5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 3XUVXDQW WR 6L[WK &LUFXLW 5XOH   8QLWHG6WDWHVHWDOY 1R (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU &LW\RI'HWURLWHWDO )LOH 1DPH DS

BBBBBBBBBBBBBBBBB 81,7('67$7(6&28572)$33($/6 &2816(/ )257+(6,;7+&,5&8,7 $5*8('   7RGG 6 $DJDDUG 81,7(' 67$7(6 BBBBBBBBBBBBBBBBB '(3$570(172)s867,&((19,5210(17',9,6,21 $33(//$7(6(&7,21:DVKLQJWRQ'&IRU$SSHOODQW sRVHSK & %DVWD '<.(0$ *266(77 $QQ $UERU 81,7(' 67$7(6 2) $0(5,&$ ; 0LFKLJDQ sRKQ )RUGHOO /HRQH 2)),&( 2) 7+( HWDO  $77251(< *(1(5$/ 1$785$/ 5(6285&(6 3ODLQWLIIV  ',9,6,21/DQVLQJ0LFKLJDQIRU$SSHOOHHV21%5,()  1R 7RGG 6 $DJDDUG 81,7(' 67$7(6 '(3$570(17 2)  s867,&( (19,5210(17 ',9,6,21 $33(//$7( 81,7(' 67$7(6 $50< &2536 ! 6(&7,21 :DVKLQJWRQ '& IRU $SSHOODQW  sRVHSK &  2) (1*,1((56  %DVWD'<.(0$*266(77$QQ$UERU0LFKLJDQsLOO0 0RYDQW$SSHOODQW  :KHDWRQ0DUN'sDFREV'<.(0$*266(77'HWURLW  0LFKLJDQ 5 &UDLJ +XSS %2'0$1 /21*/(< Y  '$+/,1*'HWURLW0LFKLJDQIRU$SSHOOHHV   .(,7+ s GHOLYHUHG WKH RSLQLRQ RI WKH FRXUW LQ ZKLFK &,7< 2) '(752,7HWDO  0$57,1 & s '$8*+75(< &2/( &/$< DQG 'HIHQGDQWV$SSHOOHHV  *,/0$1ssMRLQHG0225(s SS MRLQHGLQs 1 .(,7+jV RSLQLRQ DV WR 3DUWV , ,, DQG ,,,$ DQG DOVR GHOLYHUHGDVHSDUDWHRSLQLRQFRQFXUULQJLQSDUWDQGFRQFXUULQJ $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW LQ WKH MXGJPHQW  1255,6 s SS   GHOLYHUHG D IRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQDW'HWURLW VHSDUDWHRSLQLRQFRQFXUULQJLQSDUWDQGGLVVHQWLQJLQSDUWLQ 1RnsRKQ)HLNHQV'LVWULFWsXGJH ZKLFK%2**6%$7&+(/'(5*,%%216DQG52*(56 ssMRLQHG $UJXHG 'HFHPEHU BBBBBBBBBBBBBBBBB 'HFLGHGDQG)LOHG 0D\ 23,1,21 %HIRUH 0$57,1&KLHI&LUFXLWsXGJH .(,7+%2**6 BBBBBBBBBBBBBBBBB 1255,6%$7&+(/'(5'$8*+75(<0225( &2/(&/$<*,/0$1*,%%216DQG52*(56 '$021s.(,7+&LUFXLWsXGJH,QWKLVFDVHWKHGLVWULFW &LUFXLWsXGJHV FRXUW LVVXHG DQ RUGHU XQGHU WKH $OO :ULWV $FW  86& †  D  GLUHFWLQJ WKH 8QLWHG 6WDWHV $UP\ &RUSV RI (QJLQHHUV m&RUSVl WRDFFHSWGUHGJHGZDVWHPDWHULDOLQRUGHU WRSUHYHQWWKHIUXVWUDWLRQRIDFRQVHQWMXGJPHQWGHVLJQHGWR DGGUHVVZDWHUSROOXWLRQSUREOHPVLQWKHJUHDWHU'HWURLWDUHD

 1R 8QLWHG6WDWHVHWDOY   8QLWHG6WDWHVHWDOY 1R &LW\RI'HWURLWHWDO &LW\RI'HWURLWHWDO

)RUUHDVRQVVHWIRUWKEHORZZHKROGWKDWWKH$OO:ULWV$FW FRPSOLDQFH  7KH VHFRQG DPHQGHG FRQVHQW MXGJPHQW SURYLGHVGLVWULFWFRXUWVZLWKWKHDXWKRULW\WRELQGQRQSDUWLHV UHTXLUHG'HWURLWWRGUHGJHDQGGLVSRVHRIFXELF\DUGV LQ RUGHU WR SUHYHQW WKH IUXVWUDWLRQ RI FRQVHQW GHFUHHV WKDW RIVHGLPHQWIURP&RQQHU&UHHNDFKDQQHOFRQQHFWHGWRWKH GHWHUPLQHSDUWLHVjREOLJDWLRQVXQGHUWKHODZ+RZHYHUZH 'HWURLW5LYHU'LVFKDUJHVIURP'HWURLWjVVHZDJHWUHDWPHQW ILQG WKDW UHPDQG LV QHFHVVDU\ LQ WKLV FDVH EHFDXVH RI WKH SODQWKDGFRQWDPLQDWHGWKHFUHHN8QGHUWKHDJUHHPHQWWKLV GLVWULFWFRXUWjVIDLOXUHWRFRQVLGHUWKHIROORZLQJWZRLVVXHV GUHGJLQJ ZDV WR EH FRPSOHWHG mDV VRRQ DV SRVVLEOHl DQG   ZKHWKHU 'HWURLW FRXOG KDYH EURXJKW VXLW XQGHU WKH GHILQLWHO\ EHIRUH WKH FRPSOHWLRQ RI D FRPELQHG VHZHU $GPLQLVWUDWLYH3URFHGXUH$FW m$3$l DQGLIVRZKHWKHU RYHUIORZEDVLQWKDW'HWURLWZDVEXLOGLQJLQWKHYLFLQLW\7KH WKLVFDVHSUHVHQWVWKHW\SHRImH[FHSWLRQDOFLUFXPVWDQFHVlWKDW VHGLPHQWZDVWREHGLVSRVHGRImLQDFFRUGDQFHZLWKVWDWHDQG ZRXOGUHQGHUWKH$3$LQDGHTXDWH DQG  ZKHWKHUWKH&RUSVj IHGHUDO UHTXLUHPHQWVl  7KH 8QLWHG 6WDWHV (QYLURQPHQWDO GHWHUPLQDWLRQWKDWDQRWKHU(QYLURQPHQWDO$VVHVVPHQW m($l 3URWHFWLRQ $JHQF\ m(3$l  UHIXVHG WR SDUWLFLSDWH LQ WKH ZDVQHFHVVDU\ZDVmDUELWUDU\DQGFDSULFLRXVlXQGHU0DUVKY QHJRWLDWLRQRIWKHDJUHHPHQWH[SODLQLQJWKDWLWKDGQRWEHHQ 2UHJRQ 1DWXUDO 5HVRXUFHV &RXQFLO   86     SDUWRIWKHDGPLQLVWUDWLYHSURFHHGLQJV $FFRUGLQJO\ZH5(0$1'WKLVFDVHWRWKHGLVWULFWFRXUWIRU IXUWKHUFRQVLGHUDWLRQFRQVLVWHQWZLWKWKLVRSLQLRQ 'HWURLWSODQQHGWRGUHGJH&RQQHU&UHHNEHIRUHWKHSURMHFW ZDVDGGHGDVDUHTXLUHPHQWLQWKHFRQVHQWMXGJPHQW,Q  ,%$&.*5281'$1')$&78$/6800$5< 'HWURLWDVNHGWKH&RUSVLILWFRXOGGLVSRVHRIWKHVHGLPHQWDW WKH&RQILQHG'LVSRVDO)DFLOLW\ m&')l DW3RLQWH0RXLOOHH ,Q WKH8QLWHG6WDWHVEURXJKWVXLWDJDLQVWWKH&LW\RI ZKLFKLVDZHWODQGVDUHDRQWKHZHVWHUQVKRUHRI/DNH(ULH 'HWURLW m'HWURLWl WKH'HWURLW:DWHUDQG6HZDJH'HSDUWPHQW 3RLQWH0RXLOOHHRSHUDWHGE\WKH&RUSVRQERWWRPODQGRZQHG m':6'l DQGWKH6WDWHRI0LFKLJDQ mWKH6WDWHl DOOHJLQJ E\0LFKLJDQLQFOXGHVDVWDWHJDPHDUHDDQGDPLOHGLNH WKDWWKH'HWURLWZDVWHZDWHUWUHDWPHQWV\VWHPZDVRSHUDWLQJLQ EXLOWWRFRQWDLQGUHGJHGPDWHULDOIURPWKH'HWURLWDQG5RXJH YLRODWLRQRIWKH&OHDQ:DWHU$FW86&†† 5LYHUV7KH&')ZKLFKKDVDFDSDFLW\RIFXELF DQG LWV 1DWLRQDO 3ROOXWDQW 'LVFKDUJH (OLPLQDWLRQ 6\VWHP \DUGVZDVFRQVWUXFWHGLQ XQGHUWKHDXWKRULW\RIDVWDWXWH m13'(6l SHUPLW7KDW\HDUWKHSDUWLHVVLJQHGDFRQVHQW RQVRLOGLVSRVDOIDFLOLWLHV86&† D MXGJPHQWVHWWLQJDVFKHGXOHWREULQJWKHWUHDWPHQWSODQWLQWR FRPSOLDQFH  'HWURLWjV IDLOXUH WR FRPSO\ OHG WR D SDUW\ 7KH&RUSVUHIXVHGWRDFFHSWWKH&RQQHU&UHHNVHGLPHQW QHJRWLDWHGDPHQGHGFRQVHQWMXGJPHQWLQ WKDWFRQWDLQHG FLWLQJWKHHOHYDWHGFRQFHQWUDWLRQVRIOHDGDQGFDGPLXPLQWKH DUHYLVHGFRPSOLDQFHVFKHGXOH PDWHULDO'HWURLWQH[WH[SORUHGWKHLGHDRIGHZDWHULQJWKH GUHGJHG VHGLPHQW DW WKH HGJH RI WKH FUHHN DQG WKHQ 7KH6WDWHUHYLVHGWKH13'(6SHUPLWLQs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

