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

%(1(),76 &200,77(( 2) ; 6$,17*2%$,1  &25325$7,21 *(25*( %   1R $0266 %58&( + &2:*,//  67(3+(1 $ 6(*(%$57+ !  '(11,6 s %$.(5LQWKHLU  FDSDFLWLHVDVPHPEHUVRIWKH  %HQHILWV&RPPLWWHHRI6DLQW  *REDLQ&RUSRUDWLRQ  3ODLQWLIIV$SSHOODQWV    Y   .(< 75867 &203$1< 2)  2+,21$7UXVWHHRIWKH  )XURQ&RPSDQ\(PSOR\HH   6WRFN2ZQHUVKLS3ODQ  'HIHQGDQW$SSHOOHH  1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW&OHYHODQG 1Rn3DWULFLD$*DXJKDQ'LVWULFWsXGJH $UJXHG $XJXVW 'HFLGHGDQG)LOHG 'HFHPEHU

  %HQHILWV&RPPLWWHHHWDOY 1R .H\7UXVW&RPSDQ\RI2KLR

%HIRUH 6,/(5&2/(DQG&/$<&LUFXLWsXGJHV BBBBBBBBBBBBBBBBB &2816(/ $5*8('   0LFKDHO / %DQNV 025*$1 /(:,6 %2&.,86//33KLODGHOSKLD3HQQV\OYDQLDIRU$SSHOODQWV sRKQ : (GZDUGV ,, s21(6 '$< 5($9,6  32*8( 0HQOR 3DUN &DOLIRUQLD IRU $SSHOOHH  3HWHU % 'RODQ 81,7('67$7(6'(3$570(172)/$%252)),&( 2)7+(62/,&,725:DVKLQJWRQ'&IRU$PLFXV&XULDH 21%5,() 0LFKDHO/%DQNV.D\.\XQJVXQ<X%ULDQs 'RXJKHUW\ 025*$1 /(:,6  %2&.,86 //3 3KLODGHOSKLD3HQQV\OYDQLDIRU$SSHOODQWVsRKQ:(GZDUGV ,, s21(6 '$< 5($9,6  32*8( 0HQOR 3DUN &DOLIRUQLD3DWULFLD(VFKEDFK+DOOsHIIUH\6/HDYLWWs21(6 '$<5($9,6 32*8(&OHYHODQG2KLRIRU$SSHOOHH 3HWHU % 'RODQ 81,7(' 67$7(6 '(3$570(17 2) /$%252)),&(2)7+(62/,&,725:DVKLQJWRQ'& IRU$PLFXV&XULDH BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB 6,/(5 &LUFXLW sXGJH  3ODLQWLII %HQHILWV &RPPLWWHH RI 6DLQW*REDLQ&RUSRUDWLRQDQG3ODLQWLIIV*HRUJH%$PRVV %UXFH + &RZJLOO 6WHSKHQ $ 6HJHEDUWK DQG 'HQQLV s %DNHU LQ WKHLU FDSDFLWLHV DV PHPEHUV RI WKH %HQHILWV &RPPLWWHH RI 6DLQW*REDLQ &RUSRUDWLRQ FROOHFWLYHO\ WKH m%HQHILWV &RPPLWWHHl  DSSHDO WKH JUDQW RI VXPPDU\ MXGJPHQWWR'HIHQGDQW.H\7UXVW&RPSDQ\RI2KLR1$ WKH m7UXVWHHl  ZKLFK VHUYHV DV WKH WUXVWHH RI WKH )XURQ &RPSDQ\ (PSOR\HH 6WRFN 2ZQHUVKLS 3ODQ WKH m)XURQ (623l 7KHGLVWULFWFRXUWIRXQGWKDWUHSD\PHQWE\WKH)XURQ (623 RI D ORDQ WR 6DLQW*REDLQ &RUSRUDWLRQ m6DLQW*REDLQl WKHVXFFHVVRUFRUSRUDWLRQWR)XURQZRXOG YLRODWH WKH 7UXVWHHjV ILGXFLDU\ GXWLHV XQGHU WKH (PSOR\HH 1R %HQHILWV&RPPLWWHHHWDOY  .H\7UXVW&RPSDQ\RI2KLR

5HWLUHPHQW,QFRPH6HFXULW\$FWRI  m(5,6$l 6WDW DVDPHQGHG 86&†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† D RIWKH,QWHUQDO5HYHQXH&RGHRI  WKH m&RGHl  DV DPHQGHG DQG DV DQ HPSOR\HH VWRFN RZQHUVKLSSODQDVGHILQHGE\†  H  RIWKH&RGH7KH )XURQ(623ZDVGHVLJQHGWRLQYHVWSULPDULO\ LQVKDUHVRI )XURQVWRFN)XURQHVWDEOLVKHGWKH)XURQ(623WRSURYLGH HOLJLEOHHPSOR\HHVZLWKWKHRSSRUWXQLW\WRREWDLQDEHQHILFLDO LQWHUHVWLQWKHFRPSDQ\WKURXJKWKHDOORFDWLRQRI)XURQVWRFN WRLQGLYLGXDOSDUWLFLSDQWDFFRXQWV )XURQ DQG $PHULWUXVW &RPSDQ\ 1DWLRQDO $VVRFLDWLRQ HQWHUHGLQWRWKH)XURQ&RPSDQ\(PSOR\HH6WRFN2ZQHUVKLS 3ODQ 7UXVW $JUHHPHQW WKH m7UXVW $JUHHPHQWl  RQ )HEUXDU\ 7KH7UXVW$JUHHPHQWSURYLGHVIRUWKH HVWDEOLVKPHQW RI WKH )XURQ &RPSDQ\ (PSOR\HH 6WRFN 2ZQHUVKLS3ODQ7UXVW WKHm7UXVWl WRKROGWKHDVVHWVRIWKH )XURQ(623ZLWK$PHULWUXVWDVWKHWUXVWHH7KH7UXVWHHLV WKHVXFFHVVRUWR$PHULWUXVW 7KH %HQHILWV &RPPLWWHH FODLPV WKDW XQGHU WKH 7UXVW $JUHHPHQWLWKDVIXOOGLVFUHWLRQWRFRQVWUXHDQGLQWHUSUHWWKH  %HQHILWV&RPPLWWHHHWDOY 1R 1R %HQHILWV&RPPLWWHHHWDOY  .H\7UXVW&RPSDQ\RI2KLR .H\7UXVW&RPSDQ\RI2KLR

