The Workings of Kamma(2nd Rev)

8/3/2019 The Workings of Kamma(2nd Rev)

1/416


2/416

7KH3D$XN7DZ\D6D\DGDZ

7KH:RUNLQJVRI.DPPD

6HFRQG5HYLVHG(GLWLRQ


3/416


4/416

7KH3D$XN7DZ\D6D\DGDZ

$ * , ) 7 1 2 7 ) 2 5 6 $ / (

7KH:RUNLQJVRI.DPPD

6HFRQG5HYLVHG(GLWLRQ


5/416

7KLVERRNLVSXEOLVKHGDVDJLIWLQWKHSXEOLFGRPDLQDQGFDQQRWEHFRS\ULJKWHG

7KHPDWHULDOLQWKLVERRNPD\EHUHSURGXFHGZLWKRXWWKHDXWKRUVSHUPLVVLRQ,WLVUHFRPPHQGHGKRZHYHUWKDWXQDXWKRUL]HGFKDQJHVDQGRWKHUPLVUHSUHVHQWDWLRQRIWKH0RVW9HQHUDEOH3D$XN7DZ\D6D\DGDZVWHDFKLQJVEHDYRLGHG

,WLVIXUWKHUUHFRPPHQGHGWKDWEHIRUHSXEOLVKLQJDQHZHGLWLRQRQHFRQWDFW3D$XN7DZ\D0HGLWDWLRQ&HQWUHLQ0\DQPDUDQGLQTXLUHZKHWKHUWKHUHLVDODWHUWH[WWRWKHERRNW\SLQJRURWKHUHUURUVPD\KDYHEHHQFRUUHFWHGDGGLWLRQDOLQIRUPDWLRQPD\KDYHEHHQDGGHGHWF

,WLVDOVRWKHDXWKRUVH[SUHVVZLVKWKDWWKHUHVKRXOGQRWEHKLVSKRWRJUDSKRUELRJUDSK\+HVD\V7KHUHLVRQO\WKH'KDPPD3OHDVHUHVSHFWKLVZLVK

$Q\LQTXLULHVUHJDUGLQJWKLVERRNPD\SOHDVHEHDGGUHVVHGWRWKHDXWKRU

7LWOH7KH:RUNLQJVRI.DPPDZRUNLQJVWKHIDFWRUPDQQHURIIXQFWLRQLQJRURSHUDWLQJWKHaVRIKLVPLQG!3HQJXLQ+XWFKLQVRQ5HIHUHQFH/LEUDU\+HOLFRQ3XEOLVKLQJDQG3HQJXLQ%RRNV/WGaVRIVWKWKHSURFHVVHVLQYROYHGLQWKHZD\DPDFKLQHDQRUJDQL]DWLRQDSDUWRIWKHERG\HWFRSHUDWHVWKHZRUNLQJVRIWKHKXPDQPLQG2[IRUG

$GYDQFHG/HDUQHUV'LFWLRQDU\RI&XUUHQW(QJOLVK$6+RUQE\WK(GLWLRQ2[IRUG8QLYHUVLW\3UHVV2[IRUG

(QODUJHG(GLWLRQ

)RUWKRVHZKRKDYHGLIILFXOWLHVUHDGLQJWH[WLQWKHVWDQGDUGIRQWVL]HDOLPLWHGHGLWLRQHQODUJHGWR$ZLOODOVREHSXEOLVKHG3OHDVHFRQWDFW 3D$XN0HGLWDWLRQ&HQWUH6LQJDSRUH 7HO)D[ (PDLOSDDXNPF#\DKRRFRPVJ

&RYHU,OOXVWUDWLRQ

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

7KH0RVW9HQHUDEOH3D$XN6D\DGDZKDVDGRSWHG$VRNDVIRXUURDULQJOLRQVDVDV\PEROIRU3D$XN7DZ\D0RQDVWHU\$QGUHFHQWO\KHUHFHLYHGQHZVIURP6UL/DQNDWKDWWKHRULJLQDOIRXUOLRQVLQIDFWFDUULHGD'KDPPDZKHHORQWKHLUEDFNVZKLFKKDGEURNHQRIIWKH3D$XNV\PEROZDVFKDQJHGDFFRUGLQJO\

$ * , ) 7 1 2 7 ) 2 5 6 $ / (


6/416

&RQWHQWV

SDJH

7DEOHV Y&RQWHQWVLQ'HWDLO YLL

, 7KH&ORJ%RXQG6XWWD

,,7KH6HFRQG&ORJ%RXQG6XWWD

,,,7KH:RUNLQJVRI.DPPD

7KH%XGGKDV.QRZOHGJHRI.DPPD5HVXOW

'HILQLWLRQRI.DPPD

8QZKROHVRPHDQG:KROHVRPH.DPPD

7KH&RXUVHVRI.DPPD

.QRZOHGJHDQG&RQGXFW

7KH7ZHOYH&DWHJRULHVRI.DPPD

7LPHRI(IIHFW

2UGHURI(IIHFW

)XQFWLRQRI(IIHFW

7KH3ULQFLSOHRI,GHQWLW\

7KH:RUNLQJVRI$FKLHYHPHQWDQG)DLOXUH

,97KH6PDOO.DPPD$QDO\VLV6XWWD

9 &UHDWLQJD+XPDQ%HLQJ

9, 7KH8QZRUNLQJRI.DPPD

$SSHQGL[7KH)RUW\0HGLWDWLRQ6XEMHFWV $SSHQGL[7KH/LQHDJHRI%XGGKDV

(GLWRUV1RWH6HFRQG5HYLVHG(GLWLRQ (GLWRUV1RWH)LUVW(GLWLRQ %LEOLRJUDSKLFDO$EEUHYLDWLRQV 6RXUFH5HIHUHQFHV ,QGH[


7/416

YL 7 K H : R U N L Q J V R I . D P P D

7DEOHV

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

0$7(5,$/,7


8/416


9/416

YLLL 7 K H : R U N L Q J V R I . D P P D

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

7KHLU5RRWV5HVXOWDQW5HELUWK/LQNLQJ 7DEOHE7KH:KROHVRPH5HVXOWDQW8QURRWHG&RQVFLRXVQHVV

7DEOHF7KH5RRWHG6HQVXDO6SKHUH5HVXOWDQW&RQVFLRXVQHVV 7+(0(5,7:25.%$6(6 2IIHULQJ 7KH:RUNLQJVRI2IIHULQJ .QRZOHGJH'LVVRFLDWHG 7DEOHD0HQWDO3KHQRPHQDRI.QRZOHGJH'LVVRFLDWHG&RQVFLRXVQHVV .QRZOHGJH$VVRFLDWHG 7DEOHE0HQWDO3KHQRPHQDRI.QRZOHGJH$VVRFLDWHG&RQVFLRXVQHVV 7KH,QIHULRU2IIHULQJ 7KH6XSHULRU2IIHULQJ 0RUDOLW\ 7KH)LYH3UHFHSWV 7KH(LJKW3UHFHSWV 7KH7HQ3UHFHSWV

7KH%KLNNKXV0RUDOLW\ 7KH:RUNLQJVRI0RUDOLW\7UDLQLQJ .QRZOHGJH'LVVRFLDWHG

.QRZOHGJH$VVRFLDWHG ,QIHULRU0RUDOLW\ 6XSHULRU0RUDOLW\ 0HGLWDWLRQ 6DPDWKD0HGLWDWLRQ 7KH)RXUIROGDQG)LYHIROG-KQDV 7DEOHF0HQWDO3KHQRPHQDRI([DOWHG&RQVFLRXVQHVV 7KH:RUNLQJVRI6DPDWKD0HGLWDWLRQ ,QIHULRU6DPDWKD0HGLWDWLRQ 6XSHULRU6DPDWKD0HGLWDWLRQ 7KH/LJKWRI:LVGRP ,QVLJKW0HGLWDWLRQ 7KH7KUHH&KDUDFWHULVWLFV 7KH7ZR3UHSDUDWRU\,QVLJKW.QRZOHGJHV 7KH2EMHFWVIRU,QVLJKW 7KH)LYH&OLQJLQJ$JJUHJDWHV


10/416

& R Q W H Q W V L Q ' H W D L O L[

8OWLPDWH0DWHULDOLW\ 7KH)RXU*UHDW(VVHQWLDOV

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

,QIHULRU,QVLJKW0HGLWDWLRQ 6XSHULRU,QVLJKW0HGLWDWLRQ :KROHVRPH5HVXOWDQWV :KROHVRPH.DPPDDQG,JQRUDQFH&UDYLQJ 7+(&2856(62).$00$ 7+(7(181:+2/(620(&2856(62).$00$ 7KH7KUHH8QZKROHVRPH%RGLO\.DPPDV 7R%HD.LOOHU 7R%HD7KLHI 7R%H2QH:KR(QJDJHVLQ6H[XDO0LVFRQGXFW 7KH)RXU8QZKROHVRPH9HUEDO.DPPDV 7R%HD/LDU 7R%HD6ODQGHUHU 7R%HD6SHDNHURI+DUVKQHVV

7R%HD3UDWWOHU 7KH7KUHH8QZKROHVRPH0HQWDO.DPPDV 7R%H&RYHWRXV 7R+DUERXU,OO:LOO 7R+ROG:URQJ9LHZ 7KH5HVXOWVRI8QZKROHVRPH.DPPD 7KH5HVXOWVRI8QZKROHVRPH%RGLO\.DPPD 7KH5HVXOWVRI8QZKROHVRPH9HUEDO.DPPD 7KH5HVXOWVRI8QZKROHVRPH0HQWDO.DPPD 7KH7ULYLDO5HVXOWVRI8QZKROHVRPH.DPPD $&RXUVHRI8QZKROHVRPH.DPPD 7+(7(1:+2/(620(&2856(62).$00$ 7KH7KUHH:KROHVRPH%RGLO\.DPPDV 7R%H.LQGDQG&RPSDVVLRQDWH 1RWWR%HD7KLHI 1RWWR%H2QH:KR(QJDJHVLQ6H[XDO0LVFRQGXFW 7KH)RXU:KROHVRPH9HUEDO.DPPDV 1RWWR%HD/LDU 1RWWR%HD6ODQGHUHU


