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

0$5< (//(1 52'*(56 ; ,QGLYLGXDOO\DQGDV  ,QGHSHQGHQW3HUVRQDO   1R 5HSUHVHQWDWLYHIRUWKH(VWDWH  RI3KLOLSs5RGJHUV !  3ODLQWLII$SSHOODQW   Y   02180(17$/ /,)(   ,1685$1&( &203$1<D  0LQQHVRWD&RUSRUDWLRQ DQG  $0(5,&$1 (;35(66D1HZ  <RUN&RUSRUDWLRQ  'HIHQGDQWV$SSHOOHHV   1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQDW%D\&LW\ 1R n'DYLG0/DZVRQ'LVWULFWsXGJH $UJXHG 1RYHPEHU  'HFLGHGDQG)LOHG 0D\  %HIRUH 0(55,77&/$<DQG*,/0$1&LUFXLWsXGJHV

  5RGJHUVY0RQXPHQWDO 1R /LIH,QV&RHWDO

BBBBBBBBBBBBBBBBB &2816(/ $5*8(' 3HWHU33DWULFN3$75,&. .:,$7.2:6., &KHER\JDQ 0LFKLJDQ IRU $SSHOODQW  (ODLQH $ 3DUVRQ 5$<021'  352.23 6RXWKILHOG 0LFKLJDQ IRU $SSHOOHHV  21 %5,()   3HWHU 3 3DWULFN 3$75,&. .:,$7.2:6., &KHER\JDQ 0LFKLJDQ IRU $SSHOODQW (ODLQH $ 3DUVRQ 5$<021'  352.23 6RXWKILHOG 0LFKLJDQIRU$SSHOOHHV BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB &/$< &LUFXLW sXGJH  3ODLQWLII 0DU\ (OOHQ 5RGJHUV DSSHDOV IURP WKH RUGHU HQWHUHG E\ 'LVWULFW &RXUW sXGJH 9LFWRULD $ 5REHUWV RQ $XJXVW    JUDQWLQJ 'HIHQGDQWVj 0RQXPHQWDO /LIH ,QVXUDQFH &RPSDQ\jV DQG $PHULFDQ([SUHVVjPRWLRQIRUUHFRQVLGHUDWLRQDQGWKHUHE\ HQWHULQJ VXPPDU\ MXGJHPHQW LQ IDYRU RI 'HIHQGDQWV 3ODLQWLIIDOVRDSSHDOVIURPWKHRUGHUHQWHUHGE\'LVWULFW&RXUW sXGJH 'DYLG 0 /DZVRQ RQ 2FWREHU   GHQ\LQJ 3ODLQWLIIjVPRWLRQIRUUHFRQVLGHUDWLRQRIWKH$XJXVW  RUGHU 7KLV FDVH LV LQ IHGHUDO FRXUW RQ WKH EDVLV RI GLYHUVLW\ RI FLWL]HQVKLSSXUVXDQWWR86&† D ZLWKWKHDPRXQW LQ FRQWURYHUV\ EHLQJ JUHDWHU WKDQ   7KH PDWWHU LQYROYHV D FRQWUDFW GLVSXWH DULVLQJ RXW RI D OLIH LQVXUDQFH SROLF\ LVVXHG E\ 0RQXPHQWDO /LIH ,QVXUDQFH &RPSDQ\ m0RQXPHQWDOl ZKLFKSURYLGHGIRUDFFLGHQWDOGHDWKEHQHILWV

 3XUVXDQW WR WKH GLVWULFW FRXUWjV $XJXVW   RUGHU WKH SDUWLHV KDYH VWLSXODWHG WKDW 0DUFHOOD & 3XFKDOVNL ZKR KDG WKHUHXSRQ EHHQ DSSRLQWHG DV 3HUVRQDO 5HSUHVHQWDWLYH RI 5RGJHUVj HVWDWH EH VXEVWLWXWHG DV 3ODLQWLII KHUHLQ GXH WR WKH GHDWK RI 0DU\ (OOHQ 5RGJHUV 1R 5RGJHUVY0RQXPHQWDO  /LIH,QV&RHWDO

WKDW 3ODLQWLII LV VHHNLQJ RQ EHKDOI RI KHU LQVXUHG KXVEDQG 3ODLQWLIILVFKDOOHQJLQJWKHGLVWULFWFRXUWjVRUGHUILQGLQJWKDW QRJHQXLQHLVVXHRIPDWHULDOIDFWUHPDLQHGIRUWULDODQGWKDW 3ODLQWLIILVQRWHQWLWOHGWREHQHILWVXQGHUWKHSROLF\ )RUWKHUHDVRQVVHWIRUWKEHORZZH5(9(56(WKHGLVWULFW FRXUWjV RUGHU JUDQWLQJ 'HIHQGDQWV VXPPDU\ MXGJPHQW DQG 5(0$1'WKHFDVHIRUWULDOZLWKLQVWUXFWLRQVIRUWKHFRXUWWR UXOH XSRQ 3ODLQWLIIjV REMHFWLRQV WR WKH DGPLVVLRQ RI 0RQXPHQWDOjV H[SHUW WHVWLPRQ\ EDVHG RQ 0RQXPHQWDOjV DOOHJHG IDLOXUH WR FRPSO\ ZLWK )HGHUDO 5XOH RI &LYLO 3URFHGXUH D  %$&.*5281' 3URFHGXUDO+LVWRU\ 2Q 0DUFK    3ODLQWLII ILOHG D FRPSODLQW DJDLQVW 'HIHQGDQWV VHHNLQJ SD\PHQW RI EHQHILWV SXUVXDQW WR DQ DFFLGHQWDO GHDWK FRYHUDJH SROLF\ LVVXHG E\ 'HIHQGDQW 0RQXPHQWDO WR 3ODLQWLIIjV QRZ GHFHDVHG KXVEDQG 3KLOOLS 5RGJHUV ZKHUHLQ PRQWKO\ SUHPLXPV ZHUH SDLG E\ DQG WKURXJK 5RGJHUVj FUHGLW OLQH KHOG E\ 'HIHQGDQW $PHULFDQ ([SUHVV 7KHFDVHZDVUHPRYHGWRIHGHUDOGLVWULFWFRXUWRQ $SULO    DQG 'HIHQGDQWV ILOHG WKHLU DQVZHU WR WKH FRPSODLQWRQ$SULO  

 7KH SROLF\ SURYLVLRQ DW LVVXH VWDWHV DV IROORZV $&&,'(17$/ '($7+ %(1(),7 :KHQ ZH UHFHLYH GXH SURRI WKDW \RX GLH ZH ZLOO SD\ WKH EHQHILW VKRZQ RQ WKH 6FKHGXOH RI %HQHILWV WR \RXU QDPHG %HQHILFLDU\ SURYLGHG  GHDWK RFFXUV DV D GLUHFW UHVXOW RI DQ ,QMXU\ DQG  GHDWK RFFXUV ZLWKLQ  GD\V RI WKH DFFLGHQW FDXVLQJ WKH ,QMXU\ s$ DW  m,QMXU\l IRU SXUSRVHV RI WKH SROLF\ LV GHILQHG DV mERGLO\ LQMXU\ FDXVHG E\ DQ DFFLGHQW 7KH DFFLGHQW PXVW RFFXU ZKLOH WKH &RYHUHG 3HUVRQjV LQVXUDQFH LV LQ IRUFH XQGHU WKH *URXS 3ROLF\ 7KH ,QMXU\ PXVW EH WKH GLUHFW FDXVH RI ORVV DQG PXVW EH LQGHSHQGHQW RI DOO RWKHU FDXVHV 7KH LQMXU\ PXVW QRW EH FDXVHG RU FRQWULEXWHG WR E\ 6LFNQHVVl s$ DW   5RGJHUVY0RQXPHQWDO 1R 1R 5RGJHUVY0RQXPHQWDO  /LIH,QV&RHWDO /LIH,QV&RHWDO

