       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


 s(520( +(1'(5621               ;
          3HWLWLRQHU$SSHOOHH 
              &URVV$SSHOODQW 
                                     1RV
                                  
           Y                      !
                                  
                                  
 7(55< / &2//,16:DUGHQ        
       5HVSRQGHQW$SSHOODQW 
               &URVV$SSHOOHH 
                                  
                                 1
      $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
     IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW&LQFLQQDWL
    1Rn6$UWKXU6SLHJHO'LVWULFWsXGJH
               $UJXHGsDQXDU\
          'HFLGHGDQG)LOHG$XJXVW
 %HIRUH1255,6%$7&+(/'(5DQG&/$<&LUFXLW
                     sXGJHV
                  BBBBBBBBBBBBBBBBB
                       &2816(/
$5*8('  0DWWKHZ & +HOOPDQ 2)),&( 2) 7+(
$77251(< *(1(5$/ &ROXPEXV 2KLR IRU $SSHOODQW
+DUU\ 5 5HLQKDUW &ROXPEXV 2KLR IRU $SSHOOHH
21%5,()sRQDWKDQ5)XONHUVRQ6WXDUW$&ROH2)),&(

                            
     +HQGHUVRQY&ROOLQV                    1RV

2) 7+( $77251(< *(1(5$/ &255(&7,216
/,7,*$7,21 6(&7,21 &ROXPEXV 2KLR IRU $SSHOODQW
+DUU\55HLQKDUW'DYLG&6WHEELQV&ROXPEXV2KLRIRU
$SSHOOHH
   1255,6sGHOLYHUHGWKHRSLQLRQRIWKHFRXUWLQZKLFK
%$7&+(/'(5sMRLQHG&/$<sSSGHOLYHUHG
DVHSDUDWHGLVVHQWLQJRSLQLRQ
                      BBBBBBBBBBBBBBBBB
                          23,1,21
                      BBBBBBBBBBBBBBBBB
  $/$1(1255,6&LUFXLWsXGJH,QWKLVFDSLWDOFDVHWKH
6WDWH RI 2KLR UHSUHVHQWLQJ :DUGHQ 7HUU\ &ROOLQV DSSHDOV
IURP DQ RUGHU RI WKH GLVWULFW FRXUW FRQGLWLRQDOO\ JUDQWLQJ
sHURPH+HQGHUVRQjVSHWLWLRQIRUDZULWRIKDEHDVFRUSXVDVWR
KLV GHDWK VHQWHQFH  6HH  86&    )RU KLV SDUW
SHWLWLRQHU FURVVDSSHDOV IURP WKH GHQLDO RI WKH ZULW ZLWK
UHVSHFWWRKLVJXLOW
  $IWHUFDUHIXOUHYLHZRIWKHPDQ\LVVXHVUDLVHGE\SHWLWLRQHU
LQ KLV FURVVDSSHDO ZH FRQFOXGH WKDW WKH GLVWULFW FRXUW
SURSHUO\GHQLHGUHOLHI$FFRUGLQJO\ZHDIILUPWKHRUGHURI
WKH GLVWULFW FRXUW DV WR WKH LVVXHV UDLVHG RQ FURVVDSSHDO
+HQGHUVRQY&ROOLQV)6XSSG6'2KLR
%HFDXVH WKH RUGHU RI WKH GLVWULFW FRXUW ZDV SDUWLFXODUO\
WKRURXJKDQGZHOOUHDVRQHGDQ\RSLQLRQWKDWZHPLJKWLVVXH
FRQFHUQLQJWKHLVVXHVUDLVHGE\SHWLWLRQHULQKLVFURVVDSSHDO
ZRXOGEHGXSOLFDWLYHDQGVHUYHQRXVHIXOSXUSRVH
  $W WKH VDPH WLPH ZH PXVW UHYHUVH WKH GLVWULFW FRXUWjV
FRQGLWLRQDO JUDQW RI WKH ZULW ZLWK UHVSHFW WR SHWLWLRQHUjV
VHQWHQFH
                                 ,
  7KH IDFWV WKDW JDYH ULVH WR SHWLWLRQHUjV SURVHFXWLRQ KDYH
EHHQVXPPDUL]HGE\WKH2KLR6XSUHPH&RXUWDQGQHHGQRWEH
   +HQGHUVRQY&ROOLQV                  1RV       1RV                      +HQGHUVRQY&ROOLQV           

,,,&RQFOXVLRQ                                                   UHSHDWHGKHUH6HH6WDWHY+HQGHUVRQ2KLR6WG
                                                                   1(G
  ,ZRXOGDIILUPWKHGLVWULFWFRXUWjVRUGHUJUDQWLQJWKHZULWRI
KDEHDVFRUSXVLQ&DVH1R,QDFFRUGDQFHZLWKWKLV          7KH RQO\ LVVXH RQ ZKLFK WKH GLVWULFW FRXUW JUDQWHG UHOLHI
RSLQLRQ,ZRXOGDOVRUHYHUVHWKHGLVWULFWFRXUWjVRUGHUGHQ\LQJ   FRQFHUQVDQ$OOHQFKDUJHJLYHQWRWKHMXU\E\WKHWULDOFRXUW
WKHZULWLQ&DVH1R                                      DIWHULWUHSRUWHGDGHDGORFN7KHMXU\EHJDQLWVGHOLEHUDWLRQLQ
                                                                   WKHSHQDOW\SKDVHRIWKHWULDODWSPRQ:HGQHVGD\
  )RUWKHUHDVRQVVHWIRUWKDERYH,UHVSHFWIXOO\GLVVHQW         sXO\$WSPWKHQH[WGD\WKHMXU\VHQWWKH
                                                                   IROORZLQJPHVVDJHWRWKHFRXUWm:HDUHGHDGORFNHGSHULRGl
                                                                   ,QUHVSRQVHWKHFRXUWLQVWUXFWHGWKHMXU\LQWKHVHWHUPV
                                                                       <RX DOO NQRZ WKDW IRU WKH SXUSRVH RI UHWXUQLQJ D
                                                                     YHUGLFWDWWKLVWLPHDOOWZHOYHRI\RXPXVWDJUHH$QG
                                                                     \RXKDYHDGXW\WRDJUHHLILWLVDWDOOSRVVLEOH
                                                                       1RZZKHQ\RXWDONWRHDFKRWKHULQWKDWMXU\URRP
                                                                     REYLRXVO\HDFKRQHRI\RXVKRXOGSD\WKHSURSHUUHVSHFW
                                                                     WR WKH RWKHU SHUVRQjV RSLQLRQ  $QG LI \RX GR KDYH
                                                                     GLIIHUHQFHV\RXVKRXOGH[DPLQHWKRVHGLIIHUHQFHVLQWKH
                                                                     VSLULWRIKRQHVW\DQGIDLUQHVV
                                                                       ,jPQRWVXJJHVWLQJE\DQ\VWUHWFKRIWKHLPDJLQDWLRQ
                                                                     WKDW DQ\ RQH RI \RX VKRXOG JLYH XS D ZHOOJURXQGHG
                                                                     RSLQLRQRUWRYLRODWH\RXURDWK%XWLWGRHVPHDQWKDW
                                                                     MXURUV VKRXOG QRW UHIXVH WR DJUHH EHFDXVH RI PHUH
                                                                     VWXEERUQQHVV
                                                                       (DFKRQHRI\RXVKRXOGH[DPLQHWKHIDFWVIURP\RXU
                                                                     RZQ YLHZSRLQW DQG IURP WKH YLHZSRLQW RI WKH RWKHU
                                                                     MXURUV
                                                                        1RZWKHYHUGLFWRIWKHMXU\REYLRXVO\VKRXOGUHSUHVHQW
                                                                     WKHRSLQLRQRIHDFKRI\RX%XWWKLVGRHVQjWPHDQWKDW
                                                                     \RX FDQjW FKDQJH \RXU RSLQLRQV FKDQJLQJ WKHP E\
                                                                     WDONLQJ WR HDFK RWKHU EHFDXVH WKH YHU\ REMHFW RI WKLV


                                                                       
                                                                        6HH $OOHQ Y 8QLWHG 6WDWHV  86    DSSURYLQJ
                                                                   VXSSOHPHQWDO LQVWUXFWLRQV WR D GHDGORFNHG MXU\ XQGHU FHUWDLQ
                                                                   FLUFXPVWDQFHV $Q $OOHQ FKDUJH LV VRPHWLPHV UHIHUUHG WR DV D mG\QDPLWHl
                                                                   FKDUJH
      +HQGHUVRQY&ROOLQV                   1RV      1RV                     +HQGHUVRQY&ROOLQV        

    ZKROHV\VWHPLVWRUHDFKDQDJUHHPHQWE\HDFKRQHRI                3HWLWLRQHUIDLOHGWREULQJWKLVFODLPRQGLUHFWDSSHDO,WZDV
    \RXFRPSDULQJ\RXUGLIIHUHQWYLHZV                              ILUVWUDLVHGLQKLVVWDWHSRVWFRQYLFWLRQSHWLWLRQDVKLVWHQWK
                                                                     FDXVHRIDFWLRQ7KHFRXUWGLVPLVVHGWKHFODLPKROGLQJWKDW
      6R,GRQjWWKLQN\RXjUHGHDGORFNHG<RXJREDFNWKHUH         LWZDVEDUUHGE\WKHGRFWULQHRIUHVMXGLFDWD5HVMXGLFDWDKDV
    DQGWDONLWRYHU                                          EHHQHVWDEOLVKHGDVDQDGHTXDWHDQGLQGHSHQGHQWVWDWHJURXQG
                                                                     XSRQ ZKLFK WR GHQ\ UHYLHZ RI D FRQVWLWXWLRQDO FODLP
'HIHQVHFRXQVHOORGJHGQRREMHFWLRQWRWKLVLQVWUXFWLRQ7KH        6H\PRXU Y :DONHU  )G   WK &LU 
MXU\UHVXPHGGHOLEHUDWLRQVDQGUHWXUQHGDVHQWHQFHRIGHDWK          KROGLQJ WKDW GRFWULQH RI UHV MXGLFDWD 2KLR UXOH ZKLFK
VRPHIRXUKRXUVODWHU                                               SURKLELWVFODLPVWKDWFRXOGKDYHEHHQEURXJKWRQGLUHFWDSSHDO
                                                                     IURPEHLQJUDLVHGLQSRVWFRQYLFWLRQSHWLWLRQZDVDGHTXDWH
  ,QKLVGLUHFWDSSHDOSHWLWLRQHUGHVLJQDWHGWKLVLQVWUXFWLRQDV    DQGLQGHSHQGHQWVWDWHJURXQGWRGHQ\IHGHUDOKDEHDVUHYLHZ
DQDVVLJQPHQWRIHUURU7KH2KLR6XSUHPH&RXUWUHMHFWHGKLV         +RZHYHUDVGLVFXVVHGDERYH3HWLWLRQHUjVFRXQVHOjVIDLOXUHWR
DUJXPHQWLQWKHIROORZLQJWHUPV                                     UDLVH WKLV FODLP LQ KLV GLUHFW DSSHDO FRQVWLWXWHV LQHIIHFWLYH
                                                                     DVVLVWDQFHRIFRXQVHOZKLFKLVVXIILFLHQWWRGHPRQVWUDWHWKH
      ,QKLVQLQWKSURSRVLWLRQRIODZDSSHOODQWDUJXHVWKDW         FDXVHDQGSUHMXGLFHQHFHVVDU\WRRYHUFRPHWKHSURFHGXUDOEDU
    WKHWULDOFRXUWHUUHGLQJLYLQJDVXSSOHPHQWDOLQVWUXFWLRQ       6HH :DVKLQJWRQ Y +RIEDXHU  )G   WK &LU
    RUGHULQJWKHMXU\WRFRQWLQXHLWVGHOLEHUDWLRQVFRQFHUQLQJ       UHFRJQL]LQJWKDWLQHIIHFWLYHDVVLVWDQFHRIFRXQVHOFDQ
    WKHVHQWHQFHDIWHUWKHMXU\UHSRUWHGWRWKHFRXUWWKDWLWZDV    HVWDEOLVK FDXVH DQG SUHMXGLFH QHFHVVDU\ WR RYHUFRPH
    GHDGORFNHG$SSHOODQWVWDWHVWKDWZKHQFRQIURQWHGE\D          SURFHGXUDO EDU  0RUHRYHU LW ZRXOG EH D PLVFDUULDJH RI
    GHDGORFNHG MXU\ WKH FRXUW VKRXOG LQVWUXFW WKH MXU\ WR    MXVWLFHWRHQIRUFHWKHSURFHGXUDOGHIDXOWLQWKHLQVWDQWFDVH
    GHWHUPLQHZKLFKOLIHVHQWHQFHWRUHFRPPHQGUDWKHUWKDQ          LQDVPXFKDV3HWLWLRQHULQIDFWDWWHPSWHGWRUDLVHWKHFODLPRQ
    JLYLQJ WKH MXU\ D VXSSOHPHQWDO FKDUJH WR FRQWLQXH         GLUHFWDSSHDOLQDSURVHEULHIRQO\WRKDYHLWUHMHFWHGE\WKH
    GHOLEHUDWLQJLQWKHKRSHWKDWXQDQLPLW\ZLOOEHDFKLHYHG        FRXUW6HH:DLQZULJKWY6\NHV86
      :HDJUHHZLWKWKHFRXUWRIDSSHDOVWKDWWKHWULDOFRXUWjV        :KLOH 3HWLWLRQHU LV QRW HQWLWOHG WR K\EULG
    FKDUJH FRQIRUPV ZLWK WKH W\SH DSSURYHG LQ 6WDWH Y       UHSUHVHQWDWLRQLWZRXOGEHIXQGDPHQWDOO\XQMXVWWRIRUHFORVH
    0DXSLQ2KLR6WG22G             KLVFODLPRQKDEHDVUHYLHZZKHQLQVSLWHRIKLVFRXQVHOjV
    1(GSDUDJUDSKVWKUHHDQGIRXURIWKHV\OODEXV           GHILFLHQF\3HWLWLRQHUKLPVHOIDWWHPSWHGWRSUHVHUYHKLVFODLP
    DQG sHQNLQV > 2KLR 6W G   1(G            $VWRWKHPHULWVRI3HWLWLRQHUjVDFTXLWWDOILUVWLQVWUXFWLRQ
    @ DQG ZDV QRW LQ HUURU 0RUHRYHU WKH 8QLWHG      FODLPDVGLVFXVVHGDERYHVHHGLVFXVVLRQVXSUD3DUW,$,
    6WDWHV6XSUHPH&RXUWUXOHGWKDWDVLPLODUVXSSOHPHQWDO           EHOLHYH WKDW WKH WULDO FRXUW LQ IDFW HUUHG LQ JLYLQJ WKH
    FKDUJHGLGQRWLPSHUPLVVLEO\FRHUFHWKHMXU\WRUHWXUQD         LQVWUXFWLRQZKLFKYLRODWHG2KLRODZ0RUHRYHUWKHWULDOjV
    GHDWKVHQWHQFHLQ/RZHQILHOGVXSUDDW6&WDW       FRXUWHUURUVRXQGHUPLQHGWKHUHOLDELOLW\RIWKHMXU\YHUGLFWRQ
    /(GGDW                                  WKHGHDWKVHQWHQFHWKDW3HWLWLRQHUZDVGHQLHGDIXQGDPHQWDOO\
6WDWHY+HQGHUVRQ2KLR6WGDW1(GDW           IDLUWULDODQGKLVGHDWKVHQWHQFHVKRXOGQRWEHSHUPLWWHGWR
IRRWQRWHRPLWWHG                                         VWDQG6HH%URRNV1(GDW$FFRUGLQJO\WKH
                                                                     GLVWULFWFRXUWDOVRHUUHGLQGHQ\LQJWKHZULWRQWKLVJURXQG
  $V WKH 2KLR 6XSUHPH &RXUW UHFRJQL]HG /RZHQILHOG Y
3KHOSV86FRQVLGHUHGWKHFRQVWLWXWLRQDOLW\
RI DQ $OOHQ FKDUJH JLYHQ GXULQJ MXU\ GHOLEHUDWLRQV LQ WKH
    +HQGHUVRQY&ROOLQV                    1RV         1RV                     +HQGHUVRQY&ROOLQV         

