THE SAUDI EXISTING BUILDING CODE

SBC 901 - CC

Code & Commentaries

2018
 7+(6$8',(;,67,1*%8,/',1*&2'(
&RGHDQG&RPPHQWDU\

6%&&&
Key List of the Saudi Codes: Designations and brief titles
Title Code Req.1 Code & Com.2 Arabic Prov. 3
The General Building Code SBC 201-CR SBC 201-CC SBC 201-AR
Structural – Loading and Forces SBC 301-CR SBC 301-CC SBC 301-AR
Structural – Construction SBC 302- CR SBC 302-AR
Structural – Soil and Foundations SBC 303- CR SBC 303-CC SBC 303-AR
Structural – Concrete Structures SBC 304- CR SBC 304-CC SBC 304-AR
Structural – Masonry Structures SBC 305- CR SBC 305-CC SBC 305-AR
Structural – Steel Structures SBC 306-CR SBC 306-CC SBC 306-AR
Electrical Code SBC 401- CR SBC 401-AR
Mechanical Code SBC 501-CR SBC 501-CC SBC 501-AR
Energy Conservation- Nonresidential SBC 601- CR SBC 601- CC SBC 601- AR
Energy Conservation-Residential SBC 602- CR SBC 602- CC SBC 602- AR
Plumbing Code SBC 701- CR SBC 701-CC SBC 701-AR
Private sewage Code SBC 702- CR SBC 702-AR
Fire Code SBC 801- CR SBC 801-CC SBC 801-AR
Existing Buildings Code SBC 901- CR SBC 901-CC SBC 901-AR
Green Construction Code SBC 1001- CR SBC 1001-CC SBC 1001-AR
Residential Building Code-V1 SBC 1101- CR SBC 1101-CC SBC 1101-AR
Arch. Planning and Structural Reqs.
Residential Building Code-V2 SBC 1102- CR SBC 1102-CC SBC 1102-AR
MEP, Gas and Energy Requirements
 &5&RGH5HTXLUHPHQWVZLWKRXW&RPPHQWDU\
 &&&RGH5HTXLUHPHQWVZLWK&RPPHQWDU\
 $5$UDELF&RGH3URYLVLRQV

6%&&& L

 7+(6$8',(;,67,1*%8,/',1*&2'(
&RGHDQG&RPPHQWDU\


6%&&&

COPYRIGHT © 2018
by
The Saudi Building Code National Committee (SBCNC)
(GLWLRQ

$// 5,*+76 5(6(59(' $OO LQWHOOHFWXDO SURSHUW\ ULJKWV RI WKLV 6DXGL &RGH DUH RZQHG E\ WKH 1DWLRQDO
&RPPLWWHHRI6DXGL%XLOGLQJ&RGHDVSHUWKH6DXGLODZVRIWKHLQWHOOHFWXDOSURSHUW\1RSDUWRIWKLVFRGHPD\
EHUHSURGXFHGGLVWULEXWHGRUOHDVHGLQDQ\IRUPRUE\DQ\PHDQVLQFOXGLQJEXWQRWOLPLWHGWRSXEOLVKLQJRQ
FORXGVLWHVFRPSXWHUQHWZRUNVRUDQ\HOHFWURQLFPHDQVRIFRPPXQLFDWLRQZLWKRXWSULRUZULWWHQSHUPLVVLRQ
IURPWKH1DWLRQDO&RPPLWWHHRIWKH6DXGL%XLOGLQJ&RGH7KHSXUFKDVHRIDQHOHFWURQLFRUDSDSHUFRS\GRHV
QRWH[HPSWWKHLQGLYLGXDORUHQWLW\IURPFRPSO\LQJZLWKWKHDERYHOLPLWDWLRQV

6%&&& L

 

7+(7(&+1,&$/&200,77((
6%&&&
7+(6$8',(;,67,1*
%8,/',1*&2'(
&RGHDQG&RPPHQWDU\
 'U:DOHHG+.KXVKHIDWL &KDLUPDQ
 3URI$PU:6DGHN 0HPEHU
 'U0RKDPPHG+6ZHOODP 0HPEHU
 'U$KPHG0$ONKDUG 0HPEHU
 'U.KDOLG0:D]LUD 0HPEHU
  3URI7DUHN+$OPXVDOODP 0HPEHU
7+(6$8',%8,/',1*&2'(1$7,21$/  'U+XVDLQ$EEDV 0HPEHU
&200,77((6%&1&  'U$UHI$$EDGHO 0HPEHU
5(9,(:&200,77((
 +('U6DDG2$O.DVDEL &KDLUPDQ
 'U1DLI0$ODEEDGL 9LFH&KDLUPDQ  'U1DLI0$ODEEDGL &KDLUPDQ
 'U$EGXOUDKPDQ*$O(QL]L 0HPEHU  'U.KDOHG0$OMDPPD] 0HPEHU
 (QJU6DHHG..DGDVDK 0HPEHU  'U$EGXOUDKPDQ*$OHQL]L 0HPEHU
 'U+DVVDQ6$OKD]PL 0HPEHU  (QJ6DHHG..DGDVDK 0HPEHU
 (QJU%DGU6$/PDD\RRI 0HPEHU  (QJ7DZLILN,$OMUD\HG 0HPEHU
 (QJU)D\H]$$OJKDPGL 0HPEHU
 (QJU0RKDPPHG$$OZDLO\ 0HPEHU 5(9,(:(56
 'U%DQGDU6$ONDKODQ 0HPEHU 'U0RKDPPDG$+DVVDQDLQ 5&-<WHDP
 (QJU$KPDG1+DVVDQ 0HPEHU
 (QJU$EGXOQDVVHU6$ODEGXOODWLI 0HPEHU (',725,$/&200,77((
 'U+DQL0=DKUDQ 0HPEHU  3URI$KPHG%6KXUDLP &KDLUPDQ
 (QJU.KDOLID6$O\DK\DL 0HPEHU  'U$EGDOODK0$O6KHKUL 0HPEHU
 'U.KDOHG0$OMDPPD] 0HPEHU  (QJ7DZLILN,$OMUD\HG 0HPEHU
 'U,EUDKLP2+DELEDOODK 0HPEHU
 'U6DHHG$$VLUL 0HPEHU (',725,$/6833257
 'U$EGDOODK0$O6KHKUL 0HPEHU 'U)DKHG$OUVKRXGL 'U)DKLG$VODP
 (QJU6DDG66KXDLO 0HPEHU 'U<DVVLU0$EEDV 'U0RKDPPHG$
2WKPDQ
7+($'9,625<&200,77((
 'U.KDOHG0$OMDPPD] &KDLUPDQ
 (QJ.KDOLID6$O\DK\DL 9LFH&KDLUPDQ
 'U+DQL0=DKUDQ 0HPEHU
 3URI$OL$6KDVK 0HPEHU
 3URI$KPHG%6KXUDLP 0HPEHU
 'U.KDOLG0:D]LUD 0HPEHU
 'U$EGXOKDPHHG$$O2KDO\ 0HPEHU
 'U+DP]D$*KXOPDQ 0HPEHU
 (QJU+DNDP$$O$TLO\ 0HPEHU
 3URI6DOHK)0DJUDP 0HPEHU
 (QJU1DVVHU0$O'RVVDUL 0HPEHU
 'U:DOHHG+.KXVKHIDWL 0HPEHU
 'U:DOHHG0$EDQRPL 0HPEHU
 'U)DKDG6$O/DKDLP 0HPEHU

6%&&& LL

 35()$&(

35()$&(
7KH6DXGL([LVWLQJ%XLOGLQJ&RGH6%&SURYLGHVDOWHUQDWLYHDSSURDFKHVWRUHSDLUDOWHUDWLRQDQG
DGGLWLRQVWRH[LVWLQJEXLOGLQJV6%&SURYLGHVWKUHHPDLQRSWLRQVIRUDGHVLJQHULQGHDOLQJZLWK
DOWHUDWLRQVRIH[LVWLQJEXLOGLQJV237,21:RUNIRUDOWHUDWLRQUHSDLUFKDQJHRIRFFXSDQF\DGGLWLRQ
RUUHORFDWLRQRIDOOH[LVWLQJEXLOGLQJVVKDOOEHGRQHLQDFFRUGDQFHZLWKWKH3UHVFULSWLYH&RPSOLDQFH
0HWKRGJLYHQLQ&KDSWHU237,21:RUNIRUDOWHUDWLRQUHSDLUFKDQJHRIRFFXSDQF\DGGLWLRQRU
UHORFDWLRQ RI DOO H[LVWLQJ EXLOGLQJV VKDOO EH GRQH LQ DFFRUGDQFH ZLWK WKH :RUN $UHD &RPSOLDQFH
0HWKRGJLYHQLQ&KDSWHUVWKURXJK237,21:RUNIRUDOWHUDWLRQUHSDLUFKDQJHRIRFFXSDQF\
DGGLWLRQ RU UHORFDWLRQ RI DOO H[LVWLQJ EXLOGLQJV VKDOO EH GRQH LQ DFFRUGDQFH ZLWK WKH 3HUIRUPDQFH
&RPSOLDQFH0HWKRGJLYHQLQ&KDSWHU
,QWHUQDWLRQDO([LVWLQJ%XLOGLQJ&RGH,(%&SXEOLVKHGE\WKH,QWHUQDWLRQDO&RGH&RXQFLO
,&&LVWKHEDVHFRGHLQWKHGHYHORSPHQWRIWKLV&RGH7KH,QWHUQDWLRQDO&RGH&RXQFLO,&&JUDQWV
SHUPLVVLRQWRWKH6DXGL%XLOGLQJ&RGH1DWLRQDO&RPPLWWHH6%&1&WRLQFOXGHDOORUDQ\SRUWLRQRI
PDWHULDOIURPWKH,&&FRGHVDQGVWDQGDUGVLQWKH6%&DQG,&&LVQRWUHVSRQVLEOHRUOLDEOHLQDQ\ZD\
WR6%&1&RUWRDQ\RWKHUSDUW\RUHQWLW\IRUDQ\PRGLILFDWLRQVRUFKDQJHVWKDW6%&1&PDNHVWRVXFK
GRFXPHQWV
7KHZULWLQJSURFHVVRI6%&IROORZHGWKHPHWKRGRORJ\DSSURYHGE\WKH6DXGL%XLOGLQJ&RGH
1DWLRQDO&RPPLWWHH0DQ\FKDQJHVDQGPRGLILFDWLRQVZHUHPDGHLQLWVEDVHFRGH,(%&WR
PHHWWKHORFDOZHDWKHUPDWHULDOVFRQVWUXFWLRQDQGUHJXODWRU\UHTXLUHPHQWV
7KHFRPPLWWHHVUHVSRQVLEOHIRU6%&&RGHDQG&RPPHQWDU\KDYHWDNHQDOOSUHFDXWLRQVWRDYRLG
DPELJXLWLHVRPLVVLRQVDQGHUURUVLQWKHGRFXPHQW'HVSLWHWKHVHHIIRUWVWKHXVHUVRI6%&PD\
ILQG LQIRUPDWLRQ RU UHTXLUHPHQWV WKDW PD\ EH VXEMHFW WR PRUH WKDQ RQH LQWHUSUHWDWLRQ RU PD\ EH
LQFRPSOHWH8VHUVZKRKDYHVXJJHVWLRQVIRUWKHLPSURYHPHQWRI6%&GRFXPHQWVDUHUHTXHVWHGWRZULWH
WKHLUVXJJHVWLRQVWR6%&1&
,W LV D FRPPRQ DVVXPSWLRQ WKDW HQJLQHHULQJ NQRZOHGJH LV D SUHUHTXLVLWH LQ XQGHUVWDQGLQJ FRGH
SURYLVLRQV DQG UHTXLUHPHQWV WKXV WKH FRGH LV RULHQWHG WRZDUGV LQGLYLGXDOV ZKR SRVVHVV WKH
EDFNJURXQG NQRZOHGJH WR HYDOXDWH WKH VLJQLILFDQFH DQG OLPLWDWLRQV RI LWV FRQWHQW DQG
UHFRPPHQGDWLRQV7KH\VKDOOEHDEOHWRGHWHUPLQHWKHDSSOLFDELOLW\RIDOOUHJXODWRU\OLPLWDWLRQVEHIRUH
DSSO\LQJWKH&RGHDQGPXVWFRPSO\ZLWKDOODSSOLFDEOHODZVDQGUHJXODWLRQV
7KH&RPPHQWDU\SURYLGHVWKHWHFKQLFDO EDFNJURXQGDQGLQWHQW EHKLQG YDULRXVUHTXLUHPHQWV RIWKH
&RGH&RPPHQWDULHVKRZHYHUDUHDGYLVRU\RQO\DQGVKDOOQRWEHFRQVLGHUHGDVPDQGDWRU\SDUWRIWKH
FRGH $OO &RPPHQWDULHV DUH LQGHQWHG EHORZ WKH FRGH WH[W DQG EHJLQ ZLWK WKH V\PERO  7KH
EDFNJURXQGFRORURIWKH&RPPHQWDU\LVDOVRGLIIHUHQWIURPWKHZKLWHEDFNJURXQGRIWKH&RGHWH[W

6%&&& LLL

 35()$&(

7KHUHTXLUHPHQWVUHODWHGWRDGPLQLVWUDWLRQDQGHQIRUFHPHQWRIWKLV&RGHDUHDGYLVRU\RQO\6%&1&
DQG JRYHUQPHQWDO RUJDQL]DWLRQV LQ FKDUJH RI HQIRUFLQJ WKLV &RGH SRVVHVV WKH DXWKRULW\ WR PRGLI\
WKHVHDGPLQLVWUDWLYHUHTXLUHPHQWV

6%&&& LY

 7$%/(2)&217(176

7$%/(2)&217(176
CHAPTER 1 —SCOPE AND ADMINISTRATION ................................................................................................................ 1
SECTION 101 GENERAL ......................................................................................................................................................... 2
SECTION 102 APPLICABILITY ................................................................................................................................................. 3
SECTION 103 BUILDING OFFICIAL ......................................................................................................................................... 4
SECTION 104 DUTIES AND POWERS OF BUILDING OFFICIAL ................................................................................................ 5
SECTION 105 PERMITS ........................................................................................................................................................ 10
SECTION 106 CONSTRUCTION DOCUMENTS ...................................................................................................................... 14
SECTION 107 TEMPORARY STRUCTURES AND USES ........................................................................................................... 18
SECTION 108 FEES 18
SECTION 109 INSPECTIONS ................................................................................................................................................. 20
SECTION 110 CERTIFICATE OF OCCUPANCY ....................................................................................................................... 22
SECTION 111 SERVICE UTILITIES ......................................................................................................................................... 23
SECTION 112 BOARD OF APPEALS ...................................................................................................................................... 24
SECTION 113 VIOLATIONS .................................................................................................................................................. 24
SECTION 114 STOP WORK ORDER ...................................................................................................................................... 25
SECTION 115 UNSAFE BUILDINGS AND EQUIPMENT.......................................................................................................... 25
SECTION 116 EMERGENCY MEASURES ............................................................................................................................... 26
SECTION 117 DEMOLITION ................................................................................................................................................. 27
—DEFINITIONS ..........................................................................................................................................31
SECTION 201 GENERAL ....................................................................................................................................................... 31
SECTION 202 GENERAL DEFINITIONS .................................................................................................................................. 31
—PROVISIONS FOR ALL COMPLIANCE METHODS ......................................................................................38
SECTION 301 ADMINISTRATION ......................................................................................................................................... 39
SECTION 302 GENERAL PROVISIONS .................................................................................................................................. 43
—PRESCRIPTIVE COMPLIANCE METHOD ...................................................................................................52
SECTION 401 GENERAL ....................................................................................................................................................... 52
SECTION 402 ADDITIONS .................................................................................................................................................... 53
SECTION 403 ALTERATIONS ................................................................................................................................................ 56
SECTION 404 REPAIRS ......................................................................................................................................................... 61
SECTION 405 FIRE ESCAPES ................................................................................................................................................ 64
SECTION 406 GLASS REPLACEMENT AND REPLACEMENT WINDOWS ................................................................................ 66
SECTION 407 CHANGE OF OCCUPANCY .............................................................................................................................. 67
SECTION 408 HISTORIC BUILDINGS..................................................................................................................................... 69
SECTION 409 MOVED STRUCTURES .................................................................................................................................... 69
SECTION 410 ACCESSIBILITY FOR EXISTING BUILDINGS ...................................................................................................... 69
—CLASSIFICATION OF WORK .....................................................................................................................85
SECTION 501 GENERAL ....................................................................................................................................................... 85
SECTION 502 REPAIRS ......................................................................................................................................................... 85
SECTION 503 ALTERATION—LEVEL 1 .................................................................................................................................. 86
SECTION 504 ALTERATION—LEVEL 2 .................................................................................................................................. 86
SECTION 505 ALTERATION—LEVEL 3 .................................................................................................................................. 86
SECTION 506 CHANGE OF OCCUPANCY .............................................................................................................................. 86
SECTION 507 ADDITIONS .................................................................................................................................................... 87
SECTION 508 HISTORIC BUILDINGS..................................................................................................................................... 87
SECTION 509 RELOCATED BUILDINGS................................................................................................................................. 87
—REPAIRS .................................................................................................................................................89
SECTION 601 GENERAL ....................................................................................................................................................... 89
SECTION 602 BUILDING ELEMENTS AND MATERIALS ......................................................................................................... 89

6%&&& Y

 7$%/(2)&217(176

SECTION 603 FIRE PROTECTION ......................................................................................................................................... 90

SECTION 604 MEANS OF EGRESS ........................................................................................................................................ 90
SECTION 605 ACCESSIBILITY ............................................................................................................................................... 90
SECTION 606 STRUCTURAL ................................................................................................................................................. 91
SECTION 607 ELECTRICAL ................................................................................................................................................... 93
SECTION 608 MECHANICAL ................................................................................................................................................ 95
SECTION 609 PLUMBING .................................................................................................................................................... 95
—ALTERATIONS—LEVEL 1 .........................................................................................................................98
SECTION 701 GENERAL ....................................................................................................................................................... 98
SECTION 702 BUILDING ELEMENTS AND MATERIALS ......................................................................................................... 99
SECTION 703 FIRE PROTECTION ....................................................................................................................................... 101
SECTION 704 MEANS OF EGRESS ...................................................................................................................................... 101
SECTION 705 ACCESSIBILITY ............................................................................................................................................. 101
SECTION 706 REROOFING ................................................................................................................................................. 107
SECTION 707 STRUCTURAL ............................................................................................................................................... 109
SECTION 708 ENERGY CONSERVATION ............................................................................................................................ 111
—ALTERATIONS—LEVEL 2 .......................................................................................................................116
SECTION 801 GENERAL ..................................................................................................................................................... 116
SECTION 802 SPECIAL USE AND OCCUPANCY ................................................................................................................... 117
SECTION 803 BUILDING ELEMENTS AND MATERIALS ....................................................................................................... 117
SECTION 804 FIRE PROTECTION ....................................................................................................................................... 122
SECTION 805 MEANS OF EGRESS ...................................................................................................................................... 128
SECTION 806 ACCESSIBILITY ............................................................................................................................................. 139
SECTION 807 STRUCTURAL ............................................................................................................................................... 139
SECTION 808 ELECTRICAL ................................................................................................................................................. 141
SECTION 809 MECHANICAL .............................................................................................................................................. 142
SECTION 810 PLUMBING .................................................................................................................................................. 143
SECTION 811 ENERGY CONSERVATION ............................................................................................................................ 144
—ALTERATIONS—LEVEL 3 .......................................................................................................................151
SECTION 901 GENERAL ..................................................................................................................................................... 151
SECTION 902 SPECIAL USE AND OCCUPANCY ................................................................................................................... 152
SECTION 903 BUILDING ELEMENTS AND MATERIALS ....................................................................................................... 153
SECTION 904 FIRE PROTECTION ....................................................................................................................................... 154
SECTION 905 MEANS OF EGRESS ...................................................................................................................................... 156
SECTION 906 ACCESSIBILITY ............................................................................................................................................. 156
SECTION 907 STRUCTURAL ............................................................................................................................................... 157
SECTION 908 ENERGY CONSERVATION ............................................................................................................................ 159
—CHANGE OF OCCUPANCY ...................................................................................................................163
SECTION 1001 GENERAL ................................................................................................................................................... 163
SECTION 1002 SPECIAL USE AND OCCUPANCY ................................................................................................................. 164
SECTION 1003 BUILDING ELEMENTS AND MATERIALS ..................................................................................................... 165
SECTION 1004 FIRE PROTECTION ..................................................................................................................................... 165
SECTION 1005 MEANS OF EGRESS .................................................................................................................................... 165
SECTION 1006 ACCESSIBILITY ........................................................................................................................................... 165
SECTION 1007 STRUCTURAL ............................................................................................................................................. 166
SECTION 1008 ELECTRICAL ............................................................................................................................................... 168
SECTION 1009 MECHANICAL ............................................................................................................................................ 169
SECTION 1010 PLUMBING ................................................................................................................................................ 169
SECTION 1011 OTHER REQUIREMENTS ............................................................................................................................ 170
SECTION 1012 CHANGE OF OCCUPANCY CLASSIFICATION ............................................................................................... 170
—ADDITIONS .........................................................................................................................................182
SECTION 1101 GENERAL ................................................................................................................................................... 182

6%&&& YL

 7$%/(2)&217(176

SECTION 1102 HEIGHTS AND AREAS ................................................................................................................................ 182

SECTION 1103 STRUCTURAL ............................................................................................................................................. 183
SECTION 1104 SMOKE ALARMS IN OCCUPANCY GROUPS R AND I-1 ............................................................................... 186
SECTION 1105 ACCESSIBILITY ........................................................................................................................................... 186
SECTION 1106 ENERGY CONSERVATION .......................................................................................................................... 187
—HISTORIC BUILDINGS ..........................................................................................................................190
SECTION 1201 GENERAL ................................................................................................................................................... 190
SECTION 1202 REPAIRS ..................................................................................................................................................... 191
SECTION 1203 FIRE SAFETY ............................................................................................................................................... 192
SECTION 1204 ALTERATIONS ............................................................................................................................................ 194
SECTION 1205 CHANGE OF OCCUPANCY .......................................................................................................................... 195
SECTION 1206 STRUCTURAL ............................................................................................................................................. 197
—RELOCATED OR MOVED BUILDINGS ...................................................................................................201
SECTION 1301 GENERAL ................................................................................................................................................... 201
SECTION 1302 REQUIREMENTS ........................................................................................................................................ 201
—PERFORMANCE COMPLIANCE METHODS ...........................................................................................205
SECTION 1401 GENERAL ................................................................................................................................................... 205
—CONSTRUCTION SAFEGUARDS ...........................................................................................................253
SECTION 1501 GENERAL ................................................................................................................................................... 253
SECTION 1502 PROTECTION OF ADJOINING PROPERTY ................................................................................................... 256
SECTION 1503 TEMPORARY USE OF STREETS, ALLEYS AND PUBLIC PROPERTY ............................................................... 257
SECTION 1504 FIRE EXTINGUISHERS ................................................................................................................................. 257
SECTION 1505 EXITS 257
SECTION 1506 STANDPIPE SYSTEMS ................................................................................................................................. 258
SECTION 1507 AUTOMATIC SPRINKLER SYSTEM .............................................................................................................. 258
SECTION 1508 ACCESSIBILITY ........................................................................................................................................... 259
SECTION 1509 WATER SUPPLY FOR FIRE PROTECTION .................................................................................................... 259
—REFERENCED STANDARDS ..................................................................................................................261
CHAPTER A1 —SEISMIC STRENGTHENING PROVISIONS FOR UNREINFORCED MASONRY BEARING WALL BUILDINGS
..................................................................................................................................................................................265
PURPOSE ................................................................................................................................................... 265
SCOPE ....................................................................................................................................................... 266
DEFINITIONS ............................................................................................................................................. 266
SYMBOLS AND NOTATIONS ...................................................................................................................... 268
GENERAL REQUIREMENTS ........................................................................................................................ 269
MATERIALS REQUIREMENTS..................................................................................................................... 270
QUALITY CONTROL ................................................................................................................................... 275
DESIGN STRENGTHS .................................................................................................................................. 276
ANALYSIS AND DESIGN PROCEDURE ........................................................................................................ 277
GENERAL PROCEDURE .............................................................................................................................. 278
SPECIAL PROCEDURE ................................................................................................................................ 279
ANALYSIS AND DESIGN ............................................................................................................................. 286
DETAILED SYSTEM DESIGN REQUIREMENTS ............................................................................................ 288
WALLS OF UNBURNED CLAY, ADOBE OR STONE MASONRY .................................................................... 291
CHAPTER A2 —EARTHQUAKE HAZARD REDUCTION IN EXISTING REINFORCED CONCRETE AND REINFORCED MASONRY
WALL BUILDINGS WITH FLEXIBLE DIAPHRAGMS ........................................................................................................300
PURPOSE ................................................................................................................................................... 300
SCOPE ....................................................................................................................................................... 301
DEFINITIONS ............................................................................................................................................. 302
SYMBOLS AND NOTATIONS ...................................................................................................................... 302

6%&&& YLL

 7$%/(2)&217(176

GENERAL REQUIREMENTS ........................................................................................................................ 302

ANALYSIS AND DESIGN ............................................................................................................................. 303
MATERIALS OF CONSTRUCTION ............................................................................................................... 309
CHAPTER A3 —PRESCRIPTIVE PROVISIONS FOR SEISMIC STRENGTHENING OF CRIPPLE WALLS AND SILL PLATE
ANCHORAGE OF LIGHT, WOOD-FRAME RESIDENTIAL BUILDINGS ..............................................................................311
CHAPTER A4 —EARTHQUAKE RISK REDUCTION IN WOOD-FRAMED RESIDENTIAL BUILDINGS WITH SOFT, WEAK OR
OPEN FRONT WALLS ..................................................................................................................................................312
CHAPTER A5 —EARTHQUAKE HAZARD REDUCTION IN EXISTING CONCRETE BUILDINGS ...........................................313
PURPOSE ................................................................................................................................................... 314
SCOPE ....................................................................................................................................................... 314
GENERAL REQUIREMENTS ........................................................................................................................ 315
SITE GROUND MOTION............................................................................................................................. 315
TIER 1 ANALYSIS PROCEDURE ................................................................................................................... 316
TIER 2 ANALYSIS PROCEDURE ................................................................................................................... 316
TIER 3 ANALYSIS PROCEDURE ................................................................................................................... 319
CHAPTER A6 —REFERENCED STANDARDS ..................................................................................................................323
$33(1',;% —SUPPLEMENTARY ACCESSIBILITY REQUIREMENTS FOR EXISTING BUILDINGS AND FACILITIES ........326
SECTION B101 QUALIFIED HISTORICAL BUILDINGS AND FACILITIES ................................................................................ 326
SECTION B102 FIXED TRANSPORTATION FACILITIES AND STATIONS ............................................................................... 327
SECTION B103 DWELLING UNITS AND SLEEPING UNITS ................................................................................................... 328
SECTION B104 REFERENCED STANDARDS ........................................................................................................................ 328
$33(1',;& —GUIDELINES FOR THE WIND RETROFIT OF EXISTING .......................................................................330
CHAPTER C1 —GABLE END RETROFIT FOR HIGH-WIND AREAS ..................................................................................331
CHAPTER C2 —GABLE END RETROFIT FOR HIGH-WIND AREAS ..................................................................................332


6%&&& YLLL

 &+$37(5²6&23($1'$'0,1,675$7,21

&+$37(5²6&23($1'$'0,1,675$7,21

DGGUHVV VWUXFWXUHV LQ GDQJHU RI FROODSVH

™ *HQHUDO&RPPHQWV
6HFWLRQ  DXWKRUL]HV WKH EXLOGLQJ RIILFLDO WR
™ 7KLVFKDSWHUFRQWDLQVSURYLVLRQVIRUWKHVFRSH
KDYH VWUXFWXUHV GHPROLVKHG WKDW DUH
DQG DSSOLFDWLRQ 3DUW  DQG WKH HQIRUFHPHQW
GDQJHURXVXQVDIHDQGLQVDQLWDU\RURWKHUZLVH
DQG DGPLQLVWUDWLRQ 3DUW  RI VXEVHTXHQW
XQILW IRU KXPDQ KDELWDWLRQ RU RFFXSDQF\
UHTXLUHPHQWV RI WKH FRGH ,Q DGGLWLRQ WR
&KDSWHULVODUJHO\FRQFHUQHGZLWKPDLQWDLQLQJ
HVWDEOLVKLQJWKHVFRSHRIWKHFRGH &KDSWHU 
³GXH SURFHVV RI ODZ´ LQ HQIRUFLQJ WKH EXLOGLQJ
LGHQWLILHVZKLFKEXLOGLQJVDQGVWUXFWXUHVFRPH
SHUIRUPDQFH FULWHULD FRQWDLQHG LQ WKH ERG\ RI
XQGHU LWV SXUYLHZ 3DUW  6FRSH DQG
WKH FRGH 2QO\ WKURXJK FDUHIXO REVHUYDWLRQ RI
$SSOLFDWLRQ LQFOXGHV 6HFWLRQV  DQG 
WKH DGPLQLVWUDWLYH SURYLVLRQV FDQ WKH EXLOGLQJ
6HFWLRQ  DGGUHVVHV WKH VFRSH RI WKH FRGH
RIILFLDO UHDVRQDEO\ KRSH WR GHPRQVWUDWH WKDW
DV LW DSSOLHV WR H[LVWLQJ VWUXFWXUHV XQGHUJRLQJ
³HTXDO SURWHFWLRQ XQGHU WKH ODZ´ KDV EHHQ
UHSDLUV DOWHUDWLRQV FKDQJH RI RFFXSDQF\ DQG
SURYLGHG:KLOHLWLVJHQHUDOO\DVVXPHGWKDWWKH
DGGLWLRQVRUUHORFDWLRQ6HFWLRQHVWDEOLVKHV
DGPLQLVWUDWLRQ DQG HQIRUFHPHQW VHFWLRQ RI D
WKH DSSOLFDELOLW\ RI WKH FRGH DQG DGGUHVVHV
FRGHLVJHDUHGWRZDUGDEXLOGLQJRIILFLDOWKLVLV
H[LVWLQJ VWUXFWXUHV 3DUW  $GPLQLVWUDWLRQ DQG
QRWHQWLUHO\WUXH7KHSURYLVLRQVDOVRHVWDEOLVK
(QIRUFHPHQW LQFOXGHV WKH EDODQFH RI WKH
WKH ULJKWV DQG SULYLOHJHV RI WKH GHVLJQ
SURYLVLRQV RI &KDSWHU  6HFWLRQ 
SURIHVVLRQDO FRQWUDFWRU DQG EXLOGLQJ RZQHU
HVWDEOLVKHV WKH PXQLFLSDOLW\ DXWKRULW\ DQG
7KHSRVLWLRQRIWKHEXLOGLQJRIILFLDOLVPHUHO\WR
GHWDLOVWKHDSSRLQWPHQWRIGLIIHUHQWPXQLFLSDOLW\
UHYLHZWKHSURSRVHGDQGFRPSOHWHGZRUNDQG
GHSDUWPHQWV SHUVRQQHO 6HFWLRQ  RXWOLQHV
WRGHWHUPLQHLIWKHFRQVWUXFWLRQFRQIRUPVWRWKH
WKH GXWLHV DQG DXWKRULW\ RI WKH EXLOGLQJ RIILFLDO
FRGHUHTXLUHPHQWV7KHGHVLJQSURIHVVLRQDOLV
ZLWKUHJDUGWRSHUPLWVLQVSHFWLRQVDQGULJKWRI
UHVSRQVLEOH IRU WKH GHVLJQ RI D VDIH VWUXFWXUH
HQWU\ ,W DOVR HVWDEOLVKHV WKH DXWKRULW\ RI WKH
7KH FRQWUDFWRU LV UHVSRQVLEOH IRU FRQVWUXFWLQJ
EXLOGLQJRIILFLDOWRDSSURYHDOWHUQDWLYHPDWHULDOV
WKHVWUXFWXUHLQFRQIRUPDQFHWRWKHSODQV
XVHGPDWHULDOVDQGPRGLILFDWLRQV6HFWLRQ
™ 'XULQJWKHFRXUVHRIFRQVWUXFWLRQWKHEXLOGLQJ
VWDWHV ZKHQ SHUPLWV DUH UHTXLUHG DQG
RIILFLDOUHYLHZVWKHDFWLYLW\WRDVFHUWDLQWKDWWKH
HVWDEOLVKHV WKH SURFHGXUHV IRU UHYLHZLQJ
VSLULW DQG LQWHQW RI WKH ODZ DUH EHLQJ PHW DQG
DSSOLFDWLRQV DQG LVVXLQJ SHUPLWV 6HFWLRQ 
WKDWWKHVDIHW\KHDOWKDQGZHOIDUHRIWKHSXEOLF
GHVFULEHVWKHLQIRUPDWLRQWKDWPXVWEHLQFOXGHG
ZLOO EH SURWHFWHG $V D SXEOLF VHUYDQW WKH
RQ WKH GRFXPHQWV VXEPLWWHG ZLWK WKH
EXLOGLQJ RIILFLDO HQIRUFHV WKH FRGH LQ DQ
DSSOLFDWLRQ6HFWLRQDXWKRUL]HVWKHEXLOGLQJ
XQELDVHG SURSHU PDQQHU (YHU\ LQGLYLGXDO LV
RIILFLDOWRLVVXHSHUPLWVIRUWHPSRUDU\VWUXFWXUHV
JXDUDQWHHG HTXDO HQIRUFHPHQW RI WKH
DQG XVHV 6HFWLRQ  HVWDEOLVKHV
SURYLVLRQV RI WKH FRGH )XUWKHU GHVLJQ
UHTXLUHPHQWV IRU D IHH VFKHGXOH 6HFWLRQ 
SURIHVVLRQDOVFRQWUDFWRUVDQGEXLOGLQJRZQHUV
LQFOXGHV WKH LQVSHFWLRQ GXWLHV RI WKH EXLOGLQJ
KDYH WKH ULJKW RI GXH SURFHVV IRU DQ\
RIILFLDO RU DQ LQVSHFWLRQ DJHQF\ WKDW KDV EHHQ
UHTXLUHPHQWLQWKHFRGH
DSSURYHGE\WKHEXLOGLQJRIILFLDO3URYLVLRQVIRU
™ 3XUSRVH
LVVXLQJFHUWLILFDWHVRIRFFXSDQF\DUHGHWDLOHGLQ
™ 7KHFRGHDVZLWKDQ\RWKHUFRGHLVLQWHQGHG
6HFWLRQ  6HFWLRQ  JLYHV WKH EXLOGLQJ
WR EH DGRSWHG DV D OHJDOO\ HQIRUFHDEOH
RIILFLDO WKH DXWKRULW\ WR DSSURYH XWLOLW\
GRFXPHQWWRVDIHJXDUGKHDOWKVDIHW\SURSHUW\
FRQQHFWLRQV6HFWLRQHVWDEOLVKHVWKHERDUG
DQGSXEOLFZHOIDUH$FRGHFDQQRWEHHIIHFWLYH
RI DSSHDOV DQG WKH FULWHULD IRU PDNLQJ
ZLWKRXW DGHTXDWH SURYLVLRQV IRU LWV
DSSOLFDWLRQV IRU DSSHDO $GPLQLVWUDWLYH
DGPLQLVWUDWLRQ DQG HQIRUFHPHQW 7KH EXLOGLQJ
SURYLVLRQV IRU YLRODWLRQV DUH DGGUHVVHG LQ
RIILFLDO FKDUJHG ZLWK WKH DGPLQLVWUDWLRQ DQG
6HFWLRQ  LQFOXGLQJ SURYLVLRQV IRU XQODZIXO
HQIRUFHPHQWRIEXLOGLQJUHJXODWLRQVKDVDJUHDW
DFWV YLRODWLRQ QRWLFHV SURVHFXWLRQ DQG
UHVSRQVLELOLW\DQGZLWKWKLVUHVSRQVLELOLW\FRPHV
SHQDOWLHV 6HFWLRQ  GHVFULEHV SURFHGXUHV
DXWKRULW\1RPDWWHUKRZGHWDLOHGWKHFRGHPD\
IRU VWRS ZRUN RUGHUV 6HFWLRQ  HVWDEOLVKHV
EH WKH EXLOGLQJ RIILFLDO PXVW WR VRPH H[WHQW
WKH FULWHULD IRU XQVDIH VWUXFWXUHV DQG
H[HUFLVHKLVRUKHURZQMXGJPHQWLQGHWHUPLQLQJ
HTXLSPHQWDQGWKHSURFHGXUHVWREHIROORZHG
FRGHFRPSOLDQFH7KH EXLOGLQJRIILFLDO KDVWKH
E\WKHEXLOGLQJRIILFLDOWRDEDWHVXFKFRQGLWLRQV
UHVSRQVLELOLW\ WR HVWDEOLVK WKDW WKH KRPHV LQ
DQG QRWLI\ WKH UHVSRQVLEOH SDUW\ 6HFWLRQ 
ZKLFKWKHFLWL]HQVRIWKHFRPPXQLW\UHVLGHDQG
GHVFULEHV WKH HPHUJHQF\ PHDVXUHV WKDW
WKHEXLOGLQJVLQZKLFKWKH\ZRUNDUHGHVLJQHG

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

DQG FRQVWUXFWHG WR EH VWUXFWXUDOO\ VWDEOH ZLWK  ,QWHQW7KHLQWHQWRIWKLVFRGHLVWRSURYLGH

DGHTXDWH PHDQV RI HJUHVV OLJKW DQG IOH[LELOLW\ WR SHUPLW WKH XVH RI DOWHUQDWLYH
YHQWLODWLRQ DQG WR SURYLGH D PLQLPXP DSSURDFKHVWR DFKLHYH FRPSOLDQFHZLWK PLQLPXP
DFFHSWDEOH OHYHO RI SURWHFWLRQ WR OLIH DQG UHTXLUHPHQWVWRVDIHJXDUGWKHSXEOLFKHDOWKVDIHW\
SURSHUW\IURPILUH
DQG ZHOIDUH LQVRIDU DV WKH\ DUH DIIHFWHG E\ WKH
™ $ ODUJH QXPEHU RI H[LVWLQJ EXLOGLQJV DQG
VWUXFWXUHV GR QRW FRPSO\ ZLWK WKH FXUUHQW UHSDLU DOWHUDWLRQ FKDQJH RI RFFXSDQF\ DGGLWLRQ
EXLOGLQJ FRGH UHTXLUHPHQWV IRU QHZ DQGUHORFDWLRQRIH[LVWLQJEXLOGLQJV
FRQVWUXFWLRQ$OWKRXJKPDQ\RIWKHVHEXLOGLQJV ™ 7KH FRGH LV LQWHQGHG WR VHW IRUWK UHJXODWLRQV
DUH SRWHQWLDOO\ VDOYDJHDEOH UHKDELOLWDWLRQ LV WKDWHVWDEOLVKWKHPLQLPXPDFFHSWDEOHOHYHOWR
RIWHQFRVWSURKLELWLYHEHFDXVHWKH\PD\QRWEH VDIHJXDUG SXEOLF KHDOWK VDIHW\ DQG ZHOIDUH
DEOHWRFRPSO\ZLWKDOOWKHUHTXLUHPHQWVIRUQHZ 7KHLQWHQWEHFRPHVLPSRUWDQWLQWKHDSSOLFDWLRQ
FRQVWUXFWLRQ$WWKHVDPHWLPHLWLVQHFHVVDU\ RIVHFWLRQVVXFKDV6HFWLRQVDQG
WR UHJXODWH FRQVWUXFWLRQ LQ H[LVWLQJ EXLOGLQJV  DV ZHOO DV DQ\ HQIRUFHPHQW RULHQWHG
WKDW XQGHUJR DGGLWLRQV DOWHUDWLRQV LQWHUSUHWLYHDFWLRQRUMXGJPHQW/LNHDQ\FRGH
UHQRYDWLRQV H[WHQVLYH UHSDLUV RU FKDQJH RI WKH ZULWWHQ WH[W LV VXEMHFW WR LQWHUSUHWDWLRQ
RFFXSDQF\ 6XFK DFWLYLW\ UHSUHVHQWV DQ ,QWHUSUHWDWLRQV VKRXOG QRW EH DIIHFWHG E\
RSSRUWXQLW\ WR HQVXUH WKDW QHZ FRQVWUXFWLRQ HFRQRPLFVRUWKHSRWHQWLDOLPSDFWRQDQ\SDUW\
FRPSOLHV ZLWK WKH FXUUHQW EXLOGLQJ FRGHV DQG 7KH RQO\ FRQVLGHUDWLRQV VKRXOG EH WKH
WKDW H[LVWLQJ FRQGLWLRQV DUH PDLQWDLQHG DW D SURWHFWLRQRISXEOLFKHDOWKVDIHW\DQGZHOIDUH
PLQLPXPWRWKHLUFXUUHQWOHYHORIFRPSOLDQFHRU
DUH LPSURYHG DV UHTXLUHG 7R DFFRPSOLVK WKLV  $SSOLFDELOLW\7KLVFRGHVKDOODSSO\WRWKH
REMHFWLYH DQG WR PDNH WKH UHKDELOLWDWLRQ UHSDLU DOWHUDWLRQ FKDQJH RI RFFXSDQF\ DGGLWLRQ
SURFHVV HDVLHU WKLV FKDSWHU DOORZV IRU D DQG UHORFDWLRQRI H[LVWLQJEXLOGLQJVUHJDUGOHVVRI
FRQWUROOHG GHSDUWXUH IURP IXOO FRPSOLDQFH ZLWK RFFXSDQF\ VXEMHFW WR WKH FULWHULD RI 6HFWLRQV
WKHWHFKQLFDOFRGHVZLWKRXWFRPSURPLVLQJWKH DQG
PLQLPXPVWDQGDUGVIRUWKHILUHSUHYHQWLRQDQG
OLIHVDIHW\IHDWXUHVRIWKHUHKDELOLWDWHGEXLOGLQJ ™ $OO H[LVWLQJ VWUXFWXUHV PXVW FRPSO\ ZLWK WKH
SURYLVLRQVRIWKHFRGHZKHQXQGHUJRLQJUHSDLU
DOWHUDWLRQ FKDQJH RI RFFXSDQF\ DGGLWLRQ DQG
3$57²6&23($1'$33/,&$7,21 UHORFDWLRQ VXEMHFW WR WKH FULWHULD LQ 6HFWLRQV
 DQG  6HFWLRQV  DQG
6(&7,21*(1(5$/ FRQWDLQSURYLVLRQVWKDWDUHVLJQLILFDQWO\
 7LWOH7KHVHUHJXODWLRQVVKDOOEHNQRZQDV GLIIHUHQW EDVHG RQ ZKHWKHU WKH EXLOGLQJ KDV
EHHQ SUHYLRXVO\ RFFXSLHG %DVLFDOO\ LI WKH
WKH 6DXGL ([LVWLQJ %XLOGLQJ &RGH 6%& 
EXLOGLQJ KDV QRW EHHQ SUHYLRXVO\ RFFXSLHG LW
KHUHLQDIWHUUHIHUUHGWRDV³WKLVFRGH´ PXVW FRPSO\ ZLWK WKH UHTXLUHPHQWV IRU QHZ
™ 7KH SXUSRVH RI WKLV VHFWLRQ LV WR LGHQWLI\ WKH FRQVWUXFWLRQ 7KLV DOVR DSSOLHV WR EXLOGLQJV
DGRSWHG UHJXODWLRQV E\ LQVHUWLQJ WKH QDPH RI XQGHUJRLQJDOWHUDWLRQVRUDGGLWLRQV
WKHDGRSWLQJMXULVGLFWLRQLQWRWKHFRGH
%XLOGLQJV QRW SUHYLRXVO\ RFFXSLHG  $
 6FRSH  7KH SURYLVLRQV RI WKH 6DXGL EXLOGLQJRUSRUWLRQRIDEXLOGLQJWKDWKDVQRWEHHQ
([LVWLQJ%XLOGLQJ&RGH 6%&  VKDOODSSO\ WR SUHYLRXVO\ RFFXSLHG RU XVHG IRU LWV LQWHQGHG
WKHUHSDLUDOWHUDWLRQFKDQJHRIRFFXSDQF\DGGLWLRQ SXUSRVHLQDFFRUGDQFHZLWKWKHODZVLQH[LVWHQFHDW
WRDQGUHORFDWLRQRIH[LVWLQJEXLOGLQJV WKH WLPH RI LWV FRPSOHWLRQ VKDOO EH SHUPLWWHG WR
7KLV VHFWLRQ HVWDEOLVKHV ZKHUH WKH UHJXODWLRQV
FRPSO\ZLWKWKHSURYLVLRQVRIWKHODZVLQH[LVWHQFH
FRQWDLQHGLQWKHFRGHPXVWEHIROORZHGZKHWKHUDOO DWWKHWLPHRILWVRULJLQDOSHUPLWXQOHVVVXFKSHUPLW
RULQSDUW6RPHWKLQJPXVWKDSSHQPRGLILFDWLRQWR KDVH[SLUHG6XEVHTXHQWSHUPLWVVKDOOFRPSO\ZLWK
DQH[LVWLQJEXLOGLQJRUDOORZLQJDQH[LVWLQJEXLOGLQJ WKH6%&RU6%&DVDSSOLFDEOHIRUQHZ
RUVWUXFWXUHWREHFRPHXQVDIHIRUWKHFRGHWR EH FRQVWUXFWLRQ
DSSOLFDEOH :KLOH VXFK DFWLYLW\ PD\ QRW EH DV
™ 7KLVVHFWLRQUHTXLUHVDOOEXLOGLQJVWKDWKDYHQRW
VLJQLILFDQW DV IRU D QHZ EXLOGLQJ D IHQFH LV
EHHQ SUHYLRXVO\ RFFXSLHG WR FRPSO\ ZLWK WKH
FRQVLGHUHGDVWUXFWXUHDQGWKHUHIRUHLWVHUHFWLRQLV
6%&RUWKH6%&LIWKHSHUPLWIRUVXFK
ZLWKLQ WKH VFRSH RI WKH FRGH 7KH FRGH LV QRW D
EXLOGLQJ KDV H[SLUHG ,W DOVR DSSOLHV WR DQ\
PDLQWHQDQFH GRFXPHQW UHTXLULQJ SHULRGLF
EXLOGLQJWKDWPD\KDYHEHHQFRPSOHWHGDQGQRW
LQVSHFWLRQV WKDW ZLOO LQ WXUQ UHVXOW LQ DQ
RFFXSLHGRUXVHGIRULWVLQWHQGHGSXUSRVH7KH
HQIRUFHPHQW DFWLRQ DOWKRXJK SHULRGLF LQVSHFWLRQV
EXLOGLQJ UHPDLQV D QHZ VWUXFWXUH LQ WHUPV RI
DUHDGGUHVVHGE\WKH6%&
FRGH FRPSOLDQFH XQWLO VXFK D WLPH DV LW LV
RFFXSLHG LQ ZKROH RU LQ SDUW $JDLQ WKLV LV

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

EDVHGRQWKHSHUPLWEHLQJH[SLUHG,IWKHSHUPLW KRXVLQJ RU ILUH VDIHW\ PDLQWHQDQFH FRGH RU

KDV QRW H[SLUHG WKHQ WKH EXLOGLQJ FDQ FRPSO\ PDQGDWHG E\ DQ\ OLFHQVLQJ UXOH RU RUGLQDQFH
ZLWK WKH ODZV LQ H[LVWHQFH DW WKH WLPH RI DGRSWHGSXUVXDQWWRODZVKDOOFRQIRUPRQO\WRWKH
FRQVWUXFWLRQ UHTXLUHPHQWV RI WKDW FRGH UXOH RU RUGLQDQFH DQG
%XLOGLQJVSUHYLRXVO\RFFXSLHG7KHOHJDO VKDOOQRWEHUHTXLUHGWRFRQIRUPWRWKLVFRGHXQOHVV
RFFXSDQF\RIDQ\EXLOGLQJH[LVWLQJRQWKHGDWHRI WKH FRGH UHTXLULQJ VXFK UHSDLU RU DOWHUDWLRQ VR
DGRSWLRQRIWKLVFRGHVKDOOEHSHUPLWWHGWRFRQWLQXH SURYLGHV
ZLWKRXWFKDQJHH[FHSWDVLVVSHFLILFDOO\FRYHUHGLQ ™ 7KLV VHFWLRQ LV LQWHQGHG WR NHHS WKH
WKLVFRGHWKH6%&RUWKH6%&RUDVLV UHTXLUHPHQWV RI RWKHU FRGHV RU RUGLQDQFHV
GHHPHG QHFHVVDU\ E\ WKH EXLOGLQJ RIILFLDO IRU WKH LQWDFW DQG VHSDUDWH IURP WKH UHTXLUHPHQWV RI
JHQHUDOVDIHW\DQGZHOIDUHRIWKHRFFXSDQWVDQGWKH WKHFRGH
SXEOLF
6(&7,21$33/,&$%,/,7<
™ 7KLV VHFWLRQ DOORZV IRU EXLOGLQJV WKDW ZHUH
OHJDOO\RFFXSLHGLQSDUWRULQZKROHDWWKHWLPH  *HQHUDO:KHUHWKHUHLVDFRQIOLFWEHWZHHQ
WKHFRGHZDV DGRSWHGWRFRQWLQXH7KHUH LV D D JHQHUDOUHTXLUHPHQWDQG D VSHFLILFUHTXLUHPHQW
PDLQWHQDQFHFRQFHUQWKDWLVDGGUHVVHGE\WKH WKHVSHFLILFUHTXLUHPHQWVKDOOEHDSSOLFDEOH:KHUH
UHTXLUHPHQWWKDWWKHEXLOGLQJFRPSO\ZLWKHLWKHU LQDQ\VSHFLILFFDVHGLIIHUHQWVHFWLRQVRIWKLVFRGH
WKH 6%&  RU WKH 6%&  7KHVH FRGHV VSHFLI\GLIIHUHQWPDWHULDOVPHWKRGVRIFRQVWUXFWLRQ
HQVXUHWKDWOLIHVDIHW\V\VWHPVVXFKDVPHDQV RU RWKHU UHTXLUHPHQWV WKH PRVW UHVWULFWLYH VKDOO
RIHJUHVVSDWKZD\VDQGILUHSURWHFWLRQV\VWHPV JRYHUQ
DUHNHSWLQSODFHDQGDEOHWRSURWHFWWKHOLIHDQG
VDIHW\ RI WKH LQKDELWDQWV RI WKHVH H[LVWLQJ ™ ,QFDVHVZKHUHWKHFRGHHVWDEOLVKHVDVSHFLILF
VWUXFWXUHV UHTXLUHPHQW IRU D FHUWDLQ FRQGLWLRQ WKDW
UHTXLUHPHQW LV DSSOLFDEOH HYHQ LI LW LV OHVV
 6DIHJXDUGV GXULQJ FRQVWUXFWLRQ UHVWULFWLYH WKDQ D JHQHUDO UHTXLUHPHQW
&RQVWUXFWLRQZRUNFRYHUHGLQWKLVFRGHLQFOXGLQJ HOVHZKHUHLQWKHFRGH$OVRWKHPRVWUHVWULFWLYH
DQ\ UHODWHG GHPROLWLRQ VKDOO FRPSO\ ZLWK WKH FRGHUHTXLUHPHQWLVWRDSSO\ZKHUHWKHUHPD\
UHTXLUHPHQWVRI&KDSWHU EH GLIIHUHQW UHTXLUHPHQWV LQ WKH FRGH IRU D
VSHFLILFLQVWDOODWLRQ
™ 7KH IXQGDPHQWDO UDWLRQDOH EHKLQG WKLV VHFWLRQ
LVWRHVWDEOLVKUHDVRQDEOHVDIHW\SUHFDXWLRQVLQ  2WKHU ODZV  7KH SURYLVLRQVRI WKLV FRGH
DFFRUGDQFHZLWK&KDSWHUGXULQJDOOSKDVHV VKDOOQRWEHGHHPHGWRQXOOLI\DQ\SURYLVLRQVRIWKH
RIFRQVWUXFWLRQDQGGHPROLWLRQ&KDSWHUDOVR FRXQWU\ODZ
FRYHUV WKH SURWHFWLRQ RI DGMDFHQW SXEOLF DQG
SULYDWHSURSHUWLHV ™ ,Q VRPH FDVHV RWKHU ODZV HQDFWHG E\ WKH
FRXQWU\RUWKHJRYHUQPHQWPD\EHDSSOLFDEOH
 $SSHQGLFHV  7KH EXLOGLQJ RIILFLDO LV WR D FRQGLWLRQ WKDW LV DOVR JRYHUQHG E\ D
DXWKRUL]HGWR UHTXLUH UHKDELOLWDWLRQDQG UHWURILWRI UHTXLUHPHQW LQ WKH FRGH ,Q VXFK
EXLOGLQJV VWUXFWXUHV RU LQGLYLGXDO VWUXFWXUDO FLUFXPVWDQFHV WKH UHTXLUHPHQWV RI WKH FRGH
PHPEHUVLQDFFRUGDQFHZLWKWKHDSSHQGLFHVRIWKLV DUH LQ DGGLWLRQ WR WKDW RWKHU ODZ WKDW LV VWLOO LQ
FRGH LI VXFK DSSHQGLFHV KDYH EHHQ LQGLYLGXDOO\ HIIHFWDOWKRXJKWKHEXLOGLQJRIILFLDOPD\QRWEH
DGRSWHG UHVSRQVLEOHIRULWVHQIRUFHPHQW

™ 7KLV VHFWLRQ GHVFULEHV D XQLTXH DVSHFW RI WKH  $SSOLFDWLRQRIUHIHUHQFHV5HIHUHQFHVWR

FRGHZKHUHE\DQ\DSSHQGL[UHIHUHQFHGLQWKH FKDSWHU RU VHFWLRQ QXPEHUV RU WR SURYLVLRQV QRW
FRGH EHFRPHV D SDUW RI WKH FRGH ZLWKRXW WKH VSHFLILFDOO\LGHQWLILHGE\QXPEHUVKDOOEHFRQVWUXHG
MXULVGLFWLRQ KDYLQJ WR VSHFLILFDOO\ DGRSW LW )RU WRUHIHUWRVXFKFKDSWHUVHFWLRQRUSURYLVLRQRIWKLV
H[DPSOHLQ&KDSWHUYROXQWDU\DOWHUDWLRQVWR FRGH
ODWHUDOIRUFHUHVLVWLQJ V\VWHPV DUH DOORZHG
ZKHQFRQGXFWHGLQDFFRUGDQFHZLWK $SSHQGL[ ™ ,Q D VLWXDWLRQ ZKHUH WKH FRGH PD\ PDNH
$ 7KHUHIRUH $SSHQGL[ $ KDYLQJ EHHQ UHIHUHQFHWRDFKDSWHURUVHFWLRQQXPEHURUWR
VSHFLILFDOO\ UHIHUHQFHG LV HQIRUFHDEOH ZLWKRXW DQRWKHU FRGH SURYLVLRQ ZLWKRXW VSHFLILFDOO\
KDYLQJ WR EH VSHFLILFDOO\ DGRSWHG E\ WKH ORFDO LGHQWLI\LQJLWVORFDWLRQLQWKHFRGHDVVXPHWKDW
MXULVGLFWLRQ $Q\ DSSHQGLFHV QRW VSHFLILFDOO\ WKHUHIHUHQFHGVHFWLRQFKDSWHURUSURYLVLRQLV
UHIHUHQFHG LQ WKH FRGH PXVW EH LQGLYLGXDOO\ LQ WKH FRGH DQG QRW LQ D UHIHUHQFHG FRGH RU
DGRSWHGWREHOHJDOO\HQIRUFHG VWDQGDUG

 &RUUHFWLRQ RI YLRODWLRQV RI RWKHU FRGHV  5HIHUHQFHG FRGHV DQG VWDQGDUGV  7KH
5HSDLUV RU DOWHUDWLRQV PDQGDWHG E\ DQ\ SURSHUW\ FRGHVDQGVWDQGDUGVUHIHUHQFHGLQWKLVFRGHVKDOOEH
FRQVLGHUHGSDUWRIWKHUHTXLUHPHQWVRIWKLVFRGHWR

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

WKHSUHVFULEHGH[WHQWRIHDFKVXFKUHIHUHQFHDQGDV UHTXLUHPHQWV 7KLV VHFWLRQ FODULILHV WKDW

IXUWKHUUHJXODWHGLQ6HFWLRQVDQG DOWKRXJK WKDW VWDQGDUG PD\ DGGUHVV VLPLODU
LVVXHV WKH FRGH ZLOO WDNH SUHFHGHQFH RYHU
([FHSWLRQ:KHUHHQIRUFHPHQWRIDFRGHSURYLVLRQ WKRVHUHTXLUHPHQWVDVDZKROH
ZRXOG YLRODWH WKH FRQGLWLRQV RI WKH OLVWLQJ RI WKH
HTXLSPHQWRUDSSOLDQFHWKHFRQGLWLRQVRIWKHOLVWLQJ  3DUWLDO LQYDOLGLW\  ,Q WKH HYHQW WKDW DQ\
VKDOOJRYHUQ SDUWRUSURYLVLRQRIWKLVFRGHLVKHOGWREHLOOHJDORU
YRLGWKLVVKDOOQRWKDYHWKHHIIHFWRIPDNLQJYRLG
™ $UHIHUHQFHGFRGHVWDQGDUGRUSRUWLRQWKHUHRI RULOOHJDODQ\RIWKHRWKHUSDUWVRUSURYLVLRQV
LVDQHQIRUFHDEOHH[WHQVLRQRIWKHFRGHDVLIWKH
FRQWHQW RI WKH VWDQGDUG ZHUH LQFOXGHG LQ WKH ™ 2QO\ LQYDOLG VHFWLRQV RI WKH FRGH DV
ERG\RIWKHFRGH)RUH[DPSOH6HFWLRQ HVWDEOLVKHGE\WKHFRXUWRIMXULVGLFWLRQFDQEH
UHIHUHQFHV $6&(  LQ LWV HQWLUHW\ IRU WKH VHW DVLGH 7KLV LV HVVHQWLDO WR VDIHJXDUG WKH
VHLVPLF HYDOXDWLRQ DQG GHVLJQ RI DQ H[LVWLQJ DSSOLFDWLRQRIWKHFRGHWH[WWRVLWXDWLRQVZKHUH
EXLOGLQJ ,Q WKRVH FDVHV ZKHUH WKH FRGH D SURYLVLRQ LV GHFODUHG LOOHJDO RU
UHIHUHQFHVRQO\SRUWLRQVRIDVWDQGDUGWKHXVH XQFRQVWLWXWLRQDO 7KLV VHFWLRQ SUHVHUYHV WKH
DQG DSSOLFDWLRQ RI WKH UHIHUHQFHG VWDQGDUG LV OHJLVODWLYHDFWLRQWKDWSXWWKHOHJDOSURYLVLRQVLQ
OLPLWHG WR WKRVH SRUWLRQV WKDW DUH VSHFLILFDOO\ SODFH
LGHQWLILHG )RU H[DPSOH ,WHP  6HFWLRQ  
UHIHUHQFHV VWUXFWXUDO LUUHJXODULW\ DV GHILQHG LQ
6%&7KHUHIRUHLWLVRQO\WKHVHSRUWLRQVRI 3$57$'0,1,675$7,21$1'
6%&  WKDW DUH DSSOLFDEOH WR WKLV VSHFLILF (1)25&(0(17
FRGH UHTXLUHPHQW /DVWO\ LI FRQIOLFWV EHWZHHQ 
WKHUHTXLUHPHQWVRIWKHFRGHDQGDUHIHUHQFHG
VWDQGDUG RFFXU WKH UHTXLUHPHQWV RI WKH FRGH 6(&7,21%8,/',1*2)),&,$/
JRYHUQUHJDUGOHVVRIZKLFKUHTXLUHPHQWLVPRUH  &UHDWLRQ RI HQIRUFHPHQW DJHQF\  7KH
UHVWULFWLYH 7KH H[FHSWLRQ GHDOV ZLWK SRVVLEOH RIILFHURURWKHUGHVLJQDWHGDXWKRULW\FKDUJHGZLWK
FRQIOLFWV EHWZHHQ FRGH UHTXLUHPHQWV DQG WKH
WKH DGPLQLVWUDWLRQ DQG HQIRUFHPHQW RI WKLV FRGH
FRQGLWLRQV RI DQ HTXLSPHQW OLVWLQJ ,I WKH FRGH
FRQIOLFWVZLWKRUGHYLDWHVIURPWKHFRQGLWLRQVRI
VKDOOEHNQRZQDVWKHEXLOGLQJRIILFLDO
WKH OLVWLQJ WKLV PD\RU PD\QRWPHDQWKDWWKH ™ 7KLV VHFWLRQ FUHDWHV WKH EXLOGLQJ GHSDUWPHQW
FRGH YLRODWHG WKH OLVWLQJ )RU H[DPSOH WKH DQGGHVFULEHVLWVFRPSRVLWLRQVHH6HFWLRQ
OLVWLQJIRUDQDSSOLDQFHPLJKWDOORZDSDUWLFXODU IRUDGLVFXVVLRQRIWKHLQVSHFWLRQGXWLHVRIWKH
DSSOLFDWLRQ RI DQ DSSOLDQFH WKDW LV H[SUHVVO\ GHSDUWPHQW $SSHQGL[ $ RI WKH 6%& 
SURKLELWHG E\ WKH FRGH ,Q WKLV FDVH WKH FRGH FRQWDLQVTXDOLILFDWLRQVIRUWKHHPSOR\HHVRIWKH
KDV QRW YLRODWHG WKH OLVWLQJ EXW LQVWHDG KDV EXLOGLQJ GHSDUWPHQW LQYROYHG LQ WKH
VLPSO\ OLPLWHG WKH DSSOLFDWLRQ DOORZHG E\ WKH HQIRUFHPHQWRIWKHFRGH,IDMXULVGLFWLRQGHVLUHV
OLVWLQJ 7KH LQWHQW LV IRU WKH KLJKHVW OHYHO RI WR HVWDEOLVK WKHVH TXDOLILFDWLRQV IRU LWV
VDIHW\WRSUHYDLO HPSOR\HHV $SSHQGL[ $ PXVW EH VSHFLILFDOO\
UHIHUHQFHG LQ WKH DGRSWLQJ RUGLQDQFH 7KH
&RQIOLFWV:KHUHFRQIOLFWVRFFXUEHWZHHQ
H[HFXWLYH RIILFLDO LQ FKDUJH RI WKH EXLOGLQJ
SURYLVLRQV RI WKLV FRGH DQG UHIHUHQFHG FRGHV DQG GHSDUWPHQW LV QDPHG WKH ³EXLOGLQJ RIILFLDO´ E\
VWDQGDUGVWKHSURYLVLRQVRIWKLVFRGHVKDOODSSO\ WKLV VHFWLRQ ,Q DFWXDOLW\ WKH SHUVRQ ZKR LV LQ
™ 7KLV VHFWLRQ FODULILHV WKDW WKH FRGH WDNHV FKDUJHRIWKHGHSDUWPHQWPD\KROGDGLIIHUHQW
SUHFHGHQFH RYHU D UHIHUHQFHG FRGH RU WLWOH VXFK DV EXLOGLQJ FRPPLVVLRQHU EXLOGLQJ
VWDQGDUG $V GLVFXVVHG LQ WKH FRPPHQWDU\ WR LQVSHFWRU RU FRQVWUXFWLRQ RIILFLDO )RU WKH
6HFWLRQLWLVDOVRLPSRUWDQWWRXQGHUVWDQG SXUSRVHRIWKHFRGHWKDWSHUVRQLVUHIHUUHGWR
WKH H[WHQW WR ZKLFK DQRWKHU FRGH RU VWDQGDUG DVWKH³EXLOGLQJRIILFLDO´
KDV EHHQ UHIHUHQFHG 7KLV PD\ UHGXFH WKH  $SSRLQWPHQW7KHEXLOGLQJRIILFLDOVKDOO
QXPEHURISRVVLEOHFRQIOLFWVWREHDGGUHVVHG
EH DSSRLQWHGE\ WKH FKLHI DSSRLQWLQJDXWKRULW\RI
&RQIOLFWLQJSURYLVLRQV:KHUHWKHH[WHQW WKHMXULVGLFWLRQ
RI WKH UHIHUHQFH WR D UHIHUHQFHG FRGH RU VWDQGDUG ™ 7KLVVHFWLRQHVWDEOLVKHVWKHEXLOGLQJRIILFLDODV
LQFOXGHVVXEMHFWPDWWHUWKDWLVZLWKLQWKHVFRSHRI DQDSSRLQWHGSRVLWLRQRIWKHMXULVGLFWLRQ
WKLVFRGHWKHSURYLVLRQVRIWKLVFRGHDVDSSOLFDEOH
VKDOO WDNH SUHFHGHQFH RYHU WKH SURYLVLRQV LQ WKH  'HSXWLHV  ,Q DFFRUGDQFH ZLWK WKH
UHIHUHQFHGFRGHRUVWDQGDUG SUHVFULEHGSURFHGXUHVRIWKLVMXULVGLFWLRQDQGZLWK
WKH FRQFXUUHQFH RI WKH DSSRLQWLQJ DXWKRULW\ WKH
™ 2IWHQ LW FDQ EH FRQIXVLQJ ZKHQ D VWDQGDUG LV EXLOGLQJRIILFLDOVKDOOKDYHWKHDXWKRULW\WRDSSRLQW
UHIHUHQFHG LQ LWV HQWLUHW\ DQG KDV D VLPLODU
D GHSXW\ EXLOGLQJ RIILFLDO WKH UHODWHG WHFKQLFDO
VFRSH EXW YHU\ GLIIHUHQW RU VLPSO\ FRQIOLFWLQJ

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

RIILFHUV LQVSHFWRUV SODQ H[DPLQHUV DQG RWKHU DGGLWLRQRURWKHULPSURYHPHQWRIH[LVWLQJEXLOGLQJV

HPSOR\HHV6XFK HPSOR\HHVVKDOOKDYHSRZHUV DV RU VWUXFWXUHV ORFDWHG LQ IORRG KD]DUG DUHDV WKH
GHOHJDWHGE\WKHEXLOGLQJRIILFLDO EXLOGLQJ RIILFLDO VKDOO GHWHUPLQH ZKHUH WKH
™ 7KLV VHFWLRQ SURYLGHV WKH EXLOGLQJ RIILFLDO ZLWK
SURSRVHGZRUNFRQVWLWXWHVVXEVWDQWLDOLPSURYHPHQW
WKH DXWKRULW\ WR DSSRLQW RWKHU LQGLYLGXDOV WR RUUHSDLURIVXEVWDQWLDOGDPDJH:KHUHWKHEXLOGLQJ
DVVLVWZLWKWKHDGPLQLVWUDWLRQDQGHQIRUFHPHQW RIILFLDO GHWHUPLQHV WKDW WKH SURSRVHG ZRUN
RI WKH FRGH 7KHVH LQGLYLGXDOV KDYH WKH FRQVWLWXWHV VXEVWDQWLDO LPSURYHPHQW RU UHSDLU RI
DXWKRULW\ DQG UHVSRQVLELOLW\ DV GHVLJQDWHG E\ VXEVWDQWLDO GDPDJH DQG ZKHUH UHTXLUHG E\ WKLV
WKH EXLOGLQJ RIILFLDO 6XFK DSSRLQWPHQWV FRGHWKHEXLOGLQJRIILFLDOVKDOOUHTXLUHWKHEXLOGLQJ
KRZHYHU PD\ EH H[HUFLVHG RQO\ ZLWK WKH WR PHHW WKH UHTXLUHPHQWV RI 6HFWLRQ  RI WKH
DXWKRUL]DWLRQRIWKHFKLHIDSSRLQWLQJDXWKRULW\ 6%&
6(&7,21'87,(6$1'32:(56 ™ 7KLV ODQJXDJH LV VLPLODU WR 6DXGL 5HVLGHQWLDO
2)%8,/',1*2)),&,$/ &RGH 6%&  6HFWLRQ 5  ZKLFK
KDV WKH EXLOGLQJ RIILFLDO PDNLQJ D ILQGLQJ ZLWK
 *HQHUDO  7KH EXLOGLQJ RIILFLDO LV KHUHE\ UHJDUG WR WKH YDOXH RI WKH SURSRVHG ZRUN DQG
DXWKRUL]HGDQGGLUHFWHGWRHQIRUFHWKHSURYLVLRQVRI PDUNHW YDOXH RI WKH EXLOGLQJ 7KLV VXEVHFWLRQ
WKLV FRGH 7KH EXLOGLQJ RIILFLDO VKDOO KDYH WKH GHVFULEHV ZKDW WKH EXLOGLQJ RIILFLDO GRHV WR
DXWKRULW\WRUHQGHULQWHUSUHWDWLRQVRIWKLVFRGHDQG GHWHUPLQH ZKHWKHU ZRUN SURSRVHG IRU H[LVWLQJ
WRDGRSWSROLFLHVDQGSURFHGXUHVLQRUGHUWRFODULI\ EXLOGLQJV PHHWV WKRVH GHILQLWLRQV )(0$
WKH DSSOLFDWLRQ RI LWV SURYLVLRQV 6XFK SXEOLVKHG H[WHQVLYH JXLGDQFH RQ VXEVWDQWLDO
LQWHUSUHWDWLRQVSROLFLHVDQGSURFHGXUHVVKDOOEHLQ LPSURYHPHQW DQG VXEVWDQWLDO GDPDJH
FRPSOLDQFHZLWKWKHLQWHQWDQGSXUSRVHRIWKLVFRGH LQFOXGLQJ D QXPEHU RI DFFHSWDEOH PHWKRGV WR
HVWLPDWHPDUNHWYDOXHDQGSURMHFWFRVWV0RVW
6XFK SROLFLHV DQG SURFHGXUHV VKDOO QRW KDYH WKH
MXULVGLFWLRQVUHTXLUHWKHDSSOLFDQWWRSURYLGHDQ
HIIHFW RI ZDLYLQJ UHTXLUHPHQWV VSHFLILFDOO\ HVWLPDWHRIFRVWVZKLFKLVDOUHDG\UHTXLUHGWR
SURYLGHGIRULQWKLVFRGH EHLQFOXGHGLQWKHDSSOLFDWLRQ
™ 7KHGXW\RIWKHEXLOGLQJRIILFLDOLVWRHQIRUFHWKH 3UHOLPLQDU\PHHWLQJ:KHQUHTXHVWHGE\
FRGH DQG KH RU VKH LV WKH ³DXWKRULW\ KDYLQJ WKH SHUPLW DSSOLFDQW RU WKH EXLOGLQJ RIILFLDO WKH
MXULVGLFWLRQ´IRUDOOPDWWHUVUHODWLQJWRWKHFRGH
DQGLWVHQIRUFHPHQW,WLVWKHGXW\RIWKHEXLOGLQJ
EXLOGLQJ RIILFLDO VKDOO PHHW ZLWK WKH SHUPLW
RIILFLDO WR LQWHUSUHW WKH FRGH DQG WR GHWHUPLQH DSSOLFDQWSULRUWRWKHDSSOLFDWLRQIRUDFRQVWUXFWLRQ
FRPSOLDQFH &RGH FRPSOLDQFH ZLOO QRW DOZD\V SHUPLW WR GLVFXVV SODQV IRU WKH SURSRVHG ZRUN RU
EHHDV\WRGHWHUPLQHDQGZLOOUHTXLUHMXGJPHQW FKDQJH RI RFFXSDQF\ LQ RUGHU WR HVWDEOLVK WKH
DQG H[SHUWLVH SDUWLFXODUO\ ZKHQ HQIRUFLQJ WKH VSHFLILFDSSOLFDELOLW\RIWKHSURYLVLRQVRIWKLVFRGH
SURYLVLRQV RI 6HFWLRQV  DQG  ,Q
H[HUFLVLQJWKLVDXWKRULW\KRZHYHUWKHEXLOGLQJ
([FHSWLRQ5HSDLUVDQG/HYHODOWHUDWLRQV
RIILFLDOFDQQRWVHWDVLGHRULJQRUHDQ\SURYLVLRQ ™ 7KHSUHOLPLQDU\PHHWLQJLVDQLPSRUWDQWDVSHFW
RIWKHFRGH RIDQ\UHSDLUDOWHUDWLRQFKDQJHRIRFFXSDQF\
DGGLWLRQ RU UHORFDWLRQ RI DQ\ EXLOGLQJ $W WKLV
 $SSOLFDWLRQVDQG SHUPLWV 7KH EXLOGLQJ
SKDVH LQ D SURMHFW LW LV FRQVLGHUDEO\ OHVV
RIILFLDO VKDOO UHFHLYH DSSOLFDWLRQV UHYLHZ H[SHQVLYH WR PDNH FKDQJHV RU FRUUHFWLRQV
FRQVWUXFWLRQGRFXPHQWVDQGLVVXHSHUPLWVIRUWKH 3RVVLEOHSUREOHPLVVXHVFDQEHLGHQWLILHGDQG
UHSDLU DOWHUDWLRQ DGGLWLRQ GHPROLWLRQ FKDQJH RI VROXWLRQV GHYLVHG DKHDG RI WLPH UHVXOWLQJ LQ
RFFXSDQF\DQGUHORFDWLRQRIEXLOGLQJVLQVSHFWWKH IHZHU FRUUHFWLRQ QRWLFHV DQG UHZRUN EHLQJ
SUHPLVHVIRUZKLFKVXFKSHUPLWVKDYHEHHQLVVXHG UHTXLUHG 7KH H[FHSWLRQ UHFRJQL]HV WKDW D
DQGHQIRUFHFRPSOLDQFHZLWKWKHSURYLVLRQVRIWKLV SUHOLPLQDU\PHHWLQJZRXOGQRWEHQHFHVVDU\IRU
FRGH DUHSDLURUDOWHUDWLRQOHYHOIRURQHSURMHFWEDVHG
RQ WKH IDFW WKDW WKLV OHYHO RI ZRUN LV QRW
™ 7KH FRGH HQIRUFHPHQW SURFHVV LV QRUPDOO\ FRPSOLFDWHGRULQYROYHG
LQLWLDWHG ZLWK DQ DSSOLFDWLRQ IRU D SHUPLW 7KH
EXLOGLQJ RIILFLDO LV UHVSRQVLEOH IRU SURFHVVLQJ 
DSSOLFDWLRQV DQG LVVXLQJ SHUPLWV IRU WKH  %XLOGLQJ HYDOXDWLRQ  7KH
PRGLILFDWLRQRIEXLOGLQJVLQDFFRUGDQFHZLWKWKH EXLOGLQJRIILFLDOLVDXWKRUL]HGWRUHTXLUHDQH[LVWLQJ
FRGH EXLOGLQJ WR EH LQYHVWLJDWHG DQG HYDOXDWHG E\ D
'HWHUPLQDWLRQRIVXEVWDQWLDOO\LPSURYHG UHJLVWHUHG GHVLJQ SURIHVVLRQDO EDVHG RQ WKH
RUVXEVWDQWLDOO\GDPDJHGH[LVWLQJEXLOGLQJVDQG FLUFXPVWDQFHV DJUHHG XSRQ DW WKH SUHOLPLQDU\
VWUXFWXUHVLQIORRGKD]DUGDUHDV)RUDSSOLFDWLRQV PHHWLQJ 7KH GHVLJQ SURIHVVLRQDO VKDOO QRWLI\ WKH
IRUUHFRQVWUXFWLRQUHKDELOLWDWLRQUHSDLUDOWHUDWLRQ

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

EXLOGLQJ RIILFLDO LI DQ\ SRWHQWLDO QRQFRQIRUPDQFH DSSURYDORIWKHMXULVGLFWLRQ¶VFKLHIH[HFXWLYHRU

ZLWKWKHSURYLVLRQVRIWKLVFRGHLVLGHQWLILHG VLPLODUSRVLWLRQLVUHTXLUHG$WHFKQLFDOUHSRUW
IURPDQH[SHUWUHTXHVWHGE\WKHEXLOGLQJRIILFLDO
™ 7KLV VHFWLRQ DXWKRUL]HV WKH EXLOGLQJ RIILFLDO WR FDQEHXVHGWRDVVLVWLQWKHDSSURYDOSURFHVV
KDYH DQ H[LVWLQJ VWUXFWXUH LQYHVWLJDWHG DQG
HYDOXDWHG E\ D GHVLJQ SURIHVVLRQDO ([LVWLQJ  ,GHQWLILFDWLRQ7KHEXLOGLQJRIILFLDOVKDOO
VWUXFWXUHVPD\KDYHVRPHVWUXFWXUDOSUREOHPV FDUU\ SURSHU LGHQWLILFDWLRQ ZKHQ LQVSHFWLQJ
WKDW DUH QRW LPPHGLDWHO\ YLVLEOH 7KH DELOLW\ WR VWUXFWXUHVRUSUHPLVHVLQWKHSHUIRUPDQFHRIGXWLHV
FDOO LQ DQ H[SHULHQFHG GHVLJQ SURIHVVLRQDO WR XQGHUWKLVFRGH
DLG LQ WKH SURSHU HYDOXDWLRQ RI DQ H[LVWLQJ
VWUXFWXUHLVLQYDOXDEOH ™ 7KLV VHFWLRQ UHTXLUHV WKH EXLOGLQJ RIILFLDO
LQFOXGLQJ E\ GHILQLWLRQ DOO DXWKRUL]HG
 1RWLFHVDQGRUGHUV7KHEXLOGLQJRIILFLDO GHVLJQHHVWRFDUU\LGHQWLILFDWLRQLQWKHFRXUVH
VKDOO LVVXH QHFHVVDU\ QRWLFHV RU RUGHUV WR HQVXUH RI FRQGXFWLQJ WKH GXWLHV RI WKH SRVLWLRQ 7KLV
FRPSOLDQFHZLWKWKLVFRGH UHPRYHV DQ\ TXHVWLRQ DV WR WKH SXUSRVH DQG
DXWKRULW\RIWKHLQVSHFWRU
™ $Q LPSRUWDQW HOHPHQW RI FRGH HQIRUFHPHQW LV
WKH QHFHVVDU\ DGYLVHPHQW RI GHILFLHQFLHV DQG  5LJKW RI HQWU\  :KHUHLWLV QHFHVVDU\WR
FRUUHFWLRQ ZKLFK LV DFFRPSOLVKHG WKURXJK PDNHDQLQVSHFWLRQWRHQIRUFHWKHSURYLVLRQVRIWKLV
ZULWWHQQRWLFHVDQGRUGHUV7KHEXLOGLQJRIILFLDO FRGHRUZKHUHWKHEXLOGLQJRIILFLDOKDVUHDVRQDEOH
LV UHTXLUHG WR LVVXH RUGHUV WR DEDWH LOOHJDO RU FDXVHWR EHOLHYHWKDWWKHUHH[LVWVLQD VWUXFWXUHRU
XQVDIH FRQGLWLRQV 6HFWLRQ  FRQWDLQV XSRQDSUHPLVHVDFRQGLWLRQWKDWLVFRQWUDU\WRRULQ
DGGLWLRQDOLQIRUPDWLRQIRUWKHVHQRWLFHV
YLRODWLRQ RI WKLV FRGH WKDW PDNHV WKH VWUXFWXUH RU
 ,QVSHFWLRQV  7KH EXLOGLQJ RIILFLDO VKDOO SUHPLVHV XQVDIH GDQJHURXV RU KD]DUGRXV WKH
PDNH WKH UHTXLUHG LQVSHFWLRQV RU WKH EXLOGLQJ EXLOGLQJRIILFLDOLVDXWKRUL]HGWRHQWHUWKHVWUXFWXUH
RIILFLDOVKDOOKDYHWKHDXWKRULW\WRDFFHSWUHSRUWVRI RU SUHPLVHV DW UHDVRQDEOH WLPHV WR LQVSHFW RU WR
LQVSHFWLRQ E\ DSSURYHG DJHQFLHV RU LQGLYLGXDOV SHUIRUPWKHGXWLHVLPSRVHGE\WKLVFRGHSURYLGHG
5HSRUWVRIVXFKLQVSHFWLRQVVKDOOEHLQZULWLQJDQG WKDWLIVXFKVWUXFWXUHRUSUHPLVHVEHRFFXSLHGWKDW
EH FHUWLILHG E\ D UHVSRQVLEOH RIILFHU RI VXFK FUHGHQWLDOVEHSUHVHQWHGWRWKHRFFXSDQWDQGHQWU\
DSSURYHGDJHQF\RUE\WKHUHVSRQVLEOHLQGLYLGXDO UHTXHVWHG ,I VXFK VWUXFWXUH RU SUHPLVHV EH
7KHEXLOGLQJRIILFLDOLVDXWKRUL]HGWRHQJDJHVXFK XQRFFXSLHGWKHEXLOGLQJRIILFLDOVKDOOILUVWPDNHD
H[SHUWRSLQLRQDVGHHPHGQHFHVVDU\WRUHSRUWXSRQ UHDVRQDEOHHIIRUWWRORFDWHWKHRZQHUWKHRZQHU¶V
XQXVXDO WHFKQLFDO LVVXHV WKDW DULVH VXEMHFW WR WKH DXWKRUL]HGDJHQWRURWKHUSHUVRQKDYLQJFKDUJHRU
DSSURYDORIWKHDSSRLQWLQJDXWKRULW\ FRQWURO RI WKH VWUXFWXUH RU SUHPLVHV DQG UHTXHVW
™ 7KH EXLOGLQJ RIILFLDO LV UHTXLUHG WR PDNH
HQWU\,IHQWU\LVUHIXVHGWKHEXLOGLQJRIILFLDOVKDOO
LQVSHFWLRQV DV QHFHVVDU\ WR GHWHUPLQH KDYHUHFRXUVHWRWKHUHPHGLHVSURYLGHGE\ODZWR
FRPSOLDQFH ZLWK WKH FRGH RU WR DFFHSW ZULWWHQ VHFXUHHQWU\
UHSRUWVRILQVSHFWLRQVE\DQDSSURYHGDJHQF\ ™ 7KHILUVWSDUWRIWKLVVHFWLRQHVWDEOLVKHVWKHULJKW
7KH LQVSHFWLRQ RI WKH ZRUN LQ SURJUHVV RU RIWKHEXLOGLQJRIILFLDOWRHQWHUWKHSUHPLVHVLQ
DFFRPSOLVKHG WR GDWH LV DQRWKHU VLJQLILFDQW RUGHU WR PDNH WKH SHUPLW LQVSHFWLRQV UHTXLUHG
HOHPHQWLQGHWHUPLQLQJFRGHFRPSOLDQFH:KLOH E\ 6HFWLRQ  3HUPLW DSSOLFDWLRQ IRUPV
D GHSDUWPHQW GRHV QRW KDYH WKH UHVRXUFHV WR W\SLFDOO\LQFOXGHDVWDWHPHQWLQWKHFHUWLILFDWLRQ
LQVSHFW HYHU\ DVSHFW RI DOO ZRUN WKH UHTXLUHG VLJQHG E\ WKH DSSOLFDQW ZKR LV WKH RZQHU RU
LQVSHFWLRQV DUH WKRVH WKDW DUH GLFWDWHG E\ RZQHU¶VDJHQWJUDQWLQJWKHEXLOGLQJRIILFLDOWKH
DGPLQLVWUDWLYH UXOHV DQG SURFHGXUHV EDVHG RQ DXWKRULW\WRHQWHUDUHDVFRYHUHGE\WKHSHUPLW
PDQ\ SDUDPHWHUV LQFOXGLQJ DYDLODEOH LQ RUGHU WR HQIRUFH FRGH SURYLVLRQV UHODWHG WR
LQVSHFWLRQ UHVRXUFHV ,Q RUGHU WR H[SDQG WKH WKHSHUPLW7KHULJKWWRHQWHURWKHUVWUXFWXUHVRU
DYDLODEOH UHVRXUFHV IRU LQVSHFWLRQ SXUSRVHV SUHPLVHV LV PRUH OLPLWHG )LUVW WR SURWHFW WKH
WKH EXLOGLQJ RIILFLDO PD\ DSSURYH DQ DJHQF\ ULJKW RI SULYDF\ WKH RZQHU RU RFFXSDQW PXVW
WKDW LQ KLV RU KHU RSLQLRQ LV REMHFWLYH DQG JUDQWWKHEXLOGLQJRIILFLDOSHUPLVVLRQEHIRUHDQ
FRPSHWHQWKDVDGHTXDWHHTXLSPHQWWRSHUIRUP LQWHULRU LQVSHFWLRQ RI WKH SURSHUW\ FDQ EH
DQ\ UHTXLUHG WHVWV DQG HPSOR\V H[SHULHQFHG FRQGXFWHG 3HUPLVVLRQ LV QRW UHTXLUHG IRU
SHUVRQQHOHGXFDWHGLQFRQGXFWLQJVXSHUYLVLQJ LQVSHFWLRQVWKDWFDQEHDFFRPSOLVKHGIURPWKH
DQG HYDOXDWLQJ WHVWV DQG LQVSHFWLRQV :KHQ SXEOLFULJKWRIZD\6HFRQGVXFKDFFHVVPD\
XQXVXDO H[WUDRUGLQDU\ RU FRPSOH[ WHFKQLFDO EHGHQLHGE\WKHRZQHURURFFXSDQW8QOHVVWKH
LVVXHV DULVH UHODWLYH WR EXLOGLQJ VDIHW\ WKH LQVSHFWRUKDVUHDVRQDEOHFDXVHWREHOLHYHWKDW
EXLOGLQJ RIILFLDO KDV WKH DXWKRULW\ WR VHHN WKH D YLRODWLRQ RI WKH FRGH H[LVWV DFFHVV PD\ EH
RSLQLRQ DQG DGYLFH RI H[SHUWV 6LQFH WKLV XQDWWDLQDEOH 7KLUG EXLOGLQJ RIILFLDOV PXVW
XVXDOO\ LQYROYHV WKH H[SHQGLWXUH RI IXQGV WKH SUHVHQW SURSHU LGHQWLILFDWLRQ VHH 6HFWLRQ

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

 DQG UHTXHVW DGPLWWDQFH GXULQJ UHFRUGV SHUWDLQLQJ WR SHUPLW DSSOLFDWLRQV
UHDVRQDEOH KRXUV²XVXDOO\ WKH QRUPDO SHUPLWV IHHV FROOHFWHG LQVSHFWLRQV QRWLFHV
EXVLQHVV KRXUV RI WKH HVWDEOLVKPHQW²WR EH DQG RUGHUV LVVXHG 6XFK GRFXPHQWDWLRQ
DGPLWWHG)RXUWKLQVSHFWLRQVPXVWEHDLPHGDW SURYLGHVDYDOXDEOHUHVRXUFHLITXHVWLRQVDULVH
VHFXULQJ RU GHWHUPLQLQJ FRPSOLDQFH ZLWK WKH UHJDUGLQJWKHGHSDUWPHQW¶VDFWLRQVZLWKUHVSHFW
SURYLVLRQVDQGLQWHQWRIWKHUHJXODWLRQVWKDWDUH WR D EXLOGLQJ 7KH FRGH GRHV QRW UHTXLUH WKDW
VSHFLILFDOO\ LQ WKH HVWDEOLVKHG VFRSH RI WKH FRQVWUXFWLRQ GRFXPHQWV EH NHSW DIWHU WKH
EXLOGLQJRIILFLDO¶VDXWKRULW\6HDUFKHVWRJDWKHU SURMHFW LV FRPSOHWH ,W UHTXLUHV WKDW RWKHU
LQIRUPDWLRQ IRU WKH SXUSRVH RI HQIRUFLQJ WKH GRFXPHQWV EH NHSW IRU WKH OHQJWK RI WLPH
RWKHU FRGHV RUGLQDQFHV RU UHJXODWLRQV DUH PDQGDWHGE\WKHFRXQWU\RUJRYHUQPHQWODZVRU
FRQVLGHUHGXQUHDVRQDEOHDQGDUHSURKLELWHGE\ DGPLQLVWUDWLYHUXOHVIRUUHWDLQLQJSXEOLFUHFRUGV
WKH)RXUWK$PHQGPHQWWRWKH86&RQVWLWXWLRQ
³5HDVRQDEOH FDXVH´ LQ WKH FRQWH[W RI WKLV  /LDELOLW\7KHEXLOGLQJRIILFLDOPHPEHURI
VHFWLRQ PXVW EH GLVWLQJXLVKHG IURP ³SUREDEOH WKH%RDUGRI$SSHDOVRUHPSOR\HHFKDUJHGZLWKWKH
FDXVH´ ZKLFK LV UHTXLUHG WR JDLQ DFFHVV WR HQIRUFHPHQW RI WKLV FRGH ZKLOH DFWLQJ IRU WKH
SURSHUW\LQFULPLQDOFDVHV7KHEXUGHQRISURRI MXULVGLFWLRQLQJRRGIDLWKDQGZLWKRXWPDOLFHLQWKH
HVWDEOLVKLQJ UHDVRQDEOH FDXVH PD\ YDU\ GLVFKDUJH RI WKH GXWLHV UHTXLUHG E\ WKLV FRGH RU
DPRQJMXULVGLFWLRQV8VXDOO\DQLQVSHFWRUPXVW RWKHUSHUWLQHQWODZRURUGLQDQFHVKDOOQRWWKHUHE\
VKRZWKDWWKHSURSHUW\LVVXEMHFWWRLQVSHFWLRQ EH UHQGHUHGFLYLOO\RUFULPLQDOO\OLDEOHSHUVRQDOO\
XQGHU WKH SURYLVLRQV RI WKH FRGH WKDW WKH DQG LV KHUHE\ UHOLHYHG IURP SHUVRQDO OLDELOLW\ IRU
LQWHUHVWV RI WKH SXEOLF¶V KHDOWK VDIHW\ DQG DQ\ GDPDJH DFFUXLQJ WR SHUVRQV RU SURSHUW\ DV D
ZHOIDUH RXWZHLJK WKH LQGLYLGXDO¶V ULJKW WR
UHVXOWRIDQ\DFWRUE\UHDVRQRIDQDFWRURPLVVLRQ
PDLQWDLQSULYDF\DQGWKDWVXFKDQLQVSHFWLRQLV
UHTXLUHG VROHO\ WR GHWHUPLQH FRPSOLDQFH ZLWK LQWKHGLVFKDUJHRIRIILFLDOGXWLHV
WKH SURYLVLRQV RI WKH FRGH 0DQ\ MXULVGLFWLRQV ™ 7KH EXLOGLQJ RIILFLDO RWKHU GHSDUWPHQW
GR QRW UHFRJQL]H WKH FRQFHSW RI DQ HPSOR\HHVDQGPHPEHUVRIWKHDSSHDOVERDUG
DGPLQLVWUDWLYH ZDUUDQW DQG PD\ UHTXLUH WKH DUH QRW LQWHQGHG WR EH KHOG OLDEOH IRU WKRVH
EXLOGLQJRIILFLDOWRSURYHSUREDEOHFDXVHLQRUGHU DFWLRQVSHUIRUPHGLQDFFRUGDQFHZLWKWKHFRGH
WR JDLQ DFFHVV XSRQ UHIXVDO 7KLV EXUGHQ RI LQ D UHDVRQDEOH DQG ODZIXO PDQQHU 7KH
SURRI LV XVXDOO\ PRUH VXEVWDQWLDO RIWHQ UHVSRQVLELOLW\ RI WKH EXLOGLQJ RIILFLDO LQ WKLV
UHTXLULQJ WKH EXLOGLQJ RIILFLDO WR VWLSXODWH LQ UHJDUGLVVXEMHFWWRFRXQWU\DQGJRYHUQPHQWDO
DGYDQFHZK\DFFHVVLVQHHGHGXVXDOO\DFFHVV ODZVWKDWPD\VXSHUVHGHWKLVSURYLVLRQ
LV UHVWULFWHG WR JDWKHULQJ HYLGHQFH IRU VHHNLQJ
DQ LQGLFWPHQW RU PDNLQJ DQ DUUHVW ZKDW /HJDO GHIHQVH  $Q\ VXLW RU FULPLQDO
VSHFLILF LWHPV RU LQIRUPDWLRQ LV VRXJKW LWV FRPSODLQWLQVWLWXWHGDJDLQVWDQRIILFHURUHPSOR\HH
UHOHYDQFH WR WKH FDVH DJDLQVW WKH LQGLYLGXDO EHFDXVH RI DQ DFW SHUIRUPHG E\ WKDW RIILFHU RU
VXEMHFWKRZNQRZOHGJHRIWKHUHOHYDQFHRIWKH HPSOR\HH LQ WKH ODZIXO GLVFKDUJH RI GXWLHV DQG
LQIRUPDWLRQRULWHPVVRXJKWZDVREWDLQHGDQG XQGHUWKHSURYLVLRQVRIWKLVFRGHVKDOOEHGHIHQGHG
KRZ WKH HYLGHQFH VRXJKW ZLOO EH XVHG ,Q DOO E\OHJDOUHSUHVHQWDWLYHVRIWKHMXULVGLFWLRQXQWLOWKH
VXFKFDVHVWKHULJKWWRSULYDF\PXVWDOZD\VEH ILQDOWHUPLQDWLRQRIWKHSURFHHGLQJV7KHEXLOGLQJ
ZHLJKHGDJDLQVWWKHULJKWRIWKHEXLOGLQJRIILFLDO
RIILFLDO RU DQ\ VXERUGLQDWH VKDOO QRW EH OLDEOH IRU
WR FRQGXFW DQ LQVSHFWLRQ WR YHULI\ WKDW SXEOLF
KHDOWKVDIHW\DQGZHOIDUHDUHQRWLQMHRSDUG\
FRVW LQ DQ\ DFWLRQ VXLW RU SURFHHGLQJ WKDW LV
6XFK LPSRUWDQW DQG FRPSOH[ FRQVWLWXWLRQDO LQVWLWXWHG LQ SXUVXDQFH RI WKH SURYLVLRQV RI WKLV
LVVXHV VKRXOG EH GLVFXVVHG ZLWK WKH FRGH
MXULVGLFWLRQ¶VOHJDOFRXQVHO-XULVGLFWLRQVVKRXOG ™ 7KLV VHFWLRQ HVWDEOLVKHV WKDW EXLOGLQJ RIILFLDOV
HVWDEOLVK SURFHGXUHV IRU VHFXULQJ WKH RUVXERUGLQDWHVPXVWQRWEHOLDEOHIRUFRVWVLQ
QHFHVVDU\ FRXUW RUGHUV ZKHQ DQ LQVSHFWLRQ LV DQ\ OHJDO DFWLRQ LQVWLWXWHG LQ UHVSRQVH WR WKH
GHHPHGQHFHVVDU\IROORZLQJDUHIXVDO SHUIRUPDQFH RI ODZIXO GXWLHV7KHVHFRVWV DUH
 'HSDUWPHQW UHFRUGV  7KH EXLOGLQJ WR EH ERUQH E\ WKH JRYHUQPHQW RU LWV
RIILFLDO VKDOO NHHS RIILFLDO UHFRUGV RI DSSOLFDWLRQV UHSUHVHQWDWLYHLHPXQLFLSDOLW\7KHEHVWZD\
WREHFHUWDLQWKDWWKHEXLOGLQJRIILFLDO¶VDFWLRQLV
UHFHLYHG SHUPLWV DQG FHUWLILFDWHV LVVXHG IHHV
D³ODZIXO GXW\´ LVDOZD\V WRFLWHWKH DSSOLFDEOH
FROOHFWHG UHSRUWV RI LQVSHFWLRQV DQG QRWLFHV DQG FRGHVHFWLRQRQZKLFKWKHHQIRUFHPHQWDFWLRQ
RUGHUVLVVXHG6XFKUHFRUGVVKDOOEHUHWDLQHGLQWKH LVEDVHG
RIILFLDOUHFRUGVIRUWKHSHULRGUHTXLUHGIRUUHWHQWLRQ
RISXEOLFUHFRUGV  $SSURYHG PDWHULDOV DQG HTXLSPHQW
0DWHULDOVHTXLSPHQWDQGGHYLFHVDSSURYHGE\WKH
™ ,QNHHSLQJZLWKWKHQHHGIRUHIILFLHQWEXVLQHVV EXLOGLQJRIILFLDOVKDOOEHFRQVWUXFWHGDQGLQVWDOOHG
SUDFWLFHV WKH EXLOGLQJ RIILFLDO PXVW NHHS
LQDFFRUGDQFHZLWKVXFKDSSURYDO

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

™ 7KHFRGHLVDFRPSLODWLRQRIFULWHULDZLWKZKLFK ™ 7KH EXLOGLQJ RIILFLDO PD\ DPHQG RU PDNH

PDWHULDOV HTXLSPHQW GHYLFHV DQG V\VWHPV H[FHSWLRQVWRWKHFRGHDVQHHGHGZKHUHVWULFW
PXVW FRPSO\ WR EH VXLWDEOH IRU D SDUWLFXODU FRPSOLDQFH LV LPSUDFWLFDO 2QO\ WKH EXLOGLQJ
DSSOLFDWLRQ 7KH EXLOGLQJ RIILFLDO KDV D GXW\ WR RIILFLDO KDV DXWKRULW\ WR JUDQW PRGLILFDWLRQV
HYDOXDWH VXFK PDWHULDOV HTXLSPHQW GHYLFHV &RQVLGHUDWLRQ RI D SDUWLFXODU GLIILFXOW\ LV WR EH
DQG V\VWHPV IRU FRGH FRPSOLDQFH DQG ZKHQ EDVHG RQ WKH DSSOLFDWLRQ RI WKH RZQHU RU
FRPSOLDQFH LV GHWHUPLQHG DSSURYH WKH VDPH RZQHU¶VDXWKRUL]HGDJHQWDQGDGHPRQVWUDWLRQ
IRUXVH7KHPDWHULDOVHTXLSPHQWGHYLFHVDQG WKDWWKHLQWHQWRIWKHFRGHLVDFFRPSOLVKHG7KLV
V\VWHPV PXVW EH FRQVWUXFWHG DQG LQVWDOOHG LQ VHFWLRQLVQRWLQWHQGHGWRSHUPLWVHWWLQJDVLGHRU
FRPSOLDQFH ZLWK DQG DOO FRQGLWLRQV DQG LJQRULQJDFRGHSURYLVLRQUDWKHULWLVLQWHQGHG
OLPLWDWLRQV FRQVLGHUHG DV D EDVLV IRU WKDW WR SURYLGH IRU WKH DFFHSWDQFH RI HTXLYDOHQW
DSSURYDO )RU H[DPSOH WKH PDQXIDFWXUHU¶V SURWHFWLRQ6XFKPRGLILFDWLRQVGRQRWKRZHYHU
LQVWUXFWLRQV DQG UHFRPPHQGDWLRQV DUH WR EH H[WHQGWRDFWLRQVWKDWDUHQHFHVVDU\WRFRUUHFW
IROORZHG LI WKH DSSURYDO RI WKH PDWHULDO ZDV YLRODWLRQV RI WKH FRGH ,Q RWKHU ZRUGV D FRGH
EDVHGHYHQLQSDUWRQWKRVHLQVWUXFWLRQVDQG YLRODWLRQ RU WKH H[SHQVH RI FRUUHFWLQJ RQH
UHFRPPHQGDWLRQV 7KH DSSURYDO DXWKRULW\ FDQQRWFRQVWLWXWHDSUDFWLFDOGLIILFXOW\
JLYHQ WKH EXLOGLQJ RIILFLDO LV D VLJQLILFDQW
UHVSRQVLELOLW\DQGLVDNH\WRFRGHFRPSOLDQFH  )ORRGKD]DUGDUHDV)RUH[LVWLQJ
7KHDSSURYDOSURFHVVLVILUVWWHFKQLFDODQGWKHQ EXLOGLQJV ORFDWHG LQ IORRG KD]DUG DUHDV IRU ZKLFK
DGPLQLVWUDWLYH DQG PXVW EH DSSURDFKHG DV UHSDLUV DOWHUDWLRQV DQG DGGLWLRQV FRQVWLWXWH
VXFK )RU H[DPSOH LI GDWD WR GHWHUPLQH FRGH VXEVWDQWLDOLPSURYHPHQWWKHEXLOGLQJRIILFLDOVKDOO
FRPSOLDQFHDUHUHTXLUHGVXFKGDWDVKRXOGEH QRW JUDQW PRGLILFDWLRQV WR SURYLVLRQV UHODWHG WR
LQ WKH IRUP RI WHVW UHSRUWV RU HQJLQHHULQJ IORRGUHVLVWDQFHXQOHVVDGHWHUPLQDWLRQLVPDGHWKDW
DQDO\VLV DQG QRW VLPSO\ WDNHQ IURP D VDOHV 
EURFKXUH  7KH DSSOLFDQW KDV SUHVHQWHG JRRG DQG
8VHGPDWHULDOVDQGHTXLSPHQW7KHXVH VXIILFLHQWFDXVHWKDWWKHXQLTXHFKDUDFWHULVWLFV
RIXVHGPDWHULDOVWKDWPHHWWKHUHTXLUHPHQWVRIWKLV RIWKHVL]HFRQILJXUDWLRQRUWRSRJUDSK\RIWKH
FRGH IRU QHZ PDWHULDOV LV SHUPLWWHG 8VHG VLWHUHQGHUFRPSOLDQFHZLWKWKHIORRGUHVLVWDQW
HTXLSPHQW DQG GHYLFHV VKDOO EH SHUPLWWHG WR EH FRQVWUXFWLRQSURYLVLRQVLQDSSURSULDWH
UHXVHG VXEMHFW WR WKH DSSURYDO RI WKH EXLOGLQJ  )DLOXUHWRJUDQWWKHPRGLILFDWLRQZRXOGUHVXOW
RIILFLDO LQH[FHSWLRQDOKDUGVKLS
 7KH JUDQWLQJ RI WKH PRGLILFDWLRQ ZLOO QRW
™ 7KH FRGH FULWHULD IRU PDWHULDOV DQG HTXLSPHQW
UHVXOW LQ LQFUHDVHG IORRG KHLJKWV DGGLWLRQDO
KDYH FKDQJHG RYHU WKH \HDUV (YDOXDWLRQ RI
WHVWLQJDQGPDWHULDOVWHFKQRORJ\KDVSHUPLWWHG
WKUHDWVWRSXEOLFVDIHW\H[WUDRUGLQDU\SXEOLF
WKH GHYHORSPHQW RI QHZ FULWHULD WKDW WKH ROG H[SHQVHQRUFUHDWHQXLVDQFHVFDXVHIUDXGRQ
PDWHULDOV PD\ QRW VDWLVI\ $V D UHVXOW XVHG RUYLFWLPL]DWLRQRIWKHSXEOLFRUFRQIOLFWZLWK
PDWHULDOV DUH UHTXLUHG WR EH HYDOXDWHG LQ WKH H[LVWLQJODZVRURUGLQDQFHV
VDPH PDQQHU DV QHZ PDWHULDOV 8VHG  7KHPRGLILFDWLRQLVWKHPLQLPXPQHFHVVDU\WR
PDWHULDOV HTXLSPHQW DQG GHYLFHV PXVW EH DIIRUGUHOLHIFRQVLGHULQJWKHIORRGKD]DUG
VSHFLILFDOO\DSSURYHGE\WKHEXLOGLQJRIILFLDODV  $ ZULWWHQ QRWLFH ZLOO EH SURYLGHG WR WKH
EHLQJHTXLYDOHQWWRWKDWUHTXLUHGE\WKHFRGHLI DSSOLFDQW VSHFLI\LQJ LI DSSOLFDEOH WKH
WKH\DUHWREHXVHGDJDLQLQDQHZLQVWDOODWLRQ GLIIHUHQFHEHWZHHQWKHGHVLJQIORRGHOHYDWLRQ
 0RGLILFDWLRQV  :KHUHYHU WKHUH DUH DQGWKHHOHYDWLRQWRZKLFKWKHEXLOGLQJLVWREH
SUDFWLFDO GLIILFXOWLHV LQYROYHG LQ FDUU\LQJ RXW WKH EXLOWVWDWLQJWKDWWKHFRVWRIIORRGLQVXUDQFH
SURYLVLRQVRI WKLV FRGH WKH EXLOGLQJRIILFLDOVKDOO ZLOOEHFRPPHQVXUDWHZLWKWKHLQFUHDVHGULVN
KDYH WKH DXWKRULW\ WR JUDQW PRGLILFDWLRQV IRU UHVXOWLQJIURPWKHUHGXFHGIORRUHOHYDWLRQDQG
LQGLYLGXDOFDVHVXSRQDSSOLFDWLRQRIWKHRZQHURU WKDW FRQVWUXFWLRQ EHORZ WKH GHVLJQ IORRG
RZQHU¶V DXWKRUL]HG UHSUHVHQWDWLYH SURYLGHG WKH HOHYDWLRQLQFUHDVHVULVNVWROLIHDQGSURSHUW\
EXLOGLQJ RIILFLDO VKDOO ILUVW ILQG WKDW VSHFLDO ™ 7KLVVHFWLRQDGGUHVVHVDGGLWLRQDOUHTXLUHPHQWV
LQGLYLGXDOUHDVRQPDNHVWKHVWULFWOHWWHURIWKLVFRGH IRU DOO EXLOGLQJV DQG VWUXFWXUHV LQ GHVLJQDWHG
LPSUDFWLFDOWKHPRGLILFDWLRQLVLQFRPSOLDQFHZLWK IORRGKD]DUGDUHDV7KHVHDUHDVDUHFRPPRQO\
WKH LQWHQW DQG SXUSRVH RI WKLV FRGH DQG VXFK UHIHUUHGWRDV³IORRGSODLQV´DQGDUHVKRZQRQ
PRGLILFDWLRQ GRHV QRW OHVVHQ KHDOWK DFFHVVLELOLW\ PDSV  SUHSDUHG E\ WKH )HGHUDO (PHUJHQF\
OLIHDQGILUHVDIHW\RUVWUXFWXUDOUHTXLUHPHQWV7KH 0DQDJHPHQW$JHQF\)(0$RUDQHTXLYDOHQW
GHWDLOV RI DFWLRQ JUDQWLQJ PRGLILFDWLRQV VKDOO EH DGRSWHG IORRG KD]DUG PDSV LQ 6DXGL $UDELD
UHFRUGHG DQG HQWHUHG LQ WKH ILOHV RI WKH EXLOGLQJ $SSHQGL[ * ³)ORRG5HVLVWDQW &RQVWUXFWLRQ´
6%&  FRQWDLQV WKH IORRGUHVLVWDQW
RIILFLDO

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

UHTXLUHPHQWV RU D IORRG SODLQ PDQDJHPHQW WKH FRGH 7KH ODVW VHQWHQFH LV VLPLODU WR WKDW
RUGLQDQFH WKDW FRQWDLQV DW D PLQLPXP WKH LQFOXGHG LQ 6HFWLRQ  UHJDUGLQJ WKH
SURYLVLRQV ,Q HLWKHU FDVH IORRG SODLQ UHMHFWLRQRIDSHUPLWDSSOLFDWLRQ7KHUHDVRQIRU
PDQDJHPHQWUHTXLUHPHQWVPXVWEHDSSOLHGIRU WKLVDGGLWLRQDOOHYHORIFRPPXQLFDWLRQLVWKDWWKH
DOO H[LVWLQJ EXLOGLQJV ORFDWHG LQ IORRG KD]DUG QRQDSSURYDORIDQDOWHUQDWLYHPHWKRGLVQRWWKH
DUHDV IRU EXLOGLQJV XQGHUJRLQJ UHSDLUV VDPHDVWKHQRQDSSURYDORIDSHUPLW,QRWKHU
DOWHUDWLRQV DQG DGGLWLRQV WKDW FRQVWLWXWH ZRUGV WKH SHUPLW DSSOLFDWLRQ PD\ KDYH EHHQ
VXEVWDQWLDOLPSURYHPHQWV7KHEXLOGLQJRIILFLDO DSSURYHG EXW DQ DOWHUQDWLYH PHWKRG PLJKW QRW
PD\JUDQWPRGLILFDWLRQVWRWKHSURYLVLRQVRIWKLV EH DSSURYHG XQWLO D ODWHU GDWH +RZHYHU WKH
VHFWLRQ IRU DQ\ RI WKH ILYH UHDVRQV OLVWHG LQ UHDVRQV IRU UHVSRQGLQJ WR WKH DSSOLFDQW LQ
6HFWLRQ ZULWLQJ DUH WKH VDPH DV QRWHG LQ WKH
FRPPHQWDU\ WR 6HFWLRQ  ³,Q RUGHU WR
 $OWHUQDWLYH PDWHULDOV GHVLJQ DQG HQVXUH HIIHFWLYH FRPPXQLFDWLRQ DQG GXH
PHWKRGV RI FRQVWUXFWLRQ DQG HTXLSPHQW  7KH SURFHVV RI ODZ WKH UHDVRQV IRU GHQLDO RI DQ
SURYLVLRQVRIWKLVFRGHDUHQRWLQWHQGHGWRSUHYHQW DSSOLFDWLRQ IRU D SHUPLW DUH UHTXLUHG WR EH LQ
WKH LQVWDOODWLRQRI DQ\ PDWHULDORU WR SURKLELWDQ\ ZULWLQJ´6LPLODUODQJXDJHLVIRXQGLQDOORIWKH
GHVLJQ RU PHWKRG RI FRQVWUXFWLRQ QRW VSHFLILFDOO\ 6%&V
SUHVFULEHG E\ WKLV FRGH SURYLGHG WKDW DQ\ VXFK
 5HVHDUFK UHSRUWV  6XSSRUWLQJ
DOWHUQDWLYH KDV EHHQ DSSURYHG $Q DOWHUQDWLYH
GDWD ZKHUH QHFHVVDU\ WR DVVLVW LQ WKH DSSURYDO RI
PDWHULDOGHVLJQRUPHWKRGRIFRQVWUXFWLRQVKDOOEH
PDWHULDOV RU DVVHPEOLHV QRW VSHFLILFDOO\ SURYLGHG
DSSURYHGZKHUHWKHEXLOGLQJRIILFLDOILQGVWKDWWKH
IRU LQ WKLV FRGH VKDOO FRQVLVW RI YDOLG UHVHDUFK
SURSRVHGGHVLJQLVVDWLVIDFWRU\DQGFRPSOLHVZLWK
UHSRUWVIURPDSSURYHGVRXUFHV
WKHLQWHQWRIWKHSURYLVLRQVRIWKLVFRGHDQGWKDWWKH
PDWHULDO PHWKRG RU ZRUN RIIHUHG LV IRU WKH ™ :KHQ DQ DOWHUQDWLYH PDWHULDO RU PHWKRG LV
SXUSRVH LQWHQGHG QRW OHVV WKDQ WKH HTXLYDOHQW RI SURSRVHGIRUFRQVWUXFWLRQLWLVLQFXPEHQWXSRQ
WKDW SUHVFULEHG LQ WKLV FRGH LQ TXDOLW\ VWUHQJWK WKH EXLOGLQJ RIILFLDO WR GHWHUPLQH ZKHWKHU WKLV
DOWHUQDWLYH LV LQ IDFW DQ HTXLYDOHQW WR WKH
HIIHFWLYHQHVVILUHUHVLVWDQFHGXUDELOLW\DQGVDIHW\
PHWKRGV SUHVFULEHG E\ WKH FRGH 5HSRUWV
:KHUHWKHDOWHUQDWLYHPDWHULDOGHVLJQRUPHWKRGRI SURYLGLQJ HYLGHQFH RI WKLV HTXLYDOHQF\ DUH
FRQVWUXFWLRQLV QRW DSSURYHGWKHEXLOGLQJRIILFLDO UHTXLUHGWREHVXSSOLHGE\DQDSSURYHGVRXUFH
VKDOO UHVSRQG LQ ZULWLQJ VWDWLQJ WKH UHDVRQV WKH PHDQLQJDVRXUFHWKDWWKHEXLOGLQJRIILFLDOILQGV
DOWHUQDWLYHZDVQRWDSSURYHG WREHUHOLDEOHDQGDFFXUDWH7KH,&&(YDOXDWLRQ
™ 7KH FRGH LV QRW LQWHQGHG WR LQKLELW LQQRYDWLYH 6HUYLFHRULWVHTXLYDOHQWLQ6DXGL$UDELDLVDQ
LGHDV RU WHFKQRORJLFDO DGYDQFHV $ H[DPSOH RI DQ DJHQF\ WKDW SURYLGHV UHVHDUFK
FRPSUHKHQVLYHUHJXODWRU\GRFXPHQWVXFKDVD UHSRUWVIRUDOWHUQDWLYHPDWHULDOVDQGPHWKRGV
EXLOGLQJ FRGH FDQQRW HQYLVLRQ DQG WKHQ  7HVWV  :KHQHYHU WKHUH LV
DGGUHVVDOOIXWXUHLQQRYDWLRQVLQWKHLQGXVWU\$V LQVXIILFLHQW HYLGHQFH RI FRPSOLDQFH ZLWK WKH
DUHVXOWDSHUIRUPDQFHFRGHRULWVHTXLYDOHQW SURYLVLRQVRIWKLVFRGHRUHYLGHQFHWKDWDPDWHULDO
LQ 6DXGL $UDELD PXVW EH DSSOLFDEOH WR DQG
RUPHWKRGGRHVQRWFRQIRUPWRWKHUHTXLUHPHQWVRI
SURYLGHDEDVLVIRUWKHDSSURYDORIDQLQFUHDVLQJ
QXPEHU RI QHZO\ GHYHORSHG LQQRYDWLYH WKLV FRGH RU LQ RUGHU WR VXEVWDQWLDWH FODLPV IRU
PDWHULDOV V\VWHPV DQG PHWKRGV IRU ZKLFK QR DOWHUQDWLYH PDWHULDOV RU PHWKRGV WKH EXLOGLQJ
FRGHWH[WRUUHIHUHQFHGVWDQGDUGV\HWH[LVW7KH RIILFLDOVKDOOKDYHWKHDXWKRULW\WRUHTXLUHWHVWVDV
IDFW WKDW D PDWHULDO SURGXFW RU PHWKRG RI HYLGHQFHRIFRPSOLDQFHWREHPDGHDWQRH[SHQVHWR
FRQVWUXFWLRQLVQRWDGGUHVVHGLQWKHFRGHLVQRW WKHMXULVGLFWLRQ7HVWPHWKRGVVKDOOEHDVVSHFLILHG
DQ LQGLFDWLRQ WKDW VXFK PDWHULDO SURGXFW RU LQWKLVFRGHRUE\RWKHUUHFRJQL]HGWHVWVWDQGDUGV,Q
PHWKRG LV LQWHQGHG WR EH SURKLELWHG 7KH WKH DEVHQFH RI UHFRJQL]HG DQG DFFHSWHG WHVW
EXLOGLQJ RIILFLDO LV H[SHFWHG WR DSSO\ VRXQG PHWKRGV WKH EXLOGLQJ RIILFLDO VKDOO DSSURYH WKH
WHFKQLFDO MXGJPHQW LQ DFFHSWLQJ PDWHULDOV WHVWLQJSURFHGXUHV7HVWVVKDOOEHSHUIRUPHGE\DQ
V\VWHPVRUPHWKRGVWKDWZKLOHQRWDQWLFLSDWHG
DSSURYHG DJHQF\ 5HSRUWV RI VXFK WHVWV VKDOO EH
E\WKHGUDIWHUVRIWKHFXUUHQWFRGHWH[WFDQEH
GHPRQVWUDWHGWRRIIHUHTXLYDOHQWSHUIRUPDQFH UHWDLQHG E\ WKH EXLOGLQJ RIILFLDO IRU WKH SHULRG
%\YLUWXHRILWVWH[WWKHFRGHUHJXODWHVQHZDQG UHTXLUHGIRUUHWHQWLRQ
LQQRYDWLYH FRQVWUXFWLRQ SUDFWLFHV ZKLOH ™ 7R SURYLGH WKH EDVLV RQ ZKLFK WKH EXLOGLQJ
DGGUHVVLQJ WKH UHODWLYH VDIHW\ RI EXLOGLQJ RIILFLDO FDQ PDNH D GHFLVLRQ UHJDUGLQJ DQ
RFFXSDQWV 7KH EXLOGLQJ RIILFLDO LV UHVSRQVLEOH DOWHUQDWLYH PDWHULDO RU PHWKRG VXIILFLHQW
IRU GHWHUPLQLQJ LI D UHTXHVWHG DOWHUQDWLYH WHFKQLFDOGDWDWHVWUHSRUWVDQGGRFXPHQWDWLRQ
SURYLGHV WKH HTXLYDOHQW OHYHO RI SURWHFWLRQ RI PXVWEHSURYLGHGIRUHYDOXDWLRQE\WKHEXLOGLQJ
SXEOLFKHDOWKVDIHW\DQGZHOIDUHDVUHTXLUHGE\ RIILFLDO ,I HYLGHQFH VDWLVIDFWRU\ WR WKH EXLOGLQJ

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

RIILFLDOLQGLFDWHVWKDWWKHDOWHUQDWLYHPDWHULDORU WKHVHDFWLYLWLHVFDQQRWEHJLQXQWLOWKHSHUPLWLV
FRQVWUXFWLRQ PHWKRG LV HTXLYDOHQW WR WKDW LVVXHG XQOHVV WKH DFWLYLW\ LV VSHFLILFDOO\
UHTXLUHG E\WKHFRGH WKH EXLOGLQJRIILFLDO PD\ H[HPSWHGE\6HFWLRQ2QO\WKHRZQHURU
DSSURYHLW$Q\VXFKDSSURYDOFDQQRWKDYHWKH DSHUVRQDXWKRUL]HGE\WKHRZQHUFDQDSSO\IRU
HIIHFWRIZDLYLQJDQ\UHTXLUHPHQWVRIWKHFRGH WKH SHUPLW 1RWH WKDW WKLV VHFWLRQ LQGLFDWHV D
7KHEXUGHQRISURRIRIHTXLYDOHQFHOLHVZLWKWKH QHHG IRU D SHUPLW IRU D FKDQJH LQ RFFXSDQF\
DSSOLFDQW ZKR SURSRVHV WKH XVH RI DOWHUQDWLYH HYHQLIQRZRUNLVFRQWHPSODWHG$OWKRXJKWKH
PDWHULDOVRUPHWKRGV7KHEXLOGLQJRIILFLDOPXVW RFFXSDQF\RIDEXLOGLQJRUSRUWLRQWKHUHRIPD\
UHTXLUH WKH VXEPLVVLRQ RI DQ\ DSSURSULDWH FKDQJHDQGWKHQHZDFWLYLW\LVVWLOOFODVVLILHGLQ
LQIRUPDWLRQ DQG GDWD WR DVVLVW LQ WKH WKHVDPHJURXSGLIIHUHQWFRGHSURYLVLRQVPD\
GHWHUPLQDWLRQRIHTXLYDOHQF\7KLVLQIRUPDWLRQ EHDSSOLFDEOH7KHPHDQVRIHJUHVVVWUXFWXUDO
VKRXOG EH VXEPLWWHG EHIRUH D SHUPLW FDQ EH ORDGV DQG OLJKW DQG YHQWLODWLRQ SURYLVLRQV DUH
LVVXHG 7KH W\SH RI LQIRUPDWLRQ UHTXLUHG H[DPSOHV RI UHTXLUHPHQWV WKDW DUH RFFXSDQF\
LQFOXGHV WHVW GDWD LQ DFFRUGDQFH ZLWK VHQVLWLYH7KHSXUSRVHRIWKHSHUPLWLVWRFDXVH
UHIHUHQFHGVWDQGDUGVHYLGHQFHRIFRPSOLDQFH WKH ZRUN WR EH UHYLHZHG DSSURYHG DQG
ZLWKWKHUHIHUHQFHGVWDQGDUGVSHFLILFDWLRQVDQG LQVSHFWHG WR GHWHUPLQH FRPSOLDQFH ZLWK WKH
GHVLJQ FDOFXODWLRQV $ UHVHDUFK UHSRUW LVVXHG FRGH
E\DQDXWKRULWDWLYHDJHQF\LVSDUWLFXODUO\XVHIXO
LQ SURYLGLQJ WKH EXLOGLQJ RIILFLDO ZLWK WKH $QQXDO SHUPLW  ,QVWHDG RI DQ LQGLYLGXDO
WHFKQLFDO EDVLV IRU HYDOXDWLRQ DQG DSSURYDO RI SHUPLW IRU HDFK DOWHUDWLRQ WR DQ DOUHDG\ DSSURYHG
QHZ DQG LQQRYDWLYH PDWHULDOV DQG PHWKRGV RI HOHFWULFDO JDV PHFKDQLFDO RU SOXPELQJ
FRQVWUXFWLRQ7KHXVHRIDXWKRULWDWLYHUHVHDUFK LQVWDOODWLRQ WKH EXLOGLQJ RIILFLDO LV DXWKRUL]HG WR
UHSRUWVFDQJUHDWO\DVVLVWWKHEXLOGLQJRIILFLDOE\ LVVXHDQDQQXDOSHUPLWXSRQDSSOLFDWLRQWKHUHIRUWR
UHGXFLQJ WKH WLPHFRQVXPLQJ HQJLQHHULQJ DQ\ SHUVRQ ILUP RU FRUSRUDWLRQ UHJXODUO\
DQDO\VLV QHFHVVDU\ WR UHYLHZ WKHVH PDWHULDOV HPSOR\LQJ RQH RUPRUH TXDOLILHG WUDGH SHUVRQV LQ
DQG PHWKRGV )DLOXUH WR DGHTXDWHO\ WKHEXLOGLQJVWUXFWXUHRURQWKHSUHPLVHVRZQHGRU
VXEVWDQWLDWH D UHTXHVW IRU WKH XVH RI DQ RSHUDWHGE\WKHDSSOLFDQWIRUWKHSHUPLW
DOWHUQDWLYH LV D YDOLG UHDVRQ IRU WKH EXLOGLQJ
RIILFLDOWRGHQ\DUHTXHVW $Q\WHVWVVXEPLWWHG ™ ,Q VRPH LQVWDQFHV VXFK DV ODUJH EXLOGLQJV RU
LQ VXSSRUW RI DQ DSSOLFDWLRQ PXVW KDYH EHHQ LQGXVWULDO IDFLOLWLHV WKH UHSDLU UHSODFHPHQW RU
SHUIRUPHG E\ DQ DJHQF\ DSSURYHG E\ WKH DOWHUDWLRQ RI HOHFWULFDO JDV PHFKDQLFDO RU
EXLOGLQJ RIILFLDO EDVHG RQ HYLGHQFH WKDW WKH SOXPELQJV\VWHPVRFFXUVRQDIUHTXHQWEDVLV
DJHQF\ KDV WKH WHFKQLFDO H[SHUWLVH WHVW 7KLVVHFWLRQDOORZVWKHEXLOGLQJRIILFLDOWRLVVXH
HTXLSPHQW DQG TXDOLW\ DVVXUDQFH WR SURSHUO\ DQ DQQXDO SHUPLW IRU WKLV ZRUN 7KLV UHOLHYHV
FRQGXFWDQGUHSRUWWKHQHFHVVDU\WHVWLQJ7KH ERWKWKHEXLOGLQJGHSDUWPHQWDQGWKHRZQHUVRI
WHVW UHSRUWV VXEPLWWHG WR WKH EXLOGLQJ RIILFLDO VXFK IDFLOLWLHV IURP WKH EXUGHQ RI ILOLQJ DQG
PXVW EH UHWDLQHG LQ DFFRUGDQFH ZLWK WKH SURFHVVLQJ LQGLYLGXDO DSSOLFDWLRQV IRU WKLV
UHTXLUHPHQWVRI6HFWLRQ DFWLYLW\KRZHYHUWKHUHDUHUHVWULFWLRQVRQZKR
LVHQWLWOHGWRWKHVHSHUPLWV7KH\FDQEHLVVXHG
6(&7,213(50,76 RQO\ IRU ZRUN RQ D SUHYLRXVO\ DSSURYHG
 5HTXLUHG  $Q\ RZQHU RU RZQHU¶V LQVWDOODWLRQ DQG RQO\ WR DQ LQGLYLGXDO RU
FRUSRUDWLRQ WKDW HPSOR\V SHUVRQV VSHFLILFDOO\
DXWKRUL]HGDJHQWZKRLQWHQGVWRUHSDLUDGGWRDOWHU
TXDOLILHG LQ WKH WUDGH IRU ZKLFK WKH SHUPLW LV
UHORFDWH GHPROLVK RU FKDQJH WKH RFFXSDQF\ RI D LVVXHG ,I WUDGHVSHRSOH ZKR SHUIRUP WKH ZRUN
EXLOGLQJ RU WR UHSDLU LQVWDOO DGG DOWHU UHPRYH LQYROYHG DUH UHTXLUHG WR EH OLFHQVHG LQ WKH
FRQYHUWRUUHSODFHDQ\HOHFWULFDOJDVPHFKDQLFDO MXULVGLFWLRQWKHQRQO\WKRVHSHUVRQV ZRXOG EH
RU SOXPELQJ V\VWHP WKH LQVWDOODWLRQ RI ZKLFK LV SHUPLWWHGWRSHUIRUPWKHZRUN,IWUDGHOLFHQVLQJ
UHJXODWHGE\WKLVFRGHRUWRFDXVHDQ\VXFKZRUNWR LVQRWUHTXLUHGWKHQWKHEXLOGLQJRIILFLDOQHHGV
EH SHUIRUPHG VKDOO ILUVW PDNH DSSOLFDWLRQ WR WKH WRUHYLHZDQGDSSURYHWKHTXDOLILFDWLRQVRIWKH
EXLOGLQJRIILFLDODQGREWDLQWKHUHTXLUHGSHUPLW SHUVRQVZKRZLOOEHSHUIRUPLQJWKHZRUN7KH
DQQXDO SHUPLW FDQ DSSO\ RQO\ WR WKH LQGLYLGXDO
™ 7KLV VHFWLRQ FRQWDLQV WKH DGPLQLVWUDWLYH UXOHV SURSHUW\ WKDW LV RZQHG RU RSHUDWHG E\ WKH
JRYHUQLQJ WKH LVVXDQFH VXVSHQVLRQ DSSOLFDQW
UHYRFDWLRQRUPRGLILFDWLRQRIEXLOGLQJSHUPLWV,W
DOVR HVWDEOLVKHV KRZ DQG E\ ZKRP WKH $QQXDO SHUPLW UHFRUGV  7KH SHUVRQ WR
DSSOLFDWLRQIRUDEXLOGLQJSHUPLWLVWREHPDGH ZKRP DQ DQQXDO SHUPLW LV LVVXHG VKDOO NHHS D
KRZ LW LV WR EH SURFHVVHG IHHV DQG ZKDW GHWDLOHG UHFRUG RI DOWHUDWLRQV PDGH XQGHU VXFK
LQIRUPDWLRQLWPXVWFRQWDLQRUKDYHDWWDFKHGWR DQQXDO SHUPLW 7KH EXLOGLQJ RIILFLDO VKDOO KDYH
LW ,Q JHQHUDO D SHUPLW LV UHTXLUHG IRU DOO DFFHVVWRVXFKUHFRUGVDWDOOWLPHVRUVXFKUHFRUGV
DFWLYLWLHV WKDW DUH UHJXODWHG E\ WKH FRGH RU LWV
UHIHUHQFHG FRGHV VHH 6HFWLRQ  DQG

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

VKDOO EH ILOHG ZLWK WKH EXLOGLQJ RIILFLDO DV 

GHVLJQDWHG  3RUWDEOHKHDWLQJDSSOLDQFH
™ 7KH ZRUN SHUIRUPHG LQ DFFRUGDQFH ZLWK DQ
 5HSODFHPHQWRIDQ\PLQRUSDUWWKDWGRHVQRW
DQQXDOSHUPLWPXVWEHLQVSHFWHGE\WKHEXLOGLQJ DOWHU DSSURYDO RI HTXLSPHQW RU PDNH VXFK
RIILFLDOVRLWLVQHFHVVDU\WRNQRZWKHORFDWLRQ HTXLSPHQWXQVDIH
RIVXFKZRUNDQGZKHQLWZDVSHUIRUPHG7KLV 
FDQEHDFFRPSOLVKHGE\KDYLQJUHFRUGVRIWKH 0HFKDQLFDO
ZRUN DYDLODEOH WR WKH EXLOGLQJ RIILFLDO HLWKHU DW 
WKH SUHPLVHV RU LQ KLV RU KHU RIILFH DV  3RUWDEOHKHDWLQJDSSOLDQFH
GHWHUPLQHGE\WKHRIILFLDO  3RUWDEOHYHQWLODWLRQHTXLSPHQW
 :RUNH[HPSWIURPSHUPLW([HPSWLRQV  3RUWDEOHFRROLQJXQLW
IURPSHUPLWUHTXLUHPHQWVRIWKLVFRGHVKDOOQRWEH  6WHDPKRWRUFKLOOHGZDWHUSLSLQJZLWKLQDQ\
GHHPHGWR JUDQWDXWKRUL]DWLRQIRUDQ\ ZRUNWR EH KHDWLQJRUFRROLQJHTXLSPHQWUHJXODWHGE\WKLV
GRQHLQDQ\PDQQHULQYLRODWLRQRIWKHSURYLVLRQVRI FRGH
WKLV FRGH RU DQ\ RWKHU ODZV RU RUGLQDQFHV RI WKLV  5HSODFHPHQWRIDQ\SDUWWKDWGRHVQRWDOWHULWV
MXULVGLFWLRQ 3HUPLWV VKDOO QRW EH UHTXLUHG IRU WKH DSSURYDORUPDNHLWXQVDIH
IROORZLQJ  3RUWDEOHHYDSRUDWLYHFRROHU
%XLOGLQJ  6HOIFRQWDLQHG UHIULJHUDWLRQ V\VWHP
FRQWDLQLQJNJRUOHVVRIUHIULJHUDQWDQG
 6LGHZDONVDQGGULYHZD\VQRWPRUHWKDQ DFWXDWHGE\PRWRUVRI:RUOHVV
PPDERYHJUDGHDQGQRWRYHUDQ\EDVHPHQW 
RU VWRU\ EHORZ DQG WKDW DUH QRW SDUW RI DQ 3OXPELQJ
DFFHVVLEOHURXWH 
 3DLQWLQJSDSHULQJWLOLQJFDUSHWLQJFDELQHWV  7KH VWRSSLQJ RI OHDNV LQ GUDLQV ZDWHU VRLO
FRXQWHUWRSVDQGVLPLODUILQLVKZRUN ZDVWHRUYHQWSLSHSURYLGHGKRZHYHUWKDWLI
 7HPSRUDU\ PRWLRQ SLFWXUH WHOHYLVLRQ DQG DQ\ FRQFHDOHG WUDS GUDLQSLSH ZDWHU VRLO
WKHDWHUVWDJHVHWVDQGVFHQHU\ ZDVWHRUYHQWSLSHEHFRPHVGHIHFWLYHDQGLW
 6KDGHFORWKVWUXFWXUHVFRQVWUXFWHGIRUQXUVHU\ EHFRPHVQHFHVVDU\WRUHPRYHDQGUHSODFHWKH
RU DJULFXOWXUDO SXUSRVHV DQG QRW LQFOXGLQJ VDPHZLWKQHZ PDWHULDOVXFKZRUNVKDOOEH
VHUYLFHV\VWHPV FRQVLGHUHGDVQHZZRUNDQGDSHUPLWVKDOOEH
 :LQGRZ DZQLQJV VXSSRUWHG E\ DQ H[WHULRU REWDLQHGDQGLQVSHFWLRQPDGHDVSURYLGHGLQ
ZDOORI*URXS5RU*URXS8RFFXSDQFLHV WKLVFRGH
 0RYDEOH FDVHV FRXQWHUV DQG SDUWLWLRQV QRW  7KHFOHDULQJRIVWRSSDJHVRUWKHUHSDLULQJRI
RYHUPLQKHLJKW OHDNV LQ SLSHV YDOYHV RU IL[WXUHV DQG WKH
UHPRYDO DQG UHLQVWDOODWLRQ RI ZDWHU FORVHWV
(OHFWULFDO SURYLGHG VXFK UHSDLUV GR QRW LQYROYH RU
UHTXLUH WKH UHSODFHPHQWRU UHDUUDQJHPHQWRI
5HSDLUV DQG PDLQWHQDQFH 0LQRU UHSDLU ZRUN YDOYHVSLSHVRUIL[WXUHV
LQFOXGLQJ WKH UHSODFHPHQW RI ODPSV RU WKH ™ 6HFWLRQHVVHQWLDOO\UHTXLUHVDSHUPLWIRU
FRQQHFWLRQ RI DSSURYHG SRUWDEOH HOHFWULFDO DQ\DFWLYLW\LQYROYLQJZRUNRQDEXLOGLQJDQGLWV
HTXLSPHQW WR DSSURYHG SHUPDQHQWO\ LQVWDOOHG V\VWHPVDQGRWKHUVWUXFWXUHV7KLVVHFWLRQOLVWV
UHFHSWDFOHV DFWLYLWLHVDOORZHGZLWKRXWILUVWREWDLQLQJDSHUPLW
5DGLR DQG WHOHYLVLRQ WUDQVPLWWLQJ VWDWLRQV 7KH IURPWKHEXLOGLQJGHSDUWPHQW1RWHWKDWLQVRPH
SURYLVLRQVRIWKLVFRGHVKDOOQRWDSSO\WRHOHFWULFDO FDVHV VXFK DV ,WHPV  DQG  WKH ZRUN LV
HTXLSPHQW XVHG IRU UDGLR DQG WHOHYLVLRQ H[HPSWRQO\IRUFHUWDLQRFFXSDQFLHV)XUWKHULW
LV LQWHQGHG WKDW HYHQ WKRXJK ZRUN PD\ EH
WUDQVPLVVLRQV EXW GR DSSO\ WR HTXLSPHQW DQG
H[HPSWHG IRU SHUPLW SXUSRVHV LW PXVW VWLOO
ZLULQJIRUSRZHUVXSSO\WKHLQVWDOODWLRQVRIWRZHUV FRPSO\ ZLWK WKH FRGH DQG WKH RZQHU LV
DQGDQWHQQDV UHVSRQVLEOHIRUSURSHUDQGVDIHFRQVWUXFWLRQIRU
7HPSRUDU\WHVWLQJV\VWHPV$SHUPLWVKDOOQRWEH DOO ZRUN EHLQJ GRQH :RUN H[HPSWHG E\ WKH
UHTXLUHG IRU WKH LQVWDOODWLRQ RI DQ\ WHPSRUDU\ FRGHVDGRSWHGE\UHIHUHQFHLQ6HFWLRQLV
V\VWHP UHTXLUHG IRU WKH WHVWLQJ RU VHUYLFLQJ RI DOVRLQFOXGHGKHUH
HOHFWULFDOHTXLSPHQWRUDSSDUDWXV
(PHUJHQF\ UHSDLUV  :KHUH HTXLSPHQW
UHSODFHPHQWVDQGUHSDLUVPXVWEHSHUIRUPHGLQDQ
*DV
HPHUJHQF\VLWXDWLRQWKHSHUPLWDSSOLFDWLRQVKDOOEH

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

VXEPLWWHGZLWKLQWKHQH[WZRUNLQJEXVLQHVVGD\WR  ,GHQWLI\DQGGHVFULEHWKHZRUNLQDFFRUGDQFH

WKHEXLOGLQJRIILFLDO ZLWK&KDSWHUWREHFRYHUHGE\WKHSHUPLWIRU
™ 7KLV VHFWLRQ UHFRJQL]HV WKDW LQ VRPH FDVHV
ZKLFKDSSOLFDWLRQLVPDGH
HPHUJHQF\UHSODFHPHQWDQGUHSDLUZRUNPXVW  'HVFULEHWKHODQGRQZKLFKWKHSURSRVHGZRUN
EH GRQH DV TXLFNO\ DV SRVVLEOH DQG LW LV QRW LV WR EH GRQH E\ OHJDO GHVFULSWLRQ VWUHHW
SUDFWLFDOWRWDNHWKHWLPHQHFHVVDU\WRDSSO\IRU DGGUHVVRUVLPLODUGHVFULSWLRQWKDWZLOOUHDGLO\
DQGREWDLQDSSURYDO$SHUPLWIRUWKHZRUNPXVW LGHQWLI\ DQG GHILQLWHO\ ORFDWH WKH SURSRVHG
EH REWDLQHG WKH QH[W GD\ WKDW WKH EXLOGLQJ EXLOGLQJRUZRUN
GHSDUWPHQW LV RSHQ IRU EXVLQHVV $Q\ ZRUN  ,QGLFDWHWKHXVHDQGRFFXSDQF\IRUZKLFKWKH
SHUIRUPHGEHIRUHWKHSHUPLWLVLVVXHGPXVWEH SURSRVHGZRUNLVLQWHQGHG
GRQH LQ DFFRUGDQFH ZLWK WKH FRGH DQG  %H DFFRPSDQLHG E\ FRQVWUXFWLRQ GRFXPHQWV
FRUUHFWHGLIQRWDSSURYHGE\WKHEXLOGLQJRIILFLDO
DQGRWKHULQIRUPDWLRQDVUHTXLUHGLQ6HFWLRQ
5HSDLUV  $SSOLFDWLRQ RU QRWLFH WR WKH 
EXLOGLQJRIILFLDOLVQRWUHTXLUHGIRURUGLQDU\UHSDLUV  6WDWHWKHYDOXDWLRQRIWKHSURSRVHGZRUN
WRVWUXFWXUHVDQGLWHPVOLVWHGLQ6HFWLRQ6XFK  %HVLJQHGE\WKHDSSOLFDQWRUWKHDSSOLFDQW¶V
UHSDLUV VKDOO QRW LQFOXGH WKH FXWWLQJ DZD\ RI DQ\ DXWKRUL]HGDJHQW
ZDOO SDUWLWLRQ RU SRUWLRQ WKHUHRI WKH UHPRYDO RU  *LYH VXFK RWKHU GDWD DQG LQIRUPDWLRQ DV
FXWWLQJ RI DQ\ VWUXFWXUDO EHDP RU ORDGEHDULQJ UHTXLUHGE\WKHEXLOGLQJRIILFLDO
VXSSRUWRUWKHUHPRYDORUFKDQJHRIDQ\UHTXLUHG ™ 7KLVVHFWLRQUHTXLUHVWKDWDZULWWHQDSSOLFDWLRQ
PHDQV RI HJUHVV RU UHDUUDQJHPHQW RI SDUWV RI D IRU D SHUPLW EH ILOHG RQ IRUPV SURYLGHG E\ WKH
VWUXFWXUH DIIHFWLQJ WKH HJUHVV UHTXLUHPHQWV QRU EXLOGLQJ GHSDUWPHQW DQG LW GHWDLOV WKH
VKDOORUGLQDU\UHSDLUVLQFOXGHDGGLWLRQWRDOWHUDWLRQ LQIRUPDWLRQUHTXLUHGRQWKHDSSOLFDWLRQ3HUPLW
RI UHSODFHPHQW RU UHORFDWLRQ RI DQ\ VWDQGSLSH IRUPVZLOOW\SLFDOO\KDYHVXIILFLHQWVSDFHWRZULWH
ZDWHU VXSSO\ VHZHU GUDLQDJH GUDLQ OHDGHU JDV D YHU\ EULHI GHVFULSWLRQ RI WKH ZRUN WR EH
VRLOZDVWHYHQWRUVLPLODUSLSLQJHOHFWULFZLULQJ DFFRPSOLVKHGZKLFKLVVXIILFLHQWRQO\IRUVPDOO
RUPHFKDQLFDORURWKHUZRUNDIIHFWLQJSXEOLFKHDOWK MREV)RUODUJHUSURMHFWVWKHGHVFULSWLRQZLOOEH
RUJHQHUDOVDIHW\ DXJPHQWHG E\ FRQVWUXFWLRQ GRFXPHQWV DV
LQGLFDWHG LQ ,WHP  $V UHTXLUHG E\ 6HFWLRQ
™ 7KLVVHFWLRQGLVWLQJXLVKHVEHWZHHQZKDWPLJKW WKHDSSOLFDQW PXVW EHWKHRZQHURIWKH
EH WHUPHG E\ VRPH DV UHSDLUV EXW DUH LQ IDFW SURSHUW\ RU DQ DXWKRUL]HG DJHQW RI WKH RZQHU
DOWHUDWLRQVWKDWFDXVHWKHFRGHWREHDSSOLFDEOH VXFK DV DQ HQJLQHHU DUFKLWHFW FRQWUDFWRU RU
DQG RUGLQDU\ UHSDLUV ZKLFK DUH PDLQWHQDQFH WHQDQW7KHDSSOLFDQWPXVWVLJQWKHDSSOLFDWLRQ
DFWLYLWLHVDQGWKXVGRQRWUHTXLUHDSHUPLW DQGSHUPLWIRUPVW\SLFDOO\LQFOXGHDVWDWHPHQW
WKDWLIWKHDSSOLFDQWLVQRWWKHRZQHUKHRUVKH
3XEOLF VHUYLFH DJHQFLHV  $ SHUPLW VKDOO KDV SHUPLVVLRQ IURP WKH RZQHU WR PDNH WKH
QRW EH UHTXLUHG IRU WKH LQVWDOODWLRQ DOWHUDWLRQ RU DSSOLFDWLRQ
UHSDLU RI JHQHUDWLRQ WUDQVPLVVLRQ GLVWULEXWLRQ RU
PHWHULQJ RU RWKHU UHODWHG HTXLSPHQW WKDW LV XQGHU $FWLRQ RQ DSSOLFDWLRQ  7KH EXLOGLQJ
WKH RZQHUVKLS DQG FRQWURO RI SXEOLF VHUYLFH RIILFLDO VKDOO H[DPLQH RU FDXVH WR EH H[DPLQHG
DJHQFLHVE\HVWDEOLVKHGULJKW DSSOLFDWLRQV IRU SHUPLWV DQG DPHQGPHQWV WKHUHWR
ZLWKLQ D UHDVRQDEOH WLPH DIWHU ILOLQJ ,I WKH
™ 8WLOLW\RZQHG WUDQVPLVVLRQ OLQHV DQG PHWHULQJ DSSOLFDWLRQ RU WKH FRQVWUXFWLRQ GRFXPHQWV GR QRW
HTXLSPHQW WKDW VXSSO\ HOHFWULFLW\ JDV ZDWHU
FRQIRUPWRWKHUHTXLUHPHQWVRISHUWLQHQWODZVWKH
WHOHSKRQH WHOHYLVLRQ FDEOH HWF PD\ EH
ZRUNHG RQ ZLWKRXW D SHUPLW 8WLOLWLHV W\SLFDOO\ EXLOGLQJ RIILFLDO VKDOO UHMHFW VXFK DSSOLFDWLRQ LQ
DUH UHJXODWHG E\ RWKHU ODZV WKDW JLYH WKHP ZULWLQJVWDWLQJWKHUHDVRQVWKHUHIRU,IWKHEXLOGLQJ
VSHFLILF ULJKWV DQG DXWKRULW\ LQ WKLV DUHD RIILFLDOLVVDWLVILHGWKDWWKHSURSRVHGZRUNFRQIRUPV
$SSOLDQFHV RU HTXLSPHQW LQVWDOOHG RU VHUYLFHG WR WKH UHTXLUHPHQWV RI WKLV FRGH DQG ODZV DQG
EXWQRWRZQHGRUFRQWUROOHGE\VXFKDJHQFLHVLV RUGLQDQFHVDSSOLFDEOHWKHUHWRWKHEXLOGLQJRIILFLDO
QRWH[HPSWIURPDSHUPLW VKDOOLVVXHDSHUPLWWKHUHIRUDVVRRQDVSUDFWLFDEOH
 $SSOLFDWLRQ IRU SHUPLW  7R REWDLQ D ™ 7KLVVHFWLRQUHTXLUHVWKHEXLOGLQJRIILFLDOWRDFW
SHUPLWWKHDSSOLFDQWVKDOOILUVWILOHDQ DSSOLFDWLRQ ZLWKUHDVRQDEOHVSHHGRQDSHUPLWDSSOLFDWLRQ
WKHUHIRU LQ ZULWLQJ RQ D IRUP IXUQLVKHG E\ WKH ,Q VRPH LQVWDQFHV WKLV WLPH SHULRG LV VHW E\
EXLOGLQJRIILFLDOIRUWKDWSXUSRVH6XFKDSSOLFDWLRQ FRXQWU\ODZ7KHEXLOGLQJRIILFLDOPXVWUHIXVHWR
VKDOO LVVXH D SHUPLW ZKHQ WKH DSSOLFDWLRQ DQG
DFFRPSDQ\LQJ GRFXPHQWV GR QRW FRQIRUP WR
WKH FRGH ,Q RUGHU WR HQVXUH HIIHFWLYH
FRPPXQLFDWLRQ DQG GXH SURFHVV RI ODZ WKH

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

UHDVRQVIRUGHQLDORIDQDSSOLFDWLRQIRUDSHUPLW SHUPLW FDQ EH VXVSHQGHG RU UHYRNHG LQ

DUHUHTXLUHGWREHLQZULWLQJ2QFHWKHEXLOGLQJ DFFRUGDQFHZLWK6HFWLRQ
RIILFLDO GHWHUPLQHV WKDW WKH ZRUN GHVFULEHG
FRQIRUPVWRWKHFRGHDQGRWKHUDSSOLFDEOHODZV  ([SLUDWLRQ  (YHU\ SHUPLW LVVXHG VKDOO
WKHSHUPLWPXVWEHLVVXHGXSRQSD\PHQWRIWKH EHFRPH LQYDOLG XQOHVV WKH ZRUN RQ WKH VLWH
IHHVUHTXLUHGE\6HFWLRQ DXWKRUL]HG E\ VXFK SHUPLW LV FRPPHQFHG ZLWKLQ
GD\VDIWHULWVLVVXDQFHRULIWKHZRUNDXWKRUL]HG
7LPH OLPLWDWLRQ RI DSSOLFDWLRQ  $Q RQ WKH VLWH E\ VXFK SHUPLW LV VXVSHQGHG RU
DSSOLFDWLRQIRUDSHUPLWIRUDQ\SURSRVHGZRUNVKDOO DEDQGRQHGIRUDSHULRGRIGD\VDIWHUWKHWLPH
EHGHHPHGWRKDYHEHHQDEDQGRQHGGD\VDIWHU WKH ZRUN LV FRPPHQFHG 7KH EXLOGLQJ RIILFLDO LV
WKHGDWHRIILOLQJXQOHVVVXFKDSSOLFDWLRQKDVEHHQ DXWKRUL]HG WR JUDQW LQ ZULWLQJ RQH RU PRUH
SXUVXHGLQJRRGIDLWKRUDSHUPLWKDVEHHQLVVXHG H[WHQVLRQVRI WLPHIRU SHULRGVQRW PRUH WKDQ 
H[FHSW WKDW WKH EXLOGLQJ RIILFLDO LV DXWKRUL]HG WR GD\V HDFK 7KH H[WHQVLRQ VKDOO EH UHTXHVWHG LQ
JUDQWRQHRUPRUHH[WHQVLRQVRIWLPHIRUDGGLWLRQDO ZULWLQJDQGMXVWLILDEOHFDXVHGHPRQVWUDWHG
SHULRGVQRWH[FHHGLQJGD\VHDFK7KHH[WHQVLRQ
VKDOO EHUHTXHVWHGLQ ZULWLQJ DQGMXVWLILDEOHFDXVH ™ 7KHSHUPLWEHFRPHVLQYDOLGXQGHUWZRGLVWLQFW
GHPRQVWUDWHG VLWXDWLRQV² ERWK EDVHG RQ D GD\ SHULRG
7KHILUVWVLWXDWLRQLVZKHQQRZRUNKDVVWDUWHG
™ 7\SLFDOO\ DQ DSSOLFDWLRQ IRU D SHUPLW LV GD\VIURPWKHLVVXDQFHRIWKHSHUPLW7KH
VXEPLWWHGDQGJRHVWKURXJKDUHYLHZ SURFHVV VHFRQG VLWXDWLRQ LV ZKHQ WKH DXWKRUL]HG ZRUN
WKDW HQGV ZLWK WKH LVVXDQFH RI D SHUPLW ,I D KDVVWRSSHGIRUGD\V7KHSHUVRQZKRZDV
SHUPLWKDVQRWEHHQLVVXHGGD\VDIWHUWKH LVVXHGWKHSHUPLWVKRXOGEHQRWLILHGLQZULWLQJ
GDWH RI ILOLQJ KRZHYHU WKH DSSOLFDWLRQ LV WKDWWKHSHUPLW LV LQYDOLGDQGZKDWVWHSVPXVW
FRQVLGHUHG DEDQGRQHG XQOHVV WKH DSSOLFDQW EHWDNHQWRUHLQVWDWHLWDQGUHVWDUWWKHZRUN7KH
ZDVGLOLJHQWLQHIIRUWVWRREWDLQWKHSHUPLW7KH EXLOGLQJRIILFLDOKDVWKHDXWKRULW\WRH[WHQGWKLV
EXLOGLQJRIILFLDOKDVWKHDXWKRULW\WRH[WHQGWKLV WLPH OLPLWDWLRQ LQ LQFUHPHQWV RI  GD\V
WLPH OLPLWDWLRQ LQ LQFUHPHQWV RI  GD\V SURYLGHG WKH H[WHQVLRQ LV UHTXHVWHG LQ ZULWLQJ
SURYLGHGWKHUHLVUHDVRQDEOHFDXVH7KLVZRXOG DQGWKHUHLVUHDVRQDEOHFDXVHW\SLFDOO\HYHQWV
FRYHU GHOD\V EH\RQG WKH DSSOLFDQW¶V FRQWURO EH\RQGWKHSHUPLWKROGHU¶VFRQWURO
VXFKDVSUHUHTXLVLWHSHUPLWVRUDSSURYDOVIURP
RWKHUDXWKRULWLHVLQJRYHUQPHQWRUFRXQWU\7KH  6XVSHQVLRQ RU UHYRFDWLRQ 7KH EXLOGLQJ
LQWHQWRIWKLVVHFWLRQLVWROLPLWWKHWLPHEHWZHHQ RIILFLDOLVDXWKRUL]HGWRVXVSHQGRUUHYRNHDSHUPLW
WKH UHYLHZ SURFHVV DQG WKH LVVXDQFH RI D LVVXHGXQGHUWKHSURYLVLRQVRIWKLVFRGHZKHUHYHU
SHUPLW WKH SHUPLW LV LVVXHG LQ HUURU RU RQ WKH EDVLV RI
LQFRUUHFWLQDFFXUDWHRULQFRPSOHWHLQIRUPDWLRQRU
 9DOLGLW\ RI SHUPLW  7KH LVVXDQFH RU
LQYLRODWLRQRIDQ\RUGLQDQFHRUUHJXODWLRQRUDQ\RI
JUDQWLQJRIDSHUPLWVKDOOQRWEHFRQVWUXHGWREHD
WKHSURYLVLRQVRIWKLVFRGH
SHUPLWIRURUDQDSSURYDORIDQ\YLRODWLRQRIDQ\
RI WKH SURYLVLRQV RI WKLV FRGH RU RI DQ\ RWKHU ™ $SHUPLWLVLQUHDOLW\DOLFHQVHWRSURFHHGZLWK
RUGLQDQFHRIWKHMXULVGLFWLRQ3HUPLWVSUHVXPLQJWR WKH ZRUN 7KH EXLOGLQJ RIILFLDO KRZHYHU FDQ
JLYHDXWKRULW\WRYLRODWHRUFDQFHOWKHSURYLVLRQVRI VXVSHQGRUUHYRNHSHUPLWVVKRZQWREHEDVHG
WKLV FRGH RU RWKHU RUGLQDQFHV RI WKH MXULVGLFWLRQ DOO RU LQ SDUW RQ DQ\ IDOVH VWDWHPHQW RU
PLVUHSUHVHQWDWLRQRIIDFW$SHUPLWFDQDOVREH
VKDOOQRWEHYDOLG7KHLVVXDQFHRIDSHUPLWEDVHG
VXVSHQGHGRUUHYRNHGLILWZDVLVVXHGLQHUURU
RQFRQVWUXFWLRQGRFXPHQWVDQGRWKHUGDWDVKDOOQRW VXFK DV DQ RPLWWHG SUHUHTXLVLWH DSSURYDO RU
SUHYHQW WKH EXLOGLQJ RIILFLDO IURP UHTXLULQJ WKH FRGH YLRODWLRQ LQGLFDWHG RQ WKH FRQVWUXFWLRQ
FRUUHFWLRQRIHUURUVLQWKHFRQVWUXFWLRQGRFXPHQWV GRFXPHQWV $Q DSSOLFDQW PD\ VXEVHTXHQWO\
DQGRWKHUGDWD7KHEXLOGLQJRIILFLDOLVDXWKRUL]HGWR DSSO\IRUDUHLQVWDWHPHQWRIWKHSHUPLWZLWKWKH
SUHYHQW RFFXSDQF\ RU XVH RI D VWUXFWXUHZKHUH LQ DSSURSULDWH FRUUHFWLRQV RU PRGLILFDWLRQV PDGH
YLRODWLRQRIWKLVFRGHRURIDQ\RWKHURUGLQDQFHVRI WRWKHDSSOLFDWLRQDQGFRQVWUXFWLRQGRFXPHQWV
WKLVMXULVGLFWLRQ  3ODFHPHQWRISHUPLW7KHEXLOGLQJSHUPLW
™ 7KLV VHFWLRQ VWDWHV WKH IXQGDPHQWDO SUHPLVH RUFRS\VKDOOEHNHSWRQWKHVLWHRIWKHZRUNXQWLO
WKDWWKHSHUPLWLVRQO\DOLFHQVHWRSURFHHGZLWK WKHFRPSOHWLRQRIWKHSURMHFW
WKHZRUN,WLVQRWDOLFHQVHWRYLRODWHFDQFHORU
VHW DVLGH DQ\ SURYLVLRQV RI WKH FRGH 7KLV LV ™ 7KHSHUPLWRUFRS\WKHUHRILVWREHNHSWRQWKH
VLJQLILFDQWEHFDXVH LW PHDQVWKDWGHVSLWHDQ\ MRE VLWH XQWLO WKH ZRUN LV FRPSOHWH DQG PDGH
HUURUVRURYHUVLJKWVLQWKHDSSURYDOSURFHVVWKH DYDLODEOH WR WKH EXLOGLQJ RIILFLDO RU
SHUPLW DSSOLFDQW QRW WKH EXLOGLQJ RIILFLDO LV UHSUHVHQWDWLYH WR FRQYHQLHQWO\ PDNH UHTXLUHG
UHVSRQVLEOH IRU FRGH FRPSOLDQFH $OVR WKH HQWULHVWKHUHRQ

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

6(&7,21&216758&7,21 ™ 7KLVVHFWLRQ GHVFULEHV LQ GHWDLOWKHPLQLPXP

'2&80(176 UHTXLUHPHQWV IRU WKH FRQVWUXFWLRQ GRFXPHQWV
SRUWLRQ RI WKH VXEPLWWDO GRFXPHQWV 6HFWLRQV
 *HQHUDO6XEPLWWDOGRFXPHQWVFRQVLVWLQJ  WKURXJK  FRQWDLQ WKH PLQLPXP
RI FRQVWUXFWLRQGRFXPHQWVVSHFLDOLQVSHFWLRQDQG LQIRUPDWLRQWREHSURYLGHGRQWKHFRQVWUXFWLRQ
VWUXFWXUDOREVHUYDWLRQSURJUDPVLQYHVWLJDWLRQDQG GRFXPHQWV 7KH IROORZLQJ VXEVHFWLRQV VSHFLI\
HYDOXDWLRQUHSRUWVDQGRWKHUGDWDVKDOOEHVXEPLWWHG WKHGHWDLOHGLQIRUPDWLRQWKDWPXVWEHVKRZQRQ
LQ WZR RU PRUH VHWV ZLWK HDFK DSSOLFDWLRQ IRU D WKH VXEPLWWHG FRQVWUXFWLRQ GRFXPHQWV :KHQ
VSHFLILFDOO\ DOORZHG E\ WKH EXLOGLQJ RIILFLDO
SHUPLW 7KH FRQVWUXFWLRQ GRFXPHQWV VKDOO EH
GRFXPHQWVFDQEHVXEPLWWHGLQHOHFWURQLFIRUP
SUHSDUHGE\DUHJLVWHUHGGHVLJQSURIHVVLRQDOZKHUH
UHTXLUHGE\WKHVWDWXWHVRIWKHMXULVGLFWLRQLQZKLFK &RQVWUXFWLRQ GRFXPHQWV  &RQVWUXFWLRQ
WKH SURMHFW LV WR EH FRQVWUXFWHG :KHUH VSHFLDO GRFXPHQWV VKDOO EH GLPHQVLRQHG DQG GUDZQ XSRQ
FRQGLWLRQVH[LVWWKHEXLOGLQJRIILFLDOLVDXWKRUL]HG VXLWDEOHPDWHULDO (OHFWURQLFPHGLDGRFXPHQWV DUH
WRUHTXLUHDGGLWLRQDOFRQVWUXFWLRQGRFXPHQWVWREH SHUPLWWHG WR EH VXEPLWWHG ZKHUH DSSURYHG E\ WKH
SUHSDUHGE\DUHJLVWHUHGGHVLJQSURIHVVLRQDO EXLOGLQJRIILFLDO&RQVWUXFWLRQGRFXPHQWVVKDOOEH
RIVXIILFLHQWFODULW\WRLQGLFDWHWKHORFDWLRQQDWXUH
([FHSWLRQ  7KH EXLOGLQJRIILFLDOLVDXWKRUL]HG WR
DQGH[WHQWRIWKHZRUNSURSRVHGDQGVKRZLQGHWDLO
ZDLYH WKH VXEPLVVLRQ RI FRQVWUXFWLRQ GRFXPHQWV
WKDWLW ZLOO FRQIRUP WRWKHSURYLVLRQV RI WKLV FRGH
DQG RWKHU GDWD QRW UHTXLUHG WR EH SUHSDUHG E\ D
DQG UHOHYDQW ODZV RUGLQDQFHV UXOHV DQG
UHJLVWHUHGGHVLJQSURIHVVLRQDOLILWLVIRXQGWKDWWKH
UHJXODWLRQVDVGHWHUPLQHGE\WKHEXLOGLQJRIILFLDO
QDWXUHRIWKHZRUNDSSOLHGIRULVVXFKWKDWUHYLHZLQJ 7KHZRUNDUHDVVKDOOEHVKRZQ
RI FRQVWUXFWLRQ GRFXPHQWV LV QRW QHFHVVDU\ WR
REWDLQFRPSOLDQFHZLWKWKLVFRGH ™ 7KHFRQVWUXFWLRQGRFXPHQWVDUHUHTXLUHGWREH
RI D TXDOLW\ DQG GHWDLO VXFK WKDW WKH EXLOGLQJ
™ 7KLV VHFWLRQ HVWDEOLVKHV WKH UHTXLUHPHQW WR RIILFLDOFDQGHWHUPLQHWKDWWKHZRUNFRQIRUPVWR
SURYLGH WKH EXLOGLQJ RIILFLDO ZLWK VXEPLWWDO WKH FRGH DQG RWKHU DSSOLFDEOH ODZV DQG
GRFXPHQWV LQFOXGLQJ FRQVWUXFWLRQ GUDZLQJV UHJXODWLRQV *HQHUDO VWDWHPHQWV RQ WKH
VSHFLILFDWLRQV DQG RWKHU GRFXPHQWV WKDW GRFXPHQWVVXFKDV³$OOZRUNPXVWFRPSO\ZLWK
GHVFULEH WKH VWUXFWXUH RU V\VWHP IRU ZKLFK D WKH 6DXGL ([LVWLQJ %XLOGLQJ &RGH´ DUH QRW DQ
SHUPLW LV VRXJKW ,W GHVFULEHV WKH LQIRUPDWLRQ DFFHSWDEOHVXEVWLWXWHIRUVKRZLQJWKHUHTXLUHG
WKDW PXVW EH LQFOXGHG LQ WKH GRFXPHQWV ZKR LQIRUPDWLRQ
PXVW SUHSDUH WKHP DQG SURFHGXUHV IRU
DSSURYLQJ WKHP $ GHWDLOHG GHVFULSWLRQ RI WKH )LUHSURWHFWLRQV\VWHPVVKRSGUDZLQJV
ZRUNIRUZKLFKWKHDSSOLFDWLRQLVPDGHPXVWEH 6KRS GUDZLQJV IRU WKH ILUH SURWHFWLRQ V\VWHPV
VXEPLWWHG :KHQ WKH ZRUN FDQ EH EULHIO\ VKDOOEHVXEPLWWHGWRLQGLFDWHFRQIRUPDQFHZLWKWKLV
GHVFULEHG RQ WKH DSSOLFDWLRQ IRUP DQG WKH FRGHDQGWKHFRQVWUXFWLRQGRFXPHQWVDQGVKDOOEH
VHUYLFHVRIDUHJLVWHUHGGHVLJQSURIHVVLRQDODUH DSSURYHG SULRU WR WKH VWDUW RI V\VWHP LQVWDOODWLRQ
QRW UHTXLUHG WKH EXLOGLQJ RIILFLDO PD\ XWLOL]H 6KRS GUDZLQJV VKDOO FRQWDLQ LQIRUPDWLRQ DV
MXGJPHQW LQ GHWHUPLQLQJ WKH QHHG IRU GHWDLOHG
UHTXLUHGE\WKHUHIHUHQFHGLQVWDOODWLRQVWDQGDUGVLQ
GRFXPHQWV $Q H[DPSOH RI ZRUN WKDW PD\ QRW
LQYROYHWKHVXEPLVVLRQRIGHWDLOHGFRQVWUXFWLRQ &KDSWHURIWKH6%&
GRFXPHQWVLVWKHUHSODFHPHQWRIDQH[LVWLQJ ™ 6LQFHWKHILUHSURWHFWLRQFRQWUDFWRUVPD\QRW
DPSHOHFWULFDOVHUYLFHZLWKDDPSVHUYLFH KDYH EHHQ VHOHFWHG DW WKH WLPH D SHUPLW ZDV
7KHVH SURYLVLRQV DUH LQWHQGHG WR UHIOHFW WKH LVVXHG IRU WKH FRQVWUXFWLRQ RI D EXLOGLQJ
PLQLPXP VFRSH RI LQIRUPDWLRQ QHHGHG WR GHWDLOHG VKRS GUDZLQJV IRU ILUH SURWHFWLRQ
GHWHUPLQH FRGH FRPSOLDQFH 7KH EXLOGLQJ V\VWHPV DUH QRW DYDLODEOH %HFDXVH WKH\
RIILFLDO VKRXOG HVWDEOLVK D FRQVLVWHQW SROLF\ RI SURYLGHWKHLQIRUPDWLRQQHFHVVDU\WRGHWHUPLQH
WKHQXPEHURIVHWVUHTXLUHGE\WKHMXULVGLFWLRQ FRGH FRPSOLDQFH DV VSHFLILHG LQ WKH
DQG PDNH WKLV LQIRUPDWLRQ UHDGLO\ DYDLODEOH WR DSSURSULDWHUHIHUHQFHGVWDQGDUGLQ&KDSWHURI
DSSOLFDQWV 7KLV VHFWLRQ DOVR UHTXLUHV WKH WKH 6%&  WKH\ PXVW EH VXEPLWWHG DQG
EXLOGLQJ RIILFLDO WR GHWHUPLQH WKDW DQ\ FRXQWU\ DSSURYHG E\ WKH EXLOGLQJ RIILFLDO EHIRUH WKH
SURIHVVLRQDOUHJLVWUDWLRQODZVEHFRPSOLHGZLWK FRQWUDFWRUFDQEHJLQLQVWDOOLQJWKHV\VWHP)RU
DVWKH\DSSO\WRWKHSUHSDUDWLRQRIFRQVWUXFWLRQ H[DPSOH WKH SURIHVVLRQDO UHVSRQVLEOH IRU WKH
GRFXPHQWV GHVLJQRIDQDXWRPDWLFVSULQNOHUV\VWHPVKRXOG
GHWHUPLQH WKDW WKH ZDWHU VXSSO\ LV DGHTXDWH
 &RQVWUXFWLRQ GRFXPHQWV  &RQVWUXFWLRQ
EXW ZLOO QRW EH DEOH WR SUHSDUH D ILQDO VHW RI
GRFXPHQWV VKDOO EH LQ DFFRUGDQFH ZLWK 6HFWLRQV K\GUDXOLF FDOFXODWLRQV LI WKH VSHFLILF PDWHULDOV
WKURXJK DQGSLSHVL]HVOHQJWKVDQGDUUDQJHPHQWVKDYH
QRW EHHQ LGHQWLILHG 2QFH WKH LQVWDOOLQJ

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

FRQWUDFWRU LV VHOHFWHG VSHFLILF K\GUDXOLF SDUDSHWV PHDQV RI GUDLQDJH ZDWHUUHVLVWLYH
FDOFXODWLRQVFDQEHSUHSDUHG)DFWRUVVXFKDV PHPEUDQHDQGGHWDLOVDURXQGRSHQLQJV
FODVVLILFDWLRQ RI WKH KD]DUG DPRXQW RI ZDWHU 7KH FRQVWUXFWLRQ GRFXPHQWV VKDOO LQFOXGH
VXSSO\ DYDLODEOH DQG WKH GHQVLW\ RU PDQXIDFWXUHU¶VLQVWDOODWLRQLQVWUXFWLRQVWKDWSURYLGH
FRQFHQWUDWLRQWREHDFKLHYHGE\WKHV\VWHPDUH
VXSSRUWLQJ GRFXPHQWDWLRQ WKDW WKH SURSRVHG
WREHLQFOXGHGZLWKWKHVXEPLVVLRQRIWKHVKRS
GUDZLQJV 6SHFLILF GDWD VKHHWV LGHQWLI\LQJ SHQHWUDWLRQ DQG RSHQLQJ GHWDLOV GHVFULEHG LQ WKH
VSULQNOHUV SLSH GLPHQVLRQV SRZHU FRQVWUXFWLRQ GRFXPHQWV PDLQWDLQ WKH ZLQG DQG
UHTXLUHPHQWVIRUVPRNHGHWHFWRUVHWFVKRXOG ZHDWKHU UHVLVWDQFH RI WKH H[WHULRU ZDOO HQYHORSH
DOVREHLQFOXGHGZLWKWKHVXEPLVVLRQ 7KHVXSSRUWLQJGRFXPHQWDWLRQVKDOOIXOO\GHVFULEH
WKH H[WHULRU ZDOO V\VWHP WKDW ZDV WHVWHG ZKHUH
0HDQV RI HJUHVV  7KH FRQVWUXFWLRQ DSSOLFDEOHDVZHOODVWKHWHVWSURFHGXUHXVHG
GRFXPHQWVIRU$OWHUDWLRQV²/HYHO$OWHUDWLRQV²
/HYHODGGLWLRQVDQGFKDQJHVRIRFFXSDQF\VKDOO ™ 7KLV VHFWLRQ VSHFLILFDOO\ LGHQWLILHV GHWDLOV RI
VKRZLQVXIILFLHQWGHWDLOWKHORFDWLRQFRQVWUXFWLRQ H[WHULRUZDOOFRQVWUXFWLRQWKDWDUHFULWLFDOWRWKH
VL]H DQG FKDUDFWHU RI DOO SRUWLRQV RI WKH PHDQV RI ZHDWKHU UHVLVWDQFH RI WKH ZDOO DQG UHTXLUHV
WKRVHGHWDLOVWREHSURYLGHGRQWKHFRQVWUXFWLRQ
HJUHVV LQ FRPSOLDQFH ZLWK WKH SURYLVLRQV RI WKLV
GRFXPHQWV :KHUH WKH ZHDWKHU UHVLVWDQFH RI
FRGH 7KH FRQVWUXFWLRQ GRFXPHQWV VKDOO GHVLJQDWH WKHH[WHULRUZDOODVVHPEO\LVEDVHGRQWHVWVWKH
WKH QXPEHU RI RFFXSDQWV WR EH DFFRPPRGDWHG LQ VXEPLWWHG GRFXPHQWDWLRQ LV WR GHVFULEH WKH
HYHU\ZRUNDUHDRIHYHU\IORRUDQGLQDOODIIHFWHG GHWDLOV RI WKH ZDOO HQYHORSH DQG WKH WHVW
URRPVDQGVSDFHV SURFHGXUH WKDW ZDV XVHG 7KLV SURYLGHV WKH
™ 7KH FRPSOHWH PHDQV RI HJUHVV V\VWHP LV EXLOGLQJ RIILFLDO ZLWK HQRXJK LQIRUPDWLRQ
UHTXLUHGWREHLQGLFDWHGRQWKHSODQVWRSHUPLW QHFHVVDU\WRGHWHUPLQHFRGHFRPSOLDQFH
WKH EXLOGLQJ RIILFLDO WR LQLWLDWH D UHYLHZ DQG 6LWH SODQ  7KH FRQVWUXFWLRQ GRFXPHQWV
LGHQWLI\ SHUWLQHQW FRGH UHTXLUHPHQWV IRU HDFK VXEPLWWHG ZLWKWKH DSSOLFDWLRQIRU SHUPLWVKDOO EH
FRPSRQHQW $GGLWLRQDOO\ UHTXLULQJ VXFK DFFRPSDQLHGE\DVLWHSODQVKRZLQJWRVFDOHWKHVL]H
LQIRUPDWLRQ WR EH UHIOHFWHG LQ WKH FRQVWUXFWLRQ
DQG ORFDWLRQ RI QHZ FRQVWUXFWLRQ DQG H[LVWLQJ
GRFXPHQWV UHTXLUHV WKH GHVLJQHU QRW RQO\ WR
EHFRPH IDPLOLDU ZLWK WKH FRGH EXW DOVR WR EH VWUXFWXUHVRQWKHVLWHGLVWDQFHVIURPORWOLQHVWKH
DZDUH RI HJUHVV SULQFLSOHV FRQFHSWV DQG HVWDEOLVKHGVWUHHWJUDGHVDQGWKHSURSRVHGILQLVKHG
SXUSRVHV7KHQHHGWRHQVXUHWKDWWKHPHDQV JUDGHVDQGLWVKDOOEHGUDZQLQDFFRUGDQFHZLWKDQ
RI HJUHVV OHDGV WR D SXEOLF ZD\ LV DOVR D DFFXUDWH ERXQGDU\ OLQH VXUYH\ ,Q WKH FDVH RI
FRQVLGHUDWLRQGXULQJWKHSODQUHYLHZ6XFKDQ GHPROLWLRQWKHVLWHSODQVKDOOVKRZFRQVWUXFWLRQWR
HYDOXDWLRQ FDQQRW EH PDGH ZLWKRXW WKH EHGHPROLVKHGDQGWKHORFDWLRQDQGVL]HRIH[LVWLQJ
LQFOXVLRQRIDVLWHSODQDVUHTXLUHGE\6HFWLRQ VWUXFWXUHVDQGFRQVWUXFWLRQWKDWDUHWRUHPDLQRQWKH
 ,QIRUPDWLRQ HVVHQWLDO IRU GHWHUPLQLQJ VLWH RU SORW 7KH EXLOGLQJ RIILFLDO LV DXWKRUL]HG WR
WKHUHTXLUHGFDSDFLW\RIWKHHJUHVVFRPSRQHQWV ZDLYH RU PRGLI\ WKH UHTXLUHPHQW IRU D VLWH SODQ
VHH 6HFWLRQ  RI WKH 6%&  DQG WKH
ZKHUH WKH DSSOLFDWLRQ IRU SHUPLW LV IRU DOWHUDWLRQ
QXPEHURIHJUHVVFRPSRQHQWVUHTXLUHGIURPD
VSDFHVHH6HFWLRQVDQGRIWKH UHSDLURUFKDQJHRIRFFXSDQF\
6%&PXVWEHSURYLGHG7KHGHVLJQHUPXVW ™ &HUWDLQ FRGH UHTXLUHPHQWV DUH GHSHQGHQW RQ
EH DZDUH RI WKH RFFXSDQF\ RI D VSDFH DQG WKH VWUXFWXUH¶V ORFDWLRQ RQ WKH ORW DQG WKH
SURSHUO\ LGHQWLI\ LW DORQJ ZLWK LWV UHVXOWDQW WRSRJUDSK\RIWKHVLWH$VDUHVXOWDVFDOHGVLWH
RFFXSDQWORDGRQWKHFRQVWUXFWLRQGRFXPHQWV SODQFRQWDLQLQJWKHGDWDOLVWHGLQWKLVVHFWLRQLV
,Q *URXS , 5 DQG 5 RFFXSDQFLHV WKH UHTXLUHG WR SHUPLW UHYLHZ IRU FRPSOLDQFH 7KH
RFFXSDQW ORDG FDQ EH UHDGLO\ GHWHUPLQHG ZLWK EXLOGLQJRIILFLDOFDQZDLYHWKHUHTXLUHPHQWIRUD
OLWWOHGLIIHUHQFHLQWKHQXPEHUWKXVGHVLJQDWLQJ VLWH SODQ ZKHQ LW LV QRW UHTXLUHG WR GHWHUPLQH
WKH RFFXSDQW ORDG RQ WKH FRQVWUXFWLRQ FRGHFRPSOLDQFHVXFK DV ZRUNLQYROYLQJRQO\
GRFXPHQWVLVQRWUHTXLUHG LQWHULRUDOWHUDWLRQVRUUHSDLUV
([WHULRU ZDOO HQYHORSH  &RQVWUXFWLRQ  ([DPLQDWLRQRIGRFXPHQWV7KHEXLOGLQJ
GRFXPHQWV IRU ZRUN DIIHFWLQJ WKH H[WHULRU ZDOO RIILFLDOVKDOOH[DPLQHRUFDXVHWREHH[DPLQHGWKH
HQYHORSHVKDOOGHVFULEHWKHH[WHULRUZDOOHQYHORSH VXEPLWWDO GRFXPHQWV DQG VKDOO DVFHUWDLQ E\ VXFK
LQ VXIILFLHQW GHWDLO WR GHWHUPLQH FRPSOLDQFH ZLWK H[DPLQDWLRQV ZKHWKHU WKH FRQVWUXFWLRQ RU
WKLVFRGH7KHFRQVWUXFWLRQGRFXPHQWVVKDOOSURYLGH RFFXSDQF\LQGLFDWHGDQGGHVFULEHGLVLQDFFRUGDQFH
GHWDLOV RI WKH H[WHULRU ZDOO HQYHORSH DV UHTXLUHG ZLWK WKH UHTXLUHPHQWV RI WKLV FRGH DQG RWKHU
LQFOXGLQJ ZLQGRZV GRRUV IODVKLQJ LQWHUVHFWLRQV SHUWLQHQWODZVRURUGLQDQFHV
ZLWK GLVVLPLODU PDWHULDOV FRUQHUV HQG GHWDLOV
FRQWURO MRLQWV LQWHUVHFWLRQV DW URRI HDYHV RU

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

™ 7KHUHTXLUHPHQWVRIWKLVVHFWLRQDUHUHODWHGWR WKHFRQVWUXFWLRQGRFXPHQWVIRUWKHZKROHEXLOGLQJ
WKRVH IRXQG LQ 6HFWLRQ  UHJDUGLQJ WKH RU VWUXFWXUH KDYH EHHQ VXEPLWWHG SURYLGHG WKDW
DFWLRQ RI WKH EXLOGLQJ RIILFLDO LQ UHVSRQVH WR D DGHTXDWHLQIRUPDWLRQDQGGHWDLOHGVWDWHPHQWVKDYH
SHUPLW DSSOLFDWLRQ 7KH EXLOGLQJ RIILFLDO FDQ EHHQILOHGFRPSO\LQJZLWKSHUWLQHQWUHTXLUHPHQWVRI
GHOHJDWHWKHUHYLHZRIWKHVXEPLWWDOGRFXPHQWV
WKLV FRGH 7KH KROGHU RI VXFK SHUPLW IRU WKH
WR VXERUGLQDWHV DV SURYLGHG IRU LQ 6HFWLRQ
 IRXQGDWLRQRURWKHUSDUWVRIDEXLOGLQJVKDOOSURFHHG
DWWKHKROGHU
VRZQULVNZLWKWKHEXLOGLQJRSHUDWLRQ
$SSURYDO RI FRQVWUXFWLRQ GRFXPHQWV DQG ZLWKRXW DVVXUDQFH WKDW D SHUPLW IRU WKH HQWLUH
:KHUH WKH EXLOGLQJ RIILFLDO LVVXHV D SHUPLW WKH VWUXFWXUHZLOOEHJUDQWHG
FRQVWUXFWLRQ GRFXPHQWV VKDOO EH DSSURYHG LQ
™ 7KHEXLOGLQJRIILFLDOKDVWKHDXWKRULW\WRLVVXHD
ZULWLQJ RU E\ VWDPS DV ³5HYLHZHG IRU &RGH
SDUWLDO SHUPLW WR DOORZ IRU WKH SUDFWLFH RI ³IDVW
&RPSOLDQFH´2QHVHWRIFRQVWUXFWLRQGRFXPHQWVVR WUDFNLQJ´DMRE$Q\FRQVWUXFWLRQXQGHUDSDUWLDO
UHYLHZHGVKDOOEHUHWDLQHGE\WKHEXLOGLQJRIILFLDO SHUPLWLV³DWWKHKROGHU¶VRZQULVN´DQG³ZLWKRXW
7KHRWKHUVHWVKDOOEHUHWXUQHGWRWKHDSSOLFDQWVKDOO DVVXUDQFHWKDWDSHUPLWIRUWKHHQWLUHVWUXFWXUH
EH NHSW DW WKH VLWH RI ZRUN DQG VKDOO EH RSHQ WR ZLOOEHJUDQWHG´7KHEXLOGLQJRIILFLDOLVXQGHUQR
LQVSHFWLRQ E\ WKH EXLOGLQJ RIILFLDO RU D GXO\ REOLJDWLRQ WR DFFHSW ZRUN RU LVVXH D FRPSOHWH
DXWKRUL]HGUHSUHVHQWDWLYH SHUPLW LQ YLRODWLRQ RI WKH FRGH RUGLQDQFHV RU
VWDWXWHV VLPSO\ EHFDXVH D SDUWLDO SHUPLW KDG
™ 7KH EXLOGLQJ RIILFLDO PXVW VWDPS RU RWKHUZLVH EHHQ LVVXHG )DVW WUDFNLQJ SODFHV DQ XQXVXDO
HQGRUVH DV ³5HYLHZHG IRU &RGH &RPSOLDQFH´ DGPLQLVWUDWLYH DQG WHFKQLFDO EXUGHQ RQ WKH
WKHFRQVWUXFWLRQGRFXPHQWVRQZKLFKWKHSHUPLW EXLOGLQJRIILFLDO7KHSXUSRVHLVWRSURFHHGZLWK
LV EDVHG 2QH VHW RI DSSURYHG FRQVWUXFWLRQ FRQVWUXFWLRQ ZKLOH WKH GHVLJQ FRQWLQXHV IRU
GRFXPHQWV PXVW EH NHSW RQ WKH FRQVWUXFWLRQ RWKHU DVSHFWV RI WKH ZRUN &RRUGLQDWLQJ DQG
VLWH WR VHUYH DV WKH EDVLV IRU DOO VXEVHTXHQW FRUUHODWLQJWKHFRGHDVSHFWVLQWRWKHSURMHFWLQ
LQVSHFWLRQV 7R DYRLG FRQIXVLRQ WKH SKDVHVUHTXLUHVDWWHQWLRQWRGHWDLODQGSURMHFW
FRQVWUXFWLRQGRFXPHQWVRQWKHVLWHPXVWEHWKH WUDFNLQJVRWKDWDOOFRGHLVVXHVDUHDGGUHVVHG
GRFXPHQWV WKDW ZHUH DSSURYHG DQG VWDPSHG 7KH FRRUGLQDWLRQ RI WKHVH VXEPLWWDOV LV WKH
7KLV LV EHFDXVH LQVSHFWLRQV DUH WR EH UHVSRQVLELOLW\ RI WKH UHJLVWHUHG GHVLJQ
SHUIRUPHG ZLWK UHJDUG WR WKH DSSURYHG SURIHVVLRQDOLQUHVSRQVLEOHFKDUJH
GRFXPHQWVQRWWKHFRGHLWVHOI$GGLWLRQDOO\WKH
FRQWUDFWRU FDQQRW GHWHUPLQH FRPSOLDQFH ZLWK 'HIHUUHG VXEPLWWDOV  'HIHUUDO RI DQ\
WKH DSSURYHG FRQVWUXFWLRQ GRFXPHQWV XQOHVV VXEPLWWDOLWHPVVKDOOKDYHWKHSULRUDSSURYDORIWKH
WKH\DUHUHDGLO\DYDLODEOH8QOHVVWKHDSSURYHG EXLOGLQJRIILFLDO7KHUHJLVWHUHGGHVLJQSURIHVVLRQDO
FRQVWUXFWLRQ GRFXPHQWV DUH DYDLODEOH WKH LQ UHVSRQVLEOH FKDUJH VKDOO OLVW WKH GHIHUUHG
LQVSHFWLRQ VKRXOG EH SRVWSRQHG DQG ZRUN RQ VXEPLWWDOV RQ WKH FRQVWUXFWLRQ GRFXPHQWV IRU
WKHSURMHFWKDOWHG
UHYLHZE\WKHEXLOGLQJRIILFLDO
3UHYLRXV DSSURYDO  7KLV FRGH VKDOO QRW 6XEPLWWDO GRFXPHQWV IRU GHIHUUHG VXEPLWWDO LWHPV
UHTXLUH FKDQJHV LQ WKH FRQVWUXFWLRQ GRFXPHQWV VKDOO EH VXEPLWWHG WR WKH UHJLVWHUHG GHVLJQ
FRQVWUXFWLRQRUGHVLJQDWHGRFFXSDQF\RIDVWUXFWXUH SURIHVVLRQDOLQUHVSRQVLEOHFKDUJHZKRVKDOOUHYLHZ
IRUZKLFKDODZIXOSHUPLWKDVEHHQLVVXHGDQGWKH WKHPDQGIRUZDUGWKHPWRWKHEXLOGLQJRIILFLDOZLWK
FRQVWUXFWLRQ RI ZKLFK KDV EHHQ SXUVXHG LQ JRRG D QRWDWLRQ LQGLFDWLQJ WKDW WKH GHIHUUHG VXEPLWWDO
IDLWKZLWKLQGD\VDIWHUWKHHIIHFWLYHGDWHRIWKLV GRFXPHQWVKDYHEHHQUHYLHZHGDQGWKDWWKH\KDYH
FRGHDQGKDVQRWEHHQDEDQGRQHG EHHQ IRXQG WR EH LQ JHQHUDO FRQIRUPDQFH WR WKH
™ ,IDSHUPLWLVLVVXHGDQGFRQVWUXFWLRQSURFHHGV
GHVLJQRIWKHEXLOGLQJ7KHGHIHUUHGVXEPLWWDOLWHPV
DWDQRUPDOSDFHDQGDQHZHGLWLRQRIWKHFRGH VKDOOQRWEHLQVWDOOHGXQWLOWKHLUGHIHUUHGVXEPLWWDO
LVDGRSWHGE\WKHOHJLVODWLYHERG\UHTXLULQJWKH GRFXPHQWV KDYH EHHQ DSSURYHG E\ WKH EXLOGLQJ
EXLOGLQJWREHFRQVWUXFWHGWRFRQIRUPWRWKHQHZ RIILFLDO
FRGHLVXQUHDVRQDEOH7KLVVHFWLRQSURYLGHVIRU ™ 2IWHQ HVSHFLDOO\ RQ ODUJHU SURMHFWV GHWDLOV RI
WKHFRQWLQXLW\RISHUPLWVLVVXHGXQGHUSUHYLRXV FHUWDLQ EXLOGLQJ SDUWV DUH QRW DYDLODEOH DW WKH
FRGHV DV ORQJ DV VXFK SHUPLWV DUH EHLQJ WLPHRISHUPLWLVVXDQFHEHFDXVHWKH\KDYHQRW
³DFWLYHO\ SURVHFXWHG´ VXEVHTXHQW WR WKH \HW EHHQ GHVLJQHG HJ H[WHULRU FODGGLQJ
HIIHFWLYH GDWH RI WKH RUGLQDQFH DGRSWLQJ WKLV SUHIDEULFDWHGLWHPVVXFKDVWUXVVHVDQGVWDLUV
HGLWLRQRIWKHFRGH DQGWKHFRPSRQHQWVRIILUHSURWHFWLRQV\VWHPV
3KDVHGDSSURYDO7KHEXLOGLQJRIILFLDOLV 7KHGHVLJQSURIHVVLRQDOLQUHVSRQVLEOHFKDUJH
DXWKRUL]HGWRLVVXHDSHUPLWIRUWKHFRQVWUXFWLRQRI PXVW LGHQWLI\ RQ WKH VXEPLWWDO GRFXPHQWV WKH
IRXQGDWLRQVRUDQ\RWKHUSDUWRIDEXLOGLQJEHIRUH LWHPVWREHLQFOXGHGLQDQ\GHIHUUHGVXEPLWWDOV
'RFXPHQWV UHTXLUHG IRU WKH DSSURYDO RI

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

GHIHUUHGLWHPVPXVWEHUHYLHZHGE\WKHGHVLJQ FKDUJH,IWKHFLUFXPVWDQFHVUHTXLUHWKHRZQHURU
SURIHVVLRQDO LQ UHVSRQVLEOH FKDUJH IRU WKH RZQHU¶V DXWKRUL]HG DJHQW VKDOO GHVLJQDWH D
FRPSDWLELOLW\ ZLWK WKH GHVLJQ RI WKH EXLOGLQJ VXEVWLWXWH UHJLVWHUHG GHVLJQ SURIHVVLRQDO LQ
IRUZDUGHGWRWKHEXLOGLQJRIILFLDOZLWKDQRWDWLRQ UHVSRQVLEOH FKDUJH ZKR VKDOO SHUIRUP WKH GXWLHV
WKDW WKLV LV WKH FDVH DQG DSSURYHG E\ WKH
UHTXLUHG RI WKH RULJLQDO UHJLVWHUHG GHVLJQ
EXLOGLQJRIILFLDOEHIRUHLQVWDOODWLRQRIWKHLWHPV
6XIILFLHQWWLPHPXVWEHDOORZHGIRUWKHDSSURYDO SURIHVVLRQDO LQ UHVSRQVLEOH FKDUJH 7KH EXLOGLQJ
SURFHVV 1RWH WKDW GHIHUUHG VXEPLWWDOV GLIIHU RIILFLDOVKDOOEHQRWLILHGLQZULWLQJE\WKHRZQHURU
IURP WKH SKDVHG SHUPLWV GHVFULEHG LQ 6HFWLRQ WKH RZQHU¶V DXWKRUL]HG DJHQW LI WKH UHJLVWHUHG
LQWKDWWKH\RFFXUDIWHUWKHSHUPLWIRUWKH GHVLJQ SURIHVVLRQDO LQ UHVSRQVLEOH FKDUJH LV
EXLOGLQJLVLVVXHGDQGDUHQRWIRUZRUNFRYHUHG FKDQJHG RU LV XQDEOH WR FRQWLQXH WR SHUIRUP WKH
E\VHSDUDWHSHUPLWV GXWLHV 7KH UHJLVWHUHG GHVLJQ SURIHVVLRQDO LQ
 $PHQGHGFRQVWUXFWLRQGRFXPHQWV:RUN UHVSRQVLEOH FKDUJH VKDOO EH UHVSRQVLEOH IRU
VKDOOEHLQVWDOOHGLQDFFRUGDQFHZLWKWKHUHYLHZHG UHYLHZLQJ DQG FRRUGLQDWLQJ VXEPLWWDO GRFXPHQWV
FRQVWUXFWLRQ GRFXPHQWV DQG DQ\ FKDQJHV PDGH SUHSDUHGE\RWKHUVLQFOXGLQJSKDVHGDQGGHIHUUHG
GXULQJFRQVWUXFWLRQWKDWDUHQRWLQFRPSOLDQFHZLWK VXEPLWWDOLWHPVIRUFRPSDWLELOLW\ZLWKWKHGHVLJQRI
WKH DSSURYHG FRQVWUXFWLRQ GRFXPHQWV VKDOO EH WKH EXLOGLQJ :KHUH VWUXFWXUDO REVHUYDWLRQ LV
UHVXEPLWWHG IRU DSSURYDO DV DQ DPHQGHG VHW RI UHTXLUHG WKH LQVSHFWLRQ SURJUDP VKDOO QDPH WKH
FRQVWUXFWLRQGRFXPHQWV LQGLYLGXDO RU ILUPV ZKR DUH WR SHUIRUP VWUXFWXUDO
REVHUYDWLRQDQGGHVFULEHWKHVWDJHVRIFRQVWUXFWLRQ
™ $Q\DPHQGPHQWVWRWKHDSSURYHGFRQVWUXFWLRQ DWZKLFKVWUXFWXUDOREVHUYDWLRQLVWRRFFXU
GRFXPHQWV PXVW EH ILOHG EHIRUH FRQVWUXFWLQJ
WKH DPHQGHG LWHP ,Q WKH EURDGHVW VHQVH ™ $WWKHWLPHRISHUPLWDSSOLFDWLRQDQGDWYDULRXV
DPHQGPHQWV LQFOXGH DOO DGGHQGD FKDQJH LQWHUYDOV GXULQJ D SURMHFW WKH FRGH UHTXLUHV
RUGHUVUHYLVHGGUDZLQJVDQGPDUNHGXSVKRS GHWDLOHGWHFKQLFDOLQIRUPDWLRQWREHVXEPLWWHGWR
GUDZLQJV %XLOGLQJ RIILFLDOV VKRXOG PDLQWDLQ D WKHEXLOGLQJRIILFLDO7KLVZLOOYDU\GHSHQGLQJRQ
SROLF\ WKDW DOO DPHQGPHQWV EH VXEPLWWHG IRU WKH FRPSOH[LW\ RI WKH SURMHFW EXW W\SLFDOO\
UHYLHZ 2WKHUZLVH D VLJQLILFDQW DPHQGPHQW LQFOXGHV WKH FRQVWUXFWLRQ GRFXPHQWV ZLWK
PD\ QRW EH VXEPLWWHG EHFDXVH RI VXSSRUWLQJLQIRUPDWLRQDSSOLFDWLRQVXWLOL]LQJWKH
PLVLQWHUSUHWDWLRQUHVXOWLQJLQDQDFWLYLW\WKDWLV SKDVHGDSSURYDOSURFHGXUHLQ6HFWLRQ
QRWDSSURYHGDQGWKDWFDXVHVDQHHGOHVVGHOD\ DQG UHSRUWV IURP HQJLQHHUV LQVSHFWRUV DQG
LQREWDLQLQJDSSURYDORIWKHILQLVKHGZRUN WHVWLQJ DJHQFLHV DV UHTXLUHG LQ &KDSWHU  RI
WKH 6%&  6LQFH WKHVH GRFXPHQWV DQG
 5HWHQWLRQ RI FRQVWUXFWLRQ GRFXPHQWV UHSRUWVDUHSUHSDUHGE\QXPHURXVLQGLYLGXDOV
2QHVHWRIDSSURYHGFRQVWUXFWLRQGRFXPHQWVVKDOO ILUPV DQG DJHQFLHV LW LV QHFHVVDU\ WR KDYH D
EHUHWDLQHGE\WKHEXLOGLQJRIILFLDOIRUDSHULRGRI VLQJOHSHUVRQFKDUJHGZLWKWKHUHVSRQVLELOLW\IRU
QRW OHVV WKDQ WKH SHULRG UHTXLUHG IRU UHWHQWLRQ RI FRRUGLQDWLQJ WKHLU VXEPLWWDO WR WKH EXLOGLQJ
SXEOLFUHFRUGV RIILFLDO 7KLV SHUVRQ LV WKH SRLQW RI FRQWDFW IRU
WKHEXLOGLQJRIILFLDOIRUDOOLQIRUPDWLRQUHODWLQJWR
™ $VHWRIWKHDSSURYHGFRQVWUXFWLRQGRFXPHQWV WKHSURMHFW2WKHUZLVHWKHEXLOGLQJRIILFLDOFRXOG
PXVWEHNHSWE\WKHEXLOGLQJRIILFLDODVPD\EH ZDVWH WLPH DQG HIIRUW DWWHPSWLQJ WR ORFDWH WKH
UHTXLUHGE\FRXQWU\ODZVEXWIRUDSHULRGRIQRW VRXUFH RI DFFXUDWH LQIRUPDWLRQ ZKHQ WU\LQJ WR
OHVVWKDQGD\VDIWHUWKHZRUNLVFRPSOHWH UHVROYH DQ LVVXH VXFK DV D GLVFUHSDQF\ LQ
4XHVWLRQV UHJDUGLQJ DQ LWHP VKRZQ RQ WKH SODQV VXEPLWWHG E\ GLIIHUHQW GHVLJQHUV 7KH
DSSURYHG GRFXPHQWV PD\ DULVH LQ WKH SHULRG UHTXLUHPHQWWKDWWKHRZQHUHQJDJHDSHUVRQWR
LPPHGLDWHO\ IROORZLQJ FRPSOHWLRQ RI WKH ZRUN DFW DV WKH GHVLJQ SURIHVVLRQDO LQ UHVSRQVLEOH
DQG WKH GRFXPHQWV VKRXOG EH DYDLODEOH IRU FKDUJH LV DSSOLFDEOH WR SURMHFWV ZKHUH WKH
UHYLHZ6HH6HFWLRQIRUUHTXLUHPHQWVWR FRQVWUXFWLRQGRFXPHQWVDUHUHTXLUHGE\ODZWR
UHWDLQ RWKHU UHFRUGV WKDW DUH JHQHUDWHG DV D EHSUHSDUHGE\DUHJLVWHUHGGHVLJQSURIHVVLRQDO
UHVXOWRIWKHZRUN VHH6HFWLRQDQGZKHQUHTXLUHGE\WKH
 'HVLJQ SURIHVVLRQDO LQ UHVSRQVLEOH EXLOGLQJ RIILFLDO 7KH SHUVRQ HPSOR\HG E\ WKH
RZQHU WR DFW DV WKH GHVLJQ SURIHVVLRQDO LQ
FKDUJH  :KHUH LW LV UHTXLUHG WKDW GRFXPHQWV EH
UHVSRQVLEOH FKDUJH PXVW EH LGHQWLILHG RQ WKH
SUHSDUHG E\ D UHJLVWHUHG GHVLJQ SURIHVVLRQDO WKH SHUPLW DSSOLFDWLRQ EXW WKH RZQHU FDQ FKDQJH
EXLOGLQJRIILFLDOVKDOOEHDXWKRUL]HGWRUHTXLUHWKH WKH GHVLJQDWHG SHUVRQ DW DQ\ WLPH GXULQJ WKH
RZQHU RU WKH RZQHU¶V DXWKRUL]HG DJHQW WR HQJDJH FRXUVHRIWKHUHYLHZSURFHVVRUZRUNSURYLGHG
DQGGHVLJQDWHRQWKHEXLOGLQJSHUPLWDSSOLFDWLRQD WKHEXLOGLQJRIILFLDOLVVRQRWLILHGLQZULWLQJ
UHJLVWHUHGGHVLJQSURIHVVLRQDOZKRVKDOODFWDVWKH
UHJLVWHUHG GHVLJQ SURIHVVLRQDO LQ UHVSRQVLEOH

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

6(&7,217(0325$5< SK\VLFDOO\GLVDEOHGSHUVRQVDUHTXLUHPHQWWKDW
6758&785(6$1'86(6 LVUHSHDWHGLQ6HFWLRQRIWKH6%&
³/LJKW YHQWLODWLRQ DQG VDQLWDU\´ UHTXLUHPHQWV
 *HQHUDO  7KH EXLOGLQJ RIILFLDO LV DUH WKRVH LPSRVHG E\ &KDSWHU  RI WKH 6%&
DXWKRUL]HG WR LVVXH D SHUPLW IRU WHPSRUDU\ XVHV  RU DSSOLFDEOH VHFWLRQV RI WKH 6%&  RU
6XFKSHUPLWVVKDOOEHOLPLWHGDVWRWLPHRIVHUYLFH 6%&
EXWVKDOOQRWEHSHUPLWWHGIRUPRUHWKDQGD\V  7HPSRUDU\SRZHU7KHEXLOGLQJRIILFLDO
7KH EXLOGLQJ RIILFLDO LV DXWKRUL]HG WR JUDQW LV DXWKRUL]HG WR JLYH SHUPLVVLRQ WR WHPSRUDULO\
H[WHQVLRQVIRUGHPRQVWUDWHGFDXVH VXSSO\ DQG XVH SRZHU LQ SDUW RI DQ HOHFWULF
™ ,QWKHFRXUVHRIFRQVWUXFWLRQRURWKHUDFWLYLWLHV LQVWDOODWLRQEHIRUHVXFKLQVWDOODWLRQKDVEHHQIXOO\
VWUXFWXUHV WKDW KDYH D OLPLWHG VHUYLFH OLIH DUH FRPSOHWHG DQG WKH ILQDO FHUWLILFDWH RI FRPSOHWLRQ
RIWHQ QHFHVVDU\ 7KLV VHFWLRQ FRQWDLQV WKH KDVEHHQLVVXHG7KHSDUWFRYHUHGE\WKHWHPSRUDU\
DGPLQLVWUDWLYH SURYLVLRQV WKDW SHUPLW VXFK FHUWLILFDWH VKDOO FRPSO\ ZLWK WKH UHTXLUHPHQWV
WHPSRUDU\ VWUXFWXUHV ZLWKRXW IXOO FRPSOLDQFH VSHFLILHGIRUWHPSRUDU\OLJKWLQJKHDWRUSRZHULQ
ZLWK WKH FRGH UHTXLUHPHQWV IRU SHUPDQHQWO\ 6DXGL (OHFWULFDO &RGH 6%&  RU (OHFWULF
RFFXSLHG VWUXFWXUHV 7KLV VHFWLRQ DOORZV WKH
5HTXLUHPHQWVLQ1)3$
EXLOGLQJ RIILFLDO WR LVVXH SHUPLWV IRU WHPSRUDU\
VWUXFWXUHVRUXVHV7KHDSSOLFDQWPXVWVSHFLI\ ™ &RPPRQO\ WKH HOHFWULFDO VHUYLFH RQ PRVW
WKH WLPH SHULRG GHVLUHG IRU WKH WHPSRUDU\ FRQVWUXFWLRQ VLWHV LV LQVWDOOHG DQG HQHUJL]HG
VWUXFWXUHRUXVHEXWWKHDSSURYDOSHULRGFDQQRW ORQJEHIRUHDOORIWKHZLULQJLVFRPSOHWHG7KLV
H[FHHG  GD\V 6WUXFWXUHV RU XVHV WKDW DUH SURFHGXUH DOORZV WKH SRZHU VXSSO\ WR EH
³WHPSRUDU\´ EXW DUH DQWLFLSDWHG WR EH LQ LQFUHDVHG DV FRQVWUXFWLRQ GHPDQGV KRZHYHU
H[LVWHQFHIRUPRUHWKDQGD\VDUHUHTXLUHG WHPSRUDU\SHUPLVVLRQLVQRWLQWHQGHGWRZDLYH
WRFRQIRUPWRFRGHUHTXLUHPHQWVIRUSHUPDQHQW WKH UHTXLUHPHQWV VHW IRUWK LQ 1)3$ 
VWUXFWXUHV DQG XVHV 7KH EXLOGLQJ RIILFLDO LV &RQVWUXFWLRQSRZHUIURPWKHSHUPDQHQWZLULQJ
DXWKRUL]HG WR JUDQW WLPH H[WHQVLRQV LI WKH RIWKHEXLOGLQJGRHVQRWUHTXLUHWKHLQVWDOODWLRQ
DSSOLFDQW FDQ SURYLGH D YDOLG UHDVRQ IRU WKH RI WHPSRUDU\ JURXQGIDXOW FLUFXLWLQWHUUXSWHU
H[WHQVLRQ $ W\SLFDO H[DPSOH ZRXOG EH *)&, SURWHFWLRQ RU WKH DVVXUHG HTXLSPHQW
FLUFXPVWDQFHV WKDW KDYH RFFXUUHG EH\RQG WKH JURXQGLQJSURJUDPEHFDXVHWKHEXLOGLQJZLULQJ
DSSOLFDQW¶V FRQWURO 7KLV SURYLVLRQ LV QRW LQVWDOOHGDVUHTXLUHGE\WKHFRGHVKRXOGEHDV
LQWHQGHGWREHXVHGWRFLUFXPYHQWWKHGD\ VDIHIRUFRQVWUXFWLRQXVHDVLWZRXOGEHIRUXVH
OLPLWDWLRQ DIWHUWKHFRPSOHWLRQRIWKHEXLOGLQJ
 &RQIRUPDQFH  7HPSRUDU\ XVHV VKDOO  7HUPLQDWLRQ RI DSSURYDO  7KH EXLOGLQJ
FRQIRUP WR WKH VWUXFWXUDO VWUHQJWK ILUH VDIHW\ RIILFLDOLVDXWKRUL]HGWRWHUPLQDWHVXFKSHUPLWIRUD
PHDQVRIHJUHVVDFFHVVLELOLW\OLJKWYHQWLODWLRQDQG WHPSRUDU\XVHDQGWRRUGHUWKHWHPSRUDU\XVHWREH
VDQLWDU\UHTXLUHPHQWVRIWKLVFRGHDVQHFHVVDU\WR GLVFRQWLQXHG
HQVXUHWKHSXEOLFKHDOWKVDIHW\DQGJHQHUDOZHOIDUH ™ 7KLV VHFWLRQ SURYLGHV WKH EXLOGLQJ RIILFLDO ZLWK
™ 7KLVVHFWLRQSUHVFULEHVWKRVHFDWHJRULHVRIWKH WKHQHFHVVDU\DXWKRULW\WRWHUPLQDWHWKHSHUPLW
FRGH WKDW PXVW EH FRPSOLHG ZLWK GHVSLWH WKH IRU D WHPSRUDU\ XVH 7KH EXLOGLQJ RIILFLDO FDQ
IDFWWKDWWKHVWUXFWXUHZLOOEHUHPRYHGRUWKHXVH RUGHUWKDWDWHPSRUDU\VWUXFWXUHEHUHPRYHGRU
GLVFRQWLQXHGDWVRPHWLPHLQWKHIXWXUH7KHVH D WHPSRUDU\ XVH EH GLVFRQWLQXHG LI FRQGLWLRQV
FULWHULDDUHHVVHQWLDOIRUPHDVXULQJWKHVDIHW\RI RIWKHSHUPLWKDYHEHHQYLRODWHGRUWKHVWUXFWXUH
DQ\ XVH WHPSRUDU\ RU SHUPDQHQW 7KHUHIRUH RUXVHSRVHVDQLPPLQHQWKD]DUGWRWKHSXEOLF
WKHDSSOLFDWLRQRIWKHVHFULWHULDWRDWHPSRUDU\ LQ ZKLFK FDVH WKH SURYLVLRQV RI 6HFWLRQ 
VWUXFWXUH FDQQRW EH ZDLYHG ³6WUXFWXUDO EHFRPH DSSOLFDEOH 7KLV WH[W LV LPSRUWDQW
VWUHQJWK´ UHIHUV WR WKH DELOLW\ RI WKH WHPSRUDU\ EHFDXVH LW DOORZV WKH EXLOGLQJ RIILFLDO WR DFW
VWUXFWXUH WR UHVLVW DQWLFLSDWHG OLYH TXLFNO\ZKHQWLPHLVRIWKHHVVHQFHLQRUGHUWR
HQYLURQPHQWDODQGGHDGORDGVVHH&KDSWHU SURWHFWSXEOLFKHDOWKVDIHW\DQGZHOIDUH
RI WKH 6%&  ,W DOVR DSSOLHV WR DQWLFLSDWHG
OLYH DQG GHDG ORDGV LPSRVHG E\ D WHPSRUDU\ 6(&7,21)((6
XVH LQ DQ H[LVWLQJ VWUXFWXUH ³)LUH VDIHW\´  3D\PHQW RI IHHV  $ SHUPLW VKDOO QRW EH
SURYLVLRQVDUHWKRVHUHTXLUHGE\&KDSWHUV YDOLG XQWLO WKH IHHV SUHVFULEHG E\ ODZ KDYH EHHQ
DQGRIWKH6%&LQYRNHGE\YLUWXHRIWKH SDLG 1RU VKDOO DQ DPHQGPHQW WR D SHUPLW EH
VWUXFWXUH¶VVL]HXVHRUORFDWLRQRQWKHSURSHUW\
UHOHDVHG XQWLO WKH DGGLWLRQDO IHH LI DQ\ KDV EHHQ
³0HDQVRIHJUHVV´UHIHUVWRIXOOFRPSOLDQFHZLWK
&KDSWHU  RI WKH 6%&  ³$FFHVVLELOLW\´ SDLG
UHIHUVWRIXOOFRPSOLDQFHZLWK&KDSWHURIWKH
6%&  IRU PDNLQJ EXLOGLQJV DFFHVVLEOH WR

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

™ 7KH FRGH DQWLFLSDWHV WKDW MXULVGLFWLRQV ZLOO XQOHVVWKHDSSOLFDQWFDQVXEVWDQWLDWHWKHYDOXH

HVWDEOLVKWKHLURZQIHHVFKHGXOHV,WLVWKHLQWHQW E\ SURYLGLQJ GHWDLOHG HVWLPDWHV RI WKH ZRUN WR
WKDW WKH IHHV FROOHFWHG E\ WKH GHSDUWPHQW IRU WKH VDWLVIDFWLRQ RI WKH EXLOGLQJ RIILFLDO )RU WKH
EXLOGLQJ SHUPLW LVVXDQFH SODQ UHYLHZ DQG FRQVWUXFWLRQ RI QHZ EXLOGLQJV WKH EXLOGLQJ
LQVSHFWLRQEHDGHTXDWHWRFRYHUWKHFRVWVWRWKH YDOXDWLRQGDWDUHIHUUHGWRLQ6HFWLRQFDQ
GHSDUWPHQW LQ WKHVH DUHDV 7KLV VHFWLRQ EH XVHG E\ WKH EXLOGLQJ RIILFLDO DV D \DUGVWLFN
UHTXLUHV WKDW DOO IHHV EH SDLG SULRU WR SHUPLW DJDLQVW ZKLFK WR FRPSDUH WKH DSSOLFDQW¶V
LVVXDQFH RU UHOHDVH RI DQ DPHQGPHQW WR D HVWLPDWH
SHUPLW 6LQFH GHSDUWPHQW RSHUDWLRQV DUH
LQWHQGHG WR EH VXSSRUWHG E\ IHHV SDLG E\ WKH  :RUN FRPPHQFLQJ EHIRUH SHUPLW
XVHURIGHSDUWPHQWDFWLYLWLHVLWLVLPSRUWDQWWKDW LVVXDQFH$Q\SHUVRQZKRFRPPHQFHVDQ\ZRUN
WKHVH IHHV DUH UHFHLYHG EHIRUH LQFXUULQJ DQ\ EHIRUH REWDLQLQJ WKH QHFHVVDU\ SHUPLWV VKDOO EH
H[SHQVH 7KLV SKLORVRSK\ KDV UHVXOWHG LQ D VXEMHFW WR DQ DGGLWLRQDO IHH HVWDEOLVKHG E\ WKH
FRPPRQ SUDFWLFH RI KDYLQJ IHHV SDLG SULRU WR EXLOGLQJ RIILFLDO WKDW VKDOO EH LQ DGGLWLRQ WR WKH
SODQUHYLHZDQGLQVSHFWLRQ UHTXLUHGSHUPLWIHHV
 6FKHGXOH RI SHUPLW IHHV  2Q EXLOGLQJV ™ 7KHEXLOGLQJRIILFLDOZLOOLQFXUFHUWDLQFRVWVLH
HOHFWULFDOJDVPHFKDQLFDODQGSOXPELQJV\VWHPV LQVSHFWLRQ WLPH DQG DGPLQLVWUDWLYH ZKHQ
RU DOWHUDWLRQV UHTXLULQJ D SHUPLW D IHH IRU HDFK LQYHVWLJDWLQJ DQG FLWLQJ D SHUVRQ ZKR KDV
SHUPLWVKDOOEHSDLGDVUHTXLUHGLQDFFRUGDQFHZLWK FRPPHQFHG ZRUN ZLWKRXW KDYLQJ REWDLQHG D
WKH VFKHGXOH DV HVWDEOLVKHG E\ WKH DSSOLFDEOH SHUPLW 7KH EXLOGLQJ RIILFLDO LV WKHUHIRUH
HQWLWOHGWRUHFRYHUWKHVHFRVWVE\HVWDEOLVKLQJD
JRYHUQLQJDXWKRULW\
IHH LPSRVHG RQ WKH UHVSRQVLEOH SDUW\ LQ
™ 7KHMXULVGLFWLRQLQVHUWVLWVGHVLUHGIHHVFKHGXOH DGGLWLRQ WR WKDW FROOHFWHG ZKHQ WKH UHTXLUHG
DWWKLVORFDWLRQ7KHIHHVDUHHVWDEOLVKHGE\ODZ SHUPLWLVLVVXHG1RWHWKDWWKLVLVQRWDSHQDOW\
VXFKDVLQDQRUGLQDQFHDGRSWLQJWKHFRGHVHH DV GHVFULEHG LQ 6HFWLRQ  IRU ZKLFK WKH
SDJH [L RI WKH FRGH IRU D VDPSOH D VHSDUDWH SHUVRQFDQDOVREHOLDEOH
RUGLQDQFHRUOHJDOO\SURPXOJDWHGUHJXODWLRQDV
UHTXLUHG E\ FRXQWU\ ODZ )HH VFKHGXOHV DUH  5HODWHGIHHV7KHSD\PHQWRIWKHIHHIRU
RIWHQ EDVHG RQ D YDOXDWLRQ RI WKH ZRUN WR EH WKHFRQVWUXFWLRQDOWHUDWLRQUHPRYDORUGHPROLWLRQ
SHUIRUPHG 7KLV FRQFHSW LV EDVHG RQ WKH RIZRUNGRQHLQFRQQHFWLRQWRRUFRQFXUUHQWO\ZLWK
SURSRVLWLRQ WKDW WKH YDOXDWLRQ RI D SURMHFW LV WKHZRUNDXWKRUL]HGE\DEXLOGLQJSHUPLWVKDOOQRW
UHODWHGWRWKHDPRXQWRIZRUNWREHH[SHQGHG UHOLHYHWKHDSSOLFDQWRU KROGHURIWKH SHUPLWIURP
LQ WKH SODQ UHYLHZ LQVSHFWLRQV DQG WKHSD\PHQWRIRWKHUIHHVWKDWDUHSUHVFULEHGE\ODZ
DGPLQLVWHULQJ WKH SHUPLW SOXV DQ H[FHVV WR
FRYHUGHSDUWPHQWRYHUKHDG ™ 7KHIHHVIRUDEXLOGLQJSHUPLWPD\EHLQDGGLWLRQ
WR RWKHU IHHV UHTXLUHG E\ WKH MXULVGLFWLRQ RU
 %XLOGLQJ SHUPLW YDOXDWLRQV  7KH RWKHUV IRU UHODWHG LWHPV VXFK DV VHZHU
DSSOLFDQW IRU D SHUPLW VKDOO SURYLGH DQ HVWLPDWHG FRQQHFWLRQVZDWHUVHUYLFHWDSVGULYHZD\VDQG
SHUPLW YDOXH DW WLPH RI DSSOLFDWLRQ 3HUPLW VLJQV,WFDQQRWEHFRQVWUXHGWKDWWKHEXLOGLQJ
YDOXDWLRQV VKDOO LQFOXGH WRWDO YDOXH RI ZRUN SHUPLWIHHLQFOXGHVWKHVHRWKHULWHPV
LQFOXGLQJPDWHULDOVDQGODERUIRUZKLFKWKHSHUPLW  5HIXQGV  7KH EXLOGLQJ RIILFLDO LV
LVEHLQJLVVXHGVXFKDVHOHFWULFDOJDVPHFKDQLFDO DXWKRUL]HGWRHVWDEOLVKDUHIXQGSROLF\
SOXPELQJHTXLSPHQWDQGSHUPDQHQWV\VWHPV,ILQ
WKHRSLQLRQRIWKHEXLOGLQJRIILFLDOWKHYDOXDWLRQLV ™ 7KLVVHFWLRQDOORZVIRUDUHIXQGRIIHHVZKLFK
PD\EHIXOORUSDUWLDOW\SLFDOO\UHVXOWLQJIURPWKH
XQGHUHVWLPDWHGRQWKHDSSOLFDWLRQWKHSHUPLWVKDOO
UHYRFDWLRQDEDQGRQPHQWRUGLVFRQWLQXDQFHRI
EH GHQLHG XQOHVV WKH DSSOLFDQW FDQ VKRZ GHWDLOHG D FRQVWUXFWLRQ SURMHFW IRU ZKLFK D SHUPLW KDV
HVWLPDWHV WR PHHW WKH DSSURYDO RI WKH EXLOGLQJ EHHQLVVXHGDQGIHHVKDYHEHHQFROOHFWHG7KH
RIILFLDO)LQDOEXLOGLQJSHUPLWYDOXDWLRQVKDOOEHVHW UHIXQGRIIHHVVKRXOGEHUHODWHGWRWKHFRVWRI
E\WKHEXLOGLQJRIILFLDO HQIRUFHPHQWVHUYLFHVQRWSURYLGHGEHFDXVHRI
WKH WHUPLQDWLRQ RI WKH SURMHFW 7KH EXLOGLQJ
™ $V LQGLFDWHG LQ 6HFWLRQ  MXULVGLFWLRQV
RIILFLDO ZKHQ DXWKRUL]LQJ D IHH UHIXQG LV
XVXDOO\EDVHWKHLUIHHVRQWKHYDOXHRIWKHZRUN
DXWKRUL]LQJ WKH GLVEXUVHPHQW RI SXEOLF IXQGV
EHLQJ SHUIRUPHG 7KLV VHFWLRQ WKHUHIRUH
7KHUHIRUHWKHUHTXHVWIRUDUHIXQGPXVWEHLQ
UHTXLUHV WKH DSSOLFDQW WR SURYLGH WKLV ILJXUH
ZULWLQJDQGIRUJRRGFDXVH
ZKLFKLVWRLQFOXGHWKHWRWDOYDOXHRIWKHZRUN
LQFOXGLQJ PDWHULDOV DQG ODERU IRU ZKLFK WKH 
SHUPLWLVVRXJKW,IWKHEXLOGLQJRIILFLDOEHOLHYHV
WKDW WKH YDOXH SURYLGHG E\ WKH DSSOLFDQW LV
XQGHUHVWLPDWHG WKH SHUPLW LV WR EH GHQLHG

