        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 DS




81,7('67$7(6&28572)$33($/6
               )257+(6,;7+&,5&8,7
                 BBBBBBBBBBBBBBBBB


 81,7(' 67$7(6 2) $0(5,&$        ;
           3ODLQWLII$SSHOOHH     
                                   
                                     1R
           Y                      
                                    !
                                   
 %$5%$5$ $ 0$5.,1                
         'HIHQGDQW$SSHOODQW 
                                  1
      $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
     IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW&ROXPEXV
    1Rn*HRUJH&6PLWK'LVWULFWsXGJH
              6XEPLWWHG'HFHPEHU
           'HFLGHGDQG)LOHG$XJXVW
   %HIRUH:(//)25'6,/(5DQG%$7&+(/'(5
                  &LUFXLWsXGJHV
                   BBBBBBBBBBBBBBBBB
                        &2816(/
21 %5,()  7HUU\ . 6KHUPDQ &ROXPEXV 2KLR IRU
$SSHOODQW  'DOH : :LOOLDPV sU $66,67$17 81,7('
67$7(6$77251(<&ROXPEXV2KLRIRU$SSHOOHH
   %$7&+(/'(5sGHOLYHUHGWKHRSLQLRQRIWKHFRXUWLQ
ZKLFK6,/(5sMRLQHG:(//)25'sSGHOLYHUHG
DVHSDUDWHFRQFXUULQJRSLQLRQ

                             
     8QLWHG6WDWHVY0DUNLQ                       1R

                     BBBBBBBBBBBBBBBBB
                         23,1,21
                     BBBBBBBBBBBBBBBBB
   $/,&( 0 %$7&+(/'(5 &LUFXLW sXGJH  &ULPLQDO
GHIHQGDQW%DUEDUD0DUNLQRSHUDWHGDEXVLQHVVWKURXJKWZR
UHODWHGFRUSRUDWHHQWLWLHVLQZKLFKVKHFRQWUDFWHGZLWKPDMRU
IRRGSDFNDJLQJFRPSDQLHVWRVHWXSGHPRQVWUDWLRQVRIQHZ
SURGXFWVLQVHOHFWHGJURFHU\VWRUHV%HFDXVH0DUNLQjVFOLHQWV
SDLG KHU DW WKH HQG RI WKH FRQWUDFW SHULRG 0DUNLQ IRXQG
KHUVHOIXQDEOHWRPHHWKHUZHHNO\SD\UROO6KHRSHQHGDOLQH
RIFUHGLWZLWK+XQWLQJWRQ1DWLRQDO%DQNWKDWZDVVHFXUHGE\
KHUDFFRXQWVUHFHLYDEOH$WWLPHSDVVHGKRZHYHU0DUNLQ
EHJDQXVLQJFRUSRUDWHIXQGVIRUKHURZQSHUVRQDOOX[XULHV
,Q RUGHU WR PDLQWDLQ ERWK KHU H[WUDYDJDQW OLIHVW\OH DQG
FRQWLQXHWRPHHWKHUEXVLQHVVSD\UROO0DUNLQVXEPLWWHGIDOVH
ILQDQFLDOGRFXPHQWVWR+XQWLQJWRQWKDWVLJQLILFDQWO\LQIODWHG
WKH DFWXDO DPRXQW RI WKH FRPSDQLHVj DFFRXQWV UHFHLYDEOH
:KHQ WKH IUDXG ZDV GLVFRYHUHG 0DUNLQjV FRPSDQLHV KDG
RXWVWDQGLQJORDQVZHOOLQH[FHVVRIPLOOLRQ$WWKHWLPH
WKHSUHVHQWHQFHLQYHVWLJDWLRQUHSRUWZDVZULWWHQ+XQWLQJWRQ
KDGEHHQDEOHWRUHFRYHURQO\RIWKHEDODQFHGXH
   0DUNLQ ZDV FKDUJHG ZLWK EDQN IUDXG LQ D RQHFRXQW
,QIRUPDWLRQ6KHGHFLGHGWRSOHDGJXLOW\DQGWKHSOHDZDV
HQWHUHG RQ 'HFHPEHU    $ SUHVHQWHQFH UHSRUW ZDV
JHQHUDWHG DQG WKH GHIHQGDQW ILOHG KHU REMHFWLRQV  ,Q
SDUWLFXODU WKH GHIHQGDQW EHOLHYHG WKDW WKH DPRXQW RI ORVV
DWWULEXWHGWRKHULQH[FHVVRIPLOOLRQZDVLQDSSURSULDWH
DQGVKHPRYHGWRFRPSHOWKHJRYHUQPHQWWRSURYLGHKHUZLWK
WKHXQGHUO\LQJGRFXPHQWDWLRQIRUWKDWDPRXQW
   2QWKHPRUQLQJRIsXQHWKHGLVWULFWFRXUWKHOGD
VWDWXVFRQIHUHQFHWRGLVFXVVWKHGHIHQGDQWjVPRWLRQWRFRPSHO
DQG KHU QHHG IRU DGGLWLRQDO GLVFRYHU\  $V SDUW RI WKH
GLVFXVVLRQVGHIHQGDQWjVFRXQVHO0U6KHUPDQQRWHGWKDWWKH
SUHVHQWHQFHLQYHVWLJDWLRQUHSRUWSXWWKHGHIHQGDQWjVSRVVLEOH
SULVRQ VHQWHQFH ZLWKLQ WKH JXLGHOLQH UDQJH IURP  WR 
PRQWKV+RZHYHUKHDUJXHGWKDWLIKHZHUHDEOHWRREWDLQ
WKH UHTXHVWHG GLVFRYHU\ KH PLJKW EH DEOH WR SURYH WKDW
       8QLWHG6WDWHVY0DUNLQ                        1R        1R                       8QLWHG6WDWHVY0DUNLQ           

                   BBBBBBBBBBBBBBBBBBBBBB                                  DPRXQWRIORVVDWWULEXWDEOHWR0V0DUNLQGXULQJWKHSHULRG
                                                                           WKDWVKHSURYLGHGIDOVHLQIRUPDWLRQWRWKHEDQNZDVOHVVWKDQ
