       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


&,7< 2) :<$1'277(D              ;
0LFKLJDQPXQLFLSDO                 
FRUSRUDWLRQ                       
                                     1R
             3ODLQWLII$SSHOOHH   
                                    !
                                   
            Y                     
                                   
&2162/,'$7(' 5$,/                  
&25325$7,21DOVRNQRZQDV 
&RQUDLODOVRNQRZQDV             
                                   
&RQUDLO,QFD3HQQV\OYDQLD      
FRUSRUDWLRQ                       
         'HIHQGDQW$SSHOODQW 
                                   
                                  1
      $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
     IRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQDW'HWURLW
 1RnsRKQ&RUEHWW2j0HDUD'LVWULFWsXGJH
                  $UJXHG0D\
          'HFLGHGDQG)LOHG$XJXVW
 %HIRUHs21(6&2/(DQG*,/0$1&LUFXLWsXGJHV




                             
     &LW\RI:\DQGRWWHY                            1R
      &RQVROLGDWHG5DLO&RUS

                      BBBBBBBBBBBBBBBBB
                           &2816(/
$5*8('sRVHSKs0F'RQQHOO'85.,10F'211(//
&/,)721'$9,6	2j'211(//'HWURLW0LFKLJDQIRU
$SSHOODQW  :LOOLDP 5 /RRN /22. 0$.2:6., 	
/22.:\DQGRWWH0LFKLJDQIRU$SSHOOHH21%5,()
sRVHSK s 0F'RQQHOO *UHJRU\ $ &OLIWRQ '85.,1
0F'211(//&/,)721'$9,6	2j'211(//'HWURLW
0LFKLJDQ IRU $SSHOODQW  :LOOLDP 5 /RRN /22.
0$.2:6.,	/22.:\DQGRWWH0LFKLJDQIRU$SSHOOHH
                      BBBBBBBBBBBBBBBBB
                          23,1,21
                      BBBBBBBBBBBBBBBBB
   5*8<&2/(s5&LUFXLWsXGJH,QWKLVGLYHUVLW\DFWLRQ
'HIHQGDQW$SSHOODQW &RQVROLGDWHG 5DLO &RUSRUDWLRQ
m&RQUDLOlDSSHDOVIURPWKHGLVWULFWFRXUWjVJUDQWRIVXPPDU\
MXGJPHQWLQ IDYRURI3ODLQWLII$SSHOOHH&LW\RI:\DQGRWWH
mWKH &LW\l  7KH XQGHUO\LQJ DFWLRQ VWHPV IURP D GLVSXWH
FRQFHUQLQJZKHWKHU&RQUDLOLVREOLJDWHGWRXQGHUWDNHFHUWDLQ
FRVPHWLFLPSURYHPHQWVRIWZREULGJHVSXUVXDQWWRDJUDGH
VHSDUDWLRQDJUHHPHQWmWKH$JUHHPHQWl7KHGLVWULFWFRXUW
IRXQGWKDWWKHWHUPVRIWKH$JUHHPHQWXQDPELJXRXVO\UHTXLUH
&RQUDLO WR SHUIRUP WKH GLVSXWHG LPSURYHPHQWV DQG
DFFRUGLQJO\JUDQWHGWKH&LW\jVPRWLRQIRUVXPPDU\MXGJPHQW
RQ WKLV SRLQW IURP ZKLFK &RQUDLO QRZ DSSHDOV  $OVR D
VXEMHFWRIWKLVDSSHDOLVWKHGLVWULFWFRXUWjVGHQLDORI&RQUDLOjV
PRWLRQIRUVXPPDU\MXGJPHQWXUJLQJGLVPLVVDORIWKH&LW\jV
FRPSODLQW IRU LWV DOOHJHG IDLOXUH WR UDLVH FODLPV ZLWKLQ WKH
DSSOLFDEOH VL[\HDU VWDWXWHRIOLPLWDWLRQV SHULRG DQG
DOWHUQDWLYHO\ IRU LWV DOOHJHG XQGXH GHOD\ DQG DWWHQGDQW
SUHMXGLFHVXIIHUHGE\&RQUDLOLQUDLVLQJLWVFODLPV%HFDXVH
ZHDUHSHUVXDGHGWKDWWKHFRQWUDFWWHUPVDWLVVXHLQWKLVFDVH
DUHVXVFHSWLEOHWRPXOWLSOHLQWHUSUHWDWLRQVZHKROGWKDWWKH
GLVWULFWFRXUWHUUHGLQJUDQWLQJWKH&LW\jVPRWLRQIRUVXPPDU\
MXGJPHQWDQGZHDFFRUGLQJO\5(9(56(LWVGHFLVLRQ:H
1R                          &LW\RI:\DQGRWWHY          
                                  &RQVROLGDWHG5DLO&RUS

GRQRWEHOLHYHKRZHYHUWKDWWKH&LW\jVFODLPVDUHEDUUHGE\
HLWKHU0LFKLJDQjVVWDWXWHRIOLPLWDWLRQV RU E\WKHHTXLWDEOH
GRFWULQHRIODFKHVDQGZH$)),50WKHGLVWULFWFRXUWjVGHQLDO
RI&RQUDLOjVPRWLRQIRUVXPPDU\MXGJPHQWRQWKLVJURXQG
                      ,%$&.*5281'
   2Q$SULOWKH&LW\HQWHUHGLQWRDJUDGHVHSDUDWLRQ
DJUHHPHQWZLWKIRXUUDLOURDGVDOORIZKLFKDJUHHGWRFRQVWUXFW
DQGPDLQWDLQILYHEULGJHVRYHU(XUHND5RDGLQ:\DQGRWWH
0LFKLJDQ2QHRIWKHUDLOURDGVZDVWRFRQVWUXFWDQGPDLQWDLQ
WZR RI WKH EULGJHV DQG WKH RWKHU UDLOURDGV HDFK ZHUH WR