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

6(&7,21,163(&7,216 EXLOGLQJ RIILFLDO ZKHQ WKH LWHP LV UHDG\ IRU

LQVSHFWLRQ7KHLQVSHFWLRQVWKDWDUHQHFHVVDU\
 *HQHUDO&RQVWUXFWLRQRUZRUNIRUZKLFK WR SURYLGH VXFK YHULILFDWLRQ DUH OLVWHG LQ WKH
DSHUPLWLVUHTXLUHGVKDOOEHVXEMHFWWRLQVSHFWLRQE\ IROORZLQJ VHFWLRQV ZLWK WKH FDYHDW LQ 6HFWLRQ
WKHEXLOGLQJRIILFLDODQGVXFKFRQVWUXFWLRQRUZRUN WKDWVSHFLDO LQVSHFWLRQV LQDGGLWLRQWR
VKDOOUHPDLQDFFHVVLEOHDQGH[SRVHGIRULQVSHFWLRQ WKRVH OLVWHG KHUH PD\ EH UHTXLUHG GHSHQGLQJ
SXUSRVHVXQWLODSSURYHG$SSURYDODVDUHVXOWRIDQ RQWKHZRUNLQYROYHG
LQVSHFWLRQVKDOOQRWEHFRQVWUXHGWREHDQDSSURYDO )RRWLQJ RU IRXQGDWLRQ LQVSHFWLRQ
RI D YLRODWLRQ RIWKH SURYLVLRQVRIWKLVFRGHRU RI )RRWLQJDQGIRXQGDWLRQ LQVSHFWLRQV VKDOO EHPDGH
RWKHU RUGLQDQFHV RI WKH MXULVGLFWLRQ ,QVSHFWLRQV DIWHUH[FDYDWLRQVIRUIRRWLQJVDUHFRPSOHWHDQGDQ\
SUHVXPLQJWRJLYHDXWKRULW\WRYLRODWHRUFDQFHOWKH UHTXLUHGUHLQIRUFLQJVWHHOLVLQSODFH)RUFRQFUHWH
SURYLVLRQVRIWKLVFRGHRURIRWKHURUGLQDQFHVRIWKH IRXQGDWLRQV DQ\ UHTXLUHG IRUPV VKDOO EH LQ SODFH
MXULVGLFWLRQVKDOOQRWEHYDOLG,WVKDOOEHWKHGXW\RI SULRU WR LQVSHFWLRQ 0DWHULDOV IRU WKH IRXQGDWLRQ
WKH SHUPLW DSSOLFDQW WR FDXVH WKH ZRUN WR UHPDLQ VKDOOEHRQWKHMREH[FHSWZKHUHFRQFUHWHLVUHDG\
DFFHVVLEOH DQG H[SRVHG IRU LQVSHFWLRQ SXUSRVHV PL[HGLQDFFRUGDQFHZLWK$670&WKHFRQFUHWH
1HLWKHU WKH EXLOGLQJ RIILFLDO QRU WKH MXULVGLFWLRQ QHHGQRWEHRQWKHMRE
VKDOOEHOLDEOHIRUH[SHQVHHQWDLOHGLQWKHUHPRYDO
RU UHSODFHPHQW RI DQ\ PDWHULDO UHTXLUHG WR DOORZ ™ ,WLVQHFHVVDU\IRUWKHEXLOGLQJRIILFLDOWRLQVSHFW
WKHVRLORQZKLFKWKHIRRWLQJRUIRXQGDWLRQLVWR
LQVSHFWLRQ
EH SODFHG 7KLV LQVSHFWLRQ DOVR LQFOXGHV DQ\
™ 7KH LQVSHFWLRQ IXQFWLRQ LV RQH RI WKH PRUH UHLQIRUFLQJVWHHOFRQFUHWHIRUPVDQGPDWHULDOV
LPSRUWDQW DVSHFWV RI EXLOGLQJ GHSDUWPHQW WREHXVHGLQWKHIRXQGDWLRQH[FHSWIRUUHDG\
RSHUDWLRQV7KLVVHFWLRQDXWKRUL]HVWKHEXLOGLQJ PL[HGFRQFUHWHWKDWLVSUHSDUHGRIIVLWH
RIILFLDO WR LQVSHFW WKH ZRUN IRU ZKLFK D SHUPLW
KDVEHHQLVVXHGDQGUHTXLUHVWKDWWKHZRUNWR &RQFUHWHVODERUXQGHUIORRULQVSHFWLRQ
EHLQVSHFWHGUHPDLQDFFHVVLEOHWRWKHEXLOGLQJ &RQFUHWHVODEDQGXQGHUIORRULQVSHFWLRQVVKDOOEH
RIILFLDO XQWLO LQVSHFWHG DQG DSSURYHG $Q\ PDGH DIWHULQVODE RU XQGHUIORRUUHLQIRUFLQJVWHHO
H[SHQVH LQFXUUHG LQ UHPRYLQJ RU UHSODFLQJ DQG EXLOGLQJ VHUYLFH HTXLSPHQW FRQGXLW SLSLQJ
PDWHULDOWKDWFRQFHDOVDQLWHPWREHLQVSHFWHG DFFHVVRULHVDQGRWKHUDQFLOODU\HTXLSPHQWLWHPVDUH
LVQRWWKHUHVSRQVLELOLW\RIWKHEXLOGLQJRIILFLDORU LQSODFHEXWEHIRUHDQ\FRQFUHWHLVSODFHGRUIORRU
WKHMXULVGLFWLRQ$VZLWKWKHLVVXDQFHRISHUPLWV VKHDWKLQJLQVWDOOHGLQFOXGLQJWKHVXEIORRU
VHH6HFWLRQDSSURYDODVDUHVXOWRIDQ
LQVSHFWLRQLVQRWDOLFHQVHWRYLRODWHWKHFRGH ™ 7KHEXLOGLQJRIILFLDOPXVWEHDEOHWRLQVSHFWWKH
DQG DQ DSSURYDO LQ YLRODWLRQ RI WKH FRGH GRHV VRLO DQG DQ\ UHTXLUHG XQGHUVODE GUDLQDJH
QRW UHOLHYH WKH DSSOLFDQW IURP FRPSO\LQJ ZLWK ZDWHUSURRILQJ RU GDPS SURRILQJ PDWHULDO DV
WKHFRGHDQGLVQRWYDOLG ZHOO DV UHLQIRUFLQJ VWHHO FRQGXLW SLSLQJ DQG
RWKHU VHUYLFH HTXLSPHQW HPEHGGHG LQ RU
 3UHOLPLQDU\LQVSHFWLRQ%HIRUHLVVXLQJD LQVWDOOHG EHORZ D VODE SULRU WR SODFLQJ WKH
SHUPLW WKH EXLOGLQJ RIILFLDO LV DXWKRUL]HG WR FRQFUHWH6LPLODUO\LWHPVLQVWDOOHGEHORZDIORRU
H[DPLQHRUFDXVHWREHH[DPLQHGEXLOGLQJVDQGVLWHV V\VWHPRWKHUWKDQFRQFUHWHPXVWEHLQVSHFWHG
IRUZKLFKDQDSSOLFDWLRQKDVEHHQILOHG EHIRUH WKH\ DUH FRQFHDOHG E\ WKH IORRU
VKHDWKLQJRUVXEIORRU
™ 7KH EXLOGLQJ RIILFLDO LV JUDQWHG DXWKRULW\ WR
LQVSHFW WKH VLWH EHIRUH SHUPLW LVVXDQFH 7KLV /RZHVWIORRUHOHYDWLRQ)RUDGGLWLRQVDQG
PD\EHQHFHVVDU\WRYHULI\H[LVWLQJFRQGLWLRQV VXEVWDQWLDO LPSURYHPHQWV WR H[LVWLQJ EXLOGLQJV LQ
WKDW LPSDFW WKH SODQ UHYLHZ DQG SHUPLW IORRG KD]DUG DUHDV XSRQ SODFHPHQW RI WKH ORZHVW
DSSURYDO 7KLV VHFWLRQ SURYLGHV WKH EXLOGLQJ IORRU LQFOXGLQJ EDVHPHQW DQG SULRU WR IXUWKHU
RIILFLDO ZLWK WKH ULJKWRIHQWU\ DXWKRULW\ WKDW YHUWLFDO FRQVWUXFWLRQ WKH HOHYDWLRQ GRFXPHQWDWLRQ
RWKHUZLVHGRHVQRWRFFXUXQWLODIWHUWKHSHUPLW UHTXLUHGLQWKH6%&VKDOOEHVXEPLWWHGWRWKH
LVLVVXHGVHH6HFWLRQ
EXLOGLQJRIILFLDO
 5HTXLUHG LQVSHFWLRQV  7KH EXLOGLQJ ™ :KHUHDVWUXFWXUHLVORFDWHGLQDIORRGKD]DUG
RIILFLDO XSRQ QRWLILFDWLRQ VKDOO PDNH WKH DUHD DV HVWDEOLVKHG LQ 6HFWLRQ  RI WKH
LQVSHFWLRQV VHW IRUWK LQ 6HFWLRQV  WKURXJK 6%&WKHEXLOGLQJRIILFLDOPXVWEHSURYLGHG
 ZLWK FHUWLILFDWLRQ WKDW HLWKHU WKH ORZHVW IORRU
™ 7KHEXLOGLQJRIILFLDOLVUHTXLUHGWRYHULI\WKDWWKH HOHYDWLRQIRUVWUXFWXUHVORFDWHGLQIORRGKD]DUG
ZRUN LV FRPSOHWHG LQ DFFRUGDQFH ZLWK WKH DUHDVQRWVXEMHFWWRKLJKYHORFLW\ZDYHDFWLRQ
DSSURYHG FRQVWUXFWLRQ GRFXPHQWV ,W LV WKH RU WKH HOHYDWLRQ RI WKH ORZHVW KRUL]RQWDO
UHVSRQVLELOLW\RIWKHSHUPLW KROGHUWRQRWLI\WKH VWUXFWXUDO PHPEHU IRU VWUXFWXUHV ORFDWHG LQ
IORRG KD]DUG DUHDV VXEMHFW WR KLJKYHORFLW\

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

ZDYHDFWLRQLVLQFRPSOLDQFHZLWK6HFWLRQ FRPSOLDQFHZLWKWKHDSSOLFDEOHFRGH SURYLVLRQ

RI WKH 6%&  7KLV FHUWLILFDWLRQ PXVW EH DQG QR OLVW FDQ LQFOXGH DOO LWHPV LQ D JLYHQ
VXEPLWWHGSULRUWRDQ\FRQVWUXFWLRQSURFHHGLQJ EXLOGLQJ 7KLV VHFWLRQ WKHUHIRUH JLYHV WKH
DERYHWKLVOHYHO EXLOGLQJ RIILFLDO WKH DXWKRULW\ WR LQVSHFW DQ\
UHJXODWHGLWHPV
)UDPH LQVSHFWLRQ  )UDPLQJ LQVSHFWLRQV
VKDOO EH PDGH DIWHU WKH URRI GHFN RU VKHDWKLQJ 6SHFLDO LQVSHFWLRQV  6SHFLDO LQVSHFWLRQV
IUDPLQJILUHEORFNLQJDQGEUDFLQJDUHLQSODFHDQG VKDOOEHUHTXLUHGLQDFFRUGDQFHZLWKWKH6%&
SLSHV FKLPQH\V DQG YHQWV WR EH FRQFHDOHG DUH ™ 6SHFLDO LQVSHFWLRQV DUH WR EH SURYLGHG E\ WKH
FRPSOHWH DQG WKH URXJK HOHFWULFDO SOXPELQJ RZQHUIRUWKHW\SHVRIZRUNUHTXLUHGLQ6HFWLRQ
KHDWLQJZLUHVSLSHVDQGGXFWVDUHDSSURYHG RIWKH6%&7KHEXLOGLQJRIILFLDOLVWR
™ 7KLVVHFWLRQUHTXLUHVWKDWWKHEXLOGLQJRIILFLDOEH DSSURYH VSHFLDO LQVSHFWRUV DQG YHULI\ WKDW WKH
DEOHWRLQVSHFWWKHIUDPLQJPHPEHUVVXFKDV UHTXLUHG VSHFLDO LQVSHFWLRQV KDYH EHHQ
VWXGV MRLVWV UDIWHUV DQG JLUGHUV DQG RWKHU FRQGXFWHG
LWHPVVXFKDVYHQWVDQGFKLPQH\VWKDWZLOOEH )LQDO LQVSHFWLRQ  7KH ILQDO LQVSHFWLRQ
FRQFHDOHG E\ ZDOO FRQVWUXFWLRQ 5RXJK VKDOOEHPDGHDIWHUZRUNUHTXLUHGE\WKHEXLOGLQJ
HOHFWULFDOZRUNSOXPELQJKHDWLQJZLUHVSLSHV SHUPLWLVFRPSOHWHG
DQGGXFWVPXVWKDYHDOUHDG\EHHQDSSURYHGLQ
DFFRUGDQFH ZLWK WKH DSSOLFDEOH FRGHV SULRU WR ™ 8SRQ FRPSOHWLRQ RI WKH ZRUN IRU ZKLFK WKH
WKLVLQVSHFWLRQ SHUPLW KDV EHHQ LVVXHG DQG EHIRUH WKH
LVVXDQFH RI WKH FHUWLILFDWH RI RFFXSDQF\
/DWKRUJ\SVXPERDUGLQVSHFWLRQ/DWK UHTXLUHGE\6HFWLRQDILQDOLQVSHFWLRQLV
DQGJ\SVXPERDUGLQVSHFWLRQVVKDOOEHPDGHDIWHU WR EH PDGH $OO YLRODWLRQV RI WKH DSSURYHG
ODWKLQJDQGJ\SVXPERDUGLQWHULRUDQGH[WHULRULV FRQVWUXFWLRQ GRFXPHQWV DQG SHUPLW DUH WR EH
LQ SODFH EXW EHIRUH DQ\ SODVWHULQJ LV DSSOLHG RU QRWHG DQG WKH KROGHU RI WKH SHUPLW LV WR EH
EHIRUHJ\SVXPERDUGMRLQWVDQGIDVWHQHUVDUHWDSHG QRWLILHGRIWKHGLVFUHSDQFLHV
DQGILQLVKHG  ,QVSHFWLRQDJHQFLHV7KHEXLOGLQJRIILFLDO
([FHSWLRQ*\SVXPERDUGWKDWLVQRWSDUWRIDILUH LV DXWKRUL]HG WR DFFHSW UHSRUWV RI DSSURYHG
UHVLVWDQFHUDWHGDVVHPEO\RUDVKHDUDVVHPEO\ LQVSHFWLRQDJHQFLHVSURYLGHGVXFKDJHQFLHVVDWLVI\
WKHUHTXLUHPHQWVDVWRTXDOLILFDWLRQVDQGUHOLDELOLW\
™ ,QRUGHUWRYHULI\WKDWODWKDQGJ\SVXPERDUGLV
SURSHUO\ DWWDFKHG WR IUDPLQJ PHPEHUV LW LV ™ $V DQ DOWHUQDWLYH WR WKH EXLOGLQJ RIILFLDO
QHFHVVDU\IRUWKHEXLOGLQJRIILFLDOWREHDEOHWR FRQGXFWLQJ WKH LQVSHFWLRQ KH RU VKH LV
LQVSHFWEHIRUHWKHSODVWHURUMRLQWILQLVKPDWHULDO SHUPLWWHGWRDFFHSWLQVSHFWLRQVRIDQGUHSRUWV
LV DSSOLHG 7KLV LV UHTXLUHG RQO\ IRU J\SVXP E\ DSSURYHG LQVSHFWLRQ DJHQFLHV $SSURSULDWH
ERDUG WKDW LV SDUW RI HLWKHU D ILUH UHVLVWDQW FULWHULDRQZKLFKWREDVHDSSURYDORILQVSHFWLRQ
DVVHPEO\RUDVKHDUZDOO DJHQFLHVFDQEHIRXQG LQ 6HFWLRQ RIWKH
6%&
)LUH DQG VPRNHUHVLVWDQW SHQHWUDWLRQV
3URWHFWLRQ RI MRLQWV DQG SHQHWUDWLRQV LQ ILUH  ,QVSHFWLRQUHTXHVWV,WVKDOOEHWKHGXW\RI
UHVLVWDQFHUDWHG DVVHPEOLHV VPRNH EDUULHUV DQG WKH KROGHU RI WKH EXLOGLQJ SHUPLW RU WKHLU GXO\
VPRNHSDUWLWLRQVVKDOOQRWEHFRQFHDOHGIURPYLHZ DXWKRUL]HGDJHQWWRQRWLI\WKHEXLOGLQJRIILFLDOZKHQ
XQWLOLQVSHFWHGDQGDSSURYHG ZRUNLVUHDG\IRULQVSHFWLRQ,WVKDOOEHWKHGXW\RI
WKHSHUPLWKROGHUWRSURYLGHDFFHVVWRDQGPHDQVIRU
™ 7KH EXLOGLQJ RIILFLDO PXVW KDYH DQ RSSRUWXQLW\
WR LQVSHFW MRLQW SURWHFWLRQ DQG SHQHWUDWLRQ DQ\LQVSHFWLRQVRIVXFKZRUNWKDWDUHUHTXLUHGE\
SURWHFWLRQDVUHTXLUHGE\6HFWLRQVDQG WKLVFRGH
RIWKH6%&IRUILUHDQGVPRNHUHVLVWDQFH ™ ,W LV WKH UHVSRQVLELOLW\ RI WKH SHUPLW KROGHU RU
UDWHG DVVHPEOLHV EHIRUH LW LV FRQFHDOHG IURP RWKHUDXWKRUL]HGSHUVRQVXFKDVWKHFRQWUDFWRU
YLHZ SHUIRUPLQJ WKH ZRUN WR DUUDQJH WKH UHTXLUHG
2WKHU LQVSHFWLRQV  ,Q DGGLWLRQ WR WKH LQVSHFWLRQVZKHQFRPSOHWHGZRUNLVUHDG\DQG
WRDOORZVXIILFLHQWWLPHIRUWKHEXLOGLQJRIILFLDOWR
LQVSHFWLRQVVSHFLILHGDERYHWKHEXLOGLQJRIILFLDOLV
VFKHGXOHDYLVLWWRWKHVLWHWRSUHYHQWZRUNIURP
DXWKRUL]HGWRPDNHRUUHTXLUHRWKHULQVSHFWLRQVRI EHLQJFRQFHDOHGSULRUWRLQVSHFWLRQ$FFHVVWR
DQ\FRQVWUXFWLRQZRUNWRDVFHUWDLQFRPSOLDQFHZLWK WKH ZRUN WR EH LQVSHFWHG PXVW EH SURYLGHG
WKHSURYLVLRQVRIWKLVFRGHDQGRWKHUODZVWKDWDUH LQFOXGLQJDQ\VSHFLDOPHDQVVXFKDVDODGGHU
HQIRUFHGE\WKHPXQLFLSDOLW\
 $SSURYDO UHTXLUHG  :RUN VKDOO QRW EH
™ $Q\ LWHP UHJXODWHG E\ WKH FRGH LV VXEMHFW WR GRQHEH\RQGWKHSRLQWLQGLFDWHGLQHDFKVXFFHVVLYH
LQVSHFWLRQE\WKHEXLOGLQJ RIILFLDOWR GHWHUPLQH LQVSHFWLRQ ZLWKRXW ILUVW REWDLQLQJ WKH DSSURYDO RI

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

WKH EXLOGLQJ RIILFLDO 7KH EXLOGLQJ RIILFLDO XSRQ  &HUWLILFDWH LVVXHG  $IWHU WKH EXLOGLQJ
QRWLILFDWLRQ VKDOO PDNH WKH UHTXHVWHG LQVSHFWLRQV RIILFLDO LQVSHFWV WKH EXLOGLQJ DQG GRHV QRW ILQG
DQG VKDOO HLWKHU LQGLFDWH WKH SRUWLRQ RI WKH YLRODWLRQV RI WKH SURYLVLRQV RI WKLV FRGH RU RWKHU
FRQVWUXFWLRQ WKDW LV VDWLVIDFWRU\ DV FRPSOHWHG RU ODZVWKHEXLOGLQJRIILFLDOVKDOOLVVXHDFHUWLILFDWHRI
VKDOO QRWLI\ WKH SHUPLW KROGHU RU DQ DJHQW RI WKH RFFXSDQF\WKDWVKDOOFRQWDLQWKHIROORZLQJ
SHUPLWKROGHUZKHUHLQWKHVDPHIDLOVWRFRPSO\ZLWK 
WKLVFRGH$Q\SRUWLRQVWKDWGRQRWFRPSO\VKDOOEH  7KHEXLOGLQJSHUPLWQXPEHU
FRUUHFWHGDQGVXFKSRUWLRQVKDOOQRWEHFRYHUHGRU  7KHDGGUHVVRIWKHVWUXFWXUH
FRQFHDOHGXQWLODXWKRUL]HGE\WKHEXLOGLQJRIILFLDO  7KH QDPH DQG DGGUHVV RI WKH RZQHU RU WKH
™ 7KLV VHFWLRQ HVWDEOLVKHV WKDW ZRUN FDQQRW
RZQHU¶VDXWKRUL]HGDJHQW
SURJUHVV EH\RQG WKH SRLQW RI D UHTXLUHG  $GHVFULSWLRQRIWKDWSRUWLRQRIWKHVWUXFWXUH
LQVSHFWLRQ ZLWKRXW WKH EXLOGLQJ RIILFLDO¶V IRUZKLFKWKHFHUWLILFDWHLVLVVXHG
DSSURYDO 8SRQ PDNLQJ WKH LQVSHFWLRQ WKH  $VWDWHPHQWWKDWWKHGHVFULEHGSRUWLRQRIWKH
EXLOGLQJ RIILFLDO PXVW HLWKHU DSSURYH WKH VWUXFWXUH KDV EHHQ LQVSHFWHG IRU FRPSOLDQFH
FRPSOHWHG ZRUN RU QRWLI\ WKH SHUPLW KROGHU RU ZLWK WKH UHTXLUHPHQWV RI WKLV FRGH IRU WKH
RWKHUUHVSRQVLEOHSDUW\RIWKDWZKLFKGRHVQRW RFFXSDQF\DQGGLYLVLRQRIRFFXSDQF\DQGWKH
FRPSO\ZLWKWKHFRGH$SSURYDOVDQGQRWLFHVRI XVH IRU ZKLFK WKH SURSRVHG RFFXSDQF\ LV
QRQFRPSOLDQFHPXVWEHLQZULWLQJDVUHTXLUHG FODVVLILHG
E\ 6HFWLRQ  WR DYRLG DQ\
 7KHQDPHRIWKHEXLOGLQJRIILFLDO
PLVXQGHUVWDQGLQJ DV WR ZKDW LV UHTXLUHG $Q\
LWHPQRWDSSURYHGFDQQRWEHFRQFHDOHGXQWLOLW
 7KH HGLWLRQ RI WKH FRGH XQGHU ZKLFK WKH
KDV EHHQ FRUUHFWHG DQG DSSURYHG E\ WKH SHUPLWZDVLVVXHG
EXLOGLQJRIILFLDO  7KHXVHDQGRFFXSDQF\LQDFFRUGDQFHZLWKWKH
SURYLVLRQVRIWKH6%&
 7KHW\SHRIFRQVWUXFWLRQDVGHILQHGLQWKH6%&
6(&7,21&(57,),&$7(2) 
2&&83$1&< 7KHGHVLJQRFFXSDQWORDGDQGDQ\LPSDFWWKH
DOWHUDWLRQKDVRQWKHGHVLJQRFFXSDQWORDGRI
 $OWHUHG DUHD XVH DQG RFFXSDQF\ WKHDUHDQRWZLWKLQWKHVFRSHRIWKHZRUN
FODVVLILFDWLRQFKDQJH$OWHUHGDUHDVRIDEXLOGLQJ ,I ILUH SURWHFWLRQ V\VWHPV DUH SURYLGHG
DQG UHORFDWHG EXLOGLQJV VKDOO QRW EH XVHG RU ZKHWKHU WKH ILUH SURWHFWLRQ V\VWHPV DUH
RFFXSLHG DQG FKDQJH LQ WKH H[LVWLQJ XVH RU UHTXLUHG
RFFXSDQF\ FODVVLILFDWLRQ RI D EXLOGLQJ RU SRUWLRQ $Q\VSHFLDOVWLSXODWLRQVDQGFRQGLWLRQVRIWKH
WKHUHRIVKDOOQRWEHPDGHXQWLOWKHEXLOGLQJRIILFLDO EXLOGLQJSHUPLW
KDV LVVXHG D FHUWLILFDWH RI RFFXSDQF\ WKHUHIRU DV
™ 7KH EXLOGLQJ RIILFLDO LV UHTXLUHG WR LVVXH D
SURYLGHG KHUHLQ ,VVXDQFH RI D FHUWLILFDWH RI
FHUWLILFDWHRIRFFXSDQF\DIWHUDVXFFHVVIXOILQDO
RFFXSDQF\VKDOOQRWEHFRQVWUXHGDVDQDSSURYDORI LQVSHFWLRQ KDV EHHQ FRPSOHWHG DQG DOO
DYLRODWLRQRIWKHSURYLVLRQVRIWKLVFRGHRURIRWKHU GHILFLHQFLHVDQGYLRODWLRQVKDYHEHHQUHVROYHG
RUGLQDQFHVRIWKHMXULVGLFWLRQ 7KLV VHFWLRQ OLVWV WKH LQIRUPDWLRQ WKDW PXVW EH
™ 7KLV VHFWLRQ HVWDEOLVKHV WKDW D EXLOGLQJ RU LQFOXGHG RQ WKH FHUWLILFDWH 7KLV LQIRUPDWLRQ LV
VWUXFWXUH WKDW KDV EHHQ UHSDLUHG DOWHUHG XVHIXO WR ERWK WKH EXLOGLQJ RIILFLDO DQG RZQHU
UHORFDWHGRUKDVH[SHULHQFHGDFKDQJHRIXVH EHFDXVHLWLQGLFDWHVWKHFULWHULDXQGHUZKLFKWKH
RU RFFXSDQF\ FDQQRW EH RFFXSLHG XQWLO D VWUXFWXUH ZDV HYDOXDWHG DQG DSSURYHG DW WKH
FHUWLILFDWH RI RFFXSDQF\ LV LVVXHG E\ WKH WLPH WKH FHUWLILFDWH ZDV LVVXHG 7KLV LV
EXLOGLQJRIILFLDOZKLFKUHIOHFWVWKHFRQFOXVLRQRI HVSHFLDOO\ LPSRUWDQW ZKHQ ODWHU DSSO\LQJ
WKH ZRUN DOORZHG E\ WKH EXLOGLQJ SHUPLW $OVR &KDSWHUWRH[LVWLQJVWUXFWXUHV
QRFKDQJHLQRFFXSDQF\RIDQH[LVWLQJEXLOGLQJ  7HPSRUDU\ RFFXSDQF\  7KH EXLOGLQJ
LVSHUPLWWHGZLWKRXWILUVWREWDLQLQJDFHUWLILFDWH RIILFLDOLVDXWKRUL]HGWRLVVXHDWHPSRUDU\FHUWLILFDWH
RIRFFXSDQF\IRUWKHQHZXVH7KHWRROWKDWWKH
RI RFFXSDQF\ EHIRUH WKH FRPSOHWLRQ RI WKH HQWLUH
EXLOGLQJ RIILFLDO XVHV WR FRQWURO WKH XVHV DQG
RFFXSDQFLHVRIYDULRXVEXLOGLQJVDQGVWUXFWXUHV ZRUN FRYHUHG E\ WKH SHUPLW SURYLGHG WKDW VXFK
LVWKHFHUWLILFDWHRIRFFXSDQF\,WLVXQODZIXOWR SRUWLRQ RU SRUWLRQV VKDOO EH RFFXSLHG VDIHO\ 7KH
XVHRURFFXS\DEXLOGLQJRUVWUXFWXUHXQOHVVD EXLOGLQJ RIILFLDO VKDOO VHW D WLPH SHULRG GXULQJ
FHUWLILFDWH RI RFFXSDQF\ KDV EHHQ LVVXHG IRU ZKLFK WKH WHPSRUDU\ FHUWLILFDWH RI RFFXSDQF\ LV
WKDW XVH ,WV LVVXDQFH GRHV QRW UHOLHYH WKH YDOLG
EXLOGLQJ RZQHU IURP WKH UHVSRQVLELOLW\ IRU
™ 7KH EXLOGLQJ RIILFLDO LV SHUPLWWHG WR LVVXH D
FRUUHFWLQJDQ\FRGHYLRODWLRQWKDWPD\H[LVW
WHPSRUDU\ FHUWLILFDWH RI RFFXSDQF\ IRU DOO RU D

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

SRUWLRQRI DEXLOGLQJSULRUWRWKHFRPSOHWLRQ RI ™ 7KLV VHFWLRQ HVWDEOLVKHV WKH DXWKRULW\ RI WKH
DOOZRUN6XFKFHUWLILFDWLRQLVWREHLVVXHGRQO\ EXLOGLQJRIILFLDOWRDSSURYHXWLOLW\FRQQHFWLRQVWR
ZKHQWKHEXLOGLQJRUSRUWLRQLQTXHVWLRQFDQEH D EXLOGLQJ IRU LWHPV VXFK DV ZDWHU VHZHU
VDIHO\ RFFXSLHG SULRU WR IXOO FRPSOHWLRQ 7KH HOHFWULFLW\JDVDQGVWHDPDQGWRUHTXLUHWKHLU
FHUWLILFDWLRQ LV LQWHQGHG WR DFNQRZOHGJH WKDW GLVFRQQHFWLRQ ZKHQ KD]DUGRXV FRQGLWLRQV RU
VRPHEXLOGLQJIHDWXUHV PD\QRWEHFRPSOHWHG HPHUJHQFLHVH[LVW7KHDSSURYDORIWKHEXLOGLQJ
HYHQWKRXJKWKHEXLOGLQJLVVDIHIRURFFXSDQF\ RIILFLDO LVUHTXLUHGEHIRUHDFRQQHFWLRQFDQEH
RU WKDW D SRUWLRQ RI WKH EXLOGLQJ FDQ EH VDIHO\ PDGHIURPDXWLOLW\WRDEXLOGLQJV\VWHPWKDWLV
RFFXSLHGZKLOHZRUNFRQWLQXHVLQDQRWKHUDUHD UHJXODWHG E\ WKH DSSOLFDEOH FRGH LQFOXGLQJ
7KLV SURYLVLRQ SUHFOXGHV WKH RFFXSDQF\ RI D WKRVH UHIHUHQFHG LQ 6HFWLRQ  7KLV
EXLOGLQJRUVWUXFWXUHWKDWGRHVQRWFRQWDLQDOORI LQFOXGHV XWLOLWLHV VXSSO\LQJ ZDWHU VHZHU
WKHUHTXLUHGILUHSURWHFWLRQV\VWHPVDQGPHDQV HOHFWULFLW\ JDV DQG VWHDP VHUYLFHV )RU WKH
RI HJUHVV 7HPSRUDU\ FHUWLILFDWHV VKRXOG EH SURWHFWLRQ RI EXLOGLQJ RFFXSDQWV LQFOXGLQJ
LVVXHG RQO\ ZKHQ LQFLGHQWDO FRQVWUXFWLRQ ZRUNHUV VXFK V\VWHPV PXVW KDYH KDG ILQDO
UHPDLQV VXFK DV VLWH ZRUN DQG LQWHULRU ZRUN LQVSHFWLRQ DSSURYDOV H[FHSW DV DOORZHG E\
WKDW LV QRW UHJXODWHG E\ WKH FRGH DQG H[WHULRU 6HFWLRQIRUWHPSRUDU\FRQQHFWLRQV
GHFRUDWLRQQRWQHFHVVDU\WRWKHLQWHJULW\RIWKH
EXLOGLQJ HQYHORSH 7KH EXLOGLQJ RIILFLDO VKRXOG  7HPSRUDU\ FRQQHFWLRQ  7KH EXLOGLQJ
YLHZWKHLVVXDQFHRIDWHPSRUDU\FHUWLILFDWHRI RIILFLDO VKDOO KDYH WKH DXWKRULW\ WR DXWKRUL]H WKH
RFFXSDQF\ DV HTXDOO\ VLJQLILFDQW DV WKH WHPSRUDU\FRQQHFWLRQRIWKHEXLOGLQJRUV\VWHPWR
LVVXDQFH RI WKH ILQDO FHUWLILFDWH ,QGHHG WKH WKHXWLOLW\VRXUFHRIHQHUJ\IXHORUSRZHU
LVVXDQFH RI D WHPSRUDU\ FHUWLILFDWH RI
™ 7KH EXLOGLQJ RIILFLDO LV SHUPLWWHG WR LVVXH
RFFXSDQF\RIIHUVDJUHDWHUSRWHQWLDOIRUFRQIOLFW
WHPSRUDU\DXWKRUL]DWLRQWRPDNHFRQQHFWLRQVWR
EHFDXVH RQFH WKH EXLOGLQJ RU VWUXFWXUH LV
WKHSXEOLFXWLOLW\V\VWHPSULRUWRWKHFRPSOHWLRQ
RFFXSLHG LW LV YHU\ GLIILFXOW WR UHPRYH WKH
RIDOOZRUN7KLVDFNQRZOHGJHVWKDWEHFDXVHRI
RFFXSDQWVWKURXJKOHJDOPHDQV7KHFHUWLILFDWH
VHDVRQDO OLPLWDWLRQV WLPH FRQVWUDLQWV RU WKH
PXVWVSHFLI\WKHWLPHSHULRGIRUZKLFKLWLVYDOLG
QHHG IRU WHVWLQJ RU SDUWLDO RSHUDWLRQ RI
 5HYRFDWLRQ  7KH EXLOGLQJ RIILFLDO LV HTXLSPHQW VRPH EXLOGLQJ V\VWHPV PD\ EH
DXWKRUL]HG WR LQ ZULWLQJ VXVSHQG RU UHYRNH D VDIHO\ FRQQHFWHG HYHQ WKRXJK WKH EXLOGLQJ LV
FHUWLILFDWHRIRFFXSDQF\RUFRPSOHWLRQLVVXHGXQGHU QRWVXLWDEOHIRUILQDORFFXSDQF\7KHWHPSRUDU\
FRQQHFWLRQ DQG XVH RI FRQQHFWHG HTXLSPHQW
WKHSURYLVLRQVRIWKLVFRGHZKHUHYHUWKHFHUWLILFDWH
VKRXOGEHDSSURYHGZKHQWKHUHTXHVWLQJSHUPLW
LV LVVXHG LQ HUURU RU RQ WKH EDVLV RI LQFRUUHFW KROGHU KDV GHPRQVWUDWHG WR WKH EXLOGLQJ
LQIRUPDWLRQVXSSOLHGRUZKHUHLWLVGHWHUPLQHGWKDW RIILFLDO¶V VDWLVIDFWLRQ WKDW SXEOLF KHDOWK VDIHW\
WKH EXLOGLQJ RU VWUXFWXUH RU SRUWLRQ WKHUHRI LV LQ DQGZHOIDUHZLOOQRWEHHQGDQJHUHG
YLRODWLRQRIDQ\RUGLQDQFHRUUHJXODWLRQRUDQ\RI
WKHSURYLVLRQVRIWKLVFRGH  $XWKRULW\WRGLVFRQQHFWVHUYLFHXWLOLWLHV
7KH EXLOGLQJ RIILFLDO VKDOO KDYH WKH DXWKRULW\ WR
™ 7KHEXLOGLQJRIILFLDOLVDXWKRUL]HGWRLQZULWLQJ DXWKRUL]H GLVFRQQHFWLRQ RI XWLOLW\ VHUYLFH WR WKH
VXVSHQGRUUHYRNHDFHUWLILFDWHRIRFFXSDQF\RU EXLOGLQJVWUXFWXUHRUV\VWHPUHJXODWHGE\WKLVFRGH
FRPSOHWLRQ LVVXHG XQGHU WKH SURYLVLRQV RI WKH
DQGWKHUHIHUHQFHGFRGHVDQGVWDQGDUGVLQFDVHRI
FRGHZKHUHYHUWKHFHUWLILFDWHLVLVVXHGLQHUURU
RU RQ WKH EDVLV RI LQFRUUHFW LQIRUPDWLRQ HPHUJHQF\ ZKHUH QHFHVVDU\ WR HOLPLQDWH DQ
VXSSOLHG RU ZKHUH LW LV GHWHUPLQHG WKDW WKH LPPHGLDWHKD]DUGWROLIHRUSURSHUW\RUZKHUHVXFK
EXLOGLQJ RU VWUXFWXUH RU SRUWLRQ WKHUHRI LV LQ XWLOLW\ FRQQHFWLRQ KDV EHHQ PDGH ZLWKRXW WKH
YLRODWLRQRIDQ\RUGLQDQFHRUUHJXODWLRQRUDQ\ DSSURYDOUHTXLUHGE\ 6HFWLRQ RU 7KH
RI WKH SURYLVLRQV RI WKH FRGH 7KLV VHFWLRQ LV EXLOGLQJRIILFLDOVKDOOQRWLI\WKHVHUYLQJXWLOLW\DQG
QHHGHGWRJLYHWKHEXLOGLQJRIILFLDOWKHDXWKRULW\ ZKHUHYHU SRVVLEOH WKH RZQHU RU WKH RZQHU¶V
WR UHYRNH D FHUWLILFDWH RI RFFXSDQF\ IRU WKH DXWKRUL]HG DJHQW DQG RFFXSDQW RI WKH EXLOGLQJ
UHDVRQVLQGLFDWHGLQWKHFRGHWH[W7KHEXLOGLQJ VWUXFWXUH RU VHUYLFH V\VWHP RI WKH GHFLVLRQ WR
RIILFLDO PD\ DOVR VXVSHQG WKH FHUWLILFDWH RI GLVFRQQHFW SULRU WR WDNLQJ VXFK DFWLRQ ,I QRW
RFFXSDQF\ XQWLO DOO RI WKH FRGH YLRODWLRQV DUH
QRWLILHG SULRU WR GLVFRQQHFWLQJ WKH RZQHU RU
FRUUHFWHG
RFFXSDQWRIWKHEXLOGLQJVWUXFWXUHRUVHUYLFHV\VWHP
6(&7,216(59,&(87,/,7,(6 VKDOO EH QRWLILHG LQ ZULWLQJ DV VRRQ DV SUDFWLFDO
WKHUHDIWHU
 &RQQHFWLRQRIVHUYLFHXWLOLWLHV$SHUVRQ
VKDOOQRWPDNHFRQQHFWLRQVIURPDXWLOLW\VRXUFHRI ™ :KHQ DQ LPPHGLDWH KD]DUG WR OLIH RU SURSHUW\
HQHUJ\IXHORUSRZHUWRDQ\EXLOGLQJRUV\VWHPWKDW H[LVWVWKHEXLOGLQJRIILFLDO KDVWKHDXWKRULW\WR
LV UHJXODWHG E\ WKLV FRGH IRU ZKLFK D SHUPLW LV RUGHUWKHGLVFRQQHFWLRQRIXWLOLW\VHUYLFHV7KLV
UHTXLUHGXQWLODSSURYHGE\WKHEXLOGLQJRIILFLDO FDQ DOVR RFFXU ZKHQ XWLOLW\ VHUYLFH KDV EHHQ

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

FRQQHFWHG ZLWKRXW WKH QHFHVVDU\ DSSURYDOV LQWHQW RI WKLV FRGH RU WKH UXOHV OHJDOO\ DGRSWHG
UHTXLUHG E\ WKH FRGH :KHQHYHU SRVVLEOH WKH WKHUHXQGHU KDYH EHHQ LQFRUUHFWO\ LQWHUSUHWHG WKH
EXLOGLQJRZQHURURZQHU¶VDXWKRUL]HGDJHQWDQG SURYLVLRQV RI WKLV FRGH GR QRW IXOO\ DSSO\ RU DQ
WKH EXLOGLQJ RFFXSDQW RU RFFXSDQWV VKRXOG EH HTXDOO\ JRRG RU EHWWHU IRUP RI FRQVWUXFWLRQ LV
QRWLILHG SULRU WR WKH GLVFRQQHFWLRQ RI WKH
SURSRVHG 7KH ERDUG VKDOO QRW KDYH DXWKRULW\ WR
VHUYLFHV7KHQDWWKHILUVWSUDFWLFDORSSRUWXQLW\
WKH EXLOGLQJ RIILFLDO LV WR IRUPDOO\ QRWLI\ WKH ZDLYHUHTXLUHPHQWVRIWKLVFRGH
EXLOGLQJRZQHURURZQHU¶VDXWKRUL]HGDJHQWLQ ™ 7KLV VHFWLRQ HVWDEOLVKHV WKH JURXQGV IRU DQ
ZULWLQJRIWKHGLVFRQQHFWLRQDFWLYLWLHV$VZLWK DSSHDO ZKLFK FODLPV WKDW WKH EXLOGLQJ RIILFLDO
DOO DGPLQLVWUDWLYH IXQFWLRQV DOO DVSHFWV RI GXH KDV PLVLQWHUSUHWHG RU PLVDSSOLHG D FRGH
SURFHVVPXVWEHIROORZHG SURYLVLRQ7KHERDUGLVQRWDOORZHGWRVHWDVLGH
DQ\RIWKHWHFKQLFDOUHTXLUHPHQWVRIWKHFRGH
6(&7,21%2$5'2)$33($/6 KRZHYHU LW LV DOORZHG WR FRQVLGHU DOWHUQDWLYH
 *HQHUDO  ,Q RUGHU WR KHDU DQG GHFLGH PHWKRGV RI FRPSOLDQFH ZLWK WKH WHFKQLFDO
DSSHDOV RI RUGHUV GHFLVLRQV RU GHWHUPLQDWLRQV UHTXLUHPHQWVVHH6HFWLRQ
PDGH E\ WKH EXLOGLQJ RIILFLDO UHODWLYH WR WKH  4XDOLILFDWLRQV7KHERDUGRIDSSHDOVVKDOO
DSSOLFDWLRQ DQG LQWHUSUHWDWLRQ RI WKLV FRGH WKHUH FRQVLVWRIPHPEHUVZKRDUHTXDOLILHGE\H[SHULHQFH
VKDOOEHDQGLVKHUHE\FUHDWHGDERDUGRIDSSHDOV DQG WUDLQLQJ WR SDVV RQ PDWWHUV SHUWDLQLQJ WR
7KH ERDUG RI DSSHDOV VKDOO EH DSSRLQWHG E\ WKH EXLOGLQJFRQVWUXFWLRQDQGDUHQRWHPSOR\HHVRIWKH
JRYHUQLQJERG\DQGVKDOOKROGRIILFHDWLWVSOHDVXUH MXULVGLFWLRQ
7KH ERDUG VKDOO DGRSW UXOHV RI SURFHGXUH IRU
™ ,WLVLPSRUWDQWWKDWWKHGHFLVLRQVRIWKHDSSHDOV
FRQGXFWLQJLWVEXVLQHVV
ERDUGDUHEDVHGSXUHO\RQWKHWHFKQLFDOPHULWV
™ 7KLVVHFWLRQSURYLGHVDQDJJULHYHGSDUW\ZLWKD LQYROYHG LQ DQ DSSHDO ,W LV QRW WKH SODFH IRU
PDWHULDOLQWHUHVWLQWKHGHFLVLRQRIWKHEXLOGLQJ SROLF\RUSROLWLFDOGHOLEHUDWLRQV7KHPHPEHUVRI
RIILFLDO D SURFHVV WR DSSHDO VXFK D GHFLVLRQ WKH DSSHDOV ERDUG DUH WKHUHIRUH H[SHFWHG WR
EHIRUH D ERDUG RI DSSHDOV 7KLV SURYLGHV D KDYH H[SHULHQFH LQ EXLOGLQJ FRQVWUXFWLRQ
IRUXP RWKHU WKDQ WKH FRXUW RI MXULVGLFWLRQ LQ PDWWHUV
ZKLFK WR UHYLHZ WKH EXLOGLQJ RIILFLDO¶V DFWLRQV
7KLV VHFWLRQ OLWHUDOO\ DOORZV DQ\ SHUVRQ WR 
DSSHDO D GHFLVLRQ RI WKH EXLOGLQJ RIILFLDO ,Q 6(&7,219,2/$7,216
SUDFWLFH WKLV VHFWLRQ KDV EHHQ LQWHUSUHWHG WR
SHUPLWDSSHDOVRQO\E\WKRVHDJJULHYHGSDUWLHV  8QODZIXODFWV,WVKDOOEHXQODZIXOIRUDQ\
ZLWK D PDWHULDO RU GHILQLWLYH LQWHUHVW LQ WKH SHUVRQILUPRUFRUSRUDWLRQWRUHSDLUDOWHUH[WHQG
GHFLVLRQ RI WKH EXLOGLQJ RIILFLDO $Q DJJULHYHG DGG PRYH UHPRYH GHPROLVK RU FKDQJH WKH
SDUW\ PD\ QRW DSSHDO D FRGH UHTXLUHPHQW SHU RFFXSDQF\RIDQ\EXLOGLQJRUHTXLSPHQWUHJXODWHG
VH 7KH LQWHQW RI WKH DSSHDO SURFHVV LV QRW WR E\WKLVFRGHRUFDXVHVDPHWREHGRQHLQFRQIOLFW
ZDLYHRUVHWDVLGHDFRGHUHTXLUHPHQWUDWKHU
ZLWKRULQYLRODWLRQRIDQ\RIWKHSURYLVLRQVRIWKLV
LWLVLQWHQGHGWRSURYLGHDPHDQVRIUHYLHZLQJD
EXLOGLQJ RIILFLDO¶V GHFLVLRQ RQ DQ LQWHUSUHWDWLRQ
FRGH
RU DSSOLFDWLRQ RI WKH FRGH RU WR UHYLHZ WKH ™ 9LRODWLRQVRIWKHFRGHDUHSURKLELWHGDQGIRUP
HTXLYDOHQF\ RI SURWHFWLRQ WR WKH FRGH WKHEDVLVIRUDOOFLWDWLRQVDQGFRUUHFWLRQQRWLFHV
UHTXLUHPHQWV 7KH PHPEHUV RI WKH DSSHDOV
ERDUGDUHDSSRLQWHGE\WKH³JRYHUQLQJERG\´RI  1RWLFHRIYLRODWLRQ7KHEXLOGLQJRIILFLDO
WKH MXULVGLFWLRQ W\SLFDOO\ D FRXQFLO RU LVDXWKRUL]HGWRVHUYHDQRWLFHRIYLRODWLRQRURUGHU
DGPLQLVWUDWRUVXFKDVDPD\RURUFLW\PDQDJHU RQWKHSHUVRQUHVSRQVLEOHIRUWKHUHSDLUDOWHUDWLRQ
DQGUHPDLQPHPEHUVXQWLOUHPRYHGIURPRIILFH H[WHQVLRQDGGLWLRQPRYLQJUHPRYDOGHPROLWLRQ
7KH ERDUG PXVW HVWDEOLVK SURFHGXUHV IRU RU FKDQJH LQ WKH RFFXSDQF\ RI D EXLOGLQJ LQ
HOHFWLQJDFKDLUSHUVRQVFKHGXOLQJFRQGXFWLQJ YLRODWLRQ RI WKH SURYLVLRQV RI WKLV FRGH RU LQ
PHHWLQJV DQG DGPLQLVWUDWLRQ 1RWH WKDW YLRODWLRQRIDSHUPLWRUFHUWLILFDWHLVVXHGXQGHUWKH
$SSHQGL[%RIWKH 6%&FRQWDLQVFRPSOHWH SURYLVLRQVRIWKLVFRGH6XFKRUGHUVKDOOGLUHFWWKH
GHWDLOHG UHTXLUHPHQWV IRU FUHDWLQJ DQ DSSHDOV
GLVFRQWLQXDQFHRIWKHLOOHJDODFWLRQRUFRQGLWLRQDQG
ERDUG LQFOXGLQJ WKH QXPEHU RI PHPEHUV
TXDOLILFDWLRQV DQG DGPLQLVWUDWLYH SURFHGXUHV WKHDEDWHPHQWRIWKHYLRODWLRQ
-XULVGLFWLRQV GHVLULQJ WR XWLOL]H WKHVH ™ 7KH EXLOGLQJ RIILFLDO LV UHTXLUHG WR QRWLI\ WKH
UHTXLUHPHQWV PXVW LQFOXGH $SSHQGL[ % RI WKH SHUVRQUHVSRQVLEOHIRUWKHHUHFWLRQRUXVHRID
6%&LQWKHLUDGRSWLQJRUGLQDQFH EXLOGLQJIRXQGWREHLQYLRODWLRQRIWKHFRGH7KH
VHFWLRQWKDWLVDOOHJHGO\EHLQJYLRODWHGPXVWEH
 /LPLWDWLRQVRQDXWKRULW\$QDSSOLFDWLRQ
IRU DSSHDOVKDOOEH EDVHG RQ D FODLPWKDWWKH WUXH

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

FLWHGVRWKDWWKHUHVSRQVLEOHSDUW\FDQUHVSRQG RIILFLDO 1RUPDOO\ FRUUHFWLRQ QRWLFHV LVVXHG LQ

WRWKHQRWLFH DFFRUGDQFH ZLWK 6HFWLRQ  DUH XVHG WR
LQIRUPWKHSHUPLWKROGHURIFRGHYLRODWLRQV6WRS
 3URVHFXWLRQRIYLRODWLRQ,IWKHQRWLFHRI ZRUNRUGHUVDUHLVVXHGZKHQHQIRUFHPHQWFDQ
YLRODWLRQ LV QRW FRPSOLHG ZLWK SURPSWO\ WKH EH DFFRPSOLVKHG QR RWKHU ZD\ RU ZKHQ D
EXLOGLQJRIILFLDOLV DXWKRUL]HGWR UHTXHVWWKHOHJDO GDQJHURXVFRQGLWLRQH[LVWV
FRXQVHO RI WKH MXULVGLFWLRQ WR LQVWLWXWH WKH
DSSURSULDWH SURFHHGLQJ DW ODZ RU LQ HTXLW\ WR  ,VVXDQFH7KHVWRSZRUNRUGHUVKDOOEHLQ
UHVWUDLQ FRUUHFW RU DEDWH VXFK YLRODWLRQ RU WR ZULWLQJ DQG VKDOO EH JLYHQ WR WKH RZQHU RI WKH
UHTXLUHWKHUHPRYDORUWHUPLQDWLRQRIWKHXQODZIXO SURSHUW\LQYROYHGWKHRZQHU¶VDXWKRUL]HGDJHQWRU
RFFXSDQF\RIWKHEXLOGLQJRUVWUXFWXUHLQYLRODWLRQ WRWKHSHUVRQGRLQJWKHZRUN8SRQLVVXDQFHRID
RI WKH SURYLVLRQV RI WKLV FRGH RU RI WKH RUGHU RU VWRSZRUNRUGHUWKHFLWHGZRUNVKDOOLPPHGLDWHO\
GLUHFWLRQPDGHSXUVXDQWWKHUHWR FHDVH7KHVWRSZRUNRUGHUVKDOOVWDWHWKHUHDVRQIRU
WKHRUGHUDQGWKHFRQGLWLRQVXQGHUZKLFKWKHFLWHG
™ 7KH EXLOGLQJ RIILFLDO PXVW SXUVXH WKURXJK WKH ZRUNZLOOEHSHUPLWWHGWRUHVXPH
XVH RI OHJDO FRXQVHO RI WKH MXULVGLFWLRQ OHJDO
PHDQV WR FRUUHFW WKH YLRODWLRQ 7KLV LV QRW ™ 8SRQ UHFHLSW RI D YLRODWLRQ QRWLFH IURP WKH
RSWLRQDO $Q\ H[WHQVLRQV RI WLPH VR WKDW WKH EXLOGLQJ RIILFLDO DOO FRQVWUXFWLRQ DFWLYLWLHV
YLRODWLRQVPD\EHFRUUHFWHGYROXQWDULO\PXVWEH LGHQWLILHGLQWKHQRWLFHPXVWLPPHGLDWHO\FHDVH
IRU D UHDVRQDEOH ERQD ILGH FDXVH RU WKH H[FHSW DV H[SUHVVO\ SHUPLWWHG WR FRUUHFW WKH
EXLOGLQJ RIILFLDO PD\ EH VXEMHFW WR FULWLFLVP IRU YLRODWLRQ
³DUELWUDU\DQGFDSULFLRXV´DFWLRQV,QJHQHUDOLW  8QODZIXOFRQWLQXDQFH $Q\SHUVRQZKR
LVEHWWHU WRKDYHDVWDQGDUGWLPH OLPLWDWLRQ IRU
VKDOO FRQWLQXHDQ\ ZRUN DIWHU KDYLQJ EHHQ VHUYHG
WKH FRUUHFWLRQ RI YLRODWLRQV 'HSDUWXUHV IURP
WKLV VWDQGDUG PXVW EH IRU D FOHDU DQG ZLWK D VWRS ZRUN RUGHUH[FHSW VXFK ZRUN DV WKDW
UHDVRQDEOHSXUSRVHXVXDOO\VWDWHGLQZULWLQJE\ SHUVRQLVGLUHFWHGWRSHUIRUPWRUHPRYHDYLRODWLRQ
WKHYLRODWRU RUXQVDIHFRQGLWLRQVKDOOEHVXEMHFWWRSHQDOWLHVDV
SUHVFULEHGE\ODZ
 9LRODWLRQ SHQDOWLHV  $Q\ SHUVRQ ZKR
YLRODWHVDSURYLVLRQRIWKLVFRGHRUIDLOVWRFRPSO\ ™ 7KLV VHFWLRQ VWDWHV WKDW WKH ZRUN LQ YLRODWLRQ
ZLWKDQ\RIWKHUHTXLUHPHQWVWKHUHRIRUZKRUHSDLUV PXVW WHUPLQDWH DQG WKDW DOO ZRUN H[FHSW WKDW
ZKLFK LV QHFHVVDU\ WR FRUUHFW WKH YLRODWLRQ RU
RUDOWHUVRUFKDQJHVWKHRFFXSDQF\RIDEXLOGLQJRU
XQVDIH FRQGLWLRQ PXVW FHDVH DV ZHOO $V
VWUXFWXUHLQYLRODWLRQRIWKHDSSURYHGFRQVWUXFWLRQ GHWHUPLQHG E\ WKH JRYHUQPHQW RU LWV
GRFXPHQWVRUGLUHFWLYHRIWKHEXLOGLQJRIILFLDORURI UHSUHVHQWDWLYHLHPXQLFLSDOLW\DSHQDOW\PD\
DSHUPLWRUFHUWLILFDWHLVVXHGXQGHUWKHSURYLVLRQVRI EH DVVHVVHG IRU IDLOXUH WR FRPSO\ ZLWK WKLV
WKLVFRGHVKDOOEHVXEMHFWWRSHQDOWLHVDVSUHVFULEHG VHFWLRQ
E\ODZ

™ 3HQDOWLHVIRUYLRODWLQJSURYLVLRQVRIWKHFRGHDUH
W\SLFDOO\FRQWDLQHGLQFRXQWU\ODZSDUWLFXODUO\LI 6(&7,21816$)(%8,/',1*6
WKH FRGH LV DGRSWHG DW WKDW OHYHO DQG WKH $1'(48,30(17
EXLOGLQJ GHSDUWPHQW PXVW IROORZ WKRVH
SURFHGXUHV ,I WKHUH LV QR VXFK SURFHGXUH  &RQGLWLRQV  %XLOGLQJV VWUXFWXUHV RU
DOUHDG\LQHIIHFWRQHPXVWEHHVWDEOLVKHGZLWK HTXLSPHQWWKDWDUHRUKHUHDIWHUEHFRPHXQVDIHVKDOO
WKHDLGRIOHJDOFRXQVHO EH WDNHQ GRZQ UHPRYHG RU PDGH VDIH DV WKH
EXLOGLQJRIILFLDOGHHPVQHFHVVDU\DQGDVSURYLGHG
IRULQWKLVFRGH
6(&7,216723:25.25'(5 ™ 7KLVVHFWLRQGHVFULEHVWKHUHVSRQVLELOLW\RIWKH
 $XWKRULW\:KHQHYHUWKHEXLOGLQJRIILFLDO EXLOGLQJRIILFLDOWRLQYHVWLJDWHUHSRUWVRIXQVDIH
VWUXFWXUHVDQGHTXLSPHQWDQGSURYLGHVFULWHULD
ILQGV DQ\ ZRUN UHJXODWHG E\ WKLV FRGH EHLQJ
IRUVXFKGHWHUPLQDWLRQ³8QVDIHVWUXFWXUHV´DUH
SHUIRUPHGLQDPDQQHUFRQWUDU\WRWKHSURYLVLRQVRI GHILQHG DV EXLOGLQJV RU VWUXFWXUHV WKDW DUH
WKLVFRGHRULQDGDQJHURXVRUXQVDIHPDQQHUWKH LQVDQLWDU\ GHILFLHQW LQ OLJKW DQG YHQWLODWLRQ RU
EXLOGLQJRIILFLDOLVDXWKRUL]HGWRLVVXHDVWRSZRUN DGHTXDWHH[LWIDFLOLWLHVFRQVWLWXWHDILUHKD]DUG
RUGHU RU DUH RWKHUZLVH GDQJHURXV WR KXPDQ OLIH $OO
™ 7KLV VHFWLRQ SURYLGHV IRU WKH VXVSHQVLRQ RI XQVDIHEXLOGLQJVPXVWHLWKHUEHGHPROLVKHGRU
ZRUNIRUZKLFKDSHUPLWZDVLVVXHGSHQGLQJWKH PDGHVDIHDQGVHFXUHDVGHHPHGDSSURSULDWH
UHPRYDO RU FRUUHFWLRQ RI D VHYHUH YLRODWLRQ RU E\WKHEXLOGLQJRIILFLDO
XQVDIH FRQGLWLRQ LGHQWLILHG E\ WKH EXLOGLQJ

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

 5HFRUG7KHEXLOGLQJRIILFLDOVKDOOFDXVHD VWUXFWXUHVKDOOFRQVWLWXWHVHUYLFHRIQRWLFHXSRQWKH

UHSRUWWREHILOHGRQDQXQVDIHFRQGLWLRQ7KHUHSRUW RZQHU
VKDOO VWDWH WKH RFFXSDQF\ RI WKH VWUXFWXUHDQG WKH ™ 7KHQRWLFHPXVWEHGHOLYHUHGSHUVRQDOO\WRWKH
QDWXUHRIWKHXQVDIHFRQGLWLRQ RZQHURURZQHU¶VDXWKRUL]HGDJHQW,IWKHRZQHU
™ 7KHEXLOGLQJRIILFLDOPXVWILOHDUHSRUWRQHDFK RU DJHQW FDQQRW EH ORFDWHG DGGLWLRQDO
LQYHVWLJDWLRQ RI XQVDIH FRQGLWLRQV VWDWLQJ WKH SURFHGXUHV DUH HVWDEOLVKHG LQFOXGLQJ SRVWLQJ
RFFXSDQF\RIWKHVWUXFWXUHDQGWKHQDWXUHRIWKH WKHXQVDIHQRWLFHRQWKHSUHPLVHVLQTXHVWLRQ
XQVDIHFRQGLWLRQ7KLVUHSRUWSURYLGHVWKHEDVLV 6XFKDFWLRQPD\EHFRQVLGHUHGWKHHTXLYDOHQW
IRUWKHQRWLFHGHVFULEHGLQ6HFWLRQ RISHUVRQDOQRWLFHKRZHYHULWPD\RUPD\QRW
EH GHHPHG E\ WKH FRXUWV DV UHSUHVHQWLQJ D
 1RWLFH,IDQXQVDIHFRQGLWLRQLVIRXQGWKH ³JRRG IDLWK´ HIIRUW WR QRWLI\ 7KHUHIRUH LQ
EXLOGLQJ RIILFLDO VKDOO VHUYH RQ WKH RZQHU WKH DGGLWLRQ WR FRPSO\LQJ ZLWK WKLV VHFWLRQ SXEOLF
RZQHU¶VDXWKRUL]HGDJHQWRUSHUVRQLQFRQWURORIWKH QRWLFHWKURXJKWKHXVHRIQHZVSDSHUVDQGRWKHU
VWUXFWXUH D ZULWWHQ QRWLFH WKDW GHVFULEHV WKH SRVWLQJV LQ D SURPLQHQW ORFDWLRQ DW WKH
FRQGLWLRQGHHPHGXQVDIHDQGVSHFLILHVWKHUHTXLUHG JRYHUQPHQWFHQWHUVKRXOGEHXVHG
UHSDLUV RU LPSURYHPHQWV WR EH PDGH WR DEDWH WKH  5HVWRUDWLRQ  7KH EXLOGLQJ RU HTXLSPHQW
XQVDIH FRQGLWLRQ RU WKDW UHTXLUHV WKH XQVDIH GHWHUPLQHGWREHXQVDIHE\WKHEXLOGLQJRIILFLDOLV
EXLOGLQJWREHGHPROLVKHGZLWKLQDVWLSXODWHGWLPH SHUPLWWHGWREHUHVWRUHGWRDVDIHFRQGLWLRQ7RWKH
6XFKQRWLFHVKDOOUHTXLUHWKHSHUVRQWKXVQRWLILHGWR H[WHQW WKDW UHSDLUV DOWHUDWLRQV RU DGGLWLRQV DUH
GHFODUH LPPHGLDWHO\ WR WKH EXLOGLQJ RIILFLDO PDGHRUDFKDQJHRIRFFXSDQF\RFFXUVGXULQJWKH
DFFHSWDQFHRUUHMHFWLRQRIWKHWHUPVRIWKHRUGHU UHVWRUDWLRQRIWKHEXLOGLQJVXFKUHSDLUVDOWHUDWLRQV
™ :KHQDEXLOGLQJRUVWUXFWXUHLVGHHPHGXQVDIH DGGLWLRQV RU FKDQJH RI RFFXSDQF\ VKDOO FRPSO\
WKH EXLOGLQJ RIILFLDO LV UHTXLUHG WR QRWLI\ WKH ZLWKWKHUHTXLUHPHQWVRIWKLVFRGH
RZQHU RU RZQHU¶V DXWKRUL]HG DJHQW RI WKH
™ 7KLV VHFWLRQ SURYLGHV WKDW XQVDIH VWUXFWXUHV
EXLOGLQJ DV WKH ILUVW VWHS LQ FRUUHFWLQJ WKH
PD\ EH UHVWRUHG WR D VDIH FRQGLWLRQ 7KLV
SUREOHP 6XFK QRWLFH PXVW GHVFULEH WKH
PHDQV WKDW WKH FDXVH RI WKH XQVDIH VWUXFWXUH
QHFHVVDU\UHSDLUVDQGLPSURYHPHQWVWRFRUUHFW
QRWLFH FDQ EH DEDWHG ZLWKRXW WKH VWUXFWXUH
WKH GHILFLHQF\ RU PXVW UHTXLUH WKH XQVDIH
EHLQJ UHTXLUHG WR FRPSO\ IXOO\ ZLWK WKH
EXLOGLQJ RU VWUXFWXUH WR EH GHPROLVKHG LQ D
SURYLVLRQVIRUQHZFRQVWUXFWLRQ$Q\ZRUNGRQH
VSHFLILHG WLPH LQ RUGHU WR SURYLGH IRU SXEOLF
WRHOLPLQDWHWKHXQVDIHFRQGLWLRQDVZHOODVDQ\
KHDOWK VDIHW\ DQG ZHOIDUH $GGLWLRQDOO\ VXFK
FKDQJH LQ RFFXSDQF\ WKDW PD\ RFFXU PXVW
QRWLFHUHTXLUHVWKHLPPHGLDWHUHVSRQVHRIWKH
FRPSO\ZLWKWKHFRGH
RZQHU RU DJHQW ,I WKH RZQHU RU DJHQW LV QRW
DYDLODEOH SXEOLF QRWLFH RI VXFK GHFODUDWLRQ 
VKRXOG VXIILFH IRU WKH SXUSRVHV RI FRPSO\LQJ
ZLWK WKLV VHFWLRQ VHH 6HFWLRQ  7KH 6(&7,21(0(5*(1&<
EXLOGLQJ RIILFLDO PD\ DOVR GHWHUPLQH WKDW 0($685(6
LPPHGLDWH ZRUN LV QHFHVVDU\ WR FRUUHFW DQ
XQVDIH FRQGLWLRQ DQG VHHN D OLHQ DJDLQVW WKH  ,PPLQHQWGDQJHU:KHUHLQWKHRSLQLRQ
EXLOGLQJ RU  VWUXFWXUH WR FRPSHQVDWH WKH RIWKHEXLOGLQJRIILFLDOWKHUHLVLPPLQHQWGDQJHURI
PXQLFLSDOLW\IRUWKHFRVWRIUHPHGLDODFWLRQ IDLOXUHRUFROODSVHRIDEXLOGLQJWKDWHQGDQJHUVOLIH
RU ZKHUH DQ\ EXLOGLQJ RU SDUW RI D EXLOGLQJ KDV
 0HWKRG RI VHUYLFH  6XFK QRWLFHVKDOOEH IDOOHQDQGOLIHLVHQGDQJHUHGE\WKHRFFXSDWLRQRI
GHHPHG SURSHUO\ VHUYHG LI D FRS\ WKHUHRI LV WKH EXLOGLQJRU ZKHUH WKHUH LV DFWXDORU SRWHQWLDO
GHOLYHUHG WR WKH RZQHU RU WKH RZQHU¶V DXWKRUL]HG GDQJHU WR WKH EXLOGLQJ RFFXSDQWV RU WKRVH LQ WKH
DJHQWSHUVRQDOO\VHQWE\FHUWLILHGRUUHJLVWHUHGPDLO SUR[LPLW\RI DQ\ VWUXFWXUHEHFDXVH RI H[SORVLYHV
DGGUHVVHGWR WKH RZQHU RU WKH RZQHU¶VDXWKRUL]HG H[SORVLYHIXPHVRUYDSRUVRUWKHSUHVHQFHRIWR[LF
DJHQW DW WKH ODVW NQRZQ DGGUHVV ZLWK WKH UHWXUQ IXPHVJDVHVRUPDWHULDOVRURSHUDWLRQRIGHIHFWLYH
UHFHLSWUHTXHVWHGRUGHOLYHUHGLQDQ\RWKHUPDQQHU RU GDQJHURXV HTXLSPHQW WKH EXLOGLQJ RIILFLDO LV
DV SUHVFULEHG E\ ORFDO ODZ ,I WKH FHUWLILHG RU KHUHE\ DXWKRUL]HG DQG HPSRZHUHG WR RUGHU DQG
UHJLVWHUHGOHWWHULVUHWXUQHGVKRZLQJWKDWWKHOHWWHU UHTXLUH WKH RFFXSDQWV WR YDFDWH WKH SUHPLVHV
ZDVQRWGHOLYHUHGDFRS\WKHUHRIVKDOOEHSRVWHGLQ IRUWKZLWK 7KH EXLOGLQJ RIILFLDO VKDOO FDXVH WR EH
D FRQVSLFXRXV SODFH LQ RU DERXW WKH VWUXFWXUH SRVWHGDW HDFK HQWUDQFHWR VXFK VWUXFWXUHD QRWLFH
DIIHFWHGE\ VXFKQRWLFH6HUYLFHRIVXFKQRWLFHLQ UHDGLQJDVIROORZV³7KLV6WUXFWXUH,V 8QVDIHDQG
WKHIRUHJRLQJPDQQHUXSRQWKHRZQHU¶VDXWKRUL]HG ,WV2FFXSDQF\+DV%HHQ3URKLELWHGE\WKH%XLOGLQJ
DJHQW RU XSRQ WKH SHUVRQ UHVSRQVLEOH IRU WKH RIILFLDO´,WVKDOOEHXQODZIXOIRUDQ\SHUVRQWRHQWHU
VXFKVWUXFWXUHH[FHSWIRUWKHSXUSRVHRIVHFXULQJWKH

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

VWUXFWXUHPDNLQJWKHUHTXLUHGUHSDLUVUHPRYLQJWKH QHFHVVDU\ ODERU DQG PDWHULDOV WR SHUIRUP WKH

KD]DUGRXVFRQGLWLRQRURIGHPROLVKLQJWKHVDPH UHTXLUHGZRUNDVH[SHGLWLRXVO\DVSRVVLEOH
™ ,IWKHEXLOGLQJRIILFLDOKDVGHWHUPLQHGWKDWIDLOXUH ™ 7KH FRVW RI HPHUJHQF\ ZRUN PD\ KDYH WR EH
RU FROODSVH RI D EXLOGLQJ RU VWUXFWXUH LV SDLG LQLWLDOO\ E\ WKH MXULVGLFWLRQ 7KH LPSRUWDQW
LPPLQHQWIDLOXUHKDVRFFXUUHGWKDWUHVXOWVLQD SULQFLSOH KHUH LV WKDW WKH EXLOGLQJ RIILFLDO PXVW
FRQWLQXHG WKUHDW WR WKH UHPDLQLQJ VWUXFWXUH RU DFW LPPHGLDWHO\ WR SURWHFW WKH SXEOLF ZKHQ
DGMDFHQW SURSHUWLHV RU DQ\ RWKHU XQVDIH ZDUUDQWHG OHDYLQJ WKH GHWDLOV RI FRVWV DQG
FRQGLWLRQDVGHVFULEHGLQWKLVVHFWLRQH[LVWVLQD RZQHUQRWLILFDWLRQIRUODWHU
VWUXFWXUH WKH EXLOGLQJ RIILFLDO LV DXWKRUL]HG WR
UHTXLUH WKH RFFXSDQWV WR YDFDWH WKH SUHPLVHV  &RVWV RI HPHUJHQF\ UHSDLUV  &RVWV
DQG WR SRVW VXFK EXLOGLQJV RU VWUXFWXUHV DV LQFXUUHG LQ WKH SHUIRUPDQFH RI HPHUJHQF\ ZRUN
XQVDIH DQG XQRFFXSLDEOH 8QOHVV DXWKRUL]HG VKDOOEHSDLGE\WKHMXULVGLFWLRQ7KHOHJDOFRXQVHO
E\WKHEXLOGLQJRIILFLDOWRPDNHUHSDLUVVHFXUH RIWKHMXULVGLFWLRQVKDOOLQVWLWXWHDSSURSULDWHDFWLRQ
RUGHPROLVKWKHVWUXFWXUHLWLVLOOHJDOIRUDQ\RQH DJDLQVW WKH RZQHU RI WKH SUHPLVHVRU WKH RZQHU¶V
WR HQWHU WKH EXLOGLQJ RU VWUXFWXUH 7KLV ZLOO DXWKRUL]HG DJHQW ZKHUH WKH XQVDIH VWUXFWXUH LV RU
PLQLPL]HWKHSRWHQWLDOIRULQMXU\ ZDVORFDWHGIRUWKHUHFRYHU\RIVXFKFRVWV
 7HPSRUDU\VDIHJXDUGV1RWZLWKVWDQGLQJ ™ 7KHFRVWRIHPHUJHQF\UHSDLUVLVWREHSDLGE\
RWKHU SURYLVLRQV RI WKLV FRGH ZKHQHYHU LQ WKH WKH MXULVGLFWLRQ ZLWK VXEVHTXHQW OHJDO DFWLRQ
RSLQLRQRIWKHEXLOGLQJRIILFLDOWKHUHLVLPPLQHQW DJDLQVWWKHRZQHURURZQHU¶VDXWKRUL]HGDJHQW
GDQJHU GXH WR DQ XQVDIH FRQGLWLRQ WKH EXLOGLQJ WRUHFRYHUVXFKFRVWV7KLVGRHVQRWSUHFOXGH
RIILFLDOVKDOORUGHUWKHQHFHVVDU\ZRUNWREHGRQH KRZHYHU UHDFKLQJ DQ DOWHUQDWLYH DJUHHPHQW
LQFOXGLQJ WKH ERDUGLQJ XS RI RSHQLQJV WR UHQGHU ZLWKWKHRZQHU
VXFKVWUXFWXUHWHPSRUDULO\VDIHZKHWKHURUQRWWKH  +HDULQJ  $Q\ SHUVRQ RUGHUHG WR WDNH
OHJDO SURFHGXUH KHUHLQ GHVFULEHG KDV EHHQ HPHUJHQF\PHDVXUHVVKDOOFRPSO\ZLWKVXFKRUGHU
LQVWLWXWHGDQG VKDOOFDXVHVXFKRWKHUDFWLRQWR EH IRUWKZLWK $Q\ DIIHFWHG SHUVRQ VKDOO WKHUHDIWHU
WDNHQ DV WKH EXLOGLQJ RIILFLDO GHHPV QHFHVVDU\ WR XSRQ SHWLWLRQ GLUHFWHG WR WKH DSSHDOV ERDUG EH
PHHWVXFKHPHUJHQF\ DIIRUGHGDKHDULQJDVGHVFULEHGLQWKLVFRGH
™ 7KLVVHFWLRQUHFRJQL]HVWKHQHHGIRULPPHGLDWH ™ $Q\RQHRUGHUHGWRWDNHDQHPHUJHQF\PHDVXUH
DQG HIIHFWLYH DFWLRQ LQ RUGHU WR SURWHFW WKH RU WR YDFDWH D VWUXFWXUH EHFDXVH RI DQ
SXEOLF 7KLV VHFWLRQ HPSRZHUV WKH EXLOGLQJ HPHUJHQF\FRQGLWLRQ PXVW GRVRLPPHGLDWHO\
RIILFLDOWRFDXVHWKHQHFHVVDU\ZRUNWREHGRQH 7KHUHDIWHU DQ\ DIIHFWHG SDUW\ KDV WKH ULJKW WR
WR PLQLPL]H WKH LPPLQHQW GDQJHU WHPSRUDULO\ DSSHDO WKH DFWLRQ WR WKH DSSHDOV ERDUG WR
ZLWKRXW UHJDUG IRU GXH SURFHVV 7KLV VHFWLRQ GHWHUPLQH ZKHWKHU WKH RUGHU VKRXOG EH
KDVWREHYLHZHGFULWLFDOO\LQVRIDUDVWKHGDQJHU FRQWLQXHGPRGLILHGRUUHYRNHG,WLVLPSHUDWLYH
RIVWUXFWXUDOIDLOXUHWRZKLFKWKHEXLOGLQJRIILFLDO WKDWDSSHDOVWRDQHPHUJHQF\RUGHURFFXUDIWHU
KDV UHVSRQGHG PXVW EH ³LPPLQHQW´ WKDW LV WKHKD]DUGKDVEHHQDEDWHGUDWKHUWKDQEHIRUH
UHDGLO\DSSDUHQWDQGLPPHGLDWH WR PLQLPL]H WKH ULVN WR WKH RFFXSDQWV
HPSOR\HHVFOLHQWVDQGSXEOLF
 &ORVLQJ VWUHHWV  :KHUH QHFHVVDU\ IRU
SXEOLFVDIHW\WKHEXLOGLQJRIILFLDOVKDOOWHPSRUDULO\ 
FORVH VWUXFWXUHV DQG FORVH RU RUGHU WKH DXWKRULW\
KDYLQJ MXULVGLFWLRQ WR FORVH VLGHZDONV VWUHHWV 6(&7,21'(02/,7,21
SXEOLF ZD\V DQG SODFHV DGMDFHQW WR XQVDIH  *HQHUDO7KHEXLOGLQJRIILFLDOVKDOORUGHU
VWUXFWXUHV DQG SURKLELW WKH VDPH IURP EHLQJ WKH RZQHU RU RZQHU¶V DXWKRUL]HG DJHQW RI DQ\
XWLOL]HG SUHPLVHVXSRQZKLFKLVORFDWHGDQ\VWUXFWXUHWKDWLQ
™ 7KHEXLOGLQJRIILFLDOLVDXWKRUL]HGWRWHPSRUDULO\ WKH EXLOGLQJ RIILFLDO¶V MXGJPHQW LV VR ROG RU
FORVH VLGHZDONV VWUHHWV DQG DGMDFHQW GLODSLGDWHGRUKDVEHFRPHVRRXWRIUHSDLUDVWREH
VWUXFWXUHVDVQHHGHGWRSURWHFWWKHSXEOLFIURP GDQJHURXVXQVDIHLQVDQLWDU\RURWKHUZLVHXQILWIRU
WKH XQVDIH EXLOGLQJ RU VWUXFWXUH ZKHQ DQ KXPDQKDELWDWLRQRIRFFXSDQF\DQGVXFKWKDWLWLV
LPPLQHQW GDQJHU H[LVWV 6LQFH WKH EXLOGLQJ XQUHDVRQDEOH WR UHSDLU WKH VWUXFWXUH WR GHPROLVK
RIILFLDO PD\ QRW KDYH WKH GLUHFW DXWKRULW\ WR DQG UHPRYHVXFK VWUXFWXUHRU LI VXFK VWUXFWXUHLV
FORVHVLGHZDONVVWUHHWVDQGRWKHUSXEOLFZD\V FDSDEOHRIEHLQJPDGHVDIHE\UHSDLUVWRUHSDLUDQG
WKH DJHQF\ KDYLQJ VXFK MXULVGLFWLRQ HJ WKH PDNHVDIHDQGVDQLWDU\RUWRGHPROLVKDQGUHPRYH
SROLFHRUKLJKZD\GHSDUWPHQWPXVWEHQRWLILHG
WR WKH RZQHU¶V RU WKH RZQHU¶V DXWKRUL]HG DJHQW¶V
 (PHUJHQF\ UHSDLUV )RU WKH SXUSRVHV RI RSWLRQ RU ZKHUH WKHUH KDV EHHQ D FHVVDWLRQ RI
WKLVVHFWLRQWKHEXLOGLQJRIILFLDOVKDOOHPSOR\WKH QRUPDOFRQVWUXFWLRQRIDQ\VWUXFWXUHIRUDSHULRGRI

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

PRUHWKDQWZR\HDUVWRGHPROLVKDQGUHPRYHVXFK ™ 7KHJRYHUQLQJERG\PD\VHOODQ\YDOXDEOHVRU
VWUXFWXUH VDOYDJHDEOH PDWHULDOV IRU WKH KLJKHVW SULFH
REWDLQDEOH7KHFRVWVRIGHPROLWLRQDUHWKHQWR
™ 7KLVVHFWLRQGHVFULEHVWKHFRQGLWLRQVZKHUHWKH EHGHGXFWHGIURPDQ\SURFHHGVIURPWKHVDOH
EXLOGLQJ RIILFLDO KDV WKH DXWKRULW\ WR RUGHU WKH RIVDOYDJH,IDVXUSOXVRIIXQGVUHPDLQVLWLVWR
RZQHU WR UHPRYH WKH VWUXFWXUH &RQGLWLRQV EH UHPLWWHG WR WKH RZQHU ZLWK DQ LWHPL]HG
ZKHUHWKHEXLOGLQJRIILFLDOPD\JLYHWKHRZQHU H[SHQVH DQG LQFRPH DFFRXQW ,I QR VXUSOXV
RU RZQHU¶V DXWKRUL]HG DJHQW WKH RSWLRQ RI UHPDLQVWKLVPXVWDOVREHUHSRUWHG
UHSDLULQJWKHVWUXFWXUHDUHDOVRLQWKLVVHFWLRQ
7KHEXLOGLQJRIILFLDOVKRXOGFDUHIXOO\GRFXPHQW 
WKHFRQGLWLRQRIWKHVWUXFWXUHSULRUWRLVVXLQJD
GHPROLWLRQRUGHUWRSURYLGHDQDGHTXDWHEDVLV
IRURUGHULQJWKHRZQHUWRUHPRYHWKHVWUXFWXUH
 1RWLFHV DQG RUGHUV  1RWLFHV DQG RUGHUV
VKDOOFRPSO\ZLWK6HFWLRQ
™ %HIRUHWKHEXLOGLQJRIILFLDOFDQSXUVXHDFWLRQWR
GHPROLVKDEXLOGLQJLQDFFRUGDQFHZLWK6HFWLRQ
RULWLVLPSHUDWLYHWKDWDOORZQHUV
DQG DQ\ RWKHU SHUVRQV ZLWK D UHFRUGHG
HQFXPEUDQFHRQWKHSURSHUW\EHJLYHQSURSHU
QRWLFHRIWKHGHPROLWLRQSODQV6HH6HFWLRQ
IRUQRWLFHDQGRUGHUUHTXLUHPHQWV
 )DLOXUH WR FRPSO\  ,I WKH RZQHU RU WKH
RZQHU¶V DXWKRUL]HG DJHQW RI D SUHPLVHV IDLOV WR
FRPSO\ ZLWK D GHPROLWLRQ RUGHU ZLWKLQ WKH WLPH
SUHVFULEHG WKH EXLOGLQJ RIILFLDO VKDOO FDXVH WKH
VWUXFWXUH WR EH GHPROLVKHG DQG UHPRYHG HLWKHU
WKURXJKDQDYDLODEOHSXEOLFDJHQF\RUE\FRQWUDFWRU
DUUDQJHPHQWZLWK SULYDWHSHUVRQVDQG WKHFRVWRI
VXFK GHPROLWLRQ DQG UHPRYDO VKDOO EH FKDUJHG
DJDLQVWWKHUHDOHVWDWHXSRQZKLFKWKHVWUXFWXUHLV
ORFDWHGDQGVKDOOEHDOLHQXSRQVXFKUHDOHVWDWH
™ :KHQ WKH RZQHU RU RZQHU¶V DXWKRUL]HG DJHQW
IDLOV WR FRPSO\ ZLWK D GHPROLWLRQ RUGHU WKH
EXLOGLQJ RIILFLDO LV DXWKRUL]HG WR WDNH DFWLRQ WR
KDYH WKH EXLOGLQJ UD]HG DQG UHPRYHG 7KH
FRVWV DUH WR EH FKDUJHG DV D OLHQ DJDLQVW WKH
UHDOHVWDWH7RUHGXFHFRPSODLQWVUHJDUGLQJWKH
YDOLGLW\RIGHPROLWLRQFRVWVWKHEXLOGLQJRIILFLDO
VKRXOG REWDLQ FRPSHWLWLYH ELGV IURP VHYHUDO
GHPROLWLRQ FRQWUDFWRUV EHIRUH DXWKRUL]LQJ DQ\
FRQWUDFWRUWRUD]HWKHVWUXFWXUH
 6DOYDJH PDWHULDOV  :KHUH DQ\ VWUXFWXUH
KDV EHHQ RUGHUHG GHPROLVKHG DQG UHPRYHG WKH
JRYHUQLQJ ERG\ RU RWKHU GHVLJQDWHGRIILFHU XQGHU
VDLG FRQWUDFW RU DUUDQJHPHQW DIRUHVDLG VKDOO KDYH
WKHULJKWWRVHOOWKHVDOYDJHDQGYDOXDEOHPDWHULDOV
DWWKHKLJKHVWSULFHREWDLQDEOH7KHQHWSURFHHGVRI
VXFK VDOH DIWHU GHGXFWLQJ WKH H[SHQVHV RI VXFK
GHPROLWLRQDQGUHPRYDOVKDOOEHSURPSWO\UHPLWWHG
ZLWKDUHSRUWRIVXFKVDOHRUWUDQVDFWLRQLQFOXGLQJ
WKHLWHPVRIH[SHQVHDQGWKHDPRXQWVGHGXFWHGIRU
WKH SHUVRQ ZKR LV HQWLWOHG WKHUHWR VXEMHFW WR DQ\
RUGHURIDFRXUW,IVXFKDVXUSOXVGRHVQRWUHPDLQ
WREHWXUQHGRYHUWKHUHSRUWVKDOOVRVWDWH

6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21

™ %LEOLRJUDSK\ $&,  %XLOGLQJ &RGH 5HTXLUHPHQWV IRU

6WUXFWXUDO &RQFUHWH )DUPLQJWRQ +LOOV 0,
7KHIROORZLQJUHVRXUFHPDWHULDOVZHUHXVHGLQWKH
$PHULFDQ&RQFUHWH,QVWLWXWH
SUHSDUDWLRQRIWKHFRPPHQWDU\IRUWKLVFKDSWHU
8&%& 8QLIRUP &RGH IRU %XLOGLQJ &RQVHUYDWLRQ
RIWKHFRGH
:DVKLQJWRQ '& ,QWHUQDWLRQDO &RGH &RXQFLO
/HJDO$VSHFWVRI&RGH$GPLQLVWUDWLRQ:DVKLQJWRQ

'&,QWHUQDWLRQDO&RGH&RXQFLO



6%&&& 

&+$37(5²6&23($1'$'0,1,675$7,21
























7KLVSDJHOHIWLQWHQWLRQDOO\EODQN

6%&&& 

 &+$37(5²'(),1,7,216

²'(),1,7,216

&RGHV E\ WKHLU YHU\ QDWXUH DUH WHFKQLFDO

™ *HQHUDO&RPPHQWV
GRFXPHQWV(YHU\ZRUGWHUPDQGSXQFWXDWLRQPDUN
$OO WHUPV GHILQHG LQ WKH FRGH DUH ORFDWHG FDQ DOWHU D VHQWHQFH¶V PHDQLQJ DQG LI PLVXVHG
DOSKDEHWLFDOO\ LQ &KDSWHU  7KH XVHU VKRXOG EH PXGG\ LWV LQWHQW )XUWKHU WKH FRGH ZLWK LWV EURDG
IDPLOLDU ZLWK WKH WHUPV LQ WKLV FKDSWHU EHFDXVH VFRSH RI DSSOLFDELOLW\ LQFOXGHV WHUPV WKDW KDYH D
GHILQLWLRQVDUHHVVHQWLDOWRWKHFRUUHFWLQWHUSUHWDWLRQ GLIIHUHQW PHDQLQJ WKDQ WKH JHQHUDOO\ DFFHSWHG
RIWKHFRGHDQGWKHXVHUPLJKWQRWEHDZDUHWKDWD PHDQLQJRIWKHWHUP7KHVHWHUPVFDQKDYHPXOWLSOH
SDUWLFXODU WHUP HQFRXQWHUHG LQ WKH WH[W KDV WKH PHDQLQJV GHSHQGLQJ RQ WKH FRQWH[W RU GLVFLSOLQH
VSHFLDO GHILQLWLRQ IRXQG KHUHLQ 6HFWLRQ  )RUWKHVHUHDVRQVPDLQWDLQLQJDFRQVHQVXVRQWKH
FRQWDLQV WKH VFRSH RI WKH FKDSWHU 6HFWLRQ  VSHFLILFPHDQLQJRIWHUPVFRQWDLQHGLQWKHFRGHLV
HVWDEOLVKHVWKHLQWHUFKDQJHDELOLW\RIWKHWHUPVLQWKH HVVHQWLDO &KDSWHU  SHUIRUPV WKLV IXQFWLRQ E\
FRGH 6HFWLRQ  HVWDEOLVKHV WKH XVH RI WHUPV VWDWLQJ FOHDUO\ ZKDW VSHFLILF WHUPV PHDQ IRU WKH
GHILQHG LQ RWKHU FRGHV 6HFWLRQ  HVWDEOLVKHV SXUSRVHRIWKHFRGH
WKH XVH RI XQGHILQHG WHUPV DQG 6HFWLRQ  OLVWV 
WHUPVDQGWKHLUGHILQLWLRQVDFFRUGLQJWRWKHFRGH

™ 3XUSRVH 
™ :KHQDZRUGRUWHUPDSSHDUVLQWKHFRGHDQG
6(&7,21*(1(5$/ WKDWZRUGRUWHUPLVQRWGHILQHGLQWKLVFKDSWHU
RWKHU UHIHUHQFHV PD\ EH XVHG WR ILQG LWV
 6FRSH8QOHVVRWKHUZLVHH[SUHVVO\VWDWHG GHILQLWLRQ VXFK DV WKH 6%&  6%& 
WKH IROORZLQJ ZRUGV DQG WHUPV VKDOO IRU WKH 6%&6%&6%&6%&6%&
SXUSRVHVRIWKLVFRGHKDYHWKHPHDQLQJVVKRZQLQ 6%&6%&6%&DQG
WKLVFKDSWHU ,QWHUQDWLRQDO :LOGODQG8UEDQ ,QWHUIDFH &RGH
,:8,& 7KHVH FRGHV FRQWDLQ DGGLWLRQDO
™ 7KLVVHFWLRQFRQWDLQVODQJXDJHDQGSURYLVLRQV GHILQLWLRQV VRPH SDUDOOHO DQG GXSOLFDWLYH
WKDWDUHVXSSOHPHQWDOWRWKHXVHRI&KDSWHU ZKLFK PD\ EH XVHG LQ WKH HQIRUFHPHQW RI WKH
,W JLYHV JXLGDQFH WR WKH XVH RI WKH GHILQHG FRGHRULQWKHHQIRUFHPHQWRIWKHRWKHUFRGHV
ZRUGV UHOHYDQW WR WHQVH JHQGHU DQG SOXUDOLW\ E\UHIHUHQFH
)LQDOO\ WKLV VHFWLRQ SURYLGHV GLUHFWLRQ RQ KRZ
WRDSSO\WHUPVWKDWDUHQRWGHILQHGLQWKHFRGH  7HUPVQRWGHILQHG:KHUHWHUPVDUHQRW
GHILQHG WKURXJK WKH PHWKRGV DXWKRUL]HG E\ WKLV
 ,QWHUFKDQJHDELOLW\  :RUGV XVHG LQ WKH FKDSWHUVXFKWHUPVVKDOOKDYHRUGLQDULO\DFFHSWHG
SUHVHQWWHQVHLQFOXGHWKHIXWXUHZRUGVVWDWHGLQWKH PHDQLQJVVXFKDVWKHFRQWH[WLPSOLHV
PDVFXOLQHJHQGHULQFOXGHWKHIHPLQLQHWKHVLQJXODU
QXPEHU LQFOXGHV WKH SOXUDO DQG WKH SOXUDO WKH ™ :RUGV RU WHUPV QRW GHILQHG LQ WKH 6DXGL
VLQJXODU %XLOGLQJ &RGHV VHULHV DUH LQWHQGHG WR EH
DSSOLHG EDVHG RQ WKHLU ³RUGLQDULO\ DFFHSWHG
™ :KLOHWKHGHILQLWLRQVFRQWDLQHGRUUHIHUHQFHGLQ PHDQLQJV´7KHLQWHQWRIWKLVVWDWHPHQWLVWKDWD
&KDSWHUDUHWREHWDNHQOLWHUDOO\JHQGHUDQG GLFWLRQDU\GHILQLWLRQPD\VXIILFHSURYLGHGLWLVLQ
WHQVH DUH LQWHUFKDQJHDEOH WKXV DQ\ FRQWH[W 6RPHWLPHV WKH FRQVWUXFWLRQ WHUPV
JUDPPDWLFDOLQFRQVLVWHQFLHVZLWKWKHFRGHWH[W XVHGLQWKHFRGHDUHQRWVSHFLILFDOO\GHILQHGLQ
ZLOO QRW KLQGHU WKH XQGHUVWDQGLQJ RU WKHFRGHRUHYHQLQDGLFWLRQDU\,QVXFKDFDVH
HQIRUFHPHQWRIWKHUHTXLUHPHQWV GHILQLWLRQV FRQWDLQHG LQ WKH UHIHUHQFHG
VWDQGDUGV VHH &KDSWHU  DQG SXEOLVKHG
 7HUPV GHILQHG LQ RWKHU FRGHV  :KHUH
WH[WERRNVRQWKHVXEMHFWLQTXHVWLRQDUHJRRG
WHUPVDUHQRWGHILQHGLQWKHFRGHUHTXLUHPHQWVDQG UHVRXUFHV
DUH GHILQHG LQ RWKHU 6DXGL %XLOGLQJ &RGHV
SURYLVLRQVDQGUHTXLUHPHQWVVXFKWHUPVVKDOOKDYH 6(&7,21*(1(5$/'(),1,7,216
WKH PHDQLQJV DVFULEHG WR WKHP DV LQ WKRVH ™ 7KLV VHFWLRQ FRQWDLQV GHILQLWLRQV RI WHUPV WKDW
SURYLVLRQVDQGUHTXLUHPHQWV DUHXVHGWKURXJKRXWWKHFRGH,WLVLPSRUWDQWWR
HPSKDVL]HWKDWWKHVHGHILQLWLRQVDUHDSSOLFDEOH
HYHU\ZKHUH WKH WHUP LV XVHG LQ WKH FRGH

6%&&& 

&+$37(5²'(),1,7,216

'HILQLWLRQV RI WHUPV FDQ KHOS LQ WKH LQKHUHQWKD]DUGVHJD*URXS$UHVWDXUDQW

XQGHUVWDQGLQJ DQG DSSOLFDWLRQ RI WKH FRGH FKDQJHG WR D *URXS $ QLJKWFOXE 7KH
UHTXLUHPHQWV FODVVLILFDWLRQ PD\ EH WKH VDPH EXW WKH ULVN
OHYHO KDV FKDQJHG &KDQJH RI RFFXSDQF\
$'',7,21$QH[WHQVLRQRULQFUHDVHLQIORRUDUHD ZKHWKHUFKDQJHRIRFFXSDQF\FODVVLILFDWLRQRU
QXPEHU RI VWRULHV RU KHLJKW RI D EXLOGLQJ RU VLPSO\XVHLVVSHFLILFDOO\DGGUHVVHGLQ&KDSWHU
VWUXFWXUH RIWKHFRGH
™ 7KLV WHUP LV XVHG WR GHVFULEH WKH FRQGLWLRQ %8,/',1* 2)),&,$/ 7KH RIILFHU RU RWKHU
ZKHQ WKH IORRU DUHD RU KHLJKW RI DQ H[LVWLQJ GHVLJQDWHG DXWKRULW\ FKDUJHG ZLWK WKH
EXLOGLQJRUVWUXFWXUH LVLQFUHDVHG 7KLVWHUPLV
DGPLQLVWUDWLRQDQGHQIRUFHPHQWRIWKLVFRGH
RQO\DSSOLFDEOHWRH[LVWLQJEXLOGLQJVQHYHUQHZ
RQHV ™ 5HJDUGOHVVRIWLWOHWKHLQGLYLGXDOGHVLJQDWHGE\
WKHMXULVGLFWLRQDVWKHSHUVRQZKRDGPLQLVWHUV
$/7(5$7,21$Q\FRQVWUXFWLRQRUUHQRYDWLRQWR DQGHQIRUFHVWKHFRGHLVWKHEXLOGLQJRIILFLDO,Q
DQH[LVWLQJVWUXFWXUHRWKHUWKDQDUHSDLURUDGGLWLRQ DGGLWLRQ WKH EXLOGLQJ RIILFLDO PD\ DSSRLQW
$OWHUDWLRQV DUH FODVVLILHG DV /HYHO  /HYHO  DQG YDULRXV RWKHU LQGLYLGXDOV WR DVVLVW LQ WKH
/HYHO DFWLYLWLHVVXFKDVGLIIHUHQWGHSDUWPHQWVRIWKH
PXQLFLSDOLW\,QPDQ\MXULVGLFWLRQVWKHDXWKRULW\
™ 7KH FRGH XWLOL]HV WKLV WHUP WR UHIOHFW
RI WKH EXLOGLQJ RIILFLDO LV H[WHQGHG WR VRPH
FRQVWUXFWLRQRSHUDWLRQVLQWHQGHGIRUDQH[LVWLQJ
GHJUHH WR SODQV H[DPLQHUV DQG LQVSHFWRUV
EXLOGLQJEXWQRWLQWKHVFRSHRIDQDGGLWLRQRU
6HFWLRQ  VHWV IRUWK WKH GXWLHV DQG
UHSDLU VHH WKH GHILQLWLRQV RI ³$GGLWLRQ´ DQG
UHVSRQVLELOLWLHVRIWKHEXLOGLQJRIILFLDO
³5HSDLU´
$33529('$FFHSWDEOHWRWKHEXLOGLQJRIILFLDORU '$1*(5286$Q\EXLOGLQJVWUXFWXUHRUSRUWLRQ
DXWKRULW\KDYLQJMXULVGLFWLRQ WKHUHRIWKDWPHHWVDQ\RIWKHFRQGLWLRQVGHVFULEHG
EHORZVKDOOEHGHHPHGGDQJHURXV
™ $V UHODWHG WR WKH DFFHSWDQFH SURFHVV IRU 
EXLOGLQJ LQVWDOODWLRQV LQFOXGLQJ PDWHULDOV  7KH EXLOGLQJ RU VWUXFWXUH KDV FROODSVHG KDV
HTXLSPHQW DQG FRQVWUXFWLRQ V\VWHPV WKLV SDUWLDOO\ FROODSVHG KDV PRYHG RII LWV
GHILQLWLRQLGHQWLILHVZKHUHWKHXOWLPDWHDXWKRULW\
IRXQGDWLRQRUODFNVWKHQHFHVVDU\VXSSRUWRI
UHVWV :KHUH WKLV WHUP LV XVHG LW LQWHQGV WKDW
RQO\ WKH HQIRUFLQJ DXWKRULW\ FDQ DFFHSW D WKHJURXQG
VSHFLILFLQVWDOODWLRQRUFRPSRQHQWDVFRPSO\LQJ  7KHUH H[LVWV D VLJQLILFDQW ULVN RI FROODSVH
ZLWKWKHFRGH)RUWKH6%&DQG6%& GHWDFKPHQW RU GLVORGJHPHQW RI DQ\ SRUWLRQ
WKH³EXLOGLQJRIILFLDO´LVLGHQWLILHGDVWKHSHUVRQ PHPEHU DSSXUWHQDQFH RU RUQDPHQWDWLRQ RI
UHVSRQVLEOH IRU DGPLQLVWHULQJ FRGH SURYLVLRQV WKHEXLOGLQJRUVWUXFWXUHXQGHUVHUYLFHORDGV
)RU WKH 6%&  WKH ³ILUH EXLOGLQJ RIILFLDO´ LV
™ 7KLVGHILQLWLRQGHVFULEHVZKDWLVFRQVLGHUHGWR
LGHQWLILHG DV WKH SHUVRQ UHVSRQVLEOH IRU
EHGDQJHURXVLQEXLOGLQJFRQVWUXFWLRQ7KHUHLV
DGPLQLVWHULQJ6%&SURYLVLRQV)RUWKH6%&
D OLVW RI WZR VSHFLILF FULWHULD WKDW ZLOO FDXVH D
6%&6%&6%&WKH
VWUXFWXUHWREHFODVVLILHGDVGDQJHURXV7KHVH
³EXLOGLQJ RIILFLDO´ LV LGHQWLILHG DV WKH SHUVRQ
FULWHULD WDNH LQWR FRQVLGHUDWLRQ WKH FROODSVH RU
UHVSRQVLEOH
OLNHOLKRRGRIFROODSVHRIDVWUXFWXUHRUDSRUWLRQ
&+$1*( 2) 2&&83$1&< $ FKDQJH LQ WKH RU HOHPHQW RI D VWUXFWXUH 7KLV ZRXOG DOVR
XVH RI WKH EXLOGLQJ RU D SRUWLRQ RI D EXLOGLQJ $ LQFOXGHDQ\EXLOGLQJHOHPHQWWKDWFRXOGEHFRPH
FKDQJH RI RFFXSDQF\ VKDOO LQFOXGH DQ\ FKDQJH RI GHWDFKHGDQGSRWHQWLDOO\UHVXOWLQWKHIDLOXUHRI
RFFXSDQF\ FODVVLILFDWLRQ DQ\ FKDQJH IURP RQH RQHRUPRUHRIWKHEXLOGLQJ¶VLQKHUHQWV\VWHPV
JURXS WR DQRWKHU JURXS ZLWKLQ DQ RFFXSDQF\ '()(55('68%0,77$/7KRVHSRUWLRQVRIWKH
FODVVLILFDWLRQRUDQ\FKDQJHLQXVHZLWKLQDJURXS GHVLJQ WKDW DUH QRW VXEPLWWHG DW WKH WLPH RI WKH
IRUDVSHFLILFRFFXSDQF\FODVVLILFDWLRQ DSSOLFDWLRQ DQG WKDW DUH WR EH VXEPLWWHG WR WKH
™ &KDQJLQJ WKH RFFXSDQF\ FODVVLILFDWLRQ LQ DQ EXLOGLQJRIILFLDOZLWKLQDVSHFLILHGSHULRG
H[LVWLQJ VWUXFWXUH PD\ FKDQJH WKH OHYHO RI ™ 6XEPLWWDOGRFXPHQWVDUHUHTXLUHGDWWKHWLPHRI
LQKHUHQW KD]DUGV DGGUHVVHG E\ WKH FRGH )RU SHUPLW DSSOLFDWLRQ VHH 6HFWLRQ  ,I D
H[DPSOH D FKDQJH IURP D PHUFDQWLOH EXLOGLQJ LV ³IDVWWUDFN´ RU LV D VKHOO EXLOGLQJ D
RFFXSDQF\WRDEXVLQHVVRFFXSDQF\UHQGHUVDOO FRPSOHWHVHWRIFRQVWUXFWLRQGRFXPHQWVIRUWKH
*URXS%SURYLVLRQVDSSOLFDEOHWRDOOSRUWLRQVRI EXLOGLQJPD\QRWEHDYDLODEOHDWWKHWLPHRIWKH
WKH VWUXFWXUH ZKHUH WKH RFFXSDQF\ ZDV LQLWLDOSHUPLWDSSOLFDWLRQ6RWKDWDFRPSOHWHVHW
FKDQJHG,QDGGLWLRQFKDQJHRIRFFXSDQF\E\ RI GRFXPHQWV LV DYDLODEOH IRU WKH EXLOGLQJ
ZD\RIFKDQJHRIXVHFDQFKDQJHWKHOHYHORI GHSDUWPHQW UHYLHZ DQG UHFRUGV VRPH RI WKH

6%&&& 

&+$37(5²'(),1,7,216

FRQVWUXFWLRQ GUDZLQJV PD\ EH SURYLGHG DW D  7KHDUHDGHVLJQDWHGDVDIORRGKD]DUGDUHDRQ

ODWHUWLPH:KDWGRFXPHQWVDQGZKHQWKH\ZLOO FRPPXQLW\¶VIORRGKD]DUGPDSRURWKHUZLVH
EH SURYLGHG PXVW EH LQFOXGHG LQ WKH LQLWLDO OHJDOO\GHVLJQDWHG
VXEPLWWDODQGDSSURYHGE\WKHEXLOGLQJRIILFLDO
™ 7KH)HGHUDO(PHUJHQF\0DQDJHPHQW$JHQF\
(48,30(17 25 ),;785( $Q\ SOXPELQJ )(0$ RU LWV HTXLYDOHQW LQ 6DXGL $UDELD
KHDWLQJ HOHFWULFDO YHQWLODWLQJ DLU FRQGLWLRQLQJ SUHSDUHV )ORRG PDSV WKDW GHOLQHDWH WKH ODQG
UHIULJHUDWLQJ DQG ILUH SURWHFWLRQ HTXLSPHQW DQG DUHD VXEMHFW WR LQXQGDWLRQ E\ WKH SHUFHQW
HOHYDWRUV GXPE ZDLWHUV HVFDODWRUV ERLOHUV DQQXDO FKDQFH IORRG )RU WKH SXUSRVH RI WKH
SUHVVXUHYHVVHOVDQGRWKHUPHFKDQLFDOIDFLOLWLHVRU FRGH WKH IORRG KD]DUG DUHD LQ ZKLFK WKH
LQVWDOODWLRQV WKDW DUH UHODWHG WR EXLOGLQJ VHUYLFHV UHTXLUHPHQWVDUHWREHDSSOLHGLVWKHJUHDWHURI
(TXLSPHQW RU IL[WXUH VKDOO QRW LQFOXGH WKHWZRGHOLQHDWHGDUHDV
PDQXIDFWXULQJ SURGXFWLRQ RU SURFHVV HTXLSPHQW +,6725,& %8,/',1* $Q\ EXLOGLQJ RU
EXWVKDOOLQFOXGHFRQQHFWLRQVIURPEXLOGLQJVHUYLFH VWUXFWXUHWKDWLVRQHRUPRUHRIWKHIROORZLQJ
WRSURFHVVHTXLSPHQW 
™ 7KLV GHILQLWLRQ RXWOLQHV WKH W\SH RI EXLOGLQJ  /LVWHG RU SUHOLPLQDULO\ GHWHUPLQHG WR EH
V\VWHPVDQGGHYLFHVWKDWDUHFRQVLGHUHGWREH HOLJLEOHIRUOLVWLQJE\ 6DXGL&RPPLVVLRQIRU
FDWHJRUL]HG DV HTXLSPHQW RU IL[WXUHV ,W LV 7RXULVPDQG1DWLRQDO+HULWDJH6&7+RU
LPSRUWDQW WR QRWH WKDW ZKLOH WKH OLVW LV TXLWH  'HWHUPLQHG E\ DXWKRUL]HG ORFDO UHJLVWHU RI
H[WHQVLYH WKH GHILQLWLRQ GRHV QRW VSHFLILFDOO\ 6&7+ DV FRQWULEXWLQJ WR WKH KLVWRULFDO
H[FOXGH WKH WHUPV ³PDQXIDFWXULQJ´ VLJQLILFDQFHRIDUHJLVWHUHGKLVWRULFGLVWULFWRU
³SURGXFWLRQ´RU³SURFHVVHTXLSPHQW´ DGLVWULFWSUHOLPLQDULO\GHWHUPLQHGWRTXDOLI\
(;,67,1*%8,/',1*$EXLOGLQJHUHFWHGSULRU DVDQKLVWRULFGLVWULFWRU
WRWKHGDWHRIDGRSWLRQRIWKHDSSURSULDWHFRGHRU  'HVLJQDWHG DV KLVWRULF XQGHU WKH FRXQWU\
RQH IRU ZKLFK D OHJDO EXLOGLQJ SHUPLW KDV EHHQ KLVWRULFSUHVHUYDWLRQSURJUDPWKDWLVDSSURYHG
LVVXHG E\6&7+
™ 7KLVWHUPLVXVHGWRLGHQWLI\WKRVHVWUXFWXUHVRU ™ 7KLV GHILQLWLRQ VSHFLILHV WKH FULWHULD IRU
EXLOGLQJV WKDW ZHUH FRQVWUXFWHG EHIRUH WKH FRQVLGHUDWLRQDVDKLVWRULFEXLOGLQJ&KDSWHU
FXUUHQWHGLWLRQRIWKHFRGHZDVDGRSWHGE\WKH FRQWDLQVWKHSURYLVLRQVIRUEXLOGLQJVWKDWTXDOLI\
MXULVGLFWLRQ2IWHQHUHFWHGXQGHUWKHSURYLVLRQV DVKLVWRULFEXLOGLQJV
RI DQ HDUOLHU HGLWLRQ RI WKH FRGH WKH EXLOGLQJV /2$'%($5,1* (/(0(17 $Q\ FROXPQ
DUHH[HPSWIURPFRPSOLDQFHZLWKFXUUHQWFRGH
JLUGHUEHDPMRLVWWUXVVUDIWHUZDOOIORRURUURRI
SURYLVLRQV XQOHVV RWKHUZLVH VWDWHG RU D
KD]DUGRXV FRQGLWLRQ LV SUHVHQW RU ZKHQ VKHDWKLQJWKDWVXSSRUWVDQ\YHUWLFDOORDGLQDGGLWLRQ
DOWHUDWLRQV RU FKDQJHV LQ EXLOGLQJ KHLJKW DQG WRLWVRZQZHLJKWRUDQ\ODWHUDOORDG
DUHDVDUHPDGH ™ 7KLV WHUP UHODWHV WR DOO RI WKH ORDGEHDULQJ
)$&,/,7< $OO RU DQ\ SRUWLRQ RI EXLOGLQJV HOHPHQWVLQDVWUXFWXUH,WLVLPSRUWDQWWRLGHQWLI\
DOO VXFK ORDGEHDULQJ HOHPHQWV WR HQVXUH WKDW
VWUXFWXUHV VLWH LPSURYHPHQWV HOHPHQWV DQG
WKH\FDQFRQWLQXHWRDFFRPSOLVKWKHLUGHVLJQHG
SHGHVWULDQRUYHKLFXODUURXWHVORFDWHGRQDVLWH IXQFWLRQ RI EHLQJ DEOH WR WUDQVIHU DQ\ YHUWLFDO
™ 7KLVWHUPLVLQWHQWLRQDOO\EURDGDQGLQFOXGHVDOO ORDG DQ\ ODWHUDO ORDG DQG WKHLU RZQ ZHLJKW
SRUWLRQVZLWKLQDVLWHDQGDOODVSHFWVRIWKDWVLWH HIIHFWLYHO\WRWKHHDUWK
FRQWDLQLQJ IHDWXUHV UHTXLUHG WR EH DFFHVVLEOH
121&20%867,%/( 0$7(5,$/ $ PDWHULDO
7KLVLQFOXGHVSDUNLQJDUHDVH[WHULRUZDONZD\V
OHDGLQJ WR DFFHVVLEOH IHDWXUHV UHFUHDWLRQDO WKDWXQGHUWKHFRQGLWLRQVDQWLFLSDWHGZLOOQRWLJQLWH
IDFLOLWLHVVXFKDVSOD\JURXQGVDQGSLFQLFDUHDV RUEXUQZKHQVXEMHFWHGWRILUHRUKHDW0DWHULDOVWKDW
DQG DQ\ VWUXFWXUHV RQ WKH VLWH VHH DOVR WKH SDVV$670(DUHFRQVLGHUHGQRQFRPEXVWLEOH
FRPPHQWDU\ WR WKH GHILQLWLRQ RI ³6LWH´ LQ WKH PDWHULDOV
6%& ™ $ PDWHULDO WKDW ZLOO QRW LJQLWH RU EXUQ ZKHQ
)/22' +$=$5' $5($ 7KH JUHDWHU RI WKH VXEMHFWHG WR ILUH RU KHDW RU WKDW VXFFHVVIXOO\
IROORZLQJWZRDUHDV SDVVHVWKH$670(WHVWLVFRQVLGHUHGWREH
QRQFRPEXVWLEOH7KHWHVWGHWHUPLQHVZKHWKHUD
EXLOGLQJ PDWHULDO ZLOO DFW WR DLG FRPEXVWLRQ RU
 7KHDUHDZLWKLQDIORRGSODLQVXEMHFWWRD
DGGDSSUHFLDEOHKHDWWRDILUH$PDWHULDOPD\
SHUFHQWRUJUHDWHUFKDQFHRIIORRGLQJLQDQ\ KDYH D OLPLWHG DPRXQW RI FRPEXVWLEOH FRQWHQW
JLYHQ\HDU EXWQRWFRQWULEXWHDSSUHFLDEO\WRDILUHWKXVLW
PD\VWLOOTXDOLI\DVQRQFRPEXVWLEOH

6%&&& 

&+$37(5²'(),1,7,216

35,0$5<)81&7,21$SULPDU\IXQFWLRQLVD WKH SURSHUW\ WKDW DUH VLJQLILFDQW WR LWV KLVWRULF

PDMRU DFWLYLW\ IRU ZKLFK WKH IDFLOLW\ LV LQWHQGHG DUFKLWHFWXUDODQGFXOWXUDOYDOXHV
$UHDVWKDWFRQWDLQDSULPDU\IXQFWLRQLQFOXGHEXW 5(+$%,/,7$7,21 6(,60,& :RUN
DUHQRWOLPLWHGWRWKHFXVWRPHUVHUYLFHVOREE\RID FRQGXFWHG WR LPSURYH WKH VHLVPLF ODWHUDO IRUFH
EDQN WKH GLQLQJ DUHD RI D FDIHWHULD WKH PHHWLQJ UHVLVWDQFHRIDQH[LVWLQJEXLOGLQJ
URRPVLQDFRQIHUHQFHFHQWHUDVZHOODVRIILFHVDQG
RWKHUZRUNDUHDVLQZKLFKWKHDFWLYLWLHVRIWKHSXEOLF ™ 7KLVGHILQLWLRQUHODWHVVSHFLILFDOO\WRWKHHIIRUWV
DFFRPPRGDWLRQ RU RWKHU SULYDWH HQWLW\ XVLQJ WKH GHVLJQHG WR KHOS LPSURYH DQG SHUKDSV
UHHVWDEOLVKVHLVPLFODWHUDOIRUFHUHVLVWDQFHRID
IDFLOLW\ DUH FDUULHG RXW 0HFKDQLFDO URRPV ERLOHU SURSHUW\WRDQDSSURSULDWHOHYHO
URRPVVXSSO\VWRUDJHURRPVHPSOR\HHORXQJHVRU
ORFNHUURRPVMDQLWRULDOFORVHWVHQWUDQFHVFRUULGRUV 5(/2&$7$%/( %8,/',1* $ SDUWLDOO\ RU
DQG UHVWURRPV DUH QRW DUHDV FRQWDLQLQJ D SULPDU\ FRPSOHWHO\ DVVHPEOHG EXLOGLQJ FRQVWUXFWHG DQG
IXQFWLRQ GHVLJQHG WR EH UHXVHG PXOWLSOH WLPHV DQG
WUDQVSRUWHGWRGLIIHUHQWEXLOGLQJVLWHV
™ 3ULPDU\ IXQFWLRQ DUHDV FRQWDLQ WKH PDMRU
5(3$,57KHUHFRQVWUXFWLRQRUUHQHZDORIDQ\SDUW
DFWLYLWLHV IRU WKH EXLOGLQJ RU VSDFH
'HWHUPLQDWLRQ RI ZKDW FRQVWLWXWHV D SULPDU\ RI DQ H[LVWLQJ EXLOGLQJ IRU WKH SXUSRVH RI LWV
IXQFWLRQ VSDFH FDQ EH VRPHZKDW VXEMHFWLYH PDLQWHQDQFHRUWRFRUUHFWGDPDJH
7KHUH FDQ EH PXOWLSOH DUHDV FRQWDLQLQJ D ™ $VLQGLFDWHGLQ6HFWLRQWKHUHSDLURIDQ
SULPDU\ IXQFWLRQ LQ D VLQJOH EXLOGLQJ 3ULPDU\ LWHP W\SLFDOO\ GRHV QRW UHTXLUH D SHUPLW 7KLV
IXQFWLRQ DUHDV DUH QRW OLPLWHG WR SXEOLF XVH GHILQLWLRQPDNHVLWFOHDUUHSDLULVOLPLWHGWRZRUN
DUHDV)RUH[DPSOHERWKDEDQNOREE\DQGWKH RQWKHLWHPDQG GRHVQRW LQFOXGHFRPSOHWHRU
EDQN¶VHPSOR\HHDUHDVVXFKDVWKHWHOOHUDUHDV VXEVWDQWLDO UHSODFHPHQW RU RWKHU QHZ ZRUN
DQG ZDONLQ VDIH DUH SULPDU\ IXQFWLRQ DUHDV 1RWHWKDWWKHGHILQLWLRQGHDOVZLWKERWKUHSDLUDV
$UHDVWKDWDUHQRWSULPDU\IXQFWLRQVSDFHVDUH LW UHODWHV WR PDLQWHQDQFH DQG UHSDLUV DV WKH\
VXSSRUW DQG FLUFXODWLRQ VSDFHV 'HWHUPLQDWLRQ UHODWHWRIL[LQJGDPDJHLQIOLFWHGRQDEXLOGLQJIRU
RIWKHSULPDU\IXQFWLRQDUHDVIRUDEXLOGLQJZLOO YDULRXV UHDVRQV 0RUH VSHFLILFDOO\ WKH
DOVRGHWHUPLQHZKHQWKHURXWHWRWKDWDUHDDQG UHSODFHPHQWRIVWDLUVGXHWRGDLO\ZHDUDQGWHDU
DVVRFLDWHGWRLOHWURRPV DQGGULQNLQJ IRXQWDLQV LV UHODWHG WR WKH PDLQWHQDQFH RI D EXLOGLQJ
PXVW EH HYDOXDWHG IRU DFFHVVLELOLW\ ,I WKHVH ZKHUHDVDZDOOKLWE\DIRUNOLIWRUGDPDJHDVD
LWHPVDUHQRWDFFHVVLEOHDGGLWLRQDODOWHUQDWLYHV UHVXOW RI DQ HDUWKTXDNH ZRXOG EH FRQVLGHUHG
PD\ EH QHFHVVDU\ VHH FRPPHQWDU\ 6HFWLRQ GDPDJHDVLWUHODWHVWRWKHGHILQLWLRQ

5(522),1* 7KH SURFHVV RI UHFRYHULQJ RU
5(*,67(5(''(6,*1352)(66,21$/$Q UHSODFLQJ DQ H[LVWLQJ URRI FRYHULQJ 6HH ³5RRI
LQGLYLGXDOZKRLVUHJLVWHUHGRUOLFHQVHGWRSUDFWLFH UHFRYHU´DQG³5RRIUHSODFHPHQW´
WKHLUUHVSHFWLYHGHVLJQSURIHVVLRQDVGHILQHGE\WKH
VWDWXWRU\ UHTXLUHPHQWV RI WKH SURIHVVLRQDO ™ 7KLV WHUP UHIHUV WR WKH SURFHVV RI FRYHULQJ RU
UHJLVWUDWLRQODZVRIWKHFRXQWU\LQZKLFKWKHSURMHFW UHSODFLQJ DQ H[LVWLQJ URRI V\VWHP ZLWK D QHZ
URRILQJV\VWHPVHH6HFWLRQ
LVWREHFRQVWUXFWHG
™ $UHJLVWHUHGGHVLJQSURIHVVLRQDOLQUHVSRQVLEOH
522) 5(&29(5 7KH SURFHVV RI LQVWDOOLQJ DQ
FKDUJH LV D SHUVRQ W\SLFDOO\ LQ FKDUJH RI WKH DGGLWLRQDO URRI FRYHULQJ RYHU D SUHSDUHG H[LVWLQJ
UHYLHZ DQG FRRUGLQDWLRQ RI VXEPLWWDO URRI FRYHULQJ ZLWKRXW UHPRYLQJ WKH H[LVWLQJ URRI
GRFXPHQWV SUHSDUHG E\ RWKHUV GHIHUUHG FRYHULQJ
VXEPLWWDO GRFXPHQWV DQG SKDVHG VXEPLWWDO ™ 7KLVWHUPUHIHUVWRWKHSURFHVVRIFRYHULQJDQ
GRFXPHQWVIRUFRPSDWLELOLW\ZLWKWKHGHVLJQRI H[LVWLQJURRIV\VWHPZLWKDQHZURRILQJV\VWHP
WKH EXLOGLQJ RU VWUXFWXUH 5HIHU WR 6HFWLRQ
IRUVSHFLILF ODQJXDJHGHDOLQJZLWKWKLV 522)5(3$,55HFRQVWUXFWLRQRUUHQHZDORIDQ\
WHUP SDUW RI DQ H[LVWLQJ URRI IRU WKH SXUSRVHV RI LWV
5(+$%,/,7$7,21$Q\ZRUNDVGHVFULEHGE\ PDLQWHQDQFH
WKHFDWHJRULHVRIZRUNGHILQHGKHUHLQXQGHUWDNHQLQ ™ 5RRIVVKRXOGEHPDLQWDLQHGIRUWKHSXUSRVHRI
DQH[LVWLQJEXLOGLQJ SURWHFWLRQ ,I D VHFWLRQ LV GDPDJHG WKHQ LW
VKRXOGEHUHSDLUHGLPPHGLDWHO\
™ 7KLVSURFHVVRIUHWXUQLQJDSURSHUW\WRDVWDWH
RI XWLOLW\ WKURXJK UHSDLU RU DOWHUDWLRQ PDNHV LW 522) 5(3/$&(0(17 7KH SURFHVV RI
SRVVLEOHWRHIIHFWDSRVLWLYHFRQWHPSRUDU\XVH UHPRYLQJWKHH[LVWLQJURRIFRYHULQJUHSDLULQJDQ\
ZKLOHSUHVHUYLQJWKRVHSRUWLRQVDQGIHDWXUHVRI GDPDJHG VXEVWUDWH DQG LQVWDOOLQJ D QHZ URRI
FRYHULQJ

6%&&& 

&+$37(5²'(),1,7,216

™ 7KLVGHILQLWLRQUHIHUVWRWKHSURFHVVRIUHPRYLQJ IORRG KD]DUG DUHDV EHIRUH ORFDO MXULVGLFWLRQV

DQH[LVWLQJURRIV\VWHPDQGUHSODFLQJLWZLWKD DGRSWHG IORRG KD]DUG DUHD PDSV DQG
QHZURRILQJV\VWHP UHJXODWLRQV 6HFWLRQ  ,WHP  GLUHFWV WKH
DSSOLFDQWWRVWDWHWKHYDOXDWLRQRIWKHSURSRVHG
6(,60,& /2$',1* 7KH IRUFHV SUHVFULEHG ZRUN DV SDUW RI WKH LQIRUPDWLRQ VXEPLWWHG WR
KHUHLQ UHODWHG WR WKH UHVSRQVH RI WKH VWUXFWXUH WR REWDLQDSHUPLW7RPDNHDGHWHUPLQDWLRQDVWR
HDUWKTXDNHPRWLRQVWREHXVHGLQWKHDQDO\VLVDQG ZKHWKHU D SURSRVHG UHSDLU UHFRQVWUXFWLRQ
GHVLJQRIWKHVWUXFWXUHDQGLWVFRPSRQHQWV UHKDELOLWDWLRQ DGGLWLRQ RU LPSURYHPHQW
FRQVWLWXWHV VXEVWDQWLDO LPSURYHPHQW RU
™ 7KLVGHILQLWLRQUHIHUVWRWKHIRUFHVWREHXVHGLQ
GDPDJHWKHFRVWRIWKHSURSRVHGZRUNLVWREH
WKH VHLVPLF GHVLJQ RI VWUXFWXUHV 7KLV ZRXOG
FRPSDUHGWRWKHPDUNHWYDOXHRIWKHEXLOGLQJRU
DSSO\ WR ERWK VWUXFWXUDO DQG QRQVWUXFWXUDO
VWUXFWXUHEHIRUHWKHZRUNLVVWDUWHG,QRUGHUWR
FRPSRQHQWV
GHWHUPLQH PDUNHW YDOXH WKH EXLOGLQJ RIILFLDO
68%67$17,$/ '$0$*( )RU WKH SXUSRVH RI PD\ UHTXLUH WKH DSSOLFDQW WR SURYLGH VXFK
GHWHUPLQLQJ FRPSOLDQFH ZLWK WKH IORRGSURYLVLRQV LQIRUPDWLRQ DV DOORZHG XQGHU 6HFWLRQ 
RIWKLVFRGHGDPDJHRIDQ\RULJLQVXVWDLQHGE\D )RUDGGLWLRQDOJXLGDQFHUHIHUWR)(0$DQG
VWUXFWXUHZKHUHE\WKHFRVWRIUHVWRULQJWKHVWUXFWXUH )(0$
WR LWV EHIRUHGDPDJHG FRQGLWLRQ ZRXOG HTXDO RU 68%67$17,$/6758&785$/'$0$*( $
H[FHHG  SHUFHQW RI WKH PDUNHW YDOXH RI WKH FRQGLWLRQZKHUHRQHRUERWKRIWKHIROORZLQJDSSO\
VWUXFWXUHEHIRUHWKHGDPDJHRFFXUUHG 
™ 7KLVWHUPLVXVHGLQWKHGHILQLWLRQRI³6XEVWDQWLDO  ,Q DQ\ VWRU\ WKH YHUWLFDO HOHPHQWV RI WKH
LPSURYHPHQW´6XEVWDQWLDOGDPDJHLVDVSHFLDO ODWHUDO IRUFH UHVLVWLQJ V\VWHP KDYH VXIIHUHG
FDVHRIVXEVWDQWLDOLPSURYHPHQWDQGLIWKHFRVW GDPDJH VXFK WKDW WKH ODWHUDO ORDGFDUU\LQJ
RI UHVWRULQJ GDPDJH HTXDOV RU H[FHHGV  FDSDFLW\ RI WKH VWUXFWXUH LQ DQ\ KRUL]RQWDO
SHUFHQW RI WKH PDUNHW YDOXH RI WKH VWUXFWXUH GLUHFWLRQKDVEHHQ UHGXFHGE\PRUHWKDQ
WKHQ FRPSOLDQFH RI WKH H[LVWLQJ EXLOGLQJ LV SHUFHQWIURPLWVSUHGDPDJHFRQGLWLRQ
UHTXLUHG,WLVQRWDEOHWKDWDVXEVWDQWLDOGDPDJH  7KH FDSDFLW\ RI DQ\ YHUWLFDO JUDYLW\ ORDG
GHWHUPLQDWLRQLVWREHPDGHUHJDUGOHVVRIZKDW FDUU\LQJ FRPSRQHQW RU DQ\ JURXS RI VXFK
FDXVHVWKHGDPDJH%XLOGLQJVKDYHVXVWDLQHG
FRPSRQHQWV WKDW VXSSRUWV PRUH WKDQ 
VXEVWDQWLDO GDPDJH GXH WR IORRG ILUH ZLQG
HDUWKTXDNHGHWHULRUDWLRQDQGRWKHUFDXVHV SHUFHQW RI WKH WRWDO DUHD RI WKH VWUXFWXUH¶V
IORRUV DQG URRIV KDV EHHQ UHGXFHG PRUH
68%67$17,$/ ,03529(0(17 )RU WKH WKDQSHUFHQWIURPLWVSUHGDPDJHFRQGLWLRQ
SXUSRVHRIGHWHUPLQLQJFRPSOLDQFHZLWKWKHIORRG DQG WKH UHPDLQLQJ FDSDFLW\ RI VXFK DIIHFWHG
SURYLVLRQV RI WKLV FRGH DQ\ UHSDLU DOWHUDWLRQ HOHPHQWV ZLWK UHVSHFW WR DOO GHDG DQG OLYH
DGGLWLRQRULPSURYHPHQWRIDEXLOGLQJRUVWUXFWXUH ORDGVLVOHVVWKDQSHUFHQWRIWKDWUHTXLUHG
WKHFRVWRIZKLFKHTXDOVRUH[FHHGVSHUFHQWRI E\ WKLV FRGH IRU QHZ EXLOGLQJV RI VLPLODU
WKH PDUNHW YDOXH RI WKH VWUXFWXUH EHIRUH WKH VWUXFWXUHSXUSRVHDQGORFDWLRQ
LPSURYHPHQWRUUHSDLULVVWDUWHG,IWKHVWUXFWXUHKDV
™ 7KLVGHILQLWLRQJLYHVWKHVSHFLILFSDUDPHWHUVIRU
VXVWDLQHG VXEVWDQWLDO GDPDJH DQ\ UHSDLUV DUH
HYDOXDWLQJ ZKHQ D EXLOGLQJ KDV VXVWDLQHG
FRQVLGHUHG VXEVWDQWLDO LPSURYHPHQW UHJDUGOHVV RI VXEVWDQWLDO VWUXFWXUDO GDPDJH 7KHUH DUH WZR
WKH DFWXDO UHSDLU ZRUN SHUIRUPHG 7KH WHUP GRHV VHSDUDWH FULWHULD SURYLGHG LQ WKH GHILQLWLRQ
QRWKRZHYHULQFOXGHHLWKHU HLWKHU RQH RI ZKLFK ZLOO TXDOLI\ D VWUXFWXUH DV
EHLQJVXEVWDQWLDOO\GDPDJHG
 $Q\ SURMHFW IRU LPSURYHPHQW RI D EXLOGLQJ
UHTXLUHGWRFRUUHFWH[LVWLQJKHDOWKVDQLWDU\RU 7(&+1,&$//<,1)($6,%/($QDOWHUDWLRQRI
VDIHW\ FRGH YLRODWLRQV LGHQWLILHG E\ WKH DEXLOGLQJRUDIDFLOLW\WKDWKDVOLWWOHOLNHOLKRRGRI
EXLOGLQJ RIILFLDO DQG WKDW LV WKH PLQLPXP EHLQJDFFRPSOLVKHGEHFDXVHWKHH[LVWLQJVWUXFWXUDO
QHFHVVDU\WRHQVXUHVDIHOLYLQJFRQGLWLRQVRU FRQGLWLRQV UHTXLUH WKH UHPRYDO RU DOWHUDWLRQ RI D
 $Q\DOWHUDWLRQRIDKLVWRULFVWUXFWXUHSURYLGHG ORDGEHDULQJPHPEHUWKDWLVDQHVVHQWLDOSDUWRIWKH
WKDW WKH DOWHUDWLRQ ZLOO QRW SUHFOXGH WKH VWUXFWXUDOIUDPHRUEHFDXVHRWKHUH[LVWLQJSK\VLFDO
VWUXFWXUH¶VFRQWLQXHGGHVLJQDWLRQDVDKLVWRULF RUVLWHFRQVWUDLQWVSURKLELWPRGLILFDWLRQRUDGGLWLRQ
VWUXFWXUH RIHOHPHQWVVSDFHVRUIHDWXUHVZKLFKDUHLQIXOODQG
VWULFW FRPSOLDQFH ZLWKWKHPLQLPXP UHTXLUHPHQWV
™ 2QHRIWKHORQJUDQJHREMHFWLYHVRIWKH1DWLRQDO IRU QHZ FRQVWUXFWLRQ DQG ZKLFK DUH QHFHVVDU\ WR
)ORRG,QVXUDQFH3URJUDP1),3RUHTXLYDOHQW SURYLGHDFFHVVLELOLW\
SURJUDP LQ 6DXGL $UDELD LV WR UHGXFH WKH
H[SRVXUH RI ROGHU EXLOGLQJV WKDW ZHUH EXLOW LQ

6%&&& 

&+$37(5²'(),1,7,216

™ 7KLVWHUPLVGHILQHGLQRUGHUWRSURYLGHDEDVLV :25. $5($ 7KDW SRUWLRQ RU SRUWLRQV RI D

IRUWKHDSSOLFDWLRQRIDFFHVVLELOLW\SURYLVLRQVWR EXLOGLQJ FRQVLVWLQJ RI DOO UHFRQILJXUHG VSDFHV DV
H[LVWLQJEXLOGLQJV%ULQJLQJDQ\DOWHUHGH[LVWLQJ LQGLFDWHGRQWKHFRQVWUXFWLRQGRFXPHQWV:RUNDUHD
VLWH RU EXLOGLQJ LQWR IXOO FRPSOLDQFH ZLWK DOO H[FOXGHV RWKHU SRUWLRQV RI WKH EXLOGLQJ ZKHUH
DFFHVVLELOLW\ UHTXLUHPHQWV DSSOLFDEOH WR QHZ
LQFLGHQWDOZRUNHQWDLOHGE\WKHLQWHQGHGZRUNPXVW
FRQVWUXFWLRQ PD\ UHTXLUH H[WUDRUGLQDU\ HIIRUW
EHFDXVH RI H[LVWLQJ SK\VLFDO FKDUDFWHULVWLFV EH SHUIRUPHG DQG SRUWLRQV RI WKH EXLOGLQJ ZKHUH
7KH FRGH XWLOL]HV WKH FRQFHSW RI WHFKQLFDO ZRUN QRW LQLWLDOO\ LQWHQGHG E\ WKH RZQHU LV
LQIHDVLELOLW\ WR SURYLGH D EDVLV IRU H[FHSWLRQV VSHFLILFDOO\UHTXLUHGE\WKLVFRGH
IURP VWULFW FRPSOLDQFH ZLWK WKH SURYLVLRQV IRU ™ 7KLVVHFWLRQVSHFLILFDOO\GHILQHVWKHDUHDRIDOO
QHZFRQVWUXFWLRQLQDQH[LVWLQJEXLOGLQJ UHFRQILJXUHGVSDFHVZKHUHZRUNLVH[SHFWHGWR
816$)(%XLOGLQJVVWUXFWXUHVRUHTXLSPHQWWKDW RFFXUZLWKLQWKHVFRSHRIDSURMHFW7KHVHDUHDV
DUH XQVDQLWDU\ RU WKDW DUH GHILFLHQW GXH WR DUH WR EH VKRZQ FOHDUO\ RQ WKH FRQVWUXFWLRQ
GRFXPHQWV ³,QFLGHQWDO´ ZRUN DUHDV DUH QRW
LQDGHTXDWH PHDQV RI HJUHVV IDFLOLWLHV LQDGHTXDWH
UHTXLUHGWREHVKRZQDVZRUNDUHDV1RWHWKDW
OLJKWDQGYHQWLODWLRQRUWKDWFRQVWLWXWHDILUHKD]DUG FDUHQHHGVWREHWDNHQLQGHVLJQDWLQJWKHZRUN
RU LQ ZKLFK WKH VWUXFWXUH RU LQGLYLGXDO VWUXFWXUDO DUHD )RU LQVWDQFH ZKHQ D YROXQWDU\ VHLVPLF
PHPEHUV PHHW WKH GHILQLWLRQ RI ³'DQJHURXV´ RU XSJUDGH /HYHO  DOWHUDWLRQ LV EHLQJ PDGH
WKDW DUH RWKHUZLVH GDQJHURXV WR KXPDQ OLIH RU WKH WKURXJKRXWDEXLOGLQJLWZRXOGEHUHDVRQDEOHWR
SXEOLFZHOIDUHRUWKDWLQYROYHLOOHJDORULPSURSHU VLPSO\GHVLJQDWHRQO\WKHDFWXDODUHDRIVHLVPLF
RFFXSDQF\ RU LQDGHTXDWH PDLQWHQDQFH VKDOO EH XSJUDGH WR DYRLG SODFLQJ WKH DOWHUDWLRQ LQ D
GHHPHG XQVDIH $ YDFDQW VWUXFWXUH WKDW LV QRW /HYHO  LQDSSURSULDWHO\ 6LQFH WKH ZRUN LV
VHFXUHGDJDLQVWHQWU\VKDOOEHGHHPHGXQVDIH YROXQWDU\ LW VHHPV LQDSSURSULDWH IRU VXFK DQ
XSJUDGH WR WULJJHU /HYHO  DOWHUDWLRQ
™ 7KHWHUP³XQVDIH´LVGHILQHGLQRUGHUWRSURYLGH UHTXLUHPHQWV VXFK DV WKRVH IRU DXWRPDWLF
D EDVLV IRU WKH EXLOGLQJ RIILFLDO WR FDXVH D VSULQNOHU V\VWHPV ,Q WKLV H[DPSOH RQO\ WKH
FRQGLWLRQ WKDW LV KD]DUGRXV WR WKH KHDOWK DQG DFWXDO IORRU DUHD RFFXSLHG E\ WKH FROXPQV
ZHOIDUHRILQGLYLGXDOVWREHFRUUHFWHGHLWKHUE\ EHDPV ZDOOV HWF WKDW DUH EHLQJ PRGLILHG E\
UHSDLU RU GHPROLWLRQ VHH 6HFWLRQ  6RPH WKH VHLVPLF XSJUDGH ZRXOG EH LQFOXGHG LQ WKH
XQVDIHEXLOGLQJVPD\EHWKHUHVXOWRIXQVDIHRU ³ZRUNDUHD´,WZRXOGEHLQDSSURSULDWHWRLQFOXGH
LOOHJDO RFFXSDQFLHV )RU H[DPSOH SULPD IDFLH WKHIORRUDUHDRIDQHQWLUHURRPVLPSO\EHFDXVH
HYLGHQFH RI DQ XQVDIH VWUXFWXUH LV DQ D ZDOO RU RWKHU VWUXFWXUDO HOHPHQW ZLWKLQ WKDW
XQVHFXUHG RSHQ GRRUV RU ZLQGRZV YDFDQW URRP ZDV EHLQJ DOWHUHG 7KH NH\ LV WKDW WKH
VWUXFWXUH %HFDXVH RI WKH DWWUDFWLYH QXLVDQFH GHILQLWLRQ VWDWHV WKDW WKH ZRUN DUHD FRQVLVW RI
WKH\ UHSUHVHQW DOO XQVDIH EXLOGLQJV PXVW EH ³UHFRQILJXUHG VSDFHV´ ,QVWDOOLQJ VSULQNOHUV RU
HLWKHUGHPROLVKHGRUPDGHVDIHDQGVHFXUHDV XSJUDGLQJ D VWUXFWXUDO HOHPHQW W\SLFDOO\ GRHV
GHHPHGDSSURSULDWHE\WKHEXLOGLQJRIILFLDO QRWUHFRQILJXUHDVSDFH


6%&&& 

&+$37(5²'(),1,7,216

























7KLVSDJHOHIWLQWHQWLRQDOO\EODQN

6%&&& 

 &+$37(5²3529,6,216)25$//&203/,$1&(0(7+2'6

²3529,6,216)25$//&203/,$1&(
0(7+2'6

SURYLVLRQV DUH DSSOLHG 7KH YDULRXV W\SHV DQG

™ *(1(5$/&200(176
OHYHOVRIZRUNLQFOXGHWKHIROORZLQJ
™ 7KLV FKDSWHU FRQWDLQV WKH SURYLVLRQV WKDW
H[SODLQKRZWKHFRGHLVLQWHQGHGWREHDSSOLHG x 5HSDLUV&KDSWHU
,Q DGGLWLRQ WKLV FKDSWHU SURYLGHV WKH
x $OWHUDWLRQ/HYHO&KDSWHU
SURFHGXUHV IRU VHLVPLF GHVLJQ DQG HYDOXDWLRQ
WKDW DSSO\ WKURXJKRXW WKH FRGH 7KHVH x $OWHUDWLRQ/HYHO&KDSWHU
SURYLVLRQVZHUHRULJLQDOO\ORFDWHGLQ&KDSWHU x $OWHUDWLRQ/HYHO&KDSWHU
EXW GXH WR WKH WHFKQLFDO QDWXUH RI WKH VHLVPLF
SURYLVLRQV DQG WKH IDFW WKDW DGPLQLVWUDWLRQ x &KDQJHRIRFFXSDQF\&KDSWHU
SURYLVLRQV DUH RIWHQ KHDYLO\ DPHQGHG D x $GGLWLRQV&KDSWHU
VWDQGDORQHFKDSWHUZDVQHFHVVDU\)LQDOO\WKLV
x +LVWRULFEXLOGLQJV&KDSWHU
FKDSWHU SURYLGHV VRPH JHQHUDO VHFWLRQV
UHJDUGLQJ WKH DSSOLFDELOLW\ RI RWKHU FRGHV x 5HORFDWHGRUPRYHGEXLOGLQJV&KDSWHU
EXLOGLQJPDWHULDOVDQGRFFXSDQF\FODVVLILFDWLRQ ™ 7KH ILQDO PHWKRG SURYLGHG LQ WKLV FRGH LV WKH
™ ,Q WHUPV RI WKH DSSOLFDWLRQ RI WKH FRGH WKLV SHUIRUPDQFH FRPSOLDQFH PHWKRG IRXQG LQ
FKDSWHUH[SODLQVWKHWKUHHPDLQFRPSRQHQWVRI &KDSWHU  &KDSWHU  XWLOL]HV D VFRULQJ
WKHFRGHZKLFKLQFOXGHWKHIROORZLQJ PHWKRGWRGHWHUPLQHWKHRYHUDOOVDIHW\OHYHORI
x 3UHVFULSWLYHPHWKRG D EXLOGLQJ 7KH PDLQ IRFXV LV RQ ILUH DQG OLIH
VDIHW\ SURYLVLRQV EXW EDVH VWUXFWXUDO DQG
x :RUNDUHDPHWKRG DFFHVVLELOLW\UHTXLUHPHQWVDUHDOVRDGGUHVVHG
x 3HUIRUPDQFHPHWKRG 6SHFLILFDOO\ 6HFWLRQ  DGGUHVVHV
DFFHVVLELOLW\ DQG 6HFWLRQ  DGGUHVVHV
™ ,WLVLQWHQGHGWKDWRQHPHWKRGRIFRPSOLDQFHLV
VWUXFWXUDO UHTXLUHPHQWV 7KH DFFHVVLELOLW\
FKRVHQDQGDSSOLHGLQZKROH7KHILUVWRIWKHVH
SURYLVLRQV VLPSO\ UHIHU WR WKH SUHVFULSWLYH
PHWKRGV LV WKH SUHVFULSWLYH PHWKRG ZKLFK LV
PHWKRG RU ZRUN DUHD PHWKRG 7KH VWUXFWXUDO
FRYHUHG LQ &KDSWHU  7KLV FKDSWHU ZDV
SURYLVLRQVDUHPRUHEDVLFWKDQWKHSUHVFULSWLYH
RULJLQDOO\ H[FHUSWHG IURP D SRUWLRQ RI &KDSWHU
PHWKRG DQG ZRUN DUHD PHWKRG ,W LV XQFOHDU
 RI WKH 6%&  &KDSWHU  KDV EHHQ
ZKHWKHU WKLV ZDV LQWHQWLRQDOO\ GLIIHUHQW 7KH
GHOHWHGIURPWKH6%&DQG6HFWLRQ
SUHVFULSWLYH DQG ZRUN DUHD PHWKRGV DUH PRUH
RIWKDWFRGHUHIHUVXVHUVWRWKH 6DXGL([LVWLQJ
FRPSUHKHQVLYH DQG FRQVLVWHQW ZLWK RQH
%XLOGLQJ &RGH 6%&  IRU H[LVWLQJ EXLOGLQJ
DQRWKHULQWHUPVRIWKHVWUXFWXUDOUHTXLUHPHQWV
LVVXHV &KDSWHU  DGGUHVVHV DGGLWLRQV
7KH REMHFWLYH RI WKLV VHFWLRQ LV WR SURYLGH DQ
DOWHUDWLRQV UHSDLUV FKDQJH RI RFFXSDQF\ DQG
DOWHUQDWLYH FRPSOLDQFH RSWLRQ WKDW HQDEOHV
DFFHVVLELOLW\ LQ H[LVWLQJ EXLOGLQJV 7KH
LPSURYHPHQWV WR EH PDGH WKDW ZLOO UDLVH WKH
UHTXLUHPHQWV DUH IDLUO\ JHQHUDO ZLWK D VWURQJ
VFRUH WR D PLQLPXP OHYHO ZLWKRXW VWULFW
HPSKDVLV RQ VWUXFWXUDO HYDOXDWLRQ DQG
FRPSOLDQFHZLWKWKHSURYLVLRQVRIWKH6%&
UHTXLUHPHQWV IRU DGGLWLRQV UHSDLUV DQG
™ &KDSWHU  DOVR SURYLGHV RSWLRQV UHODWHG WR
DOWHUDWLRQV 6HFWLRQ  ZKLFK DGGUHVVHV
VHLVPLF HYDOXDWLRQ DQG GHVLJQ ZKLFK DUH
DFFHVVLELOLW\SURYLGHVDEDVHOLQHRIDFFHVVLEOH
LQWHQGHGWRSURYLGHIOH[LELOLW\ZKHQDGGUHVVLQJ
LPSURYHPHQW EDVHG RQ WKH W\SH RI ZRUN
VHLVPLF GHVLJQ 7KHVH HYDOXDWLRQ WRROV ZRUN
RFFXUULQJLQDEXLOGLQJ
ZLWK ERWK WKH SUHVFULSWLYH DQG ZRUN DUHD
™ 7KH VHFRQG FRUH PHWKRG LQWURGXFHG E\ WKH
PHWKRGV 7KH SURYLVLRQV KHOS WR GHWHUPLQH
FRGH LV WKH ZRUN DUHD PHWKRG ZKLFK LV
ZKLFK SURFHGXUHV DQG PHWKRGV DUH WR EH
DGGUHVVHG LQ &KDSWHUV  WKURXJK  7KLV
DSSOLHG ZKHQ DGGUHVVLQJ VHLVPLF GHVLJQ LQ
FRQFHSWZDVLQWHQGHGWRSURYLGHPRUHIOH[LELOLW\
H[LVWLQJ EXLOGLQJV ,Q VRPH FDVHV WKH FRGH
WR HQFRXUDJH WKH UHXVH DQG FRQWLQXHG XVH RI
UHTXLUHV FRPSOLDQFH ZLWK WKH VHLVPLF GHVLJQ
H[LVWLQJ EXLOGLQJV 0RUH VSHFLILFDOO\ WKH
SURYLVLRQVRIWKH6%&6HFWLRQ
SURYLVLRQV DOORZ GLIIHUHQW OHYHOV RI FRPSOLDQFH
ZKLOHLQRWKHUVHFWLRQVUHGXFHGVHLVPLFGHVLJQ
EDVHGRQWKHOHYHORIZRUNRFFXUULQJ&KDSWHU
SURYLVLRQVDUHSHUPLWWHG6HFWLRQ,Q
ILUVW FODVVLILHV WKH W\SH DQG OHYHO RI ZRUN DQG
ERWKVHFWLRQVVSHFLILFVDUHSURYLGHGUHJDUGLQJ
WKHQ EDVHG RQ WKDW FODVVLILFDWLRQ VSHFLILF

6%&&& 

&+$37(5²3529,6,216)25$//&203/,$1&(0(7+2'6

DSSOLFDEOH SURFHGXUHV DQG PHWKRGV 0RUH VSHFLILFDOO\FRGHVVXFKDVWKH 6%&KDYH

GHWDLOHG GLVFXVVLRQ DERXW WKHVH PHWKRGV LV UHTXLUHPHQWVIRUH[LVWLQJLQVWDOODWLRQVDQGKRZ
SURYLGHG LQ WKH FRPPHQWDU\ WR 6HFWLRQV DOWHUDWLRQV RU DGGLWLRQV DUH DGGUHVVHG 2WKHU
DQG,QODUJHSDUW LPSRUWDQW H[DPSOHV DUH WKH UHWURDFWLYH
WKHVH SURYLVLRQV DUH LQWHQGHG WR IDFLOLWDWH DQ SURYLVLRQVRI&KDSWHURIWKH6%&7KRVH
RYHUDOO LQFUHDVH LQ VHLVPLF SHUIRUPDQFH LQ SURYLVLRQVDUHDSSOLFDEOHDWDOOWLPHVUHJDUGOHVV
H[LVWLQJ EXLOGLQJV 7\SLFDOO\ EXLOGLQJV ZLWK RI ZKHWKHU D UHSDLU RU DOWHUDWLRQ LV EHLQJ
KLJKHURFFXSDQWORDGVDQGWKRVHZLWKLQFUHDVHG XQGHUWDNHQ 7KHVH SURYLVLRQV UHPDLQ
LPSRUWDQFH GXH WR WKHLU LPSRUWDQFH WR WKH DSSOLFDEOH ZKHQ DSSO\LQJ WKLV FRGH
FRPPXQLW\ ZLOO KDYH PRUH UHVWULFWLYH $GGLWLRQDOO\ WKLV VHFWLRQ VWDWHV WKDW ZKHUH D
UHTXLUHPHQWV FRQIOLFWRFFXUVWKLVFRGHWDNHVSUHFHGHQFH
™ 6HFWLRQ  DGGUHVVHV JHQHUDOO\ DSSOLFDEOH ™ 3XUSRVH
SURYLVLRQV IRU WKH RYHUDOO FRGH 6HFWLRQ  ™ 7KHSXUSRVHVRIWKLVFKDSWHUDUHWRGHILQHWKH
H[SODLQV WKH DSSOLFDELOLW\ RI WKLV VHFWLRQ WR DOO WKUHH FRPSOLDQFH RSWLRQV WKDW DUH DYDLODEOH WR
DVSHFWV RI WKH FRGH 6HFWLRQ  QRWHV WKDW WKHXVHUVRIWKHFRGHOD\RXWWKHPHWKRGVWREH
DSSOLFDEOH UHTXLUHPHQWV IRU H[LVWLQJ VLWXDWLRQV XVHG IRU VHLVPLF GHVLJQ DQG HYDOXDWLRQ
DUHDGGUHVVHGLQYDULRXV6DXGL%XLOGLQJ&RGHV WKURXJKRXW WKH FRGH DQG SURYLGH JHQHUDOO\
DQGWKH1DWLRQDO(OHFWULFDO&RGH1)3$DQG DSSOLFDEOH PLQLPXP UHTXLUHPHQWV IRU DOO WKUHH
LWV HTXLYDOHQW LH WKH 6%&  0RUH PHWKRGV
LV UHTXLUHG E\ WKH VWUXFWXUDO SURYLVLRQV LQ WKH
SUHVFULSWLYH DQG ZRUN DUHD PHWKRGV 7KHUH LV
6(&7,21$'0,1,675$7,21 RQHDOWHUQDWLYHWRXVLQJWKHVHWKUHHFRPSOLDQFH
 *HQHUDO7KHUHSDLUDOWHUDWLRQFKDQJHRI PHWKRGV WKDW DOORZV IRU FRPSOLDQFH ZLWK WKH
ODZVLQH[LVWHQFHDWWKHWLPHWKHVWUXFWXUHZDV
RFFXSDQF\ DGGLWLRQ RU UHORFDWLRQ RI DOO H[LVWLQJ
RULJLQDOO\ EXLOW XQOHVV WKH EXLOGLQJ KDV
EXLOGLQJV VKDOO FRPSO\ ZLWK RQH RI WKH PHWKRGV VXVWDLQHG VXEVWDQWLDO VWUXFWXUDO GDPDJH RU LV
OLVWHG LQ 6HFWLRQV  WKURXJK  DV XQGHUJRLQJ PRUH WKDQ D OLPLWHG VWUXFWXUDO
VHOHFWHGE\WKHDSSOLFDQW6HFWLRQVWKURXJK DOWHUDWLRQ 5HSDLUV DQG DOWHUDWLRQV LQ IORRG
 VKDOO QRW EH DSSOLHG LQ FRPELQDWLRQ ZLWK KD]DUG DUHDV KDYH DGGLWLRQDO UHTXLUHPHQWV WR
HDFKRWKHU:KHUHWKLVFRGHUHTXLUHVFRQVLGHUDWLRQ WKHODZVLQH[LVWHQFHDWWKHWLPHWKHVWUXFWXUH
RIWKHVHLVPLFIRUFHUHVLVWLQJV\VWHPRIDQH[LVWLQJ ZDVRULJLQDOO\EXLOW
EXLOGLQJ VXEMHFW WR UHSDLU DOWHUDWLRQ FKDQJH RI 3UHVFULSWLYH FRPSOLDQFH PHWKRG
RFFXSDQF\ DGGLWLRQ RU UHORFDWLRQ RI H[LVWLQJ 5HSDLUV DOWHUDWLRQV DGGLWLRQV DQG FKDQJHV RI
EXLOGLQJVWKH VHLVPLFHYDOXDWLRQDQG GHVLJQVKDOO RFFXSDQF\FRPSO\LQJZLWK&KDSWHURIWKLVFRGH
EH EDVHG RQ 6HFWLRQ  UHJDUGOHVV RI ZKLFK LQEXLOGLQJVFRPSO\LQJZLWKWKH6%&VKDOOEH
FRPSOLDQFHPHWKRGLVXVHG FRQVLGHUHGLQFRPSOLDQFHZLWKWKHSURYLVLRQVRIWKLV
([FHSWLRQ6XEMHFWWRWKHDSSURYDORIWKHEXLOGLQJ FRGH
RIILFLDO DOWHUDWLRQV FRPSO\LQJ ZLWK WKH ODZV LQ ™ 7KLV VHFWLRQ DOORZV FRPSOLDQFH LQ DFFRUGDQFH
H[LVWHQFH DW WKH WLPH WKH EXLOGLQJ RU WKH DIIHFWHG ZLWK &KDSWHU  RI WKH FRGH 7KHVH SURYLVLRQV
SRUWLRQRIWKHEXLOGLQJZDVEXLOWVKDOOEHFRQVLGHUHG DUH LQWHQGHG WR SUHVFULEH VSHFLILF PLQLPXP
LQ FRPSOLDQFH ZLWK WKH SURYLVLRQV RI WKLV FRGH UHTXLUHPHQWVIRUFRQVWUXFWLRQUHODWHGWRH[LVWLQJ
XQOHVV WKH EXLOGLQJ LV XQGHUJRLQJ PRUH WKDQ D EXLOGLQJV LQFOXGLQJ DGGLWLRQV DOWHUDWLRQV
OLPLWHG VWUXFWXUDO DOWHUDWLRQ DV GHILQHG LQ 6HFWLRQ UHSDLUV ILUH HVFDSHV JODVV UHSODFHPHQW
1HZVWUXFWXUDOPHPEHUVDGGHGDVSDUWRI FKDQJHRIRFFXSDQF\KLVWRULFEXLOGLQJVPRYHG
WKH DOWHUDWLRQ VKDOO FRPSO\ ZLWK WKH 6%&  VWUXFWXUHVDQGDFFHVVLELOLW\
$OWHUDWLRQV RI H[LVWLQJ EXLOGLQJV LQ IORRG KD]DUG :RUNDUHDFRPSOLDQFHPHWKRG5HSDLUV
DUHDVVKDOOFRPSO\ZLWK6HFWLRQ DOWHUDWLRQV DGGLWLRQV FKDQJHV LQ RFFXSDQF\ DQG
™ 7KLVVHFWLRQH[SODLQVWKHRSWLRQVDYDLODEOHWRD UHORFDWHGEXLOGLQJVFRPSO\LQJZLWKWKHDSSOLFDEOH
GHVLJQHU RU RZQHU ZKHQ GHDOLQJ ZLWK UHTXLUHPHQWVRI&KDSWHUVWKURXJKRIWKLVFRGH
FRQVWUXFWLRQ UHODWHG WR H[LVWLQJ EXLOGLQJV VKDOO EH FRQVLGHUHG LQ FRPSOLDQFH ZLWK WKH
SUHVFULSWLYH FRPSOLDQFH PHWKRG 6HFWLRQ SURYLVLRQVRIWKLVFRGH
 ZRUN DUHD FRPSOLDQFH PHWKRG
™ 7KLV VHFWLRQ DOORZV FRPSOLDQFH LQ DFFRUGDQFH
6HFWLRQDQGSHUIRUPDQFHFRPSOLDQFH
ZLWK&KDSWHUVWKURXJKRIWKHFRGH7KHVH
PHWKRG 6HFWLRQ  7KLV VHFWLRQ DOVR
FKDSWHUV FRQWDLQ SURYLVLRQV EDVHG RQ D
SURYLGHVSURFHGXUHVIRUHYDOXDWLRQDQGGHVLJQ
SURSRUWLRQDO DSSURDFK WR FRPSOLDQFH ZKHUH
RI VHLVPLF IRUFHUHVLVWLQJ V\VWHPV RI H[LVWLQJ
XSJUDGHVDUHWULJJHUHGE\WKHW\SHDQGH[WHQW
EXLOGLQJVZKHUHFRQVLGHUDWLRQRIVHLVPLFIRUFHV
RIWKHZRUN

6%&&& 

&+$37(5²3529,6,216)25$//&203/,$1&(0(7+2'6

3HUIRUPDQFH FRPSOLDQFH PHWKRG  'HVLJQ IRUWKHHIIHFWRI0&(5 &RQVLGHULQJ

5HSDLUV DOWHUDWLRQV DGGLWLRQV FKDQJHV LQ WKH PDUJLQ RI VDIHW\ LQKHUHQW LQ VHLVPLF
RFFXSDQF\DQGUHORFDWHGEXLOGLQJVFRPSO\LQJZLWK GHVLJQ SUDFWLFH WKLV DFKLHYHV FROODSVH
&KDSWHU  RI WKLV FRGH VKDOO EH FRQVLGHUHG LQ SUHYHQWLRQ XQGHU 0&(5 OHYHO JURXQG
PRWLRQV,WLVDOVRLQWHQGHGWKDWGDPDJHIURP
FRPSOLDQFHZLWKWKHSURYLVLRQVRIWKLVFRGH
WKH ³GHVLJQ HDUWK TXDNH´ JURXQG PRWLRQ
™ 7KLV VHFWLRQ DOORZV FRPSOLDQFH LQ DFFRUGDQFH ZRXOG EH UHSDLUDEOH )RU HVVHQWLDO IDFLOLWLHV
ZLWK &KDSWHU  RI WKH FRGH 7KLV FKDSWHU 5LVN&DWHJRU\,9LWLVLQWHQGHGWKDWGDPDJH
SURYLGHV D VFRULQJ PHWKRG IRU HYDOXDWLQJ D IURPWKH³GHVLJQHDUWKTXDNH´JURXQGPRWLRQ
EXLOGLQJEDVHGRQILUHVDIHW\PHDQVRIHJUHVV EH UHODWLYHO\ PLQRU DQG DOORZ FRQWLQXHG
DQGJHQHUDOVDIHW\ RFFXSDQF\ DQG IXQFWLRQ RI WKH IDFLOLW\ )RU
KLJKHUJURXQGPRWLRQVWKHLQWHQWLVWKDWWKHUH
6HLVPLF HYDOXDWLRQ DQG GHVLJQ EHDORZSUREDELOLW\RIVWUXFWXUDOFROODSVH
SURFHGXUHV  7KH VHLVPLF HYDOXDWLRQ DQG GHVLJQ
VKDOO EH EDVHG RQ WKH SURFHGXUHV VSHFLILHG LQ WKH  5LVN FDWHJRU\ DQG LPSRUWDQFH IDFWRUV 7KH
6%&RU$6&(7KHSURFHGXUHVFRQWDLQHGLQ 6%&DVVLJQVEXLOGLQJVWRRQHRIWKHIRXU
ULVN FDWHJRULHV VXPPDUL]HG LQ &RPPHQWDU\
$SSHQGL[ $ RI WKLV FRGH VKDOO EH SHUPLWWHG WR EH
)LJXUH  7KH LQWHQW LV WR SURYLGH
XVHGDVVSHFLILHGLQ6HFWLRQ LQFUHDVLQJO\ KLJKHU SHUIRUPDQFH DV WKH ULVN
™ 7KLV VHFWLRQ OLVWV WKH GRFXPHQWV WKDW FRQWDLQ FDWHJRU\LQFUHDVHVIURP,WKURXJK,97KLVLV
WKH SUR YLVLRQV WR EH XVHG IRU WKH VHLVPLF DFKLHYHG LQ SDUW E\ DSSO\LQJ DQ LPSRUWDQFH
HYDOXDWLRQRIDQH[LVWLQJEXLOGLQJDVZHOODVWKH IDFWRU LQ GHWHUPLQLQJ WKH GHVLJQ ORDG 7KH
GHVLJQRIDQ\QHHGHGUHSDLUV6LQFHWKHVFRSH LPSRUWDQFH IDFWRU VSHFLILHG LQ WKH ORDG
RI WKHVH GRFXPHQWV YDULHV FRQVLGHUDEO\ EULHI SURYLVLRQV RI 6%&  GLUHFWO\ LPSDFWV WKH
GHVFULSWLRQVDUHJLYHQEHORZ FDOFXODWLRQ RI VHLVPLF DV ZHOO DV ZLQG DQG
™ 6%& VQRZ ORDGV 7KH PDJQLWXGH RI WKH GHVLJQ
™ 7KH 6%&  LV D FRPSUHKHQVLYH PRGHO ORDG YDULHV LQ SURSRUWLRQ WR WKH LPSRUWDQFH
EXLOGLQJ FRGH ZLWK VHLVPLF SURYLVLRQV WKDW DUH IDFWRU DQG D KLJKHU YDOXH LV DVVLJQHG WR
EDVHGIRUWKHPRVWSDUWRQ6%&DVZHOODV EXLOGLQJVZLWKDQRFFXSDQF\WKDWZDUUDQWVD
WKH 1DWLRQDO (DUWKTXDNH +D]DUGV 5HGXFWLRQ KLJKHUOHYHORISHUIRUPDQFH
3URJUDP 1(+53 5HFRPPHQGHG 3URYLVLRQV  1RQOLQHDU VHLVPLFEHKDYLRU LVDFFRXQWHG
IRU6HLVPLF5HJXODWLRQVIRU1HZ%XLOGLQJVDQG IRU WKURXJK XVH RI HTXLYDOHQW ODWHUDO IRUFHV
2WKHU 6WUXFWXUHV 7KH UHTXLUHPHQWV DUH WKDWDUHUHGXFHGE\DUHVSRQVHPRGLILFDWLRQ
LQWHQGHG WR PLQLPL]H WKH KD]DUG WR OLIH IRU DOO IDFWRU 5 7KLV DSSUR[LPDWHV WKH LQWHUQDO
EXLOGLQJV LQFUHDVH WKH H[SHFWHG SHUIRUPDQFH IRUFHV XQGHU WKH GHVLJQ HDUWKTXDNH 7KH
RIKLJKHURFFXSDQF\EXLOGLQJVDVFRPSDUHGWR FRUUHVSRQGLQJ EXLOGLQJ GLVSODFHPHQWV
RUGLQDU\EXLOGLQJVDQGLPSURYHWKHFDSDELOLW\RI KRZHYHUPXVWEHLQFUHDVHGE\WKHGHIOHFWLRQ
HVVHQWLDO IDFLOLWLHV WR IXQFWLRQ GXULQJ DQG DIWHU DPSOLILFDWLRQ IDFWRU &G LQ PHHWLQJ WKH GULIW
DQHDUWKTXDNH,QDGGLWLRQWRPLQLPXPVHLVPLF OLPLWV7KHVHIDFWRUVDUHEDVHGRQWKHW\SHRI
ORDGLQJ FULWHULD WKH HDUWKTXDNH GHVLJQ VHLVPLFIRUFHUHVLVWLQJV\VWHPSURYLGHGDQG
SURYLVLRQV LQFOXGH UHTXLUHPHQWV IRU VSHFLDO DUHORFDWHGLQWKHUHIHUHQFHG6%&ORDG
LQVSHFWLRQ DQG WHVWLQJ DV ZHOO DV PDWHULDO VWDQGDUG
VSHFLILF GHVLJQ UHTXLUHPHQWV $FKLHYLQJ WKH
LQWHQGHGSHUIRUPDQFHGHSHQGVRQDQXPEHURI  'HWDLOLQJDQGOLPLWDWLRQVRQWKHVHLVPLFIRUFH
IDFWRUV LQFOXGLQJ IRU H[DPSOH WKH VWUXFWXUDO UHVLVWLQJ V\VWHP DUH D IXQFWLRQ RI D
IUDPLQJ W\SH FRQILJXUDWLRQ DQG FRQVWUXFWLRQ VWUXFWXUH¶V VHLVPLF  GHVLJQ  FDWHJRU\
PDWHULDOV FODVVLILFDWLRQ ZKLFK FRQVLGHUV VHLVPLFLW\ DW
™ 7KH VLJQLILFDQW HDUWKTXDNH ORDG FRQFHSWV WKHVLWHW\SHRIVRLOSUHVHQWDWWKHVLWHDQG
LQFOXGHWKHIROORZLQJ WKH QDWXUH RI WKHEXLOGLQJ RFFXSDQF\6LQFH
VHYHUDO FRGH UHTXLUHPHQWV DQG WKH
*XLGHOLQHV IRU 6HLVPLF 5HWURILW RI ([LVWLQJ
 7KH JURXQG PRWLRQV DUH EDVHG RQ D ULVN %XLOGLQJV *65(% XVH WKH VHLVPLF GHVLJQ
WDUJHWHG PD[LPXP FRQVLGHUHG HDUWKTXDNH FDWHJRU\ DV D WKUHVKROG EXW QHLWKHU
0&(5 IURP JURXQG PRWLRQ UHVSRQVH GRFXPHQW FRQWDLQV WKH FULWHULD IRU
DFFHOHUDWLRQ PDSV >6%&  )LJXUHV GHWHUPLQLQJ D EXLOGLQJ¶V VHLVPLF GHVLJQ
 WKURXJK @ ZKLFK FDWHJRU\ &RPPHQWDU\ )LJXUH 
SURYLGH VSHFWUDO UHVSRQVH DFFHOHUDWLRQV DW GHSLFWV WKH VWHSV XVHG WR GHWHUPLQH D
VKRUW SHULRGV 66 DQG DW D RQHVHFRQG VWUXFWXUH¶VVHLVPLFGHVLJQFDWHJRU\XVLQJWKH
SHULRG 6 7KHVH OHYHOV RI JURXQG PRWLRQ 6%&VHLVPLFFULWHULD
DUHDOVRXVHGLQ$6&(

6%&&& 

&+$37(5²3529,6,216)25$//&203/,$1&(0(7+2'6

™ 7ZROHYHOVRI6%&VHLVPLFIRUFHVDUHXVHG &RPPHQWDU\ )LJXUH  $6&( 

DV WKH EDVLV IRU WKH FRGH UHTXLUHPHQWV IRU DOVR SURYLGHV SURFHGXUHV WR HVWDEOLVK RWKHU
VHLVPLFDQDO\VLVDQGGHVLJQ7KHVHWZROHYHOV JURXQGPRWLRQOHYHOVWKDWPD\EHRILQWHUHVW
DUHHLWKHUWKHIXOOVHLVPLFIRUFHUHTXLUHGE\WKH LQUHKDELOLWDWLRQV
6%&VHH6HFWLRQRUWKHUHGXFHG
 6HFWLRQ  RI $6&(  HVWDEOLVKHV D
VHLVPLFIRUFHOHYHOZKLFKLVSHUFHQWRIWKH
UHKDELOLWDWLRQ REMHFWLYH WKDW LV UHIHUUHG WR DV
IXOOVHLVPLFIRUFHVUHTXLUHGE\WKH6%&VHH
WKH EDVLF VDIHW\ REMHFWLYH %62 7KH %62
6HFWLRQ  >VHH &RPPHQWDU\ )LJXUHV
UHTXLUHVWKHOLIHVDIHW\SHUIRUPDQFHOHYHOIRU
DQG@
%6(DQGFROODSVHSUHYHQWLRQSHUIRUPDQFH
™ 6HLVPLF 5HKDELOLWDWLRQ RI ([LVWLQJ %XLOGLQJV
OHYHO IRU %6(  7KLV GXDO REMHFWLYH
$6&(
FRUUHVSRQGVWRHQWULHVNDQGSDVLOOXVWUDWHG
™ $6&(6HLVPLF(YDOXDWLRQDQG5HWURILWRI
LQ&RPPHQWDU\)LJXUH7KH%62
([LVWLQJ%XLOGLQJVLVDFRPELQDWLRQRISUHYLRXV
DSSUR[LPDWHV WKH ULVNWR OLIH VDIHW\ WKDW KDV
VWDQGDUGV$6&(DQG$6&(
WUDGLWLRQDOO\ EHHQ DFFHSWHG LQ HDUWKTXDNH
x $6&( ²6HLVPLF 5HKDELOLWDWLRQ RI GHVLJQ DQG LV FRPSDUDEOH WR WKH LQWHQGHG
([LVWLQJ%XLOGLQJV SHUIRUPDQFH IRU QHZ EXLOGLQJV XQGHU WKH
6%&  >VHH &RPPHQWDU\ )LJXUH
x $6&(²6HLVPLF(YDOXDWLRQRI([LVWLQJ
@
%XLOGLQJV
 6\VWHPDWLF YHUVXV VLPSOLILHG UHKDELOLWDWLRQ
™ $6&(  ZDV LQLWLDOO\ DQ XSGDWHG YHUVLRQ RI
PHWKRGRORJLHV &RPPHQWDU\ )LJXUH
)(0$  3UHVWDQGDUG DQG &RPPHQWDU\ IRU
 UHSULQWHG IURP WKH $6&( 
WKH 6HLVPLF5HKDELOLWDWLRQ RI%XLOGLQJV)(0$
FRPPHQWDU\ SURYLGHV DQ RYHUYLHZ RI WKH
 ZDV HVVHQWLDOO\ DQ XSGDWHG YHUVLRQ RI
UHKDELOLWDWLRQ SURFHVV XQGHU $6&(  >VHH
)(0$1(+53*XLGHOLQHVIRUWKH6HLVPLF
&RPPHQWDU\)LJXUH@
5HKDELOLWDWLRQRI%XLOGLQJV$VQRWHG$6&(
QRZ LQFOXGHV ZKDW ZDV IRUPHUO\ $6&(   7KH OHYHO RI VHLVPLFLW\ IRU D EXLOGLQJ LV
$6&(ZDVDFRQVHQVXVVWDQGDUGWKDWZDV GHILQHG DVORZPRGHUDWHRUKLJKEDVHGRQ
GHYHORSHGDVDUHSODFHPHQWIRU)(0$,WLV WKH GHVLJQ VKRUW SHULRG VSHFWUDO UHVSRQVH
DQHYDOXDWLRQWRROWKDWSURYLGHVDVWDQGDUGL]HG DFFHOHUDWLRQ 6'6 DQG GHVLJQ VSHFWUDO
SURFHVV IRU LGHQWLI\LQJ SRWHQWLDO VHLVPLF UHVSRQVH DFFHOHUDWLRQ DW D RQHVHFRQG
GHILFLHQFLHV LQ H[LVWLQJ EXLOGLQJV DQG LQFOXGHV SHULRG 6' 7KHVH YDOXHV DUH LGHQWLFDO WR
DQLQWHJUDWHGFRPPHQWDU\,WWDNHVDWKUHHWLHU WKH6%&GHVLJQOHYHOJURXQGPRWLRQV
DSSURDFK WR HYDOXDWLRQ VWDUWLQJ ZLWK D
VFUHHQLQJ SKDVH 7LHU  DQG SURFHHGLQJ WR D  7KH OHYHO RI SHUIRUPDQFH LV HVWDEOLVKHG DV
GHWDLOHGHYDOXDWLRQSKDVH7LHULIUHTXLUHG OLIH VDIHW\ /6 GDPDJH FRQWURO OLPLWHG
™ 7KH VLJQLILFDQW FRQFHSWV LQ WKLV VWDQGDUG VDIHW\ FROODSVH SUHYHQWLRQ RU LPPHGLDWH
LQFOXGHWKHIROORZLQJ RFFXSDQF\,21RWHWKDWLQFRPSO\LQJZLWK
FRGH UHTXLUHPHQWV 7DEOH 
 'LVFUHWH UHKDELOLWDWLRQ REMHFWLYHV DUH HVWDEOLVKHV WKH SHUIRUPDQFH OHYHO WKDW
HVWDEOLVKHG EDVHG RQ WDUJHW EXLOGLQJ DSSOLHV EDVHG RQ D EXLOGLQJ¶V RFFXSDQF\
SHUIRUPDQFH OHYHOV DW YDULRXV OHYHOV RI FODVVLILFDWLRQ
JURXQG PRWLRQ HDUWKTXDNH KD]DUG 7KHVH
DUH VXPPDUL]HG LQ &RPPHQWDU\ )LJXUH  $6&(DFFRXQWVIRUQRQOLQHDUUHVSRQVHWR
 ZKLFK LV UHSURGXFHG IURP WKH HDUWKTXDNH JURXQG PRWLRQV E\ DSSO\LQJ
$6&(  FRPPHQWDU\ 1RWH WKDW WKLV HQWLUH SVHXGRVWDWLFODWHUDOIRUFHVUHSUHVHQWLQJWKH
DUUD\ RI UHKDELOLWDWLRQ REMHFWLYHV LV RQO\ IRUFHV UHTXLUHG WR LPSRVH WKH H[SHFWHG
DYDLODEOH XQGHU D YROXQWDU\ XSJUDGH WR WKH DFWXDO GHIRUPDWLRQV RI WKH VWUXFWXUH LQ LWV
VHLVPLFIRUFHUHVLVWLQJV\VWHPLQDFFRUGDQFH \LHOGHG VWDWH XQGHU WKH GHVLJQ JURXQG
ZLWK 6HFWLRQ  2WKHUZLVH WKH UHTXLUHG PRWLRQ
SHUIRUPDQFHOHYHOLVHVWDEOLVKHGE\WKHFRGH ™ $SSHQGL[ $²*XLGHOLQHV IRU WKH 6HLVPLF
>VHH&RPPHQWDU\)LJXUH@ 5HWURILWRI([LVWLQJ%XLOGLQJV*65(%
 7ZRVSHFLILF OHYHOV RI JURXQG PRWLRQ EDVHG ™ 6HLVPLF UHWURILW JXLGHOLQHV KDYH EHHQ
RQ86*6JURXQGPRWLRQPDSVDUHGHILQHGLQ GHYHORSHG DQG XWLOL]HG LQ WKH 86$ IRU PDQ\
$6&(%DVLF6DIHW\(DUWKTXDNH%6( \HDUV7KHHGLWLRQRIWKH8QLIRUP&RGHIRU
 LV WKH JURXQG PRWLRQ EDVHG RQ WKH 0&( %XLOGLQJ &RQVHUYDWLRQ 8&%& LQFOXGHG WKUHH
DQG WKH PDSSHG VSHFWUDO UHVSRQVH DSSHQGL[FKDSWHUVVHH$$DQG$EHORZ
DFFHOHUDWLRQV 66 DQG 6 %DVLF 6DIHW\ GHDOLQJ ZLWK VHLVPLF VWUHQJWKHQLQJ RI VSHFLILF
(DUWKTXDNH%6(LV0&(5%6(DQG EXLOGLQJ W\SHV ,Q  WKHVH WKUHH FKDSWHUV
%6( DUH LGHQWLILHG LQ WKH OHIWKDQG ZHUHFRPELQHGZLWKWZRQHZFKDSWHUVVHH$
HDUWKTXDNH KD]DUG OHYHO FROXPQ RI DQG$EHORZDQGSXEOLVKHGDVDVWDQGDORQH

6%&&& 

&+$37(5²3529,6,216)25$//&203/,$1&(0(7+2'6

GRFXPHQW*65(%7KHFRGHKDVLQFRUSRUDWHG  $6&(  XVLQJ D 7LHU  SURFHGXUHDQG WKH

WKH*65(%LQ$SSHQGL[$7KHDSSOLFDELOLW\RI WZROHYHO SHUIRUPDQFH REMHFWLYH LQ 7DEOH
HDFK DSSHQGL[ FKDSWHU LV VWDWHG LQ 6HFWLRQ IRUWKHDSSOLFDEOHULVNFDWHJRU\
 ,WHPV  WKURXJK  7KHVH
FKDSWHUV SURYLGH PLWLJDWLRQ IRU WKH IROORZLQJ ™ :KHUHWKHFRGHUHTXLUHVWKHXVHRI6%&
DUHDVRIFRQFHUQLQH[LVWLQJEXLOGLQJV OHYHOVHLVPLFIRUFHVLWLVLQWHQGHGWRSURYLGHD
™ $ 8QUHLQIRUFHG 0DVRQU\ %HDULQJ :DOO OHYHORIHDUWKTXDNHSHUIRUPDQFHFRPSDUDEOHWR
%XLOGLQJV7KLVFKDSWHUDSSOLHVWREXLOGLQJVZLWK QHZ FRQVWUXFWLRQ 7KH OHYHO RI SHUIRUPDQFH LV
RQH  RU PRUH XQUHLQIRUFHG PDVRQU\EHDULQJ W\SLFDOO\DIXQFWLRQRIWKHEXLOGLQJ¶VRFFXSDQF\
ZDOOV FODVVLILFDWLRQ VHH FRPPHQWDU\ 6HFWLRQ
™ $ 5HLQIRUFHG &RQFUHWH DQG 5HLQIRUFHG DQG7DEOH2QHGLIILFXOW\LQ
0DVRQU\ :DOO %XLOGLQJV ZLWK )OH[LEOH DSSO\LQJWKHVHLVPLFUHTXLUHPHQWVLQWHQGHGIRU
'LDSKUDJPV7KLVFKDSWHUKDVUHTXLUHPHQWVIRU QHZ EXLOGLQJVWRH[LVWLQJVWUXFWXUHVLVWKHXVH
ZDOODQFKRUDJHV\VWHPVIRUUHLQIRUFHGFRQFUHWH RI WKH UHVSRQVH PRGLILFDWLRQ FRHIILFLHQW 5 LQ
RUPDVRQU\ZDOOVWKDWDUHODWHUDOO\VXSSRUWHGE\ FDOFXODWLQJWKHGHVLJQVHLVPLFIRUFH8QGHUWKH
IOH[LEOHGLDSKUDJPV 6%&WKHYDOXHRI5WKDWLVREWDLQHGIURP
™ $ 6WUHQJWKHQLQJ RI &ULSSOH :DOOV DQG 6LOO WKH 6%& VWDQGDUGLVGLUHFWO\ OLQNHGWRWKH
3ODWH $QFKRUDJH RI /LJKW :RRG)UDPH OHYHORIGHWDLOLQJUHTXLUHGIRUDQ\VHLVPLFIRUFH
5HVLGHQWLDO %XLOGLQJV 7KLV FKDSWHU KDV UHVLVWLQJV\VWHP6\VWHPVDUHFKDUDFWHUL]HGDV
UHTXLUHPHQWV IRU SHULPHWHU IRXQGDWLRQV VLOO ³RUGLQDU\´³LQWHUPHGLDWH´RU³VSHFLDO´EDVHGRQ
SODWHFRQQHFWLRQVDQGXQEUDFHGFULSSOHZDOOV WKHH[WHQWRIGXFWLOHGHWDLOLQJWKDWLVSURYLGHG,Q
™ $ :RRG)UDPH 5HVLGHQWLDO %XLOGLQJV ZLWK DUHDV RI PRGHUDWH RU KLJKHU VHLVPLFLW\ DV
6RIW:HDNRU2SHQ)URQW:DOOV7KLVFKDSWHU UHIOHFWHG E\ D VWUXFWXUH¶V VHLVPLF GHVLJQ
KDVUHTXLUHPHQWVIRUZRRGIUDPHPXOWLSOHXQLW FDWHJRU\ WKH XVH RI PRVW RUGLQDU\ V\VWHPV
UHVLGHQWLDO EXLOGLQJV ZLWK VRIW ZHDN RU RSHQ WKRVHZLWKOLPLWHGGXFWLOLW\LVW\SLFDOO\UHVWULFWHG
IURQWZDOOVWKDWDUHFODVVLILHGDV6HLVPLF'HVLJQ RUSURKLELWHG,QDQH[LVWLQJEXLOGLQJWKHV\VWHP
&DWHJRU\&'RU( GHWDLOLQJ LV LQ SODFH DQG WKH SUREOHP LV LQ
™ $ &RQFUHWH %XLOGLQJV 7KLV FKDSWHU KDV VHOHFWLQJDQ5YDOXHWKDWLVFRQVLVWHQWZLWKWKH
UHTXLUHPHQWV IRU FRQFUHWH EXLOGLQJV ,W LV FRQVWUXFWLRQ RI WKDW V\VWHP )RU WKLV UHDVRQ
LQWHQGHG IRU EXLOGLQJV FODVVLILHG DV 6HLVPLF ,WHPUHVWULFWV5YDOXHVWREHQRJUHDWHUWKDQ
'HVLJQ&DWHJRU\%&'RU( WKRVHOLVWHGIRUDQRUGLQDU\V\VWHPXQOHVVWKHUH
™ $V QRWHG SUHYLRXVO\ WKH VFRSH DQG RWKHU LVFOHDUHYLGHQFHWKDWDKLJKHUOHYHORIGHWDLOLQJ
WKUHVKROGVLQFOXGHUHIHUHQFHVWRVHLVPLFFULWHULD KDV EHHQ SURYLGHG %\ FRQWUDVW $6&( 
WKDW FRUUHVSRQG WR WKH 6%&  DV ZHOO HJ DYRLGVWKHSUHYLRXVO\GLVFXVVHGSUREOHPZKHQ
VHLVPLF GHVLJQFDWHJRU\ 7KH*65(% LVDOVR DVVXPLQJ DQ 5YDOXH E\ LQVWHDG FRQVLGHULQJ
EDVHGRQ6%&IRUFHVWKDWUHTXLUHWKHXVH WKHGXFWLOLW\RILQGLYLGXDOFRPSRQHQWV,Q,WHP
RIDUHVSRQVHPRGLILFDWLRQFRHIILFLHQW5VHH WKH FRGH HTXDWHV WKH XVH RI IXOO 6%& 
FRPPHQWDU\6HFWLRQ VHLVPLFIRUFHVWRWKHSHUIRUPDQFHOHYHOVVKRZQ
LQ7DEOHZKHUH$6&(LVXVHG7KH
GXDOUHTXLUHPHQWVOLVWHGLQ7DEOHDUH
 &RPSOLDQFH ZLWK 6%& OHYHO IRU %6( DQG %6( JURXQG PRWLRQV ZKLFK
VHLVPLFIRUFHV:KHUHFRPSOLDQFHZLWKWKHVHLVPLF DUH GLVFXVVHG LQ WKH FRPPHQWDU\ WR 6HFWLRQ
GHVLJQSURYLVLRQVRIWKH6%&LVUHTXLUHGWKH 
FULWHULD VKDOO EH LQ DFFRUGDQFH ZLWK RQH RI WKH ™ 7$%/(6HHEHORZ
IROORZLQJ ™ 7KHSHUIRUPDQFH OHYHOV OLVWHGLQWKLVWDEOH DUH
FRPSDUDEOHWRWKRVHDFKLHYHGXQGHUWKH 6%&
HDUWKTXDNHUHTXLUHPHQWV5LVN&DWHJRU\,,,
 2QHKXQGUHGSHUFHQWRIWKHYDOXHVLQWKH6%&
FULWHULD DUH KDOIZD\ EHWZHHQ 5LVN &DWHJRU\ ,,
 :KHUH WKH H[LVWLQJ VHLVPLF IRUFH DQG 5LVN &DWHJRU\ ,9 7KLV GHWHUPLQDWLRQ RI
UHVLVWLQJ V\VWHP LV D W\SH WKDW FDQ EH 5LVN&DWHJRU\,,,LVEDVHGRQWKHGHILQLWLRQVRI
GHVLJQDWHGDV³2UGLQDU\´YDOXHVRI5ȍDQG ³GDPDJH FRQWURO´ DQG ³OLPLWHG VDIHW\´ ZLWKLQ
&G XVHG IRU DQDO\VLV LQ DFFRUGDQFH ZLWK $6&(7KLVLVDQDORJRXVWRWKHXVH RIWKH
&KDSWHU  RI WKH 6%&  VKDOO EH WKRVH VHLVPLFLPSRUWDQFHIDFWRUIRUQHZFRQVWUXFWLRQ
VSHFLILHG IRU VWUXFWXUDO V\VWHPV FODVVLILHG DV XQGHUWKH6%&
³2UGLQDU\´LQDFFRUGDQFHZLWK7DEOHRI  &RPSOLDQFH ZLWK UHGXFHG 6%&
6%&XQOHVVLWFDQEHGHPRQVWUDWHGWKDW OHYHO VHLVPLF IRUFHV  :KHUH VHLVPLF
WKH VWUXFWXUDO V\VWHP ZLOO SURYLGH HYDOXDWLRQDQGGHVLJQLVSHUPLWWHGWRPHHWUHGXFHG
SHUIRUPDQFH HTXLYDOHQW WR WKDW RI D 6%&VHLVPLFIRUFHOHYHOVWKHFULWHULDXVHGVKDOO
³'HWDLOHG´ ³,QWHUPHGLDWH´ RU ³6SHFLDO´ EHLQDFFRUGDQFHZLWKRQHRIWKHIROORZLQJ
V\VWHP

6%&&& 

&+$37(5²3529,6,216)25$//&203/,$1&(0(7+2'6

UHODWLYHO\FORVHWRFXUUHQWHDUWKTXDNHVWDQGDUGV
 7KH 6%&  XVLQJ  SHUFHQW RI WKH WRFRPSO\RXWULJKW,WHPHVWDEOLVKHVWKLVOHYHO
SUHVFULEHGIRUFHV9DOXHVRI5ȍDQG&GXVHG DV  SHUFHQW RI WKH HDUWKTXDNH ORDGLQJ
IRU DQDO\VLV VKDOO EH DV VSHFLILHG LQ 6HFWLRQ UHTXLUHG LQ WKH GHVLJQ RI QHZ VWUXFWXUHV 7KH
LVVXHVZLWK5YDOXHGHWHUPLQDWLRQGLVFXVVHGLQ
RIWKLVFRGH
WKH FRPPHQWDU\ WR 6HFWLRQ  RFFXU
 6WUXFWXUHV RU SRUWLRQV RI VWUXFWXUHV WKDW KHUH DV ZHOO 7KH VDPH DSSURDFK LV XVHG LQ
FRPSO\ ZLWK WKH UHTXLUHPHQWV RI WKH $SSHQGL[ $ *65(% DQG LW LV VLPLODU WR WKH
DSSOLFDEOHFKDSWHULQ$SSHQGL[$DVVSHFLILHG DSSURDFKWKDWKDVEHHQXVHGXQGHU)(0$
LQ ,WHPV  WKURXJK  DQG VXEMHFW WR WKH 7KHUHIRUH,WHPFODULILHVWKDW$SSHQGL[$LVD
OLPLWDWLRQV RI WKH UHVSHFWLYH $SSHQGL[ $ SHUPLWWHGDOWHUQDWLYHVHHFRPPHQWDU\6HFWLRQ
FKDSWHUVVKDOOEHGHHPHGWRFRPSO\ZLWKWKLV ,WHPHTXDWHVWKHVHUHGXFHGVHLVPLF
VHFWLRQ IRUFHVWRWKHOHYHORI SHUIRUPDQFHUHTXLUHG E\
7DEOHIRURQO\WKH%6(XQGHU
 7KH VHLVPLF HYDOXDWLRQ DQG GHVLJQ RI ™ 7$%/(6HHEHORZ
™ ,WHP  RI 6HFWLRQ  UHIHUHQFHV WKH
XQUHLQIRUFHG PDVRQU\ EHDULQJ ZDOO
YDOXHVLQ7DEOHWRXVHIRUFRPSOLDQFH
EXLOGLQJVLQ5LVN &DWHJRU\, RU ,, DUH ZLWK UHGXFHG 6%& OHYHO VHLVPLF IRUFHV
SHUPLWWHGWREHEDVHGRQWKHSURFHGXUHV 7KHSHUIRUPDQFH OHYHOV OLVWHGLQWKLVWDEOH DUH
VSHFLILHGLQ$SSHQGL[&KDSWHU$ WRDOORZIRUFRPSOLDQFHE\GHVLJQLQJIRUVHLVPLF
 6HLVPLF HYDOXDWLRQ DQG GHVLJQ RI WKH IRUFHVWKDWDUHOHVVWKDQZKDWLVUHTXLUHGE\WKH
ZDOO DQFKRUDJH V\VWHP LQ UHLQIRUFHG 6%&  IRU WKRVH LQVWDQFHV ZKHUH WKH FRGH
FRQFUHWHDQG UHLQIRUFHG PDVRQU\ZDOO DOORZV WKLV UHGXFHG OHYHO RI FRPSOLDQFH VXFK
EXLOGLQJV ZLWK IOH[LEOH GLDSKUDJPV LQ DV IRU UHSDLUV 7KHVH SHUIRUPDQFH OHYHOV DUH
5LVN&DWHJRU\,RU,, DUHSHUPLWWHGWR FRQVLVWHQW ZLWK ,WHP  RI 6HFWLRQ 
EHEDVHGRQWKHSURFHGXUHVVSHFLILHGLQ ZKLFKDOORZVXVLQJSHUFHQWRIWKH6%&
SUHVFULEHG VHLVPLF IRUFHV 1RWH D DGGUHVVHV
&KDSWHU$
LQWHUSRODWLRQIRU5LVN&DWHJRU\,,,7KH$6&(
 6HLVPLF HYDOXDWLRQ DQG GHVLJQ RI 7LHUFKHFNOLVWVDUHVXIILFLHQWO\FRQVHUYDWLYHIRU
FULSSOHZDOOVDQGVLOOSODWHDQFKRUDJHLQ WKH LQLWLDO VFUHHQLQJ SKDVH VR WKDW WKH OHVV
UHVLGHQWLDO EXLOGLQJV RI OLJKWIUDPH UHVWULFWLYHOLIHVDIHW\SHUIRUPDQFHOHYHOZLOOQRW
ZRRG FRQVWUXFWLRQLQ5LVN &DWHJRU\, VLJQLILFDQWO\ FRPSURPLVH WKH RYHUDOO VHLVPLF
RU,, DUHSHUPLWWHGWREHEDVHGRQWKH SHUIRUPDQFH JRDOV IRU 5LVN &DWHJRU\ ,,,
SURFHGXUHVVSHFLILHGLQ&KDSWHU$ EXLOGLQJV
 6HLVPLFHYDOXDWLRQDQGGHVLJQRIVRIW 
ZHDNRURSHQIURQWZDOOFRQGLWLRQVLQ
PXOWLXQLWUHVLGHQWLDOEXLOGLQJVRIZRRG 6(&7,21*(1(5$/3529,6,216
FRQVWUXFWLRQLQ5LVN&DWHJRU\,RU,,DUH  $SSOLFDELOLW\  7KH SURYLVLRQVRI 6HFWLRQ
SHUPLWWHGWREHEDVHGRQWKHSURFHGXUHV  DSSO\ WR DOO DOWHUDWLRQV UHSDLUV DGGLWLRQV
VSHFLILHGLQ&KDSWHU$ UHORFDWLRQVRIVWUXFWXUHVDQGFKDQJHVRIRFFXSDQF\
 6HLVPLF HYDOXDWLRQ DQG GHVLJQ RI UHJDUGOHVVRIFRPSOLDQFHPHWKRG
FRQFUHWH EXLOGLQJV DVVLJQHG WR 5LVN
&DWHJRU\,,,RU,,,DUHSHUPLWWHGWREH ™ 7KLV FRGH FRQWDLQV WKUHH SRVVLEOH FRPSOLDQFH
EDVHG RQ WKH SURFHGXUHV VSHFLILHG LQ SDWKV 3UHVFULSWLYH &KDSWHU  :RUN DUHD
&KDSWHU$ &KDSWHUV  WKURXJK  DQG 3HUIRUPDQFH
&KDSWHU  )RU DQ\ RI WKHVH SDWKV WKH

UHTXLUHPHQWVLQ6HFWLRQDSSO\
 $6&(XVLQJWKHSHUIRUPDQFHREMHFWLYHLQ
7DEOH  IRU WKH DSSOLFDEOH ULVN  $GGLWLRQDO FRGHV  $OWHUDWLRQV UHSDLUV
FDWHJRU\ DGGLWLRQV DQG FKDQJHV RI RFFXSDQF\ WR RU
UHORFDWLRQRIH[LVWLQJEXLOGLQJVDQGVWUXFWXUHVVKDOO
™ 7KH ODWHUDO IRUFHUHVLVWLQJ V\VWHPV LQ PRVW
ROGHUEXLOGLQJVDUHGLIILFXOWLIQRWLPSRVVLEOHWR FRPSO\ZLWKWKHSURYLVLRQVIRUDOWHUDWLRQVUHSDLUV
XSJUDGHWRWKHVDPHOHYHORISHUIRUPDQFHWKDW DGGLWLRQVDQGFKDQJHVRIRFFXSDQF\RUUHORFDWLRQ
LVUHTXLUHGRIQHZFRQVWUXFWLRQ:KHUHWKHFRGH UHVSHFWLYHO\ LQ WKLV FRGH DQG WKH 6%&  6%&
SHUPLWV WKH XVH RI WKLV UHGXFHG VHLVPLF IRUFH  6%&  6%&  6%&  6%& 
OHYHO LW SURYLGHV D PHDQV RI DFKLHYLQJ VRPH 6%&  6%&  DQG 1)3$  :KHUH
LPSURYHPHQW LQ HDUWKTXDNH SHUIRUPDQFH RI SURYLVLRQV RI WKH RWKHU FRGHV FRQIOLFW ZLWK
ROGHUEXLOGLQJVZLWKRXWPDNLQJVXFKHIIRUWVFRVW SURYLVLRQVRIWKLVFRGHWKHSURYLVLRQVRIWKLVFRGH
SURKLELWLYH ,W DOVR SHUPLWV D EXLOGLQJ WKDW LV VKDOOWDNHSUHFHGHQFH

6%&&& 

&+$37(5²3529,6,216)25$//&203/,$1&(0(7+2'6

™ 7KLV VHFWLRQ FODULILHV WKH UHODWLRQVKLS EHWZHHQ 7KHUH DUH WZR RSWLRQV IRU PDWHULDOV XVHG LQ
WKLV FRGH DQG WKH 6%&  6%&  6%& UHSDLUV WR DQ H[LVWLQJ EXLOGLQJ *HQHUDOO\ WKH
6%&6%&6%&6%& PDWHULDOVXVHGIRUUHSDLUVVKRXOGEHWKRVHWKDW
6%&DQG1)3$:KHQDOWHUDWLRQVDQG DUH SUHVHQWO\ UHTXLUHG RU SHUPLWWHG IRU QHZ
UHSDLUV DUH PDGH WR H[LVWLQJ PHFKDQLFDO DQG FRQVWUXFWLRQ LQ DFFRUGDQFH ZLWK WKH 6DXGL
SOXPELQJV\VWHPVWKHSURYLVLRQVRIWKH6DXGL %XLOGLQJ &RGHV ,W LV DOVR DFFHSWDEOH WR XVH
%XLOGLQJ &RGHV DQG 1)3$  IRU DOWHUDWLRQV PDWHULDOVFRQVLVWHQWZLWKWKRVHWKDWDUHDOUHDG\
DQG UHSDLUV PXVW EH IROORZHG 7KRVH FRGHV SUHVHQW H[FHSWZKHUHWKRVHPDWHULDOVSRVHD
LQGLFDWH WKH H[WHQW WR ZKLFK H[LVWLQJ V\VWHPV KD]DUG 7KLV DOORZDQFH IROORZV WKH JHQHUDO
PXVW FRPSO\ ZLWK WKH VWDWHG UHTXLUHPHQWV FRQFHSW WKDW DQ\ UHSDLU VKRXOG QRW PDNH D
:KHUH SRUWLRQV RI H[LVWLQJ EXLOGLQJ V\VWHPV EXLOGLQJPRUHKD]DUGRXVWKDQLWZDVSULRUWRWKH
VXFK DV SOXPELQJ PHFKDQLFDO DQG HOHFWULFDO UHSDLU ,W LV JHQHUDOO\ SRVVLEOH WR UHSDLU D
V\VWHPV DUH QRW EHLQJ DOWHUHG RU UHSDLUHG VWUXFWXUHLWVFRPSRQHQWVDQGLWVV\VWHPVZLWK
WKRVH V\VWHPV PD\ FRQWLQXH WR H[LVW ZLWKRXW PDWHULDOV FRQVLVWHQW ZLWK WKRVH PDWHULDOV WKDW
EHLQJ XSJUDGHG DV ORQJ DV WKH\ DUH QRW ZHUH XVHG SUHYLRXVO\ +RZHYHU ZKHUH
KD]DUGRXVRUXQVDIHWRWKHEXLOGLQJRFFXSDQWV PDWHULDOVWKDWDUHQRZGHHPHGKD]DUGRXVDUH
$QRWKHULPSRUWDQWHOHPHQWRIWKLVVHFWLRQLVWKDW LQYROYHGLQWKHUHSDLUZRUNWKH\PD\QRORQJHU
WKLV FRGH ZLOO WDNH SUHFHGHQFH LI D FRQIOLFW EH XVHG )RU H[DPSOH WKH FRGH LGHQWLILHV
RFFXUVEHWZHHQRQHRIWKHOLVWHGFRGHVDQGWKLV DVEHVWRVDQGOHDGEDVHGSDLQWDVWZRFRPPRQ
FRGH 7KLV LV RQO\ DV IDU DV LW FRQFHUQV KD]DUGRXVPDWHULDOVWKDWFDQQRWEHXVHGLQWKH
UHTXLUHPHQWV IRU DOWHUDWLRQ UHSDLUV DGGLWLRQV UHSDLU SURFHVV &HUWDLQ PDWHULDOV SUHYLRXVO\
DQGFKDQJHRIRFFXSDQF\+RZHYHUWKLVZRXOG FRQVLGHUHGDFFHSWDEOHIRUEXLOGLQJFRQVWUXFWLRQ
QRW DGGUHVV D VLWXDWLRQ ZKHUH DQRWKHU FRGH DUH QRZ NQRZQ WR EH WKUHDWV WR WKH KHDOWK RI
VXFK DV WKH 6%&  UHWURDFWLYHO\ UHTXLUHG RFFXSDQWV
FKDQJHVWRDEXLOGLQJUHJDUGOHVVLIDQ\UHSDLUV
DOWHUDWLRQVDGGLWLRQVRUFKDQJHVRIRFFXSDQF\  2FFXSDQF\ DQG XVH  :KHQ GHWHUPLQLQJ
ZHUHRFFXUULQJ WKH DSSURSULDWH DSSOLFDWLRQ RI WKH UHIHUHQFHG
VHFWLRQVRI WKLV FRGH WKH RFFXSDQF\DQG XVH RI D
 ([LVWLQJ PDWHULDOV  0DWHULDOV DOUHDG\ LQ EXLOGLQJ VKDOO EH GHWHUPLQHG LQ DFFRUGDQFH ZLWK
XVHLQDEXLOGLQJLQFRPSOLDQFHZLWKUHTXLUHPHQWV &KDSWHURIWKH6%&
RUDSSURYDOVLQHIIHFWDWWKHWLPHRIWKHLUHUHFWLRQRU
LQVWDOODWLRQ VKDOO EH SHUPLWWHG WR UHPDLQ LQ XVH ™ 7KLV VHFWLRQ SURYLGHV D OLQN WR WKH RFFXSDQF\
FODVVLILFDWLRQV LQ WKH 6%&  $Q\ WLPH D
XQOHVV GHWHUPLQHG E\ WKH EXLOGLQJ RIILFLDO WR EH
SURYLVLRQLVEDVHGRQRFFXSDQF\FODVVLILFDWLRQ
XQVDIH WKDW FODVVLILFDWLRQ LV GHWHUPLQHG WKURXJK 6%&
™ 7KLVVHFWLRQLVWKHVDPHDV6HFWLRQ,W UHTXLUHPHQWVQRWIURPFRGHVXQGHUZKLFK
KDVEHHQUHSHDWHGKHUHDVZHOOWREHJHQHUDOO\ WKH EXLOGLQJ ZDV RULJLQDOO\ EXLOW 2FFXSDQF\
DSSOLFDEOH WR DOO PHWKRGV ,I D PDWHULDO RU FODVVLILFDWLRQV KDYH FKDQJHG RYHU WKH \HDUV
V\VWHP KDG EHHQ DSSURYHG EHIRUH WKH FRGH DQG YDULHG DV WR KRZ WKH\ ZHUH QDPHG LQ
WRRNHIIHFWLWFDQFRQWLQXHWREHXVHGDVORQJ SUHYLRXVFRGHV
DVLWFDQEHVKRZQWKDWWKHPDWHULDORUV\VWHP ™ ,Q WKH HDUO\ \HDUV RI WKH ODVW FHQWXU\ WKH
LVQRWGHWULPHQWDOWRWKHKHDOWKRUVDIHW\RIWKH HVVHQFHRIUHJXODWRU\VDIHJXDUGVIURPILUHZDV
EXLOGLQJRFFXSDQWVRUWKHSXEOLF6SHFLILFDOO\D WR SURYLGH D UHDVRQDEOH OHYHO RI SURWHFWLRQ WR
PDWHULDO RU V\VWHP FDQQRW EH ³XQVDIH´ DV SURSHUW\ 7KH LGHD ZDV WKDW LI SURSHUW\ ZDV
GHILQHG LQ &KDSWHU  DQG DV DGGUHVVHG E\ DGHTXDWHO\SURWHFWHGIURPILUHWKHQWKHEXLOGLQJ
6HFWLRQ  7KH FRGH LV QRW LQWHQGHG WR EH RFFXSDQWVZRXOGDOVREHSURWHFWHG
UHWURDFWLYH ™ )URPWKLVRXWORRNRQILUHVDIHW\WKHFRQFHSWRI
HTXLYDOHQW ULVN KDV HYROYHG LQ WKH FRGH 7KLV
 1HZDQGUHSODFHPHQWPDWHULDOV([FHSW FRQFHSW PDLQWDLQV WKDW LQ SDUW DQ DFFHSWDEOH
DV RWKHUZLVH UHTXLUHG RU SHUPLWWHG E\ WKLV FRGH OHYHO RI ULVN DJDLQVW WKH GDPDJHV RI ILUH
PDWHULDOVSHUPLWWHGE\WKHDSSOLFDEOHFRGHIRUQHZ UHVSHFWLYH WR D SDUWLFXODU RFFXSDQF\ W\SH
FRQVWUXFWLRQVKDOOEHXVHG/LNHPDWHULDOVVKDOOEH JURXSFDQEHDFKLHYHGE\OLPLWLQJWKHKHLJKW
SHUPLWWHG IRU UHSDLUV DQG DOWHUDWLRQV SURYLGHG QR DQG DUHD RI EXLOGLQJV FRQWDLQLQJ VXFK
XQVDIH FRQGLWLRQ LV FUHDWHG +D]DUGRXV PDWHULDOV RFFXSDQFLHV DFFRUGLQJ WR WKH EXLOGLQJ¶V
VKDOO QRW EH XVHG ZKHUH WKH FRGH IRU QHZ FRQVWUXFWLRQ W\SH LH LWV UHODWLYH ILUH
FRQVWUXFWLRQZRXOGQRWSHUPLWWKHLUXVHLQEXLOGLQJV HQGXUDQFH
™ 7KH FRQFHSW RI HTXLYDOHQW ULVN LQYROYHV WKUHH
RIVLPLODURFFXSDQF\SXUSRVHDQGORFDWLRQ
LQWHUGHSHQGHQW FRQVLGHUDWLRQV  7KH OHYHO RI
™ 6LPLODU WR 6HFWLRQ  WKLV VHFWLRQ LV WKH ILUH KD]DUG DVVRFLDWHG ZLWK WKH VSHFLILF
VDPHDV6HFWLRQ,WKDVEHHQUHSHDWHG RFFXSDQF\RIWKHIDFLOLW\7KHUHGXFWLRQRIILUH
KHUHWREHJHQHUDOO\DSSOLFDEOHWRDOOPHWKRGV KD]DUG E\ OLPLWLQJ WKH IORRU DUHDV DQG WKH

6%&&& 

&+$37(5²3529,6,216)25$//&203/,$1&(0(7+2'6

KHLJKW RI WKH EXLOGLQJ EDVHG RQ WKH IXHO ORDG

FRPEXVWLEOH FRQWHQWV DQG EXUQDEOH EXLOGLQJ
FRPSRQHQWV DQG  7KH OHYHO RI RYHUDOO ILUH
UHVLVWDQFHSURYLGHGE\WKHW\SHRIFRQVWUXFWLRQ
XVHGIRUWKHEXLOGLQJ
™ 7KH LQWHUGHSHQGHQFH RI WKHVH ILUH VDIHW\
FRQVLGHUDWLRQV FDQ EH VHHQ E\ ILUVW ORRNLQJ DW
6%&7DEOHVDQGZKLFKVKRZWKH
ILUHUHVLVWDQFHUDWLQJVRIWKHSULQFLSDOVWUXFWXUDO
HOHPHQWVFRPSRVLQJDEXLOGLQJLQUHODWLRQWRWKH
ILYH FODVVLILFDWLRQV IRU W\SHV RI FRQVWUXFWLRQ
7\SH , FRQVWUXFWLRQ LV WKH FODVVLILFDWLRQ WKDW
JHQHUDOO\ UHTXLUHV WKH KLJKHVW ILUHUHVLVWDQFH
UDWLQJVIRUVWUXFWXUDOHOHPHQWVZKHUHDV7\SH9
FRQVWUXFWLRQ ZKLFK LV GHVLJQDWHG DV D
FRPEXVWLEOH W\SH RI FRQVWUXFWLRQ JHQHUDOO\
UHTXLUHV WKH OHDVW DPRXQW RI ILUH UHVLVWDQFH
UDWHG VWUXFWXUDO HOHPHQWV ,I RQH WKHQ ORRNV DW
6%&  7DEOHV   DQG  WKH
UHODWLRQVKLS DPRQJ JURXS FODVVLILFDWLRQ
DOORZDEOH KHLJKWV DQG DUHDV DQG W\SHV RI
FRQVWUXFWLRQEHFRPHVDSSDUHQW5HVSHFWLYHWR
HDFK JURXS FODVVLILFDWLRQ WKH JUHDWHU WKH ILUH
UHVLVWDQFH UDWLQJ RI VWUXFWXUDO HOHPHQWV DV
UHSUHVHQWHG E\ WKH W\SH RI FRQVWUXFWLRQ WKH
JUHDWHU WKH IORRU DUHD DQG KHLJKW DOORZDQFHV
7KHJUHDWHUWKHSRWHQWLDOILUHKD]DUGVLQGLFDWHG
DVDIXQFWLRQRIWKHJURXSWKHOHVVHUWKHKHLJKW
DQG DUHD DOORZDQFHV IRU D SDUWLFXODU
FRQVWUXFWLRQW\SH
™ $V D UHVXOW RI H[WHQVLYH UHVHDUFK DQG
DGYDQFHPHQWV LQ ILUH WHFKQRORJ\ WRGD\¶V
EXLOGLQJ FRGHV DUH PRUH FRPSUHKHQVLYH DQG
FRPSOH[UHJXODWRU\LQVWUXPHQWVWKDQWKH\ZHUH
LQWKHHDUOLHU\HDUVRIFRGHGHYHORSPHQW:KLOH
WKH SULQFLSOH RI HTXLYDOHQW ULVN UHPDLQV DQ
LPSRUWDQW FRPSRQHQW LQ EXLOGLQJ FRGHV
SHUVSHFWLYHV KDYH FKDQJHG DQG OLIH VDIHW\ LV
QRZ WKH SDUDPRXQW ILUH LVVXH (YHQ VR
RFFXSDQF\FODVVLILFDWLRQVWLOOSOD\VDNH\SDUWLQ
RUJDQL]LQJ DQG SUHVFULELQJ WKH DSSURSULDWH
SURWHFWLRQ PHDVXUHV $V VXFK WKUHVKROG
UHTXLUHPHQWV IRU ILUH SURWHFWLRQ DQG PHDQV RI
HJUHVV V\VWHPV DUH EDVHG RQ RFFXSDQF\
FODVVLILFDWLRQ VHH &KDSWHUV  DQG  RI WKH
6%&


6%&&& 

&+$37(5²3529,6,216)25$//&203/,$1&(0(7+2'6

™ %LEOLRJUDSK\
7KHIROORZLQJUHVRXUFHPDWHULDOVZHUHXVHGLQWKH
SUHSDUDWLRQRIWKHFRPPHQWDU\IRUWKLVFKDSWHU
RIWKHFRGH
)(0$  1(+53 +DQGERRN IRU WKH 6HLVPLF
(YDOXDWLRQ RI %XLOGLQJV :DVKLQJWRQ '&
)HGHUDO (PHUJHQF\ 0DQDJHPHQW $JHQF\

)(0$  1(+53 *XLGHOLQHV IRU WKH 6HLVPLF
5HKDELOLWDWLRQ RI ([LVWLQJ %XLOGLQJV
:DVKLQJWRQ '& )HGHUDO (PHUJHQF\
0DQDJHPHQW$JHQF\
)(0$  +DQGERRN IRU 6HLVPLF (YDOXDWLRQ RI
%XLOGLQJV²$ 3UHVWDQGDUG :DVKLQJWRQ '&
)HGHUDO (PHUJHQF\ 0DQDJHPHQW $JHQF\

)(0$  3UHVWDQGDUG DQG &RPPHQWDU\ IRU
WKH 6HLVPLF 5HKDELOLWDWLRQ RI %XLOGLQJV
*XLGHOLQHVIRUWKH6HLVPLF5HWURILWRI([LVWLQJ
%XLOGLQJV :DVKLQJWRQ '& )HGHUDO
(PHUJHQF\0DQDJHPHQW$JHQF\

6%&&& 

 &+$37(5²3529,6,216)25$//&203/,$1&(0(7+2'6

7$%/(6$1'),*85(62)&+$37(5

 'HWHUPLQHWKHPDSSHG0&(VSHFWUDOUHVSRQVHDFFHOHUDWLRQDW VKRUWSHULRGVSsDQGDW DVHFRQG SHULRG S1 IRU

WKHVLWHIURP)LJXUHVWKURXJK
 'HWHUPLQHWKHVRLOVLWHFODVVLQDFFRUGDQFHZLWK7DEOH
 'HWHUPLQHWKHVLWHFRHIILFLHQWVFa DQGFvIURP7DEOHVDQGUHVSHFWLYHO\
 'HWHUPLQHWKHGHVLJQVSHFWUDOUHVSRQVHDFFHOHUDWLRQDWVKRUWSHULRGVSDSDQGDWDVHFRQGSHULRGSD1DVIROORZV
6'6  )D6V
SD1  FvS1
 'HWHUPLQH WKH VHLVPLF GHVLJQ FDWHJRU\ DV SUHVFULEHG E\ 7DEOHV  DQG  7KH KLJKHVW PRVW
UHVWULFWLYHRIWKHVHLVPLFGHVLJQFDWHJRULHVIURPWKHWZRWDEOHVLVWKHFDWHJRU\DVVLJQHGWRWKHEXLOGLQJ

),*85(
'(7(50,1$7,212)6(,60,&'(6,*1&$7(*25<86,1*7+(6%&


),*85(
)(0$5(+$%,/,7$7,212%-(&7,9(

6%&&& 

&+$37(5²3529,6,216)25$//&203/,$1&(0(7+2'6


),*85(
%$6,&6$)(7<2%-(&7,9(6%62
6RXUFH)(0$&RPPHQWDU\



6%&&& 

&+$37(5²3529,6,216)25$//&203/,$1&(0(7+2'6



),*85(
)(0$5(+$%,/,7$7,21352&(66
6RXUFH)(0$&RPPHQWDU\

6%&&& 

&+$37(5²3529,6,216)25$//&203/,$1&(0(7+2'6

7$%/(
3(5)250$1&(2%-(&7,9(6)2586(,1$6&()25&203/,$1&(:,7+5('8&('
6%&*(1(5$/6%&/(9(/6(,60,&)25&(6
5,6.&$7(*25<%DVHGRQ6%& 6758&785$/3(5)250$1&(/(9(/)2586(:,7+%6((
7DEOH ($57+48$.(+$=$5'/(9(/
, /LIH6DIHW\6
,, /LIH6DIHW\6
,,, 'DPDJH&RQWURO66HH1RWHD
,9 ,PPHGLDWH2FFXSDQF\6
D 7LHUHYDOXDWLRQDWWKH'DPDJH&RQWUROSHUIRUPDQFHOHYHOVKDOOXVHWKH7LHU/LIH6DIHW\FKHFNOLVWVDQG7LHU4XLFN
&KHFNSURYLVLRQVPLGZD\EHWZHHQWKRVHVSHFLILHGIRU/LIH6DIHW\DQG,PPHGLDWH2FFXSDQF\SHUIRUPDQFH

7$%/(
3(5)250$1&(2%-(&7,9(6)2586(,1$6&()25&203/,$1&(:,7+6%&
/(9(/6(,60,&)25&(6
5,6.&$7(*25< 6758&785$/3(5)250$1&( 6758&785$/3(5)250$1&(
%DVHGRQ6%& /(9(/)2586(:,7+%6(1 /(9(/)2586(:,7+%6(1
7DEOH ($57+48$.(+$=$5'/(9(/ ($57+48$.(+$=$5'/(9(/
, /LIH6DIHW\6 &ROODSVH3UHYHQWLRQ6
,, /LIH6DIHW\6 &ROODSVH3UHYHQWLRQ6
,,, 'DPDJH&RQWURO6 /LPLWHG6DIHW\6
,9 ,PPHGLDWH2FFXSDQF\6 /LIH6DIHW\6

6%&&& 

&+$37(5²3529,6,216)25$//&203/,$1&(0(7+2'6

























7KLVSDJHOHIWLQWHQWLRQDOO\EODQN

6%&&& 

 &+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

²35(6&5,37,9(&203/,$1&(0(7+2'

DQG VWUXFWXUHV XQGHUJRLQJ UHSDLU DOWHUDWLRQ

™ *HQHUDO&RPPHQWV
DGGLWLRQRUFKDQJHRIRFFXSDQF\7KLVFKDSWHU
™ 7KLV PHWKRG RI FRPSOLDQFH LV PRUH VLPSOLVWLF
RULJLQDWHVIURP&KDSWHURIWKH,%&6HFWLRQV
DQGPRUHDGPLQLVWUDWLYHLQQDWXUHWKDQWKHZRUN
 WKURXJK  &KDSWHU  KDV EHHQ
DUHD PHWKRG ,W LV GHULYHG IURP ZKDW ZDV
GHOHWHGIURPWKH,%&7KH6DXGL([LVWLQJ
&KDSWHU  RI WKH 6%&  ,W SURYLGHV WKH
%XLOGLQJ &RGH 6%&  LV QRZ XVHG IRU
EDVLFUHTXLUHPHQWVIRUDGGLWLRQV6HFWLRQ
H[LVWLQJEXLOGLQJV6HFWLRQRIWKH6%&
DOWHUDWLRQV6HFWLRQUHSDLUV6HFWLRQ
 GLUHFWV FRGH XVHUV WR WKH 6%&  IRU
FKDQJHRIRFFXSDQF\6HFWLRQDQGKLVWRULF
H[LVWLQJ EXLOGLQJV 7KHUH DUH DOVR SURYLVLRQV
VWUXFWXUHV 6HFWLRQ  ,Q DGGLWLRQ WKLV
IURP WKH RWKHU 6%&V GHDOLQJ ZLWK V\VWHP
FKDSWHU SURYLGHV UHTXLUHPHQWV IRU WKH XVH RI
LQVWDOODWLRQV HOHFWULFDO HQHUJ\ IXHO JDV
ILUH HVFDSHV 6HFWLRQ  DQG JODVV
PHFKDQLFDO DQG SOXPELQJ ZKLFK KDYH EHHQ
UHSODFHPHQWDQGZLQGRZUHSODFHPHQW6HFWLRQ
GXSOLFDWHGLQWKHFRGHDVZHOO$VDGXSOLFDWLRQ
 $FFHVVLELOLW\ IRU H[LVWLQJ EXLOGLQJV DQG
RI SURYLVLRQV WKH RQJRLQJ FRGH GHYHORSPHQW
IDFLOLWLHVLVDGGUHVVHGLQ6HFWLRQ
PDLQWHQDQFHZLOOEHDFFRPSOLVKHGE\WKHFRGH
™ 3XUSRVH
FRPPLWWHHUHVSRQVLEOHIRUWKHFRGHIURPZKLFK
™ 7KLVFKDSWHUSURYLGHVRQHRIWKHWKUHHRSWLRQV
WKH SURYLVLRQV DUH EHLQJ H[WUDFWHG DQG
RIFRPSOLDQFHDYDLODEOHLQWKHFRGHIRUEXLOGLQJV
GXSOLFDWHG

