01a0072p.06

7KH +RQRUDEOH $UWKXU - 7DUQRZ 8QLWHG 6WDWHV 'LVWULFW -XGJH IRU
WKH (DVWHUQ 'LVWULFW RI 0LFKLJDQ VLWWLQJ E\ GHVLJQDWLRQ

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
+,1(< 35,17,1* &203$1<
3ODLQWLII$SSHOODQW
&URVV$SSHOOHH
Y
-($11,1( %5$171(5
'HIHQGDQW$SSHOOHH
&URVV$SSHOODQW
;!

1
1RV

$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW$NURQ
1R²-DPHV6*ZLQ'LVWULFW-XGJH
$UJXHG0DUFK
'HFLGHGDQG)LOHG0DUFK
%HIRUH0$57,1&KLHI-XGJH0225(&LUFXLW-XGJH
7$512:'LVWULFW-XGJH

-- 1 of 6 --

+LQH\3ULQWLQJ
&RY%UDQWQHU
1RV
BBBBBBBBBBBBBBBBB
&2816(/
$5*8(' 'DUDQ 3 .LHIHU .5(,1(5 3(7(56
&OHYHODQG2KLRIRU$SSHOODQW0DUN&:LOOLV:,//,6
/,11(1$NURQ2KLRIRU$SSHOOHH21%5,()'DUDQ3
.LHIHU .5(,1(5 3(7(56 &OHYHODQG 2KLR IRU
$SSHOODQW 0DUN & :LOOLV :,//,6 /,11(1 $NURQ
2KLRIRU$SSHOOHH
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
%2<&()0$57,1-5&KLHI-XGJH+LQH\3ULQWLQJ
&RPSDQ\DSSHDOVDQG-HDQQLQH%UDQWQHUFURVVDSSHDOVWKH
GLVWULFWFRXUW¶VJUDQWRIVXPPDU\MXGJPHQWLQSDUWWR+LQH\
3ULQWLQJDQGLQSDUWWR%UDQWQHULQWKLV(5,6$DFWLRQVHHNLQJ
HQIRUFHPHQW RI WKH WHUPV RI WKH VXEURJDWLRQ DQG
UHLPEXUVHPHQWSURYLVLRQVRI+LQH\¶VHPSOR\HHEHQHILWSODQ
)RUWKHIROORZLQJUHDVRQVZHDIILUPWKHGLVWULFWFRXUW
,
+LQH\ 3ULQWLQJ &RPSDQ\ KDV DQ (PSOR\HH %HQHILW 3ODQ
HVWDEOLVKHG SXUVXDQW WR WKH (PSOR\HH 5HWLUHPHQW ,QFRPH
6HFXULW\$FWRI (5,6$ 86&†HWVHT7KH
%HQHILW3ODQLVVHWIRUWKLQD0DVWHU'RFXPHQW3ODQDQGLV
DGPLQLVWHUHG E\ $GPLQLVWUDWLYH 6HUYLFH &RQVXOWDQWV 7KH
%HQHILW 3ODQ FRQWDLQV WZR SURYLVLRQV UHJDUGLQJ DFFLGHQW
PHGLFDO H[SHQVHV D VXEURJDWLRQ SURYLVLRQ DQG D
UHLPEXUVHPHQW SURYLVLRQ 7KHVH SURYLVLRQV SURYLGH DV
IROORZV
5,*+72)68%52*$7,21
7KH 3ODQ VKDOO EH VXEURJDWHG WR WKH H[WHQW RI DQ\
SD\PHQWVXQGHUWKLV3ODQRIKHDOWKFRYHUDJHWRDOORIWKH

