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

7255( 6 &52&.(77 ; '86+21 / *5((1(  3ODLQWLIIV$SSHOOHHV   1R  Y !   &80%(5/$1' &2//(*(  0,&+$(/ % &2/(*529( .  '$9,' .(56(<  'HIHQGDQWV    &,7< 2) :,//,$06%85*  .(178&.< '21 +$0/,1  'HIHQGDQWV$SSHOODQWV   1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH(DVWHUQ'LVWULFWRI.HQWXFN\DW/RQGRQ 1R nsHQQLIHU%&RIIPDQ'LVWULFWsXGJH $UJXHG 0DUFK 'HFLGHGDQG)LOHG sDQXDU\

  &URFNHWWHWDOY 1R 1R &URFNHWWHWDOY  &XPEHUODQG&ROOHJHHWDO &XPEHUODQG&ROOHJHHWDO

%HIRUH 0225(DQG&2/(&LUFXLWsXGJHV 7$512: XQVXEVWDQWLDWHGDUUHVWVZLWKLPSXQLW\l 0RUHRYHUWKHIDFW 'LVWULFWsXGJH WKDW&URFNHWWDQG*UHHQHZHUHQHYHULQGLFWHGIRUWKHFULPHRI DUUHVW GRHV QRW LQYDOLGDWH +DPOLQjV ILQGLQJ WKDW SUREDEOH BBBBBBBBBBBBBBBBB FDXVHWRDUUHVWWKHPH[LVWHG6HH6WRQHY3RZHOO86   FLWLQJ 3LHUVRQ  86 DW   6FKHXHU Y &2816(/ 5KRGHV86    $5*8('   6DUDQQDK / 0F0XUWU\ &/$5. :$5' +DPOLQFRQGXFWHGDVXIILFLHQWLQYHVWLJDWLRQE\SHUVRQDOO\ &$9( %UHQWZRRG 7HQQHVVHH IRU $SSHOODQWV  sXOLH $ LQWHUYLHZLQJ 'RH DQG 5RH DQG UHO\LQJ RQ WKH DGYLFH RI %XWFKHU/H[LQJWRQ.HQWXFN\IRU$SSHOOHHV21%5,() .HUVH\)URPWKLVLQYHVWLJDWLRQ+DPOLQZDVDEOHWRSURSHUO\ 6DUDQQDK/0F0XUWU\3HJJ\/7ROVRQ&/$5.:$5' GHWHUPLQHWKDWSUREDEOHFDXVHWRDUUHVW&URFNHWWDQG*UHHQH &$9( %UHQWZRRG 7HQQHVVHH IRU $SSHOODQWV  sXOLH $ H[LVWHG/DWHULQRUGHULQJWKHDUUHVW+DPOLQUHOLHGXSRQWKH %XWFKHU/H[LQJWRQ.HQWXFN\IRU$SSHOOHHV MXGLFLDOO\DSSURYHGZDUUDQW$FFRUGLQJO\+DPOLQLVHQWLWOHG WRTXDOLILHGLPPXQLW\IRUKLVFRQGXFWLQDUUHVWLQJ&URFNHWW BBBBBBBBBBBBBBBBB DQG*UHHQH 23,1,21 ,9&RQFOXVLRQ BBBBBBBBBBBBBBBBB )RUWKHUHDVRQVDERYHZH5(9(56(WKHGLVWULFWFRXUWjV 5*8<&2/(s5&LUFXLWsXGJH2Q'HFHPEHU  GHQLDO RI TXDOLILHG LPPXQLW\ DQG ',60,66 WKH &LW\ RI GHIHQGDQWDSSHOODQW'RQ+DPOLQWKHQWKH&R&KLHIRI3ROLFH :LOOLDPVEXUJjVDSSHDOIRUODFNRIDSSHOODWHMXULVGLFWLRQ IRUWKH&LW\RI:LOOLDPVEXUJ.HQWXFN\ WKHm&LW\l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†   IRU GXH SURFHVV YLRODWLRQV DQG ILYH XQGHU .HQWXFN\WRUWODZ+DPOLQDQGWKH&LW\PRYHGIRUVXPPDU\ MXGJPHQWDQGLQVRGRLQJUDLVHGVHYHUDOGHIHQVHVLQFOXGLQJ

7KH +RQRUDEOH $UWKXU s 7DUQRZ 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH (DVWHUQ 'LVWULFW RI 0LFKLJDQ VLWWLQJ E\ GHVLJQDWLRQ  &URFNHWWHWDOY 1R 1R &URFNHWWHWDOY  &XPEHUODQG&ROOHJHHWDO &XPEHUODQG&ROOHJHHWDO

XQOHVV WKH YHU\ DFWLRQ LQ TXHVWLRQ KDV SUHYLRXVO\ TXDOLILHG LPPXQLW\  $OWKRXJK WKH GLVWULFW FRXUW JUDQWHG EHHQKHOGXQODZIXOEXWLWLVWRVD\WKDWLQWKH VXPPDU\MXGJPHQWLQIDYRURI+DPOLQDQGWKH&LW\RQRQH OLJKWRISUHH[LVWLQJODZWKHXQODZIXOQHVVPXVWEH VWDWHODZ FODLP LW UHMHFWHG +DPOLQjV TXDOLILHG LPPXQLW\ DSSDUHQW GHIHQVHDQGGHQLHGVXPPDU\MXGJPHQWRQWKH† FODLPV +DPOLQ DQG WKH &LW\ LPPHGLDWHO\ DSSHDOHG WKH GHQLDO RI $QGHUVRQ86DW7KXVRXULQTXLU\PXVWIRFXVRQ VXPPDU\MXGJPHQWDUJXLQJWKDWTXDOLILHGLPPXQLW\SURWHFWHG ZKHWKHUDUHDVRQDEOHRIILFHUZRXOGEHOLHYHDV+DPOLQGLG +DPOLQDQGWKDWWKH&LW\ZDVQRWOLDEOHEDVHGRQSULQFLSOHVRI WKDW EDVHG XSRQ WKH VWDWHPHQWV RI 'RH DQG 5RH DQG WKH † PXQLFLSDOOLDELOLW\)RUWKHUHDVRQVWKDWIROORZZH DGYLFH RI .HUVH\ SUREDEOH FDXVH WR DUUHVW &URFNHWW DQG 5(9(56(WKHGLVWULFWFRXUWjVGHQLDORITXDOLILHGLPPXQLW\ *UHHQHIRUFRPSOLFLW\WRFRPPLWUDSHH[LVWHG:HILQGWKDW DQG',60,66WKH&LW\jVDSSHDOIRUODFNRIMXULVGLFWLRQ D UHDVRQDEOH RIILFHU ZRXOG SRVVHVV VXFK D EHOLHI  $W WKH EURDGHVW OHYHO m>L@W LV FOHDUO\ HVWDEOLVKHG WKDW DQ DUUHVW ,%DFNJURXQG ZLWKRXW SUREDEOH FDXVH YLRODWHV WKH )RXUWK $PHQGPHQWl 'RQRYDQ  )G DW     )XUWKHU SDUWLFXODUL]LQJ WKH 2QWKHHYHQLQJRI'HFHPEHU WZRIHPDOHVWXGHQWV FRQWRXUVRIWKH)RXUWK$PHQGPHQWULJKWDVZHDUHUHTXLUHGWR sDQH'RHDQG6DOO\5RHDFFRPSDQLHGWKUHHPDOHVWXGHQWV GRE\$QGHUVRQLWLVFOHDUO\HVWDEOLVKHGWKDWUHOLDQFHRQWKH 5RG %RVWLF DQG SODLQWLIIVDSSHOODQWV &URFNHWW DQG *UHHQH DFFRXQWRIDQH\HZLWQHVVLVVXIILFLHQWWRHVWDEOLVKHGSUREDEOH LQWRDPDOHVWXGHQWUHVLGHQFHKDOODW&XPEHUODQG&ROOHJH,Q FDXVH$KOHUV )GDW+DPOLQjVUHOLDQFHRQWKH %RVWLFjVGRUPURRPZLWKWKHOLJKWVRXWWKHVWXGHQWVHQJDJHG DGYLFHRIDQDWWRUQH\IXUWKHUVXSSRUWVWKHUHDVRQDEOHQHVVRI LQGDQFLQJWLFNOLQJDQGVODSER[LQJ2QRQHEHG%RVWLFDQG +DPOLQjVEHOLHIWKDWSUREDEOHFDXVHH[LVWHG8OWLPDWHO\WKH *UHHQHWLFNOHG'RHZKLOHRQDQRWKHUEHG&URFNHWWDQG5RH DUUHVWZDVVDQFWLRQHGE\DMXGJHZKRDJUHHGWKDWSUREDEOH WLFNOHGHDFKRWKHUDQGEHFDPHLQWLPDWH$WWLPHVWKHZRPHQ FDXVHH[LVWHGDQGLVVXHGDQDUUHVWZDUUDQWEDVHGRQ+DPOLQ SOD\IXOO\FDOOHGWRHDFKRWKHUIRUKHOS DQG.HUVH\jVDIILGDYLW $V WKHVH HYHQWV ZHUH WUDQVSLULQJ DQRWKHU PDOH VWXGHQW 7KHZDUUDQWDSSOLFDWLRQGUDIWHGE\.HUVH\DQGVLJQHGE\ 'HPHWUXV6KDQQRQHQWHUHGWKHURRP6KDQQRQZKLVSHUHGWR +DPOLQ DOWKRXJK PLQLPDO ZDV QRW EDUUHQ RI LQGLFLD RI %RVWLF$FFRUGLQJWR'RHVKRUWO\DIWHU6KDQQRQHQWHUHGWKH SUREDEOHFDXVHm2QO\ZKHUHWKHZDUUDQWDSSOLFDWLRQLVVR URRP %RVWLF KHOG 'RH ZKLOH 6KDQQRQ WRXFKHG KHU YDJLQD ODFNLQJLQLQGLFLDRISUREDEOHFDXVHDVWRUHQGHURIILFLDOEHOLHI ZLWKKLVILQJHUDQGWKHQUDSHGKHU LQLWVH[LVWHQFHXQUHDVRQDEOHZLOOWKHVKLHOGRITXDOLILHG LPPXQLW\EHORVWl0DOOH\Y%ULJJV86 $W DERXW WKLV WLPH 5RH ORRNHG XS DQG VDZ 6KDQQRQ     7KHUH LV QR HYLGHQFH WKDW +DPOLQ RU .HUVH\ VWDQGLQJ LQ WKH PLGGOH RI WKH URRP  ,Q KHU ZRUGV 5RH NQRZLQJO\PDGHPDWHULDOPLVVWDWHPHQWVLQWKHDUUHVWZDUUDQW mILQDOO\ JRW DZD\ IURP &URFNHWWl OHIW KLP RQ WKH EHG E\ DSSOLFDWLRQ6HH+LOOY0F,QW\UH)G WK&LU KLPVHOI DQG ZHQW RYHU WR WKH RWKHU EHG WR mKHOSl 'RH JHW    m$QDFWLRQXQGHU† GRHVOLHDJDLQVWDQRIILFHU DZD\IURP*UHHQHDQG%RVWLF$V5RHDSSURDFKHGWKHRWKHU ZKR REWDLQV DQ LQYDOLG VHDUFK ZDUUDQW E\ PDNLQJ LQ KLV EHG LQ WKH GDUN *UHHQH ZKR KDG VWRSSHG WLFNOLQJ 'RH DIILGDYLW PDWHULDO IDOVH VWDWHPHQWV HLWKHU NQRZLQJO\ RU LQ JUDEEHG5RHDQGSXOOHGKHURQWRSRIKLP5RHWULHGWRJHW UHFNOHVVGLVUHJDUGIRUWKHWUXWKl +XWVHOOY6D\UH  )G  WK&LU  VHHDOVR$KOHUV)GDW  QRWLQJ WKDW SROLFH RIILFHUV PD\ QRW PDNH mKDVW\ 7KH QDPHV RI WKHVH VWXGHQWV KDYH EHHQ RPLWWHG WR SURWHFW WKHLU SULYDF\  &URFNHWWHWDOY 1R 1R &URFNHWWHWDOY  &XPEHUODQG&ROOHJHHWDO &XPEHUODQG&ROOHJHHWDO

DZD\EXW*UHHQHSHUVLVWHG$VVKHVWUXJJOHGZLWK*UHHQH DOOHJHGUDSH7KH\KDGRSSRUWXQLWLHVWRSODQZLWK6KDQQRQ 5RH QRWLFHG WKDW 'RH ZDV KLWWLQJ %RVWLF RQ WKH EDFN DQG DQG%RVWLFWRDVVLVWWKHDOOHJHGUDSH7KH\DOVRFRXOGKDYH WHOOLQJKLPWRJHWRIIRIKHU5RHDOVRVDZ6KDQQRQVWDQGLQJ NQRZQPRUHDERXW6KDQQRQDQG%RVWLFj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jV&OHDUO\(VWDEOLVKHG&RQVWLWXWLRQDO5LJKWV 5RH DQG 'RH UHSRUWHG WKH LQFLGHQW WR WKH 'HDQ RI 6WXGHQW /LIH/LQGD&DUWHU (YHQ DVVXPLQJ WKDW SUREDEOH FDXVH GLG QRW H[LVW IRU WKH DUUHVWVRI&URFNHWWDQG*UHHQH+DPOLQZRXOGEHHQWLWOHGWR &XPEHUODQG&ROOHJHSHUVRQQHOWRRN'RHDQG5RHWR&RUELQ TXDOLILHGLPPXQLW\XQOHVVDUHDVRQDEOHRIILFHUZRXOGNQRZ +RVSLWDO VR WKDW 'RH FRXOG XQGHUJR D UDSH H[DPLQDWLRQ WKDW+DPOLQjVDOOHJHGFRQGXFWYLRODWHGDFOHDUO\HVWDEOLVKHG &DUWHU