                      &21&855(1&(                                          PLOOLRQ,IKHFRXOGPDNHVXFKDVKRZLQJWKHGHIHQGDQW
                   BBBBBBBBBBBBBBBBBBBBBB                                  ZRXOGEHHQWLWOHGWRDIRXUOHYHOUHGXFWLRQLQWKHJXLGHOLQH
                                                                           UDQJH  7KH FRXUW UHFRJQL]HG WKDW GHIHQVH FRXQVHOjV UHDO
  +$55< : :(//)25' &LUFXLW sXGJH FRQFXUULQJ  ,                  FRQFHUQERLOHGGRZQWRmKRZPXFKWLPHGRHVP\FOLHQWGR"l
FRQFXU LQ WKH FRXUWjV MXGJPHQW RI DIILUPDQFH GHVSLWH P\
UHVHUYDWLRQVFRQFHUQLQJWKHLQYROYHPHQWRIWKHGLVWULFWMXGJH                7KH MXGJH DVNHG WKH JRYHUQPHQW IRU D VHQWHQFLQJ
LQGLVFXVVLRQZLWKFRXQVHODQGDPELJXRXVLQGLFDWLRQVDERXW                 UHFRPPHQGDWLRQ$VVLVWDQW8QLWHG6WDWHV$WWRUQH\:LOOLDPV
WKH SURSULHW\  RI D ILIW\RQH PRQWK WHUP DW D mVWDWXV             UHVSRQGHGWKDWKHEHOLHYHGWKHSUREDWLRQRIILFHUjVFDOFXODWLRQV
FRQIHUHQFHl  0DUNLQjV IUDXG FOHDUO\ H[FHHGHG WKH                   ZHUHFRUUHFW+RZHYHUEHFDXVHWKHGHIHQGDQWKDGSOHGJXLOW\
ILJXUHZLWKOLWWOHRUQRLQGLFDWLRQRIUHPRUVHWKH             HDUO\LQWKHSURFHVVDQGWKHJRYHUQPHQWKDGWKHUHE\DYRLGHG
VHQWHQFHLPSRVHGZDVIXOO\MXVWLILHG                                      DEXUGHQVRPHWULDOKHVWDWHGm,WKLQNVKHLVHQWLWOHGWRHYHU\
                                                                           EHQHILWDWWKHORZHUHQGRIWKHJXLGHOLQHZKLFKDFFRUGLQJWR
   ,W VHHPV FOHDU WKDW WKH GLVWULFW MXGJH LQ IDFW GLG FRQVLGHU   WKH >SUREDWLRQ RIILFHUjV@ FDOFXODWLRQ ZRXOG EH D PRQWK
REMHFWLRQVPDGHWRWKHSUHVHQWHQFHUHSRUWEXWFRQQHFWHGZLWK              VHQWHQFHl:LOOLDPVDGGHGm,EHOLHYHWKDWVRPHZKHUHLQWKH
WKH EDQN IUDXG LQ WKLV FDVH ZDV DOVR H[WHQVLYH EDQNUXSWF\         QHLJKERUKRRGRIIRXU\HDUVLVDQDSSURSULDWHVHQWHQFHJLYHRU
IUDXG DV ZHOO  0DUNLQjV FRXQVHO LQ DQ\ HYHQW KDG WKH          WDNHVRPHZKHUHLQWKDWUDQJHl7KHGLVWULFWFRXUWFRQVXOWHG
RSSRUWXQLW\WRH[DPLQHWKHSHUWLQHQWGRFXPHQWVZLWKUHVSHFW                ZLWKWKHSUREDWLRQRIILFHUDVNLQJLIVKHZDVmKDUGDQGIDVWl
WR DQ\ HIIHFWXDO FKDOOHQJH WR D OHQJWK\ DIILGDYLW DQG D           RQKHUUHFRPPHQGDWLRQRIPRQWKV7KHSUREDWLRQRIILFHU
WKRURXJKSUHVHQWHQFHUHSRUWFRQFHUQLQJGHIHQGDQWjVDGPLWWHG                UHVSRQGHGm$V,VWDWHGLQWKHMXVWLILFDWLRQLWZDVDVHULRXV
IUDXGXOHQWFRQGXFW                                                       RIIHQVH  6KH FRPPLWWHG DQ RIIHQVH RYHU D ORQJ SHULRG RI
                                                                           WLPH,ZHQWWRZDUGWKHFHQWHURIWKHJXLGHOLQHUDQJHDW
                                                                           WKDWSRLQW2IFRXUVH,ZRXOGQRWEHXSVHWLILWZHQWGRZQWR
                                                                           l
                                                                             $IWHU VRPH PRUH GLVFXVVLRQ WKH IROORZLQJ H[FKDQJH
                                                                           RFFXUUHG
                                                                             056+(50$1>GHIHQVHFRXQVHO@<RXNQRZ,DP
                                                                             ZLOOLQJWRWDONDQGZRUNRXWVRPHWKLQJDORQJWKHIRXU
                                                                             \HDUOLQH,DPZLOOLQJWRWDONDERXWWKDW,WKLQNWKDW
                                                                             WKHUHDUHOHJLWLPDWHDUJXPHQWVWRNQRFNLWGRZQEHORZ
                                                                            WKHPLOOLRQUDQJHZKLFKZRXOGEULQJLWGRZQWRWR
