00a0235p.06

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 DS
81,7('67$7(6&28572)$33($/6
)257+(6,;7+&,5&8,7
BBBBBBBBBBBBBBBBB
7+( 3871$0 3,7 ,1&
*(2))5(< '$9,',$1
3ODLQWLIIV$SSHOODQWV
Y
&,7< 2) &22.(9,//(
7(11(66(( -,0 6+,3/(<
'HIHQGDQWV$SSHOOHHV
;!

1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH0LGGOH'LVWULFWRI7HQQHVVHHDW&RRNHYLOOH
1R²7KRPDV$+LJJLQV'LVWULFW-XGJH
$UJXHG2FWREHU
'HFLGHGDQG)LOHG-XO\
%HIRUH-21(6%2**6DQG&2/(&LUFXLW-XGJHV
BBBBBBBBBBBBBBBBB
&2816(/
$5*8(' 6DPXHO - +DUULV +$55,6 /$: ),50
&RRNHYLOOH 7HQQHVVHH IRU $SSHOODQWV -RKQ & 'XII\
:$7621+2//2: 5((9(6.QR[YLOOH7HQQHVVHH
IRU $SSHOOHHV 21 %5,() 6DPXHO - +DUULV +$55,6

-- 1 of 10 --

3XWQDP3LW,QFHWDOY
&LW\RI&RRNHYLOOHHWDO
1R
/$:),50&RRNHYLOOH7HQQHVVHHIRU$SSHOODQWV-RKQ&
'XII\ :$7621 +2//2: 5((9(6 .QR[YLOOH
7HQQHVVHHIRU$SSHOOHHV-DQH(.LUWOH\81,9(56,7<2)
0,11(627$0LQQHDSROLV0LQQHVRWDIRU$PLFXV&XULDH
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
5 *8< &2/( -5 &LUFXLW -XGJH 3ODLQWLII *HRIIUH\
'DYLGLDQ DSSHDOV WKH GLVWULFW FRXUW¶V JUDQW RI VXPPDU\
MXGJPHQW RQ KLV FODLPV WKDW WKH &LW\ RI &RRNHYLOOH
7HQQHVVHH DQG LWV FLW\ PDQDJHU -LP 6KLSOH\ YLRODWHG KLV
)LUVW$PHQGPHQWULJKWVE\ IDLOLQJWRSURYLGHKLPFRSLHV
RIRUDFFHVVWRHOHFWURQLFLQIRUPDWLRQKHOGE\WKHFLW\DQG
UHIXVLQJWRHVWDEOLVKDK\SHUWH[WOLQNIURPWKHFLW\¶V:HEVLWH
WRWKH:HEVLWHRIKLVSXEOLFDWLRQ7KH3XWQDP3LW)RUWKH
IROORZLQJ UHDVRQV ZH $)),50 WKH JUDQW RI VXPPDU\
MXGJPHQW ZLWK UHJDUG WR WKH UHFRUGV FKDOOHQJH EXW
5(9(56(DQG5(0$1'IRUDWULDORQWKHK\SHUWH[WOLQN
FODLP
,
7KH 3XWQDP 3LW D VPDOO IUHH WDEORLG DQG :HE SDJH
SXEOLVKHGDQGHGLWHGE\'DYLGLDQLVDVHOIDSSRLQWHGH\HRQ
JRYHUQPHQWFRUUXSWLRQIRUWKH&LW\RI&RRNHYLOOH'DYLGLDQ
ZKRGRHVQRWOLYHLQ7HQQHVVHHRULJLQDOO\EHFDPHLQWHUHVWHG
LQ&RRNHYLOOHLQEHFDXVHRIDQXQVROYHGPXUGHUWKDW
RFFXUUHGLQWKHDUHD2YHUWKHSDVWIHZ\HDUV'DYLGLDQDV
HGLWRURI7KH3XWQDP3LWKDVPDGHH[WHQVLYHUHTXHVWVIRU
SXEOLF LQIRUPDWLRQ IURP WKH FLW\ )RU H[DPSOH D FLW\
DGPLQLVWUDWLYHHPSOR\HHZKRKDQGOHGPDQ\RI'DYLGLDQ¶V
UHTXHVWV HVWLPDWHG WKDW IURP 0D\ WR $XJXVW
'DYLGLDQ¶VUHTXHVWVRFFXSLHGWRKRXUVRIFLW\HPSOR\HH
WLPH([FHSWIRUWKRVHZKLFKDUHWKHVXEMHFWRIWKLVVXLWPRVW
RIWKHVHUHTXHVWVHYHQVRPHZKLFKGXSOLFDWHGSULRUUHTXHVWV
ZHUHILOOHGE\WKHFLW\

-- 2 of 10 --

1R 3XWQDP3LW,QFHWDOY
&LW\RI&RRNHYLOOHHWDO

$ K\SHUOLQN RU ³OLQN´ FRQQHFWV RQH :HE VLWH WR DQRWKHU VR WKDW D
XVHU FDQ PRYH GLUHFWO\ IURP RQH :HE VLWH WR D VHFRQG
'DYLGLDQ ILOHG D PRWLRQ WR FRQVLGHU QHZO\ GLVFRYHUHG HYLGHQFH RQ
)HEUXDU\ DQG ILOHG D VXSSOHPHQW WR WKH PRWLRQ RQ 0DUFK
7KHVH PRWLRQV DUH GHQLHG E\ WKH FRXUW
6SHFLILFDOO\LQ-XO\'DYLGLDQUHTXHVWHGDFRS\RIWKH
FRPSXWHUILOHVRIWKHRXWVWDQGLQJSDUNLQJWLFNHWVLVVXHGE\WKH
FLW\7KHFLW\GLGQRWSURYLGHWKHVHILOHVLQHOHFWURQLFIRUP
EXWJDYHWKHPWR'DYLGLDQLQKDUGFRS\,Q2FWREHU
'DYLGLDQUHTXHVWHGWKDWWKHFLW\DOORZDK\SHUOLQNIURPWKH
FLW\¶V :HE VLWH WR 7KH 3XWQDP 3LW :HE VLWH EXW WKH FLW\
GHQLHGWKDWUHTXHVWDVZHOO
,Q6HSWHPEHUWKHFLW\SDVVHGDQRUGLQDQFHUHJDUGLQJ
SXEOLFDFFHVVWRUHFRUGVLQFOXGLQJDVSHFLILFDWLRQWKDWWKHFLW\
LV QRW REOLJHG WR SURYLGH HOHFWURQLF FRSLHV RI LQIRUPDWLRQ
ZKHQ LW LV QRW NHSW LQ WKDW IRUPDW LQ WKH QRUPDO FRXUVH RI
EXVLQHVV
,Q2FWREHU'DYLGLDQILOHGVXLWLQVWDWHFRXUWDJDLQVW
WKH&LW\RI&RRNHYLOOHDQG&LW\0DQDJHU-LP6KLSOH\LQKLV
RIILFLDOFDSDFLW\IRUYLRODWLRQVRIKLV)LUVW$PHQGPHQWGXH
SURFHVVDQGHTXDOSURWHFWLRQULJKWVDQGDYDULHW\RIVWDWHODZ
FODLPV/DWHUWKDWPRQWKWKHFLW\UHPRYHGWKH VXLWWRWKH
8QLWHG 6WDWHV 'LVWULFW &RXUW IRU WKH 0LGGOH 'LVWULFW RI
7HQQHVVHH 7KH GHIHQGDQWV WKHQ PRYHG IRU VXPPDU\
MXGJPHQW2Q6HSWHPEHUWKHGLVWULFWFRXUWJUDQWHG
VXPPDU\MXGJPHQWRQWKHIHGHUDOFODLPVDQGGLVPLVVHGWKH
VWDWH FODLPV ZLWKRXW SUHMXGLFH 'DYLGLDQ ILOHG D WLPHO\
DSSHDO2QDSSHDOKHDUJXHVWKDWWKHGLVWULFWFRXUWHUUHGLQ
JUDQWLQJ VXPPDU\ MXGJPHQW RQ KLV )LUVW $PHQGPHQW
FKDOOHQJHVEURXJKWXQGHU86&†WRWKHGHQLDORI
HOHFWURQLFDFFHVVWRWKHFLW\¶VSDUNLQJWLFNHWUHFRUGVDQGWRWKH
FLW\¶VUHIXVDOWRHVWDEOLVKDK\SHUWH[WOLQNIURPWKHFLW\¶V:HE
VLWH

