5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 3XUVXDQW WR 6L[WK &LUFXLW 5XOH   $ONLUHY,UYLQJHWDO 1R (/(&7521,& &,7$7,21  )(' $SS $ WK &LU )LOH 1DPH DD 2KLRIRU$SSHOOHHV21%5,() *DU\06PLWK(48$/ s867,&( )281'$7,21 &ROXPEXV 2KLR (GZDUG $ ,FRYH60,7+ &21'(1,&OHYHODQG2KLRIRU$SSHOODQW 81,7('67$7(6&28572)$33($/6 7LPRWK\75HLG5(,'%(55<0$56+$// :$5*2 )257+(6,;7+&,5&8,7 &OHYHODQG2KLRIRU$SSHOOHHV BBBBBBBBBBBBBBBBB BBBBBBBBBBBBBBBBBBBBBB $0(1'('23,1,21 //2<' ' $/.,5( ; BBBBBBBBBBBBBBBBBBBBBB 3ODLQWLII$SSHOODQW   $57+85s7$512:'LVWULFWsXGJH3ODLQWLII/OR\G'  1R $ONLUH ZDV DUUHVWHG IRU GUXQN GULYLQJ DQG KHOG DOPRVW Y  VHYHQW\WZRKRXUVZLWKRXWDSUREDEOHFDXVHKHDULQJ+HZDV ! VXEVHTXHQWO\LQFDUFHUDWHGIRUIDLOXUHWRDSSHDUIRUVKRZFDXVH  KHDULQJVDQGIDLOXUHWRSD\ILQHVDQGFRXUWFRVWV$ONLUHVXHG s8'*( s$1( ,59,1*HWDO  'HIHQGDQWV$SSHOOHHV  GHIHQGDQWV +ROPHV &RXQW\ sXGJH sDQH ,UYLQJ +ROPHV &RXQW\ &RXUW DQG 6KHULII 7LPRWK\ =LPPHUO\ XQGHU  1 86& †   DUJXLQJ WKDW KLV FRQVWLWXWLRQDO ULJKWV ZHUH $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW YLRODWHGE\KLVZDUUDQWOHVVGHWHQWLRQDQGFLYLOGHEWUHODWHG IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW$NURQ LQFDUFHUDWLRQ$IWHUDSDUWLDOVHWWOHPHQWGLVSRVHGRIVHYHUDO 1R n'DYLG''RZGsU'LVWULFWsXGJH LVVXHVLQWKHFDVHWKHGLVWULFWFRXUWGHQLHG$ONLUHjVVXPPDU\ MXGJPHQW PRWLRQ DQG JUDQWHG WKH GHIHQGDQWVj VXPPDU\ $UJXHG 0DUFK MXGJPHQW PRWLRQ RQ WKH UHPDLQLQJ FRQVWLWXWLRQDO LVVXHV UDLVHG  7KH GLVWULFW FRXUW DOVR GHQLHG $ONLUHjV FODVV 'HFLGHGDQG)LOHG sXQH FHUWLILFDWLRQPRWLRQ7KLVDSSHDOIROORZHG %HIRUH 0225(DQG&2/(&LUFXLWsXGJHV 7$512: $ONLUHUDLVHVIRXULVVXHVLQKLVDSSHDO7KHILUVWWKUHHDVN 'LVWULFWsXGJH ZKHWKHUWKHGLVWULFWFRXUWSURSHUO\GHQLHG$ONLUHjVVXPPDU\ MXGJPHQW PRWLRQ DQG JUDQWHG WKH GHIHQGDQWV VXPPDU\ BBBBBBBBBBBBBBBBB MXGJPHQWDVWRWKHLUOLDELOLW\IRUDOOHJHGO\YLRODWLQJ$ONLUHjV  )RXUWK$PHQGPHQWULJKWQRWWREHKHOGRQDZDUUDQWOHVV &2816(/ DUUHVW ZLWKRXW DUUDLJQPHQW IRU IRUW\HLJKW KRXUV  7KLUWHHQWK$PHQGPHQWULJKWQRWWREHLPSULVRQHGIRUD $5*8('   *DU\ 0 6PLWK (48$/ s867,&( FLYLOGHEWDQG)RXUWHHQWK$PHQGPHQWULJKWQRWWRORVHKLV )281'$7,21&ROXPEXV2KLRIRU$SSHOODQW7LPRWK\7 OLEHUW\GXHWRLQGLJHQF\   )RXUWHHQWK$PHQGPHQWULJKWWR 5HLG5(,'%(55<0$56+$// :$5*2&OHYHODQG GXHSURFHVVDQGHTXDOSURWHFWLRQIRUIDLOLQJWRDOORZFUHGLW WRZDUGILQHVDQGFRVWVIRUWLPHVHUYHG7KHIRXUWKLVVXHRQ DSSHDOLVZKHWKHUWKHGLVWULFWFRXUWSURSHUO\GHQLHG$ONLUHjV

7KH +RQRUDEOH $UWKXU s 7DUQRZ 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU PRWLRQIRUFODVVFHUWLILFDWLRQ)RUWKHUHDVRQVVWDWHGEHORZ WKH (DVWHUQ 'LVWULFW RI 0LFKLJDQ VLWWLQJ E\ GHVLJQDWLRQ ZH5(9(56(WKHGLVWULFWFRXUWRQWKHILUVWDQGVHFRQGLVVXHV

 1R $ONLUHY,UYLQJHWDO   $ONLUHY,UYLQJHWDO 1R

DQG5(0$1'WRWKHGLVWULFWFRXUWIRUIXUWKHUSURFHHGLQJV GDWHG1RYHPEHU ZKLFKLQIRUPHGsXGJH,UYLQJWKDW :H$)),50WKHGLVWULFWFRXUWRQWKHWKLUGDQGIRXUWKLVVXHV KHZDVGLVDEOHGDQGH[SODLQHGKLVILQDQFLDOGLIILFXOWLHV ,)$&78$/+,6725< $ONLUHGLGQRWDSSHDUIRUWKH'HFHPEHU KHDULQJ sXGJH,UYLQJLVVXHGDEHQFKZDUUDQWIRUKLVDUUHVW$ONLUHVHQW 2Q 6DWXUGD\ $XJXVW     DW  DP $ONLUH ZDV D VHFRQG OHWWHU GDWHG 'HFHPEHU    H[SODLQLQJ KLV DUUHVWHGIRUGULYLQJZKLOHLQWR[LFDWHG m':,l $ONLUHZDV IDLOXUHWRDSSHDUDWWKHKHDULQJ7KHOHWWHUVWDWHGWKDWKHZDV WDNHQ WR WKH +ROPHV &RXQW\ sDLO ZKHUH KH UHPDLQHG DOO LQ WKH KRVSLWDO RQ WKH KHDULQJ GDWH IXUWKHU H[SODLQHG KLV ZHHNHQG  7KHUH ZDV D ZDUUDQW IRU $ONLUH IURP DQRWKHU ILQDQFLDO GLIILFXOWLHV DQG RXWOLQHG KLV LQDELOLW\ WR ILQG MXULVGLFWLRQ7KHSDUWLHVGLVSXWHZKHWKHU$ONLUHZDVKHOGRQ HPSOR\PHQW WKH ':, DUUHVW RU WKH RXWVWDQGLQJ ZDUUDQW  $ONLUH ZDV DUUDLJQHGLQ+ROPHV&RXQW\&RXUWEHIRUHsXGJHsDQH,UYLQJ 2Q0D\ $ONLUHZDVDUUHVWHGRQWKHRXWVWDQGLQJ RQ7XHVGD\PRUQLQJ$XJXVW oDOPRVWVHYHQW\WZR EHQFKZDUUDQW$WDKHDULQJRQ0D\ sXGJH,UYLQJ KRXUVDIWHUKLVDUUHVW1RSUREDEOHFDXVHKHDULQJZDVKHOG IRXQG$ONLUHLQFRQWHPSWDQGVHQWHQFHGKLPWRWKLUW\GD\VLQ SULRUWRWKH$XJXVWQGKHDULQJ MDLOIRUmIDLOLQJWRSD\DQ\ILQHRUFRVWVl7KHsXGJHIXUWKHU VWDWHGWKDW$ONLUHFRXOGZRUNRIIWKHILQHDQGFRVWV7KHUH $W D VXEVHTXHQW KHDULQJ RQ 6HSWHPEHU    $ONLUH ZDVQRLQTXLU\DWWKHKHDULQJLQWR$ONLUHjVDELOLW\WRSD\ SOHDGHGQRFRQWHVWWRWKH':,FKDUJHV+HZDVVHQWHQFHGWR ILIWHHQGD\VLQMDLODQGILQHGDQGDVVHVVHGFRXUWFRVWVRI $ONLUHVHUYHGWKHWKLUW\GD\VHQWHQFHIURP0D\ WR IRUDWRWDORI$ONLUHVLJQHGDSD\PHQWFRQWUDFW sXQH 'XULQJWKDWWLPHKHZRUNHGDWDUHF\FOLQJ DJUHHLQJ WR SD\  PRQWKO\ LQVWDOOPHQWV VWDUWLQJ FHQWHUUHFHLYLQJWKHFXUUHQWPLQLPXPZDJHUDWHRISHU 6HSWHPEHU     1R LQTXLU\ ZDV PDGH LQWR $ONLUHjV KRXU ZKLFK ZDV FUHGLWHG WRZDUG KLV ILQH  $V D UHVXOW DELOLW\WRSD\EXWLWDSSHDUVIURPWKHUHFRUGWKDWKHVLJQHGWKH DFFRUGLQJWR$ONLUHKHZDVDEOHWRZRUNRIIKLVHQWLUHILQH FRQWUDFWYROXQWDULO\ ,QIDFWKHVD\VWKDWKHZRUNHGPRUHKRXUVWKDQKLVILQH EXWKHUHFHLYHGQRFRPSHQVDWLRQIRUWKDWH[WUDZRUN7KH $ONLUHGLGQRWPDNHDQ\SD\PHQWVWRZDUGWKHPRQH\RZHG FRXQW\jVSROLF\GRHVQRWDOORZGHIHQGDQWVWRZRUNRIIWKHLU 'XHWR$ONLUHjVIDLOXUHWRSD\RQ1RYHPEHU sXGJH FRXUWFRVWVVR$ONLUHFDOFXODWHVWKDWDIWHUWKHWKLUW\GD\VLQ ,UYLQJVLJQHGDVKRZFDXVHOHWWHURUGHULQJKLPWRDSSHDUDWD MDLO KH VWLOO RZHG FRXUW FRVWV LQ WKH DPRXQW RI  KHDULQJ RQ 'HFHPEHU    DW   DP  7KH OHWWHU +RZHYHU +ROPHV &RXQW\ &RXUW UHFRUGV LQGLFDWH KH RZHG DGYLVHG WKDW IDLOXUH WR DSSHDU RU WR SD\ WKH DPRXQW RZHG     LQ IXOO ZRXOG UHVXOW LQ WKH LVVXDQFH RI D EHQFK ZDUUDQW IRU $ONLUHjV DUUHVW  $ONLUH UHVSRQGHG ZLWK D OHWWHU  7KH GDWH VWDPS LQGLFDWHV WKDW WKH OHWWHU ZDV ILOHG RQ 6HSWHPEHU    ZKLFK ZRXOG EH EHIRUH WKH FRXUW VHQW WKH ILUVW VKRZ FDXVH OHWWHU $ONLUH DUJXHV WKDW WKLV GHPRQVWUDWHV KH ZDV EHLQJ SURDFWLYH DERXW KLV LQDELOLW\ WR PHHW WKH SD\PHQW VFKHGXOH +RZHYHU WKH OHWWHU LWVHOI LV GDWHG 1RYHPEHU    ,Q DGGLWLRQ WKH OHWWHU UHIHUV WR m\RXU OHWWHU ODVW ZHHNl DSSDUHQWO\ UHIHUHQFLQJ WKH sXGJHjV VKRZ FDXVH OHWWHU ZKLFK ZDV  VLJQHG RQ 1RYHPEHU    7KXV ZH ZLOO DVVXPH WKDW WKH GDWH VWDPS 7KHUH LV QR H[SODQDWLRQ LQ WKH UHFRUG IRU WKH GLVFUHSDQF\ EHWZHHQ ZDV LQDFFXUDWH DQG WKH FRUUHFW GDWH LV 1RYHPEHU    DV OLVWHG LQ WKH  DQG  OHWWHU 1R $ONLUHY,UYLQJHWDO   $ONLUHY,UYLQJHWDO 1R

