVLRQ XQGHU † D   EXW /XFDV SOHG JXLOW\ WR DWWHPSWLQJ WR GLVWULEXWH FRFDLQH EDVH IDLOHGWRVSHFLI\GUXJTXDQWLW\WKHRQO\SHQDOW\DYDLODEOH FUDFN FRFDLQH  DQG FRQVSLULQJ WR FRPPLW WKDW RIIHQVH LQ WR WKH FRXUW  DW  WKH SOHD KHDULQJ ZDV SURYLGHG E\ YLRODWLRQRI86&† D  86&†DQG † E  &  ZKLFK FDUULHG QR PLQLPXP DQG D \HDU 86&†7KHGLVWULFWFRXUWVHQWHQFHG/XFDVWRPRQWKV PD[LPXPVHQWHQFH&RQVHTXHQWO\LQLQVWUXFWLQJ/XFDVWKDW LQSULVRQDQGDILYH\HDUWHUPRIVXSHUYLVHGUHOHDVH/XFDV KHIDFHGD\HDUPLQLPXPDQGDPD[LPXPOLIHVHQWHQFH QRZDSSHDOVDUJXLQJWKDW  KLVJXLOW\SOHDZDVLQYROXQWDULO\ XQGHU† E  $ WKHGLVWULFWFRXUWGHSULYHG/XFDVRIWKH DQG XQNQRZLQJO\ PDGH   KLV VHQWHQFH LV LQ YLRODWLRQ RI RSSRUWXQLW\WRPDNHDNQRZLQJDQGLQIRUPHGSOHD0RUH $SSUHQGLY1HZsHUVH\86    WKHGLVWULFW VSHFLILFDOO\WKHGLVWULFWFRXUWPLVOHG/XFDVZLWKLWVPDWHULDO FRXUWHUUHGLQFDOFXODWLQJWKHTXDQWLW\RIGUXJVDWWULEXWDEOHWR VWDWHPHQWWKDWKHFRXOGIDFHDVHQWHQFHXSWRDQGLQFOXGLQJ KLPDQG  WKHGLVWULFWFRXUWHUUHGLQHQKDQFLQJKLVVHQWHQFH OLIHLQSULVRQ7KHGLVWULFWFRXUWWKHUHIRUHFRPPLWWHGFOHDU IRU SRVVHVVLRQ RI D ILUHDUP LQ FRQQHFWLRQ ZLWK D GUXJ HUURU WUDIILFNLQJ RIIHQVH  )RU WKH UHDVRQV VHW IRUWK EHORZ ZH $)),50 WKH GLVWULFW FRXUWjV MXGJPHQW RI FRQYLFWLRQ EXW %HFDXVHWKHGLVWULFWFRXUWSODFHG/XFDVLQWKHSRVLWLRQRI 5(9(56( DQG 5(0$1' WKH FDVH IRU UHVHQWHQFLQJ KDYLQJWRPDNHDSOHDZLWKRXWDOORIWKHPDWHULDOLQIRUPDWLRQ FRQVLVWHQWZLWKWKLVRSLQLRQ ,ILQGWKDWYROXQWDULQHVVZDVQHJDWHG7KHPDMRULW\UHDVRQV WKDWEHFDXVHKHGLGQRWUHFHLYHDVHQWHQFHLQH[FHVVRIWKH ,%$&.*5281' \HDUPD[LPXPWKHFRXUWjVHUURULVKDUPOHVV)URPDSXUHO\ DFDGHPLFSHUVSHFWLYHWKDWPD\WKHFDVH+RZHYHULQWKHUHDO $ )DFWXDOEDFNJURXQG OLIHVLWXDWLRQRIDGHIHQGDQWZKRUHDVRQDEO\EHOLHYHVWKDWKH 2Q0DUFK /XFDVKDGDWHOHSKRQHFRQYHUVDWLRQ ULVNV  IDFLQJ  WKH  SRVVLEOH  ORVV  RI  OLEHUW\  IRUHYHU WKH ZLWKKLVIULHQG%ULDQ+RUWRQZKRZDVSODQQLQJWRGULYHIURP FKRLFHVKHPDNHVZLOOKDUGO\EHDFDGHPLF7KXV/XFDVPD\ &KLFDJR,OOLQRLVWR/XFDVjVKRPHLQ/RXLVYLOOH.HQWXFN\ KDYHUHDVRQDEO\PDGHYDVWO\GLIIHUHQWGHFLVLRQVKDGKHEHHQ /XFDV DVNHG +RUWRQ LI KH ZRXOG EULQJ /XFDV D SDFNDJH LQIRUPHGWKDWWKHULVNVZHUHFDSSHGDWDWLPHFHUWDLQLH WHOOLQJ +RUWRQ ZKHQ DQG ZKHUH WKH SDFNDJH ZRXOG EH \HDUVDVRSSRVHGWROLIH,QGHHGWKHHUURQHRXVLQVWUXFWLRQ  8QLWHG6WDWHVY/XFDV 1R  1R  8QLWHG6WDWHVY/XFDV 

†  F  IRU XVLQJ DQG FDUU\LQJ D ILUHDUP GXULQJ D GUXJ GHOLYHUHG+RUWRQDJUHHG$WWKHPHHWLQJSODFHLQ&KLFDJR WUDIILFNLQJRIIHQVH2QHGHIHQGDQW:LOOLH&ULWWRQDVVHUWHG DQ DOOHJHGO\ XQNQRZQ SHUVRQ JDYH +RUWRQ VRPH SDSHUV WKDW KLV FRQYLFWLRQ XQGHU †  F  VKRXOG EH UHYHUVHG IRU ZKLFK KH KDG H[SHFWHG WR UHFHLYH DQG D EOXH SODVWLF EDJ LQVXIILFLHQF\RIHYLGHQFH$OWKRXJK&ULWWRQZDVWKHGULYHU ZKLFK+RUWRQDJUHHGWRWDNHWR/XFDVLQH[FKDQJHIRU RIWKHYDQLQZKLFKKHDQGWZRRWKHUVZHUHGULYLQJLWZDVQRW +RUWRQ SODFHG WKH SDSHUV LQ WKH FDUjV SDVVHQJHU VHDW DQG UHJLVWHUHGWRKLP0RUHRYHUKHZDVFKDUJHGZLWKWKHXVHDQG FRQFHDOHGWKHSODVWLFEDJLQWKHOLQLQJRIWKHWUXQNjVLQWHULRU FDUU\LQJRIDFDOLEHUKDQGJXQIRXQGLQDVXLWFDVHORFDWHG LQ WKH SDVVHQJHU FRPSDUWPHQW RI WKH YDQ DOWKRXJK QR :KLOH GULYLQJ WR /RXLVYLOOH +RUWRQ ZDV VWRSSHG IRU HYLGHQFH GLUHFWO\ OLQNHG WKH KDQGJXQ WR KLP  2XU FRXUW VSHHGLQJE\DQ,QGLDQDVWDWHWURRSHU+RUWRQFRQVHQWHGWRD DIILUPHG WKH FRQYLFWLRQ XQGHU WKH mIRUWUHVVl WKHRU\ IURP VHDUFK RI KLV FDU  7KH WURRSHU GLVFRYHUHG WKH SODVWLF EDJ 