-- 3 of 10 --

3XWQDP3LW,QFHWDOY
&LW\RI&RRNHYLOOHHWDO
1R
8QIRUWXQDWHO\WKHGLIIHUHQFHVEHWZHHQ'DYLGLDQDQGWKH
FLW\DUHQRWOLPLWHGWRWKLVVXLW'DYLGLDQDOVRKDVDQRWKHU
VLPLODU RXWVWDQGLQJ VXLW IRU DOOHJHG YLRODWLRQV RI KLV )LUVW
$PHQGPHQWULJKWVE\WKHFLW\7KLVUHODWHGVXLW ³'DYLGLDQ
,,´ ZDVILOHGE\'DYLGLDQDJDLQVW&RRNHYLOOH&LW\$WWRUQH\
70LFKDHO2¶0DUDLQKLVLQGLYLGXDODQGRIILFLDOFDSDFLW\
DQG 6KLSOH\ LQ KLV LQGLYLGXDO DQG RIILFLDO FDSDFLW\ ,Q
'DYLGLDQ,,ILOHGXQGHU86&†LQWKH8QLWHG6WDWHV
GLVWULFWFRXUWLQ0DUFK'DYLGLDQDOOHJHGWKDWKLVULJKWV
ZHUHYLRODWHGE\OLPLWLQJKLVDFFHVVWRFLW\UHFRUGVEDVHGRQ
KLV VWDWXV DV DQ RXWRIVWDWH &DOLIRUQLD UHVLGHQW DQG
LQWHUIHULQJ ZLWK WKH GLVWULEXWLRQ RI 7KH 3XWQDP 3LW LQ FLW\
EXLOGLQJV7KHVXLWZDVUHIHUUHGWRD8QLWHG6WDWHVPDJLVWUDWH
MXGJH ZKR UHFRPPHQGHG WKDW WKH GLVWULFW FRXUW JUDQW WKH
GHIHQGDQWV¶ PRWLRQ IRU VXPPDU\ MXGJPHQW $OWKRXJK
'DYLGLDQ ,, ZDV DFWXDOO\ ILOHG EHIRUH WKH LQVWDQW FDVH WKH
GLVWULFWFRXUWJUDQWHGGHIHQGDQWV¶VXPPDU\MXGJPHQWPRWLRQ
LQ'DYLGLDQ,,LQ)HEUXDU\DIWHUVXPPDU\MXGJPHQWKDG
EHHQJUDQWHGLQWKLVFDVH'DYLGLDQDSSHDOHGDJDLQ2Q$SULO
DSDQHORIWKLVFRXUWDIILUPHGWKHGLVWULFWFRXUWLQ
WKDWFDVH
,,
7KLV FRXUW UHYLHZV D GLVWULFW FRXUW¶V JUDQW RI VXPPDU\
MXGJPHQWGHQRYR6HH6PLWKY7KRUQEXUJ)G
WK&LU 6XPPDU\MXGJPHQWLVSURSHU³LIWKH
SOHDGLQJV GHSRVLWLRQV DQVZHUV WR LQWHUURJDWRULHV DQG
DGPLVVLRQVRQILOHWRJHWKHUZLWKWKHDIILGDYLWVLIDQ\VKRZ
WKDWWKHUHLVQRJHQXLQHLVVXHDVWRDQ\PDWHULDOIDFWDQGWKDW
WKHPRYLQJSDUW\LVHQWLWOHGWRDMXGJPHQWDVDPDWWHURIODZ´
)HG5&LY3 F 7KHFRXUWPXVWH[DPLQHDOOIDFWVDQG
LQIHUHQFHV LQ WKH OLJKW PRVW IDYRUDEOH WR WKH QRQPRYLQJ
SDUW\6HH$QGHUVRQY/LEHUW\/REE\,QF86

1R 3XWQDP3LW,QFHWDOY
&LW\RI&RRNHYLOOHHWDO

VXPPDU\MXGJPHQWEHFDXVH'DYLGLDQKDVUDLVHGDPDWHULDO
LVVXHRIIDFWUHJDUGLQJZKHWKHUWKHFLW\GLVFULPLQDWHGDJDLQVW
KLPDQGKLV:HEVLWHEDVHGXSRQYLHZSRLQW
9
)RUWKHIRUHJRLQJUHDVRQVZH$)),50WKHGLVWULFWFRXUW¶V
JUDQWRIVXPPDU\MXGJPHQWRQ'DYLGLDQ¶VFODLPWKDWKLV)LUVW
$PHQGPHQW ULJKWV ZHUH YLRODWHG E\ WKH FLW\¶V IDLOXUH WR
SURYLGH KLP ZLWK HOHFWURQLF SDUNLQJ WLFNHW UHFRUGV DQG
5(9(56(DQG5(0$1'WRWKHGLVWULFWFRXUWIRUIXUWKHU
SURFHHGLQJVFRQVLVWHQWZLWKWKLVRSLQLRQRQ'DYLGLDQ¶VFODLP
WKDWKLV)LUVW$PHQGPHQWULJKWVZHUHYLRODWHGE\GHQLDORID
K\SHUOLQNWRWKHFLW\¶V:HEVLWH

-- 4 of 10 --

3XWQDP3LW,QFHWDOY
&LW\RI&RRNHYLOOHHWDO
1R
RSHUDWHG WKURXJKRXW WKLV OLWLJDWLRQ DQG DOWKRXJK LW LV QRW
OLQNHG WR &RRNHYLOOH¶V VLWH LW FDQ EH DFFHVVHG WKURXJK D
YDULHW\RIRWKHUPHDQV
1HYHUWKHOHVVWKHUHTXLUHPHQWWKDW:HEVLWHVHOLJLEOHWREH
OLQNHGWRWKHFLW\¶VVLWHSURPRWHWKHFLW\¶VWRXULVPLQGXVWU\
DQGHFRQRPLFZHOIDUHJLYHVEURDGGLVFUHWLRQWRFLW\RIILFLDOV
UDLVLQJ WKH SRVVLELOLW\ RI GLVFULPLQDWRU\ DSSOLFDWLRQ RI WKH
SROLF\EDVHGRQYLHZSRLQW&I&LW\RI/DNHZRRGY3ODLQ
'HDOHU3XEO¶J&R86 GLVFXVVLQJLQ
WKHFRQWH[WRIZKHWKHURUQRWWRSHUPLWDIDFLDOFKDOOHQJHWRD
JRYHUQPHQWSROLF\WKHGDQJHURIYLHZSRLQWGLVFULPLQDWLRQ
XQGHUSROLFLHVWKDWSURYLGHIHZVWDQGDUGV ,QIDFWWKHFLW\¶V
LPSOHPHQWDWLRQ RI WKHVH SROLFLHV VXJJHVWV YLHZSRLQW
GLVFULPLQDWLRQ6HH8)&:)GDW H[DPLQLQJWKH
FLW\¶V DSSOLFDWLRQ RI LWV SROLF\ $OWKRXJK &RUGHU KDG QRW
UHIXVHGDOLQNWRRWKHUVZKRKDGUHTXHVWHGRQHZKHQ&RUGHU
ZDVDVNHGE\'DYLGLDQWRHVWDEOLVKDOLQN&RUGHUUHSRUWHGWKH
UHTXHVW WR -LP 6KLSOH\ &RUGHU FRQVLGHUHG 'DYLGLDQ
FRQWURYHUVLDO³EHFDXVHRIWKHFRQWHQWRIKLV:HEVLWHDQGWKH
PDQQHULQZKLFKKHEHKDYHVZKHQKHFRPHVWR&LW\+DOO´
/LNHZLVH6KLSOH\VWDWHGLQKLVGHSRVLWLRQWKDWKHWKRXJKW7KH
3XWQDP3LWFRQVLVWHGRQO\RI'DYLGLDQ¶VRSLQLRQVZKLFKKH
³GLGQ¶WFDUHIRU´ DQGWKDWWKHSDSHUGLVWRUWHGWKHWUXWK,Q
UHVSRQVH6KLSOH\VXJJHVWHGWKDWWKHFLW\OLPLWOLQNVWRLWV:HE
VLWHWRQRQSURILW:HEVLWHV:KHQ'DYLGLDQDVNHGZKHWKHU
KHZRXOGEHDOORZHGDOLQNLIKHZHUHDQRQSURILW6KLSOH\
LQGLFDWHG WKDW KH ZRXOG QRW 7KH FLW\ WKHQ GHYHORSHG LWV
FXUUHQW VWDQGDUG UHTXLULQJ OLQNHG VLWHV WR SURPRWH WKH
HFRQRPLF ZHOIDUH LQGXVWU\ RU WRXULVP RI WKH FLW\ 7KH
LPSOHPHQWDWLRQ RI WKLV QHZ SROLF\ ZKLFK ZDV DW OHDVW
VWLPXODWHG E\ 'DYLGLDQ¶V UHTXHVW ZDV WKHQ XVHG WR GHQ\
'DYLGLDQ¶V3XWQDP3LWVLWHDOLQNWRWKHFLW\¶V:HESDJH&I
,6.&2186DW VWDWLQJWKDWQRQSXEOLFIRUXPVWDWXV
³GRHVQRWPHDQWKDWWKHJRYHUQPHQWFDQUHVWULFWVSHHFKLQ
ZKDWHYHUZD\LWOLNHV´ 7KHFLW\¶VDFWLRQVVRPHRIZKLFK
DSSHDU WR EH WLHG WR WKH FLW\¶V LQWHUHVWV DQG RWKHUV ZKLFK
DSSHDUOHVVFOHDUO\UHOHYDQWWRWKHSXUSRVHRIWKHFLW\¶V:HE
VLWH OHDG XV WR 5(9(56( WKH GLVWULFW FRXUW¶V JUDQW RI
1R 3XWQDP3LW,QFHWDOY
&LW\RI&RRNHYLOOHHWDO