)LYHGD\VDIWHUKLVUHOHDVHRQsXQH DQRWKHUVKRZ 'HFHPEHU $IWHUWKHSUHVHQWDFWLRQZDVILOHGWKH FDXVHOHWWHUZDVVHQWWR$ONLUHIRUIDLOXUHWRSD\WKH  ILQDOVKRZFDXVHKHDULQJGDWHZDVSRVWSRQHGLQGHILQLWHO\ DPRXQW7KHOHWWHUVHWDKHDULQJGDWHRIsXO\ DQG VWDWHGWKDWKHZDVUHTXLUHGWRHLWKHUSD\LQIXOOEHIRUHWKHGDWH ,,352&('85$/+,6725< RUDSSHDU$ONLUHDJDLQIDLOHGWRSD\RUDSSHDUsXGJH,UYLQJ IRXQGKLPLQFRQWHPSWIRUmIDLOXUHWRREH\DSUHYLRXVRUGHUl 3ODLQWLII $ONLUH ILOHG D FRPSODLQW DQG D PRWLRQ IRU FODVV DQG LVVXHG DQRWKHU EHQFK ZDUUDQW  $ONLUH ZDV DUUHVWHG RQ FHUWLILFDWLRQ RQ 'HFHPEHU    LQ WKH 8QLWHG 6WDWHV sXO\     DQG UHOHDVHG RQ KLV RZQ UHFRJQL]DQFH RQ 'LVWULFW &RXUW IRU WKH 1RUWKHUQ 'LVWULFW RI 2KLR DOOHJLQJ sXO\     7KH ERQG QRWLFH VHW D KHDULQJ GDWH RI YLRODWLRQV RI KLV FRQVWLWXWLRQDO ULJKWV IRU WKH H[WHQGHG $XJXVW WRDQVZHUWKHFKDUJHVRImFRQWHPSWRIFRXUW ZDUUDQWOHVVGHWHQWLRQDQGGHEWUHODWHGLPSULVRQPHQW$ONLUH QRQSD\PHQWRIFRVWVl  7KHERQGDOVRQRWHGWKDW$ONLUH ILOHGDQDPHQGHGFRPSODLQWRQsDQXDU\ $ONLUHILOHG PXVWSD\FRXUWFRVWVLQWKHDPRXQWRIE\WKHQH[W VXPPDU\ MXGJPHQW PRWLRQV DJDLQVW DOO WKH GHIHQGDQWV RQ FRXUWGDWH 'HFHPEHU     'HIHQGDQWV +ROPHV &RXQW\ +ROPHV &RXQW\&RXUWDQG6KHULII=LPPHUO\ILOHGVXPPDU\MXGJPHQW $ONLUHVHQWDOHWWHUGDWHG$XJXVW ZKLFKH[SODLQHG PRWLRQV RQ 'HFHPEHU     s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sXQH   RUGHU DFFHSWLQJ WKH VWLSXODWLRQRIVHWWOHPHQWWKHGLVWULFWFRXUWGLVPLVVHGDOOWKH $ONLUH DJDLQ IDLOHG WR DSSHDU DW WKH $XJXVW    SHQGLQJPRWLRQVZLWKRXWSUHMXGLFHWRWKHLUEHLQJUHVXEPLWWHG KHDULQJ  sXGJH ,UYLQJ DJDLQ KHOG $ONLUH LQ FRQWHPSW DQG WR UHIOHFW WKH VHWWOHPHQW EHWZHHQ WKH SDUWLHV  7KH FODVV LVVXHGDWKLUGEHQFKZDUUDQWIRUmIDLOXUHWRREH\DSUHYLRXV FHUWLILFDWLRQ DQG VXPPDU\ MXGJPHQW PRWLRQV ZHUH RUGHURIWKLVFRXUWl+HZDVDUUHVWHGRQ2FWREHU RQ UHVXEPLWWHG EXW EHFDXVH WKH SDUWLHV PHUHO\ UHILOHG WKHLU WKHWKLUGZDUUDQW$WDKHDULQJRQWKHVDPHGD\KHZDVIRXQG LQLWLDOPRWLRQVWKH\GRQRWUHIOHFWWKHVHWWOHPHQWDVRUGHUHG JXLOW\ RI FRQWHPSW DQG RUGHUHG WR VHUYH WKLUW\ GD\V LQ WKH E\WKHGLVWULFWFRXUW +ROPHV &RXQW\ sDLO  7KHUH ZDV QR LQTXLU\ DW WKH KHDULQJ UHJDUGLQJKLVDELOLW\WRSD\$OVRQRFUHGLWZDVJLYHQWRZDUG 7KHGLVWULFWFRXUWGHQLHGWKHPRWLRQIRUFODVVFHUWLILFDWLRQ WKHPRQH\RZHGGXULQJWKLVSHULRGRILQFDUFHUDWLRQ RQ 6HSWHPEHU    2Q 1RYHPEHU   WKH FRXUW GHQLHG $ONLUHj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

GHIHQGDQWVj VXPPDU\ MXGJPHQW PRWLRQV  $ONLUH WLPHO\ PLVDSSOLHV WKH FRUUHFW OHJDO VWDQGDUG RU UHOLHV RQ FOHDUO\ DSSHDOHGWKHGLVWULFWFRXUWjVMXGJPHQWRQ'HFHPEHU HUURQHRXVILQGLQJVRIIDFWl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jVZDUUDQWOHVVGHWHQWLRQIRUQHDUO\VHYHQW\WZRKRXUV :HUHYLHZWKHGLVWULFWFRXUWjVRUGHUJUDQWLQJGHIHQGDQWVj  XQGHUWKH7KLUWHHQWKDQG)RXUWHHQWK$PHQGPHQWVIRUWKH DQGGHQ\LQJ$ONLUHj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sXGJH :H UHYLHZ D FODVV FHUWLILFDWLRQ GHFLVLRQ IRU DEXVH RI ,UYLQJKDYHEHHQVXHGLQWKHLURIILFLDOFDSDFLWLHVRQO\:KLOH GLVFUHWLRQ6SUDJXHY*HQ0RWRUV&RUS)G  m>S@HUVRQDOFDSDFLW\ VXLWV VHHN WR LPSRVH SHUVRQDO OLDELOLW\ WK&LU   HQEDQF $QDEXVHRIGLVFUHWLRQLVSUHVHQW XSRQDJRYHUQPHQWRIILFLDOIRUDFWLRQVKHWDNHVXQGHUFRORURI ZKHQ WKH GLVWULFW FRXUW mDSSOLHV WKH ZURQJ OHJDO VWDQGDUG VWDWHODZlLQGLYLGXDOVVXHGLQWKHLURIILFLDOFDSDFLWLHVVWDQG LQWKHVKRHVRIWKHHQWLW\WKH\UHSUHVHQW.HQWXFN\Y*UDKDP 86     FLWLQJ0RQHOOY1HZ<RUN&LW\  'HS WRI6RF6HUYV86 Q    2IILFLDO $ONLUH LV DSSHDOLQJ ERWK WKH JUDQW RI GHIHQGDQWVj VXPPDU\ MXGJPHQW FDSDFLW\VXLWVUHSUHVHQWRQO\DQRWKHUZD\RISOHDGLQJDQ PRWLRQV DQG WKH GHQLDO RI KLV VXPPDU\ MXGJPHQW PRWLRQ 7KH GHQLDO RI DFWLRQDJDLQVWDQHQWLW\RIZKLFKDQRIILFHULVDQDJHQW VXPPDU\ MXGJPHQW LV XVXDOO\ FRQVLGHUHG DQ LQWHUORFXWRU\ RUGHU QRW D 0DWWKHZVYsRQHV)G  WK&LU   $ VXLW DJDLQVW DQ LQGLYLGXDO LQ KLV RIILFLDO FDSDFLW\ LV WKH ILQDO MXGJPHQW 3KHOSV Y &R\  )G     WK &LU  FLWLQJ

sRKQVRQ Y sRQHV  86      7KXV XQGHU  86&

†      ZKLFK JUDQWV DSSHOODWH MXULVGLFWLRQ RYHU ILQDO MXGJPHQWV HTXLYDOHQWRIDVXLWDJDLQVWWKHJRYHUQPHQWDOHQWLW\ $V RQO\ WKLV &RXUW XVXDOO\ GRHV QRW DFFHSW DSSHDOV ZKHUH VXPPDU\ MXGJPHQW ORQJ DV WKH JRYHUQPHQWDO HQWLW\ UHFHLYHV QRWLFH DQG DQ ZDV GHQLHG ,G m+RZHYHU ZKHQ WKH DSSHDO IURP D GHQLDO RI VXPPDU\ RSSRUWXQLW\ WR UHVSRQG DQ RIILFLDOFDSDFLW\ VXLW mLPSRVHV MXGJPHQW LV SUHVHQWHG WRJHWKHU ZLWK DQ DSSHDO IURP D JUDQW RI VXPPDU\ OLDELOLW\RQWKHHQWLW\WKDWKHUHSUHVHQWVl%UDQGRQY+ROW MXGJPHQW ZH KDYH MXULVGLFWLRQ WR UHYLHZ

7KRPDV Y 8QLWHG 6WDWHV WKH DSSURSULDWHQHVV RI WKH   86      *UDKDP  86 DW  7KXVZKLOHDQDZDUGRIGDPDJHVDJDLQVWDQRIILFLDOLQKLV GLVWULFW FRXUW V GHQLDOl  )G   WK

