      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


    1RV         ;
0,&+,*$1 %(// 7(/(3+21(        
&203$1<GED$0(5,7(&+       
                                     1RV
0,&+,*$1                            
         3ODLQWLII$SSHOODQW   !
                               
            &URVV$SSHOOHH    
                               
           Y                  
                               
s2+1 (1*/(5LQKLV2IILFLDO   
                               
&DSDFLW\DV*RYHUQRURIWKH    
6WDWHRI0LFKLJDQ'$9,' $    
69$1'$LQKLV2IILFLDO        
&DSDFLW\DV&RPPLVVLRQHURI    
WKH0LFKLJDQ3XEOLF6HUYLFH    
&RPPLVVLRQ52%(57 %          
                               
1(/621LQKLV2IILFLDO        
&DSDFLW\DV&RPPLVVLRQHURI    
WKH0LFKLJDQ3XEOLF6HUYLFH    
&RPPLVVLRQs2+1 *            
675$1'LQKLV2IILFLDO        
&DSDFLW\DV&KDLUPDQRIWKH    
                               
0LFKLJDQ3XEOLF6HUYLFH        
&RPPLVVLRQ                    
        'HIHQGDQWV$SSHOOHHV 
            &URVV$SSHOODQWV 
                               

                           
     0,%HOO7HOHSKRQH&R                1RV
      HWDOY(QJOHUHWDO                       


                                        
          1RV             
    9(5,=21 1257+                       
                                        
    ,1&25325$7('DQG&217(/             
    2) 7+( 6287+                       
    ,1&25325$7('GED*7(             
    6<67(06 2) 0,&+,*$1                
              3ODLQWLIIV$SSHOODQWV    
                   &URVV$SSHOOHHV     
                                        
                Y                      
    s2+1 (1*/(5LQKLV2IILFLDO        
    &DSDFLW\DV*RYHUQRURIWKH         
    6WDWHRI0LFKLJDQ'$9,' $         
    69$1'$LQKLV2IILFLDO             
                                        
    &DSDFLW\DV&RPPLVVLRQHURI         
    WKH0LFKLJDQ3XEOLF6HUYLFH         
    &RPPLVVLRQ52%(57 %               
    1(/621LQKLV2IILFLDO             
    &DSDFLW\DV&RPPLVVLRQHURI         
    WKH0LFKLJDQ3XEOLF6HUYLFH         
                                        
    &RPPLVVLRQs2+1 *                 
    675$1'LQKLV2IILFLDO             
    &DSDFLW\DV&KDLUPDQRIWKH         
    0LFKLJDQ3XEOLF6HUYLFH             
    &RPPLVVLRQs(11,)(5 0             
    *5$1+2/0LQKHU2IILFLDO           
                                        
    &DSDFLW\DV$WWRUQH\*HQHUDO        
    RIWKH6WDWHRI0LFKLJDQ            
                              
            'HIHQGDQWV$SSHOOHHV       
                 &URVV$SSHOODQWV      
                                        
                                       1
 0,%HOO7HOHSKRQH&R                 1RV       1RV                    0,%HOO7HOHSKRQH&R        
   HWDOY(QJOHUHWDO                                                             HWDOY(QJOHUHWDO

PD\EHIDOOWKHPRXWZHLJKVDQ\SRWHQWLDOKDUPWRWKH6WDWHRI                $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
0LFKLJDQ DQG PRUH LPSRUWDQWO\ WR WKHLU RZQ VXEVFULEHUV           IRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQDW'HWURLW
$FFRUGLQJO\DSUHOLPLQDU\LQMXQFWLRQDJDLQVWHQIRUFHPHQWRI                1RVn3DXO'%RUPDQ
07$  DQG  UHVSHFWLYHO\ LV ZDUUDQWHG  6HH                             'LVWULFWsXGJH
)ULHQGVKLS0DWHULDOV,QFY0LFKLJDQ%ULFN,QF)G
WK&LU                                                                  $UJXHG0D\
,,,&21&/86,21                                                                    'HFLGHGDQG)LOHGsXO\
   )RUWKHIRUHJRLQJUHDVRQVWKHGHFLVLRQRIWKHGLVWULFWFRXUW       %HIRUHs21(6DQG'$8*+75(<&LUFXLWsXGJHV
WRHQMRLQ07$LV$)),50('DQGWKHGLVWULFWFRXUWjV                          (&212086'LVWULFWsXGJH
GHQLDO RI SODLQWLIIVj PRWLRQ WR HQMRLQ 07$  LV
5(9(56('$FFRUGLQJO\WKLVPDWWHULV5(0$1'('WR                                        BBBBBBBBBBBBBBBBB
WKHGLVWULFWFRXUWIRUIXUWKHUSURFHHGLQJV
                                                                                                &2816(/
                                                                   $5*8('  0LFKDHO . .HOORJJ .(//2** +8%(5
                                                                   +$16(172''	(9$16:DVKLQJWRQ'&3DWULFN)
                                                                   3KLOELQ .,5./$1' 	 (//,6 :DVKLQJWRQ '& IRU
                                                                   $SSHOODQWV'DYLG$9RJHV2)),&(2)7+($77251(<
                                                                   *(1(5$//DQVLQJ0LFKLJDQIRU$SSHOOHHV21%5,()
                                                                   0LFKDHO . .HOORJJ 6HDQ $ /HY 0DUN /HZLV (YDQV
                                                                   .(//2** +8%(5 +$16(1 72'' 	 (9$16
                                                                   :DVKLQJWRQ '& 3DWULFN ) 3KLOELQ $QGUHZ % &OXERN
                                                                   0DWWKHZ7+HQGHUVRQ.,5./$1'	(//,6:DVKLQJWRQ
                                                                   '&sHIIHU\96WXFNH\3HWHU+(OOVZRUWK',&.,1621
                                                                   :5,*+702219$1'86(1	)5((0$1/DQVLQJ
                                                                   0LFKLJDQIRU$SSHOODQWV'DYLG$9RJHV2)),&(2)7+(
                                                                   $77251(< *(1(5$/ /DQVLQJ 0LFKLJDQ 3DWULFLD 6
                                                                   %DURQH 0,&+,*$1 $77251(< *(1(5$/ 38%/,&
                                                                   6(59,&( ',9,6,21 /DQVLQJ 0LFKLJDQ IRU $SSHOOHHV
                                                                   5RGHULFN 6 &R\ 7KRPDV ( 0DLHU &/$5. +,// 3/&
                                                                   2NHPRV0LFKLJDQIRU$PLFXV&XULDH




                                                                       
                                                                        7KH +RQRUDEOH 3HWHU & (FRQRPXV 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU
                                                                   WKH 1RUWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ
   0,%HOO7HOHSKRQH&R                   1RV         1RV                 0,%HOO7HOHSKRQH&R        
    HWDOY(QJOHUHWDO                                                              HWDOY(QJOHUHWDO