ZRXOG EH FRYHUHG ZLWK FOHDQ PDWHULDO WR SUHYHQW VWDWHG WKDW LI LW FRPSOHWHG WKH EDVLQ SURMHFW ZLWKRXW VWDWH FRQWDPLQDWLRQ RI WKH HQYLURQPHQW  7KH &RUSV H[SUHVVHG IXQGLQJWKHUHZRXOGEHDQDGGLWLRQDOFRVWWRUDWHSD\HUVRI FRQFHUQRYHUWKHOHYHORIFRQWDPLQDQWVEXWDJUHHGWRZRUN  ZLWK'HWURLWDQGWKH6WDWHWRILQGDVROXWLRQ1HJRWLDWLRQV HQVXHG  7KH &RUSV UHTXHVWHG DQG UHFHLYHG WKH 6WDWHj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m>W@KH $&( >$UP\ &RUSV RI (QJLQHHUV@ DFFHSW GUHGJHG LQVLVWHG XSRQ DQ HQYLURQPHQWDO DVVHVVPHQW WR GHWHUPLQH PDWHULDOV IURP &RQQHU &UHHN IRU GLVSRVDO DW WKH 3RLQWH ZKHWKHU WKH GLVSRVDO ZRXOG FRPSO\ ZLWK WKH 1DWLRQDO 0RXLOOHH &RQILQHG 'LVSRVDO )DFLOLW\l  8QLWHG 6WDWHV Y (QYLURQPHQWDO 3ROLF\ $FW RI    m1(3$l   86& 0LFKLJDQ)6XSSG  ('0LFK 7KH †HWVHTUHTXLUHPHQWV7KH&RUSVDOVRGLUHFWHG'HWURLW GLVWULFWFRXUWFRQWLQXHGE\UHMHFWLQJWKH&RUSVjFRQGLWLRQVRQ WRREWDLQDGUHGJLQJSHUPLWDSHUPLWDOUHDG\UHTXLUHGE\WKH WKHDFFHSWDQFHRIWKHVHGLPHQW 5LYHUV DQG +DUERUV $SSURSULDWLRQ $FW RI    86& †   7KH 6WDWH UHVSRQGHG WR WKH &RUSVj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nWKHFRQVWUXFWLRQ UHTXLUHG OLDELOLW\ SURWHFWLRQ ODQJXDJH WR ZKLFK LW LV RIDWKLUW\PLOOLRQJDOORQVHWWOLQJEDVLQDW&RQQHU&UHHNWR HQWLWOHGXQGHU6HFWLRQRIWKH5LYHUDQG+DUERU$FW FRQWDLQ WKH FRPELQHG VHZHU RYHUIORZ m&62l  IURP RI    86& †  D DQG , 25'(5 WKDW QR LQGXVWULDODQGVDQLWDU\VHZDJHDQGVWRUPZDWHUUXQRII7KH IXUWKHU OLDELOLW\ SURWHFWLRQ ODQJXDJH IURP WKH 6WDWH RI EDVLQZDVUHTXLUHGE\'HWURLWjV13'(6SHUPLWIRULWVVHZDJH 0LFKLJDQLVUHTXLUHGRUDXWKRUL]HGE\ODZ WUHDWPHQWSODQ8QGHUWKHVWDWHLVVXHGSHUPLW'HWURLWZDVWR EHJLQFRQVWUXFWLRQRIWKHEDVLQE\sDQXDU\DQGWR 6LQFH,ILQGWKDWWKHSURSRVHGGLVSRVDODWWKH3RLQWH FRPSOHWHLWE\s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mQHZXVHl VHFXUHG D SODFH WR SXW LWV &RQQHU &UHHN VOXGJH  7KH FLW\ LVVXHUHODWHGWRWKH&RUSVjDVVHUWLRQWKDWWKH&')KDGEHHQ 1R 8QLWHG6WDWHVHWDOY   8QLWHG6WDWHVHWDOY 1R &LW\RI'HWURLWHWDO &LW\RI'HWURLWHWDO

XVHGSUHYLRXVO\IRUmQDYLJDWLRQDOGUHGJLQJlDQGWKH&RQQHU  WK&LU  $FRXUWDEXVHVLWVGLVFUHWLRQLQJUDQWLQJ &UHHN VOXGJH ZDV mHQYLURQPHQWDO GUHGJLQJl D QHZ XVH DQ LQMXQFWLRQ LI LW LQFRUUHFWO\ DSSOLHV WKH ODZ RU UHOLHV RQ SURPSWLQJ D QHHG IRU VXSSOHPHQWDO HQYLURQPHQWDO VWXGLHV FOHDUO\HUURQHRXVILQGLQJVRIIDFW6HH *ROGHQ)GDW 7KH GLVWULFW FRXUW GHQLHG WKH &RUSVj PRWLRQ IRU   7KXV LQ UHYLHZLQJ D ORZHU FRXUWjV JUDQW RI DQ UHFRQVLGHUDWLRQ  7KH &RUSV WLPHO\ DSSHDOHG WKH GLVWULFW LQMXQFWLRQ RXU &RXUW H[DPLQHV WKH GLVWULFW FRXUWjV FRXUWjV MXGJPHQW WR RXU &RXUW DVVHUWLQJ WKDW VRYHUHLJQ FRQFOXVLRQVRIODZGHQRYRDQGLWVILQGLQJVRIIDFWIRUFOHDU LPPXQLW\RQWKHSDUWRIWKH&RUSVEDUUHGWKHLQMXQFWLYHRUGHU HUURU6HHLG LVVXHGE\WKHGLVWULFWFRXUWDQGWKDWWKH$OO:ULWV$FWGLGQRW SHUPLWWKHLVVXDQFHRIDQRUGHUUHTXLULQJDWKLUGSDUW\WRWDNH ,,,$1$/<6,6 DFWLRQVQHFHVVDU\WRHIIHFWXDWHDVHWWOHPHQWWRZKLFKLWLVQRW DSDUW\ $6RYHUHLJQ,PPXQLW\'HIHQVH

2Q sDQXDU\   RXU &RXUW LVVXHG DQ XQSXEOLVKHG 7KH&RUSVFODLPVWKDWLWVVRYHUHLJQLPPXQLW\SUHFOXGHVWKLV RSLQLRQ LQ ZKLFK D GLYLGHG WKUHHMXGJH SDQHO YDFDWHG WKH DFWLRQ8QGHUWKHGRFWULQHRIVRYHUHLJQLPPXQLW\WKH8QLWHG GLVWULFW FRXUWjV RUGHU  7KH SDQHO PDMRULW\ IRXQG WKDW WKH 6WDWHVLVLPPXQHIURPVXLWXQOHVVLWFRQVHQWVWREHVXHG6HH ZDLYHU RI VRYHUHLJQ LPPXQLW\ DV FRGLILHG LQ WKH +HUFXOHV,QFY8QLWHG 6WDWHV86    $GPLQLVWUDWLYH 3URFHGXUH $FW m$3$l   86& †  7KHJRYHUQPHQWKDVZDLYHGLWVLPPXQLW\ZLWKUHVSHFWWRQRQ DSSOLHGWRWKLVFDVHEXWWKDWDFRQVHQWMXGJPHQWLVQRWDOHJDO PRQHWDU\ FODLPV  6HH $GPLQLVWUDWLYH 3URFHGXUH $FW REOLJDWLRQDXWKRUL]LQJWKHGLVWULFWFRXUWWRLVVXHRUGHUVXQGHU m$3$l 86&†7KH$3$SURYLGHVWKDW WKH $OO :ULWV $FW  86& †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† UHDG\IRUGHFLVLRQE\WKHIXOO&RXUW 7KH&RUSVFRQWHQGVWKDWVHFWLRQGRHVQRWVHUYHDVD ,,67$1'$5'2)5(9,(: JHQHUDOZDLYHURIVRYHUHLJQLPPXQLW\IRUVXLWVDJDLQVWWKH 8QLWHG6WDWHVVHHNLQJQRQPRQHWDU\UHOLHI5DWKHUWKH&RUSV :HUHYLHZDGLVWULFWFRXUWjVJUDQWRIDQLQMXQFWLRQIRUDQ EHOLHYHVWKHZDLYHUDSSOLHVRQO\WRFRPSODLQWVILOHGXQGHUWKH DEXVHRIGLVFUHWLRQ6HH,QUH'XEOLQ6HF,QF)G $3$,QWKLVFDVH'HWURLWDQG0LFKLJDQGLGQRWILOHDQ$3$ WK&LU  *ROGHQY.HOVH\+D\HV&R)G FRPSODLQWDQGWKHGLVWULFWFRXUWGLGQRWUHO\RQWKH$3$LQ LVVXLQJLWVRUGHU 1R 8QLWHG6WDWHVHWDOY  8QLWHG6WDWHVHWDOY 1R &LW\RI'HWURLWHWDO &LW\RI'HWURLWHWDO

:H UHMHFW WKH &RUSVj UHVWULFWLYH UHDGLQJ RI VHFWLRQ  % $SSOLFDELOLW\ RI WKH $3$ WR WKH &ODLPV 3UHVHQWHG E\ 7KLVFLUFXLWKDVDSSOLHGWKHZDLYHURIVRYHUHLJQLPPXQLW\LQ 'HWURLW VHFWLRQ  LQ FDVHV EURXJKW XQGHU VWDWXWHV RWKHU WKDQ WKH $3$6HH$()LQOH\ $VVRFV,QFY8QLWHG6WDWHV  :HWXUQQRZWRWKHTXHVWLRQRIZKHWKHUWKH$3$DSSOLHVWR )G   WK &LU    QRWLQJ LQ D FDVH DULVLQJ WKHIDFWVRIWKLVFDVH6SHFLILFDOO\ZHPXVWDVFHUWDLQZKHWKHU XQGHU WKH &RQWUDFW 'LVSXWHV $FW WKDW mWKH $GPLQLVWUDWLYH WKHGLVWULFWFRXUWVKRXOGKDYHSURSHUO\UHOLHGXSRQWKH$3$ 3URFHGXUH$FWVSHFLILFDOO\86&†ZDLYHVVRYHUHLJQ UDWKHUWKDQWKH $OO :ULWV$FWDVWKHEDVLVIRUDVVHUWLQJLWV LPPXQLW\XQGHU†l 1HZVRPY9DQGHUELOW8QLY MXULVGLFWLRQLQWKLVPDWWHU,QDUHODWHGTXHU\ZHDOVRILQGLW )G WK&LU   DSSO\LQJWKH$3$ZDLYHUWR DSSURSULDWH WR LQYHVWLJDWH ZKHWKHU 'HWURLW VKRXOG KDYH DFODLPEURXJKWXQGHUWKH+LOO%XUWRQ$FWRQIUHHKRVSLWDO XWLOL]HGWKH$3$DQGQRWWKH$OO:ULWV$FWDVWKHSURSHU FDUH )XUWKHUPRUHWKHRWKHUFLUFXLWVWKDWKDYHDGGUHVVHGWKH DYHQXHWRIHGHUDOFRXUW:LWKUHJDUGWRWKLVLVVXHWKHGLVVHQW LVVXHDJUHHWKDWmWKHZDLYHURIVRYHUHLJQLPPXQLW\FRQWDLQHG QRWHV WKDW m>Z@KHUH D VWDWXWH VSHFLILFDOO\ DGGUHVVHV WKH LQ †  LV QRW OLPLWHG WR VXLWV EURXJKW XQGHU WKH $3$l SDUWLFXODULVVXHDWKDQGLWLVWKDWDXWKRULW\DQGQRWWKH$OO 6SHFWHUY*DUUHWW )G G&LU  UHYjGRQ :ULWV$FWWKDWLVFRQWUROOLQJl6\QJHQWD&URS3URW,QFY RWKHUJURXQGV86   6HHDOVR8S6WDWH)HG +HQVRQo86o6&W    DOWHUDWLRQLQ &UHGLW8QLRQY:DONHU )G G&LU RULJLQDO  TXRWLQJ 3HQQV\OYDQLD %XUHDX RI &RUU Y 8QLWHG GHVFULELQJVHFWLRQDVDmJHQHUDOZDLYHUlEXWQRWLQJWKDW 6WDWHV0DUVKDOV6HUY86   7KHGLVVHQW UHOLHILVIRUELGGHQLIDQRWKHUVWDWXWHIRUELGVLW %ODFN+LOOV FRQWHQGVWKDWEHFDXVH'HWURLWFRXOGKDYHEURXJKWVXLWDJDLQVW ,QVWRI*HRORJLFDO5HVHDUFKY6RXWK'DNRWD6FKRI0LQHV WKH&RUSVSXUVXDQWWRWKH$3$LWFRXOGQRWLQVWHDGUHVRUWWR 7HFK)G WK&LU   m6HFWLRQZDLYHV WKH$OO:ULWV$FWDVDPHDQVWRVHFXUHDUHPHG\+RZHYHU WKH IHGHUDO JRYHUQPHQWjV VRYHUHLJQ LPPXQLW\ LQ FDVHV WKHSUHFLVHPHWKRGE\ZKLFK'HWURLWVKRXOGKDYHHPSOR\HG FKDOOHQJLQJDJHQF\DFWLRQDQGVHHNLQJUHOLHIRWKHUWKDQ WKH $3$ LQ WKLV FDVH LV QRW HOXFLGDWHG E\ WKH GLVVHQWjV PRQH\GDPDJHVl 3DQROD /DQG%X\HUV$VVjQY6KXPDQ FRPPHQWDU\ RQ WKLV VXEMHFW  ,QWHUHVWLQJO\ HQRXJK 'HWURLW  )G   WK &LU    m7KH GHIHQVH RI DSSHDUV WR KDYH FRQFHGHG WKH DSSOLFDELOLW\ RI WKH $3$ E\ VRYHUHLJQ LPPXQLW\ LV ZDLYHG LQ DFWLRQV DJDLQVW IHGHUDO VWDWLQJWKDWm>V@XFKFODLPVIDOOIRXUVTXDUHZLWKLQERWKVHFWLRQV JRYHUQPHQW DJHQFLHV VHHNLQJ QRQPRQHWDU\ UHOLHI LI WKH DQGRIWKH$3$l $SSHOOHHjV6XSS%UDW  DJHQF\FRQGXFWLVLWVHOIVXEMHFWWRMXGLFLDOUHYLHZl VHHDOVR 7XFVRQ$LUSRUW$XWKY*HQ'\QDPLFV&RUS)G :HILQGWKHGLVVHQWjVDUJXPHQWRQWKLVLVVXHWREHRYHUO\  WK&LU   DGGLQJDQDGGLWLRQDOUHTXLUHPHQWWKDW EURDG,PPHGLDWHO\DIWHUDQQRXQFLQJWKHUXOHTXRWHGDERYH WKHUH EH mQR RWKHU DGHTXDWH UHPHG\ LQ D FRXUWl EHIRUH WKH 6XSUHPH &RXUW FDXWLRQHG WKDW LW GLG QRW QHHG WR VRYHUHLJQLPPXQLW\LVZDLYHG  mFDWHJRULFDOO\UXOHRXWUHOLDQFHRQWKH$OO:ULWV$FWlXQGHU VXFK FLUFXPVWDQFHV DV ZH ILQG LQ WKH LQVWDQW FDVH 8QLWHG %HFDXVH WKH PRWLRQ LQ WKH LQVWDQW FDVH GLG QRW VHHN 6WDWHV0DUVKDOV86DW,QSRLQWRIIDFWWKH6XSUHPH PRQHWDU\ GDPDJHV WKH ZDLYHU RI VRYHUHLJQ LPPXQLW\ LQ &RXUWSURFHHGHGWRHODERUDWHRQWKHVXEMHFWE\FOHDUO\VWDWLQJ VHFWLRQDSSOLHV WKDW m>W@KHUH PD\ EH H[FHSWLRQDO FLUFXPVWDQFHV LQ ZKLFK D GLVWULFWFRXUWFDQVKRZFOHDUO\WKHLQDGHTXDF\lRIWKHVWDWXWH WKDWVSHFLILFDOO\DGGUHVVHVWKHSDUWLFXODULVVXHDWKDQG,G 7KH6XSUHPH&RXUWLQ8QLWHG6WDWHV0DUVKDOVFRQFOXGHGLWV GLVFXVVLRQRIWKLVLVVXHE\VWDWLQJWKDWm>Z@HWKHUHIRUHOHDYH 1R 8QLWHG6WDWHVHWDOY   8QLWHG6WDWHVHWDOY 1R &LW\RI'HWURLWHWDO &LW\RI'HWURLWHWDO