11/416

[ 7 K H : R U N L Q J V R I . D P P D

1RWWR%HD6SHDNHURI+DUVK6SHHFK 1RWWR%HD3UDWWOHU 7KH7KUHH:KROHVRPH0HQWDO.DPPDV 1RWWR%H&RYHWRXV 1RWWR+DUERXU,OO:LOO 7R+ROG5LJKW9LHZ 7KH5HVXOWVRI:KROHVRPH.DPPD 7KH5HVXOWVRI:KROHVRPH%RGLO\.DPPD 7KH5HVXOWVRI:KROHVRPH9HUEDO.DPPD 7KH5HVXOWVRI:KROHVRPH0HQWDO.DPPD &RQFOXVLRQ .12:/('*($1'&21'8&7 &RQGXFW .QRZOHGJH 7KH5HVXOWV ,QVXIILFLHQW.QRZOHGJH .LQJ3DVHQDGL 7KH%KLNNKX6WL 6DFFDNDWKH3KLORVRSKHU ,QVXIILFLHQW&RQGXFW 0DKGKDQD/RUG6RQ .LQJ$MWDVDWWX %RUQLQDQ8QVXLWDEOH3ODFH

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


12/416

& R Q W H Q W V L Q ' H W D L O [L

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

8QZKROHVRPH1HDU'HDWK.DPPD 4XHHQ0DOOLN :KROHVRPH1HDU'HDWK.DPPD 7DPEDGKLNDWKH([HFXWLRQHU 7KH0LQGDW'HDWK

$FFRPSOLVKHG.DPPD )81&7,212)())(&7 3URGXFWLYH.DPPD 7KH&RPIRUWDEOH(OHSKDQW 5LFKWKURXJK:URQJ/LYHOLKRRG 7KH.DDPXQGD'HY 5HLQIRUFLQJ.DPPD )UXVWUDWLQJ.DPPD .LQJ%LPELVUD

%KLNNKXV5HERUQDV+HDYHQO\0XVLFLDQV .LQJ$MWDVDWWX 7KH6ODYH:RPDQ.KXMMXWWDU .DPPD)UXVWUDWHVLQWKH&RXUVHRI/LIH &HUWDLQ.DPPDV)UXVWUDWHDQG2WKHUV5HLQIRUFH 4XHHQ0DOOLN ,QWHUFHSWLYH.DPPD 6SRLOW'HYDV .LQJ$MWDVDWWX 7KH9HQHUDEOH'HYDGDWWD %KL\D'UXFUL\D 7KH9HQHUDEOH$JXOLPOD 7KH+XQWHU6XQDNKDYMLND ,QWHUFHSWV1R5HVXOW)RUELGV 7KH9HQHUDEOH0DKPRJJDOOQD 7KH9HQHUDEOH&DNNKXSOD ,QWHUFHSWV1R5HVXOW$OORZV 4XHHQ6PYDW 7KH)LYH+XQGUHG%KLNNKXV


13/416

[LL 7 K H : R U N L Q J V R I . D P P D

,QWHUFHSWV2ZQ5HVXOW 0UD'V .LQJ.DOEX 7+(35,1&,3/(2),'(17,7


14/416

& R Q W H Q W V L Q ' H W D L O [LLL

7KH9HQHUDEOH9DWWDEEDND1LJURGKD 0HDQV$FKLHYHPHQW(QDEOHV:KROHVRPH.DPPDV 7KH9HQHUDEOH&DVXGKDPPD 7KH,QQRFHQW0LQLVWHU (QGQRWHV&KDSWHU,,,VXWWDUHIHUHQFHVHWF

,97+(60$//.$00$$1$/


15/416

[LY 7 K H : R U N L Q J V R I . D P P D

&RQFOXVLRQ

9,7+(81:25.,1*2).$00$

,V0DWHULDOLW\3HUPDQHQWRU,PSHUPDQHQW" ,PSHUPDQHQFH 6XIIHULQJ1RQ6HOI &OLQJLQJWR6XIIHULQJ 7KHUHIRUH%KLNNKXV$Q\:KDWVRHYHU0DWHULDOLW\

0DWHULDOLW\

0DWHULDOLW\3DVW)XWXUHRU3UHVHQW 0DWHULDOLW\,QWHUQDORU([WHUQDO 0DWHULDOLW\*URVVRU6XEWOH 0DWHULDOLW\,QIHULRURU6XSHULRU 0DWHULDOLW\)DURU1HDU )HHOLQJV )HHOLQJV3DVW)XWXUHRU3UHVHQW )HHOLQJV,QWHUQDORU([WHUQDO )HHOLQJV*URVVRU6XEWOH )HHOLQJV,QIHULRURU6XSHULRU )HHOLQJV)DURU1HDU 7KH&RPSUHKHQVLRQ.QRZOHGJH 7KH$ULVH3HULVK.QRZOHGJH

7KH'LVVROXWLRQ&RQWHPSODWLRQ.QRZOHGJH 7KXV6HHLQJ%KLNNKXV 7KH(GXFDWHG1REOH'LVFLSOHLV'LVHQFKDQWHG 7KH'DQJHURIWKH:RUNLQJVRI.DPPD (TXDQLPLW\7RZDUGVWKH)LYH$JJUHJDWHV 7KH)RXU3HUYHUVLRQV &RQWHPSODWLQJ9RLGQHVV 7KH)LYH9RLGQHVV6LPLOHV 9RLGRI6HOIDQG$Q\WKLQJ%HORQJLQJWR6HOI /HW2QH/RRNRQWKH:RUOGDV9RLG0RJKDUMDK 'LYRUFHIURPWKH)LYH$JJUHJDWHV +LV0LQG5HWUHDWV5HWUDFWVDQG5HFRLOV 6HHLQJ1LEEQDDV3HDFHIXO 3DWKDQG)UXLWLRQ

7DEOHG0HQWDO3KHQRPHQDRI6XSUDPXQGDQH&RQVFLRXVQHVV 7KH)RXU3DWK.QRZOHGJHV 6WUHDP(QWU\ 2QFH5HWXUQ 1RQ5HWXUQ $UDKDQW 7KH8QZRUNLQJRI.DPPD 7DEOHH7KH3DWK3URFHVV

7DEOHH7KH5HYLHZLQJ.QRZOHGJHV 7DEOHH6XSUDPXQGDQH5HVXOWDQW&RQVFLRXVQHVV 'RQH,V:KDW1HHGVWR%H'RQH 7KH7ZR7\SHVRI3DULQLEEQD &RQVFLRXVQHVV(VWDEOLVKHGDQG8QHVWDEOLVKHG

&RQVFLRXVQHVV(VWDEOLVKHG

%LUWK )LYH)RXUDQG6LQJOH&RQVWLWXHQW([LVWHQFH 7KH6WUHDPRI&RQVFLRXVQHVV &RQVFLRXVQHVV8QHVWDEOLVKHG


16/416

& R Q W H Q W V L Q ' H W D L O [Y

7DEOHH'HSHQGHQW2ULJLQDWLRQIURP/LIHWR/LIH 1R(VWDEOLVKPHQWLQ1LEEQD 7KLQJV,PSRVVLEOHIRU&RQVFLRXVQHVVWR'R :KHUH'RHVWKH$UDKDQW*R" &RQFOXVLRQ -XVW$V%KLNNKXVD/RWXV%OXH5HGRU:KLWH (QGQRWHV&KDSWHU9,VXWWDUHIHUHQFHVHWF

$SSHQGL[7KH)RUW\0HGLWDWLRQ6XEMHFWV $SSHQGL[7KH/LQHDJHRI%XGGKDV

(GLWRUV1RWH6HFRQG5HYLVHG(GLWLRQ (GLWRUV1RWH)LUVW(GLWLRQ

3DOL6SHOOLQJ 'LDFULWLFVDQG,QIOHFWLRQ 3DOL&RPSRXQGV 5HIHUHQFHWR7KH%XGGKDHWF 7UDQVODWLRQV

,QGLYLGXDO:RUGVDQG3KUDVHV %HHU:LQH/LTXRUVXUPHUD\DPDMMD &RQVFLHQFHKLUL 'HSHQGHQW2ULJLQDWLRQDQG%HFDXVHRI,JQRUDQFHHWF )DLWKVDGGK .DPPLF3RWHQF\NDPPDVDWWL 0DWHULDOLW\USD 0HQWDOLW\QPD 3RVVHVVLYHQHVVPDFFKDUL\D 6KDPHRWWDSSD 6\PSDWKHWLF-R\PXGLW (QGQRWHV(GLWRUV1RWH


17/416


18/416

1$027$66$

%+$*$9$72

$5$+$72

6$00

6$0%8''+$66$

+20$*(72+,0

7+((;$/7('21(

7+(:257+


19/416


20/416

,7+(&/2* %281'6877$*DGGXOD%DGGKD6XWWD

,QWKHFRXUVHRIRXU'KDPPDWDONVZHVKDOOGLVFXVVWZRPDLQVXWWDV2QHLVFDOOHG*DGGXOD%DGGKD6XWWD7KH&ORJ%RXQG6XWWDWKHRWKHULVFDOOHG'XWL\D*DGGXOD%DGGKD6XWWD7KH6HFRQG&ORJ%RXQG6XWWDWKDWLVWZR*DGGXOD%DGGKDVXWWDV:HVKDOOEHJLQZLWKWKHILUVWRQH

,1&21&(,9$%/(,67+(%(*,11,1*%+,..+86

7KXV,KHDUG

2QHWLPHWKH([DOWHG2QHZDVGZHOOLQJLQ6YDWWKLLQ-HWDV*URYH$QWKDSLLNDVPRQDVWHU\7KHUHWKH([DOWHG2QHDGGUHVVHGWKHEKLNNKXV

,QFRQFHLYDEOHLVWKHEHJLQQLQJEKLNNKXVRIWKHURXQGRIUHELUWKVDVUD$ILUVWSRLQWLVQRWNQRZQRILJQRUDQFHKLQGHUHGEHLQJVDYLMMQYDUDQDVDWWQDIHWWHUHGE\FUDYLQJWDKVD\RMDQQDUXVKLQJRQVDQGKYDWDDQGUXQQLQJDERXWVDVDUDWD

+HUH7KH%XGGKDGLVFXVVHVWKHURXQGRIUHELUWKVDVUDWKHUXVKLQJRQIURPRQHZRUOGWRDQRWKHUQRZDKXPDQEHLQJWKHQDGHYDWKHQDQDQLPDOWKHQDJDLQDKXPDQEHLQJHWFDQGWKHUXQQLQJDERXWZLWKLQRQHZRUOGDJDLQDQGDJDLQDKXPDQEHLQJRUDJDLQDQGDJDLQDGHYDHWF7KH%XGGKDPHQWLRQVWKHWZRPDLQFDXVHVIRUWKLVRQJRLQJSURFHVVLJQRUDQFHDYLMMDQGFUDYLQJWDK

,JQRUDQFHDQGFUDYLQJDUHQHFHVVDU\IRUDFWLRQVWRSRVVHVVNDPPLFSRWHQF\7KHNDPPLFSRWHQF\NDPPDVDWWLLVWKHSRWHQF\E\ZKLFKYROLWLRQDODFWLRQWKURXJK