      7KH JRYHUQPHQW FRQFHGHV LQ LWV EULHI S  WKDW E\ WKH HQG RI WKH      PRQWKV  +H >:LOOLDPV@ LV WDONLQJ IRXU \HDUV 
VHVVLRQ mFRXQVHO IRU 0DUNLQ ZDV DWWHPSWLQJ WR QHJRWLDWH D VHQWHQFH
GLUHFWO\ ZLWK WKH GLVWULFW FRXUWl 7KH MXGJH VLPSO\ VKRXOG KDYH PDGH LW
                                                                             PRQWKV  :H FDQ WDON DERXW VRPHWKLQJ OLNH WKDW EXW ,
SODLQ WKDW QR VXFK HIIRUW ZDV DSSURSULDWH
                                                                             WKLQNWKDWjVVRPHWKLQJZHFDQOLYHZLWKNQRZLQJWKDW,
                                                                             DPJLYLQJXSZKDW,EHOLHYHWREHDVWURQJOHJDOLVVXH
     
     7KH GLVWULFW FRXUW LQGHHG DGYLVHG 0DUNLQjV FRXQVHO mFHUWDLQO\ \RX
KDYH WKH ULJKW XQGHU WKH 5XOHV WR VXESRHQD ZKDW \RX FDQjW JHW
YROXQWDULO\l s$ DW 
      8QLWHG6WDWHVY0DUNLQ                     1R      1R                      8QLWHG6WDWHVY0DUNLQ      

    7+(&2857:HOOWKHFRQFHUQWKDW,KDYHLVn,WKLQN            UDQJHDQGXQOHVVWKHSUHVHQWHQFHUHSRUWZDVPRGLILHGWKH
    WKDWWKHUHSRUWZRXOGKDYHWREHDOWHUHGWRUHIOHFWDORZHU     VHQWHQFHZRXOGIDOOZLWKLQWKHUDQJHIURPWRPRQWKV
    DPRXQWEHIRUH,ZRXOGEHZLOOLQJWRGHSDUW
                                                                       :KLOH ZH DUH WURXEOHG E\ WKH GLVWULFW FRXUWjV SUHVHQFH
7KH FRXUW WKHQ DGMRXUQHG WKH FRQIHUHQFH WR DOORZ WKH        GXULQJ VHQWHQFLQJ QHJRWLDWLRQV E\ WKH SDUWLHV ZH GR QRW
SUREDWLRQ RIILFHU WR PDNH VRPH IXUWKHU FDOFXODWLRQV WR       EHOLHYHWKHGLVWULFWFRXUWFRPPLWWHGUHYHUVLEOHHUURU3ULRUWR
GHWHUPLQH WKH SRVVLELOLW\ RI PRGLI\LQJ WKH SUHVHQWHQFH        WRGD\WKHUHZDVQRFOHDUUXOHLQWKLV&LUFXLWSURKLELWLQJWKH
LQYHVWLJDWLRQUHSRUW                                               GLVWULFW FRXUW IURP SDUWLFLSDWLQJ LQ QHJRWLDWLRQV UHJDUGLQJ
                                                                    VHQWHQFLQJRQFHDJXLOW\SOHDKDGEHHQHQWHUHG)XUWKHUPRUH
  :KHQWKHVWDWXVFRQIHUHQFHZDVUHFRQYHQHGWKDWDIWHUQRRQ         ZHEHOLHYHWKDWWKHWUDQVFULSWRIWKHHQWLUHVWDWXVFRQIHUHQFH
WKHSUREDWLRQRIILFHUYHULILHGWKDWDIWHUUHFKHFNLQJKHUILJXUHV   LQFOXGLQJWKHGLVWULFWFRXUWjVFRQVLVWHQWUHIXVDOWRFRPPLWWR
VKHKDGFRQFOXGHGWKDWWKHORVVFDXVHGE\WKHIUDXGZRXOG           DVHQWHQFHDQGWKHODFNRIDQ\DJUHHPHQWEHWZHHQWKHSDUWLHV
H[FHHGWKHPLOOLRQWKUHVKROGDQGWKHUHIRUHVKHFRXOGQRW        EHOLHVWKHFRQWHQWLRQWKDWDQ\NLQGRIDJUHHPHQWZDVUHDFKHG
UHFRPPHQG WKH IRXUOHYHO UHGXFWLRQ  'HIHQVH FRXQVHO          GXULQJWKHVWDWXVFRQIHUHQFH2QEDODQFHWKH GLVFXVVLRQV
UHVXPHG KLV VHQWHQFLQJ LQTXLULHV IURP WKH PRUQLQJjV           HYHQWKRVHUHODWLQJWRVSHFLILFVHQWHQFLQJWHUPVUHODWHGWRWKH
FRQIHUHQFH                                                         PDWHULDOLW\RIWKHGHIHQGDQWjVREMHFWLRQVDQGWKHSURFHGXUHV
                                                                    QHFHVVDU\WRHQVXUHWKDWWKHGHIHQGDQWjVPDWHULDOREMHFWLRQV
    056+(50$1:HOOFDQ,SLFNXSZKHUHZHOHIWRII"            ZHUHIXOO\FRQVLGHUHG7KHUHLVWKHUHIRUHQRHUURULQWKLV
    7KLVPRUQLQJZHOHIWRIIDWPRQWKV7KDWjVZKDWZH          FDVH+RZHYHULQWKHIXWXUHZHDGYLVHWKHGLVWULFWFRXUWVWR
    ZHUHWDONLQJDERXWWKLVPRUQLQJDP,ULJKW"                    DYRLGLQYROYHPHQWLQWKHNLQGRIVHQWHQFLQJGLVFXVVLRQVWKDW
                                                                    RFFXUUHGKHUHDQGZKLFKHQJHQGHUHGWKLVVHULRXVFRQWURYHUV\
    7+(&2857:HOOWKDWZDVSDUWRIWKHGLVFXVVLRQ              RYHUWKHSURSULHW\RIWKHVHQWHQFLQJSURFHGXUHV
    056+(50$17KDWjVZKHUH,ZRXOGOLNHWRVWDUW                                      &21&/86,21