                      BBBBBBBBBBBBBBBBB                                   ,IODZIXODQGUHDVRQDEOHUDWHVIL[HGE\WKHFRPPLVVLRQ
                                                                          DUH DV JUHDW RU JUHDWHU WKDQ WKRVH HVWDEOLVKHG DQG
                          23,1,21                                         FROOHFWHGE\WKHFRPSDQ\QRUHIXQGVZLOOEHUHTXLUHG
                      BBBBBBBBBBBBBBBBB                                   KRZHYHULIWKHFRPPLVVLRQVKDOOIL[DQGGHWHUPLQHUDWHV
                                                                          ZKLFK DUH ORZHU WKDQ WKH >@ UDWHV FROOHFWHG E\ WKH
   3(7(5 & (&212086 'LVWULFW sXGJH  3ODLQWLIIV                  FRPSDQ\ DQG VDLG UDWHV IL[HG E\ WKH FRPPLVVLRQ DUH
0LFKLJDQ %HOO 7HOHSKRQH &RPSDQ\ GED $PHULWHFK                     ODZIXO UHDVRQDEOH DQG QRQFRQILVFDWRU\ WKHQ WKH
0LFKLJDQ DQG 9HUL]RQ 1RUWK ,QFRUSRUDWHG FROOHFWLYHO\               GLIIHUHQFHEHWZHHQWKHUDWHVFROOHFWHGE\WKHFRPSDQ\
mSODLQWLIIVl DSSHDO WKH GLVWULFW FRXUWjV RUGHU GHQ\LQJ WKHLU     DQGVDLGUDWHVSUHVFULEHGE\WKHFRPPLVVLRQVKDOOEH
UHTXHVW IRU D SUHOLPLQDU\ LQMXQFWLRQ RI  RI WKH            UHIXQGHGWRWKHFRPSDQ\jVFXVWRPHUV
0LFKLJDQ7HOHFRPPXQLFDWLRQV$FWRIm07$l07$
DEROLVKHGDIHHLPSRVHGXSRQFXVWRPHUVNQRZQDV                 ,G  6HH DOVR 0LFKLJDQ &RQVROLGDWHG *DV &RPSDQ\ Y
WKH HQG XVHU FRPPRQ OLQH FKDUJH m(8&/l  'HIHQGDQWV          0LFKLJDQ3XEOLF6HUYLFH&RPPLVVLRQ1:G
sRKQ(QJOHU*RYHUQRURIWKH6WDWHRI0LFKLJDQDQG'DYLG$            0LFK&RQVXPHUV3RZHU&RPSDQ\Y0LFKLJDQ
6YDQGD 5REHUW % 1HOVRQ DQG sRKQ * 6WUDQG                     3XEOLF 6HUYLFH &RPPLVVLRQ  1:G  
&RPPLVVLRQHUVRIWKH0LFKLJDQ3XEOLF6HUYLFH&RPPLVVLRQ                 0LFK&RQVHTXHQWO\LIWKH6WDWHXOWLPDWHO\SUHYDLOV
m036&lFURVVDSSHDOWKHGLVWULFWFRXUWjVRUGHUHQMRLQLQJ             LQWKLVDFWLRQWKHSODLQWLIIVPD\EHUHTXLUHGWRLVVXHUHIXQGV
DQRWKHUSURYLVLRQRIWKH07$ZKLFKIUR]HUHJXODWHG               RIWKH(8&/FKDUJHVFROOHFWHGDQGRUUDWHVFROOHFWHGDERYH
WHOHSKRQHUDWHVDWWKHLU0D\OHYHOXQWLO'HFHPEHU           D ODZIXOO\ HVWDEOLVKHG OHYHO  $V VXFK WKH DELOLW\ RI WKH
 H[FHSW IRU VHUYLFHV WKH 036& GHHPHG FRPSHWLWLYH           SODLQWLIIVWRLVVXHUHIXQGVVXEVWDQWLDOO\GLPLQLVKHVWKHKDUP
7KHSURYLVLRQVRIWKH07$DWLVVXHDSSOLHGRQO\WRWHOHSKRQH            WKDWPD\EHIDOOWKHLUVXEVFULEHUVLIDQLQMXQFWLRQLVJUDQWHG
VHUYLFH SURYLGHUV ZLWK PRUH WKDQ  VXEVFULEHUV o           DQGLVRXWZHLJKHGE\WKHKDUPWKDWPD\EHIDOOWKHSODLQWLIIV
QDPHO\WKHSODLQWLIIV
                                                                           )LQDOO\ ZH PXVW GHWHUPLQH ZKHWKHU WKH LVVXDQFH RI DQ
  )RUWKHIROORZLQJUHDVRQVZH$)),50WKHGLVWULFWFRXUWjV             LQMXQFWLRQZLOOVHUYHWKHSXEOLFLQWHUHVW7KHSODLQWLIIVKDYH
RUGHUSUHOLPLQDULO\HQMRLQLQJ07$DQG5(9(56(WKH                 PDGH D VKRZLQJ WKDW WKHUH LV D VXEVWDQWLDO OLNHOLKRRG WKDW
GLVWULFWFRXUWjVGHQLDORIWKHSODLQWLIIVjPRWLRQIRUHQMRLQPHQW        07$  DQG  UHVSHFWLYHO\ DUH XQFRQVWLWXWLRQDO
RI07$                                                         LQVRIDUDVHDFKVWDWXWHIDLOVWRSURYLGHDGHTXDWHVDIHJXDUGV
                                                                        DJDLQVWFRQILVFDWRU\UDWHV$VVXFKWKHSXEOLFLQWHUHVWZRXOG
, )$&76$1'352&('85$/%$&.*5281'                                      EH VHUYHG E\ WKH HQMRLQPHQW RI HDFK RI WKH FKDOOHQJHG
                                                                        VHFWLRQVRIWKH07$6HH3ODQQHG3DUHQWKRRG$VVRFLDWLRQ
  3ODLQWLIIV HDFK SURYLGH ORFDO WHOHSKRQH VHUYLFH WR RYHU        RI&LQFLQQDWL,QFY&LW\RI&LQFLQQDWL)G
FXVWRPHUVLQWKH6WDWHRI0LFKLJDQ7RJHWKHUWKH              WK &LU UHFRJQL]LQJ WKDW mWKH SXEOLF LV FHUWDLQO\
SODLQWLIIVVXSSO\RYHURIWKHORFDOWHOHSKRQHVHUYLFHLQ            LQWHUHVWHG LQ WKH SUHYHQWLRQ RI HQIRUFHPHQW RI RUGLQDQFHV
WKH 6WDWH  7KLUW\VL[ RWKHU FRPSDQLHV DFFRXQW IRU WKH          ZKLFKPD\EHXQFRQVWLWXWLRQDOl
UHPDLQGHURIORFDOWHOHSKRQHVHUYLFHEXWQRQHRIWKHPKDV
PRUHWKDQVXEVFULEHUV                                            ,QVXPPDU\WKHSODLQWLIIVKDYHSUHVHQWHGDVHULRXVTXHVWLRQ
                                                                        DVWRWKHFRQVWLWXWLRQDOLW\RIWKHFKDOOHQJHGSURYLVLRQVRIWKH
  7KHSODLQWLIIVFKDUJHWKHLU0LFKLJDQFXVWRPHUVDPRQWKO\              07$DQGKDYHGHPRQVWUDWHGWKDWWKHLUUHSDUDEOHKDUPZKLFK
IHH IRU mORFDO H[FKDQJH VHUYLFHl  7KLV VHUYLFH LQFOXGHV D
 0,%HOO7HOHSKRQH&R                    1RV         1RV               0,%HOO7HOHSKRQH&R        
   HWDOY(QJOHUHWDO                                                             HWDOY(QJOHUHWDO

   $OWKRXJKWKHSODLQWLIIVPD\UHFRXSWKHLUORVVHVE\UDLVLQJ           FHUWDLQQXPEHURImORFDOlWHOHSKRQHFDOOVZKLFKRULJLQDWHDQG
UDWHVDQGFRQVHTXHQWO\ZRXOGQRWVXIIHULUUHSDUDEOHILQDQFLDO          WHUPLQDWHZLWKLQDGHILQHGFDOOLQJDUHD7KHSODLQWLIIVDOVR
KDUPWKHUHDUHRWKHUIRUPVRILUUHSDUDEOHKDUPZKLFKPD\               RIIHUmORFDOWROOVHUYLFHlZKLFKFRYHUVFDOOVQRWGHILQHGDV
EHIDOOWKHPLIWKHFRXUWGRHVQRWHQMRLQHQIRUFHPHQWRI07$             HLWKHUORFDORUORQJGLVWDQFH7KHSODLQWLIIVFKDUJHFXVWRPHUV
DQGUHVSHFWLYHO\SHQGHQWOLWH7KHSODLQWLIIV           RQDSHUPLQXWHEDVLVIRUORFDOWROOFDOOV
DVVHUWWKDWWKH\ZLOOORVHFXVWRPHUJRRGZLOOLIWKH\DUHIRUFHG
WRUHFRXSORVVHVE\VXEVWDQWLDOO\UDLVLQJUDWHVDQGIHHVIRUWKH          7KHSODLQWLIIVDOVRFKDUJHWKHLUFXVWRPHUVRWKHUIHHVWZRRI
SHULRGGXULQJZKLFKWKLVDFWLRQPD\EHOLWLJDWHG7KLVFRXUW           ZKLFK DUH WKH LQWHUVWDWH HQG XVHU FRPPRQ OLQH FKDUJH
KDV KHOG WKDW HYHQ LI KLJKHU UDWHV DQG IHHV GR QRW GULYH     SUHVHQWO\  DQG WKH LQWUDVWDWH HQG XVHU FRPPRQ OLQH
FXVWRPHUVDZD\ORVVRIHVWDEOLVKHGJRRGZLOOPD\LUUHSDUDEO\            FKDUJH9HUL]RQLPSRVHVDQLQWUDVWDWH(8&/PRQWKO\FKDUJH
KDUPDFRPSDQ\6HH%DVLFRPSXWHU&RUSY6FRWW)G              RIDQG$PHULWHFKLPSRVHVDPRQWKO\LQWUDVWDWH
  WK &LU %HFDXVH mGDPDJHV IORZLQJ IURP           (8&/ FKDUJH  )XUWKHU SULRU WR WKH HQDFWPHQW RI 07$
VXFKORVVHV>RIFXVWRPHUJRRGZLOO@DUHGLIILFXOWWRFRPSXWHl           WKHSODLQWLIIVFRXOGLPSRVHRULQFUHDVHDWDQ\WLPH
WKDW ORVV WRR mDPRXQWV WR LUUHSDUDEOH LQMXU\l VHH DOVR        WKH LQWUDVWDWH (8&/ FKDUJH ZLWKRXW SULRU DSSURYDO RI WKH
*DWHZD\(5\&RY7HUPLQDO55$VVjQ)G                036&RUDKHDULQJEHIRUHWKDWERG\7KHRQO\OLPLWDWLRQRQ
 WK &LU m>6@KRZLQJ LQMXU\ WR JRRGZLOO FDQ           WKHLQWUDVWDWH(8&/FKDUJHLVWKDWLWPXVWUHPDLQEHORZWKH
FRQVWLWXWH LUUHSDUDEOH KDUP WKDW LV QRW FRPSHQVDEOH E\ DQ       LQWHUVWDWH (8&/ UDWH VHW E\ WKH )HGHUDO &RPPXQLFDWLRQV
DZDUGRIPRQH\GDPDJHVl7KHUHLVVXIILFLHQWHYLGHQFHLQ              &RPPLVVLRQm)&&l
WKH UHFRUG WR VXSSRUW D ILQGLQJ WKDW WKH SODLQWLIIV ZLOO EH
LUUHSDUDEO\ KDUPHG LI WKH\ DUH FRPSHOOHG WR UHFRXS WKHLU           2QsXO\$FWRIWKH3XEOLF$FWVRIWKH6WDWH
VXEVWDQWLDOSURMHFWHGORVVHVWKURXJKLQFUHDVHGUDWHVDQGIHHV          RI0LFKLJDQIRUZDVVLJQHGE\*RYHUQRUsRKQ(QJOHU
                                                                        DQGWRRNLPPHGLDWHHIIHFW$FWDPHQGHGWKH07$WR
  2IFRXUVHZHPXVWEDODQFHWKHKDUPVZKLFKWKHSODLQWLIIV             HQVXUHWKDWmHYHU\SHUVRQKDVDFFHVVWRMXVWUHDVRQDEOHDQG
PD\ VXIIHU DJDLQVW WKRVH ZKLFK SODLQWLIIVj VXEVFULEHUV PD\       DIIRUGDEOHEDVLFUHVLGHQWLDOWHOHFRPPXQLFDWLRQVHUYLFHlDQG
VXIIHULI07$DQGUHVSHFWLYHO\DUHHQMRLQHG             WR mDOORZ DQG HQFRXUDJH FRPSHWLWLRQ >LQ@ SURYLGLQJ
7KH SODLQWLIIV DVVHUW WKDW LI WKH FKDOOHQJHG SRUWLRQV RI WKH   WHOHFRPPXQLFDWLRQ VHUYLFHVl  0LFK &RPS /DZV
07$ DUH XOWLPDWHO\ GHFODUHG XQFRQVWLWXWLRQDO WKH\ ZLOO           DE$VVWDWHGSUHYLRXVO\WZRSURYLVLRQVRI
SURYLGHUHIXQGVWRWKHLUVXEVFULEHUVZLWKLQWHUHVW,Q*HQHUDO         $FW  DUH DW LVVXH KHUHLQ o  DQG  
7HOHSKRQH&RPSDQ\RI0LFKLJDQY0LFKLJDQ3XEOLF6HUYLFH                DEROLVKHVWKHLQWUDVWDWH(8&/DQGIUHH]HVWHOHSKRQH
&RPPLVVLRQ1:G0LFKWKHFRXUWGHFODUHG               UDWHVIRUVHUYLFHSURYLGHUVZLWKPRUHWKDQVXEVFULEHUV
WKDW LW ZDV D SURSHU H[HUFLVH RI WKH WULDO FRXUWjV HTXLW\     XQWLO 'HFHPEHU   XQOHVV D SURYLGHUjV VHUYLFHV DUH
MXULVGLFWLRQmWRSURWHFWWKHFRPSDQ\IURPFRQILVFDWRU\UDWHVl           GHHPHGFRPSHWLWLYHE\WKH036&LQYDULRXVFLUFXPVWDQFHV
E\ DOORZLQJ WKH FRPSDQ\ WR FROOHFW KLJKHU UDWHV ZKLOH WKH
036& FRQVLGHUHG WKH QHFHVVLW\ IRU WKH UHTXHVWHG UDWH
LQFUHDVH  ,G DW   ,Q GRLQJ VR WKH 0LFKLJDQ 6XSUHPH      ,QWKHSURFHHGLQJVEHIRUHWKHGLVWULFWFRXUWWKHSODLQWLIIV
&RXUWDSSURYHGRIWKHWULDOFRXUWjVRUGHUWKDWWKHWHOHSKRQH            DUJXHGLQWHUDOLDWKDW07$DQGYLRODWHWKH
FRPSDQ\HVWDEOLVKDWUXVWIXQGIURPZKLFKUHIXQGVFRXOGEH              'XH 3URFHVV &ODXVH RI WKH )RXUWHHQWK $PHQGPHQW  7KH
SDLGWRLWVVXEVFULEHUV7KH0LFKLJDQ6XSUHPH&RXUWTXRWHG             SODLQWLIIV DVVHUW WKDW WKHVH SURYLVLRQV DUH IDFLDOO\
WKHWULDOFRXUWjVUHDVRQLQJZLWKDSSURYDO                              XQFRQVWLWXWLRQDOEHFDXVHWKH\GRQRWSURYLGHDPHFKDQLVP
    0,%HOO7HOHSKRQH&R                     1RV      1RV               0,%HOO7HOHSKRQH&R       
     HWDOY(QJOHUHWDO                                                           HWDOY(QJOHUHWDO