ERG\VSHHFKRUPLQGLVDEOHWRSURGXFHDNDPPDUHVXOWNDPPDYLSND7KLVSRWHQF\LVDOVRFDOOHGRWKHUPRPHQWNDPPDQQNNKDLNDNDPPDEHFDXVHZHSURGXFHWKHNDPPDDWRQHSDUWLFXODUFRQVFLRXVQHVVPRPHQWDQGLIWKHNDPPDPDWXUHVWKHNDPPLFSRWHQF\SURGXFHVWKHUHVXOWDWDQRWKHUPRPHQWHLWKHULQWKLVOLIHRUDIXWXUHOLIH%XWZLWKRXWLJQRUDQFHDQGFUDYLQJDFWLRQGRHVQRWSRVVHVVNDPPLFSRWHQF\

5HIHUHQFHQXPEHUVLQLWDOLFVUHIHUWRVXWWDTXRWDWLRQVHWFLQHQGQRWHVEHJLQQLQJS6,,,,[DQG6,,,,[*DGGXODFORJEDGGKDERXQGSSRIEDQGKDWLWRELQGFORJERXQG,Q(QJOLVKDFORJLVDEORFNRIZRRGWKDWVHUYHVWRLPSHGHWKHPRWLRQRIDKRUVHGRJHWF+HUHLWLVDFXELWORQJEORFNRIKDUGZRRGWKDWKDQJVE\DVWUDSIURPDGRJVQHFNWRSUHYHQWLWIURPUXQQLQJ7KHVWLFNLVDWWDFKHGE\WKHPLGGOHVRLWKDQJVKRUL

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


21/416

7 K H : R U N L Q J V R I . D P P D

:KDWLVLJQRUDQFHDYLMM",WLVH[SODLQHGLQWKH9LVXGGKL0DJJD

$PRQJVWWKHXOWLPDWHO\QRQH[LVWHQW SDUDPDWWKDWRDYLMMDPQHVXDPRQJVWZRPHQPHQLW>LJQRUDQFH@KXUULHVRQDPRQJVWWKHH[LVWHQW YLMMDPQHVXKRZHYHUDPRQJVWWKHDJJUHJDWHVHWFLWGRHVQRWKXUU\RQ

:KDWGRHVWKLVPHDQ",WPHDQVWKDWLJQRUDQFHVHHVRQO\FRQYHQWLRQDOWUXWKVDPPXWLVDFFDZRPHQDQGPHQPRWKHUVDQGIDWKHUVZLYHVDQGKXVEDQGVGDXJKWHUVDQGVRQVGRJVFDWVSLJVDQGFKLFNHQVHWF,WLVZURQJWRVHHLQWKLVZD\EHFDXVHWKHVHWKLQJVGRQRWH[LVWDFFRUGLQJWRUHDOLW\\DWKEKWD7KHWKLQJV

WKDWGRH[LVWDFFRUGLQJWRUHDOLW\KRZHYHUDUHWKHDJJUHJDWHVNKDQGKDWKHHOHPHQWVGKWXWKHEDVHV\DWDQDPHQWDOLW\PDWHULDOLW\QPDUSDGHSHQGHQWRULJLQDWLRQSDLFFDVDPXSSGDWKHZRUNLQJVRINDPPDWKHWKUHHFKDUDFWHULVWLFVWLODNNKDDHWFLQEULHIWKH)RXU1REOH7UXWKV 7KHVHWKLQJVZKLFKDUHXOWLPDWHWUXWK SDUDPDWWKDVDFFDLJQRUDQFHGRHVQRWVHH7KDWLVZK\LIZHWKLQN7KLVLVDZRPDQDPDQPRWKHUIDWKHUGDXJKWHUVRQHWFLWLVWKHSHUFHSWLRQRIDEHLQJ VDWWDVDxxDPDQLIHVWDWLRQRILJQRUDQFHDYLMM$QGWKDWLJQRUDQFHLVDFDXVHRINDPPDDUHDVRQZK\EHLQJVUXQRQIURPOLIHWROLIHIURPVXIIHULQJWRVXIIHULQJ

,JQRUDQFHLVWRWKLQNWKHUHDUHPHQZRPHQIDWKHUVPRWKHUVVRQVGDXJKWHUVHWF,WLVZURQJWRWKLQNLQWKLVZD\EHFDXVHWKHUHDUHLQIDFWQRPHQZRPHQHWFWKHUHLVRQO\XOWLPDWHPDWHULDOLW\DQGPHQWDOLW\

7RH[DPLQHPDWHULDOLW\ZHQHHGWRSUDFWLVHPDWHULDOLW\PHGLWDWLRQUSDNDPPDKQDWKDWLVIRXUHOHPHQWVGHILQLWLRQPHGLWDWLRQFDWXGKWXYDYDWWKQDNDPPDKQD7KHQGRZHVHHVPDOOSDUWLFOHVFOXVWHUVRIPDWHULDOLW\USDNDOSD,IZHDQDO\VH

9V0[YLL3Dxx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


22/416

, 7 K H & O R J % R X Q G 6 X W W D

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

:KHQWKHUHLVVXFKLJQRUDQFHFUDYLQJIRUWKRVHQRQH[LVWHQWREMHFWVPD\DULVH$QGZKHQRXUDFWLRQVRIERG\VSHHFKDQGPLQGDUHDVVRFLDWHGZLWKVXFKLJQRUDQFHDQGFUDYLQJRXUDFWLRQVSRVVHVVNDPPLFSRWHQF\NDPPD,IWKDWNDPPDPDWXUHVLWSURGXFHVDJRRGRUEDGUHVXOWDQGZHFRQWLQXHUXVKLQJRQDQGUXQQLQJDERXWLQWKHURXQGRIUHELUWK7KDWLVZK\LQWKLVVXWWD7KH%XGGKDVD\V

,QFRQFHLYDEOHLVWKHEHJLQQLQJEKLNNKXVRIWKHURXQGRIUHELUWK$ILUVWSRLQWLVQRW

NQRZQRILJQRUDQFHKLQGHUHGEHLQJVIHWWHUHGE\FUDYLQJUXVKLQJRQDQGUXQQLQJDERXW

7KHQ7KH%XGGKDH[SODLQVKRZLQWKHIXWXUHWKHZRUOGV\VWHPZLOOFRPHWRDQHQG

7+(5(:,//&20($7,0(%+,..+86

)LUVWWKHJUHDWRFHDQGULHVXS

7KHUHZLOOFRPHDWLPHEKLNNKXVZKHQWKHJUHDWRFHDQGULHVXSHYDSRUDWHVDQGLV

QRPRUH

,QWKHGLVWDQWIXWXUHWKHZRUOGZLOOEHGHVWUR\HGLQRQHRIWKUHHZD\VGHVWUR\HGE\ILUHE\ZDWHURUE\ZLQG+HUH7KH%XGGKDGHVFULEHVZKDWKDSSHQVZKHQWKHZRUOGLVGHVWUR\HGE\ILUH

)LUVWRIDOODKXQGUHGWKRXVDQG\HDUVEHIRUHKDQGFHUWDLQVN\GHYDVZLOODSSHDUEHIRUHSHRSOHZLWKGLVKHYHOOHGKDLUDQGSLWLIXOIDFHVZLSLQJWKHLUWHDUVZLWKWKHLUKDQGV7KH\ZLOODQQRXQFHWKHHQGRIWKHZRUOGDQGXUJHSHRSOHWRGHYHORSWKHIRXUGLYLQHDELGLQJVFDWWUREUDKPDYLKUORYLQJNLQGQHVVPHWWFRPSDVVLRQ

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fD.DWK'LVFXVVLRQRIWKH3DVW$ERGHV5HFROOHFWLRQ.QRZOHGJH33[LLL6RPHWHDFKHUVVD\WKHGHYDVVHHPDQ\VLJQVQLPLWWDZKLFKWHOOWKHPRIWKHGHVWUXFWLRQRIWKHZRUOGV\VWHP2WKHUWHDFKHUVVD\%UDKPDVRIWKHSXUHDERGHVVXGGKYVDWKH%UDKPDZRUOGSODQHZKHUH1RQ5HWXUQHUVVSHQGWKHLUODVWOLIHZKRSRVVHVVVXSHULRUSV\FKLFSRZHUVWKDWHQDEOHWKHPWRORRNIDULQWRWKHIXWXUHVHHWKHIXWXUHGHVWUXFWLRQRIWKHZRUOGV\VWHPDQGDVNWKHGHYDVWRLQIRUPPDQNLQG9V0


23/416


NDUXV\PSDWKHWLFMR\PXGLWDQGHTXDQLPLW\XSHNNKXSWRMKQD$QGWKH\ZLOODGYLVHSHRSOHWRORRNDIWHUWKHLUSDUHQWVDQGWRKRQRXUWKHLUHOGHUV

0RVWSHRSOHZLOOWDNHWKHVHZRUGVWRKHDUWDQGSUDFWLVHORYLQJNLQGQHVVWRZDUGVHDFKRWKHUDQGLQRWKHUZD\VDFFRPSOLVKZKROHVRPHNDPPD7KRVHZKRDUHDEOHZLOOGHYHORSMKQD7KRVHZKRDUHXQDEOHWRGHYHORSMKQDZLOOEHFDXVHRIWKHLUSDVWZKROHVRPHNDPPDEHUHERUQLQWKHGHYDZRUOGDVGHYDVWKH\ZLOOGHYHORSMKQD'HSHQGHQWRQLJQRUDQFHDQGFUDYLQJWKHNDPPLFSRWHQF\NDPPDVDWWLRIWKHLUMKQDFDXVHVDOOWKHVHEHLQJVWREHUHERUQLQWKH%UDKPDZRUOG

$IWHUDORQJSHULRGDJUHDWFORXGDSSHDUVDQGKHDY\UDLQIDOOVWKURXJKRXWWKHKXQGUHGWKRXVDQGPLOOLRQZRUOGVSKHUHVNRLVDWDVDKDVVDFDNNDYD3HRSOHVRZFURSVEXWZKHQWKHFURSVKDYHJURZQKLJKHQRXJKIRUDQR[WRJUD]HWKHUDLQVWRSV:LWKQRPRUHUDLQDOOSODQWVGU\XSDQGDUHQRPRUHDQGWKHUHLVVRRQIDPLQH+XPDQEHLQJVGLHDQGVRGRHDUWKGHYDVEKXPPDGHYIRUWKH\OLYHRQIORZHUVDQGIUXLWV2ZLQJWRWKHLUSDVWZKROHVRPHNDPPDWKH\DUHUHERUQLQWKHGHYDZRUOGDQGDVGHYDVWKH\GHYHORSNDVLDMKQD$JDLQGHSHQGHQWRQLJQRUDQFHDQGFUDYLQJWKHNDPPLFSRWHQF\RIWKHLUMKQDFDXVHVWKHPWREHUHERUQLQWKH%UDKPDZRUOG