-- 2 of 6 --

1RV +LQH\3ULQWLQJ
&RY%UDQWQHU

3ODQ0HPEHU¶VULJKWRIUHFRYHU\WKHUHIRUHLUUHJDUGOHVV
>VLF@RIWKHHQWLW\RULQGLYLGXDOIURPZKRWKHUHFRYHU\
PD\ EH GXH 7KH 3ODQ ZLOO KDYH WKH ULJKW DW LWV
GLVFUHWLRQDQG3ODQ$GPLQLVWUDWRU¶VVROHLQVWLJDWLRQWR
WDNHOHJDODFWLRQRQEHKDOIRIWKHLQVXUHGRURQEHKDOIRI
WKH 3ODQ LWVHOI $Q\ DPRXQWV VR UHFRYHUHG KRZHYHU
GHVLJQDWHG VKDOO EH DSSRUWLRQHG DV IROORZV WKLV 3ODQ
VKDOOEHUHLPEXUVHGWRWKHH[WHQWRILWVSD\PHQWVXQGHU
WKLVSODQRIKHDOWKFRYHUDJH,IDQ\EDODQFHWKHQUHPDLQV
IURPVXFKUHFRYHU\LWVKDOOEHDSSOLHGWRUHLPEXUVHWKH
3ODQ0HPEHUDQGDQ\RWKHUSROLF\SURYLGLQJEHQHILWVWR
WKH3ODQ0HPEHUDVWKHLULQWHUHVWPD\DSSHDU
5(,0%856(0(17
,IWKH3ODQPHPEHUUHFRYHUVGDPDJHVIURPDQ\SDUW\RU
WKURXJKDQ\FRYHUDJHQDPHGDERYHKHPXVWKROGLQWUXVW
IRUWKH(PSOR\HUWKHSURFHHGVRIWKHUHFRYHU\DQGPXVW
UHLPEXUVHXVWRWKHH[WHQWRISD\PHQWPDGH
-HDQQLQH%UDQWQHUZDVDQHPSOR\HHRI+LQH\3ULQWLQJIURP
XQWLO VKH VXIIHUHG VHULRXV LQMXULHV LQ D PRWRU YHKLFOH
DFFLGHQW RQ 1RYHPEHU $OWKRXJK %UDQWQHU¶V
LQMXULHVSUHYHQWHGKHUIURPFRQWLQXLQJKHUHPSOR\PHQWZLWK
+LQH\ 3ULQWLQJ VKH FRQWLQXHG WR SDUWLFLSDWH LQ LWV %HQHILW
3ODQ )URP WKH GDWH RI WKH DFFLGHQW XQWLO )HEUXDU\
%UDQWQHULQFXUUHGLQPHGLFDOH[SHQVHV%UDQWQHU
KDVDQHLJKWKJUDGHHGXFDWLRQDQGDYRFDWLRQDODVVHVVPHQW
GHHPHGKHUFRPSHWLWLYHO\XQHPSOR\DEOHLQWKHODERUPDUNHW
%UDQWQHU HVWLPDWHV KHU IXWXUH ORVW HDUQLQJV DVVXPLQJ D
UHWLUHPHQWDJHRIVL[W\ILYHWRH[FHHGDQGIXWXUH
PHGLFDO FDUH WR EH SHU \HDU %UDQWQHU DOVR ILOHG D
SHUVRQDO LQMXU\ FODLP DJDLQVW WKH SDUW\ UHVSRQVLEOH IRU WKH
DFFLGHQWZKLFKVKHVHWWOHGLQ$XJXVWIRU
+LQH\¶V %HQHILW 3ODQ WKURXJK $GPLQLVWUDWLYH 6HUYLFH
&RQVXOWDQWV SDLG WRZDUGV %UDQWQHU¶V PHGLFDO
H[SHQVHV,Q1RYHPEHUDQG'HFHPEHU6XEUR$XGLW
DFWLQJ RQ EHKDOI RI $GPLQLVWUDWLYH 6HUYLFH &RQVXOWDQWV

