Preview
ELECTRONICALLY
/8&,1'$/67250(64 6WDWH%DU1R F I L E D
OVWRUP#VWRUPODZFRP Superior Court of California,
.(11(7+'+2//(1%(&.(64 6WDWH%DU1R
County of San Francisco
NKROOHQEHFN#VWRUPODZFRP 04/15/2020
Clerk of the Court
/$:2)),&(62)/8&,1'$/67250(64 BY: DAVID YUEN
/RPEDUG6WUHHW Deputy Clerk
6DQ)UDQFLVFR&DOLIRUQLD
7HOHSKRQH
)DFVLPLOH
$WWRUQH\VIRU&URVV&RPSODLQDQWV
/$85$2=<,/0$=DQG6$<$72=<,/0$=
683(5,25&28572)7+(67$7(2)&$/,)251,$
&2817<2)6$1)5$1&,6&2
81/,0,7('-85,6',&7,21
-2+1/,7= &DVH1R&*&
3ODLQWLII
),567$0(1'('&5266&203/$,17
YV )25:521*)8/7(50,1$7,21
:521*)8/',6&+$5*(,19,2/$
6$<$72=<,/0$=/$85$*$%5,(/$ 7,212)38%/,&32/,&<&$/*29
2=<,/0$=))*5(67$85$17*5283 &2'(† K 5(7$/,$7,21,19,2
,QFD&DOLIRUQLD&RUSRUDWLRQDQG'2(6 /$7,212)/$%25&2'(†5(
WKURXJKLQFOXVLYH 7$/,$7,21,19,2/$7,212))(+$
&$/*29&2'(† K )$,/85(
'HIHQGDQWV 7235(9(17',6&5,0,1$7,21$1'
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 5(7$/,$7,21 &$/*29&2'(
† K 3520,6625<)5$8'
/$85$2=<,/0$=DQG6$<$72=<,/0$= )5$8',17+(,1'8&(0(17
%5($&+2):5,77(1(03/2<0(17
&URVV&RPSODLQDQWV $*5((0(176%5($&+2)&21
75$&7%5($&+2)),'8&,$5<
YV '87<$66$8/7'()$0$7,21 &DO
&LY&RGH†DQG&DO&LY&RGH†
-2+1/,7=DQG52(67+528*+ ,17(17,21$/,1)/,&7,212)(02
7,21$/',675(66&219(56,21
&URVV'HIHQGDQWV 1213$<0(172):$*(69,2/$
7,2162)/$%25&2'(††
1213$<0(172)0,1,080:$*(±
9,2/$7,212)/$%25&2'(6††
6$1)5$1&,6&20,1,080
:$*(25',1$1&($'0,1,675$7,9(
/$85$2=<,/0$=$1'6$<$72=<,/0$=),567$0(1'('&5266&203/$,17 &*&
&2'(†5HWVHT1213$<0(17
2)29(57,0(&203(16$7,21±9,2
/$7,212)/$%25&2'(6††
%5($&+2)&29(1$172)
*22')$,7+$1')$,5'($/,1*
81-867(15,&+0(17,17(17,21$/
,17(5)(5(1&(:,7+(&2120,&$'
9$17$*(81/$:)8/81)$,5%86,
1(6635$&7,&(6 %86,1(66 352
)(66,216&2'(†HWVHT '(
&/$5$725<5(/,(),1-81&7,9(
5(/,()
&URVV&RPSODLQDQWV/DXUD2]\LOPD]DQG6D\DW2]\LOPD] &URVV&RPSODLQDQWV DOOHJH
DVIROORZV
*(1(5$/$//(*$7,216
&URVV&RPSODLQDQW/DXUD2]\LOPD]LVDQLQGLYLGXDOUHVLGLQJLQWKH6WDWHRI&DOLIRUQLD
&RXQW\RI6DQ)UDQFLVFR
&URVV&RPSODLQDQW6D\DW2]\LOPD]LVDQLQGLYLGXDOUHVLGLQJLQWKH6WDWHRI&DOLIRUQLD
&RXQW\RI6DQ)UDQFLVFR&URVV&RPSODLQDQWVDUHUHIHUUHGWRFROOHFWLYHO\DV ³&URVV&RPSODLQ
DQWV´
&URVV'HIHQGDQW-RKQ/LW] ³/LW]´ LVDQLQGLYLGXDODQGLVDQGZDVDWDOOWLPHVPHQWLRQHG
KHUHLQDUHVLGHQWRIWKH6WDWHRI&DOLIRUQLD&RXQW\RI6DQ)UDQFLVFR
&URVV'HIHQGDQW/LW]LVD&URVV'HIHQGDQWLQ$FWLRQ1R&*&WRJHWKHUZLWK
)RUZDUG)RRG*URXS//& ³//&´ ))*5HVWDXUDQW*URXS,QFDQG([KLELW$KHUHWR@$OWKRXJKIRUPDO(PSOR\PHQW$JUHHPHQWVZHUHSUHSDUHGE\* (/DZ
*URXSIRU&URVV&RPSODLQDQWVDQG&URVV'HIHQGDQW/LW]WKH(PSOR\PHQW$JUHHPHQWVZHUH
QHYHUVLJQHGDVWKH\GLGQRWUHIOHFWWKHHVVHQWLDOWHUPVRIWKH6KDUHKROGHUV¶$JUHHPHQW>([KLELW
$KHUHWR@
2Q)HEUXDU\&URVV'HIHQGDQWV/LW]DJDLQSK\VLFDOO\WKUHDWHQHG&URVV&RP
SODLQDQW/DXUD2]\LOPD]WKLVWLPHZLWKDVODERIPDUEOH$V&URVV'HIHQGDQWV/LW]ZDVPRY
LQJVRPHSLHFHVRIPDUEOH&URVV&RPSODLQDQW/DXUD2]\LOPD]UHTXHVWHGWKDWKHILQGDSHUPD
QHQWORFDWLRQIRUWKLQJVVXFKDVWKLVDWZKLFKSRLQWKHEHFDPHLQFUHDVLQJO\DQJU\WROGKHUVKH
ZDVEHLQJ³SHWW\´DQGSDQWRPLPHGKLWWLQJ&URVV'HIHQGDQWZLWKWKHVODEDQGHYHQWXDOO\
VODPPHGWKHPDUEOHRQWRDWDEOHQHDUE\WRIXUWKHULQWLPLGDWHDQGFUHDWHJUHDWHUIHDULQ&URVV
&RPSODLQDQW/DXUD2]\LOPD]ZKLFKLWGLG
2Q)HEUXDU\&URVV&RPSODLQDQWVGLJLWDOO\VXEPLWWHGWKHUHFLSHVLQJUHGLHQWV
SURFHGXUHVWHFKQLTXHVDQGPHWKRGVIRUSURGXFLQJWKHIRRGRIIHULQJVIURPWKH)DVW&DVXDO0HQX
DVUHTXLUHGXQGHUWKH028
2Q0DUFK&URVV&RPSODLQDQW/DXUD2]\LOPD]VHQWDQHPDLOQRWLQJWKDW&URVV