RSHQWKHTXHVWLRQRIWKHDYDLODELOLW\RIWKH$OO:ULWV$FWWR IUXVWUDWLRQRIRUGHUVLWKDVSUHYLRXVO\LVVXHGLQH[HUFLVHRI DXWKRUL]H VXFK DQ RUGHU ZKHUH H[FHSWLRQDO FLUFXPVWDQFHV MXULVGLFWLRQRWKHUZLVHREWDLQHGl8QLWHG6WDWHVY1HZ<RUN UHTXLUHLWl,G 7HO&R86    8QLWHG6WDWHV0DUVKDOV 86 %DVHGRQWKHDERYHZHILQGWKDWUHPDQGRQWKLVLVVXHRI SRWHQWLDO $3$ DSSOLFDELOLW\ LV WKH SURSHU FRXUVH RI DFWLRQ 7KH $OO :ULWV $FW SHUPLWV FRXUWV WR LVVXH RUGHUV WR :HFRQVLGHULWQHFHVVDU\XQGHUWKHFLUFXPVWDQFHVIRUWKH QRQSDUWLHVLQFHUWDLQVLWXDWLRQV6HH1HZ<RUN7HO86 GLVWULFWFRXUWWRXQGHUWDNHDQDQDO\VLVDVWRZKHWKHU'HWURLW DW  m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l mH[FHSWLRQDO FLUFXPVWDQFHVl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mH[FHSWLRQDO FLUFXPVWDQFHVl H[LVW LV SUHFLVHO\ WKH W\SH RI REOLJDWLRQVSXUVXDQWWRFRQWUDFWVHH/RFDO1R ,QWjO$VVjQ KLJKO\ IDFWERXQG GHWHUPLQDWLRQ WKDW WKH GLVWULFW FRXUW LV RI)LUHILJKWHUVY&LW\RI&OHYHODQG86    PHDQWWRGHFLGH UHIHUULQJWRFRQVHQWMXGJPHQWVDVDmK\EULGlRIMXGJPHQWV DQG FRQWUDFWV  RQO\ FRQVHQW MXGJPHQWV WKDW LPSRVH &7KH'LVWULFW&RXUWjV$XWKRULW\8QGHUWKH$OO:ULWV$FW REOLJDWLRQV SXUVXDQW WR ODZ FDQ VHUYH DV WKH EDVLV IRU DQ LQMXQFWLYHRUGHUWRDQRQSDUW\XQGHUWKH$OO:ULWV$FW $QRWKHU HVVHQWLDO LVVXH EHIRUH XV UHYROYHV DURXQG WKH GLVWULFWFRXUWjVLVVXDQFHRIDQLQMXQFWLYHRUGHUFRPSHOOLQJWKH ,QWKLVFDVHWKHGLVWULFWFRXUWLVVXHGWKHLQMXQFWLYHRUGHU &RUSV WR DFFHSW WKH GUHGJHG &RQQHU &UHHN PDWHULDOV IRU ZLWK WKH VSHFLILF LQWHQW RI SUHYHQWLQJ WKH &RUSV IURP GLVSRVDO$VWKHEDVLVIRULWVDXWKRULW\WRLVVXHWKHLQMXQFWLYH IUXVWUDWLQJ WKH REOLJDWLRQV SURYLGHG IRU E\ WKH 6HFRQG RUGHU WKH GLVWULFW FRXUW UHOLHG XSRQ  86& †  D  $PHQGHG&RQVHQWsXGJPHQWZKLFKZDVHQWHUHGRQ$XJXVW FRPPRQO\UHIHUUHGWRDVWKH$OO:ULWV$FW7KH$OO:ULWV$FW   7KH TXHVWLRQ LV ZKHWKHU WKLV FRQVHQW MXGJPHQW VWDWHVWKDW m>W@KH6XSUHPH&RXUWDQGDOOFRXUWVHVWDEOLVKHG LPSRVHGREOLJDWLRQVSXUVXDQWWRODZIRUSXUSRVHVRIWKH$OO E\ $FW RI &RQJUHVV PD\ LVVXH DOO ZULWV QHFHVVDU\ RU :ULWV$FW:HFRQFOXGHWKDWLWGLG DSSURSULDWH LQ DLG RI WKHLU UHVSHFWLYH MXULVGLFWLRQV DQG DJUHHDEOH WR WKH XVDJHV DQG SULQFLSOHV RI ODZl   86& $FRQVHQWMXGJPHQWLV †  D   )XUWKHU WKH 6XSUHPH &RXUW KDV FOHDUO\ DQQXQFLDWHGWKDWWKH$OO:ULWV$FWVSHFLILFDOO\DXWKRUL]HVD DFRQWUDFWEHWZHHQWKHSDUWLHVWRWKHDJUHHPHQWRSHUDWHV IHGHUDO FRXUW mWR LVVXH VXFK FRPPDQGV    DV PD\ EH DV DQ DGMXGLFDWLRQ EHWZHHQ WKHP DQG ZKHQ WKH FRXUW QHFHVVDU\ RU DSSURSULDWH WR HIIHFWXDWH DQG SUHYHQW WKH JLYHVWKHDJUHHPHQWLWVVDQFWLRQEHFRPHVDMXGJPHQWRI 1R 8QLWHG6WDWHVHWDOY   8QLWHG6WDWHVHWDOY 1R &LW\RI'HWURLWHWDO &LW\RI'HWURLWHWDO

WKHFRXUW7KHIDFWWKDWWKHMXGJPHQWLVE\FRQVHQWJLYHV 7KHQH[WLVVXHZHDUHSUHVHQWHGZLWKSHUWDLQVWRZKHWKHU LW QHLWKHU JUHDWHU QRU OHVV IRUFH WKDQ LI UHQGHUHG DIWHU WKHGLVWULFWFRXUWDEXVHGLWVGLVFUHWLRQLQRUGHULQJWKH&RUSVWR SURWUDFWHGOLWLJDWLRQ,WKDVWKHVDPHZHLJKWDQGHIIHFWDV DFFHSWWKHGUHGJHGVHGLPHQWIURP&RQQHU&UHHN$VVWDWHG DQ\ RWKHU MXGJPHQW DQG XQOHVV YDFDWHG RU VHW DVLGH SUHYLRXVO\ZHUHYLHZDGLVWULFWFRXUWjVJUDQWRIDQLQMXQFWLRQ VWDQGVDVDILQDOGHWHUPLQDWLRQRIWKHULJKWVRIWKHSDUWLHV IRUDQDEXVHRIGLVFUHWLRQ6HH,QUH'XEOLQ6HF,QF )G *ROGHQ)GDW %/$&.j6 /$: ',&7,21$5<  WK HG    TXRWLQJ 7UDYHOHUjV,QV&RY8QLWHG6WDWHV)6XSS 6' 7KH&RUSVFRQWHQGHGWKDWWKHGLVWULFWFRXUWHUUHGEHFDXVH 7H[    LQWHUQDO FLWDWLRQV RPLWWHG   7KH IRUFH RI D  WKH&RUSVKDVQRWIUXVWUDWHGWKHFRQVHQWMXGJPHQW   WKH FRQVHQWMXGJPHQWLVZHOOVHWWOHGZLWKLQRXUMXGLFLDOV\VWHP &RUSVLVQRWSDUWRIWKHXQGHUO\LQJFRQWURYHUV\   WKHGLVWULFW 6HHHJ5XIRY,QPDWHVRI6XIIRON&RXQW\sDLO 86 FRXUWjVRUGHULPSRVHVDVXEVWDQWLDOEXUGHQRQWKH&RUSVDQG     VWDWLQJWKDWDOWKRXJKDFRQVHQWGHFUHHmLQ PD\ KDYH VLJQLILFDQW DGYHUVH LPSDFWV RQ WKH HQYLURQPHQW VRPHUHVSHFWVLVFRQWUDFWXDOLQQDWXUH>@LWLVDQDJUHHPHQW  'HWURLWIDLOHGWRVKRZWKHDEVHQFHRIIHDVLEOHDOWHUQDWLYHV WKDWWKHSDUWLHVGHVLUHDQGH[SHFWZLOOEHUHIOHFWHGLQDQGEH IRUWKHGLVSRVDORIWKHVHGLPHQW DQG  WKHGLVWULFWFRXUWjV HQIRUFHDEOHDVDMXGLFLDOGHFUHHWKDWLVVXEMHFWWRWKHUXOHV RUGHULVQRWmDJUHHDEOHWRWKHXVDJHVDQGSULQFLSOHVRIODZl JHQHUDOO\ DSSOLFDEOH WR RWKHU MXGJPHQWV DQG GHFUHHVl :LWK UHJDUG WR WKH ILUVW IRXU PDWWHUV ZH FRQFOXGH WKDW WKH 9DQJXDUGVRI&OHYHODQGY&LW\RI&OHYHODQG)G  GLVWULFWFRXUWjVGHWHUPLQDWLRQVZHUHZLWKLQWKHSXUYLHZRILWV  WK&LU   m$FRQVHQWGHFUHHDOWKRXJKIRXQGHGRQ GLVFUHWLRQ DQDJUHHPHQWRIWKHSDUWLHVLVDILQDOMXGJPHQWl  7KH &RUSV FRQWHQGHG WKDW LW ZDV QRW IUXVWUDWLQJ WKH +HUH DOO SDUWLHV DQG WKH GLVWULFW FRXUW DJUHH WKDW 'HWURLW sXGJPHQWRUDQ\RWKHURUGHUVRIWKHGLVWULFWFRXUW,WQRWHG YLRODWHG WKH &OHDQ :DWHU $FW  3UHVXPDEO\ WKH FRQVHQW WKDW LW KDG QRW GHQLHG 'HWURLW SHUPLVVLRQ WR GLVSRVH RI WKH MXGJPHQW ZDV DJUHHG XSRQ LQ SDUW WR VDYH WKH WLPH DQG VHGLPHQW DW WKH &') EXW UDWKHU ZDV LQ WKH SURFHVV RI H[SHQVH RI OLWLJDWLRQ UHTXLUHG WR mSURYHl WKLV XQFRQWHVWHG QHJRWLDWLQJ ZLWK WKH GHIHQGDQWV ZKHQ 0LFKLJDQ DQG WKH SRLQW7KHGLVWULFWFRXUWjVVDQFWLRQLQJRIWKHDJUHHPHQWZDV ':6'PRYHGIRUDQRUGHUFRPSHOOLQJWKH&RUSVWRDFFHSW FOHDUO\ PRUH WKDQ MXVW D mVWDPS RI DSSURYDOl  5DWKHU WKH WKHVHGLPHQW$VDUHVXOWWKH&RUSVDVVHUWHGWKDWWKHLUIDLOXUH FRQVHQWMXGJPHQWRSHUDWHGDVEURDGO\DVDUXOLQJDIWHUDIXOO WR DJUHH ZDV QRW VXIILFLHQW MXVWLILFDWLRQ WR WULJJHU WULDO7KHUHIRUHWKHFRQVHQWMXGJPHQWZDVDVXIILFLHQWEDVLV LPSOHPHQWDWLRQRIWKH$OO:ULWV$FW0RUHRYHUWKH&RUSV IRULQYRNLQJWKH$OO:ULWV$FW QRWHGWKDWWKHYDULRXVGHDGOLQHVLQHIIHFWFRXOGEHUHOD[HGE\ HLWKHU0LFKLJDQRUWKHGLVWULFWFRXUW 7KH$OO:ULWV$FWPDNHVQRGLVWLQFWLRQEHWZHHQFRQVHQW MXGJPHQWVDQGFRXUWRUGHUV5DWKHUWKHUHOHYDQWGLVWLQFWLRQ 7KH&RUSVjFRQWHQWLRQWKDW0LFKLJDQRUWKHGLVWULFWFRXUW LV EHWZHHQ ZULWV LVVXHG LQ DLG RI WKH FRXUWjV MXULVGLFWLRQ FRXOG H[WHQG WKH YDULRXV GHDGOLQHV ZDV XQUHDOLVWLF DQG SXUVXDQWWRDOHJDOREOLJDWLRQDQGZULWVLVVXHGLQDLGRIWKH GLVUHJDUGHGWKHGLVWULFWFRXUWjVILQGLQJVWKDWWLPHZDVRIWKH FRXUWjVMXULVGLFWLRQSXUVXDQWWRSULYDWHFRQWUDFW$JDLQWKH HVVHQFH  ,QGHHG QRWKLQJ LQ 1HZ <RUN 7HOHSKRQH UHTXLUHV ZULWLVVXHGLQWKLVFDVHIDOOVLQWRWKHIRUPHUFDWHJRU\)RU SDUWLHVVHHNLQJDZULWWRVHHNWKHH[WHQVLRQVWKDWWKH&RUSV WKHVHUHDVRQVZHILQGWKDWWKHGLVWULFWFRXUWKDGWKHDXWKRULW\ VXJJHVWHG  ,Q LVVXLQJ WKH ZULW WKH GLVWULFW FRXUWjV PDLQ XQGHUWKH$OO:ULWV$FWWRLVVXHWKHLQMXQFWLYHRUGHU FRQFHUQZDVWKDW'HWURLWQHHGHGWRKDYHDQDPHGGLVSRVDOVLWH IRU WKH &RQQHU &UHHN GUHGJHG PDWHULDOV ILQDOL]HG E\ 1R 8QLWHG6WDWHVHWDOY   8QLWHG6WDWHVHWDOY 1R &LW\RI'HWURLWHWDO &LW\RI'HWURLWHWDO