FRQVWUXFW DQG PDLQWDLQ RQH EULGJH  7KH SXUSRVH RI WKH
EULGJHVZDVWRDOORZUDLOURDGWUDFNVWRVSDQ(XUHND5RDGDQG
WRDYRLGWKHFRQVWUXFWLRQRIDPXOWLSOHWUDFNJUDGHFURVVLQJ
&RQUDLO DV D VXFFHVVRU WR WKH $JUHHPHQW QRZ PDLQWDLQV
WUDFNVRYHUWZRRIWKHEULGJHVDQGKDVDVVXPHGDOOULJKWVDQG
REOLJDWLRQVSURYLGHGIRUE\WKH$JUHHPHQWDVWRWKRVHWZR
EULGJHV3XUVXDQWWRWKH$JUHHPHQW&RQUDLOLVUHTXLUHGmWR
PDLQWDLQUHSDLUDQGUHQHZDWLWVRZQH[SHQVHDOOSDUWVRILWV
EULGJH VWUXFWXUHV WUDFN VWUXFWXUHV UHWDLQLQJ ZDOOV SLHUV
DEXWPHQWVDQGZLQJZHOOVZLWKLQWKHOLQHVRILWVULJKWRIZD\
l7KH$JUHHPHQWGRHVQRWKRZHYHUH[SUHVVO\UHTXLUH
&RQUDLO WR XQGHUWDNH DQ\ FRVPHWLF LPSURYHPHQWV RI WKH
EULGJHV DQG &RQUDLO LQ IDFW KDV QHYHU PDGH DQ\ VXFK
LPSURYHPHQWV
   6RPHWLPH LQ  WKH &LW\ UHTXHVWHG &RQUDLOjV
SDUWLFLSDWLRQLQWKHm(XUHND$YHQXH&RUULGRU /DQGVFDSLQJ
DQG %HDXWLILFDWLRQ 3URMHFWl DQ LQLWLDWLYH WKDW ZRXOG KDYH
UHTXLUHG&RQUDLOWRSHUIRUPFHUWDLQFRVPHWLFLPSURYHPHQWV
RI WKH EULGJHV ZKLFK WKH &LW\ FKDUDFWHUL]HG LQ ZULWWHQ
FRUUHVSRQGHQFH WR &RQUDLO DV EHLQJ LQ D mYHU\ GHFD\HG
FRQGLWLRQl  $OWKRXJK WKH RWKHU SDUWLHV WR WKH $JUHHPHQW
SDUWLFLSDWHG LQ WKH SURMHFW WR WKH VDWLVIDFWLRQ RI WKH &LW\
&RQUDLO GHFOLQHG FRQFOXGLQJ WKDW WKH H[SUHVV WHUPV RI WKH
$JUHHPHQWPDQGDWHGRQO\WKDWWKHEULGJHVEHPDLQWDLQHGIRU
VWUXFWXUDOVRXQGQHVVDQGLPSRVHGQRUHTXLUHPHQWWKDW&RQUDLO
SUHVHUYHRUHQKDQFHWKHDSSHDUDQFHRIWKHEULGJHV%HFDXVH
     &LW\RI:\DQGRWWHY                          1R       1R                         &LW\RI:\DQGRWWHY         
      &RQVROLGDWHG5DLO&RUS                                                                          &RQVROLGDWHG5DLO&RUS

WKH EULGJHV DW WKDW WLPH ZHUH VWUXFWXUDOO\ VRXQG SURSHUO\                             ,9/$&+(6
PDLQWDLQHGDQGLQQRQHHGRIUHSODFHPHQWLWUHDVRQHGWKDWQR
IXUWKHUDFWLRQZDVUHTXLUHGXQGHUWKH$JUHHPHQW                        &RQUDLODOVRFRQWHQGVWKDWWKH&LW\jVFODLPLVEDUUHGE\WKH
                                                                      HTXLWDEOHGRFWULQHRIODFKHVZKLFKLVmDSSOLFDEOHLQFDVHVLQ
   7KH&LW\LQLWLDWHGWKHLQVWDQWDFWLRQLQ0LFKLJDQjV:D\QH          ZKLFK WKHUH LV DQ XQH[FXVHG RU XQH[SODLQHG GHOD\ LQ
&RXQW\ &LUFXLW &RXUW RQ )HEUXDU\   VHHNLQJ             FRPPHQFLQJ DQ DFWLRQ DQG D FRUUHVSRQGLQJ FKDQJH RI
GHFODUDWLRQV ERWK WKDW &RQUDLOjV SDUWLFLSDWLRQ LQ WKH           PDWHULDOFRQGLWLRQWKDWUHVXOWVLQSUHMXGLFHWRDSDUW\l3XE
EHDXWLILFDWLRQSURMHFWZDVUHTXLUHGE\WKHH[SUHVVWHUPVRIWKH       +HDOWK 'HSjW Y 5LYHUJDWH 0DQRU  1:G  
$JUHHPHQW DQG WKDW LWV IDLOXUH WR SDUWLFLSDWH FRQVWLWXWHG D   0LFKFLWDWLRQVRPLWWHG:HUHYLHZDGLVWULFWFRXUWjV
EUHDFKRIWKH$JUHHPHQWjVUHTXLUHPHQWWKDWHDFKVLJQDWRU\             UHVROXWLRQRIDODFKHVTXHVWLRQIRUDQDEXVHRIGLVFUHWLRQ6HH
mPDLQWDLQUHSDLUDQGUHQHZlWKHVWUXFWXUHVIRUZKLFKLWLV          7KURSSY%DFKH+DOVH\6WXDUW6KLHOGV,QF)G
FRQWUDFWXDOO\UHVSRQVLEOH&RQUDLOUHPRYHGWKHDFWLRQWRWKH         WK&LU+DYLQJDOUHDG\FRQFOXGHGWKDWWKH&LW\
8QLWHG 6WDWHV 'LVWULFW &RXUW IRU WKH (DVWHUQ 'LVWULFW RI      EURXJKWWKHFODLPZLWKLQWKHDSSOLFDEOHVWDWXWHRIOLPLWDWLRQV
0LFKLJDQRQ0DUFKEDVHGRQWKDWFRXUWjVGLYHUVLW\           SHULRGWKHGRFWULQHRIODFKHVKDVQRUROHLQWKLVFDVH6HH
MXULVGLFWLRQ7KH&LW\ILOHGDPRWLRQIRUVXPPDU\MXGJPHQW           0LFK(GXF(PSOR\HHV0XW,QV&RY0RUULV1:G
RQsXQHDQGDKHDULQJWRUHVROYHWKHLVVXHVUDLVHGLQ         0LFK  QRWLQJ WKDW D FDXVH RI DFWLRQ ILOHG
WKHPRWLRQZDVKHOGRQ$XJXVW8SRQILQGLQJWKDW            ZLWKLQ WKH VL[\HDU VWDWXWHRIOLPLWDWLRQV SHULRG LV
