Downie v. Middleburg Heights

Opinion

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 3XUVXDQW WR 6L[WK &LUFXLW 5XOH 

(/(&7521,& &,7$7,21  )(' $SS 3 WK &LU )LOH 1DPH DS

81,7('67$7(6&28572)$33($/6 )257+(6,;7+&,5&8,7 BBBBBBBBBBBBBBBBB

0,&.(< '2:1,( '$9,' ; :+($7  3ODLQWLIIV$SSHOODQWV   1R  Y !   &,7< 2) 0,''/(%85*  +(,*+76HWDO  'HIHQGDQWV    5,&+$5' 3 6,(*(/ 7+20$6  6&+1(,'(5  'HIHQGDQWV$SSHOOHHV   1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW&OHYHODQG 1Rn/HVOH\%URRNV:HOOV'LVWULFWsXGJH $UJXHGsXQH 'HFLGHGDQG)LOHG$XJXVW %HIRUH6,/(5DQG0225(&LUFXLWsXGJHV67$))25' 'LVWULFWsXGJH

7KH +RQRUDEOH :LOOLDP + 6WDIIRUG sU 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH 1RUWKHUQ 'LVWULFW RI )ORULGD VLWWLQJ E\ GHVLJQDWLRQ

  'RZQLHHWDOY&LW\RI 1R 1R 'RZQLHHWDOY&LW\RI  0LGGOHEXUJ+JWVHWDO 0LGGOHEXUJ+JWVHWDO

BBBBBBBBBBBBBBBBB DVVHUWHG WKUHH GLIIHUHQW OHJDO WKHRULHV DQG DVNHG IRU WZR GLIIHUHQWW\SHVRIGDPDJHV7KHDSSHOODWHFRXUWDFFRUGLQJO\ &2816(/ GLVPLVVHG WKH DSSHDO DQG UHPDQGHG WKH FDVH WR WKH GLVWULFW FRXUWIRUIXUWKHUSURFHHGLQJV $5*8('  .HQQHWK ' 0\HUV )5,('0$1 $662&,$7(6 &OHYHODQG 2KLR IRU $SSHOODQWV  'DQD s 7KHFRXUWLQ*HQHUDO$FTXLVLWLRQGLGQRWDGGUHVVWKHDVSHFW 0DUWLQ81,7('67$7(6'(3$570(172)s867,&( RID5XOHELVVXHWKDWLVEHIRUHWKLVFRXUWWKDWLVZKHWKHU :DVKLQJWRQ'&IRU$SSHOOHHV21%5,().HQQHWK' WKH GLVWULFW FRXUW FRPSOLHG ZLWK WKH UXOHjV WHFKQLFDO 0\HUV$YHU\6)ULHGPDQ)5,('0$1 $662&,$7(6 UHTXLUHPHQWV3UHVXPDEO\WKHGLVWULFWFRXUWjVFHUWLILFDWLRQLQ &OHYHODQG2KLRIRU$SSHOODQWV'DQDs0DUWLQ0DUN% *HQHUDO $FTXLVLWLRQ FRQWDLQHG WKH UHTXLUHG mH[SUHVV 6WHUQ 81,7(' 67$7(6 '(3$570(17 2) s867,&( GHWHUPLQDWLRQl DQG mH[SUHVV GLUHFWLRQl FRPSRQHQWV :DVKLQJWRQ'&IRU$SSHOOHHV 1RQHWKHOHVVLQWKHFRQWH[WRIWKHVHSDUDEOHFODLPLVVXHWKH *HQHUDO $FTXLVLWLRQ FRXUW ZURWH m7KH ILUVW VWHS LQ 0225(sGHOLYHUHGWKHRSLQLRQRIWKHFRXUWLQZKLFK FHUWLILFDWLRQHQWU\RISDUWLDOILQDOMXGJPHQWLVVDWLVILHGZKHUH 6,/(5sMRLQHG67$))25''sSSGHOLYHUHG VRPHGHFLVLRQPDGHE\WKHGLVWULFWFRXUWXOWLPDWHO\GLVSRVHV DVHSDUDWHFRQFXUULQJRSLQLRQ RIRQHRUPRUHEXWIHZHUWKDQDOORIWKHFODLPVRUSDUWLHVLQD PXOWLFODLPPXOWLSDUW\DFWLRQl*HQ$FTXLVLWLRQ)GDW BBBBBBBBBBBBBBBBB  23,1,21 +HUHLQWKHFRQWH[WRIDQmH[SUHVVGLUHFWLRQlLVVXHQRWLQ BBBBBBBBBBBBBBBBB WKHFRQWH[WRIVHSDUDEOHFODLPVLVVXHWKHPDMRULW\TXRWHVWKH DERYHVHQWHQFHLQ*HQHUDO$FTXLVLWLRQVXJJHVWLQJWKDWWKH .$5(1 1(/621 0225( &LUFXLW sXGJH  3ODLQWLII mH[SUHVVGLUHFWLRQlFRPSRQHQWRI5XOHELVVDWLVILHGZKHQ $SSHOODQW0LFNH\'RZQLHm'RZQLHlDSSHDOVWZRRUGHUVRI mVRPHGHFLVLRQPDGHE\WKHGLVWULFWFRXUWXOWLPDWHO\GLVSRVHV WKH GLVWULFW FRXUW GLVPLVVLQJ KLV %LYHQV DFWLRQ DJDLQVW RIRQHRUPRUHEXWIHZHUWKDQDOORIWKHFODLPVRUSDUWLHVl 'HIHQGDQWV$SSHOOHHV5LFKDUG36LHJHOm6LHJHOlDQDJHQW 6XSUDSHPSKDVLVVXSSOLHGE\PDMRULW\,QP\RSLQLRQ RIWKH8QLWHG6WDWHV&XVWRPV6HUYLFHDQG7KRPDV6FKQHLGHU WKHPDMRULW\KDVWDNHQWKHODQJXDJHIURP*HQHUDO$FTXLVLWLRQ m6FKQHLGHUl DQ DJHQW RI WKH 8QLWHG 6WDWHV %XUHDX RI RXWRIFRQWH[WDQGE\GRLQJVRKDVXQGHUPLQHG5XOHEjV $OFRKRO7REDFFRDQG)LUHDUPVm$7)l,Q'RZQLH GLUHFWLRQWKDWmDQ\RUGHURURWKHUIRUPRIGHFLVLRQKRZHYHU ILOHGDFRPSODLQWLQIHGHUDOGLVWULFWFRXUWDJDLQVWWKH&LW\RI GHVLJQDWHGZKLFKDGMXGLFDWHVIHZHUWKDQDOOWKHFODLPVRUWKH 0LGGOHEXUJ+HLJKWVDQXPEHURIVWDWHRIILFLDOVDQG6LHJHO ULJKWV DQG OLDELOLWLHV RI IHZHU WKDQ DOO WKH SDUWLHV VKDOO QRW DQG 6FKQHLGHU DOOHJLQJ YDULRXV YLRODWLRQV RI KLV WHUPLQDWHWKHDFWLRQDVWRDQ\RIWKHFODLPVRUSDUWLHVlLIWKH FRQVWLWXWLRQDO DQG VWDWXWRU\ ULJKWV LQ FRQQHFWLRQ ZLWK KLV GLVWULFWFRXUWKDVIDLOHGWRFRPSO\ZLWKHLWKHUWKHmH[SUHVV UHVLJQDWLRQDVDQXQGHUFRYHULQIRUPDQWIRUWKH8QLWHG6WDWHV GLUHFWLRQl RU mH[SUHVV GHWHUPLQDWLRQl FRPSRQHQW RI 5XOH &XVWRPV6HUYLFH(VVHQWLDOO\'RZQLHFODLPHGWKDW6LHJHO E UHWDOLDWHG DJDLQVW KLP IRU FRPPHQWV KH PDGH LQ KLV UHVLJQDWLRQ OHWWHU E\ FUHDWLQJ PDLQWDLQLQJ DQG WKHQ GLVVHPLQDWLQJ WR 6FKQHLGHU DQG WKH VWDWH RIILFLDOV D mEODFNEDOOl PHPR IDOVHO\ VWDWLQJ WKDW 'RZQLH ZDV QRW D UHOLDEOHLQIRUPDQW  'RZQLHHWDOY&LW\RI 1R 1R 'RZQLHHWDOY&LW\RI  0LGGOHEXUJ+JWVHWDO 0LGGOHEXUJ+JWVHWDO