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mVXEVWDQWLDO LQWHUHVWl LQ SURYLGLQJ DVVLVWDQFH  DQG   WKH FRPSDQ\ ,Q1HZ<RUN7HOHSKRQHWKH6XSUHPH&RXUWFRQVLGHUHGIRXU UHJXODUO\LQVWDOOHGSHQUHJLVWHUVLQLWVRZQFRXUVHRIGHDOLQJV PDMRU IDFWRUV IRU GHWHUPLQLQJ ZKHWKHU D ZULW LVVXHG WR D ,G6LPLODUO\KHUHWKH&RUSVZDVLQDSRVLWLRQWRDVVLVWDQG QRQSDUW\ XQGHU WKH $OO :ULWV $FW ZDV ZLWKLQ WKH GLVWULFW LWKDGDVXEVWDQWLDOLQWHUHVWLQHQVXULQJWKDWWKHHQYLURQPHQWDO FRXUWjVGLVFUHWLRQ7KHUHWKHGLVWULFWFRXUWLVVXHGDQRUGHU SUREOHPVFUHDWHGE\WKHVHZDJHUXQRIIZHUHGHDOWZLWKLQD DXWKRUL]LQJWKH)%,WRXVHSHQUHJLVWHUVRQWZRSKRQHOLQHV WLPHO\PDQQHU0RUHRYHUWKH&')jVVROHSXUSRVHZDVWR RSHUDWHG E\ WKH 1HZ <RUN 7HOHSKRQH &RPSDQ\  6HH  DFFHSWGUHGJHGPDWHULDOVIURPORFDOULYHUV$FFRUGLQJO\WKH 86DW$IWHUWKH1HZ<RUN7HOHSKRQH&RPSDQ\UHIXVHG &RUSV ZDV QRW mVR IDU UHPRYHG IURP WKH XQGHUO\LQJ WRDVVLVWWKH)%,WKHGLVWULFWFRXUWGLUHFWHGWKHFRPSDQ\WR FRQWURYHUV\ WKDW LWV DVVLVWDQFH FRXOG QRW EH SHUPLVVLEO\ SURYLGHDOOLQIRUPDWLRQDVVLVWDQFHDQGIDFLOLWLHVQHFHVVDU\IRU FRPSHOOHGl QRU GLG LW SRVVHVV D VXEVWDQWLDO LQWHUHVW LQ WKH)%,WRLQVWDOODQGXVHSHQUHJLVWHUVSXUVXDQWWRWKH$OO QRQFRPSOLDQFHZLWKWKHZULW,G :ULWV$FW6HHLG,QFRQFOXGLQJWKDWWKHGLVWULFWFRXUWKDG DXWKRULW\WRLVVXHDQRUGHUDJDLQVWWKH1HZ<RUN7HOHSKRQH $OWKRXJK WKH &RUSV VXJJHVWHG WKDW XQGHU 1HZ <RUN &RPSDQ\ WKH &RXUW ILUVW H[DPLQHG WKH QRQSDUW\jV 7HOHSKRQHLWPXVWEHDFWLYHO\IDFLOLWDWLQJFULPLQDODFWLYLW\WR UHODWLRQVKLSWRWKHFRQWURYHUV\6HHLG FRQFOXGLQJWKDWWKH EHVXEMHFWWRDQRUGHUXQGHUWKH$OO:ULWV$FWWKLVDVVHUWLRQ SKRQHFRPSDQ\ZDVQRWmDWKLUGSDUW\VRIDUUHPRYHGIURP ODFNV PHULW  ,Q 1HZ <RUN 7HOHSKRQH WKH &RXUW GLG QRW WKH XQGHUO\LQJ FRQWURYHUV\ WKDW LWV DVVLVWDQFH FRXOG QRW EH VXJJHVWWKDWFULPLQDOFRQGXFWLVUHTXLUHGEHIRUHDQRQSDUW\ SHUPLVVLEO\FRPSHOOHGl 6HFRQGWKH&RXUWFRQVLGHUHGWKH FDQEHVXEMHFWWRDQRUGHUXQGHUWKH$OO:ULWV$FW,QVWHDG EXUGHQWKDWFRRSHUDWLRQZRXOGLPSRVHRQWKHQRQSDUW\6HH WKH &RXUW UHTXLUHG RQO\ WKDW WKH &RPSDQ\ QRW EH mVR IDU LG7KLUGWKHFRXUWH[DPLQHGWKHQRQSDUW\jVLQWHUHVWLQQRW UHPRYHGIURPWKHXQGHUO\LQJFRQWURYHUV\WKDWLWVDVVLVWDQFH SURYLGLQJDVVLVWDQFHERWKIURPDQLGHRORJLFDODQGILQDQFLDO FRXOG QRW EH SHUPLVVLEO\ FRPSHOOHGl   86 DW  SHUVSHFWLYH6HHLGDW FRQFOXGLQJWKDWEHFDXVHWKH &RQVHTXHQWO\ WKH IDFW WKDW WKH &RUSV ZDV QRW IDFLOLWDWLQJ WHOHSKRQH FRPSDQ\ KDG XVHG SHQ UHJLVWHUV LQ WKH SDVW DQG FULPLQDO DFWLYLW\ GRHV QRW SUHFOXGH WKH &RUSV IURP EHLQJ EHFDXVH WKH )%, ZRXOG FRPSHQVDWH WKH FRPSDQ\ IRU LWV VXEMHFWWRDZULWXQGHUWKH$OO:ULWV$FW DVVLVWDQFH WKH FRPSDQ\ KDG QR LQWHUHVW LQ QRW DVVLVWLQJ  /DVWO\WKH&RXUWORRNHGDWWKHLPSRUWDQFHRIWKHQRQSDUW\jV :LWK UHVSHFW WR WKH VHFRQG IDFWRU ZH FRQFOXGH WKDW DVVLVWDQFHWRIXOILOOLQJWKHJRDOVRIWKHRUGHU6HHLGDW FRPSOLDQFH ZLWK WKH ZULW ZRXOG QRW LPSRVH D VXEVWDQWLDO EXUGHQ XSRQ WKH &RUSV 7KH &RUSV DUJXHG WKDW WKH FRXUWjV :LWKUHVSHFWWRWKHILUVWDQGWKLUGIDFWRUVRXWOLQHGLQ1HZ RUGHULPSRVHGDVXEVWDQWLDOEXUGHQDQGPD\KDYHVLJQLILFDQW <RUN7HOHSKRQHZHFRQFOXGHWKDWWKH&RUSVZDVQRWmVRIDU DGYHUVHLPSDFWVRQWKHHQYLURQPHQW7KH&RUSVDOVRVWDWHG UHPRYHGIURPWKHFRQWURYHUV\WKDWLWVDVVLVWDQFHFRXOGQRWEH WKDW WKH VHGLPHQW IURP &RQQHU &UHHN KDG HOHYDWHG SHUPLVVLEO\FRPSHOOHGlDQGWKDWWKH&RUSVGLGQRWKDYHD FRQWDPLQDQW OHYHOV DQG WKDW VSHFLDO SURFHGXUHV ZRXOG EH 1R 8QLWHG6WDWHVHWDOY   8QLWHG6WDWHVHWDOY 1R &LW\RI'HWURLWHWDO &LW\RI'HWURLWHWDO