ZDLYHDQ\FODLPWKDWKHGLGQRWEULQJRQGLUHFWDSSHDORIKLV           SHQDOW\SKDVHRIDFDSLWDOFDVH7KH6WDWHWDNHVWKHSRVLWLRQ
GHDWKSHQDOW\FDVHHYHQDVDWDFWLFRUVWUDWHJ\IDLOXUHWRUDLVH      WKDW /RZHQILHOG FDQQRW EH GLVWLQJXLVKHG IURP WKH FDVHVXE
DPHULWRULRXVFODLPWKDWLVNQRZQWRFRXQVHOLVREMHFWLYHO\             MXGLFHDQGWKHUHIRUHGLFWDWHVRXURXWFRPH
XQSURIHVVLRQDO FRQGXFW WKDW IDOOV EHORZ WKH OHYHO UHTXLUHG
XQGHUWKH6L[WK$PHQGPHQW6HH8QLWHG6WDWHVY%DLUG               ,Q/RZHQILHOGGXULQJWKHVHFRQGGD\RIGHOLEHUDWLRQVWKH
)GG&LUsRQHVY*LEVRQ)G            MXU\LQGLFDWHGWRWKHWULDOMXGJHWKDWLWmZDVXQDEOHWRUHDFKD
WK&LU                                                   GHFLVLRQ DW WKDW WLPH DQG UHTXHVW>HG@ WKDW WKH FRXUW DJDLQ
                                                                        DGYLVHWKHMXU\DVWRLWVUHVSRQVLELOLWLHVl,GDW7KHWULDO
  3HWLWLRQHUKDVDOVRGHPRQVWUDWHGWKDWKHZDVSUHMXGLFHGE\            MXGJHUHVSRQGHGE\DVNLQJWKHLQGLYLGXDOMXURUVWRUHVSRQGLQ
KLV FRXQVHOjV GHILFLHQW FRQGXFW  7R VKRZ WKDW KH ZDV          ZULWLQJWRWKHTXHVWLRQZKHWKHUmIXUWKHUGHOLEHUDWLRQVZRXOG
SUHMXGLFHG3HWLWLRQHUPXVWVKRZWRDUHDVRQDEOHSUREDELOLW\            EHKHOSIXOLQREWDLQLQJDYHUGLFWl,G(LJKWRIWKHWZHOYH
WKDWEXWIRUKLVFRXQVHOjVGHILFLHQWSHUIRUPDQFHWKHRXWFRPH           UHVSRQGHGDIILUPDWLYHO\$IWHUDGHIHQVHPRWLRQIRUDPLVWULDO
RIWKHDSSHOODWHSURFHHGLQJVZRXOGKDYHEHHQGLIIHUHQW,Q             ZDV RYHUUXOHG WKH MXU\ UHFRQYHQHG LQ WKH FRXUWURRP IRU
/XFDVY2j'HD)GWK&LUWKLV&RXUW           IXUWKHU LQVWUXFWLRQV DW ZKLFK WLPH D QRWH ZDV JLYHQ WR WKH
DFNQRZOHGJHGWKDWmFRXQVHOjVIDLOXUHWRUDLVHDQLVVXHZKRVH            MXGJHVWDWLQJWKDWVRPHRIWKHMXURUVKDGPLVXQGHUVWRRGKLV
UHVROXWLRQLVFOHDUO\IRUHVKDGRZHGE\H[LVWLQJGHFLVLRQVlPD\           RULJLQDOTXHVWLRQ7KLVWLPHWKHMXGJHDVNHGHDFKMXURUm'R
FRQVWLWXWHLQHIIHFWLYHDVVLVWDQFHRIFRXQVHO$FFRUG*RYjWRI          \RX IHHO WKDW DQ\ IXUWKHU GHOLEHUDWLRQV ZLOO HQDEOH \RX WR
WKH9LUJLQ,VODQGVY)RUWH)GG&LU          DUULYHDWDYHUGLFW"l,G7KLVWLPHHOHYHQMXURUVUHVSRQGHG
KROGLQJ WKDW HYHQ WKRXJK %DWVRQ KDG QRW EHHQ GHFLGHG          DIILUPDWLYHO\$WWKLVSRLQWWKHWULDOMXGJHJDYHWKHMXU\DQ
FRXQVHOjV IDLOXUH WR REMHFW WR LPSURSHU XVH RI SHUHPSWRU\       $OOHQFKDUJH'HIHQVHFRXQVHOIDLOHGWRREMHFWWRHLWKHUWKH
FKDOOHQJHV ZDV XQUHDVRQDEOH  +HUH%URRNV KDG QRW EHHQ         SROOVRIWKHMXU\RUWRWKHVXSSOHPHQWDOLQVWUXFWLRQ7KLUW\
GHFLGHG ZKHQ 3HWLWLRQHU ILOHG KLV GLUHFW DSSHDO                  PLQXWHV DIWHU UHVXPLQJ GHOLEHUDWLRQV WKH MXU\ UHWXUQHG D
1RWZLWKVWDQGLQJWKLV&RXUWIRXQGLQ0DSHVDQGWKH2KLR                VHQWHQFHRIGHDWK6HHLGDW
6XSUHPH&RXUWLQ%URRNVWKDW2KLR5HY&RGH
' FOHDUO\ VWDWHG WKH ODZ %URRNV RQO\ FODULILHG LW  $      ,Q/RZHQILHOGWKH&RXUWEHJDQLWVVXEVWDQWLYHGLVFXVVLRQE\
UHDGLQJRI2KLR5HY&RGH'DQGWKH%URRNV                REVHUYLQJ WKDW DQ $OOHQ FKDUJH PXVW EH UHYLHZHG mµLQ LWV
GHFLVLRQ FOHDUO\ LQGLFDWH WKDW WKHUH ZDV D UHDVRQDEOH            FRQWH[WDQGXQGHUDOOWKHFLUFXPVWDQFHVjl,GDWTXRWLQJ
SUREDELOLW\WKDWEXWIRU3HWLWLRQHUjVFRXQVHOjVIDLOXUHWRUDLVH       sHQNLQVY8QLWHG6WDWHV86DFFRUG
WKHDFTXLWWDOILUVWLQVWUXFWLRQFODLPWKHRXWFRPHRIKLVGLUHFW        8QLWHG6WDWHVY5HHG)GWK&LU$V
DSSHDOZRXOGKDYHEHHQGLIIHUHQW3HWLWLRQHUZDVWKHUHIRUH             /RZHQILHOG DQG FDVHV IURP WKLV FLUFXLW VXJJHVW VHH HJ
SUHMXGLFHGE\KLVFRXQVHOjVGHILFLHQWFRQGXFWDQGZDVGHQLHG            :LOOLDPV Y 3DUNH  )G  WK &LU  WKH GXH
FRQVWLWXWLRQDOO\HIIHFWLYHDVVLVWDQFHRIDSSHOODWHFRXQVHO7KH        SURFHVVLQTXLU\DVVRFLDWHGZLWKDQ$OOHQFKDUJHIRFXVHVRQWKH
GLVWULFWFRXUWHUUHGLQGHQ\LQJWKHZULWRIKDEHDVFRUSXVRQ            FLUFXPVWDQFHV WKDW WULJJHUHG WKH FKDUJH DV ZHOO DV WKH
WKLVJURXQG                                                            ODQJXDJHRIWKHFKDUJHLWVHOI)RUH[DPSOHLQ/RZHQILHOGWKH
                                                                        &RXUWFRQVLGHUHGWKHFRQWHQWVRIWKHQRWHIURPWKHMXU\WKH
                                 %                                     PDQQHULQZKLFKWKHWULDOMXGJHSROOHGLWVPHPEHUVDQGWKH
                                                                        OHQJWK RI GHOLEHUDWLRQV WKDW IROORZHG WKH $OOHQ FKDUJH  ,Q
  6LPLODUO\ WKH GLVWULFW FRXUW HUUHG LQ GHQ\LQJ WKH ZULW RI   :LOOLDPVZHFRQVLGHUHGVLPLODULVVXHVLQFOXGLQJZKHWKHUWKH
KDEHDV FRUSXV RQ 3HWLWLRQHUjV HLJKWK JURXQG IRU UHOLHI WKH     FKDUJHDVJLYHQLPSHUPLVVLEO\FRHUFHGPLQRULW\MXURUV,GDW
DFTXLWWDOILUVWLQVWUXFWLRQLWVHOI                                   1RZKHUHKRZHYHUKDVWKH6XSUHPH&RXUWRUWKLVFRXUW
        +HQGHUVRQY&ROOLQV                    1RV          1RV                     +HQGHUVRQY&ROOLQV        

H[WHQGHGWKHLQTXLU\DVEURDGO\DVWKHGLVVHQWZRXOGZKLOH                 SUHMXGLFH ZLWK UHVSHFW WR KLV FRXQVHOjV IDLOXUH WR UDLVH KLV
WKH FDVHV FLWHG E\ WKH GLVVHQW VXSSRUW WKH XQUHPDUNDEOH             DFTXLWWDOILUVWLQVWUXFWLRQFODLPRQGLUHFWDSSHDO
SURSRVLWLRQ WKDW DQ $OOHQ FKDUJH OLNH DQ\ RWKHU MXU\
LQVWUXFWLRQFDQQRWEHYLHZHGLQDUWLILFLDOLVRODWLRQWKH\GR                7KH &RXUW LQ :KLWH QRWHG WKDW RQH RI FRXQVHOjV PRVW
QRW VXSSRUW WKH SRVLWLRQ WKDW UHYLHZ RI WKH $OOHQ FKDUJH           RYHUDUFKLQJ GXWLHV LV WR FRQVXOW ZLWK WKH GHIHQGDQW RQ
VZHHSV DOO SUHOLPLQDU\ LQVWUXFWLRQV n HYHQ WKRVH JLYHQ               LPSRUWDQWGHFLVLRQV,GDW([DPLQDWLRQVLQWRZKHWKHU
ZLWKRXWREMHFWLRQnLQWRWKHLQTXLU\                                       WKHFRXQVHOPHWKLVREOLJDWLRQVDOWKRXJKQRWGHWHUPLQDWLYH
                                                                            SURYLGHVLQVLJKWLQWRZKHWKHUWKHFRXQVHOjVSHUIRUPDQFHZDV
  $IWHUQRWLQJWKHFRQWH[WLQZKLFKDQ$OOHQFKDUJHPXVWEH                 REMHFWLYHO\UHDVRQDEOH
UHYLHZHG WKH &RXUW LQ /RZHQILHOG TXRWHG WKH IROORZLQJ
SDVVDJHIURP$OOHQFKDUJHLWVHOI                                             $OWKRXJKWKH6WULFNODQG&RXUWZDUQHGWKDWFRXQVHOjVWULDO
                                                                              WDFWLFV VKRXOG QRW EH VXEMHFW WR mVHFRQGJXHVVLQJl E\
    7KHYHU\REMHFWRIWKHMXU\V\VWHPLVWRVHFXUHXQDQLPLW\                 UHYLHZLQJ FRXUWV mHYHQ GHOLEHUDWH WULDO WDFWLFV PD\
    E\DFRPSDULVRQRIYLHZVDQGE\DUJXPHQWVDPRQJWKH                      FRQVWLWXWH LQHIIHFWLYH DVVLVWDQFH RI FRXQVHO LI WKH\ IDOO
    MXURUV WKHPVHOYHV  ,W FHUWDLQO\ FDQQRW EH WKH ODZ WKDW          RXWVLGH WKH ZLGH UDQJH RI SURIHVVLRQDOO\ FRPSHWHQW
    HDFK MXURU VKRXOG QRW OLVWHQ ZLWK GHIHUHQFH WR WKH                DVVLVWDQFHl  $V WKLV &RXUW KDV UHFRJQL]HG WKH mODEHO
    DUJXPHQWVDQGZLWKDGLVWUXVWRIKLVRZQMXGJPHQWLIKH                  µVWUDWHJ\jLVQRWDEODQNHWMXVWLILFDWLRQIRUFRQGXFWZKLFK
    ILQGVDODUJHPDMRULW\RIWKHMXU\WDNLQJDGLIIHUHQWYLHZ                RWKHUZLVHDPRXQWVWRLQHIIHFWLYHDVVLVWDQFHRIFRXQVHOl
    RIWKHFDVHIURPZKDWKHGRHVKLPVHOI,WFDQQRWEHWKDW
    HDFK MXURU VKRXOG JR WR WKH MXU\ URRP ZLWK D EOLQG            ,GDWLQWHUQDOTXRWDWLRQVDQGFLWDWLRQVRPLWWHG
    GHWHUPLQDWLRQWKDWWKHYHUGLFWVKDOOUHSUHVHQWKLVRSLQLRQ
    RIWKHFDVHDWWKDWPRPHQWRUWKDWKHVKRXOGFORVHKLV                  ,Q0DUWLQY5RVH)GWK&LU
    HDUVWRWKHDUJXPHQWVRIPHQZKRDUHHTXDOO\KRQHVWDQG                 ZKHUHLWZDVFRQFHGHGWKDWGHIHQVHFRXQVHOjVDFWLRQVZHUH
    LQWHOOLJHQWDVKLPVHOI                                                 SDUWRIWULDOVWUDWHJ\WKLV&RXUWKHOGWKDWWKHFRXQVHOjVDFWLRQV
                                                                            QHYHUWKHOHVVUHVXOWHGLQLQHIIHFWLYHDVVLVWDQFHRIFRXQVHO7KH
/RZHQILHOG  86 DW  TXRWLQJ $OOHQ  86 DW            &RXUWQRWHGWKDWm>G@HIHQVHVWUDWHJ\DQGWDFWLFVZKLFKODZ\HUV
$OWKRXJKWKHSHWLWLRQHUFRQWHQGHGWKDWDQ$OOHQ                  RIRUGLQDU\WUDLQLQJDQGVNLOOLQWKHFULPLQDOODZZRXOGQRW
FKDUJHSUHVHQWHGDSDUWLFXODUGDQJHURIFRHUFLRQLQKLVFDVH                FRQVLGHUFRPSHWHQWGHQ\DFULPLQDOGHIHQGDQWWKHHIIHFWLYH
EHFDXVHWKH/RXLVLDQDVWDWXWHDWLVVXHFDOOHGIRUWKHLPSRVLWLRQ            DVVLVWDQFHRIFRXQVHOLIVRPHRWKHUDFWLRQZRXOGKDYHEHWWHU
RI D OLIH VHQWHQFH LQ WKH HYHQW RI D KXQJ MXU\ WKH &RXUW      SURWHFWHGDGHIHQGDQWDQGZDVUHDVRQDEO\IRUHVHHDEOHDVVXFK
UHMHFWHGWKDWFRQWHQWLRQ                                                   EHIRUH >WKH DSSHDO@l  ,G FLWDWLRQ DQG LQWHUQDO TXRWDWLRQV
                                                                            RPLWWHG
    7KHGLIIHUHQFHEHWZHHQWKHGLYLVLRQRIIXQFWLRQEHWZHHQ
    WKHMXU\DQGMXGJHLQWKLVFDVHDQGWKHGLYLVLRQLQ$OOHQ                  +HUH3HWLWLRQHULQIRUPHGKLVFRXQVHORIKLVGHVLUHWRDVVHUW
                                                                            VHYHUDODGGLWLRQDOFODLPVZKLFKKDGPHULWLQKLVGLUHFWDSSHDO
                                                                            IURPKLVFRQYLFWLRQDQGVHQWHQFHRIGHDWK3DUWLFXODUO\WKH
                                                                           DFTXLWWDOILUVWLQVWUXFWLRQFODLPLVPHULWRULRXVDVGHPRQVWUDWHG
      m7KH FRXUW VKDOO VHQWHQFH WKH GHIHQGDQW LQ DFFRUGDQFH ZLWK WKH        E\WKH2KLR6XSUHPH&RXUWjVGHFLVLRQLQ%URRNV1(G
UHFRPPHQGDWLRQ RI WKH MXU\ ,I WKH MXU\ LV XQDEOH WR XQDQLPRXVO\ DJUHH RQ
                                                                            DW%URRNVKHOGWKDW'RQLWVIDFHSURKLELWV
D UHFRPPHQGDWLRQ WKH FRXUW VKDOO LPSRVH D VHQWHQFH RI OLIH LPSULVRQPHQW
ZLWKRXW EHQHILW RI SUREDWLRQ SDUROH RU VXVSHQVLRQ RI VHQWHQFHl /D &RGH
                                                                            VXFK DQ DFTXLWWDOILUVW LQVWUXFWLRQ ,G VHH DOVR GLVFXVVLRQ
&ULP 3URF $QQ $UW                                           VXSUD 3DUW ,$  *LYHQ WKH SRWHQWLDO WKDW 3HWLWLRQHU FRXOG
       +HQGHUVRQY&ROOLQV                     1RV           1RV                     +HQGHUVRQY&ROOLQV             