WKURXJKZKLFKWHOHSKRQHVHUYLFHSURYLGHUVPD\HQVXUHWKDW                &RPPLVVLRQ WR DOWHU RU UHDGMXVW UDWHV RU FKDUJHV
WKH\ UHFHLYH D MXVW DQG UHDVRQDEOH UDWH RI UHWXUQ RQ WKHLU      UHWURDFWLYHO\,QGHHGWKH6XSUHPH&RXUWIRXQGWKDWWKH
LQYHVWPHQW  $V QRWHG DERYH WKH GLVWULFW FRXUW GHQLHG WKH       &RPPLVVLRQjVVWDWXWRU\DXWKRULW\WRIL[XWLOLW\UDWHVZDV
SODLQWLIIVjPRWLRQIRUSUHOLPLQDU\LQMXQFWLRQZLWKUHVSHFWWR             µTXLWHFOHDUO\SURVSHFWLYHRQO\j,QWKLVSURFHHGLQJ
07$  DQG JUDQWHG LW ZLWK UHVSHFW WR   2Q           KRZHYHU$PHULWHFK0LFKLJDQjVHIIRUWWRUHELOOWKH,;&V
6HSWHPEHUWKHSODLQWLIIVILOHGDQRWLFHRIDSSHDORI            LVQRWEDVHGRQD&RPPLVVLRQRUGHUWKDWUHWURDFWLYHO\
WKHGLVWULFWFRXUWjVRUGHUDQGVLPXOWDQHRXVO\PRYHGWKLVFRXUW            DIIHFWV$PHULWHFK0LFKLJDQjVUDWHVEXWXSRQDVWDWXWRU\
IRUDQHPHUJHQF\LQMXQFWLRQRI07$2Q6HSWHPEHU                 SURYLVLRQ WKDW H[SUHVVO\ SUHFOXGHV HQIRUFHPHQW RI WKH
  &KLHI sXGJH 0DUWLQ JUDQWHG WKH SODLQWLIIVj               GLVFRXQWRUGHUHGE\WKH&RPPLVVLRQXQWLOsXO\
HPHUJHQF\PRWLRQ                                                           ,Q SDVVLQJ 6HFWLRQ E WKH /HJLVODWXUH ZDV
                                                                          DZDUH RI WKH &RPPLVVLRQjV SULRU RUGHUV  ,QGHHG LQ
,, /$:                                                                   6HFWLRQ E WKH /HJLVODWXUH PDGH UHIHUHQFH WR
                                                                          WKRVH RUGHUV  $FFRUGLQJO\ WKH &RPPLVVLRQ GRHV QRW
    $6HYHUDELOLW\                                                      DJUHH WKDW WKH SURKLELWLRQ DJDLQVW UHWURDFWLYH
                                                                          UDWHPDNLQJZKLFKLVJURXQGHGRQLQWHUSUHWDWLRQRIWKH
  $V DQ LQLWLDO PDWWHU WKH FRXUW PXVW GHWHUPLQH ZKHWKHU          &RPPLVVLRQjVVWDWXWRU\UDWHPDNLQJDXWKRULW\VKRXOGEH
07$WKHUDWHIUHH]HSURYLVLRQPD\EHVHYHUHGIURP                  DSSOLHGWRWKLVVLWXDWLRQ$PHULWHFK0LFKLJDQjVULJKWWR
ZKLFKDEROLVKHVWKH(8&/7KHSODLQWLIIVDUJXHWKDW              UHFRYHU WKH XQGLVFRXQWHG DPRXQW IRU DFFHVV FKDUJHV
WKH WZR SURYLVLRQV PD\ QRW EH VHYHUHG DQG WKHUHIRUH WKH       EHWZHHQsXO\DQGsXQHLVEDVHGXSRQ
GLVWULFWFRXUWVKRXOGKDYHHQMRLQHGERWKVWDWXWRU\SURYLVLRQV            DQ DFW RI WKH /HJLVODWXUH WKDW WKH 6XSUHPH &RXUW KDV
0LFKLJDQjVVHYHUDELOLW\VWDWXWHSURYLGHV                                 GHWHUPLQHG FRQWUROV WKH RXWFRPH RI WKLV SURFHHGLQJ
                                                                          7KHUHIRUH WKH &RPPLVVLRQ DJUHHV ZLWK $PHULWHFK
    ,IDQ\SRUWLRQRIDQDFWRUWKHDSSOLFDWLRQWKHUHRIWRDQ\            0LFKLJDQWKDWWKH6XSUHPH&RXUWjVGHFLVLRQSUHFOXGHV
    SHUVRQRUFLUFXPVWDQFHVVKDOOEHIRXQGWREHLQYDOLGE\               DSSOLFDWLRQ RI WKH SURKLELWLRQ DJDLQVW UHWURDFWLYH
    D FRXUW VXFK LQYDOLGLW\ VKDOO QRW DIIHFW WKH UHPDLQLQJ       UDWHPDNLQJ WR WKRVH SURFHHGLQJ EHFDXVH WKH 6XSUHPH
    SRUWLRQVRUDSSOLFDWLRQVRIWKHDFWZKLFKFDQEHJLYHQ                &RXUWKDVGHWHUPLQHGWKDWWKH&RPPLVVLRQjVLPSRVLWLRQ
    HIIHFWZLWKRXWWKHLQYDOLGSRUWLRQRUDSSOLFDWLRQSURYLGHG           RI D  GLVFRXQW LQ DFFHVV FKDUJHV IRU $PHULWHFK
    VXFKUHPDLQLQJSRUWLRQVDUHQRWGHWHUPLQHGE\WKHFRXUW               0LFKLJDQjVFXVWRPHUVEHWZHHQsXO\DQGsXQH
    WREHLQRSHUDEOHDQGWRWKLVHQGDFWVDUHGHFODUHGWREH             ZDVXQODZIXO
    VHYHUDEOH
                                                                        0&, 7HOHFRPPXQLFDWLRQV &RUS Y $PHULWHFK  :/
0LFK &RPS /DZV   7KH 0LFKLJDQ 6XSUHPH &RXUW              DW0LFK36&'HF1R8
H[SODLQHGWKHRSHUDWLRQRIDQLGHQWLFDOSURYLVLRQLQDQRWKHU            8FLWDWLRQRPLWWHGHPSKDVLVDGGHG%HFDXVHWKH
VWDWXWHDVIROORZV                                                     0LFKLJDQ/HJLVODWXUHDEROLVKHGWKH(8&/DQGIUR]HUDWHVE\
    5HO\LQJRQWKH$FWjVVHYHUDELOLW\FODXVHGHIHQGDQWV           VWDWXWHWKH036&LVQRWSUHFOXGHGIURPVHWWLQJDUHWURDFWLYH
    PDLQWDLQ WKDW WKH /HJLVODWXUH H[SUHVVO\ LQWHQGHG WR           UDWHZKLFKDOORZVWKHSODLQWLIIVWRUHFRXSORVVHVFDXVHGE\
    SUHVHUYH DV PXFK RI WKH $FW DV SRVVLEOH  7KLV FODXVH     HQIRUFHPHQW RI WKH VWDWXWRU\ SURYLVLRQV  $FFRUGLQJO\ WKH
    SURYLGHV µ6HF   ,I DQ\ SRUWLRQ RI WKLV DFW RU WKH   SODLQWLIIVjDUJXPHQWWKDWWKHUHWURDFWLYHUDWHPDNLQJGRFWULQH
    DSSOLFDWLRQRIWKLVDFWWRDQ\SHUVRQRUFLUFXPVWDQFHLV            DSSOLHVWRWKLVFDVHLVZLWKRXWPHULW
 0,%HOO7HOHSKRQH&R                         1RV           1RV               0,%HOO7HOHSKRQH&R           
   HWDOY(QJOHUHWDO                                                                    HWDOY(QJOHUHWDO