8QLWHG6WDWHVY+HQU\)G   WK&LU   ZKLFKFRQWDLQHG JUDPVRIFUDFNFRFDLQHGLYLGHGLQWR 7KXV WKLV FRXUW SULPDULO\ GLVFXVVHG WKH  SRVVHVVLRQ RI WKH ILYHVPDOOHUEDJVLQWKHWUXQNjVOLQLQJ ILUHDUPmGXULQJDQGLQUHODWLRQWRlGUXJWUDIILFNLQJFULPHVDV UHTXLUHG XQGHU WKH VWDWXWH  ,W KDG QR SUREOHP ILQGLQJ WKDW ,Q H[FKDQJH IRU D UHGXFWLRQ LQ KLV SRWHQWLDO VHQWHQFH &ULWWRQMRLQWO\SRVVHVVHGWKHFDOLEHUKDQGJXQZLWK/HVOLH +RUWRQDJUHHGWRFRRSHUDWHZLWKWKHDXWKRULWLHV$JHQWVIURP /LYLQJVWRQ ZKR RZQHG WKH  FDOLEHU KDQGJXQ 6HH DOVR WKH'UXJ(QIRUFHPHQW$GPLQLVWUDWLRQDQGWKH,QGLDQDVWDWH 8QLWHG6WDWHVY7UDYLV )G WK&LU  SROLFHSODFHGDVXEVWLWXWHSDFNDJHFRQVLVWLQJRIJUDPVRI FRQYLFWLRQXQGHU86&† XSKHOGIRUILUHDUPVIRXQG FUDFNFRFDLQHDQGVRDSVKDYLQJVRQWRSRIWKHVSDUHWLUHLQ LQ D ORFNHG JORYH FRPSDUWPHQW ZLWKRXW SURRI WKDW WKH +RUWRQj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jVDSDUWPHQWSXUVXDQW WRDSURSHUO\DXWKRUL]HGVHDUFKZDUUDQW7KH\IRXQGGLJLWDO VFDOHVVL[KXQGUHGSODVWLFEDJJLHVZLWKWKHLUFRUQHUVFXWRXW DQGLQFDVK  8QLWHG6WDWHVY/XFDV 1R  1R  8QLWHG6WDWHVY/XFDV 

% 3URFHGXUDOEDFNJURXQG BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB /XFDV SOHG JXLOW\ RQ sXO\      $W KLV JXLOW\ SOHD &21&855,1*,13$57',66(17,1*,13$57 KHDULQJ WKH GLVWULFW FRXUW LQIRUPHG /XFDV WKDW KH IDFHG D BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB PDQGDWRU\PLQLPXPVHQWHQFHRIWHQ\HDUVDQGDPD[LPXP VHQWHQFHRIOLIHLPSULVRQPHQWIRUWKHFRXQWVWRZKLFKKHZDV 6,/(5&LUFXLWsXGJHFRQFXUULQJLQSDUWDQGGLVVHQWLQJLQ SOHDGLQJJXLOW\/XFDVj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† ' E   WKH RULJLQDOO\ SODFHG LQ WKH SODVWLF EDJV RU  JUDPV WKH SURVHFXWLRQPXVWSURYHE\DSUHSRQGHUDQFHRIWKHHYLGHQFH DPRXQWWKDWZDVDFWXDOO\LQWKHWUXQNRI+RUWRQj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†' E RIWKH8QLWHG6WDWHV6HQWHQFLQJ*XLGHOLQHV $VWKHPDMRULW\DJDLQFRUUHFWO\VWDWHVIURP8QLWHG6WDWHVY IRU SRVVHVVLQJ D ILUHDUP GXULQJ D GUXJ WUDIILFNLQJ RIIHQVH +D\HV1RVWR WR   UHVXOWLQJ LQ DQ DGMXVWHG RIIHQVH OHYHO RI   /XFDV WKHQ :/ DW  WK&LU6HSW   XQSXEOLVKHG UHFHLYHGDWKUHHOHYHOGRZQZDUGDGMXVWPHQWXQGHU†(RI WDEOHGHFLVLRQ WKLVFRXUWKDVIRXQGWKDWDGHIHQGDQWFRXOGEH WKH 8QLWHG 6WDWHV 6HQWHQFLQJ *XLGHOLQHV IRU DFFHSWDQFH RI FRQYLFWHGIRUSRVVHVVLRQRIDILUHDUPZKHQKHZDVWKHGULYHU UHVSRQVLELOLW\7KH365FRPELQHGWKLVDGMXVWHGRIIHQVHOHYHO DQGRQO\RFFXSDQWRIWKHYHKLFOHDQGWKHSURVHFXWLRQKDGQRW RI  ZLWK /XFDVjV FULPLQDO KLVWRU\ FDWHJRU\ RI ,,, DQG SUHVHQWHGHYLGHQFHWKDWWKHGHIHQGDQWHLWKHURZQHGWKHJXQRU UHFRPPHQGHG D VHQWHQFH RI LPSULVRQPHQW ZLWKLQ WKH WKHFDU,QWKHFDVHEHIRUHXV/XFDVDQGFRGHIHQGDQW'DYLG JXLGHOLQHVUDQJHRIPRQWKVIROORZHGE\DSHULRGRI %DNHUZHUHLQWKHYHKLFOHWRJHWKHU3RVVHVVLRQQRWRQO\PD\ VXSHUYLVHGUHOHDVHRIDWOHDVWILYH\HDUV EH FRQVWUXFWLYH EXW D GHIHQGDQW QHHG QRW KDYH H[FOXVLYH SRVVHVVLRQRISURSHUW\WREHIRXQGLQSRVVHVVLRQRILWsRLQW 2Q 'HFHPEHU    WKH GLVWULFW FRXUW FRQGXFWHG D SRVVHVVLRQZLOOVXIILFH6HH8QLWHG6WDWHVY&UDYHQ VHQWHQFLQJKHDULQJ/XFDVREMHFWHGWRWKHTXDQWLW\RIGUXJV )G  WK&LU   IRUZKLFKWKH365KHOGKLPDFFRXQWDEOHDQGWRWKHILUHDUPV HQKDQFHPHQW :LWK UHJDUG WR WKH TXDQWLW\ RI GUXJV WKH ,Q8QLWHG6WDWHVY&ULWWRQ)G    WK&LU JRYHUQPHQWSUHVHQWHGWKHHYLGHQFHGLVFRYHUHGLQWKHVHDUFK    WKLV FRXUW XSKHOG D FRQYLFWLRQ XQGHU  86&  8QLWHG6WDWHVY/XFDV 1R  1R  8QLWHG6WDWHVY/XFDV 