'HIHQGDQW/LW]KDGIDLOHGWRSURYLGHDFDVKIORZSUHRSHQLQJEXGJHWIRUWKHUHVWDXUDQWZLWKLQ
/$85$2=<,/0$=$1'6$<$72=<,/0$=),567$0(1'('&5266&203/$,17 &*&
RQHZHHNRIWKHH[HFXWLRQRIWKH028GHVSLWH&URVV&RPSODLQDQWVKDYLQJDVVLVWHG&URVV'H
IHQGDQW/LW]ZLWKWKHLQYHQWRU\DQGEDFNRIKRXVHODERUHVWLPDWHVIRUSXUSRVHVRIFRPSOHWLQJWKH
SUHRSHQLQJEXGJHW
2Q0DUFK&URVV'HIHQGDQW/LW]UHIXVHGWRVSHDNZLWK&URVV&RPSODLQDQW
/DXUD2]\LOPD]VD\LQJVKHGLGQRWKDYHVXIILFLHQWH[SHULHQFHIRUKLPWRVSHDNZLWKKHUDQGWKDW
KHZRXOGRQO\VSHDNWRKHUKXVEDQG$WWKHWLPH&URVV&RPSODLQDQW/DXUD2]\LOPD]ZDVZLWK
VRPH1RRVKHPSOR\HHVLQWKHUHVWDXUDQWZKHQ&URVV'HIHQGDQW/LW]ZHQWLQWRDIXULRXVWKUHDW
HQLQJUDJHZLOGO\VKULHNLQJDWWLPHVVSHZLQJYHQRPRXVWKUHDWVDWKHULQFOXGLQJE\ZD\RIH[
DPSOH³:DWFKZKHUH\RXDUHJRLQJZDWFKZKR\RXDUHWDONLQJWREHFDXVH\RXUOLIHLVDERXWWR
FKDQJHI@RUDQ\HPSOR\HUODERURUJDQL]DWLRQHPSOR\PHQWDJHQF\RUSHUVRQWRGLV
FKDUJHH[SHORURWKHUZLVHGLVFULPLQDWHDJDLQVWDQ\SHUVRQEHFDXVHWKHSHUVRQKDVRSSRVHGDQ\
SUDFWLFHVIRUELGGHQXQGHUWKLVSDUWRUEHFDXVHWKHSHUVRQKDVILOHGDFRPSODLQWWHVWLILHGRUDV
VLVWHGLQDQ\SURFHHGLQJXQGHUWKLVSDUW´ &DO*RY&RGH† K $VDOVRSURPXOJDWHGLQ
WKH&DOLIRUQLD&RQVWLWXWLRQ$UWLFOH,6HFWLRQDIXQGDPHQWDOSXEOLFSROLF\H[LVWVIRUWKH
/$85$2=<,/0$=$1'6$<$72=<,/0$=),567$0(1'('&5266&203/$,17 &*&
ZRUNSODFHWREHIUHHIURPGLVFULPLQDWLRQ
2QRUDERXW1RYHPEHU&URVV'HIHQGDQWVZURQJIXOO\GLVFKDUJHG&URVV&RP
SODLQDQWVZLWKRXWFDXVHLQUHWDOLDWLRQIRUSURWHFWHGDFWLRQVLQFOXGLQJWKHUHSRUWLQJRIWKUHDWV
PDGHDJDLQVW&URVV&RPSODLQDQWVE\&URVV'HIHQGDQW/LW]WRWKH6DQ)UDQFLVFR3ROLFH'HSDUW
PHQWDQG))*5*,DQG))*¶VFRXQVHO* (/DZ*URXS
&URVV&RPSODLQDQWV¶KDGPDGHNQRZQWKHLURSSRVLWLRQWRDQGORGJHGFRPSODLQWVDERXW
JHQGHUEDVHGGLVFULPLQDWLRQE\&URVV'HIHQGDQWVIRUZKLFKLQYHVWLJDWLRQVZHUHLQLWLDWHGDQG
ZHUHEHLQJLQYHVWLJDWHGLQWHUQDOO\DQGE\HPSOR\PHQWFRXQVHO6KRUWO\DIWHU&URVV&RPSODLQ
DQWVZHUHLQWHUYLHZHGE\HPSOR\PHQWFRXQVHODOOHJHGO\UHJDUGLQJFRPSODLQWVPDGHDJDLQVW
&URVV'HIHQGDQW/LW]E\HPSOR\HHVDQGFRQWUDFWRUV&URVV&RPSODLQDQWVZHUHWHUPLQDWHGIURP
WKHLUHPSOR\PHQW&URVV&RPSODLQDQWVDUHLQIRUPHGDQGEHOLHYHWKDW&URVV'HIHQGDQWVWHUPL
QDWHGWKHLUHPSOR\PHQWLQRUGHUWRTXDVKDQ\LQYHVWLJDWLRQLQWRGLVFULPLQDWLRQFODLPVPDGH
DJDLQVW&URVV'HIHQGDQW/LW]
&URVV&RPSODLQDQWVDUHLQIRUPHGDQGEHOLHYHWKDWWKHLULQTXLULHVLQWRILQDQFLDOLPSURSUL
HWLHVDQGLQHSWQHVVE\&)2&URVV'HIHQGDQW/LW]ZKLFKWKH\DOOHJHGZHUHLPSURSHUDQGGHWUL
PHQWDOWR1RRVKDQGLWVPHPEHUV¶LQWHUHVWVLQ))*LQFOXGLQJ&URVV&RPSODLQDQWV¶LQWHUHVWV
ZHUHDVXEVWDQWLDOPRWLYDWLQJUHDVRQIRU&URVV'HIHQGDQWV¶WHUPLQDWLRQRI&URVV&RPSODLQDQWV¶
HPSOR\PHQW
&URVV&RPSODLQDQWVDUHLQIRUPHGDQGEHOLHYHWKDW&URVV'HIHQGDQWVZURQJIXOO\WHUPL
QDWHG&URVV&RPSODLQDQWV¶HPSOR\PHQWLQDQHIIRUWWRVLOHQFHDQGSXQLVK&URVV&RPSODLQDQWV
DQGWRSUHYHQWWKHPIURPKDYLQJIXUWKHUDFFHVVWRDQ\1RRVKILQDQFLDODQGRURSHUDWLQJUHFRUGV
VWDIIRUIDFLOLWLHVDQGWRSUHYHQWIXUWKHUZRUNSODFHLQYHVWLJDWLRQVUHJDUGLQJVH[XDOGLVFULPLQDWLRQ
DQGKDUDVVPHQW
&URVV&RPSODLQDQWVKDYHEHHQVHYHUHO\KDUPHGE\&URVV'HIHQGDQWV¶FRQGXFWZKLFK
ZDVDVXEVWDQWLDOIDFWRULQFDXVLQJ&URVV&RPSODLQDQWV¶KDUP,QIDFW&URVV'HIHQGDQW/LW]UH
SHDWHGWKUHDWVWRHQGWKHFDUHHUVRI&URVV&RPSODLQDQWVDQGKLVDFWLRQVRQIXOILOOPHQWRIWKDW
WKUHDWLQFOXGLQJE\WHUPLQDWLQJ&URVV&RPSODLQDQWV¶HPSOR\PHQWDQGE\ORFNLQJWKHPRXWRI
/$85$2=<,/0$=$1'6$<$72=<,/0$=),567$0(1'('&5266&203/$,17 &*&
WKHLUEXVLQHVVDQGGHIDPLQJWKHPE\LQWHUDOLDKLULQJDSXEOLFLVWWRVSUHDGWKHLUGHIDPDWRU\UH
PDUNVDJDLQVW&URVV&RPSODLQWVWKURXJKVRFLDOPHGLDDQGRQOLQHDQGSULQWSXEOLFDWLRQVLQFOXG