  S   1:G >@ 7KXV KDG WKH SUHOLPLQDU\                     IRXQGWREHLQYDOLG E\DFRXUWWKHLQYDOLGLW\VKDOOQRW
  LQMXQFWLRQQRWLVVXHGDQGKDGWKHFRPSDQ\SUHYDLOHGLQ                        DIIHFWWKHUHPDLQLQJSRUWLRQVRUDSSOLFDWLRQVRIWKLVDFW
  WKHWULDORIWKLVFDXVHWKHODWWHUZRXOGKDYHDFKLHYHGD                      ZKLFKFDQEHJLYHQHIIHFWZLWKRXWWKHLQYDOLGSRUWLRQRU
  KROORZYLFWRU\LQGHHGVLQFHWKHUHZRXOGKDYHEHHQQR                           DSSOLFDWLRQLIWKHUHPDLQLQJSRUWLRQVDUHQRWGHWHUPLQHG
  OHJDODYHQXHRSHQWRWKHFRPSDQ\E\ZKLFKWRUHFRXSLWV                        E\ WKH FRXUW WR EH LQRSHUDEOHj  7KH GRFWULQH RI
  ILQDQFLDOORVVHV:HWKLQNWKLVFDVHSUHVHQWVDFODVVLF                       VHYHUDELOLW\KROGVWKDWVWDWXWHVVKRXOGEHLQWHUSUHWHGWR
  H[DPSOH RI D VLWXDWLRQ LQ ZKLFK D SDUW\ ZLOO VXIIHU                   VXVWDLQWKHLUFRQVWLWXWLRQDOLW\ZKHQLWLVSRVVLEOHWRGRVR
  µLUUHSDUDEOH KDUPj LQ WKH HYHQW WKDW D SUHOLPLQDU\                      :KHQHYHUDUHYLHZLQJFRXUWPD\VXVWDLQDQHQDFWPHQWE\
  LQMXQFWLRQLVQRWLVVXHGl                                                     SURSHUFRQVWUXFWLRQLWZLOOXSKROGWKHSDUWVZKLFKDUH
                                                                                 VHSDUDEOHIURPWKHUHSXJQDQWSURYLVLRQV7REHFDSDEOH
,GDWTXRWLQJDSSHOODWHFRXUWFDVHRIWKHVDPHQDPH                   RIVHSDUDWHHQIRUFHPHQWWKHYDOLGSRUWLRQRIWKHVWDWXWH
1:G0LFK&W$SS                                           PXVWEHLQGHSHQGHQWRIWKHLQYDOLGVHFWLRQVIRUPLQJD
                                                                                 FRPSOHWHDFWZLWKLQLWVHOI$IWHUVHSDUDWLRQRIWKHYDOLG
   7KHFDVHVGLVFXVVHGDERYHVWDQGRQO\IRUWKHSURSRVLWLRQ                      SDUWV RI WKH HQDFWPHQW WKH ODZ HQIRUFHG PXVW EH
WKDW WKH 036& PD\ QRW DGMXVW SDVW UDWHV E\ HVWDEOLVKLQJ                 UHDVRQDEOHLQYLHZRIWKH$FWDVRULJLQDOO\GUDIWHG2QH
UHWURDFWLYHUDWHV7KLVSURSRVLWLRQLQKHUHVIURPWKH0LFKLJDQ                   WHVWDSSOLHGLVZKHWKHUWKHODZPDNLQJERG\ZRXOGKDYH
6XSUHPH&RXUWjVGHWHUPLQDWLRQLQ0LFKLJDQ%HOOVXSUDWKDW                      SDVVHGWKHVWDWXWHKDGLWEHHQDZDUHWKDWSRUWLRQVWKHUHLQ
WKH036&jVmODZIXOO\HVWDEOLVKHGUDWHUHPDLQVLQIRUFHXQWLO                     ZRXOG EH GHFODUHG WR EH LQYDOLG DQG FRQVHTXHQWO\
DOWHUHGE\DVXEVHTXHQWO\ODZIXOUDWHl1:GDW                       H[FLVHGIURPWKH$FW
7KHUHIRUHEDVHGXSRQ0LFKLJDQ%HOODQGWKHFDVHVZKLFK
IROORZ LW WKH 036& PD\ QRW LPSRVH UHWURDFWLYH UDWHV                   3OHW]Y$XVWLQ1:G0LFKIRRWQRWHV
DIIHFWLQJ LWV HVWDEOLVKHG UDWHV  +RZHYHU WKHUH LV QR                 RPLWWHG  7KH SODLQWLIIV FRQWHQG WKDW WKH 0LFKLJDQ
SURKLELWLRQRQUHWURDFWLYHUDWHPDNLQJZKHUHUDWHVKDYHEHHQ                   /HJLVODWXUH FRXSOHG WKH (8&/ DEROLVKPHQW ZLWK WKH UDWH
HVWDEOLVKHG VWDWXWRULO\  $PHULWHFK DJUHHG ZLWK WKLV                     IUHH]HWRJLYHVXEVFULEHUVUDWHUHOLHIDQGWKXVVHYHULQJRQH
LQWHUSUHWDWLRQLQDUHFHQWFDVHEHIRUHWKH036&                               IURP WKH RWKHU ZLOO GHIHDW WKH SXUSRVH RI HQDFWLQJ WZR
                                                                               SURYLVLRQV&RQWUDU\WRWKHSODLQWLIIVjSRVLWLRQHQMRLQPHQWRI
  ,Q0LFKLJDQ%HOOVXSUDWKH6XSUHPH&RXUWJURXQGHGLWV                      07$  GRHV QRW UHQGHU WKH UHPDLQGHU RI WKH VWDWXWH
  GHFLVLRQ RQ WKH IDFW WKDW WKHUH ZDV QR H[SUHVV RU                   LQRSHUDEOH  6HYHUDQFH ZLOO JLYH WKH VWDWXWH LWV LQWHQGHG
  UHDVRQDEO\ LPSOLHG VWDWXWRU\ SURYLVLRQ DXWKRUL]LQJ WKH                  SXUSRVH o UDWH UHOLHI LQ WKH IRUP RI (8&/ DEROLVKPHQW o
                                                                               DOWKRXJKWRDOHVVHUH[WHQW7HOHSKRQHVHUYLFHSURYLGHUVPXVW
                                                                               VWLOODSSO\IRUDUDWHLQFUHDVHDQGWKHUHOHYDQWDXWKRULWLHVPD\
    
     ,Q   *HQHUDO 7HOHSKRQH &RPSDQ\ RI 0LFKLJDQ Y 0LFKLJDQ 3XEOLF             WUHDW VXFK DSSOLFDWLRQV ZLWK WKH LQWHQWLRQ RI SURWHFWLQJ
6HUYLFH &RPPLVVLRQ      1:G  0LFK WKH FRXUW DGGUHVVHG         FRQVXPHUVIURPH[FHVVLYHUDWHV$FFRUGLQJO\WKHSODLQWLIIVj
WKH 036&jV RUGHU JUDQWLQJ D UDWH LQFUHDVH VPDOOHU WKDQ WKH XWLOLW\             DUJXPHQWODFNVPHULWDQG07$PD\EHHQMRLQHGZLWK
FRPSDQ\jV UHTXHVW DQG D 0LFKLJDQ FLUFXLW FRXUWjV VXEVHTXHQW GHFUHH
RUGHULQJ D WHPSRUDU\ LQFUHDVH LQ UDWHV DERYH WKH 036&jV GHWHUPLQDWLRQ
                                                                               QRDIIHFWRQ
,Q DGGUHVVLQJ DQ DUJXPHQW FRQFHUQLQJ WKH 036&jV GHOD\ LQ FRQVLGHULQJ
IDFWV UHOHYDQW WR WKH UDWH GHWHUPLQDWLRQ WKH FRXUW UHPDUNHG m7KLV &RXUW
PDGH LW YHU\ FOHDU LQ 0LFKLJDQ %HOO >VXSUD@ WKDW WKH FRPPLVVLRQ FDQQRW
HVWDEOLVK D UHWURDFWLYH UDWH WKHUHE\ FRUUHFWLQJ LQMXVWLFH FDXVHG E\ GHOD\ LQ
HVWDEOLVKLQJ UDWHV IRU WKH SDVWl ,G DW 
    0,%HOO7HOHSKRQH&R                    1RV         1RV                 0,%HOO7HOHSKRQH&R         
     HWDOY(QJOHUHWDO                                                               HWDOY(QJOHUHWDO