LQIRUPHG WKH &LW\ SROLFH DQG &XPEHUODQG &ROOHJH IHGHUDOULJKW$QGHUVRQ86DW 1REOHY6FKPLWW 9LFH3UHVLGHQW0LFKDHO&ROHJURYHRIWKHDOOHJHGUDSH&DUWHU )G WK&LU  :KHUHFOHDUO\HVWDEOLVKHGODZ ILOHGDFDPSXVLQFLGHQWUHSRUWDQGDSROLFHUHSRUW LVYLRODWHGTXDOLILHGLPPXQLW\LVLQDSSURSULDWHEHFDXVHmD UHDVRQDEO\ FRPSHWHQW SXEOLF RIILFLDO VKRXOG NQRZ WKH ODZ &XPEHUODQG&ROOHJHSHUVRQQHOEURXJKW%RVWLF&URFNHWW JRYHUQLQJKLVFRQGXFWl+DUORZ86DW  *UHHQHDQGHYHQWXDOO\6KDQQRQWRWKH6WXGHQW&HQWHU2YHU DSHULRGRIVHYHUDOKRXUV&ROJURYHTXHVWLRQHG&URFNHWWDQG :KHWKHUWKHULJKWDWLVVXH ZDVmFOHDUO\HVWDEOLVKHGlZLOO *UHHQH ZKR UHVSRQGHG WKDW WKH\ GLG QRW NQRZ ZKDW ZDV WXUQ RQ WKH mSDUWLFXODUL]HGl FLUFXPVWDQFHV RI WKH FDVH JRLQJRQLQFOXGLQJWKDW'RHKDGEHHQUDSHG $QGHUVRQ  86 DW   &HQWDQQL Y (LJKW 8QNQRZQ 2IILFHUV  )G       WK &LU     7KH +DPOLQ DUULYHG DW &XPEHUODQG &ROOHJH WR VSHDN ZLWK 6XSUHPH &RXUW KDV OLPLWHG WKH DSSOLFDWLRQ RI WKH mFOHDUO\ FROOHJHRIILFLDOV+DPOLQGLGQRWLQWHUYLHZ6KDQQRQ%RVWLF HVWDEOLVKHGODZl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

LGHQWLILFDWLRQZLOOFRQVWLWXWHVXIILFLHQWSUREDEOHFDXVHµXQOHVV GLVFXVVLQJWKHDOOHJDWLRQV.HUVH\GUDIWHGDIILGDYLWVIRUWKH DWWKHWLPHRIWKHDUUHVWWKHUHLVDQDSSDUHQWUHDVRQIRUWKH DUUHVW RI 6KDQQRQ %RVWLF &URFNHWW DQG *UHHQH ZKLFK RIILFHU WR EHOLHYH WKDW WKH H\HZLWQHVV µZDV O\LQJ    +DPOLQVLJQHGDQG.HUVH\QRWDUL]HG7KHDIILGDYLWVDOOHJHG >LQ@DFFXUDWHRUPLVWDNHQjjl +DPOLQUHOLHGRQERWK WKDW &URFNHWW DQG *UHHQH ZHUH mXQODZIXOO\ DFWLQJ ZLWK 5RHjV DQG 'RHjV GHVFULSWLRQ RI WKH HYHQWV  1RWDEO\ LQ NQRZOHGJHWKDW'HPHWULXV>VLF@6KDQQRQZDVLQWHQGLQJDQG LQWHUYLHZLQJ5RHDERXW'RHjVDOOHJHGUDSH+DPOLQOHDUQHG GLG IRUFLEO\ UDSH DQ DGXOW IHPDOH SUHYHQWHG RWKHU SHUVRQV WKDW &URFNHWW DQG *UHHQH KDG SUHYHQWHG 5RH IURP IURPFRPLQJWRKHUDLGDQGUHPDLQHGSUHVHQWGXULQJWKHUDSH DSSURDFKLQJ'RHHYHQWKRXJK5RHVWUXJJOHGWRIUHHKHUVHOI DFWLYHO\SUHYHQWLQJDVVLVWDQFHl+DPOLQJDYHWKHDIILGDYLWVWR DQGWROGWKHPWKDW'RHZDVQRORQJHUODXJKLQJ+DPOLQDOVR DQRWKHU SROLFH RIILFHU 5LFN 0RVHOH\ DQG WKHQ +DPOLQ UHOLHGRQ'RHjVUHSHDWHGVWDWHPHQWWRKLP m,FDQjWEHOLHYH HVFRUWHG 'RH DQG 5RH WR &LW\ +DOO ZKHUH WKH\ SURYLGHG 'X6KRQ >*UHHQH@ DQG 7RUUH >&URFNHWW@  7KH\ ZHUH P\ ZULWWHQ DFFRXQWV RI WKH LQFLGHQW  0RVHOH\ SUHVHQWHG WKH IULHQGV WKH\ZHUHP\IULHQGVl,QDGGLWLRQWRWKHVWDWHPHQWV DIILGDYLWV WR D :KLWOH\ &RXQW\ GLVWULFW MXGJH ZKR LVVXHG RI'RHDQG5RHLQPDNLQJWKHGHWHUPLQDWLRQWKDWSUREDEOH ZDUUDQWVWRDUUHVW6KDQQRQIRUILUVWGHJUHHUDSH%RVWLFIRU FDXVHH[LVWHG+DPOLQUHOLHGRQWKHDGYLFHRI&RXQW\$WWRUQH\ IDFLOLWDWLRQRIDILUVWGHJUHHUDSHDQG&URFNHWWDQG*UHHQHIRU .HUVH\ DQG .HUVH\jV XQGHUVWDQGLQJ RI ZKDW 'RH DQG 5RH FRPSOLFLW\LQDILUVWGHJUHHUDSH0RVHOH\JDYHWKHZDUUDQWV FODLPHGKDSSHQHG WRSROLFHRIILFHU(s0LOOHUZKRDUUHVWHG6KDQQRQ%RVWLF &URFNHWW DQG *UHHQH DQG WRRN WKH IRXU VWXGHQWV WR WKH %DVHGRQWKLVLQIRUPDWLRQ+DPOLQUHDVRQDEO\EHOLHYHGWKDW :KLWOH\&RXQW\s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mLVXQGHUQR ,Q UHVSRQVH WR WKHLU DUUHVW LPSULVRQPHQW VFKRODUVKLS GXW\WRLQYHVWLJDWHIXUWKHURUWRORRNIRUDGGLWLRQDOHYLGHQFH UHYRFDWLRQVXVSHQVLRQDQGUHFHLSWRIIDLOLQJJUDGHV&URFNHWW ZKLFKPD\H[FXOSDWHWKHDFFXVHGl$KOHUV)GDW DQG*UHHQHVXHG&XPEHUODQG&ROOHJH&ROHJURYHWKH&LW\ +DPOLQDQG.HUVH\7KHRULJLQDOFRPSODLQWDOOHJHGVHYHQ &HUWDLQO\ +DPOLQjV FRQFOXVLRQ WKDW &URFNHWW DQG *UHHQH FRXQWV    GHSULYDWLRQ RI OLEHUW\ ZLWKRXW GXH SURFHVV SRVVHVVHGWKHUHTXLVLWHPHQWDOVWDWHZDVQRWPDQGDWHGE\WKH SXUVXDQWWR†    GHSULYDWLRQRISURSHUW\ZLWKRXWGXH LQIRUPDWLRQDYDLODEOHWRKLP,WLVSRVVLEOHWRLQIHUWKDWLQ SURFHVV SXUVXDQW WR †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jVFRQFOXVLRQ ZDVSHUPLVVLEOHXQGHUWKHFLUFXPVWDQFHV:HILQGWKDWLWZDV )URP WKH LQIRUPDWLRQ DYDLODEOH WR +DPOLQ LW LV FHUWDLQO\  SRVVLEOHWRLQIHUWKDW&URFNHWWDQG*UHHQHLQWHQGHGWRDLGWKH $Q DPHQGHG FRPSODLQW ZDV ILOHG LQ WKH GLVWULFW FRXUW RQ )HEUXDU\   DGGLQJ .HUVH\ DV D GHIHQGDQW  &URFNHWWHWDOY 1R 1R &URFNHWWHWDOY  &XPEHUODQG&ROOHJHHWDO &XPEHUODQG&ROOHJHHWDO

+DPOLQ DQG WKH &LW\ GLG QRW UDLVH WKH TXDOLILHG LPPXQLW\ UHVXOWWKDWLVVXIILFLHQWIRUWKHFRPPLVVLRQRIWKHRIIHQVHl  GHIHQVH XQWLO WKHLU UHSO\ EULHI  7KH GLVWULFW FRXUW JUDQWHG $ SHUVRQ DFWV ZLWK WKH LQWHQWLRQDO PHQWDO VWDWH XQGHU VXPPDU\MXGJPHQWWR+DPOLQDQGWKH&LW\RQWKHPDOLFLRXV .HQWXFN\ODZZKHQmKLVFRQVFLRXVREMHFWLYHLVWRFDXVHWKDW SURVHFXWLRQFRXQWEXWGHQLHGWKHUHPDLQGHURIWKHLUPRWLRQ UHVXOWRUWRHQJDJHLQWKDWFRQGXFWl.< 5(9 67$7 $11 †   +DPOLQDQGWKH&LW\LPPHGLDWHO\DSSHDOHGWKHGHQLDORI TXDOLILHGLPPXQLW\,QUHVSRQVH&URFNHWWDQG*UHHQHPRYHG 2IFRXUVHm>S@UREDEOHFDXVHGRHVQRWUHTXLUHWKHVDPHW\SH WR GLVPLVV WKH DSSHDO DUJXLQJ WKDW WKLV &RXUW KDG QR RIVSHFLILFHYLGHQFHRIHDFKHOHPHQWRIWKHRIIHQVHDVZRXOG MXULVGLFWLRQ WR FRQVLGHU WKH GHQLDO RI TXDOLILHG LPPXQLW\ EHQHHGHGWRVXSSRUWDFRQYLFWLRQl$GDPVY:LOOLDPV EHFDXVHWKDWGHFLVLRQZDVQRWDILQDORUGHU7KLV&RXUWGHQLHG 86        ,Q RUGHU WR KDYH SUREDEOH FDXVH WR &URFNHWWDQG*UHHQHjVPRWLRQEHFDXVHWKHDSSHDOSUHVHQWHG DUUHVW&URFNHWWDQG*UHHQH+DPOLQUHDVRQDEO\KDGWREHOLHYH FOHDULVVXHVRIODZ6HH&URFNHWWY&XPEHUODQG&ROO1R WKDWSODLQWLIIVDLGHGFRXQVHOHGRUDWWHPSWHGWRDLG6KDQQRQ 2UGHU WK&LUsXQH  DQG %RVWLF LQ SODQQLQJ RU FRPPLWWLQJ WKH UDSH DQG WKDW SODLQWLIIV VSHFLILFDOO\ LQWHQGHG WR SURPRWH RU IDFLOLWDWH WKH )ROORZLQJWKHGHQLDORIWKHPRWLRQWRGLVPLVVWKHSDUWLHV FRPPLVVLRQRIWKHUDSH EULHIHG WKH VXEVWDQFH RI WKH DSSHDO  +DPOLQ DQG WKH &LW\ DUJXHG WKDW  L  VXPPDU\ MXGJPHQW ZDV SURSHU EHFDXVH :KHWKHU+DPOLQ$UUHVWHG&URFNHWWDQG*UHHQH SUREDEOHFDXVHH[LVWHGWRDUUHVW&URFNHWWDQG*UHHQH  LL WKH :LWKRXW3UREDEOH&DXVH TXDOLILHGLPPXQLW\GHWHUPLQDWLRQGRHVQRWGHSHQGRQDMXU\jV DVVHVVPHQWRIZKHWKHUSUREDEOHFDXVHH[LVWHG  LLL +DPOLQ :HPXVWHYDOXDWHZKHWKHU+DPOLQSURSHUO\FRQFOXGHGWKDW VKRXOGKDYHUHFHLYHGTXDOLILHGLPPXQLW\EHFDXVHKLVFRQGXFW WKHUHZDVSUREDEOHFDXVHWRDUUHVW&URFNHWWDQG*UHHQHIRU ZDVREMHFWLYHO\UHDVRQDEOH DQG LY GXHWRWKHHVWDEOLVKHG FRPSOLFLW\WRFRPPLWUDSHDWWKHWLPHWKHDUUHVWZDUUDQWVZHUH ODZRIPXQLFLSDOOLDELOLW\XQGHU†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jVDSSHDOEHFDXVHLWLVQRWHQWLWOHGWRTXDOLILHGLPPXQLW\ DQG5RHDQGZKRHYHQWXDOO\GUDIWHGWKHDIILGDYLWWKDW+DPOLQ DQG G HYHQLIWKHUHLVLQWHUORFXWRU\MXULVGLFWLRQRYHU+DPOLQ VLJQHG+DPOLQKDGQRWLQWHUYLHZHG&URFNHWWRU*UHHQH QRU KHLVQRWHQWLWOHGWRTXDOLILHGLPPXQLW\:HQRZFRQVLGHUWKH KDG+DPOLQLQWHUYLHZHGWKHRWKHUVSUHVHQWLQ%RVWLFjVGRUP LVVXHV SUHVHQWHG E\ WKH DSSHDOV ORGJHG E\ +DPOLQ DQG WKH URRPDWWKHWLPHRIWKHDOOHJHGUDSH+DPOLQDOVRGLGQRW &LW\ KDYH WKH EHQHILW RI WKH ZULWWHQ VWDWHPHQWV RI 'RH 5RH &URFNHWWRU*UHHQHZKLFKZHUHGUDIWHGODWHUWKDWQLJKW +DPOLQjVUHOLDQFHRQWKHVWDWHPHQWVRIWKHYLFWLPDQGDQ H\HZLWQHVV DORQH PD\ EH VXIILFLHQW WR HVWDEOLVK SUREDEOH FDXVH  6HH $KOHUV  )G DW  m$Q H\HZLWQHVV  &URFNHWWHWDOY 1R 1R &URFNHWWHWDOY  &XPEHUODQG&ROOHJHHWDO &XPEHUODQG&ROOHJHHWDO