& 7KH 8QLWHG 6WDWHV VXEVWLWXWHG LWVHOI IRU 6LHJHO DQG 6FKQHLGHUDVIHGHUDOHPSOR\HHVDFWLQJLQWKHVFRSHRIWKHLU (YHQWKRXJKMXULVGLFWLRQOLHVLQWKLVFRXUWZKHWKHURUQRW HPSOR\PHQWIRUDOOWKHFODLPVLQ'RZQLHjVFRPSODLQWH[FHSW WKHGLVWULFWFRXUWVDWLVILHGWKHWHFKQLFDOUHTXLUHPHQWVRI5XOH WKRVH FODLPV DOOHJLQJ FRQVWLWXWLRQDO YLRODWLRQV  6LHJHO DQG EWKHPDMRULW\GHFLGHVWKDWLQIDFWWKHGLVWULFWFRXUWjV 6FKQHLGHU WKHQ PRYHG WR GLVPLVV 'RZQLHjV FRQVWLWXWLRQDO 6HSWHPEHU WK msXGJPHQW (QWU\l FRPELQHG ZLWK LWV FODLPVDJDLQVWWKHPIRUIDLOXUHWRVWDWHDFODLPXQGHU)HGHUDO 'HFHPEHUWKRUGHUH[SUHVVO\GHWHUPLQLQJWKDWWKHUHZDVQR 5XOHRI&LYLO3URFHGXUHE &RQFOXGLQJWKDW'RZQLH MXVW UHDVRQ IRU GHOD\ VDWLVILHG WKRVH UHTXLUHPHQWV  7KH FRXOG QRW VHHN UHOLHI DJDLQVW WKH GHIHQGDQWV XQGHU %LYHQV PDMRULW\WKXVGHFLGHVWKDWWKHUHTXLUHGmH[SUHVVGHWHUPLQDWLRQ EHFDXVH&RQJUHVVKDGHQDFWHGDQHODERUDWHUHPHGLDOVFKHPH WKDW WKHUH LV QR MXVW UHDVRQ IRU GHOD\l DQG WKH UHTXLUHG LQWKH3ULYDF\$FWRIWRDGGUHVVFODLPVUHJDUGLQJWKH mH[SUHVV GLUHFWLRQ IRU WKH HQWU\ RI MXGJPHQWl QHHG QRW EH FUHDWLRQPDLQWHQDQFHDQGGLVVHPLQDWLRQRIIDOVHUHFRUGVE\ LQFOXGHGLQWKHVDPHFRXUWRUGHUEXWFDQLQVWHDGEHSDUVHG IHGHUDO DJHQF\ HPSOR\HHV WKH GLVWULFW FRXUW LQ WZR RUGHUV IURPWZRVHSDUDWHGRFXPHQWVHQWHUHGPRQWKVDSDUW%HFDXVH IXOO\JUDQWHGWKHGHIHQGDQWVjPRWLRQWRGLVPLVV'RZQLHQRZ ,WKLQNWKHPDMRULW\jVGHFLVLRQFRXOGXQGHUPLQHWKHFHUWDLQW\ DSSHDOV WKH GLVWULFW FRXUWjV GLVPLVVDO RI KLV FRQVWLWXWLRQDO ZKLFKLVWKHYHU\DLPRI5XOHE,ZRXOGQRWPDNHVXFK FODLPV DJDLQVW 6LHJHO DQG 6FKQHLGHU  )RU WKH IROORZLQJ DGHFLVLRQZKHUHDVLQWKLVFDVHWKHGHFLVLRQLVXQQHFHVVDU\ UHDVRQVZH$)),50WKHRUGHUVRIWKHGLVWULFWFRXUW WRDILQGLQJRIMXULVGLFWLRQ ,%$&.*5281' 0RUHRYHU,TXHVWLRQWKHPDMRULW\jVUHOLDQFHRQDVHQWHQFH WDNHQIURP*HQHUDO$FTXLVLWLRQ,QFY*HQ&253,QF 2Q sXQH   0LFNH\ 'RZQLH DQG 'DYLG :KHDW )GWK&LU,QWKDWFDVHWKLVFRXUW m:KHDWl ILOHG D FRPSODLQW LQ WKH 8QLWHG 6WDWHV 'LVWULFW FRQVLGHUHG ZKHWKHU WKH mMXGJPHQWl FHUWLILHG IRU DSSHDOD &RXUWIRUWKH1RUWKHUQ'LVWULFWRI2KLRDJDLQVWWKH&LW\RI MXGJPHQW RQ WKH GDPDJHV HOHPHQW EXW QRW WKH OLDELOLW\ 0LGGOHEXUJ +HLJKWV 0LGGOHEXUJ +HLJKWV 3ROLFH 2IILFHU HOHPHQW RI WKH SODLQWLIIjV FDVHXOWLPDWHO\ GLVSRVHG RI D *OHQQ%ODWQLFD$VKWDEXOD&RXQW\3URVHFXWRU7KRPDV6DUWLQL VHSDUDEOHFODLP2QUHYLHZWKLVFRXUWGHWHUPLQHGWKDWWKH &X\DKRJD &RXQW\ &KLHI $VVLVWDQW 3URVHFXWRU &DUPHQ GLVWULFWFRXUWZDVmSRZHUOHVVlWRFHUWLI\LWVRUGHUUHJDUGLQJ 0DULQR86&XVWRPV6HUYLFH$JHQW5LFKDUG6LHJHO$7) GDPDJHV  %HFDXVH WKH SODLQWLIIjV DOOHJDWLRQV FRQFHUQHG D $JHQW 7KRPDV 6FKQHLGHU DQG IHGHUDO DQG VWDWH ODZ VLQJOHDJJUHJDWHRIRSHUDWLYHIDFWVWKHFLUFXLWFRXUWIRXQGWKDW HQIRUFHPHQW RIILFHUV msRKQ 'RHV l  sRLQW $SSHQGL[ VHSDUDEOHFODLPVZHUHQRWSUHVHQWHYHQWKRXJKWKHSODLQWLII ms$l DW  &RPSO  7KH FRPSODLQW DOOHJHG WKDW 'RZQLH ZRUNHG DV DQ mXQGHUFRYHU RSHUDWLYHl IRU WKH 86 &XVWRPV 6HUYLFH LQ  mLGHQWLI\LQJ VHYHUDO PDMRU 86 FRUSRUDWLRQV WKDW ZHUH IXQQHOLQJ PLOOLRQV RI GROODUV WR EHJXQ WR UXQ DQG KDYH EHKDYHG DFFRUGLQJO\ ,G &RPPXQLVWJRYHUQPHQWVRI9LHWQDPDQG&KLQDLQYLRODWLRQ  RI IHGHUDO ODZl IRU DQ XQGHUFRYHU RSHUDWLRQ RI WKH 86 ,Q WKLV FDVH IRU H[DPSOH 'RZQLH PLJKW KDYH ZRQGHUHG ZKHWKHU D 7UHDVXU\ 'HSDUWPHQW NQRZQ DV m2SHUDWLRQ /HDWKHUQHFNl mMXGJPHQWl WKDW ZDV D QXOOLW\ ZKHQ HQWHUHG FRXOG ODWHU VHUYH DV WKH H[SUHVV HQWU\ RI MXGJPHQW WULJJHULQJ WKH WLPH IRU DSSHDO XQGHU 5XOH E +DG KH DVVXPHG WKDW WKH msXGJPHQW (QWU\l ZKLFK ZDV LQHIIHFWLYH ZKHQ HQWHUHG LQ 6HSWHPEHU FRXOG QRW EH UHVXUUHFWHG DV D YDOLG HQWU\ RI MXGJPHQW LQ 'HFHPEHU KH PLJKW KDYH GHOD\HG ILOLQJ KLV DSSHDO ZDLWLQJ IRU HQWU\ RI DQRWKHU MXGJPHQW  'RZQLHHWDOY&LW\RI 1R 1R 'RZQLHHWDOY&LW\RI  0LGGOHEXUJ+JWVHWDO 0LGGOHEXUJ+JWVHWDO

s$DW&RPSOˆˆ,QsXQH'RZQLHFODLPHG OLDELOLWLHVRIDOOWKHSDUWLHVl)HG5&LY3E,QHIIHFW WKDW KH UHVLJQHG DV DQ mXQGHUFRYHU RSHUDWLYHl RYHU WKHmsXGJPHQW(QWU\lZDVDQXOOLW\ GLVDJUHHPHQWVEHWZHHQ'RZQLHDQG86&XVWRPVRIILFLDOVDV WR GHFLVLRQV PDGH LQ FRQQHFWLRQ ZLWK m2SHUDWLRQ 2Q 2FWREHU   SUHVXPDEO\ UHFRJQL]LQJ WKDW WKH /HDWKHUQHFNl'RZQLHjVOHWWHURIUHVLJQDWLRQVWDWHGLQWHUDOLD GLVWULFWFRXUWjVmsXGJPHQW(QWU\lGLGQRWWHUPLQDWHWKHDFWLRQ WKDW DVWR6LHJHODQG6FKQHLGHUDQGWKDWLWGLGQRWVWDUWWKHDSSHDO FORFN UXQQLQJ 'RZQLH ILOHG D 5XOH E PRWLRQ IRU ,ILQGLWGLVFRQFHUWLQJWKDWGHVSLWHWKHRYHUDOOVXFFHVVRI SHUPLVVLRQWRILOHDQLPPHGLDWHDSSHDO2Q'HFHPEHU WKLV SURMHFW DV ZHOO DV P\ FRQVLVWHQW UHIHUUDOV RI WKHGLVWULFWFRXUWHQWHUHGDQRUGHUJUDQWLQJ'RZQLHjV GRFXPHQWHG LQWHOOLJHQFH WR \RXU RIILFH IRU WKH ODVW VL[ 5XOHEPRWLRQJDYHLWVUHDVRQVIRUILQGLQJWKDWWKHUHZDV \HDUVP\LGHQWLW\ZRXOGEHFRPSURPLVHGE\\RXLIQRW QRMXVWFDXVHIRUGHOD\EXWGLGQRWH[SUHVVO\GLUHFWHQWU\RI IRU WKH RQJRLQJ JXQ FDVH WR SURVHFXWH RQH PRUH MXGJPHQWs$DW'RZQLHILOHGKLVQRWLFHRIDSSHDORQ GHIHQGDQWIRURQHFRXQWRIWUDIILFNLQJFRXQWHUIHLW*XFFL sDQXDU\s$DW EDJV)RUWKLVUHDVRQ,DPJLYLQJVHULRXVFRQVLGHUDWLRQ WRUHIHUULQJWKHLQVWDQWFDVHWRWKH)%,WRLQYHVWLJDWHWKH :KHWKHU RU QRW WKH GLVWULFW FRXUW VDWLVILHG WKH WHFKQLFDO QH[XVDPRQJWKH2KLREDVHGYLRODWRUKLVEURWKHUZKRLV UHTXLUHPHQWVRI5XOHELQSDUWLFXODUWKHUHTXLUHPHQWRI DQDLGHWRD86&RQJUHVVPDQDQGWKLV&RQJUHVVPDQjV DQmH[SUHVVGLUHFWLRQIRUWKH HQWU\RIMXGJPHQWlDSSHOODWH SRVVLEOH FRQWDFWV ZLWK RQH RI WKH )ORULGD EDVHG MXULVGLFWLRQ SURSHUO\ UHVWV LQ WKLV FRXUW  &OHDUO\ WKH FDVH FRQVSLUDWRUV LQYROYHVPXOWLSOHSDUWLHVsXVWDVFOHDUO\WKHGLVWULFWFRXUW ZKROO\UHVROYHGWKHDFWLRQDVWRWZRRIWKRVHSDUWLHV6LHJHO s$ DW  /HWWHU RI 5HVLJQDWLRQ ([ $ WR &RPSO DQG 6FKQHLGHUZKHQ LW JUDQWHG WKHLU PRWLRQ WR GLVPLVV )ROORZLQJKLVUHVLJQDWLRQ'RZQLHFODLPVWKDW6LHJHOmEHJDQ 6XEVWDQWLYHO\WKHUHIRUHWKHGLVWULFWFRXUWKDGDSURSHUEDVLV DFDPSDLJQWRGLVFUHGLW>KLP@ls$DW&RPSOˆ IRU FHUWLI\LQJ DQ LPPHGLDWH DSSHDO  'RZQLH PRUHRYHU DVVXPHG WKDW WKH WLPH IRU DSSHDO EHJDQ WR UXQ ZKHQ WKH 6LHJHOjVDOOHJHGFDPSDLJQWRGLVFUHGLW'RZQLHFRQVLVWHGRI GLVWULFWFRXUWJUDQWHGKLV5XOHEPRWLRQDQGKHILOHGD WKUHH SDUWV  )LUVW 'RZQLH FODLPV WKDW 6LHJHO ZURWH D WLPHO\ QRWLFH RI DSSHDO DFFRUGLQJO\  8QGHU WKHVH mEODFNEDOOlPHPRUHJDUGLQJ'RZQLHZKLFK6LHJHOVHQWWRWKH FLUFXPVWDQFHVHYHQLIWKHGLVWULFWFRXUWIDLOHGWRFRPSO\ZLWK GLUHFWRURIWKH2IILFHRI'RPHVWLF2SHUDWLRQVIRUWKH86 WKHWHFKQLFDOUHTXLUHPHQWVRI5XOHEQRSXUSRVHZRXOG &XVWRPV6HUYLFHDQGZKLFKVWDWHGLQLWVHQWLUHW\ EHVHUYHGE\VHQGLQJWKHFDVHEDFNWRWKHGLVWULFWFRXUWIRUD mSURSHUlFHUWLILFDWLRQ ,Q DFFRUGDQFH ZLWK FKDSWHU  RI WKH 6SHFLDO $JHQW +DQGERRNWKLVRIILFHUHFRPPHQGVWKDW0LFNH\'RZQH\    EH SURKLELWHG EODFNOLVWHG IURP DQ\ IXUWKHU  SDUWLFLSDWLRQDVDVRXUFHRILQIRUPDWLRQIRUWKH&XVWRPV /LNH 5XOH E 5XOH  DGGUHVVHV D FRQFHUQ IRU DQ H[SUHVV DQG XQPLVWDNDEOH GHWHUPLQDWLRQ RI ILQDOLW\ \HW WKH 8QLWHG 6WDWHV 6XSUHPH &RXUW KDV VDLG WKDW DQ DSSHOODWH FRXUW VKRXOG LQVLVW RQ WHFKQLFDO DSSOLFDWLRQ RI 5XOH  RQO\ ZKHQ WHFKQLFDO DSSOLFDWLRQ RI WKH UXOH ZRXOG  :H QRWH WKDW DOO SDUWLHV WR WKLV DSSHDO DJUHH WKDW 'RZQLH ZDV QRW DQ SUHYHQW WKH ORVV RI D OLWLJDQWjV ULJKW WR DSSHDO GXH WR FRQIXVLRQ %DQNHUV HPSOR\HH RI WKH 86 &XVWRPV 6HUYLFH $SSHOODQWjV %U DW  $SSHOOHHVj 7UXVW &R Y 0DOOLV  86    6 &W   / (G G  %U DW  VHH DOVR  86& † D GHILQLQJ mHPSOR\HHl IRU WKH  ,Q FRQWUDVW FRPSOLDQFH ZLWK WKH WHFKQLFDOLWLHV RI 5XOH  LV SXUSRVHV RI WKH &LYLO 6HUYLFH 5HIRUP $FW m&65$l  XQQHFHVVDU\ ZKHQ WKH SDUWLHV KDYH DVVXPHG WKDW WKH WLPH IRU DSSHDO KDV  'RZQLHHWDOY&LW\RI 1R 1R 'RZQLHHWDOY&LW\RI  0LGGOHEXUJ+JWVHWDO 0LGGOHEXUJ+JWVHWDO

