           5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
                3XUVXDQW WR 6L[WK &LUFXLW 5XOH                                 5REHUWVY8QLYHUVDO                    1RV
        (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU
                                                                                   8QGHUZULWHUV,QV&R
                    )LOH 1DPH DS

                                                                                                   BBBBBBBBBBBBBBBBB
81,7('67$7(6&28572)$33($/6                                                                          &2816(/
                   )257+(6,;7+&,5&8,7                                     $5*8('  .HQQHWK / *LEVRQ :(,&. *,%621 	
                     BBBBBBBBBBBBBBBBB                                       /2:5<&X\DKRJD)DOOV2KLRIRU$SSHOODQW'DQLHO$
                                                                             5LFKDUGV :(6721 +85' )$//21 3$,6/(< 	
                                                                             +2:/(< &OHYHODQG 2KLR IRU $SSHOOHH  21 %5,()
 */$'<6 52%(576                   ;                                         .HQQHWK / *LEVRQ :(,&. *,%621 	 /2:5<
         3ODLQWLII$SSHOODQW                                               &X\DKRJD )DOOV2KLRIRU$SSHOODQW'DQLHO$5LFKDUGV
            &URVV$SSHOOHH                                                 5REHUW ( *RII sU 5RQDOG $ 5LVSR :(6721 +85'
                                      1RV                     )$//21 3$,6/(< 	 +2:/(< &OHYHODQG 2KLR IRU
                                                                            $SSHOOHH
            Y                       !
                                    
                                                                              0225(sGHOLYHUHGWKHRSLQLRQRIWKHFRXUWLQZKLFK
 81,9(56$/ 81'(5:5,7(56                                                     &2//,(5 ' s MRLQHG  %$7&+(/'(5 s SS 
 ,16 &2                                                                  GHOLYHUHGDVHSDUDWHFRQFXUULQJRSLQLRQ
           'HIHQGDQW$SSHOOHH                                                                    BBBBBBBBBBBBBBBBB
               &URVV$SSHOODQW 
                                                                                                      23,1,21
                                  1                                                                BBBBBBBBBBBBBBBBB
       $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
        IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW$NURQ                            .$5(11(/6210225(&LUFXLWsXGJH7KHSODLQWLII
      1Rn'DQ$3ROVWHU'LVWULFWsXGJH                           *ODG\V5REHUWVm5REHUWVlDSSHDOVWKHGLVWULFWFRXUWjVJUDQW
                                                                             RI VXPPDU\ MXGJPHQW WR WKH GHIHQGDQW 8QLYHUVDO
                   $UJXHG'HFHPEHU                                 8QGHUZULWHUVm8QLYHUVDOlLQWKLVGLYHUVLW\DFWLRQ5REHUWVjV
                                                                             VRQ6WHSKHQZDVDQHPSOR\HHRI0DF,QWLUH&KHYUROHWZKLFK
                'HFLGHGDQG)LOHGsXO\                             KDG ERWK SULPDU\ DQG XPEUHOOD LQVXUDQFH SROLFLHV ZLWK
                                                                             8QLYHUVDO  6WHSKHQ ZDV NLOOHG LQ DQ DXWRPRELOH DFFLGHQW
  %HIRUH%$7&+(/'(5DQG0225(&LUFXLWsXGJHV                             FDXVHG E\ DQ XQGHULQVXUHG DQG QHJOLJHQW GULYHU  7KH
              &2//,(5'LVWULFWsXGJH                                      LQVXUDQFHSROLF\WKDW8QLYHUVDOLVVXHGWR0DF,QWLUH&KHYUROHW
                                                                             OLPLWHG WKH DPRXQW RI XQGHULQVXUHG FRYHUDJH WR 
                                                                             5REHUWV DUJXHV WKDW WKLV OLPLWDWLRQ ZDV LQHIIHFWLYH EHFDXVH
                                                                             8QLYHUVDO GLG QRW SURSHUO\ RIIHU XQGHULQVXUHG PRWRULVW
                                                                             FRYHUDJH LQ WKH DPRXQW RI WKH SROLF\ OLPLWV DQG WKDW DV D
                                                                             UHVXOWVKHLVHQWLWOHGWRWKHIXOODPRXQWRIOLDELOLW\LQVXUDQFH
                                                                            XQGHUWKHPDLQDQGXPEUHOODSROLFLHV
     7KH +RQRUDEOH &XUWLV / &ROOLHU 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH
(DVWHUQ 'LVWULFW RI 7HQQHVVHH VLWWLQJ E\ GHVLJQDWLRQ




                                   
1RV                      5REHUWVY8QLYHUVDO                   5REHUWVY8QLYHUVDO                   1RV
                                      8QGHUZULWHUV,QV&R                     8QGHUZULWHUV,QV&R