&LU   7KH GHQLDO RI VXPPDU\ MXGJPHQW EDVHG SXUHO\ RQ OHJDO

JURXQGV LV UHYLHZHG GH QRYR ,G 1R $ONLUHY,UYLQJHWDO  $ONLUHY,UYLQJHWDO 1R

SHUVRQDOFDSDFLW\FDQEHH[HFXWHGRQO\DJDLQVWWKHRIILFLDO V $PHQGPHQW TXHVWLRQ KHUH LV ZKHWKHU WKH +ROPHV &RXQW\ SHUVRQDODVVHWVDSODLQWLIIVHHNLQJWRUHFRYHURQDGDPDJHV &RXUW ZKLFK LV UHVSRQVLEOH IRU WKH SROLFLHV RI LWV &OHUNjV MXGJPHQW LQ DQ RIILFLDOFDSDFLW\ VXLW PXVW ORRN WR WKH 2IILFHDQGsXGJH,UYLQJVKRXOGEHFRQVLGHUHGDQmDUPRIWKH JRYHUQPHQWHQWLW\LWVHOI 7KHUHIRUH+ROPHV&RXQW\DVWKH VWDWHlDQGWKXVYHVWHGZLWKVRYHUHLJQLPPXQLW\:HGRQRW JRYHUQPHQWHQWLW\WKDWHPSOR\HG6KHULII=LPPHUO\DQGWKH ZULWH RQ DEODQNVODWH6HYHUDO\HDUVDJRZHKHOGWKDWDQ +ROPHV &RXQW\ &RXUW DV WKH JRYHUQPHQW HQWLW\ WKDW 2KLR FRXUW RI FRPPRQ SOHDV ZDV DQ DUP RI WKH VWDWH IRU HPSOR\HGsXGJH,UYLQJDUHWKHRQO\WUXHGHIHQGDQWVLQWKLV (OHYHQWK$PHQGPHQWSXUSRVHV6HH0XPIRUGY%DVLQVNL FDVH6HH$OOHQY/HLV)6XSSG  6'  )G   WK &LU  FHUW GHQLHG  86  2KLR    VHHDOVR)RVWHUY:DOVK)G WK&LU    KROGLQJ WKDW DQ 2KLR PXQLFLSDO FRXUW FRXOG QRW EH $GGLWLRQDOO\DVDUHVXOWRIEHLQJVXHGRQO\LQWKHLURIILFLDO VXHGXQGHU† EHFDXVHLWZDVQRWDmSHUVRQlDV†  FDSDFLWLHV6KHULII=LPPHUO\DQGsXGJH,UYLQJFDQQRWFODLP XVHV WKDW WHUP   7KLV FDVH LV IDFWXDOO\ YHU\ VLPLODU WR DQ\SHUVRQDOLPPXQLWLHVVXFKDVTXDVLMXGLFLDORUTXDOLILHG 0XPIRUGH[FHSWWKDWLWLQYROYHVDQ2KLRFRXQW\FRXUWUDWKHU LPPXQLW\ WR ZKLFK WKH\ PLJKW EH HQWLWOHG LI VXHG LQ WKHLU WKDQ D FRXUW RI FRPPRQ SOHDV  :KHWKHU WKLV GLIIHUHQFH LV LQGLYLGXDORUSHUVRQDOFDSDFLWLHV*UDKDP86DW PDWHULDOLVDTXHVWLRQZHQHHGQRWUHDFKKHUHIRUWKH6XSUHPH m7KH RQO\ LPPXQLWLHV WKDW FDQ EH FODLPHG LQ DQ RIILFLDO &RXUW KDV WDNHQ DSDUW WKH IRXQGDWLRQ RI RXU GHFLVLRQ LQ FDSDFLW\ DFWLRQ DUH IRUPV RI VRYHUHLJQ LPPXQLW\ WKDW WKH 0XPIRUGVLQFHLWZDVGHFLGHG HQWLW\ TXD HQWLW\ PD\ SRVVHVV VXFK DV WKH (OHYHQWK $PHQGPHQWl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m7KHEDURIWKH(OHYHQWK$PHQGPHQWWRVXLWLQ FKDUJH RI WKH FRXUWV RI FRPPRQ SOHDV ZH KHOG WKDW WKH\ )HGHUDO FRXUWV H[WHQGV WR 6WDWHV DQG VWDWH RIILFLDOV LQ VKRXOG EH FRQVLGHUHG DUPV RI WKH VWDWH IRU (OHYHQWK DSSURSULDWHFLUFXPVWDQFHVEXWGRHVQRWH[WHQGWRFRXQWLHV $PHQGPHQWSXUSRVHV DQG VLPLODU PXQLFLSDO FRUSRUDWLRQVl   7KH RQO\ (OHYHQWK 7KHSUREOHPZLWKUHO\LQJQRZRQWKHGHFLVLRQZHPDGHLQ 0XPIRUG LV WKDW ZH QRZKHUH DGGUHVVHG WKH LVVXH RI ZKR  $OWKRXJK $ONLUH GLG QRW VSHFLILFDOO\ VWDWH WKDW KH ZDV DSSHDOLQJ WKH ZRXOG SD\ IRU D GDPDJH MXGJPHQW DJDLQVW WKH FRXUW RI JUDQW RI VXPPDU\ MXGJPHQW WR WKH +ROPHV &RXQW\ &RXUW KLV EULHIV FRPPRQSOHDV7KH6XSUHPH&RXUWKDVQRZH[SOLFLWO\WROG GLVFXVV DW JUHDW OHQJWK WKH ZURQJGRLQJV RI WKH +ROPHV &RXQW\ &RXUW XV WKDW WKLV LV WKH PRVW LPSRUWDQW IDFWRU EHDULQJ RQ WKH &OHUNjV 2IILFH ZKLFK LV SDUW RI WKH +ROPHV &RXQW\ &RXUW $ONLUH VHHNV (OHYHQWK$PHQGPHQWTXHVWLRQ6HH5HJHQWVRIWKH8QLYRI WR SKUDVH WKHVH ZURQJGRLQJV DV WKH ZURQJGRLQJV RI +ROPHV &RXQW\ EXW &DO Y 'RH   86      VWDWLQJ mWKDW WKH LW LV FOHDU WKDW WKH &OHUNjV 2IILFH DV ZHOO DV WKH sXGJH DUH DJHQWV RI WKH +ROPHV &RXQW\ &RXUW 6LQFH $ONLUH GLVFXVVHG KLV FODLPV DJDLQVW WKH TXHVWLRQ ZKHWKHU D PRQH\ MXGJPHQW DJDLQVW D VWDWH &OHUNjV 2IILFH LQ KLV DSSHOODWH EULHIV DQG VLQFH WKH &OHUNjV 2IILFH LV SDUW LQVWUXPHQWDOLW\RURIILFLDOZRXOGEHHQIRUFHDEOHDJDLQVWWKH RI WKH &RXQW\ &RXUW ZH KROG WKDW $ONLUH KDV SURSHUO\ DSSHDOHG KLV FODLPV 6WDWHLVRIFRQVLGHUDEOHLPSRUWDQFHWRDQ\HYDOXDWLRQRIWKH DJDLQVW WKH &RXQW\ &RXUW DQG ZH ZLOO FRQVLGHU WKHP LQ IXOO 1R $ONLUHY,UYLQJHWDO   $ONLUHY,UYLQJHWDO 1R

UHODWLRQVKLS EHWZHHQ WKH 6WDWH DQG WKH HQWLW\ RU LQGLYLGXDO $V H[SODLQHG DERYH WKH ILUVW DQG PRVW LPSRUWDQW IDFWRU EHLQJVXHGl +HVVY3RUW$XWKRULW\7UDQV+XGVRQ&RUS XQGHU+HVVLVZKHWKHUWKHVWDWHZRXOGEHOHJDOO\OLDEOHIRUD 86    UHFRJQL]LQJmWKHYXOQHUDELOLW\RIWKH MXGJPHQWDJDLQVWWKH+ROPHV&RXQW\&RXUW+HVV86 6WDWHjV SXUVH DV WKH PRVW VDOLHQW IDFWRU LQ (OHYHQWK DW 'RH 86DW.  2WKHUIDFWRUVUHOHYDQWWRWKH $PHQGPHQWGHWHUPLQDWLRQVl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m>Z@KHWKHUZHYLHZDVGLVSRVLWLYH+HVVjV WKHHQWLW\DVDQDUPRIWKHVWDWH6HH9RJWY%GRI&RPPjUV HPSKDVLVRQWKH6WDWHWUHDVXU\RU>MXVW@LQWHUSUHWLWDVSODFLQJ RI2UOHDQV/HYHH'LVW )G  WK&LU FHUW VLJQLILFDQWZHLJKWRQRQHIDFWRURIDPXOWLIDFWRUWHVWl  GHQLHG  6 &W    )UHVHQLXV 0HG &DUH &DUGLRYDVFXODU 5HV ,QF Y 3XHUWR 5LFR  &DUULEHDQ ,WLVSODLQWKHQWKDWWKHUHDVRQLQJLQ0XPIRUGLIQRWWKH &DUGLRYDVFXODU &WU &RUS  )G   Q VW &LU UHVXOW LV QRZ LQFRUUHFW LQ OLJKW RI WKH 6XSUHPH &RXUWjV  6HFRQGFRXUWVKDYHUHYLHZHGWKHGHJUHHRIDXWRQRP\ GHFLVLRQLQ+HVVLWVUHDIILUPDWLRQRI+HVVLQ'RHDQGRXU WKDWWKHHQWLW\KDVRUSXWDQRWKHUZD\WKHDPRXQWRIFRQWURO GHFLVLRQ LQ %URWKHUWRQ  :H PXVW WKHUHIRUH LQGHSHQGHQWO\ WKHVWDWHZLHOGVRYHUWKHHQWLW\6HH9RJW )GDW DQDO\]H ZKHWKHU WKH +ROPHV &RXQW\ &RXUW VKRXOG EH ,QGHS(QWHUV,QF)GDW5HODWHGO\LWPLJKWEH FRQVLGHUHG DQ DUP RI WKH VWDWH IRU (OHYHQWK $PHQGPHQW XVHIXOWRORRNWRZKHWKHUWKHDJHQF\FDQVXHRUEHVXHGLQLWV SXUSRVHV