$V DQ LQLWLDO PDWWHU ZH UHMHFW WKH FLW\¶V DUJXPHQW WKDW WKLV DSSHDO LV
EDUUHG E\ WKH GLVWULFW FRXUW¶V VXPPDU\ MXGJPHQW LQ 'DYLGLDQ ,, EHFDXVH
RI LVVXH RU FODLP SUHFOXVLRQ ,VVXH SUHFOXVLRQ DSSOLHV ³ ZKHQ WKH LVVXH
SUHVHQWO\ DVVHUWHG ZDV DFWXDOO\ OLWLJDWHG LQ DQ HDUOLHU WULDO ZKHQ LW ZDV
DFWXDOO\ DQG QHFHVVDULO\ GHWHUPLQHG E\ D FRXUW RI FRPSHWHQW MXULVGLFWLRQ
DQG ZKHQ SUHFOXVLRQ LQ WKH VHFRQG WULDO GRHV QRW ZRUN DQ XQIDLUQHVV´
8QLWHG 6WDWHV Y %HUPDQ )G WK &LU &ODLP
SUHFOXVLRQ SURKLELWV WKH ³μSDUWLHV RU WKHLU SULYLHV IURP UHOLWLJDWLQJ LVVXHV
WKDW ZHUH RU FRXOG KDYH EHHQ UDLVHG¶ LQ D SULRU DFWLRQ´ .DQH Y 0DJQD
0L[HU &R )G WK &LU TXRWLQJ )HGHUDWHG 'HS¶W
6WRUHV ,QF Y 0RLWLH 86 7R ILQG FODLP
SUHFOXVLRQ WKHUH PXVW EH ³ D ILQDO GHFLVLRQ RQ WKH PHULWV E\ D FRXUW
RI FRPSHWHQW MXULVGLFWLRQ D VXEVHTXHQW DFWLRQ EHWZHHQ WKH VDPH
SDUWLHV RU WKHLU SULYLHV DQ LVVXH LQ WKH VXEVHTXHQW DFWLRQ ZKLFK ZDV
OLWLJDWHG RU ZKLFK VKRXOG KDYH EHHQ OLWLJDWHG LQ WKH SULRU DFWLRQ DQG
DQ LGHQWLW\ RI WKH FDXVHV RI DFWLRQ´ ,G $OWKRXJK WKH WZR VXLWV DUH
UHODWHG WKH IDFWXDO FLUFXPVWDQFHV XSRQ ZKLFK WKH\ DUH EDVHG DUH GLVWLQFW
VSHFLILFDOO\ WKH HYHQWV ZKLFK IRUP WKH EDVLV RI WKH VXLW EHIRUH WKLV SDQHO
RFFXUUHG DIWHU WKH ILOLQJ RI 'DYLGLDQ ,, LQ 0DUFK $FFRUGLQJO\
QHLWKHU FODLP SUHFOXVLRQ QRU LVVXH SUHFOXVLRQ EDUV WKLV DFWLRQ
,,,
'DYLGLDQDOOHJHVWKDWWKH&LW\RI&RRNHYLOOHYLRODWHGKLV
)LUVW$PHQGPHQWIUHHGRPRIWKHSUHVVE\GHQ\LQJKLPDFFHVV
WRFLW\SDUNLQJWLFNHWUHFRUGVLQHOHFWURQLFIRUP
7KHFROOHFWLRQRILQIRUPDWLRQLVDQLPSRUWDQWDVSHFWRI)LUVW
$PHQGPHQWIUHHGRPV6HH%UDQ]EXUJY+D\HV86
VWDWLQJ WKDW ³ZLWKRXW IUHHGRP WR DFTXLUH
LQIRUPDWLRQ WKH ULJKW WR SXEOLVK ZRXOG EH LPSHUPLVVLEO\
FRPSURPLVHG´ 7KLV DELOLW\ WR FROOHFW LQIRUPDWLRQ LV QRW
DEVROXWHKRZHYHU$OWKRXJKWKH)LUVW$PHQGPHQWSURWHFWV
LQIRUPDWLRQJDWKHULQJLWGRHVQRWSURYLGHEODQNHWDFFHVVWR
LQIRUPDWLRQZLWKLQWKHJRYHUQPHQW¶VFRQWURO6HH+RXFKLQV
Y.4(',QF86
)LUVW³>W@KH)LUVW$PHQGPHQWGRHVQRWJXDUDQWHHWKHSUHVV
D FRQVWLWXWLRQDO ULJKW RI VSHFLDO DFFHVV WR LQIRUPDWLRQ QRW
DYDLODEOHWRWKHSXEOLFJHQHUDOO\´%UDQ]EXUJ86DW
$OWKRXJK VRPH FLUFXPVWDQFHV PD\ GLFWDWH

-- 5 of 10 --

3XWQDP3LW,QFHWDOY
&LW\RI&RRNHYLOOHHWDO
1R
'DYLGLDQ DOOHJHV WKDW RQ DQRWKHU RFFDVLRQ IRU D GLIIHUHQW UHTXHVW KH
ZDV JLYHQ WKH VDPH UHVSRQVH
GLVWLQJXLVKLQJ MRXUQDOLVWV IURP WKH JHQHUDO SXEOLF WKH
GLIILFXOW\RIWKLVFRXUW¶VGHWHUPLQLQJZKRPD\EHFRQVLGHUHG
³SUHVV´LVREYLRXV6HH%UDQ]EXUJ86DWVHHDOVR
6PLWKY3ODWL)6XSSG '&ROR
UHMHFWLQJ FODLP RI D SXEOLVKHU RI DQ ,QWHUQHW :HE VLWH RQ
8QLYHUVLW\RI&RORUDGRDWKOHWLFVZKRDOOHJHGDPRQJRWKHU
WKLQJV WKDW KH KDG EHHQ GHQLHG SUHVV SULYLOHJHV E\ D
XQLYHUVLW\ PHGLD OLDLVRQ ,Q WKLV FDVH 'DYLGLDQ E\
SXEOLVKLQJ7KH3XWQDP3LWLVDNLQWRDWZHQW\ILUVWFHQWXU\
³ORQHO\ SDPSKOHWHHU´ %UDQ]EXUJ 86 DW ZKRVH
DFFHVV WR LQIRUPDWLRQ PXVW EH HTXDO WR WKDW JUDQWHG WR
PHPEHUVRIWKHSXEOLF7KHUHLVQRLQGLFDWLRQLQWKHUHFRUG
WKDWDFFHVVWRSDUNLQJWLFNHWUHFRUGVLQHOHFWURQLFIRUPKDG
HYHUEHHQDOORZHGE\WKHFLW\'DYLGLDQKDVQRJUHDWHUULJKW
WRWKLVLQIRUPDWLRQWKDQWKHJHQHUDOSXEOLFDFFRUGLQJO\WKH
FLW\ GRHV QRW KDYH DQ DIILUPDWLYH GXW\ WR SURYLGH WKLV
LQIRUPDWLRQWRKLP6HH3HOOY3URFXQLHU86