™ 7KLV VHFWLRQ UHIHUHQFHV 6HFWLRQ  IRU WKH

6(&7,21*(1(5$/ RSWLRQV DYDLODEOH WR GHDO ZLWK DOWHUDWLRQV
UHSDLUVDGGLWLRQVDQGFKDQJHVRIRFFXSDQF\WR
 6FRSH7KHSURYLVLRQVRIWKLVFKDSWHUVKDOO H[LVWLQJ VWUXFWXUHV 7KH IROORZLQJ EULHIO\
FRQWUROWKHDOWHUDWLRQUHSDLUDGGLWLRQDQGFKDQJHRI GHVFULEHV WKH RSWLRQV DYDLODEOH RWKHU WKDQ
RFFXSDQF\RU UHORFDWLRQRI H[LVWLQJEXLOGLQJVDQG FRPSOLDQFHZLWKWKLVFKDSWHU6XEMHFWWRWKH
VWUXFWXUHV LQFOXGLQJ KLVWRULF EXLOGLQJV DQG DSSURYDO RI WKH EXLOGLQJ RIILFLDO UHSDLUV DQG
VWUXFWXUHVDVUHIHUHQFHGLQ6HFWLRQ DOWHUDWLRQVFDQFRPSO\ZLWKWKHUHTXLUHPHQWVRI
WKH FRGH DW WKH WLPH WKH EXLOGLQJ ZDV EXLOW 
([FHSWLRQ  ([LVWLQJ EOHDFKHUV JUDQGVWDQGV DQG 5HSDLUVDOWHUDWLRQVDGGLWLRQVDQGFKDQJHVRI
IROGLQJ DQG WHOHVFRSLF VHDWLQJ VKDOO FRPSO\ ZLWK RFFXSDQF\ FDQ FRPSO\ ZLWK WKH SURSRUWLRQDO
,&& DSSURDFKZKHUHXSJUDGHVDUHWULJJHUHGE\WKH
W\SHDQGH[WHQWRIWKHZRUN7KHVHZRUNDUHD
™ 7KLV VHFWLRQ VWDWHV WKH VFRSH RI WKLV FKDSWHU PHWKRGUHTXLUHPHQWVDUHIRXQGLQ&KDSWHUV
DQG UHIHUHQFHV DOWHUQDWLYH PHWKRGV RI FRGH WKURXJK   5HSDLUV DOWHUDWLRQV DGGLWLRQV
FRPSOLDQFH IRU DOWHUDWLRQ UHSDLU DGGLWLRQ DQG DQGFKDQJHVRIRFFXSDQF\FDQEHGHVLJQHGLQ
FKDQJH RI RFFXSDQF\ RI H[LVWLQJ VWUXFWXUHV DFFRUGDQFH ZLWK WKH FRPSOLDQFH DOWHUQDWLYHV
7KLVVHFWLRQDOVRGHILQHVWKHUHVSRQVLELOLWLHVIRU WKDWDUHIRXQGLQ&KDSWHU3OHDVHQRWHWKDW
PDLQWHQDQFH UHSDLUV FRPSOLDQFH ZLWK RWKHU WKHVH RSWLRQV DUH VHSDUDWH DQG GLVWLQFW DQG
FRGHV DQG SHULRGLF WHVWLQJ 7KH H[FHSWLRQ PXVWQRWEHFRPELQHGLQDQ\ZD\
VHQGVWKHFRGHXVHUWR,&&6WDQGDUGIRU
%OHDFKHUV )ROGLQJ DQG 7HOHVFRSLF 6HDWLQJ  %XLOGLQJ PDWHULDOV DQG V\VWHPV
DQG *UDQGVWDQGV IRU DOWHUDWLRQV UHSDLUV DQG %XLOGLQJPDWHULDOVDQGV\VWHPVVKDOOFRPSO\ZLWK
DGGLWLRQV WR EOHDFKHUV JUDQGVWDQGV DQG WKHUHTXLUHPHQWVRIWKLVVHFWLRQ
IROGLQJDQGWHOHVFRSLFVHDWLQJ
™ 7KLV VHFWLRQ PHUHO\ LQWURGXFHV WKH IDFW WKDW
&RPSOLDQFH ZLWK RWKHU PHWKRGV PDWHULDOV DQGV\VWHPVDUHUHTXLUHG WRFRPSO\
$OWHUDWLRQV UHSDLUV DGGLWLRQV DQG FKDQJHV RI ZLWK 6HFWLRQV  WKURXJK  7KHVH
RFFXSDQF\ WR RU UHORFDWLRQ RI H[LVWLQJ EXLOGLQJV VHFWLRQVGHDOZLWKWKHXVHRIH[LVWLQJPDWHULDOV
DQGVWUXFWXUHVVKDOOFRPSO\ZLWKWKHSURYLVLRQVRI QHZ DQG UHSODFHPHQW PDWHULDOV DQG VHLVPLF
WKLVFKDSWHURUZLWKRQHRIWKHPHWKRGVSURYLGHGLQ IRUFHUHVLVWLQJV\VWHPV
6HFWLRQ ([LVWLQJ PDWHULDOV  0DWHULDOV DOUHDG\ LQ
XVHLQDEXLOGLQJLQFRPSOLDQFHZLWKUHTXLUHPHQWV
RUDSSURYDOVLQHIIHFWDWWKHWLPHRIWKHLUHUHFWLRQRU

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

LQVWDOODWLRQ VKDOO EH SHUPLWWHG WR UHPDLQ LQ XVH ™ 7KLVVHFWLRQSURYLGHVJXLGDQFHWRHQJLQHHUVRQ

XQOHVV GHWHUPLQHG E\ WKH EXLOGLQJ RIILFLDO WR EH VHOHFWLQJV\VWHPUHODWHGGHVLJQFRHIILFLHQWVIRU
XQVDIHSHU6HFWLRQ H[LVWLQJVHLVPLFIRUFHV\VWHPV3UHYLRXVO\WKLV
JXLGDQFHZDVORFDWHGLQHDFKLQGLYLGXDOVHFWLRQ
™ ,I D PDWHULDO RU V\VWHP KDG EHHQ DSSURYHG UHODWHG WR DOWHUDWLRQV DGGLWLRQV UHSDLUV DQG
EHIRUHWKHFRGHWRRNHIIHFWLWFDQFRQWLQXHWR FKDQJHRI RFFXSDQF\EXW KDVEHHQUHORFDWHG
EH XVHG DV ORQJ DV LW FDQ EH VKRZQ WKDW WKH WRDPRUHJHQHUDOVHFWLRQWRHQVXUHFRQVLVWHQW
PDWHULDO RU V\VWHP LV QRW GHWULPHQWDO WR WKH DSSOLFDWLRQ7KHLQWHQWLVWKDWH[LVWLQJV\VWHPV
KHDOWKRUVDIHW\RIWKHEXLOGLQJRFFXSDQWVRUWKH VKRXOGEHFRQVLGHUHG³RUGLQDU\´E\GHIDXOW)RU
SXEOLF6SHFLILFDOO\DPDWHULDORUV\VWHPFDQQRW VHLVPLFV\VWHPVWKDWPD\SURYLGHSHUIRUPDQFH
EH ³XQVDIH´ DV GHILQHG LQ &KDSWHU  DQG DV HTXLYDOHQWWRWKDWRIDGHWDLOHGLQWHUPHGLDWHRU
DGGUHVVHG E\ 6HFWLRQ  7KH FRGH LV QRW VSHFLDO V\VWHP WKH FRGH UHTXLUHV D
LQWHQGHGWREHUHWURDFWLYH GHPRQVWUDWLRQRIHTXLYDOHQFH7KLVRQO\DSSOLHV
1HZDQGUHSODFHPHQWPDWHULDOV([FHSW WR V\VWHPV IRU ZKLFK WKHUH LV D FKRLFH RI
³RUGLQDU\´³GHWDLOHG´³LQWHUPHGLDWH´RU³VSHFLDO´
DV RWKHUZLVH UHTXLUHG RU SHUPLWWHG E\ WKLV FRGH IRU WKH SHUPLWWHG VHLVPLF IRUFH V\VWHPV )RU
PDWHULDOVSHUPLWWHGE\WKHDSSOLFDEOHFRGHIRUQHZ H[DPSOH OLJKWIUDPH VKHDU ZDOOV DUH QRW
FRQVWUXFWLRQVKDOOEHXVHG/LNHPDWHULDOVVKDOOEH FDWHJRUL]HG DV ³RUGLQDU\´ ³GHWDLOHG´
SHUPLWWHG IRU UHSDLUV DQG DOWHUDWLRQV SURYLGHG QR ³LQWHUPHGLDWH´RU³VSHFLDO´7KRVHV\VWHPVDUH
KD]DUG WR OLIH KHDOWK RU SURSHUW\ LV FUHDWHG DFFHSWDEOH DQG WKH V\VWHP FRHIILFLHQWV
+D]DUGRXV PDWHULDOV VKDOO QRW EH XVHG ZKHUH WKH VSHFLILHG IRU WKRVH V\VWHPV LQ 6%&  DUH
FRGH IRU QHZ FRQVWUXFWLRQ ZRXOG QRW SHUPLW WKHLU DSSURSULDWH
XVHLQEXLOGLQJVRIVLPLODURFFXSDQF\SXUSRVHDQG  'DQJHURXV FRQGLWLRQV  7KH EXLOGLQJ
ORFDWLRQ RIILFLDO VKDOO KDYH WKH DXWKRULW\ WR UHTXLUH WKH
™ 7KHUH DUH WZR RSWLRQV IRU PDWHULDOV XVHG LQ HOLPLQDWLRQRIFRQGLWLRQVGHHPHGGDQJHURXV
UHSDLUV WR DQ H[LVWLQJ EXLOGLQJ *HQHUDOO\ WKH
™ 7KLV VHFWLRQ HQDEOHV WKH EXLOGLQJ RIILFLDO WR
PDWHULDOV XVHG IRU UHSDLUV VKRXOG EH WKRVH
DGGUHVV GDQJHURXV FRQGLWLRQV IRU DQ\ W\SH RI
SUHVHQWO\ UHTXLUHG RU SHUPLWWHG IRU QHZ
VLWXDWLRQ WKDW PD\ DULVH GXULQJ UHQRYDWLRQV WR
FRQVWUXFWLRQ LQ DFFRUGDQFH ZLWK WKH 6DXGL
H[LVWLQJ EXLOGLQJV ³'DQJHURXV´ LV VSHFLDOO\
%XLOGLQJ &RGHV ,W LV DOVR DFFHSWDEOH WR XVH
GHILQHGLQ&KDSWHUDQGLVUHODWHGWRVWUXFWXUDO
PDWHULDOVFRQVLVWHQWZLWKWKRVHWKDWDUHDOUHDG\
VWDELOLW\ ³8QVDIH´ LV PRUH JHQHUDO DQG LV DOVR
SUHVHQW H[FHSWZKHUHWKRVHPDWHULDOVSRVHD
VSHFLDOO\ GHILQHG LQ &KDSWHU  3URYLVLRQV IRU
KD]DUG 7KLV DOORZDQFH IROORZV WKH JHQHUDO
XQVDIHEXLOGLQJVDUHORFDWHGLQ6HFWLRQ
FRQFHSW WKDW DQ\ UHSDLU VKRXOG QRW PDNH D
EXLOGLQJPRUHKD]DUGRXVWKDQLWZDVSULRUWRWKH 6(&7,21$'',7,216
UHSDLU ,W LV JHQHUDOO\ SRVVLEOH WR UHSDLU D
VWUXFWXUHLWVFRPSRQHQWVDQGLWVV\VWHPVZLWK  *HQHUDO  $GGLWLRQV WR DQ\ EXLOGLQJ RU
PDWHULDOV FRQVLVWHQW ZLWK WKRVH PDWHULDOV WKDW VWUXFWXUHVKDOOFRPSO\ZLWKWKHUHTXLUHPHQWVRIWKH
ZHUH XVHG SUHYLRXVO\ +RZHYHU ZKHUH 6%&  IRU QHZ FRQVWUXFWLRQ$OWHUDWLRQVWR WKH
PDWHULDOVWKDWDUHQRZGHHPHGKD]DUGRXVDUH H[LVWLQJ EXLOGLQJ RU VWUXFWXUH VKDOO EH PDGH WR
LQYROYHGLQWKHUHSDLUZRUNWKH\PD\QRORQJHU HQVXUH WKDW WKH H[LVWLQJ EXLOGLQJ RU VWUXFWXUH
EH XVHG )RU H[DPSOH WKH FRGH LGHQWLILHV WRJHWKHUZLWKWKHDGGLWLRQDUHQROHVVFRQIRUPLQJWR
DVEHVWRVDQGOHDGEDVHGSDLQWDVWZRFRPPRQ WKH SURYLVLRQV RI WKH 6%&  WKDQ WKH H[LVWLQJ
KD]DUGRXVPDWHULDOVWKDWFDQQRWEHXVHGLQWKH
EXLOGLQJRUVWUXFWXUHZDVSULRUWRWKHDGGLWLRQ$Q
UHSDLU SURFHVV &HUWDLQ PDWHULDOV SUHYLRXVO\
FRQVLGHUHGDFFHSWDEOHIRUEXLOGLQJFRQVWUXFWLRQ H[LVWLQJ EXLOGLQJ WRJHWKHU ZLWK LWV DGGLWLRQV VKDOO
DUHQRZNQRZQWREHD WKUHDWWRWKHKHDOWK RI FRPSO\ ZLWK WKH KHLJKW DQG DUHD SURYLVLRQV RI
WKHRFFXSDQWV &KDSWHURIWKH6%&
([LVWLQJVHLVPLFIRUFHUHVLVWLQJV\VWHPV ™ 7KHSXUSRVHRIWKLVVHFWLRQLVWRHVWDEOLVKWKH
JXLGHOLQHVIRUDGGLWLRQVWRH[LVWLQJEXLOGLQJVDQG
:KHUHWKHH[LVWLQJVHLVPLFIRUFHUHVLVWLQJV\VWHP VWUXFWXUHV $Q DGGLWLRQ LV DQ LQFUHDVH LQ WKH
LVDW\SHWKDWFDQEHGHVLJQDWHGRUGLQDU\YDOXHVRI DUHDRUKHLJKWRIDQH[LVWLQJEXLOGLQJ:KHQD
RŸDQGCdIRUWKHH[LVWLQJVHLVPLFIRUFHUHVLVWLQJ QHZEXLOGLQJLVHUHFWHGLPPHGLDWHO\DGMDFHQWWR
V\VWHPVKDOOEHWKRVHVSHFLILHGE\WKH6%&IRU DQH[LVWLQJEXLOGLQJDQGWKH\DUHVHSDUDWHGE\
DQRUGLQDU\V\VWHPXQOHVVLWLVGHPRQVWUDWHGWKDWWKH DILUHZDOOLWLVFRQVLGHUHGDVHSDUDWHEXLOGLQJ
H[LVWLQJ V\VWHP ZLOO SURYLGH SHUIRUPDQFH QRW DQ DGGLWLRQ WR WKH H[LVWLQJ VWUXFWXUH 7KH
QHZEXLOGLQJPXVWEHGHVLJQHGWRFRPSO\ZLWK
HTXLYDOHQW WR WKDW RI D GHWDLOHG LQWHUPHGLDWH RU
WKHWHFKQLFDOSURYLVLRQVRI&KDSWHUVWKURXJK
VSHFLDOV\VWHP  RI WKH 6%&  QRW ZLWK WKH SURYLVLRQV RI

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

WKLV FKDSWHU 7KH H[LVWLQJ EXLOGLQJ PXVW EH ™ 5HGXFWLRQ LQ H[SRVXUH WR IORRG KD]DUGV
HYDOXDWHG FRQVLGHULQJ WKH HOLPLQDWLRQ RI WKH LQFOXGLQJWKHH[SRVXUHRIROGHUEXLOGLQJVLVRQH
DGMDFHQWRSHQVSDFHQRZRFFXSLHGE\WKHQHZ RI WKH SXUSRVHV IRU UHJXODWLQJ IORRG SODLQ
EXLOGLQJ$QH[LVWLQJVWUXFWXUHWKDWLVRIDW\SH GHYHORSPHQW%XLOGLQJVRUVWUXFWXUHVORFDWHGLQ
RI FRQVWUXFWLRQ WKDW GRHV QRW FRPSO\ ZLWK WKH IORRG KD]DUG DUHDV DUH WR EH EURXJKW LQWR
KHLJKWDQGDUHDOLPLWDWLRQVRI6%&6HFWLRQV FRPSOLDQFHZLWKWKHIORRGUHVLVWDQFHSURYLVLRQV
 DQG  PD\ QRW EH DGGHG WR XQOHVV WKH RI6%&6HFWLRQRU6%&6HFWLRQ
W\SH RI FRQVWUXFWLRQ LV XSJUDGHG RU WKH 5 DV DSSOLFDEOH ZKHUH WKH YDOXH RI
DOORZDEOH EXLOGLQJ KHLJKW DQG DUHD DUH LPSURYHPHQWV LQFOXGLQJ DGGLWLRQV H[FHHGV D
LQFUHDVHG WKURXJK WKH LQVWDOODWLRQ RI DQ FHUWDLQYDOXH 6HH&KDSWHUIRUWKH GHILQLWLRQ
DXWRPDWLFVSULQNOHUV\VWHPWKURXJKRXWERWKWKH RI ³6XEVWDQWLDO LPSURYHPHQW´ 6HFWLRQ 
H[LVWLQJ EXLOGLQJ DQG WKH DGGLWLRQ $ EXLOGLQJ UHTXLUHVWKHDSSOLFDQWWRVWDWHWKHYDOXDWLRQRI
ZLWK D SURSRVHG DGGLWLRQ LV WR EH HYDOXDWHG SURSRVHG ZRUN ZKLFK LV WR LQFOXGH WKH WRWDO
EDVHGRQWKHW\SHRIFRQVWUXFWLRQRIWKHH[LVWLQJ YDOXHRIZRUNLQFOXGLQJPDWHULDOVDQGODERU,I
EXLOGLQJRUWKHDGGLWLRQZKLFKHYHULVWKHORZHU WKH SURSRVHG ZRUN ZLOO EH SHUIRUPHG RQ
W\SH:KHQUHYLHZLQJIRUFRPSOLDQFHZLWK6%& EXLOGLQJVLQIORRGKD]DUGDUHDVDGHWHUPLQDWLRQ
 6HFWLRQV  DQG  6%&  6HFWLRQ PXVWEHPDGHDVWRZKHWKHUWKHSURSRVHGZRUN
LVDOVRDSSOLFDEOH&RPPHQWDU\)LJXUH FRQVWLWXWHV D VXEVWDQWLDO LPSURYHPHQW ,I
VKRZVDQ H[DPSOH RIWKLVVLWXDWLRQ,I D DSSOLFDEOH WKH YDOXH RI ZRUN PXVW LQFOXGH
VSULQNOHU V\VWHP LV QRW SODQQHG IRU ERWK WKH HVWLPDWHVRIWKHYDOXHRIWKHSURSHUW\RZQHU¶V
H[LVWLQJEXLOGLQJDQGWKHDGGLWLRQWKHSURSRVHG ODERU DQG WKH YDOXH RI GRQDWHG ODERU DQG
DGGLWLRQ GRHV QRW PHHW WKH UHTXLUHPHQWV RI PDWHULDOV 7R PDNH D GHWHUPLQDWLRQ DERXW
6%&  7DEOH  7KH DUHD OLPLWDWLRQ IRU ZKHWKHU D SURSRVHG DGGLWLRQ FRQVWLWXWHV D
WKHH[LVWLQJFRQVWUXFWLRQ7\SH9%*URXS)LV VXEVWDQWLDO LPSURYHPHQW WKH FRVW RI WKH
PDQGWKHWRWDOSURSRVHGDUHDLVP SURSRVHGZRUNLVWREHFRPSDUHGWRWKHPDUNHW
7KH DUHD HYDOXDWLRQ LV EDVHG RQ 7\SH 9% YDOXH RI WKH EXLOGLQJ RU VWUXFWXUH EHIRUH WKH
FRQVWUXFWLRQ HYHQ WKRXJK WKH SURSRVHG ZRUN LV VWDUWHG ,Q RUGHU WR GHWHUPLQH PDUNHW
DGGLWLRQLV7\SH9$FRQVWUXFWLRQEHFDXVHWKH YDOXH WKH EXLOGLQJ RIILFLDO PD\ UHTXLUH WKH
DOORZDEOHDUHDLQ6%&7DEOHIRU7\SH DSSOLFDQW WR SURYLGH DQ DSSUDLVDO RU XVH RWKHU
9%FRQVWUXFWLRQLVOHVVWKDQWKHDOORZDEOHDUHD PHWKRGVDFFHSWDEOHWRWKH)HGHUDO(PHUJHQF\
IRU7\SH9$FRQVWUXFWLRQ2QHRSWLRQWRVDWLVI\ 0DQDJHPHQW $JHQF\ )(0$ RU HTXLYDOHQW
WKH UHTXLUHPHQWV LV WR XSJUDGH WKH W\SH RI SURJUDP LQ 6DXGL $UDELD )RU DGGLWLRQDO
FRQVWUXFWLRQRIWKHH[LVWLQJEXLOGLQJWR7\SH9$ JXLGDQFH VHH )(0$ 3 6XEVWDQWLDO
ZKLFK KDV DQ DOORZDEOH DUHD RI  P ,PSURYHPHQW6XEVWDQWLDO 'DPDJH 'HVN
$QRWKHU VROXWLRQ LV WR LQVWDOO DQ DXWRPDWLF 5HIHUHQFH
VSULQNOHU V\VWHP WKDW FRPSOLHV ZLWK 1)3$ 
WKURXJKRXWWKHEXLOGLQJ7KHUHYLVHGDOORZDEOH  ([LVWLQJ VWUXFWXUDO HOHPHQWV FDUU\LQJ
DUHDRIWKHEXLOGLQJZRXOGEHPEHFDXVH JUDYLW\ ORDG  $Q\ H[LVWLQJJUDYLW\ ORDGFDUU\LQJ
RI WKH LQVWDOODWLRQ RI WKH DXWRPDWLF VSULQNOHU VWUXFWXUDO HOHPHQW IRU ZKLFK DQ DGGLWLRQ DQG LWV
V\VWHP7KLVZRXOGWKHQH[FHHGWKHSURSRVHG UHODWHG DOWHUDWLRQV FDXVH DQ LQFUHDVH LQ GHVLJQ
EXLOGLQJDUHDRIP JUDYLW\ ORDG RI PRUH WKDQ  SHUFHQW VKDOO EH
VWUHQJWKHQHGVXSSOHPHQWHGUHSODFHGRURWKHUZLVH
 )ORRG KD]DUG DUHDV  )RU EXLOGLQJV DQG
DOWHUHGDVQHHGHGWRFDUU\WKHLQFUHDVHGJUDYLW\ORDG
VWUXFWXUHV LQ IORRG KD]DUG DUHDV HVWDEOLVKHG LQ
UHTXLUHGE\ WKH 6%&  IRUQHZVWUXFWXUHV$Q\
6HFWLRQRIWKH6%&RU6HFWLRQ5RI
H[LVWLQJ JUDYLW\ ORDGFDUU\LQJ VWUXFWXUDO HOHPHQW
WKH 6%&  DV DSSOLFDEOH DQ\ DGGLWLRQ WKDW
ZKRVHJUDYLW\ORDGFDUU\LQJFDSDFLW\LVGHFUHDVHG
FRQVWLWXWHVVXEVWDQWLDOLPSURYHPHQWRIWKHH[LVWLQJ
VKDOOEHFRQVLGHUHGDQDOWHUHGHOHPHQWVXEMHFWWRWKH
VWUXFWXUH VKDOO FRPSO\ ZLWK WKH IORRG GHVLJQ
UHTXLUHPHQWV RI 6HFWLRQ  $Q\ H[LVWLQJ
UHTXLUHPHQWVIRUQHZFRQVWUXFWLRQDQGDOODVSHFWV
HOHPHQWWKDWZLOOIRUPSDUWRIWKHODWHUDOORDGSDWK
RI WKH H[LVWLQJ VWUXFWXUH VKDOO EH EURXJKW LQWR
IRUDQ\SDUWRIWKHDGGLWLRQVKDOOEHFRQVLGHUHGDQ
FRPSOLDQFH ZLWK WKH UHTXLUHPHQWV IRU QHZ
H[LVWLQJ ODWHUDO ORDGFDUU\LQJ VWUXFWXUDO HOHPHQW
FRQVWUXFWLRQIRUIORRGGHVLJQ
VXEMHFWWRWKHUHTXLUHPHQWVRI6HFWLRQ
)RUEXLOGLQJVDQGVWUXFWXUHVLQIORRGKD]DUGDUHDV
HVWDEOLVKHG LQ 6HFWLRQ  RI WKH 6%&  RU ™ :KHUHYHUDQDGGLWLRQWRDQH[LVWLQJEXLOGLQJLV
6HFWLRQ5RIWKH6%&DVDSSOLFDEOHDQ\ PDGH WKH DIIHFWHG PHPEHUV RI WKH RULJLQDO
DGGLWLRQV WKDW GR QRW FRQVWLWXWH VXEVWDQWLDO VWUXFWXUHPXVWEHDVVHVVHGWRGHWHUPLQHWKHLU
LPSURYHPHQW RI WKH H[LVWLQJ VWUXFWXUH DUH QRW DELOLW\WRUHVLVWDQ\LQFUHDVHGIRUFHV%HFDXVH
DQ DGGLWLRQ W\SLFDOO\ DGGV QHZ ORDGV WR WKH
UHTXLUHG WR FRPSO\ ZLWK WKH IORRG GHVLJQ
H[LVWLQJ EXLOGLQJ WKH DUFKLWHFW RU HQJLQHHU
UHTXLUHPHQWVIRUQHZFRQVWUXFWLRQ UHVSRQVLEOH IRU WKH GHVLJQ RI WKH SURMHFW PXVW

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

DQDO\]H WKH H[LVWLQJ JUDYLW\ ORDGFDUU\LQJ ([FHSWLRQ  $Q\ H[LVWLQJ ODWHUDO ORDGFDUU\LQJ
HOHPHQWV WR GHWHUPLQH ZKHWKHU WKHUH DUH DQ\ VWUXFWXUDO HOHPHQW ZKRVH GHPDQGFDSDFLW\ UDWLR
VWUXFWXUDO FRPSRQHQWV KDYLQJ ORDGV LQFUHDVHG ZLWK WKH DGGLWLRQ FRQVLGHUHG LV QR PRUH WKDQ 
E\ PRUH WKDQ  SHUFHQW WKXV UHTXLULQJ SHUFHQWJUHDWHUWKDQLWVGHPDQGFDSDFLW\UDWLRZLWK
UHLQIRUFHPHQW:KHUHDQH[LVWLQJEXLOGLQJZDV
WKH DGGLWLRQ LJQRUHG VKDOO EH SHUPLWWHG WR UHPDLQ
LQLWLDOO\GHVLJQHGWRVXSSRUWDIXWXUHH[SDQVLRQ
WKHEXLOGLQJRIILFLDOVKRXOGVHHNYHULILFDWLRQWKDW XQDOWHUHG )RU SXUSRVHV RI FDOFXODWLQJ GHPDQG
WKHSURSRVHGDGGLWLRQZLOOUHVXOWLQWKHDIIHFWHG FDSDFLW\ UDWLRV WKH GHPDQG VKDOO FRQVLGHU
EXLOGLQJ FRPSO\LQJ ZLWK FXUUHQW FRGH DSSOLFDEOH ORDG FRPELQDWLRQV ZLWK GHVLJQ ODWHUDO
UHTXLUHPHQWV $Q\ QHZ FRQVWUXFWLRQ PXVW ORDGV RU IRUFHV LQ DFFRUGDQFH ZLWK 6HFWLRQV 
FRPSO\ZLWKFXUUHQWFRGHUHTXLUHPHQWV DQG  RI WKH 6%&  )RU SXUSRVHV RI WKLV
H[FHSWLRQ FRPSDULVRQVRIGHPDQGFDSDFLW\ UDWLRV
'HVLJQOLYHORDG:KHUHWKHDGGLWLRQGRHV
DQG FDOFXODWLRQ RI GHVLJQODWHUDO ORDGV IRUFHV DQG
QRW UHVXOW LQ LQFUHDVHG GHVLJQ OLYH ORDG H[LVWLQJ
FDSDFLWLHVVKDOODFFRXQWIRUWKHFXPXODWLYHHIIHFWV
JUDYLW\ ORDGFDUU\LQJ VWUXFWXUDO HOHPHQWV VKDOO EH
RI DGGLWLRQV DQG DOWHUDWLRQV VLQFH RULJLQDO
SHUPLWWHG WR EH HYDOXDWHG DQG GHVLJQHG IRU OLYH
FRQVWUXFWLRQ
ORDGVDSSURYHGSULRUWRWKHDGGLWLRQ,IWKHDSSURYHG
OLYHORDGLVOHVVWKDQWKDWUHTXLUHGE\6HFWLRQ ™ 7KH UHTXLUHPHQWV RI WKLV VHFWLRQ GR QRW DIIHFW
RI WKH 6%&  WKH DUHD GHVLJQHG IRU WKH DQ H[LVWLQJ VWUXFWXUH ZKHUH WKH DGGLWLRQ LV
QRQFRQIRUPLQJ OLYH ORDG VKDOO EH SRVWHG ZLWK VWUXFWXUDOO\ LQGHSHQGHQW LQ WKDW FDVH WKH
SODFDUGV RI DSSURYHG GHVLJQ LQGLFDWLQJ WKH DGGLWLRQ PXVW FRPSO\ ZLWK WKH VHLVPLF
UHTXLUHPHQWV IRU QHZ VWUXFWXUHV $Q H[LVWLQJ
DSSURYHGOLYHORDG:KHUHWKHDGGLWLRQGRHVUHVXOW
EXLOGLQJRUVWUXFWXUHZKHUHWKHDGGLWLRQZLOOQRW
LQLQFUHDVHGGHVLJQOLYHORDGWKHOLYHORDGUHTXLUHG EH VWUXFWXUDOO\ LQGHSHQGHQW PXVW EH FDUHIXOO\
E\6HFWLRQRIWKH6%&VKDOOEHXVHG HYDOXDWHGIRULWVDELOLW\WRZLWKVWDQGHDUWKTXDNH
™ ,W LV QRW XQFRPPRQ IRU WKH GHVLJQ OLYH ORDG DQGZLQGORDGLQJ7KHVHLVPLFUHVLVWDQFHRIDQ
UHTXLUHPHQWVWRFKDQJHIURPWKHWLPHDEXLOGLQJ H[LVWLQJ EXLOGLQJ RU VWUXFWXUH FDQQRW EH
LV RULJLQDOO\ GHVLJQHG WR ZKHQ DQ DGGLWLRQ LV OHVVHQHGRUSRVHDQ\XQGXHLQFUHDVHLQWKHILUH
SURSRVHG 7KH OLYH ORDGV XVHG LQ WKH RULJLQDO DQG OLIH VDIHW\ KD]DUGV RI WKH EXLOGLQJ RU
GHVLJQ PD\ KDYH EHHQ DGHTXDWH IRU WKH VWUXFWXUH%HFDXVHWKHDGGLWLRQDQGWKHH[LVWLQJ
EXLOGLQJ¶V LQLWLDO XVH DQG PD\ KDYH EHHQ LQ VWUXFWXUH UHVLVW ODWHUDO ORDGV DV D VLQJOH
FRPSOLDQFH ZLWK DOO FRGH UHTXLUHPHQWV WKDW VWUXFWXUHGHVLJQLQJWKHHQWLUHVWUXFWXUHWRUHVLVW
ZHUH LQ HIIHFW DW WKDW WLPH 0DQ\ \HDUV DQG WKH WRWDO ODWHUDO VHLVPLF DQG ZLQG ORDG LV
PDQ\FRGHFKDQJHVFDQDOWHUWKHVWDWXVRIWKH QHFHVVDU\7KLVVHFWLRQVSHFLILFDOO\DOORZVWKH
VWUXFWXUDO GHVLJQ FULWHULD DQG FRGH XVHRI$6&(XVLQJD7LHUSURFHGXUHDQG
UHTXLUHPHQWVZKLFKGRHVQRWPHDQWKHH[LVWLQJ WKHWZROHYHOSHUIRUPDQFHREMHFWLYHVRI6HFWLRQ
VWUXFWXUDOV\VWHPLVLQDGHTXDWHDQGFDQQRWEH 7KHDSSOLFDWLRQRIWKLVSURFHGXUHLV
XVHG,WMXVWPHDQVWKDWZKHQWKHOLYHORDGVWKDW DOVREDVHGRQWKHULVNFDWHJRU\RIWKHVWUXFWXUH
ZHUHXVHGIRUWKHGHVLJQRIWKHH[LVWLQJEXLOGLQJ 7KLV DOORZDQFH SURYLGHV PRUH IOH[LELOLW\ IRU
DUH ORZHU WKDQ WKRVH UHTXLUHG E\ FXUUHQW H[LVWLQJ EXLOGLQJV $6&(  LV VSHFLILFDOO\
VWDQGDUGV WKH GHVLJQ OLYH ORDGV XVHG IRU WKH IRFXVHGRQWKHHYDOXDWLRQDQGUHKDELOLWDWLRQRI
RULJLQDOGHVLJQPXVWEHSRVWHG H[LVWLQJ VWUXFWXUHV 6HH WKH FRPPHQWDU\ WR
6HFWLRQ  IRU PRUH GLVFXVVLRQ RQ WKH
 ([LVWLQJ VWUXFWXUDO HOHPHQWV FDUU\LQJ RULJLQV DQG DSSOLFDWLRQ RI WKH VWDQGDUG 7KH
ODWHUDO ORDG  :KHUH WKH DGGLWLRQ LV VWUXFWXUDOO\ H[FHSWLRQ SHUPLWV DQ DGGLWLRQ WKDW LV QRW
LQGHSHQGHQW RI WKH H[LVWLQJ VWUXFWXUH H[LVWLQJ VWUXFWXUDOO\ LQGHSHQGHQW ZLWKRXW DOWHUDWLRQ WR
ODWHUDO ORDGFDUU\LQJ VWUXFWXUDO HOHPHQWV VKDOO EH WKH VHLVPLF IRUFHUHVLVWLQJ V\VWHP RI WKH
SHUPLWWHGWRUHPDLQXQDOWHUHG:KHUHWKHDGGLWLRQ H[LVWLQJ VWUXFWXUH SURYLGHG WKH GHPDQG
LV QRW VWUXFWXUDOO\ LQGHSHQGHQW RI WKH H[LVWLQJ FDSDFLW\ UDWLR LV LQFUHDVHG QR PRUH WKDQ 
VWUXFWXUH WKH H[LVWLQJ VWUXFWXUH DQG LWV DGGLWLRQ SHUFHQWLQDQ\VWUXFWXUDOHOHPHQW7KHGHPDQG
LV GHWHUPLQHG XVLQJ WKH ORDG FRPELQDWLRQV
DFWLQJWRJHWKHUDVDVLQJOHVWUXFWXUHVKDOOEHVKRZQ
LQFOXGLQJ ZLQG DQG VHLVPLF HIIHFWV %\
WRPHHWWKHUHTXLUHPHQWVRI6HFWLRQVDQG FRQVLGHULQJ WKH GHPDQGFDSDFLW\ UDWLR DQ\
RI WKH 6%&  )RU SXUSRVHV RI WKLV VHFWLRQ GHFUHDVHLQODWHUDOUHVLVWDQFHLVDFFRXQWHGIRU
FRPSOLDQFHZLWK$6&(XVLQJD7LHUSURFHGXUH DVZHOO
DQG WKH WZROHYHO SHUIRUPDQFHREMHFWLYHLQ 7DEOH
IRUWKHDSSOLFDEOHULVNFDWHJRU\VKDOOEH  6PRNH DODUPV LQ H[LVWLQJ SRUWLRQV RI D
GHHPHGWRPHHWWKHUHTXLUHPHQWVRI6HFWLRQ EXLOGLQJ:KHUHDQDGGLWLRQLVPDGHWRDEXLOGLQJ
RIWKH6%& RU VWUXFWXUH RI D *URXS 5 RU , RFFXSDQF\ WKH
H[LVWLQJ EXLOGLQJ VKDOO EH SURYLGHG ZLWK VPRNH

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

DODUPV LQ DFFRUGDQFH ZLWK 6HFWLRQ  RI WKH H[LVWLQJFRUULGRUV\VWHPDUHQRWILUHUHVLVWDQFH

6%& UDWHG FRQVWUXFWLRQ 7KLV VHFWLRQ DOVR LQGLFDWHV
WKDW XQDOWHUHG SRUWLRQV RI D VWUXFWXUH DUH QRW
™ 7KLVVHFWLRQSURYLGHVDSDWKWRWKH6%&IRU UHTXLUHGWRFRPSO\ZLWKFRGHSURYLVLRQVIRUQHZ
WKH VPRNH DODUP UHTXLUHPHQWV LQ H[LVWLQJ FRQVWUXFWLRQ +RZHYHU DOVR VHH 6HFWLRQ 
EXLOGLQJV7KLVVHFWLRQOLQNVWKHFRGHGLUHFWO\WR ZKLFK UHTXLUHV DUHDV RXWVLGH RI WKH DOWHUDWLRQ
6%&6HFWLRQ7KHUHTXLUHPHQWVLQ DUHD WR EH UHYLVHG LQ RUGHU WR SURYLGH DQ
WKH 6%&  DUH UHWURDFWLYH DQG DSSO\ DFFHVVLEOHURXWH
UHJDUGOHVVRIZKHWKHUDQDOWHUDWLRQDGGLWLRQRU ™ 7KHH[FHSWLRQV DGGUHVVLVVXHVWKDWDULVHZLWK
FKDQJH RI RFFXSDQF\ LV RFFXUULQJ 6HFWLRQ VWDLUZD\V :KLOH QRW VSHFLILFDOO\ DGGUHVVHG
 KDV D VLPLODU UHTXLUHPHQW EXW IRU UDPSVPD\KDYHVLPLODUFRQFHUQV$FFRUGLQJWR
DOWHUDWLRQV ([FHSWLRQ  LI DQ H[LVWLQJ VWDLUZD\ ZDV EXLOW
ZLWK D VWHHSHU ULVHUXQ UDWLR WKDQ SHUPLWWHG LQ
WKHFXUUHQWFRGHWKHVWDLUZD\FDQEHUHSODFHG
6(&7,21$/7(5$7,216 ZLWK WKH H[LVWLQJ FRQILJXUDWLRQ (QODUJLQJ WKH
RSHQLQJWRDFKLHYHWKHFXUUHQWULVHUXQUDWLRDQG
 *HQHUDO  ([FHSW DV SURYLGHG E\ 6HFWLRQ KHDGURRP ZRXOG EH FRQVLGHUHG WHFKQLFDOO\
RUWKLVVHFWLRQDOWHUDWLRQVWRDQ\EXLOGLQJRU LQIHDVLEOH
VWUXFWXUHVKDOOFRPSO\ZLWKWKHUHTXLUHPHQWVRIWKH ™ 7KHSULQFLSOHLVWKDWQRWDOORZLQJIRUWKLVRSWLRQ
6%&IRUQHZFRQVWUXFWLRQ$OWHUDWLRQVVKDOOEH FRXOG UHVXOW LQ VWDLUZD\V WKDW ZHUH QRW
VXFKWKDWWKHH[LVWLQJEXLOGLQJRUVWUXFWXUHLVQROHVV PDLQWDLQHGEHFDXVHWKH\FRXOGQRWEHEURXJKW
FRQIRUPLQJWRWKHSURYLVLRQVRIWKH6%&WKDQ XSWRFXUUHQWFRGHV
WKH H[LVWLQJEXLOGLQJRU VWUXFWXUHZDV SULRUWR WKH ™ ([FHSWLRQGHDOVZLWKDQDOORZDQFHWRUHGXFH
DOWHUDWLRQ KDQGUDLO H[WHQVLRQV ZKHQ SURYLGLQJ WKRVH
H[WHQVLRQV FRXOG EHFRPH D SURWUXGLQJ REMHFW
([FHSWLRQV IRUFLUFXODWLRQ RUDQ REVWUXFWLRQIRUWKHPHDQV
RIHJUHVV6%&6HFWLRQUHTXLUHVWKH
 $QH[LVWLQJVWDLUZD\VKDOOQRWEHUHTXLUHGWR KDQGUDLOH[WHQVLRQVWRFRQWLQXHLQWKHGLUHFWLRQ
FRPSO\ ZLWK WKH UHTXLUHPHQWV RI D QHZ RIWKHVWDLUZD\UXQ$QH[DPSOHRIDQH[HPSWHG
VWDLUZD\VDV RXWOLQHGLQWKH 6%&  ZKHUH FRQILJXUDWLRQ ZRXOG EH VWDLUZD\V KDYLQJ
WKHH[LVWLQJVSDFHDQG FRQVWUXFWLRQGRHV QRW ODQGLQJVWKDWDUHSDUWRIDFRUULGRU
DOORZDUHGXFWLRQLQSLWFKRUVORSH
 )ORRG KD]DUG DUHDV  )RU EXLOGLQJV DQG
 +DQGUDLOVRWKHUZLVHUHTXLUHGWRFRPSO\ZLWK
VWUXFWXUHV LQ IORRG KD]DUG DUHDV HVWDEOLVKHG LQ
6HFWLRQRIWKH6%&VKDOOQRWEH
6HFWLRQRIWKH6%&RU6HFWLRQ5RI
UHTXLUHGWRFRPSO\ZLWKWKHUHTXLUHPHQWVRI
WKH 6%&  DV DSSOLFDEOH DQ\ DOWHUDWLRQ WKDW
6HFWLRQRIWKH6%&UHJDUGLQJIXOO
FRQVWLWXWHVVXEVWDQWLDOLPSURYHPHQWRIWKHH[LVWLQJ
H[WHQVLRQ RI WKH KDQGUDLOV ZKHUH VXFK
VWUXFWXUH VKDOO FRPSO\ ZLWK WKH IORRG GHVLJQ
H[WHQVLRQV ZRXOG EH KD]DUGRXV GXH WR SODQ
UHTXLUHPHQWVIRUQHZFRQVWUXFWLRQDQGDOODVSHFWV
FRQILJXUDWLRQ
RI WKH H[LVWLQJ VWUXFWXUH VKDOO EH EURXJKW LQWR
™ $OWHUDWLRQV LQFOXGH UHQRYDWLRQV ZKLFK LPSO\ FRPSOLDQFH ZLWK WKH UHTXLUHPHQWV IRU QHZ
WKDWVRPHWKLQJLVFKDQJHGLQWKHVWUXFWXUH)RU FRQVWUXFWLRQIRUIORRGGHVLJQ
H[DPSOH WKH UHPRYDO UHDUUDQJHPHQW RU )RUEXLOGLQJVDQGVWUXFWXUHVLQIORRGKD]DUGDUHDV
UHSODFHPHQW RI SDUWLWLRQ ZDOOV LQ DQ RIILFH
HVWDEOLVKHGLQ 6HFWLRQ RI WKH 6%&  RU
EXLOGLQJLVDQDOWHUDWLRQEHFDXVHLQSDUWRIWKH
SRVVLEOH LPSDFW RQ WKH PHDQV RI HJUHVV ILUH
6HFWLRQ5RIWKH6%&DVDSSOLFDEOHDQ\
UHVLVWDQFH RU RWKHU OLIH VDIHW\ IHDWXUHV RI WKH DOWHUDWLRQV WKDW GR QRW FRQVWLWXWH VXEVWDQWLDO
EXLOGLQJ &RQYHUVHO\ WKH UHSODFHPHQW RI LPSURYHPHQW RI WKH H[LVWLQJ VWUXFWXUH DUH QRW
GDPDJHG WULP SLHFHV RQ D GRRU IUDPH LV UHTXLUHG WR FRPSO\ ZLWK WKH IORRG GHVLJQ
FRQVLGHUHG D UHSDLU QRW DQ DOWHUDWLRQ UHTXLUHPHQWVIRUQHZFRQVWUXFWLRQ
$OWHUDWLRQVDUHWRFRQIRUPWRWKHUHTXLUHPHQWV
™ 5HGXFWLRQ LQ H[SRVXUH WR IORRG KD]DUGV
IRUDQHZVWUXFWXUH)RUH[DPSOHFRQVLGHUWKH
LQFOXGLQJH[SRVXUHRIROGHUEXLOGLQJVLVRQHRI
FRUULGRU RI DQ RIILFH EXLOGLQJ WKDW LV WR EH
WKH SXUSRVHV IRU UHJXODWLQJ IORRG SODLQ
H[WHQGHGPHWHUDVVKRZQLQ&RPPHQWDU\
GHYHORSPHQW %XLOGLQJV RU VWUXFWXUHV WKDW DUH
)LJXUH7KHH[LVWLQJRIILFHEXLOGLQJKDVQR
ORFDWHGLQIORRGKD]DUGDUHDVDUHWREHEURXJKW
VSULQNOHUV\VWHPDQGQRQHLVSURSRVHGVRWKH
LQWR FRPSOLDQFH ZLWK WKH IORRGUHVLVWDQFH
FRUULGRU H[WHQVLRQ ZDOOV DQG GRRUV DUH WR EH
SURYLVLRQV RI 6%&  6HFWLRQ  RU 6%&
ILUHUHVLVWDQFH UDWHG LQ DFFRUGDQFH ZLWK 6%&
 6HFWLRQ 5 DV DSSOLFDEOH ZKHUH WKH
6HFWLRQ7KLVLVDSSOLFDEOHHYHQLIIRU
YDOXH RI LPSURYHPHQWV LQFOXGLQJ DOWHUDWLRQV
VRPH UHDVRQ WKH ZDOOV DQG GRRUV RI WKH

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

H[FHHGVDFHUWDLQYDOXH6HH&KDSWHUIRUWKH ORDGLQJ WKH DSSOLFDEOH PLQLPXP GHVLJQ ORDGV

GHILQLWLRQRI³6XEVWDQWLDOLPSURYHPHQW´ DUHWKRVHUHTXLUHGE\WKHFRGHDWWKHWLPHRIWKH
™ 6HFWLRQUHTXLUHVWKHDSSOLFDQWWRVWDWHWKH RULJLQDOFRQVWUXFWLRQ,WLVQRWXQFRPPRQIRUWKH
YDOXDWLRQ RI WKH SURSRVHG ZRUN ZKLFK LV WR GHVLJQ OLYH ORDG UHTXLUHPHQWV WR FKDQJH IURP
LQFOXGH WKH WRWDO YDOXH RI WKH ZRUN LQFOXGLQJ WKH WLPH D EXLOGLQJ LV RULJLQDOO\ GHVLJQHG WR
PDWHULDOVDQGODERU,IWKHSURSRVHGZRUNZLOOEH ZKHQLWXQGHUJRHVDUHQRYDWLRQ7KHOLYHORDGV
SHUIRUPHGRQEXLOGLQJVLQIORRGKD]DUGDUHDVD XVHG LQ WKH RULJLQDO GHVLJQ PD\ KDYH EHHQ
GHWHUPLQDWLRQPXVWEHPDGHDVWRZKHWKHUWKH DGHTXDWHIRUWKHEXLOGLQJ¶VLQLWLDOXVHDQGPD\
SURSRVHG ZRUN FRQVWLWXWHV D VXEVWDQWLDO KDYH EHHQ LQ FRPSOLDQFH ZLWK DOO WKH FRGH
LPSURYHPHQW ,I DSSOLFDEOH WKH YDOXH RI WKH UHTXLUHPHQWV WKDW ZHUH LQ HIIHFW DW WKDW WLPH
ZRUNPXVWLQFOXGHHVWLPDWHVRIWKHYDOXHRIWKH 0DQ\ \HDUV DQG PDQ\ FRGH FKDQJHV FDQ
SURSHUW\RZQHU¶VODERUDQGWKHYDOXHRIGRQDWHG LPSDFW WKH VWUXFWXUDO GHVLJQ SDUDPHWHUV DQG
ODERUDQGPDWHULDOV FRGH UHTXLUHPHQWV ZKLFK GRHV QRW PHDQ WKH
™ 7R PDNH D GHWHUPLQDWLRQ DERXW ZKHWKHU D H[LVWLQJ VWUXFWXUDO V\VWHP LV LQDGHTXDWH DQG
SURSRVHG DOWHUDWLRQ FRQVWLWXWHV D VXEVWDQWLDO FDQQRWEHXVHGZKHQWKHEXLOGLQJLVUHQRYDWHG
LPSURYHPHQWWKHFRVWRIWKHSURSRVHGZRUNLV ,WMXVWPHDQVWKDWZKHQWKHOLYHORDGVXVHGIRU
WR EH FRPSDUHG WR WKH PDUNHW YDOXH RI WKH WKH GHVLJQ RI WKH H[LVWLQJ EXLOGLQJ DUH ORZHU
EXLOGLQJRUVWUXFWXUHEHIRUHWKHZRUNLVVWDUWHG WKDQ WKRVH UHTXLUHG E\ FXUUHQW VWDQGDUGV WKH
,QRUGHUWRGHWHUPLQHPDUNHWYDOXHWKHEXLOGLQJ GHVLJQ OLYH ORDGV XVHG IRU WKH RULJLQDO GHVLJQ
RIILFLDOPD\UHTXLUHWKHDSSOLFDQWWRSURYLGHDQ PXVWEHSRVWHG,IWKHGHVLJQOLYHORDGVRIWKH
DSSUDLVDO RU XVH RWKHU PHWKRGV DFFHSWDEOH WR DOWHUDWLRQ DUH JUHDWHU WKDQ WKRVH XVHG IRU WKH
)(0$)RUDGGLWLRQDOJXLGDQFHVHH)(0$3 H[LVWLQJ EXLOGLQJ WKHQ 6%&  6HFWLRQ 
 ZRXOGDSSO\MXVWDVIRUQHZFRQVWUXFWLRQ
 ([LVWLQJ VWUXFWXUDO HOHPHQWV FDUU\LQJ  ([LVWLQJ VWUXFWXUDO HOHPHQWV FDUU\LQJ
JUDYLW\ ORDG  $Q\ H[LVWLQJJUDYLW\ ORDGFDUU\LQJ ODWHUDOORDG([FHSWDVSHUPLWWHGE\6HFWLRQ
VWUXFWXUDOHOHPHQWIRUZKLFKDQDOWHUDWLRQFDXVHVDQ ZKHUHWKHDOWHUDWLRQLQFUHDVHVGHVLJQODWHUDOORDGVLQ
LQFUHDVH LQ GHVLJQ JUDYLW\ ORDG RI PRUH WKDQ  DFFRUGDQFH ZLWK 6HFWLRQV  DQG  RI WKH
SHUFHQW VKDOO EH VWUHQJWKHQHG VXSSOHPHQWHG 6%&  RU ZKHUH WKH DOWHUDWLRQ UHVXOWV LQ D
UHSODFHGRURWKHUZLVHDOWHUHGDVQHHGHGWRFDUU\WKH SURKLELWHGVWUXFWXUDOLUUHJXODULW\DVGHILQHGLQ6%&
LQFUHDVHGJUDYLW\ORDGUHTXLUHGE\WKH6%&IRU RUZKHUHWKHDOWHUDWLRQGHFUHDVHVWKHFDSDFLW\
QHZVWUXFWXUHV$Q\H[LVWLQJJUDYLW\ORDGFDUU\LQJ RI DQ\ H[LVWLQJ ODWHUDO ORDGFDUU\LQJ VWUXFWXUDO
VWUXFWXUDO HOHPHQW ZKRVH JUDYLW\ ORDGFDUU\LQJ HOHPHQW WKH VWUXFWXUH RI WKH DOWHUHG EXLOGLQJ RU
FDSDFLW\LVGHFUHDVHGDVSDUWRIWKHDOWHUDWLRQVKDOO VWUXFWXUHVKDOOEHVKRZQWRPHHWWKHUHTXLUHPHQWV
EH VKRZQ WR KDYH WKH FDSDFLW\ WR UHVLVW WKH RI 6HFWLRQV  DQG  RI WKH 6%&  )RU
DSSOLFDEOHGHVLJQJUDYLW\ORDGVUHTXLUHGE\WKH6%& SXUSRVHVRIWKLVVHFWLRQFRPSOLDQFHZLWK$6&(
IRUQHZVWUXFWXUHV XVLQJ D 7LHU  SURFHGXUH DQG WKH WZROHYHO
™ :KHUHYHUDQDOWHUDWLRQWRDQH[LVWLQJEXLOGLQJLV
SHUIRUPDQFH REMHFWLYH LQ 7DEOH  IRU WKH
PDGHWKHDIIHFWHGPHPEHUVPXVWEHDVVHVVHG DSSOLFDEOHULVNFDWHJRU\VKDOOEH GHHPHGWRPHHW
WRGHWHUPLQHWKHLUDELOLW\WRUHVLVWWKHLQFUHDVHG WKHUHTXLUHPHQWVRI6HFWLRQRIWKH6%&
IRUFHV 6WUXFWXUDO HOHPHQW IRUFHV PD\ EH ([FHSWLRQ  $Q\ H[LVWLQJ ODWHUDO ORDGFDUU\LQJ
LQFUHDVHGE\XSWRSHUFHQWZLWKRXWWKHQHHG
VWUXFWXUDO HOHPHQW ZKRVH GHPDQGFDSDFLW\ UDWLR
WRVWUHQJWKHQRUUHSODFHWKDWHOHPHQW
ZLWK WKH DOWHUDWLRQ FRQVLGHUHG LV QR PRUH WKDQ 
'HVLJQ OLYH ORDG  :KHUH WKH DOWHUDWLRQ SHUFHQWJUHDWHUWKDQLWVGHPDQGFDSDFLW\UDWLRZLWK
GRHV QRW UHVXOW LQ LQFUHDVHG GHVLJQ OLYH ORDG WKHDOWHUDWLRQLJQRUHGVKDOOEHSHUPLWWHGWRUHPDLQ
H[LVWLQJ JUDYLW\ ORDGFDUU\LQJ VWUXFWXUDO HOHPHQWV XQDOWHUHG )RU SXUSRVHV RI FDOFXODWLQJ GHPDQG
VKDOOEHSHUPLWWHGWREHHYDOXDWHGDQGGHVLJQHGIRU FDSDFLW\ UDWLRV WKH GHPDQG VKDOO FRQVLGHU
OLYH ORDGV DSSURYHG SULRU WR WKH DOWHUDWLRQ ,I WKH DSSOLFDEOH ORDG FRPELQDWLRQV ZLWK GHVLJQ ODWHUDO
DSSURYHG OLYH ORDG LV OHVV WKDQ WKDW UHTXLUHG E\ ORDGV RU IRUFHV LQ DFFRUGDQFH ZLWK 6HFWLRQV 
6HFWLRQRIWKH6%&WKHDUHDGHVLJQHGIRU DQG  RI WKH 6%&  )RU SXUSRVHV RI WKLV
WKH QRQFRQIRUPLQJ OLYH ORDG VKDOO EH SRVWHG ZLWK H[FHSWLRQ FRPSDULVRQVRIGHPDQGFDSDFLW\ UDWLRV
SODFDUGV RI DSSURYHG GHVLJQ LQGLFDWLQJ WKH DQG FDOFXODWLRQ RI GHVLJQODWHUDO ORDGV IRUFHV DQG
DSSURYHGOLYHORDG:KHUHWKHDOWHUDWLRQGRHVUHVXOW FDSDFLWLHVVKDOODFFRXQWIRUWKHFXPXODWLYHHIIHFWV
LQLQFUHDVHGGHVLJQOLYHORDGWKHOLYHORDGUHTXLUHG RI DGGLWLRQV DQG DOWHUDWLRQV VLQFH RULJLQDO
E\RIWKH6%&VKDOOEHXVHG FRQVWUXFWLRQ
™ :KHUH DQ H[LVWLQJ EXLOGLQJ LV XQGHUJRLQJ ™ $QH[LVWLQJEXLOGLQJRUVWUXFWXUHWKDWLVDOWHUHG
DOWHUDWLRQV UHTXLULQJ FKDQJHV WR WKH VWUXFWXUDO PXVW EH FDUHIXOO\ HYDOXDWHG IRU LWV DELOLW\ WR

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

ZLWKVWDQG HDUWKTXDNH DQG ZLQG ORDGV 7KH GHWHUPLQH WKDW WKH EXLOGLQJ¶V ODWHUDO ORDG
ODWHUDO UHVLVWDQFH RI DQ H[LVWLQJ EXLOGLQJ RU UHVLVWLQJV\VWHPPHHWVWKHUHGXFHG6%&
VWUXFWXUH FDQQRW EH OHVVHQHG RU SRVH DQ\ OHYHOVHLVPLFIRUFHV6HFWLRQDGGUHVVHV
XQGXH LQFUHDVH LQ WKH ILUH DQG OLIH VDIHW\ WKLVWRSLFZLWKWKHZRUNDUHDPHWKRG
KD]DUGV RI WKH EXLOGLQJ RU VWUXFWXUH 7KLV
VHFWLRQRIWKHFRGHJLYHVJXLGDQFHZLWKUHVSHFW  %UDFLQJ IRU XQUHLQIRUFHG PDVRQU\
WR WKH LPSDFW RI DQ DOWHUDWLRQ RQ WKH ODWHUDO SDUDSHWV XSRQ UHURRILQJ  :KHUH WKH LQWHQGHG
UHVLVWDQFH RI WKH VWUXFWXUH 7KLV VHFWLRQ DOWHUDWLRQ UHTXLUHV D SHUPLW IRU UHURRILQJ DQG
VSHFLILFDOO\DOORZVWKHXVHRI$6&(XVLQJD LQYROYHV UHPRYDO RI URRILQJ PDWHULDOV IURP PRUH
7LHUSURFHGXUHDQGWKHWZROHYHOSHUIRUPDQFH WKDQ  SHUFHQW RI WKH URRI DUHD RI D EXLOGLQJ
REMHFWLYHVRI6HFWLRQ7KHDSSOLFDWLRQ DVVLJQHGWR6HLVPLF'HVLJQ&DWHJRU\'(RU)WKDW
RI WKLV SURFHGXUH LV DOVR EDVHG RQ WKH ULVN KDVSDUDSHWVFRQVWUXFWHGRIXQUHLQIRUFHGPDVRQU\
FDWHJRU\ RI WKH VWUXFWXUH 7KLV DOORZDQFH WKH ZRUN VKDOO LQFOXGH LQVWDOODWLRQ RI SDUDSHW
SURYLGHV PRUH IOH[LELOLW\ IRU H[LVWLQJ EXLOGLQJV EUDFLQJWRUHVLVWRXWRISODQHVHLVPLFIRUFHVXQOHVV
$6&(  LV VSHFLILFDOO\ IRFXVHG RQ WKH
DQ HYDOXDWLRQ GHPRQVWUDWHV FRPSOLDQFH RI VXFK
HYDOXDWLRQ DQG UHKDELOLWDWLRQ RI H[LVWLQJ
VWUXFWXUHV 6HH WKH FRPPHQWDU\ WR 6HFWLRQ LWHPV)RUSXUSRVHVRIWKLVVHFWLRQGHVLJQVHLVPLF
IRUPRUHGLVFXVVLRQRQWKHRULJLQVDQG IRUFHVQHHGQRWEHWDNHQJUHDWHUWKDQSHUFHQWRI
DSSOLFDWLRQ RI WKH VWDQGDUG $OWHUDWLRQV WKDW WKRVH WKDW ZRXOG EH UHTXLUHG IRU WKH GHVLJQ RI
DIIHFW H[LVWLQJ VWUXFWXUDO HOHPHQWV WR D OHVVHU VLPLODUQRQVWUXFWXUDOFRPSRQHQWVLQQHZEXLOGLQJV
H[WHQW DUH SHUPLWWHG ZLWKRXW UHTXLULQJ WKH RIVLPLODUSXUSRVHDQGORFDWLRQ
H[LVWLQJVWUXFWXUHWRFRPSO\ZLWKWKHSURYLVLRQV
™ 7KH IDLOXUH RI SDUDSHWV LQ XQUHLQIRUFHG
IRU QHZ VWUXFWXUHV DV ORQJ DV WKH DOWHUDWLRQ
PDVRQU\EHDULQJ 850 ZDOO EXLOGLQJV KDV
LWVHOIFRPSOLHV7KHH[FHSWLRQDOORZVDOWHUDWLRQV
EHHQ D UHFXUULQJ SUREOHP LQ DUHDV WKDW
WKDW LQFUHDVH WKH GHPDQGFDSDFLW\ UDWLR RQ
H[SHULHQFH VLJQLILFDQW HDUWKTXDNHV %HFDXVH
H[LVWLQJ ODWHUDO ORDG FDUU\LQJ HOHPHQWV E\ QR
WKLV SRVHV D YHU\ UHDO ULVN WKH FRGH UHTXLUHV
PRUH WKDQ  SHUFHQW RU GHFUHDVH WKH ODWHUDO
WKHVHHOHPHQWVWREHEUDFHGZKHUHWKHVHLVPLF
UHVLVWDQFHRIH[LVWLQJVWUXFWXUDOHOHPHQWVE\QR
KD]DUG LV GHHPHG WR EH UHODWLYHO\ KLJK DV
PRUHWKDQSHUFHQW
UHIOHFWHG LQ D EXLOGLQJ¶V VHLVPLF GHVLJQ
6HLVPLF 'HVLJQ &DWHJRU\ )  :KHUH WKH FDWHJRU\6LQFHWKHFRGHGRHVQRWSURYLGHWKH
SRUWLRQ RI WKH EXLOGLQJ XQGHUJRLQJ WKH LQWHQGHG UHTXLUHPHQWV IRU HVWDEOLVKLQJ WKH VHLVPLF
DOWHUDWLRQH[FHHGVSHUFHQWRIWKHDJJUHJDWHDUHD GHVLJQFDWHJRU\6%&6HFWLRQPXVW
RIWKHEXLOGLQJDQGZKHUHWKHEXLOGLQJLVDVVLJQHG EHXVHGIRUWKLVSXUSRVH7KHFRGHDOORZVWKLV
SDUDSHW EUDFLQJ WR EH GHVLJQHG XVLQJ 
WR6HLVPLF'HVLJQ&DWHJRU\)WKHVWUXFWXUHRIWKH
SHUFHQW RI WKH VHLVPLF IRUFHV RI RWKHU
DOWHUHG EXLOGLQJ VKDOO EH VKRZQ WR PHHW WKH QRQVWUXFWXUDOHOHPHQWVRIDEXLOGLQJIRUVLPLODU
HDUWKTXDNHGHVLJQSURYLVLRQVRIWKH6%&)RU SXUSRVH DQG ORFDWLRQ ,W VKRXOG EH QRWHG WKDW
SXUSRVHVRIWKLVVHFWLRQWKHHDUWKTXDNHORDGVQHHG WKLV VDPH UHTXLUHPHQW LV IRXQG LQ 6HFWLRQ
QRW EH WDNHQ JUHDWHU WKDQ  SHUFHQW RI WKRVH ZKLFKDOORZVFRPSOLDQFHZLWK6HFWLRQ
SUHVFULEHGLQ6HFWLRQRIWKH6%&IRUQHZ 
EXLOGLQJV RI VLPLODU RFFXSDQF\ SXUSRVH DQG ™ $QH[DPSOHRIWKHSUHVFULEHGSDUDSHWEUDFLQJ
ORFDWLRQ1HZVWUXFWXUDOPHPEHUVDQGFRQQHFWLRQV LV LOOXVWUDWHG VFKHPDWLFDOO\ LQ &RPPHQWDU\
UHTXLUHG E\ WKLV VHFWLRQ VKDOO FRPSO\ ZLWK WKH )LJXUH 7KH DSSURDFKVKRZQ²DVWHHO
GHWDLOLQJSURYLVLRQVRIWKLVFRGHIRUQHZEXLOGLQJV EUDFHDQFKRUHGWRWKHSDUDSHWZDOODQGWKHURRI
VWUXFWXUH² LV D FRPPRQO\ XVHG PHWKRG RI
RIVLPLODUVWUXFWXUHSXUSRVHDQGORFDWLRQ
SURYLGLQJ ODWHUDO VXSSRUW IRU D SDUDSHW 2WKHU
™ 7KLV VHFWLRQ LV IRFXVHG VSHFLILFDOO\ RQ WKRVH PHWKRGV RI VWUHQJWKHQLQJ D SDUDSHW FDQ EH
EXLOGLQJVDVVLJQHGWR6HLVPLF'HVLJQ&DWHJRU\ XVHGWRPLWLJDWHWKHKD]DUGSURYLGHGWKHLUXVH
)ZKLFKLVWKHPRVWVHYHUH%XLOGLQJVLQVXFK LV DSSURYHG DV DOWHUQDWLYH PHWKRGV RI GHVLJQ
DUHDV DUH DW D KLJK ULVN IRU GDPDJH IURP D DQGFRQVWUXFWLRQXQGHU6HFWLRQ
VHLVPLF HYHQW 7KHUHIRUH ZKHQ D EXLOGLQJ LV ™ 1RWHWKDWRQO\WKHSDUDSHW EUDFLQJIRUVHLVPLF
XQGHUJRLQJPRUHWKDQDSHUFHQWDOWHUDWLRQ ORDGV LV UHTXLUHG 6RPH EXLOGLQJV HVSHFLDOO\
LW ZDV IHOW UHDVRQDEOH WR DOVR HYDOXDWH WKH WKRVH HDVW RI WKH 5RFN\ 0RXQWDLQV ZHUH QRW
ODWHUDOIRUFHUHVLVWLQJV\VWHPUHJDUGOHVVRIWKH GHVLJQHG IRU VHLVPLF ORDGV 7KH\ ZHUH RQO\
H[WHQW RI WKH VWUXFWXUDO DOWHUDWLRQV 7KLV LV GHVLJQHG WR UHVLVW ZLQG ORDGV $W WKH SUHVHQW
LQWHQGHG WR EH FRQVLVWHQW ZLWK /HYHO  WLPHWKHFRGHGRHVQRWUHTXLUHDUHYLHZRIWKH
DOWHUDWLRQV LQ WKH ZRUN DUHD PHWKRG 7KH EXLOGLQJIRUVHLVPLF ORDGV XQOHVVWKHVWUXFWXUH
LQWHQWLRQLVWKDWWKHDOWHUDWLRQDUHDLVIRFXVHGRQ LV DOWHUHG RU VXVWDLQV VXEVWDQWLDO VWUXFWXUDO
UHFRQILJXUHGVSDFH7KLVVHFWLRQUHTXLUHVVXFK GDPDJH
EXLOGLQJV WR EH HYDOXDWHG DQG DQDO\]HG WR

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

 :DOO DQFKRUDJH IRU XQUHLQIRUFHG EXLOGLQJVZKHUHWKHDOWHUDWLRQDIIHFWVPRUHWKDQ

PDVRQU\ZDOOVLQPDMRUDOWHUDWLRQV :KHUHWKH  SHUFHQW RI WKH EXLOGLQJ 7KLV LV LQWHQGHG WR
SRUWLRQ RI WKH EXLOGLQJ XQGHUJRLQJ WKH LQWHQGHG EH FRQVLVWHQW ZLWK /HYHO  DOWHUDWLRQV LQ WKH
DOWHUDWLRQH[FHHGVSHUFHQWRIWKHDJJUHJDWHDUHD ZRUN DUHD PHWKRG 7KH LQWHQWLRQ LV WKDW WKH
DOWHUDWLRQ DUHD LV IRFXVHG RQ UHFRQILJXUHG
RIWKHEXLOGLQJWKHEXLOGLQJLVDVVLJQHGWR6HLVPLF
VSDFH,WLVIHOWWKDWWKLVEUDFLQJLVDFULWLFDOOLIH
'HVLJQ&DWHJRU\&'( RU)DQGWKHEXLOGLQJ¶V VDIHW\ PHDVXUH WKDW VKRXOG EH WDNHQ GXULQJ
VWUXFWXUDO V\VWHP LQFOXGHV XQUHLQIRUFHG PDVRQU\ ODUJHU DOWHUDWLRQV 6HFWLRQ  DGGUHVVHV
ZDOOVWKHDOWHUDWLRQZRUNVKDOOLQFOXGHLQVWDOODWLRQ WKLVWRSLFLQWKHZRUNDUHDPHWKRG
RI ZDOO DQFKRUV DW WKH URRI OLQH WR UHVLVW VHLVPLF
IRUFHV XQOHVV DQ HYDOXDWLRQ GHPRQVWUDWHV  5RRIGLDSKUDJPVUHVLVWLQJZLQGORDGVLQ
FRPSOLDQFH RI H[LVWLQJ ZDOO DQFKRUDJH )RU KLJKZLQGUHJLRQV:KHUHWKHLQWHQGHGDOWHUDWLRQ
SXUSRVHVRIWKLVVHFWLRQGHVLJQVHLVPLFIRUFHVQHHG UHTXLUHV D SHUPLW IRU UHURRILQJ DQG LQYROYHV
QRWEH WDNHQJUHDWHUWKDQSHUFHQWRIWKRVHWKDW UHPRYDO RI URRILQJ PDWHULDOV IURP PRUH WKDQ 
ZRXOGEHUHTXLUHGIRUWKHGHVLJQRIQHZEXLOGLQJV SHUFHQW RI WKH URRI GLDSKUDJP RI D EXLOGLQJ RU
RIVLPLODUVWUXFWXUHSXUSRVHDQGORFDWLRQ VHFWLRQ RI D EXLOGLQJ ORFDWHG ZKHUH WKH XOWLPDWH
GHVLJQ ZLQG VSHHG LV JUHDWHU WKDQ  NPKU LQ
™ 7KLV VHFWLRQ GHDOV ZLWK XQUHLQIRUFHG PDVRQU\ DFFRUGDQFHZLWK)LJXUHRIWKH6%&
ZDOOV LQ EXLOGLQJV ZKHUH WKH DOWHUDWLRQ DIIHFWV RU LQ D VSHFLDO ZLQG UHJLRQ DV GHILQHG LQ 6HFWLRQ
PRUH WKDQ  SHUFHQW RI WKH EXLOGLQJ 7KLV LV
RIWKH6%&URRIGLDSKUDJPVFRQQHFWLRQV
LQWHQGHG WR EH FRQVLVWHQW ZLWK /HYHO 
DOWHUDWLRQV LQ WKH ZRUN DUHD PHWKRG 7KH RIWKHURRIGLDSKUDJPWRURRIIUDPLQJPHPEHUVDQG
LQWHQWLRQLVWKDWWKHDOWHUDWLRQDUHDLVIRFXVHGRQ URRIWRZDOOFRQQHFWLRQVVKDOOEHHYDOXDWHGIRUWKH
UHFRQILJXUHG VSDFH 7KH ZDOO DQFKRUDJH ZLQG ORDGV VSHFLILHGLQ 6HFWLRQ  RI WKH 6%&
V\VWHP LQFOXGHV WKH HOHPHQWV ZLWKLQ WKH  LQFOXGLQJZLQG XSOLIW,I WKH GLDSKUDJPVDQG
GLDSKUDJPUHTXLUHGWRGHYHORSZDOODQFKRUDJH FRQQHFWLRQV LQ WKHLU FXUUHQW FRQGLWLRQ DUH QRW
IRUFHV LQFOXGLQJ ZDOO DQFKRUV VWUXWV VXE FDSDEOHRIUHVLVWLQJDWOHDVWSHUFHQWRIWKRVHZLQG
GLDSKUDJPVFURVVWLHVDQGFRQWLQXLW\WLHV1RWH ORDGV WKH\ VKDOO EH UHSODFHG RU VWUHQJWKHQHG LQ
WKDWLIDVWUXFWXUDOHYDOXDWLRQLQGLFDWHVWKDWWKH DFFRUGDQFHZLWKWKHORDGVVSHFLILHGLQ6HFWLRQ
H[LVWLQJ ZDOO DQFKRUDJH SURYLGHG FDQ DOUHDG\ RIWKH6%&
UHVLVWDQGWUDQVIHUWKHVHIRUFHVDGGLWLRQDOZDOO
DQFKRUDJH LV QRW UHTXLUHG 6HFWLRQ  ™ 7KHUHPRYDORIURRILQJSURYLGHVDQRSSRUWXQLW\
DGGUHVVHVWKLVWRSLFZLWKWKHZRUNDUHDPHWKRG WR LQVSHFW D SRUWLRQ RI WKH VWUXFWXUH WKDW LV
RWKHUZLVH FRQFHDOHG ,Q UHURRILQJ RSHUDWLRQV
 %UDFLQJ IRU XQUHLQIRUFHG PDVRQU\ ZKHUH PRUH WKDQ  SHUFHQW RI WKH URRI
SDUDSHWVLQPDMRUDOWHUDWLRQV FRYHULQJLVUHPRYHGDQGZKHUHWKHEXLOGLQJLV
:KHUH WKH SRUWLRQRI WKH EXLOGLQJXQGHUJRLQJWKH ORFDWHGZKHUHWKHXOWLPDWHGHVLJQZLQGVSHHG
9XOW >GHWHUPLQHG LQ DFFRUGDQFH ZLWK 6%& 
LQWHQGHG DOWHUDWLRQ H[FHHGV  SHUFHQW RI WKH
7DEOH@LVJUHDWHUWKDQNPKURU
DJJUHJDWH DUHD RI WKH EXLOGLQJ DQG ZKHUH WKH LQDVSHFLDOZLQGUHJLRQDURRIGLDSKUDJPWKDW
EXLOGLQJLVDVVLJQHGWR6HLVPLF'HVLJQ&DWHJRU\& LVDSDUWRIWKHPDLQZLQGIRUFHUHVLVWLQJV\VWHP
' ( RU ) SDUDSHWV FRQVWUXFWHG RI XQUHLQIRUFHG LV UHTXLUHG WR EH HYDOXDWHG IRU DGHTXDWH
PDVRQU\VKDOOKDYHEUDFLQJLQVWDOOHGDVQHHGHGWR VWUHQJWKWRUHVLVWDQGWUDQVIHUWKHZLQGORDGVLQ
UHVLVW RXWRISODQH VHLVPLF IRUFHV XQOHVV DQ WKH6%&  LQFOXGLQJ XSOLIWORDGV,IWKHURRI
HYDOXDWLRQGHPRQVWUDWHVFRPSOLDQFHRIVXFKLWHPV GLDSKUDJPLVQRWDEOHWRUHVLVWSHUFHQWRIWKH
)RUSXUSRVHVRIWKLVVHFWLRQGHVLJQVHLVPLFIRUFHV ZLQG ORDGV VSHFLILHG LQ WKH 6%&  VXFK
QHHGQRWEHWDNHQJUHDWHUWKDQSHUFHQWRIWKRVH FRQQHFWLRQVDUHUHTXLUHGWREHVWUHQJWKHQHGRU
WKDW ZRXOG EH UHTXLUHG IRU WKH GHVLJQ RI VLPLODU UHSODFHG 7KH SHUFHQW UHGXFWLRQ LV
FRQVLVWHQW ZLWK RWKHU VWUXFWXUDO DOORZDQFHV IRU
QRQVWUXFWXUDO FRPSRQHQWV LQ QHZ EXLOGLQJV RI
H[LVWLQJFRQGLWLRQV1RWHWKDWWKLVVHFWLRQVSHOOV
VLPLODUSXUSRVHDQGORFDWLRQ RXW ZKLFK DVSHFWV RI WKH URRI QHHG WR EH
™ 7KH SURYLVLRQV IRXQG LQ WKLV VHFWLRQ DUH HYDOXDWHG DQG SRVVLEO\ UHSODFHG DQG
HVVHQWLDOO\WKHVDPHDVWKRVHIRXQGLQ6HFWLRQ VWUHQJWKHQHG7KLVUHTXLUHPHQWLVWKHVDPHDV
 7KH UHDVRQ IRU D GXSOLFDWLRQ RI WKH WKDWIRXQGLQ6HFWLRQLQWKHZRUNDUHD
SURYLVLRQ LV UHODWHG WR WKH DSSOLFDWLRQ RI WKH PHWKRG 7KHVH LQFOXGH WKH IROORZLQJ ‡ 5RRI
SURYLVLRQV 6HFWLRQ  RQO\ DSSOLHV LI GLDSKUDJPV ‡ &RQQHFWLRQV RI WKH URRI
UHURRILQJ RFFXUV DQG LV RQO\ DSSOLFDEOH WR GLDSKUDJPWRURRIIUDPLQJPHPEHUV‡5RRIWR
6HLVPLF 'HVLJQ &DWHJRULHV ' ( DQG ) 7KLV ZDOOFRQQHFWLRQV
VHFWLRQ DOVR DSSOLHV WR 6HLVPLF 'HVLJQ
 9ROXQWDU\ VHLVPLF LPSURYHPHQWV
&DWHJRU\ & 7KHVH SURYLVLRQV ZLOO DSSO\ LQ
$OWHUDWLRQV WR H[LVWLQJ VWUXFWXUDO HOHPHQWV RU

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

DGGLWLRQV RI QHZ VWUXFWXUDO HOHPHQWV WKDW DUH QRW EHORZ WKDW UHTXLUHG LQ 6HFWLRQV  WKURXJK
RWKHUZLVHUHTXLUHGE\WKLVFKDSWHUDQGDUHLQLWLDWHG 
IRUWKHSXUSRVHRILPSURYLQJWKHSHUIRUPDQFHRIWKH ™ 7KLVVHFWLRQZDVZULWWHQZLWKWKHFRQFHUQWKDW
VHLVPLF IRUFHUHVLVWLQJ V\VWHP RI DQ H[LVWLQJ GXULQJ DOWHUDWLRQV WKH FDSDFLW\ DQG
VWUXFWXUHRUWKHSHUIRUPDQFHRIVHLVPLFEUDFLQJRU DUUDQJHPHQW RI UHIXJH DUHDV UHTXLUHG IRU
DQFKRUDJHRIH[LVWLQJQRQVWUXFWXUDOHOHPHQWVVKDOO RFFXSDQFLHVWKDWOLPLWPRYHPHQWRIRFFXSDQWV
EHSHUPLWWHGSURYLGHGWKDWDQHQJLQHHULQJDQDO\VLV RU ZKHUH RFFXSDQWV DUH LQFDSDEOH RI VHOI
LVVXEPLWWHGGHPRQVWUDWLQJWKHIROORZLQJ SUHVHUYDWLRQ PD\ EH UHGXFHG 5HIXJH DUHDV
DUHSDUWRIWKHGHIHQGLQSODFHVWUDWHJ\DQGDUH
 7KH DOWHUHG VWUXFWXUH DQG WKH DOWHUHG GHVLJQHG ZLWK D SDUWLFXODU FDSDFLW\ LQ PLQG LQ
QRQVWUXFWXUDOHOHPHQWVDUHQROHVVFRQIRUPLQJ HDFK VPRNH FRPSDUWPHQW 7KH UHIXJH DUHDV
FUHDWHG E\ KRUL]RQWDO H[LWV DOVR PXVW EH
WRWKHSURYLVLRQVRIWKH6%&ZLWKUHVSHFW
PDLQWDLQHG DV WKH\ XVH WKH VDPH FRQFHSW RI
WRHDUWKTXDNHGHVLJQWKDQWKH\ZHUHSULRUWR PRYLQJRFFXSDQWVKRUL]RQWDOO\
WKHDOWHUDWLRQ
 1HZ VWUXFWXUDO HOHPHQWV DUH GHWDLOHG DV  6PRNHFRPSDUWPHQWV,Q*URXS
UHTXLUHGIRUQHZFRQVWUXFWLRQ ,DQG,RFFXSDQFLHVWKHUHTXLUHGFDSDFLW\RIWKH
 1HZ RUUHORFDWHGQRQVWUXFWXUDOHOHPHQWVDUH UHIXJHDUHDVIRUVPRNHFRPSDUWPHQWVLQDFFRUGDQFH
GHWDLOHG DQG FRQQHFWHG WR H[LVWLQJ RU QHZ ZLWK6HFWLRQVDQGRIWKH6%&
VWUXFWXUDO HOHPHQWV DV UHTXLUHG IRU QHZ VKDOOEHPDLQWDLQHG
FRQVWUXFWLRQ ™ 7KH 6%&  UHTXLUHV WKDW *URXS , DQG ,
 7KH DOWHUDWLRQV GR QRW FUHDWH D VWUXFWXUDO RFFXSDQFLHVSURYLGHWKHODUJHVWRFFXSDQWORDG
LUUHJXODULW\DVGHILQHGLQ6%&RUPDNHDQ RI WKH DGMRLQLQJ FRPSDUWPHQW ,Q *URXS ,
H[LVWLQJVWUXFWXUDOLUUHJXODULW\PRUHVHYHUH RFFXSDQFLHVWKHFULWHULDXVHGWRGHWHUPLQHWKH
FDSDFLW\DUHQHWPIRUHDFKFDUHUHFLSLHQW
™ 7KLVSURYLVLRQDGGUHVVHVWKHLVVXHRIXSJUDGLQJ
FRQILQHGWRDEHGRUVWUHWFKHUDQGQRWOHVVWKDQ
H[LVWLQJ VWUXFWXUHV YROXQWDULO\ IRU LPSURYHG
PIRUHDFKDPEXODWRU\FDUHUHFLSLHQWQRW
VHLVPLF SHUIRUPDQFH ,W GRHV QRW DSSO\ WR
FRQILQHG WR EHG RU VWUHWFKHU DQG IRU RWKHU
VLWXDWLRQVZKHUHRWKHUFRGHVHFWLRQVWULJJHUIXOO
RFFXSDQWV )RU *URXS , RFFXSDQFLHV WKH
FRPSOLDQFHZLWKWKHFRGH2WKHUZLVHLWDOORZV
6%&  UHTXLUHV WKDW  P SHU RFFXSDQW
DQ RZQHU WR LQLWLDWH DQ LPSURYHPHQW WR WKH
VKDOO EH SURYLGHG RQ ERWK VLGHV RI WKH VPRNH
VHLVPLFIRUFHUHVLVWLQJV\VWHPWRWKHH[WHQWWKDW
EDUULHUIRUPLQJWKHVPRNHFRPSDUWPHQW
LWLVYLDEOHWRGRVRDQGSURYLGHGWKHUHTXLUHG
HQJLQHHULQJDQDO\VLVLVIXUQLVKHG7KHLQWHQWLV  $PEXODWRU\FDUH,QDPEXODWRU\
WR HQFRXUDJH EXLOGLQJ RZQHUV WR LQLWLDWH FDUH IDFLOLWLHV UHTXLUHG WR EH VHSDUDWHG E\ 6HFWLRQ
XSJUDGHV WR VHLVPLF V\VWHPV WKDW DUH RIWKH6%&WKHUHTXLUHGFDSDFLW\RIWKH
FRQVLGHUHG SUXGHQW ZLWKRXW PDNLQJ WKHP FRVW UHIXJHDUHDVIRUVPRNHFRPSDUWPHQWVLQDFFRUGDQFH
SURKLELWLYH
ZLWK 6HFWLRQ  RI WKH 6%&  VKDOO EH
 6PRNHDODUPV ,QGLYLGXDOVOHHSLQJXQLWV PDLQWDLQHG
DQG LQGLYLGXDOGZHOOLQJXQLWVLQ *URXS 5 DQG , ™ $PEXODWRU\FDUHIDFLOLWLHVDUHVLPLODUWR*URXS,
RFFXSDQFLHVVKDOOEHSURYLGHGZLWKVPRNHDODUPVLQ RFFXSDQFLHVDQGFRQWDLQRFFXSDQWVWKDWDUH
DFFRUGDQFHZLWK6HFWLRQRIWKH6%& LQFDSDEOH RI VHOISUHVHUYDWLRQ EHFDXVH RI WKH
™ 7KLVVHFWLRQLVFRQVLVWHQWZLWK6HFWLRQEXW SURFHGXUHV DQG VXUJHULHV GRQH DW VXFK
DSSOLHVWRDOWHUDWLRQV$VZLWK6HFWLRQD IDFLOLWLHV 7KHUHIRUH WKH FULWHULD DUH VLPLODU WR
UHIHUHQFHWR6%&6HFWLRQLVPDGH WKDWRI*URXS,RFFXSDQFLHVDQGUHTXLUH
IRU WKH UHTXLUHPHQWV IRU VPRNH DODUPV LQ PIRUHDFKQRQDPEXODWRU\FDUHUHFLSLHQW7KLV
H[LVWLQJLQGLYLGXDOVOHHSLQJXQLWVDQGLQGLYLGXDO DUHD PXVW EH SURYLGHG LQ WKH FRUULGRUV FDUH
GZHOOLQJXQLWVLQ*URXS5DQG,RFFXSDQFLHV UHFLSLHQW URRPV WUHDWPHQW URRPV ORXQJH RU
,QWKHSDVWWKHFRGHOLPLWHGWKHOHYHORIEXLOGLQJ GLQLQJDUHDVDQGRWKHUORZKD]DUGDUHDVLQWKH
ILUHSURWHFWLRQE\LVRODWLQJVXFKUHTXLUHPHQWVWR VPRNHFRPSDUWPHQW1RWHWKDWRQO\DPEXODWRU\
ZRUNDUHDVRQO\7KHVWUXFWXUHRIWKH6%& FDUH IDFLOLWLHV JUHDWHU WKDQ  P UHTXLUH
LVWKDWWKHUHWURDFWLYHUHTXLUHPHQWVDSSO\WRDOO VPRNHFRPSDUWPHQWV
EXLOGLQJV ZKHWKHU RU QRW WKRVH EXLOGLQJV DUH  +RUL]RQWDO H[LWV  7KH UHTXLUHG
XQGHUJRLQJDQDOWHUDWLRQ FDSDFLW\ RI WKH UHIXJH DUHD IRU KRUL]RQWDO H[LWV LQ
 5HIXJHDUHDV:KHUHDOWHUDWLRQVDIIHFWWKH DFFRUGDQFHZLWK6HFWLRQWKH6%&VKDOO
FRQILJXUDWLRQRI DQ DUHDXWLOL]HGDV D UHIXJHDUHD EHPDLQWDLQHG
WKHFDSDFLW\RIWKHUHIXJHDUHDVKDOOQRWEHUHGXFHG

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

™ 7KLVVHFWLRQLVPRUHJHQHUDODQGDGGUHVVHVDQ\ UHKDELOLWDWHG IRU ORDG FRPELQDWLRQV WKDW

RFFXSDQFLHV XVLQJ KRUL]RQWDO H[LWV +RUL]RQWDO LQFOXGHHDUWKTXDNHHIIHFWV
H[LWV DOORZ D VLPLODU FRQFHSW WR VPRNH  2QH DQG WZRIDPLO\ GZHOOLQJV QHHG QRW EH
FRPSDUWPHQWV ZKHUH RFFXSDQWV VLPSO\ H[LW HYDOXDWHG RU UHKDELOLWDWHG IRU ORDG
WKURXJK GRRUV LQWR DQ DGMRLQLQJ DUHD RI WKH
FRPELQDWLRQVWKDWLQFOXGHHDUWKTXDNHHIIHFWV
EXLOGLQJVHSDUDWHGE\DILUHEDUULHURUILUHZDOO
6HFWLRQ  UHTXLUHV  P IRU HDFK ™ 7KLV VHFWLRQ SURYLGHV UHTXLUHPHQWV WKDW DSSO\
RFFXSDQW 7KHUH DUH VHYHUDO VSHFLILF ZKHUH WKH GDPDJH WKUHVKROG UHJDUGLQJ WKH
H[FHSWLRQV IRU *URXS , DQG , RFFXSDQFLHV H[WHQWRIWKHGDPDJHWRWKHYHUWLFDOHOHPHQWVRI
WKDWFRUUHODWHZLWKWKHFULWHULDQRWHGLQ6HFWLRQ WKHODWHUDOIRUFHUHVLVWLQJV\VWHPLQDQ\VWRU\LV
 H[FHHGHG6XEVWDQWLDOVWUXFWXUDOGDPDJHWRWKH
ODWHUDO V\VWHP WULJJHUV WKH HYDOXDWLRQ RI WKH
HQWLUHEXLOGLQJIRUZLQGDQGVHLVPLFORDGVVHH
6(&7,215(3$,56 6HFWLRQ  7KH HPSKDVLV LV SODFHG RQ
YHUWLFDOHOHPHQWVVXFKDVZDOOVDQGFROXPQV
 *HQHUDO  %XLOGLQJV DQG VWUXFWXUHV DQG UDWKHU WKDQ KRUL]RQWDO HOHPHQWV EHFDXVH WKH
SDUWVWKHUHRIVKDOOEHUHSDLUHGLQFRPSOLDQFHZLWK YHUWLFDO HOHPHQWV RI WKH ODWHUDO IRUFHUHVLVWLQJ
6HFWLRQV  DQG  :RUN RQ QRQGDPDJHG V\VWHP SULPDULO\ GHWHUPLQH WKH VWUXFWXUH¶V
FRPSRQHQWVWKDWLVQHFHVVDU\IRUWKHUHTXLUHGUHSDLU UHVSRQVH SDUWLFXODUO\ WR HDUWKTXDNHV 7KHUH
RIGDPDJHGFRPSRQHQWVVKDOOEHFRQVLGHUHGSDUWRI DUH WZR H[FHSWLRQV WKDW H[HPSW FHUWDLQ
WKH UHSDLU DQG VKDOO QRW EH VXEMHFW WR WKH FRPELQDWLRQV RI EXLOGLQJV VHLVPLF ULVN DQG
GDPDJH IURP WULJJHUHG VHLVPLF XSJUDGHV
UHTXLUHPHQWVIRUDOWHUDWLRQVLQWKLVFKDSWHU5RXWLQH
%DVLF UHSDLU²WKDW LV UHVWRULQJ WKH SUH
PDLQWHQDQFH UHTXLUHG E\ 6HFWLRQ  RUGLQDU\ GDPDJHG FRQGLWLRQ²LV VWLOO UHTXLUHG HYHQ IRU
UHSDLUV H[HPSW IURP SHUPLW LQ DFFRUGDQFH ZLWK WKH H[FHSWLRQV RXWOLQHG ([FHSWLRQ  LV IRU
6HFWLRQDQGDEDWHPHQWRIZHDUGXHWRQRUPDO EXLOGLQJVLQDUHDVRIORZRUPRGHUDWHVHLVPLFLW\
VHUYLFH FRQGLWLRQV VKDOO QRW EH VXEMHFW WR WKH 6HLVPLF'HVLJQ&DWHJRU\$%RU&ZKHUHWKH
UHTXLUHPHQWVIRUUHSDLUVLQWKLVVHFWLRQ GDPDJHZDVQRWFDXVHGE\DQHDUWKTXDNHDQG
WKHUHIRUHZRXOGQRWEHUHTXLUHGWREHHYDOXDWHG
™ 7KHVFRSHRIWKLVVHFWLRQGLIIHUHQWLDWHVUHSDLUV
RU UHKDELOLWDWHG IRU ORDG FRPELQDWLRQV WKDW
IURP DOWHUDWLRQV DQG FODULILHV WKDW URXWLQH
LQFOXGHHDUWKTXDNHHIIHFWV:KHUHHDUWKTXDNHV
PDLQWHQDQFH DQG DQ\ UHSDLUV QRW UHTXLULQJ DUHUDUHLWVHUYHVQRVLJQLILFDQWSXEOLFSXUSRVH
SHUPLWV ZRXOG QRW KDYH WR PHHW WKHVH WR WULJJHU VHLVPLF XSJUDGHV IROORZLQJ GDPDJH
UHTXLUHPHQWV,Q JHQHUDO WKHVHFWLRQSURYLGHV
FDXVHGE\ILUHFROOLVLRQZLQGHWF([FHSWLRQ
D ORJLFDO PHWKRG IRU HYDOXDWLQJ GDPDJH DQG
LVIRURQHDQGWZRIDPLO\GZHOOLQJVZKHUHWKH
LGHQWLI\LQJ FDVHV ZKHUH XSJUDGHV DUH
SXEOLF ULVN LV HVSHFLDOO\ ORZ HYHQ WKRXJK WKH
ZDUUDQWHG 7KH SURYLVLRQV ZRXOG UHTXLUH
GDPDJH PD\ EH DVVRFLDWHG ZLWK HDUWKTXDNH
VWUXFWXUDOLPSURYHPHQWVPHHWLQJ³WKHFRGHIRU HIIHFWV6LPLODUH[FHSWLRQVDUHIRXQGLQ6HFWLRQ
QHZVWUXFWXUHV´LQFHUWDLQ FDVHVLQWKHHYHQW 
RI GDPDJH GXH WR ILUH VWUXFWXUDO RYHUORDG
VHWWOHPHQWQDWXUDOKD]DUGRUDQ\RWKHUFDXVH (YDOXDWLRQ  7KH EXLOGLQJ VKDOO EH
QRPDWWHUKRZH[WHQVLYHRUGLVSURSRUWLRQDWHWKH HYDOXDWHGE\DUHJLVWHUHGGHVLJQSURIHVVLRQDODQG
GDPDJH 7KLV VHFWLRQ LGHQWLILHV FRQGLWLRQV RI WKH HYDOXDWLRQ ILQGLQJV VKDOO EH VXEPLWWHG WR WKH
GDPDJH WKDW VKRXOG ZDUUDQW LPSURYHPHQWV WR EXLOGLQJ RIILFLDO 7KH HYDOXDWLRQ VKDOO HVWDEOLVK
WKHVWUXFWXUDOV\VWHPIRUSXUSRVHVRILQFUHDVLQJ ZKHWKHUWKHGDPDJHGEXLOGLQJLIUHSDLUHGWRLWVSUH
VDIHW\
GDPDJHVWDWHZRXOGFRPSO\ZLWKWKHSURYLVLRQVRI
 6XEVWDQWLDO VWUXFWXUDO GDPDJH WR WKH6%&IRUZLQGDQGHDUWKTXDNHORDGV
YHUWLFDO HOHPHQWV RI WKH ODWHUDO IRUFHUHVLVWLQJ :LQG ORDGV IRU WKLV HYDOXDWLRQ VKDOO EH WKRVH
V\VWHP $ EXLOGLQJWKDWKDVVXVWDLQHGVXEVWDQWLDO SUHVFULEHG LQ 6HFWLRQ  RI WKH 6%& 
VWUXFWXUDO GDPDJH WR WKH YHUWLFDO HOHPHQWV RI LWV (DUWKTXDNH ORDGV IRU WKLV HYDOXDWLRQ LI UHTXLUHG
ODWHUDOIRUFHUHVLVWLQJV\VWHPVKDOOEHHYDOXDWHGDQG VKDOO EH SHUPLWWHG WR EH  SHUFHQW RI WKRVH
UHSDLUHG LQ DFFRUGDQFH ZLWK WKH DSSOLFDEOH SUHVFULEHG LQ 6HFWLRQ  RI WKH 6%& 
SURYLVLRQVRI6HFWLRQVWKURXJK $OWHUQDWLYHO\FRPSOLDQFHZLWK$6&(XVLQJWKH
SHUIRUPDQFH REMHFWLYH LQ 7DEOH  IRU WKH
([FHSWLRQV
DSSOLFDEOH ULVN FDWHJRU\ VKDOO EH GHHPHG WRPHHW
 %XLOGLQJV DVVLJQHG WR 6HLVPLF 'HVLJQ WKHHDUWKTXDNHHYDOXDWLRQUHTXLUHPHQW
&DWHJRU\ $ % RU & ZKRVH VXEVWDQWLDO
™ 7KHH[WHQWRIUHSDLUVLVEDVHGRQDQHYDOXDWLRQ
VWUXFWXUDO GDPDJH ZDV QRW FDXVHG E\ SUHSDUHG E\ D UHJLVWHUHG GHVLJQ SURIHVVLRQDO
HDUWKTXDNH QHHG QRW EH HYDOXDWHG RU *HQHUDOO\WKHFRGH¶VDSSURDFKLVWKDWFRPSOHWH

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

VWUXFWXUDOXSJUDGHVVKRXOGEHUHODWLYHO\UDUH,Q GHWDLOLQJ SURYLVLRQV RI WKH 6%&  IRU QHZ

WKLV VHFWLRQ D VWUXFWXUDO XSJUDGH LV RQO\ EXLOGLQJVRIVLPLODUVWUXFWXUHSXUSRVHDQGORFDWLRQ
WULJJHUHG E\ VXEVWDQWLDO VWUXFWXUDO GDPDJH WR $OWHUQDWLYHO\FRPSOLDQFHZLWK$6&(XVLQJWKH
WKH ODWHUDO V\VWHP DQG RQO\ ZKHQ WKH SHUIRUPDQFH REMHFWLYH LQ 7DEOH  IRU WKH
HYDOXDWLRQ VKRZV WKDW WKH SUHGDPDJHG
DSSOLFDEOH ULVN FDWHJRU\ VKDOO EH GHHPHG WRPHHW
EXLOGLQJZDVVXEVWDQGDUG7KLVSURYLVLRQUHIHUV
WR 6%&6HFWLRQVDQG IRUZLQG WKHHDUWKTXDNHUHKDELOLWDWLRQUHTXLUHPHQW
DQG HDUWKTXDNH ORDGV UHVSHFWLYHO\ ,W SHUPLWV ™ ,IWKHHYDOXDWLRQRIWKHEXLOGLQJLQDFFRUGDQFH
UHGXFHG HDUWKTXDNH ORDGLQJ IRU ERWK WKH ZLWK 6HFWLRQ  VKRZV WKDW LQ WKH
HYDOXDWLRQ DQG DQ\ UHTXLUHG VHLVPLF K\SRWKHWLFDOO\ UHSDLUHG FRQGLWLRQ WKH EXLOGLQJ
UHKDELOLWDWLRQ WR UHFRJQL]H WKDW H[LVWLQJ ZRXOG QRW FRPSO\ ZLWK WKH HVWDEOLVKHG
EXLOGLQJVFDQQRWEHH[SHFWHGWRSHUIRUPDVZHOO UHTXLUHPHQWV WKHQ WKH EXLOGLQJ PXVW EH
DV QHZHU EXLOGLQJV 7KLV FRQFHSW RI XVLQJ UHKDELOLWDWHG DV GHVFULEHG LQ WKLV VHFWLRQ 7KH
UHGXFHG HDUWKTXDNH ORDGLQJ LV FRQVLVWHQW ZLWK JHQHUDOUHTXLUHPHQWLVWRFRPSO\ZLWKWKH6%&
)(0$VWDQGDUGVDVZHOODVWKHOHJDF\EXLOGLQJ  ORDG FRPELQDWLRQV 7KHVH ORDG
FRGHV7KLVVHFWLRQVSHFLILFDOO\DOORZVWKHXVH FRPELQDWLRQVHVWDEOLVKWKHUHTXLUHGVWUHQJWKRI
RI$6&(XVLQJWKHSHUIRUPDQFHREMHFWLYHV VWUXFWXUDO PHPEHUV 7KH HIIHFWV RI ZLQG DQG
LQ 7DEOH  7KH DSSOLFDWLRQ RI WKLV VHLVPLFORDGVZDUUDQWVSHFLDOFRQVLGHUDWLRQ,Q
SURFHGXUHLVDOVREDVHGRQWKHULVNFDWHJRU\RI GHWHUPLQLQJWKHOHYHORIFRPSOLDQFHIRUUHSDLUV
WKH VWUXFWXUH 7KLV DOORZDQFH SURYLGHV PRUH WR EXLOGLQJV WKDW KDYH VXVWDLQHG VXEVWDQWLDO
IOH[LELOLW\ IRU H[LVWLQJ EXLOGLQJV $6&(  LV VWUXFWXUDOGDPDJHLWLVLPSRUWDQWWRGHWHUPLQH
VSHFLILFDOO\ IRFXVHG RQ WKH HYDOXDWLRQ DQG LIZLQGIRUFHVKDYHFDXVHGWKDWGDPDJH,IVR
UHKDELOLWDWLRQ RI H[LVWLQJ VWUXFWXUHV 6HH WKH LW LV FRQVLGHUHG SUXGHQW WR UHTXLUH UHSDLUV WR
FRPPHQWDU\ WR 6HFWLRQ  IRU PRUH ZLQGGDPDJHG EXLOGLQJV WR FRPSO\ ZLWK WKH
GLVFXVVLRQRQWKHRULJLQVDQGDSSOLFDWLRQRIWKH ZLQG ORDG SURYLVLRQV IURP WKH FXUUHQW FRGH
VWDQGDUG 6HLVPLF IRUFHV IRU WKH UHKDELOLWDWLRQ FDQ EH
WKRVHUHTXLUHGE\WKHEXLOGLQJFRGHLQHIIHFWDW
([WHQWRIUHSDLUIRUFRPSOLDQWEXLOGLQJV
WKHWLPHRIWKHEXLOGLQJ¶VFRQVWUXFWLRQEXWWKLV
,IWKHHYDOXDWLRQHVWDEOLVKHVFRPSOLDQFHRIWKHSUH PD\QRWEHOHVVWKDQWKHUHGXFHGVHLVPLFIRUFH
GDPDJH EXLOGLQJ LQ DFFRUGDQFH ZLWK 6HFWLRQ OHYHODVGHVFULEHGLQ6HFWLRQ6HFWLRQ
WKHQUHSDLUVVKDOOEHSHUPLWWHGWKDWUHVWRUH  DQG WKLV VHFWLRQ DOVR DOORZ WKH
WKHEXLOGLQJWRLWVSUHGDPDJHVWDWH DSSOLFDWLRQ RI $6&(  VHH FRPPHQWDU\
™ :KHUHWKHHYDOXDWLRQHVWDEOLVKHVWKDWWKHSUH 6HFWLRQ
GDPDJHG EXLOGLQJ PHHWV WKH VWUXFWXUDO  6XEVWDQWLDOVWUXFWXUDOGDPDJHWRJUDYLW\
SURYLVLRQVRIWKHFRGHDVSURYLGHGIRULQ6HFWLRQ ORDGFDUU\LQJFRPSRQHQWV*UDYLW\ORDGFDUU\LQJ
 WKHQ WKH UHSDLUV PD\ EH OLPLWHG WR D FRPSRQHQWV WKDW KDYH VXVWDLQHG VXEVWDQWLDO
UHVWRUDWLRQRIWKHVWUXFWXUDOFRPSRQHQWVEDVHG
VWUXFWXUDOGDPDJHVKDOOEHUHKDELOLWDWHGWRFRPSO\
RQ WKH FRQGLWLRQ SULRU WR WKH GDPDJH 7KLV LV
VLPLODU WR 6HFWLRQ  IRU UHSDLUV XQGHU ZLWKWKHDSSOLFDEOHSURYLVLRQVRIWKH6%&IRU
WKHZRUNDUHDPHWKRG GHDGDQGOLYHORDGV6QRZORDGVVKDOOEHFRQVLGHUHG
LIWKHVXEVWDQWLDOVWUXFWXUDOGDPDJHZDVFDXVHGE\
([WHQW RI UHSDLU IRU QRQFRPSOLDQW RU UHODWHG WR VQRZ ORDG HIIHFWV ([LVWLQJ JUDYLW\
EXLOGLQJV  ,I WKH HYDOXDWLRQ GRHV QRW HVWDEOLVK ORDGFDUU\LQJVWUXFWXUDOHOHPHQWVVKDOOEHSHUPLWWHG
FRPSOLDQFH RI WKH SUHGDPDJH EXLOGLQJ LQ WREHGHVLJQHGIRUOLYHORDGVDSSURYHGSULRUWRWKH
DFFRUGDQFHZLWK6HFWLRQWKHQWKHEXLOGLQJ GDPDJH,IWKHDSSURYHGOLYHORDGLVOHVVWKDQWKDW
VKDOO EH UHKDELOLWDWHG WR FRPSO\ ZLWK DSSOLFDEOH UHTXLUHGE\6HFWLRQRIWKH6%&WKHDUHD
SURYLVLRQV RI WKH 6%&  IRU ORDG FRPELQDWLRQV GHVLJQHGIRUWKHQRQFRQIRUPLQJOLYHORDGVKDOOEH
WKDWLQFOXGHZLQGRUVHLVPLFORDGV7KHZLQGORDGV SRVWHGZLWKSODFDUGVRIDSSURYHGGHVLJQLQGLFDWLQJ
IRUWKHUHSDLUVKDOO EH DVUHTXLUHG E\WKHEXLOGLQJ WKHDSSURYHGOLYHORDG1RQGDPDJHGJUDYLW\ORDG
FRGHLQHIIHFWDWWKHWLPHRIRULJLQDOFRQVWUXFWLRQ FDUU\LQJFRPSRQHQWVWKDWUHFHLYHGHDGOLYHRUVQRZ
XQOHVV WKH GDPDJH ZDV FDXVHG E\ ZLQG LQ ZKLFK ORDGVIURPUHKDELOLWDWHGFRPSRQHQWVVKDOODOVREH
FDVHWKHZLQGORDGVVKDOOEHDVUHTXLUHGE\WKH6%& UHKDELOLWDWHGRUVKRZQWRKDYHWKHFDSDFLW\WRFDUU\
(DUWKTXDNHORDGVIRUWKLVUHKDELOLWDWLRQGHVLJQ WKHGHVLJQORDGVRIWKHUHKDELOLWDWLRQGHVLJQ1HZ
VKDOO EH WKRVH UHTXLUHG IRU WKH GHVLJQ RI WKH SUH VWUXFWXUDO PHPEHUV DQG FRQQHFWLRQV UHTXLUHG E\
GDPDJH EXLOGLQJ EXW QRW OHVV WKDQ  SHUFHQW RI WKLV UHKDELOLWDWLRQ GHVLJQ VKDOO FRPSO\ ZLWK WKH
WKRVHSUHVFULEHGLQ6HFWLRQRIWKH 6%& GHWDLOLQJ SURYLVLRQV RI WKH 6%&  IRU QHZ
1HZVWUXFWXUDOPHPEHUVDQGFRQQHFWLRQVUHTXLUHG EXLOGLQJVRIVLPLODUVWUXFWXUHSXUSRVHDQGORFDWLRQ
E\WKLVUHKDELOLWDWLRQGHVLJQVKDOOFRPSO\ZLWKWKH

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

™ 6XEVWDQWLDO VWUXFWXUDO GDPDJH WR JUDYLW\ ORDG  /HVVWKDQVXEVWDQWLDOVWUXFWXUDOGDPDJH

FDUU\LQJHOHPHQWVVXFKDVFROXPQVRUEHDULQJ )RUGDPDJHOHVVWKDQVXEVWDQWLDOVWUXFWXUDOGDPDJH
ZDOOVPXVWEHUHSDLUHGVRWKDWWKHVHPHPEHUV UHSDLUVVKDOOEHDOORZHGWKDWUHVWRUHWKHEXLOGLQJWR
DUHDGHTXDWHWRUHVLVWWKHGHDGDQGOLYHORDGV LWVSUHGDPDJHVWDWH1HZVWUXFWXUDOPHPEHUVDQG
LQDFFRUGDQFHZLWKFXUUHQWFRGHUHTXLUHPHQWV
FRQQHFWLRQVXVHGIRUWKLVUHSDLUVKDOOFRPSO\ZLWK
DVPXVWRWKHUHOHPHQWVRIWKHORDGSDWK6QRZ
ORDGV PXVW DOVR EH LQFOXGHG ZKHUH WKH WKH GHWDLOLQJ SURYLVLRQV RI WKH 6%&  IRU QHZ
VXEVWDQWLDO GDPDJH LV DVVRFLDWHG ZLWK WKH EXLOGLQJVRIVLPLODUVWUXFWXUHSXUSRVHDQGORFDWLRQ
HIIHFWVRIVQRZORDG ™ )RU GDPDJH WKDW LV QRW GHHPHG WR EH
/DWHUDO IRUFHUHVLVWLQJ HOHPHQWV VXEVWDQWLDO VWUXFWXUDO GDPDJH UHSDLUV DUH
DOORZHG WKDW UHVWRUH WKH EXLOGLQJ WR LWV SUH
5HJDUGOHVV RI WKH OHYHO RI GDPDJH WR YHUWLFDO
GDPDJHGVWDWH7KLVLVFRQVLVWHQWZLWK6HFWLRQ
HOHPHQWV RI WKH ODWHUDO IRUFHUHVLVWLQJ V\VWHP LI  IRU WKH ZRUN DUHD PHWKRG 1HZ
VXEVWDQWLDO VWUXFWXUDO GDPDJH WR JUDYLW\ ORDG VWUXFWXUDO PHPEHUV DQG FRQQHFWLRQV XVHG IRU
FDUU\LQJFRPSRQHQWVZDVFDXVHGSULPDULO\E\ZLQG WKHVH UHSDLUV DUH VWLOO UHTXLUHG WR FRPSO\ ZLWK
RU HDUWKTXDNH HIIHFWV WKHQ WKH EXLOGLQJ VKDOO EH WKH GHWDLOLQJ SURYLVLRQV IRU QHZ EXLOGLQJV RI
HYDOXDWHGLQDFFRUGDQFHZLWK6HFWLRQDQG VLPLODUPDWHULDOVSXUSRVHDQGORFDWLRQ
LI QRQFRPSOLDQW UHKDELOLWDWHG LQ DFFRUGDQFH ZLWK
 )ORRG KD]DUG DUHDV  )RU EXLOGLQJV DQG
6HFWLRQ
VWUXFWXUHV LQ IORRG KD]DUG DUHDV HVWDEOLVKHG LQ
([FHSWLRQV 6HFWLRQRIWKH6%&RU6HFWLRQ5RI
WKH 6%&  DV DSSOLFDEOH DQ\ UHSDLU WKDW
 2QH DQG WZRIDPLO\ GZHOOLQJV QHHG QRW EH
FRQVWLWXWHV VXEVWDQWLDO LPSURYHPHQW RU UHSDLU RI
HYDOXDWHG RU UHKDELOLWDWHG IRU ORDG
VXEVWDQWLDO GDPDJH RI WKH H[LVWLQJ VWUXFWXUH VKDOO
FRPELQDWLRQVWKDWLQFOXGHHDUWKTXDNHHIIHFWV
FRPSO\ZLWKWKHIORRGGHVLJQUHTXLUHPHQWVIRUQHZ
 %XLOGLQJV DVVLJQHG WR 6HLVPLF 'HVLJQ
FRQVWUXFWLRQ DQG DOO DVSHFWV RI WKH H[LVWLQJ
&DWHJRU\ $ % RU & ZKRVH VXEVWDQWLDO
VWUXFWXUHVKDOOEHEURXJKWLQWRFRPSOLDQFHZLWKWKH
VWUXFWXUDO GDPDJH ZDV QRW FDXVHG E\
UHTXLUHPHQWVIRUQHZFRQVWUXFWLRQIRUIORRGGHVLJQ
HDUWKTXDNH QHHG QRW EH HYDOXDWHG RU
UHKDELOLWDWHG IRU ORDG FRPELQDWLRQV WKDW ™ )RU EXLOGLQJV DQG VWUXFWXUHV LQ IORRG KD]DUG
LQFOXGHHDUWKTXDNHHIIHFWV DUHDVHVWDEOLVKHGLQ6HFWLRQRIWKH6%&
 RU 6HFWLRQ 5 RI WKH 6%&  DV
™ ,Q GHWHUPLQLQJ WKH H[WHQW RI UHSDLUV WR WKHVH DSSOLFDEOH DQ\ UHSDLUV WKDW GR QRW FRQVWLWXWH
JUDYLW\ORDGFDUU\LQJHOHPHQWVWKDWDUHQRWSDUW VXEVWDQWLDOLPSURYHPHQWRUUHSDLURIVXEVWDQWLDO
RI WKH ODWHUDO IRUFHUHVLVWLQJ V\VWHP LW LV GDPDJH RI WKH H[LVWLQJ VWUXFWXUH DUH QRW
LPSRUWDQW WR GHWHUPLQH LI ZLQG RU HDUWKTXDNHV UHTXLUHG WR FRPSO\ ZLWK WKH IORRG GHVLJQ
KDYH FDXVHG WKH VWUXFWXUDO GDPDJH ,I WKH UHTXLUHPHQWVIRUQHZFRQVWUXFWLRQ
VXEVWDQWLDO VWUXFWXUDO GDPDJH LV FDXVHG E\ ™ 5HGXFWLRQ LQ H[SRVXUH WR IORRG KD]DUGV
ZLQGRUHDUWKTXDNHWKHODWHUDOV\VWHPPXVWEH LQFOXGLQJH[SRVXUHRIROGHUEXLOGLQJVLVRQHRI
FKHFNHGHYHQLIQRGDPDJHLVDSSDUHQW:KHUH WKH SXUSRVHV IRU UHJXODWLQJ IORRG SODLQ
WKLV LV WKH FDVH WKHQ WKH VWUXFWXUH PXVW EH GHYHORSPHQW'DPDJHGEXLOGLQJVRUVWUXFWXUHV
HYDOXDWHGLQDFFRUGDQFHZLWK6HFWLRQ WKDWDUHORFDWHGLQIORRGKD]DUGDUHDVDUHWREH
7KHUH DUH WZR H[FHSWLRQV WKDW DFNQRZOHGJH EURXJKWLQWRFRPSOLDQFHZLWKWKHIORRGUHVLVWDQW
WKDWDSSO\LQJWKLVUHTXLUHPHQWLQVRPHFDVHVLV SURYLVLRQV RI 6%&  6HFWLRQ  RU 6%&
H[FHVVLYH DQG PD\ KDYH WKH HIIHFW RI  6HFWLRQ 5 DV DSSOLFDEOH ZKHUH WKH
GLVFRXUDJLQJ RU GHOD\LQJ FHUWDLQ UHSDLUV E\ FRVWRIUHSDLUVQHFHVVDU\WRUHVWRUHGDPDJHWR
LPSRVLQJ WKH DGGLWLRQDO FRVWV RI VHLVPLF LWVSUHGDPDJHGFRQGLWLRQHYHQLIOHVVZRUNLV
XSJUDGH ([FHSWLRQ  H[HPSWV RQH DQG WZR DFWXDOO\ SURSRVHG H[FHHGV D FHUWDLQ YDOXH
IDPLO\GZHOOLQJVZKHUHWKHULVNWRWKHSXEOLFRI 6HH 6HFWLRQ  IRU WKH GHILQLWLRQV RI
SRRUHDUWKTXDNHSHUIRUPDQFHLVHVSHFLDOO\ORZ ³6XEVWDQWLDO LPSURYHPHQW´ DQG ³6XEVWDQWLDO
([FHSWLRQH[HPSWVEXLOGLQJVLQDUHDVRIORZ GDPDJH´
RUPRGHUDWHVHLVPLFLW\ZKHUHWKHGDPDJHZDV ™ 6HFWLRQUHTXLUHVWKHDSSOLFDQWWRVWDWHWKH
FDXVHGE\VRPHWKLQJRWKHUWKDQDQHDUWKTXDNH YDOXDWLRQRISURSRVHGZRUNZKLFKLVWRLQFOXGH
:KHUH HDUWKTXDNHV DUH UDUH LW VHUYHV QR WKHWRWDOYDOXHRIZRUNLQFOXGLQJPDWHULDOVDQG
VLJQLILFDQW SXEOLF SXUSRVH WR WULJJHU VHLVPLF ODERU,IWKHSURSRVHGZRUNZLOOEHSHUIRUPHGRQ
XSJUDGHV IROORZLQJ GDPDJH FDXVHG E\ ILUH EXLOGLQJV LQ IORRG KD]DUG DUHDV WKH EXLOGLQJ
FROOLVLRQZLQGDQGRWKHUHYHQWV%DVLFUHSDLU² RIILFLDO PXVW GHWHUPLQH ZKHWKHU WKH SURSRVHG
WKDW LV UHVWRULQJ WR WKH SUHGDPDJHG ZRUN FRQVWLWXWHV VXEVWDQWLDO LPSURYHPHQW RU
FRQGLWLRQ²LVVWLOOUHTXLUHG UHSDLURIVXEVWDQWLDOGDPDJH,IDSSOLFDEOHWKH
YDOXH RI ZRUN PXVW LQFOXGH HVWLPDWHV RI WKH

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

YDOXH RI WKH SURSHUW\ RZQHU¶V ODERU DQG WKH  )LUHHVFDSHVZHUHDQXQSOHDVDQWVLJKWDQGDQ
YDOXHRIGRQDWHGODERUDQGPDWHULDOV XQZDQWHGHOHPHQWLQWKHDUFKLWHFWXUDOGHVLJQ
™ 7R PDNH D GHWHUPLQDWLRQ DERXW ZKHWKHU
SURSRVHGUHSDLUVFRQVWLWXWHUHSDLURIVXEVWDQWLDO ™ 7KH XVH RI H[WHULRU ILUH HVFDSHV LV DOO EXW
GDPDJHWKHFRVWRIWKHSURSRVHGZRUNLVWREH REVROHWH H[FHSW IRU H[LVWLQJ EXLOGLQJV ZLWK D
FRPSDUHGWRWKHPDUNHWYDOXHRIWKHEXLOGLQJRU FOHDU GHILFLHQF\ LQ WKH PHDQV RI HJUHVV WKDW
VWUXFWXUHEHIRUHWKHZRUNLVVWDUWHG,QRUGHUWR FDQQRWEHUHDVRQDEO\UHFWLILHGLQRWKHUZD\V
GHWHUPLQH PDUNHW YDOXH WKH EXLOGLQJ RIILFLDO ™ 7KLV VHFWLRQ LQGLFDWHV WKDW ILUH HVFDSHV DUH
PD\ UHTXLUH WKH DSSOLFDQW WR SURYLGH DQ SHUPLWWHG RQO\ RQ H[LVWLQJ EXLOGLQJV 1HZ ILUH
DSSUDLVDO RU XVH RWKHU PHWKRGV DFFHSWDEOH WR HVFDSHVPD\EHLQVWDOOHGRQH[LVWLQJEXLOGLQJV
)(0$)RUDGGLWLRQDOJXLGDQFHVHH)(0$3 RQO\ ZKHUH H[WHULRU VWDLUV FDQQRW EH XVHG
ZKLFKDGYLVHVWKDWFRPPXQLWLHVZLWKPDQ\ 6HFWLRQ  DGGUHVVHV WKH ORFDWLRQ RI ILUH
EXLOGLQJVLQIORRGKD]DUGDUHDVEHFRPHIDPLOLDU HVFDSHV DQG 6HFWLRQ  DGGUHVVHV WKH
ZLWK VRIWZDUH GHYHORSHG WR KHOS PDNH FRQVWUXFWLRQ RI ILUH HVFDSHV 6HH DOVR WKH
VXEVWDQWLDO GDPDJH GHWHUPLQDWLRQV HVSHFLDOO\ UHTXLUHPHQWV IRU ILUH HVFDSHV LQ 6%& 
LQ WKH SRVWGLVDVWHU SHULRG )(0$ 3 6HFWLRQ1RWHWKDWWKHVHSURYLVLRQVDUH
6XEVWDQWLDO 'DPDJH (VWLPDWRU LQFOXGHV WKH VOLJKWO\GLIIHUHQWWKDQWKRVHRI6HFWLRQ
VRIWZDUHXVHU¶VPDQXDODQGZRUNERRN 1HZ EXLOGLQJV  )LUH HVFDSHV VKDOO QRW
FRQVWLWXWHDQ\SDUWRIWKHUHTXLUHGPHDQVRIHJUHVV
LQQHZEXLOGLQJV
6(&7,21),5((6&$3(6
™ %HFDXVH RI WKH LQKHUHQW KD]DUGV DQG ODFN RI
 :KHUH SHUPLWWHG  )LUH HVFDSHV VKDOO EH GHSHQGDELOLW\ RSHQ H[WHULRU ILUH HVFDSHV DUH
SHUPLWWHGRQO\DVSURYLGHGIRULQ6HFWLRQV QRWSHUPLWWHGDVSDUWRIWKHUHTXLUHGPHDQVRI
WKURXJK HJUHVVLQQHZFRQVWUXFWLRQ
™ 6HFWLRQV  WKURXJK  DGGUHVV WKH ([LVWLQJ ILUH HVFDSHV  ([LVWLQJ ILUH
FXUUHQWUHTXLUHPHQWVIRUWKHXVHRIH[WHULRUILUH HVFDSHV VKDOO FRQWLQXH WR EH DFFHSWHG DV D
HVFDSHV7KHLUXVHDQGIHDWXUHVDVGHILQHGLQ FRPSRQHQW LQ WKH PHDQV RI HJUHVV LQ H[LVWLQJ
WKLV VHFWLRQ VKRXOG QRW EH FRQIXVHG ZLWK WKH EXLOGLQJVRQO\
UHTXLUHPHQWV IRU H[WHULRU H[LW VWDLUZD\V DV
GHILQHGLQ6%&6HFWLRQ ™ ([WHULRU ILUH HVFDSHV LQ H[LVWLQJ EXLOGLQJV DUH
™ 7KHXVHRIH[WHULRUILUHHVFDSHVDVDPHDQVRI DFFHSWDEOH DV D FRPSRQHQW RI WKH UHTXLUHG
HJUHVV ZDV SRSXODU LQ EXLOGLQJ GHVLJQV RI WKH PHDQV RI HJUHVV EHFDXVH LQ PRVW FDVHV LW
SDVW 7KH\ ZHUH XVHG IRU HFRQRP\ RI ZRXOG EH SK\VLFDOO\ LPSUDFWLFDO DQG
FRQVWUXFWLRQDQGWR³VDYH´XVDEOHVSDFHLQWKH HFRQRPLFDOO\ SURKLELWLYH WR UHWURILW ROGHU
EXLOGLQJVWKH\VHUYHG%HLQJORFDWHGRXWVLGHWKH EXLOGLQJVZLWKLQWHULRURUH[WHULRUH[LWVWDLUZD\V
EXLOGLQJWKH\ZHUHDOVRFRQVLGHUHGVDIHUWKDQ WKDWFRPSO\ZLWKDOOWKHFRGH UHTXLUHPHQWVIRU
WKH XQHQFORVHG LQWHULRU H[LW VWDLUZD\V RI WKH QHZFRQVWUXFWLRQ
WLPH2YHUWKH\HDUVH[WHULRUILUHHVFDSHVORVW 1HZ ILUH HVFDSHV  1HZ ILUH HVFDSHV IRU
WKHLUDSSHDOIRUPDQ\UHDVRQV
H[LVWLQJ EXLOGLQJV VKDOO EH SHUPLWWHG RQO\ ZKHUH
 )LUHHVFDSHVZHUHQHYHUDQLQWHJUDOSDUWRIWKH H[WHULRUVWDLUZD\VFDQQRWEHXWLOL]HGGXHWRORWOLQHV
EXLOGLQJ¶V GHVLJQ WKH\ ZHUH D QHFHVVDU\ OLPLWLQJVWDLUZD\VL]HRUGXHWRWKHVLGHZDONVDOOH\V
DSSHQGDJH KXQJ IURP RU DWWDFKHG WR WKH RUURDGVDWJUDGHOHYHO1HZILUHHVFDSHVVKDOOQRW
EXLOGLQJZDOO LQFRUSRUDWHODGGHUVRUDFFHVVE\ZLQGRZV
 )LUH HVFDSHV ZHUH PRVW FRPPRQO\ ™ &RQWLQXLQJ FRUURVLRQ RI H[LVWLQJ H[WHULRU ILUH
FRQVWUXFWHGRIFDVWLURQRUVWHHOERWKRIZKLFK HVFDSHV DV ZHOO DV RWKHU IDFWRUV WKDW PD\
UHTXLUHG D KLJK GHJUHH RI PDLQWHQDQFH WR DIIHFWWKHVDIHW\RIWKHVWUXFWXUHVRIWHQPDNHV
SURWHFW WKH FRUURGLEOH PDWHULDOV IURP WKH WKH UHSODFHPHQW RI WKHVH ILUH HVFDSHV
HIIHFWVRIZHDWKHU QHFHVVDU\7KHEXLOGLQJRIILFLDOPD\GHWHUPLQH
 %HFDXVH ILUH HVFDSHV DUH ³RSHQ VWUXFWXUHV´ WKDWWKHPHDQVRIHJUHVVLQDQH[LVWLQJEXLOGLQJ
WKH\ DUH VXEMHFW WR LFLQJ GXULQJ WKH ZLQWHU LV XQVDIH UHTXLULQJ VRPH FRUUHFWLYH DFWLRQ
PRQWKV 7KLV PDNHV WKHP GDQJHURXV WR XVH ZKLFKPD\EHWKHLQVWDOODWLRQRIDQHZH[WHULRU
DQG LQ H[WUHPH FDVHV WKH\ FDQ EHFRPH ILUH HVFDSH 7KLV VHFWLRQ SHUPLWV QHZ H[WHULRU
FRPSOHWHO\XQXVDEOH ILUH HVFDSHV IRU H[LVWLQJ EXLOGLQJV ZKHUH
H[WHULRU VWDLUZD\V FRQIRUPLQJ WR WKH
 3HRSOHZLWKDIHDURIKHLJKWVFDQILQGH[WHULRU UHTXLUHPHQWVRI6%&6HFWLRQFDQQRW
ILUH HVFDSHV GLIILFXOW DQG VRPHWLPHV EHXVHGEHFDXVHRIORWOLQHVWKDWOLPLWVWDLUZD\
LPSRVVLEOHWRXVH

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

VL]HRUHQFURDFKPHQWVRQVLGHZDONVDOOH\VRU :DONZD\VDQGUDLOLQJVORFDWHGRYHURUVXSSRUWHGE\
URDGVDWJUDGHOHYHO FRPEXVWLEOHURRIVLQEXLOGLQJVRI7\SH,,,DQG,9
™ %HFDXVH LW ZDV WKH DFFHSWHG SUDFWLFH RI WKH FRQVWUXFWLRQDUH SHUPLWWHGWR EH RI ZRRG QRW OHVV
WLPHDFFHVVWRH[WHULRUILUHHVFDSHVZDVTXLWH WKDQQRPLQDOPPWKLFN
RIWHQ WKURXJK ZLQGRZV ORFDWHG LQ FRUULGRUV RU
LQGLYLGXDOGZHOOLQJXQLWVRURIILFHV7KLVSUDFWLFH ™ 7UDGLWLRQDOO\DQGW\SLFDOO\H[WHULRUILUHHVFDSHV
LVQRWSHUPLWWHGZKHQUHSODFHPHQWH[WHULRUILUH DUH FRQVWUXFWHG RI FDVW LURQ RU VWHHO DOWKRXJK
HVFDSHVDUHXVHG7KHEXLOGLQJPXVWEHDOWHUHG WKHFRGHGRHVSHUPLWH[WHULRUILUHHVFDSHVWREH
WRSURYLGHSURSHUH[LWDFFHVVWRWKHILUHHVFDSH FRQVWUXFWHGRIRWKHUQRQFRPEXVWLEOHPDWHULDOV
™ 7KHFRGHGRHVQRWSHUPLWWKHXVHRIODGGHUVDV 7KHXVHRIQRPLQDOPPZRRGLVSHUPLWWHGLQ
DFRPSRQHQWLQWKHPHDQVRIHJUHVVH[FHSWDV 7\SH9FRQVWUXFWLRQ1RPLQDOPPZRRGPD\
DOORZHG LQ WKH 6%&  IRU FRQWURO URRPV RU DOVR EH XVHG LQ 7\SH ,,, DQG ,9 FRQVWUXFWLRQ
HOHYDWHGIDFLOLW\REVHUYDWLRQURRPVIRU*URXS, ZKHQ WKH H[WHULRU ILUH HVFDSH LV VXSSRUWHG E\
 RFFXSDQFLHV WKHUHIRUH ODGGHUV FDQ QHLWKHU ZRRGFRQVWUXFWLRQSHUPLWWHGE\6%&7DEOH
EHXVHGDVDFRPSRQHQWSDUWRIDQH[WHULRUILUH 
HVFDSHQRUWRDFFHVVDQH[WHULRUILUHHVFDSH
 'LPHQVLRQV  6WDLUZD\V VKDOO EH DW OHDVW
/LPLWDWLRQV  )LUH HVFDSHV VKDOO FRPSO\ PPZLGHZLWKULVHUVQRWPRUHWKDQDQGWUHDGV
ZLWKWKLVVHFWLRQDQGVKDOOQRWFRQVWLWXWHPRUHWKDQ QRWOHVVWKDQPPDQGODQGLQJVDWWKHIRRWRI
SHUFHQWRIWKHUHTXLUHGQXPEHURIH[LWVQRUPRUH VWDLUZD\VQRWOHVVWKDQPZLGHE\PPORQJ
WKDQSHUFHQWRIWKHUHTXLUHGH[LWFDSDFLW\ ORFDWHGQRWPRUHWKDQPPEHORZWKHGRRU
™ )RU UHDVRQV RI RYHUDOO OLIH VDIHW\ H[WHULRU ILUH ™ 7KH 6%&¶V QRUPDO GLPHQVLRQVIRULQWHULRU
HVFDSHV PD\ EH XVHG DV D FRPSRQHQW RI WKH DQGH[WHULRUH[LWVWDLUZD\VXVHGLQWKHPHDQVRI
PHDQV RI HJUHVV RQO\ ZKHQ WKH WRWDO QXPEHU HJUHVV GR QRW DSSO\ WR H[WHULRU ILUH HVFDSHV
XVHG GRHV QRW H[FHHG RQHKDOI WKH UHTXLUHG 7KH GLPHQVLRQDO VWDQGDUG IRU H[WHULRU ILUH
QXPEHURIH[LWVDQGPRUHWKDQRQHKDOIWKHWRWDO HVFDSHV KDV EHHQ LQ SODFH IRU PDQ\ \HDUV
UHTXLUHGH[LWFDSDFLW\ WKXV PDQ\ H[WHULRU ILUH HVFDSHV LQ XVH ZHUH
GHVLJQHGWRFRPSO\ZLWKWKLVVWDQGDUG0DQ\RI
 /RFDWLRQ  :KHUH ORFDWHG RQ WKH IURQW RI WKHVHILUHHVFDSHVDUHLQVWDOOHGLQSODFHVZKHUH
WKH EXLOGLQJ DQG ZKHUH SURMHFWLQJ EH\RQG WKH LW ZRXOG EH GLIILFXOW DQG RIWHQ LPSRVVLEOH WR
EXLOGLQJOLQHWKH ORZHVWODQGLQJVKDOO EH QRW OHVV UHWURILW D QHZ ILUH HVFDSH LI D QHZ VHW RI
WKDQ  P RU PRUH WKDQ  P DERYH JUDGH DQG GLPHQVLRQDOVWDQGDUGVZHUHHPSOR\HG)RUWKLV
VKDOOEHHTXLSSHGZLWKDFRXQWHUEDODQFHGVWDLUZD\ UHDVRQLWLVMXGJHGDSSURSULDWHWRPDLQWDLQWKH
WR WKH VWUHHW ,Q DOOH\ZD\V DQG WKRURXJKIDUHV OHVV FXUUHQW VWDQGDUG 7KH PLQLPXP WUHDG ULVHU
WKDQ  P ZLGH WKH FOHDUDQFH XQGHU WKH ORZHVW VWDLUZLGWKDQGODQGLQJVL]HGLPHQVLRQVIRUILUH
ODQGLQJVKDOOEHQRWOHVVWKDQP HVFDSH FRQVWUXFWLRQ UHPDLQ XQFKDQJHG IURP
WKHSDVW
™ ,QWKHSDVWH[WHULRUILUHHVFDSHVZHUHDOORZHG
WRSURMHFWEH\RQGWKHSURSHUW\OLQHDQGH[WHQG  2SHQLQJSURWHFWLYHV'RRUVDQGZLQGRZV
RYHU VLGHZDONV DOOH\ZD\V DQG URDGV :KHUH DORQJ WKH ILUH HVFDSH VKDOO EH SURWHFWHG ZLWK 
VXFKFRQGLWLRQVDUHVWLOODFFHSWHGE\WKHFRGH KRXURSHQLQJSURWHFWLYHV
VHH 6HFWLRQV  DQG  WKH
™ 6DIH H[LW DFFHVV DQG H[LWV DUH UHTXLUHG IRU
FOHDUDQFHWRWKHORZHVWODQGLQJIURPJUDGHOHYHO
RFFXSDQWV XVLQJ DQ H[WHULRU ILUH HVFDSH DV D
PXVWEHDWOHDVWPDQGQRWPRUHWKDQ
PHDQVRIHJUHVV'RRUDQGZLQGRZRSHQLQJVLQ
PIRUH[WHULRUILUHHVFDSHVORFDWHGLQIURQWRIWKH
H[WHULRUZDOOVDGMDFHQWWRDQGDORQJWKHSDWKRI
EXLOGLQJ ,Q DOOH\ZD\V DQG WKRURXJKIDUHV OHVV
WUDYHO RI WKH H[WHULRU ILUH HVFDSH PXVW EH
WKDQPZLGHWKHFOHDUDQFHXQGHUWKHORZHVW
SURWHFWHG IURP WKH LQWHULRU RI WKH EXLOGLQJ ZLWK
ODQGLQJ PXVW EH DW OHDVW  P 7R IDFLOLWDWH
QRW OHVV WKDQ D KRXU SURWHFWLYH 7KLV LV
WKHVH FOHDUDQFH UHTXLUHPHQWV H[WHULRU ILUH
VLPLODU WR WKH UHTXLUHPHQWV IRU SURWHFWLRQ RI
HVFDSHV DUH XVXDOO\ HTXLSSHG ZLWK D
RSHQLQJVRQLQWHULRUH[LWVWDLUZD\VDQGUDPSVLQ
FRXQWHUEDODQFHG VWDLUZD\ WKDW UHWUDFWV WR D
6%&  6HFWLRQ  DQG H[WHULRU H[LW
KRUL]RQWDOSRVLWLRQZKHQWKHILUHHVFDSHLVQRW
VWDLUZD\V DQG UDPSV LQ 6%&  6HFWLRQ
LQXVH
 :KHUH PRUHUHVWULFWLYH RSHQLQJ
 &RQVWUXFWLRQ  7KH ILUH HVFDSH VKDOO EH SURWHFWLYHV DUH UHTXLUHG E\ RWKHU VHFWLRQV
GHVLJQHGWRVXSSRUWDOLYHORDGRIN3DDQGVKDOO HOVHZKHUH LQ WKH FRGH WKH PRUHUHVWULFWLYH
EH FRQVWUXFWHG RI VWHHO RU RWKHU DSSURYHG SURWHFWLRQ PXVW EH XVHG 7KH KRXU
QRQFRPEXVWLEOHPDWHULDOV)LUHHVFDSHVFRQVWUXFWHG UHTXLUHPHQW IRU WKH H[WHULRU ILUH HVFDSH LV WKH
PLQLPXP ZKHQ QR RWKHU FRQVLGHUDWLRQV DUH
RI ZRRG QRW OHVV WKDQ QRPLQDO  PP WKLFN DUH
SHUPLWWHG RQ EXLOGLQJV RI 7\SH 9 FRQVWUXFWLRQ

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

SUHVHQWVHH6%&7DEOHV IDOO SUHYHQWLRQ GHYLFHV WKDW FRPSO\ ZLWK

DQG $670)
 2SHUDEOH ZLQGRZV ZLWK RSHQLQJV WKDW DUH
SURYLGHGZLWKZLQGRZIDOOSUHYHQWLRQGHYLFHV
6(&7,21*/$665(3/$&(0(17 WKDWFRPSO\ZLWK$670)
$1'5(3/$&(0(17:,1'2:6 ™ 7KLV VHFWLRQ UHTXLUHV WKDW ZKHQ ZLQGRZV DUH
 5HSODFHPHQW JODVV  7KH LQVWDOODWLRQ RU UHSODFHG ZLQGRZ RSHQLQJ FRQWURO GHYLFHV EH
UHSODFHPHQWRI JODVV VKDOOEH DV UHTXLUHGIRU QHZ SURYLGHG WR SURWHFW FKLOGUHQ IURP IDOOV 7KHUH
LQVWDOODWLRQV DUHVHYHUDOFRQGLWLRQVWKDWPXVWEHPHWEHIRUH
WKLV VHFWLRQ EHFRPHV DSSOLFDEOH 7KH ILUVW
™ 7KHWHFKQLFDO SURYLVLRQVIRUJODVVDQG JOD]LQJ FRQGLWLRQLVZKHWKHURUQRWWKHZLQGRZLVHYHQ
DUH GHWDLOHG LQ 6%&  &KDSWHU  $OO RSHUDEOH ,I WKH ZLQGRZ LV QRW RSHUDEOH WKH
WHFKQLFDO UHTXLUHPHQWV RI WKH FRGH IRU JODVV FRQFHUQ IRU VDIHW\ IURP IDOOLQJ LV QRW SUHVHQW
DQGJOD]LQJWKDWDSSO\WRQHZFRQVWUXFWLRQDOVR 7KH VHFRQG FRQGLWLRQ UHODWHV WR ZKHWKHU WKH
DSSO\ WR DOO DGGLWLRQV RU DOWHUDWLRQV WR H[LVWLQJ HQWLUH ZLQGRZ LV EHLQJ UHSODFHG LQFOXGLQJ WKH
EXLOGLQJV 7KHUH DUH QR H[FHSWLRQV WR WKLV VDVKDQGIUDPH,ILWLVVLPSO\DUHSDLURIDSDQH
UHTXLUHPHQW :KHQ JOD]LQJ LQ DQ H[LVWLQJ RI JODVV WKH UHTXLUHPHQW ZRXOG QRW EH
EXLOGLQJ LV UHSODFHG RU UHORFDWHG ZLWKLQ WKH DSSOLFDEOH ,WHP  DGGUHVVHV WKH VSHFLILF
VDPH EXLOGLQJ LW PXVW FRPSO\ ZLWK FXUUHQW ORFDWLRQ RI WKH RSHQLQJ RQ WKH LQVLGH RI WKH
VWDQGDUGV EXLOGLQJ >VHH &RPPHQWDU\ )LJXUH  @
,WHP  IRFXVHV WKHVH SURYLVLRQV RQ QRW RQO\
 5HSODFHPHQW ZLQGRZ RSHQLQJ FRQWURO
RSHUDEOH ZLQGRZV EXW DOVR ZLQGRZV ZLWK
GHYLFHV,Q*URXS5RU5EXLOGLQJVFRQWDLQLQJ RSHQLQJV WKURXJK ZKLFK D FKLOG FRXOG DFWXDOO\
GZHOOLQJ XQLWV ZLQGRZ RSHQLQJ FRQWURO GHYLFHV ILW7KLVFULWHULRQRIDPPGLDPHWHUVSKHUH
FRPSO\LQJ ZLWK $670 )  VKDOO EH LQVWDOOHG LVXVHGZLWKJXDUGVLQ6%&&KDSWHUWR
ZKHUHDQH[LVWLQJZLQGRZLVUHSODFHGDQGZKHUHDOO DYRLG FKLOGUHQ ILWWLQJ WKURXJK )LQDOO\ ,WHP 
RIWKHIROORZLQJDSSO\WRWKHUHSODFHPHQWZLQGRZ DGGUHVVHVZKHWKHUWKHZLQGRZLVKLJKHQRXJK
IURPWKHJURXQGWREHRIFRQFHUQIRULQMXU\IURP
 7KHZLQGRZLVRSHUDEOH IDOOLQJ>VHH&RPPHQWDU\)LJXUH@7KLV
 7KH ZLQGRZ UHSODFHPHQW LQFOXGHV VHFWLRQDSSOLHVWRWKHIROORZLQJRFFXSDQFLHV
UHSODFHPHQWRIWKHVDVKDQGWKHIUDPH x *URXS 5 RFFXSDQFLHV FRQWDLQLQJ GZHOOLQJ
 7KHWRSRIWKHVLOORIWKHZLQGRZRSHQLQJLVDW XQLWV
DKHLJKWOHVVWKDQPPDERYHWKHILQLVKHG x *URXS 5 RFFXSDQFLHV FRQWDLQLQJ GZHOOLQJ
IORRU XQLWV
 7KH ZLQGRZ ZLOO SHUPLW RSHQLQJV WKDW ZLOO
DOORZSDVVDJHRI DPPGLDPHWHUVSKHUH ™ 1RWHWKDWWKHZRUNDUHDPHWKRGDOVRDGGUHVVHV
RQH DQG WZRIDPLO\ GZHOOLQJV 7KH FRQWURO
ZKHQ WKH ZLQGRZ LV LQ LWV ODUJHVW RSHQHG
GHYLFHFDQQRWUHGXFHWROHVVWKDQWKDWUHTXLUHG
SRVLWLRQDQG LQ6%&6HFWLRQ6HFWLRQDOVR
 7KHYHUWLFDOGLVWDQFHIURPWKHWRSRIWKHVLOORI DGGUHVVHVWKLVLVVXHIRUWKHZRUNDUHDPHWKRG
WKHZLQGRZRSHQLQJWRWKHILQLVKHGJUDGHRU 1RWHWKDWWKHILJXUHVDUHORFDWHGLQ6HFWLRQ
RWKHU VXUIDFH EHORZ RQ WKH H[WHULRU RI WKH DQGVLPSO\UHIHUHQFHGLQWKLVVHFWLRQ
EXLOGLQJLVJUHDWHUWKDQP
 5HSODFHPHQWZLQGRZHPHUJHQF\HVFDSH
™ 7KH ZLQGRZ RSHQLQJ FRQWURO GHYLFH DIWHU DQGUHVFXHRSHQLQJV:KHUHZLQGRZVDUHUHTXLUHG
RSHUDWLRQWRUHOHDVHWKHFRQWUROGHYLFHDOORZLQJ WRSURYLGHHPHUJHQF\HVFDSHDQGUHVFXHRSHQLQJV
WKH ZLQGRZWRIXOO\RSHQVKDOO QRWUHGXFHWKH LQ *URXS 5 DQG 5 RFFXSDQFLHV UHSODFHPHQW
PLQLPXPQHWFOHDURSHQLQJDUHDRIWKHZLQGRZ
ZLQGRZVVKDOOEHH[HPSWIURPWKHUHTXLUHPHQWVRI
XQLW WR OHVV WKDQ WKH DUHD UHTXLUHG E\ 6HFWLRQ
RIWKH6%& 6HFWLRQV   DQG  6%& 
SURYLGHG WKH UHSODFHPHQW ZLQGRZ PHHWV WKH
([FHSWLRQV IROORZLQJFRQGLWLRQV
 2SHUDEOHZLQGRZVZKHUHWKHWRSRIWKHVLOORI 
WKHZLQGRZRSHQLQJLVORFDWHGPRUHWKDQ  7KH UHSODFHPHQW ZLQGRZ LV WKH
P DERYH WKH ILQLVKHG JUDGH RU RWKHU VXUIDFH PDQXIDFWXUHU¶VODUJHVWVWDQGDUGVL]HZLQGRZ
EHORZRQWKHH[WHULRURIWKHURRPVSDFHRU WKDW ZLOO ILW ZLWKLQ WKH H[LVWLQJ IUDPH RU
EXLOGLQJDQGWKDWDUHSURYLGHGZLWKZLQGRZ H[LVWLQJ URXJK RSHQLQJ 7KH UHSODFHPHQW
ZLQGRZVKDOOEHSHUPLWWHGWREHRIWKHVDPH
RSHUDWLQJ VW\OH DV WKH H[LVWLQJ ZLQGRZ RU D

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

VW\OH WKDW SURYLGHV IRU DQ HTXDO RU JUHDWHU ([FHSWLRQ  7KH EXLOGLQJ QHHG QRW EH PDGH WR
ZLQGRZ RSHQLQJ DUHD WKDQ WKH H[LVWLQJ FRPSO\ ZLWK WKH VHLVPLF UHTXLUHPHQWV IRU D QHZ
ZLQGRZ VWUXFWXUHXQOHVVUHTXLUHGE\6HFWLRQ
 7KHUHSODFHPHQWRIWKHZLQGRZLVQRWSDUWRI ™ $FKDQJHRIRFFXSDQF\LQDQH[LVWLQJVWUXFWXUH
DFKDQJHRIRFFXSDQF\ PD\FKDQJHWKHOHYHORILQKHUHQWKD]DUGVWKDW
™ 7KLV VHFWLRQ IRFXVHV RQ KRZ WR DGGUHVV WKH WKHFRGHZDVLQLWLDOO\LQWHQGHGWRDGGUHVV
UHSODFHPHQW RI ZLQGRZV LQWHQGHG WR EH ™ 5HJDUGOHVV RI ZKHWKHU WKH FKDQJH LV WR DQ
HPHUJHQF\HVFDSHDQGUHVFXHRSHQLQJV0RUH RFFXSDQF\ FRQVLGHUHG WR EH PRUH RU OHVV
VSHFLILFDOO\*URXS5DQG5RFFXSDQFLHVLQ KD]DUGRXV WKLV VHFWLRQ DSSOLHV WKH SURYLVLRQV
QHZ FRQVWUXFWLRQ UHTXLUH VSHFLILFDOO\ VL]HG RIWKHFRGHIRUQHZFRQVWUXFWLRQWRDQH[LVWLQJ
ZLQGRZV IRU HVFDSH DQG UHVFXH IRU FHUWDLQ VWUXFWXUHKDYLQJDQHZRFFXSDQF\7KLVLVGRQH
ZLQGRZV LQ WKHVH VWUXFWXUHV ,Q H[LVWLQJ VR WKDW WKH DSSOLFDEOH FRGH UHTXLUHPHQWV
EXLOGLQJV PHHWLQJ WKHVH UHTXLUHPHQWV FDQ EH DGHTXDWHO\DGGUHVVWKHVSHFLILFKD]DUGVRIWKH
GLIILFXOW 7KLV VHFWLRQ SURYLGHV WKH QHFHVVDU\ QHZ RFFXSDQF\ )RU H[DPSOH D FKDQJH IURP
IOH[LELOLW\WRWKHVH H[LVWLQJ EXLOGLQJVWRSURYLGH DQH[LVWLQJPHUFDQWLOHRFFXSDQF\WRDEXVLQHVV
WKHODUJHVWZLQGRZWKDWFDQILWLQWRWKHFXUUHQW RFFXSDQF\ UHQGHUV DOO *URXS % SURYLVLRQV
RSHQLQJ ZLWKRXW UHTXLULQJ IXOO FRPSOLDQFH ZLWK DSSOLFDEOHWRDOOSRUWLRQVRIWKHVWUXFWXUHZKHUH
WKH6%&7KHUHDUHWKUHHFULWHULDWKDWPXVW WKHRFFXSDQF\KDVFKDQJHG
EHPHW7KHILUVWLVWKDWWKHZLQGRZLVWKHODUJHVW ™ 7KLVVHFWLRQLVRQHRIWKHPRVWIUHTXHQWO\XVHG
VL]H WKH PDQXIDFWXUHU FDQ SURYLGH IRU WKDW SURYLVLRQVLQWKHFRGHIRUDSSOLFDWLRQWRH[LVWLQJ
RSHQLQJWKHH[LVWLQJIUDPHRUURXJKRSHQLQJ VWUXFWXUHVVLQFHWKHRFFXSDQF\LQDEXLOGLQJRU
7KHVHFRQGDVSHFWLVIRFXVHGRQWKHRSHUDWLQJ VWUXFWXUHLVVXEMHFWWRFKDQJHGXULQJWKHOLIHRI
VW\OH RI WKH H[LVWLQJ ZLQGRZ ,W LV SHUPLWWHG WR WKHEXLOGLQJ
UHPDLQWKHVDPHEXWQHHGVWRSURYLGHHTXDORU ™ 1RWH WKDW WKLV VHFWLRQ GRHV SURYLGH VRPH
JUHDWHURSHQLQJDUHD)LQDOO\WKLVDOORZDQFHLV IOH[LELOLW\ WR WKRVH EXLOGLQJV ZKHUH WKH FKDQJH
QRWSHUPLWWHGLIWKHVHZLQGRZVDUHDVVRFLDWHG RIRFFXSDQF\LVWRDOHVVKD]DUGRXVXVH7KLV
ZLWKDFKDQJHRIRFFXSDQF\ UHTXLUHVVRPHWHFKQLFDOMXGJHPHQWDVWRZKDW
™ 7KLV VHFWLRQ DOVR SURYLGHV SHUPLVVLRQ IRU WKH LV FRQVLGHUHG OHVV KD]DUGRXV &KDSWHU 
XVH RI ZLQGRZ RSHQLQJ FRQWURO GHYLFHV DV GHDOLQJZLWKFKDQJHRIRFFXSDQF\LQWKHZRUN
UHTXLUHGLQ6HFWLRQ7KHIRFXVRI6HFWLRQ DUHD PHWKRG PRUH VSHFLILFDOO\ UDQNV WKHVH
LVRQ IDOOVDIHW\ZKHUHDVWKLVVHFWLRQLV ULVNV ZKHQ DGGUHVVLQJ FKDQJH RI RFFXSDQF\
IRFXVHGRQHPHUJHQF\HVFDSH7KLVSURYLVLRQ FODVVLILFDWLRQUHTXLUHPHQWV
DYRLGVFRQIOLFWEHWZHHQWKHWZRUHTXLUHPHQWV ™ 7KH H[FHSWLRQ FODULILHV WKDW VHLVPLF XSJUDGHV
™ 6HFWLRQDOVRDGGUHVVHVWKLVLVVXHIRUWKH DUH RQO\ QHFHVVDU\ DV UHTXLUHG E\ 6HFWLRQ
ZRUN DUHD PHWKRG 1RWH WKDW WKH ILJXUHV DUH  6HFWLRQ  DOVR IRFXVHV RQ WKRVH
ORFDWHGLQ6HFWLRQDQGVLPSO\UHIHUHQFHGLQ FKDQJHVRIRFFXSDQF\WKDWDUHWRDKLJKHUULVN
WKLVVHFWLRQ FDWHJRU\
&KDQJHLQWKHFKDUDFWHURIXVH$FKDQJH
LQ RFFXSDQF\ ZLWK QR FKDQJH RI RFFXSDQF\
6(&7,21&+$1*(2) FODVVLILFDWLRQVKDOOQRWEHPDGHWRDQ\VWUXFWXUHWKDW
2&&83$1&< ZLOOVXEMHFWWKHVWUXFWXUHWRDQ\VSHFLDOSURYLVLRQV
 &RQIRUPDQFH1RFKDQJHVKDOOEHPDGH RI WKH DSSOLFDEOH &RGHV ZLWKRXW DSSURYDO RI WKH
LQWKHXVHRURFFXSDQF\RIDQ\EXLOGLQJWKDWZRXOG EXLOGLQJ RIILFLDO &RPSOLDQFH VKDOO EH RQO\ DV
SODFHWKHEXLOGLQJLQDGLIIHUHQWGLYLVLRQRIWKHVDPH QHFHVVDU\WRPHHWWKHVSHFLILFSURYLVLRQVDQGLVQRW
JURXS RI RFFXSDQF\ RU LQ D GLIIHUHQW JURXS RI LQWHQGHG WR UHTXLUH WKH HQWLUH EXLOGLQJ EH EURXJKW
RFFXSDQFLHV XQOHVV VXFK EXLOGLQJ LV PDGH WR LQWRFRPSOLDQFH
FRPSO\ZLWKWKHUHTXLUHPHQWVRI6%&IRUVXFK ™ 7KLV VHFWLRQ IRFXVHV RQ EXLOGLQJV ZKHUH WKH
GLYLVLRQ RU JURXS RI RFFXSDQF\ 6XEMHFW WR WKH RFFXSDQF\ FODVVLILFDWLRQ KDV QRW FKDQJHG EXW
DSSURYDO RI WKH EXLOGLQJ RIILFLDO WKH XVH RU LWV XVH KDV FKDQJHG VXFK WKDW VSHFLDO XVH
RFFXSDQF\RIH[LVWLQJEXLOGLQJVVKDOOEHSHUPLWWHG UHTXLUHPHQWVDSSO\)RUH[DPSOHWKH EXLOGLQJ
WR EH FKDQJHG DQG WKH EXLOGLQJ LV DOORZHG WR EH LV FODVVLILHG DV D *URXS % RIILFH EXLOGLQJ DQG
RFFXSLHG IRU SXUSRVHV LQ RWKHU JURXSV ZLWKRXW QRZLVEHLQJFRQYHUWHGWRDQDPEXODWRU\FDUH
IDFLOLW\ $PEXODWRU\FDUH IDFLOLWLHV DUH*URXS %
FRQIRUPLQJWRDOOWKHUHTXLUHPHQWVRIWKH6%&
RFFXSDQFLHVKRZHYHUWKH\DOVRKDYHVSHFLDO
IRUWKRVHJURXSVSURYLGHGWKHQHZRUSURSRVHGXVH UHTXLUHPHQWVWKDWPXVW EHPHWWRDGGUHVVWKH
LVOHVVKD]DUGRXVEDVHGRQOLIHDQGILUHULVNWKDQ ULVNV IRXQG LQ VXFK IDFLOLWLHV 7KLV VHFWLRQ
WKHH[LVWLQJXVH

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

SURYLGHVWKHDXWKRULW\WRWKHEXLOGLQJRIILFLDOWR ([FHSWLRQV
DGGUHVVWKHVHVLWXDWLRQV
 6SHFLILF VHLVPLF GHWDLOLQJ SURYLVLRQV RI
 &HUWLILFDWHRIRFFXSDQF\$FHUWLILFDWHRI 6HFWLRQRI6%&IRUDQHZVWUXFWXUH
RFFXSDQF\ VKDOO EH LVVXHG E\ ORFDO DXWKRUL]HG VKDOO QRW EH UHTXLUHG WR EH PHW ZKHUH WKH
DJHQF\ ZKHUH LW KDV EHHQ GHWHUPLQHG WKDW WKH VHLVPLF SHUIRUPDQFH LV VKRZQ WR EH
UHTXLUHPHQWVIRUWKHQHZRFFXSDQF\FODVVLILFDWLRQ HTXLYDOHQW WR WKDW RI D QHZ VWUXFWXUH $
KDYHEHHQPHW GHPRQVWUDWLRQ RI HTXLYDOHQFH VKDOO FRQVLGHU
™ $QH[LVWLQJEXLOGLQJWKDWKDVEHHQFODVVLILHGLQWR WKHUHJXODULW\RYHUVWUHQJWKUHGXQGDQF\DQG
D QHZ RFFXSDQF\ JURXS PXVW UHFHLYH D GXFWLOLW\RIWKHVWUXFWXUH
FHUWLILFDWH RI RFFXSDQF\ EHIRUH WHQDQF\ 7KH  :KHQ D FKDQJH RI XVH UHVXOWV LQ D VWUXFWXUH
FRGH UHTXLUHPHQWV IRU RQH RFFXSDQF\ JURXS EHLQJUHFODVVLILHGIURPRFFXSDQF\&DWHJRU\,
DUHQRWDOZD\VWKHVDPHDVWKRVHIRUWKHQHZ RU,,WR5LVN&DWHJRU\,,,DQGWKHVWUXFWXUHLV
RFFXSDQF\JURXS7KHQHZRFFXSDQF\PXVWEH ORFDWHGLQDVHLVPLFPDSDUHDZKHUH6'6LV
LQVSHFWHGWRYHULI\WKDWDOOWKHDSSOLFDEOHFRGH OHVV WKDQ  FRPSOLDQFH ZLWK VHLVPLF
UHTXLUHPHQWVKDYHEHHQPHW
UHTXLUHPHQWVRI6HFWLRQRI6%&LV
 6WDLUZD\V$QH[LVWLQJVWDLUZD\VKDOOQRW QRWUHTXLUHG
EH UHTXLUHG WR FRPSO\ ZLWK WKH UHTXLUHPHQWV RI ™ $QH[LVWLQJEXLOGLQJWKDWXQGHUJRHVDFKDQJHRI
6HFWLRQRI6%&ZKHUHWKHH[LVWLQJVSDFH XVHDQGRFFXSDQF\WKDWSODFHVWKHEXLOGLQJLQD
DQGFRQVWUXFWLRQGRHVQRWDOORZDUHGXFWLRQLQSLWFK KLJKHU ULVN FDWHJRU\ PXVW EH HYDOXDWHG IRU LWV
RUVORSH VHLVPLFUHVLVWDQFH)RUWKLVSURYLVLRQWKHFRGH
LVUHIHUULQJWRULVNFDWHJRULHVOLVWHGLQ6%&
™ $VWDLUZD\LQDQH[LVWLQJEXLOGLQJGRHVQRWKDYH
7DEOHZKLFKPXVWEHXVHGWRGHWHUPLQH
WREHPRGLILHGWRFRPSO\ZLWKWKHGLPHQVLRQDO
ZKHWKHU DQ H[LVWLQJ EXLOGLQJ VKRXOG EH
SURYLVLRQVIRUZLGWKWUHDGDQGULVHUGLPHQVLRQ
UHFODVVLILHG WR D KLJKHU ULVN FDWHJRU\ ,W LV
RU ODQGLQJ VL]H IRU QHZ VWDLUZD\ FRQVWUXFWLRQ
LPSRUWDQW WKDW DQ H[LVWLQJ EXLOGLQJ WKDW
7KLV SURYLVLRQ LV IRU WKH GHVLJQ RI D SDUWLFXODU
SUHYLRXVO\ FRQWDLQHG RUGLQDU\ XVHV DQG
VWDLUZD\ DQG LV DLPHG DW DGGUHVVLQJ WKDW
RFFXSDQFLHVPXVWEHDEOHWRPHHWFXUUHQWFRGH
H[LVWLQJ VWDLUZD\ RQO\ 7KLV VHFWLRQ ZKLFK LV
UHTXLUHPHQWVUHODWLYHWRVHLVPLFORDGLQJLILWZLOO
HVVHQWLDOO\ DQ H[FHSWLRQ LV QRW LQWHQGHG WR
EHXVHGDVDQ³HVVHQWLDOIDFLOLW\´7KLVVHFWLRQ
HOLPLQDWHDQ\RIWKHRWKHUWHFKQLFDOSURYLVLRQV
VSHFLILFDOO\DOORZVWKHXVHRI$6&(XVLQJD
WKDWPLJKWDSSO\WRDQ RFFXSDQF\JURXSVXFK
7LHUSURFHGXUHDQGWKHWZROHYHOSHUIRUPDQFH
DVPHDQVRIHJUHVVH[LWFDSDFLW\HWF
REMHFWLYHVRI6HFWLRQ7KHDSSOLFDWLRQ
™ )RUH[DPSOHZKHQDEXLOGLQJLVDOWHUHGRUWKHUH
RI WKLV SURFHGXUH LV DOVR EDVHG RQ WKH ULVN
LVDFKDQJHRIWHQDQWWKDWUHVXOWVLQDFKDQJHLQ
FDWHJRU\ RI WKH VWUXFWXUH 7KLV DOORZDQFH
RFFXSDQF\WKHH[LVWLQJVWDLUZD\LVSHUPLWWHGWR
SURYLGHV PRUH IOH[LELOLW\ IRU H[LVWLQJ EXLOGLQJV
UHPDLQ DV LW ZDV SULRU WR WKH DOWHUDWLRQ RU
$6&(  LV VSHFLILFDOO\ IRFXVHG RQ WKH
FKDQJH RI RFFXSDQF\ 7KH PHDQV RI HJUHVV
HYDOXDWLRQ DQG UHKDELOLWDWLRQ RI H[LVWLQJ
FDSDFLW\ KRZHYHU PXVW FRPSO\ ZLWK WKH
VWUXFWXUHV 6HH WKH FRPPHQWDU\ WR 6HFWLRQ
UHTXLUHPHQWV IRU WKH QHZ RFFXSDQF\ 7KH
IRUPRUHGLVFXVVLRQRQWKHRULJLQVDQG
FDSDFLW\ PD\ QRW EH OHVVHQHG WR PDWFK WKH
DSSOLFDWLRQRIWKHVWDQGDUG
H[LVWLQJVWDLUZD\LILWLVQRWVXIILFLHQWWRSURYLGH
™ :LWKRXW([FHSWLRQLWZRXOGEHLPSRVVLEOHLQ
WKHFDSDFLW\UHTXLUHGE\WKHQHZRFFXSDQF\$Q
PDQ\ LQVWDQFHV WR PDNH DQ H[LVWLQJ VWUXFWXUH
DGGLWLRQDOVWDLUZD\RUDQRWKHUDSSURYHGPHDQV
FRPSO\ZLWKWKHVHLVPLFUHTXLUHPHQWVIRUDQHZ
RIHJUHVVPXVWEHSURYLGHGWRFRPSO\ZLWKWKH
VWUXFWXUH([FHSWLRQSURYLGHVJXLGDQFHIRUWKH
PHDQV RI HJUHVV UHTXLUHPHQWV IRU WKH QHZ
EXLOGLQJRIILFLDODQGGHVLJQHURIDUHDVWKDWQHHG
RFFXSDQF\DVLQGLFDWHGLQ&KDSWHU
WR EH LQYHVWLJDWHG ZKHQ FRPSOLDQFH ZLWK WKH
 6WUXFWXUDO:KHQDFKDQJHRIRFFXSDQF\ VHLVPLF UHTXLUHPHQWV VHW IRUWK LQ WKH FRGH
UHVXOWVLQDVWUXFWXUHEHLQJUHFODVVLILHGWRDKLJKHU FDQQRW EH DFFRPSOLVKHG LQ D WUDGLWLRQDO
ULVN FDWHJRU\ WKH VWUXFWXUH VKDOO FRQIRUP WR WKH PDQQHU
VHLVPLFUHTXLUHPHQWVIRUDQHZVWUXFWXUHRIDKLJKHU ™ ([FHSWLRQ  KDV LWV RULJLQV LQ 6%&  7KH
SXUSRVH LV WR SHUPLW D FKDQJH IURP 5LVN
ULVN FDWHJRU\ )RU WKH SXUSRVHV RI WKLV VHFWLRQ
&DWHJRU\ , RU ,, WR 5LVN &DWHJRU\ ,,, IRU
FRPSOLDQFHZLWK$6&(XVLQJD7LHUSURFHGXUH VWUXFWXUHV VXEMHFWHG WR ORZ HDUWKTXDNH
DQG WZROHYHO SHUIRUPDQFH REMHFWLYH LQ 7DEOH DFFHOHUDWLRQVZLWKRXWPHHWLQJWKHUHTXLUHPHQWV
IRUWKHDSSOLFDEOHULVNFDWHJRU\VKDOOEH IRUDQHZVWUXFWXUH
GHHPHGWRPHHWWKHUHTXLUHPHQWVRI6HFWLRQ
RI6%& 

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

6(&7,21+,6725,&%8,/',1*6  'HWHUPLQHG E\ DXWKRUL]HG 6&7+ DV

FRQWULEXWLQJWRWKHKLVWRULFDOVLJQLILFDQFHRID
 +LVWRULFEXLOGLQJV7KHSURYLVLRQVRIWKLV UHJLVWHUHG KLVWRULF GLVWULFW RU D GLVWULFW
FRGH WKDW UHTXLUH LPSURYHPHQWV UHODWLYH WR D SUHOLPLQDULO\ GHWHUPLQHG WR TXDOLI\ DV DQ
EXLOGLQJ¶V H[LVWLQJ FRQGLWLRQ RU LQ WKH FDVH RI KLVWRULFGLVWULFWRU
UHSDLUV WKDW UHTXLUH LPSURYHPHQWV UHODWLYH WR D  'HVLJQDWHGDVKLVWRULFXQGHUD6&7+SURJUDP
EXLOGLQJ¶V SUHGDPDJH FRQGLWLRQ VKDOO QRW EH WKDWLVDSSURYHGE\DXWKRUL]HGORFDOUHJLVWHURI
PDQGDWRU\IRUKLVWRULFEXLOGLQJVXQOHVVVSHFLILFDOO\ KLVWRULFSODFHV
UHTXLUHGE\WKLVVHFWLRQ
™ :LWK UHVSHFW WR SURYLVLRQV DSSOLFDEOH WR
™ 7KLV VHFWLRQ SURYLGHV DQ H[FHSWLRQ IURP FRGH EXLOGLQJV LQ IORRG KD]DUG DUHDV WKH GLVFUHWLRQ
UHTXLUHPHQWVZKHQWKHEXLOGLQJLQTXHVWLRQKDV JLYHQ LQ 6HFWLRQ  DOORZLQJ WKH EXLOGLQJ
KLVWRULFYDOXH7KHPRVWLPSRUWDQWFULWHULRQIRU RIILFLDO WR ZDLYH WKH UHTXLUHPHQWV IRU KLVWRULF
WKHDSSOLFDWLRQRIWKLVVHFWLRQLVWKDWWKHEXLOGLQJ VWUXFWXUHV H[WHQGV RQO\ WR KLVWRULF VWUXFWXUHV
PXVW EH HVVHQWLDOO\ DFFUHGLWHG DV EHLQJ RI WKDW PHHW WKH VSHFLILF OLPLWDWLRQV LQ WKH
KLVWRULF VLJQLILFDQFH E\ D TXDOLILHG SDUW\ RU H[FHSWLRQWRWKLVVHFWLRQ/RFDWLRQLQDKLVWRULF
DJHQF\VHHWKHGHILQLWLRQRI³+LVWRULFEXLOGLQJ´ GLVWULFWGRHVQRWTXDOLI\DVWUXFWXUHDVKLVWRULF
LQ 6HFWLRQ  8VXDOO\ WKLV LV GRQH E\ D &DUHPXVWEHWDNHQWRHQVXUHWKDWZRUNRQVXFK
JRYHUQPHQWDO DXWKRULW\ DIWHU FDUHIXO UHYLHZ RI KLVWRULF VWUXFWXUHV ZLOO QRW FDXVH WKHP WR ORVH
WKH KLVWRULFDO YDOXH RI WKH EXLOGLQJ 7KH WKHLU FRQWLQXHG OLVWLQJ RU GHVLJQDWLRQ ,I
DJHQFLHV ZLWK VXFK DXWKRULW\ FDQ EH ORFDWHG LPSURYHPHQWV RU UHSDLUV FDXVH D VWUXFWXUH WR
WKURXJKWKH6DXGL&RPPLVVLRQIRU7RXULVPDQG ORVH LWV OLVWLQJ RU GHVLJQDWLRQ DV D KLVWRULF
1DWLRQDO +HULWDJH 6&7+ 7KLV VHFWLRQ DOVR EXLOGLQJWKHQWKHEXLOGLQJRIILFLDOPXVWHQIRUFH
FODULILHVWKDWWKHFRGHJHQHUDOO\GRHVQRWDSSO\ WKH VXEVWDQWLDO LPSURYHPHQW UHTXLUHPHQWV
XQOHVV VSHFLILFDOO\ UHTXLUHG E\ WKLV VHFWLRQ 2ZQHUV RI KLVWRULF VWUXFWXUHV VKRXOG FRQVLGHU
7KHUHDUHWZRVXEVHFWLRQV7KHILUVWGHDOVZLWK PHDVXUHVWRUHGXFHIORRGGDPDJHWRWKHH[WHQW
DGGUHVVLQJGLVWLQFWKD]DUGVWROLIH7KHVHFRQG SUDFWLFDO)RUDGGLWLRQDOJXLGDQFHVHH)(0$3
GHDOV ZLWK IORRG KD]DUG DUHDV DQG QHFHVVDU\  )ORRGSODLQ 0DQDJHPHQW %XOOHWLQ RQ
XSJUDGHV DV DSSOLFDEOH 1RWH DV ZLOO EH +LVWRULF6WUXFWXUHVDQG)(0$3
GLVFXVVHG PRVW KLVWRULF EXLOGLQJV QHHG QRW
FRPSO\ZLWKWKHIORRGKD]DUGUHTXLUHPHQWV 6(&7,21029('6758&785(6
 /LIHVDIHW\KD]DUGV7KHSURYLVLRQVRIWKLV  &RQIRUPDQFH  6WUXFWXUHV PRYHG LQWR RU
FRGHVKDOODSSO\WRKLVWRULFEXLOGLQJVMXGJHGE\WKH ZLWKLQ WKH MXULVGLFWLRQ VKDOO FRPSO\ ZLWK WKH
EXLOGLQJRIILFLDOWR FRQVWLWXWHD GLVWLQFWOLIHVDIHW\ SURYLVLRQV RI WKLV FRGH UHTXLUHPHQWV IRU QHZ
KD]DUG VWUXFWXUHV
™ 7KLV VHFWLRQ SURYLGHV WKH DXWKRULW\ WR DGGUHVV ™ 0RYHG VWUXFWXUHV DUH UHTXLUHG WR FRPSO\ ZLWK
GLVWLQFWKD]DUGVWROLIHVDIHW\7KLVFDQDGGUHVV WKH SURYLVLRQV DSSOLFDEOH WR QHZ FRQVWUXFWLRQ
LVVXHVVXFKDVVWUXFWXUDOLQVWDELOLW\RUEORFNHG ZKLFK LV JHQHUDOO\ LQWHQGHG WR PHDQ WKH 6%&
RUVHYHUHO\OLPLWHGH[LWV2QFHDGLVWLQFWKD]DUG 7KHPRYHGVWUXFWXUHPD\FRPSO\ZLWKWKH
LV HVWDEOLVKHG WKH SURYLVLRQV RI WKH FRGH ZLOO DOWHUQDWLYHSURYLVLRQVRI&KDSWHULQVWHDGRI
DSSO\ 7KH H[WHQW RI DSSOLFDWLRQ LV DW WKH WKH FRGH UHTXLUHPHQWV IRU QHZ VWUXFWXUHV
GLVFUHWLRQRIWKHEXLOGLQJRIILFLDO ZKLFK PD\ EH SDUWLFXODUO\ XVHIXO LI WKH PRYHG
VWUXFWXUHLVROGHUWKDQWKHHIIHFWLYHGDWHRIWKH
 )ORRGKD]DUGDUHDV:LWKLQIORRGKD]DUG
DGRSWLRQ RI WKH EXLOGLQJ FRGHV LQ WKH
DUHDVHVWDEOLVKHGLQDFFRUGDQFHZLWK6HFWLRQ MXULVGLFWLRQ7KHILUHVHSDUDWLRQGLVWDQFHRIWKH
RIWKH6%&RU6HFWLRQ5RIWKH6%& PRYHG VWUXFWXUH PXVW FRPSO\ ZLWK
DVDSSOLFDEOHZKHUHWKHZRUNSURSRVHGFRQVWLWXWHV UHTXLUHPHQWV IRU QHZ VWUXFWXUHV HYHQ LI WKH
VXEVWDQWLDO LPSURYHPHQW WKH EXLOGLQJ VKDOO EH FRPSOLDQFHDOWHUQDWLYHSURYLVLRQVRI&KDSWHU
EURXJKWLQWRFRPSOLDQFHZLWK6HFWLRQRIWKH DUHXVHGWRPHHWWKHFRGHUHTXLUHPHQWV
6%&  RU 6HFWLRQ 5 RI WKH 6%&  DV
DSSOLFDEOH
6(&7,21$&&(66,%,/,7<)25
(;,67,1*%8,/',1*6
([FHSWLRQ+LVWRULFEXLOGLQJVQHHGQRWEHEURXJKW
LQWRFRPSOLDQFHWKDWDUH  6FRSH  7KH SURYLVLRQVRI 6HFWLRQV 
WKURXJK  DSSO\ WR PDLQWHQDQFH FKDQJH RI
 /LVWHG RU SUHOLPLQDULO\ GHWHUPLQHG WR EH RFFXSDQF\ DGGLWLRQV DQG DOWHUDWLRQV WR H[LVWLQJ
HOLJLEOHIRUOLVWLQJE\WKH6DXGL&RPPLVVLRQ EXLOGLQJV LQFOXGLQJ WKRVH LGHQWLILHG DV KLVWRULF
IRU7RXULVPDQG1DWLRQDO+HULWDJH6&7+ EXLOGLQJV

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

™ 7KH SXUSRVH RI 6HFWLRQ  LV WR HVWDEOLVK IRUZKHHOFKDLUDFFHVVZRXOGDOWHUWKHKLVWRULFDO

PLQLPXPFULWHULDIRUDFFHVVLELOLW\ZKHQGHDOLQJ VLJQLILFDQFHDOWHUQDWLYHVDUHRIIHUHGLQ6HFWLRQ
ZLWKH[LVWLQJEXLOGLQJVDQGIDFLOLWLHV7KHKLVWRU\ 2WKHUH[DPSOHVLQFOXGHWKHDOWHUQDWLYHV
DQG HIIRUWV LQYROYHG DUH VLPLODU WR WKRVH RIIHUHG LQ 6HFWLRQ  LI LW LV WHFKQLFDOO\
GLVFXVVHG LQ WKH FRPPHQWDU\ IRU 6%&  LQIHDVLEOH WR SURYLGH IXOO DFFHVVLELOLW\ LQ DQ
&KDSWHU$FFHVVWREXLOGLQJVDQGVWUXFWXUHV H[LVWLQJ EXLOGLQJ 3OHDVH QRWH WKDW WKH WHUP
IRUSHRSOHZLWKSK\VLFDOGLVDELOLWLHVKDVEHHQD ³WHFKQLFDOO\ LQIHDVLEOH´ UHIHUV WR HLWKHU
VXEMHFWWKDWWKHEXLOGLQJFRGHVKDYHUHJXODWHG PRYHPHQW RI D PDMRU VWUXFWXUDO HOHPHQW RU
VLQFHWKHHDUO\V7KH\KDYHFRQVLVWHQWO\ RWKHUSK\VLFDOFRQVWUDLQWV)RUH[DPSOHDUDPS
UHOLHG RQ D FRQVHQVXV QDWLRQDO VWDQGDUG ,&& WR SURYLGH HQWUDQFH RU H[LW IURP D SDUWLFXODU
$$FFHVVLEOHDQG8VHDEOH%XLOGLQJVDQG GRRUPD\QRWEHSRVVLEOHEHFDXVHRISURSHUW\
)DFLOLWLHV$FFHVVLELOLW\ LVQRWDQHZVXEMHFWWR OLQHVRUVHWEDFNFRQVWUDLQWV
WKH FRQVWUXFWLRQ UHJXODWRU\ FRPPXQLW\ 7KHUH
KDV EHHQ D JUHDW GHDO RI HPSKDVLV DQG  0DLQWHQDQFH RI IDFLOLWLHV  $ EXLOGLQJ
DZDUHQHVV SODFHG RQ WKH VXEMHFW RI IDFLOLW\RUHOHPHQWWKDWLVFRQVWUXFWHGRUDOWHUHGWR
DFFHVVLELOLW\WKURXJKWKHSDVVDJHRIODZV7KH EHDFFHVVLEOHVKDOOEHPDLQWDLQHGDFFHVVLEOHGXULQJ
$PHULFDQV ZLWK 'LVDELOLWLHV $FW $'$ DUH RFFXSDQF\
UHJXODWLRQVWKDWDIIHFWEXLOGLQJFRQVWUXFWLRQDV
™ &RQWLQXHG FRPSOLDQFH ZLWK WKH DFFHVVLELOLW\
LWUHODWHVWRDFFHVVLELOLW\
UHTXLUHPHQWV RI WKH FRGH LV GHSHQGHQW RQ
™ $SSHQGL[ % LQFOXGHV LQIRUPDWLRQ IRXQG LQ WKH
PDLQWHQDQFH RI VXFK IDFLOLWLHV WKURXJKRXW WKH
$PHULFDQV ZLWK 'LVDELOLWLHV $FW $FFHVVLELOLW\
OLIH RI WKH EXLOGLQJ )RU H[DPSOH GULQNLQJ
*XLGHOLQHV $'$$* WKDW FDQQRW EH HQIRUFHG
IRXQWDLQVWKDWDUHUHTXLUHGWREHDFFHVVLEOHDUH
WKURXJKWKHW\SLFDOFRGHHQIRUFHPHQWSURFHVV
RI OLWWOH YDOXH LI WKH\ PDOIXQFWLRQ WKURXJK
EXWZRXOGSURYLGHEHQHILFLDOLQIRUPDWLRQIRUWKH
GHWHULRUDWLRQ RU IDLOXUH RI DQ\ RI WKH ZRUNLQJ
GHVLJQHURZQHUIRUIXOOFRPSOLDQFHSXUSRVHV
SDUWV ,Q RWKHU FDVHV LQRSHUDEOH HOHYDWRUV
™ %XLOGLQJV XQGHUJRLQJ DOWHUDWLRQV DUH JHQHUDOO\
ORFNHG DFFHVVLEOH GRRUV DQG REVWUXFWHG
H[SHFWHG WR IXOO\ FRPSO\ ZLWK WKH DFFHVVLELOLW\
DFFHVVLEOHURXWHVPXVWEHPDLQWDLQHGVXFKWKDW
SURYLVLRQV +RZHYHU H[FHSWLRQV DUH WKHQ
WKH\ DUH UHDGLO\ XVDEOH E\ LQGLYLGXDOV ZLWK
SURYLGHGWRLQGLFDWHWKHFRQGLWLRQVXQGHUZKLFK
GLVDELOLWLHV
OHVVWKDQIXOODFFHVVLELOLW\LVSHUPLWWHG
™ )RUH[DPSOHLIDGRRUDQGIUDPHDUHUHPRYHG  ([WHQWRIDSSOLFDWLRQ$QDOWHUDWLRQRIDQ
DQG UHSODFHG WKH GRRU PXVW PHHW WKH H[LVWLQJIDFLOLW\VKDOOQRWLPSRVHDUHTXLUHPHQWIRU
UHTXLUHPHQWV IRU ZLGWK KHLJKW PDQHXYHULQJ JUHDWHU DFFHVVLELOLW\ WKDQ WKDW ZKLFK ZRXOG EH
FOHDUDQFHVDQGKDUGZDUH,IMXVWWKHGRRUNQRE UHTXLUHGIRUQHZFRQVWUXFWLRQ$OWHUDWLRQVVKDOOQRW
LVEHLQJUHPRYHGLWPXVWEHUHSODFHGZLWKOHYHU
UHGXFHRUKDYHWKHHIIHFWRIUHGXFLQJDFFHVVLELOLW\
KDUGZDUH
™ ,I WKH DUHD XQGHUJRLQJ DOWHUDWLRQ GRHV QRW
RIDIDFLOLW\RUSRUWLRQRIDIDFLOLW\
FRQWDLQ D SULPDU\ IXQFWLRQ WKHUH DUH QR ™ 7KHSXUSRVHRI WKLVVHFWLRQLVWRFODULI\ZKHUH
DGGLWLRQDO UHTXLUHPHQWV KRZHYHU LI WKH DUHD DOWHUDWLRQV DQG VFRSLQJ IRU DOWHUDWLRQ
FRQWDLQV D SULPDU\ IXQFWLRQ WKHUH LV DQ UHTXLUHPHQWV DSSO\ 7KH UHTXLUHPHQWV LQ
DGGLWLRQDOFULWHULRQWKDWPD\UHTXLUHZRUNQRWLQ 6HFWLRQV  DQG  GR QRW LPSRVH D
WKHRULJLQDOVFRSHWRDFKLHYHDFFHVVLELOLW\7KLV KLJKHU OHYHO RI DFFHVVLELOLW\ WKDQ WKH OHYHO
DGGLWLRQDO FULWHULRQ LV WR SURYLGH DQ DFFHVVLEOH UHTXLUHGLQQHZFRQVWUXFWLRQ$WWKHVDPHWLPH
URXWH WR WKH DOWHUHG DUHD LQFOXGLQJ DQ\ WRLOHWV DOWHUDWLRQV FDQQRW UHVXOW LQ D OHVVHU GHJUHH RI
DQG GULQNLQJ IRXQWDLQV WKDW VHUYH LW DFFHVVLELOLW\WKDQH[LVWHGEHIRUHWKHDOWHUDWLRQV
5HTXLUHPHQWV IRU DQ DFFHVVLEOH URXWH PLJKW ZHUHXQGHUWDNHQ
VSHFLI\ WKDW WKH GRRU SUHYLRXVO\ GLVFXVVHG EH
UHPRYHGDQGUHSODFHGEHFDXVHLWGLGQRWKDYH  &KDQJHRIRFFXSDQF\([LVWLQJEXLOGLQJV
DGHTXDWHZLGWKRUPDQHXYHULQJFOHDUDQFHV WKDWXQGHUJRDFKDQJHRIJURXSRURFFXSDQF\VKDOO
™ 7KHSULQFLSOHEHKLQGWKLVDSSURDFKWRXSJUDGLQJ FRPSO\ZLWKWKLVVHFWLRQ
H[LVWLQJEXLOGLQJVLVWKDWWKH\ZLOOEHFRPHPRUH
([FHSWLRQ  7\SH % GZHOOLQJ RU VOHHSLQJ XQLWV
DFFHVVLEOH RYHU WLPH $ YDOLG WLPH WR ZRUN
WRZDUG WKDW JRDO LV ZKHQ D VWUXFWXUH LV EHLQJ UHTXLUHG E\ 6HFWLRQ RI WKH 6%&  DUH QRW
DOWHUHG 6SHFLDO FRQVLGHUDWLRQV DUH RIIHUHG UHTXLUHG WR EH SURYLGHG LQ H[LVWLQJ EXLOGLQJV DQG
EHFDXVHRIWKHGLIILFXOW\LQYROYHGLQGHDOLQJZLWK IDFLOLWLHV XQGHUJRLQJ D FKDQJH RI RFFXSDQF\ LQ
H[LVWLQJIDFLOLWLHVWKDW PD\ QRW KDYHEHHQ EXLOW FRQMXQFWLRQZLWKDOWHUDWLRQZKHUHWKHZRUNDUHDLV
ZLWK DFFHVVLELOLW\ IRU SK\VLFDOO\ GLVDEOHG  SHUFHQW RU OHVV RI WKH DJJUHJDWH DUHD RI WKH
SHUVRQV LQ PLQG )RU H[DPSOH ZKHQ D EXLOGLQJ
KLVWRULFDOO\UHJLVWHUHGKRPHLVEHLQJPDGHLQWR
DPXVHXP LIFKDQJLQJ WKHIURQWGRRUWR DOORZ ™ :KHQDQHQWLUHEXLOGLQJXQGHUJRHVDFKDQJHRI
RFFXSDQF\ WKH EXLOGLQJ PXVW FRPSO\ ZLWK WKH

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

SURYLVLRQVLQ 6HFWLRQ,ID SRUWLRQRID SODWIRUPOLIWVHH6HFWLRQZKLOHLQQHZ

EXLOGLQJ XQGHUJRHV D FKDQJH RI RFFXSDQF\ FRQVWUXFWLRQWKLVRSWLRQLVOLPLWHGVHH6%&
VXFK DV ZKHQ WKHUH LV D WHQDQW FKDQJH RU D 6HFWLRQVDQG
SDUWLDO UHQRYDWLRQ ZKHUH D VSDFH FKDQJHV
IXQFWLRQ WKHQ WKH OHYHO RI DFFHVVLELOLW\ LV &RPSOHWH FKDQJH RI RFFXSDQF\  :KHUH
DGGUHVVHGLQ6HFWLRQ DQ HQWLUH EXLOGLQJ XQGHUJRHV D FKDQJH RI
™ 7KH H[FHSWLRQ QRWHV ZKHUH 7\SH % GZHOOLQJ RFFXSDQF\LWVKDOOFRPSO\ZLWK6HFWLRQDQG
DQG VOHHSLQJ XQLWV ZRXOG QRW QHHG WR EH VKDOOKDYHDOORIWKHIROORZLQJDFFHVVLEOHIHDWXUHV
LQFOXGHGZKHUHWKHUHLVDFKDQJHRIRFFXSDQF\ 
WRD*URXS,RU5EXLOGLQJVHH6HFWLRQRI  $WOHDVWRQHDFFHVVLEOHEXLOGLQJHQWUDQFH
WKH6%&:KHUHWKHFKDQJHRIRFFXSDQF\  $W OHDVW RQH DFFHVVLEOH URXWH IURP DQ
GRHV QRW LQYROYH H[WHQVLYH DOWHUDWLRQV DFFHVVLEOH EXLOGLQJ HQWUDQFH WR SULPDU\
H[FHHGLQJ  SHUFHQW RI WKH DUHD RI WKH IXQFWLRQDUHDV
EXLOGLQJ WKHQ 7\SH % DFFHVVLELOLW\
 6LJQDJHFRPSO\LQJZLWK6HFWLRQRIWKH
UHTXLUHPHQWVZRXOGQRWQHHGWREHSURYLGHGLQ
WKH QHZ RU DOWHUHG GZHOOLQJ RU VOHHSLQJ XQLWV 6%&
7KLVH[FHSWLRQLVVLPLODUWRZKDWLVDOVRIRXQGLQ  $FFHVVLEOH SDUNLQJ ZKHUH SDUNLQJ LV EHLQJ
WKHFRGHIRUDOWHUDWLRQVZKHUHOHVVWKDQD/HYHO SURYLGHG
 DOWHUDWLRQ RFFXUV $ /HYHO  DOWHUDWLRQ LV  $W OHDVW RQH DFFHVVLEOH SDVVHQJHU ORDGLQJ
JUHDWHU WKDQ  SHUFHQW RI WKH DUHD RI WKH ]RQHZKHQORDGLQJ]RQHVDUHSURYLGHG
EXLOGLQJ7KLVWKHUHIRUHGHFUHDVHVWKHEXUGHQ  $W OHDVW RQH DFFHVVLEOH URXWH FRQQHFWLQJ
RQPDQ\VPDOOHUSURMHFWV7\SH%GZHOOLQJXQLWV DFFHVVLEOH SDUNLQJ DQG DFFHVVLEOH SDVVHQJHU
VKRXOG EH SURYLGHG LQ ODUJHU DOWHUDWLRQV ORDGLQJ]RQHVWRDQDFFHVVLEOHHQWUDQFH
EHFDXVH ZKHUH PDMRU DOWHUDWLRQV DUH EHLQJ 
SHUIRUPHGWKHUHLVDSULPHRSSRUWXQLW\WRKDYH
:KHUHLWLVWHFKQLFDOO\LQIHDVLEOHWRFRPSO\ZLWKWKH
WKRVH EXLOGLQJV PRYH WRZDUG EHLQJ DEOH WR
VHUYHDZLGHUUDQJHRIWKHSRSXODWLRQ:LWKWKH QHZ FRQVWUXFWLRQ VWDQGDUGV IRU DQ\ RI WKHVH
SRSXODWLRQ DJLQJ WKHUH ZLOO EH D VWHDGLO\ UHTXLUHPHQWVIRUDFKDQJHRIJURXSRURFFXSDQF\
LQFUHDVLQJ GHPDQG IRU XQLWV WKDW LQFOXGH WKHDERYHLWHPVVKDOOFRQIRUPWRWKHUHTXLUHPHQWV
DFFHVVLELOLW\ IHDWXUHV 6HH WKH FRPPHQWDU\ WR WRWKHPD[LPXPH[WHQWWHFKQLFDOO\IHDVLEOH
6HFWLRQ  6HFWLRQ  ([FHSWLRQ 
([FHSWLRQ7KHDFFHVVLEOHIHDWXUHVOLVWHGLQ,WHPV
DQG6HFWLRQIRUDGGLWLRQDOLQIRUPDWLRQ
WKURXJKDUHQRWUHTXLUHGIRUDQDFFHVVLEOHURXWH
3DUWLDO FKDQJH LQ RFFXSDQF\  :KHUH D WR7\SH%XQLWV
SRUWLRQ RI WKH EXLOGLQJ LV FKDQJHG WR D QHZ
™ )RUDSURMHFWWKDWLQYROYHVDFRPSOHWHFKDQJH
RFFXSDQF\ FODVVLILFDWLRQ DQ\ DOWHUDWLRQV VKDOO RI RFFXSDQF\ ZLWK DOWHUDWLRQV IXOO FRPSOLDQFH
FRPSO\ZLWK6HFWLRQVDQG ZLWKDFFHVVLELOLW\UHTXLUHPHQWVLVH[SHFWHGDQG
™ :KHQDEXLOGLQJXQGHUJRHVDSDUWLDOFKDQJHRI UHDVRQDEOH IRU DUHDV EHLQJ DOWHUHG H[FHSW
RFFXSDQF\ VXFK DV ZKHUH WKHUH LV D WHQDQW ZKHUH WHFKQLFDO LQIHDVLELOLW\ FDQ EH
FKDQJH RU D FKDQJH LQ IXQFWLRQ RI D VSHFLILF GHPRQVWUDWHG ,I IXOO FRPSOLDQFH LV WHFKQLFDOO\
DUHD WKHQ WKH OHYHO RI DFFHVVLELOLW\ SURYLGHG LQIHDVLEOH WKH HOHPHQW PXVW EH PDGH
PXVW DFKLHYH WKH VDPH OHYHO DV LI WKDW VSDFH DFFHVVLEOHWRWKHIXOOHVWH[WHQWWKDWLVIHDVLEOH
ZHUH XQGHUJRLQJ DQ DOWHUDWLRQ %DVLFDOO\ WKH 7KLV LV FRQVLVWHQW ZLWK WKH JHQHUDO DSSURDFK
LQWHQW LV WKDW DQ\ VSDFHV RU HOHPHQWV EHLQJ WKDW KDV DOZD\V EHHQ WDNHQ UHODWLYH WR RWKHU
DOWHUHG ZLOO PHHW QHZ DFFHVVLELOLW\ SURYLVLRQV PDWWHUVUHJXODWHGE\WKHFRGH
XQOHVV WHFKQLFDOO\ LQIHDVLEOH VHH 6HFWLRQ ™ ,QDGGLWLRQWRDFFHVVLELOLW\ UHTXLUHPHQWVLQWKH
 ,I WKH DUHD FKDQJLQJ RFFXSDQF\ LV D VSDFH DQ DFFHVVLEOH URXWH LV UHTXLUHG WR WKDW
SULPDU\IXQFWLRQRIWKHVSDFHDQHYDOXDWLRQRI VSDFH6L[LWHPVWKDWPDNHXSWKDWDFFHVVLEOH
WKHDFFHVVLEOHURXWHDVZHOODVEDWKURRPVDQG URXWH DUH OLVWHG 7KLV VHFWLRQ HVWDEOLVKHV WKDW
GULQNLQJIRXQWDLQVVHUYLQJWKLVVSDFHPXVWEH ZKHQ DQ H[LVWLQJ EXLOGLQJ XQGHUJRHV D
PDGH ,I WKHVH HOHPHQWV DUH QRW DFFHVVLEOH FRPSOHWH FKDQJH RI RFFXSDQF\ FRPSOLDQFH
LPSURYHPHQWV PXVW EH PDGH +RZHYHU WKHUH ZLWK WKRVH UHTXLUHPHQWV DW PLQLPXP LV
LV D OLPLW WR WKH FRVW RI WKH DGGLWLRQDO H[SHFWHG 7KDW ZD\ D SHUVRQ ZLWK PRELOLW\
LPSURYHPHQWVWRDPD[LPXP RI  SHUFHQWRI LPSDLUPHQWV ZRXOG EH DEOH WR DUULYH DW WKH
WKH FRVW RI WKH DOWHUDWLRQ VHH 6HFWLRQ  EXLOGLQJ VHH ,WHPV  DQG  JHW WR WKH
7KH UHIHUHQFH WR 6HFWLRQ  SURYLGHV IRU DFFHVVLEOHHQWUDQFHVHH,WHPVDQGDQG
DGGLWLRQDO DOORZDQFHV EHFDXVH WKH KDYHDWOHDVWRQH DFFHVVLEOH URXWH WKURXJKRXW
GHVLJQHURZQHU LV VWLOO GHDOLQJ ZLWK H[LVWLQJ WKH EXLOGLQJ WR DOO WKH SULPDU\ IXQFWLRQ DUHDV
EXLOGLQJ FRQVWUDLQWV )RU H[DPSOH WKH VHH,WHP&KDQJHVEHWZHHQOHYHOVFRXOGEH
DFFHVVLEOH URXWH FRXOG EH SURYLGHG E\ D YLD D UDPS VHH 6HFWLRQ  DQ HOHYDWRU

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

VHH 6HFWLRQ  RU D SODWIRUP OLIW VHH H[DPSOH D QHZ GLQLQJ DUHD LV DGGHG LQ D
6HFWLRQ,IWKHDOWHUHGDUHDZRXOGQRW UHVWDXUDQW $OO DFFHVVLEOH HOHPHQWV ZLWKLQ WKH
EHUHTXLUHGWREHVHUYHGE\DQDFFHVVLEOHURXWH SDUDPHWHURIWKHDGGLWLRQPXVWEHFRQVWUXFWHG
LQQHZFRQVWUXFWLRQDQDFFHVVLEOHURXWHZRXOG WR EH DFFHVVLEOH ,I WKH URXWH WR RU IURP WKH
QRWEHUHTXLUHGIRUDFKDQJHRIRFFXSDQF\VHH DGGLWLRQRUWKHEDWKURRPVRUGULQNLQJIRXQWDLQV
6HFWLRQ WKDWVHUYHWKHDGGLWLRQDUHLQWKHH[LVWLQJWKH
™ ,IWKHDUHDXQGHUJRLQJDFKDQJHRIRFFXSDQF\ URXWHVPXVWEHHYDOXDWHGIRUDFFHVVLELOLW\URXWH
LVEHLQJDOWHUHGDQGFRQWDLQVDSULPDU\IXQFWLRQ ZRXOG LQFOXGH WR URXWH WR WKHVH HOHPHQWV WKH
DUHDWKHDFFHVVLEOHURXWHSURYLVLRQVLQ6HFWLRQ WRLOHWURRPVWKHPVHOYHVWKHIL[WXUHVLQWKHWRLOHW
DUHDOVRDSSOLFDEOH7KLVZRXOGQRWRQO\ URRPDQGWKHGULQNLQJIRXQWDLQV
UHTXLUH DQ DFFHVVLEOH URXWH WR WKH FKDQJH RI
RFFXSDQF\ DUHD EXW ZRXOG DOVR LQFOXGH  $OWHUDWLRQV  $ EXLOGLQJ IDFLOLW\ RU
SRVVLEOHXSJUDGHVWRWRLOHWURRPVDQGGULQNLQJ HOHPHQW WKDW LV DOWHUHG VKDOO FRPSO\ ZLWK WKH
IRXQWDLQVWKDWVHUYHWKHDUHD7KHVHHOHPHQWV DSSOLFDEOHSURYLVLRQVLQ&KDSWHURIWKH6%&
FRXOGXVHWKHSHUFHQWFDSRQFRVWRIIHUHGLQ XQOHVV WHFKQLFDOO\ LQIHDVLEOH :KHUH FRPSOLDQFH
6HFWLRQ([FHSWLRQ,IIXOOFRPSOLDQFHLV ZLWK WKLV VHFWLRQ LV WHFKQLFDOO\ LQIHDVLEOH WKH
WHFKQLFDOO\ LQIHDVLEOH WKH HOHPHQW PXVW EH DOWHUDWLRQ VKDOO SURYLGH DFFHVV WR WKH PD[LPXP
PDGH DFFHVVLEOH WR WKH IXOOHVW H[WHQW WKDW LV H[WHQWWHFKQLFDOO\IHDVLEOH
IHDVLEOH6HHWKHFRPPHQWDU\WR6HFWLRQ
IRUDGGLWLRQDOLQIRUPDWLRQRQWKHH[FHSWLRQV ([FHSWLRQV
™ 7\SLFDOO\ D EXLOGLQJ XQGHUJRLQJ D FRPSOHWH
 7KHDOWHUHGHOHPHQWRUVSDFHLVQRWUHTXLUHGWR
FKDQJHRIRFFXSDQF\LVEHLQJDWOHDVWSDUWLDOO\
JXWWHG DQG XQGHUJRLQJ DOWHUDWLRQV EHFDXVH RI
EHRQDQDFFHVVLEOHURXWHXQOHVVUHTXLUHGE\
FKDQJHV LQ IXQFWLRQ SRVVLEO\ FDXVHG E\ 6HFWLRQ
LQFUHDVHG RFFXSDQW ORDG PHDQV RI HJUHVV  $FFHVVLEOH PHDQV RI HJUHVV UHTXLUHG E\
UHTXLUHPHQWV VSULQNOHU UHTXLUHPHQWV RU &KDSWHURIWKH6%&DUHQRWUHTXLUHGWR
PHFKDQLFDODQGSOXPELQJFKDQJHV7KHLQWHQW EHSURYLGHGLQH[LVWLQJIDFLOLWLHV
LV WR FUHDWH D EDODQFH EHWZHHQ WKH FKDQJH RI  7KHDOWHUDWLRQWR7\SH$LQGLYLGXDOO\RZQHG
RFFXSDQF\ PHHWLQJ DOO QHZ FRQVWUXFWLRQ GZHOOLQJXQLWVZLWKLQD*URXS5RFFXSDQF\
UHTXLUHPHQWVIRUDFFHVVLELOLW\DQGWKHIDFWWKDW VKDOOEHSHUPLWWHGWRPHHWWKHSURYLVLRQIRUD
WKH GHVLJQHU RZQHU LV GHDOLQJ ZLWK VRPH 7\SH%GZHOOLQJXQLW
H[LVWLQJEXLOGLQJFRQGLWLRQV
 7\SH%GZHOOLQJRUVOHHSLQJXQLWVUHTXLUHGE\
™ 7KLVLVQRWEDVHGRQDQ\VSHFLILFSURYLVLRQVRI
WKH $'$$* EXW SDUDOOHOV WKH LQWHQW RI WKH
6HFWLRQRIWKH6%&DUHQRWUHTXLUHG
UHTXLUHPHQWVIRUWKHUHPRYDORIEDUULHUV WREHSURYLGHGLQH[LVWLQJEXLOGLQJRUIDFLOLWLHV
™ ,IWKHFKDQJHRIRFFXSDQF\UHVXOWVLQD7\SH% XQGHUJRLQJ D FKDQJH RI RFFXSDQF\ LQ
GZHOOLQJ XQLW EHLQJ SURYLGHG WKH H[FHSWLRQ FRQMXQFWLRQ ZLWK DOWHUDWLRQVZKHUH WKH ZRUN
SHUPLWV WKH EXLOGLQJ WR EH H[HPSW IURP DUHDLVSHUFHQWRUOHVVRIWKHDJJUHJDWHDUHD
SURYLGLQJ WKH DGGLWLRQDO DFFHVVLEOH URXWH RIWKHEXLOGLQJ
UHTXLUHPHQWV OLVWHG LQ WKLV VHFWLRQ 7KLV
DOORZDQFH DGGUHVVHV FRQFHUQV RI VLWH ™ 7KH FRGH DSSURDFKHV WKH DSSOLFDWLRQ RI
LPSUDFWLFDOLW\ IRU H[LVWLQJ VWUXFWXUHV 7KLV DOVR DFFHVVLELOLW\ SURYLVLRQV WR D IDFLOLW\ WKDW LV
UHLQIRUFHVWKHLQWHQWWKDWWKHLQFOXVLRQRI7\SH DOWHUHGE\EURDGO\UHTXLULQJIXOOFRQIRUPDQFHWR
%XQLWVLVQRWPHDQWWRUHTXLUHHOHYDWRUVZKHQ QHZ FRQVWUXFWLRQ PHDQLQJ IXOO DFFHVVLELOLW\ LV
DOWHUDWLRQVDUHSHUIRUPHGRQXSSHUIORRUVLQQR H[SHFWHG ([FHSWLRQV DUH WKHQ SURYLGHG WR
HOHYDWRU EXLOGLQJV VHH WKH H[FHSWLRQV WR LQGLFDWH WKH FRQGLWLRQV XQGHU ZKLFK OHVV WKDQ
6HFWLRQ7KHVHDUHDVZRXOGKDYHEHHQ IXOODFFHVVLELOLW\LVSHUPLWWHG
H[HPSWHGLIEXLOWQHZXQGHUWKH6%&DQG ™ 7KHFLUFXPVWDQFHXQGHUZKLFKIXOOFRPSOLDQFH
VKRXOGFRQWLQXHWREHH[HPSWHG ZLWK DFFHVVLELOLW\ SURYLVLRQV LV QRW UHTXLUHG LV
ZKHQ LW LV GHHPHG WR EH WHFKQLFDOO\ LQIHDVLEOH
 $GGLWLRQV  3URYLVLRQV IRU QHZ VHH WKH FRPPHQWDU\ IRU WKH GHILQLWLRQ RI
FRQVWUXFWLRQVKDOO DSSO\ WR DGGLWLRQV$Q DGGLWLRQ ³7HFKQLFDOO\LQIHDVLEOH´LQ6HFWLRQ7KLVLV
WKDWDIIHFWVWKHDFFHVVLELOLW\WRRUFRQWDLQVDQDUHD FRQVLGHUHG UHDVRQDEOH VLQFH LI QRW SURYLGHG
RI D SULPDU\ IXQFWLRQ VKDOO FRPSO\ ZLWK WKH IRU SODQV IRU DOWHUDWLRQV PD\ EH RWKHUZLVH
UHTXLUHPHQWVLQ6HFWLRQ DEDQGRQHG E\ WKH EXLOGLQJ RZQHU 7KH
RSSRUWXQLW\WRXSJUDGHDQGLQFUHDVHWKHFXUUHQW
™ $GGLWLRQV PXVW FRPSO\ ZLWK QHZ FRQVWUXFWLRQ OHYHO RI DFFHVVLELOLW\ LQ DQ H[LVWLQJ EXLOGLQJ
$QDGGLWLRQKRZHYHULVDOVRDQDOWHUDWLRQWRDQ ZRXOG WKHQ EH ORVW 7KLV FRQFHUQ LV DOVR
H[LVWLQJ EXLOGLQJ WKHUHIRUH DFFHVVLEOH URXWH HPERGLHG LQ WKH UHTXLUHPHQW WKDW DQ DOWHUHG
SURYLVLRQVIRUH[LVWLQJEXLOGLQJVDUHDSSOLFDEOH HOHPHQW RU VSDFH LV H[SHFWHG WR EH PDGH
VHH FRPPHQWDU\ 6HFWLRQ  )RU DFFHVVLEOHWRWKHH[WHQWWRZKLFKLWLVWHFKQLFDOO\

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

IHDVLEOH WR GR VR ,Q WKLV PDQQHU WKH FRGH GHFUHDVHV WKH EXUGHQ RQ PDQ\ VPDOOHU
DFFRPSOLVKHV WKH JUHDWHVW GHJUHH RI SURMHFWV
DFFHVVLELOLW\ ZKLOH UHFRJQL]LQJ WKH MXVWLILDEOH ™ 7\SH%GZHOOLQJXQLWVPXVWEHSURYLGHGLQODUJHU
GLIILFXOWLHVWKDWPD\EHLQYROYHGLQSURYLGLQJIXOO DOWHUDWLRQV :KHUH PDMRU DOWHUDWLRQV DUH EHLQJ
DFFHVVLELOLW\ $OWHUDWLRQV DUH QRW UHTXLUHG WR SHUIRUPHGWKHUHLVDSULPHRSSRUWXQLW\WRKDYH
H[FHHG QHZ FRQVWUXFWLRQ UHTXLUHPHQWV VHH WKRVH EXLOGLQJV PRYH WRZDUG EHLQJ DEOH WR
6HFWLRQ VHUYHDZLGHUUDQJHRIWKHSRSXODWLRQ:LWKWKH
™ ,Q DFFRUGDQFH ZLWK ([FHSWLRQ  LI WKH DUHD SRSXODWLRQRIWKH6DXGL$UDELDDJLQJWKHUHZLOO
XQGHUJRLQJ DOWHUDWLRQ GRHV QRW FRQWDLQ D EHDVWHDGLO\LQFUHDVLQJGHPDQGIRUXQLWVWKDW
SULPDU\IXQFWLRQVHH6HFWLRQWKHUHDUH LQFOXGH DFFHVVLELOLW\ IHDWXUHV :KHQ D PDMRU
QR DGGLWLRQDO UHTXLUHPHQWV SDVW WKH RULJLQDO DOWHUDWLRQUHQRYDWLRQ LV RFFXUULQJ WKHUH LV DQ
VFRSH RI WKH SURMHFW +RZHYHU LI WKH DUHD RSSRUWXQLW\ WR EULQJ WKRVH EXLOGLQJV LQWR
FRQWDLQVDSULPDU\IXQFWLRQWKHUHDUHDGGLWLRQDO FRPSOLDQFH 6HH WKH FRPPHQWDU\ WR 6HFWLRQV
FULWHULDWRDFKLHYHDFFHVVLELOLW\WKDWPD\UHTXLUH  WKH H[FHSWLRQ   DQG
ZRUNQRWLQWKHRULJLQDOVFRSHRIWKHSURMHFW7KH IRUDGGLWLRQDOLQIRUPDWLRQ
DGGLWLRQDOFULWHULDDUHWRSURYLGHDQDFFHVVLEOH
URXWH WR WKH DOWHUHG DUHD DV ZHOO DV  $OWHUDWLRQVDIIHFWLQJDQDUHDFRQWDLQLQJ
LPSURYHPHQWV WR DQ\ WRLOHWV DQG GULQNLQJ D SULPDU\IXQFWLRQ  :KHUHDQ DOWHUDWLRQDIIHFWV
IRXQWDLQVWKDWVHUYHWKHDOWHUHGDUHD WKHDFFHVVLELOLW\WRRUFRQWDLQVDQDUHDRISULPDU\
™ ([FHSWLRQLQGLFDWHVWKDWDFFHVVLEOHPHDQVRI IXQFWLRQWKHURXWHWRWKHSULPDU\IXQFWLRQDUHDVKDOO
HJUHVV DUH QRW UHTXLUHG DV D UHVXOW RI EHDFFHVVLEOH7KHDFFHVVLEOHURXWHWRWKHSULPDU\
XQGHUWDNLQJ DOWHUDWLRQV WR H[LVWLQJ EXLOGLQJV IXQFWLRQ DUHD VKDOO LQFOXGH WRLOHW IDFLOLWLHV DQG
6WULFWFRPSOLDQFHZLWK6%&6HFWLRQLV GULQNLQJ IRXQWDLQV VHUYLQJ WKH DUHD RI SULPDU\
RIWHQWHFKQLFDOO\LQIHDVLEOH7KHUHTXLUHPHQWIRU IXQFWLRQ
DPFOHDUZLGWKEHWZHHQKDQGUDLOVZRXOG
UHTXLUH PDQ\ VWDLUZD\V WR EH ZLGHQHG 7KLV ([FHSWLRQV
RIWHQZRXOGHQWDLOPRYHPHQWRIPDMRUVWUXFWXUDO
HOHPHQWVLQRUGHUWRDFFRPSOLVKWKLVDOWHUDWLRQ
 7KHFRVWVRISURYLGLQJWKHDFFHVVLEOHURXWHDUH
™ ([FHSWLRQ  DGGUHVVHV WKH VSHFLILF QRWUHTXLUHGWRH[FHHGSHUFHQWRIWKHFRVWV
FLUFXPVWDQFHV ZKHUH DQ H[LVWLQJ 7\SH $ RIWKHDOWHUDWLRQVDIIHFWLQJWKHDUHDRISULPDU\
GZHOOLQJ XQLW LV EHLQJ DOWHUHG :KLOH 6HFWLRQ IXQFWLRQ
VD\VWKDWDOHYHORIDFFHVVLELOLW\PXVWEH  7KLV SURYLVLRQ GRHV QRW DSSO\ WR DOWHUDWLRQV
PDLQWDLQHG LQ WKH VLWXDWLRQV ZKHUH D 7\SH $ OLPLWHG VROHO\ WR ZLQGRZV KDUGZDUH
GZHOOLQJXQLWLV³LQGLYLGXDOO\RZQHG´VXFKDVD RSHUDWLQJFRQWUROVHOHFWULFDORXWOHWVDQGVLJQV
FRQGRPLQLXP WKHQ LW RQO\ QHHGV WR PHHW WKH  7KLV SURYLVLRQ GRHV QRW DSSO\ WR DOWHUDWLRQV
WHFKQLFDO UHTXLUHPHQWV IRU D 7\SH % GZHOOLQJ OLPLWHG VROHO\ WR PHFKDQLFDO V\VWHPV
XQLWVHH,&&$6HFWLRQZKHQLWLV
HOHFWULFDOV\VWHPVLQVWDOODWLRQRUDOWHUDWLRQRI
DOWHUHG RU UHPRGHOHG E\ WKH RZQHU 7\SH %
XQLWVUHTXLUHDOHVVHUOHYHORIDFFHVVLELOLW\WKDQ
ILUH SURWHFWLRQ V\VWHPV DQG DEDWHPHQW RI
7\SH$XQLWV)RUH[DPSOHLIDQRZQHUZDQWHG KD]DUGRXVPDWHULDOV
WRDOWHUWKHEDWKURRPLQKLVRUKHUXQLWKHRUVKH  7KLV SURYLVLRQ GRHV QRW DSSO\ WR DOWHUDWLRQV
ZRXOG RQO\ EH UHTXLUHG WR PHHW WKH OHVVHU XQGHUWDNHQ IRU WKH SULPDU\ SXUSRVH RI
DFFHVVLELOLW\UHTXLUHPHQWVRID7\SH%XQLWZLWK LQFUHDVLQJWKHDFFHVVLELOLW\RIDIDFLOLW\
WKHQHZFRQVWUXFWLRQ7KLVH[FHSWLRQZRXOGQRW  7KLVSURYLVLRQGRHVQRWDSSO\WRDOWHUHGDUHDV
EHDSSOLFDEOHWRXQLWVWKDWDUHIRUUHQW OLPLWHGWR7\SH%GZHOOLQJDQGVOHHSLQJXQLWV
™ ([FHSWLRQ  DOORZV VRPH SDUWLDO EXLOGLQJ
DOWHUDWLRQVLQ*URXS,DQG5VWUXFWXUHVWRRFFXU ™ $QDUHDFRQWDLQLQJDSULPDU\IXQFWLRQLVRQHLQ
ZLWKRXW SURYLGLQJ 7\SH % GZHOOLQJ XQLWV DQG ZKLFKDPDMRUDFWLYLW\IRUZKLFKWKHEXLOGLQJRU
VOHHSLQJ XQLWV VHH 6HFWLRQ  :KHUH WKH IDFLOLW\ LV LQWHQGHG LV FDUULHG RXW VHH WKH
DOWHUDWLRQ GRHV QRW H[FHHG  SHUFHQW RI WKH GHILQLWLRQRI³3ULPDU\IXQFWLRQ´LQ6HFWLRQ
DUHD RIWKHEXLOGLQJ WKHQ 7\SH%DFFHVVLELOLW\ )RUH[DPSOHWKHOREE\RIDKRWHOLQZKLFKWKH
UHTXLUHPHQWVZRXOGQRWQHHGWREHSURYLGHGLQ UHJLVWUDWLRQ DQG FKHFNRXW GHVN LV ORFDWHG
WKHGZHOOLQJRUVOHHSLQJXQLWVEHLQJDOWHUHGVHH ZRXOG EH D SULPDU\ IXQFWLRQ DUHD 2WKHU
6HFWLRQV  DQG  IRU DOWHUDWLRQV H[DPSOHV ZRXOG EH WKH GLQLQJ DUHD RI D
ZKHUH $FFHVVLEOH XQLWV DQG 7\SH $ XQLWV DUH UHVWDXUDQW WKH PHHWLQJ URRPV RU H[KLELWLRQ
UHTXLUHG 7KLV H[FHSWLRQ LV VLPLODU WR ZKDW LV KDOOVLQDFRQIHUHQFHFHQWHUYLUWXDOO\DOO RIILFH
DOVRIRXQGLQWKHFRGHIRUFKDQJHRIRFFXSDQF\ DQG ZRUN DUHDV LQ D EXVLQHVV EXLOGLQJ DQG
ZKHUH OHVV WKDQ D /HYHO  DOWHUDWLRQ LV UHWDLOGLVSOD\DUHDVLQDPHUFDQWLOHRFFXSDQF\
RFFXUULQJ $ /HYHO  DOWHUDWLRQ LV JUHDWHU WKDQ 7KHNH\FRQFHSWLVWKDWDSULPDU\IXQFWLRQDUHD
 SHUFHQW RI WKH DUHD RI WKH EXLOGLQJ 7KLV LV RQH WKDW FRQWDLQV D PDMRU DFWLYLW\ RI WKH
IDFLOLW\$UHDVWKDWFRQWDLQDFWLYLWLHVQRWUHODWHG

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

WRWKHPDLQSXUSRVHRIWKHIDFLOLW\ZRXOGQRWEH HQWUDQFHV DFFHVV WKURXJKRXW WKH IDFLOLW\

FRQVLGHUHG D SULPDU\ IXQFWLRQ DUHD )RU DFFHVV WR VHUYLFHV LQ WKH IDFLOLW\ WRLOHW DQG
H[DPSOH D PHFKDQLFDO HTXLSPHQW URRP EDWKLQJ URRPV DQG ILQDOO\ GULQNLQJ IRXQWDLQV
VWRUDJH FORVHW WRLOHW IDFLOLWLHV FRUULGRUV (YDOXDWLRQ RQ KRZ DQG ZKHUH WKH PRQH\
ORXQJHV DQG ORFNHU URRPV ZRXOG QRW EH DYDLODEOHVKRXOG EHVW EHVSHQWPXVWEHPDGH
FRQVLGHUHG SULPDU\ IXQFWLRQ DUHDV :LWK WKLV RQ D FDVHE\FDVH EDVLV )RU H[DPSOH LI DQ
EDFNJURXQGLWLVFOHDUWKDWDUHDVFRQWDLQLQJD DFFHVVLEOH URXWH LV QRW DYDLODEOH WR DQ XSSHU
SULPDU\ IXQFWLRQ DUH FOHDUO\ PRUH FULWLFDO LQ OHYHODQGWKHFRVWRIDQHOHYDWRULVPRUHWKDQ
WHUPVRIWKHSXUSRVHIRUZKLFKSHRSOHHQWHUDQG  SHUFHQW RI WKH FRVW RI WKH UHQRYDWLRQ WKHQ
XVH WKH IDFLOLW\ WKHUHIRUH WKLV VHFWLRQ UHIOHFWV RWKHU DOWHUQDWLYHV FRXOG EH LQYHVWLJDWHG VXFK
WKDWZKHQVXFKDUHDVDUHDOWHUHGRUDGGHGLWLV DVDSODWIRUPOLIWRUOLPLWHGDFFHVVHOHYDWRURU
LPSRUWDQWWRUHTXLUHWKDWDQDFFHVVLEOHURXWHWR DGGLQJ WKH HOHYDWRU SLW DQG VKDIW DW WKLV WLPH
WKHSULPDU\IXQFWLRQDUHDEHSURYLGHG:KHQDQ ZLWKHOHYDWRUHTXLSPHQWDGGHGODWHU,IDOOVXFK
DFFHVVLEOH URXWH WR D SULPDU\ IXQFWLRQ DUHD LV LWHPV DUH LQ H[FHVV RI WKH  SHUFHQW OLPLW
UHTXLUHGE\WKLVVHFWLRQDQDFFHVVLEOHURXWHWR SHUKDSV WKH PRQH\ DYDLODEOH FRXOG EH VSHQW
VXFK IDFLOLWLHV LQFOXGLQJ DQ\ UHVWURRPV DQG WRZDUGPDNLQJWKHWRLOHWURRPVDFFHVVLEOH7KH
GULQNLQJIRXQWDLQVVHUYLQJWKHSULPDU\IXQFWLRQ LGHD LV WKDW H[LVWLQJ EXLOGLQJV ZRXOG EHFRPH
DUHD PXVW DOVR EH PDGH DFFHVVLEOH HYHQ IXOO\DFFHVVLEOHRYHUWLPH
WKRXJK VXFK IDFLOLWLHV DQG DUHDV PD\ QRW E\ ™ ([FHSWLRQV  DQG  LGHQWLI\ FHUWDLQ DOWHUDWLRQV
WKHPVHOYHV EH FRQVLGHUHG SULPDU\ IXQFWLRQ WKDWDUHQRWLQWHQGHGWRWULJJHUWKHUHTXLUHPHQW
DUHDV 7KLV LV QRW MXVW WKH URXWH WR WKH IRU SURYLGLQJ DQ DFFHVVLEOH URXWH WR D SULPDU\
EDWKURRPV DQG GULQNLQJ IRXQWDLQV WKH IXQFWLRQ DUHD $OWHUDWLRQV OLPLWHG WR VXFK
EDWKURRPV DQG GULQNLQJ IRXQWDLQV WKHPVHOYHV HOHPHQWV DV ZLQGRZV KDUGZDUH RSHUDWLQJ
PXVWDOVREHLPSURYHGZKHQQRWDFFHVVLEOH FRQWUROV HOHFWULFDO RXWOHWV VLJQDJH
™ 7KHUHDUHFRQGLWLRQVXQGHUZKLFKLWPD\QRWEH PHFKDQLFDO HOHFWULFDO DQG ILUH SURWHFWLRQ
UHDVRQDEOH WR VWULFWO\ HQIRUFH WKLV UHTXLUHPHQW V\VWHPVLQFOXGLQJDOWHUDWLRQVIRUWKHSXUSRVHRI
IRUDQDFFHVVLEOHURXWHWRDQDOWHUHGRUDGGHG DEDWLQJ D KD]DUGRXV PDWHULDOV FLUFXPVWDQFH
SULPDU\IXQFWLRQDUHD([FHSWLRQDSSURDFKHV GRQRWDIIHFWWKHXVDELOLW\RIDSULPDU\IXQFWLRQ
WKLV E\ XWLOL]LQJ WKH FRVW RI WKH DOWHUDWLRQV RU DUHD LQ WKH VDPH PDQQHU DV DOWHUDWLRQV WKDW
DGGLWLRQDVDEDVLVIRUGHWHUPLQLQJLISURYLGLQJ DIIHFW WKH IORRU SODQ RU WKH FRQILJXUDWLRQ
DFRPSOHWHDFFHVVLEOHURXWHLVUHDVRQDEOH7KH ORFDWLRQ RU VL]H RI URRPV RU VSDFHV ,W LV
UHTXLUHPHQW IRU D FRPSOHWH DFFHVVLEOH URXWH WKHUHIRUH FRQVLGHUHG XQUHDVRQDEOH WR UHTXLUH
GRHV QRW DSSO\ ZKHQ WKH FRVW RI SURYLGLQJ LW WKHLQVWDOODWLRQRIDQDFFHVVLEOHURXWHZKHQWKH
H[FHHGVSHUFHQWRIWKHFRVWRIWKHDOWHUDWLRQV VFRSHRIDOWHUDWLRQVLVOLPLWHGWRWKDWUHIOHFWHGLQ
RUDGGLWLRQWRWKHSULPDU\IXQFWLRQDUHD7KHVH WKHVHH[FHSWLRQV
FRVWV DUH LQWHQGHG WR EH EDVHG RQ WKH DFWXDO ™ 1RWH WKDW WKH FRVWV IRU WKHVH LWHPV DUH QRW
FRVWV RI WKH SODQQHG DOWHUDWLRQV RU DGGLWLRQ WR ³EDFNHGRXW´RIWKHWRWDOFRVWIRUWKHDOWHUDWLRQ
WKHSULPDU\IXQFWLRQDUHDEHIRUHFRQVLGHUDWLRQ EHIRUHDSSO\LQJ([FHSWLRQ([FHSWLRQVDQG
RIWKHFRVWRISURYLGLQJDQDFFHVVLEOHURXWH)RU  DUH DOWHUDWLRQV OLPLWHG WR WKH VSHFLILF LWHPV
H[DPSOH LI WKH SODQQHG DOWHUDWLRQV ZLOO FRVW UHIHUHQFHG
 65 QRW LQFOXGLQJ WKH FRVW RI DQ ™ ([FHSWLRQ  LV LQWHQGHG WR DYRLG SHQDOL]LQJ D
DFFHVVLEOHURXWHWRDSULPDU\IXQFWLRQDUHDWKLV EXLOGLQJRZQHUZKRLVXQGHUWDNLQJDOWHUDWLRQVRU
H[FHSWLRQZRXOG DSSO\ LIWKHDGGLWLRQDOFRVW RI DGGLWLRQV IRU WKH SXUSRVH RI LQFUHDVLQJ
SURYLGLQJ WKH DFFHVVLEOH URXWH ZRXOG H[FHHG DFFHVVLELOLW\ ,W LV DSSURSULDWH WR HQFRXUDJH
65 RZQHUV WR PDNH VXFK DOWHUDWLRQV ZLWKRXW
™ ,WLVQRWWKHLQWHQWWRH[HPSWDOOUHTXLUHPHQWVIRU UHTXLULQJWKHPWRGRPRUHZRUNVLPSO\EHFDXVH
DFFHVVLELOLW\ ZKHQ WKH WRWDO FRVW IRU SURYLGLQJ WKH\FKRVHWRLQFUHDVHWKHDFFHVVLELOLW\RIWKH
WKH DFFHVVLEOH URXWH H[FHHGV WKH SHUFHQW VSDFH7KLVFRXOGRWKHUZLVHKDYHWKHRSSRVLWH
WKUHVKROG ,PSURYHPHQWV WR WKH DFFHVVLEOH HIIHFWRIGLVFRXUDJLQJVXFKDOWHUDWLRQVWRDYRLG
URXWHDUHUHTXLUHGWRWKHH[WHQWWKDWFRVWVGRQRW WKH H[SHQVH RI XQGHUWDNLQJ PRUH ZRUN DQG
H[FHHG  SHUFHQW RI WKH FRVW WR WKH SODQQHG H[SHQVH WKDQ ZDV RULJLQDOO\ SODQQHG )RU
DOWHUDWLRQRUDGGLWLRQ,WLVQRWUHTXLUHGWKDWWKH H[DPSOH$'$UHTXLUHVWKDWRZQHUVRIH[LVWLQJ
IXOOSHUFHQWEHVSHQW,IWKHDFFHVVLEOHURXWH EXLOGLQJV UHPRYH FHUWDLQ H[LVWLQJ EDUULHUV WR
LQFOXGLQJ DFFHVVLEOH EDWKURRPV DQG GULQNLQJ DFFHVVLELOLW\ 5HPRYDO RI VXFK EDUULHUV PD\
IRXQWDLQV LV DOUHDG\ SURYLGHG QR DGGLWLRQDO UHTXLUH D SHUPLW IURP WKH EXLOGLQJ RIILFLDO ,W
H[SHQGLWXUHLVUHTXLUHG1RWHWKDWWKHUHLVQRWD ZRXOG EH XQUHDVRQDEOH WR KDYH VXFK DFWLYLW\
SULRULW\ OLVW JLYHQ IRU ZKHUH PRQH\ VKRXOG EH WULJJHU WKH PDQGDWRU\ UHTXLUHPHQW IRU IXUWKHU
VSHQW RQ LPSURYLQJ WKH DFFHVVLEOH URXWH 7KH DOWHUDWLRQV WR DFFRPSOLVK DFFHVVLELOLW\ EH\RQG
ORJLFDO SURJUHVVLRQ LV DFFHVV WR WKH VLWH WKH RULJLQDOO\ SODQQHG ZRUN ,Q SULQFLSOH WKH
DFFHVVLEOH H[WHULRU URXWHV WR DFFHVVLEOH FRGHWDNHVWKHYLHZWKDWVRPHH[WHQWRIJUHDWHU