†DWGHGLQWHUQDOTXRWDWLRQRPLWWHGVHH 6HUYLFH7KLVVRXUFHKDVSURYHQWREHERWKXQGHVLUDEOH DOVR,QUH)UHGHULFN3HWUROHXP)GWK DQGXQUHOLDEOH+HUHQHJHGRQDSURPLVHWRWHVWLI\DWWKH &LU  VXJJHVWLQJ WKDW 5XOH E mHVWDEOLVKHV D FRQFOXVLRQ RI DQ XQGHUFRYHU LQYHVWLJDWLRQ UHIXVHG WR PXFKQHHGHG EULJKWOLQH WHVW IRU GHWHUPLQLQJ ILQDOLW\ WDNHGLUHFWLRQRIKLVFRQWURODJHQWDQGRWKHUVXSHUYLVRU\ SURYLGLQJFHUWDLQW\IRUOLWLJDQWVDVWRZKHWKHUWKHLUDSSHDOVDUH DJHQWV UHJDUGLQJ KLV DFWLYLWLHV LQ DQ XQGHUFRYHU ILQDOl:LWKRXWVWULFWFRPSOLDQFHZLWKWKHUXOHjVWHFKQLFDO LQYHVWLJDWLRQ DQG UHYHDOHG SURSULHWDU\ &XVWRPV UHTXLUHPHQWV OLWLJDQWV PD\ EH OHIW WR ZRQGHU ZKHWKHU DQG LQIRUPDWLRQ UHJDUGLQJ D VHQVLWLYH XQGHUFRYHU ZKHQ WKH FORFN VWDUWV WR UXQ IRU DQ DSSHDO RI D SDUWLDO LQYHVWLJDWLRQ WR RWKHU ODZ HQIRUFHPHQW DJHQFLHV DQG MXGJPHQW SDUWLHVXQNQRZQZLWKRXWWKHSHUPLVVLRQRIWKH&XVWRPV 6HUYLFH  +LV DFWLRQV FRPSURPLVHG PRUH WKDQ RQH 7KDW D GLVWULFW FRXUW FRPSOLHV ZLWK WKH WHFKQLFDO LQYHVWLJDWLRQFDXVLQJSRVVLEOHGDQJHUWRDQXQGHUFRYHU UHTXLUHPHQWVRI5XOHEGRHVQRWQHFHVVDULO\PHDQWKDWDQ &XVWRPV 6SHFLDO $JHQW DQG WKH GLVPLVVDO RI FULPLQDO DSSHDORIDFHUWLILHGSDUWLDOMXGJPHQWLVSURSHU%\LWVRZQ FKDUJHVDJDLQVWDWOHDVWRQHGHIHQGDQW)RUWKHDERYH WHUPV 5XOH E DSSOLHV RQO\ WR DFWLRQV LQYROYLQJ HLWKHU UHDVRQV LW LV P\ EHOLHI WKDW WKH LQGLYLGXDO VKRXOG QR PXOWLSOHSDUWLHVRUPXOWLSOHFODLPV$FFRUGLQJO\DQDSSHOODWH ORQJHUEHXVHGDVDQLQIRUPDQWE\WKH&XVWRPV6HUYLFH FRXUW PXVW H[DPLQH QRW RQO\ D GLVWULFW FRXUWjV FRPSOLDQFH ZLWK WKH UXOHjV mH[SUHVV GHWHUPLQDWLRQl DQG mH[SUHVV s$DW6LHJHO0HPR([%WR&RPSO6HFRQG'RZQLH GLUHFWLRQlUHTXLUHPHQWVLWPXVWDOVRORRNEHKLQGWKHGLVWULFW FODLPVWKDW6LHJHOmHQOLVWHGWKHDVVLVWDQFHlRI6FKQHLGHUDQG FRXUWjVFHUWLILFDWLRQRUGHUWRGHWHUPLQHZKHWKHUVXEVWDQWLYHO\ WRJHWKHUWKH\FDXVHG'RZQLHjVIHGHUDOILUHDUPVOLFHQVHWREH WKH TXHVWLRQ FHUWLILHG IRU DSSHDO VDWLVILHV WKH PXOWLSOH UHYRNHGLOOHJDOO\VHL]HG'RZQLHjVILUHDUPDQGFDXVHGWKH FODLPVPXOWLSOHSDUWLHVSUHUHTXLVLWH HQWU\ RI IDOVH UHFRUGV LQWR WKH &LW\ RI 0LGGOHEXUJ +HLJKWV SROLFH ILOHV UHJDUGLQJ DQ DUUHVW RI 'RZQLH IRU FDUU\LQJ D % FRQFHDOHGZHDSRQs$DW&RPSOˆˆ7KLUG 'RZQLHFODLPVWKDWmYDULRXVIHGHUDORIILFLDOVlFDXVHGKLPDQG ,Q WKLV FDVH RQ 6HSWHPEHU   WKH GLVWULFW FRXUW KLV DVVLVWDQW :KHDW WR EH ILUHG IURP SRVLWLRQV ZLWK WKH HQWHUHGDQRUGHUJUDQWLQJ6LHJHOjVDQG6FKQHLGHUjVPRWLRQWR $VKWDEXOD &RXQW\ 1DUFRWLFV 7DVN )RUFH  s$ DW  GLVPLVVs$DW7KDWVDPHGDWHWKHGLVWULFWFRXUWVLJQHG &RPSOˆˆ$FFRUGLQJWR'RZQLHKHZDVKLUHGWREH ZKDWLVHQWLWOHGDmsXGJPHQW(QWU\lLQIDYRURI6LHJHODQG mGLUHFWRUlRIWKH$VKWDEXOD&RXQW\1DUFRWLFV7DVN)RUFHE\ 6FKQHLGHU DQG WKDW msXGJPHQW (QWU\l ZDV HQWHUHG RQ WKH GHIHQGDQW7KRPDV6DUWLQLWKH$VKWDEXOD&RXQW\3URVHFXWRU GRFNHW%HFDXVHWKHFRXUWGLGQRWDWWKDWWLPHH[SUHVVO\ 'RZQLHFRQWHQGVWKDWDIWHUKLULQJKLP6DUWLQLZDVFRQWDFWHG GHWHUPLQHWKDWWKHUHZDVQRMXVWUHDVRQWRGHOD\DQDSSHDOWKH E\YDULRXVIHGHUDORIILFLDOVDQGZDUQHGWKDWLIKHGLGQRWILUH msXGJPHQW(QWU\lGLGQRWmWHUPLQDWHWKHDFWLRQDVWRDQ\RI 'RZQLH WKH IHGHUDO RIILFLDOV ZRXOG QR ORQJHU ZRUN ZLWK WKHFODLPVRUSDUWLHVDQGWKHRUGHURURWKHUIRUPRIGHFLVLRQ 6DUWLQL  7KH IHGHUDO RIILFLDOV SXUSRUWHGO\ WROG 6DUWLQL WKDW >ZD@V VXEMHFW WR UHYLVLRQ DW DQ\ WLPH EHIRUH WKH HQWU\ RI 'RZQLHZDVmXQGHVLUDEOHDQGXQUHOLDEOHlWKHH[DFWZRUGV MXGJPHQW DGMXGLFDWLQJ DOO WKH FODLPV DQG WKH ULJKWV DQG XVHGLQWKHmEODFNEDOOlPHPRs$DW&RPSOˆ 2QWKHEDVLVRIWKHDERYHIDFWV'RZQLHDQG:KHDWDOOHJHG  LQWKHFRPSODLQWWKDWWKHGHIHQGDQWVUHWDOLDWHGDJDLQVW 7KH GLVWULFW FRXUWjV msXGJPHQW (QWU\l ZDV QRW LQFOXGHG LQ WKH WKHP LQ YLRODWLRQ RI WKHLU )LUVW $PHQGPHQW ULJKWV  WKH DSSHQGL[ WR WKLV FDVH  'RZQLHHWDOY&LW\RI 1R 1R 'RZQLHHWDOY&LW\RI  0LGGOHEXUJ+JWVHWDO 0LGGOHEXUJ+JWVHWDO

GHIHQGDQWVYLRODWHGWKHLUULJKWVXQGHU2KLRODZDQGWKH UHTXLUHPHQWVLVDSSDUHQWQRWRQO\IURPWKHLUXVHRIGLIIHUHQW GHIHQGDQWVFRQVSLUHGWRGHSULYHWKHPRIWKHLUFRQVWLWXWLRQDO WHUPLQRORJ\WKHZRUGVmGHWHUPLQDWLRQlDQGmGLUHFWLRQlWR DQGVWDWHODZULJKWV$ORQJZLWKWKHFRPSODLQW'RZQLHDQG GHVFULEHWKHWZRUHTXLUHPHQWVEXWDOVRIURPWKHLUXVHRIWKH :KHDWILOHGDPRWLRQIRUDWHPSRUDU\UHVWUDLQLQJRUGHUDQGD ZRUGmH[SUHVVlWRPRGLI\HDFKRIWKHWZRUHTXLUHPHQWV SUHOLPLQDU\LQMXQFWLRQEXWDIWHUDKHDULQJRQsXO\WKH GLVWULFWFRXUWGHQLHGWKHPRWLRQ2Q1RYHPEHUWKH 7KHVHFRQGVHQWHQFHH[SODLQVWKHHIIHFWRIDGLVWULFWFRXUWjV 8QLWHG 6WDWHV VXEVWLWXWHG LWVHOI IRU GHIHQGDQWV 6LHJHO DQG IDLOXUHWRFRPSO\ZLWKWKHmGHWHUPLQDWLRQlDQGmGLUHFWLRQl 6FKQHLGHU SXUVXDQW WR WKH )HGHUDO (PSOR\HHV /LDELOLW\ UHTXLUHPHQWV  ,QGHHG LQ WKH VHFRQG VHQWHQFH WKH GUDIWHUV 5HIRUPDQG7RUW&RPSHQVDWLRQ$FWRIWKHm:HVWIDOO XQGHUVFRUHG WKH LPSRUWDQFH RI WKH mGHWHUPLQDWLRQl DQG $FWl FRGLILHG DW  86& †   7KH VXEVWLWXWLRQ mGLUHFWLRQlUHTXLUHPHQWVE\SURYLGLQJWKDWDQ\FRXUWRUGHU FRYHUHG DOO WKH FODLPV DOOHJHG LQ WKH SODLQWLIIVj FRPSODLQW KRZHYHU GHVLJQDWHG WKDW GRHV QRW FRPSO\ ZLWK ERWK WKH H[FHSW WKRVH DOOHJLQJ YLRODWLRQV RI WKH 8QLWHG 6WDWHV mGHWHUPLQDWLRQl DQG mGLUHFWLRQl UHTXLUHPHQWV mVKDOO QRW &RQVWLWXWLRQ6HH86&†E  $7KH8QLWHG WHUPLQDWHWKHDFWLRQDVWRDQ\RIWKHFODLPVRUSDUWLHVlDQG 6WDWHVWKHQILOHGDPRWLRQWRGLVPLVVIRUODFNRIVXEMHFWPDWWHU VKDOO EH VXEMHFW WR ODWHU UHYLVLRQ  )HG5&LY3 E MXULVGLFWLRQ SXUVXDQW WR )HGHUDO 5XOH RI &LYLO 3URFHGXUH 0RUHRYHU LQFOXVLRQ RI WKH ZRUGV mKRZHYHU GHVLJQDWHGl E $OVRRQ1RYHPEHU6LHJHODQG6FKQHLGHU VLJQDOV WKH GUDIWHUVj FRQFHUQ WKDW WKH UHTXLUHPHQWV QRW EH ILOHG D PRWLRQ WR GLVPLVV IRU IDLOXUH WR VWDWH D FODLP XSRQ FLUFXPYHQWHG ZKLFK UHOLHI FRXOG EH JUDQWHG SXUVXDQW WR )HGHUDO 5XOH RI &LYLO3URFHGXUHE  %\ LQFOXGLQJ WKH mH[SUHVV GHWHUPLQDWLRQl DQG mH[SUHVV GLUHFWLRQlUHTXLUHPHQWVWKHGUDIWHUVRI5XOHEDGGUHVVHG 2Q 6HSWHPEHU   WKH GLVWULFW LVVXHG DQ RUGHU mDQRYHUULGLQJFRQFHUQIRUFHUWDLQW\DQGIRUDQH[SUHVVDQG JUDQWLQJWKHJRYHUQPHQWjVPRWLRQWRGLVPLVVDQGJUDQWLQJLQ XQPLVWDNDEOHGHWHUPLQDWLRQRIILQDOLW\LQDPELJXRXVPXOWL SDUW6LHJHOjVDQG6FKQHLGHUjVPRWLRQWRGLVPLVV6HH'RZQLH SDUW\ DQG PXOWLFODLP VLWXDWLRQVl  )6/,& Y 7XOORV Y&LW\RI0LGGOHEXUJ+HLJKWV)6XSSG1'2KLR 3LHUUHPRQW  )G   WK &LU   $V   ,Q UHJDUG WR WKH JRYHUQPHQWjV PRWLRQ WKH GLVWULFW 3URIHVVRU:ULJKWVWDWHVm>5XOHE@SURYLGHVPXFKQHHGHG FRXUW H[SODLQHG WKDW WKH 8QLWHG 6WDWHV FDQ RQO\ EH VXHG FHUWDLQW\ LQ GHWHUPLQLQJ ZKHQ D ILQDO DQG DSSHDODEOH SXUVXDQWWRWKH)HGHUDO7RUW&ODLPV$FWm)7&$l%HFDXVH MXGJPHQWKDVEHHQHQWHUHG>,@I>WKHFRXUW@GRHVFKRRVHWR 'RZQLHDQG:KHDWGLGQRWDOOHJHLQWKHLUFRPSODLQWWKDWWKH\ HQWHUVXFKDILQDORUGHU>WKHFRXUW@PXVWGRVRLQDGHILQLWH KDGH[KDXVWHGWKHLUDGPLQLVWUDWLYHUHPHGLHVDVUHTXLUHGE\WKH XQPLVWDNDEOHPDQQHUl&KDUOHV$ODQ:ULJKW$UWKXU5 $FW86&†DDQGEHFDXVHDOORIWKHLUVWDWHODZ 0LOOHU 0DU\.D\.DQH)HGHUDO3UDFWLFHDQG3URFHGXUH FODLPVIHOOXQGHUH[FHSWLRQVWRWKH8QLWHG6WDWHVjV JHQHUDO ZDLYHU RI VRYHUHLJQ LPPXQLW\  86& † K WKH  %ODFN V /DZ 'LFWLRQDU\ GHILQHV H[SUHVV DV >F@OHDUO\ DQG XQPLVWDNDEO\ FRPPXQLFDWHGl %ODFN V /DZ 'LFWLRQDU\  WK HG  2WKHU GLFWLRQDULHV JLYH VXEVWDQWLDOO\ VLPLODU GHILQLWLRQV 6HH HJ 7KH 8QLWHG 6WDWHV PD\ VXEVWLWXWH LWVHOI DV WKH SDUW\ GHIHQGDQW LQ FLYLO :HEVWHUjV 7KLUG 1HZ ,QWHUQDWLRQDO 'LFWLRQDU\   GHILQLQJ