JORYH FRPSDUWPHQW ZDV HDVLO\ SRSSHG RSHQ XVLQJ D RI /XFDVjVDSDUWPHQW,QDGGLWLRQWKHSROLFHWHVWLILHGWKDW VFUHZGULYHUWKH\IRXQGRQWKHIORRURIWKHSDVVHQJHUVLGHRI SODVWLF EDJJ\ FRUQHUV DUH RIWHQ XVHG WR VHOO GUXJV VXFK DV WKHYHKLFOHDQGWKDWWKHJXQVZHUHORDGHGZLWKEXOOHWVWKDW FUDFNFRFDLQHDQGPDULMXDQD7KHSROLFHDFNQRZOHGJHGWKDW PDWFKHG WKH WZR ER[HV RI EXOOHWV IRXQG DW  (DVW WK  ZRXOG EX\ RQO\ RQH WR RQHDQGRQHKDOI RXQFHV RI 6WUHHW >D KRXVH DW ZKLFK WKH GHIHQGDQW OLYHG@l    :H FUDFNFRFDLQHDWWKHJRLQJUDWHEXWWKHJRYHUQPHQWSUHVHQWHG WKHUHIRUHILQGHDFKRIWKHVHFDVHVGLVWLQJXLVKDEOH WHVWLPRQ\WKDWGUXJGHDOHUVRIWHQZRUNRQFRQVLJQPHQW:LWK UHJDUGWRWKHILUHDUPHQKDQFHPHQWQRHYLGHQFHZDVSUHVHQWHG *LYHQWKHFRPSOHWHODFNRIHYLGHQFHWKDW/XFDVDFWXDOO\RU FRQFHUQLQJWKHRZQHUVKLSRIWKHJXQRUWKHYHKLFOHDQGQR FRQVWUXFWLYHO\ SRVVHVVHG WKH ILUHDUP WKDW ZDV LQ WKH FDUjV ILQJHUSULQWVKDGEHHQOLIWHGIURPWKHJXQ JORYH FRPSDUWPHQW ZH FRQFOXGH WKDW WKH GLVWULFW FRXUWjV ILQGLQJ WR WKH FRQWUDU\ ZDV FOHDUO\ HUURQHRXV  6HH 8QLWHG $IWHU KHDULQJ HYLGHQFH UHJDUGLQJ WKH TXDQWLW\ RI GUXJV 6WDWHVY*UHJRU\1RV   :/  LQYROYHGLQWKLVFDVHWKHGLVWULFWFRXUWFRQFOXGHGWKDW/XFDV DW  WK&LU'HF   XQSXEOLVKHGWDEOHGHFLVLRQ ZDV UHVSRQVLEOH IRU WKH   JUDPV RI FUDFN FRFDLQH WKDW KROGLQJWKDWWKHGLVWULFWFRXUWHUUHGLQDSSO\LQJWKHILUHDUP ZHUH RULJLQDOO\ SODFHG LQ WKH WUXQN RI +RUWRQjV FDU  ,W HQKDQFHPHQWZKHUHWKHJRYHUQPHQWSUHVHQWHGQRHYLGHQFH SURFHHGHGWRRYHUUXOHERWKRI/XFDVjVREMHFWLRQVWRWKH365 WKDWWKHGHIHQGDQWSRVVHVVHGWKHJXQRUNQHZWKDWWKHJXQZDV 7KH GLVWULFW FRXUW WKHQ VHQWHQFHG /XFDV WR  PRQWKV LQ ORFDWHG LQ WKH ERWWRP RI KLV FRGHIHQGDQWjV EDFNSDFN  SULVRQDQGDILYH\HDUWHUPRIVXSHUYLVHGUHOHDVH7KLVDSSHDO %HFDXVH WKH JRYHUQPHQW SUHVHQWHG QR HYLGHQFH UHJDUGLQJ IROORZHG RZQHUVKLS RI WKH FDU RU WKH JXQ DQG GLG QRW OLIW DQ\ ILQJHUSULQWVIURPWKHJXQDQGEHFDXVH/XFDVZDVQRWWKHVROH ,,$1$/<6,6 RFFXSDQWRIWKHFDUWKHJXQFRXOGMXVWDVHDVLO\KDYHEHHQ mSRVVHVVHGl E\ WKH FRGHIHQGDQW %DNHU DV E\ /XFDV WR VD\ $ 9DOLGLW\RI/XFDVjVJXLOW\SOHD QRWKLQJRIWKHSRVVLELOLW\WKDWLWZDVQRWSRVVHVVHGE\HLWKHU RIWKHP7KHGLVWULFW FRXUWWKHUHIRUHHUUHGLQDSSO\LQJWKH /XFDVjVILUVWDUJXPHQWRQDSSHDOLVWKDWKLVJXLOW\SOHDZDV WZROHYHOHQKDQFHPHQWXQGHU†' E  WR/XFDV QRW YDOLG EHFDXVH WKH GLVWULFW FRXUW SURYLGHG HUURQHRXV LQIRUPDWLRQUHJDUGLQJKLVSRWHQWLDOVHQWHQFHDWWKHJXLOW\SOHD ,,,&21&/86,21 KHDULQJ$FFRUGLQJWR/XFDVWKHGLVWULFWFRXUWYLRODWHG5XOH  F  RIWKH)HGHUDO5XOHVRI&ULPLQDO3URFHGXUHZKLFK )RU DOO RI WKH UHDVRQV VHW IRUWK DERYH ZH $)),50 WKH UHTXLUHV WKH MXGJH WR mLQIRUP WKH GHIHQGDQW RI    WKH GLVWULFWFRXUWjVMXGJPHQWRIFRQYLFWLRQEXW5(9(56(DQG PDQGDWRU\PLQLPXPSHQDOW\SURYLGHGE\ODZLIDQ\DQGWKH 5(0$1' WKH FDVH IRU UHVHQWHQFLQJ FRQVLVWHQW ZLWK WKLV PD[LPXPSRVVLEOHSHQDOW\SURYLGHGE\ODZl)HG5 RSLQLRQ &ULP3 F   $JXLOW\SOHDLVYDOLGRQO\mLILWLVHQWHUHGLQWHOOLJHQWO\DQG YROXQWDULO\l8QLWHG6WDWHVY/D\QH )G WK &LU   FLWLQJ %R\NLQ Y $ODEDPD   86     5XOHmLVGHVLJQHGWRDVVLVWWKHGLVWULFWMXGJHLQ PDNLQJ WKH FRQVWLWXWLRQDOO\ UHTXLUHG GHWHUPLQDWLRQ WKDW D GHIHQGDQW V JXLOW\ SOHD LV WUXO\ YROXQWDU\l  0F&DUWK\ Y 8QLWHG6WDWHV 86    %HFDXVH5XOH LQFOXGHVDKDUPOHVVHUURUSURYLVLRQKRZHYHUDYLRODWLRQRI  8QLWHG6WDWHVY/XFDV 1R  1R  8QLWHG6WDWHVY/XFDV 