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

DFFHVVLELOLW\LVSRVLWLYHSURJUHVVDQGVKRXOGEH XQUHDVRQDEOHWRUHTXLUHDWOHDVWSHUFHQWRI
HQFRXUDJHGQRWSHQDOL]HG WKH HQWUDQFHV WR EH DFFHVVLEOH ,Q DGGLWLRQ WR
™ :KHUHWKHDOWHUDWLRQVUHVXOWLQ7\SH%GZHOOLQJ WKH SHUFHQW DFFHVVLEOH SXEOLF HQWUDQFHV
XQLWV EHLQJ SURYLGHG ZKHUH QRQH SUHYLRXVO\ UHTXLUHPHQW HQWUDQFHV WKDW KDYH D VSHFLILF
H[LVWHG6HFWLRQ([FHSWLRQ([FHSWLRQ IXQFWLRQ RU SURYLGH DFFHVV WR RQO\ FHUWDLQ
 ZRXOG REYLDWH WKH QHHG IRU DQ\ DGGLWLRQDO SRUWLRQVRIWKHIDFLOLW\PXVWEHDGGUHVVHG
PRQH\ WR EH VSHQW WRZDUG SURYLGLQJ DQ ™ ,I WKH EXLOGLQJ DOUHDG\ KDV WKH DFFHVVLEOH
DFFHVVLEOH URXWH WR WKRVH 7\SH % GZHOOLQJ RU HQWUDQFHVUHTXLUHGE\6%&6HFWLRQ
VOHHSLQJ XQLWV 7KLV LV LQWHQGHG WR HQFRXUDJH DQHQWUDQFHWKDWLVEHLQJDOWHUHGLVQRWUHTXLUHG
WKH FUHDWLRQ RI VXFK XQLWV ZLWKRXW SHQDOL]LQJ WREHPDGHDFFHVVLEOHKRZHYHULIWKHHQWUDQFH
EXLOGLQJRZQHUV6LPLODUWR6HFWLRQWKLV ZDVUHTXLUHGWREHPDGHDFFHVVLEOHDVSDUWRI
H[FHSWLRQLVLQWHQGHGWRDGGUHVVWKHFRQFHUQV WKH URXWH WR WKH DOWHUHG SULPDU\ IXQFWLRQ DUHD
RI VLWH LPSUDFWLFDOLW\ IRU SURYLGLQJ DFFHVVLEOH WKHH[FHSWLRQZRXOGQRWDSSO\,IHQWUDQFHVDUH
URXWHV WR DQG LQWR H[LVWLQJ EXLOGLQJV SURYLGLQJ QRW DFFHVVLEOH DSSURSULDWH VLJQDJH PDUNLQJ
7\SH%GZHOOLQJXQLWV VXFK HQWUDQFHV DQG GLUHFWLQJ SHUVRQV ZLWK
™ 7KLVDOVRUHLQIRUFHVWKHLQWHQWWKDWWKHLQFOXVLRQ GLVDELOLWLHVWRWKHQHDUHVWDFFHVVLEOHHQWUDQFHLV
RI7\SH%XQLWVLVQRWPHDQWWRUHTXLUHHOHYDWRUV UHTXLUHG
ZKHQDOWHUDWLRQVDUHSHUIRUPHGRQXSSHUIORRUV
LQ QRQHOHYDWRU EXLOGLQJV VHH H[FHSWLRQV WR (OHYDWRUV  $OWHUHG HOHPHQWV RI H[LVWLQJ
6HFWLRQ7KHVHDUHDVZRXOGKDYHEHHQ HOHYDWRUVVKDOOFRPSO\ZLWK$60($DQG,&&
H[HPSWHGLIEXLOWQHZXQGHUWKH6%&DQG $ 6XFK HOHPHQWV VKDOO DOVR EH DOWHUHG LQ
VKRXOGFRQWLQXHWREHH[HPSWHG HOHYDWRUVSURJUDPPHGWRUHVSRQGWRWKHVDPHKDOO
FDOOFRQWURODVWKHDOWHUHGHOHYDWRU
 6FRSLQJIRUDOWHUDWLRQV7KHSURYLVLRQVRI
6HFWLRQV  WKURXJK  VKDOO DSSO\ WR ™ 5HTXLUHPHQWVIRUQHZFRQVWUXFWLRQVWDWHWKDWDOO
DOWHUDWLRQVWRH[LVWLQJEXLOGLQJVDQGIDFLOLWLHV HOHYDWRUVRQDQDFFHVVLEOHURXWHPXVWEHIXOO\
DFFHVVLEOHLQDFFRUGDQFHZLWK,&&$,ID
™ 7KH VSHFLILF SURYLVLRQV RI WKLV VHFWLRQ DUH SDVVHQJHU HOHYDWRU LV DOWHUHG WKH DOWHUHG
LQWHQGHGWRUHIOHFWFRQGLWLRQVXQGHUZKLFKOHVV HOHPHQWPXVWEHDFFHVVLEOHLQDFFRUGDQFHZLWK
WKDQ IXOO DFFHVVLELOLW\ DV ZRXOG EH UHTXLUHG LQ WKH UHTXLUHPHQWV IRU H[LVWLQJ HOHYDWRUV LQ
QHZFRQVWUXFWLRQLVSHUPLWWHGLQDOWHUHGDUHDV 6HFWLRQ  RI ,&& $ ,I WKH DOWHUHG
$V SUHYLRXVO\ GLVFXVVHG 6HFWLRQ  HOHYDWRULVSDUWRIDEDQNRIHOHYDWRUVWKHVDPH
UHTXLUHVDOWHUDWLRQVWRFRPSO\ZLWKWKHIXOOUDQJH HOHPHQW PXVW EH PDGH DFFHVVLEOH LQ HYHU\
RI DFFHVVLELOLW\UHODWHG SURYLVLRQV RI WKH FRGH HOHYDWRUWKDWLVSDUWRIWKDWEDQN7KHSXUSRVH
IRU QHZ FRQVWUXFWLRQ 7KLV VHFWLRQ UHIOHFWV D RI WKLV UHTXLUHPHQW LV WR KDYH FRQVLVWHQF\
UHDVRQDEOH VHW RI FRQGLWLRQV XQGHU ZKLFK D DPRQJ HOHYDWRUV LQ D EDQN VR WKDW GLVDEOHG
GLIIHUHQWOHYHORIDFFHVVLELOLW\FDQEHSURYLGHG SHRSOH DUH QRW UHTXLUHG WR ZDLW IRU D VSHFLILF
6HFWLRQV  WKURXJK  DUH SDUW RI HOHYDWRUZKHQWKHJHQHUDOSRSXODWLRQFDQWDNH
WKHFRGH¶VFRRUGLQDWLRQHIIRUWZLWK,&&$ WKH ILUVW DYDLODEOH HOHYDWRU ,&& $ DOVR
DQG WKH UHFRPPHQGDWLRQV IRU WKH $'$$* SURYLGHV DFFHVVLELOLW\ UHTXLUHPHQWV IRU OLPLWHG
5HYLHZ)HGHUDO$GYLVRU\&RPPLWWHH XVHOLPLWHG DFFHVV /8/$ HOHYDWRUV ,&&
(QWUDQFHV$FFHVVLEOHHQWUDQFHVVKDOOEH $ 6HFWLRQ  DQG SULYDWH UHVLGHQFH
HOHYDWRUV ,&& $ 6HFWLRQ  :KLOH
SURYLGHGLQDFFRUGDQFHZLWK6HFWLRQ
WKHVHW\SHVRIHOHYDWRUVFDQVHUYHDVSDUWRIDQ
([FHSWLRQ:KHUHDQDOWHUDWLRQLQFOXGHVDOWHUDWLRQV DFFHVVLEOHURXWHWKHLUXVHLVOLPLWHGE\$60(
WR DQ HQWUDQFH DQG WKH IDFLOLW\ KDV DQ DFFHVVLEOH $
HQWUDQFHWKHDOWHUHGHQWUDQFHLVQRWUHTXLUHGWREH
DFFHVVLEOHXQOHVVUHTXLUHGE\6HFWLRQ6LJQV 3ODWIRUPOLIWV3ODWIRUPZKHHOFKDLUOLIWV
FRPSO\LQJZLWK6HFWLRQRIWKH6%&VKDOO FRPSO\LQJ ZLWK ,&& $ DQG LQVWDOOHG LQ
EHSURYLGHG DFFRUGDQFHZLWK$60($VKDOOEHSHUPLWWHGDV
DFRPSRQHQWRIDQDFFHVVLEOHURXWH
™ 7KLVSURYLVLRQLVFRQWDLQHGKHUHWRSRLQWWRWKH
DFFHVVLELOLW\SURYLVLRQVRI6%&&KDSWHU ™ 7KLV VHFWLRQ SURYLGHV IRU WKH XVH RI SODWIRUP
IRUHQWUDQFHV$IDFLOLW\LVQRWDFFHVVLEOHLIWKH ZKHHOFKDLU OLIWVLQH[LVWLQJEXLOGLQJV,QRUGHU
HQWUDQFHV LQWR LW DUH LQDFFHVVLEOH 6%&  WRFUHDWHDQ DFFHVVLEOHURXWH ZKHUHWKHUH DUH
6HFWLRQHVWDEOLVKHVUHDVRQDEOHFULWHULDIRU FKDQJHVLQIORRUOHYHOVWKHSURYLVLRQVIRUQHZ
SURYLGLQJDFFHVVLEOHHQWUDQFHV$IDFLOLW\LVQRW FRQVWUXFWLRQ ZRXOG PRVW RIWHQ UHTXLUH WKH
UHTXLUHGWRKDYHDOORILWVHQWUDQFHVDFFHVVLEOH LQVWDOODWLRQRIDQHOHYDWRURUUDPS3ODWIRUPOLIWV
LQRUGHUWRSURYLGHUHDVRQDEOHDFFRPPRGDWLRQ DUH DOORZHG LQ QHZ FRQVWUXFWLRQ IRU OLPLWHG
WR GLVDEOHG SHUVRQV ,I D IDFLOLW\ KDV PXOWLSOH FRQGLWLRQVVHH6%&6HFWLRQ,IWKH
SXEOLF HQWUDQFHV LW LV QRW FRQVLGHUHG VSDFH LQ DQ H[LVWLQJ EXLOGLQJ SUHFOXGHV WKH

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

LQVWDOODWLRQRIDQHOHYDWRURUUDPSDSODWIRUPOLIW ™ 7KLV VHFWLRQ UHFRJQL]HV WKH FLUFXPVWDQFHV

PD\ EH WKH RQO\ SUDFWLFDO VROXWLRQ *LYHQ WKH ZKHUH GXH WR H[LVWLQJ VLWH RU FRQILJXUDWLRQ
FKRLFHEHWZHHQQRDFFHVVLELOLW\RUDFFHVVLELOLW\ FRQVWUDLQWV D UDPS ZLWK D VORSH RI RQHXQLW
E\DSODWIRUPOLIWDFFHVVLELOLW\LVSUHIHUDEOH YHUWLFDOLQXQLWVKRUL]RQWDOPD\QRWEH
™ 3UHYLRXVO\ SODWIRUP OLIW UHTXLUHPHQWV ZHUH IHDVLEOH$VWHHSHUVORSHLVDOORZHGZKHUHWKH
DGGUHVVHG LQ WKH HOHYDWRU VWDQGDUG $60( HOHYDWLRQ FKDQJH GRHV QRW H[FHHG  PP
$EXWWKH\DUHQRZDGGUHVVHGLQWKHLURZQ )XUWKHU UDPS UHTXLUHPHQWV VXFK DV ZLGWK
VWDQGDUG $60( $ 2QH RI WKH PDQ\ ODQGLQJVHWFDUHVHWIRUWKLQ6%&6HFWLRQ
FKDQJHVZDVWKHUHPRYDORIWKHUHTXLUHPHQWIRU 
NH\ RSHUDWLRQ ZKLFK SUHYLRXVO\ GLVFRXUDJHG ™ ,QH[LVWLQJEXLOGLQJVUDPSVWKDWULVHPPRU
LQGHSHQGHQW XWLOL]DWLRQ RI SODWIRUP OLIWV 1RWH OHVV PD\ KDYH D VORSH DV VWHHS DV RQH XQLW
WKDW LQ DFFRUGDQFH ZLWK 6%&  6HFWLRQ YHUWLFDOLQHLJKWXQLWVKRUL]RQWDO,QH[LVWLQJ
SODWIRUPOLIWVDUHDOVRSHUPLWWHGIRUDQ EXLOGLQJVUDPSVWKDWULVHPPRUOHVVPD\
DFFHVVLEOH PHDQV RI HJUHVV KRZHYHU KDYHDVORSHDVVWHHSDVRQHXQLWYHUWLFDOLQ
DFFHVVLEOHPHDQVRIHJUHVVDUHQRWUHTXLUHGLQ XQLWVKRUL]RQWDO,ILWLVSRVVLEOHWRSURYLGH
H[LVWLQJ EXLOGLQJV XQGHUJRLQJ DOWHUDWLRQV LQ D OHVVHU VORSH LW LV GHVLUDEOH WR GR VR 7KHVH
DFFRUGDQFH ZLWK 6%&  6HFWLRQ  VWHHSHUVORSHVVKRXOGRQO\EHXWLOL]HGZKHQWKH
([FHSWLRQ RQH XQLW YHUWLFDO LQ  XQLWV KRUL]RQWDO 
™ $ FKDLU OLIW LV QRW DFFHSWDEOH DV SDUW RI DQ VORSHLVQRWSRVVLEOH
DFFHVVLEOH URXWH LQ HLWKHU QHZ RU H[LVWLQJ
FRQVWUXFWLRQ )RU H[DPSOHV RI WKH GLIIHUHQFH $FFHVVLEOH GZHOOLQJ RU VOHHSLQJ XQLWV
EHWZHHQDFKDLUOLIWDQGDSODWIRUPOLIWVHHWKH :KHUH*URXS,,,55RU5GZHOOLQJ
FRPPHQWDU\WR6HFWLRQRIWKH6%& RU VOHHSLQJ XQLWV DUH EHLQJ DOWHUHG RU DGGHG WKH
UHTXLUHPHQWV RI 6HFWLRQ  RI WKH 6%&  IRU
6WDLUZD\V DQG HVFDODWRUV LQ H[LVWLQJ $FFHVVLEOHXQLWVDSSO\RQO\WRWKHTXDQWLW\RIVSDFHV
EXLOGLQJV,QDOWHUDWLRQVFKDQJHRIRFFXSDQF\RU EHLQJDOWHUHGRUDGGHG
DGGLWLRQV ZKHUH DQ HVFDODWRU RU VWDLUZD\ LV DGGHG
ZKHUHQRQHH[LVWHGSUHYLRXVO\DQGPDMRUVWUXFWXUDO ™ 7KLV VHFWLRQ VHWV IRUWK WKH UDWH IRU SURYLGLQJ
PRGLILFDWLRQV DUH QHFHVVDU\ IRU LQVWDOODWLRQ DQ $FFHVVLEOHGZHOOLQJRUVOHHSLQJXQLWVLQ*URXSV
, , , 5 5 DQG 5 ZKHUH VXFK
DFFHVVLEOH URXWH VKDOO EH SURYLGHG LQ DFFRUGDQFH
IDFLOLWLHVDUHDOWHUHGRUZKHUHXQLWVDUHDGGHG
ZLWK6HFWLRQRIWKH6%& $VVXPLQJWKDW$FFHVVLEOHXQLWVDUHQRWDOUHDG\
™ ,IDVWDLUZD\RUHVFDODWRULVDGGHGDVSDUWRIDQ SURYLGHGWKHQXPEHURI$FFHVVLEOHXQLWVWREH
DOWHUDWLRQ LQ D ORFDWLRQ ZKHUH RQH GLG QRW LQFRUSRUDWHG LQWR HDFK DOWHUDWLRQ LV EDVHG RQ
SUHYLRXVO\H[LVWWKHDOWHUDWLRQPXVWDOVRLQFOXGH WKH QXPEHU EHLQJ DOWHUHG RU DGGHG )RU
DQ DFFHVVLEOH URXWH EHWZHHQ WKH VDPH WZR H[DPSOHLIDQXUVLQJKRPHZDVEHLQJDOWHUHGD
OHYHOV:KHUHPDMRUVWUXFWXUDOPRGLILFDWLRQVDUH SRUWLRQDWDWLPHSHUFHQWRIWKHXQLWVEHLQJ
UHTXLUHG WR LQVWDOO WKH VWDLUZD\ WKHUH LV QR DOWHUHGHDFKWLPHZRXOGEHUHTXLUHGWREHIXOO\
ORQJHU WKH DUJXPHQW WKDW LW LV WHFKQLFDOO\ ZKHHOFKDLUDFFHVVLEOH,WLVQRWWKHLQWHQWWKDWDOO
LQIHDVLEOH WR DGG WKH DFFHVVLEOH URXWH WR WKH XQLWV EHLQJ DOWHUHG DUH UHTXLUHG WR EH
RWKHU OHYHO ,I DQ DFFHVVLEOH URXWH LV DOUHDG\ $FFHVVLEOHXQLWVXQWLOSHUFHQWRIWKHXQLWVLQ
DYDLODEOH EHWZHHQ WKH WZR OHYHOV RU LI WKH WKH HQWLUH IDFLOLW\ DUH $FFHVVLEOH 7KH WRWDO
VWDLUZD\ RU HVFDODWRU LV UHSODFLQJ DQ H[LVWLQJ QXPEHURI$FFHVVLEOHXQLWVLQWKHIDFLOLW\LVQRW
VWDLUZD\ RU HVFDODWRU WKLV UHTXLUHPHQW LV QRW UHTXLUHG WR H[FHHG WKDW UHTXLUHG IRU QHZ
DSSOLFDEOH,QFRQMXQFWLRQZLWK6HFWLRQLI FRQVWUXFWLRQ ,W LV XQUHDVRQDEOH WR UHTXLUH D
WKHUHTXLUHPHQWIRUWKHDFFHVVLEOHURXWHZRXOG JUHDWHU OHYHO RI DFFHVVLELOLW\ LQ DQ H[LVWLQJ
EH LQ H[FHVV RI ZKDW LV UHTXLUHG IRU QHZ EXLOGLQJWKDQLVUHTXLUHGLQQHZFRQVWUXFWLRQ
FRQVWUXFWLRQVXFKDVDQDFFHVVLEOHURXWHWRDQ
7\SH$GZHOOLQJRUVOHHSLQJXQLWV:KHUH
DUHD WKDW ZDV H[HPSWHG E\ 6%&  6HFWLRQ
RUWKLVUHTXLUHPHQW PRUHWKDQ*URXS5GZHOOLQJRUVOHHSLQJXQLWV
LVQRWDSSOLFDEOH7KHLQWHQWLVWKDWLIDURXWHLV DUH EHLQJ DOWHUHG RU DGGHG WKH UHTXLUHPHQWV RI
SURYLGHG EHWZHHQ DFFHVVLEOH OHYHOV IRU D 6HFWLRQRIWKH6%&IRU7\SH$XQLWVDSSO\
QRQGLVDEOHG SHUVRQWR XVHLWLVUHDVRQDEOHWR RQO\WRWKHTXDQWLW\RIWKHVSDFHVEHLQJDOWHUHGRU
DOVRH[SHFWDQDFFHVVLEOHURXWH DGGHG
5DPSV  :KHUH VORSHV VWHHSHU WKDQ ™ 7\SH$XQLWV DUHUHTXLUHGLQQHZFRQVWUXFWLRQ
DOORZHG E\ 6HFWLRQ  RI WKH 6%&  DUH ZKHUH  RU PRUH DSDUWPHQWV LQFOXGLQJ
QHFHVVLWDWHGE\VSDFHOLPLWDWLRQVWKHVORSHRIUDPSV FRQGRPLQLXP VW\OH DUH FRQVWUXFWHG RQ D VLWH
LQ RU SURYLGLQJ DFFHVV WR H[LVWLQJ IDFLOLWLHV VKDOO *URXS5UHTXLUHPHQWVIRU7\SH$XQLWVFRXOG
LQFOXGH VRPH WRZQKRXVHVW\OH XQLWV VHH WKH
FRPSO\ZLWK7DEOH

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

FRPPHQWDU\WR6%&6HFWLRQ DUHRFFXUULQJWKDWDIIHFWPRUHWKHSHUFHQWRI
IRUDGGLWLRQDOLQIRUPDWLRQ WKHDUHDRIWKHEXLOGLQJ7KH7\SH%XQLWVLQWKH
™ 1RWH WKDW WKLV UHTXLUHPHQW LV DSSOLFDEOH ZKHQ IDFLOLW\DUHQRWUHTXLUHGWRH[FHHGWKDWUHTXLUHG
 RU PRUH XQLWV DUH LQFOXGHG LQ WKH IRU QHZ FRQVWUXFWLRQ DV LQGLFDWHG LQ 6HFWLRQ
FRQVWUXFWLRQ SURMHFW QRW ZKHQ DQ LQGLYLGXDO  DQG 6%&  6HFWLRQ  ,W LV
RZQHUSHUIRUPVDOWHUDWLRQVWRKLVRUKHUFRQGR XQUHDVRQDEOH WR UHTXLUH D JUHDWHU OHYHO RI
ZKHQWKHUHDUHRUPRUHXQLWVLQWKHEXLOGLQJ DFFHVVLELOLW\ LQ DQ H[LVWLQJ EXLOGLQJ WKDQ LV
7KLV VHFWLRQ VHWV IRUWK WKH UDWH IRU SURYLGLQJ UHTXLUHG LQ QHZ FRQVWUXFWLRQ ,Q FRQVLGHUDWLRQ
7\SH$GZHOOLQJRUVOHHSLQJXQLWVLQ*URXS5 RI H[LVWLQJ VLWH FRQVWUDLQWV 6HFWLRQV 
IDFLOLWLHVLQDQDGGLWLRQZKHUHWKHUHLVDFKDQJH DQG  DOVR LQFOXGH H[FHSWLRQV IRU WKH
WR WKH IXQFWLRQ RI D VSDFH LH D FKDQJH RI DGGLWLRQDO DFFHVVLEOH URXWH UHTXLUHPHQWV LQ
RFFXSDQF\VXFKDVFUHDWLQJDSDUWPHQWVLQDQ VWUXFWXUHV ZKHUH 7\SH % XQLWV DUH DGGHG DV
ROG ZDUHKRXVH LQFUHDVLQJ WKH QXPEHU RI SDUW RI DQ DOWHUDWLRQ RU FKDQJH RI RFFXSDQF\
DSDUWPHQWV E\ FKDQJLQJ D VWRUDJH DUHD WR 1RWH WKDW WKLV H[FHSWLRQ LV QRW DSSOLFDEOH WR
DSDUWPHQW XQLWV RU UHFRQILJXULQJ ODUJHU XQLWV DGGLWLRQVZKHUH7\SH%XQLWVDUHUHTXLUHG
LQWR VPDOOHU XQLWV RU DQ DOWHUDWLRQ $VVXPLQJ
WKDW7\SH$XQLWVDUHQRWDOUHDG\SURYLGHGWKH 5DLVHG IORRUV LQ FRXUW URRPV  ,Q
QXPEHURI7\SH$XQLWVUHTXLUHGLVEDVHGRQWKH DOWHUDWLRQV DFFHVVLEOH ZKHHOFKDLU VSDFHV DUH QRW
QXPEHUEHLQJDGGHGRUDOWHUHG)RUH[DPSOHLI UHTXLUHG WR EH ORFDWHG ZLWKLQ WKH GHILQHG DUHD RI
D VWRU\ ZDV EHLQJ DGGHG WR DQ DSDUWPHQW UDLVHG IORRUV DQG VKDOO EH SHUPLWWHG WR EH ORFDWHG
EXLOGLQJRUDVWRU\LQDQDSDUWPHQWEXLOGLQJZDV RXWVLGHWKHVHVSDFHVZKHUHWKHUDPSRUOLIWDFFHVV
EHLQJ DOWHUHG WKH QXPEHU RI 7\SH $ XQLWV UHVWULFWVRUSURMHFWVLQWRWKHPHDQVRIHJUHVV
UHTXLUHGZRXOGEHEDVHGRQWKHQXPEHURIXQLWV
LQWKHQHZVWRU\RUWKHDUHDEHLQJDOWHUHGQRW ™ 7KLVH[FHSWLRQIRUUDLVHGIORRUVLQFRXUWURRPV
WKH QXPEHU RI XQLWV LQ WKH HQWLUH EXLOGLQJ ,I LVFRQVLVWHQWZLWK6HFWLRQVDQGRIWKH
7\SH$XQLWVDUHSURYLGHGWKHWRWDOQXPEHURI  $'$ 6WDQGDUGV IRU $FFHVVLEOH 'HVLJQ
7\SH $ XQLWV LQ WKH IDFLOLW\ LV QRW UHTXLUHG WR 7KHLQWHQWLVWKDWLIUDPSDFFHVVWRDUDLVHGIORRU
H[FHHG WKDW UHTXLUHG IRU QHZ FRQVWUXFWLRQ DV ZRXOG KDYH WKH UDPS OLPLWLQJ RU EORFNLQJ WKH
LQGLFDWHGLQ6HFWLRQ,WLVXQUHDVRQDEOHWR PHDQVRIHJUHVVIRUWKHJHQHUDOSRSXODWLRQ LQ
UHTXLUH D JUHDWHU OHYHO RI DFFHVVLELOLW\ LQ DQ WKH VSDFH DOWHUQDWLYH ORFDWLRQV IRU SRWHQWLDO
H[LVWLQJ EXLOGLQJ WKDQ LV UHTXLUHG LQ QHZ UDLVHGIORRUVDUHYLDEOH7KHVDPHDOWHUQDWLYHLV
FRQVWUXFWLRQ DYDLODEOHLIDSODWIRUPOLIWZRXOGHIIHFWLYHO\EHDQ
REVWUXFWLRQ IRU WKH JHQHUDO PHDQV RI HJUHVV
7\SH%GZHOOLQJRUVOHHSLQJXQLWV:KHUH IURPWKHFRXUWURRP
IRXURUPRUHWKDQ*URXS,,555
 7RLOHW URRPV  :KHUH LW LV
RU5GZHOOLQJRUVOHHSLQJXQLWVDUHEHLQJDGGHG
WHFKQLFDOO\ LQIHDVLEOH WR DOWHU H[LVWLQJ WRLOHW DQG
WKHUHTXLUHPHQWVRI6HFWLRQRIWKH 6%&
EDWKLQJURRPVWREHDFFHVVLEOHDQDFFHVVLEOHIDPLO\
IRU7\SH%XQLWVDSSO\RQO\WRWKHTXDQWLW\RIWKH
RUDVVLVWHGXVHWRLOHWRUEDWKLQJURRPFRQVWUXFWHGLQ
VSDFHVEHLQJDGGHG:KHUH*URXS,,5
DFFRUGDQFHZLWK6HFWLRQLVSHUPLWWHG7KH
55RU5GZHOOLQJRUVOHHSLQJXQLWVDUHEHLQJ
IDPLO\RUDVVLVWHGXVHWRLOHWRUEDWKLQJURRPVKDOO
DOWHUHG DQG ZKHUH ZRUN DUHD LV JUHDWHU WKDQ 
EHORFDWHGRQWKHVDPHIORRUDQGWKHVDPHDUHDDV
SHUFHQW RI WKH DJJUHJDWH DUHD RI WKH EXLOGLQJ WKH
WKH H[LVWLQJ WRLOHW RU EDWKLQJ URRPV $W WKH
UHTXLUHPHQWV RI 6HFWLRQ  RI WKH 6%&  IRU
LQDFFHVVLEOH WRLOHW DQG EDWKLQJ URRPV SURYLGH
7\SH%XQLWVDSSO\RQO\WRWKHTXDQWLW\RIWKHVSDFHV
GLUHFWLRQDO VLJQV LQGLFDWLQJ WKH ORFDWLRQ RI WKH
EHLQJDOWHUHG
QHDUHVW IDPLO\ RU DVVLVWHGXVH WRLOHW RU EDWKLQJ
™ ,QQHZFRQVWUXFWLRQ7\SH%XQLWVDUHUHTXLUHG URRP 7KHVH GLUHFWLRQDO VLJQV VKDOO LQFOXGH
ZKHUH IRXU RU PRUH GZHOOLQJ XQLWV RU VOHHSLQJ LQWHUQDWLRQDO V\PERO RI $FFHVVLELOLW\ DQG VLJQ
XQLWVDUHFRQVWUXFWHGWRJHWKHUDQGWKRVHXQLWV FKDUDFWHUV VKDOO PHHW WKH YLVXDO FKDUDFWHU
DUH ³LQWHQGHG WR EH RFFXSLHG DV D UHVLGHQFH´ UHTXLUHPHQWVLQDFFRUGDQFHZLWK,&&$
VHHFRPPHQWDU\6%&6HFWLRQ7KH
6%&UHIHUHQFHV6%&*URXS5IRU ™ 7KLVVHFWLRQGHDOVZLWKFLUFXPVWDQFHVLQZKLFK
DFFHVVLELOLW\ UHTXLUHPHQWV IRU 6%&  XQLWV LWLVWHFKQLFDOO\LQIHDVLEOHWRDOWHUH[LVWLQJWRLOHW
VHH WKH GHILQLWLRQ RI ³7RZQKRXVH´ DQG 6%& IDFLOLWLHV WR EH DFFHVVLEOH :KHUH QHZ
6HFWLRQ5 EDWKURRPVDUHFUHDWHG LQ H[LVWLQJEXLOGLQJV RU
™ 7KLV VHFWLRQ VHWV IRUWK WKH UDWH IRU SURYLGLQJ H[LVWLQJ EDWKURRPV DUH SDUW RI DQ DOWHUDWLRQ
7\SH%GZHOOLQJRUVOHHSLQJXQLWVLQ*URXS, ERWKWKHPHQ¶VDQGZRPHQ¶VIDFLOLWLHVZRXOGEH
,555RU5IDFLOLWLHV7\SH%XQLWV UHTXLUHG WR EH DFFHVVLEOH $Q DOWHUQDWLYH
DUH UHTXLUHG ZKHUH PRUH WKDQ IRXU XQLWV DUH VROXWLRQZKHQLWLVWHFKQLFDOO\LQIHDVLEOHWRDOWHU
DGGHGLQDQDGGLWLRQRUZKHUHPDMRUDOWHUDWLRQV WKHH[LVWLQJWRLOHWURRPVZRXOGEHWKHFUHDWLRQ

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

RI D VLQJOH IDPLO\ RU DVVLVWHGXVH  WRLOHW RU  7KUHVKROGV7KHPD[LPXPKHLJKW

EDWKLQJ URRP FRQWDLQLQJ DFFHVVLEOH IDFLOLWLHV RI WKUHVKROGV DW GRRUZD\V VKDOO EH  PP 6XFK
7KH UHTXLUHPHQWV IRU IDPLO\ RU DVVLVWHGXVH WKUHVKROGVVKDOOKDYHEHYHOHGHGJHVRQHDFKVLGH
WRLOHW IDFLOLWLHV LQ 6%&  6HFWLRQV 
WKURXJKSURYLGHJXLGDQFHRQZKDWLV ™ 7KUHVKROGV DW GRRUZD\V PD\ EH  PP
UHTXLUHGLQVXFKWRLOHWURRPV,IWKLVDOWHUQDWLYH PD[LPXP LQ H[LVWLQJ EXLOGLQJV ,Q QHZ
LV VHOHFWHG WKH URRP PXVW EH ORFDWHG RQ WKH FRQVWUXFWLRQ D W\SLFDO WKUHVKROG LV  PP
VDPHIORRUDQGLQWKHVDPHDUHDDVWKHH[LVWLQJ PD[LPXP LQ DFFRUGDQFH ZLWK WKH 6%& 
WRLOHWRUEDWKURRP7KLVLVWKHEHVWDOWHUQDWLYHWR 7KLV VHFWLRQ UHFRJQL]HV WKDW VXFK WKLQJV DV
SURYLGLQJ IXOO\ FRPSO\LQJ VHSDUDWH PHQ¶V DQG GLIIHUHQFHV LQ IORRU PDWHULDOV PD\ FUHDWH
ZRPHQ¶VIDFLOLWLHV,QDQ\FDVHWKHLQWHQWLVWKDW FKDQJHVLQHOHYDWLRQJUHDWHUWKDQWKDWDOORZHG
VRPH IRUP RI DQ DFFHVVLEOH WRLOHW URRP RU LQQHZFRQVWUXFWLRQ(GJHVRIWKUHVKROGVPXVW
EDWKLQJ IDFLOLW\ LV QHFHVVDU\ DQG PXVW EH EH EHYHOHG WR DOORZ IRU WKH SDVVDJH RI D
SURYLGHG ZKHHOFKDLU
™ 6LJQDJH PXVW EH SURYLGHG DW WKH LQDFFHVVLEOH  $PXVHPHQW ULGHV  :KHUH WKH
WRLOHW URRPV LQ DFFRUGDQFH ZLWK 6%& 
VWUXFWXUDO RU RSHUDWLRQDO FKDUDFWHULVWLFV RI DQ
6HFWLRQVDQGWRQRWLI\GLVDEOHG
SHUVRQV ZKHUH D IDFLOLW\ LV QRW DFFHVVLEOH DQG DPXVHPHQW ULGH DUH DOWHUHG WR WKH H[WHQW WKDW WKH
GLUHFWWKHPWRWKHQHDUHVWDFFHVVLEOHIDFLOLWLHV DPXVHPHQW ULGH¶V SHUIRUPDQFH GLIIHUV IURP WKDW
VSHFLILHGE\WKHPDQXIDFWXUHURUWKHRULJLQDOGHVLJQ
 'UHVVLQJ ILWWLQJ DQG ORFNHU WKHDPXVHPHQWULGHVKDOOFRPSO\ZLWKUHTXLUHPHQWV
URRPV:KHUHLWLVWHFKQLFDOO\LQIHDVLEOHWRSURYLGH IRUQHZFRQVWUXFWLRQLQ6HFWLRQRIWKH6%&
DFFHVVLEOH GUHVVLQJ ILWWLQJ RU ORFNHU URRPV DW WKH 
VDPH ORFDWLRQ DV VLPLODU W\SHV RI URRPV RQH
DFFHVVLEOH URRP RQ WKH VDPH OHYHO VKDOO EH ™ 7RWKHH[WHQWWKDWDPXVHPHQWULGHVDUHVXEMHFW
WR WKH DFFHVVLELOLW\ UHTXLUHPHQWV RI 6%& 
SURYLGHG :KHUH VHSDUDWHJHQGHU IDFLOLWLHV DUH
6HFWLRQ  WKH\ VKRXOG EH DFFHVVLEOH
SURYLGHGDFFHVVLEOHURRPVIRUHDFKJHQGHUVKDOOEH DQG XVDEOH E\ LQGLYLGXDOV ZLWK GLVDELOLWLHV
SURYLGHG 7KHVH VFRSLQJ SURYLVLRQV DUH IOH[LEOH
™ 7KLV VHFWLRQ WDNHV D VLPLODU DSSURDFK IRU SHUPLWWLQJ ODWLWXGH LQ WHUPV RI WKH PHWKRG RI
GUHVVLQJ URRPV DV SURYLGHG IRU LQ 6HFWLRQ DFFHVV HJ WUDQVIHU VHDW UROORQ VHDW RU
IRUWRLOHWURRPVDQGEDWKLQJIDFLOLWLHV WUDQVIHU GHYLFH WR OLIW WKH ULGHU 0RELOH DQG
,I LW LV WHFKQLFDOO\ LQIHDVLEOH WR DOWHU H[LVWLQJ SRUWDEOH ULGHV DUH H[HPSWHG 5LGHV ZLWKRXW
GUHVVLQJ URRPV WR EH DFFHVVLEOH WKHQ VSDFH VHDWV GHVLJQHG IRU FKLOGUHQ ZKR DUH DVVLVWHG
HOVHZKHUH RQ WKH OHYHO PXVW EH FRPPLWWHG WR RQWRWKHULGHRUFRQWUROOHGE\WKHXVHUDUHDOVR
SURYLGLQJQROHVVWKDQRQHDFFHVVLEOHGUHVVLQJ H[HPSWHG XQGHU 6%&  6HFWLRQ 
URRP ,Q WKLV FDVH LI WKH H[LVWLQJ GUHVVLQJ IURP SURYLGLQJ ZKHHOFKDLU WUDQVIHU VSDFHV
URRPVSURYLGHVHSDUDWHURRPVIRUHDFKJHQGHU 7HFKQLFDOFULWHULDFDQEHIRXQGLQWKH,&&
WKHQQROHVVWKDQRQHDFFHVVLEOHGUHVVLQJURRP $6HFWLRQDQGLQFOXGHVDFFHVVLEOH
IRUHDFKJHQGHUPXVWEHSURYLGHG URXWHV ORDG DQG XQORDG DUHDV ZKHHOFKDLU
VSDFHVRQULGHVVHDWVIRUWUDQVIHUDQGWUDQVIHU
 )XHOGLVSHQVHUV2SHUDEOHSDUWVRI GHYLFHV 5HFRJQL]LQJ WKH WHFKQLFDO LVVXHV
UHSODFHPHQWIXHOGLVSHQVHUVVKDOOEHSHUPLWWHGWREH DVVRFLDWHG ZLWK H[LVWLQJ DPXVHPHQW ULGHV
PPHDVXULQJIURPWKHVXUIDFHRIWKHYHKLFXODU FRPSOLDQFH ZLWK DFFHVVLELOLW\ UHTXLUHPHQWV LV
ZD\ZKHUHIXHOGLVSHQVHUVDUHLQVWDOOHGRQH[LVWLQJ UHTXLUHG ZKHQ WKH DPXVHPHQW ULGH LV
FXUEV H[WHQVLYHO\DOWHUHG
™ 7KHUHTXLUHPHQWVIRUQHZIXHOGLVSHQVHUVLH  +LVWRULFEXLOGLQJV7KHVHSURYLVLRQVVKDOO
JDVSXPSVFDQEHIRXQGLQ6HFWLRQRI DSSO\ WR EXLOGLQJV DQG IDFLOLWLHV GHVLJQDWHG DV
WKH 6%&  %DVLFDOO\ WKH LGHD LV WKDW WKH KLVWRULF VWUXFWXUHV WKDW XQGHUJR DOWHUDWLRQV RU D
FRQWUROV PXVW EH ZLWKLQ WKH UHDFK UDQJHV IRU FKDQJHRIRFFXSDQF\XQOHVVWHFKQLFDOO\LQIHDVLEOH
VRPHRQH VWDQGLQJ RQ WKH SDUNLQJ ORW VXUIDFH :KHUH FRPSOLDQFH ZLWK WKH UHTXLUHPHQWV IRU
+RZHYHU PDQ\ H[LVWLQJ IDFLOLWLHV KDYH JDV DFFHVVLEOHURXWHVUDPSVHQWUDQFHVRUWRLOHWURRPV
SXPSVORFDWHGRQUDLVHGLVODQGVDVDIHDWXUHIRU
ZRXOGWKUHDWHQRUGHVWUR\WKHKLVWRULFVLJQLILFDQFH
SURWHFWLRQ RI WKH SXPSV IURP DFFLGHQWDO
FRQWDFW7KLVVHFWLRQZRXOGDOORZWKHQHZJDV RI WKH IDFLOLW\ DV GHWHUPLQHG E\ WKH DSSOLFDEOH
SXPSZLWKWKHUHDFKUDQJHRIPPWR JRYHUQLQJDXWKRULW\WKHDOWHUQDWLYHUHTXLUHPHQWVRI
PPWREHORFDWHGRQWRSRIDPPFXUEDQG 6HFWLRQVWKURXJKIRUWKDWHOHPHQW
VWLOOPHHWWKHPD[LPXPUHDFKRIPP VKDOOEHSHUPLWWHG

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

([FHSWLRQ  7\SH % GZHOOLQJ RU VOHHSLQJ XQLWV DOWHUQDWLYHDYDLODEOHLVWRSURYLGHDQDFFHVVLEOH

UHTXLUHG E\ 6HFWLRQ RI WKH 6%&  DUH QRW URXWHIURPRQHVLWHDUULYDOSRLQWWRDQDFFHVVLEOH
UHTXLUHGWREHSURYLGHGLQKLVWRULFDOEXLOGLQJV HQWUDQFH

™ 7KH UHJXODWLRQV RI LQGLYLGXDO DGRSWLQJ 0XOWLOHYHO EXLOGLQJV DQG IDFLOLWLHV  $Q
MXULVGLFWLRQVPD\SURYLGHDGGLWLRQDOJXLGDQFHRU DFFHVVLEOH URXWH IURP DQ DFFHVVLEOH HQWUDQFH WR
OLPLWDWLRQVRQWKHXVHRIWKLVVHFWLRQ%DVLF$'$ SXEOLFVSDFHVRQWKHOHYHORIWKHDFFHVVLEOHHQWUDQFH
UHTXLUHPHQWV SHUPLW H[FHSWLRQV DQG VKDOOEHSURYLGHG
DOWHUQDWLYHV IRU KLVWRULF EXLOGLQJV 7KHVH
PLQLPXP UHTXLUHPHQWV SURYLGH UHDVRQDEOH ™ ,W LV QRW UHTXLUHG LQ EXLOGLQJ DOWHUDWLRQ WKDW
DFFRPPRGDWLRQV IRU EXLOGLQJ XVHUV )RU WKLV DFFHVVLELOLW\WRVSDFHVDERYHRUEHORZWKHOHYHO
VHFWLRQ WR EH DSSOLFDEOH WKH EXLOGLQJ PXVW EH RI DFFHVVLEOH HQWUDQFH EH SURYLGHG )XOO
UHJLVWHUHG DV KLVWRULF +LVWRULF EXLOGLQJV DUH FRPSOLDQFHIRUQHZFRQVWUXFWLRQPLJKWUHTXLUH
WUHDWHG PXFK WKH VDPH DV SURYLGHG IRU LQ DQDFFHVVLEOHURXWHWROHYHOVDERYHRUEHORZDV
6HFWLRQV  DQG  LQ WKDW D KLVWRULF ZHOO DV WKURXJKRXW WKH HQWUDQFH OHYHO ,I WKLV
EXLOGLQJ WKDW LV DOWHUHG RU KDV XQGHUJRQH D UHTXLUHPHQW ZRXOG DGYHUVHO\ DIIHFW WKH
FKDQJH RI RFFXSDQF\ LV H[SHFWHG WR FRPSO\ KLVWRULFDO VLJQLILFDQFH RI WKH EXLOGLQJ WKH
ZLWK DFFHVVLELOLW\ UHTXLUHPHQWV XQOHVV DOWHUQDWLYH LV WR SURYLGH DQ DFFHVVLEOH URXWH
WHFKQLFDO LQIHDVLELOLW\ FDQ EH GHPRQVWUDWHG IURPWKHDFFHVVLEOHHQWUDQFHWRDOOVSDFHVRSHQ
KRZHYHU WKLV VHFWLRQ DOVR JRHV RQ WR WRWKHSXEOLFRQWKHHQWUDQFHOHYHO,IHOHYDWRUV
DFNQRZOHGJH WKDW WKH KLVWRULF FKDUDFWHU RI D DUHSURYLGHGEXWDUHQRWDFFHVVLEOHVLJQDJHLQ
EXLOGLQJ PD\ EH DGYHUVHO\ DIIHFWHG E\ VWULFW DFFRUGDQFH ZLWK 6%&  6HFWLRQ  LV
FRPSOLDQFH ZLWK DFFHVVLELOLW\ SURYLVLRQV )RU UHTXLUHG
H[DPSOH FRPSOLDQFH ZLWK GRRU ZLGWK (QWUDQFHV  $W OHDVW RQH PDLQ HQWUDQFH
UHTXLUHPHQWV PD\ QHFHVVLWDWH WKH UHPRYDO RI VKDOOEHDFFHVVLEOH
DQ H[LVWLQJ VHW RI GRRUV WKDW LV FULWLFDO WR WKH
KLVWRULFFKDUDFWHURIWKHEXLOGLQJ7RDVVLVWWKH ([FHSWLRQV
EXLOGLQJ RIILFLDO LQ GHWHUPLQLQJ LI WKH UHTXLUHG
SURYLVLRQV DUH GHWULPHQWDO WR WKH KLVWRULF
 ,IDPDLQHQWUDQFHFDQQRWEHPDGHDFFHVVLEOH
VLJQLILFDQFH UHFRPPHQGHG JXLGHOLQHV KDYH DQ DFFHVVLEOH QRQSXEOLF HQWUDQFH WKDW LV
EHHQ LQFRUSRUDWHG LQWR $SSHQGL[ % 6HFWLRQ XQORFNHGZKLOHWKHEXLOGLQJLVRFFXSLHGVKDOO
% EHSURYLGHGRU
™ 7KLV VHFWLRQ LV LQWHQGHG WR H[HPSW VXFK  ,IDPDLQHQWUDQFHFDQQRWEHPDGHDFFHVVLEOH
FRQGLWLRQV LQ RUGHU WR PDLQWDLQ WKH KLVWRULF D ORFNHG DFFHVVLEOH HQWUDQFH ZLWK D
FKDUDFWHU RI WKH EXLOGLQJ %HFDXVH OLPLWHG QRWLILFDWLRQV\VWHPRUUHPRWHPRQLWRULQJVKDOO
H[WHQWRIDFFHVVLELOLW\LVGHVLUHGLQDOOIDFLOLWLHV EHSURYLGHG
6HFWLRQV  WKURXJK  DOORZ IRU 
DOWHUQDWLYHV ,Q DGGLWLRQ WKHUH LV DQ H[FHSWLRQ
6LJQVFRPSO\LQJZLWK6HFWLRQRIWKH6%&
WKDW ZRXOG H[HPSW WKH 7\SH % GZHOOLQJ RU
VOHHSLQJ XQLW UHTXLUHPHQWV IRU KLVWRULFDO
VKDOO EH SURYLGHG DW WKH SULPDU\ HQWUDQFH DQG WKH
EXLOGLQJV LQFOXGLQJ ZKHQ WKH DOWHUDWLRQ DFFHVVLEOHHQWUDQFH
H[FHHGV  SHUFHQW RI WKH EXLOGLQJ 7KLV ™ $OWKRXJKXQLIRUPEXLOGLQJDFFHVVLVWKHUXOHIRU
H[FHSWLRQ LV LPSRUWDQW LQ WKDW RZQHUV ZLOO QRW QHZ FRQVWUXFWLRQ ROGHU EXLOGLQJV PD\ KDYH
QHHGWRGHPRQVWUDWH WKDWWKHDGGLWLRQRIVXFK PDLQHQWUDQFHVWKDWDUHERWKLQDFFHVVLEOHDQG
XQLWV ZLOO WKUHDWHQ RU GHVWUR\ WKH KLVWRULFDO DVLJQLILFDQWHOHPHQWRIWKHEXLOGLQJ¶VFKDUDFWHU
FKDUDFWHURIWKHEXLOGLQJ ,Q WKHVH FDVHV SURYLGLQJ DFFHVV E\ DQ
™ ,Q DQ HIIRUW WR FRRUGLQDWH ZLWK WKH  $'$ DOWHUQDWLYHURXWHLVGHHPHGWRPHHWWKHSULPDU\
6WDQGDUGVIRU$FFHVVLEOH'HVLJQUHTXLUHPHQWV LQWHQW RI WKH DFFHVVLELOLW\ UHJXODWLRQV )XOO
LWHPV WKDW FDQQRW EH HQIRUFHG WKURXJK WKH FRPSOLDQFH ZRXOG UHTXLUH  SHUFHQW RI WKH
W\SLFDO FRGH HQIRUFHPHQW SURFHVV EXW DUH HQWUDQFHVWREHDFFHVVLEOH,IWKLVUHTXLUHPHQW
DVVRFLDWHGZLWKKLVWRULFDOEXLOGLQJVKDYHEHHQ ZRXOG DGYHUVHO\ DIIHFW WKH KLVWRULFDO
LQFOXGHGLQ$SSHQGL[%6HFWLRQ% VLJQLILFDQFH RI WKH EXLOGLQJ RQO\ RQH PDLQ
6LWHDUULYDOSRLQWV$WOHDVWRQHDFFHVVLEOH HQWUDQFHLVUHTXLUHGWREHPDGHDFFHVVLEOH,ID
PDLQ HQWUDQFH FDQQRW EH PDGH DFFHVVLEOH
URXWH IURP D VLWH DUULYDO SRLQW WR DQ DFFHVVLEOH
WKHQ DQ HPSOR\HH RU VHUYLFH HQWUDQFH PD\
HQWUDQFHVKDOOEHSURYLGHG VHUYHDVWKHDFFHVVLEOHHQWUDQFHSURYLGHGWKDW
™ )XOO FRPSOLDQFH ZRXOG UHTXLUH DQ DFFHVVLEOH LWUHPDLQVXQORFNHGZKHQWKHEXLOGLQJLVRSHQ
URXWH IURP DOO VLWH DUULYDO SRLQWV ,I WKLV $OWHUQDWLYHO\ D ORFNHG HQWUDQFH ZKHUH
UHTXLUHPHQW ZRXOG DGYHUVHO\ DIIHFW WKH PRQLWRULQJRUDQRWLILFDWLRQV\VWHPLVDYDLODEOH
KLVWRULFDO VLJQLILFDQFH RI WKH EXLOGLQJ WKH FRXOG EH SURYLGHG 6LJQDJH PXVW EH SURYLGHG

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

DW LQDFFHVVLEOH HQWUDQFHV LQ DFFRUGDQFH ZLWK

6%&6HFWLRQVDQG
7RLOHWDQGEDWKLQJIDFLOLWLHV:KHUHWRLOHW
URRPV DUH SURYLGHG DW OHDVW RQH DFFHVVLEOH WRLOHW
URRPFRPSO\LQJZLWK6HFWLRQRIWKH6%&
VKDOOEHSURYLGHG
™ )XOO FRPSOLDQFH ZRXOG UHTXLUH DQ DFFHVVLEOH
WRLOHW EDWKLQJ IDFLOLW\ DW HDFK ORFDWLRQ ZKHUH
WRLOHWEDWKLQJ IDFLOLWLHV DUH SURYLGHG ,I DOWHULQJ
WKH H[LVWLQJ IDFLOLWLHV WR EH DFFHVVLEOH ZRXOG
DGYHUVHO\DIIHFWWKHKLVWRULFDOVLJQLILFDQFHRIWKH
EXLOGLQJ RQO\ RQH IDPLO\ RU DVVLVWHGXVH
EDWKURRP WKDW FRPSOLHV ZLWK WKH DFFHVVLEOH
IDPLO\ RU DVVLVWHG XVH WRLOHWEDWKLQJ
UHTXLUHPHQWV LQ 6%&  6HFWLRQ  LV
UHTXLUHG 6LJQDJH PXVW EH SURYLGHG DW
LQDFFHVVLEOH WRLOHW URRPV LQ DFFRUGDQFH ZLWK
6%&6HFWLRQ


6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

™ %LEOLRJUDSK\ '2-  &)5 3DUW  $PHULFDQV ZLWK

'LVDELOLWLHV $FW $'$ :DVKLQJWRQ '&
'HSDUWPHQWRI-XVWLFH
7KHIROORZLQJUHVRXUFHPDWHULDOVZHUHXVHGLQWKH
)(0$  5HVLGHQWLDO 6XEVWDQWLDO 'DPDJH
SUHSDUDWLRQRIWKHFRPPHQWDU\IRUWKLVFKDSWHU
(VWLPDWRUV ,Q <RXU &RPPXQLW\ :DVKLQJWRQ
RIWKHFRGH
'& )HGHUDO (PHUJHQF\ 0DQDJHPHQW
$JHQF\
 &)5 3DUWV  DQG  )LQDO 5XOH 7KH
)(0$36XEVWDQWLDO,PSURYHPHQW6XEVWDQWLDO
$PHULFDQV ZLWK 'LVDELOLWLHV $FW $'$
'DPDJH 'HVN 5HIHUHQFH :DVKLQJWRQ '&
$FFHVVLELOLW\*XLGHOLQHV$UFKLWHFWXUDO%DUULHUV
)HGHUDO (PHUJHQF\ 0DQDJHPHQW $JHQF\
$FW $%$ $FFHVVLELOLW\ *XLGHOLQHV

:DVKLQJWRQ '& $UFKLWHFWXUDO DQG
1)3$  ,QVWDOODWLRQ RI 6SULQNOHU 6\VWHPV
7UDQVSRUWDWLRQ %DUULHUV &RPSOLDQFH %RDUG
4XLQF\ 0$ 1DWLRQDO )LUH 3URWHFWLRQ
-XO\
$VVRFLDWLRQ
$6&(  0LQLPXP 'HVLJQ /RDGV IRU %XLOGLQJV
DQG 2WKHU 6WUXFWXUHV $PHULFDQ 6RFLHW\ RI 
&LYLO(QJLQHHUV

- official use only

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

7$%/(6$1'),*85(62)&+$37(5
7$%/(
5$036
6/23( 0$;,0805,6(
6WHHSHUWKDQEXWQRWVWHHSHUWKDQ PP
6WHHSHUWKDQEXWQRWVWHHSHUWKDQ PP


3m 3m

280 m2

750 m2

3m

6m


),*85(
(;,67,1*%8,/',1*:,7+$'',7,21

6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

5m


),*85(
352326('&255,'25(;7(16,21



6%&&& 

&+$37(5²35(6&5,37,9(&203/,$1&(0(7+2'

























7KLVSDJHOHIWLQWHQWLRQDOO\EODQN

6%&&& 

&+$37(5²&/$66,),&$7,212):25.

²&/$66,),&$7,212):25.

WRSLFV RI DGGLWLRQV KLVWRULF EXLOGLQJV DQG

™ *HQHUDO&RPPHQWV
UHORFDWHGEXLOGLQJVDUHPHQWLRQHG
™ 7KLV FKDSWHU SURYLGHV DQ RYHUYLHZ RI WKH
™ 3XUSRVH
SURFHVVIRUWKHUHSDLUDOWHUDWLRQDQGUHVWRUDWLRQ
™ 7KLV FKDSWHU HQDEOHV WKH FRQWUDFWRU GHVLJQ
RI H[LVWLQJ EXLOGLQJV $ EULHI GHVFULSWLRQ LV
SURIHVVLRQDORUEXLOGLQJRIILFLDOWRHDVLO\LGHQWLI\
SURYLGHGWKDWLGHQWLILHVWKHGLIIHUHQFHVEHWZHHQ
WKHFODVVLILFDWLRQRIDQGWKHDVVRFLDWHGFKDSWHU
WKH WKUHH OHYHOV RI DOWHUDWLRQV ,Q DGGLWLRQ WKH
LQ WKH FRGH IRU EXLOGLQJ DOWHUDWLRQV DGGLWLRQV
DQGUHSDLUV
6(&7,21*(1(5$/  :RUNDUHD7KHZRUNDUHDDVGHILQHGLQ
 6FRSH7KHSURYLVLRQVRIWKLVFKDSWHUVKDOO &KDSWHU  VKDOO EH LGHQWLILHG RQ WKH FRQVWUXFWLRQ
EHXVHGLQFRQMXQFWLRQZLWK&KDSWHUVWKURXJK GRFXPHQWV
DQGVKDOODSSO\WRWKHDOWHUDWLRQUHSDLUDGGLWLRQDQG ™ $VGHILQHGLQ&KDSWHUD³:RUNDUHD´LVWKH
FKDQJH RI RFFXSDQF\ RI H[LVWLQJ VWUXFWXUHV DUHD RI DOOUHFRQILJXUHGVSDFHVZKHUHZRUNLV
LQFOXGLQJ KLVWRULF DQG PRYHG VWUXFWXUHV DV RFFXUULQJZLWKLQWKHVFRSHRIDSURMHFW7KHVH
UHIHUHQFHGLQ6HFWLRQ7KHZRUNSHUIRUPHG DUHDV DUH WR EH VKRZQ FOHDUO\ RQ WKH
RQ DQ H[LVWLQJ EXLOGLQJ VKDOO EH FODVVLILHG LQ FRQVWUXFWLRQ GRFXPHQWV :RUN DUHDV H[FOXGH
DFFRUGDQFHZLWKWKLVFKDSWHU RWKHU SRUWLRQV RI WKH EXLOGLQJ ZKHUH LQFLGHQWDO
ZRUNLVRQJRLQJ
™ 7KLVVHFWLRQHVWDEOLVKHVZKHQWKHUHJXODWLRQV
FRQWDLQHG LQ WKH FRGH PXVW EH IROORZHG 
ZKHWKHUDOORULQSDUW6RPHWKLQJPXVWKDSSHQ
PRGLILFDWLRQWRDQH[LVWLQJEXLOGLQJRUDOORZLQJ 6(&7,215(3$,56
DQ H[LVWLQJ EXLOGLQJ RU VWUXFWXUH WR EHFRPH  6FRSH  5HSDLUV DV GHILQHGLQ &KDSWHU 
XQVDIHIRUWKHFRGHWREHDSSOLFDEOH7KHFRGH LQFOXGHWKHSDWFKLQJRUUHVWRUDWLRQRUUHSODFHPHQW
LV QRW D PDLQWHQDQFH GRFXPHQW UHTXLULQJ
RI GDPDJHG PDWHULDOV HOHPHQWV HTXLSPHQW RU
SHULRGLFLQVSHFWLRQVWKDWZLOOLQWXUQUHVXOWLQDQ
HQIRUFHPHQW DFWLRQ 3HULRGLF LQVSHFWLRQV DUH
IL[WXUHV IRU WKH SXUSRVH RI PDLQWDLQLQJ VXFK
DGGUHVVHGE\WKH6%& FRPSRQHQWV LQ JRRG RU VRXQG FRQGLWLRQ ZLWK
UHVSHFW WR H[LVWLQJ ORDGV RU SHUIRUPDQFH
&RPSOLDQFH ZLWK RWKHU DOWHUQDWLYHV UHTXLUHPHQWV
$OWHUDWLRQV UHSDLUV DGGLWLRQV DQG FKDQJHV RI
RFFXSDQF\WRH[LVWLQJVWUXFWXUHVVKDOOFRPSO\ZLWK ™ 7KLV VHFWLRQ GHVFULEHV UHSDLUV WR H[LVWLQJ
VWUXFWXUHV LQFOXGLQJ WKH UHVWRUDWLRQ RU
WKHSURYLVLRQVRI&KDSWHUVWKURXJKRUZLWKRQH
UHSODFHPHQWRIGDPDJHG PDWHULDOV WR JRRGRU
RIWKHDOWHUQDWLYHVSURYLGHGLQ6HFWLRQ VRXQG FRQGLWLRQ DV WKH\ DSSO\ WR H[LVWLQJ
™ 7KLV VHFWLRQ RIIHUV WKH FRGH XVHU FRPSOLDQFH ORDGLQJ DQG WKH SHUIRUPDQFH UHTXLUHPHQWV RI
RSWLRQV ,Q DGGLWLRQ WR EHLQJ DEOH WR XVH WKH DQ\SDUWRIWKHEXLOGLQJZLWKDQ\RIWKHPDWHULDOV
SURYLVLRQVOLVWHGLQ&KDSWHUVWKURXJKWKHUH DQGPHWKRGVOLVWHGLQ6HFWLRQ
DUH WKUHH RWKHU FRPSOLDQFH DOWHUQDWLYHV OLVWHG
 $SSOLFDWLRQ  5HSDLUV VKDOO FRPSO\ ZLWK
XQGHU6HFWLRQ
™ )LUVW 6HFWLRQ  RIIHUV D SUHVFULSWLYH
WKHSURYLVLRQVRI&KDSWHU
FRPSOLDQFH PHWKRG IRU UHSDLUV DOWHUDWLRQV ™ &KDSWHUSURYLGHVWKHJXLGHOLQHVIRUUHSDLUVWR
DGGLWLRQVDQGFKDQJHVRIRFFXSDQF\DVORQJDV H[LVWLQJVWUXFWXUHV,WFRYHUVWRSLFVUDQJLQJIURP
WKH\FRPSO\ZLWK&KDSWHURIWKHFRGHDQGWKH EXLOGLQJ HOHPHQWV DQG PDWHULDOV WR ILUH
6%&  6HFRQG 6HFWLRQ  GHVFULEHV SURWHFWLRQDQGDFFHVVLELOLW\7KHPDLQIRFXVRI
WKHZRUNDUHDFRPSOLDQFHPHWKRGWKDWUHTXLUHV &KDSWHU  LV FRYHUHG LQ WKH SURYLVLRQV RI
FRPSOLDQFH ZLWK WKH DSSOLFDEOH SURYLVLRQV RI 6HFWLRQ
&KDSWHUVWKURXJK7KLUG6HFWLRQ
GHVFULEHVWKHSHUIRUPDQFHFRPSOLDQFHPHWKRG  5HODWHG ZRUN  :RUN RQ QRQGDPDJHG
WKDWUHTXLUHVFRPSOLDQFHZLWK&KDSWHU FRPSRQHQWVWKDWLVQHFHVVDU\IRUWKHUHTXLUHGUHSDLU
RIGDPDJHGFRPSRQHQWVVKDOOEHFRQVLGHUHGSDUWRI

6%&&& 

&+$37(5²&/$66,),&$7,212):25.

WKHUHSDLUDQGVKDOOQRWEHVXEMHFWWRWKHSURYLVLRQV  $SSOLFDWLRQ  /HYHO  DOWHUDWLRQV VKDOO

RI&KDSWHURU FRPSO\ZLWKWKHSURYLVLRQVRI&KDSWHUIRU/HYHO
™ 7KLV VHFWLRQ PDNHV LW FOHDU WKDW SRUWLRQV RI D
DOWHUDWLRQVDVZHOODVWKHSURYLVLRQVRI&KDSWHU
EXLOGLQJZKLOHWKH\PD\EHLQWDFWWKDWKDYHWR ™ ,QDGGLWLRQWRWKHSURYLVLRQVOLVWHGLQ&KDSWHU
EHUHPRYHGWRUHSDLURUUHSODFHDQRWKHUSDUWRI /HYHODOWHUDWLRQVDUHDOVRUHTXLUHGWRPHHWDOO
WKH VWUXFWXUH FDQ EH FRQVLGHUHG SDUW RI WKH RI WKH SURYLVLRQV RI &KDSWHU  /HYHO 
UHSDLUHYHQWKRXJKWKH\ZHUHQRWGDPDJHGDQG DOWHUDWLRQV 7KLV UHTXLUHPHQW HIIHFWLYHO\
XQVHUYLFHDEOH)RUH[DPSOHDEXLOGLQJWKDWZDV FRPSRXQGV WKH UHTXLUHPHQWV IRU VRPHRQH
QRWSURSHUO\IODVKHGDURXQGSHQHWUDWLRQVWRWKH SODQQLQJ WR DOWHU DQ H[LVWLQJ VWUXFWXUH )RU
H[WHULRUHQYHORSHGHYHORSVZDWHULQWUXVLRQ7KH H[DPSOHLIGXULQJWKHSURFHVVRIUHSODFLQJWKH
ZDWHU KDV UHVXOWHG LQ WKH GHWHULRUDWLRQ RI WKH DOXPLQXPVLGLQJRQDEXLOGLQJZLWKYLQ\OVLGLQJ
ZDOO VWUXFWXUH ZKLFK ZLOO KDYH WR EH UHPRYHG WKHEXLOGLQJRZQHUGHFLGHVWRHOLPLQDWHRQHRI
DQG UHSODFHG DV QHFHVVDU\ (YHQ WKRXJK WKH IRXU ZLQGRZV IURP D URRP WKHQ WKLV SURMHFW
VLGLQJ FRYHULQJ WKH GDPDJHG SRUWLRQ RI WKH ZRXOGEHFODVVLILHGDVD/HYHODOWHUDWLRQDQG
VWUXFWXUHLVVHUYLFHDEOHLWLVFRQVLGHUHGSDUWRI ZRXOG WKHUHIRUH EH UHTXLUHG WR PHHW WKH
WKH UHODWHG ZRUN DV LW KDV WR EH UHPRYHG DQG SURYLVLRQVRI&KDSWHUVDQG
WKHQ UHSODFHG LQ RUGHU WR IL[ WKH GDPDJHG
SRUWLRQV 6(&7,21$/7(5$7,21²/(9(/
6(&7,21$/7(5$7,21²/(9(/  6FRSH/HYHODOWHUDWLRQVDSSO\ZKHUHWKH
ZRUNDUHDH[FHHGVSHUFHQWRIWKHEXLOGLQJDUHD
 6FRSH  /HYHO  DOWHUDWLRQV LQFOXGH WKH
UHPRYDODQGUHSODFHPHQWRUWKHFRYHULQJRIH[LVWLQJ ™ $Q\WLPHWKHZRUNDUHDDVGHILQHGLQ6HFWLRQ
H[FHHGVRQHKDOIRIWKHDJJUHJDWHEXLOGLQJ
PDWHULDOV HOHPHQWV HTXLSPHQW RU IL[WXUHV XVLQJ
DUHDLWLVFRQVLGHUHGWREHD/HYHODOWHUDWLRQ
QHZPDWHULDOVHOHPHQWVHTXLSPHQWRUIL[WXUHVWKDW DQGWKHUHIRUHKDVWRPHHWWKHUHTXLUHPHQWVRI
VHUYHWKHVDPHSXUSRVH &KDSWHU  ,Q WKH FRGH D ZRUN DUHD
™ /HYHODOWHUDWLRQVUHSUHVHQWWKHPRVWEDVLFRU HQFRPSDVVHV DOO SRUWLRQV RI WKH H[LVWLQJ
IRUHPRVW OHYHO RI EXLOGLQJ DOWHUDWLRQV 7KLV EXLOGLQJWKDWDUHSURSRVHGWREHUHFRQILJXUHG
LQFOXGHV WKH UHPRYDO DQG UHSODFHPHQW RU WKH  $SSOLFDWLRQ  /HYHO  DOWHUDWLRQV VKDOO
FRYHULQJ RI H[LVWLQJ PDWHULDOV HOHPHQWV
FRPSO\ ZLWK WKH SURYLVLRQV RI &KDSWHUV  DQG 
HTXLSPHQWRUIL[WXUHV$QH[DPSOHZRXOGEHWKH
DGGLWLRQ RI D QHZ URRI WR DQ H[LVWLQJ EXLOGLQJ /HYHO DQG  DOWHUDWLRQVUHVSHFWLYHO\DV ZHOODV
$QRWKHU H[DPSOH ZRXOG EH WKH UHPRYDO RI WKHSURYLVLRQVRI&KDSWHU
DOXPLQXP VLGLQJ H[WHULRU ILQLVK WR EH UHSODFHG ™ $Q\SURMHFWWKDWTXDOLILHVDVD/HYHODOWHUDWLRQ
ZLWKYLQ\OVLGLQJ SURMHFW PXVW PHHW DOO RI WKH UHTXLUHPHQWV RI
 $SSOLFDWLRQ  /HYHO  DOWHUDWLRQV VKDOO &KDSWHUVDQG
FRPSO\ZLWKWKHSURYLVLRQVRI&KDSWHU 6(&7,21&+$1*(2)
™ &KDSWHU  GHVFULEHV LQ GHWDLO WKH 2&&83$1&<
UHTXLUHPHQWV IRU /HYHO  DOWHUDWLRQV ,W LV
 6FRSH  &KDQJH RI RFFXSDQF\ SURYLVLRQV
LPSRUWDQW WR QRWH WKDW KLVWRULF EXLOGLQJV PXVW
DOVRFRPSO\ZLWKWKLVFKDSWHUXQOHVVWKHUHLVD DSSO\ZKHUHWKHDFWLYLW\LVFODVVLILHGDVDFKDQJHRI
PRGLILFDWLRQ QRWHG LQ &KDSWHU  1RWH WKDW RFFXSDQF\DVGHILQHGLQ&KDSWHU
/HYHO  DOWHUDWLRQV GR QRW LQYROYH WKH ™ $FKDQJHRIRFFXSDQF\LQDQH[LVWLQJVWUXFWXUH
UHFRQILJXUDWLRQRIVSDFH PD\FKDQJHWKHOHYHORILQKHUHQWKD]DUGVWKDW
6(&7,21$/7(5$7,21²/(9(/ WKHFRGHZDVLQLWLDOO\LQWHQGHGWRDGGUHVV

 6FRSH  /HYHO  DOWHUDWLRQV LQFOXGH WKH 7KLV LV GRQH VR WKDW WKH DSSOLFDEOH FRGH
UHFRQILJXUDWLRQRIVSDFHWKHDGGLWLRQRUHOLPLQDWLRQ UHTXLUHPHQWV DGHTXDWHO\ DGGUHVV WKH VSHFLILF
RI DQ\ GRRU RU ZLQGRZ WKH UHFRQILJXUDWLRQ RU KD]DUGV RI WKH QHZ RFFXSDQF\ )RU H[DPSOH D
H[WHQVLRQRIDQ\V\VWHPRUWKHLQVWDOODWLRQRIDQ\ FKDQJHIURPDQH[LVWLQJPHUFDQWLOHRFFXSDQF\WRD
DGGLWLRQDOHTXLSPHQW EXVLQHVVRFFXSDQF\UHQGHUVDOO*URXS%SURYLVLRQV
DSSOLFDEOHWRDOOSRUWLRQVRIWKHVWUXFWXUHZKHUHWKH
™ &KDSWHUGHVFULEHVLQGHWDLOWKHUHTXLUHPHQWV RFFXSDQF\KDVFKDQJHG
IRU/HYHODOWHUDWLRQV7KHH[FHSWLRQWR6HFWLRQ
 DOORZV EXLOGLQJV XQGHUJRLQJ DOWHUDWLRQV  $SSOLFDWLRQ&KDQJHVRIRFFXSDQF\VKDOO
WKDW DUH H[FOXVLYHO\ WKH UHVXOW RI FRPSOLDQFH FRPSO\ZLWKWKHSURYLVLRQVRI&KDSWHU
ZLWK WKH DFFHVVLELOLW\ UHTXLUHPHQWV RI 6HFWLRQ
WRFRPSO\ZLWK&KDSWHU

6%&&& 

&+$37(5²&/$66,),&$7,212):25.

™ 7KLVVHFWLRQLQGLFDWHVFRPSOLDQFHZLWK&KDSWHU FRPSO\ZLWKDSSOLFDEOHSURYLVLRQVRIWKLVFRGHIRU
 IRU FKDQJHV RI RFFXSDQF\ &KDSWHU  WKHW\SHRIZRUNEHLQJSHUIRUPHG
FRQWDLQVSURYLVLRQVIUHTXHQWO\XVHGIRUH[LVWLQJ
VWUXFWXUHVVLQFHWKHRFFXSDQF\LQDEXLOGLQJRU ™ &KDSWHU  FRYHUV WKH YDULRXV DVSHFWV RI
VWUXFWXUH RIWHQ FKDQJHV GXULQJ WKH OLIH RI WKH H[LVWLQJKLVWRULFVWUXFWXUHVDQGLQFOXGHVVSHFLILF
EXLOGLQJ VHFWLRQV RQ UHSDLUV ILUH VDIHW\ DOWHUDWLRQV
FKDQJH RI RFFXSDQF\ DQG VWUXFWXUH ,Q WKH
6(&7,21$'',7,216 DEVHQFH RI DQ\ VSHFLILF UHTXLUHPHQWV RU
SURYLVLRQVLQ&KDSWHUWKHUHPDLQGHURIWKH
 6FRSH3URYLVLRQVIRUDGGLWLRQVVKDOODSSO\ FRGHLVDSSOLFDEOHWRZRUNSURSRVHGIRUKLVWRULF
ZKHUHZRUNLVFODVVLILHGDVDQDGGLWLRQDVGHILQHGLQ EXLOGLQJV
&KDSWHU
6(&7,215(/2&$7('%8,/',1*6
™ $Q\SURMHFWWKDWZRXOGLQFUHDVHWKHIORRUDUHD
WKHQXPEHURIVWRULHVLQDEXLOGLQJRUWKHKHLJKW  6FRSH5HORFDWHGEXLOGLQJSURYLVLRQVVKDOO
RIDVWUXFWXUHZRXOGTXDOLI\DVDQDGGLWLRQ DSSO\WRUHORFDWHGRUPRYHGEXLOGLQJV
 $SSOLFDWLRQ  $GGLWLRQV WR H[LVWLQJ ™ $Q\ VWUXFWXUH WKDW LV UHORFDWHG RU PRYHG WR D
EXLOGLQJV VKDOO FRPSO\ ZLWK WKH SURYLVLRQV RI GLIIHUHQW ORW RUD QHZ ORFDWLRQRQWKHVDPHORW
&KDSWHU IDOOVZLWKLQWKHVFRSHRI6HFWLRQ6WUXFWXUHV
WKDW DUH UHORFDWHG RU PRYHG DUH UHTXLUHG WR
™ $GGLWLRQVWRH[LVWLQJVWUXFWXUHVDUHVSHFLILFDOO\ FRPSO\ ZLWK WKH SURYLVLRQV DSSOLFDEOH IRU QHZ
FRYHUHGLQ&KDSWHURIWKHFRGH FRQVWUXFWLRQ7KHPRYHGVWUXFWXUHPD\FRPSO\
6(&7,21+,6725,&%8,/',1*6 ZLWK WKH DOWHUQDWLYH SURYLVLRQV RI &KDSWHU 
LQVWHDG RI WKH FRGH UHTXLUHPHQWV IRU QHZ
 6FRSH  +LVWRULFEXLOGLQJ SURYLVLRQVVKDOO VWUXFWXUHV ZKLFK PD\ EH SDUWLFXODUO\ XVHIXO LI
DSSO\WREXLOGLQJVFODVVLILHGDVKLVWRULFDVGHILQHG WKHPRYHGVWUXFWXUHLVROGHUWKDQWKHHIIHFWLYH
LQ&KDSWHU GDWHRIWKHDGRSWLRQRIWKHEXLOGLQJFRGHVLQWKH
MXULVGLFWLRQ7KHILUHVHSDUDWLRQGLVWDQFHRIWKH
™ 7KHPRVWLPSRUWDQWFULWHULRQIRUWKHDSSOLFDWLRQ PRYHG VWUXFWXUH PXVW DOVR FRPSO\ ZLWK WKH
RI WKLV VHFWLRQ LV WKDW WKH EXLOGLQJ PXVW EH UHTXLUHPHQWV IRU QHZ VWUXFWXUHV HYHQ LI WKH
FHUWLILHG DV EHLQJ RI KLVWRULF VLJQLILFDQFH E\ D FRPSOLDQFHDOWHUQDWLYHSURYLVLRQVLQ&KDSWHU
TXDOLILHGSDUW\RUDJHQF\2WKHUFRQVLGHUDWLRQV DUHXVHGWRPHHWWKHFRGHUHTXLUHPHQWV
IRUFODVVLILFDWLRQDVDKLVWRULFDOEXLOGLQJLQFOXGH
WKH VWUXFWXUDO FRQGLWLRQ RI WKH EXLOGLQJ LH  $SSOLFDWLRQ  5HORFDWHG EXLOGLQJV VKDOO
ZKHWKHU LW LV VWUXFWXUDOO\ VRXQG LWV SURSRVHG FRPSO\ZLWKWKHSURYLVLRQVRI&KDSWHU
XVHLWVLPSDFWRQOLIHVDIHW\DQGKRZWKHLQWHQW
™ 7KH UHTXLUHPHQWV IRU UHORFDWHG RU PRYHG
RIWKHFRGHLIQRWWKHOHWWHUZLOOEHDFKLHYHG
EXLOGLQJVDUHIRXQGLQ&KDSWHURIWKHFRGH
 $SSOLFDWLRQ  ([FHSW DV VSHFLILFDOO\
SURYLGHGIRULQ&KDSWHUKLVWRULFEXLOGLQJVVKDOO


6%&&& 

&+$37(5²&/$66,),&$7,212):25.

























7KLVSDJHOHIWLQWHQWLRQDOO\EODQN

6%&&& 

 &+$37(5²5(3$,56

²5(3$,56

PDQ\ VLWXDWLRQV WKDW ZRXOG VWLOO DOORZ WKH

™ *HQHUDO&RPPHQWV
GDPDJH WR EH GHDOW ZLWK DV D UHSDLU $Q
™ &KDSWHU  JRYHUQV WKH UHSDLU RI H[LVWLQJ
H[DPSOHPD\EHDVPDOONLWFKHQILUHZKHUHWKH
EXLOGLQJV 7KH SURYLVLRQV GHILQH FRQGLWLRQV
FDELQHWV PD\ QHHG UHSODFLQJ DQG WKH ZDOOV LQ
XQGHU ZKLFK UHSDLUV PD\ EH PDGH XVLQJ
WKDWDUHDPD\DOVRQHHGUHSODFLQJ
PDWHULDOVDQGPHWKRGVOLNHWKRVHRIWKHRULJLQDO
™ 3XUSRVH
FRQVWUXFWLRQRUWKHH[WHQWWRZKLFKUHSDLUVPXVW
™ 5HSDLUVWRDQH[LVWLQJVWUXFWXUHPXVWEHPDGH
FRPSO\ZLWKUHTXLUHPHQWVIRUQHZEXLOGLQJV
ZLWKWKHSURSHUPDWHULDOVLQDPDQQHUWKDWZLOO
™ ,WVKRXOGEHQRWHGWKDWEXLOGLQJVVXFKDVWKRVH
VDIHJXDUG WKH SXEOLF DQG HQVXUH WKH EXLOGLQJ
FRPSOHWHO\GHVWUR\HGE\ILUHZRXOGW\SLFDOO\QR
GRHV QRW EHFRPH D KD]DUG WR OLIH KHDOWK RU
ORQJHUEHFRQVLGHUHGUHSDLUVDQGZRXOGLQVWHDG
SURSHUW\
QHHG WR EH FRQVWUXFWHG DV D QHZ EXLOGLQJ LQ
DFFRUGDQFHZLWK6%&7KHUHDUHKRZHYHU 
SURYLGHGE\WKHVWUXFWXUHDQGV\VWHPVVXFKDV
SOXPELQJ DQG PHFKDQLFDO LV QRW WR EH
GHFUHDVHGLQWKHFRXUVHRIPDNLQJUHSDLUV
6(&7,21*(1(5$/
 )ORRGKD]DUGDUHDV,QIORRGKD]DUGDUHDV
 6FRSH5HSDLUVDVGHVFULEHGLQ6HFWLRQ UHSDLUV WKDW FRQVWLWXWH VXEVWDQWLDO LPSURYHPHQW
VKDOOFRPSO\ZLWKWKHUHTXLUHPHQWVRIWKLVFKDSWHU VKDOOUHTXLUHWKDWWKHEXLOGLQJFRPSO\ZLWK6HFWLRQ
5HSDLUVWRKLVWRULFEXLOGLQJVQHHGRQO\FRPSO\ZLWK  RI 6%&  RU 6HFWLRQ 5 RI WKH 6%&
&KDSWHU DVDSSOLFDEOH
™ 5HSDLUV DUH GHVFULEHG LQ 6HFWLRQ  DV WKH ™ ,I ORFDWHG LQ GHVLJQDWHG IORRG KD]DUG DUHDV
SDWFKLQJ UHVWRUDWLRQ RU UHSODFHPHQW RI EXLOGLQJV DQG VWUXFWXUHV WKDW DUH GDPDJHG E\
GDPDJHG PDWHULDOV HOHPHQWV HTXLSPHQW RU DQ\FDXVHDUHWREH H[DPLQHGWRGHWHUPLQH LI
IL[WXUHV IRU WKH SXUSRVH RI PDLQWDLQLQJ VXFK WKHGDPDJHFRQVWLWXWHVVXEVWDQWLDOGDPDJHLQ
PDWHULDOV DQG HOHPHQWV LQ JRRG RU VRXQG ZKLFK WKH FRVW RI UHSDLULQJ UHVWRULQJ WKH
FRQGLWLRQ ZLWK UHVSHFW WR H[LVWLQJ ORDGV RU EXLOGLQJ RU VWUXFWXUH WR LWV SUHGDPDJHG
SHUIRUPDQFH UHTXLUHPHQWV 7KH VFRSLQJ FRQGLWLRQ HTXDOV RU H[FHHGV  SHUFHQW RI LWV
SURYLVLRQV RI WKLV VHFWLRQ UHIHU WKH XVHU WR PDUNHWYDOXHEHIRUHWKHGDPDJHRFFXUUHG$OO
6HFWLRQWREHFHUWDLQWKHZRUNFODVVLILFDWLRQ VXEVWDQWLDO LPSURYHPHQWV DQG UHSDLUV RI
LV ³UHSDLU´ DQG &KDSWHU  LV WKH DSSURSULDWH EXLOGLQJV DQG VWUXFWXUHV WKDW DUH VXEVWDQWLDOO\
FKDSWHU WR EH XVHG 7KHUH DUH DGGLWLRQDO GDPDJHG DUH WR PHHW WKH IORRG UHVLVWDQW
SURYLVLRQV VSHFLILF WR UHSDLUV LQ KLVWRULF SURYLVLRQVRIWKH6%&RU6%&
EXLOGLQJV DQG WKH FRGH XVHU LV UHIHUUHG WR
&KDSWHU  IRU WKH SRVVLEOH DSSOLFDELOLW\ RI 
WKRVHSURYLVLRQVLQDGGLWLRQWRWKHUHTXLUHPHQWV
RI&KDSWHU,WLVWKHLQWHQWRIWKHFRGHWRDOORZ
6(&7,21%8,/',1*(/(0(176
RULJLQDOPDWHULDOVDQGFRQVWUXFWLRQPHWKRGVIRU $1'0$7(5,$/6
UHSDLUV WR KLVWRULFDO EXLOGLQJV LQ RUGHU WR OLPLW  ([LVWLQJ EXLOGLQJ PDWHULDOV  0DWHULDOV
DQ\QHJDWLYHLPSDFWRQWKHVWUXFWXUH¶VKLVWRULFDO DOUHDG\ LQ XVH LQ D EXLOGLQJ LQ FRPSOLDQFH ZLWK
VLJQLILFDQFH
UHTXLUHPHQWVRU DSSURYDOVLQ HIIHFWDW WKH WLPHRI
 &RQIRUPDQFH 7KH ZRUN VKDOOQRW PDNH WKHLU HUHFWLRQ RU LQVWDOODWLRQVKDOO EH SHUPLWWHG WR
WKHEXLOGLQJOHVVFRQIRUPLQJWKDQLWZDVEHIRUHWKH UHPDLQ LQ XVH XQOHVV GHWHUPLQHG E\ WKH EXLOGLQJ
UHSDLUZDVXQGHUWDNHQ RIILFLDOWRUHQGHUWKHEXLOGLQJRUVWUXFWXUHXQVDIHRU
™ 7KHJHQHUDOOLPLWDWLRQRQUHSDLUVLVWKDWWKHOHYHO GDQJHURXVDVGHILQHGLQ&KDSWHU
RI VDIHW\ KHDOWK DQG SXEOLF ZHOIDUH RI WKH ™ $PDWHULDORUV\VWHPDSSURYHGEHIRUHWKHFRGH
H[LVWLQJ EXLOGLQJ PXVW QRW EH UHGXFHG E\ DQ\ WRRNHIIHFWFDQFRQWLQXHWREHXVHGDVORQJDV
ZRUNEHLQJSHUIRUPHG7KLVUHTXLUHPHQWFDQEH LWFDQEHVKRZQWKDWWKHPDWHULDORUV\VWHP LV
EURDGO\LQWHUSUHWHGDVLWVDSSOLFDWLRQVYDU\RQ QRW GHWULPHQWDO WR WKH KHDOWK RU VDIHW\ RI WKH
DFDVHE\FDVHVLWXDWLRQEXWWKHOHYHORIVDIHW\

6%&&& 

&+$37(5²5(3$,56

EXLOGLQJRFFXSDQWVRUWKHSXEOLF,QRWKHUZRUGV SULPDULO\ IURP SHUVRQV LPSDFWLQJ WKH JODVV

WKHFRGHLVQRWUHWURDFWLYH HGJH ZLWK QR FXWWLQJ RU SLHUFLQJ LQMXULHV
UHVXOWLQJ IURP JODVV EUHDNDJH 6DIHW\ JODVV
 1HZDQGUHSODFHPHQWPDWHULDOV([FHSW ZRXOGQRWKDYHDQHIIHFWRQWKHW\SHRILQMXU\
DV RWKHUZLVH UHTXLUHG RU SHUPLWWHG E\ WKLV FRGH 7KHUH DUH DOVR SUDFWLFDO SURGXFWLRQ UHDVRQV
PDWHULDOVSHUPLWWHGE\WKHDSSOLFDEOHFRGHIRUQHZ DVVRFLDWHG ZLWK IDEULFDWLQJ VDIHW\ JOD]LQJ IRU
FRQVWUXFWLRQVKDOOEHXVHG/LNHPDWHULDOVVKDOOEH WKHUHODWLYHO\ORQJWKLQVODWV
SHUPLWWHG IRU UHSDLUV DQG DOWHUDWLRQV SURYLGHG QR

GDQJHURXV RU XQVDIH FRQGLWLRQ DV GHILQHG LQ
&KDSWHULVFUHDWHG+D]DUGRXVPDWHULDOVVXFKDV 6(&7,21),5(3527(&7,21
DVEHVWRV DQG OHDGEDVHG SDLQW VKDOO QRW EH XVHG
ZKHUH WKH FRGH IRU QHZ FRQVWUXFWLRQ ZRXOG QRW  *HQHUDO  5HSDLUV VKDOO EH GRQH LQ D
SHUPLWWKHLUXVHLQEXLOGLQJVRIVLPLODURFFXSDQF\ PDQQHU WKDW PDLQWDLQVWKH OHYHO RI ILUH SURWHFWLRQ
SXUSRVHDQGORFDWLRQ SURYLGHG
™ $Q\OHYHORIILUHSURWHFWLRQWKDWFXUUHQWO\H[LVWV
™ 7KHUH DUH WZR RSWLRQV IRU PDWHULDOV XVHG LQ
LQDEXLOGLQJPXVWQRWEHDGYHUVHO\DIIHFWHGDV
UHSDLUV WR DQ H[LVWLQJ EXLOGLQJ *HQHUDOO\ WKH
D UHVXOW RI DQ\ UHSDLU )RU H[DPSOH UHSDLULQJ
PDWHULDOVXVHGIRUUHSDLUVVKRXOGEHWKRVHWKDW
WKH H[LVWLQJ FHLOLQJ DQG VSULQNOHU KHDGV RU
DUH SUHVHQWO\ UHTXLUHG RU SHUPLWWHG IRU QHZ
UHSDLULQJWKHILUHDODUPV\VWHPHTXLSPHQWPXVW
FRQVWUXFWLRQXQGHUWKH6DXGL%XLOGLQJ&RGHV,W
XOWLPDWHO\ SURYLGH WKH VDPH OHYHO RI FRYHUDJH
LV DOVR DFFHSWDEOH WR XVH PDWHULDOV FRQVLVWHQW
DQGSURWHFWLRQWKDWH[LVWHGSULRUWRWKHUHSDLUV
ZLWK WKRVH WKDW DUH DOUHDG\ SUHVHQW H[FHSW
EHLQJXQGHUWDNHQ
ZKHUH WKRVH PDWHULDOV SRVH D KD]DUG 7KLV
DOORZDQFHIROORZVWKHJHQHUDOFRQFHSWWKDWDQ\ 
UHSDLU VKRXOG QRW PDNH D EXLOGLQJ PRUH
KD]DUGRXV WKDQ LW ZDV SULRU WR WKH UHSDLU ,W LV 6(&7,210($162)(*5(66
JHQHUDOO\ SRVVLEOH WR UHSDLU D VWUXFWXUH LWV
 *HQHUDO  5HSDLUV VKDOO EH GRQH LQ D
FRPSRQHQWV DQG LWV V\VWHPV ZLWK PDWHULDOV
FRQVLVWHQWZLWKWKRVHPDWHULDOVWKDWZHUHXVHG PDQQHU WKDW PDLQWDLQV WKH OHYHO RI SURWHFWLRQ
SUHYLRXVO\+RZHYHUZKHUHPDWHULDOVWKDWDUH SURYLGHGIRUWKHPHDQVRIHJUHVV
QRZ GHHPHG KD]DUGRXV ZHUH XVHG LQ DUHDV ™ $Q\OHYHORISURWHFWLRQSURYLGHGE\WKHPHDQV
VXEMHFWWRUHSDLUWKH\PD\QRORQJHUEHXVHG RIHJUHVVWKDWFXUUHQWO\H[LVWVLQDEXLOGLQJPXVW
)RUH[DPSOHWKHFRGHLGHQWLILHVDVEHVWRVDQG QRW EH DGYHUVHO\ DIIHFWHG DV D UHVXOW RI DQ\
OHDGEDVHG SDLQW DV WZR FRPPRQ KD]DUGRXV UHSDLU )RU H[DPSOH UHSDLULQJ WKH ZDOOV DQG
PDWHULDOV WKDW FDQQRW EH XVHG LQ WKH UHSDLU GRRUVRIDFRUULGRUPXVWXOWLPDWHO\SURYLGHWKH
SURFHVV &HUWDLQ PDWHULDOV SUHYLRXVO\ VDPHOHYHORISURWHFWLRQWKDWH[LVWHGSULRUWRWKH
FRQVLGHUHGDFFHSWDEOHIRUEXLOGLQJFRQVWUXFWLRQ UHSDLUVEHLQJXQGHUWDNHQ
DUHQRZDWKUHDWWRWKHKHDOWKRIWKHRFFXSDQWV

 *OD]LQJ LQ KD]DUGRXV ORFDWLRQV
5HSODFHPHQW JOD]LQJ LQ KD]DUGRXV ORFDWLRQV VKDOO 6(&7,21$&&(66,%,/,7<
FRPSO\ZLWKWKHVDIHW\JOD]LQJUHTXLUHPHQWVRIWKH  *HQHUDO  5HSDLUV VKDOO EH GRQH LQ D
6%&RU6%&DVDSSOLFDEOH PDQQHU WKDW PDLQWDLQV WKH OHYHO RI DFFHVVLELOLW\
([FHSWLRQ*ODVVEORFNZDOOVORXYHUHGZLQGRZV SURYLGHG
DQGMDORXVLHVUHSDLUHGZLWKOLNHPDWHULDOV ™ 7KHOHYHORIDFFHVVLELOLW\WKDWFXUUHQWO\H[LVWVLQ
™ :KHQ JOD]LQJ LQ DQ H[LVWLQJ EXLOGLQJ LV DEXLOGLQJPXVWQRWEHDGYHUVHO\DIIHFWHGDVD
UHSODFHG ZLWKLQ WKH VDPH EXLOGLQJ LW PXVW UHVXOWRIDQ\UHSDLU&RQWLQXHGFRPSOLDQFHZLWK
FRPSO\ ZLWK WKH FXUUHQW UHTXLUHPHQWV DQG WKH DFFHVVLELOLW\ UHTXLUHPHQWV RI WKH FRGH LV
VWDQGDUGVRIWKH6%&RUWKH6%&DV GHSHQGHQWRQWKHPDLQWHQDQFHRIVXFKIDFLOLWLHV
DSSOLFDEOH7KLVLQFOXGHVLQVWDOOLQJQHZJODVVLQ WKURXJKRXWWKHOLIHRIWKHEXLOGLQJ)RUH[DPSOH
DQ H[LVWLQJ ZLQGRZ GRRU RU RWKHU W\SH RI GULQNLQJ IRXQWDLQV WKDW DUH UHTXLUHG WR EH
RSHQLQJHYHQZKHUHWKHJODVVUHSODFHGGLGQRW DFFHVVLEOHDUHRIOLWWOHYDOXHLIWKH\PDOIXQFWLRQ
FRPSO\ ZLWK WKH VWDQGDUGV RI WKH FRGH *ODVV WKURXJKWKHGHWHULRUDWLRQRUIDLOXUHRIDQ\RIWKH
EORFNZDOOVDUHGHVFULEHGLQ&KDSWHURI6%& ZRUNLQJ SDUWV ,Q RWKHU FDVHV LQRSHUDEOH
 /RXYHUHG DQG MDORXVLH ZLQGRZV DUH HOHYDWRUV ORFNHG DFFHVVLEOH GRRUV DQG
H[HPSWIURPVDIHW\JOD]LQJUHTXLUHPHQWVLQDOO REVWUXFWHG DFFHVVLEOH URXWHV PXVW EH
DSSOLFDWLRQV UHTXLUHG WR EH VDIHW\ JODVV 7KLV PDLQWDLQHGVXFKWKDWWKH\DUHUHDGLO\XVDEOHE\
H[HPSWLRQ LV EDVHG RQ UHFRUGV WKDW VKRZ WKH LQGLYLGXDOVZLWKGLVDELOLWLHV
LQMXULHV DVVRFLDWHG ZLWK WKLV XVH RI JODVV DUH 

6%&&& 

&+$37(5²5(3$,56

6(&7,216758&785$/ UHSDLUVLVGHSHQGHQWRQZKHWKHUWKDWGDPDJHLV
WRHOHPHQWVRIWKHODWHUDOV\VWHPVHH6HFWLRQ
 *HQHUDO  6WUXFWXUDO UHSDLUV VKDOO EH LQ  RU RQO\ WR HOHPHQWV RI WKH JUDYLW\
FRPSOLDQFH ZLWK WKLV VHFWLRQ DQG 6HFWLRQ  V\VWHPVHH6HFWLRQ7KLVSDUDOOHOVWKH
5HJDUGOHVV RI WKH H[WHQW RI VWUXFWXUDO RU FODVVHV RI VXEVWDQWLDO VWUXFWXUDO GDPDJH
QRQVWUXFWXUDO GDPDJH GDQJHURXV FRQGLWLRQV VKDOO GHILQHG LQ 6HFWLRQ  7KH GHILQLWLRQ RI
EH HOLPLQDWHG 5HJDUGOHVV RI WKH VFRSH RI UHSDLU ³6XEVWDQWLDO VWUXFWXUDO GDPDJH´ ZRXOG LWVHOI
QHZ VWUXFWXUDO PHPEHUVDQG FRQQHFWLRQVXVHG IRU QHFHVVLWDWHVRPHSUHOLPLQDU\OHYHORIVWUXFWXUDO
UHSDLU RU UHKDELOLWDWLRQ VKDOO FRPSO\ ZLWK WKH HYDOXDWLRQ
™ 7KHUHDUHWZRUHSDLUUHTXLUHPHQWVWKDWDUHQRW
GHWDLOLQJ SURYLVLRQV RI WKH 6%&  IRU QHZ
UHODWHGWRWKHH[WHQWRIWKHGDPDJH'DQJHURXV
EXLOGLQJVRIVLPLODUVWUXFWXUHSXUSRVHDQGORFDWLRQ FRQGLWLRQV PXVW DOZD\V EH HOLPLQDWHG VHH
™ 7KLVVHFWLRQJLYHVWKHUHTXLUHPHQWVWKDWSHUWDLQ 6HFWLRQ  DQG DQ\ QHZ VWUXFWXUDO
WRVWUXFWXUDOPDWHULDOVDQGHOHPHQWVLQQHHGRI PHPEHUVDQGFRQQHFWLRQVPXVWPHHWWKHFRGH
UHSDLU 6HFWLRQ  DGGUHVVHV UHSDLUV IRU UHTXLUHPHQWVIRUQHZFRQVWUXFWLRQ
OHVV WKDQ VXEVWDQWLDO VWUXFWXUDO GDPDJH
5HSDLUV IRU OHVV WKDQ VXEVWDQWLDO
6HFWLRQ  DGGUHVVHV UHSDLUV IRU
VXEVWDQWLDO VWUXFWXUDO GDPDJH WR YHUWLFDO
VWUXFWXUDO GDPDJH  )RU GDPDJH OHVV WKDQ
HOHPHQWV RI WKH ODWHUDO IRUFHUHVLVWLQJ V\VWHP VXEVWDQWLDO VWUXFWXUDO GDPDJH WKH GDPDJHG
DQG 6HFWLRQ  DGGUHVVHV UHSDLUV IRU HOHPHQWVVKDOOEHSHUPLWWHGWREHUHVWRUHGWRWKHLU
VXEVWDQWLDO VWUXFWXUDO GDPDJH WR JUDYLW\ ORDG SUHGDPDJHFRQGLWLRQ
FDUU\LQJ FRPSRQHQWV 7KLV VHFWLRQ DOVR ™ )RU GDPDJH OHVV WKDQ VXEVWDQWLDO VWUXFWXUDO
UHTXLUHVGDQJHURXVFRQGLWLRQVWREHHOLPLQDWHG GDPDJH UHSDLUV DUH DOORZHG WKDW UHVWRUH WKH
6HH WKH GHILQLWLRQ RI ³'DQJHURXV´ LQ 6HFWLRQ EXLOGLQJ WR LWV SUHGDPDJHG VWDWH XVLQJ
IRUDOLVWRIWKHFRQGLWLRQVWKDWPXVWDOZD\V PDWHULDOVDQGVWUHQJWKVWKDWH[LVWHGSULRUWRWKH
EH FRUUHFWHG UHJDUGOHVV RI WKH H[WHQW RI GDPDJH $JDLQ DV UHTXLUHG LQ 6HFWLRQ 
GDPDJH )LQDOO\ UHJDUGOHVV RI WKH VFRSH RI QHZVWUXFWXUDOPHPEHUVDQGFRQQHFWLRQVXVHG
ZRUN QHZ FRQQHFWLRQV DQG QHZ VWUXFWXUDO IRU WKLV UHSDLU PXVW FRPSO\ ZLWK WKH GHWDLOLQJ
PHPEHUVPXVWEHLQFRPSOLDQFHZLWKWKH6%& SURYLVLRQVRIWKH6%&IRUQHZEXLOGLQJVRI
 VLPLODUVWUXFWXUHSXUSRVHDQGORFDWLRQ
 5HSDLUVWRGDPDJHGEXLOGLQJV5HSDLUVWR 6XEVWDQWLDO VWUXFWXUDO GDPDJH WR
GDPDJHGEXLOGLQJVVKDOOFRPSO\ZLWKWKLVVHFWLRQ YHUWLFDO HOHPHQWV RI WKH ODWHUDO IRUFHUHVLVWLQJ
™ %XLOGLQJV FDQ VXIIHU GDPDJH IURP QXPHURXV V\VWHP  $EXLOGLQJWKDW KDV VXVWDLQHGVXEVWDQWLDO
VRXUFHV 1DWXUDO GLVDVWHUV VXFK DV VWUXFWXUDO GDPDJH WR WKH YHUWLFDO HOHPHQWV RI LWV
HDUWKTXDNHVIORRGVKXUULFDQHVDQGWRUQDGRHV ODWHUDOIRUFHUHVLVWLQJV\VWHPVKDOOEHHYDOXDWHGLQ
FDQFDXVHH[WHQVLYHGDPDJHRYHUZLGHVSUHDG DFFRUGDQFH ZLWK 6HFWLRQ  DQG HLWKHU
DUHDVGHSHQGLQJRQWKHVHYHULW\RIWKHHYHQW UHSDLUHG LQ DFFRUGDQFH ZLWK 6HFWLRQ  RU
:DWHULQWUXVLRQGXHWRDIDLOXUHLQWKHEXLOGLQJ
UHSDLUHG DQG UHKDELOLWDWHG LQ DFFRUGDQFH ZLWK
HQYHORSH WHUPLWH LQIHVWDWLRQV RU H[SRVXUH WR
FRUURVLYH FKHPLFDOV FDQ DOO OHDG WR WKH
6HFWLRQGHSHQGLQJRQWKHUHVXOWVRIWKH
GHWHULRUDWLRQ RI VWUXFWXUDO PHPEHUV RYHU WLPH HYDOXDWLRQ
)RU WKH PRVW SDUW WKLV VHFWLRQ GRHV QRW ([FHSWLRQV
GLIIHUHQWLDWHEHWZHHQWKHSRVVLEOHFDXVHVRIWKH
GDPDJHWKHH[FHSWLRQVDUH6HFWLRQV  %XLOGLQJV DVVLJQHG WR 6HLVPLF 'HVLJQ
DQG  1HHGOHVV WR VD\ GHWHUPLQLQJ &DWHJRU\ $ % RU & ZKRVH VXEVWDQWLDO
WKH URRW FDXVH RI DQ\ GDPDJH ZRXOG EH VWUXFWXUDO GDPDJH ZDV QRW FDXVHG E\
DGYLVDEOH VR WKDW DQ RZQHU FDQ DVFHUWDLQ WKH HDUWKTXDNH QHHG QRW EH HYDOXDWHG RU
ULVNRIDUHFXUUHQFHDQGLIQHFHVVDU\GHYHORS UHKDELOLWDWHG IRU ORDG FRPELQDWLRQV WKDW
DSODQWRDGGUHVVWKDWULVN LQFOXGHHDUWKTXDNHHIIHFWV
™ 7KHSULPDU\FRQFHUQLQGHWHUPLQLQJKRZUHSDLUV
 2QH DQG WZRIDPLO\ GZHOOLQJV QHHG QRW EH
DUH WR EH DFFRPSOLVKHG LV HVWDEOLVKLQJ WKH
H[WHQWRIWKHGDPDJHWKDWKDVEHHQVXVWDLQHG HYDOXDWHG RU UHKDELOLWDWHG IRU ORDG
WR VHH LI LW H[FHHGV HLWKHU RI WKH WKUHVKROGV FRPELQDWLRQVWKDWLQFOXGHHDUWKTXDNHHIIHFWV
FRQWDLQHG LQ WKH GHILQLWLRQ RI ³6XEVWDQWLDO ™ 7KLV VHFWLRQ SURYLGHV UHTXLUHPHQWV WKDW DSSO\
VWUXFWXUDOGDPDJH´:KHUHLWGRHVQRW6HFWLRQ ZKHUH WKH GDPDJH WKUHVKROG EDVHG RQ WKH
DSSOLHVDQGWKHUHSDLUVFDQW\SLFDOO\EH H[WHQW RI GDPDJH WR YHUWLFDO HOHPHQWV RI WKH
OLPLWHG WR UHVWRULQJ WKH EXLOGLQJ WR LWV SUH ODWHUDO IRUFHUHVLVWLQJ V\VWHP LQ DQ\ VWRU\ LV
GDPDJHGVWDWH)RUEXLOGLQJVWKDWKDYHVXIIHUHG H[FHHGHG6XEVWDQWLDOVWUXFWXUDOGDPDJHWRWKH
VXEVWDQWLDOVWUXFWXUDOGDPDJHWKHDSSURDFKWR ODWHUDO V\VWHP WULJJHUV WKH HYDOXDWLRQ RI WKH

6%&&& 

&+$37(5²5(3$,56

ZKROHEXLOGLQJIRUZLQGDQGVHLVPLFORDGVVHH QHZ FRQVWUXFWLRQ UHTXLUHPHQWV IRU PDWHULDO

6HFWLRQ7KHHPSKDVLVLVSODFHGRQ VWUHQJWK DQG GHWDLOLQJ PXVW EH VDWLVILHG IRU
YHUWLFDOHOHPHQWVVXFKDVZDOOVDQGFROXPQV ORDGLQJFRQVLGHUDWLRQVRWKHUWKDQHDUWKTXDNHV
UDWKHU WKDQ KRUL]RQWDO HOHPHQWV EHFDXVH WKH ,I WKLV HYDOXDWLRQ LQGLFDWHV WKDW WKH EXLOGLQJ¶V
YHUWLFDO HOHPHQWV RI WKH ODWHUDO IRUFHUHVLVWLQJ ODWHUDOIRUFHUHVLVWLQJV\VWHPFRPSOLHVZLWKWKH
V\VWHP GHWHUPLQH WKH VWUXFWXUH¶V UHVSRQVH 6%&XVLQJWKHSHUPLWWHGUHGXFHGVHLVPLF
SDUWLFXODUO\ WR HDUWKTXDNHV %DVHG RQ WKH GHVLJQ FULWHULD VHH 6HFWLRQ  WKHQ LW
UHVXOWV RI WKLV HYDOXDWLRQ WKH ODWHUDO IRUFH QHHG RQO\ EH UHSDLUHG WR WKH SUHGDPDJHG
UHVLVWLQJ V\VWHP LV UHTXLUHG WR HLWKHU EH FRQGLWLRQ2WKHUZLVHWKHODWHUDOIRUFHUHVLVWLQJ
UHSDLUHG VHH 6HFWLRQ  RU UHSDLUHG V\VWHP PXVW EH UHKDELOLWDWHG LQ DFFRUGDQFH
DQGUHKDELOLWDWHGVHH6HFWLRQ ZLWK6HFWLRQ
™ 7KHUH DUH WZR H[FHSWLRQV WKDW H[HPSW FHUWDLQ
FRPELQDWLRQV RI EXLOGLQJV VHLVPLF ULVN DQG  ([WHQW RI UHSDLU IRU FRPSOLDQW
GDPDJH IURP WULJJHUHG VHLVPLF XSJUDGHV EXLOGLQJV  ,I WKH HYDOXDWLRQ HVWDEOLVKHV WKDW WKH
%DVLFUHSDLUWKDWLVUHVWRULQJWKHSUHGDPDJHG EXLOGLQJLQLWVSUHGDPDJHFRQGLWLRQFRPSOLHVZLWK
FRQGLWLRQ LV VWLOO UHTXLUHG HYHQ IRU WKH WKH SURYLVLRQV RI 6HFWLRQ  WKHQ WKH
H[FHSWLRQVRXWOLQHG GDPDJHGHOHPHQWVVKDOOEHSHUPLWWHGWREHUHVWRUHG
™ ([FHSWLRQ  LV IRU EXLOGLQJV LQ DUHDV RI ORZ RU WRWKHLUSUHGDPDJHFRQGLWLRQ
PRGHUDWHVHLVPLFLW\6HLVPLF'HVLJQ&DWHJRU\
$%RU&ZKHUHWKHGDPDJHZDVQRWFDXVHG ™ :KHUH WKH HYDOXDWLRQ SURYLGHG IRU LQ 6HFWLRQ
E\ DQ HDUWKTXDNH DQG WKHUHIRUH ZRXOG QRW EH  HVWDEOLVKHV WKDW WKH SUHGDPDJHG
UHTXLUHG WR EH HYDOXDWHG RU UHKDELOLWDWHG IRU EXLOGLQJ PHHWV WKH VWUXFWXUDO SURYLVLRQV RI WKH
ORDG FRPELQDWLRQV WKDW LQFOXGH HDUWKTXDNH 6%&  WKH UHSDLUV PD\ EH OLPLWHG WR D
HIIHFWV:KHUHHDUWKTXDNHVDUHUDUHLWVHUYHV UHVWRUDWLRQRIWKHVWUXFWXUDOFRPSRQHQWV
QRVLJQLILFDQWSXEOLFSXUSRVHWRWULJJHUVHLVPLF  ([WHQW RI UHSDLU IRU
XSJUDGHV IROORZLQJ GDPDJH FDXVHG E\ ILUH QRQFRPSOLDQW EXLOGLQJV  ,I WKH HYDOXDWLRQ GRHV
FROOLVLRQZLQGHWF
QRW HVWDEOLVK WKDW WKH EXLOGLQJ LQ LWV SUHGDPDJH
™ ([FHSWLRQ  LV IRU RQH DQG WZRIDPLO\
GZHOOLQJVZKHUHWKHSXEOLFULVNLVHVSHFLDOO\ORZ
FRQGLWLRQFRPSOLHV ZLWKWKH SURYLVLRQV RI 6HFWLRQ
HYHQ WKRXJK WKH GDPDJH PD\ EH DVVRFLDWHG WKHQWKHEXLOGLQJVKDOOEHUHKDELOLWDWHGWR
ZLWKHDUWKTXDNHHIIHFWV FRPSO\ ZLWK WKH SURYLVLRQV RI WKLV VHFWLRQ 7KH
™ 6LPLODUH[FHSWLRQVDUHIRXQGLQ6HFWLRQ ZLQGORDGVIRUWKHUHSDLUDQGUHKDELOLWDWLRQVKDOOEH
WKRVHUHTXLUHGE\WKHEXLOGLQJFRGHLQHIIHFWDWWKH
 (YDOXDWLRQ7KHEXLOGLQJVKDOOEH WLPH RI RULJLQDO FRQVWUXFWLRQ XQOHVV WKH GDPDJH
HYDOXDWHGE\DUHJLVWHUHGGHVLJQSURIHVVLRQDODQG ZDVFDXVHGE\ZLQGLQZKLFKFDVHWKHZLQGORDGV
WKH HYDOXDWLRQ ILQGLQJV VKDOO EH VXEPLWWHG WR WKH VKDOO EH LQ DFFRUGDQFH ZLWK WKH 6%&  7KH
EXLOGLQJ RIILFLDO 7KH HYDOXDWLRQ VKDOO HVWDEOLVK VHLVPLFORDGVIRUWKLVUHKDELOLWDWLRQGHVLJQVKDOOEH
ZKHWKHU WKH GDPDJHG EXLOGLQJ LI UHSDLUHG WR LWV WKRVHUHTXLUHGE\WKHEXLOGLQJFRGHLQHIIHFWDWWKH
SUHGDPDJHVWDWHZRXOGFRPSO\ZLWKWKHSURYLVLRQV WLPHRIRULJLQDOFRQVWUXFWLRQEXWQRWOHVVWKDQWKH
RIWKH6%&IRUORDGFRPELQDWLRQVWKDWLQFOXGH UHGXFHG6%&OHYHOVHLVPLFIRUFHV
ZLQGRUHDUWKTXDNHHIIHFWVH[FHSWWKDWWKHVHLVPLF
IRUFHVVKDOOEHWKHUHGXFHG6%&OHYHOVHLVPLF ™ ,I WKH HYDOXDWLRQ RI WKH EXLOGLQJ ZKHQ
IRUFHV K\SRWKHWLFDOO\ UHSDLUHG WR LWV SUHGDPDJHG
FRQGLWLRQ GRHV QRW FRPSO\ ZLWK WKH
™ 7KLVVHFWLRQFRQWDLQVWKHUHTXLUHPHQWVIRUWKH UHTXLUHPHQWVHVWDEOLVKHGLQ6HFWLRQ
EXLOGLQJ HYDOXDWLRQ PDQGDWHG E\ 6HFWLRQ WKHQ WKH EXLOGLQJ PXVW EH UHKDELOLWDWHG DV
 )RU WKH SXUSRVH RI HVWDEOLVKLQJ WKH GHVFULEHG LQ WKLV VHFWLRQ 7KH JHQHUDO
VWUXFWXUH¶VDGHTXDF\WKHHYDOXDWLRQLVWRXWLOL]H UHTXLUHPHQWLVWRFRPSO\ZLWKWKH6%&ORDG
WKH VWUHQJWK DQG VWLIIQHVV RI WKH RULJLQDO SUH FRPELQDWLRQVZKLFKDUHXVHGWR HVWDEOLVKWKH
GDPDJHG VWUXFWXUH 7KH VWUXFWXUDO HYDOXDWLRQ UHTXLUHG VWUHQJWK RI VWUXFWXUDO PHPEHUV 7KH
PXVWDVVHVVWKHHQWLUHVWUXFWXUHIRUFRPSOLDQFH HIIHFWV RI ZLQG DQG VHLVPLF ORDGV ZDUUDQW
ZLWK 6%&  ZLQG DQG VHLVPLF ORDG VSHFLDO FRQVLGHUDWLRQ ,Q GHWHUPLQLQJ WKH OHYHO
FRPELQDWLRQV 7KLV PHDQV WKDW WKH HYDOXDWLRQ RIFRPSOLDQFHIRUUHSDLUVWREXLOGLQJVWKDWKDYH
PXVWGHPRQVWUDWHFRPSOLDQFHIRUDOOORDGVWKDW VXVWDLQHG VXEVWDQWLDO VWUXFWXUDO GDPDJH LW LV
DUH DSSOLFDEOH WR QHZ FRQVWUXFWLRQ 7KH RQO\ LPSRUWDQW WR GHWHUPLQH LI ZLQG IRUFHV KDYH
H[FHSWLRQLVWKDWWKHDSSURDFKHVSHUPLWWHGIRU FDXVHG WKDW GDPDJH ,I VR LW LV FRQVLGHUHG
WKHUHGXFHGVHLVPLFIRUFHVLQ6HFWLRQ SUXGHQWWRUHTXLUHWKHUHSDLUVRIZLQGGDPDJH
PD\ EH XVHG IRU WKH HYDOXDWLRQ RI VHLVPLF WR XVH ZLQG ORDGLQJ WKDW LV WKH KLJKHU RI WKH
HIIHFWV RQ WKH VWUXFWXUH 6LQFH QR RWKHU EXLOGLQJ FRGH LQ HIIHFW DW WKH WLPH RI RULJLQDO
H[FHSWLRQV DUH VWDWHG WKH LPSOLFDWLRQ LV WKDW FRQVWUXFWLRQ LV WKH EDVLV IRU GHVLJQ 6HLVPLF

6%&&& 

&+$37(5²5(3$,56

IRUFHV IRU WKH UHKDELOLWDWLRQ FDQ EH WKRVH DSSDUHQW :KHUH WKLV LV WKH FDVH WKHQ WKH
UHTXLUHG E\ WKH EXLOGLQJ FRGH LQ HIIHFW DW WKH VWUXFWXUHPXVWEHHYDOXDWHGLQDFFRUGDQFHZLWK
WLPHRIWKHEXLOGLQJ¶VFRQVWUXFWLRQEXWWKLVPD\ 6HFWLRQ
QRWEHOHVVWKDQWKHUHGXFHG6%&VHLVPLF ™ 7KHUH DUH WZR H[FHSWLRQV WKDW DFNQRZOHGJH
IRUFHOHYHO WKDWDSSO\LQJWKLVUHTXLUHPHQWLQVRPHFDVHVLV
H[FHVVLYH DQG PD\ KDYH WKH HIIHFW RI
6XEVWDQWLDOVWUXFWXUDOGDPDJHWRJUDYLW\ GLVFRXUDJLQJ RU GHOD\LQJ FHUWDLQ UHSDLUV E\
ORDGFDUU\LQJFRPSRQHQWV*UDYLW\ORDGFDUU\LQJ LPSRVLQJ WKH DGGLWLRQDO FRVWV RI D VHLVPLF
FRPSRQHQWV WKDW KDYH VXVWDLQHG VXEVWDQWLDO XSJUDGH ([FHSWLRQ  H[HPSWV EXLOGLQJV LQ
VWUXFWXUDOGDPDJHVKDOOEHUHKDELOLWDWHGWRFRPSO\ DUHDVRIORZRUPRGHUDWHVHLVPLFLW\ZKHUHWKH
ZLWK WKH DSSOLFDEOH SURYLVLRQV IRU GHDG DQG OLYH GDPDJH ZDVFDXVHGE\VRPHWKLQJRWKHUWKDQ
ORDGV LQ WKH 6%&  6QRZ ORDGV VKDOO EH DQHDUWKTXDNH:KHUHHDUWKTXDNHVDUHUDUHLW
FRQVLGHUHGLIWKHVXEVWDQWLDOVWUXFWXUDOGDPDJHZDV VHUYHV QR VLJQLILFDQW SXEOLF SXUSRVH WR WULJJHU
FDXVHG E\ RU UHODWHG WR VQRZ ORDG HIIHFWV VHLVPLFXSJUDGHVIROORZLQJGDPDJHFDXVHGE\
8QGDPDJHGJUDYLW\ORDGFDUU\LQJFRPSRQHQWVWKDW ILUHFROOLVLRQZLQGDQGRWKHUHYHQWV([FHSWLRQ
 H[HPSWV RQH DQG WZRIDPLO\ GZHOOLQJV
UHFHLYHGHDGOLYHRUVQRZORDGVIURPUHKDELOLWDWHG
ZKHUHWKHULVNWRWKHSXEOLFRISRRUHDUWKTXDNH
FRPSRQHQWVVKDOODOVREHUHKDELOLWDWHGLIUHTXLUHGWR SHUIRUPDQFH LV HVSHFLDOO\ ORZ %DVLF UHSDLU²
FRPSO\ZLWKWKHGHVLJQORDGVRIWKHUHKDELOLWDWLRQ WKDW LV UHVWRULQJ WR WKH SUHGDPDJHG
GHVLJQ FRQGLWLRQ²LVVWLOOUHTXLUHG6LPLODUH[FHSWLRQV
™ 6XEVWDQWLDO VWUXFWXUDO GDPDJH WR JUDYLW\ ORDG DUHIRXQGLQ6HFWLRQ
FDUU\LQJHOHPHQWVVXFKDVFROXPQVRUEHDULQJ )ORRGKD]DUGDUHDV,QIORRGKD]DUGDUHDV
ZDOOVPXVWEHUHSDLUHGVRWKDWWKHVHPHPEHUV EXLOGLQJV WKDW KDYH VXVWDLQHG VXEVWDQWLDO GDPDJH
DUHDGHTXDWHWRUHVLVWWKHGHDGDQGOLYHORDGV
VKDOOEHEURXJKWLQWRFRPSOLDQFHZLWK6HFWLRQ
LQDFFRUGDQFHZLWKFXUUHQWFRGHUHTXLUHPHQWV
DVPXVWRWKHUHOHPHQWVRIWKHORDGSDWK6QRZ
RI6%&RU6HFWLRQ5RIWKH6%&DV
ORDGVPXVWDOVREHFRQVLGHUHGLIWKHVXEVWDQWLDO DSSOLFDEOH
GDPDJHZDVLQDQ\ZD\FDXVHGE\VQRZORDG ™ 7KHGHILQLWLRQRI³)ORRGKD]DUGDUHD´SURYLGHG
HIIHFWV LQ6HFWLRQLVWDNHQIURPWKH6%&DQG
 /DWHUDO IRUFHUHVLVWLQJ HOHPHQWV HVWDEOLVKHVZKHUHWKLVSURYLVLRQLVDSSOLFDEOH,I
ORFDWHG LQ GHVLJQDWHG IORRG KD]DUG DUHDV
5HJDUGOHVV RI WKH OHYHO RI GDPDJH WR JUDYLW\
EXLOGLQJVWKDWDUHGDPDJHGE\DQ\FDXVHPXVW
HOHPHQWV RI WKH ODWHUDO IRUFHUHVLVWLQJ V\VWHP LI EH H[DPLQHG WR GHWHUPLQH LI WKH GDPDJH
VXEVWDQWLDO VWUXFWXUDO GDPDJH WR JUDYLW\ ORDG FRQVWLWXWHV VXEVWDQWLDO GDPDJH VHH WKH
FDUU\LQJFRPSRQHQWVZDVFDXVHGSULPDULO\E\ZLQG GHILQLWLRQ RI ³6XEVWDQWLDO GDPDJH´ LQ 6HFWLRQ
RU VHLVPLF HIIHFWV WKHQ WKH EXLOGLQJ VKDOO EH  %XLOGLQJV DUH FRQVLGHUHG WR KDYH
HYDOXDWHGLQDFFRUGDQFHZLWK6HFWLRQDQG VXVWDLQHGVXEVWDQWLDOGDPDJHZKHQWKHFRVWRI
LI QRQFRPSOLDQW UHKDELOLWDWHG LQ DFFRUGDQFH ZLWK UHSDLULQJ WKH EXLOGLQJ WR LWV SUHGDPDJHG
6HFWLRQ FRQGLWLRQ LV  SHUFHQW RU PRUH RI LWV PDUNHW
YDOXH EHIRUH WKH GDPDJH RFFXUUHG %XLOGLQJV
([FHSWLRQV GHWHUPLQHG WR EH VXEVWDQWLDOO\ GDPDJHG PXVW
PHHWWKHIORRGUHVLVWDQWSURYLVLRQVRIWKH6%&
 %XLOGLQJV DVVLJQHG WR 6HLVPLF 'HVLJQ
 VHH )(0$  $QVZHUV WR 4XHVWLRQV
&DWHJRU\ $ % RU & ZKRVH VXEVWDQWLDO $ERXW 6XEVWDQWLDOO\ 'DPDJHG %XLOGLQJV RU
VWUXFWXUDO GDPDJH ZDV QRW FDXVHG E\ 6%&6HFWLRQ5DVDSSOLFDEOH6HFWLRQ
HDUWKTXDNH QHHG QRW EH HYDOXDWHG RU RIWKH6%&DQG6HFWLRQ5RIWKH
UHKDELOLWDWHG IRU ORDG FRPELQDWLRQV WKDW 6%&  DGGUHVV UHTXLUHPHQWV IRU EXLOGLQJV
LQFOXGHHDUWKTXDNHHIIHFWV LQ GHVLJQDWHG IORRG KD]DUG DUHDV 7KH GHVLJQ
 2QH DQG WZRIDPLO\ GZHOOLQJV QHHG QRW EH DQG FRQVWUXFWLRQ LV UHTXLUHG WR EH LQ
HYDOXDWHG RU UHKDELOLWDWHG IRU ORDG DFFRUGDQFH ZLWK $6&(  ZKLFK LQ WXUQ
FRPELQDWLRQVWKDWLQFOXGHHDUWKTXDNHHIIHFWV UHIHUHQFHVWKHIORRGORDGLQJJLYHQLQ6%&

™ ,Q GHWHUPLQLQJ WKH H[WHQW RI UHSDLUV WR WKHVH 

JUDYLW\ORDGFDUU\LQJHOHPHQWVWKDWDUHQRWSDUW
RI WKH ODWHUDO IRUFHUHVLVWLQJ V\VWHP LW LV
6(&7,21(/(&75,&$/
LPSRUWDQW WR GHWHUPLQH LI ZLQG RU HDUWKTXDNHV  0DWHULDO  ([LVWLQJ HOHFWULFDO ZLULQJ DQG
KDYH FDXVHG WKH VWUXFWXUDO GDPDJH ,I WKH HTXLSPHQWXQGHUJRLQJUHSDLUVKDOOEHDOORZHGWREH
VXEVWDQWLDOVWUXFWXUDOGDPDJHLVGXHWRZLQGRU UHSDLUHGRUUHSODFHGZLWKOLNHPDWHULDO
HDUWKTXDNHVWKHQWKHODWHUDOV\VWHPLVVXVSHFW
DQG LW PXVW EH FKHFNHG HYHQ LI QR GDPDJH LV

6%&&& 

&+$37(5²5(3$,56

™ ,Q HVVHQFH WKLV VHFWLRQ VWDWHV WKDW H[LVWLQJ ™ (YLGHQFH RI RYHUVL]HG IXVHV EHLQJ XVHG RU
ZLULQJV\VWHPVFDQEHPDLQWDLQHGLQWKHVDPH WDPSHUHG ZLWK LV WKH FRGH¶V MXVWLILFDWLRQ IRU
PDQQHU LQ ZKLFK WKH\ ZHUH LQVWDOOHG 5HSDLUV SURKLELWLQJ WKH LQVWDOODWLRQ RI DQ\ QHZ (GLVRQ
DUHWREHPDGHZLWKPDWHULDOVDQGFRPSRQHQWV EDVH SOXJ IXVHV LQ H[LVWLQJ IXVH KROGHUV
WKDWGRQRWLQDQ\ZD\PDNHWKHH[LVWLQJZLULQJ 2EYLRXVO\ WKH KD]DUGRXV FRQGLWLRQ RI RYHU
V\VWHP OHVV VDIH 0DWHULDOV DQG FRPSRQHQWV IXVLQJ RU WDPSHULQJ PXVW QRW EH DOORZHG WR
FDQEHUHSODFHGZLWKLWHPVRIHTXDOTXDOLW\DQG FRQWLQXH WR H[LVW ,Q VXFK FDVHV UHSODFHPHQW
LQWHJULW\ RU ZLWK LWHPV RI VXSHULRU TXDOLW\ DQG IXVHV PXVW EH 7\SH 6 IXVHV ZKLFK DUH
LQWHJULW\ 7KH LQWHQW LV WR DOORZ QHFHVVDU\ GHVLJQHGWRWKZDUWRYHUIXVLQJDQGDWWHPSWVDW
UHSDLUV ZLWKRXW VXEMHFWLQJ WKH V\VWHP WR QHZ WDPSHULQJRUE\SDVVLQJ
FRQVWUXFWLRQ UHTXLUHPHQWV $ ZLULQJ V\VWHP
PDWHULDO RU FRPSRQHQW WKDW LV REVROHWH RU QR 1RQ JURXQGLQJW\SH UHFHSWDFOHV  )RU
ORQJHUUHFRJQL]HGE\FXUUHQWFRGHVLVSHUPLWWHG UHSODFHPHQWRIQRQJURXQGLQJW\SHUHFHSWDFOHVZLWK
WR EH XVHG IRU WKH SXUSRVH RI PDNLQJ UHSDLUV JURXQGLQJW\SHUHFHSWDFOHVDQGIRUEUDQFKFLUFXLWV
SURYLGHG WKDW LW LV FRQVLVWHQW ZLWK WKH H[LVWLQJ WKDWGRQRWKDYHDQHTXLSPHQWJURXQGLQJFRQGXFWRU
PDWHULDOV DQG FRPSRQHQWV DQG WKH V\VWHP LV LQWKHEUDQFKFLUFXLWU\WKHJURXQGLQJFRQGXFWRURI
QRWPDGHDQ\OHVVVDIH D JURXQGLQJW\SH UHFHSWDFOH RXWOHW VKDOO EH
5HFHSWDFOHV  5HSODFHPHQW RI HOHFWULFDO SHUPLWWHGWREHJURXQGHGWRDQ\DFFHVVLEOHSRLQWRQ
UHFHSWDFOHV VKDOO FRPSO\ ZLWK WKH DSSOLFDEOH WKHJURXQGLQJHOHFWURGHV\VWHPRUWRDQ\DFFHVVLEOH
UHTXLUHPHQWVRI6DXGL(OHFWULFDO&RGH6%&RU SRLQW RQ WKH JURXQGLQJ HOHFWURGH FRQGXFWRU LQ
6HFWLRQ'RI1)3$ DFFRUGDQFHZLWK6DXGL(OHFWULFDO&RGH6%&
RU6HFWLRQ&RI1)3$
™ 7KLVVHFWLRQWLHVWKHUHSODFHPHQWRIUHFHSWDFOH
GHYLFHV WR WKH SURYLVLRQV RI 6DXGL (OHFWULFDO ™ 7KLVVHFWLRQLVUHFRJQLWLRQRIWKHSURYLVLRQVRI
&RGH 6%&  RU 1)3$  ZKLFK GR QRW 6DXGL (OHFWULFDO &RGH 6%&  RU 6HFWLRQ
DOZD\VDOORZUHSODFHPHQWZLWKVLPLODUGHYLFHV & RI 1)3$  6HFWLRQ 
)RUH[DPSOHZKHUHDJURXQGLQJPHDQVH[LVWV DGGUHVVHV FLUFXPVWDQFHV ZKHUH H[LVWLQJ
XQJURXQGHGW\SH WZR FRQGXFWRU UHFHSWDFOHV UHFHSWDFOHV FDQQRW EH UHSODFHG ZLWK OLNH
PXVW EH UHSODFHG RQO\ ZLWK JURXQGLQJW\SH UHFHSWDFOHV DQG WKLV VHFWLRQ GHVFULEHV RQH RI
WKUHHFRQGXFWRU UHFHSWDFOHV 6LPLODUO\ WKH RSWLRQV VSHFLILHG LQ 6DXGL (OHFWULFDO &RGH
UHFHSWDFOHV LQ ORFDWLRQV ZKHUH JURXQGIDXOW 6%&RU6HFWLRQ'RI1)3$
FLUFXLWLQWHUUXSWHU*)&,SURWHFWLRQLVUHTXLUHG *URXS , UHFHSWDFOHV  1RQ³KRVSLWDO
PXVW EH UHSODFHG RQO\ ZLWK *)&,W\SH JUDGH´UHFHSWDFOHVLQSDWLHQWEHGORFDWLRQVRI*URXS
UHFHSWDFOHVRUWKH EUDQFK FLUFXLWPXVWSURYLGH
, VKDOO EH UHSODFHG ZLWK ³KRVSLWDO JUDGH´
VXFK *)&, SURWHFWLRQ 6HH 6DXGL (OHFWULFDO
&RGH 6%&  RU 6HFWLRQV ' UHFHSWDFOHV DV UHTXLUHG E\ 6DXGL (OHFWULFDO &RGH
WKURXJK ' RI 1)3$  IRU PRUH 6%&RU1)3$DQG$UWLFOHRI1)3$
UHSODFHPHQWSURYLVLRQV 
3OXJIXVHV3OXJIXVHVRIWKH(GLVRQEDVH ™ 7KLV VHFWLRQ UHIOHFWV WKH LQWHQW RI 6HFWLRQ
W\SH VKDOO EH XVHG IRU UHSODFHPHQWV RQO\ ZKHUH %RI1)3$DQGLW¶VDQH[FHSWLRQ
WKHUHLVQRHYLGHQFHRIRYHUIXVLQJRUWDPSHULQJSHU *URXQGLQJ RI DSSOLDQFHV  )UDPHV RI
DSSOLFDEOH UHTXLUHPHQWV RI 6DXGL (OHFWULFDO &RGH HOHFWULF UDQJHV ZDOOPRXQWHG RYHQV FRXQWHU
6%&RU6HFWLRQ%RI1)3$ PRXQWHGFRRNLQJXQLWVFORWKHVGU\HUVDQGRXWOHWRU
™ 7KLV VHFWLRQ GRHV QRW DOORZ (GLVRQEDVHW\SH MXQFWLRQER[HVWKDWDUHSDUWRIWKHH[LVWLQJEUDQFK
VFUHZ EDVH IXVHV WR UHSODFH H[LVWLQJ IXVHV FLUFXLWIRUWKHVHDSSOLDQFHVVKDOOEHSHUPLWWHGWREH
H[FHSWZKHUHWKHUHLVQRUHDVRQWREHOLHYHWKDW JURXQGHG WR WKH JURXQGHG FLUFXLW FRQGXFWRU LQ
WKH ZURQJ VL]H IXVHV KDYH EHHQ RU DUH EHLQJ DFFRUGDQFHZLWK6DXGL(OHFWULFDO&RGH6%&
XVHGRUZKHUHWKHUHLVQRHYLGHQFHRIDWWHPSWV RU6HFWLRQRI1)3$
WRGHIHDWWKHSURWHFWLRQ DIIRUGHGE\WKHIXVHV
(GLVRQEDVHIXVHVDUHSOXJVW\OHIXVHVZLWKWKH ™ 7KLV VHFWLRQ LV UHFRJQLWLRQ RI D SURYLVLRQ RI
VDPH VFUHZ WKUHDG EDVH DV WKH FRPPRQ 6HFWLRQRI1)3$WKDWSDUDOOHOVWKH
LQFDQGHVFHQW ODPS 6XFK IXVHV KDYH DPSHUH LQWHQW RI WKH FRGH WR DOORZ UHSDLUV WR EH
UDWLQJV RI  DPSV DQG OHVV DQG DUH FRQVLVWHQW ZLWK WKH RULJLQDO LQVWDOODWLRQ
LQWHUFKDQJHDEOH PHDQLQJ WKDW RFFXSDQWV DUH $OWKRXJK DOORZHG LQ WKH SDVW JURXQGLQJ RI
QRW SUHYHQWHG IURP LQVHUWLQJ IXVHV WKDW DUH DSSOLDQFHVWRWKHJURXQGHGFLUFXLWFRQGXFWRULV
UDWHGKLJKHUWKDQWKHFDSDFLW\RIWKHZLULQJWKH\ FRQVLGHUHG WR EH XQQHFHVVDULO\ ULVN\ DQG
DUHLQWHQGHGWRSURWHFWWKHUHIRUHILUHKD]DUGV WKHUHIRUHLVQRZDOORZHGRQO\IRUH[LVWLQJZLULQJ
DUHOLNHO\WREHFUHDWHG LQVWDOODWLRQV XQGHU VSHFLILHG FRQGLWLRQV WKDW
VHUYHWROLPLWWKHULVNWRDQDFFHSWDEOHOHYHO

6%&&& 

&+$37(5²5(3$,56

6(&7,210(&+$1,&$/ ™ 7KH VHFRQG UHTXLUHPHQW LV WKDW D YLVLEOH DQG

DXGLEOH DODUP EH LQVWDOOHG WR ZDUQ RFFXSDQWV
 *HQHUDO  ([LVWLQJ PHFKDQLFDO V\VWHPV XSRQ IDLOXUH RI WKH PHFKDQLFDO GUDIW GHYLFH RU
XQGHUJRLQJUHSDLUVKDOOQRWPDNHWKHEXLOGLQJOHVV ORVVRIHOHFWULFDOSRZHU,IWKHH[KDXVWHUIDLOVWR
FRQIRUPLQJ WKDQ LW ZDV EHIRUH WKH UHSDLU ZDV RSHUDWHWKHVROLGIXHOZLOOFRQWLQXHWREXUQDQG
XQGHUWDNHQ SURGXFH VPRNH DQG RWKHU SURGXFWV RI
FRPEXVWLRQ7KHRFFXSDQWVRIWKHEXLOGLQJPXVW
™ 7KLVVHFWLRQLVHVVHQWLDOO\DUHIHUHQFLQJVHFWLRQ EHZDUQHGWKDWWKHSRWHQWLDOO\GHDGO\SURGXFWV
WRGLUHFWWKHXVHU¶VDWWHQWLRQWRWKHSRVVLELOLW\RI RI FRPEXVWLRQ PLJKW EH VSLOOLQJ LQWR WKH OLYLQJ
RWKHU VHFWLRQV WKDW PLJKW EH UHOHYDQW WR VSDFH7KLVLVHVSHFLDOO\LPSRUWDQWLQUHVLGHQWLDO
PHFKDQLFDO V\VWHPV 5HSDLU ZRUN PXVW QRW RFFXSDQFLHV ZKHUH WKH RFFXSDQWV PD\ KDYH
DOWHUWKHQDWXUHRIDSSOLDQFHVDQGHTXLSPHQWLQ JRQHWRVOHHSZLWKWKHILUHSODFHRUDSSOLDQFHVWLOO
D ZD\ WKDW ZRXOG LQYDOLGDWH WKH OLVWLQJ RU EXUQLQJ
FRQGLWLRQVRIDSSURYDO ™ 7KHWKLUGUHTXLUHPHQWLVWKDWDVPRNHGHWHFWRU
 0HFKDQLFDO GUDIW V\VWHPV IRU PDQXDOO\ PXVWEHLQVWDOOHGLQWKHURRPZLWKWKHDSSOLDQFH
ILUHG DSSOLDQFHV DQG ILUHSODFHV  $ PHFKDQLFDO WRSURYLGHIXUWKHUZDUQLQJVKRXOGWKHH[KDXVWHU
IDLO WR RSHUDWH SURSHUO\ 7KLV VHFWLRQ LV QRW
GUDIW V\VWHP VKDOO EH SHUPLWWHG WR EH XVHG ZLWK
LQWHQGHG WR DOORZ PHFKDQLFDO GUDIW V\VWHPV
PDQXDOO\ ILUHG DSSOLDQFHV DQG ILUHSODFHV ZKHUH FKLPQH\H[KDXVWHUVDVDVXEVWLWXWHIRUSURSHU
VXFK D V\VWHP FRPSOLHV ZLWK DOO RI WKH IROORZLQJ FKLPQH\GHVLJQDQGFRQVWUXFWLRQ,WLVLQWHQGHG
UHTXLUHPHQWV WRDSSO\WRH[LVWLQJFKLPQH\VWKDWIDLOWRSURGXFH
WKHUHTXLUHGGUDIW
 7KH PHFKDQLFDO GUDIW GHYLFH VKDOO EH OLVWHG
DQG LQVWDOOHG LQ DFFRUGDQFH ZLWK WKH 
PDQXIDFWXUHU¶VLQVWDOODWLRQLQVWUXFWLRQV 6(&7,213/80%,1*
 $ GHYLFH VKDOO EH LQVWDOOHG WKDW SURGXFHV
YLVLEOHDQGDXGLEOHZDUQLQJXSRQIDLOXUHRIWKH  0DWHULDOV  3OXPELQJ PDWHULDOV DQG
PHFKDQLFDO GUDIW GHYLFH RU ORVV RI HOHFWULFDO VXSSOLHV VKDOO QRW EH XVHG IRU UHSDLUV WKDW DUH
SRZHU DW DQ\ WLPH WKDW WKH PHFKDQLFDO GUDIW SURKLELWHGLQWKH6%&
GHYLFH LV WXUQHG RQ 7KLV GHYLFH VKDOO EH ™ 7KLV VHFWLRQ HVVHQWLDOO\ UHIHUV WKH XVHU WR WKH
HTXLSSHGZLWKDEDWWHU\EDFNXSLILWUHFHLYHV 6DXGL6%&LQRUGHUWRGHWHUPLQHSURKLELWHG
SRZHUIURPWKHEXLOGLQJZLULQJ PDWHULDOV IRU XVH LQ WKH UHSDLU RI SOXPELQJ
 $ VPRNH GHWHFWRU VKDOO EH LQVWDOOHG LQ WKH V\VWHPV )RU H[DPSOH &KDSWHUV  DQG  RI
URRP ZLWK WKH DSSOLDQFH RU ILUHSODFH 7KLV 6DXGL 6%&  FRQWDLQ SURKLELWHG SOXPELQJ
V\VWHP MRLQW DQG FRQQHFWLRQ PHWKRGV WKDW
GHYLFH VKDOO EH HTXLSSHG ZLWK D EDWWHU\
ZRXOGDOVREHDSSOLFDEOHWRUHSDLUZRUN
EDFNXSLILWUHFHLYHVSRZHUIURPWKHEXLOGLQJ
ZLULQJ  :DWHUFORVHWUHSODFHPHQW7KHPD[LPXP
ZDWHUFRQVXPSWLRQIORZUDWHVDQGTXDQWLWLHVIRUDOO
™ 7KLV VHFWLRQ FRQWDLQV D UHPHG\ IRU H[LVWLQJ
FKLPQH\V WKDW GR QRW SURGXFH VXIILFLHQW GUDIW UHSODFHG ZDWHU FORVHWV VKDOO EH  / SHU IOXVKLQJ
6RPHFKLPQH\VIDLOWRSURGXFHVXIILFLHQW GUDIW F\FOH
LQWHUPLWWHQWO\ EHFDXVH RI ZLQG VSHHG DQG ([FHSWLRQ%ORZRXWGHVLJQZDWHUFORVHWV>/SHU
GLUHFWLRQ RU RXWGRRU WHPSHUDWXUHV *DVILUHG IOXVKLQJF\FOH@
DQG RLOILUHG DSSOLDQFHV FDQ EH LQWHUORFNHG WR
WKH H[KDXVWHUWRLPPHGLDWHO\VKXWRIIWKH IORZ ™ /HJLVODWLRQ PDQGDWHV WKH GHVLJQ DQG XVH RI
RIIXHOLIWKHUHLVDSRZHUIDLOXUHRUPDOIXQFWLRQ ZDWHUFORVHWVWRKDYHIORZUDWHVUHVWULFWHGWR
RIWKHH[KDXVWHU2EYLRXVO\WKHVDPHLQWHUORFN / SHU IOXVKLQJ F\FOH H[FHSW ZKHUH EORZRXW
FDQQRWEHXVHGLQDZRRGEXUQLQJILUHSODFHRU W\SH IL[WXUHV DUH XWLOL]HG %ORZRXWGHVLJQHG
VWRYH 7KLV VHFWLRQ DOORZV WKH XVH RI ZDWHU FORVHWV DUH H[HPSW IURP WKH  /
PHFKDQLFDO GUDIW V\VWHPV ZLWK VROLG IXHO UHTXLUHPHQWEHFDXVHVXFKIL[WXUHVGHSHQGRQ
EXUQLQJ DSSOLDQFHV DQG ILUHSODFHV LI FHUWDLQ KLJKYROXPH DQG KLJKYHORFLW\ ZDWHU IORZ WR
UHTXLUHPHQWVDUHPHW HYDFXDWH WKH FRQWHQWV RI WKH ERZO 7KHUHIRUH
™ 7KH ILUVW UHTXLUHPHQW LV WKDW WKH GUDIW GHYLFH VXFKIL[WXUHGHVLJQVPD\QRWEHDEOHWRIXQFWLRQ
PXVWEHOLVWHGIRUWKLVDSSOLFDWLRQDQGLQVWDOOHG DWORZHUFRQVXPSWLRQUDWHV
LQ FRPSOLDQFH ZLWK WKH PDQXIDFWXUHU¶V
LQVWDOODWLRQLQVWUXFWLRQV7KLVZLOOHQVXUHWKDWWKH 
GUDIWV\VWHPLVLQVWDOOHGLQWKHVDPHZD\LWZDV
WHVWHGLQWKHODERUDWRU\RIWKHOLVWLQJDJHQF\

6%&&& 

&+$37(5²5(3$,56

™ %LEOLRJUDSK\ '& )HGHUDO (PHUJHQF\ 0DQDJHPHQW

$JHQF\
7KHIROORZLQJUHVRXUFHPDWHULDOVZHUHXVHGLQWKH
)(0$  +RPHRZQHU¶V *XLGH WR 5HWURILWWLQJ²
SUHSDUDWLRQRIWKHFRPPHQWDU\IRUWKLVFKDSWHU
6L[ :D\V WR 3URWHFW <RXU +RXVH )URP
RIWKHFRGH
)ORRGLQJ :DVKLQJWRQ '& )HGHUDO
$7&  3URFHGXUHV IRU 3RVWHDUWKTXDNH 6DIHW\
(PHUJHQF\0DQDJHPHQW$JHQF\
(YDOXDWLRQ RI %XLOGLQJV 5HGZRRG &LW\ &$
)(0$  3UHVWDQGDUG DQG &RPPHQWDU\ IRU WKH
$SSOLHG7HFKQRORJ\&RXQFLO
6HLVPLF 5HKDELOLWDWLRQ RI %XLOGLQJV
$7&  $GGHQGXP WR WKH $7& 
:DVKLQJWRQ '& )HGHUDO (PHUJHQF\
3RVWHDUWKTXDNH %XLOGLQJ 6DIHW\ (YDOXDWLRQ
0DQDJHPHQW$JHQF\
3URFHGXUHV 5HGZRRG &LW\ &$ $SSOLHG
)(0$  1(+53 5HFRPPHQGHG 3URYLVLRQV
7HFKQRORJ\&RXQFLO
IRU6HLVPLF5HJXODWLRQVIRU1HZ%XLOGLQJVDQG
$7&  6HLVPLF (YDOXDWLRQ DQG 5HWURILW RI
2WKHU 6WUXFWXUHV 3DUW  :DVKLQJWRQ '&
&RQFUHWH %XLOGLQJV 5HGZRRG &LW\ &$
3UHSDUHG E\ WKH %XLOGLQJ 6HLVPLF 6DIHW\
3UHSDUHG E\ WKH $SSOLHG 7HFKQRORJ\ &RXQFLO
&RXQFLO IRU WKH )HGHUDO (PHUJHQF\
IRUWKH&DOLIRUQLD6HLVPLF6DIHW\&RPPLVVLRQ
0DQDJHPHQW$JHQF\

)(0$  1(+53 5HFRPPHQGHG 3URYLVLRQV
&KDQJ 'DYLG DQG +DPLG 1DGHUL ³,QWHUQDWLRQDO
IRU6HLVPLF5HJXODWLRQVIRU1HZ%XLOGLQJVDQG
([LVWLQJ %XLOGLQJ &RGH´ 6WUXFWXUDO (QJLQHHU
2WKHU 6WUXFWXUHV &RPPHQWDU\ 3DUW 
2FWREHUSS
&RPPHQWDU\ :DVKLQJWRQ '& 3UHSDUHG E\
&KHQ :DL)DK DQG &KDUOHV 6FDZWKRUQ
WKH %XLOGLQJ 6HLVPLF 6DIHW\ &RXQFLO IRU WKH
(DUWKTXDNH (QJLQHHULQJ +DQGERRN %RFD
)HGHUDO (PHUJHQF\ 0DQDJHPHQW $JHQF\
5DWRQ)/&5&3UHVV//&

)(0$  1(+53 +DQGERRN IRU WKH 6HLVPLF
*KRVK 6. DQG 'DYLG $ )DQHOOD 6HLVPLF DQG
(YDOXDWLRQRI ([LVWLQJ%XLOGLQJV:DVKLQJWRQ
:LQG'HVLJQRI&RQFUHWH%XLOGLQJV,%&
'& )HGHUDO (PHUJHQF\ 0DQDJHPHQW
$6&(  $&,  :DVKLQJWRQ '&
$JHQF\
,QWHUQDWLRQDO&RGH&RXQFLO
)(0$  $QVZHUV WR 4XHVWLRQV $ERXW
/H\HQGHFNHU (9 $' )UDQNHO .6 5XVWDOHV
6XEVWDQWLDOO\ 'DPDJHG %XLOGLQJV
6HLVPLF 'HVLJQ 3DUDPHWHUV 86 *HRORJLFDO
:DVKLQJWRQ '& )HGHUDO (PHUJHQF\
6XUYH\2SHQ)LOH5HSRUW:DVKLQJWRQ
0DQDJHPHQW$JHQF\
'&8QLWHG6WDWHV*HRORJLFDO6XUYH\
)(0$  (QJLQHHULQJ 3ULQFLSOHV DQG 3UDFWLFHV
1DHLP )DU]DG 7KH 6HLVPLF 'HVLJQ +DQGERRN
IRU 5HWURILWWLQJ )ORRGSURQH 5HVLGHQWLDO
1RUZHOO 0$ .OXZHU $FDGHPLF 3XEOLVKHUV
%XLOGLQJV :DVKLQJWRQ '& )HGHUDO

(PHUJHQF\0DQDJHPHQW$JHQF\
5HFRPPHQGHG /DWHUDO )RUFH 5HTXLUHPHQWV DQG
)(0$  1(+53 *XLGHOLQHV IRU WKH 6HLVPLF
&RPPHQWDU\ 6($2& %OXH %RRN
5HKDELOLWDWLRQ RI %XLOGLQJV :DVKLQJWRQ '&
6DFUDPHQWR &$ 6WUXFWXUDO (QJLQHHUV
)HGHUDO (PHUJHQF\ 0DQDJHPHQW $JHQF\
$VVRFLDWLRQRI&DOLIRUQLD

5HGXFLQJ )ORRG /RVVHV 7KURXJK WKH ,QWHUQDWLRQDO
)(0$1(+53&RPPHQWDU\RQWKH*XLGHOLQHV
&RGH6HULHV0HHWLQJWKH5HTXLUHPHQWVRIWKH
IRUWKH 6HLVPLF 5HKDELOLWDWLRQ RI %XLOGLQJV
1DWLRQDO )ORRG ,QVXUDQFH 3URJUDP
:DVKLQJWRQ '& )HGHUDO (PHUJHQF\
:DVKLQJWRQ '& ,QWHUQDWLRQDO &RGH &RXQFLO
0DQDJHPHQW$JHQF\
0D\
)(0$+DQGERRNIRUWKH6HLVPLF(YDOXDWLRQRI
7DO\ 1DUHQGUD /RDGV DQG /RDGV 3DWKV LQ
%XLOGLQJV²$ 3UHVWDQGDUG :DVKLQJWRQ '&
%XLOGLQJV 3ULQFLSOHV RI 6WUXFWXUDO 'HVLJQ
)HGHUDO (PHUJHQF\ 0DQDJHPHQW $JHQF\
:DVKLQJWRQ '& ,QWHUQDWLRQDO &RGH &RXQFLO


)(0$  *XLGDQFH RQ (VWLPDWLQJ 6XEVWDQWLDO
:LOOLDPV$ODQ6HLVPLFDQG:LQG)RUFHV6WUXFWXUDO
'DPDJH 8VLQJ WKH 1),3 5HVLGHQWLDO
'HVLJQ ([DPSOHV :DVKLQJWRQ '&
6XEVWDQWLDO 'DPDJH (VWLPDWRU :DVKLQJWRQ
,QWHUQDWLRQDO&RGH&RXQFLO


6%&&& 

&+$37(5²5(3$,56
























7KLVSDJHOHIWLQWHQWLRQDOO\EODQN

6%&&& 

 &+$37(5²$/7(5$7,216²/(9(/

²$/7(5$7,216²/(9(/

DOVRUHIHUVWRWKH6%&6%&6%&
™ *HQHUDO&RPPHQWV
DQG6%&IRUQHZPDWHULDOV7KHUHPDLQGHU
™ 7KLV FKDSWHU SURYLGHV WKH WHFKQLFDO
RI WKH FKDSWHU LV UHODWHG WR ILUH SURWHFWLRQ
UHTXLUHPHQWVIRUH[LVWLQJEXLOGLQJVWKDWXQGHUJR
PHDQV RI HJUHVV DFFHVVLELOLW\ VWUXFWXUDO DQG
/HYHODOWHUDWLRQVDVGHVFULEHGLQ6HFWLRQ
HQHUJ\ FRQVHUYDWLRQ /HYHO  DOWHUDWLRQV DUH
LQFOXGLQJ WKH UHSODFHPHQW RU FRYHULQJ RI
FRQVLGHUHG WKH OHDVW GUDVWLF .QRZQ LQ SDVW
H[LVWLQJ PDWHULDOV HOHPHQWV HTXLSPHQW RU
FRGHVVLPSO\DV³DOWHUDWLRQV´WKHFODVVLILFDWLRQ
IL[WXUHV XVLQJ QHZ PDWHULDOV IRU WKH VDPH
ZDVEURNHQLQWRWKUHHOHYHOVEDVHGRQWKHIDFW
SXUSRVH7KLVFKDSWHUVLPLODUWRRWKHUFKDSWHUV
WKDW PLQRU DOWHUDWLRQV QRW LQFOXGLQJ VSDFH
RIWKHFRGHFRYHUVDOOEXLOGLQJUHODWHGVXEMHFWV
UHFRQILJXUDWLRQ DQG H[WHQVLYH DOWHUDWLRQV WKDW
VXFK DV VWUXFWXUDO PHFKDQLFDO SOXPELQJ
PLJKWLQFOXGHUHORFDWLRQRIZDOOVDQGSDUWLWLRQV
HOHFWULFDO DQG DFFHVVLELOLW\ DV ZHOO DV WKH ILUH
LQ WKH HQWLUH EXLOGLQJ VKRXOG EH WUHDWHG
DQGOLIHVDIHW\LVVXHVZKHQWKHDOWHUDWLRQVDUH
GLIIHUHQWO\DQGZLWKGLIIHUHQWWKUHVKROGOHYHOVIRU
FODVVLILHGDV/HYHO6HFWLRQVDQGDUH
UHTXLULQJ XSJUDGHV RU LPSURYHPHQWV WR WKH
UHODWHG WR VFRSLQJ EXLOGLQJ HOHPHQWV DQG
EXLOGLQJRUVSDFHVLQWKHEXLOGLQJ
PDWHULDOV,WVKRXOGEHQRWHGWKDWLQWKHLQWHUHVW
™ 3XUSRVH
RIEHLQJEULHIDQGDYRLGLQJWKHSUHVHQWDWLRQRI
™ 7KH SXUSRVH RI WKLV FKDSWHU LV WR SURYLGH
PDWHULDOVWKDWDUHUHSHWLWLYHLQQDWXUHLQYDULRXV
GHWDLOHGUHTXLUHPHQWVDQGSURYLVLRQVWRLGHQWLI\
FKDSWHUV 6HFWLRQ  UHTXLUHV WKDW /HYHO 
PDQGDWHG LPSURYHPHQWV LQ H[LVWLQJ EXLOGLQJ
DOWHUDWLRQVFRPSO\QRWRQO\ZLWK&KDSWHUEXW
HOHPHQWV EXLOGLQJ VSDFHV DQG WKH EXLOGLQJ¶V
DOVR ZLWK &KDSWHU  6LPLODUO\ 6HFWLRQ 
VWUXFWXUDOV\VWHP7KLVFKDSWHULVGLVWLQJXLVKHG
UHTXLUHV WKDW /HYHO  DOWHUDWLRQV FRPSO\ ZLWK
IURP &KDSWHUV  DQG  E\ RQO\ LQYROYLQJ WKH
&KDSWHUV  DQG  DV ZHOO DV &KDSWHU  $V
UHSODFHPHQW RI EXLOGLQJ FRPSRQHQWV ZLWK QHZ
VXFK &KDSWHU  LV DSSOLFDEOH WR DOO OHYHOV RI
FRPSRQHQWV /HYHO  DOWHUDWLRQV LQYROYH PRUH
DOWHUDWLRQZRUN6HFWLRQ%XLOGLQJ(OHPHQWV
VSDFHUHFRQILJXUDWLRQZKLOH/HYHODOWHUDWLRQV
DQG0DWHULDOVFRYHUVLQGHWDLOHOHPHQWVVXFK
LQYROYH VSDFH UHFRQILJXUDWLRQ H[FHHGLQJ 
DVLQWHULRUILQLVKHVDQGFDUSHWLQJ6HFWLRQ
SHUFHQWRIWKHEXLOGLQJDUHD
6(&7,21*(1(5$/ ([FHSWLRQ  :KHUH WKH FXUUHQW OHYHO RI VDIHW\ RU
 6FRSH/HYHODOWHUDWLRQVDVGHVFULEHGLQ VDQLWDWLRQ LV SURSRVHG WR EH UHGXFHG WKH SRUWLRQ
6HFWLRQVKDOOFRPSO\ZLWKWKHUHTXLUHPHQWVRI DOWHUHG VKDOO FRQIRUP WR WKH UHTXLUHPHQWV RI WKH
WKLVFKDSWHU/HYHODOWHUDWLRQVWRKLVWRULFEXLOGLQJV 6%&
VKDOOFRPSO\ZLWKWKLVFKDSWHUH[FHSWDVPRGLILHG ™ 7KH FXUUHQW OHYHO RI VDIHW\ RU OHYHO RI
LQ&KDSWHU FRPSOLDQFH ZLWK UHJXODWRU\ SURYLVLRQV LQ D
™ /HYHODOWHUDWLRQVDUHGHVFULEHGLQ6HFWLRQ EXLOGLQJ LV QRW LQ JHQHUDO DOORZHG WR EH
DV WKH W\SH RI DOWHUDWLRQV WKDW LQFOXGH WKH UHGXFHGUHJDUGOHVVRIWKHW\SHRIZRUNWDNLQJ
UHPRYDO DQG UHSODFHPHQW RU WKH FRYHULQJ RI SODFH LQ WKH EXLOGLQJ )RU H[DPSOH D &ODVV %
H[LVWLQJ PDWHULDOV DQG HOHPHQWV 7KH VFRSLQJ LQWHULRUZDOOILQLVKLQDQH[LWSDVVDJHZD\ZLOOQRW
SURYLVLRQV RI WKLV VHFWLRQ UHIHU WKH XVHU WR EHDOORZHGWREHUHSODFHGZLWKDILQLVKPDWHULDO
6HFWLRQ  WR EH FHUWDLQ WKDW WKH ZRUN WKDW KDV D &ODVV & UDWLQJ 7KH H[FHSWLRQ
FODVVLILFDWLRQ LV /HYHO  DOWHUDWLRQV DQG WKDW GHVFULEHVWKHRQO\VLWXDWLRQZKHUHWKHUHGXFWLRQ
&KDSWHULVWKHDSSURSULDWHFKDSWHUWREHXVHG RIWKHOHYHORIVDIHW\RUWKHOHYHORIFRPSOLDQFH
+LVWRULFEXLOGLQJVKDYHXQLTXHDOORZDQFHVDQG LV DOORZHG 7KLV LV WKH FRQGLWLRQ ZKHUH WKH
UHTXLUHPHQWVLQ&KDSWHU7KHSURYLVLRQVRI H[LVWLQJOHYHORIFRPSOLDQFHLVDERYHWKHOHYHO
WKLVFKDSWHUDSSO\EXWWKHUHTXLUHPHQWVRIWKLV UHTXLUHGE\WKH6%&DQGWKHUHGXFHGOHYHO
FKDSWHU PD\ EH VXSHUVHGHG E\ DOORZDQFHV RU RIFRPSOLDQFHVWLOOPHHWV RUH[FHHGVWKH 6%&
UHTXLUHPHQWVLQ&KDSWHUWKDWDUHVSHFLILFWR UHTXLUHPHQWV6RPHRWKHUH[DPSOHVZKHUH
KLVWRULFEXLOGLQJV WKH UHGXFWLRQ RI OHYHO RI FRPSOLDQFH LV QRW
DOORZHG PLJKW EH WR PHHW ZDWHU VXSSO\
 &RQIRUPDQFH  $Q H[LVWLQJ EXLOGLQJ RU UHTXLUHPHQWVVHH&RPPHQWDU\)LJXUH
SRUWLRQ WKHUHRI VKDOO QRW EH DOWHUHG VXFK WKDW WKH DQG WR PHHW HOHFWULFDO ORDGV RU UHGXFWLRQ LQ
EXLOGLQJ EHFRPHV OHVV VDIH WKDQ LWV H[LVWLQJ H[LVWLQJOLJKWDQGYHQWLODWLRQWREHORZWKHOHYHOV
FRQGLWLRQ

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

UHTXLUHGLQWKH6%&RUEHORZWKHH[LVWLQJ VKDOOEHLQVWDOOHGZKHUHDQH[LVWLQJZLQGRZLV
OHYHOVZKLFKHYHULVORZHU UHSODFHGDQGZKHUHDOORIWKHIROORZLQJDSSO\WRWKH
 )ORRGKD]DUGDUHDV,QIORRGKD]DUGDUHDV UHSODFHPHQWZLQGRZ
DOWHUDWLRQVWKDWFRQVWLWXWHVXEVWDQWLDOLPSURYHPHQW 
VKDOOUHTXLUHWKDWWKHEXLOGLQJFRPSO\ZLWK6HFWLRQ  7KHZLQGRZLVRSHUDEOH
 RI 6%&  RU 6HFWLRQ 5 RI WKH 6%&  7KH ZLQGRZ UHSODFHPHQW LQFOXGHV
DVDSSOLFDEOH UHSODFHPHQWRIWKHVDVKDQGWKHIUDPH
 2QHRIWKHIROORZLQJDSSOLHV
™ :KHQDOWHUDWLRQVWRH[LVWLQJEXLOGLQJVWKDW DUH 
ORFDWHG LQ IORRG KD]DUG DUHDV DUH SURSRVHG
 ,Q *URXS 5 RU 5 EXLOGLQJV
GHWHUPLQDWLRQV DUH WR EH PDGH DV WR ZKHWKHU
WKH SURSRVHG ZRUN LV D VXEVWDQWLDO
FRQWDLQLQJGZHOOLQJXQLWVWKHWRSRIWKH
LPSURYHPHQW ,I WKH SURSRVHG DOWHUDWLRQV DUH VLOORIWKHZLQGRZRSHQLQJLVDWDKHLJKW
GHWHUPLQHG WR EH VXEVWDQWLDO LPSURYHPHQWV OHVV WKDQ  PP DERYH WKH ILQLVKHG
WKHQWKHH[LVWLQJEXLOGLQJLVWREHEURXJKWLQWR IORRURU
FRPSOLDQFH ZLWK WKH IORRGUHVLVWDQW SURYLVLRQV  ,Q RQH DQG WZRIDPLO\ GZHOOLQJV DQG
RIWKH6%&ZKLFKUHTXLUHVWKHGHVLJQDQG WRZQKRXVHVUHJXODWHGE\WKH6%&
FRQVWUXFWLRQ RI WKH EXLOGLQJ WR FRPSO\ ZLWK WKHWRSVLOORIWKHZLQGRZRSHQLQJLVDW
$6&( D KHLJKW OHVV WKDQ  PP DERYH WKH
6(&7,21%8,/',1*(/(0(176 ILQLVKHGIORRU
$1'0$7(5,$/6 
 7KH ZLQGRZ ZLOO SHUPLW RSHQLQJV WKDW ZLOO
 ,QWHULRU ILQLVKHV  $OO QHZO\ LQVWDOOHG DOORZSDVVDJHRIDPPVSKHUHZKHQWKH
LQWHULRUZDOODQGFHLOLQJILQLVKHVVKDOOFRPSO\ZLWK ZLQGRZLVLQLWVODUJHVWRSHQHGSRVLWLRQDQG
&KDSWHURI6%&  7KHYHUWLFDOGLVWDQFHIURPWKHWRSRIWKHVLOORI
™ 1HZO\ LQVWDOOHG LQWHULRU ILQLVK PDWHULDOV DUH WKHZLQGRZRSHQLQJWRWKHILQLVKHGJUDGHRU
UHTXLUHG WR FRPSO\ ZLWK WKH IODPH VSUHDG DQG RWKHU VXUIDFH EHORZ RQ WKH H[WHULRU RI WKH
VPRNHGHYHORSHG LQGH[ UHTXLUHPHQWV RI WKH EXLOGLQJLVJUHDWHUWKDQP
6%&  7KH OHYHO RI GHYHORSHG VPRNH 
VXUIDFH EXUQLQJ IODPH VSUHDG DQG WR[LF 7KHZLQGRZRSHQLQJFRQWUROGHYLFHDIWHURSHUDWLRQ
E\SURGXFWVRIFRPEXVWLRQDUHFULWLFDOHOHPHQWV WRUHOHDVHWKHFRQWUROGHYLFHDOORZLQJWKHZLQGRZ
WR EH FRQVLGHUHG LQ ILUH VLWXDWLRQV )RU WKLV WR IXOO\ RSHQ VKDOO QRW UHGXFH WKH PLQLPXP QHW
UHDVRQWKHFRGHH[SOLFLWO\ RXWOLQHVWKHFULWHULD FOHDURSHQLQJDUHDRIWKHZLQGRZXQLWWROHVVWKDQ
IRU LQWHULRU ILQLVKHV 7KHVH DUH UHTXLUHPHQWV
WKHDUHDUHTXLUHGE\WKH6%&
WKDW KDYH SRWHQWLDOO\ GUDPDWLF HIIHFWV RQ
EXLOGLQJDQGRFFXSDQWVDIHW\LQILUHVLWXDWLRQV ([FHSWLRQV
 ,QWHULRU IORRU ILQLVK  1HZ LQWHULRU IORRU  2SHUDEOHZLQGRZVZKHUHWKHWRSRIWKHVLOORI
ILQLVKLQFOXGLQJQHZFDUSHWLQJXVHGDVDQLQWHULRU WKHZLQGRZRSHQLQJLVORFDWHGPRUHWKDQ
IORRUILQLVKPDWHULDOVKDOOFRPSO\ZLWK6HFWLRQ P DERYH WKH ILQLVKHG JUDGH RU RWKHU VXUIDFH
RI6%& EHORZRQWKHH[WHULRURIWKHURRPVSDFHRU
™ 7KHVDPH GHVFULSWLRQDQG UHDVRQLQJSURYLGHG EXLOGLQJDQGWKDWDUHSURYLGHGZLWKZLQGRZ
LQ6HFWLRQDSSO\KHUHWRPDWHULDOVQHZO\ IDOO SUHYHQWLRQ GHYLFHV WKDW FRPSO\ ZLWK
LQVWDOOHGDVIORRUILQLVKPDWHULDOVLQFOXGLQJEXW $670)
QRWOLPLWHGWRFDUSHWLQJ  2SHUDEOH ZLQGRZV ZLWK RSHQLQJV WKDW DUH
SURYLGHGZLWKZLQGRZIDOOSUHYHQWLRQGHYLFHV
 ,QWHULRUWULP$OOQHZO\LQVWDOOHGLQWHULRU
WKDWFRPSO\ZLWK$670)
WULP PDWHULDOV VKDOO FRPSO\ ZLWK 6HFWLRQ  RI
6%& ™ 7KLV VHFWLRQ UHTXLUHV WKDW ZKHQ ZLQGRZV DUH
UHSODFHG ZLQGRZ RSHQLQJ FRQWURO GHYLFHV EH
™ 7KHVDPHGHVFULSWLRQDQG UHDVRQLQJSURYLGHG SURYLGHG WR SURWHFW FKLOGUHQ IURP IDOOV 7KHUH
LQ6HFWLRQDSSO\KHUHWRPDWHULDOVQHZO\ DUHVHYHUDOFRQGLWLRQVWKDWPXVWEHPHWEHIRUH
LQVWDOOHGDVLQWHULRUWULPPDWHULDOV WKLV VHFWLRQ EHFRPHV DSSOLFDEOH 7KH ILUVW
 :LQGRZ RSHQLQJ FRQWURO GHYLFHV  ,Q FRQGLWLRQLVWKDWWKHZLQGRZPXVWEHRSHUDEOH
*URXS 5 RU 5 EXLOGLQJV FRQWDLQLQJ GZHOOLQJ ,IWKHZLQGRZLVQRWRSHUDEOHWKHQWKHFRQFHUQ
XQLWV DQG RQH DQG WZRIDPLO\ GZHOOLQJV DQG IRU VDIHW\ IURP IDOOLQJ LV QRW SUHVHQW 7KH
VHFRQGFRQGLWLRQUHODWHV WRZKHWKHUWKH HQWLUH
WRZQKRXVHV UHJXODWHG E\ WKH 6%&  ZLQGRZ ZLQGRZLQFOXGLQJWKHVDVK DQGIUDPHLVEHLQJ
RSHQLQJFRQWUROGHYLFHVFRPSO\LQJZLWK$670)

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

UHSODFHG ,I LW LV VLPSO\ D UHSDLU RI D SDQH RI UHTXLULQJ IXOO FRPSOLDQFH ZLWK WKH 6%&  RU
JODVV WKHQ WKH UHTXLUHPHQW ZRXOG QRW EH 6%&DVDSSOLFDEOH7KHUHDUHWZRFULWHULD
DSSOLFDEOH ,WHP  DGGUHVVHV WKH VSHFLILF WKDWPXVWEHPHW7KHILUVWLVWKDWWKHZLQGRZLV
ORFDWLRQ RI WKH RSHQLQJ RQ WKH LQVLGH RI WKH WKH ODUJHVW VL]H WKDW WKH PDQXIDFWXUHU FDQ
EXLOGLQJ >VHH &RPPHQWDU\ )LJXUH @ SURYLGHIRUWKDWRSHQLQJWKHH[LVWLQJIUDPHRU
,WHP  IRFXVHV WKHVH SURYLVLRQV RQ QRW RQO\ URXJK RSHQLQJ 7KH VHFRQG SHUPLWV WKH
RSHUDEOH ZLQGRZV EXW DOVR ZLQGRZV WKURXJK RSHUDWLQJ VW\OH RI WKH RULJLQDO ZLQGRZ WR EH
ZKLFK D FKLOG FRXOG DFWXDOO\ ILW ,I D PP UHSOLFDWHG EXW WKH UHSODFHPHQW ZLQGRZ PXVW
GLDPHWHU VSKHUH FDQ SDVV WKURXJK D ZLQGRZ SURYLGH HTXDO RU JUHDWHU RSHQLQJ DUHD 7KLV
RSHQLQJVRFDQDFKLOGWKXVJXDUGVPXVWEH VHFWLRQDOVRSHUPLWVWKHXVHRIZLQGRZRSHQLQJ
LQVWDOOHG)LQDOO\,WHPDGGUHVVHVZKHWKHUWKH FRQWURO GHYLFHV DV UHTXLUHG LQ 6HFWLRQ 
ZLQGRZLVKLJKHQRXJKIURPWKHJURXQGWREHRI 7KH IRFXV RI 6HFWLRQ  LV RQ IDOO VDIHW\
FRQFHUQIRULQMXU\IURPIDOOLQJ>VHH&RPPHQWDU\ ZKHUHDVWKLVVHFWLRQLVIRFXVHGRQHPHUJHQF\
)LJXUH @ 7KLV VHFWLRQ DSSOLHV WR WKH HVFDSH7KLVSURYLVLRQDYRLGVFRQIOLFWEHWZHHQ
IROORZLQJRFFXSDQFLHV WKHWZRUHTXLUHPHQWV
x *URXS52FFXSDQFLHVFRQWDLQLQJGZHOOLQJ  0DWHULDOV DQG PHWKRGV  $OO QHZ ZRUN
XQLWV VKDOO FRPSO\ ZLWK WKH PDWHULDOV DQG PHWKRGV
x *URXS52FFXSDQFLHVFRQWDLQLQJGZHOOLQJ UHTXLUHPHQWVLQWKH6%&6%&6%&
XQLWV DQG 6%&  DV DSSOLFDEOHWKDWVSHFLI\PDWHULDO
x 2QH DQG WZRIDPLO\ GZHOOLQJV DQG VWDQGDUGV GHWDLO RI LQVWDOODWLRQ DQG FRQQHFWLRQ
WRZQKRXVHV MRLQWVSHQHWUDWLRQVDQGFRQWLQXLW\RIDQ\HOHPHQW
FRPSRQHQWRUV\VWHPLQWKHEXLOGLQJ
™ 7KHFRQWUROGHYLFHFDQQRWUHGXFHWROHVVWKDQ
WKDW UHTXLUHG LQ 6%&  6HFWLRQ  ™ 0DWHULDOV DQG PHWKRGV UHTXLUHPHQWV UHIHU WR
6HFWLRQDOVRDGGUHVVHVWKLVLVVXHIRUWKH WKHUHTXLUHPHQWVRIYDULRXVFRGHVVXFKDVWKH
SUHVFULSWLYHPHWKRG 6%&6%&DQG6%&WKDWVSHFLI\
PDWHULDO VWDQGDUGV GHWDLOV RI LQVWDOODWLRQ DQG
 (PHUJHQF\HVFDSHVDQGUHVFXHRSHQLQJV FRQQHFWLRQ MRLQWV SHQHWUDWLRQV DQG FRQWLQXLW\
:KHUHZLQGRZVDUHUHTXLUHGWRSURYLGHHPHUJHQF\ RI DQ\ HOHPHQW FRPSRQHQW RU V\VWHP LQ WKH
HVFDSHDQGUHVFXHRSHQLQJVLQ*URXS5DQG5 EXLOGLQJ 7KLV GHVFULSWLRQ ZKLFK LV QRW
RFFXSDQFLHVDQGRQHDQGWZRIDPLO\GZHOOLQJVDQG SUHVHQWHGLQWKHIRUPRIDGHILQLWLRQLVVREURDG
WRZQKRXVHV UHJXODWHG E\ WKH 6%&  WKDWWKHUHDUHQXPHURXVVHFWLRQVLQWKH6DXGL
UHSODFHPHQW ZLQGRZV VKDOO EH H[HPSW IURP WKH %XLOGLQJ &RGHV WKDW DUH FRQVLGHUHG WR EH
UHTXLUHPHQWVRI6HFWLRQVDQG UHODWHGWRPDWHULDOVDQGPHWKRGV2QHZD\RI
GHDOLQJZLWKWKLVVHFWLRQPLJKWKDYHEHHQWROLVW
RI 6%&DQG6HFWLRQV5DQG5
HYHU\ VHFWLRQ LQ HYHU\ 6DXGL %XLOGLQJ &RGHV
RI6%&DFFRUGLQJO\SURYLGHGWKHUHSODFHPHQW WKDWGHDOVZLWKPDWHULDOVDQGPHWKRGV$VWKLV
ZLQGRZLVWKHPDQXIDFWXUHU¶VODUJHVWVWDQGDUGVL]H ZRXOG KDYH EHHQ D ORQJ OLVW RI VHFWLRQV WKH
ZLQGRZ WKDW ZLOO ILW ZLWKLQ WKH H[LVWLQJ IUDPH RU FRPPLWWHH DQG WKH PHPEHUVKLS FKRVH WR
H[LVWLQJURXJK RSHQLQJ 7KH UHSODFHPHQWZLQGRZ DGGUHVVWKLVLVVXHLQJHQHUDOWHUPVUDWKHUWKDQ
VKDOOEHSHUPLWWHGWREHRIWKHVDPHRSHUDWLQJVW\OH OLVWLQJ VXFK VHFWLRQV IURP WKH 6DXGL %XLOGLQJ
DVWKHH[LVWLQJZLQGRZRUDVW\OHWKDWSURYLGHVIRU &RGHV H[FHSW IRU WKH PDWHULDOV DQG PHWKRGV
DQHTXDORUJUHDWHUZLQGRZRSHQLQJDUHDWKDQWKH VHFWLRQV RI WKH 6DXGL )XHO *DV &RGH 6%&
H[LVWLQJZLQGRZ:LQGRZRSHQLQJFRQWUROGHYLFHV  WKDW KDYH EHHQ VSHFLILFDOO\ OLVWHG LQ
FRPSO\LQJZLWK$670) VKDOOEHSHUPLWWHG 6HFWLRQRIWKHFRGH
™ $OOQHZZRUNLQ/HYHODOWHUDWLRQVPXVWFRPSO\
IRUXVHRQZLQGRZVUHTXLUHGWRSURYLGHHPHUJHQF\
ZLWKWKHPDWHULDOVDQGPHWKRGVUHTXLUHPHQWVRI
HVFDSHDQGUHVFXHRSHQLQJV WKH 6DXGL %XLOGLQJ &RGHV )RU H[DPSOH WKH
™ 7KLV VHFWLRQ IRFXVHV RQ KRZ WR DGGUHVV WKH VKHHWURFNIURPRQHVLGHRIDQH[LVWLQJFRUULGRU
UHSODFHPHQW RI ZLQGRZV LQWHQGHG WR EH LV WR EH UHPRYHG DQG UHSODFHG ZLWK QHZ
HPHUJHQF\HVFDSHDQGUHVFXHRSHQLQJV0RUH VKHHWURFN DQG ILQLVK SDQHOLQJ 5HJDUGOHVV RI
VSHFLILFDOO\*URXSV5DQG5DQGRQHDQG KRZ WKH H[LVWLQJ VKHHWURFN ZDV DWWDFKHG DQG
WZRIDPLO\ GZHOOLQJV LQ QHZ FRQVWUXFWLRQ ZKDW WKH FKDUDFWHULVWLFV RI WKH ILQLVK PDWHULDO
UHTXLUHFHUWDLQZLQGRZVWREHVSHFLILFDOO\VL]HG ZHUH WKH QHZ VKHHWURFN PXVW FRPSO\ ZLWK
IRU HVFDSH DQG UHVFXH LQ WKHVH VWUXFWXUHV PDWHULDO UHIHUHQFHG VWDQGDUGV LQ 6%& 
0HHWLQJ WKHVH UHTXLUHPHQWV LQ H[LVWLQJ 6HFWLRQ  DQG LWV LQVWDOODWLRQ PXVW EH LQ
EXLOGLQJV FDQ EH GLIILFXOW 7KLV VHFWLRQ DOORZV DFFRUGDQFH ZLWK 6%&  7DEOH 
H[LVWLQJEXLOGLQJVWRSURYLGHWKHODUJHVWZLQGRZ $FFRUGLQJO\ WKH LQWHULRU ILQLVK SDQHOLQJ XVHG
WKDW FDQ ILW LQWR WKH FXUUHQW RSHQLQJ ZLWKRXW

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

PXVW EH RI D FODVV LQ FRPSOLDQFH ZLWK 6%& DSSURYHGE\WKHEXLOGLQJRIILFLDO,QWKLVFRQWH[W

7DEOH VSULQNOHUV DUH DGGUHVVHG LQ &KDSWHU  DV WKH
LQVWDOODWLRQ RI QHZ V\VWHPV LV FRQVLGHUHG D
6DXGL )XHO *DV &RGH   7KH /HYHODOWHUDWLRQ
IROORZLQJVHFWLRQVRIWKH6%&VKDOOFRQVWLWXWH
WKHIXHOJDVPDWHULDOVDQGPHWKRGVUHTXLUHPHQWVIRU 
/HYHODOWHUDWLRQV 6(&7,210($162)(*5(66
 $OO RI &KDSWHU  RI 6%&  HQWLWOHG  *HQHUDO  $OWHUDWLRQV VKDOO EH GRQH LQ D
³*HQHUDO5HJXODWLRQV´H[FHSW6HFWLRQV PDQQHU WKDW PDLQWDLQV WKH OHYHO RI SURWHFWLRQ
DQG SURYLGHGIRUWKHPHDQVRIHJUHVV
 $OORI&KDSWHURI6%&HQWLWOHG³*DV ™ $Q\ OHYHO RI VDIHW\ WKDW FXUUHQWO\ H[LVWV LQ D
3LSLQJ ,QVWDOODWLRQV´ H[FHSW 6HFWLRQV  EXLOGLQJ¶VPHDQVRIHJUHVVV\VWHPPXVWQRWEH
DQG DGYHUVHO\ DIIHFWHG RU OHVVHQHG DV D UHVXOW RI
  6HFWLRQV  DQG  RI 6%& DQ\ DOWHUDWLRQ 7KLV PHDQV WKDW DQ\ QHZ
 VKDOO DSSO\ ZKHQ WKH ZRUN EHLQJ EXLOGLQJHOHPHQWWKDWLVUHSODFLQJWKHROGRQHRU
SHUIRUPHG LQFUHDVHV WKH ORDG RQ WKH V\VWHP QHZ HOHPHQWV WKDW DUH FRYHULQJ H[LVWLQJ
VXFKWKDWWKHH[LVWLQJSLSHGRHVQRWPHHWWKH HOHPHQWV PXVW EH DW OHDVW DV VDIH DV WKH ROG
VL]H UHTXLUHG E\ FRGH ([LVWLQJ V\VWHPVWKDW RQH
™ &KDSWHU  PXVW EH FKHFNHG IRU WKRVH FDVHV
DUHPRGLILHGVKDOOQRWUHTXLUHUHVL]LQJDVORQJ
ZKHUH WKH EXLOGLQJ HOHPHQWV RU FRPSRQHQWV
DVWKHORDGRQWKHV\VWHPLVQRWLQFUHDVHGDQG EHLQJ LQVWDOOHG DV SDUW RI WKH DOWHUDWLRQ PLJKW
WKHV\VWHPOHQJWKLVQRWLQFUHDVHGHYHQLIWKH QHHGWRFRPSO\ZLWKWKH 6%&RUWKH6%&
DOWHUHGV\VWHPGRHVQRWPHHWFRGHPLQLPXPV  )RU H[DPSOH UHSODFHPHQW LQWHULRU
 $OO RI &KDSWHU  RI 6%&  HQWLWOHG ILQLVKHVDUHQRWDOORZHGWRVLPSO\GXSOLFDWHWKH
³&KLPQH\VDQG9HQWV´ ROG RQH WKH\ PXVW PHHW WKH 6%& 
 $OO RI &KDSWHU  RI 6%&  HQWLWOHG UHTXLUHPHQWVEDVHGRQ6HFWLRQ
³6SHFLILF$SSOLDQFHV´ 
6(&7,21$&&(66,%,/,7<
™ $Q\DOWHUDWLRQ RIIXHOJDV HTXLSPHQWRU SLSLQJ
WKDW IDOOV XQGHU WKH FDWHJRU\ RI /HYHO   *HQHUDO  $ IDFLOLW\ WKDW LV DOWHUHG VKDOO
DOWHUDWLRQVPXVWFRPSO\ZLWKWKHPDWHULDOVDQG FRPSO\ZLWKWKHDSSOLFDEOHSURYLVLRQVLQ6HFWLRQV
PHWKRGV UHTXLUHPHQWV RI WKH 6%&  7KLV WKURXJKDQG&KDSWHURI6%&
VHFWLRQ LGHQWLILHV WKRVH VHFWLRQV RI WKH 6%&  XQOHVV LW LV WHFKQLFDOO\ LQIHDVLEOH :KHUH
 WKDW DUH FRQVLGHUHG WR EH UHODWHG WR
FRPSOLDQFH ZLWK WKLV VHFWLRQ LV WHFKQLFDOO\
PDWHULDOV DQG PHWKRGV 7KHVH ZLWK WKH
H[FHSWLRQRIIRXUVSHFLILFVHFWLRQVLQFOXGHDOORI LQIHDVLEOHWKHDOWHUDWLRQVKDOOSURYLGHDFFHVVWRWKH
&KDSWHUVDQGRIWKH6%& PD[LPXPH[WHQWWKDWLVWHFKQLFDOO\IHDVLEOH
$ facility WKDW LV FRQVWUXFWHG RU DOWHUHG WR EH
6(&7,21),5(3527(&7,21 DFFHVVLEOH VKDOO EH PDLQWDLQHG DFFHVVLEOH GXULQJ
 *HQHUDO  $OWHUDWLRQV VKDOO EH GRQH LQ D RFFXSDQF\
PDQQHU WKDW PDLQWDLQVWKH OHYHO RI ILUH SURWHFWLRQ ([FHSWLRQV
SURYLGHG
 7KHDOWHUHGHOHPHQWRUVSDFHLVQRWUHTXLUHGWR
™ $Q\OHYHORIILUHSURWHFWLRQWKDWFXUUHQWO\H[LVWV EHRQDQDFFHVVLEOHURXWHXQOHVVUHTXLUHGE\
LQDEXLOGLQJPXVWQRWEHDGYHUVHO\DIIHFWHGRU 6HFWLRQ
OHVVHQHG DV D UHVXOW RI DQ\ DOWHUDWLRQ )RU
 $FFHVVLEOH PHDQV RI HJUHVV UHTXLUHG E\
H[DPSOH UHPRYLQJ DQG UHSODFLQJ WKH H[LVWLQJ
FHLOLQJ DQG UHDUUDQJLQJ VRPH ILUH VSULQNOHU
&KDSWHURI6%&DUHQRWUHTXLUHGWREH
KHDGVVKRXOGXOWLPDWHO\SURYLGHWKHVDPHOHYHO SURYLGHGLQH[LVWLQJIDFLOLWLHV
RI VSULQNOHU FRYHUDJH DQG SURWHFWLRQ WKDW  7\SH%GZHOOLQJRUVOHHSLQJXQLWVUHTXLUHGE\
H[LVWHG SULRU WR WKH DOWHUDWLRQV EHLQJ 6HFWLRQRI6%&DUHQRWUHTXLUHGWR
XQGHUWDNHQ 6HFWLRQ  KRZHYHU DOORZV D EH SURYLGHG LQ H[LVWLQJIDFLOLWLHVXQGHUJRLQJ
UHGXFWLRQLQVDIHW\DQGVDQLWDWLRQLILWFRPSOLHV OHVVWKDQD/HYHODOWHUDWLRQ
ZLWK WKH 6%&  6HFWLRQ  DOORZV D  7KHDOWHUDWLRQWR7\SH$LQGLYLGXDOO\RZQHG
UHGXFWLRQLQILUHUHVLVWDQFHUDWLQJVLQDEXLOGLQJ GZHOOLQJXQLWVZLWKLQD*URXS5RFFXSDQF\
ZKHUH DQ DXWRPDWLF VSULQNOHU V\VWHP LV VKDOOPHHWWKHSURYLVLRQVIRU7\SH%GZHOOLQJ
LQVWDOOHG7KLVLVEDVHGRQDQDQDO\VLVDQGWKH
XQLWV
GRFXPHQWDWLRQ WKDW PXVW EH UHYLHZHG DQG

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

™ 7KHSXUSRVHRI6HFWLRQLVWRHVWDEOLVKWKH VSHFLI\IRULQVWDQFHWKDWWKHGRRUGLVFXVVHGLQ
PLQLPXPFULWHULDIRUDFFHVVLELOLW\ZKHQGHDOLQJ WKH HDUOLHU H[DPSOH EH UHPRYHG DQG UHSODFHG
ZLWK H[LVWLQJ EXLOGLQJV DQG IDFLOLWLHV WKDW DUH EHFDXVH LW GRHV QRW KDYH DGHTXDWH ZLGWK RU
EHLQJ UHQRYDWHG RU DOWHUHG 7KH KLVWRU\ DQG PDQHXYHULQJFOHDUDQFHV
HIIRUWVLQYROYHGDUHVLPLODUWRWKDWGLVFXVVHGLQ ™ ([FHSWLRQLQGLFDWHVWKDWDFFHVVLEOHPHDQVRI
WKHFRPPHQWDU\WR&KDSWHURIWKH6%& HJUHVV DUH QRW UHTXLUHG DV D UHVXOW RI
$FFHVV WR EXLOGLQJV DQG VWUXFWXUHV IRU SHRSOH XQGHUWDNLQJ DOWHUDWLRQV WR H[LVWLQJ EXLOGLQJV
ZLWK SK\VLFDO GLVDELOLWLHV KDV EHHQ D VXEMHFW 6WULFWFRPSOLDQFHZLWK6%&6HFWLRQLV
UHJXODWHGE\WKHEXLOGLQJFRGHV RIWHQWHFKQLFDOO\LQIHDVLEOH
™ $SSHQGL[ % LQFOXGHV LQIRUPDWLRQ IRXQG LQ WKH ™ 7KH UHTXLUHPHQW IRU D PP FOHDU ZLGWK
$PHULFDQV ZLWK 'LVDELOLWLHV $FW $FFHVVLELOLW\ EHWZHHQ KDQGUDLOV ZRXOG UHTXLUH PDQ\
*XLGHOLQHV $'$$* WKDW FDQQRW EH HQIRUFHG VWDLUZD\VWREHZLGHQHG7KLVRIWHQZRXOGHQWDLO
WKURXJKWKHW\SLFDOFRGHHQIRUFHPHQWSURFHVV WKH PRYHPHQW RI PDMRU VWUXFWXUDO HOHPHQWV LQ
EXWZRXOGSURYLGHEHQHILFLDOLQIRUPDWLRQIRUWKH RUGHU WR DFFRPSOLVK WKLV DOWHUDWLRQ 1RWH WKDW
GHVLJQHURZQHUIRUIXOOFRPSOLDQFHSXUSRVHV WKLV LV QRW DQ H[FHSWLRQ IRU WKH DFFHVVLEOH
™ 7KH FRGH DSSURDFKHV WKH DSSOLFDWLRQ RI HQWUDQFHUHTXLUHPHQWV
DFFHVVLELOLW\ SURYLVLRQV WR D IDFLOLW\ WKDW LV ™ ([FHSWLRQ  H[HPSWV H[LVWLQJ EXLOGLQJV ZLWK D
DOWHUHGE\EURDGO\UHTXLULQJIXOOFRQIRUPDQFHWR /HYHO  RU  DOWHUDWLRQ IURP KDYLQJ WR SURYLGH
QHZ FRQVWUXFWLRQ PHDQLQJ IXOO DFFHVVLELOLW\ LV 7\SH%GZHOOLQJDQGVOHHSLQJXQLWV6LQFHWKLV
H[SHFWHG VHH 6HFWLRQ  ([FHSWLRQV VHFWLRQ LV UHIHUHQFHG IURP &KDSWHU  WKLV
DUH WKHQ SURYLGHG WR LQGLFDWH WKH FRQGLWLRQV ZRXOG LQFOXGH H[LVWLQJ EXLOGLQJV XQGHUJRLQJ D
XQGHU ZKLFK OHVV WKDQ IXOO DFFHVVLELOLW\ LV FKDQJHRIRFFXSDQF\1RWHWKDW&KDSWHUKDV
SHUPLWWHG)RUH[DPSOHLIDGRRUDQGIUDPHDUH VSHFLILFUHTXLUHPHQWVIRU7\SH%GZHOOLQJDQG
UHPRYHGDQGUHSODFHGWKHGRRUPXVWPHHWWKH VOHHSLQJ XQLWV WKDW DUH ERWK XQGHUJRLQJ D
UHTXLUHPHQWV IRU ZLGWK KHLJKW PDQHXYHULQJ FKDQJHRIRFFXSDQF\FODVVLILFDWLRQDQGKDYHD
FOHDUDQFHVDQGKDUGZDUH,IMXVWWKHGRRUNQRE /HYHODOWHUDWLRQDVVRFLDWHGZLWKWKHFKDQJHRI
LVEHLQJUHPRYHGLWPXVWEHUHSODFHGZLWKOHYHU RFFXSDQF\
KDUGZDUH ™ $GGLWLRQVWKDWFRQWDLQIRXURUPRUHGZHOOLQJDQG
™ 7KHFLUFXPVWDQFHXQGHUZKLFKIXOOFRPSOLDQFH VOHHSLQJ XQLWV ZRXOG EH UHTXLUHG WR SURYLGH
ZLWK DFFHVVLELOLW\ SURYLVLRQV LV QRW UHTXLUHG LV 7\SH % XQLWV LQ DFFRUGDQFH ZLWK 6%& 
ZKHQ LW LV GHHPHG WR EH WHFKQLFDOO\ LQIHDVLEOH 6HFWLRQ  ,W VKRXOG EH QRWHG WKDW
VHH WKH FRPPHQWDU\ WR WKH GHILQLWLRQ RI $FFHVVLEOH DQG 7\SH $ GZHOOLQJ DQG VOHHSLQJ
³7HFKQLFDOO\LQIHDVLEOH´LQ6HFWLRQ7KLVLV XQLWV DUH UHTXLUHG LQ H[LVWLQJ UHVLGHQWLDO DQG
FRQVLGHUHG UHDVRQDEOH VLQFH LI QRW SURYLGHG LQVWLWXWLRQDO EXLOGLQJV XQGHUJRLQJ /HYHO  RU
IRU SODQV IRU DOWHUDWLRQV PD\ EH RWKHUZLVH JUHDWHUDOWHUDWLRQVVHH6HFWLRQDQGWKH
DEDQGRQHG E\ WKH EXLOGLQJ RZQHU 7KH GHILQLWLRQV LQ 6%&  6HFWLRQ  IRU
RSSRUWXQLW\WRXSJUDGHDQGLQFUHDVHWKHFXUUHQW ³$FFHVVLEOHXQLW´DQG³'ZHOOLQJRUVOHHSLQJXQLW
OHYHO RI DFFHVVLELOLW\ LQ DQ H[LVWLQJ EXLOGLQJ 7\SH $´ 7KH 7\SH % GZHOOLQJ XQLWV PXVW EH
ZRXOG WKHQ EH ORVW 7KLV FRQFHUQ LV DOVR SURYLGHGLQ/HYHODOWHUDWLRQV:KHUH/HYHO
HPERGLHG LQ WKH UHTXLUHPHQW WKDW DQ DOWHUHG DOWHUDWLRQV DUH EHLQJ SHUIRUPHG WKHUH LV D
HOHPHQW RU VSDFH LV H[SHFWHG WR EH PDGH SULPHRSSRUWXQLW\WRKDYHWKRVHEXLOGLQJVPRYH
DFFHVVLEOHWRWKHH[WHQWWRZKLFKLWLVWHFKQLFDOO\ WRZDUGEHLQJDEOHWRVHUYHDZLGHUUDQJHRIWKH
IHDVLEOH WR GR VR ,Q WKLV PDQQHU WKH FRGH SRSXODWLRQ:KHQDPDMRUDOWHUDWLRQUHQRYDWLRQ
DFFRPSOLVKHV WKH JUHDWHVW GHJUHH RI RFFXUV WKHUH LV DQ RSSRUWXQLW\ WR EULQJ WKRVH
DFFHVVLELOLW\ZKLOHDWWKHVDPHWLPHUHFRJQL]LQJ EXLOGLQJVLQWRFRPSOLDQFH6HHWKHFRPPHQWDU\
WKHMXVWLILDEOHGLIILFXOWLHVWKDWPD\EHLQYROYHGLQ WR 6HFWLRQV    
SURYLGLQJIXOODFFHVVLELOLW\LQH[LVWLQJEXLOGLQJV DQG  DQG WKH H[FHSWLRQV WR 6HFWLRQV
™ ,Q DFFRUGDQFH ZLWK ([FHSWLRQ  LI WKH DUHD DQGIRUDGGLWLRQDOLQIRUPDWLRQ
XQGHUJRLQJ DOWHUDWLRQ GRHV QRW FRQWDLQ D ™ ([FHSWLRQ  DGGUHVVHV WKH VSHFLILF
SULPDU\IXQFWLRQVHH6HFWLRQWKHUHDUH FLUFXPVWDQFHV ZKHQ DQ H[LVWLQJ 7\SH $
QR DGGLWLRQDO UHTXLUHPHQWV SDVW WKH RULJLQDO GZHOOLQJ XQLW LV EHLQJ DOWHUHG :KLOH 6HFWLRQ
VFRSH RI WKH SURMHFW +RZHYHU LI WKH DUHD VD\VWKDWDOHYHORIDFFHVVLELOLW\PXVWEH
FRQWDLQVDSULPDU\IXQFWLRQWKHUHDUHDGGLWLRQDO PDLQWDLQHG LQ WKH VLWXDWLRQV ZKHUH D 7\SH $
FULWHULDWRDFKLHYHDFFHVVLELOLW\WKDWPD\UHTXLUH GZHOOLQJXQLWLV³LQGLYLGXDOO\RZQHG´VXFKDVD
ZRUNQRWLQWKHRULJLQDOVFRSHRIWKHSURMHFW FRQGRPLQLXP WKHQ LW RQO\ QHHGV WR PHHW WKH
™ 7KHVH DGGLWLRQDO FULWHULD DUH WR SURYLGH DQ WHFKQLFDO UHTXLUHPHQWV IRU D 7\SH % GZHOOLQJ
DFFHVVLEOHURXWHWRWKHDOWHUHGDUHDDVZHOODV XQLWVHH,&&$6HFWLRQZKHQLWLV
LPSURYHPHQWV WR DQ\ WRLOHWV DQG GULQNLQJ DOWHUHG RU UHPRGHOHG E\ WKH RZQHU 7\SH %
IRXQWDLQV WKDW VHUYH WKH DOWHUHG DUHD XQLWVUHTXLUHDOHVVHUOHYHORIDFFHVVLELOLW\WKDQ
5HTXLUHPHQWV IRU DQ DFFHVVLEOH URXWH PLJKW 7\SH$XQLWV)RUH[DPSOHLIDQRZQHUZDQWHG

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

WRDOWHUWKHEDWKURRPLQKLVRUKHUXQLWKHRUVKH ™ 5HTXLUHPHQWVIRUQHZFRQVWUXFWLRQVWDWHWKDWDOO
ZRXOG RQO\ EH UHTXLUHG WR PHHW WKH OHVVHU HOHYDWRUVRQDQDFFHVVLEOHURXWHPXVWEHIXOO\
DFFHVVLELOLW\UHTXLUHPHQWVRID7\SH%XQLWZLWK DFFHVVLEOHLQDFFRUGDQFHZLWK,&&$,ID
WKHQHZFRQVWUXFWLRQ7KLVH[FHSWLRQZRXOGQRW SDVVHQJHU HOHYDWRU LV DOWHUHG WKH DOWHUHG
EHDSSOLFDEOHWRXQLWVWKDWDUHIRUUHQW HOHPHQWPXVWEHDFFHVVLEOHLQDFFRUGDQFHZLWK
™ 7KH VSHFLILF SURYLVLRQV RI WKH IROORZLQJ WKH UHTXLUHPHQWV IRU H[LVWLQJ HOHYDWRUV LQ
VXEVHFWLRQV DUH LQWHQGHG WR UHIOHFW FRQGLWLRQV 6HFWLRQ  RI ,&& $ ,I WKH DOWHUHG
XQGHU ZKLFK OHVV WKDQ IXOO DFFHVVLELOLW\ DV HOHYDWRULVSDUWRIDEDQNRIHOHYDWRUVWKHVDPH
ZRXOG EH UHTXLUHG LQ QHZ FRQVWUXFWLRQ LV HOHPHQW PXVW EH PDGH DFFHVVLEOH LQ HYHU\
SHUPLWWHG LQ DOWHUHG DUHDV $V SUHYLRXVO\ HOHYDWRUWKDWLVSDUWRIWKDWEDQN7KHSXUSRVH
GLVFXVVHG6HFWLRQUHTXLUHVDOWHUDWLRQVWR RI WKLV UHTXLUHPHQW LV WR KDYH FRQVLVWHQF\
FRPSO\ ZLWK WKH IXOO UDQJH RI DFFHVVLELOLW\ DPRQJ HOHYDWRUV LQ D EDQN VR WKDW GLVDEOHG
UHODWHG SURYLVLRQV RI WKH FRGH IRU QHZ SHRSOH DUH QRW UHTXLUHG WR ZDLW IRU D VSHFLILF
FRQVWUXFWLRQ 7KH H[FHSWLRQV DQG VXEVHFWLRQV HOHYDWRU ZKHUHDV WKH JHQHUDO SRSXODWLRQ FDQ
UHIOHFW D UHDVRQDEOH VHW RI FRQGLWLRQV XQGHU WDNH WKH ILUVW DYDLODEOH HOHYDWRU 7KH ,&& $
ZKLFK D GLIIHUHQW OHYHO RI DFFHVVLELOLW\ FDQ EH DOVRSURYLGHVDFFHVVLELOLW\UHTXLUHPHQWV
SURYLGHG IRUOLPLWHGXVHOLPLWHGDFFHVV/8/$HOHYDWRUV
,&& $  6HFWLRQ  DQG SULYDWH
(QWUDQFHV  :KHUH DQ DOWHUDWLRQ LQFOXGHV UHVLGHQFHHOHYDWRUV,&&$6HFWLRQ
DOWHUDWLRQV WR DQ HQWUDQFH DQG WKH IDFLOLW\ KDV DQ :KLOHWKHVHW\SHVRIHOHYDWRUVFDQVHUYHDVSDUW
DFFHVVLEOH HQWUDQFH RQ DQ DFFHVVLEOH URXWH WKH RI DQ DFFHVVLEOH URXWH WKHLU XVH LV OLPLWHG E\
DOWHUHG HQWUDQFH LV QRW UHTXLUHG WR EH DFFHVVLEOH $60($
XQOHVVUHTXLUHGE\6HFWLRQ6LJQVFRPSO\LQJ
3ODWIRUPOLIWV3ODWIRUPZKHHOFKDLUOLIWV
ZLWK6HFWLRQRI6%&VKDOOEHSURYLGHG
FRPSO\LQJZLWK&KDSWHURI6%&DQGLQVWDOOHG
™ 7KLVSURYLVLRQLVFRQWDLQHGKHUHWRSRLQWWRWKH LQDFFRUGDQFHZLWK$60($VKDOOEHSHUPLWWHG
DFFHVVLELOLW\SURYLVLRQVRI6%&&KDSWHU DVDFRPSRQHQWRIDQDFFHVVLEOHURXWH
IRUHQWUDQFHV$IDFLOLW\LVQRWDFFHVVLEOHLIWKH
HQWUDQFHV LQWR LW DUH LQDFFHVVLEOH 6%&  ™ 7KLV VHFWLRQ SURYLGHV IRU WKH XVH RI SODWIRUP
6HFWLRQHVWDEOLVKHVUHDVRQDEOHFULWHULDIRU ZKHHOFKDLU OLIWVLQH[LVWLQJEXLOGLQJV,QRUGHU
SURYLGLQJDFFHVVLEOHHQWUDQFHV$IDFLOLW\LVQRW WRFUHDWHDQ DFFHVVLEOHURXWH ZKHUHWKHUH DUH
UHTXLUHGWRKDYHDOORILWVHQWUDQFHVDFFHVVLEOH FKDQJHVLQIORRUOHYHOVWKHSURYLVLRQVIRUQHZ
LQRUGHUWRSURYLGHUHDVRQDEOHDFFRPPRGDWLRQ FRQVWUXFWLRQ ZRXOG PRVW RIWHQ UHTXLUH WKH
WR GLVDEOHG SHUVRQV ,I D IDFLOLW\ KDV PXOWLSOH LQVWDOODWLRQRIDQHOHYDWRURUUDPS
SXEOLF HQWUDQFHV DV D PLQLPXP LW LV QRW ™ 3ODWIRUPOLIWVDUHDOORZHGLQQHZFRQVWUXFWLRQIRU
FRQVLGHUHGXQUHDVRQDEOHWRUHTXLUHDWOHDVW OLPLWHG FRQGLWLRQV VHH 6%&  6HFWLRQ
SHUFHQW RI WKH HQWUDQFHV WR EH DFFHVVLEOH ,Q  ,I WKH VSDFH LQ DQ H[LVWLQJ EXLOGLQJ
DGGLWLRQ WR WKH SHUFHQW DFFHVVLEOH SXEOLF SUHFOXGHV WKH LQVWDOODWLRQ RI DQ HOHYDWRU RU
HQWUDQFHV HQWUDQFHV WKDW KDYH D VSHFLILF UDPS D SODWIRUP OLIW PD\ EH WKH RQO\ SUDFWLFDO
IXQFWLRQ RU SURYLGH DFFHVV WR RQO\ FHUWDLQ VROXWLRQ *LYHQ WKH FKRLFH EHWZHHQ QR
SRUWLRQVRIWKHIDFLOLW\PXVWEHDGGUHVVHG,IWKH DFFHVVLELOLW\ RU DFFHVVLELOLW\ E\ D SODWIRUP OLIW
EXLOGLQJ DOUHDG\ KDV WKH DFFHVVLEOH HQWUDQFHV DFFHVVLELOLW\ LV SUHIHUUHG 3UHYLRXVO\ SODWIRUP
UHTXLUHGE\6%&6HFWLRQDQHQWUDQFH OLIWUHTXLUHPHQWVZHUHDGGUHVVHGLQWKHHOHYDWRU
WKDWLVEHLQJDOWHUHGLVQRWUHTXLUHGWREHPDGH VWDQGDUG $60( $ EXW WKH\ DUH QRZ
DFFHVVLEOH DGGUHVVHGLQWKHLURZQVWDQGDUG$60($
™ $Q H[FHSWLRQ WR WKLV ZRXOG EH LI WKH HQWUDQFH 2QHRIWKHPDQ\FKDQJHVZDVWKHUHPRYDO RI
ZDVUHTXLUHGWREHPDGHDFFHVVLEOHDVSDUWRI WKH UHTXLUHPHQW IRU NH\ RSHUDWLRQ ZKLFK
WKHURXWHWRWKHDOWHUHGSULPDU\IXQFWLRQDUHD,I SUHYLRXVO\ GLVFRXUDJHG LQGHSHQGHQW XWLOL]DWLRQ
QRW DOO HQWUDQFHV DUH DFFHVVLEOH SURYLGH RISODWIRUPOLIWV
DSSURSULDWH VLJQDJH WR QRWLI\ SHUVRQV ZLWK ™ 1RWHWKDWLQDFFRUGDQFHZLWK6%&6HFWLRQ
GLVDELOLWLHV ZKHQ DQ HQWUDQFH LV RU LV QRW SODWIRUPOLIWVDUHDOVRSHUPLWWHGIRUDQ
DFFHVVLEOHDQGLIQRWDFFHVVLEOHGLUHFWWKHPWR DFFHVVLEOHPHDQVRIHJUHVVLQVRPHORFDWLRQV
WKHQHDUHVWDFFHVVLEOHHQWUDQFH +RZHYHUDFFHVVLEOHPHDQVRIHJUHVVDUHQRW
UHTXLUHGLQH[LVWLQJEXLOGLQJVLQDFFRUGDQFHZLWK
(OHYDWRUV  $OWHUHG HOHPHQWV RI H[LVWLQJ 6HFWLRQ([FHSWLRQ
HOHYDWRUVVKDOOFRPSO\ZLWK$60($&6$% ™ $ FKDLU OLIW LV QRW DFFHSWDEOH DV SDUW RI DQ
DQG&KDSWHURI6%&6XFKHOHPHQWVVKDOO DFFHVVLEOH URXWH LQ HLWKHU QHZ RU H[LVWLQJ
DOVREHDOWHUHGLQHOHYDWRUVSURJUDPPHGWRUHVSRQG FRQVWUXFWLRQ )RU H[DPSOHV RI WKH GLIIHUHQFH
WRWKHVDPHKDOOFDOOFRQWURODVWKHDOWHUHGHOHYDWRU EHWZHHQDFKDLUOLIWDQGDSODWIRUPOLIWVHHWKH
FRPPHQWDU\WR6%&6HFWLRQ

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

5DPSV  :KHUH VWHHSHU VORSHV WKDQ $FFHVVLEOH GZHOOLQJ RU VOHHSLQJ XQLWV
DOORZHG E\ 6HFWLRQ  RI 6%&  DUH :KHUH*URXS,,,55RU5GZHOOLQJ
QHFHVVLWDWHGE\VSDFHOLPLWDWLRQVWKHVORSHRIUDPSV RUVOHHSLQJXQLWVDUHEHLQJDOWHUHGWKHUHTXLUHPHQWV
LQ RU SURYLGLQJ DFFHVV WR H[LVWLQJ IDFLOLWLHV VKDOO RI 6HFWLRQ  RI 6%&  IRU DFFHVVLEOH XQLWV
FRPSO\ZLWK7DEOH DSSO\ RQO\ WR WKH TXDQWLW\ RI WKH VSDFHV EHLQJ
™ ,QH[LVWLQJEXLOGLQJVUDPSVWKDWULVHPPRU
DOWHUHG
OHVV PD\ KDYH D VORSH DV VWHHS DV RQH XQLW ™ 7KLV VHFWLRQ VHWV IRUWK WKH UDWH IRU SURYLGLQJ
YHUWLFDOLQHLJKWXQLWVKRUL]RQWDO,QH[LVWLQJ $FFHVVLEOHGZHOOLQJRUVOHHSLQJXQLWVLQ*URXSV
EXLOGLQJVUDPSVWKDWULVHPPRUOHVVPD\ , , , 5 5 DQG 5 ZKHQ VXFK
KDYHDVORSHDVVWHHSDVRQHXQLWYHUWLFDOLQ IDFLOLWLHVDUH DOWHUHGDOVRVHH 6HFWLRQ 
XQLWVKRUL]RQWDO,ILWLVSRVVLEOHWRSURYLGH DQGWKHGHILQLWLRQVRI³'ZHOOLQJXQLW´³6OHHSLQJ
D OHVVHU VORSH LW LV GHVLUDEOH WR GR VR 7KHVH XQLW´DQG³$FFHVVLEOHXQLW´LQ6%&&KDSWHU
VWHHSHUVORSHVVKRXOGRQO\EHXWLOL]HGZKHQWKH  $VVXPLQJ WKDW WKH UHTXLUHG QXPEHU RI
RQH XQLW YHUWLFDO LQ  XQLWV KRUL]RQWDO  $FFHVVLEOH XQLWV LV QRW DOUHDG\ SURYLGHG WKH
SHUFHQWVORSHLVQRWSRVVLEOH QXPEHURI$FFHVVLEOHXQLWVWREHLQFRUSRUDWHG
LQWR HDFK DOWHUDWLRQ LV EDVHG RQ WKH QXPEHU
EHLQJDOWHUHG)RUH[DPSOHLIDQXUVLQJKRPH
'LQLQJDUHDV$QDFFHVVLEOHURXWHWRUDLVHG ZDV EHLQJ DOWHUHG D SRUWLRQ DW D WLPH 
RUVXQNHQGLQLQJDUHDVRUWRRXWGRRUVHDWLQJDUHDVLV SHUFHQW RI WKH XQLWV EHLQJ DOWHUHG HDFK WLPH
QRW UHTXLUHG SURYLGHG WKDW WKH VDPH VHUYLFHV DQG ZRXOGEHUHTXLUHGWREHZKHHOFKDLUDFFHVVLEOH
GHFRUDUHSURYLGHGLQDQDFFHVVLEOHVSDFHXVDEOHE\ ,WLVQRWWKHLQWHQWWKDWDOOXQLWVEHLQJDOWHUHGDUH
UHTXLUHGWREH$FFHVVLEOHXQLWVXQWLOSHUFHQW
DQ\ RFFXSDQW DQG QRW UHVWULFWHG WR XVH E\ SHRSOH
RIWKHXQLWVLQWKHHQWLUHIDFLOLW\DUH$FFHVVLEOH
ZLWKDGLVDELOLW\ XQLWV 7KH WRWDO QXPEHU RI $FFHVVLEOH XQLWV LQ
™ 7KLVVHFWLRQLVLQWHQGHGWRSURYLGHHTXDODFFHVV WKH IDFLOLW\ LV QRW UHTXLUHG WR H[FHHG WKDW
WR GLQLQJ VHUYLFHV IRU D GLVDEOHG LQGLYLGXDO UHTXLUHG IRU QHZ FRQVWUXFWLRQ DV LQGLFDWHG LQ
ZLWKRXW VHJUHJDWLRQ LQ H[LVWLQJ EXLOGLQJV 6HFWLRQ,WLVXQUHDVRQDEOHWRUHTXLUHD
XQGHUJRLQJ DOWHUDWLRQV ,I HTXLYDOHQW GLQLQJ JUHDWHU OHYHO RI DFFHVVLELOLW\ LQ DQ H[LVWLQJ
VHUYLFHV DUH DYDLODEOH RQ DQ DFFHVVLEOH OHYHO EXLOGLQJ WKDQ LV UHTXLUHG LQ QHZ FRQVWUXFWLRQ
DQDFFHVVLEOHURXWHWRRWKHUOHYHOVRUWRRXWVLGH 7KH WHFKQLFDO FULWHULD IRU DFFHVVLEOH XQLWV DUH
GLQLQJLVQRWUHTXLUHGDVSDUWRIWKHDOWHUDWLRQ IRXQGLQ,&&$6HFWLRQ
WRDQH[LVWLQJGLQLQJDUHD)RUH[DPSOHZKHUH 7\SH$GZHOOLQJRUVOHHSLQJXQLWV:KHUH
D VQDFN EDU LV ORFDWHG RQ RQH OHYHO ZKLOH IXOO
GLQLQJ LV SURYLGHG RQ WZR RWKHU OHYHOV DQ
PRUHWKDQ*URXS5GZHOOLQJRUVOHHSLQJXQLWV
DFFHVVLEOHURXWHZRXOGEHUHTXLUHGWRWKHVQDFN DUHEHLQJDOWHUHGWKHUHTXLUHPHQWVRI6HFWLRQ
EDUOHYHODQGRQHRIWKHIXOOGLQLQJOHYHOV RI6%&IRU7\SH$XQLWVDQG&KDSWHURI6%&
IRUYLVLEOHDODUPVDSSO\RQO\WRWKHTXDQWLW\RI
5DLVHG IORRUV LQ FRXUW URRPV  ,Q WKHVSDFHVEHLQJDOWHUHG
DOWHUDWLRQ DFFHVVLEOH ZKHHOFKDLU VSDFHV DUH QRW
UHTXLUHGWREHORFDWHGZLWKLQGHILQHGDUHDRIUDLVHG ™ 7\SH$XQLWV DUHUHTXLUHGLQQHZFRQVWUXFWLRQ
IORRUVDQGVKDOOEHSHUPLWWHGWREHORFDWHGRXWVLGH ZKHQ  RU PRUH DSDUWPHQWV LQFOXGLQJ
FRQGRPLQLXP VW\OH DUH FRQVWUXFWHG RQ D VLWH
WKHVH VSDFHV ZKHUH UDPS RU OLIW DFFHVV SRVHV D
*URXS5UHTXLUHPHQWVIRU7\SH$XQLWVFRXOG
KD]DUG E\ UHVWULFWLQJ RU SURMHFWLQJ LQWR D UHTXLUHG LQFOXGH VRPH WRZQKRXVHVW\OH XQLWV VHH WKH
PHDQVRIHJUHVV FRPPHQWDU\WR6%&6HFWLRQ
™ 7KLVH[FHSWLRQIRUUDLVHGIORRUVLQFRXUWURRPV IRUDGGLWLRQDOLQIRUPDWLRQ
LVFRQVLVWHQWZLWK6HFWLRQVDQGRIWKH ™ 1RWH WKDW WKLV UHTXLUHPHQW LV DSSOLFDEOH ZKHQ
$'$ 6WDQGDUGV IRU $FFHVVLEOH 'HVLJQ 7KH  RU PRUH XQLWV DUH LQFOXGHG LQ WKH
LQWHQW LV WKDW LI UDPS DFFHVV WR D UDLVHG IORRU FRQVWUXFWLRQ SURMHFW QRW ZKHQ DQ LQGLYLGXDO
ZRXOG KDYH WKH UDPS OLPLWLQJ RU EORFNLQJ WKH RZQHUSHUIRUPVDOWHUDWLRQVWRKLVRUKHUFRQGR
PHDQVRIHJUHVVIRUWKHJHQHUDOSRSXODWLRQ LQ ZKHQWKHUHDUHRUPRUHXQLWVLQWKHEXLOGLQJ
WKH VSDFH DOWHUQDWLYH ORFDWLRQV IRU SRWHQWLDO DOVRVHH6HFWLRQDQGWKHGHILQLWLRQVRI
UDLVHGIORRUVDUHYLDEOH7KHVDPHDOWHUQDWLYHLV ³'ZHOOLQJ XQLW´ ³6OHHSLQJ XQLW´ DQG ³7\SH $
DYDLODEOHLIDSODWIRUPOLIWZRXOGHIIHFWLYHO\EHDQ XQLW´ LQ 6%&  &KDSWHU  $VVXPLQJ WKDW
REVWUXFWLRQ IRU WKH JHQHUDO PHDQV RI HJUHVV 7\SH $ XQLWV DUH QRW DOUHDG\ SURYLGHG WKH
IURPWKHFRXUWURRP QXPEHURI7\SH$XQLWVUHTXLUHGLVEDVHGRQWKH
QXPEHUEHLQJDOWHUHG)RUH[DPSOHLIDVWRU\LQ
DQ DSDUWPHQW EXLOGLQJ ZDV EHLQJ DOWHUHG WKH
QXPEHU RI 7\SH $ XQLWV UHTXLUHG ZRXOG EH