QHFHVVDU\ WR GLVSRVH RI LW SURSHUO\  )XUWKHU WKH &RUSV LQFRQVLVWHQF\RILWVRUGHUDQGWKHODZJRYHUQLQJWKH&RUSVj VXJJHVWHG WKDW WKH VHGLPHQW FRXOG DGYHUVHO\ LPSDFW WKH RSHUDWLRQRIWKH&')7KH&RUSVDUJXHGWKDWm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l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j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m(,6l RUDVXSSOHPHQWDO(,6 m6(,6l  VXEPLWWHG HYLGHQFH GHPRQVWUDWLQJ WKDW LW KDG FRQVLGHUHG RQO\ ZKHQ LW LV SURSRVLQJ WR WDNH mPDMRU IHGHUDO DFWLRQ VHYHUDO DOWHUQDWLYHV  7KH &RUSV QHYHU VXJJHVWHG DQ\ VLJQLILFDQWO\DIIHFWLQJWKHTXDOLW\RIWKHKXPDQHQYLURQPHQWl DOWHUQDWLYHV7KHUHIRUHZHILQGWKDWWKHGLVWULFWFRXUWZDV  86& †    F   &LWLQJ 7RZQVKLS RI 5LGOH\ Y DOVR ZLWKLQ LWV GLVFUHWLRQ WR GHWHUPLQH WKDW 'HWURLW KDG %ODQFKHWWH)6XSS ('3D  'HWURLW H[KDXVWHGDOOIHDVLEOHDOWHUQDWLYHV DUJXHVWKDWWKHSURSRVHGGHSRVLWRIVHGLPHQWDWWKH&')LVQRW D mPDMRU IHGHUDO DFWLRQl UHTXLULQJ DQ (,6 RU 6(,6  7KH ' :KHWKHU WKH :ULW ZDV $JUHHDEOH WR WKH 8VDJHV DQG GHSRVLWRIWKHGUHGJHGPDWHULDODFFRUGLQJWR'HWURLWZRXOG 3ULQFLSOHVRI/DZ VLPSO\EHDQRQJRLQJXVHRIWKH&')6HHHJ8SSHU6QDNH 5LYHUY+RGHO )G WK&LU   KROGLQJWKDWWKH  )LQDOO\WKH&RUSVFODLPHGWKDWWKHGLVWULFWFRXUWjVRUGHUZDV FRQWLQXHGRSHUDWLRQRISURMHFWVIRUZKLFKDQRULJLQDO(,6ZDV QRWmDJUHHDEOHWRWKHXVDJHVDQGSULQFLSOHVRIODZlDVUHTXLUHG FRQGXFWHG GLG QRW FRQVWLWXWH D mPDMRU IHGHUDO DFWLRQl RU E\ WKH $OO :ULWV $FW   86& †  D   7KH &RUSV RWKHUZLVHUHTXLUHDQ6(,6  FRQWHQGHG WKDW WKH GLVWULFW FRXUW IDLOHG WR FRQIURQW WKH 1R 8QLWHG6WDWHVHWDOY   8QLWHG6WDWHVHWDOY 1R &LW\RI'HWURLWHWDO &LW\RI'HWURLWHWDO

7KH&RUSVKRZHYHUKDVWDNHQWKHSRVLWLRQWKDWVRPHVRUW BBBBBBBBBBBBBBBBBB RI HQYLURQPHQWDO VWXG\ LV UHTXLUHG E\ 1(3$  $ FRXUW UHYLHZLQJ WKH &RUSVj GHWHUPLQDWLRQ PXVW GR VR XQGHU WKH &21&855(1&( mDUELWUDU\DQGFDSULFLRXVlVWDQGDUG0DUVKY2UHJRQ1DWXUDO BBBBBBBBBBBBBBBBBB 5HV &RXQFLO   86       ,Q 0DUVK WKH 6XSUHPH&RXUWUHYLHZHGDGHFLVLRQE\WKH&RUSVWRSURFHHG .$5(11(/6210225(&LUFXLWsXGJHFRQFXUULQJLQ ZLWKDGDPFRQVWUXFWLRQSURMHFWZLWKRXWSUHSDULQJDVHFRQG SDUW DQG FRQFXUULQJ LQ WKH MXGJPHQW  , ZULWH VHSDUDWHO\ VXSSOHPHQWDO (,6 WR FRQVLGHU LQIRUPDWLRQ WKDW ZDV QRW EHFDXVHDOWKRXJK,DJUHHZLWKsXGJH.HLWKjVDQDO\VLVRIWKH DYDLODEOHDWWKHWLPHRIDSUHYLRXV(,6 86DW7KH $OO:ULWV$FWDQG,DJUHHWKDWWKLVFDVHVKRXOGEHUHPDQGHG 6XSUHPH &RXUW VWDWHG WKDW EHFDXVH DQ DJHQF\jV GHFLVLRQ , WKLQN WKDW WKH VFRSH RI WKH UHPDQG LV EURDGHU WKDQ ZKHWKHUWRSHUIRUPDGGLWLRQDOHQYLURQPHQWDODQDO\VLVUHTXLUHV QHFHVVDU\6SHFLILFDOO\EHFDXVH1(3$DQDO\VLVZDVSODLQO\ mVXEVWDQWLDO DJHQF\ H[SHUWLVHl FRXUWV PXVW GHIHU WR WKH UHTXLUHG,GRQRWWKLQNLWLVQHFHVVDU\IRUWKHGLVWULFWFRXUWWR DJHQF\jVmLQIRUPHGGLVFUHWLRQl,GDW GHWHUPLQHZKHWKHUWKH&RUSVjVLQVLVWHQFHRQD1(3$DQDO\VLV ZDVDUELWUDU\RUFDSULFLRXV8QGHUWKHGLVWULFWFRXUWjVRUGHU 7KHGLVWULFWFRXUWLQWKHLQVWDQWFDVHGRHVQRWVHHPWRKDYH WKH $UP\&RUSVRI(QJLQHHUVZDVUHTXLUHGWRDFFHSWDWLWV LGHQWLILHGRUDSSOLHGWKHmDUELWUDU\DQGFDSULFLRXVlVWDQGDUG 3RLQWH0RXLOOHH&RQILQHG'LVSRVDO)DFLOLW\VHGLPHQWWKDWLV WRWKH&RUSVjGHFLVLRQ)RUH[DPSOHDOWKRXJKWKHFRXUWIRXQG SROOXWHGDWOHYHOVQRWRQO\KLJKHUWKDQWKHOHYHOVLQVHGLPHQWV WKDWmWKHOHYHOVRIFDGPLXPDQGOHDGDUHQRWEH\RQGWKHVLWHjV FDSDELOLW\l8QLWHG 6WDWHV Y 0LFKLJDQ  ) 6XSS G DW  LWGLGQRWDQDO\]HZKHWKHUWKH&RUSVFRXOGUHDVRQDEO\  ,Q DGGLWLRQ WR DJUHHLQJ ZLWK sXGJH .HLWK WKDW WKH $OO :ULWV $FW FRQFOXGH WKDW WKRVH OHYHOV DPRXQWHG WR VLJQLILFDQW QHZ DXWKRUL]HV D GLVWULFW FRXUW WR LVVXH ZULWV WR QRQSDUWLHV WR SUHYHQW FLUFXPVWDQFHVZLWKUHVSHFWWRLWVIHGHUDODFWLRQ$FFRUGLQJO\ IUXVWUDWLRQ RI D FRQVHQW MXGJPHQW VR ORQJ DV WKH FRQVHQW MXGJPHQW ZDV

ZH UHPDQG WKLV FDVH WR WKH GLVWULFW FRXUW IRU DQ LQLWLDO HQWHUHG SXUVXDQW WR ODZ DQG QRW SXUVXDQW WR SULYDWH FRQWUDFW DORQH DQG

GHWHUPLQDWLRQ RI ZKHWKHU WKH &RUSVj GHFLVLRQ WR SHUIRUP WKDW D GLVWULFW FRXUWjV GLVFUHWLRQ LQ LVVXLQJ VXFK DQ RUGHU VKRXOG EH

DQRWKHU($ZDVmDUELWUDU\DQGFDSULFLRXVl HYDOXDWHG XVLQJ WKH IRXU IDFWRUV FRQVLGHUHG LQ 8QLWHG 6WDWHV Y 1HZ <RUN 7HOHSKRQH &R  86       , DOVR MRLQ LQ 3DUWV , ,, DQG ,,,$ RI sXGJH .HLWKjV RSLQLRQ , GR QRW MRLQ 3DUW ,,,% ZKLFK LQVWUXFWV ,9&21&/86,21 WKH GLVWULFW FRXUW WR GHWHUPLQH ZKHWKHU WKH $GPLQLVWUDWLYH 3URFHGXUH $FW mVSHFLILFDOO\ DGGUHVVHV WKH SDUWLFXODU LVVXH DW KDQGl LQ ZKLFK FDVH mLW LV ,Q FRQFOXVLRQ ZH KROG WKDW WKH $OO :ULWV $FW SURYLGHV WKDW DXWKRULW\ DQG QRW WKH $OO :ULWV $FW WKDW LV FRQWUROOLQJl 6\QJHQWD GLVWULFWFRXUWVZLWKWKHDXWKRULW\WRELQGQRQSDUWLHVLQRUGHUWR &URS 3URW ,QF Y +HQVRQ o 86 o  6 &W   

SUHYHQW WKH IUXVWUDWLRQ RI FRQVHQW GHFUHHV WKDW GHWHUPLQH TXRWDWLRQ RPLWWHG  7KH $3$ LV D SURFHGXUDO GHYLFH WKDW HQDEOHV FRXUWV WR mFRPSHO DJHQF\ DFWLRQ XQODZIXOO\ ZLWKKHOG RU XQUHDVRQDEO\ GHOD\HGl SDUWLHVjREOLJDWLRQVXQGHUWKHODZ+RZHYHUIRUWKHUHDVRQV DQG WR VHW DVLGH DFWLRQV WKDW DUH mDUELWUDU\ FDSULFLRXV DQ DEXVH RI GLVFXVVHGDERYHZH5(0$1'WKHFDVHWRWKHGLVWULFWFRXUW GLVFUHWLRQ RU RWKHUZLVH QRW LQ DFFRUGDQFH ZLWK ODZl  86& †  6R IRU IXUWKHU FRQVLGHUDWLRQ RI WKH IROORZLQJ WZR LVVXHV IDU DV , NQRZ LW LV XQGLVSXWHG KHUH WKDW XQWLO WKH GLVWULFW FRXUW LVVXHG LWV  ZKHWKHU'HWURLWFRXOGKDYHEURXJKWVXLWXQGHUWKH$3$ $OO :ULWV $FW RUGHU WKH &RUSV ZDV LQ QR ZD\ REOLJDWHG WR DFFHSW WKH

DQGLIVRZKHWKHUWKLVFDVHSUHVHQWVWKHW\SHRImH[FHSWLRQDO &RQQHU &UHHN VHGLPHQW , WKXV VHH QR DJHQF\ DFWLRQ WKDW DEVHQW WKH $OO :ULWV $FW RUGHU FRXOG KDYH EHHQ mXQODZIXOO\ ZLWKKHOGl mXQUHDVRQDEO\ FLUFXPVWDQFHVlWKDWZRXOGUHQGHUWKH$3$LQDGHTXDWH DQG GHOD\HGl RU mDUELWUDU\ FDSULFLRXV DQ DEXVH RI GLVFUHWLRQ RU RWKHUZLVH  ZKHWKHUWKH&RUSVjGHFLVLRQWRSHUIRUPDQRWKHU($ZDV QRW LQ DFFRUGDQFH ZLWK ODZl XQGHU †  RI WKH $3$ DQG , VHH QR UHDVRQ mDUELWUDU\DQGFDSULFLRXVlXQGHU0DUVK WKDW WKH GLVWULFW FRXUW ZRXOG EH EHWWHU VXLWHG WR PDNH WKH LQLWLDO SXUHO\ OHJDO GHWHUPLQDWLRQ WKDW LV UHTXLUHG LQ WKLV DQDO\VLV 1R 8QLWHG6WDWHVHWDOY   8QLWHG6WDWHVHWDOY 1R &LW\RI'HWURLWHWDO &LW\RI'HWURLWHWDO