  7KHGLVWULFWFRXUWJUDQWHGVXPPDU\MXGJPHQWWR8QLYHUVDO                  8QLYHUVDO LVVXHG WKH SROLF\ LQ TXHVWLRQ WR 0DF,QWLUH
KROGLQJWKDWWKHUHZDVDYDOLGRIIHURIXQGHULQVXUHGPRWRULVW             &KHYUROHW IRU WKH SROLF\ SHULRG RI 1RYHPEHU   WR
FRYHUDJHLQWKHDPRXQWRIWKHSROLF\OLPLWV7KHGLVWULFWFRXUW          1RYHPEHU7KHZULWWHQSROLF\SURYLGHGDSDFNDJHRI
GLG KRZHYHU DZDUG 5REHUWV  WKH DPRXQW RI                 JDUDJHDQGEDVLFDXWRPRELOHFRYHUDJHFROOHFWLYHO\UHIHUUHG
XQGHULQVXUHGFRYHUDJHOLVWHGRQWKHVHOHFWLRQIRUP5REHUWV              WRDVmSULPDU\FRYHUDJHlDVZHOODVDQXPEUHOODSROLF\7KH
DSSHDOVWKDWGHFLVLRQFODLPLQJWKDWVKHLVHQWLWOHGWRDQDZDUG          SULPDU\ FRYHUDJH KDG D OLDELOLW\ OLPLW RI  WKH
RIWKHIXOODPRXQWRIWKHSROLF\OLPLWV8QLYHUVDO           XPEUHOODFRYHUDJHKDGDOLDELOLW\OLPLWRI7KH
FURVVDSSHDOV FODLPLQJ WKDW WKH  VXP WKDW ZDV              SROLF\ DOVR SURYLGHG XQLQVXUHGXQGHULQVXUHG m808,0l
DZDUGHGVKRXOGKDYHEHHQHQWLUHO\RIIVHWE\WKHWKDW             PRWRULVWFRYHUDJH0DF,QWLUH&KHYUROHWjVSUHVLGHQW$UWKXU
ZDVSRWHQWLDOO\DYDLODEOHIURPWKHQHJOLJHQWGULYHUjVLQVXUDQFH           0F,QW\UH VLJQHG D ZULWWHQ VHOHFWLRQ IRUP VSHFLI\LQJ WKDW
SROLF\                                                                   FHUWDLQ GHVLJQDWHG KLJKOHYHO HPSOR\HHV ZRXOG UHFHLYH
                                                                           LQ FRYHUDJH ZKLOH JDUDJH HPSOR\HHV ZRXOG
  %HFDXVHWKHGLVWULFWFRXUWHUUHGLQKROGLQJWKDWWKHUHZDVD            UHFHLYH  LQ FRYHUDJH  7KH ZULWWHQ IRUP EULHIO\
YDOLGRIIHURIXQGHULQVXUHGPRWRULVWFRYHUDJHZH5(9(56(                 GHVFULEHG WKH 808,0 FRYHUDJH LW SURYLGHG EXW GLG QRW
WKHGLVWULFWFRXUWjVJUDQWRIVXPPDU\MXGJPHQWWR8QLYHUVDO               KRZHYHU LQFOXGH WKH SULFH RI SUHPLXPV IRU 808,0
DQG 5(0$1' WKH FDVH IRU IXUWKHU SURFHHGLQJV FRQVLVWHQW             FRYHUDJH
ZLWKWKLVRSLQLRQ
                                                                             7KHSROLF\DFTXLUHGE\0DF,QWLUH&KHYUROHWLQZDVD
                       ,%$&.*5281'                                     UHQHZDOSROLF\0DF,QWLUH&KHYUROHWREWDLQHGWKHILUVWYHUVLRQ
                                                                          RIWKLVSROLF\IURP8QLYHUVDOLQ$WWKHWLPHWKDWWKH
  2Q 6HSWHPEHU   6WHSKHQ 5REHUWV ZDV VHULRXVO\             ILUVW SROLF\ ZDV LVVXHG 8QLYHUVDOjV DJHQW )UDQN 6]RFV
LQMXUHGLQDQDXWRPRELOHDFFLGHQWFDXVHGE\WKHQHJOLJHQFHRI             m6]RFVl GLVFXVVHG 808,0 FRYHUDJH ZLWK 0DF,QWLUHjV
5\DQ :DUQHU m:DUQHUl  6WHSKHQ GLHG ILYH GD\V ODWHU            WKHQ JHQHUDO PDQDJHU )UDQN 0RQWLVDQR m0RQWLVDQRl
$OWKRXJK :DUQHU ZDV LQVXUHG WKH GDPDJHV VXVWDLQHG E\              7KHUH LV QR HYLGHQFH WKDW WKHVH QHJRWLDWLRQV UHVXOWHG LQ D
6WHSKHQ DQG KLV IDPLO\ H[FHHGHG WKH DPRXQW RI FRYHUDJH            ZULWWHQRIIHURUDZULWWHQUHMHFWLRQRI808,0FRYHUDJH
DYDLODEOHXQGHU:DUQHUjVSROLF\*ODG\V5REHUWV6WHSKHQjV
PRWKHUILOHGWKHLQVWDQWDFWLRQDJDLQVW8QLYHUVDOVHHNLQJWR              5REHUWVDQG8QLYHUVDOERWKPRYHGIRUVXPPDU\MXGJPHQW
UHFRYHU SXUVXDQW WR DQ LQVXUDQFH SROLF\ KHOG E\ 6WHSKHQjV         7KH GLVWULFW FRXUW GHQLHG 5REHUWVjV PRWLRQ IRU VXPPDU\
HPSOR\HU0DF,QWLUH&KHYUROHW                                           MXGJPHQWDQGJUDQWHG8QLYHUVDOjVPRWLRQ7KHGLVWULFWMXGJH
                                                                          KHOGWKDW808,0FRYHUDJHZDVERWKSURSHUO\RIIHUHGDQG
                                                                          VHOHFWHGDQGWKDW5REHUWVZDVWKHUHIRUHRQO\HQWLWOHGWRWKH
                                                                          RI808,0FRYHUDJHH[SOLFLWO\VWDWHGLQWKHSROLF\
    
     7KHVH   FODLPV KDYH FRPH WR EH NQRZQ JHQHUDOO\ DV 6FRWW3RQW]HU      5REHUWV KDV DSSHDOHG WR WKLV FRXUW  8QLYHUVDO KDV FURVV
FODLPV SXUVXDQW WR WKH 2KLR 6XSUHPH &RXUWjV GHFLVLRQ LQ 6FRWW3RQW]HU    DSSHDOHGFODLPLQJWKDWWKHGLVWULFWFRXUWHUUHGLQQRWVHWWLQJ
Y /LEHUW\ 0XWXDO )LUH ,QVXUDQFH &R  1(G  2KLR         RII WKH DZDUG E\ WKH  DYDLODEOH IURP :DUQHUjV
ZKHUH WKH 2KLR 6XSUHPH &RXUW KHOG WKDW DQ HPSOR\HH ZKR ZDV QRW
DFWLQJ ZLWKLQ WKH VFRSH RI KLV HPSOR\PHQW ZDV DQ LQVXUHG XQGHU KLV
                                                                          LQVXUDQFHSROLF\
HPSOR\HUjV FRPPHUFLDO OLDELOLW\ SROLFLHV DQG WKHUHIRUH HQWLWOHG WR
808,0 EHQHILWV WKDW DURVH DV D PDWWHU RI ODZ 6HH /HH/LSVWUHX Y
&KXEE *URXS RI ,QV &RV  )G   WK &LU  GHVFULELQJ
IXUWKHU WKH QDWXUH RI WKHVH 6FRWW3RQW]HU FODLPV
1RV                     5REHUWVY8QLYHUVDO                      5REHUWVY8QLYHUVDO                    1RV
                                     8QGHUZULWHUV,QV&R                        8QGHUZULWHUV,QV&R

                         ,,$1$/<6,6                                   OLPLWVRIWKHSROLF\,IDQLQVXUDQFHFRPSDQ\GLGQRWRIIHU
                                                                         808,0FRYHUDJHLQVXFKDQDPRXQWDQLQMXUHGLQVXUHGZDV
$sXULVGLFWLRQ                                                         JLYHQ E\ ODZ 808,0 FRYHUDJH LQ WKH IXOO DPRXQW RI WKH
                                                                         SROLF\*\RULYsRKQVWRQ&RFD&ROD%RWWOLQJ*URXS,QF
   7KHGLVWULFWFRXUWEHORZKDGGLYHUVLW\MXULVGLFWLRQRYHUWKH          1(G2KLR2KLRFRXUWVVWUHVVHGWKDW
SODLQWLIIjVFODLPSXUVXDQWWR86&DVWKHSODLQWLII         m>W@KHSXUSRVHRIWKHUHTXLUHPHQWLVWRSURWHFWSHUVRQVLQMXUHG
LVDQ2KLRFLWL]HQDQGWKHGHIHQGDQWLVDFLWL]HQRI.DQVDV             LQDXWRPRELOHDFFLGHQWV IURPORVVHVZKLFKEHFDXVHRIWKH
6HH/HH/LSVWUHXY&KXEE*URXSRI,QV&RV)G              WRUWIHDVRUjVODFNRIOLDELOLW\FRYHUDJHZRXOGRWKHUZLVHJR
 WK &LU  KROGLQJ WKDW IHGHUDO FRXUWV KDYH        XQFRPSHQVDWHGlDQGWKDWWKHmVWDWXWHVKRXOG EHFRQVWUXHG
MXULVGLFWLRQRYHUDFWLRQVE\DQLQVXUHGDJDLQVWKLVRUKHURZQ           OLEHUDOO\LQRUGHUWRHIIHFWXDWH>WKLV@OHJLVODWLYHSXUSRVHl,G
LQVXUDQFHFRPSDQ\LIWKHWZRDUHGLYHUVHEHFDXVHVXFKDFWLRQV            DW  TXRWDWLRQV RPLWWHG  $V D UHVXOW mLQVXUDQFH
DUH QRW GLUHFW DFWLRQV ZLWKLQ WKH PHDQLQJ RI  86&          FRPSDQLHV>ERUH@WKHEXUGHQRIVKRZLQJWKDWDQ\UHMHFWLRQ
 F  7KLV FRXUW KDV MXULVGLFWLRQ RYHU WKH GLVWULFW   ZDV NQRZLQJO\ PDGH E\ WKH FXVWRPHUl  ,G TXRWDWLRQ
FRXUWjVILQDOMXGJPHQWSXUVXDQWWR86&                     RPLWWHG
%6WDQGDUGVRI5HYLHZ                                                     7RVLPSOLI\WKHSUREOHPVRISURRILQWKHVHW\SHVRIFDVHV
                                                                         WKH2KLR6XSUHPH&RXUWLQ*\RULLQWHUSUHWHGWKHVWDWXWHDVLW
   :HUHYLHZDGLVWULFWFRXUWjVJUDQWRIVXPPDU\MXGJPHQWGH             ZDVZULWWHQEHIRUHLWZDVDPHQGHGLQE\+%WR
QRYR:LOOLDPVY0HKUD)GWK&LU             UHTXLUH ERWK D ZULWWHQ RIIHU RI 808,0 FRYHUDJH DQG D
7KH GHQLDO RI VXPPDU\ MXGJPHQW LV XVXDOO\ FRQVLGHUHG DQ          ZULWWHQUHMHFWLRQRIWKDWRIIHUHYHQWKRXJKWKHVWDWXWHRQLWV
LQWHUORFXWRU\RUGHUDQGWKXVQRWDSSHDODEOH3KHOSVY&R\             IDFHGLGQRWH[SOLFLWO\FDOOIRUHLWKHU,GDW,Q/LQNRY
)GWK&LUFHUWGHQLHG6&W              ,QGHPQLW\,QVXUDQFH&RRI1RUWK$PHULFD1(G
   m+RZHYHU ZKHQ WKH DSSHDO IURP D GHQLDO RI        2KLRWKHFRXUWDJDLQLQWHUSUHWLQJWKHSUH+%
VXPPDU\MXGJPHQWLVSUHVHQWHGWRJHWKHUZLWKDQDSSHDOIURP               VWDWXWH PDGH WKHVH UHTXLUHPHQWV HYHQ PRUH VWULQJHQW
DJUDQWRIVXPPDU\MXGJPHQWZHKDYHMXULVGLFWLRQWRUHYLHZ              PDQGDWLQJWKDWLQVXUDQFHFRPSDQLHVLQFOXGHLQWKHZULWWHQ
WKHDSSURSULDWHQHVVRIWKHGLVWULFWFRXUWjVGHQLDOl7KRPDVY
8QLWHG6WDWHV)GWK&LU:HUHYLHZ
DGLVWULFWFRXUWjVGHQLDORIVXPPDU\MXGJPHQWEDVHGSXUHO\RQ
                                                                              