7KHGLVWULFWFRXUWKHOGDVWDWXVFRQIHUHQFHDQGLVVXHGLWV WKHVHDOOHJDWLRQVRIIDLOXUHWRFRPSO\ZLWK5XOH,QKHU VFKHGXOLQJRUGHURQ1RYHPEHU WKHUHE\HVWDEOLVKLQJ $SULO   OHWWHU FRXQVHO IRU 0RQXPHQWDO UHPLQGHG 'HFHPEHU DVWKHGDWHIRU3ODLQWLIIWRILOHKHUH[SHUW 3ODLQWLIIWKDWLWZDVQRWUHTXLUHGWRSURYLGH3ODLQWLIIZLWKWKH ZLWQHVV UHSRUWV  sDQXDU\    DV WKH GHDGOLQH IRU DGGUHVVHVDQGWHOHSKRQHQXPEHUVRI0RQXPHQWDOjVH[SHUWV LGHQWLILFDWLRQRIDOOZLWQHVVHVLQFOXGLQJH[SHUWV 0DUFK LQDVPXFKDVWKH(DVWHUQ'LVWULFWRI0LFKLJDQKDGmRSWHGRXWl  DV WKH GHDGOLQH IRU FRPSOHWLQJ H[SHUW GLVFRYHU\  DQG RIWKHUHTXLUHPHQWVRI5XOH D  YLDLWVORFDOUXOH $SULODVWKHGDWHIRUILOLQJGLVSRVLWLYHPRWLRQV $OWKRXJK(DVWHUQ'LVWULFWORFDOUXOHLQHIIHFWLQsDQXDU\ RIH[SUHVVO\VWDWHVWKDWWKHGLVWULFWLVQRORQJHURSWLQJ 2QsDQXDU\ 0RQXPHQWDOVHUYHGDQGWKHQILOHGLWV RXWDQGWKDWFRPSOLDQFHZLWK)HG5&LY3 D  LVQRZ H[SHUWZLWQHVVOLVWQDPLQJ'U:HUQHU6SLW]DQG'U*) PDQGDWRU\ORFDOUXOHLQHIIHFWDWWKHWLPHLQTXHVWLRQGLG 0ROLQDUL DV 0RQXPHQWDOjV H[SHUWV  6L[ GD\V ODWHU RQ LQGLFDWHWKDWWKH(DVWHUQ'LVWULFWRSWHGRXWRIFRPSO\LQJZLWK sDQXDU\   0RQXPHQWDO DOVR VHUYHG DQG ILOHG LWV )HG 5 &LY 3  D    $V D UHVXOW 3ODLQWLIIjV ILUVW ZLWQHVV OLVW  ,Q WKH PHDQWLPH RQ sDQXDU\   DOOHJDWLRQRIQRQFRPSOLDQFHDVOLVWHGDERYHLVZLWKRXWPHULW 0RQXPHQWDOKDGILOHGDPRWLRQWRFRPSHO3ODLQWLIIWRSURYLGH IXOOPHGLFDOUHOHDVHDXWKRUL]DWLRQVWR0RQXPHQWDODQGLVVXHG )XUWKHUPRUH HYHQ LI 3ODLQWLIIjV RWKHU DOOHJDWLRQV DUH QXPHURXVVXESRHQDVIRUUHFRUGVWRWKHIRXUWHHQGRFWRUVOLVWHG PHULWRULRXVVDQFWLRQVXQGHU)HG5&LY3 F  VWLOOPD\ RQ3ODLQWLIIjVZLWQHVVOLVW7KHGLVWULFWFRXUWLVVXHGDQRUGHU QRWEHDSSURSULDWHLI0RQXPHQWDOjVIDLOXUHWRFRPSO\ZLWK JUDQWLQJ 0RQXPHQWDOjV PRWLRQ WR FRPSHO DQG RUGHUHG 5XOH  LV GHWHUPLQHG WR EH mKDUPOHVVl  7KLV TXHVWLRQ 3ODLQWLII WR IXUQLVK VLJQHG PHGLFDO DXWKRUL]DWLRQV IRU WKH WKRXJKLVEHVWOHIWIRUWKHGLVWULFWFRXUWWRDGGUHVVLQWKHILUVW WUHDWLQJSK\VLFLDQVWKHWZRKRVSLWDOVDQG(PHUJHQF\0HGLFDO LQVWDQFHDQGZHDUHDWDORVVDVWRZK\WKHGLVWULFWFRXUWGLG 6HUYLFHRQRUEHIRUH)HEUXDU\WRJHWKHUZLWKOHWWHUV QRWGRVRZKHQLWLQLWLDOO\GHQLHG0RQXPHQWDOjVPRWLRQIRU RIDXWKRULW\0RQXPHQWDOWKHQSURFHHGHGZLWKGLVFRYHU\RI VXPPDU\ MXGJPHQW  ,Q RWKHU ZRUGV ZKHQ WKH PRWLRQ IRU 3ODLQWLIIjV WUHDWLQJ SK\VLFLDQV  2Q 0DUFK   VXPPDU\ MXGJPHQW ZDV GHQLHG LW ZRXOG DSSHDU WKDW WKH 0RQXPHQWDOVHUYHGFRSLHVRIWKHUHSRUWVRI'U0ROLQDULDQG GLVWULFWFRXUWWKHQKDGUHDVRQWRUXOHXSRQ3ODLQWLIIjVPRWLRQ 'U6SLW]XSRQ3ODLQWLIIYLDIDFVLPLOHWUDQVPLVVLRQDQGUHJXODU LQDVPXFK DV WKH FDVH ZDV JRLQJ IRUZDUG  %HFDXVH ZH DUH PDLO RUGHULQJWKHFDVHWRJRIRUZDUGDWWKLVWLPH3ODLQWLIIjVPRWLRQ PXVWWKHUHIRUHEHFRQVLGHUHG 'LVFRYHU\FRQFOXGHGRQ0DUFKsXVWDIHZGD\V EHIRUHRQ0DUFK0RQXPHQWDOKDGILOHGLWVPRWLRQ &21&/86,21 IRU VXPPDU\ MXGJPHQW DQG EULHI LQ VXSSRUW WKHUHRI  DQG 3ODLQWLIIILOHGKHUUHVSRQVHLQRSSRVLWLRQDQGDUHSO\EULHI :H 5(9(56( WKH GLVWULFW FRXUWjV RUGHU JUDQWLQJ 'HIHQGDQWVVXPPDU\MXGJPHQWDQG5(0$1'WKHFDVHIRU 2QsXO\'LVWULFWsXGJH5REHUWVLVVXHGDZULWWHQ WULDO ZLWK LQVWUXFWLRQV IRU WKH FRXUW WR UXOH XSRQ 3ODLQWLIIjV RSLQLRQ DQG RUGHU GHQ\LQJ 0RQXPHQWDOjV PRWLRQ IRU REMHFWLRQWRWKHDGPLVVLRQRI0RQXPHQWDOjVH[SHUWWHVWLPRQ\ VXPPDU\ MXGJPHQW  0RQXPHQWDO ILOHG D PRWLRQ IRU EDVHG RQ 0RQXPHQWDOjV DOOHJHG IDLOXUH WR FRPSO\ ZLWK UHFRQVLGHUDWLRQ RI WKH FRXUWjV RUGHU RQ $XJXVW   )HGHUDO5XOHRI&LYLO3URFHGXUH D  7KHUHDIWHU RQ $XJXVW    sXGJH 5REHUWV JUDQWHG 0RQXPHQWDOjVPRWLRQIRUUHFRQVLGHUDWLRQRSLQLQJLQUHOHYDQW SDUW  5RGJHUVY0RQXPHQWDO 1R 1R 5RGJHUVY0RQXPHQWDO  /LIH,QV&RHWDO /LIH,QV&RHWDO