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

EDVHGRQWKHQXPEHURIXQLWVLQWKHDUHDEHLQJ ™ 7KLV VHFWLRQ WDNHV D VLPLODU DSSURDFK IRU

DOWHUHG QRW WKH QXPEHU RI XQLWV LQ WKH HQWLUH GUHVVLQJ URRPV WR WKDW SURYLGHG LQ 6HFWLRQ
EXLOGLQJ,I7\SH$XQLWVDUHSURYLGHGWKHWRWDO  IRU WRLOHW DQG EDWKLQJ IDFLOLWLHV ,I LW LV
QXPEHU RI 7\SH $ XQLWV LQ WKH IDFLOLW\ LV QRW WHFKQLFDOO\ LQIHDVLEOH WR DOWHU H[LVWLQJ GUHVVLQJ
UHTXLUHG WR H[FHHG WKDW UHTXLUHG IRU QHZ URRPVWREHDFFHVVLEOHWKHQVSDFHHOVHZKHUH
FRQVWUXFWLRQDVLQGLFDWHGLQ6HFWLRQ RQWKHOHYHOPXVWEHFRPPLWWHGWRSURYLGLQJQRW
,WLVXQUHDVRQDEOHWRUHTXLUHDJUHDWHUOHYHORI OHVVWKDQRQHDFFHVVLEOHGUHVVLQJURRP,QWKLV
DFFHVVLELOLW\ LQ DQ H[LVWLQJ EXLOGLQJ WKDQ LV FDVH LI WKH H[LVWLQJ GUHVVLQJ URRPV SURYLGH
UHTXLUHGLQQHZFRQVWUXFWLRQ VHSDUDWHURRPVIRUHDFKJHQGHUWKHQQRWOHVV
WKDQ RQH DFFHVVLEOH GUHVVLQJ URRP IRU HDFK
7RLOHW URRPV  :KHUH LW LV WHFKQLFDOO\ JHQGHUPXVWEHSURYLGHG
LQIHDVLEOHWRDOWHUH[LVWLQJWRLOHWDQGEDWKLQJURRPV
WR EH DFFHVVLEOH DQ DFFHVVLEOH IDPLO\ RU DVVLVWHG  )XHOGLVSHQVHUV2SHUDEOHSDUWVRI
XVH WRLOHW RU EDWKLQJ URRP FRQVWUXFWHG LQ UHSODFHPHQWIXHOGLVSHQVHUVVKDOOEHSHUPLWWHGWREH
DFFRUGDQFH ZLWK 6HFWLRQ  RI 6%&  LV PPD[LPXPPHDVXUHGIURPWKHVXUIDFHRIWKH
SHUPLWWHG 7KH IDPLO\ RU DVVLVWHGXVH WRLOHW RU YHKLFXODUZD\ZKHUHIXHOGLVSHQVHUVDUHLQVWDOOHGRQ
EDWKLQJURRPVKDOOEHORFDWHGRQWKHVDPHIORRUDQG H[LVWLQJFXUEV
LQ WKH VDPH DUHD DV WKH H[LVWLQJ WRLOHW RU EDWKLQJ ™ 7KHUHTXLUHPHQWVIRUQHZIXHOGLVSHQVHUVLH
URRPV$WWKHLQDFFHVVLEOHWRLOHWDQGEDWKLQJURRPV JDVSXPSVFDQEHIRXQGLQ6%&6HFWLRQ
GLUHFWLRQDO VLJQV LQGLFDWLQJ WKH ORFDWLRQ RI WKH %DVLFDOO\WKHLGHDLVWKDWWKHFRQWUROV
QHDUHVWIDPLO\RUDVVLVWHGXVHWRLOHWURRPRUEDWKLQJ PXVW EH LQ WKH UHDFK UDQJHV IRU VRPHRQH
URRP VKDOO EH SURYLGHG 7KHVH GLUHFWLRQDO VLJQV VWDQGLQJ RQ WKH SDUNLQJ ORW VXUIDFH +RZHYHU
VKDOO LQFOXGH WKH ,QWHUQDWLRQDO 6\PERO RI PDQ\H[LVWLQJIDFLOLWLHVKDYHJDVSXPSVORFDWHG
$FFHVVLELOLW\ DQG VLJQ FKDUDFWHUV VKDOO PHHW WKH RQUDLVHGLVODQGVDVDIHDWXUHIRUSURWHFWLRQRI
WKHSXPSVIURPDFFLGHQWDOFRQWDFW7KLVVHFWLRQ
YLVXDO FKDUDFWHU UHTXLUHPHQWV LQ DFFRUGDQFH ZLWK
ZRXOGDOORZDQHZJDVSXPSZLWKDUHDFKUDQJH
,&&$ RIPPWRPPWREHORFDWHGRQWRSRI
™ 7KLVVHFWLRQGHDOVZLWKFLUFXPVWDQFHVLQZKLFK D  PP FXUE DQG VWLOO PHHW WKH PD[LPXP
LWLVWHFKQLFDOO\LQIHDVLEOHWRDOWHUH[LVWLQJWRLOHW UHDFKRIPP
IDFLOLWLHV WR EH DFFHVVLEOH :KHUH QHZ
 7KUHVKROGV7KHPD[LPXPKHLJKW
EDWKURRPVDUHFUHDWHG LQ H[LVWLQJEXLOGLQJV RU
H[LVWLQJ EDWKURRPV DUH SDUW RI DQ DOWHUDWLRQ RI WKUHVKROGV DW GRRUZD\V VKDOO EH  PP 6XFK
ERWKWKHPHQ¶VDQGZRPHQ¶VIDFLOLWLHVZRXOGEH WKUHVKROGVVKDOOKDYHEHYHOHGHGJHVRQHDFKVLGH
UHTXLUHG WR EH DFFHVVLEOH $Q DOWHUQDWLYH ™ 7KUHVKROGV DW GRRUZD\V PD\ EH  PP
VROXWLRQZKHQLWLVWHFKQLFDOO\LQIHDVLEOHWRDOWHU PD[LPXP LQ H[LVWLQJ EXLOGLQJV ,Q QHZ
WKHH[LVWLQJWRLOHWURRPVZRXOGEHWKHFUHDWLRQ FRQVWUXFWLRQ D W\SLFDO WKUHVKROG LV  PP
RI D VLQJOH IDPLO\ RU DVVLVWHGXVH WRLOHW RU PD[LPXPLQDFFRUGDQFHZLWK6%&6HFWLRQ
EDWKLQJ URRP FRQWDLQLQJ DFFHVVLEOH IDFLOLWLHV  7KLV VHFWLRQ UHFRJQL]HV WKDW VXFK
7KH UHTXLUHPHQWV IRU IDPLO\ RU DVVLVWHGXVH WKLQJV DV GLIIHUHQFHV LQ IORRU PDWHULDOV PD\
WRLOHW IDFLOLWLHV LQ 6%&  6HFWLRQV  FUHDWH FKDQJHV LQ HOHYDWLRQ JUHDWHU WKDQ WKDW
WKURXJKSURYLGHJXLGDQFHRQZKDWLV DOORZHG LQ QHZ FRQVWUXFWLRQ (GJHV RI
UHTXLUHGLQWKLVWRLOHWURRP,IWKLVDOWHUQDWLYHLV WKUHVKROGV JUHDWHU WKDQ  PP PXVW EH
VHOHFWHG WKH URRP PXVW EH ORFDWHG RQ WKH EHYHOHG WR DOORZ IRU WKH SDVVDJH RI D
VDPHIORRUDQGLQWKHVDPHDUHDDVWKHH[LVWLQJ ZKHHOFKDLU
WRLOHWRUEDWKURRP7KLVLVWKHEHVWDOWHUQDWLYHWR
SURYLGLQJ IXOO\ FRPSO\LQJ VHSDUDWH PHQ¶V DQG  ([WHQW RI DSSOLFDWLRQ  $Q
ZRPHQ¶VIDFLOLWLHV,QDQ\FDVHWKHLQWHQWLVWKDW DOWHUDWLRQRIDQH[LVWLQJHOHPHQWVSDFHRUDUHDRID
VRPH IRUP RI DQ DFFHVVLEOH WRLOHW URRP RU IDFLOLW\VKDOOQRWLPSRVHDUHTXLUHPHQWIRUJUHDWHU
EDWKLQJ IDFLOLW\ LV QHFHVVDU\ DQG PXVW EH DFFHVVLELOLW\WKDQWKDWZKLFKZRXOGEHUHTXLUHGIRU
SURYLGHG QHZ FRQVWUXFWLRQ $OWHUDWLRQV VKDOO QRW UHGXFH RU
 'UHVVLQJ ILWWLQJ DQG ORFNHU KDYHWKHHIIHFWRIUHGXFLQJDFFHVVLELOLW\RIDIDFLOLW\
URRPV:KHUHLWLVWHFKQLFDOO\LQIHDVLEOHWRSURYLGH RUSRUWLRQRIDIDFLOLW\
DFFHVVLEOHGUHVVLQJILWWLQJRUORFNHUURRPVDWWKH ™ 7KHSXUSRVHRIWKLVVHFWLRQLVWRFODULI\WRZKLFK
VDPH ORFDWLRQ DV VLPLODU W\SHV RI URRPV RQH OHYHO WKH UHTXLUHPHQWV RI 6HFWLRQV  DQG
DFFHVVLEOH URRP RQ WKH VDPH OHYHO VKDOO EH DSSO\7KHUHTXLUHPHQWVDUHQRWLQWHQGHG
SURYLGHG :KHUH VHSDUDWH JHQGHU IDFLOLWLHV DUH WR LPSRVH D KLJKHU OHYHO RI DFFHVVLELOLW\ WKDQ
SURYLGHGDFFHVVLEOHURRPVIRUHDFKJHQGHUVKDOOEH WKDWUHTXLUHGLQQHZFRQVWUXFWLRQ$WWKHVDPH
SURYLGHG WLPH DOWHUDWLRQV FDQQRW UHVXOW LQ D OHVVHU

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

GHJUHH RI DFFHVVLELOLW\ WKDQ H[LVWHG EHIRUH  7KLV SURYLVLRQ GRHV QRW DSSO\ WR DOWHUDWLRQV
DOWHUDWLRQVZHUHXQGHUWDNHQ XQGHUWDNHQ IRU WKH SULPDU\ SXUSRVH RI
 $PXVHPHQW ULGHV  :KHUH WKH LQFUHDVLQJWKHDFFHVVLELOLW\RIDIDFLOLW\
VWUXFWXUDO RU RSHUDWLRQDO FKDUDFWHULVWLFV RI DQ  7KLVSURYLVLRQGRHVQRWDSSO\WRDOWHUHGDUHDV
DPXVHPHQW ULGH DUH DOWHUHG WR WKH H[WHQW WKDW WKH OLPLWHGWR7\SH%GZHOOLQJDQGVOHHSLQJXQLWV
DPXVHPHQW ULGH¶V SHUIRUPDQFH GLIIHUV IURP WKDW ™ $QDUHDFRQWDLQLQJDSULPDU\IXQFWLRQLVRQHLQ
VSHFLILHGE\WKHPDQXIDFWXUHURUWKHRULJLQDOGHVLJQ ZKLFKDPDMRUDFWLYLW\IRUZKLFKWKHEXLOGLQJRU
WKHDPXVHPHQWULGHVKDOOFRPSO\ZLWKUHTXLUHPHQWV IDFLOLW\ LV LQWHQGHG LV FDUULHG RXW VHH WKH
IRU QHZ FRQVWUXFWLRQ LQ DFFRUGDQFH ZLWK 6HFWLRQ GHILQLWLRQRI³3ULPDU\IXQFWLRQ´LQ6HFWLRQ
RI6%& )RUH[DPSOHWKHOREE\RIDKRWHOLQZKLFKWKH
UHJLVWUDWLRQ DQG FKHFNRXW GHVN LV ORFDWHG
™ 7RWKHH[WHQWWKDWDPXVHPHQWULGHVDUHVXEMHFW ZRXOG EH D SULPDU\ IXQFWLRQ DUHD 2WKHU
WR WKH DFFHVVLELOLW\ UHTXLUHPHQWV RI 6%&  H[DPSOHV ZRXOG EH WKH GLQLQJ DUHD RI D
6HFWLRQ  WKH\ VKRXOG EH DFFHVVLEOH UHVWDXUDQW WKH PHHWLQJ URRPV RU H[KLELWLRQ
DQG XVDEOH E\ LQGLYLGXDOV ZLWK GLVDELOLWLHV KDOOVLQDFRQIHUHQFHFHQWHUYLUWXDOO\DOO RIILFH
7KHVH VFRSLQJ SURYLVLRQV DUH IOH[LEOH DQG ZRUN DUHDV LQ D EXVLQHVV EXLOGLQJ DQG
SHUPLWWLQJ ODWLWXGH LQ WHUPV RI WKH PHWKRG RI UHWDLOGLVSOD\DUHDVLQDPHUFDQWLOHRFFXSDQF\
DFFHVV HJ WUDQVIHU VHDW UROORQ VHDW RU 7KHNH\FRQFHSWLVWKDWDSULPDU\IXQFWLRQDUHD
WUDQVIHU GHYLFH WR OLIW WKH ULGHU 0RELOH DQG LV RQH WKDW FRQWDLQV D PDMRU DFWLYLW\ RI WKH
SRUWDEOH ULGHV DUH H[HPSWHG 5LGHV ZLWKRXW IDFLOLW\$UHDVWKDWFRQWDLQDFWLYLWLHVQRWUHODWHG
VHDWV WKRVH GHVLJQHG IRU FKLOGUHQ ZKR DUH WRWKHPDLQSXUSRVHRIWKHIDFLOLW\ZRXOGQRWEH
DVVLVWHGRQWRWKHULGHDQGWKRVHULGHVFRQWUROOHG FRQVLGHUHG D SULPDU\ IXQFWLRQ DUHD )RU
E\WKHXVHUDUHDOVRH[HPSWHGXQGHU6%& H[DPSOH D PHFKDQLFDO HTXLSPHQW URRP
6HFWLRQ  IURP SURYLGLQJ ZKHHOFKDLU VWRUDJH FORVHW WRLOHW IDFLOLWLHV FRUULGRUV
WUDQVIHUVSDFHV7HFKQLFDOFULWHULDFDQEHIRXQG ORXQJHV DQG ORFNHU URRPV ZRXOG QRW EH
LQWKHHGLWLRQRIWKH,&&$6HFWLRQ FRQVLGHUHG SULPDU\ IXQFWLRQ DUHDV :LWK WKLV
DQGLQFOXGHVDFFHVVLEOHURXWHVORDGDQG EDFNJURXQGLWLVFOHDUWKDWDUHDVFRQWDLQLQJD
XQORDG DUHDV ZKHHOFKDLU VSDFHV RQ ULGHV SULPDU\IXQFWLRQDUHPRUHFULWLFDOLQWHUPVRIWKH
VHDWV IRU WUDQVIHU DQG WUDQVIHU GHYLFHV SXUSRVH IRU ZKLFK SHRSOH HQWHU DQG XVH WKH
5HFRJQL]LQJ WKH WHFKQLFDO LVVXHV DVVRFLDWHG IDFLOLW\WKHUHIRUHWKLVVHFWLRQUHIOHFWVWKDWZKHQ
ZLWKH[LVWLQJDPXVHPHQWULGHVFRPSOLDQFHZLWK VXFKDUHDVDUHDOWHUHGRUDGGHGLWLVLPSRUWDQW
DFFHVVLELOLW\UHTXLUHPHQWVLVUHTXLUHGZKHQWKH WR UHTXLUH WKDW DQ DFFHVVLEOH URXWH WR WKH
DPXVHPHQWULGHLVH[WHQVLYHO\DOWHUHG SULPDU\ IXQFWLRQ DUHD EH SURYLGHG :KHUH DQ
 $OWHUDWLRQVDIIHFWLQJDQDUHDFRQWDLQLQJ DFFHVVLEOH URXWH WR D SULPDU\ IXQFWLRQ DUHD LV
UHTXLUHGE\WKLVVHFWLRQDQDFFHVVLEOHURXWHWR
D SULPDU\IXQFWLRQ  :KHUHDQ DOWHUDWLRQDIIHFWV
IDFLOLWLHV VXFK DV DQ\ UHVWURRPV DQG GULQNLQJ
WKHDFFHVVLELOLW\WRDRUFRQWDLQVDQDUHDRISULPDU\ IRXQWDLQV VHUYLQJ WKH SULPDU\ IXQFWLRQ DUHD
IXQFWLRQWKHURXWHWRWKHSULPDU\IXQFWLRQDUHDVKDOO PXVW DOVR EH PDGH DFFHVVLEOH HYHQ WKRXJK
EHDFFHVVLEOH7KHDFFHVVLEOHURXWHWRWKHSULPDU\ VXFKIDFLOLWLHVDQGDUHDVPD\QRWE\WKHPVHOYHV
IXQFWLRQ DUHD VKDOO LQFOXGH WRLOHW IDFLOLWLHV DQG EH FRQVLGHUHG SULPDU\ IXQFWLRQ DUHDV 7KLV LV
GULQNLQJ IRXQWDLQV VHUYLQJ WKH DUHD RI SULPDU\ QRWMXVWWKHURXWHWRWKHEDWKURRPDQGGULQNLQJ
IXQFWLRQ IRXQWDLQVWKHEDWKURRPVDQGGULQNLQJIRXQWDLQV
WKHPVHOYHV PXVW DOVR EH LPSURYHG ZKHQ QRW
([FHSWLRQV DFFHVVLEOH
 7KHFRVWVRISURYLGLQJWKHDFFHVVLEOHURXWHDUH ™ 7KHUHDUHFRQGLWLRQVXQGHUZKLFKLWPD\QRWEH
UHDVRQDEOHWRVWULFWO\HQIRUFHWKLVUHTXLUHPHQW
QRWUHTXLUHGWRH[FHHGSHUFHQWRIWKHFRVWV
([FHSWLRQ  DSSURDFKHV WKLV E\ XWLOL]LQJ WKH
RIWKHDOWHUDWLRQVDIIHFWLQJWKHDUHDRISULPDU\ FRVWRIWKHDOWHUDWLRQVRUDGGLWLRQDVDEDVLVIRU
IXQFWLRQ GHWHUPLQLQJLISURYLGLQJDFRPSOHWHDFFHVVLEOH
 7KLV SURYLVLRQ GRHV QRW DSSO\ WR DOWHUDWLRQV URXWHLVUHDVRQDEOH7KHUHTXLUHPHQWGRHVQRW
OLPLWHG VROHO\ WR ZLQGRZV KDUGZDUH DSSO\ZKHQWKHFRVWRISURYLGLQJDQDFFHVVLEOH
RSHUDWLQJFRQWUROVHOHFWULFDORXWOHWVDQGVLJQV URXWH H[FHHGV  SHUFHQW RI WKH FRVW RI WKH
 7KLV SURYLVLRQ GRHV QRW DSSO\ WR DOWHUDWLRQV DOWHUDWLRQV RU DGGLWLRQ WR WKH SULPDU\ IXQFWLRQ
OLPLWHG VROHO\ WR PHFKDQLFDO V\VWHPV DUHD7KHVHFRVWVDUHLQWHQGHGWREHEDVHGRQ
HOHFWULFDOV\VWHPVLQVWDOODWLRQRUDOWHUDWLRQRI WKH DFWXDO FRVWV RI WKH SODQQHG DOWHUDWLRQV RU
ILUH SURWHFWLRQ V\VWHPV DQG DEDWHPHQW RI DGGLWLRQ WR WKH SULPDU\ IXQFWLRQ DUHD EHIRUH
FRQVLGHUDWLRQ RI WKH FRVW RI SURYLGLQJ DQ
KD]DUGRXVPDWHULDOV
DFFHVVLEOH URXWH )RU H[DPSOH LI WKH SODQQHG
DOWHUDWLRQV ZLOO FRVW  65 QRW LQFOXGLQJ

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

WKH FRVW RI DQ DFFHVVLEOH URXWH WR D SULPDU\ LQFUHDVLQJ DFFHVVLELOLW\ ,W LV DSSURSULDWH WR
IXQFWLRQDUHDWKLVH[FHSWLRQZRXOGDSSO\LIWKH HQFRXUDJH RZQHUV WR PDNH VXFK DOWHUDWLRQV
DGGLWLRQDOFRVWRISURYLGLQJWKHDFFHVVLEOHURXWH ZLWKRXWUHTXLULQJWKHPWRGRPRUHZRUNVLPSO\
ZRXOGH[FHHG65 EHFDXVH WKH\ FKRVH WR LQFUHDVH WKH
™ ,WLVQRWWKHLQWHQWWRH[HPSWDOOUHTXLUHPHQWVIRU DFFHVVLELOLW\RIWKHVSDFH7KLVFRXOGRWKHUZLVH
DFFHVVLELOLW\ ZKHQ WKH WRWDO FRVW IRU SURYLGLQJ KDYH WKH RSSRVLWH HIIHFW RI GLVFRXUDJLQJ VXFK
WKH DFFHVVLEOH URXWH H[FHHGV WKH SHUFHQW DOWHUDWLRQVWRDYRLGWKHH[SHQVHRIXQGHUWDNLQJ
WKUHVKROG ,PSURYHPHQWV WR WKH DFFHVVLEOH PRUHZRUNWKDQZDVRULJLQDOO\SODQQHG
URXWHDUHUHTXLUHGWRWKHH[WHQWWKDWFRVWVGRQRW ™ :KHUHWKHDOWHUDWLRQVUHVXOWLQ7\SH%GZHOOLQJ
H[FHHG  SHUFHQW RI WKH FRVW WR WKH SODQQHG XQLWV EHLQJ SURYLGHG ZKHUH QRQH SUHYLRXVO\
DOWHUDWLRQRUDGGLWLRQ,WLVQRWUHTXLUHGWKDWWKH H[LVWHG6HFWLRQ([FHSWLRQ([FHSWLRQ
IXOOSHUFHQWEHVSHQW,IWKHDFFHVVLEOHURXWH  ZRXOG HOLPLQDWH WKH QHHG IRU DQ\ DGGLWLRQDO
LQFOXGLQJ DFFHVVLEOH EDWKURRPV DQG GULQNLQJ PRQH\ WR EH VSHQW WRZDUG SURYLGLQJ DQ
IRXQWDLQV LV DOUHDG\ SURYLGHG QR DGGLWLRQDO DFFHVVLEOHURXWHWRWKRVHXQLWV7KLVLVLQWHQGHG
H[SHQGLWXUHLVUHTXLUHG1RWHWKDWWKHUHLVQRWD WRHQFRXUDJHWKHFUHDWLRQRIVXFKXQLWVZLWKRXW
SULRULW\ OLVW JLYHQ IRU ZKHUH PRQH\ VKRXOG EH SHQDOL]LQJ EXLOGLQJ RZQHUV 6LPLODU WR 6HFWLRQ
VSHQW RQ LPSURYLQJ WKH DFFHVVLEOH URXWH 7KH  WKLV H[FHSWLRQ LV LQWHQGHG WR DGGUHVV
ORJLFDO SURJUHVVLRQ LV DFFHVV WR WKH VLWH WKHFRQFHUQVRIVLWHLPSUDFWLFDOLW\IRUSURYLGLQJ
DFFHVVLEOH H[WHULRU URXWHV WR DFFHVVLEOH DFFHVVLEOHURXWHVWRDQGLQWRH[LVWLQJEXLOGLQJV
HQWUDQFHV DFFHVV WKURXJKRXW WKH IDFLOLW\ SURYLGLQJ7\SH%GZHOOLQJXQLWV
DFFHVV WR VHUYLFHV LQ WKH IDFLOLW\ WRLOHW DQG ™ 7KLVDOVRUHLQIRUFHVWKHLQWHQWWKDWWKHLQFOXVLRQ
EDWKLQJ URRPV DQG ILQDOO\ GULQNLQJ IRXQWDLQV RI7\SH%XQLWVLVQRWPHDQWWRUHTXLUHHOHYDWRUV
(YDOXDWLRQ RI KRZ DQG ZKHUH WKH PRQH\ ZKHQDOWHUDWLRQVDUHSHUIRUPHGRQXSSHUIORRUV
DYDLODEOHVKRXOG EHVW EHVSHQWPXVWEHPDGH LQ EXLOGLQJV QRW FRQWDLQLQJ HOHYDWRUV VHH
RQ D FDVHE\FDVH EDVLV )RU H[DPSOH LI DQ H[FHSWLRQV WR 6HFWLRQ  7KHVH DUHDV
DFFHVVLEOH URXWH LV QRW DYDLODEOH WR DQ XSSHU ZRXOG KDYH EHHQ H[HPSWHGLIEXLOW QHZXQGHU
OHYHODQGWKHFRVWRIDQHOHYDWRULVPRUHWKDQ WKH 6%&  DQG VKRXOG FRQWLQXH WR EH
 SHUFHQW RI WKH FRVW RI WKH UHQRYDWLRQ WKHQ H[HPSWHG
RWKHU DOWHUQDWLYHV FRXOG EH LQYHVWLJDWHG VXFK
DVDSODWIRUPOLIWRUOLPLWHGDFFHVVHOHYDWRURU 6(&7,215(522),1*
DGGLQJ WKH HOHYDWRU SLW DQG VKDIW DW WKLV WLPH  *HQHUDO  0DWHULDOV DQG PHWKRGV RI
ZLWKHOHYDWRUHTXLSPHQWDGGHGODWHU,IDOOVXFK DSSOLFDWLRQ XVHG IRU UHFRYHULQJ RU UHSODFLQJ DQ
LWHPV DUH LQ H[FHVV RI WKH SHUFHQW OLPLW
H[LVWLQJ URRI FRYHULQJ VKDOO FRPSO\ ZLWK WKH
SHUKDSV WKH PRQH\ DYDLODEOH FRXOG EH VSHQW
WRZDUGPDNLQJWKHWRLOHWURRPVDFFHVVLEOH7KH UHTXLUHPHQWVRI&KDSWHURI6%&
LGHD LV WKDW H[LVWLQJ EXLOGLQJV ZRXOG EHFRPH ([FHSWLRQ5HURRILQJVKDOOQRWEHUHTXLUHGWRPHHW
IXOO\DFFHVVLEOHRYHUWLPH WKH PLQLPXP GHVLJQ VORSH UHTXLUHPHQW RI RQH
™ ([FHSWLRQV  DQG  LGHQWLI\ FHUWDLQ DOWHUDWLRQV
TXDUWHU XQLW YHUWLFDO LQ  XQLWV KRUL]RQWDO 
WKDWDUHQRWLQWHQGHGWRWULJJHUWKHUHTXLUHPHQW
IRU SURYLGLQJ DQ DFFHVVLEOH URXWH WR D SULPDU\
SHUFHQWVORSHLQ6HFWLRQRI6%&IRUURRIV
IXQFWLRQ DUHD $OWHUDWLRQV OLPLWHG WR HOHPHQWV WKDWSURYLGHSRVLWLYHURRIGUDLQDJH
VXFKDVZLQGRZVKDUGZDUHRSHUDWLQJFRQWUROV ™ 7KLV VHFWLRQ VLPSO\ VWDWHV WKDW ZKHQ D URRI LV
HOHFWULFDO RXWOHWV VLJQDJH PHFKDQLFDO UHSODFHGRUUHFRYHUHGLWPXVWFRPSO\ZLWK6%&
HOHFWULFDODQGILUHSURWHFWLRQV\VWHPVLQFOXGLQJ &KDSWHUIRUWKHPDWHULDOVDQGPHWKRGV
DOWHUDWLRQV IRU WKH SXUSRVH RI DEDWLQJ D XVHG ZLWK DQ H[FHSWLRQ IRU ORZVORSHG URRIV
KD]DUGRXV PDWHULDOV FLUFXPVWDQFH GR QRW 7KLV VHFWLRQ GRHV QRW PDQGDWH WKDW WKH HQWLUH
DIIHFWWKHXVDELOLW\RIDSULPDU\IXQFWLRQDUHDLQ URRI EH UHSODFHG EXW VLPSO\ WKDW WKH SRUWLRQ
WKHVDPHPDQQHUDVDOWHUDWLRQVWKDWDIIHFWWKH EHLQJUHSODFHGFRPSO\ZLWK6%&&KDSWHU
IORRUSODQRUWKHFRQILJXUDWLRQORFDWLRQRUVL]H 
RIURRPVRUVSDFHV,W LVWKHUHIRUHFRQVLGHUHG ™ )RU ORZVORSHG URRIV WKH H[FHSWLRQ LQGLFDWHV
XQUHDVRQDEOH WR UHTXLUH WKH LQVWDOODWLRQ RI DQ WKDWUHURRILQJLHUHFRYHULQJRUUHSODFHPHQW
DFFHVVLEOHURXWHZKHQWKHVFRSHRIDOWHUDWLRQV LV QRW UHTXLUHG WR PHHW WKH  PLQLPXP
LVOLPLWHGWRWKDWUHIOHFWHGLQWKHVHH[FHSWLRQV VORSH UHTXLUHPHQW RI 6%&  6HFWLRQ 
™ 1RWH WKDW WKH FRVWV IRU WKHVH LWHPV DUH QRW SURYLGHG WKDW WKH URRI KDV SRVLWLYH GUDLQDJH
³EDFNHGRXW´RIWKHWRWDOFRVWIRUWKHDOWHUDWLRQ 7KHWHUP³3RVLWLYHURRIGUDLQDJH´LVGHILQHGLQ
EHIRUHDSSO\LQJ([FHSWLRQ([FHSWLRQVDQG 6%&&KDSWHUDV³WKHGUDLQDJHFRQGLWLRQ
 DUH DOWHUDWLRQV OLPLWHG WR WKH VSHFLILF LWHPV LQ ZKLFK FRQVLGHUDWLRQ KDV EHHQ PDGH IRU DOO
UHIHUHQFHG ([FHSWLRQ  LV LQWHQGHG WR DYRLG ORDGLQJ GHIOHFWLRQV RI WKH URRI GHFN DQG
SHQDOL]LQJDEXLOGLQJRZQHUZKRLVXQGHUWDNLQJ DGGLWLRQDO URRI VORSH KDV EHHQ SURYLGHG WR
DOWHUDWLRQV RU DGGLWLRQV IRU WKH SXUSRVH RI

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

HQVXUHGUDLQDJHRIWKHURRIDUHDZLWKLQKRXUV ™ 7KLV VHFWLRQ GHWHUPLQHV ZKHUH DOO OD\HUV RI

RISUHFLSLWDWLRQ´ SUHYLRXVO\LQVWDOOHGURRIFRYHULQJV\VWHPVPXVW
EHUHPRYHGSULRUWRWKHLQVWDOODWLRQRIWKHQHZ
 6WUXFWXUDO DQG FRQVWUXFWLRQ ORDGV URRIFRYHULQJV\VWHP1RWHWKDWURRIFRYHULQJV
6WUXFWXUDO URRI FRPSRQHQWV VKDOO EH FDSDEOH RI QHHGWREHUHPRYHGGRZQWRWKHURRIGHFNLQJ
VXSSRUWLQJ WKH URRIFRYHULQJ V\VWHP DQG WKH RUVKHDWKLQJ
PDWHULDO DQG HTXLSPHQW ORDGV WKDW ZLOO EH ™ :KHUHWKHH[LVWLQJURRIRUURRIFRYHULQJLVZDWHU
HQFRXQWHUHGGXULQJLQVWDOODWLRQRIWKHV\VWHP VRDNHGLWPXVWEHDOORZHGWRGU\FRPSOHWHO\VR
DVQRWWRWUDSPRLVWXUHEHQHDWKWKHQHZOD\HU
™ 7KH VWUXFWXUDO LQWHJULW\ RI WKH URRI PXVW EH
RI FRYHULQJ 7KLV FRXOG FDXVH D UDSLG
PDLQWDLQHG GXULQJ UHURRILQJ RSHUDWLRQV ZKLFK
GHWHULRUDWLRQ RI WKH QHZ FRYHULQJ PDWHULDO DV
FDQVLJQLILFDQWO\FRQWULEXWHWRWKHORDGLQJRIWKH
ZHOO DV WKH H[LVWLQJ VKHDWKLQJ 7KH H[LVWLQJ
URRIGXHWRZRUNHUVDQGPDWHULDOEHLQJSUHVHQW
FRYHULQJLVUHTXLUHGWREHUHPRYHGLILWFDQQRW
7KH URRI VXSSRUW V\VWHP PXVW EH DEOH WR
DGHTXDWHO\ GU\RXWRU LILWVSK\VLFDOSURSHUWLHV
VWUXFWXUDOO\VXSSRUWDOODGGLWLRQDOOD\HUVRIURRI
KDYHEHHQSHUPDQHQWO\DOWHUHG
FRYHULQJPDWHULDO
™ :RRG VKDNH VODWH FOD\ FHPHQW RU DVEHVWRV
 5HFRYHULQJ YHUVXV UHSODFHPHQW  1HZ FHPHQW WLOH W\SHV RI H[LVWLQJ URRI FRYHULQJV
URRI FRYHULQJV VKDOO QRW EH LQVWDOOHG ZLWKRXW ILUVW KLVWRULFDOO\GRQRWPDNHDQDGHTXDWHEDVHIRU
UHPRYLQJDOOH[LVWLQJOD\HUVRIURRIFRYHULQJVGRZQ QHZURRIFRYHULQJVDQGFRXOGSUHYHQWWKHQHZ
FRYHULQJ IURP PDNLQJ D ZHDWKHUWLJKW VHDO
WR WKH URRI GHFN ZKHUH DQ\ RI WKH IROORZLQJ
7KH\ FRXOG DOVR DOORZ SHQHWUDWLRQ RI ZDWHU
FRQGLWLRQVRFFXU VQRZ HWF 7KHVH W\SHV RI H[LVWLQJ FRYHULQJV
PXVWDOZD\VEHUHPRYHG
 :KHUH WKH H[LVWLQJ URRI RU URRI FRYHULQJ LV ™ :KHQWKHH[LVWLQJURRIKDVWZRRUPRUHOD\HUV
ZDWHUVRDNHGRUKDVGHWHULRUDWHGWRWKHSRLQW RIDQ\W\SHRIFRYHULQJV\VWHPDOOOD\HUVQHHG
WKDWWKHH[LVWLQJURRIRUURRIFRYHULQJLVQRW WR EH UHPRYHG WR HQDEOH WKH LQVSHFWRU DQG
DGHTXDWHDVDEDVHIRUDGGLWLRQDOURRILQJ FRQWUDFWRUWRYHULI\WKDWWKHH[LVWLQJVKHDWKLQJLV
 :KHUH WKH H[LVWLQJ URRI FRYHULQJ LV ZRRG QRW ZDWHU GDPDJHG DQG VWLOO FDSDEOH RI
VKDNHVODWHFOD\FHPHQWRUDVEHVWRVFHPHQW SURYLGLQJDQDGHTXDWHQDLOLQJEDVH
WLOH ™ ([FHSWLRQ  VWDWHV WKDW QHZ URRILQJ V\VWHPV
GHVLJQHGWRWUDQVPLWDOOURRIORDGVGLUHFWO\WRWKH
 :KHUH WKH H[LVWLQJ URRI KDV WZR RU PRUH
VWUXFWXUDO VXSSRUWV RI WKH EXLOGLQJ GR QRW
DSSOLFDWLRQVRIDQ\W\SHRIURRIFRYHULQJ QHFHVVLWDWH UHPRYDO RI WKH H[LVWLQJ URRILQJ
([FHSWLRQV V\VWHP ([FHSWLRQ  DOORZV FHUWDLQ URRI
FRYHULQJVLQFOXGLQJPHWDOFRQFUHWHSDQHODQG
 &RPSOHWHDQGVHSDUDWHURRILQJV\VWHPVVXFK FOD\WREHSODFHGRYHUZRRGVKLQJOHDQGVKDNH
DVVWDQGLQJVHDPPHWDOURRIV\VWHPVWKDWDUH URRIVRQO\LIDQ\FRQFHDOHGFRPEXVWLEOHVSDFHV
GHVLJQHGWRWUDQVPLWWKHURRIORDGVGLUHFWO\WR DUHSURSHUO\DGGUHVVHGLQDFFRUGDQFHZLWK6%&
WKH EXLOGLQJ¶V VWUXFWXUDO V\VWHP DQG WKDW GR 6HFWLRQVHHFRPPHQWDU\6%&
QRWUHO\RQH[LVWLQJURRIVDQGURRIFRYHULQJV 6HFWLRQ  ([FHSWLRQ  UHIHUV WR WKH
IRUVXSSRUWVKDOOQRWUHTXLUHWKH UHPRYDORI SUDFWLFH RI ³UHFRDWLQJ´ LQ ZKLFK D QHZ
H[LVWLQJURRIFRYHULQJV SURWHFWLYH FRDWLQJ LV SODFHG RYHU DQ H[LVWLQJ
VSUD\ SRO\XUHWKDQH IRDP URRILQJ V\VWHP
 0HWDOSDQHOPHWDOVKLQJOHDQGFRQFUHWHDQG
5HFRDWLQJFDQDGGPDQ\\HDUVWRWKHHIIHFWLYH
FOD\WLOHURRIFRYHULQJVVKDOOEHSHUPLWWHGWR OLIH RI D VSUD\ SRO\XUHWKDQH IRDP URRILQJ
EH LQVWDOOHG RYHU H[LVWLQJ ZRRG VKDNH URRIV V\VWHP ZLWKRXW WKH DVVRFLDWHG GRZQVLGH RI
ZKHQ DSSOLHG LQ DFFRUGDQFH ZLWK 6HFWLRQ DGGLQJVLJQLILFDQWZHLJKWDVVRFLDWHGZLWKRWKHU
 UHURRILQJW\SHV\VWHPV
 7KH DSSOLFDWLRQ RI D QHZ SURWHFWLYH FRDWLQJ ™ :KHQ UHPRYLQJ URRI FRYHULQJV LW FDQ EH
RYHU DQ H[LVWLQJ VSUD\ SRO\XUHWKDQH IRDP GLIILFXOWLIQRWLPSRVVLEOHWRUHPRYHDQH[LVWLQJ
URRILQJ V\VWHP VKDOO EH SHUPLWWHG ZLWKRXW OD\HURIDGKHUHGLFHEDUULHUPHPEUDQHZLWKRXW
WHDURIIRIH[LVWLQJURRIFRYHULQJV GDPDJLQJRUUHSODFLQJWKHURRIGHFN([FHSWLRQ
 :KHUHWKHH[LVWLQJURRIDVVHPEO\LQFOXGHVDQ  DFFRXQWV IRU WKLV FRQGLWLRQ E\ DOORZLQJ DQ
H[LVWLQJ DGKHUHG LFH EDUULHU PHPEUDQH WR
LFH EDUULHU PHPEUDQH WKDW LV DGKHUHG WR WKH
UHPDLQLQSODFHDQGEHFRYHUHGZLWKDQHZLFH
URRIGHFNWKHH[LVWLQJLFHEDUULHUPHPEUDQH EDUULHU PHPEUDQH DV UHTXLUHG LQ 6%& 
VKDOO EH SHUPLWWHG WR UHPDLQ LQ SODFH DQG 6HFWLRQIROORZHGE\WKHLQVWDOODWLRQRIWKH
FRYHUHGZLWKDQDGGLWLRQDOOD\HURILFHEDUULHU QHZSULPDU\URRIFRYHULQJPDWHULDO
PHPEUDQHLQDFFRUGDQFHZLWK6HFWLRQRI
6%&

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

 5RRIUHFRYHULQJ:KHUHWKHDSSOLFDWLRQRI ™ 7KHVH UHTXLUHPHQWV DSSO\ WR DOWHUDWLRQV

D QHZ URRI FRYHULQJ RYHU ZRRG VKLQJOH RU VKDNH LQYROYLQJ UHURRILQJ RU WKH UHSODFHPHQW RI
URRIV FUHDWHV D FRPEXVWLEOH FRQFHDOHG VSDFH WKH HTXLSPHQWWKDWLVVXSSRUWHGE\WKHEXLOGLQJ
HQWLUH H[LVWLQJ VXUIDFH VKDOO EH FRYHUHG ZLWK  $GGLWLRQ RU UHSODFHPHQW RI URRILQJ RU
J\SVXP ERDUG PLQHUDO ILEHU JODVV ILEHU RU RWKHU UHSODFHPHQW RI HTXLSPHQW  :KHUH DGGLWLRQ RU
DSSURYHGPDWHULDOVVHFXUHO\IDVWHQHGLQSODFH UHSODFHPHQW RI URRILQJ RU UHSODFHPHQW RI
™ ³5RRIUHFRYHULQJ´LVGHILQHGDVWKHSURFHVVRI HTXLSPHQW UHVXOWV LQ DGGLWLRQDO GHDG ORDGV
LQVWDOOLQJ DQ DGGLWLRQDO URRI FRYHULQJ RYHU D VWUXFWXUDOFRPSRQHQWVVXSSRUWLQJVXFKUHURRILQJRU
SUHSDUHG H[LVWLQJ URRI FRYHULQJ ZLWKRXW HTXLSPHQW VKDOO FRPSO\ ZLWK WKH JUDYLW\ ORDG
UHPRYLQJ WKH H[LVWLQJ URRI FRYHULQJ :KHUH UHTXLUHPHQWVRIWKH6%&
UHFRYHULQJ RYHU ZRRG VKLQJOHV RU VKDNHV
FUHDWHV D FRPEXVWLEOH FRQFHDOHG VSDFH WKH ([FHSWLRQV
FRGH UHTXLUHV WKDW WKH HQWLUH VXUIDFH RI WKH  6WUXFWXUDOHOHPHQWVZKHUHWKHDGGLWLRQDOGHDG
ZRRG VKDNHV DQG VKLQJOHV EH FRYHUHG ZLWK D ORDGIURPWKHURRILQJRUHTXLSPHQWGRHVQRW
PDWHULDOWKDWZLOOUHGXFHWKHSRVVLELOLW\RIVXFK
LQFUHDVHWKHIRUFHLQWKHHOHPHQWE\PRUHWKDQ
PDWHULDOVDGGLQJIXHOWRDILUHLQVXFKDVSDFH
SHUFHQW
 5HLQVWDOODWLRQ RI PDWHULDOV  ([LVWLQJ  %XLOGLQJVFRQVWUXFWHGLQDFFRUGDQFHZLWKWKH
VODWH FOD\ RU FHPHQW WLOH VKDOO EH SHUPLWWHG IRU 6%&  RU WKH FRQYHQWLRQDO OLJKWIUDPH
UHLQVWDOODWLRQ H[FHSW WKDW GDPDJHG FUDFNHG RU FRQVWUXFWLRQ PHWKRGV RI WKH 6%&  DQG
EURNHQVODWHRUWLOHVKDOOQRWEHUHLQVWDOOHG([LVWLQJ ZKHUH WKH GHDG ORDG IURP WKH URRILQJ RU
YHQWIODVKLQJPHWDOHGJLQJVGUDLQRXWOHWVFROODUV HTXLSPHQW LV QRW LQFUHDVHG E\ PRUH WKDQ 
DQGPHWDOFRXQWHUIODVKLQJVVKDOOQRWEHUHLQVWDOOHG SHUFHQW
ZKHUHUXVWHGGDPDJHGRUGHWHULRUDWHG$JJUHJDWH  $GGLWLRQ RI D VHFRQG OD\HU RI URRI FRYHULQJ
VXUIDFLQJPDWHULDOVVKDOOQRWEHUHLQVWDOOHG ZHLJKLQJN1PRUOHVVRYHUDQH[LVWLQJ
™ 7KLVVHFWLRQSODFHVFRQGLWLRQVRQWKHUHXVHRI VLQJOHOD\HURIURRIFRYHULQJ
URRI FRYHULQJ PDWHULDOV +LVWRULFDOO\ YDULRXV ™ :KHUHUHURRILQJWKHDGGLWLRQRIDQHZOD\HURI
W\SHVRIPDWHULDOVKDYHEHHQUHPRYDEOHZLWKRXW URRILQJRUUHSODFHPHQWRIHTXLSPHQWUHVXOWVLQ
VXEVWDQWLDOO\ GDPDJLQJ WKH PDWHULDO 0DWHULDOV DQHWLQFUHDVHLQWKHVXSSRUWHGGHDGORDGWKH
VXFKDVZRRGVKLQJOHVDQGVKDNHVUROOURRILQJ DIIHFWHG VWUXFWXUDO FRPSRQHQWV PXVW EH
DQGDVSKDOWVKLQJOHVDUHXVXDOO\WRUQRUFUDFNHG FKHFNHG WR YHULI\ WKDW WKH JUDYLW\ ORDG
DQG FDQQRW EH UHXVHG )DVWHQHU KROHV DOVR UHTXLUHPHQWV RI WKH 6%&  IRU D QHZ
YLRODWHWKHLQWHJULW\RIWKHPDWHULDO%HIRUHUHXVH VWUXFWXUH DUH VDWLVILHG 7KH UHIHUHQFH WR RQO\
LV DOORZHG PDWHULDOV VXFK DV VODWH FOD\ RU JUDYLW\ORDGVLVDQLQGLFDWLRQWKDWDQDQDO\VLVIRU
FHPHQWWLOHVKRXOGEHH[DPLQHGWKRURXJKO\IRU WKH HIIHFWV RI ODWHUDO ORDGV VXFK DV VHLVPLF
FUDFNVDQGGHWHULRUDWLRQ ZRXOG QRW EH D QHFHVVLW\ IRU WKLV OHYHO RI
 )ODVKLQJV  )ODVKLQJV VKDOO EH DOWHUDWLRQ
™ 7KHUH DUH WKUHH H[FHSWLRQV WR VDWLVI\ IXOO
UHFRQVWUXFWHG LQ DFFRUGDQFH ZLWK DSSURYHG
FRPSOLDQFH ZLWK WKH 6%&  ([FHSWLRQ 
PDQXIDFWXUHU¶V LQVWDOODWLRQ LQVWUXFWLRQV 0HWDO DOORZV DQ LQFUHDVH LQ WKH IRUFH LQ D VWUXFWXUDO
IODVKLQJ WR ZKLFK ELWXPLQRXV PDWHULDOV DUH WR EH HOHPHQWRIXSWRSHUFHQWGXHWRWKHDGGLWLRQDO
DGKHUHGVKDOOEHSULPHGSULRUWRLQVWDOODWLRQ GHDG ORDG IURP WKH URRILQJ RU HTXLSPHQW
™ )ODVKLQJV WR EH UHXVHG RU UHFRQVWUXFWHG PXVW ([FHSWLRQDOORZVDGGLWLRQDOGHDGORDGVIURP
EH LQ DFFRUGDQFH ZLWK WKH PDQXIDFWXUHU¶V URRIFRYHULQJVRUUHSODFHPHQWHTXLSPHQWWREH
LQVWDOODWLRQLQVWUXFWLRQV0HWDOIODVKLQJVWKDWDUH LQFUHDVHG E\  SHUFHQW EH\RQG WKH RULJLQDO
WREHUHXVHGIRUELWXPLQRXVPDWHULDOVPXVWEH GHDGORDGRIWKHURRIFRYHULQJVDQGHTXLSPHQW
SULPHG LQ DFFRUGDQFH ZLWK WKH PDQXIDFWXUHU¶V ZLWKRXWKDYLQJWRGRDQ\IXUWKHUDQDO\VLVVXFK
LQVWUXFWLRQV DV FRPSXWDWLRQ RI VWUXFWXUDO PHPEHU VWUHVV
LQFUHDVHV ([FHSWLRQV  DQG  GR QRW
VSHFLILFDOO\DGGUHVVWKHFXPXODWLYHHIIHFWVIURP
VXFFHVVLYHDOWHUDWLRQVIRULQVWDQFHLWZRXOGEH
6(&7,216758&785$/ SUXGHQW WR OLPLW FXPXODWLYH LQFUHDVHV XQGHU
 *HQHUDO:KHUHDOWHUDWLRQZRUNLQFOXGHV WKHVHH[FHSWLRQVWRDWRWDORISHUFHQWXQOHVV
UHSODFHPHQWRIHTXLSPHQWWKDWLVVXSSRUWHGE\WKH LWLVFOHDUO\GRFXPHQWHGWKDWWKHVWUXFWXUHKDV
DGGLWLRQDOFDSDFLW\
EXLOGLQJRUZKHUHDUHURRILQJSHUPLWLVUHTXLUHGWKH
™ ([FHSWLRQ  DOORZV WKH DGGLWLRQ RI D VHFRQG
SURYLVLRQVRIWKLVVHFWLRQVKDOODSSO\ OD\HU RI URRI FRYHULQJ RYHU DQ H[LVWLQJ VLQJOH
OD\HURIURRIFRYHULQJDVORQJDVWKHQHZURRI

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

FRYHULQJGRHVQRWZHLJKPRUHWKDQN1P DOWHUQDWLYHPHWKRGVRIGHVLJQDQGFRQVWUXFWLRQ
8QGHU WKLV H[FHSWLRQ HYHQ WKRXJK WKH QHZ XQGHU6HFWLRQ
OD\HU RI URRI FRYHULQJ PLJKW EH DGGLQJ PRUH ™ 1RWHWKDWRQO\WKHSDUDSHW EUDFLQJIRUVHLVPLF
WKDQSHUFHQWRIWKHRULJLQDOGHDGORDGWKHUH ORDGV LV UHTXLUHG 6RPH EXLOGLQJV HVSHFLDOO\
LV VWLOO QR DQDO\VLV UHTXLUHG 7KLV H[FHSWLRQ WKRVH HDVW RI WKH 5RFN\ 0RXQWDLQV ZHUH QRW
UHFRJQL]HV D FRPPRQ SUDFWLFH LQ PDQ\ GHVLJQHG IRU VHLVPLF ORDGV 7KH\ ZHUH RQO\
MXULVGLFWLRQV DFURVV WKH FRXQWU\ ZKHUH WKH GHVLJQHG WR UHVLVW ZLQG ORDGV $W WKH SUHVHQW
DGGLWLRQ RI D QHZ OLJKWZHLJKW OD\HU RI URRI WLPHWKHFRGHGRHVQRWUHTXLUHDUHYLHZRIWKH
FRYHULQJRYHUDQH[LVWLQJVLQJOHOD\HUKDVEHHQ EXLOGLQJIRUVHLVPLFORDGV
DOORZHGZLWKRXWNQRZQOLIHVDIHW\LVVXHV1RWH
WKDW6HFWLRQPD\KDYHRWKHUOLPLWDWLRQVRQ 5RRIGLDSKUDJPVUHVLVWLQJZLQGORDGVLQ
UHURRILQJ KLJKZLQG UHJLRQV  :KHUH URRILQJ PDWHULDOV DUH
UHPRYHG IURP PRUH WKDQ  SHUFHQW RI WKH URRI
 $GGLWLRQDO UHTXLUHPHQWV IRU UHURRI GLDSKUDJP RU VHFWLRQ RI D EXLOGLQJ ORFDWHG ZKHUH
SHUPLWV  7KH UHTXLUHPHQWV RI WKLV VHFWLRQ VKDOO WKH XOWLPDWH GHVLJQ ZLQG VSHHG 9 GHWHUPLQHG LQ
DSSO\WRDOWHUDWLRQZRUNUHTXLULQJUHURRISHUPLWV DFFRUGDQFHZLWK)LJXUHRI6%&LV
™ 7KLV VHFWLRQ UHIHUV WKH FRGH XVHU WR 6HFWLRQV JUHDWHUWKDQNPKURULQDVSHFLDOZLQGUHJLRQ
DQGIRUDGGLWLRQDOUHTXLUHPHQWV DV GHILQHG LQ 6HFWLRQ  RI  6%&  URRI
IRUUHURRILQJSURMHFWVZKHUHDSHUPLWKDVEHHQ GLDSKUDJPVFRQQHFWLRQVRIWKHURRIGLDSKUDJPWR
LVVXHG URRI IUDPLQJ PHPEHUV DQG URRIWRZDOO
%UDFLQJ IRU XQUHLQIRUFHG PDVRQU\ FRQQHFWLRQV VKDOO EH HYDOXDWHG IRU WKH ZLQG ORDGV
EHDULQJZDOOSDUDSHWV:KHUHDSHUPLWLVLVVXHG VSHFLILHGLQWKH6%&LQFOXGLQJZLQGXSOLIW,I
IRUUHURRILQJIRUPRUHWKDQSHUFHQWRIWKHURRI WKH GLDSKUDJPV DQG FRQQHFWLRQV LQ WKHLU FXUUHQW
DUHD RI D EXLOGLQJ DVVLJQHG WR 6HLVPLF 'HVLJQ FRQGLWLRQ DUH QRW FDSDEOH RI UHVLVWLQJ DW OHDVW 
&DWHJRU\'(RU)WKDWKDVSDUDSHWVFRQVWUXFWHGRI SHUFHQWRIWKRVHZLQGORDGVWKH\VKDOOEHUHSODFHG
XQUHLQIRUFHG PDVRQU\ WKH ZRUN VKDOO LQFOXGH RU VWUHQJWKHQHG LQ DFFRUGDQFH ZLWK WKH ORDGV
LQVWDOODWLRQRISDUDSHWEUDFLQJWRUHVLVWWKHUHGXFHG VSHFLILHGLQWKH6%&
6%&OHYHOVHLVPLFIRUFHVDVVSHFLILHGLQ6HFWLRQ ™ 7KHUHPRYDORIURRILQJSURYLGHVDQRSSRUWXQLW\
 RI WKLV FRGH XQOHVV DQ HYDOXDWLRQ WR LQVSHFW D SRUWLRQ RI WKH VWUXFWXUH WKDW LV
GHPRQVWUDWHVFRPSOLDQFHRIVXFKLWHPV RWKHUZLVH FRQFHDOHG 6XFK LQVSHFWLRQV PXVW
WDNHSODFHZKHUHPRUHWKDQSHUFHQWRIWKH
™ 7KHIDLOXUHRISDUDSHWVLQXQUHLQIRUFHGPDVRQU\ URRI FRYHULQJ LV UHPRYHG IURP D EXLOGLQJ
EHDULQJ 850 ZDOO EXLOGLQJV KDV EHHQ D ORFDWHG LQ D VSHFLDO ZLQG UHJLRQ RU ZKHUH WKH
UHFXUULQJ SUREOHP LQ DUHDV WKDW H[SHULHQFH XOWLPDWHGHVLJQZLQGVSHHG9XOWGHWHUPLQHGLQ
VLJQLILFDQWHDUWKTXDNHV%HFDXVHWKLV SRVHVD DFFRUGDQFH ZLWK 6%&  7DEOH  LV
YHU\UHDOULVNWKHFRGHUHTXLUHVWKHVHHOHPHQWV JUHDWHUWKDQNPKU
WR EH EUDFHG ZKHUH WKH VHLVPLF KD]DUG LV ™ $URRIGLDSKUDJPWKDWLVDSDUWRIWKHPDLQZLQG
GHHPHG WR EH UHODWLYHO\ KLJK DV UHIOHFWHG LQ D IRUFHUHVLVWLQJ V\VWHP LV UHTXLUHG WR KDYH
EXLOGLQJ¶V VHLVPLF GHVLJQ FDWHJRU\ 6LQFH WKH DGHTXDWH VWUHQJWK WR UHVLVW DQG WUDQVIHU WKH
FRGH GRHV QRW SURYLGH WKH UHTXLUHPHQWV IRU ZLQG ORDGV UHIHUHQFHG LQ WKH 6%& 
HVWDEOLVKLQJWKHVHLVPLFGHVLJQFDWHJRU\6%& LQFOXGLQJ XSOLIW ORDGV ,I WKH URRI GLDSKUDJP LV
 6HFWLRQ  PXVW EH XVHG IRU WKLV QRWDEOHWRUHVLVWSHUFHQWRIWKHZLQGORDGV
SXUSRVH )RU DQ H[SODQDWLRQ RI WKLV SURFHVV VSHFLILHGLQWKH6%&VXFKFRQQHFWLRQVDUH
VHH WKH FRPPHQWDU\ WR 6HFWLRQ  7KH UHTXLUHG WR EH VWUHQJWKHQHG RU UHSODFHG 7KH
FRGHDOORZVWKLVSDUDSHWEUDFLQJWREHGHVLJQHG SHUFHQW UHGXFWLRQ LV FRQVLVWHQW ZLWK RWKHU
XVLQJ WKH UHGXFHG VHLVPLF IRUFHV RI 6HFWLRQ VWUXFWXUDO DOORZDQFHV IRU H[LVWLQJ FRQGLWLRQV
 DQG WKH GHVLJQ SURFHGXUHV OLVWHG LQ 1RWHWKDWWKLVVHFWLRQVSHOOVRXWZKLFKDVSHFWV
6HFWLRQ  6HH $6&(  RU 6HFWLRQ RIWKHURRIQHHGWREHHYDOXDWHGDQGSRVVLEO\
$RI*XLGHOLQHVIRU6HLVPLF(YDOXDWLRQRI UHSODFHGDQGVWUHQJWKHQHG7KHVHLQFOXGHWKH
([LVWLQJ %XLOGLQJV *65(% LQ $SSHQGL[ $ RI IROORZLQJ
WKHFRGHIRUVSHFLILFUHTXLUHPHQWVIRUSDUDSHWV
™ $QH[DPSOHRIWKHSUHVFULEHGSDUDSHWEUDFLQJ x 5RRIGLDSKUDJPV
LV LOOXVWUDWHG VFKHPDWLFDOO\ LQ &RPPHQWDU\ x &RQQHFWLRQV RI WKH URRI GLDSKUDJP WR URRI
)LJXUH 7KH DSSURDFKVKRZQ²DVWHHO IUDPLQJPHPEHUV
EUDFHDQFKRUHGWRWKHSDUDSHWZDOODQGWKHURRI
VWUXFWXUH LV FRPPRQO\ XVHG WR SURYLGH ODWHUDO x 5RRIWRZDOOFRQQHFWLRQV
VXSSRUW IRU D SDUDSHW 2WKHU PHWKRGV RI ™ 7KLV UHTXLUHPHQW LV DOVR IRXQG LQ WKH
VWUHQJWKHQLQJDSDUDSHWFDQEHXVHGWRPLWLJDWH SUHVFULSWLYHPHWKRGLQ6HFWLRQ
WKHKD]DUGSURYLGHGWKHLUXVHVDUHDSSURYHGDV

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

6(&7,21(1(5*<
&216(59$7,21
 0LQLPXP UHTXLUHPHQWV  /HYHO 
DOWHUDWLRQV WR H[LVWLQJ EXLOGLQJV RU VWUXFWXUHV DUH
SHUPLWWHGZLWKRXW UHTXLULQJWKH HQWLUHEXLOGLQJ RU
VWUXFWXUHWRFRPSO\ZLWKWKHHQHUJ\UHTXLUHPHQWVRI
WKH 6%&  RU 6%&  7KH DOWHUDWLRQV VKDOO
FRQIRUPWRWKHHQHUJ\UHTXLUHPHQWVRIWKH6%&
RU 6%&  DV WKH\ UHODWH WR QHZ FRQVWUXFWLRQ
RQO\
™ $EXLOGLQJWKDWXQGHUJRHV/HYHODOWHUDWLRQVLV
UHTXLUHG WR PHHW D FHUWDLQ OHYHO RI HQHUJ\
FRPSOLDQFH 7KH OHYHO RI FRPSOLDQFH GHSHQGV
RQWKHH[WHQWRIWKHDOWHUDWLRQVWDNLQJSODFH$V
/HYHODOWHUDWLRQVDUHWKRVHDOWHUDWLRQVZKHUH
FHUWDLQ EXLOGLQJ HOHPHQWV DUH UHPRYHG DQG
UHSODFHG ZLWK QHZ HOHPHQWV RU ZKHUH ROG
HOHPHQWVDUHFRYHUHGZLWKQHZHOHPHQWVWKHQ
DQ\VXFKQHZHOHPHQWLVUHTXLUHGWRPHHWWKH
DSSOLFDEOHHQHUJ\SURYLVLRQVRIWKH6%&RU
6%&  LQ WKH FDVH RI EXLOGLQJV WKDW IDOO
XQGHUWKHVFRSLQJRIWKH6%&(OHPHQWV
LQWKHEXLOGLQJWKDWDUHQRWEHLQJDIIHFWHGGRQRW
QHHG WR EH HYDOXDWHG DQG GR QRW QHHG WR
FRPSO\ZLWKWKHHQHUJ\SURYLVLRQV(VVHQWLDOO\
WKH HQWLUH EXLOGLQJ LV QRW UHTXLUHG WR PHHW WKH
HQHUJ\ SURYLVLRQV RQO\ D GHJUHH RI SRVVLEOH
LPSURYHPHQWLQWKHHQHUJ\SHUIRUPDQFHRIWKH
EXLOGLQJLVLQWHQGHGWREHDFKLHYHGE\PDNLQJ
WKH QHZ HOHPHQWV PHHW WKH 6%&  RU 6%&
 UHTXLUHPHQWV 7KH ODQJXDJH LQ WKLV
VHFWLRQ LV LQWHQGHG WR EH FRQVLVWHQW ZLWK WKH
UHTXLUHPHQWVLQWKH6%&DQG6%&IRU
DOWHUDWLRQV



6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

™ %LEOLRJUDSK\  $'$ 6WDQGDUG IRU $FFHVVLEOH 'HVLJQ

:DVKLQJWRQ '& 'HSDUWPHQW RI -XVWLFH
7KHIROORZLQJUHVRXUFHPDWHULDOVZHUH XVHGLQWKH
6HSWHPEHU
SUHSDUDWLRQRIWKHFRPPHQWDU\IRUWKLVFKDSWHU
$6&(  )ORRGUHVLVWDQFH 'HVLJQ DQG
RIWKHFRGH
&RQVWUXFWLRQ6WDQGDUG5HVWRQ9$$PHULFDQ
 &)5 3DUWV  DQG  )LQDO 5XOH 7KH
6RFLHW\RI&LYLO(QJLQHHUV
$PHULFDQV ZLWK 'LVDELOLWLHV $FW $'$
'2-  &)5 3DUW  $PHULFDQV ZLWK
$FFHVVLELOLW\*XLGHOLQHV$UFKLWHFWXUDO%DUULHUV
'LVDELOLWLHV $FW $'$ :DVKLQJWRQ '&
$FW $%$ $FFHVVLELOLW\ *XLGHOLQHV
'HSDUWPHQWRI-XVWLFH
:DVKLQJWRQ '& $UFKLWHFWXUDO DQG
*XLGHOLQHVIRU6HLVPLF5HWURILWRI([LVWLQJ%XLOGLQJV
7UDQVSRUWDWLRQ %DUULHUV &RPSOLDQFH %RDUG
%LUPLQJKDP $/ 6RXWKHUQ %XLOGLQJ &RGH
-XO\
&RQJUHVV,QWHUQDWLRQDO


6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

7$%/(6$1'),*85(62)&+$37(5
7$%/(
5$036

6/23( 0$;,0805,6(
6WHHSHUWKDQEXWQRWVWHHSHUWKDQ PP
6WHHSHUWKDQEXWQRWVWHHSHUWKDQ PP


<900 mm (<600 mm


),*85(
+(,*+72)23(1,1*)520)/225



),*85(
+(,*+72)23(1,1*)520),1,6+('*5$'(


6%&&& 

&+$37(5²$/7(5$7,216²/(9(/


),*85(
0$6215<3$5$3(7%5$&(



6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

























7KLVSDJHOHIWLQWHQWLRQDOO\EODQN

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

²$/7(5$7,216²/(9(/

VXFKDVQHZDQGH[LVWLQJVWUXFWXUDOPHPEHUV
™ *HQHUDO&RPPHQWV
JUDYLW\ORDGVODWHUDOORDGVDQGVQRZGULIWORDGV
™ 7KLV FKDSWHU SURYLGHV WKH WHFKQLFDO
7KHOHYHORILPSURYHPHQWVUHTXLUHGDVDUHVXOW
UHTXLUHPHQWV IRU WKRVH H[LVWLQJ EXLOGLQJV WKDW
RI /HYHO  DOWHUDWLRQV LV H[WHQVLYH ZKHQ
XQGHUJR/HYHODOWHUDWLRQV5HIHUHQFHLVPDGH
FRPSDUHG WR /HYHO  DOWHUDWLRQV EHFDXVH WKH
WR /HYHO  DOWHUDWLRQV DV GHVFULEHG LQ 6HFWLRQ
H[WHQWRIDOWHUDWLRQVLVPRUHGUDVWLFDQGVSDFH
 ZKLFK LQFOXGHV WKH UHFRQILJXUDWLRQ RI
UHFRQILJXUDWLRQ LV LQYROYHG 7KH OHYHO W\SLFDOO\
VSDFH,QVWDOODWLRQRIDGGLWLRQDOHTXLSPHQWWKDW
NQRZQ DV ³DOWHUDWLRQV´ LQ WKH 6%&  DQG
GLG QRW SUHYLRXVO\ H[LVW RU WKH DGGLWLRQ RU
SUHYLRXVOHJDF\EXLOGLQJFRGHVZDVGLYLGHGLQWR
HOLPLQDWLRQ RI GRRUV DQG ZLQGRZV DUH DOVR
/HYHOVDQGEHFDXVHPLQRUDOWHUDWLRQVWKDW
FRQVLGHUHG/HYHODOWHUDWLRQVDQGKHQFHDUH
GR QRW LQFOXGH VSDFH UHFRQILJXUDWLRQ DQG
FRYHUHGE\WKLVFKDSWHU
H[WHQVLYHDOWHUDWLRQVVXFKDVWKHUHORFDWLRQRI
™ 7KLV FKDSWHU VLPLODU WR RWKHU FKDSWHUV RI WKH
ZDOOVDQGSDUWLWLRQVVKRXOGEHWUHDWHGGLIIHUHQWO\
FRGHFRYHUVDOOEXLOGLQJUHODWHGVXEMHFWVVXFK
DQGZLWKGLIIHUHQWWKUHVKROGOHYHOVIRUUHTXLULQJ
DVVWUXFWXUDOPHFKDQLFDOSOXPELQJHOHFWULFDO
XSJUDGHV RU LPSURYHPHQWV WR WKH EXLOGLQJ RU
DFFHVVLELOLW\ DQG ILUH DQG OLIH VDIHW\ LVVXHV LQ
VSDFHVLQWKHEXLOGLQJ
/HYHODOWHUDWLRQV6HFWLRQVDQG
™ 3XUSRVH
DUH UHODWHG WR VFRSLQJ VSHFLDO XVH DQG
™ 7KHSXUSRVHRIWKLVFKDSWHULVWRGHWDLOUHTXLUHG
RFFXSDQF\ DQG EXLOGLQJ HOHPHQWV DQG
LPSURYHPHQWV LQ H[LVWLQJ EXLOGLQJ HOHPHQWV
PDWHULDOV ,Q WKH LQWHUHVW RI EHLQJ EULHI DQG
EXLOGLQJ VSDFHV DQG WKH EXLOGLQJ VWUXFWXUDO
DYRLGLQJWKHSUHVHQWDWLRQRIPDWHULDOVWKDWDUH
V\VWHP 7KLV FKDSWHU LV GLVWLQJXLVKHG IURP
UHSHWLWLYHLQQDWXUHLQYDULRXVFKDSWHUV6HFWLRQ
&KDSWHUV  DQG  E\ LQYROYLQJ VSDFH
UHTXLUHVWKDW/HYHODOWHUDWLRQVFRPSO\
UHFRQILJXUDWLRQ WKDW FRXOG EH XS WR DQG
QRWRQO\ZLWK&KDSWHUEXWDOVRZLWK&KDSWHU
LQFOXGLQJSHUFHQWRIWKHDUHDRIWKHEXLOGLQJ
$VVXFKDQ\DOWHUDWLRQZRUNWKDWLVFODVVLILHG
,Q FRQWUDVW /HYHO  DOWHUDWLRQV GR QRW LQYROYH
DV /HYHO  LV DVVXPHG WR LQFOXGH HYHU\WKLQJ
VSDFH UHFRQILJXUDWLRQ DQG /HYHO  DOWHUDWLRQV
UHODWHG WR /HYHO  DOWHUDWLRQV SOXV WKH
LQYROYH H[WHQVLYH VSDFH UHFRQILJXUDWLRQ
UHFRQILJXUDWLRQRIVSDFH6HFWLRQ%XLOGLQJ
H[FHHGLQJ  SHUFHQW RI WKH EXLOGLQJ DUHD
(OHPHQWVDQG0DWHULDOVFRYHUVHOHPHQWVVXFK
'HSHQGLQJRQWKHQDWXUHRIDOWHUDWLRQZRUNLWV
DV H[LVWLQJ YHUWLFDO RSHQLQJV DQG ZKHQ VXFK
ORFDWLRQ LQ WKH EXLOGLQJ DQG ZKHWKHU LW
RSHQLQJV PLJKW EH UHTXLUHG WR EH HQFORVHG
HQFRPSDVVHV RQH RU PRUH WHQDQWV
VWDLUZD\ HQFORVXUHV LQWHULRU ILQLVKHV DQG
LPSURYHPHQWVDQGXSJUDGHVFRXOGEHUHTXLUHG
JXDUGV7KHUHPDLQGHURIWKHFKDSWHULVUHODWHG
IRUWKHRSHQIORRUSHQHWUDWLRQVVSULQNOHUV\VWHP
WR ILUH SURWHFWLRQ PHDQV RI HJUHVV
RUWKHLQVWDOODWLRQRIDGGLWLRQDOPHDQVRIHJUHVV
DFFHVVLELOLW\ VWUXFWXUDO HOHFWULFDO PHFKDQLFDO
VXFK DV VWDLUV RU ILUH HVFDSHV $W WLPHV DQG
DQG SOXPELQJ SURYLVLRQV :KLOH WKH PHDQV RI
XQGHU FHUWDLQ VLWXDWLRQV WKLV FKDSWHU LV DOVR
HJUHVV 6HFWLRQ  FRYHUV VXEMHFWV VXFK DV
LQWHQGHG WR LPSURYH WKH VDIHW\ RI FHUWDLQ
WKH PLQLPXP QXPEHU RI H[LWV ILUH HVFDSH
EXLOGLQJIHDWXUHVEH\RQGWKHZRUNDUHDDQGLQ
UHTXLUHPHQWVDQGFRQVWUXFWLRQGHWDLOVFRUULGRU
RWKHU SDUWVRIWKH EXLOGLQJ ZKHUH QRDOWHUDWLRQ
RSHQLQJV DQG H[LW VLJQV WKH VWUXFWXUDO SDUW RI
ZRUNPLJKWEHWDNLQJSODFH
WKLV FKDSWHU 6HFWLRQ  DGGUHVVHV VXEMHFWV
™ $Q\ DOWHUDWLRQ ZRUN WKDW UHVXOWV LQ WKH
6(&7,21*(1(5$/ UHFRQILJXUDWLRQ RI VSDFH RU RWKHUZLVH IDOOV
XQGHU WKH FODVVLILFDWLRQ RI /HYHO  DOWHUDWLRQV
 6FRSH/HYHODOWHUDWLRQVDVGHVFULEHGLQ DVGHVFULEHGLQ6HFWLRQPXVWFRPSO\ZLWK
6HFWLRQVKDOOFRPSO\ZLWKWKHUHTXLUHPHQWVRI &KDSWHUVHH&RPPHQWDU\)LJXUH7KH
WKLVFKDSWHU H[FHSWLRQ LV LQWHQGHG WR HQFRXUDJH H[LVWLQJ
EXLOGLQJV WR LPSURYH DFFHVVLELOLW\ IRU WKH
([FHSWLRQ%XLOGLQJVLQZKLFKWKHUHFRQILJXUDWLRQ GLVDEOHG E\ DOORZLQJ DQ\ VXFK DOWHUDWLRQV
LV H[FOXVLYHO\ WKH UHVXOW RI FRPSOLDQFH ZLWK WKH ZKLFK DUH VROHO\ IRU FRPSOLDQFH ZLWK WKH
DFFHVVLELOLW\UHTXLUHPHQWVRI6HFWLRQVKDOOEH DFFHVVLELOLW\SURYLVLRQVRI6HFWLRQWRRQO\
SHUPLWWHGWRFRPSO\ZLWK&KDSWHU FRPSO\ ZLWK &KDSWHU  SURYLVLRQV DV LI QR
VSDFHUHFRQILJXUDWLRQKDVWDNHQSODFH7KLVLV

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

DQ DGYDQWDJH IRU LPSURYLQJ DFFHVVLELOLW\ LQ ™ 1HZ HOHPHQWV FRPSRQHQWV DQG VSDFHV
EXLOGLQJV EHFDXVH &KDSWHU  LV UHODWHG WR FUHDWHGDV 9DUHVXOWRI/HYHODOWHUDWLRQZRUN
DOWHUDWLRQV WKDW GR QRW HQFRPSDVV DQ\ VSDFH PXVW FRPSO\ ZLWK WKH 6%&  RU RWKHU
UHFRQILJXUDWLRQDQGDVVXFKKDVDORZHUOHYHO DSSOLFDEOHFRGHDV6HFWLRQRIWKH 6%&
RI FRPSOLDQFH UHTXLUHPHQW DQG KLJKHU  PDNHV UHIHUHQFH WR RWKHU 6DXGL %XLOGLQJ
WKUHVKROGVIRUWULJJHULQJRWKHULPSURYHPHQWV &RGHV VXFK DV WKH 6%&  6%&  DQG
™ ([DPSOH 6%&([FHSWLRQDOORZVQHZZLQGRZVWR
™ $QH[LVWLQJRIILFHEXLOGLQJGRHVQRWFRPSO\ZLWK EHDGGHGZLWKRXWFRPSO\LQJZLWK6%&OLJKW
FXUUHQW DFFHVVLELOLW\ UHTXLUHPHQWV 7KH RZQHU DQG YHQWLODWLRQ UHTXLUHPHQWV VR DV QRW WR
ZLVKHV WR PDNH WKH EXLOGLQJ FRPSOHWHO\ GLVFRXUDJH D EXLOGLQJ RZQHU IURP PDNLQJ
DFFHVVLEOHWRWKHGLVDEOHGE\LQVWDOOLQJUDPSV LPSURYHPHQWVLQWKHFXUUHQWDPRXQWRIQDWXUDO
HQODUJLQJWRLOHWURRPVDQGZLGHQLQJGRRUZD\V OLJKW DQG YHQWLODWLRQ ([FHSWLRQV  DQG  UHIHU
™ 4 :KDW LI DQ\ DGGLWLRQDO FRGH UHTXLUHPHQWV WKHXVHUWR6HFWLRQVDQGZKLFKGHWDLO
DUHWULJJHUHG" SURYLVLRQVIRUGHDGHQGFRUULGRUVDQGHOHFWULFDO
™ $$OODIIHFWHGDUHDVFDQEHUHEXLOWZLWKVLPLODU HTXLSPHQW ([FHSWLRQ  DOORZV WKH PLQLPXP
PDWHULDOVH[FHSWJODVVDWKXPDQLPSDFWDUHDV FHLOLQJ KHLJKW RI QHZO\ FUHDWHG VSDFHV WR EH
ZKLFK PXVW FRPSO\ ZLWK VDIHW\ JODVV ORZHUHGIURPWKH6%&UHTXLUHPHQWRI
UHTXLUHPHQWVVHH6HFWLRQ PPWRPPUHFRJQL]LQJWKDWHYHQWKRXJK
WKHVSDFHLVQHZO\FUHDWHGLWLVLQDQH[LVWLQJ
 $OWHUDWLRQ /HYHO  FRPSOLDQFH  ,Q EXLOGLQJ WKDW PLJKW KDYH IUDPLQJ PHPEHUV
DGGLWLRQ WR WKH UHTXLUHPHQWV RI WKLV FKDSWHU DOO SURKLELWLQJKLJKHUFHLOLQJV
ZRUNVKDOOFRPSO\ZLWKWKHUHTXLUHPHQWVRI&KDSWHU
 
™ &KDSWHUV  DQG  KDYH FDVFDGLQJ HIIHFWV E\ 6(&7,2163(&,$/86($1'
UHTXLULQJ WKDW HDFK OHYHO RI DOWHUDWLRQ PXVW 2&&83$1&<
FRPSO\ ZLWK WKH FKDSWHU IRU WKH ORZHU OHYHO RI
DOWHUDWLRQ $FFRUGLQJO\ DQ DOWHUDWLRQ SURMHFW  *HQHUDO$OWHUDWLRQRIEXLOGLQJVFODVVLILHG
WKDW LV FODVVLILHG DV /HYHO  PXVW FRPSO\ ZLWK DV VSHFLDO XVH DQG RFFXSDQF\ DV GHVFULEHG LQ WKH
&KDSWHUV  DQG  6LPLODUO\ DQ DOWHUDWLRQ 6%&  VKDOO FRPSO\ ZLWK WKH UHTXLUHPHQWV RI
SURMHFWFODVVLILHGDV/HYHOPXVWFRPSO\ZLWK 6HFWLRQDQGWKHVFRSLQJSURYLVLRQVRI&KDSWHU
&KDSWHUV   DQG  7KLV LV WR HOLPLQDWH WKH ZKHUHDSSOLFDEOH
UHSHWLWLRQRIYDULRXVUHTXLUHPHQWVIURP&KDSWHU
 LQ &KDSWHUV  DQG  DQG IURP &KDSWHU  LQ ™ 6SHFLDOXVHDQGRFFXSDQF\EXLOGLQJVGHVFULEHG
&KDSWHUDVD/HYHO  DOWHUDWLRQLQJHQHUDO LQ&KDSWHURI6%&VXFKDVFRYHUHGPDOO
LQFOXGHVYDULRXVDVSHFWVRID/HYHODOWHUDWLRQ EXLOGLQJV DQG KLJKULVH EXLOGLQJV DUH WUHDWHG
DQG D /HYHO  DOWHUDWLRQ LQ JHQHUDO LQFOXGHV WKHVDPHDVDQ\RWKHUEXLOGLQJZKHQWKHZRUN
YDULRXVDVSHFWVRI/HYHODQGDOWHUDWLRQV WDNLQJSODFHLVD/HYHODOWHUDWLRQ7KLVVHFWLRQ
™ 7KHFRGHGUDIWLQJFRPPLWWHHGHFLGHGWRPDNH VSHFLILFDOO\DQGFOHDUO\SURYLGHVWKLVLQIRUPDWLRQ
UHIHUHQFHWRWKHVHFKDSWHUVUDWKHUWKDQUHSHDW EHFDXVHDW KLJKHUOHYHOVRIDOWHUDWLRQZRUNRU
DOOVXFKSURYLVLRQVDJDLQ ZKHUH WKHUH LV D FKDQJH RI RFFXSDQF\ VRPH
VSHFLDO XVH DQG RFFXSDQF\ EXLOGLQJV DUH
 &RPSOLDQFH  $OO QHZ FRQVWUXFWLRQ UHTXLUHG WR FRPSO\ ZLWK WKH 6%&  HLWKHU
HOHPHQWV FRPSRQHQWV V\VWHPV DQG VSDFHV VKDOO FRPSOHWHO\RULQSDUWLFXODUDOWHUDWLRQDUHDVVHH
FRPSO\ZLWKWKHUHTXLUHPHQWVRIWKH6%& 6HFWLRQVDQG%\UHIHUHQFHWR6HFWLRQ
 DQG &KDSWHU  WKLV VHFWLRQ PDNHV
([FHSWLRQV LQGLUHFWUHIHUHQFHWR6HFWLRQ
 :LQGRZV PD\ EH DGGHG ZLWKRXW UHTXLULQJ 
FRPSOLDQFH ZLWK WKH OLJKW DQG YHQWLODWLRQ
UHTXLUHPHQWVRIWKH6%& 6(&7,21%8,/',1*(/(0(176
 1HZO\ LQVWDOOHG HOHFWULFDO HTXLSPHQW VKDOO $1'0$7(5,$/6
FRPSO\ZLWKWKHUHTXLUHPHQWVRI6HFWLRQ  6FRSH7KHUHTXLUHPHQWVRIWKLVVHFWLRQDUH
 7KH OHQJWK RI GHDGHQG FRUULGRUV LQ QHZO\ OLPLWHGWRZRUNDUHDVLQZKLFK/HYHODOWHUDWLRQV
FRQVWUXFWHG VSDFHV VKDOO RQO\ EH UHTXLUHG WR DUH EHLQJ SHUIRUPHG DQG VKDOO DSSO\ EH\RQG WKH
FRPSO\ZLWKWKHSURYLVLRQVRI6HFWLRQ ZRUNDUHDZKHUHVSHFLILHG
 7KH PLQLPXP FHLOLQJ KHLJKW RI WKH QHZO\
FUHDWHG KDELWDEOHDQG RFFXSLDEOH VSDFHV DQG ™ 7KLVVHFWLRQSURYLGHVWKHVFRSLQJSURYLVLRQVIRU
FRUULGRUVVKDOOEHP YHUWLFDORSHQLQJVVPRNHEDUULHUVLQWHULRUILQLVK
DQG JXDUGV E\ UHTXLULQJ WKDW WKH ZRUN DUHDV
PXVWFRPSO\ZLWKWKLVVHFWLRQDQGWKDWDWWLPHV

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

WKHUH DUH VXSSOHPHQWDU\ UHTXLUHPHQWV WKDW  (DFK IORRU OHYHO FRQVLGHUHG
DSSO\WRVSDFHVEH\RQGWKHZRUNDUHDV6XFK VHSDUDWHO\KDVDWOHDVWRQHKDOI
VXSSOHPHQWDU\ UHTXLUHPHQWV DUH IRXQG LQ RI LWV LQGLYLGXDO UHTXLUHG H[LW
6HFWLRQV   DQG  ZKHUH FDSDFLW\SURYLGHGE\DQH[LWRU
WKHH[WHQWRIFRPSOLDQFHEH\RQGWKHZRUNDUHD
H[LWV OHDGLQJ GLUHFWO\ RXW RI
LVLGHQWLILHG
WKDW OHYHO ZLWKRXW KDYLQJ WR
 9HUWLFDO RSHQLQJV  ([LVWLQJ YHUWLFDO WUDYHUVH DQRWKHU
RSHQLQJV VKDOO FRPSO\ ZLWK WKH SURYLVLRQV RI FRPPXQLFDWLQJ IORRU OHYHO RU
6HFWLRQVDQG EHH[SRVHGWRWKHVPRNHRUILUH
™ 7KH SXUSRVH RI WKLV VHFWLRQ LV WR SURYLGH VSUHDGLQJ IURP DQRWKHU
UHTXLUHPHQWV IRU YHUWLFDO RSHQLQJV LQ /HYHO  FRPPXQLFDWLQJIORRUOHYHO
DOWHUDWLRQV 6HFWLRQV  DQG  
SURYLGHWKHVHUHTXLUHPHQWV  ,Q *URXS $ RFFXSDQFLHV D PLQLPXP 
PLQXWHHQFORVXUHVKDOOEHSURYLGHGWRSURWHFW
([LVWLQJ YHUWLFDO RSHQLQJV  $OO H[LVWLQJ
DOO YHUWLFDO RSHQLQJV QRW H[FHHGLQJ WKUHH
LQWHULRU YHUWLFDO RSHQLQJV FRQQHFWLQJWZR RU PRUH
VWRULHV
IORRUVVKDOOEHHQFORVHGZLWKDSSURYHGDVVHPEOLHV
 ,Q *URXS % RFFXSDQFLHV D PLQLPXP 
KDYLQJ D ILUHUHVLVWDQFH UDWLQJ RI QRW OHVV WKDQ 
PLQXWHHQFORVXUHVKDOOEHSURYLGHGWRSURWHFW
KRXUZLWKDSSURYHGRSHQLQJSURWHFWLYHV
DOO YHUWLFDO RSHQLQJV QRW H[FHHGLQJ WKUHH
([FHSWLRQV VWRULHV 7KLV HQFORVXUH RU WKH HQFORVXUH
VSHFLILHG LQ 6HFWLRQ  VKDOO QRW EH
 :KHUH YHUWLFDO RSHQLQJ HQFORVXUH LV QRW
UHTXLUHGLQWKHIROORZLQJORFDWLRQV
UHTXLUHGE\WKH6%&RUWKH6%&

 ,QWHULRUYHUWLFDORSHQLQJVRWKHUWKDQVWDLUZD\V
 %XLOGLQJV QRW H[FHHGLQJ  P SHU
PD\EHEORFNHGDWWKHIORRUDQGFHLOLQJRIWKH
IORRU
ZRUNDUHDE\LQVWDOODWLRQRIQRWOHVVWKDQ
 %XLOGLQJV SURWHFWHG WKURXJKRXW E\ DQ
PPRIVROLGZRRGRUHTXLYDOHQWFRQVWUXFWLRQ
DSSURYHG DXWRPDWLF ILUH VSULQNOHU
 7KHHQFORVXUHVKDOOQRWEHUHTXLUHGZKHUH
V\VWHP

 &RQQHFWLQJ WKH PDLQ IORRU DQG
 ,Q *URXS ( RFFXSDQFLHVWKH HQFORVXUHVKDOO
PH]]DQLQHVRU
QRW EH UHTXLUHG IRU YHUWLFDO RSHQLQJV QRW
 $OORIWKHIROORZLQJFRQGLWLRQVDUHPHW
H[FHHGLQJ WKUHHVWRULHVZKHQ WKH EXLOGLQJLV

SURWHFWHG WKURXJKRXW E\ DQ DSSURYHG
 7KHFRPPXQLFDWLQJDUHDKDVD
DXWRPDWLFILUHVSULQNOHUV\VWHP
ORZKD]DUGRFFXSDQF\RUKDVD
 ,Q *URXS ) RFFXSDQFLHV WKH HQFORVXUHVKDOO
PRGHUDWH KD]DUG RFFXSDQF\
QRWEHUHTXLUHGLQWKHIROORZLQJORFDWLRQV
WKDWLVSURWHFWHGWKURXJKRXWE\

DQDXWRPDWLFVSULQNOHUV\VWHP
 9HUWLFDORSHQLQJVQRWH[FHHGLQJWKUHH
 7KH ORZHVW RU QH[W WR WKH
VWRULHV
ORZHVWOHYHOLVDVWUHHWIORRU
 6SHFLDO SXUSRVH RFFXSDQFLHV ZKHUH
 7KH HQWLUH DUHD LV RSHQ DQG
QHFHVVDU\IRUPDQXIDFWXULQJRSHUDWLRQV
XQREVWUXFWHGLQDPDQQHUVXFK
DQGGLUHFWDFFHVVLVSURYLGHGWRDWOHDVW
WKDWLWPD\EHDVVXPHGWKDWD
RQHSURWHFWHGVWDLUZD\
ILUH LQ DQ\ SDUW RI WKH
 %XLOGLQJV SURWHFWHG WKURXJKRXW E\ DQ
LQWHUFRQQHFWHG VSDFHV ZLOO EH
DSSURYHGDXWRPDWLFVSULQNOHUV\VWHP
UHDGLO\ REYLRXV WR DOO RI WKH

RFFXSDQWV
 ,Q*URXS+RFFXSDQFLHVWKHHQFORVXUHVKDOO
 ([LW FDSDFLW\ LV VXIILFLHQW WR
QRW EH UHTXLUHG IRU YHUWLFDO RSHQLQJV QRW
SURYLGHHJUHVVVLPXOWDQHRXVO\
H[FHHGLQJ WKUHH VWRULHV ZKHUH QHFHVVDU\ IRU
IRU DOO RFFXSDQWV RI DOO OHYHOV
PDQXIDFWXULQJ RSHUDWLRQV DQG HYHU\ IORRU
E\FRQVLGHULQJDOODUHDVWREHD
OHYHOKDVGLUHFWDFFHVVWRDWOHDVWWZRUHPRWH
VLQJOH IORRU DUHD IRU WKH
HQFORVHGVWDLUZD\VRURWKHUDSSURYHGH[LWV
GHWHUPLQDWLRQRIUHTXLUHGH[LW
 ,Q *URXS 0 RFFXSDQFLHV D PLQLPXP 
FDSDFLW\
PLQXWHHQFORVXUHVKDOOEHSURYLGHGWRSURWHFW
DOO YHUWLFDO RSHQLQJV QRW H[FHHGLQJ WKUHH

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

VWRULHV 7KLV HQFORVXUH RU WKH HQFORVXUH VOHHSLQJURRPDERYHWKHVHFRQGIORRULV

VSHFLILHG LQ 6HFWLRQ  VKDOO QRW EH SURYLGHG ZLWK GLUHFW DFFHVV WR D ILUH
UHTXLUHGLQWKHIROORZLQJORFDWLRQV HVFDSH RU RWKHU DSSURYHG VHFRQG H[LW
E\PHDQVRIDQDSSURYHGH[WHULRUGRRU
 2SHQLQJV FRQQHFWLQJ RQO\ WZR IORRU RUZLQGRZ KDYLQJ DVLOOKHLJKWRI QRW
OHYHOV JUHDWHUWKDQPDQGWKHEXLOGLQJLV
 2FFXSDQFLHV SURWHFWHG WKURXJKRXW E\ SURWHFWHG WKURXJKRXW E\ DQ DXWRPDWLF
DQ DSSURYHG DXWRPDWLF VSULQNOHU ILUH DODUP V\VWHP FRPSO\LQJ ZLWK
V\VWHP 6HFWLRQ
 
,Q*URXS5RFFXSDQFLHVWKHHQFORVXUHVKDOO 2QHDQGWZRIDPLO\GZHOOLQJV
QRW EH UHTXLUHG IRU YHUWLFDO RSHQLQJV QRW *URXS 6 RFFXSDQFLHV ZKHUH FRQQHFWLQJ QRW
H[FHHGLQJ WKUHH VWRULHV LQ WKH IROORZLQJ PRUH WKDQ WZR IORRU OHYHOV RU ZKHUH
ORFDWLRQV FRQQHFWLQJ QRW PRUH WKDQ WKUHH IORRU OHYHOV
DQGWKHVWUXFWXUHLVHTXLSSHGWKURXJKRXWZLWK
%XLOGLQJV SURWHFWHG WKURXJKRXW E\ DQ DQDSSURYHGDXWRPDWLFVSULQNOHUV\VWHP
DSSURYHGDXWRPDWLFVSULQNOHUV\VWHP *URXS6RFFXSDQFLHVZKHUHYHUWLFDORSHQLQJ
%XLOGLQJV ZLWK OHVV WKDQ  GZHOOLQJ SURWHFWLRQ LV QRW UHTXLUHG IRU RSHQ SDUNLQJ
XQLWV RU VOHHSLQJ XQLWV ZKHUH HYHU\ JDUDJHVDQGUDPSV
VOHHSLQJURRPDERYHWKHVHFRQGIORRULV ™ $OOH[LVWLQJYHUWLFDORSHQLQJVFRQQHFWLQJWZRRU
SURYLGHG ZLWK GLUHFW DFFHVV WR D ILUH PRUHIORRUVPXVWEHHQFORVHGZLWKDVVHPEOLHV
HVFDSH RU RWKHU DSSURYHG VHFRQG H[LW RIKRXUILUHUHVLVWDQFHUDWHGFRQVWUXFWLRQDQG
E\PHDQVRIDQDSSURYHGH[WHULRUGRRU DSSURYHGSURWHFWHGRSHQLQJV(YHQZLWKRXWLWV
RUZLQGRZ KDYLQJ DVLOOKHLJKWRI QRW  H[FHSWLRQV WKLV SURYLVLRQ LV PRUH UHOD[HG
JUHDWHUWKDQPDQGZKHUH WKDQWKH6%&VKDIWHQFORVXUHUHTXLUHPHQWV
 WKDW UHTXLUH KRXU ILUHUHVLVWDQFH UDWHG
 $Q\ H[LW DFFHVV FRUULGRU HQFORVXUHVIRUEXLOGLQJVIRXUVWRULHVRUPRUHLQ
H[FHHGLQJPLQOHQJWKWKDW KHLJKW$GGLWLRQDOO\WKHXVHUVKRXOGUHPHPEHU
WKHVFRSLQJSURYLVLRQVRI6HFWLRQZKLFK
VHUYHV WZR PHDQV RI HJUHVV
LQGLFDWHV WKDW WKH HQFORVXUH UHTXLUHPHQWV
RQHRIZKLFKLVDQXQSURWHFWHG WULJJHUHGXQGHU/HYHODOWHUDWLRQVDSSO\RQO\WR
YHUWLFDORSHQLQJVKDOOKDYHDW ZRUNDUHDV$VVXFKLIWKHDOWHUDWLRQLVRQWKH
OHDVW RQH RI WKH PHDQV RI ILUVW IORRU RI D PXOWLSOHVWRU\ EXLOGLQJ DQG WKH
HJUHVV VHSDUDWHG IURP WKH YHUWLFDORSHQLQJLVLQWKHZRUNDUHDWKHQRQO\
YHUWLFDO RSHQLQJ E\ D KRXU WKH SRUWLRQ RI WKH YHUWLFDO RSHQLQJ LQ WKH ILUVW
ILUHEDUULHUDQG IORRUQRWWKHHQWLUHRSHQLQJIURPWKHERWWRPWR
 7KH EXLOGLQJ LV SURWHFWHG WRSIORRULVUHTXLUHGWREHHQFORVHG
WKURXJKRXW E\ DQ DXWRPDWLF ™ ([FHSWLRQ  LVSURYLGHGVRWKDWWKH SURYLVLRQV
ILUHDODUPV\VWHPLQVWDOOHGDQG RIWKHFRGHLQUHODWLRQWRYHUWLFDORSHQLQJVDUH
QRWPRUHUHVWULFWLYHWKDQWKRVHRIWKH6%&
VXSHUYLVHGLQDFFRUGDQFHZLWK
DQG6%&7KH6%&UHJXODWHVYHUWLFDO
WKH6%& RSHQLQJVLQH[LVWLQJEXLOGLQJVLQ6HFWLRQ
 RI WKDW FRGH 7KLV VHFWLRQ DOORZV YHUWLFDO
,Q *URXS 5 RFFXSDQFLHV D PLQLPXP  RSHQLQJV ZLWKRXW HQFORVXUHV ZKHUH WKH\
PLQXWHHQFORVXUHVKDOOEHSURYLGHGWRSURWHFW FRQQHFW RQO\ WZR VWRULHV LQ RWKHU WKDQ
DOO YHUWLFDO RSHQLQJV QRW H[FHHGLQJ WKUHH KD]DUGRXVRULQVWLWXWLRQDORFFXSDQFLHV
VWRULHV 7KLV HQFORVXUH RU WKH HQFORVXUH ™ ([FHSWLRQDOORZVYHUWLFDORSHQLQJVRWKHUWKDQ
VSHFLILHG LQ 6HFWLRQ  VKDOO QRW EH VWDLUZD\VWREHEORFNHGE\VROLGZRRGRIPP
UHTXLUHGLQWKHIROORZLQJORFDWLRQV LQWKLFNQHVVRUHTXLYDOHQWFRQVWUXFWLRQ7KH
PPXVHGKHUHLVWKHQRPLQDOWKLFNQHVVRIWKH
VROLGZRRGPHPEHUV
9HUWLFDO RSHQLQJV QRW H[FHHGLQJ WZR
™ ([FHSWLRQLVDUHSHWLWLRQRI6%&6HFWLRQ
VWRULHV ZLWK QRW PRUH WKDQ IRXU  ([FHSWLRQ  SURYLGHV ILYH
GZHOOLQJXQLWVSHUIORRU FRQGLWLRQVWKDWLIDOODUHPHWVLPXOWDQHRXVO\GR
%XLOGLQJV SURWHFWHG WKURXJKRXW E\ DQ QRWUHTXLUHWKHHQFORVXUHRIYHUWLFDORSHQLQJV
DSSURYHGDXWRPDWLFVSULQNOHUV\VWHP 7KH FRPELQDWLRQ RI WKHVH ILYH FRQGLWLRQV LV
%XLOGLQJV ZLWK QRW PRUH WKDQ IRXU HTXLYDOHQWWRDVLWXDWLRQZKHUHWKHRFFXSDQF\
GZHOOLQJ XQLWV SHU IORRU ZKHUH HYHU\ LV D ORZKD]DUG RFFXSDQF\ ILUH VSULQNOHUV DUH

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

SUHVHQWDQGWKHUHLVVXIILFLHQWPHDQVRIHJUHVV ™ 4 :LOO WKH HVFDODWRU DQG WKH HOHYDWRU EH

FDSDFLW\ UHTXLUHG WR EH SURWHFWHG RU HQFORVHG LQ
™ ([FHSWLRQVWKURXJKDQGDOORZHLWKHUD DFFRUGDQFHZLWKWKH6%&"
PLQXWH SURWHFWLRQ IRU YHUWLFDO RSHQLQJV LQ ™ $ 6LQFH WKH ZRUN DUHD RQ WKH WKLUG IORRU
OLHX RI KRXU SURWHFWLRQ RU DOORZ WKH YHUWLFDO H[FHHGVSHUFHQWRIWKHDUHDRIWKHWKLUGIORRU
RSHQLQJ WR UHPDLQ RSHQ IRU EXLOGLQJV WKUHH ERWK WKH HOHYDWRU DQG WKH HVFDODWRU PXVW EH
VWRULHV RU OHVV LQ KHLJKW ZLWK FHUWDLQ IHDWXUHV SURWHFWHGHYHQWKRXJKWKHHOHYDWRULVRXWVLGHRI
VXFKDVVSULQNOHUVRUPXOWLSOHUHPRWHPHDQVRI WKHZRUNDUHD7KHSURWHFWLRQLVQHHGHGRQWKH
HJUHVV WKLUG IORRU RQO\ VHH 6HFWLRQ  DQG
™ ([FHSWLRQV  DQG  DOORZ H[LVWLQJ YHUWLFDO &RPPHQWDU\)LJXUH
RSHQLQJV WR UHPDLQ RSHQ LQ VLQJOHIDPLO\
GXSOH[ EXLOGLQJV DQG RSHQ SDUNLQJ JDUDJHV 6XSSOHPHQWDO VWDLUZD\ HQFORVXUH
7KH6%&DQG6%&H[FHSWLRQLVOLVWHG UHTXLUHPHQWV:KHUHWKHZRUNDUHDRQDQ\IORRU
XQGHU ([FHSWLRQ  $V FDQ EH VHHQ WKH H[FHHGVSHUFHQWRIWKDWIORRUDUHDVWDLUZD\VWKDW
H[FHSWLRQV ZLWKLQ WKH 6%&  DQG WKH FRGH DUHSDUWRIWKHPHDQVRIHJUHVVVHUYLQJWKHZRUNDUHD
DOORZ IRU QXPHURXV PHWKRGV RI GHDOLQJ ZLWK VKDOODWDPLQLPXPEHHQFORVHGZLWKVPRNHWLJKW
YHUWLFDO RSHQLQJV VR WKDW WKH EXLOGLQJ RZQHUV FRQVWUXFWLRQRQWKHKLJKHVWZRUNDUHDIORRUDQGDOO
DQGGHVLJQHUVKDYHPDQ\RSWLRQVWRSURYLGHD IORRUVEHORZ
PLQLPXP OHYHO RI SURWHFWLRQ LQWHQGHG E\ WKH
FRGHV ([FHSWLRQ  :KHUH VWDLUZD\ HQFORVXUH LV QRW
UHTXLUHGE\WKH6%&RUWKH6%&
6XSSOHPHQWDO VKDIW DQG IORRU RSHQLQJ
HQFORVXUHUHTXLUHPHQWV:KHUHWKHZRUNDUHDRQ ™ 6WDLUZD\V VHUYLQJ DV SDUW RI WKH PHDQVRI
DQ\IORRUH[FHHGVSHUFHQWRIWKDWIORRUDUHDWKH HJUHVV V\VWHP PXVW EH HQFORVHG ZKHUH
SRVVLEOH WR LQFUHDVH WKH GHJUHH RI SURWHFWLRQ
HQFORVXUHUHTXLUHPHQWVRI6HFWLRQVKDOODSSO\
IRU EXLOGLQJ RFFXSDQWV 7KH WULJJHULQJ
WRYHUWLFDORSHQLQJVRWKHUWKDQVWDLUZD\VWKURXJKRXW PHFKDQLVPLQWKLVVHFWLRQLVWKHSHUFHQWDJHRI
WKHIORRU WKH ZRUN DUHD RQ DQ\ JLYHQ IORRU ,I WKH ZRUN
([FHSWLRQ  9HUWLFDO RSHQLQJV ORFDWHG LQ WHQDQW DUHD H[FHHGV  SHUFHQW RI WKH IORRU DUHD RQ
VSDFHVWKDWDUHHQWLUHO\RXWVLGHWKHZRUNDUHD DQ\ IORRU WKHQ VWDLUZD\V WKDW DUH SDUW RI WKH
PHDQVRIHJUHVVDQGVHUYHWKDWZRUNDUHDPXVW
™ 8QHQFORVHGYHUWLFDORSHQLQJVDQGVKDIWVRWKHU EH HQFORVHG HYHQ WKRXJK WKH VWDLUZD\V PD\
WKDQVWDLUZD\VWKDWZRXOGW\SLFDOO\EHUHTXLUHG QRWEHORFDWHGLQWKHZRUNDUHD7KLVSURYLVLRQ
WREHHQFORVHGE\WKH6%&DUHUHTXLUHGWR FRXOG DIIHFW VHYHUDO VWDLUZD\V DOO RI ZKLFK
EHHQFORVHGWKURXJKRXWDIORRUZKHUHWKHZRUN PLJKWEHORFDWHGRXWVLGHRIWKHSURSRVHGZRUN
DUHD RQ WKDW IORRU H[FHHGV  SHUFHQW RI WKH DUHD )RU H[DPSOH D PXOWLSOHVWRU\ EXLOGLQJ
IORRU DUHD 6WDLUZD\V DUH QRW LQFOXGHG KHUH FRQWDLQVWKUHHUHTXLUHGVWDLUZD\VDOO RIZKLFK
EHFDXVH WKH\ DUH VSHFLILFDOO\ DGGUHVVHG LQ DUH XQHQFORVHG 7KH ZRUN DUHD RQ DQ XSSHU
6HFWLRQ  7KLV LV WKH ILUVW RI WKH IORRUWKDWH[FHHGVSHUFHQWRIWKDWVWRU\DUHD
VXSSOHPHQWDO UHTXLUHPHQWV IRU YHUWLFDO WULJJHUVWKHUHTXLUHPHQWIRUWKHHQFORVXUHRIDOO
HQFORVXUHVWRZKLFKWKHFRGHXVHULVUHIHUUHGLQ WKUHHVWDLUZD\VLIWKH\HDFKVHUYHDVRQHRIWKH
6HFWLRQ  7KH SURSRUWLRQDOLW\ SKLORVRSK\ H[LWV IRU WKDW ZRUN DUHD 7KH HQFORVXUH QHHG
RIWKHFRGHLVDSSOLHGKHUHDVLWLVEHOLHYHGWKDW RQO\EHVPRNHWLJKWDQGQHHGQRWSURYLGHDQ\
DZRUNDUHDH[WHQGLQJWRPRUHWKDQSHUFHQW ILUHUHVLVWDQFHUDWLQJ
RI WKH IORRU DUHD RI D VWRU\ LV ODUJH HQRXJK WR ™ DQG WKH RSHQLQJV LQWR VXFK D VPRNHWLJKW
WULJJHU DGGLWLRQDO YHUWLFDO RSHQLQJV RWKHU WKDQ HQFORVXUH QHHG QRW EH SURWHFWHG ZLWK ILUH
VWDLUZD\V WR EH HQFORVHG $V WKH XQGHUWDNLQJ UHVLVWDQW DVVHPEOLHV RQO\ VPRNHSURWHFWHG
RI VXFK ZRUN LQ WHQDQW VSDFHV ZKLFK DUH DVVHPEOLHV 7KH H[WHQW RI WKH HQFORVXUH LV
FRPSOHWHO\RXWVLGHRIWKHZRUNDUHDDQGDUHQRW VSHFLILHGWREHIURPWKHIORRUDWZKLFKWKHZRUN
ZLWKLQ WKH VFRSH RI WKH RULJLQDOO\ SURSRVHG DUHDV KDYH WULJJHUHG WKLV UHTXLUHPHQW DQG DOO
DOWHUDWLRQ LV GLVUXSWLYH DQG DQ XQDFFHSWDEOH IORRUVEHORZLW7KHH[FHSWLRQLVDUHPLQGHUWKDW
SUDFWLFH WKH H[FHSWLRQ HOLPLQDWHV WKLV VWDLUZD\V QRW UHTXLUHG WR EH HQFORVHG E\ WKH
UHTXLUHPHQWLQVXFKWHQDQWVSDFHV 6%&  RU 6%&  DUH QRW DIIHFWHG E\ WKLV
™ ([DPSOH VHFWLRQ
™ $Q H[LVWLQJ IRXUVWRU\ UHWDLO EXLOGLQJ LV EHLQJ
DOWHUHGRQWKHWKLUGIORRU7KHDOWHUDWLRQVLQYROYH  6PRNH FRPSDUWPHQWV  ,Q *URXS ,
WKHUHFRQILJXUDWLRQRIVSDFHLQDERXWSHUFHQW RFFXSDQFLHVZKHUHWKHZRUNDUHDLVRQDVWRU\XVHG
RI WKH WKLUG IORRU 7KHUH DUH WZR HQFORVHG IRU VOHHSLQJURRPVIRU PRUHWKDQ  SDWLHQWVWKH
VWDLUZD\V DQ RSHQ HVFDODWRU DQG DQ HOHYDWRU VWRU\ VKDOO EH GLYLGHG LQWR QRW OHVV WKDQ WZR
ZLWKRXW SURWHFWHG HQFORVXUHV 7KH EXLOGLQJ LV FRPSDUWPHQWVE\VPRNHEDUULHUZDOOVLQDFFRUGDQFH
QRWVSULQNOHUHG

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

ZLWK6HFWLRQRI6%&DVUHTXLUHGIRUQHZ H[FHHGVSHUFHQWRIWKHIORRUDUHD6HFWLRQ
FRQVWUXFWLRQ VKDOO DOVR DSSO\ WR WKH LQWHULRU ILQLVK LQ H[LWV DQG
™ 7KH VPRNH FRPSDUWPHQWDWLRQ DQG UHODWHG
FRUULGRUV VHUYLQJ WKH ZRUN DUHD WKURXJKRXW WKH
VPRNH EDUULHU SURYLVLRQV LQ DOWHUDWLRQV IORRU
FODVVLILHG DV /HYHO  DSSO\ RQO\ WR *URXS , ([FHSWLRQ,QWHULRUILQLVKZLWKLQWHQDQWVSDFHVWKDW
RFFXSDQFLHV VXFK DV KRVSLWDOV QXUVLQJ DUHHQWLUHO\RXWVLGHWKHZRUNDUHD
KRPHV PHQWDO KRVSLWDOV DQG GHWR[LILFDWLRQ
IDFLOLWLHV,QVXFKIDFLOLWLHVWKLVVHFWLRQUHTXLUHV ™ 7KH LQWHULRU ILQLVK UHTXLUHPHQWV GLVFXVVHG LQ
WKDW D VWRU\ XVHG IRU VOHHSLQJ URRPV IRU PRUH 6HFWLRQ  DUH DOVR DSSOLFDEOH LQ FRUULGRUV
WKDQ  SDWLHQWV EH GLYLGHG LQWR DW OHDVW WZR DQGH[LWVWKDWDUHRXWVLGHRIWKHZRUNDUHDEXW
FRPSDUWPHQWV E\ WKH XVH RI VPRNH EDUULHUV VHUYHWKDWVDPHZRUNDUHDLIWKHZRUNDUHDRQ
7KHVHFWLRQWKHQUHIHUHQFHV6HFWLRQIRU DQ\IORRUH[FHHGVSHUFHQWRIWKHIORRUDUHD
VPRNH FRPSDUWPHQW VL]H DQG RWKHU UHODWHG DW WKDW OHYHO 6LPLODU WR RWKHU VXSSOHPHQWDO
OLPLWDWLRQV 0RUH VSHFLILFDOO\ QR VXFK UHTXLUHPHQWV WKLV H[WHQGHG DUHD RI FRGH
FRPSDUWPHQW FDQ EH ODUJHU WKDQ  P IRU DSSOLFDWLRQLVQRWUHTXLUHGLQWHQDQWVSDFHVWKDW
*URXS,&RQGLWLRQDQGPIRU*URXS DUHHQWLUHO\RXWVLGHRIWKHZRUNDUHD
, &RQGLWLRQ  5HDOL]LQJ WKDW WKHVH
FRPSDUWPHQWV FRXOG EH YHU\ ORQJ DQG QDUURZ
 *XDUGV  7KH UHTXLUHPHQWV RI 6HFWLRQV
VSDFHV WKH WUDYHO GLVWDQFH IURP DQ\ SRLQW WR DQGVKDOODSSO\LQDOOZRUNDUHDV
UHDFKDGRRULQWKHVPRNHEDUULHULVOLPLWHGWR ™ 7KLV LV WKH FKDUJLQJ SDUDJUDSK IRU JXDUG
 P 7KH WULJJHU XVHG WR GHWHUPLQH ZKHQ D UHTXLUHPHQWV 7KH GHWDLOHG UHTXLUHPHQWV DUH
VHFRQG FRPSDUWPHQW LV UHTXLUHG GLIIHUV IURP JLYHQLQ6HFWLRQVDQG
WKH 6%& 7KH 6%&  UHTXLUHV
FRPSDUWPHQWDWLRQ LQ DOO VOHHSLQJ DUHDV 0LQLPXPUHTXLUHPHQW(YHU\SRUWLRQRI
UHJDUGOHVV RI RFFXSDQW ORDG DQG LQ QRQ DIORRUVXFKDVDEDOFRQ\RUDORDGLQJGRFNWKDWLV
VOHHSLQJDUHDVZLWKDQRFFXSDQWORDGRIRU PRUHWKDQPPDERYHWKHIORRURUJUDGHEHORZ
PRUH VHH FRPPHQWDU\ 6%&  6HFWLRQ DQGLVQRWSURYLGHGZLWKJXDUGVRUWKRVHLQZKLFK
 WKH H[LVWLQJ JXDUGV DUH MXGJHG WR EH LQ GDQJHU RI
 ,QWHULRUILQLVK7KHLQWHULRUILQLVKRIZDOOV FROODSVLQJVKDOOEHSURYLGHGZLWKJXDUGV
DQGFHLOLQJVLQH[LWVDQGFRUULGRUVLQDQ\ZRUNDUHD ™ 7RUHGXFHWKHSRWHQWLDORIDQDFFLGHQWDOIDOOWKH
VKDOOFRPSO\ZLWKWKHUHTXLUHPHQWVRIWKH6%& 6%&UHTXLUHVJXDUGVZKHUHRSHQVLGHVRI
ZDONLQJ VXUIDFHV PH]]DQLQHV VWDLUZD\V
([FHSWLRQ  ([LVWLQJ LQWHULRU ILQLVK PDWHULDOV WKDW UDPSV ODQGLQJV DQG RWKHU VLPLODU DUHDV DUH
GRQRWFRPSO\ZLWKWKHLQWHULRUILQLVKUHTXLUHPHQWV ORFDWHG PRUHWKDQ PPDERYHWKHIORRURU
RIWKH6%&VKDOOEHSHUPLWWHGWREHWUHDWHGZLWK JUDGHEHORZ7KHFRGHLQWKLVVHFWLRQXVHVWKH
DQ DSSURYHG ILUHUHWDUGDQW FRDWLQJ LQ DFFRUGDQFH VDPHFULWHULDWRUHTXLUHQHZJXDUGVZKHUHQRQH
ZLWKWKHPDQXIDFWXUHU¶VLQVWUXFWLRQVWRDFKLHYHWKH H[LVWHG EHIRUH RU WR UHTXLUH WKDW GDQJHURXV
UHTXLUHGUDWLQJ JXDUGV EH UHSODFHG 7KLV UHTXLUHPHQW LV
DSSOLFDEOHRQO\LQWKHZRUNDUHDVDQGGRHVQRW
™ 7KHLQWHULRUILQLVKRIFRUULGRUDQGH[LWZDOOVDQG FRQWDLQ VXSSOHPHQWDU\ SURYLVLRQV
FHLOLQJV LQ ZRUN DUHDV PXVW PHHW WKH IODPH 5HSODFHPHQW RI H[LVWLQJ JXDUGV LV UHTXLUHG LI
VSUHDGDQGVPRNHGHYHORSPHQWOLPLWDWLRQVDQG WKH\DUHMXGJHGWREH LQGDQJHURIFROODSVLQJ
UHTXLUHPHQWVRIWKH 6%& ³&RUULGRUV´DQG 7KLV VHQWHQFH PDNHV LW FOHDU WKDW WKH
³([LWV´DUHGHILQHGLQ6%&6HFWLRQDQG UHSODFHPHQW RI JXDUGV LV WULJJHUHG LI DQ\RQH
IODPHVSUHDG DQG VPRNHGHYHORSHG LQFOXGLQJ WKH RZQHU GHVLJQHU RU EXLOGLQJ
FODVVLILFDWLRQV DUH GHWHUPLQHG IURP 6%&  RIILFLDO MXGJHV WKH JXDUG WR EH LQ GDQJHU RI
7DEOHDQGEDVHGRQ$670(7REH FROODSVLQJ,WQHHGVWREHVWUHVVHGWKRXJKWKDW
DEOH WR PDLQWDLQ VRPH LQWHULRU ILQLVK PDWHULDOV JXDUGVWKDWFRXOGSRWHQWLDOO\FROODSVHRUFRXOG
WKDW GR QRW FRPSO\ ZLWK WKH IODPHVSUHDG DQG EH FRQVLGHUHG XQVDIH DV GHILQHG LQ 6HFWLRQ
VPRNHGHYHORSPHQWUHTXLUHPHQWVRIWKHFRGH DUHUHTXLUHGWREHUHSODFHGRQWKHEDVLVRI
WKH H[FHSWLRQ SURYLGHV WKH RSWLRQ RI DYDLODEOH 6HFWLRQZKHWKHUVXFKJXDUGVDUHLQWKH
WHFKQRORJ\ IRU WKH XVH RI ILUHUHWDUGDQW ZRUNDUHDRUQRW6HFWLRQRIWKH6%&
WUHDWPHQW RI VXFK VXUIDFHV DV ORQJ DV WKH DQG6HFWLRQRIWKH6%&KDYHWKHVDPH
EXLOGLQJ RIILFLDO DSSURYHV WKH FRDWLQJ DQG LW LV HIIHFW DQG FRXOG UHTXLUH WKH UHSODFHPHQW RI
DSSOLHGLQDFFRUGDQFHZLWKWKHPDQXIDFWXUHU¶V JXDUGV DQ\ZKHUH LQ WKH EXLOGLQJ HYHQ LI QR
LQVWUXFWLRQVWRDFKLHYHWKHUHTXLUHGUDWLQJ DOWHUDWLRQVDUHSODQQHG
6XSSOHPHQWDO LQWHULRU ILQLVK ™ :KHUH WKLV VHFWLRQ WULJJHUV WKH LQVWDOODWLRQ RI
UHTXLUHPHQWV:KHUHWKHZRUNDUHDRQDQ\IORRU QHZ JXDUGV RU WKH UHSODFHPHQW RI H[LVWLQJ
JXDUGV WKHQHZ JXDUGV PXVWFRPSO\ZLWKWKH

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

6%&IRUKHLJKWVSDFLQJEHWZHHQEDOXVWHUV UDWHG DVVHPEOLHV DQG VPRNHUHVLVWLYH DVVHPEOLHV

DQGVWUXFWXUDOVWUHQJWKVHH6%&6HFWLRQV FRQGLWLRQV RI RFFXSDQF\ PHDQVRIHJUHVV
DQG FRQGLWLRQV ILUH FRGH GHILFLHQFLHV DSSURYHG
™ ([DPSOH PRGLILFDWLRQV RU DSSURYHG DOWHUQDWLYH PDWHULDOV
™ $QH[LVWLQJUHVWDXUDQWKDVDQHOHYDWHGSODWIRUP
GHVLJQDQGPHWKRGVRIFRQVWUXFWLRQDQGHTXLSPHQW
IRUSHUIRUPDQFHVDQHOHYDWHGGLQLQJDUHDDQG
DQ RXWVLGH GLQLQJ GHFN DOO RI ZKLFK UHTXLUH DSSO\LQJWRWKHEXLOGLQJWKDWLPSDFWUHTXLUHGILUH
JXDUGV LQ DFFRUGDQFH ZLWK WKH 6%&  7KH UHVLVWDQFH UDWLQJV VKDOO EH LGHQWLILHG LQ WKH
SHUIRUPDQFH DUHD KDV QR JXDUGV DQG WKH HYDOXDWLRQUHSRUWVVXEPLWWHG
HOHYDWHG GLQLQJ DUHD KDV H[LVWLQJ JXDUGV WKDW ™ 7KLV VHFWLRQ SURYLGHV DOORZDQFHV LQ ILUH
DUH LQ DFFHSWDEOH SK\VLFDO FRQGLWLRQ EXW WKH UHVLVWDQFHUDWLQJUHTXLUHPHQWVZKHUHDEXLOGLQJ
VSDFLQJ EHWZHHQ WKH UDLOV LV  PP 7KH LV HTXLSSHG WKURXJKRXW ZLWK DQ DXWRPDWLF
RXWVLGH GLQLQJ GHFN KDV JXDUGV WKDW DUH VSULQNOHU V\VWHP 7KLV LQVWDOODWLRQ FRXOG EH
GHWHULRUDWHGDQGPLJKWFROODSVHXQGHUDSSOLHG UHODWHG WR DQ DOWHUDWLRQ RU FRPSOLDQFH ZLWK
ORDGV 7KH RZQHU SODQV WR PDNH VRPH UHWURDFWLYH FRGH UHTXLUHPHQWV 7KHVH
UHDUUDQJHPHQWV RI WKH NLWFKHQ WRLOHWV DQG WKH UHGXFWLRQVDUHDOORZHGWR EHHTXLYDOHQWWRWKH
HOHYDWHGGLQLQJGHFNZKLFKDUHDOOLQWKHVDPH 6%&  $ FRQFHUQ ZLWK VXFK DOORZDQFHV LV
DUHD KRZ WR HQVXUH WKDW VXFK UHGXFWLRQV LQ ILUH
™ 4 :KDW UHTXLUHPHQWV UHODWHG WR JXDUGV DUH UHVLVWDQFHGRQRWUHVXOWLQDQRYHUDOOUHGXFWLRQ
DSSOLFDEOH" RIWKHH[LVWLQJOHYHOVRISURWHFWLRQ
™ $7KHJXDUGVIRUWKHHOHYDWHGGLQLQJDUHDGR ™ 7KLV VHFWLRQ SURYLGHV D SURFHVV WR UHYLHZ WKH
QRW UHTXLUH DQ\ XSJUDGLQJ DV WKH\ DUH LQ UHTXLUHG OHYHOV RI SURWHFWLRQ ZLWK D VSULQNOHU
DFFHSWDEOHSK\VLFDOVKDSH V\VWHPDVRSSRVHGWRZLWKRXW7KHSURFHVVLV
™ $  7KH HOHYDWHG SHUIRUPDQFH DUHD DQG WKH WKDW RQFH DQ H[LVWLQJ EXLOGLQJ LV VSULQNOHUHG
RXWVLGHGLQLQJGHFNDUHQRWZLWKLQWKHZRUNDUHD WKURXJKRXW DQG PHHWV RWKHU DSSOLFDEOH
DQGDVVXFKDUHQRWFRYHUHGE\WKLVVHFWLRQRI UHTXLUHPHQWV RI WKH 6%&  SODQV
WKHFRGH%RWKRIWKHVHDUHDVKRZHYHUFRXOG LQYHVWLJDWLRQDQGHYDOXDWLRQUHSRUWVDQGRWKHU
PRVW OLNHO\ EH FRQVLGHUHG XQVDIH XQGHU WKH GDWDFDQEHVXEPLWWHGVHHNLQJDSSURYDORIWKH
SURYLVLRQV RI 6HFWLRQ  DQG DFFRUGLQJO\ EXLOGLQJ RIILFLDO IRU WKH DVVLJQPHQW RI WKH QHZ
JXDUGV LQ IXOO FRPSOLDQFH ZLWK WKH 6%&  ILUHUHVLVWDQFH UDWLQJV ZKLFK PLJKW UHVXOW LQ D
PXVWEHLQVWDOOHGLQERWKORFDWLRQV UHGXFWLRQRUSRWHQWLDOO\DQLQFUHDVH
'HVLJQ  :KHUH WKHUH DUH QR JXDUGV RU ™ 7KH SURYLVLRQV UHTXLUH WKDW WKH HYDOXDWLRQ
ZKHUHH[LVWLQJJXDUGVPXVWEHUHSODFHGWKHJXDUGV UHSRUWV LGHQWLI\ WKH IROORZLQJ DQ\ VSHFLDO
FRQVWUXFWLRQIHDWXUHVFRQGLWLRQVRIRFFXSDQF\
VKDOOEHGHVLJQHGDQGLQVWDOOHGLQDFFRUGDQFHZLWK
DSSURYHGPRGLILFDWLRQVRUDOWHUQDWLYHPDWHULDOV
WKH6%& GHVLJQ DQG PHWKRGV RI FRQVWUXFWLRQ DQG
™ 7KH VWUHQJWK ORDGFDUU\LQJ FDSDFLW\ DQG HTXLSPHQWDSSO\LQJWRWKHEXLOGLQJWKDWLPSDFW
PD[LPXPRSHQLQJUHTXLUHPHQWVIRUJXDUGVDUH UHTXLUHG ILUHUHVLVWDQFH UDWLQJV 7KLV LV WR
JLYHQE\ WKH 6%&7KLV LVFRQVLVWHQWZLWK HQVXUH VSHFLDO FRQGLWLRQV DUH LGHQWLILHG WKDW
WKH UHTXLUHPHQWV RI 6HFWLRQ  IRU QHZ PD\ SUHYHQW D UHGXFWLRQ LQ ILUHUHVLVWDQFH
EXLOGLQJPDWHULDOVDQGHTXLSPHQW UDWLQJV
 )LUHUHVLVWDQFHUDWLQJV:KHUHDSSURYHG 
E\ WKH EXLOGLQJ RIILFLDO EXLOGLQJV ZKHUH DQ
6(&7,21),5(3527(&7,21
DXWRPDWLFVSULQNOHUV\VWHPLQVWDOOHGLQDFFRUGDQFH
ZLWK6HFWLRQRURI6%&KDV  6FRSH  7KH UHTXLUHPHQWV RI WKLV VHFWLRQ
EHHQ DGGHG DQG WKH EXLOGLQJ LV QRZ VSULQNOHUHG VKDOO EH OLPLWHG WR ZRUN DUHDV LQ ZKLFK /HYHO 
WKURXJKRXW WKH UHTXLUHG ILUHUHVLVWDQFH UDWLQJV RI DOWHUDWLRQV DUH EHLQJ SHUIRUPHG DQG ZKHUH
EXLOGLQJHOHPHQWVDQGPDWHULDOVVKDOOEHSHUPLWWHG VSHFLILHGWKH\VKDOODSSO\WKURXJKRXWWKHIORRURQ
WR PHHW WKH UHTXLUHPHQWV RI WKH FXUUHQW EXLOGLQJ ZKLFK WKH ZRUN DUHDV DUH ORFDWHG RU RWKHUZLVH
FRGH 7KH EXLOGLQJ LV UHTXLUHG WR PHHW WKH RWKHU EH\RQGWKHZRUNDUHD
DSSOLFDEOHUHTXLUHPHQWVRIWKH6%& ™ 7KHVFRSLQJSURYLVLRQVRIILUHSURWHFWLRQDUHWKH
3ODQV LQYHVWLJDWLRQ DQG HYDOXDWLRQ UHSRUWV DQG VDPH DV DOO RWKHU VXEMHFWV LQ &KDSWHU  7KH
RWKHU GDWD VKDOO EH VXEPLWWHG LQGLFDWLQJ ZKLFK UHTXLUHPHQWV DSSO\ LQ ZRUN DUHDV $W WLPHV
EXLOGLQJ HOHPHQWV DQG PDWHULDOV WKH DSSOLFDQW LV WKHUHDUHVXSSOHPHQWDOUHTXLUHPHQWVWKDWDSSO\
UHTXHVWLQJ WKH EXLOGLQJ RIILFLDO WR UHYLHZ DQG WRDUHDVRXWVLGHRIWKHZRUNDUHD
DSSURYH IRU GHWHUPLQDWLRQ RI DSSO\LQJ WKH FXUUHQW &RUULGRU UDWLQJV  :KHUH DQ DSSURYHG
EXLOGLQJ FRGH ILUHUHVLVWDQFH UDWLQJV $Q\ VSHFLDO DXWRPDWLF VSULQNOHU V\VWHP LVLQVWDOOHG WKURXJKRXW
FRQVWUXFWLRQ IHDWXUHV LQFOXGLQJ ILUHUHVLVWDQFH

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

WKHVWRU\WKHUHTXLUHGILUHUHVLVWDQFHUDWLQJIRUDQ\ VXFKZRUNDUHDVKDYHH[LWVRUFRUULGRUVVKDUHG
FRUULGRUORFDWHGRQWKHVWRU\VKDOOEHSHUPLWWHGWR E\PRUHWKDQRQHWHQDQW RUH[LWVRUFRUULGRUV
EH UHGXFHG LQ DFFRUGDQFH ZLWK WKH 6%&  ,Q VHUYLQJDQRFFXSDQWORDGJUHDWHUWKDQ
RUGHU WR EH FRQVLGHUHG IRU D FRUULGRU UDWLQJ  6XSSOHPHQWDO DXWRPDWLF
UHGXFWLRQ VXFK V\VWHPVKDOO SURYLGH FRYHUDJHIRU VSULQNOHUV\VWHPUHTXLUHPHQWV:KHUHWKHZRUN
WKH VWDLUZD\ ODQGLQJV VHUYLQJ WKH IORRU DQG WKH DUHDRQDQ\IORRUH[FHHGVSHUFHQWRIWKDWIORRU
LQWHUPHGLDWHODQGLQJVLPPHGLDWHO\EHORZ DUHD6HFWLRQVKDOODSSO\WRWKHHQWLUHIORRU
™ &RUULGRUUHGXFWLRQV RQ DIXOO\VSULQNOHUHGIORRU RQZKLFKWKHZRUNDUHDLVORFDWHG
SURYLGH D VLJQLILFDQW LQFHQWLYH WR VSULQNOHULQJ ([FHSWLRQ  2FFXSLHG WHQDQW VSDFHV WKDW DUH
WKHIORRUDQGDUHDVRQDEOHOHYHORIVDIHW\IRUWKH
HQWLUHO\RXWVLGHWKHZRUNDUHD
RFFXSDQWVRIWKHIORRU2QFHZDWHULVEURXJKWWR
WKHIORRUWUDGHRIIVIRUUDWHGFRUULGRUGRRUVDQG ™ ,IWKHZRUNDUHDRQDIORRUH[FHHGVSHUFHQW
GDPSHUVSOXVWKHLQFUHDVHLQPXOWLSOHOHDVLQJ RI WKDW IORRU DUHD VSULQNOHUV DV SUHYLRXVO\
GHVLJQRSWLRQVVXSSRUWDQRZQHU¶VGHFLVLRQWR GLVFXVVHGPXVWEHLQVWDOOHGWKURXJKRXWWKHIORRU
VSULQNOHU 7R EH FRQVLGHUHG D IXOO\ VSULQNOHUHG H[FHSW LQ RFFXSLHG WHQDQW DUHDV WKDW DUH
IORRUWKHVSULQNOHUV\VWHPDOVRQHHGVWRLQFOXGH HQWLUHO\RXWVLGHWKHZRUNDUHD
WKH H[LW VWDLUZD\V 2QFH WKH VSULQNOHU ULVHUV ™ 1RWHWKDWWKHSHUFHQWUXOHDSSOLHVWRWKHIORRU
DUH SURYLGHG LQ DQ H[LVWLQJ EXLOGLQJ IXWXUH DUHDRQO\DQGWKHUHIRUHWKLVGRHVQRWEHFRPH
DOWHUDWLRQV PD\ DOVR HDVLO\ EH VSULQNOHUHG E\ D/HYHODOWHUDWLRQXQWLOWKHZRUNDUHDH[FHHGV
XWLOL]LQJWKHULVHU7KLVWUDGHRIILVSHUPLWWHGIRU SHUFHQWRIWKHDJJUHJDWHDUHDRIDOOIORRUV
DXWRPDWLF VSULQNOHU V\VWHPV WKDW DUH UHTXLUHG
DV D UHVXOW RI WKH DOWHUDWLRQ DQG LQ YROXQWDU\ *URXSV$%()+,055
LQVWDOODWLRQV 56DQG6,QEXLOGLQJVZLWKRFFXSDQFLHVLQ
*URXSV$%()+,05556DQG
 $XWRPDWLFVSULQNOHUV\VWHPV$XWRPDWLF 6ZRUNDUHDVWKDWKDYHH[LWVRUFRUULGRUVVKDUHG
VSULQNOHUV\VWHPVVKDOOEHSURYLGHGLQDFFRUGDQFH E\ PRUH WKDQ RQH WHQDQW RU WKDW KDYH H[LWV RU
ZLWKWKHUHTXLUHPHQWVRI6HFWLRQVWKURXJK FRUULGRUVVHUYLQJDQRFFXSDQWORDGJUHDWHUWKDQ
 ,QVWDOODWLRQ UHTXLUHPHQWV VKDOO EH LQ VKDOO EH SURYLGHG ZLWK DXWRPDWLF VSULQNOHU
DFFRUGDQFHZLWKWKH6%& SURWHFWLRQ ZKHUH DOO RI WKH IROORZLQJ FRQGLWLRQV
™ 7KH VSULQNOHU UHTXLUHPHQWV DUH JURXSHG LQWR RFFXU
IRXUVHFWLRQVKLJKULVHEXLOGLQJV*URXSV$( 
) + , 0 5 5 5 6 DQG 6  7KHZRUNDUHDLVUHTXLUHGWREHSURYLGHGZLWK
ZLQGRZOHVV VWRULHV DQG EXLOGLQJV DQG DUHDV DXWRPDWLFVSULQNOHUSURWHFWLRQLQ DFFRUGDQFH
OLVWHGLQ6%&7DEOH ZLWK WKH 6%&  DV DSSOLFDEOH WR QHZ
+LJKULVH EXLOGLQJV  ,Q KLJKULVH FRQVWUXFWLRQDQG
EXLOGLQJV ZRUN DUHDV WKDW KDYH H[LWV RU FRUULGRUV  7KHZRUNDUHDH[FHHGVSHUFHQWRIWKHIORRU
VKDUHGE\PRUHWKDQRQHWHQDQWRUWKDWKDYHH[LWVRU DUHD
FRUULGRUVVHUYLQJDQRFFXSDQWORDGJUHDWHUWKDQ ([FHSWLRQ,IWKHEXLOGLQJGRHVQRWKDYHVXIILFLHQW
VKDOO EH SURYLGHG ZLWK DXWRPDWLF VSULQNOHU PXQLFLSDOZDWHUVXSSO\IRUGHVLJQRIDILUHVSULQNOHU
SURWHFWLRQLQWKHHQWLUHZRUNDUHDZKHUHWKHZRUN V\VWHPDYDLODEOHWRWKHIORRUZLWKRXWLQVWDOODWLRQRI
DUHD LV ORFDWHG RQ D IORRU WKDW KDV D VXIILFLHQW DQHZILUHSXPSZRUNDUHDVVKDOOEHSURWHFWHGE\
VSULQNOHU ZDWHU VXSSO\ V\VWHP IURP DQ H[LVWLQJ DQDXWRPDWLFVPRNHGHWHFWLRQV\VWHPWKURXJKRXWDOO
VWDQGSLSHRUDVSULQNOHUULVHUVHUYLQJWKDWIORRU RFFXSLDEOH VSDFHV RWKHU WKDQ VOHHSLQJ XQLWV RU
™ 7KH UHTXLUHPHQW LQ KLJKULVH EXLOGLQJV LV LQGLYLGXDOGZHOOLQJXQLWVWKDWDFWLYDWHVWKHRFFXSDQW
GHSHQGHQW RQ WKH DYDLODELOLW\ RI D VXIILFLHQW QRWLILFDWLRQ V\VWHP LQ DFFRUGDQFH ZLWK 6HFWLRQV
VSULQNOHU ZDWHU VXSSO\ IURP DQ H[LVWLQJ DQGRI6%&
VWDQGSLSHRUDVSULQNOHUULVHUVHUYLQJWKHIORRU
ZKHUH WKH DOWHUDWLRQ ZRUN DUHD LV ORFDWHG ™ :KLOHLQJHQHUDODXWRPDWLFVSULQNOHUSURWHFWLRQ
7KHVH FULWHULD DUH LQFOXGHG EHFDXVH RI WKH IRU YDULRXV RFFXSDQFLHV LQ WKH 6%&  LV D
FRPSOH[LW\ DQG H[WHQVLYH FRVW LQYROYHG LQ IXQFWLRQRIWKH³ILUHDUHD´VL]HLQWKHFRGHLWLVD
FRPSOHWHO\ FRQVWUXFWLQJ QHZ VSULQNOHU ZDWHU IXQFWLRQ RI IRXU FRQGLWLRQV LQ VHOHFW
PDLQV ULVHUV DQG DVVRFLDWHG SLSLQJ DQG RFFXSDQFLHV 7KLV VHFWLRQ HVWDEOLVKHV WKH
HTXLSPHQW LQ KLJKULVH EXLOGLQJV :KHUH WKHUH FULWHULDIRUDOORFFXSDQFLHVH[FHSWIRU*URXS)
DUHH[LVWLQJVWDQGSLSHRUVSULQNOHUULVHUVZLWKD  DQG 8 RFFXSDQFLHV EHFDXVH WKHVH JURXSV
VXIILFLHQWZDWHUVXSSO\VHUYLQJDSDUWLFXODUIORRU DUH QRW UHTXLUHG WR EH VSULQNOHUHG LQ WKH 6%&
ZRUNDUHDVRQWKDWIORRUPXVWEHVSULQNOHUHGLI XQOHVVWKH\DUHLQVSHFLDOEXLOGLQJVVXFK
DVFRYHUHGPDOOVKLJKULVHVDQGWKHVRFDOOHG

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

ZLQGRZOHVVVWRULHV7KHIRUHPRVWFRQVLGHUDWLRQ ™ 4 :KLFK RFFXSDQFLHV RU WHQDQWV PXVW EH

UHJDUGLQJ SRWHQWLDO VSULQNOHU V\VWHPV LV SURYLGHGZLWKDVSULQNOHUV\VWHP"
ZKHWKHUVXFKDZRUNDUHDZRXOGEHUHTXLUHGWR ™ $)LUVWWKHWZRFRQGLWLRQVRI 6HFWLRQ
EH VSULQNOHUHG XQGHU WKH 6%&  SURYLVLRQV PXVW EH YHULILHG &RQGLWLRQ  LV SUHVHQW )RU
IRUQHZFRQVWUXFWLRQ,IWKH6%&GRHVQRW &RQGLWLRQ  6%&  6HFWLRQ  UHTXLUHV
UHTXLUH D VSULQNOHU V\VWHP IRU WKH VSDFH RU VSULQNOHUVIRUWHQDQWVDQG7HQDQWV
EXLOGLQJ XQGHU FRQVLGHUDWLRQ QHLWKHU ZLOO WKH DQG  KRZHYHU DUH RXWVLGH RI WKH ZRUN DUHD
FRGH 2QFH WKLV LV HVWDEOLVKHG WKH RWKHU DQG DV VXFK DUH QRW JRLQJ WR EH UHTXLUHG WR
FRQGLWLRQVWRDGGUHVVLQFOXGHZKHWKHUWKHZRUN SURYLGHVSULQNOHUVVHH6HFWLRQ7HQDQWV
DUHDKDVH[LWVRUFRUULGRUVVKDUHGE\PRUHWKDQ DQGDUHLQWKHZRUNDUHD$FFRUGLQJO\DOO
RQHWHQDQWRUKDVH[LWVRUFRUULGRUVWKDWVHUYH RIWKHWHQDQWVLQWKHZRUNDUHDWHQDQWV
DQRFFXSDQWORDGJUHDWHUWKDQDQGZKHWKHU    DQG  ZLOO EH UHTXLUHG WR EH
WKHZRUNDUHDH[FHHGVSHUFHQWRIWKHIORRU VSULQNOHUHGHYHQWKRXJKWHQDQWVDQG
DUHD 7KH RFFXSDQWORDG WKUHVKROG LQ WKLV  DUH QRW LQGLYLGXDOO\ UHTXLUHG WR EH
VHFWLRQ LV WDNHQ IURP 6%&  7DEOH  VSULQNOHUHGE\WKH6%&,IWKHRZQHUZLVKHV
ZKLFKXVHVWKLVWKUHVKROGLQPRVWRFFXSDQFLHV WR RQO\ VSULQNOHU WHQDQWV  DQG  WKHQ IXOO
WRUHTXLUHHLWKHUVSULQNOHUVRUUDWHGFRUULGRUV KHLJKWKRXUUDWHGSDUWLWLRQVPXVWEHSURYLGHG
™ 2QH H[FHSWLRQ WR WKHVH UHTXLUHPHQWV VWDWHV WRVHSDUDWHWHQDQWVDQGIURPWKHDGMDFHQW
WKDW LI WKH EXLOGLQJ GRHV QRW KDYH D VXIILFLHQW WHQDQWVDQGVHH&RPPHQWDU\)LJXUH
PXQLFLSDOZDWHUVXSSO\IRUDVSULQNOHUV\VWHPDW 
WKH IORRUZKHUHWKHZRUNDUHD LVORFDWHGWKHQ
VSULQNOHUVDUHQRWUHTXLUHGKRZHYHUWKDWVDPH :LQGRZOHVV VWRULHV  :RUN ORFDWHG LQ D
H[FHSWLRQ GRHV UHTXLUH DQ DXWRPDWLF VPRNH ZLQGRZOHVVVWRU\DVGHWHUPLQHGLQDFFRUGDQFHZLWK
GHWHFWLRQV\VWHPWKURXJKRXWWKHZRUNDUHD7KH WKH6%&VKDOOEHVSULQNOHUHGZKHUHWKHZRUN
VPRNH GHWHFWLRQ FRYHUDJH LV UHTXLUHG DUHD LV UHTXLUHG WR EH VSULQNOHUHG XQGHU WKH
WKURXJKRXW DOO RFFXSLDEOH VSDFHV RWKHU WKDQ SURYLVLRQV RI WKH 6%&  IRU QHZO\ FRQVWUXFWHG
DUHDVDOUHDG\UHTXLUHGWRLQVWDOOVPRNHDODUPV EXLOGLQJV DQG WKH EXLOGLQJ KDV D VXIILFLHQW
 0L[HG XVHV  ,Q ZRUN DUHDV PXQLFLSDO ZDWHU VXSSO\ ZLWKRXW LQVWDOODWLRQ RI D
FRQWDLQLQJ PL[HG XVHV RQH RU PRUH RI ZKLFK QHZILUHSXPS
UHTXLUHV DXWRPDWLF VSULQNOHU SURWHFWLRQ LQ ™ ,QWKHFRQWH[WRIWKHFRGHDZLQGRZOHVVVWRU\
DFFRUGDQFH ZLWK 6HFWLRQ  VXFK SURWHFWLRQ LVDUHIHUHQFHWR6%&6HFWLRQ
VKDOO QRW EH UHTXLUHG WKURXJKRXW WKH ZRUN DUHD ,Q WKLV FRQWH[W ZRUN DUHDV LQ DQ\ VWRU\ RU
SURYLGHGWKDWWKHXVHVUHTXLULQJVXFKSURWHFWLRQDUH EDVHPHQWODUJHUWKDQPWKDWGRQRWKDYH
VHSDUDWHG IURP WKRVH QRW UHTXLULQJ SURWHFWLRQ E\ DFFHVV WR RSHQLQJV DV GHVFULEHG LQ ,WHPV 
DQG  RI 6%&  6HFWLRQ  DUH
ILUHUHVLVWDQFHUDWHG FRQVWUXFWLRQ KDYLQJ D
UHTXLUHGWREHVSULQNOHUHG7KHRQO\H[FHSWLRQ
PLQLPXP KRXU UDWLQJ IRU *URXS + DQG D LV LI WKHUH LV QRW D VXIILFLHQW PXQLFLSDO ZDWHU
PLQLPXP KRXU UDWLQJ IRU DOO RWKHU RFFXSDQF\ VXSSO\DYDLODEOHWRWKHEXLOGLQJZLWKRXWWKHQHHG
JURXSV IRUDQHZILUHSXPS
™ 'HVLJQHUV DQG RZQHUV ZKR GR QRW ZLVK WR 2WKHU UHTXLUHG DXWRPDWLF VSULQNOHU
VSULQNOHUHQWLUHZRUNDUHDVVLPSO\EHFDXVHRQH V\VWHPV  ,Q EXLOGLQJV DQG DUHDV OLVWHG LQ 7DEOH
RI D PXOWLSOH QXPEHU RI PL[HG XVHV UHTXLUHV
RI 6%&ZRUNDUHDVWKDWKDYHH[LWV
DXWRPDWLFVSULQNOHUVDUHSURYLGHGDQRSWLRQWR
VHSDUDWH WKH YDULRXV RFFXSDQFLHV 7KLV RUFRUULGRUVVKDUHGE\PRUHWKDQRQHWHQDQWRUWKDW
FRQFHSW LV YHU\ VLPLODU WR WKH FRQFHSW LQ 6%& KDYH H[LWV RU FRUULGRUV VHUYLQJ DQ RFFXSDQW ORDG
 6HFWLRQ  ZKHUH WZR RSWLRQV RI JUHDWHUWKDQVKDOOEHSURYLGHGZLWKDQDXWRPDWLF
QRQVHSDUDWHG XVHV DQG VHSDUDWHG XVHV DUH VSULQNOHUV\VWHPXQGHUWKHIROORZLQJFRQGLWLRQV
SURYLGHG +HUH WKH FRGH XVHU LV JLYHQ WKH 
RSWLRQ RI VHSDUDWLQJ WKH RFFXSDQFLHV E\ D   7KHZRUNDUHDLVUHTXLUHGWREHSURYLGHGZLWK
KRXU ILUHUHVLVWDQFH UDWLQJ KRXU UDWLQJ LQ DQDXWRPDWLFVSULQNOHUV\VWHPLQDFFRUGDQFH
*URXS + RFFXSDQFLHV DQG VSULQNOHU RQO\ WKH ZLWK WKH 6%&  DSSOLFDEOH WR QHZ
RFFXSDQF\ WKDW KDV EHHQ WULJJHUHG WR SURYLGH FRQVWUXFWLRQDQG
VSULQNOHUVRUSURYLGHWKHDXWRPDWLFVSULQNOHULQ
 7KH EXLOGLQJ KDV VXIILFLHQW PXQLFLSDO ZDWHU
WKHHQWLUHZRUNDUHDDQGPXOWLSOHRFFXSDQFLHV
LQ VXFK ZRUN DUHDV WKXV HOLPLQDWLQJ WKH QHHG VXSSO\ IRU GHVLJQ RI DQ DXWRPDWLF VSULQNOHU
IRU VHSDUDWLRQ RI WKH YDULRXV PL[HG V\VWHP DYDLODEOH WR WKH IORRU ZLWKRXW
RFFXSDQFLHV LQVWDOODWLRQRIDQHZILUHSXPS
™ ([DPSOH ™ 6SHFLDO EXLOGLQJV DQG RFFXSDQFLHV SURPSWLQJ
VHSDUDWH FRQVLGHUDWLRQ RI DGGLWLRQDO

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

VXSSUHVVLRQ V\VWHP UHTXLUHPHQWV LQFOXGH XVHG IRU WKH VXSHUYLVLRQ RI VSULQNOHUV LQ QHZ
FRYHUHGPDOOVDWULXPVVWDJHVDQGRWKHUVOLVWHG EXLOGLQJVFRQVWUXFWHGXQGHUWKH6%&
LQ6%&7DEOHDQGGU\FOHDQLQJ ™ 7KLV VHFWLRQ LGHQWLILHV WKH IRXU DFFHSWDEOH
SODQWV VSUD\ ERRWKV DQG RWKHUV OLVWHG LQ 6%& PHWKRGVGHVFULEHGLQ1)3$FHQWUDOVWDWLRQ
7DEOH7KHILUVWFRQGLWLRQWREH V\VWHP SURSULHWDU\ V\VWHPV UHPRWH VWDWLRQ
FRQVLGHUHG IRU DQ DUHD WR UHTXLUH D VSULQNOHU V\VWHPRIWKHMXULVGLFWLRQRUORFDODODUPVHUYLFH
V\VWHPLVZKHWKHUVXFKDZRUNDUHDZRXOGEH WKDWZLOOFDXVHWKHVRXQGLQJRIDQDODUP)LYH
UHTXLUHGWREHVSULQNOHUHGXQGHUWKHSURYLVLRQV H[FHSWLRQV DUH SURYLGHG ZKHUH VXSHUYLVLRQ LV
RIWKH6%&IRUQHZFRQVWUXFWLRQ,IWKH6%& QRW UHTXLUHG WKHVH ILYH H[FHSWLRQV DUH VLPLODU
GRHVQRWUHTXLUHDVSULQNOHUV\VWHPIRUWKH WR WKH H[FHSWLRQV IRXQG LQ 6%&  6HFWLRQV
VSDFH RU EXLOGLQJ XQGHU FRQVLGHUDWLRQ QHLWKHU DQG
ZLOO WKH FRGH 2QFH WKLV LV HVWDEOLVKHG RWKHU
FRQGLWLRQVDUHHYDOXDWHGVXFKDVZKHWKHUWKH  6WDQGSLSHV:KHUHWKHZRUNDUHDLQFOXGHV
ZRUNDUHDKDVH[LWVRUFRUULGRUVVKDUHGE\PRUH H[LWVRU FRUULGRUVVKDUHGE\ PRUHWKDQRQHWHQDQW
WKDQ RQH WHQDQW RU VHUYLQJ DQ RFFXSDQW ORDG DQGLVORFDWHGPRUHWKDQPDERYHRUEHORZ
JUHDWHU WKDQ  DQG ZKHWKHU WKH EXLOGLQJ WKH ORZHVW OHYHO RI ILUH GHSDUWPHQW DFFHVV D
ZLWKRXWFRQVLGHUDWLRQIRUDQHZILUHSXPSKDV VWDQGSLSH V\VWHP VKDOO EH SURYLGHG 6WDQGSLSHV
D VXIILFLHQW PXQLFLSDO ZDWHU VXSSO\ IRU D VKDOOKDYHDQDSSURYHGILUHGHSDUWPHQWFRQQHFWLRQ
VSULQNOHU V\VWHP DW WKH IORRU ZKHUH WKH ZRUN ZLWKKRVHFRQQHFWLRQVDWHDFKIORRUOHYHODERYHRU
DUHD LV ORFDWHG 7KH RFFXSDQWORDG EHORZ WKH ORZHVW OHYHO RI ILUH GHSDUWPHQW DFFHVV
WKUHVKROGLQWKLVVHFWLRQLVWDNHQIURP6%& 6WDQGSLSHV\VWHPVVKDOOEHLQVWDOOHGLQDFFRUGDQFH
7DEOHZKLFKXVHVWKLVWKUHVKROGLQPRVW
ZLWKWKH6%&
RFFXSDQFLHVWRUHTXLUHHLWKHUVSULQNOHUVRUUDWHG
FRUULGRUV ([FHSWLRQV
6XSHUYLVLRQ  )LUH VSULQNOHU V\VWHPV  1RSXPSVKDOOEHUHTXLUHGSURYLGHGWKDWWKH
UHTXLUHGE\WKLVVHFWLRQVKDOOEHVXSHUYLVHGE\RQH VWDQGSLSHVDUH FDSDEOHRI DFFHSWLQJGHOLYHU\
RIWKHIROORZLQJPHWKRGV E\ILUHGHSDUWPHQWDSSDUDWXVRIDPLQLPXPRI
 /P DW  N3D WR WKH WRSPRVW IORRU LQ
 $SSURYHG FHQWUDO VWDWLRQ V\VWHP LQ EXLOGLQJV HTXLSSHG WKURXJKRXW ZLWK DQ
DFFRUGDQFHZLWK1)3$ DXWRPDWLFVSULQNOHUV\VWHPRUDPLQLPXPRI
 $SSURYHG SURSULHWDU\ V\VWHP LQ DFFRUGDQFH /PDWN3DWRWKHWRSPRVWIORRULQ
ZLWK1)3$ DOO RWKHU EXLOGLQJV :KHUH WKH VWDQGSLSH
 $SSURYHG UHPRWH VWDWLRQ V\VWHP RI WKH WHUPLQDWHV EHORZ WKH WRSPRVW IORRU WKH
MXULVGLFWLRQLQDFFRUGDQFHZLWK1)3$RU VWDQGSLSHVKDOOEHGHVLJQHGWRPHHW/PN3D
 :KHQ DSSURYHG E\ WKH EXLOGLQJ RIILFLDO UHTXLUHPHQWV RI WKLV H[FHSWLRQ IRU SRVVLEOH
DSSURYHG ORFDODODUPVHUYLFH WKDWZLOO FDXVH IXWXUHH[WHQVLRQRIWKHVWDQGSLSH
WKHVRXQGLQJRIDQDODUPLQDFFRUGDQFHZLWK  7KH LQWHUFRQQHFWLRQ RI PXOWLSOH VWDQGSLSH
1)3$ ULVHUVVKDOOQRWEHUHTXLUHG
([FHSWLRQ  6XSHUYLVLRQ LV QRW UHTXLUHG IRU WKH ™ 2QFH D ZRUN DUHD HQFRPSDVVHV H[LWV RU
IROORZLQJ FRUULGRUV WKDW DUH VKDUHG E\ PRUH WKDQ RQH
WHQDQW WKH VWDQGSLSH UHTXLUHPHQW LV WULJJHUHG
 8QGHUJURXQGJDWHYDOYHZLWKURDGZD\ER[HV RQO\ E\ ZRUN DUHD KHLJKW FULWHULD VLPLODU WR
 +DORJHQDWHGH[WLQJXLVKLQJV\VWHPV EXLOGLQJ KHLJKW FULWHULD LQ 6%&  6HFWLRQ
7KHVWDQGSLSHWULJJHUVLQWKH6%&
 &DUERQGLR[LGHH[WLQJXLVKLQJV\VWHPV
IRU QHZ EXLOGLQJV FRQWDLQ DGGLWLRQDO FULWHULD
 'U\ DQG ZHWFKHPLFDO H[WLQJXLVKLQJ EDVHGRQ*URXS$RFFXSDQFLHVVHH6%&
V\VWHPV 6HFWLRQ  FRYHUHG DQG RSHQ PDOO
 $XWRPDWLF VSULQNOHU V\VWHPV LQVWDOOHG LQ EXLOGLQJV VHH 6%&  6HFWLRQ 
DFFRUGDQFHZLWK1)3$5ZKHUHDFRPPRQ XQGHUJURXQG EXLOGLQJV VHH 6%&  6HFWLRQ
VXSSO\PDLQLVXVHGWRVXSSO\ERWKGRPHVWLF DQGKHOLVWRSVDQGKHOLSRUWVVHH6%&
DQG DXWRPDWLF VSULQNOHU V\VWHPV DQG D 6HFWLRQQRQHRIZKLFK DUHXVHG
VHSDUDWH VKXWRII YDOYH IRU WKH DXWRPDWLF DVWKHEDVLVIRUVWDQGSLSHWULJJHUVLQWKHFRGH
VSULQNOHUV\VWHPLVQRWSURYLGHG :KHUH WKH ZRUN DUHD WKDW LQFOXGHV H[LWV RU
FRUULGRUV VHUYLQJ PRUH WKDQ RQH WHQDQW LV
™ ,I D VSULQNOHU V\VWHP LV UHTXLUHG EDVHG RQ ORFDWHGPRUHWKDQPDERYHRUEHORZWKH
6HFWLRQ    RU  ORZHVWOHYHORIILUHGHSDUWPHQWYHKLFOHDFFHVV
WKHQ VXFK D V\VWHP PXVW EH VXSHUYLVHG LQ D VWDQGSLSH V\VWHP LV UHTXLUHG 6XFK
DFFRUGDQFHZLWK1)3$WKHVDPHVWDQGDUG VWDQGSLSHV PXVW KDYH D ILUH GHSDUWPHQW

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

FRQQHFWLRQZLWKDKRVHFRQQHFWLRQDWHDFKIORRU 2FFXSDQF\ UHTXLUHPHQWV  $ ILUH DODUP

OHYHO XS WR WKH OHYHO ZKHUH WKH ZRUN DUHD LV V\VWHP VKDOO EH LQVWDOOHG LQ DFFRUGDQFH ZLWK
ORFDWHGLQDFFRUGDQFHZLWKWKH6%&(YHQ 6HFWLRQV  WKURXJK  ([LVWLQJ
WKRXJKWKHFODVVRIWKHVWDQGSLSHV\VWHPLVQRW DODUPQRWLILFDWLRQDSSOLDQFHVVKDOOEHDXWRPDWLFDOO\
VSHFLILHGLQWKLVVHFWLRQEHFDXVHWKHWULJJHULV
DFWLYDWHG WKURXJKRXW WKH EXLOGLQJ :KHUH WKH
EDVHG RQ ZRUN DUHD KHLJKW WKH VWDQGSLSH
LQWHQGHG LV D &ODVV ,,, VWDQGSLSH 7KH EXLOGLQJLVQRWHTXLSSHGZLWKDILUHDODUPV\VWHP
H[FHSWLRQV LQ 6%&  6HFWLRQ  WKDW DODUPQRWLILFDWLRQDSSOLDQFHVZLWKLQWKHZRUNDUHD
DOORZ D&ODVV,VWDQGSLSHLQOLHXRI D&ODVV,,, VKDOOEHSURYLGHGDQGDXWRPDWLFDOO\DFWLYDWHG
ZRXOGDOVREHDOORZHGKHUH([FHSWLRQDOORZV ([FHSWLRQV
WKHLQVWDOODWLRQRIDVWDQGSLSHV\VWHPZLWKRXWD
ILUH SXPS LI VXIILFLHQW ZDWHU ZLWK VXIILFLHQW  2FFXSDQFLHV ZLWK DQ H[LVWLQJ SUHYLRXVO\
SUHVVXUH FRXOG EH GHOLYHUHG E\ PHDQV RI ILUH DSSURYHGILUHDODUPV\VWHP
GHSDUWPHQW DSSDUDWXV SXPSV WR WKH WRSPRVW  :KHUH VHOHFWLYH QRWLILFDWLRQ LV SHUPLWWHG
IORRURIWKHEXLOGLQJ8QGHUWKLVH[FHSWLRQWKH DODUP QRWLILFDWLRQ DSSOLDQFHV VKDOO EH
ORFDWLRQRIWKHZRUNDUHDWKDWKDVWULJJHUHGWKH DXWRPDWLFDOO\DFWLYDWHGLQWKHDUHDVVHOHFWHG
VWDQGSLSH UHTXLUHPHQW LV LUUHOHYDQW DQG WKH
WRSPRVWIORRUPXVWEHFRQVLGHUHGZKHWKHUWKH ™ $V SUHYLRXVO\ PHQWLRQHG ILUH DODUP V\VWHP
ZRUNDUHDLVORFDWHGDWWKHWRSPRVWIORRURUQRW UHTXLUHPHQWV DUH EDVHG RQ RFFXSDQF\
([FHSWLRQUHFRJQL]HVWKHIDFWWKDWRYHUWKHOLIH FODVVLILFDWLRQ DV GHWHUPLQHG E\ 6HFWLRQV
RI D EXLOGLQJ DQG DV D UHVXOW RI YDULRXV  WKURXJK  ,I WKH DXWRPDWLF
DOWHUDWLRQZRUNLQGLIIHUHQWSDUWVRIWKHEXLOGLQJ DODUPV\VWHPLVUHTXLUHGLQWKHZRUNDUHDLQD
PXOWLSOHLQGHSHQGHQWVWDQGSLSHULVHUVPLJKWEH FHUWDLQ RFFXSDQF\ DQG DODUP QRWLILFDWLRQ
SUHVHQW DQG WKHVH DUH DOORZHG WR UHPDLQ GHYLFHV DOUHDG\ H[LVW LQ RWKHU SDUWV RI WKH
LQGHSHQGHQW DQG IXQFWLRQ VHSDUDWHO\ DV EXLOGLQJWKHQDOOVXFKH[LVWLQJGHYLFHVPXVWEH
QHHGHG FRQQHFWHG WR WKH QHZ DODUP V\VWHP DQG EH
DXWRPDWLFDOO\DFWLYDWHGRQWKHDFWLYDWLRQRIWKH
 )LUH DODUPDQG GHWHFWLRQ  $Q DSSURYHG QHZDODUPV\VWHP,IWKHUHDUHQRVXFKH[LVWLQJ
ILUHDODUPV\VWHPVKDOOEH LQVWDOOHGLQ DFFRUGDQFH DODUPV RU QRWLILFDWLRQ GHYLFHV WKHQ WKH QHZ
ZLWK 6HFWLRQV  WKURXJK  :KHUH DODUP DQG LWV QRWLILFDWLRQ GHYLFHV DUH RQO\
DXWRPDWLF VSULQNOHU SURWHFWLRQ LV SURYLGHG LQ UHTXLUHG LQ WKH ZRUN DUHD 8QOHVV WKH
DFFRUGDQFHZLWK6HFWLRQDQGLVFRQQHFWHGWR VXSSOHPHQWDOILUHDODUPV\VWHPUHTXLUHPHQWVRI
WKH EXLOGLQJ ILUH DODUP V\VWHP DXWRPDWLF KHDW 6HFWLRQ  DUH DSSOLFDEOH ILUH DODUP
GHWHFWLRQ VKDOO QRW EH UHTXLUHG $Q DSSURYHG V\VWHPV DUH UHTXLUHG LQ ZRUN DUHDV RQO\ LQ
DXWRPDWLFILUHGHWHFWLRQV\VWHPVKDOOEHLQVWDOOHGLQ *URXSV(,UHVLGHQWLDOFDUHDVVLVWHGOLYLQJ,
 , 5 5 DQG 5 UHVLGHQWLDO
DFFRUGDQFH ZLWK WKH SURYLVLRQV RI WKLV FRGH DQG
FDUHDVVLVWHGOLYLQJ IDFLOLWLHV 7KH WULJJHUV DUH
1)3$  'HYLFHV FRPELQDWLRQV RI GHYLFHV WKH VDPH DV WKH 6%&  UHWURDFWLYH WULJJHUV
DSSOLDQFHVDQGHTXLSPHQWVKDOOEHDSSURYHG7KH IRUWKHVDPHRFFXSDQFLHV
DXWRPDWLFILUH GHWHFWRUVVKDOOEH VPRNH GHWHFWRUV
H[FHSWWKDWDQDSSURYHGDOWHUQDWLYHW\SHRIGHWHFWRU 
VKDOO EH LQVWDOOHG LQ VSDFHV VXFK DV ERLOHU URRPV  *URXS (  $ ILUH DODUP V\VWHP
ZKHUH SURGXFWV RI FRPEXVWLRQ DUH SUHVHQW GXULQJ VKDOO EH LQVWDOOHG LQ ZRUN DUHDV RI *URXS (
QRUPDORSHUDWLRQLQVXIILFLHQWTXDQWLW\WRDFWXDWHD RFFXSDQFLHV DV UHTXLUHG E\ WKH 6%&   IRU
VPRNHGHWHFWRU H[LVWLQJ*URXS(RFFXSDQFLHV
™ )LUH DODUP V\VWHP UHTXLUHPHQWV DUH VROHO\ ™ $EXLOGLQJZLWKDPD[LPXPRIPLQDUHDWKDW
EDVHG RQ WKH QDWXUH RI RFFXSDQF\ )LUH FRQWDLQV D VLQJOH FODVVURRP DQG LV ORFDWHG
GHWHFWLRQ V\VWHP UHTXLUHPHQWV DUH EDVHG RQ PRUPRUHIURPDQRWKHUEXLOGLQJDQGDQ\
VSHFLILF IHDWXUHV WR SHUIRUP VSHFLILF IXQFWLRQV EXLOGLQJZLWKDQRFFXSDQWORDGOHVVWKDQDUH
DVGHVFULEHGLQWKH6%&VXFKDVHOHYDWRU QRW UHTXLUHG WR KDYH DQ DODUP V\VWHP :RUN
UHFDOOVHH6%&6HFWLRQRUVPRNH DUHDV LQ*URXS(EXLOGLQJVDUHUHTXLUHGWREH
SURRI HQFORVXUH YHQWLODWLRQ VHH 6%&  SURYLGHG ZLWK D PDQXDO ILUH DODUP V\VWHP ,W
6HFWLRQ  7KHVH UHTXLUHPHQWV DSSO\ PXVWEHQRWHGKRZHYHUWKDWLQWKLVFDVHWKH
ZLWKLQWKHZRUNDUHDRQO\6XFKGHYLFHVZKHUH UHTXLUHPHQWV RI WKH 6%&  DUH PRUH
UHTXLUHGPXFKWKHVDPHDVWKH6%&PXVW VWULQJHQWWKDQWKHFRGH,IDMXULVGLFWLRQHQIRUFHV
EH LQVWDOOHG LQ DFFRUGDQFH ZLWK 1)3$  DQG WKHUHWURDFWLYHSURYLVLRQVRIWKH6%&WKH
QHHG QRW EH DQ\WKLQJ RWKHU WKDQ VPRNH HQWLUH *URXS ( RFFXSDQF\ DQG QRW MXVW WKH
GHWHFWRUVZLWKFHUWDLQPLQRUH[FHSWLRQV ZRUN DUHD LV UHTXLUHG WR EH SURYLGHG ZLWK D
PDQXDOILUHDODUPV\VWHPEDVHGRQWKHVL]HDQG
RFFXSDQWORDGFULWHULDMXVWGLVFXVVHG

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

 *URXS 5  $ ILUH DODUP V\VWHP

 *URXS ,  $ ILUH DODUP V\VWHP VKDOO EH LQVWDOOHG LQ ZRUN DUHDV RI *URXS 5
VKDOO EH LQVWDOOHG LQ ZRUN DUHDV RI *URXS , DSDUWPHQWEXLOGLQJVDVUHTXLUHGE\WKH6%&IRU
UHVLGHQWLDOFDUHDVVLVWHGOLYLQJIDFLOLWLHVDVUHTXLUHG H[LVWLQJ*URXS5RFFXSDQFLHV
E\WKH6%&IRUH[LVWLQJ*URXS,RFFXSDQFLHV ™ 7KHILUHDODUPV\VWHPWULJJHUIRUDSDUWPHQWVLV
™ $PDQXDOILUHDODUPV\VWHPPXVWEHLQVWDOOHGLQ VLPLODUWRWKDWRIKRWHOVDQGPRWHOVDQGLVVHWDW
ZRUN DUHDV RI DOO *URXS , UHVLGHQWLDO EXLOGLQJVRIPRUHWKDQWKUHHVWRULHVLQKHLJKWRU
FDUHDVVLVWHGOLYLQJIDFLOLWLHV6%&6HFWLRQ FRQWDLQLQJ PRUH WKDQ  GZHOOLQJ XQLWV 6%&
 UHTXLUHV WKLV VDPH V\VWHP 6HFWLRQLQFOXGHVWKUHHH[FHSWLRQV
UHWURDFWLYHO\LQWKHHQWLUH*URXS,RFFXSDQF\ WKDW DUH DOVR DSSOLFDEOH XQGHU WKH FRGH IRU
ZKLFKLIHQIRUFHGLVPRUHFRPSUHKHQVLYHWKDQ *URXS5DSDUWPHQWEXLOGLQJV
WKHFRGH¶VUHTXLUHPHQW

 *URXS 5  $ ILUH DODUP V\VWHP
 *URXS ,  $ ILUH DODUP V\VWHP VKDOO EH LQVWDOOHG LQ ZRUN DUHDV RI *URXS 5
VKDOOEHLQVWDOOHGWKURXJKRXW*URXS,RFFXSDQFLHV UHVLGHQWLDOFDUHDVVLVWHGOLYLQJIDFLOLWLHVDVUHTXLUHG
DVUHTXLUHGE\WKH6%& E\ WKH 6%&  IRU H[LVWLQJ *URXS 5
™ $ PDQXDO ILUH DODUP V\VWHP LV UHTXLUHG WR EH
RFFXSDQFLHV
SURYLGHG LQ WKH HQWLUH *URXS , RFFXSDQF\ ™ 2WKHU WKDQ WKH WKUHH H[FHSWLRQV IRXQG XQGHU
ZKHUH WKHUH LV D /HYHO  DOWHUDWLRQ 7KLV LV 6%&  6HFWLRQ  ZRUN DUHDV LQ
FRQVLVWHQWZLWK6%&UHWURDFWLYHSURYLVLRQV *URXS 5 UHVLGHQWLDO FDUHDVVLVWHGOLYLQJ
WKDW UHTXLUH WKH HQWLUH H[LVWLQJ *URXS , IDFLOLWLHV PXVW EH SURYLGHG ZLWK D ILUH DODUP
RFFXSDQFLHVWREHSURYLGHGZLWKDQDXWRPDWLF V\VWHP
ILUH DODUP V\VWHP VHH 6%&  6HFWLRQV
DQG 
6XSSOHPHQWDO ILUH DODUP V\VWHP
 *URXS ,  $ ILUH DODUP V\VWHP UHTXLUHPHQWV:KHUHWKHZRUNDUHDRQDQ\IORRU
VKDOOEHLQVWDOOHGWKURXJKRXW*URXS,RFFXSDQFLHV H[FHHGV  SHUFHQW RI WKDW IORRU DUHD 6HFWLRQ
DVUHTXLUHGE\WKH6%& VKDOODSSO\WKURXJKRXWWKHIORRU
™ 7KHZRUNDUHDVRI*URXS,PXVWEHSURYLGHG ([FHSWLRQ  $ODUPLQLWLDWLQJ DQG QRWLILFDWLRQ
ZLWKDPDQXDODQGDXWRPDWLFILUHDODUPV\VWHP DSSOLDQFHV VKDOO QRW EH UHTXLUHG WR EH LQVWDOOHG LQ
6%&  6HFWLRQV  DQG  WHQDQWVSDFHVRXWVLGHRIWKHZRUNDUHD
UHTXLUH WKLV VDPH V\VWHP UHWURDFWLYHO\ LQ WKH
™ 7KH ILUH DODUP UHTXLUHPHQWV SUHYLRXVO\
HQWLUH*URXS,RFFXSDQF\ZKLFKLIHQIRUFHG
GLVFXVVHGIRUYDULRXVRFFXSDQFLHVDSSO\WRWKH
LV PRUH FRPSUHKHQVLYH WKDQ WKH FRGH¶V
ZRUN DUHD RQO\ H[FHSW ZKHUH WKH UHWURDFWLYH
UHTXLUHPHQW
SURYLVLRQV RI WKH 6%&  JRYHUQ DQG DUH
HQIRUFHG E\ WKH MXULVGLFWLRQ DV SUHYLRXVO\
 *URXS 5 $ ILUH DODUP V\VWHP GLVFXVVHGXQOHVVWKHZRUNDUHD RQDQ\ IORRU
VKDOO EH LQVWDOOHG LQ *URXS 5 RFFXSDQFLHV DV H[FHHGVSHUFHQWRIWKDWIORRUDUHD,QWKRVH
UHTXLUHG E\ WKH 6%&  IRU H[LVWLQJ *URXS 5 FDVHVWKHILUHDODUPV\VWHPPXVWEHSURYLGHG
EH\RQG WKH ZRUN DUHD WKURXJKRXW WKDW IORRU
RFFXSDQFLHV
:KHUH WKLV SURYLVLRQ DSSOLHV DQG WKHUH DUH
™ 7KHILUHDODUPUHTXLUHPHQWLVDJDLQUHIHUUHGWR PXOWLSOH WHQDQWV RQ WKH IORRU UHTXLUHG WR EH
WKHUHWURDFWLYHSURYLVLRQVRIWKH6%&7KH HTXLSSHG ZLWK D ILUH DODUP V\VWHP WKH
6%&  GHDOV ZLWK *URXS 5 KRWHOV DQG H[WHQVLRQRIWKHDODUPV\VWHPLQWRWHQDQWDUHDV
PRWHOVDQG*URXS5ERDUGLQJDQGURRPLQJ WKDW DUH QRW SDUW RI WKH DOWHUDWLRQ ZRUN LV YHU\
KRXVHV GLIIHUHQWO\ %RDUGLQJ DQG URRPLQJ GLVUXSWLYHDQGLQPRVWFDVHVDFWVDVDPDMRU
KRXVHVDUHUHTXLUHGWREHSURYLGHGZLWKDILUH GHWHUUHQW WR XQGHUWDNLQJ FHUWDLQ OHYHOV RI
DODUP V\VWHP LQ WKH ZRUN DUHD UHJDUGOHVV RI DOWHUDWLRQ )RU WKLV UHDVRQ WKH H[FHSWLRQ
WKH VL]H RI WKH EXLOGLQJ KHLJKW RU QXPEHU RI HOLPLQDWHV WKH UHTXLUHPHQW IRU WKH DODUP
VWRULHV)RUKRWHOVDQGPRWHOVWKHWULJJHULVVHW LQLWLDWLQJ DQG QRWLILFDWLRQ DSSOLDQFHV WR EH
IRUEXLOGLQJVWKDWDUHPRUHWKDQWKUHHVWRULHVLQ LQVWDOOHGLQWHQDQWVSDFHVWKDWDUHQRWSDUWRIWKH
KHLJKWRUZLWKPRUHWKDQJXHVWURRPV7KHUH DOWHUDWLRQZRUN
LVDOVRDQH[FHSWLRQWKDWLVUHODWHGWREXLOGLQJV
WKDW DUH OHVV WKDQ WZR VWRULHV LQ KHLJKW VHH 6PRNH DODUPV ,QGLYLGXDO VOHHSLQJ XQLWV
6HFWLRQVWKURXJK  RIWKH DQG LQGLYLGXDO GZHOOLQJ XQLWV LQ DQ\ ZRUN DUHDLQ
6%&

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

*URXS5DQG,RFFXSDQFLHVVKDOOEHSURYLGHGZLWK  *HQHUDO  7KH PHDQV RI HJUHVV VKDOO

VPRNHDODUPVLQDFFRUGDQFHZLWKWKH6%& FRPSO\ZLWKWKHUHTXLUHPHQWVRIWKLVVHFWLRQ
([FHSWLRQ ,QWHUFRQQHFWLRQ RI VPRNH DODUPV
([FHSWLRQV
RXWVLGHRIWKHZRUNDUHDVKDOOQRWEHUHTXLUHG
 :KHUHWKHZRUNDUHDDQGWKHPHDQVRIHJUHVV
™ 6PRNHDODUPVLQVOHHSLQJDQGGZHOOLQJXQLWVLQ
WKHZRUNDUHDPXVWEHSURYLGHGDVUHTXLUHGE\ VHUYLQJLWFRPSOLHVZLWK1)3$
WKH6%&6HFWLRQVDQGRI  0HDQV RI HJUHVV FRQIRUPLQJ WR WKH
WKH 6%&  DUH WKH DSSOLFDEOH VHFWLRQV IRU UHTXLUHPHQWV RI WKH EXLOGLQJ FRGH XQGHU
VPRNH DODUPV $FFRUGLQJ WR WKHVH VHFWLRQV ZKLFK WKH EXLOGLQJ ZDV FRQVWUXFWHGVKDOO EH
VPRNHDODUPVDUHUHTXLUHGLQVOHHSLQJURRPV FRQVLGHUHG FRPSOLDQW PHDQV RI HJUHVV LI LQ
LQHYHU\URRPLQWKHSDWKRIWKHPHDQVRIHJUHVV WKHRSLQLRQRIWKHEXLOGLQJRIILFLDOWKH\GRQRW
IURP VOHHSLQJ DUHDV DQG LQ HDFK VWRU\ DQG FRQVWLWXWHDGLVWLQFWKD]DUGWROLIH
EDVHPHQW 7KHUH DUH VHYHUDO H[FHSWLRQV WR
WKHVHVPRNHDODUPSODFHPHQWUHTXLUHPHQWVIRU ™ 7KHSURYLVLRQVRI6HFWLRQDUH LQWHQGHGWR
EXLOGLQJV WKDW FRPSO\ ZLWK SUHYLRXV FRGHV RU DGGUHVVLPSURYHPHQWVLQWKHPHDQVRIHJUHVV
WKDW KDYH VPRNH DODUPV FRQQHFWHG WR DQ WKDW DUH FUXFLDO IRU WKH VDIH HJUHVV RI
DXWRPDWLFILUHDODUPV\VWHP,QWHUFRQQHFWLRQRI RFFXSDQWV :LWK WKH H[FHSWLRQ RI YHU\ ROG
VPRNH DODUPV LV VWLOO UHTXLUHG XQOHVV VXFK EXLOGLQJV PRVW H[LVWLQJ EXLOGLQJV GHVLJQHG
VPRNHDODUPVDUHORFDWHG RXWVLGHRIWKHZRUN XQGHU WKH EXLOGLQJ FRGHV RI D MXULVGLFWLRQ
DUHDRUTXDOLI\XQGHU([FHSWLRQRI6%& SURYLGH D FHUWDLQ GHJUHH RI VDIH HJUHVV
6HFWLRQIRU*URXSV5DQG5RQO\ $FFRUGLQJO\ XQOHVV WKH EXLOGLQJ RIILFLDO ILQGV
$OVR QRWH WKDW H[FHSWLRQV DSSO\ WR WKH SRZHU WKDWDOORUSDUWVRIWKHPHDQVRIHJUHVVV\VWHP
VRXUFH UHTXLUHPHQWV LQ H[LVWLQJ EXLOGLQJV LQ FRQVWLWXWH D GLVWLQFW KD]DUG WKH PHDQV RI
6%&6HFWLRQ HJUHVV GRHV QRW QHHG WR FRPSO\ ZLWK 6HFWLRQ
 DV ORQJ DV LW FRPSOLHV ZLWK WKH
UHTXLUHPHQWVRIWKHEXLOGLQJFRGHXQGHUZKLFK
LW ZDV EXLOW LQFOXGLQJ 1)3$  :KHUH WKH
6(&7,210($162)(*5(66 EXLOGLQJ RIILFLDO ILQGV D GLVWLQFW KD]DUG WKH
 6FRSH  7KH UHTXLUHPHQWV RI WKLV VHFWLRQ SURYLVLRQV RI 6HFWLRQ  FRXOG EH DSSOLHG RU
VKDOOEHOLPLWHGWRZRUNDUHDVWKDWLQFOXGHH[LWVRU ZKDWHYHU RWKHU UHPHG\ GHWHUPLQHG E\ WKH
FRUULGRUVVKDUHGE\PRUHWKDQRQHWHQDQWZLWKLQWKH EXLOGLQJRIILFLDOPXVWEHIROORZHG
ZRUN DUHD LQ ZKLFK /HYHO  DOWHUDWLRQV DUH EHLQJ  1XPEHU RI H[LWV  7KH QXPEHU RI H[LWV
SHUIRUPHG DQG ZKHUH VSHFLILHG WKH\ VKDOO DSSO\ VKDOO EH LQ DFFRUGDQFH ZLWK 6HFWLRQV 
WKURXJKRXWWKH IORRURQ ZKLFK WKH ZRUN DUHDV DUH WKURXJK
ORFDWHGRURWKHUZLVHEH\RQGWKHZRUNDUHD
™ 7KHQXPEHURIH[LWVLQDQ\EXLOGLQJLVRQHRIWKH
™ 7KLVVHFWLRQ LVHQWLUHO\ GHYRWHGWRWKHPHDQV PRVW LPSRUWDQW IDFWRUV LQ WKH VDIH HJUHVV RI
RIHJUHVV UHTXLUHPHQWV LQ H[LVWLQJ EXLOGLQJV RFFXSDQWV7KH6%&DQG6%&PDNHLW
XQGHUJRLQJ /HYHO  RU  DOWHUDWLRQV 7KH XQODZIXO WR UHGXFH WKH QXPEHU RI H[LWV LQ D
UHTXLUHPHQWVRIWKLVVHFWLRQDSSO\WRWKHZRUN EXLOGLQJ
DUHD RQO\ XQOHVV WKHUH DUH VSHFLILF VHFWLRQV
DGGUHVVLQJ VXSSOHPHQWDO UHTXLUHPHQWV LQ 0LQLPXP QXPEHU  (YHU\ VWRU\ XWLOL]HG
ZKLFK FDVH WKH UHTXLUHPHQWV ZLOO DSSO\ IRUKXPDQRFFXSDQF\RQZKLFKWKHUHLVDZRUNDUHD
WKURXJKRXW WKH IORRU XQGHU FRQVLGHUDWLRQ RU WKDWLQFOXGHVH[LWVRUFRUULGRUVVKDUHGE\PRUHWKDQ
EH\RQG 7KH SURYLVLRQV RI WKLV VHFWLRQ DUH RQHWHQDQWZLWKLQWKHZRUNDUHDVKDOOEHSURYLGHG
DSSOLFDEOH RQO\ ZKHQ WKH DOWHUDWLRQ ZRUN DUHD ZLWK WKH PLQLPXP QXPEHU RI H[LWV EDVHG RQ WKH
LQFOXGHVH[LWVRUFRUULGRUVVKDUHGE\PRUHWKDQ RFFXSDQF\ DQG WKH RFFXSDQW ORDG LQ DFFRUGDQFH
RQH WHQDQW $V VXFK LQ PXOWLSOHWHQDQW ZLWK WKH 6%&  ,Q DGGLWLRQ WKH H[LWV VKDOO
EXLOGLQJV ZKHUH WKH UHFRQILJXUDWLRQ RI VSDFH FRPSO\ZLWK6HFWLRQVDQG
WDNHV SODFH LQ RQH RI WKH WHQDQW VSDFHV DQG
GRHV QRW LQFOXGH FRUULGRUV RU H[LWV WKDW DIIHFW ™ *LYHQWKDWWKHQXPEHURIH[LWVLVVRLPSRUWDQW
RWKHUVWKHWHQDQWVSDFHXQGHUJRLQJDOWHUDWLRQV WKLVVHFWLRQUHTXLUHVWKDWHYHU\VWRU\ZLWKDZRUN
QHHG RQO\ FRPSO\ ZLWK WKH PHDQVRIHJUHVV DUHDWKDWIDOOVZLWKLQWKHOLPLWDWLRQVGLVFXVVHGLQ
UHTXLUHPHQWV RI 6HFWLRQ  ,Q HVVHQFH LI 6HFWLRQ  EH SURYLGHG ZLWK D PLQLPXP
WKHUH DUH DQ\ HJUHVV FRQGLWLRQV WKDW DUH QXPEHU RI H[LWV DV UHTXLUHG IRU QHZ
FRQVLGHUHG XQVDIH WKH FRQGLWLRQV PXVW EH FRQVWUXFWLRQLQDFFRUGDQFHZLWKWKH6%&
UHPHGLHG,WLVQRWQHFHVVDU\WRFRQILUPWKDWWKH 7KH FRGH GRHV KRZHYHU SURYLGH H[FHSWLRQV
OHYHO RI HJUHVV VDIHW\ KDV QRW EHHQ UHGXFHG WKDW DOORZ VLQJOHH[LW FRQVWUXFWLRQ PDQ\ RI
FRPSDUHGWRWKHFXUUHQWFRQGLWLRQV ZKLFKDUHFRPPRQWRWKH6%&DVOLVWHGLQ

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

6HFWLRQ,QDGGLWLRQILUHHVFDSHVFDQ H[LWDFFHVVWUDYHOGLVWDQFHGRHVQRWH[FHHG
EHXVHGDVDVROXWLRQZKHUHPRUHWKDQRQHH[LW P
LVUHTXLUHGDVSURYLGHGLQ6HFWLRQ  ,QEXLOGLQJVRI*URXS5RFFXSDQF\WKDWDUH
HTXLSSHG WKURXJKRXW ZLWK DQ DXWRPDWLF ILUH
 6LQJOHH[LW EXLOGLQJV  2QO\ RQH VSULQNOHU V\VWHP D VLQJOH H[LW VKDOO EH
H[LW LV UHTXLUHG IURP EXLOGLQJV DQG VSDFHV RI WKH SHUPLWWHG IURP D EDVHPHQW RU VWRU\ EHORZ
IROORZLQJRFFXSDQFLHV JUDGH LI HYHU\ GZHOOLQJ XQLW RQ WKDW IORRU LV
HTXLSSHGZLWKDQDSSURYHGZLQGRZSURYLGLQJ
 ,Q*URXS$%()08DQG6RFFXSDQFLHV DFOHDURSHQLQJRIDW OHDVWPLQ DUHDD
D VLQJOH H[LW LV SHUPLWWHG LQ WKH VWRU\ DW WKH PLQLPXP QHW FOHDU RSHQLQJ RI  PP LQ
OHYHORIH[LWGLVFKDUJHZKHQWKHRFFXSDQWORDG KHLJKWDQGPPLQZLGWKDQGDVLOOKHLJKW
RIWKHVWRU\GRHVQRWH[FHHGDQGWKHH[LW RI QRW PRUH WKDQ  P DERYH WKH ILQLVKHG
DFFHVVWUDYHOGLVWDQFHGRHVQRWH[FHHGP IORRU
 *URXS%)DQG6RFFXSDQFLHVQRWPRUH  ,QEXLOGLQJVRI*URXS5RFFXSDQF\RIDQ\
WKDQWZRVWRULHVLQKHLJKWWKDWDUHQRWJUHDWHU KHLJKWZLWKQRWPRUHWKDQIRXUGZHOOLQJXQLWV
WKDQPSHUIORRUZKHQWKHH[LWDFFHVV SHU IORRU ZLWK D VPRNH SURRI HQFORVXUH RU
WUDYHO GLVWDQFH GRHV QRW H[FHHG  P 7KH RXWVLGHVWDLUZD\DVDQH[LWDQGZLWKVXFKH[LW
PLQLPXP ILUHUHVLVWDQFH UDWLQJ RI WKH H[LW ORFDWHGZLWKLQPRIWUDYHOWRWKHHQWUDQFH
HQFORVXUHDQGRIWKHRSHQLQJSURWHFWLRQVKDOO GRRUVWRDOOGZHOOLQJXQLWVVHUYHGWKHUHE\
EHKRXU ,Q EXLOGLQJV RI *URXS 5 RFFXSDQF\
 2SHQ SDUNLQJ VWUXFWXUHV ZKHUH YHKLFOHV DUH HTXLSSHG WKURXJKRXW ZLWK DQ DXWRPDWLF ILUH
PHFKDQLFDOO\SDUNHG VSULQNOHU V\VWHP RQO\ RQH H[LW VKDOO EH
 ,Q *URXS 5 RFFXSDQFLHV WKH PD[LPXP UHTXLUHG IURP EDVHPHQWV RU VWRULHV EHORZ
RFFXSDQWORDGH[FOXGLQJVWDIILV JUDGH
 *URXSV5DQG5QRWPRUHWKDQWZRVWRULHV ™ 7KHUH DUH  VSHFLILF FRQGLWLRQV GHVFULEHG
LQKHLJKWZKHQWKHUHDUHQRWPRUHWKDQIRXU ZKHUH WKH EXLOGLQJ RU D FHUWDLQ VWRU\ FRXOG EH
GZHOOLQJ XQLWV SHU IORRU DQG WKH H[LW DFFHVV SURYLGHG ZLWK RQO\ RQH VLQJOH H[LW 6HYHUDO RI
WUDYHOGLVWDQFHGRHVQRWH[FHHGP7KH WKHVH  FRQGLWLRQV DUH HLWKHU WKH VDPH RU
PLQLPXP ILUHUHVLVWDQFH UDWLQJ RI WKH H[LW VLPLODU WR YDULRXV SURYLVLRQV LQ WKH 6%& 
HQFORVXUHDQGRIWKHRSHQLQJSURWHFWLRQVKDOO )RUH[DPSOH,WHPLQWKLVVHFWLRQLVVLPLODUWR
EHKRXU WKHILUVWURZLQ6%&7DEOH7KH
RQO\ GLIIHUHQFH LV WKDW ,WHP  RI WKLV VHFWLRQ
 ,Q PXOWLOHYHO GZHOOLQJ XQLWV LQ EXLOGLQJV RI
DOORZV WKH FRQGLWLRQ DW WKH OHYHO RI H[LW
RFFXSDQF\*URXS5RU5DQH[LWVKDOOQRW GLVFKDUJHLQPXOWLSOHVWRU\EXLOGLQJVZKLOH6%&
EHUHTXLUHGIURPHYHU\OHYHORIWKHGZHOOLQJ 7DEOHDOORZVWKLVFRQGLWLRQLQD
XQLW SURYLGHG WKDW RQH RI WKH IROORZLQJ RQHVWRU\EXLOGLQJRQO\,WHPRIWKLVVHFWLRQLV
FRQGLWLRQVLVPHW WKHVDPHDV ([FHSWLRQWR 6%&6HFWLRQ
  DQG ,WHP  LV WKH VDPH DV WKH WKLUG
 7KHWUDYHOGLVWDQFHZLWKLQWKHGZHOOLQJ URZ LQ 6%&  7DEOH  7KH
XQLWGRHVQRWH[FHHGPRU FKDUDFWHULVWLFV FRQVLGHUHG IRU D EXLOGLQJ WR EH
 7KH EXLOGLQJ LV QRW PRUH WKDQ WKUHH RI VLQJOHH[LW FRQVWUXFWLRQ LQFOXGH RFFXSDQF\
VWRULHV LQ KHLJKW DQG DOO WKLUGIORRU PD[LPXPKHLJKWRIEXLOGLQJDERYHJUDGHSODQH
PD[LPXPRFFXSDQWVRUGZHOOLQJXQLWVSHUIORRU
VSDFHLVSDUWRIRQHRUPRUHGZHOOLQJ
DQG H[LW DFFHVV WUDYHO GLVWDQFH SHU IORRU 7KH
XQLWV ORFDWHG LQ SDUW RQ WKH VHFRQG RFFXSDQW ORDG RI HDFK IORRU LV GHWHUPLQHG LQ
IORRUDQGQRKDELWDEOHURRPZLWKLQDQ\ DFFRUGDQFH ZLWK WKH SURYLVLRQV RI 6%& 
VXFK GZHOOLQJ XQLWVKDOO KDYH D WUDYHO 6HFWLRQ7KHH[LWDFFHVVWUDYHOGLVWDQFH
GLVWDQFHWKDWH[FHHGVPIURPWKH LVPHDVXUHGDORQJWKHQDWXUDODQGXQREVWUXFWHG
RXWVLGHRIWKHKDELWDEOHURRPHQWUDQFH SDWK WR WKH H[LW DV GHVFULEHG LQ 6%& 
GRRUWRWKHLQVLGHRIWKHHQWUDQFHGRRU 6HFWLRQ
WRWKHGZHOOLQJXQLW 
  )LUHHVFDSHVUHTXLUHG)RURWKHU
 ,Q*URXS5++DQG,RFFXSDQFLHVDQG WKDQ *URXS , ZKHUH PRUH WKDQ RQH H[LW LV
LQ URRPLQJ KRXVHV DQG FKLOG FDUH FHQWHUV D UHTXLUHG DQ H[LVWLQJ RU QHZO\ FRQVWUXFWHG ILUH
VLQJOHH[LWLVSHUPLWWHGLQDRQHVWRU\EXLOGLQJ HVFDSHFRPSO\LQJZLWK6HFWLRQVKDOOEH
ZLWKDPD[LPXPRFFXSDQWORDGRIDQGWKH

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

DFFHSWHGDVSURYLGLQJRQHRIWKHUHTXLUHGPHDQVRI 
HJUHVV 7KHZLQGRZVKDOOKDYHDPLQLPXPQHW
™ 7KH XVH RI ILUH HVFDSHV DV DQ HOHPHQW RI WKH
FOHDU RSHQLQJ RI  P RU  P
UHTXLUHGPHDQVRIHJUHVVKDVQRWEHHQDOORZHG ZKHUHORFDWHGDWJUDGH
E\ EXLOGLQJ FRGHV LQ PDQ\ \HDUV 7KH W\SLFDO 7KHPLQLPXPQHWFOHDURSHQLQJKHLJKW
SUREOHPVZLWKILUHHVFDSHVDUHWKHGLIILFXOW\RI VKDOOEHPPDQGQHWFOHDURSHQLQJ
DFFHVVLQFRQGLWLRQVRISDQLFWKHPLQLPDOZLGWK ZLGWKVKDOOEHPP
DQG WKHLU ORFDWLRQ RXWVLGH WKH EXLOGLQJ ZKHUH  7KH ERWWRP RI WKH FOHDURSHQLQJ VKDOO
WKH\FDQEHVXEMHFWHGWRLFHVQRZDQGVOLSSHU\ QRW EH JUHDWHU WKDQ  P DERYH WKH
FRQGLWLRQV ,Q H[LVWLQJ EXLOGLQJV KRZHYHU ILUH IORRU
HVFDSHVRIIHUDVROXWLRQZKHUHWKHFRQVWUXFWLRQ  7KH RSHUDWLRQ RI WKH ZLQGRZ VKDOO
RIDQHZH[LWVWDLUPD\EHLPSRVVLEOHEHFDXVH
FRPSO\ZLWKWKHRSHUDWLRQDOFRQVWUDLQWV
RIWKHSUR[LPLW\RIWKHH[WHULRUZDOOVWRSURSHUW\
OLQHV WKH LQIHDVLELOLW\ RI SHQHWUDWLQJ RU
RIWKH6%&
UHDUUDQJLQJ LQWHULRU RU H[WHULRU VWUXFWXUDO 
HOHPHQWV WKH SURKLELWLYH FRVW RI PDMRU  1HZO\ FRQVWUXFWHG ILUH HVFDSHV VKDOO EH
UHVWUXFWXULQJRIEXLOGLQJHOHPHQWVRUWKHLPSDFW SHUPLWWHG RQO\ ZKHUH H[WHULRU VWDLUZD\V
RQ RWKHU UHOHYDQW RFFXSDQF\ LVVXHV $V VXFK FDQQRWEHXWLOL]HGEHFDXVHRIORWOLQHVOLPLWLQJ
WKLVVHFWLRQSURYLGHVIRUWKHXVHRI H[LVWLQJRU WKHVWDLUZD\VL]HRUEHFDXVHRIWKHVLGHZDONV
QHZO\FRQVWUXFWHGILUHHVFDSHVWREHXVHGDVD DOOH\VRUURDGVDWJUDGHOHYHO
UHTXLUHG HOHPHQW RI WKH PHDQVRIHJUHVV  2SHQLQJV ZLWKLQ  P RI ILUH HVFDSH
V\VWHP LQ FDVHV ZKHUH PRUH WKDQ RQH H[LW LV VWDLUZD\VVKDOOEHSURWHFWHGE\ILUHDVVHPEOLHV
UHTXLUHG DQG WKH ILUH HVFDSH PHHWV WKH
KDYLQJ PLQLPXP  KRXU ILUHUHVLVWDQFH
FRQVWUXFWLRQ UHTXLUHPHQWV RI WKLV VHFWLRQ 7KH
ILUHHVFDSHVFDQEHFRXQWHGRQO\DVRQHRIWKH
UDWLQJV
UHTXLUHGPHDQVRIHJUHVVDQGQRWERWK6SHFLILF ([FHSWLRQ  2SHQLQJ SURWHFWLRQ VKDOO QRW EH
GHWDLO UHTXLUHPHQWV DQG FRQVWUXFWLRQ UHTXLUHGLQEXLOGLQJVHTXLSSHGWKURXJKRXWZLWKDQ
UHTXLUHPHQWVDUHJLYHQLQ6HFWLRQV DSSURYHGDXWRPDWLFVSULQNOHUV\VWHP
DQG
 ,QDOOEXLOGLQJVRI*URXS(RFFXSDQF\XSWR
™ 6LQFHWKLVLVORFDWHGLQWKHDOWHUDWLRQVVHFWLRQRI
WKHFRGHLWLVLPSRUWDQWWRVWUHVVWKDWWKLVFRXOG DQG LQFOXGLQJ WKH WK JUDGH EXLOGLQJV RI
QRW EH XVHG IRU D VHFRQG H[LW IRU D YHUWLFDO *URXS , RFFXSDQF\ URRPLQJ KRXVHV DQG
DGGLWLRQ $GGLWLRQV DUH DGGUHVVHG E\ &KDSWHU FKLOGFDUH FHQWHUV ODGGHUV RI DQ\ W\SH DUH
 DQG DUH HVVHQWLDOO\ FRQVLGHUHG D QHZ SURKLELWHGRQILUHHVFDSHVXVHGDVDUHTXLUHG
EXLOGLQJLQWHUPVRIWKHDSSOLFDWLRQRIWKH6%& PHDQVRIHJUHVV

™ 7KLV VHFWLRQ SURYLGHV WKH DFFHVV DQG GHWDLO
™ *URXS , RFFXSDQFLHV DUH VSHFLILFDOO\
FRQGLWLRQV WKDW PXVW EH IROORZHG LQ RUGHU WR
UHVWULFWHGIURPXVLQJWKHILUHHVFDSHDOORZDQFH
PDNHDILUHHVFDSHDQDFFHSWDEOHVHFRQGH[LW
IRU DQ H[LVWLQJ EXLOGLQJ 7KH UHVWULFWLRQ LV
1HZO\ FRQVWUXFWHG ILUH HVFDSHV DUH DOORZHG
VRPHZKDW LQWXLWLYH EDVHG RQ WKH W\SH RI
RQO\ LI WKH FRQVWUXFWLRQ RI H[WHULRU VWDLUV LV
RFFXSDQF\ EXW LQ RUGHU WR EH FRQVLVWHQW ZLWK
LPSRVVLEOH EHFDXVH RI SURSHUW\ OLQHV
OLFHQVLQJUHTXLUHPHQWVWKLVVSHFLILFUHVWULFWLRQLV
VLGHZDONVDOOH\VRUURDGV,IDOORZHGWREHXVHG
QHFHVVDU\
E\ WKLV VHFWLRQ WKHQ D ILUH HVFDSH PXVW EH
 )LUH HVFDSH DFFHVV DQG GHWDLOV UHDGLO\ DFFHVVLEOH ZLWKRXW DQ\ REVWUXFWLRQV
)LUHHVFDSHVVKDOOFRPSO\ZLWKDOORIWKHIROORZLQJ DQGDFFHVVWRLWPXVWEHWKURXJKDGRRUZLWKWKH
UHTXLUHPHQWV H[FHSWLRQRIDVLQJOHGZHOOLQJXQLWVOHHSLQJXQLW
RUVSDFHVZLWKDPD[LPXPRFFXSDQWORDGRI
LQ ZKLFK FDVH DFFHVV WKURXJK D ZLQGRZ LV
 2FFXSDQWVVKDOOKDYHXQREVWUXFWHGDFFHVVWR
DFFHSWDEOH7KHUHTXLUHPHQWVIRUWKHVL]HDQG
WKHILUHHVFDSHZLWKRXWKDYLQJWRSDVVWKURXJK ORFDWLRQRIDZLQGRZSURYLGLQJDFFHVVWRWKHILUH
DURRPVXEMHFWWRORFNLQJ HVFDSHPLUURUVWKHUHTXLUHPHQWIRUHPHUJHQF\
 $FFHVVWRDQHZILUHHVFDSHVKDOOEHWKURXJKD HVFDSHDQGUHVFXHRSHQLQJVFRQWDLQHGLQ6%&
GRRUH[FHSWWKDWZLQGRZVVKDOOEHSHUPLWWHG &KDSWHU7KHKHLJKWRIWKHERWWRPRIWKH
WRSURYLGHDFFHVVIURPVLQJOHGZHOOLQJXQLWV FOHDURSHQLQJLVOLPLWHGWRPRUOHVVVXFK
RU VOHHSLQJXQLWV LQ *URXS 5 5 DQG , WKDWLWFDQEHXVHGHIIHFWLYHO\DVDQHPHUJHQF\
RFFXSDQFLHVRUWRSURYLGHDFFHVVIURPVSDFHV HVFDSH,IVHFXULW\JULOOHVGHFRUDWLRQVRUVLPLODU
KDYLQJ D PD[LPXP RFFXSDQW ORDG RI  LQ GHYLFHVDUHLQVWDOOHGRQHVFDSHZLQGRZVVXFK
RWKHURFFXSDQF\FODVVLILFDWLRQV LWHPV PXVW EH UHDGLO\ UHPRYDEOH WR SHUPLW
RFFXSDQWHVFDSHZLWKRXWWKHXVHRIDQ\WRROV

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

NH\VRUDIRUFHJUHDWHUWKDQWKDWUHTXLUHGIRUWKH IXQFWLRQ DV LQWHQGHG IRU D UHTXLUHG PHDQV RI

QRUPDORSHUDWLRQRIWKHZLQGRZ HJUHVV
™ :KHUH EDUV JULOOHV RU JUDWHV DUH SODFHG RYHU
WKHHPHUJHQF\HVFDSHDQGUHVFXHRSHQLQJLW  'LPHQVLRQV6WDLUZD\VVKDOOEHDW
LV LPSRUWDQW WKDW WKH\ DUH HDVLO\ UHPRYDEOH OHDVWPPZLGHZLWKULVHUVQRWPRUHWKDQDQG
7KXV WKH UHTXLUHPHQWV IRU HDVH RI RSHUDWLRQ WUHDGVQRWOHVVWKDQPP/DQGLQJVDWWKHIRRW
DUHWKHVDPHDVWKRVHIRUZLQGRZV RI VWDLUZD\VVKDOO EH QRW OHVV WKDQ  P ZLGH E\
™ $OO RSHQLQJV ZLWKLQ  P RI ILUH HVFDSH  PP ORQJ DQG ORFDWHGQRWPRUH WKDQ PP
VWDLUZD\VXVHGIRUDUHTXLUHGPHDQVRIHJUHVV EHORZWKHGRRU
PXVWEHSURWHFWHGE\ILUHDVVHPEOLHVKDYLQJD
PLQLPXPKRXUILUHUHVLVWDQFHUDWLQJ7KLVLV ™ 6HFWLRQV  DQG  SURYLGH
FRQVLVWHQWZLWKSURWHFWLRQRIRSHQLQJVDGMDFHQW WKH PLQLPXP VWUXFWXUDO DQG GLPHQVLRQDO
WRH[WHULRUH[LWVWDLUZD\VUHTXLUHGE\6%& UHTXLUHPHQWVIRUQHZILUHHVFDSHV([LVWLQJILUH
6HFWLRQ HVFDSHV DUH QRW UHVWULFWHG WR FRPSOLDQFH ZLWK
™ 1RWH WKDW WKH H[WHULRU H[LW VWDLUZD\ 6HFWLRQVDQGEXWPXVW
UHTXLUHPHQWV LQ 6HFWLRQ  UHIHUHQFH WKH EH LQVSHFWHG DQG HYDOXDWHG WR EH VXUH QR
LQWHULRU H[LW VWDLUZD\ UHTXLUHPHQWV IRU WKLV GDQJHURXV FRQGLWLRQV H[LVW DQG WKDW WKH\ ZLOO
SXUSRVH0XFKWKHVDPHDV6%&6HFWLRQ IXQFWLRQ DV LQWHQGHG IRU D UHTXLUHG PHDQV RI
WKHSURWHFWLRQRIRSHQLQJVZLWKLQP HJUHVV
RI ILUH HVFDSHV LV QRW UHTXLUHG IRU EXLOGLQJV 0H]]DQLQHV0H]]DQLQHVLQWKHZRUNDUHD
HTXLSSHG WKURXJKRXW ZLWK DQ DSSURYHG DQG ZLWK DQ RFFXSDQW ORDG RI PRUH WKDQ  RU LQ
DXWRPDWLFVSULQNOHUV\VWHPLQDFFRUGDQFHZLWK
ZKLFKWKHWUDYHOGLVWDQFHWRDQH[LWH[FHHGVP
1)3$RU5
™ ([DPSOH
VKDOOKDYHDFFHVVWRDWOHDVWWZRLQGHSHQGHQWPHDQV
™ $QH[LVWLQJWZRVWRU\GRZQWRZQEXLOGLQJLVXVHG RIHJUHVV
IRUVKRSVRQWKHILUVWIORRUDQGWKHVHFRQGIORRU ([FHSWLRQ7ZRLQGHSHQGHQWPHDQVRIHJUHVVDUH
LVXVHGIRURIILFHVRIVHYHUDOWHQDQWV7KHRZQHU QRW UHTXLUHG ZKHUH WKH WUDYHO GLVWDQFH WR DQ H[LW
ZLVKHV WR UHDUUDQJH DGG LQWHULRU SDUWLWLRQV WR
GRHVQRWH[FHHGPDQGWKHEXLOGLQJLVSURWHFWHG
DQGDOWHUDERXWSHUFHQWRIWKHVHFRQGIORRU
7KH VHFRQG IORRU KDV RQO\ RQH VWDLUZD\ DQG
WKURXJKRXWZLWKDQDXWRPDWLFVSULQNOHUV\VWHP
EHFDXVH RI LWV FXUUHQW XVHV DQG WKH EXLOGLQJ ™ 7KH PHDQVRIHJUHVV UHTXLUHPHQWV IRU
ORFDWLRQRQWKHORWLVQRWDEOHWRDGGDVHFRQG PH]]DQLQHVDUHDOPRVWH[DFWO\WKHVDPHDVWKH
VWDLUZD\7KHDUHDRIWKHVHFRQGIORRULVVXFK SURYLVLRQVIRXQGLQWKH 6%&7KLVDSSOLHV
WKDWLWZRXOGUHTXLUHWZRVWDLUZD\VDFFRUGLQJWR WRWKRVHPH]]DQLQHVWKDWDUHLQWKHZRUNDUHD
WKH6%& 7KH WULJJHUV IRU UHTXLULQJ WZR LQGHSHQGHQW
™ 4:RXOGWKHDOWHUDWLRQWULJJHUWKHUHTXLUHPHQW PHDQV RI HJUHVV IURP PH]]DQLQHV DUH WKH
RIWKHVHFRQGVWDLUZD\" RFFXSDQW ORDG EHLQJ JUHDWHU WKDQ  RU WKH
™ $ 7KLV ZRXOG UHTXLUH WKH FRQVWUXFWLRQ RI D WUDYHOGLVWDQFHEHLQJJUHDWHUWKDQPZLWKDQ
VHFRQG VWDLUZD\ KRZHYHU LW ZRXOG DOORZ ILUH H[FHSWLRQ IRU VSULQNOHUHG EXLOGLQJV DOORZLQJ
HVFDSHVWREHXWLOL]HGLQWKLVFDVHVHH6HFWLRQV WUDYHO GLVWDQFH XS WR  P 6LPLODU SURYLVLRQV
DQG DUH IRXQG LQ 6%&  6HFWLRQV  DQG
7KHFRGHLVVRPHZKDWOHVVUHVWULFWLYH
 &RQVWUXFWLRQ  7KH ILUH HVFDSH
WKDQ WKH 6%&  VLQFH WKH RFFXSDQW ORDG
VKDOOEHGHVLJQHGWRVXSSRUWDOLYHORDGRI3D WULJJHULVVHWDWRYHUUHJDUGOHVVRIRFFXSDQF\
DQGVKDOOEHFRQVWUXFWHGRIVWHHORURWKHUDSSURYHG FODVVLILFDWLRQ ZKHUHDV 6%&  7DEOH
QRQFRPEXVWLEOHPDWHULDOV)LUHHVFDSHVFRQVWUXFWHG KDVDORZHUOHYHORIWKUHVKROGWULJJHU
RI ZRRG QRW OHVV WKDQ QRPLQDO  PP WKLFN DUH IRU KD]DUGRXV LQGXVWULDO UHVLGHQWLDO DQG
SHUPLWWHG RQ EXLOGLQJV RI 7\SH 9 FRQVWUXFWLRQ VWRUDJH RFFXSDQFLHV $GGLWLRQDOO\ WKH FRGH
:DONZD\VDQGUDLOLQJVORFDWHGRYHURUVXSSRUWHGE\ OLPLWDWLRQ RI  P >RU  P LQ VSULQNOHUHG
FRPEXVWLEOHURRIVLQEXLOGLQJVRI7\SHV,,,DQG,9 EXLOGLQJV@ LV WKH PHDVXUHPHQW RI WUDYHO
FRQVWUXFWLRQ DUH SHUPLWWHG WR EH RI ZRRG QRW OHVV GLVWDQFHZKHUHDVWKHVLPLODUSURYLVLRQVLQ6%&
WKDQQRPLQDOPPWKLFN 6HFWLRQDUHWKHPHDVXUHPHQWRI
WKHFRPPRQSDWKRIHJUHVVWUDYHO
™ 6HFWLRQV  DQG  SURYLGH
WKH PLQLPXP VWUXFWXUDO DQG GLPHQVLRQDO 0DLQHQWUDQFH²*URXS$$OOEXLOGLQJV
UHTXLUHPHQWVIRUQHZILUHHVFDSHV([LVWLQJILUH RI*URXS$ZLWKDQRFFXSDQWORDGRIRUPRUH
HVFDSHV DUH QRW UHVWULFWHG WR FRPSOLDQFH ZLWK VKDOOEHSURYLGHGZLWKDPDLQHQWUDQFHFDSDEOHRI
6HFWLRQVDQGEXWPXVW VHUYLQJDVWKHPDLQH[LWZLWKDQHJUHVVFDSDFLW\RI
EH LQVSHFWHG DQG HYDOXDWHG WR EH VXUH QR DW OHDVW RQHKDOI RI WKH WRWDO RFFXSDQW ORDG 7KH
GDQJHURXV FRQGLWLRQV H[LVW DQG WKDW WKH\ ZLOO

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

UHPDLQLQJH[LWVVKDOOEHFDSDEOHRISURYLGLQJRQH DFFRUGDQFH ZLWK WKH UHTXLUHPHQWV RI 6HFWLRQV

KDOIRIWKHWRWDOUHTXLUHGH[LWFDSDFLW\ DQG
([FHSWLRQ :KHUH WKHUH LV QR ZHOOGHILQHG PDLQ 7KHWULJJHUVIRUUHTXLULQJWZRHJUHVVGRRUZD\VDUH
H[LWRUZKHUHPXOWLSOHPDLQH[LWVDUHSURYLGHGH[LWV VLPLODU LQ VRPH UHVSHFWV WR WKH 6%&  WULJJHUV
VKDOO EH SHUPLWWHG WR EH GLVWULEXWHG DURXQG WKH 6HFWLRQ  UHODWHV WKHVH WULJJHUV IRU DOO
SHULPHWHU RI WKH EXLOGLQJ SURYLGHG WKDW WKH WRWDO RFFXSDQFLHV DQG 6HFWLRQ  GHDOV ZLWK
ZLGWKRIHJUHVVLVQRWOHVVWKDQSHUFHQWRIWKH *URXS,RFFXSDQFLHV
UHTXLUHGZLGWK  2FFXSDQW ORDG DQG WUDYHO
™ $VVHPEO\ RFFXSDQF\ HJUHVV SDUWLFXODUO\ WKH
GLVWDQFH ,Q DQ\ ZRUN DUHD DOO URRPV DQG VSDFHV
FDSDFLW\ RI WKH PDLQ HQWUDQFHPDLQ H[LW LV VR KDYLQJDQRFFXSDQWORDGJUHDWHUWKDQRULQZKLFK
FULWLFDO IRU DVVHPEO\ RFFXSDQFLHV ZLWK D KLJK WKH WUDYHO GLVWDQFH WR DQ H[LW H[FHHGV  P VKDOO
RFFXSDQW ORDG WKDW WKH FRGH LQ WKLV VHFWLRQ KDYHDPLQLPXPRIWZRHJUHVVGRRUZD\V
SURYLGHVWKHVDPHH[DFWUHTXLUHPHQWVIRXQGLQ
([FHSWLRQV
6HFWLRQ  RI WKH 6%&   IRU QHZ
FRQVWUXFWLRQ $FFRUGLQJO\ ZKHQ /HYHO  RU   6WRUDJH URRPV KDYLQJ D PD[LPXP
DOWHUDWLRQ ZRUN LV WDNLQJ SODFH LQ DVVHPEO\ RFFXSDQWORDGRI
RFFXSDQFLHVZLWKDQRFFXSDQWORDGJUHDWHUWKDQ  :KHUHWKHZRUNDUHDLVVHUYHGE\DVLQJOH
 WKH PDLQ HQWUDQFHH[LW PXVW SURYLGH H[LWLQDFFRUGDQFHZLWK6HFWLRQ
VXIILFLHQWZLGWKWRDFFRPPRGDWHRQHKDOIRIWKH
WRWDORFFXSDQWORDG ™ 7KHGLVFXVVLRQLQ6HFWLRQGHPRQVWUDWHG
™ ([DPSOH KRZ VHYHUDO FULWHULD IRU UHTXLULQJ RQO\ RQH
™ $Q H[LVWLQJ FRPPXQLW\ KDOO VKRZQ LQ PHDQVRIHJUHVVDUHDOVRIRXQGLQWKH6%&
&RPPHQWDU\ )LJXUH  LV WR XQGHUJR IRUQHZFRQVWUXFWLRQ7KHVDPHLVWUXHKHUHWKH
VRPH UHFRQILJXUDWLRQ RI LWV LQWHULRU VSDFHV RFFXSDQWORDGEHLQJJUHDWHUWKDQDQGWUDYHO
7KHUHDUHFXUUHQWO\VHYHUDOPPGRRUVWKDW GLVWDQFHH[FHHGLQJPDUHWKHWULJJHUVXVHG
SURYLGHWKHQHHGHGH[LWZLGWKDQGVHSDUDWLRQRI WRUHTXLUHDWOHDVWWZRHJUHVVGRRUZD\VIRUDOO
H[LWUHTXLUHPHQWVEDVHGRQWKH6%& RFFXSDQFLHV
™ 4 $UH WKHUH DQ\ DGGLWLRQDO UHTXLUHPHQWV ™ ([FHSWLRQ  WR 6HFWLRQ  DGGUHVVHV
UHODWHG WR WKH H[WHULRU GRRUV WKDW PXVW EH VWRUDJH URRPV ZLWK VPDOO RFFXSDQW ORDGV WKDW
FRPSOLHGZLWK" PLJKW EH RI VXFK GLPHQVLRQV WKDW WKH WUDYHO
™ $ <HV EXW RQO\ IRU D /HYHO  DOWHUDWLRQ VLQFH GLVWDQFH PLJKW H[FHHG  P 5HDOL]LQJ WKDW
WKLVRQO\DIIHFWVDVLQJOHWHQDQW6HFWLRQ PDQ\VWRUDJHURRPVDUHJHQHUDOO\QRWRFFXSLHG
™ $PDLQHQWUDQFHPXVWEHSURYLGHGWKDWLVZLGH UHJXODUO\DQGZKHQRFFXSLHGVXFKRFFXSDQWV
HQRXJK WR DFFRPPRGDWH RQHKDOI RI WKH WRWDO DUH HLWKHU HPSOR\HHV RU LQGLYLGXDOV ZKR DUH
RFFXSDQWORDG 7KLVLVDZLGWKRI IDPLOLDU ZLWK WKH VXUURXQGLQJV WKLV H[FHSWLRQ
 î  î    PP VHH 6HFWLRQ DOORZV VWRUDJH URRPV RI DQ\ VL]H DQG DQ\
 RI 6%&  DQG &RPPHQWDU\ )LJXUH OHQJWK RI WUDYHO GLVWDQFH WR KDYH RQO\ RQH
 1RWH WKDW WKLV LV DSSOLFDEOH RQO\ LI HJUHVVGRRUZD\DVORQJDVWKH RFFXSDQW ORDG
FRQVLGHUHG D /HYHO  DOWHUDWLRQ 6HFWLRQ  GRHVQRWH[FHHG
RQO\ DSSOLHV ZKHUH WKHUH LV PRUH WKDQ RQH ™ ([DPSOH
WHQDQW&KDSWHUDQGVSHFLILFDOO\6HFWLRQ ™ $Q H[LVWLQJ JURFHU\ VWRUH DV VKRZQ LQ
QRWHWKDWWKHUHTXLUHPHQWVRI6HFWLRQDSSO\ &RPPHQWDU\ )LJXUH  LV XQGHUJRLQJ
ZKHWKHU RU QRW WKH\ LQFOXGH PRUH WKDQ RQH /HYHORUDOWHUDWLRQV7KHVWRUDJHDUHDKDVD
WHQDQW WUDYHOGLVWDQFHRIPPZLWKLQWKHVWRUDJH
URRP DQG DQ RYHUDOO WUDYHO GLVWDQFH RI 
 (JUHVVGRRUZD\V(JUHVVGRRUZD\VLQDQ\ PPWRH[LWWKHEXLOGLQJ7KHUHLVFXUUHQWO\RQH
ZRUN DUHD VKDOO FRPSO\ ZLWK 6HFWLRQV  HJUHVV GRRUZD\ IURP WKH VWRUDJH URRP WR WKH
WKURXJK UHWDLODUHD
™ 7KLV LV WKH FKDUJLQJ SDUDJUDSK IRU WKH ™ 4 ,V D VHFRQG HJUHVV GRRUZD\ UHTXLUHG IURP
UHTXLUHPHQWVIRUHJUHVVGRRUZD\VLQ/HYHORU WKHVWRUDJHDUHD"
 DOWHUDWLRQV 7KH VSHFLILF UHTXLUHPHQWV DUH ™ $1R7KHVWRUDJHURRPKDVDQRFFXSDQWORDG
JLYHQ LQ 6HFWLRQV  WKURXJK  RI  > î  î  @ DQG IDOOV XQGHU
UHODWLQJ WKH QXPEHU RI HJUHVV GRRUZD\V GRRU ([FHSWLRQ
VZLQJ GRRU FORVLQJ SDQLF KDUGZDUH DQG x 6WRUDJHURRPRFFXSDQWORDG VHH7DEOH
HPHUJHQF\SRZHULQGHWHQWLRQIDFLOLWLHV RI6%&
7ZR HJUHVV GRRUZD\V UHTXLUHG  :RUN x 0D[LPXPWUDYHOGLVWDQFHLQVWRUDJHURRP 
DUHDVVKDOOEHSURYLGHGZLWKWZRHJUHVVGRRUZD\VLQ PP