OHJDOJURXQGVGHQRYR,G6XPPDU\MXGJPHQWLVDSSURSULDWH                   7KLV VWDWXWH ZDV ZULWWHQ LQ  DQG KDV EHHQ DPHQGHG UHSHDWHGO\
RQO\ ZKHQ WKHUH LV QR JHQXLQH GLVSXWH DV WR D PDWHULDO         VLQFH ,Q  WKH 2KLR OHJLVODWXUH DPHQGHG WKH VWDWXWH WR HOLPLQDWH WKH
TXHVWLRQRIIDFWDQGRQHSDUW\LVHQWLWOHGWRDMXGJPHQWDVD            UHTXLUHPHQW WKDW LQVXUHUV RIIHU 808,0 FRYHUDJH DOWRJHWKHU 6HH 2    +,2
PDWWHURIODZ)HG5&LY3F                                   5   (9 2'( 11
                                                                              &     $      $  VWDWLQJ WKDW DQ LQVXUHU mPD\ EXW
                                                                         LV QRW UHTXLUHG WR LQFOXGH XQLQVXUHG PRWRULVW FRYHUDJH XQGHULQVXUHG
                                                                         PRWRULVW FRYHUDJH RU ERWK XQLQVXUHG DQG XQGHULQVXUHG PRWRULVW
&8QLQVXUHG8QGHULQVXUHG0RWRULVW&RYHUDJH                             FRYHUDJHVl
                                                                              8QGHU 2KLR ODZ KRZHYHU mWKH VWDWXWRU\ ODZ LQ HIIHFW RQ WKH GDWH RI
   )RUPHU2KLR5HYLVHG&RGHUHTXLUHGLQVXUDQFH                 LVVXH RI HDFK QHZ SROLF\ LV WKH ODZ WR EH DSSOLHGl :ROIH Y :ROIH 
FRPSDQLHVZKHQWKH\RIIHUHGPRWRUYHKLFOHOLDELOLW\SROLFLHV           1(G   2KLR  6LQFH WKH DFFLGHQW RFFXUUHG RQ 6HSWHPEHU

WRRIIHU808,0FRYHUDJHLQDQDPRXQWHTXDOWRWKHOLDELOLW\               WKH SROLF\ WDNLQJ HIIHFW 1RYHPEHU   DQG H[SLULQJ
                                                                         1RYHPEHU   LV WKH RQH UHOHYDQW WR WKLV FDVH 7KLV SROLF\ LV
                                                                         JRYHUQHG E\ WKH VWDWXWH DV LW H[LVWHG RQ 1RYHPEHU   ZKLFK LV DIWHU
                                                                         WKH HQDFWPHQW RI +%  LQ  ZKRVH LPSDFW ZLOO EH GLVFXVVHG ODWHU
1RV                     5REHUWVY8QLYHUVDO                     5REHUWVY8QLYHUVDO                     1RV
                                     8QGHUZULWHUV,QV&R                       8QGHUZULWHUV,QV&R