7KLVFDVHLPSOLFDWHVWKHmFRPSOLFLW\WRWKHDFWlSURQJRI ,,,QWHUORFXWRU\$SSHOODWHsXULVGLFWLRQ DFFRPSOLFH OLDELOLW\ DQG QRW WKH mFRPSOLFLW\ WR WKH UHVXOWl SURQJ$VWKH.HQWXFN\6XSUHPH&RXUWPDGHFOHDULQ7KDUS :H PXVW ILUVW DVVHVV ZKHWKHU ZH KDYH MXULVGLFWLRQ WR mFRPSOLFLW\ WR WKH DFWl DSSOLHV ZKHQ WKH SULQFLSDO DFWRUjV FRQVLGHU WKH LVVXHV UDLVHG RQ WKLV LQWHUORFXWRU\ DSSHDO E\ FRQGXFWFRQVWLWXWHVWKHFULPLQDORIIHQVH6:GDW +DPOLQDQGWKH&LW\6HH)UDQW]Y9LOODJHRI%UDGIRUG 8QGHUWKHDOOHJDWLRQVKHUH%RVWLFE\KROGLQJ'RHGRZQDQG )G  WK&LU (VVHQWLDOO\+DPOLQDSSHDOV 6KDQQRQE\UDSLQJKHULQWHQWLRQDOO\HQJDJHGLQFRQGXFWWKDW WKHGLVWULFWFRXUWjVRUGHUGHQ\LQJKLPTXDOLILHGLPPXQLW\ZLWK FRQVWLWXWHVDFULPLQDORIIHQVH7KXVLI&URFNHWWDQG*UHHQH UHJDUGWRWKHSODLQWLIIVjDOOHJDWLRQSXUVXDQWWR† WKDW ZHUHDFFRPSOLFHVWKHLUOLDELOLW\ZRXOGEHSUHPLVHGGLUHFWO\ +DPOLQGHSULYHG&URFNHWWDQG*UHHQHRIWKHLUOLEHUW\ZLWKRXW RQ 6KDQQRQ DQG %RVWLFjV FRQGXFW  7KHUH LV QR EDVLV IRU GXHSURFHVVZKHQKHDUUHVWHGDQGMDLOHGWKHPIRUFRPSOLFLW\ DSSO\LQJ WKH mFRPSOLFLW\ WR WKH UHVXOWl SURQJ KHUH  8QGHU LQWKHUDSHRI'RHZLWKRXWSUREDEOHFDXVH7KH&LW\DUJXHV .HQWXFN\ ODZ mFRPSOLFLW\ WR WKH UHVXOWl RFFXUV ZKHQ DQ IRU WKH ILUVW WLPH RQ DSSHDO WKDW XQGHU WKH SULQFLSOHV XQLQWHQGHGFRQVHTXHQFHRIDSHUVRQjVDFWLRQVFRQVWLWXWHVD JRYHUQLQJ †   PXQLFLSDO OLDELOLW\ LW GLG QRW GHSULYH FULPLQDORIIHQVH6HH.< 5(9 67$7 $11†FPW &URFNHWWDQG*UHHQHRIWKHLUOLEHUW\ZLWKRXWGXHSURFHVV:H VHHDOVR7KDUS6:GDW%HFDXVHWKHUHZHUHQR ILQG WKDW WKLV &RXUW KDV MXULVGLFWLRQ RYHU +DPOLQjV XQLQWHQGHG FRQVHTXHQFHV DVVRFLDWHG ZLWK WKH UDSH DQG LQWHUORFXWRU\DSSHDOSXUVXDQWWRWKHFROODWHUDORUGHUGRFWULQH IDFLOLWDWLRQ RI WKH UDSH KHUH WKHUH FRXOG EH QR EDVLV IRU +RZHYHU ZH ILQG WKDW MXULVGLFWLRQ RYHU WKH &LW\jV DSSHDO KROGLQJ&URFNHWWDQG*UHHQHOLDEOHXQGHUDmFRPSOLFLW\LQWKH XQGHU WKDW GRFWULQH RU XQGHU WKH GRFWULQH RI SHQGHQW UHVXOWlWKHRU\ MXULVGLFWLRQZRXOGEHLPSURSHU$FFRUGLQJO\ZHZLOODGGUHVV WKHPHULWVRI+DPOLQjVTXDOLILHGLPPXQLW\FODLPRQO\ $FFRPSOLFHOLDELOLW\IRUUDSHXQGHUmFRPSOLFLW\WRWKHDFWl SURQJUHTXLUHVSURRIWKDWWKHGHIHQGDQWHQJDJHGLQRQHRI $SSHOODWHFRXUWVJHQHUDOO\RQO\KDYHMXULVGLFWLRQRYHUWKH WKUHH IRUPV RI FRQGXFW  D  WKH VROLFLWDWLRQ FRPPDQG RU ILQDO GHFLVLRQV RI GLVWULFW FRXUWV  6HH  86& †   FRQVSLUDF\ZLWKDQRWKHUSHUVRQWRFRPPLWUDSH  E WKHDLGLQJ +RZHYHUXQGHUWKHFROODWHUDORUGHUGRFWULQHDQRUGHULVVXHG FRXQVHOLQJ RU DWWHPSW WR DLG VXFK SHUVRQ LQ SODQQLQJ RU EHIRUHWKHFRQFOXVLRQRIWKHGLVWULFWFRXUWSURFHHGLQJVPD\EH FRPPLWWLQJWKHUDSH RU F WKHIDLOXUHWRPDNHDSURSHUHIIRUW FRQVLGHUHG D ILQDO RUGHU DQG WKHUHIRUH LPPHGLDWHO\ WR SUHYHQW WKH UDSH ZKHUH WKH SHUVRQ KDV WKH OHJDO GXW\ WR DSSHDODEOHsRKQVRQYsRQHV86    VHH SUHYHQWWKHUDSH6HH.< 5(9 67$7 $11††    86& †    8QGHU WKLV GRFWULQH DQ RUGHU LV   D  %DQNV%DOGZLQ    $GGLWLRQDOO\ LPPHGLDWHO\ DSSHDODEOH LI WKH RUGHU    FRQFOXVLYHO\ mFRPSOLFLW\ WR WKH DFWl DFFRPSOLFH OLDELOLW\ XQOLNH GHWHUPLQHGWKHGLVSXWHGTXHVWLRQ   UHVROYHGDQLPSRUWDQW mFRPSOLFLW\ LQ WKH UHVXOWl OLDELOLW\ UHTXLUHV VSHFLILF LQWHQW LVVXHFRPSOHWHO\VHSDUDWHIURPWKHPHULWVRIWKHDFWLRQ DQG &RPSDUH.< 5(9 67$7 $11 †   UHTXLULQJDFWLRQ  ZRXOGEHHIIHFWLYHO\XQUHYLHZDEOHRQDSSHDOIURPDILQDO ZLWK mWKH LQWHQWLRQ RI SURPRWLQJ RU IDFLOLWDWLQJ WKH MXGJPHQWsRKQVRQ86DW &RKHQY%HQHILFLDO/LIH FRPPLVVLRQ RI WKH RIIHQVHl  DQG .< 5(9 67$7 $11 ,QGXV/RDQ&RUS86    †FPW m7REHJXLOW\XQGHUVXEVHFWLRQ  IRUDFULPH FRPPLWWHG E\ DQRWKHU D GHIHQGDQW PXVW KDYH VSHFLILFDOO\ LQWHQGHG WR SURPRWH RU IDFLOLWDWH WKH FRPPLVVLRQ RI WKDW RIIHQVHl ZLWK.< 5(9 67$7 $11 †   UHTXLULQJ RQO\DFWLRQmZLWKWKHNLQGRIFXOSDELOLW\ZLWKUHVSHFWWRWKH  &URFNHWWHWDOY 1R 1R &URFNHWWHWDOY  &XPEHUODQG&ROOHJHHWDO &XPEHUODQG&ROOHJHHWDO