    %6WDQGDUGRI5HYLHZ                                                   HDUQLQJV,QVWHDGWKHFRPPLVVLRQjVUDWHIL[LQJRUGHUVDUH
                                                                            HIIHFWLYHRQO\SURVSHFWLYHO\
  7KH FRXUW UHYLHZV WKH JUDQW RU GHQLDO RI D SUHOLPLQDU\
LQMXQFWLRQIRUDQDEXVHRIGLVFUHWLRQ$FFRUGLQJO\WKLVFRXUW           ,GDW7KHFRXUWjVKROGLQJZDVEDVHGRQWKHIROORZLQJ
ZLOOQRWGLVWXUEDGLVWULFWFRXUWjVILQGLQJVRIIDFWXQOHVVFOHDUO\       SURSRVLWLRQm>2@UGHUO\SURWHFWLRQRIWKHULJKWVRIWKHSDUWLHV
HUURQHRXVEXWUHYLHZVDGLVWULFWFRXUWjVOHJDOFRQFOXVLRQVGH            FRQFHUQHG UHTXLUHV WKH KROGLQJ LQ ODZ WKDW D ODZIXOO\
QRYR6HH6RXWKZHVW:LOOLDPVRQ&RXQW\Y6ODWHU)G                HVWDEOLVKHG UDWH UHPDLQV LQ IRUFH XQWLO DOWHUHG E\ D
WK&LUFLWLQJ6DQGLVRQY0LFKLJDQ+LJK                 VXEVWDQWLDOO\ODZIXOUDWHl,GDW7KHUHIRUHWKH036&jV
6FK$WKOHWLF$VVjQ)GWK&LU                  DXWKRULW\LQIL[LQJUDWHVLVRQO\SURVSHFWLYHDQGLWPD\QRW
                                                                          LPSRVH D UHWURDFWLYH UDWH ZKHUH WKH SUHYLRXV UDWHV ZHUH
   $GLVWULFWFRXUWPXVWFRQVLGHUIRXUIDFWRUVLQGHWHUPLQLQJ             ODZIXOO\HVWDEOLVKHGDQGLPSRVHG
ZKHWKHUWRLVVXHDSUHOLPLQDU\LQMXQFWLRQ7KHGLVWULFWFRXUW
PXVW FRQVLGHU m ZKHWKHU WKH PRYDQW KDV D VWURQJ                  7KHSODLQWLIIVDQGWKHGLVWULFWFRXUWLQFRUUHFWO\UHOLHGXSRQ
OLNHOLKRRGRIVXFFHVVRQWKHPHULWVZKHWKHUWKHPRYDQW               0LFKLJDQ &RQVROLGDWHG *DV &RPSDQ\ Y 0LFKLJDQ 3XEOLF
ZRXOG RWKHUZLVH VXIIHU LUUHSDUDEOH LQMXU\  ZKHWKHU              6HUYLFH&RPPLVVLRQ1:G0LFKIRUWKHLU
LVVXDQFHRIDSUHOLPLQDU\LQMXQFWLRQZRXOGFDXVHVXEVWDQWLDO              FRQFOXVLRQWKDWWKHSODLQWLIIVFRXOGQRWUHFRXSWKHLUORVVHVLI
KDUPWRRWKHUVDQGZKHWKHUWKHSXEOLFLQWHUHVWZRXOGEH              WKH VWDWXWHV UHPDLQHG LQ HIIHFW GXULQJ WKH OLWLJDWLRQ   ,Q
VHUYHGE\LVVXDQFHRIDSUHOLPLQDU\LQMXQFWLRQl6ODWHU             0LFKLJDQ&RQVROLGDWHG*DVWKHSODLQWLIIXWLOLW\FRPSDQ\KDG
)G DW  TXRWLQJ 0F3KHUVRQ Y 0LFKLJDQ +LJK 6FK              SHWLWLRQHG IRU D UDWH LQFUHDVH DQG WKH 036& JUDQWHG RQH
$WKOHWLF$VVjQ)GWK&LUm7KHIRXU             ZKLFKZDVVPDOOHUWKDQWKDWUHTXHVWHGE\WKHFRPSDQ\$
FRQVLGHUDWLRQVDSSOLFDEOHWRSUHOLPLQDU\LQMXQFWLRQGHFLVLRQV             0LFKLJDQ FLUFXLW FRXUW XSRQ UHYLHZ LVVXHG D WHPSRUDU\
DUHIDFWRUVWREHEDODQFHGQRWSUHUHTXLVLWHVWKDWPXVWEHPHWl          LQMXQFWLRQJUDQWLQJDUDWHLQFUHDVHLQDGGLWLRQWRWKDWJUDQWHG
6L[&OLQLFV+ROGLQJ&RUS,,Y&DIFRPS6\VWHPV)G                E\WKH036&7KH0LFKLJDQ&RXUWRI$SSHDOVDIILUPHGWKH
WK&LUFLWLQJ:DVKLQJWRQY5HQR)G               FLUFXLWFRXUWjVUXOLQJDQGWKH6WDWHDSSHDOHGWRWKH0LFKLJDQ
  WK &LU  m1R VLQJOH IDFWRU ZLOO EH           6XSUHPH&RXUW,QLWVVXPPDU\VWDWHPHQWDIILUPLQJWKHORZHU
GHWHUPLQDWLYHDVWRWKHDSSURSULDWHQHVVRIHTXLWDEOHUHOLHI        FRXUWjV MXGJPHQW WKH FRXUW TXRWHG ZLWK DSSURYDO WKH
DQGWKHGLVWULFWFRXUWjVZHLJKLQJDQGEDODQFLQJRIWKHHTXLWLHV           IROORZLQJSDVVDJHIURPWKH0LFKLJDQ&RXUWRI$SSHDOV
LV RYHUUXOHG µRQO\ LQ WKH UDUHVW RI FDVHVjl  ,G  LQWHUQDO
TXRWDWLRQ PDUNV DQG FLWDWLRQV RPLWWHG  )LQDOO\ m>W@KH             m2XU 6XSUHPH &RXUW KDV H[SOLFLWO\ KHOG WKDW D
SXUSRVHRIDSUHOLPLQDU\LQMXQFWLRQLVPHUHO\WRSUHVHUYHWKH               FRPPLVVLRQPD\QRWHVWDEOLVKUHWURDFWLYHUDWHVWKHUHE\
UHODWLYHSRVLWLRQVRIWKHSDUWLHVXQWLODWULDORQWKHPHULWVFDQ           FRUUHFWLQJDQ\LQMXVWLFHFDXVHGE\DGHOD\LQHVWDEOLVKLQJ
EHKHOGl,G                                                              QHFHVVDU\LQFUHDVHGUDWHV0LFKLJDQ%HOO7HOHSKRQH&R
                                                                            Y3XEOLF6HUYLFH&RPPLVVLRQ0LFK
    &&RQVWLWXWLRQDOLW\RI&KDOOHQJHG3URYLVLRQV                          1:G*HQHUDO7HOHSKRQH&RPSDQ\RI0LFKLJDQ
                                                                            Y 3XEOLF 6HUYLFH &RPPLVVLRQ 6XSUD  0LFK $W
      /LNHOLKRRGRI6XFFHVVRQWKH0HULWV
  %\ HQDFWLQJ $FW  WKH 6WDWH RI 0LFKLJDQ VRXJKW WR
FRQWURO LQWUDVWDWH WHOHSKRQH UDWHV FKDUJHG E\ $PHULWHFK
0LFKLJDQ DQG 9HUL]RQ  &RXUWV KDYH ORQJ KHOG WKDW 6WDWH
 0,%HOO7HOHSKRQH&R                   1RV        1RV                 0,%HOO7HOHSKRQH&R          
   HWDOY(QJOHUHWDO                                                             HWDOY(QJOHUHWDO