RIIHU RI 808,0 FRYHUDJH mD EULHI GHVFULSWLRQ RI WKH           RIIHU808,0FRYHUDJHDOWRJHWKHU7KHSURYLVLRQVWDWHGLQ
FRYHUDJH WKH SUHPLXP IRU WKDW FRYHUDJH DQG DQ H[SUHVV         SDUW
VWDWHPHQWRIWKH808,0FRYHUDJHOLPLWVl,GDW7KH
/LQNRFRXUWDOVRPDGHFOHDUWKDWH[WULQVLFHYLGHQFHZDVQRW                 8QOHVV D QDPHG LQVXUHG RU DSSOLFDQW UHTXHVWV VXFK
DGPLVVLEOH WR VKRZ WKDW WKHUH ZDV D YDOLG RIIHU RU D YDOLG       FRYHUDJHV LQ ZULWLQJ VXFK FRYHUDJHV QHHG QRW EH
UHMHFWLRQRI808,0FRYHUDJH,QVWHDGmWKHIRXUFRUQHUVRI                SURYLGHGLQRUPDGHVXSSOHPHQWDOWRDSROLF\UHQHZDORU
WKHLQVXUDQFHDJUHHPHQWFRQWUROLQGHWHUPLQLQJZKHWKHUWKH                  D QHZ RU UHSODFHPHQW SROLF\ WKDW SURYLGHV FRQWLQXLQJ
ZDLYHUZDVNQRZLQJO\DQGH[SUHVVO\PDGH>7@KHLVVXH                 FRYHUDJH WR WKH QDPHG LQVXUHG RU DSSOLFDQW ZKHUH D
RI ZKHWKHU FRYHUDJH ZDV RIIHUHG DQG UHMHFWHG VKRXOG EH              QDPHGLQVXUHGRUDSSOLFDQWKDVUHMHFWHGVXFKFRYHUDJHV
DSSDUHQWIURPWKHFRQWUDFWLWVHOIl,GDW7KHVHUXOHV               LQ FRQQHFWLRQ ZLWK D SROLF\ SUHYLRXVO\ LVVXHG WR WKH
DSSO\ ERWK WR SULPDU\ LQVXUDQFH SROLFLHV DV ZHOO DV WR             QDPHG LQVXUHG RU DSSOLFDQW E\ WKH VDPH LQVXUHU RU
XPEUHOODSROLFLHV*\RUL1(GDWm7KHPDQGDWHV                 DIILOLDWHRIWKDWLQVXUHU
RI5&DSSO\WRSURYLGHUVRIH[FHVVFRYHUDJHDVZHOO
DVSURYLGHUVRISULPDU\OLDELOLW\FRYHUDJHl                          2+,2 5(9 &2'( $11&$VORQJDVWKH
                                                                        LQVXUHG mKDV UHMHFWHG VXFK FRYHUDJHV LQ FRQQHFWLRQ ZLWK D
  ,Q SDUWLDO UHVSRQVH WR*\RUL WKH 2KLR OHJLVODWXUH SDVVHG      SROLF\SUHYLRXVO\LVVXHGlDUHQHZDOSROLF\GLGQRWKDYHWR
+%  LQ   +%  PDGH VHYHUDO FKDQJHV WR           PHHWWKHUHTXLUHPHQWVGHVFULEHGDERYH,G
5HOHYDQWKHUHDUHWKHFKDQJHVLWPDGHWRVHFWLRQ
&RIWKHVWDWXWHZKLFKZDVDPHQGHGWRUHDGLQSDUW                    7KHGLVWULFWFRXUWEDVHGLWVJUDQWRIVXPPDU\MXGJPHQWWR
                                                                        8QLYHUVDORQWZRLQGHSHQGHQWUDWLRQDOHV)LUVWWKHGLVWULFW
  $ QDPHG LQVXUHGjV RU DSSOLFDQWjV ZULWWHQ VLJQHG                FRXUWEHOLHYHGWKDWWKHSROLF\QHJRWLDWLRQVVDWLVILHGWKH
  UHMHFWLRQRIERWKFRYHUDJHVDVRIIHUHGXQGHUGLYLVLRQ$             UHTXLUHPHQWVRIDVLWZDVDPHQGHGE\+%
  RI WKLV VHFWLRQ RU D QDPHG LQVXUHGjV RU DSSOLFDQWjV          $OWHUQDWLYHO\WKHGLVWULFWFRXUWEHOLHYHGWKDWWKHSROLF\ZDVD
  ZULWWHQVLJQHGVHOHFWLRQRIVXFKFRYHUDJHVLQDFFRUGDQFH             UHQHZDOSROLF\ZLWKLQWKHPHDQLQJRI&DQGWKDW
  ZLWK WKH VFKHGXOH RI OLPLWV DSSURYHG E\ WKH                    8QLYHUVDO ZDV WKHUHIRUH H[HPSW IURP KDYLQJ WR RIIHU
  VXSHULQWHQGHQWVKDOOEHHIIHFWLYHRQWKHGD\VLJQHGVKDOO           808,0FRYHUDJHLQWKHILUVWSODFH5REHUWVFKDOOHQJHVERWK
  FUHDWHDSUHVXPSWLRQRIDQRIIHURIFRYHUDJHVFRQVLVWHQW              RIWKRVHGHWHUPLQDWLRQVDQGZHDGGUHVVHDFKLQWXUQ
  ZLWKGLYLVLRQ$RIWKLVVHFWLRQDQGVKDOOEHELQGLQJRQ
  DOORWKHUQDPHGLQVXUHGVLQVXUHGVRUDSSOLFDQWV
2+,2 5(9 &2'( $11&
  $V RI 1RYHPEHU    FRQWDLQHG D VSHFLDO
SURYLVLRQIRUUHQHZDOSROLFLHVH[FHSWLQJWKHPIURPKDYLQJWR                
                                                                              6HFWLRQ  ZDV DPHQGHG LQ  VR WKDW LW QR ORQJHU UHTXLUHV
                                                                        LQVXUDQFH FRPSDQLHV WR RIIHU 808,0 FRYHUDJH DW DOO :LWK WKDW FKDQJH
                                                                        PDGH WKHUH ZDV QR ORQJHU DQ\ QHHG VSHFLILFDOO\ WR H[FHSW UHQHZDO SROLFLHV
                                                                        IURP KDYLQJ WR RIIHU 808,0 FRYHUDJH DQG VR WKH UHQHZDO SURYLVLRQ
                                                                        ZDV GHOHWHG 1HYHUWKHOHVV DV ZDV GLVFXVVHG HDUOLHU WKLV FDVH LV JRYHUQHG
                                                                        E\ WKH ODZ DV LW ZDV DW WKH WLPH RI WKH  SROLF\ ZKHQ WKH UHQHZDO
                                                                        SURYLVLRQ ZDV VWLOO SDUW RI WKH VWDWXWH
1RV                     5REHUWVY8QLYHUVDO                 5REHUWVY8QLYHUVDO                    1RV
                                     8QGHUZULWHUV,QV&R                    8QGHUZULWHUV,QV&R