    05 :,//,$06  7KDWjV ZKHUH , ZRXOG OLNH WR HQG         )RU WKH IRUHJRLQJ UHDVRQV ZH $)),50 WKH VHQWHQFH
    <RXU+RQRU                                                     LPSRVHGE\WKHGLVWULFWFRXUW
    7+(&28572ND\
    056+(50$1:HOO\RXVDLG5DWKHUWKDQJRLQJ
    WKURXJKDOOWKLVP\TXHVWLRQLVLI,ZHUHWRZLWKGUDZWKH
    REMHFWLRQVDQGPRYHIRUDGRZQZDUGGHSDUWXUHRQWKH
    EDVLVRIKHUKXVEDQGjVLOOQHVVSUHVHQWWKDWWR\RXDQGWKH
    JRYHUQPHQWZHUHVWLOODJUHHLQJWRPRQWKVRUDWOHDVW
    DVDVWDUWLQJSRLQWZKHUHZRXOGWKDWOHDYHPH"
    7+(&2857:HOO,GRQjWNQRZ<RXFHUWDLQO\PD\
    PDNHWKDWDUJXPHQWEXW,GRQjWNQRZWKDW,FDQVLJQRQ
    WRWKDWDWWKLVSRLQW<RXDUHVD\LQJWKDWLWLVDPHGLFDO
    DUJXPHQW"
    8QLWHG6WDWHVY0DUNLQ                         1R       1R                       8QLWHG6WDWHVY0DUNLQ            

 )G DW  TXRWLQJ 8QLWHG 6WDWHV H[ UHO (ONVQLV Y      056+(50$11R,DPQRWDVNLQJ\RXWRDFFHSWP\
*LOOLJDQ)6XSS6'1<,WLVWKH              PRWLRQIRUGRZQZDUGGHSDUWXUH%XWLQLWLDOO\WKHZD\
GLVFUHWLRQWRLPSRVHHLWKHUDOHQLHQWRUOHQJWK\VHQWHQFHWKDW           ZHVRUWRIHQGHGXSLVWKDW \RXZHUHWDONLQJDERXW
OLHV DW WKH KHDUW RI WKH FRHUFLYH SRWHQWLDO LQKHUHQW ZKHQ D    PRQWKV DV D SRWHQWLDO GLVSRVLWLRQ LI WKH JRYHUQPHQW
MXGJHSDUWLFLSDWHVLQSOHDQHJRWLDWLRQV6HHLGDW,QRXU        DJUHHG"
YLHZWKLVUDWLRQDOHDSSOLHVZLWKHTXDOIRUFHZKHWKHUWKHMXGJH
LVQHJRWLDWLQJDQDJUHHPHQWWRSOHDGJXLOW\RUDQDJUHHPHQWWR           7+(&28577KDWZDVDSRVVLELOLW\
ZDLYH REMHFWLRQV WR WKH SUHVHQWHQFH UHSRUW LQ UHWXUQ IRU
FRQVLGHUDWLRQDWVHQWHQFLQJ                                             05 6+(50$1  <HDK  7KDW ZDV WKH ORZHVW  , DP
                                                                         VD\LQJLI,ZLWKGUDZP\REMHFWLRQVZRXOGWKDWVWLOOEHD
   ,QWKLVFDVHWKHSDUWLHVDSSHDUHGEHIRUHWKHGLVWULFWFRXUWWR       SRVVLELOLW\"$QGWKHQ,ZRXOGPRYHn,KDYHWZRRWKHU
GLVFXVV WKH GHIHQGDQWjV REMHFWLRQV WR WKH SUHVHQWHQFH              LVVXHV  , KDYH WKH LVVXH RI WKHUH LV D IHPDOH IHGHUDO
LQYHVWLJDWLRQUHSRUWDQGKHUPRWLRQWRFRPSHOSURGXFWLRQRI              LQVWLWXWLRQLQ3KRHQL[WHQPLOHVIURPZKHUHVKHLVOLYLQJ
WKH HYLGHQFH VXSSRUWLQJ WKH UHSRUWjV FDOFXODWLRQ RI ORVV         ,NQRZWKDWUHFRPPHQGDWLRQZRXOGQRWEHELQGLQJ
:KHQ D GHIHQGDQW REMHFWV WR WKH SUHVHQWHQFH LQYHVWLJDWLRQ
UHSRUWWKHSDUWLHVmVKDOOEHJLYHQDQDGHTXDWHRSSRUWXQLW\WR           7+(&28577HUU\,ZLOOWHOO\RXWKDWZLOOQRWEHD
SUHVHQW LQIRUPDWLRQ WR WKH FRXUW UHJDUGLQJ >WKH GLVSXWHG@         SUREOHP2QDUHJXODUEDVLVXQOHVVLWLVVRPHWKLQJWKDW
IDFWRUl  866* $D  7R UHVROYH WKH GLVSXWH WKH      GRHVQjWPDNHDQ\VHQVH,ZLOOUHFRPPHQGWKDW
GLVWULFW FRXUW PD\ ILQG LW QHFHVVDU\ WR KROG DQ HYLGHQWLDU\
KHDULQJ6HH86 6(17(1&,1* *8,'(/,1(6 0$18$/$                  056+(50$1$QGWKHQWKHRWKHULVVXHLVLI,FRXOG"
FPWEDFNJURXQG,QWKLVFDVHWKHGLVWULFWFRXUWKHOG           ,KDYHJRWWKHPHGLFDOUHSRUWVKHUH6KHLVULJKWQRZWKH
DVWDWXVFRQIHUHQFHWRGHWHUPLQHWKHVFRSHRIWKHGHIHQGDQWjV            VROHFDUHWDNHURIKHUKXVEDQG:KHQZRXOGVHQWHQFLQJ
REMHFWLRQV DV ZHOO DV WKH QHHG IRU DQ HYLGHQWLDU\ KHDULQJ      EH"&RXOGZHGHOD\VHQWHQFLQJXQWLOODWH$XJXVW"
DQGRU DGGLWLRQDO GRFXPHQW GLVFRYHU\  7KLV W\SH RI
GLVFXVVLRQLVHQWLUHO\SURSHULQGHHGLWLVQHFHVVDU\WRDIDLU         7+(&2857,ZDQWVHQWHQFLQJWREHSUREDEO\EHIRUH
VHQWHQFLQJGHWHUPLQDWLRQ6HHLG                                       WKDWEXWWKHHQIRUFHPHQWRIWKHVHQWHQFHFDQEHODWHU

  ,QWKHFRXUVHRIWKHVHSURSHUGLVFXVVLRQVKRZHYHUGHIHQVH            056+(50$1&DQEHODWHU"
FRXQVHO EHJDQ WR LQTXLUH DERXW SRVVLEOH VHQWHQFHV XQGHU           7+(&2857&DQEHODWHULI\RXKDYHJRWDQ\NLQGRI