WKHFRQWUDFWWHUPVDWLVVXHZHUHXQDPELJXRXVDQGWKXVQRW             SUHVXPSWLYHO\ UHDVRQDEOH WKXV UHQGHULQJ LQDSSOLFDEOH WKH
SURSHUO\VXEPLVVLEOHWRDMXU\WKHGLVWULFWFRXUWRUDOO\JUDQWHG     ODFKHV GRFWULQH  7KH GLVWULFW FRXUW WKHUHIRUH SURSHUO\
WKH&LW\jVPRWLRQ$SURYLVLRQDORUGHUJUDQWLQJWKH&LW\jV           GLVPLVVHG&RQUDLOjVPRWLRQIRU VXPPDU\MXGJPHQWRQWKLV
PRWLRQ IRU VXPPDU\ MXGJPHQW LVVXHG RQ 2FWREHU          EDVLV
7KHGD\EHIRUHRQ2FWREHU&RQUDLOILOHGDPRWLRQ
IRUVXPPDU\MXGJPHQWDUJXLQJWKDWWKH&LW\jVFODLPLIRQH                                 9&21&/86,21
ZDVSURSHUO\VWDWHGDWDOOZDVEDUUHGERWKE\0LFKLJDQjVVL[
\HDU VWDWXWH RI OLPLWDWLRQV SHULRG IRU EUHDFKRIFRQWUDFW         7KHLQWHQWRIWKHFRQWUDFWLQJSDUWLHVDVGHULYHGIURPWKH
DFWLRQVDQGE\WKHHTXLWDEOHGRFWULQHRIODFKHV7KHGLVWULFW        ODQJXDJHmPDLQWDLQUHSDLUDQGUHQHZlLVDPELJXRXVDQGWKXV
FRXUWGHQLHG&RQUDLOjVPRWLRQRQ'HFHPEHUDQG               SURSHUO\ UHVROYHG RQO\ E\ D MXU\  $FFRUGLQJO\ ZH
LVVXHGDILQDORUGHURQsDQXDU\PHPRULDOL]LQJLWV           5(9(56(WKHGLVWULFWFRXUWjVJUDQWRIWKH&LW\jVPRWLRQIRU
JUDQW RI WKH &LW\jV PRWLRQ IRU VXPPDU\ MXGJPHQW DQG LWV      VXPPDU\ MXGJPHQW  :H ILQG QR HUURU KRZHYHU LQ LWV
GHQLDO RI &RQUDLOjV PRWLRQ IRU VXPPDU\ MXGJPHQW  7KLV        FRQFOXVLRQ WKDW WKH &LW\jV FODLPV ZHUH QRW WLPHEDUUHG RU
WLPHO\DSSHDOIROORZV                                                RWKHUZLVHSUHFOXGHGE\WKHHTXLWDEOHGRFWULQHRIODFKHVDQG
                                                                      WKXV$)),50LWVGHQLDORI&RQUDLOjVPRWLRQIRUVXPPDU\
                  ,,&2175$&77(506                                  MXGJPHQW
   :H UHYLHZ GH QRYR D GLVWULFW FRXUWjV JUDQW RI VXPPDU\
MXGJPHQW  6HH 'DYLV Y 6RGH[KR &XPEHUODQG &ROO
&DIHWHULD)GWK&LUFLWLQJ0LGGOHWRQ
Y5H\QROGV0HWDOV&R)GWK&LU
6XPPDU\MXGJPHQWLVSURSHULIWKHHYLGHQFHVKRZVWKDWWKHUH
       &LW\RI:\DQGRWWHY                              1R        1R                         &LW\RI:\DQGRWWHY          
         &RQVROLGDWHG5DLO&RUS                                                                               &RQVROLGDWHG5DLO&RUS

WKH GLVWULFW FRXUW GHQLHG &RQUDLOjV PRWLRQ IRU VXPPDU\                 LVQRJHQXLQHLVVXHRIPDWHULDOIDFWDQGWKDWWKHPRYLQJSDUW\
MXGJPHQWRQWKLVEDVLV                                                       LVHQWLWOHGWRMXGJPHQWDVDPDWWHURIODZ6HH'DYLV
                                                                              )GDWFLWLQJ&LW\0JPW&RUSY86&KHP&R
   $OWKRXJKQRWZLWKRXWVRPHIRUFH&RQUDLOjV DUJXPHQWLV                    )G   WK &LU :H FRQVLGHU DOO IDFWV DQG
XQSHUVXDVLYH$GLVWULFWFRXUWjVGHWHUPLQDWLRQRIZKHWKHUD                  LQIHUHQFHVGUDZQWKHUHIURPLQWKHOLJKWPRVWIDYRUDEOHWRWKH
FODLPLVEDUUHGE\DVWDWXWHRIOLPLWDWLRQVLVDTXHVWLRQRIODZ              QRQPRYDQW6HH'DYLV)GDW
WKDWZHUHYLHZGHQRYR6HH7ROEHUWY6WDWHRI2KLR'HSWRI
7UDQV)GWK&LU8QGHU0LFKLJDQ                      ,QDGLYHUVLW\DFWLRQVXFKDVWKHLQVWDQWRQHZHDSSO\WKH
ODZ D EUHDFKRIFRQWUDFW FODLP DFFUXHV RQ WKH GDWH RI WKH           VXEVWDQWLYHODZRIWKHIRUXPVWDWH0LFKLJDQLQWKLVFDVH
EUHDFK6HH$P0HG6HF,QFY$XWR&OXE,QV$VVjQ                 6HH+DQRYHU,QV&RY$P(QJjJ&R)GWK
)G	QWK&LU2XUUHYLHZRIWKH                    &LU   :KHWKHU RU QRW D FRQWUDFW LV DPELJXRXV LV D
UHFRUGVXJJHVWVWKDWLWZDVQRWXQWLOWKDWWKHSDUWLHVWR                TXHVWLRQRIODZSURSHUO\GHWHUPLQHGE\WKHGLVWULFWFRXUW6HH
WKH$JUHHPHQWHYHUFRQWHPSODWHGWKHUDLOURDGVjSDUWLFLSDWLRQ                  6DXOWH6WH0DULH7ULEHRI&KLSSHZD,QGLDQVY(QJOHU