$IWHUDORQJWLPHWKHZDWHULQWKHZRUOGEHJLQVWRHYDSRUDWHDQGILVKWXUWOHVDQGRWKHUFUHDWXUHVWKDWOLYHLQZDWHUGLH2ZLQJWRWKHLUSDVWZKROHVRPHNDPPDDOVRWKH\DUHUHERUQLQWKHGHYDZRUOGZKHUHWKH\DVGHYDVGHYHORS

MKQD'HSHQGHQWRQLJQRUDQFHDQGFUDYLQJWKHNDPPLFSRWHQF\RIWKHLUMKQD

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

1RWHYHQWKHQEKLNNKXVLVWKHVXIIHULQJRILJQRUDQFHKLQGHUHGEHLQJVIHWWHUHGE\

FUDYLQJZKRUXVKRQDQGUXQDERXWEURXJKWWRDQHQG,GHFODUH

$IWHUDORQJSHULRGZLWKRXWUDLQE\WKHWLPHDOOEHLQJVKDYHEHHQUHERUQHOVHZKHUHDVHFRQGVXQDSSHDUV$QGDVRQHVXQVHWVWKHRWKHUULVHVVRWKHUHLVQRPRUHWHOOLQJQLJKWIURPGD\WKHZRUOGLVFRQWLQXRXVO\VFRUFKHGE\WKHKHDWRIWKHWZRVXQV6WUHDPVDQGVPDOOHUULYHUVGU\XS

$IWHU\HWDQRWKHUYHU\ORQJSHULRGDWKLUGVXQDSSHDUVDQGQRZDOVRWKHJUHDWULYHUVGU\XS7KHQDIWHU\HWDQRWKHUYHU\ORQJSHULRGDIRXUWKVXQDSSHDUV

9V0[LLL3XEEH1LYVQXVVDWLfD.DWK'LVFXVVLRQRIWKH3DVW$ERGHV5HFROOHFWLRQ.QRZOHGJH33[LLLPHQWLRQVWKDWDFFRUGLQJWRDQRWKHUWHDFKHUWKLVWDNHVSODFHRQO\DWWKHDSSHDUDQFHRIWKHVHYHQWKVXQ7KLVLVWKHPRVWVHULRXVRIWKHVL[ZHLJKW\NDPPDVVHH8QZKROHVRPH:HLJKW\.DPPDS

)RUGHWDLOVVHHHQGQRWHS6,,,,[*DGGXOD%DGGKD6XWWD7KH&ORJ%RXQG6XWWD$9,,YLL6DWWD6UL\D6XWWD7KH6HYHQ6XQV6XWWDJUHDWULYHUV7KH%XGGKDOLVWVILYHULYHUVWKH*DQJHVWKH


24/416

, 7 K H & O R J % R X Q G 6 X W W D

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

(YHQVRH[SODLQV7KH%XGGKDWKHUHLVQRHQGWRWKHUXVKLQJRQDQGUXQQLQJDERXWRIEHLQJVLQWKHURXQGRIUHELUWK

7KHUHZLOOFRPHDWLPHEKLNNKXVZKHQ6LQHUXNLQJRIPRXQWDLQVLVEXUQHGGH

VWUR\HGDQGLVQRPRUH1RWHYHQWKHQEKLNNKXVLVWKHVXIIHULQJRILJQRUDQFHKLQGHUHG

EHLQJVIHWWHUHGE\FUDYLQJZKRUXVKRQDQGUXQDERXWEURXJKWWRDQHQG,GHFODUH

7KHUHZLOOFRPHDWLPHEKLNNKXVZKHQWKHJUHDWHDUWKLVEXUQHGGHVWUR\HGDQGLV

QRPRUH1RWHYHQWKHQEKLNNKXVLVWKHVXIIHULQJRILJQRUDQFHKLQGHUHGEHLQJVIHWWHUHG

E\FUDYLQJZKRUXVKRQDQGUXQDERXWEURXJKWWRDQHQG,GHFODUH

+DYLQJH[SODLQHGKRZEHLQJVFRQWLQXHWRUXVKRQDQGUXQDERXWLQWKHURXQGRIUHELUWK7KH%XGGKDWKHQGLVFXVVHVZK\WKH\GRVR

683326(

%

+,..+86$

'2*

:$6

&/2*

%281'

7RH[SODLQZK\EHLQJVUXVKRQDQGUXQDERXWLQWKHURXQGRIUHELUWK7KH%XGGKDXVHVDVLPLOHWKHVLPLOHRIDFORJERXQGGRJ

6XSSRVHWKHQEKLNNKXVDGRJZDVFORJERXQG VJDGGXODEDGGKRDQGWRDVWURQJSRVWRUSLOODUZDVERXQGFORVHLWZRXOGNHHSJRLQJURXQGDQGFLUFOLQJURXQGWKDWVDPHSRVW

RUSLOODU

7KHGRJLVERXQGE\DFORJDQGERXQGFORVHWRDVWURQJSRVWRUSLOODUVRLWFDQQRWUXQDZD\LWFDQRQO\JRURXQGDQGURXQGFORVHWRWKHSRVWRUSLOODU

7+(81('8&$7('25',1$5


25/416


7+( 81('8&$7('3(5621

:KDWGRHV7KH%XGGKDPHDQZKHQ+HVD\VDSHUVRQLV XQHGXFDWHGDVVXWDY"+HPHDQVVRPHRQHZKRLVXQHGXFDWHGLQDQGLJQRUDQWRIERWKWKHWKHRU\DQGSUDFWLFHRIWKH'KDPPDVRPHRQHZKRSRVVHVVHVQHLWKHUOHDUQLQJJDPDQRUDWWDLQPHQWDGKLJDPD7KHXQHGXFDWHGSHUVRQLVRQHZKRQHHGVWREHHGXFDWHGDERXWWKH)RXU1REOH7UXWKV

; 7KHXQHGXFDWHGSHUVRQKDVIDLOHGWRVWXG\DQGLQTXLUHDERXWWKH7H[WVDQGVRGRHVQRWNQRZWKHGLIIHUHQFHEHWZHHQWKHDJJUHJDWHVNKDQGKDWKHHOH

PHQWVGKWXDQGWKHVHQVHEDVHV\DWDQDZKLFKDUHWKH)LUVW1REOH7UXWKWKH1REOH7UXWKRI6XIIHULQJ'XNNKD$UL\D6DFFD

; 7KHXQHGXFDWHGSHUVRQKDVIDLOHGWRVWXG\DQGLQTXLUHDERXWGHSHQGHQWRULJLQDWLRQSDLFFDVDPXSSGDZKLFKLVWKH6HFRQG1REOH7UXWKWKH1REOH7UXWKRIWKH2ULJLQRI6XIIHULQJ'XNNKD6DPXGD\D$UL\D6DFFD

; 7KHXQHGXFDWHGSHUVRQKDVIDLOHGWRVWXG\DQGLQTXLUHDERXWWKHIRXUIRXQGDWLRQVRIPLQGIXOQHVVVDWLSDKQDZKLFKLVWKH)RXUWK1REOH7UXWKWKH1REOH(LJKWIROG3DWKWKH1REOH7UXWKRIWKH3UDFWLFH/HDGLQJWRWKH&HVVDWLRQRI6XIIHULQJ'XNNKD1LURGKD*PLQ3DLSDG$UL\D6DFFD

; 7KHXQHGXFDWHGSHUVRQKDVQRWSUDFWLVHGV\VWHPDWLFDOO\DQGVRKDVQRWGLVFHUQHGDQ\RIWKHVHWKLQJVHLWKHUDQGVRKDVDWWDLQHGQR3DWK0DJJDRU)UXLWLRQ3KDOD7KH\WDNHDVREMHFW1LEEQDWKH7KLUG1REOH7UXWKWKH1R

EOH7UXWKRIWKH&HVVDWLRQRI6XIIHULQJ'XNNKD1LURGKD$UL\D6DFFD7KDWLVZKDW7KH%XGGKDPHDQVZKHQ+HVD\VDSHUVRQLVXQHGXFDWHGDVVXWDY

7+( 25',1$5


26/416

, 7 K H & O R J % R X Q G 6 X W W D

; 7KHRUGLQDU\SHUVRQPD\EHUHERUQLQPDQ\GHVWLQDWLRQVJDWLWKHKHOOVWKHJKRVWDQGDQLPDOZRUOGVDQGWKHKXPDQDQGGHYDZRUOGV

; 7KHRUGLQDU\SHUVRQLVDWWDFKHGWRPDQ\SOHDVXUHVWKURXJKWKHILYHVHQVXDOOLQHVNPDJXDVLJKWVWKURXJKWKHH\HVRXQGVWKURXJKWKHHDURGRXUVWKURXJKWKHQRVHWDVWHVWKURXJKWKHWRQJXHDQGWRXFKHVWKURXJKWKHERG\

; 7KHRUGLQDU\SHUVRQLVKLQGHUHGE\PDQ\KLQGUDQFHVQYDUDDVHQVXDOGHVLUHNPDFFKDQGDLOOZLOOE\SGDVORWKWRUSRUWKLQDPLGGKDUHVWOHVVQHVVZRUU\XGGKDFFDNXNNXFFDVFHSWLFLVPYLFLNLFFKDERXW7KH%XGGKD'KDPPD6DQJKDSDVWDQGIXWXUHOLYHVHWFDQGLJQRUDQFH

:+2'2(61276((12%/(21(6

7KH3DOLZRUGSXWKXPHDQVQRWRQO\PDQ\LWPHDQVDOVRVHSDUDWH7KXVWKHRUGLQDU\SHUVRQSXWKXMMDQDFDQEHVHHQDOVRDVVHSDUDWHDQGGLVWLQFWIURP1REOH2QHVZKRSRVVHVVTXDOLWLHVVXFKDVYLUWXHOHDUQLQJHWF7KDWLVZKDW7KH%XGGKDUHIHUVWRZKHQ+HGHVFULEHVWKHXQHGXFDWHGRUGLQDU\SHUVRQIXUWKHUWKDWLV

7KHXQHGXFDWHGRUGLQDU\SHUVRQ DVVXWDYSXWKXMMDQRZKRGRHVQRWVHH1REOH2QHV$UL\QDDGDVVYZKRLVLQWKHLU1REOH'KDPPDXQVNLOOHG$UL\D'KDPPDVVDDNRYLGRZKRLVLQWKH1REOH'KDPPDXQGLVFLSOLQHG $UL\D'KDPPHDYLQWR