'DYLGLDQDGPLWVWKDWKHKDGDFFHVVWRWKHSDUNLQJWLFNHWVLQ
KDUG FRS\ DOWKRXJK KH FRPSODLQV RI EHLQJ GHQLHG WKH
LQIRUPDWLRQ LQ HOHFWURQLF IRUP DQG EHLQJ KDUDVVHG E\ FLW\
RIILFLDOV DQG RQ RQH RFFDVLRQ DUULYLQJ DW FLW\ RIILFHV DQG
EHLQJWROGWKDWQRRQHFRXOGKHOSKLPWKDWGD\'DYLGLDQ
ZURWHDVWRU\IRU7KH3XWQDP3LWEDVHGRQWKHSDUNLQJWLFNHWV
KH UHYLHZHG 'DYLGLDQ KRZHYHU DVVHUWV WKDW JLYHQ WKH
FKDQJLQJ QDWXUH RI WKH LQIRUPDWLRQ KH VRXJKW HOHFWURQLF
DFFHVVZDVQHFHVVDU\
'DYLGLDQ KDV QR )LUVW $PHQGPHQW ULJKW WR JRYHUQPHQW
LQIRUPDWLRQLQDSDUWLFXODUIRUPDVORQJDVWKHLQIRUPDWLRQ
VRXJKWLVPDGHDYDLODEOHDVUHTXLUHGE\WKH)LUVW$PHQGPHQW
6HH8QLWHG6WDWHVY0F'RXJDO)G WK&LU
GHQ\LQJWKHSUHVVDQGSXEOLFDFFHVVWRYLGHRWDSHVRI
3UHVLGHQW &OLQWRQ¶V GHSRVLWLRQ ZKHUH DFFHVV WR WKH
1R 3XWQDP3LW,QFHWDOY
&LW\RI&RRNHYLOOHHWDO

$PHQGPHQW GRHV QRW IRUELG D YLHZSRLQWQHXWUDO
H[FOXVLRQ RI VSHDNHUV ZKR ZRXOG GLVUXSW D QRQSXEOLF
IRUXP DQG KLQGHU LWV HIIHFWLYHQHVV IRU LWV LQWHQGHG
SXUSRVH
&RUQHOLXV86DW7KHUHIRUHZKLOHWKHFLW\PD\
³UHVWULFWXVHWRWKRVHZKRSDUWLFLSDWHLQWKHIRUXP¶VRIILFLDO
EXVLQHVV´3HUU\86DWLWPD\QRWGRVREDVHGRQ
YLHZSRLQW,QRWKHUZRUGV'DYLGLDQKDVQRHQWLWOHPHQWWRD
OLQNWRWKHFLW\¶V:HEVLWHKRZHYHUKHPD\QRWEHGHQLHGRQH
VROHO\EDVHGRQWKHFRQWURYHUVLDOYLHZVKHHVSRXVHVZLWKRXW
UHJDUG IRU WKH IRUXP¶V SXUSRVH DQG VWUXFWXUH 7KLV
UHTXLUHPHQWWKDWWKHFLW\DFWZLWKRXWUHJDUGWRYLHZSRLQWOHDGV
XVWRKROGWKDW'DYLGLDQKDVUDLVHGDQLVVXHRIPDWHULDOIDFWDV
WRZKHWKHUWKHFLW\¶VDFWLRQVYLRODWHGKLV)LUVW$PHQGPHQW
ULJKWVEHFDXVHWKH\ZHUHEDVHGRQLPSHUPLVVLEOHYLHZSRLQW
GLVFULPLQDWLRQ
7KH FLW\¶V HVWDEOLVKPHQW RI D SROLF\ WR OLPLW WKH SRRO RI
SHUVRQV ZKR PLJKW EH OLQNHG WR WKH FLW\¶V :HE SDJH LV
UHDVRQDEOH7KHFLW\KDVOHJLWLPDWHLQWHUHVWVLQNHHSLQJOLQNV
WKDWDUHFRQVLVWHQWZLWKWKHSXUSRVHRIWKHVLWH±SURYLGLQJ
LQIRUPDWLRQ DERXW FLW\ VHUYLFHV DWWUDFWLRQV DQG RIILFLDOV
)XUWKHUWKHFLW\DUJXHVWKDWLWKDGDQLQWHUHVWLQDOORZLQJD
UHODWLYHO\OLPLWHGQXPEHURIOLQNVWRLWVVLWHVRDVWRDYRLGD
FDFRSKRQ\ RI VSHDNHUV ZKLFK PLJKW GURZQ RXW WKH FLW\¶V
LQIRUPDWLRQRUFDXVHWKHFLW\WRHOLPLQDWHLWVVLWHDOWRJHWKHU
6HH )RUEHV 86 DW QRWLQJ WKDW WKH JRYHUQPHQW
PLJKW FKRRVH WR FORVH D IRUXP UDWKHU WKDQ EH VXEMHFWHG WR
XQFRQWUROOHGDFFHVVRU)LUVW$PHQGPHQWOLDELOLW\ 7KH:HE
LVQRWFRQVWUDLQHGE\WKHVDPH³ORJLVWLFDO´VSDWLDOOLPLWDWLRQV
IDFHGE\WKHSXEOLFEURDGFDVWHUVLQ)RUEHV6HHLG7KXVWKLV
REMHFWLRQ LV PRUH DSSURSULDWHO\ VHHQ DV D YDULDWLRQ RI WKH
FLW\¶VOHJLWLPDWHLQWHUHVWLQHVWDEOLVKLQJSDUDPHWHUVRIWKHVLWH
WKDW DUH JURXQGHG LQ WKH VLWH¶V SXUSRVH 7KH ODFN RI
HVWDEOLVKHGFLW\SROLF\LQWKLVDUHDRIGHYHORSLQJWHFKQRORJ\
LVQRWIDWDOWRWKHFLW\¶VDWWHPSWWRVWUXFWXUHLWV:HEVLWH,Q
DGGLWLRQ 'DYLGLDQ KDV QXPHURXV DOWHUQDWLYH PHDQV RI
FRPPXQLFDWLQJKLVLQIRUPDWLRQ7KH3XWQDP3LW:HEVLWHKDV