QRW LPPXQH IURP VXLW XQGHU WKH (OHYHQWK $PHQGPHQW WKDW RIILFLDO RU  $ UHODWHG TXHVWLRQ WKDW WKH GLVWULFW FRXUW PD\ QHHG WR FRQVLGHU LV HQWLW\LV D µSHUVRQj VXEMHFW WR VXLW XQGHU †  l  FHUW GHQLHG   86 ZKHWKHU WKH +ROPHV &RXQW\ &RXUW LV D mSHUVRQl IRU SXUSRVHV RI †       ZLWK ,QGHS (QWHUV ,QF Y 3LWWVEXUJK :DWHU 6HZHU $XWK  $OWKRXJK ZH KHOG LQ )RVWHU WKDW D VWDWH FRXUW ZDV QRW D SHUVRQ IRU  )G   G &LU   VWDWLQJ WKDW m0RQHOO DQG :LOO SXUSRVHV RI †   )RVWHU Y :DOVK  )G   WK &LU    HVWDEOLVK WKDW WKH PRVW LPSRUWDQW LQTXLU\ LQ GHWHUPLQLQJ ZKHWKHU D ZH EHOLHYH WKDW WKLV KROGLQJ KDV DOVR EHHQ XQGHUPLQHG E\ WKH UHFHQW JRYHUQPHQWDO HQWLW\ LV D µSHUVRQj ZLWKLQ WKH PHDQLQJ RI †   LV ZKHWKHU 6XSUHPH &RXUW GHFLVLRQV DGGUHVVLQJ VRYHUHLJQ LPPXQLW\ WKDW ZHUH WKH HQWLW\ LV DQ µDUP>@ RI WKH 6WDWHj IRU (OHYHQWK $PHQGPHQW SXUSRVHVl GLVFXVVHG DERYHoDV WKH LVVXHV RI VRYHUHLJQ LPPXQLW\ DQG SHUVRQKRRG VRPH LQWHUQDO TXRWDWLRQ PDUNV RPLWWHG  XQGHU †   DUH FRQFHSWXDOO\ UHODWHG DV ZH GLVFXVV EHORZ  :H ILQG LW SUXGHQW WR XQGHUWDNH DQ DQDO\VLV VLPLODU WR WKH 6XSUHPH 2I FRXUVH LQVRIDU DV +ROPHV &RXQW\ &RXUW LV DQ DUP RI WKH 6WDWH RI &RXUWjV DQDO\VLV LQ :LOO WR GHWHUPLQH ZKHWKHU DQ HQWLW\ VXFK DV WKH 2KLR HQWLWOHG WR VRYHUHLJQ LPPXQLW\ LW LV QRW D mSHUVRQl IRU SXUSRVHV RI +ROPHV &RXQW\ &RXUW LV mSHUVRQl XQGHU †   ,Q :LOO LQ GHWHUPLQLQJ †   6HH :LOO Y 0LFK 'HSjW RI 6WDWH 3ROLFH   86     WKDW D 6WDWH LV QRW D mSHUVRQl IRU SXUSRVHV RI †   WKH 6XSUHPH &RXUW +RZHYHU LI +ROPHV &RXQW\ &RXUW LV QRW HQWLWOHG WR VRYHUHLJQ LPPXQLW\ ORRNHG DW  WKH ODQJXDJH RI †   DV ZHOO DV LWV OHJLVODWLYH KLVWRU\ DQG LW ZLOO EH QHFHVVDU\ RQ UHPDQG WR XQGHUWDNH DQ LQGHSHQGHQW GHWHUPLQDWLRQ SXUSRVH  WKH FRPPRQ XVDJH RI WKH WHUP mSHUVRQl DQG  ZKHWKHU WKH RI ZKHWKHU +ROPHV &RXQW\ &RXUW LV D mSHUVRQl XQGHU †   7KH HQWLW\ LQ TXHVWLRQ WKHUH D 6WDWH ZDV HQWLWOHG WR FRPPRQ ODZ LPPXQLWLHV 6XSUHPH &RXUWjV KROGLQJ LQ :LOO LPSOLFLWO\ VXJJHVWV WKDW WKRVH HQWLWLHV WKDW VXFK DV VRYHUHLJQ LPPXQLW\   86 DW  7KH VFRSH RI WKH DUH QRW DUPV RI WKH 6WDWH VKRXOG JHQHUDOO\ EH FRQVLGHUHG mSHUVRQVl IRU (OHYHQWK $PHQGPHQW LV DQ LPSRUWDQW DOWKRXJK SHUKDSV QRW WKH RQO\ SXUSRVHV RI †   2XU VLVWHU FLUFXLWV KDYH GLVDJUHHG RYHU WKH H[WHQW WR FRQVLGHUDWLRQ ,G DW  6KRXOG WKH QHHG WR GHFLGH WKLV LVVXH DULVH ZH ZKLFK WKH DQDO\VHV RI VRYHUHLJQ LPPXQLW\ DQG ZKHWKHU DQ HQWLW\ LV D OHDYH WKH DQDO\VLV WR WKH VRXQG MXGJPHQW RI WKH GLVWULFW FRXUW IRU DQ LQLWLDO mSHUVRQl IRU †   SXUSRVHV DUH FRH[WHQVLYH &RPSDUH +DUWHU Y GHWHUPLQDWLRQ 9HUQRQ  )G   Q WK &LU   m,I DQ RIILFLDO RU HQWLW\ LV 1R $ONLUHY,UYLQJHWDO   $ONLUHY,UYLQJHWDO 1R

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†    7R VWDWH D †   FODLP $ONLUH PXVW KDYHEHHQGHHPHGLPSRUWDQWE\RWKHUFRXUWV:HPHQWLRQ HVWDEOLVK D  GHSULYDWLRQ RI D ULJKW VHFXUHG XQGHU WKH WKHVHIDFWRUVWRJXLGHWKHGLVWULFWFRXUWj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mIDLUDQG RQ WKH PRVW LPSRUWDQW SRLQW o ZKR LV UHVSRQVLEOH IRU D UHOLDEOH GHWHUPLQDWLRQ RI SUREDEOH FDXVHl ZKLFK PXVW EH PRQHWDU\MXGJPHQWDJDLQVWWKH+ROPHV&RXQW\&RXUWoDVLW PDGHSURPSWO\DIWHUDZDUUDQWOHVVDUUHVW*HUVWHLQY3XJK ZDVQRWEULHIHGE\WKHSDUWLHVZKRDVVXPHG0XPIRUGZDV  86       $ MXGLFLDO GHWHUPLQDWLRQ RI ELQGLQJSUHFHGHQW$VZHVKDOOKROGWKDWDUHPDQGLVLQRUGHU SUREDEOHFDXVHZLWKLQIRUW\HLJKWKRXUVRIDUUHVWmZLOODVD LQDQ\HYHQWZHFKRRVHWRUHPDQGWKLVLVVXHWRWKHGLVWULFW JHQHUDOPDWWHUFRPSO\ZLWKWKHSURPSWQHVVUHTXLUHPHQWRI FRXUW7KHGLVWULFWFRXUWFDQPDNHWKHLQLWLDOGHWHUPLQDWLRQ *HUVWHLQl&RXQW\RI5LYHUVLGHY0F/DXJKOLQ86 ZKHWKHU2KLRZRXOGEHOHJDOO\OLDEOHIRUDMXGJPHQWDJDLQVW    ,IWKHSUREDEOHFDXVHKHDULQJLVQRWKHOGZLWKLQ WKH +ROPHV &RXQW\ &RXUW DV ZHOO DV DQ HYDOXDWLRQ RI WKH IRUW\HLJKW KRXUV WKH EXUGHQ VKLIWV WR WKH JRYHUQPHQW mWR RWKHUIDFWRUVWKDWPD\EHDURQZKHWKHUWKH+ROPHV&RXQW\ GHPRQVWUDWHWKHH[LVWHQFHRIDERQDILGHHPHUJHQF\RURWKHU &RXUWVKRXOGUHFHLYHVRYHUHLJQLPPXQLW\3XWWLQJWKHLVVXH H[WUDRUGLQDU\FLUFXPVWDQFHl,GDW7KH6XSUHPH&RXUW RIVRYHUHLJQLPPXQLW\WRWKHVLGHZHQRZFRQVLGHUWKHPHULWV VSHFLILFDOO\ PHQWLRQHG WKDW LQWHUYHQLQJ ZHHNHQGV GR QRW RI$ONLUHjVFODLPV FRXQWDVDQmH[WUDRUGLQDU\FLUFXPVWDQFHl,G2QWKHRWKHU KDQGLIWKHGHIHQGDQWLVKHOGRQDYDOLGZDUUDQWKHmLVQRW $ :KHWKHU WKH GLVWULFW FRXUW HUUHG LQ ILQGLQJ QR FRQVWLWXWLRQDOO\HQWLWOHGWRDVHSDUDWHMXGLFLDOGHWHUPLQDWLRQ YLRODWLRQRI$ONLUHjV)RXUWK$PHQGPHQWULJKWVQRWWR WKDW WKHUH LV SUREDEOH FDXVH WR GHWDLQ KLP SHQGLQJ WULDOl EHKHOGIRUVHYHQW\WZRKRXUVRQDZDUUDQWOHVVDUUHVW %DNHUY0F&ROODQ86    $ONLUHDUJXHVWKDWWKHGLVWULFWFRXUWHUUHGDVDPDWWHURIODZ $ONLUHDUJXHVKHZDVEHLQJKHOGRQWKHZDUUDQWOHVV':, E\QRWJUDQWLQJKLVVXPPDU\MXGJPHQWPRWLRQWKDW+ROPHV DUUHVW'HIHQGDQWVDUJXHKHZDVEHLQJKHOGRQWKHZDUUDQW &RXQW\DQG6KHULII=LPPHUO\ZHUHOLDEOHXQGHU† IRU IURPDQRWKHUMXULVGLFWLRQ,I$ONLUHLVFRUUHFWWKHQKLV)RXUWK YLRODWLQJKLV)RXUWK$PHQGPHQWULJKWDJDLQVWEHLQJGHWDLQHG $PHQGPHQWULJKWVZHUHYLRODWHGEHFDXVHKHZDVHQWLWOHGWR ZLWKRXWDSURPSWSUREDEOHFDXVHGHWHUPLQDWLRQ D SUREDEOH FDXVH KHDULQJ ZLWKLQ IRUW\HLJKW KRXUV LQ WKH DEVHQFH RI DQ mH[WUDRUGLQDU\ FLUFXPVWDQFHl WR H[SODLQ WKH 7LWOH86&† SURYLGHVWKDW GHOD\  7KHUH LV QRW HYHQ D KLQW RI DQ mH[WUDRUGLQDU\ 1R $ONLUHY,UYLQJHWDO   $ONLUHY,UYLQJHWDO 1R