VXLWV DJDLQVW IHGHUDO HPSOR\HHV m>X@SRQ FHUWLILFDWLRQ E\ WKH $WWRUQH\ H[SUHVV DV GLUHFWO\ DQG GLVWLQFWO\ VWDWHG RU H[SUHVVHG UDWKHU WKDQ *HQHUDO WKDW WKH GHIHQGDQW HPSOR\HH ZDV DFWLQJ ZLWKLQ WKH VFRSH RI KLV LPSOLHG RU OHIW WR LQIHUHQFH  GHILQLWH FOHDU H[SOLFLW XQPLVWDNDEOH 7KH RIILFH RU HPSOR\PHQW DW WKH WLPH RI WKH LQFLGHQW RXW RI ZKLFK WKH FODLP 0HUULDP :HEVWHU 'LFWLRQDU\   GHILQLQJ H[SUHVV DV mH[SOLFLW

DURVHl  86& † G  H[DFW SUHFLVHVSHFLILFl  'RZQLHHWDOY&LW\RI 1R 1R 'RZQLHHWDOY&LW\RI  0LGGOHEXUJ+JWVHWDO 0LGGOHEXUJ+JWVHWDO

BBBBBBBBBBBBBBBBBBBBB GLVWULFWFRXUWJUDQWHGWKHJRYHUQPHQWjVPRWLRQWRGLVPLVVIRU ODFNRIVXEMHFWPDWWHUMXULVGLFWLRQ &21&855(1&( BBBBBBBBBBBBBBBBBBBBB ,QUHJDUGWR6LHJHOjVDQG6FKQHLGHUjVPRWLRQWRGLVPLVVWKH GLVWULFWFRXUWILUVWFRQFOXGHGWKDW:KHDWjVFRPSODLQWDJDLQVW :,//,$0 67$))25' 'LVWULFW sXGJH VSHFLDOO\ 6LHJHODQG6FKQHLGHUIDLOHGWRVWDWHDFODLPXSRQZKLFKUHOLHI FRQFXUULQJ7KHPDMRULW\FRQFOXGHVLQ3DUW,,WKDWWKHGLVWULFW FRXOGEHJUDQWHGEHFDXVHWKHFRPSODLQWGLGQRWDOOHJHWKDW FRXUWjVFHUWLILFDWLRQVDWLVILHGWKHmH[SUHVVGHWHUPLQDWLRQlDQG 6LHJHODQG6FKQHLGHUYLRODWHG:KHDWjVFRQVWLWXWLRQDOULJKWV mH[SUHVVGLUHFWLRQlUHTXLUHPHQWVRI5XOHE%HFDXVH, 7KHFRXUWQH[WFRQFOXGHGWKDW&RXQW,,,RIWKHFRPSODLQWLQ ILQGVXFKFRQFOXVLRQERWKSUREOHPDWLFDQGXQQHFHVVDU\WRWKH ZKLFK'RZQLHDOOHJHGWKDWKHKDGEHHQUHWDOLDWHGDJDLQVWIRU GHFLVLRQ KHUH , ZULWH VHSDUDWHO\ WR H[SODLQ ZK\ , WKLQN KLVmSULRUXVHRIWKHOHJDOV\VWHPlDOVRIDLOHGWRVWDWHDFODLP DSSHOODWHMXULVGLFWLRQH[LVWVLQWKLVFDVH XSRQZKLFKUHOLHIFRXOGEHJUDQWHGEHFDXVHWKHFRPSODLQWGLG QRWDOOHJHWKDW6LHJHODQG6FKQHLGHUEORFNHG'RZQLHjVDFFHVV $ WRWKHFRXUWV)LQDOO\WKHGLVWULFWFRXUWFRQFOXGHGWKDW&RXQWV , ,, DQG ;, RI 'RZQLHjV FRPSODLQW IDLOHG WR VWDWH D FODLP 5XOHEVWDWHVLQUHOHYDQWSDUW XSRQZKLFKUHOLHIFRXOGEHJUDQWHGLQVRIDUDVWKH\UHOLHGRQ WKH86&XVWRPV6HUYLFHjVUHWHQWLRQRUGLVVHPLQDWLRQRIWKH :KHQPRUHWKDQRQHFODLPIRUUHOLHILVSUHVHQWHGLQDQ mEODFNEDOOl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jVFRPSODLQWGLGQRW GLUHFWLRQDQ\RUGHURURWKHUIRUPRIGHFLVLRQKRZHYHU UHO\ RQ WKH UHWHQWLRQ RU GLVVHPLQDWLRQ RI WKH PHPR WKH GHVLJQDWHGZKLFKDGMXGLFDWHVIHZHUWKDQDOOWKHFODLPV GLVWULFW FRXUW GHQLHG 6LHJHOjV DQG 6FKQHLGHUjV PRWLRQ WR RUWKHULJKWVDQGOLDELOLWLHVRIIHZHUWKDQDOOWKHSDUWLHV GLVPLVVILQGLQJDOVRWKDWWKH\ZHUHQRWHQWLWOHGWRTXDOLILHG VKDOOQRWWHUPLQDWHWKHDFWLRQDVWRDQ\RIWKHFODLPVRU LPPXQLW\ SDUWLHVDQGWKHRUGHURURWKHUIRUPRIGHFLVLRQLVVXEMHFW WR UHYLVLRQ DW DQ\ WLPH EHIRUH WKH HQWU\ RI MXGJPHQW 2Q 2FWREHU   6LHJHO DQG 6FKQHLGHU PRYHG IRU DGMXGLFDWLQJDOOWKHFODLPVDQGWKHULJKWVDQGOLDELOLWLHVRI UHFRQVLGHUDWLRQRIWKHGLVWULFWFRXUWjVSDUWLDOGHQLDORIWKHLU DOOWKHSDUWLHV PRWLRQ WR GLVPLVV  6LHJHO DQG 6FKQHLGHU DUJXHG WKDW WKH 3ULYDF\$FWHQWLUHO\SUHFOXGHG'RZQLHjV)LUVW$PHQGPHQW )HG5&LY3E7KHILUVWVHQWHQFHRIWKHUXOH UHWDOLDWLRQFODLPVDJDLQVWWKHP2Q6HSWHPEHUWKH H[SODLQVZKDWDGLVWULFWFRXUWPXVWGRWRHQWHUDSDUWLDOILQDO GLVWULFW FRXUW LVVXHG DQ RUGHU JUDQWLQJ WKH PRWLRQ IRU MXGJPHQW6SHFLILFDOO\WKHFRXUWPXVWPDNHERWKDQH[SUHVV UHFRQVLGHUDWLRQDQGDPHQGLQJLWVRUGHURI6HSWHPEHU GHWHUPLQDWLRQWKDWWKHUHLVQRMXVWUHDVRQIRUGHOD\DQGDQ WR GLVPLVV DOO RI 'RZQLHjV FODLPV DJDLQVW 6LHJHO DQG H[SUHVVGLUHFWLRQIRUWKHHQWU\RIMXGJPHQW)HG5&LY3 6FKQHLGHUSXUVXDQWWR)HGHUDO5XOHRI&LYLO3URFHGXUHH E7KDWWKHGUDIWHUVLQWHQGHGWZRVHSDUDWHDQGGLVWLQFW RQWKHVDPHGD\WKHFRXUWHQWHUHGMXGJPHQWIRU6LHJHODQG  'RZQLHHWDOY&LW\RI 1R 1R 'RZQLHHWDOY&LW\RI  0LGGOHEXUJ+JWVHWDO 0LGGOHEXUJ+JWVHWDO