WHUPVRIWKH)XURQ(6237KH7UXVWHHLVWKHFXVWRGLDQRIWKH VHFXULW\ LQWHUHVW LQ WKH VXEIXQG DV FROODWHUDO WR VHFXUH WKH )XURQ(623jVDVVHWVDQGKROGVWKRVHDVVHWVXQGHUWKH7UXVW H[HPSWORDQV:HVD\mVLPSO\lEXWQRGRXEWWKLVZLOODGG $JUHHPHQW  LW LV UHVSRQVLEOH IRU PDNLQJ SD\PHQWV DQG VRPHLQFUHDVHGH[SHQVHDQGHIIRUWWRWKHSURFHVV,QHVVHQFH GLVWULEXWLRQVDVSURYLGHGLQWKH)XURQ(623DQGWKH7UXVW D QHZ UHTXLUHPHQW IRU H[HPSW ORDQV ZLOO KDYH EHHQ $JUHHPHQWDWWKHGLUHFWLRQRIWKH%HQHILWV&RPPLWWHHWRWKH HVWDEOLVKHGE\WKH'2/ZLWKRXWUHVRUWWRWKHDSSURSULDWHUXOH H[WHQWSHUPLWWHGE\ODZ PDNLQJ SURFHVVHV  ,Q DGGLWLRQ LJQRUHG LQ WKH '2/ DQG 7UXVWHHjVDUJXPHQWVLVWKDWVRPHWLPHVWKLUGSDUWLHVPDNHWKH 7KH7UXVWHHFDXVHGWKH7UXVWWRHQWHULQWRDVHULHVRIORDQ H[HPSWORDQVWROHYHUDJHG(623V&RQFHLYDEO\WKRVHORDQV WUDQVDFWLRQVZLWK)XURQZKHUHE\)XURQORDQHGPRQH\WRWKH PD\QRWEHVHFXUHGDQGWKRVHILQDQFLDOLQVWLWXWLRQVZLOOEH )XURQ (623 WR ILQDQFH WKH SXUFKDVH RI )XURQ VWRFN WKH VXEMHFWWRWKHVDPHSRWHQWLDOIRUIHLWXUHDVWKH&RPSDQ\LQWKLV m([HPSW/RDQVl 7KH([HPSW/RDQVZHUHSHUPLWWHGE\WKH FDVH WHUPVRIWKH)XURQ(6237KH([HPSW/RDQVDUHVXEMHFWWR (5,6$DQGWKH&RGHZKLFKJHQHUDOO\SURKLELWORDQVEHWZHHQ ,Q VXP WKRXJK WKH 7UXVWHH FRXOG WHFKQLFDOO\ mVWLIIl WKH HPSOR\HUV DQG WKH HPSOR\HH EHQHILW SODQV WKH\ VSRQVRU HPSOR\HUIRUWKHORDQXQGHUWKH/RDQ$JUHHPHQWLWGRHVQRW +RZHYHUWKH([HPSW/RDQVZHUHVWUXFWXUHGWRIDOOZLWKLQWKH VHUYH WKH ODZ RU SROLF\ VXUURXQGLQJ (623V WR SHUPLW WKH H[HPSWLRQVHWIRUWKLQ(5,6$ 86&† E  DQG 7UXVWHHWRXVHWKLVDELOLW\WRMXVWLI\GLVUHJDUGLQJWKH(623 WKH&RGH86&†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m6XEIXQGl UDWKHUWKDQDOORFDWHGWRWKHDFFRXQW RIDQ\LQGLYLGXDO)XURQ(623SDUWLFLSDQW1RVHFXULW\ZDV SOHGJHGUHQGHULQJWKH([HPSW/RDQVXQVHFXUHG )XURQ PDGH FRQWULEXWLRQV WR WKH )XURQ (623 WKDW WKH 7UXVWHHXVHGWRPDNHSULQFLSDODQGLQWHUHVWSD\PHQWVWR)XURQ RQWKH([HPSW/RDQV$VWKH([HPSW/RDQVZHUHUHSDLGD SRUWLRQRIWKH)XURQVWRFNLQWKH6XEIXQGZDVUHOHDVHGEDVHG XSRQDIRUPXODVHWIRUWKLQ†RIWKH)XURQ(623$VWKH )XURQVWRFNZDVUHOHDVHGLWZDVDOORFDWHGWRWKHLQGLYLGXDO DFFRXQWVRIWKH)XURQ(623SDUWLFLSDQWVSXUVXDQWWR†† DQGRIWKH)XURQ(6237KXVZKHQWKH)XURQ(623ZDV ILUVWHVWDEOLVKHGLQGLYLGXDOSDUWLFLSDQWDFFRXQWVZHUHHPSW\ EHFDXVHDOORIWKH)XURQVWRFNKHOGE\WKH7UXVWZDVLQWKH 6XEIXQG  2YHU WLPH DV HDUQHG WKH )XURQ VWRFN ZDV  %HQHILWV&RPPLWWHHHWDOY 1R 1R %HQHILWV&RPPLWWHHHWDOY  .H\7UXVW&RPSDQ\RI2KLR .H\7UXVW&RPSDQ\RI2KLR