     %DODQFHRI+DUGVKLSVDQG3XEOLF,QWHUHVW                     LPSRVHG UHJXODWRU\ SULFH FRQWUROV DUH FRQVWLWXWLRQDO ZLWKLQ
                                                                      FHUWDLQ OLPLWV  3XUVXDQW WR WKH 'XH 3URFHVV &ODXVH RI WKH
  7KHSODLQWLIIVDVVHUWWKDWWKH\ZRXOGEHXQDEOHWRUHFRXS           )RXUWHHQWK $PHQGPHQW WR WKH 8QLWHG 6WDWHV &RQVWLWXWLRQ
DQ\ ORVVHV LQFXUUHG DV D UHVXOW RI WKH DEROLVKPHQW RI WKH   m>S@ULFH FRQWURO LV µXQFRQVWLWXWLRQDO    LI DUELWUDU\
(8&/SXUVXDQWWR07$DQGWKHUDWHIUHH]HLPSRVHG             GLVFULPLQDWRU\RUGHPRQVWUDEO\LUUHOHYDQWWRWKHSROLF\WKH
E\   7KH\ DVVHUW WKDW WKH mUHWURDFWLYH UDWHPDNLQJ       OHJLVODWXUHLVIUHHWRDGRSWjl,Q5H3HUPLDQ%DVLQ$UHD
GRFWULQHlEDUVDQ\UHFRXSPHQWRIWKHLUORVVHV7KHSODLQWLIIVj       5DWH&DVHV86TXRWLQJ1HEELDY
DUJXPHQWLVZLWKRXWPHULW                                          3HRSOH RI 6WDWH RI 1HZ <RUN 86   
                                                                      HPSKDVLVLQRULJLQDO5DWHVHQDFWHGE\WKH6WDWHPXVWEH
   7KH0LFKLJDQ6XSUHPH&RXUWILUVWGLVFXVVHGWKHUHWURDFWLYH         MXVW DQG UHDVRQDEOH  6HH LG DW  FLWLQJ )HGHUDO 3RZHU
UDWHPDNLQJ GRFWULQH LQ 0LFKLJDQ %HOO 7HOHSKRQH &R Y         &RPPLVVLRQY1DWXUDO*DV3LSHOLQH&R86
0LFKLJDQ 3XEOLF 6HUYLFH &RPPLVVLRQ  1:G                  m5DWHV ZKLFK HQDEOH >D@ FRPSDQ\ WR RSHUDWH
0LFK  ,Q 0LFKLJDQ %HOO 7HOHSKRQH WKH SODLQWLII        VXFFHVVIXOO\ WR PDLQWDLQ LWV ILQDQFLDO LQWHJULW\ WR DWWUDFW
WHOHSKRQH FRPSDQ\ FKDOOHQJHG WKH 036&jV RUGHU WR WKH           FDSLWDODQGWRFRPSHQVDWHLWVLQYHVWRUVIRUWKHULVNDVVXPHG
FRPSDQ\WRUHGXFHJURVVUHYHQXHVIRUWKHSUHYLRXV\HDUE\             FHUWDLQO\ FDQQRW EH FRQGHPQHG DV LQYDOLG    l  )HGHUDO
PDNLQJSURUDWDUHIXQGVWRLWVVXEVFULEHUV7KHFRXUWVWDWHG         3RZHU&RPPLVVLRQY+RSH1DWXUDO*DV&R86
WKHLVVXHLQWKHFDVHDVIROORZV                                     6HHDOVR&DOIDUP,QVXUDQFH&RY'HXNPHMLDQ
                                                                       3G   &DO m7KH MXVW FRPSHQVDWLRQ
  +DV WKH FRPPLVVLRQ VWDWXWRU\ SRZHU WR RUGHU                   VDIHJXDUGHGWRWKHXWLOLW\E\WKH)RXUWHHQWK$PHQGPHQWLVD
  UHWURDFWLYHO\ D UHIXQG WR EH PDGH E\ WKH WHOHSKRQH          UHDVRQDEOHUDWHRIUHWXUQRQWKHYDOXHRIWKHSURSHUW\XVHGDW
  FRPSDQ\ WR LWV VXEVFULEHUV RXW RI FKDUJHV IRU VHUYLFHV      WKHWLPHWKDWLWLVEHLQJXVHG IRU WKHSXEOLFVHUYLFHl
  UHQGHUHGDQGLQODUJHSDUWSDLGSULRUWRWKHGDWHRIWKH           7KHUHIRUH mWKH &RQVWLWXWLRQ SURWHFWV XWLOLWLHV IURP EHLQJ
  RUGHU VXFK FKDUJHV KDYLQJ EHHQ PDGH LQ FRQIRUPLW\          OLPLWHGWRDFKDUJHIRUWKHLUSURSHUW\VHUYLQJWKHSXEOLFZKLFK
  ZLWKWKHH[LVWLQJUDWHVIL[HGE\WKHFRPPLVVLRQRULWV             LVVRµXQMXVWjDVWREHFRQILVFDWRU\l'XTXHVQH/LJKW&RY
  SUHGHFHVVRUDQGLQHIIHFWGXULQJWKHWLPHWKHVHUYLFHV             %DUDVFK86FLWLQJ&RYLQJWRQ	/H[LQJWRQ
  ZHUHUHQGHUHG"                                                      7XUQSLNH5RDG&RY6DQGIRUG86
                                                                      )HGHUDO3RZHU&RPPLVVLRQY1DWXUDO*DV3LSHOLQH&R
,G DW   $IWHU UHYLHZLQJ 0LFKLJDQ ODZ WKH FRXUW         86)HGHUDO3RZHU&RPPLVVLRQY7H[DFR
FRQFOXGHGWKDWm>W@KHUHLVQRH[SUHVVRUUHDVRQDEO\LPSOLHG           ,QF  86    VHH DOVR 2NODKRPD
VWDWXWRU\ SURYLVLRQ DXWKRUL]LQJ WKH FRPPLVVLRQ WR DOWHU RU     1DWXUDO *DV &R Y 5XVVHOO  86   
UHDGMXVWWHOHSKRQHUDWHVRUFKDUJHVUHWURDFWLYHO\l,GDW      KROGLQJWKDWWKHSODLQWLIIXWLOLW\FRPSDQ\GHVHUYHGDUHPHG\
7KHUHIRUHWKHFRXUWKHOG                                             IRUFRQILVFDWRU\UDWHV3UHQGHUJDVWY1HZ<RUN7HOHSKRQH
  >7@KHFRPPLVVLRQKDVRQO\VXFKSRZHUUHODWLYHWRIL[LQJ             &R  86    VDPH 3DFLILF 7HOHSKRQH 	
  WKHUDWHVRUHDUQLQJVRIWKHWHOHSKRQHFRPSDQ\DVDUHE\            7HOHJUDSK&RY.X\NHQGDOO86
  VWDWXWHH[SUHVVO\RUE\QHFHVVDU\LPSOLFDWLRQYHVWHGLQLW         VDPH%DQWRQY%HOW/LQH5DLOZD\&RUS86
  8QGHUVXFKUXOHZHFDQQRWILQGWKDWWKHFRPPLVVLRQKDV              VDPH
  HLWKHU H[SUHVV RU LPSOLHG VWDWXWRU\ DXWKRULW\ WR               7KH 'XH 3URFHVV &ODXVH UHTXLUHV D PHFKDQLVP WKURXJK
  UHWURDFWLYHO\ UHGXFH DSSHOOHHjV UDWHV RU LWV DFFUXHG          ZKLFKDUHJXODWHGXWLOLW\PD\FKDOOHQJHWKHLPSRVLWLRQRIUDWHV
 0,%HOO7HOHSKRQH&R                       1RV     1RV                     0,%HOO7HOHSKRQH&R            
   HWDOY(QJOHUHWDO                                                                  HWDOY(QJOHUHWDO

ZKLFKPD\EHFRQILVFDWRU\6HH&DOIDUPVXSUD*XDUDQW\               QRWFRQVLGHUWKHQHHGIRUDUHWXUQRQLQYHVWPHQWZKLFKWKH
1DWjO,QV&RY*DWHV)GWK&LU6WDWH            DERYHGLVFXVVHG SUHFHGHQW UHTXLUHV  &RQVHTXHQWO\ 07$
)DUP 0XW $XWR ,QV &R Y 1HZ sHUVH\  $G           GGRHVQRWDGHTXDWHO\VDIHJXDUGDJDLQVWFRQILVFDWRU\
1s  7KH TXHVWLRQ WKHQ LV ZKHWKHU WKH 07$            UDWHV
DGHTXDWHO\ VDIHJXDUGV DJDLQVW FRQILVFDWRU\ UDWHV DQG
WKHUHIRUHHQVXUHVDFRQVWLWXWLRQDOUDWHRIUHWXUQ                      :LWKUHVSHFWWRHWKHGLVWULFWFRXUWUHDVRQHGWKDW
                                                                       m>L@QRUGHUIRUDSURYLGHUjVLQYHVWPHQWLQWKHORFDOH[FKDQJH
  07$  SURKLELWV DQ\ UDWH LQFUHDVH IRU HYHU\               QHWZRUN WR EH µHFRQRPLFDOO\ MXVWLILDEOHj    LW PXVW EH
mWHOHFRPPXQLFDWLRQVHUYLFHlRIIHUHGWRVXEVFULEHUVIRUPRUH            VXIILFLHQWWRFRYHUFRVWVDQGWRVHUYLFHERWKGHEWDQGHTXLW\
WKDQWKUHH\HDUVEHWZHHQ0D\DQG'HFHPEHU                LQYHVWPHQWVLQWKHFRPSDQ\7KDWLVWKHHVVHQFHRIHFRQRPLF
 ZLWK WZR H[FHSWLRQV  5DWH UHOLHI PD\ EH REWDLQHG     MXVWLILFDWLRQls$7KHGLVWULFWFRXUWGRHVQRWFLWHWRDQ\
 ZKHUH SXUVXDQW WR 07$  D VHUYLFH SURYLGHU         DXWKRULW\ LQ VXSSRUW RI WKLV SURSRVLWLRQ  &RQVLGHULQJ WKH
VHUYHVIHZHUWKDQVXEVFULEHUVDQGZKHUHVHUYLFHV          LQDGHTXDF\ RI WKH GHILQLWLRQ RI mMXVW DQG UHDVRQDEOHl
DUHGHWHUPLQHGWREHFRPSHWLWLYHSXUVXDQWWR07$              FRQWDLQHGLQ07$GLVFXVVHGE\WKHFRXUWDQWHLWPD\
7KH ILUVW LV LQDSSOLFDEOH WR WKH SODLQWLIIV KHUHLQ DQG WKH   EH LQIHUUHG WKDW DQ mHFRQRPLFDOO\ MXVWLILDEOHl UDWH LV RQH
VHFRQGLVFRQVWLWXWLRQDOO\LQDGHTXDWH                                ZKLFK PHUHO\ FRYHUV   WKH LQFUHDVHG FRVW RI SURYLGLQJ ORFDO
                                                                       H[FKDQJHVHUYLFH$VZHSUHYLRXVO\VWDWHGPHUHO\SURYLGLQJ
  7KH FRPSHWLWLYH RSWRXW SURYLVLRQ FRQWDLQHG LQ 07$             IRUDUHWXUQZKLFKRQO\FRYHUVFRVWVLVLQDGHTXDWHXQGHUZHOO
RQLWVIDFHIDLOVLQIRXUUHVSHFWV)LUVWLWGRHVQRW      HVWDEOLVKHGGXHSURFHVVVWDQGDUGV$EVHQWDQ\LQGLFDWLRQWKDW
DGGUHVV WKH UHDVRQDEOHQHVV RI FXUUHQWO\ UHJXODWHG UDWHV         WKH0LFKLJDQ/HJLVODWXUHLQWHQGHGWRGHILQHDQmHFRQRPLFDOO\
6HFRQGWKHPHUHSRVVLELOLW\WKDWUHJXODWHGUDWHVPD\EHFRPH           MXVWLILDEOHlUDWHWRHQVXUHDUDWHRIUHWXUQZKLFKFRPSRUWVZLWK
FRPSHWLWLYHGRHVQRWUHGXFHRUHOLPLQDWHWKHSRVVLELOLW\WKDW          GXHSURFHVVWKHFRXUWFDQQRWFRQFOXGHWKDW07$H
VXFKUDWHVDUHFRQILVFDWRU\1H[WWKHRSWRXWSURYLVLRQIDLOV        SURYLGHVDQDGHTXDWHVDIHJXDUGDJDLQVWFRQILVFDWRU\UDWHV
                                                                          ,QVXP07$IUHH]HVWHOHSKRQHUDWHVDQG
                                                                       DEROLVKHV WKH (8&/ ZLWKRXW SURYLGLQJ D PHFKDQLVP WR
    