'7KH2IIHUDQG$FFHSWDQFH                                       2KLR,Q.HPSHUWKH2KLR6XSUHPH&RXUWDQVZHUHG
                                                                        WKHIROORZLQJFHUWLILHGTXHVWLRQVWKHILUVWLQWKHDIILUPDWLYH
  5REHUWVjVILUVWFRQWHQWLRQLVWKDWWKHGLVWULFWFRXUWHUUHGLQ        DQGWKHVHFRQGLQWKHQHJDWLYH
KROGLQJWKDWWKHRIIHUDQGUHMHFWLRQRI808,0FRYHUDJHLQ
WKHSROLF\QHJRWLDWLRQVVDWLVILHG8QLYHUVDOjVREOLJDWLRQV            m$UHWKHUHTXLUHPHQWVRI/LQNRY,QGHPQLW\,QV&R
WRRIIHU808,0FRYHUDJHXQGHU$IWHUFDUHIXO                  >@2KLR6WG>1(G@UHODWLYHWR
DQDO\VLVZHDJUHHZLWK5REHUWV8QLYHUVDOjVRIIHUGLG              DQRIIHURI808,0FRYHUDJHDSSOLFDEOHWRDSROLF\RI
QRW VWDWH WKH SULFH RI WKH SUHPLXP IRU 808,0 FRYHUDJH          LQVXUDQFHZULWWHQDIWHUHQDFWPHQWRI>@+%DQG
8QGHU 2KLR ODZ LW LV FOHDU WKDW WKLV PDNHV WKH RIIHU RI       EHIRUH>@6%"
808,0 FRYHUDJH IDWDOO\ GHIHFWLYH UHVXOWLQJ LQ 808,0
FRYHUDJH DULVLQJ E\ RSHUDWLRQ RI ODZ LQ WKH DPRXQW RI WKH       m,IWKH/LQNRUHTXLUHPHQWVDUHDSSOLFDEOHGRHVXQGHU
SROLF\jVOLPLWV                                                          >@ +%  D VLJQHG UHMHFWLRQ DFW DV DQ HIIHFWLYH
                                                                          GHFOLQDWLRQRI808,0FRYHUDJHZKHUHWKHUHLVQRRWKHU
   8QLYHUVDOGRHVQRWGLVSXWHWKDWLWVRIIHUGLGQRWPHHW            HYLGHQFHRUDORUGRFXPHQWDU\RIDQRIIHURIFRYHUDJH"l
WKH *\RUL DQG /LQNR UHTXLUHPHQWV DQG WKDW LWV RIIHU RI
808,0FRYHUDJHZRXOGQRWKDYHEHHQVXIILFLHQWXQGHUWKH                ,G DW  EUDFNHWV LQ RULJLQDO  7KHVH DQVZHUV PDNH LW
VWDWXWH DV LW H[LVWHG EHIRUH +%   8QLYHUVDO DUJXHV      XQPLVWDNDEO\FOHDUWKDWWKH/LQNRUHTXLUHPHQWVVWLOODSSO\WR
KRZHYHU WKDW +%  KDV GRQH DZD\ ZLWK WKH VWULFW           SROLFLHVDIWHU+%ZHQWLQWRHIIHFW,WLVHTXDOO\FOHDUWKDW
UHTXLUHPHQWVRI/LQNRDQG*\RUL$FFRUGLQJWR8QLYHUVDO               WKH UHMHFWLRQVHOHFWLRQ IRUP RIIHUHG E\ 8QLYHUVDO GRHV QRW
EHFDXVHLWKDVSXWIRUZDUGHYLGHQFHRIDZULWWHQDQGVLJQHG             FRPSRUW ZLWK WKH /LQNR UHTXLUHPHQWV  $OWKRXJK WKH IRUP
VHOHFWLRQRIFRYHUDJH+%FUHDWHVDSUHVXPSWLRQWKDW              FRQWDLQVDZULWWHQGHVFULSWLRQRIWKHFRYHUDJHDQGDQH[SUHVV
8QLYHUVDOKDVFRPSOLHGZLWKLWVREOLJDWLRQVXQGHU            VWDWHPHQWRIWKH808,0OLPLWVLWGRHVQRWLQFOXGHWKHSULFH
                                                                        RIWKHSUHPLXPVIRU808,0FRYHUDJHZKLFKZDVH[SOLFLWO\
  7KH GLVWULFW FRXUW IRXQG 8QLYHUVDOjV ORJLF SHUVXDVLYH          UHTXLUHGE\/LQNR/LQNR1(GDWm:HDJUHHZLWK
%HOLHYLQJWKDW+%HVVHQWLDOO\RYHUUXOHGWKH*\RULDQG             WKHIROORZLQJUHTXLUHGHOHPHQWVIRUZULWWHQRIIHUVLPSRVHGE\
/LQNRGHFLVLRQVWKHGLVWULFWFRXUWKHOGWKDWWKHZULWWHQVLJQHG       2KLRDSSHOODWHFRXUWVDEULHIGHVFULSWLRQRIWKHFRYHUDJHWKH
VHOHFWLRQ RI FRYHUDJH RIIHUHG E\ 8QLYHUVDO VDWLVILHG LWV         SUHPLXPIRUWKDWFRYHUDJHDQGDQH[SUHVVVWDWHPHQWRIWKH
REOLJDWLRQV XQGHU 2KLR ODZ  5REHUWV FRXOG RQO\ GHIHDW          808,0FRYHUDJHOLPLWVlVHHDOVR.HPSHU1(GDW
8QLYHUVDOjVPRWLRQIRUVXPPDU\MXGJPHQWDFFRUGLQJWRWKH                0R\HU &s GLVVHQWLQJ m%\ LWV KROGLQJ WRGD\ WKH
GLVWULFW FRXUW E\ VKRZLQJ WKDW WKH UHMHFWLRQ ZDV HLWKHU QRW   PDMRULW\ UHTXLUHV LQVXUHUV WR µLQIRUP WKH LQVXUHG RI WKH
VLJQHGQRWZULWWHQRUIUDXGXOHQWO\LQGXFHG$VWKHUHZDVQR          DYDLODELOLW\RI808,0FRYHUDJHVHWIRUWKWKHSUHPLXPIRU
VXFKVKRZLQJWKHGLVWULFWFRXUWJUDQWHGVXPPDU\MXGJPHQWWR            808,0 FRYHUDJH LQFOXGH D EULHI GHVFULSWLRQ RI WKH
WKHGHIHQGDQWRQWKHVHJURXQGV5REHUWVDUJXHVKRZHYHU               FRYHUDJHDQGH[SUHVVO\VWDWHWKH808,0FRYHUDJHOLPLWVLQ
WKDWWKH/LQNRUHTXLUHPHQWVVWLOODSSO\DIWHU+%                 LWV RIIHUj HYHQ DIWHU WKH DGRSWLRQ RI +% l FLWDWLRQ
                                                                        RPLWWHG
  :H QHHG QRW VHWWOH WKLV GHEDWH RI VWDWH ODZ RXUVHOYHV
KRZHYHU EHFDXVH WKH 2KLR 6XSUHPH &RXUW UHVROYHG WKLV              8QGHUWKH2KLR6XSUHPH&RXUWjVGHFLVLRQLQ.HPSHUZH
TXHVWLRQVHYHUDOZHHNVDIWHURUDODUJXPHQWLQWKLVFDVH6HH           DUH ERXQG WR FRQFOXGH WKDW 8QLYHUVDOjV RIIHU RI 808,0
.HPSHUY0LFKLJDQ0LOOHUV0XW,QV&R1(G                FRYHUDJH LV GHIHFWLYH  2XU KROGLQJ LV FRQVLVWHQW ZLWK
1RV                         5REHUWVY8QLYHUVDO                       5REHUWVY8QLYHUVDO                          1RV
                                         8QGHUZULWHUV,QV&R                           8QGHUZULWHUV,QV&R