7KXV WKH ILGXFLDU\ FRQFHUQ LV ZKHWKHU SD\PHQW RI WKH WUDQVIHUUHG IURP WKH 6XEIXQG DQG DOORFDWHG WR LQGLYLGXDO PRQH\ RZHG WR WKH &RPSDQ\ ZRXOG LQIULQJH RQ WKH SDUWLFLSDQWDFFRXQWV SDUWLFLSDQWVjULJKWVWRWKDWPRQH\LILWFDQQRWEHSDLG7KH %HQHILWV&RPPLWWHHDSWO\UHVWDWHVWKLVLVVXHDVm>S@XWDQRWKHU 2Q2FWREHU DSSUR[LPDWHO\ RI)XURQjVVWRFN ZD\ UHSD\PHQW RI WKH ([HPSW /RDQV YLRODWHV >(5,6$ ZDVDFTXLUHGE\)&<$FTXLVLWLRQ&RUSRUDWLRQ m)&<l LQD ILGXFLDU\ REOLJDWLRQV@ EHFDXVH LW ZRXOG YLRODWH >(5,6$ FDVK WHQGHU RIIHU  )&< LV D ZKROO\ RZQHG VXEVLGLDU\ RI ILGXFLDU\REOLJDWLRQV@l7KHUHPDLQGHURQO\DULVHVDVDUHVXOW 6DLQW*REDLQ7KHDFTXLVLWLRQLQFOXGHGWKHSXUFKDVHIRUFDVK RI(5,6$jVSURKLELWLQJUHSD\PHQWRIWKHORDQDQG(5,6$j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sRUGDQ VXSSRUWV WKLV FRQFOXVLRQ DV WKH UHSD\PHQW RI $VRI2FWREHU WKHGD\EHIRUHWKH PRQH\ERUURZHGMXVWDVSD\PHQWRIDWWRUQH\VjIHHVH[SHQGHG DFTXLVLWLRQWKH)XURQ(623LQFOXGHGSDUWLFLSDQWV LVQRWDmEHQHILWl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mZLQGIDOOlWRWKHSDUWLFLSDQWV7KH PHUJHGZLWKWKHDFTXLUHG)XURQ7KHQHZHQWLW\FKDQJHGLWV SXUSRVH RI WKHVH (5,6$ VDIHJXDUGV ZDV QRW WR REWDLQ QDPH WR 6DLQW*REDLQ 3HUIRUPDQFH 3ODVWLFV &RUSRUDWLRQ ZLQGIDOOV IRU WKH SDUWLFLSDQWV EXW HQVXUH WKDW WKH ULJKWV m6DLQW*REDLQ3ODVWLFVl 7KXVWKHFXUUHQWVSRQVRURIWKH SURPLVHG E\ D FRPSDQ\ ZHUH IXOILOOHG  ,Q WKLV FDVH WKRVH )XURQ (623 DQG WKH m&RPSDQ\l UHIHUUHG WR LQ WKH )XURQ ULJKWVoDVZHOODVDODUJHVXUSOXVRQWRSRIWKDWoKDYHLQXUHG (623LV6DLQW*REDLQ3ODVWLFV WRWKHSDUWLFLSDQWV 2Q0DUFKWKHERDUGRIGLUHFWRUVRI6DLQW*REDLQ :HUHZHWRDJUHHZLWKWKHGLVWULFWFRXUWDQGILQGIRUWKH 3ODVWLFVDPHQGHGDQGWHUPLQDWHGWKH)XURQ(623HIIHFWLYH 7UXVWHH WKH UHVXOWV ZRXOG QRW EH LQFUHDVHG SURWHFWLRQ RI 0DUFK2Q0DUFKWKH%HQHILWV&RPPLWWHH (623EHQHILFLDULHV$VWKH'2/DQGWKH7UXVWHHFDQGLGO\ QRWLILHGWKH7UXVWHHE\OHWWHURIWKH)XURQ(623DPHQGPHQW DGPLW KDG WKH &RPSDQ\ WDNHQ D VHFXULW\ LQWHUHVW LQ WKH DQGWHUPLQDWLRQ 6XEIXQGDVFROODWHUDOIRUWKHH[HPSWORDQWKHQWKHUHZRXOGEH QRJURXQGVIRUWKHUHIXVDOWRSD\WKH ORDQ  6RHYHU\QHZ 2Q0D\6DLQW*REDLQUHTXHVWHGDGHWHUPLQDWLRQ (623DQGH[HPSWORDQWRH[LVWLQJ(623VZLOOVLPSO\WDNHD IURPWKH,QWHUQDO5HYHQXH6HUYLFH m,56l WKDWWHUPLQDWLRQRI WKH)XURQ(623DQGUHSD\PHQWRIWKH([HPSW/RDQVZRXOG  %HQHILWV&RPPLWWHHHWDOY 1R 1R %HQHILWV&RPPLWWHHHWDOY  .H\7UXVW&RPSDQ\RI2KLR .H\7UXVW&RPSDQ\RI2KLR

QRWYLRODWHWKH&RGH2Q6HSWHPEHUWKH,56LVVXHG 7KH)XURQ(623GLGQRWSURYLGHDQLPPHGLDWHRUFRPSOHWH DIDYRUDEOHGHWHUPLQDWLRQWKDWWKHDPHQGPHQWDQGWHUPLQDWLRQ EHQHILWWRWKHSDUWLFLSDQWV7KH(623ERUURZHGWKHPRQH\ RIWKH)XURQ(623GLGQRWDGYHUVHO\DIIHFWWKH(623jVVWDWXV IURPWKH&RPSDQ\LQRUGHUWREX\DEORFNRIVWRFNDWRQH WLPH7KHSDUWLFLSDQWVjLQWHUHVWLQWKDWEORFNRIVWRFNZDVQLO 7KH%HQHILWV&RPPLWWHHLQVWUXFWHGWKH7UXVWHHWRXVHWKH DW ILUVW  (DFK \HDU SXUVXDQW WR D P\ULDG RI YHVWLQJ DQG FDVKSURFHHGVIURPWKHVDOHRIWKH)XURQVWRFNLQWKH6XEIXQG DOORFDWLRQFULWHULDWKHSDUWLFLSDQWVUHFHLYHGDQLQWHUHVWLQWKH WR SD\ WKH EDODQFH RI WKH ([HPSW /RDQV QRZ SD\DEOH WR (623 ZKLFK PDQLIHVWHG LWVHOI LQ WKH DOORFDWLRQ RI WKDW 6DLQW*REDLQ3ODVWLFV 7KH7UXVWHHUHIXVHG1HYHUWKHOHVV LQWHUHVW IURP WKH 6XEIXQG WR WKH UHVSHFWLYH SDUWLFLSDQWVj RQ0DUFKDWWKH%HQHILWV&RPPLWWHHjVGLUHFWLRQWKH LQGLYLGXDO DFFRXQWV  7KH SDUWLFLSDQWV KDG QR ULJKW WR DQ\ 7UXVWHHDOORFDWHGWKHDVVHWVLQWKH6XEIXQGOHVVWKHDPRXQW SRUWLRQRIWKH6XEIXQGRQO\WKHLULQGLYLGXDODFFRXQWV$VD RZLQJ RQ WKH ([HPSW /RDQV WR LQGLYLGXDO SDUWLFLSDQW UHVXOWRIWKHFRPSOHWHDFTXLVLWLRQRI)XURQE\6DLQW*REDLQ DFFRXQWV,QHDUO\s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m>7KH@GHFLVLRQWRWHUPLQDWHWKH(623LV SD\PHQWVRQWKH([HPSW/RDQVVLQFHWKDWWLPH7KXVWKH FRQVLGHUHG WR EH D mSXUH EXVLQHVV GHFLVLRQl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jV IDLOXUH WR UHSD\ WKH ([HPSW /RDQV ZLWK WKH FDVK LQGLYLGXDODFFRXQWV8QGHUWKH)XURQ(623WKHSDUWLFLSDQWV SURFHHGV IURP WKH VDOH RI WKH )XURQ VWRFN LQ WKH 6XEIXQG DUH HQWLWOHG WR WKH PRQH\ UHPDLQLQJ LQ WKH 6XEIXQG DIWHU FRQVWLWXWHGDEUHDFKRIWKHWHUPVRIWKH)XURQ(623&RXQW SD\PHQW RI WKH ([HPSW ORDQ  7KDW PRQH\ D UHVXOW RI WKH 7ZRDOOHJHGWKDWWKH7UXVWHHjVIDLOXUHWRUHSD\WKH([HPSW SUHPLXP SDLG IRU WKH VWRFN E\ 6DLQW*REDLQ KDV EHHQ /RDQV ZLWK WKH SURFHHGV IURP WKH VDOH RI WKH )XURQ VWRFN GLVWULEXWHGWRWKHSDUWLFLSDQWVDWWKHGLUHFWLRQRIWKH%HQHILWV FRQVWLWXWHGDEUHDFKRILWVILGXFLDU\GXW\ &RPPLWWHHLQWKHDPRXQWRIPLOOLRQ)XUWKHUSXUVXDQWWR WKHGLUHFWLRQRIWKH%HQHILWV&RPPLWWHHDOORIWKHLQGLYLGXDO :LWKLWVDQVZHUWKH7UXVWHHILOHGFRXQWHUFODLPVDJDLQVWWKH DFFRXQWV KDYH EHHQ GLVEXUVHG  $OO WKDW UHPDLQV LQ WKH %HQHILWV &RPPLWWHH VHHNLQJ D GHFODUDWRU\ MXGJPHQW WKDW 6XEIXQGoDQG)XURQ(623oLVWKHDSSUR[LPDWHDPRXQWVWLOO   WKH 7UXVWHH LV SUHFOXGHG E\ (5,6$ IURP XVLQJ WKH RZHGWRWKHFRPSDQ\PLOOLRQ7KHRQO\LQWHUHVWWKDWWKH SURFHHGVIURPWKHVDOHRIWKH)XURQVWRFNLQWKH6XEIXQGWR SDUWLFLSDQWVKDYHLQWKDWPRQH\LVDUHVLGXDOLQWHUHVWLQWKH UHSD\WKH([HPSWORDQV   WKH7UXVW$JUHHPHQWUHTXLUHVWKH HYHQWWKDWLWFDQQRWEHSDLGDVRUWRIUHPDLQGHULQWHUHVW  %HQHILWV&RPPLWWHHHWDOY 1R 1R %HQHILWV&RPPLWWHHHWDOY  .H\7UXVW&RPSDQ\RI2KLR .H\7UXVW&RPSDQ\RI2KLR