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

x 2QHHJUHVVGRRUZD\IURPWKHVWRUDJHURRP WUDYHO DV WKH\ VHUYH DQ RFFXSDQW ORDG JUHDWHU

LV DFFHSWDEOH VHH 6HFWLRQ  WKDQDQGDUHHLWKHULQWKHZRUNDUHDRUDORQJ
([FHSWLRQ  DQG &RPPHQWDU\ )LJXUH WKH HJUHVV SDWK WR WKH H[LW GLVFKDUJH GRRU 
 VHUYHV DQ RFFXSDQW ORDG OHVV WKDQ  DQG
GRRUVDQGDUHQRWDORQJWKHSDWKRIHJUHVV
™ 1RWH WKDW HYHQ LI WKH WUDYHO GLVWDQFHV ZHUH RIWKHZRUNDUHDDQGDVVXFKDUHQRWUHTXLUHG
H[FHHGHG WKLV LV D VLQJOHWHQDQW EXLOGLQJ DQG WR FRPSO\ ZLWK 6HFWLRQ  VHH
XQOHVVWKHDOWHUDWLRQLV/HYHOWKLVUHTXLUHPHQW &RPPHQWDU\)LJXUH
ZRXOG QRW DSSO\ 6HFWLRQ  RQO\ DSSOLHV
ZKHUHWKHUHLVPRUHWKDQRQHWHQDQW&KDSWHU 
DQG VSHFLILFDOO\ 6HFWLRQ  QRWH WKDW WKH  6XSSOHPHQWDO UHTXLUHPHQWV IRU
UHTXLUHPHQWVRI 6HFWLRQDSSO\ZKHWKHURU GRRU VZLQJ  :KHUH WKH ZRUN DUHD H[FHHGV 
QRWWKH\LQFOXGHPRUHWKDQRQHWHQDQW SHUFHQWRIWKHIORRUDUHDGRRUVZLQJVKDOOFRPSO\
™ ([FHSWLRQUHIHUVWKHXVHUWR6HFWLRQ ZLWK6HFWLRQWKURXJKRXWWKHIORRU
VRWKDWDEXLOGLQJRUVSDFHWKDWTXDOLILHVXQGHU
DQ\RIWKHLWHPVOLVWHGZRXOGVWLOOEHUHTXLUHG ([FHSWLRQ0HDQVRIHJUHVVZLWKLQRUVHUYLQJRQO\
WRKDYHRQHHJUHVVGRRUZD\ DWHQDQWVSDFHWKDWLVHQWLUHO\RXWVLGHWKHZRUNDUHD
™ 'RRU VZLQJV RQ WKH HQWLUH IORRU H[FHSW GRRUV
 *URXS,,QEXLOGLQJVRI*URXS WKDW DUH LQ D WHQDQW VSDFH ORFDWHG HQWLUHO\
,RFFXSDQF\DQ\SDWLHQWVOHHSLQJURRPRUVXLWHRI RXWVLGH WKH ZRUN DUHD PXVW VZLQJ LQ WKH
SDWLHQW URRPV JUHDWHUWKDQ P ZLWKLQWKH ZRUN GLUHFWLRQRIHJUHVVWUDYHOLIWKHZRUNDUHDRQWKDW
DUHDVKDOOKDYHDPLQLPXPRIWZRHJUHVVGRRUZD\V IORRUH[FHHGVSHUFHQWRIWKHDUHDRIWKDWIORRU
DQG LI WKH RFFXSDQW ORDG WKH GRRUV VHUYH LV
™ *URXS,RFFXSDQFLHVKDYHDGGLWLRQDOFULWHULD JUHDWHUWKDQ$FFRUGLQJO\DOOGRRUVDORQJWKH
IRU SDWLHQW VOHHSLQJ URRPV RU VXLWHV LQ WKLV PHDQVRIHJUHVVWRWKHH[LWGLVFKDUJHPXVWDOVR
VHFWLRQ 7KLV DGGLWLRQDO FULWHULRQ IRU *URXS , VZLQJLQWKHGLUHFWLRQRIHJUHVV
SDWLHQWVOHHSLQJDUHDVLVWDNHQ GLUHFWO\IURPD ™ ([DPSOH
SDUW RI 6%&  6HFWLRQ  DQG ™ $QH[LVWLQJWZRVWRU\EXLOGLQJKDVWKUHHWHQDQWV
UHFRJQL]HVWKHORZSDWLHQWWRVWDIIUDWLRRIWKHVH RQ WKH WKLUG IORRU DV VKRZQ LQ &RPPHQWDU\
IDFLOLWLHV ZKHUH VWDII LV GLUHFWO\ UHVSRQVLEOH IRU )LJXUH  7KH RZQHU SODQV VRPH
WKHVDIHW\RISDWLHQWVLQWKHHYHQWRIDILUH DOWHUDWLRQVRIWKHVHFRQG IORRU7KHZRUNDUHD
ZLOOEHPRUHWKDQSHUFHQWRIWKHVHFRQGIORRU
DUHD
'RRUVZLQJ ,QWKHZRUNDUHDDQGLQWKH ™ 4 :KLFK GRRUV PXVW EH EURXJKW LQWR
HJUHVV SDWK IURP DQ\ ZRUN DUHD WR WKH H[LW FRPSOLDQFHZLWKWKHGRRUVZLQJLQWKHGLUHFWLRQ
GLVFKDUJHDOOHJUHVVGRRUVVHUYLQJDQRFFXSDQWORDG RIHJUHVVWUDYHO"
JUHDWHUWKDQVKDOOVZLQJLQWKHGLUHFWLRQRIH[LW ™ $ 'RRUV        DQG  LQ
&RPPHQWDU\ )LJXUH  PXVW VZLQJ LQ
WUDYHO
WKHGLUHFWLRQRIHJUHVVWUDYHO'RRUVDQG
™ 'RRUVZLQJVPXVWEHFRQVLGHUHGQRWRQO\LQWKH VHUYHDQRFFXSDQWORDGRIPRUHWKDQDQGDUH
ZRUNDUHDEXWDOOWKHZD\IURPWKHZRUNDUHD LQWKHZRUNDUHD'RRUVHUYHVDQRFFXSDQW
DORQJWKHSDWKRIHJUHVVWRWKHH[LWGLVFKDUJH ORDGRIPRUHWKDQDQGLVRXWVLGHRIWKHZRUN
$JDLQGRRUVZLQJLVVXFKDFULWLFDOHOHPHQWRI DUHD KRZHYHU EHFDXVH WKH ZRUN DUHD LV
VDIH HJUHVV WKDW H[LVWLQJ GRRUV PXVW FRPSO\ JUHDWHU WKDQ  SHUFHQW RI WKH VHFRQGIORRU
MXVW DV QHZ GRRUV GR LQ DFFRUGDQFH ZLWK WKH DUHDWKLVGRRUPXVWDOVRVZLQJLQWKHGLUHFWLRQ
6%&  7KH WKUHVKROG RI ³VHUYLQJ DQ RI HJUHVV 'RRUV    DQG  DUH RQ WKH
RFFXSDQWORDGJUHDWHUWKDQ´RIWKLVVHFWLRQLV HJUHVV SDWK IURP WKH ZRUN DUHD WR H[LW
WDNHQ GLUHFWO\ IURP 6%&  6HFWLRQ GLVFKDUJH 'RRUV     DQG  DUH QRW
 UHTXLUHGWRFKDQJHWKHLUVZLQJWRWKHGLUHFWLRQ
™ ([DPSOH RIHJUHVVLIWKH\FXUUHQWO\VZLQJLQZDUG'RRUV
™ $QH[LVWLQJWKUHHVWRU\RIILFHEXLOGLQJDVVKRZQ DQGVHUYHDQRFFXSDQWORDGJUHDWHUWKDQ
LQ &RPPHQWDU\ )LJXUH  LV XQGHUJRLQJ EXWDUHLQDWHQDQWVSDFHFRPSOHWHO\RXWVLGH
/HYHO  RU  DOWHUDWLRQV RQ WKH WKLUG IORRU RIWKH ZRUNDUHDDQGIDOOXQGHUWKHH[FHSWLRQ
6WDLUZD\LVWKHPRVWREYLRXVWKHFORVHVWDQG 'RRUVHUYHVDQRFFXSDQWORDGOHVVWKDQ
WKHPRVWOLNHO\SDWKRIHJUHVVIRUWKHRFFXSDQWV DQGGRRULVDFRQYHQLHQFHGRRUFRQQHFWLQJ
LQWKHZRUNDUHDXQGHUFRQVLGHUDWLRQ WKH WZR SDUWV RI WHQDQW  VHH &RPPHQWDU\
™ 4 :KLFK GRRUV DUH UHTXLUHG WR VZLQJ LQ WKH )LJXUH
GLUHFWLRQRIHJUHVVWUDYHO"
™ $'RRUV DQG LQ &RPPHQWDU\)LJXUH 'RRUFORVLQJ,QDQ\ZRUNDUHDDOOGRRUV
 PXVW VZLQJ LQ WKH GLUHFWLRQ RI HJUHVV RSHQLQJRQWRDQH[LWSDVVDJHZD\DWJUDGHRUDQH[LW

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

VWDLUZD\VKDOOEHVHOIFORVLQJRUDXWRPDWLFFORVLQJ SHUFHQW RI WKH IORRU DUHD SDQLF KDUGZDUH VKDOO

E\OLVWHGFORVLQJGHYLFHV FRPSO\ZLWK6HFWLRQWKURXJKRXWWKHIORRU
([FHSWLRQV ([FHSWLRQ0HDQVRIHJUHVVZLWKLQDWHQDQWVSDFH
WKDWLVHQWLUHO\RXWVLGHWKHZRUNDUHD
 :KHUH H[LW HQFORVXUH LV QRW UHTXLUHG E\ WKH
6%& ™ 6LPLODU WR WKH VXSSOHPHQWDO UHTXLUHPHQWV IRU
 0HDQV RI HJUHVV ZLWKLQ RU VHUYLQJ RQO\ D GRRU VZLQJ DQG GRRU FORVLQJ ZRUN H[FHHGLQJ
WHQDQWVSDFHWKDWLVHQWLUHO\RXWVLGHWKHZRUN  SHUFHQW RI WKH IORRU DUHD WULJJHUV D PRUH
DUHD UHVWULFWLYH UHTXLUHPHQW IRU SDQLF KDUGZDUH DV
ZHOO ([FHSW IRU PHDQV RI HJUHVV LQ DQ
™ 7KHVDPHFRQFHSWVGLVFXVVHGIRUGRRUVZLQJLQ XQDIIHFWHG WHQDQW VSDFH WKH SHUFHQW
WKHZRUNDUHDDQGEH\RQGWKHZRUNDUHDZKHQ WKUHVKROG WULJJHUV D UHTXLUHPHQW IRU SDQLF
VXSSOHPHQWDOSURYLVLRQVDUHDSSOLFDEOHDUHWUXH KDUGZDUHWKURXJKRXWWKHZRUNDUHDIORRU
IRU GRRU FORVLQJV 'RRUV RSHQLQJ LQWR H[LW
SDVVDJHZD\VDQGH[LWVWDLUZD\HQFORVXUHVDUH (PHUJHQF\ SRZHU VRXUFH LQ *URXS ,
UHTXLUHGWREHVHOIFORVLQJRUDXWRPDWLFFORVLQJ 3RZHU RSHUDWHG VOLGLQJ GRRUV RU SRZHURSHUDWHG
E\PHDQVRIOLVWHGGHYLFHV ORFNV IRU VZLQJLQJ GRRUV VKDOO EH RSHUDEOH E\ D
PDQXDOUHOHDVHPHFKDQLVPDWWKHGRRU(PHUJHQF\
SRZHUVKDOOEHSURYLGHGIRUWKHGRRUVDQGORFNVLQ
 6XSSOHPHQWDO UHTXLUHPHQWV IRU DFFRUGDQFHZLWK6HFWLRQRI6%&
GRRU FORVLQJ  :KHUH WKH ZRUN DUHD H[FHHGV 
SHUFHQWRIWKHIORRUDUHDGRRUVVKDOOFRPSO\ZLWK ([FHSWLRQV
6HFWLRQWKURXJKRXWWKHH[LWVWDLUZD\IURP  (PHUJHQF\SRZHULVQRWUHTXLUHGLQIDFLOLWLHV
WKH ZRUN DUHD WR DQG LQFOXGLQJ WKH OHYHO RI H[LW ZLWK  RU IHZHU ORFNV FRPSO\LQJ ZLWK WKH
GLVFKDUJH H[FHSWLRQWR6HFWLRQRI6%&
™ ,I WKH ZRUN DUHD RQ WKH IORRU H[FHHGV   (PHUJHQF\ SRZHU LV QRW UHTXLUHG ZKHUH
SHUFHQW RI WKH DUHD RI WKDW IORRU DQG LI WKH UHPRWH PHFKDQLFDO RSHUDWLQJ UHOHDVHV DUH
RFFXSDQW ORDG LW VHUYHV LV JUHDWHU WKDQ  DOO SURYLGHG
GRRUVDORQJWKHPHDQVRIHJUHVVLQFOXGLQJWKH
OHYHORIH[LWGLVFKDUJHPXVWDOVREHVHOIFORVLQJ ™ 7KLVWKUHVKROGIRUHPHUJHQF\SRZHUIRUGRRUV
RUDXWRPDWLFFORVLQJ ZLWKUHPRWHSRZHUXQORFNLQJHTXLSPHQWLVWKH
VDPHDVJLYHQLQ6%&6HFWLRQIRU
3DQLFKDUGZDUH,QDQ\ZRUNDUHDDQGLQ *URXS,IDFLOLWLHV
WKH HJUHVV SDWK IURP DQ\ ZRUN DUHD WR WKH H[LW
GLVFKDUJHLQEXLOGLQJVRUSRUWLRQVWKHUHRIRI*URXS  2SHQLQJVLQFRUULGRUZDOOV2SHQLQJVLQ
$ DVVHPEO\ RFFXSDQFLHV ZLWK DQ RFFXSDQW ORDG FRUULGRUZDOOVLQDQ\work areaVKDOOFRPSO\ZLWK
JUHDWHU WKDQ  DOO UHTXLUHG H[LW GRRUV HTXLSSHG 6HFWLRQVWKURXJK
ZLWK ODWFKLQJ GHYLFHV VKDOO EH HTXLSSHG ZLWK ([FHSWLRQV  2SHQLQJV LQ FRUULGRUV ZKHUH VXFK
DSSURYHGSDQLFKDUGZDUH FRUULGRUV DUH QRW UHTXLUHG DUH QRW UHTXLUHG WR EH
™ 7KH SDQLF KDUGZDUH SURYLVLRQV DUH RQO\ UDWHGLQDFFRUGDQFHZLWK6%&
DSSOLFDEOH WR *URXS $ RFFXSDQFLHV DQG DUH ™ 7KLV LV WKH FKDUJLQJ SDUDJUDSK IRU WKH
PXFKWKHVDPHDV6%&6HFWLRQ UHTXLUHPHQWV IRU RSHQLQJV LQ FRUULGRU ZDOOV LQ
7KH WULJJHUV IRU UHTXLULQJ SDQLF KDUGZDUH DUH /HYHO  RU  DOWHUDWLRQV 6HFWLRQV 
WKH SUHVHQFH RI ODWFKLQJ GHYLFHV RQ WKH GRRU WKURXJKUHODWHVSHFLILFUHTXLUHPHQWVIRU
DQG WKH RFFXSDQW ORDG RI WKH DVVHPEO\ FRUULGRU GRRUV WUDQVRPV DQG RWKHU FRUULGRU
RFFXSDQF\ EHLQJ JUHDWHU WKDQ  7KH SDQLF RSHQLQJVVXFKDVZLQGRZVDQGVXSSOHPHQWDO
KDUGZDUHUHTXLUHPHQWVDUHUHTXLUHGLQWKHZRUN UHTXLUHPHQWV 7KH SURWHFWLRQV SUHVFULEHG LQ
DUHDVDQGWKHSDWKRIHJUHVVIURPWKHZRUNDUHD WKHVH IRXU VHFWLRQV DUH UHTXLUHG RQO\ LI WKH
WR WKH H[LW GLVFKDUJH 3DQLF KDUGZDUH FRUULGRUXQGHUFRQVLGHUDWLRQLVUHTXLUHGWREHD
UHTXLUHPHQWVFRXOGEHDSSOLFDEOHLQRWKHUSDUWV ILUHUHVLVWDQFH UDWHG FRUULGRU LQ DFFRUGDQFH
RIWKHVSDFHRUEXLOGLQJEH\RQGWKHZRUNDUHD ZLWK WKH 6%&  7KH RYHUDOO JRDO LV WR
DQGWKHSDWKRIHJUHVVZKHQWKHVXSSOHPHQWDO HOLPLQDWH FHUWDLQ XQVXLWDEOH GRRUV DQG
SURYLVLRQVDSSO\ RSHQLQJV LQ UDWHG FRUULGRUV LQ D /HYHO  RU 
ZRUNDUHDHYHQLIWKHUHZDVQRLQWHQWLRQE\WKH
VFRSH RI WKH DOWHUDWLRQ ZRUN WR GR DQ\WKLQJ WR
 6XSSOHPHQWDO UHTXLUHPHQWV IRU WKHVHHOHPHQWV
SDQLFKDUGZDUH:KHUHWKHZRUNDUHDH[FHHGV

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

&RUULGRU GRRUV  &RUULGRU GRRUV LQ WKH D JUHDWHU SURWHFWLRQ UHTXLUHPHQW FRPSDUHG WR
ZRUNDUHDVKDOOQRWEHFRQVWUXFWHGRIKROORZFRUH WKRVH GRRUV WKDW DUH QRW EHLQJ UHSODFHG EXW
ZRRG DQG VKDOO QRW FRQWDLQ ORXYHUV $OO GZHOOLQJ KDSSHQ WR EH LQ WKH ZRUN DUHD EHFDXVH LW LV
XQLWRUVOHHSLQJXQLWFRUULGRUGRRUVLQZRUNDUHDVLQ XQUHDVRQDEOHWRUHTXLUHHYHU\H[LVWLQJGRRUWKDW
SURYLGHV D FHUWDLQ OHYHO RI SURWHFWLRQ WR EH
EXLOGLQJV RI *URXSV 5 5 DQG , VKDOO EH DW
UHSODFHG ZLWKLQ WKH HQWLUH ZRUN DUHD HYHQ
OHDVWPPVROLGFRUHZRRGRUDSSURYHGHTXLYDOHQW WKRXJKWKH\SURYLGHDFHUWDLQOHYHORISURWHFWLRQ
DQG VKDOO QRW KDYH DQ\ JODVV SDQHOV RWKHU WKDQ ZLWKDPPVROLGFRUHGRRURUHTXLYDOHQW
DSSURYHG ZLUHG JODVV RU RWKHU DSSURYHG JOD]LQJ
PDWHULDO LQ PHWDO IUDPHV $OO GZHOOLQJ XQLW RU 7UDQVRPV,QDOOEXLOGLQJVRI*URXS,,
VOHHSLQJ XQLW FRUULGRU GRRUV LQ ZRUN DUHDV LQ 5DQG5RFFXSDQFLHVDOOWUDQVRPVLQFRUULGRU
EXLOGLQJV RI *URXSV 5 5 DQG , VKDOO EH ZDOOVLQZRUNDUHDVVKDOOEHHLWKHUJOD]HGZLWK
HTXLSSHG ZLWK DSSURYHG GRRU FORVHUV $OO PPZLUHGJODVVVHWLQPHWDOIUDPHVRURWKHUJOD]LQJ
UHSODFHPHQW GRRUV VKDOO EH  PP VROLG ERQGHG DVVHPEOLHV KDYLQJ D ILUH SURWHFWLRQ UDWLQJ DV
ZRRG FRUH RU DSSURYHG HTXLYDOHQW XQOHVV WKH UHTXLUHG IRU WKH GRRU DQG SHUPDQHQWO\ VHFXUHG LQ
H[LVWLQJ IUDPH ZLOO DFFRPPRGDWH RQO\ D PP WKH FORVHG SRVLWLRQ RU VHDOHG ZLWK PDWHULDOV
GRRU FRQVLVWHQWZLWKWKHFRUULGRUFRQVWUXFWLRQ
([FHSWLRQV ™ 7UDQVRPVLQFRUULGRUVDUHVSHFLILFDOO\UHJXODWHG
RQO\LQ*URXS,,5DQG5RFFXSDQFLHV
 &RUULGRU GRRUV ZLWKLQ D GZHOOLQJ XQLW RU ,W VKRXOG EH QRWHG DJDLQ WKDW WKH DSSOLFDELOLW\
VOHHSLQJXQLW KHUHLVRQO\LQFRUULGRUVWKDWZRXOGEHUHTXLUHG
 ([LVWLQJ GRRUV LQ EXLOGLQJV SURWHFWHG WR EH UDWHG 7KH 6%&  UHTXLUHV WKDW JODVV
WKURXJKRXW ZLWK DQ DSSURYHG DXWRPDWLF VLGHOLWHVDQGWUDQVRPVSHUIRUPWKHVDPHDVILUH
VSULQNOHU V\VWHP VKDOO EH UHTXLUHG RQO\ WR ZLQGRZVDQGGRHVQRWFRQVLGHUWKHVHHOHPHQWV
SDUW RI WKH GRRU DVVHPEO\ %DVHG RQ WKLV
UHVLVWVPRNHEHUHDVRQDEO\WLJKWILWWLQJDQG
DSSURDFK VLGHOLWHV DQG WUDQVRPV LQ
VKDOOQRWFRQWDLQORXYHUV RFFXSDQFLHVRWKHUWKDQ*URXS,,5DQG
 ,Q JURXS KRPHV ZLWK D PD[LPXP RI  5ZRXOGEHFRYHUHGLQ6HFWLRQZKLFK
RFFXSDQWV DQG WKDW DUH SURWHFWHG ZLWK DQ DGGUHVVHV VDVK JULOOHV DQG ZLQGRZV
DSSURYHGDXWRPDWLFGHWHFWLRQV\VWHPFORVLQJ 7UDQVRPV PXVW PHHW RQH RI WKH IROORZLQJ
GHYLFHVPD\EHRPLWWHG UHTXLUHPHQWV
 'RRU DVVHPEOLHV KDYLQJ D ILUH SURWHFWLRQ ™ 8VHPPZLUHGJODVVLQPHWDOIUDPH
UDWLQJRIDWOHDVWPLQXWHV ™ $ PLQLPXP RI PLQXWH ILUHUHVLVWDQW
SURWHFWHGJOD]LQJIL[HGDVVHPEO\
™ ,QFDVHVZKHUHGRRUVDUHEHLQJUHSODFHGWKHVH ™ 'RDZD\ZLWKWKHWUDQVRPDQGVHDOLWZLWKZDOO
SURYLVLRQVUHTXLUHWKDWDFHUWDLQOHYHORIILUHRU FRQVWUXFWLRQVLPLODUWRWKHH[LVWLQJFRUULGRUZDOO
VPRNH SURWHFWLRQ EH SURYLGHG $V VXFK QR
KROORZ FRUH ZRRG GRRUV DQG QR ORXYHUV DUH 2WKHU FRUULGRU RSHQLQJV  ,Q DQ\ ZRUN
DOORZHGLQDUDWHGFRUULGRULQWKHZRUNDUHD,Q DUHDDQ\RWKHUVDVKJULOOHRURSHQLQJLQDFRUULGRU
DGGLWLRQWRWKLVSURKLELWLRQLIWKHRFFXSDQF\RI DQG DQ\ ZLQGRZ LQ D FRUULGRU QRW RSHQLQJ WR WKH
WKH EXLOGLQJ XQGHUJRLQJ DOWHUDWLRQ LV *URXS % RXWVLGHDLUVKDOOEHVHDOHGZLWKPDWHULDOVFRQVLVWHQW
 5 RU 5 DQG WKH FRUULGRU XQGHU ZLWKWKHFRUULGRUFRQVWUXFWLRQ
FRQVLGHUDWLRQ VHUYHV WKH GZHOOLQJ RU VOHHSLQJ
XQLWV RI WKHVH RFFXSDQFLHV DOO GRRUV LQ WKH ™ 2SHQLQJVRWKHUWKDQGRRUVVXFKDVVDVKJULOOH
UDWHGFRUULGRUVPXVWEHHTXLSSHGZLWKDSSURYHG ORXYHU DQG ZLQGRZV WKDW RSHQ LQWR D ILUH
FORVHUVDQGEHDWOHDVWPPVROLGFRUHZRRG UHVLVWDQFHUDWHGFRUULGRUDQGGRQRWRSHQWRWKH
RUDQDSSURYHGHTXLYDOHQW)XUWKHUWKHVHGRRUV RXWVLGH DLU PXVW EH FRYHUHG DQG VHDOHG WKH
FDQQRWFRQWDLQDQ\JODVVSDQHOVXQOHVVWHVWHG VDPHDVWKHH[LVWLQJFRUULGRUZDOOFRQVWUXFWLRQ
DVVHPEOLHV RU DSSURYHG ZLUHG JODVV LV XVHG 7KLV LV UHTXLUHG WR SURWHFW WKH FRUULGRU IURP
$SSURYHGZLUHGJODVVLVJHQHUDOO\FRQVLGHUHGWR SRWHQWLDO VPRNH FRQWDPLQDWLRQ IURP DGMDFHQW
EHPPZLUHGJODVV URRPV 7KH UHIHUHQFH WR VXFK RSHQLQJV ³QRW
™ 2QFH WKH GRRUV WKDW DUH WR EH UHSODFHG KDYH RSHQLQJ WR WKH RXWVLGH DLU´ LV FRQVLVWHQW ZLWK
EHHQ LGHQWLILHG WKHQ WKH UHSODFHPHQW GRRUV 6%&6HFWLRQZKLFKDOORZVFRUULGRU
PXVWEHDWOHDVWPPVROLGERQGHGZRRGFRUH H[WHULRUZDOOVDQGWKHLURSHQLQJVWRFRPSO\ZLWK
RUDQDSSURYHGHTXLYDOHQWPPVROLGZRRG WKH ILUHUHVLVWDQFH UDWLQJ EDVHG SULPDULO\ RQ
GRRUVDUHDOORZHGIRUVXFKUHSODFHPHQWGRRUV SUR[LPLW\WRSURSHUW\OLQHVRWKHUZLVHNQRZQDV
LIWKH H[LVWLQJIUDPHFDQRQO\DFFRPPRGDWHD ³ILUH VHSDUDWLRQ GLVWDQFH´ 7ZR TXHVWLRQV
PPWKLFNGRRU)LYHH[FHSWLRQVKDYHEHHQ DULVLQJIURPWKLVSURYLVLRQDUHZK\ZLQGRZVLQ
SURYLGHGIRUFRUULGRUGRRUUHTXLUHPHQWVWKDWDUH DUDWHGFRUULGRUDUHUHTXLUHGWREHVHDOHGZLWK
VHOIH[SODQDWRU\ 7KH UHSODFHPHQW GRRUV KDYH DZDOOFRQVWUXFWLRQDQGLVWKHUHDZD\WRDOORZ

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

VXFK ZLQGRZV WR UHPDLQ LQ SODFH DQG QRW EH  :KHUH GHDGHQG FRUULGRUV RI JUHDWHU OHQJWK
FRYHUHGZLWKZDOOFRQVWUXFWLRQ"7KHFRGHLQWKLV DUHSHUPLWWHGE\WKH6%&
VHFWLRQ LQWHQGV WR LPSURYH WKH VDIHW\ DQG  ,QRWKHUWKDQ*URXS$DQG+RFFXSDQFLHVWKH
SURWHFWLRQ RI FRUULGRUV DQG GRHV QRW LQWHQG WR PD[LPXP OHQJWK RI DQ H[LVWLQJ GHDGHQG
QHFHVVDULO\HOLPLQDWHDOOZLQGRZVRSHQLQJLQWR
FRUULGRU VKDOO EH  P LQ EXLOGLQJV
D FRUULGRU $V VXFK LI LW LV GHVLUHG IRU VXFK
ZLQGRZV WR UHPDLQ WKHQ WKH ZLQGRZ DQG LWV HTXLSSHG WKURXJKRXW ZLWK DQ DXWRPDWLF ILUH
JOD]LQJ PXVW FRPSO\ ZLWK WKH ILUH ZLQGRZ DQG DODUPV\VWHPLQVWDOOHGLQDFFRUGDQFHZLWKWKH
ILUHSURWHFWLRQUDWHG JOD]LQJ UHTXLUHPHQWV RI 6%&
6%&  6HFWLRQ  ,W PXVW EH FODULILHG  ,QRWKHUWKDQ*URXS$DQG+RFFXSDQFLHVWKH
WKDWVLGHOLWHVDQGWUDQVRPVDUHQRWFRQVLGHUHG PD[LPXP OHQJWK RI DQ H[LVWLQJ GHDGHQG
SDUWRIWKHGRRUDVVHPEO\DQGDUHUHJXODWHGE\ FRUULGRU VKDOO EH  P LQ EXLOGLQJV
WKLVVHFWLRQ HTXLSSHG WKURXJKRXW ZLWK DQ DXWRPDWLF
VSULQNOHUV\VWHPLQVWDOOHGLQDFFRUGDQFHZLWK
 6XSSOHPHQWDO UHTXLUHPHQWV IRU WKH6%&
RWKHU FRUULGRU RSHQLQJ  :KHUH WKH ZRUN DUHD  ,QRWKHUWKDQ*URXS$DQG+RFFXSDQFLHVWKH
H[FHHGV  SHUFHQW RI WKH IORRU DUHD 6HFWLRQ PD[LPXP OHQJWK RI DQ H[LVWLQJ QHZO\
VKDOOEHDSSOLFDEOHWRDOOFRUULGRUZLQGRZV FRQVWUXFWHG RU H[WHQGHG GHDGHQG FRUULGRU
JULOOVVDVKHVDQGRWKHURSHQLQJVRQWKHIORRU VKDOOQRWH[FHHGPRQIORRUVHTXLSSHG
ZLWKDQDXWRPDWLFVSULQNOHUV\VWHPLQVWDOOHGLQ
([FHSWLRQ0HDQVRIHJUHVVZLWKLQRUVHUYLQJRQO\ DFFRUGDQFHZLWKWKH6%&
DWHQDQWVSDFHWKDWLVHQWLUHO\RXWVLGHWKHZRUNDUHD
™ 7KH GHDGHQG FRUULGRU OLPLWDWLRQV DUH RQO\
™ 7KH VXSSOHPHQWDO SURYLVLRQV ZKHUH WKH ZRUN DSSOLFDEOH ZKHUH PRUH WKDQ RQH H[LW RU H[LW
DUHDH[FHHGVSHUFHQWRIWKHIORRUDUHDDUH DFFHVVGRRUZD\LVUHTXLUHG7KHW\SLFDOH[LVWLQJ
WKHVDPHDVGLVFXVVHGLQDOOSUHYLRXVVHFWLRQV GHDGHQG OHQJWK DOORZHG LV  P ZLWK
$VLQDOORWKHUDUHDVWKHSHUFHQWWKUHVKROG H[FHSWLRQV WKDW DOORZ OHQJWKV XS WR  P
EULQJV D PRUH VHULRXV FRQFHUQ UHJDUGLQJ WKH ([LVWLQJ GHDG HQGV LQ *URXS $ DQG +
DOWHUDWLRQ DQG WKXV PRUH UHVWULFWLYH RFFXSDQFLHV DUH OLPLWHG WR  P XQOHVV
UHTXLUHPHQWVDUHDSSOLHGWKURXJKRXW WKHIORRU ([FHSWLRQRI6%&6HFWLRQFRXOG
HYHQ LQ DUHDV ZKHUH QR DOWHUDWLRQ LV EHLQJ DSSO\ 7KLV LV WKH H[FHSWLRQ WKDW DOORZV
SHUIRUPHG )RU RWKHU FRUULGRU RSHQLQJV XQOLPLWHGGHDGHQGOHQJWKDVORQJDVWKHOHQJWK
KRZHYHUWKHWHQDQWVSDFHVWKDWDUHXQDIIHFWHG RI WKH FRUULGRU LV OHVV WKDQ WZR DQG RQHKDOI
GRQRWUHTXLUHWKHVHDOWHUDWLRQV WLPHVWKHOHDVWZLGWKRIWKHGHDGHQGFRUULGRU
7KH LQVWDOODWLRQ RI DQ DXWRPDWLF ILUH DODUP
6XSSOHPHQWDOUHTXLUHPHQWVIRUFRUULGRU
V\VWHPZRXOGLQFUHDVHWKHDOORZHGOHQJWKRIDQ
RSHQLQJV  :KHUH WKH ZRUN DUHD RQ DQ\ IORRU H[LVWLQJGHDGHQGWRDVPXFKDVPDQG
H[FHHGV  SHUFHQW RI WKH IORRU DUHD WKH WKHLQVWDOODWLRQRIDQDXWRPDWLFVSULQNOHUV\VWHP
UHTXLUHPHQWV RI 6HFWLRQV  WKURXJK  WKURXJKRXW WKH EXLOGLQJ ZRXOG LQFUHDVH WKH
VKDOODSSO\WKURXJKRXWWKHIORRU DOORZHG OHQJWK WR  P 7KHVH WZR
™ 7KH VXSSOHPHQWDO SURYLVLRQV ZKHUH WKH ZRUN DOORZDQFHV DUH RQO\ DSSOLFDEOH WR H[LVWLQJ
DUHDH[FHHGVSHUFHQWRIWKHIORRUDUHDDUH FRUULGRUVWKDWKDSSHQWREHORQJHUWKDQDOORZHG
WKHVDPHDVGLVFXVVHGLQDOOSUHYLRXVVHFWLRQV E\WKH6%&DQGDUHLQWHQGHGWRHQFRXUDJH
$VLQDOORWKHUDUHDVWKHSHUFHQWWKUHVKROG WKHLQVWDOODWLRQRIILUHDODUPVDQGILUHVSULQNOHUV
EULQJV D PRUH VHULRXV FRQFHUQ UHJDUGLQJ WKH WKURXJKRXW WKH EXLOGLQJ ZKHUH VXFK D FRUULGRU
DOWHUDWLRQ DQG WKXV PRUH UHVWULFWLYH H[LVWV ([LVWLQJ GHDGHQG FRUULGRUV PXVW EH
UHTXLUHPHQWVDUHDSSOLHGWKURXJKRXW WKHIORRU EURXJKWLQWRFRPSOLDQFHZLWKWKHPOHQJWK
HYHQ LQ DUHDV ZKHUH QR DOWHUDWLRQ LV EHLQJ OLPLWDWLRQLIWKHVHH[FHSWLRQVDUHQRWXVHG
SHUIRUPHG 7KLV SDUDJUDSK GRHV QRW H[FOXGH  0HDQVRIHJUHVV OLJKWLQJ  0HDQVRI
WHQDQW VSDFHV WKDW DUH XQDIIHFWHG E\ WKH HJUHVV OLJKWLQJ VKDOO EH LQ DFFRUGDQFH ZLWK WKLV
DOWHUDWLRQVWKHUHIRUHWKHGRRUVRSHQLQJVDQG VHFWLRQDVDSSOLFDEOH
WUDQVRPV PXVW EH PRGLILHG DFFRUGLQJ WR WKH
DSSOLFDEOHVHFWLRQ7KLVSDUDJUDSKVXSHUVHGHV ™ 7KLV LV WKH FKDUJLQJ SDUDJUDSK IRU WKH
WKHH[FHSWLRQJLYHQLQ6HFWLRQ UHTXLUHPHQWV IRU PHDQVRIHJUHVV OLJKWLQJ LQ
/HYHO  RU  DOWHUDWLRQV 7KH VSHFLILF
 'HDGHQGFRUULGRUV'HDGHQGFRUULGRUV UHTXLUHPHQWVDUHJLYHQLQ6HFWLRQVDQG
LQDQ\ZRUNDUHDVKDOOQRWH[FHHGP  UHODWLQJ WKH UHTXLUHPHQWV IRU DUWLILFLDO
([FHSWLRQV OLJKWLQJ DQG VXSSOHPHQWDO UHTXLUHPHQWV
UHVSHFWLYHO\

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

$UWLILFLDO OLJKWLQJ UHTXLUHG  0HDQV RI 6XSSOHPHQWDO UHTXLUHPHQWV IRU H[LW

HJUHVV LQ DOO ZRUN DUHDV VKDOO EH SURYLGHG ZLWK VLJQV:KHUHWKHZRUNDUHDRQDQ\IORRUH[FHHGV
DUWLILFLDO OLJKWLQJ LQ DFFRUGDQFH ZLWK WKH  SHUFHQW RI WKDW IORRU DUHD PHDQV RI HJUHVV
UHTXLUHPHQWVRIWKH6%& WKURXJKRXW WKH IORRU VKDOO FRPSO\ ZLWK 6HFWLRQ
™ 7KH PHDQV RI HJUHVV LQ WKH ZRUN DUHD DQG

EH\RQGWKHZRUNDUHDLQWKHHQWLUHIORRULIWKH ([FHSWLRQ0HDQVRIHJUHVVZLWKLQDWHQDQWVSDFH
ZRUNDUHDH[FHHGVSHUFHQWRIWKHIORRUDUHD WKDWLVHQWLUHO\RXWVLGHWKHZRUNDUHD
PXVW EH LOOXPLQDWHG LQ DFFRUGDQFH ZLWK WKH
UHTXLUHPHQWVRIWKH6%&7KLVLOOXPLQDWLRQ ™ 7KH VXSSOHPHQWDO SURYLVLRQV ZKHUH WKH ZRUN
PXVWEHSURYLGHGE\DUWLILFLDOOLJKWLQJDQGPXVW DUHDH[FHHGVSHUFHQWRIWKHIORRUDUHDDUH
EHDPLQLPXPRIPPFDQGOHOX[DWWKH WKH VDPH KHUH DV GLVFXVVHG LQ DOO SUHYLRXV
IORRU OHYHO 7KHUH DUH VRPH H[FHSWLRQV WR WKLV VHFWLRQV $V LQ DOO RWKHUDUHDVWKH SHUFHQW
UHTXLUHPHQW WKDW FDQ EH IRXQG LQ 6HFWLRQV WKUHVKROG EULQJV D PRUH VHULRXV FRQFHUQ
 DQG  RI 6%&  ZKLFK ZRXOG UHJDUGLQJ WKH DOWHUDWLRQ DQG WKXV PRUH
DSSO\KHUH UHVWULFWLYHUHTXLUHPHQWVDUHDSSOLHGWKURXJKRXW
WKH IORRU HYHQLQDUHDVZKHUHQR DOWHUDWLRQLV
6XSSOHPHQWDO UHTXLUHPHQWV IRU PHDQV EHLQJ SHUIRUPHG +RZHYHU WKH WHQDQW VSDFHV
RIHJUHVV OLJKWLQJ  :KHUH WKH ZRUN DUHD RQ DQ\ WKDW DUH XQDIIHFWHG GR QRW UHTXLUH WKHVH
IORRUH[FHHGVSHUFHQWRIWKDWIORRUDUHDPHDQVRI DOWHUDWLRQV
HJUHVV WKURXJKRXW WKH IORRU VKDOO FRPSO\ ZLWK
 +DQGUDLOV7KHUHTXLUHPHQWVRI6HFWLRQV
6HFWLRQ
 DQG VKDOODSSO\ WR KDQGUDLOVIURP
([FHSWLRQ0HDQVRIHJUHVVZLWKLQRUVHUYLQJRQO\ WKHZRUNDUHDIORRUWRDQGLQFOXGLQJWKHOHYHORI
DWHQDQWVSDFHWKDWLVHQWLUHO\RXWVLGHWKHZRUNDUHD H[LWGLVFKDUJH
™ 7KH VXSSOHPHQWDO SURYLVLRQV ZKHUH WKH ZRUN ™ 7KLV LV WKH FKDUJLQJ SDUDJUDSK IRU WKH
DUHDH[FHHGVSHUFHQWRIWKHIORRUDUHDDUH UHTXLUHPHQWV IRU KDQGUDLOV LQ /HYHO  RU 
WKH VDPH KHUH DV GLVFXVVHG LQ DOO SUHYLRXV DOWHUDWLRQV7KHVSHFLILFUHTXLUHPHQWVDUHJLYHQ
VHFWLRQV $V LQ DOO RWKHUDUHDVWKH SHUFHQW LQ 6HFWLRQV  DQG  UHODWLQJ WKH
WKUHVKROG EULQJV D PRUH VHULRXV FRQFHUQ PLQLPXP UHTXLUHPHQWV IRU KDQGUDLOV DQG
UHJDUGLQJ WKH DOWHUDWLRQ DQG WKXV PRUH GHVLJQUHTXLUHPHQWVUHVSHFWLYHO\
UHVWULFWLYHUHTXLUHPHQWVDUHDSSOLHGWKURXJKRXW
WKH IORRU HYHQLQDUHDVZKHUHQR DOWHUDWLRQLV 0LQLPXP UHTXLUHPHQW  (YHU\ UHTXLUHG
EHLQJ SHUIRUPHG +RZHYHU WKH WHQDQW VSDFHV H[LWVWDLUZD\WKDWLVSDUWRIWKHPHDQVRIHJUHVVIRU
WKDW DUH XQDIIHFWHG GR QRW UHTXLUH WKHVH DQ\ZRUNDUHDDQGWKDWKDVWKUHHRUPRUHULVHUVDQG
DOWHUDWLRQV LV QRW SURYLGHG ZLWK DW OHDVW RQH KDQGUDLO RU LQ
ZKLFK WKH H[LVWLQJ KDQGUDLOV DUH MXGJHG WR EH LQ
 ([LW VLJQV  ([LW VLJQV VKDOO EH LQ
GDQJHU RI FROODSVLQJ VKDOO EH SURYLGHG ZLWK
DFFRUGDQFHZLWKWKLVVHFWLRQDVDSSOLFDEOH
KDQGUDLOV IRU WKH IXOO OHQJWK RI WKH VWDLUZD\ RQ DW
™ 7KLV LV WKH FKDUJLQJ SDUDJUDSK IRU WKH OHDVW RQH VLGH $OO H[LW VWDLUZD\V ZLWK D UHTXLUHG
UHTXLUHPHQWV IRU H[LW VLJQV LQ /HYHO  RU  HJUHVV ZLGWK RI PRUH WKDQ  P VKDOO KDYH
DOWHUDWLRQV7KHVSHFLILFUHTXLUHPHQWVDUHJLYHQ KDQGUDLOVRQERWKVLGHV
LQ6HFWLRQVDQG
™ &RPSO\LQJ KDQGUDLOV PXVW EH LQVWDOOHG LQ DOO
:RUNDUHDV0HDQVRIHJUHVVLQDOOZRUN UHTXLUHGH[LWVWDLUZD\VWKDWVHUYHDZRUNDUHD
DUHDV VKDOO EH SURYLGHG ZLWK H[LW VLJQV LQ ,IDGGLWLRQDOVWDLUZD\VDUHSURYLGHGWKDWDUHQRW
DFFRUGDQFHZLWKWKHUHTXLUHPHQWVRIWKH6%& UHTXLUHG E\ WKH 6%&  DV DQ HOHPHQW RI
PHDQV RI HJUHVVWKHQ WKHKDQGUDLOSURYLVLRQV
™ ([LW VLJQV DUH D FULWLFDO HOHPHQW RI GLUHFWLQJ
RI WKLV VHFWLRQ DUH QRW DSSOLFDEOH WR VXFK
RFFXSDQWV WR VDIHW\ RXWVLGH WKH EXLOGLQJ ([LW
VWDLUZD\V 7KH GHJUHH RI FRPSOLDQFH UHTXLUHG
VLJQV PXVW EH LQVWDOOHG LQ DOO /HYHO  RU 
LV OLPLWHG WR D KDQGUDLO RQ RQH VLGH RI WKH
DOWHUDWLRQ ZRUN DUHDV DQG EH\RQG ZKHUH
VWDLUZD\RQO\XQWLOWKHRFFXSDQWORDGVHUYHGLV
VXSSOHPHQWDO UXOHV DSSO\ LQ DFFRUGDQFH ZLWK
VRKLJKWKDWWKHUHTXLUHGZLGWKRIWKHVWDLUZD\
6%&DVLIWKLVZDVQHZFRQVWUXFWLRQ7KH
ZRXOGEHDPLQLPXPRIP$WWKLVOHYHORI
H[LW VLJQ SURYLVLRQV DUH IRXQG LQ 6%& 
RFFXSDQW ORDG FRPSO\LQJ KDQGUDLOV PXVW EH
6HFWLRQ  DQG LW LV LPSRUWDQW WR QRWH WKDW
SURYLGHG RQ ERWK VLGHV RI WKH VWDLUZD\
VXFK UHTXLUHPHQWV DV LOOXPLQDWLRQ DQG SRZHU
,QWHUPHGLDWH KDQGUDLOV DUH QRW UHTXLUHG DV DQ
VRXUFHDSSO\WRH[LWVLJQVEHLQJLQVWDOOHGLQDQ
LPSURYHPHQW FULWHULRQ XQGHU WKH FRGH 7KLV
DOWHUDWLRQ
VHFWLRQUHTXLUHVFRPSO\LQJKDQGUDLOVIRUWKRVH
VWDLUV WKDW KDYH WKUHH RU PRUH ULVHUV 7KLV

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

WULJJHUOHYHOLVDQDWWHPSWWREHFRPSDWLEOHZLWK LQGLYLGXDOO\ VLQFH WKH UHTXLUHPHQWV IRU UHIXJH

DQ H[FHSWLRQ LQ VRPH RI WKH OHJDF\ EXLOGLQJ DUHDV YDU\ (VVHQWLDOO\ HDFK UHIHUHQFHV WKH
FRGHV WKDW GLG QRW UHTXLUH D KDQGUDLO IRU DSSURSULDWH VHFWLRQ LQ WKH 6%&  IRU VXFK
VWDLUZD\V FRQWDLQLQJ OHVV WKDQ IRXU ULVHUV LQ UHTXLUHPHQWV
FHUWDLQRFFXSDQFLHV7KHKDQGUDLOUHTXLUHPHQW
LV DSSOLFDEOH WR UHTXLUHG H[LW VWDLUZD\V WKDW 
VHUYHWKHZRUNDUHDVWDUWLQJDWWKHZRUNDUHD  *URXS ,  ,Q *URXS ,
DOO WKH ZD\ WR WKH OHYHO RI H[LW GLVFKDUJH RFFXSDQFLHV WKH UHTXLUHG FDSDFLW\ RI WKH UHIXJH
LQFOXGLQJWKHH[LWGLVFKDUJHLWVHOI DUHDVIRUVPRNHFRPSDUWPHQWVLQDFFRUGDQFHZLWK
6HFWLRQRIWKH6%&VKDOOEHPDLQWDLQHG
'HVLJQ2QFHDKDQGUDLOLVUHTXLUHGE\WKLV
VHFWLRQ LWV VWUXFWXUDO VWUHQJWK KHLJKW FRQWLQXLW\ ™ 7KH 6%&  UHTXLUHV WKDW *URXS ,
DQG RWKHU GHVLJQ IHDWXUHV PXVW FRPSO\ ZLWK WKH RFFXSDQFLHVSURYLGHWKHODUJHVWRFFXSDQWORDG
6%& RI WKH DGMRLQLQJ FRPSDUWPHQWV 7KH FULWHULD
XVHG WR GHWHUPLQH WKH FDSDFLW\ DUH  P IRU
™ ([DPSOH HDFK FDUH UHFLSLHQW FRQILQHG WR D EHG RU
™ $Q H[LVWLQJ WZRVWRU\ RIILFH EXLOGLQJ KDV WZR VWUHWFKHU DQG QRW OHVV WKDQ  P IRU HDFK
HQFORVHGVWDLUZD\VRQHFRQYHQLHQFHVWDLUZD\ DPEXODWRU\FDUHUHFLSLHQWQRWFRQILQHGWREHGRU
D PH]]DQLQH VWDLU DQG D VWDLU RXWVLGH WKH VWUHWFKHUDQGIRURWKHURFFXSDQWV
EXLOGLQJ DV VKRZQ LQ &RPPHQWDU\ )LJXUH
6WDLUVHLWKHUKDYHQRKDQGUDLOVRUKDYH 
KDQGUDLOV WKDW DUH QRW LQ FRPSOLDQFH ZLWK WKH  *URXS ,  ,Q *URXS ,
6%& RFFXSDQFLHV WKH UHTXLUHG FDSDFLW\ RI WKH UHIXJH
™ 4 :KLFK VWDLUV PXVW EH SURYLGHG ZLWK QHZ DUHDVIRUVPRNHFRPSDUWPHQWVLQDFFRUGDQFHZLWK
FRPSO\LQJ KDQGUDLOV WR EULQJ WKH FXUUHQW 6HFWLRQRI6%&VKDOOEHPDLQWDLQHG
KDQGUDLOVXSWRWKH6%&UHTXLUHPHQWV"
™ $ 6WDLUV  DQG  PXVW EH SURYLGHG ZLWK QHZ ™ )RU *URXS , RFFXSDQFLHV WKH 6%& 
FRPSO\LQJ KDQGUDLOV WR EULQJ WKHLU H[LVWLQJ UHTXLUHVWKDWPSHURFFXSDQWEHSURYLGHG
KDQGUDLOV XS WR WKH 6%&  UHTXLUHPHQWV RQERWKVLGHVRIWKHVPRNHEDUULHUIRUPLQJWKH
7KHVH VWDLUZD\V VHUYH WKH ZRUN DUHD DQG DUH VPRNHFRPSDUWPHQW7KLVZLOOLQFOXGHWKHWRWDO
ERWK SDUW RI WKH UHTXLUHG PHDQVRIHJUHVV RI DGMRLQLQJ VPRNH FRPSDUWPHQWV 2FFXSDQWV
SDWKZD\VHH&RPPHQWDU\)LJXUH LQ *URXS , DUH W\SLFDOO\ DPEXODWRU\ EXW WKHLU
PRYHPHQW LV OLPLWHG EHFDXVH RI WKH QDWXUH RI
 5HIXJHDUHDV:KHUHDOWHUDWLRQVDIIHFWWKH *URXS,RFFXSDQFLHV
FRQILJXUDWLRQRI DQ DUHDXWLOL]HGDV D UHIXJHDUHD

WKHFDSDFLW\RIWKHUHIXJHDUHDVKDOOQRWEHUHGXFHG
 $PEXODWRU\FDUH,QDPEXODWRU\
EHORZ WKDW UHTXLUHG LQ 6HFWLRQV  DQG
FDUH IDFLOLWLHV UHTXLUHG WR EH VHSDUDWHG E\ 6HFWLRQ

 RI 6%&  WKH UHTXLUHG FDSDFLW\ RI WKH
™ 7KLV VHFWLRQ ZDV ZULWWHQ WR SUHYHQW UHGXFHG UHIXJHDUHDVIRUVPRNHFRPSDUWPHQWVLQDFFRUGDQFH
FDSDFLW\ DQG DUUDQJHPHQW RI UHIXJH DUHDV ZLWK6HFWLRQRI6%&VKDOOEHPDLQWDLQHG
UHTXLUHGIRURFFXSDQFLHVWKDWOLPLWPRYHPHQWRI
RFFXSDQWVRUZKHUHRFFXSDQWVDUHLQFDSDEOHRI ™ $PEXODWRU\FDUHIDFLOLWLHVDUHVLPLODUWR*URXS,
VHOISUHVHUYDWLRQ GXULQJ DOWHUDWLRQV 5HIXJH RFFXSDQFLHVDQGFRQWDLQRFFXSDQWVWKDWDUH
DUHDV DUH SDUW RI WKH GHIHQGLQSODFH VWUDWHJ\ LQFDSDEOH RI VHOISUHVHUYDWLRQ EHFDXVH RI WKH
DQG DUH GHVLJQHG ZLWK D SDUWLFXODU FDSDFLW\ LQ SURFHGXUHV DQG VXUJHULHV GRQH DW VXFK
PLQG LQ HDFK VPRNH FRPSDUWPHQW 7KUHH IDFLOLWLHV 7KHUHIRUH WKH FULWHULRQ LV VLPLODU WR
GLIIHUHQWRFFXSDQF\W\SHVLQWKH6DXGL%XLOGLQJ WKDWRI*URXS,RFFXSDQFLHVDQGUHTXLUHV
&RGHV KDYH VXFK UHTXLUHPHQWV ZKLFK DUH PIRUHDFKQRQDPEXODWRU\FDUHUHFLSLHQW7KLV
VSHFLILFDOO\ DQG LQGLYLGXDOO\ DGGUHVVHG LQ DUHD PXVW EH SURYLGHG LQ WKH FRUULGRUV FDUH
6HFWLRQV  WKURXJK  7KH UHFLSLHQW URRPV WUHDWPHQW URRPV ORXQJH RU
KRUL]RQWDOH[LWVDUHEDVHGRQDVWUDWHJ\VLPLODU GLQLQJDUHDVDQGRWKHUORZKD]DUGDUHDVLQWKH
WR GHIHQGLQSODFH EXW FDQ EH DSSOLHG WR DQ\ VPRNH FRPSDUWPHQW 1RWH WKDW RQO\ ODUJHU
RFFXSDQF\ 7KH UHIXJH DUHDV FUHDWHG E\ DPEXODWRU\ FDUH IDFLOLWLHV JUHDWHU WKDQ  P
KRUL]RQWDOH[LWVDOVRQHHGWREHPDLQWDLQHG UHTXLUHVPRNHFRPSDUWPHQWV

 &DSDFLW\  7KH UHTXLUHG FDSDFLW\  +RUL]RQWDO H[LWV  7KH UHTXLUHG

RIUHIXJHDUHDVVKDOOEHLQDFFRUGDQFHZLWK6HFWLRQV FDSDFLW\ RI WKH UHIXJH DUHD IRU KRUL]RQWDO H[LWV LQ
WKURXJK DFFRUGDQFHZLWK6HFWLRQRI6%&VKDOO
EHPDLQWDLQHG
™ 7KH WKUHH VXEVHFWLRQV DGGUHVV WKH QHFHVVDU\
FDSDFLW\ IRU HDFK RI WKH RFFXSDQFLHV

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

™ 7KLVVHFWLRQLVPRUHJHQHUDODQGDGGUHVVHVDQ\ DFFHVVLELOLW\ UHTXLUHPHQWV LQ 6HFWLRQ  DV

RFFXSDQFLHV XVLQJ KRUL]RQWDO H[LWV +RUL]RQWDO ZHOO DV DGGUHVVLQJ WKH SRVVLEOH QHHG IRU DQ
H[LWV DOORZ D VLPLODU FRQFHSW WR VPRNH HOHYDWRUZKHUHDVWDLUZD\RUHVFDODWRULVEHLQJ
FRPSDUWPHQWV ZKHUH RFFXSDQWV VLPSO\ H[LW DGGHG
WKURXJK GRRUV LQWR DQ DGMRLQLQJ DUHD RI WKH
EXLOGLQJVHSDUDWHGE\DILUHEDUULHURUILUHZDOO  6WDLUZD\V DQG HVFDODWRUV LQ H[LVWLQJ
6HFWLRQ  UHTXLUHV  P IRU HDFK EXLOGLQJV  ,Q DOWHUDWLRQV ZKHUH DQ HVFDODWRU RU
RFFXSDQW 7KHUH DUH VHYHUDO VSHFLILF VWDLUZD\LVDGGHGZKHUHQRQHH[LVWHGSUHYLRXVO\DQ
H[FHSWLRQV IRU *URXS , DQG , RFFXSDQFLHV DFFHVVLEOH URXWH VKDOO EH SURYLGHG LQ DFFRUGDQFH
WKDWFRUUHODWHZLWKWKHFULWHULDQRWHGLQ6HFWLRQV ZLWK6HFWLRQVDQGRI6%&
DQG
™ ,IDVWDLUZD\RUHVFDODWRULVDGGHGDVSDUWRIDQ
 *XDUGV  7KH UHTXLUHPHQWV RI 6HFWLRQV DOWHUDWLRQ LQ D ORFDWLRQ ZKHUH RQH GLG QRW
 DQG VKDOODSSO\WR JXDUGVIURP SUHYLRXVO\H[LVWWKHDOWHUDWLRQPXVWDOVRLQFOXGH
WKHZRUNDUHDIORRUWRDQGLQFOXGLQJWKHOHYHORI DQ DFFHVVLEOH URXWH EHWZHHQ WKH VDPH WZR
H[LW GLVFKDUJHEXW VKDOO EH FRQILQHG WR WKH HJUHVV OHYHOV ,I DQ DFFHVVLEOH URXWH LV DOUHDG\
DYDLODEOH EHWZHHQ WKH WZR OHYHOV WKLV
SDWKRIDQ\ZRUNDUHD
UHTXLUHPHQWLVQRWDSSOLFDEOH,IWKHVWDLUZD\RU
™ 7KLV LV WKH FKDUJLQJ SDUDJUDSK IRU WKH HVFDODWRU LV UHSODFLQJ DQ H[LVWLQJ VWDLUZD\ RU
UHTXLUHPHQWV IRU JXDUGV LQ /HYHO  RU  HVFDODWRUWKLVUHTXLUHPHQWLVQRWDSSOLFDEOH,Q
DOWHUDWLRQV7KHVSHFLILFUHTXLUHPHQWVDUHJLYHQ FRQMXQFWLRQ ZLWK 6HFWLRQ  LI WKH
LQ6HFWLRQVDQGUHODWLQJWKH UHTXLUHPHQWIRUWKHDFFHVVLEOHURXWHZRXOGEH
PLQLPXPORFDWLRQDQGGHVLJQUHTXLUHPHQWVIRU LQ H[FHVV RI ZKDW LV UHTXLUHG IRU QHZ
JXDUGVUHVSHFWLYHO\ FRQVWUXFWLRQVXFKDVDQDFFHVVLEOHURXWHWRDQ
DUHD WKDW ZDV H[HPSWHG E\ 6%&  6HFWLRQ
 0LQLPXP UHTXLUHPHQW  (YHU\ RUWKLVUHTXLUHPHQWLV
RSHQSRUWLRQRIDVWDLUZD\ODQGLQJRUEDOFRQ\WKDW QRW DSSOLFDEOH 7KH LQWHQW LV WKDW LI D URXWH LV
LVPRUHWKDQPDERYHWKHIORRURUJUDGHEHORZ SURYLGHG EHWZHHQ DFFHVVLEOH OHYHOV IRU D
DQGLVQRWSURYLGHGZLWKJXDUGVRUWKRVHSRUWLRQV QRQGLVDEOHG SHUVRQWR XVHLWLVUHDVRQDEOHWR
LQZKLFKH[LVWLQJJXDUGVDUHMXGJHGWREHLQGDQJHU DOVRH[SHFWDQDFFHVVLEOHURXWH
RIFROODSVLQJVKDOOEHSURYLGHGZLWKJXDUGV

™ 7KH FULWHULD DQG WULJJHUV IRU JXDUGV DUH PXFK
WKH VDPH DV WKRVH IRU KDQGUDLOV 6%&  6(&7,216758&785$/
FRPSOLDQW JXDUGV PXVW EH LQVWDOOHG DORQJ WKH  *HQHUDO6WUXFWXUDOHOHPHQWVDQGV\VWHPV
SDWK RI HJUHVV IURP WKH ZRUN DUHD WR DQG ZLWKLQ EXLOGLQJV XQGHUJRLQJ /HYHO  DOWHUDWLRQV
LQFOXGLQJ WKH OHYHO RI H[LW GLVFKDUJH DQG
VKDOOFRPSO\ZLWKWKLVVHFWLRQ
DQ\ZKHUH DW VWDLUZD\V ODQGLQJV RU EDOFRQLHV
ZKHUHDQHOHYDWLRQGLIIHUHQFHRIPRUHWKDQ ™ 7KLV VHFWLRQ GLUHFWV WKH FRGH XVHU WR WKH
PH[LVWVDQGDFRPSO\LQJJXDUGLVQRWSUHVHQW UHTXLUHPHQWV FRQWDLQHG LQ 6HFWLRQV 
WKURXJK  7KHVH VWUXFWXUDO UHTXLUHPHQWV
 'HVLJQ2QFHDJXDUGLVUHTXLUHG DSSO\ WR DOWHUDWLRQV LQYROYLQJ WKH DGGLWLRQ RI
E\WKLVVHFWLRQLWVVWUXFWXUDOVWUHQJWKKHLJKWVL]HRI HTXLSPHQW RU ZKHUH D UHFRQILJXUDWLRQ RI
RSHQLQJV DQG RWKHU GHVLJQ IHDWXUHV PXVW FRPSO\ EXLOGLQJVSDFHUHVXOWVLQDQLQFUHDVHGPLQLPXP
ZLWKWKH6%& OLYH ORDG UHTXLUHG E\ 6%&  6HFWLRQ 
™ 2QFH D JXDUG LV UHTXLUHG E\ WKLV VHFWLRQ LWV 1RWHWKDWWKHVWUXFWXUDOUHTXLUHPHQWVIRU/HYHO
VWUXFWXUDOVWUHQJWKKHLJKWVL]HRIRSHQLQJVDQG DOWHUDWLRQVLQ6HFWLRQDUHDOVRDSSOLFDEOH
RWKHU GHVLJQ IHDWXUHV PXVW FRPSO\ ZLWK WKH DFFRUGLQJWR6HFWLRQ
6%&  1HZVWUXFWXUDOHOHPHQWV1HZ6WUXFWXUDO
HOHPHQWVLQDOWHUDWLRQVLQFOXGLQJFRQQHFWLRQVDQG
DQFKRUDJHVKDOOFRPSO\ZLWKWKH6%&
6(&7,21$&&(66,%,/,7<
™ $Q\QHZVWUXFWXUDOHOHPHQWWKDWLVDGGHGLQWKH
 *HQHUDO $ EXLOGLQJIDFLOLW\RUHOHPHQW FRXUVH RI DOWHUDWLRQ ZRUN LQFOXGLQJ LWV
WKDW LV DOWHUHG VKDOO FRPSO\ ZLWK WKLV VHFWLRQ DQG FRQQHFWLRQV WR WKH H[LVWLQJ VWUXFWXUH PXVW
6HFWLRQ FRPSO\ ZLWK 6%&  UHTXLUHPHQWV IRU QHZ
FRQVWUXFWLRQ 7KHUH LV QR H[FHSWLRQ WR WKLV
™ $ /HYHO  RU  DOWHUDWLRQ ZRXOG LQFOXGH WKH UHTXLUHPHQW
UHFRQILJXUDWLRQ RI VSDFH ZKLOH D /HYHO 
DOWHUDWLRQ ZRXOG QRW 7KHUHIRUH DOWHUDWLRQV  0LQLPXP GHVLJQ ORDGV  7KH PLQLPXP
FRYHUHG XQGHU WKLV VHFWLRQ ZRXOG KDYH DOO GHVLJQORDGVRQH[LVWLQJHOHPHQWVRIDVWUXFWXUHWKDW

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

GR QRW VXSSRUW DGGLWLRQDO ORDGV DV D UHVXOW RI DQ $QRWKHU H[FHSWLRQ DOORZV DGGLWLRQDO JUDYLW\
DOWHUDWLRQVKDOOEHWKHORDGVDSSOLFDEOHDWWKHWLPH ORDGVWKDWGRQRWLQFUHDVHVWUHVVHVLQDIIHFWHG
WKHEXLOGLQJZDVFRQVWUXFWHG VWUXFWXUDO HOHPHQWV E\ PRUH WKDQ  SHUFHQW
$OORZLQJ RYHUVWUHVVHV RI XS WR  SHUFHQW LQ
™ 8QOHVVDQDOWHUDWLRQDGGVORDGVWRDQH[LVWLQJ H[LVWLQJ VWUXFWXUDO PHPEHUV KDV EHHQ D ORQJ
VWUXFWXUDO PHPEHU WKHUH LV QR QHHG WR VWDQGLQJ UXOH RI WKXPE XVHG E\ VWUXFWXUDO
UHHYDOXDWH LW DJDLQVW FXUUHQW FRGHORDGLQJ HQJLQHHUV7KLVH[FHSWLRQGRHVQRWVSHFLILFDOO\
FULWHULD 7KLV LV LQ FRQWUDVW WR WKH WUHDWPHQW RI DGGUHVVWKHFXPXODWLYHHIIHFWVIURPVXFFHVVLYH
H[LVWLQJPHPEHUVWKDWKDYHLQFUHDVHGORDGLQJ DOWHUDWLRQV EXW LW ZRXOG EH SUXGHQW WR OLPLW
LQ DFFRUGDQFH ZLWK 6HFWLRQ  7KH FXPXODWLYHLQFUHDVHVXQGHUWKLVH[FHSWLRQWRD
DSSOLFDEOH ORDGV RI WKH FRGH DW WKH WLPH WKH WRWDO RI  SHUFHQW XQOHVV LW LV FOHDUO\
EXLOGLQJZDVEXLOWDSSO\ GRFXPHQWHG WKDW D VWUXFWXUH KDV DGGLWLRQDO
 ([LVWLQJ VWUXFWXUDO HOHPHQWV FDUU\LQJ FDSDFLW\
JUDYLW\ ORDGV  $OWHUDWLRQV VKDOO QRW UHGXFH WKH  ([LVWLQJ VWUXFWXUDO HOHPHQWV UHVLVWLQJ
FDSDFLW\RIH[LVWLQJJUDYLW\ORDGFDUU\LQJVWUXFWXUDO ODWHUDO ORDGV  ([FHSW DV SHUPLWWHG E\ 6HFWLRQ
HOHPHQWVXQOHVVLWLVGHPRQVWUDWHGWKDWWKHHOHPHQWV ZKHUHWKHDOWHUDWLRQLQFUHDVHVGHVLJQODWHUDO
KDYH WKH FDSDFLW\ WR FDUU\ WKH DSSOLFDEOH GHVLJQ ORDGVRUZKHUHWKHDOWHUDWLRQUHVXOWVLQSURKLELWHG
JUDYLW\ ORDGV UHTXLUHG E\ WKH 6%&  ([LVWLQJ VWUXFWXUDO LUUHJXODULW\ DV GHILQHG LQ 6%&  RU
VWUXFWXUDO HOHPHQWV VXSSRUWLQJ DQ\ DGGLWLRQDO ZKHUHWKHDOWHUDWLRQGHFUHDVHVWKHFDSDFLW\RIDQ\
JUDYLW\ORDGVDVDUHVXOWRIWKHDOWHUDWLRQVLQFOXGLQJ H[LVWLQJODWHUDOORDGFDUU\LQJVWUXFWXUDOHOHPHQWWKH
WKHHIIHFWVRIVQRZGULIWVKDOOFRPSO\ZLWKWKH6%& VWUXFWXUHRIWKHDOWHUHGEXLOGLQJRUVWUXFWXUHVKDOOEH
 VKRZQWRPHHWWKHZLQGDQGVHLVPLFSURYLVLRQVRI
([FHSWLRQV WKH 6%&  5HGXFHG 6%& OHYHO VHLVPLF
IRUFHVLQDFFRUGDQFHZLWK6HFWLRQVKDOOEH
 6WUXFWXUDO HOHPHQWV ZKRVH VWUHVV LV QRW SHUPLWWHG
LQFUHDVHGE\PRUHWKDQSHUFHQW
 %XLOGLQJV RI *URXS 5 RFFXSDQF\ ZLWK QRW ([FHSWLRQ  $Q\ H[LVWLQJ ODWHUDO ORDGFDUU\LQJ
PRUHWKDQILYHGZHOOLQJRUVOHHSLQJXQLWVXVHG VWUXFWXUDO HOHPHQW ZKRVH GHPDQGFDSDFLW\ UDWLR
VROHO\ IRU UHVLGHQWLDO SXUSRVHV ZKHUH WKH ZLWKWKHDOWHUDWLRQFRQVLGHUHGLVQRWPRUHWKDQ
H[LVWLQJ EXLOGLQJ DQG LWV DOWHUDWLRQ FRPSO\ SHUFHQWJUHDWHUWKDQLWVGHPDQGFDSDFLW\UDWLRZLWK
ZLWK WKH FRQYHQWLRQDO OLJKWIUDPH WKHDOWHUDWLRQLJQRUHGVKDOOEHSHUPLWWHGWRUHPDLQ
FRQVWUXFWLRQPHWKRGVRIWKH6%&RUWKH XQDOWHUHG )RU SXUSRVHV RI FDOFXODWLQJ GHPDQG
SURYLVLRQVRIWKH6%& FDSDFLW\ UDWLRV WKH GHPDQG VKDOO FRQVLGHU
DSSOLFDEOH ORDG FRPELQDWLRQV ZLWK GHVLJQ ODWHUDO
™ ,QWKHFRXUVHRIUHFRQILJXULQJEXLOGLQJVSDFHV ORDGV RU IRUFHV LQ DFFRUGDQFH ZLWK 6%& 
LW LV RIWHQ QHFHVVDU\ WR UHORFDWH RU DGG 6HFWLRQV  DQG  5HGXFHG 6%& OHYHO
HTXLSPHQW)XUWKHUVRPHWLPHVDFKDQJHLQXVH VHLVPLFIRUFHVLQDFFRUGDQFHZLWK6HFWLRQ
ZLWKRXW DFWXDOO\ FKDQJLQJ WKH RFFXSDQF\
VKDOOEHSHUPLWWHG)RUSXUSRVHVRIWKLVH[FHSWLRQ
FODVVLILFDWLRQ QHFHVVLWDWHV XVH RI D KLJKHU
GHVLJQ OLYH ORDG &RQVHTXHQWO\ H[LVWLQJ FRPSDULVRQV RI GHPDQGFDSDFLW\ UDWLRV DQG
VWUXFWXUDO PHPEHUV WKDW DUH VXEMHFWHG WR FDOFXODWLRQ RI GHVLJQ ODWHUDO ORDGV IRUFHV DQG
LQFUHDVHG ORDGV PXVW FRPSO\ ZLWK WKH FDSDFLWLHVVKDOODFFRXQWIRUWKHFXPXODWLYHHIIHFWV
UHTXLUHPHQWV LQ WKLV VHFWLRQ IRU JUDYLW\ ORDGV RI DGGLWLRQV DQG DOWHUDWLRQV VLQFH RULJLQDO
7KLV VHFWLRQ UHTXLUHV WKH HYDOXDWLRQ RI WKHVH FRQVWUXFWLRQ
DGGLWLRQDO ORDGV LQFOXGLQJ WKH HIIHFWV RI VQRZ
™ 7KLVVHFWLRQJLYHVJXLGDQFHZLWKUHVSHFWWRWKH
GULIW WR GHWHUPLQH LI WKHVH ORDGV GHFUHDVH WKH
LPSDFWRIDQDOWHUDWLRQRQWKHODWHUDOUHVLVWDQFH
FDSDFLW\ RI WKH H[LVWLQJ VWUXFWXUDO HOHPHQWV
RIWKHVWUXFWXUH$OWHUDWLRQVWKDWDIIHFWH[LVWLQJ
:KHUHWKHDOWHUDWLRQVUHVXOWLQDQHWLQFUHDVHLQ
VWUXFWXUDO HOHPHQWV WR D OHVVHU H[WHQW DUH
WKHJUDYLW\ORDGWKDWLVVXSSRUWHGE\WKHH[LVWLQJ
SHUPLWWHG ZLWKRXW UHTXLULQJ WKH H[LVWLQJ
VWUXFWXUHLQFOXGLQJWKHHIIHFWVRIVQRZGULIWWKH
VWUXFWXUHWRFRPSO\ZLWKWKHSURYLVLRQVIRUQHZ
DIIHFWHG VWUXFWXUDO FRPSRQHQWV PXVW EH
VWUXFWXUHV DV ORQJ DV WKH DOWHUDWLRQ LWVHOI
FKHFNHGWRYHULI\WKH\VDWLVI\WKHUHTXLUHPHQWV
FRPSOLHV$QH[LVWLQJEXLOGLQJRUVWUXFWXUHWKDW
RIWKH6%&IRUDQHZVWUXFWXUH7KHUHDUH
LV DOWHUHG PXVW EH FDUHIXOO\ HYDOXDWHG IRU LWV
WZRH[FHSWLRQVWRIXOOFRPSOLDQFHZLWKWKH6%&
DELOLW\WRZLWKVWDQGHDUWKTXDNHDQGZLQGORDGV
 2QH SHUPLWV VPDOOHU *URXS 5 EXLOGLQJV
7KHODWHUDOUHVLVWDQFHRIDQH[LVWLQJEXLOGLQJRU
DQGWKHLUDOWHUDWLRQVWKDWFRPSO\ZLWKHLWKHUWKH
VWUXFWXUH FDQQRW EH OHVVHQHG RU SRVH DQ\
6DXGL6%&RUWKHFRQYHQWLRQDOOLJKWIUDPH
XQGXH LQFUHDVH LQ WKH ILUH DQG OLIH VDIHW\
FRQVWUXFWLRQ SURYLVLRQV RI WKH 6%& 
KD]DUGV RI WKH EXLOGLQJ RU VWUXFWXUH 7KH

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

H[FHSWLRQ DOORZV DOWHUDWLRQV WKDW LQFUHDVH WKH QHZ EXLOGLQJ FRQVLGHUV WKH RYHUDOO EHQHILW RI
GHPDQGFDSDFLW\UDWLRRQH[LVWLQJODWHUDOORDG KD]DUGPLWLJDWLRQ,WLVDQRIWHQXVHGDSSURDFK
FDUU\LQJHOHPHQWVE\QRPRUHWKDQSHUFHQW WRPDQDJLQJULVNLQ DUHDVWKDWDUHVXVFHSWLEOH
RU GHFUHDVH WKH ODWHUDO UHVLVWDQFH RI H[LVWLQJ WRIUHTXHQWHDUWKTXDNHV7KH*XLGHOLQHVIRUWKH
VWUXFWXUDOHOHPHQWVE\QRPRUHWKDQSHUFHQW 6HLVPLF5HWURILWRI([LVWLQJ%XLOGLQJV*65(%
LQ $SSHQGL[ $ DQG WKH RWKHU UHIHUHQFHG
 9ROXQWDU\ODWHUDOIRUFHUHVLVWLQJV\VWHP VWDQGDUGV IRU VHLVPLF HYDOXDWLRQ DQG
DOWHUDWLRQV Alterations RI H[LVWLQJ VWUXFWXUDO UHKDELOLWDWLRQ KDYH EHHQ GHYHORSHG IRU WKLV
HOHPHQWVDQGDGGLWLRQVRIQHZVWUXFWXUDOHOHPHQWV SXUSRVH DQG WKLV VHFWLRQ RI WKH FRGH
WKDWDUHLQLWLDWHGIRUWKHSXUSRVHRILQFUHDVLQJWKH UHFRJQL]HV WKHLU XVH $ YROXQWDU\ VHLVPLF
ODWHUDO IRUFHUHVLVWLQJ VWUHQJWK RU VWLIIQHVV RI DQ XSJUDGHRIDEXLOGLQJVWUXFWXUHFDQWKHUHIRUH
H[LVWLQJVWUXFWXUHDQGWKDWDUHQRWUHTXLUHGE\RWKHU FRQVLGHU WKH IXOO UDQJH RI UHKDELOLWDWLRQ
VHFWLRQV RI WKLV FRGH VKDOO QRW EH UHTXLUHG WR EH REMHFWLYHVDYDLODEOHXQGHUIRULQVWDQFH$60(
GHVLJQHG IRU IRUFHV FRQIRUPLQJ WR WKH 6%&  VHHFRPPHQWDU\6HFWLRQ
SURYLGHGWKDWDQHQJLQHHULQJDQDO\VLVLVVXEPLWWHG 
WRVKRZWKDW
6(&7,21(/(&75,&$/
 7KH FDSDFLW\ RI H[LVWLQJ VWUXFWXUDO HOHPHQWV  1HZ LQVWDOODWLRQV  $OO QHZO\ LQVWDOOHG
UHTXLUHGWRUHVLVWIRUFHVLVQRWUHGXFHG HOHFWULFDO HTXLSPHQW DQG ZLULQJ UHODWLQJ WR ZRUN
 7KH ODWHUDO ORDGLQJ WR H[LVWLQJ VWUXFWXUDO GRQH LQ DQ\ ZRUN DUHD VKDOO FRPSO\ ZLWK DOO
HOHPHQWV LV QRW LQFUHDVHG HLWKHU EH\RQG LWV DSSOLFDEOH UHTXLUHPHQWV RI 6DXGL (OHFWULFDO &RGH
FDSDFLW\RUPRUHWKDQSHUFHQW 6%&RU1)3$H[FHSWDVSURYLGHGIRULQ
 1HZ VWUXFWXUDO HOHPHQWV DUH GHWDLOHG DQG 6HFWLRQ
FRQQHFWHGWRWKHH[LVWLQJVWUXFWXUDOHOHPHQWV
DVUHTXLUHGE\WKH6%& ™ ,Q WKH FRXUVH RI DOWHUDWLRQV WKDW LQYROYH WKH
UHFRQILJXUDWLRQRIVSDFHWKHUHLVVRPHWLPHVD
 1HZ RUUHORFDWHGQRQVWUXFWXUDOHOHPHQWVDUH
QHHGWRUHZLUHRUUHSODFHHOHFWULFDOHTXLSPHQW
GHWDLOHG DQG FRQQHFWHG WR H[LVWLQJ RU QHZ RUIL[WXUHV7KLVVHFWLRQUHTXLUHVWKDWDOOQHZO\
VWUXFWXUDO HOHPHQWV DV UHTXLUHG E\ WKH 6%& LQVWDOOHG HOHFWULFDO HTXLSPHQW DQG ZLULQJ
DQG FRPSO\ZLWK6DXGL(OHFWULFDO&RGH6%&RU
 $GDQJHURXVFRQGLWLRQDVGHILQHGLQWKLVFRGH 1)3$LQWKHZRUNDUHD7KLVLVUHDVRQDEOH
LVQRWFUHDWHG9ROXQWDU\DOWHUDWLRQVWRODWHUDO VLQFHWKHVSDFH LVEHLQJUHFRQILJXUHGDQGWKH
IRUFHUHVLVWLQJ V\VWHPV FRQGXFWHG LQ DOWHUDWLRQ LV VXEVWDQWLDO HQRXJK WR MXVWLI\
DFFRUGDQFH ZLWK $SSHQGL[ $ DQG WKH XSJUDGHG HOHFWULFDO LQ WKHVH DUHDV 6HFWLRQ
UHIHUHQFHG VWDQGDUGV RI WKLV FRGH VKDOO EH  SURYLGHV VRPH H[FHSWLRQV WR WKLV IRU
SHUPLWWHG UHVLGHQWLDORFFXSDQFLHV

™ 7KLVVHFWLRQDGGUHVVHVWKHLVVXHRIXSJUDGLQJ  ([LVWLQJLQVWDOODWLRQV$OOQHZO\LQVWDOOHG

D EXLOGLQJ¶V ODWHUDO IRUFHUHVLVWLQJ V\VWHP HOHFWULFDO HTXLSPHQW DQG ZLULQJ UHODWLQJ WR ZRUN
YROXQWDULO\ WR LPSURYH UHVLVWDQFH WR ZLQG DQG GRQH LQ DQ\ ZRUN DUHD VKDOO FRPSO\ ZLWK DOO
VHLVPLF IRUFHV ,W GRHV QRW DSSO\ LQ VLWXDWLRQV DSSOLFDEOH UHTXLUHPHQWV RI 6DXGL (OHFWULFDO &RGH
ZKHUHRWKHUFRGHVHFWLRQVUHTXLUHFRPSOLDQFH 6%&RU1)3$H[FHSWDVSURYLGHGIRULQ
ZLWK WKH 6%&  RU RWKHU VSHFLILF PLQLPXP 6HFWLRQ
ZLQG RU VHLVPLF GHVLJQ ORDGV 7KLV VHFWLRQ
DOORZV DQ RZQHU WR LQLWLDWH DQ LPSURYHPHQW WR ™ )DXOW\DQGGDPDJHGZLULQJRUZLULQJWKDWPLJKW
WKHODWHUDOIRUFHUHVLVWLQJV\VWHPWRWKHH[WHQWLW QRW EH VXLWDEOH IRU FHUWDLQ DSSOLFDWLRQV
LV YLDEOH WR GR VR DQG SURYLGHG WKH UHTXLVLWH FRQWULEXWHV WR PDQ\ ILUHV WKDW PLJKW KDYH
HQJLQHHULQJ DQDO\VLV LV IXUQLVKHG 6LQFH QR HOHFWULFDO RULJLQV 7R UHGXFH WKH ULVN RI VXFK
PLQLPXPORDGUHTXLUHPHQWLVHVWDEOLVKHGE\WKH ILUHVWKLVVHFWLRQUHTXLUHV XSJUDGLQJHOHFWULFDO
FRGH WKH EXLOGLQJ RZQHU DQG WKH GHVLJQ ZLULQJ LQ KLJK RFFXSDQW ORDG KD]DUGRXV DQG
SURIHVVLRQDO KDYH WKH ODWLWXGH WR HVWDEOLVK LQVWLWXWLRQDO RFFXSDQFLHV 7KH HOHFWULFDO ZLULQJ
SHUIRUPDQFH JRDOV DQG REMHFWLYHV 7KXV DQ LQWKHHQWLUHZRUNDUHDLQ*URXS$$$
RZQHUFDQGRVRPHWKLQJWRPLWLJDWHWKHKD]DUG + DQG , RFFXSDQFLHV PXVW EH H[DPLQHG DQG
RI IXWXUH HDUWKTXDNHV RU ZLQG VWRUPV LQ DQ ZKHUH VXFK ZLULQJ GRHV QRW FRPSO\ ZLWK WKH
H[LVWLQJ EXLOGLQJ ZLWKRXW EHLQJ GLVFRXUDJHG PDWHULDOV DQG PHWKRGV SURYLVLRQV RI 6DXGL
IURPGRLQJVRE\LQFXUULQJSURKLELWLYHFRVWV)RU (OHFWULFDO&RGH6%&RU1)3$LWPXVW
H[DPSOH WKH UHWURILW RI DQ H[LVWLQJ EXLOGLQJ WR EHXSJUDGHGWRFRPSO\,WVKRXOGEHQRWHGWKDW
LPSURYH SHUIRUPDQFH LQ DQ HDUWKTXDNH WR D HOHFWULFDOZLULQJLQSDUWLWLRQVDQGRWKHUHOHPHQWV
OHYHORIUHVLVWDQFHOHVVWKDQWKDWUHTXLUHGIRUD WKDWDUHQRWEHLQJDOWHUHGRUUHORFDWHGPXVWDOVR
FRPSO\DVORQJDVWKH\DUHZLWKLQWKHZRUNDUHD

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

7KH ZLULQJ PDWHULDOV DQG PHWKRGV DUH PRVWO\ LQFRPSOLDQFHZLWK6DXGL(OHFWULFDO&RGH6%&

FRYHUHGLQ6DXGL(OHFWULFDO&RGH6%&RU RU1)3$DGGUHVVHVWKHVDIHW\RIUHSDLU
&KDSWHURI1)3$ SHUVRQQHO
 5HVLGHQWLDO RFFXSDQFLHV  ,Q *URXS 5 (QFORVHGDUHDV$OOHQFORVHGDUHDVRWKHU
5 DQG 5 RFFXSDQFLHVDQG EXLOGLQJVUHJXODWHG WKDQ FORVHWV NLWFKHQV EDVHPHQWV JDUDJHV
E\ WKH 6%&  WKH UHTXLUHPHQWV RI 6HFWLRQV KDOOZD\VODXQGU\DUHDVXWLOLW\DUHDVVWRUDJHDUHDV
WKURXJKVKDOOEHDSSOLFDEOHRQO\WR DQGEDWKURRPVVKDOOKDYHDPLQLPXPRIWZRGXSOH[
ZRUNDUHDVORFDWHGZLWKLQDGZHOOLQJXQLW UHFHSWDFOH RXWOHWV RU RQH GXSOH[ UHFHSWDFOH RXWOHW
™ 7KLV LV WKH FKDUJLQJ SDUDJUDSK IRU WKH
DQGRQHFHLOLQJRUZDOOW\SHOLJKWLQJRXWOHW
UHTXLUHPHQWV IRU HOHFWULFDO ZRUN LQ UHVLGHQWLDO ™ 6HHWKHFRPPHQWDU\WR6HFWLRQ
RFFXSDQFLHV LQ /HYHO  RU  DOWHUDWLRQV 7KH
VSHFLILF UHTXLUHPHQWV DUH JLYHQ LQ 6HFWLRQV .LWFKHQV  .LWFKHQ DUHDV VKDOO KDYH D
WKURXJK7KHZRUNDUHDVZLWKLQ PLQLPXPRIWZRGXSOH[UHFHSWDFOHRXWOHWV
D GZHOOLQJ XQLW LQ *URXS 5 5 DQG 5 ™ 6HHWKHFRPPHQWDU\WR6HFWLRQ
RFFXSDQFLHV DUH UHTXLUHG WR PHHW D FHUWDLQ
PLQLPXPQXPEHURIUHFHSWDFOHRXWOHWVJURXQG /DXQGU\DUHDV.LWFKHQDUHDVVKDOOKDYHD
IDXOW FLUFXLW LQWHUUXSWHUV *)&, DQG OLJKWLQJ PLQLPXPRIWZRGXSOH[UHFHSWDFOHRXWOHWV/DXQGU\
RXWOHWV 7KLV LV WUXH UHJDUGOHVV RI ZKHWKHU WKH DUHDV VKDOO KDYH D PLQLPXP RI RQH GXSOH[
OLVWHG RFFXSDQFLHV DUH EHLQJ UHJXODWHG E\ WKH UHFHSWDFOH RXWOHW ORFDWHG QHDU WKH ODXQGU\
6%&  RU 6%&  .LWFKHQV ODXQGU\ HTXLSPHQWDQGLQVWDOOHGRQDQLQGHSHQGHQWFLUFXLW
DUHDV VOHHSLQJ URRPV VWXG\ URRPV RU RWKHU
VLPLODU URRPV DUH UHTXLUHG WR SURYLGH DW OHDVW ™ 6HHWKHFRPPHQWDU\WR6HFWLRQ
RQH RUWZRGXSOH[UHFHSWDFOHRXWOHWV&ORVHWV
*URXQG IDXOW FLUFXLW LQWHUUXSWLRQ
VWRUDJH DUHDV KDOOZD\V JDUDJHV DQG
EDVHPHQWV DUH H[HPSW IURP WKLV UHTXLUHPHQW 1HZO\LQVWDOOHGUHFHSWDFOHRXWOHWVVKDOOEHSURYLGHG
HYHQ LI WKH\ DUH ZLWKLQ WKH ZRUN DUHD (YHQ ZLWKJURXQGIDXOWFLUFXLWLQWHUUXSWLRQDVUHTXLUHGE\
WKRXJKUHFHSWDFOHRXWOHWVDUHQHHGHGDQGXVHG 6DXGL(OHFWULFDO&RGH6%&RU1)3$
LQWKHVHDUHDVWKHLUXVHLVQRWDVIUHTXHQWRUDV ™ 6HHWKHFRPPHQWDU\WR6HFWLRQ
QHFHVVDU\FRPSDUHGWRDUHDVWKDWDUHUHTXLUHG
WRSURYLGHVXFKUHFHSWDFOHVXQGHUWKLVVHFWLRQ 0LQLPXP OLJKWLQJ RXWOHWV  $W OHDVW RQH
:KHUHQHZUHFHSWDFOHRXWOHWVDUHLQVWDOOHGDQG OLJKWLQJRXWOHWVKDOOEHSURYLGHGLQHYHU\EDWKURRP
LI6DXGL(OHFWULFDO&RGH6%&RU1)3$ KDOOZD\ VWDLUZD\ DWWDFKHG JDUDJH DQG GHWDFKHG
UHTXLUHV *)&, IRU WKH ORFDWLRQ XQGHU JDUDJH ZLWK HOHFWULF SRZHU DQG WR LOOXPLQDWH
FRQVLGHUDWLRQ WKHQ VXFK *)&, PXVW DOVR EH RXWGRRUHQWUDQFHVDQGH[LWV
LQVWDOOHG/LJKWLQJRXWOHWVPXVWEHSURYLGHGLQ
GHWDFKHG JDUDJHV WKDW DUH VHUYHG E\ HOHFWULF ™ 6HHWKHFRPPHQWDU\WR6HFWLRQ
SRZHUDWWDFKHGJDUDJHVEDWKURRPVKDOOZD\V
8WLOLW\URRPVDQGEDVHPHQWVRXWOHWVKDOO
VWDLUZD\V XWLOLW\ URRPV EDVHPHQWV XVHG IRU
VWRUDJH RU PHFKDQLFDO HTXLSPHQW H[LWV DQG EHSURYLGHGLQXWLOLW\URRPVDQGEDVHPHQWVZKHUH
RXWGRRUHQWUDQFHVWKDWDUHZLWKLQWKHZRUNDUHD VXFK VSDFHV DUH XVHG IRU VWRUDJH RU FRQWDLQ
™ ([DPSOH HTXLSPHQWUHTXLULQJVHUYLFH
™ 4 $ KRPHRZQHU ZLVKHV WR UHPRGHO DQG ™ 6HHWKHFRPPHQWDU\WR6HFWLRQ
UHFRQILJXUH VRPH LQWHULRU VSDFHV LQFOXGLQJ D
EDWKURRPODXQGU\DQGWKHOLYLQJURRP7KHUHLV &OHDUDQFH IRU HTXLSPHQW  $W OHDVW RQH
FXUUHQWO\QROLJKWIL[WXUHRXWVLGHWKHIURQWGRRU OLJKWLQJRXWOHWVKDOOEHSURYLGHGLQXWLOLW\URRPVDQG
,VDOLJKWIL[WXUHUHTXLUHGWREHLQVWDOOHGRXWVLGH EDVHPHQWVZKHUHVXFKVSDFHVDUHXVHGIRUVWRUDJH
RIWKHIURQWGRRU" RUFRQWDLQHTXLSPHQWUHTXLULQJVHUYLFH
™ $ <HV (YHQ WKRXJK WKH H[WHULRU ZDOO DW WKH
IURQWGRRULVQRWEHLQJUHFRQILJXUHGLWLVORFDWHG ™ 6HHWKHFRPPHQWDU\WR6HFWLRQ
DWWKHZDOOZKLFKLVSDUWRIWKHDOWHUDWLRQZRUN 
DUHD DQG DV VXFK LV UHTXLUHG WR EH SURYLGHG
ZLWK D OLJKW IL[WXUH VHH &RPPHQWDU\ )LJXUH 6(&7,210(&+$1,&$/
 (OHFWULFDO VHUYLFH HTXLSPHQW WKDW LV
ORFDWHGLQWKHZRUNDUHDDQGLQWKHGZHOOLQJXQLW  5HFRQILJXUHG RU FRQYHUWHG VSDFHV  $OO
PXVW EH DGMXVWHG RU UHORFDWHG RU LWV UHFRQILJXUHGVSDFHVLQWHQGHGIRURFFXSDQF\DQGDOO
VXUURXQGLQJ REVWUXFWLRQV PXVW EH UHPRYHG RU VSDFHVFRQYHUWHGWRKDELWDEOHRURFFXSLDEOHVSDFH
UHORFDWHG VXFK WKDW WKH PLQLPXP FOHDUDQFHV LQDQ\ZRUNDUHDVKDOOEHSURYLGHGZLWKQDWXUDORU
UHTXLUHGE\6DXGL(OHFWULFDO&RGH6%&RU
1)3$DUHSURYLGHG3URYLGLQJWKLVFOHDUDQFH

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

PHFKDQLFDOYHQWLODWLRQLQDFFRUGDQFHZLWKWKH6%& PHFKDQLFDO HTXLSPHQW +RZHYHU WKH EXLOGLQJ

 RIILFLDO VKRXOG FDUHIXOO\ UHYLHZ WKH SDUWLFXODU
([FHSWLRQ ([LVWLQJ PHFKDQLFDO YHQWLODWLRQ GHWDLOV IRU DOO VXFK HTXLSPHQW WR HQVXUH WKDW
V\VWHPV VKDOO FRPSO\ ZLWK WKH UHTXLUHPHQWV RI DSSURSULDWH PHDVXUHV DUH WDNHQ IRU ORFDO
H[KDXVW
6HFWLRQ
™ 7KLV VHFWLRQ LV FRQVLVWHQW ZLWK WKH EDVLF 
SUHPLVH IRU QHZ EXLOGLQJ HOHPHQWV DQG 6(&7,213/80%,1*
PDWHULDOVJLYHQLQ&KDSWHU6HFWLRQ²WKDW
UHSODFLQJ HOHPHQWV LV UHTXLUHG WR FRPSO\ ZLWK  0LQLPXP IL[WXUHV  :KHUH WKH RFFXSDQW
WKH DSSOLFDEOH FRGH IRU QHZ FRQVWUXFWLRQ 7KH ORDG RI WKH VWRU\ LV LQFUHDVHG E\ PRUH WKDQ 
DPRXQW RI PHFKDQLFDO YHQWLODWLRQ PXVW EH SHUFHQW SOXPELQJ IL[WXUHV IRU WKH VWRU\ VKDOO EH
SURYLGHG LQ DFFRUGDQFH ZLWK WKH 6%&  DV SURYLGHG LQ TXDQWLWLHV VSHFLILHG LQ WKH 6%& 
UHTXLUHG IRU QHZ FRQVWUXFWLRQ 7KLV FRXOG EH EDVHGRQWKHLQFUHDVHGRFFXSDQWORDG
WKDW DLUPRYLQJ HTXLSPHQW ZRXOG QHHG WR EH
DOWHUHGDVZHOO+RZHYHUWKHH[FHSWLRQDOORZV ™ $OWHUDWLRQV LQYROYLQJ WKH UHFRQILJXUDWLRQ RI
VSHFLDO PLQLPXP SURYLVLRQV IRU H[LVWLQJ VSDFHV FRXOG DW WLPHV UHVXOW LQ DQ LQFUHDVHG
PHFKDQLFDO HTXLSPHQW WKDW ZRXOG QRW UHTXLUH RFFXSDQW ORDG 7KH PLQLPXP QXPEHU RI
LQFUHDVLQJWKHFDSDFLWLHVIRUH[LVWLQJDLUPRYLQJ SOXPELQJIL[WXUHVLVQRWDIIHFWHGDQGGRHVQRW
HTXLSPHQW DV ORQJ DV PLQLPXP YHQWLODWLRQ QHHGWREHUHYLHZHGRUUHYLVHGDVORQJDVWKH
UDWHVDUHSURYLGHG LQFUHDVHGRFFXSDQWORDGLVSHUFHQWRUOHVV
RI WKH H[LVWLQJ RFFXSDQW ORDG 7KLV FULWHULRQ LV
 $OWHUHGH[LVWLQJV\VWHPV,QPHFKDQLFDOO\ DSSOLHGVWRU\E\VWRU\DQGQRWWRWKHEXLOGLQJDV
YHQWLODWHG VSDFHV H[LVWLQJ PHFKDQLFDO YHQWLODWLRQ D ZKROH EHFDXVH LQ PRVW FDVHV EXLOGLQJ
V\VWHPVWKDWDUHDOWHUHGUHFRQILJXUHGRUH[WHQGHG RFFXSDQWV QRUPDOO\ XVH WKH WRLOHW IDFLOLWLHV RQ
VKDOOSURYLGHQRWOHVVWKDQPVSHUSHUVRQ WKH IORRU ZKHUH WKH\ ZRUN RU OLYH DQG UDUHO\
RI RXWGRRU DLU DQG QRW OHVV WKDQ  PV RI WUDYHO WR DQRWKHU IORRU WR XVH WKH SOXPELQJ
YHQWLODWLRQ DLU SHU SHUVRQ RU QRW OHVV WKDQ WKH IDFLOLWLHV 2QFH WKH SHUFHQW LQFUHDVHG
DPRXQWRIYHQWLODWLRQDLUGHWHUPLQHGE\WKH,QGRRU RFFXSDQW ORDG WKUHVKROG LV SDVVHG WKHQ WKH
$LU4XDOLW\3URFHGXUHRI$6+5$( HQWLUH RFFXSDQW ORDG RI WKH VWRU\ DIWHU
DOWHUDWLRQV PXVW EH FRQVLGHUHG DQG WKH
™ 7KLV VHFWLRQ HVVHQWLDOO\ JLYHV DOWHUQDWLYH PLQLPXPSOXPELQJIL[WXUHVDVUHTXLUHGE\WKH
PLQLPXP UHTXLUHPHQWV WR WKH 6%&  IRU 6%&PXVWEHSURYLGHG
YHQWLODWLRQ LQ ZRUN DUHDV RI /HYHO  RU  ™ ([DPSOH
DOWHUDWLRQV +RZHYHU WKLV GRHV QRW UHDOO\ ™ $QH[LVWLQJPL[HGRFFXSDQF\EXLOGLQJDVVKRZQ
UHGXFH WKH DPRXQW RI HQJLQHHULQJ ZRUN WKDW LQ &RPPHQWDU\ )LJXUH  LV WR XQGHUJR
QHHGV WR EH GRQH LQ DQ DOWHUHG VSDFH 7KH DOWHUDWLRQV WR UHFRQILJXUH FHUWDLQ DUHDV DQG
UHIHUHQFHG$6+5$(PXVWEHFRQVXOWHGIRU LQFUHDVH WKH RFFXSDQW ORDG DV VKRZQ 7KHUH
WKH RYHUDUFKLQJ YHQWLODWLRQ UHTXLUHPHQWV DQG DUH IRXU ZDWHU FORVHWV FXUUHQWO\ SURYLGHG LQ
WKHQWKHPLQLPXPVVWDWHGLQWKLVVHFWLRQPXVW HDFKUHVWURRP
EH SURYLGHG 7KHUHIRUH HYHQ LQ D VLWXDWLRQ ™ 4:KDWLVWKHLPSDFWRIWKHDOWHUDWLRQVRQWKH
ZKHUH WKH LQWHQW ZDV QRW WR FKDQJH WKH DLU UHTXLUHGQXPEHURIZDWHUFORVHWV"
PRYLQJHTXLSPHQWEXWRQO\WKHFRQILJXUDWLRQRI ™ $&XUUHQWRFFXSDQWORDGLVEDVHGRQ6%&
WKH GXFWZRUN RU DLU FKDQQHOV WKH PLQLPXP 7DEOH2IILFHVRFFXSDQWORDG
UHTXLUHPHQWVFRXOGQHFHVVLWDWHFKDQJHVWRDLU WZRZDWHUFORVHWVIRUPDOHDQGWZRIRUIHPDOH
PRYLQJHTXLSPHQWFDSDELOLWLHV 5HVWDXUDQW  RFFXSDQW ORDG WZR ZDWHU
FORVHWVIRUPDOHDQGWZRIRUIHPDOH5HWDLO
 /RFDO H[KDXVW  $OO QHZO\ LQWURGXFHG RFFXSDQW ORDG RQH ZDWHU FORVHW IRU PDOH DQG
GHYLFHV HTXLSPHQW RU RSHUDWLRQV WKDW SURGXFH RQHIRUIHPDOH7RWDOQXPEHURIZDWHUFORVHWVLQ
DLUERUQH SDUWLFXODWH PDWWHU RGRUV IXPHV YDSRU HDFKUHVWURRPLVILYH
FRPEXVWLRQ SURGXFWV JDVHRXV FRQWDPLQDQWV ™ &DVH
SDWKRJHQLFDQGDOOHUJHQLFRUJDQLVPVDQGPLFURELDO ™ 2IILFHRFFXSDQWORDGUHVWDXUDQW
FRQWDPLQDQWV LQ VXFK TXDQWLWLHV DV WR DIIHFW  
DGYHUVHO\RU LPSDLUKHDOWK RU FDXVH GLVFRPIRUWWR ™ 3HUFHQWFKDQJHRIRFFXSDQWORDGIRUWKHVWRU\ 
RFFXSDQWVVKDOOEHSURYLGHGZLWKORFDOH[KDXVW  SHUFHQW
™ 7KHQXPEHURIZDWHUFORVHWVGRHVQRWQHHGWR
™ 7KLV LV D VWUDLJKWIRUZDUG FRPPRQVHQVH EH LQFUHDVHG WKHUH FDQ UHPDLQ IRXU ZDWHU
UHTXLUHPHQWWKDW ZLOOUHDGLO\EHREVHUYHG DQG FORVHWVLQHDFKPDOHDQGIHPDOHUHVWURRP
SUREDEO\ DOUHDG\ GHDOW ZLWK LQ WKH ™ &DVH
PDQXIDFWXUHU¶V LQVWDOODWLRQ LQVWUXFWLRQV IRU

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

™ 2IILFHRFFXSDQWORDGUHVWDXUDQW WKH UHFRQILJXUDWLRQ RI VSDFH WDNHV SODFH QHZ
  GRRUV RU ZLQGRZV DUH LQVWDOOHG RU H[LVWLQJ
™ 3HUFHQWFKDQJHRIRFFXSDQWORDGIRUWKHVWRU\  V\VWHPVDUHH[WHQGHGDQ\VXFKQHZHOHPHQW
 SHUFHQW LV UHTXLUHG WR PHHW WKH DSSOLFDEOH HQHUJ\
™ 7KH QXPEHU RI ZDWHU FORVHWV QHHGV WR EH SURYLVLRQVRIWKH6%&RUWKH6%&LQ
LQFUHDVHG 2IILFHV  RFFXSDQW ORDG WZR WKHFDVHRIEXLOGLQJVWKDWIDOOXQGHUWKHVFRSLQJ
ZDWHU FORVHWV IRU PDOH DQG WZR IRU IHPDOH RIWKH6%&(OHPHQWVLQWKHEXLOGLQJWKDW
5HVWDXUDQW  RFFXSDQW ORDG WKUHH ZDWHU DUH QRW EHLQJ DIIHFWHG GR QRW QHHG WR EH
FORVHWV IRU PDOH DQG WKUHH IRU IHPDOH 5HWDLO HYDOXDWHGDQGGRQRWQHHGWRFRPSO\ZLWKWKH
 RFFXSDQW ORDG RQH ZDWHU FORVHW IRU PDOH HQHUJ\ SURYLVLRQV (VVHQWLDOO\ WKH HQWLUH
DQG RQH IRU IHPDOH 7KH QXPEHU RI ZDWHU EXLOGLQJ LV QRW UHTXLUHG WR PHHW WKH HQHUJ\
FORVHWVPXVWEHLQFUHDVHGWRVL[LQHDFKPDOH SURYLVLRQV RQO\ D GHJUHH RI SRVVLEOH
DQGIHPDOHUHVWURRPVHH&RPPHQWDU\)LJXUH LPSURYHPHQWLQWKHHQHUJ\SHUIRUPDQFHRIWKH
 EXLOGLQJLVLQWHQGHGWREHDFKLHYHGE\PDNLQJ
WKH QHZ HOHPHQWV PHHW WKH 6%&  RU 6%&
UHTXLUHPHQWV,QFHUWDLQFDVHVZKHUHWKH
6(&7,21(1(5*< UHFRQILJXUDWLRQRIVSDFHPLJKWKDYHUHVXOWHGLQ
WKHFUHDWLRQRIQHZVSDFHVWKHQHZO\FUHDWHG
&216(59$7,21 VSDFH VKRXOG EH HYDOXDWHG DV D ZKROH IRU
 0LQLPXP UHTXLUHPHQWV  /HYHO  FRPSOLDQFH ZLWK WKH HQHUJ\ SURYLVLRQV HYHQ
DOWHUDWLRQV WR H[LVWLQJ EXLOGLQJV RU VWUXFWXUHV DUH WKRXJKVRPHRIWKHHOHPHQWVLQWKHVSDFHPLJKW
SHUPLWWHGZLWKRXW UHTXLULQJ WKH HQWLUHEXLOGLQJ RU DFWXDOO\ QRW KDYH EHHQ DOWHUHG /LNHZLVH LQ D
FDVH ZKHUH DQ H[LVWLQJ PHFKDQLFDO V\VWHP LV
VWUXFWXUHWRFRPSO\ZLWKWKHHQHUJ\UHTXLUHPHQWVRI
EHLQJH[WHQGHGWRRWKHUDUHDVRUQHZGXFWZRUN
WKH 6%&  RU 6%&  7KH DOWHUDWLRQV VKDOO LVEHLQJLQVWDOOHGWRUHFRQILJXUHDQGUHURXWHWKH
FRQIRUPWRWKHHQHUJ\UHTXLUHPHQWVRIWKH6%& GXFWV WR YDULRXV VSDFHV LW LV RQO\ UHTXLUHG WR
RUWKH6%&DVWKH\UHODWHWRQHZFRQVWUXFWLRQ KDYH WKH QHZ HOHPHQWV PHHW WKH HQHUJ\
RQO\ SURYLVLRQV DQG QRW WKH HQWLUH V\VWHP 7KH
™ $EXLOGLQJWKDWXQGHUJRHV/HYHODOWHUDWLRQVLV ODQJXDJH LQ WKLV VHFWLRQ LV LQWHQGHG WR EH
UHTXLUHG WR PHHW D FHUWDLQ OHYHO RI HQHUJ\ FRQVLVWHQW ZLWK WKH UHTXLUHPHQWV LQ WKH 6%&
FRPSOLDQFH 7KH OHYHO RI FRPSOLDQFH GHSHQGV DQGWKH6%&IRUDOWHUDWLRQ
RQWKHH[WHQWRIWKHDOWHUDWLRQVWDNLQJSODFH$V 
/HYHODOWHUDWLRQVDUHWKRVHDOWHUDWLRQVZKHUH

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

7$%/(6$1'),*85(62)&+$37(5


),*85(
5(&21),*85('63$&(


),*85(
6833/(0(17$/6+$)7$1')/22523(1,1*(1&/2685(5(48,5(0(176

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/


),*85(
(;$03/(

1 m DOORS

),*85(
0$,1(175$1&(²*5283$

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/


),*85(
'2256:,1*

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/


),*85(
6833/(0(17$/5(48,5(0(176)25'2256:,1*


),*85(
+$1'5$,/6

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/


),*85(
5(6,'(17,$/2&&83$1&<(/(&75,&$/


),*85(
0,1,0803/80%,1*),;785(6



6%&&& 

&+$37(5²$/7(5$7,216²/(9(/
























7KLVSDJHOHIWLQWHQWLRQDOO\EODQN

6%&&& 

 &+$37(5²$/7(5$7,216²/(9(/

²$/7(5$7,216²/(9(/

/HYHO  DOWHUDWLRQV DUH FRQWDLQHG LQ 6HFWLRQ

™ *HQHUDO&RPPHQWV

™ 7KLV FKDSWHU SURYLGHV WKH WHFKQLFDO
™ .QRZQLQSDVWFRGHVVLPSO\DV³DOWHUDWLRQV´WKH
UHTXLUHPHQWVIRUH[LVWLQJEXLOGLQJVWKDWXQGHUJR
FODVVLILFDWLRQ ZDV EURNHQ LQWR WKUHH OHYHOV
/HYHODOWHUDWLRQV5HIHUHQFHLVPDGHWR/HYHO
EDVHG RQ WKH IDFWV WKDW PLQRU DOWHUDWLRQV QRW
DOWHUDWLRQVDVGHVFULEHGLQ6HFWLRQZKLFK
LQFOXGLQJ VSDFH UHFRQILJXUDWLRQ DQG H[WHQVLYH
LQFOXGHVDQ\DOWHUDWLRQWKDWLQYROYHVPRUHWKDQ
DOWHUDWLRQVWKDWPLJKWLQFOXGHUHORFDWLRQRIZDOOV
 SHUFHQW RI WKH DJJUHJDWH DUHD RI WKH
DQGSDUWLWLRQVLQWKHHQWLUH EXLOGLQJVKRXOGEH
EXLOGLQJ
WUHDWHG GLIIHUHQWO\ DQG ZLWK GLIIHUHQW WKUHVKROG
™ 7KLV FKDSWHU VLPLODU WR RWKHU FKDSWHUV RI WKH
OHYHOVIRUUHTXLULQJXSJUDGHVRULPSURYHPHQWV
FRGHFRYHUVDOOEXLOGLQJUHODWHGVXEMHFWVVXFK
WRWKHEXLOGLQJRUVSDFHVLQWKHEXLOGLQJ
DV VWUXFWXUDO PHDQV RI HJUHVV DFFHVVLELOLW\
™ 3XUSRVH
DQGHQHUJ\FRQVHUYDWLRQDVZHOODVWKHILUHDQG
™ 7KH SXUSRVH RI WKLV FKDSWHU LV WR SURYLGH
OLIH VDIHW\ LVVXHV ZKHQ WKH DOWHUDWLRQV DUH
GHWDLOHGUHTXLUHPHQWVDQGSURYLVLRQVWRLGHQWLI\
FODVVLILHG DV /HYHO  6HFWLRQV   DQG
PDQGDWHG LPSURYHPHQWV LQ H[LVWLQJ EXLOGLQJ
 DUH UHODWHG WR VFRSLQJ VSHFLDO XVH DQG
HOHPHQWV EXLOGLQJ VSDFHV DQG EXLOGLQJ
RFFXSDQF\ DQG EXLOGLQJ HOHPHQWV DQG
VWUXFWXUDOV\VWHP7KLVFKDSWHULVGLVWLQJXLVKHG
PDWHULDOV ,Q WKH LQWHUHVW RI EHLQJ EULHI DQG
IURP&KDSWHUVDQGE\LQYROYLQJDOWHUDWLRQV
DYRLGLQJWKHSUHVHQWDWLRQRIPDWHULDOVWKDWDUH
WKDWFRYHUSHUFHQWRIWKHDJJUHJDWHDUHDRI
UHSHWLWLYHLQQDWXUHLQYDULRXVFKDSWHUV6HFWLRQ
WKHEXLOGLQJ/HYHODOWHUDWLRQVGRQRWLQYROYH
UHTXLUHVWKDW/HYHODOWHUDWLRQVFRPSO\
VSDFHUHFRQILJXUDWLRQZKLOH/HYHODOWHUDWLRQV
QRWRQO\ZLWK&KDSWHUEXWDOVRZLWK&KDSWHUV
LQYROYH VSDFH UHFRQILJXUDWLRQ WKDW GRHV QRW
 DQG  $V VXFK DQ\ DOWHUDWLRQ ZRUN WKDW LV
H[FHHG  SHUFHQW RI WKH EXLOGLQJ DUHD
FODVVLILHG DV /HYHO  LV DVVXPHG WR LQFOXGH
'HSHQGLQJRQWKHQDWXUHRIDOWHUDWLRQZRUNLWV
HYHU\WKLQJUHODWHGWR/HYHODQGDOWHUDWLRQV
ORFDWLRQ LQ WKH EXLOGLQJ DQG ZKHWKHU LW
SOXVWKHSURYLVLRQVRIWKLVFKDSWHU6HFWLRQ
HQFRPSDVVHV RQH RU PRUH WHQDQWV
%XLOGLQJ (OHPHQWV DQG 0DWHULDOV FRYHUV LQ
LPSURYHPHQWVDQGXSJUDGHVFRXOGEHUHTXLUHG
GHWDLO HOHPHQWV VXFK DV H[LVWLQJ VKDIWV DQG
IRU RSHQIORRU SHQHWUDWLRQV VSULQNOHU V\VWHPV
YHUWLFDO RSHQLQJV LQFOXGLQJ ZKHQ VXFK
RUWKHLQVWDOODWLRQRIDGGLWLRQDOPHDQVRIHJUHVV
RSHQLQJVPLJKWEHUHTXLUHGWREHHQFORVHGILUH
VXFKDVVWDLUVRUILUHHVFDSHV/HYHODOWHUDWLRQ
SDUWLWLRQVDQGLQWHULRUILQLVKHV7KHUHPDLQGHURI
UHTXLUHPHQWVQRORQJHUORRNDWRFFXSDQWORDGRU
WKHFKDSWHULVUHODWHGWRILUHSURWHFWLRQPHDQV
ZKHWKHU H[LWV DUH VKDUHG E\ PRUH WKDQ RQH
RI HJUHVV DFFHVVLELOLW\ VWUXFWXUDO HOHFWULFDO
WHQDQW ZKHQ DSSO\LQJ UHTXLUHPHQWV VXFK DV
PHFKDQLFDO DQG SOXPELQJ SURYLVLRQV 6HFWLRQ
VSULQNOHUVDVLVGRQHLQ&KDSWHUIRU/HYHO
 UHTXLUHV DGGLWLRQDO PHDQV RI HJUHVV
DOWHUDWLRQV $GGLWLRQDOO\ WKLV FKDSWHU LV
OLJKWLQJDQGH[LWVLJQVEH\RQGZKDWLVUHTXLUHG
LQWHQGHG WR LPSURYH WKH VDIHW\ RI FHUWDLQ
.HHS LQ PLQG WKDW 6HFWLRQ  FRYHUV D ZLGH
EXLOGLQJIHDWXUHVEH\RQGWKHZRUNDUHDDQGLQ
UDQJHRIPHDQVRIHJUHVVVXEMHFWVVXFKDVWKH
RWKHU SDUWVRIWKH EXLOGLQJ ZKHUH QRDOWHUDWLRQ
PLQLPXP QXPEHU RI H[LWV ILUH HVFDSH
ZRUNPLJKWEHWDNLQJSODFH
UHTXLUHPHQWVDQGFRQVWUXFWLRQGHWDLOVFRUULGRU
RSHQLQJV DQG H[LW VLJQV ZKLFK DUH DOVR 
DSSOLFDEOH KHUH 7KH VWUXFWXUDO SURYLVLRQV IRU
LQWHQGHGWRHQFRXUDJHLPSURYHGDFFHVVLELOLW\LQ
H[LVWLQJ EXLOGLQJV E\ DOORZLQJ DQ\ DOWHUDWLRQV
6(&7,21*(1(5$/ WKDW DUH VROHO\ IRU FRPSOLDQFH ZLWK WKH
 6FRSH/HYHODOWHUDWLRQVDVGHVFULEHGLQ DFFHVVLELOLW\ SURYLVLRQV RI 6HFWLRQ  WR RQO\
FRPSO\ZLWK&KDSWHUSURYLVLRQVDVLIQRVSDFH
6HFWLRQVKDOOFRPSO\ZLWKWKHUHTXLUHPHQWVRI
UHFRQILJXUDWLRQ KDV WDNHQ SODFH 7KLV LV DQ
WKLVFKDSWHU DGYDQWDJH IRU LPSURYLQJ WKH DFFHVVLELOLW\ RI
™ $Q\ DOWHUDWLRQ ZRUN WKDW UHVXOWV LQ EXLOGLQJV VLQFH &KDSWHU  LV UHODWHG WR
UHFRQILJXUDWLRQ RI VSDFH RU RWKHUZLVH IDOOV DOWHUDWLRQV WKDW GR QRW HQFRPSDVV DQ\ VSDFH
XQGHU WKH FODVVLILFDWLRQ RI /HYHO  DOWHUDWLRQV UHFRQILJXUDWLRQDQGDVVXFKKDVDORZHUOHYHO
DVGHVFULEHGLQ6HFWLRQPXVWFRPSO\ZLWK RI FRPSOLDQFH UHTXLUHPHQWV DQG ORZHU
&KDSWHU  7KH H[FHSWLRQ RI 6HFWLRQ  LV WKUHVKROGIRUWULJJHULQJRWKHULPSURYHPHQWV

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

 &RPSOLDQFH,QDGGLWLRQWRWKHSURYLVLRQV ™ $ KLJKULVH EXLOGLQJ LV GHILQHG DV D EXLOGLQJ

RI WKLVFKDSWHUZRUN VKDOOFRPSO\ZLWKDOORIWKH KDYLQJ DQ RFFXSLHG IORRU ORFDWHG PRUH WKDQ
UHTXLUHPHQWVRI&KDSWHUVDQG7KHUHTXLUHPHQWV PDERYHWKHORZHVWOHYHORIILUHGHSDUWPHQW
RI6HFWLRQVDQGVKDOODSSO\ZLWKLQDOO YHKLFOHDFFHVVZKLFKLVWKHVDPHDVWKH6%&
 FULWHULD IRU LGHQWLI\LQJ D KLJKULVH EXLOGLQJ
ZRUN DUHDV ZKHWKHU RU QRW WKH\ LQFOXGH H[LWV DQG
,Q KLJKULVH EXLOGLQJV XQGHUJRLQJ D /HYHO 
FRUULGRUV VKDUHG E\ PRUH WKDQ RQH WHQDQW DQG DOWHUDWLRQWKHVXEMHFWVRIUHFLUFXODWLQJDLUDQG
UHJDUGOHVVRIWKHRFFXSDQWORDG HOHYDWRUV PXVW VSHFLILFDOO\ EH DGGUHVVHG $OO
([FHSWLRQ%XLOGLQJVLQZKLFKWKHUHFRQILJXUDWLRQ RWKHUSURYLVLRQVRI&KDSWHUVWLOODSSO\WRKLJK
RI VSDFH DIIHFWLQJ H[LWV RUVKDUHG HJUHVVDFFHVVLV ULVHEXLOGLQJVEXWWKHVHWZRDUHVSHFLILFRQO\WR
H[FOXVLYHO\ WKH UHVXOW RI FRPSOLDQFH ZLWK WKH KLJKULVHV7KHQRWDEOHGLIIHUHQFHEHWZHHQWKLV
DFFHVVLELOLW\ UHTXLUHPHQWV RI 6HFWLRQ  VKDOO VHFWLRQDQG6%&6HFWLRQLVWKDW6%&
QRWEHUHTXLUHGWRFRPSO\ZLWKWKLVFKDSWHU 6HFWLRQKDVILYHH[FHSWLRQV7KHILYH
H[FHSWLRQVDUHEXLOGLQJVWKDWGRQRWIDOOXQGHU
™ &KDSWHUVDQGKDYHFDVFDGLQJHIIHFWVLQWKDW WKH KLJKULVH SURYLVLRQV RI 6%&  6HFWLRQ
HDFK OHYHO RI DOWHUDWLRQ PXVW FRPSO\ ZLWK WKH  7KH FRGH GRHV QRW FRQWDLQ DQ\ RI WKHVH
UHTXLUHPHQWV IRU ORZHU OHYHOV RI DOWHUDWLRQ ILYHH[FHSWLRQV6RZKHWKHUWKHEXLOGLQJXQGHU
$FFRUGLQJO\ DQ DOWHUDWLRQ SURMHFW WKDW LV FRQVLGHUDWLRQ LVDQDLUSRUW WUDIILFFRQWUROWRZHU
FODVVLILHGDV/HYHOPXVWFRPSO\ZLWK&KDSWHU VHH6%&6HFWLRQ([FHSWLRQDQ
 DV ZHOO DV ZLWK &KDSWHU  6LPLODUO\ DQ RSHQ SDUNLQJ JDUDJH VHH 6%&  6HFWLRQ
DOWHUDWLRQ SURMHFW FODVVLILHG DV /HYHO  PXVW  ([FHSWLRQ  D *URXS $ RFFXSDQF\
FRPSO\ ZLWK &KDSWHUV   DQG  7KLV LV WR VHH 6%&  6HFWLRQ  ([FHSWLRQ  D
HOLPLQDWHWKHUHSHWLWLRQRIYDULRXVUHTXLUHPHQWV ORZKD]DUG VSHFLDO LQGXVWULDO RFFXSDQF\ VHH
IURP&KDSWHULQ&KDSWHUVDQGDQGIURP 6%&  6HFWLRQ  ([FHSWLRQ  RU D
&KDSWHULQ&KDSWHU *URXS + + RU + RFFXSDQF\ VHH 6%&
™ .HHSLQPLQGWKDW6HFWLRQLVDSSOLFDEOHLQ  6HFWLRQ  ([FHSWLRQ  WKH UH
WKLV FKDSWHU DV ZHOO 6HFWLRQ  UHTXLUHV FLUFXODWLQJDLUDQGHOHYDWRUUHFDOOUHTXLUHPHQWV
WKDW QHZ HOHPHQWV FRPSRQHQWV DQG VSDFHV RI6HFWLRQVDQGDUHDSSOLFDEOH
FUHDWHG DV D UHVXOW RI /HYHO  DOWHUDWLRQ ZRUN (YHQWKRXJKWKLVDSSHDUVWREHPRUHUHVWULFWLYH
PXVW FRPSO\ ZLWK WKH 6%&  RU RWKHU WKDQ WKH 6%&  LW UHDOO\ LV QRW EHFDXVH LQ
DSSOLFDEOHFRGHVMXVWDV 6HFWLRQRIWKH PRVWEXLOGLQJVWKHILYHH[FHSWLRQVLQ 6%&
6%&  PDNHV UHIHUHQFH WR RWKHU 6DXGL 6HFWLRQKDYHDVSHFLDOVHFWLRQLQWKH6%&
%XLOGLQJ&RGHVVXFKDV6%&6%&DQG WKDWWKH\PXVWFRPSO\ZLWKVHH6%&
6%&3OHDVHUHYLHZWKHUHTXLUHPHQWVDQG 6HFWLRQVDQG
FRPPHQWDU\ LQ 6HFWLRQ  LQFOXGLQJ WKH ™ $OVR QRWH WKDW 6%&  6HFWLRQ 
H[FHSWLRQVZKLFKDOVRDSSO\ UHTXLUHV WKH LPSOHPHQWDWLRQ RI 3KDVH  UHFDOO
™ 7KH H[FHSWLRQ DOORZV IRU ZKHQ D /HYHO  DQG3KDVHHPHUJHQF\LQFDURSHUDWLRQIRUDOO
DOWHUDWLRQ WR D SULPDU\ IXQFWLRQ DUHD SURPSWV H[LVWLQJ HOHYDWRUV WKDW WUDYHO D GLVWDQFH PRUH
LPSURYHPHQW WR WKH URXWH EDWKURRPV DQG WKDQ  PP UHJDUGOHVV RI ZKHWKHU DQ
GULQNLQJIRXQWDLQVLQDFFRUGDQFHZLWK6HFWLRQ DOWHUDWLRQLVEHLQJXQGHUWDNHQLQWKHEXLOGLQJ
 DQG WKXV D UHFRQILJXUDWLRQ RI WKH
VSDFH /HYHO  WULJJHUV RWKHU UHTXLUHPHQWV 5HFLUFXODWLQJ DLU RU H[KDXVW V\VWHPV
VXFK DV VSULQNOHUV ZKHQ D VSDFH LV :KHQ D IORRU LV VHUYHG E\ D UHFLUFXODWLQJ DLU RU
UHFRQILJXUHG7KLVH[FHSWLRQDOORZVWKHSURMHFW H[KDXVW V\VWHP ZLWK D FDSDFLW\ JUHDWHU WKDQ 
WRUHPDLQD/HYHODOWHUDWLRQ PVWKDWV\VWHPVKDOOEHHTXLSSHGZLWKDSSURYHG
6(&7,2163(&,$/86($1' VPRNH DQG KHDW GHWHFWLRQ GHYLFHV LQVWDOOHG LQ
DFFRUGDQFHZLWKWKH6%&
2&&83$1&<
™ 7KLV VHFWLRQ DSSOLHV WR D KLJKULVH EXLOGLQJ
 +LJKULVHEXLOGLQJV$Q\EXLOGLQJKDYLQJ XQGHUJRLQJD/HYHODOWHUDWLRQDVGHVFULEHGLQ
RFFXSLHGIORRUVPRUHWKDQPDERYHWKHORZHVW 6HFWLRQZKLFKKDVDIORRUVHUYHGE\DUH
OHYHORIILUHGHSDUWPHQWYHKLFOHDFFHVVVKDOOFRPSO\ FLUFXODWLQJDLURUH[KDXVWV\VWHPZLWKDFDSDFLW\
ZLWK WKH UHTXLUHPHQWV RI 6HFWLRQV  DQG JUHDWHU WKDQ  PV 6XFK D V\VWHP LV
 UHTXLUHGWREHHTXLSSHGZLWKDSSURYHGVPRNH
DQG KHDW GHWHFWLRQ GHYLFHV 7KLV LV FOHDUO\ D
™ 7KLV LV WKH FKDUJLQJ SDUDJUDSK IRU KLJKULVH
FRQGLWLRQZKHUHODUJHPHFKDQLFDOGHYLFHVKDYH
UHTXLUHPHQWV 7KH VSHFLILF UHTXLUHPHQWV
WKH SRWHQWLDO RI VSUHDGLQJ SURGXFWV RI
FRQWDLQHGKHUHLQSHUWDLQWRWKHUHFLUFXODWLQJRU
FRPEXVWLRQ TXLFNO\ WKURXJK D SDUWLFXODU IORRU
H[KDXVWLQJ RI DLU VHH 6HFWLRQ  RU
DQG EH\RQG 2YHU WKH \HDUV LW KDV EHHQ
HOHYDWRUVVHH6HFWLRQ
UHFRJQL]HG WKDW PDQ\ LQMXULHV DQG GHDWKV LQ
KLJKULVH ILUHV KDYH EHHQ WKH UHVXOW RI VPRNH

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

LQKDODWLRQGXHWRVPRNHSHQHWUDWLQJWKHIORRUV  )XUQDFHDQGERLOHUHTXLSPHQWZLWKî

DERYH WKH IORRU RI ILUH RULJLQ 7KH VPRNH DQG -SHUKRXULQSXWUDWLQJRUOHVVLVQRWUHTXLUHG
KHDWGHWHFWLRQGHYLFHVUHTXLUHGWREHLQVWDOOHG WREHHQFORVHG
LQ DFFRUGDQFHZLWKWKH6%&DUH LQWHQGHG  )XUQDFH URRPV SURWHFWHG ZLWK DQ DXWRPDWLF
WR VKXW GRZQ WKH PHFKDQLFDO FLUFXODWLQJ DLU RU
VSULQNOHU V\VWHP DUH QRW UHTXLUHG WR EH
H[KDXVW V\VWHP DQG WR UHGXFH WKH SRWHQWLDO
VSUHDGRIVPRNH HQFORVHG
™ 7KH ERLOHU DQG IXUQDFH URRP VHSDUDWLRQ
(OHYDWRUV  :KHUH WKHUH LV DQ HOHYDWRU RU
UHTXLUHPHQWV DUH EDVHG RQ WKH VHSDUDWLRQ
HOHYDWRUV IRU SXEOLF XVH DW OHDVW RQH HOHYDWRU FRQFHSWRI6%&6HFWLRQEXWWKHWULJJHU
VHUYLQJ WKH ZRUN DUHD VKDOO FRPSO\ ZLWK WKLV PHFKDQLVP LV GLIIHUHQW IURP WKDW RI WKH 6%&
VHFWLRQ([LVWLQJHOHYDWRUVZLWKDWUDYHOGLVWDQFHRI  7KH 6%&  UHTXLUHV DQ\ ERLOHU RU
 P RU PRUH DERYH RU EHORZ WKH PDLQ IORRU RU IXUQDFHURRPZLWKDVLQJOHSLHFHRIHTXLSPHQW
RWKHUOHYHORIDEXLOGLQJDQGLQWHQGHGWRVHUYHWKH ODUJHUWKDQZDWWVLQSXWWREHVHSDUDWHG
QHHGV RI HPHUJHQF\ SHUVRQQHO IRU ILUHILJKWLQJ RU IURPWKHPDLQDUHDVE\DILUHEDUULHUZKHUHDV
UHVFXHSXUSRVHVVKDOOEHSURYLGHGZLWKHPHUJHQF\ WKLV FRGH DGGLWLRQDOO\ UHTXLUHV DQ\ VXFK URRP
RSHUDWLRQ LQ DFFRUGDQFH ZLWK $60( $ 1HZ ZLWK KLJKSUHVVXUHW\SH HTXLSPHQW EH
HOHYDWRUVVKDOOEHSURYLGHGZLWK3KDVH,HPHUJHQF\ VHSDUDWHGIURPFHUWDLQXVHV+LJKSUHVVXUH LV
FRQVLGHUHGN3DIRUVWHDP HTXLSPHQWDQG
UHFDOO RSHUDWLRQ DQG 3KDVH ,, HPHUJHQF\ LQFDU
 N3D IRU KRW ZDWHU HTXLSPHQW 7KH XVHV
RSHUDWLRQLQDFFRUGDQFHZLWK$60($ IURPZKLFKWKHVHSDUDWLRQLVUHTXLUHGDUHWKRVH
™ 7KH HOHYDWRU UHFDOO SURYLVLRQV IRXQG LQ WKLV WKDW DUH UHVLGHQWLDO LQ QDWXUH RU RFFXSDQFLHV
VHFWLRQ DUH WDNHQ IURP WKH 6%&  DQG DUH FRQWDLQLQJ RFFXSDQWV ZKR DUH QRW FDSDEOH RI
LQWHQGHG WR DFFRPPRGDWH WKH QHHGV RI VHOISUHVHUYDWLRQ VXFK DV KRVSLWDOV DQG GD\
HPHUJHQF\SHUVRQQHOIRUILUHILJKWLQJRUUHVFXH FDUHIDFLOLWLHV)XUQDFHURRPVSURWHFWHGZLWKDQ
SXUSRVHV (OHYDWRUV DUH RIWHQ XVHG E\ DXWRPDWLFVSULQNOHUV\VWHPDUHQRWUHTXLUHGWR
HPHUJHQF\ UHVSRQGHUV WR DFFHVV D EXLOGLQJ¶V EHVHSDUDWHG
YDULRXV IORRU OHYHOV ZKHQ UHVSRQGLQJ WR ILUHV
DQG RWKHU HPHUJHQFLHV EHFDXVH RI WKHVH 6(&7,21%8,/',1*(/(0(176
QHHGV WKH HOHYDWRUV PXVW EH FDSDEOH RI $1'0$7(5,$/6
SURYLGLQJFHUWDLQIXQFWLRQVVXFKDVUHFDOODQG  ([LVWLQJ VKDIWV DQG YHUWLFDO RSHQLQJV
HPHUJHQF\RSHUDWLRQ
([LVWLQJ VWDLUZD\V WKDW DUH SDUW RI WKH PHDQV RI
™ ([LVWLQJ HOHYDWRUV WKDW WUDYHO  P RU PRUH
DERYH RU EHORZ WKH PDLQ OHYHO VKRXOG DW HJUHVVVKDOOEHHQFORVHGLQDFFRUGDQFHZLWK6HFWLRQ
PLQLPXP EH HTXLSSHG ZLWK HPHUJHQF\  IURP WKH KLJKHVW ZRUN DUHD IORRU WR DQG
RSHUDWLRQ FDSDELOLWLHV WKDW FRPSO\ ZLWK $60( LQFOXGLQJWKHOHYHORIH[LWGLVFKDUJHDQGDOOIORRUV
$ 1HZ HOHYDWRU LQVWDOODWLRQV DUH KHOG WR EHORZ
PRUH UHVWULFWLYH UHTXLUHPHQWV DQG PXVW KDYH
™ 7KLV VHFWLRQ DGGUHVVHV WKH HQFORVXUH RI
ERWK HPHUJHQF\ UHFDOO DQG HPHUJHQF\ LQFDU
H[LVWLQJ VWDLUZD\V RQO\ 2WKHU VKDIWV DQG IORRU
RSHUDWLRQWRFRPSO\ZLWK$60($IRUDQ\
RSHQLQJV DUH UHJXODWHG H[DFWO\ WKH VDPH DV
DPRXQW RI WUDYHO GLVWDQFH 7KH $60( $
XQGHU /HYHO  DOWHUDWLRQV 7KH FRGH XVHU LV
VWDQGDUGV DUH VDIHW\ FRGHV IRU HOHYDWRUV DQG
UHIHUUHG WR 6HFWLRQ  IRU VWDLUZD\
HVFDODWRUV $60( $ LV IRU QHZ HOHYDWRU
HQFORVXUH PHWKRGV DQG WULJJHUV 6XFK
LQVWDOODWLRQVDQG$LVIRUH[LVWLQJHOHYDWRUV
HQFORVXUHVWKRXJKPXVWEHSURYLGHGIURPWKH
 %RLOHU DQG IXUQDFH HTXLSPHQW URRPV KLJKHVWZRUNDUHDIORRUDOOWKHZD\WRWKHOHYHO
%RLOHUDQGIXUQDFHHTXLSPHQWURRPVDGMDFHQWWRRU RI H[LW GLVFKDUJH DQG DOO WKH IORRUV EHORZ WKH
ZLWKLQ *URXSV , , , 5 5 DQG 5 OHYHO RI H[LW GLVFKDUJH 1RWH WKDW WKHVH
HQFORVXUHUHTXLUHPHQWVZRXOGDOVRLQFOXGHWKH
RFFXSDQFLHV VKDOO EH HQFORVHG E\ KRXU ILUH
OHYHORIH[LWGLVFKDUJH7KLVUHTXLUHPHQWLVRQO\
UHVLVWDQFHUDWHGFRQVWUXFWLRQ DSSOLFDEOH WR VWDLUZD\V WKDW DUH SDUW RI WKH
([FHSWLRQV PHDQVRIHJUHVVDQGQRWRWKHUVWDLUZD\VXVHG
IRUFRQYHQLHQFHDWWHQGLQJHTXLSPHQWRUWKRVH
 6WHDPERLOHUHTXLSPHQWRSHUDWLQJDWSUHVVXUHV WKDWKDYHRWKHUVSHFLILFSXUSRVHV
RI  N3D RU OHVV LV QRW UHTXLUHG WR EH
HQFORVHG  )LUH SDUWLWLRQV LQ *URXS 5  )LUH
 +RW ZDWHU ERLOHUV RSHUDWLQJ DW SUHVVXUHV RI VHSDUDWLRQ LQ *URXS 5 RFFXSDQFLHV VKDOO EH LQ
 N3D RU OHVV DUH QRW UHTXLUHG WR EH DFFRUGDQFHZLWK6HFWLRQ
HQFORVHG ™ 7KLV LV WKH FKDUJLQJ SDUDJUDSK IRU ILUH
VHSDUDWLRQVEHWZHHQGZHOOLQJXQLWVLQ*URXS5

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

 RFFXSDQFLHV VHQGLQJ WKH FRGH XVHU WR LQ/HYHODOWHUDWLRQVLVWKHH[WHQWRIFRYHUDJH

6HFWLRQ,WVKRXOGEHQRWHGWKDWWKHWLWOH ([LWV VHUYLQJ WKH ZRUN DUHD PXVW FRPSO\ ZLWK
RI WKLV VHFWLRQ LV VRPHZKDW PLVOHDGLQJ WKH LQWHULRU ILQLVK UHTXLUHPHQWV RI 6HFWLRQ
UHIHUULQJ WR ³ILUH SDUWLWLRQV´ ZKLFK DUH GHILQHG IURPWKHKLJKHVWIORRUZKHUHWKHUHLVDQ\
DQG GHWDLOHG VSHFLILFDOO\ LQ WKH 6%&  ZRUN DUHD WR WKH IORRU RI H[LW GLVFKDUJH $Q\
+RZHYHU WKH UHJXODWRU\ WH[W GHVFULEHV WKH FRUULGRUV LQ WKH ZRUN DUHD PXVW DOVR FRPSO\
UHTXLUHGVHSDUDWLRQEHWZHHQWKHGZHOOLQJXQLWV ZLWK 6HFWLRQ  DV 6HFWLRQ  UHTXLUHV
QHYHU DFWXDOO\ UHTXLULQJ FRQVWUXFWLRQ RI ILUH DOO/HYHODOWHUDWLRQVWRFRPSO\ZLWK&KDSWHUV
SDUWLWLRQVDVGHVFULEHGLQWKH6%& DQG1RWHWKDW&KDSWHURIWKH6%&
KDV LQWHULRU ILQLVK UHTXLUHPHQWV IRU H[LVWLQJ
6HSDUDWLRQ UHTXLUHG  :KHUH WKH ZRUN EXLOGLQJV
DUHDLVLQDQ\DWWDFKHGGZHOOLQJXQLWLQ*URXS5
RU DQ\ PXOWLSOH VLQJOHIDPLO\ GZHOOLQJ 6(&7,21),5(3527(&7,21
WRZQKRXVH ZDOOV VHSDUDWLQJ WKH GZHOOLQJ XQLWV  $XWRPDWLF VSULQNOHU V\VWHPV  $Q
WKDWDUHQRWFRQWLQXRXVIURPWKHIRXQGDWLRQWRWKH DXWRPDWLFVSULQNOHUV\VWHPVKDOO EH SURYLGHGLQ D
XQGHUVLGHRIWKHURRIVKHDWKLQJVKDOOEHFRQVWUXFWHG ZRUNDUHDZKHUHUHTXLUHGE\6HFWLRQRUWKLV
WR SURYLGH D FRQWLQXRXV ILUH VHSDUDWLRQ XVLQJ VHFWLRQ
FRQVWUXFWLRQPDWHULDOVFRQVLVWHQWZLWKWKHH[LVWLQJ
ZDOO RU FRPSO\LQJ ZLWK WKH UHTXLUHPHQWV IRU QHZ ™ $XWRPDWLF VSULQNOHU UHTXLUHPHQWV DUH
VWUXFWXUHV$OOZRUNVKDOOEHSHUIRUPHGRQWKHVLGH UHIHUHQFHG E\ 6HFWLRQ  ZKHUH WKH
UHTXLUHPHQWV IRU YDULRXV RFFXSDQFLHV PL[HG
RI WKH GZHOOLQJ XQLW ZDOO WKDW LV SDUW RI WKH ZRUN
XVHVDQGZLQGRZOHVVVWRULHVDUHSURYLGHG7KLV
DUHD VHFWLRQKDVVSHFLILFUHTXLUHPHQWVIRUKLJKULVH
([FHSWLRQ  :KHUH DOWHUDWLRQV RU UHSDLUV GR QRW EXLOGLQJVDQGUXEELVKDQGOLQHQFKXWHV:KHQ
UHVXOW LQ WKH UHPRYDO RI ZDOO RU FHLOLQJ ILQLVKHV 6HFWLRQ  UHTXLUHV DQ DXWRPDWLF VSULQNOHU
H[SRVLQJWKHVWUXFWXUHZDOOVDUHQRWUHTXLUHGWREH V\VWHP IRU D /HYHO  DOWHUDWLRQ WKH V\VWHP
ZRXOGDOVREHUHTXLUHGIRUD/HYHODOWHUDWLRQ
FRQWLQXRXVWKURXJKFRQFHDOHGIORRUVSDFHV
WKURXJKRXWWKHZRUNDUHD
™ 7KHVHSDUDWLRQRIGZHOOLQJXQLWVLQGXSOH[DQG
WRZQKRXVH EXLOGLQJV LV IRXQG LQ &KDSWHU  RI +LJKULVH EXLOGLQJV  $Q DXWRPDWLF
WKH6DXGL6%&IRUQHZFRQVWUXFWLRQ7KH VSULQNOHU V\VWHP VKDOO EH SURYLGHG LQ ZRUN DUHDV
FRGH LQ WKLV VHFWLRQ DGGUHVVHV WKH YHUWLFDO ZKHUH WKH KLJKULVH EXLOGLQJ KDV D VXIILFLHQW
VHSDUDWLRQDVSHFWRQO\,IWKHDOWHUDWLRQLQFOXGHV PXQLFLSDO ZDWHU VXSSO\ IRU WKH GHVLJQ DQG
WKH UHPRYDO RI ZDOO RU FHLOLQJ ILQLVKHV WKDW LQVWDOODWLRQRIDQDXWRPDWLFVSULQNOHUV\VWHPDWWKH
H[SRVHWKHZDOOVWUXFWXUH WKHQWKHVHSDUDWLRQ VLWH
ZDOOPXVWEH HYDOXDWHGIRUFRQWLQXLW\IURPWKH
IRXQGDWLRQ WR URRI GHFN 7KH H[LVWLQJ ZDOO ™ :KHUH WKHUH LV VXIILFLHQW PXQLFLSDO ZDWHU WR
FRQVWUXFWLRQ LV DOORZHG WR UHPDLQ DQG EH VXSSO\ DQ DXWRPDWLFVSULQNOHUV\VWHP WKHQDOO
FRQWLQXHG WR WKH URRI GHFN HYHQ LI LW GRHV QRW RIWKHZRUNDUHDVLQWKHKLJKULVHEXLOGLQJPXVW
SURYLGH WKH 6%& ¶V UHTXLUHG KRXU ILUH EH VSULQNOHUHG ³$W WKH VLWH´ UHIHUV WR WKH
UHVLVWDQFH UDWLQJ ,W LV LQWHQGHG WKDW WKLV DYDLODELOLW\RIZDWHUDWWKHSURSHUW\OLQHDQGQRW
UHTXLUHPHQW QRW FUHDWH D EXUGHQ IRU WKH DWWKHEXLOGLQJLWVHOI,QFHUWDLQKLJKULVH/HYHO
UHVLGHQWV RI DGMDFHQW GZHOOLQJV LI WKH\ DUH QRW DOWHUDWLRQSURMHFWVWKLVFRXOGKDYHWKHHIIHFW
LQYROYHGLQWKHDOWHUDWLRQSURMHFWDVVXFKLWLV RIUHTXLULQJWKHGHVLJQDQGLQVWDOODWLRQRIDQHZ
DOORZHGWKDWWKHH[WHQVLRQRIVXFKZDOOVWRWKH ILUHOLQHPDLQDQGDVVRFLDWHGYDXOWVYDOYHVDQG
URRI GHFN EH SODFHG RQ WKH VLGH ZKHUH DQ RWKHU UHODWHG FRPSRQHQWV IURP WKH PXQLFLSDO
DOWHUDWLRQSURMHFWLVWDNLQJSODFHDQGQRWLQWUXGH ZDWHUPDLQWRWKHEXLOGLQJ6SULQNOHUVFRXOGEH
LQWKHQHLJKERULQJXQLWV UHTXLUHG EH\RQG WKH ZRUN DUHDV RQ DQ\ IORRU
ZKHUHWKHZRUNDUHDH[FHHGVSHUFHQWRIWKDW
 ,QWHULRU ILQLVK  ,QWHULRU ILQLVK LQ H[LWV IORRU DUHD 7KLV H[WHQVLRQ RI VSULQNOHUV LV QRW
VHUYLQJ WKH ZRUN DUHD VKDOO FRPSO\ ZLWK 6HFWLRQ UHTXLUHG LQ WHQDQW VSDFHV WKDW DUH HQWLUHO\
EHWZHHQWKHKLJKHVWIORRURQZKLFKWKHUHLVD RXWVLGH RI WKH ZRUN DUHD VHH &RPPHQWDU\
ZRUNDUHDWRWKHIORRURIH[LWGLVFKDUJH )LJXUH
™ ([DPSOH
™ 7KH LQWHULRU ILQLVK PDWHULDOV LQ /HYHO  ™ 6SULQNOHUVUHTXLUHGLQ
DOWHUDWLRQV DUH UHJXODWHG WKH VDPH DV /HYHO  ™ /HYHO7HQDQWVDQGPRUHWKDQSHUFHQW
DOWHUDWLRQV 7KH UHDGHU LV UHIHUUHG WR 6HFWLRQ RI IORRU²WHQDQW  LV HQWLUHO\ RXWVLGH WKH ZRUN
ZKHUHWKHFRGHUHTXLUHVLQWHULRUILQLVKHV DUHD
LQH[LWVDQGFRUULGRUVVHUYLQJWKHZRUNDUHDWR
FRPSO\ ZLWK WKH LQWHULRU ILQLVK UHTXLUHPHQWV RI
WKH6%&7KHRQO\DGGLWLRQDOUHTXLUHPHQW

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

™ /HYHO  3DUWV RI WHQDQWV   DQG  WKDW DUH ,WHP7KHDSSOLFDWLRQRIWKLVVHFWLRQ
ZLWKLQ WKH ZRUN DUHD ZRUN DUHDV RQO\²OHVV ZLOORQO\UHTXLUHDQDXWRPDWLFVSULQNOHUV\VWHP
WKDQSHUFHQWRIIORRUDUHD LQWKHZRUNDUHDYHUVXVWKURXJKRXWWKHEXLOGLQJ
™ /HYHO7HQDQWZRUNDUHDQRWPRUHWKDQ DVUHTXLUHGE\WKH6%&DQG6%&1RWH
SHUFHQW²WHQDQW  LV HQWLUHO\ RXWVLGH RI ZRUN WKDWWKLVUHTXLUHPHQWLVEDVHGRQWKHVL]HRIWKH
DUHD RFFXSDQF\YHUVXVWKHVL]HRIWKHILUHDUHD)RU
™ /HYHO  7HQDQWV    DQG  ZRUN DUHD LV H[DPSOH FRQVLGHU D P *URXS 0
PRUHWKDQSHUFHQWRIIORRUDUHD²WHQDQWV 2FFXSDQF\ZLWKDPZRUNDUHD$OWKRXJK
DQGDUHQRWHQWLUHO\RXWVLGHWKHZRUNDUHD WKHZRUNDUHDLVOHVVWKDQPWKH*URXS0
™ /HYHO  7HQDQWV    DQG  ZRUN DUHD LV RFFXSDQF\LVP7KHUHIRUHWKHP
PRUH WKDQ  SHUFHQW RI WKH DUHD²WHQDQWV  ZRUN DUHD ZRXOG QHHG WR EH SURYLGHG ZLWK DQ
DQGDUHQRWHQWLUHO\RXWVLGHWKHZRUNDUHD DXWRPDWLFVSULQNOHUV\VWHP
5XEELVK DQGOLQHQ FKXWHV  5XEELVK DQG  )LUH DODUP DQG GHWHFWLRQV\VWHPV  )LUH
OLQHQ FKXWHV ORFDWHG LQ WKH ZRUN DUHD VKDOO EH DODUPDQGGHWHFWLRQVKDOOEHSURYLGHGLQDFFRUGDQFH
SURYLGHG ZLWK DXWRPDWLF VSULQNOHU V\VWHP ZLWK6HFWLRQRI6%&DVUHTXLUHGIRUQHZ
SURWHFWLRQ RU DQ DSSURYHG DXWRPDWLF ILUH FRQVWUXFWLRQ
H[WLQJXLVKLQJ V\VWHP ZKHUH SURWHFWLRQ RI WKH ™ 7KLV VHFWLRQ HVVHQWLDOO\ UHTXLUHV ILUH DODUP
UXEELVKDQGOLQHQFKXWHZRXOGEHUHTXLUHGXQGHUWKH V\VWHPV DV LI WKH EXLOGLQJ ZHUH QHZ 7KH
SURYLVLRQVRIWKH6%&IRUQHZFRQVWUXFWLRQ UHTXLUHPHQWV GR QRW VWDWH ³WKURXJKRXW WKH
™ ,QDQ\EXLOGLQJXQGHUJRLQJD/HYHODOWHUDWLRQ EXLOGLQJ´ DV LW LV QRW DOZD\V WKH FDVH WKDW WKH
WKHUXEELVKDQGOLQHQFKXWHVLQWKHZRUNDUHDV ILUHDODUPUHTXLUHPHQWVZRXOGDSSO\WKURXJKRXW
PXVWEHSURYLGHGZLWKVSULQNOHUVLQDFFRUGDQFH WKHEXLOGLQJ7KHUHIHUHQFHWR6%&6HFWLRQ
ZLWK WKH 6%&  7KH 6%&  UHTXLUHV DQ DOORZVWKLVWREH GHDOWZLWK DVDSSOLFDEOH
DXWRPDWLFVSULQNOHUV\VWHPDWWKHWRSDQGLQWKH 0RVWRIWKHILUHDODUPUHTXLUHPHQWVDUHEDVHG
WHUPLQDOURRPVRIWKHUXEELVKDQGOLQHQFKXWHV RQ RFFXSDQF\ UDWKHU WKDQ ILUH DUHD ZKLFK LV
DQGDGGLWLRQDOVSULQNOHUKHDGVDUHUHTXLUHGDW W\SLFDOO\ WKH EDVLV IRU DXWRPDWLF VSULQNOHU
DOWHUQDWH IORRUV DQG DW WKH ORZHVW LQWDNH 7KH V\VWHPV 6HFWLRQV  DQG  DUH
6%&DOVRUHTXLUHVSURWHFWLRQDWDOWHUQDWLQJ H[FHSWLRQV WR WKLV PRUH JHQHUDO FRPSOLDQFH
IORRUVZKHUHWKHFKXWHH[WHQGVPRUHWKDQRQH UHTXLUHPHQWZLWKWKH6%&ZKLFKIRFXVRQ
IORRUEHORZWKHORZHVWLQWDNH$FFRUGLQJO\LQD LQVWDOODWLRQ RI VXFK V\VWHPV RQO\ LQ WKH ZRUN
IRXUVWRU\EXLOGLQJZKHUHWKHUHLVDOLQHQFKXWH DUHD
IURP WKH IRXUWK IORRU WR WKH ILUVW DQG WKHUH DUH 0DQXDO ILUH DODUP V\VWHPV  :KHUH
DOWHUDWLRQV RQ DOO IORRUV WKH FRGH VSULQNOHU UHTXLUHG E\ WKH 6%&  D PDQXDO ILUH DODUP
UHTXLUHPHQW IRU WKH FKXWH ZLOO EH H[DFWO\ WKH
V\VWHPVKDOOEHSURYLGHGWKURXJKRXWWKHZRUNDUHD
VDPH DV WKH 6%&  &KXWH VSULQNOHUV PXVW
EH DYDLODEOH IRU VHUYLFLQJ VHH &RPPHQWDU\ $ODUPQRWLILFDWLRQDSSOLDQFHVVKDOOEHSURYLGHGRQ
)LJXUH VXFKIORRUVDQGVKDOOEHDXWRPDWLFDOO\DFWLYDWHGDV
UHTXLUHGE\WKH6%&
8SKROVWHUHG IXUQLWXUH RU PDWWUHVVHV
:RUN DUHDV VKDOO EH SURYLGHG ZLWK DQ DXWRPDWLF ([FHSWLRQV
VSULQNOHU V\VWHP LQDFFRUGDQFH ZLWKWKH 6%&   $ODUPLQLWLDWLQJ DQG QRWLILFDWLRQ DSSOLDQFHV
ZKHUHDQ\RIWKHIROORZLQJFRQGLWLRQVH[LVW VKDOOQRWEHUHTXLUHGWREHLQVWDOOHGLQWHQDQW
VSDFHVRXWVLGHRIWKHZRUNDUHD
 $ *URXS ) RFFXSDQF\ XVHG IRU WKH  9LVXDO DODUP QRWLILFDWLRQ DSSOLDQFHV DUH QRW
PDQXIDFWXUH RI XSKROVWHUHG IXUQLWXUH RU UHTXLUHG H[FHSW ZKHUH DQ H[LVWLQJ DODUP
PDWWUHVVHVH[FHHGVP V\VWHPLVXSJUDGHGRUUHSODFHGRUZKHUHDQHZ
 $ *URXS 0 RFFXSDQF\ XVHG IRU WKH GLVSOD\ ILUHDODUPV\VWHPLVLQVWDOOHG
DQGVDOHRIXSKROVWHUHGIXUQLWXUHRUPDWWUHVVHV
H[FHHGVP ™ 0DQXDO ILUH DODUP V\VWHPV PXVW EH SURYLGHG
WKURXJKRXW WKH ZRUN DUHDV LQ DQ\ RFFXSDQF\
 $*URXS6RFFXSDQF\XVHGIRUWKHVWRUDJH
ZKHUH WKH 6%&  UHTXLUHV D PDQXDO ILUH
RIXSKROVWHUHGIXUQLWXUHRUPDWWUHVVHVH[FHHGV DODUP V\VWHP 1RWH WKDW WKLV VHFWLRQ RQO\
P UHTXLUHV VXFK V\VWHPV LQ WKH ZRUN DUHD 6%&
™ 7KLV VHFWLRQ UHTXLUHV VSULQNOHUV IRU WKH  6HFWLRQ  IRU H[DPSOH UHTXLUHV D
SURWHFWLRQ RI XSKROVWHUHG IXUQLWXUH DQG PDQXDOILUHDODUPV\VWHPLQ*URXS$%(DQG
PDWWUHVVHV 7KH UHTXLUHPHQWV PLUURU WKRVH 0RFFXSDQFLHVWKDWH[FHHGFHUWDLQWKUHVKROGV
UHTXLUHG LQ WKH 6%&  DQG 6%&  LQ 7KLVLVUHTXLUHGLQWKHZRUNDUHDVRQDQ\IORRU
6HFWLRQV,WHP,WHPDQG UHJDUGOHVV RI WKH VL]H RI WKH ZRUN DUHD RQ D

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

SDUWLFXODU IORRU 7KHUH DUH WZR H[FHSWLRQV IRU LOOXPLQDWLRQ EH SURYLGHGIURPWKHKLJKHVWIORRU
WKLV UHTXLUHPHQW ([FHSWLRQ  DGGUHVVHV WKH ZKHUHWKHUHLVDQ\ZRUNDUHDGRZQWRWKHOHYHO
W\SLFDO H[FHSWLRQ WKDW KDV EHHQ VHHQ LQ PDQ\ RIH[LWGLVFKDUJH7KHLQWHQVLW\RILOOXPLQDWLRQ
VHFWLRQVRIWKHFRGHZKLFKLVDQH[HPSWLRQIRU HPHUJHQF\ SRZHU DQG SHUIRUPDQFH RI WKH
WHQDQWVSDFHVWKDWDUHFRPSOHWHO\RXWVLGHRIWKH V\VWHP DUH GHWDLOHG LQ WKH 6%& 
ZRUN DUHD ([FHSWLRQ  LV DQ H[HPSWLRQ IRU UHTXLUHPHQWV
YLVXDODODUPQRWLILFDWLRQZKHQQRWXSJUDGLQJDQ
H[LVWLQJV\VWHPRULQVWDOOLQJDQHZV\VWHP  ([LW VLJQV  0HDQV RI HJUHVV IURP WKH
KLJKHVWZRUNDUHDIORRUWRWKHIORRURIH[LWGLVFKDUJH
$XWRPDWLFILUHGHWHFWLRQ:KHUHUHTXLUHG VKDOOEHSURYLGHGZLWKH[LWVLJQVLQDFFRUGDQFHZLWK
E\WKH 6%&IRUQHZEXLOGLQJVDXWRPDWLFILUH WKHUHTXLUHPHQWVRIWKH6%&
GHWHFWLRQV\VWHPVVKDOOEHSURYLGHGWKURXJKRXWWKH
™ 7KHDGGLWLRQDOFULWHULDIRUH[LWVLJQVUHTXLUHWKDW
ZRUNDUHD
WKH PHDQV RI HJUHVV IURP WKH KLJKHVW IORRU
™ 6%&  6HFWLRQ  DQG LWV VXEVHFWLRQV ZKHUHWKHUHLVDQ\ZRUNDUHDWRWKHOHYHORIH[LW
UHTXLUH DXWRPDWLF ILUH GHWHFWLRQ V\VWHPV IRU GLVFKDUJH EH SURYLGHG ZLWK H[LW VLJQV 7KH
FHUWDLQRFFXSDQFLHVDQGLQFHUWDLQORFDWLRQVLQ ORFDWLRQ KHLJKW LOOXPLQDWLRQ DQG RWKHU
D EXLOGLQJ VXFK DV VPRNH GHWHFWRU UHTXLUHPHQWV RI VXFK H[LW VLJQV PXVW FRPSO\
UHTXLUHPHQWV LQ PHFKDQLFDO HTXLSPHQW ZLWKWKH6%&
HOHFWULFDO WUDQVIRUPHU WHOHSKRQH HTXLSPHQW
DQGVLPLODUURRPV,QVRPHLQVWDQFHVVSULQNOHU 6(&7,21$&&(66,%,/,7<
SURWHFWLRQ RU RWKHU SURWHFWLYH PHDVXUHV FDQ  *HQHUDO  $ EXLOGLQJ IDFLOLW\ RU HOHPHQW
VXEVWLWXWH IRU VXFK DXWRPDWLF ILUH GHWHFWLRQ WKDW LV DOWHUHG VKDOO FRPSO\ ZLWK WKLV VHFWLRQ DQG
V\VWHPV 7KH SURYLVLRQV RI WKLV VHFWLRQ DOORZ
6HFWLRQVDQG
H[LVWLQJEXLOGLQJVWKDWDUHQRWHTXLSSHGZLWKDQ
DXWRPDWLF VSULQNOHU V\VWHP DXWRPDWLF ILUH ™ $OWHUDWLRQV FRYHUHG XQGHU WKLV VHFWLRQ PXVW
GHWHFWLRQ V\VWHP RU RWKHU VSHFLILF VDIHW\ PHHW DOO DFFHVVLELOLW\ UHTXLUHPHQWV LQ 6HFWLRQ
HTXLSPHQW WR XQGHUJR /HYHO  DOWHUDWLRQV DV  DV ZHOO DV WZR DGGLWLRQDO UHTXLUHPHQWV
ORQJ DV VRPH LPSURYHPHQW LQ WKH OLIH VDIHW\ FRYHUHGLQ6HFWLRQ
V\VWHPV RI WKH EXLOGLQJ LV DFKLHYHG )RU
H[DPSOH DQ H[LVWLQJ *URXS , QXUVLQJ KRPH  7\SH%GZHOOLQJRUVOHHSLQJXQLWV:KHUH
XQGHUJRLQJD/HYHODOWHUDWLRQZLOOEHUHTXLUHG IRXURUPRUH*URXS,,555RU5
WREHHTXLSSHGZLWKDQDXWRPDWLFILUHGHWHFWLRQ GZHOOLQJ RU VOHHSLQJ XQLWV DUH EHLQJ DOWHUHG WKH
V\VWHP LQ WKH FRUULGRUV DQG RWKHU VSDFHV WKDW UHTXLUHPHQWVRI6HFWLRQRI6%&IRU7\SH
DUH SHUPLWWHG WR EH RSHQ WR VXFK FRUULGRUV LQ %XQLWVDQG&KDSWHURI6%&IRUYLVLEOHDODUPV
DFFRUGDQFHZLWK6%&6HFWLRQ DSSO\ RQO\ WR WKH TXDQWLW\ RI WKH VSDFHV EHLQJ
6(&7,210($162)(*5(66 DOWHUHG
™ 7KLV VHFWLRQ VHWV IRUWK WKH UDWH IRU SURYLGLQJ
 *HQHUDO  7KH PHDQV RI HJUHVV VKDOO
7\SH%GZHOOLQJRUVOHHSLQJXQLWVLQ*URXS,
FRPSO\ZLWKWKHUHTXLUHPHQWVRI6HFWLRQH[FHSW , 5 5 RU 5 IDFLOLWLHV WKDW DUH
DVVSHFLILFDOO\UHTXLUHGLQ6HFWLRQVDQG XQGHUJRLQJ D /HYHO  DOWHUDWLRQ 7\SH % XQLWV
™ 7KHPHDQVRIHJUHVVUHTXLUHPHQWVIRU/HYHO DUHUHTXLUHGZKHQIRXURUPRUHXQLWVDUHDGGHG
DOWHUDWLRQV DUH WKH VDPH DV WKH /HYHO  LQWKHH[LVWLQJVKHOORUH[WHQVLYHO\DOWHUHG7KH
DOWHUDWLRQV IRXQG LQ 6HFWLRQ  ZLWK WKH 7\SH % XQLWV LQ WKH IDFLOLW\ DUH QRW UHTXLUHG WR
H[FHSWLRQWKDWWKHPHDQVRIHJUHVVOLJKWLQJDQG H[FHHG WKDW UHTXLUHG IRU QHZ FRQVWUXFWLRQ DV
H[LW VLJQV PXVW PHHW DQ DGGLWLRQDO FULWHULRQ LQGLFDWHG LQ 6HFWLRQ  6HFWLRQ 
$OVR LQ DFFRUGDQFH ZLWK 6HFWLRQ  WKH DOVR LQFOXGHV H[FHSWLRQV IRU WKH DGGLWLRQDO
PHDQV RI HJUHVVUHTXLUHPHQWVRI6HFWLRQ DFFHVVLEOH URXWH UHTXLUHPHQWV LQ VWUXFWXUHV
ZLOODSSO\UHJDUGOHVVRIZKHWKHUWKHZRUNDUHD ZKHUH 7\SH % XQLWV DUH DGGHG DV SDUW RI DQ
LQFOXGHV PRUH WKDQ RQH WHQDQW RU D FHUWDLQ DOWHUDWLRQ RU FKDQJH RI RFFXSDQF\ ,W LV
RFFXSDQWORDG XQUHDVRQDEOH WR UHTXLUH D JUHDWHU OHYHO RI
DFFHVVLELOLW\ LQ DQ H[LVWLQJ EXLOGLQJ WKDQ LV
 0HDQVRIHJUHVV OLJKWLQJ  0HDQV RI UHTXLUHGLQQHZFRQVWUXFWLRQ1RWHWKDW6HFWLRQ
HJUHVVIURPWKHKLJKHVWZRUNDUHDIORRUWRWKHIORRU  UHTXLUHV FRPSOLDQFH ZLWK 6%& 
RI H[LW GLVFKDUJH VKDOO EH SURYLGHG ZLWK DUWLILFLDO 6HFWLRQ  ZKHQ IRXU RU PRUH GZHOOLQJ RU
OLJKWLQJ ZLWKLQ WKH H[LW HQFORVXUH LQ DFFRUGDQFH VOHHSLQJ XQLWV DUH EHLQJ DGGHG DV SDUW RI DQ
ZLWKWKHUHTXLUHPHQWVRIWKH6%& DGGLWLRQEXWZRXOGQRWLQFOXGHWKHDOWHUDWLRQRI
H[LVWLQJGZHOOLQJRUVOHHSLQJXQLWVRUDFKDQJH
™ 7KH DGGLWLRQDO FULWHULRQ IRU PHDQVRIHJUHVV RIRFFXSDQF\ZKHUHGZHOOLQJDQGVOHHSLQJXQLWV
OLJKWLQJUHTXLUHVWKDWLQLQWHULRUH[LWVWDLUZD\V ZHUHFUHDWHGLQDQH[LVWLQJEXLOGLQJ

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

6(&7,216758&785$/ ZKHUHWKHGHPDQGFDSDFLW\UDWLRRIDQH[LVWLQJ
ODWHUDOORDGUHVLVWLQJHOHPHQWZLWKDSURSRVHG
 *HQHUDO:KHUHEXLOGLQJVDUHXQGHUJRLQJ DOWHUDWLRQFRQVLGHUHGH[FHHGVSHUFHQWRILWV
/HYHODOWHUDWLRQVLQFOXGLQJVWUXFWXUDODOWHUDWLRQV GHPDQGFDSDFLW\ UDWLR ZLWK WKH DOWHUDWLRQ
WKHSURYLVLRQVRIWKLVVHFWLRQVKDOODSSO\ LJQRUHG :KHUH WKLV RFFXUV LW LV QHFHVVDU\ WR
KDYHDQHQJLQHHULQJHYDOXDWLRQRIWKHEXLOGLQJ
™ 7KHVH VWUXFWXUDO UHTXLUHPHQWV DSSO\ WR
7KHORDGLQJFULWHULDWREHXVHGLQWKHHYDOXDWLRQ
DOWHUDWLRQV ZKHUH WKH ZRUN DUHD H[FHHGV 
LV GHSHQGHQW RQ WKH H[WHQW RI WKH DOWHUDWLRQ
SHUFHQW RI WKH DJJUHJDWH DUHD RI WKH EXLOGLQJ
ZRUN WKDW LV XQGHUWDNHQ 7KH FRGH DVVXPHV
1RWHWKDWWKHVWUXFWXUDOUHTXLUHPHQWVIRU/HYHO
WKDW WKH VWUXFWXUDO PHPEHUV ZHUH SURSHUO\
 DQG  DOWHUDWLRQV LQ 6HFWLRQV  DQG 
GHVLJQHGIRUWKHDSSOLFDEOHORDGVDWWKHWLPHRI
UHVSHFWLYHO\ DUH DOVR DSSOLFDEOH WR /HYHO 
FRQVWUXFWLRQ7KHVHLVPLFEDVHVKHDUGHSHQGV
DOWHUDWLRQVDFFRUGLQJWR6HFWLRQ
RQ VHYHUDO YDULDEOHV VXFK DV WKH PDSSHG
 1HZVWUXFWXUDOHOHPHQWV1HZVWUXFWXUDO VSHFWUDO DFFHOHUDWLRQV DW WKH VLWH WKH VLWH VRLO
HOHPHQWVVKDOOFRPSO\ZLWK6HFWLRQ FRHIILFLHQWVWKHLPSRUWDQFHIDFWRUEDVHGRQWKH
QDWXUH RI WKH RFFXSDQF\ DV ZHOO DV WKH
™ $Q\QHZVWUXFWXUDOHOHPHQWWKDWLVDGGHGLQWKH VWUXFWXUH¶V HIIHFWLYH VHLVPLF ZHLJKW DQG
FRXUVH RI DOWHUDWLRQ ZRUN LQFOXGLQJ LWV UHVSRQVH PRGLILFDWLRQ IDFWRU )RU ZRUN WKDW LV
FRQQHFWLRQVWRWKHH[LVWLQJVWUXFWXUHLVUHTXLUHG FRQVLGHUHG DQ DOWHUDWLRQ LW LV SULPDULO\ WKH
WR FRPSO\ ZLWK 6HFWLRQ  6HFWLRQ  VWUXFWXUH¶V HIIHFWLYH VHLVPLF ZHLJKW WKDW LV RI
UHTXLUHVQHZVWUXFWXUDOHOHPHQWVWRFRPSO\ZLWK LQWHUHVW DV WKH RWKHU YDULDEOHV ZRXOG OLNHO\
WKH 6%&  7KHUH LV QR H[FHSWLRQ WR WKLV UHPDLQIL[HG7KHHIIHFWLYHVHLVPLFZHLJKW:
UHTXLUHPHQW XVHG WR GHWHUPLQH WKH EDVH VKHDU FRQVLVWV RI
 ([LVWLQJ VWUXFWXUDO HOHPHQWV FDUU\LQJ WKHWRWDOZHLJKWRIWKHVWUXFWXUHDOOHTXLSPHQW
DQGRWKHUSHUPDQHQWO\DWWDFKHGLWHPVDVZHOO
JUDYLW\ORDGV
DV D SHUFHQWDJH RI WKH GHVLJQ OLYH ORDG IRU
([LVWLQJVWUXFWXUDOHOHPHQWVFDUU\LQJJUDYLW\ORDGV VWRUDJHXVHV,WUHIOHFWVWKHZHLJKWRIDOOGHDG
VKDOOFRPSO\ZLWK6HFWLRQ ORDGV DQG FRQWHQWV WKDW PLJKW UHDVRQDEO\ EH
H[SHFWHGWREHDWWDFKHGWRWKHVWUXFWXUHDWWKH
™ ([LVWLQJ JUDYLW\ ORDGFDUU\LQJ HOHPHQWV DUH WLPH WKH GHVLJQ HDUWKTXDNH RFFXUV :KLOH
UHTXLUHGWRFRPSO\ZLWK6HFWLRQ6HFWLRQ HTXLSPHQW ZHLJKW DQG VRPH JUDYLW\ ORDGV DUH
 UHTXLUHV WKH HYDOXDWLRQ RI WKHVH FDOFXODEOHWRDSHUFHQWPDUJLQVHLVPLFORDGV
DGGLWLRQDO ORDGV LQFOXGLQJ WKH HIIHFWV RI VQRZ DQG UHVSRQVH FKDUDFWHULVWLFV RI H[LVWLQJ
GULIW WR GHWHUPLQH LI WKHVH ORDGV GHFUHDVH WKH PDWHULDOV DUH QRW UHDOLVWLFDOO\ FDOFXODEOH ZLWK
FDSDFLW\RIH[LVWLQJVWUXFWXUDOHOHPHQWV6HHWKH WKDW SUHFLVLRQ DQG DV VXFK WKH WULJJHU IRU
FRPPHQWDU\ WR 6HFWLRQ  IRU IXUWKHU SRVVLEOH VHLVPLF XSJUDGHV RI 6HFWLRQV 
GLVFXVVLRQRIWKHVSHFLILFUHTXLUHPHQWV DQG  LV VHW DW D UDWLRQDO SHUFHQW
 ([LVWLQJ VWUXFWXUDO HOHPHQWV UHVLVWLQJ LQFUHDVHLQVHLVPLFEDVHVKHDURUGHFUHDVHLQ
VHLVPLF EDVH VKHDU FDSDFLW\ $V LW LV SRVVLEOH
ODWHUDOORDGV$OOH[LVWLQJHOHPHQWVRIWKHODWHUDO
WKDW YDULRXV DOWHUDWLRQV RYHU WKH \HDUV PLJKW
IRUFHUHVLVWLQJ V\VWHP VKDOO FRPSO\ ZLWK WKLV LQFUHDVH WKH VHLVPLF EDVH VKHDU RU GHFUHDVH
VHFWLRQ WKHVHLVPLFEDVHVKHDUFDSDFLW\LQDFXPXODWLYH
([FHSWLRQV PDQQHUEH\RQGWKHSHUFHQWWULJJHUOHYHOWKH
FRGH PDNHV LW H[SOLFLWO\ FOHDU WKDW WKH 
 %XLOGLQJV RI *URXS 5 RFFXSDQF\ ZLWK QR SHUFHQW WKUHVKROG LV FDOFXODWHG UHODWLYH WR WKH
PRUHWKDQILYHGZHOOLQJRUVOHHSLQJXQLWVXVHG RULJLQDOEXLOGLQJFRQVWUXFWLRQDQGQRWWKHODWHVW
VROHO\IRUUHVLGHQWLDOSXUSRVHVWKDWDUHDOWHUHG DOWHUDWLRQ([FHSWLRQVDQGDUHUHODWHGWRWKH
EDVHG RQ WKH FRQYHQWLRQDO OLJKWIUDPH HYDOXDWLRQ UHTXLUHPHQW RQH RI ZKLFK SHUPLWV
FRQVWUXFWLRQ PHWKRGV RI WKH 6%&  RU LQ VPDOOHU *URXS 5 EXLOGLQJV WKDW DUH DOWHUHG WR
FRPSOLDQFH ZLWK WKH SURYLVLRQV RI WKH 6%& FRPSO\ ZLWK HLWKHU WKH 6%&  RU WKH
FRQYHQWLRQDO OLJKWIUDPH FRQVWUXFWLRQ

SURYLVLRQVRIWKH6%&([FHSWLRQSHUWDLQV
 :KHUH VXFK DOWHUDWLRQV LQYROYH RQO\ WKH WR PXOWLSOHVWRU\ EXLOGLQJV ZKHUH DOWHUDWLRQV
ORZHVWVWRU\RIDEXLOGLQJDQGWKHFKDQJHRI DUHPDGHWRRQO\WKHORZHVWVWRU\7KLVSHUPLWV
RFFXSDQF\ SURYLVLRQV RI &KDSWHU  GR QRW FRPSOLDQFH ZLWK WKH 6%& ¶V ZLQG DQG
DSSO\ RQO\ WKH ODWHUDO IRUFHUHVLVWLQJ VHLVPLFFULWHULDWREHOLPLWHGWRWKHODWHUDOIRUFH
FRPSRQHQWV LQ DQG EHORZ WKDW VWRU\ QHHG UHVLVWLQJ HOHPHQWV LQ WKDW VWRU\ DQG EHORZ
FRPSO\ZLWKWKLVVHFWLRQ :KLOH WKH LPSDFW RI ZLQG DQG VHLVPLF ORDGLQJ
FRQWULEXWHG E\ WKH VWRULHV DERYH PXVW EH
™ 7KLV VHFWLRQ DSSOLHV WR DOO /HYHO  DOWHUDWLRQV FRQVLGHUHG QR HYDOXDWLRQ RI WKRVH VWRULHV LV
7KLVVHFWLRQDOVRDSSOLHVWR/HYHODOWHUDWLRQV

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

UHTXLUHG7KHFRGHDVVXPHVWKHXSSHUVWRULHV 6HFWLRQ  GR QRW FRQWULEXWH WR WKH EXLOGLQJ

KDYHEHHQGHVLJQHGIRUZLQGDQGHDUWKTXDNHV DUHD EXW ZLOO FRQWULEXWH WR WKH SHUFHQW
DFFRUGLQJ WR WKH FRGH LQ HIIHFW DW WKH WLPH RI FULWHULD
FRQVWUXFWLRQ
6HLVPLF 'HVLJQ &DWHJRU\ )  :KHUH WKH
(YDOXDWLRQDQGDQDO\VLV$QHQJLQHHULQJ EXLOGLQJLVDVVLJQHGWR6HLVPLF'HVLJQ&DWHJRU\)
HYDOXDWLRQ DQG DQDO\VLV WKDW HVWDEOLVKHV WKH WKH HYDOXDWLRQ DQG DQDO\VLV VKDOO GHPRQVWUDWH WKDW
VWUXFWXUDODGHTXDF\RIWKHDOWHUHGVWUXFWXUHVKDOOEH WKH ODWHUDO ORDGUHVLVWLQJ V\VWHP RI WKH DOWHUHG
SUHSDUHG E\ D UHJLVWHUHG GHVLJQ SURIHVVLRQDO DQG EXLOGLQJ RU VWUXFWXUH FRPSOLHV ZLWK UHGXFHG 6%&
VXEPLWWHGWRWKHEXLOGLQJRIILFLDO OHYHOVHLVPLFIRUFHVLQDFFRUGDQFHZLWK6HFWLRQ
™ $EXLOGLQJXQGHUJRLQJDOWHUDWLRQVWKDWUHVXOWLQ DQGZLWKWKHZLQGSURYLVLRQV DSSOLFDEOH
DVHLVPLFEDVHVKHDULQFUHDVHJUHDWHUWKDQ WRDOLPLWHGVWUXFWXUDODOWHUDWLRQ
SHUFHQW DQG H[FHHG WKH DUHD WKUHVKROG ™ 7KLV VHFWLRQ LV IRFXVHG VSHFLILFDOO\ RQ WKRVH
HVWDEOLVKHG LQ WKLV VHFWLRQ UHTXLUHV DQ EXLOGLQJVDVVLJQHGWR6HLVPLF'HVLJQ&DWHJRU\
HQJLQHHULQJ HYDOXDWLRQ RI WKH VWUXFWXUH DV ) 6HLVPLF 'HVLJQ &DWHJRU\ ) LV WKH PRVW
GHVFULEHGLQWKLVVHFWLRQ7KHHYDOXDWLRQPXVW VHYHUH%XLOGLQJVLQVXFKDUHDVDUHDWKLJKULVN
GHPRQVWUDWHWKDWWKHDOWHUHGVWUXFWXUHFRPSOLHV IRU GDPDJH IURP D VHLVPLF HYHQW 7KHUHIRUH
ZLWKWKH6%&ZLQGORDGLQJFULWHULDDQGZLWK ZKHQDEXLOGLQJLVXQGHUJRLQJRYHUSHUFHQW
UHGXFHG 6%&  VHLVPLF IRUFHV LQ 6HFWLRQ DOWHUDWLRQ /HYHO  LW ZDV IHOW UHDVRQDEOH WR
 7KH ODWWHU SHUPLWV WKH XVH RI WKH DOVRHYDOXDWHWKHODWHUDOIRUFHUHVLVWLQJV\VWHP
*XLGHOLQHV IRU 6HLVPLF 5HWURILW RI ([LVWLQJ UHJDUGOHVV RI KRZ H[WHQVLYH WKH VWUXFWXUDO
%XLOGLQJV*65(%LQ$SSHQGL[$RIWKHFRGH DOWHUDWLRQV7KLVVHFWLRQUHTXLUHVVXFKEXLOGLQJV
DQG $6&(  VHH &RPPHQWDU\ 6HFWLRQ WREHHYDOXDWHGDQGDQDO\]HGWRGHWHUPLQHWKDW
 WKH EXLOGLQJ¶V ODWHUDO ORDGUHVLVWLQJ V\VWHP
6XEVWDQWLDOVWUXFWXUDODOWHUDWLRQ:KHUH PHHWV WKH UHGXFHG 6%& OHYHO VHLVPLF
PRUH WKDQ  SHUFHQW RI WKH WRWDO IORRU DQG URRI IRUFHV6LQFHWKHKD]DUGLVVHLVPLFWKHEXLOGLQJ
RQO\ QHHGV WR PHHW WKH OLPLWHG VWUXFWXUDO
DUHDVRIWKHEXLOGLQJRUVWUXFWXUHKDYHEHHQRUDUH
DOWHUDWLRQUHTXLUHPHQWVIRUZLQG1RWHWKDWWKLV
SURSRVHG WR EH LQYROYHG LQ VWUXFWXUDO DOWHUDWLRQ VHFWLRQLVFRQVLVWHQWZLWK6HFWLRQLQWKH
ZLWKLQD\HDUSHULRGWKHHYDOXDWLRQDQGDQDO\VLV SUHVFULSWLYHPHWKRG
VKDOO GHPRQVWUDWH WKDW WKH ODWHUDO ORDGUHVLVWLQJ
V\VWHPRIWKHDOWHUHGEXLOGLQJRUVWUXFWXUHFRPSOLHV /LPLWHGVWUXFWXUDODOWHUDWLRQ:KHUHWKH
ZLWK WKH 6%&  IRU ZLQG ORDGLQJ DQG ZLWK ZRUN GRHV QRW LQYROYH D VXEVWDQWLDO VWUXFWXUDO
UHGXFHG 6%& OHYHO VHLVPLF IRUFHV LQ DOWHUDWLRQ DQG WKH EXLOGLQJ LV QRW DVVLJQHG WR
DFFRUGDQFHZLWK6HFWLRQ7KHDUHDVWREH 6HLVPLF'HVLJQ&DWHJRU\)WKHH[LVWLQJHOHPHQWV
FRXQWHGWRZDUGWKHSHUFHQWVKDOOEHWKRVHDUHDV RI WKH ODWHUDO ORDGUHVLVWLQJ V\VWHP VKDOO FRPSO\
WULEXWDU\WRWKHYHUWLFDOORDGFDUU\LQJFRPSRQHQWV ZLWK6HFWLRQ
VXFK DV MRLVWV EHDPV FROXPQV ZDOOV DQG RWKHU ™ $EXLOGLQJXQGHUJRLQJDOWHUDWLRQVQRWH[FHHGLQJ
VWUXFWXUDO FRPSRQHQWV WKDW KDYH EHHQ RU ZLOO EH WKHWKUHVKROGHVWDEOLVKHGLQ6HFWLRQLV
UHPRYHGDGGHGRUDOWHUHGDVZHOODVDUHDVVXFKDV UHTXLUHGWRFRPSO\ZLWK6HFWLRQ6HHWKH
PH]]DQLQHV SHQWKRXVHV URRI VWUXFWXUHV DQG LQ FRPPHQWDU\ WR 6HFWLRQ  IRU DGGLWLRQDO
ILOOHGFRXUWVDQGVKDIWV LQIRUPDWLRQ 7KLV GRHV QRW DSSO\ WR EXLOGLQJV
ORFDWHG LQ 6HLVPLF 'HVLJQ &DWHJRU\ ) 7KRVH
™ 7KH DUHD WKUHVKROG RI  SHUFHQW RI WKH IORRU EXLOGLQJVPXVWPHHWWKHUHGXFHGVHLVPLFORDGV
DQGURRIDUHDVZRXOGOLNHO\LQFOXGHDOO/HYHO DQG6%&ZLQGORDGVUHJDUGOHVVRIWKHOHYHO
DOWHUDWLRQV VLQFH 6HFWLRQ  HVWDEOLVKHV RIVWUXFWXUDODOWHUDWLRQ6HHWKHFRPPHQWDU\WR
WKDW WKHVH DUH LQ H[FHVV RI  SHUFHQW RI WKH 6HFWLRQ
DJJUHJDWH DUHD RI WKH EXLOGLQJ +RZHYHU WKH
SHUFHQW WKUHVKROG LV IRFXVHG RQ VWUXFWXUDO :DOODQFKRUVIRUFRQFUHWHDQGPDVRQU\
DOWHUDWLRQV YHUVXV DOWHUDWLRQV LQ JHQHUDO 7KH EXLOGLQJV  )RU DQ\ EXLOGLQJ DVVLJQHG WR 6HLVPLF
DGGLWLRQDO VWLSXODWLRQ WKDW DOO VWUXFWXUDO 'HVLJQ&DWHJRU\'(RU)ZLWKDVWUXFWXUDOV\VWHP
DOWHUDWLRQVRFFXUULQJRYHUD\HDUSHULRGPXVW FRQVLVWLQJRIFRQFUHWHRUUHLQIRUFHGPDVRQU\ZDOOV
EHFRQVLGHUHGSUHYHQWVDEXLOGLQJRZQHUIURP ZLWK D IOH[LEOH URRI GLDSKUDJP DQG DQ\ EXLOGLQJ
EUHDNLQJDODUJHDOWHUDWLRQSURMHFWLQWRDVHULHV DVVLJQHGWR6HLVPLF'HVLJQ&DWHJRU\&'(RU)
RIVPDOOHUDOWHUDWLRQVLQKRSHVRIFRPSO\LQJZLWK ZLWKDVWUXFWXUDOV\VWHPFRQVLVWLQJRIXQUHLQIRUFHG
OHVVVWULQJHQWUHTXLUHPHQWV7KHFODULILFDWLRQRI
PDVRQU\ZDOOVZLWKDQ\W\SHRIURRIGLDSKUDJPWKH
H[DFWO\ ZKLFK DUHDV FRQWULEXWH WR PHHWLQJ WKH
DUHD WKUHVKROG RI  SHUFHQW LV LPSRUWDQW )RU DOWHUDWLRQ ZRUN VKDOO LQFOXGH LQVWDOODWLRQ RI ZDOO
LQVWDQFHPH]]DQLQHVFRPSO\LQJZLWK6%& DQFKRUVDWWKHURRIOLQHWRUHVLVWWKHUHGXFHG 6%&

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

OHYHOVHLVPLFIRUFHVLQDFFRUGDQFHZLWK6HFWLRQ 6(&7,21(1(5*<
 XQOHVV DQ HYDOXDWLRQ GHPRQVWUDWHV &216(59$7,21
FRPSOLDQFHRIH[LVWLQJZDOODQFKRUDJH
 0LQLPXP UHTXLUHPHQWV  /HYHO 
x 7KLV VHFWLRQ GHDOV ZLWK ERWK UHLQIRUFHG DOWHUDWLRQV WR H[LVWLQJ EXLOGLQJV RU VWUXFWXUHV DUH
FRQFUHWHRUPDVRQU\ZDOOVDQGXQUHLQIRUFHG
SHUPLWWHGZLWKRXW UHTXLULQJWKH HQWLUHEXLOGLQJ RU
PDVRQU\ ZDOOV 7KH WZR FRQGLWLRQV ZKHUH
ZDOO DQFKRUV PD\ EH QHFHVVDU\ IRU ZDOO VWUXFWXUHWRFRPSO\ZLWKWKHHQHUJ\UHTXLUHPHQWVRI
DQFKRUDJH V\VWHPV LI WKH H[LVWLQJ V\VWHP 6%&  RU 6%&  7KH DOWHUDWLRQV VKDOO
GRHV QRW PHHW WKH UHGXFHG VHLVPLF OHYHO FRQIRUPWRWKHHQHUJ\UHTXLUHPHQWVRI6%&RU
IRUFHVDUH 6%&DVWKH\UHODWHWRQHZFRQVWUXFWLRQRQO\
x %XLOGLQJVLQ6HLVPLF'HVLJQ&DWHJRU\'(RU ™ $EXLOGLQJWKDWXQGHUJRHV/HYHODOWHUDWLRQVLV
) KDYLQJ D VWUXFWXUDO V\VWHP FRQVLVWLQJ RI UHTXLUHG WR PHHW D FHUWDLQ OHYHO RI HQHUJ\
UHLQIRUFHGFRQFUHWH RUPDVRQU\ZDOOVDQG D FRPSOLDQFH 7KH OHYHO RI FRPSOLDQFH GHSHQGV
IOH[LEOHURRIGLDSKUDJP RQWKHH[WHQWRIWKHDOWHUDWLRQVWDNLQJSODFH$V
x %XLOGLQJVLQ6HLVPLF'HVLJQ&DWHJRU\&' /HYHODOWHUDWLRQVDUHWKRVHDOWHUDWLRQVZKHUH
(RU)KDYLQJDVWUXFWXUDOV\VWHPFRQVLVWLQJ UHFRQILJXUDWLRQ RI VSDFH WDNHV SODFH LQ PRUH
RIXQUHLQIRUFHGPDVRQU\ WKDQSHUFHQWRIWKHEXLOGLQJDJJUHJDWHDUHD
WKHQDQ\QHZHOHPHQWZLWKLQWKHZRUNDUHDDV
™ 7KH ZDOO DQFKRUDJH V\VWHP LQFOXGHV WKH GHILQHG LQ &KDSWHU  LV UHTXLUHG WR PHHW WKH
HOHPHQWVLQWKHGLDSKUDJPUHTXLUHGWRGHYHORS DSSOLFDEOHHQHUJ\SURYLVLRQVRI6%&RUWKH
ZDOODQFKRUDJHIRUFHVLQFOXGLQJZDOODQFKRUV 6%&LQWKHFDVHRIEXLOGLQJVWKDWIDOOXQGHU
VWUXWV VXEGLDSKUDJPV FURVV WLHV DQG LWVVFRSLQJ(OHPHQWVLQWKHEXLOGLQJWKDWDUHQRW
FRQWLQXLW\ WLHV 1RWH WKDW LI D VWUXFWXUDO EHLQJDIIHFWHGQHHGQRWEHHYDOXDWHGDQGQHHG
HYDOXDWLRQ LQGLFDWHV WKDW WKH H[LVWLQJ ZDOO QRW FRPSO\ ZLWK WKH HQHUJ\ SURYLVLRQV 7KH
DQFKRUDJH SURYLGHG FDQ DOUHDG\ UHVLVW DQG HQWLUH EXLOGLQJ LV QRW UHTXLUHG WR PHHW WKH
WUDQVIHUWKHVHIRUFHVDGGLWLRQDOZDOODQFKRUDJH HQHUJ\ SURYLVLRQV EXW LPSURYHPHQW LQ WKH
LVQRWUHTXLUHG7KLVVHFWLRQLVFRQVLVWHQWZLWK HQHUJ\SHUIRUPDQFHRIWKHEXLOGLQJLVLQWHQGHG
6HFWLRQRIWKHSUHVFULSWLYHPHWKRG WR EH DFKLHYHG E\ PDNLQJ WKH QHZ HOHPHQWV
PHHWWKH6%&RU6%&UHTXLUHPHQWV
%UDFLQJ IRU XQUHLQIRUFHG PDVRQU\
,Q WKRVH FDVHV ZKHUH WKH UHFRQILJXUDWLRQ RI
SDUDSHWV  3DUDSHWV FRQVWUXFWHG RI XQUHLQIRUFHG VSDFH PLJKW KDYH UHVXOWHG LQ WKH FUHDWLRQ RI
PDVRQU\ LQ EXLOGLQJV DVVLJQHG WR 6HLVPLF 'HVLJQ QHZVSDFHVWKHQHZO\FUHDWHGVSDFHVVKRXOG
&DWHJRU\&'(RU)VKDOOKDYHEUDFLQJLQVWDOOHG EHHYDOXDWHGDVDZKROHIRUFRPSOLDQFHZLWKWKH
DV QHHGHG WR UHVLVW WKH UHGXFHG 6%& OHYHO HQHUJ\ SURYLVLRQV HYHQ WKRXJK VRPH RI WKH
VHLVPLF IRUFHV LQ DFFRUGDQFH ZLWK 6HFWLRQ HOHPHQWV LQ WKH VSDFH PLJKW QRW KDYH EHHQ
 XQOHVV DQ HYDOXDWLRQ GHPRQVWUDWHV DOWHUHG /LNHZLVHLQDFDVHZKHUH DQ H[LVWLQJ
FRPSOLDQFHRIVXFKLWHPV PHFKDQLFDOV\VWHPLVEHLQJH[WHQGHGWRRWKHU
DUHDV RU QHZ GXFW ZRUN LV EHLQJ LQVWDOOHG WR
™ 7KH SURYLVLRQV IRXQG LQ WKLV VHFWLRQ DUH UHFRQILJXUH DQG UHURXWH WKH GXFWV WR YDULRXV
HVVHQWLDOO\WKHVDPHDVWKRVHIRXQGLQ6HFWLRQ VSDFHV LW LV RQO\ UHTXLUHG WR KDYH WKH QHZ
 7KH UHDVRQ IRU WKH GXSOLFDWLRQ LV HOHPHQWV PHHW WKH HQHUJ\ SURYLVLRQV DQG QRW
UHODWHG WR WKH DSSOLFDWLRQ RI WKH SURYLVLRQV WKH HQWLUH V\VWHP 1HZO\ LQVWDOOHG V\VWHPV
6HFWLRQ  RQO\ DSSOLHV LI UHURRILQJ LV PXVW PHHW WKH HQHUJ\ SURYLVLRQV RI WKH 6%&
RFFXUULQJ DQG LV RQO\ DSSOLFDEOH WR 6HLVPLF  RU WKH 6%&  IRU EXLOGLQJV XQGHU WKH
'HVLJQ&DWHJRULHV'(DQG)7KLVVHFWLRQDOVR VFRSLQJRIWKH6%&7KHODQJXDJHLQWKLV
DSSOLHV WR 6HLVPLF 'HVLJQ &DWHJRU\ & 7KHVH VHFWLRQ LV LQWHQGHG WR EH FRQVLVWHQW ZLWK WKH
SURYLVLRQV DSSO\ DQ\ WLPH D /HYHO  DOWHUDWLRQ UHTXLUHPHQWVLQWKH6%&DQG6%&IRU
RFFXUV,WLVIHOWWKDWWKLVEUDFLQJLVDFULWLFDOOLIH DOWHUDWLRQV 
VDIHW\ PHDVXUH WKDW VKRXOG EH WDNHQ GXULQJ
ODUJHUDOWHUDWLRQV7KLVVHFWLRQLVFRQVLVWHQWZLWK
6HFWLRQRIWKHSUHVFULSWLYHPHWKRG

6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

7$%/(6$1'),*85(62)&+$37(5



),*85(
+,*+5,6(%8,/',1*6


6%&&& 

&+$37(5²$/7(5$7,216²/(9(/


),*85(
58%%,6+$1'/,1(1&+87(6




6%&&& 

&+$37(5²$/7(5$7,216²/(9(/

























7KLVSDJHOHIWLQWHQWLRQDOO\EODQN

6%&&& 

 &+$37(5²&+$1*(2)2&&83$1&<

²&+$1*(2)2&&83$1&<

™ 3XUSRVH
™ *HQHUDO&RPPHQWV
™ 7KH SXUSRVH RI WKLV FKDSWHU LV WR SURYLGH
™ 7KLV FKDSWHU GHDOV ZLWK WKH VSHFLDO VLWXDWLRQV
UHJXODWLRQV IRU WKH FLUFXPVWDQFHV ZKHQ DQ
LQYROYHGLQDQH[LVWLQJEXLOGLQJZKHQDFKDQJH
H[LVWLQJ EXLOGLQJ LV VXEMHFW WR D FKDQJH RI
RIRFFXSDQF\RFFXUV$FKDQJHRIRFFXSDQF\LV
RFFXSDQF\ RU D FKDQJH RI RFFXSDQF\
QRWWREHFRQIXVHGZLWKDFKDQJHRIRFFXSDQF\
FODVVLILFDWLRQ $V SUHYLRXVO\ GLVFXVVHG D
FODVVLILFDWLRQ 7KH 6%&  GHILQHV GLIIHUHQW
FKDQJHRIRFFXSDQF\LVGHILQHGLQ&KDSWHURI
RFFXSDQF\ FODVVLILFDWLRQV LQ &KDSWHU  DQG
WKHFRGH
VSHFLDORFFXSDQF\UHTXLUHPHQWV LQ&KDSWHU
™ &+$1*(2)2&&83$1&< $FKDQJHLQWKH
:LWKLQVSHFLILFRFFXSDQF\FODVVLILFDWLRQVWKHUH
XVHRIWKHEXLOGLQJRUDSRUWLRQRIDEXLOGLQJ$
FDQEHPDQ\GLIIHUHQWW\SHVRIDFWXDODFWLYLWLHV
FKDQJHRIRFFXSDQF\VKDOOLQFOXGHDQ\FKDQJH
WKDWFDQWDNHSODFH)RULQVWDQFHD*URXS$
RI RFFXSDQF\ FODVVLILFDWLRQ DQ\ FKDQJH IURP
RFFXSDQF\ FODVVLILFDWLRQ GHDOV ZLWK D ZLGH
RQH JURXS WR DQRWKHU JURXS ZLWKLQ DQ
YDULHW\RIDFWLYLWLHVLQFOXGLQJERZOLQJDOOH\VDQG
RFFXSDQF\FODVVLILFDWLRQRUDQ\FKDQJHLQXVH
FRXUWURRPV LQGRRU WHQQLV FRXUWV DQG ZHGGLQJ
ZLWKLQ D JURXS IRU D VSHFLILF RFFXSDQF\
KDOOV :KHQ D IDFLOLW\ FKDQJHV XVH IURP D
FODVVLILFDWLRQ
ERZOLQJDOOH\WRDZHGGLQJKDOOWKHRFFXSDQF\
™ ,QHLWKHUFDVHVRPHVFHQDULRVH[LVWWKDWDUHQRW
FODVVLILFDWLRQ UHPDLQV $ EXW WKH GLIIHUHQW
GHDOWZLWKLQ&KDSWHUVDQG EXWPXVWEH
XVHV FRXOG OHDG WR GUDVWLFDOO\ GLIIHUHQW FRGH
DGGUHVVHG QHYHUWKHOHVV &KDQJHV LQ
UHTXLUHPHQWV 7KHUHIRUH WKLV FKDSWHU GHDOV
RFFXSDQF\RURFFXSDQF\FODVVLILFDWLRQFKDQJH
ZLWK WKH VSHFLDO FLUFXPVWDQFHV WKDW DUH
WKHDFWLYLWLHVRUDFWLYLW\OHYHOVZLWKLQDEXLOGLQJ
DVVRFLDWHG ZLWK D FKDQJH LQ WKH XVH RI D
ZKLFK FDQ KDYH LPSOLFDWLRQV RQ WKH OLIH VDIHW\
EXLOGLQJ ZLWKLQ WKH VDPH RFFXSDQF\
KD]DUGVDVVRFLDWHGZLWKWKLVFKDQJHLQDFWLYLW\
FODVVLILFDWLRQDVZHOODVDFKDQJHRIRFFXSDQF\
$FKDQJHIURPDGDQFHKDOOWRDQLJKWFOXELVD
FODVVLILFDWLRQ$VDJHQHUDOUXOHZKHQDFKDQJH
FKDQJH LQ RFFXSDQF\ FODVVLILFDWLRQ WKDW KDV
RI RFFXSDQF\ FODVVLILFDWLRQ RFFXUV WKH
FOHDULPSOLFDWLRQVZLWKUHJDUGWRULVNVWROLIH$
UHTXLUHPHQWV RI &KDSWHU  IRU /HYHO 
FKDQJHIURPDUHVWDXUDQWWRDQLJKWFOXELVQRWD
DOWHUDWLRQVDSSO\DORQJZLWKDOORIWKHSURYLVLRQV
FKDQJH LQ RFFXSDQF\ FODVVLILFDWLRQ EXW LV
RI6HFWLRQ+RZHYHUWKHUHDUHH[FHSWLRQV
QHYHUWKHOHVV D VLJQLILFDQW FKDQJH LQ XVH DQG
WR WKLV UXOH DV ZHOO DV SURYLGHG LQ 6HFWLRQ
DFWLYLW\OHYHOVZLWKGLIIHUHQWUHODWHGOLIHVDIHW\
ZKLFKGHDOZLWKDFKDQJHRIRFFXSDQF\
ZKHUHWKHFKDQJHLVFOHDUO\WRDOHVVHUKD]DUG 
VKDOO QRW EH PDGH WR DQ\ VWUXFWXUH ZLWKRXW WKH
DSSURYDO RI WKH EXLOGLQJ RIILFLDO $ FHUWLILFDWH RI
6(&7,21*(1(5$/ RFFXSDQF\ VKDOO EH LVVXHG ZKHUH LW KDV EHHQ
 6FRSH7KHSURYLVLRQVRIWKLVFKDSWHUVKDOO GHWHUPLQHGWKDWWKHUHTXLUHPHQWVIRUWKHFKDQJHRI
DSSO\ ZKHUH D FKDQJH RI RFFXSDQF\ RFFXUV DV RFFXSDQF\KDYHEHHQPHW
GHILQHGLQ6HFWLRQ ™ $ FKDQJH RI RFFXSDQF\ ZLWKRXW D FKDQJH LQ
™ %\ GHILQLWLRQ D ³&KDQJH RI RFFXSDQF\´ LV WKH RFFXSDQF\FODVVLILFDWLRQLVDFKDQJHLQWKHOHYHO
UHVXOW RI D FKDQJH RI XVH RI WKH EXLOGLQJ WKDW DQGRUW\SHRIXVHLQDEXLOGLQJWKDWFRXOGKDYH
LQYROYHV D FKDQJH LQ DSSOLFDWLRQ RI WKH OLIH VDIHW\ LPSOLFDWLRQV )RU LQVWDQFH LPDJLQH
UHTXLUHPHQWVRIWKHFRGH&KDSWHUZRXOGEH WKDWDFRPPXQLW\FHQWHULVVROGDQGFRQYHUWHG
DSSOLFDEOHLQWKHFDVHRIDVWUXFWXUHZKHUHWKH WRDGDQFHKDOO%RWKRIWKHVHDUHFRQVLGHUHGE\
XVH KDV FKDQJHG EXW WKH RFFXSDQF\ WKH 6%&  DV EHLQJ DQ 2FFXSDQF\
FODVVLILFDWLRQKDVQRW7KHVFRSHRIWKLVFKDSWHU &ODVVLILFDWLRQ$EXWWKHUHTXLUHPHQWVRIWKH
DOVR LQFOXGHV D FKDQJH RI RFFXSDQF\ FRGH WR HDFK IDFLOLW\ FRXOG EH FRQVLGHUDEO\
FODVVLILFDWLRQ LQ DGGLWLRQ WR D FKDQJH LQ WKH GLIIHUHQW 7KH GDQFH KDOO PLJKW KDYH D KLJKHU
RFFXSDQF\JURXSGHVLJQDWLRQ RFFXSDQW ORDGDQGWKHUHIRUHUHTXLUHGLIIHUHQW
HJUHVVIDFLOLWLHV7KLVVHFWLRQVSHFLILFDOO\VWDWHV
 &HUWLILFDWH RI RFFXSDQF\  $ FKDQJH RI WKDWLIWKHFKDQJHLQRFFXSDQF\ZRXOGUHVXOWLQ
RFFXSDQF\RUDFKDQJHRIRFFXSDQF\ZLWKLQDVSDFH DGLIIHUHQWILUHSURWHFWLRQWKUHVKROGLQ6%&
ZKHUH WKHUH LV D GLIIHUHQW ILUH SURWHFWLRQ V\VWHP &KDSWHU  WKHQ LW PXVW EH DGGUHVVHG )RU
WKUHVKROG UHTXLUHPHQW LQ &KDSWHU  RI 6%&  LQVWDQFH LI WKH RFFXSDQW ORDG LQ WKH DERYH

6%&&& 

&+$37(5²&+$1*(2)2&&83$1&<

H[DPSOH LQFUHDVHV IURP  WR  WKHQ DQ RSWLRQV RI VHSDUDWHG DQG QRQVHSDUDWHG
DXWRPDWLFVSULQNOHUV\VWHPZRXOGEHUHTXLUHGLQ FRQGLWLRQV
DFFRUGDQFHZLWK6%&6HFWLRQ
 &HUWLILFDWH RI RFFXSDQF\ UHTXLUHG  $
 &KDQJH RI XVH  $Q\ ZRUN FHUWLILFDWH RI RFFXSDQF\ VKDOO EH LVVXHG ZKHUH D
XQGHUWDNHQLQFRQQHFWLRQZLWKDFKDQJHLQXVHWKDW FKDQJH RI RFFXSDQF\ RFFXUV WKDW UHVXOWV LQ D
GRHV QRW LQYROYH D FKDQJH RI RFFXSDQF\ GLIIHUHQWRFFXSDQF\FODVVLILFDWLRQDVGHWHUPLQHGE\
FODVVLILFDWLRQRUDFKDQJHWRDQRWKHUJURXSZLWKLQ WKH6%&
DQ RFFXSDQF\ FODVVLILFDWLRQ VKDOO FRQIRUP WR WKH
™ $ FKDQJH RI RFFXSDQF\ KDV KLVWRULFDOO\ EHHQ
DSSOLFDEOH UHTXLUHPHQWV IRU WKH ZRUNDVFODVVLILHG WUHDWHGDVVHYHUHO\DVLIWKHFRQVWUXFWLRQZHUH
LQ &KDSWHU  DQG WR WKH UHTXLUHPHQWV RI 6HFWLRQV QHZ,QWKHFRGHWKHFKDQJHRI RFFXSDQF\LV
WKURXJK WUHDWHGDVWKHPRVWH[WHQVLYHDOWHUDWLRQ/HYHO
([FHSWLRQ  $V PRGLILHG LQ 6HFWLRQ  IRU  WKHUHIRUH WKLV LV FRQVLGHUHG QHDUO\ DV
GUDVWLFDVLIWKHEXLOGLQJZHUHUHEXLOW(UJRWKH
KLVWRULFEXLOGLQJV
RFFXSDQF\ UHTXLUHV WKDW D FHUWLILFDWH RI
™ $FKDQJHRIRFFXSDQF\WKDWLVRQO\DFKDQJHLQ RFFXSDQF\ EH LVVXHG DJDLQ DV LI WKH
XVH FDQ EH GHDOW ZLWK DV D /HYHO   RU  FRQVWUXFWLRQZHUHQHZ
DOWHUDWLRQLQDFFRUGDQFHZLWK&KDSWHURU
GHSHQGLQJ RQ WKH H[WHQW RI WKH UHPRGHO DQG 
ZLWK WKH SDUWLFXODU UHTXLUHPHQWV FRQWDLQHG LQ 6(&7,2163(&,$/86($1'
6HFWLRQV  6WUXFWXUDO  (OHFWULFDO
 0HFKDQLFDO DQG  3OXPELQJ 7KH
2&&83$1&<
H[FHSWLRQ SURYLGHV IRU VSHFLDO FRQVLGHUDWLRQV  &RPSOLDQFH ZLWK WKH EXLOGLQJ FRGH
IRUKLVWRULFEXLOGLQJVDVJLYHQLQ6HFWLRQ :KHUHWKHFKDUDFWHURUXVHRIDQH[LVWLQJEXLOGLQJ
 &KDQJH RI RFFXSDQF\ RUSDUWRIDQH[LVWLQJEXLOGLQJLVFKDQJHGWRRQHRI
FODVVLILFDWLRQ RU JURXS  :KHUH WKH RFFXSDQF\ WKHIROORZLQJVSHFLDOXVHRURFFXSDQF\FDWHJRULHV
FODVVLILFDWLRQRIDEXLOGLQJFKDQJHVWKHSURYLVLRQV DV GHILQHG LQ WKH 6%&  WKH EXLOGLQJ VKDOO
RI 6HFWLRQV  WKURXJK  VKDOO DSSO\ 7KLV FRPSO\ZLWKDOORIWKHDSSOLFDEOHUHTXLUHPHQWVRI
LQFOXGHVDFKDQJHRIRFFXSDQF\FODVVLILFDWLRQDQGD WKH6%&
FKDQJH WR DQRWKHU JURXS ZLWKLQ DQ RFFXSDQF\ 
FODVVLILFDWLRQ  &RYHUHGDQGRSHQPDOOEXLOGLQJV
 $WULXPV
™ :KHQ D XVH RI D EXLOGLQJ FKDQJHV DQG WKH  0RWRUYHKLFOHUHODWHGRFFXSDQFLHV
RFFXSDQF\ FODVVLILFDWLRQ FKDQJHV WKH
 $LUFUDIWUHODWHGRFFXSDQFLHV
SURYLVLRQV RI 6HFWLRQV  WKURXJK  ZLOO
DSSO\ )RU H[DPSOH LI DQ ROG GRZQWRZQ  0RWLRQSLFWXUHSURMHFWLRQURRPV
KDUGZDUH VWRUH 2FFXSDQF\ &ODVVLILFDWLRQ 0 LV  6WDJHVDQGSODWIRUPV
VROGDQGUHPRGHOHGLQWRDFRQGRPLQLXPSURMHFW  6SHFLDODPXVHPHQWEXLOGLQJV
2FFXSDQF\&ODVVLILFDWLRQ5WKHQLWLVLPSRUWDQW  ,QFLGHQWDOXVHDUHDV
WRSURWHFWWKHQHZUHVLGHQWVZLWKDOOWKHUHTXLUHG  +D]DUGRXVPDWHULDOV
FRGH SURYLVLRQV WKDW PD\ QRW KDYH EHHQ LQ $PEXODWRU\FDUHIDFLOLWLHV
SODFH ZKHQ WKH SURSHUW\ ZDV XWLOL]HG DV D *URXS,RFFXSDQFLHV
KDUGZDUH VWRUH 6HFWLRQV  DQG  
UHTXLUH DGGUHVVLQJ 6%&  &KDSWHU 
UHTXLUHPHQWV LI WKH WKUHVKROGV DUH H[FHHGHG ™ 7KH 6%&  FRQWDLQV VRPH VSHFLDO W\SHV RI
WKURXJKWKHFKDQJHRIRFFXSDQF\FODVVLILFDWLRQ FRQVWUXFWLRQ RU RFFXSDQFLHV 7KHVH DUH
RUJURXS H[DPSOHV ZKHUH WKH DOWHUDWLRQ WR WKH EXLOGLQJ
GRHV QRW DFWXDOO\ LQYROYH D FKDQJH LQ
RFFXSDQF\ FODVVLILFDWLRQ EXW LQYROYHV D
 3DUWLDO FKDQJH RI RFFXSDQF\ VLJQLILFDQWFKDQJHWRWKHVHVSHFLDORFFXSDQFLHV
:KHUH WKH RFFXSDQF\ FODVVLILFDWLRQ RU JURXS RI D WKDWDUHUHJXODWHGE\YHU\VSHFLILFSURYLVLRQVLQ
SRUWLRQRIDQH[LVWLQJEXLOGLQJLVFKDQJHG6HFWLRQ &KDSWHURIWKH6%&$VVXFKWKHFRGH
VKDOODSSO\ FDQQRW EH DSSOLHG WR WKHVH VSHFLILF SURYLVLRQV
EHFDXVHVXFKDFKDQJHLVRXWVLGHWKHVFRSHRI
™ &LUFXPVWDQFHVRFFXUZKHUHRQO\DSRUWLRQRID WKHFRGH)RULQVWDQFHDODUJHUHWDLOVWRUHFRXOG
EXLOGLQJ LV FKDQJHG WR D GLIIHUHQW RFFXSDQF\ EHFRQYHUWHGWRDPXOWLSOHWHQDQWIDFLOLW\ZKHUH
FODVVLILFDWLRQ 7KLV VHFWLRQ UHIHUV WR 6HFWLRQ WKH RZQHU ZRXOG OLNH WR XVH D FRYHUHG PDOO
 ZKHUH 6HFWLRQV  DQG  FRQFHSW 7KH XWLOL]DWLRQ RI WKH JHQHUDO
DGGUHVVDSDUWLDOFKDQJHRIRFFXSDQF\IRUWZR SURYLVLRQV RI WKH FRGH ZRXOG QRW DGHTXDWHO\

6%&&& 

&+$37(5²&+$1*(2)2&&83$1&<

GHDO ZLWK WKH VSHFLILF FRQVLGHUDWLRQV IRU OLIH ILUH SURWHFWLRQ V\VWHP WKUHVKROG UHTXLUHPHQW LQ
VDIHW\ HQYLVLRQHG DV QHFHVVDU\ LQ WKH VSHFLDO &KDSWHURI6%&
RFFXSDQF\ SURYLVLRQV RI WKH 6%& 
7KHUHIRUHWKHGHVLJQHUPXVWVLPSO\IROORZWKH ™ &KDSWHUV    DQG  DUH DOO RUJDQL]HG
SURYLVLRQVRIWKH6%&DVLIWKHFRQVWUXFWLRQ JHQHUDOO\LQWKHVDPHPDQQHU6SHFLDO8VHDQG
ZHUHQHZ 2FFXSDQF\ %XLOGLQJ (OHPHQWV DQG 0DWHULDOV
)LUH3URWHFWLRQ0HDQVRI(JUHVV$FFHVVLELOLW\
 8QGHUJURXQGEXLOGLQJV$QXQGHUJURXQG DQG VR RQ &RQVLVWHQW ZLWK WKH VWDWHG
EXLOGLQJ LQ ZKLFK WKHUH LV D FKDQJH RI XVH VKDOO UHTXLUHPHQWVRI6HFWLRQDFKDQJHRI
FRPSO\ ZLWK WKH UHTXLUHPHQWV RI WKH 6%&  RFFXSDQF\QRWLQYROYLQJDFKDQJHRIRFFXSDQF\
DSSOLFDEOHWRXQGHUJURXQGVWUXFWXUHV FODVVLILFDWLRQPXVWEHGHDOWZLWKDVD/HYHO
RUDOWHUDWLRQEDVHGRQWKHFODVVLILFDWLRQRIWKH
™ 6LPLODU WR WKH GLVFXVVLRQ IRU VSHFLDO ZRUN7KLVVHFWLRQDOVRUHTXLUHVDUHYLHZRIWKH
RFFXSDQFLHV JLYHQ LQ 6HFWLRQ  6%&&KDSWHUILUHSURWHFWLRQWKUHVKROGV,I
XQGHUJURXQG EXLOGLQJV DUH GHDOW ZLWK LQ D WKH\DUHH[FHHGHGDQHZILUHSURWHFWLRQV\VWHP
VSHFLILFPDQQHULQ&KDSWHURIWKH6%& VXFK DV DQ DXWRPDWLF VSULQNOHU V\VWHP RU ILUH
7KHGLIIHUHQFHKHUHLVWKDWZKHUHYHUWKHUHLVD DODUPV\VWHPPD\EHUHTXLUHGGHVSLWHWKHUHQRW
FKDQJH RI RFFXSDQF\ LQ DQ XQGHUJURXQG EHLQJ D FKDQJH RI RFFXSDQF\ FODVVLILFDWLRQ
EXLOGLQJ RQO\ WKH 6%&  UHTXLUHPHQWV *HQHUDOO\ EXLOGLQJV RU SRUWLRQV WKHUHRI WKDW
DSSOLFDEOH WR XQGHUJURXQG EXLOGLQJV DSSO\ XQGHUJR D FKDQJH RI RFFXSDQF\ FODVVLILFDWLRQ
YHUVXVIXOOFRPSOLDQFHZLWKWKH 6%&7KH PXVW IXUWKHU FRPSO\ ZLWK WKH DGGLWLRQDO
EXLOGLQJLVRWKHUZLVHGHDOWZLWKDVDFKDQJHRI UHTXLUHPHQWVLQ6HFWLRQ
RFFXSDQF\LQDFFRUGDQFHZLWKWKHFRGH

6(&7,210($162)(*5(66
6(&7,21%8,/',1*(/(0(176
$1'0$7(5,$/6  *HQHUDO 0HDQV RI HJUHVV LQ SRUWLRQVRI
EXLOGLQJV XQGHUJRLQJ D FKDQJH RI RFFXSDQF\
 *HQHUDO%XLOGLQJHOHPHQWVDQGPDWHULDOV FODVVLILFDWLRQVKDOOFRPSO\ZLWK6HFWLRQ
LQ SRUWLRQV RI EXLOGLQJV XQGHUJRLQJ D FKDQJH RI
RFFXSDQF\FODVVLILFDWLRQVKDOOFRPSO\ZLWK6HFWLRQ ™ &KDSWHUV    DQG  DUH DOO RUJDQL]HG
JHQHUDOO\LQWKHVDPHPDQQHU6SHFLDO8VHDQG

2FFXSDQF\ %XLOGLQJ (OHPHQWV DQG 0DWHULDOV
™ &KDSWHUV    DQG  DUH DOO RUJDQL]HG )LUH3URWHFWLRQ0HDQVRI(JUHVV$FFHVVLELOLW\
JHQHUDOO\LQWKHVDPHPDQQHU6SHFLDO8VHDQG DQG VR RQ &RQVLVWHQW ZLWK WKH VWDWHG
2FFXSDQF\ %XLOGLQJ (OHPHQWV DQG 0DWHULDOV UHTXLUHPHQWVRI6HFWLRQDFKDQJHRI
)LUH3URWHFWLRQ0HDQVRI(JUHVV$FFHVVLELOLW\ RFFXSDQF\QRWLQYROYLQJDFKDQJHRIRFFXSDQF\
DQG VR RQ &RQVLVWHQW ZLWK WKH VWDWHG FODVVLILFDWLRQPXVWEHGHDOWZLWKDVD/HYHO
UHTXLUHPHQWVRI6HFWLRQDFKDQJHRI RU  DOWHUDWLRQ WKHUHIRUH WKH UHTXLUHPHQWV
RFFXSDQF\QRWLQYROYLQJDFKDQJHRIRFFXSDQF\ FRQWDLQHG LQ WKRVH FKDSWHUV IRU PHDQV RI
FODVVLILFDWLRQPXVWEHGHDOWZLWKDVD/HYHO HJUHVV ZRXOG DSSO\ GHSHQGLQJ RQ WKH
RU  DOWHUDWLRQ WKHUHIRUH WKH UHTXLUHPHQWV DSSOLFDEOH UHTXLUHPHQWV EDVHG RQ WKH
FRQWDLQHG LQ WKRVH FKDSWHUV IRU EXLOGLQJ FODVVLILFDWLRQRIWKHZRUN%XLOGLQJVRUSRUWLRQV
HOHPHQWV DQG PDWHULDOV ZRXOG DSSO\ WKHUHRI WKDW XQGHUJR D FKDQJH RI RFFXSDQF\
GHSHQGLQJ RQ WKH DSSOLFDEOH UHTXLUHPHQWV FODVVLILFDWLRQ PXVW IXUWKHU FRPSO\ ZLWK WKH
EDVHG RQ WKH FODVVLILFDWLRQ RI WKH ZRUN DGGLWLRQDOUHTXLUHPHQWVLQ6HFWLRQ
%XLOGLQJV RU SRUWLRQV WKHUHRI WKDW XQGHUJR D
FKDQJHRIRFFXSDQF\FODVVLILFDWLRQPXVWIXUWKHU 
FRPSO\ ZLWK WKH DGGLWLRQDO UHTXLUHPHQWV LQ 6(&7,21$&&(66,%,/,7<
6HFWLRQ
 *HQHUDO  $FFHVVLELOLW\ LQ SRUWLRQV RI
EXLOGLQJV XQGHUJRLQJ D FKDQJH RI RFFXSDQF\
6(&7,21),5(3527(&7,21 FODVVLILFDWLRQVKDOOFRPSO\ZLWK6HFWLRQ
 *HQHUDO )LUHSURWHFWLRQUHTXLUHPHQWVRI ™ :KHQ WKH XVH LQ D VWUXFWXUH RU D SRUWLRQ RI D
6HFWLRQ  VKDOO DSSO\ ZKHUH D EXLOGLQJ RU VWUXFWXUHFKDQJHVWKHVSDFHPXVWFRPSO\ZLWK
QHZFRQVWUXFWLRQXQOHVVWHFKQLFDOO\LQIHDVLEOH
SRUWLRQV WKHUHRI XQGHUJR D FKDQJH RI RFFXSDQF\
)RUDGGLWLRQDOLQIRUPDWLRQVHH6HFWLRQ
FODVVLILFDWLRQ RU ZKHUH WKHUH LV D FKDQJH RI &KDSWHUV DQGDUHDOORUJDQL]HGLQWKH
RFFXSDQF\ZLWKLQDVSDFHZKHUHWKHUHLVDGLIIHUHQW VDPH PDQQHU 6SHFLDO 8VH DQG 2FFXSDQF\
%XLOGLQJ (OHPHQWV DQG 0DWHULDOV )LUH