  D  % ZDVYLRODWHGEHFDXVH0RQXPHQWDOIDLOHGWR :KLOH 3ODLQWLIIjV WUHDWLQJ SK\VLFLDQV PD\ KDYH SURYLGHDZULWWHQUHSRUWIURPHLWKHURILWVH[SHUWVXQWLO RSLQLRQV FRQFHUQLQJ 0U 5RGJHUVj FDXVH RI GHDWK 0DUFKVL[W\RQHGD\VODWHXQGHUWKHVFKHGXOLQJ 3ODLQWLIIKDVFRPHIRUWKZLWKQRIDFWXDOHYLGHQFHWRUHEXW RUGHU 'HIHQGDQWVjFRQWHQWLRQWKDWQRHYLGHQFHZDVIRXQGRQ DXWRSV\WRVXSSRUWWKHWUHDWHUVjRSLQLRQV,QIDFWRQHRI   D  % ZDVYLRODWHGEHFDXVH0RQXPHQWDOIDLOHGWR WKHWUHDWLQJGRFWRUV>VLF@'UsRKQVRQVSHFLILFDOO\VDLG SURYLGHWKHFXUULFXOXPYLWDHRIHLWKHUH[SHUWZLWQHVVXQWLO WKDW KH ZRXOG GHIHU WR WKH SDWKRORJLVW LQ SURYLQJ RU sDQXDU\DQG)HEUXDU\GD\VDQG GLVSURYLQJIDWW\HPEROLVPDVWKHFDXVHRIGHDWK GD\VODWHUHVSHFWLYHO\ ,Q LWV 2SLQLRQ RI sXO\ WK WKH &RXUW IRFXVHG RQ   D  %  ZDV YLRODWHG EHFDXVH D GLVFORVXUH RI DQ ZKHWKHURUQRWWKHWUHDWLQJGRFWRUVjVWHVWLPRQ\ZRXOGEH H[SHUW ZLWQHVV PXVW EH DFFRPSDQLHG E\ H[KLELWV LQ DGPLVVLEOHXQGHU'DXEHUWDQGGLGQRWIXUWKHUFRQVLGHU VXSSRUWRIWKHH[SHUWjVFRQFOXVLRQDQGQRH[KLELWVZHUH DVVXPLQJLWVDGPLVVLELOLW\ZKHWKHUWKHWHVWLPRQ\ZRXOG SURYLGHGDVRIWKHGDWHRI3ODLQWLIIjVILOLQJKHUEULHIRQ FUHDWH D JHQXLQH LVVXH RI PDWHULDO IDFW  ,QDVPXFK DV DSSHDO 'HIHQGDQWV KDYH GHPRQVWUDWHG WKURXJK XQUHEXWWHG WHVWLPRQ\WKDWDQmHDV\IDVWDQGGHILQLWLYHlWHVWFDQEH   D  %  ZDV YLRODWHG EHFDXVH D GLVFORVXUH RI DQ SHUIRUPHGWRGHWHUPLQHWKHSUHVHQFHRIIDWW\HPEROLVP H[SHUW ZLWQHVV PXVW EH DFFRPSDQLHG E\ D OLVW RI DQGWKDWVXFKDWHVWZDVGRQHRQ0U5RGJHUVjERG\DW SXEOLFDWLRQVDXWKRUHGE\WKHZLWQHVVLQWKHSUHFHGLQJWHQ DXWRSV\DQGQRIDWW\HPEROLVPZDVUHYHDOHGWKLVFRXUW \HDUVDQGWKHVHZHUHQRWSURYLGHGXQWLOsDQXDU\ ILQGV WKDW WKHUH ZDV D mSDOSDEOH GHIHFWl E\ ZKLFK WKH DQG)HEUXDU\UHVSHFWLYHO\ &RXUW ZDV PLVOHG LQ LWV HDUOLHU UXOLQJ  &RUUHFWLQJ LW UHVXOWVLQDGLVSRVLWLRQLQIDYRURIWKH'HIHQGDQWV   D  % ZDVYLRODWHGEHFDXVHGLVFORVXUHRIDQH[SHUW ZLWQHVVPXVWEHDFFRPSDQLHGE\DOLVWRIFDVHVLQZKLFK s$DW WKHH[SHUWKDGWHVWLILHGZLWKLQWKHSURFHHGLQJIRXU\HDUV DQG 'U0ROLQDULjV OLVW RI FDVHV ZDV QRW SURYLGHG XQWLO 3ODLQWLIIWKHQILOHGDPRWLRQIRUUHFRQVLGHUDWLRQRIsXGJH 0DUFK   ZKLOH 'U 6SLW]jV OLVW ZDV QHYHU 5REHUWVjRUGHU2Q2FWREHU'LVWULFWsXGJH/DZVRQ SURYLGHG WKH MXGJH WR ZKRP WKH FDVH KDG EHHQ UHDVVLJQHG GHQLHG 3ODLQWLIIjVPRWLRQIRUUHFRQVLGHUDWLRQRIsXGJH5REHUWVjRUGHU   D  %  ZDV YLRODWHG EHFDXVH D GLVFORVXUH RI DQ 3ODLQWLIIWKHUHDIWHUILOHGDWLPHO\QRWLFHRIDSSHDO H[SHUWZLWQHVVPXVWEHDFFRPSDQLHGE\DGLVFORVXUHRI FRPSHQVDWLRQ SDLG WR WKH ZLWQHVV IRU KLV VWXG\ DQG )DFWV WHVWLPRQ\ DQG 'U 0ROLQDULjV IHHV ZHUH QRW SURYLGHG XQWLO 0DUFK   ZKLOH 'U 6SLW]j ZHUH QHYHU 2QsXO\ VL[W\VL[\HDUROG3KLOOLS5RGJHUVZDV SURYLGHG WUDYHOOLQJ DW DSSUR[LPDWHO\ VL[W\ PLOHVSHUKRXU RQ 1RUWK %ODFN 5RDG LQ %HQWRQ 7RZQVKLS 0LFKLJDQ ZKHQ KH ,Q WKHLU EULHI RQ DSSHDO 'HIHQGDQWV RIIHU QRWKLQJ LQ DSSDUHQWO\ORVWFRQWURORIKLVYHKLFOHDVKHURXQGHGDFXUYH UHVSRQVH WR 3ODLQWLIIjV DUJXPHQWV RQ WKLV LVVXH  +RZHYHU DQGVOLGRIIWKHSDYHGSRUWLRQRIWKHURDGRQWRWKHVKRXOGHU 0RQXPHQWDOjVDWWRUQH\GLGUHVSRQGYLDOHWWHUGDWHG$SULO ZKHUHWKHFDUUROOHGRYHUEHIRUHFRPLQJWRDUHVW$VDUHVXOW  WR 3ODLQWLIIjV OHWWHU GDWHG 0DUFK   UHJDUGLQJ RI WKLV DFFLGHQW 5RGJHUV VXIIHUHG D IUDFWXUHG OHIW IHPXU  5RGJHUVY0RQXPHQWDO 1R 1R 5RGJHUVY0RQXPHQWDO  /LIH,QV&RHWDO /LIH,QV&RHWDO