6FKQHLGHU7KHFRXUWFRQFOXGHGWKDWWKH3ULYDF\$FWRI FRPSUHKHQVLYHOHJLVODWLYHVFKHPHWKDWSURYLGHVDPHDQLQJIXO DOVRH[LVWHGDVDFRPSUHKHQVLYHOHJLVODWLYHVFKHPHSURYLGLQJ UHPHG\SUHFOXGHV'RZQLHjV%LYHQVDFWLRQDJDLQVW6LHJHODQG DPHDQLQJIXOUHPHG\DJDLQVWWKH8QLWHG6WDWHVIRUWKHFUHDWLRQ 6FKQHLGHURQ&RXQW,,,RIKLVFRPSODLQW RIWKHmEODFNEDOOlPHPRDQGWKHFRXUWWKHQIXUWKHUKHOGWKDW WKHHIIHFWRILWVFRQFOXVLRQUHJDUGLQJWKHFUHDWLRQRIWKHPHPR ,9&21&/86,21 ZDVmGLVSRVLWLYHRIWKHUHVWRIWKHFODLPVDJDLQVW6LHJHODQG 6FKQHLGHUls$DW6HSW2UGHU*UDQWLQJ'HIVj )RUWKHIRUHJRLQJUHDVRQVZH$)),50WKHRUGHUVRIWKH 0RWIRU5HFRQV)ROORZLQJWKHGLVWULFWFRXUWjVFHUWLILFDWLRQ GLVWULFW FRXUW GLVPLVVLQJ 'RZQLHjV FRQVWLWXWLRQDO FODLPV XQGHU )HGHUDO 5XOH RI &LYLO 3URFHGXUH E 'RZQLH DQG DJDLQVW6LHJHODQG6FKQHLGHU :KHDWILOHGDQRWLFHRIDSSHDOUHJDUGLQJWKHGLVWULFWFRXUWjV GLVPLVVDORIWKHLUFODLPVDJDLQVW6LHJHODQG6FKQHLGHU ,,s85,6',&7,21 6LHJHO DQG 6FKQHLGHU FRQWHQG WKDW WKLV FRXUW ODFNV MXULVGLFWLRQWRKHDU'RZQLHjVDSSHDOEHFDXVHWKHGLVWULFWFRXUW GLGQRWSURSHUO\FHUWLI\IRUDSSHDOLWVGLVPLVVDORI'RZQLHjV FRQVWLWXWLRQDOFODLPVDJDLQVWWKHP:HGLVDJUHH)ROORZLQJ LWVGLVPLVVDORI'RZQLHjVFRQVWLWXWLRQDOFODLPVDJDLQVW6LHJHO DQG 6FKQHLGHU LQ WZR RUGHUV WKH GLVWULFW FRXUW JUDQWHG 'RZQLHjVPRWLRQWRDSSHDOWKRVHRUGHUVSXUVXDQWWR)HGHUDO 5XOHRI&LYLO3URFHGXUHE8QGHU5XOHEDSDUW\PD\ DSSHDODGLVWULFWFRXUWRUGHUSULRUWRWKHXOWLPDWHGLVSRVLWLRQ RIDFDVHEXWWKHGLVWULFWFRXUWLVILUVWUHTXLUHGWRFHUWLI\WKDW WKH RUGHU LV DSSHDODEOH  6HH ((2& Y 1RUWKZHVW $LUOLQHV ,QF)GWK&LU7RFHUWLI\DQRUGHU IRULPPHGLDWHDSSHDODGLVWULFWFRXUWPXVWmH[SUHVVO\

 $OWKRXJK WKH QRWLFH RI DSSHDO VWDWHV WKDW 'RZQLH DQG :KHDW DSSHDO WKH GLVWULFW FRXUWjV GHFLVLRQ 'RZQLH VWDWHV LQ KLV EULHI RQ DSSHDO WKDW WKH DSSHDO mLV RQ EHKDOI RI SODLQWLII 'RZQLH RQO\l $SSHOODQWjV %U DW 

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

&&RXQW,,, GLUHFWWKHHQWU\RIILQDOMXGJPHQWDVWRRQHRUPRUHEXWIHZHU WKDQDOOWKHFODLPVRUSDUWLHVLQDFDVHlDQGmH[SUHVV>O\@ 7KH GLVWULFW FRXUW GLVPLVVHG &RXQW ,,, RI 'RZQLHjV GHWHUPLQ>H@ WKDW WKHUH LV QR MXVW UHDVRQ WR GHOD\ DSSHOODWH FRPSODLQWRQWKHJURXQGWKDWm>W@KH&RXQWUDLVHVDUHWDOLDWLRQ UHYLHZl*HQ$FTXLVLWLRQ,QFY*HQ&RUS,QF)G FODLP    EXW WKDW FODLP UHVWV RQ WKH SUHPLVH WKDW WKH WK&LUTXRWDWLRQVRPLWWHG6LHJHODQG GHIHQGDQWVj UHWDOLDWRU\ DFWLRQV YLRODWHG 'RZQLHjV ULJKW RI 6FKQHLGHU DUJXH WKDW LQ LWV RUGHU FHUWLI\LQJ 'RZQLHjV DFFHVV WR WKH FRXUWV  1RZKHUH LQ WKH FRPSODLQW KRZHYHU LPPHGLDWHDSSHDORQ'HFHPEHUWKHGLVWULFWFRXUW GRHV'RZQLHVXJJHVWKRZWKHGHIHQGDQWVPLJKWKDYHEORFNHG GLG QRW mH[SUHVVO\ GLUHFW HQWU\ RI ILQDO MXGJPHQW IRU WKH KLVDFFHVVWRWKHFRXUWVl'RZQLH)6XSSGDW IHGHUDOGHIHQGDQWVl$SSHOOHHVj%UDWm,QVWHDGWKHFRXUW &RXQW,,,RI'RZQLHjVFRPSODLQWDOOHJHG VLPSO\ UHIHUUHG WR LWV HQWU\ RI MXGJPHQW RI 6HSWHPEHU  l  $SSHOOHHVj %U DW   $FFRUGLQJ WR 6LHJHO DQG 7KH DFWLRQV RI WKH GHIHQGDQWV LQ SXEOLVKLQJ IDOVH DQG 6FKQHLGHUWKLVmSURFHGXUDODQRPDO\lFUHDWHVDVLWXDWLRQLQ GHIDPDWRU\LQIRUPDWLRQDERXWSODLQWLIIVFRQVWLWXWHV>VLF@ ZKLFK WKH SODLQWLIIjV FHUWLILHG QRWLFH RI DSSHDO LV XQWLPHO\ DYLRODWLRQRISODLQWLIIVj)LUVW$PHQGPHQWULJKWRIDFFHVV EHFDXVHLWZDVILOHGPRUHWKDQVL[W\GD\VDIWHUWKHHQWU\RIWKH WRWKHFRXUWVLQWKDWWKHDFWLRQVRIWKHGHIHQGDQWVLV>VLF@ GLVWULFWFRXUWjV6HSWHPEHURUGHU6HH)HG5$SS LQUHWDOLDWLRQIRUSODLQWLII'RZQLHjVSULRUXVHRIWKHOHJDO 3D  % V\VWHPWRYLQGLFDWHKLVULJKWV :H KDYH KHOG KRZHYHU WKDW m>W@KH ILUVW VWHS LQ s$DW&RPSOˆ 'RZQLHQRZDUJXHVWKDWLQWKLV FHUWLILFDWLRQHQWU\RISDUWLDOILQDOMXGJPHQWLVVDWLVILHGZKHUH FRXQWKHZDVDOOHJLQJQRWWKDWWKHGHIHQGDQWVSUHYHQWHGKLP VRPHGHFLVLRQPDGHE\WKHGLVWULFWFRXUWXOWLPDWHO\GLVSRVHV IURP DFFHVVLQJ WKH FRXUWV EXW mWKDW VRPH RI WKH DGYHUVH RIRQHRUPRUHEXWIHZHUWKDQDOORIWKHFODLPVRUSDUWLHVLQD DFWLRQVWDNHQDJDLQVWKLPZHUHLQUHWDOLDWLRQIRUKLPKDYLQJ PXOWLFODLPPXOWLSDUW\DFWLRQl*HQ$FTXLVLWLRQ)GDW DVVHUWHGKLVOHJDOULJKWVWKURXJKWKHFRXUWVl$SSHOODQWjV%U  HPSKDVLV DGGHG  7KH GLVWULFW FRXUW QHHG QRW DW HQWHU WKH SDUWLDO ILQDO MXGJPHQW LQ LWV FHUWLILFDWLRQ RI DQ LPPHGLDWH DSSHDO SXUVXDQW WR 5XOH E LW VLPSO\ PXVW 'RZQLHjVLQWHUSUHWDWLRQRI&RXQW,,,LVSODXVLEOH+RZHYHU UHFRJQL]HWKDWVXFKDSDUWLDOILQDOMXGJPHQWKDVEHHQHQWHUHG ZH QRQHWKHOHVV FRQFOXGH WKDW WKH GLVWULFW FRXUW SURSHUO\ ,QLWVFHUWLILFDWLRQRI'RZQLHjVDSSHDOUHJDUGLQJWKHGLVPLVVDO GLVPLVVHG&RXQW,,,$VZHH[SODLQHGDERYHWKHRQO\mIDOVH RIKLVFODLPVDJDLQVW6LHJHODQG6FKQHLGHUWKHGLVWULFWFRXUW DQGGHIDPDWRU\lLQIRUPDWLRQDWLVVXHLQWKLVFDVHDUHWKHIDOVH UHFRJQL]HGWKDWLWVH[SUHVVHQWU\RIMXGJPHQWIRU6LHJHODQG UHFRUGV WKDW 6LHJHO DQG 6FKQHLGHU DOOHJHGO\ FUHDWHG 6FKQHLGHU RQ 6HSWHPEHU   ILQDOO\ GLVSRVHG RI DOO PDLQWDLQHGDQGGLVVHPLQDWHG7KHUHIRUHWKHVDPHDQDO\VLV 'RZQLHjV FODLPV DJDLQVW 6LHJHO DQG 6FKQHLGHU  7KLV LV WKDWDSSOLHGWR&RXQWV,,,DQG;,RI'RZQLHjVFRPSODLQW VXIILFLHQWIRUFHUWLILFDWLRQSXUSRVHVDQGWKHUHIRUH'RZQLH DSSOLHV WR &RXQW ,,, ZH KROG WKDW WKH 3ULYDF\ $FW DV D SURSHUO\DQGWLPHO\ILOHGKLVQRWLFHRIDSSHDOIURPWKHGLVWULFW FRXUWjVRUGHUJUDQWLQJ5XOHEFHUWLILFDWLRQ  $V 6LHJHO DQG 6FKQHLGHU QRWH 'RZQLH FDQQRW LQWHQG &RXQW ,,, WR DSSO\ WR WKH ILUVW WZR SDUWV RI 6LHJHOjV DOOHJHG mFDPSDLJQ WR GLVFUHGLWl KLP o WKH FUHDWLRQ DQG PDLQWHQDQFH RI IDOVH UHFRUGV 7KH mEODFNEDOO PHPRl ZDV ZULWWHQ LQ  DQG WKH ILUHDUPV UHYRFDWLRQ RFFXUUHG LQ  EXW 'RZQLH GLG QRW ILOH DQ\ DFWLRQ LQ WKH FRXUWV XQWLO   'RZQLHHWDOY&LW\RI 1R 1R 'RZQLHHWDOY&LW\RI  0LGGOHEXUJ+JWVHWDO 0LGGOHEXUJ+JWVHWDO