$1REOH2QH$UL\DLVD%XGGKDD3DFFHNDEXGGKDRUD%XGGKDV'LVFLSOH%XGGKD6YDNDZKRKDVDWWDLQHGDVXSUDPXQGDQHVWDWH

7KHXQHGXFDWHGRUGLQDU\SHUVRQVQRWVHHLQJ1REOH2QHVLVRIWZRW\SHVQRWVHHLQJZLWKWKHH\HFDNNKXQDGDVVYDQGQRWVHHLQJZLWKNQRZOHGJHxHQDDGDVVY)RUHYHQWKRXJKRQHPD\VHH1REOH2QHVZLWKRQHVSK\VLFDOH\HRQHVHHVRQO\WKHLUH[WHULRUQRWWKHLU1REOHVWDWH

7KHUHZDVRQFHDEKLNNKXZKRZDVPRUWDOO\LOO:KHQ7KH%XGGKDDVNHGKLPLIKHKDGDQ\WKLQJWRUHJUHWKHVDLGKHUHJUHWWHGQRWKDYLQJVHHQ7KH%XGGKDIRUDORQJWLPHPHDQLQJWKDWKHKDGQRWVHHQ7KH%XGGKDVH[WHULRUZLWKKLVSK\VLFDOH\H7KH%XGGKDVDLGWRKLP

:K\GR\RX9DNNDOLWKLVVWLQNLQJERG\ZDQWWRVHH"

:KRHYHU9DNNDOLWKH'KDPPDVHHVKH0HVHHV ZKRHYHU0HVHHVKHWKH'KDPPDVHHV

)RUE\WKH'KDPPDVHHLQJ9DNNDOLRQH0HVHHV0HVHHLQJRQHWKH'KDPPDVHHV

7KLVPHDQVWKDWLWLVQRWHQRXJKPHUHO\WRVHH1REOH2QHVZLWKRQHVSK\VLFDOH\H2QHQHHGVDOVRWRVHHWKH1REOHVWDWHRIWKH1REOH2QHVDQGWKHWKLQJVSHUWDLQLQJWRWKHLU1REOHVWDWHWKDWLVRQHQHHGVWRKDYHNQRZQDQGVHHQWKHLPSHUPDQHQFHDQLFFDVXIIHULQJGXNNKDDQGQRQVHOIDQDWWDRIXOWLPDWHPDWHULDOLW\

LW\RIWKHRUGLQDU\SHUVRQLQIRUH[DPSOH7KH6HFRQG&ORJ%RXQG6XWWDVHHS7KH%XGGKDH[SODLQVLWLQWKHSKUDVHLJQRUDQFHKLQGHUHGEHLQJVXVHGLQIRUH[DPSOHERWK*DGGXOD%DGGKDVXWWDV6HHDOVRIRRWQRWHSDQG8QZKROHVRPH&RQVFLRXVQHVVS7KLVLVKRZWKHWZRW\SHVRIVHHLQJDUHH[SODLQHGLQ0$LELG'K6$LELG7KH\FDQDOVREHH[SODLQHGDVQRWVHHLQJ1REOH2QHVZLWKWKHWUDQVOXFHQF\H\HSDVGDFDNNKXVHHXQGHU&RQFUHWH'HULYHG0DWHULDOLW\S!RUWKHNQRZOHGJHH\HxDFDNNKXZLVGRPH\HSDxxFDNNKX7KHVHWZRW\SHVRIH\HDUHGHVFULEHGLQIRUH[DPSOH'K6$,,8SG%KMDQ\D.DWK'LVFXVVLRQRIWKH&ODVVLILFDWLRQRI'HULYHG>0DWHULDOLW\@('K6$0$LELGUHIHUWRWKLVLQFLGHQWIURP6,,,,L[9DNNDOL6XWWD7KH9DNNDOL6XWWD


27/416


DQGXOWLPDWHPHQWDOLW\WKURXJKLQVLJKWPHGLWDWLRQSUDFWLFHDQGRQHQHHGVWRKDYHDWWDLQHGWRWKH'KDPPDWKDWWKH1REOH2QHVKDYHDWWDLQHGWR6RORQJDVWKRVHWKLQJVUHPDLQXQVHHQVRORQJLVRQHVWLOODSHUVRQZKRGRHVQRWVHH1REOH2QHV

:+2,6816.,//('$1'81',6&,3/,1('

7KH%XGGKDH[SODLQHGDOVRWKDWWKHXQHGXFDWHGRUGLQDU\SHUVRQLVLQWKH1REOH2QHV1REOH'KDPPDXQVNLOOHG$UL\D'KDPPDVVDDNRYLGRDQGLQWKH1REOH'KDPPDXQGLVFLSOLQHG$UL\D'KDPPHDYLQWR

7REHXQVNLOOHGLQWKH'KDPPDRI1REOH2QHVLVWREHZLWKRXWVNLOOLQWKHIRXUIRXQGDWLRQVRIPLQGIXOQHVVVDPDWKDDQGYLSDVVDQHWF7REHXQGLVFLSOLQHGLQWKH1REOH'KDPPDLVWREHZLWKRXWWZRW\SHVRIGLVFL

SOLQH 5HVWUDLQWGLVFLSOLQHVDYDUDYLQD\D $EDQGRQPHQWGLVFLSOLQHSDKQDYLQD\D

7KHUHDUHILYHW\SHVRIUHVWUDLQWGLVFLSOLQHDQGILYHW\SHVRIDEDQGRQPHQWGLVFLSOLQH

5(675$,17',6&,3/,1(

7KHXQHGXFDWHGRUGLQDU\SHUVRQLVXQGLVFLSOLQHGE\WKHILYHW\SHVRIUHVWUDLQWGLVFLSOLQHVDYDUDYLQD\D

5HVWUDLQWE\PRUDOLW\VODVDYDUDWKHXQHGXFDWHGRUGLQDU\SHUVRQLVQRWGLVFLSOLQHGE\WKHILYHHLJKWRUWHQSUHFHSWVRUWKH3LPRNNKDSUHFHSWVDQGVRGRHVQRWUHIUDLQIURPNLOOLQJVWHDOLQJVH[XDOPLVFRQGXFWO\LQJGULQNLQJEHHUDQGZLQHHWFRUWDNLQJRWKHULQWR[LFDQWVHWF

5HVWUDLQWE\PLQGIXOQHVVVDWLVDYDUDWKHXQHGXFDWHGRUGLQDU\SHUVRQGRHVQRWUHVWUDLQWKHVL[IDFXOWLHVH\HHDUQRVHWRQJXHERG\DQGPLQG

5HVWUDLQWE\NQRZOHGJHxDVDYDUDWKDWLVL WKHXQHGXFDWHGRUGLQDU\SHUVRQLVXQGLVFLSOLQHGE\WKHUHVWUDLQWRI

VDPDWKDNQRZOHGJHVDPDWKDxDNQRZOHGJHRIKHURUKLVPHGLWDWLRQVXEMHFWVOHDUQLQJVLJQXJJDKDQLPLWWDRUFRXQWHUSDUWVLJQSDLEKJDQLPLWWDDWDFFHVVXSDFUDVDPGKLRUDEVRUSWLRQFRQFHQWUDWLRQDSSDQVDPGKL

LL WKHXQHGXFDWHGRUGLQDU\SHUVRQLVXQGLVFLSOLQHGE\WKHUHVWUDLQWRILQ

VLJKWNQRZOHGJHYLSDVVDQxDNQRZOHGJHRIWKHLPSHUPDQHQFHVXIIHULQJDQGQRQVHOIFKDUDFWHULVWLFVRIXOWLPDWHPDWHULDOLW\DQGXOWLPDWHPHQWDOLW\

LLL WKHXQHGXFDWHGRUGLQDU\SHUVRQLVXQGLVFLSOLQHGE\WKHUHVWUDLQWRI3DWK.QRZOHGJH0DJJDfQDNQRZOHGJHRIWKH)RXU1REOH7UXWKV

LY WKHXQHGXFDWHGRUGLQDU\SHUVRQLVXQGLVFLSOLQHGE\WKHUHVWUDLQWRINQRZOHGJHWKDWDULVHVWKURXJKZLVHDWWHQWLRQ\RQLVRPDQDVLNUDZLWKUHJDUGWRWKHIRXUUHTXLVLWHVRIOLIHFORWKHVIRRGGZHOOLQJDQGPHGLFLQH

5HVWUDLQWE\SDWLHQFHNKDQWLVDYDUDWKHXQHGXFDWHGRUGLQDU\SHUVRQGRHVQRWSDWLHQWO\HQGXUHFROGDQGKHDWKXQJHUDQGWKLUVWKDUPIXODQGKDUPOHVVLQVHFWVUXGHVSHHFKSDLQHWF

5HVWUDLQWE\HQHUJ\YUL\DVDYDUDWKHXQHGXFDWHGRUGLQDU\SHUVRQGRHVQRWDURXVHHQHUJ\WRUHPRYHWKRXJKWVRIVHQVXDOGHVLUHLOOZLOODQGFUXHOW\

)RUDQDQDO\VLVVHH%HHU:LQH/LTXRUS7KHDQDO\VLVIRUUHVWUDLQWE\NQRZOHGJHKDVEHHQWDNHQIURP0$,L 6DEEVDYD6XWWD7KH$OO7DLQWV6XWWD


28/416


29/416


7KHXQHGXFDWHGRUGLQDU\SHUVRQRIWHQOHWVJRRIKHURUKLVUHVWUDLQWDQGKDVQRWDEDQGRQHGZKDWQHHGVWREHDEDQGRQHGWKDWLVZKDW7KH%XGGKDLVUHIHUULQJWRZKHQ+HVD\VWKHXQHGXFDWHGRUGLQDU\SHUVRQLVLQWKH1REOH'KDPPDXQGLVFLSOLQHG$UL\D'KDPPHDYLQWR

:+2'2(61276((758(0(1

)LQDOO\7KH%XGGKDH[SODLQVWKHXQHGXFDWHGRUGLQDU\SHUVRQDVRQH

:KRGRHVQRWVHH7UXH0HQZKRLVLQWKH7UXH0HQV'KDPPDXQVNLOOHGZKRLVLQWKH

7UXH0HQV'KDPPDXQGLVFLSOLQHG

,QWKLVFDVH7UXH0HQDUHWKHVDPHDV1REOH2QHVIRU1REOH2QHVDUH7UXH0HQDQG7UXH0HQDUH1REOH2QHV7KH1REOH2QHV'KDPPDLVWKHVDPHDVWKH7UXH0HQV'KDPPDDQGWKH1REOH2QHVGLVFLSOLQHLVWKHVDPHDVWKH7UXH0HQVGLVFLSOLQH