ZDVQRWILUPO\HVWDEOLVKHGDQGUHJXODUO\DSSOLHGDWWKHWLPHRI                 REYLRXVO\ZHLJKVLQWKHFRQVWLWXWLRQDOFDOFXOXVEXWZH
3HWLWLRQHUjV GLUHFW DSSHDO  6HH 5RJHUV  )G DW               GR QRW ILQG LW GLVSRVLWLYH  7KH 6WDWH KDV LQ D FDSLWDO
KROGLQJWKDWVWDWHFRXUWUXOHZDVQRWILUPO\HVWDEOLVKHGUXOH                  VHQWHQFLQJSURFHHGLQJDVWURQJLQWHUHVWLQKDYLQJWKHMXU\
DQG UHJXODUO\ IROORZHG ZKHUH VXEVWDQFH RI UXOH SUHFOXGLQJ                mH[SUHVV WKH FRQVFLHQFH RI WKH FRPPXQLW\ RQ WKH
UHOLHI RQ JURXQGV WKDW FRXOG KDYH EHHQ SXUVXHG RQ GLUHFW               XOWLPDWH TXHVWLRQ RI OLIH RU GHDWKl  :LWKHUVSRRQ Y
DSSHDOZDVQRWHVWDEOLVKHGXQWLODIWHUSHWLWLRQHUjVFRQYLFWLRQ                ,OOLQRLV  86    6&W   
VHHDOVR0DQQLQJY$OH[DQGHU)GWK                        /(GG6XUHO\LIWKHMXU\KDGUHWXUQHGIURP
&LU  ILQGLQJ WKDW SHWLWLRQHU KDG H[KDXVWHG KLV VWDWH             LWV GHOLEHUDWLRQV DIWHU RQO\ RQH KRXU DQG LQIRUPHG WKH
FRXUW UHPHGLHV ZKHUH KH SUHVHQWHG D FODLP IRU LQHIIHFWLYH               FRXUWWKDWLWKDGIDLOHGWRDFKLHYHXQDQLPLW\RQWKHILUVW
DVVLVWDQFHRIFRXQVHOLQSRVWFRQYLFWLRQSURFHHGLQJEHFDXVH                    EDOORW WKH FRXUW ZRXOG LQFRQWHVWDEO\ KDYH KDG WKH
E\2KLR6XSUHPH&RXUWKDGQRWVSRNHQFOHDUO\RQKRZ                       DXWKRULW\WRLQVLVWWKDWWKH\GHOLEHUDWHIXUWKHU7KLVLVWUXH
DSHWLWLRQHUVKRXOGSXUVXHFODLPVRILQHIIHFWLYHDVVLVWDQFHRI                  HYHQ LQ FDSLWDO FDVHV VXFK DV WKLV RQH DQG$OOHQ HYHQ
FRXQVHO7KHSURFHGXUDOUXOHXSRQZKLFKWKH2KLR&RXUWRI                     WKRXJKZHDUHQDWXUDOO\PLQGIXOLQVXFKFDVHVWKDWWKH
$SSHDOVUHOLHGWRUHMHFW3HWLWLRQHUjVFODLPGRHVQRWRSHUDWHDV                 mTXDOLWDWLYHGLIIHUHQFHEHWZHHQGHDWKDQGRWKHUSHQDOWLHV
DQDGHTXDWHDQGLQGHSHQGHQWVWDWHJURXQGXSRQZKLFKWRGHQ\                     FDOOV IRU D JUHDWHU GHJUHH RI UHOLDELOLW\ ZKHQ WKH GHDWK
IHGHUDOUHYLHZRI3HWLWLRQHUjVFODLPKLVFODLPWKHUHIRUHLVQRW                VHQWHQFHLVLPSRVHGl  /RFNHWWY2KLR86
SURFHGXUDOO\EDUUHG                                                           6&W/(GG
                                 0HULWV                                       /RZHQILHOG86DW)LQDOO\WKH&RXUWFRQFHGHG
                                                                              WKDWWKHMXU\jVUHODWLYHO\TXLFNUHVSRQVHWRWKH$OOHQFKDUJH
   7RGHPRQVWUDWHDFODLPRILQHIIHFWLYHDVVLVWDQFHRIFRXQVHO                mVXJJHVWV WKH SRVVLELOLW\ RI FRHUFLRQl EXW QRQHWKHOHVV
XQGHU6WULFNODQGY:DVKLQJWRQ86                     FRQFOXGHGWKDWGHIHQVHFRXQVHOjVIDLOXUHWRREMHFWmLQGLFDWHV
3HWLWLRQHU PXVW VKRZ WKDW KLV FRXQVHOjV SHUIRUPDQFH ZDV                WKDWWKHSRWHQWLDOIRUFRHUFLRQZDVQRWDSSDUHQWWRRQHRQ
GHILFLHQWDQGWKDWKHZDVSUHMXGLFHGE\WKDWGHILFLHQF\$                   WKHVSRWl,GDWIRRWQRWHRPLWWHG
FRXQVHOjV SHUIRUPDQFH LV GHILFLHQW LI LW IDOOV EHORZ DQ
REMHFWLYHVWDQGDUGRIUHDVRQDEOHQHVVVXFKWKDWWKHFRXQVHOjV                    :LWK WKHVH FRQVLGHUDWLRQV LQ PLQG ZH WXUQ WR WKH FDVH
mLGHQWLILHGDFWVDQGRPLVVLRQVZHUHRXWVLGHWKHZLGHUDQJHRI                 EHIRUHXV:HEHJLQE\REVHUYLQJWKDWQHLWKHUSDUW\VXJJHVWV
SURIHVVLRQDOO\ FRPSHWHQW DVVLVWDQFHl  :KLWH Y 0F$QLQFK               WKDWWKHODQJXDJHRIWKHVXSSOHPHQWDOFKDUJHJLYHQE\WKHWULDO
)GWK&LULQWHUQDOTXRWDWLRQVDQG                    FRXUWUXQVDIRXORI$OOHQ6HH6WDWHY0DXSLQ2KLR6WG
FLWDWLRQRPLWWHG7RVKRZSUHMXGLFHWKHSHWLWLRQHUmPXVWEH               1(GV\OODEXVVHWWLQJRXWSUHIHUUHG
DEOH WR GHPRQVWUDWH D UHDVRQDEOH SUREDELOLW\ WKDW EXW IRU            ODQJXDJHRIVXSSOHPHQWDO$OOHQFKDUJH5DWKHUSHWLWLRQHU
FRXQVHOjVXQSURIHVVLRQDOHUURUVWKHUHVXOWRIWKHSURFHHGLQJ                 IRFXVHV XSRQ WKH PDQQHU LQ ZKLFK WKH FKDUJH SRWHQWLDOO\
ZRXOGKDYHEHHQGLIIHUHQWl,GDWLQWHUQDOTXRWDWLRQV                  LQWHUDFWV ZLWK WKH 2KLR VHQWHQFLQJ VWDWXWH  7KDW VWDWXWH
DQG FLWDWLRQ RPLWWHG  ,Q WKH LQVWDQW FDVH 3HWLWLRQHU KDV          SURYLGHVDVIROORZV
GHPRQVWUDWHG GHILFLHQW SHUIRUPDQFH DQG KDV HVWDEOLVKHG
                                                                                8SRQ FRQVLGHUDWLRQ RI WKH UHOHYDQW HYLGHQFH UDLVHG DW
                                                                                WULDO WKH WHVWLPRQ\ RWKHU HYLGHQFH VWDWHPHQW RI WKH
     
      7KH GLVWULFW FRXUW DOVR GHPRQVWUDWHG WKDW DQ\ UXOH EDUULQJ WKH UHYLHZ
                                                                                RIIHQGHUDUJXPHQWVRIFRXQVHODQGLI DSSOLFDEOHWKH
RI LQHIIHFWLYH DVVLVWDQFH RI FRXQVHO FODLP LQ SRVWFRQYLFWLRQ SHWLWLRQV ZDV
                                                                                UHSRUWV VXEPLWWHG SXUVXDQW WR GLYLVLRQ ' RI WKLV
QRW UHJXODUO\ IROORZHG +HQGHUVRQ     Y &ROOLQV  ) 6XSS G        VHFWLRQWKHWULDOMXU\LIWKHRIIHQGHUZDVWULHGE\DMXU\
6' 2KLR 
       +HQGHUVRQY&ROOLQV                     1RV       1RV                    +HQGHUVRQY&ROOLQV       

    VKDOOGHWHUPLQHZKHWKHUWKHDJJUDYDWLQJFLUFXPVWDQFHV                PHWKRG E\ ZKLFK D SHWLWLRQHU FRXOG SXUVXH D FODLP RI
    WKH RIIHQGHU ZDV IRXQG JXLOW\ RI FRPPLWWLQJ DUH               LQHIIHFWLYHDVVLVWDQFHRIDSSHOODWHFRXQVHO,GDW$W
    VXIILFLHQWWRRXWZHLJKWKHPLWLJDWLQJIDFWRUVSUHVHQWLQ             WKDWWLPHWKHFRXUWKHOGWKDWFODLPVRILQHIIHFWLYHDVVLVWDQFH
    WKHFDVH,IWKHWULDOMXU\ XQDQLPRXVO\ILQGVE\SURRI            RIDSSHOODWHFRXQVHOFRXOGQRWEHUDLVHGLQSRVWFRQYLFWLRQ
    EH\RQG D UHDVRQDEOH GRXEW WKDW WKH DJJUDYDWLQJ                SURFHHGLQJV  ,G  7KH FRXUW VWDWHG WKDW IURP WKDW SRLQW
    FLUFXPVWDQFHV WKH RIIHQGHU ZDV IRXQG JXLOW\ RI                 IRUZDUG SHWLWLRQHUV FRXOG EULQJ FODLPV RI LQHIIHFWLYH
    FRPPLWWLQJRXWZHLJKWKHPLWLJDWLQJIDFWRUVWKHWULDOMXU\           DVVLVWDQFH RI DSSHOODWH FRXQVHO E\ ILOLQJ DSSOLFDWLRQV IRU
    VKDOOUHFRPPHQGWRWKHFRXUWWKDWWKHVHQWHQFHRIGHDWK              GHOD\HGUHFRQVLGHUDWLRQLQWKH2KLR&RXUWRI$SSHDOVDQGLI
    EHLPSRVHGRQWKHRIIHQGHU$EVHQWVXFKDILQGLQJWKH              GHQLHGE\ILOLQJDGHOD\HGDSSHDOLQWKH2KLR6XSUHPH&RXUW
    MXU\VKDOOUHFRPPHQGWKDWWKHRIIHQGHUEHVHQWHQFHGWR               ,G,QPDNLQJLWVUXOLQJWKHFRXUWQRWHGWKHXQVHWWOHGQDWXUH
    OLIH LPSULVRQPHQW ZLWK SDUROH HOLJLELOLW\ DIWHU VHUYLQJ        RIWKHODZ
    WZHQW\IXOO\HDUVRILPSULVRQPHQWRUWROLIHLPSULVRQPHQW
    ZLWK SDUROH HOLJLELOLW\ DIWHU VHUYLQJ WKLUW\ IXOO \HDUV RI     ,QOLJKWRIWKHIDFWWKDW2KLRKDVQRVWDWXWRU\DXWKRULW\RU
    LPSULVRQPHQW                                                         FRXUWUXOHVGHGLFDWHGWRWKHSURFHGXUHWREHIROORZHGE\
                                                                           GHIHQGDQWVZKRDOOHJHLQHIIHFWLYHDVVLVWDQFHRIDSSHOODWH
2+,2 5(9 &2'( $11  ' $QGHUVRQ                     FRXQVHO ZH UHFRPPHQG WKDW WKH 5XOHV $GYLVRU\
VXEVHTXHQWO\ DPHQGHG WR LQFOXGH D VHQWHQFH RI OLIH                 &RPPLWWHH DSSRLQWHG E\ WKLV FRXUW UHYLHZ ZKHWKHU DQ
LPSULVRQPHQWZLWKRXWSDUROH7KH2KLR6XSUHPH&RXUWKDV                  DPHQGPHQWWR$SS5%RUDQHZUXOHVKRXOG EH
FRQVLVWHQWO\UHDGWKHVWDWXWHWRUHTXLUHWKDWERWKDVHQWHQFHRI           DGRSWHGWREHWWHUVHUYHFODLPDQWVLQWKLVSRVLWLRQ
GHDWK DQG D VHQWHQFH RI OLIH ZLWK SDUROH HOLJLELOLW\ EH
XQDQLPRXV6HH6WDWHYsHQNLQV2KLR6WG                ,GDWQ
1(GV\OODEXV6WDWHY6SULQJHU2KLR6W
G1(GV\OODEXVZKHQMXU\XQDEOHWR               ,Q UHVSRQVH WR WKH UXOLQJ E\ WKH 0XUQDKDQ &RXUW 2KLR
UHDFK D XQDQLPRXV YHUGLFW RQ HLWKHU GHDWK RU RQH RI WZR        $SSHOODWH5XOHZDVDPHQGHGHIIHFWLYHsXO\ZHOO
VWDWXWRULO\SUHVFULEHGOLIHVHQWHQFHVWKHVWDWXWHUHTXLUHVWKH          DIWHU 3HWLWLRQHU KDG ILOHG KLV DSSOLFDWLRQ IRU GHOD\HG
WULDO FRXUW WR LPSRVH RQH RI WZR OLIH VHQWHQFHV  0RUH        UHFRQVLGHUDWLRQSHUPLWWLQJDGHIHQGDQWLQDFULPLQDOFDVHWR
UHFHQWO\WKH&RXUWH[SODLQHGmsHQNLQVGHILQHVZKDWWKHMXU\jV          DSSO\IRUUHRSHQLQJRIKLVDSSHDO,WSURYLGHV
MRE LV o WR UHQGHU D XQDQLPRXV YHUGLFW  6SULQJHU VLPSO\
H[SODLQVZKDWDWULDOFRXUWPXVWGRLIDMXU\LVGHDGORFNHGWKDW          $GHIHQGDQWLQDFULPLQDOFDVHPD\DSSO\IRUUHRSHQLQJ
LV ZKHQ WKH MXU\ GRHV QRW SURSHUO\ GR LWV MREl  6WDWH Y     RI WKH DSSHDO IURP WKH MXGJPHQW RI FRQYLFWLRQ DQG
%URRNV  2KLR 6W G    1(G             VHQWHQFHEDVHGRQDFODLPRILQHIIHFWLYHDVVLVWDQFHRI
  ,Q %URRNV WKH &RXUW DOVR FODULILHG WZR RWKHU            DSSHOODWHFRXQVHO$QDSSOLFDWLRQIRUUHRSHQLQJVKDOOEH
SURSRVLWLRQV  D MXU\ QHHG QRW UXOH RXW WKH GHDWK SHQDOW\      ILOHG LQ WKH FRXUW RI DSSHDOV ZKHUH WKH DSSHDO ZDV
EHIRUH FRQVLGHULQJ D OLIH VHQWHQFH DQG  mSUDFWLFDOO\             GHFLGHG ZLWKLQ QLQHW\ GD\V IURP MRXUQDOL]DWLRQ RI WKH
VSHDNLQJ D ORQH MXURU FRXOG SUHYHQW WKH LPSRVLWLRQ RI WKH        DSSHOODWH MXGJPHQW XQOHVV WKH DSSOLFDQW VKRZV JRRG
GHDWKSHQDOW\l%URRNV2KLR6WGDW1(G              FDXVHIRUILOLQJDWDODWHUWLPH
DW
                                                                         2KLR5$SS3%
  7KHWKUXVWRISHWLWLRQHUjVSRVLWLRQLVWKDWFRQVLVWHQWZLWK
6SULQJHUWKHWULDOFRXUWVKRXOGKDYHWDNHQWKHPDWWHUIURPWKH            %DVHGRQWKH2KLR6XSUHPH&RXUWjVUXOLQJLQ0XUQDKDQ
                                                                         WKHGLVWULFWFRXUWZDVFRUUHFWLQUXOLQJWKDWWKHSURFHGXUDOODZ
    +HQGHUVRQY&ROOLQV                   1RV        1RV                            +HQGHUVRQY&ROOLQV         

FRQVWLWXWLRQDOHUURU0DXSLQY6PLWK)GWK        MXU\DWWKHWLPHWKDWLWILUVWUHSRUWHGDGHDGORFNDQGLPSRVHG
&LU                                                           RQH RI WKH WZR SRVVLEOH OLIH VHQWHQFHV  $FFRUGLQJ WR
                                                                      SHWLWLRQHUWRGRRWKHUZLVHIDYRUVRQO\WKRVHMXURUVVXSSRUWLQJ
 ,QKROGLQJWKDW3HWLWLRQHUjVFODLPZDVXQWLPHO\WKH2KLR            WKHGHDWKSHQDOW\EHFDXVHFRQWLQXHGGHOLEHUDWLRQPD\UHVXOW
&RXUWRI$SSHDOVUHOLHGRQ2KLR5XOHVRI$SSHOODWH3URFHGXUH          LQDGHDWKYHUGLFWZKLOHFDOOLQJDKDOWWRGHOLEHUDWLRQUHVXOWV
5XOHV%DQG5XOH$SURYLGHV                             LQDVWDWXWRULO\PDQGDWHGOLIHVHQWHQFH7KXVDQ$OOHQFKDUJH
                                                                      LV LPSHUPLVVLEO\    FRHUFLYH EHFDXVH LW HQFRXUDJHV D GHDWK
  $SSOLFDWLRQIRUUHFRQVLGHUDWLRQRIDQ\FDXVHRUPRWLRQ              VHQWHQFH,QJUDQWLQJWKHZULWRQWKLVLVVXHWKHGLVWULFWFRXUW
  VXEPLWWHGRQDSSHDOVKDOOEHPDGHLQZULWLQJEHIRUHWKH             FRQFOXGHGWKDWmEHFDXVHWKHWULDOMXGJHjVRULJLQDOFKDUJHWR
  MXGJPHQWRURUGHURIWKHFRXUWKDVEHHQDSSURYHGE\WKH             WKHMXU\LQWKHSHQDOW\SKDVHZDVQRWDQDFFXUDWHUHIOHFWLRQRI
  FRXUW DQG ILOHG E\ WKH FRXUW ZLWK WKH FOHUN IRU            WKHODQJXDJHRI'WKHVXSSOHPHQWDOLQVWUXFWLRQ
  MRXUQDOL]DWLRQRUZLWKLQWHQGD\VDIWHUWKHDQQRXQFHPHQW            WR WKH MXU\ UHVXOWHG LQ FRHUFLRQ DQG SUHMXGLFH WR 3HWLWLRQHU
  RIWKHFRXUW
VGHFLVLRQZKLFKHYHULVWKHODWHU7KHILOLQJ        l+HQGHUVRQ)6XSSGDW7KHSDUWRIWKH
  RIDQDSSOLFDWLRQIRUUHFRQVLGHUDWLRQVKDOOQRWH[WHQGWKH          RULJLQDOFKDUJHIRXQGREMHFWLRQDEOHUHDGVDVIROORZV
  WLPHIRUILOLQJDQRWLFHRIDSSHDOLQWKH6XSUHPH&RXUW
                                                                          ,IWKH6WDWHRI2KLRKDVSURYHGEH\RQGDUHDVRQDEOH
2KLR 5 $SS 3 $  $QG 5XOH % SURYLGHV WKDW          GRXEWWKDWHLWKHURQHRIWKHDJJUDYDWLQJFLUFXPVWDQFHVRI
m>H@QODUJHPHQW RI WLPH WR ILOH DQ DSSOLFDWLRQ WR UHFRQVLGHU     WKH PXUGHU RXWZHLJKV DQ\ PLWLJDWLQJ IDFWRU WKDW PD\
SXUVXDQWWR$SS5$VKDOOQRWEHJUDQWHGH[FHSWRQD              H[LVW LQ WKLV FDVH WKHQ LW ZRXOG EH \RXU GXW\ WR
VKRZLQJRIH[WUDRUGLQDU\FLUFXPVWDQFHVl2KLR5$SS3               UHFRPPHQGWKHGHDWKSHQDOW\
%7KH2KLR&RXUWRI$SSHDOVGHWHUPLQHGWKDW3HWLWLRQHU
KDG QRW VKRZQ JRRG FDXVH IRU WKH GHOD\ LQ ILOLQJ KLV            +RZHYHULI\RXILQGIURPWKHHYLGHQFHWKDWWKH6WDWH
DSSOLFDWLRQIRUUHFRQVLGHUDWLRQXQGHU6WDWHY0XUQDKDQ            KDVIDLOHGWRSURYHEH\RQGDUHDVRQDEOHGRXEWWKDWHLWKHU
1(G7KHUHFRUGWKHUHIRUHFOHDUO\VKRZVWKDW            RQH RI WKH DJJUDYDWLQJ FLUFXPVWDQFHV RI WKH PXUGHU
3HWLWLRQHUIDLOHGWRFRPSO\ZLWKDSURFHGXUDOUXOHXSRQZKLFK           RXWZHLJKVDQ\PLWLJDWLQJIDFWRUWKDWPD\H[LVWWKHQLWjV
WKHVWDWHFRXUWUHOLHGWRGLVPLVVKLVFODLP                            \RXUGXW\WRQRWUHFRPPHQGWKHGHDWKSHQDOW\
  7KHTXHVWLRQQRZEHFRPHVZKHWKHUWKLVSURFHGXUDOUXOHLV                                               
DQ DGHTXDWH DQG LQGHSHQGHQW VWDWH JURXQG  7KH ODZ
GHPRQVWUDWHVWKDWLWLVQRW)RUDVWDWHSURFHGXUDOUXOHWREHDQ        >,@QWKHHYHQWWKDW\RXGRQRWUHFRPPHQGWKHGHDWK
DGHTXDWH DQG LQGHSHQGHQW VWDWH JURXQG LW PXVW EH ILUPO\        SHQDOW\REYLRXVO\\RXZRXOGFRQWLQXH\RXUGHOLEHUDWLRQV
VHWWOHGDQGUHJXODUO\DSSOLHG5RJHUVY+RZHV)G          DQG \RXjOO UHFRPPHQG RQH RI WZR RWKHU SRVVLEOH
WK&LU                                                   SHQDOWLHV
  7KH2KLR6XSUHPH&RXUWGHFLGHG6WDWHY0XUQDKDQ
1(GLQ)HEUXDU\RIZKLFKZDVVL[\HDUV
DIWHU3HWLWLRQHUSXUVXHGKLVGLUHFWDSSHDOLQWKUHH\HDUV           
DIWHU3HWLWLRQHUILOHGDSHWLWLRQIRUSRVWFRQYLFWLRQUHOLHIDQG           3HWLWLRQHU DOVR SRLQWV RXW WKDW WKH WULDO MXGJH SUHIDFHG KLV $OOHQ
QLQHPRQWKVSULRUWRWKHILOLQJRIKLVDSSOLFDWLRQIRUGHOD\HG        FKDUJH E\ UHPLQGLQJ WKH MXU\ WKDW LW VKRXOG QRW mFRQVLGHU V\PSDWK\ ELDV
                                                                      RU SUHMXGLFHl (YHQ LI WKDW LQVWUXFWLRQ SDVVHV FRQVWLWXWLRQDO PXVWHU
FRQVLGHUDWLRQ,Q0XUQDKDQUHFRJQL]LQJWKDWWKHODZZDV             SHWLWLRQHU FLWHV LW DV IXUWKHU SURRI WKDW WKH $OOHQ FKDUJH ZDV JLYHQ ZLWK DQ
XQVHWWOHG WKH 2KLR 6XSUHPH &RXUW HVWDEOLVKHG WKH SURSHU       H\H WRZDUGV VHFXULQJ D GHDWK YHUGLFW
    +HQGHUVRQY&ROOLQV                    1RV         1RV                     +HQGHUVRQY&ROOLQV        