FLUFXPVWDQFHl WR EH IRXQG LQ WKH UHFRUG  +RZHYHU LI (OHYHQWK$PHQGPHQW%URWKHUWRQ)GDW8QOLNH GHIHQGDQWVDUHFRUUHFWWKHQKROGLQJ$ONLUHQHDUO\VHYHQW\WZR VWDWHV KRZHYHU ORFDO JRYHUQPHQWV PXQLFLSDOLWLHV DQG KRXUVZKLOHTXHVWLRQDEOHGRHVQRWDXWRPDWLFDOO\YLRODWHKLV FRXQWLHVDUHFRQVLGHUHGSHUVRQVZLWKLQWKHPHDQLQJRI )RXUWK$PHQGPHQWULJKWV 86& †   DQG mPD\ EH VXHG IRU FRQVWLWXWLRQDO GHSULYDWLRQVl0RQHOO86DW  +HUH+ROPHV (YHQDIWHUFDUHIXOUHYLHZRIWKHUHFRUGLWLVXQFOHDUDVWR &RXQW\ LV QRW LPPXQH IURP VXLW XQGHU WKH (OHYHQWK ZKLFKSDUW\LVFRUUHFWDERXWWKHJURXQGVXSRQZKLFK$ONLUH $PHQGPHQW ZDVRULJLQDOO\GHWDLQHG$ONLUHDVVHUWVWKDW+ROPHV&RXQW\ UHFRUGVGHPRQVWUDWHWKDWKHZDVKHOGRQWKH':,DUUHVWDQG 'HVSLWH EHLQJ mSHUVRQVl IRU WKH SXUSRVHV RI †   KHSRLQWVWRWZRGRFXPHQWVLQVXSSRUW7KHILUVWDSSHDUVWR PXQLFLSDOLWLHV DUH QRW mOLDEOH IRU HYHU\ PLVGHHG RI WKHLU EH D +ROPHV &RXQW\ sDLO ERRNLQJ IRUP ZKLFK VWDWHG WKDW HPSOR\HHVDQGDJHQWVl*DUQHUY0HPSKLV3ROLFH'HSjW $ONLUHZDVmEHLQJKHOGIRUFRXUWlUDWKHUWKDQRQDZDUUDQW )G WK&LU  m,QVWHDGLWLVZKHQH[HFXWLRQ IURPDQRWKHUMXULVGLFWLRQ7KHVHFRQGLVDKROGHUIURPWKH RI D JRYHUQPHQWjV SROLF\ RU FXVWRP ZKHWKHU PDGH E\ LWV &RSOH\ 3ROLFH 'HSDUWPHQW ZKLFK VWDWHG WKDW WKH\ KDG DQ ODZPDNHUVRUE\WKRVHZKRVHHGLFWVRUDFWVPD\IDLUO\EHVDLG DFWLYHZDUUDQWRQ$ONLUHDQGZRXOGEHZLOOLQJWRSLFNKLPXS WR UHSUHVHQW RIILFLDO SROLF\ LQIOLFWV WKH LQMXU\ WKDW WKH DIWHU+ROPHV&RXQW\UHOHDVHGKLP7KHQRWDEOHWKLQJDERXW JRYHUQPHQW DV DQ HQWLW\ LV UHVSRQVLEOH XQGHU †  l WKHKROGHULVWKDWLWLVGDWHG0D\ ZKLFKFRLQFLGHV 0RQHOO  86 DW    7KXV IRU $ONLUH WR GHPRQVWUDWH ZLWK $ONLUHjV ILUVW WKLUW\GD\ LQFDUFHUDWLRQ QRW KLV LQLWLDO PXQLFLSDOOLDELOLW\KHPXVW  LGHQWLI\WKHPXQLFLSDOSROLF\ DUUHVWRQ$XJXVW  7KHGHIHQGDQWVFRXQWHUE\FLWLQJ RU FXVWRP   FRQQHFW WKH SROLF\ WR WKH PXQLFLSDOLW\ DQG 6KHULII=LPPHUO\jVDIILGDYLWZKHUHKHVWDWHVWKDWWKH6WDWH   VKRZ WKDW KLV SDUWLFXODU LQMXU\ ZDV LQFXUUHG GXH WR +LJKZD\ 3DWURO GLVFRYHUHG WKH RXWVWDQGLQJ ZDUUDQW IURP H[HFXWLRQRIWKDWSROLF\*DUQHU)GDW:KHUHD DQRWKHUMXULVGLFWLRQDWWKHWLPHRI$ONLUHjVDUUHVW+RZHYHU JRYHUQPHQW mFXVWRP KDV QRW UHFHLYHG IRUPDO DSSURYDO 6KHULII=LPPHUO\jVVWDWHPHQWIDOOVVKRUWRIVWDWLQJ WKDWWKH WKURXJKWKHERG\jVRIILFLDOGHFLVLRQPDNLQJFKDQQHOVlVXFKD ZDUUDQWUDWKHUWKDQ WKH':,DUUHVWZDVWKHUHDVRQ$ONLUH FXVWRPPD\VWLOOEHWKHVXEMHFWRID† VXLW0RQHOO ZDVGHWDLQHGVHYHQW\WZRKRXUV7KLVGLVSXWHEHWZHHQWKH 86DW   SDUWLHV FRQVWLWXWHV D PDWHULDO IDFWXDO GLVSXWH ZKLFK LV LQDSSURSULDWHIRUUHVROXWLRQRQVXPPDU\MXGJPHQW $V IRU WKH ILUVW SURQJ DFFRUGLQJ WR 3DPHOD $WNLQV D &RUUHFWLRQV/LHXWHQDQWDWWKH+ROPHV&RXQW\sDLOSULRUWR $SSO\LQJWKHVHFRQGSDUWRIWKHWHVWIRUD† FODLPZH  WKHMDLOjVSROLF\RUFXVWRPZDVWRUHOHDVHSHRSOHRYHUWKH PXVWH[DPLQHZKHWKHUWKHSRVVLEOHGHSULYDWLRQRI$ONLUHj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jV PRWLRQ IRU FODVV FHUWLILFDWLRQ GHSRVLWLRQWKDWm>R@EYLRXVO\ZHFDQjWFDOO>WKH&OHUNjV2IILFH@ ILOHG LQ WKH GLVWULFW FRXUW 1R $ONLUHY,UYLQJHWDO   $ONLUHY,UYLQJHWDO 1R

RYHUWKHZHHNHQGl7KXVWKHUHFRUGUHIOHFWVWKDWDIWHU  SURFHHGLQJVWRGHWHUPLQHZKHWKHU$ONLUHZDVEHLQJKHOGRQ DQ\ ZDUUDQWOHVV DUUHVW IURP ODWH DIWHUQRRQ )ULGD\ WKURXJK WKHDUUHVWZDUUDQWRUWKH':,DUUHVW 6XQGD\ PRUQLQJ ZKHUH WKH GHIHQGDQW GLG QRW SRVW ERQG ZRXOGYHU\OLNHO\UXQDIRXORIWKHIRUW\HLJKWKRXUWLPHOLPLW % :KHWKHU WKH GLVWULFW FRXUW HUUHG LQ ILQGLQJ QR HVWDEOLVKHG LQ5LYHUVLGH7KHVHSROLFLHVRUFXVWRPVRIWKH YLRODWLRQRI$ONLUHjV7KLUWHHQWK$PHQGPHQWULJKWQRW +ROPHV&RXQW\sDLODUHWKHYHU\VRUWRImSROLF\RUFXVWRPl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†   IRU YLRODWLQJ KLV FXVWRPRIKROGLQJDUUHVWHHVZKRFRXOGQRWSRVWERQGXQWLO 7KLUWHHQWK$PHQGPHQWULJKWQRWWREHLPSULVRQHGIRUDFLYLO WKHLULQLWLDODSSHDUDQFHZDVLPSOHPHQWHGE\6KHULII=LPPHUO\ LQ %HFDXVHKHZDVVXHG LQ KLVRIILFLDOFDSDFLW\KLV DFWLRQVDUHDWWULEXWDEOHWRWKHFRXQW\  7KH &RXUW QRWHV WKDW ZKLOH QHLWKHU SDUW\ UDLVHG WKH LVVXH $ONLUHjV †   VXLW FRXOG EH EDUUHG XQGHU +HFN Y +XPSKUH\  86  )LQDOO\UHJDUGLQJWKHWKLUGSURQJEHFDXVHWKHUHLVDSROLF\    ,Q +HFN WKH 6XSUHPH &RXUW KHOG WKDW WKDWLVDWWULEXWDEOHWRWKH&RXQW\LWZDVFOHDUO\UHVSRQVLEOHIRU $ONLUHjV GHWHQWLRQ EH\RQG WKH IRUW\HLJKW KRXU WKUHVKROG >7@R UHFRYHU GDPDJHV IRU >DQ@ DOOHJHGO\ XQFRQVWLWXWLRQDO 3ULRUWR 6KHULII=LPPHUO\ZRXOGKDYHUHOHDVHG$ONLUH FRQYLFWLRQ RU LPSULVRQPHQW RU IRU RWKHU KDUP FDXVHG E\ DFWLRQV

IRUWKHZHHNHQGDQGVLPSO\KRSHGWKDWKHDSSHDUHGIRUKLV ZKRVH XQODZIXOQHVV ZRXOG UHQGHU D FRQYLFWLRQ RU VHQWHQFH LQYDOLG D †   SODLQWLII PXVW SURYH WKDW WKH FRQYLFWLRQ RU FRXUWGDWH7KHSROLF\RIKROGLQJDUUHVWHHVRYHUWKHZHHNHQG VHQWHQFH KDV EHHQ UHYHUVHG RQ GLUHFW DSSHDO H[SXQJHG E\ ZDV WKH PRYLQJ IRUFH EHKLQG WKH YLRODWLRQ RI $ONLUHjV H[HFXWLYH RUGHU GHFODUHG LQYDOLG E\ D VWDWH WULEXQDO DXWKRUL]HG FRQVWLWXWLRQDOULJKWVDVVXPLQJKHZDVEHLQJKHOGRQWKHDUUHVW WR PDNH VXFK GHWHUPLQDWLRQ RU FDOOHG LQWR TXHVWLRQ E\ D IHGHUDO DQGQRWWKHZDUUDQW FRXUWjV LVVXDQFH RI D ZULW RI KDEHDV FRUSXV  86& † 

+HFN  86 DW    IRRWQRWH RPLWWHG  7KXV WR WKH H[WHQW 7KHUHIRUH WKH GLVWULFW FRXUWjV GLVPLVVDO RQ WKLV LVVXH LV WKDW $ONLUH LV VHHNLQJ PRQHWDU\ GDPDJHV WKDW ZRXOG LQYDOLGDWH WKH UHYHUVHG%HFDXVHWKHUHDUHJHQXLQHLVVXHVRIPDWHULDOIDFW XQGHUO\LQJ FRQYLFWLRQ KLV VXLW LV EDUUHG FRQFHUQLQJ$ONLUHjV)RXUWK$PHQGPHQWFODLPKRZHYHUWKH $V IRU $ONLUHjV ILUVW FODLP +HFN GRHV QRW DSSO\ +H LV QRW GLVWULFW FRXUWjV GHQLDO RI $ONLUHjV PRWLRQ IRU VXPPDU\ FKDOOHQJLQJ WKH XQGHUO\LQJ FRQYLFWLRQ IRU GULYLQJ ZKLOH LQWR[LFDWHG MXGJPHQW LV DIILUPHG  7KLV FDVH LV UHPDQGHG IRU IXUWKHU 5DWKHU KH LV VHHNLQJ PRQHWDU\ GDPDJHV IRU D FRQVWLWXWLRQDO YLRODWLRQ XQUHODWHG WR KLV XOWLPDWH FRQYLFWLRQ RI WKH VXEVWDQWLYH RIIHQVH $ONLUHjV VHFRQG FODLP LV PRUH SUREOHPDWLF ,W PD\ LPSOLFDWH +HFN EHFDXVH D ILQGLQJ WKDW $ONLUHjV 7KLUWHHQWK DQG )RXUWHHQWK DPHQGPHQW ULJKWV ZHUH

7R WKH H[WHQW $ONLUH LV FODLPLQJ WKH SROLFLHV RU FXVWRPV LQ TXHVWLRQ YLRODWHG PD\ QHFHVVDULO\ LPSO\ WKDW KLV FRQYLFWLRQ IRU FRQWHPSW ZDV DUH DWWULEXWDEOH WR WKH +ROPHV &RXQW\ &OHUNjV 2IILFH ZH UHMHFW $ONLUHjV LQYDOLG +RZHYHU LW ZRXOG OLNHO\ QRW LPSOLFDWH KLV FRQYLFWLRQ IRU GULYLQJ FODLP 7KHUH LV QR VXJJHVWLRQ LQ WKH UHFRUG WKDW HLWKHU sXGJH ,UYLQJ RU WKH ZKLOH LQWR[LFDWHG ZKLFK LV WKH RIIHQVH XQGHUO\LQJ WKLV HQWLUH SURFHHGLQJ +ROPHV &RXQW\ &OHUNjV 2IILFH KDG DQ\ LQYROYHPHQW LQ ZKHWKHU D GHWDLQHH $V IRU $ONLUHjV WKLUG FODLP ZH DIILUP WKH GLVWULFW FRXUWjV GLVPLVVDO VR ZDV KHOG RYHU WKH ZHHNHQG $OO RI WKH WHVWLPRQ\ LQ WKH UHFRUG VXSSRUWV WKHUH LV QR QHHG WR GLVFXVV WKH DSSOLFDELOLW\ RI +HFN $ONLUHjV DVVHUWLRQ WKDW 6KHULII =LPPHUO\ DQG WKHUHIRUH +ROPHV &RXQW\ :H GHFOLQH WR UXOH RQ ZKHWKHU +HFN DSSOLHV DW WKLV WLPH EHFDXVH WKH ZDV WKH SDUW\ UHVSRQVLEOH IRU WKH SROLF\ WR GHWDLQ GHIHQGDQWV RYHU SDUWLHV KDYH QRW KDG D FKDQFH WR VXEPLW EULHIV RQ WKH LVVXH ,QVWHDG WKH ZHHNHQGV GLVWULFW FRXUW PD\ FRQVLGHU WKH DSSOLFDELOLW\ RI +HFN XSRQ UHPDQG 1R $ONLUHY,UYLQJHWDO   $ONLUHY,UYLQJHWDO 1R