6%&&& 

&+$37(5²&+$1*(2)2&&83$1&<

3URWHFWLRQ0HDQVRI(JUHVV$FFHVVLELOLW\DQG UHIHUHQFHGLQWKH6%&IRUGHWHUPLQLQJZLQG
VRRQ&RQVLVWHQWZLWKWKHVWDWHGUHTXLUHPHQWV DQG VQRZ ORDGV DOVR VHH 6%&  6HFWLRQV
RI6HFWLRQDFKDQJHLQRFFXSDQF\QRW  IRUZLQGDQG IRUVQRZ7KHVHULVN
LQYROYLQJDFKDQJHRIRFFXSDQF\FODVVLILFDWLRQ FDWHJRULHV DUH D IXQFWLRQ RI WKH EXLOGLQJ¶V
PXVWEHGHDOWZLWKDVD/HYHORUDOWHUDWLRQ RFFXSDQF\ 7KH LQWHQW LV WR DFKLHYH D KLJKHU
WKHUHIRUHWKHUHTXLUHPHQWVFRQWDLQHGLQWKRVH OHYHORISHUIRUPDQFHIRUWKHIDFLOLWLHVWKDWKDYH
FKDSWHUV IRU DFFHVVLELOLW\ ZRXOG DSSO\ KLJKHUULVNFDWHJRULHVWKXVWKHULVNFDWHJRULHV
GHSHQGLQJ RQ WKH DSSOLFDEOH UHTXLUHPHQWV JHQHUDOO\ LQFUHDVH ZLWK WKH LPSRUWDQFH RI WKH
EDVHG RQ WKH FODVVLILFDWLRQ RI WKH ZRUN IDFLOLW\7KHIDFLOLWLHVOLVWHG DV&DWHJRU\,9DUH
%XLOGLQJV RU SRUWLRQV WKHUHRI WKDW XQGHUJR D FRQVLGHUHGHVVHQWLDOIDFLOLWLHVDQGDUHDVVLJQHG
FKDQJHRIRFFXSDQF\FODVVLILFDWLRQPXVWIXUWKHU WKH KLJKHVW ULVN FDWHJRU\ 7KH IDFLOLWLHV DUH
FRPSO\ ZLWK WKH DGGLWLRQDO UHTXLUHPHQWV LQ HVVHQWLDOLQWKDWWKHLUFRQWLQXRXVXVHLVQHHGHG
6HFWLRQ )RU H[DPSOH ILUH UHVFXH DQG SROLFH VWDWLRQV
DQGHPHUJHQF\YHKLFOHJDUDJHVDUHQHHGHGWR
EH LQ VHUYLFH GXULQJ DQG LPPHGLDWHO\ DIWHU D
6(&7,216758&785$/ PDMRU ZLQGVWRUP RU HDUWKTXDNH HYHQW :KHUH
WKLVDSSOLHVWKHVWUXFWXUHPXVWEHDQDO\]HGIRU
 *UDYLW\ ORDGV  %XLOGLQJV RU SRUWLRQV VQRZ DQG ZLQG ORDGV DQG VKRZQ WR EH
WKHUHRI VXEMHFW WR D FKDQJH RI RFFXSDQF\ ZKHUH DGHTXDWHXQGHUWKHSURYLVLRQVRIWKH6%&
VXFKFKDQJHLQWKHQDWXUHRIRFFXSDQF\UHVXOWVLQ IRUQHZEXLOGLQJV7KHLPSDFWWKLVPD\KDYHRQ
KLJKHU XQLIRUP RU FRQFHQWUDWHG ORDGV EDVHG RQ WKHH[LVWLQJVWUXFWXUHDQGWKHPLQLPXPGHVLJQ
7DEOH  RI  6%&  VKDOO FRPSO\ ZLWK WKH ORDGV GHSHQGV RQ WKH PDJQLWXGH RI WKH ULVN
FDWHJRU\ IRU WKH QHZ SURSRVHG RFFXSDQF\
JUDYLW\ORDGSURYLVLRQVRIWKH6%&
FDWHJRU\ UHODWLYH WR WKRVH UHTXLUHG IRU WKH
([FHSWLRQ6WUXFWXUDOHOHPHQWVZKRVHVWUHVVLVQRW FXUUHQW RFFXSDQF\ FDWHJRU\ 2WKHU OHVV
LQFUHDVHGE\PRUHWKDQSHUFHQW DSSDUHQWLPSDFWVZLOOUHVXOWGXHWRWKHIDFWWKDW
WKHEDVLFGHVLJQORDGVSULRUWRFRQVLGHULQJWKH
™ 7KHVHVWUXFWXUDOUHTXLUHPHQWVDSSO\ZKHUHWKH ULVNFDWHJRU\HJZLQGSUHVVXUHUHTXLUHGE\
FKDQJH RI RFFXSDQF\ UHVXOWV LQ DQ LQFUHDVHG WKH 6%&  ZLOO RIWHQ EH GLIIHUHQW WKDQ WKH
PLQLPXPOLYHORDGUHTXLUHGE\6%&6HFWLRQ SUHGHFHVVRUPRGHOFRGHXVHGLQWKHEXLOGLQJ¶V
 7KH H[FHSWLRQ DOORZV LQFUHDVHG JUDYLW\ RULJLQDOGHVLJQ7KHH[FHSWLRQDOORZVDFKDQJH
GHVLJQ ORDGV WKDW GR QRW LQFUHDVH VWUHVVHV LQ RI RFFXSDQF\ WR DQ RFFXSDQF\ UHTXLULQJ D
DIIHFWHG VWUXFWXUDO HOHPHQWV E\ PRUH WKDQ  KLJKHU ULVN FDWHJRU\ ZLWKRXW D VWUXFWXUDO
SHUFHQW $OORZLQJ RYHUVWUHVVHV RI XS WR  DQDO\VLVZKHUHWKLVRFFXSDQF\FRPSULVHVRQO\
SHUFHQW LQ H[LVWLQJ VWUXFWXUDO PHPEHUV KDV DUHODWLYHO\VPDOOSRUWLRQRIWKHHQWLUHEXLOGLQJ
EHHQ D ORQJVWDQGLQJ UXOH RI WKXPE XVHG E\
VWUXFWXUDOHQJLQHHUV  6HLVPLFORDGV  ([LVWLQJEXLOGLQJVZLWK D
FKDQJHRIRFFXSDQF\VKDOOFRPSO\ZLWKWKHVHLVPLF
 6QRZDQGZLQGORDGV SURYLVLRQVRI6HFWLRQVDQG
%XLOGLQJV DQG VWUXFWXUHV VXEMHFW WR D FKDQJH RI ™ $ FKDQJH RI RFFXSDQF\ PXVW FRPSO\ ZLWK WKH
RFFXSDQF\ ZKHUH VXFK FKDQJH LQ WKH QDWXUH RI VHLVPLF SURYLVLRQV RI 6HFWLRQV  DQG
RFFXSDQF\ UHVXOWV LQ KLJKHU ZLQG RU VQRZ ULVN 
FDWHJRULHVEDVHGRQ7DEOHRI6%&VKDOO
EH DQDO\]HGDQG VKDOOFRPSO\ZLWK WKH DSSOLFDEOH  &RPSOLDQFH ZLWK 6%& OHYHO
ZLQGRUVQRZORDGSURYLVLRQVRIWKH6%& VHLVPLFIRUFHV:KHUHDEXLOGLQJRUSRUWLRQWKHUHRI
LVVXEMHFWWRDFKDQJHRIRFFXSDQF\WKDWUHVXOWVLQ
([FHSWLRQ  :KHUH WKH QHZ RFFXSDQF\ ZLWK D WKHEXLOGLQJEHLQJDVVLJQHGWRDKLJKHUULVNFDWHJRU\
KLJKHU ULVN FDWHJRU\ LV OHVV WKDQ RU HTXDO WR  EDVHG RQ 7DEOH  RI 6%&  WKH EXLOGLQJ
SHUFHQW RI WKH WRWDO EXLOGLQJ IORRU DUHD 7KH VKDOO FRPSO\ ZLWKWKHUHTXLUHPHQWVIRU 6%& 
FXPXODWLYHHIIHFWRIWKHDUHDRIRFFXSDQF\FKDQJHV OHYHO VHLVPLF IRUFHV DV VSHFLILHG LQ 6HFWLRQ
VKDOO EH FRQVLGHUHG IRU WKH SXUSRVHV RI WKLV IRUWKHQHZULVNFDWHJRU\
H[FHSWLRQ
([FHSWLRQV
™ 7KLVVHFWLRQDGGUHVVHVDFKDQJHRIRFFXSDQF\
WKDW UHVXOWV LQ KLJKHU ZLQG RU VQRZ ULVN  :KHUH DSSURYHG E\ WKH EXLOGLQJ RIILFLDO
FDWHJRULHV WKDQ UHTXLUHG IRU WKH FXUUHQW VSHFLILF GHWDLOLQJ SURYLVLRQV UHTXLUHG IRU D
RFFXSDQF\7KHULVNFDWHJRULHVOLVWHGLQ7DEOH QHZVWUXFWXUHDUHQRWUHTXLUHGWREHPHWZKHUH
RIWKH6%& DUHGLUHFWO\SURSRUWLRQDO LW FDQ EH VKRZQ WKDW DQ HTXLYDOHQW OHYHO RI
WRWKHULVNFDWHJRULHVIRUVQRZDQGZLQGWKDWDUH SHUIRUPDQFHDQGVHLVPLFVDIHW\LVREWDLQHGIRU
OLVWHGLQWKH6%&GHVLJQVWDQGDUGZKLFKLV WKH DSSOLFDEOH ULVN FDWHJRU\ EDVHG RQ WKH

6%&&& 

&+$37(5²&+$1*(2)2&&83$1&<

SURYLVLRQIRUUHGXFHG6%&OHYHOVHLVPLF RU PRUH RFFXSDQFLHV WKDW DUH FODVVLILHG LQ

IRUFHVDVVSHFLILHGLQ6HFWLRQ GLIIHUHQW ULVN FDWHJRULHV 7KH JHQHUDO
 :KHUHWKHDUHDRIWKHQHZRFFXSDQF\ZLWKD UHTXLUHPHQW IRU D FKDQJH RI RFFXSDQF\
KLJKHUKD]DUGFDWHJRU\LVOHVVWKDQRUHTXDOWR UHVXOWLQJ LQ D PL[HGXVH EXLOGLQJ LV WKDW WKH
HQWLUH VWUXFWXUH PXVW EH GHVLJQHG LQ
SHUFHQWRIWKHWRWDOEXLOGLQJIORRUDUHDDQG
DFFRUGDQFHZLWKWKHUHTXLUHPHQWVRIWKHPRVW
WKH QHZ RFFXSDQF\ LV QRW FODVVLILHG DV 5LVN FULWLFDO ULVN KLJKHU KD]DUG FODVVLILFDWLRQ
&DWHJRU\ ,9 )RU WKH SXUSRVHV RI WKLV FDWHJRU\ EHFDXVH LW UHVLVWV WKH HDUWKTXDNH
H[FHSWLRQEXLOGLQJVRFFXSLHGE\WZRRUPRUH IRUFHVDVDXQLW7KLVLVFRQVLVWHQWZLWK6%&
RFFXSDQFLHV QRW LQFOXGHG LQ WKH VDPH ULVN &KDSWHU7KHDFWXDOH[FHSWLRQWRWKLVUXOHLV
FDWHJRU\VKDOOEHVXEMHFWWRWKHSURYLVLRQVRI ZKHUHDQHZRFFXSDQF\KDYLQJDULVNFDWHJRU\
6HFWLRQRI6%&7KHFXPXODWLYH FRPSULVHVQRPRUHWKDQSHUFHQWRIWKHWRWDO
HIIHFWRIWKHDUHDRIRFFXSDQF\FKDQJHVVKDOO EXLOGLQJ DUHD DQG LW LV QRW FRQVLGHUHG DQ
EH FRQVLGHUHG IRU WKH SXUSRVHV RI WKLV HVVHQWLDOIDFLOLW\7KURXJKUHIHUHQFHWR6%&
H[FHSWLRQ 6HFWLRQWKLVH[FHSWLRQIXUWKHUDOORZV
PXOWLSOH RFFXSDQFLHV WKDW DUH VWUXFWXUDOO\
 8QUHLQIRUFHGPDVRQU\EHDULQJZDOOEXLOGLQJV
VHSDUDWHG WR EH VHSDUDWHO\ FODVVLILHG DQG
LQ5LVN&DWHJRU\,,,ZKHQDVVLJQHGWR6HLVPLF GHVLJQHG LQGHSHQGHQWO\ XVLQJ WKH ULVN
'HVLJQ&DWHJRU\$RU%VKDOOEHDOORZHGWREH FDWHJRULHV DSSOLFDEOH WR HDFK RFFXSDQF\
VWUHQJWKHQHG WR PHHW WKH UHTXLUHPHQWV RI FDWHJRU\
$SSHQGL[ &KDSWHU $ RI WKLV FRGH ™ ([FHSWLRQ UHIHUVWR&KDSWHU$RI $SSHQGL[
>*XLGHOLQHV IRU WKH 6HLVPLF 5HWURILW RI $ *XLGHOLQHV IRU 6HLVPLF 5HWURILW RI ([LVWLQJ
([LVWLQJ%XLOGLQJV*65(%@ %XLOGLQJV *65(% ZKLFK LV DSSOLFDEOH WR
XQUHLQIRUFHG PDVRQU\EHDULQJ 850 ZDOO
™ 7KHWZRW\SHVRIRFFXSDQF\FKDQJHVWKDWPDNH EXLOGLQJV7KHVHEXLOGLQJVZRXOGOLNHO\IDOOLQWR
LW QHFHVVDU\ WR FRPSO\ ZLWK 6%& OHYHO WKHFDWHJRU\RIEXLOGLQJVDOUHDG\H[HPSWXQGHU
VHLVPLF IRUFHV LQ DFFRUGDQFH ZLWK 6HFWLRQ ([FHSWLRQ  1HYHUWKHOHVV WKLV H[FHSWLRQ
DUHDVIROORZV SURYLGHV D GLUHFW OLQN WR WKH *65(%
x 7KHFKDQJHRIRFFXSDQF\UHVXOWVLQWKHQHZ UHTXLUHPHQWVIRU850EXLOGLQJVWKDWXQGHUJRD
RFFXSDQF\ UHTXLULQJ D KLJKHU ULVN FDWHJRU\ FKDQJH RI RFFXSDQF\ 6HFWLRQ $
VHH 6%&  7DEOH  7KH OLPLWDWLRQVPDNH&KDSWHU$DSSOLFDEOHWR5LVN
H[SODQDWLRQLVWKHVDPHDVWKDWJLYHQLQWKH &DWHJRULHV,DQG,,LQ6%&7DEOH
FRPPHQWDU\WR6HFWLRQ  $FFHVV WR 5LVN &DWHJRU\ ,9
x 7KHFKDQJHRIRFFXSDQF\UHVXOWVLQWKHQHZ :KHUH D FKDQJH RI RFFXSDQF\ LV VXFK WKDW
RFFXSDQF\KDYLQJDKLJKHUKD]DUGFDWHJRU\ FRPSOLDQFH ZLWK 6HFWLRQ  LVUHTXLUHG DQG
LQDFFRUGDQFHZLWK7DEOH WKH EXLOGLQJ LV DVVLJQHG WR 5LVN &DWHJRU\ ,9 WKH
™ 7KH FRGH UHFRJQL]HV WKDW WKH ULVN WR VDIHW\ LV RSHUDWLRQDO DFFHVV WR WKH EXLOGLQJ VKDOO QRW EH
OLNHO\ WR EH JUHDWHU LQ WKH SUHYLRXVO\ OLVWHG WKURXJKDQDGMDFHQWVWUXFWXUHXQOHVVWKDWVWUXFWXUH
VLWXDWLRQV DQG FRQIRUPDQFH WR WKH 6%&  FRQIRUPVWRWKHUHTXLUHPHQWVIRU5LVN&DWHJRU\,9
VHLVPLF IRUFHV LQ DFFRUGDQFH ZLWK 6HFWLRQ VWUXFWXUHV:KHUHRSHUDWLRQDODFFHVVLVOHVVWKDQ
LVPDQGDWHGXQOHVVFRPSOLDQFHZLWK P IURP HLWKHU DQ LQWHULRU ORW OLQH RU IURP DQRWKHU
DQ\ RI WKH H[FHSWLRQV FDQ EH GHPRQVWUDWHG VWUXFWXUH DFFHVV SURWHFWLRQ IURP SRWHQWLDO IDOOLQJ
6HFWLRQ  FRQWDLQV WZR PHWKRGV RI
GHEULVVKDOOEHSURYLGHGE\WKHRZQHURIWKH5LVN
FRPSOLDQFHHLWKHURIZKLFKFDQEHXWLOL]HG6HH
WKHFRPPHQWDU\WR6HFWLRQIRUPRUH &DWHJRU\,9VWUXFWXUH
LQIRUPDWLRQ ™ 7KLV VHFWLRQ LV LQWHQGHG WR HQVXUH DFFHVV IRU
™ ([FHSWLRQLVEDVHGRQDVLPLODUH[FHSWLRQWR WKH RFFXSDQW WR HVVHQWLDO IDFLOLWLHV DIWHU DQ
&KDSWHURIWKH6%&DQGUHFRJQL]HVWKH HDUWKTXDNH E\ SURKLELWLQJ DFFHVV WKURXJK DQ
GLIILFXOW\ RI PDNLQJ DQ ROGHU VWUXFWXUH FRPSO\ DGMDFHQWVWUXFWXUHWKDWGRHVQRWFRPSO\ZLWKWKH
ZLWK WKH VHLVPLF UHTXLUHPHQWV IRU D QHZ VHLVPLF FULWHULD IRU HVVHQWLDO IDFLOLWLHV 7KHVH
VWUXFWXUH ,W SURYLGHV JHQHUDO JXLGDQFH WR WKH UHTXLUHPHQWVDUHWKHUHVXOWRIOHVVRQVOHDUQHG
EXLOGLQJRIILFLDODQGGHVLJQHURQDUHDVWKDWQHHG IURP SUHYLRXV HDUWKTXDNHV LQ ZKLFK HVVHQWLDO
WR EH LQYHVWLJDWHG ZKHQ FRPSOLDQFH ZLWK WKH IDFLOLWLHV KDYH EHHQ UHQGHUHG RXW RI VHUYLFH
VHLVPLF UHTXLUHPHQWV IRU QHZ EXLOGLQJV LV QRW EHFDXVHRIWKHIDLOXUHRIDQDGMDFHQWVWUXFWXUH
IHDVLEOH 6HH 6HFWLRQ  IRU WKH RU D VWUXFWXUH¶V H[WHULRU FRPSRQHQWV 7KHVH
SHUPLWWHG HYDOXDWLRQ DQG UHKDELOLWDWLRQ UHTXLUHPHQWVDUHEDVHGRQ6%&DVZHOODV
SURFHGXUHV )(0$
™ ([FHSWLRQ  FRQWDLQV UHTXLUHPHQWV DQG
H[FHSWLRQVWKDWDSSO\WREXLOGLQJVKRXVLQJWZR 

6%&&& 

&+$37(5²&+$1*(2)2&&83$1&<

6(&7,21(/(&75,&$/ FRUUHFWHG ZLWKRXW UHTXLULQJ WKDW DOO SDUWV RI WKH

HOHFWULFDO V\VWHP FRPSO\ ZLWK 6DXGL (OHFWULFDO
 6SHFLDO RFFXSDQFLHV  :KHUH WKH &RGH6%&RU1)3$
RFFXSDQF\ RI DQ H[LVWLQJ EXLOGLQJ RU SDUW RI DQ
H[LVWLQJEXLOGLQJLVFKDQJHGWRRQHRIWKHIROORZLQJ ™ %XLOGLQJVVWUXFWXUHVRUSUHPLVHVWKDWFRQVWLWXWH
VSHFLDORFFXSDQFLHVDVGHVFULEHGLQ6DXGL(OHFWULFDO D ILUH KD]DUG RU DUH RWKHUZLVH GDQJHURXV WR
&RGH6%&RU1)3$WKHHOHFWULFDOZLULQJ KXPDQ OLIH RU WKDW LQ UHODWLRQ WR H[LVWLQJ XVH
FRQVWLWXWH D KD]DUG WR VDIHW\ KHDOWK RU SXEOLF
DQG HTXLSPHQW RI WKH EXLOGLQJ RU SRUWLRQ WKHUHRI
ZHOIDUHE\UHDVRQRILQDGHTXDWHPDLQWHQDQFH
WKDWFRQWDLQVWKHSURSRVHGRFFXSDQF\VKDOOFRPSO\ GLODSLGDWLRQ REVROHVFHQFH ILUH KD]DUG
ZLWKWKHDSSOLFDEOHUHTXLUHPHQWVRI6DXGL(OHFWULFDO GLVDVWHUGDPDJHRUDEDQGRQPHQWDVVSHFLILHG
&RGH 6%&  RU 1)3$  ZKHWKHU RU QRW D LQWKHFRGHRUDQ\RWKHURUGLQDQFHDUHXQVDIH
FKDQJHRIRFFXSDQF\JURXSLVLQYROYHG FRQGLWLRQV 7KH LQWHQW RI WKLV VHFWLRQ LV WR
DGGUHVV XQVDIH HOHFWULFDO FRQGLWLRQV EHIRUH
 +D]DUGRXVORFDWLRQV WKH\ FDQ OHDG WR LQMXU\ RU GHDWK 7KH FRGH
 &RPPHUFLDOJDUDJHVUHSDLUDQGVWRUDJH VSHFLILFDOO\ UHTXLUHV RQO\ WKH XQVDIH ZLULQJ
 $LUFUDIWKDQJDUV FRQGLWLRQ WR EH EURXJKW XS WR WKH FXUUHQW
 *DVROLQHGLVSHQVLQJDQGVHUYLFHVWDWLRQV SURYLVLRQVRI6DXGL(OHFWULFDO&RGH6%&
RU1)3$$Q\DGGLWLRQDOH[LVWLQJZLULQJWKDW
 %XONVWRUDJHSODQWV
LV LVRODWHG IURP WKH GDPDJHG DUHD LV QRW
 6SUD\ DSSOLFDWLRQ GLSSLQJ DQG FRDWLQJ UHTXLUHGWREHUHSDLUHGRUUHSODFHG
SURFHVVHV ™ ([DPSOH2QDW\SLFDOGRZQWRZQVWUHHWDERYH
 +HDOWKFDUHIDFLOLWLHV WKHPDLQVWUHHWFRPPHUFLDORFFXSDQFLHVWKHUH
 3ODFHVRIDVVHPEO\ DUHVRPHROGHUH[LVWLQJDSDUWPHQWV3ULRUWRWKH
 7KHDWHUV DXGLHQFH DUHDV RI PRWLRQ SLFWXUH UHQWDO RI RQH SDUWLFXODU XQLW DQ LQVSHFWRU
DQGWHOHYLVLRQVWXGLRVDQGVLPLODUORFDWLRQV QRWLFHV D GDPDJHG UHFHSWDFOH ZLWK ZLULQJ
0RWLRQ SLFWXUH DQG WHOHYLVLRQ VWXGLRV DQG H[SRVHG $FFRUGLQJ WR 6HFWLRQ  RI WKH
VLPLODUORFDWLRQV FRGH WKLV RXWOHW PXVW EH SURSHUO\ UHSDLUHG RU
0RWLRQSLFWXUHSURMHFWRUV UHSODFHG LQ DFFRUGDQFH ZLWK 6DXGL (OHFWULFDO
&RGH6%&RU1)3$7KHUHPDLQGHURI
$JULFXOWXUDOEXLOGLQJV
WKH H[LVWLQJ HOHFWULFDO V\VWHP ZRXOG QRW EH
™ 6LPLODU WR WKH GLVFXVVLRQ LQ 6HFWLRQ  RI UHTXLUHGWREHFKDQJHGXQOHVVLWZDVGDPDJHG
WKH FRGH UHJDUGLQJ WKH VSHFLDO RFFXSDQF\
SURYLVLRQVRI6%&&KDSWHUWKH1DWLRQDO  6HUYLFHXSJUDGH:KHUHWKHRFFXSDQF\RI
(OHFWULFDO&RGH1)3$FRQWDLQVSURYLVLRQV DQH[LVWLQJEXLOGLQJRUSDUWRIDQH[LVWLQJEXLOGLQJ
IRU VSHFLDO W\SHV RI FRQVWUXFWLRQV RU LVFKDQJHGHOHFWULFDOVHUYLFHVKDOOEHXSJUDGHG WR
RFFXSDQFLHV 7KHVH DUH H[DPSOHV ZKHUH WKH PHHW WKH UHTXLUHPHQWV RI 6DXGL (OHFWULFDO &RGH
DOWHUDWLRQ WR WKH EXLOGLQJ GRHV QRW DFWXDOO\ 6%&RU1)3$IRUWKHQHZRFFXSDQF\
LQYROYH D FKDQJH RI RFFXSDQF\ FODVVLILFDWLRQ
™ ,I DQ H[LVWLQJ VWUXFWXUH RU D SRUWLRQ WKHUHRI
EXW LQYROYHV D VLJQLILFDQW FKDQJH WR WKHVH
XQGHUJRHVDFKDQJHRIRFFXSDQF\WKLVVHFWLRQ
VSHFLDORFFXSDQFLHVWKDWDUHUHJXODWHGE\YHU\
UHTXLUHVWKHZLULQJVXSSRUWLQJWKHFKDQJHGDUHD
VSHFLILF SURYLVLRQV LQ 6DXGL (OHFWULFDO &RGH
WR PHHW 6DXGL (OHFWULFDO &RGH 6%&  RU
6%&RU1)3$
1)3$
™ $VVXFKWKHFRGHFDQQRW EH DSSOLHGWRWKHVH
VSHFLILF SURYLVLRQV EHFDXVH VXFK D FKDQJH LV  1XPEHURIHOHFWULFDORXWOHWV:KHUHWKH
RXWVLGHWKHVFRSHRIWKHFRGH)RULQVWDQFHD RFFXSDQF\ RI DQ H[LVWLQJ EXLOGLQJ RU SDUW RI DQ
ODUJH KRVSLWDO FRXOG EH UHQRYDWHG WR FKDQJH H[LVWLQJ EXLOGLQJ LV FKDQJHG WKH QXPEHU RI
VRPHRIWKHVSDFHVWRDQHZHPHUJHQF\URRP HOHFWULFDORXWOHWVVKDOOFRPSO\ZLWK6DXGL(OHFWULFDO
RU QHZ WHVWLQJ IDFLOLW\ 7KH XWLOL]DWLRQ RI WKH
&RGH 6%&  RU 1)3$  IRU WKH QHZ
JHQHUDO SURYLVLRQV RI WKH FRGH ZRXOG QRW
DGHTXDWHO\ GHDO ZLWK WKH VSHFLILF RFFXSDQF\
FRQVLGHUDWLRQV IRU OLIH VDIHW\ HQYLVLRQHG DV ™ 7KH QXPEHU RI RXWOHWV WKDW DUH LQKHUHQW WR DQ
QHFHVVDU\LQWKHVSHFLDORFFXSDQF\SURYLVLRQV DUHDXQGHUJRLQJDFKDQJHRIRFFXSDQF\PXVW
RI 6DXGL (OHFWULFDO &RGH 6%&  RU 1)3$ PHHW (OHFWULFDO &RGH 6%&  RU 1)3$ 
7KHUHIRUHWKHGHVLJQHUPXVWVLPSO\IROORZ UHTXLUHPHQWVIRUWKHQHZRFFXSDQF\
WKH SURYLVLRQV RI 6DXGL (OHFWULFDO &RGH 6%& ™ ([DPSOH$URRPLVXQGHUJRLQJDFKDQJHIURP
RU1)3$ZLWKRXWPRGLILFDWLRQ PHHWLQJURRPXVDJHWRDNLWFKHQ7KHROGUXOH
 8QVDIHFRQGLWLRQV:KHUHWKHRFFXSDQF\ RI EHLQJ DEOH WR JR LQ DQ\ GLUHFWLRQ DORQJ WKH
ZDOO QR PRUH WKDQ  PP DQG UHDFK DQ
RI DQ H[LVWLQJ EXLOGLQJ RU SDUW RI DQ H[LVWLQJ RXWOHWLVQRORQJHUVXIILFLHQW7KHUHZRXOGKDYH
EXLOGLQJLVFKDQJHGDOOXQVDIHFRQGLWLRQVVKDOOEH

6%&&& 

&+$37(5²&+$1*(2)2&&83$1&<

WREHRXWOHWVDGGHGVXFKWKDWQRSRLQWDORQJWKH DERYH VXFK DUHDV DQG VKDOO EH SURWHFWHG LQ

FRXQWHUZDOOOLQHLVPRUHWKDQPPIURPDQ DFFRUGDQFHZLWK6%&
RXWOHW
™ :KHQ D FKDQJH RI RFFXSDQF\ LQYROYHV QHZ
IRRGKDQGOLQJIDFLOLWLHVWKHKHDOWKVDIHW\LVVXHV
DVVRFLDWHG ZLWK WKH LQWHJULW\ RI WKH H[LVWLQJ
6(&7,210(&+$1,&$/ SOXPELQJ HTXLSPHQW DQG IDFLOLWLHV PXVW EH
 0HFKDQLFDO UHTXLUHPHQWV  :KHUH WKH DGGUHVVHG $JDLQ WKH FRGH GRHV QRW FRQWDLQ
RFFXSDQF\ RI DQ H[LVWLQJ EXLOGLQJ RU SDUW RI DQ VSHFLDO SURYLVLRQV IRU VXFK D VSHFLILF LVVXH
H[LVWLQJ EXLOGLQJ LV FKDQJHG VXFK WKDW WKH QHZ 7KHUHIRUH WKH IDFLOLWLHV PXVW EH PRGLILHG LQ
DFFRUGDQFHZLWKWKHLQWHQWRIWKH 6%&IRU
RFFXSDQF\ LV VXEMHFW WR GLIIHUHQW NLWFKHQ H[KDXVW
QHZIDFLOLWLHV
UHTXLUHPHQWVRUWRLQFUHDVHGPHFKDQLFDOYHQWLODWLRQ
UHTXLUHPHQWVLQDFFRUGDQFHZLWKWKH6%&WKH  ,QWHUFHSWRU UHTXLUHG  ,I WKH QHZ
QHZRFFXSDQF\VKDOOFRPSO\ZLWKWKHUHVSHFWLYHWKH RFFXSDQF\ZLOOSURGXFHJUHDVHRURLOODGHQZDVWHV
6DXGLWKH6%&SURYLVLRQV LQWHUFHSWRUVVKDOOEH SURYLGHGDV UHTXLUHGLQ 6%&

™ 7KLV VHFWLRQ GHDOV ZLWK WZR VSHFLILF VFHQDULRV
WKDWFRXOGRFFXULQDFKDQJHRIRFFXSDQF\WKDW ™ :KHQ D FKDQJH RI RFFXSDQF\ LQYROYHV QHZ
GRHV QRW TXDOLI\ DV D FKDQJH RI RFFXSDQF\ IDFLOLWLHV WKDW SURGXFH JUHDVH RU RLOODGHQ
FODVVLILFDWLRQ7KHILUVWVFHQDULRLVDFKDQJHLQ ZDVWHVWKHLVVXHVDVVRFLDWHGZLWKWKHLQWHJULW\
NLWFKHQ HTXLSPHQW WKDW ZRXOG UHTXLUH GLIIHUHQW RI WKH H[LVWLQJ SOXPELQJ HTXLSPHQW DQG
H[KDXVWUHTXLUHPHQWV$VLPSOHFKDQJHLQWKH IDFLOLWLHV PXVW EH DGGUHVVHG $JDLQ WKH FRGH
VL]HRIDJULOOZRXOGUHTXLUHDGLIIHUHQWKRRGDQG GRHVQRWFRQWDLQVSHFLDOSURYLVLRQVIRUVXFKD
OHYHOV RI H[KDXVW 7KLV W\SH RI FKDQJH PHHWV VSHFLILFLVVXH7KHUHIRUHWKHIDFLOLWLHVPXVWEH
WKHGHILQLWLRQRID³&KDQJHRIRFFXSDQF\´7KH PRGLILHG LQ DFFRUGDQFH ZLWK WKH LQWHQW RI WKH
VHFRQG VFHQDULR LV D FKDQJH LQ YHQWLODWLRQ 6%&IRUQHZIDFLOLWLHV
UHTXLUHPHQWV 0DQ\ FKDQJHV RI RFFXSDQF\
FRXOGOHDGWRFKDQJHVLQWKHRFFXSDQWORDGRI  &KHPLFDO ZDVWHV  ,I WKH QHZ RFFXSDQF\
WKHEXLOGLQJ ZLOOSURGXFH FKHPLFDOZDVWHVWKH IROORZLQJVKDOO
™ $Q LQFUHDVH LQ WKH RFFXSDQW ORDG FRXOG PHDQ DSSO\
DQ LQFUHDVH LQ YHQWLODWLRQ UHTXLUHPHQWV 
7KHUHIRUH YHQWLODWLRQ OHYHOV ZRXOG QHHG WR EH  ,I WKHH[LVWLQJSLSLQJLVQRWFRPSDWLEOHZLWK
EDVHGRQWKHUHTXLUHPHQWVRIWKH6%& WKH FKHPLFDO ZDVWH WKH ZDVWH VKDOO EH
QHXWUDOL]HG SULRU WR HQWHULQJ WKH GUDLQDJH
V\VWHP RU WKH SLSLQJ VKDOO EH FKDQJHG WR D
6(&7,213/80%,1* FRPSDWLEOHPDWHULDO
 ,QFUHDVHGGHPDQG:KHUHWKHRFFXSDQF\  1RFKHPLFDOZDVWHVKDOOGLVFKDUJHWRDSXEOLF
RI DQ H[LVWLQJ EXLOGLQJ RU SDUW RI DQ H[LVWLQJ VHZHU V\VWHP ZLWKRXW WKH DSSURYDO RI WKH
EXLOGLQJLVFKDQJHGVXFKWKDWWKHQHZRFFXSDQF\LV VHZDJHDXWKRULW\
VXEMHFW WR LQFUHDVHG RU GLIIHUHQW SOXPELQJ IL[WXUH ™ :KHQ D FKDQJH RI RFFXSDQF\ LQYROYHV QHZ
UHTXLUHPHQWV RU WR LQFUHDVHG ZDWHU VXSSO\ IDFLOLWLHVWKDWSURGXFHFKHPLFDOZDVWHVLVVXHV
UHTXLUHPHQWVLQDFFRUGDQFHZLWKWKH6%&WKH DVVRFLDWHG ZLWK WKH LQWHJULW\ RI H[LVWLQJ
QHZRFFXSDQF\VKDOOFRPSO\ZLWKWKHLQWHQWRIWKH SOXPELQJ HTXLSPHQW DQG IDFLOLWLHV PXVW EH
UHVSHFWLYH6%&SURYLVLRQV DGGUHVVHG ,Q WKLV FDVH WKH SHUIRUPDQFH
UHTXLUHPHQWV HVVHQWLDOO\ DGGUHVV WKH LQWHQW RI
™ 0DQ\ FKDQJHV RI RFFXSDQF\ FRXOG OHDG WR WKH 6%&  IRU KHDOWK VDIHW\ OLIH VDIHW\ DQG
FKDQJHVLQWKHRFFXSDQWORDGRIWKHEXLOGLQJ$Q HQYLURQPHQWDO VDIHW\ E\ UHTXLULQJ WKDW WKH
LQFUHDVH LQ WKH RFFXSDQW ORDG FRXOG PHDQ DQ SLSLQJ EH PDGH WR KDQGOH WKH SDUWLFXODU
LQFUHDVH LQ QHHGHG SOXPELQJ IL[WXUHV FKHPLFDOVRUWKHFKHPLFDOVEHWUHDWHGVRDVWR
7KHUHIRUH IL[WXUH OHYHOV ZRXOG QHHG WR EH QRWKDUPWKHSLSLQJDQGWKDWWKHLPSDFWRQWKH
EDVHGRQWKHLQWHQWRIWKH6%& SXEOLFVHZHUV\VWHPEHDGGUHVVHG
 )RRGKDQGOLQJ RFFXSDQFLHV  ,I WKH QHZ  *URXS ,  ,I WKH RFFXSDQF\ JURXS LV
RFFXSDQF\ LV D IRRGKDQGOLQJ HVWDEOLVKPHQW DOO FKDQJHG WR *URXS , WKH SOXPELQJ V\VWHP VKDOO
H[LVWLQJVDQLWDU\ZDVWHOLQHVDERYHWKHIRRGRUGULQN FRPSO\ ZLWK WKH DSSOLFDEOH UHTXLUHPHQWV RI 6%&
SUHSDUDWLRQ RU VWRUDJH DUHDV VKDOO EH SDQQHG RU 
RWKHUZLVH SURWHFWHG WR SUHYHQW OHDNLQJ SLSHV RU
™ 6LPLODU WR WKH SURYLVLRQV JLYHQ LQ 6HFWLRQ
FRQGHQVDWLRQRQSLSHVIURPFRQWDPLQDWLQJIRRGRU IRUVSHFLDORFFXSDQFLHVLQWKH6%&
GULQN 1HZ GUDLQDJH OLQHV VKDOO QRW EH LQVWDOOHG

6%&&& 

&+$37(5²&+$1*(2)2&&83$1&<

WKH XWLOL]DWLRQ RI WKH JHQHUDO SURYLVLRQV RI WKH ™ 7KLV VHFWLRQ FRQWDLQV SURYLVLRQV WKDW DOORZ D
FRGH ZRXOG QRW DGHTXDWHO\ GHDO ZLWK WKH FKDQJH RI RFFXSDQF\ FODVVLILFDWLRQ ZLWKLQ DQ
VSHFLILFFRQVLGHUDWLRQVIRUOLIHVDIHW\DQGKHDOWK H[LVWLQJEXLOGLQJDVGHILQHGLQ6%&6HFWLRQ
VDIHW\HQYLVLRQHGDVQHFHVVDU\LQWKHVSHFLILF EDVHGRQZKHWKHUWKHSURSRVHGFKDQJH
SURYLVLRQV RI WKH 6%&  IRU WKH SOXPELQJ RI RFFXSDQF\ LV VHSDUDWHG IURP DGMDFHQW
IDFLOLWLHVLQD*URXS, RFFXSDQF\7KHUHIRUH VSDFHVZLWKILUHEDUULHUVDVUHTXLUHGLQWKH6%&
WKHGHVLJQHUPXVWVLPSO\IROORZWKHSURYLVLRQV  &RQGLWLRQV WR DOORZ WKDW FKDQJH RI
RIWKH6%&DVLIWKHFRQVWUXFWLRQZHUHQHZ RFFXSDQF\FODVVLILFDWLRQUHTXLUHDUHYLHZRIWKH
H[LVWLQJ EXLOGLQJ RU DUHD RI WKH SURSRVHG
FKDQJH RI RFFXSDQF\ WR EH FRQGXFWHG WR
6(&7,2127+(5 GHWHUPLQHFRPSOLDQFHZLWKWKHUHTXLUHPHQWVRI
&KDSWHU  7KLV HVVHQWLDOO\ WULJJHUV D UHYLHZ
5(48,5(0(176 DJDLQVWWKHUHTXLUHPHQWVRI&KDSWHUVDQG
 /LJKW DQG YHQWLODWLRQ  /LJKW DQG  DQG 6HFWLRQV  WKURXJK  $OO
YHQWLODWLRQVKDOO FRPSO\ ZLWK WKH UHTXLUHPHQWVRI GHILFLHQFLHV GLVFORVHG E\ WKH UHYLHZ DUH
WKH6%&IRUWKHQHZRFFXSDQF\ UHTXLUHGWREHEURXJKWLQWRFRPSOLDQFHZLWKWKH
SURYLVLRQVRIWKHFRGH'HVLJQDQGGHWDLORIWKH
™ 0DQ\ FKDQJHV RI RFFXSDQF\ FRXOG OHDG WR FRUUHFWLYH FRQVWUXFWLRQ PXVW EH LQFRUSRUDWHG
FKDQJHVLQWKHRFFXSDQWORDGRIWKHEXLOGLQJ$Q LQWR WKH VFRSH RI ZRUN DQG LGHQWLILHG LQ WKH
LQFUHDVH LQ WKH RFFXSDQW ORDG FRXOG PHDQ DQ FRQVWUXFWLRQGRFXPHQWV7KHEDVLFSKLORVRSK\
LQFUHDVH LQ QHHGHG OLJKWLQJ RU YHQWLODWLRQ RIWKHFRGHFRQWLQXHVWREHWKDWDVWKHOHYHORI
7KHUHIRUH WKH UHTXLUHPHQWV RI WKH 6%&  DOWHUDWLRQDFWLYLW\LQFUHDVHVLQVFRSHRUDUHDRI
DSSOLFDEOH WR QHZ FRQVWUXFWLRQ DUH DSSOLHG WR WKH EXLOGLQJ WKH OHYHO RI FRPSOLDQFH ZLWK QHZ
OLJKWDQGYHQWLODWLRQ FRQVWUXFWLRQFRGHUHTXLUHPHQWVDOVRLQFUHDVHV
6(&7,21&+$1*(2)  &KDQJH RI RFFXSDQF\
2&&83$1&<&/$66,),&$7,21 FODVVLILFDWLRQ ZLWKRXW VHSDUDWLRQ  :KHUH D
SRUWLRQRIDQH[LVWLQJEXLOGLQJLVFKDQJHGWRDQHZ
 *HQHUDO  7KH SURYLVLRQV RI WKLV VHFWLRQ
RFFXSDQF\FODVVLILFDWLRQRUZKHUHWKHUHLVDFKDQJH
VKDOO DSSO\ WR EXLOGLQJV RU SRUWLRQV WKHUHRI
RI RFFXSDQF\ ZLWKLQ D VSDFH ZKHUH WKHUH LV D
XQGHUJRLQJ D FKDQJH RI RFFXSDQF\ FODVVLILFDWLRQ
GLIIHUHQW ILUH SURWHFWLRQ V\VWHP WKUHVKROG
7KLVLQFOXGHVDFKDQJHRIRFFXSDQF\FODVVLILFDWLRQ
UHTXLUHPHQW LQ &KDSWHU  RI 6%&  DQG WKDW
ZLWKLQ D JURXS DV ZHOO DV D FKDQJH RI RFFXSDQF\
SRUWLRQLVQRWVHSDUDWHGIURPWKHUHPDLQGHURIWKH
FODVVLILFDWLRQIURPRQHJURXSWRDGLIIHUHQWJURXSRU
EXLOGLQJ ZLWKILUHEDUULHUVKDYLQJ D ILUHUHVLVWDQFH
ZKHUHWKHUHLVDFKDQJHRIRFFXSDQF\ZLWKLQDVSDFH
UDWLQJDVUHTXLUHGLQWKH6%&IRUWKHVHSDUDWH
ZKHUH WKHUH LV D GLIIHUHQW ILUH SURWHFWLRQ V\VWHP
RFFXSDQF\WKHHQWLUHEXLOGLQJVKDOOFRPSO\ZLWKDOO
WKUHVKROG UHTXLUHPHQW LQ &KDSWHU  RI 6%& 
RIWKHUHTXLUHPHQWVRI&KDSWHUDSSOLHGWKURXJKRXW
6XFK EXLOGLQJV VKDOO DOVR FRPSO\ ZLWK 6HFWLRQV
WKH EXLOGLQJ IRU WKH PRVW UHVWULFWLYH RFFXSDQF\
 WKURXJK  7KH DSSOLFDWLRQ RI
FODVVLILFDWLRQ LQ WKH EXLOGLQJ DQG ZLWK WKH
UHTXLUHPHQWVIRUWKHFKDQJHRIRFFXSDQF\VKDOOEH
UHTXLUHPHQWVRIWKLVFKDSWHU
DVVHWIRUWKLQ6HFWLRQVWKURXJK
$FKDQJHRIRFFXSDQF\DVGHILQHGLQ6HFWLRQ ™ 5HTXLUHPHQWV RI WKLV VXEVHFWLRQ DQG 6HFWLRQ
ZLWKRXW D FRUUHVSRQGLQJ FKDQJH RI RFFXSDQF\  SURYLGH DOWHUQDWLYHV IRU WKH
FODVVLILFDWLRQVKDOOFRPSO\ZLWK6HFWLRQ HYDOXDWLRQ SURFHVV ZKHUH WKH FKDQJH RI
RFFXSDQF\ RFFXUV LQ RQO\ D SRUWLRQ RI DQ
™ %XLOGLQJVWKDWXQGHUJRDFKDQJHRIRFFXSDQF\ H[LVWLQJ EXLOGLQJ 7KHVH WZR VHFWLRQV
FODVVLILFDWLRQ PXVW PHHW WKH UHTXLUHPHQWV RI LQFRUSRUDWHWZR RIWKH SKLORVRSKLHVIRU PL[HG
6HFWLRQ7KLVZRXOGLQFOXGHD*URXS$ XVH RFFXSDQFLHV IRXQG LQ 6%&  6HFWLRQ
RFFXSDQF\ FKDQJLQJ WR D *URXS $  ,I WKH SRUWLRQ RI WKH EXLOGLQJ WKDW LV
RFFXSDQF\ DV ZHOO DV D *URXS % RFFXSDQF\ XQGHUJRLQJ WKH FKDQJH RI RFFXSDQF\
WKDW FKDQJHV WR D *URXS 0 RFFXSDQF\ FODVVLILFDWLRQ LV QRW VHSDUDWHG IURP WKH
FODVVLILFDWLRQJURXS UHPDLQGHU RI WKH EXLOGLQJ E\ ILUH EDUULHUV WKLV
VHFWLRQDOORZVWKHWZRRUPRUHXVHVWRUHPDLQ
 &RPSOLDQFHZLWK&KDSWHU7KH
XQVHSDUDWHG IURP HDFK RWKHU +RZHYHU WKH
UHTXLUHPHQWV RI &KDSWHU  VKDOO EH DSSOLFDEOH HQWLUH EXLOGLQJ PXVW WKHQ FRPSO\ ZLWK WKH
WKURXJKRXW WKH EXLOGLQJ IRU WKH QHZ RFFXSDQF\ UHTXLUHPHQWV RI &KDSWHU  DQG WKRVH RI WKLV
FODVVLILFDWLRQEDVHGRQWKHVHSDUDWLRQFRQGLWLRQVVHW FKDSWHU IRU WKH PRVW UHVWULFWLYH RFFXSDQF\
IRUWKLQ6HFWLRQVDQG JURXS7KLVDOVRDSSOLHVWRH[FHHGLQJ6%&
&KDSWHU  WKUHVKROGV 7KLV SKLORVRSK\ LV
FRQVLVWHQW ZLWK WKH DSSURDFK PDGH IRU PL[HG

6%&&& 

&+$37(5²&+$1*(2)2&&83$1&<

XVHV QRQVHSDUDWHG DV JLYHQ LQ 6%&  VKDOO EH WKH EDVLV IRU WKH DSSOLFDWLRQ RI 6HFWLRQV
6HFWLRQ  1RWH WKDW WKLV FRXOG UHTXLUH WKURXJK
FRQVWUXFWLRQ DFWLYLW\ LQ H[LVWLQJ RFFXSLHG
VSDFHVRUSRUWLRQVRIWKHEXLOGLQJQRWRWKHUZLVH ™ $OO RI WKH FODVVLILHG RFFXSDQF\ JURXSV ZHUH
LPSDFWHG E\ WKH FKDQJH RI RFFXSDQF\ HYDOXDWHGLQWKUHHDUHDVLQZKLFKWKHGHJUHHRI
FODVVLILFDWLRQ LQKHUHQW KD]DUGV RI DQ RFFXSDQF\ JURXS FDQ
GLIIHU 7KHVH HYDOXDWLRQV ZHUH UHYLHZHG DQG
OLNH UHVXOWV ZHUH JURXSHG DQG DVVLJQHG D
 &KDQJH RI RFFXSDQF\ UHODWLYH UDWLQJ QXPEHU  WKURXJK  RU 
FODVVLILFDWLRQZLWKVHSDUDWLRQ:KHUHDSRUWLRQRI GHSHQGLQJ RQ WKH HOHPHQW EHLQJ HYDOXDWHG
DQH[LVWLQJEXLOGLQJLVFKDQJHGWRDQHZRFFXSDQF\ 7KH ORZHU WKH QXPEHU WKH KLJKHU WKH UHODWLYH
FODVVLILFDWLRQ RU ZKHUH WKHUH LV D FKDQJH RI KD]DUGRIWKHRFFXSDQF\FODVVLILFDWLRQ$VSHFWV
RFFXSDQF\ZLWKLQDVSDFHZKHUHWKHUHLVDGLIIHUHQW RIDEXLOGLQJWKDWZHUHFRQVLGHUHGZHUHILUHDQG
OLIHVDIHW\LQFOXGLQJWKHDELOLW\WRH[LWWKHKHLJKW
ILUH SURWHFWLRQ V\VWHP WKUHVKROG UHTXLUHPHQW LQ
DQGDUHDRIWKHEXLOGLQJDQGWKHQHHGWRSURWHFW
&KDSWHURI6%&DQGWKDWSRUWLRQLVVHSDUDWHG VXUURXQGLQJ EXLOGLQJV IURP ILUH FRQIODJUDWLRQ
IURPWKHUHPDLQGHURIWKHEXLOGLQJZLWKILUHEDUULHUV 2FFXSDQFLHV ZLWK HTXLYDOHQW UHODWLYH KD]DUG
KDYLQJ D ILUHUHVLVWDQFH UDWLQJ DV UHTXLUHG LQ WKH QXPEHUV ZHUH WKHQ JURXSHG WRJHWKHU WR IRUP
6%&  IRU WKH VHSDUDWH RFFXSDQF\ WKDW SRUWLRQ 7DEOHVDQGRI6HFWLRQV
VKDOOFRPSO\ZLWKDOORIWKHUHTXLUHPHQWVRI&KDSWHU WKURXJK7KHVHWDEOHVDUHXVHG
IRUWKHQHZRFFXSDQF\FODVVLILFDWLRQDQGZLWKWKH WR GHWHUPLQH ZKHWKHU D FKDQJH RI RFFXSDQF\
UHTXLUHPHQWVRIWKLVFKDSWHU FODVVLILFDWLRQLVWRDKLJKHUOHVVHURUHTXLYDOHQW
RFFXSDQF\ FODVVLILFDWLRQ LQ UHODWLRQ WR WKH
™ :KHQWKHFKDQJHRIRFFXSDQF\FODVVLILFDWLRQLV UHODWLYHKD]DUGRIWKHXVH
ZKROO\FRQWDLQHGLQDSRUWLRQRIWKHEXLOGLQJWKDW
LV FRPSOHWHO\ VHSDUDWHG IURP WKH RWKHU XVHV  $FFHVVLELOLW\
RFFXS\LQJ WKH EXLOGLQJ E\ ILUH EDUULHUV DV ™ 6HHWKHFRPPHQWDU\WR6HFWLRQ
UHTXLUHGE\6%&7DEOHFRPSOLDQFH
ZLWK WKH UHTXLUHPHQWV RI &KDSWHU  DQG  )LUH SURWHFWLRQV\VWHPV  )LUH SURWHFWLRQ
6HFWLRQVWKURXJKLVRQO\UHTXLUHGIRU V\VWHPV VKDOO EH SURYLGHG LQ DFFRUGDQFH ZLWK
WKDWSRUWLRQRIWKHEXLOGLQJRFFXSLHGE\WKHQHZ 6HFWLRQVDQG
RFFXSDQF\ FODVVLILFDWLRQ 7KLV DOVR DSSOLHV WR
H[FHHGLQJ6%&&KDSWHUWKUHVKROGV7KH ™ )LUH SURWHFWLRQ V\VWHPV PXVW FRPSO\ ZLWK WKH
UHPDLQLQJ SRUWLRQV RI WKH EXLOGLQJ WKDW DUH ILUH SURWHFWLRQ UHTXLUHPHQWV RI 6HFWLRQV
OHJDOO\ RFFXSLHG DUH SHUPLWWHG WR FRQWLQXH DQG
RFFXSDQF\ ZLWKRXW FKDQJH XQWLO DFWLYLWLHV  )LUH VSULQNOHU V\VWHP  :KHUH D
VSHFLILFDOO\FRYHUHGLQWKHFRGHRFFXU
FKDQJHLQRFFXSDQF\FODVVLILFDWLRQRFFXUVRUZKHUH
 )LUH SURWHFWLRQ DQG LQWHULRU WKHUHLVDFKDQJHRIRFFXSDQF\ZLWKLQDVSDFHZKHUH
ILQLVK  7KH SURYLVLRQV RI 6HFWLRQV  DQG WKHUHLVDGLIIHUHQWILUHSURWHFWLRQV\VWHPWKUHVKROG
 IRU ILUH SURWHFWLRQ DQG LQWHULRU ILQLVK UHTXLUHPHQWLQ&KDSWHURI6%&WKDWUHTXLUHV
UHVSHFWLYHO\VKDOODSSO\WRDOOEXLOGLQJVXQGHUJRLQJ DQ DXWRPDWLF ILUH VSULQNOHU V\VWHP WR EH SURYLGHG
DFKDQJHRIRFFXSDQF\FODVVLILFDWLRQ EDVHG RQ WKH QHZ RFFXSDQF\ LQ DFFRUGDQFH ZLWK
&KDSWHU  RI 6%&  VXFK V\VWHP VKDOO EH
™ :KHQ D EXLOGLQJ XQGHUJRHV D FKDQJH RI
RFFXSDQF\FODVVLILFDWLRQLWLVLPSRUWDQWWKDWWKH SURYLGHGWKURXJKRXWWKHDUHDZKHUHWKHFKDQJHRI
LQWHULRU ILQLVKHV DQG ILUH SURWHFWLRQ V\VWHPV RFFXSDQF\RFFXUV
PHHWWKHUHTXLUHPHQWVIRUWKHQHZRFFXSDQF\ ™ 'HSHQGLQJ RQ WKH QHZ RFFXSDQF\
FODVVLILFDWLRQ7KLVLVHVSHFLDOO\WKHFDVHZKHQ FODVVLILFDWLRQ WKH QHHG IRU DQ DXWRPDWLF
WKH SURYLVLRQV IRU WKH QHZ RFFXSDQF\ VSULQNOHU V\VWHP PD\ GHSHQG RQ QRW RQO\ WKH
FODVVLILFDWLRQ DUH PRUH UHVWULFWLYH WKDQ WKH RFFXSDQF\ EXW DOVR WKH RFFXSDQW ORDG IXHO
H[LVWLQJ RFFXSDQF\ FODVVLILFDWLRQ 7KLV VHFWLRQ ORDGKHLJKWDQGDUHDRIWKHEXLOGLQJDVZHOODV
JXDUDQWHHV WKH DSSURSULDWH OHYHO RI SURWHFWLRQ ILUHILJKWLQJ FDSDELOLWLHV 6%&  6HFWLRQ
IRUWKHEXLOGLQJ¶VRFFXSDQWV  DGGUHVVHV DOO RFFXSDQF\ FRQGLWLRQV
 &KDQJH RI RFFXSDQF\ UHTXLULQJDXWRPDWLFVSULQNOHUV\VWHPV6%&
6HFWLRQ  FRQWDLQV WKH LQVWDOODWLRQ
FODVVLILFDWLRQ EDVHG RQ KD]DUG FDWHJRU\  7KH
UHTXLUHPHQWV IRU DOO VSULQNOHU V\VWHPV LQ
UHODWLYH GHJUHH RI KD]DUG EHWZHHQ GLIIHUHQW DGGLWLRQWRWKHUHTXLUHPHQWVRI1)3$1)3$
RFFXSDQF\ FODVVLILFDWLRQV VKDOO EH GHWHUPLQHG LQ 'DQG1)3$57KHVXSHUYLVLRQDQGDODUP
DFFRUGDQFHZLWKWKHFDWHJRULHVVSHFLILHGLQ7DEOHV UHTXLUHPHQWV IRU VSULQNOHU V\VWHPV DUH
  DQG  6XFK D GHWHUPLQDWLRQ FRQWDLQHGLQ6%&6HFWLRQZKHUHDV

6%&&& 

&+$37(5²&+$1*(2)2&&83$1&<

6%&  6HFWLRQ  UHIHUV WR WHVWLQJ DQG VSUHDGDQGVPRNHGHYHORSHGFODVVLILFDWLRQDUH

PDLQWHQDQFH UHTXLUHPHQWV IRU VSULQNOHU GHWHUPLQHG IURP 6%&  7DEOH  DQG
V\VWHPVLQWKH6%& DUHIXUWKHUEDVHGRQ$670(
 )LUHDODUPDQGGHWHFWLRQV\VWHP  0HDQV RI HJUHVV JHQHUDO  +D]DUG
:KHUHDFKDQJHLQRFFXSDQF\FODVVLILFDWLRQRFFXUV FDWHJRULHV LQ UHJDUG WR OLIH VDIHW\ DQG PHDQV RI
RU ZKHUH WKHUHLVDFKDQJH RI RFFXSDQF\ ZLWKLQD HJUHVVVKDOOEHLQDFFRUGDQFHZLWK7DEOH
VSDFH ZKHUH WKHUH LV D GLIIHUHQW ILUH SURWHFWLRQ ™ 7KLVVHFWLRQUHTXLUHVWKDWKD]DUGFDWHJRULHVIRU
V\VWHPWKUHVKROGUHTXLUHPHQWLQ&KDSWHURI6%& PHDQVRIHJUHVVDUHHVWDEOLVKHG,QDFFRUGDQFH
WKDWUHTXLUHVDILUHDODUPDQGGHWHFWLRQV\VWHP ZLWK7DEOH6HHDOVRWKHFRPPHQWDU\WR
WR EH SURYLGHG EDVHG RQ WKH QHZ RFFXSDQF\ LQ 7DEOH
DFFRUGDQFH ZLWK &KDSWHU  RI 6%&  VXFK ™ $V FDQ EH VHHQ WKH PHDQVRIHJUHVV
V\VWHPVKDOOEHSURYLGHGWKURXJKRXWWKHDUHDZKHUH SURYLVLRQVIRUKD]DUGFODVVLILFDWLRQFRQWDLQILYH
WKH FKDQJH RI RFFXSDQF\ RFFXUV ([LVWLQJ DODUP OHYHOV7KHVH OHYHOVDUHHVWDEOLVKHGEDVHG RQ
QRWLILFDWLRQ DSSOLDQFHV VKDOO EH DXWRPDWLFDOO\ 6%&  UHTXLUHPHQWV IRU GLIIHUHQW
DFWLYDWHG WKURXJKRXW WKH EXLOGLQJ :KHUH WKH RFFXSDQFLHV IRU PHDQV RI HJUHVV ILUH
SURWHFWLRQ DQG ILUHUHVLVWDQFHUDWHG
EXLOGLQJLVQRWHTXLSSHGZLWKDILUHDODUPV\VWHP
FRQVWUXFWLRQ
DODUP QRWLILFDWLRQ DSSOLDQFHV VKDOO EH SURYLGHG
WKURXJKRXWWKHDUHDZKHUHWKHFKDQJHRIRFFXSDQF\  0HDQV RI HJUHVV IRU FKDQJH WR
RFFXUVLQDFFRUGDQFHZLWK6HFWLRQRI6%& KLJKHU KD]DUG FDWHJRU\  :KHQ D FKDQJH RI
DVUHTXLUHGIRUQHZFRQVWUXFWLRQ RFFXSDQF\FODVVLILFDWLRQLVPDGHWRDKLJKHUKD]DUG
FDWHJRU\ORZHUQXPEHUDVVKRZQLQ7DEOH
™ )LUH DODUP V\VWHPV ZKLFK W\SLFDOO\ LQFOXGH
PDQXDO ILUH DODUP V\VWHPV DQG DXWRPDWLF ILUH WKH PHDQV RI HJUHVV VKDOO FRPSO\ ZLWK WKH
GHWHFWLRQV\VWHPVDUHUHTXLUHGWREHLQVWDOOHG UHTXLUHPHQWVRI&KDSWHURI6%&
LQDFFRUGDQFHZLWKWKHSURYLVLRQVRI 6%& ([FHSWLRQV
&KDSWHU  DQG 1)3$  )LUH DODUP V\VWHPV
DUHSURYLGHGLQEXLOGLQJVWROLPLWILUHFDVXDOWLHV  6WDLUZD\V VKDOO EH HQFORVHG LQ FRPSOLDQFH
DQGSURSHUW\ORVVHV)LUHDODUPV\VWHPVGRWKLV ZLWK WKH DSSOLFDEOH SURYLVLRQV RI 6HFWLRQ
E\ SURPSWO\ QRWLI\LQJ WKH RFFXSDQWV RI WKH 
EXLOGLQJ RI DQ HPHUJHQF\ FRQGLWLRQ ZKLFK  ([LVWLQJ VWDLUZD\V LQFOXGLQJ KDQGUDLOV DQG
LQFUHDVHV WKH WLPH DYDLODEOH IRU HYDFXDWLRQ JXDUGV FRPSO\LQJ ZLWK WKH UHTXLUHPHQWV RI
6LPLODUO\ZKHQILUHDODUPV\VWHPVDUHUHTXLUHG
&KDSWHUVKDOOEHSHUPLWWHGIRUFRQWLQXHGXVH
WR EH VXSHUYLVHG WKH ILUH GHSDUWPHQW ZLOO EH
SURPSWO\QRWLILHGDQGLWVUHVSRQVHWLPHUHODWLYH
VXEMHFWWRDSSURYDORIWKHEXLOGLQJRIILFLDO
WRWKHRQVHWRIWKHILUHLQFLGHQWZLOOEHUHGXFHG  $Q\ VWDLUZD\ UHSODFLQJ DQ H[LVWLQJ VWDLUZD\
$XWRPDWLF ILUH GHWHFWLRQ V\VWHPV DUH UHTXLUHG ZLWKLQDVSDFHZKHUHWKHSLWFKRUVORSHFDQQRW
XQGHU FHUWDLQ FRQGLWLRQV WR LQFUHDVH WKH EH UHGXFHG EHFDXVH RI H[LVWLQJ FRQVWUXFWLRQ
OLNHOLKRRG WKDW ILUH LV GHWHFWHG DQG RFFXSDQWV VKDOO QRW EH UHTXLUHG WR FRPSO\ ZLWK WKH
DUH DOHUWHG LQ D WLPHO\ PDQQHU 7KH GHWHFWLRQ PD[LPXP ULVHU KHLJKW DQG PLQLPXP WUHDG
V\VWHPLVDV\VWHPRIGHYLFHVDQGDVVRFLDWHG GHSWKUHTXLUHPHQWV
KDUGZDUHWKDWDFWLYDWHVWKHDODUPV\VWHP7KH  ([LVWLQJ FRUULGRU ZDOOV FRQVWUXFWHG RQ ERWK
DXWRPDWLF GHWHFWLQJ GHYLFHV DUH WR EH VPRNH VLGHV RI ZRRG ODWK DQG SODVWHU LQ JRRG
GHWHFWRUV XQOHVV D FRQGLWLRQ H[LVWV PDQGDWLQJ
FRQGLWLRQRUPPWKLFNJ\SVXPZDOOERDUG
WKHXVHRIDGLIIHUHQWW\SHRIGHWHFWRUVHH6%&
6HFWLRQ
VKDOO EH SHUPLWWHG 6XFK ZDOOV VKDOO HLWKHU
WHUPLQDWH DW WKH XQGHUVLGH RI D FHLOLQJ RI
 ,QWHULRU ILQLVK  ,Q DUHDV RI WKH EXLOGLQJ HTXLYDOHQW FRQVWUXFWLRQ RU H[WHQG WR WKH
XQGHUJRLQJWKHFKDQJHRIRFFXSDQF\FODVVLILFDWLRQ XQGHUVLGHRIWKHIORRURUURRIQH[WDERYH
WKHLQWHULRUILQLVKRIZDOOVDQGFHLOLQJVVKDOOFRPSO\  ([LVWLQJ FRUULGRU GRRUZD\V WUDQVRPV DQG
ZLWKWKHUHTXLUHPHQWVRIWKH6%&IRUWKHQHZ RWKHUFRUULGRURSHQLQJVVKDOOFRPSO\ZLWKWKH
RFFXSDQF\FODVVLILFDWLRQ UHTXLUHPHQWVLQ6HFWLRQVDQG
™ 7KHLQWHULRUILQLVKRIFRUULGRUDQGH[LWZDOOVDQG 
FHLOLQJV LQ WKH DUHD ZKHUH WKH FKDQJH RI  ([LVWLQJGHDGHQGFRUULGRUVVKDOOFRPSO\ZLWK
RFFXSDQF\RFFXUVPXVWPHHWWKHIODPHVSUHDG WKHUHTXLUHPHQWVLQ6HFWLRQ
DQG VPRNH GHYHORSPHQW OLPLWDWLRQV DQG  $Q H[LVWLQJ RSHUDEOH ZLQGRZ ZLWK FOHDU
UHTXLUHPHQWV RI WKH 6%&  IRU HDFK QHZ RSHQLQJ DUHD QR OHVV WKDQ  P DQG
RFFXSDQF\ FODVVLILFDWLRQ &RUULGRUV DQG H[LWV PLQLPXP RSHQLQJ KHLJKW DQG ZLGWK RI 
DUH GHILQHG LQ 6%&  6HFWLRQ  )ODPH PP DQG  PP UHVSHFWLYHO\ VKDOO EH

6%&&& 

&+$37(5²&+$1*(2)2&&83$1&<

DFFHSWHGDVDQHPHUJHQF\HVFDSHDQGUHVFXH  (JUHVVFDSDFLW\(JUHVVFDSDFLW\
RSHQLQJ VKDOOPHHWRUH[FHHGWKHRFFXSDQWORDGDVVSHFLILHG
™ 7KH EDVLF SUHPLVH KHUH LV IRU WKH PHDQVRI
LQWKH6%&IRUWKHQHZRFFXSDQF\
HJUHVV UHTXLUHPHQWV WR EH WKH VDPH DV ™ 7KLVSURYLVLRQLVFRQVLVWHQWWKURXJKRXWWKHFRGH
UHTXLUHGIRUQHZFRQVWUXFWLRQZKHQWKHFKDQJH IRU DOO DOWHUDWLRQV DQG FKDQJHV RI RFFXSDQF\
RI RFFXSDQF\ LV WR D KLJKHU ORZHU QXPEHU 5HGXFWLRQ RI HJUHVV FDSDFLW\ LV VWULFWO\
FODVVLILFDWLRQ7KHH[FHSWLRQVUHODWHWRFRPPRQ SURKLELWHGE\6HFWLRQRIWKH6%&
SUREOHP DUHDV ZKHUH LW LV SUDFWLFDO WR IXOO\
FRPSO\ZLWKUHTXLUHPHQWVIRUQHZFRQVWUXFWLRQ  +DQGUDLOV  ([LVWLQJ VWDLUZD\V
([FHSWLRQ  DOORZV WKHVDPH SURYLVLRQIRUWKH VKDOO FRPSO\ ZLWK WKH KDQGUDLO UHTXLUHPHQWV RI
OLPLWHG HQFORVXUHV RI VWDLUZD\V DV DOORZHG IRU 6HFWLRQ  LQ WKH DUHD RI WKH FKDQJH RI
/HYHO  DOWHUDWLRQV ([FHSWLRQ  DOORZV RFFXSDQF\FODVVLILFDWLRQ
KDQGUDLOV DQG JXDUGV WR PHHW WKH OLPLWHG
™ 7KH VSHFLDO SURYLVLRQV RI 6HFWLRQ  IRU
UHTXLUHPHQWVRI&KDSWHU7KHUHDGHUZLOOQRWH
KDQGUDLOV DUH DOORZHG IRU WKLV FDWHJRU\ RI
WKDW &KDSWHU  FRQWDLQV QR VSHFLILF
FKDQJHRIXVHZKLFKLVVLPLODUWRWKDWDOORZHG
UHTXLUHPHQWV IRU JXDUGV DQG KDQGUDLOV
IRU FKDQJH RI RFFXSDQF\ WR D KLJKHU
+RZHYHU LW PXVW EH UHPHPEHUHG WKDW WKH
FODVVLILFDWLRQ LQ ([FHSWLRQ  RI 6HFWLRQ
SURYLVLRQVRI&KDSWHUDOVRDSSO\WR&KDSWHU
 H[FHSW WKDW WKH EXLOGLQJ RIILFLDO¶V
WKHUHIRUHWKHSURYLVLRQVRI6HFWLRQVDQG
VSHFLILF DSSURYDO LV UHTXLUHG LQ 6HFWLRQ
DUHDSSOLFDEOH([FHSWLRQVWKURXJK
7KHSURYLVLRQVRI6HFWLRQERLO
JLYH DOORZDQFHV IRU UHTXLUHPHQWV FRPPRQO\
GRZQ WR D VLPSOH UHTXLUHPHQW IRU D VLQJOH
IRXQG LQ H[LVWLQJ FRQVWUXFWLRQ WKDW PDNH IXOO
KDQGUDLOIRUDOOVWDLUZD\VZLWKDZLGWKOHVVWKDQ
FRPSOLDQFH ZLWK WKH SUHVHQW 6%& 
 P 6WDLUZD\V ZLGHU WKDQ  P UHTXLUH
LPSUDFWLFDO
WZR KDQGUDLOV 7KH GHVLJQ RI WKH KDQGUDLOV LV
 0HDQVRIHJUHVVIRUFKDQJHRIXVH UHJXODWHG E\ WKH DSSOLFDEOH SURYLVLRQV RI WKH
WR HTXDO RU ORZHU KD]DUG FDWHJRU\  :KHQ D 6%&
FKDQJH RI RFFXSDQF\ FODVVLILFDWLRQ LV PDGH WR DQ  *XDUGV  ([LVWLQJ JXDUGV VKDOO
HTXDORUOHVVHUKD]DUGFDWHJRU\KLJKHUQXPEHUDV FRPSO\ZLWKWKHUHTXLUHPHQWVLQ6HFWLRQLQ
VKRZQ LQ 7DEOH  H[LVWLQJ HOHPHQWV RI WKH WKHDUHDRIWKHFKDQJHRIRFFXSDQF\FODVVLILFDWLRQ
PHDQVRIHJUHVVVKDOOFRPSO\ZLWKWKHUHTXLUHPHQWV
RI6HFWLRQIRUWKHQHZRFFXSDQF\FODVVLILFDWLRQ ™ 7KH SURYLVLRQV RI 6HFWLRQ  DSSO\ WR
1HZO\ FRQVWUXFWHG RU FRQILJXUHG PHDQV RI HJUHVV JXDUGV IRU FKDQJHV RI RFFXSDQF\ LQ WKLV
FDWHJRU\7KHSURYLVLRQVDUHWKHVDPHDVWKDW
VKDOOFRPSO\ZLWKWKHUHTXLUHPHQWVRI&KDSWHU
RI WKH 6%&  KRZHYHU JXDUGV DUH RQO\
RI6%& UHTXLUHG WR FRPSO\ ZLWK 6HFWLRQ  LQ WKH
([FHSWLRQ  $Q\ VWDLUZD\ UHSODFLQJ DQ H[LVWLQJ DUHDRIWKHFKDQJHRIRFFXSDQF\
VWDLUZD\ ZLWKLQ D VSDFH ZKHUH WKH SLWFK RU VORSH  +HLJKWVDQGDUHDV+D]DUGFDWHJRULHVLQ
FDQQRWEHUHGXFHGEHFDXVHRIH[LVWLQJFRQVWUXFWLRQ UHJDUGWRKHLJKWDQGDUHDVKDOOEHLQDFFRUGDQFHZLWK
VKDOOQRWEHUHTXLUHGWRFRPSO\ZLWKWKHPD[LPXP 7DEOH
ULVHUKHLJKWDQGPLQLPXPWUHDGGHSWKUHTXLUHPHQWV
™ 7KLVVHFWLRQUHTXLUHVWKDWKD]DUGFDWHJRULHVIRU
™ :KHUHWKHFKDQJH RIRFFXSDQF\LVWRDORZHU EXLOGLQJ KHLJKWV DQG DUHDV DUH HVWDEOLVKHG LQ
KD]DUG FDWHJRU\ KLJKHU QXPEHU WKH FRGH DFFRUGDQFH ZLWK 7DEOH  6HH DOVR WKH
DOORZV IRU WKH PRGLILFDWLRQV WR WKH PHDQV RI FRPPHQWDU\WR7DEOH
HJUHVV SURYLGHG IRU /HYHO  DOWHUDWLRQV LQ ™ 7KH SURYLVLRQV IRU KD]DUG FDWHJRULHV DQG
&KDSWHU  VHH FRPPHQWDU\ 6HFWLRQ  UHTXLUHPHQWV UHODWHG WR FKDQJH RI RFFXSDQF\
'HWDLOHGUHTXLUHPHQWVDUHDFWXDOO\SURYLGHGLQ FODVVLILFDWLRQ IRU KHLJKW DQG DUHDV DUH
6HFWLRQ  ZKLFK DUH DSSOLFDEOH WR /HYHO  FRQVLGHUDEO\VLPSOHUDQGPRUHVWUDLJKWIRUZDUG
DOWHUDWLRQV LQ &KDSWHU  DV ZHOO 6HFWLRQ  WKDQWKHOLIHVDIHW\DQGH[LWVKD]DUGFDWHJRU\
JLYHVDGGLWLRQDOUHTXLUHPHQWVUHJDUGLQJPHDQV (VVHQWLDOO\ WKH FKDQJH WR D KLJKHU KD]DUG
RIHJUHVVOLJKWLQJDQGH[LWVLJQVUHTXLULQJWKHVH FDWHJRU\ UHTXLUHV FRPSOLDQFH ZLWK KHLJKW DQG
WREHLQVWDOOHGLQDFFRUGDQFHZLWKWKH6%& DUHD OLPLWDWLRQV IRU QHZ FRQVWUXFWLRQ DV JLYHQ
7KH H[FHSWLRQ GHDOV ZLWK D SUDFWLFDO SUREOHP E\WKH6%&DQGWKHFKDQJHWRDQHTXDORU
FRPPRQLQH[LVWLQJEXLOGLQJVZKHUHWKHVSDFH OHVVHUKD]DUGFDWHJRU\DOORZVIRUWKHKHLJKWDQG
SURYLGHGIRUWKHVWDLUZD\FDQQRWDFFRPPRGDWH DUHD RI WKH H[LVWLQJ EXLOGLQJ WR EH GHHPHG
WKHVKDOORZHUSLWFKRIVWHSVUHTXLUHGLQWKH6%& DFFHSWDEOH


6%&&& 

&+$37(5²&+$1*(2)2&&83$1&<

™ 7DEOHJURXSVWKHUHODWLYHKD]DUGVEDVHG  )LUH ZDOO DOWHUQDWLYH  ,Q RWKHU

RQ DOORZDEOH KHLJKWV DQG DUHDV JLYHQ E\ WKH WKDQ *URXSV + ) DQG 6 ILUH EDUULHUV DQG
6%& KRUL]RQWDO DVVHPEOLHV FRQVWUXFWHG LQ DFFRUGDQFH
 +HLJKW DQG DUHD IRU FKDQJH WR ZLWK 6HFWLRQV  DQG  UHVSHFWLYHO\ RI 6%&
KLJKHU KD]DUG FDWHJRU\  :KHQ D FKDQJH RI VKDOOEHSHUPLWWHGWREHXVHGLQOLHXRIILUHZDOOV
RFFXSDQF\FODVVLILFDWLRQLVPDGHWRDKLJKHUKD]DUG WRVXEGLYLGHWKHEXLOGLQJLQWRVHSDUDWHEXLOGLQJVIRU
FDWHJRU\ DV VKRZQ LQ 7DEOH  KHLJKWV DQG WKHSXUSRVHRIFRPSO\LQJZLWKWKHDUHDOLPLWDWLRQV
DUHDVRIEXLOGLQJVDQGVWUXFWXUHVVKDOOFRPSO\ZLWK UHTXLUHG IRU WKH QHZ RFFXSDQF\ ZKHUH DOO RI WKH
WKHUHTXLUHPHQWVRI&KDSWHURI 6%&IRUWKH IROORZLQJFRQGLWLRQVDUHPHW
QHZRFFXSDQF\FODVVLILFDWLRQ 
 7KH EXLOGLQJV DUH SURWHFWHG WKURXJKRXW ZLWK
([FHSWLRQ)RUKLJKULVHEXLOGLQJVFRQVWUXFWHGLQ DQDXWRPDWLFVSULQNOHUV\VWHPLQDFFRUGDQFH
FRPSOLDQFH ZLWK D SUHYLRXVO\ LVVXHG SHUPLW WKH ZLWK6HFWLRQRI6%&
W\SHRIFRQVWUXFWLRQUHGXFWLRQVSHFLILHGLQ6HFWLRQ  7KH PD[LPXP DOORZDEOH DUHD EHWZHHQ ILUH
RI6%&LVSHUPLWWHG7KLVVKDOOLQFOXGH EDUULHUV KRUL]RQWDO DVVHPEOLHV RU DQ\
WKHUHGXFWLRQIRUFROXPQV7KHKLJKULVHEXLOGLQJLV FRPELQDWLRQ WKHUHRI VKDOO QRW H[FHHG WKH
UHTXLUHG WR EH HTXLSSHG WKURXJKRXW ZLWK DQ PD[LPXP DOORZDEOH DUHD GHWHUPLQHG LQ
DXWRPDWLF VSULQNOHU V\VWHP LQ DFFRUGDQFH ZLWK DFFRUGDQFH ZLWK &KDSWHU  RI 6%& 
6HFWLRQRI6%& ZLWKRXWDQLQFUHDVHDOORZHGIRUDQDXWRPDWLF
™ $VVWDWHGLQ6HFWLRQWKHFKDQJHWRD VSULQNOHUV\VWHP LQ DFFRUGDQFH ZLWK 6HFWLRQ
KLJKHU KD]DUG FDWHJRU\ UHTXLUHV FRPSOLDQFH RI6%&
ZLWK KHLJKW DQG DUHD OLPLWDWLRQV IRU QHZ  7KH ILUHUHVLVWDQFHUDWLQJRI WKH ILUH EDUULHUV
FRQVWUXFWLRQ DV JLYHQ E\ WKH 6%&  ZLWK D DQG KRUL]RQWDO DVVHPEOLHV VKDOO EH QRW OHVV
VLQJOHH[FHSWLRQUHJDUGLQJ*URXS(RQHVWRU\ WKDQWKDWVSHFLILHGIRUILUHZDOOVLQ7DEOH
EXLOGLQJV7KLVDSSURDFKLVFRQVLVWHQWZLWKWKH RI6%&
SUHPLVHWKDWDQ\DOWHUDWLRQWRDEXLOGLQJFDQQRW
LQFUHDVH WKH KD]DUG LQ WKH EXLOGLQJ %\ ([FHSWLRQ:KHUHKRUL]RQWDODVVHPEOLHVDUHXVHG
GHILQLWLRQ XWLOL]DWLRQ RI D EXLOGLQJ IRU D XVH LQ WROLPLWWKHPD[LPXPDOORZDEOHDUHDWKHUHTXLUHG
ZKLFK WKH KHLJKW RU DUHD IRU WKH RFFXSDQF\ LV ILUH UHVLVWDQFH UDWLQJ RI WKH KRUL]RQWDO DVVHPEOLHV
H[FHHGHG LV DQ LQFUHDVH LQ WKH KD]DUG RI WKH VKDOOEHSHUPLWWHGWREHUHGXFHGE\KRXUSURYLGHG
EXLOGLQJ
WKHKHLJKWDQGQXPEHURIVWRULHVLQFUHDVHVDOORZHG
™ 7KH H[FHSWLRQ DGGUHVVHV WKH UHYLVLRQ WR WKH
6%&WKDWSURKLELWHGWKHUHGXFWLRQRIUDWLQJV
IRUDQDXWRPDWLFVSULQNOHUV\VWHPE\6HFWLRQRI
RQFROXPQVIRUKLJKULVHEXLOGLQJVIRU7\SH,$ 6%&DUHQRWXVHGIRUWKHEXLOGLQJV
FRQVWUXFWLRQ XQGHU  P DQG JHQHUDO ™ 7KLVVHFWLRQDOORZVWKHXVHRIILUHEDUULHUVDQG
UHGXFWLRQVIRU7\SH,$FRQVWUXFWLRQRYHUP UDWHGKRUL]RQWDODVVHPEOLHVWRFUHDWHVHSDUDWH
LQ EXLOGLQJ KHLJKW 7KLV FUHDWHG D SUREOHP IRU EXLOGLQJVIRUWKHSXUSRVHRIDSSO\LQJWKHKHLJKW
H[LVWLQJ EXLOGLQJV WKDW KDG SUHYLRXVO\ DSSOLHG DQGDUHDUHTXLUHPHQWV7KLVDOORZDQFHFRPHV
WKHVH UHGXFWLRQV :LWKRXW WKLV H[FHSWLRQ WKH ZLWKVHYHUDOFULWHULDVXFKDVUHTXLULQJDQ1)3$
FRGH ZRXOG QRW UHFRJQL]H WKRVH SUHYLRXVO\ VSULQNOHUV\VWHPUDWLQJVLQDFFRUGDQFHZLWK
FRPSO\LQJEXLOGLQJV)RUH[DPSOHDFKDQJHRI WKHILUHZDOOUDWLQJVRI6%&7DEOHDQG
RFFXSDQF\IURPDQRIILFHWRDUHWDLODUHDZRXOG DOLPLWDWLRQRQWKHDOORZDEOHDUHDWKDWGRHVQRW
UHTXLUH D FRPSOHWH XSJUDGH LQ WKH ILUH LQFOXGH D VSULQNOHU LQFUHDVH 7KLV VHFWLRQ
UHVLVWDQFHUDWLQJIRUDOOWKHFROXPQVLQWKHHQWLUH SURYLGHV QHFHVVDU\ IOH[LELOLW\ LQ PHHWLQJ WKH
EXLOGLQJ7KLVLVH[FHVVLYHIRUVPDOOFKDQJHVLQ KHLJKW DQG DUHD UHTXLUHPHQWV LQ H[LVWLQJ
RFFXSDQF\ DQG RIWHQ LPSUDFWLFDO 7KH EXLOGLQJV VXFK DV ROG PLOO FRPSOH[HV ZKHUH
H[FHSWLRQ PDNHV LW FOHDU WKDW LI WKH EXLOGLQJ LV DFKLHYLQJWKHKHLJKWDQGDUHDOLPLWDWLRQVLVYHU\
SURWHFWHG WKURXJKRXW ZLWK DQ DXWRPDWLF ILUH GLIILFXOW
VSULQNOHU V\VWHP GHVLJQHG WR PHHW 1)3$ 
QRW5WKHQWKHFROXPQUDWLQJVFDQEHZKDW  +HLJKW DQG DUHD IRU FKDQJH WR
ZDV DOORZHG SULRU WR WKDW UHYLVLRQ WR WKH 6%& HTXDORUOHVVHUKD]DUGFDWHJRU\:KHQDFKDQJH
 $GGLWLRQV ZLOO QHHG WR PHHW WKH RIRFFXSDQF\FODVVLILFDWLRQLVPDGHWRDQHTXDORU
UHTXLUHPHQWV IRU QHZ FRQVWUXFWLRQ EXW D OHVVHU KD]DUG FDWHJRU\ DV VKRZQ LQ 7DEOH 
FKDQJH LQ RFFXSDQF\ RI WKLV W\SH VKRXOG QRW WKHKHLJKWDQGDUHDRIWKHH[LVWLQJEXLOGLQJVKDOOEH
UHTXLUH WKH HQWLUH EXLOGLQJ WR IDOO LQWR GHHPHGDFFHSWDEOH
QRQFRPSOLDQFH ZKHQ LW ZDV IXOO\ FRPSOLDQW
ZKHQLWZDVEXLOW ™ :KHQWKHFKDQJHRIRFFXSDQF\LVWRDQHTXDO
RU OHVVHU KD]DUG WKH KHLJKW DQG DUHD RI WKH

6%&&& 

&+$37(5²&+$1*(2)2&&83$1&<

H[LVWLQJ EXLOGLQJ LV QRW DW LVVXH 7KLV FDQ IROORZLQJ JURXSV $ DQG $ ZLWK DQ RFFXSDQW
KRZHYHUFUHDWHDQLQWHUHVWLQJVFHQDULRZKHUH ORDGRIOHVVWKDQ%)0RU6
WKHQHZRFFXSDQF\LVKRXVHGLQDIDFLOLW\ZLWKD
KHLJKWRUDUHDWKDWZRXOGH[FHHGWKDWDOORZDEOH ™ &RQVLVWHQWZLWKWKHJHQHUDOUXOHWKURXJKRXWWKLV
KHLJKW DQG DUHD IRU QHZ FRQVWUXFWLRQ IRU WKDW FKDSWHU IRU D FKDQJH RI RFFXSDQF\
XVH )RU LQVWDQFH D 7\SH ,,% *URXS 6 FODVVLILFDWLRQ WR D KLJKHU KD]DUG FDWHJRU\ WKH
EXLOGLQJ WKDW ZDV FRQVWUXFWHG WR EH  P H[WHULRU ZDOO UDWLQJ LV UHTXLUHG WR PHHW WKH
FRXOG EH FRQYHUWHG HQWLUHO\ WR DQ 2FFXSDQF\ UDWLQJV FDOOHG IRU E\ WKH 6%&  IRU QHZ
*URXS0HYHQWKRXJKWKHPD[LPXPDOORZDEOH FRQVWUXFWLRQ 7KH H[FHSWLRQ LV VRPHZKDW
DUHDIRUWKH7\SH,,%FRQVWUXFWLRQIRU*URXS0 DFDGHPLF7KHVHRFFXSDQF\FODVVLILFDWLRQVDUH
LVP QHYHUUHTXLUHGWRKDYHDKRXUILUHUHVLVWDQFH
UDWLQJRQH[WHULRUZDOOV
 )LUHEDUULHUV:KHQDFKDQJHRI
RFFXSDQF\FODVVLILFDWLRQLVPDGHWRDKLJKHUKD]DUG  ([WHULRU ZDOO UDWLQJ IRU FKDQJH
FDWHJRU\DVVKRZQLQ7DEOHILUHEDUULHUVLQ RIRFFXSDQF\FODVVLILFDWLRQWRDQHTXDORUOHVVHU
VHSDUDWHG PL[HG XVH EXLOGLQJV VKDOO FRPSO\ ZLWK KD]DUG FDWHJRU\  :KHQ D FKDQJH RI RFFXSDQF\
WKHILUHUHVLVWDQFHUHTXLUHPHQWVRIWKH6%& FODVVLILFDWLRQLVPDGHWRDQHTXDORUOHVVHUKD]DUG
FDWHJRU\ DV VKRZQ LQ 7DEOH  H[LVWLQJ
([FHSWLRQ:KHUHWKHILUHEDUULHUVDUHUHTXLUHGWR H[WHULRU ZDOOV LQFOXGLQJ RSHQLQJV VKDOO EH
KDYHDKRXUILUHUHVLVWDQFHUDWLQJH[LVWLQJZRRG DFFHSWHG
ODWK DQG SODVWHU LQ JRRG FRQGLWLRQ RU H[LVWLQJ 
™ 7KH H[WHULRU ZDOO ILUHUHVLVWDQFH UDWLQJ LV
PPWKLFNJ\SVXPZDOOERDUGVKDOOEHSHUPLWWHG
DOORZHG WR UHPDLQ ZLWKRXW FKDQJH ZKHQ WKH
™ 7KLVSURYLVLRQLVLQDGGLWLRQWRWKHSURYLVLRQVRI FKDQJH RI RFFXSDQF\ FODVVLILFDWLRQ LV WR DQ
6HFWLRQV  DQG  7KLV HTXDORUOHVVHUKD]DUGFDWHJRU\$JDLQWKLVLV
SURYLVLRQ UHTXLUHV ILUH EDUULHUV LQ FRPSOLDQFH LQNHHSLQJZLWKWKHSKLORVRSK\WKDWQRFKDQJH
ZLWKWKH6%&LQDPL[HGXVHEXLOGLQJZKHUH LVQHHGHGZKHQWKHKD]DUGWRWKHEXLOGLQJLVQRW
WKHSURSRVHGFKDQJHRIRFFXSDQF\LVPDGHWR LQFUHDVHG E\ WKH FKDQJH RU DOWHUDWLRQ RI WKH
D KLJKHU KD]DUG FDWHJRU\ 7KH H[FHSWLRQ EXLOGLQJ
UHFRJQL]HVWKHDELOLW\RIH[LVWLQJSODVWHUDQGODWK
FRQVWUXFWLRQWRSURYLGHDKRXUILUHUHVLVWDQFH  2SHQLQJSURWHFWLYHV2SHQLQJVLQ
UDWLQJ H[WHULRUZDOOVVKDOOEHSURWHFWHGDVUHTXLUHGE\WKH
6%&:KHUHRSHQLQJVLQWKHH[WHULRUZDOOVDUH
 ([WHULRU ZDOO ILUHUHVLVWDQFH UDWLQJV UHTXLUHG WR EH SURWHFWHG EHFDXVH RI WKHLU GLVWDQFH
+D]DUG FDWHJRULHV LQ UHJDUG WR ILUHUHVLVWDQFH IURP WKH ORW OLQH WKH VXP RI WKH DUHD RI VXFK
UDWLQJVRIH[WHULRUZDOOVVKDOOEHLQDFFRUGDQFHZLWK RSHQLQJV VKDOO QRW H[FHHG  SHUFHQW RI WKH WRWDO
7DEOH DUHDRIWKHZDOOLQHDFKVWRU\
™ 7KH WKLUG KD]DUG FODVVLILFDWLRQ DUHD LV WKH ([FHSWLRQV
H[SRVXUH RI WKH H[WHULRU ZDOOV UHODWLQJ WR WKH
QHHGWRSURWHFWVXUURXQGLQJEXLOGLQJVIURPILUH  :KHUH WKH 6%&  SHUPLWV RSHQLQJV LQ
FRQIODJUDWLRQ7KLVVHFWLRQUHTXLUHVWKDWKD]DUG H[FHVVRISHUFHQW
FDWHJRULHVIRUILUHH[SRVXUHRIH[WHULRUZDOOVDUH  3URWHFWHG RSHQLQJV VKDOO QRW EH UHTXLUHG LQ
HVWDEOLVKHG LQ DFFRUGDQFH ZLWK 7DEOH  EXLOGLQJVRI*URXS5RFFXSDQF\WKDWGRQRW
6HHDOVRWKHFRPPHQWDU\WR7DEOH H[FHHG WKUHH VWRULHV LQ KHLJKW DQG WKDW DUH
™ 7DEOH  JURXSV WKH XVHV LQ WKH UHODWLYH
ORFDWHGQRWOHVVWKDQPPIURPWKHORWOLQH
KD]DUG OHYHOV EDVHG SULPDULO\ RQ WKH
UHTXLUHPHQWV RI 6HFWLRQ  DV ZHOO DV 6%&  :KHUH H[WHULRU RSHQLQJ SURWHFWLYHV DUH
7DEOH UHTXLUHG DQ DXWRPDWLF VSULQNOHU V\VWHP
WKURXJKRXW PD\ EH VXEVWLWXWHG IRU RSHQLQJ
 ([WHULRU ZDOO UDWLQJ IRU FKDQJH SURWHFWLRQ
RI RFFXSDQF\ FODVVLILFDWLRQ WR D KLJKHU KD]DUG  ([WHULRURSHQLQJSURWHFWLYHVDUHQRWUHTXLUHG
FDWHJRU\  :KHQ D FKDQJH RI RFFXSDQF\ ZKHQWKHFKDQJHRIRFFXSDQF\JURXSLVWRDQ
FODVVLILFDWLRQLVPDGHWRDKLJKHUKD]DUGFDWHJRU\DV HTXDO RU ORZHU KD]DUG FODVVLILFDWLRQ LQ
VKRZQ LQ 7DEOH  H[WHULRU ZDOOV VKDOO KDYH DFFRUGDQFHZLWK7DEOH
ILUH UHVLVWDQFH DQG H[WHULRU RSHQLQJ SURWHFWLYHV DV
UHTXLUHGE\WKH6%& ™ $W ILUVW JODQFH WKLV SURYLVLRQ ZRXOG VHHP WR
FRQWUDGLFW WKH SURYLVLRQ LQ 6HFWLRQ 
([FHSWLRQ$KRXUILUHUHVLVWDQFHUDWLQJVKDOOEH ZKLFKVWDWHVWKDWRSHQLQJSURWHFWLYHVQHHGQRW
DOORZHGZKHUHWKHEXLOGLQJGRHVQRWH[FHHGWKUHH FKDQJH IRU WKH FKDQJH RI RFFXSDQF\ WR DQ
VWRULHV LQ KHLJKW DQG LV FODVVLILHG DV RQH RI WKH HTXDORUOHVVHUKD]DUGFODVVLILFDWLRQ+RZHYHU

6%&&& 

&+$37(5²&+$1*(2)2&&83$1&<

([FHSWLRQ  HOLPLQDWHV WKDW DSSDUHQW VKDOO KDYH DW OHDVW RQH VSULQNOHU KHDG DERYH
FRQWUDGLFWLRQ 6WLOO LW VKRXOG EH UHPHPEHUHG WKHRSHQLQJVRQWKHWHQDQWVLGH7KHVSULQNOHU
WKDW WKLV UHTXLUHPHQW ZRXOG DSSO\ LQ DOO FDVHV V\VWHPVKDOOEHSHUPLWWHGWREHVXSSOLHGIURP
ZKHUHFKDQJHLVWRDKLJKHUKD]DUGFDWHJRU\DV WKHGRPHVWLFZDWHUVXSSO\V\VWHPVSURYLGHG
GHVFULEHGLQ6HFWLRQ7KHVLJQLILFDQFH
WKHV\VWHPLVRIDGHTXDWHSUHVVXUHFDSDFLW\
RI WKLV VHFWLRQ LV WKDW LW LPSRVHV D PD[LPXP
DUHD RI RSHQLQJV WR EH  SHUFHQW RI WKH ZDOO DQG VL]LQJ IRU WKH FRPELQHG GRPHVWLF DQG
DUHDZKHQWKHILUHVHSDUDWLRQGLVWDQFHUHTXLUHV VSULQNOHUUHTXLUHPHQWV
RSHQLQJ SURWHFWLYHV FRQWUDU\ WR WKH  ([LVWLQJ SHQHWUDWLRQV RI VWDLUZD\ HQFORVXUHV
SHUFHQWDJHVJLYHQE\6%&7DEOH VKDOO EH DFFHSWHG LI WKH\ DUH SURWHFWHG LQ
™ ([FHSWLRQ  DOORZV D KLJKHU SHUFHQWDJH ZKHQ DFFRUGDQFHZLWKWKH6%&
WKH VHSDUDWLRQ GLVWDQFH LV VXFK WKDW WKH 6%&
™ 6SHFLILFUHTXLUHPHQWVIRUVWDLUZD\VDUHIRXQGLQ
 ZRXOG RWKHUZLVH DOORZ D JUHDWHU GLVWDQFH
6HFWLRQ  :KHQ WKH FKDQJH RI
WKDQ  SHUFHQW ([FHSWLRQ  UHODWHV WR WKH
RFFXSDQF\ LV WR D KLJKHU KD]DUG FDWHJRU\ DV
VHSDUDWLRQGLVWDQFHVDQGUHTXLUHPHQWVDOORZHG
VKRZQ LQ 7DEOH  FRPSOLDQFH ZLWK WKH
E\ WKH 6DXGL 6%&  ([FHSWLRQ  LV
6%&  LV UHTXLUHG 7KUHH H[FHSWLRQV DUH
FRQVLVWHQW ZLWK DOEHLW PRUH OLEHUDO WKDQ WKH
SURYLGHG ([FHSWLRQV  DQG  SURYLGH
WUDGHRII SURYLGHG IRU DXWRPDWLF VSULQNOHU
HTXLYDOHQFLHV WR WKH UHTXLUHPHQWV IRU DWULXP
V\VWHPVJLYHQE\6%&7DEOH
HQFORVXUHV ([FHSWLRQ  DOORZV H[LVWLQJ
 (QFORVXUHRIYHUWLFDOVKDIWV(QFORVXUHRI SHQHWUDWLRQV LQWR WKH VWDLUZD\ LI WKH\ DUH
YHUWLFDOVKDIWVVKDOOEHLQDFFRUGDQFHZLWK6HFWLRQV SURWHFWHGLQDFFRUGDQFHZLWKWKH6%&
WKURXJK  2WKHU YHUWLFDO VKDIWV  ,QWHULRU
™ 6HFWLRQ  RXWOLQHV WKH UHTXLUHPHQWV IRU YHUWLFDO VKDIWV RWKHU WKDQ VWDLUZD\V LQFOXGLQJ EXW
WKHHQFORVXUHRIYHUWLFDOVKDIWVLQWKHEXLOGLQJ QRWOLPLWHGWRHOHYDWRUKRLVWZD\VDQGVHUYLFHDQG
XWLOLW\VKDIWVVKDOOEHHQFORVHGDVUHTXLUHGE\WKH
 0LQLPXPUHTXLUHPHQWV9HUWLFDO
6%&ZKHQWKHUHLVDFKDQJHRIXVHWRDKLJKHU
VKDIWV VKDOO EH GHVLJQHG WR PHHW WKH 6%& 
KD]DUGFDWHJRU\DVVSHFLILHGLQ7DEOH
UHTXLUHPHQWVIRUDWULXPVRUWKHUHTXLUHPHQWVRIWKLV
VHFWLRQ ([FHSWLRQV
™ 0LQLPXPUHTXLUHPHQWVDUHVHWIRUWKLQ6HFWLRQ  ([LVWLQJKRXULQWHULRUVKDIWHQFORVXUHVVKDOO
 ZKLFK RIIHUV WZR RSWLRQV IRU EHDFFHSWHGZKHUHDKLJKHUUDWLQJLVUHTXLUHG
FRPSOLDQFH)LUVWYHUWLFDOVKDIWVDUHUHTXLUHGWR  9HUWLFDO RSHQLQJV RWKHU WKDQ VWDLUZD\V LQ
EH GHVLJQHG WR PHHW WKH UHTXLUHPHQWV IRU EXLOGLQJVRIRWKHUWKDQ*URXS,RFFXSDQF\DQG
DWULXPVDVSUHVFULEHGLQ6%&6HFWLRQ
FRQQHFWLQJ OHVV WKDQ VL[ VWRULHV VKDOO QRW EH
$V DQ DOWHUQDWLYH YHUWLFDO VKDIWV FDQ FRPSO\
ZLWK WKH UHTXLUHPHQWV FRQWDLQHG LQ WKH UHTXLUHGWREHHQFORVHGLIWKHHQWLUHEXLOGLQJLV
UHPDLQLQJVXEVHFWLRQV SURYLGHG ZLWK DQ DSSURYHG DXWRPDWLF
VSULQNOHUV\VWHP
 6WDLUZD\V  :KHQ D FKDQJH RI
RFFXSDQF\FODVVLILFDWLRQLVPDGHWRDKLJKHUKD]DUG ™ 6HFWLRQ  RXWOLQHV FRPSOLDQFH
UHTXLUHPHQWVIRUDOOLQWHULRUYHUWLFDOVKDIWVRWKHU
FDWHJRU\ DV VKRZQ LQ 7DEOH  LQWHULRU
WKDQ VWDLUZD\V $JDLQ WKHUH DUH PLQLPXP
VWDLUZD\VVKDOOEHHQFORVHGDVUHTXLUHGE\WKH6%& UHTXLUHPHQWV ZKHQ DQ LQFUHDVH LQ WKH KD]DUG
 FDWHJRU\RFFXUV7ZRH[FHSWLRQVDUHSURYLGHG
([FHSWLRQV ([FHSWLRQ  LV WKH VDPH UDWLQJ DOORZHG IRU
DWULXPVDVVWDWHGLQ6HFWLRQRIWKH6%&
 ,Q RWKHU WKDQ *URXS , RFFXSDQFLHV DQ  ([FHSWLRQ  LV XQLTXH WR WKH FRGH DQG
HQFORVXUHVKDOO QRW EH UHTXLUHGIRU RSHQLQJV ZRXOGDOORZILYHVWRULHVWREHFRQQHFWHGZLWKRXW
VHUYLQJ RQO\ RQH DGMDFHQW IORRU DQG WKDW DUH D VKDIW HQFORVXUH ZKHQ WKH EXLOGLQJ LV
QRW FRQQHFWHG ZLWK FRUULGRUV RU VWDLUZD\V VSULQNOHUHGWKURXJKRXW0RVWOLNHO\([FHSWLRQ
VHUYLQJRWKHUIORRUV ZRXOGHQFRXUDJHWKHLQVWDOODWLRQRIDVSULQNOHU
 8QHQFORVHG H[LVWLQJ VWDLUZD\V QHHG QRW EH V\VWHP LQ EXLOGLQJV WKDW ZRXOG QRW KDYH
RWKHUZLVHEHHQUHTXLUHG
HQFORVHGLQDFRQWLQXRXVYHUWLFDOVKDIWLIHDFK
VWRU\LVVHSDUDWHGIURPRWKHUVWRULHVE\KRXU  2SHQLQJV  $OO RSHQLQJV LQWR
ILUHUHVLVWDQFHUDWHGFRQVWUXFWLRQRUDSSURYHG H[LVWLQJYHUWLFDOVKDIWHQFORVXUHVVKDOOEHSURWHFWHG
ZLUHG JODVV VHW LQ VWHHO IUDPHV DQG DOO H[LW E\ILUHDVVHPEOLHVKDYLQJDILUHSURWHFWLRQUDWLQJRI
FRUULGRUV DUH VSULQNOHUHG 7KH RSHQLQJV QRWOHVVWKDQ  KRXUDQG VKDOO EHPDLQWDLQHGVHOI
EHWZHHQWKHFRUULGRUDQGWKHRFFXSDQWVSDFH FORVLQJ RU VKDOO EH DXWRPDWLFFORVLQJE\DFWXDWLRQ

6%&&& 

&+$37(5²&+$1*(2)2&&83$1&<

RIDVPRNHGHWHFWRU$OORWKHURSHQLQJVVKDOOEHILUH DFFHVVLELOLW\LVSHUPLWWHG)RUPRUHLQIRUPDWLRQ
SURWHFWHGLQDQDSSURYHGPDQQHU([LVWLQJIXVLEOH VHHWKHFRPPHQWDU\WR6HFWLRQVDQG
OLQNW\SH DXWRPDWLF GRRUFORVLQJ GHYLFHV VKDOO EH 
SHUPLWWHGLQDOOVKDIWVH[FHSWVWDLUZD\VLIWKHIXVLEOH  &RPSOHWH FKDQJH RI RFFXSDQF\
OLQNUDWLQJGRHVQRWH[FHHGƒ& :KHUH DQ HQWLUH EXLOGLQJ XQGHUJRHV D FKDQJH RI
™ 6HFWLRQ  SUHVFULEHV D PLQLPXP ILUH RFFXSDQF\ LW VKDOO FRPSO\ ZLWK 6HFWLRQ 
SURWHFWLRQUDWLQJRIKRXUIRUDOORSHQLQJVLQWR DQG VKDOO KDYH DOO RI WKH IROORZLQJ DFFHVVLEOH
YHUWLFDOVKDIWHQFORVXUHV$OORSHQLQJVVXFKDV IHDWXUHV
WKRVH FUHDWHG E\ GRRUV DUFKZD\V RU ZLQGRZ 
W\SH RSHQLQJV DUH WR EH VHOIFORVLQJ RU  $WOHDVWRQHDFFHVVLEOHEXLOGLQJHQWUDQFH
DXWRPDWLF FORVLQJ E\ DFWXDWLRQ RI D VPRNH  $W OHDVW RQH DFFHVVLEOH URXWH IURP DQ
GHWHFWRU$Q\RWKHURSHQLQJVDUHUHTXLUHGWREH DFFHVVLEOH EXLOGLQJ HQWUDQFH WR SULPDU\
SURWHFWHGE\DQDSSURYHGPHWKRG7KHXVHRI
IXQFWLRQDUHDV
IXVLEOHOLQNVLVDFFHSWDEOHWREHXVHGWRFRQWURO
WKHFORVLQJRIGRRUVLQDOOYHUWLFDOVKDIWVH[FHSW  6LJQDJHFRPSO\LQJZLWK6HFWLRQRI6%&
IRU VWDLUZD\V 7KLV DFFHSWDQFH LV OLPLWHG WR 
IXVLEOHOLQNVWKDWKDYHDWHPSHUDWXUHUDWLQJQRW  $FFHVVLEOH SDUNLQJ ZKHUH SDUNLQJ LV
H[FHHGLQJƒ& SURYLGHG
 $W OHDVW RQH DFFHVVLEOH SDVVHQJHU ORDGLQJ
 $FFHVVLELOLW\  ([LVWLQJ EXLOGLQJV WKDW ]RQHZKHUHORDGLQJ]RQHVDUHSURYLGHG
XQGHUJR D FKDQJH RI JURXS RU RFFXSDQF\  $W OHDVW RQH DFFHVVLEOH URXWH FRQQHFWLQJ
FODVVLILFDWLRQVKDOOFRPSO\ZLWKWKLVVHFWLRQ DFFHVVLEOH SDUNLQJ DQG DFFHVVLEOH SDVVHQJHU
([FHSWLRQ  7\SH % GZHOOLQJ RU VOHHSLQJ XQLWV ORDGLQJ]RQHVWRDQDFFHVVLEOHHQWUDQFH
UHTXLUHG E\ 6HFWLRQ  RI 6%&  DUH QRW ™ :KHUHLWLVWHFKQLFDOO\LQIHDVLEOHWRFRPSO\ZLWK
UHTXLUHG WR EH SURYLGHG LQ H[LVWLQJ EXLOGLQJV DQG WKHQHZFRQVWUXFWLRQVWDQGDUGVIRUDQ\RIWKHVH
IDFLOLWLHV XQGHUJRLQJ D FKDQJH RI RFFXSDQF\ LQ UHTXLUHPHQWV IRU D FKDQJH RI JURXS RU
FRQMXQFWLRQZLWKOHVVWKDQD/HYHODOWHUDWLRQ RFFXSDQF\ WKH DERYH LWHPV VKDOO FRQIRUP WR
WKH UHTXLUHPHQWV WR WKH PD[LPXP H[WHQW
™ 7KLV VHFWLRQ HVWDEOLVKHV DFFHVVLELOLW\
WHFKQLFDOO\IHDVLEOH
UHTXLUHPHQWVIRUH[LVWLQJEXLOGLQJVWKDWXQGHUJR
D FKDQJH RI RFFXSDQF\ 7KHUH DUH WZR ([FHSWLRQ7KHDFFHVVLEOHIHDWXUHVOLVWHGLQ,WHPV
WKUHVKROGV WR GHWHUPLQH DFFHVVLELOLW\ WKURXJKDUHQRWUHTXLUHGIRUDQDFFHVVLEOHURXWH
UHTXLUHPHQWVSDUWLDOFKDQJHRIRFFXSDQF\DQG WR7\SH%XQLWV
FRPSOHWHFKDQJHRIRFFXSDQF\1RWHWKDWWKHUH
LVDQH[FHSWLRQSURYLGHGWR6HFWLRQWKDW ™ )RUDSURMHFWWKDWLQYROYHVDFRPSOHWHFKDQJH
HVVHQWLDOO\ VWDWHV WKDW RQO\ D FKDQJH RI RIRFFXSDQF\IXOOFRPSOLDQFHZLWKDFFHVVLELOLW\
RFFXSDQF\ ZLWK D /HYHO  DOWHUDWLRQ ZRXOG EH UHTXLUHPHQWV LV H[SHFWHG DQG UHDVRQDEOH
UHTXLUHGWRSURYLGH7\SH%GZHOOLQJXQLWV6HH H[FHSW ZKHUH WHFKQLFDO LQIHDVLELOLW\ FDQ EH
WKH FRPPHQWDU\ WR 6HFWLRQ  IRU PRUH GHPRQVWUDWHG ,I IXOO FRPSOLDQFH LV WHFKQLFDOO\
GLVFXVVLRQ RQ WKH DSSOLFDELOLW\ RI WKH 7\SH % LQIHDVLEOH WKH HOHPHQW PXVW EH PDGH
DFFHVVLEOH XQLWV LQ DFFRUGDQFH ZLWK 6%&  DFFHVVLEOHWRWKHIXOOHVWH[WHQWWKDWLVIHDVLEOH
6HFWLRQ 7KLV LV FRQVLVWHQW ZLWK WKH JHQHUDO DSSURDFK
WKDW KDV DOZD\V EHHQ WDNHQ UHODWLYH WR RWKHU
 3DUWLDO FKDQJH LQ RFFXSDQF\ PDWWHUVUHJXODWHGE\WKHFRGH
:KHUHDSRUWLRQRIWKHEXLOGLQJLVFKDQJHGWRDQHZ ™ ,QDGGLWLRQWRDFFHVVLELOLW\ UHTXLUHPHQWVLQWKH
RFFXSDQF\ FODVVLILFDWLRQ DQ\ DOWHUDWLRQ VKDOO VSDFH DQ DFFHVVLEOH URXWH LV UHTXLUHG WR WKDW
FRPSO\ ZLWK 6HFWLRQV   DQG  DV VSDFH6L[LWHPVWKDWPDNHXSWKDWDFFHVVLEOH
DSSOLFDEOH URXWHDUHOLVWHG7KHLQWHQWLVWRSURYLGHWKHEDUH
PLQLPXP WR JHW SHRSOH IURP D SRLQW RI DUULYDO
™ $FFHVVLELOLW\ UHTXLUHPHQWV IRU SDUWLDO FKDQJHV LQWRWKHEXLOGLQJDQGWRWKHDUHDRIWKHQHZXVH
RI RFFXSDQF\ PXVW FRPSO\ ZLWK WKH 7KLVLVQRWEDVHGRQDQ\VSHFLILFSURYLVLRQVRI
UHTXLUHPHQWV IRU DOWHUDWLRQV LQ 6HFWLRQV  WKH$PHULFDQVZLWK'LVDELOLWLHV$FW$FFHVVLELOLW\
 DQG  DV DSSOLFDEOH 7KHVH VHFWLRQV *XLGHOLQHV$'$$*EXWSDUDOOHOVWKHLQWHQWRI
DSSURDFK WKH DSSOLFDWLRQ RI DFFHVVLELOLW\ WKHUHTXLUHPHQWVIRUWKHUHPRYDORIEDUULHUV,I
SURYLVLRQVWRDIDFLOLW\WKDWLVDOWHUHGE\EURDGO\ WKH DOWHUHG DUHD ZRXOG QRW EH UHTXLUHG WR EH
UHTXLULQJIXOOFRQIRUPDQFHWRQHZFRQVWUXFWLRQ VHUYHG E\ DQ DFFHVVLEOH URXWH LQ QHZ
PHDQLQJ IXOO DFFHVVLELOLW\ LV H[SHFWHG FRQVWUXFWLRQDQDFFHVVLEOHURXWHZRXOGQRWEH
([FHSWLRQV DUH WKHQ SURYLGHG WR LQGLFDWH WKH UHTXLUHG IRU D FKDQJH RI RFFXSDQF\ VHH
FRQGLWLRQV XQGHU ZKLFK OHVV WKDQ IXOO 6HFWLRQ  ,I WKH DUHD XQGHUJRLQJ D

6%&&& 

&+$37(5²&+$1*(2)2&&83$1&<

FKDQJH RI RFFXSDQF\ LV EHLQJ DOWHUHG DQG

FRQWDLQVDSULPDU\IXQFWLRQDUHDWKHDFFHVVLEOH
URXWH SURYLVLRQV LQ 6HFWLRQ  DUH DOVR
DSSOLFDEOH 7KLV ZRXOG QRW RQO\ UHTXLUH DQ
DFFHVVLEOH URXWH WR WKH FKDQJH RI RFFXSDQF\
DUHDEXWZRXOGDOVRLQFOXGHSRVVLEOHXSJUDGHV
WRWRLOHWURRPVDQGGULQNLQJIRXQWDLQVWKDWVHUYH
WKHDUHD6HHWKHFRPPHQWDU\WR6HFWLRQ
IRUDGGLWLRQDOLQIRUPDWLRQ RQWKHH[FHSWLRQV,I
WKH FKDQJH RI RFFXSDQF\ UHVXOWV LQ 7\SH %
GZHOOLQJ XQLWV EHLQJ SURYLGHG WKH H[FHSWLRQ
SHUPLWV WKH EXLOGLQJ WR EH H[HPSW IURP
SURYLGLQJ WKH DGGLWLRQDO DFFHVVLEOH URXWH
UHTXLUHPHQWV OLVWHG LQ WKLV VHFWLRQ 7KLV
DOORZDQFH DGGUHVVHV FRQFHUQV RI VLWH
LPSUDFWLFDOLW\ IRU H[LVWLQJ VWUXFWXUHV 7KLV DOVR
UHLQIRUFHVWKHLQWHQWWKDWWKHLQFOXVLRQRI7\SH
%XQLWVLVQRWPHDQWWRUHTXLUHHOHYDWRUVZKHQ
DOWHUDWLRQV DUH SHUIRUPHG RQ XSSHU IORRUV LQ
QRQHOHYDWRU EXLOGLQJV VHH 6%&  6HFWLRQ



6%&&& 

&+$37(5²&+$1*(2)2&&83$1&<

™ %LEOLRJUDSK\ 
)(0$1(+535HFRPPHQGHG3URYLVLRQVIRU
6HLVPLF 5HJXODWLRQV IRU 1HZ %XLOGLQJV DQG
7KHIROORZLQJUHVRXUFHPDWHULDOVZHUHXVHGLQWKH 2WKHU 6WUXFWXUHV 3DUW  :DVKLQJWRQ '&
SUHSDUDWLRQRIWKHFRPPHQWDU\IRUWKLVFKDSWHU )HGHUDO (PHUJHQF\ 0DQDJHPHQW $JHQF\
RIWKHFRGH  

6%&&& 

&+$37(5²&+$1*(2)2&&83$1&<

7$%/(6$1'),*85(62)&+$37(5

7$%/(
0($162)(*5(66+$=$5'&$7(*25,(6
5(/$7,9(+$=$5' 2&&83$1&<&/$66,),&$7,216
+LJKHVW+D]DUG +
 ,,,
 $(,0555
 %)56
/RZHVW+D]DUG )68

7$%/(
+(,*+76$1'$5($6+$=$5'&$7(*25,(6
5(/$7,9(+$=$5' 2&&83$1&<&/$66,),&$7,216
+LJKHVW+D]DUG +
 $$$$,555
 ()60
/RZHVW+D]DUG %)6$58

7$%/(
(;32685(2)(;7(5,25:$//6+$=$5'&$7(*25,(6
5(/$7,9(+$=$5' 2&&83$1&<&/$66,),&$7,21
+LJKHVW+D]DUG +
 )06
 $%(,5
/RZHVW+D]DUG )68



6%&&& 

&+$37(5²&+$1*(2)2&&83$1&<

























7KLVSDJHOHIWLQWHQWLRQDOO\EODQN

6%&&& 

 &+$37(5²$'',7,216

²$'',7,216

™ 3XUSRVH
™ *HQHUDO&RPPHQWV
™ &KDSWHU  SURYLGHV WKH UHTXLUHPHQWV IRU
™ $Q ³$GGLWLRQ´ LV GHILQHG LQ &KDSWHU  DV ³DQ
DGGLWLRQV ZKLFK FRUUHODWH WR WKH UHTXLUHPHQWV
H[WHQVLRQRULQFUHDVHLQWKHIORRUDUHDQXPEHU
IRUQHZFRQVWUXFWLRQ7KHUHDUHKRZHYHUVRPH
RIVWRULHVRUKHLJKWRIDEXLOGLQJRUVWUXFWXUH´
H[FHSWLRQV WKDW DUH VSHFLILFDOO\ VWDWHG LQ WKLV
&KDSWHUFRQWDLQVWKHPLQLPXPUHTXLUHPHQWV
FKDSWHU
IRU DQ DGGLWLRQ WKDW LV QRW VHSDUDWHG IURP WKH
H[LVWLQJEXLOGLQJE\DILUHZDOO
DGGLWLRQ LV QRW DOORZHG XQOHVV WKH WRWDO WUDYHO
GLVWDQFH LV EURXJKW WR ZLWKLQ WKDW ZKLFK LV
6(&7,21*(1(5$/ UHTXLUHGE\WKHFRGH$QRWKHUH[DPSOHLVWKDW
 6FRSH  $Q DGGLWLRQ WR D EXLOGLQJ RU DQDGGLWLRQWKDWEORFNVDQH[LVWLQJUHTXLUHGH[LW
ZRXOGQRWEHDOORZHG
VWUXFWXUH VKDOO FRPSO\ ZLWK WKH 6DXGL %XLOGLQJ
™ $Q H[LVWLQJ VWUXFWXUH WKDW LV RI D W\SH RI
&RGHV DV DGRSWHG IRU QHZ FRQVWUXFWLRQ ZLWKRXW FRQVWUXFWLRQ WKDW GRHV QRW FRPSO\ ZLWK WKH
UHTXLULQJ WKH H[LVWLQJ EXLOGLQJ RU VWUXFWXUH WR KHLJKWDQGDUHDOLPLWDWLRQVRI6%&6HFWLRQ
FRPSO\ZLWKDQ\UHTXLUHPHQWVRIWKRVHFRGHVRURI  PD\ QRW EH DGGHG WR XQOHVV WKH W\SH RI
WKHVHSURYLVLRQVH[FHSWDVUHTXLUHGE\WKLVFKDSWHU FRQVWUXFWLRQ LV XSJUDGHG RU WKH DOORZDEOH
:KHUHDQDGGLWLRQLPSDFWVWKHH[LVWLQJEXLOGLQJRU EXLOGLQJKHLJKWDQGDUHD,LQFUHDVHGWKURXJKWKH
VWUXFWXUHWKDWSRUWLRQVKDOOFRPSO\ZLWKWKLVFRGH DGGLWLRQRIDVSULQNOHUV\VWHPWKURXJKRXWERWK
WKHH[LVWLQJEXLOGLQJDQGWKHDGGLWLRQDVDOORZHG
™ 7KLVVHFWLRQVWDWHVWKHVFRSHRI&KDSWHUDQG E\&KDSWHURIWKH6%&
LQGLFDWHVWKDWWKHDGGLWLRQEXWQRWWKHH[LVWLQJ
XQDOWHUHG SRUWLRQ RI WKH EXLOGLQJ RU VWUXFWXUH  2WKHUZRUN$Q\UHSDLURUDOWHUDWLRQZRUN
PXVW PHHW WKH UHTXLUHPHQWV RI WKH FXUUHQW ZLWKLQDQH[LVWLQJEXLOGLQJWRZKLFKDQDGGLWLRQLV
HGLWLRQV RI WKH 6DXGL %XLOGLQJ &RGHV $Q EHLQJ PDGH VKDOO FRPSO\ ZLWK WKH DSSOLFDEOH
³$GGLWLRQ´ LV GHILQHG LQ &KDSWHU  DV ³DQ UHTXLUHPHQWVIRUWKHZRUNDVFODVVLILHGLQ&KDSWHU
H[WHQVLRQRULQFUHDVH LQIORRUDUHDQXPEHURI
VWRULHVRUKHLJKWRIDEXLOGLQJRUVWUXFWXUH´ ™ 7KLVVHFWLRQUHTXLUHVWKDWDQ\H[LVWLQJVWUXFWXUH
™ 7KHVFRSHRIWKLVFKDSWHUZRXOGQRWLQFOXGHD WRZKLFKDQDGGLWLRQLVPDGHPXVWFRPSO\ZLWK
VLWXDWLRQ ZKHUH D QHZ EXLOGLQJ LV HUHFWHG WKHSURYLVLRQVRI&KDSWHUIRUWKHW\SHRIZRUN
LPPHGLDWHO\ DGMDFHQW WR DQ H[LVWLQJ EXLOGLQJ SHUIRUPHG DV GHILQHG LQ WKDW FKDSWHU ,Q RWKHU
DQG WKH\ DUH VHSDUDWHG E\ D ILUH ZDOO ZKLFK ZRUGV WKH SURYLVLRQV RI &KDSWHUV    
ZRXOG FUHDWH VHSDUDWH EXLOGLQJV DQG QRW DQ DQGZRXOGDOVRDSSO\GHSHQGLQJRQZKHWKHU
DGGLWLRQ WR WKH H[LVWLQJ VWUXFWXUH 7KH QHZ WKHZRUNLVD/HYHORUDOWHUDWLRQDFKDQJH
EXLOGLQJ PXVW EH GHVLJQHG WR FRPSO\ ZLWK WKH RI RFFXSDQF\ RU D UHQRYDWLRQ WR D KLVWRULF
WHFKQLFDOSURYLVLRQVRIWKH6%&QRWZLWKWKH EXLOGLQJHWF
SURYLVLRQVRIWKLVFKDSWHU 
 &UHDWLRQRUH[WHQVLRQRIQRQFRQIRUPLW\
6(&7,21+(,*+76$1'$5($6
$Q DGGLWLRQ VKDOO QRW FUHDWH RU H[WHQG DQ\
QRQFRQIRUPLW\LQWKHH[LVWLQJEXLOGLQJWRZKLFKWKH  +HLJKW OLPLWDWLRQV  1R DGGLWLRQ VKDOO
DGGLWLRQLVEHLQJPDGHZLWKUHJDUGWRDFFHVVLELOLW\ LQFUHDVHWKHKHLJKWRIDQH[LVWLQJEXLOGLQJEH\RQG
VWUXFWXUDOVWUHQJWKILUHVDIHW\PHDQVRIHJUHVVRU WKDW SHUPLWWHG XQGHU WKH DSSOLFDEOH SURYLVLRQV RI
WKHFDSDFLW\RIPHFKDQLFDOSOXPELQJRUHOHFWULFDO FKDSWHU6%&IRUQHZEXLOGLQJV
V\VWHPV ™ 6HHWKHFRPPHQWDU\WR6HFWLRQ
™ ,I DQ H[LVWLQJ EXLOGLQJ LV QRQFRPSOLDQW LQ DQ\  $UHD OLPLWDWLRQV   1R DGGLWLRQ VKDOO
ZD\WKDWPD\EHDIIHFWHGE\WKHDGGLWLRQRULI
LQFUHDVHWKHDUHDRIDQH[LVWLQJEXLOGLQJEH\RQGWKDW
WKH DGGLWLRQ FDXVHV D QRQFRPSOLDQW VLWXDWLRQ
WKH DGGLWLRQ LV QRW DOORZHG WR EH FRQVWUXFWHG SHUPLWWHGXQGHUWKHDSSOLFDEOHSURYLVLRQVRIFKDSWHU
ZLWKRXW FRUUHFWLRQ RI WKH QRQFRPSOLDQFH )RU 6%&IRUQHZEXLOGLQJVXQOHVVILUHVHSDUDWLRQ
H[DPSOH LI WKH H[LVWLQJ EXLOGLQJ KDV D WUDYHO DVUHTXLUHGE\WKH6%&LVSURYLGHG
GLVWDQFHWKDWLVJUHDWHUWKDQDOORZHGWRDQH[LW
DQG WKH DGGLWLRQ DGGV WR WKDW GLVWDQFH WKH

6%&&& 

&+$37(5²$'',7,216

([FHSWLRQ  ,QILOOLQJ RI IORRU RSHQLQJV DQG QRQ ZLWKWKHQHZFRQVWUXFWLRQUHTXLUHPHQWVERWKLQ

RFFXSLDEOH DSSHQGDJHV VXFK DV HOHYDWRU DQG H[LW WKHDGGLWLRQDQGWKHH[LVWLQJEXLOGLQJ7KHFRGH
VWDLUZD\ VKDIWV VKDOO EH SHUPLWWHG EH\RQG WKDW SURYLGHVQRH[FHSWLRQWRWKHVSULQNOHUWKUHVKROG
SHUPLWWHGE\WKH6%& OLPLWVJLYHQLQ6%&&KDSWHU
™ ([DPSOH$UHVWDXUDQWLVEHLQJLQFUHDVHGIURP
™ 7KH SXUSRVHV RI 6HFWLRQV  DQG   P WR  P ZLWK QR LQWHUYHQLQJ ILUH
DUH WR HVWDEOLVK WKDW ZLWK RQH H[FHSWLRQ WKH EDUULHUV LQ WKH IDFLOLW\ 6%&  6HFWLRQ
KHLJKWDQGDUHDRIDQH[LVWLQJEXLOGLQJSOXVLWV UHTXLUHVVSULQNOHUVIRUWKLV*URXS$
DGGLWLRQPXVWFRPSO\ZLWKWKHUHTXLUHPHQWVIRU RFFXSDQF\ ZKHQ WKH ILUH DUHD LV JUHDWHU WKDQ
DQHZEXLOGLQJRILWVVDPHRFFXSDQF\DQGW\SH  P 7KHUHIRUH ZLWK WKH QHZ DGGLWLRQ WKH
RIFRQVWUXFWLRQLQDFFRUGDQFHZLWK&KDSWHURI WKUHVKROGRIPLVH[FHHGHGDQGVSULQNOHUV
WKH6%& DUHUHTXLUHGWKURXJKRXWWKHEXLOGLQJ
™ $ EXLOGLQJ ZLWK D SURSRVHG DGGLWLRQ LV WR EH ™ 2QH DUHD WKDW LV VRPHZKDW XQFOHDU LV ZKHUH
HYDOXDWHGEDVHGRQWKHW\SHRIFRQVWUXFWLRQRI 6%&&KDSWHUKDVD]HURDUHDWKUHVKROG
WKHH[LVWLQJEXLOGLQJRUWKHDGGLWLRQZKLFKHYHU IRUVSULQNOHUVVXFKDVIRU*URXS5RFFXSDQFLHV
LV WKH ORZHU W\SH :KHQ UHYLHZLQJ IRU ZKHWKHU WKH VSULQNOHUV ZRXOG EH UHTXLUHG
FRPSOLDQFH ZLWK 6%&  7DEOH  VHH WKURXJKRXWWKHDGGLWLRQDVZHOODVWKHH[LVWLQJ
6%&6HFWLRQ EXLOGLQJRUVLPSO\EHOLPLWHGWRWKHDGGLWLRQ
™ &RPPHQWDU\ )LJXUH  VKRZV DQ
H[DPSOHRIWKLVVLWXDWLRQ,IDVSULQNOHUV\VWHP 6(&7,216758&785$/
LVQRWSODQQHGIRUERWKWKHH[LVWLQJEXLOGLQJDQG  &RPSOLDQFHZLWKWKH6%&$GGLWLRQV
WKH DGGLWLRQ WKH SURSRVHG DGGLWLRQ GRHV QRW
WR H[LVWLQJ EXLOGLQJV RU VWUXFWXUHV DUH QHZ
PHHWWKHUHTXLUHPHQWVRI6%&7DEOH
7KHDUHDOLPLWDWLRQLQ6%&7DEOHIRU FRQVWUXFWLRQDQGVKDOOFRPSO\ZLWKWKH6%&
WKH QRQVSULQNOHUHG H[LVWLQJ FRQVWUXFWLRQ 7\SH ™ $Q DGGLWLRQ E\ LWV YHU\ QDWXUH LV QHZ
9% *URXS ) LV  P DQG WKH WRWDO FRQVWUXFWLRQVRWKHDGGLWLRQLWVHOIPXVWFRPSO\
SURSRVHGDUHDLVP7KHDUHDHYDOXDWLRQ ZLWK WKH 6%&  UHTXLUHPHQWV IRU QHZ
LVEDVHGRQ7\SH9%FRQVWUXFWLRQHYHQWKRXJK FRQVWUXFWLRQ
WKHSURSRVHGDGGLWLRQLV7\SH9$FRQVWUXFWLRQ
EHFDXVHWKHDOORZDEOHDUHDLQ6%&7DEOH  $GGLWLRQDO JUDYLW\ ORDGV  ([LVWLQJ
IRU7\SH9%FRQVWUXFWLRQLVOHVVWKDQWKH VWUXFWXUDO HOHPHQWV VXSSRUWLQJ DQ\ DGGLWLRQDO
DOORZDEOH DUHD IRU 7\SH 9$ FRQVWUXFWLRQ 2QH JUDYLW\ORDGVDVDUHVXOWRIDGGLWLRQVVKDOOFRPSO\
ZD\ WR VDWLVI\ WKH UHTXLUHPHQWV RI 6%&  ZLWKWKH6%&
7DEOH  LV WR XSJUDGH WKH W\SH RI
FRQVWUXFWLRQRIWKHH[LVWLQJEXLOGLQJWR7\SH9$ ([FHSWLRQV
ZKLFKKDVDQDOORZDEOHDUHDRIP$QRWKHU  6WUXFWXUDO HOHPHQWV ZKRVH VWUHVV LV QRW
VROXWLRQ LV WR LQVWDOO DQ DXWRPDWLF VSULQNOHU LQFUHDVHGE\PRUHWKDQSHUFHQW
V\VWHPWKDWFRPSOLHVZLWK1)3$WKURXJKRXW
 %XLOGLQJV RI *URXS 5 RFFXSDQF\ ZLWK QR
WKHEXLOGLQJ7KHUHYLVHGDOORZDEOHDUHDRIWKH
EXLOGLQJZRXOGEHPEDVHGRQWKHXVHRI PRUHWKDQILYHGZHOOLQJXQLWVRUVOHHSLQJXQLWV
VSULQNOHUV 7KLV LV PRUH WKDQ WKH SURSRVHG XVHGVROHO\IRUUHVLGHQWLDOSXUSRVHVZKHUHWKH
EXLOGLQJDUHDRIP H[LVWLQJ EXLOGLQJ DQG WKH DGGLWLRQ FRPSO\
™ 7KH H[FHSWLRQ DOORZV XQGHVLUDEOH H[LVWLQJ ZLWKWKHFRQYHQWLRQDOOLJKWIUDPHFRQVWUXFWLRQ
RSHQLQJV LQ IORRUV WKDW DUH QR ORQJHU EHLQJ PHWKRGVRIWKH6%&RUWKHSURYLVLRQVRI
XWLOL]HG WR EH ILOOHG LQ ZLWKRXW UHVXOWLQJ LQ DQ 6%&
LQFUHDVH WR WKH EXLOGLQJ DUHD $GGLWLRQDOO\
DUHDV RI WKH EXLOGLQJ QRW QRUPDOO\ RFFXSLHG ™ 8QOHVV WKH H[LVWLQJ EXLOGLQJ ZDV LQLWLDOO\
VXFK DV H[LW VWDLUV DQG HOHYDWRU VKDIWV ZRXOG GHVLJQHG ZLWK IXWXUH H[SDQVLRQ LQ PLQG LW LV
QRWQHHGWREHFRXQWHGLQWRWKHEXLOGLQJDUHD YHU\OLNHO\WKDWDQDGGLWLRQZLOOLPSRVHORDGVRQ
7KH ORJLF EHLQJ WKDW WKRVH VSDFHV GR QRW VRPH SRUWLRQ RI WKH H[LVWLQJ VWUXFWXUH WKDW
FRQWULEXWHWRWKHILUHKD]DUGLQWKHEXLOGLQJDQG H[FHHG WKH PHPEHU¶V FDSDFLW\ DQG UHTXLUH
VRPHFUHGLWFDQEHJLYHQIRUVXFKVSDFHV UHLQIRUFHPHQWRURWKHUPLWLJDWLRQ,QDQ\HYHQW
ZKHUHDQDGGLWLRQUHVXOWVLQDGGHGJUDYLW\ORDG
 )LUH SURWHFWLRQ V\VWHPV  ([LVWLQJ ILUH VXSSRUWHGE\DQH[LVWLQJVWUXFWXUHWKHDIIHFWHG
DUHDVLQFUHDVHGE\ WKHDGGLWLRQVKDOOFRPSO\ZLWK VWUXFWXUDO FRPSRQHQWV PXVW EH FKHFNHG WR
FKDSWHU6%& YHULI\WKDWWKH\VDWLVI\WKHUHTXLUHPHQWVRIWKH
6%&  IRU D QHZ VWUXFWXUH 9HULILFDWLRQ IRU
™ ,I DQ DGGLWLRQ LQFUHDVHV DQ H[LVWLQJ EXLOGLQJ¶V JUDYLW\ ORDGLQJ LQGLFDWHV FRPSOLDQFH ZLWK WKH
ILUHDUHDRUDUHDVWRDOHYHOWKDWLVUHTXLUHGWR PDMRULW\RI&KDSWHURIWKH6%&H[FHSW
KDYH ILUH SURWHFWLRQ V\VWHPV E\ 6%&  IRUVHLVPLFDQGZLQGORDGV
&KDSWHU  WKHQ WKRVH ILUH DUHDV PXVW FRPSO\

6%&&& 

&+$37(5²$'',7,216

™ 7KHUH DUH WZR H[FHSWLRQV WR IXOO FRPSOLDQFH RU WKH FRQYHQWLRQDO OLJKWIUDPH FRQVWUXFWLRQ
ZLWKWKH6%&2QHH[FHSWLRQDOORZVIRUDQ SURYLVLRQVRIWKH6%&([FHSWLRQSHUPLWV
LQFUHDVHLQJUDYLW\ORDGVDVORQJDVWKHH[LVWLQJ DQDGGLWLRQWKDWLVQRWVWUXFWXUDOO\LQGHSHQGHQW
PHPEHUV DIIHFWHG E\ WKH LQFUHDVHG ORDGV GR ZLWKRXWDOWHUDWLRQWRWKHVHLVPLFIRUFHUHVLVWLQJ
QRW H[SHULHQFH DQ LQFUHDVH LQ VWUHVV RI PRUH V\VWHP RI WKH H[LVWLQJ VWUXFWXUH SURYLGHG WKH
WKDQ  SHUFHQW 7KH RWKHU H[FHSWLRQ SHUPLWV GHPDQGFDSDFLW\ UDWLR LV LQFUHDVHG QR PRUH
VPDOOHU *URXS 5 EXLOGLQJV DQG WKHLU DGGLWLRQV WKDQSHUFHQWLQDQ\VWUXFWXUDOHOHPHQW7KH
WKDW FRPSO\ ZLWK HLWKHU WKH 6%&  RU WKH GHPDQG LV GHWHUPLQHG XVLQJ WKH ORDG
FRQYHQWLRQDO OLJKWIUDPH FRQVWUXFWLRQ FRPELQDWLRQV LQFOXGLQJ ZLQG DQG VHLVPLF
SURYLVLRQVRIWKH6%&7KLVLVDSUHVFULSWLYH HIIHFWV %\ FRQVLGHULQJ WKH GHPDQGFDSDFLW\
DOWHUQDWLYH WR WKH ORDGLQJ SURYLVLRQV DOVR UDWLR DQ\ GHFUHDVH LQ ODWHUDO UHVLVWDQFH LV
SHUPLWWHG IRU QHZ FRQVWUXFWLRQ LQ 6%&  DFFRXQWHG IRU DV ZHOO 7KLV H[FHSWLRQ LV WKH
&KDSWHU  6HH WKH OLPLWDWLRQV RQ WKHVH VDPH DV WKDW DOORZHG IRU DGGLWLRQV LQ 6HFWLRQ
SURYLVLRQV LQ WKH 6%&  RU 6%&  LQWKHSUHVFULSWLYHPHWKRG
&KDSWHU ™ 3UHYLRXVO\ WKLV H[FHSWLRQ ZDV VWRU\ EDVHG
YHUVXV HOHPHQW EDVHG 7KH LQWHQW LV WKDW
 /DWHUDO IRUFHUHVLVWLQJ V\VWHP  7KH HOHPHQWV WULJJHUHG IRU ODWHUDO XSJUDGH E\
ODWHUDOIRUFHUHVLVWLQJV\VWHPRIH[LVWLQJEXLOGLQJV 6HFWLRQRUVKRXOGEHH[HPSW
WR ZKLFK DGGLWLRQV DUH PDGH VKDOO FRPSO\ ZLWK EDVHG RQ WKHLU LQGLYLGXDO GHPDQG FDSDFLW\
VHFWLRQVDQG UDWLRVQRWRQWKHRYHUDOOVWRU\VKHDU$IRFXVRQ
VWRU\VKHDUFDQPLVVFULWLFDOLQGLYLGXDOHOHPHQWV
([FHSWLRQV LQYHUWLFDODGGLWLRQVDQGFDQEHGLIILFXOWWRGHILQH
 %XLOGLQJV RI *URXS 5 RFFXSDQF\ ZLWK QR LQWKHFDVHRIKRUL]RQWDODGGLWLRQV7KH6($2&
PRUHWKDQILYHGZHOOLQJRUVOHHSLQJXQLWVXVHG %OXH %RRN DQG WKH 8QLIRUP %XLOGLQJ &RGH
VROHO\ IRU UHVLGHQWLDO SXUSRVHV ZKHUH WKH GHILQH ³6WRU\ VKHDU´ DV ³WKH VXPPDWLRQ RI
GHVLJQ ODWHUDO IRUFHV DERYH WKH VWRU\ XQGHU
H[LVWLQJ EXLOGLQJ DQG WKH DGGLWLRQ FRPSO\
FRQVLGHUDWLRQ´
ZLWK WKH FRQYHQWLRQDO OLJKWIUDPH
FRQVWUXFWLRQPHWKRGVRIWKH6%&RUWKH  9HUWLFDODGGLWLRQ$Q\HOHPHQWRI
SURYLVLRQVRI6%& WKH ODWHUDO IRUFHUHVLVWLQJ V\VWHP RI DQ H[LVWLQJ
 $Q\ H[LVWLQJ ODWHUDO ORDGFDUU\LQJ VWUXFWXUDO EXLOGLQJ VXEMHFWHG WR DQ LQFUHDVH LQ YHUWLFDO RU
HOHPHQW ZKRVH GHPDQGFDSDFLW\ UDWLR ZLWK ODWHUDOORDGVIURPWKHYHUWLFDODGGLWLRQVKDOOFRPSO\
WKH DGGLWLRQ FRQVLGHUHG LV QRW PRUH WKDQ  ZLWKWKH6%&ZLQGSURYLVLRQVDQGWKHDQG6%&
SHUFHQWJUHDWHUWKDQLWVGHPDQGFDSDFLW\UDWLR  OHYHO VHLVPLF IRUFHV DQG LQ DFFRUGDQFH ZLWK
ZLWKWKHDGGLWLRQLJQRUHGVKDOOEHSHUPLWWHGWR VHFWLRQ
UHPDLQ XQDOWHUHG )RU SXUSRVHV RI WKLV ™ :KHUHWKHDGGLWLRQRIDVWRU\RUDQLQFUHDVHLQ
H[FHSWLRQ FRPSDULVRQV RI GHPDQGFDSDFLW\ KHLJKWLPSRVHVDGGLWLRQDOORDGVHLWKHUYHUWLFDO
UDWLRVDQGFDOFXODWLRQRIGHVLJQODWHUDOORDGV RU ODWHUDO RQ SRUWLRQV RI WKH H[LVWLQJ ODWHUDO
IRUFHV DQG FDSDFLWLHV VKDOO DFFRXQW IRU WKH IRUFHUHVLVWLQJ V\VWHP WKLV VHFWLRQ UHTXLUHV
FXPXODWLYHHIIHFWVRIDGGLWLRQVDQGDOWHUDWLRQV WKDW WKRVH PHPEHUV PHHW WZR VSHFLILF ODWHUDO
VLQFH RULJLQDO FRQVWUXFWLRQ )RU SXUSRVHV RI ORDGUHTXLUHPHQWVWKHZLQGORDGUHTXLUHPHQWV
FDOFXODWLQJ GHPDQG FDSDFLW\ UDWLRV WKH RIWKH6%&DQGWKH6%&OHYHOVHLVPLF
GHPDQG VKDOO FRQVLGHU DSSOLFDEOH ORDG SURYLVLRQV DV VSHFLILHG LQ 6HFWLRQ 
FRPELQDWLRQV LQYROYLQJ 6%&  OHYHO 6HFWLRQ  SURYLGHV VFRSLQJ ODQJXDJH
IRUXVLQJWKH6%&DQG$6&(IRUVHLVPLF
VHLVPLFIRUFHVDQGLQDFFRUGDQFHZLWKVHFWLRQ
HYDOXDWLRQ DQG GHVLJQ ZKLFK SURYLGHV
 DOWHUQDWLYH RSWLRQV IRU FRPSOLDQFH FRQVLVWHQW
™ $QDGGLWLRQWRDQH[LVWLQJEXLOGLQJUHTXLUHVWKH ZLWKWKHRYHUDOOJRDORIWKHFRGH$Q\HOHPHQW
ODWHUDO IRUFHUHVLVWLQJ V\VWHP WR FRPSO\ ZLWK QRW PHHWLQJ WKHVH SURYLVLRQV UHTXLUHV
6HFWLRQ  LI D VWRU\ LV DGGHG RU WKH UHSODFHPHQWUHLQIRUFHPHQWRURWKHUPHDVXUHV
KHLJKW LV LQFUHDVHG 6HFWLRQ  LI WKH LQ RUGHU WR FRPSO\ 6HH WKH FRPPHQWDU\ WR
DGGLWLRQ LV KRUL]RQWDO VXFK DV DQ H[WHQVLRQ RI 6HFWLRQIRUPRUHLQIRUPDWLRQ
WKHIORRUDUHDRU6HFWLRQLIWKHUHLVD
 +RUL]RQWDO DGGLWLRQ  :KHUH
YROXQWDU\DGGLWLRQRI
™ 7KHUH DUH WZR H[FHSWLRQV WR WKH SUHYLRXVO\
KRUL]RQWDODGGLWLRQVDUHVWUXFWXUDOO\FRQQHFWHGWRDQ
OLVWHG UHTXLUHPHQWV 2QH H[FHSWLRQ SHUPLWV H[LVWLQJ VWUXFWXUH DOO ODWHUDO IRUFHUHVLVWLQJ
VPDOOHU*URXS5EXLOGLQJVZLWKQRWPRUHWKDQ HOHPHQWVRIWKHH[LVWLQJVWUXFWXUHDIIHFWHGE\VXFK
ILYH GZHOOLQJ RU VOHHSLQJ XQLWV DQG WKHLU DGGLWLRQ VKDOO FRPSO\ ZLWK 6%&  ZLQG
DGGLWLRQVWKDWFRPSO\ZLWKHLWKHUWKH6%& SURYLVLRQVDQGWKH6%&OHYHORIVHLVPLFIRUFHV

6%&&& 

&+$37(5²$'',7,216

DQG LQ DFFRUGDQFH ZLWK 6HFWLRQ  RI WKLV IURP WKH HIIHFWV RI VQRZ GULIW DV D UHVXOW RI DQ
FRGH DGGLWLRQVKDOOFRPSO\ZLWKWKH6%&
™ $ KRUL]RQWDO DGGLWLRQ WKDW LV LVRODWHG IURP WKH ([FHSWLRQV
H[LVWLQJ VWUXFWXUH LV VHOIVXSSRUWLQJ DQG
WKHUHIRUH KDV QR LPSDFW RQ WKH H[LVWLQJ  6WUXFWXUDO HOHPHQWV ZKRVH VWUHVV LV QRW
VWUXFWXUH :KHUHWKLV LVQRWWKHFDVHSRUWLRQV LQFUHDVHGE\PRUHWKDQSHUFHQW
RI WKH H[LVWLQJ ODWHUDO IRUFHUHVLVWLQJ V\VWHP  %XLOGLQJV RI *URXS 5 RFFXSDQF\ ZLWK QR
DIIHFWHG E\ WKH DGGLWLRQ DUH UHTXLUHG WR PHHW PRUHWKDQILYHGZHOOLQJXQLWVRUVOHHSLQJXQLWV
WZRVSHFLILFODWHUDOORDGUHTXLUHPHQWVWKHZLQG XVHGVROHO\IRUUHVLGHQWLDOSXUSRVHVZKHUHWKH
ORDGUHTXLUHPHQWVRIWKH6%&DQGWKH6%& H[LVWLQJ EXLOGLQJ DQG WKH DGGLWLRQ FRPSO\
OHYHO VHLVPLF SURYLVLRQV DV VSHFLILHG LQ ZLWKWKHFRQYHQWLRQDOOLJKWIUDPHFRQVWUXFWLRQ
6HFWLRQ  6HFWLRQ  SURYLGHV PHWKRGVRIWKH6%&RUWKHSURYLVLRQVRI
VFRSLQJ ODQJXDJH IRU XVLQJ WKH 6%&  DQG
WKH6%&
$6&(  IRU VHLVPLF HYDOXDWLRQ DQG GHVLJQ
ZKLFK SURYLGHV DOWHUQDWLYH RSWLRQV IRU ™ $QDGGLWLRQZLWKDURRIOHYHOGLIIHUHQWWKDQWKDW
FRPSOLDQFH FRQVLVWHQW ZLWK WKH RYHUDOO JRDO RI RI DQ DGMRLQLQJ H[LVWLQJ URRI QHFHVVLWDWHV WKH
WKH FRGH $Q\ HOHPHQW QRW PHHWLQJ WKHVH FRQVLGHUDWLRQRIWKHSRWHQWLDOIRUGULIWLQJVQRZ
SURYLVLRQVUHTXLUHVUHSODFHPHQWUHLQIRUFHPHQW &RPPHQWDU\ )LJXUH  LOOXVWUDWHV WKLV
RURWKHUPHDVXUHVLQRUGHUWRFRPSO\6HHWKH FRQGLWLRQ ,I WKH DGGLWLRQ LV WKH SRUWLRQ RI WKH
FRPPHQWDU\ WR 6HFWLRQ  IRU PRUH EXLOGLQJ KDYLQJ WKH KLJKHU URRI VLGH $ LQ
LQIRUPDWLRQ &RPPHQWDU\ )LJXUH  WKHQ WKH SRWHQWLDO
™ &RPSOLDQFHZLWKWKHVHLVPLFORDGSURYLVLRQVRI LPSDFWRQWKHH[LVWLQJURRIVWUXFWXUHVLGH%LV
6HFWLRQQHFHVVLWDWHVFRQVLGHUDWLRQRI WKHJUHDWHVW,IWKHDGGLWLRQLVWKHORZHUSRUWLRQ
PDQ\ DVSHFWV RI WKH QHZ DQG H[LVWLQJ RI WKH EXLOGLQJ VLGH % WKHQ WKH LPSDFW RI
FRQVWUXFWLRQ 2QH RI WKHVH LV WKDW LQ ULJLG GULIWLQJVQRZRQWKHH[LVWLQJVWUXFWXUHLVOLPLWHG
GLDSKUDJP VWUXFWXUHV WKH VWRU\ VKHDU LV RQO\ WR WKRVH PHPEHUV LI DQ\ RI WKH H[LVWLQJ
GLVWULEXWHGDFFRUGLQJWRWKHUHODWLYHVWLIIQHVVRI VWUXFWXUH WKDW VXSSRUW WKH QHZ URRI 7KH
WKHYHUWLFDOHOHPHQWVRIWKHODWHUDOIRUFHV\VWHP PDJQLWXGH RI WKH GULIW ORDGLQJ WKDW PXVW EH
UDWKHUWKDQPHUHO\XVLQJWKHWULEXWDU\DUHDDV LQFOXGHGLVDIXQFWLRQRIEXLOGLQJJHRPHWU\$OO
LV SHUPLWWHG IRU IOH[LEOH GLDSKUDJPV 7KLV WKLQJVEHLQJHTXDOWKHODUJHUWKHGLIIHUHQFHLQ
UHTXLUHV FRQVLGHUDWLRQ RI WRUVLRQDO HIIHFWV DV URRIKHLJKWVWKHKLJKHUWKHFRGHUHTXLUHGGULIW
ZHOO DV GLUHFW VKHDU 7KLV LV LOOXVWUDWHG LQ ORDGLQJ
&RPPHQWDU\ )LJXUH  ZKLFK VKRZV D ™ 6%&&KDSWHUUHTXLUHVWKHXVHRI6%&
KRUL]RQWDODGGLWLRQLVOLNHO\WRDIIHFWWKHFHQWHU SURFHGXUHVIRUVQRZGULIWV7KHH[FHSWLRQV
RI PDVV DV ZHOO DV WKH VWUXFWXUH¶V FHQWHU RI LQWKLVVHFWLRQRIWKHFRGHDUHVLPLODUWRWKRVHRI
ULJLGLW\ ,W LV LPSRUWDQW WKHUHIRUH WKDW WKH QHW 6HFWLRQ  DQG FRXOG EH FRQVWUXHG DV
HIIHFWRIWKHUHVXOWLQJWRUVLRQRQWKHFRPELQHG DOUHDG\UHTXLULQJFRPSOLDQFHZLWKDOOWKHVQRZ
VWUXFWXUH EH FRQVLGHUHG 7KLV VHFWLRQ VLPSO\ ORDGSURYLVLRQVRIWKH6%&LQFOXGLQJVQRZ
UHLWHUDWHVZKDWLVDOUHDG\DUHTXLUHGVWHSLQWKH GULIWV)RUJRRGPHDVXUHWKLVVHFWLRQPDNHVLW
VHLVPLF DQDO\VLV RI DQ\ ULJLG GLDSKUDJP FOHDUWKDWWKHLPSDFWRIWKLVFRPPRQO\RFFXUULQJ
VWUXFWXUH FRQGLWLRQ RI H[LVWLQJ HOHPHQWV PXVW EH
FRQVLGHUHG
 9ROXQWDU\DGGLWLRQRIVWUXFWXUDO
HOHPHQWV WR LPSURYH WKH ODWHUDO IRUFHUHVLVWLQJ  )ORRG KD]DUG DUHDV  $GGLWLRQV DQG
V\VWHP9ROXQWDU\DGGLWLRQRIVWUXFWXUDOHOHPHQWV IRXQGDWLRQVLQIORRGKD]DUGDUHDVVKDOOFRPSO\ZLWK
WRLPSURYHWKHODWHUDOIRUFHUHVLVWLQJV\VWHPRIDQ WKHIROORZLQJUHTXLUHPHQWV
H[LVWLQJEXLOGLQJVKDOOFRPSO\ZLWKVHFWLRQ 
 )RU KRUL]RQWDO DGGLWLRQV WKDW DUH VWUXFWXUDOO\
™ 6WULFWO\VSHDNLQJWKHGHILQLWLRQRI³$GGLWLRQ´LQ
6HFWLRQZRXOGQRWLQFOXGHDGGLQJVWUXFWXUDO LQWHUFRQQHFWHGWRWKHH[LVWLQJEXLOGLQJ
HOHPHQWV YROXQWDULO\ LQ RUGHU WR LPSURYH D  ,IWKHDGGLWLRQDQGDOORWKHUSURSRVHGZRUN
EXLOGLQJ¶V UHVLVWDQFH WR ODWHUDO IRUFHV 7KLV LV ZKHQ FRPELQHG FRQVWLWXWH VXEVWDQWLDO
PRUHOLNHO\WREHFRQVLGHUHGDQDOWHUDWLRQ)RU LPSURYHPHQW WKH H[LVWLQJ EXLOGLQJ DQG WKH
JRRG PHDVXUH WKLV VHFWLRQ FURVV UHIHUHQFHV DGGLWLRQ VKDOO FRPSO\ ZLWK 6HFWLRQ  RI
WKH SURYLVLRQ XQGHU DOWHUDWLRQV WKDW DSSO\ WR 6%&  RU 6HFWLRQ 5 RI 6%&  DV
YROXQWDU\XSJUDGHV DSSOLFDEOH
 6QRZGULIWORDGV$Q\VWUXFWXUDOHOHPHQW  ,I WKH DGGLWLRQ FRQVWLWXWHV VXEVWDQWLDO
RIDQH[LVWLQJEXLOGLQJVXEMHFWHGWRDGGLWLRQDOORDGV LPSURYHPHQW WKH H[LVWLQJ EXLOGLQJ DQG WKH

6%&&& 

&+$37(5²$'',7,216

DGGLWLRQ VKDOO FRPSO\ ZLWK 6HFWLRQ  RI IORRGORDGLQJJLYHQLQ6%&7KURXJKXVHRI

6%&RU6HFWLRQ5RI6%& WKHVH SURYLVLRQV FRPPXQLWLHV PHHW D
 )RU KRUL]RQWDO DGGLWLRQV WKDW DUH QRW VLJQLILFDQW SRUWLRQ RI WKH IORRG SODLQ
VWUXFWXUDOO\ LQWHUFRQQHFWHG WR WKH H[LVWLQJ PDQDJHPHQW UHJXODWLRQ UHTXLUHPHQWV
QHFHVVDU\ WR SDUWLFLSDWH LQ WKH 1DWLRQDO )ORRG
EXLOGLQJ
,QVXUDQFH3URJUDP1),3VHHWKHGHILQLWLRQRI
³6XEVWDQWLDO LPSURYHPHQW´ LQ &KDSWHU  7KH
 7KHDGGLWLRQVKDOOFRPSO\ZLWK6HFWLRQ UHTXLUHPHQWVRI6HFWLRQFRUUHODWHWRWKH
RI6%&RU6HFWLRQ5RI )(0$UHTXLUHPHQWVIRUDGGLWLRQVDQGH[LVWLQJ
6%&DVDSSOLFDEOH EXLOGLQJV
 ,I WKH DGGLWLRQ DQG DOO RWKHU SURSRVHG
ZRUN ZKHQ FRPELQHG FRQVWLWXWH 
VXEVWDQWLDO LPSURYHPHQW WKH H[LVWLQJ 6(&7,21602.($/$506,1
EXLOGLQJDQGWKHDGGLWLRQVKDOOFRPSO\ 2&&83$1&<*528365$1',
ZLWK 6HFWLRQ  RI 6%&  RU
6HFWLRQ5RI6%&  6PRNH DODUPV LQ H[LVWLQJ SRUWLRQV RI D
 EXLOGLQJ:KHUHDQDGGLWLRQLVPDGHWRDEXLOGLQJ
 )RUYHUWLFDODGGLWLRQVDQGDOORWKHUSURSRVHG RU VWUXFWXUH RI D *URXS 5 RU , RFFXSDQF\ WKH
ZRUN WKDW ZKHQ FRPELQHG FRQVWLWXWH H[LVWLQJ EXLOGLQJ VKDOO EH SURYLGHG ZLWK VPRNH
VXEVWDQWLDO LPSURYHPHQW WKH H[LVWLQJ DODUPVDVUHTXLUHGE\6HFWLRQRI6%&RU
EXLOGLQJ VKDOO FRPSO\ ZLWK 6HFWLRQ  RI 6HFWLRQ5RI6%&DVDSSOLFDEOH
6%&RU6HFWLRQ5RI6%& ™ 6HFWLRQ  UHTXLUHV WKDW IRU EXLOGLQJV
 )RU D UDLVHG RU H[WHQGHG IRXQGDWLRQ LI WKH FRQWDLQLQJ *URXS 5 DQG , RFFXSDQFLHV WKH
IRXQGDWLRQZRUNDQGDOORWKHUSURSRVHGZRUN H[LVWLQJ EXLOGLQJ DGGHG WR PXVW FRPSO\ ZLWK
ZKHQ FRPELQHG FRQVWLWXWH VXEVWDQWLDO 6HFWLRQ  RI WKH 6%&  RU 6%& 
LPSURYHPHQW WKH H[LVWLQJ EXLOGLQJ VKDOO 6HFWLRQ 5 LI VLQJOH IDPLO\ 1RWH WKDW WKH
FRPSO\ ZLWK 6HFWLRQ  RI 6%&  RU DGGLWLRQ LQ DFFRUGDQFH ZLWK 6HFWLRQ 
ZRXOG QHHG WR FRPSO\ ZLWK WKH SURYLVLRQV LQ
6HFWLRQ5RI6%&DVDSSOLFDEOH
6%&&KDSWHUIRUQHZEXLOGLQJVSHUWDLQLQJ
 )RU D QHZ IRXQGDWLRQ RU UHSODFHPHQW WRVPRNHDODUPV
IRXQGDWLRQWKHIRXQGDWLRQVKDOOFRPSO\ZLWK
6HFWLRQRI6%&RU6HFWLRQ5RI 
6%&DVDSSOLFDEOH 6(&7,21$&&(66,%,/,7<
™ 7KHGHILQLWLRQRI³)ORRGKD]DUGDUHD´SURYLGHG
 0LQLPXP UHTXLUHPHQWV $FFHVVLELOLW\
LQ6HFWLRQLVWDNHQIURPWKH6%&DQG
HVWDEOLVKHV ZKHUH WKLV SURYLVLRQ DSSOLHV ,Q SURYLVLRQV IRU QHZ FRQVWUXFWLRQ VKDOO DSSO\ WR
WKHVH DUHDV DGGLWLRQV WKDW VHSDUDWHO\ RU LQ DGGLWLRQV$QDGGLWLRQWKDWDIIHFWVWKHDFFHVVLELOLW\
FRPELQDWLRQZLWKRWKHUUHSDLUVRUDOWHUDWLRQVDUH WR RU FRQWDLQV DQ DUHD RI SULPDU\ IXQFWLRQ VKDOO
FRQVLGHUHG WR EH ³VXEVWDQWLDO LPSURYHPHQWV´ FRPSO\ZLWKWKHUHTXLUHPHQWVRI6HFWLRQV
VHHWKHGHILQLWLRQRI³6XEVWDQWLDOLPSURYHPHQW´ DQGDVDSSOLFDEOH
LQ 6HFWLRQ  UHTXLUH WKH HQWLUH VWUXFWXUH WR
™ $GGLWLRQV PXVW FRPSO\ ZLWK QHZ FRQVWUXFWLRQ
PHHWWKHIORRGUHVLVWDQWSURYLVLRQVRI6%&
+RZHYHUDQDGGLWLRQLVDOVRDQDOWHUDWLRQWRDQ
6HFWLRQ  RU 6%&  6HFWLRQ 5
H[LVWLQJ EXLOGLQJ WKHUHIRUH DFFHVVLEOH URXWH
%XLOGLQJV DUH FRQVLGHUHG WR KDYH XQGHUJRQH
SURYLVLRQVIRUH[LVWLQJEXLOGLQJVDUHDSSOLFDEOH
VXEVWDQWLDO LPSURYHPHQW ZKHQ WKH FRVW RI WKH
VHHFRPPHQWDU\6HFWLRQVDQG
LPSURYHPHQWLVSHUFHQWRUPRUHRILWVPDUNHW
™ ([DPSOH $ QHZ GLQLQJ DUHD LV DGGHG WR D
YDOXHEHIRUHWKHLPSURYHPHQWLVXQGHUWDNHQ$
UHVWDXUDQW $OO DFFHVVLEOH HOHPHQWV LQ WKH
KRUL]RQWDODGGLWLRQWKDWLVVWUXFWXUDOO\VHSDUDWHG
DGGLWLRQPXVWEHFRQVWUXFWHGDFFHVVLEOH,IWKH
PXVW DOZD\V FRPSO\ ZLWK WKH IORRGUHVLVWDQW
DFFHVVLEOHURXWHWRWKHDGGLWLRQ LVWKURXJKWKH
SURYLVLRQVRIWKH6%&RU6%&HYHQLI
H[LVWLQJ EXLOGLQJ WKH URXWH PXVW EH HYDOXDWHG
LW GRHV QRW TXDOLI\ DV D VXEVWDQWLDO
WR VHH LI HOHPHQWV QHHG WR EH DOWHUHG WR PHHW
LPSURYHPHQWDQGWKLVLVPHUHO\DUHVWDWHPHQW
DFFHVVLELOLW\ UHTXLUHPHQWV ,Q DGGLWLRQ DQ\
RI WKH UHTXLUHPHQW LQ 6HFWLRQ  IRU
WRLOHWURRPVRUGULQNLQJIRXQWDLQVWKDWVHUYHWKH
DGGLWLRQVWRFRPSO\ZLWKWKH6%&
DGGLWLRQ ZRXOG KDYH WR EH HYDOXDWHG IRU
™ 6%&6HFWLRQDQG6%&6HFWLRQ
DFFHVVLELOLW\ 7KLV ZRXOG LQFOXGH WKH URXWH WR
5 DGGUHVV UHTXLUHPHQWV IRU EXLOGLQJV LQ
WKHVH HOHPHQWV WKH WRLOHW URRPV WKHPVHOYHV
GHVLJQDWHGIORRGKD]DUGDUHDV7KHGHVLJQDQG
WKH IL[WXUHVLQWKHWRLOHWURRPDQGWKHGULQNLQJ
FRQVWUXFWLRQ DUH UHTXLUHG WR EH LQ DFFRUGDQFH
IRXQWDLQV
ZLWK $6&(  ZKLFK LQ WXUQ UHIHUHQFHV WKH

6%&&& 

&+$37(5²$'',7,216

 $FFHVVLEOH GZHOOLQJ XQLWV DQG VOHHSLQJ  7\SH%GZHOOLQJRUVOHHSLQJXQLWV:KHUH

XQLWV:KHUH*URXS,,,55RU5 IRXURUPRUH*URXS,,555RU5
GZHOOLQJ RU VOHHSLQJ XQLWV DUH EHLQJ DGGHG WKH GZHOOLQJ RU VOHHSLQJ XQLWV DUH EHLQJ DGGHG WKH
UHTXLUHPHQWV RI VHFWLRQ  RI 6%&  IRU UHTXLUHPHQWVRI6HFWLRQRI6%&IRU7\SH
DFFHVVLEOHXQLWVVKDOODSSO\RQO\WRWKHTXDQWLW\RI %XQLWVDQGFKDSWHURI6%&IRUYLVLEOHDODUPV
VSDFHVEHLQJDGGHG DSSO\RQO\WRWKHTXDQWLW\RIWKHVSDFHVEHLQJDGGHG
™ 7KLV VHFWLRQ VHWV IRUWK WKH UDWH IRU SURYLGLQJ ™ 7KLV VHFWLRQ VHWV IRUWK WKH UDWH IRU SURYLGLQJ
DFFHVVLEOHGZHOOLQJRUVOHHSLQJXQLWVLQ*URXSV 7\SH%GZHOOLQJRUVOHHSLQJXQLWVLQ*URXSV,
, , , 5 5 DQG 5 ZKHUH VXFK ,,55DQG5ZKHUHVXFKIDFLOLWLHV
IDFLOLWLHV DUH EHLQJ DGGHG $VVXPLQJ WKDW WKH DUHDGGHGWRDEXLOGLQJ7KHQXPEHURI7\SH%
UHTXLUHG QXPEHU RI DFFHVVLEOH XQLWV LV QRW XQLWVLVEDVHGRQWKHQXPEHUEHLQJDGGHG)RU
DOUHDG\ SURYLGHG WKH QXPEHU RI DFFHVVLEOH H[DPSOH LI D QXUVLQJ KRPH ZDV DGGLQJ VL[
XQLWVWREHLQFRUSRUDWHGLVEDVHGRQWKHQXPEHU VOHHSLQJXQLWVWKRVHVL[XQLWVZRXOGEHUHTXLUHG
RIGZHOOLQJDQGVOHHSLQJXQLWVEHLQJDGGHG7KH WRPHHW7\SH%UHTXLUHPHQWV7KHGZHOOLQJRU
WHFKQLFDOFULWHULDIRUDFFHVVLEOHXQLWVLVIRXQGLQ VOHHSLQJ XQLWV LQ WKH H[LVWLQJ EXLOGLQJ GR QRW
,&&$16,$&KDSWHUVWKURXJK QHHG WR PHHW 7\SH % UHTXLUHPHQWV 7KH
™ ([DPSOH $ QXUVLQJ KRPH LV H[SDQGLQJ WHFKQLFDOFULWHULDIRU7\SH%XQLWVLVIRXQGLQ,&&
WKURXJK DQ DGGLWLRQ WKDW ZLOO KDYH  VOHHSLQJ $ &KDSWHU  7KLV VHFWLRQ DOVR
XQLWV%DVHGRQWKDWQXPEHU6%&6HFWLRQ UHIHUHQFHV YLVLEOH DQG DXGLEOH DODUP
ZRXOGUHTXLUHDWOHDVWSHUFHQWWR UHTXLUHPHQWVLQ6%&&KDSWHUIRURQO\WKH
EH DFFHVVLEOH XQLWV 7KHUHIRUH  VOHHSLQJ VOHHSLQJ RU GZHOOLQJ XQLWV EHLQJ DGGHG
XQLWVZRXOGEHUHTXLUHGWREHDFFHVVLEOH 6OHHSLQJDFFRPPRGDWLRQVLQ*URXSV,DQG5
 DUH UHTXLUHG WR KDYH YLVLEOH DODUPV LQ
 7\SH$GZHOOLQJRUVOHHSLQJXQLWV:KHUH DFFRUGDQFH ZLWK 6%&  7DEOH 
PRUHWKDQ*URXS5GZHOOLQJRUVOHHSLQJXQLWV $Q DGGLWLRQ ZLWK  QHZ VOHHSLQJ RU GZHOOLQJ
DUHEHLQJDGGHGWKHUHTXLUHPHQWVRI6HFWLRQ XQLWVLQD*URXS5ZRXOGUHTXLUHIRXURIWKH
RI6%&IRU7\SH$XQLWVDQGFKDSWHURI6%& XQLWV WR EH HTXLSSHG ZLWK YLVLEOH DODUPV 6%&
IRUYLVLEOHDODUPVDSSO\RQO\WRWKHTXDQWLW\RI  6HFWLRQ  DOVR FRQWDLQV
WKHVSDFHVEHLQJDGGHG UHTXLUHPHQWVIRUDODUPVLQ*URXS5XQLWVEXW
IRFXVHVRQIXWXUHFDSDELOLWLHVRIVXFKV\VWHPV
™ 7KLV VHFWLRQ VHWV IRUWK WKH UDWH IRU SURYLGLQJ WRVXSSRUWYLVLEOHDODUPV
7\SH$GZHOOLQJRUVOHHSLQJXQLWVLQ*URXS5
ZKHUHVXFKIDFLOLWLHVDUHDGGHG7KHQXPEHURI 
7\SH$XQLWVWREHLQFRUSRUDWHGLVEDVHGRQWKH
QXPEHUEHLQJDGGHG)RU H[DPSOHLIXQLWV 6(&7,21(1(5*<
DUH EHLQJ DGGHG WR D *URXS 5 DSDUWPHQW &216(59$7,21
EXLOGLQJSHUFHQWRIWKHXQLWVEHLQJDOWHUHG
 0LQLPXP UHTXLUHPHQWV  $GGLWLRQV WR
ZRXOGEHUHTXLUHGWREHGHVLJQHGWRFRQIRUPWR
7\SH $ XQLW UHTXLUHPHQWV 7KLV ZRXOG UHTXLUH H[LVWLQJEXLOGLQJVVKDOOFRQIRUPWRWKH6%&RU
RQO\RQHXQLWWREHDGGHG7KHWHFKQLFDOFULWHULD 6%&DVWKH\UHODWHWRQHZFRQVWUXFWLRQ
IRU7\SH$XQLWVLVIRXQGLQ,&&$16,$ ™ 7KLV VHFWLRQ LV PHUHO\ D SRLQWHU WR WKH
&KDSWHU7KLVVHFWLRQDOVRUHIHUHQFHV DSSOLFDEOHUHTXLUHPHQWVRIWKH6%&RU6%&
YLVLEOHDQGDXGLEOHDODUPUHTXLUHPHQWVLQ6%&  DV DSSOLFDEOH ZLWK UHJDUG WR HQHUJ\
 &KDSWHU  6%&  6HFWLRQ  FRQVHUYDWLRQ 1R DGGLWLRQDO UHTXLUHPHQWV DUH
FRQWDLQVUHTXLUHPHQWVIRUDODUPVLQ*URXS5 SURYLGHG KHUH VLPSO\ D UHPLQGHU WKDW
XQLWV 7KH YLVLEOH DODUP UHTXLUHPHQWV ZRXOG UHTXLUHPHQWV H[LVW LQ RWKHU FRGHV IRU WKHVH
RQO\UHTXLUHWKDWVXFKXQLWVKDYHWKHFDSDELOLW\ DGGLWLRQV
WR VXSSRUW WKH QRWLILFDWLRQ DSSOLDQFHV RI WKH
YLVLEOHDODUPV 

6%&&& 

&+$37(5²$'',7,216

7$%/(6$1'),*85(62)&+$37(5

3m 3m

280 m2

750 m2

3m

6m


),*85(
(;,67,1*%8,/',1*:,7+$'',7,21


),*85(
+25,=217$/$'',7,216

6%&&& 

&+$37(5²$'',7,216

),*85(
'5,)7,1*612:'8(72$1$'',7,21
7KLVSDJHOHIWLQWHQWLRQDOO\EODQN

6%&&& 

 &+$37(5²+,6725,&%8,/',1*6

²+,6725,&%8,/',1*6

FRGH UHTXLUHPHQWV IRU QHZ FRQVWUXFWLRQ

™ *HQHUDO&RPPHQWV
$OWKRXJK PDQ\ RI WKHVH EXLOGLQJV DUH
™ 7KLVVHFWLRQSURYLGHVVRPHRYHUDOOH[FHSWLRQV
SRWHQWLDOO\ VDOYDJHDEOH UHKDELOLWDWLRQ LV RIWHQ
IURP FRGH UHTXLUHPHQWV ZKHQ WKH EXLOGLQJ LQ
FRVWSURKLELWLYHEHFDXVHWKH\PD\QRWEHDEOH
TXHVWLRQKDVKLVWRULFYDOXH7KHPRVWLPSRUWDQW
WRFRPSO\ZLWKDOORIWKHUHTXLUHPHQWVIRUQHZ
FULWHULRQIRUWKHDSSOLFDWLRQRIWKLVVHFWLRQLVWKDW
FRQVWUXFWLRQ$WWKHVDPHWLPHLWLVQHFHVVDU\
WKH EXLOGLQJ PXVW EH HVVHQWLDOO\ DFFUHGLWHG DV
WR UHJXODWH FRQVWUXFWLRQ LQ H[LVWLQJ EXLOGLQJV
EHLQJRIKLVWRULFVLJQLILFDQFHE\DTXDOLILHGWKLUG
WKDW XQGHUJR DGGLWLRQV DOWHUDWLRQV
SDUW\ RU DJHQF\ 8VXDOO\ WKLV LV GRQH E\ D
UHQRYDWLRQV H[WHQVLYH UHSDLUV RU FKDQJH RI
1DWLRQDO DXWKRULW\ DIWHU FDUHIXO UHYLHZ RI WKH
RFFXSDQF\ 6XFK DFWLYLW\ UHSUHVHQWV DQ
KLVWRULFDOYDOXHRIWKHEXLOGLQJ0RVWLIQRWDOO
RSSRUWXQLW\ WR HQVXUH WKDW QHZ FRQVWUXFWLRQ
FLWLHVRUJRYHUQRUDWHVKDYHVXFKDXWKRULWLHVDV
FRPSOLHV ZLWK FXUUHQW EXLOGLQJ FRGHV DQG WKDW
GRPDQ\ORFDOMXULVGLFWLRQV7KHDJHQFLHVZLWK
H[LVWLQJ FRQGLWLRQV DUH PDLQWDLQHG DW D
VXFK DXWKRULW\ FDQ EH ORFDWHG DW WKH
PLQLPXPWRWKHLUFXUUHQWOHYHORIFRPSOLDQFHRU
JRYHUQPHQWOHYHO2WKHUFRQVLGHUDWLRQVLQFOXGH
DUH LPSURYHG DV UHTXLUHG 7R DFFRPSOLVK WKLV
WKH VWUXFWXUDO FRQGLWLRQ RI WKH EXLOGLQJ LH
REMHFWLYH DQG WR PDNH WKH UHKDELOLWDWLRQ
ZKHWKHU WKH EXLOGLQJ LV VWUXFWXUDOO\ VRXQG LWV
SURFHVV HDVLHU WKLV FKDSWHU DOORZV IRU D
SURSRVHGXVHLWVLPSDFWRQOLIHVDIHW\DQGKRZ
FRQWUROOHG GHSDUWXUH IURP IXOO FRPSOLDQFH ZLWK
WKH LQWHQW LI QRW WKH OHWWHU RI WKH FRGH ZLOO EH
WKHWHFKQLFDOFRGHVZLWKRXWFRPSURPLVLQJWKH
DFKLHYHG
PLQLPXPVWDQGDUGVIRUILUHSUHYHQWLRQDQGOLIH
™ 3XUSRVH
VDIHW\IHDWXUHVRIWKHUHKDELOLWDWHGEXLOGLQJ
™ $ ODUJH QXPEHU RI H[LVWLQJ EXLOGLQJV DQG
VWUXFWXUHV GR QRW FRPSO\ ZLWK FXUUHQW EXLOGLQJ
SURYLVLRQVZRXOGEHGDPDJLQJWRWKHFRQWULEXWLQJ
KLVWRULFIHDWXUHV)RUEXLOGLQJVDVVLJQHGWR6HLVPLF
6(&7,21*(1(5$/ 'HVLJQ&DWHJRU\'(RU)DVWUXFWXUDOHYDOXDWLRQ
 6FRSH  ,W LV WKH LQWHQW RI WKLV FKDSWHU WR GHVFULELQJ DW D PLQLPXP WKH YHUWLFDO DQG
SURYLGH PHDQV IRU WKH SUHVHUYDWLRQ RI KLVWRULF KRUL]RQWDO HOHPHQWV RI WKH ODWHUDO IRUFHUHVLVWLQJ
EXLOGLQJV +LVWRULFDO EXLOGLQJV VKDOO FRPSO\ ZLWK V\VWHP DQG DQ\ VWUHQJWKV RU ZHDNQHVVHV WKHUHLQ
WKHSURYLVLRQVRIWKLVFKDSWHUUHODWLQJWRWKHLUUHSDLU VKDOO EH SUHSDUHG $GGLWLRQDOO\ WKH UHSRUW VKDOO
DOWHUDWLRQUHORFDWLRQDQGFKDQJHRIRFFXSDQF\ GHVFULEHHDFKIHDWXUHWKDWLVQRWLQFRPSOLDQFHZLWK
WKHVH SURYLVLRQV DQG VKDOO GHPRQVWUDWH KRZ WKH
™ 7KLVVHFWLRQHVWDEOLVKHVWKDWWKLVFKDSWHUGHDOV
ZLWKWKHUHTXLUHPHQWVIRUWKHUHSDLUDOWHUDWLRQ LQWHQW RI WKHVH SURYLVLRQV LV FRPSOLHG ZLWK LQ
UHORFDWLRQ DQG FKDQJH RI RFFXSDQF\ RI SURYLGLQJDQHTXLYDOHQWOHYHORIVDIHW\
EXLOGLQJV SUHYLRXVO\ GHILQHG E\ WKH FRGH DV ™ 7KLVVHFWLRQSURYLGHVIRUDUHSRUWWKDWDFWVDVD
KLVWRULF1RWHWKDWWKHFRGHZRXOGQRWUHJDUGD WHFKQLFDO EDFNXS IRU WKH EXLOGLQJ RIILFLDO¶V
UHFRQVWUXFWLRQ RI D KLVWRULF EXLOGLQJ DV MXGJPHQW 7KH LQWHQW LV WR EH DEOH WR UHWDLQ D
TXDOLI\LQJIRUWUHDWPHQWXQGHUWKLVFKDSWHUHYHQ UHFRUGRIWKHGHFLVLRQVDQGWKHEDVLVIRUWKRVH
LI WKH EXLOGLQJ LV UHFRQVWUXFWHG HQWLUHO\ IURP GHFLVLRQVIRUIXWXUHUHIHUHQFH
RULJLQDOVWRUHGPDWHULDOVDQGDVVHPEOLHV ™ 7KH GHILQLWLRQ RI ³+LVWRULF EXLOGLQJ´ UHIHUV WR
 5HSRUW  $ KLVWRULF EXLOGLQJ XQGHUJRLQJ OLVWLQJV SURYLGHG E\ 6DXGL &RPPLVVLRQ IRU
7RXULVP DQG 1DWLRQDO +HULWDJH 6&7+ 
UHSDLUDOWHUDWLRQRUFKDQJHRIRFFXSDQF\VKDOOEH
&RQWULEXWLQJ IHDWXUHV PD\ EH OLPLWHG WR WKRVH
LQYHVWLJDWHGDQGHYDOXDWHG,ILWLVLQWHQGHGWKDWWKH IHDWXUHV LQ QRPLQDWLRQV KLVWRULF VWUXFWXUH
EXLOGLQJ PHHW WKH UHTXLUHPHQWV RI WKLV FKDSWHU D UHSRUWV RU RWKHU VXFK GRFXPHQWV 7KLV
ZULWWHQUHSRUWVKDOOEHSUHSDUHGDQGILOHGZLWKWKH UHSUHVHQWV D V\VWHPDWL]HG DSSURDFK IRU
EXLOGLQJRIILFLDOE\DUHJLVWHUHGGHVLJQSURIHVVLRQDO HYDOXDWLQJSURSRVDOVRIHTXLYDOHQWSHUIRUPDQFH
ZKHQVXFKDUHSRUWLVQHFHVVDU\LQWKHRSLQLRQRIWKH VHH WKH GHILQLWLRQ RI ³+LVWRULF EXLOGLQJ´ LQ
EXLOGLQJRIILFLDO6XFKUHSRUWVKDOOEHLQDFFRUGDQFH 6HFWLRQ
ZLWK &KDSWHU  DQG VKDOO LGHQWLI\ HDFK UHTXLUHG  6SHFLDO RFFXSDQF\ H[FHSWLRQV²
VDIHW\IHDWXUHWKDWLVLQFRPSOLDQFHZLWKWKLVFKDSWHU PXVHXPV :KHQDEXLOGLQJLQ*URXS5LVDOVR
DQGZKHUHFRPSOLDQFHZLWKRWKHUFKDSWHUVRIWKHVH XVHG IRU *URXS $ % RU 0 SXUSRVHV VXFK DV

6%&&& 

&+$37(5²+,6725,&%8,/',1*6

PXVHXPWRXUVH[KLELWVDQGRWKHUSXEOLFDVVHPEO\ ZKHWKHU SURSRVHG ZRUN ZLOO MHRSDUGL]H D

DFWLYLWLHV RU IRU PXVHXPV OHVV WKDQ  P WKH VWUXFWXUH¶V KLVWRULF GHVLJQDWLRQ 7R WKH H[WHQW
EXLOGLQJRIILFLDOPD\GHWHUPLQHWKDWWKHRFFXSDQF\ SUDFWLFDEOH RZQHUV RI KLVWRULF EXLOGLQJV PD\
LV *URXS % ZKHQ OLIHVDIHW\ FRQGLWLRQV FDQ EH ZLVK WR LQFRUSRUDWH IORRGUHVLVWDQW SURYLVLRQV
ZKHQ VXFK EXLOGLQJV XQGHUJR UHSDLUV DQG
GHPRQVWUDWHG LQ DFFRUGDQFH ZLWK 6HFWLRQ 
DOWHUDWLRQV ,I WKH ZRUN RQ D KLVWRULF VWUXFWXUH
$GHTXDWHPHDQVRIHJUHVVLQVXFKEXLOGLQJVZKLFK GRHV QRW FDXVH WKH ORVV RI LWV HOLJLELOLW\ DV D
PD\ LQFOXGH D PHDQV RI PDLQWDLQLQJ GRRUV LQ DQ KLVWRULF EXLOGLQJ DV D UHVXOW RI WKH SURSRVHG
RSHQSRVLWLRQWRSHUPLWHJUHVVDOLPLWRQEXLOGLQJ ZRUNWKHQWKHZRUNZRXOGQRWEHFRQVLGHUHGDV
RFFXSDQF\ WR DQ RFFXSDQW ORDG SHUPLWWHG E\ WKH D VXEVWDQWLDO LPSURYHPHQW WKHUHIRUH WKH
PHDQVRIHJUHVVFDSDFLW\DOLPLWRQRFFXSDQF\RI EXLOGLQJZRXOGQRWKDYHWRFRPSO\ZLWK6HFWLRQ
FHUWDLQDUHDVRUIORRUVRUVXSHUYLVLRQE\DSHUVRQ  RI WKH 6%&  RU 6HFWLRQ 5 RI WKH
NQRZOHGJHDEOH LQ WKH HPHUJHQF\ H[LWLQJ 6%&DVDSSOLFDEOH
SURFHGXUHVVKDOOEHSURYLGHG 
™ 7KLVVHFWLRQDFNQRZOHGJHVWKDWGZHOOLQJVXVHG
DV PXVHXPV DQG RWKHU SXEOLF DVVHPEO\
6(&7,215(3$,56
DFWLYLWLHVDUHDVSHFLDOFDVH  *HQHUDO  5HSDLUV WR DQ\ SRUWLRQ RI DQ
™ 7KHSURYLVLRQDOORZVDVPDOOPXVHXPRUKLVWRULF KLVWRULFEXLOGLQJRUVWUXFWXUHVKDOOEHSHUPLWWHGZLWK
KRXVH LQ D PXVHXP XVH WR GHPRQVWUDWH OLIH RULJLQDORU OLNH PDWHULDOVDQG RULJLQDOPHWKRGVRI
VDIHW\XVLQJRSHUDWLRQDOFRQWUROVWKDWZRXOGQRW FRQVWUXFWLRQ VXEMHFW WR WKH SURYLVLRQV RI WKLV
EHSHUPLWWHGLQPRVWRWKHUXVHV7KLVLVOLNHO\WR
FKDSWHU+D]DUGRXVPDWHULDOVVXFKDVDVEHVWRVDQG
EH HIIHFWLYH EHFDXVH RI WKH KLJK GHJUHH RI
VXSHUYLVLRQ WKDW ZRXOG EH QHFHVVDU\ IRU OHDGEDVHGSDLQWVKDOOQRWEHXVHGZKHUHWKHFRGH
VHFXULW\UHDVRQVLQWKLVRFFXSDQF\,QWKLVFDVH IRUQHZFRQVWUXFWLRQZRXOGQRWSHUPLWWKHLUXVHLQ
WKH EXLOGLQJ RFFXSDQF\ LV FODVVLILHG DV EXLOGLQJV RI VLPLODU RFFXSDQF\ SXUSRVH DQG
2FFXSDQF\*URXS%HYHQWKRXJKLWPD\FRQWDLQ ORFDWLRQ
DVVHPEO\ RU PHUFDQWLOH XVHV ,W ZRXOG DOVR
™ 5HSDLU ZLWK OLNH PDWHULDOV PD\ EH QHHGHG IRU
SHUPLW WKH RFFDVLRQDO XVH RI D UHVLGHQWLDO
DHVWKHWLF UHDVRQV RU WR PHHW PDWHULDO
EXLOGLQJIRUWRXUVDQGPXVHXPXVH
FRQVHUYDWLRQQHHGV,WLVLPSRUWDQWWRQRWHWKDW
 )ORRGKD]DUGDUHDV,QIORRGKD]DUGDUHDV RULJLQDORUOLNHPDWHULDOVFDQEHXVHGEXWWKHVH
LI DOO SURSRVHG ZRUN LQFOXGLQJ UHSDLUV ZRUN PDWHULDOV FDQQRW FRQWDLQ VXEVWDQFHV VXFK DV
UHTXLUHG EHFDXVH RI D FKDQJH RI RFFXSDQF\ DQG DVEHVWRVWKDWDUHKD]DUGRXVDQGZRXOGQRWEH
DOWHUDWLRQV FRQVWLWXWHV VXEVWDQWLDO LPSURYHPHQW SHUPLWWHG XQGHU WKH FXUUHQW EXLOGLQJ FRGH IRU
QHZFRQVWUXFWLRQ
WKHQWKHH[LVWLQJEXLOGLQJVKDOOFRPSO\ZLWK6HFWLRQ
 RI 6%&  RU 6HFWLRQ 5  RI WKH 6%&  8QVDIHFRQGLWLRQV&RQGLWLRQVGHWHUPLQHG
DVDSSOLFDEOH E\ WKH EXLOGLQJ RIILFLDO WR EH XQVDIH VKDOO EH
UHPHGLHG1RZRUNVKDOOEHUHTXLUHGEH\RQGZKDW
([FHSWLRQ,IDQKLVWRULFEXLOGLQJZLOOFRQWLQXHWR
LVUHTXLUHGWRUHPHG\WKHXQVDIHFRQGLWLRQV
EH DQ KLVWRULF EXLOGLQJ DIWHU WKH SURSRVHG ZRUNLV
FRPSOHWHG WKHQ WKH SURSRVHG ZRUN LV QRW ™ 7KLV VHFWLRQ UHTXLUHV WKH UHSDLU RI LGHQWLILHG
FRQVLGHUHG D substantial improvement )RU WKH XQVDIH FRQGLWLRQV LQ KLVWRULF EXLOGLQJV ZLWKRXW
SXUSRVHV RI WKLV H[FHSWLRQ DQ KLVWRULF EXLOGLQJ LV WULJJHULQJ VHFRQGDU\ UHTXLUHPHQWV ,W LV
GHWHUPLQHGE\6DXGL&RPPLVVLRQIRU7RXULVPDQG LPSRUWDQW WR QRWH WKH WHUP ³XQVDIH´ LQ WKLV
VHFWLRQ DV LW LV VSHFLILFDOO\ GHILQHG LQ 6HFWLRQ
1DWLRQDO+HULWDJH6&7+
 ,W LV D PRUH JHQHUDO WHUP WKDQ WKH WHUP
™ ,QIORRGDUHDVKLVWRULFEXLOGLQJVWKDWPHHW WKH ³GDQJHURXV´ ZKLFK LV VSHFLILF WR VWUXFWXUDO
H[FHSWLRQ DUH QRW UHTXLUHG WR FRPSO\ ZLWK WKH FRQGLWLRQV
IORRG SURYLVLRQV LQFOXGLQJ WKH VXEVWDQWLDO
LPSURYHPHQWSURYLVLRQDVORQJDVWKHEXLOGLQJ
 5HORFDWHG EXLOGLQJV  )RXQGDWLRQV RI
FRQWLQXHV WR EH GHVLJQDWHG DV KLVWRULF UHORFDWHG KLVWRULF EXLOGLQJV DQG VWUXFWXUHV VKDOO
+RZHYHU LI SODQV WR VXEVWDQWLDOO\ LPSURYH D FRPSO\ ZLWK WKH 6%&  5HORFDWHG KLVWRULF
KLVWRULF EXLOGLQJ ZRXOG UHVXOW LQ WKH ORVV RI LWV EXLOGLQJVVKDOORWKHUZLVHEHFRQVLGHUHGDQKLVWRULF
GHVLJQDWLRQDVD³KLVWRULFEXLOGLQJ´WKHEXLOGLQJ EXLOGLQJ IRU WKH SXUSRVHV RI WKLV FRGH 5HORFDWHG
ZRXOG EH UHTXLUHG WR EH EURXJKW LQWR KLVWRULF EXLOGLQJV DQG VWUXFWXUHV VKDOO EH VLWHG VR
FRPSOLDQFH ZLWK WKH UHTXLUHPHQWV IRU IORRG WKDWH[WHULRUZDOODQGRSHQLQJUHTXLUHPHQWVFRPSO\
KD]DUGDUHDV7KHEXLOGLQJRIILFLDOPD\UHTXLUH ZLWK6%&RUZLWKWKHFRPSOLDQFHDOWHUQDWLYHV
DSSOLFDQWV WR FRQVXOW ZLWK WKH DSSURSULDWH RIWKLVFRGH
KLVWRULF SUHVHUYDWLRQ DXWKRULW\ WR GHWHUPLQH

6%&&& 

&+$37(5²+,6725,&%8,/',1*6

™ 7KHIRXQGDWLRQRIDUHORFDWHGEXLOGLQJLVDQHZ DXWRPDWLFILUHH[WLQJXLVKLQJV\VWHPDVGHWHUPLQHG
VWUXFWXUHWKHUHLVQRUHDVRQZK\LWVKRXOGQRW DSSURSULDWH E\ WKH EXLOGLQJ RIILFLDO +RZHYHU DQ
FRPSO\ ZLWK SURYLVLRQV IRU QHZ FRQVWUXFWLRQ DXWRPDWLF ILUHH[WLQJXLVKLQJ V\VWHP VKDOO QRW EH
+RZHYHU FRPSDUHG ZLWK FRGH SURYLVLRQV WKDW XVHGWRVXEVWLWXWHIRURUDFWDVDQDOWHUQDWLYHWRWKH
WUHDWDUHORFDWHGEXLOGLQJDVDQHZEXLOGLQJWKH
UHTXLUHGQXPEHURIH[LWVIURPDQ\IDFLOLW\
UHVWRIWKHEXLOGLQJ LVVWLOOWUHDWHG DVD KLVWRULF
VWUXFWXUH ,Q UHORFDWLRQ VLWLQJ LV WR VRPH ™ )LUHH[WLQJXLVKLQJ V\VWHPV DUH HIIHFWLYH
GHJUHHDQHZGHVLJQGHFLVLRQ5HODWLRQVKLSRI VXEVWLWXWHV IRU VRPH UHTXLUHPHQWV WKDW DUH
ZDOOV DQG RSHQLQJV WR SURSHUW\ OLQHV LV W\SLFDO IRU QHZ FRQVWUXFWLRQ SDUWLFXODUO\
WKHUHIRUH UHDVRQDEO\ DEOH WR EH EURXJKW LQWR SDVVLYH V\VWHPV VXFK DV UDWHG GRRUV DQG
FRPSOLDQFH ZLWK WKH ILUH VHSDUDWLRQ FRUULGRUV %\ VORZLQJ RU VXSSUHVVLQJ WKH
UHTXLUHPHQWVRIWKHFRGH GHYHORSPHQW RI D ILUH D VSULQNOHU V\VWHP ZLOO
PDNHSDVVLYHILUHUHVLVWDQFHXQQHFHVVDU\7KLV
 5HSODFHPHQW5HSODFHPHQWRIH[LVWLQJRU VHFWLRQ DOVR HVWDEOLVKHV WKDW DQ DXWRPDWLF
PLVVLQJ IHDWXUHV XVLQJ RULJLQDO PDWHULDOV VKDOO EH VSULQNOHUV\VWHPLVQRWFRQVLGHUHGDSSURSULDWH
SHUPLWWHG 3DUWLDO UHSODFHPHQW IRU UHSDLUV WKDW DVDVXEVWLWXWLRQIRUDUHGXFWLRQLQWKHUHTXLUHG
PDWFKWKHRULJLQDOLQFRQILJXUDWLRQKHLJKWDQGVL]H QXPEHURIH[LWV
VKDOOEHSHUPLWWHG
5HSODFHPHQW JOD]LQJ LQ KD]DUGRXV ORFDWLRQV VKDOO  0HDQVRIHJUHVV([LVWLQJGRRURSHQLQJV
FRPSO\ ZLWK WKH VDIHW\ JOD]LQJ UHTXLUHPHQWV RI DQG FRUULGRU DQG VWDLUZD\ ZLGWKV OHVV WKDQ WKRVH
&KDSWHURI6%& VSHFLILHGHOVHZKHUHLQWKLVFRGHPD\EHDSSURYHG
SURYLGHGWKDWLQWKHRSLQLRQRIWKHEXLOGLQJRIILFLDO
([FHSWLRQ*ODVVEORFNZDOOVORXYHUHGZLQGRZV WKHUHLVVXIILFLHQWZLGWKDQGKHLJKWIRUDSHUVRQWR
DQGMDORXVLHVUHSDLUHGZLWKOLNHPDWHULDOV SDVVWKURXJKWKHRSHQLQJRUWUDYHUVHWKHPHDQVRI
™ ,QVRPHFDVHVKLVWRULFPDWHULDOVKDYHQRWEHHQ HJUHVV:KHQDSSURYHGE\WKHEXLOGLQJRIILFLDOWKH
WHVWHG IRU ILUH UHVLVWDQFH RU VWUXFWXUDO IURQW RU PDLQ H[LW GRRUV QHHG QRW VZLQJ LQ WKH
SHUIRUPDQFHEXWKDYHEHHQVKRZQWRSHUIRUP GLUHFWLRQ RI WKH SDWK RI H[LW WUDYHO SURYLGHG WKDW
DGHTXDWHO\ZKHQLQXVH$QH[FHOOHQWH[DPSOH RWKHU DSSURYHG PHDQV RI HJUHVV KDYLQJ VXIILFLHQW
ZRXOGEHDUDLOLQJZKHUHVSDFLQJKHLJKWRUHQG FDSDFLW\ WR VHUYH WKH WRWDO RFFXSDQW ORDG DUH
FRQGLWLRQV ZRXOG QRW PHHW PRGHUQ SURYLGHG
UHTXLUHPHQWV ,I VHFWLRQV RI D UDLOLQJ DUH
PLVVLQJRULIUHSDLUVDUHQHHGHGWKHUDLOLQJLV ™ 7KLVSURYLVLRQZRXOGSHUPLWWKHFRQWLQXDQFHRI
QRW UHTXLUHG WR PHHW WKH FRGH SURYLVLRQV IRU D VWUXFWXUH QR PRUH KD]DUGRXV WKDQ EHIRUH
QHZ FRQVWUXFWLRQ KRZHYHU WKH VHFRQG UHKDELOLWDWLRQ ZLWK PLQLPXP VWDQGDUGV RI
SDUDJUDSKRIWKLVVHFWLRQUHTXLUHVXSJUDGLQJWR XVDELOLW\3URYLVLRQVIRUQHZFRQVWUXFWLRQZRXOG
WKH VDIHW\ JOD]LQJ UHTXLUHPHQWV RI 6%&  UHTXLUHWKDWH[LWGRRUVVZLQJLQWKHGLUHFWLRQRI
&KDSWHUVLQFHWKHUHLVDQHVWDEOLVKHGKD]DUG H[LWWUDYHOIRUDQRFFXSDQWORDGH[FHHGLQJ
DQG WKH FRVW WR IDEULFDWH D KLVWRULFDOO\ FRUUHFW  7UDQVRPV ,QIXOO\VSULQNOHUHGEXLOGLQJV
UHSURGXFWLRQRIDSURSHUPDWHULDOLVQHJOLJLEOH RI *URXS 5 5 RU 5 RFFXSDQF\ H[LVWLQJ
6(&7,21),5(6$)(7< WUDQVRPVLQFRUULGRUVDQGRWKHUILUHUHVLVWDQFHUDWHG
ZDOOV PD\ EH PDLQWDLQHG LI IL[HG LQ WKH FORVHG
 6FRSH  +LVWRULF EXLOGLQJV XQGHUJRLQJ SRVLWLRQ$VSULQNOHUVKDOOEHLQVWDOOHGRQHDFKVLGH
DOWHUDWLRQV FKDQJHV RI RFFXSDQF\ RU WKDW DUH RIWKHWUDQVRP
PRYHGVKDOOFRPSO\ZLWKVHFWLRQ
™ 7KLVSHUPLWVWKHUHWHQWLRQRIQRQZLUHGQRQUDWHG
™ 7KLV VHFWLRQ UHFRJQL]HV WKH XQLTXH DVSHFWV JODVV LQ KLVWRULF WUDQVRPV LQ UDWHG ZDOOV LQ
DVVRFLDWHG ZLWK ROGHU KLVWRULFDO VWUXFWXUHV ,W UHVLGHQWLDORFFXSDQFLHVZKHUHSURWHFWHGE\DQ
UHLQIRUFHV WKH LPSRUWDQFH RI WKH PHDQV RI DXWRPDWLF ILUH VSULQNOHU V\VWHP WKURXJKRXW WKH
HJUHVV SDWKZD\ ZKLOH JUDQWLQJ WKH EXLOGLQJ EXLOGLQJ7KLVVHFWLRQUHTXLUHVWKHWUDQVRPVWR
RIILFLDOVRPHODWLWXGHLQDFFHSWLQJVRPHGHJUHH EHFORVHGDQGVSHFLILFSURWHFWLRQRQERWKVLGHV
RI YDULDQFH LQ WKH HJUHVV FRPSRQHQWV HJ RI WKH WUDQVRPV 7KLV DSSURDFK EDVLFDOO\
GLUHFWLRQRIH[LWGRRUVZLQJHJUHVVSDWKZLGWK DIIRUGV D OHYHO RI VDIHW\ HTXLYDOHQW WR WKH
DQGKHLJKW SDVVLYHSURWHFWLRQSURYLGHGE\DUDWHGFRUULGRU
 *HQHUDO(YHU\KLVWRULFEXLOGLQJWKDWGRHV RURWKHUUDWHGFRQVWUXFWLRQ
QRW FRQIRUP WR WKH FRQVWUXFWLRQ UHTXLUHPHQWV  ,QWHULRUILQLVKHV7KHH[LVWLQJILQLVKHVRI
VSHFLILHGLQWKLVFRGHIRUWKHRFFXSDQF\RUXVHDQG ZDOOV DQG FHLOLQJV VKDOO EH DFFHSWHG ZKHQ LW LV
WKDW FRQVWLWXWHV D GLVWLQFW ILUH KD]DUG DV GHILQHG GHPRQVWUDWHGWKDWWKH\DUHWKHKLVWRULFILQLVKHV
KHUHLQ VKDOO EH SURYLGHG ZLWK DQ DSSURYHG

6%&&& 

&+$37(5²+,6725,&%8,/',1*6

™ :KLOHH[LVWLQJZRRGSDQHOLQJRURWKHUILQLVKHV +RZHYHU VLQFH DQ RUQDPHQWDO UDLOLQJ LV

PD\ QRW PHHW IODPH VSUHDG UHTXLUHPHQWV IRU W\SLFDOO\ GLIILFXOW WR PRGLI\ SDUWLFXODUO\ ZLWKRXW
ZDOOVRUFHLOLQJVWKLVVHFWLRQDOORZVWKHILQLVKHV VLJQLILFDQW DUFKLWHFWXUDO FKDQJH WKH FRGH
WRUHPDLQLQSODFH LI WKH\FDQEHVKRZQWREH SHUPLWVKLVWRULFUDLOLQJVWKDWDUHHVVHQWLDOO\VDIH
KLVWRULF LQ QDWXUH ,I QRW WKHUH VKRXOG EH QR WR UHPDLQ 7KLV DOVR ZRXOG DOORZ KDQGUDLO
UHDVRQQRWWRDGGUHVVWKHIODPHVSUHDGUDWLQJ SURILOHV WKDW PD\ QRW PHHW FXUUHQW JULS
RI WKH PDWHULDOV VLQFH WKH VHQVLWLYLW\ RI WKH UHTXLUHPHQWVSURYLGHGWKH\DUHQRWVWUXFWXUDOO\
KLVWRULF QDWXUH RI WKH EXLOGLQJ LV QR ORQJHU DQ GDQJHURXV
LVVXH
*XDUGV  *XDUGV VKDOO FRPSO\ ZLWK
 6WDLUZD\HQFORVXUH,QEXLOGLQJVRIWKUHH 6HFWLRQVDQG
VWRULHV RU OHVV H[LW HQFORVXUH FRQVWUXFWLRQ VKDOO
™ *XDUGV VKDOO FRPSO\ ZLWK 6HFWLRQV 
OLPLWWKHVSUHDGRIVPRNHE\WKHXVHRIWLJKWILWWLQJ DQG  7KLV VHFWLRQ HVWDEOLVKHV WKDW
GRRUV DQG VROLG HOHPHQWV 6XFK HOHPHQWV DUH QRW JXDUGVLQH[LVWLQJKLVWRULFVWUXFWXUHVFDQUHPDLQ
UHTXLUHGWRKDYHDILUHUHVLVWDQFHUDWLQJ LQWKHFRQILJXUDWLRQLQZKLFKWKH\ZHUHRULJLQDOO\
™ (QFORVXUHRIVWDLUZD\VWRFRQWUROVPRNHZRXOG FRQVWUXFWHG*XDUGVZRXOGVWLOOKDYHWRFRQIRUP
SURYLGH DQ LPSURYHPHQW EXW SHUPLWWLQJ WKH WR WKH UHVWULFWLRQV LQ HIIHFW DW WKH WLPH WKH
HQFORVXUHWREHQRQUDWHGZRXOGDOORZIRUXVHRI EXLOGLQJZDVEXLOW
WUDGLWLRQDO PDWHULDOV ([DPSOH HQFORVXUHV  +HLJKW  ([LVWLQJ JXDUGV VKDOO
LQFOXGH SODLQ RU ZLUHG JODVV VPRNHDFWLYDWHG FRPSO\ZLWKWKHUHTXLUHPHQWVRI6HFWLRQ
GRRUVDQGVLPLODUDVVHPEOLHV7KLVSURYLGHVIRU
IOH[LELOLW\EXWUHTXLUHVDWOHDVWDPLQLPXPOHYHO ™ ([LVWLQJ JXDUGV VKDOO FRPSO\ ZLWK WKH
RI SDVVLYH VPRNH FRQWURO WR SURWHFW VWDLUZD\V UHTXLUHPHQWV RI 6HFWLRQ  6HFWLRQ 
IRUH[LWLQJ UHTXLUHVWKDWUHSDLUVPDLQWDLQWKHH[LVWLQJOHYHO
RISURWHFWLRQ
 2QHKRXU ILUHUHVLVWDQW DVVHPEOLHV
:KHUH KRXU ILUHUHVLVWDQFHUDWHG FRQVWUXFWLRQ LV  *XDUG RSHQLQJV  7KH VSDFLQJ
UHTXLUHG E\ WKHVH SURYLVLRQV LW QHHG QRW EH EHWZHHQH[LVWLQJLQWHUPHGLDWHUDLOLQJVRURSHQLQJV
SURYLGHGUHJDUGOHVVRIFRQVWUXFWLRQRURFFXSDQF\ LQ H[LVWLQJ RUQDPHQWDO SDWWHUQV VKDOO EH DFFHSWHG
ZKHUHWKHH[LVWLQJZDOODQGFHLOLQJILQLVKLVZRRG 0LVVLQJ HOHPHQWV RU PHPEHUV RI D JXDUG PD\ EH
RUPHWDOODWKDQGSODVWHU UHSODFHGLQDPDQQHUWKDWZLOOSUHVHUYHWKHKLVWRULF
DSSHDUDQFHRIWKHEXLOGLQJRUVWUXFWXUH
™ 7KHVXEVWLWXWLRQRIVWDQGDUGROGIDVKLRQHGODWK
DQGSODVWHUIRUKRXUUDWHGZDOOFRQVWUXFWLRQLV ™ 5HTXLUHPHQWV IRU YRLGV LQ UDLOLQJV DQG JULOOHV
DZHOOHVWDEOLVKHGDOWHUQDWLYHDQGLVFRQVLGHUHG KDYH EHFRPH PRUH VWULQJHQW RYHU WKH \HDUV
DVPHHWLQJWKHLQWHQWRIWKHFRGHWRSURYLGHD 7KH VSDFLQJ RI D EDOXVWUDGH RU RUQDPHQWDO
VDIHSDWKIRUH[LW SDWWHUQ RI D JULOOH LV IUHTXHQWO\ D VLJQLILFDQW
FRQWULEXWRU WR WKH EXLOGLQJ¶V KLVWRULF FKDUDFWHU
 *OD]LQJLQILUHUHVLVWDQFHUDWHGV\VWHPV 7KLVSURYLVLRQHQDEOHVWKHUHWHQWLRQDQGUHSDLU
+LVWRULFJOD]LQJPDWHULDOVDUHSHUPLWWHGLQLQWHULRU RIWKHVHHOHPHQWV
ZDOOV UHTXLUHG WR KDYH D KRXU ILUHUHVLVWDQFH
UDWLQJZKHUHWKHRSHQLQJLVSURYLGHGZLWKDSSURYHG ([LWVLJQV:KHUHH[LWVLJQRUHJUHVVSDWK
VPRNHVHDOVDQGWKHDUHDDIIHFWHGLVSURYLGHGZLWK PDUNLQJ ORFDWLRQ ZRXOG GDPDJH WKH KLVWRULF
DQDXWRPDWLFVSULQNOHUV\VWHP FKDUDFWHURIWKHEXLOGLQJDOWHUQDWLYHH[LWVLJQVDUH
SHUPLWWHG ZLWK DSSURYDO RI WKH EXLOGLQJ RIILFLDO
™ *OD]LQJRILQWHULRUSDUWLWLRQVFDQEHYXOQHUDEOH $OWHUQDWLYHVLJQVVKDOOLGHQWLI\WKHH[LWVDQGHJUHVV
EHFDXVHRISRWHQWLDOOHDNDJHDURXQGWKHHGJH SDWK
RIWKHJOD]LQJRUEHFDXVHRIKHDWLQGXFHGJODVV
EUHDNDJH 7KLV SURYLVLRQ DGGUHVVHV ERWK ™ 6LJQV DQG H[LW SDWK LGHQWLILFDWLRQ DUH VWLOO
FRQFHUQV 7KH VSULQNOHU V\VWHP VKRXOG EH UHTXLUHGEXWORFDWLRQLVSHUPLWWHGWREHIOH[LEOH
SURYLGHG RQ ERWK VLGHV RI WKH ZDOO FRQWDLQLQJ ZLWKLQWKHOLPLWVRIIXQFWLRQDOLW\
WKHJOD]LQJ
$XWRPDWLF ILUHH[WLQJXLVKLQJ V\VWHPV
 6WDLUZD\UDLOLQJV *UDQGVWDLUZD\VVKDOO (YHU\ KLVWRULFDO EXLOGLQJ WKDW FDQQRW EH PDGH WR
EH DFFHSWHG ZLWKRXW FRPSO\LQJ ZLWK WKH KDQGUDLO FRQIRUPWRWKHFRQVWUXFWLRQUHTXLUHPHQWVVSHFLILHG
DQG JXDUG UHTXLUHPHQWV ([LVWLQJ KDQGUDLOV DQG LQWKH6%&IRUWKHRFFXSDQF\RUXVHDQGWKDW
JXDUGVDWDOOVWDLUZD\VVKDOOEHSHUPLWWHGWRUHPDLQ FRQVWLWXWHVDGLVWLQFWILUHKD]DUGVKDOOEHGHHPHGWR
SURYLGHGWKH\DUHQRWVWUXFWXUDOO\GDQJHURXV EH LQ FRPSOLDQFH LI SURYLGHG ZLWK DQ DSSURYHG
™ 1HZFRQVWUXFWLRQUHTXLUHPHQWVIRUKDQGUDLODQG DXWRPDWLFILUHH[WLQJXLVKLQJV\VWHP
JXDUGUDLOKHLJKWKDYHLQFUHDVHGRYHUWKH\HDUV

6%&&& 

&+$37(5²+,6725,&%8,/',1*6

([FHSWLRQ:KHQWKHEXLOGLQJRIILFLDODSSURYHVDQ FRPSOLDQFH ZLWK DFFHVVLELOLW\ SURYLVLRQV )RU

DOWHUQDWLYHOLIHVDIHW\V\VWHP H[DPSOH FRPSOLDQFH ZLWK GRRU ZLGWK
UHTXLUHPHQWV PD\ QHFHVVLWDWH WKH UHPRYDO RI
™ 7KLV WHUP LV WKH JHQHULF QDPH IRU DOO W\SHV RI DQ H[LVWLQJ VHW RI GRRUV WKDW LV FULWLFDO WR WKH
DXWRPDWLFILUHH[WLQJXLVKLQJV\VWHPVLQFOXGLQJ KLVWRULFFKDUDFWHURIWKHEXLOGLQJ7RDVVLVWWKH
WKHPRVWFRPPRQW\SHWKHDXWRPDWLFVSULQNOHU EXLOGLQJ RIILFLDO LQ GHWHUPLQLQJ LI WKH UHTXLUHG
V\VWHP 6HH 6%&  6HFWLRQ  IRU SURYLVLRQV DUH GHWULPHQWDO WR WKH KLVWRULF
UHTXLUHPHQWV IRU SDUWLFXODU DOWHUQDWLYH VLJQLILFDQFH UHFRPPHQGHG JXLGHOLQHV KDYH
DXWRPDWLF ILUHH[WLQJXLVKLQJ V\VWHPV VXFK DV EHHQ LQFRUSRUDWHG LQWR $SSHQGL[ % 6HFWLRQ
ZHWFKHPLFDO GU\FKHPLFDO IRDP FDUERQ %
GLR[LGHKDORQDQGFOHDQDJHQWV\VWHPV ™ 7KLV VHFWLRQ LV LQWHQGHG WR H[HPSW VXFK
™ 1RWH WKDW WKH DOWHUQDWLYH LV VSHFLILF WR WKH FRQGLWLRQV LQ RUGHU WR PDLQWDLQ WKH KLVWRULF
FRQVWUXFWLRQUHTXLUHPHQWVLHKHLJKWDQGDUHD FKDUDFWHU RI WKH EXLOGLQJ %HFDXVH VRPH
OLPLWDWLRQV FRQVWUXFWLRQ W\SH DQG SDVVLYH ILUH GHJUHHRIDFFHVVLELOLW\LVGHVLUHGLQDOOIDFLOLWLHV
UHVLVWDQFH 6HFWLRQ  VWDWHV WKDW DQ 6HFWLRQV  WKURXJK  DOORZ IRU
DXWRPDWLF ILUHH[WLQJXLVKLQJ V\VWHP LV QRW D DOWHUQDWLYHV ,Q DGGLWLRQ WKHUH LV DQ H[FHSWLRQ
VXEVWLWXWH IRU WKH UHGXFWLRQ LQ WKH QXPEHU RI WKDW ZRXOG H[HPSW WKH 7\SH % GZHOOLQJ RU
H[LWVIURPDIDFLOLW\ VOHHSLQJ XQLW UHTXLUHPHQWV IRU KLVWRULFDO
™ 7KHH[FHSWLRQZRXOGDOORZWKHXWLOL]DWLRQRIDQ EXLOGLQJVLQFOXGLQJWKRVHXQGHUJRLQJD/HYHO
DOWHUQDWLYHOLIHVDIHW\V\VWHPKRZHYHULWZRXOG DOWHUDWLRQ 7KLV H[FHSWLRQ LV LPSRUWDQW LQ WKDW
KDYHWRILUVWEHDSSURYHGE\WKHEXLOGLQJRIILFLDO RZQHUV ZLOO QRW QHHG WR GHPRQVWUDWH WKDW WKH
RUWKHORFDODXWKRULW\KDYLQJMXULVGLFWLRQ DGGLWLRQ RI VXFK XQLWV ZLOO WKUHDWHQ RU GHVWUR\
WKHKLVWRULFDOFKDUDFWHURIWKHEXLOGLQJ
™ ,QDQHIIRUWWRLQIRUPGHVLJQHUVDQGRZQHUVRI
6(&7,21$/7(5$7,216 UHJXODWLRQV WKDW DUH QRW W\SLFDOO\ KDQGOHG
WKURXJK WKH FRGH HQIRUFHPHQW SURFHVV
 $FFHVVLELOLW\ UHTXLUHPHQWV  7KH LQIRUPDWLRQ RQ WKH $PHULFDQV ZLWK 'LVDELOLWLHV
SURYLVLRQV RI VHFWLRQV   DQG  DV $FW $FFHVVLELOLW\ *XLGHOLQHV $'$$*
DSSOLFDEOH VKDOO DSSO\ WR IDFLOLWLHV GHVLJQDWHG DV UHTXLUHPHQWV IRU GLVSOD\V DVVRFLDWHG ZLWK
KLVWRULFVWUXFWXUHVWKDW XQGHUJR DOWHUDWLRQVXQOHVV KLVWRULFDO EXLOGLQJV KDYH EHHQ LQFOXGHG LQ
WHFKQLFDOO\LQIHDVLEOH:KHUHFRPSOLDQFHZLWKWKH $SSHQGL[%6HFWLRQ%
UHTXLUHPHQWV IRU DFFHVVLEOH URXWHV HQWUDQFHV RU  6LWH DUULYDO SRLQWV  $W OHDVW RQH
WRLOHWURRPVZRXOGWKUHDWHQRUGHVWUR\WKHKLVWRULF DFFHVVLEOH URXWH IURP D VLWH DUULYDO SRLQW WR DQ
VLJQLILFDQFH RI WKH EXLOGLQJ RU IDFLOLW\ DV DFFHVVLEOHHQWUDQFHVKDOOEHSURYLGHG
GHWHUPLQHGE\WKHEXLOGLQJRIILFLDOWKHDOWHUQDWLYH
UHTXLUHPHQWVRIVHFWLRQVWKURXJK ™ )XOO FRPSOLDQFH ZRXOG UHTXLUH DQ DFFHVVLEOH
IRUWKDWHOHPHQWVKDOOEHSHUPLWWHG URXWH IURP DOO VLWH DUULYDO SRLQWV ,I WKLV
UHTXLUHPHQW ZRXOG DGYHUVHO\ DIIHFW WKH
([FHSWLRQ  7\SH % GZHOOLQJ RU VOHHSLQJ XQLWV KLVWRULFDO VLJQLILFDQFH RI WKH EXLOGLQJ WKH
UHTXLUHG E\ VHFWLRQ  RI 6%&  DUH QRW DYDLODEOHDOWHUQDWLYHLVWRSURYLGHDQDFFHVVLEOH
UHTXLUHGWREHSURYLGHGLQKLVWRULFDOEXLOGLQJV URXWHIURPRQHVLWHDUULYDOSRLQWWRDQDFFHVVLEOH
HQWUDQFH
™ 7KH UHJXODWLRQV RI LQGLYLGXDO DGRSWLQJ
MXULVGLFWLRQVPD\SURYLGHDGGLWLRQDOJXLGDQFHRU  0XOWLOHYHO EXLOGLQJV DQG
OLPLWDWLRQVRQWKHXVHRIWKLVVHFWLRQ7KHEDVLF IDFLOLWLHV$QDFFHVVLEOHURXWHIURPDQ DFFHVVLEOH
$PHULFDQV ZLWK 'LVDELOLWLHV $FW $'$ HQWUDQFH WR SXEOLF VSDFHV RQ WKH OHYHO RI WKH
UHTXLUHPHQWV SHUPLW H[FHSWLRQV DQG DFFHVVLEOHHQWUDQFHVKDOOEHSURYLGHG
DOWHUQDWLYHV IRU KLVWRULF EXLOGLQJV 7KHVH
PLQLPXP UHTXLUHPHQWV SURYLGH UHDVRQDEOH ™ ,W LV QRW UHTXLUHG LQ EXLOGLQJ DOWHUDWLRQ WKDW
DFFRPPRGDWLRQVIRUEXLOGLQJXVHUV DFFHVVLELOLW\WRVSDFHVDERYHRUEHORZWKHOHYHO
™ )RU WKLV VHFWLRQ WR EH DSSOLFDEOH WKH EXLOGLQJ RI DFFHVVLEOH HQWUDQFH EH SURYLGHG )XOO
PXVWEHUHJLVWHUHGDVKLVWRULF+LVWRULFEXLOGLQJV FRPSOLDQFHIRUQHZFRQVWUXFWLRQPLJKWUHTXLUH
DUH WUHDWHG PXFK WKH VDPH DV SURYLGHG IRU LQ DQDFFHVVLEOHURXWHWROHYHOVDERYHRUEHORZDV
6HFWLRQV   DQG  LQ WKDW D KLVWRULF ZHOO DV WKURXJKRXW WKH HQWUDQFH OHYHO ,I WKLV
EXLOGLQJ WKDW LV DOWHUHG LV H[SHFWHG WR FRPSO\ UHTXLUHPHQW ZRXOG DGYHUVHO\ DIIHFW WKH
ZLWK DFFHVVLELOLW\ UHTXLUHPHQWV XQOHVV KLVWRULFDO VLJQLILFDQFH RI WKH EXLOGLQJ WKH
WHFKQLFDO LQIHDVLELOLW\ FDQ EH GHPRQVWUDWHG DOWHUQDWLYH LV WR SURYLGH DQ DFFHVVLEOH URXWH
+RZHYHU WKLV VHFWLRQ DOVR JRHV RQ WR IURPWKHDFFHVVLEOHHQWUDQFHWRDOOVSDFHVRSHQ
DFNQRZOHGJH WKDW WKH KLVWRULF FKDUDFWHU RI D WRWKHSXEOLFRQWKHHQWUDQFHOHYHO,IHOHYDWRUV
EXLOGLQJ PD\ EH DGYHUVHO\ DIIHFWHG E\ VWULFW DUHSURYLGHGEXWDUHQRWDFFHVVLEOHVLJQDJHLQ