$+DPOLQjV$SSHDORIWKH'HQLDORI4XDOLILHG 2QFH DQ RIILFHU HVWDEOLVKHV SUREDEOH FDXVH KH RU VKH LV ,PPXQLW\ XQGHUQRREOLJDWLRQWRFRQWLQXHLQYHVWLJDWLQJDQGPD\LQVWHDG SXUVXHWKHDUUHVWRIDVXVSHFW6HH.OHLQ)GDW 8QGHUWKLVGRFWULQHDGHQLDORIVXPPDU\MXGJPHQWEDVHG m%XWRQFHDSROLFHRIILFHUKDVVXIILFLHQWSUREDEOHFDXVHWR RQ D OHJDO GHWHUPLQDWLRQ WKDW TXDOLILHG LPPXQLW\ LV DUUHVWKHQHHGQRWLQYHVWLJDWHIXUWKHUl $KOHUV)GDW LQDSSURSULDWHLVLPPHGLDWHO\DSSHDODEOHDVDFROODWHUDORUGHU  m2QFHSUREDEOHFDXVHLVHVWDEOLVKHGDQRIILFHULVXQGHU 6HH0LWFKHOOY)RUV\WK86   QR GXW\ WR LQYHVWLJDWH IXUWKHU RU WR ORRN IRU DGGLWLRQDO %HKUHQVY3HOOHWLHU86    6NRXVHQY HYLGHQFHZKLFKPD\H[FXOSDWHWKHDFFXVHGl &ULVV)G %ULJKWRQ+LJK6FK)G WK&LU 7R DW m$SROLFHPDQKRZHYHULVXQGHUQRREOLJDWLRQWRJLYH WKH H[WHQW WKDW D GHQLDO RI VXPPDU\ MXGJPHQW ILQGLQJ DQ\ FUHGHQFH WR D VXVSHFWjV VWRU\ QRU VKRXOG D SODXVLEOH TXDOLILHGLPPXQLW\LQDSSURSULDWHLVEDVHGXSRQWKHGLVWULFW H[SODQDWLRQLQDQ\VHQVHUHTXLUHWKHRIILFHUWRIRUHJRDUUHVW FRXUWjV GHWHUPLQDWLRQ WKDW D JHQXLQH LVVXH RI PDWHULDO IDFW SHQGLQJ IXUWKHU LQYHVWLJDWLRQ LI WKH IDFWV DV LQLWLDOO\ H[LVWVWKHGHFLVLRQZLOOQRWEHLPPHGLDWHO\DSSHDODEOH6HH GLVFRYHUHGSURYLGHSUREDEOHFDXVHl  sRKQVRQ86DW VHH)DUP/DERU2UJ&RPPY 2KLR6WDWH+LJKZD\3DWURO)G WK&LU ,Q WKH †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mVH[XDO LQWHUFRXUVH ZLWK DQRWKHU SHUVRQ E\ IRUFLEOH %&LW\jV$SSHDORI0XQLFLSDO/LDELOLW\ FRPSXOVLRQl.< 5(9 67$7 $11 †  D  %DQNV %DOGZLQ    .HQWXFN\ 5HYLVHG 6WDWXWH †  %HFDXVH WKH &LW\ IDLOHG WR UDLVH WKH LVVXH RI PXQLFLSDO SURYLGHVWZRmVHSDUDWHDQGGLVWLQFWWKHRULHVlXQGHUZKLFKD OLDELOLW\LQWKHGLVWULFWFRXUWWKH&LW\jVLQWHUORFXWRU\DSSHDORI SHUVRQPD\EHDQDFFRPSOLFHWRDFULPH mµFRPSOLFLW\WRWKH WKLVLVVXHLVLQDSSURSULDWH0RUHRYHUHYHQLIWKH&LW\KDG DFWjXQGHUVXEVHFWLRQ  RIWKHVWDWXWHZKLFKDSSOLHVZKHQ UDLVHGWKHLVVXHRIPXQLFLSDOOLDELOLW\DWWKHGLVWULFWFRXUWOHYHO WKHSULQFLSDODFWRUjVFRQGXFWFRQVWLWXWHVWKHFULPLQDORIIHQVH DQGWKHGLVWULFWFRXUWKDGUHMHFWHGWKDWDUJXPHQWWKLV&RXUW DQG µFRPSOLFLW\ WR WKH UHVXOWj XQGHU VXEVHFWLRQ   RI WKH ZRXOG QRW KDYH MXULVGLFWLRQ RYHU VXFK DQ DSSHDO XQGHU WKH VWDWXWH ZKLFK DSSOLHV ZKHQ WKH UHVXOW RI WKH SULQFLSDOjV FROODWHUDORUGHUGRFWULQH6HH&RKHQ86DW VHH FRQGXFW FRQVWLWXWHV WKH FULPLQDO RIIHQVHl  7KDUS Y DOVR sRKQVRQ  86 DW   $OWKRXJK WKH ILUVW WZR &RPPRQZHDOWK6:G .\ VHHDOVR.< UHTXLUHPHQWVZRXOGEHVDWLVILHGGHWHUPLQLQJWKHTXHVWLRQRI 5(9 67$7 $11 †      %DQNV%DOGZLQ  PXQLFLSDOOLDELOLW\ZRXOGFRQFOXVLYHO\GHWHUPLQHWKH&LW\jV  &URFNHWWHWDOY 1R 1R &URFNHWWHWDOY &XPEHUODQG&ROOHJHHWDO &XPEHUODQG&ROOHJHHWDO