/RFNKHHG&RUSY6SLQN86    7UXVWHH WR DOORFDWH WKH 6XEIXQG WR WKH SDUWLFLSDQWV LQ WKH )XURQ(623LQSURSRUWLRQWRWKHLUFXUUHQWDFFRXQWEDODQFHV 9, $QDO\VLV DQG   WKH %HQHILWV &RPPLWWHHj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mPD\lUDWKHUWKDQmPXVWl 7KH%HQHILWV&RPPLWWHH %HQHILWV &RPPLWWHH DSSHDOHG  7KH 'HSDUWPHQW RI /DERU KDV GLUHFWHG WKH 7UXVWHH WR PDNH WKH SD\PHQW  7KH ,56 m'2/l KDVLQWHUYHQHGLQWKLVDSSHDODVDQDPLFXVFXULDHLQ DJUHHVWKDWWKHORDQVZRXOGUHWDLQWKHLUmH[HPSWlVWDWXVLIWKH VXSSRUWRIWKH7UXVWHHjVSRVLWLRQ SD\PHQWZDVPDGHDQGVXFKSD\PHQWZRXOGQRWEHWRWKH GHWULPHQWRIWKHSDUWLFLSDQWVRIWKHSODQ7KHDJUHHPHQWVGR ,, 5HOHYDQW'RFXPHQWV TXLWH REYLRXVO\ H[FHSW WKH UHTXLUHPHQW RI DQ\ DFWLRQ WKDW ZRXOGYLRODWH(5,6$7KXVWKHLVVXHWXUQVRQZKDW(5,6$  7UXVW$JUHHPHQW UHTXLUHVLQWKLVFDVH 7KH %HQHILWV &RPPLWWHH FLWHV WR †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jLQWHUHVWDVWKH\KDYHQRULJKWWRWKRVH SHUPLVVLYHUDWKHUWKDQPDQGDWRU\ DVVHWV7KLVODVWSRLQWPXVWEHWKHWRXFKVWRQHRIRXUILGXFLDU\ DQDO\VLVWKHHIIHFWRIWKHSURSRVHGDFWLRQRQWKHSDUWLFLSDQWV 6HFWLRQ  G  RI WKH 7UXVW $JUHHPHQW VHWV IRUWK WKH DOORZHGPHWKRGVRIUHFRXUVHLQWKHHYHQWRIQRQSD\PHQWRI  %HQHILWV&RPPLWWHHHWDOY 1R 1R %HQHILWV&RPPLWWHHHWDOY  .H\7UXVW&RPSDQ\RI2KLR .H\7UXVW&RPSDQ\RI2KLR