LQ D FRVPHWLF LPSURYHPHQW SURJUDP  %HFDXVH ZH KDYH                   )G   WK &LU   ,Q PDNLQJ VXFK D
DOUHDG\ FRQFOXGHG WKDW WKH $JUHHPHQW ODQJXDJH PD\                       GHWHUPLQDWLRQDGLVWULFWFRXUWLVFRXQVHOHGWRUHDGWKHFRQWUDFW
HQFRPSDVVWKHW\SHRIFRVPHWLFmUHQHZDOlWKDWWKH&LW\XUJHV                  DVDZKROHDQGWRJLYHWKHFRQWUDFWODQJXDJHLWVRUGLQDU\DQG
 SUHFLVHO\ EHFDXVH WKH WHUP LV VXVFHSWLEOH WR PXOWLSOH              QDWXUDOPHDQLQJ6HH&RPHULFD%DQNY/H[LQJWRQ,QV&R
LQWHUSUHWDWLRQVLWZRXOGQHFHVVDULO\IROORZWKDW&RQUDLOjV                 )GWK&LU  $GLVWULFWFRXUWjVUROHLQ
EUHDFKRIWKH$JUHHPHQWLIRQHRFFXUUHGDWDOOZDVDVUHFHQW                FRQVWUXLQJWKHWHUPVRIDFRQWUDFWLVQRWXQTXDOLILHGKRZHYHU
DV  ZKHQ &RQUDLO      UHIXVHG WR SDUWLFLSDWH LQ WKH              m:KHUH>DFRQWUDFW
V@PHDQLQJLVREVFXUHDQGLWVFRQVWUXFWLRQ
EHDXWLILFDWLRQ SURMHFW  :H WKHUHIRUH ILQG QR HUURU LQ WKH          GHSHQGV XSRQ RWKHU DQG H[WULQVLF IDFWV LQ FRQQHFWLRQ ZLWK
GLVWULFW FRXUWjV GHQLDO RI &RQUDLOjV PRWLRQ IRU VXPPDU\                ZKDW LV ZULWWHQ WKH TXHVWLRQ RI LQWHUSUHWDWLRQ VKRXOG EH
MXGJPHQWRQWKLVEDVLV                                                       VXEPLWWHGWRWKHMXU\XQGHUSURSHULQVWUXFWLRQVl'j$YDQ]R
                                                                              Y :LVH 	 0DUVDF 3&  1:G   0LFK &W
                                                                              $SSLQWHUQDOFLWDWLRQVDQGTXRWDWLRQPDUNVRPLWWHG
                                                                              7KHUXOHRIODZWKDWKDVHPHUJHGIURP'j$YDQ]RRQHZKLFK
                                                                              JXLGHVRXUFRQVLGHUDWLRQRIWKLVFDVHLVWKDWm>D@FRQWUDFWLV
                                                                              DPELJXRXV LI WKH ODQJXDJH LV VXVFHSWLEOH WR WZR RU PRUH
                                                                              UHDVRQDEOHLQWHUSUHWDWLRQVl,G
     
     :HUH ZH WR DFFHSW WKH &LW\jV GHILQLWLRQ RI mUHQHZl DQG UHTXLUH
                                                                                7KH SDUWLHV VXJJHVW WKDW SURSHU UHVROXWLRQ RI WKLV DSSHDO
&RQUDLO WR UHVWRUH LWV EULGJHV WR D OLNHQHZ TXDOLW\ WKHQ &RQUDLO ZRXOG EH   UHTXLUHVDFORVHH[DPLQDWLRQRISDUDJUDSKVDQGRIWKH
XQGHU D FRQWLQXLQJ GXW\ WR UHVWRUH LWV EULGJHV RU IDFH D SRVVLEOH VXLW IRU    $JUHHPHQW
EUHDFK RI FRQWUDFW   :H QRWH WKDW VXFK D FRQVWUXFWLRQ ZRXOG OLNHO\ UDLVH
D VWDWXWHRIOLPLWDWLRQV EDU WR WKH LQVWDQW DFWLRQ DV &RQUDLO ZRXOG KDYH        7KH 5DLOURDGV HDFK DJUHH WR FDXVH WKH GHWDLOV RI
EUHDFKHG WKH $JUHHPHQW VHYHUDO \HDUV DJR ZKHQ LW IDLOHG WR UHVWRUH WKH
                                                                                GHVLJQDQGFRQVWUXFWLRQRIDOOEULGJHVWUXFWXUHVLQFOXGLQJ
GHFD\LQJ EULGJHV WR WKHLU RULJLQDO FRQGLWLRQV   7R WKH FRQWUDU\ ZH DUH
SHUVXDGHG WKDW LI WKH $JUHHPHQW LQFOXGHG DQ LQWHQWLRQ WR ELQG WKH UDLOURDG
                                                                                ERWK VXEVWUXFWXUHV DQG VXSHUVWUXFWXUHV WR FRQIRUP LQ
WR D EHDXWLILFDWLRQ SURMHFW  DV DOUHDG\ QRWHG D TXHVWLRQ ZH FDQQRW           DSSHDUDQFHDQGDUFKLWHFWXUDOOLQHVWRDVLQJOHVWDQGDUG
UHVROYH  WKHQ DQ\ EUHDFK FRXOG RFFXU RQO\ DW VXFK WLPH DV WKH UDLOURDG        DQGWKH5DLOURDGVIXUWKHUDJUHHWKDWGUDZLQJVFRYHULQJDOO