YDULRXV VFHQDULRV DQG WKH IRFXV RI WKH FRQIHUHQFH ZDV           PHGLFDORURWKHUNLQGRIIDPLO\VLWXDWLRQ,ZLOOFHUWDLQO\
GLYHUWHG IURP WKH GHIHQGDQWjV REMHFWLRQV WR WKH UHSRUW WR        FRQVLGHU WKDW SUREDEO\ IDYRUDEO\ EXW , GRQjW IHHOn,
PDWWHUV WKDW DUH SHULORXVO\ FORVH WR LPSURSHU VHQWHQFLQJ          ZDQW\RXWRNQRZWKDW,GRQjWIHHOWKDW,FDQLQDQ\ZD\
QHJRWLDWLRQVZLWKWKHGLVWULFWFRXUW+RZHYHUDIWHUFDUHIXOO\          GHSDUWLQWKLVFDVHWRJHWWRWKDWQXPEHU
UHYLHZLQJWKHHQWLUHUHFRUGZHFRQFOXGHWKDWZKLOHWKHSDUWLHV
ZHUH DW WLPHV HQJDJHG LQ QHJRWLDWLRQV WKH GLVWULFW FRXUWjV      056+(50$1"
SDUWLFLSDWLRQZDVOLPLWHGWRLQTXLULQJDERXWWKHVFRSHRIWKH
GHIHQGDQWjVREMHFWLRQVDQGWKHLUPDWHULDOLW\WRWKHFRQFOXVLRQV          7+(&28575LJKW7KHRQO\ZD\LWZRXOGKDSSHQLV
UHDFKHG LQ WKH SUHVHQWHQFH UHSRUW  :KHQ SUHVVHG IRU D          LI 0V +DUULV DQG WKH 3UREDWLRQ 2IILFH ZHUH WR DOWHU
VHQWHQFLQJ FRPPLWPHQW WKH GLVWULFW FRXUW FRQVLVWHQWO\              DPHQGRUVXSSOHPHQWWKHUHSRUWWKDWWKH\KDYHWKDWWKH
UHVSRQGHGWKDWKHZRXOGEHVHQWHQFLQJZLWKLQWKHJXLGHOLQH               QXPEHUVWKDWZHUHSUHVHQWHGLQWKHUHSRUWDUHQRWFRUUHFW
       8QLWHG6WDWHVY0DUNLQ                          1R     1R                        8QLWHG6WDWHVY0DUNLQ        

    RU FRQVLGHU LW XQGHU D GLIIHUHQW OLJKW  ,Q RWKHU ZRUGV     SURKLELWLRQVRI5XOHHGRQRWDSSO\RQFHmWKHSDUWLHV
    VRPHEDVLVIRUFKDQJLQJWKHQXPEHUVDQG\RXNQRZ,                   KD>YH@ FRQFOXGHG WKHLU DJUHHPHQW DQG WKH SURVHFXWRU
    GRQjWVHHWKDWKDSSHQLQJ                                              KD>V@ODLGLWRXWLQRSHQFRXUWlHYHQLIWKHDJUHHPHQWLV
                                                                           QRWIRUPDODQGELQGLQJ,QRWKHUZRUGVRQFHWKHSDUWLHV
                                                                      KDYHmKDPPHUHGRXWlWKHGHWDLOVRIWKHLUDJUHHPHQW5XOH
                                                                           H GRHV QRW SUHYHQW WKH VHQWHQFLQJ MXGJH IURP
    05:,//,$06,JXHVV,DPDOLWWOHELWFRQIXVHGDW                   TXHVWLRQLQJ WKH GHIHQGDQW UHJDUGLQJ WKH WHUPV
    WKLVSRLQW$UH\RXZLWKGUDZLQJWKHREMHFWLRQV"                       FRQVHTXHQFHVDQGDFFHSWDQFHRIWKHSOHDDJUHHPHQWRU
                                                                           IURPSURYLGLQJWKHGHIHQGDQWZLWKLQIRUPDWLRQUHODWLQJ
    056+(50$1,FDQjWGRLWULJKWQRZ:KDW,ZRXOG                   WRWKHVHPDWWHUV
    OLNHWRGRLVKDYHDQRSSRUWXQLW\WRWDONLQGHWDLOZLWKP\
    FOLHQWDQGWKHQDGYLVHWKH&RXUWZKHWKHURUQRWZHZLOO                                             
    ZLWKGUDZRXUREMHFWLRQV,IQRWWKHQ,ZLOOWHOO\RXZKDW
    ZHQHHGWRJRIRUZDUG                                                 7KHUHFRUGUHYHDOVWKDWWKHGHIHQGDQWHQWHUHGLQWRDSOHD
                                                                           DJUHHPHQWDQGFKDQJHGKLVSOHDWRJXLOW\ZHOOEHIRUHKLV
  ,QWKHILQDOGLVFXVVLRQVRIWKHDIWHUQRRQWKHGLVWULFWFRXUW            SUREOHPDWLF LQWHUFKDQJH ZLWK WKH GLVWULFW FRXUW MXGJH
LQGLFDWHG WKDW LI WKH GHIHQGDQWjV REMHFWLRQV ZHUH QRW               7KXV WKH GLVWULFW FRXUW MXGJH GLG QRW LQDSSURSULDWHO\
ZLWKGUDZQLWZRXOGEHLQFOLQHGWRUHTXLUHWKHEDQNWRSURYLGH             LQYROYH KLPVHOI LQ WKH SOHD GLVFXVVLRQV LQ YLRODWLRQ RI
WKHILQDQFLDOLQIRUPDWLRQUHTXHVWHGE\WKHGHIHQGDQW                      5XOHH
  ,Q WKH IROORZLQJ GD\V WKH GHIHQGDQW ZLWKGUHZ KHU               ,GDWEUDFNHWVLQRULJLQDOFLWDWLRQVRPLWWHG
REMHFWLRQV DQG SURFHHGHG WR VHQWHQFLQJ  $ VHQWHQFLQJ
KHDULQJ ZDV KHOG RQ sXO\    $W WKDW WLPH WKH           $UJXDEO\ XQGHU WKHVH DXWKRULWLHV WKH GLVWULFW FRXUWjV