WKH([HPSW/RDQVTXRWLQJWKHOLPLWVRQUHFRXUVHLQ&)5    PDN>H@ VXUH WKDW LI D ZRUNHU KDV EHHQ SURPLVHG D †E H  GHILQHGSHQVLRQEHQHILWXSRQUHWLUHPHQWDQGLIKHKDV IXOILOOHG ZKDWHYHU FRQGLWLRQV DUH UHTXLUHG WR REWDLQ D 8QGHU WKH WHUPV RI WKH &RPSDQ\ 6WRFN /RDQ RU RWKHU YHVWHGEHQHILWKHDFWXDOO\ZLOOUHFHLYHLWl,GDW GRFXPHQWV H[HFXWHG E\ WKH 7UXVWHH LQ FRQQHFWLRQ 6&WDW$FFRUGLQJO\(5,6$WULHVWRmPDNH WKHUHZLWKWKHOHQGHUVKDOOQRWKDYHUHFRXUVHDJDLQVWWKH DVFHUWDLQDVSRVVLEOHWKDWSHQVLRQIXQGDVVHWV>ZLOO@EH DVVHWVRIWKH7UXVW)XQGH[FHSWWKDWD&RPSDQ\6WRFN DGHTXDWHlWRPHHWH[SHFWHGEHQHILWVSD\PHQWV,ELG /RDQ PD\ SHUPLW UHFRXUVH ZLWK UHVSHFW WR   WKH 7RLQFUHDVHWKHFKDQFHVWKDWHPSOR\HUVZLOOEHDEOHWR FROODWHUDO SOHGJHG DV VHFXULW\ IRU WKH &RPSDQ\ 6WRFN KRQRU WKHLU EHQHILWV FRPPLWPHQWVWKDW LV WR JXDUG /RDQ   FRQWULEXWLRQV RWKHU WKDQ FRQWULEXWLRQV RI DJDLQVW WKH SRVVLELOLW\ RI EDQNUXSW SHQVLRQ VKDUHV WKDWDUHPDGHWRPHHWWKH7UXVWHHjVREOLJDWLRQV IXQGV&RQJUHVVLQFRUSRUDWHGVHYHUDONH\PHDVXUHVLQWR XQGHU WKH &RPSDQ\ 6WRFN /RDQ DQG   HDUQLQJV (5,6$  6HFWLRQ  RI (5,6$ VHWV PLQLPXP DQQXDO DWWULEXWDEOHWRVXFKFROODWHUDODQGWKHLQYHVWPHQWRIVXFK IXQGLQJ OHYHOV IRU DOO FRYHUHG SODQV VHH   86& FRQWULEXWLRQV ††  D   E  DQG FUHDWHV WD[ OLHQV LQ IDYRU RI VXFKSODQVZKHQWKRVHIXQGLQJOHYHOVDUHQRWPHWVHH %HFDXVH   QR FROODWHUDO ZDV FUHDWHG   WKHUH ZLOO EH QR †  I   6HFWLRQV  DQG   RI (5,6$ LPSRVH IXUWKHUFRQWULEXWLRQVDQG  WKH7UXVWFRQWDLQVQRHDUQLQJV UHVSHFWLYHO\ D GXW\ RI FDUH ZLWK UHVSHFW WR WKH 6DLQW*REDLQ3ODVWLFVKDVQRUHFRXUVHXQGHU† G RIWKH PDQDJHPHQWRIH[LVWLQJWUXVWIXQGVDORQJZLWKOLDELOLW\ 7UXVW$JUHHPHQWLQWKHHYHQWRIQRQSD\PHQWE\WKH7UXVW IRU EUHDFK RI WKDW GXW\ XSRQ SODQ ILGXFLDULHV  6HH †† D  D )LQDOO\†RI(5,6$SURKLELWV 6HFWLRQRIWKH7UXVW$JUHHPHQWVWDWHVWKDWWKH)XURQ ILGXFLDULHV IURP LQYROYLQJ WKH SODQ DQG LWV DVVHWV LQ (623DQGWKH7UXVW$JUHHPHQWmVKDOOEHGHHPHGWREHDQG FHUWDLQNLQGVRIEXVLQHVVGHDOV6HH†,WLVWKLVODVW FRQVWUXHGDVDVLQJOHGRFXPHQWl IHDWXUHRI(5,6$WKDWLVDWLVVXHWRGD\ &RQJUHVV HQDFWHG †  mWR EDU FDWHJRULFDOO\ D  /RDQ$JUHHPHQWV WUDQVDFWLRQ WKDW >LV@ OLNHO\ WR LQMXUH WKH SHQVLRQ SODQl 7KH7UXVWHHUHOLHVRQ†RIWKH /RDQ$JUHHPHQWZLWK &RPPLVVLRQHUY.H\VWRQH&RQVRO,QGXVWULHV,QF WKH &RPSDQ\ ZKLFK VWDWHV m)XURQ VKDOO FRQWULEXWH WR WKH 86    6&W    /(GG  7UXVWHHDPRXQWVVXIILFLHQWWRHQDEOHWKH7UXVWHHWRWLPHO\SD\   7KDWVHFWLRQPDQGDWHVLQUHOHYDQWSDUWWKDWm>D@ WKHSULQFLSDODQGDQ\LQWHUHVWGXHDQGSD\DEOHXQGHU6HFWLRQ ILGXFLDU\ZLWKUHVSHFWWRDSODQVKDOOQRWFDXVHWKHSODQWR RIWKLV/RDQ$JUHHPHQWl,QDGGLWLRQ† RIWKH /RDQ HQJDJHLQDWUDQVDFWLRQLIKHNQRZVRUVKRXOGNQRZWKDW $JUHHPHQWVHWVIRUWKWKHSDUWLHVjUHPHGLHVLQFDVHRIGHIDXOW VXFK WUDQVDFWLRQ FRQVWLWXWHV D GLUHFW RU LQGLUHFW    WUDQVIHU WR RU XVH E\ RU IRU WKH EHQHILW RI D SDUW\ LQ D  ,Q WKH HYHQW RI D GHIDXOW E\ WKH 7UXVWHH WKH IXOO LQWHUHVW RI DQ\ DVVHWV RI WKH SODQl    86& DPRXQWRIWKHRXWVWDQGLQJSULQFLSDOEDODQFHDFFUXHGDQG † D  '   XQSDLGLQWHUHVW LIDQ\ DQGRWKHUVXPVWKHQRZLQJE\WKH 7UXVWHHXQGHUWKH1RWHVKDOOEHFRPHLPPHGLDWHO\GXH DQG SD\DEOH ZLWKRXW SUHVHQWPHQW GHPDQG SURWHVW RU  QRWLFHRIDQ\NLQGSURYLGHGKRZHYHUWKDW)XURQVKDOO 6HFWLRQ  HQXPHUDWHV VSHFLILF H[FHSWLRQV WR WKH SURKLELWLRQV LQ †  $00  86& †  E  /RFNKHHG GRHV QRW DUJXH WKDW DQ\ RI KDYHQRUHFRXUVHDJDLQVWWKHDVVHWVRIWKH7UXVWRWKHUWKDQ WKHVH H[FHSWLRQV SHUWDLQ WR WKLV FDVH  %HQHILWV&RPPLWWHHHWDOY 1R 1R %HQHILWV&RPPLWWHHHWDOY .H\7UXVW&RPSDQ\RI2KLR .H\7UXVW&RPSDQ\RI2KLR

UHPLWWDQFHRIDWWRUQH\jVIHHVWRWKH,%7ZRXOGQRWEHQHILW L DQ\FDVKFRQWULEXWLRQVPDGHE\)XURQXQGHU6HFWLRQ WKH,%7LQWKHPDQQHULQWHQGHGWREHSURVFULEHGE\WKH  DQG QRW SUHYLRXVO\ SDLG WR )XURQ DV ORDQ SD\PHQWV VWDWXWH$EHQHILWLVGHILQHGDVDQDGYDQWDJHSULYLOHJH LL  DQ\ 6KDUHV WKDW KDYH QRW EHHQ UHOHDVHG IURP WKH SURILWRUJDLQ6HH%ODFNjV/DZ'LFWLRQDU\ WKHG VXVSHQVH DFFRXQW DQG LLL  WKH DVVHWV ZKLFK PD\ KDYH  ,%7ZRXOGQRWUHFHLYHDEHQHILWLQWKHFRQWH[WRI UHVXOWHGIURPWKHLQYHVWPHQWRIWKHFRQWULEXWLRQVUHIHUUHG WKH VWDWXWRU\ IUDPHZRUN LQYROYHG LQ WKH LQVWDQW FDVH WRLQ L $EUHDFKRIWKHUHSUHVHQWDWLRQVDQGZDUUDQWLHV LQDVPXFK DV WKH WUDQVDFWLRQ ZRXOG PHUHO\ FRQVWLWXWH XQGHU 6HFWLRQ  DERYH DQG WKH IDLOXUH WR PDNH DQ\ UHSD\PHQW IRU PRQH\ DOUHDG\ H[SHQGHG E\ ,%7 LQ VFKHGXOHG SD\PHQW RI SULQFLSDO RI RU LQWHUHVW RQ WKH VXSSRUWRI3ODLQWLIIVjVXLWDJDLQVW'HIHQGDQWV0RUHRYHU 1RWHV RWKHUWKDQVROHO\DVDUHVXOWRI)XURQjVIDLOXUHWR WKH ,%7 ZRXOG UHFHLYH WKH DWWRUQH\jV IHHV DGYDQFHG PDNHUHTXLUHGFRQWULEXWLRQV VKDOOFRQVWLWXWHDGHIDXOWE\ ZLWKRXWWKHSD\PHQWRILQWHUHVW,%7WKHUHIRUHGRHVQRW WKH7UXVWHHKHUHXQGHU VWDQG WR UHFHLYH D SURILW RU JDLQ IURP WKH DOOHJHG mSURKLELWHGWUDQVDFWLRQl,QGHHGWKHWUDQVDFWLRQDWLVVXH E ,I)XURQVKDOOIDLOWRPDNHFRQWULEXWLRQVDVUHTXLUHG GRHVQRWFRQWDLQWKHmDEXVHl&RQJUHVVVRXJKWWRSURWHFW XQGHU6HFWLRQRIWKLV/RDQ$JUHHPHQWWKH7UXVWHHjV LQ SURPXOJDWLQJ †  D  DV WKH WUDQVDFWLRQ ZLOO QRW REOLJDWLRQWRSD\SULQFLSDODQGLQWHUHVWGXHDQGSD\DEOH LQMXUHWKHSODQ XQGHU 6HFWLRQ  RI WKLV /RDQ $JUHHPHQW VKDOO EH VXVSHQGHG XQWLO VXFK FRQWULEXWLRQ LV PDGH DQG VXFK sRUGDQY0LFK&RQIRI7HDPVWHUV:HOIDUH)XQG)G FRQWULEXWLRQV VKDOO EH ILUVW DSSOLHG WR DQ\ SDVW GXH   WK&LU  LQWHUHVWDQGSULQFLSDO $VWKHFRXUWLVIDFHGZLWKFRQIOLFWLQJDJHQF\LQWHUSUHWDWLRQV 7KHSDUWLHVDJUHHWKDWWKH7UXVWjVIDLOXUHWRUHSD\WKH([HPSW RIWKHLVVXHDQGOLWWOHDXWKRULW\GLUHFWO\RQSRLQWLWLVKHOSIXO /RDQV GRHV QRW FRQVWLWXWH D GHIDXOW XQGHU WKH WHUPV RI WKH WR DOVR FRQVLGHU WKH SXUSRVHV RI WKH UHOHYDQW (5,6$ DQG /RDQ$JUHHPHQWVEHFDXVHLWVIDLOXUHWRUHSD\LVWKHUHVXOWRI SDUDOOHO&RGHSURYLVLRQV7KH6XSUHPH&RXUWKDGRFFDVLRQ WKHWHUPLQDWLRQRIWKH(623DQGHQGRIIXUWKHUFRQWULEXWLRQV WRGLVFXVVWKHVHSXUSRVHVLQDGLIIHUHQWFRQWH[W WKHUHXQGHU  $FFRUGLQJO\ WKH 7UXVWj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mZDQWHGWR † F @RURWKHUDSSOLFDEOHODZ8SRQWKHWUDQVIHUE\ D3DUWLFLSDWLQJ&RPSDQ\RIDQ\PRQH\WRWKH7UXVWHHDOO  %HQHILWV&RPPLWWHHHWDOY 1R 1R %HQHILWV&RPPLWWHHHWDOY  .H\7UXVW&RPSDQ\RI2KLR .H\7UXVW&RPSDQ\RI2KLR