XVXDOO\DFFHSWHGDWWKHIDFLOLW\EXWDWOHYHOVXSWRWHQWLPHV WKH TXDOLW\ RI WKH KXPDQ HQYLURQPHQWl PXVW SURYLGH DQ KLJKHU WKDQ WKRVH FRQWHPSODWHG ZKHQ WKH IDFLOLW\ ZDV ILUVW (QYLURQPHQWDO,PSDFW6WDWHPHQW m(,6l DVVHVVLQJWKHHIIHFWV EXLOW1RRQHFRQWHQGVWKDWWKHODZIRUELGVWKH&RUSVIURP WKDW WKH SURSRVHG DFWLRQ ZLOO KDYH RQ WKH HQYLURQPHQW DFFHSWLQJ FRQWDPLQDWHG VHGLPHQWV DW 3RLQWH 0RXLOOHH GLVFXVVLQJ DOWHUQDWLYHV DQG LGHQWLI\LQJ WKH EHVW ZD\ WR +RZHYHUWKHODZGRHVUHTXLUHWKDWIHGHUDODJHQFLHVFRQVLGHU XQGHUWDNH WKH DFWLRQ  $OWKRXJK 1(3$jV VXEVWDQWLYH WKH SRWHQWLDO HQYLURQPHQWDO FRQVHTXHQFHV RI WKHLU DFWLRQV HQYLURQPHQWDO VWDQGDUGV DUH IOH[LEOH DQG OHDYH URRP IRU 7KH1DWLRQDO(QYLURQPHQWDO3ROLF\$FW m1(3$l 3XE/ DJHQF\GLVFUHWLRQ1(3$jVSURFHGXUDOUHTXLUHPHQWVGHPDQG 1R  6WDW    FRGLILHGDVDPHQGHGDW VWULFWFRPSOLDQFH&DOYHUW&OLIIVj&RRUGLQDWLQJ&RPP,QF 86&†HWVHT UHTXLUHVWKDWWKH&RUSVDQDO\]HWKH Y 8QLWHG 6WDWHV $WRPLF (QHUJ\ &RPPjQ   )G   HQYLURQPHQWDOFRQVHTXHQFHVRIWKHSURSRVHGDFWLRQEHIRUH  '&&LU  7KH(,6UHTXLUHPHQWLVDQmDFWLRQ SURFHHGLQJ IRUFLQJlUHTXLUHPHQWGHVLJQHGWRmDVVXUHFRQVLGHUDWLRQRIWKH HQYLURQPHQWDOLPSDFWRI>DJHQFLHVj@DFWLRQlDQGHQVXUHWKDW 7KH &RQQHU &UHHN VHGLPHQW LV QRW 3RLQWH 0RXLOOHHjV WKHSURMHFWZKHQXQGHUWDNHQLVKDQGOHGUHVSRQVLEO\.OHSSH HYHU\GD\VOXGJH,QIDFWWKH&RQQHU&UHHNVHGLPHQWFRQWDLQV Y 6LHUUD &OXE  86        TXRWDWLRQV OHYHOVRIOHDGDQGFDGPLXPPXFKKLJKHUWKDQWKHVHGLPHQW RPLWWHG 7KHTXHVWLRQKHUHLVZKHWKHU1(3$SURKLELWVWKH SUHYLRXVO\ FRQVLGHUHG RU XVXDOO\ DFFHSWHG  ,Q WKH 3RLQWH &RUSV IURP DFFHSWLQJ WKH &RQQHU &UHHN VHGLPHQW ZLWKRXW 0RXLOOHH &')jV RULJLQDO   (,6 WKH &RUSV FRQVLGHUHG ILUVW DVVHVVLQJ WKH HQYLURQPHQWDO LPSDFW RI DFFHSWDQFH DFFHSWLQJ VHGLPHQW ZLWK OHDG OHYHOV XS WR  SDUWV SHU 1(3$ PD\ UHTXLUH HLWKHU D IXOOIOHGJHG (,6 RU DQ PLOOLRQ mSSPl  (,6DWDQGLQDFWXDOSUDFWLFHWKH (QYLURQPHQWDO$VVHVVPHQW m($l mDSUHOLPLQDU\GRFXPHQW &RUSVDFFHSWVVHGLPHQWZLWKOHDGOHYHOVLQWKHUDQJHRI ZKLFKµ>E@ULHIO\SURYLGH>V@VXIILFLHQWHYLGHQFHDQGDQDO\VLV SSPs$DW7KH&RQQHU&UHHNVHGLPHQWFRQWDLQVOHDG IRUGHWHUPLQLQJZKHWKHUWRSUHSDUHDQHQYLURQPHQWDOLPSDFW OHYHOVRISSPs$DWnWHQWLPHVWKDWLQLWLDOO\ VWDWHPHQWRUDILQGLQJRIQRVLJQLILFDQWLPSDFWjl6RXWKZHVW FRQVLGHUHGDQGPRUHWKDQIRXUWLPHVWKDWQRUPDOO\DFFHSWHG :LOOLDPVRQ&RXQW\&PW\$VVjQ,QFY6ODWHU)G Q WK&LU  TXRWDWLRQRPLWWHG  7KH OHYHOV RI FDGPLXP LQ WKH SURSRVHG VHGLPHQW DUH VLPLODUO\XQXVXDO:KHUHDVWKH (,6PHQWLRQVQRWKLQJ ,QRUGHUWRGHWHUPLQHZKHWKHUDSURSRVHGDFWLRQLVDmPDMRU KLJKHUWKDQWKHSSPDYHUDJHOHYHORIFDGPLXPDSSDUHQWO\ )HGHUDO DFWLRQ>@ VLJQLILFDQWO\ DIIHFWLQJ WKH TXDOLW\ RI WKH IRXQGWKURXJKRXWWKH'HWURLW5LYHUV\VWHP (,6DW KXPDQHQYLURQPHQWl86&†  & LL DJHQFLHV DQG WKH VHGLPHQWV XVXDOO\ DFFHSWHG DW 3RLQWH 0RXLOOHH ILUVWORRNWRZKHWKHUWKHSURSRVHGDFWLRQLVDW\SHRIDFWLRQ JHQHUDOO\FRQWDLQFDGPLXPDWDOHYHORISSPs$DW WKDWQRUPDOO\UHTXLUHVDQ(,67KDWLVDQDJHQF\GHWHUPLQLQJ WKH&RQQHU&UHHNVHGLPHQWKDVFDGPLXPOHYHOVUHDFKLQJ ZKHWKHUDQ(,6LVQHFHVVDU\PXVW SSPs$DWnPRUHWKDQIRXUWLPHVWKHOHYHORULJLQDOO\ FRQWHPSODWHG DQG PRUH WKDQ ILYH WLPHV WKH OHYHO XVXDOO\ D   'HWHUPLQH XQGHU LWV SURFHGXUHV    ZKHWKHU WKH DFFHSWHG SURSRVDO LV RQH ZKLFK      1RUPDOO\ UHTXLUHV DQ HQYLURQPHQWDOLPSDFWVWDWHPHQWRU  1RUPDOO\GRHV 7KHVHH[FHSWLRQDOO\KLJKOHYHOVRIFRQWDPLQDQWVWULJJHUWKH QRWUHTXLUHHLWKHUDQHQYLURQPHQWDOLPSDFWVWDWHPHQWRU SURFHGXUDOUHTXLUHPHQWVRIWKH1DWLRQDO(QYLURQPHQWDO3ROLF\ DQHQYLURQPHQWDODVVHVVPHQW FDWHJRULFDOH[FOXVLRQ  $FW  8QGHU  86& †   & LL  IHGHUDO DJHQFLHV FRQWHPSODWLQJmPDMRU)HGHUDODFWLRQVVLJQLILFDQWO\DIIHFWLQJ 1R 8QLWHG6WDWHVHWDOY   8QLWHG6WDWHVHWDOY 1R &LW\RI'HWURLWHWDO &LW\RI'HWURLWHWDO

&)5† D 8QOHVVWKHSURSRVHGDFWLRQLVRQHWKDW DFWLRQFOHDUO\UHTXLUHVDQ($IRULQLGHQWLI\LQJDFWLRQVWKDW GRHVQRWQRUPDOO\UHTXLUHHLWKHUDQ(,6RUDQ($WKHDJHQF\ QRUPDOO\UHTXLUHDQ($EXWQRWQHFHVVDULO\DQ(,6WKH&RUSV PXVWXQGHUWDNHD1(3$DQDO\VLV&)5† E ,I KDVOLVWHGm&KDQJHVLQHQYLURQPHQWDOLPSDFWVZKLFKZHUHQRW WKHDFWLRQQRUPDOO\UHTXLUHVDQ(,6WKHDJHQF\SUHSDUHVDQ FRQVLGHUHGLQWKHSURMHFW(,6RU($l&)5† G  (,6  LI WKH DFWLRQ QRUPDOO\ UHTXLUHV DQ ($ WKH DJHQF\ +HUHWKHUHFRUGXQDPELJXRXVO\LQGLFDWHVWKDWWKLVFULWHULRQLV SUHSDUHV DQ ($ DQG EDVHG RQ WKDW DVVHVVPHQW GHWHUPLQHV PHW 7KH (,6FRQVLGHUHGOHDGOHYHOVRISSPDQG ZKHWKHUWRSURFHHGZLWKDIXOO(,6RULVVXHDILQGLQJRIQR FDGPLXP OHYHOV RI  SSP  WKH &RQQHU &UHHN VHGLPHQW VLJQLILFDQW LPSDFW m)216,l    &)5 †  F  H  FRQWDLQVOHDGOHYHOVXSWRSSPDQGFDGPLXPOHYHOVRI (YHQLIWKHDJHQF\SUHSDUHGDQ(,6ZKHQWKHSURMHFWZDVILUVW  SSP  7KH V\OORJLVP LV TXLWH VLPSOH   $FWLRQV WKDW DQ LQLWLDWHGLWPXVWSUHSDUHDVXSSOHPHQWDO(,6 m6(,6l LIWKH DJHQF\VD\VRUGLQDULO\UHTXLUHDQ($PXVWUHFHLYH($VVHH DJHQF\LQWHQGVWRPDNHmVXEVWDQWLDOFKDQJHVlWRWKHDFWLRQRU &)5† E DQGWKLVLVDQDFWLRQWKDWWKH&RUSVKDV LI m>W@KHUH DUH VLJQLILFDQW QHZ FLUFXPVWDQFHVl DQG WKRVH FKDQJHVRUQHZFLUFXPVWDQFHVZRXOGUHODWHWRWKHSURMHFWjV HIIHFWVRQWKHHQYLURQPHQW&)5† F  1(3$ PDNHVQRGLVWLQFWLRQEHWZHHQLQLWLDODFWLRQVDQGVXEVHTXHQW FKDQJHV WR LQLWLDO DFWLRQV DQG mWKH GHFLVLRQ ZKHWKHU WR SUHSDUHDVXSSOHPHQWDO(,6LVVLPLODUWRWKHGHFLVLRQZKHWKHU WR SUHSDUH DQ (,6 LQ WKH ILUVW LQVWDQFHl  0DUVK Y 2UHJRQ 1DWXUDO5HV&RXQFLO 86   7KDWLVLI WKHFKDQJHLWVHOIFRQVWLWXWHVDmPDMRU)HGHUDODFWLRQlWKDWZLOO  7KDW WKH &RQQHU &UHHN VHGLPHQW LV QRW FODVVLILHG DV mWR[LFl XQGHU mVLJQLILFDQWO\ DIIHFW>@l WKH HQYLURQPHQW WKH DJHQF\ PXVW WKH 7R[LF 6XEVWDQFHV &RQWURO $FW 3XE / 1R    6WDW  SUHSDUHD6(,686&†  & LL    FRGLILHG DW  86& †  m76&$l  RU XQGHU VWDWH HQYLURQPHQWDO UHJXODWLRQV LV ZKROO\ LUUHOHYDQW LQ GHWHUPLQLQJ ZKHWKHU

7KH1(3$UHJXODWLRQVjGHIDXOWUXOHLVWKDWIHGHUDODFWLRQV 1(3$ UHTXLUHV DQDO\VLV 7KH GHFLVLRQ ZKHWKHU WR SUHSDUH D 1(3$ DQDO\VLV GRHV QRW GHSHQG RQ ZKHWKHU WKH SURSRVHG DFWLRQ ZLOO EH XQOHVVVKRZQWREHWRWKHFRQWUDU\UHTXLUHSUHSDUDWLRQRIDQ KD]DUGRXV LI LW GLG IHGHUDO DJHQFLHV ZRXOG KDYH WR FRQVLGHU WKH ($,QRWKHUZRUGVXQOHVVDSURSRVHGDFWLRQDSSHDUVRQDQ HQYLURQPHQWDO FRQVHTXHQFHV RI WKHLU DFWLRQV RQO\ ZKHQ WKH DFWLRQ ZDV DJHQF\jV OLVW RI FDWHJRULFDO H[FOXVLRQV WKH HQYLURQPHQWDO SURKLELWHG E\ IHGHUDO ODZ /DZV JRYHUQLQJ WR[LF VXEVWDQFHV DLP WR DQDO\VLVPXVWEHSHUIRUPHG6HH&)5† E 7KH mHVWDEOLVK FOHDQXS FULWHULDl IRU 0LFK &RPS / † D   RU DFWLRQSURSRVHGKHUHGRHVQRWDSSHDURQWKH&RUSVjVOLVWRI mHOLPLQDWHl  86& † D   ULVNV GHHPHG ZKROO\ LQWROHUDEOH ,Q