UHIXVHG WR SDUWLFLSDWH
      &LW\RI:\DQGRWWHY                         1R       1R                          &LW\RI:\DQGRWWHY         
       &RQVROLGDWHG5DLO&RUS                                                                          &RQVROLGDWHG5DLO&RUS

    VXFK GHVLJQ DQG FRQVWUXFWLRQ VKDOO EH VXEMHFW WR WKH                               &&RQFOXVLRQ
    DSSURYDORIWKH%RDUGLQWKHDERYHUHJDUG
                                                                 7KHODQJXDJHRIWKH$JUHHPHQWLVDPELJXRXV$KRVWRI
    $IWHUWKHFRPSOHWLRQRIWKHZRUNVKHUHLQSURYLGHG            FRPSHWLQJ GHILQLWLRQV D VFDUFLW\ RI FRQWUROOLQJ FDVHODZ
    IRUHDFK5DLOURDGDJUHHVWRPDLQWDLQUHSDLUDQGUHQHZDW        LQWHUSUHWLQJWKHWHUPVDWLVVXHLQWKLVFDVHDQGDVHHPLQJO\
    LWVRZQH[SHQVHDOOSDUWVRILWVEULGJHVWUXFWXUHVWUDFN        LQFRQVLVWHQW XQGHUVWDQGLQJ RI WKH WHUPV E\ WKH SDUWLHV DV
    VWUXFWXUHV UHWDLQLQJ ZDOOV SLHUV DEXWPHQWV DQG            HYLGHQFHGE\WKHLUUHVSHFWLYHFRQGXFWFRQILUPWKLVSRLQW7KH
    ZLQJZHOOVZLWKLQWKHOLQHVRILWVULJKWRIZD\          'j$YDQ]R VWDQGDUG LV FOHDU  :KHUH GLVSXWHG FRQWUDFWXDO
                                                                      ODQJXDJHLVVXEMHFWWRPXOWLSOHUHDVRQDEOHLQWHUSUHWDWLRQVD
  7KH &LW\ HPSKDVL]HV WKDW SDUDJUDSK  IDLOV WR XVH WKH     UHYLHZLQJ FRXUW PXVW FRQFOXGH WKDW WKDW ODQJXDJH LV
PRGLILHUmQHZlWRGHVFULEHWKHmGHVLJQDQGFRQVWUXFWLRQlRI           DPELJXRXV7KXVWKHLQWHQWRIWKHSDUWLHVDWWKHWLPHWKDW
WKH EULGJHV DQG WKXV VKRXOG EH UHDG WR HQFRPSDVV DOO        WKH\ HQWHUHG LQWR WKH $JUHHPHQW FRQFHUQLQJ &RQUDLOjV
FRQVWUXFWLRQSHUWDLQLQJWRWKHUDLOURDGEULGJHVDQGQRWVROHO\       SDUWLFLSDWLRQLQDEULGJHEHDXWLILFDWLRQSURMHFWDQGWKHH[WHQW
QHZ GHVLJQ RU QHZ FRQVWUXFWLRQ DV &RQUDLO VXEPLWV  :H      WR ZKLFK &RQUDLO LV FRQWUDFWXDOO\ UHVSRQVLEOH IRU PDNLQJ
GLVDJUHH  $OWKRXJK WKH &LW\ DUJXHV RWKHUZLVH ZH GR QRW     FRVPHWLF LPSURYHPHQWV RI LWV EULGJHV DUH LVVXHV RI IDFW
EHOLHYHWKDW&RQUDLOjVSDUWLFLSDWLRQLQDEHDXWLILFDWLRQSURMHFW      SURSHUO\ UHVROYHG E\ D MXU\  7KH GLVWULFW FRXUWjV JUDQW RI
DQGDQ\DWWHQGDQWEULGJHLPSURYHPHQWDWDOOFRQFHUQVGHVLJQ           VXPPDU\MXGJPHQWRQWKLVEDVLVZDVHUURU
RU FRQVWUXFWLRQ DV SURYLGHG IRU LQ SDUDJUDSK   %\ WKH
SDUWLHVjRZQDGPLVVLRQVZKHQWKH$JUHHPHQWZDVHQWHUHG                           ,,,67$787(2)/,0,7$7,216
LQWR LQ  WKH EULGJHV LQ TXHVWLRQ KDG QRW \HW EHHQ
FRQVWUXFWHG7KXVSURSHUO\YLHZHGLQWKLVFRQWH[WSDUDJUDSK           &RQUDLOPDLQWDLQVQRZDVLWGLGEHIRUHWKHGLVWULFWFRXUW
ZRXOGVHHPWRJRYHUQWKHSURFHGXUHVH[DQWHE\ZKLFKWKH           WKDWDQ\FDXVHRIDFWLRQIRULWVDOOHJHGEUHDFKRIFRQWUDFWLV
SDUWLHVZHUHWRGHVLJQDQGFRQVWUXFWWKHEULGJHV3DUDJUDSK          EDUUHGE\0LFKLJDQjVVWDWXWHRIOLPLWDWLRQVZKLFKUHTXLUHV
E\FRQWUDVWDVHYLGHQFHGE\LWVXVHRIWKHSKUDVHm>D@IWHU       WKDWVXFKDQDFWLRQEHLQLWLDWHGZLWKLQVL[\HDUVRIWKHDOOHJHG
WKHFRPSOHWLRQRIWKHZRUNVKHUHLQSURYLGHGIRUlVHWVIRUWK          EUHDFK6HH0LFK&RPS/DZV$QQ:HVW
WKHGXWLHVRIWKHUDLOURDGVZLWKUHVSHFW WRWKHEULGJHVRQFH           &RQUDLO DUJXHV WKDW EHFDXVH WKH UDLOURDG KDV QHYHU
FRQVWUXFWHG  :H WKXV WXUQ RXU DWWHQWLRQ WR SDUDJUDSK     mPDLQWDLQ>HG@ UHSDLU>HG@ DQG UHQHZ>HG@l WKH EULGJH IRU
ZKLFK SUHVHQWV XV ZLWK WKH FRUH LVVXH RI FRQWHQWLRQ LH   FRVPHWLF SXUSRVHV LW QHFHVVDULO\ EUHDFKHG WKH FRQWUDFW
ZKHWKHULWVXVHRIWKHSKUDVHmPDLQWDLQUHSDLUDQGUHQHZl            GHFDGHVEHIRUHWKH&LW\LQLWLDWHGWKHLQVWDQWODZVXLW,QIDFW