LQWHUHVWRIWKH3DUWLFLSDWLQJ&RPSDQ\WKHUHLQVKDOOFHDVH 0XUGRFN )6XSS ('1&  DIIjG)G DQGWHUPLQDWH  WK&LU  7KHFRXUWKHOG )XUWKHU LW LV FRQFHGHG WKDW WKH &RPSDQ\ GLG QRW UHWDLQ D 7KLV FKDQJH >WR WKH DPHQGPHQW@ GRHV QRW KDYH DQ VHFXULW\LQWHUHVWLQWKHDVVHWVKHOGLQWKH6XEIXQGDVFROODWHUDO DGYHUVHRUSURKLELWHGHIIHFWRQWKHULJKWVJXDUDQWHHGWR IRUWKH([HPSW/RDQV WKHSDUWLFLSDQWVXQGHUHLWKHUWKH RU  3ODQ7KH   3ODQ QHYHU JDYH WKH SDUWLFLSDQWV WKH ULJKW WR DQ\ 7KH %HQHILWV &RPPLWWHH SRLQWV WR †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j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†ZDVLQWHQGHG VROHGLVFUHWLRQPD\GLUHFW WRSURWHFWSODQPHPEHUVE\SUHYHQWLQJILGXFLDULHVIURP HQJDJLQJLQWUDQVDFWLRQVWKDWFRXOGKXUWWKHSODQ7KH  %HQHILWV&RPPLWWHHHWDOY 1R 1R %HQHILWV&RPPLWWHHHWDOY  .H\7UXVW&RPSDQ\RI2KLR .H\7UXVW&RPSDQ\RI2KLR

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jV FRQVLGHUDWLRQ RI WKLV LVVXH LV WKDW LQ ILQGLQJ WKH 67$1'$5' 2) 5(9,(: SUHSD\PHQWVDWLVVXHLQWKHWZRRSLQLRQOHWWHUVDQGIDYRUDEOH GHWHUPLQDWLRQ LQ WKLV PDWWHU GLG QRW HQGDQJHU WKH H[HPSW 2QDSSHDORIDGLVWULFWFRXUWj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mFRPSUHKHQVLYHVWDWXWHGHVLJQHGWRSURPRWHWKH 9 5HOHYDQW&DVH/DZ LQWHUHVWV RI HPSOR\HHV DQG WKHLU EHQHILFLDULHV LQ HPSOR\HH EHQHILWSODQVl6KDZY'HOWD$LU/LQHV,QF86  7KHUHDUHQRFDVHVGLUHFWO\RQSRLQWLQWKLV PDWWHU7KH   (5,6$UHJXODWHVHPSOR\HHEHQHILWSODQVLQSDUWE\ 7UXVWHH DQG '2/ FLWH D QXPEHU RI ILGXFLDU\ FDVHV XQGHU HVWDEOLVKLQJVWULFWVWDQGDUGVRIFRQGXFWUHVSRQVLELOLWLHVDQG (5,6$DGGUHVVLQJWKHH[WHQVLYHOHYHORIWKLVGXW\6HHHJ REOLJDWLRQVIRUILGXFLDULHVRIWKHSODQV 86&† E  .XSHU Y ,RYHQNR  )G   WK &LU   $Q (623 LV RQH VSHFLILF W\SH RI SODQ FRYHUHG E\ WKH 'RQRYDQY%LHUZLWK)G G&LU  'DLU\ SURYLVLRQVRI(5,6$ )UHVK&RUSY3RROH1R &%&86'LVW /H[LV  DW  6' $OD    7KH %HQHILWV m$Q(623LVDW\SHRI(5,6$SODQWKDWLQYHVWVSULPDULO\LQ &RPPLWWHHFLWHVVHYHUDOFDVHVDGGUHVVLQJLVVXHVZLWKUHJDUG WKH VWRFN RI WKH HPSOR\HU FUHDWLQJ WKH SODQl  5RWK Y WR GHILQHG EHQHILW SODQV ZKLFK WKH 7UXVWHH FODLPV 6DZ\HU&OHDWRU /XPEHU &R  )G   WK &LU GLVWLQJXLVKHV WKHP  3HUKDSV WKH PRVW LQVWUXFWLYH RI WKHVH    VHH DOVR   86& †  G    $Q HPSOR\HU FDVHV LV D GLVWULFW FRXUW FDVH IURP 1RUWK &DUROLQD  ,Q WKDW GHVLULQJWRFUHDWHDQ(623LVUHTXLUHGWRH[HFXWHDZULWWHQ FDVH WKH %HQHILWV &RPPLWWHH SXUFKDVHG DQ DQQXLW\ WR GRFXPHQWWRGHILQHWKHWHUPVRIWKHSODQDQGWKHULJKWVRIWKH JXDUDQWHHWKHEHQHILWVRIWKHSODQDQGDPHQGHGWKHSODQWR EHQHILFLDULHVXQGHULW 86&† D 7KLVSODQPXVW SURYLGHWKDWWKHVXUSOXVUHWXUQWRWKHFRPSDQ\6HH5LOH\Y DOVRQDPHRQHRUPRUHILGXFLDULHVZKRDUHmWRFRQWURODQG PDQDJHWKHRSHUDWLRQDQGDGPLQLVWUDWLRQRIWKHSODQl,G$  %HQHILWV&RPPLWWHHHWDOY 1R 1R %HQHILWV&RPPLWWHHHWDOY  .H\7UXVW&RPSDQ\RI2KLR .H\7UXVW&RPSDQ\RI2KLR