FDWHJRULFDOH[FOXVLRQVIURP1(3$DQDO\VLV6HH&)5 FRQWUDVW 1(3$ DLPV QRW VLPSO\ WR SUHYHQW DFWLRQV WKDW DUH SURKLELWHG EXW WR mDVVXUH FRQVLGHUDWLRQ RI WKH HQYLURQPHQWDO LPSDFW RI >DJHQFLHVj@ †  DFWLRQVl .OHSSH Y 6LHUUD &OXE  86      TXRWDWLRQV RPLWWHG  7KH SXUSRVH RI DQ (,6 ZRXOG EH WR HQVXUH GLVFXVVLRQ RI WKH ,QGHHGWKHJRYHUQLQJDXWKRULWLHVH[SOLFLWO\LQGLFDWHWKDWWKLV SURSRVDOjV HQYLURQPHQWDO LPSDFWV DQG WR mLQIRUP GHFLVLRQPDNHUV DQG WKH DFWLRQQRUPDOO\GRHVUHTXLUHDQ($3XUVXDQWWR&)5 SXEOLF RI WKH UHDVRQDEOH DOWHUQDWLYHV ZKLFK ZRXOG DYRLG RU PLQLPL]H †  E   ZKLFK UHTXLUHV IHGHUDO DJHQFLHV WR GHILQH DGYHUVH LPSDFWV RU HQKDQFH WKH TXDOLW\ RI WKH KXPDQ HQYLURQPHQWl  &)5 †  %\ UHTXLULQJ VXFK DQDO\VHV 1(3$ DLPV QRW WR LGHQWLI\ WKRVH DFWLRQV WKDW QRUPDOO\ UHTXLUH DQ (,6 WKRVH WKDW DFWLRQV WKDW ZRXOG YLRODWH HQYLURQPHQWDO VWDQGDUGV EXW WR IRUFH QRUPDOO\ GR QRW UHTXLUH DQ (,6 RU DQ ($ DQG WKRVH WKDW FRQVLGHUDWLRQ RI FRQVHTXHQFHV DQG DOWHUQDWLYHV 800  &)5 QRUPDOO\UHTXLUHDQ($EXWQRWQHFHVVDULO\DQ(,6WKH&RUSV †  G  DQG WKXV HQVXUH WKDW HYHQ LI D SURSRVHG DFWLRQ LV OHJDO n DV KDVLGHQWLILHGDFWLRQVUHTXLULQJ1(3$DQDO\VLV7KHSURSRVHG WKH 3RLQWH 0RXLOOHH DFWLRQ DSSHDUV WR EH n LW ZLOO GRQH LQ D ZD\ WKDW PLQLPL]HV XQQHFHVVDU\ QHJDWLYH HQYLURQPHQWDO HIIHFWV 1R 8QLWHG6WDWHVHWDOY   8QLWHG6WDWHVHWDOY 1R &LW\RI'HWURLWHWDO &LW\RI'HWURLWHWDO

VDLG RUGLQDULO\ UHTXLUHV DQ ($  &)5 †  G  FRPSO\H[SHGLWLRXVO\ZLWK1(3$jVUHTXLUHPHQWV1(3$jV 7KHUHIRUHWKLVDFWLRQPXVWUHFHLYHDQ($ GHPDQGV PD\ EH DFKLHYHG IRUWKZLWK DQG mXQGHU FLUFXPVWDQFHVWKDWHQVXUHDQREMHFWLYHHYDOXDWLRQl0HWFDOIY ,WPD\EHWUXHWKDWLQWKHFRXUVHRIURXWLQHPDQDJHPHQWRI 'DOH\)G WK&LU EXWWKH\PD\QRW DQ RQJRLQJ RSHUDWLRQ DJHQFLHV PD\ FDXVH YDULRXV EHLJQRUHG HQYLURQPHQWDOPHDVXUHPHQWVWRUHDFKOHYHOVKLJKHURUORZHU WKDQ SUHYLRXV OHYHOV ZLWKRXW WULJJHULQJ D 1(3$ DQDO\VLV 7KHVHDFWLRQVVXFKDVUDLVLQJRUORZHULQJZDWHUIORZIURPD GDPZLWKLQOHYHOVSUHYLRXVO\FRQVLGHUHGGRQRWQHFHVVDULO\ UHTXLUH1(3$DQDO\VLV6HH8SSHU6QDNH5LYHU&KDSWHURI 7URXW8QOLPLWHGY+RGHO )G WK&LU   +RZHYHU WKLV LV QRW D FDVH LQ ZKLFK WKH DJHQF\ LV GRLQJ mQRWKLQJ QHZ QRU PRUH H[WHQVLYH QRU RWKHU WKDQ WKDW FRQWHPSODWHGZKHQWKHSURMHFWZDVILUVWRSHUDWLRQDOlLGDW EXWDFDVHLQZKLFKWKHSURSRVHGFKDQJHLVmLQFUHPHQWDOl EXW mRI PDMRU SURSRUWLRQVl LG TXRWDWLRQ RPLWWHG   ,I DQ LQFUHDVH RI OHVV WKDQ  RYHU WKH HQYLURQPHQWDO LPSDFW FRQVLGHUHGLQWKHRULJLQDO(,6UHTXLUHV1(3$DQDO\VLVVHH 1RUWKZRRGV :LOGHUQHVV 5HFRYHU\ ,QF Y 8QLWHG 6WDWHV )RUHVW 6HUY  )G   WK &LU   VXUHO\ DQ LQFUHDVHRIZDUUDQWVQROHVV ,ZRXOGWKHUHIRUHUHPDQGWKHFDVHWRWKHGLVWULFWFRXUWZLWK LQVWUXFWLRQV WKDW LW DPHQG LWV RUGHU WR SHUPLW WKH &RUSV WR

 (YHQ DSDUW IURP WKH H[SOLFLW UHJXODWRU\ FODVVLILFDWLRQ RI WKLV NLQG RI SURMHFW DV RQH QRUPDOO\ UHTXLULQJ DQ ($ UHIHUHQFH WR WKH &RUSVj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s$ DW   $SULO   &RUSV 0HPR  1R 8QLWHG6WDWHVHWDOY   8QLWHG6WDWHVHWDOY 1R &LW\RI'HWURLWHWDO &LW\RI'HWURLWHWDO

BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB &LW\jVSRLQWRIYLHZ7KXV'HWURLWPD\PHHWLWVREOLJDWLRQV XQGHUWKH&OHDQ:DWHU$FWZLWKRXWUHVRUWWR3RLQWH0RXLOOHH &21&855,1*,13$57',66(17,1*,13$57 YLDWKH$OO:ULWV$FW BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 1HZ<RUN7HOHSKRQHLVDOVRGLVWLQJXLVKDEOHEHFDXVHLQWKH 1255,6&LUFXLWsXGJHFRQFXUULQJLQSDUWDQGGLVVHQWLQJ FDVH DW KDQG WKH FRQVHQW MXGJPHQW ZDV QHJRWLDWHG E\ WKH LQSDUW,IXOO\FRQFXULQSDUWV,,,DQG,,, $ RIWKHPDMRULW\ SDUWLHVWKHREOLJDWLRQVZHUHQRWGHWHUPLQHGLQDQDGMXGLFDWLRQ RSLQLRQDQG,DJUHHZLWKVRPHRIWKHUHDVRQLQJFRQWDLQHGLQ RQWKHPHULWVDQGWKH8QLWHG6WDWHVZDVQRWDSDUW\WRWKH WKHUHPDLQLQJSRUWLRQRIWKHRSLQLRQ   , GLVVHQWKRZHYHU MXGJPHQW7KHPDMRULW\RSLQLRQDUJXHVWKDWFRQVHQWGHFUHHV LQVRIDUDVWKHPDMRULW\RSLQLRQVXJJHVWVWKDW8QLWHG6WDWHVY FDQHQIRUFHWKHODZLQDGGLWLRQWRSULYDWHULJKWVDQGZKHQD 1HZ<RUN7HOHSKRQH&R86    FRQWUROVWKLV FRQVHQW GHFUHH HQIRUFHV WKH ODZ WKH $OO :ULWV $FW FDQ EH FDVH,DOVRGLVDJUHHZLWKWKHUHPDQG,ZRXOGQRWUHPDQG XVHGWRDVVHUWMXULVGLFWLRQRYHUWKLUGSDUWLHV7KLVPD\ZHOOEH WKHFDVHWRWKHGLVWULFWFRXUWIRUDGHWHUPLQDWLRQRIZKHWKHUWKH WUXH LQ OLPLWHG FLUFXPVWDQFHV  +RZHYHU KHUH WKH GLVWULFW $GPLQLVWUDWLYH3URFHGXUH$FW WKHm$3$l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mYLJRURXV FRPPXQLW\ 0RUHRYHU&RQJUHVVSURYLGHGLQD DPHQGPHQWWR RSSRVLWLRQl EXW ZKLFK WKH &LW\jV RZQ EULHI WR WKH GLVWULFW 7LWOH,,,WKDWm>D@QRUGHUDXWKRUL]LQJWKHLQWHUFHSWLRQRID FRXUWUHYHDOVWRKDYHEHHQGULYHQLQODUJHSDUWE\WKH%D\YLHZ ZLUHRURUDOFRPPXQLFDWLRQVKDOOXSRQ UHTXHVWRIWKH <DFKW&OXEsRLQW$SSDW &OHDUO\3RLQWH0RXLOOHH DSSOLFDQWGLUHFWWKDWDFRPPXQLFDWLRQFRPPRQFDUULHU LVQRWWKHRQO\VSRWDYDLODEOHWRDFFHSWWKHGUHGJHGPDWHULDO VKDOOIXUQLVKWKHDSSOLFDQWIRUWKZLWKDOOLQIRUPDWLRQ LW LV UDWKHU WKH PRVW SROLWLFDOO\ SDODWDEOH ORFDWLRQ IURP WKH IDFLOLWLHV DQG WHFKQLFDO DVVLVWDQFH QHFHVVDU\ WR 1R 8QLWHG6WDWHVHWDOY   8QLWHG6WDWHVHWDOY 1R &LW\RI'HWURLWHWDO &LW\RI'HWURLWHWDO

DFFRPSOLVK WKH LQWHUFHSWLRQ XQREWUXVLYHO\    l  3URWHFWLRQ,QFY+HQVRQ6&W  WKH&RXUW 86& †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mDQ\DQG 6XSUHPH &RXUW LQ 1HZ <RUN 7HOHSKRQH WKH GLVWULFW FRXUW DOOFODLPVlLQ+HQVRQEHGLVPLVVHG UHOLHGRQQRVWDWXWHRUUHJXODWLRQWKDWFRXOGEHLQWHUSUHWHGDV UHTXLULQJWKH$UP\&RUSVWRDFFHSWWKHGUHGJHGPDWHULDO7KH %XW 3HQQV\OYDQLD %XUHDX >RI &RUUHFWLRQ Y 8QLWHG GLVWULFWFRXUWRSLQLRQPHUHO\QRWHGWKDWWKH$UP\&RUSVLVQRW 6WDWHV0DUVKDOV6HUYLFH866&W mOHJDOO\SUHFOXGHGlIURPDFFHSWLQJWKHVHPDWHULDOV8QLWHG /(GG    @PDGHFOHDUWKDWm>Z@KHUHDVWDWXWH 6WDWHVY0LFKLJDQ)6XSSG   ('0LFK VSHFLILFDOO\DGGUHVVHVWKHSDUWLFXODULVVXHDWKDQGLWLV   WKDW DXWKRULW\ DQG QRW WKH $OO :ULWV $FW WKDW LV FRQWUROOLQJl86DW6&W7KHULJKWRI 6HFWLRQ  RI WKH 5LYHUV DQG +DUERUV $FW ZKLFK LV UHPRYDO LV HQWLUHO\ D FUHDWXUH RI VWDWXWH DQG mD VXLW DSSOLFDEOHKHUHSURYLGHVWKDWm>D@Q\VSRLOGLVSRVDOIDFLOLWLHV FRPPHQFHGLQDVWDWHFRXUWPXVWUHPDLQWKHUHXQWLOFDXVH FRQVWUXFWHGXQGHUWKHSURYLVLRQVRIWKLVVHFWLRQVKDOOEHPDGH LVVKRZQIRULWVWUDQVIHUXQGHUVRPHDFWRI&RQJUHVVl DYDLODEOHWR)HGHUDOOLFHQVHHVRUSHUPLWWHHVXSRQSD\PHQWRI 7KHVHVWDWXWRU\SURFHGXUHVDUHWREHVWULFWO\FRQVWUXHG DQDSSURSULDWHFKDUJHIRUVXFKXVHl86&†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j RYHUUXOH 1HZ <RUN 7HOHSKRQH DOWKRXJK LW FOHDUO\ OLPLWHG LWV DSSOLFDWLRQ GLVFUHWLRQ XQGHU WKH 5LYHUV DQG +DUERUV $FW KHUH  7KRVH s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