,,,$1$/<6,6 )6XSS   (' 9D  0LWWOHPDQ Y 86 7UHDVXU\)6XSS''&3DWWHUVRQY $6WDQGDUGRI5HYLHZ )%,)6XSSQ'1sDIIjG )GG&LUDQGFHUWGHQLHG86VHH 7KLV FRXUW UHYLHZV GH QRYR D GLVWULFW FRXUWjV JUDQW RI D DOVR.KDOIDQLY6HFj\'HSjWRI9HWHUDQV$IIDLUV:/ PRWLRQWRGLVPLVVSXUVXDQWWR)HGHUDO5XOHRI&LYLO3URFHGXUH DW ('1<0DUFKFI$OH[DQGHUY E 6HH3IHQQLJY+RXVHKROG&UHGLW6HUYV,QF )%,)6XSS''&3ULYDF\$FWGLG )GWK&LU,QUHYLHZLQJD5XOHE  QRW SUHFOXGH %LYHQV DFWLRQ DJDLQVW IHGHUDO RIILFLDOV DFWLQJ PRWLRQ WR GLVPLVV WKLV FRXUW WUHDWV DOO ZHOOSOHDGHG RXWVLGH WKH VFRSH RI WKHLU HPSOR\PHQW  ,Q SDUWLFXODU LQ DOOHJDWLRQV LQ WKH FRPSODLQW DV WUXH DQG WKH FRXUW ILQGV 0LWWOHPDQDIRUPHUHPSOR\HHRIWKH867UHDVXU\DOOHJHG GLVPLVVDO SURSHU RQO\ mLI LW DSSHDUV EH\RQG GRXEW WKDW WKH WKDWVKHKDGEHHQILUHGLQUHWDOLDWLRQIRUmZKLVWOHEORZLQJl SODLQWLIIFDQSURYHQRVHWRIIDFWVLQVXSSRUWRIWKHFODLPVWKDW DQGWKDWIDOVHLQIRUPDWLRQFRQWDLQHGLQWKHGHSDUWPHQWjVILOHV ZRXOGHQWLWOHKLPRUKHUWRUHOLHIl,GTXRWDWLRQRPLWWHG LQYROYLQJWKHLQFLGHQWSUHYHQWHGKHUIURPREWDLQLQJ IXWXUH HPSOR\PHQW0LWWOHPDQ)6XSSDW %%LYHQV$FWLRQn3ULYDF\$FW ,QVXPDOWKRXJKIHZRWKHUIHGHUDOFRXUWVKDYHUXOHGRQWKLV 7KHGLVWULFWFRXUWFRQFOXGHGWKDWWKH3ULYDF\$FWRI LVVXH ZH FRQFOXGH WKDW WKH 3ULYDF\ $FW RI  LV D SUHFOXGHGDOORI'RZQLHj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VHHDOVRsRQHVY79$)G WK&LU+RZHYHUWKH6XSUHPH&RXUWKDVDOVRKHOG  'RZQLH DOVR DUJXHV WKDW LQ DW OHDVW RQH FDVH D IHGHUDO FRXUW KDV WKDWD%LYHQVUHPHG\ZLOOQRWEHLPSOLHGZKHUHWKHUHDUH SHUPLWWHG D SODLQWLII WR VHHN %LYHQV UHOLHI LQ FLUFXPVWDQFHV VLPLODU WR KLV mµVSHFLDO IDFWRUV FRXQVHOOLQJ KHVLWDWLRQ LQ WKH DEVHQFH RI ,Q .DUWVHYD Y 'HSjW RI 6WDWH  )G  '& &LU  WKH SODLQWLII DIILUPDWLYH DFWLRQ E\ &RQJUHVVjl RU  m&RQJUHVV KDV EURXJKW D %LYHQV DFWLRQ DJDLQVW IHGHUDO RIILFLDOV DOOHJLQJ WKDW VKH KDG SURYLGHGDQDOWHUQDWLYHUHPHG\ZKLFKLWH[SOLFLWO\GHFODUHGWR EHHQ ILUHG IURP KHU MRE ZLWK DQ LQGHSHQGHQW FRQWUDFWRU ZRUNLQJ IRU WKH EHDVXEVWLWXWHIRUUHFRYHU\GLUHFWO\XQGHUWKHFRQVWLWXWLRQDQG 6WDWH 'HSDUWPHQW RQ WKH EDVLV RI WKH 'HSDUWPHQWj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jV PHPRV ZHUH IDOVH EXW VLPSO\ XQGHU  86& †  $V 6LHJHO DQG 6FKQHLGHU SRLQW RXW 'RZQLH GLG WKDW WKH\ IXQFWLRQDOO\ GLVTXDOLILHG KHU IURP IXWXUH HPSOR\PHQW ZLWKRXW QRW UDLVH WKHVH FODLPV LQ WKH GLVWULFW FRXUW DQG KH KDV WKHUHIRUH ZDLYHG RXU GXH SURFHVV ,G DW  6HFRQG WKH '& &LUFXLW LQ .DUWVHYD GLG QRW FRQVLGHUDWLRQ RI WKHP 6HH %ODNHO\ Y 8QLWHG 6WDWHV  )G   DGGUHVV ZKHWKHU WKH 3ULYDF\ $FW ZRXOG SUHFOXGH WKH SODLQWLIIjV %LYHQV Q WK &LU  DFWLRQ  'RZQLHHWDOY&LW\RI 1R 1R 'RZQLHHWDOY&LW\RI  0LGGOHEXUJ+JWVHWDO 0LGGOHEXUJ+JWVHWDO

GHWHUPLQDWLRQj XQGHU WKH 3ULYDF\ $FWl  ,G DW   YLHZHGDVHTXDOO\HIIHFWLYHlsRQHV)GDWTXRWLQJ $OWKRXJKZHQHHGQRWH[SOLFLWO\DGRSWWKHUHDVRQLQJRIWKH %LYHQV86DW '&&LUFXLWLQ7RRODVSUDVKDGDWWKLVWLPHZHQRWHWKDWZH ILQG WKDW FRXUWjV UHDVRQLQJ SHUVXDVLYH UHJDUGLQJ WKH ,Q WZR FDVHV LQ WKH V WKH 6XSUHPH &RXUW IXUWKHU LQWHUSUHWDWLRQ RI mLQWHQWLRQDO RU ZLOOIXOl LQ WKH GDPDJHV GHOLQHDWHGWKHWZRH[FHSWLRQVWRWKH%LYHQVGRFWULQH,Q%XVK SURYLVLRQ RI WKH 3ULYDF\ $FW WR LQFOXGH )LUVW $PHQGPHQW Y /XFDV WKH 6XSUHPH &RXUW KHOG WKDW D 1$6$ DHURVSDFH UHWDOLDWLRQ HQJLQHHUFRXOGQRWEULQJD%LYHQVDFWLRQDJDLQVWKLVHPSOR\HU IRUUHWDOLDWRU\GHPRWLRQLQYLRODWLRQRIWKH)LUVW$PHQGPHQW )LQDOO\ 'RZQLH SRLQWV RXW WKDW RQO\ D KDQGIXO RI FRXUWV m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l  %XVK Y /XFDV  86     7KH WKDWQRFLUFXLWFRXUWKDVDGGUHVVHGWKLVTXHVWLRQEXWDV6LHJHO %XVK &RXUW H[SODLQHG WKDW m>Z@KHQ &RQJUHVV SURYLGHV DQ DQG 6FKQHLGHU QRWH D QXPEHU RI GLVWULFW FRXUWV KDYH DOWHUQDWLYHUHPHG\LWPD\RIFRXUVHLQGLFDWHLWVLQWHQWE\ DGGUHVVHGWKHTXHVWLRQDQGWKH\KDYHDOOKHOGWKDWWKH3ULYDF\ VWDWXWRU\ ODQJXDJH E\ FOHDU OHJLVODWLYH KLVWRU\ RU SHUKDSV $FW GRHV SUHYHQW SHUVRQV VXFK DV 'RZQLH IURP EULQJLQJ HYHQE\WKHVWDWXWRU\UHPHG\LWVHOIWKDWWKH&RXUWjVSRZHU %LYHQV DFWLRQV DJDLQVW LQGLYLGXDO IHGHUDO RIILFLDOV  6HH VKRXOG QRW EH H[HUFLVHGl  ,G DW   +RZHYHU m>L@Q WKH 6XOOLYDQ Y 86 3RVWDO 6HUY  ) 6XSS   DEVHQFHRIVXFKDFRQJUHVVLRQDOGLUHFWLYHWKHIHGHUDOFRXUWV :'1<:LOOLDPVY'HSjWRI9HWHUDQ$IIDLUV PXVW PDNH WKH NLQG RI UHPHGLDO GHWHUPLQDWLRQ WKDW LV DSSURSULDWHIRUDFRPPRQODZWULEXQDOSD\LQJSDUWLFXODUKHHG    WR DQ\ VSHFLDO IDFWRUV FRXQVHOOLQJ KHVLWDWLRQ EHIRUH DXWKRUL]LQJDQHZNLQGRIIHGHUDOOLWLJDWLRQl,G7KHIDFW  ,Q LWV WHVW IRU DQ DGYHUVH GHWHUPLQDWLRQ WKH '& &LUFXLW DSSOLHG WKH WKDW&RQJUHVVFRQVWUXFWHGDQmHODERUDWHUHPHGLDOV\VWHPlIRU VWDQGDUG WKDW ZH XVH LQ )LUVW $PHQGPHQW UHWDOLDWLRQ FDVHV 6HH 7KDGGHXV DGGUHVVLQJ YLRODWLRQV RI IHGHUDO HPSOR\HHVj ULJKWV n ; Y %ODWWHU  )G   WK &LU  HQ EDQF LQFOXGLQJ YLRODWLRQV RI WKHLU )LUVW $PHQGPHQW ULJKWV n  FRQVWLWXWHGDVSHFLDOIDFWRUVXIILFLHQWIRUWKH&RXUWWRUHIXVH ,Q KLV EULHI RQ DSSHDO 'RZQLH DUJXHV WKDW KLV )LIWK $PHQGPHQW WRLPSO\D%LYHQVUHPHG\,GDW GXH SURFHVV ULJKWV ZHUH DOVR YLRODWHG E\ WKH GHIHQGDQWVj DFWLRQ mDSSHOODQW KDV VXIILFLHQWO\ SOHDG D GHQLDO RI KLV ULJKW WR VHHN HPSOR\PHQW LQ KLV FKRVHQ SURIHVVLRQ DQG WKH ODEHOLQJ RI LW DV D YLRODWLRQ RI WKH )LUVW ,Q6FKZHLNHUY&KLOLFN\WKH&RXUWKHOGWKDWLQGLYLGXDOV $PHQGPHQW UDWKHU WKDQ WKH )LIWK $PHQGPHQW VKRXOG EH RI QR DOOHJLQJWKDWWKHLUVRFLDOVHFXULW\EHQHILWVKDGEHHQWHUPLQDWHG FRQVHTXHQFH LQ WHUPV RI WKH FRXUWjV GHWHUPLQDWLRQ WKDW D %LYHQV VXLW LV LQYLRODWLRQRIWKHLUGXHSURFHVVULJKWVFRXOGQRWEULQJ%LYHQV DSSURSULDWHl $SSHOODQWjV %U DW  +RZHYHU FODLPV DOOHJLQJ YLRODWLRQV DFWLRQV DJDLQVW IHGHUDO VRFLDO VHFXULW\ DGPLQLVWUDWRUV RI GXH SURFHVV DUH GLIIHUHQW WKDQ FODLPV DOOHJLQJ UHWDOLDWLRQ LQ YLRODWLRQ RI 6FKZHLNHU Y &KLOLFN\  86    %HFDXVH D WKH )LUVW $PHQGPHQW 'RZQLH GRHV PHQWLRQ HPSOR\PHQW LQ &RXQW , RI KLV FRPSODLQW EXW KH QRZKHUH DUJXHV WKDW WKH GHIHQGDQWV DGYHUVHO\ DIIHFWHG GDPDJHVUHPHG\ZDVQRWmLQFOXGHGLQWKHHODERUDWHUHPHGLDO KLV HPSOR\PHQW VWDWXV ZLWKRXW GXH SURFHVV  7KHUHIRUH WKLV DUJXPHQW LV VFKHPHGHYLVHGE\&RQJUHVVlLWZDVXQDYDLODEOH,GDW D QHZ FODLP DQG DV 'RZQLH GLG QRW UDLVH WKLV FODLP LQ WKH GLVWULFW FRXUW $FFRUGLQJWRWKH&RXUW ZH ZLOO QRW DGGUHVV RQ DSSHDO 6HH LQIUDQRWH  %ODNHO\   )G DW  Q  'RZQLHHWDOY&LW\RI 1R 1R 'RZQLHHWDOY&LW\RI  0LGGOHEXUJ+JWVHWDO 0LGGOHEXUJ+JWVHWDO