)RXUWHHQWK$PHQGPHQWWKH)RXUWK$PHQGPHQWUHTXLUHVWKH OLDELOLW\DQGZRXOGQRWDIIHFWDQ\RWKHULVVXHLQWKHFDVHWKH 6WDWHVWRSURYLGHDIDLUDQGUHOLDEOHGHWHUPLQDWLRQRISUREDEOH &LW\ ZRXOG QRW EH DEOH WR VDWLVI\ WKH WKLUG HOHPHQW DV WKLV FDXVHDVDFRQGLWLRQIRUDQ\VLJQLILFDQWSUHWULDOUHVWUDLQWRI &RXUW FRXOG HIIHFWLYHO\ UHYLHZ WKH TXHVWLRQ RI PXQLFLSDO OLEHUW\l  FLWLQJ*HUVWHLQY3XJK86    OLDELOLW\DIWHUWKHGLVWULFWFRXUWUHQGHUHGDILQDOMXGJPHQW )RUDSROLFHRIILFHUWRKDYHSUREDEOHFDXVHIRUDUUHVWWKHUH 7KH&LW\DOVRFRQWHQGVWKDWZHKDYHMXULVGLFWLRQRYHULWV PXVW EH mIDFWV DQG FLUFXPVWDQFHV ZLWKLQ WKH RIILFHUjV DSSHDO XQGHU SULQFLSOHV RI SHQGHQW DSSHOODWH MXULVGLFWLRQ NQRZOHGJHWKDWDUHVXIILFLHQWWRZDUUDQWDSUXGHQWSHUVRQRU &LWLQJ0DWWR[Y&LW\RI)RUHVW3DUNWKH&LW\DUJXHVWKDWRQ RQHRIUHDVRQDEOHFDXWLRQLQEHOLHYLQJLQWKHFLUFXPVWDQFHV LQWHUORFXWRU\DSSHDOZKHUHDPXQLFLSDOLW\jVULJKWWRVXPPDU\ VKRZQWKDWWKHVXVSHFWKDVFRPPLWWHGLVFRPPLWWLQJRULV MXGJPHQW LV mLQH[WULFDEO\ LQWHUWZLQHGl ZLWK D TXDOLILHG DERXWWRFRPPLWDQRIIHQVHl0LFKLJDQY'H)LOOLSSR LPPXQLW\ DQDO\VLV D FRXUW PD\ H[HUFLVH SHQGHQW DSSHOODWH 86   VHHDOVR%HFNY2KLR 86   MXULVGLFWLRQRYHUWKHPXQLFLSDOLW\jVDUJXPHQW)G    )ULGOH\ Y +RUULJKV   )G   WK &LU  WK&LU VHHDOVR6ZLQWY&KDPEHUV&RXQW\   .OHLQ)GDW 'RQRYDQ)GDW  &RPPjQ86   :KLOHWKH&LW\DFFXUDWHO\ m3UREDEOH FDXVH UHTXLUHV RQO\ WKH SUREDELOLW\ RI FULPLQDO UHFLWHV WKH SHQGHQW DSSHOODWH MXULVGLFWLRQ GRFWULQH LWV DFWLYLW\QRWVRPHW\SHRIµSULPDIDFLHjVKRZLQJl&ULVVY DUJXPHQW XOWLPDWHO\ IDLOV  +DPOLQjV DSSHDO FKDOOHQJHV WKH &LW\ RI .HQW  )G    WK &LU    VHH DOVR GHQLDORITXDOLILHGLPPXQLW\ZKLFKWXUQVRQZKHWKHUWKHUH 8QLWHG6WDWHVY6WULFNODQG)G WK&LU  ZDVSUREDEOHFDXVHIRUWKHDUUHVWRIWKHSODLQWLIIVZKLOHWKH m7KH)RXUWK$PHQGPHQWDIWHUDOOQHFHVVLWDWHVDQLQTXLU\ &LW\DUJXHVWKDWWKHUHZDVQRPXQLFLSDOFXVWRPRUSROLF\WKDW LQWRSUREDELOLWLHVQRWFHUWDLQW\l  FRXOGIRUPWKHEDVLVIRULWV† OLDELOLW\KHUH$OWKRXJK +DPOLQjV DSSHDO DQG WKH &LW\jV DSSHDO RYHUODS LQ VRPH 7KH SUREDELOLW\ RI FULPLQDO DFWLYLW\ LV DVVHVVHG XQGHU D UHVSHFWVWKHWZRDSSHDOVDUHQRWmLQH[WULFDEO\LQWHUWZLQHGl UHDVRQDEOHQHVVVWDQGDUGEDVHGRQmDQH[DPLQDWLRQRIDOOIDFWV EHFDXVH UHVROXWLRQ RI +DPOLQjV LQWHUORFXWRU\ DSSHDO RI WKH DQGFLUFXPVWDQFHVZLWKLQDQRIILFHUjVNQRZOHGJHDWWKHWLPH SUREDEOHFDXVHLVVXHGRHVQRWQHFHVVDULO\UHVROYHWKH&LW\jV RIDQDUUHVWl(VWDWHRI'LHWULFKY%XUURZV)G LQWHUORFXWRU\ DSSHDO RI WKH PXQLFLSDO SROLF\ RU FXVWRP  WK &LU   VHH DOVR +XQWHU Y %U\DQW  86 UHTXLUHPHQW6HH0RRUHY&LW\RI:\QQHZRRG)G      m>7@KHFRXUWVKRXOGDVNZKHWKHUWKHDJHQWV  WK&LU   m>$@SHQGHQWDSSHOODWHFODLPFDQEH DFWHGUHDVRQDEO\XQGHUVHWWOHGODZLQWKHFLUFXPVWDQFHVQRW UHJDUGHG DV LQH[WULFDEO\ LQWHUWZLQHG ZLWK D SURSHUO\ ZKHWKHU DQRWKHU UHDVRQDEOH RU PRUH UHDVRQDEOH UHYLHZDEOH FODLP RQ FROODWHUDO DSSHDO RQO\ LI WKH SHQGHQW LQWHUSUHWDWLRQRIWKHHYHQWVFDQEHFRQVWUXFWHGDIWHUWKH FODLPLVFRWHUPLQRXVZLWKRUVXEVXPHGLQWKHFODLPEHIRUH IDFWl .OHLQ)GDW m3UREDEOHFDXVHLVDVVHVVHG WKHFRXUWRQLQWHUORFXWRU\DSSHDOWKDWLVZKHQWKHDSSHOODWH µIURPWKHSHUVSHFWLYH RIDUHDVRQDEOHRIILFHURQWKHVFHQH UHVROXWLRQ RI WKH FROODWHUDO DSSHDO QHFHVVDULO\ UHVROYHV WKH UDWKHU WKDQ ZLWK WKH  YLVLRQ RI KLQGVLJKW>@jl SHQGHQW FODLP DV ZHOOl   )RU WKDW UHDVRQ ZH UHMHFW WKH *DUGHQKLUH  )G DW   6WULFNODQG  )G DW  DSSOLFDWLRQ RI SHQGHQW DSSHOODWH MXULVGLFWLRQ WR WKH &LW\jV m>7@KH )RXUWK $PHQGPHQW GRHV QRW UHTXLUH WKDW D SROLFH DSSHDO  %HFDXVH QHLWKHU RI WKH &LW\jV EDVHV IRU DSSHOODWH RIILFHUNQRZDFULPHRFFXUUHGDWWKHWLPHWKHRIILFHUDUUHVWVRU MXULVGLFWLRQWKHFROODWHUDORUGHUGRFWULQHRUSHQGHQWDSSHOODWH VHDUFKHVDVXVSHFWl  MXULVGLFWLRQ DSSO\ KHUH ZH DUH ZLWKRXW MXULVGLFWLRQ WR FRQVLGHUWKHPHULWVRIWKH&LW\jVPXQLFLSDOOLDELOLW\GHIHQVH DQGZHGLVPLVVWKH&LW\jVDSSHDO  &URFNHWWHWDOY 1R 1R &URFNHWWHWDOY  &XPEHUODQG&ROOHJHHWDO &XPEHUODQG&ROOHJHHWDO