,QWKHLQVWDQWFDVHWKH$UP\&RUSVjUHTXLUHGGXWLHVDQG &RUSVj FODLP RI VRYHUHLJQ LPPXQLW\ ERWK SDUWLHV DUH LQ GLVFUHWLRQDU\ RSWLRQV DUH JRYHUQHG E\ VWDWXWH DV DUH WKH DJUHHPHQWWKDWWKH$3$FRXOGEHXVHGWRFKDOOHQJHWKH$UP\ SURFHVVHV0LFKLJDQDQG'HWURLWPXVWWDNHWRFKDOOHQJHWKHP &RUSVj GHFLVLRQV LQ WKLV PDWWHU  , EHOLHYH WKDW 6\JHQWD 7KH $3$ SURYLGHV WKDW XSRQ SHWLWLRQ D GLVWULFW FRXUW PD\ PDQGDWHV WKDW 'HWURLW DQG 0LFKLJDQ SURFHHG XQGHU WKH mFRPSHODJHQF\DFWLRQXQODZIXOO\ZLWKKHOGRUXQUHDVRQDEO\ SURFHGXUHVHVWDEOLVKHGE\WKH$3$DQGQRWWKH$OO:ULWV$FW GHOD\HGl  86&    $Q DUELWUDU\ DQG FDSULFLRXV 6HHDOVR&OLQWRQY*ROGVPLWK86    GHFLVLRQ FRXOG DOVR EH VHW DVLGH  ,G  $V WKH $UP\ &RUSV QRWLQJWKDWWKH$OO:ULWV$FWmLQYHVWVDFRXUWZLWKDSRZHU UHSHDWHGO\HPSKDVL]HGLQLWVEULHIWKHDSSURSULDWHSURFHGXUH HVVHQWLDOO\HTXLWDEOHDQGDVVXFKQRWJHQHUDOO\DYDLODEOHWR KHUHLVWRSHUPLWLWDQRSSRUWXQLW\WRVXEMHFWWKHUHTXHVWWRXVH SURYLGHDOWHUQDWLYHVWRRWKHUDGHTXDWHUHPHGLHVDWODZlDQG LWV KROGLQJ IDFLOLWLHV WR WKH IXOO HQYLURQPHQWDO DQG SXEOLF GLVFXVVLQJWKHSRVVLEOHDOWHUQDWLYHURXWHSURYLGHGLQWKDWFDVH LQWHUHVW UHYLHZ  ,I WKH $UP\ &RUSV XOWLPDWHO\ GHQLHV WKH E\WKH$3$  GXPSLQJ SHUPLW LI WKH $UP\ &RUSV GRHV QRW FRQGXFW WKH HQYLURQPHQWDODVVHVVPHQWLQDWLPHO\PDQQHURULI'HWURLW 7KHGLVWULFWFRXUWH[SOLFLWO\VWDWHGWKDWLWZDVQRWUHO\LQJRQ DQG0LFKLJDQGLVDJUHHZLWKWKHUHVXOWVRIWKH$UP\&RUSVj WKH$3$IRULWVMXULVGLFWLRQ8QLWHG6WDWHVY0LFKLJDQ HQYLURQPHQWDODVVHVVPHQWDFDVHFRXOGSURFHHGDJDLQVWWKH )6XSSGDW  ,QGRLQJVRLWHVVHQWLDOO\UHYLHZHGWKH $UP\&RUSVXQGHUWKH$3$6HH8QLWHG6WDWHVY6DQsXDQ $UP\ &RUSVj GHFLVLRQV XQGHU D GH QRYR VWDQGDUG  $V WKH %D\0DULQD )G VW&LU  KROGLQJWKDW 6XSUHPH&RXUWKDVPDGHFOHDUDJHQF\MXGJHPHQWVVXFKDV WKH$3$LVWKHmSURSHUDYHQXHlIRUUHYLHZLQJWKHGHQLDORI WKHVH DUH HQWLWOHG WR FRQVLGHUDEOH GHIHUHQFH DQG WKH FRXUW 5LYHUVDQG+DUERUV$FWSHUPLWV ,QGHHGDEVHQWWKH$UP\ VKRXOGQRWVXEVWLWXWHLWVMXGJPHQWIRUWKDWRIWKHDJHQF\6HH &LWL]HQVWR3UHVHUYH2YHUWRQ3DUN,QFY9ROSH86    $VWKH$3$LWVHOILQIRUPVXVDQDJHQF\ DFWLRQVKRXOGEHVHWDVLGHRQO\LIDUELWUDU\DQGFDSULFLRXVRU  6&W DW  6WHYHQV s FRQFXUULQJ  , VHH QR UHDVRQ WR GLVFXVV WKH LPSDFW RI 6\JHQWD RQ 1HZ <RUN 7HOHSKRQH IXUWKHU EHFDXVH , DP FRQILGHQW XQODZIXO86&

,EHOLHYHWKDWWKHGLVWULFW WKDW EDVHG RQ WKH DQDO\VLV DERYH WKLV FDVH GRHV QRW HYHQ IDOO ZLWKLQ DQ FRXUWjVUHVRUWWRWKH$OO:ULWV$FWOHGLWWRDSSO\WKHLQFRUUHFW H[SDQVLYH UHDGLQJ RI 1HZ <RUN 7HOHSKRQH  VWDQGDUG RI UHYLHZ WR WKH $UP\ &RUSVj GHFLVLRQV  7KLV LV SUHFLVHO\ZK\LWLVLPSRUWDQWWKDWWKHDFWLRQEHEURXJKWLQWKH  $W OHDVW WZR RWKHU FLUFXLWV KDYH DOVR KHOG WKDW DFWLRQV WDNHQ E\ WKH SURSHUIRUP $UP\ &RUSV XQGHU WKH 5LYHUV DQG +DUERUV $FW DUH JHQHUDOO\ UHYLHZDEOH XQGHU WKH $3$ 6HH %DQNHUV /LIH &DV &R Y &DOODZD\  )G  :KLOHWKHPDMRULW\RSLQLRQUHPDQGVWRWKHGLVWULFWFRXUWIRU  WK &LU   m6LQFH WKH GUHGJH DQG ILOO SHUPLW XQGHUO\LQJ WKLV D GHWHUPLQDWLRQ RI ZKHWKHU WKHUH DUH mH[FHSWLRQDO FRQWURYHUV\ ZDV LVVXHG SXUVXDQW WR WKH 5LYHUV DQG +DUERUV $FW    RXU ILUVW TXHVWLRQ LV ZKHWKHU &RQJUHVV LQWHQGHG WR SUHFOXGH MXGLFLDO UHYLHZ FLUFXPVWDQFHVl WKDW ZRXOG UHQGHU WKH $3$ LQDGHTXDWH QR XQGHU WKDW VWDWXWH     >:@H KROG WKDW DJHQF\ DFWLRQ XQGHU WKDW $FW LV VXFKFLUFXPVWDQFHVDUHDSSDUHQWWRPHDQGQRVXFKILQGLQJV UHYLHZDEOHl &LWL]HQV &RPP IRU WKH +XGVRQ 9DOOH\ Y 9ROSH   )G ZHUH PDGH E\ WKH GLVWULFW FRXUW  ,Q DGGLWLRQ LQ OLJKW RI   QG &LU   m7KH GLVWULFW FRXUW SURSHUO\ UHOLHG RQ WKH 6\JHQWDLWLVQRWFOHDULIVXFKDQH[FHSWLRQFRQWLQXHVWRH[LVW SUHVXPSWLRQ RI UHYLHZDELOLW\ HPERGLHG LQ WKH $GPLQLVWUDWLYH 3URFHGXUH LQ D FDVH LQ ZKLFK D VWDWXWH FOHDUO\ JRYHUQV WKH UHTXLUHG $FW ZKHUH WKHUH ZDV QR HYLGHQFH RI D FRQJUHVVLRQDO LQWHQW WR SURKLELW UHYLHZ LQ WKH 5LYHUV DQG +DUERUV $FWl  6HH DOVR 2FHDQ $GYRFDWHV Y SURFHGXUHV  %HFDXVH RI WKLV DQG LQ OLJKW RI ERWK SDUWLHVj 86 $UP\ &RUSV RI (QJLQHHUV  )6XSSG   :' :DVK DJUHHPHQWWKDWWKH$3$LVDSSOLFDEOH,VHHQRQHHGIRUWKH  UHYLHZLQJ WKH $UP\ &RUSVj DFWLRQV XQGHU WKH $3$ IRU FRPSOLDQFH GLVWULFW FRXUW WR GHWHUPLQH WKH HVVHQWLDOO\ OHJDO TXHVWLRQ RI ZLWK WKH 1DWLRQDO (QYLURQPHQWDO 3ROLF\ $FW DQG WKH 5LYHUV DQG +DUERUV ZKHWKHUWKH$3$LVDSSOLFDEOH $FW  1R 8QLWHG6WDWHVHWDOY  &LW\RI'HWURLWHWDO

,QRZWXUQWRWKHLVVXHRIWKHHQYLURQPHQWDODVVHVVPHQWV 3RLQWH 0RXLOOHHjV SUHYLRXV (,6 ZDV SUHSDUHG LQ   DQG GRHVQRWVSHFLI\DPD[LPXPOHYHORIWR[LFLW\RWKHUWKDQWKDW SURYLGHGE\WKH7R[LF6XEVWDQFHV&RQWURO$FW,QDGGLWLRQ WKH$UP\&RUSVKDVVKRZQWKDWWKHOHYHOVRIFHUWDLQWR[LQVLQ WKH GUHGJHG PDWHULDO DUH VHYHUDO WLPHV JUHDWHU WKDQ LQ PDWHULDOVLWW\SLFDOO\DFFHSWV7KHVHIDFWVVWURQJO\VXJJHVW WKDW DQ (QYLURQPHQWDO $VVHVVPHQW LV UHTXLUHG XQGHU WKH UHJXODWLRQV&)5† G (YHQLIDQ(QYLURQPHQWDO $VVHVVPHQWLVQRWUHTXLUHGIXUWKHUVWXG\PD\EHXQGHUWDNHQ DWWKH$UP\&RUSVjGLVFUHWLRQ &)5† F   :KLOH , DJUHH ZLWK WKH PDMRULW\ WKDW WKH GLVWULFW FRXUW PD\ UHYLHZ D GLVFUHWLRQDU\ GHFLVLRQ WR FRQGXFW VXSSOHPHQWDO VWXGLHVEDVHGRQDQmDUELWUDU\DQGFDSULFLRXVl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

 sXGJH 0RRUHjV RSLQLRQ FRQFXUULQJ LQ SDUW DQG GLVVHQWLQJ LQ SDUW PDNHV D SHUVXDVLYH FDVH EDVHG RQ WKH HYLGHQFH LQ WKH UHFRUG WKDW DQ (QYLURQPHQWDO $VVHVVPHQW LV LQ IDFW UHTXLUHG E\ ODZ , GR QRW UHDFK WKLV LVVXH EHFDXVH , EHOLHYH WKDW LW LV HQRXJK WR FRQFOXGH WKDW WKH $UP\ &RUSV GLG QRW DEXVH LWV GLVFUHWLRQ LQ GHFLGLQJ IXUWKHU VWXG\ ZDV ZDUUDQWHG DQG DV VXFK WKH GLVWULFW FRXUW PD\ QRW XVH WKH $OO :ULWV $FW WR E\SDVV WKH $UP\ &RUSVj GLVFUHWLRQ