>7@KHFRQFHSWRImVSHFLDOIDFWRUVFRXQVHOOLQJKHVLWDWLRQ FRQVWLWXWLRQDOULJKWVLQUHWDOLDWLRQIRUEORZLQJWKHZKLVWOHRQ LQ WKH DEVHQFH RI DIILUPDWLYH DFWLRQ E\ &RQJUHVVl KDV FRUUXSWJRYHUQPHQWDOFRQGXFWl$SSHOODQWjV%UDW:KLOH SURYHG WR LQFOXGH DQ DSSURSULDWH MXGLFLDO GHIHUHQFH WR WKH3ULYDF\$FWGRHVQRWSURYLGHDVHSDUDWHGDPDJHVUHPHG\ LQGLFDWLRQV WKDW FRQJUHVVLRQDO LQDFWLRQ KDV QRW EHHQ IRU WKH LQWHQWLRQDO RU ZLOOIXO FUHDWLRQ PDLQWHQDQFH RU LQDGYHUWHQW:KHQWKHGHVLJQRID*RYHUQPHQWSURJUDP GLVVHPLQDWLRQRIIDOVHUHFRUGVLQUHWDOLDWLRQIRUDQLQGLYLGXDOjV VXJJHVWV WKDW &RQJUHVV KDV SURYLGHG ZKDW LW FRQVLGHUV )LUVW$PHQGPHQWULJKWVZHEHOLHYHWKDWUHWDOLDWLRQRQDQ\ DGHTXDWH UHPHGLDO PHFKDQLVPV IRU FRQVWLWXWLRQDO EDVLVFOHDUO\FRQVWLWXWHVLQWHQWLRQDORUZLOOIXODFWLRQ,QIDFW YLRODWLRQV WKDW PD\ RFFXU LQ WKH FRXUVH RI LWV WKH '& &LUFXLW UHFHQWO\ KHOG WKDW mLQWHQWLRQDO RU ZLOOIXOl DGPLQLVWUDWLRQ ZH KDYH QRW FUHDWHG DGGLWLRQDO %LYHQV DFWLRQIRUWKHSXUSRVHVRIWKH3ULYDF\$FWGRHVFRPSUHKHQG UHPHGLHV )LUVW $PHQGPHQW UHWDOLDWLRQ 7RRODVSUDVKDG Y %XUHDX RI 3ULVRQV)G'&&LU7RRODVSUDVKDG ,GDW$OWKRXJKWKH&RXUWFRQFHGHGWKDWm>W@KHFUHDWLRQ DIHGHUDOSULVRQHUDOOHJHGWKDWKHKDGEHHQWUDQVIHUUHGDQG RI D %LYHQV UHPHG\ ZRXOG REYLRXVO\ RIIHU WKH SURVSHFW RI UHFODVVLILHGDVDmVSHFLDORIIHQGHUlRQWKHEDVLVRIDIDOVLILHG UHOLHIIRULQMXULHVWKDWPXVWQRZJRXQUHGUHVVHGlWKH&RXUW WUDQVIHUPHPRUDQGXPSUHSDUHGLQUHWDOLDWLRQIRUKLVH[HUFLVH FRQFOXGHG WKDW m&RQJUHVV    KDV QRW IDLOHG WR SURYLGH RIKLV)LUVW$PHQGPHQWULJKWV7KH'&&LUFXLWH[SODLQHG PHDQLQJIXOVDIHJXDUGVRUUHPHGLHVIRUWKHULJKWVRISHUVRQV WKDWLQRUGHUIRUDSODLQWLIIWRVWDWHDFODLPIRUPRQH\GDPDJHV VLWXDWHGDVUHVSRQGHQWVZHUHl,GDW XQGHUWKH3ULYDF\$FWWKHSODLQWLIIPXVWDVVHUWmLQDFFXUDWH UHFRUGVDJHQF\LQWHQWSUR[LPDWHFDXVDWLRQDQGDQµDGYHUVH ,QsRQHVWKLVFRXUWKHOGWKDWD79$HPSOR\HHFRXOGQRW GHWHUPLQDWLRQjl,GDW7KHFRXUWWKHQFRQFOXGHGWKDW EULQJD%LYHQVDFWLRQDJDLQVW79$RIILFLDOVIRUYLRODWLRQVRI mUHWDOLDWRU\IDEULFDWLRQRISULVRQUHFRUGVZRXOGFHUWDLQO\PHHW KLV)LUVWDQG)LIWK$PHQGPHQWULJKWVsRQHV)GDW >RXU@ GHILQLWLRQ RI D ZLOOIXO RU LQWHQWLRQDO 3ULYDF\ $FW :HQRWHGWKDWm>V@LQFH6FKZHLNHUFRXUWVLQVHYHUDOLQVWDQFHV YLRODWLRQlDQGmLQFODLPLQJUHWDOLDWRU\UHFODVVLILFDWLRQDQG KDYHOLPLWHGWKHLULQTXLU\WRZKHWKHU&RQJUHVVKDVHQDFWHGD WUDQVIHU 7RROVSUDVKDG DVVHUWV GHSULYDWLRQ RI KLV )LUVW FRPSUHKHQVLYH DGPLQLVWUDWLYH VFKHPH JRYHUQLQJ WKH DUHD $PHQGPHQW ULJKWV DQG FRQVHTXHQWO\ DQ µDGYHUVH LQYROYHGZKLFKLQGLFDWHVWKDW&RQJUHVVjIDLOXUHWRSURYLGHD GDPDJHVUHPHG\IRUFRQVWLWXWLRQDOYLRODWLRQVZDVGHOLEHUDWH UDWKHU WKDQ LQDGYHUWHQWl ,G FLWDWLRQV RPLWWHG  :H WKHQ VWDWHGWKDWm>L@QWKHILHOGRIIHGHUDOHPSOR\PHQWHYHQLIQR UHPHG\DWDOOKDVEHHQSURYLGHGE\WKH>&LYLO6HUYLFH5HIRUP $FWm&65$l@FRXUWVZLOOQRWFUHDWHD%LYHQVUHPHG\l,G  :H QRWH WKDW WKH 3ULYDF\ $FW LWVHOI VXSSRUWV WKLV FRQFOXVLRQ LQ WKDW %HFDXVH sRQHV ZDV SURYLGHG VRPH UHOLHI XQGHU ERWK WKH WKH $FW H[SOLFLWO\ UHFRJQL]HV WKDW WKH GDPDJHV SURYLVLRQ PD\ EH XVHG WR &65$ DQG WKH (QHUJ\ 5HRUJDQL]DWLRQ $FW m(5$l ZH YLQGLFDWH DW OHDVW RQH NLQG RI YLRODWLRQ RI DQ LQGLYLGXDOjV )LUVW FRQFOXGHGWKDWm>W@KHIDFWWKDW&RQJUHVVKDVGHQLHGKLP $PHQGPHQW ULJKWV 6HH  86& † DH 

FRYHUDJHIRURWKHUNLQGVRISHUVRQQHODFWLRQVLVQRWDJURXQG  IRULPSO\LQJMXGLFLDOUHOLHIEXWUDWKHUDJURXQGIRUGHQ\LQJ 7KH FRXUW DOVR QRWHG LQ UHJDUG WR WKH ZLOOIXOQHVV DQG LQWHQW RI WKH GHIHQGDQWV WKDW m>L@W PDNHV QR GLIIHUHQFH WKDW RWKHU %XUHDX VWDII PHPEHUV MXGLFLDOUHOLHIl,G LQ GHFLGLQJ WR WUDQVIHU 7RRODVSUDVKDG PD\ KDYH UHDVRQDEO\ UHOLHG RQ WKH PHPRUDQGXP 5HDVRQDEOH UHOLDQFH E\ VRPH HPSOR\HHV FDQQRW LPPXQL]H $GGLWLRQDOO\LQ)LVKEXUQY%URZQZHKHOGWKDWDWD[SD\HU DQ DJHQF\ IURP WKH 3ULYDF\ $FW FRQVHTXHQFHV RI HPSOR\LQJ RWKHU FRXOG QRW EULQJ D %LYHQV DFWLRQ DJDLQVW ,56 DJHQWV IRU 7RRODVSUDVKDG LQGLYLGXDOV ZKR DOOHJHGO\ GHOLEHUDWHO\ IDOVLI\ UHFRUGVl   )G DW  TXRWDWLRQ RPLWWHG  'RZQLHHWDOY&LW\RI 1R 1R 'RZQLHHWDOY&LW\RI  0LGGOHEXUJ+JWVHWDO 0LGGOHEXUJ+JWVHWDO