EURNHQOHJ DQGVHYHUDOFRQWXVLRQV5RGJHUVZDVWUDQVSRUWHG ZKHWKHU 5RGJHUV GLHG VROHO\ RI D IDW HPEROLVP DV D GLUHFW WR &RPPXQLW\ +RVSLWDO LQ &KHER\JDQ 0LFKLJDQ VHHQ E\ UHVXOWRIWKHIUDFWXUHGIHPXUWKDWKHVXVWDLQHGLQWKHDFFLGHQW HPHUJHQF\URRPSK\VLFLDQ'U0LFKDHO sRKQVRQDQGODWHU DQG DQ\ DUJXPHQW PDGH E\ 0RQXPHQWDO WKDW SUHH[LVWLQJ WUDQVIHUUHG WR 1RUWKHUQ 0LFKLJDQ +RVSLWDO m10+l  LQ FRQGLWLRQVFDXVHG5RGJHUVjGHDWKLVIRUWKHMXU\WRKHDUDQG 3HWRVNH\ 0LFKLJDQ ZKHUH KH GLHG VHYHQ GD\V ODWHU RQ ZHLJK6HH0DWVXVKLWD(OHF,QGXV&R86DW sXO\  ,, $W10+5RGJHUVZDVWUHDWHGE\'U3DXO%ODQFKDUGZKR LQLWLDOO\ VFKHGXOHG 5RGJHUV WR XQGHUJR VXUJHU\ IRU KLV sXGJH5REHUWVDQGVXEVHTXHQWO\sXGJH/DZVRQSUHPLVHG IUDFWXUHGOHJRQWKHHYHQLQJRIsXO\ 5RGJHUVZDV WKHLUIDYRUDEOHVXPPDU\MXGJPHQWUXOLQJVIRU0RQXPHQWDORQ DOHUWDQGFRJQL]DQWRIKLVVXUURXQGLQJVDIWHUKLVDFFLGHQW'U WKHWHVWLPRQ\RI0RQXPHQWDOjVH[SHUWZLWQHVV'U6SLW],Q sRKQ'LHGULFKDQLQWHUQLVWDW10+ZDVDOVRFDOOHGLQDVD GRLQJ VR KRZHYHU QHLWKHU MXGJH FRQVLGHUHG 3ODLQWLIIjV FRQVXOWDQW RQ 5RGJHUVj FDVH  IRU WKH SXUSRVH RI REWDLQLQJ PRWLRQWKDWWKHUHSRUWVDQGWHVWLPRQ\RI'U6SLW]VKRXOGQRW SUHRSHUDWLYHFOHDUDQFH,QKLVUHSRUW'U'LHGULFKQRWHG EHFRQVLGHUHGXQGHU)HGHUDO5XOHRI&LYLO3URFHGXUH F  LQDVPXFK DV 0RQXPHQWDO YLRODWHG )HGHUDO 5XOH RI &LYLO +,6725< 0U 3KLOLS 5RGJHUV LV D \HDUROG 3URFHGXUH D 2EYLRXVO\WKHQWRWKHH[WHQWWKDW3ODLQWLIIjV JHQWOHPDQ ZLWK D KLVWRU\ RI 3DUNLQVRQjV GLVHDVH 6K\ FRQWHQWLRQLQWKLVUHJDUGLVPHULWRULRXVWKHYHU\EDVLVXSRQ 'UDJHUV\QGURPHYDVRGHSUHVVRUV\QFRSHK\SHUWHQVLRQ ZKLFK sXGJH 5REHUWV UHQGHUHG KHU RSLQLRQ o 'U 6SLW]jV K\SHUOLSLGHPLDPRGHVWFDURWLGVWHQRVLVDQGVWDWXVSRVW WHVWLPRQ\oZRXOGQRORQJHUEHSUHVHQWDQGWKHRXWFRPHRI SHUPDQHQWSDFHPDNHUSODFHPHQW+HDOVRKDVDKLVWRU\ WKHSURFHHGLQJVZRXOGQHFHVVDULO\EHGLIIHUHQW RISHULSKHUDOYDVFXODURFFOXVLYHGLVHDVHDQGLVVWDWXVSRVW UHVHFWLRQ RI DEGRPLQDO DRUWLF DQHXU\VP ZLWK $VWRWKHPHULWVRI3ODLQWLIIjVFODLP3ODLQWLIIDUJXHVWKDW DRUWRIHPRUDOE\SDVV 0RQXPHQWDOjVDOOHJHGIDLOXUHWRFRPSO\ZLWK)HG5&LY3

   D DVWR'U6SLW]DQG'U0ROLQDULUHQGHUHGDQ\UHSRUWVRU ,Q UHYLHZLQJ KLV SDVW UHFRUG KH GRHV KDYH HSLVRGLF WHVWLPRQ\IURPWKHVHH[SHUWVLQDGPLVVLEOHXQGHU)HG5&LY K\SHUDQGK\SRWHQVLRQDQGKDVIUHTXHQWO\KDGV\VWROLF 3  F    5XOH  F   SURYLGHV WKDW m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l)HG5&LY3 F   FRQIXVLRQDQGWKDWKDVQRWFKDQJHGRIODWH

  3ODLQWLIIjVVSHFLILFREMHFWLRQVEURXJKWSXUVXDQWWR)HGHUDO ,035(66,21 +LV SHULRSHUDWLYH ULVN IRU VXUJHU\ LV 5XOHRI&LYLO3URFHGXUH D DUHDVIROORZV LQFUHDVHGE\3DUNLQVRQjVGLVHDVHJHQHUDOL]HGYDVFXODU GLVHDVH DQG D SDFHPDNHU EXW WKLV LV QRW H[FHVVLYH LQ   D  $ ZDVYLRODWHGEHFDXVH0RQXPHQWDOGLGQRW YLHZ RI WKH VHYHULW\ RI KLV LQMXULHV  , EHOLHYH WKDW KLV SURYLGH WKH DGGUHVVHV RI WKHLU H[SHUW ZLWQHVVHV XQWLO sDQXDU\GD\VODWHXQGHUWKHVFKHGXOLQJRUGHU  5RGJHUVY0RQXPHQWDO 1R 1R 5RGJHUVY0RQXPHQWDO  /LIH,QV&RHWDO /LIH,QV&RHWDO