LQJWKH6DQ)UDQFLVFR&KURQLFOHXQGHUWKHJXLVHRIOLWLJDWLRQSULYLOHJHLVIXUWKHUHYLGHQFHWKDW
WKHGLVFKDUJHZDVLQYLRODWLRQRISXEOLFSROLF\
$VDGLUHFWDQGSUR[LPDWHUHVXOWRIWKHZURQJIXOWHUPLQDWLRQRIWKHLU(PSOR\PHQW$JUHH
PHQWV&URVV&RPSODLQDQWVKDYHVXIIHUHGKDUPLQFOXGLQJEXWQRWOLPLWHGWRKXPLOLDWLRQHPEDU
UDVVPHQWORVVRIUHSXWDWLRQDQGPHQWDODQJXLVKDOOWREHVKRZQDFFRUGLQJWRSURRI
&URVV&RPSODLQDQWVKDYHLQFXUUHGDQGFRQWLQXHWRLQFXUOHJDOH[SHQVHVDQGDWWRUQH\V¶
IHHV&URVV&RPSODLQDQWVDUHXQDZDUHRIWKHSUHFLVHDPRXQWVRIWKHVHH[SHQVHVDQGIHHV
&URVV'HIHQGDQWV¶GHFLVLRQWRWHUPLQDWH&URVV&RPSODLQDQWV¶HPSOR\PHQWVXEMHFWHG
&URVV&RPSODLQDQWVWRFUXHODQGXQMXVWKDUGVKLSLQFRQVFLRXVGLVUHJDUGRI&URVV&RPSODLQDQWV¶
ULJKWV&URVV'HIHQGDQWV¶DFWLRQVDVDOOHJHGKHUHLQZHUHGRQHZLWKPDOLFHRSSUHVVLRQDQG
IUDXGDQG&URVV&RPSODLQDQWVDUHHQWLWOHGWRUHFRYHU\RIH[HPSODU\RUSXQLWLYHGDPDJHVLQDQ
DPRXQWDFFRUGLQJWRSURRI
&URVV&RPSODLQDQWVILOHGFODLPVZLWKWKH&DOLIRUQLD'HSDUWPHQWRI)DLU(PSOR\PHQWDQG
+RXVLQJ ³')(+´ IRULQWHUDOLDJHQGHUDQGUDFHGLVFULPLQDWLRQE\&URVV'HIHQGDQWV&URVV
&RPSODLQDQWVUHFHLYHG5LJKWWR6XHOHWWHUVLQ)HEUXDU\DQGEULQJWKLVDFWLRQZLWKLQRQH
\HDURIWKHGDWHRIUHFHLSWRIWKHULJKWWRVXHOHWWHUV
$VDGLUHFWDQGSUR[LPDWHUHVXOWRIWKHWHUPLQDWLRQRIWKHLU(PSOR\PHQW$JUHHPHQWV
&URVV&RPSODLQDQWVKDYHEHHQGDPDJHGLQWKHSULQFLSDOVXPWREHSURYHQDWWULDOZLWKVDLG
GDPDJHVFRPPHQFLQJWRDFFUXHRQ1RYHPEHUSOXVSUHMXGJPHQWLQWHUHVW
7+,5'&$86(2)$&7,21
5(7$/,$7,21,19,2/$7,212)/$%25&2'(†
&URVV&RPSODLQDQWVUHDOOHJHDQGLQFRUSRUDWHKHUHLQE\WKLVUHIHUHQFHWKHDOOHJDWLRQVRI
WKHIRUHJRLQJ3DUDJUDSKV
&URVV&RPSODLQDQWVZHUHHQJDJHGE\&URVV'HIHQGDQWVSXUVXDQWWRZULWWHQ(PSOR\PHQW
$JUHHPHQWV
/$85$2=<,/0$=$1'6$<$72=<,/0$=),567$0(1'('&5266&203/$,17 &*&
3XUVXDQWWR/DERU&RGH6HFWLRQ† D QRSHUVRQVKDOOGLVFKDUJHRULQDQ\PDQQHU
GLVFULPLQDWHDJDLQVWDQ\HPSOR\HHEHFDXVHWKHHPSOR\HHKDVPDGHDQ\RUDORUZULWWHQVWDWXWRU\
FRPSODLQWLQVWLWXWHGRUFDXVHGWREHLQVWLWXWHGDQ\SURFHHGLQJXQGHURUUHODWLQJWRKLVRUKHU
ULJKWVRUKDVWHVWLILHGRULVDERXWWRWHVWLI\LQWKHSURFHHGLQJRUEHFDXVHRIWKHH[HUFLVHE\WKHHP
SOR\HHRQEHKDOIRIKLPVHOIKHUVHOIRURWKHUVRIDQ\ULJKWVDIIRUGHGKLPRUKHU
$Q\HPSOR\HHZKRLVVRGLVFKDUJHGWKUHDWHQHGZLWKGLVFKDUJHGHPRWHGVXVSHQGHGRU
LQDQ\RWKHUPDQQHUGLVFULPLQDWHGDJDLQVWLQWKHWHUPVDQGFRQGLWLRQVRIHPSOR\PHQWE\KLVRU
KHUHPSOR\HUDVGHVFULEHGLQWKLVVHFWLRQVKDOOEHHQWLWOHGWRUHLQVWDWHPHQWDQGUHLPEXUVHPHQWIRU
ORVWZDJHVDQGZRUNEHQHILWVFDXVHGE\WKHDFWVRIWKHHPSOR\HU
$Q\HPSOR\HUZKRZLOOIXOO\UHIXVHVWRUHKLUHSURPRWHRURWKHUZLVHUHVWRUHDQHPSOR\HH
RUIRUPHUHPSOR\HHZKRKDVEHHQGHWHUPLQHGWREHHOLJLEOHIRUUHKLULQJRUSURPRWLRQE\DJULHY
DQFHSURFHGXUHDUELWUDWLRQRUKHDULQJDXWKRUL]HGE\ODZLVJXLOW\RIDPLVGHPHDQRU
)RUSXUSRVHVRIWKLVVHFWLRQ³HPSOR\HU´RU³DSHUVRQDFWLQJRQEHKDOIRIWKHHPSOR\HU´
LQFOXGHVEXWLVQRWOLPLWHGWRDFOLHQWHPSOR\HUDVGHILQHGLQSDUDJUDSK RIVXEGLYLVLRQ D RI
6HFWLRQDQGDQHPSOR\HUOLVWHGLQVXEGLYLVLRQ E RI6HFWLRQ $PHQGHGE\6WDWV
&K6HF 6% (IIHFWLYH-XQH
&URVV&RPSODLQDQWVZHUHVXEMHFWHGWRUHWDOLDWLRQGXULQJWKHFRXUVHRIWKHLUHPSOR\PHQW
DQGIROORZLQJWKHWHUPLQDWLRQRI&URVV&RPSODLQDQW¶VHPSOR\PHQWZLWK1RRVKDVDOOHJHG
KHUHLQ$WDOOWLPHVUHOHYDQW&URVV'HIHQGDQWVDFWHGLQDPDQQHUFRQVLVWHQWZLWKUHWDOLDWLRQ
DJDLQVW&URVV&RPSODLQDQWVLQFOXGLQJ&URVV'HIHQGDQW/LW]¶VWKUHDWVWRHQG&URVV&RPSODLQ
DQWV¶FDUHHUVDQGKLVDFWLRQVWKHUHRQE\WHUPLQDWLQJWKHPLQ
&URVV&RPSODLQDQWVKDYHVXIIHUHGDQGFRQWLQXHWRVXIIHUVXEVWDQWLDOORVVHVLQLQFRPH
HDUQLQJVUHSXWDWLRQORVWRSSRUWXQLWLHVERQXVHVDQGEHQHILWVDQGKDYHEHHQVLJQLILFDQWO\GDP
DJHGLQWKHLUFDSDFLW\IRUIXWXUHHDUQLQJVDVDGLUHFWDQGSUR[LPDWHUHVXOWRI&URVV'HIHQGDQWV¶