GHIHQGDQWFRQILUPHGVKHKDGZLWKGUDZQKHUREMHFWLRQVDQG                FRPPHQWV DW WKH VWDWXV FRQIHUHQFH ZRXOG QRW UXQ DIRXO RI
DUJXPHQWV ZHUH PDGH UHODWLQJ WR WKH SURSHU OHQJWK RI WKH        5XOHH:HDUHQRQHWKHOHVVWURXEOHGE\DGLVWULFWFRXUWjV
VHQWHQFH'HIHQGDQWjVFRXQVHODUJXHGWKDWWKHGHIHQGDQWZDV             SDUWLFLSDWLRQLQVHQWHQFLQJGLVFXVVLRQVLQZKLFKDFULPLQDO
VRUU\ IRU FRPPLWWLQJ WKH RIIHQVH DQG WKDW D GRZQZDUG             GHIHQGDQW RIIHUV WR ZDLYH D OHJDO DUJXPHQW LQ UHWXUQ IRU
GHSDUWXUHZDVZDUUDQWHGEHFDXVHRIKHUKXVEDQGjVLOOKHDOWK             FRQVLGHUDWLRQLQVHQWHQFLQJ$VZHQRWHGLQ8QLWHG6WDWHVY
KHDOVRVWDWHGWKDWWKHJRYHUQPHQWZDVUHFRPPHQGLQJD                %DUUHWW WKH UHDVRQ IRU 5XOH  IORZV IURP WKH IDFW WKDW D
PRQWK VHQWHQFH  7KH JRYHUQPHQW UHMHFWHG WKH                       MXGJHjV SDUWLFLSDWLRQ LQ SOHD QHJRWLDWLRQ LV LQKHUHQWO\
FKDUDFWHUL]DWLRQ WKDW LWV HDUOLHU GLVFXVVLRQ RI D PRQWK        FRHUFLYH
VHQWHQFH ZDV D VHQWHQFLQJ UHFRPPHQGDWLRQ DQG DUJXHG
DJDLQVW DQ\ GRZQZDUG GHSDUWXUH  $ UHSUHVHQWDWLYH RI WKH           7KHXQHTXDOSRVLWLRQVRIWKHMXGJHDQGWKHDFFXVHGRQH
EDQNDOVRPDGHDVWDWHPHQWDVWKHYLFWLPRIWKHFULPH7KH                ZLWKWKHSRZHUWRFRPPLWWRSULVRQDQGWKHRWKHUGHHSO\
GLVWULFW FRXUW FRQVLGHUHG WKH DUJXPHQWV DQG LPSRVHG D               FRQFHUQHG WR DYRLG SULVRQ DW RQFH UDLVH D TXHVWLRQ RI
VHQWHQFHRIPRQWKV                                                     IXQGDPHQWDO IDLUQHVV  :KHQ D MXGJH EHFRPHV D
                                                                           SDUWLFLSDQWLQSOHDEDUJDLQLQJKHEULQJVWREHDUWKHIXOO
, sXULVGLFWLRQ                                                            IRUFHDQGPDMHVW\RIKLVRIILFH+LVDZHVRPHSRZHUWR
                                                                           LPSRVH D VXEVWDQWLDOO\ ORQJHU RU HYHQ PD[LPXP
 0V 0DUNLQ ILOHG D QRWLFH RI DSSHDO LQ WKLV &RXUW RQ            VHQWHQFLQJLQH[FHVVRIWKDWSURSRVHGLVSUHVHQWZKHWKHU
$XJXVW(YHQWKRXJKWKHGHIHQGDQWZDVVHQWHQFHGRQ                UHIHUUHGWRRUQRW
    8QLWHG6WDWHVY0DUNLQ                         1R     1R                       8QLWHG6WDWHVY0DUNLQ        

UHOLHG RQ WKLV FRPPHQWDU\ WR FRQFOXGH WKDW RQFH D SOHD       sXO\WKHMXGJPHQWZDVQRWHQWHUHGRQWKHGLVWULFW
DJUHHPHQW KDV EHHQ VLJQHG E\ WKH JRYHUQPHQW DQG WKH           FRXUWGRFNHWVKHHWXQWLOsXO\,QDVHSDUDWHRUGHUZH
GHIHQGDQWDQGLVGLVFORVHGWRWKHFRXUWWKHGLVWULFWFRXUWLV        FRQILUPHGWKDWWKHGHIHQGDQWjVQRWLFHRIDSSHDOZDVWLPHO\
SURSHUO\H[SHFWHGWRWDNHDQDFWLYHUROHLQHYDOXDWLQJWKHSOHD       DQG WKHUHIRUH ZH KDYH DSSHOODWH MXULVGLFWLRQ  6HH 8QLWHG
DJUHHPHQW6HH8QLWHG6WDWHVY&URZHOO)G            6WDWHVY0DUNLQ1RWK&LU)HERUGHU
WK&LUm:HKDYHQRGRXEWWKDWWKLVHYDOXDWLRQPD\           DOORZLQJDSSHDOWRJRIRUZDUG
LQFOXGHDFRQVLGHUDWLRQRIWKHSXQLVKPHQWDOORZDEOHXQGHUWKH
DJUHHPHQW DV FRPSDUHG WR SXQLVKPHQW DSSURSULDWH IRU WKH          +RZHYHU WKH JRYHUQPHQW DUJXHV WKDW ZH GR QRW KDYH
GHIHQGDQWjV FRQGXFW DV D ZKROH  7KHUHIRUH DQ\ VXFK          MXULVGLFWLRQRYHUWKLVFDVHEHFDXVH0DUNLQjVDSSHDOGRHVQRW
FRPPHQWVPDGHGXULQJDGLVFXVVLRQRIWKHHIIHFWVRIDSOHD            IDOOZLWKLQWKHIRXUVWDWXWRU\EDVHVIRUDSSHDOLQJDVHQWHQFH
DJUHHPHQWSURSHUO\SUHVHQWHGWRWKHFRXUWGRQRWFRQVWLWXWH           6HH86&D6HFWLRQDOORZVDGHIHQGDQWWR
LPSURSHUSDUWLFLSDWLRQLQYLRODWLRQRI5XOHl                    DSSHDOWKHVHQWHQFHLPSRVHGLIWKHVHQWHQFHZDVLPSRVHG
                                                                      LQYLRODWLRQRIODZZDVLPSRVHGDVDUHVXOWRIDQLQFRUUHFW
   ,Q D PRUH UHFHQW FDVH WKH )LIWK &LUFXLW FRQVLGHUHG WKH   DSSOLFDWLRQRIWKHJXLGHOLQHVLVJUHDWHUWKDQWKHVHQWHQFH