-- 3 of 6 --

+LQH\3ULQWLQJ
&RY%UDQWQHU
1RV
FRQWDFWHG %UDQWQHU¶V DWWRUQH\ UHJDUGLQJ D SRVVLEOH
VXEURJDWLRQFODLP2Q'HFHPEHU%UDQWQHU¶VDWWRUQH\VHQW
OHWWHUVWR$GPLQLVWUDWLYH6HUYLFH&RQVXOWDQWVDQG6XEUR$XGLW
UHTXHVWLQJSODQLQIRUPDWLRQZKLFK(5,6$REOLJDWHVWKHSODQ
DGPLQLVWUDWRUWRSURYLGHXSRQUHTXHVW6HH86&†
E
2Q )HEUXDU\ +LQH\ 3ULQWLQJ ILOHG WKLV (5,6$
DFWLRQ IRU VSHFLILF SHUIRUPDQFH DQG UHVWLWXWLRQ WKURXJK
HQIRUFHPHQW RI WKH %HQHILW 3ODQ¶V VXEURJDWLRQ DQG
UHLPEXUVHPHQWSURYLVLRQV+LQH\3ULQWLQJ¶VVXLWVRXJKWWR
UHFRYHUIURPWKHVHWWOHPHQWSURFHHGVWKHPHGLFDOEHQHILWVLW
SDLG WR %UDQWQHU %UDQWQHU FRXQWHUFODLPHG IRU VWDWXWRU\
GDPDJHVSXUVXDQWWR86&† F IRUIDLOXUHWR
SURGXFH UHTXHVWHG SODQ LQIRUPDWLRQ 7KH GLVWULFW FRXUW
JUDQWHG %UDQWQHU¶V PRWLRQ IRU VXPPDU\ MXGJPHQW RQ WKH
FRPSODLQWILQGLQJWKDWWKHVXEURJDWLRQDQGUHLPEXUVHPHQW
SURYLVLRQVZHUHDPELJXRXVDQGWKHUHIRUHWKHPDNHZKROH
UXOH SUHYHQWHG WKHLU HQIRUFHPHQW 7KH GLVWULFW FRXUW DOVR
JUDQWHG+LQH\3ULQWLQJ¶VPRWLRQIRUVXPPDU\MXGJPHQWRQ
WKHFRXQWHUFODLPUHIXVLQJWRLPSRVHILQHVXQGHU(5,6$RQ
WKHJURXQGVWKDW%UDQWQHUIDLOHGWRPDNHDSURSHUUHTXHVWIRU
(5,6$ SODQ GRFXPHQWV DV UHTXLUHG E\ 86&
† F
,,
:HUHYLHZWKHGLVWULFWFRXUW¶VJUDQWRIVXPPDU\MXGJPHQW
GH QRYR 6HH /DNH Y 0HWURSROLWDQ /LIH ,QV &R )G
WK &LU FLWDWLRQV RPLWWHG 6XPPDU\
MXGJPHQWLVDSSURSULDWHLIYLHZLQJWKHHYLGHQFHLQWKHOLJKW
PRVW IDYRUDEOH WR WKH QRQPRYLQJ SDUW\ WKH PRYLQJ SDUW\
HVWDEOLVKHVWKDWWKHUHLVQRJHQXLQHLVVXHRIPDWHULDOIDFWDQG
WKH\DUHHQWLWOHGWRMXGJPHQWDVDPDWWHURIODZ,G
$7KH6XEURJDWLRQ3URYLVLRQ
7KHPDNHZKROHUXOHRIIHGHUDOFRPPRQODZ³SURYLGHV
WKDWDQLQVXUHUFDQQRWHQIRUFHLWVVXEURJDWLRQULJKWVXQOHVV
DQGXQWLOWKHLQVXUHGKDVEHHQPDGHZKROHE\DQ\UHFRYHU\´
1RV +LQH\3ULQWLQJ
&RY%UDQWQHU