QXPHURXV 2KLR LQWHUPHGLDWH DSSHOODWH FRXUW GHFLVLRQV WKDW                   LVWKHUHIRUHGHIHFWLYHIRUQRWFRQWDLQLQJSUHPLXPLQIRUPDWLRQ
KDYH KHOG RIIHUV LQYDOLG XQGHU .HPSHU VROHO\ IRU QRW                      DQGWKHUHLVQRRWKHUZULWWHQRIIHULQWKHUHFRUGPHQWLRQHGE\
FRQWDLQLQJ SUHPLXP LQIRUPDWLRQ  6HH )ORXUQR\ Y 9DOOH\                    WKHSDUWLHVWKDWOLVWVSUHPLXPLQIRUPDWLRQ$VDUHVXOWZH
)RUJH,QV&R1R$3:/DW                             PXVW FRQFOXGH WKDW WKH  LQVXUDQFH FRQWUDFW EHWZHHQ
2KLR&W$SSoWK'LVW0D\m>7@KHSDUWLHVGR                         0DF,QWLUH &KHYUROHW DQG 8QLYHUVDO ZDV GHIHFWLYH EHFDXVH
QRW GLVSXWH WKDW WKH XQLQVXUHG DQG XQGHULQVXUHG PRWRULVW                   8QLYHUVDOQHYHUYDOLGO\RIIHUHG808,0FRYHUDJHDQGLWZDV
FRYHUDJHRIIHUIRUPFRPSOHWHGE\WKHFLW\RI'HODZDUHGLG                         QHYHUYDOLGO\UHMHFWHGE\0DF,QWLUH&KHYUROHW6HH*\RUL
QRW VWDWH DQ\ SUHPLXP IRU WKH XQLQVXUHG DQG XQGHULQVXUHG                  1(GDW	QQRWLQJWKDWWKHUHPXVWEHDYDOLGRIIHU
PRWRULVW FRYHUDJH  $FFRUGLQJO\ ZH FRQFOXGH WKDW WKH                      EHIRUHWKHUHFDQEHDQH[SUHVVNQRZLQJUHMHFWLRQVHHDOVR
UHMHFWLRQLVLQYDOLGl7D\ORUY8QLYHUVDO8QGHUZULWHUV,QV                    /LQNR1(G DW7KHGLVWULFWFRXUWjVGHFLVLRQWR
&R1R$3:/DW2KLR&W                            JUDQWWKHGHIHQGDQWVXPPDU\MXGJPHQWRQWKLVJURXQGZDV
$SSoWK'LVW0DUsRUGDQY7UDYHOHUV3URS                         WKHUHIRUHHUURU
&DV,QV&R1R&$:/DW
2KLR&W$SSoWK'LVW0DU*ORYHUY6PLWK                         (7KH5HQHZDO([FHSWLRQ
1RV&&:/DW2KLR&W
$SSoVW'LVW0DU7KH808,0VHOHFWLRQIRUP                           8QLYHUVDO KRZHYHU ZRXOG VWLOO EH HQWLWOHG WR VXPPDU\
                                                                                  MXGJPHQWLIWKLVSROLF\ZHUHDYDOLGUHQHZDOSROLF\ZLWKLQWKH
                                                                                  PHDQLQJRI&IRUUHQHZDOSROLFLHVGRQRWQHHGWR
                                                                                 RIIHU808,0FRYHUDJHDWDOO5REHUWVDUJXHVKRZHYHUWKDW
      :H QRWH WKDW WZR 2KLR ORZHU FRXUWV KDYH KHOG RIIHUV RI 808,0
FRYHUDJH YDOLG XQGHU   .HPSHU    HYHQ ZKHQ WKH RIIHUV DGPLWWHGO\ GLG QRW
                                                                                  WKH  SROLF\ LV QRW H[HPSWHG IURP KDYLQJ WR RIIHU
FRQWDLQ WKH QHFHVVDU\ SUHPLXP LQIRUPDWLRQ DSSDUHQWO\ UHTXLUHG E\      /LQNR   
                                                                                  808,0 FRYHUDJH EHFDXVH WKH RULJLQDO  SROLF\ LWVHOI
6HH %RJDQ Y sRKQVRQ      1(G   2KLR &RP 3O             QHYHU YDOLGO\ UHMHFWHG 808,0 FRYHUDJH  :H DJUHH ZLWK
0DQDOR Y /XPEHUPDQjV 0XW &DV &R 1R   :/  DW                5REHUWVWKDWWKHRULJLQDOUHMHFWLRQRI808,0FRYHUDJHZDV
 2KLR &W $SSoG 'LVW )HE   7KHVH FRXUWV KDYH UHOLHG RQ          LQYDOLG DQG WKDW 8QLYHUVDO FDQQRW UHO\ RQ WKDW LQYDOLG
WKH 2KLR 6XSUHPH &RXUWjV QHJDWLYH DQVZHU WR WKH VHFRQG FHUWLILHG
TXHVWLRQ ZKLFK ZDV ZKHWKHU D VLJQHG UHMHFWLRQ ZDV VXIILFLHQW mZKHUH
                                                                                  UHMHFWLRQ WR MXVWLI\ WKH ODWHU  GHIHFWLYH RIIHU DQG
WKHUH LV QR RWKHU HYLGHQFHl RI D YDOLG RIIHU .HPSHU  1(G DW 
                                                                                  DFFHSWDQFH
7KHVH FRXUWV KDYH UHDVRQHG WKDW LI H[WULQVLF HYLGHQFH ZHUH LUUHOHYDQW
WKHUH ZRXOG EH QR UHDVRQ WR QRWH WKDW WKH FDVH DW LVVXH LQYROYHG mQR RWKHU          6HFWLRQ&LQZKHQWKHSROLF\LQWKLVFDVH
HYLGHQFHl 7KH 2KLR 6XSUHPH &RXUWjV KROGLQJ WKDW D VLJQHG UHMHFWLRQ               ZDVLVVXHGVWDWHGWKDW808,0RIIHUVmQHHGQRWEHSURYLGHG
DORQH ZDV LQVXIILFLHQW WR UHMHFW 808,0 FRYHUDJH ZLWKRXW RWKHU HYLGHQFH           LQDSROLF\UHQHZDORUDQHZRUUHSODFHPHQWSROLF\
VXJJHVWHG WR WKHVH WZR FRXUWV WKDW H[WULQVLF HYLGHQFH FRXOG QRZ EH XVHG
WR FRQYHUW DQ LQVXIILFLHQW RIIHU LQWR D VXIILFLHQW RQH
                                                                                  ZKHUH D QDPHG LQVXUHG RU DSSOLFDQW KDV UHMHFWHG VXFK
     :H DUH XQDEOH WR GUDZ WKH LQIHUHQFH IURP WKH RQHZRUG DQVZHU LQ
.HPSHU    WKDW WKHVH WZR FRXUWV KDYH GUDZQ 1RWKLQJ LQ WKH 2KLR 6XSUHPH
&RXUWjV DQVZHU VXJJHVWV WKDW H[WULQVLF HYLGHQFH FDQ EH XVHG WR VXSSRUW D
VLJQHG UHMHFWLRQ 7KH RQO\ EDVLV LQ    .HPSHU   IRU LQIHUULQJ WKDW H[WULQVLF      2KLR 6XSUHPH &RXUW LW ZDV GUDIWHG E\ D IHGHUDO GLVWULFW FRXUW 7KH 2KLR
HYLGHQFH FRXOG EH XVHG FRPHV IURP WKH     TXHVWLRQ     FHUWLILHG WR WKH 2KLR      6XSUHPH &RXUW WKHUHIRUH KDV LQ QR ZD\ XQGHUFXW LWV UXOLQJV WKDW WKH
6XSUHPH &RXUW E\ D IHGHUDO GLVWULFW FRXUW LQ WKH 1RUWKHUQ 'LVWULFW RI 2KLR       SUHPLXP IRU LQVXUDQFH PXVW EH VWDWHG LQ WKH ZULWWHQ RIIHU   VHH /LQNR    
%\ DVNLQJ ZKHWKHU D VLJQHG UHMHFWLRQ DORQH ZLWKRXW H[WULQVLF HYLGHQFH           1(G DW  DQG WKDW WKLV UHTXLUHPHQW VWLOO DSSOLHV DIWHU WKH SDVVDJH RI
VXFK DV RUDO HYLGHQFH FRQVWLWXWHV D YDOLG UHMHFWLRQ WKH TXHVWLRQ GLG WR DQ     +%     VHH .HPSHU     1(G DW    %RXQG E\ WKRVH VWDWHPHQWV
H[WHQW LQWLPDWH WKDW H[WULQVLF HYLGHQFH FRXOG EH XVHG LQ WKH GHWHUPLQDWLRQ       ZH PXVW KROG WKH RIIHU KHUH ZKLFK GLG QRW VWDWH WKH SUHPLXP WR EH IDWDOO\
RI ZKHWKHU D UHMHFWLRQ ZDV YDOLG %XW WKH TXHVWLRQ ZDV QRW GUDIWHG E\ WKH         GHIHFWLYH
1RV                     5REHUWVY8QLYHUVDO                    5REHUWVY8QLYHUVDO                      1RV
                                     8QGHUZULWHUV,QV&R                        8QGHUZULWHUV,QV&R