JRYHUQPHQWjVDUJXPHQWmWKDWWKHMXGJHjVFRPPHQWVGLGQRW              VSHFLILHG LQ WKH DSSOLFDEOH JXLGHOLQH UDQJH RU  ZDV
YLRODWH5XOHEHFDXVHWKH\ZHUHPDGHLQRSHQFRXUWDIWHUD          LPSRVHG IRU DQ RIIHQVH IRU ZKLFK WKHUH LV QR VHQWHQFLQJ
SOHD DJUHHPHQW KDG EHHQ UHDFKHGl  8QLWHG 6WDWHV Y           JXLGHOLQHDQGLVSODLQO\XQUHDVRQDEOH:HKDYHKHOGWKDWWKH
5RGULJXH]  )G   WK &LU   7KH FRXUW    &RXUW RI $SSHDOV GRHV QRW KDYH MXULVGLFWLRQ RYHU D YDOLG
UHMHFWHG WKH DUJXPHQW EHFDXVH LW ZDV mIDFWXDOO\ LQFRUUHFWl    VHQWHQFH WKDW KDV EHHQ LPSRVHG ZLWKLQ WKH DSSOLFDEOH
LHWKHGHIHQGDQWKDGQRW\HWDFFHSWHGWKHSOHDDJUHHPHQW          6HQWHQFLQJ*XLGHOLQH5DQJH6HH8QLWHG6WDWHVY/LYHO\
DQGQRWHGWKDWDRSLQLRQRIWKDWFLUFXLW8QLWHG6WDWHVY       )GWK&LU
0LOHV)GWK&LUmUHMHFWHGWKHQRWLRQWKDW
DMXGJHKDVDIUHHKDQGWRSDUWLFLSDWHLQSOHDQHJRWLDWLRQVRQFH        ,WLVFOHDUWKDW0V0DUNLQGRHVQRWFKDOOHQJHWKHYDOLGLW\RI
D SURSRVHG DJUHHPHQW KDV EHHQ GLVFORVHG LQ RSHQ FRXUWl       KHU VHQWHQFH XQGHU WKH VHQWHQFLQJ JXLGHOLQHV  5DWKHU VKH
5RGULJXH])GDWHPSKDVLVDGGHG                      FODLPVWKDWWKHQHJRWLDWLRQVDWWKHVWDWXVFRQIHUHQFHUHVXOWHG
                                                                      LQ DQ DJUHHPHQW ZLWK WKH JRYHUQPHQW WKDW WKH JRYHUQPHQW
  7KH7HQWK&LUFXLWKDVDOVRFRQVLGHUHGWKHTXHVWLRQRISRVW         EUHDFKHG  :H YLHZ WKLV DV D FODLP WKDW WKH VHQWHQFH ZDV
DJUHHPHQWGLVFXVVLRQVZLWKWKH&RXUW6HH8QLWHG6WDWHVY           LPSRVHG LQ YLRODWLRQ RI ODZ DQG ZH WKHUHIRUH KDYH
&DUYHU  )G   WK &LU   ,Q WKDW   MXULVGLFWLRQRYHUWKLVDSSHDO
FDVHWKHGHIHQGDQWSOHGJXLOW\DQGWKHGLVWULFWFRXUWHQWHUHG
WKHSOHDDVDFRQGLWLRQDOJXLOW\SOHD7KHGHIHQGDQWDSSHDUHG        ,, 6DQWREHOORY1HZ<RUN
IRU VHQWHQFLQJ DQG PDGH FRQWUDGLFWRU\ VWDWHPHQWV DERXW
ZKHWKHUKHZLVKHGWRJRIRUZDUGRQWKHVHQWHQFLQJXQGHUWKH             0DUNLQDUJXHVWKDWVKHZDVLPSURSHUO\LQGXFHGWRZLWKGUDZ
SOHD DJUHHPHQW  7KH GLVWULFW FRXUW DVNHG D QXPEHU RI        KHUREMHFWLRQVWRWKHSUHVHQWHQFHLQYHVWLJDWLRQUHSRUWE\WKH
TXHVWLRQVWKHSURSULHW\RIZKLFKZHUHFKDOOHQJHGRQDSSHDO          JRYHUQPHQWjVSURPLVHWRUHFRPPHQGDPRQWKVHQWHQFH
7KH&RXUWRI$SSHDOVFRPPHQWHG                                       6KH DUJXHV WKDW EHFDXVH VKH JDYH XS VXEVWDQWLDO ULJKWV LQ
                                                                      UHOLDQFH RQ WKH JRYHUQPHQWjV SURPLVH WKH UDWLRQDOH RI
  :KLOH LW LV WUXH WKDW 5XOH H SUHYHQWV D MXGJH IURP    6DQWREHOORY1HZ<RUN86FDQEHSURSHUO\
  VKDSLQJ WKH WHUPV RI D SOHD EDUJDLQ RU SUHVVXULQJ D        H[WHQGHGWRHQIRUFHWKHJRYHUQPHQWjVSXUSRUWHGDJUHHPHQWWR
  FULPLQDO GHIHQGDQW WR VHWWOH KLV FDVH WKHVH VWULQJHQW       UHFRPPHQG WKDW VKH ZRXOG EH VHQWHQFHG WR  PRQWKV LQ
                                                                      SULVRQ:HGRQRWQHHGWRUHDFKWKHTXHVWLRQRIZKHWKHUWKH
      8QLWHG6WDWHVY0DUNLQ                        1R     1R                       8QLWHG6WDWHVY0DUNLQ          

UDWLRQDOH RI 6DQWREHOOR FDQ EH H[WHQGHG WR WKLV VLWXDWLRQ           FKDUJHGRIIHQVHRUWRDOHVVHURUUHODWHGRIIHQVHWKH
KRZHYHUEHFDXVHZHGRQRWEHOLHYHWKDWDQDJUHHPHQWZDV                     DWWRUQH\IRUWKHJRYHUQPHQWZLOO
HYHUUHDFKHGEHWZHHQWKHGHIHQGDQWDQGWKHJRYHUQPHQWDVWR                     $ PRYHWRGLVPLVVRWKHUFKDUJHVRU
VHQWHQFLQJ                                                                     % UHFRPPHQG RU DJUHH QRW WR RSSRVH WKH
                                                                                    GHIHQGDQW
VUHTXHVWIRUDSDUWLFXODUVHQWHQFH
   2XU UHYLHZ RI WKH UHFRUG VKRZV WKDW GHIHQVH FRXQVHO                      RU VHQWHQFLQJ UDQJH RU WKDW D SDUWLFXODU