5XOH  GRHV QRW UHTXLUH WKDW WKH SOHD EH YDFDWHG DQG WKH SODFHGLWLQKLVFDUmDERXWDZHHNEHIRUHKLVDUUHVWLQWHQGLQJ GHIHQGDQWEHJLYHQDQRSSRUWXQLW\IRUDQHZSOHDRUDWULDO WRWDNHLWWRDJXQVPLWKIRUUHSDLUl,GDW XQOHVV WKH HUURU DIIHFWV WKH GHIHQGDQWjV VXEVWDQWLDO ULJKWV )HG5&ULP3 K  SURYLGLQJWKDWm>D@Q\YDULDQFHIURP 1RUGRZHILQGWKHFDVHVUHOLHGXSRQE\WKHGLVVHQWRQWKLV WKH SURFHGXUHV UHTXLUHG E\ WKLV UXOH ZKLFK GRHV QRW DIIHFW LVVXHSHUVXDVLYH7KHSRVVLELOLW\RIDGHIHQGDQWEHLQJKHOG VXEVWDQWLDOULJKWVVKDOOEHGLVUHJDUGHGl 8QLWHG6WDWHVY6\DO DFFRXQWDEOH IRU D ILUHDUP GXH WR MRLQW SRVVHVVLRQ LV QRW )G   WK&LU   QRWLQJWKDWYLRODWLRQVRI UHOHYDQWLQWKHDEVHQFHRIHYLGHQFHWKDWHLWKHU%DNHURU/XFDV 5XOHDUHVXEMHFWWRDKDUPOHVVHUURUDQDO\VLV  KDG NQRZOHGJH WKDW WKH ILUHDUP ZDV LQ WKH JORYH FRPSDUWPHQW&I8QLWHG6WDWHVY&UDYHQ)G  $W/XFDVjVJXLOW\SOHDKHDULQJWKHGLVWULFWFRXUWLQIRUPHG  WK &LU    FRQFOXGLQJ WKDW WKH HYLGHQFH KLPWKDWWKHPDQGDWRU\PLQLPXPVHQWHQFHIRUWKHRIIHQVHVWR VXSSRUWHG &UDYHQjV FRQYLFWLRQ IRU XQODZIXO SRVVHVVLRQ RI ZKLFKKHZDVSOHDGLQJJXLOW\ZDVWHQ\HDUVDQGWKDWKHIDFHG ILUHDUPVZKHUH&UDYHQQRWRQO\KDGFRQVWUXFWLYHSRVVHVVLRQ DPD[LPXPSHQDOW\RIOLIHLPSULVRQPHQW/XFDVFRQWHQGV RI WKH KRXVH LQ ZKLFK WKH ILUHDUPV ZHUH IRXQG EXW DOVR WKDWWKLVVWDWHPHQWZDVHUURQHRXVDQGWKHUHIRUHYLRODWHG5XOH DGPLWWHGWKDWKHFROOHFWHGJXQVDQGZKHUHSK\VLFDOHYLGHQFH 7RVXSSRUWKLVDUJXPHQW/XFDVUHOLHVRQWKH6XSUHPH DQG WHVWLPRQ\ FRQQHFWHG &UDYHQ WR WKH URRP LQ ZKLFK WKH &RXUWjVGHFLVLRQLQ$SSUHQGLY1HZsHUVH\86 ILUHDUPV ZHUH IRXQG   ,Q IDFW &UDYHQ UHFRJQL]HG WKDW  ZKHUHWKH&RXUWKHOGWKDWm>R@WKHUWKDQWKHIDFWRID m>D@OWKRXJK SRVVHVVLRQ RI WKH UHVLGHQFH LV LQVXIILFLHQW WR SULRU FRQYLFWLRQ DQ\ IDFW WKDW LQFUHDVHV WKH SHQDOW\ IRU D HVWDEOLVK SRVVHVVLRQ RI DOO WKH FRQWHQWV RI WKH KRXVH WKH FULPH EH\RQG WKH SUHVFULEHG VWDWXWRU\ PD[LPXP PXVW EH JRYHUQPHQWjVHYLGHQFHZHQWPXFKIXUWKHUl,GDW VXEPLWWHGWRDMXU\DQGSURYHGEH\RQGDUHDVRQDEOHGRXEWl ,GDW  7KHILUHDUPVWKDWOHGWRWKHFRQYLFWLRQVLQ8QLWHG6WDWHVY &ULWWRQ)G  WK&LU  PRUHRYHUZHUHIRXQG 7KLV FRXUW KDV DSSOLHG $SSUHQGLjV KROGLQJ WR  86& QRWRQO\LQDVXLWFDVHORFDWHGLQWKHSDVVHQJHUFRPSDUWPHQWRI † E  ZKLFKGHWHUPLQHVWKHPD[LPXPDQGPLQLPXP WKHYDQEXWDOVRLQD0F'RQDOGjVUHVWDXUDQWEDJORFDWHGRQ SHQDOWLHVEDVHGRQWKHTXDQWLW\RIGUXJVIRUZKLFKDGHIHQGDQW WKHIORRURIWKHIURQWVHDWRIWKHYDQWKDW&ULWWRQZDVGULYLQJ LVDFFRXQWDEOH8QLWHG6WDWHVY5DPLUH])G ,GDW   $VDUHVXOWWKHTXHVWLRQRIZKHWKHU  WK &LU   KROGLQJ WKDW †  E  jV SUHVFULEHG &ULWWRQNQHZDERXWWKHSUHVHQFHRIWKHJXQVZDVQRWDQLVVXH PDQGDWRU\PLQLPXPSHQDOWLHVZKLFKDUHEDVHGLQSDUWXSRQ WKDWPHULWHGWKHFRXUWjVGLVFXVVLRQ,GDW   IRFXVLQJ WKHTXDQWLW\RIGUXJVLPSOLFDWH$SSUHQGL 8QLWHG6WDWHVY RQZKHWKHU&ULWWRQSRVVHVVHGWKHJXQVmGXULQJDQGLQUHODWLRQ 3DJH  )G   WK &LU   YDFDWLQJ WKH WRlDGUXJWUDIILFNLQJRIIHQVHUDWKHUWKDQRQZKHWKHU&ULWWRQ GHIHQGDQWjV VHQWHQFH EHFDXVH WKH TXDQWLW\ RI GUXJV WKDW NQHZ WKDW WKH JXQV H[LVWHG RU LI KH FRXOG EH OLQNHG WR WKH UHVXOWHGLQDKLJKHUPD[LPXPSHQDOW\ZDVQRWVXEPLWWHGWRD JXQV  MXU\DQGSURYHGEH\RQGDUHDVRQDEOHGRXEW  )LQDOO\DOWKRXJKWKHILUHDUPVLQ8QLWHG6WDWHVY7UDYLV /XFDVjV DUJXPHQW IDLOV KRZHYHU EHFDXVH WKH GLVWULFW )G WK&LU  ZHUHIRXQGLQWKHORFNHGJORYH FRXUWjVVWDWHPHQWUHJDUGLQJWKHPDQGDWRU\PLQLPXPDQGWKH FRPSDUWPHQWRIDFDUQRWUHJLVWHUHGWRWKHGHIHQGDQWDQGWKH PD[LPXP VHQWHQFHV IRU WKH RIIHQVHV WR ZKLFK /XFDV ZDV GHIHQGDQWGLGQRWSRVVHVVDNH\WRWKHJORYHFRPSDUWPHQW SOHDGLQJJXLOW\ZDVQRWHUURQHRXVDWWKHWLPHLWZDVPDGH DGGLWLRQDO HYLGHQFH VXSSRUWHG WKH GHIHQGDQWjV FRQYLFWLRQ :KHQ/XFDVSOHGJXLOW\WKLVFRXUWjVGHFLVLRQVUHTXLUHGWKH XQGHU †  F   ,G DW  m3ROLFH RIILFHUV KRZHYHU GLVWULFWFRXUWUDWKHUWKDQWKHMXU\WRGHWHUPLQHWKHTXDQWLW\RI WHVWLILHGWKDW7UDYLVUHJXODUO\GURYHWKH0RQWH&DUORWKDWWKH  8QLWHG6WDWHVY/XFDV 1R  1R  8QLWHG6WDWHVY/XFDV 