LQGLFDWHVDFOHDULQWHQWLRQRIWKHFRQWUDFWLQJSDUWLHVWRUHTXLUH     &RQUDLOVXJJHVWVLIWKH&LW\VWDQGVE\LWVSURSRVHGGHILQLWLRQ
&RQUDLO WR SDUWLFLSDWH LQ D FRVPHWLF LPSURYHPHQW SURJUDP       RI mUHQHZl WKHQ &RQUDLOjV  UHSDLU DFWLRQV D IRUWLRUL
WKDW ZDV QRW H[SUHVVO\ FRQWHPSODWHG DW WKH WLPH WKDW WKH     FRQVWLWXWHGDEUHDFKRIWKH$JUHHPHQWEHFDXVHVXFKDFWLRQV
SDUWLHVHQWHUHGLQWRWKH$JUHHPHQW                                   PDLQWDLQHGRQO\WKHVWUXFWXUDOVRXQGQHVVRIWKHEULGJHVDQG
                                                                      IDLOHGWRUHWXUQWKHPWRWKHLUmRULJLQDOlFRQGLWLRQV7KH&LW\
   ,IWKHZRUGVmPDLQWDLQUHSDLUDQGUHQHZlDUHVXVFHSWLEOHWR       UHVSRQGVWKDW&RQUDLOEUHDFKHGWKH$JUHHPHQWLQZKHQ
DWOHDVWWZRUHDVRQDEOHLQWHUSUHWDWLRQVWKHQZHPXVWUHMHFWWKH      LWUHIXVHGWRSDUWLFLSDWHLQWKHEHDXWLILFDWLRQSURMHFWDQGLWV
GLVWULFW FRXUWjV ILQGLQJ DQG UHYHUVH LWV JUDQW RI VXPPDU\     LQLWLDWLRQRIWKLVDFWLRQLQIRXU\HDUVDIWHUWKLVDOOHJHG
MXGJPHQW  :KHUH D FRQWUDFW SURYLGHV OLWWOH JXLGDQFH LQ       EUHDFKZDVWKHUHIRUHWLPHO\5HMHFWLQJ&RQUDLOjVDUJXPHQW
LQWHUSUHWLQJ D GLVSXWHG WHUP ZH PD\ SURSHUO\ ORRN WR WKH
    &LW\RI:\DQGRWWHY                          1R      1R                          &LW\RI:\DQGRWWHY          
      &RQVROLGDWHG5DLO&RUS                                                                          &RQVROLGDWHG5DLO&RUS

+DPSHUVjVGHILQLWLRQSURSHUO\VXSSRUWVWKH&LW\jVFRQWHQWLRQ         SODLQODQJXDJHRIWKHFRQWUDFWVHH1$P6SHFLDOW\,QV&R
WKDW&RQUDLOLVFRQWUDFWXDOO\UHVSRQVLEOHIRUUHVWRULQJWRDQHZ     Y0\HUV)GWK&LUWRUHOHYDQW
FRQGLWLRQWKHEULGJHVDWLVVXHZKLFKZRXOGQHFHVVDULO\HQWDLO       GLFWLRQDU\GHILQLWLRQV RIWKHWHUPVHH.HUQV,QFY:HOOD
FHUWDLQFRVPHWLFPRGLILFDWLRQV:HWKXVFDQQRWFRQFOXGHWKDW        &RUS)GWK&LUWRRWKHUGHFLVLRQV
mUHSDLUl DV XVHG E\ WKH SDUWLHV LQ SDUDJUDSK             RIFRXUWVWKDWKDYHSUHYLRXVO\LQWHUSUHWHGWKHWHUPVHH8QLWHG
XQDPELJXRXVO\UHTXLUHV&RQUDLOWRSHUIRUPRQLWVEULGJHVWKH         1DWjO,QV&RY667)LWQHVV&RUS)GWK
FRVPHWLFLPSURYHPHQWVUHTXHVWHGE\WKH&LW\                         &LUWRWKHVWDQGDUGVDQGSUDFWLFHVZLWKLQWKHUHOHYDQW
                                                                     LQGXVWU\VHH%RRWKY1$P$OXPLQXP&RUS)G
   &RQUDLOVHWWLQJIRUWKLWVVWURQJHVWDUJXPHQWWKDWWKHWHUPV      WK&LUDQGWRKRZWKHSDUWLHVjDFWLRQVGXULQJWKH
DUHDPELJXRXVSRLQWVWRWHQGLIIHUHQWDFFHSWHGGHILQLWLRQVRI       SHQGHQF\RIWKHDJUHHPHQWKDYHUHIOHFWHGDQXQGHUVWDQGLQJRI
mUHQHZlLQFOXGLQJmWRUHSDLUlDQGmWRUHSODFHlDQGDUJXHV          WKHWHUP:LOOLDP&5RQH\	&RY)HG,QV&R)G
WKDW HYHQ WKH GLFWLRQDU\ UHOLHG XSRQ E\ WKH &LW\ SURYLGHV   WK&LU$FDUHIXOUHYLHZRIHDFKRIWKHVH
VHYHUDO FRPSHWLQJ GHILQLWLRQV RI mUHQHZl  7KH &LW\ E\      FRQVLGHUDWLRQV UHYHDOV WKDW WKH VXEVWDQFH DQG H[WHQW RI
FRQWUDVWIRFXVHVRQO\RQRQHGHILQLWLRQRImUHQHZlmWREH          &RQUDLOjVREOLJDWLRQVXQGHUWKH$JUHHPHQWDQGWKHVXEVLGLDU\
UHVWRUHGWRDIRUPHUVWDWHEHFRPHQHZRUDVLIQHZDJDLQl          TXHVWLRQRIZKHWKHU&RQUDLOLVFRQWUDFWXDOO\UHVSRQVLEOHIRU
3HUKDSV UHFRJQL]LQJ WKDW QR 0LFKLJDQ FRXUW HYHU KDV           WKHFRVPHWLFLPSURYHPHQWVRILWVEULGJHVLVVXEMHFWWRPRUH
DWWHPSWHG WR GHILQH mUHQHZl WKH &LW\ UHOLHV XSRQ DQ ,RZD   WKDQRQHUHDVRQDEOHLQWHUSUHWDWLRQ7KDWTXHVWLRQWKHUHIRUH
FDVH:DONHUY'ZHOOH1:,RZDWRVXSSRUW         LVSURSHUO\UHVROYHGE\DMXU\DQGDFFRUGLQJO\WKHGLVWULFW
LWVSRVLWLRQ7KHUHWKH,RZD6XSUHPH&RXUWFRQFOXGHGWKDW          FRXUWjVFRQFOXVLRQFDQQRWVWDQG
mUHQHZlPHDQVmWRUHFRQVWUXFWlDQGGHILQHGmUHSDLUlDVmWR