GHEWDQG)RXUWHHQWK$PHQGPHQWULJKWQRWWRORVHKLVOLEHUW\ LWLVGHVLJQHGWREHSXQLWLYHDQGmYLQGLFDWHWKHDXWKRULW\RIWKH GXHWRLQGLJHQF\$JDLQWRVWDWHD† FODLP$ONLUHPXVW FRXUWl HVWDEOLVK D  GHSULYDWLRQ RI D ULJKW VHFXUHG XQGHU WKH &RQVWLWXWLRQ RU IHGHUDO ODZ  DQG E  WKDW GHSULYDWLRQ ZDV 7KHUHDVRQWKDW$ONLUHZDVKHOGLQFRQWHPSWDQGOLNHZLVH FDXVHGE\DSHUVRQDFWLQJXQGHUFRORURIVWDWHODZ%URFN  WKH XQGHUO\LQJ UHDVRQ IRU KLV LPSULVRQPHQW LV JHQXLQHO\ )GDW GLVSXWHG7KLVGLVSXWHLVPDWHULDOWRWKHTXHVWLRQRIZKHWKHU $ONLUHjV FRQVWLWXWLRQDO ULJKWV ZHUH YLRODWHG  $ONLUH DUJXHV $VIRUWKHILUVWSURQJ RI WKHWHVWWKHFRQVWLWXWLRQDOULJKW WKDW KH ZDV KHOG LQ FRQWHPSW IRU IDLOLQJ WR SD\ KLV GHEW DJDLQVW LPSULVRQPHQW IRU IDLOXUH WR SD\ D GHEW LV ZHOO QDPHO\IRUIDLOLQJWRSD\FRXUWFRVWVDQGIHHVUHVXOWLQJIURP HVWDEOLVKHG XQGHU ERWK WKH 7KLUWHHQWK DQG )RXUWHHQWK KLV ':, FRQYLFWLRQ DV RUGHUHG  'HIHQGDQWV FRXQWHU WKDW $PHQGPHQWV  7KH 7KLUWHHQWK $PHQGPHQW SURKLELWV $ONLUHZDVLPSULVRQHGIRUIDLOLQJWRDSSHDULQFRXUWWRVKRZ mFRQGLWLRQ>V@LQZKLFKWKHYLFWLPLVFRHUFHGE\WKUHDWRIOHJDO FDXVHIRUKLVIDLOXUHWRSD\DVRUGHUHG VDQFWLRQWR ZRUN RIIDGHEWWRDPDVWHUl8QLWHG6WDWHVY .R]PLQVNL86     8QGHUWKH)RXUWHHQWK 7KHEHQFKZDUUDQWVDQGRUGHUVRI+ROPHV&RXQW\&RXUWDUH $PHQGPHQWD6WDWHPD\QRWmµLPSRV>H@DILQHDVDVHQWHQFH FRQIOLFWLQJ  )RU H[DPSOH WKH VKRZ FDXVH RUGHUV URXWLQHO\ DQG WKHQ DXWRPDWLFDOO\ FRQYHU>W@ LW LQWR D MDLO WHUP VROHO\ VWDWHGWKDW mIDLOXUHWRSD\LQIXOOEHIRUH>WKHKHDULQJGDWH@RU EHFDXVHWKHGHIHQGDQWLVLQGLJHQWDQGFDQQRWIRUWKZLWKSD\ WRDSSHDULQFRXUWRQVDLGGDWHZLOOUHVXOWLQDZDUUDQWIRU\RXU WKH ILQH LQ IXOOjl %HDUGHQ Y *HRUJLD  86   DUUHVWl  (DFK WLPH WKDW $ONLUH QHLWKHU SDLG QRU DSSHDUHG    FLWLQJ7DWHY6KRUW86    2IFRXUVH GHVSLWHVRPHWLPHVVHQGLQJDOHWWHURIH[SODQDWLRQDEHQFK WKH&RQVWLWXWLRQGRHVQRWmSUHFOXGHLPSULVRQPHQWIRUZLOOIXO ZDUUDQWZDVLVVXHGVWDWLQJODQJXDJHWRWKHHIIHFWWKDW m7KLV UHIXVDOWRSD\DILQHRUFRXUWFRVWVl%HDUGHQ86DW FDXVHFDPHRQIRUKHDULQJLQDPRWLRQWRKROG'HIHQGDQWLQ FLWLQJ:LOOLDPVY,OOLQRLV 86Q     FRQWHPSWIRUIDLOXUHWRREH\DSUHYLRXVRUGHURIWKLVFRXUW 7KXVmIXQGDPHQWDOIDLUQHVVlUHTXLUHVWKDWDFRXUWLQTXLUHLQWR 7KH'HIHQGDQWIDLOHGWRDSSHDUWKHUHIRUHDEHQFKZDUUDQWZLOO DQLQGLYLGXDOjVUHDVRQVIRUIDLOLQJWRSD\DILQHRUFRXUWVFRVWV LVVXHIRUGHIHQGDQWjVDUUHVWZLWKDERQGRIl7KH ,GDW,IWKHLQGLYLGXDOmZLOIXOO\UHIXVHGWRSD\RUIDLOHG ZDUUDQWRQZKLFK$ONLUHZDVDUUHVWHGRQ0D\ VWDWHG WR PDNH VXIILFLHQW ERQD ILGH HIIRUWV OHJDOO\ WR DFTXLUH WKH WKDW $ONLUH KDG mIDLOHG WR FRPSO\ ZLWK D FRXUW RUGHUl UHVRXUFHVWRSD\lLPSULVRQPHQWLVMXVWLILHG,G2QWKHRWKHU 0RUHRYHUWKH0D\ MXGJPHQWRIFRQYLFWLRQVWDWHG KDQGLIWKHLQGLYLGXDOZDVVLPSO\XQDEOHWRSD\WKDWLVKH m7KH'HIHQGDQWLVRUGHUHGWRVHUYHGD\VLQWKH+ROPHV ZDV LQGLJHQW WKH FRXUW LV UHTXLUHG WR FRQVLGHU mDOWHUQDWH &RXQW\ sDLO KDYLQJ EHHQ IRXQG LQ FRQWHPSW RI &RXUW IRU PHDVXUHVRISXQLVKPHQWl,G IDLOLQJWRSD\DQ\ILQHRUFRVWV'HIHQGDQWPD\ZRUNRIIILQH FRVWVl7KXVWKLVJHQXLQHGLVSXWHDVWRZKHWKHU$ONLUHZDV ,QWKHSUHVHQWFDVHLWLVXQGLVSXWHGWKDWWKH+ROPHV&RXQW\ KHOG LQ FRQWHPSW RI FRXUW IRU IDLOXUH WR SD\ KLV GHEWV RU &RXUWWKURXJKWKH&OHUNjV2IILFHDQGs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