DVNHGWREHDGYLVHGLI$GPLQLVWUDWLYH6HUYLFH&RQVXOWDQWVZDV
QRWWKHSODQDGPLQLVWUDWRU2Q-DQXDU\6XEUR$XGLW
UHVSRQGHG ZLWK D VKRUW OHWWHU VWDWLQJ ³HQFORVHG LV WKH 3ODQ
ODQJXDJH\RXUHTXHVWHG´WRZKLFKZDVDWWDFKHGWKUHHSDJHV
RI WKH 3ODQ LQFOXGLQJ D VHFWLRQ HQWLWOHG ³6WDWHPHQW RI
5LJKWV´ZKLFKDGYLVHGWKDWSODQSDUWLFLSDQWVDUHHQWLWOHGWR
³REWDLQ FRSLHV RI DOO SODQ GRFXPHQWV DQG RWKHU 3ODQ
LQIRUPDWLRQXSRQZULWWHQUHTXHVWWRWKH3ODQ$GPLQLVWUDWRU´
DQG D SDJH GHVLJQDWLQJ +LQH\ 3ULQWLQJ DV WKH SODQ
DGPLQLVWUDWRUOLVWLQJLWVDGGUHVVDQGWHOHSKRQHQXPEHU7KXV
HYHQLI%UDQWQHUKHUVHOIFRXOGKDYHUHDVRQDEO\EHOLHYHGIURP
KHU SDVW GHDOLQJV ZLWK $GPLQLVWUDWLYH 6HUYLFH &RQVXOWDQWV
WKDW D UHTXHVW IRU LQIRUPDWLRQ VKRXOG EH GLUHFWHG WRZDUGV
$GPLQLVWUDWLYH6HUYLFH&RQVXOWDQWVWKLVFRPPXQLFDWLRQIURP
6XEUR$XGLWVKRXOGKDYHLQIRUPHG%UDQWQHU¶VFRXQVHOWKDWLQ
IDFW +LQH\ 3ULQWLQJ ZDV WKH GHVLJQDWHG SODQ DGPLQLVWUDWRU
FKDUJHG ZLWK VXSSO\LQJ UHTXHVWHG SODQ LQIRUPDWLRQ *LYHQ
WKLV DQG WKH ODFN RI SUHFHGHQW IRU H[SDQGLQJ WKH VWDWXWRU\
GHILQLWLRQRIDSODQDGPLQLVWUDWRUXQGHU(5,6$ZHILQGWKDW
WKHGLVWULFWFRXUWGLGQRWDEXVHLWVGLVFUHWLRQLQUHIXVLQJWR
LPSRVHVWDWXWRU\SHQDOWLHVRQ+LQH\3ULQWLQJ
,9
:H $)),50 WKH GLVWULFW FRXUW¶V JUDQW RI VXPPDU\
MXGJPHQWLQSDUWWR%UDQWQHUDQGLQSDUWWR+LQH\3ULQWLQJ