PHQGDGGWRRUPDNHRYHUUHVWRUHWRDVRXQGFRQGLWLRQDIWHU                 $,QGXVWU\6WDQGDUG	3ULRU'HDOLQJV
GHFD\ZDVWHLQMXU\RUSDUWLDOGHVWUXFWLRQl,GDW,Q
DQRWKHUFDVHRQHRIWKHIHZZHKDYHXQFRYHUHGLQZKLFKD               7KHVWDQGDUGVDQGSUDFWLFHVZLWKLQWKHUDLOURDGLQGXVWU\DQG
FRXUWKDVGHILQHGmUHQHZlWKH3HQQV\OYDQLD6XSUHPH&RXUW            WKH SULRU GHDOLQJV EHWZHHQ WKH &LW\ DQG &RQUDLO VXJJHVW D
VSHFLILFDOO\ IRXQG WKDW WKH ZRUG mUHQHZl HQWDLOHG DQ          VLJQLILFDQWGLYHUJHQFHEHWZHHQWKHGLVWULFWFRXUWjVFRQFOXVLRQ
REOLJDWLRQWRPDNHOLNHQHZ6HH3HQQ5&RY3HQQ2KLR         DQGZKDWWKHWHUPVRIWKH$JUHHPHQWH[SUHVVO\UHTXLUH)LUVW
(OHF&R$3D                               &RQUDLO DSSHQGHG WR LWV PRWLRQ IRU VXPPDU\ MXGJPHQW
                                                                     XQFRQWURYHUWHGDIILGDYLWVDVVHUWLQJWKDWWKHDFFHSWHGSUDFWLFH
  :H FDQQRW FRQFOXGH ZKHWKHU WKH WHUP mUHQHZl DV             LQWKHUDLOURDGLQGXVWU\LVQRWWRLQWHUSUHWVXFKODQJXDJHDVWR
FRQWHPSODWHGE\WKHSDUWLHVWRWKH$JUHHPHQWZDVLQWHQGHG           UHTXLUHFRVPHWLFLPSURYHPHQWV:HDUHXQFRQYLQFHGWKDWWKH
WRVXJJHVWDQLGHDRIRXWULJKWEULGJHUHSODFHPHQWRURQHRI          FUHGLELOLW\ RI WKHVH DIILGDYLWV LV XQGHUFXW E\ WKH &LW\jV
EULGJHUHFRQVWUXFWLRQRUPHUHO\RQHRIUHVWRUDWLRQWRDQHZ          XQVXSSRUWHGDVVHUWLRQWKDWWKHRWKHUSDUWLHVWRWKH$JUHHPHQW
TXDOLW\ RU FRQGLWLRQ E\ UHVRUW WR FRVPHWLF HQKDQFHPHQWV      SDUWLFLSDWHG LQ WKH EHDXWLILFDWLRQ SURMHFW EHFDXVH WKH\
3UHFLVHO\EHFDXVHWKHUHDUHPXOWLSOHGHILQLWLRQVRImUHQHZl         EHOLHYHGWKDWWKH$JUHHPHQWGHPDQGHGVXFKSHUIRUPDQFH
ZHPXVWFRQFOXGHWKDWLQWHUSUHWDWLRQRIWKHWHUPLVDPELJXRXV
XQGHUWKH'j$YDQ]RVWDQGDUG                                           6HFRQG ZH QRWH WKDW WKH &LW\ UDLVHG QR REMHFWLRQ WR
                                                                     &RQUDLOjVSHUIRUPDQFHRILWVREOLJDWLRQVXQGHUWKH$JUHHPHQW
                                                                     XQWLO WKH &LW\ EHJDQ LWV EHDXWLILFDWLRQ SURMHFW LQ WKH HDUO\
                                                                     V(YHQWKHGLVWULFWFRXUWH[SUHVVHGmVRPHSDXVHLQ>LWV@
      &LW\RI:\DQGRWWHY                            1R       1R                          &LW\RI:\DQGRWWHY          
       &RQVROLGDWHG5DLO&RUS                                                                             &RQVROLGDWHG5DLO&RUS

GLUHFWLRQE\WKHIDFWWKDWRYHUDUHODWLYHO\ORQJSHULRGRI        mUHSDLUlHDFKSDUW\DVVHUWVWKDWmUHSDLUlLVSURSHUO\GHILQHG
WLPHWKHSDUWLHVKDYHDSSDUHQWO\LQWHUSUHWHGWKHODQJXDJH          DVUHVWRULQJDQREMHFWWRDVRXQGFRQGLWLRQDIWHUGDPDJHRU
LQDZD\WKDWGLGQjWLPSRVHDSDUWLFXODUGXW\WKDWUHTXLUHGWKH          GHFD\  WKH FDVHV WKH\ FLWH LQ VXSSRUW RI WKHLU UHVSHFWLYH
UDLOURDG>WRSDUWLFLSDWHLQVXFKDSURJUDP@l                            SRVLWLRQVUHIOHFWDODFNRIFRQVHQVXVDVDUHYLHZRI+DPSHUV
                                                                         Y'DUOLQJ$G3DDQG:DONHUY&LW\RI
  )LQDOO\WKHGLVWULFWFRXUWDOVRKDGEHIRUHLWFRUUHVSRQGHQFH          'HWURLW  1:  0LFK  UHYHDOV  $W LVVXH LQ
IURP WKH &RXQW\ DFNQRZOHGJLQJ WKDW VLQFH WKH PLGV           +DPSHUVZDVWKHLQWHUSUHWDWLRQRIDOHDVHFODXVHSURYLGLQJ
&RQUDLOjV PDLQWHQDQFH RI WKH EULGJHV LQ TXHVWLRQ KDV              WKDWmWKHOHVVHHVKDOODWDOOWLPHVPDLQWDLQDQGNHHSLQJRRG
FRPSOLHGZLWKWKH$JUHHPHQW(YHQDUHSRUWFLWHGE\WKH&LW\            UHSDLUWKHPRWRUDQGRWKHUHTXLSPHQWZKLFKRSHUDWHVDZHOO
DQGSUHSDUHGE\DQLQGHSHQGHQWHQJLQHHULQJFRQVXOWLQJILUP               IRUWKHSUHPLVHVl$GDW7KH+DPSHUV&RXUWLQ