UHWDOLDWLRQ
$VIXUWKHUGLUHFWDQGSUR[LPDWHUHVXOWRI&URVV'HIHQGDQWV¶UHWDOLDWLRQ&URVV&RPSODLQ
DQWKDVVXIIHUHGKDUPLQFOXGLQJEXWQRWOLPLWHGWRKXPLOLDWLRQHPEDUUDVVPHQWORVVRI
/$85$2=<,/0$=$1'6$<$72=<,/0$=),567$0(1'('&5266&203/$,17 &*&
UHSXWDWLRQDQGPHQWDODQJXLVK
&URVV&RPSODLQDQWVKDYHLQFXUUHGDQGFRQWLQXHWRLQFXUOHJDOH[SHQVHVDQGDWWRUQH\V¶
IHHV&URVV&RPSODLQDQWVDUHXQDZDUHRIWKHSUHFLVHDPRXQWVRIWKHVHH[SHQVHVDQGIHHV
&URVV'HIHQGDQWV¶UHWDOLDWLRQDJDLQVW&URVV&RPSODLQDQWVVXEMHFWHG&URVV&RPSODLQDQWV
WRFUXHODQGXQMXVWKDUGVKLSLQFRQVFLRXVGLVUHJDUGRI&URVV&RPSODLQDQWV¶ULJKWV&URVV'H
IHQGDQWV¶DFWLRQVDVDOOHJHGLQWKLVFDXVHRIDFWLRQZHUHGRQHZLWKPDOLFHRSSUHVVLRQDQGIUDXG
DQG&URVV&RPSODLQDQWVDUHHQWLWOHGWRUHFRYHU\RIH[HPSODU\RUSXQLWLYHGDPDJHVLQDQDPRXQW
DFFRUGLQJWRSURRI
)2857+&$86(2)$&7,21
5(7$/,$7,21,19,2/$7,212))(+$&$/*29&2'(† K
&URVV&RPSODLQDQWVUHDOOHJHDQGLQFRUSRUDWHKHUHLQE\WKLVUHIHUHQFHWKHDOOHJDWLRQVRI
WKHIRUHJRLQJ3DUDJUDSKV
&URVV&RPSODLQDQWVFRPSODLQHGDERXWJHQGHUEDVHGGLVFULPLQDWLRQE\'HIHQGDQW/LW]
&URVV&RPSODLQDQWVDOOHJHWKDW&URVV'HIHQGDQWVUHWDOLDWHGDJDLQVWWKHPIRUORGJLQJ
FRPSODLQWVDERXWJHQGHUEDVHGGLVFULPLQDWLRQE\LPSURSHUO\WHUPLQDWLQJ&URVV&RPSODLQDQWV¶
HPSOR\PHQWDQGYLRODWLQJWKHWHUPVRIWKHLU(PSOR\PHQW$JUHHPHQWZLWK&URVV'HIHQGDQWV
&URVV&RPSODLQDQWV¶FRPSODLQWVDERXWJHQGHUEDVHGGLVFULPLQDWLRQDQGLQLWLDWLRQRILQ
YHVWLJDWLRQVLQWRKLVFRQGXFWZHUHDVXEVWDQWLDOPRWLYDWLQJUHDVRQIRU&URVV'HIHQGDQW/LW]¶V
GHFLVLRQWRWHUPLQDWH&URVV&RPSODLQDQWV¶HPSOR\PHQWZKLFK&URVV'HIHQGDQWVSXUSRUWHGWR
UDWLI\VRPHPRQWKVODWHUWKURXJKDQH[SDQGHGQHZ%RDUGRI'LUHFWRUVRI))*5*,
&URVV'HIHQGDQWV¶GHFLVLRQWRWHUPLQDWH&URVV&RPSODLQDQWV¶HPSOR\PHQWZDVLQWHQGHG
WRFDXVHJUHDWKDUPWR&URVV&RPSODLQDQWVDQGZDVDVXEVWDQWLDOIDFWRULQFDXVLQJ&URVV&RP
SODLQDQWV¶KDUP
$VDGLUHFWDQGSUR[LPDWHUHVXOWRI&URVV'HIHQGDQWV¶FRQGXFW&URVV&RPSODLQDQWVKDYH
VXIIHUHGDQGFRQWLQXHWRVXIIHUVXEVWDQWLDOORVVHVLQLQFRPHHDUQLQJVUHSXWDWLRQORVWRSSRUWXQL
WLHVERQXVHVDQGEHQHILWVDQGKDVVLJQLILFDQWO\GDPDJHGWKHLUFDSDFLW\IRUIXWXUHHDUQLQJV
$VDIXUWKHUGLUHFWDQGSUR[LPDWHUHVXOWRI&URVV'HIHQGDQWV¶FRQGXFW&URVV
/$85$2=<,/0$=$1'6$<$72=<,/0$=),567$0(1'('&5266&203/$,17 &*&
&RPSODLQDQWVKDYHVXIIHUHGDQGFRQWLQXHWRVXIIHUVXEVWDQWLDOKDUPLQFOXGLQJEXWQRWOLPLWHGWR
KXPLOLDWLRQHPEDUUDVVPHQWORVVRIUHSXWDWLRQDQGPHQWDODQJXLVKDOOWREHVKRZQDFFRUGLQJWR
SURRIDWWULDO
&URVV&RPSODLQDQWVKDYHLQFXUUHGDQGFRQWLQXHWRLQFXUOHJDOH[SHQVHVDQGDWWRUQH\V¶
IHHV&URVV&RPSODLQDQWVDUHXQDZDUHRIWKHSUHFLVHDPRXQWVRIWKHVHH[SHQVHVDQGIHHVDQG
ZLOOSURYHVDPHDWWULDO
&URVV'HIHQGDQWV¶UHWDOLDWLRQDJDLQVW&URVV&RPSODLQDQWVVXEMHFWHG&URVV&RPSODLQDQWV
WRFUXHODQGXQMXVWKDUGVKLSLQFRQVFLRXVGLVUHJDUGRI&URVV&RPSODLQDQWV¶ULJKWV&URVV'H
IHQGDQWV¶DFWLRQVDVDOOHJHGLQWKLVFDXVHRIDFWLRQZHUHGRQHZLWKVSHFLILFLQWHQWWRGHVWUR\
&URVV&RPSODLQDQWVFDUHHUVDQGZHUHGRQHZLWKPDOLFHRSSUHVVLRQDQGIUDXGIRUZKLFK&URVV
&RPSODLQDQWVDUHHQWLWOHGWRUHFRYHU\RIH[HPSODU\RUSXQLWLYHGDPDJHVLQDQDPRXQWDFFRUGLQJ
WRSURRI
),)7+&$86(2)$&7,21
)$,/85(7235(9(17',6&5,0,1$7,21$1'5(7$/,$7,21
&$/*29&2'(† K
&URVV&RPSODLQDQWVUHDOOHJHDQGLQFRUSRUDWHKHUHLQE\WKLVUHIHUHQFHWKHDOOHJDWLRQVRI
WKHIRUHJRLQJ3DUDJUDSKV
&URVV&RPSODLQDQWVZHUHHQJDJHGE\&URVV'HIHQGDQWVSXUVXDQWWRZULWWHQ(PSOR\PHQW
$JUHHPHQWV
&URVV&RPSODLQDQWV¶HPSOR\PHQWZDVIRUPXODWHGRQDUHOLDQFHWKDW&URVV&RPSODLQDQWV
ZHUHHQWLWOHGWRDZRUNSODFHIUHHRIKDUDVVPHQWWKUHDWVDQGEXOO\LQJ
$WDOOWLPHVUHOHYDQW&URVV&RPSODLQDQWVZHUHUHSHDWHGO\VXEMHFWHGWRDQGREVHUYHGD