-- 6 of 10 --

3XWQDP3LW,QFHWDOY
&LW\RI&RRNHYLOOHHWDO
1R
ZHWRKROGWRWKHFRQWUDU\GLVSOD\FDVHVLQSXEOLFKRVSLWDOV
OLEUDULHV RIILFH EXLOGLQJV PLOLWDU\ FRPSRXQGV DQG RWKHU
SXEOLFIDFLOLWLHVLPPHGLDWHO\ZRXOGEHFRPH+\GH3DUNVRSHQ
WR HYHU\ ZRXOGEH SDPSKOHWHHU DQG SROLWLFLDQ 7KLV WKH
&RQVWLWXWLRQ GRHV QRW UHTXLUH´ /HKPDQ Y &LW\ RI 6KDNHU
+HLJKWV 86 ILQGLQJ WKDW WKH
DGYHUWLVLQJVSDFHRQFLW\WUDQVLWYHKLFOHVZDVQRWDIRUXP
EHFDXVHWKHUHVWULFWLRQVZHUHDOLJQHGZLWKWKHSXUSRVHRIWKH
DVVHUWHG IRUXP DQG XSKROGLQJ D EDQ RQ SROLWLFDO
DGYHUWLVHPHQWV 7KHUHIRUHZHFRQFOXGHWKDWWKHFLW\¶V:HE
VLWHZKLFKHVWDEOLVKHGOLQNVWRRWKHU:HEVLWHVLVDQRQSXEOLF
IRUXPXQGHUWKH)LUVW$PHQGPHQW
%
,Q ERWK GHVLJQDWHG SXEOLF IRUD DQG QRQSXEOLF IRUD WKH
JRYHUQPHQWPD\QRWGLVFULPLQDWHEDVHGXSRQWKHYLHZSRLQW
RI WKH VSHDNHU 6HH HJ &RUQHOLXV 86 DW
QRQSXEOLFIRUXPFDVH ³>7@KHJRYHUQPHQWYLRODWHVWKH)LUVW
$PHQGPHQW ZKHQ LW GHQLHV DFFHVV WR D VSHDNHU VROHO\ WR
VXSSUHVV WKH SRLQW RI YLHZ KH HVSRXVHV RQ DQ RWKHUZLVH
LQFOXGLEOHVXEMHFW´,GFI%RDUGRI5HJHQWVRIWKH8QLYRI
:LVF6\VY6RXWKZRUWK6&W UHTXLULQJ
YLHZSRLQW QHXWUDOLW\ LQ D VWXGHQW SURJUDP WR IDFLOLWDWH
H[WUDFXUULFXODUVSHHFKDQGDFWLYLWLHV ³:KHQWKHJRYHUQPHQW
WDUJHWV QRW VXEMHFW PDWWHU EXW SDUWLFXODU YLHZV WDNHQ E\
VSHDNHUVRQDVXEMHFWWKHYLRODWLRQRIWKH)LUVW$PHQGPHQW
LVDOOWKHPRUHEODWDQW9LHZSRLQWGLVFULPLQDWLRQLVWKXVDQ
HJUHJLRXVIRUPRIFRQWHQWGLVFULPLQDWLRQ´5RVHQEHUJHU
86DW LQWHUQDOFLWDWLRQVRPLWWHG
,QUHJXODWLQJDQRQSXEOLFIRUXPWKHFLW\RI&RRNHYLOOH¶V
SROLF\LQDGGLWLRQWREHLQJUHDVRQDEOHLQOLJKWRIWKHFLW\¶V
LQWHUHVWPXVWDOVREHYLHZSRLQWQHXWUDO
$OWKRXJK WKH DYRLGDQFH RI FRQWURYHUV\ LV QRW D YDOLG
JURXQG IRU UHVWULFWLQJ VSHHFK LQ D SXEOLF IRUXP D
QRQSXEOLFIRUXPE\GHILQLWLRQLVQRWGHGLFDWHGWRJHQHUDO
GHEDWH RU WKH IUHH H[FKDQJH RI LGHDV 7KH )LUVW
1R 3XWQDP3LW,QFHWDOY
&LW\RI&RRNHYLOOHHWDO

LQIRUPDWLRQFRQWDLQHGRQWKHVHWDSHVZDVUHDGLO\DYDLODEOH
7KLV KROGV UHJDUGOHVV RI ZKHWKHU 'DYLGLDQ LV FRQVLGHUHG D
PHPEHU RI WKH SUHVV RU QRW &I 1L[RQ Y :DUQHU
&RPPXQLFDWLRQV,QF86 ILQGLQJWKDWWKH
SUHVVKDGQR)LUVW$PHQGPHQWULJKWWRFRSLHVRI:KLWH+RXVH
WDSHVZKHQLWXQTXHVWLRQDEO\KDGDFFHVVWRWKHFRQWHQWVRI
WKHWDSHVDQGZKHQWKHSXEOLFDWODUJHZDVQRWJLYHQSK\VLFDO
DFFHVVWRFRSLHV
'DYLGLDQ DOVR DOOHJHV KDUP EHFDXVH RI WKH H[SHQVH DQG
LQFRQYHQLHQFHRIWKHRQHWLPHKHWUDYHOHGWR7HQQHVVHHIURP
KLVKRPHLQ&DOLIRUQLDWRYLHZWKHWLFNHWUHFRUGVEXWQRRQH
ZDVDYDLODEOHWRKHOSKLP2QWKLVRFFDVLRQ'DYLGLDQVHQWDQ
HPDLOWR6KLSOH\QRWLI\LQJKLPRI'DYLGLDQ¶VLQWHQWWRYLVLW
&RRNHYLOOHWRREWDLQSXEOLFUHFRUGVODWHUWKDWZHHN7KHQH[W
GD\6KLSOH\UHSOLHGWKDWWKHFLW\HPSOR\HHZKRFRXOGSURYLGH
WKRVHUHFRUGVZRXOGQRWEHDYDLODEOHRQWKDWGDWHVR'DYLGLDQ
VKRXOGFRPHRQDGLIIHUHQWGD\:KHQ'DYLGLDQDUULYHGKH
ZDVWROGWKDWKHFRXOGQRWEHKHOSHGWKDWGD\7KHGHQLDORI
DFFHVVWRUHFRUGVRQRQHGD\GRHVQRWULVHWRWKHOHYHORID
FRQVWLWXWLRQDOYLRODWLRQ6HH0RQHOOY'HSDUWPHQWRI6RFLDO
6HUYV86 UHTXLULQJWKDWDSUDFWLFH³EH
VRSHUPDQHQWDQGZHOOVHWWOHGDVWRFRQVWLWXWHDμFXVWRPRU
XVDJH¶ZLWKWKHIRUFHRIODZ´IRUSXUSRVHVRI†OLDELOLW\
$FFRUGLQJO\ZHUHMHFW'DYLGLDQ¶VDUJXPHQW
,QVXPZH$)),50WKHGLVWULFWFRXUW¶VJUDQWRIVXPPDU\
MXGJPHQW RQ 'DYLGLDQ¶V )LUVW $PHQGPHQW IUHHGRP RI WKH
SUHVVFODLP
,9
'DYLGLDQDOVRDOOHJHVWKDWWKH&LW\RI&RRNHYLOOHYLRODWHG
KLV )LUVW $PHQGPHQW ULJKWV ZKHQ LW UHIXVHG WR HVWDEOLVK D
K\SHUOLQNIURPWKHFLW\¶V:HEVLWHWR7KH3XWQDP3LW:HE
VLWH
$WWKHWLPH'DYLGLDQUHTXHVWHGWKHOLQNVHYHUDOIRUSURILW
DQG QRQSURILW HQWLWLHV ZHUH OLQNHG WR WKH FLW\¶V :HE VLWH
LQFOXGLQJ D ORFDO WHFKQLFDO FROOHJH WZR ,QWHUQHW VHUYLFH