SURYLGHG GHILQLWLRQV RI WKH GLVSXWHG WHUPV WKDW EROVWHU           FRQVWUXLQJmWRPDLQWDLQDQGNHHSLQJRRGUHSDLUlIRXQGWKDW
&RQUDLOjV SRVLWLRQ DQG VXSSRUW RXU FRQFOXVLRQ WKDW WKH            WKHSKUDVHLPSOLHVmWKHSUHVHUYDWLRQRIWKHVWDWXVTXRRUD
$JUHHPHQWLVVXVFHSWLEOHWRPXOWLSOHLQWHUSUHWDWLRQV                    UHVWRUDWLRQ DSSUR[LPDWHO\ WR WKH RULJLQDO FRQGLWLRQl EXW
                                                                         UHIXVHGmWRFRQVWUXH>WKHSKUDVH@DVEHLQJV\QRQ\PRXVZLWK
    0DLQWHQDQFHLQYROYHVURXWLQHDFWLRQVVXFKDVFOHDQLQJ              WKHWHUPµUHSODFHjlQRWLQJWKDWWKHSDUWLHVZRXOGKDYHXVHG
    SDLQWLQJ GHVLJQHG WR SUHVHUYH WKH FRQGLWLRQ RI WKH          WKHZRUGmUHSODFHlKDGWKH\LQWHQGHGWKHOHDVHDJUHHPHQWWR
    VWUXFWXUH5HSDLULQYROYHVSHUIRUPLQJVSHFLILFDFWLRQVWR           VRSURYLGH,GDW7KH&LW\VXJJHVWVWKDW+DPSHUVZKHQ
    DGGUHVV ORFDOL]HG DUHDV RI GLVWUHVV  HJ 3DWFKLQJ         FRQVLGHUHG LQ OLJKW RI FRPPRQO\ DFFHSWHG GLFWLRQDU\
    5HQHZRUUHKDELOLWDWLRQRIWKHVWUXFWXUHHQWDLOVV\VWHPDWLF          GHILQLWLRQV RI mUHSDLUl VXSSRUWV LWV SRVLWLRQ HPSKDVL]LQJ
    DFWLYLWLHVWRLPSURYHWKHVHUYLFHDELOLW\OHYHOH[WHQGWKH           VXFKGHILQLWLRQVDVmWRUHVWRUHWRDJRRGRUVRXQGFRQGLWLRQ
    SHUIRUPDQFH OLIH DQG JHQHUDOO\ UHVWRUH D VWUXFWXUH WR        DIWHUGHFD\RUGDPDJHPHQGlDQGmWRUHVWRUHRUUHQHZE\DQ\
    IXQFWLRQDODGHTXDF\                                                 SURFHVVRIPDNLQJJRRGl
     %'LFWLRQDU\'HILQLWLRQV	,QWHUSUHWLYH&DVHODZ                       ,Q ZKDW LV DSSDUHQWO\ WKH RQO\ 0LFKLJDQ FDVH WR KDYH
                                                                         GHILQHG mUHSDLUl WKH 0LFKLJDQ 6XSUHPH &RXUW IRXQG WKDW
  7KHUHDSSHDUVWREHQRGLVSXWHFRQFHUQLQJWKHGHILQLWLRQRI            mUHSDLUl UHODWHG WR NHHSLQJ WKH REMHFW LQ TXHVWLRQ mLQ D
mPDLQWDLQl7KHGLFWLRQDU\UHOLHGXSRQE\&RQUDLOVXJJHVWV              VHUYLFHDEOHDQGVDIHFRQGLWLRQl6HH:DONHU1:DW
DQ LGHD RI NHHSLQJ LQ DQ H[LVWLQJ VWDWH RI HIILFLHQF\  6HH   8QOLNHWKH3HQQV\OYDQLD6XSUHPH&RXUWLQ+DPSHUV
$PHULFDQ+HULWDJH'LFWLRQDU\G&ROOHJLDWHHG7KH              WKH:DONHU&RXUWUHIXVHGWRH[WHQGLWVGHILQLWLRQWRLQFOXGH
&LW\ XUJHV VLPLODU GHILQLWLRQV mWR NHHS LQ GXH FRQGLWLRQ       FRQVWUXFWLRQ RU UHFRQVWUXFWLRQ OLPLWLQJ LW LQVWHDG WR
RSHUDWLRQ RU IRUFH NHHS XQLPSDLUHGl :HEVWHUjV                     PRGLILFDWLRQVWKDWQHLWKHUFKDQJHWKHFKDUDFWHURIQRUUHVXOW
(QF\FORSHGLD8QDEULGJHG'LFWLRQDU\RIWKH(QJOLVK/DQJXDJH               LQDVXEVWLWXWLRQRIWKHREMHFWLQTXHVWLRQ6HHLGDW
  DQG mWR FDUH IRU SURSHUW\ IRU SXUSRVHV RI         :H ILQG :DONHU LQVWUXFWLYH LQDVPXFK DV LWV GHILQLWLRQ RI
RSHUDWLRQ SURGXFWLYLW\ RU DSSHDUDQFH WR HQJDJH LQ JHQHUDO        mUHSDLUlGLIIHUHQWIURPWKDWVHWIRUWKLQ+DPSHUVVXSSRUWV
UHSDLU DQG XSNHHSl %ODFNjV /DZ 'LFWLRQDU\  WK HG          &RQUDLOjV SRVLWLRQ WKDW WKH GLVSXWHG WHUPV DUH LQ IDFW
                                                                   DPELJXRXV,QGHHG:DONHUjVGHILQLWLRQVXSSRUWV&RQUDLOjV
                                                                         DVVHUWLRQWKDWLWLVUHTXLUHGRQO\WRPDLQWDLQWKHEULGJHVIRU
  7KH SUHFLVH GHILQLWLRQV RI mUHSDLUl DQG mUHQHZl DUH OHVV       ZKLFK LW LV UHVSRQVLEOH LQ D VHUYLFHDEOH DQG VDIH FRQGLWLRQ
HDVLO\GHWHUPLQHG:KLOHWKHUHDSSHDUVWREHQRUHDOGLVSXWH            ZLWKRXW XQGHUWDNLQJ SXUHO\ FRVPHWLF LPSURYHPHQWV
EHWZHHQWKHSDUWLHVFRQFHUQLQJWKHGLFWLRQDU\GHILQLWLRQVRI