,GDW,QWKHYLHZRIWKHGLVWULFWFRXUWm>W@KLVODQJXDJH        WKH SURFHGXUDO GHIDXOW RI LQWHU DOLD KLV HLJKWK JURXQG IRU
GRHVQRWDFFXUDWHO\UHIOHFWWKHODQJXDJHLQ'l          UHOLHIWKHDFTXLWWDOILUVWLQVWUXFWLRQFODLP
,G
                                                                           3HWLWLRQHU DWWHPSWHG WR DPHQG KLV VWDWH SRVWFRQYLFWLRQ
   :H DUH UHOXFWDQW WR DFFRUG WKLV SUHOLPLQDU\ LQVWUXFWLRQ       SHWLWLRQWRUDLVHDFODLPIRULQHIIHFWLYHDVVLVWDQFHRIDSSHOODWH
VLJQLILFDQWZHLJKWLQRXUFRQVLGHUDWLRQRIWKHFRQVWLWXWLRQDOLW\        FRXQVHODVKLVWKLUWHHQWKFDXVHRIDFWLRQ7KHVWDWHRSSRVHG
RIWKHVXEVHTXHQW$OOHQFKDUJHIRUWKUHHUHDVRQV  )LUVWDV          WKHPRWLRQDQGWKHWULDOFRXUWGHQLHG3HWLWLRQHUjVUHTXHVWDQG
DOUHDG\GLVFXVVHGZHUHDGsHQNLQVDVDXWKRUL]LQJDUHYLHZRI           VWUXFNLWIURPWKHUHFRUG3HWLWLRQHUjVILUVWKDEHDVSHWLWLRQ
WKHmIDFWVDQGFLUFXPVWDQFHVlVXUURXQGLQJWKH$OOHQFKDUJH              ZDVGLVPLVVHGZLWKRXWSUHMXGLFHVRWKDWKHFRXOGVHHNUHYLHZ
LWVHOIDQGQRWDVDFDUWHEODQFKHLQYLWDWLRQWRERRWVWUDSHYHU\         RI KLV LQHIIHFWLYH DVVLVWDQFH RI DSSHOODWH FRXQVHO FODLP
SUHOLPLQDU\LQVWUXFWLRQLQWRWKHLQTXLU\6HFRQGWKHUHFRUG           3HWLWLRQHU WKHUHDIWHU ILOHG DQ $SSOLFDWLRQ IRU 'HOD\HG
UHYHDOV WKDW FRXQVHO IRU SHWLWLRQHU GLG QRW DGYDQFH WKDW        5HFRQVLGHUDWLRQ RI KLV GLUHFW DSSHDO ZKLFK ZDV GHQLHG DV
DUJXPHQWWRWKH2KLRFRXUWV7KLUGDQGPRVWLPSRUWDQWO\ZH           XQWLPHO\
DUH QRW FRQYLQFHG WKDW WKH LQVWUXFWLRQ GLG LQ IDFW
PLVUHSUHVHQW WKH VWDWXWH  ,Q IDFW HYHQ WKH GLVWULFW FRXUW                           3URFHGXUDO'HIDXOW
FRQFHGHGm:HEHOLHYHWKDWWKHWULDOMXGJHjVRULJLQDOFKDUJHWR
WKH MXU\ FRUUHFWO\ LPSUHVVHG XSRQ WKHP WKDW WKH\ KDG WR          5HVSRQGHQWDUJXHGLQWKHGLVWULFWFRXUWWKDW3HWLWLRQHUKDG
GHWHUPLQHZKHWKHU3HWLWLRQHUZRXOGRUZRXOGQRWUHFHLYHWKH             GHIDXOWHG KLV FODLP IRU LQHIIHFWLYH DVVLVWDQFH RI DSSHOODWH
GHDWKSHQDOW\EDVHGRQWKHZHLJKWRIWKHDJJUDYDWLQJIDFWRUV            FRXQVHO DV GHPRQVWUDWHG E\ WKH VWDWH DSSHOODWH FRXUWVj
EHIRUHEHJLQQLQJGHOLEHUDWLRQVRQUHFRPPHQGLQJHLWKHURIWKH            UHMHFWLRQRI3HWLWLRQHUjVFODLPDVEHLQJXQWLPHO\ILOHG7KH
WZROLIHVHQWHQFHVl,GDW0RUHRYHUWKHSDWWHUQMXU\           GLVWULFWFRXUWSURSHUO\UHMHFWHGWKLVDUJXPHQWDQGKHOGWKDWWKH
LQVWUXFWLRQVSURSRXQGHGE\WKH2KLRsXGLFLDO&RQIHUHQFHIRU             SURFHGXUDOUXOHXSRQZKLFKWKHVWDWHDSSHOODWHFRXUWUHOLHG
WKHVWDWXWHDWLVVXHSURYLGHLQSDUW                                  ZDVQRWDQLQGHSHQGHQWDQGDGHTXDWHVWDWHJURXQG

  &21&/86,21<RXVKDOOUHFRPPHQGWKHVHQWHQFHRI                         ,Q&ROHPDQY7KRPSVRQ86WKH
  GHDWK LI \RX XQDQLPRXVO\ DOO WZHOYH ILQG E\ SURRI           6XSUHPH&RXUWUHLWHUDWHGWKDWDIHGHUDOFRXUWFRXOGQRWKHDU
  EH\RQG D UHDVRQDEOH GRXEW WKDW WKH DJJUDYDWLQJ                 WKHKDEHDVSHWLWLRQRIDVWDWHSULVRQHUZKHUHWKHGHFLVLRQWR
  FLUFXPVWDQFHVRXWZHLJKWKHPLWLJDWLQJIDFWRUV                        GHQ\ UHOLHI LQ WKH VWDWH FRXUW UHVWHG RQ DQ DGHTXDWH DQG
                                                                        LQGHSHQGHQWVWDWHJURXQG7KLV&RXUWVHWIRUWKDIRXUSDUWWHVW
  ,I\RXGRQRWVRILQG\RXVKDOOXQDQLPRXVO\DOOWZHOYH             WRGHWHUPLQHZKHWKHUDSHWLWLRQHUKDVSURFHGXUDOO\GHIDXOWHG
  UHFRPPHQG HLWKHU OLIH VHQWHQFH ZLWK SDUROH HOLJLELOLW\          D FODLP RQ KDEHDV UHYLHZ XQGHU ZKLFK WKH FRXUW PXVW
  DIWHU VHUYLQJ WZHQW\ \HDUV RI LPSULVRQPHQW RU OLIH             GHWHUPLQHZKHWKHUWKHUHLVDVWDWHSURFHGXUDOUXOHWKDWLV
  VHQWHQFHZLWKSDUROHHOLJLELOLW\DIWHUVHUYLQJWKLUW\\HDUV           DSSOLFDEOHWRWKHSHWLWLRQHUjVFODLPDQGWKHSHWLWLRQHUIDLOHGWR
  RILPSULVRQPHQW                                                      FRPSO\ ZLWK WKH UXOH  ZKHWKHU WKH VWDWH FRXUWV DFWXDOO\
                                                                        HQIRUFHG WKH VWDWH SURFHGXUDO UXOH  ZKHWKHU WKH VWDWH
2KLR sXU\ ,QVWUXFWLRQV 9RO   $ $QGHUVRQ          SURFHGXUDOUXOHLVDQDGHTXDWHDQGLQGHSHQGHQWVWDWHJURXQG
  /LNH WKH LQVWUXFWLRQ JLYHQ E\ WKH WULDO FRXUW WKH   RQZKLFKWKHVWDWHFDQUHO\WRIRUHFORVHUHYLHZRIDIHGHUDO
SDWWHUQLQVWUXFWLRQVUHIOHFWWKHVWDWXWRU\DVVXPSWLRQWKDWDMXU\       FRQVWLWXWLRQDO FODLP DQG  ZKHWKHU WKH SHWLWLRQHU KDV
ZLOO ILUVW FRQVLGHU ZKHWKHU WKH GHDWK SHQDOW\ UHSUHVHQWV DQ     GHPRQVWUDWHGWKDWWKHUHH[LVWVFDXVHIRUKLVIDLOXUHWRFRPSO\
DSSURSULDWHSXQLVKPHQWEHIRUHFRQVLGHULQJHLWKHURIWKHWZR             ZLWK WKH UXOH DQG WKDW KH ZDV SUHMXGLFHG E\ WKH DOOHJHG
OLIH VHQWHQFHV  &RQVLVWHQW ZLWK %URRNV VXSUD KRZHYHU
    +HQGHUVRQY&ROOLQV                    1RV        1RV                        +HQGHUVRQY&ROOLQV            

  >W@KHWULDOFRXUWjVLQVWUXFWLRQVWRWKHMXU\DWWKHVHQWHQFLQJ       QHLWKHULQVWUXFWLRQH[SOLFLWO\UHTXLUHVWKHMXU\WRUXOHRXWGHDWK
  SKDVH RI WKH SURFHHGLQJV DGYLVHG WKH MXU\ WKH\ PXVW          EHIRUHFRQVLGHULQJDOLIHVHQWHQFH6HH6FRWWY0LWFKHOO
  FRQVLGHUGHDWKILUVWEHIRUHFRPPHQFLQJGHOLEHUDWLRQRQ               )G   WK &LU  GLVFXVVLQJ VHQWHQFLQJ
  HLWKHU RI WKH WZR OLIH YHUGLFWV  7KLV LQVWUXFWLRQ LV       FKDUJHLQ2KLRFDSLWDOFDVHEXWVHH0DSHVY&R\OH)G
  IXQGDPHQWDOO\XQIDLUDQGYLRODWHVWKH)LIWK6L[WKDQG             WK&LUGLVWLQJXLVKHGE\6FRWW
  (LJKWKDQG)RXUWHHQWK$PHQGPHQWVWRWKH8QLWHG6WDWHV
  &RQVWLWXWLRQ                                                           ,Q 6WDWH Y 'DYLV  2KLR 6W G   1(G 
                                                                       WKH2KLR6XSUHPH&RXUWUHYLHZHGDFKDOOHQJHVLPLODU
s$DWKHUHLQDIWHUmDFTXLWWDOILUVWLQVWUXFWLRQFODLPl        WRWKHRQHDGYDQFHGE\SHWLWLRQHUUHVSHFWLQJDQDFTXLWWDOILUVW
3HWLWLRQHU DWWHPSWHG WR UDLVH WKLV DVVLJQPHQW RI HUURU LQ D   LQVWUXFWLRQ$VLQWKLVFDVHWKHWULDORIGHIHQGDQWLQ'DYLV
SURVHVXSSOHPHQWDOEULHIWKDWZDVILOHGRQKLVGLUHFWDSSHDO         RFFXUUHG SULRU WR WKH 2KLR 6XSUHPH &RXUWjV GHFLVLRQ LQ
EXWWKHVWDWHDSSHOODWHFRXUWUHMHFWHGWKHVXSSOHPHQWDOEULHI         %URRNV7KH&RXUWUHMHFWHGGHIHQGDQWjVFODLPEHFDXVHWKH
3HWLWLRQHUDUJXHVWKDWWKHVWDWHYLRODWHGKLVFRQVWLWXWLRQDOULJKW     MXU\LQVWUXFWLRQDWLVVXHDGHTXDWHO\LQIRUPHGWKHMXU\WKDWD
E\ILUVWSUHFOXGLQJKLPIURPUDLVLQJWKHDVVLJQPHQWVRIHUURU          UHFRPPHQGDWLRQ RI GHDWK UHTXLUHG XQDQLPLW\ DQG WKH
RQ KLV GLUHFW DSSHDO DQG WKHQ GHQ\LQJ KLP WKH DELOLW\ WR    LQVWUXFWLRQPDGHWKHMXURUVDZDUHWKDWDQ\RQHRIWKHPFRXOG
HVWDEOLVK LQHIIHFWLYH DVVLVWDQFH RI DSSHOODWH FRXQVHO LQ KLV    EORFNWKHLPSRVLWLRQRIDGHDWKVHQWHQFH,GDW2KLR6W
SRVWFRQYLFWLRQ SHWLWLRQ  3HWLWLRQHU FODLPV WKDW WKH 6WDWHjV   GDW1(GDW
IDLOXUHWRSURYLGHDQDGHTXDWHSURFHGXUHE\ZKLFKKHFRXOG
UDLVH KLV LQHIIHFWLYH DVVLVWDQFH RI DSSHOODWH FRXQVHO FODLP        'DYLV UHTXLUHV WKDW WKH FKDOOHQJHG LQVWUXFWLRQ EH DQ
YLRODWHVKLVFRQVWLWXWLRQDOULJKWVXQGHUWKH6L[WK(LJKWKDQG        DFTXLWWDOILUVWLQVWUXFWLRQVLPLODUWRWKHRQHVWUXFNGRZQLQ
)RXUWHHQWK$PHQGPHQWV                                               %URRNVEHIRUHUHYHUVDORIDFDSLWDOVHQWHQFHLVZDUUDQWHG,Q
                                                                       WKHFDVHQRZEHIRUHXVWKHLQVWUXFWLRQDWLVVXHLQIRUPHGWKH
  7KHUHFRUGDQGWKHODZGHPRQVWUDWHWKDW3HWLWLRQHUUHFHLYHG          MXURUVWKDWWKHLUUHFRPPHQGDWLRQRIGHDWKUHTXLUHGXQDQLPLW\
LQHIIHFWLYH DVVLVWDQFH RI DSSHOODWH FRXQVHO LQDVPXFK DV          m>$@OO WZHOYH RI \RX PXVW DJUHH RQ ZKLFKHYHU YHUGLFW \RX
3HWLWLRQHUjV FRXQVHOjV IDLOXUH WR UDLVH KLV DFTXLWWDOILUVW      VLJQ><@RXFDQQRWKDYHDUHFRPPHQGDWLRQRUDYHUGLFWLI
LQVWUXFWLRQ FODLP RQ GLUHFW DSSHDO FRQVWLWXWHG GHILFLHQW         LWLVVHYHQWRILYHWHQWRWZRRUHOHYHQWRRQHl$OWKRXJKWKH
UHSUHVHQWDWLRQ DQG 3HWLWLRQHU ZDV SUHMXGLFHG E\ VXFK             WULDO FRXUW GLG QRW H[SUHVVO\ VWDWH WKDW D VLQJOH MXURU FRXOG
UHSUHVHQWDWLRQ0RUHRYHUDVGLVFXVVHGEHORZ3HWLWLRQHUjV            SUHFOXGH D GHDWK VHQWHQFH LQ RXU YLHZ WKH LQVWUXFWLRQ
FODLP RI LQHIIHFWLYH DVVLVWDQFH RI FRXQVHO LV VXIILFLHQW WR    FKDOOHQJHGE\SHWLWLRQHUDQGWKHRQHDSSURYHGLQ'DYLVDUH
GHPRQVWUDWHWKHFDXVHDQGSUHMXGLFHQHFHVVDU\WRRYHUFRPH              LQGLVWLQJXLVKDEOHZLWKUHVSHFWWR%URRNV
3HWLWLRQHUjVSURFHGXUDOGHIDXOWRIKLVDFTXLWWDOILUVWLQVWUXFWLRQ
FODLP                                                                   )LQDOO\WKHGLVVHQWDSSHDUVWRFRQIXVHDQmDFTXLWWDOILUVWl
                                                                       LQVWUXFWLRQ ZLWK D mFRQVLGHU ILUVWl LQVWUXFWLRQ  :KLOH DQ
                                $                                     LQVWUXFWLRQPD\QRWUHTXLUHWKDWMXURUVILUVWXQDQLPRXVO\ILQG
                                                                       WKDW WKH DJJUDYDWLQJ IDFWRUV RXWZHLJK WKRVH LQ PLWLJDWLRQ
  $V KLV WZHQW\VHYHQWK JURXQG IRU UHOLHI LQ KLV KDEHDV        EHIRUHWKH\PD\FRQVLGHUZKLFKOLIHVHQWHQFHWRLPSRVHWKH
SHWLWLRQHU 3HWLWLRQHU FODLPV WKDW KH UHFHLYHG LQHIIHFWLYH
DVVLVWDQFHRIDSSHOODWHFRXQVHO3HWLWLRQHUFODLPHGWKDWWKH
LQHIIHFWLYH DVVLVWDQFH RI DSSHOODWH FRXQVHO FODLP ZRXOG              
GHPRQVWUDWHWKHFDXVHDQGSUHMXGLFHQHFHVVDU\WRRYHUFRPH
                                                                            m<RX DUH QRZ UHTXLUHG WR GHWHUPLQH XQDQLPRXVO\ WKDW WKH GHDWK
                                                                       SHQDOW\ LV LQDSSURSULDWH EHIRUH \RX FDQ FRQVLGHU D OLIH VHQWHQFHl   %URRNV
                                                                        2KLR 6W G DW   1(G DW 
    +HQGHUVRQY&ROOLQV                      1RV         1RV                     +HQGHUVRQY&ROOLQV        