 7KDWIDWHPEROLWRWDOO\FRPSRVHGVROHO\RIIDWDUH LQMXULHVVKRXOGEHWUHDWHGDJJUHVVLYHO\DVLQGLFDWHG UHDGLO\ GLVVROYDEOH LQ DOFRKRO DQG DUH RIWHQ 2YHUDOO,VHHQRRWKHUFRQWUDLQGLFDWLRQVWRVXUJHU\ XQGHWHFWDEOH RQ DXWRSV\ HVSHFLDOO\ LI WKH WLVVXH VDPSOHV DUH QRW URXWLQHO\ SURFHVVHG DQG DUH QRW s$DW    SURFHVVHGIUHVKDVGLUHFWVPHDUVRUIUR]HQVHFWLRQV  1RWKLQJ,IRXQGLQWKHDXWRSV\RIWKLVSDWLHQWZRXOG +RZHYHU5RGJHUVjFRQGLWLRQZRUVHQHGWKDWGD\VXFKWKDW FDXVHPHWRUXOHRXWWKHIDFWWKDW0U5RGJHUVPD\ KH EHFDPH YHU\ OHWKDUJLF ZLWK GHFUHDVHG PHQWDO VWDWXV KDYH GLHG RI IDW HPEROL FRPSOLFDWLRQV IURP KLV HYLGHQFHGE\H[WUHPHGURZVLQHVVDQGXQUHVSRQVLYHQHVV$V IUDFWXUHGIHPXU DUHVXOWDWWKHUHFRPPHQGDWLRQRIFRQVXOWLQJSK\VLFLDQ'U 'HQLVH6LQNH5RGJHUVjVXUJHU\ZDVFDQFHOHG,QKHUUHSRUW s$DW $FFRUGLQJO\E\YLUWXHRI'U.U]\PRZVNLjV 'U 6LQNH QRWHG WKDW D &$7 VFDQ RI 5RGJHUVj EUDLQ ZDV VHFRQGDIILGDYLWDTXHVWLRQRIIDFWUHPDLQVQRWRQO\EHWZHHQ FRQGXFWHGDQGWKHUHVXOWVGLGQRWLQGLFDWHDQ\DFXWHEOHHGLQJ WKHRSLQLRQVRI'UsRKQVRQDQG'U6SLW]EXWDOVREHWZHHQ RURWKHUFKDQJHV WKHRSLQLRQVRI'U.U]\PRZVNLDQG'U6SLW]7KLVDSSHDUV WR EH VLJQLILFDQW KHUH LQDVPXFK DV OLNH 'U 6SLW] 'U 7KH QH[W GD\ sXO\    5RGJHUVj FRQGLWLRQ .U]\PRZVNLLVDSDWKRORJLVWDQG0RQXPHQWDODWWHPSWHGWR GUDPDWLFDOO\ZRUVHQHGVXFKWKDWWKHSURJUHVVQRWHVLQGLFWHG HOHYDWH WKH RSLQLRQ RI 'U 6SLW] RYHU WKDW RI 'U sRKQVRQ WKDW5RGJHUVZDVVXIIHULQJIURPSXOPRQDU\HGHPDDQGKLV EHFDXVH'U6SLW]H[DPLQHGWKHFRUSVHZKLOH'UsRKQVRQ EUHDWKLQJEHFDPHVRVKDOORZWKDWKHKDGWREHSODFHGRQD H[DPLQHG5RGJHUVjOLYHERG\ YHQWLODWRULQRUGHUWREUHDWK)LYHGD\VODWHUDIWHUWKHIDPLO\ DJUHHG WKDW KH VKRXOG EH UHPRYHG IURP WKH OLIH VXSSRUW ,QDGGLWLRQZHDUHQRWSHUVXDGHGE\0RQXPHQWDOjVFODLP 5RGJHUVH[SLUHG WKDW'U.U]\PRZVNLjVVHFRQGDIILGDYLWVKRXOGEHVWULFNHQ EHFDXVHLWFRQIOLFWVZLWKKLVILUVWDIILGDYLW$UHYLHZRIWKH $QDXWRSV\ZDVSHUIRUPHGRQ5RGJHUVjERG\E\SDWKRORJLVW WZRDIILGDYLWVGRHVQRWVXSSRUWWKLVDUJXPHQW,QIDFW'U 'U*HRUJH.U]\PRZVNLDQGXSRQFRPSOHWLRQWKHUHRI'U .U]\PRZVNLjVVHFRQGDIILGDYLWH[SODLQVDQGVXSSOHPHQWVKLV .U\]PRZVNL LQGLFDWHG WKH IROORZLQJ DV WKH mSDWKRORJLF ILUVWDIILGDYLWEXWWKHUHLVQRWKLQJFRQWUDGLFWRU\EHWZHHQWKH GLDJQRVHV l WZR)LQDOO\ZHDUHQRWSHUVXDGHGE\0RQXPHQWDOjVFODLP WKDW3ODLQWLIIKDVIDLOHGWRGHPRQVWUDWHWKDW5RGJHUVjGHDWK &DXVHRI'HDWK $QR[LF HQFHSKDORSDWK\GXHWR ZDV QRW FDXVHG RU FRQWULEXWHG WR E\ KLV SUHH[LVWLQJ K\SRWHQVLYHHYHQWIROORZLQJPRWRU FRQGLWLRQV  3ODLQWLIIjV WUHDWLQJ SK\VLFLDQ 'U sRKQVRQ YHKLFOHFUDVK DWWULEXWHG5RGJHUVjGHDWKVROHO\WRDIDWHPEROLVPFDXVHGDV 0DQQHURI'HDWK $FFLGHQW DGLUHFWUHVXOWRIWKHIUDFWXUHGIHPXUWKDWKHVXVWDLQHGLQWKH DFFLGHQW DQG H[SUHVVO\ RSLQHG WKDW 3ODLQWLIIjV SUHH[LVWLQJ s$DW FRQGLWLRQV GLG QRW FRQWULEXWH WR 3ODLQWLIIjV GHDWK  'U .U]\PRZVNL WKH SDWKRORJLVW ZKR FRQGXFWHG 5RGJHUVjV 'U%ODQFKDUGGLVDJUHHGZLWKWKHSDWKRORJLFGLDJQRVLVDV DXWRSV\VWDWHGLQKLVDIILGDYLWWKDWIDWHPREOLDUHQRWDOZD\V QRWHGDERYH$FFRUGLQJWR'U%ODQFKDUG5RGJHUVGLHGIURP SUHVHQWRQDXWRSV\DQGWKDWKHKDGQRWUXOHGWKLVRXWDVWKH IDWHPEROLV\QGURPHVXVWDLQHGDVDGLUHFWFRPSOLFDWLRQIURP FDXVHRI5RGJHUVjGHDWK9LHZLQJWKLVHYLGHQFHLQWKHOLJKW 5RGJHUVjIUDFWXUHGIHPXU6SHFLILFDOO\ZKHQTXHVWLRQHGDW PRVW IDYRUDEOH WR 3ODLQWLII D TXHVWLRQ RI IDFW H[LVWV DV WR KLVGHSRVLWLRQ'U%ODQFKDUGRSLQHGDVIROORZV  5RGJHUVY0RQXPHQWDO 1R 1R 5RGJHUVY0RQXPHQWDO  /LIH,QV&RHWDO /LIH,QV&RHWDO