7KDWFRQFOXGHVRXUH[SODQDWLRQRIZKDW7KH%XGGKDPHDQVZKHQ+HVSHDNVRIWKHXQHGXFDWHGRUGLQDU\SHUVRQDVVXWDYSXWKXMMDQR

5(*$5'67+(),9($**5(*$7(6$66(/)

+DYLQJH[SODLQHGWKHTXDOLWLHVRIWKHXQHGXFDWHGRUGLQDU\SHUVRQ7KH%XGGKDWKHQH[SODLQVKRZVXFKDSHUVRQUHJDUGVWKHILYHDJJUHJDWHVSDxFDNNKDQGKD

6LQFHZHQRZXQGHUVWDQG7KH%XGGKDVZRUGVEHWWHUOHWXVEHJLQDJDLQZLWK

WKHLPDJHRIWKHFORJERXQGGRJ6XSSRVHWKHQEKLNNKXVDGRJZDVFORJERXQGDQGWRDVWURQJSRVWRUSLOODUZDV

ERXQGFORVHLWZRXOGNHHSJRLQJURXQGDQGFLUFOLQJURXQGWKDWVDPHSRVWRUSLOODU

6RWRREKLNNKXVWKHXQHGXFDWHGRUGLQDU\SHUVRQ

ZKRGRHVQRWVHH1REOH2QHVZKRLVLQWKHLU1REOH'KDPPDXQVNLOOHGZKRLVLQWKH1REOH'KDPPDXQGLVFLSOLQHG

ZKRGRHVQRWVHH7UXH0HQZKRLVLQWKH7UXH0HQV'KDPPDXQVNLOOHGZKRLVLQWKH7UXH0HQV'KDPPDXQGLVFLSOLQHG

>@ UHJDUGVPDWHULDOLW\USDDVVHOIRUVHOIDVKDYLQJPDWHULDOLW\RUPDWHULDOLW\DVLQVHOIRUVHOIDVLQPDWHULDOLW\

>@ UHJDUGVIHHOLQJYHGDQDVVHOIRUVHOIDVKDYLQJIHHOLQJRUIHHOLQJDVLQVHOIRUVHOIDVLQIHHOLQJ

>@ UHJDUGVSHUFHSWLRQVDxxDVVHOIRUVHOIDVKDYLQJSHUFHSWLRQRUSHUFHSWLRQDVLQVHOIRUVHOIDVLQSHUFHSWLRQ

>@ UHJDUGVIRUPDWLRQVVDNKUDDVVHOIRUVHOIDVKDYLQJIRUPDWLRQVRUIRUPDWLRQVDVLQVHOIRUVHOIDVLQIRUPDWLRQV

>@ UHJDUGVFRQVFLRXVQHVVYLxxDDVVHOIRUVHOIDVKDYLQJFRQVFLRXVQHVVRUFRQVFLRXVQHVVDVLQVHOIRUVHOIDVLQFRQVFLRXVQHVV

+HUH7KH%XGGKDH[SODLQHGKRZWKHXQHGXFDWHGRUGLQDU\SHUVRQUHJDUGVWKHILYHDJJUHJDWHV

(DFKRIWKHILYHDJJUHJDWHVPD\LQIRXUZD\VEHUHJDUGHGVRPHKRZDVVHOI7KDWJLYHVWZHQW\W\SHVRILGHQWLW\YLHZVDNN\DGLKLWKHZURQJYLHZRILGHQWLW\

IRUPDWLRQVVDNKUD7KHPHDQLQJRIWKLVWHUPGHSHQGVRQWKHFRQWH[W$VWKHFDXVHRIFRQVFLRXVQHVVLQGHSHQGHQWRULJLQDWLRQLWUHIHUVWRWKHIRUPDWLRQRINDPPDYROLWLRQDOIRUPDWLRQE\ERG\VSHHFKRUPLQGVHHIRRWQRWHS$VWKHIRXUWKDJJUHJDWHRIFOLQJLQJKHUHLWUHIHUVWRDOOWKHPHQWDOIDFWRUVH[FHSWWKHWZRPHQWDOIDFWRUVIHHOLQJDQGSHUFHSWLRQDVVRFLDWHGZLWKDQ\NLQGRIFRQVFLRXVQHVVUHVXOWDQWIXQFWLRQDORUNDPPDFRQVFLRXVQHVVIRUPDWLRQV6HHIRRWQRWHS,QRWKHUFRQWH[WVWKHWHUPKDV\HWRWKHUPHDQLQJV


30/416

, 7 K H & O R J % R X Q G 6 X W W D

6,0,/(6217+(,'(17,7


31/416


2QHUHJDUGVSHUFHSWLRQDVVHOI 2QHUHJDUGVIRUPDWLRQVDVVHOI 2QHUHJDUGVFRQVFLRXVQHVVDVVHOI

,QWZHOYHFDVHVRQHUHJDUGVVHOIDVLGHQWLFDOWRERWKPHQWDOLW\DQGPDWHULDOLW\WKDWLV

2QHUHJDUGVVHOIDVSRVVHVVLQJIHHOLQJ 2QHUHJDUGVIHHOLQJDVFRQWDLQHGLQVHOI 2QHUHJDUGVVHOIDVFRQWDLQHGLQIHHOLQJ

2QHUHJDUGVVHOIDVSRVVHVVLQJSHUFHSWLRQ

2QHUHJDUGVSHUFHSWLRQDVFRQWDLQHGLQVHOI 2QHUHJDUGVVHOIDVFRQWDLQHGLQSHUFHSWLRQ 2QHUHJDUGVVHOIDVSRVVHVVLQJIRUPDWLRQV 2QHUHJDUGVIRUPDWLRQVDVFRQWDLQHGLQVHOI 2QHUHJDUGVVHOIDVFRQWDLQHGLQIRUPDWLRQV2QHUHJDUGVVHOIDVSRVVHVVLQJFRQVFLRXVQHVV 2QHUHJDUGVFRQVFLRXVQHVVDVFRQWDLQHGLQVHOI 2QHUHJDUGVVHOIDVFRQWDLQHGLQFRQVFLRXVQHVV

$11,+,/$7,219,(:

,QILYHFDVHVZKHUHRQHUHJDUGVVHOIDVGLUHFWO\LGHQWLFDOWRHLWKHUPDWHULDOLW\

IHHOLQJSHUFHSWLRQIRUPDWLRQVRUFRQVFLRXVQHVVLWLVDPDQLIHVWDWLRQRIWKHDQQLKLODWLRQYLHZXFFKHGDGLKLWKHZURQJYLHZWKDWZKHQRQHGLHVRQHVVHOILVDQQLKLODWHG

,QWKH%UDKPD-OD6XWWD7KH6XSUHPH1HW6XWWD7KH%XGGKDH[SODLQVVXFKDQDQQLKLODWLRQYLHZ

+HUHEKLNNKXVVRPHDVFHWLFRU%UDKPLQWKXVVD\LQJKROGVWKLVYLHZ6LQFHLQIDFW6LU

WKLVVHOILVPDWHULDORIWKHIRXUJUHDWHVVHQWLDOVFRPSRVHGWKHSURGXFWRIPRWKHUDQG

IDWKHUDWWKHEUHDNXSRIWKHERG\LWLVDQQLKLODWHGDQGSHULVKHVDQGGRHVQRWH[LVW

DIWHUGHDWK7KLVYLHZDULVHVEHFDXVHRQHKDVQRWGLVFHUQHGXOWLPDWHPDWHULDOLW\SDUDPDWWKD

USDDQGXOWLPDWHPHQWDOLW\SDUDPDWWKDQPD7KHUHIRUHRQHGRHVQRWNQRZWKDWZKHQDQDJJUHJDWHFHDVHVLWLVIROORZHGE\WKHDULVLQJRIDQHZDJJUHJDWHZURQJO\RQHWKLQNVWKDWZKHQDQDJJUHJDWHFHDVHVLWFHDVHVFRPSOHWHO\ZLWKRXWUHPDLQGHU7KHDQQLKLODWLRQYLHZDULVHVDOVREHFDXVHRQHKDVQRWGLVFHUQHGWKHZRUNLQJVRIGHSHQGHQWRULJLQDWLRQRQHGRHVQRWNQRZWKDWWKHDJJUHJDWHVDULVHGHSHQGHQWRQSDVWNDPPD

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


32/416

, 7 K H & O R J % R X Q G 6 X W W D

(7(51,7


33/416


+(0(5(/


34/416

, 7 K H & O R J % R X Q G 6 X W W D

:,6+,1*)255(%,57+

/HWXVWDNHDSUDFWLFDOHYHU\GD\H[DPSOHRIWKHLGHQWLW\YLHZLQRSHUDWLRQ6D\IRUH[DPSOHDZRPDQRUPDQRIIHUVDOLWFDQGOHWR7KH%XGGKDLPDJHZLWKWKHZLVKWREHFRPHDEKLNNKXLQWKHQH[WOLIH:KDWWKH\ZLVKIRUGRHVQRWH[LVWWKHUHLVQREKLNNKXRQO\PDWHULDOLW\DQGPHQWDOLW\,IWKH\UHJDUGWKHILYHDJJUHJDWHVSDxFDNNKDQGKDDVDEKLNNKXLWLVDPDQLIHVWDWLRQRILJQRUDQFHDYLMM7KHLUDWWDFKPHQWWROLIHDVDEKLNNKXLVDPDQLIHVWDWLRQRIFUDYLQJWDK$VWKHFUDYLQJDQGDWWDFKPHQWDFFXPXODWHWKH\EHFRPHFOLQJLQJXSGQD,QRWKHUZRUGVGH

SHQGHQWRQLJQRUDQFHFUDYLQJDQGFOLQJLQJWKHZRPDQRUPDQRIIHUVWKHOLWFDQGOHWR7KH%XGGKDLPDJH7KHRIIHULQJLVDZKROHVRPHDFWLRQNXVDODNDPPDDYROLWLRQDOIRUPDWLRQVDNKUDZLWKNDPPLFSRWHQF\DIRUPDWLRQRINDPPD7KHUHDUHDOWRJHWKHUILYHFDXVHVIRUWKLVIRUPDWLRQRINDPPDLJQRUDQFHFUDYLQJFOLQJLQJYROLWLRQDOIRUPDWLRQVDQGWKHNDPPLFSRWHQF\