-- 4 of 6 --

+LQH\3ULQWLQJ
&RY%UDQWQHU
1RV
FRPSO\ZLWKLQWKLUW\GD\VZLWKDUHTXHVWIRULQIRUPDWLRQIURP
DSODQSDUWLFLSDQW³PD\LQWKHFRXUW¶VGLVFUHWLRQEHSHUVRQDOO\
OLDEOHWRVXFKSDUWLFLSDQWLQWKHDPRXQWRIXSWRD
GD\IURPWKHGDWHRIVXFKIDLOXUHRUUHIXVDODQGWKHFRXUWPD\
LQLWVGLVFUHWLRQRUGHUVXFKRWKHUUHOLHIDVLWGHHPVSURSHU´
86&† F (5,6$GHILQHVWKHSODQDGPLQLVWUDWRUDV
³WKH SHUVRQ VSHFLILFDOO\ VR GHVLJQDWHG E\ WKH WHUPV RI WKH
LQVWUXPHQW XQGHU ZKLFK WKH SODQ LV RSHUDWHG´ 86&
† $
%UDQWQHU DUJXHV WKDW HYHQ WKRXJK +LQH\ 3ULQWLQJ LV WKH
GHVLJQDWHG SODQ DGPLQLVWUDWRU DQG VKH UHTXHVWHG SODQ
LQIRUPDWLRQIURP$GPLQLVWUDWLYH6HUYLFH&RQVXOWDQWV+LQH\
3ULQWLQJ FDQ EH KHOG OLDEOH IRU $GPLQLVWUDWLYH 6HUYLFH
&RQVXOWDQWV¶ IDLOXUH WR SURGXFH WKH UHTXHVWHG LQIRUPDWLRQ
EHFDXVH $GPLQLVWUDWLYH 6HUYLFH &RQVXOWDQWV ZDV WKH ³GH
IDFWR´DGPLQLVWUDWRU%UDQWQHUSRLQWVWRRWKHUVHFWLRQVRIWKH
0DVWHU 3ODQ 'RFXPHQW LGHQWLI\LQJ $GPLQLVWUDWLYH 6HUYLFH
&RQVXOWDQWVDVWKHSODQVXSHUYLVRUDQGLQVWUXFWLQJTXHVWLRQV
UHJDUGLQJ FODLPV WR EH GLUHFWHG WR LW %UDQWQHU KRZHYHU
RIIHUVQRELQGLQJFDVHODZIURPWKLV&LUFXLWWRVXSSRUWKHU
DVVHUWLRQWKDWDSODQDGPLQLVWUDWRUPD\EHKHOGOLDEOHEDVHGRQ
LQIRUPDWLRQ UHTXHVWV GLUHFWHG WR VRPHRQH RWKHU WKDQ WKH
DGPLQLVWUDWRU
7KH ODZ LQ WKLV &LUFXLW LV FOHDU WKDW ³>R@QO\ D SODQ
DGPLQLVWUDWRU FDQ EH KHOG OLDEOH XQGHU VHFWLRQ F ´
9DQGHUNORNY3URYLGHQW/LIH $FFLGHQW,QVXUDQFH&R
)G WK&LU ,WLVXQGLVSXWHGWKDWWKH0DVWHU
3ODQ 'RFXPHQW GHILQHV +LQH\ 3ULQWLQJ DV WKH SODQ
DGPLQLVWUDWRUDQGWKDW%UDQWQHUWKURXJKFRXQVHOGLUHFWHGKHU
UHTXHVW IRU SODQ LQIRUPDWLRQ WR $GPLQLVWUDWLYH 6HUYLFH
&RQVXOWDQWVDQG6XEUR$XGLWUDWKHUWKDQ+LQH\3ULQWLQJ
0RUHRYHU %UDQWQHU¶V FODLP WKDW ³DW QR WLPH ZDV >VKH@
LQIRUPHGWKDW$GPLQLVWUDWLYH6HUYLFH&RQVXOWDQWVZDVQRWWKH
SODQDGPLQLVWUDWRU´LVEHOLHGE\WKHUHFRUG7KH'HFHPEHU
OHWWHUVIURP%UDQWQHU¶VDWWRUQH\WR$GPLQLVWUDWLYH6HUYLFH
&RQVXOWDQWVDQG6XEUR$XGLWUHTXHVWHGSODQLQIRUPDWLRQDQG
1RV +LQH\3ULQWLQJ
&RY%UDQWQHU