4 /HW PH DVN \RX WKDW TXHVWLRQ ILUVW  &RXOG WKLV DXWRSV\HYHQWKRXJKWKH\PLJKWKDYHEHHQWKHFDXVHRIGHDWK IUDFWXUHDORQHDQGMXVWWKLVIUDFWXUHNLOOVRPHERG\" DQG0RQXPHQWDOjVH[SHUWZLWQHVV'U6SLW]FODLPLQJWKDWWKH &DQ\RXDQVZHUWKDWTXHVWLRQ" SUHVHQFHRIIDWW\HPEROLDUHHDVLO\GHWHFWHGWKURXJKDVLPSOH $ :HOOQRUPDOO\MXVWIUDFWXULQJWKHIHPXUZLWKRXWDQ\ WHVW$FFRUGLQJO\DQLVVXHRIIDFW UHPDLQHGIRUWULDODVWR FRPSOLFDWLRQVFRQVHTXHQWWRWKHIUDFWXUHZRXOGQRW ZKLFK H[SHUW RSLQLRQ ZDV PRUH FUHGLEOH  ,QDVPXFK DV D EHDIDWDOLQMXU\ UHDVRQDEOHMXURUPD\KDYHIRXQG'UsRKQVRQPRUHFUHGLEOH 4 :RXOG\RXDJUHHZLWKWKHVWDWHPHQWWKDWEXWIRUKLV WKHLVVXHLVmJHQXLQHlDQGEHFDXVHHVWDEOLVKPHQWRIWKLVIDFW SUHH[LVWLQJVLFNQHVVHVWKHDFFLGHQWDQGLQMXULHVKH ZRXOG DIIHFW WKH RXWFRPH RI WKH ODZVXLW WKH IDFW ZDV VXVWDLQHGLQWKHDFFLGHQWZRXOGQRWEHVXIILFLHQWWR mPDWHULDOl6HH$QGHUVRQ86DW,QRWKHUZRUGV FDXVHKLVGHDWK" DUHDVRQDEOHMXURUPD\KDYHIRXQGLQIDYRURI3ODLQWLIIEDVHG $ ,ZRXOGGLVDJUHHZLWKWKDWVWDWHPHQW XSRQ'UsRKQVRQjVWHVWLPRQ\WKDWIDWHPEROLDUHQRWDOZD\V 4 $QGZK\ZRXOG\RXGLVDJUHHZLWKWKDW" GHWHFWHGRQDXWRSV\DVZHOODVWKHWHVWLPRQ\RI3ODLQWLIIjV $ %HFDXVH , WKLQN 0U 5RGJHUV GLHG EHFDXVH RI WKH RWKHUWUHDWLQJSK\VLFLDQVLQGLFDWLQJWKHLUEHOLHIWKDW5RGJHUV SXOPRQDU\ FRPSOLFDWLRQV LQGXFHG E\ WKH IUDFWXUH GLHGRIDIDWHPEROLWKHUHE\PDNLQJVXPPDU\MXGJPHQWLQ WKHGLIIHUHQWLDOGLDJQRVLVEHLQJIDWHPEROLV\QGURPH IDYRURI0RQXPHQWDOLQDSSURSULDWH6HHLG DGXOWUHVSLUDWRU\GLVWUHVVV\QGURPHRULQIHFWLRQ%XW WKDWVHHPVOHVVOLNHO\WRPH $OWKRXJK'U.U]\PRZVNLVWDWHGLQKLVDIILGDYLWWKDWKHGLG 4 $QGWKDWFRQFOXVLRQWKHQWKDW\RXjYHMXVWJLYHQPH QRW GHWHFW WKH SUHVHQFH RI IDW HPEROL XSRQ PLFURVFRSLF LVLQGLVDJUHHPHQWZLWKWKHDXWRSV\UHSRUW LVQjWWKDW H[DPLQDWLRQDWDXWRSV\WKLVVWDWHPHQWJRHVWRWKHZHLJKWWKDW WUXH" DMXURUPD\DIIRUG'UsRKQVRQjVWHVWLPRQ\WKDWIDWHPEROLDUH $ ,WjVLQGLVDJUHHPHQWZLWKWKHVHVWDWHPHQWVKHUHRQ QRW DOZD\V SUHVHQW  ,W GRHV QRW KRZHYHU QHJDWH 'U WKHDXWRSV\UHSRUW sRKQVRQjVWHVWLPRQ\IRUSXUSRVHVRIVXPPDU\MXGJPHQW6HH 0DWVXVKLWD (OHF ,QGXV &R  86 DW  ILQGLQJ WKDW s$DW 'U%ODQFKDUGRSLQHGWKDW5RGJHUVjFDXVH ZKHQ UHYLHZLQJ D PRWLRQ IRU VXPPDU\ MXGJPHQW WKH RIGHDWKZDVDIDWHPEROLVPIURPWKHIUDFWXUHVLWH s$DW HYLGHQFH DQG DOO UHDVRQDEOH LQIHUHQFHV GUDZQ WKHUHIURP LV  YLHZHGLQWKHOLJKWPRVWIDYRUDEOHWRWKHQRQPRYLQJSDUW\ 

'U sRKQVRQ VLPLODUO\ RSLQHG GXULQJ KLV GHSRVLWLRQ DV 0RUHRYHU LQ 3ODLQWLIIjV PRWLRQ IRU UHFRQVLGHUDWLRQ VKH IROORZV VXEPLWWHG D VHFRQG DIILGDYLW IURP WKH SDWKRORJLVW ZKR FRQGXFWHG5RGJHUVjDXWRSV\'U.U]\PRZVNLZKHUHLQ'U 4 'R\RXKDYHDQRSLQLRQDVWRZKDWWKHFDXVHRI0U .U]\PRZVNLDYHUUHG 5RGJHUVjGHDWKZDVDQGWKHHYHQWVWKDWOHGXSWRKLV GHDWK"  7KDW DW WKH WLPH RI P\ VLJQLQJ WKDW $IILGDYLW DQG $ ,KDYHDSUHWW\JRRGLGHDZK\KHGLHGEXWLWjVQRW DOVR DW WKH SUHVHQW WLPH , ZDV QRW UXOLQJ RXW WKH VRPHWKLQJWKDWjVSURYDEOHUHDOO\(YHQDWDXWRSV\ SRVVLELOLW\WKDWWKLVSDWLHQWH[SHULHQFHGIDWHPEROL LWjV QRW DOZD\V SURYDEOH  %XW LQ D SDWLHQW ZLWK D V\QGURPH ORQJERQH IUDFWXUH OLNH WKLV ZKR VXGGHQO\  7KDW IDW HPEROL DUH QRW DOZD\V GHWHFWDEOH RQ GHWHULRUDWH>V@PHQWDOO\WKHPRVWOLNHO\WKLQJZRXOG DXWRSV\ EHZKDWjVFDOOHGDIDWHPEROLVPV\QGURPH  5RGJHUVY0RQXPHQWDO 1R 1R 5RGJHUVY0RQXPHQWDO /LIH,QV&RHWDO /LIH,QV&RHWDO