,IKRZHYHUWKH\SUDFWLVHGLVFHUQPHQWRIPHQWDOLW\QPDNDPPDKQDWKH\PD\VHHWKDWDVWKH\RIIHUHGWKHOLWFDQGOHWR7KH%XGGKDLPDJHWKHUHZHUHRQO\WKLUW\IRXUPHQWDOSKHQRPHQDDVVRRQDVWKH\DURVHWKH\SHULVKHG1RIRUPDWLRQLVSHUPDQHQW%XWWKHUHUHPDLQHGWKHSRWHQF\E\ZKLFKWKHZKROHVRPHNDPPDLVDEOHWRPDWXUHDQGSURGXFHDUHVXOW,ILWPDWXUHVLWPD\DFFRUGLQJWRWKHLUZLVKSURGXFHWKHILYHDJJUHJDWHVWKDWDUHDEKLNNKXVOLIH7KHSRWHQF\WKDWFDQGRVXFKDWKLQJLVFDOOHGWKHNDPPLFSRWHQF\NDPPDVDWWL$QGVRORQJ

DVLJQRUDQFHFUDYLQJFOLQJLQJDQGYROLWLRQDOIRUPDWLRQVH[LVWVRGRHVWKHURXQGRIUHELUWKFRQWLQXHDQGWKHXQHGXFDWHGRUGLQDU\SHUVRQLVQRWUHOHDVHGIURPVXIIHULQJ

7+(('8&$7('12%/(',6&,3/(

+DYLQJH[SODLQHGWKHXQHGXFDWHGRUGLQDU\SHUVRQDQGVXFKDSHUVRQVWZHQW\W\SHVRILGHQWLW\YLHZ7KH%XGGKDWKHQVSHDNVRI

7KHUHUHPDLQHGWKHSRWHQF\WKLVGRHVQRWPHDQWKHNDPPDOHDYHVDQLPSULQWRUWUDFHLQWKHOLIHFRQWLQXXPGHSRVLWLQJDVRPHWKLQJ7KHSRWHQF\RINDPPDGRHVQRWDVVXFKXQGHUOLHWKHFRQWLQXLW\RIPHQWDOLW\PDWHULDOLW\2ZLQJWRFHUWDLQFRQGLWLRQVWKHLQGLYLGXDO

NDPPDPDWXUHVDQGRQO\DWWKDWPRPHQWGRHVWKHSRWHQF\RIWKDWNDPPDXQGHUOLHWKHFRQWLQXLW\RIPHQWDOLW\PDWHULDOLW\DVDQDFWXDOZRUNLQJIRUFH6HHDOVRIRRWQRWHSDQG.DPPLF3RWHQF\S7KH%XGGKDPDNHVWKLVNLQGRIGLVWLQFWLRQZKHQ+HH[SODLQVWKDWWKHWXQHRIDOXWHLVQRWZDLWLQJLQVLGHWKHOXWHEXWDULVHVRZLQJWRFRQGLWLRQVWKHSK\VLFDOFRPSRQHQWVRIWKHOXWHDQGWKHPXVLFLDQVSOD\LQJRQLW6,9,[L[ 92SDPD6XWWD7KH/XWH6LPLOH6XWWD$QG9V0[[ 0DJJPDJJDf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


35/416


7KHHGXFDWHG1REOH'LVFLSOHZKRVHHV1REOH2QHVZKRLVLQWKHLU1REOH'KDPPD

VNLOOHGZKRLVLQWKH1REOH'KDPPDGLVFLSOLQHGZKRVHHV7UXH0HQZKRLVLQWKH7UXH

0HQV'KDPPDVNLOOHGZKRLVLQWKH7UXH0HQV'KDPPDGLVFLSOLQHG

7:2 7


36/416

, 7 K H & O R J % R X Q G 6 X W W D

:HPD\GHVFULEHWKHHGXFDWHG1REOH'LVFLSOHDVVLPSO\RQHZKRSRVVHVVHVWKRVHWKLQJVWKDWDQXQHGXFDWHGRUGLQDU\SHUVRQGRHVQRWSRVVHVV7KHHGXFDWHG1REOH'LVFLSOHLVWKXVQRWRQHRIWKHPDQ\EXWRQHRIWKHYHU\IHZDQGLVHGXFDWHGLQDQGNQRZOHGJHDEOHRIERWKWKHRU\DQGSUDFWLFHRIWKH'KDPPD,QRWKHUZRUGVWKHHGXFDWHG1REOH'LVFLSOHXQGHUVWDQGVWKH)RXU1REOH7UXWKV

/HWXVWDNHVRPHH[DPSOHVRIKRZWKHHGXFDWHG1REOH'LVFLSOHWUDLQHHGLIIHUVIURPWKHXQHGXFDWHGRUGLQDU\SHUVRQ

7KHHGXFDWHG1REOH'LVFLSOHWUDLQHHSRVVHVVHVFRQVFLHQFHDQGVKDPHLV

FRQVFLHQWLRXVRIPLVFRQGXFWWKURXJKERG\VSHHFKDQGPLQGDQGDVKDPHGRILWLVFRQVFLHQWLRXVQHVVQRWWRGRZURQJDQGDVKDPHGRILW 7KHHGXFDWHG1REOH'LVFLSOHWUDLQHHDURXVHVHQHUJ\WRUHPRYHWKRXJKWVRI

VHQVXDOGHVLUHLOOZLOODQGFUXHOW\ 7KHHGXFDWHG1REOH'LVFLSOHWUDLQHHUHVWUDLQVWKHH\HHDUQRVHWRQJXH

ERG\DQGPLQGE\DWWHQGLQJWRWKHIRXUIRXQGDWLRQVRIPLQGIXOQHVVZKLFKLVWKHVDPHDVWRVD\VDPDWKDRUYLSDVVDQ

7KHHGXFDWHG1REOH'LVFLSOHWUDLQHHGRHVQRWILQGSOHDVXUHLQWKHILYHVHQVXDOOLQHVNPDJXDGRHVQRWILQGSOHDVXUHLQVLJKWVWKURXJKWKHH\HVRXQGVWKURXJKWKHHDURGRXUVWKURXJKWKHQRVHWDVWHVWKURXJKWKHWRQJXHDQGWRXFKHVWKURXJKWKHERG\

7KHHGXFDWHG1REOH'LVFLSOHWUDLQHHZKRLVDEKLNNKXLVUHVWUDLQHGE\VFUXSXORXVREVHUYDQFHRIWKHEKLNNKX3LPRNNKDUXOH7KHHGXFDWHG1REOH'LVFLSOHZKRLVDOD\SHUVRQLVUHVWUDLQHGE\VFUXSXORXVREVHUYDQFHRIWKHILYHSUHFHSWV7KDWPHDQVVKHRUKHGRHVQRWNLOOGRHVQRWVWHDOGRHVQRWHQJDJHLQVH[XDOPLVFRQGXFWGRHVQRWWHOOOLHVGRHVQRWGULQNWKLQJVOLNHEHHUDQGZLQH7KHHGXFDWHG1REOH'LVFLSOHZLOODOVRRQFHDZHHNREVHUYHWKHHLJKWSUHFHSWVVKHRUKHPD\HYHQREVHUYHWKHPDOOWKHWLPHOLNHZLVHWKHWHQSUHFHSWV,QWKDWFDVHVKHRUKHREVHUYHVGRHVQRWHDWDIWHUQRRQHWF

7KHHGXFDWHG1REOH'LVFLSOHWUDLQHHSRVVHVVHV5LJKW&RQFHQWUDWLRQ6DPP6DPGKLZKLFKLVDFFHVVFRQFHQWUDWLRQRUWKHIRXUMKQDV

7KHHGXFDWHG1REOH'LVFLSOHWUDLQHHSRVVHVVHVSHQHWUDWLQJZLVGRP8QWLOWKH1REOH'LVFLSOHEHFRPHVD1REOH,QGLYLGXDOWKHZLVGRPLVRQO\PXQGDQHLQVLJKWNQRZOHGJHYLSDVVDQxDZKLFKVXSSUHVVHVWKHGHILOHPHQWVDQGGLVFHUQVWKHDULVLQJDQGSHULVKLQJRIWKHILYHDJJUHJDWHVDVZHOODVWKHLU

GHSHQGHQWRULJLQDWLRQDQGFHVVDWLRQ%XWRQFHVKHRUKHKDVEHFRPHD1REOH,QGLYLGXDOWKHZLVGRPWKDWVKHRUKHSRVVHVVHVLVVXSUDPXQGDQHWKH3DWK.QRZOHGJH0DJJDfDLWWDNHV1LEEQDDVREMHFWDQGHUDGLFDWHVGHILOHPHQWV2ZLQJWRWKDW3DWK.QRZOHGJHVKHRUKHGRHVQRWKROGWKHDQQLKLODWLRQYLHZWKHHWHUQLW\YLHZRUWKHLGHQWLW\YLHZ

7KHHGXFDWHG1REOH'LVFLSOHWUDLQHHSRVVHVVHVOHDUQLQJKDYLQJVWXGLHGDQGLQTXLUHGDERXWWKH7H[WV

)RU7KH%XGGKDVH[SODQDWLRQRIKRZIHZDUHSRVVHVVHGRIWKHH\HRIZLVGRPVHHHQGQRWHS6HHDOVR6WUHDP(QWU\SFRQVFLHQFHVKDPHVHHTXRWHGDQDO\VLVDW&RQVFLHQFHS6HHTXRWDWLRQVHQGQRWHS)RUWKLVDQDO\VLVRIWKH1REOH'LVFLSOHVZLVGRPVHHIRUH[DPSOHWKHFRPPHQWDU\WR0,,L6HNKD6XWWD7KH7UDLQHH6XWWDILYHDJJUHJDWHVWKHVHDUHWKHREMHFWVIRUYLSDVVDQ6HHTXRWDWLRQDW7KHUHIRUH%KLNNKXV$Q\:KDWVRHYHU0DWHULDOLW\S


37/416


7KHHGXFDWHG1REOH'LVFLSOHWUDLQHHKDVQRVFHSWLFLVPDERXW7KH%XGGKDVHQOLJKWHQPHQWDERXWWKH'KDPPDDERXWWKH6DQJKDDERXWSDVWOLYHVDERXWIXWXUHOLYHVDERXWWKHSUHVHQWOLIHDERXWRWKHUZRUOGVRUDERXWWKHODZRINDPPDDQGLWVHIIHFWHWFVKHRUKHKDVFRPSOHWHIDLWKLQ7KH%XGGKDDQGORRNVWRQRRWKHUWHDFKHU

7KHHGXFDWHG1REOH'LVFLSOHWUDLQHHLVFHUWDLQQRORQJHUWREHUHERUQLQWKHEDGGHVWLQDWLRQVGXJJDWLQRWLQWKHJKRVWZRUOGQRWLQWKHDQLPDOZRUOGDQGQRWLQDQ\RIWKHKHOOV