VWUXFWXUH RI WKH VWDWXWH LPSOLHV WKDW WKH MXURUV PD\ HOHFW WR   WKHUHZDVLQVWUXFWHGWKDWLILWFRXOGQRWUHDFKDYHUGLFWWKH
FRQVLGHUWKHGHDWKSHQDOW\ILUVW$IWHUDOOWKHVWDWXWHLQVWUXFWV       FRXUW ZRXOG LPSRVH D OLIH VHQWHQFHDQ\ ORQH MXURU LQ
WKHMXU\WRFRQVLGHUWKHOLIHVHQWHQFHVDEVHQWDILQGLQJWKDWWKH         3HWLWLRQHUjVFDVHKDGQRVXFKNQRZOHGJH,QVWHDGWKHMXURU
DJJUDYDWLQJ IDFWRUV RXWZHLJK WKH PLWLJDWLQJ IDFWRUV                 OLNHO\WKRXJKWWKDWKHRUVKHKDGWRDJUHHZLWKWKHPDMRULW\
/RJLFDOO\WKHMXU\FDQRQO\KDYHUHDFKHGRUIDLOHGWRUHDFK            EHFDXVHWKDWLVZKDWWKHLQVWUXFWLRQVLPSOLHG
VXFKDmILQGLQJlLILWKDVDOUHDG\FRQVLGHUHGWKHGHDWKSHQDOW\
:HILQGQRWKLQJFRQVWLWXWLRQDOO\LPSHUPLVVLEOHZLWKDOORZLQJ                8QOLNHsHQNLQVDQG%XUJRVWKLVFDVHLQYROYHVWKHSHQDOW\
MXURUVWRFRQVLGHUZKHWKHUGHDWKLVDSSURSULDWHVRORQJDVWKH\           SKDVHRIDGHDWKSHQDOW\WULDOZKHUHWKH6XSUHPH&RXUWKDV
DUH DZDUH WKDW WKH\ PD\ FRQVLGHU SRVVLEOH OLIH VHQWHQFHV          UHFRJQL]HG WKDW WKH DEVHQFH RI RQH SXUSRVH XQGHUO\LQJ WKH
EHIRUHUHDFKLQJDILQDOGHFLVLRQZLWKUHVSHFWWRGHDWK7KH              $OOHQFKDUJHmWKHDYRLGDQFHRIWKHVRFLHWDOFRVWVRIDUHWULDOl
LQVWUXFWLRQ JLYHQ E\ WKH WULDO FRXUW FRPSRUWV ZLWK                 mREYLRXVO\ ZHLJKV >DJDLQVW DQ $OOHQ FKDUJH@ LQ WKH
FRQVWLWXWLRQDOUHTXLUHPHQW                                               FRQVWLWXWLRQDOFDOFXOXVl /RZHQILHOG86DW2I
                                                                          FRXUVH WKLV LV QRW WR VXJJHVW WKDW DQ $OOHQ FKDUJH LV
    ,QWKHHQGWKHQZHUHWXUQWRWKHTXHVWLRQWKDWZHSRVHGDW          LPSHUPLVVLEOHLQDGHDWKSHQDOW\FDVHEHFDXVHWKH/RZHQILHOG
WKH RXWVHW RI RXU GLVFXVVLRQ &DQ WKH FDVH EHIRUH XV EH         &RXUWDOVRUHFRJQL]HGWKDWWKHJRYHUQPHQWKDGDQLQWHUHVWLQ
PDWHULDOO\GLVWLQJXLVKHGIURP/RZHQILHOG":HFRQFOXGHWKDW               DFKLHYLQJ XQDQLPLW\ DW WKH VHQWHQFLQJ SKDVH RI D GHDWK
LW FDQQRW DQG ZH WKHUHIRUH PXVW UHYHUVH WKH RUGHU RI WKH        SHQDOW\ FDVH /RZHQILHOG  86 DW   ,Q IDFW XQGHU
GLVWULFW FRXUW JUDQWLQJ D FRQGLWLRQDO ZULW RI KDEHDV FRUSXV      GLIIHUHQW FLUFXPVWDQFHV D SURSHUO\ ZRUGHG $OOHQ FKDUJH
%RWKWKH/RXLVLDQDVWDWXWHDWLVVXHLQ/RZHQILHOGDQGWKH2KLR            PLJKWKDYHEHHQSHUPLVVLEOHLQWKLVFDVH+RZHYHUDQ$OOHQ
VWDWXWHEHIRUHXVKDYHVLPLODUIHDWXUHVGHVSLWHGLIIHUHQFHVLQ            FKDUJH XQGHU VRPH FLUFXPVWDQFHV FDQ SUHVHQW D JUHDWHU
WKHLUODQJXDJH%RWKUHTXLUHWKDWWKHMXU\jVUHFRPPHQGDWLRQ             FRQFHUQ LQ WKH FRQWH[W RI WKH VHQWHQFLQJ SKDVH RI D GHDWK
ZKHWKHU IRU OLIH RU GHDWK EH XQDQLPRXV  $QG PRVW              SHQDOW\FDVH,QVXFKDFRQWH[WVXSSOHPHQWDOLQVWUXFWLRQVRI
VLJQLILFDQWLQRXUH\HVHDFKVWDWXWHSURYLGHVWKDWLIWKHMXU\          WKLVW\SHVKRXOGEHVFUXWLQL]HGZLWKFDUHDQGSDUWLFXODULW\WR
LV XQDEOH WR UHDFK D YHUGLFW WKH FRXUW VKDOO LPSRVH D OLIH    DYRLGHUURUVFRQIXVLRQRUGRXEW
VHQWHQFH&RQVHTXHQWO\SHWLWLRQHUjVDUJXPHQWWKDWDQ$OOHQ
FKDUJHFDQRQO\IDYRUDYHUGLFWIRUGHDWKZRXOGDSSO\ZLWK                ,, ,QHIIHFWLYH $VVLVWDQFH RI $SSHOODWH &RXQVHO DQG
HTXDOIRUFHLQFRQWH[WRIWKH/RXLVLDQDVWDWXWHFRQVWUXHGLQ                  (UURQHRXVsXU\,QVWUXFWLRQVDWWKH3HQDOW\3KDVH
/RZHQILHOGDQGZDVE\LPSOLFDWLRQUHMHFWHGE\WKH6XSUHPH
&RXUW  )LQDOO\ WKH FLUFXPVWDQFHV VXUURXQGLQJ WKH MXU\              :KLOH,DJUHHZLWKWKHPDMRULW\WKDWPDQ\RI3HWLWLRQHUjV
GHOLEHUDWLRQVLQ/RZHQILHOGLPSO\DQHYHQJUHDWHUGDQJHURI               FODLPVLQ&DVH1RDUHPHULWOHVV,EHOLHYHWKDWWKH
FRHUFLRQ WKDQ WKRVH LQ WKH FDVH EHIRUH XV WKH WULDO MXGJH      GLVWULFW FRXUWjV GHWHUPLQDWLRQ WKDW 3ODLQWLII IDLOHG WR VKRZ
SROOHG WKH MXU\ WZLFH DQG D YHUGLFW RI GHDWK ZDV UHWXUQHG       SUHMXGLFHVXIILFLHQWWRGHPRQVWUDWHLQHIIHFWLYHDVVLVWDQFHRI
ZLWKLQWKLUW\PLQXWHVRIWKH$OOHQFKDUJH1RQHWKHOHVVWKH              DSSHOODWHFRXQVHOZDVLQHUURU,QWKHGLVWULFWFRXUW3HWLWLRQHU
6XSUHPH&RXUWXSKHOGWKHYHUGLFW                                         DVVHUWHGWKDWKHUHFHLYHGLQHIIHFWLYHDVVLVWDQFHRIDSSHOODWH
                                                                          FRXQVHOEHFDXVHKLVFRXQVHOIDLOHGWRDVVHUWDVDVVLJQPHQWVRI
  7KLVFRXUWLVERXQGE\WKHGHFLVLRQVRIWKH6XSUHPH&RXUW              HUURURQGLUHFWDSSHDOFHUWDLQJURXQGVWKDW3HWLWLRQHUWKRXJKW
:KHUH DV KHUH ZH DUH XQDEOH WR SHUFHLYH PDWHULDO                ZDUUDQWHG DUJXPHQW  2QH VXFK DVVLJQPHQW RI HUURU ZKLFK
GLVWLQFWLRQV EHWZHHQ D GHFLVLRQ RI WKDW &RXUW DQG WKH FDVH       3HWLWLRQHU UHTXHVWHG WKDW KLV FRXQVHO SXW IRUZDUG ZDV WKH
EHIRUHXVZHDUHREOLJDWHGWRGHIHUWRLWVOHDGUHJDUGOHVVRI            HLJKWKFODLPRUJURXQGIRUUHOLHILQKLVKDEHDVSHWLWLRQEHIRUH
RXURZQLQFOLQDWLRQV%HFDXVHZHGHWHFWQRHUURULQWKH$OOHQ            WKHGLVWULFWFRXUWZKLFKSURYLGHG
    +HQGHUVRQY&ROOLQV                    1RV         1RV                     +HQGHUVRQY&ROOLQV      

   $OWKRXJKWKHVWDWHPHQWVFLWHGDERYHGRQRWUHSUHVHQWWKH             FKDUJHDVJLYHQE\WKHWULDOFRXUWDQGSHUFHLYHQRWKLQJDERXW
HQWLUHWRQHRIWKH$OOHQFKDUJHLQWKLVFDVHWKHWULDOFRXUWjV         WKHFRQWH[WRIWKHFKDUJHWKDWUHQGHUHGLWXQGXO\FRHUFLYHLQ
TXDOLI\LQJ VWDWHPHQWV VXFK DV m,jP QRW VXJJHVWLQJ E\ DQ\        OLJKW RI /RZHQILHOG ZH PXVW UHYHUVH WKH GLVWULFW FRXUWjV
VWUHWFKRIWKHLPDJLQDWLRQWKDWDQ\RQHRI\RXVKRXOGJLYHXS           FRQGLWLRQDOJUDQWRIWKHZULW
DZHOOJURXQGHGRSLQLRQRUWRYLRODWH\RXURDWKlRUm1RZWKH
YHUGLFWRIWKHMXU\REYLRXVO\VKRXOGUHSUHVHQWWKHRSLQLRQRI                                           ,,
HDFK RI \RXl GR QRW UHPHG\ WKH KDUP FUHDWHG E\
DFFRPSDQ\LQJVWDWHPHQWVVXFKDVm%XWLWGRHVQRWPHDQWKDW                $FFRUGLQJO\ WKH RUGHU RI WKH GLVWULFW FRXUW FRQGLWLRQDOO\
MXURUVVKRXOGUHIXVHWRDJUHHEHFDXVHRIPHUHVWXEERUQQHVVl             JUDQWLQJSHWLWLRQHUDZULWRIKDEHDVFRUSXVLVKHUHE\YDFDWHG
RU m%XW WKLV GRHVQjW PHDQ WKDW \RX FDQjW FKDQJH \RXU           DQGSHWLWLRQHUjVVHQWHQFHLVUHLQVWDWHG,QDOORWKHUUHVSHFWV
RSLQLRQVlRUm\RXKDYHDGXW\WRDJUHHl6HH%XUJRV)G           WKHRUGHURIWKHGLVWULFWFRXUWLVDIILUPHG
DW
  *LYHQ WKDW 3HWLWLRQHUjV GHDGORFNHG GHDWKSHQDOW\ SKDVH
MXU\ KDG EHHQ WZLFH WROG WKDW LW FRXOG QRW FRQVLGHU D OLIH
VHQWHQFH XQWLO LW KDG XQDQLPRXVO\ GHFLGHG WKDW WKH GHDWK
SHQDOW\ZDVQRWDSSURSULDWHWKHPHVVDJHFRQYH\HGE\WKHMXU\
WRWKHWULDOFRXUWDQGWKHODQJXDJHRIWKH$OOHQFKDUJHLQLWV
FRQWH[WDQGXQGHUDOOWKHFLUFXPVWDQFHVWKH$OOHQFKDUJHLQ
WKHLQVWDQWFDVHZDVLPSHUPLVVLEO\FRHUFLYH
  0RUHRYHU WKH $OOHQ FKDUJH LQ IDFW SUHMXGLFHG 3HWLWLRQHU
ZKHUH WKH MXU\ ZDV WROG LW KDG WR XQDQLPRXVO\ DJUHH RQ
ZKHWKHUWRLPSRVHRUUHMHFWWKHGHDWKVHQWHQFHEHIRUHLWFRXOG
FRQVLGHUDOLIHVHQWHQFH+HUHDQ\MXURULQWKHPLQRULW\ZKR
ZDVKROGLQJRXWIRUOLIHKDGDEVROXWHO\QRZD\RINQRZLQJ
WKDWKHRUVKHFRXOGKDYHLQIDFWSUHYHQWHGWKHLPSRVLWLRQRI
WKHGHDWKSHQDOW\&RQWUDU\WR5HVSRQGHQWjVDUJXPHQWWKH
IDFW WKDW WKH MXU\ GHOLEHUDWHG IRU DSSUR[LPDWHO\ IRXU KRXUV
DIWHU WKH $OOHQ FKDUJH EHIRUH UHWXUQLQJ D YHUGLFW DQG WKDW
3HWLWLRQHUjV FRXQVHO IDLOHG WR REMHFW GRHV QRW QHJDWH WKH
SUHMXGLFH LQ WKLV FDVH  6HH 6PDOOV  )G DW 
FRQFOXGLQJWKDWmWKHOHQJWKRIGHOLEHUDWLRQVLQWKLVFDVHGLG
QRW GLPLQLVK WKH FRHUFLYHQHVV RI WKH VXSSOHPHQWDO MXU\
FKDUJHlZKHUHmWKHMXU\FKDUJHIDLOHGWRLQIRUPWKHMXURUV
RI WKHSRVVLELOLW\WKDWWKH\FRXOGUHPDLQGHDGORFNHGUDWKHU
WKDQ VXUUHQGHU WKHLU FRQVFLHQWLRXVO\ KHOG EHOLHIV  8QOLNH
/RZHQILHOGUHOLHGRQE\ERWKWKHPDMRULW\DQG5HVSRQGHQWRQ
WKLVSRLQWWKHSUHMXGLFHKHUHLVFOHDU:KHUHDVWKHORQHMXURU
LQ /RZHQILHOG NQHZ WKH SRZHU RI KLV RU KHU YRWHWKH MXU\
    +HQGHUVRQY&ROOLQV                   1RV        1RV                         +HQGHUVRQY&ROOLQV          