DGPLVVLEOHIRUWKHSXUSRVHRIHVWDEOLVKLQJWKDW5RGJHUVjGLHG 7KHUHjVIDWLQVLGH\RXUERQHV$QGLI\RXEUHDN RIDIDWHPEROLVPGLUHFWO\UHODWHGWRWKHIUDFWXUHGIHPXUWKDW WKHP DQG WKH\ JHW LQWR WKH EORRGVWUHDP WKH\ FDQ KH VXVWDLQHG LQ WKH DFFLGHQW WKH FRXUW ODWHU IRXQG LQ LWV HPEROL]HWR\RXUFHUHEUDOYHVVHOVDQG WKDWjVIDWDO RSLQLRQJUDQWLQJ0RQXPHQWDOjVPRWLRQIRUUHFRQVLGHUDWLRQ XVXDOO\2UFHUWDLQO\QHDUO\IDWDO DQGVXPPDU\MXGJPHQWWKDWWKHH[SHUWRSLQLRQVIURPWKHVH , ZRXOG JXHVV LQ KLV FDVH WKDWjV SUREDEO\ ZKDW SK\VLFLDQVIDLOHGWRHVWDEOLVKmLQIDFWlWKDW5RGJHUVGLHGRID KDSSHQHG+HQHYHUVKRZHGVLJQVRIVRUWRIFDUGLDF IDWHPEROLVP GHFRPSHQVDWLRQ RU VRPHWKLQJ OLNH DV DVVRFLDWHG KHDUWDWWDFNRUVRPHWKLQJOLNHWKDW6RWKDWjGEHWKH 7KHGLVWULFWFRXUWWKHQFRPSDUHG3ODLQWLIIjVHYLGHQFHWRWKH ILUVWoWKDWjGEHP\EHVWJXHVV UHSRUWIURP0RQXPHQWDOjVH[SHUW'U:HUQHU6SLW]LQZKLFK 4 $QGFDQ\RXH[SODLQKRZWKDWZRXOGZRUNH[DFWO\ 6SLW]VWDWHGWKDWmµWKHILQGLQJRIIDWHPEROLLQPLFURVFRSLF WKH IDW HPEROLVP \RXjYH WDONHG DERXW"  ,V LW o , VHFWLRQVLVHDV\IDVWDQGGHILQLWLYHjl s$DW 7KHFRXUW PHDQZKHUHZRXOGWKHIDWFRPHIURPo RSLQHGWKDWm3ODLQWLIIGRHVQRWGLVSXWHWKDWWKHUHLVDZD\WR $ 7KHIDWFRPHVIURPo GHWHUPLQHWKHSUHVHQFHRIIDWW\HPEROLVPl s$DW 7KH 4 oDQGZKHUHZRXOGLWJRWR" GLVWULFWFRXUWDOVRORRNHGWR'U.U]\PRZVNLjVLQLWLDODIILGDYLW $ 7KHIDWFRPHVIURPoDOOERQHVEHOLHYH LWRUQRW ZKHUHLQKHIRXQGQRIDWHPEROLRQPLFURVFRSLFH[DPLQDWLRQ KDYHIDWW\WLVVXHLQWKHPLQWKHPDUURZ$QGWKHUHjV %DVHG XSRQ WKLV HYLGHQFH WKH FRXUW FRQFOXGHG WKDW QRW PXFK \RX FDQ GR DERXW LW UHDOO\  6RPHWLPHV m>L@QDVPXFK DV 'HIHQGDQWV KDYH GHPRQVWUDWHG WKURXJK ZKHQWKHORQJERQHVEUHDNZKLFKLVWKHRQHPRVW XQUHEXWWHGWHVWLPRQ\WKDWDQµHDV\IDVWDQGGHILQLWLYHjWHVW DVVRFLDWHGZLWKDIDWHPEROLVP\RXNQRZLWJHWV FDQ EH SHUIRUPHG WR GHWHUPLQH WKH SUHVHQFH RI IDWW\ LQWR\RXUEORRGVWUHDP,PHDQWKHUHjVDUWHULHVDQG HPEROLVPDQGWKDWVXFKWHVWZDVGRQHRQ0U5RGJHUVjERG\ YHLQVLQWKHDUHD$QGDQ\WLVVXHWKDWjVWKHUHFDQJHW DW DXWRSV\ DQG QR IDWW\ HPEROLVP ZDV UHYHDOHG WKLV FRXUW LQWR \RXU EORRG DQG \RXU FLUFXODWLRQ DQG WKHQ LW ILQGVWKDWWKHUHZDVDµSDOSDEOHGHIHFWjE\ZKLFKWKH&RXUW WUDYHOVWKURXJK\RXUFLUFXODWLRQDQGFDQHPEROL]H ZDV PLVOHG LQ LWV HDUOLHU UXOLQJ  &RUUHFWLQJ LW UHVXOWV LQ D ZKLFKPHDQVJRIURP\RXUKHDUWXSWR\RXUKHDG GLVSRVLWLRQLQIDYRURIWKH'HIHQGDQWVl s$DW \RXUFHUHEUDOYHVVHOV 2QFHLWGRHVWKDWLWEORFNVWKHPRIIDQG\RXKDYH 7KHUHFRUGGRHVQRWVXSSRUWWKHGLVWULFWFRXUWjVILQGLQJWKDW EDVLFDOO\ DV VWURNH  ,WjV QRW FRPPRQ EXW LWjV o , m3ODLQWLIIGRHVQRWGLVSXWHWKDWWKHUHLVDZD\WRGHWHUPLQHWKH PHDQLWjVQRWUDUH,WKDSSHQV$QGZHZRUU\DERXW SUHVHQFHRIIDWW\HPEROLVPl,QGHHGWKURXJKWKHDIILGDYLWRI LW  %XW \RX FDQjW GR DQ\WKLQJ WR SUHYHQW LW  $QG 'UsRKQVRQ3ODLQWLIIGLVSXWHGWKHLVVXHRIZKHWKHUWKHUHLVD RQFHLWKDSSHQVDOO\RXFDQGRLVWU\DQGVXSSRUW ZD\WRGHWHUPLQHIDWW\HPEROLVPRQDXWRSV\6SHFLILFDOO\ SDWLHQWV%XW\RXFDQjWUHDOO\GRPXFKDERXWLW 'U sRKQVRQ RSLQHG LQ UHIHUHQFH WR KLV EHOLHI WKDW 3ODLQWLII 4 7KHUHjVQRPHGLFDWLRQWKDW\RXFDQJLYHWRo GLHG RI D IDW HPEROLVP WKDW mLWjV QRW VRPHWKLQJ WKDWjV $ 7RSUHYHQWLW"1RWWKDW,jPDZDUHRI,WjVDUDUHEXW SURYDEOHUHDOO\(YHQDWDXWRSV\LWjVQRWDOZD\VSURYDEOHl EDVLFDOO\XQSUHYHQWDEOHFRPSOLFDWLRQRIDORQJERQH s$DW 7KHUHIRUHWKHGLVWULFWFRXUWKDGEHIRUHLWRQ IUDFWXUH 0RQXPHQWDOjV PRWLRQ IRU UHFRQVLGHUDWLRQ RI WKH GHQLDO RI 4 2ND\6RWKHIDWWKHZRXOGKDYHJRQHIURPWKHDUHD VXPPDU\ MXGJPHQW WKH FRQIOLFWLQJ RSLQLRQV RI WZR H[SHUW RIWKHIUDFWXUHo ZLWQHVVHV 3ODLQWLIIjVH[SHUWZLWQHVV'UsRKQVRQFODLPLQJ $ 5LJKW WKDWWKHSUHVHQFHRIIDWW\HPEROLDUHQRWDOZD\VSUHVHQWRQ 4 oWRWKHEUDLQ"  5RGJHUVY0RQXPHQWDO 1R 1R 5RGJHUVY0RQXPHQWDO  /LIH,QV&RHWDO /LIH,QV&RHWDO