7KHHGXFDWHG1REOH'LVFLSOHWUDLQHHLVFHUWDLQWRDWWDLQIXOOHQOLJKWHQPHQW6DPERGKLZLWKLQVHYHQOLYHVHYHQHDUOLHU

7KDWFRQFOXGHVRXUH[SODQDWLRQRIZKDW7KH%XGGKDPHDQVZKHQ+HVSHDNVRIWKHHGXFDWHG1REOH'LVFLSOHVXWDY$UL\D6YDNR

'2(61275(*$5'7+(),9($**5(*$7(6$66(/)

+DYLQJH[SODLQHGWKHTXDOLWLHVRIWKHHGXFDWHG1REOH'LVFLSOH7KH%XGGKDWKHQH[SODLQVKRZVXFKDSHUVRQUHJDUGVWKHILYHDJJUHJDWHV

6LQFHZHQRZXQGHUVWDQG7KH%XGGKDVZRUGVEHWWHUOHWXVEHJLQDJDLQZLWK+LVGHVFULSWLRQRIWKHHGXFDWHG1REOH'LVFLSOH

%XWEKLNNKXVWKHHGXFDWHG1REOH'LVFLSOH

ZKRVHHV1REOH2QHVZKRLVLQWKHLU1REOH'KDPPDVNLOOHGZKRLVLQWKH1REOH

'KDPPDGLVFLSOLQHG ZKRVHHV7UXH0HQZKRLVLQWKH7UXH0HQV'KDPPDVNLOOHGZKRLVLQWKH7UXH0HQV'KDPPDGLVFLSOLQHG

>@ GRHVQRWUHJDUGPDWHULDOLW\DVVHOIQRUVHOIDVKDYLQJPDWHULDOLW\QRUPDWHULDOLW\DVLQVHOIQRUVHOIDVLQPDWHULDOLW\

>@ GRHVQRWUHJDUGIHHOLQJDVVHOIQRUVHOIDVKDYLQJIHHOLQJQRUIHHOLQJDVLQVHOIQRUVHOIDVLQIHHOLQJ

>@ GRHVQRWUHJDUGSHUFHSWLRQDVVHOIQRUVHOIDVKDYLQJSHUFHSWLRQQRUSHUFHSWLRQDVLQVHOIQRUVHOIDVLQSHUFHSWLRQ

>@ GRHVQRWUHJDUGIRUPDWLRQVDVVHOIQRUVHOIDVKDYLQJIRUPDWLRQVQRUIRUPDWLRQVDVLQVHOIQRUVHOIDVLQIRUPDWLRQV

>@ GRHVQRWUHJDUGFRQVFLRXVQHVVDVVHOIQRUVHOIDVKDYLQJFRQVFLRXVQHVVQRUFRQVFLRXVQHVVDVLQVHOIQRUVHOIDVLQFRQVFLRXVQHVV

+('2(6127*25281'7+(),9($**5(*$7(6>@ +HGRHVQRWJRURXQGGRHVQRWFLUFOHURXQGPDWHULDOLW\>@ GRHVQRWJRURXQGGRHVQRWFLUFOHURXQGIHHOLQJ>@ GRHVQRWJRURXQGGRHVQRWFLUFOHURXQGSHUFHSWLRQ>@ GRHVQRWJRURXQGGRHVQRWFLUFOHURXQGIRUPDWLRQV>@ GRHVQRWJRURXQGGRHVQRWFLUFOHURXQGFRQVFLRXVQHVV>@ +HQRWJRLQJURXQGDQGQRWFLUFOLQJURXQGPDWHULDOLW\>@ QRWJRLQJURXQGDQGQRWFLUFOLQJURXQGIHHOLQJ>@ QRWJRLQJURXQGDQGQRWFLUFOLQJURXQGSHUFHSWLRQ>@ QRWJRLQJURXQGDQGQRWFLUFOLQJURXQGIRUPDWLRQV>@ QRWJRLQJURXQGDQGQRWFLUFOLQJURXQGFRQVFLRXVQHVV>@ KHLVUHOHDVHGIURPPDWHULDOLW\>@ KHLVUHOHDVHGIURPIHHOLQJ

>@ KHLVUHOHDVHGIURPSHUFHSWLRQ>@ KHLVUHOHDVHGIURPIRUPDWLRQV

)RUDQDQDO\VLVRIIDLWKVDGGKVHH)DLWKS


38/416

, 7 K H & O R J % R X Q G 6 X W W D

>@ KHLVUHOHDVHGIURPFRQVFLRXVQHVVKHLVUHOHDVHGIURPELUWKIURPDJHLQJGHDWKIURPVRUURZIURPODPHQWDWLRQIURP

SDLQIURPGLVSOHDVXUHDQGIURPGHVSDLU

+HLVUHOHDVHGIURPVXIIHULQJ,GHFODUH

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

:KDWGRHVRQHQHHGWRGRWREHFRPHDQHGXFDWHG1REOH'LVFLSOHWREHUHOHDVHGIURPVXIIHULQJLQWKLVZD\":HVKDOOGLVFXVVWKDWODWHU/HWXVILUVWGLVFXVVWKHVHFRQG*DGGXOD%DGGKDVXWWD

6HH7KH%XGGKDVH[SODQDWLRQDWWKHHQGRIWKHVHFRQG *DGGXOD%DGGKDVXWWDVHH'RQH,V:KDW1HHGVWR%H'RQHSDQGWKHYHUVHS7KLVLVGLVFXVVHGDW7KH8QZRUNLQJRI.DPPDS II


39/416


(1'127(6&+$37(5,6877$5()(5(1&(6(7&

7KHFRPPHQWDU\WR'LL0DK6DWL3DKQD6XWWD7KH*UHDW0LQGIXOQHVV)RXQGDWLRQ6XWWDH[SODLQVWKLVZLWKDYHUVH:KDWRQHVHHVWKDWLVQRWVHHQ:KDWLVVHHQRQHGRHVQRWVHH1RWVHHLQJERXQGLVWKHIRRO$QGEHLQJERXQGKHLVQRWUHOHDVHG7KH%XGGKDH[SODLQVLWLQIRUH[DPSOH6,,,L 9LEKDJD6XWWD7KH$QDO\VLV6XWWD$QGZKDWEKLNNKXVLVLJQRUDQFH">@1RQNQRZOHGJHRIVXIIHULQJ>@RIWKHRULJLQRI

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xxD6XWWD7KH%HJLQQLQJV.QRZOHGJH6XWWD,Q0,LLL0DK+DWWKL3DGRSDPD6XWWD7KH*UHDW(OHSKDQWV)RRWSULQW6XWWDWKH9HQHUDEOH6ULSXWWDPHQWLRQVWKHGHVWUXFWLRQRIYLOODJHVWRZQVFLWLHVUHJLRQVDQGFRXQWULHVE\WKHZDWHUILUHDQGZLQGHOHPHQWV7KHGHWDLOVDUHQRWIURP7KH&ORJ%RXQG6XWWDEXWIURP$9,,YLL 6DWWD6UL\D6XWWD

7KH6HYHQ6XQV6XWWDZKHUH7KH%XGGKDJLYHVDGHWDLOHGH[SODQDWLRQRIWKHZRUOGV\VWHPVGHVWUXFWLRQE\ILUH$OVRLQIRUH[DPSOH'L6PDxxD3KDOD6XWWD7KH$VFHWLFLVP)UXLW6XWWD7KH%XGGKDH[SODLQVKRZWKHEKLNNKXGHYHORSVWKHGLUHFWNQRZOHGJHDEKLxxWKDWHQDEOHVKLPWRVHHSDVWGHVWUXFWLRQVFRQWUDFWLRQVDQGUHFRQVWUXFWLRQVH[SDQVLRQVRIZRUOGV\VWHPV+HGLUHFWVKHLQFOLQHVKLVPLQGWRWKHNQRZOHGJHRIUHFROOHFWLRQRISDVWOLIH+HUHFROOHFWVKLVPDQLIROGSDVWOLIHWKDWLVWRVD\RQHELUWKWZRELUWKVWKUHHELUWKVIRXUELUWKVILYHELUWKVWHQELUWKVWZHQW\ELUWKVWKLUW\ELUWKVIRUW\ELUWKVILIW\ELUWKVDKXQGUHGELUWKVDWKRXVDQGELUWKVDKXQGUHGWKRXVDQGELUWKVPDQ\FRQWUDFWLRQDHRQVPDQ\H[SDQVLRQDHRQVPDQ\FRQWUDFWLRQH[SDQVLRQDHRQV'HYHORSPHQWRIWKLVNQRZOHGJHDQGZKDWRQHVHHVLVGLVFXVVHGLQ9V0[LLL3XEEH1LYVQXVVDWLfD.DWK'LVFXVVLRQRIWKH3DVW$ERGHV5HFROOHFWLRQ.QRZOHGJH33[LLLDQG9V07ZLWKUHIHUHQFHWR7KH6HYHQ6XQV6XWWDDVZHOODVRWKHUGHWDLOV,QHJ'L%UDKPD-OD6XWWD7KH6XSUHPH1HW6XWWD7KH%XGGKDH[SODLQVWKDWDWWKHGHVWUXFWLRQRIWKHZRUOGV\VWHPPRVWEHLQJVDUHUHERUQLQWKHZRUOGRIUHIXOJHQWGHYDV

EKDVVDUDGHYZKLFKLVWKH%UDKPDZRUOGWKDWFRUUHVSRQGVWRWKHVHFRQGMKQD7KH%XGGKDH[SODLQVLWLQ$9,,YLL 6DWWD6UL\D6XWWD7KH6HYHQ6XQV6XWWD)RUPDQ\\HDUVIRUPDQ\KXQGUHG\HDUVIRUPDQ\WKRXVDQG\HDUVIRUPDQ\KXQGUHGWKRXVDQG\HDUVWKHUHLVQRUDLQ


40/416

, 7 K H & O R J % R X Q G 6 X W W D

,Q0,,,L3Dx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

TXLUHDQGDVNTXHVWLRQVRIWKHPWKXV+RZLVWKLV9HQHUDEOH6LU":KDWLVWKHPHDQLQJRIWKLV"7KRVHYHQHUDEOHRQHVWKHXQUHYHDOHG>WKH\@GRQRWUHYHDOWKHXQFOHDU>WKH\@GRQRWPDNHFOHDUWKHPDQ\GRXEWEDVHGWKLQJVWKHGRXEW>WKH\@GRQRWGLVSHO,QIRUH[DPSOH69;,,YLL 3Dxx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

The Workings of Kamma(2nd Rev)

Documents