WURXEOLQJSDWWHUQRIZRUNSODFHEXOO\LQJKDUDVVPHQWDQGWKUHDWVE\&URVV'HIHQGDQW/LW]ZKR
ZDVYHUEDOO\DQGSK\VLFDOO\DEXVLYHWRZDUGV&URVV&RPSODLQDQWVKLVVXERUGLQDWHVYHQGRUUHS
UHVHQWDWLYHVFRQWUDFWRUVDQGRWKHUVGXULQJWKHFRXUVHRI&URVV&RPSODLQDQWV¶HPSOR\PHQW\HOO
LQJ GHVSLWHDIILUPLQJWKDW\HOOLQJLVFRQVLGHUHGQRQSURIHVVLRQDOFRQGXFW VSLWWLQJXVLQJSUR
IDQHVH[LVWDQGLQVXOWLQJZRUGVDQGWKUHDWHQLQJSHRSOHZLWKSK\VLFDOKDUP
&URVV&RPSODLQDQWVZHUHVXEMHFWHGWRUHWDOLDWLRQGXULQJWKHFRXUVHRIWKHLUHPSOR\PHQW
/$85$2=<,/0$=$1'6$<$72=<,/0$=),567$0(1'('&5266&203/$,17 &*&
DQGIROORZLQJWKHWHUPLQDWLRQRI&URVV&RPSODLQDQW¶VHPSOR\PHQWDVDOOHJHGKHUHLQ$WDOO
WLPHVUHOHYDQW&URVV'HIHQGDQWVDFWHGLQDPDQQHUFRQVLVWHQWZLWKUHWDOLDWLRQDJDLQVW&URVV
&RPSODLQDQWVLQWHUDOLD7KUHDWHQLQJWRILUH&URVV&RPSODLQDQWVDQGRWKHUVWDIIEXOO\LQJDQG
GHPHDQLQJ&URVV&RPSODLQDQW/DXUD2]\LOPD]SK\VLFDOO\WKUHDWHQLQJ&URVV&RPSODLQDQWV
PLVRJ\QLVWLFFRQGXFWFROOXGLQJDPRQJHPSOR\HHVWRVS\RQ&URVV&RPSODLQDQWVWULYLDOL]LQJ
GHPHDQLQJSDWURQL]LQJDQGPDNLQJIDOVHVWDWHPHQWVWRIHPDOHFRQWUDFWRUVSHUYDVLYHWULYLDOL]LQJ
GHPHDQLQJKDUDVVLQJDQGEXOO\LQJDQGEHOLWWOLQJEHKDYLRUWRZDUGVIHPDOHHPSOR\HHVDFFXVLQJ
IHPDOHHPSOR\HH V RIPLVFRQGXFWZLWKRXWUHJDUGWRDFWXDOIDFWVORFNLQJRXWIHPDOHHPSOR\HH
IURPKHUSODFHRIEXVLQHVVXVLQJERG\JXDUGVDQGRWKHULQVWDQFHVRIEXOO\LQJDQGDEXVLYHEHKDY
LRUWRZDUGV&URVV&RPSODLQDQWVRYHUWKHFRXUVHRIWKHLUHPSOR\PHQWLQFOXGLQJWKUHDWHQLQJWR
HQG&URVV&RPSODLQDQWVFDUHHUV
&URVV'HIHQGDQW/LW]¶VEHKDYLRUWRZDUGVHPSOR\HHVZDVXQSURIHVVLRQDODQGFRQVWLWXWHG
ZRUNSODFHKDUDVVPHQWDQGEXOO\LQJ&URVV'HIHQGDQW/LW]¶VPRVWDEXVLYHDQGKRVWLOHEHKDYLRU
ZDVGLUHFWHGWRZDUGV&URVV&RPSODLQDQW/DXUD2]\LOPD]7KHDJJUHVVLYHPDQQHULQZKLFK
&URVV'HIHQGDQW/LW]EHOLWWOHGIHPDOHHPSOR\HHVDQG&URVV&RPSODLQDQW/DXUD2]\LOPD]DQG
KLVGLVFULPLQDWRU\FRPPHQWVGHPRQVWUDWHGWKDWKLVDQLPRVLW\ZDVVXEVWDQWLDOO\PRWLYDWHGE\
JHQGHUELDV
&URVV'HIHQGDQWVIDLOHGWRWDNHDOOUHDVRQDEOHVWHSVWRSUHYHQWWKHKDUDVVPHQWGLVFULPL
QDWLRQDQGUHWDOLDWLRQGHVSLWHKDYLQJEHHQPDGHDZDUHRIVDPH,WZDVIRUHVHHDEOHWKDW&URVV
'HIHQGDQWV¶IDLOXUHWRWDNHDOOUHDVRQDEOHVWHSVWRSUHYHQWWKHKDUDVVPHQWGLVFULPLQDWLRQDQGUH
WDOLDWLRQZDVDVXEVWDQWLDOIDFWRULQFDXVLQJ&URVV&RPSODLQDQWV¶KDUPDQGGLGFDXVHWKHLUKDUP
$VDGLUHFWDQGSUR[LPDWHUHVXOWRI&URVV'HIHQGDQWV¶FRQGXFW&URVV&RPSODLQDQWVKDYH
VXIIHUHGDQGFRQWLQXHWRVXIIHUVXEVWDQWLDOORVVHVLQLQFRPHHDUQLQJVUHSXWDWLRQORVWRSSRUWXQL
WLHVERQXVHVDQGEHQHILWVDQGKDYHEHHQVLJQLILFDQWO\GDPDJHGLQWKHLUFDSDFLW\IRUIXWXUHHDUQ
LQJV
$VIXUWKHUGLUHFWDQGSUR[LPDWHUHVXOWRI&URVV'HIHQGDQWV¶FRQGXFW&URVV&RPSODLQDQW
KDVVXIIHUHGKDUPLQFOXGLQJEXWQRWOLPLWHGWRKXPLOLDWLRQHPEDUUDVVPHQWORVVRIUHSXWDWLRQ
/$85$2=<,/0$=$1'6$<$72=<,/0$=),567$0(1'('&5266&203/$,17 &*&
DQGPHQWDODQJXLVK
&URVV&RPSODLQDQWVKDYHLQFXUUHGDQGFRQWLQXHWRLQFXUOHJDOH[SHQVHVDQGDWWRUQH\V¶
IHHV&URVV&RPSODLQDQWVDUHXQDZDUHRIWKHSUHFLVHDPRXQWVRIWKHVHH[SHQVHVDQGIHHV
&URVV'HIHQGDQWV¶UHWDOLDWLRQDJDLQVW&URVV&RPSODLQDQWVVXEMHFWHG&URVV&RPSODLQDQWV
WRFUXHODQGXQMXVWKDUGVKLSLQFRQVFLRXVGLVUHJDUGRI&URVV&RPSODLQDQWV¶ULJKWV&URVV'H
IHQGDQWV¶DFWLRQVDVDOOHJHGLQWKLVFDXVHRIDFWLRQZHUHGRQHZLWKPDOLFHRSSUHVVLRQDQGIUDXG
DVDOOHJHGKHUHLQDQG&URVV&RPSODLQDQWVDUHHQWLWOHGWRUHFRYHU\RIH[HPSODU\RUSXQLWLYH
GDPDJHVLQDQDPRXQWDFFRUGLQJWRSURRI
6,;7+&$86(2)$&7,21
3520,6625<)5$8'
&URVV&RPSODLQDQWVUHDOOHJHDQGLQFRUSRUDWHKHUHLQE\WKLVUHIHUHQFHWKHDOOHJDWLRQVRI
WKHIRUHJRLQJ3DUDJUDSKV
,Q'HFHPEHULQ6DQ)UDQFLVFR&DOLIRUQLD&URVV&RPSODLQDQWVHQWHUHGLQWRDQRUDO