WR+ROPHV&RXQW\&RXUWm>$@ORFDOJRYHUQPHQWPD\QRWEH RIILQHVDQGFRXUWFRVWVsXGJH,UYLQJLVWKHRQO\MXGJHLQWKH VXHG XQGHU †   IRU DQ LQMXU\ LQIOLFWHG VROHO\ E\ LWV +ROPHV &RXQW\ &RXUW  6KH URXWLQHO\ RUGHUV SD\PHQWV RI HPSOR\HHVRUDJHQWVl UDWKHUDSODLQWLIIPXVWDOVRVKRZWKDW ILQHV DQG FRVWV ZLWKRXW PDNLQJ DQ\ GHWHUPLQDWLRQ DV WR WKHLQMXU\ZDVWKHUHVXOWRIWKHmH[HFXWLRQRIDJRYHUQPHQWjV ZKHWKHU WKH GHIHQGDQW LV DEOH WR SD\  7KH &OHUNjV 2IILFH SROLF\RUFXVWRPZKHWKHUPDGHE\LWVODZPDNHUVRUE\WKRVH FUHDWHVDSD\PHQWVFKHGXOHIRU HDFKGHIHQGDQW:KHQWKH ZKRVHHGLFWVRUDFWVPD\IDLUO\EHVDLGWRUHSUHVHQWRIILFLDO VFKHGXOH LV QRW FRPSOLHG ZLWK sXGJH ,UYLQJ DXWRPDWLFDOO\ SROLF\l0RQHOO86DW )XUWKHUDmSODLQWLIIPXVW RUGHUVWKDWFDXVHIRUVXFKIDLOXUHEHVKRZQ(YHQZKHUHDV DOVR GHPRQVWUDWH WKDW WKURXJK LWV GHOLEHUDWH FRQGXFW WKH KHUHDGHIHQGDQWVHQGVOHWWHUVH[SODLQLQJKLVLQDELOLW\WRSD\ PXQLFLSDOLW\ ZDV WKH µPRYLQJ IRUFHj EHKLQG WKH LQMXU\ RUDSSHDUsXGJH,UYLQJLVVXHVDEHQFKZDUUDQWFKDUJLQJWKH DOOHJHG 7KDW LV D SODLQWLII PXVW VKRZ WKDW WKH PXQLFLSDO GHIHQGDQWZLWKFRQWHPSWRIFRXUW7KHUHLVQRHYLGHQFHWKDW DFWLRQZDVWDNHQZLWKWKHUHTXLVLWHGHJUHHRIFXOSDELOLW\DQG VRPHRWKHURIILFLDORUERG\PDNHVSROLF\ZLWKUHVSHFWWRWKH PXVWGHPRQVWUDWHDGLUHFWFDXVDOOLQNEHWZHHQWKHPXQLFLSDO WUHDWPHQW RI ILQHV DQG FRVWV RUGHUHG SDLG E\ WKH +ROPHV DFWLRQDQGWKHGHSULYDWLRQRIIHGHUDOULJKWVl%GRI&RXQW\ &RXQW\&RXUW6HH2j%ULHQY&LW\RI*UDQG5DSLGV)G &RPPjUVRI%U\DQ&RXQW\2NODY%URZQ86   WK&LU   m$SODLQWLIILVQRWUHTXLUHGWR    DQWLFLSDWHWKHDUJXPHQWWKDWWKHH[SUHVVDSSURYDORISHUVRQV QHYHULGHQWLILHGDWWULDOZDVUHTXLUHGLQRUGHUWRPDNHWKH $ONLUH KDV SUHVHQWHG HYLGHQFH WKDW WKH +ROPHV &RXQW\ RSHUDWLYH SROLF\ WKH µRIILFLDOj SROLF\l   7KXV $ONLUH KDV &RXUW&OHUNjV2IILFHKDVDSROLF\RIUHTXLULQJSD\PHQWRIIHHV SURGXFHGVXIILFLHQWHYLGHQFHIRUDUHDVRQDEOHWULHURIIDFWWR DQGFRVWVZLWKLQ WZR\HDUVUHJDUGOHVVRIDELOLW\WRSD\,Q FRQFOXGHWKDWKLVFRQVWLWXWLRQDOULJKWVZHUHYLRODWHGE\WKH IDFWXQGHUWKHSROLF\QRLQTXLU\LVPDGHLQWRDELOLW\WRSD\ +ROPHV&RXQW\&RXUW:HWKHUHIRUHILQGUHPDQGDSSURSULDWH $VVXSSRUW$ONLUHFODLPVWKDWQRGHWHUPLQDWLRQRIDELOLW\WR SD\ZDVPDGHLQKLVFDVH5DWKHUDIWHUsXGJH,UYLQJRUGHUV ,QVRIDUDV$ONLUHDUJXHVWKDWWKHYLRODWLRQRI2KLR5HYLVHG SD\PHQWRIDILQHRUFRVWVWKH&OHUNjV2IILFHVHWVDSD\PHQW &RGH ††   $  '  E\ +ROPHV &RXQW\ &RXUW DOVR VFKHGXOHZLWKWKHGHIHQGDQWDQGH[SHFWVKLPRUKHUWRDELGH YLRODWHG WKH IHGHUDO &RQVWLWXWLRQ ZH DJUHH  6HFWLRQV E\LW$ONLUHDUJXHVWKDWsXGJH,UYLQJDOVRGRHVQRWLQTXLUH   $ DQG ' SURKLELWFRXUWVIURPMDLOLQJLQGLYLGXDOV LQWR DELOLW\ WR SD\  $ONLUH DOVR SRLQWV WR WKH SUDFWLFHV DQG IRUIDLOLQJWRSD\DILQHZKHUHWKHSHUVRQLVXQDEOHWRGRVR FXVWRPV RI 6KHULII =LPPHUO\ ZKR mQHYHUl TXHVWLRQV WKH 7KH\SURYLGH OHJDOLW\RIDUUHVWRULQFDUFHUDWLRQLQFRQQHFWLRQZLWKIDLOXUHWR SD\  $ONLUH KDV SURGXFHG QLQH RWKHU FDVHV RI DOOHJHG ,IDILQHLVLPSRVHGDVDVHQWHQFHRUDSDUWRIDVHQWHQFH GHWHQWLRQE\+ROPHV&RXQW\&RXUWDQGWKH+ROPHV&RXQW\ WKHFRXUWRUPDJLVWUDWHWKDWLPSRVHGWKHILQHPD\RUGHU 6KHULIIjV2IILFHIRUIDLOXUHWRSD\DGHEW+RZHYHUm>X@QGHU WKDWWKHRIIHQGHUEHFRPPLWWHGWRWKHMDLORUZRUNKRXVH DSSURSULDWHFLUFXPVWDQFHVHYHQDVLQJOHDFWRUGHFLVLRQPD\ XQWLOWKHILQHLVSDLGRUVHFXUHGWREHSDLGRUWKHRIIHQGHU TXDOLI\ DV DQ RIILFLDO JRYHUQPHQWDO SROLF\ WKRXJK LW EH XQSUHFHGHQWHGDQGXQUHSHDWHGl+ROORZD\Y%UXVK)G  WK&LU  HQEDQF   ,PSRUWDQWO\ EHIRUH D ILQGLQJ RI FULPLQDO FRQWHPSW FDQ EH LPSRVHG $ONLUHDUJXHVWKDWWKLVmSROLF\lLVDWWULEXWDEOHWRWKH+ROPHV D GHIHQGDQW LV HQWLWOHG E\ WR QRWLFH RI WKH FKDUJHV DQG DQ RSSRUWXQLW\ WR EH KHDUG DQG SUHVHQW D GHIHQVH &RQVRO 5DLO &RUS Y <DVKLQVN\  &RXQW\&RXUW$UHDVRQDEOHMXU\FRXOGILQGWKDWsXGJH,UYLQJ )G     WK &LU   ,W LV QRW FOHDU WKDW WKHVH GXH SURFHVV DQG WKH &OHUNjV 2IILFH PDNH ILQDO JRYHUQPHQWDO SROLF\ RQ UHTXLUHPHQWV ZHUH PHW LQ WKLV FDVH +RZHYHU $ONLUH GRHV QRW FKDOOHQJH EHKDOIRI+ROPHV&RXQW\&RXUWZLWKUHVSHFWWRWKHSD\PHQW WKH SURFHGXUHV XVHG DW WKH FRQWHPSW KHDULQJV DV D YLRODWLRQ RI KLV GXH SURFHVV ULJKWV 1R $ONLUHY,UYLQJHWDO   $ONLUHY,UYLQJHWDO 1R

LVRWKHUZLVHOHJDOO\GLVFKDUJHGLIWKHFRXUWRUPDJLVWUDWH & :KHWKHU WKH GLVWULFW FRXUW HUUHG LQ ILQGLQJ QR GHWHUPLQHVDWDKHDULQJWKDWWKHRIIHQGHULVDEOHDWWKDW YLRODWLRQRI$ONLUHjVGXHSURFHVVDQGHTXDOSURWHFWLRQ WLPHWRSD\WKHILQHEXWUHIXVHVWRGRVR ULJKWVZKHQGHIHQGDQWVIDLOHGWRDOORZFUHGLWWRZDUG

  ILQHVDQGFRVWVIRUWLPHVHUYHG 1RSHUVRQVKDOOEHRUGHUHGWREHFRPPLWWHGWRDMDLORU ZRUNKRXVHRURWKHUZLVHEHKHOGLQFXVWRG\LQVDWLVIDFWLRQ $ONLUH QH[W FRPSODLQV WKDW WKH +ROPHV &RXQW\ &RXUW RIDILQHLPSRVHGDVWKHZKROHRUDSDUWRIDVHQWHQFH WKURXJK sXGJH ,UYLQJ DQG WKH &OHUNjV 2IILFH YLRODWHG KLV H[FHSWDVSURYLGHGLQWKLVVHFWLRQ )RXUWHHQWK$PHQGPHQWULJKWWRGXHSURFHVVZKHQLWIDLOHGWR HQWHUDFUHGLWDJDLQVWWKHILQHVDQGFRVWVRZHGEDVHGRQWKH 2+,2 5(9 &2'( †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jV 6HFWLRQ ZDVQRWFRPSOLHGZLWKLQWKLVFDVHEHFDXVH LQFDUFHUDWLRQLIDGHIHQGDQWZHUHLPSULVRQHGIRUUHIXVLQJWR $ONLUHGLGQRWUHFHLYHDKHDULQJWRGHWHUPLQHKLVDELOLW\WRSD\ SD\ D ILQH ZKHQ KH RU VKH KDG WKH FDSDELOLW\ WR GR VR WKH SULRUWREHLQJLQFDUFHUDWHG2IFRXUVHYLRODWLRQRIDVWDWH GHIHQGDQWZDVWRmUHFHLYHDFUHGLWXSRQWKHILQHDWWKHUDWHRI VWDWXWHGRHVQRWDXWRPDWLFDOO\FUHDWHDFDXVHRIDFWLRQXQGHU WKLUW\GROODUVSHUGD\RUIUDFWLRQRIDGD\l2+,2 5(9 &2'( †   IRU WKH GHSULYDWLRQ RI D FRQVWLWXWLRQDOO\ SURWHFWHG $11 †   ' 2IFRXUVH$ONLUHFODLPVWKDWKHZDV ULJKW  6HH +DUULOO Y %ORXQW &RXQW\ 7HQQ  )G  LQGLJHQWDQGGLGQRWUHIXVHWRSD\ZKLFKZRXOGPDNHWKLV  WK&LU   m$VWDWHVWDWXWHFDQQRWµFUHDWHjDIHGHUDO SURYLVLRQLQDSSOLFDEOH+RZHYHUJLYHQKLVFODLPWKDWKHZDV FRQVWLWXWLRQDOULJKWl +RZHYHUWKHIDLOXUHWRFRPSO\ZLWK LPSULVRQHG XQGHU †   LW GRHV VHHP WKDW $ONLUH ZDV † E\QRWGHWHUPLQLQJDELOLW\WRSD\DOVRYLRODWHVWKH HQWLWOHGXQGHUVWDWHODZWRUHFHLYHWKLUW\GROODUVSHUGD\FUHGLW FRQVWLWXWLRQDO SURKLELWLRQ DJDLQVW LQFDUFHUDWLQJ DQ LQGLJHQW WRZDUGKLVGHEW GHIHQGDQWIRUKLVIDLOXUHWRSD\DGHEW ,QWKLVFDVH+ROPHV&RXQW\&RXUWKDGDSROLF\RIJLYLQJ :HWKHUHIRUHUHYHUVHWKHGLVWULFWFRXUWjVGLVPLVVDORIWKHVH FUHGLW DJDLQVW ILQHV RZHG DOWKRXJK QRW DJDLQVW FRXUW FRVWV WZRFODLPVIRUWKHUHDUHJHQXLQHLVVXHVRIPDWHULDOIDFWDVWR RZHGEDVHGRQZRUNSHUIRUPHGZKLOHLQMDLO$SULVRQHUZDV ZKHWKHU $ONLUHjV 7KLUWHHQWK $PHQGPHQW ULJKW QRW WR EH WREHFUHGLWHGDWWKHWKHQLQHIIHFWPLQLPXPZDJHIRUHDFK LPSULVRQHGIRUDFLYLOGHEWDQG)RXUWHHQWK$PHQGPHQWULJKW KRXURIZRUNSHUIRUPHG:KLOHWKLVSROLF\YLRODWHV2KLRODZ QRWWRORVHKLVOLEHUW\GXHWRLQGLJHQF\ZHUHYLRODWHGSXUVXDQW WKHUHLVQRFRQVWLWXWLRQDOUHTXLUHPHQWWKDWDSDUWLFXODUGROODU WRDQRIILFLDOSROLF\RUFXVWRP DPRXQWRIFUHGLWEHJLYHQIRUMDLOWLPHVHUYHG7KLVFODLP WKHUHIRUH IDLOV WR VWDWH D FRQVWLWXWLRQDO YLRODWLRQ $FFRUGLQJO\ZHDIILUPWKHGLVWULFWFRXUWjVJUDQWRIVXPPDU\ MXGJPHQWWRGHIHQGDQWVRQWKLVLVVXH 1R $ONLUHY,UYLQJHWDO   $ONLUHY,UYLQJHWDO 1R