-- 7 of 10 --

3XWQDP3LW,QFHWDOY
&LW\RI&RRNHYLOOHHWDO
1R
SURYLGHUVDODZILUPDORFDOFRPSXWHUFOXEDWUXFNSURGXFW
PDQXIDFWXUHU DQG GLVWULEXWRU DQG D VLWH ZLWK LQIRUPDWLRQ
DERXW&RRNHYLOOH&RRNHYLOOHKDGQRVWDWHGSROLF\RQZKR
FRXOGEHOLQNHGWRWKHFLW\¶V:HESDJHSULRUWR'DYLGLDQ¶V
UHTXHVW ,QVWHDG WKH GHFLVLRQ WR OLQN ZDV FRQWUROOHG E\
FRPSXWHURSHUDWLRQVPDQDJHU6WHYH&RUGHUZKRDGGHGOLQNV
DVWKH\ZHUHUHTXHVWHG6KLSOH\VWDWHGWKDWKHGLGQRWNQRZ
ZKDWDOLQNZDVRUWKDWIRUSURILWEXVLQHVVHVZHUHOLQNHGWR
WKHFLW\¶V:HESDJH
:KHQ'DYLGLDQDVNHGIRUDOLQNWREHHVWDEOLVKHGWR7KH
3XWQDP3LW&RUGHUQRWLILHG6KLSOH\RIWKHUHTXHVWEHFDXVH
DV &RUGHU VWDWHG LQ KLV GHSRVLWLRQ ³0U 'DYLGLDQ DQG WKH
3XWQDP3LWDUHDYHU\FRQWURYHUVLDOWRSLFDQG,GLGQRWIHHOLW
ZRXOG EH LQ P\ RZQ SHUVRQDO EHVW LQWHUHVW WR PDNH WKH
GHFLVLRQWRRUQRWWROLQNWKH3XWQDP3LWWRRXU:HEVLWH´
$IWHUOHDUQLQJRI'DYLGLDQ¶VUHTXHVW6KLSOH\GHFLGHGWR
OLPLW OLQNV IURP WKH FLW\¶V :HE SDJH WR QRQSURILW
RUJDQL]DWLRQVRQO\+HVWDWHGDWRQHSRLQWKRZHYHUWKDWHYHQ
LI7KH3XWQDP3LWZHUHDQRQSURILWRUJDQL]DWLRQKHZRXOG
QRWKDYHDOORZHGWKHOLQN6KLSOH\WKHQGHWHUPLQHGWKDWWKH
FLW\RQO\ZRXOGDOORZOLQNVIURPWKH&RRNHYLOOH:HEVLWHWR
RWKHU VLWHV ZKLFK ZRXOG SURPRWH WKH HFRQRPLF ZHOIDUH
WRXULVPDQGLQGXVWU\RIWKHFLW\3XUVXDQWWRWKLVSROLF\KH
GHQLHGDOLQNWR7KH3XWQDP3LWDQGKDGVHYHUDOOLQNVWRRWKHU
:HEVLWHVUHPRYHGIURPWKHFLW\¶VSDJH'DYLGLDQDOOHJHV
WKDWWKLVGHQLDOYLRODWHGKLV)LUVW$PHQGPHQWULJKWEHFDXVH
WKHFLW\KDVHVWDEOLVKHGDGHVLJQDWHGSXEOLFIRUXPE\DOORZLQJ
OLQNVWRLWVVLWHDQGWKDWHYHQLIWKHFLW\KDVQRWGHVLJQDWHG
VXFKDIRUXPKHZDVXQFRQVWLWXWLRQDOO\GLVFULPLQDWHGDJDLQVW
E\WKHFLW\EDVHGRQKLVYLHZSRLQW
7KHSXEOLFIRUXPDQDO\VLVZKLFKKDVWUDGLWLRQDOO\DSSOLHG
WR WDQJLEOH SURSHUW\ RZQHG E\ WKH JRYHUQPHQW LV DQ
DSSURSULDWH PHDQV WR DQDO\]H 'DYLGLDQ¶V FODLP 6HH
5RVHQEHUJHUY5HFWRUDQG9LVLWRUVRIWKH8QLYRI9D
86 QRWLQJWKDWWKHVDPHSULQFLSOHVDSSO\WR
JRYHUQPHQW IRUD ZKLFK DUH ³PHWDSK\VLFDO´ DV RSSRVHG WR
1R 3XWQDP3LW,QFHWDOY
&LW\RI&RRNHYLOOHHWDO

DQ\RQHFRXOGVHWXSWKHLURZQOLQNIURPWKHFLW\¶VVLWHWRDQ
RXWVLGH:HEVLWHZLWKRXWJRLQJWKURXJKWKHFLW\RQDRQHE\
RQHEDVLV
6HFRQGZHVFUXWLQL]H³ZKHWKHUWKHJRYHUQPHQWLPSRVHG
UHVWULFWLRQRQDFFHVVWRSXEOLFSURSHUW\LVWUXO\SDUWRIμWKH
SURFHVVRIOLPLWLQJDQRQSXEOLFIRUXPWRDFWLYLWLHVFRPSDWLEOH
ZLWKWKHLQWHQGHGSXUSRVHRIWKHSURSHUW\¶´8)&:)G
DW TXRWLQJ3HUU\86DW %RWKWKHFLW\¶V
VWDWHGSXUSRVHDQGWKHQDWXUHRIWKHIRUXPDUHUHOHYDQWWRWKLV
GHWHUPLQDWLRQ 6HH 3HUU\ 86 DW H[DPLQLQJ
JRYHUQPHQWSROLF\DQGWKHXVHVRIWKHIRUXP &RUQHOLXV
86DW H[DPLQLQJWKHJRYHUQPHQW¶VSROLF\KLVWRULF
XVHDQGQDWXUHRIWKHIRUXP ,6.&21Y/HH86DW
.HQQHG\-FRQFXUULQJ VWDWLQJWKDW³WKHLQTXLU\PXVW
EH DQ REMHFWLYH RQH EDVHG RQ WKH DFWXDO SK\VLFDO
FKDUDFWHULVWLFVDQGXVHVRIWKHSURSHUW\´ 6KLSOH\VWDWHGLQDQ
DIILGDYLW WKDW WKH SXUSRVH RI WKH FLW\¶V :HE VLWH ZDV ³WR
SXEOLVKHOHFWURQLFDOO\LQIRUPDWLRQWR,QWHUQHWXVHUVDERXWWKH
EHQHILWVDQGRSSRUWXQLWLHVDIIRUGHGZLWKLQWKHFRPPXQLW\WR
LWVFLWL]HQVDQGYLVLWRUV´ZKLFKLQFOXGHG³PHVVDJHVIURPFLW\
RIILFLDOVFRXQFLOPHHWLQJDJHQGDVMRERSSRUWXQLWLHVLQ
FLW\JRYHUQPHQWLQIRUPDWLRQDERXWEXLOGLQJSHUPLWVSURSHUW\
WD[HVDQGWKHOLNH´
6KLSOH\VWDWHGWKDWKHGLGQRWXQGHUVWDQGWKHOLQNSURFHVV
DQGLQLWLDOO\GHOHJDWHGDQ\WKLQJFRQFHUQLQJWKH:HEVLWHWR
&RUGHU $V QRWHG DERYH WKH VWUXFWXUH RI WKH IRUXP DV
HVWDEOLVKHG E\ &RRNHYLOOH GRHV QRW DOORZ IUHH DQG RSHQ
GLDORJXH EHWZHHQ XVHUV LW SULPDULO\ VHUYHV WR FRQYH\
LQIRUPDWLRQWRWKHUHDGHU7KLVVWUXFWXUHLVFRQVLVWHQWZLWKWKH
FLW\¶VVWDWHGJRDOVIRUWKH:HEVLWHDQGLVDIXUWKHULQGLFDWLRQ
WKDW WKH IRUXP LQ TXHVWLRQ VKRXOG QRW EH FRQVLGHUHG D
GHVLJQDWHG SXEOLF IRUXP &I 8)&: )G DW
KROGLQJWKDWWKHJRYHUQPHQWKDGFUHDWHGDSXEOLFIRUXPLQ
DGYHUWLVLQJVSDFHRQLWVWUDQVLWV\VWHPZKHUHWKHLQFOXVLRQRI
DGYHUWLVHPHQWVOLNHWKHRQHFKDOOHQJHGZDVQRWLQFRPSDWLEOH
ZLWKWKHIRUXP¶VSXUSRVHDQGWKDWDGYHUWLVLQJRIDVLPLODU
QDWXUHKDGSUHYLRXVO\EHHQDFFHSWHGRQWKHV\VWHP ³:HUH