DJUHHPHQWZLWK&URVV'HIHQGDQW/LW]DVGHVFULEHGLQ3DUDJUDSKZKLFKZDVPHPRULDOL]HGDV
VHWIRUWKLQ([KLELW$KHUHWR
&URVV&RPSODLQDQWVMXVWLILDEO\UHOLHGRQWKHSURPLVHVPDGHE\&URVV'HIHQGDQWVLQFRQ
WLQXLQJWRJRIRUZDUGZLWKWKHUHVWDXUDQWDQGFRQWLQXHGWRSURYLGHVHUYLFHVIRUWKHUHVWDXUDQW
VLJQHGWKHWHQ\HDUOHDVHZLWKWZRILYH\HDUUHQHZDOVWHUPVIRUWKHUHVWDXUDQWDVJXDUDQWRUVEH
FDXVHWKHSURSHUW\RZQHUZRXOGQRWDJUHHWROHDVHWKHSURSHUW\WR&URVV'HIHQGDQWVDORQHDQG
UHTXLUHGWKHJXDUDQWHHVRI&URVV&RPSODLQDQWVWKHH[HFXWLYHFKHIRZQHUVZKRZRXOGKDYHD
ILQDQFLDOLQWHUHVWLQWKHUHVWDXUDQWDQGEHSUHVHQWLQWKHUHVWDXUDQWRQDGDLO\EDVLV&URVV'H
IHQGDQW/LW]IDLOHGWRLQIRUPWKHODQGORUGRU&URVV&RPSODLQDQWVWKDWKHLQWHQGHGWRORFNWKHP
RXWDVVRRQDVWKHUHVWDXUDQWEHFDPHVXFFHVVIXODQGKDGKHWROGWKHP&URVV&RPSODLQDQWVZRXOG
QRWKDYHDJUHHGWRVLJQWKHSHUVRQDOJXDUDQWHHVIRUWKHOHDVH
2Q)HEUXDU\&URVV&RPSODLQDQWVVLJQHGWKHOHDVHIRUWKHUHVWDXUDQWDVJXDUDQ
WRUV&URVV&RPSODLQDQWVSURYLGHGVHUYLFHVRQDGDLO\EDVLVLQYROYHGLQWKHFRQFHSWGHVLJQFRQ
VWUXFWLRQDQGGHFLVLRQVPDNLQJSURFHVVIRUWKHUHVWDXUDQWDQGSURYLGHGWKHXVHRILQWHOOHFWXDO
/$85$2=<,/0$=$1'6$<$72=<,/0$=),567$0(1'('&5266&203/$,17 &*&
SURSHUW\ZKLFKZDVXVHGE\WKHUHVWDXUDQWIURPLWVLQFHSWLRQDQGRSHQLQJWKURXJK&URVV'HIHQG
DQWV¶ORFNRXWRI&URVV&RPSODLQDQWVIURPWKHSUHPLVHVWKURXJKDWOHDVWWKHILOLQJRI&URVV&RP
SODLQDQWV¶&URVV&RPSODLQW
&URVV'HIHQGDQWVIDOVHO\SURPLVHG&URVV&RPSODLQDQWVWKDWWKH\ZRXOGEHSURYLGHG
KHDOWKLQVXUDQFHDVSDUWRIWKHHPSOR\PHQWKRZHYHUWKLVSURPLVHZDVIDOVHDQG&URVV'HIHQG
DQWVIDLOHGWRSURFXUHWKHPDQGDWHGDQGSURPLVHGKHDOWKLQVXUDQFHIRUWKHIXOOWHUPRIWKHLUHP
SOR\PHQWDVUHTXLUHGE\ODZ&URVV'HIHQGDQWVIDOVHO\SURPLVHG&URVV&RPSODLQWVWKDWWKH\
ZRXOGEHSDLGSXUVXDQWWRWKH(PSOR\PHQW$JUHHPHQWV
7KHUHSUHVHQWDWLRQVPDGHE\&URVV'HIHQGDQWVDVGHVFULEHGKHUHLQZHUHLQIDFWIDOVH
7KHWUXHIDFWVZHUHWKDW&URVV'HIHQGDQWVKDGQRLQWHQWLRQRIDOORZLQJ&URVV&RPSODLQDQWVWR
HQMR\WKHEHQHILWVRIWKHLURZQHUVKLSLQWHUHVWLQ))*5*,RU))*KDGQRLQWHQWLRQRIUHWDLQLQJ
&URVV&RPSODLQDQWV¶FRQWLQXHGHPSOR\PHQWDV([HFXWLYH&KHIVKDGQRLQWHQWLRQRIDOORZLQJ
&URVV&RPSODLQDQWVVKDUHVLQWKH&RUSRUDWLRQWRYHVWDQGLQVWHDGVLPSO\LQWHQGHGWRUHWDLQ
&URVV&RPSODLQDQWVVHUYLFHVDV([HFXWLYH&KHIVRQO\XQWLOWKHWLPHDWZKLFKWKHOHDVHZDV
VLJQHGZLWK&URVV&RPSODLQDQWVDVJXDUDQWRUVWKHWLPHDWZKLFKWKHUHVWDXUDQWEHFDPHHVWDE
OLVKHGDQGSURILWDEOHE\ZKLFKWLPH&URVV'HIHQGDQWVNQHZZRXOGKDYHDQGGLGDQGGRKDYHWKH
EHQHILWRI&URVV&RPSODLQDQWV¶LQWHOOHFWXDOSURSHUW\LQFOXGLQJWKHFRQFHSWV\VWHPVDQGSUR
FHVVHVDOOUHFLSHVDQGPHQXVGHYHORSHGE\&URVV&RPSODLQDQWVDQGGLGQRWLQWHQGWRDQGGLG
QRWDOORZ&URVV&RPSODLQDQWVWRIXOILOOWKHLUUROHVDVFRRZQHUVDQG([HFXWLYH&KHIVRUH[HUFLVH
WKHLUULJKWVXQGHUDQ\DJUHHPHQWVHQWHUHGLQWR
&URVV&RPSODLQDQWVMXVWLILDEO\DQGUHDVRQDEO\UHOLHGRQWKH3URPLVHVPDGHE\&URVV'H
IHQGDQWVDQGFRQWLQXHGWRZRUNZLWK&URVV'HIHQGDQWVGLGQRWSURFXUHWKHLURZQKHDOWKLQVXU
DQFHSURYLGHGVHUYLFHVRQDGDLO\EDVLVLQYHVWHG)LIW\7KRXVDQG'ROODUV WRWKH
//&IRUWZRPHPEHUVKLSXQLWVVROLFLWHGIULHQGVDQGLQYHVWRUVWRLQYHVWLQ))*WXUQHGRYHUWKH
DJUHHGLQWHOOHFWXDOSURSHUW\HQWHUHGLQWRUHVWULFWLYHZULWWHQHPSOR\PHQWDJUHHPHQWVZLWKWKH
&RUSRUDWLRQDQGKLUHGFRXQVHOWRZRUNZLWK&URVV'HIHQGDQW/LW]¶VFRXQVHOWRWU\DQGUHDFKDF
FRUGRYHUWKH6KDUHKROGHUV$JUHHPHQWDQGWKH6WRFN3XUFKDVH$JUHHPHQWVKRZHYHU&URVV
/$85$2=<,/0$=$1'6$<$72=<,/0$=),567$0(1'('&5266&203/$,17 &*&
'HIHQGDQW/LW]KDGQRLQWHQWLRQRIVLJQLQJWKH6KDUHKROGHUV$JUHHPHQWRUWKH6WRFN3XUFKDVH
$JUHHPHQWDQGLQVWHDGSURSRVHGWKHLQWHULP028DVDIL[XQWLOKHFRXOGDUUDQJHWRWDNHRYHUWKH