   ,I WKH JRYHUQPHQW VDWLVILHV WKLV EXUGHQ mD GUXJVIRUZKLFKDGHIHQGDQWZDVUHVSRQVLEOHXQGHU86& SUHVXPSWLRQDULVHVWKDWVXFKSRVVHVVLRQZDVFRQQHFWHGWRWKH † D  8QLWHG6WDWHVYsLQDGX )G  RIIHQVHlDQGWKHEXUGHQmVKLIWVWRWKHGHIHQGDQWWRVKRZWKDW WK &LU    H[SODLQLQJ WKDW mWKH GHWHUPLQDWLRQ RI WKH LWLVFOHDUO\LPSUREDEOHWKDWWKHZHDSRQZDVFRQQHFWHGWRWKH TXDQWLW\RIGUXJVLQYROYHGLVQRWDQHOHPHQWRIWKHRIIHQVHl RIIHQVHl%HQGHU)GDW LQWHUQDOTXRWDWLRQPDUNV DQGWKDWWKHVHQWHQFLQJMXGJHQRWWKHMXU\PXVWGHFLGHWKLV DQGFLWDWLRQVRPLWWHG $VZLWKRWKHUIDFWXDOGHWHUPLQDWLRQV LVVXH  PDGH DW D VHQWHQFLQJ KHDULQJ ZH ZLOO XSKROG WKH GLVWULFW FRXUWjV ILQGLQJ WKDW /XFDV SRVVHVVHG D ILUHDUP GXULQJ WKH $OWKRXJK /XFDVjV LQGLFWPHQW GLG QRW VSHFLI\ D GUXJ FRPPLVVLRQRIKLVGUXJWUDIILFNLQJRIIHQVHXQOHVVLWLVFOHDUO\ TXDQWLW\DOOSDUWLHVNQHZWKDWWKHPD[LPXPGUXJTXDQWLW\IRU HUURQHRXV,G ZKLFK /XFDV PLJKW EH KHOG DFFRXQWDEOH ZDV   JUDPV 7KHSHQDOW\UDQJHIRUDYLRODWLRQRI† D  LQYROYLQJ 7KHJRYHUQPHQWSUHVHQWHGQRHYLGHQFHDWWKHVHQWHQFLQJ JUDPV RU PRUH RI FUDFN FRFDLQH LV WHQ \HDUV WR OLIH KHDULQJWKDW/XFDVRZQHGWKHJXQRZQHGWKHFDUWKDWKHZDV LPSULVRQPHQW ZKHUH QR RWKHU VHQWHQFHHQKDQFLQJ IDFWRUV GULYLQJ RU HYHQ NQHZ WKDW WKH JXQ ZDV LQ WKH FDUjV JORYH H[LVW86&† E  $ $VDUHVXOWWKHGLVWULFWFRXUW FRPSDUWPHQW1RUZDVWKHJXQXVHGGLVSOD\HGRURWKHUZLVH GLGQRWPLVVWDWHWKHSRWHQWLDOSHQDOW\WKDW/XFDVIDFHGRQWKH LQYROYHG LQ WKH PHHWLQJ EHWZHHQ /XFDV DQG +RUWRQ GDWHWKDWKHHQWHUHGKLVJXLOW\SOHDLQs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jV GULYHU DQG RQO\ RFFXSDQW mD    KROGLQJWKDWWKHGLVWULFWFRXUWIDLOHGWRFRPSO\ZLWK UHDVRQDEOH MXURU FRXOG FRQFOXGH WKDW WKH GHIHQGDQW KDG 5XOHZKHQLWGLGQRWLQIRUPWKHGHIHQGDQWRIWKHHOHPHQWV NQRZOHGJH GRPLQLRQ DQG FRQWURO RYHU WKH ILUHDUPl HYHQ RI WKH FULPH WR ZKLFK VKH ZDV SOHDGLQJ JXLOW\ DQG WKRXJKWKHJRYHUQPHQWRIIHUHGQRHYLGHQFHWKDWWKHGHIHQGDQW PLVLQIRUPHGKHUDERXWWKHPD[LPXPDQGPLQLPXPSHQDOWLHV RZQHGWKHJXQRUWKHFDU  IRU KHU RIIHQVHV HYHQ WKRXJK WKH SHQDOWLHV ZHUH UHDGLO\ DVFHUWDLQDEOHLQWKHVWDWXWH  7KHSUHVHQWFDVHLVDOVRGLVWLQJXLVKDEOHIURP8QLWHG6WDWHV Y 3DXON  )G   WK &LU    XSRQ ZKLFK WKH 7KLV FRXUW KDV UHFRJQL]HG WKDW WKH 6XSUHPH &RXUW mKDG JRYHUQPHQWUHOLHV,Q3DXONWKHGHIHQGDQWZDVDUUHVWHGVRPH HDUOLHUDQQRXQFHGWKHSULQFLSOHXQGHUO\LQJWKH$SSUHQGLUXOH GLVWDQFHIURPKLVFDUDQGDQXQORDGHGLQRSHUDEOHILUHDUP LQsRQHVY8QLWHG6WDWHV86  l8QLWHG6WDWHV ZDV ORFDWHG LQ WKH FDUjV JORYH FRPSDUWPHQW $OWKRXJK WKH Y )ORZDO  )G   WK &LU   EXW sRQHVjV &RXUWRI$SSHDOVIRUWKH)LIWK&LUFXLWUHPDQGHGWKHFDVHIRU H[SOLFLW KROGLQJ ZDV EDVHG RQ VWDWXWRU\ FRQVWUXFWLRQ  6HH WKH GLVWULFW FRXUW WR FRQVLGHU WKH GHIHQGDQWjV FXOSDELOLW\ LW sRQHV86DW KROGLQJWKDWWKHIHGHUDOFDUMDFNLQJ KHOG WKDW WKH GLVWULFW FRXUW GLG QRW HUU LQ ILQGLQJ WKDW WKH VWDWXWH DV LW H[LVWHG ZKHQ WKH GHIHQGDQW ZDV LQGLFWHG GHIHQGDQW SRVVHVVHG D ILUHDUP  ,G DW   %XW WKH HVWDEOLVKHGWKUHHVHSDUDWHRIIHQVHVUDWKHUWKDQDVLQJOHRIIHQVH GHIHQGDQW LQ 3DXON XQOLNH /XFDV QHYHU GLVSXWHG WKDW WKH ZLWKDFKRLFHRIWKUHHPD[LPXPSHQDOWLHVDQGUHFRJQL]LQJ ILUHDUPEHORQJHGWRKLP3DXONLQIDFWDGPLWWHGWKDWKHKDG WKDW WKLV FRQVWUXFWLRQ DYRLGHG mVHULRXV FRQVWLWXWLRQDO TXHVWLRQV RQ ZKLFK SUHFHGHQW LV QRW GLVSRVLWLYHl   7KH  8QLWHG6WDWHVY/XFDV 1R  1R  8QLWHG6WDWHVY/XFDV 