WUXVWLVHVWDEOLVKHGWRKROGWKHDVVHWVRIWKH(623 86& UHTXLUHPHQWl EDVHG RQ DOO WKH VXUURXQGLQJ IDFWV DQG † D  FLUFXPVWDQFHV ,QWKHSUHVHQWFDVHQRDGGLWLRQDOHPSOR\HUVHFXULWLHV $Q (623jV DVVHWV DUH RIWHQ GHULYHG IURP WD[GHGXFWLEOH ZLOOEHDFTXLUHGVXEVHTXHQWWRWKHWHQGHURIIHUEHFDXVH FRQWULEXWLRQVIURPWKHHPSOR\HUWRWKHSODQLQWKHIRUPRIWKH &RPSDQ\1KDVQRLQWHQWLRQRIFRQWLQXLQJWRPDLQWDLQ HPSOR\HUjVRZQVWRFNRUFDVK$Q(623PD\DOVRERUURZ WKH(623)XUWKHUPRUHDVXEVWDQWLDOSUHPLXPZDVSDLG PRQH\IURPDWKLUGSDUW\LQRUGHUWRLQYHVWLQWKHHPSOR\HUjV IRUWKH&RPSDQ\0HPSOR\HUVHFXULWLHV$IWHUWKHORDQLV VWRFN6HH 86&† E  ,IFDVKLVFRQWULEXWHGWKH UHSDLG WKH EDODQFH UHPDLQLQJ LQ WKH VXVSHQVH DFFRXQW (623WKHQSXUFKDVHVVWRFNLQWKHVSRQVRULQJFRPSDQ\7KLV ZLOOEHGLVWULEXWHGWR3ODQ;SDUWLFLSDQWVDQG3ODQ;ZLOO W\SHRI(623LVFDOOHGDOHYHUDJHG(623DQGLVWKHW\SHRI WKHQEHWHUPLQDWHG (623DWLVVXHLQWKHSUHVHQWFDVH,IDOHYHUDJHG(623LV $FFRUGLQJO\ZLWKUHVSHFWWR\RXUUHTXHVWHGUXOLQJZH FUHDWHGWKHHPSOR\HULVREOLJDWHGWRPDNHFDVKFRQWULEXWLRQV FRQFOXGHLQWKHSUHVHQWFDVHWKDWWKHSURFHHGVIURPWKH WRWKH(623ZKLFKLQWXUQXVHVWKHFDVKWRUHWLUHWKHORDQ VDOHSXUVXDQWWRWKHRIIHUDQGPHUJHURIWKHXQDOORFDWHG GHEW6HH'RQRYDQY&XQQLQJKDP)G  WK FRPPRQVWRFNLQWKH3ODQ;VXVSHQVHDFFRXQWFDQEH &LU     ,Q WKH SUHVHQW FDVH DIWHU WKH (623 ERUURZHG XVHGWRUHSD\WKHRXWVWDQGLQJSULQFLSDOEDODQFHRQWKH PRQH\IRUWKHDPRXQWRIWKHVWRFNSXUFKDVHWKHVWRFNZDV ORDQ ZLWKRXW FDXVLQJ WKH ORDQ WR IDLO WR PHHW WKH SODFHGLQDmVXVSHQVHVXEIXQGl$VWKH(623PDNHVORDQ H[HPSWLRQSURYLGHGE\VHFWLRQ  G  RIWKH&RGH SD\PHQWV XVLQJ WKH FDVK FRQWULEXWLRQV IURP WKH &RPSDQ\ VWRFNLVUHOHDVHGIURPWKH6XEIXQGDQGSODFHGLQWRWKH(623   :/  QR VWDU SDJLQJ SURYLGHG   ,Q DQ HDUOLHU SDUWLFLSDQWVj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† D   86&† D      QRVWDUSDJLQJSURYLGHG %RWKRSLQLRQVKRZHYHU  %HQHILWV&RPPLWWHHHWDOY 1R 1R %HQHILWV&RPPLWWHHHWDOY  .H\7UXVW&RPSDQ\RI2KLR .H\7UXVW&RPSDQ\RI2KLR

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† D  '  86&† D  ' 7KHUHLV LQWHUHVW LQ WKH XQDOORFDWHG HPSOR\HU VHFXULWLHV LQ WKH D SDUDOOHO SURYLVLRQ LQ WKH &RGH  6HH  86& VXVSHQVHDFFRXQWUHSD\PHQWE\WKHSODQRIWKHEDODQFH †  F  '  UHPDLQLQJRQWKHORDQWKURXJKWKHVDOHRUH[FKDQJHRI VXFKVHFXULWLHVZRXOGDSSHDUWRYLRODWH(5,6$VHFWLRQV 6HFWLRQRI(5,6$SURYLGHVWKDW mWKHDVVHWVRIDSODQ  F   D  $  D  % DQG D  '  VKDOOQHYHULQXUHWRWKHEHQHILWRIDQ\HPSOR\HUDQGVKDOOEH 7KHTXHVWLRQRIZKHWKHUWKHOHQGHUKDVDVHFXULW\LQWHUHVW KHOG IRU WKH H[FOXVLYH SXUSRVHV RI SURYLGLQJ EHQHILWV WR LQWKHHPSOR\HUVHFXULWLHVLQWKHVXVSHQVHDFFRXQW RUWKH SDUWLFLSDQWVLQWKHSODQDQGWKHLUEHQHILFLDULHVl(5,6$ SURFHHGVIURPWKHVDOHWKHUHRI LVDTXHVWLRQRIVWDWHODZ † F   86&† F  $VTXRWHGLQIUD† LQWHUSUHWDWLRQ RIWKH)XURQ(623LQFOXGHVWKLVVDPHODQJXDJH  :/DW  6HFWLRQRI(5,6$SURYLGHVDmVDIHKDUERUlH[HPSWLRQ IURPWKHSURVFULSWLRQRI† ,9 ,563ULYDWH/HWWHU5XOLQJV E (QXPHUDWLRQRIWUDQVDFWLRQVH[HPSWHGIURPVHFWLRQ ,QWZRSULYDWHOHWWHUUXOLQJVWKH,56DGGUHVVHGWKHSDUDOOHO SURKLELWLRQV &RGH SURYLVLRQ WR (5,6$ †  D  '  UHJDUGLQJ SURKLELWHGWUDQVDFWLRQVDQGWKHSDUDOOHOH[HPSWLRQRIWKDWUXOH 7KH SURKLELWLRQV SURYLGHG LQ VHFWLRQ  RI WKLV WLWOH IRU TXDOLI\LQJ (623 ORDQV LQ (5,6$ †  E    6HH  VKDOOQRWDSSO\WRDQ\RIWKHIROORZLQJWUDQVDFWLRQV 86&†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mSULPDU\ EHQHILW  %HQHILWV&RPPLWWHHHWDOY 1R 1R %HQHILWV&RPPLWWHHHWDOY  .H\7UXVW&RPSDQ\RI2KLR .H\7UXVW&RPSDQ\RI2KLR