$ 5LJKW  ,W SOXJV XS WKH DUWHU\ ZKLFK SOXJV XS o WKHUXOHDQGDIHZRWKHUYLRODWLRQVsXGJH5REHUWVIRXQGWKDW ZKLFK WKHQ GHQLHV R[\JHQ WR WKH EUDLQ WLVVXH WKDW EHFDXVHVKHZDVGHQ\LQJ0RQXPHQWDOjVPRWLRQIRUVXPPDU\ UHTXLUHVWKDWDUWHULDOIORZZKLFKLVZKDWDVWURNHLV MXGJPHQW VKH QHHG QRW FRQVLGHU 3ODLQWLIIjV FODLP WKDW WKH ,WjVZKDWDQHPEROLFVWURNHLV WHVWLPRQ\DQGUHSRUWVRI0RQXPHQWDOjVH[SHUWVVKRXOGQRWEH FRQVLGHUHG s$DW ',6&866,21 )LQDOO\ LQ UHVSRQVH WR GHIHQVH FRXQVHOjV TXHVWLRQV DV WR ZKHWKHU KH ZDV RI WKH RSLQLRQ WKDW 5RGJHUV GLHG RI SUH , H[LVWLQJFRQGLWLRQV'UsRKQVRQRSLQHG 7KLV &RXUW UHYLHZV D GLVWULFW FRXUWjV JUDQW RI VXPPDU\ $ 1R,WKLQNKHo,WKLQNKHGLHGRIDIDWHPEROLVP MXGJPHQWGHQRYR6HH:HHNVY3RUWDJH&RXQW\([HFXWLYH , WKLQN WKDW FDPH IURP KLV WUDXPD ZKLFK LV D 2IILFHV  )G   WK &LU    6XPPDU\ IUDFWXUHGIHPXU$QG,GRQjWWKLQNWKDWKLVoWKDW MXGJPHQW LV DSSURSULDWH LI mWKH SOHDGLQJV GHSRVLWLRQV WKDWZKROHVFHQDULRKDGDQ\WKLQJWRGRZLWKKLVSUH DQVZHUVWRLQWHUURJDWRULHVDQGDGPLVVLRQVRQILOHWRJHWKHU H[LVWLQJFRQGLWLRQVZKDWHYHUWKH\ZHUH ZLWKDIILGDYLWVLIDQ\VKRZWKDWWKHUHLVQRJHQXLQHLVVXHDV WRDQ\PDWHULDOIDFWDQGWKDWWKHPRYLQJSDUW\LVHQWLWOHGWRD s$DW  MXGJPHQWDVDPDWWHURIODZl)HG5&LY3 F $QLVVXH RIIDFWLVmJHQXLQHlLIWKHHYLGHQFHLVVXFKWKDWDUHDVRQDEOH $V QRWHG SUHYLRXVO\ 0RQXPHQWDO DWWHPSWHG WR SUHYHQW WULHURIIDFWFRXOGUHWXUQDYHUGLFWIRUWKHQRQPRYDQW6HH 3ODLQWLIIIURPDGPLWWLQJWKHWHVWLPRQ\RI'UsRKQVRQDVZHOO $QGHUVRQY/LEHUW\/REE\,QF86    DV 'U %ODQFKDUG LQWR HYLGHQFH ZKHQ 'HIHQGDQW ILOHG LWV 7KHVXEVWDQWLYHODZLGHQWLILHVIDFWVWKDWDUHmPDWHULDOl)DFWV PRWLRQ IRU VXPPDU\ MXGJPHQW  +RZHYHU LQ KHU RUGHU DUHmPDWHULDOlRQO\LIHVWDEOLVKPHQWWKHUHRIPLJKWDIIHFWWKH GHQ\LQJ0RQXPHQWDOjVPRWLRQIRUVXPPDU\MXGJPHQWsXGJH RXWFRPH RI WKH ODZVXLW XQGHU JRYHUQLQJ VXEVWDQWLYH ODZ 5REHUWV IRXQG WKDW WKH WHVWLPRQ\ RI WKHVH WZR SK\VLFLDQV $QGHUVRQ  86 DW   $ FRPSOHWH IDLOXUH RI SURRI FRXOGEHDGPLWWHGDQGFRQVLGHUHG3ODLQWLIILQWXUQVRXJKWWR FRQFHUQLQJDQHVVHQWLDOHOHPHQWQHFHVVDULO\UHQGHUVDOORWKHU KDYHWKHUHSRUWVDQGWHVWLPRQ\RI0RQXPHQWDOj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jVPRWLRQIRUVXPPDU\ YLRODWLRQRI D  % IDLOLQJWRGLVFORVHFXUULFXOXPYLWDH MXGJPHQWWKHGLVWULFWFRXUWIRXQGWKDWm3ODLQWLIISUHVHQWHGQR RIWKHH[SHUWVRQDWLPHO\EDVLVLQYLRODWLRQRI D  %  HYLGHQFHWKDW5RGJHUVGLGLQIDFWGLHIURPDIDWW\HPEROLl IDLOLQJWRSURYLGHDOLVWRIH[KLELWVWRVXSSRUWWKHZLWQHVVHVj s$DW ,QRWKHUZRUGVDOWKRXJKLQLWVRSLQLRQGHQ\LQJ FRQFOXVLRQVLQYLRODWLRQRIWKHUXOHIDLOLQJWRSURYLGHDOLVWRI 0RQXPHQWDOjVPRWLRQIRUVXPPDU\MXGJPHQWWKHFRXUWIRXQG WKHZLWQHVVHVjSXEOLFDWLRQVRQDWLPHO\EDVLVLQYLRODWLRQRI WKH H[SHUW RSLQLRQV IURP 5RGJHUVj WUHDWLQJ SK\VLFLDQV