&RXUWjVVWDWHPHQWWKDWmXQGHUWKH'XH3URFHVV&ODXVHRIWKH DmK\EULGEXUGHQRISURRIl,QVWHDGWKHFRPPHQWUHIOHFWVWKH )LIWK$PHQGPHQWDQGWKHQRWLFHDQGMXU\WULDOJXDUDQWHHVRI FRXUWjVILQGLQJWKDWWKHJRYHUQPHQWKDGVDWLVILHGLWVEXUGHQRI WKH6L[WK$PHQGPHQWDQ\IDFW RWKHUWKDQSULRUFRQYLFWLRQ SURYLQJE\DSUHSRQGHUDQFHRIWKHHYLGHQFHWKDW/XFDVVKRXOG WKDW LQFUHDVHV WKH PD[LPXP SHQDOW\ IRU D FULPH PXVW EH EH KHOG UHVSRQVLEOH IRU WKH HQWLUH   JUDPV RI FUDFN FKDUJHG LQ DQ LQGLFWPHQW VXEPLWWHG WR D MXU\ DQG SURYHQ FRFDLQHDQGWKDW/XFDVIDLOHGWRSUHVHQWVXIILFLHQWHYLGHQFH EH\RQG D UHDVRQDEOH GRXEWl LG DW  Q ZDV GLFWXP LQ WRFRXQWHUWKHJRYHUQPHQWjVSURRI OLJKW RI LWV UHVROXWLRQ RI WKH FDVH RQ WKH EDVLV RI VWDWXWRU\ FRQVWUXFWLRQ )RU DOO RI WKH IRUHJRLQJ UHDVRQV ZH FRQFOXGH WKDW WKH GLVWULFWFRXUWjVGHWHUPLQDWLRQWKDW/XFDVZDVUHVSRQVLEOHIRU 2XUFRQFOXVLRQWKDW5XOH F GRHVQRWUHTXLUHDGLVWULFW WKHHQWLUHTXDQWLW\RIGUXJVZDVQRWFOHDUO\HUURQHRXVDQGWKDW FRXUWWRSUHGLFWDQGDSSO\WKHKROGLQJVRIWKH6XSUHPH&RXUW WKHGLVWULFWFRXUWGLGQRWLPSURSHUO\DSSO\WKHEXUGHQRISURRI EHIRUHWKH\DUHDQQRXQFHGLVVXSSRUWHGE\WKH&RXUWjVRZQ LQPDNLQJLWVILQGLQJ GHFLVLRQLQ%UDG\Y8QLWHG6WDWHV 86   ,Q %UDG\WKH&RXUWUHMHFWHGWKHSHWLWLRQHUjVFODLPWKDWKLVJXLOW\ ' )LUHDUPHQKDQFHPHQW SOHDZDVLQYROXQWDU\ZKHUHDIWHUKHSOHGJXLOW\WRDIHGHUDO NLGQDSSLQJFKDUJHWKH6XSUHPH&RXUWKHOGWKDWWKHVWDWXWHjV /XFDVjV ILQDO DUJXPHQW FKDOOHQJHV WKH GLVWULFW FRXUWj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m>L@I D FRXQVHOHGGHIHQGDQWWKDWWKH6WDWHZLOOKDYHDVWURQJFDVH GDQJHURXV ZHDSRQ LQFOXGLQJ D ILUHDUP  ZDV SRVVHVVHGl DJDLQVW KLP LV QRW VXEMHFW WR ODWHU DWWDFN EHFDXVH WKH GXULQJWKHFRPPLVVLRQRIDGUXJWUDIILFNLQJRIIHQVHm)RUD GHIHQGDQW VODZ\HUFRUUHFWO\DGYLVHGKLPZLWKUHVSHFWWR FRXUWWRLPSRVHDVHQWHQFHHQKDQFHPHQWXQGHU†' E   WKH WKHQ H[LVWLQJ ODZ DV WR SRVVLEOH SHQDOWLHV EXW ODWHU WKHJRYHUQPHQWPXVWHVWDEOLVKWKDW  WKHGHIHQGDQWDFWXDOO\ SURQRXQFHPHQWVRIWKHFRXUWVDVLQWKLVFDVHKROGWKDW RU FRQVWUXFWLYHO\ µSRVVHVVHGj WKH ZHDSRQ DQG   VXFK WKHPD[LPXPSHQDOW\IRUWKHFULPHLQTXHVWLRQZDVOHVV SRVVHVVLRQ ZDV GXULQJ WKH FRPPLVVLRQ RI WKH RIIHQVHl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

SUHVHQWHG WHVWLPRQ\ WKDW GUXJ GHDOHUV RIWHQ ZRUN RQ FRQWDLQV QR LQGLFDWLRQ WKDW /XFDVjV SOHD ZDV QRW PDGH FRQVLJQPHQW/XFDVjVUHOLDQFHRQWKLVHYLGHQFHWRVXSSRUWKLV NQRZLQJO\DQGYROXQWDULO\:HWKHUHIRUHFRQFOXGHWKDWQR DUJXPHQW WKDW WKH GLVWULFW FRXUW FRPPLWWHG FOHDU HUURU LQ YLRODWLRQRI5XOHRFFXUUHGDQGWKDW/XFDVjVJXLOW\SOHD DWWULEXWLQJ WKH HQWLUH TXDQWLW\ RI GUXJV WR KLP LV WKHUHIRUH ZDVYDOLG PLVSODFHG % $SSUHQGLLVVXHV )LQDOO\/XFDVRYHUORRNVVHYHUDONH\SLHFHVRIHYLGHQFHWKDW VXSSRUWWKHGLVWULFWFRXUWjVILQGLQJ0RVWLPSRUWDQWO\+RUWRQ ,Q DGGLWLRQ WR FKDOOHQJLQJ WKH YDOLGLW\ RI KLV JXLOW\ SOHD WHVWLILHGWKDWKHZDVDFWLQJSXUVXDQWWR/XFDVjVLQVWUXFWLRQV EDVHG XSRQ $SSUHQGL /XFDV FRQWHQGV WKDW KLV VHQWHQFH ZKHQKHPHWWKHPDQZKRWXUQHGRYHUWKHSDFNDJHFRQWDLQLQJ YLRODWHV$SSUHQGLEHFDXVHKLVLQGLFWPHQWGLGQRWLQFOXGHWKH WKH   JUDPV RI FUDFN FRFDLQH  7KH