                       BBBBBBBBBBBBBB                                   FRQMXQFWLRQ ZLWK WKH FRXUWjV LPPHGLDWHO\ SUHFHGLQJ
                                                                        UHPDUNV DERXW SULGH SUHYHQWLQJ RQH IURP UHYLVLWLQJ D
                          ',66(17                                       SRVLWLRQ SUHYLRXVO\ WDNHQ LW LV UHDVRQDEOH WR FRQFOXGH
                       BBBBBBBBBBBBBB                                   WKDWVXFKUHPDUNVZRXOGZHLJKPRUHKHDYLO\RQWKRVH
                                                                        MXURUVWDNLQJDVWDQFHFRQWUDU\WRWKDWRIWKHPDMRULW\RI
   &/$< &LUFXLW sXGJH GLVVHQWLQJ  &RQWUDU\ WR WKH             WKHLUSHHUV
PDMRULW\jV RSLQLRQ LQ LWV FRQWH[W DQG XQGHU DOO WKH
FLUFXPVWDQFHV WKH $OOHQ FKDUJH JLYHQ WR 3HWLWLRQHUjV            )G DW   9LHZLQJ WKH $OOHQ FKDUJH mIURP WKH
GHDGORFNHGGHDWKSHQDOW\SKDVHMXU\ZDVXQGXO\FRHUFLYHDQG          SHUVSHFWLYHRIDMXURULQWKHPLQRULW\EHFDXVHµWKH\DOZD\V
GHSULYHG3HWLWLRQHURIWKHIDLUWULDOKHLVGXHXQGHUWKH6L[WK       NQRZ WKHLU PLQRULW\ VWDWXV DQG LI IHDUIXOO\ LQFOLQHG PD\
$PHQGPHQW)XUWKHUPRUHWKHGLVWULFWFRXUWHUUHGLQIDLOLQJ          SUHVXPDEO\VXVSHFWDGLVJUXQWOHGMXGJHFDQILQGWKHPRXWl
WR JUDQW WKH ZULW RI KDEHDV FRUSXV RQ WKH JURXQGV WKDW      WKH FRXUW FRQFOXGHG WKDW WKH VXSSOHPHQWDO FKDUJH ZDV
3HWLWLRQHUZDVGHQLHGHIIHFWLYHDVVLVWDQFHRIDSSHOODWHFRXQVHO       FRHUFLYH  ,G  7KH FRXUW IXUWKHU FRQFOXGHG WKDW m>W@KH
JXDUDQWHHG E\ WKH 6L[WK $PHQGPHQW  3HWLWLRQHU ZDV DOVR       TXDOLI\LQJVWDWHPHQWVVSULQNOHGLQWRWKHFRXUWjVFKDUJHVXFK
GHQLHGDIDLUWULDOE\WKHDFTXLWWDOILUVWLQVWUXFWLRQJLYHQKLV      DVµLWLVQRWP\GXW\WRWU\DQGFRHUFH\RXjDQGµ,jPQRWDVNLQJ
MXU\GXULQJWKHSHQDOW\SKDVHRIKLVWULDO)RUWKHVHUHDVRQV       DQ\ERG\WRJLYHXSDILUPO\KHOGEHOLHIjZHUHQRWVXIILFLHQWWR
,UHVSHFWIXOO\GLVVHQW                                               UHPHG\WKHKDUPGRQHl,G
   3HWLWLRQHU UDLVHG WZHQW\VHYHQ JURXQGV IRU UHOLHI LQ KLV       /LNH sHQNLQV DQG %XUJRV WKH FOHDU LPSRUW RI WKH WULDO
KDEHDVSHWLWLRQ$PRQJRWKHUFODLPV3HWLWLRQHUDVVHUWHGWKDW        FRXUWjVLQVWUXFWLRQVDGPRQLVKLQJWKHMXU\WKDWLWKDGDGXW\WR
WKH$OOHQFKDUJHJLYHQWRWKHMXU\GXULQJWKHSHQDOW\SKDVH       DJUHHWKDW DOO WZHOYH MXURUV PXVW DJUHH ZKHWKHU WR
RIWKHWULDOZDVFRHUFLYHDQGYLRODWHGKLVULJKWWRDIDLUWULDO      UHFRPPHQGRUQRWUHFRPPHQGGHDWKEHIRUHLWFRXOGFRQVLGHU
XQGHU WKH 6L[WK $PHQGPHQW  KH ZDV GHQLHG HIIHFWLYH        OLIHRUWKDWWKHMXURUVVKRXOGQRWGLVDJUHHEHFDXVHRImPHUH
DVVLVWDQFHRIDSSHOODWHFRXQVHODQGWKHSUHOLPLQDU\MXU\         VWXEERUQQHVVl ZDV WR XUJH WKH MXURUV LQ WKH PLQRULW\ WR
LQVWUXFWLRQJLYHQGXULQJWKHSHQDOW\SKDVHRIKLVWULDOUHIHUUHG     FRQVLGHU DQG DJUHH ZLWK WKH PDMRULW\jV SRVLWLRQ WKH
WR DV DQ DFTXLWWDOILUVW LQVWUXFWLRQ YLRODWHG 2KLR ODZ DQG   LQVWUXFWLRQVZRXOGFOHDUO\ZHLJKPRUHKHDYLO\RQDMXURULQ
GHQLHGKLPDIDLUWULDO7KHGLVWULFWFRXUWJUDQWHGWKHZULWRI      WKHPLQRULW\WKDQLQWKHPDMRULW\,QWKHLQVWDQWFDVHWKHWULDO
KDEHDVFRUSXVRQWKHEDVLVRI3HWLWLRQHUjVFODLPWKDWWKH$OOHQ       FRXUWjV VWDWHPHQWV WKDW WKH MXU\ KDG D GXW\ WR DJUHH LV
FKDUJHJLYHQLQKLVFDVHZDVFRHUFLYH+RZHYHUWKHGLVWULFW         V\QRQ\PRXVZLWKWKHWULDOFRXUWjVLQVWUXFWLRQLQsHQNLQVWKDW
FRXUWGHQLHGUHOLHIDVWR3HWLWLRQHUjVFODLPWKDWKHUHFHLYHG         WKHMXU\KDGWRUHDFKDGHFLVLRQLQWKDWFDVHZKLFKZDVIRXQG
LQHIIHFWLYHDVVLVWDQFHRIDSSHOODWHFRXQVHOKLVFODLPWKDWWKH       WREHFRHUFLYHE\WKH6XSUHPH&RXUW
SUHOLPLQDU\MXU\LQVWUXFWLRQGHQLHGKLPDULJKWWRDIDLUWULDO
DQG RQ DOO RWKHU JURXQGV  ,Q &DVH 1R  WKH
JRYHUQPHQWQRZDSSHDOVWKHGLVWULFWFRXUWjVRUGHUJUDQWLQJ
3HWLWLRQHUjVDSSOLFDWLRQIRUWKHZULW,Q&DVH1R              
                                                                            7KH PDMRULW\ DOVR UHOLHV RQ WKLV &RXUWjV GHFLVLRQ LQ :LOOLDPV Y
3HWLWLRQHUDSSHDOVWKHGLVWULFWFRXUWjVRUGHUWRWKHH[WHQWWKDW      3DUNH   )G  WK &LU  LQ DUJXLQJ WKDW WKH $OOHQ FKDUJH LQ
LWGLVPLVVHGKLVSHWLWLRQDVWRDOORWKHUJURXQGVIRUUHOLHI         WKH LQVWDQW FDVH ZDV QRW FRHUFLYH +RZHYHU NH\ WR WKLV &RXUWjV GHFLVLRQ
                                                                      LQ :LOOLDPV ZDV WKDW WKH $OOHQ FKDUJH LQ WKDW FDVH mGLG QRW VXJJHVW WKDW WKH
                                                                      MXU\ ZDV UHTXLUHG WR DJUHHl  )G DW  GLVWLQJXLVKLQJ WKH      $OOHQ
                                                                      FKDUJH LQ WKDW FDVH IURP WKH    $OOHQ  FKDUJH LQ  sHQNLQV  ,Q WKLV FDVH
                                                                      KRZHYHU WKH WULDO FRXUW FOHDUO\ WROG WKH MXURUV WKDW WKH\ KDG D GXW\ WR
                                                                      DJUHHWKDW WKH\ ZHUH UHTXLUHG WR DJUHH
    +HQGHUVRQY&ROOLQV                     1RV         1RV                     +HQGHUVRQY&ROOLQV        

$IWHUGHOLEHUDWLQJIRUDOPRVWIRXUWHHQKRXUVDIXOODIWHUQRRQ          ,7KH$OOHQ&KDUJH
ZHOOLQWRWKHHYHQLQJDQGDOOPRUQLQJWKHMXU\UHWXUQHGWR
FRXUWDQGGHOLYHUHGDQRWHVWDWLQJLWZDVmGHDGORFNHGSHULRGl            :LWK UHVSHFW WR &DVH 1R  WKH GLVWULFW FRXUW
7KHMXU\GLGQRWDVNIRUIXUWKHULQVWUXFWLRQVRULQWLPDWHWKDW           FRQFOXGHG WKDW 3HWLWLRQHU KDG EHHQ GHSULYHG RI D IDLU WULDO
IXUWKHU GHOLEHUDWLRQV ZHUH QHFHVVDU\ DV GLG WKH MXU\ LQ          ZKHQ WKH VWDWH WULDO FRXUW JDYH DQ XQGXO\ FRHUFLYH $OOHQ
/RZHQILHOGWKHMXU\LQVWHDGXQHTXLYRFDOO\VWDWHGWKDWLWZDV            FKDUJHWR3HWLWLRQHUjVGHDGORFNHGGHDWKSHQDOW\SKDVHMXU\LQ
DWDQLPSDVVH7KHWULDOFRXUWWKHUHDIWHUWROGWKHMXU\WKDWLW         YLRODWLRQRIWKH6L[WK$PHQGPHQW7KHPDMRULW\HUURQHRXVO\
GLGQRWEHOLHYHWKDWLWZDVGHDGORFNHG7KHWULDOFRXUWWROGWKH        UHYHUVHVWKHGLVWULFWFRXUWjVRUGHUJUDQWLQJWKHZULWRIKDEHDV
MXU\ WR FRQWLQXH GHOLEHUDWLRQ  ,Q VR GRLQJ WKH WULDO FRXUW   FRUSXV
UHPLQGHGWKHMXURUVWKDWWKH\WRRNDQRDWKDQGWKDWWKH\KDG
D GXW\ WR DJUHH  7KH FRXUW IXUWKHU VWDWHG WKDW WKH MXURUV                                     $
mVKRXOGQRWUHIXVHWRDJUHHEHFDXVHRIPHUHVWXEERUQQHVVlD
VWDWHPHQWWKDWZRXOGWHQGWRZHLJKPRUHKHDYLO\RQMXURUV                   7KH PDMRULW\ RSLQLRQ ZLWK UHVSHFW WR WKLV FODLP LV
IDYRULQJ D OLIH VHQWHQFH UDWKHU WKDQ D GHDWK VHQWHQFH ZKHQ      IXQGDPHQWDOO\DQGIDWDOO\IODZHGLQWZRUHVSHFWV)LUVWWKH
VXFK MXURUV DUH LQ WKH PLQRULW\  $IWHU EHLQJ LQVWUXFWHG WR    PDMRULW\LJQRUHVWKHPDQGDWHRIsHQNLQVY8QLWHG6WDWHV
FRQWLQXHWRGHOLEHUDWHWKHMXU\UHWXUQHGDVHQWHQFHRIGHDWKE\         86ZKLFKUHTXLUHVWKDWWKHFRXUWFRQVLGHU
WKHFORVHRIWKHEXVLQHVVGD\DURXQGSP                          WKH $OOHQ FKDUJH mLQ LWV FRQWH[W DQG XQGHU DOO WKH
                                                                         FLUFXPVWDQFHVlLQGHWHUPLQLQJZKHWKHUWKHVXSSOHPHQWDOMXU\
  7KLVFDVHLVRQSDUZLWKsHQNLQV86DQG             FKDUJHZDVFRHUFLYH6HFRQGWKHPDMRULW\LJQRUHVWKHWUXH
8QLWHG6WDWHVY%XUJRV)G)GWK&LU,Q           LPSRUWRIWKH$OOHQFKDUJHJLYHQLQWKLVFDVHGXHLQSDUWWRD
sHQNLQVWKHMXU\FRPPXQLFDWHGWRWKHFRXUWWKDWLWFRXOGQRW            PLVSODFHG UHOLDQFH RQ /RZHQILHOG Y 3KHOSV  86 
DJUHH RQ D YHUGLFW DQG WKH FRXUW LQVWUXFWHG WKH MXU\ WKDW    (DFKLVVXHZLOOEHDGGUHVVHGLQWXUQ
m>\@RXKDYHJRWWRUHDFKDGHFLVLRQLQWKLVFDVHl86DW
7KH6XSUHPH&RXUWKHOGWKDWWKHWULDOFRXUWjVLQVWUXFWLRQ             $OWKRXJKWKHPDMRULW\LVmUHOXFWDQWlWRDFFRUGPXFKZHLJKW
KDG mWKH FRHUFLYH HIIHFW DWWULEXWHG WR LWl DQG ZDV               WRWKHSUHOLPLQDU\LQVWUXFWLRQVJLYHQWKHGHDWKSHQDOW\SKDVH
XQFRQVWLWXWLRQDO,G                                                   MXU\WKHVHSUHOLPLQDU\LQVWUXFWLRQVFRQVWLWXWHSDUWRIWKHYHU\
                                                                         mFLUFXPVWDQFHVlDQGmFRQWH[WlXQGHUZKLFKWKHVXEVHTXHQW
  6LPLODUO\ LQ %XUJRV WKH )RXUWK &LUFXLW KHOG WKDW D           $OOHQ FKDUJH ZDV JLYHQ DQG WKXV PXVW EH FRQVLGHUHG LQ
VXSSOHPHQWDO FKDUJH WR D GHDGORFNHG MXU\ ZDV FRHUFLYH            GHWHUPLQLQJ ZKHWKHU WKH $OOHQ FKDUJH ZDV FRHUFLYH  7KH
7KHUHWKHFRXUWVWDWHGWKDWWKHSUHMXGLFHRIDQ$OOHQFKDUJH            PDMRULW\jV IDLOXUH WR FRQVLGHU WKH $OOHQ FKDUJH XQGHU WKH
FDQDULVHIURPHYHQVXEWOHVWDWHPHQWV,Q%XUJRVWKHFRXUW             FRQWH[WRIWKHHDUOLHUSUHOLPLQDU\LQVWUXFWLRQVFRQWUDYHQHVWKH
QRWHG                                                                   6XSUHPH&RXUWjVPDQGDWHLQsHQNLQV6HH6PDOOVY%DWLVWD
                                                                         )GG&LUKROGLQJWKDW$OOHQFKDUJH
  >D@OWKRXJK WKH GLVWULFW FRXUW MXGJH VWDWHG WKDW m,jP QRW       ZDVFRHUFLYHDIWHUH[DPLQLQJFKDUJHmDVDSDUWRIWKHZKROH
  DVNLQJ DQ\ERG\ WR JLYH XS D ILUPO\ KHOG EHOLHI  <RX         LQVWUXFWLRQ DQG LQGHHG DV SDUW RI DOO WKH SURFHHGLQJV WKDW
  GRQjWKDYHWRGRWKDWlKLVYHU\QH[WVWDWHPHQWZDVm>E@XW             ZHUHREVHUYHGE\WKHMXU\lFLWDWLRQDQGLQWHUQDOTXRWDWLRQ
  ,GRDVN\RXWRWKLQNDERXWLWl7KHFOHDULPSOLFDWLRQRI             PDUNVRPLWWHG8QLWHG6WDWHVY7LQHV)GWK
  WKHFRXUWjVUHPDUNLVWKDWMXURUVVKRXOGWKLQNDERXWJLYLQJ            &LUFRQFOXGLQJWKDWZKHQYLHZLQJMXU\LQVWUXFWLRQVDV
  XSWKHLUILUPO\KHOGEHOLHIV5HJDUGOHVVRIWKHGLVWULFW              D ZKROH $OOHQ FKDUJH ZDV QRW FRHUFLYH 8QLWHG 6WDWHV Y
  FRXUWjV LQWHQWLRQV ZKHQ WKHVH WKUHH OLQHV DUH UHDG LQ         :DXQHND)GWK&LUVDPH8QLWHG
                                                                         6WDWHVY/D5LFKH)GWK&LU
    +HQGHUVRQY&ROOLQV                    1RV        1RV                   +HQGHUVRQY&ROOLQV       

UHO\LQJRQHDUOLHULQVWUXFWLRQIURPWULDOFRXUWDVZHOODVRWKHU        WRZHOODQGWUXO\WU\LQWUXHGHOLYHUDQFHPDNHEHWZHHQWKH
FLUFXPVWDQFHVLQZKLFK$OOHQFKDUJHZDVJLYHQWRFRQFOXGH                6WDWHRI2KLRDQGWKHGHIHQGDQWsHURPH+HQGHUVRQ7KLV
WKDW$OOHQFKDUJHZDVQRWLPSHUPLVVLEOH                                PHDQV WKDW \RXU YHUGLFW \RXU UHFRPPHQGDWLRQ LQ WKLV
                                                                         SHQDOW\KHDULQJPXVWEHEDVHGRQWKHHYLGHQFHWKDW\RX
  ,QDQHIIRUWWRMXVWLI\ZK\LWVKRXOGQRWFRQVLGHUWKH$OOHQ           UHFHLYHGLQWKLVFRXUWURRP
FKDUJHmXQGHUDOOFLUFXPVWDQFHVlLQFOXGLQJLQWKHFRQWH[WRI            <RXPD\QRWFRQVLGHUV\PSDWK\ELDVRUSUHMXGLFH$QG
WKH HDUOLHU SUHOLPLQDU\ LQVWUXFWLRQV WKH PDMRULW\ DOVR            PD\,VD\\RXPD\QRWJXHVVDVWRSRVVLELOLWLHVRXWVLGHRI
HUURQHRXVO\FRQFOXGHVWKDWWKHSUHOLPLQDU\LQVWUXFWLRQGLGQRW           WKHHYLGHQFHWKDW\RXKHDUGLQWKLVFRXUWURRP<RXPXVW
PLVVWDWHRUYLRODWH2KLRODZGHVSLWHWKHKROGLQJRI6WDWHY            DQG\RXKDYHWRGHFLGHWKHLVVXHVWKDW
V>VLF@LQIURQWRI
%URRNV1(G2KLR,Q%URRNVWKHFRXUW               \RXLQWKLVFDVHRQO\RQWKHHYLGHQFHWKDW\RXKHDUGLQ
KHOGWKDWDVHQWHQFLQJSKDVHMXU\LQVWUXFWLRQWKDWUHTXLUHGD            WKLVFRXUWURRP
MXU\ WR XQDQLPRXVO\ UHMHFW WKH GHDWK SHQDOW\ EHIRUH LW           <RXDOONQRZWKDWIRUWKHSXUSRVHRIUHWXUQLQJDYHUGLFW
FRQVLGHUHG D OLIH VHQWHQFH ZDV HUURQHRXV LQ OLJKW RI 2KLR       DWWKLVWLPHDOOWZHOYHRI\RXPXVWDJUHH$QG\RXKDYH
5HYLVHG&RGH'ZKLFKSURYLGHVLQSHUWLQHQW                DGXW\WRDJUHHLILWLVDWDOOSRVVLEOH
SDUW                                                                    1RZ ZKHQ \RX WDON WR HDFK RWKHU LQ WKDW MXU\ URRP
                                                                         REYLRXVO\HDFKRQHRI\RXVKRXOGSD\WKHSURSHUUHVSHFW
  ,I WKH WULDO MXU\ XQDQLPRXVO\ ILQGV E\ SURRI EH\RQG D        WR WKH RWKHU SHUVRQ
V RSLQLRQ $QG LI \RX GR KDYH
  UHDVRQDEOHGRXEWWKDWWKHDJJUDYDWLQJFLUFXPVWDQFHVWKH               GLIIHUHQFHV\RXVKRXOGH[DPLQHWKRVHGLIIHUHQFHVLQWKH
  RIIHQGHUZDVIRXQGJXLOW\RIFRPPLWWLQJRXWZHLJKWKH                   VSLULWRIKRQHVW\DQGIDLUQHVV
  PLWLJDWLQJIDFWRUVWKHWULDOMXU\VKDOOUHFRPPHQGWRWKH              ,
PQRWVXJJHVWLQJE\DQ\VWUHWFKRIWKHLPDJLQDWLRQWKDW
  FRXUW WKDW WKH VHQWHQFH RI GHDWK EH LPSRVHG RQ WKH            DQ\RQHRI\RXVKRXOGJLYHXSDZHOOJURXQGHGRSLQLRQ
  RIIHQGHU  $EVHQW VXFK D ILQGLQJ WKH MXU\ VKDOO               RUWR>VLF@YLRODWH\RXURDWK%XWLWGRHVPHDQWKDWMXURUV
  UHFRPPHQG WKDW WKH RIIHQGHU EH VHQWHQFHG WR RQH RI             VKRXOGQRWUHIXVHWRDJUHHEHFDXVHRIPHUHVWXEERUQQHVV
  >WKUHHOLIHVHQWHQFHV@                                         (DFKRQHRI\RXVKRXOGH[DPLQHWKHIDFWVIURP\RXURZQ
                                                                         YLHZSRLQWDQGIURPWKHYLHZSRLQWRIRWKHUMXURUV
2KLR 5HY &RGH  ' HPSKDVLV DGGHG  7KH            1RZWKHYHUGLFWRIWKHMXU\REYLRXVO\VKRXOGUHSUHVHQW
FRXUW UHDIILUPHG WKDW VHFWLRQ ' mFRQWDLQV QR           WKHRSLQLRQRIHDFKRQHRI\RX%XWWKLVGRHVQ
WPHDQWKDW
OLPLWLQJODQJXDJHDVWRZKHQDMXU\PD\FRQWHPSODWHDOLIH               \RXFDQ
WFKDQJH\RXURSLQLRQVFKDQJLQJWKHPE\WDONLQJ
VHQWHQFHl  %URRNV  1(G DW   %XW WKH MXU\          WR HDFK RWKHU EHFDXVH WKH YHU\ REMHFW RI WKLV ZKROH
LQVWUXFWLRQWKDWZDVJLYHQHUURQHRXVO\mUHTXLUHGWKHMXU\WR             V\VWHP LV WR UHDFK DQ DJUHHPHQW E\ HDFK RQH RI \RX
LVVXHDGHDWKVHQWHQFHXQOHVVHDFKMXURUZDVFRQYLQFHGWKDW              FRPSDULQJ\RXUGLIIHUHQWYLHZV
WKHGHDWKSHQDOW\ZDVLQDSSURSULDWHl,G7KHFRXUWVWDWHG             6R,GRQ
WWKLQN\RX
UHGHDGORFNHG<RXJREDFNWKHUH
WKDWmWKHMXU\LQWKLVFDVHGLGQRWKDYHWRUXOHRXWWKHGHDWK           DQGWDONLWRYHU
SHQDOW\ XQDQLPRXVO\ EHIRUH FRQVLGHULQJ D OLIH VHQWHQFH
8QIRUWXQDWHO\WKH\ZHUHLQVWUXFWHGH[DFWO\RWKHUZLVHl,G           s$DW
:KLOHWKH%URRNVFRXUWRQO\SURVSHFWLYHO\UHTXLUHGWKDWDQ
LQVWUXFWLRQ EH JLYHQ WR D MXU\ WKDW D VROLWDU\ MXURU FRXOG     $VVWDWHGDERYHWKHMXU\KDGEHHQWROGLQWKHSUHOLPLQDU\
SUHYHQW WKH LPSRVLWLRQ RI WKH GHDWK SHQDOW\ WKH FRXUW         LQVWUXFWLRQVWKDWLWKDGWRUHFRPPHQGRUQRWUHFRPPHQGGHDWK
QHYHUWKHOHVV FRQFOXGHG WKDW WKH RXWFRPH RI WKH VHQWHQFLQJ       EHIRUHLWFRXOGFRQVLGHUHLWKHURIWKHOLIHVHQWHQFHVDQGWKDWLWV
SKDVHRIWKHWULDOZDVXQGHUPLQHGE\WKHHUURQHRXVLQVWUXFWLRQ         UHFRPPHQGDWLRQ ZKDWHYHU LW ZDV KDG WR EH XQDQLPRXV
    +HQGHUVRQY&ROOLQV                    1RV        1RV                      +HQGHUVRQY&ROOLQV         