' :KHWKHU WKH GLVWULFW FRXUW DEXVHG LWV GLVFUHWLRQ LQ PHWKRGV IRU WKH IDLU DQG HIILFLHQW DGMXGLFDWLRQ RI WKH UHIXVLQJWRFHUWLI\DFODVV FRQWURYHUV\l)(' 5 &,9 3 E   $ONLUHDUJXHVWKDWWKHGLVWULFWFRXUWDEXVHGLWVGLVFUHWLRQE\ 7KH GLVWULFW FRXUWjV GHQLDO RI $ONLUHjV PRWLRQ IRU FODVV GHQ\LQJ KLV PRWLRQ IRU FODVV FHUWLILFDWLRQ RQ GDPDJHV DQG FHUWLILFDWLRQVXUYLYHVDEXVHRIGLVFUHWLRQUHYLHZ2QWKHILUVW UHVWLWXWLRQ  7KHUH DUH IRXU SUHUHTXLVLWHV WR D FODVV DFWLRQ SUHUHTXLVLWH QXPHURVLW\ WKH GLVWULFW FRXUW IRXQG LW ZDV IRXQGLQ)HGHUDO5XOHRI&LYLO3URFHGXUH D  mKLJKO\LPSUREDEOHlWKDW$ONLUHFRXOGPDNHVXFKDVKRZLQJ :KLOH$ONLUHSRVWXODWHVWKDWWKHUHDUHKXQGUHGVRISRWHQWLDO 2QHRUPRUHPHPEHUVRIDFODVVPD\VXHRUEHVXHGDV SODLQWLIIV GHIHQGDQWVj VHDUFK RI MDLO UHFRUGV SURGXFHG RQO\ UHSUHVHQWDWLYHSDUWLHVRQEHKDOIRIDOORQO\LI   WKHFODVV QLQHSRWHQWLDOFODVVPHPEHUVZKRZHUHLQFDUFHUDWHGGXHWR LV VR QXPHURXV WKDW MRLQGHU RI DOO PHPEHUV LV IDLOXUHWRSD\DFLYLOGHEWRUFRXUWFRVWV7KHGLVWULFWFRXUWGLG LPSUDFWLFDEOH   WKHUH DUH TXHVWLRQV RI ODZ RU IDFW QRW DEXVH LWV GLVFUHWLRQ E\ EHOLHYLQJ GHIHQGDQWVj DVVHUWHG FRPPRQWRWKHFODVV  WKHFODLPVRUGHIHQVHVRIWKH QXPEHURIFODVVPHPEHUVRYHU$ONLUHj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mYDU\LQJUHDVRQVIRUWKHDUUHVWVYDU\LQJ WKHFODVVoWKRXJKWKDWTXHVWLRQPXVWEHDmFRPPRQLVVXHWKH OHQJWKV RI VWD\ LQ MDLO YDU\LQJ ILQDQFLDO VLWXDWLRQV YDU\LQJ UHVROXWLRQ RI ZKLFK ZLOO DGYDQFH WKH OLWLJDWLRQl  6SUDJXH UHDVRQVIRUFRQWHPSWDGMXGLFDWLRQVZRXOGLPSDFWRQWKH )GDW 6HHDOVR$PFKHP3URGV,QFY:LQGVRU DPRXQWRIGDPDJHVDQ\LQGLYLGXDOFODVVPHPEHUPLJKWEH 86    8OWLPDWHO\WKHFODVVPD\RQO\EH HQWLWOHGWRl7KHGLVWULFWFRXUWH[SUHVVO\IRXQGWKDW$ONLUHjV FHUWLILHG LI mDIWHU D ULJRURXV DQDO\VLVl WKH GLVWULFW FRXUW LV SURSRVHGFODVVODFNVWKHmFRPPRQTXHVWLRQVRIIDFWlUHTXLUHG VDWLVILHGWKDWWKHVHSUHUHTXLVLWHVKDYHEHHQPHW*HQ7HO&R XQGHUWKHVHFRQGSURQJDQGWKHmW\SLFDOLW\lUHTXLUHGXQGHUWKH Y)DOFRQ86   7KHEXUGHQLVRQWKH WKLUGSURQJRI5XOH D  SODLQWLIImWRHVWDEOLVKKLVULJKWlWRFODVVFHUWLILFDWLRQ6HQWHU Y*HQ0RWRUV&RUS)G WK&LU   $ONLUHDUJXHV WKDWWKHGLVWULFWFRXUWDEXVHGLWVGLVFUHWLRQ EHFDXVHRQO\RQHFRPPRQTXHVWLRQRIODZRUIDFWLVUHTXLUHG ,I $ONLUH FDQ VDWLVI\ WKH IRXU SUHUHTXLVLWHV IRU FODVV +HSRLQWVWRDFRPPRQTXHVWLRQRIIDFWmWKHH[LVWHQFHDQG FHUWLILFDWLRQIRXQGLQ5XOH D WKHQKHPXVWVKRZWKDWLQ URXWLQHDSSOLFDWLRQRIWKHLOOHJDOSROLFLHVXOWLPDWHO\SURYHQE\ DGGLWLRQKHVDWLVILHVRQHWKHWKUHHW\SHVRIFODVVDFWLRQVIRXQG WKH>GHIHQGDQWVjRZQ@GHSRVLWLRQVlDQGFRPPRQTXHVWLRQVRI LQ)HGHUDO5XOHRI&LYLO3URFHGXUH E 2QO\WZRRIWKH ODZ LQFOXGLQJ LVVXHV RQH WKURXJK IRXU SUHVHQWHG LQ WKLV WKUHHW\SHVIRXQGLQ5XOH E DUHUHOHYDQWKHUHW\SHV,,DQG DSSHDO ,,,  $ W\SH ,, FODVV DFWLRQ UHTXLUHV WKDW WKH SODLQWLII VHHN SULPDULO\ LQMXQFWLYH RU GHFODUDWRU\ UHOLHI  )(' 5 &,9 3  E    7\SH ,,, UHTXLUHV WKDW mWKH FRXUW ILQG>@ WKDW WKH TXHVWLRQVRIODZRUIDFWFRPPRQWRWKHPHPEHUVRIWKHFODVV  7KH IRXUWK HOHPHQW RI 5XOH  D  ZKHWKHU WKH UHSUHVHQWDWLYH SUHGRPLQDWH RYHU DQ\ TXHVWLRQV DIIHFWLQJ RQO\ LQGLYLGXDO SDUWLHV ZLOO IDLUO\ DQG SURWHFW WKH LQWHUHVWV RI WKH FODVV LV QRW DGGUHVVHG E\ PHPEHUVDQGWKDWDFODVVDFWLRQLVVXSHULRUWRRWKHUDYDLODEOH WKH GLVWULFW FRXUW RU LQ WKH EULHIV 7KHUHIRUH ZH ZLOO DOVR QRW DGGUHVV LW 1R $ONLUHY,UYLQJHWDO   $ONLUHY,UYLQJHWDO 1R

2XUUHYLHZLVIRUDEXVHRIGLVFUHWLRQDQGWKHGLVWULFWFRXUW YDU\LQJOHQJWKVRIVWD\DQGYDU\LQJILQDQFLDOVLWXDWLRQVmGR GLG QRW DEXVH LWV GLVFUHWLRQ LQ DSSO\LQJ WKH FODVV DFWLRQ QRWZDUUDQWFODVVWUHDWPHQWlLVHYHQVWURQJHUZKHQUHYLHZHG SUHUHTXLVLWHV7KHUHDUHHQRUPRXVYDULDWLRQVLQWKHIDFWXDO XQGHUWKHW\SH,,,UHTXLUHPHQWV$FFRUGLQJO\ZHDIILUPWKH DQG OHJDO EDFNJURXQGV VXUURXQGLQJ WKH KXQGUHGV RI FDVHV GLVWULFW FRXUWjV GHQLDO RI $ONLUHjV PRWLRQ IRU FODVV $ONLUHDVVHUWVPLJKWTXDOLI\IRUFODVVPHPEHUVKLS$FODVV FHUWLILFDWLRQ DFWLRQFDQQRWEHFHUWLILHGXQOHVVWKHUHVROXWLRQRIWKHFRPPRQ LVVXHV mZLOO DGYDQFH WKH OLWLJDWLRQl  6SUDJXH  )G DW 9&21&/86,21    7KH GLVWULFW FRXUW QHLWKHU DSSOLHG WKH ZURQJ OHJDO VWDQGDUGLQH[DPLQLQJWKHVHWZRHOHPHQWVQRUGLGLWPLVDSSO\ )RUWKHIRUHJRLQJUHDVRQVZH5(9(56(WKHGLVWULFWFRXUW WKH FRUUHFW OHJDO VWDQGDUG  7KH FRXUW FRUUHFWO\ SODFHG WKH ZLWKUHVSHFWWRLWVJUDQWRIGHIHQGDQWVjVXPPDU\MXGJPHQW EXUGHQRIGHPRQVWUDWLQJKLVULJKWWRFODVVFHUWLILFDWLRQDQG PRWLRQDVWR$ONLUHjVILUVWDQGVHFRQGFODLPVDQG$)),50 FRQFOXGHG WKDW $ONLUH GLG QRW PHHW KLV EXUGHQ  6XFK D WKH GLVWULFW FRXUW ZLWK UHVSHFW WR LWV JUDQW RI GHIHQGDQWVj FRQFOXVLRQZDVQRWDQDEXVHRIGLVFUHWLRQ VXPPDU\ MXGJPHQW PRWLRQ RQ WKH WKLUG FODLP  :H DOVR $)),50 WKH GLVWULFW FRXUWjV GHQLDO RI $ONLUHj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mREWDLQHGDOOWKHUHOLHIIXWXUHSRWHQWLDOSODLQWLIIV ZRXOGZDQWRUQHHGl  $ONLUHHYHQDJUHHVZLWKWKHGLVWULFW FRXUWjV FRQFOXVLRQ RQ WKLV SRLQW VWDWLQJ WKH KH GRHV QRW GLVSXWH WKH GLVWULFW FRXUWjV KROGLQJ mDV WR D FODVV RI IXWXUH PHPEHUV     7KH VWLSXODWLRQV GR SURYLGH VXIILFLHQW SURWHFWLRQIRUWKHLULQWHUHVWVl7KXV$ONLUHFDQQRWPDLQWDLQ DW\SH,,FODVVDFWLRQ $ONLUHjVTXDUUHOZLWKWKHGLVWULFWFRXUWWKHQLVLWVIDLOXUHWR FHUWLI\ D W\SH ,,, FODVV DFWLRQ ZKHUH PRQHWDU\ GDPDJHV SUHGRPLQDWH+RZHYHUKHLJQRUHVWKHUHTXLUHPHQWVRIDW\SH ,,,FODVVDFWLRQZKLFKLQFOXGHDVKRZLQJWKDWWKHFRPPRQ TXHVWLRQVSUHGRPLQDWHRYHUWKHLQGLYLGXDORQHVDQGWKDWWKH FODVV DFWLRQ LV D VXSHULRU PHWKRG IRU DGMXGLFDWLRQ &RQVHTXHQWO\ $ONLUHjV DUJXPHQW WKDW RQO\ RQH FRPPRQ TXHVWLRQ LV QHFHVVDU\ IRU FODVV FHUWLILFDWLRQ GRHV QRW DSSO\ XQGHUWKHW\SH,,,DQDO\VLV7KHGLVWULFWFRXUWjVILQGLQJWKDW QXPHURXVIDFWXDOLVVXHVVXFKDVYDU\LQJUHDVRQVIRUDUUHVW