GLVWULFW FRXUW DOVR TXDQWLW\RIGUXJVIRUZKLFKWKHJRYHUQPHQWDOOHJHGWKDWKH QRWHGWKDWDOWKRXJK/XFDVFODLPHGWKDWKHOLPLWHGKLVGHDOLQJ ZDVUHVSRQVLEOH2XUFRQFOXVLRQWKDWWKHGLVWULFWMXGJHGLG WRRQHRXQFHTXDQWLWLHVRIFUDFNFRFDLQHWKHHQWLUHVKLSPHQW QRW YLRODWH 5XOH  DQG WKDW /XFDVjV JXLOW\ SOHD ZDV YDOLG ZRXOG KDYH FRQVWLWXWHG RQO\ DERXW  RQHRXQFH SDUFHOV GRHVQRWGLVSRVHRIWKLVLVVXHEHFDXVH$SSUHQGLDSSOLHVWR ZKLFK LV QRW DQ RYHUZKHOPLQJO\ ODUJH LQYHQWRU\ FDVHVRQGLUHFWUHYLHZLQYROYLQJVHQWHQFHVLPSRVHGEHIRUH )XUWKHUPRUHWKHSUHVHQFHRISODVWLFEDJJLHVZLWKWKHLU $SSUHQGLZDVGHFLGHG6HH8QLWHG6WDWHVY)ORZDO)G FRUQHUVFXWRXWLQ/XFDVjVDSDUWPHQWUHVXOWLQJLQDVPDQ\DV   WK&LU  DSSO\LQJ$SSUHQGLZKHUHWKHGLVWULFW GUXJFDUU\LQJFRQWDLQHUVVXSSRUWVDILQGLQJWKDW/XFDV FRXUWVHQWHQFHGWKHGHIHQGDQWEHIRUH$SSUHQGLZDVGHFLGHG  ZDVDKLJKYROXPHGUXJGHDOHUZKRKDGH[SHULHQFHVHOOLQJ :H PXVW WKHUHIRUH GHWHUPLQH ZKHWKHU /XFDVjV VHQWHQFH RI ODUJHTXDQWLWLHVRIGUXJV  PRQWKV  \HDUV  LQ SULVRQ DQG D ILYH\HDU WHUP RI VXSHUYLVHGUHOHDVHZLWKVWDQGVUHYLHZXQGHU$SSUHQGL $VDQDGGLWLRQDOPDWWHU/XFDVDUJXHVWKDWWKHGLVWULFWFRXUW LPSURSHUO\SODFHGWKHEXUGHQRISURRIRQKLPZLWKUHJDUGWR ,I /XFDV KDG DGPLWWHG UHVSRQVLELOLW\ IRU HLWKHU WKH   WKH TXDQWLW\ RI GUXJV  +LV FRQWHQWLRQ LV EDVHG XSRQ WKH JUDPVRIFUDFNFRFDLQHWKDWWKHGLVWULFWFRXUWDWWULEXWHGWRKLP IROORZLQJ FRPPHQW PDGH E\ WKH GLVWULFW FRXUW DW WKH RUWKHJUDPVWKDWZHUHLQ+RUWRQjVFDUZKHQ/XFDVZDV VHQWHQFLQJKHDULQJ DUUHVWHGWKHDSSOLFDEOHVWDWXWHZRXOGKDYHUHTXLUHGDWHUPRI LPSULVRQPHQW RI EHWZHHQ WHQ \HDUV DQG OLIH   86& :KDWZHGRNQRZIURPFHUWDLQW\LVWKDWWKLV>WKHFUDFN †  E  $  SURYLGLQJ WKDW WKH UHTXLUHG VHQWHQFH IRU D FRFDLQH@ZDVFRPLQJKHUH>WR/RXLVYLOOH@DQGJRLQJWR YLRODWLRQ RI †  D   LQYROYLQJ  JUDPV RU PRUH RI D 0U/XFDVDQGEXWIRUWKHWUDIILFVWRSRI0U+RUWRQLW PL[WXUHWKDWFRQWDLQVFRFDLQHEDVHLVmDWHUPRILPSULVRQPHQW ZRXOGKDYHHQGHGXSKHUH6R,DPJRLQJWRRYHUUXOH ZKLFKPD\QRWEHOHVVWKDQ\HDUVRUPRUHWKDQOLIHlZKHUH \RXU REMHFWLRQ RQ WKH TXDQWLW\ 0U %RXOGLQ >/XFDVjV QRRWKHUVHQWHQFHHQKDQFLQJIDFWVH[LVW $VGLVFXVVHGDERYH FRXQVHO@DQGILQGWKDW\RXVLPSO\KDYHQRWVXVWDLQHGWKH WKHGLVWULFWFRXUWMXGJHRSHUDWHGXQGHUWKHDVVXPSWLRQWKDW EXUGHQRISURRIQHFHVVDU\WRORZHUWKLVE\LQGLFDWLQJRU WKLVVWDWXWRU\SURYLVLRQDSSOLHGZKHQKHLQIRUPHG/XFDVRI ILQGLQJWKDWWKHTXDQWLW\ZDVOHVVWKDQZKDWWKHVKLSPHQW WKHSRWHQWLDOWHUPRILPSULVRQPHQW HQFRPSDVVHG DQG WKDW WKH JRYHUQPHQW WKURXJK LWV HYLGHQFHKDVVXVWDLQHGLWVEXUGHQWRVKRZWKDWLWjVPRUH /XFDVKRZHYHUDGPLWWHGUHVSRQVLELOLW\IRURQO\RQHRXQFH OLNHO\WKDQQRWWKDWLWZDVLQIDFWKHDGHGWR0U/XFDV RU  JUDPV RI FUDFN FRFDLQH  7R EH FRQVLVWHQW ZLWK $SSUHQGLKLVWHUPRILPSULVRQPHQWEDVHGRQWKDWTXDQWLW\RI $OWKRXJKWKLVVWDWHPHQWLVQRWDPRGHORIFODULW\ZHFRQFOXGH WKH GUXJ ZRXOG UDQJH EHWZHHQ  DQG  \HDUV   86& WKDWFRQWUDU\WR/XFDVjVEHOLHIWKHGLVWULFWFRXUWGLGQRWDSSO\ †  E  %  SURYLGLQJ WKDW D YLRODWLRQ RI †  D   8QLWHG6WDWHVY/XFDV 1R  1R  8QLWHG6WDWHVY/XFDV 