,,,4XDOLILHG,PPXQLW\ $:KHWKHU+DPOLQ'HSULYHG&URFNHWWDQG*UHHQH RID&RQVWLWXWLRQDO5LJKW ,Q FLYLO VXLWV SXUVXDQW WR  86& †   IRU PRQH\ GDPDJHVTXDOLILHGLPPXQLW\SURWHFWVDSXEOLFRIILFLDOIURP :HILUVWDGGUHVVZKHWKHUWKHSODLQWLIIVKDYHDOOHJHGIDFWV EHLQJVXHGDVORQJDVWKH RIILFLDOmGRHVQRWYLRODWHFOHDUO\ WKDWYLHZHGLQWKHOLJKWPRVWIDYRUDEOHWRWKHPGHPRQVWUDWH HVWDEOLVKHG VWDWXWRU\ RU FRQVWLWXWLRQDO ULJKWV RI ZKLFK D WKDW WKH GHIHQGDQWjV FRQGXFW YLRODWHG WKHLU FRQVWLWXWLRQDO UHDVRQDEOHSHUVRQZRXOGKDYHNQRZQl+DUORZY)LW]JHUDOG ULJKWV7KHIHGHUDOFRQVWLWXWLRQDOULJKWLPSOLFDWHGKHUHLVWKH  86       4XDOLILHG LPPXQLW\ LV QRW D )RXUWK$PHQGPHQWULJKWWREHDUUHVWHGRQO\XSRQSUREDEOH GHIHQVHWROLDELOLW\ ZKHUHLWLVDSSOLFDEOHLWVSXUSRVHLVWR FDXVH3\OHVY5DLVRU)G WK&LU  VKLHOG WKH RIILFLDO IURP VXLW DOWRJHWKHU VDYLQJ WKH RIILFLDO 'RQRYDQY7KDPHV)G    WK&LU   IURPWKHEXUGHQVRIGLVFRYHU\DQGFRVWVRIWULDO6HH0LWFKHOO 7KXVZHPXVWDGGUHVVZKHWKHUWKHHYLGHQFHZKHQFRQVWUXHG 86DW H[SODLQLQJWKDWTXDOLILHGLPPXQLW\LVmDQ PRVWIDYRUDEO\WR&URFNHWWDQG*UHHQHVWDWHVDFODLPWKDW LPPXQLW\IURPVXLWUDWKHUWKDQDPHUHGHIHQVHWROLDELOLW\ DQG +DPOLQDUUHVWHGWKHPZLWKRXWSUREDEOHFDXVH3\OHV)G OLNH DEVROXWH LPPXQLW\ LW LV HIIHFWLYHO\ ORVW LI D FDVH LV DW H[SODLQLQJ† FODLPIRUZURQJIXODUUHVWWXUQVRQ HUURQHRXVO\SHUPLWWHGWRJRWRWULDOl 4XDOLILHGLPPXQLW\LV ZKHWKHU RIILFHU KDG SUREDEOH FDXVH XQGHU WKH )RXUWK LQWHQGHGWRVHUYHWKHSXEOLFLQWHUHVWE\SHUPLWWLQJRIILFLDOVWR $PHQGPHQW  WDNH DFWLRQ mµZLWK LQGHSHQGHQFH DQG ZLWKRXW IHDU RI FRQVHTXHQFHVjl+DUORZ86DW  TXRWLQJ3LHUVRQ 2QDSSHDO+DPOLQDUJXHVWKDWSUREDEOHFDXVHH[LVWHGIRU Y5D\86    DUUHVWLQJ&URFNHWWDQG*UHHQHDQGIRUWKDWUHDVRQSODLQWLIIV FDQQRWVKRZWKHGHSULYDWLRQRIDQ\IHGHUDOULJKW&URFNHWW 7KH6XSUHPH&RXUWKDVHVWDEOLVKHGDWZRSDUWDQDO\VLVIRU DQG *UHHQH UHSO\ WKDW +DPOLQjV LQYHVWLJDWLRQ ZDV QRW DVVHVVLQJ ZKHWKHU D SXEOLF RIILFLDO LV HQWLWOHG WR TXDOLILHG WKRURXJKHQRXJKWRHVWDEOLVKSUREDEOHFDXVH,QVXSSRUWRI LPPXQLW\ 6HH 6DXFLHU Y .DW]  86     WKHLUDUJXPHQWWKH\UHO\KHDYLO\RQWKHIDFWWKDW+DPOLQGLG &KDUYDWY(2KLR5HJjO:DVWHZDWHU$XWK)G QRWLQWHUYLHZWKHPEHIRUHKHDUUHVWHGWKHP$IWHUEDODQFLQJ  WK&LU )LUVWZHPXVWLQTXLUHZKHWKHUWKHIDFWV WKHVHDUJXPHQWVZHFRQFOXGHWKDWSUREDEOHFDXVHWRDUUHVW DOOHJHGZKHQYLHZHGLQWKHOLJKWPRVWIDYRUDEOHWRWKHSDUW\ &URFNHWWDQG*UHHQHH[LVWHG DVVHUWLQJWKHLQMXU\VKRZWKDWWKHSXEOLFRIILFLDOjVFRQGXFW YLRODWHG D FRQVWLWXWLRQDO ULJKW  6DXFLHU  86 DW  3UREDEOH&DXVH5HTXLUHPHQW 6HFRQGLIWKHGHQLDORIDFRQVWLWXWLRQDOULJKWLVGHPRQVWUDWHG ZHPXVWDVVHVVZKHWKHUWKDWULJKWZDVFOHDUO\HVWDEOLVKHGDW 7KH )RXUWK $PHQGPHQW VWDWHV LQ SHUWLQHQW SDUW WKDW mQR WKH WLPH RI WKH DOOHJHG YLRODWLRQ  ,G  7KH VHFRQG LQTXLU\ :DUUDQWVVKDOOLVVXHEXWXSRQSUREDEOHFDXVHVXSSRUWHGE\ UHTXLUHV D GHWHUPLQDWLRQ WKDW WKH ULJKW ZDV VR FOHDUO\ 2DWKRUDIILUPDWLRQDQGSDUWLFXODUO\GHVFULELQJWKHSODFHWR HVWDEOLVKHGWKDWDUHDVRQDEOHRIILFLDOZRXOGXQGHUVWDQGWKDW EHVHDUFKHGDQGWKHSHUVRQVRUWKLQJVWREHVHL]HGl86 WKHSDUWLFXODUFRQGXFWDWLVVXHYLRODWHGWKDWULJKW$QGHUVRQ &2167 DPHQG ,9  7RGD\ LW LV ZHOO HVWDEOLVKHG WKDW DQ\ Y&UHLJKWRQ86    DUUHVWZLWKRXWSUREDEOHFDXVHYLRODWHVWKH)RXUWK$PHQGPHQW 6HH.OHLQ)GDW *DUGHQKLUHY6FKXEHUW)G  WK&LU $KOHUVY6FKHELO)G WK&LU VHHDOVR%DNHUY0F&ROODQ86     m%\ YLUWXH RI LWV µLQFRUSRUDWLRQj LQWR WKH