5HOHYDQW SRUWLRQV RI WKH SODQ SURYLVLRQ DW LVVXH LQ &RSHODQG 2DNV
SURYLGHG WKDW ³7KH &RYHUHG SHUVRQ DJUHHV WR UHFRJQL]H WKH 3ODQ¶V ULJKW WR
VXEURJDWLRQ DQG UHLPEXUVHPHQW 7KHVH ULJKWV SURYLGH WKH 3ODQ ZLWK D
SULRULW\ RYHU DQ\ IXQGV SDLG E\ D WKLUG SDUW\ WR D &RYHUHG 3HUVRQ UHODWLYH
WR WKH LQMXU\ RU VLFNQHVV LQFOXGLQJ D SULRULW\ RYHU DQ\ FODLP IRU QRQ
PHGLFDO RU GHQWDO FKDUJHV DWWRUQH\ IHHV RU RWKHU FRVWV DQG H[SHQVHV´
&RSHODQG 2DNV )G DW
&RSHODQG2DNVY+DXSW)G WK&LU
TXRWLQJ&RXFKRQ,QVXUDQFHG† &RSHODQG2DNV
H[DPLQHG WKH DSSOLFDELOLW\ RI WKH PDNHZKROH UXOH WR D
VXEURJDWLRQFODXVHLQDQ(5,6$SODQDQGKHOG³WKDWLQRUGHU
IRUSODQODQJXDJHWRFRQFOXVLYHO\GLVDYRZWKHGHIDXOWUXOHLW
PXVWEHVSHFLILFDQGFOHDULQHVWDEOLVKLQJERWKDSULRULW\WRWKH
IXQGVUHFRYHUHGDQGDULJKWWRDQ\IXOORUSDUWLDOUHFRYHU\´
,G %HFDXVH WKH SODQ ODQJXDJH DW LVVXH LQ &RSHODQG 2DNV
IDLOHGWRHVWDEOLVKDULJKWWRDQ\SDUWLDOUHFRYHU\WKHPDNH
ZKROHUXOHDSSOLHG
+LQH\3ULQWLQJDUJXHVWKDWWKHPDNHZKROHUXOHGRHVQRW
DSSO\WRWKHVXEURJDWLRQSURYLVLRQEHFDXVHWKHVXEURJDWLRQ
SURYLVLRQ XQDPELJXRXVO\ HVWDEOLVKHV WKDW WKH %HQHILW 3ODQ
HQMR\V SULRULW\ RYHU WKH LQVXUHG LQ UHFRYHULQJ GDPDJHV
:KLOH LW PD\ EH WUXH DV +LQH\ 3ULQWLQJ DUJXHV WKDW WKH
ODQJXDJHFRQWDLQHGLQWKHVXEURJDWLRQSURYLVLRQHVWDEOLVKHV
ILUVWSULRULW\WRDQ\IXQGVUHFRYHUHGIURPDUHVSRQVLEOHSDUW\
&RSHODQG2DNVFRPPDQGVWKDWWRDYRLGWKHDSSOLFDWLRQRIWKH
PDNHZKROHUXOHWKH3ODQPXVWDOVRXQDPELJXRXVO\HVWDEOLVK
DULJKWWRDQ\IXOORUSDUWLDOUHFRYHU\7KLVWKHVXEURJDWLRQ
SURYLVLRQIDLOVWRGR1RUGRHVWKHSKUDVH³WRWKHH[WHQWRI
DQ\SD\PHQWV´FOHDUO\GLVDYRZWKHPDNHZKROHUXOH:KLOH
WKLVSKUDVHPD\HVWDEOLVKWKH%HQHILW3ODQ¶VVXEURJDWLRQULJKWV
UHJDUGLQJ DQ\ DPRXQW LW SDLG WRZDUGV %UDQWQHU¶V PHGLFDO
H[SHQVHV LW VXIIHUV IURP WKH VDPH DPELJXLW\ DV WKH SODQ
ODQJXDJHLQ&RSHODQG2DNVLWGRHVQRWDGGUHVVZKHWKHUWKLV
ULJKWDSSOLHVZKHQ%UDQWQHUKDVQRWEHHQIXOO\FRPSHQVDWHG
IRUKHULQMXULHV:HWKHUHIRUHILQGWKHVXEURJDWLRQSURYLVLRQ
DPELJXRXV EHFDXVH LW LV VLOHQW DV WR ZKHWKHU WKH ULJKW RI