                                                                       VDIHJXDUG WKH ULJKW WR HDUQ D FRQVWLWXWLRQDO UDWH RI UHWXUQ
     7KH UHOHYDQW SURYLVLRQV RI 07$  VWDWH                        $FFRUGLQJO\WKHSODLQWLIIVjKDYHGHPRQVWUDWHGDVXEVWDQWLDO
                                                                       OLNHOLKRRG RI GHPRQVWUDWLQJ WKDW 07$  DQG 
         1RWZLWKVWDQGLQJ DQ\ RWKHU SURYLVLRQ RI WKLV DFW DQG
    H[FHSW DV DOORZHG E\ VHFWLRQ  RU IRU VHUYLFHV GHWHUPLQHG
                                                                       UHVSHFWLYHO\DUHXQFRQVWLWXWLRQDO
    WR EH FRPSHWLWLYH XQGHU VXEVHFWLRQ  DQG IRU UDWHV FKDUJHG
    XQGHU FRQWUDFW WKH UDWH FKDUJHG IRU HYHU\ WHOHFRPPXQLFDWLRQ
    VHUYLFH SURYLGHG WR DQ HQGXVHU LQ WKLV VWDWH VKDOO EH QR KLJKHU
    WKDQ WKH UDWH FKDUJHG IRU WKH VHUYLFH DV RI 0D\     
                                                                           
                                                                              7KH FRXUW DOVR QRWHV WKDW LQ DGGLWLRQ WR WKH FRQVWLWXWLRQDO LQDGHTXDF\
         7KH UDWHV GHWHUPLQHG XQGHU WKLV VHFWLRQ VKDOO UHPDLQ LQ    RI 07$ H ZLWK UHVSHFW WR GHILQLQJ DQ mHFRQRPLFDOO\ MXVWLILDEOHl
    HIIHFW IRU HDFK VHUYLFH XQWLO 'HFHPEHU   RU XQWLO WKH      UDWH LW RQO\ SURYLGHV IRU LQFUHDVHG UDWHV LQ DUHDV ZKHUH WHOHSKRQH VHUYLFH
    FRPPLVVLRQ GHWHUPLQHV WKDW D VHUYLFH LV FRPSHWLWLYH IRU DQ         SURYLGHUV ZLVK WR LQYHVW LQ QHZ LQIUDVWUXFWXUH ,W GRHV QRW DGGUHVV WKH
    LGHQWLILDEOH FODVV RU JURXS RI FXVWRPHUV LQ DQ H[FKDQJH JURXS     QHHG WR LQFUHDVH UDWHV LQ RWKHU JHRJUDSKLF DUHDV ZKHUH UDWHV PD\ EH
    RI H[FKDQJHV RU RWKHU FOHDUO\ GHILQHG JHRJUDSKLFDO DUHD          FRQILVFDWRU\ ZKHWKHU RU QRW WHOHSKRQH VHUYLFH SURYLGHUV KDYH SURSRVHG
    ZKLFKHYHU LV HDUOLHU                                              EHJXQ RU FRPSOHWHG QHZ LQIUDVWUXFWXUH LQYHVWPHQW
 0,%HOO7HOHSKRQH&R                    1RV         1RV                     0,%HOO7HOHSKRQH&R            
   HWDOY(QJOHUHWDO                                                                   HWDOY(QJOHUHWDO

  7KHGLVWULFWFRXUWDOVRHUURQHRXVO\GHWHUPLQHGWKDW07$               WRSURYLGHIRUWLPHO\UHOLHIIURPFRQILVFDWRU\UDWHV)LQDOO\
 SURYLGHV DGHTXDWH VDIHJXDUGV DJDLQVW FRQILVFDWRU\          DOWKRXJK WKH SODLQWLIIV KDYH RWKHU XQUHJXODWHG LQFRPH
UDWHV07$VWDWHV                                             VWUHDPV WKH\ DUH QRW UHTXLUHG WR VXEVLGL]H WKHLU UHJXODWHG
                                                                        VHUYLFHV ZLWK LQFRPH IURP UDWHV HLWKHU GHHPHG WR EH
  ,QUHYLHZLQJDUDWHDOWHUDWLRQXQGHUVXEVHFWLRQWKH              FRPSHWLWLYH RU ZLWK UHYHQXHV JHQHUDWHG IURP XQUHJXODWHG
  >036&@VKDOOFRQVLGHURQO\RQHRUPRUHRIWKHIROORZLQJ               VHUYLFHV6HH%URRNV6FDQORQ&RY5DLOURDG&RPPLVVLRQ
  IDFWRUVLIUHOHYDQWWRWKHUDWHDOWHUDWLRQDVVSHFLILHGE\WKH        86&DOIDUP3GDW7KHUHIRUH
  SURYLGHU                                                             XQGHU07$LIWKHSODLQWLIIVjUDWHVEHFDPHFRPSHWLWLYH
                                                                        LQ0LFKLJDQjVDUHDFRGHEXWZHUHQRWFRPSHWLWLYHLQWKH
  D7RWDOVHUYLFHORQJUXQLQFUHPHQWDOFRVWRIEDVLFORFDO             DUHD FRGH DQG WKXV UHPDLQHG IUR]HQ WKH\ FDQQRW EH
  H[FKDQJHVHUYLFHV                                                    IRUFHG WR VXEVLGL]H WKH IUR]HQ UDWHV ZLWK UHYHQXH IURP WKH
                                                                        FRPSHWLWLYHUDWHVRUIURPRWKHUXQUHJXODWHGVHUYLFHZKLFK
  E&RPSDULVRQRIWKHSURSRVHGUDWHWRWKHUDWHVFKDUJHG              WKH\ RIIHU  ,Q VXP 07$  GRHV QRW LQFOXGH DQ\
  E\RWKHUSURYLGHUVLQWKLVVWDWHIRUWKHVDPHVHUYLFH                SURYLVLRQVZKLFKDGHTXDWHO\VDIHJXDUGDJDLQVWLPSRVLWLRQRI
                                                                        FRQILVFDWRU\UDWHV
  F :KHWKHU D QHZ IXQFWLRQ IHDWXUH RU FDSDELOLW\ LV
  EHLQJ RIIHUHG DV D FRPSRQHQW RI EDVLF ORFDO H[FKDQJH             $OWKRXJK07$GRHVQRWFRQWDLQDGHTXDWHVDIHJXDUGV
  VHUYLFH                                                              RWKHUSURYLVLRQVRIWKH07$DUJXDEO\DWWHPSWWRHQVXUHWKH
                                                                        SODLQWLIIV UHFHLYH D FRQVWLWXWLRQDO UDWH RI UHWXUQ  07$
  G:KHWKHUWKHUHKDVEHHQDQLQFUHDVHLQWKHFRVWVWR                 SURYLGHV WKDW mWKH UDWHV IRU EDVLF ORFDO H[FKDQJH
  SURYLGHEDVLFORFDOH[FKDQJHVHUYLFHLQWKHJHRJUDSKLF                VHUYLFHVKDOOEHMXVWDQGUHDVRQDEOHlLWGHILQHVmUHDVRQDEOH
  DUHDRIWKHSURSRVHGUDWH                                            UDWHl RU mMXVW DQG UHDVRQDEOH UDWHl DV mD UDWH WKDW LV QRW
  H :KHWKHU WKH SURYLGHUjV IXUWKHU LQYHVWPHQW LQ WKH           LQDGHTXDWHH[FHVVLYHRUXQUHDVRQDEO\GLVFULPLQDWRU\$UDWH
  QHWZRUN LQIUDVWUXFWXUH RI WKH JHRJUDSKLF DUHD RI WKH           LV LQDGHTXDWH LI LW LV OHVV WKDQ WKH WRWDO VHUYLFH ORQJ UXQ
  SURSRVHG UDWH LV HFRQRPLFDOO\ MXVWLILDEOH ZLWKRXW WKH           LQFUHPHQWDOFRVWRISURYLGLQJWKHVHUYLFH>76/5,&@l6HHLG
  SURSRVHGUDWH                                                        \  7KH SODLQWLIIV DUJXH WKDW WKH VWDWXWRU\
                                                                        GHILQLWLRQRIDmMXVWDQGUHDVRQDEOHUDWHlFRQWDLQHGLQ07$
0LFK &RPS /DZV   7KH GLVWULFW FRXUW                GRHV QRW SDVV FRQVWLWXWLRQDO PXVWHU  7KH FRXUW
GHWHUPLQHG WKDW WKH ODVW WZR IDFWRUV DGHTXDWHO\ SURWHFWHG        DJUHHV  7KH GHILQLWLRQ FRQWDLQHG LQ 07$  FOHDUO\
SODLQWLIIVjULJKWWRDQDGHTXDWHUDWHRIUHWXUQ                      GRHVQRWJXDUDQWHHDFRQVWLWXWLRQDOO\DGHTXDWHUDWHRIUHWXUQ
                                                                        IRUUHJXODWHGWHOHSKRQHVHUYLFHSURYLGHUVEHFDXVHLWPHUHO\
  07$ G GRHV QRW JXDUDQWHH WHOHSKRQH VHUYLFH             SHUPLWVWHOHSKRQHVHUYLFHSURYLGHUVWRFRYHUFRVWVDQGGRHV
SURYLGHUVDFRQVWLWXWLRQDOUDWHRIUHWXUQ2QLWVIDFHLWPHUHO\
SURYLGHV IRU D UDWH LQFUHDVH WR FRYHU WKH FRVW RI SURYLGLQJ
VHUYLFH LQ D JHRJUDSKLF DUHD  8QGHU 07$ G WKH
SODLQWLIIVDJDLQPD\EHUHTXLUHGWRVXEVLGL]HUDWHVLQFHUWDLQ              
JHRJUDSKLFDUHDVZLWKUDWHVLQRWKHUDUHDVRUZLWKUHYHQXHV                  7KH FRXUW QHHG QRW DGGUHVV WKH WLPLQJ RI UDWH UHOLHI o WKDW LV ZKHWKHU
FROOHFWHG IURP RWKHU XQUHJXODWHG OLQHV RI EXVLQHVV               WKH SODLQWLIIV DUH HQWLWOHG WR D SUH RU SRVWGHSULYDWLRQ KHDULQJ RQ D UDWH
                                                                        UHGXFWLRQ o IRU WKH SXUSRVH RI WKLV IDFLDO FKDOOHQJH DW WKH SUHOLPLQDU\
)XUWKHUPRUHWKHVWDWXWHjVSURYLVLRQIRULQFUHDVHGFRVWVGRHV           LQMXQFWLRQ VWDJH
 0,%HOO7HOHSKRQH&R                          1RV           1RV                    0,%HOO7HOHSKRQH&R          
   HWDOY(QJOHUHWDO                                                                          HWDOY(QJOHUHWDO