LQYROYLQJ ILYH JUDPV RU PRUH RI D PL[WXUH WKDQ FRQWDLQV SODFHGWKHEXUGHQRISURRIRQKLPZLWKUHJDUGWRWKHGUXJ FRFDLQHEDVHUHTXLUHVmDWHUPRILPSULVRQPHQWZKLFKPD\QRW TXDQWLW\GHWHUPLQDWLRQ EHOHVVWKDQ\HDUVDQGQRWPRUHWKDQ\HDUVlZKHUHQR RWKHU VHQWHQFHHQKDQFLQJ IDFWV H[LVW  8QLWHG 6WDWHV Y :HUHYLHZWKHILQGLQJVRIIDFWWKDWDGLVWULFWFRXUWPDNHVDW +DUSHU)G WK&LU  KROGLQJWKDW D VHQWHQFLQJ KHDULQJ XQGHU D FOHDUO\ HUURQHRXV VWDQGDUG $SSUHQGL LV QRW LPSOLFDWHG ZKHUH WKH GHIHQGDQW KDV 8QLWHG6WDWHVY+DPLOWRQ)G WK&LU  mVWLSXODWHG WR WKH DPRXQW RI GUXJV IRU ZKLFK KH ZDV KHOG m$GLVWULFWFRXUWjVIDFWXDOILQGLQJVDUHFOHDUO\HUURQHRXVLI UHVSRQVLEOH DQG WKH GLVWULFW FRXUW GLG QRW UHO\ RQ DQ\ IDFW EDVHGRQWKHHQWLUHUHFRUGZHDUHOHIWZLWKWKHGHILQLWHDQG RXWVLGHRIWKHSOHDDJUHHPHQWWRGHWHUPLQHGUXJTXDQWLW\DW ILUPFRQYLFWLRQWKDWDPLVWDNHKDVEHHQFRPPLWWHGl6DQIRUG VHQWHQFLQJl  Y+DUYDUG,QGXV,QF)G   WK&LU LQWHUQDOTXRWDWLRQPDUNVDQGFLWDWLRQRPLWWHG )XUWKHUPRUH $SSO\LQJ WKHVH SULQFLSOHV WR WKH SUHVHQW FDVH /XFDVjV WKHJRYHUQPHQWPXVWSURYHWKHTXDQWLW\RIGUXJVDWWULEXWDEOH VHQWHQFH LV FRQVLVWHQW ZLWK WKH DSSOLFDEOH WHUP RI WRDSDUWLFXODUGHIHQGDQWE\DSUHSRQGHUDQFHRIWKHHYLGHQFH LPSULVRQPHQW FRUUHVSRQGLQJ WR WKH TXDQWLW\ RI GUXJV IRU 8QLWHG6WDWHVYsLQDGX )G   WK&LU   ZKLFK KH DFNQRZOHGJHG UHVSRQVLELOLW\  +LV  \HDU VHQWHQFHGRHVQRWH[FHHGWKHPD[LPXPSHQDOW\VHWIRUWKLQ /XFDV FRQWHQGV WKDW WKH GLVWULFW FRXUWjV GUXJ TXDQWLW\ † E  % QRULVLWDWRUQHDUWKHVWDWXWRULO\SUHVFULEHG GHWHUPLQDWLRQ ZDV FOHDUO\ HUURQHRXV EHFDXVH RI    WKH PLQLPXPSHQDOW\LQWKLVVXEVHFWLRQ:HWKHUHIRUHFRQFOXGH DOOHJHG LQFRQVLVWHQFLHV LQ +RUWRQjV WHVWLPRQ\   WKH WKDW/XFDVjVVHQWHQFHGRHVQRWYLRODWH$SSUHQGL6HH8QLWHG SRVVLELOLW\WKDW+RUWRQIDEULFDWHGKLVWHVWLPRQ\WRUHGXFHKLV 6WDWHVY*DUFLD)G WK&LU  KROGLQJ SRWHQWLDO VHQWHQFH DQG   WKH SUHVHQFH RI RQO\  LQ WKDWWKHGHIHQGDQWjVVHQWHQFHGLGQRWYLRODWH$SSUHQGLZKHUH /XFDVjVDSDUWPHQWDQDPRXQWWKDWLVFOHDUO\LQVXIILFLHQWWR WKH DFWXDO VHQWHQFH LPSRVHG GLG QRW H[FHHG WKH PD[LPXP SXUFKDVH JUDPVRIFUDFNFRFDLQH SHQDOW\FRUUHVSRQGLQJWRWKHTXDQWLW\RIGUXJVIRUZKLFKWKH GHIHQGDQWDFNQRZOHGJHGUHVSRQVLELOLW\QRUZDVWKHVHQWHQFH $OWKRXJKWKHVHFRQVLGHUDWLRQVPLJKWUDLVHGRXEWVDERXWWKH DWWKHERWWRPHQGRIDKLJKHUVWDWXWRU\UDQJHRISHQDOWLHV FI TXDQWLW\RIGUXJVWKDW/XFDVH[SHFWHGWRUHFHLYHZHFRQFOXGH 8QLWHG 6WDWHV Y 5DPLUH]  )G   WK &LU WKDW WKH GLVWULFW FRXUWjV ILQGLQJ ZDV QRW FOHDUO\ HUURQHRXV   KROGLQJ WKDW WKH GHIHQGDQWjV ULJKWV XQGHU $SSUHQGL 5HJDUGLQJ+RUWRQjVWHVWLPRQ\WKHGLVWULFWFRXUWFRQVLGHUHG ZHUH YLRODWHG ZKHUH WKH VHQWHQFH ZDV DW WKH PDQGDWRU\ /XFDVjVDOOHJDWLRQVDQGGHWHUPLQHGWKDW+RUWRQZDVDFUHGLEOH PLQLPXP IRU WKH MXGJHGHWHUPLQHG GUXJ TXDQWLW\ DQG WKH ZLWQHVV:HILQGQRUHDVRQWRVXEVWLWXWHRXUMXGJPHQWIRUWKH MXGJHIHOWFRQVWUDLQHGE\WKHVWDWXWHWRLPSRVHWKLVVHQWHQFH  FUHGLELOLW\ GHWHUPLQDWLRQV RI WKH WULDO MXGJH ZKR KDG WKH RSSRUWXQLW\ WR REVHUYH +RUWRQjV WHVWLPRQ\ DQG DVVHVV KLV & $PRXQWRIGUXJVDWWULEXWDEOHWR/XFDV GHPHDQRURQWKHZLWQHVVVWDQG6HH3HYHOHUY8QLWHG6WDWHV  )G  WK&LU  UHIXVLQJWRVHFRQGJXHVV /XFDVQH[WDUJXHVWKDWWKHGLVWULFWFRXUWHUUHGLQILQGLQJWKDW WKHFUHGLELOLW\GHWHUPLQDWLRQRIWKHPDJLVWUDWHMXGJHEDVHG KHZDVDFFRXQWDEOHIRUWKH JUDPVRIFUDFNFRFDLQHWKDW XSRQ WKH JHQHUDO UHOXFWDQFH RI WKLV FRXUW mWR VHW DVLGH ZHUH RULJLQDOO\ FRQFHDOHG LQ +RUWRQjV FDU  $FFRUGLQJ WR FUHGLELOLW\GHWHUPLQDWLRQVPDGHE\WKHWULHURIIDFWZKRKDV /XFDVWKHHYLGHQFHDWWKHVHQWHQFLQJKHDULQJHVWDEOLVKHGWKDW KDG WKH RSSRUWXQLW\ WR YLHZ WKH ZLWQHVV RQ WKH VWDQG DQG KHZDVUHVSRQVLEOHIRURQO\RQHRXQFHRIFUDFNFRFDLQH,Q DVVHVVKLVGHPHDQRUl  DGGLWLRQ /XFDV FRQWHQGV WKDW WKH GLVWULFW FRXUW LPSURSHUO\ ,Q DGGLWLRQ WKH DPRXQW RI PRQH\ IRXQG LQ /XFDVjV DSDUWPHQWKDVOLWWOHSUREDWLYHYDOXHEHFDXVHWKHJRYHUQPHQW