FRPSDQLHVDQGORFN&URVV&RPSODLQDQWVRXWXQGHUWKHVKLHOGRIWKHFRUSRUDWHHQWLW\DQGWKH
//&
)URPDSSUR[LPDWHO\'HFHPEHUWRWKHSUHVHQW&URVV'HIHQGDQWVIDLOHGWRKRQRU
WKHLUSURPLVHVDQGVRXJKWWRXQGHUPLQH&URVV&RPSODLQDQWVUROHVDV([HFXWLYH&KHIV6HFUHWDU\
RIWKH&RUSRUDWLRQDQG9LFH3UHVLGHQWRIWKH&RUSRUDWLRQ
$VDGLUHFWDQGSUR[LPDWHUHVXOWRI&URVV&RPSODLQDQWVUHOLDQFHRQ&URVV'HIHQGDQWV¶
IDOVHSURPLVHVDQGWKHVXEVHTXHQWORFNLQJ&URVV&RPSODLQDQWVRXWRIWKHUHVWDXUDQWGHQ\LQJ
WKHPWKHYHVWLQJRIVWRFNULJKWVRYHUWLPHUHIXVLQJWRZRUNFROODERUDWLYHO\ZLWKWKHPWRDOORZ
IRUVXFFHVVIXOPDQDJHPHQWRIWKHUHVWDXUDQWUHIXVLQJWRDWWHQGPHHWLQJVRUIXOILOOKLVGXWLHVDQG
UHVSRQVLELOLWLHVDVDQRIILFHURIWKH&RUSRUDWLRQ&(2DQG&)2WKUHDWHQLQJDQGEXOO\LQJ&URVV
&RPSODLQDQWVDQGUHWDOLDWLQJDJDLQVWWKHPIRUWKHLUH[HUFLVHRIWKHLUHPSOR\PHQWULJKWVDQGWKHLU
ULJKWVDVRIILFHUVDQGVKDUHKROGHUVRIWKH&RUSRUDWLRQDQGDV0HPEHUVRIWKH//&&URVV&RP
SODLQDQWVZHUHDQGDUHGHSULYHGRIWKHLURZQHUVKLSLQWHUHVWVLQDQDPRXQWWREHHVWDEOLVKHG
&URVV&RPSODLQDQWVUHTXHVWOHDYHRI&RXUWWRDPHQGWKLV&URVV&RPSODLQWWRLQVHUWWKHWUXH
DPRXQWZKHQVDPHLVDVFHUWDLQHG
$VDIXUWKHUDQGGLUHFWSUR[LPDWHUHVXOWRIWKHIDOVHSURPLVHVKHUHLQ&URVV&RPSODLQDQWV
KDYHLQFXUUHGRXWRISRFNHWH[SHQVHVDQGPHGLFDOH[SHQVHVLQDPRXQWVWREHDVFHUWDLQHGDQG
&URVV&RPSODLQDQWVUHTXHVWOHDYHRI&RXUWWRDPHQGWKLV&URVV&RPSODLQWWRLQVHUWWKHWUXH
DPRXQWZKHQVDPHLVDVFHUWDLQHG
,QSHUIRUPLQJWKHDFWVDOOHJHGKHUHLQ&URVV'HIHQGDQWVLQWHQWLRQDOO\PLVUHSUHVHQWHGWR
RUFRQFHDOHGIURP&URVV&RPSODLQDQWVPDWHULDOIDFWVQRWNQRZQWRWKHPEXWZKLFKZHUHNQRZQ
WR&URVV'HIHQGDQWVDQGZKLFKWKH\LQWHQGHG&URVV&RPSODLQDQWVWRUHO\RQDQGZKLFK&URVV
&RPSODLQDQWVGLGUHO\RQ
:KHUHIRUH&URVV&RPSODLQDQWVSUD\IRUUHOLHIDVVHWIRUWKKHUHLQ
6(9(17+&$86($&7,21
)5$8',17+(,1'8&(0(17
/$85$2=<,/0$=$1'6$<$72=<,/0$=),567$0(1'('&5266&203/$,17 &*&
&URVV&RPSODLQDQWVUHDOOHJHDQGLQFRUSRUDWHKHUHLQE\WKLVUHIHUHQFHWKHDOOHJDWLRQVRI
WKHIRUHJRLQJ3DUDJUDSKV
&URVV'HIHQGDQWVDUHFRUSRUDWHRIILFHUVDQGPDQDJHPHQWSDUWQHUVDQGRUWKHDOWHUHJRRI
VDPHZLWKDILGXFLDU\UHODWLRQVKLSWR))*5*,))*DQG1RRVK(PSOR\HHVDQGDGXW\WRIXOO\
UHSUHVHQWWKHHQWLWLHVDQGLQGLYLGXDOVUHSUHVHQWHGWKHUHE\IRUDOORSHUDWLRQDODQGHPSOR\PHQW
PDWWHUV
&URVV&RPSODLQDQWVDOOHJHWKDW&URVV'HIHQGDQW/LW]QDPHGKLPVHOI&(2RIWKHPDQ
DJHPHQWHQWLW\UHOD\LQJWRWKHPWKDWWKLVZDVD³VWDQGDUGSURFHGXUH´DQGRIIHULQJQRRSWLRQRWK
HUZLVH
2QRUDERXW'HFHPEHUDQG-DQXDU\&URVV'HIHQGDQW/LW]DJUHHGZLWK&URVV
&RPSODLQDQWVWKDWLIWKH\VLJQHGDVDJXDUDQWRURQWKH/HDVHIRU1RRVK&URVV&RPSODLQDQWV
ZRXOGVKDUHPDQDJHPHQWGXWLHVDW1RRVK
&URVV&RPSODLQDQWVDUHLQIRUPHGDQGEHOLHYHDQGWKHUHXSRQDOOHJHWKDWDWWKHWLPH
&URVV'HIHQGDQW/LW]PDGHVXFKDQDJUHHPHQWWKHUHSUHVHQWDWLRQWKDW&URVV&RPSODLQDQWV
ZRXOGVKDUHPDQDJHPHQWGXWLHVDW1RRVKZDVIDOVHDQGKHNQRZLQJO\PDGHWKHUHSUHVHQWDWLRQ
UHFNOHVVO\DQGZLWKRXWUHJDUGIRULWVWUXWKRQO\WRLQGXFH&URVV&RPSODLQDQWVWRVLJQDVSHUVRQDO
JXDUDQWRUVRQWKH1RRVKSUHPLVHV/HDVH
2QRUDERXW)HEUXDU\&URVV&RPSODLQDQWVVLJQHGDVJXDUDQWRUVRQWKH1226+
/HDVHEDVHGRQWKHLUUHDVRQDEOHUHOLDQFHXSRQ&URVV'HIHQGDQW/LW]¶VUHSUHVHQWDWLRQDQGDJUHH
PHQWWKDW&URVV&RPSODLQDQWVZRXOGVKDUHPDQDJHPHQWGXWLHVDW1RRVK
&URVV&RPSODLQDQWVDUHLQIRUPHGDQGEHOLHYHWKDW&URVV'HIHQGDQW/LW]LQWHQGHGWKDW
&URVV&RPSODLQDQWVUHO\RQKLVIDOVHUHSUHVHQWDWLRQDQGDJUHHPHQWUHJDUGLQJWKHVKDUHGPDQDJH
PHQWGXWLHVRI&URVV&RPSODLQDQWVDW1RRVKDVDQLQGXFHPHQWIRU&URVV&RPSODLQDQWVWRSHU
VRQDOO\JXDUDQWHHWKH)LOOPRUH6WUHHWOHDVH
2QRUDERXW1RYHPEHU'HIHQGDQWVWHUPLQDWHG&URVV&RPSODLQDQWV¶HPSOR\
PHQWZLWK1RRVKWKHUHE\WHUPLQDWLQJDOORIWKHLUGXWLHVDW1RRVK