GLG QRW NQRZ WKH QXPHULFDO GLYLVLRQ RI WKH MXU\ DQG WKH     DQGWKXVWKHGHIHQGDQWjVFRQVWLWXWLRQDOULJKWWRDIDLUWULDOKDG
ODQJXDJHRIWKHLQVWUXFWLRQWKH/RZHQILHOG&RXUWKHOGWKDWWKH        EHHQYLRODWHG,GDW7KHFRXUWVWDWHG
LQVWUXFWLRQLQWKDWFDVHZDVQRWFRHUFLYHl
                                                                         :HFDQQRWNQRZZKDWZDVJRLQJRQLQWKHPLQGVRIWKH
                                %                                       MXURUVZKHQWKH\ZHUHJLYHQWKHGXW\RIGHFLGLQJ>WKH
                                                                         GHIHQGDQWjV@ IDWH DQG ZH WKXV FDQQRW VD\ IRU FHUWDLQ
  8QGHU FHUWDLQ FLUFXPVWDQFHV DQG ZLWK VRPH FKDQJHV LQ            ZKHWKHU RQH RI WKH MXURUV ZRXOG KDYH EHHQ PRYHG
ODQJXDJHDQ$OOHQFKDUJHPLJKWKDYHEHHQDSSURSULDWHLQWKLV            HQRXJKE\WKHPLWLJDWLQJIDFWRUVLQ%URRNjVIDYRUWR
FDVH+RZHYHULQLWVFRQWH[WDQGXQGHUDOOWKHFLUFXPVWDQFHV          KDYHUHFRPPHQGHGDOLIHVHQWHQFH7KHUHFRUGUHIOHFWV
LQFOXGLQJ WKH SUHOLPLQDU\ LQVWUXFWLRQV DQG WKH PHVVDJH WKH        WKDW WKH MXU\ LQ WKLV FDVH ZDV LQVWUXFWHG LQ D PDQQHU
MXU\FRQYH\HGWRWKHFRXUWWKH$OOHQFKDUJHLQWKLVFDVHZDV            FRPSOHWHO\ FRQWUDU\ WR ODZ PDNLQJ LW OHVV OLNHO\ IRU
XQGXO\FRHUFLYHDQGWKHUHIRUHGHQLHG3HWLWLRQHUDIDLUSHQDOW\          %URRNVWREHQHILWIURPWKHRSLQLRQRIRQHMXURUWKDWGHDWK
SKDVH WULDO DV UHTXLUHG XQGHU WKH 6L[WK $PHQGPHQW  6HH         ZDVLQDSSURSULDWH$VWKH.XEDWFRXUWQRWHGLIDMXURU
/RZHQILHOG86DWm$Q\FULPLQDOGHIHQGDQWDQG                EHOLHYHGKLVRQHYRWHFRXOGQRWDIIHFWWKHXOWLPDWHUHVXOW
HVSHFLDOO\ DQ\ FDSLWDO GHIHQGDQW EHLQJ WULHG E\ D MXU\ LV      KHPLJKWDFTXLHVFHLQWKHGHDWKVHQWHQFH,QWKLVFDVH
HQWLWOHGWRWKHXQFRHUFHGYHUGLFWRIWKDWERG\l                       WKHMXU\LQVWUXFWLRQXQGHUPLQHGWKHUHOLDELOLW\RIWKHMXU\
                                                                         YHUGLFW DQG ULVNHG HUURQHRXV LPSRVLWLRQ RI WKH GHDWK
  7KHFLUFXPVWDQFHVXQGHUZKLFKWKH$OOHQFKDUJHZDVJLYHQ               VHQWHQFHWKHUHE\PDWHULDOO\SUHMXGLFLQJ%URRNjVULJKWWR
DUHDVIROORZV7KHSHQDOW\SKDVHLQ3HWLWLRQHUjVWULDO ZDV            DIDLUWULDO
KHOG RQ :HGQHVGD\ sXO\    3ULRU WR WKH MXU\jV
GHOLEHUDWLRQ LQ WKH SHQDOW\ SKDVH WKH WULDO FRXUW JDYH WKH   ,G7KHFRXUWWKHUHIRUHUHYHUVHGWKHLPSRVLWLRQRIWKHGHDWK
DIRUHPHQWLRQHGSUHOLPLQDU\LQVWUXFWLRQ7KHFRXUWWKHUHDIWHU          VHQWHQFHDQGRUGHUHGWKDWWKHGHIHQGDQWEHUHVHQWHQFHG,G
UHDGWKHSRVVLEOHMXU\YHUGLFWIRUPVLQRUGHUEHJLQQLQJZLWK
GHDWKWKHQWKLUW\WROLIHDQGILQDOO\WZHQW\WROLIH7KHWULDO         7KHPDMRULW\LQWKHLQVWDQWFDVHLJQRUHVWKHFOHDUKROGLQJRI
FRXUWKRZHYHUGLGQRWJLYHWKHWUDGLWLRQDOLQVWUXFWLRQWKDWWKH      %URRNV  7R GR VR WKH PDMRULW\ UHOLHV RQ GLFWD LQ 6FRWW Y
MXU\VKRXOGDWWDFKQRVLJQLILFDQFHWRWKHRUGHULQZKLFKWKH           0LWFKHOO)GWK&LU,Q6FRWWWKH&RXUW
LQVWUXFWLRQVZHUHJLYHQ7KHWULDOFRXUWWKHQUHPLQGHGWKH            GHWHUPLQHGWKDWWKHSHWLWLRQHUKDGSURFHGXUDOO\GHIDXOWHGKLV
MXU\WKDWDOOWZHOYHMXURUVPXVWDJUHHRQZKDWHYHUGHFLVLRQ            FODLPWKDWKLVGHDWKSHQDOW\SKDVHMXU\ZDVLPSURSHUO\JLYHQ
WKH\PDGH                                                             DXQDQLPLW\LQVWUXFWLRQDQGWKXVWKH&RXUWFRXOGQRWFRQVLGHU
                                                                       WKH FODLP RQ LWV PHULWV   )G DW   7KH &RXUW
  7KHMXU\EHJDQGHOLEHUDWLQJDWSPRQWKHGD\RIWKH          QHYHUWKHOHVVSURFHHGHGLQGLFWDWRFRQVLGHUWKHPHULWVRIWKH
VHQWHQFLQJ KHDULQJ  7KH MXU\ WRRN D EUHDN IRU GLQQHU DQG    FODLPDQGFRQFOXGHGWKDWDQLQVWUXFWLRQZKLFKFKDUJHGWKDW
WKHUHDIWHU FRQWLQXHG GHOLEHUDWLQJ XQWLO  SP ZKHQ WKH     WKH MXU\ PXVW XQDQLPRXVO\ ILQG WKH GHDWK VHQWHQFH WR EH
MXU\DGMRXUQHGIRUWKHQLJKW'HOLEHUDWLRQVFRQWLQXHGDW         LQDSSURSULDWHEHIRUHLWFRQVLGHUHGLPSRVLQJDOLIHVHQWHQFHDQ
DP WKH IROORZLQJ PRUQLQJ  $QG DW  SP WKH MXU\      LQVWUXFWLRQFRQWUDU\WRVHFWLRQ'GLGQRWGHSULYH
FRPPXQLFDWHGWKHIROORZLQJPHVVDJHWRWKHFRXUWm:HDUH              WKHSHWLWLRQHURIDIDLUWULDO,GDW
GHDGORFNHGSHULRGls$DW$WWKLVSRLQWWKHWULDO
FRXUWLQVWUXFWHGWKHMXU\DVIROORZV                                  ,QUHDFKLQJWKLVFRQFOXVLRQWKH6FRWW&RXUWDWWHPSWHGWR
                                                                       QHJDWHWKLV&RXUWjVGHFLVLRQLQ0DSHVY&R\OH)G
  :HOOOHWPHMXVWVD\WKLVWRDOORI\RX,ZDQWWRUHPLQG           WK &LU  LQVRIDU DV LW FRQFOXGHG LQ GLFWD WKDW DQ
  HDFKRI\RXWKDW\RXDOOWRRNDQRDWKDQGWKDWRDWKZDV             LQVWUXFWLRQUHTXLULQJWKDWDMXU\XQDQLPRXVO\UHMHFWDGHDWK
    +HQGHUVRQY&ROOLQV                      1RV         1RV                     +HQGHUVRQY&ROOLQV         

VHQWHQFHEHIRUHFRQVLGHULQJOLIHZDVDQWLWKHWLFDOWR2KLRODZ            ZRXOGLPSRVHDVHQWHQFHRIOLIH LPSULVRQPHQWZLWKRXWWKH
6FRWW)GDWUHMHFWLQJ0DSHV5HO\LQJRQ%URRNV             SRVVLELOLW\RISUREDWLRQSDUROHRUVXVSHQVLRQRIVHQWHQFHl
WKH0DSHV&RXUWFRQFOXGHG                                                86DW6HFRQGLQWKLVFDVHWKHMXU\WROGWKHFRXUW
                                                                          WKDWLWZDVmGHDGORFNHGSHULRGlDQGGLGQRWUHTXHVWIXUWKHU
  >D@OWKRXJK WKH WULDO FRXUW LQ WKLV FDVH GLG QRW KDYH WKH      LQVWUXFWLRQVs$DWHPSKDVLVDGGHG,Q/RZHQILHOG
  EHQHILWRI%URRNVWKDWFDVHFOHDUO\HVWDEOLVKHVWKDWWKH               KRZHYHUWKHMXU\LQWKDWFDVHWROGWKHFRXUWLWZDVmXQDEOHWR
  WULDO FRXUW PLVDSSOLHG 2KLR 5HYLVHG &RGH                           UHDFKDGHFLVLRQDWWKDWWLPHDQGUHTXHVW>HG@WKDWWKHFRXUW
   ' E\ UHTXLULQJ WKH MXU\ WR XQDQLPRXVO\             DJDLQDGYLVHWKHMXU\DVWRLWVUHVSRQVLELOLWLHVl86DW
  UHMHFW WKH GHDWK SHQDOW\ EHIRUH FRQVLGHULQJ D OLIH               HPSKDVLVDGGHG7KLUGWKHWULDOFRXUWLQ3HWLWLRQHUjV
  VHQWHQFH                                                               FDVHDJDLQLQVWUXFWHGWKHMXU\WKDWLWKDGWRUHDFKDXQDQLPRXV
                                                                          GHFLVLRQWKHWULDOFRXUWLQVWUXFWHGWKHGHDGORFNHGMXU\mWKDW
)GDW7KH6FRWW&RXUWUHMHFWHG0DSHVEDVHGRQ              IRUWKHSXUSRVHRIUHWXUQLQJDYHUGLFWDWWKLVWLPHDOOWZHOYHRI
LWVUHDGLQJRIWKLV&RXUWjVGHFLVLRQLQ&RHY%HOO)G             \RXPXVWDJUHHls$DWHPSKDVLVDGGHG$OWKRXJK
WK&LU+RZHYHU&RHVKRXOGQRWEHUHJDUGHGDV              WKLVLQVWUXFWLRQPLJKWRUGLQDULO\EHDFFHSWDEOHIRULQFOXVLRQLQ
FRQWUROOLQJLQ6FRWW0DSHVRUWKHFDVHFXUUHQWO\EHIRUHWKH             DQ $OOHQ FKDUJH LW LV WURXEOLQJ ZKHQ JLYHQ DV D SDUW RI D
&RXUWLQDVPXFKDVWKH&RHGHFLVLRQKHOGWKDWWKHXQDQLPLW\               FKDUJH ZKHUH WKH MXU\ LV OHDG WR EHOLHYH WKDW LW PXVW
LQVWUXFWLRQ LQ WKDW FDVH ZDV JLYHQ LQ FRPSOLDQFH ZLWK             XQDQLPRXVO\UHVROYHWKHLVVXHRIGHDWKEHIRUHFRQVLGHULQJD
7HQQHVVHH ODZ DQG WKDW m>W@KH VWDWH ODZ GLG QRW                   OLIH VHQWHQFH  ,Q D VWDUN FRQWUDVW ZKHQ WKH FRXUW LQ
XQFRQVWLWXWLRQDOO\GHFHLYHWKHMXU\DQGLQIHFWWKHYHUGLFWLQ             /RZHQILHOGJDYHWKHMXU\WKHVXSSOHPHQWDOLQVWUXFWLRQLWDJDLQ
WKLVFDVHZLWKXQUHOLDELOLW\l,GDW+HUHWKHUHLVD      UHPLQGHG WKH MXU\ WKDW LI LW FRXOG QRW UHDFK D XQDQLPRXV
FOHDUGHFLVLRQIURPWKH2KLR6XSUHPH&RXUWLQGLFDWLQJWKDWDQ             GHFLVLRQWKHFRXUWZRXOGLPSRVHDOLIHVHQWHQFH86DW
LQVWUXFWLRQ RI WKLV NLQG LV FRQWUDU\ WR 2KLR ODZ DQG WKDW LW     )RXUWK DV GLVFXVVHG ODWHU WKH ODQJXDJH RI WKH $OOHQ
XQGHUPLQHVWKHUHOLDELOLW\RIDMXU\YHUGLFW$FFRUGLQJO\WKLV         FKDUJHLQWKLVFDVHZDVDVDZKROHPRUHIRUFHIXOWKDQWKH
&RXUWQHHGQRWDQGVKRXOGQRWIROORZWKHGLFWDLQ6FRWW                  $OOHQFKDUJHJLYHQLQ/RZHQILHOG,QWKHFDVHDWEDUWKHWULDO
                                                                          FRXUW GLG PXFK PRUH WKDQ WHOO WKH MXURUV WR FRQVLGHU HDFK
  ,QVWHDG %URRNV LV FRQWUROOLQJ DQG PDNHV FOHDU WKDW WKH         RWKHUjVYLHZVDQGWU\DJDLQ
SUHOLPLQDU\LQVWUXFWLRQVGLGQRWFRPSRUWZLWK2KLRODZ7KH
SUHOLPLQDU\LQVWUXFWLRQVUHDGLQSHUWLQHQWSDUW                             7KHUHIRUHFRQWUDU\WRWKHPDMRULW\jVFRQWHQWLRQWKHUHDUH
                                                                          GLIIHUHQFHVEHWZHHQWKH$OOHQFKDUJHLQ/RZHQILHOGDQGWKH
  ,I WKH 6WDWH RI 2KLR KDV SURYHG EH\RQG D UHDVRQDEOH            $OOHQFKDUJHLQWKHLQVWDQWFDVH0RUHRYHUWKHVHGLIIHUHQFHV
  GRXEWWKDWHLWKHURQHRIWKHDJJUDYDWLQJFLUFXPVWDQFHVRI               DUH PDWHULDO EHFDXVH WKH\ FUHDWH WKH FRQWH[W DQG WKH
  WKH PXUGHU RXWZHLJKV DQ\ PLWLJDWLQJ IDFWRU WKDW PD\              FLUFXPVWDQFHVXQGHUZKLFKWKH$OOHQFKDUJHZDVJLYHQ6LQFH
  H[LVW LQ WKLV FDVH WKHQ LW ZRXOG EH \RXU GXW\ WR             WKHGHWHUPLQDWLRQRIZKHWKHUDQ$OOHQFKDUJHLVFRHUFLYHLV
  UHFRPPHQGWKHGHDWKSHQDOW\                                            QHFHVVDULO\IDFWLQWHQVLYHDQGMXGJHGRQDFDVHE\FDVHEDVLV
  +RZHYHULI\RXILQGIURPWKHHYLGHQFHWKDWWKH6WDWHKDV               /RZHQILHOGFDQQRWSURSHUO\EHXVHGDVDVKLHOGWRMXVWLI\WKH
  IDLOHGWRSURYHEH\RQGDUHDVRQDEOHGRXEWWKDWHLWKHURQH               FRQVWLWXWLRQDOHUURUFRPPLWWHGLQ3HWLWLRQHUjVFDVH6HHDOVR
  RI WKH DJJUDYDWLQJ FLUFXPVWDQFHV RI WKH PXUGHU                    HJ 7XFNHU Y &DWRH  )G   WK &LU 
  RXWZHLJKVDQ\PLWLJDWLQJIDFWRUWKDWPD\H[LVWWKHQLWjV               GLVWLQJXLVKLQJ/RZHQILHOGEHFDXVHm>L@QWKHWRWDOLW\RIWKH
  \RXUGXW\WRQRWUHFRPPHQGWKHGHDWKSHQDOW\                           FLUFXPVWDQFHVRI/RZHQILHOGjVFDVHLQFOXGLQJWKHIDFWWKDW
  ,Q WKH HYHQW WKDW \RX GR QRW UHFRPPHQG WKH GHDWK               WKHLQVWUXFWLRQKDGEHHQUHTXHVWHGE\WKHMXU\WKDWWKHFRXUW
  SHQDOW\REYLRXVO\\RXZRXOGFRQWLQXH\RXUGHOLEHUDWLRQV
    +HQGHUVRQY&ROOLQV                  1RV        1RV                    +HQGHUVRQY&ROOLQV        