FRYHUDJHV LQ FRQQHFWLRQ ZLWK D SROLF\ SUHYLRXVO\ LVVXHGl         /DPSKHDUY&RQWjO&DV&R1R:/
2+,2 5(9 &2'( $11  &   7KH                  DW2KLR&W$SSoWK'LVW0D\KROGLQJWKDWD
SROLF\LVDUHQHZDOSROLF\WKDWGDWHVEDFNWRWKHRULJLQDO          RIIHUDOWKRXJKLWZDVDUHQHZDORIIHUZDVLQYDOLGWR
SROLF\  ,Q  WKH WKHQJHQHUDO PDQDJHU RI 0DF,QWLUH          OLPLW808,0FRYHUDJHEHFDXVHWKHHDUOLHURIIHUVGDWLQJEDFN
&KHYUROHW )UDQN 0RQWLVDQR GLVFXVVHG WKH SROLF\ ZLWK              WROLNHWKHRIIHUZHUHGHIHFWLYHIRUQRWJLYLQJWKH
8QLYHUVDOjV WKHQDJHQW )UDQN 6]RFV  $FFRUGLQJ WR WKHLU           SULFHRISUHPLXPVLQZULWLQJ$VDUHVXOWVLQFHWKHUHZDV
GHSRVLWLRQV 6]RFV JDYH 0RQWLVDQR DQ RUDO TXRWDWLRQ DQG           QHYHU D YDOLG RIIHU DQG UHMHFWLRQ RI 808,0 FRYHUDJH LQ
QHYHURIIHUHG808,0FRYHUDJHLQWKHDPRXQWHTXDOWRWKH                  WKH UHQHZDO SURYLVLRQ RI  & LV LQDSSRVLWH
OLDELOLW\ OLPLWV  8QLYHUVDO GRHV QRW GLVSXWH WKH ODFN RI D    KHUH
ZULWWHQ RIIHU DOWKRXJK LW GRHV SRLQW RXW WKDW 6]RFV DQG
0RQWLVDQR GLG H[WHQVLYHO\ GLVFXVV 808,0 FRYHUDJH DQG
FDPHWRDQDJUHHPHQW
  8QLYHUVDOjVRIIHULVSODLQO\LQVXIILFLHQWXQGHU*\RUL
DQG/LQNR6HH*\RUL1(GDWKROGLQJWKDWmLQ
RUGHU IRU D UHMHFWLRQ RI 80 FRYHUDJH WR EH H[SUHVVO\ DQG            
                                                                               7KHUH DUH DGPLWWHGO\ VRPH FDVHV WKDW KDYH KHOG SROLFLHV WR EH
NQRZLQJO\PDGHVXFKUHMHFWLRQPXVWEHLQZULWLQJlDQGWKDW             UHQHZDO SROLFLHV H[HPSW IURP KDYLQJ WR UHRIIHU 808,0 FRYHUDJH XQGHU
mWKHUHFDQEHQRUHMHFWLRQSXUVXDQWWR5&&DEVHQW             & HYHQ WKRXJK WKH\ DOO LQYROYHG LQLWLDOO\ LQHIIHFWLYH UHMHFWLRQV

DZULWWHQRIIHURI80FRYHUDJHl7KHQHJRWLDWLRQVGLG             $00 +DPPHU Y /XPEHUPHQV 0XW &DV &R 1R /  :/
                                                                          DW  2KLR &W $SSoWK 'LVW $XJ   +LOO\HU Y
QRWUHVXOWHLWKHULQDZULWWHQRIIHURI808,0FRYHUDJHRUD             6WDWH )DUP 0XW $XWR ,QV &R  1(G   2KLR &W
ZULWWHQUHMHFWLRQRILW                                                 $SSoG 'LVW  +LOO\HU Y 6WDWH )DUP ,QV &R 1R / 
                                                                         :/  DW  2KLR &W $SSoWK 'LVW 'HF   7KHVH
  %HFDXVH0DF,QWLUH&KHYUROHWjVLQLWLDOUHMHFWLRQRI808,0              FDVHV KRZHYHU DOO KDG D FULWLFDO IHDWXUH WKDW LV QRW SUHVHQW KHUH ,Q HDFK
FRYHUDJHZDVLQYDOLGWKHUHQHZDOSURYLVLRQRI&              RI WKHVH FDVHV WKH LQLWLDO UHMHFWLRQV ZHUH LQHIIHFWLYH EHFDXVH WKH\ ZHUH

GRHV QRW DSSO\ KHUH  7KLV FRQFOXVLRQ DFFRUGV ZLWK WKH          UHFHLYHG DIWHU WKH EHJLQQLQJ RI WKH SROLF\ WHUP 7KHVH LQHIIHFWLYH
                                                                         UHMHFWLRQV KRZHYHU EHFDPH HIIHFWLYH UHMHFWLRQV ZKHQ WKH QH[W SROLF\
GHFLVLRQVRI2KLRLQWHUPHGLDWHFRXUWVZKLFKKDYHKHOGWKDW               WHUP EHJDQ
ZKHUHDQLQLWLDOSROLF\LQYROYHVDQLQYDOLGRIIHURUUHMHFWLRQ                )RU H[DPSOH ZLWK D SROLF\ GDWHG sDQXDU\   WR 'HFHPEHU 
RI808,0FRYHUDJHDODWHUSROLF\FDQQRWEHWUHDWHGDVD                 D UHMHFWLRQ UHWXUQHG RQ )HEUXDU\   ZRXOG EH LQHIIHFWLYH
UHQHZDO SROLF\ H[HPSW IURP KDYLQJ WR RIIHU 808,0                 +RZHYHU WKDW LQHIIHFWLYH UHMHFWLRQ ZRXOG EH HIIHFWLYH IRU WKH QH[W SHULRG

FRYHUDJHEHFDXVHWRGRVRZRXOGFLUFXPYHQWWKHUHTXLUHPHQW              RI sDQXDU\   WR 'HFHPEHU   EHFDXVH LW ZDV UHWXUQHG EHIRUH
                                                                         WKH EHJLQQLQJ RI WKDW SHULRG $ GLVWULFW FRXUW LQ RXU FLUFXLW KDV QRWLFHG
WKDW WKHUH EH DW VRPH WLPH D YDOLG RIIHU DQG UHMHFWLRQ RI   WKLV m(YHQ LI WKDW UHMHFWLRQ IRUP ZDV QRW HIIHFWLYH IRU WKH  SROLF\
808,0FRYHUDJH6HH3XUYLVY&LQFLQQDWL,QV&R1R                 \HDU EHFDXVH LW ZDV QRW UHFHLYHG XQWLO DIWHU WKH HIIHFWLYH GDWH RI WKH
&$:/DW2KLR&W$SSoG                     SROLF\ LW ZDV HIIHFWLYH IRU WKH VXEVHTXHQW SROLF\ \HDU  2QFH
'LVW$SUKROGLQJWKDWDVLJQHGUHMHFWLRQRI            &RQ5DLO >WKH LQVXUHG@ HIIHFWLYHO\ UHMHFWHG 808,0 FRYHUDJH 5HOLDQFH
808,0 FRYHUDJH mZDV LQYDOLG DQG >WKHUHIRUH@ GLG QRW              >WKH LQVXUHU@ ZDV QRW UHTXLUHG WR SURYLGH LW LQ DQ\ VXEVHTXHQW UHQHZDO
                                                                         SROLF\ XQOHVV &RQ5DLO UHTXHVWHG LW LQ ZULWLQJl /DIIHUW\ Y 5HOLDQFH ,QV
REYLDWHWKHQHHGlIRUWKHLQVXUDQFHFRPSDQ\SURSHUO\WRRIIHU            &R  ) 6XSS G   6' 2KLR 
DQGKDYHUHMHFWHG8,0FRYHUDJH LQ HYHQWKRXJKWKH                     7KLV FDVH LQ FRQWUDVW GRHV QRW LQYROYH DQ LQHIIHFWLYH UHMHFWLRQ WKDW
SROLF\ZDVVLPSO\DUHQHZDORIWKHSROLF\UHYjG              EHFDPH HIIHFWLYH IRU D ODWHU SROLF\ SHULRG 8QLYHUVDOjV IDLOXUH WR SXW WKH
RQ RWKHU JURXQGV  1(G   2KLR                RIIHU LQWR ZULWLQJ LV QRW D GHIHFW LQ WKH RIIHU WKDW LV VRPHKRZ FRUUHFWHG
                                                                         VLPSO\ E\ WKH SDVVDJH RI WLPH
1RV                         5REHUWVY8QLYHUVDO                   5REHUWVY8QLYHUVDO                    1RV
                                         8QGHUZULWHUV,QV&R                       8QGHUZULWHUV,QV&R