UHJXODWHVWKHFROOHFWLRQPDLQWHQDQFHXVHDQGGLVVHPLQDWLRQ YLRODWLRQV RI KHU )RXUWK $PHQGPHQW ULJKWV  )LVKEXUQ Y RILQIRUPDWLRQFRQFHUQLQJLQGLYLGXDOVlTXRWDWLRQRPLWWHG  %URZQ)GWK&LU:HVWDWHGWKDW $OWKRXJK &RXQWV , DQG ;, JHQHUDOO\ UHIHU WR mDFWLRQVl RU m&RQJUHVVKDVSURYLGHGDGDPDJHVUHPHG\IRUWKHUHFNOHVVRU mDFWVlE\WKHGHIHQGDQWVDOOWKUHHSDUWVRI6LHJHOjVDOOHJHG LQWHQWLRQDOGLVUHJDUGRI,QWHUQDO5HYHQXH&RGH3URYLVLRQVE\ mFDPSDLJQWRGLVFUHGLWl'RZQLHDVGHVFULEHGLQ'RZQLHjV ,56HPSOR\HHVLQFROOHFWLQJWD[HV)XUWKHUPRUH&RQJUHVV FRPSODLQW LQYROYHG WKH FUHDWLRQ PDLQWHQDQFH RU XQHTXLYRFDOO\ VWDWHG WKDW >VXFK SURYLVLRQ@ LV WKH H[FOXVLYH GLVVHPLQDWLRQRIIDOVHUHFRUGVRQ'RZQLH0RUHRYHUDWRUDO UHPHG\IRUUHFRYHULQJGDPDJHVUHVXOWLQJIURPVXFKDFWLRQVl DUJXPHQW 'RZQLHjV FRXQVHO FRQFHGHG WKDW 'RZQLHjV ,GDWFLWDWLRQVDQGTXRWDWLRQRPLWWHG$OWKRXJK WKH FRPSODLQWUHDOO\RQO\LQYROYHGWKHFUHDWLRQPDLQWHQDQFHDQG GDPDJHVSURYLVLRQGRHVQRWPHQWLRQFRQVWLWXWLRQDOYLRODWLRQV GLVVHPLQDWLRQRIIDOVHUHFRUGV ZHQRWHGWKDWm>W@KHVHFDUHIXOO\FUDIWHGOHJLVODWLYHUHPHGLHV FRQILUP WKDW LQ WKH SROLWLFDOO\ VHQVLWLYH UHDOP RI WD[DWLRQ 2Q LWV IDFH WKHQ 'RZQLHjV FRPSODLQW DSSHDUV RQO\ WR &RQJUHVVjVUHIXVDOWRSHUPLWXQUHVWULFWHGGDPDJHDFWLRQVE\ LQYROYH D ZURQJ n WKH LQWHQWLRQDO DQG ZLOOIXO FUHDWLRQ WD[SD\HUVKDV QRWEHHQLQDGYHUWHQWl,GDWTXRWDWLRQ PDLQWHQDQFHDQGGLVVHPLQDWLRQRIIDOVHUHFRUGVE\IHGHUDO RPLWWHG DJHQF\ HPSOR\HHV n IRU ZKLFK &RQJUHVV KDV DOUHDG\ SURYLGHGDPHDQLQJIXOUHPHG\'RZQLHFRQWHQGVKRZHYHU 7KHGLVWULFWFRXUWFRQFOXGHGLQWKLVFDVHWKDWWKH3ULYDF\ WKDWm&RQJUHVVGLGQRWH[SOLFLWO\GHFODUHWKH3ULYDF\$FWWREH $FWmGLUHFWO\DGGUHVVHVDQGUHJXODWHVWKHFRQGXFWVXUURXQGLQJ D VXEVWLWXWH IRU DQ DFWLRQ GLUHFWO\ XQGHU WKH &RQVWLWXWLRQl WKHµEODFNEDOOjPHPRRIZKLFK'RZQLHFRPSODLQVl'RZQLH $SSHOODQWjV %U DW   ,W LV WUXH WKDW &RQJUHVV GLG QRW  ) 6XSS G DW   ,Q WKH GLVWULFW FRXUWjV RUGHU RI H[SOLFLWO\GHFODUHWKH3ULYDF\$FWWREHHLWKHUDVXEVWLWXWHIRU 6HSWHPEHU   LQ ZKLFK LW JUDQWHG LQ SDUW WKH DQ DFWLRQ GLUHFWO\ XQGHU WKH &RQVWLWXWLRQ RU DQ H[FOXVLYH GHIHQGDQWVjPRWLRQWRGLVPLVVWKHFRXUWKHOGRQO\WKDWWKH UHPHG\+RZHYHUWKH%XVKDQG6FKZHLNHUWHVWIRUmVSHFLDO 3ULYDF\ $FW SUHFOXGHG 'RZQLHjV %LYHQV DFWLRQ DV WR WKH IDFWRUVFRXQVHOOLQJKHVLWDWLRQLQWKH DEVHQFHRIDIILUPDWLYH PDLQWHQDQFHDQGGLVVHPLQDWLRQRIWKHPHPR+RZHYHULQLWV DFWLRQE\&RQJUHVVl GRHVQRWUHTXLUHHLWKHUWKDW&RQJUHVV RUGHU RI 6HSWHPEHU   LQ ZKLFK LW JUDQWHG WKH H[SOLFLWO\GHFODUHDQmHODERUDWHUHPHGLDOVFKHPHlWREHDQ GHIHQGDQWVj PRWLRQ WR UHFRQVLGHU WKH FRXUW KHOG WKDW WKH DGHTXDWHDOWHUQDWLYHUHPHG\WRD%LYHQVUHPHG\RUWKDWWKH 3ULYDF\ $FW SUHFOXGHG 'RZQLHjV %LYHQV DFWLRQ DV WR WKH mHODERUDWHUHPHGLDOVFKHPHlGHFODUHLWVHOIWREHDQH[FOXVLYH FUHDWLRQRIWKHPHPRDVZHOO7KH3ULYDF\$FWSURYLGHVWKDW UHPHG\:HEHOLHYHWKDWLQWKLVFDVHWKHIDFWWKDWWKH3ULYDF\ $FW LV D FRPSUHKHQVLYH OHJLVODWLYH VFKHPH WKDW SURYLGHV D :KHQHYHUDQ\DJHQF\IDLOVWRPDLQWDLQDQ\UHFRUG PHDQLQJIXO UHPHG\ IRU WKH ZURQJ WKDW 'RZQLH DOOHJHV LV FRQFHUQLQJDQ\LQGLYLGXDOZLWKVXFKDFFXUDF\UHOHYDQFH VXIILFLHQWDVDmVSHFLDOIDFWRU>@FRXQVHOOLQJKHVLWDWLRQlIRUXV WLPHOLQHVV DQG FRPSOHWHQHVV DV LV QHFHVVDU\ WR DVVXUH WRUHIXVHWRLPSO\DVHSDUDWHGDPDJHVUHPHG\XQGHU%LYHQV IDLUQHVV LQ DQ\ GHWHUPLQDWLRQ UHODWLQJ WR WKH TXDOLILFDWLRQVFKDUDFWHUULJKWVRURSSRUWXQLWLHVRIRU 'RZQLH DOVR FRQWHQGV WKDW DOWKRXJK WKH 3ULYDF\ $FW EHQHILWVWRWKHLQGLYLGXDOWKDWPD\EHPDGHRQWKHEDVLV SURYLGHVDGDPDJHVUHPHG\IRUWKHmLQWHQWLRQDORUZLOOIXOl RIVXFKUHFRUGDQGFRQVHTXHQWO\DGHWHUPLQDWLRQLVPDGH FUHDWLRQ PDLQWHQDQFH RU GLVVHPLQDWLRQ RI IDOVH UHFRUGV  ZKLFK LV DGYHUVH WR WKH LQGLYLGXDO RU IDLOV WR FRPSO\ 86&†DJ LWGRHVQRWSURYLGHDGDPDJHVUHPHG\ ZLWK DQ\ RWKHU SURYLVLRQ RI WKLV VHFWLRQ RU DQ\ UXOH IRUmZLOOIXODQGLQWHQWLRQDOFRQGXFWWKDWLVGRQHVSHFLILFDOO\ SURPXOJDWHG WKHUHXQGHU LQ VXFK D ZD\ DV WR KDYH DQ DQG LQWHQWLRQDOO\ IRU WKH SXUSRVH RI YLRODWLQJ RQHjV DGYHUVHHIIHFWRQDQLQGLYLGXDOWKHLQGLYLGXDOPD\  'RZQLHHWDOY&LW\RI 1R 1R 'RZQLHHWDOY&LW\RI  0LGGOHEXUJ+JWVHWDO 0LGGOHEXUJ+JWVHWDO

EULQJDFLYLODFWLRQDJDLQVWWKHDJHQF\DQGWKHGLVWULFW KHVXIIHUHGZHVKRXOGQRWLPSO\D%LYHQVUHPHG\IRU'RZQLH FRXUWVRIWKH8QLWHG6WDWHVVKDOOKDYHMXULVGLFWLRQLQWKH DJDLQVW 6LHJHO DQG 6FKQHLGHU GLUHFWO\ XQGHU WKH )LUVW PDWWHUVXQGHUWKHSURYLVLRQVRIWKLVVXEVHFWLRQ $PHQGPHQWRIWKH8QLWHG6WDWHV&RQVWLWXWLRQ&RXQWV,,, DQG;,RI'RZQLHjVDQG:KHDWjVFRPSODLQWDOOHJHDVIROORZV 86&†DJ  & '7KH$FWGHILQHVmPDLQWDLQl DV LQFOXGLQJ mPDLQWDLQ FROOHFW XVH RU GLVVHPLQDWHl DQG &RXQW,3ODLQWLIIVDUHHQWLWOHGWRVHHNHPSOR\PHQWLQ mUHFRUGlDVmDQ\LWHPFROOHFWLRQRUJURXSLQJRILQIRUPDWLRQ WKHLUFKRVHQSURIHVVLRQEXWKDYHEHHQDQGFRQWLQXHWREH DERXWDQLQGLYLGXDOWKDWLVPDLQWDLQHGE\DQDJHQF\LQFOXGLQJ SUHFOXGHGIURPVXFKHPSOR\PHQWDVDGLUHFWUHVXOWRIWKH >KLV@HPSOR\PHQWKLVWRU\l86&†DD   DFWLRQVRIWKHGHIHQGDQWVDQGLQUHWDOLDWLRQIRUSODLQWLII ,Q DGGLWLRQ WKH $FW SURYLGHV WKDW m>H@DFK DJHQF\ WKDW 'RZQLH H[HUFLVLQJ KLV FRQVWLWXWLRQDO ULJKWV RI IUHH PDLQWDLQVDV\VWHPRIUHFRUGVVKDOOnPDLQWDLQQRUHFRUG VSHHFK IUHH H[SUHVVLRQ DQG IUHH DVVRFLDWLRQ DQG VXFK GHVFULELQJKRZDQ\LQGLYLGXDOH[HUFLVHVULJKWVJXDUDQWHHGE\ DFWLRQVYLRODWHSODLQWLIIVjFRQVWLWXWLRQDOO\SURWHFWHGULJKWV WKH)LUVW$PHQGPHQWXQOHVVH[SUHVVO\DXWKRUL]HGE\VWDWXWH JXDUDQWHHGXQGHUWKH)LUVWDQG)RXUWHHQWKDPHQGPHQWV RUE\WKHLQGLYLGXDODERXWZKRPWKHUHFRUGLVPDLQWDLQHGRU WRWKH86&RQVWLWXWLRQ XQOHVVSHUWLQHQWWRDQGZLWKLQWKHVFRSHRIDQDXWKRUL]HGODZ HQIRUFHPHQWDFWLYLW\l86&†DH )LQDOO\WKH &RXQW,,7KHDFWLRQVRIWKHGHIHQGDQWVLQPDLQWDLQLQJ $FWSURYLGHVDGDPDJHVUHPHG\ IDOVH LQIRUPDWLRQ DERXW SODLQWLII 'RZQLH LQ ERWK WKH QDWLRQDO SROLFH FRPSXWHUV DQG LQ WKH DIRUHPHQWLRQHG ,QDQ\VXLWEURXJKWXQGHUWKHSURYLVLRQVRIVXEVHFWLRQ mEODFNEDOO PHPRl FRQVWLWXWH D YLRODWLRQ RI SODLQWLIIVj J  & RU ' RI WKLV VHFWLRQ LQ ZKLFK WKH FRXUW )LUVW$PHQGPHQWULJKWVLQWKDWVXFKDFWLRQVZHUHWDNHQ GHWHUPLQHVWKDWWKHDJHQF\DFWHGLQDPDQQHUZKLFKZDV LQUHWDOLDWLRQIRUSODLQWLIIVH[HUFLVLQJWKHLUOHJLWLPDWHDQG LQWHQWLRQDORUZLOOIXOWKH8QLWHG6WDWHVVKDOOEHOLDEOHWR SURWHFWHG )LUVW $PHQGPHQW ULJKWV LH H[SRVLQJ WKHLQGLYLGXDOLQDQDPRXQWHTXDOWRWKHVXPRIn JRYHUQPHQWDOFRUUXSWLRQ $ DFWXDOGDPDJHVVXVWDLQHGE\WKHLQGLYLGXDODVD UHVXOW RI WKH UHIXVDO RU IDLOXUH EXW LQ QR FDVH &RXQW;,7KHDFWVRIDOOGHIHQGDQWVDFWLQJLQFRQFHUW VKDOO D SHUVRQ HQWLWOHG WR UHFRYHU UHFHLYH OHVV ZLWKRWKHUVFRQVWLWXWHVDFRQVSLUDF\WRGHSULYHSODLQWLIIV WKDQWKHVXPRIDQG RIWKHLUFRQVWLWXWLRQDOO\JXDUDQWHHGFLYLOULJKWV % WKHFRVWVRIWKHDFWLRQWRJHWKHUZLWKUHDVRQDEOH DWWRUQH\IHHVDVGHWHUPLQHGE\WKHFRXUW s$DW&RPSO7KHVHFRXQWVDOOHJHZURQJVWKDW FRXOG EH DGGUHVVHG XQGHU WKH 3ULYDF\ $FW   86& 86&†DJ  †DJ  & 'VHHDOVR&DUGDPRQHY&RKHQ )G   WK &LU  m7KH 3ULYDF\ $FW RI  :HDJUHHZLWKWKHGLVWULFWFRXUWWKDWEHFDXVHWKH3ULYDF\ $FW LV D FRPSUHKHQVLYH OHJLVODWLYH VFKHPH WKDW SURYLGHV D PHDQLQJIXOUHPHG\IRUWKHNLQGRIZURQJ'RZQLHDOOHJHVWKDW  :H HPSKDVL]H WKDW ZH RQO\ DGGUHVV KHUH FODLPV LQYROYLQJ WKH FUHDWLRQ PDLQWHQDQFH DQG GLVVHPLQDWLRQ RI IDOVH UHFRUGV E\ IHGHUDO DJHQF\ HPSOR\HHV ,Q RWKHU FRQWH[WV ZH KDYH UHFRJQL]HG WKDW D %LYHQV  7KH WHUP mDJHQF\l IRU WKH SXUSRVHV RI WKH $FW LQFOXGHV H[HFXWLYH UHPHG\ PD\ EH LPSOLHG XQGHU WKH )LUVW $PHQGPHQW 6HH HJ 6KHKHH Y GHSDUWPHQWV 6HH &DUGDPRQH Y &RKHQ  )G   WK &LU /XWWUHOO  )G  WK &LU  FHUW GHQLHG  86   %RWK WKH 86 &XVWRPV 6HUYLFH DQG WKH $7) DUH WKXV DJHQFLHV  /DYDGR Y .HRKDQH  )G  WK &LU