-- 5 of 6 --

+LQH\3ULQWLQJ
&RY%UDQWQHU
1RV
VXEURJDWLRQDSSOLHVWRSDUWLDOUHFRYHU\DQGDFFRUGLQJO\WKH
PDNHZKROHUXOHDSSOLHV
%7KH5HLPEXUVHPHQW3URYLVLRQ
+LQH\3ULQWLQJDUJXHVWKDWWKHPDNHZKROHUXOHGRHVQRW
DSSO\WRUHLPEXUVHPHQWSURYLVLRQVDQGWKDWHYHQLIWKHPDNH
ZKROH UXOH GLG DSSO\ WR UHLPEXUVHPHQW SURYLVLRQV WKH
UHLPEXUVHPHQW SURYLVLRQ FRQWDLQHG LQ WKH %HQHILW 3ODQ LV
XQDPELJXRXVDQGUHTXLUHV%UDQWQHUWRUHSD\WKH%HQHILW3ODQ
LQIXOOIURPKHUVHWWOHPHQW
:KLOH VXEURJDWLRQ DQG UHLPEXUVHPHQW DUH GLVWLQFW
GRFWULQHV ZH VHH QR SULQFLSOHG UHDVRQ IRU WUHDWLQJ WKHP
GLIIHUHQWO\ ZKHQ LW FRPHV WR WKH GHIDXOW DSSOLFDWLRQ RI WKH
PDNHZKROH UXOH WR DPELJXRXV SURYLVLRQV ,QGHHG WKH
SURYLVLRQ DW LVVXH LQ &RSHODQG 2DNV ZKLOH GHVLJQDWHG D
VXEURJDWLRQFODXVHDGGUHVVHGERWKDULJKWRIVXEURJDWLRQDQG
DULJKWRIUHLPEXUVHPHQW6HH&RSHODQG2DNV)GDW
³3DUWRIWKHVXEURJDWLRQFODXVHRIWKH3ODQSURYLGHV7KH
&RYHUHG 3HUVRQ DJUHHV WR UHFRJQL]H WKH 3ODQ¶V ULJKW WR
VXEURJDWLRQDQGUHLPEXUVHPHQW7KHVHULJKWVSURYLGHWKH3ODQ
ZLWKSULRULW\RYHUDQ\IXQGVSDLGE\DWKLUGSDUW\WRD&RYHUHG
3HUVRQ´ 1RULVWKHKROGLQJRI&RSHODQG2DNVDSSO\LQJ
WKHPDNHZKROHUXOHWR³SODQODQJXDJH´WKDWZDVQRW³VSHFLILF
DQGFOHDULQHVWDEOLVKLQJERWKDSULRULW\WRWKHIXQGVUHFRYHUHG
DQG D ULJKW WR DQ\ IXOO RU SDUWLDO UHFRYHU\´ UHVWULFWHG WR
VXEURJDWLRQFODXVHV,GDW
,QWKHSUHVHQWFDVHWKHUHLPEXUVHPHQWSURYLVLRQOLNHWKH
VXEURJDWLRQ SURYLVLRQ IDLOV WR FOHDUO\ HVWDEOLVK WKDW +LQH\
3ULQWLQJ¶VULJKWWRUHLPEXUVHPHQWDSSOLHVWRDQ\IXOORUSDUWLDO
UHFRYHU\7KHSURYLVLRQPHUHO\REOLJDWHVSODQPHPEHUVWR
³UHLPEXUVH >WKH %HQHILW 3ODQ@ WR WKH H[WHQW RI SD\PHQWV
PDGH´,WWKXVIDLOVWRDGHTXDWHO\LQIRUP%UDQWQHUWKDW+LQH\
3ULQWLQJFRXOGHQIRUFHWKLVSURYLVLRQHYHQLIVKHKDGQRWEHHQ
FRPSOHWHO\FRPSHQVDWHGIRUWKHILQDQFLDOH[SHQVHVLQFXUUHG
DVDUHVXOWRIKHUVHULRXVPHGLFDOLQMXULHV:HWKHUHIRUHILQG
WKHUHLPEXUVHPHQWSURYLVLRQDPELJXRXVEHFDXVHLWLVVLOHQWDV
1RV +LQH\3ULQWLQJ
&RY%UDQWQHU