$VDSUR[LPDWHUHVXOWRI&URVV'HIHQGDQWV¶EUHDFKRI&URVV&RPSODLQDQWV¶HPSOR\PHQW
/$85$2=<,/0$=$1'6$<$72=<,/0$=),567$0(1'('&5266&203/$,17 &*&
DJUHHPHQWVDVDOOHJHGKHUHLQ&URVV&RPSODLQDQWVUHPDLQOLDEOHIRUJXDUDQWHHLQJPRQWKO\/HDVH
SD\PHQWVIRU1RRVK
&URVV&RPSODLQDQWV¶UHOLDQFHRQ&URVV'HIHQGDQW/LW]¶VDJUHHPHQWDQGUHSUHVHQWDWLRQV
ZDVDVXEVWDQWLDOIDFWRULQFDXVLQJWKHPKDUP
2QRUDERXW'HFHPEHUDQG-DQXDU\DVLVVHWIRUWKLQ3DUDJUDSKVDERYH
&URVV&RPSODLQDQWVH[HFXWHGWKHOHDVHIRU)LOOPRUH6WUHHWDVJXDUDQWRUVEHFDXVHWKH
DJUHHPHQWWROHDVHWKHSUHPLVHVZDVFRQGLWLRQHGXSRQLQWHUDOLD&URVV&RPSODLQDQWVFRQWLQXHG
HPSOR\PHQWDQGVKDUHGPDQDJHPHQWRI1RRVK7KHODQGORUGDGYLVHG&URVV&RPSODLQDQWVDQG
&URVV'HIHQGDQW/LW]WKDWKHUHTXLUHG&URVV&RPSODLQDQWVWKHH[HFXWLYHFKHIVIRUWKHUHVWDX
UDQWDVJXDUDQWRUVEHFDXVHKHEHOLHYHGWKDWE\ELQGLQJWKHPWRSHUVRQDOO\JXDUDQWHHDPLQLPXP
RIWHQ\HDUVRIOHDVHSD\PHQWVWKH\ZRXOGEHWLHGWRWKHUHVWDXUDQWDQGZRXOGVWULYHWRHQVXUHLWV
VXFFHVV
2QRUDERXW1RYHPEHULQYLRODWLRQRI'HIHQGDQWV¶DJUHHPHQWVZLWK&URVV
&RPSODLQDQWV'HIHQGDQWVWHUPLQDWHG&URVV&RPSODLQDQWV¶HPSOR\PHQWZLWK1RRVKORFNHG
WKHPRXWSUHYHQWHGWKHLUHQWU\WRWKHSUHPLVHVWHUPLQDWHGDOORIWKHLUGXWLHVDW1RRVKDQGUH
IXVHGWKHPHQWU\WRREWDLQWKHLUSHUVRQDOSURSHUW\
&URVV&RPSODLQDQWVKDYHGHPDQGHGWKDW'HIHQGDQWVUHOHDVH&URVV&RPSODLQDQWVDV
JXDUDQWRUVRQWKH1RRVK/HDVHDQGRUDVVLJQUHSODFHPHQWJXDUDQWRUVRQWKH/HDVH'HVSLWH'H
IHQGDQW¶VWHUPLQDWLRQRI&URVV&RPSODLQDQWV¶HPSOR\PHQW'HIHQGDQWVKDYHUHIXVHGDQGFRQ
WLQXHWRUHIXVHWRUHOHDVH&URVV&RPSODLQDQWVDVJXDUDQWRUVRQWKH/HDVHDQGRUWRDVVLJQUH
SODFHPHQWJXDUDQWRUV
&URVV&RPSODLQDQWVKDYHDOVREHHQKDUPHGEHFDXVH&URVV'HIHQGDQWVIDLOHGWRSURYLGH
FRPSOHWHDQGDFFXUDWHLQIRUPDWLRQDVWRWKHJXDUDQW\DQGRWKHUOHJDOPDWWHUVLQGHILQLQJ&URVV
&RPSODLQDQWV¶UROHLQ1RRVKDQGWKHVHFXULW\RIWKHLUHPSOR\PHQWDQGKDGWKH\XQGHUVWRRGWKDW
&URVV'HIHQGDQW/LW]XQGHUVWRRGWKDWKHFRXOGWHUPLQDWHWKHPDWKLVVROHGLVFUHWLRQWKH\ZRXOG
QRWKDYHSHUVRQDOO\JXDUDQWHHGWKHOHDVHIRU)LOOPRUH6WUHHW
&URVV'HIHQGDQWVSXUSRUWHGWRDFWRQ&URVV&RPSODLQDQWVEHKDOIIRUSXUSRVHVRI
/$85$2=<,/0$=$1'6$<$72=<,/0$=),567$0(1'('&5266&203/$,17 &*&
IRUPDOL]LQJWKHOHJDOVWUXFWXUHOLFHQVLQJDQGRSHUDWLRQRI))*5*,DQG))*&URVV'HIHQGDQWV
PLVOHG&URVV&RPSODLQDQWVE\IDLOLQJWRGLVFORVHWKHDFWXDOFRQGLWLRQVDQGEDVLVIRULQIRUPDWLRQ
UHODWLQJWRWKHUHIHUHQFHGGXWLHVDQGDFWLRQVDWWLPHVSURYLGLQJLQIRUPDWLRQWKDWZDVLQDFFXUDWH
PLVOHDGLQJRULQFRPSOHWH
$VDSUR[LPDWHUHVXOWRI'HIHQGDQWV¶EUHDFKRIWKHJXDUDQWRUDJUHHPHQWDQGPLVOHDGLQJ
DFWLRQVKDUPIXOWR&URVV&RPSODLQDQWVZKRDUHDWULVNE\UHPDLQLQJOLDEOHIRUFRQWLQXHGWLPHO\
SD\PHQWRIWKH/HDVHDQGIURPSRWHQWLDOOLDELOLWLHVDULVLQJIURP&URVV&RPSODLQDQWV¶IDLOXUHWR
GRVRHYHQWKRXJKWKH\KDYHEHHQGHSULYHGRIHPSOR\PHQWE\&URVV'HIHQGDQWVDQGGHVSLWH
&URVV'HIHQGDQWVDWWHPSWVWRGHVWUR\&URVV&RPSODLQDQWVUHSXWDWLRQV
:KHUHIRUH&URVV&RPSODLQDQWVSUD\IRUUHOLHIDVVHWIRUWKKHUHLQ
(,*+7+&$86(2)$&7,21
%5($&+2):5,77(1(03/2<0(17$*5((0(176
&URVV&RPSODLQDQWVUHDOOHJHDQGLQFRUSRUDWHKHUHLQE\WKLVUHIHUHQFHWKHDOOHJDWLRQVRI
WKHIRUHJRLQJ3DUDJUDSKV
&URVV&RPSODLQDQWVDQG&URVV'HIHQGDQWVHQWHUHGLQWRZULWWHQHPSOR\PHQWDJUHHPHQWV
DQGD0HPRUDQGXPRI8QGHUVWDQGLQJDIILUPLQJWKH(PSOR\PHQW$JUHHPHQWVZLWK))*5*,
&URVV&RPSODLQDQWVSHUIRUPHGDOORUVXEVWDQWLDOO\DOORIWKHLUGXWLHVDQGREOLJDWLRQVSXU
VXDQWWRWKH(PSOR\PHQW$JUHHPHQWVZLWK&URVV'HIHQGDQWV
2QRUDERXW1RYHPEHU&URVV'HIHQGDQWVZURQJIXOO\WHUPLQDWHGHDFKRI
&URVV&RPSODLQDQWV¶(PSOR\PHQW$JUHHPHQWZLWKRXWJRRGFDXVHGHQLHGWKHPHQWU\WRWKH
SUHPLVHVZLWKKHOGWKHLUSHUVRQDOSURSHUW\DQGGHQLHGEHQHILWVDFFUX