-- 8 of 10 --

3XWQDP3LW,QFHWDOY
&LW\RI&RRNHYLOOHHWDO
1R
FRQWHQW WKDW LV QRW ZLWKLQ WKH VFRSH RI WKH IRUXP 6HH LG
VWDWLQJWKDWVWULFWVFUXWLQ\DSSOLHVGXULQJWKHWLPHWKHIRUXP
LV RSHQ VHH DOVR 'HQYHU $UHD (GXF 7HOHFRPPV
&RQVRUWLXP,QFY)HGHUDO&RPPXQLFDWLRQV&RPP¶Q
86 ³2XUFDVHVKDYHQRW\HWGHWHUPLQHG
KRZHYHU WKDW JRYHUQPHQW¶V GHFLVLRQ WR GHGLFDWH D SXEOLF
IRUXPWRRQHW\SHRIFRQWHQWRUDQRWKHULVQHFHVVDULO\VXEMHFW
WR WKH KLJKHVW OHYHO RI VFUXWLQ\´ ,Q QRQSXEOLF IRUD WKH
JRYHUQPHQW PD\ LPSRVH UHVWULFWLRQV LI WKH UHJXODWLRQ LV
UHDVRQDEOH6HH3HUU\86DW
%
:H XVH D WZRVWHS DQDO\VLV WR GHWHUPLQH ZKHWKHU WKH
JRYHUQPHQW LQWHQGHG D ORFDWLRQ WR EH D GHVLJQDWHG SXEOLF
IRUXPRULQVWHDGDQRQSXEOLFIRUXP
)LUVWZHORRNWRZKHWKHUWKHJRYHUQPHQWKDVPDGHWKH
SURSHUW\JHQHUDOO\DYDLODEOHWRDQHQWLUHFODVVRIVSHDNHUV
RUZKHWKHULQGLYLGXDOPHPEHUVRIWKDWFODVVPXVWREWDLQ
SHUPLVVLRQLQRUGHUWRDFFHVVWKHSURSHUW\6HFRQGZH
ORRN WR ZKHWKHU WKH H[FOXVLRQ RI FHUWDLQ H[SUHVVLYH
FRQGXFWLVSURSHUO\GHVLJQHGWROLPLWWKHVSHHFKDFWLYLW\
RFFXUULQJLQWKHIRUXPWRWKDWZKLFKLVFRPSDWLEOHZLWK
WKHIRUXP¶VSXUSRVH
8)&:)GDW
&RRNHYLOOH UHJDUGOHVV RI WKH DFFHVV SROLF\ LQ SODFH KDV
FRQWLQXDOO\HVWDEOLVKHGOLQNVIURPWKHFLW\¶V:HEVLWHWRRWKHU
:HEVLWHVRQDQLQGLYLGXDOL]HGEDVLV,WVLQLWLDOSURFHVVLQ
ZKLFK XVHUV UHTXHVWHG D OLQN IURP &RUGHU FOHDUO\ GLG QRW
RSHQXSDFFHVVWRDQ\VSHFLILHGJURXSRIXVHUV8QGHUWKH
SURSRVHG ³QRQSURILW RQO\´ VWDQGDUG RU WKH ILQDO VWDQGDUG
DGRSWHGWKHFLW\FRQWLQXHGWRUHYLHZRQDFDVHE\FDVHEDVLV
ZKHWKHURUQRWWKHSURSRVHGOLQNHGVLWHPHWWKHVWDQGDUG)RU
H[DPSOHSXUVXDQWWRWKHLPSOHPHQWDWLRQRILWVILQDOSROLF\
WKHFLW\WRRNDZD\VHYHUDOH[LVWLQJOLQNVWRVLWHVEHFDXVHWKH
VLWHVZHUHLQFRPSDWLEOHZLWKWKHSROLF\&RRNHYLOOHKDVQRW
SURYLGHG RSHQ DFFHVV WR OLQNV WR WKH FLW\¶V VLWH ZKHUHE\
1R 3XWQDP3LW,QFHWDOY
&LW\RI&RRNHYLOOHHWDO

7KHVH DUH WKH WKUHH FDWHJRULHV RI IRUD SUHVHQWO\ UHFRJQL]HG LQ WKLV
FLUFXLW :H QRWH KRZHYHU WKDW WKHUH KDV EHHQ VRPH XQFHUWDLQW\ DPRQJ
WKH FLUFXLWV DV WR ZKHWKHU WKHUH DUH RQH RU WZR FDWHJRULHV RI IRUD RWKHU WKDQ
³SXEOLF´ DQG ³QRQSXEOLF´ DQG ZKDW SURWHFWLRQ LV GXH WR WKHVH FDWHJRULHV
6RPH FRXUWV KDYH DQDO\]HG VHSDUDWH FDWHJRULHV RI ³GHVLJQDWHG´ DQG
³OLPLWHG´ SXEOLF IRUD ZKLOH RWKHUV KDYH IRXQG RQO\ RQH RWKHU FDWHJRU\
6HH HJ 7KH *RRG 1HZV &OXE Y 0LOIRUG &HQWU 6FK )G
G &LU GUDZLQJ QR GLVWLQFWLRQ EHWZHHQ GHVLJQDWHG DQG OLPLWHG
SXEOLF IRUD DQG VWDWLQJ WKDW UHVWULFWLRQV RQ WKHVH OLPLWHG SXEOLF IRUD PXVW
EH ³UHDVRQDEOH DQG YLHZSRLQW QHXWUDO´ :KLWHODQG :RRGV /3 Y
7RZQVKLS RI : :KLWHODQG )G Q G &LU VWDWLQJ
³VSDWLDORUJHRJUDSKLF´ 8QLWHG6WDWHVY.RNLQGD86
³7KHPHUHSK\VLFDOFKDUDFWHULVWLFVRIWKH
SURSHUW\FDQQRWGLFWDWHIRUXPDQDO\VLV´ VHHDOVR&RUQHOLXV
Y1$$&3/HJDO'HIHQVH (GXF)XQG,QF86
VWDWLQJ WKDW WKH &RXUW HVWDEOLVKHG WKH IRUXP
DQDO\VLV³DVDPHDQVRIGHWHUPLQLQJZKHQWKH*RYHUQPHQW¶V
LQWHUHVW LQ OLPLWLQJ WKH XVH RI LWV SURSHUW\ WR LWV LQWHQGHG
SXUSRVHRXWZHLJKVWKHLQWHUHVWRIWKRVHZLVKLQJWRXVHWKH
SURSHUW\IRURWKHUSXUSRVHV´
7KHUHIRUHZHPXVWILUVWLGHQWLI\WKHIRUXPLQTXHVWLRQKHUH
'DYLGLDQKDVQRWEHHQGHQLHGDFFHVVWRWKH ,QWHUQHW±7KH
3XWQDP3LWRSHUDWHVD:HEVLWHZLWKRXWLQWHUIHUHQFHIURPWKH
&LW\RI&RRNHYLOOH6HH&RUQHOLXV86DW ORRNLQJ
WRWKHDFFHVVVRXJKWWRGHWHUPLQHWKHDSSURSULDWHIRUXP 1RU
LV&RRNHYLOOHDWWHPSWLQJWRIRUELGDK\SHUWH[WOLQNIURP7KH
3XWQDP3LWWRWKHFLW\¶V:HEVLWHZKLFKZRXOGIDFLOLWDWHD
UHDGHU¶VPRYHPHQWIURP7KH3XWQDP3LW¶V:HESDJHWRWKH
FLW\¶V:HESDJH,QVWHDG&RRNHYLOOHKDVGHQLHG'DYLGLDQD
OLQN GLUHFWDFFHVV IURPWKHFLW\¶V:HEVLWHWR7KH3XWQDP
3LW¶V:HESDJH
7KLV&RXUWGLVWLQJXLVKHVWKUHHNLQGVRIIRUD WUDGLWLRQDO
SXEOLFIRUXP GHVLJQDWHGSXEOLFIRUXPDQG QRQSXEOLF
IRUXP 6HH 3HUU\ (GXF $VV¶Q Y 3HUU\ /RFDO (GXFDWRUV¶
$VV¶Q86 8QLWHG)RRG &RPPHUFLDO
:RUNHUV8QLRQ/RFDOY6RXWKZHVW2KLR5HJ¶O7UDQVLW
$XWK)G WK&LU