HPSOR\HUVHFXULWLHV DVGHILQHGLQVHFWLRQ G  RI RZQHUVKLSSODQWRUHSD\DQH[HPSWORDQl :/ WKLVWLWOH  DW   :/DW  m7KH'HSDUWPHQWEHOLHYHV WKDWWKH(623ORDQZRXOGQRWIDLOWREHH[HPSWVROHO\EHFDXVH (5,6$† E   86&† E  $VDERYHZLWK WKHDSSURSULDWHSODQILGXFLDU\XVHGDVVHWVRIWKH(623RWKHU WKH OLVW RI SURKLELWHG WUDQVDFWLRQV WKHUH LV D SDUDOOHO WKDQWKRVHHQXPHUDWHGLQVHFWLRQE H WRUHSD\WKH H[HPSWLRQ SURYLVLRQ LQ WKH &RGH  6HH  86& ORDQl  †  G   $IWHUGHWHUPLQLQJWKDWXVHRIVXEIXQGDVVHWVGLGQRWYLRODWH ,,, '2/2SLQLRQ/HWWHUV '2/UHJXODWLRQVLQWHUSUHWLQJ(5,6$†WKH OHWWHU WXUQHGWRWKHILGXFLDU\TXHVWLRQUHOHYDQWWRWKLVDSSHDO7KH 7KH'2/KDVDGGUHVVHGWKHLVVXHUDLVHGLQWKLVDSSHDOLQ RSLQLRQOHWWHUTXRWHGLQIXOOWKHUHOHYDQW(5,6$SURYLVLRQV WZR RSLQLRQ OHWWHUV GDWHG 'HFHPEHU    WKH m  UHODWHGWRWKLVTXHVWLRQLQFOXGLQJ††DQG7KHQ OHWWHUl DQG'HFHPEHU  WKHm OHWWHUl '2/2S WKHRSLQLRQOHWWHUSURFHHGHGZLWKLWVDQDO\VLVZKLFKGXHWRLWV 1R $ :/ (5,6$'HF  '2/ EUHYLW\FDQEHTXRWHGLQIXOOKHUH 2S/WU$ :/ 3HQVLRQDQG:HOIDUH %HQHILWV$VVjQ'HF  2SLQLRQOHWWHUVQHHGQRWEH 7KH DSSURSULDWH SODQ ILGXFLDU\ PXVW FRQVLGHU WKH JLYHQ GHIHUHQFH XQGHU &KHYURQ 86$ ,QF Y 1DWXUDO DSSOLFDWLRQ RI WKHVH SURYLVLRQV WR WKH IDFWV DQG 5HVRXUFHV'HIHQVH&RXQFLO,QF86   6XFK FLUFXPVWDQFHVRIWKLVFDVH,QSDUWLFXODUWKHILGXFLDU\ OHWWHUVPD\KDYHSHUVXDVLYHYDOXHKRZHYHULImWKRURXJKO\ PXVWDVFHUWDLQXQGHUWKHDERYHGHVFULEHGFLUFXPVWDQFHV FRQVLGHUHG DQG ZHOO UHDVRQHGl  6HH HJ (OZHOO Y 8QLY ZKHWKHUWKHOHQGHUKDVUHFRXUVHWRHPSOR\HUVHFXULWLHVLQ +RVS+RPH&DUH6HUYV)6XSSG  1' WKHVXVSHQVHDFFRXQW RUSURFHHGVUHFHLYHGIURPWKHVDOH 2KLR  VWDWLQJWKDW'HSDUWPHQWRI/DERURSLQLRQZDV RIVXFKVHFXULWLHV LQWKHHYHQWRIGHIDXOWLHZKHWKHU HQWLWOHG WR GHIHUHQFH EHFDXVH LW ZDV mD WKRURXJK ZHOO WKH VHFXULWLHV VHUYH DV FROODWHUDO IRU WKH ORDQ  ,Q WKH UHDVRQHG DQG DFFXUDWH LQWHUSUHWDWLRQ RI WKH >UHOHYDQW@ DEVHQFHRIVXFKDGHWHUPLQDWLRQUHSD\PHQWE\WKHSODQ UHJXODWLRQl FI.LOJRUHY2XWEDFN6WHDNKRXVHRI)ORULGD RI WKH EDODQFH UHPDLQLQJ RQ WKH ORDQ ZRXOG DSSHDU WR ,QF)G  WK&LU   m7KHRSLQLRQOHWWHUV YLRODWH (5,6$ VHFWLRQV  F    D  $  KHUH IDLO WR SHUVXDGH XV EHFDXVH WKH\ GR QRW H[SODLQ WKH  D  %  DQG  D  '  EHFDXVH DVVXPLQJ WKH VWDWXWRU\VRXUFHIRUWKHOLPLWDWLRQWKDWWKH\FUHDWHl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mZKLOH E H SUHFOXGHVUHFRXUVHWRRWKHUWKDQWKHDERYHHQXPHUDWHGDVVHWV RIWKH(623E\SHUVRQVHQWLWOHGWRUHSD\PHQWRIDORDQWKDWLV  1RWZLWKVWDQGLQJ FROODWHUDOL]DWLRQ RI WKH ORDQ E\ WKH XQDOORFDWHG H[HPSWXQGHU> 86&†@LWGRHVQRWVHUYHWROLPLW HPSOR\HU VHFXULWLHV LQ WKH VXVSHQVH DFFRXQW RWKHU ILGXFLDU\ GXWLHV XQGHU WKHXVHRIRWKHUDVVHWVE\WKHILGXFLDU\RIDQHPSOR\HHVWRFN 7LWOH , RI (5,6$ PD\ EH LPSOLFDWHG ZKHQ FRQVLGHULQJ WKH VDOH RI VXFK VHFXULWLHV WR VHUYLFH WKH H[HPSW ORDQ GHEW