QRWHQVXUHDIDLUDQGUHDVRQDEOHUDWHRIUHWXUQRQLQYHVWPHQW                     )XUWKHUPRUHWKH76/5,&EDVHGGHILQLWLRQRIDQLQDGHTXDWH
6HH,Q5H3HUPLDQ%DVLQVXSUD                                                 UDWHZKLFKWKHGLVWULFWFRXUWUHOLHGXSRQGRHVQRWHQVXUHWKDW
                                                                                WHOHSKRQHVHUYLFHSURYLGHUVUHFHLYHDFRQVWLWXWLRQDOO\IDLUDQG
   0RUHRYHU WKH 1LQWK &LUFXLW LQ *XDUDQW\ 1DWLRQDO                       UHDVRQDEOH UDWH RI UHWXUQ  7KH 0LFKLJDQ /HJLVODWXUH KDV
,QVXUDQFH&RY*DWHV)GDGGUHVVHGWKH                      GHILQHG76/5,&DVIROORZV
FRQVWLWXWLRQDOLW\ RI D 1HYDGD LQVXUDQFH VWDWXWH VLPLODU WR
07$  LQ LWV GHILQLWLRQ RI DQ mLQDGHTXDWHl UDWH                    7RWDO VHUYLFH ORQJ UXQ LQFUHPHQWDO FRVWV PHDQV JLYHQ
6HFWLRQ%RIWKH1HYDGD5HYLVHG6WDWXWHVVWDWHG                        FXUUHQW VHUYLFH GHPDQG LQFOXGLQJ DVVRFLDWHG FRVWV RI
m>U@DWHVDUHLQDGHTXDWHLIWKH\DUHFOHDUO\LQVXIILFLHQWWRJHWKHU                HYHU\FRPSRQHQWQHFHVVDU\WRSURYLGHWKHVHUYLFHRI
ZLWK WKH LQFRPH IURP LQYHVWPHQWV DWWULEXWDEOH WR WKHP WR                 WKHIROORZLQJ
VXVWDLQSURMHFWHGORVVHVDQGH[SHQVHVLQWKHFODVVRIEXVLQHVV
RI ZKLFK WKH\ DSSO\l  ,G DW   7KH 1HYDGD VWDWXWH                 L 7KH WRWDO IRUZDUGORRNLQJ FRVW RI D
HVVHQWLDOO\SUHVHUYHGLQVXUDQFHFRPSDQLHVjDELOLW\WRUHFRXS                      WHOHFRPPXQLFDWLRQVHUYLFHUHOHYDQWJURXSRIVHUYLFHRU
WKH FRVWV RI WKHLU VHUYLFHV  7KH 1LQWK &LUFXLW KHOG WKDW               EDVLF QHWZRUN FRPSRQHQW XVLQJ FXUUHQW OHDVW FRVW
DOWKRXJKWKH1HYDGDVWDWXWHJXDUDQWHHGWKDWLQVXUHUVZRXOG                        WHFKQRORJ\ WKDW ZRXOG EH UHTXLUHG LI WKH SURYLGHU KDG
mEUHDN HYHQ    LW GRHV QRW JXDUDQWHH WKH FRQVWLWXWLRQDOO\            QHYHURIIHUHGWKHVHUYLFH
UHTXLUHGµIDLUDQGUHDVRQDEOHUHWXUQjl,GFLWLQJ)HGHUDO
3RZHU&RPPjQY+RSH1DWXUDO*DV&R86                           LL 7KH WRWDO FRVW WKDW WKH SURYLGHU ZRXOG LQFXU LI WKH
m>7@KHIL[LQJRIµMXVWDQGUHDVRQDEOHjUDWHVLQYROYHV                    SURYLGHU ZHUH WR LQLWLDOO\ RIIHU WKH VHUYLFH JURXS RI
DEDODQFLQJRIWKHLQYHVWRUDQGFRQVXPHULQWHUHVWV>7@KH                  VHUYLFHRUEDVLFQHWZRUNFRPSRQHQW
LQYHVWRULQWHUHVWKDVDOHJLWLPDWHFRQFHUQZLWKWKHILQDQFLDO
LQWHJULW\ RI WKH FRPSDQ\ ZKRVH UDWHV DUH EHLQJ UHJXODWHG               0LFK&RPS/DZVII2QLWVIDFHII
)URPWKHLQYHVWRURUFRPSDQ\SRLQWRIYLHZLWLVLPSRUWDQW                     VHWVWKH76/5,&DWDOHYHOZKLFKRQO\DFFRXQWVIRUWKHFRVWRI
WKDWWKHUHEHHQRXJKUHYHQXHQRWRQO\IRURSHUDWLQJH[SHQVHV                    SURYLGLQJVHUYLFHV8QGHUWKHGHILQLWLRQVHWIRUWKLQ07$
EXWDOVRIRUWKHFDSLWDOFRVWVRIWKHEXVLQHVV7KHVHLQFOXGH                  DUDWHZRXOGRQO\EHLQDGHTXDWHLILWZDVVHWEHORZ
WKH VHUYLFH RI WKH GHEW DQG WKH GLYLGHQGV RQ WKH VWRFNl            WKHFRVWLQFXUUHGE\WKHVHUYLFHSURYLGHU7KLVFOHDUO\GRHV
3XUVXDQW WR WKH UHDVRQLQJ VHW IRUWK LQ *XDUDQW\ 1DWLRQDO               QRWVDWLVI\WKHFRQVWLWXWLRQDOVWDQGDUGVHWIRUWKDERYHEHFDXVH
VXSUDWKH07$jVGHILQLWLRQRIDmMXVWDQGUHDVRQDEOHUDWHl                     LWPHUHO\HQVXUHVFRVWUHFRYHU\ZLWKRXWJXDUDQWHHLQJDIDLU
GRHV QRW JXDUDQWHH WKHFRQVWLWXWLRQDOO\UHTXLUHG IDLU DQG                 DQGUHDVRQDEOHUDWHRIUHWXUQRQLQYHVWPHQW6HH*XDUDQW\
UHDVRQDEOHUDWHRIUHWXUQ                                                      1DWLRQDO VXSUD DW   ,Q VXP 07$  GRHV QRW
                                                                                GHILQH D mMXVW DQG UHDVRQDEOHl UDWH LQ D PDQQHU ZKLFK
                                                                                JXDUDQWHHV SODLQWLIIV DQ DGHTXDWH UDWH RI UHWXUQ RQ WKHLU
                                                                               LQYHVWPHQW
       ,PSRUWDQWO\ WKH FRXUW DOVR KHOG WKDW m>Q@HLWKHU >WKH VWDWXWH@ QRU WKH
1HYDGD ,QVXUDQFH &RGH RI ZKLFK LW >ZDV@ D SDUW SURYLGH>G@ DQ\
PHFKDQLVP WR JXDUDQWHH D FRQVWLWXWLRQDOO\ IDLU DQG UHDVRQDEOH UHWXUQl
,G DW 

                                                                                LV D[LRPDWLF WKDW GXH SURFHVV JXDUDQWHHV D IDLU DQG UHDVRQDEOH UHJXODWRU\
    
      $OWKRXJK WKH GLVWULFW FRXUW PD\ EH FRUUHFW LQ LWV GHWHUPLQDWLRQ WKDW      UDWH QRW MXVW WKH SRVVLELOLW\ RI DFTXLULQJ VXFK D UDWH IURP DQ DXWKRULW\
WKHUH LV QR OLPLW RQ WKH 036&jV DXWKRULW\ WR VHW UDWHV mDQ\ZKHUH ZLWKLQ         VHOHFWLQJ UDWHV ZLWKLQ D SUHVFULEHG UDQJH FRQWDLQLQJ FRQILVFDWRU\ DQG IDLU
WKH UDQJH IURP LQDGHTXDWH RQ WKH RQH KDQG WR H[FHVVLYH RQ WKH RWKHUl LW        UDWHV s$ 