VHQWDQRWHWRWKHFRXUWVWDWLQJWKDWmWKHMXU\ZDVXQDEOHWR          DQG \RXjOO UHFRPPHQG RQH RI WZR RWKHU SRVVLEOH
UHDFKDGHFLVLRQDWWKDWWLPHDQGUHTXHVWLQJWKDWWKHFRXUW           SHQDOWLHV
DJDLQDGYLVHWKHMXU\DVWRLWVUHVSRQVLELOLWLHVl,GHPSKDVLV                                   
DGGHG  $IWHU OHDUQLQJ WKDW HOHYHQ RI WKH WZHOYH MXURUV      7KHVXEPLVVLRQRIWKHVHOHVVHUSHQDOWLHVLVQRWGHVLJQHG
WKRXJKWWKDWIXUWKHUGHOLEHUDWLRQVZRXOGEHKHOSIXOWKHWULDO         WR UHOLHYH \RX IURP WKH SHUIRUPDQFH RI DQ XQSOHDVDQW
FRXUWJDYHWKHIROORZLQJLQVWUXFWLRQ                                  GXW\ RU REOLJDWLRQ  7KH\ DUH LQFOXGHG LI WKH HYLGHQFH
                                                                       IDLOV WR SURYH WKDW GHJUHH ZKLFK LV UHTXLUHG WKDW WKH
  /DGLHVDQG*HQWOHPHQDV,LQVWUXFWHG\RXHDUOLHULIWKH            DJJUDYDWLQJ FLUFXPVWDQFHV RI WKLV FULPH RXWZHLJK DQ\
  MXU\ LV XQDEOH WR XQDQLPRXVO\ DJUHH RQ D                      PLWLJDWLQJIDFWRUWKDWPD\H[LVW
  UHFRPPHQGDWLRQWKH&RXUWVKDOOLPSRVHWKHVHQWHQFHRI                                             
  /LIH,PSULVRQPHQWZLWKRXWEHQHILWRI3UREDWLRQ3DUROH              $JDLQWKLVLVDFULPLQDOFDVH7KHUHIRUHDOOWZHOYHRI
  RU6XVSHQVLRQRI6HQWHQFH                                          \RXPXVWDJUHHRQZKLFKHYHUYHUGLFW\RXVLJQ$JDLQ,
  :KHQ\RXHQWHUWKHMXU\URRPLWLV\RXUGXW\WRFRQVXOW             ZDQWWRUHPLQG\RX\RXFDQQRWKDYHDUHFRPPHQGDWLRQ
  ZLWKRQHDQRWKHUWRFRQVLGHUHDFKRWKHU
VYLHZVDQGWR               RUDYHUGLFWLILWLVVHYHQWRILYHWHQWRWZRRUHOHYHQWR
  GLVFXVVWKHHYLGHQFHZLWKWKHREMHFWLYHRIUHDFKLQJDMXVW           RQH,WPXVWEHWZHOYHWR]HUR
  YHUGLFW LI \RX FDQ GR VR ZLWKRXW YLROHQFH WR WKDW
  LQGLYLGXDOMXGJPHQW                                              s$DWHPSKDVLVDGGHG+HUHWKH
  (DFKRI\RXPXVWGHFLGHWKHFDVHIRU\RXUVHOIEXWRQO\            LQVWUXFWLRQFRPPXQLFDWHGWRWKHMXU\WKDWDOOWZHOYHPHPEHUV
  DIWHUGLVFXVVLRQDQGLPSDUWLDOFRQVLGHUDWLRQRIWKHFDVH           PXVWDJUHHRQUHFRPPHQGLQJRUQRWUHFRPPHQGLQJWKHGHDWK
  ZLWK\RXUIHOORZMXURUV<RXDUHQRWDGYRFDWHVIRURQH            SHQDOW\EHIRUHWKH\FRXOGFRQVLGHUDOLIHVHQWHQFH,QRWKHU
  VLGHRUWKHRWKHU'RQRWKHVLWDWHWRUHH[DPLQH\RXURZQ          ZRUGVRQO\DIWHUWKHMXU\ZKLFKZDVLQVWUXFWHGWKDWDOOWZHOYH
  YLHZVDQGWRFKDQJH\RXURSLQLRQLI\RXDUHFRQYLQFHG              PHPEHUVKDGWRDJUHHGLGQRWUHFRPPHQGGHDWKZHUHWKH\
  \RXDUHZURQJEXWGRQRWVXUUHQGHU\RXUKRQHVWEHOLHIDV           LQVWUXFWHGWRFRQWLQXHGHOLEHUDWLRQVRQRQHRIWKHSRVVLEOHOLIH
  WRWKHZHLJKWDQGHIIHFWRIHYLGHQFHVROHO\EHFDXVHRIWKH         VHQWHQFHV  2I JUHDW VLJQLILFDQFH KRZHYHU WKH MXU\
  RSLQLRQRI\RXUIHOORZMXURUVRUIRUWKHPHUHSXUSRVHRI           LQVWUXFWLRQVGLGQRWFRPPXQLFDWHWRWKHMXU\WKDWRQHMXURU
  UHWXUQLQJDYHUGLFW                                             FRXOG SUHYHQW WKH LPSRVLWLRQ RI WKH GHDWK SHQDOW\  7KLV
                                                                     LQVWUXFWLRQ ZDV JLYHQ LQ GLUHFW FRQWUDYHQWLRQ RI WKH FOHDU
,G DW  FLWDWLRQ RPLWWHG HPSKDVLV DGGHG  7KH MXU\   ODQJXDJHRI'DQG%URRNV8QGHU2KLRODZ
UHVXPHGGHOLEHUDWLRQVDQGUHWXUQHGVRPHWKLUW\PLQXWHVODWHU         WKHUHLVQRUHTXLUHPHQWWKDWWKHMXU\FRPHWRDFRQFOXVLRQRQ
ZLWKDYHUGLFWVHQWHQFLQJWKHGHIHQGDQWWRGHDWK,G$IWHU        LPSRVLWLRQRIWKHGHDWKSHQDOW\EHIRUHLWFRQVLGHUVLPSRVLQJ
FRQVLGHULQJWKH$OOHQFKDUJHLQmLWVFRQWH[WDQGXQGHUDOOWKH       D VHQWHQFH RI OLIH  $Q\ LQVWUXFWLRQ WKDW LPSRVHV VXFK D
FLUFXPVWDQFHVl WKH &RXUW IRXQG WKDW WKH FKDUJH ZDV QRW      UHTXLUHPHQW LV LQ YLRODWLRQ RI 2KLR 5HYLVHG &RGH
FRHUFLYH,GDW                                             'DQGLVPLVOHDGLQJ%URRNV1(GDW
                                                                     2KLRODZDOVRPDNHVFOHDUWKDWRQHMXURUFRXOGSUHYHQW
   7KHFRQWH[WDQGWKHFLUFXPVWDQFHVRIWKH$OOHQFKDUJHLQ          WKH LPSRVLWLRQ RI WKH GHDWK SHQDOW\  )XUWKHUPRUH WKDW WKH
WKHLQVWDQWFDVHGLIIHUJUHDWO\)LUVWXQOLNHLQ/RZHQILHOGWKH   WULDOFRXUWLQ3HWLWLRQHUjVFDVHGLGQRWKDYHWKHEHQHILWRIWKH
WULDOFRXUWLQVWUXFWHGWKHMXU\WKDWLWKDGWRXQDQLPRXVO\UHMHFW    %URRNVGHFLVLRQGRHVQRWFKDQJHWKLVUHVXOWEHFDXVHWKHWULDO
GHDWKEHIRUHLWFRQVLGHUHGOLIH7KHWULDOFRXUWLQ/RZHQILHOG      FRXUW GLG KDYH WKH EHQHILW RI 2KLR 5HYLVHG &RGH
LQVWUXFWHGWKHMXU\EHIRUHLWEHJDQGHOLEHUDWLRQVWKDWLILWmZHUH    '  sXVW DV LQ %URRNV WKH SUHOLPLQDU\
XQDEOH WR UHDFK D XQDQLPRXV UHFRPPHQGDWLRQ WKH FRXUW
    +HQGHUVRQY&ROOLQV                     1RV         1RV                    +HQGHUVRQY&ROOLQV        

LQVWUXFWLRQLQWKHLQVWDQWFDVHZDVHUURQHRXVDQGXQGHUPLQHG             MXURUZDVPDGHDZDUHWKDWKHRUVKHFRXOGSUHYHQWDGHDWK
WKHUHOLDELOLW\RIWKHMXU\YHUGLFWRQGHDWK                          SHQDOW\UHFRPPHQGDWLRQl,G+HUHKRZHYHUWKHMXU\ZDV
                                                                         QRW JLYHQ D VLPLODU LQVWUXFWLRQ  )XUWKHUPRUH WKHUH LV QR
  7KHPDMRULW\jVUHOLDQFHRQ6WDWHY'DYLV1(G             LQGLFDWLRQIURPWKHMXU\LQVWUXFWLRQVWKDWHDFKMXURUZDVPDGH
2KLR  WR VXSSRUW D FRQWUDU\ FRQFOXVLRQ LV QRW             DZDUH RI KLV RU KHU DELOLW\ WR SUHYHQW D GHDWK SHQDOW\
SHUVXDVLYH LQDVPXFK DV WKH 'DYLV GHFLVLRQ LV PDWHULDOO\           UHFRPPHQGDWLRQ  7KXV 'DYLV VXSSRUWV UDWKHU WKDQ
GLVWLQJXLVKDEOHIURPWKHFDVHDWEDU'DYLVGRHVQRWUHTXLUH           XQGHUPLQHV WKH FRQFOXVLRQ WKDW WKH MXU\ LQVWUXFWLRQ LQ WKLV
DV WKH PDMRULW\ VXJJHVWV WKDW DQ LQVWUXFWLRQ EH YLUWXDOO\       FDVHYLRODWHVWKHPDQGDWHRI%URRNV7KHPDMRULW\jVUHOLDQFH
LGHQWLFDOWRWKHLQVWUXFWLRQJLYHQLQ%URRNVEHIRUHLWUXQVDIRXO        RQ'DYLVLVWKHUHIRUHPLVSODFHG
RI WKH ODZ  7KH PDMRULW\ UHOLHV RQ WKH KROGLQJ RI 'DYLV
ZLWKRXWORRNLQJDWWKHPDQQHULQZKLFKWKHFRXUWDUULYHGDWLWV             ,I WKH PDMRULW\ LV WR SURSHUO\ FRQVLGHU ZKHWKHU WKH$OOHQ
GHFLVLRQ LQ WKDW FDVH  1RWDEO\ WKH 'DYLV FRXUW VWDWHG mLW   FKDUJH ZDV XQGXO\ FRHUFLYH LW PXVW FRQVLGHU DOO RI WKH
FDQQRWEHGLVSXWHGWKDWWKHMXU\LQVWUXFWLRQJLYHQLQWKLVFDVH          FLUFXPVWDQFHV XQGHU ZKLFK WKH $OOHQ FKDUJH ZDV JLYHQ
ODFNV WKH FODULW\ RI WKH PRGHO LQVWUXFWLRQ FRQWHPSODWHG LQ       LQFOXGLQJ WDNLQJ LQWR DFFRXQW WKH SUHOLPLQDU\ LQVWUXFWLRQV
%URRNV ZKLFK XUJHV WULDO FRXUWV WR XQGHUVFRUH D VROLWDU\        +RZHYHUWKHPDMRULW\HUURQHRXVO\FRQVLGHUVWKH$OOHQFKDUJH
MXURUjVDELOLW\WRSUHYHQWDGHDWKSHQDOW\UHFRPPHQGDWLRQl              LQDYDFXXPDQGLJQRUHVWKHYHU\LQVWUXFWLRQVWKDWIRUPWKH
 1(G DW   7KHUHDIWHU WKH FRXUW ZHQW RQ WR          MXU\jV XQGHUVWDQGLQJ RI LWV GXW\ WR UHQGHU D YHUGLFW LQ D
FRQVLGHU LQ DGGLWLRQ WR WKH FKDOOHQJHG DFTXLWWDOILUVW            SDUWLFXODU FDVH  7KH SUHOLPLQDU\ LQVWUXFWLRQV DQG WKH
LQVWUXFWLRQ DQRWKHU LQVWUXFWLRQ JLYHQ WR WKH MXU\  ,Q WKDW    PLVUHSUHVHQWDWLRQVRI2KLRODZFRQWDLQHGWKHUHLQVKRXOGQRW
LQVWUXFWLRQWKHWULDOFRXUWFDXWLRQHGWKHMXURUVDVIROORZV           EH LJQRUHG ZKHQ FRQVLGHULQJ WKH HIIHFW RI WKH VXEVHTXHQW
                                                                         $OOHQFKDUJHRQWKHMXU\
  m1RZ\RXULQLWLDOFRQGXFWXSRQHQWHULQJWKHMXU\URRP
  DJDLQLVDPDWWHURILPSRUWDQFH<RXVKRXOGFRQVXOWZLWK                 7KHPDMRULW\RSLQLRQLVDOVRIXQGDPHQWDOO\IODZHGLQVRIDU
  HDFKRWKHUFRQVLGHUHDFKRWKHU
VYLHZVDQGGHOLEHUDWH                DVLWDWWHPSWVWRHTXDWHWKHLQVWDQWFDVHZLWK/RZHQILHOG7KH
  ZLWKDQREMHFWLYHRIUHDFKLQJDQDJUHHPHQWLI\RXFDQGR              PDMRULW\ FODLPV WKDW WKH LQVWDQW FDVH FDQQRW EH PDWHULDOO\
  VRZLWKRXWGRLQJYLROHQFHWR\RXULQGLYLGXDOFRQVFLHQFH               GLVWLQJXLVKHGIURP/RZHQILHOG&RQWUDU\WRWKHPDMRULW\jV
  DQGJRRGMXGJPHQW                                                     FRQWHQWLRQWKHUHDUHIXQGDPHQWDOGLIIHUHQFHVEHWZHHQERWK
                                                                         WKH ODQJXDJH RI WKH FKDUJH LQ /RZHQILHOG DQG WKH
  m<RX VKRXOG GR VR RQO\ DIWHU D GLVFXVVLRQ DQG D               FLUFXPVWDQFHVXQGHUZKLFKLWZDVJLYHQWKHVHGLIIHUHQFHVDUH
  FRQVLGHUDWLRQRIWKHFDVHZLWK\RXUIHOORZMXURUV                     DSSDUHQWRQWKHIDFHRIWKH/RZHQILHOGGHFLVLRQ
  m5HPHPEHUHDFKRI\RXLVHTXDOLQWKHMXU\URRPDQG                    ,Q/RZHQILHOGDWWKHSHQDOW\SKDVHRIWKHMXU\GHOLEHUDWLRQV
  \RX VKRXOGQ
W KHVLWDWH WR FKDQJH \RXU RSLQLRQ LI                WKH WULDO FRXUW DGPRQLVKHG WKH MXURUV WKDW WKH\ mVKRXOG
  FRQYLQFHGE\\RXUIHOORZMXURUVWKDW\RXDUHZURQJ                    FRQVLGHUWKHYLHZVRIRWKHUVZLWKWKHREMHFWLYHRIUHDFKLQJD
                                                                         YHUGLFWEXWWKDWWKH\VKRXOGQRWVXUUHQGHUWKHLURZQKRQHVW
  m+RZHYHU GR QRW VXUUHQGHU DQ\ KRQHVW FRQYLFWLRQ LQ             EHOLHIVLQGRLQJVR7KHFRXUWDOVRFKDUJHGWKHMXU\WKDWLILW
  RUGHUWREHFRQJHQLDORUWRUHDFKDYHUGLFWVROHO\RIWKH             ZHUHXQDEOHWRUHDFKDXQDQLPRXVUHFRPPHQGDWLRQWKHFRXUW
  EHOLHIRIWKHRWKHUMXURUVl                                           ZRXOG LPSRVH D VHQWHQFH RI OLIH ZLWKRXW WKH SRVVLELOLW\ RI
                                                                         SUREDWLRQSDUROHRUVXVSHQVLRQl86DWHPSKDVLV
,GHPSKDVLVDGGHG,WZDVRQO\DIWHUUHYLHZLQJmDOORIWKH           DGGHG2QWKHVHFRQGGD\RIGHOLEHUDWLRQVWKHMXU\IRUHPDQ
LQVWUXFWLRQVlWKDWWKHFRXUWZDVDEOHWRFRQFOXGHWKDWm>H@DFK