WR ZKHWKHU WKH ULJKW RI UHLPEXUVHPHQW DSSOLHV WR SDUWLDO
UHFRYHU\DQGDFFRUGLQJO\WKHPDNHZKROHUXOHDSSOLHV
&$SSOLFDWLRQRIWKH0DNH:KROH5XOH
+DYLQJ IRXQG ERWK WKH VXEURJDWLRQ DQG UHLPEXUVHPHQW
SURYLVLRQVDPELJXRXVEHFDXVHWKH\GRQRWFOHDUO\HVWDEOLVK
WKDWWKH\DSSO\WRDSDUWLDOUHFRYHU\E\WKHLQVXUHGWKHPDNH
ZKROHUXOHZLOOEDUWKHLUHQIRUFHPHQWLI%UDQWQHUKDVQRWEHHQ
IXOO\FRPSHQVDWHGIRUKHULQMXULHV7KHGLVWULFWFRXUWIRXQG
WKDW %UDQWQHU KDV QRW EHHQ PDGH ZKROH E\ KHU
VHWWOHPHQW LQ OLJKWRIKHUFRQWLQXHGPHGLFDOFRVWVDQGORVW
ZDJHV7KHVHPHGLFDOFRVWVXQGLVSXWHGE\+LQH\3ULQWLQJ
LQFOXGHDSSUR[LPDWHO\SHU\HDULQPHGLFDOH[SHQVHV
DQGSHU\HDULQFKLURSUDFWLFH[SHQVHVDQG%UDQWQHU¶V
ORVWZDJHVH[FHHG%HFDXVHWKHUHLVQRFOHDUHUURU
LQ WKLV IDFWXDO ILQGLQJ WKDW %UDQWQHU KDV QRW EHHQ IXOO\
FRPSHQVDWHGWKHPDNHZKROHUXOHSUHYHQWV+LQH\3ULQWLQJ
IURPUHFRYHULQJWKHEHQHILWVLWSDLG%UDQWQHU
,,,
:HUHYLHZWKHGLVWULFWFRXUW¶VGHFLVLRQRQWKHLPSRVLWLRQRI
SHQDOWLHV XQGHU † F IRU DEXVH RI GLVFUHWLRQ 6HH
%DUWOLQJ Y )UXHKDXI &RUS )G WK &LU
QRWLQJWKHDEXVHRIGLVFUHWLRQVWDQGDUGDSSOLHVEHFDXVH
³WKH VWDWXWH H[SUHVVO\ JUDQWV D GLVWULFW FRXUW GLVFUHWLRQ LQ
LPSRVLQJSHQDOWLHVIRUDQHPSOR\HU¶VIDLOXUHWRGLVFORVH´ $Q
DEXVHRIGLVFUHWLRQ³H[LVWVRQO\ZKHQWKHUHYLHZLQJFRXUWLV
ILUPO\FRQYLQFHGWKDWDPLVWDNHKDVEHHQPDGH´,G
(5,6$LPSRVHVSDUWLFXODUGXWLHVRQDSODQDGPLQLVWUDWRUWR
SURYLGH LQIRUPDWLRQ WR D SODQ SDUWLFLSDQW 6HH 86&
† E 6SHFLILFDOO\DSODQDGPLQLVWUDWRUVKDOO³XSRQ
ZULWWHQ UHTXHVW RI DQ\ SDUWLFLSDQW RU EHQHILFLDU\ IXUQLVK D
FRS\ RI WKH ODWHVW XSGDWHG VXPPDU\ SODQ GHVFULSWLRQ SODQ
GHVFULSWLRQDQGWKHODWHVWDQQXDOUHSRUWDQ\WHUPLQDOUHSRUW
WKHEDUJDLQLQJDJUHHPHQWWUXVWDJUHHPHQWFRQWUDFWRURWKHU
LQVWUXPHQWXQGHUZKLFKWKHSODQLVHVWDEOLVKHGRURSHUDWHG´
86& † E $Q DGPLQLVWUDWRU ZKR IDLOV WR

-- 6 of 6 --