-- 9 of 10 --

3XWQDP3LW,QFHWDOY
&LW\RI&RRNHYLOOHHWDO
1R
WKDW WKH GHVLJQDWHG IRUXP LV D QRQWUDGLWLRQDO IRUXP RSHQHG IRU ³SXEOLF
GLVFRXUVH´ EXW WKDW WKH &RXUW KDV DOVR ³GLVFXVVHG μOLPLWHG¶ SXEOLF IRUD
ZKLFK DUH GHVLJQDWHG IRU H[SUHVVLRQ EXW RQO\ RQ OLPLWHG WRSLFV´ DQG
FKRRVLQJ WR WUHDW ERWK FDWHJRULHV XQGHU WKH VWULFWHU VWDQGDUGV IRU
GHVLJQDWHG SXEOLF IRUD :DUUHQ Y )DLUID[ &RXQW\ )G
WK &LU HQ EDQF WUHDWLQJ GHVLJQDWHG DQG OLPLWHG SXEOLF IRUD DV
WKH VDPH FDWHJRU\ DQG VHWWLQJ XS WZR VWDQGDUGV IRU WKLV IRUXP ± DQ
³LQWHUQDO´ VWDQGDUG ZKLFK JLYHV VWULFW VFUXWLQ\ SURWHFWLRQ IRU WKH FODVV RI
VSHDNHUV WR ZKRP WKH IRUXP ZDV RSHQHG DQG DQ ³H[WHUQDO´ VWDQGDUG
ZKLFK ³SODFHV UHVWULFWLRQV RQ WKH JRYHUQPHQW¶V DELOLW\ WR GHVLJQDWH WKH
FODVV IRU ZKRVH HVSHFLDO EHQHILW WKH IRUXP KDV EHHQ RSHQHG´ 'L/RUHWR
Y 'RZQH\ 8QLILHG 6FK 'LVW %G RI (GXF )G WK &LU
GLVWLQJXLVKLQJ EHWZHHQ D GHVLJQDWHG SXEOLF IRUXP ZKLFK LV D
QRQWUDGLWLRQDO IRUXP LQWHQWLRQDOO\ RSHQHG IRU SXEOLF GLVFRXUVH WKDW
UHFHLYHV WKH VDPH )LUVW $PHQGPHQW SURWHFWLRQ DV D WUDGLWLRQDO SXEOLF
IRUXP DQG D OLPLWHG SXEOLF IRUXP ZKLFK LV ³D W\SH RI QRQSXEOLF IRUXP
WKDW WKH JRYHUQPHQW LQWHQWLRQDOO\ KDV RSHQHG WR FHUWDLQ JURXSV RU WR
FHUWDLQ WRSLFV´ EXW QRWLQJ WKDW WKH FRQWRXUV RI WKHVH IRUD KDYH QRW EHHQ
FOHDUO\ GHILQHG E\ WKH &RXUW
$
7UDGLWLRQDO SXEOLF IRUD VXFK DV VWUHHWV VLGHZDONV DQG
SDUNVDUH³SODFHVZKLFKE\ORQJWUDGLWLRQRUE\JRYHUQPHQW
ILDWKDYHEHHQGHYRWHGWRDVVHPEO\DQGGHEDWH´3HUU\
86DW,QWKHVHDUHDVWKHVWDWHUHJXODWLRQPXVWZLWKVWDQG
VWULFW VFUXWLQ\ LH VKRZ WKDW D FRQWHQWEDVHG SURKLELWLRQ
VHUYHVDFRPSHOOLQJVWDWHLQWHUHVWDQGLVQDUURZO\WDLORUHG
6HHLG&RQWHQWQHXWUDOWLPHSODFHDQGPDQQHUUHVWULFWLRQV
PXVWEHQDUURZO\WDLORUHGVHUYHDVLJQLILFDQWSXEOLFLQWHUHVW
DQGDOORZDPSOHDOWHUQDWLYHDYHQXHVRIFRPPXQLFDWLRQ6HH
LG
7KH,QWHUQHWDUHFHQWWHFKQRORJLFDOGHYHORSPHQWFOHDUO\
KDV QRW EHHQ ³WLPH RXW RI PLQG XVHG IRU SXUSRVHV
RI FRPPXQLFDWLQJ WKRXJKWV EHWZHHQ FLWL]HQV DQG
GLVFXVVLQJSXEOLFTXHVWLRQV´+DJXHY&RPPLWWHHIRU,QGXV
2UJ86 (YHQLISXEOLFIRUDDUHQRW
OLPLWHGE\WKHLUKLVWRULFFRQILQHVWKHVHSODFHVVWLOOPXVWE\
GHILQLWLRQEH³RSHQIRUH[SUHVVLYHDFWLYLW\UHJDUGOHVVRIWKH
JRYHUQPHQW¶VLQWHQW´$UNDQVDV(GXF7HOHYLVLRQ&RPP¶QY
1R 3XWQDP3LW,QFHWDOY
&LW\RI&RRNHYLOOHHWDO

)RUEHV86 VHHDOVR&RUQHOLXV
86DW ORRNLQJWRWKRVHSODFHVZKLFKKDYHDPRQJWKHLU
SXUSRVHWKH³IUHHH[FKDQJHRILGHDV´ ,QWHUQDWLRQDO6RF¶\IRU
.ULVKQD&RQVFLRXVQHVV,QFY/HH86
.HQQHG\-FRQFXUULQJ ³>2@SHQSXEOLFVSDFHVDQG
WKRURXJKIDUHVWKDWDUHVXLWDEOHIRUGLVFRXUVHPD\EHSXEOLF
IRUXPV ZKDWHYHU WKHLU KLVWRULFDO SHGLJUHH DQG ZLWKRXW
FRQFHUQ IRU D SUHFLVH FODVVLILFDWLRQ RI WKH SURSHUW\
:LWKRXW WKLV UHFRJQLWLRQ RXU IRUXP GRFWULQH UHWDLQV QR
UHOHYDQFHLQWLPHVRIIDVWFKDQJLQJWHFKQRORJ\DQGLQFUHDVLQJ
LQVXODULW\´ $VSHFWVRIF\EHUVSDFHPD\LQIDFWILWLQWRWKH
SXEOLFIRUXPFDWHJRU\DOWKRXJKWKH6XSUHPH&RXUWKDVDOVR
VXJJHVWHGWKDWWKHFDWHJRU\LVOLPLWHGE\WUDGLWLRQ&RPSDUH
)RUEHV86DW ³UHMHFW>LQJ@WKHYLHZWKDWWUDGLWLRQDO
SXEOLF IRUXP VWDWXV H[WHQGV EH\RQG LWV KLVWRULF FRQILQHV´
ZLWK 5HQR Y $&/8 86
UHFRJQL]LQJ WKH FRPPXQLFDWLYH SRWHQWLDO RI WKH ,QWHUQHW
VSHFLILFDOO\WKH:RUOG:LGH:HE 7KHPXQLFLSDO:HEVLWH
DQGWKHK\SHUOLQNWRWKDWVLWHVRXJKWE\'DYLGLDQKRZHYHUGR
QRWDOORZIRURSHQFRPPXQLFDWLRQRUWKHIUHHH[FKDQJHRI
LGHDVEHWZHHQPHPEHUVRIWKHSXEOLF7KHUHIRUHDV'DYLGLDQ
FRQFHGHV WKH IRUXP LQ TXHVWLRQ LV QRW D WUDGLWLRQDO SXEOLF
IRUXP
%
7KH RWKHU WZR FDWHJRULHV RI IRUD DUH ³GHVLJQDWHG SXEOLF
IRUD´DQG³QRQSXEOLFIRUD´,QDGHVLJQDWHGSXEOLFIRUXPWKH
JRYHUQPHQW ³LQWHQWLRQDOO\ RSHQ>V@ D QRQWUDGLWLRQDO SXEOLF
IRUXPIRUSXEOLFGLVFRXUVH´&RUQHOLXV86DWVHH
DOVR )RUEHV 86 DW ,Q VXFK IRUD WKH VDPH
VWDQGDUGVDSSO\DVWRWUDGLWLRQDOSXEOLFIRUDWRDWOHDVWVRPHRI
WKH JRYHUQPHQW¶V GHFLVLRQV LQ RWKHU ZRUGV JRYHUQPHQW
UHVWULFWLRQVPXVWEHQDUURZO\WDLORUHGWRVHUYHDVLJQLILFDQW
JRYHUQPHQWLQWHUHVWDQGPXVWOHDYHRSHQDPSOHDOWHUQDWLYH
FKDQQHOVRIFRPPXQLFDWLRQ6HH3RXLOORQY&LW\RI2ZRVVR
)G WK&LU FLWLQJ3HUU\86DW
2QWKHRWKHUKDQGWKHVHVWULFWVWDQGDUGVPD\QRWEH
DSSOLFDEOHWRWKRVHWRZKRPWKHIRUXPZDVQRWRSHQHGRUWR

-- 10 of 10 --