SURSRVHGDGHDODWWKHVWDWXVFRQIHUHQFHLQZKLFKKHZRXOG                          SURYLVLRQ RI WKH 6HQWHQFLQJ *XLGHOLQHV RU
ZLWKGUDZ WKH GHIHQGDQWjV REMHFWLRQV WR WKH SUHVHQWHQFH                        SROLF\VWDWHPHQWRUVHQWHQFLQJIDFWRULVRULV
LQYHVWLJDWLRQUHSRUWDQGWKHJRYHUQPHQWZRXOGUHFRPPHQGD                           QRW DSSOLFDEOH WR WKH FDVH  $Q\ VXFK
VHQWHQFH RI  PRQWKV ZKLFK LV DW WKH ORZ HQG RI WKH                    UHFRPPHQGDWLRQRUUHTXHVWLVQRWELQGLQJRQ
DSSOLFDEOHJXLGHOLQHUDQJH+RZHYHUZKHQ$86$:LOOLDPV                            WKHFRXUWRU
DVNHG LI WKH GHIHQGDQW ZDV DFWXDOO\ ZLWKGUDZLQJ WKH                      & DJUHHWKDWDVSHFLILFVHQWHQFHRUVHQWHQFLQJ
REMHFWLRQVGHIHQVHFRXQVHOLQGLFDWHGWKDWKHFRXOGQRWGRWKDW                     UDQJH LV WKH DSSURSULDWH GLVSRVLWLRQ RI WKH
mULJKW QRZl  :KLOH WKH $86$ SDUWLFLSDWHG LQ WKH                            FDVH RU WKDW D SDUWLFXODU SURYLVLRQ RI WKH
QHJRWLDWLRQV WKDW WRRN SODFH GXULQJ WKH VWDWXV FRQIHUHQFH                   6HQWHQFLQJ*XLGHOLQHVRUSROLF\VWDWHPHQWRU
WKHUHLVQRHYLGHQFHLQWKHUHFRUGWKDWWKHJRYHUQPHQWDJUHHG                       VHQWHQFLQJIDFWRULVRULVQRWDSSOLFDEOHWRWKH
WRDQ\GHDOUHJDUGLQJVHQWHQFLQJ:LWKRXWVXFKDQDJUHHPHQW                       FDVH6XFKDSOHDDJUHHPHQWLVELQGLQJRQWKH
WKH GHIHQGDQW KDV QR UHPHG\ XQGHU WKH UHDVRQLQJ RI                          FRXUWRQFHLWLVDFFHSWHGE\WKHFRXUW
6DQWREHOOR                                                                  7KH FRXUW VKDOO QRW SDUWLFLSDWH LQ DQ\ GLVFXVVLRQV
                                                                             EHWZHHQ WKH SDUWLHV FRQFHUQLQJ DQ\ VXFK SOHD
,,, )HG5&ULP3UR                                                   DJUHHPHQW
  7KH GHIHQGDQW DOVR DUJXHV WKDW WKH sXQH QG VWDWXV          )(' 5 &5,0 3H
FRQIHUHQFH YLRODWHG )HG 5 &ULP 3UR H  $ FODLP RI
LPSURSHU MXGLFLDO SDUWLFLSDWLRQ LQ SOHD QHJRWLDWLRQV LV           0DUNLQjVJXLOW\SOHDKDGEHHQHQWHUHGDQGDFFHSWHGE\WKH
FRJQL]DEOHRQDSSHDOHYHQLInDVKHUHnLWZDVQRWSUHYLRXVO\            GLVWULFWFRXUWEHIRUHWKHVWDWXVFRQIHUHQFHVRFFXUUHG+DGWKH
UDLVHGLQWKHGLVWULFWFRXUW6HH8QLWHG6WDWHVY6DPPRQV          SOHDQRW\HWEHHQHQWHUHGWKHGLVWULFWFRXUWjVSDUWLFLSDWLRQLQ
 )G   WK &LU   :H ZLOO WKHUHIRUH       WKH SOHD GLVFXVVLRQV DW WKH VWDWXV FRQIHUHQFH FOHDUO\ ZRXOG
FRQVLGHUZKHWKHUWKHGLVWULFWFRXUWjVSDUWLFLSDWLRQLQWKHVWDWXV     KDYHYLRODWHG5XOHH6HH8QLWHG6WDWHVY%DUUHWW
FRQIHUHQFH ZDV DQ LPSURSHU SDUWLFLSDWLRQ LQ VHQWHQFLQJ          )G  WK &LU   +RZHYHU RQFH WKH GHIHQGDQW
QHJRWLDWLRQV LQ YLRODWLRQ RI )HG 5 &ULP 3 H  :H    SOHDGV JXLOW\ WKH H[WHQW WR ZKLFK WKH GLVWULFW FRXUW PD\
UHYLHZWKLVFODLPIRUSODLQHUURU6HH6DPPRQV)GDW          SDUWLFLSDWHLQGLVFXVVLRQVUHJDUGLQJVHQWHQFLQJLVXQVHWWOHGLQ
                                                                  WKLV&LUFXLW
    5XOHHSURYLGHVLQSHUWLQHQWSDUW                             7KH DGYLVRU\ QRWHV WR 5XOH  H[SODLQ WKDW mWKH MXGJH
                                                                      VKRXOGQRWSDUWLFLSDWHLQSOHDGLVFXVVLRQVOHDGLQJWRDSOHD
     ,Q*HQHUDO7KHDWWRUQH\IRUWKHJRYHUQPHQWDQGWKH          DJUHHPHQW,WLVFRQWHPSODWHGWKDWWKHMXGJHPD\SDUWLFLSDWH
        DWWRUQH\IRUWKHGHIHQGDQWnRUWKHGHIHQGDQWZKHQ              LQVXFKGLVFXVVLRQVDVPD\RFFXUZKHQWKHSOHDDJUHHPHQWLV
        DFWLQJSURVHnPD\DJUHHWKDWXSRQWKHGHIHQGDQW
V            GLVFORVHGLQRSHQFRXUWl)HG5&ULP3HDGYLVRU\
        HQWHULQJ D SOHD RI JXLOW\ RU QROR FRQWHQGHUH WR D    FRPPLWWHHjV QRWH  $PHQGPHQWV  7KH )LIWK &LUFXLW