                        ,,,&21&/86,21                                                          BBBBBBBBBBBBBBBBBBBBB
  $VERWKWKHLQLWLDORIIHUDQGUHMHFWLRQDQGWKH                                          &21&855(1&(
RIIHU DQG UHMHFWLRQ ZHUH ERWK LQYDOLG WR OLPLW 808,0                                     BBBBBBBBBBBBBBBBBBBBB
FRYHUDJHXQGHU2KLRODZZHFRQFOXGHWKDW8QLYHUVDOjVRIIHU
RI808,0FRYHUDJHWR0DF,QWLUH&KHYUROHWZDVLQDGHTXDWH                          $/,&(0%$7&+(/'(5&LUFXLWsXGJHFRQFXUULQJ
DQGWKDW808,0FRYHUDJHWKHUHIRUHDULVHVLQWKHDPRXQWVRI
WKHSROLF\OLPLWVXQGHUWKHSULPDU\DQGXPEUHOODSROLFLHV:H                        m:KHQ,XVHDZRUGl+XPSW\'XPSW\VDLGLQUDWKHU
WKHUHIRUH5(9(56(WKHGLVWULFWFRXUWjVJUDQWRIVXPPDU\                           D VFRUQIXO WRQH mLW PHDQV MXVW ZKDW , FKRRVH LW WR
MXGJPHQWWRWKHGHIHQGDQWDQGZH5(0$1'WKLVFDVHWRWKH                         PHDQnQHLWKHUPRUHQRUOHVVl
GLVWULFW FRXUW IRU IXUWKHU SURFHHGLQJV FRQVLVWHQW ZLWK WKLV                    m7KHTXHVWLRQLVlVDLG$OLFHmZKHWKHU\RXFDQPDNH
RSLQLRQ                                                                         ZRUGVPHDQVRPDQ\GLIIHUHQWWKLQJVl
                                                                                      m7KHTXHVWLRQLVlVDLG+XPSW\'XPSW\mZKLFKLVWR
                                                                                  EHPDVWHUnnWKDWjVDOOl
                                                                                      $OLFHZDVWRRPXFKSX]]OHGWRVD\DQ\WKLQJVRDIWHU
                                                                                  D PLQXWH +XPSW\ 'XPSW\ EHJDQ DJDLQ  m7KH\jYH D
                                                                                  WHPSHUVRPHRIWKHPnSDUWLFXODUO\YHUEVWKH\jUHWKH
                                                                                  SURXGHVWnDGMHFWLYHV\RXFDQGRDQ\WKLQJZLWKEXWQRW
                                                                                  YHUEVnKRZHYHU,FDQPDQDJHWKHZKROHORWRIWKHP
                                                                                  ,PSHQHWUDELOLW\7KDWjVZKDW,VD\l
                                                                                      m:RXOG \RX WHOO PH SOHDVHl VDLG $OLFH mZKDW WKDW
                                                                                  PHDQV"l
                                                                                  
                                                                                /(:,6 &$552// 7+528*+ 7+( /22.,1* */$66 
                                                                                3HQJXLQ%RRNV

                                                                                  :KLOHWKHSODLQODQJXDJHRIWKHLQVXUDQFHFRQWUDFWLQWKLV
      :H QRWH WKDW ZH GR QRW FRQVLGHU KHUH VHYHUDO DUJXPHQWV WKDW               FDVHFOHDUO\LQGLFDWHVWKDW0U5REHUWVZKLOHULGLQJKLVRZQ
8QLYHUVDO FODLPV HQWLWOH LW WR VXPPDU\ MXGJPHQW :H OHDYH XQUHVROYHG
                                                                                PRWRUF\FOHRXWVLGHWKHVFRSHRIHPSOR\PHQWZDVQRWFRYHUHG
8QLYHUVDOjV FRQWHQWLRQ WKDW 5REHUWV ZDV QRW DQ LQVXUHG XQGHU WKH SROLF\
EHFDXVH KH ZDV QRW DFWLQJ LQ WKH VFRSH RI KLV HPSOR\PHQW $OWKRXJK WKLV
                                                                                E\ KLV HPSOR\HUjV LQVXUDQFH DQG D FDUHIXO UHDGLQJ RI
LVVXH ZDV SURSHUO\ UDLVHG EHORZ LW ZDV QHYHU DGGUHVVHG E\ WKH GLVWULFW          &  LQGLFDWHV WKDW 0DF,QW\UH &KHYUROHWjV
FRXUW %XW FI /DZOHU Y )LUHPDQjV )XQG ,QV &R  )G            VLJQHG VHOHFWLRQ RI 808,0 FRYHUDJH LQ  FUHDWHG D
WK &LU  ILQGLQJ D VFRSHRIHPSOR\PHQW OLPLWDWLRQ LQHIIHFWLYH DQG      SUHVXPSWLRQWKDW8QLYHUVDOKDGRIIHUHG808,0FRYHUDJHLQ
VWDWLQJ JHQHUDOO\ WKDW 2KLR ODZ mSUHFOXGH>V@ DQ HPSOR\HU IURP UHO\LQJ RQ        DFFRUGDQFHZLWKWKHUHTXLUHPHQWVRIVXEVHFWLRQ$QHLWKHU
VFRSHRIHPSOR\PHQW OLPLWDWLRQV LQ WKH GHILQLWLRQ RI DQ LQVXUHG ZKHQ
808,0 FRYHUDJH LV IRXQG WR DULVH E\ RSHUDWLRQ RI ODZl :H DOVR OHDYH
                                                                                WKHZRUGVRIDFRQWUDFWQRUWKHZRUGVRIDVWDWXWHPHDQZKDW
WR WKH GLVWULFW FRXUW RQ UHPDQG WKH LVVXH RI ZKHWKHU 8QLYHUVDO LV HQWLWOHG      WKH\ VD\ WKURXJK WKH ORRNLQJ JODVV RI WKH 2KLR 6XSUHPH
WR DQ RIIVHWWLQJ FUHGLW EDVHG RQ WKH DPRXQW DYDLODEOH WR WKH SODLQWLII XQGHU    &RXUW  7KDW FRXUW KDV UHGHILQHG FRQFHSWV VXFK DV
WKH WRUWIHDVRUjV LQVXUDQFH EHFDXVH LW DOVR ZDV QRW DGGUHVVHG E\ WKH GLVWULFW   mLQWHUSUHWDWLRQl DQG ULGGHQ URXJKVKRG RYHU EDVLF OHJDO
FRXUW
1RV                     5REHUWVY8QLYHUVDO         
                                     8QGHUZULWHUV,QV&R

SULQFLSOHV VXFK DV SULYLW\ RI FRQWUDFW DQG ZH DV D IHGHUDO
FRXUWVLWWLQJLQGLYHUVLW\MXULVGLFWLRQDUHERXQGE\LWVKROGLQJV
RQLVVXHVRIVWDWHODZ0\FRQFXUUHQFHLQWKHPDMRULW\jVOXFLG
DQGZHOOFRQVWUXFWHGRSLQLRQLQWKLVMXGLFLDOO\PDQJOHGDUHD
RIODZLVWKHUHIRUHFRPSHOOHG