6%&&& 

&+$37(5²+,6725,&%8,/',1*6

DFFRUGDQFH ZLWK 6%&  6HFWLRQ  LV 6(&7,21&+$1*(2)

UHTXLUHG 2&&83$1&<
 (QWUDQFHV  $W OHDVW RQH PDLQ  *HQHUDO+LVWRULFEXLOGLQJVXQGHUJRLQJD
HQWUDQFHVKDOOEHDFFHVVLEOH FKDQJH RI RFFXSDQF\ VKDOO FRPSO\ ZLWK WKH
([FHSWLRQV DSSOLFDEOH SURYLVLRQV RI &KDSWHU  H[FHSW DV
VSHFLILFDOO\ SHUPLWWHG LQ WKLV FKDSWHU :KHQ
 ,IDPDLQHQWUDQFHFDQQRWEHPDGHDFFHVVLEOH &KDSWHU  UHTXLUHV FRPSOLDQFH ZLWK VSHFLILF
DQ DFFHVVLEOH QRQSXEOLF HQWUDQFH WKDW LV UHTXLUHPHQWVRI&KDSWHU&KDSWHURU&KDSWHU
XQORFNHGZKLOHWKHEXLOGLQJLVRFFXSLHGVKDOO DQG ZKHQ WKRVH UHTXLUHPHQWV DUH VXEMHFW WR WKH
EHSURYLGHGRU H[FHSWLRQV LQ 6HFWLRQ  WKH VDPH H[FHSWLRQV
 ,IDPDLQHQWUDQFHFDQQRWEHPDGHDFFHVVLEOH VKDOODSSO\WRWKLVVHFWLRQ
D ORFNHG DFFHVVLEOH HQWUDQFH ZLWK D
QRWLILFDWLRQV\VWHPRUUHPRWHPRQLWRULQJVKDOO ™ 2FFXSDQF\ FKRLFH LGHDOO\ PLQLPL]HV FRGH
EHSURYLGHG FRQIOLFWV DQG WKH QHFHVVLW\ IRU FKDQJH
$FFRUGLQJ WR WKH 6HFUHWDU\ RI WKH ,QWHULRU¶V
™ $OWKRXJKXQLIRUPEXLOGLQJDFFHVVLVWKHUXOHIRU 6WDQGDUGVIRU7UHDWPHQWRI+LVWRULF3URSHUWLHV
QHZ FRQVWUXFWLRQ ROGHU EXLOGLQJV PD\ KDYH ³$SURSHUW\ZLOOEHXVHGDVLWZDVKLVWRULFDOO\RU
PDLQHQWUDQFHVWKDWDUHERWKLQDFFHVVLEOHDQG EH JLYHQ D QHZ XVH WKDW PD[LPL]HV WKH
DVLJQLILFDQWHOHPHQWRIWKHEXLOGLQJ¶VFKDUDFWHU UHWHQWLRQ RI GLVWLQFWLYH PDWHULDOV IHDWXUHV
,Q WKHVH FDVHV SURYLGLQJ DFFHVV E\ DQ VSDFHV DQG VSDWLDO UHODWLRQVKLSV´ +RZHYHU
DOWHUQDWLYHURXWHLVGHHPHGWRPHHWWKHSULPDU\ HFRQRPLF SUHVVXUHV PD\ GLFWDWH WKDW D
LQWHQWRIWKHDFFHVVLELOLW\UHJXODWLRQV VWUXFWXUHEHXVHGLQDGLIIHUHQWRFFXSDQF\WKDQ
™ )XOOFRPSOLDQFHZRXOGUHTXLUHSHUFHQWRIWKH WKDWIRUZKLFKLWZDVLQWHQGHG
SXEOLF HQWUDQFHV WR EH DFFHVVLEOH DV ZHOO DV
DQ\ RI WKH VSHFLDO W\SHV RI HQWUDQFHV OLVWHG LQ  %XLOGLQJ DUHD  7KH DOORZDEOH IORRU DUHD
6HFWLRQ  ,I WKLV UHTXLUHPHQW ZRXOG IRU KLVWRULF EXLOGLQJV XQGHUJRLQJ D FKDQJH RI
DGYHUVHO\DIIHFWWKHKLVWRULFDOVLJQLILFDQFHRIWKH RFFXSDQF\ VKDOO EH SHUPLWWHG WR H[FHHG E\ 
EXLOGLQJRQO\RQHPDLQHQWUDQFHLVUHTXLUHGWR SHUFHQWWKHDOORZDEOHDUHDVVSHFLILHGLQ&KDSWHU
EHPDGHDFFHVVLEOH,IDPDLQHQWUDQFHFDQQRW RI6%&
EH PDGH DFFHVVLEOH WKHQ DQ HPSOR\HH RU
VHUYLFHHQWUDQFHPD\VHUYHDVWKH DFFHVVLEOH ™ 7KLVVHFWLRQSHUPLWVDQDOORZDEOHIORRUDUHDLQ
HQWUDQFH SURYLGHG WKDW LW UHPDLQV XQORFNHG H[FHVV RI  SHUFHQW DV UHTXLUHG E\ WKH 6%&
ZKHQ WKH EXLOGLQJ LV RSHQ $OWHUQDWLYHO\ LI WKH 7KLVLVFULWLFDOVLQFHFKDQJLQJWKHW\SHRI
HQWUDQFH LV ORFNHG VRPH W\SH RI QRWLILFDWLRQ FRQVWUXFWLRQ WR EH DEOH WR PHHW WKH FXUUHQW
V\VWHP HJ GRRUEHOO LQWHUFRP RU UHPRWH EXLOGLQJDUHDUHTXLUHPHQWVPD\EHYHU\GLIILFXOW
PRQLWRULQJ HJ VHFXULW\ FDPHUD LV SURYLGHG DQGZLOOOLNHO\DIIHFWWKHKLVWRULFDOIHDWXUHVRIWKH
VRWKDWDSHUVRQLQVLGHWKHIDFLOLW\ZRXOGNQRZ EXLOGLQJ7KLVVHFWLRQGRHVQRWSURKLELWWKHXVH
WR JR WR WKDW HQWUDQFH WR DGPLW VRPHRQH RI DUHD LQFUHDVHV IURP DXWRPDWLF VSULQNOHU
6LJQDJH PXVW EH SURYLGHG DW DFFHVVLEOH DQG V\VWHPVDQGIURQWDJH
LQDFFHVVLEOHHQWUDQFHVLQDFFRUGDQFHZLWK6%&  /RFDWLRQRQSURSHUW\+LVWRULFVWUXFWXUHV
6HFWLRQVDQG XQGHUJRLQJ D FKDQJH RI XVH WR D KLJKHU KD]DUG
 7RLOHW DQG EDWKLQJ IDFLOLWLHV FDWHJRU\LQDFFRUGDQFHZLWKVHFWLRQPD\XVH
:KHUH WRLOHW URRPV DUH SURYLGHG DW OHDVW RQH DOWHUQDWLYH PHWKRGV WR FRPSO\ ZLWK WKH ILUH
DFFHVVLEOH IDPLO\ RU DVVLVWHGXVH WRLOHW URRP UHVLVWDQFH DQG H[WHULRU RSHQLQJ SURWHFWLYH
FRPSO\LQJZLWKVHFWLRQRI6%&VKDOO UHTXLUHPHQWV6XFK DOWHUQDWLYHVVKDOOFRPSO\ZLWK
EHSURYLGHG 6HFWLRQ
™ ,IDOWHULQJWKHH[LVWLQJIDFLOLWLHVWREHDFFHVVLEOH ™ :KHQFKDQJLQJWRDKLJKHUKD]DUGFDWHJRU\D
ZRXOG DGYHUVHO\ DIIHFW WKH KLVWRULFDO EXLOGLQJ VKRXOG EH HYDOXDWHG IRU PHDQV WR
VLJQLILFDQFHRIWKHEXLOGLQJRQO\RQHEDWKURRP PDQDJHWKHQHZRULQFUHDVHGKD]DUGV/LWHUDO
WKDW FRPSOLHV ZLWK WKH DFFHVVLEOH IDPLO\ RU FRGHFRPSOLDQFH PD\QRW EHWKHRQO\ZD\RU
DVVLVWHGXVH WRLOHWEDWKLQJ UHTXLUHPHQWV LQ WKHEHVWZD\WRDFFRPSOLVKWKLVREMHFWLYHLQD
6%&6HFWLRQLVUHTXLUHG6LJQDJH KLVWRULFEXLOGLQJ
PXVWEHSURYLGHGDWLQDFFHVVLEOHWRLOHWURRPVLQ
 2FFXSDQF\ VHSDUDWLRQ  5HTXLUHG
DFFRUGDQFHZLWK6%&6HFWLRQ
RFFXSDQF\ VHSDUDWLRQV RI  KRXU PD\ EH RPLWWHG
ZKHQ WKH EXLOGLQJ LV SURYLGHG ZLWK DQ DSSURYHG
DXWRPDWLFVSULQNOHUV\VWHPWKURXJKRXW

6%&&& 

&+$37(5²+,6725,&%8,/',1*6

™ 6XEVWLWXWLRQRIDXWRPDWLFH[WLQJXLVKLQJV\VWHPV ™ 7KHVHDOWHUQDWLYHVZRXOGEHXVHGSULPDULO\E\
IRU SDVVLYH SURWHFWLRQ LV HVWDEOLVKHG DV DQ QRQUHVLGHQWLDO RFFXSDQFLHV DV UHVLGHQWLDO
DFFHSWDEOHSURFHGXUH RFFXSDQFLHVZRXOGXVH6HFWLRQ
 5RRIFRYHULQJ 5HJDUGOHVVRIRFFXSDQF\  )LQLVKHV  :KHUH LQWHULRUILQLVK PDWHULDOV
RUXVHJURXSURRIFRYHULQJPDWHULDOVQRWOHVVWKDQ DUHUHTXLUHGWRKDYHDIODPHVSUHDGLQGH[RI&ODVV
&ODVV&ZKHQWHVWHGLQDFFRUGDQFHZLWK$670( &RUEHWWHUZKHQWHVWHGLQDFFRUGDQFHZLWK$670
 RU 8/  VKDOO EH SHUPLWWHG ZKHUH D ILUH (RU8/H[LVWLQJQRQFRQIRUPLQJPDWHULDOV
UHWDUGDQWURRIFRYHULQJLVUHTXLUHG VKDOOEHVXUIDFHGZLWKDSSURYHGILUHUHWDUGDQWSDLQW
™ 5RRIFRYHULQJUHTXLUHPHQWVDUHDVSUHDGRIILUH
RUILQLVK
LVVXHILUVWWRSUHYHQWILUHVSUHDGWRWKHEXLOGLQJ ([FHSWLRQ  ([LVWLQJ QRQFRQIRUPLQJ PDWHULDOV
LQ TXHVWLRQ DQG VHFRQG WR NHHS EXUQLQJ QHHG QRW EH VXUIDFHG ZLWK DQ DSSURYHG ILUH
EUDQGVJHQHUDWHGE\DILUHLQWKDWEXLOGLQJIURP UHWDUGDQW SDLQW RU ILQLVK ZKHUH WKH EXLOGLQJ LV
LJQLWLQJ RWKHU EXLOGLQJV LQ D JHQHUDO
HTXLSSHG WKURXJKRXW ZLWK DQ DXWRPDWLF VSULQNOHU
FRQIODJUDWLRQ +RZHYHU LI D OLPLWHG QXPEHU RI
EXLOGLQJV GR QRW PHHW WKLV UHTXLUHPHQW WKH V\VWHP LQVWDOOHG LQ DFFRUGDQFH ZLWK WKH 6%& 
KD]DUGLVQRWVLJQLILFDQWO\LQFUHDVHG DQG WKH QRQFRQIRUPLQJ PDWHULDOV FDQ EH
VXEVWDQWLDWHGDVEHLQJKLVWRULFLQFKDUDFWHU
 0HDQVRIHJUHVV([LVWLQJGRRURSHQLQJV
DQGFRUULGRUDQGVWDLUZD\ZLGWKVOHVVWKDQWKRVHWKDW ™ 7KLV VHFWLRQ VHWV D PLQLPXP IODPH VSUHDG
LQGH[IRULQWHULRUILQLVKHVLQKLVWRULFVWUXFWXUHV
ZRXOGEHDFFHSWDEOHIRUQRQKLVWRULFEXLOGLQJVXQGHU
$VDQRSWLRQILUHUHWDUGDQWSDLQWFDQEHXVHGWR
WKHVHSURYLVLRQVVKDOOEHDSSURYHGSURYLGHGWKDWLQ PDNHWKHFXUUHQWKLVWRULFPDWHULDOVFRPSO\)LUH
WKH RSLQLRQ RI WKH EXLOGLQJ RIILFLDO WKHUH LV UHWDUGDQWV KDYH WKH HIIHFW RI VORZLQJ WKH
VXIILFLHQW ZLGWK DQG KHLJKW IRU D SHUVRQ WR SDVV GHYHORSPHQWDQGVSUHDGRIILUH7KHH[FHSWLRQ
WKURXJKWKHRSHQLQJRUWUDYHUVHWKHH[LWDQGWKDWWKH ZKLFK UHTXLUHV DQ DXWRPDWLF VSULQNOHU V\VWHP
FDSDFLW\ RI WKH H[LW V\VWHP LV DGHTXDWH IRU WKH FDQEHXVHGZKHUHFRQGLWLRQVDUHXQVXLWDEOHIRU
RFFXSDQWORDGRUZKHUHRWKHURSHUDWLRQDOFRQWUROV WKHXVHRILQWXPHVFHQWSDLQWRUYDUQLVKRURWKHU
WR OLPLW RFFXSDQF\ DUH DSSURYHG E\ WKH EXLOGLQJ ILUHUHWDUGDQWILQLVKHV
RIILFLDO 2QHKRXU ILUHUHVLVWDQW DVVHPEOLHV
™ 7KLVSURYLVLRQZRXOGSHUPLWWKHFRQWLQXHGXVH :KHUH KRXU ILUHUHVLVWDQFHUDWHG FRQVWUXFWLRQ LV
RI D VWUXFWXUH WKDW LV QR PRUH KD]DUGRXV WKDQ UHTXLUHG E\ WKHVH SURYLVLRQV LW QHHG QRW EH
EHIRUH UHKDELOLWDWLRQ ZLWK PLQLPXP VWDQGDUGV SURYLGHGUHJDUGOHVVRIFRQVWUXFWLRQRURFFXSDQF\
RIXVDELOLW\ ZKHUHWKHH[LVWLQJZDOODQGFHLOLQJILQLVKLVZRRG
 'RRU VZLQJ  :KHQ DSSURYHG E\ WKH ODWKDQGSODVWHU
EXLOGLQJ RIILFLDO H[LVWLQJ IURQW GRRUV QHHG QRW ™ 7KH VXEVWLWXWLRQ RI VWDQGDUG ODWK DQG SODVWHU
VZLQJLQWKHGLUHFWLRQRIH[LWWUDYHOSURYLGHGWKDW FRQVWUXFWLRQ IRU KRXU ILUHUHVLVWDQFHUDWHG
RWKHU DSSURYHGH[LWVKDYLQJ VXIILFLHQW FDSDFLW\WR ZDOO FRQVWUXFWLRQ LV D ZHOOHVWDEOLVKHG
VHUYHWKHWRWDORFFXSDQWORDGDUHSURYLGHG DOWHUQDWLYH3UHVVHGWLQFHLOLQJVDUHDQH[DPSOH
RI WKLV LVVXH 6DXGL &RPPLVVLRQ IRU 7RXULVP
™ 3URYLVLRQV IRU QHZ FRQVWUXFWLRQ ZRXOG UHTXLUH DQG 1DWLRQDO +HULWDJH 6&7+ ZLOO SURYLGH
WKDW H[LW GRRUV VZLQJ LQ WKH GLUHFWLRQ RI H[LW DGGLWLRQDO JXLGDQFH RQ WKLV VXEMHFW DQG
WUDYHOIRUDQRFFXSDQWORDGH[FHHGLQJ7KLV DOWHUQDWLYHV
VHFWLRQSUHVFULEHVDPHWKRGE\ZKLFKH[LVWLQJ
HQWU\ GRRUV FDQ EH DOORZHG WR VZLQJ LQWR WKH 6WDLUZD\V DQG JXDUGV  ([LVWLQJ
EXLOGLQJ UDWKHU WKDQ LQ WKH GLUHFWLRQ RI HJUHVV VWDLUZD\V VKDOO FRPSO\ ZLWK WKH UHTXLUHPHQWV RI
WUDYHO WKHVH SURYLVLRQV7KH EXLOGLQJ RIILFLDOVKDOO JUDQW
 7UDQVRPV  ,Q FRUULGRUZDOOVUHTXLUHGE\ DOWHUQDWLYHVIRUVWDLUZD\VDQGJXDUGVLIDOWHUQDWLYH
WKHVHSURYLVLRQVWREHILUHUHVLVWDQFHUDWHGH[LVWLQJ VWDLUZD\VDUHIRXQGWREHDFFHSWDEOHRUDUHMXGJHG
WUDQVRPVPD\EHPDLQWDLQHGLIIL[HGLQWKHFORVHG WR PHHW WKH LQWHQW RI WKHVH SURYLVLRQV ([LVWLQJ
SRVLWLRQDQGIL[HGZLUHGJODVVVHWLQDVWHHOIUDPH VWDLUZD\VVKDOOFRPSO\ZLWK6HFWLRQ
RURWKHUDSSURYHGJOD]LQJVKDOOEHLQVWDOOHGRQRQH ([FHSWLRQ)RUEXLOGLQJVOHVVWKDQPH[LVWLQJ
VLGHRIWKHWUDQVRP FRQGLWLRQVDUHSHUPLWWHGWRUHPDLQDWDOOVWDLUZD\V
([FHSWLRQ  7UDQVRPV FRQIRUPLQJ WR 6HFWLRQ DQGJXDUGV
VKDOOEHDFFHSWHG ™ 7KLVSURYLVLRQJLYHVDQRSSRUWXQLW\WRDQDO\]H
WKH VWDLUZD\V¶ IXQFWLRQDOLW\ DV DQ H[LW DQG WR
DOWHURQO\WKRVHHOHPHQWVWKDWDUHMXGJHGWREH

6%&&& 

&+$37(5²+,6725,&%8,/',1*6

XQVDIH RU LQDGHTXDWH 7KH H[FHSWLRQ DOORZV $'$ UHTXLUHPHQWV SHUPLW H[FHSWLRQV DQG
H[LVWLQJ VWDLUZD\ FRQGLWLRQV WR UHPDLQ IRU DOWHUQDWLYHV IRU KLVWRULF EXLOGLQJV 7KHVH
VPDOOHU EXLOGLQJV WDNLQJ LQWR DFFRXQW WKH PLQLPXP UHTXLUHPHQWV SURYLGH UHDVRQDEOH
VKRUWHUWLPHUHTXLUHGIRUHJUHVV DFFRPPRGDWLRQVIRUEXLOGLQJXVHUV
™ )RU WKLV VHFWLRQ WR EH DSSOLFDEOH WKH EXLOGLQJ
([LW VLJQV  7KH EXLOGLQJ RIILFLDO PD\ PXVWEHUHJLVWHUHGDVKLVWRULF+LVWRULFEXLOGLQJV
DFFHSW DOWHUQDWLYH H[LW VLJQ ORFDWLRQV ZKHUH VXFK DUH WUHDWHG PXFK WKH VDPH DV SURYLGHG IRU LQ
VLJQV ZRXOG GDPDJH WKH KLVWRULF FKDUDFWHU RI WKH 6HFWLRQ  LQ WKDW D KLVWRULF EXLOGLQJ WKDW
EXLOGLQJRUVWUXFWXUH6XFKVLJQVVKDOOLGHQWLI\WKH KDV XQGHUJRQH D FKDQJH RI RFFXSDQF\ LV
H[LWVDQGH[LWSDWK H[SHFWHG WR FRPSO\ ZLWK DFFHVVLELOLW\
UHTXLUHPHQWVXQOHVVWHFKQLFDOLQIHDVLELOLW\FDQ
™ 6LJQV DQG H[LW SDWK LGHQWLILFDWLRQ DUH VWLOO
EH GHPRQVWUDWHG +RZHYHU WKLV VHFWLRQ DOVR
UHTXLUHGEXWORFDWLRQLVSHUPLWWHGWREHIOH[LEOH
JRHV RQ WR DFNQRZOHGJH WKDW WKH KLVWRULF
ZLWKLQOLPLWVRIIXQFWLRQDOLW\
FKDUDFWHU RI D EXLOGLQJ PD\ EH DGYHUVHO\
([LW VWDLU OLYH ORDG  ([LVWLQJ KLVWRULF DIIHFWHGE\VWULFWFRPSOLDQFHZLWKDFFHVVLELOLW\
VWDLUZD\VLQEXLOGLQJVFKDQJHGWRD*URXS5RU SURYLVLRQV)RUH[DPSOHFRPSOLDQFHZLWKGRRU
5 RFFXSDQF\ VKDOO EH DFFHSWHG ZKHUH LW FDQ EH ZLGWK UHTXLUHPHQWV PD\ QHFHVVLWDWH WKH
UHPRYDORIDQH[LVWLQJVHWRIGRRUVWKDWLVFULWLFDO
VKRZQ WKDW WKH VWDLUZD\ FDQ VXSSRUW D  NJP
WR WKH KLVWRULF FKDUDFWHU RI WKH EXLOGLQJ 7R
OLYHORDG DVVLVWWKH EXLOGLQJRIILFLDO LQGHWHUPLQLQJLIWKH
™ ,QWKHFDVHRIDEXLOGLQJFKDQJHGWRD*URXS5 UHTXLUHG SURYLVLRQV DUH GHWULPHQWDO WR WKH
RFFXSDQF\ WKH OLNHOLKRRG LV WKDW VWDLUV ZLOO EH KLVWRULF VLJQLILFDQFH UHFRPPHQGHG JXLGHOLQHV
GHVLJQHG WR D KLJKHU FDSDFLW\ WKDQ XVH ZRXOG KDYH EHHQ LQFRUSRUDWHG LQWR $SSHQGL[ %
UHTXLUH 7R VXEVWDQWLDWH WKDW OLNHOLKRRG 6HFWLRQ%
VWUXFWXUDO FDOFXODWLRQV RU RWKHU GDWD XVLQJ WKH ™ 7KLV VHFWLRQ LV LQWHQGHG WR H[HPSW VXFK
VWUXFWXUDO SURSHUWLHV RI WKH H[LVWLQJ VWDLU FRQGLWLRQV LQ RUGHU WR PDLQWDLQ WKH KLVWRULF
FRQVWUXFWLRQFRXOGEHVXEPLWWHGWRWKHEXLOGLQJ FKDUDFWHU RI WKH EXLOGLQJ %HFDXVH VRPH
RIILFLDOIRUDSSURYDO GHJUHHRIDFFHVVLELOLW\LVGHVLUHGLQDOOIDFLOLWLHV
6HFWLRQVWKURXJKDOORZIRU
1DWXUDOOLJKW:KHQLWLVGHWHUPLQHGE\ DOWHUQDWLYHV ,Q DGGLWLRQ WKHUH LV DQ H[FHSWLRQ
WKH EXLOGLQJ RIILFLDO WKDW FRPSOLDQFH ZLWK WKH WKDW ZRXOG H[HPSW WKH 7\SH % GZHOOLQJ RU
QDWXUDO OLJKW UHTXLUHPHQWV RI 6HFWLRQ  ZLOO VOHHSLQJ XQLW UHTXLUHPHQWV IRU KLVWRULFDO
OHDGWRORVVRIKLVWRULFFKDUDFWHURUKLVWRULFPDWHULDOV EXLOGLQJVLQFOXGLQJWKRVHXQGHUJRLQJD/HYHO
LQWKHEXLOGLQJWKHH[LVWLQJOHYHORIQDWXUDOOLJKWLQJ DOWHUDWLRQ 7KLV H[FHSWLRQ LV LPSRUWDQW LQ WKDW
VKDOOEHFRQVLGHUHGDFFHSWDEOH RZQHUV ZLOO QRW QHHG WR GHPRQVWUDWH WKDW WKH
DGGLWLRQ RI VXFK XQLWV ZLOO WKUHDWHQ RU GHVWUR\
™ $WWKHWLPHWKHSURYLVLRQVUHTXLULQJQDWXUDOOLJKW WKHKLVWRULFDOFKDUDFWHURIWKHEXLOGLQJ
LQ UHVLGHQWLDO RFFXSDQFLHV ZHUH HQDFWHG WKH\ ™ ,QDQHIIRUWWRLQIRUPGHVLJQHUVDQGRZQHUVRI
ZHUHDQHFHVVDU\SXEOLFKHDOWKUHIRUP$WWKLV UHJXODWLRQV WKDW DUH QRW W\SLFDOO\ KDQGOHG
WLPHGHYLDWLRQVIURPWKHVHUHTXLUHPHQWVZRXOG WKURXJK WKH FRGH HQIRUFHPHQW SURFHVV
SUREDEO\QRWKDYHKHDOWKFRQVHTXHQFHV LQIRUPDWLRQ RQ WKH $'$$* UHTXLUHPHQWV IRU
$FFHVVLELOLW\ UHTXLUHPHQWV  7KH GLVSOD\V DVVRFLDWHG ZLWK KLVWRULFDO EXLOGLQJV
SURYLVLRQVRI6HFWLRQVKDOODSSO\WRIDFLOLWLHV KDYH EHHQ LQFOXGHG LQ $SSHQGL[ % 6HFWLRQ
%
GHVLJQDWHG DV KLVWRULF VWUXFWXUHV WKDW XQGHUJR D
FKDQJHRIRFFXSDQF\XQOHVVWHFKQLFDOO\LQIHDVLEOH 
:KHUH FRPSOLDQFH ZLWK WKH UHTXLUHPHQWV IRU
DFFHVVLEOHURXWHVUDPSVHQWUDQFHVRUWRLOHWURRPV
6(&7,216758&785$/
ZRXOGWKUHDWHQRUGHVWUR\WKHKLVWRULFVLJQLILFDQFH  *HQHUDO+LVWRULFEXLOGLQJVVKDOOFRPSO\
RI WKH EXLOGLQJ RU IDFLOLW\ DV GHWHUPLQHG E\ WKH ZLWK WKH DSSOLFDEOH VWUXFWXUDO SURYLVLRQV IRU WKH
DXWKRULW\ KDYLQJ MXULVGLFWLRQ WKH DOWHUQDWLYH ZRUNDVFODVVLILHGLQ&KDSWHU
UHTXLUHPHQWVRI6HFWLRQVWKURXJK
([FHSWLRQ  7KH EXLOGLQJ RIILFLDO VKDOO EH
IRUWKRVHHOHPHQWVVKDOOEHSHUPLWWHG
DXWKRUL]HG WR DFFHSW H[LVWLQJ IORRUV DQG DSSURYH
([FHSWLRQ7\SH%GZHOOLQJRUVOHHSLQJXQLWVUHTXLUHG RSHUDWLRQDOFRQWUROVWKDWOLPLWWKHOLYHORDGRQDQ\
E\ VHFWLRQ  RI 6%&  DUH QRW UHTXLUHG WR EH VXFKIORRU
SURYLGHGLQKLVWRULFDOEXLOGLQJV
™ $Q\ SURSRVHG ZRUN RQ KLVWRULF EXLOGLQJV PXVW
™ 7KH UHJXODWLRQV RI LQGLYLGXDO DGRSWLQJ FRPSO\ZLWKWKHVWUXFWXUDOSURYLVLRQVWKDWDSSO\
MXULVGLFWLRQVPD\SURYLGHDGGLWLRQDOJXLGDQFHRU EDVHG RQ WKH QDWXUH RI WKDW ZRUN ,Q RWKHU
OLPLWDWLRQVRQWKHXVHRIWKLVVHFWLRQ7KHEDVLF ZRUGVWKHFODVVLILFDWLRQRIDQ\SURSRVHGZRUN

6%&&& 

&+$37(5²+,6725,&%8,/',1*6

LVWKHILUVWFRQVLGHUDWLRQ7KHRQO\H[FHSWLRQWR
WKLV DXWKRUL]HV WKH EXLOGLQJ RIILFLDO WR DFFHSW
H[LVWLQJIORRUVDQGDSSURYHRSHUDWLRQDOFRQWUROV
WKDW OLPLW WKH OLYH ORDG RQ DQ\ VXFK IORRU 7KLV
FRXOGEHDFKLHYHGE\SRVWLQJORDGOLPLWVLJQVLQ
FRQVSLFXRXV ORFDWLRQV $FWXDO ORDGV RQ IORRUV
DUHW\SLFDOO\OHVVWKDQWKHFRGHUHTXLUHGORDGV
7KLVVHFWLRQSHUPLWVFRQVLGHUDWLRQRIWKHDFWXDO
ORDGV DV RSSRVHG WR WKH SUREDELOLVWLF ORDGV
XVHG IRU QHZ GHVLJQ 6HFWLRQ  DOORZV
DOWHUQDWLYH DSSURDFKHV WKURXJK WKH HYDOXDWLRQ
DQGUHSRUW
 'DQJHURXV FRQGLWLRQV  &RQGLWLRQV
GHWHUPLQHGE\WKHEXLOGLQJRIILFLDOWREHGDQJHURXV
VKDOO EH UHPHGLHG 1R ZRUN VKDOO EH UHTXLUHG
EH\RQGZKDWLVUHTXLUHGWR UHPHG\WKHGDQJHURXV
FRQGLWLRQ
™ 7KH GHILQLWLRQ RI ³'DQJHURXV´ LQ 6HFWLRQ 
JLYHVILYHFRQGLWLRQVXQGHUZKLFKDEXLOGLQJD
SRUWLRQRIDEXLOGLQJ RUDQ LQGLYLGXDOVWUXFWXUDO
FRPSRQHQW LV FRQVLGHUHG GDQJHURXV $Q\
EXLOGLQJ RU VWUXFWXUDO FRPSRQHQW WKDW LV
GHWHUPLQHG WR EH GDQJHURXV SUHVHQWV DQ
XQDFFHSWDEOH ULVN WR SXEOLF VDIHW\ 6HFWLRQ
 FODULILHV WKDW D EXLOGLQJ FRQVLGHUHG
GDQJHURXVLVGHHPHGWREHXQVDIHDQGLQRUGHU
IRU DQ XQVDIH EXLOGLQJ WR UHPDLQ LQ SODFH WKH
EXLOGLQJPXVWEHPDGHVDIH
™ 7KLVVHFWLRQFODULILHVWKDWLQDKLVWRULFEXLOGLQJ
DQ\ VWUXFWXUDO UHSDLU VWUHQJWKHQLQJ RU
UHSODFHPHQW DSSOLHV RQO\ WR WKH VSHFLILF
FRPSRQHQWVRUSRUWLRQVQHFHVVDU\WRFRUUHFW
WKHGDQJHURXVFRQGLWLRQV



6%&&& 

&+$37(5²+,6725,&%8,/',1*6

™ %LEOLRJUDSK\ $FFHVVLELOLW\*XLGHOLQHV$UFKLWHFWXUDO%DUULHUV
$FW $%$ $FFHVVLELOLW\ *XLGHOLQHV
7KHIROORZLQJUHVRXUFHPDWHULDOVZHUHXVHGLQWKH
:DVKLQJWRQ '& $UFKLWHFWXUDO DQG
SUHSDUDWLRQRIWKHFRPPHQWDU\IRUWKLVFKDSWHU
7UDQVSRUWDWLRQ %DUULHUV &RPSOLDQFH %RDUG
RIWKHFRGH
-XO\
 $'$ 6WDQGDUG IRU $FFHVVLEOH 'HVLJQ
6WDQGDUGV IRU 7UHDWPHQW RI +LVWRULF 3URSHUWLHV
:DVKLQJWRQ '& 'HSDUWPHQW RI -XVWLFH
:DVKLQJWRQ '& 6HFUHWDU\ RI WKH ,QWHULRU
6HSWHPEHU

 &)5 3DUWV  DQG  )LQDO 5XOH 7KH
$PHULFDQV ZLWK 'LVDELOLWLHV $FW $'$


6%&&& 

&+$37(5²+,6725,&%8,/',1*6























7KLVSDJHOHIWLQWHQWLRQDOO\EODQN

6%&&& 

 &+$37(5²5(/2&$7('25029('%8,/',1*6

²5(/2&$7('25029('%8,/',1*6

WR LPSURYH WKH H[LVWLQJ HOHFWULFDO SOXPELQJ RU

™ *HQHUDO&RPPHQWV
+9$& V\VWHPV EH\RQG ZKDW LV QHFHVVDU\ IRU
™ &KDSWHULVDSSOLFDEOHWRDQ\EXLOGLQJWKDWLV
WKHDSSURSULDWHLQWHUIDFHZLWKWKHSXEOLFXWLOLWLHV
PRYHG RU UHORFDWHG 7KLV DOVR LQFOXGHV
DWWKHQHZORFDWLRQXQOHVVWKHEXLOGLQJRIILFLDO
UHORFDWDEOHEXLOGLQJV5HORFDWDEOHEXLOGLQJVDUH
GLVFRYHUVDQXQVDIHRUKD]DUGRXVFRQGLWLRQ
SXUSRVHO\EXLOWZLWKWKHLQWHQWLRQRIEHLQJXVHG
™ 6HFWLRQ  FRQWDLQV DQ LQVSHFWLRQ
PXOWLSOH WLPHV DW GLIIHUHQW VLWHV 5HORFDWDEOH
UHTXLUHPHQW WKDW KHOSV WR GHWHUPLQH WKH
EXLOGLQJV DUH GHILQHG LQ &KDSWHU  7KH
VWUXFWXUDO LQWHJULW\ RI WKH VWUXFWXUH¶V
UHORFDWLRQRIDEXLOGLQJZLOODXWRPDWLFDOO\FDXVH
FRPSRQHQWV DQG FRQQHFWLRQV 7KH LQVSHFWLRQ
DQ LQVSHFWLRQ DQG HYDOXDWLRQ SURFHVV WKDW
ZLOOKHOSWKHEXLOGLQJRIILFLDOWRSURSHUO\HYDOXDWH
HQDEOHVWKHMXULVGLFWLRQWRGHWHUPLQHWKHOHYHORI
DEXLOGLQJWRHQVXUHLWLVVDIHIRURFFXSDQF\
FRPSOLDQFH ZLWK WKH 6%&  DQG WKH 6DXGL
™ ,IWKHSURMHFWVFRSHLQYROYHVUHSDLUVDOWHUDWLRQV
6%&  7KHVH WZR FRGHV E\ WKHLU VFRSH
RUDFKDQJHRIRFFXSDQF\LQDGGLWLRQWRPRYLQJ
DUH DSSOLFDEOH WR H[LVWLQJ EXLOGLQJV 1RWH WKH
RUUHORFDWLQJWKHEXLOGLQJWKHQLWZLOODOVRKDYH
6%&KDVSURYLVLRQVWKDWDOVRDSSO\WRQHZ
WR FRPSO\ ZLWK WKH SURYLVLRQV RI WKH FKDSWHUV
FRQVWUXFWLRQLQDGGLWLRQWRH[LVWLQJEXLOGLQJVDQG
UHODWHG WR UHSDLU DOWHUDWLRQ RU FKDQJH RI
IDFLOLWLHV7KHLQWHQWRIWKLVUHIHUHQFHLVWRUHYLHZ
RFFXSDQF\$Q\QHZFRQVWUXFWLRQRIDFFHVVRU\
WKH DSSOLFDELOLW\ RI 6%&  6HFWLRQ  WR
HOHPHQWV WR LQFOXGH GHFNV VWDLUV IHQFHV RU
GHWHUPLQH WKH OHYHO RI FRPSOLDQFH QHFHVVDU\
DFFHVVRU\ EXLOGLQJV PXVW FRPSO\ ZLWK WKH
)RU H[DPSOH 6%&  6HFWLRQ  ,WHP 
DSSOLFDEOH FRGH UHTXLUHPHQWV IRU QHZ
UHTXLUHV WKDW WKH FRQVWUXFWLRQ DQG GHVLJQ
FRQVWUXFWLRQ
SURYLVLRQV RI &KDSWHU  DSSO\ WR H[LVWLQJ
™ 3XUSRVH
EXLOGLQJV 7KLV LV WKH FDVH UHJDUGOHVV RI DQ\
™ $ ODUJH QXPEHU RI H[LVWLQJ EXLOGLQJV DQG
UHSDLUUHPRGHOLQJDOWHUDWLRQZRUNRUFKDQJHRI
VWUXFWXUHVZRXOGQRWEHDEOHWRFRPSO\ZLWKWKH
RFFXSDQF\ RFFXUULQJ VHH WKH 6%&  DQG
FXUUHQW EXLOGLQJ FRGH UHTXLUHPHQWV IRU QHZ
6%&
FRQVWUXFWLRQ$OWKRXJKPDQ\RIWKHVHEXLOGLQJV
™ 6HFWLRQDGGUHVVHVWKHEXLOGLQJORFDWLRQRI
DUH SRWHQWLDOO\ VDOYDJHDEOH UHORFDWLRQ DQG
ORW DQG VWUXFWXUDO FRQVLGHUDWLRQV 1RWH WKDW
UHKDELOLWDWLRQ LV RIWHQ FRVW SURKLELWLYH ,W LV
HOHFWULFDO SOXPELQJ DQG KHDWLQJ YHQWLODWLQJ
QHFHVVDU\ WR UHJXODWH FRQVWUXFWLRQ LQ H[LVWLQJ
DQGDLUFRQGLWLRQLQJ+9$&DUHQRWDGGUHVVHG
EXLOGLQJV WKDW XQGHUJR DGGLWLRQV DOWHUDWLRQV
IRU UHORFDWHG EXLOGLQJV 7KLV PHDQV WKDW
UHQRYDWLRQV H[WHQVLYH UHSDLUV RU FKDQJH RI
UHORFDWHGEXLOGLQJVDUHQRWQHFHVVDULO\UHTXLUHG
RFFXSDQF\WRHQVXUHWKHVDIHW\RIWKHSXEOLF

™ 0RYHG VWUXFWXUHV WKDW DUH VXEMHFW WR UHSDLU

6(&7,21*(1(5$/ DOWHUDWLRQRUFKDQJHRIRFFXSDQF\DUHUHTXLUHG
WR FRPSO\ ZLWK WKH SURYLVLRQV RI WKH FRGH IRU
 6FRSH7KLVFKDSWHUSURYLGHVUHTXLUHPHQWV VXFKUHSDLUDOWHUDWLRQRUFKDQJHRIRFFXSDQF\
IRU UHORFDWHG RU PRYHG VWUXFWXUHV LQFOXGLQJ 7KHSUHVFULSWLYHRUSHUIRUPDQFHPHWKRGFRXOG
UHORFDWDEOHEXLOGLQJV SRWHQWLDOO\EHDSSOLHGWRDGGUHVVVXFKUHSDLUV
DOWHUDWLRQV RU FKDQJHV RI RFFXSDQF\
™ 7KLVVHFWLRQVWDWHVWKHVFRSHRI&KDSWHUDQG $GGLWLRQDOO\LWLVLPSRUWDQWWRQRWHWKDWWKH6%&
UHIHUHQFHV WKH UHTXLUHPHQWV IRU UHORFDWHG RU  DQG 6%&  KDYH SURYLVLRQV WKDW DUH
PRYHGVWUXFWXUHV DOVRDSSOLFDEOHWRH[LVWLQJEXLOGLQJV
 &RQIRUPDQFH7KHEXLOGLQJVKDOOEHVDIH 
IRU KXPDQ RFFXSDQF\ DV GHWHUPLQHG E\ WKH 6%&
 DQG WKH 6%&  $Q\ UHSDLUDOWHUDWLRQRU 6(&7,215(48,5(0(176
FKDQJHRIRFFXSDQF\XQGHUWDNHQZLWKLQWKHPRYHG  /RFDWLRQRQWKHORW7KHEXLOGLQJVKDOOEH
VWUXFWXUHVKDOOFRPSO\ZLWKWKHUHTXLUHPHQWVRIWKLV ORFDWHG RQ WKH ORW LQ DFFRUGDQFH ZLWK WKH
FRGHDSSOLFDEOHWRWKHZRUNEHLQJSHUIRUPHG$Q\ UHTXLUHPHQWVRIWKH6%&RUWKH6%&DV
ILHOGIDEULFDWHG HOHPHQWV VKDOO FRPSO\ ZLWK WKH DSSOLFDEOH
UHTXLUHPHQWVRIWKH6%&RUWKH6%&DV
DSSOLFDEOH

6%&&& 

&+$37(5²5(/2&$7('25029('%8,/',1*6

™ ([WHULRU ZDOOV RI EXLOGLQJV PD\ QHHG ILUH HOHPHQWV E\ PRUH WKDQ  SHUFHQW $OORZLQJ
UHVLVWDQFHUDWLQJVLQDFFRUGDQFHZLWKHLWKHUWKH RYHUVWUHVVHV RI XS WR  SHUFHQW LQ H[LVWLQJ
6%&  6HFWLRQ  RU WKH 6%&  VWUXFWXUDO PHPEHUV KDV EHHQ D ORQJVWDQGLQJ
6HFWLRQ 5 DV DSSOLFDEOH 7KH UHTXLUHG UXOHRIWKXPEXVHGE\VWUXFWXUDOHQJLQHHUV
UDWLQJ LQ HLWKHU FRGH LV EDVHG RQ WKH ILUH
VHSDUDWLRQGLVWDQFHDQGLQDFFRUGDQFHZLWKWKH  6HLVPLF ORDGV  %XLOGLQJV VKDOO FRPSO\
6%&  WKH RFFXSDQF\ DQG W\SH RI ZLWK WKH 6%&  RU WKH 6%&  VHLVPLF
FRQVWUXFWLRQ PXVW DOVR EH FRQVLGHUHG 6LQFH SURYLVLRQVDWWKHQHZORFDWLRQDVDSSOLFDEOH
WKH UHORFDWHG EXLOGLQJ¶V H[WHULRU ZDOO
([FHSWLRQV
FRQVWUXFWLRQ DQG WKHUHIRUH LWV ILUHUHVLVWDQFH
UDWLQJDUHIL[HGWKHEXLOGLQJPXVWEHVLWXDWHGVR  6WUXFWXUHV LQ 6HLVPLF 'HVLJQ &DWHJRULHV $
WKDWWKHH[WHULRUZDOO¶VILUHUHVLVWDQFHUDWLQJLVLQ DQG % DQG GHWDFKHG RQH DQG WZRIDPLO\
FRPSOLDQFH $OWHUQDWLYHO\ WKH ILUHUHVLVWDQFH GZHOOLQJVLQ6HLVPLF'HVLJQ&DWHJRULHV$%
UDWLQJVDQGRSHQLQJSURWHFWLYHVRIWKHH[LVWLQJ DQG & ZKHUH WKH VHLVPLF ORDGV DW WKH QHZ
H[WHULRUZDOOVDQGRSHQLQJVFDQEHXSJUDGHGDV
ORFDWLRQ DUH QRW KLJKHU WKDQ WKRVH DW WKH
UHTXLUHG WR PHHW WKH 6%&  IRU WKH GHVLUHG
ILUHVHSDUDWLRQGLVWDQFH
SUHYLRXVORFDWLRQ
 6WUXFWXUDO HOHPHQWV ZKRVH VWUHVV LV QRW
 )RXQGDWLRQ  7KH IRXQGDWLRQ V\VWHP RI LQFUHDVHGE\PRUHWKDQSHUFHQW
UHORFDWHGEXLOGLQJVVKDOOFRPSO\ZLWKWKH6%&
™ :KHQ D EXLOGLQJ LV PRYHG WKH VWUXFWXUH PXVW
RUWKH6%&DVDSSOLFDEOH
VDWLVI\ WKH VHLVPLF ORDG FULWHULD IRU D QHZ
™ 7KH IRXQGDWLRQ IRU D UHORFDWHG EXLOGLQJ LV VWUXFWXUH XVLQJ HLWKHU WKH 6%&  RU 6%&
FRQVWUXFWHG DW WKH EXLOGLQJ¶V QHZ ORFDWLRQ $V DVDSSOLFDEOHDWWKHQHZORFDWLRQ7KHUH
QHZFRQVWUXFWLRQWKHIRXQGDWLRQDVZHOODVWKH DUH WZR H[FHSWLRQV WR IXOO FRPSOLDQFH
EXLOGLQJ¶VFRQQHFWLRQWRLWLVWKHUHIRUHUHTXLUHG ([FHSWLRQH[HPSWVDQ\EXLOGLQJFODVVLILHGDV
WRFRPSO\ZLWKHLWKHUWKH6%&RU6%& 6HLVPLF'HVLJQ&DWHJRU\$RU%LQDGGLWLRQWR
DVDSSOLFDEOH GHWDFKHG RQH DQG WZRIDPLO\ GZHOOLQJV
FODVVLILHG DV 6HLVPLF 'HVLJQ &DWHJRU\ &
 &RQQHFWLRQ WR WKH IRXQGDWLRQ SURYLGHG WKH GHVLJQ VHLVPLF ORDGV DW WKH QHZ
7KH FRQQHFWLRQ RI WKH UHORFDWHG EXLOGLQJ WR WKH ORFDWLRQDUHQRJUHDWHUWKDQWKRVHDWWKHIRUPHU
IRXQGDWLRQVKDOOFRPSO\ZLWK6%&RUWKH6%& ORFDWLRQ 6HH WKH FRPPHQWDU\ WR 6HFWLRQ
DVDSSOLFDEOH  IRU DQ H[SODQDWLRQ RI VHLVPLF GHVLJQ
FDWHJRU\ FODVVLILFDWLRQ :KLOH WKH GHVLJQ
™ 6HHWKHFRPPHQWDU\WR6HFWLRQ
VHLVPLF ORDGV DUH D IXQFWLRQ RI VHYHUDO
 :LQGORDGV%XLOGLQJVVKDOOFRPSO\ZLWK YDULDEOHV ZLWK D UHORFDWHG EXLOGLQJ WKDW LV QRW
WKH6%&RUWKH6%&ZLQGSURYLVLRQVDV DOVR XQGHUJRLQJ D FKDQJH RI RFFXSDQF\ WKH
DSSOLFDEOH GLIIHUHQFHLQWKHVHLVPLFORDGZLOOPHUHO\EHD
IXQFWLRQRIWZRRIWKRVHYDULDEOHVWKHPDSSHG
([FHSWLRQV VSHFWUDODFFHOHUDWLRQVHJ66DQGWKHVLWHVRLO
FRHIILFLHQWV HJ )D ,Q RWKHU ZRUGV
 'HWDFKHGRQHDQGWZRIDPLO\GZHOOLQJVDQG FRPSDULQJ WKH GHVLJQ VSHFWUDO DFFHOHUDWLRQV
*URXS8RFFXSDQFLHVZKHUHZLQGORDGVDWWKH HJ 6'6  )D66 FDOFXODWHG DW HDFK VLWH
QHZORFDWLRQDUHQRWKLJKHUWKDQWKRVHDWWKH SURYLGHV DQ LQGLFDWLRQ RI WKH GLIIHUHQFH LQ
SUHYLRXVORFDWLRQ VHLVPLF ORDGV 7KHVH SDUDPHWHUV QHHG WR EH
 6WUXFWXUDO HOHPHQWV ZKRVH VWUHVV LV QRW GHWHUPLQHG XVLQJ WKH 6%&  DQG DUH
LQFUHDVHGE\PRUHWKDQSHUFHQW H[SODLQHGLQWKHFRPPHQWDU\WR6HFWLRQ
VHH 6%&  6HFWLRQ  ([FHSWLRQ 
™ :KHQDEXLOGLQJLVPRYHGLWFDQEHVXEMHFWHG DOORZV DGGLWLRQDO VHLVPLF ORDGV WKDW GR QRW
WR GLIIHUHQW GHVLJQ ZLQG ORDGLQJ DW WKH QHZ LQFUHDVH VWUHVVHV LQ DIIHFWHG VWUXFWXUDO
ORFDWLRQ 7KH VWUXFWXUH PXVW EH FKHFNHG HOHPHQWV E\ PRUH WKDQ  SHUFHQW $OORZLQJ
WKHUHIRUHWRYHULI\WKDWLWVDWLVILHVWKHZLQGORDG RYHUVWUHVVHV RI XS WR  SHUFHQW LQ H[LVWLQJ
FULWHULDIRUDQHZVWUXFWXUHXVLQJHLWKHUWKH6%& VWUXFWXUDO PHPEHUV KDV EHHQ D ORQJVWDQGLQJ
RU6%&DVDSSOLFDEOH7KHUHDUHWZR UXOHRIWKXPEXVHGE\VWUXFWXUDOHQJLQHHUV
H[FHSWLRQV WR IXOO FRPSOLDQFH RQH RI ZKLFK
H[HPSWV GHWDFKHG RQH DQG WZRIDPLO\  6QRZORDGV6WUXFWXUHVVKDOOFRPSO\ZLWK
GZHOOLQJV DV ZHOO DV *URXS 8 RFFXSDQFLHV LI 6%&  VQRZ ORDGV DV DSSOLFDEOH ZKHUH VQRZ
WKH GHVLJQZLQGORDGV DW WKH QHZORFDWLRQDUH ORDGVDWWKHQHZORFDWLRQDUHKLJKHUWKDQWKRVHDWWKH
QR JUHDWHU WKDQ WKRVH DW WKH IRUPHU ORFDWLRQ SUHYLRXVORFDWLRQ
([FHSWLRQDOORZVDGGLWLRQDOZLQGORDGVWKDWGR
QRW LQFUHDVH VWUHVVHV LQ DIIHFWHG VWUXFWXUDO

6%&&& 

&+$37(5²5(/2&$7('25029('%8,/',1*6

([FHSWLRQ6WUXFWXUDOHOHPHQWVZKRVHVWUHVVLVQRW  5HTXLUHG LQVSHFWLRQ DQG UHSDLUV  7KH

LQFUHDVHGE\PRUHWKDQSHUFHQW EXLOGLQJRIILFLDOVKDOOEHDXWKRUL]HGWRLQVSHFWRUWR
™ :KHQ D EXLOGLQJ LV PRYHG WR D ORFDWLRQ WKDW
UHTXLUH DSSURYHG SURIHVVLRQDOV WR LQVSHFW DW WKH
UHTXLUHV DQ LQFUHDVHG GHVLJQ VQRZ ORDG WKH H[SHQVHRIWKHRZQHUWKHYDULRXVVWUXFWXUDOSDUWVRI
VWUXFWXUH PXVW EH FKHFNHG WR YHULI\ WKDW LW D UHORFDWHG EXLOGLQJ WR YHULI\ WKDW VWUXFWXUDO
VDWLVILHVWKHVQRZORDGUHTXLUHPHQWVIRUDQHZ FRPSRQHQWV DQG FRQQHFWLRQV KDYH QRW VXVWDLQHG
VWUXFWXUH XVLQJ HLWKHU WKH 6%&  RU 6%& VWUXFWXUDO GDPDJH $Q\ UHSDLUV UHTXLUHG E\ WKH
 DV DSSOLFDEOH 7KH H[FHSWLRQ WR IXOO EXLOGLQJRIILFLDODVDUHVXOWRIVXFKLQVSHFWLRQVKDOO
FRPSOLDQFHDOORZVDGGLWLRQDOVQRZORDGLQJWKDW EHPDGHSULRUWRWKHILQDODSSURYDO
GRHVQRWLQFUHDVHVWUHVVHVLQDIIHFWHGVWUXFWXUDO
HOHPHQWV E\ PRUH WKDQ  SHUFHQW $OORZLQJ ™ ,Q DGGLWLRQ WR WKH LQVSHFWLRQV UHTXLUHG E\
RYHUVWUHVVHV RI XS WR  SHUFHQW LQ H[LVWLQJ 6HFWLRQ  WKLV VHFWLRQ JLYHV WKH EXLOGLQJ
VWUXFWXUDO PHPEHUV KDV EHHQ D ORQJVWDQGLQJ RIILFLDOWKHDXWKRULW\WRLQVSHFWWKHVWUXFWXUHRID
UXOHRIWKXPEXVHGE\VWUXFWXUDOHQJLQHHUV UHORFDWHG EXLOGLQJ WR YHULI\ WKDW VWUXFWXUDO
FRPSRQHQWV DQG FRQQHFWLRQV KDYH QRW EHHQ
 )ORRGKD]DUGDUHDV,IUHORFDWHGRUPRYHG GDPDJHG 7KLV LV LPSRUWDQW EHFDXVH LQ WKH
LQWR D IORRG KD]DUG DUHD VWUXFWXUHV VKDOO FRPSO\ FRXUVH RI EHLQJ PRYHG WKH EXLOGLQJ FDQ EH
ZLWK 6HFWLRQ  RI 6%&  RU 6%&  DV VXEMHFWHG WR PRYHPHQWV DQG GLVSODFHPHQWV
DSSOLFDEOH WKDW ZHUH QHYHU DQWLFLSDWHG LQ WKH RULJLQDO
VWUXFWXUDO GHVLJQ ,Q WKH HYHQW PRUH VSHFLILF
™ :KHQ D EXLOGLQJ LVPRYHG LQWRDIORRG KD]DUG H[SHUWLVH LV UHTXLUHG WKH EXLOGLQJ RIILFLDO PD\
DUHDRUUHORFDWHGZLWKLQDIORRGKD]DUGDUHDWKH UHTXLUH VXFK LQVSHFWLRQV WR EH PDGH E\ DQ
VWUXFWXUHPXVWVDWLVI\WKHIORRGKD]DUGFULWHULD DSSURYHGSURIHVVLRQDODWWKHRZQHU¶VH[SHQVH
IRUDQHZVWUXFWXUH XQGHUWKH 6%& RUWKH
6%&DVDSSOLFDEOH 

6%&&& 

&+$37(5²5(/2&$7('25029('%8,/',1*6






















7KLVSDJHOHIWLQWHQWLRQDOO\EODQN

6%&&& 

 &+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

²3(5)250$1&(&203/,$1&(
0(7+2'6

™ 3XUSRVH
™ *HQHUDO&RPPHQWV
™ $ ODUJH QXPEHU RI H[LVWLQJ EXLOGLQJV DQG
™ &KDSWHU  FRQWDLQV SURYLVLRQV IRU DQ
VWUXFWXUHV GR QRW FRPSO\ ZLWK FXUUHQW EXLOGLQJ
DOWHUQDWLYH PHWKRG RI HYDOXDWLRQ RI DGGLWLRQV
FRGH UHTXLUHPHQWV IRU QHZ FRQVWUXFWLRQ
DOWHUDWLRQVRUFKDQJHVRIRFFXSDQF\LQH[LVWLQJ
$OWKRXJK PDQ\ RI WKHVH EXLOGLQJV DUH
EXLOGLQJVDQGVWUXFWXUHVEDVHGRQDQXPHULFDO
SRWHQWLDOO\ VDOYDJHDEOH UHKDELOLWDWLRQ LV RIWHQ
VFRULQJV\VWHPLQYROYLQJYDULRXVVDIHW\LVVXHV
FRVWSURKLELWLYHEHFDXVHWKH\PD\QRWEHDEOH
DQG WKH GHJUHH RI FRGH FRPSOLDQFH IRU HDFK
WR FRPSO\ ZLWK DOO WKH UHTXLUHPHQWV IRU QHZ
LVVXH7KLVVHFWLRQFRQWDLQVWKHSURYLVLRQVWREH
FRQVWUXFWLRQ$WWKHVDPHWLPHLWLVQHFHVVDU\
LQFOXGHGLQWKHHYDOXDWLRQDQGWKHFRQGLWLRQVRQ
WR UHJXODWH FRQVWUXFWLRQ LQ H[LVWLQJ EXLOGLQJV
ZKLFKWKDWHYDOXDWLRQLVEDVHG
WKDW XQGHUJR DGGLWLRQV DOWHUDWLRQV
™ 1HLWKHUWKHGHVLJQHUQRUWKHEXLOGLQJRIILFLDOFDQ
UHQRYDWLRQV H[WHQVLYH UHSDLUV RU FKDQJHV RI
SK\VLFDOO\LQVSHFWDQGHYDOXDWHHYHU\DVSHFWRI
RFFXSDQF\ 6XFK DFWLYLW\ UHSUHVHQWV DQ
DQH[LVWLQJEXLOGLQJRUVWUXFWXUHEHFDXVHPDQ\
RSSRUWXQLW\ WR HQVXUH WKDW QHZ FRQVWUXFWLRQ
RI LWV IHDWXUHV PD\ EH FRQFHDOHG LQ WKH
FRPSOLHV ZLWK WKH FXUUHQW EXLOGLQJ FRGHV DQG
FRQVWUXFWLRQ ,W LV WKHUHIRUH QHFHVVDU\ WR
WKDW H[LVWLQJ FRQGLWLRQV DUH PDLQWDLQHG DW D
HPSKDVL]HWKRVHLWHPVWKDWFDQEHHYDOXDWHG
PLQLPXPWRWKHLUFXUUHQWOHYHORIFRPSOLDQFHRU
7KHUHDUHFULWLFDOO\LPSRUWDQWHOHPHQWVWKDW
DUH LPSURYHG DV UHTXLUHG 7R DFFRPSOLVK WKLV
FDQ EH TXDQWLILHG DQG HYDOXDWHG WR GHWHUPLQH
REMHFWLYH DQG WR PDNH WKH UHKDELOLWDWLRQ
WKHOHYHORIVDIHW\IRUDQH[LVWLQJEXLOGLQJ
SURFHVV HDVLHU WKLV FKDSWHU DOORZV IRU D
™ 7KLVW\SHRIDQDO\VLVSURYLGHVWKHGHVLJQHUDQG
FRQWUROOHG GHSDUWXUH IURP IXOO FRPSOLDQFH ZLWK
WKH EXLOGLQJ RIILFLDO ZLWK D UDWLRQDO EDVLV IRU
WKHWHFKQLFDOFRGHVZLWKRXWFRPSURPLVLQJWKH
HVWDEOLVKLQJWKHVDIHW\RIDQH[LVWLQJEXLOGLQJRU
PLQLPXPVWDQGDUGVIRUILUHSUHYHQWLRQDQGOLIH
VWUXFWXUH ZLWKRXW KDYLQJ SK\VLFDO DFFHVV WR
VDIHW\IHDWXUHVRIWKHUHKDELOLWDWHGEXLOGLQJ
HYHU\SDUWRIWKHEXLOGLQJGRFXPHQWDWLRQRIWKH
RULJLQDOGHVLJQRUWKHFRQVWUXFWLRQKLVWRU\RIWKH 
EXLOGLQJ
 &RPSOLDQFHZLWKRWKHUPHWKRGV
$OWHUDWLRQV UHSDLUV DGGLWLRQV DQG FKDQJHV RI
6(&7,21*(1(5$/ RFFXSDQF\WRH[LVWLQJVWUXFWXUHVVKDOOFRPSO\ZLWK
 6FRSH7KHSURYLVLRQVRIWKLVFKDSWHUVKDOO WKH SURYLVLRQV RI WKLV FKDSWHU RU ZLWK RQH RI WKH
DSSO\WRWKHDOWHUDWLRQUHSDLUDGGLWLRQDQGFKDQJH PHWKRGVSURYLGHGLQ6HFWLRQ
RI RFFXSDQF\ RI H[LVWLQJ VWUXFWXUHV LQFOXGLQJ ™ 7KLV VHFWLRQ UHIHUHQFHV 6HFWLRQ  IRU WKH
KLVWRULF DQG PRYHG VWUXFWXUHV DV UHIHUHQFHG LQ RSWLRQV DYDLODEOH WR GHDO ZLWK DOWHUDWLRQV
6HFWLRQ7KHSURYLVLRQVRIWKLVFKDSWHUDUH UHSDLUVDGGLWLRQVDQGFKDQJHVRIRFFXSDQF\WR
LQWHQGHGWRPDLQWDLQRULQFUHDVHWKHFXUUHQWGHJUHH H[LVWLQJ VWUXFWXUHV 7KH IROORZLQJ EULHIO\
RI SXEOLF VDIHW\ KHDOWK DQG JHQHUDO ZHOIDUH LQ GHVFULEHV WKH RSWLRQV DYDLODEOH RWKHU WKDQ
H[LVWLQJ EXLOGLQJV ZKLOH SHUPLWWLQJ UHSDLU FRPSOLDQFHZLWKWKLVFKDSWHU
DOWHUDWLRQ DGGLWLRQ DQG FKDQJH RI RFFXSDQF\  6XEMHFW WR WKH DSSURYDO RI WKH EXLOGLQJ
ZLWKRXWUHTXLULQJIXOOFRPSOLDQFHZLWK&KDSWHUV RIILFLDOUHSDLUVDQGDOWHUDWLRQVFDQFRPSO\
WKURXJK  H[FHSW ZKHUH FRPSOLDQFH ZLWK RWKHU ZLWK WKH UHTXLUHPHQWV RI WKH FRGH DW WKH
SURYLVLRQV RI WKLV FRGH LV VSHFLILFDOO\ UHTXLUHG LQ WLPHWKHEXLOGLQJZDVEXLOW
WKLVFKDSWHU  5HSDLUV DOWHUDWLRQV DGGLWLRQV DQG
™ 7KLVVHFWLRQVWDWHVWKHVFRSHRI&KDSWHUDQG FKDQJHVRIRFFXSDQF\FDQFRPSO\ZLWKWKH
UHIHUHQFHV DOWHUQDWLYH PHWKRGV RI FRGH SUHVFULSWLYH FRPSOLDQFH PHWKRG IRXQG LQ
FRPSOLDQFH IRU DOWHUDWLRQ UHSDLU DGGLWLRQ DQG &KDSWHU7KHVHSURYLVLRQVDUHGXSOLFDWHG
FKDQJH RI RFFXSDQF\ RI H[LVWLQJ VWUXFWXUHV IURP 6HFWLRQV  WKURXJK  RI 6%&
&KDSWHU  DOVR GHVFULEHV WKH UHVSRQVLELOLWLHV 
IRUPDLQWHQDQFHUHSDLUVFRPSOLDQFHZLWKRWKHU
FRGHVDQGSHULRGLFWHVWLQJ

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

 5HSDLUV DOWHUDWLRQV DGGLWLRQV DQG FRQGLWLRQV DQG UHODWLYH KD]DUGV WKDW ZLOO H[LVW
FKDQJHVRIRFFXSDQF\FDQFRPSO\ZLWKWKH DQGPXVWEHGHWHUPLQHGWREHDFFHSWDEOH,WLV
SURSRUWLRQDODSSURDFKZKHUHXSJUDGHVDUH DOVRFRQVLVWHQWZLWKKRZFKDQJHVRIRFFXSDQF\
WULJJHUHG E\ WKH W\SH DQG H[WHQW RI WKH DUHUHJXODWHGLQWKHDEVHQFHRIWKH&KDSWHU
ZRUN 7KHVH UHTXLUHPHQWV DUH IRXQG LQ DOWHUQDWLYH
&KDSWHUVWKURXJK
 3DUWLDO FKDQJH LQ RFFXSDQF\
™ 3OHDVH QRWH WKDW WKHVH RSWLRQV DUH VHSDUDWH :KHUHDSRUWLRQRIWKHEXLOGLQJLVFKDQJHGWRDQHZ
DQGGLVWLQFWDQGPXVWQRWEHFRPELQHGLQDQ\ RFFXSDQF\ FODVVLILFDWLRQ DQG WKDW SRUWLRQ LV
ZD\ VHSDUDWHGIURPWKHUHPDLQGHURIWKHEXLOGLQJZLWK
 $SSOLFDELOLW\6WUXFWXUHVH[LVWLQJSULRUWR ILUHEDUULHURUKRUL]RQWDODVVHPEOLHVKDYLQJDILUH
>WKH GDWH VHW E\ EXLOGLQJ RIILFLDOV LW LV UHVLVWDQFHUDWLQJDVUHTXLUHGE\7DEOHRI6%&
UHFRPPHQGHG WKDW WKLV GDWH FRLQFLGH ZLWK WKH IRUWKHVHSDUDWHRFFXSDQFLHVRUZLWKDSSURYHG
HIIHFWLYH GDWH RI EXLOGLQJ FRGHV ZLWKLQ WKH FRPSOLDQFHDOWHUQDWLYHVWKHSRUWLRQFKDQJHGVKDOO
MXULVGLFWLRQ@ LQ ZKLFK WKHUH LV ZRUN LQYROYLQJ EHPDGHWRFRQIRUPWRWKHSURYLVLRQVRIWKLVVHFWLRQ
DGGLWLRQVDOWHUDWLRQVRUFKDQJHVRIRFFXSDQF\VKDOO :KHUHDSRUWLRQRIWKHEXLOGLQJLVFKDQJHGWRDQHZ
EH PDGH WR FRQIRUP WR WKH UHTXLUHPHQWV RI WKLV RFFXSDQF\ FODVVLILFDWLRQ DQG WKDW SRUWLRQ LV QRW
FKDSWHURUWKHSURYLVLRQVRI&KDSWHUVWKURXJK VHSDUDWHGIURPWKHUHPDLQGHURIWKHEXLOGLQJZLWK
7KH SURYLVLRQV RI 6HFWLRQV  WKURXJK ILUHEDUULHUVRUKRUL]RQWDODVVHPEOLHVKDYLQJDILUH
 VKDOO DSSO\ WR H[LVWLQJ RFFXSDQFLHV WKDW UHVLVWDQFHUDWLQJDVUHTXLUHGE\7DEOHRI6%&
ZLOOFRQWLQXHWREHRUDUHSURSRVHGWREHLQ*URXSV IRUWKHVHSDUDWHRFFXSDQFLHVRUZLWKDSSURYHG
$%(),05DQG67KHVHSURYLVLRQVVKDOO FRPSOLDQFH DOWHUQDWLYHV WKH SURYLVLRQV RI WKLV
QRWDSSO\WREXLOGLQJVZLWKRFFXSDQFLHVLQ*URXS+ VHFWLRQZKLFKDSSO\WRHDFKRFFXSDQF\VKDOODSSO\
RU,,RU, WRWKHHQWLUHEXLOGLQJ:KHUHWKHUHDUHFRQIOLFWLQJ
SURYLVLRQV WKRVH UHTXLUHPHQWV ZKLFK VHFXUH WKH
™ 7KHDGRSWLQJMXULVGLFWLRQLVWRLQVHUWWKHGHVLUHG
GDWHIRUDSSOLFDELOLW\DVLQGLFDWHGLQWKLVVHFWLRQ
JUHDWHU SXEOLF VDIHW\ VKDOO DSSO\ WR WKH HQWLUH
WKHUHIRUH&KDSWHUDSSOLHVRQO\WRVWUXFWXUHV EXLOGLQJRUVWUXFWXUH
H[LVWLQJSULRUWRWKHHVWDEOLVKHGGDWH7KHGDWH ™ :KHUHDSRUWLRQRIWKHEXLOGLQJLVFKDQJHGWRD
WKDWFRQVWUXFWLRQZDVILUVWUHJXODWHGWKURXJKD QHZ RFFXSDQF\ FODVVLILFDWLRQ WKH IROORZLQJ
FRPSUHKHQVLYHEXLOGLQJFRGHLQWKHMXULVGLFWLRQ RSWLRQV PD\ EH HPSOR\HG GHSHQGHQW RQ WKH
LV UHFRPPHQGHG EHFDXVH EXLOGLQJV SUHGDWLQJ ILUHVHSDUDWLRQRIWKHSRUWLRQRIWKHEXLOGLQJIURP
DQ\EXLOGLQJUHJXODWLRQDUHRIWHQQRWHTXLSSHG WKHUHPDLQGHURIWKHH[LVWLQJEXLOGLQJ
ZLWK WKH W\SHV RI V\VWHPV DQG IHDWXUHV WKDW ™ :KHUHDSRUWLRQRIWKHEXLOGLQJLVFKDQJHGWRD
PRGHUQ FRGHV UHTXLUH 1HZHU EXLOGLQJV DUH QHZRFFXSDQF\FODVVLILFDWLRQDQGWKDWSRUWLRQLV
PRUH OLNHO\ WR EH LQ FORVHU FRPSOLDQFH ZLWK VHSDUDWHGIURPWKHUHPDLQGHURIWKHEXLOGLQJE\
FRQWHPSRUDU\ FRGH UHTXLUHPHQWV IRU QHZ D ILUH EDUULHU WKDW FRPSOLHV ZLWK WKH
FRQVWUXFWLRQ 7KHVH ROGHU EXLOGLQJV DUH UHTXLUHPHQWV IRU QHZ FRQVWUXFWLRQ WKH QHZ
DVVXPHGWRIDFHPRUHGLIILFXOW\LQDFKLHYLQJD RFFXSDQF\SRUWLRQPXVWEHHYDOXDWHGZLWKWKH
PLQLPXPOHYHORIOLIHVDIHW\DQGDUHPRUHOLNHO\ H[LVWLQJRUSURSRVHGEXLOGLQJGHVLJQWREHLQIXOO
WRQHHGWKHJUHDWHUIOH[LELOLW\RIWKHSURYLVLRQVLQ FRPSOLDQFHZLWK WKHSURYLVLRQVRI&KDSWHU 
&KDSWHU  7KH RFFXSDQFLHV WKDW TXDOLI\ IRU 7KHUHPDLQGHURIWKHH[LVWLQJEXLOGLQJPXVWDOVR
WKH SURYLVLRQV RI &KDSWHU  DUH OLVWHG LQ WKLV EH HYDOXDWHG LQ DFFRUGDQFH ZLWK &KDSWHU 
VHFWLRQ&KDSWHUGRHVQRWDSSO\WR*URXSV+ 7KH PDQGDWRU\ VDIHW\ VFRUHV IRU WKH QHZ
DQG,,RU, RFFXSDQF\ SRUWLRQ RI WKH EXLOGLQJ DQG WKH
 &KDQJHLQRFFXSDQF\:KHUHDQ H[LVWLQJ RFFXSDQF\ DUH REWDLQHG IURP WKRVH
OLVWHG LQ7DEOH DQG DUHLQFRUSRUDWHGLQ
H[LVWLQJ EXLOGLQJ LV FKDQJHG WR D QHZ RFFXSDQF\
WKHEXLOGLQJ¶VILQDOHYDOXDWLRQVFRUHVHH7DEOH
FODVVLILFDWLRQ DQG WKLV VHFWLRQ LV DSSOLFDEOH WKH 
SURYLVLRQV RI WKLV VHFWLRQ IRU WKH QHZ RFFXSDQF\ ™ :KHUHDSRUWLRQRIWKHEXLOGLQJLVFKDQJHGWRD
VKDOO EH XVHG WR GHWHUPLQH FRPSOLDQFH ZLWK WKLV QHZRFFXSDQF\FODVVLILFDWLRQDQGWKDWSRUWLRQLV
FRGH QRW VHSDUDWHG E\ D ILUH EDUULHU WKDW FRPSOLHV
ZLWKWKHUHTXLUHPHQWVIRUQHZFRQVWUXFWLRQWKH
™ :KHQ D EXLOGLQJ XQGHUJRHV D FKDQJH RI
SURYLVLRQV RI &KDSWHU  IRU HDFK RFFXSDQF\
RFFXSDQF\ FODVVLILFDWLRQ DQG &KDSWHU  LV
PXVW DSSO\ WR WKH HQWLUH EXLOGLQJ 7KH
DSSOLHG WKH HYDOXDWLRQ PHWKRG LQ &KDSWHU 
UHTXLUHPHQWVRIIHULQJJUHDWHUSXEOLFVDIHW\DUH
PXVW EH DSSOLHG WR WKH QHZ RFFXSDQF\ IRU
DSSOLHGWRWKHHQWLUHEXLOGLQJ$Q\SURSRVHGRU
GHWHUPLQLQJ ZKHWKHU WKH H[LVWLQJ EXLOGLQJ
H[LVWLQJ EXLOGLQJ DWWULEXWHV DQG PRGLILFDWLRQV
PHHWV WKH FRPSOLDQFH DOWHUQDWLYH LQ WKH FRGH
PXVWEHUHYLHZHGLQOLJKWRIWKHVHUHTXLUHPHQWV
7KLV UHFRJQL]HV WKDW LW LV WKH SURSRVHG

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

6HH WKH H[DPSOHV GHVFULEHG LQ 6HFWLRQV 6KRXOG WKH DOWHUDWLRQ RU UHSDLU FDXVH D
DQGIRUPL[HGRFFXSDQFLHV UHGXFWLRQ LQ VDIHW\ RU VDQLWDWLRQ WKH UHVXOWLQJ
FRQGLWLRQ PXVW PHHW WKH UHTXLUHPHQWV RI
 $GGLWLRQV  $GGLWLRQV WR H[LVWLQJ &KDSWHUV  WKURXJK  DQG &KDSWHUV 
EXLOGLQJV VKDOO FRPSO\ ZLWK WKH UHTXLUHPHQWV RI WKURXJK  RI WKH 6%&  7KLV HIIHFWLYHO\
6%&DQGWKLVFRGHIRUQHZFRQVWUXFWLRQ7KH DOORZV H[LVWLQJ FRQGLWLRQV WKDW H[FHHG QHZ
FRPELQHGKHLJKWDQGDUHDRIWKHH[LVWLQJEXLOGLQJ FRQVWUXFWLRQUHTXLUHPHQWVWREHUHGXFHGWREXW
DQGWKHQHZDGGLWLRQVKDOOQRWH[FHHGWKHKHLJKWDQG QRWEHORZQHZFRQVWUXFWLRQUHTXLUHPHQWV
DUHDDOORZHGE\&KDSWHU6%&:KHUHDILUH
 $FFHVVLELOLW\ UHTXLUHPHQWV
ZDOOWKDWFRPSOLHVZLWK6HFWLRQRI6%&LV
$FFHVVLELOLW\VKDOOEHSURYLGHGLQDFFRUGDQFHZLWK
SURYLGHG EHWZHHQ WKH DGGLWLRQ DQG WKH H[LVWLQJ
6HFWLRQRU
EXLOGLQJWKHDGGLWLRQVKDOOEHFRQVLGHUHGDVHSDUDWH
EXLOGLQJ ™ $Q\ EXLOGLQJ RU SDUW RI D EXLOGLQJ WKDW KDV D
FKDQJH RI RFFXSDQF\ PXVW PHHW WKH
™ $GGLWLRQV HIIHFWLYHO\ UHSUHVHQW QHZ UHTXLUHPHQWV IRU DFFHVVLELOLW\ LQ H[LVWLQJ
FRQVWUXFWLRQ ,W LV WKHUHIRUH UHDVRQDEOH WR EXLOGLQJV IRXQG 6HFWLRQ  RU  7KHVH
PDQGDWH WKDW DGGLWLRQV FRPSO\ ZLWK FRGH VHFWLRQVEDVLFDOO\UHTXLUHIXOODFFHVVLELOLW\LQWKH
UHTXLUHPHQWV IRU QHZ FRQVWUXFWLRQ 7KHUH DUH SRUWLRQRIWKHEXLOGLQJXQGHUJRLQJDFKDQJHRI
QRW DVVXPHG WR EH DQ\ H[LVWLQJ FRQGLWLRQV RU RFFXSDQF\DQGLQDGGLWLRQPD\UHTXLUHVRPH
RWKHU IDFWRUV WKDW ZRXOG PDNH IXOO FRPSOLDQFH ZRUN LPSURYLQJ WKH DFFHVVLEOH URXWH WR WKDW
LPSUDFWLFDORUGLIILFXOW VSDFH DQG WKH EDWKURRPV DQG GULQNLQJ
™ 7KHUHTXLUHPHQWVLQWKLVVHFWLRQDUHDSSOLHGLQ IRXQWDLQV WKDW VHUYH WKDW VSDFH VHH
WKHVDPHZD\DVWKRVHLQ6HFWLRQ7KLV FRPPHQWDU\6HFWLRQVDQG
VHFWLRQ LV LQFOXGHG LQ &KDSWHU  VR WKDW
SURYLVLRQV IRU DGGLWLRQV DUH LQFOXGHG IRU ERWK  $FFHSWDQFH  )RU UHSDLUV DOWHUDWLRQV
RSWLRQDOPHWKRGVRIFRGHFRPSOLDQFHLQGLFDWHG DGGLWLRQV DQG FKDQJHV RI RFFXSDQF\ WR H[LVWLQJ
LQ 6HFWLRQ  VHH WKH FRPPHQWDU\ WR EXLOGLQJVWKDWDUHHYDOXDWHGLQDFFRUGDQFHZLWKWKLV
6HFWLRQ  IRU D GLVFXVVLRQ RI WKHVH VHFWLRQ FRPSOLDQFH ZLWK WKLV VHFWLRQ VKDOO EH
RSWLRQV DFFHSWHGE\WKHEXLOGLQJRIILFLDO
™ 7KH HYDOXDWLRQ PHWKRG LQ &KDSWHU  PD\ EH
XVHG IRU DQ H[LVWLQJ EXLOGLQJ WKDW KDV EHHQ ™ 7KH 6DXGL %XLOGLQJ &RGHV UHJXODWH VDIHW\ LQ
PRGLILHGE\DQDGGLWLRQSURYLGHGWKDWLWPHHWV H[LVWLQJ EXLOGLQJV E\ HVWDEOLVKLQJ WKH
WKH DSSOLFDELOLW\ UHTXLUHPHQWV RI 6HFWLRQ DSSURSULDWH PLQLPXP OHYHOV RI VDIHW\ DQG
 VDQLWDWLRQ GHHPHG QHFHVVDU\ IRU WKH VDIH
RFFXSDQF\RIEXLOGLQJV7KLVLVDFFRPSOLVKHGLQ
 $OWHUDWLRQV DQG UHSDLUV  $Q VHYHUDOGLIIHUHQWSRUWLRQVRIWKHIDPLO\RI6DXGL
H[LVWLQJ EXLOGLQJ RU SRUWLRQ WKHUHRI WKDW GRHV QRW %XLOGLQJ &RGHV 7KH 6%&  DGGUHVVHV ILUH
FRPSO\ZLWKWKHUHTXLUHPHQWVRIWKLVFRGHIRUQHZ VDIHW\LVVXHVLQH[LVWLQJEXLOGLQJVDQGWKH6%&
FRQVWUXFWLRQVKDOOQRWEHDOWHUHGRUUHSDLUHGLQVXFK  DGGUHVVHV PDWWHUV RI KHDOWK DQG
DPDQQHUWKDWUHVXOWVLQWKHEXLOGLQJEHLQJOHVVVDIH VDQLWDWLRQLQH[LVWLQJEXLOGLQJVDQGVLWHV&RGHV
RUVDQLWDU\WKDQVXFKEXLOGLQJLVFXUUHQWO\,ILQWKH WUDGLWLRQDOO\JLYHEURDGDXWKRULW\WRWKHEXLOGLQJ
DOWHUDWLRQ RU UHSDLU WKH FXUUHQW OHYHO RI VDIHW\ RU RIILFLDOWRDEDWHXQXVXDOO\KD]DUGRXVFRQGLWLRQV
RU RSHUDWLRQV WKDW PD\ EH HQFRXQWHUHG LQ
VDQLWDWLRQ LV WR EH UHGXFHG WKH SRUWLRQ DOWHUHG RU
H[LVWLQJ EXLOGLQJV $OWKRXJK WKHVH ILUH VDIHW\
UHSDLUHG VKDOO FRQIRUP WR WKH UHTXLUHPHQWV RI KHDOWK DQG VDQLWDWLRQ UHTXLUHPHQWV DUH
&KDSWHUVWKURXJKDQGWKURXJKRI 6%& DGGUHVVHG LQ GLIIHUHQW FRGHV WKH\ WRJHWKHU
 PDNH XS WKH SDFNDJH RI UHTXLUHPHQWV WKDW
™ $Q H[LVWLQJ EXLOGLQJ RU UHSDLUHG PD\ EH UHSUHVHQWWKHPLQLPXPFRQGLWLRQVDQ\H[LVWLQJ
GHVLJQHG DQG HYDOXDWHG LQ DFFRUGDQFH ZLWK EXLOGLQJPXVWPHHWWREHFRQVLGHUHGDFFHSWDEOH
&KDSWHUSURYLGHGLWPHHWVWKHDSSOLFDELOLW\ IRURFFXSDQF\XQGHUWKH6DXGL%XLOGLQJ&RGHV
SURYLVLRQVRI6HFWLRQ &KDSWHUZRUNVLQFRQMXQFWLRQZLWKWKHRWKHU
™ :KHQDQH[LVWLQJEXLOGLQJLVDOWHUHGRUUHSDLUHG FRGHVLQWKHIDPLO\RI6DXGL%XLOGLQJ&RGHVWKDW
PDWHULDOV RU PHWKRGV FRQVLVWHQW ZLWK WKH UHJXODWH H[LVWLQJ EXLOGLQJV E\ UHTXLULQJ
RULJLQDO FRQVWUXFWLRQ PXVW EH XVHG 7KLV LV FRPSOLDQFH ZLWK WKRVH VDPH PLQLPXP
GHVFULEHGLQ&KDSWHU7KHDOWHUDWLRQRUUHSDLU SURYLVLRQV :LWKRXW VXFK UHIHUHQFHV &KDSWHU
PXVWQRWFDXVHWKHEXLOGLQJWREHOHVVVDIHRU  ZRXOG EH LQFRPSOHWH DV DQ DOWHUQDWLYH WRRO
VDQLWDU\ WKDQ LW LV EHIRUH WKH DOWHUDWLRQV DUH IRU UHJXODWLQJ H[LVWLQJ EXLOGLQJV EHFDXVH LW
XQGHUWDNHQ 7KLV LV WUXH HYHQ LI WKH H[LVWLQJ ZRXOG RWKHUZLVH DOORZ FRQGLWLRQV WR H[LVW WKDW
FRQGLWLRQ H[FHHGV WKH PLQLPXP UHTXLUHPHQWV ZRXOG QRW EH SHUPLWWHG IRU DQ\ RWKHU H[LVWLQJ
RIWKHFRGHXQGHUZKLFKLWZDVRULJLQDOO\EXLOW EXLOGLQJ

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

™ :KHQ DQ RZQHU RU GHVLJQHU RI DQ H[LVWLQJ WKDW DUH LQ IORRG KD]DUG DUHDV PXVW PHHW WKH
EXLOGLQJ GHFLGHV WR DSSO\ &KDSWHU  DQG IORRGUHVLVWDQW SURYLVLRQV RI WKH 6%&  RU
FRPSOLHVZLWKDOOWKHSURYLVLRQVRIWKHFKDSWHU 6%&DVDSSOLFDEOHLIWKHSURSRVHGZRUN
LQFOXGLQJ WKH DSSOLFDELOLW\ UHTXLUHPHQWV LQ LVGHWHUPLQHGWREHDVXEVWDQWLDOLPSURYHPHQW
6HFWLRQWKHEXLOGLQJRIILFLDOPXVWDFFHSW
IRU UHYLHZ WKH SURSRVHG ZRUN RU FKDQJH RI  ,QYHVWLJDWLRQ DQG HYDOXDWLRQ  )RU
RFFXSDQF\ SURSRVHGZRUNFRYHUHGE\WKLVFKDSWHUWKHEXLOGLQJ
RZQHU VKDOO FDXVH WKH H[LVWLQJ EXLOGLQJ WR EH
 +D]DUGV  :KHUH WKH EXLOGLQJ LQYHVWLJDWHGDQGHYDOXDWHGLQDFFRUGDQFHZLWKWKH
RIILFLDO GHWHUPLQHVWKDW DQXQVDIH FRQGLWLRQH[LVWV SURYLVLRQVRI6HFWLRQVWKURXJK
DV SURYLGHG IRU LQ 6HFWLRQ  VXFK XQVDIH
FRQGLWLRQ VKDOO EH DEDWHG LQ DFFRUGDQFH ZLWK ™ 7KLV VHFWLRQ DQG WKH VXEVHTXHQW VXEVHFWLRQV
DGGUHVV ZKDW PXVW EH GRQH E\ WKH
6HFWLRQ
RZQHUGHVLJQHUZKRHOHFWVWRHPSOR\&KDSWHU
™ :KHQ WKH EXLOGLQJ RIILFLDO ILQGV DQ XQVDIH  IRU D SURSRVHG UHKDELOLWDWLRQ SURJUDP DQG
FRQGLWLRQ LQ WKH EXLOGLQJ WKDW LV QRW EHLQJ WKHFRUUHVSRQGLQJDFWLRQE\WKHEXLOGLQJRIILFLDO
FRUUHFWHGE\WKHSURSRVHGZRUNKHRUVKHPXVW WRDVVHVVWKHSURJUDPREMHFWLYHO\IRUDSSURYDO
RUGHUWKHDEDWHPHQWRUFRUUHFWLRQRIWKHXQVDIH RU GLVDSSURYDO 7KH IROORZLQJ DFWLRQV PXVW EH
FRQGLWLRQRUKD]DUGMXVWDVZRXOGEHRUGHUHGLQ WDNHQ
DQH[LVWLQJEXLOGLQJWKDWLVQRWEHLQJUHQRYDWHG
DVVWLSXODWHGE\6HFWLRQ7KLVVHFWLRQVHWV x )XOO\LQYHVWLJDWHWKHEXLOGLQJ XVLQJERWKRQ
IRUWK D UHTXLUHG FRPSUHKHQVLYH SHUIRUPDQFH VLWHLQVSHFWLRQVDQGUHVHDUFKRIDOODYDLODEOH
REMHFWLYH RI DEDWLQJ DQ\ FRQGLWLRQ WKDW LV EXLOGLQJFRQVWUXFWLRQGRFXPHQWV
XQVDIH LQVDQLWDU\ LOOHJDO RU RI LPSURSHU x (YDOXDWH WKH EXLOGLQJ IRU FRQIRUPDQFH WR
RFFXSDQF\ HJUHVV GHILFLHQW ILUH KD]DUGRXV 6HFWLRQVWKURXJK
SRRUO\ PDLQWDLQHG RU RWKHUZLVH GDQJHURXV WR x 3HUIRUP WKH UHTXLUHG VWUXFWXUDO DQDO\VLV RI
KXPDQOLIHRUWKHSXEOLFZHOIDUH*XLGHOLQHVIRU WKHVWUXFWXUH
DEDWHPHQW DUH SURYLGHG LQ WKH FRGH DQG LQ
&KDSWHURIERWKWKH6%&VHH6HFWLRQV x 'HWHUPLQH ZKHWKHU WKH H[LVWLQJ EXLOGLQJ
DQGDQGWKH6%& SURSRVHG ZRUN RU FKDQJH RI RFFXSDQF\
FRPSOLHV ZLWK WKH DFFHVVLELOLW\ SURYLVLRQV RI
 &RPSOLDQFH ZLWK RWKHU FRGHV 6HFWLRQVHHFRPPHQWDU\6HFWLRQ
%XLOGLQJVWKDWDUHHYDOXDWHGLQDFFRUGDQFHZLWKWKLV 
VHFWLRQ VKDOO FRPSO\ ZLWK WKH 6%&  DQG 6%& x 6XEPLW WR WKH EXLOGLQJ RIILFLDO GRFXPHQWHG
 UHVXOWV RI WKH LQYHVWLJDWLRQ DQG HYDOXDWLRQ
™ 7KLVVHFWLRQUHTXLUHVDQH[LVWLQJEXLOGLQJWKDWLV SOXVDQ\SURSRVHGFRPSOLDQFHDOWHUQDWLYHV
VXEMHFWHGWRWKHHYDOXDWLRQVFRULQJSURFHVVRI ™ 7KXV WKH HOHFWLRQ DQG LPSOHPHQWDWLRQ RI
6HFWLRQ  WR DOVR FRPSO\ ZLWK WKH 6%& &KDSWHUE\WKHGHVLJQHURURZQHULVSDUWRI
 DQG WKH 6%&  7KRVH FRGHV SURYLGH DFRGHFRPSOLDQFHRSWLRQWKDWPD\EHXVHGIRU
PLQLPXP UHTXLUHPHQWV IRU KHDOWK DQG VDIHW\ H[LVWLQJ EXLOGLQJV WKDW WKH EXLOGLQJ RIILFLDO KDV
WKDWDOOH[LVWLQJEXLOGLQJVDUHH[SHFWHGWRPHHW WKH UHVSRQVLELOLW\ WR UHYLHZ DQG DVVHVV $
UHJDUGOHVV RI ZKHWKHU WKHUH DUH DQ\ FKDQJHV SURSHU DQG VDWLVIDFWRULO\ SUHSDUHG VXEPLVVLRQ
EHLQJ PDGH WR WKH EXLOGLQJ RU RFFXSDQF\ E\ WKH RZQHUGHVLJQHU RIIHULQJ TXDOLWDWLYH DQG
5HJDUGOHVVRIDQH[LVWLQJEXLOGLQJ¶VILQDOVDIHW\ TXDQWLWDWLYHGDWDUHTXLUHVUHYLHZE\WKHEXLOGLQJ
VFRUHV WKH UHTXLUHPHQWV RI WKHVH UHIHUHQFHG RIILFLDO IRU DSSURYDO ,I WKH VXEPLVVLRQ LV
FRGHV PXVW EH IROORZHG VR RFFXSDQWV DUH GLVDSSURYHG WKH EXLOGLQJ RIILFLDO PXVW
VDIHJXDUGHG IURP WKH KD]DUGV DGGUHVVHG E\ VSHFLILFDOO\FLWHDQ\GHILFLHQFLHVDQGYLRODWLRQV
WKRVH FRGHV 7KLV SURYLVLRQ LV VLPLODU WR WKH ™ 7KH RZQHU LV UHTXLUHG WR KDYH DQ H[LVWLQJ
UHTXLUHPHQWVRI6HFWLRQ EXLOGLQJ DQG DQ\ SURSRVHG ZRUN WKHUHLQ
 &RPSOLDQFH ZLWK IORRG KD]DUG LQYHVWLJDWHGDQGHYDOXDWHGIRUFRPSOLDQFHZLWK
SURYLVLRQV,QIORRGKD]DUGDUHDVEXLOGLQJVWKDWDUH WKHSDUDPHWHUVRIWKHHYDOXDWLRQSURFHVVDV
VSHFLILHGLQ6HFWLRQ
HYDOXDWHG LQ DFFRUGDQFH ZLWK WKLV VHFWLRQ VKDOO
FRPSO\ZLWK6HFWLRQRI6%&RU6HFWLRQ  6WUXFWXUDO DQDO\VLV  7KH RZQHU
5 RI 6%&  DV DSSOLFDEOH LI WKH ZRUN VKDOO KDYH D VWUXFWXUDO DQDO\VLV RI WKH H[LVWLQJ
FRYHUHG E\ WKLV VHFWLRQ FRQVWLWXWHV VXEVWDQWLDO EXLOGLQJPDGHWRGHWHUPLQHDGHTXDF\RIVWUXFWXUDO
LPSURYHPHQW V\VWHPV IRU WKH SURSRVHG DOWHUDWLRQ DGGLWLRQ RU
™ 5HJDUGOHVV RI KRZ FRPSOLDQFH ZLWK WKH
FKDQJH RI RFFXSDQF\ 7KH DQDO\VLV VKDOO
SURYLVLRQV RI WKH FRGH LV HYDOXDWHG EXLOGLQJV GHPRQVWUDWH WKDW WKH EXLOGLQJ ZLWK WKH ZRUN

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

FRPSOHWHGLVFDSDEOHRIUHVLVWLQJWKHORDGVVSHFLILHG 0(DQGJHQHUDOVDIHW\*66HFWLRQ

LQ&KDSWHURI6%& DQG WKH VXEVHTXHQW VXEVHFWLRQV DGGUHVV 
VDIHW\ SDUDPHWHUV WKDW UHIOHFW RQ WKRVH DUHDV
™ 7KH RZQHU LV UHTXLUHG WR KDYH D FRPSOHWH (DFK RI WKHVDIHW\SDUDPHWHUV LQGLFDWHG LQ
VWUXFWXUDODQDO\VLVRIWKHEXLOGLQJSHUIRUPHGWR 6HFWLRQV  WKURXJK  PXVW EH
HQVXUH WKDW LW FDQ VXSSRUW WKH UHTXLUHG ORDGV FDUHIXOO\ UHYLHZHG DQG DVVLJQHG D QXPHULFDO
7KLV UHTXLUHV WKDW DOO LQWHULRU ORDGV PHHW WKH YDOXH WKDW VLJQLILHV WKH GHJUHH RI VDIHW\
PLQLPXP ORDG UHTXLUHPHQWV RI &KDSWHU  RI LQIOXHQFH RQ WKH WKUHH RYHUDOO JHQHUDO VDIHW\
WKH 6%&  7KURXJK WKLV DQDO\VLV H[LVWLQJ FDWHJRULHV 7KH RYHUDOO HYDOXDWLRQ LV GLYLGHG
DQG DOWHUHG EXLOGLQJV PXVW EH VKRZQ WR EH LQWR WKUHH FDWHJRULHV RU DUHDV ZKLFK DUH
FDSDEOH RI VXSSRUWLQJ WKH H[SHFWHG ORDGLQJ GHILQHGLQ6HFWLRQVWKURXJK
$Q\ H[LVWLQJ H[WHULRU PHPEHU QRW DIIHFWHG E\
HLWKHU LQWHULRU ORDGLQJ RU DGGLWLRQDO H[WHULRU  )LUH VDIHW\  ,QFOXGHG ZLWKLQ WKH
ORDGLQJ QHHG QRW EH HYDOXDWHG SURYLGHG WKDW ILUHVDIHW\FDWHJRU\DUHWKHVWUXFWXUDOILUHUHVLVWDQFH
WKH VWUXFWXUDO PHPEHU KDV RYHU D SHULRG RI DXWRPDWLF ILUH GHWHFWLRQ ILUH DODUP DXWRPDWLF
WLPH SURYHQ LWV DELOLW\ WR ZLWKVWDQG WKH IRUFHV VSULQNOHU V\VWHP DQG ILUH VXSSUHVVLRQ V\VWHP
WKDWQRUPDOO\FUHDWHVWUHVV/RDGVLPSRVHGRQ IHDWXUHVRIWKHIDFLOLW\
H[LVWLQJ VWUXFWXUDO PHPEHUV E\ DOWHUDWLRQV
DGGLWLRQV RU D FKDQJH RI RFFXSDQF\ PXVW EH ™ $SDUWLDOOLVWRIWKHLWHPVXVHGWR HYDOXDWH ILUH
VKRZQWRVXVWDLQWKHUHTXLUHPHQWVRI6%& VDIHW\LQDEXLOGLQJLVJLYHQLQWKLVVHFWLRQ
&KDSWHU  7KLV VWUXFWXUDO DQDO\VLV SURYLGHV  0HDQVRIHJUHVV,QFOXGHGZLWKLQ
WKH RZQHU DQG WKH EXLOGLQJ RIILFLDO ZLWK
WKHPHDQVRIHJUHVVFDWHJRU\DUHWKHFRQILJXUDWLRQ
UHDVRQDEOH DVVXUDQFH WKDW WKH EXLOGLQJ LV
VWUXFWXUDOO\VDIH FKDUDFWHULVWLFV DQG VXSSRUW IHDWXUHV IRU PHDQV RI
HJUHVVLQWKHIDFLOLW\
 6XEPLWWDO  7KH UHVXOWV RI WKH
™ 7KH PHDQVRIHJUHVV IHDWXUHV HYDOXDWHG E\
LQYHVWLJDWLRQDQGHYDOXDWLRQDVUHTXLUHGLQ6HFWLRQ
&KDSWHU  IDOO LQ WKH JHQHUDO DUHDV RI
 DORQJ ZLWK SURSRVHG FRPSOLDQFH FRQILJXUDWLRQ FKDUDFWHULVWLFV DQG VXSSRUW
DOWHUQDWLYHV VKDOO EH VXEPLWWHG WR WKH EXLOGLQJ IHDWXUHV 7KH VSHFLILF IHDWXUHV LQFOXGH WUDYHO
RIILFLDO GLVWDQFH GHDG HQGV HPHUJHQF\ OLJKWLQJ DQG
™ 7KH UHVXOWV RI WKH LQYHVWLJDWLRQ LQFOXGLQJ WKH H[LWFDSDFLW\DQGQXPEHU
VWUXFWXUDO DQDO\VLV DQG HYDOXDWLRQ PXVW EH  *HQHUDO VDIHW\  ,QFOXGHG ZLWKLQ
VXEPLWWHG WR WKH EXLOGLQJ RIILFLDO ,I DOWHUQDWLYH WKH JHQHUDO VDIHW\ FDWHJRU\ DUH WKH ILUH VDIHW\
PHWKRGV PDWHULDOV RU HTXLYDOHQF\ FRQFHSWV
SDUDPHWHUVDQGWKHPHDQVRIHJUHVVSDUDPHWHUV
DUHSURSRVHGWKHVHPXVWDOVREHVXEPLWWHGWR
WKHEXLOGLQJRIILFLDOIRUUHYLHZDQGDSSURYDO ™ 7KLVFDWHJRU\LQFOXGHVHYHU\LWHPWKDWLVXVHG
LQ HLWKHU WKH ILUH VDIHW\ RU PHDQVRIHJUHVV
 'HWHUPLQDWLRQ RI FRPSOLDQFH HYDOXDWLRQ
7KH EXLOGLQJ RIILFLDO VKDOO GHWHUPLQH ZKHWKHU WKH
H[LVWLQJ EXLOGLQJ ZLWK WKH SURSRVHG DGGLWLRQ  (YDOXDWLRQ SURFHVV  7KH HYDOXDWLRQ
DOWHUDWLRQRUFKDQJHRIRFFXSDQF\FRPSOLHVZLWK SURFHVV VSHFLILHG KHUHLQ VKDOO EH IROORZHG LQ LWV
WKHSURYLVLRQVRIWKLVVHFWLRQLQDFFRUGDQFHZLWKWKH HQWLUHW\WRHYDOXDWHH[LVWLQJEXLOGLQJVLQ*URXSV$
HYDOXDWLRQ SURFHVV LQ 6HFWLRQV  WKURXJK %()05 6DQG8)RUH[LVWLQJEXLOGLQJVLQ
 *URXS,WKHHYDOXDWLRQSURFHVVVSHFLILHGKHUHLQ
VKDOO EH IROORZHG DQG DSSOLHG WR HDFK DQG HYHU\
™ :KHQ WKH UHVXOWV RI WKH LQYHVWLJDWLRQ DQG
LQGLYLGXDOVPRNHFRPSDUWPHQW7DEOHVKDOO
HYDOXDWLRQDUHVXEPLWWHGWRWKHEXLOGLQJRIILFLDO
KH RU VKH PXVW GHWHUPLQH ZKHWKHU WKH EH XWLOL]HG IRU WDEXODWLQJ WKH UHVXOWV RI WKH
SURSRVHG ZRUN FRQIRUPV WR WKH SURYLVLRQV RI HYDOXDWLRQ5HIHUHQFHVWRRWKHUVHFWLRQVRIWKLVFRGH
&KDSWHU  DQG ZKHWKHU WKH HYDOXDWLRQ ZDV LQGLFDWH WKDW FRPSOLDQFH ZLWK WKRVH VHFWLRQV LV
SHUIRUPHGLQDFFRUGDQFHZLWK6HFWLRQV UHTXLUHG LQ RUGHU WR JDLQ FUHGLW LQ WKH HYDOXDWLRQ
WKURXJK KHUHLQ RXWOLQHG ,Q DSSO\LQJ WKLV VHFWLRQ WR D
EXLOGLQJ ZLWK PL[HG RFFXSDQFLHV ZKHUH WKH
 (YDOXDWLRQ  7KH HYDOXDWLRQ VKDOO EH
VHSDUDWLRQEHWZHHQWKHPL[HGRFFXSDQFLHVGRHVQRW
FRPSULVHGRIWKUHHFDWHJRULHVILUHVDIHW\PHDQVRI
HJUHVV DQG JHQHUDO VDIHW\ DV GHILQHG LQ 6HFWLRQV TXDOLI\ IRU DQ\ FDWHJRU\ LQGLFDWHG LQ VHFWLRQ
 WKH VFRUH IRU HDFK RFFXSDQF\ VKDOO EH
WKURXJK
GHWHUPLQHG DQG WKH ORZHU VFRUH GHWHUPLQHG IRU
™ 7KLV VHFWLRQ DQG WKH VXEVHTXHQW VXEVHFWLRQV HDFKVHFWLRQRIWKHHYDOXDWLRQSURFHVVVKDOODSSO\WR
DGGUHVV WKUHH JHQHUDO DUHDV RI VDIHW\ WR EH
HYDOXDWHG ILUH VDIHW\ )6 PHDQV RI HJUHVV

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

WKHHQWLUHEXLOGLQJRUWRHDFKVPRNHFRPSDUWPHQW x 3DWLHQW DELOLW\ FRQFHQWUDWLRQ DQG DWWHQGDQW

IRU*URXS,RFFXSDQFLHV WRSDWLHQWUDWLRIRU,RFFXSDQFLHV
:KHUH WKH VHSDUDWLRQ EHWZHHQ WKH PL[HG ™ 7KH DVVLJQLQJ RI QXPHULFDO YDOXHV WR HDFK RI
RFFXSDQFLHVTXDOLILHVIRUDQ\FDWHJRU\LQGLFDWHGLQ WKH  VDIHW\ SDUDPHWHUV HVWDEOLVKHV D
6HFWLRQ  WKH VFRUH IRU HDFK RFFXSDQF\ PHDVXUDEOH TXDQWLW\ RI HDFK SDUDPHWHU¶V
VKDOODSSO\WRHDFKSRUWLRQRUVPRNHFRPSDUWPHQW FRQWULEXWLRQ WR RYHUDOO EXLOGLQJ VDIHW\ 6RPH
RIWKHEXLOGLQJEDVHGRQWKHRFFXSDQF\RIWKHVSDFH HYDOXDWHG SDUDPHWHUV KDYH D QHJDWLYH
LQIOXHQFH RWKHUV KDYH D SRVLWLYHRQH,QWRWDO
™ 7KLV VHFWLRQ LV WKH NH\ WR XQGHUVWDQGLQJ WKH WKH SDUDPHWHUV PD\ RU PD\ QRW UHVXOW LQ DQ
HQWLUHHYDOXDWLRQSURFHVV7KHILUVWVHQWHQFHRI DFFHSWDEOH EXLOGLQJ VFRUH 7KH HYDOXDWLRQ ZLOO
WKLVVHFWLRQFOHDUO\VWDWHVWKDWHYHU\RQHRIWKH GHWHUPLQH ZKHWKHU WKH H[LVWLQJ EXLOGLQJ KDV
 VDIHW\ SDUDPHWHUV LQGLFDWHG LQ 6HFWLRQV HQRXJK SRVLWLYH SDUDPHWHUV WR RYHUFRPH WKH
WKURXJKPXVWEHHYDOXDWHG QHJDWLYH SDUDPHWHUV RU ZLOO LQGLFDWH WKH
DQG QRWKLQJ PD\ EH RPLWWHG $OWKRXJK WKH QHJDWLYH IDFWRUV WKDW PXVW EH RYHUFRPH
HYDOXDWLRQ SURFHVV GRHV QRW VSHFLILFDOO\ 0RGLILFDWLRQVFDQEHPDGHWRDQ\DVSHFWRIWKH
HYDOXDWH DOO RI WKH PDQ\ LVVXHV WKDW DUH EXLOGLQJ WKDW ZLOO DFFUXH VXIILFLHQW DGGLWLRQDO
UHJXODWHGE\WKH6%&IRUQHZFRQVWUXFWLRQ SRVLWLYHSRLQWVWRDFKLHYHWKHPDQGDWRU\VDIHW\
WKHVH  VDIHW\ SDUDPHWHUV KDYH EHHQ VFRUHV LQ HDFK RI WKH WKUHH HYDOXDWLRQ
GHWHUPLQHG WR EH WKH PRVW FULWLFDO IDFWRUV FDWHJRULHV,QRWKHUZRUGVLIIRUH[DPSOHWKH
UHODWHGWRWKHPLQLPXPGHJUHHRIOLIHVDIHW\DQG DEVHQFH RI D PL[HG RFFXSDQF\ VHSDUDWLRQ
SURSHUW\ SURWHFWLRQ QHHGHG LQ DQ H[LVWLQJ XQGHU6HFWLRQ\LHOGHGDVFRUHRI
EXLOGLQJ7KHVDIHW\SDUDPHWHUVWKDWPXVWEH  DVVXPH IRU H[DPSOH WKDW WKH HYDOXDWLRQ
HYDOXDWHGDUH IDLOHGE\SRLQWVLQWKHILUHVDIHW\FDWHJRU\LW
x %XLOGLQJKHLJKWVHH6HFWLRQ GRHV QRW QHFHVVDULO\ PHDQ WKDW D ILUH EDUULHU
PXVW EH FRQVWUXFWHG WR VHSDUDWH WKH PL[HG
x %XLOGLQJDUHDVHH6HFWLRQ RFFXSDQFLHV :KLOH WKDW ZRXOG EH DQ
x &RPSDUWPHQWDWLRQVHH6HFWLRQ DFFHSWDEOH VROXWLRQ PRGLILFDWLRQV FRXOG EH
PDGHWKDWDFFUXHDW OHDVW DGGLWLRQDOSRLQWV
x 7HQDQW DQG GZHOOLQJ XQLW VHSDUDWLRQV VHH
LQDQ\RQHRUPRUHRIWKHRWKHUSDUDPHWHUVLQ
6HFWLRQ
WKHILUHVDIHW\FDWHJRU\
x &RUULGRUZDOOVVHH6HFWLRQ ™ $IWHU WKH  VDIHW\ SDUDPHWHUV KDYH EHHQ
x 9HUWLFDORSHQLQJVVHH6HFWLRQ HYDOXDWHGDQGDVVLJQHGDQXPHULFDOYDOXHWKH
YDOXHVDUHHQWHUHGLQ7DEOH7KHYDOXHV
x +9$& KHDWLQJ YHQWLODWLQJ DQG DLU PXVWEHWDEXODWHGWRREWDLQWKHEXLOGLQJVFRUH
FRQGLWLRQLQJ V\VWHPV VHH 6HFWLRQ IRUHDFKRIWKHWKUHHHYDOXDWLRQFDWHJRULHV)RU
 ,RFFXSDQFLHVWKHHYDOXDWLRQVFRUHPXVWEH
x $XWRPDWLF ILUH GHWHFWLRQ VHH 6HFWLRQ HQWHUHGIRUHDFKVPRNHFRPSDUWPHQWWRREWDLQ
 DVFRUHIRUHDFKVPRNH
™ 6RPHRIWKHVDIHW\SDUDPHWHUVOLVWHGUHTXLUH
x )LUHDODUPV\VWHPVVHH6HFWLRQ
PDQGDWRU\ FRPSOLDQFH ZLWK RWKHU VHFWLRQV RI
x 6PRNHFRQWUROVHH6HFWLRQ WKH FRGH DQG HVWDEOLVK WKH IRXQGDWLRQ IRU
x 0HDQVRIHJUHVVFDSDFLW\ DQG QXPEHUVHH GHWHUPLQLQJ D SURSHU HYDOXDWLRQ RI WKRVH
6HFWLRQ SDUDPHWHUVUHJDUGOHVVRIZKHWKHUWKHUHVXOWLV
SRVLWLYH RU QHJDWLYH 7KLV LQYROYHV D
x 'HDGHQGVVHH6HFWLRQ FRRUGLQDWLRQ RI PDQGDWRU\ EDVLF UHTXLUHPHQWV
x 0D[LPXP H[LW DFFHVV WUDYHO GLVWDQFH WR DQ ZLWKWKHUHVSHFWLYHH[LVWLQJEXLOGLQJFRQGLWLRQV
H[LWVHH6HFWLRQ WR DUULYH DW WKH QXPHULFDO HYDOXDWLRQV
SUHVFULEHG LQ 6HFWLRQV  WKURXJK
x (OHYDWRUFRQWUROVHH6HFWLRQ

x 0HDQVRIHJUHVV HPHUJHQF\ OLJKWLQJ VHH ™ 6HFWLRQ  DOVR DGGUHVVHV KRZ PL[HG
6HFWLRQ RFFXSDQFLHVDUHKDQGOHGLQWKHHYDOXDWLRQ7R
x 0L[HGRFFXSDQFLHVVHH6HFWLRQ DSSO\WKLVVHFWLRQLWLVQHFHVVDU\WRXQGHUVWDQG
6%&  6HFWLRQ  :KHQ PL[HG
x $XWRPDWLF VSULQNOHUV VHH 6HFWLRQ RFFXSDQFLHV LQ DQ H[LVWLQJ EXLOGLQJ DUH QRW
 VHSDUDWHGE\ILUHEDUULHUVRUILUHZDOOVFRPSO\LQJ
x 6WDQGSLSHVVHH6HFWLRQ ZLWKWKHUHTXLUHPHQWVIRUQHZFRQVWUXFWLRQWKH
HQWLUH HYDOXDWLRQ PXVW EH EDVHG RQ WKH
x ,QFLGHQWDOXVHVVHH6HFWLRQ
RFFXSDQF\ ZLWK WKH PRVW UHVWULFWLYH
x 6PRNH&RPSDUWPHQWDWLRQ UHTXLUHPHQWV 7KH HYDOXDWLRQ SURFHVV
FRQVLGHUVWKHVFRUHIRUWKHYDULRXVRFFXSDQFLHV

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

DQG DSSOLHV WKH ORZHVW VFRUH WR WKH HQWLUH VDIHW\ SDUDPHWHUV 7KH LQWHQW LV WR DYRLG D
EXLOGLQJ :KHQ WKH PL[HG RFFXSDQFLHV DUH VLWXDWLRQ LQ ZKLFK PDQ\ GHILFLHQFLHV LQ RWKHU
VHSDUDWHG E\ ILUH EDUULHUV LQ FRPSOLDQFH ZLWK FULWLFDO VDIHW\ SDUDPHWHUV FDQ EH RYHUFRPH
6%&  6HFWLRQ  WKH\ DUH WR EH VLPSO\ E\ D KLJK W\SH RI FRQVWUXFWLRQ
HYDOXDWHG VHSDUDWHO\ DQG WKH VFRUH IRU HDFK FODVVLILFDWLRQ
RFFXSDQF\ZLOODSSO\WRHDFKSRUWLRQEDVHGRQ
LWV RFFXSDQF\ FODVVLILFDWLRQ ,I WKHUH DUH IRXU 
GLIIHUHQWRFFXSDQFLHVLQWKHEXLOGLQJWKHYDOXHV  +HLJKW IRUPXOD  7KH IROORZLQJ
PXVW EH FRPSXWHG IRU HDFK RI WKH IRXU IRUPXODV VKDOO EH XVHG LQ FRPSXWLQJ WKH EXLOGLQJ
RFFXSDQFLHV (DFK RFFXSDQF\ LV UHTXLUHG WR KHLJKWYDOXH
PHHW WKH DSSOLFDEOH PDQGDWRU\ EXLOGLQJ VFRUH 
IRU LWV RFFXSDQF\ FODVVLILFDWLRQ :KHQ PL[HG ሺሻ െ ሺሻ
RFFXSDQFLHV DUH VHSDUDWHG E\ ILUH ZDOOV ‡‹‰Š–ƒŽ—‡ǡ  ൌ  ൈ ‫ܨܥ‬
͵ͳͺͲ
FRPSO\LQJ ZLWK WKH UHTXLUHPHQWV RI 6%&  
6HFWLRQ  VHSDUDWH EXLOGLQJV DUH FUHDWHG  
DQG PXVW EH HYDOXDWHG VHSDUDWHO\ IRU DOO 
VDIHW\ SDUDPHWHUV 6HH WKH FRPPHQWDU\ WR
 
6HFWLRQV  DQG  IRU D IXUWKHU ‡‹‰Š–ƒŽ—‡ǡ •–‘”‹‡• ൌ  ሺ െ ሻ ൈ ‫ܨܥ‬
GLVFXVVLRQ RI WKH DSSOLFDWLRQ RI WKH HYDOXDWLRQ 
SURFHGXUHIRUPL[HGRFFXSDQFLHV  

 %XLOGLQJ KHLJKW DQG QXPEHU RI :KHUH
VWRULHV7KHYDOXHIRUEXLOGLQJKHLJKWDQGQXPEHU $+  $OORZDEOH KHLJKW LQ PP IURP
RIVWRULHVVKDOOEHWKHOHVVHUYDOXHGHWHUPLQHGE\WKH 6HFWLRQRI6%&
IRUPXOD LQ 6HFWLRQ  6HFWLRQ  RI WKH (%+ ([LVWLQJEXLOGLQJKHLJKWLQPP
6%&VKDOOEHXVHGWRGHWHUPLQHWKHDOORZDEOH $6 $OORZDEOHKHLJKWLQVWRULHVIURP6HFWLRQ
KHLJKW DQG QXPEHU RI VWRULHV RI WKH EXLOGLQJ RI6%&
6XEWUDFW WKH DFWXDO EXLOGLQJ KHLJKW IURP WKH (%6 ([LVWLQJEXLOGLQJKHLJKWLQVWRULHV
DOORZDEOHKHLJKWDQGGLYLGHE\PP(QWHUWKH &) LI$+±(%+LVSRVLWLYH
KHLJKW YDOXH DQG LWV VLJQ SRVLWLYH RU QHJDWLYH LQ &) &RQVWUXFWLRQW\SHIDFWRUVKRZQLQ7DEOH
7DEOH  XQGHU 6DIHW\ 3DUDPHWHU  LI$+±(%+LV1HJDWLYH
%XLOGLQJ +HLJKW IRU ILUH VDIHW\ PHDQV RI HJUHVV &) &RQVWUXFWLRQW\SHIDFWRUVKRZQLQ7DEOH
DQG JHQHUDO VDIHW\ 7KH PD[LPXP VFRUH IRU D LI$+±(%+LV1HJDWLYH
EXLOGLQJVKDOOEH 1RWH:KHUHPL[HGRFFXSDQFLHVDUHVHSDUDWHGDQG
™ $V D VWDUWLQJ SRLQW IRU WKH DFWXDO HYDOXDWLRQ LQGLYLGXDOO\ HYDOXDWHG DV LQGLFDWHG LQ 6HFWLRQ
SURFHVV WKLV VHFWLRQ DQG 6HFWLRQ  WKHYDOXHV$+$6(%+DQG(%6VKDOOEH
GHILQH LQ GHWDLO KRZ WR SHUIRUP WKH EXLOGLQJ EDVHG RQ WKH KHLJKW RI WKH RFFXSDQF\ EHLQJ
KHLJKW DQG QXPEHU RI VWRULHV HYDOXDWLRQ 7KH HYDOXDWHG
H[DFWYDOXHVDUHWREHFRPSXWHGDQGFRPSDUHG
DJDLQVW WKH PDQGDWRU\ VDIHW\ VFRUHV 7KH ™ 7ZRKHLJKWIRUPXODVHTXDWLRQVDQG
YDOXHV DUH QRW WR EH URXQGHG )RU FDOFXODWLRQ IRUFDOFXODWLQJWKHVFRUHWREHHQWHUHGLQ7DEOH
SXUSRVHV WZR GHFLPDO SODFHV ZRXOG EH  DUH JLYHQ 2QH IRUPXOD GHWHUPLQHV D
DSSURSULDWH,WLVQRWQHFHVVDU\WREXLOGLQDQ\ KHLJKWYDOXHEDVHGRQWKHKHLJKWLQPLOOLPHWHUV
LQDFFXUDF\ WKDW RFFXUV WKURXJK WKH URXQGLQJ DQGWKHRWKHUIRUPXODGHWHUPLQHVDKHLJKWYDOXH
SURFHVV LQQXPEHURIVWRULHVEDVHGRQ6%&7DEOHV
™ 7KH PD[LPXP QXPEHU RI SRLQWV WKDW FDQ EH  DQG  UHVSHFWLYHO\ 7KH
VFRUHG IRU D EXLOGLQJ UHJDUGOHVV RI WKH GHQRPLQDWRU LQ WKH IRUPXOD IRU KHLJKW LQ PP
EXLOGLQJ¶V DOORZDEOH KHLJKW DV FRPSDUHG WR LWV  UHSUHVHQWV DQ DYHUDJH VWRU\ KHLJKW LQ
DFWXDOKHLJKWLV%XLOGLQJKHLJKWDQGQXPEHU PLOOLPHWHUV %RWK IRUPXODV PXVW EH FDOFXODWHG
RI VWRULHV DV ZHOO DV EXLOGLQJ DUHD ZKLFK LV DQG WKH OHVVHU RI WKH WZR FDOFXODWHG YDOXHV LV
FRYHUHG LQ 6HFWLRQ  GHWHUPLQH WKH WKHYDOXHWKDWPXVWEHXVHGLQWKHHYDOXDWLRQ
W\SHRIFRQVWUXFWLRQFODVVLILFDWLRQ/LPLWLQJWKH ™ 7KHDFWXDOVWRU\KHLJKWDQGWKHRYHUDOOH[LVWLQJ
QXPEHURISRLQWVWKDWFDQEHVFRUHGIRUKHLJKW EXLOGLQJ KHLJKW DUH WR EH GLUHFWO\ FRPSDUHG WR
OLPLWV WKH ZHLJKW WKDW FODVVLILFDWLRQ FRXOG 6%&7DEOHVDQGUHVSHFWLYHO\
RWKHUZLVHKDYHRQWKHRYHUDOOHYDOXDWLRQ$ORZ 7KDWWDEOHVHUYHVDVDGDWXPOHYHOWKDWDOORZV
ULVH EXLOGLQJ WKDW LV EXLOW RI D KLJK W\SH RI IRUHVWDEOLVKLQJDQXPHULFDOKHLJKWYDOXHIRUWKH
FRQVWUXFWLRQ FRXOG DFFUXH D GLVSURSRUWLRQDWHO\ H[LVWLQJEXLOGLQJE\FRPSDULQJLWVDFWXDOKHLJKW
KLJKQXPEHURISRLQWVIRUKHLJKWDVFRPSDUHG DQGLWVW\SHRIFRQVWUXFWLRQDVUHSUHVHQWHGE\D
WRWKHQXPEHURISRLQWVWKDWDUHVFRUHGIRURWKHU FRQVWUXFWLRQ IDFWRU &) ,I WKH H[LVWLQJ

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

EXLOGLQJ¶V DFWXDO KHLJKW LQ PLOOLPHWHUV LV OHVV ™ ,Q([DPSOHWKHKHLJKWYDOXHRILVHQWHUHG

WKDQ RU HTXDO WR WKH DOORZDEOH KHLJKW RI 6%& LQWRWKHFROXPQVIRUILUHVDIHW\)6PHDQVRI
 7DEOH  WKHQ WKH FRQVWUXFWLRQ IDFWRU HJUHVV0(DQGJHQHUDOVDIHW\*6
YDOXHLVQRQHJDWLYHRUSRVLWLYHPXOWLSOLHULV ™ 7KH DVVHVVHG KHLJKW YDOXH SDUDPHWHU LV RQO\
IDFWRUHGLQWRWKHFDOFXODWLRQ,IWKHDFWXDOKHLJKW RQHRIWKHVDIHW\SDUDPHWHUVWKDWQHHGWREH
H[FHHGVWKHDOORZDEOHKHLJKWLQ6%&7DEOH HYDOXDWHG ([DPSOH  VKRZV D SRVLWLYH
WKHEXLOGLQJLVQRWLQFRPSOLDQFHZLWKWKDW FRQWULEXWLRQKRZHYHUWKLVPD\QRWEHHQRXJK
WDEOH DQG UHSUHVHQWV D VDIHW\ GHILFLHQF\ $ WR UHVXOW LQ D VXIILFLHQW RYHUDOO EXLOGLQJ VFRUH
GHILFLHQF\UDWLQJLVDVVLJQHGGHSHQGHQWRQWKH 6LPLODUO\WKHQHJDWLYHYDOXHLQ([DPSOHPD\
W\SHRIFRQVWUXFWLRQ7KHFRQVWUXFWLRQIDFWRUVWR QRW LQ LWVHOI UHVXOW LQ DQ RYHUDOO LQVXIILFLHQW
HVWDEOLVKWKLVQHJDWLYHYDOXHDUHJLYHQLQ7DEOH EXLOGLQJVFRUH
 :KHQ D EXLOGLQJ LV QRW LQ
FRPSOLDQFH ZLWK 6%&  7DEOHV  DQG  %XLOGLQJ DUHD  7KH YDOXH IRU
LWLVFRQVLGHUHGOHVVVDIHWKDQDEXLOGLQJ EXLOGLQJDUHDVKDOOEHGHWHUPLQHGE\WKHIRUPXODLQ
WKDWGRHVFRPSO\ZLWKWKRVHWDEOHV$VDUHVXOW 6HFWLRQ6HFWLRQRI6%&DQGWKH
GHILFLHQF\ SRLQWV DUH DVVHVVHG $GGLWLRQDO IRUPXOD LQ 6HFWLRQ  VKDOO EH XVHG WR
VDIHJXDUGVPXVWEHSURYLGHGWRFRPSHQVDWHIRU GHWHUPLQH WKH DOORZDEOH DUHD RI WKH EXLOGLQJ
WKLVFRQGLWLRQ7KLVLVWKHSULPDU\UHDVRQWKDWD 6XEWUDFWWKHDFWXDOEXLOGLQJDUHDIURPWKHDOORZDEOH
GLIIHUHQW FRQVWUXFWLRQ IDFWRU PXVW EH XVHG IRU DUHDDQGGLYLGHE\P(QWHUWKHDUHDYDOXHDQG
EXLOGLQJV QRW LQ FRPSOLDQFH 7KH FRQVWUXFWLRQ LWVVLJQSRVLWLYHRUQHJDWLYHLQ7DEOHXQGHU
IDFWRULVWKHHTXLYDOHQWGHILFLHQF\WKDWPXVWEH 6DIHW\3DUDPHWHU%XLOGLQJ$UHDIRUILUH
RYHUFRPHE\SURYLGLQJDGGLWLRQDOSURWHFWLRQLQ
VDIHW\ PHDQV RI HJUHVV DQG JHQHUDO VDIHW\ ,Q
RWKHUDUHDVWKDWDUHWREHHYDOXDWHG
™ ([DPSOH GHWHUPLQLQJWKHDUHDYDOXHWKHPD[LPXPSHUPLWWHG
$VL[VWRU\EXLOGLQJRI7\SH,%FRQVWUXFWLRQLV SRVLWLYHYDOXHIRUDUHDLVSHUFHQWRIWKHILUHVDIHW\
PWDOO7KHEXLOGLQJLVQRWVSULQNOHUHG,WFRQWDLQVD VFRUHDVOLVWHGLQ7DEOH0DQGDWRU\6DIHW\
*URXS%EXVLQHVVRFFXSDQF\ 6FRUHV*URXS,RFFXSDQFLHVVKDOOEHVFRUHG]HUR
™ 7KHDOORZDEOHVWRU\KHLJKWIURP6%&7DEOH
™ ,QWKLVVHFWLRQWKHFRGHXVHULVVKRZQKRZWR
LVVWRULHVDQGWKHDOORZDEOHKHLJKWLQ
FDOFXODWH WKH EXLOGLQJ VFRUH IRU WKH EXLOGLQJ
PHWHUVIURP6%&7DEOHLVP
DUHD7KLVVHFWLRQDOVRUHTXLUHVWKH PD[LPXP
™ $+ P
VFRUH RI D EXLOGLQJ LQ WKLV FDWHJRU\ 7KH
™ $6 VWRULHV
PD[LPXP YDOXH LV  SHUFHQW RI MXVW WKH ILUH
™ (%+ P
VDIHW\ VFRUH OLVWHG LQ 7DEOH  VHH WKH
™ (%6 VWRULHV
FRPPHQWDU\ WR 6HFWLRQ  7KLV
™ &) IURP7DEOHEHFDXVH
PD[LPXPVFRUHLVDSSOLFDEOHDQGHTXDOIRUWKH
LVDSRVLWLYHQXPEHU
WKUHH EXLOGLQJ VFRUH FDWHJRULHV²ILUH VDIHW\
PHDQV RI HJUHVV DQG JHQHUDO VDIHW\ 7KH
™ ([DPSOH
SRVLWLYH VFRUH LV OLPLWHG WR SUHYHQW WKLV RQH
$VHYHQVWRU\EXLOGLQJRI7\SH,,,%FRQVWUXFWLRQ LV
SDUDPHWHU IURP SURYLGLQJ HQRXJK SRLQWV WR
PWDOO7KHEXLOGLQJLVVSULQNOHUHG,WFRQWDLQVD
XQMXVWLILDEO\RYHUFRPHWRRPDQ\GHILFLHQFLHVLQ
*URXS0PHUFDQWLOHRFFXSDQF\
RWKHUSDUDPHWHUV
™ 7KHDOORZDEOHVWRU\KHLJKWIURP6%&7DEOH
LVIRXUVWRULHVDQGWKHDOORZDEOHKHLJKWLQ 
PHWHUIURP6%&7DEOHLVP  $OORZDEOH DUHD IRUPXOD  7KH
™ $+ IRUVSULQNOHUV P IROORZLQJ IRUPXOD VKDOO EH XVHG LQ FRPSXWLQJ
™ $6 IRUVSULQNOHUV VWRULHV DOORZDEOHDUHD
™ (%6 VWRULHV

™ (%+ P
™ ) IURP7DEOHEHFDXVH± ‫ܣ‬௔ ൌ ͲǤͲͻʹͻ ቀ௧ ൅ ൫ܰܵ ൈ ‫ܫ‬௙ ൯ቁ 
LVDQHJDWLYHQXPEHU 
™ 7KH JRYHUQLQJ EXLOGLQJ KHLJKW YDOXH LV  ZKHUH
EHFDXVHLWLVWKHOHVVHURIWKHWZRKHLJKWYDOXHV Aa $OORZDEOHEXLOGLQJDUHDSHUVWRU\P
™ 7KH YDOXHV LQ WKH H[DPSOHV GHWHUPLQH WKH At  7DEXODUDUHDSHUIORRUVTXDUHPHWHUV
HQWULHVIRUWKH6XPPDU\6KHHWRI7DEOH
LQDFFRUGDQFHZLWK7DEOHRI6%&
IRUWKH6DIHW\3DUDPHWHURI%XLOGLQJ+HLJKWRQ
OLQH 16 7DEXODU DOORZDEOH DUHD IDFWRU LQ DFFRUGDQFH
™ ,Q([DPSOHWKHKHLJKWYDOXHRILVHQWHUHG ZLWK 7DEOH  RI 6%&  IRU D QRQVSULQNOHUHG
LQWRWKHFROXPQVIRUILUHVDIHW\)6PHDQVRI EXLOGLQJ UHJDUGOHVV RI ZKHWKHU WKH EXLOGLQJ LV
HJUHVV0(DQGJHQHUDOVDIHW\*6 VSULQNOHUHG
If $UHD IDFWRU LQFUHDVH GXH WR IURQWDJH DV

6%&&& 

 &+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

FDOFXODWHGLQDFFRUGDQFHZLWKVHFWLRQRI6%& EXLOGLQJLVILYHVWRULHVLQKHLJKWXQVSULQNOHUHG
7KHRYHUDOOEXLOGLQJDUHDLVPE\P
™ 7KHIRUPXODHTXDWLRQXVHG WRFDOFXODWH
™ $UHDYDOXH 
WKH DOORZDEOH DUHD RI WKH EXLOGLQJ LV D GLUHFW
™ $OORZDEOHDUHD P
FRUUHODWLRQRIWKHDUHDLQFUHDVHVDQGUHGXFWLRQV
™ $FWXDODUHD P
DOORZHGIRUQHZEXLOGLQJVLQ 6%& 6HFWLRQ
™ ,Q7DEOHHQWHUWKHIROORZLQJYDOXHVIRU
7KHXVHRIWKHVHLQFUHDVHVDQGUHGXFWLRQV
WKH 6DIHW\ 3DUDPHWHU RI %XLOGLQJ $UHD RQ OLQH
LVDGGUHVVHGLQ6%&&KDSWHU

™ )LUHVDIHW\)6  
 $UHD IRUPXOD  7KH IROORZLQJ ™ 0HDQVRIHJUHVV0( 
IRUPXODVKDOOEHXVHGLQFRPSXWLQJWKHDUHDYDOXH ™ *HQHUDOVDIHW\*6 
'HWHUPLQHWKHDUHDYDOXHIRUHDFKRFFXSDQF\IORRU ™ 7KH SRVLWLYH YDOXHV HQWHUHG LQ 7DEOH 
XQGHU 6DIHW\ 3DUDPHWHUV  %XLOGLQJ
DUHDRQDIORRUE\IORRUEDVLV)RUHDFKRFFXSDQF\
$UHD )6   0(   DQG *6  
FKRRVHWKHPLQLPXPDUHDYDOXHRIWKHVHWRIYDOXHV UHSUHVHQWWKHHYDOXDWLRQIRURQO\RQHRIWKH
REWDLQHGIRUWKHSDUWLFXODURFFXSDQF\ VDIHW\ SDUDPHWHUV WKDW PXVW EH DVVHVVHG WR
DUULYHDWWKHRYHUDOOEXLOGLQJVFRUHHYDOXDWLRQRI
ŽŽ‘™ƒ„Ž‡ …–—ƒŽ …–—ƒŽ
7DEOH  $V SUHYLRXVO\ GHVFULEHG IRU WKH
ƒ”‡ƒ௜  ƒ”‡ƒ௜  ƒ”‡ƒ௡ 
”‡ƒ˜ƒŽ—‡௜ ൌ  ൦ͳ െ ൮ ൅ ‫ڮ‬ ൅ ൲൪ EXLOGLQJ KHLJKW SDUDPHWHU YDOXHV XQGHU OLQH
ͳͳʹሺଶ ሻ ŽŽ‘™ƒ„Ž‡ ŽŽ‘™ƒ„Ž‡
ƒ”‡ƒ௜  ƒ”‡ƒ௡  RI7DEOHDVLQJOHSDUDPHWHURI
WKHWRWDOVDIHW\SDUDPHWHUVWREHDVVHVVHG
 
GRHV QRW LQ LWVHOI GHWHUPLQH WKH XOWLPDWH
ZKHUH DFFHSWDEOHEXLOGLQJVFRUH
i  9DOXHIRUDQLQGLYLGXDOVHSDUDWHGRFFXSDQF\RQ ™ ([DPSOH
DIORRU ™ &RPPHQWDU\)LJXUH LOOXVWUDWHVD
n  1XPEHURIVHSDUDWHGRFFXSDQFLHVRQDIORRU VHSDUDWHG PL[HG RFFXSDQF\ EXLOGLQJ *URXSV
™ 7KH DUHD IRUPXOD HTXDWLRQ  SURYLGHV D % 0 DQG 6 RI 7\SH ,,,% FRQVWUXFWLRQ 7KH
QXPHULFDOYDOXHIRUWKHDFWXDOEXLOGLQJDUHDWR EXLOGLQJ LV WZR VWRULHV LQ KHLJKW IXOO\
EH HQWHUHG LQ 7DEOH  IRU WKH 6DIHW\ VSULQNOHUHG
3DUDPHWHU%XLOGLQJ$UHDRQOLQH,IWKH ™ 7KHRYHUDOOEXLOGLQJDUHDLVPE\P
DUHD RI WKH H[LVWLQJ EXLOGLQJ LV OHVV WKDQ WKH ™ $FWXDO DUHD IRU *URXS 0 RQ ILUVW VWRU\  
DOORZDEOHDUHDLWLVFRQVLGHUHGWREHVDIHUDQG P
WKH EXLOGLQJ UHFHLYHV D SRVLWLYH VFRUH ,I WKH ™ $FWXDODUHDIRU*URXS0RQVHFRQGVWRU\ 
DUHD RI WKH H[LVWLQJ EXLOGLQJ LV ODUJHU WKDQ WKH P
DOORZDEOHDUHDLWUHSUHVHQWVDFRQGLWLRQWKDWLV ™ $FWXDODUHDIRU*URXS%RQVHFRQGVWRU\ 
MXGJHGWREHOHVVVDIHDQGWKHEXLOGLQJUHFHLYHV P
DQHJDWLYHVFRUH ™ $FWXDO DUHD IRU *URXS 6 RQ VHFRQG VWRU\ 
™ 7R XVH WKH IRUPXOD IRU H[LVWLQJ EXLOGLQJV WKDW P
FRQWDLQPL[HGRFFXSDQFLHVDQDUHDYDOXHPXVW ™ )URQWDJH,QFUHDVH IURP6HFWLRQ
EHGHWHUPLQHGIRUHDFKVWRU\RIDEXLOGLQJ,ID ™ 7DEXODUDUHDVIURP7DEOH
EXLOGLQJFRQWDLQVMXVWRQHRFFXSDQF\RUMXVWRQH ™ *URXS% P
RFFXSDQF\RQDSDUWLFXODUIORRUVHSDUDWHGIURP ™ *URXS0 P
RWKHUIORRUVWKHIRUPXODVLPSO\UHGXFHVWRWKH ™ *URXS6 P
DOORZDEOHDUHDPLQXVWKHDFWXDODUHDGLYLGHGE\ ™ $OORZDEOH$UHDV
WKH FRQVWDQW RI  7KH IRUPXOD LV DOVR ™ $$ 16îî7DEXODU$UHD
DSSOLFDEOH WR D VWRU\ FRQWDLQLQJ VHYHUDO ™ 16IRU*URXS% P
VHSDUDWHGRFFXSDQFLHV,QVXFKDVLWXDWLRQWKH ™ $$IRU*URXS% P
IRUPXODUHTXLUHVHDFKDFWXDODUHDWREHGLYLGHG ™ 16IRU*URXS0 P
E\LWVUHVSHFWLYHDOORZDEOHDUHD7KHUHVXOWLQJ ™ $$IRU*URXS0 P
IUDFWLRQV DUH DGGHG WRJHWKHU VXEWUDFWHG IURP ™ 16IRU*URXS6 P
WKHFRQVWDQWRIDQGPXOWLSOLHGE\WKHUDWLRRI ™ $$IRU*URXS6 P
WKHDOORZDEOHDUHDRIWKHSDUWLFXODUXVHGLYLGHG ™ $UHD9DOXHV
E\ WKH FRQVWDQW  7KLV PHWKRG RI ™ )RU*URXS0VWVWRU\
GHWHUPLQLQJ DUHD YDOXHV IRU VHYHUDO ™ $UHD9DOXH 
RFFXSDQFLHV WKDW DUH VHSDUDWHG RQ D VWRU\ LV ™ )RU*URXS%QGVWRU\
GLUHFWO\FRPSDUDEOHWRWKHXQLW\IRUPXODLQ6%& ™ $UHDYDOXH 
6HFWLRQ ™ )RU*URXS0QGVWRU\
™ ([DPSOH ™ $UHDYDOXH  
™ &RPPHQWDU\)LJXUH LOOXVWUDWHVD ™ )RU*URXS6QGVWRU\
*URXS%EXLOGLQJRI7\SH,,$FRQVWUXFWLRQ7KH ™ $UHDYDOXH 

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

™ 6LQFH WKHVH PL[HG RFFXSDQFLHV DUH EHLQJ FRPSDUWPHQWV E\ FRQVWUXFWLQJ ILUH EDUULHUV LQ
VHSDUDWHG VR WKDW RQH RI WKH FDWHJRULHV DFFRUGDQFHZLWK6HFWLRQFRXOGEHD
LQGLFDWHGLQ6HFWLRQLVDSSOLFDEOHD FRVWHIIHFWLYH ZD\ WR LQFUHDVH WKH EXLOGLQJ¶V
VHSDUDWH VFRUH PXVW EH FRPSXWHG IRU HDFK VDIHW\VFRUH
RFFXSDQF\
™ ,QWKLVH[DPSOHWKHDUHDYDOXHIRUWKH*URXS% 
RFFXSDQF\ LV FDOFXODWHG WR EH  EXW WKH  :DOOFRQVWUXFWLRQ$ZDOOXVHGWR
PD[LPXPDUHDYDOXHSHUPLWWHGLVSHUFHQWRI FUHDWHVHSDUDWHFRPSDUWPHQWVVKDOOEHDILUHEDUULHU
WKHPDQGDWRU\ILUHVDIHW\VFRUHOLVWHGLQ7DEOH FRQIRUPLQJWR6HFWLRQRI6%&ZLWKDILUH
 )RU D *URXS % RFFXSDQF\ WKH UHVLVWDQFHUDWLQJRIQRWOHVVWKDQKRXUV:KHUHWKH
PDQGDWRU\ILUHVDIHW\VFRUHLVWKHUHIRUHWKH EXLOGLQJ LV QRW GLYLGHG LQWR PRUH WKDQ RQH
PD[LPXP SRVLWLYH YDOXH WKDW FDQ EH HQWHUHG FRPSDUWPHQWWKHFRPSDUWPHQWVL]HVKDOOEHWDNHQ
LQWR7DEOHLV DVWKHWRWDOIORRUDUHDRQDOOIORRUV:KHUHWKHUHLV
™ :KHQ DQ RFFXSDQF\ LV ORFDWHG LQ PRUH WKDQ PRUH WKDQ RQH FRPSDUWPHQW ZLWKLQ D VWRU\ HDFK
RQH VWRU\ D VHSDUDWH DUHD YDOXH PXVW EH
FRPSDUWPHQWHGDUHDRQVXFKVWRU\VKDOOEHSURYLGHG
FDOFXODWHG IRU HDFK VWRU\ )RU LQSXW LQWR 7DEOH
WKHDUHDYDOXHWREHXVHGLVWKHOHVVHU ZLWKDKRUL]RQWDOH[LWFRQIRUPLQJWR6HFWLRQ
RI DOO WKH LQGLYLGXDO DUHD YDOXHV IRU WKDW RI6%&7KHILUHGRRUVHUYLQJDVWKHKRUL]RQWDO
RFFXSDQF\ JURXS EXW QRW JUHDWHU WKDQ  H[LW EHWZHHQ FRPSDUWPHQWV VKDOO EH VR LQVWDOOHG
SHUFHQW RI WKH PDQGDWRU\ ILUH VDIHW\ VFRUH ,Q ILWWHGDQGJDVNHWHGWKDWVXFKILUHGRRUZLOOSURYLGH
&RPPHQWDU\)LJXUH  WKHUHLVDQ DVXEVWDQWLDOEDUULHUWRWKHSDVVDJHRIVPRNH
DUHD FODVVLILHG DV D *URXS 0 RFFXSDQF\ RQ
™ 7KLV VHFWLRQ VWDWHV WKDW WKH ZDOOV GHWHUPLQLQJ
ERWK WKH ILUVW DQG VHFRQG VWRULHV 7KH DUHD
WKHERXQGDU\RIWKHFRPSDUWPHQWQHHGWRKDYH
YDOXH IRU WKH *URXS 0 RFFXSDQF\ RQ WKH ILUVW
ILUHEDUULHU UDWLQJV RI QRW OHVV WKDQ  KRXUV
VWRU\ LV  DQG WKH DUHD YDOXH IRU WKH
7KHVH DVVHPEOLHV PXVW EH FRQVWUXFWHG LQ
VHFRQG VWRU\ LV  )LIW\ SHUFHQW RI WKH
DFFRUGDQFHZLWK6%&6HFWLRQ)RUDQ
PDQGDWRU\ILUHVDIHW\VFRUHIRU*URXS0LV
H[LVWLQJEXLOGLQJWKLVPD\QHHGWREHHYDOXDWHG
7KHORZHVWYDOXHIRUDOOWKH*URXS0RFFXSDQW
E\ ERWK DQDO\]LQJ DYDLODEOH SODQV DQG RQVLWH
DUHDVLQWKHEXLOGLQJLVZKLFKLVSHUFHQW
LQYHVWLJDWLRQV ZLWK D SURIHVVLRQDO HQJLQHHULQJ
RIWKHPDQGDWRU\ILUHVDIHW\VFRUH
GHWHUPLQDWLRQ RI WKH UHTXLUHG KRXU ILUH
™ 7KH DUHD YDOXH IRU WKH *URXS 6 RFFXSDQF\
UHVLVWDQFHUDWLQJ,IWKHILUHUHVLVWDQFHUDWLQJLV
SRUWLRQRIWKHEXLOGLQJLV7KLVYDOXHMXVW
OHVV WKDQ  KRXUV RU FDQQRW EH UHDVRQDEO\
DVWKHYDOXHVIRUWKHRWKHURFFXSDQFLHVLQWKLV
GHWHUPLQHG VXFK ZDOOV VKRXOG QRW EH
H[DPSOH H[FHHGV WKH SHUFHQW PD[LPXP
FRQVLGHUHG DV FUHDWLQJ D FRPSDUWPHQW 7KH
SHUPLWWHG E\ WKH PDQGDWRU\ ILUH VDIHW\ VFRUH
HQWLUHVWRU\RIDQH[LVWLQJEXLOGLQJPXVWWKHQEH
7KHPD[LPXPIRU*URXS6RFFXSDQF\LV
FRQVLGHUHG WKH FRPSDUWPHQW ,I KRXUUDWHG
SHUFHQWRI
IORRU FHLOLQJ DVVHPEOLHV DUH QRW SUHVHQW WKH
 &RPSDUWPHQWDWLRQ(YDOXDWHWKH FRPSDUWPHQWVL]HEHFRPHVWKHWRWDODUHDRIDOO
FRPSDUWPHQWVFUHDWHGE\ILUHEDUULHUVRUKRUL]RQWDO VWRULHVFRPELQHG
DVVHPEOLHVZKLFKFRPSO\ZLWK6HFWLRQV ™ 2SHQLQJSURWHFWLRQDQGFRQWLQXLW\UHTXLUHPHQWV
DQGDQGZKLFKDUHH[FOXVLYHRIWKHZDOO RI 6%&  6HFWLRQ  PXVW EH IROORZHG WR
PDLQWDLQ WKH LQWHJULW\ RI WKH ILUHUHVLVWDQFH
HOHPHQWV FRQVLGHUHG XQGHU 6HFWLRQV  DQG
UDWHG ZDOO DVVHPEOLHV DQG WKXV WKH
 &RQIRUPLQJ FRPSDUWPHQWV VKDOO EH FRPSDUWPHQWV +RUL]RQWDO H[LWV DQG WKHLU ILUH
ILJXUHG DV WKH QHW DUHD DQG GR QRW LQFOXGH VKDIWV GRRUVPXVWFRPSO\ZLWK6%&6HFWLRQ
FKDVHVVWDLUZD\V ZDOOV RU FROXPQV 8VLQJ 7DEOH ™ 7KH HYDOXDWLRQ RI DQ H[LVWLQJ GRRU FRQGLWLRQ
 GHWHUPLQH WKH DSSURSULDWH UHTXLUHV DQ LQYHVWLJDWLRQ RI DYDLODEOH
FRPSDUWPHQWDWLRQYDOXH&9DQGHQWHUWKDWYDOXH HQJLQHHULQJ GDWD DQG RQVLWH LQVSHFWLRQV $Q\
LQWR7DEOHXQGHU6DIHW\3DUDPHWHU XQFHUWDLQW\DVWRWKHSHUIRUPDQFHRIVXFKGRRUV
&RPSDUWPHQWDWLRQIRUILUHVDIHW\PHDQVRIHJUHVV PD\ UHVXOW LQ WKH RSHQLQJV EHLQJ FRQVLGHUHG
DQGJHQHUDOVDIHW\ XQSURWHFWHGZKLFKUHVXOWVLQDODUJHUDVVXPHG
FRPSDUWPHQW DUHD RU UHTXLUHV PRGLILFDWLRQ RI
™ 7DEOH  EHORZ FRQWDLQV FRPSDUWPHQW WKH GRRU WR PHHW WKH FXUUHQW UHTXLUHPHQWV RI
YDOXHV EDVHG RQ WKH JURXS DQG WKH DUHD RI 6%&6HFWLRQ
LQGLYLGXDO FRPSDUWPHQWV 7KH YDOXH LQFUHDVHV
DV WKH VL]H RI WKH FRPSDUWPHQW GHFUHDVHV LQ 
RUGHU WR UHFRJQL]H WKH VDIHW\ EHQHILW RI ILUH  )ORRUFHLOLQJ FRQVWUXFWLRQ  $
UHVLVWDQFHUDWHG FRPSDUWPHQWDWLRQ ,I WKH IORRUFHLOLQJDVVHPEO\XVHGWRFUHDWHFRPSDUWPHQWV
H[LVWLQJ IORRU FRQVWUXFWLRQ LQKHUHQWO\ FRPSOLHV VKDOOFRQIRUPWR6HFWLRQRI6%&DQGVKDOO
ZLWK 6HFWLRQ  FUHDWLQJ KDYHDILUHUHVLVWDQFHUDWLQJRIQRWOHVVWKDQKRXUV

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

™ 7KHEXLOGLQJIHDWXUHVWKDWFUHDWHWKHKRUL]RQWDO  &DWHJRU\ D²1R ILUH SDUWLWLRQV LQFRPSOHWH

ERXQGDULHV RI WKH FRPSDUWPHQW PXVW SURYLGH ILUHSDUWLWLRQVQRGRRUVGRRUVQRWVHOIFORVLQJ
HIIHFWLYH ILUH UHVLVWDQFH EHWZHHQ IORRUV 7KH RUDXWRPDWLFFORVLQJ
H[LVWLQJIORRUFHLOLQJDVVHPEOLHVPXVWEHUDWHG  &DWHJRU\ E²)LUH SDUWLWLRQV RU IORRU
IRUKRXUVDQGQHHGWREHWLJKWDJDLQVWH[WHULRU
DVVHPEOLHV ZLWK OHVV WKDQ KRXU ILUH
ZDOOV 3HQHWUDWLRQV LQ WKH IORRUFHLOLQJ
DVVHPEOLHV PXVW EH SURWHFWHG LQ DFFRUGDQFH UHVLVWDQFH UDWLQJV RU QRW FRQVWUXFWHG LQ
ZLWK6%&6HFWLRQWRPDLQWDLQWKHLUILUH DFFRUGDQFHZLWK6HFWLRQVRURI6%&
UHVLVWDQWLQWHJULW\7KHIORRUFHLOLQJDVVHPEOLHV UHVSHFWLYHO\
PXVWFRQIRUPWRDOORIWKHUHTXLUHPHQWVRI6%&  &DWHJRU\ F²)LUH SDUWLWLRQV ZLWK KRXU RU
 6HFWLRQ  WR FUHDWH WKH OHYHO RI JUHDWHU ILUHUHVLVWDQFH UDWLQJV FRQVWUXFWHG LQ
FRPSDUWPHQWDWLRQ UHTXLUHG IRU WKLV HYDOXDWLRQ DFFRUGDQFHZLWKVHFWLRQRI6%&DQG
SDUDPHWHU IORRUDVVHPEOLHVZLWKKRXUEXWOHVVWKDQ
 7HQDQW DQG GZHOOLQJ XQLW KRXU ILUHUHVLVWDQFH UDWLQJV FRQVWUXFWHG LQ
VHSDUDWLRQV(YDOXDWHWKHILUHUHVLVWDQFHUDWLQJRI DFFRUGDQFHZLWK6HFWLRQRI6%&RU
IORRUV DQG ZDOOV VHSDUDWLQJ WHQDQWV LQFOXGLQJ ZLWKRQO\RQHWHQDQWZLWKLQWKHIORRUDUHD
GZHOOLQJ XQLWV DQG QRW HYDOXDWHG XQGHU 6HFWLRQV  &DWHJRU\G²)LUHEDUULHUVZLWKKRXUEXWOHVV
DQG*URXS,RFFXSDQFLHVVKDOO WKDQKRXUILUHUHVLVWDQFHUDWLQJVFRQVWUXFWHG
HYDOXDWH WKH UDWLQJ RI WKH VHSDUDWLRQV EHWZHHQ LQ DFFRUGDQFH ZLWK VHFWLRQ  RI 6%& 
SDWLHQWVOHHSLQJURRPV DQG IORRU DVVHPEOLHV ZLWK KRXU RU JUHDWHU
ILUHUHVLVWDQFH UDWLQJV FRQVWUXFWHG LQ
™ 8QGHUWKHFDWHJRULHVDQGRFFXSDQFLHVLQ7DEOH DFFRUGDQFHZLWK6HFWLRQRI6%&
GHWHUPLQHWKHDSSURSULDWHYDOXHDQG
 &DWHJRU\ H²)LUH EDUULHUV DQG IORRU
HQWHU WKDW YDOXH LQ 7DEOH  XQGHU 6DIHW\
3DUDPHWHU7HQDQWDQG'ZHOOLQJ8QLW
DVVHPEOLHV ZLWK KRXU RU JUHDWHU ILUH
6HSDUDWLRQ IRU ILUH VDIHW\ PHDQV RI HJUHVV UHVLVWDQFH UDWLQJV DQG FRQVWUXFWHG LQ
DQGJHQHUDOVDIHW\ DFFRUGDQFHZLWK6HFWLRQVDQGRI6%&
™ 7KLVSDUDPHWHULVXVHGWRHYDOXDWHSDUWLWLRQVLQ UHVSHFWLYHO\
DQ H[LVWLQJ EXLOGLQJ RWKHU WKDQ WKRVH XVHG IRU ™ 7HQDQWVSDFHDQGGZHOOLQJXQLWVHSDUDWLRQVDUH
WKH FUHDWLRQ RI FRPSDUWPHQWV LQ 6HFWLRQ FDWHJRUL]HG E\ WKH SDUWLWLRQV EHLQJ HYDOXDWHG
 RU WKH HQFORVXUH RI FRUULGRUV LQ 7KHYDOXHVRIHDFKFDWHJRU\DUHOLVWHGLQ7DEOH
6HFWLRQ  7KLV VHFWLRQ H[DPLQHV WKH E\RFFXSDQF\FODVVLILFDWLRQV7\SLFDO
OHYHORIVHSDUDWLRQEHWZHHQWHQDQWVSDFHVDQG LOOXVWUDWLRQVRIWKHW\SHVRISDUWLWLRQVDUHVKRZQ
GZHOOLQJXQLWV7KHOLVWHGFDWHJRULHVVSHFLILFDOO\ LQ &RPPHQWDU\ )LJXUHV  DQG
UHIHUHQFH6%&6HFWLRQVDQG  7KH OLVWHG FDWHJRULHV SURYLGH D
QRWRQO\IRUILUHUHVLVWDQFHUDWLQJVEXWDOVRIRU JUDGXDWHG OHYHORIVHSDUDWLRQZKHQFRPSDUHG
FRQWLQXLW\ DQG RSHQLQJSURWHFWLRQ SXUSRVHV WRQHZFRQVWUXFWLRQUHTXLUHPHQWV
)XUWKHUFUHGLWLVSURYLGHGIRUH[LVWLQJEXLOGLQJV ™ &DWHJRU\DDGGUHVVHVWKHVLWXDWLRQZKHUHWKHUH
WKDW KDYH D KRXUUDWHG VHSDUDWLRQ EHWZHHQ LV QR VHSDUDWLRQ RU WKHUH DUH JDSV LQ WKH
DGMDFHQWWHQDQWVSDFHVRUGZHOOLQJXQLWVZKLFK VHSDUDWLRQSURYLGHGEHWZHHQWHQDQWVSDFHVRU
H[FHHGVWKHUHTXLUHPHQWIRUQHZFRQVWUXFWLRQ GZHOOLQJXQLWV
™ 7DEOH  EHORZ SURYLGHV YDOXHV IRU ™ &DWHJRU\EDFFRXQWVIRUWKRVHWHQDQWVSDFHVRU
WHQDQWVSDFHDQGGZHOOLQJXQLWVHSDUDWLRQV7KH GZHOOLQJ XQLWV WKDW DUH VHSDUDWHG IURP RQH
UDWLRQDOH IRU FRQVLGHULQJ D QRQILUHUHVLVWDQFH DQRWKHUZLWKOHVVWKDQDKRXUUDWLQJ
UDWHG RU LQFRPSOHWH VHSDUDWLRQ DV D VDIHW\ ™ &DWHJRU\FUHSUHVHQWVZKDWLVUHTXLUHGIRUQHZ
GHILFLHQF\ LV WKDW HYHQ WKRXJK WKH DVVHPEO\ FRQVWUXFWLRQIRUWHQDQWVSDFHDQGGZHOOLQJXQLW
PD\KDYHVRPHOLPLWHGILUHUHVLVWDQFHLWFDQQRW VHSDUDWLRQ $Q H[LVWLQJ EXLOGLQJ PHHWLQJ WKLV
EH DVVXPHG WR SURYLGH WKH OHYHO RI ILUH OHYHORIFRPSOLDQFHJDLQVQREHQHILWRUSHQDOW\
SHUIRUPDQFH H[SHFWHG RI D IXOO\ FRPSO\LQJ DQGWKHUHIRUHWKHVHSDUDWLRQYDOXHLV]HUR
DVVHPEO\ %XLOGLQJV FRQWDLQLQJ *URXS 5 ™ &DWHJRU\ G LV JLYHQ DGGLWLRQDO FUHGLW EHFDXVH
RFFXSDQFLHVKDYHVHSDUDWLRQYDOXHVEDVHGRQ WKHWHQDQWVSDFHRUGZHOOLQJXQLWVHSDUDWLRQKDV
WKH DVVXPSWLRQ WKDW GZHOOLQJ XQLW VHSDUDWLRQV DILUHUHVLVWDQFHUDWLQJWKDWPDUJLQDOO\H[FHHGV
DUH PRUH FULWLFDO WKDQ WHQDQW VHSDUDWLRQV LQ WKH PLQLPXP UHTXLUHG IRU QHZ FRQVWUXFWLRQ
RWKHURFFXSDQFLHV $GGLWLRQDOO\WKHZDOOVDUHUHTXLUHGWRPHHWWKH
ILUH EDUULHU UHTXLUHPHQWV RI 6%&  6HFWLRQ
 &DWHJRULHV  7KH FDWHJRULHV IRU 
WHQDQWDQGGZHOOLQJXQLWVHSDUDWLRQVDUH ™ &DWHJRU\ H SURYLGHV LQFUHDVHG FUHGLW IRU
H[LVWLQJ EXLOGLQJV WKDW KDYH ZDOOV DQG
IORRUFHLOLQJ DVVHPEOLHV ZLWK ILUHUHVLVWDQFH

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

UDWLQJV H[FHHGLQJ WKH QHZ FRQVWUXFWLRQ , RFFXSDQFLHV 7KH HPSKDVLV KHUH LV WKDW
UHTXLUHPHQW E\ DW OHDVW  IXOO KRXU 7KLV ZKHQFRUULGRUVDUHDOUHDG\SUHVHQWWKH\PXVW
LQFUHDVHGOHYHORIILUHUHVLVWDQWVHSDUDWLRQLQDQ SURYLGH EDVLF SURWHFWLRQ 7KH WDEOH LV DQ
H[LVWLQJ EXLOGLQJ LV FUHGLWHG DFFRUGLQJO\ ZLWK DVVHVVPHQWRIWKHUHODWLYHULVNUHSUHVHQWHGE\
KLJKVHSDUDWLRQYDOXHV WKHFRUULGRU
™ 1RWH D WR WKH WDEOH IXUWKHU FRQWUROV WKH
 &RUULGRUZDOOV(YDOXDWHWKHILUH DSSOLFDWLRQ RI &DWHJRULHV F DQG G WR H[LVWLQJ
UHVLVWDQFH UDWLQJ DQG GHJUHH RI FRPSOHWHQHVV RI EXLOGLQJV ZLWK FHUWDLQ PHDQVRIHJUHVV
ZDOOVZKLFKFUHDWHFRUULGRUVVHUYLQJWKHIORRUDQG DUUDQJHPHQWV $OWKRXJK DQ H[LVWLQJ EXLOGLQJ
WKDW DUH FRQVWUXFWHG LQ DFFRUGDQFH ZLWK 6HFWLRQ PD\ KDYH FRUULGRUV ZLWK VLJQLILFDQW ILUH
RI6%&7KLVHYDOXDWLRQVKDOOQRWLQFOXGH UHVLVWDQFHUDWLQJVDQGSURWHFWHGRSHQLQJVOLWWOH
WKH ZDOO HOHPHQWV FRQVLGHUHG XQGHU 6HFWLRQV FUHGLW FDQ EH JUDQWHG ZKHQ WKH EXLOGLQJ
 DQG  8QGHU WKH FDWHJRULHV DQG RFFXSDQWVDUHSURWHFWHGIRURQO\DVKRUWSHULRG
JURXSVLQ7DEOHGHWHUPLQHWKHDSSURSULDWH RIWLPH9HU\VKRUWFRUULGRUVLQODUJHIORRUSODQV
YDOXHDQGHQWHUWKDWYDOXHLQWR7DEOHXQGHU RUFRUULGRUVORFDWHGLQMXVWRQHWHQDQWVSDFHRI
DIORRUSODQSURYLGHDEHQHILWWRRQO\DSRUWLRQRI
6DIHW\3DUDPHWHU&RUULGRU:DOOVIRUILUH
WKH RFFXSDQW ORDG IRU D VPDOO SRUWLRQ RI WKH
VDIHW\PHDQVRIHJUHVVDQGJHQHUDOVDIHW\ RYHUDOO H[LW DFFHVV WUDYHO DQG WKXV GR QRW
™ &RUULGRU ZDOOV DUH HYDOXDWHG DV ILUH SDUWLWLRQV DFFUXH DQ\ SRVLWLYH SRLQWV 8QOHVV UDWHG
SRVVHVVLQJ DQ DGHTXDWH ILUHUHVLVWDQFH UDWLQJ FRUULGRUVDUHDYDLODEOHIRUDOORFFXSDQWVRIWKDW
DQGFRPSOHWHQHVVWRUHVWULFWWKHVSUHDGRIILUH SDUWLFXODUIORRURUWKH\SURYLGHDSURWHFWHGSDWK
LQWR WKH FRUULGRU 9DULRXV FDWHJRULHV UHTXLUH RIWUDYHOIRUDWOHDVWRQHKDOIRIWKHRFFXSDQWV¶
FRPSOLDQFH ZLWK SUHVFULEHG UHTXLUHPHQWV LQ RYHUDOO WUDYHO OHQJWK QHJDWLYH FRUULGRU ZDOO
6%&  6HFWLRQV  DQG  ([LVWLQJ YDOXHVDUHDVVLJQHG,QH[LVWLQJEXLOGLQJVZLWK
FRUULGRUZDOOVUHTXLUHLQYHVWLJDWLRQDQGDQDO\VLV YHU\ VKRUW RU OLPLWHGXVH FRUULGRUV WKH FRGH
WR GHWHUPLQH WKH HTXLYDOHQF\ WR FRGH XVHULVGLUHFWHGWRXVH&DWHJRU\EUHJDUGOHVV
UHTXLUHPHQWV &RPPHQWDU\ )LJXUHV RI WKH FRUULGRUV¶ ILUHUHVLVWDQFH UDWLQJV DQG
 DQG  LOOXVWUDWH RSHQLQJSURWHFWLYHV
YDULRXV FRUULGRU ZDOO YDOXHV &RUULGRU ZDOOV

FRQWUDVWZLWKWKHFRPSDUWPHQWDWLRQDQGWHQDQW
GZHOOLQJXQLWVHSDUDWLRQVRI6HFWLRQV
 &DWHJRULHV  7KH FDWHJRULHV IRU
DQG  E\ UHTXLULQJ DQ DSSURSULDWH ILUH FRUULGRUZDOOVDUH
UHVLVWDQFH UDWLQJ DQG FRQWLQXLW\ VHH 
FRPPHQWDU\ 6%&  6HFWLRQ  7KH  &DWHJRU\ D²1R ILUH SDUWLWLRQV LQFRPSOHWH
FRUULGRU ZDOO HYDOXDWLRQV GR QRW LQFOXGH ILUH SDUWLWLRQV QR GRRUV RU GRRUV QRW VHOI
SDUWLWLRQVUHTXLUHGWRHVWDEOLVK DFRPSDUWPHQW FORVLQJ
VHH 6HFWLRQ  RU WHQDQW DQG GZHOOLQJ  &DWHJRU\E²/HVVWKDQKRXUILUHUHVLVWDQFH
XQLW VHSDUDWLRQV VHH 6HFWLRQ  ,I D UDWLQJRU QRWFRQVWUXFWHGLQDFFRUGDQFHZLWK
FRUULGRUZDOOVHUYHVDVPRUHWKDQRQHRIWKHVH 6HFWLRQRI6%&
HOHPHQWV IRU H[DPSOH ZKHUH LW LV ERWK D
 &DWHJRU\F²KRXUWROHVVWKDQKRXUILUH
FRUULGRU ZDOO DQG LW GHILQHV D FRPSDUWPHQW
XQGHU 6HFWLRQ  DQG D FRUULGRU XQGHU
UHVLVWDQFH UDWLQJ ZLWK GRRUV FRQIRUPLQJ WR
WKLVVXEVHFWLRQLWPD\EHHYDOXDWHGXQGHURQH 6HFWLRQRI6%&RUZLWKRXWFRUULGRUV
SDUDPHWHURUWKHRWKHUDWWKHGHVLJQHU¶VRSWLRQ DVSHUPLWWHGE\VHFWLRQRI6%&
EXWQRWERWK  &DWHJRU\G²KRXURUJUHDWHUILUHUHVLVWDQFH
™ 7DEOH DVVLJQVYDOXHVWR WKHGLIIHUHQW UDWLQJZLWKGRRUVFRQIRUPLQJWR6HFWLRQ
XVHV EDVHG RQ WKH UHODWLYH GHJUHH RI ILUH RI6%&
UHVLVWDQFH DQG VPRNH UHVLVWDQFH RI FRUULGRU
ZDOOV 6LQFH FRUULGRUV DUH HQFORVHG FRQILQHG ™ &RUULGRUZDOOVDUHFDWHJRUL]HGE\WKHSDUWLWLRQV
VSDFHV VXEMHFW WR WKH UDSLG EXLOGXS RI VPRNH EHLQJ HYDOXDWHG7KHYDOXHVRIHDFKFDWHJRU\
DQGKHDWDGHJUHHRISURWHFWLRQLVQHFHVVDU\WR DUH OLVWHG LQ 7DEOH  E\ RFFXSDQF\
PLQLPL]H WKLV KD]DUG WR WKH RFFXSDQWV FODVVLILFDWLRQ
HJUHVVLQJ WKH EXLOGLQJ 7KH WDEOH UHIOHFWV WKLV  9HUWLFDO RSHQLQJV  (YDOXDWH WKH
HPSKDVLV WKURXJK VXEVWDQWLDO QHJDWLYH VFRUHV ILUHUHVLVWDQFH UDWLQJ RI LQWHULRU H[LW VWDLUZD\V RU
LQEXLOGLQJVZLWKRXWSURSHUO\HQFORVHGFRUULGRUV UDPSV KRLVW ZD\V HVFDODWRU RSHQLQJV DQG RWKHU
%RWK 6HFWLRQDQGWKLVWDEOHSODFHDQ
VKDIWHQFORVXUHVZLWKLQWKHEXLOGLQJDQGRSHQLQJV
HPSKDVLVRQFRUULGRUZDOOVZKLFKGLIIHUVIURP
WKDW H[SUHVVHG HOVHZKHUH LQ WKH FRGH )RU EHWZHHQ WZR RU PRUH IORRUV 7DEOH 
H[DPSOH&KDSWHURIWKH6%& GRHVQRW FRQWDLQVWKHDSSURSULDWHSURWHFWLRQYDOXHV0XOWLSO\
UHTXLUHFRUULGRUVWREHSURYLGHGH[FHSWLQ*URXS WKDWYDOXHE\WKHFRQVWUXFWLRQW\SHIDFWRUIRXQGLQ

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

7DEOH(QWHUWKHYHUWLFDORSHQLQJYDOXH  9HUWLFDO RSHQLQJ IRUPXOD  7KH

DQGLWVVLJQSRVLWLYHRUQHJDWLYHLQ7DEOH IROORZLQJ IRUPXOD VKDOO EH XVHG LQ FRPSXWLQJ
XQGHU 6DIHW\ 3DUDPHWHU  9HUWLFDO YHUWLFDORSHQLQJYDOXH
2SHQLQJV IRU ILUH VDIHW\ PHDQV RI HJUHVV DQG 
JHQHUDO VDIHW\ ,I WKH VWUXFWXUH LV D RQHVWRU\ ܸܱ ൌ ܸܲ ൈ ‫ܨܥ‬ 
EXLOGLQJRULIDOOWKHXQHQFORVHGYHUWLFDORSHQLQJV 
ZLWKLQWKHEXLOGLQJFRQIRUPWRWKHUHTXLUHPHQWVRI ZKHUH
6HFWLRQ  RI 6%&  HQWHU D YDOXH RI  7KH VO 9HUWLFDORSHQLQJYDOXH
PD[LPXPSRVLWLYHYDOXHIRUWKLVUHTXLUHPHQWVKDOO PV 3URWHFWLRQYDOXHIURP7DEOH
EH CF  &RQVWUXFWLRQW\SH IDFWRU IURP 7DEOH

™ 9HUWLFDORSHQLQJVDUHXVHGWRHYDOXDWHWKHILUH
UHVLVWDQFHUDWLQJVRIRSHQLQJVEHWZHHQIORRUVRI ™ 6HH WKH FRPPHQWDU\ WR 6HFWLRQ  DQG
DEXLOGLQJDQGEHWZHHQVKDIWHQFORVXUHVVXFK HTXDWLRQ
DV VWDLUV HOHYDWRU KRLVW ZD\V DQG HVFDODWRU
RSHQLQJV 7KLV VHFWLRQ DOVR JLYHV WKH IRUPXOD  +9$& V\VWHPV  (YDOXDWH WKH
IRUGHWHUPLQLQJWKHVFRUHWREHHQWHUHGLQ7DEOH DELOLW\RIWKH+9$&V\VWHPWRUHVLVWWKHPRYHPHQW
 7KLV VHFWLRQ UHFRJQL]HV WKH LQKHUHQW RIVPRNHDQGILUHEH\RQGWKHSRLQWRIRULJLQ8QGHU
VDIHW\ RI RQHVWRU\ EXLOGLQJV DQG RI EXLOGLQJV WKHFDWHJRULHVLQ6HFWLRQGHWHUPLQHWKH
ZKHUH DOO YHUWLFDO RSHQLQJV DUH SURWHFWHG LQ DSSURSULDWH YDOXH DQG HQWHU WKDW YDOXH LQWR 7DEOH
DFFRUGDQFHZLWKRQHRIWKHPHWKRGVLQ6HFWLRQ  XQGHU 6DIHW\ 3DUDPHWHU  +9$&
 E\ DOORZLQJ WKH PD[LPXP YDOXH RI  IRU 6\VWHPV IRU ILUH VDIHW\ PHDQV RI HJUHVV DQG
WKHVHLQVWDQFHV JHQHUDOVDIHW\)DFLOLWLHVLQ*URXS,RFFXSDQFLHV
™ 7DEOH  DVVLJQV UHODWLYH SURWHFWLRQ PHHWLQJ&DWHJRULHVDERUFVKDOOEHFRQVLGHUHGWR
YDOXHV EDVHG RQ WKH ILUHUHVLVWDQFH UDWLQJV RI
IDLOWKHHYDOXDWLRQ
WKH YHUWLFDO RSHQLQJV LQ D EXLOGLQJ 7KH ORZHU
WKHILUHUHVLVWDQFHUDWLQJWKHJUHDWHUWKHKD]DUG ™ 7KLV VHFWLRQ HYDOXDWHV WKH +9$& V\VWHP¶V
WRWKHUHVWRIWKHEXLOGLQJ7KHWDEOHDOVRUHIOHFWV SRWHQWLDOIRUUHVLVWLQJWKHPRYHPHQWDQGVSUHDG
WKH YDU\LQJ OHYHOV RI LPSDFW WR DQ H[LVWLQJ RI ILUH DQG VPRNH 7KLV VHFWLRQ GRHV QRW
EXLOGLQJEDVHGRQWKHQXPEHURIVWRULHVWKDWDUH DGGUHVV +9$& V\VWHPV WKDW DUH XVHG
FRQQHFWHG E\ XQSURWHFWHG RSHQLQJV 7KH H[FOXVLYHO\ IRU VPRNH FRQWURO LQ WKH EXLOGLQJ
JUHDWHU WKH QXPEHU RI IORRUV WKDW DUH 7KHV\VWHPVHYDOXDWHGLQWKLVVHFWLRQDUHWKRVH
LQWHUFRQQHFWHG E\ XQSURWHFWHG RSHQLQJV WKH WKDWXVHHLWKHUVXSSO\DLUUHWXUQDLURUH[KDXVW
JUHDWHUWKHQXPEHURIQHJDWLYHSRLQWVDVVHVVHG DLU)RUH[DPSOHDW\SLFDOEXLOGLQJPLJKWKDYH
LQWKHH[LVWLQJEXLOGLQJ¶VHYDOXDWLRQVFRUHV7KH VXSSO\ DLU GXFWV RU VKDIWV UHWXUQ DLU GXFWV RU
FORVHU WKH EXLOGLQJ FRPHV WR PHHWLQJ QHZ VKDIWV WRLOHW H[KDXVW GXFWV RU VKDIWV DQG
FRQVWUXFWLRQ UHTXLUHPHQWV IRU VKDIW SURWHFWLRQ NLWFKHQH[KDXVWGXFWVRUVKDIWVDOORIZKLFKDUH
WKH JUHDWHU WKH QXPEHU RI SRVLWLYH SRLQWV WKDW FRQVLGHUHG+9$&V\VWHPV$OOV\VWHPVLQWKH
FDQ EH DFFUXHG 1RQFRPSO\LQJ XQHQFORVHG EXLOGLQJ DUH HYDOXDWHG DQG WKH ORZHVW VFRUH
YHUWLFDO RSHQLQJV FRQVLVWHQWO\ VKRZ XS DV REWDLQHGE\DQ\RIWKHV\VWHPVLVWKHVFRUHWKDW
FRQWULEXWLQJ IDFWRUV LQ XQVXFFHVVIXO ILUHV PXVWEHDVVLJQHGWRWKHHQWLUHEXLOGLQJ
&RQVHTXHQWO\ D VXEVWDQWLDO QXPEHU RI SRLQWV ™ 7KHVH SURYLVLRQV LQFOXGH WZR RWKHU VDIHW\
DUHDWULVNLQWKLVSDUDPHWHUZKLFKLVLQWHQGHG DVSHFWV WKDW DUH DOVR DSSOLFDEOH IRU QHZ
WR EH DQ LQFHQWLYH WR EULQJ QRQFRPSO\LQJ FRQVWUXFWLRQ SOHQXPV DQG DLU PRYHPHQW LQ
VLWXDWLRQV LQWR FRPSOLDQFH ZLWK QHZ HJUHVVHOHPHQWVVXFKDVH[LWDFFHVVFRUULGRUV
FRQVWUXFWLRQUHTXLUHPHQWV DQG H[LW VWDLUZD\V 7KHVH IDFWRUV FDQ
™ 5HODWLYH YDOXHV IRU HDFK W\SH RI FRQVWUXFWLRQ VLJQLILFDQWO\ DIIHFW WKH UHODWLYH VDIHW\ RI WKH
DUH DVVLJQHG LQ 7DEOH  7KHVH RFFXSDQWV RI WKH H[LVWLQJ EXLOGLQJ LQ D ILUH
UHSUHVHQWWKHUHODWLYHGHJUHHIRUILUHKD]DUGRI FRQGLWLRQ,QVRPHFDVHVWKHVHVDIHW\DVSHFWV
HDFK W\SH RI FRQVWUXFWLRQ ZKHQ FRPSDUHG WR FDQEHPRUHLPSRUWDQWWKDQMXVWWKHQXPEHURI
RWKHUW\SHVRIFRQVWUXFWLRQ6LPLODUIDFWRUVZHUH VWRULHVFRQQHFWHGE\DQ+9$&V\VWHP
FRQVLGHUHGLQWKHRULJLQDOGHYHORSPHQWRI6%&
WDEOHVIRUKHLJKWDQGDUHDOLPLWDWLRQV:KHQ 
RQH EXLOGLQJ KDV WZR GLIIHUHQW RSHQLQJ  &DWHJRULHV  7KH FDWHJRULHV IRU
FLUFXPVWDQFHV WKDW LQGLYLGXDOO\ UHVXOW LQ +9$&V\VWHPVDUH
GLIIHUHQWYDOXHVWKHORZHUYDOXHPXVWEHXVHG 
 &DWHJRU\D²3OHQXPVQRWLQDFFRUGDQFHZLWK
6HFWLRQRI6%&SRLQWV

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

 &DWHJRU\ E²$LU PRYHPHQW LQ HJUHVV ™ $*URXS5DSDUWPHQWEXLOGLQJLVVL[VWRULHVLQ

HOHPHQWV QRW LQ DFFRUGDQFH ZLWK 6HFWLRQ KHLJKW (DFK DSDUWPHQW KDV LWV RZQ +9$&
RI6%&SRLQWV HTXLSPHQW ORFDWHG LQ WKH GZHOOLQJ XQLW
 &DWHJRU\ F²%RWK &DWHJRULHV D DQG E DUH %DWKURRPVDUHYHQWLODWHGE\IDQVFRQQHFWHGWR
DFHQWUDOH[KDXVWVKDIWNLWFKHQH[KDXVWKRRGV
DSSOLFDEOHSRLQWV
FRQQHFW WR D FHQWUDO H[KDXVW VKDIW VHUYLQJ DOO
 &DWHJRU\ G²&RPSOLDQFH RI WKH +9$& IORRUV &RUULGRUV KDYH D GLUHFW RXWVLGHVXSSO\
V\VWHPZLWK6HFWLRQRIWKH 6%& DLUV\VWHPRQHDFKIORRUZLWKQRH[KDXVW7KH
DQG6HFWLRQRI6%&SRLQWV +9$& V\VWHPV DUH FODVVLILHG DV &DWHJRU\ E
 &DWHJRU\H²6\VWHPVVHUYLQJRQHVWRU\RUD EHFDXVH WKH FRUULGRUV DUH EHLQJ XVHG DV WKH
FHQWUDOERLOHUFKLOOHUV\VWHPZLWKRXWGXFWZRUN PDNHXSDLUVRXUFHIRUWKHEDWKURRPDQGNLWFKHQ
FRQQHFWLQJWZRRUPRUHVWRULHVSRLQWV H[KDXVWV$VFRUHRILVWKHUHIRUHHQWHUHGLQ
7DEOH IRUWKH6DIHW\3DUDPHWHUIRUWKH
™ 7KH ILYH FDWHJRULHV WKDW PXVW EH XVHG LQ WKH +9$&6\VWHPVRQOLQH
HYDOXDWLRQSURFHVVDUHGHILQHGLQWKLVVHFWLRQ 
DORQJ ZLWK WKHLU DSSOLFDEOH YDOXHV 7KH ™ ([DPSOH
DSSOLFDEOHYDOXHLVHQWHUHGLQ7DEOHIRU 
WKH6DIHW\3DUDPHWHURI+9$&6\VWHPVRQOLQH $ *URXS 6 ORZKD]DUG VWRUDJH RFFXSDQF\ LV
 7KHVH YDOXHV DUH QRW RFFXSDQF\ ORFDWHGLQDRQHVWRU\EXLOGLQJ7KHEXLOGLQJLVSUH
VHQVLWLYHVLQFHWKHVSUHDGRIILUHLVGHSHQGHQW HQJLQHHUHGVWHHO7\SH,,%FRQVWUXFWLRQDQGKDVD
RQ WKH +9$& V\VWHP SUHVHQW LQ WKH H[LVWLQJ VXVSHQGHG J\SVXP ERDUG FHLOLQJ *\SVXP ERDUG
EXLOGLQJQRWRQLWVRFFXSDQF\FODVVLILFDWLRQ KDV DOVR EHHQ DWWDFKHG WR WKH XQGHUVLGH RI WKH
™ &DWHJRU\DUHTXLUHVDYDOXHRIIRUH[LVWLQJ FHLOLQJMRLVWVWRVHUYHDVWKHXSSHUPHPEUDQHRID
EXLOGLQJV WKDW FRQWDLQ SOHQXPV QRW LQ UHWXUQDLUSOHQXP7KHSOHQXPDOVRFRQWDLQVSODVWLF
FRPSOLDQFH ZLWK WKH UHTXLUHPHQWV RI 6HFWLRQ ILUH VSULQNOHU SLSLQJ IRU WKH DXWRPDWLF ILUH
 RI WKH 6%&  /RFDWLRQV RI SOHQXPV LQ VXSSUHVVLRQV\VWHPWKDWLVLQVWDOOHGWKURXJKRXWWKH
WKH H[LVWLQJ EXLOGLQJV WKH PDWHULDOV WKH\ DUH EXLOGLQJ
EXLOW RI UHODWLYH WR WKH EXLOGLQJ¶V W\SH RI ™ 7KHSOHQXPLVFODVVLILHGDVQRQFRPEXVWLEOHLQ
FRQVWUXFWLRQ DQG WKH PDWHULDOV H[SRVHG WR DFFRUGDQFHZLWK6HFWLRQRIWKH6%&
SOHQXPDLUPXVWDOOEHHYDOXDWHG $VORQJDVWKHSODVWLFILUHVSULQNOHUSLSLQJPHHWV
™ &DWHJRU\ E FRUUHVSRQGV WR H[LVWLQJ EXLOGLQJV WKHRSWLFDOGHQVLW\DQGIODPHVSUHDGOLPLWVWKH
WKDWKDYHH[LWDFFHVVFRUULGRUVRUH[LWVWDLUZD\V SOHQXP LV LQ FRPSOLDQFH ZLWK WKH FRGH
WKDWDUHXVHGWRVXSSO\UHWXUQRUH[KDXVWDLURU UHTXLUHPHQWV IRU QHZ FRQVWUXFWLRQ 7KHUHIRUH
IRU RWKHU YHQWLODWLRQ SXUSRVHV 7KDW W\SH RI WKH+9$&V\VWHPZLOOEHFODVVLILHGDV&DWHJRU\
OD\RXWSXWVWKHH[LVWLQJEXLOGLQJ¶VRFFXSDQWVDW G$YDOXHRI]HURLVWKHUHIRUHHQWHUHGLQ7DEOH
JUHDWHUULVNDQGPXVWWKHUHIRUH EH SHQDOL]HG  IRUWKH 6DIHW\ 3DUDPHWHURI WKH+9$&
ZLWKDYDOXHRI 6\VWHPVRQOLQH
™ &DWHJRU\ F LV DSSOLFDEOH ZKHQ DQ H[LVWLQJ
EXLOGLQJ KDV ERWK QRQFRPSO\LQJ SOHQXPV DQG  $XWRPDWLF ILUH GHWHFWLRQ
FRUULGRUVRUVWDLUZD\VXVHGIRUDLUPRYHPHQW$ (YDOXDWH WKH VPRNH GHWHFWLRQ FDSDELOLW\ EDVHG RQ
YDOXH RI  PXVW EH DVVLJQHG WR VXFK D WKH ORFDWLRQ DQG RSHUDWLRQ RI DXWRPDWLF ILUH
EXLOGLQJEHFDXVHWKHPRYHPHQWRIVPRNHDQG GHWHFWRUV LQ DFFRUGDQFH ZLWK 6HFWLRQ  RI 6%&
ILUH WKURXJKRXW ZRXOG SRVH DQ HYHQ JUHDWHU  DQG 6%&  8QGHU WKH FDWHJRULHV DQG
KD]DUGWRWKHRFFXSDQWV
RFFXSDQFLHV LQ 7DEOH  GHWHUPLQH WKH
™ &DWHJRU\GUHSUHVHQWVWKHEDVHYDOXHRI]HUR
$QHZO\FRQVWUXFWHGEXLOGLQJLVUHTXLUHGWRPHHW DSSURSULDWH YDOXH DQG HQWHU WKDW YDOXH LQWR 7DEOH
DOO WKH SURYLVLRQV RI 6%&  6HFWLRQ   XQGHU 6DIHW\ 3DUDPHWHU 
DQG6%&6HFWLRQ$QH[LVWLQJEXLOGLQJ $XWRPDWLF)LUH'HWHFWLRQIRUILUHVDIHW\PHDQVRI
WKDWFRPSOLHVZLWKWKHVHSURYLVLRQVLVPHHWLQJ HJUHVV DQG JHQHUDO VDIHW\ )DFLOLWLHV LQ *URXS ,
WKLV VDPH PLQLPXP FRPSOLDQFH OHYHO DQG RFFXSDQFLHV PHHWLQJ &DWHJRU\ D E RU F VKDOO EH
WKHUHIRUHLVQHLWKHUSHQDOL]HGQRUJLYHQEHQHILW FRQVLGHUHGWRIDLOWKHHYDOXDWLRQ
IRUWKDWFRPSOLDQFH
™ &DWHJRU\ H VSHFLILHV D YDOXH RI  SRLQWV IRU ™ 7KLV VHFWLRQ FRQVLGHUV WKH XVH RI VPRNH
+9$& V\VWHPV WKDW VHUYH RQO\ RQH VWRU\ RI D GHWHFWRUVLQDEXLOGLQJ7RUHFHLYHFUHGLWIRUWKH
EXLOGLQJ 7KH KD]DUGV RI D ILUH VSUHDGLQJ VPRNH GHWHFWRUV WKH\ PXVW EH FRQQHFWHG WR
ODWHUDOO\ WKURXJK D VWRU\ RI D EXLOGLQJ YLD WKH DXGLEOHDODUPVDQGLQVWDOOHGLQDFFRUGDQFHZLWK
+9$&V\VWHPDUHPLQLPDOWKHUHIRUHWKHFRGH 6%&  6HFWLRQ  DQG 6%&  6HFWLRQ
DVVLJQVDSRVLWLYHYDOXH$ERLOHUFKLOOHUV\VWHP 
DOVRGRHVQRWOHQGLWVHOIWRILUHVSUHDGDVORQJ ™ 7DEOH  DVVLJQV YDOXHV IRU HDFK
DVWKHUHLVQRDLUPRYHPHQWLQGXFWV RFFXSDQF\7KHXVHRIGHWHFWRUVLQFUHDVHVWKH
™ ([DPSOH VDIHW\LQDEXLOGLQJE\SURYLGLQJHDUO\ZDUQLQJ

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

RI D ILUH FRQGLWLRQ WR RFFXSDQWV 7KH ODFN RI ™ &DWHJRU\ E DFNQRZOHGJHV WKDW WKH 6%& 
GHWHFWRUV DQG WKH DVVRFLDWHG HDUO\ ZDUQLQJ LV FXUUHQWO\ UHTXLUHV +9$& V\VWHP GHWHFWRUV LQ
FRQVLGHUHG OHVV WKDQ RSWLPXP IRU VDIHW\ LQ PRUHORFDWLRQVWKDQPD\KDYHEHHQUHTXLUHGLQ
RFFXSDQFLHVZLWKKLJKSRSXODWLRQGHQVLWLHVDQG OHVVFRQWHPSRUDU\PRGHOFRGHV7KLVFDWHJRU\
KLJKFRPEXVWLEOHORDGV/DUJHGHILFLHQF\SRLQWV WKHUHIRUHDVVXPHVWKDWWKHUHDUHVRPHVPRNH
DUHDFFUXHGLIDGHTXDWHGHWHFWLRQV\VWHPVDUH GHWHFWRUV LQ DQ H[LVWLQJ EXLOGLQJ¶V +9$&
QRWSURYLGHG V\VWHP EXW QRW WR WKH H[WHQW UHTXLUHG E\ WKH
™ ([DPSOH 6%&  IRU QHZ FRQVWUXFWLRQ ,I WKH OLPLWHG
™ $IRXUVWRU\*URXS5KRWHOKDVFRUULGRUVDQG +9$& V\VWHP GHWHFWRUV DUH PDLQWDLQHG LQ
DQ HOHYDWRU OREE\ RQ HDFK VWRU\ 6PRNH DFFRUGDQFH ZLWK WKH 6%&  WKH GHWHFWLRQ
GHWHFWRUVDUHLQVWDOOHGWKURXJKRXWWKHFRUULGRUV V\VWHPTXDOLILHVDV&DWHJRU\E
FORVHWV URRPV DQG HOHYDWRU OREELHV 6LQJOH ™ &DWHJRU\ F DGGUHVVHV H[LVWLQJ EXLOGLQJV WKDW
VWDWLRQ GHWHFWRUV DUH LQVWDOOHG LQ WKH KDYH XSJUDGHG +9$& V\VWHPV ZLWK GXFW
JXHVWURRPV7KHUHDUHVPRNHGHWHFWRUVLQWKH GHWHFWRUVLQVWDOOHGLQDFFRUGDQFHZLWKWKH6%&
+9$&UHWXUQDLUV\VWHPDQGDILUHDODUPV\VWHP  7KH GHWHFWLRQ YDOXHV IRU &DWHJRU\ F DUH
LV SURYLGHG $Q DQDO\VLV RI WKHVH EXLOGLQJ ]HUR VLQFH WKLV LV WKH OHYHO RI SURWHFWLRQ
FKDUDFWHULVWLFV UHVXOWV LQ WKH VHOHFWLRQ RI UHTXLUHGIRUQHZFRQVWUXFWLRQ
&DWHJRU\ G 7R EH FODVVLILHG LQ &DWHJRU\ H ™ &DWHJRU\ G LV WKH FODVVLILFDWLRQ IRU H[LVWLQJ
JXHVWURRPVPXVWKDYHGHWHFWRUVFRQQHFWHGWR EXLOGLQJV WKDW KDYH IXOO GHWHFWLRQ FRYHUDJH
WKHEXLOGLQJ¶VHPHUJHQF\HOHFWULFDOV\VWHPDQG WKURXJKRXWWKHSXEOLFDQGFRPPRQXVHVSDFHV
DQQXQFLDWHG E\ HDFK URRP DW D FRQVWDQWO\ ™ &DWHJRU\ H KDV VPRNH GHWHFWRUV WKURXJKRXW
DWWHQGHG ORFDWLRQ VXFK DV WKH IURQW GHVN IORRUDUHDVLQFRPSOLDQFHZLWKWKHSURYLVLRQVIRU
$GGLWLRQDOO\ WKH ILUH DODUP V\VWHP PXVW EH QHZFRQVWUXFWLRQ
FDSDEOHRIEHLQJPDQXDOO\DFWLYDWHGE\WKHIURQW
GHVNZKHQDVPRNHGHWHFWRURSHUDWHV  )LUHDODUPV\VWHPV(YDOXDWHWKH
™ &DWHJRU\ G YDOXH IURP 7DEOH    FDSDELOLW\ RI WKH ILUH DODUP V\VWHP LQ DFFRUGDQFH
(QWHU  LQ 7DEOH  IRU WKH 6DIHW\ ZLWK6HFWLRQRI6%&8QGHUWKHFDWHJRULHV
3DUDPHWHU  RI $XWRPDWLF )LUH DQG RFFXSDQFLHV LQ 7DEOH GHWHUPLQH WKH
'HWHFWLRQRQOLQH DSSURSULDWH YDOXH DQG HQWHU WKDW YDOXH LQWR 7DEOH
 XQGHU 6DIHW\ 3DUDPHWHU  )LUH
$ODUP6\VWHPIRUILUHVDIHW\PHDQVRIHJUHVVDQG
 &DWHJRULHV  7KH FDWHJRULHV IRU
JHQHUDOVDIHW\
DXWRPDWLFILUHGHWHFWLRQDUH
™ 7KLV VHFWLRQ HYDOXDWHV WKH FDSDELOLWLHV RI
 &DWHJRU\D²1RQH EXLOGLQJ ILUH DODUP V\VWHPV WKDW DUH VHSDUDWH
 &DWHJRU\ E²H[LVWLQJ VPRNH GHWHFWRUV LQ IURP WKH DXWRPDWLF ILUH GHWHFWLRQ V\VWHP
+9$&V\VWHPVDQGPDLQWDLQHGLQDFFRUGDQFH HYDOXDWHG LQ 6HFWLRQ  $ ILUH DODUP
V\VWHP WKDW LV PDQXDOO\ RSHUDWHG RU DFWLYDWHG
ZLWK6%&
E\ VPRNH GHWHFWRUV RU VSULQNOHU ZDWHUIORZ
 &DWHJRU\ F²6PRNH GHWHFWRUV LQ +9$& GHYLFHVDOHUWVWKHRFFXSDQWVWRDILUHFRQGLWLRQ
V\VWHPV 7KH GHWHFWRUV DUH LQVWDOOHG LQ 7KHILUHDODUPV\VWHPZLOOQRWLI\WKHRFFXSDQWV
DFFRUGDQFH ZLWK WKH UHTXLUHPHQWV IRU QHZ ZLWKYLVLEOHRUDXGLEOHDODUPVVRWKH\PD\EHJLQ
EXLOGLQJVLQ6%& WRWDNHDSSURSULDWHDFWLRQ7KHVHV\VWHPVDUH
 &DWHJRU\G²6PRNHGHWHFWRUVWKURXJKRXWDOO RISDUWLFXODULPSRUWDQFHLQDVVHPEO\EXVLQHVV
IORRU DUHDV RWKHU WKDQ LQGLYLGXDO VOHHSLQJ HGXFDWLRQDO RU UHVLGHQWLDO RFFXSDQFLHV ZKLFK
XQLWVWHQDQWVSDFHVDQGGZHOOLQJXQLWV FDQKDYHODUJHQXPEHUVRIRFFXSDQWVLQURRPV
 &DWHJRU\ H²6PRNH GHWHFWRUV LQVWDOOHG ZLWK FRQFHQWUDWHG VHDWLQJ RU SHRSOH ZKR DUH
WKURXJKRXWWKHIORRUDUHD VOHHSLQJ
™ 7DEOH  JLYHV YDOXHV IRU HDFK
 &DWHJRU\ I²6PRNH GHWHFWRUV LQ FRUULGRUV
RFFXSDQF\ DQG W\SH RI ILUH DODUP V\VWHP
RQO\ SURYLGHG,WUHIOHFWVWKHLGHDWKDWWKHSUHVHQFH
™ 7KHFDWHJRULHVDUHEDVHG RQWKH ORFDWLRQDQG RIDQDODUPV\VWHPLQDEXLOGLQJXVXDOO\FUHDWHV
FRPSOHWHQHVVRIWKHVPRNHGHWHFWLRQV\VWHP D VDIHU FRQGLWLRQ IRU WKH RFFXSDQWV ZKHQ
™ 7KH FDWHJRULHV UHSUHVHQW D JUDGXDWLRQ LQ WKH FRPSDUHG WR D EXLOGLQJ ZLWKRXW D ILUH DODUP
OHYHOVRIVPRNHGHWHFWLRQWKDWUDQJHVIURPQR V\VWHP
GHWHFWRUV LQ &DWHJRU\ D WR IXOO GHWHFWLRQ ™ 'HILFLHQF\SRLQWVDUHDVVLJQHGWRRFFXSDQFLHV
WKURXJKRXWDOOILUHDUHDVSDFHVLQ&DWHJRU\H ZLWKRXWDILUHDODUPV\VWHPEXWWKDWKDYHDKLJK
™ &DWHJRU\ D LV D IDFLOLW\ WKDW KDV QR DXWRPDWLF RFFXSDQW ORDG RU QXPEHU RI VOHHSLQJ
VPRNHGHWHFWLRQV\VWHP RFFXSDQWVVXFKDV*URXSV$$$$

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

%(DQG5ZKLFKDUHLQFOXGHGLQ&DWHJRULHVD DXGLEOH DODUPV ZKHQ FRPSDUHG WR WKH QRUPDO

DQGE VRXQGOHYHOVLQWKHH[LVWLQJEXLOGLQJ
™ ([DPSOH ™ &DWHJRU\FUHTXLUHVWKDWWKHILUHDODUPV\VWHP
™ $ RQHVWRU\ EXLOGLQJ ZLWK DQ DVVHPEO\ FRPSO\ ZLWK 6%&  6HFWLRQ  DQG 1)3$
RFFXSDQF\ KDV D FRPSOHWH PDQXDO ILUH DODUP 7KLVFDWHJRU\LQGLFDWHVWKDWDFRPSOHWHILUH
V\VWHPDYRLFHDODUPV\VWHPDSXEOLFDGGUHVV DODUPV\VWHPLVSUHVHQWLQWKHH[LVWLQJEXLOGLQJ
V\VWHP DQG D ILUH FRPPDQG VWDWLRQ WKDW GRHV DQG WKDW WKH V\VWHP FRPSOLHV ZLWK DOO WKH
QRWFRQWDLQVWDWXVLQGLFDWRUVDQGFRQWUROVIRUWKH UHTXLUHPHQWVIRUQHZFRQVWUXFWLRQ
DLUKDQGOLQJV\VWHP7KHILUHFRPPDQGVWDWLRQ ™ &DWHJRU\ G LV DSSOLFDEOH IRU D EXLOGLQJ WKDW LV
GRHV QRW KDYH HPHUJHQF\ SRZHU RU OLJKWLQJ SURYLGHG ZLWK D ILUH FRPPDQG FHQWHU IRU ILUH
V\VWHP FRQWUROV ,W DOVR GRHV QRW KDYH D ILUH GHSDUWPHQWRSHUDWLRQVWKDWFRPSOLHVZLWK6%&
GHSDUWPHQWFRPPXQLFDWLRQSDQHO$VDUHVXOW 6HFWLRQ7KLVLVDW\SHRIILUHFRPPDQG
WKHEXLOGLQJLVFODVVLILHGLQ&DWHJRU\F VWDWLRQWKDWLVRQO\UHTXLUHGLQQHZFRQVWUXFWLRQ
™ &DWHJRU\ F YDOXH IURP 7DEOH    IRU KLJKULVH EXLOGLQJV VHH 6%&  6HFWLRQ
(QWHU  LQ 7DEOH  IRU WKH 6DIHW\  6%&  6HFWLRQ  PD\ EH XVHG
3DUDPHWHU RI )LUH $ODUP 6\VWHP RQ OLQH ZKHQHYDOXDWLQJDQ\EXLOGLQJWKDWFRPSOLHVZLWK
 LWV SHUIRUPDQFH UHTXLUHPHQWV 7KLV VHFWLRQ
VSHFLILHVWKHILUHFRPPDQGRSHUDWLRQVUHTXLUHG
LQFOXGLQJWKHIROORZLQJ
 &DWHJRULHV7KHFDWHJRULHVIRUILUH
DODUPV\VWHPVDUH x 9RLFHDODUPFRPPXQLFDWLRQV\VWHPSDQHOV
x )LUHGHSDUWPHQWFRPPXQLFDWLRQSDQHOV
 &DWHJRU\D²1RQH x )LUHGHWHFWLRQDQGDODUPV\VWHPDQQXQFLDWRU
 &DWHJRU\E²)LUHDODUPV\VWHPZLWKPDQXDO SDQHOV
ILUHDODUPER[HV LQ DFFRUGDQFHZLWK 6HFWLRQ
x $Q DQQXQFLDWRU IRU YLVXDOO\ LQGLFDWLQJ IORRU
 RI 6%&  DQG DODUP QRWLILFDWLRQ
ORFDWLRQV RI HOHYDWRUV DQG ZKHWKHU WKH\ DUH
DSSOLDQFHVLQDFFRUGDQFHZLWK6HFWLRQ RSHUDWLRQDO
RI6%&
 &DWHJRU\F²)LUHDODUPV\VWHPLQDFFRUGDQFH x 6WDWXV LQGLFDWRUV DQG FRQWUROV IRU DLU
KDQGOLQJV\VWHPV
ZLWK6HFWLRQRI6%&
 &DWHJRU\ G²&DWHJRU\ F SOXV D UHTXLUHG x &RQWUROV IRU XQORFNLQJ DOO VWDLUZD\ GRRUV
HPHUJHQF\ YRLFHDODUP FRPPXQLFDWLRQV VLPXOWDQHRXVO\
V\VWHP DQG D ILUH FRPPDQG VWDWLRQ WKDW x 6SULQNOHU YDOYH DQG ZDWHUIORZ GHWHFWRU
FRQIRUPV WR 6HFWLRQ  RI 6%&  DQG GLVSOD\SDQHOV
FRQWDLQV WKH HPHUJHQF\ YRLFHDODUP x (PHUJHQF\ DQG VWDQGE\ SRZHU VWDWXV
FRPPXQLFDWLRQV V\VWHP FRQWUROV ILUH LQGLFDWRUV
GHSDUWPHQW FRPPXQLFDWLRQ V\VWHP FRQWUROV x (OHYDWRUILUHUHFDOOVZLWFKLQDFFRUGDQFHZLWK
DQG DQ\ RWKHU FRQWUROV VSHFLILHG LQ 6HFWLRQ $60($
 RI 6%&  ZKHUH WKRVH V\VWHPV DUH
SURYLGHG  6PRNH FRQWURO  (YDOXDWH WKH
DELOLW\RIDQDWXUDORUPHFKDQLFDOYHQWLQJH[KDXVW
™ 7KHVHFDWHJRULHVDUHGHILQHGE\WKHILUHDODUP RUSUHVVXUL]DWLRQV\VWHPWRFRQWUROWKHPRYHPHQWRI
V\VWHPSURYLGHGLQWKHH[LVWLQJEXLOGLQJ
VPRNH IURP D ILUH 8QGHU WKH FDWHJRULHV DQG
™ &DWHJRU\ D PHDQV WKDW WKHUH LV QR ILUH DODUP
V\VWHPLQWKHEXLOGLQJRULWGRHVQRWFRQIRUPWR RFFXSDQFLHV LQ 7DEOH  GHWHUPLQH WKH
DOO WKH UHTXLUHPHQWV RI 6%&  6HFWLRQ  DSSURSULDWH YDOXH DQG HQWHU WKDW YDOXH LQWR 7DEOH
7KLV LQFOXGHV D V\VWHP WKDW GRHV QRW KDYH D  XQGHU 6DIHW\ 3DUDPHWHU  6PRNH
VHFRQGDU\ SRZHU VXSSO\ LQ DFFRUGDQFH ZLWK &RQWUROIRUPHDQVRIHJUHVVDQGJHQHUDOVDIHW\
6%&6HFWLRQRURQHZKHUHWKH]RQHV ™ 7KLVVHFWLRQLVXVHGWRHYDOXDWHFKDUDFWHULVWLFV
RIDIORRUH[FHHGPDVQRWHGLQ6%&
WKDWFRXOGOLPLWVPRNHPLJUDWLRQLQWKHEXLOGLQJ
6HFWLRQ
LQFOXGLQJ RSHUDEOH ZLQGRZV PHFKDQLFDO
™ &DWHJRU\EDSSOLHVZKHQWKHPDQXDOILUHDODUP H[KDXVW V\VWHPV SUHVVXUL]HG VWDLUZD\V RU
ER[HV FRPSO\ ZLWK 6%&  6HFWLRQ  VPRNHSURRIHQFORVXUHV
DQG 1)3$  7KH DODUPQRWLILFDWLRQ ™ 7DEOH  DVVLJQV YDOXHV IRU HDFK
DSSOLDQFHVVSHFLILFDOO\WKHDXGLEOHDODUPVDUH RFFXSDQF\DQGFDWHJRU\RIVPRNHFRQWUROLQWKH
LQDFFRUGDQFHZLWK6%&6HFWLRQ
EXLOGLQJ 7KH WDEOH UHSUHVHQWV WKH UHODWLYH
/RFDWLRQ KHLJKW DQG FRORU RI WKH PDQXDO ILUH
EHQHILWV WR WKH EXLOGLQJ RFFXSDQWV RI YDULRXV
DODUPER[HVPXVWEHVSHFLILFDOO\HYDOXDWHGIRU OHYHOVRIVPRNHFRQWUROPHWKRGVSURYLGHGLQWKH
FRPSOLDQFHDORQJZLWKWKHVRXQGOHYHOVRIWKH EXLOGLQJ

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

™ 7KHUH DUH QR QHJDWLYH SRLQWV DFFUXHG XQGHU HQWHUHG LQ 7DEOH  7KLV LV GHWHUPLQHG
DQ\FLUFXPVWDQFHVEXW]HURSRVLWLYHSRLQWVDUH IURP1RWHDLQ7DEOH
LQGLFDWHG LI QR VPRNH FRQWURO RU RQO\ OLPLWHG
VPRNH FRQWURO LV SURYLGHG 7KH WDEOH DOVR 
LQGLFDWHVWKHYDOXHRIVPRNHFRQWUROLQWKHH[LW  &DWHJRULHV  7KH FDWHJRULHV IRU
VWDLUV RI D EXLOGLQJ DQG RI DXWRPDWLF VSULQNOHU VPRNHFRQWURODUH
V\VWHPV DV D PHDQV RI OLPLWLQJ WKH YROXPH RI 
VPRNH SURGXFWLRQ IURP D ILUH 1RWH D RI WKH  &DWHJRU\D²1RQH
WDEOH DVVLJQV ]HUR FUHGLW SRLQWV IRU *URXSV %  &DWHJRU\ E²7KH EXLOGLQJ LV HTXLSSHG
05)DQG6XQOHVVWKHEXLOGLQJFRPSOLHVZLWK WKURXJKRXW ZLWK DQ DXWRPDWLF VSULQNOHU
&DWHJRU\ G RU H LQ 6HFWLRQ  ZKLFK V\VWHP 2SHQLQJV DUH SURYLGHG LQ H[WHULRU
DUH WKH DXWRPDWLF ILUH GHWHFWLRQ V\VWHP ZDOOVDWWKHUDWHRI PSHU OLQHDU
UHTXLUHPHQWV
PHWHU RI H[WHULRU ZDOO LQ HDFK VWRU\ DQG
™ ([DPSOH
™ $*URXS$ SUD\HUURRPLVORFDWHGLQD RQH GLVWULEXWHG DURXQG WKH EXLOGLQJ SHULPHWHU DW
VWRU\EXLOGLQJ,WKDVQRRSHUDEOHZLQGRZVDQG LQWHUYDOV QRW H[FHHGLQJ  P 6XFK
QRVPRNHFRQWUROV\VWHP RSHQLQJV VKDOO EH UHDGLO\ RSHQDEOH IURP WKH
™ &DWHJRU\ D LV DSSOLFDEOH DQG WKH YDOXH IURP LQVLGHZLWKRXWDNH\RUVHSDUDWHWRRODQGVKDOO
7DEOH  EHSURYLGHGZLWKUHDG\DFFHVVWKHUHWR,QOLHX
™ (QWHU  LQ 7DEOH  IRU WKH 6DIHW\ RIRSHUDEOHRSHQLQJVFOHDUO\DQGSHUPDQHQWO\
3DUDPHWHURI6PRNH&RQWURORQOLQH PDUNHGWHPSHUHGJODVVSDQHOVVKDOOEHXVHG
IRU RQO\ PHDQV RI HJUHVV 0( DQG JHQHUDO  &DWHJRU\F²2QHHQFORVHGH[LWVWDLUZD\ZLWK
VDIHW\ *6 SDUDPHWHUV 1R HQWU\ LV PDGH UHDG\DFFHVVWKHUHWRIURPHDFKRFFXSLHGIORRU
XQGHUWKHILUHVDIHW\)6SDUDPHWHU
RI WKH EXLOGLQJ 7KH VWDLUZD\ KDV RSHUDEOH
™ ([DPSOH
™ $WKUHHVWRU\*URXS(KLJKVFKRROKDVRSHUDEOH H[WHULRU ZLQGRZV DQG WKH EXLOGLQJ KDV
ZLQGRZVWKURXJKRXWWKHEXLOGLQJ7KHVWDLUZD\V RSHQLQJVLQDFFRUGDQFHZLWK&DWHJRU\E
DUHLQWHULRUZLWKRXWZLQGRZVRUDSUHVVXUL]DWLRQ  &DWHJRU\G²2QHVPRNHSURRIHQFORVXUHDQG
V\VWHP WKHEXLOGLQJKDVRSHQLQJVLQDFFRUGDQFHZLWK
™ &DWHJRU\ E LV DSSOLFDEOH DQG WKH YDOXH IURP &DWHJRU\E
7DEOH   &DWHJRU\ H²7KH EXLOGLQJ LV HTXLSSHG
™ (QWHU  LQ 7DEOH  XQGHU 6DIHW\ WKURXJKRXW ZLWK DQ DXWRPDWLF VSULQNOHU
3DUDPHWHU  6PRNH &RQWURO IRU V\VWHP (DFK IORRU DUHD LV SURYLGHG ZLWK D
PHDQVRIHJUHVV0(DQGJHQHUDOVDIHW\*6 PHFKDQLFDO DLUKDQGOLQJ V\VWHP GHVLJQHG WR
SDUDPHWHUV
DFFRPSOLVK VPRNH FRQWDLQPHQW 5HWXUQ DQG
™ ([DPSOH
™ $WZRVWRU\*URXS$QLJKWFOXELVVSULQNOHUHG H[KDXVW DLU VKDOO EH PRYHG GLUHFWO\ WR WKH
WKURXJKRXW DQG KDV D VPRNH FRQWURO V\VWHP RXWVLGH ZLWKRXW UHFLUFXODWLRQ WR RWKHU IORRU
WKDWPHHWVWKHUHTXLUHPHQWVIRU&DWHJRU\H DUHDV RI WKH EXLOGLQJ XQGHU ILUH FRQGLWLRQV
™ &DWHJRU\ H LV DSSOLFDEOH DQG WKH YDOXH IURP 7KHV\VWHPVKDOOH[KDXVWQRWOHVVWKDQVL[DLU
7DEOH  FKDQJHVSHUKRXUIURPWKHIORRUDUHD6XSSO\
™ (QWHU  LQ 7DEOH  XQGHU 6DIHW\ DLUE\PHFKDQLFDOPHDQVWRWKHIORRUDUHDLV
3DUDPHWHU  6PRNH &RQWURO IRU QRWUHTXLUHG&RQWDLQPHQWRIVPRNHVKDOOEH
PHDQVRIHJUHVV0(DQGJHQHUDOVDIHW\*6 FRQVLGHUHG DV FRQILQLQJ VPRNH WR WKH IORRU
SDUDPHWHUV DUHDLQYROYHGZLWKRXWPLJUDWLRQWRRWKHUIORRU
™ ([DPSOH
DUHDV$Q\RWKHUWHVWHGDQGDSSURYHGGHVLJQ
™ $ VL[VWRU\ *URXS % RIILFH EXLOGLQJ KDV WKUHH
VWDLUZD\V RQH LV D VPRNHSURRI HQFORVXUH WKDW ZLOO DGHTXDWHO\ DFFRPSOLVK VPRNH
FRQIRUPLQJ WR 6HFWLRQ  RQH LV FRQWDLQPHQWLVSHUPLWWHG
SUHVVXUL]HG LQ DFFRUGDQFH ZLWK 6HFWLRQ  &DWHJRU\I²(DFKVWDLUZD\VKDOOEHRQHRIWKH
 DQG RQH KDV RSHUDEOH H[WHULRU IROORZLQJ D VPRNHSURRI HQFORVXUH LQ
ZLQGRZV 7KH EXLOGLQJ KDV VPRNH GHWHFWRUV DFFRUGDQFHZLWK6HFWLRQRI6%&
WKURXJKRXWDOOIORRUVSDFHVDQGILUHDUHDV SUHVVXUL]HG LQ DFFRUGDQFH ZLWK VHFWLRQ
™ &DWHJRU\ I LV DSSOLFDEOH DQG WKH YDOXH IURP RI6%&RUVKDOOKDYHRSHUDEOH
7DEOH  H[WHULRUZLQGRZV
™ (QWHU  LQ 7DEOH  XQGHU 6DIHW\
3DUDPHWHU  6PRNH &RQWURO IRU ™ 7KH VL[ FDWHJRULHV WR EH HYDOXDWHG DUH
PHDQVRIHJUHVV0(DQGJHQHUDOVDIHW\*6 FRPSDUHGWRWKHRFFXSDQFLHVWRGHWHUPLQHWKH
™ ,IGHWHFWRUVDUHRPLWWHGIURPVRPHRIWKHRIILFHV VFRUH WR EH HQWHUHG LQ 7DEOH  IRU WKH
RI WKH EXLOGLQJV WKHQ D VFRUH RI  PXVW EH

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

6DIHW\ 3DUDPHWHU RI 6PRNH &RQWURO RQ OLQH DFFRUGDQFHZLWK6%&6HFWLRQLVDOVR

 FRQVLGHUHGDFFHSWDEOH
™ &DWHJRU\ D PHDQV WKHUH LV QR PHWKRG RI ™ &DWHJRU\ I UHFRJQL]HV WKH PHULWV RI VPRNH
FRQWUROOLQJVPRNHLQWKHEXLOGLQJ SURRI HQFORVXUHV SUHVVXUL]HG VWDLUZD\V DQG
™ &DWHJRU\ E PHDQV WKH H[LVWLQJ EXLOGLQJ LV VWDLUZD\V ZLWK RSHUDEOH H[WHULRU ZLQGRZV 7R
VSULQNOHUHGDQGWKHUHDUHH[WHULRUZLQGRZVWKDW EHFODVVLILHGLQWKLVFDWHJRU\DOOVWDLUZD\VLQWKH
FDQEHUHDGLO\RSHQHGZLWKRXWWKHXVHRINH\V EXLOGLQJPXVWFRPSO\ZLWKWKHUHTXLUHPHQWVRI
RUWRROV7KLVFDWHJRU\UHFRJQL]HVWKHEHQHILWRI DQ\RQHRUDFRPELQDWLRQRIWKHWKUHHW\SHVRI
PDQXDOYHQWLQJFDSDELOLW\WDNHQIURPWKHKLJK VWDLUZD\V,WLVSRVVLEOHIRUDVLQJOHEXLOGLQJWR
ULVH SURYLVLRQV RI WKH 6%&  IRU QHZ KDYH D VPRNHSURRI HQFORVXUH D SUHVVXUL]HG
FRQVWUXFWLRQZKLFKLQFOXGHDXWRPDWLFVSULQNOHU VWDLUZD\DQGDVWDLUZD\ZLWKRSHUDEOHH[WHULRU
SURWHFWLRQ2SHUDEOHSDQHOVRUZLQGRZVLQWKH ZLQGRZV
H[WHULRU ZDOOV PXVW EH SURYLGHG DW WKH UDWH RI ™ %RWKWKHFDWHJRULHVDQGWKHRFFXSDQF\RIWKH
 P SHU  P RI H[WHULRU ZDOO LQ HDFK EXLOGLQJDUHXVHGLQGHWHUPLQLQJWKHVFRUHWKDW
VWRU\7KHRSHQLQJVPXVWEHGLVWULEXWHGDURXQG ZLOO EH HQWHUHG LQ 7DEOH  7KLV VFRUH LV
WKH SHULPHWHU RI WKH EXLOGLQJ DW LQWHUYDOV QRW GHWHUPLQHG IURP 7DEOH  1RWH D LQ
PRUHWKDQPEHWZHHQZLQGRZV$VWRU\ 7DEOHFDQKDYHDVLJQLILFDQWLPSDFW
ZLWK YHU\ KLJK FHLOLQJV PD\ KDYH D VWULS RI RQWKHVFRUHV7KHQRWHVWDWHVWKDWHYHQLIWKH
ZLQGRZV ORFDWHG ZHOO DERYH WKH IORRU ZLWK EXLOGLQJKDVVRPHOHYHORIVPRNHFRQWUROLWLV
ODWFKHVRUFRQWUROVWKDWDUHQRWHDVLO\UHDFKDEOH WR UHFHLYH QR FUHGLW LI LW GRHV QRW KDYH DQ
6XFK RSHQLQJV ZRXOG QRW PHHW &DWHJRU\ E DXWRPDWLFILUHGHWHFWLRQV\VWHPFRPSO\LQJZLWK
VWDQGDUGV HYHQ LI WKH\ DUH SURYLGHG DQG &DWHJRU\GRUHLQ6HFWLRQ
GLVWULEXWHGDWWKHUHTXLUHGUDWH
™ &DWHJRU\FUHTXLUHVDWOHDVWRQHHQFORVHGH[LW  0HDQV RI HJUHVV FDSDFLW\ DQG
VWDLUZD\WRKDYHRSHUDEOHZLQGRZVWKDWRSHQWR QXPEHU  (YDOXDWH WKH PHDQV RI HJUHVV FDSDFLW\
WKH H[WHULRU $GGLWLRQDOO\ WKH EXLOGLQJ PXVW DQG WKH QXPEHU RI H[LWV DYDLODEOH WR WKH EXLOGLQJ
KDYHRSHUDEOHZLQGRZVFRPSO\LQJZLWKWKHVL]H RFFXSDQWV ,Q DSSO\LQJ WKLV VHFWLRQ WKH PHDQV RI
DQGVSDFLQJUHTXLUHPHQWVRI&DWHJRU\E HJUHVV DUH UHTXLUHG WR FRQIRUP WR WKH IROORZLQJ
™ &DWHJRU\GUHTXLUHVDPLQLPXPRIRQHVPRNH 6HFWLRQVRI6%&
SURRI HQFORVXUH DQG RSHUDEOH ZLQGRZV LQ WKH      
EXLOGLQJ7KHVHRSHUDEOHZLQGRZVDUHWKHVDPH   DQG  7KH QXPEHU RI H[LWV
DVWKRVHDGGUHVVHGLQ&DWHJRU\E%\GHILQLWLRQ FUHGLWHG LV WKH QXPEHU WKDW LV DYDLODEOH WR HDFK
DVPRNHSURRIHQFORVXUHUHIHUVWRDQHQFORVHG
RFFXSDQWRIWKHDUHDEHLQJHYDOXDWHG([LVWLQJILUH
LQWHULRUH[LWVWDLUZD\WKDWFRQIRUPVWR6%&
6HFWLRQ  DV GHVLJQDWHG LQ 6%&  HVFDSHV VKDOO EH DFFHSWHG DV D FRPSRQHQW LQ WKH
6HFWLRQ PHDQVRIHJUHVVZKHQFRQIRUPLQJWR6HFWLRQ
™ 6HFWLRQ  UHTXLUHV VWDLUZD\V WR EH 8QGHU WKH FDWHJRULHV DQG RFFXSDQFLHV LQ 7DEOH
SURWHFWHGIURPVPRNHE\RQHRIWZRPHWKRGV  GHWHUPLQH WKH DSSURSULDWH YDOXH DQG
D VPRNHSURRI HQFORVXUH RU VWDLUZD\ HQWHU WKDW YDOXH LQWR 7DEOH  XQGHU 6DIHW\
SUHVVXUL]DWLRQ GHVLJQ VHH 6%&  6HFWLRQ 3DUDPHWHU  0HDQV RI (JUHVV &DSDFLW\
 IRUPHDQVRIHJUHVVDQGJHQHUDOVDIHW\
™ $GGLWLRQDO UHTXLUHPHQWV WKDW PXVW EH
FRQVLGHUHG ZKHQ HYDOXDWLQJ D VPRNHSURRI ™ 7KLV VHFWLRQ DGGUHVVHV WKH H[LW FDSDFLW\ DQG
HQFORVXUH DUH DFFHVV VHH 6%&  6HFWLRQ QXPEHURIH[LVWLQJH[LWVDYDLODEOHWRWKHEXLOGLQJ
FRQVWUXFWLRQVHH 6%& 6HFWLRQ RFFXSDQWV%HIRUHDEXLOGLQJFDQEHHYDOXDWHG
YHQWLODWLQJHTXLSPHQWVHH6%& LQ WKLV FDWHJRU\ DQG &KDSWHU  LQ JHQHUDO LW
6HFWLRQDQGVWDQGE\SRZHUVHH6%& PXVWFRPSO\ZLWKWKHOLVWHGVHFWLRQVRIWKH6%&
6HFWLRQ 
™ &DWHJRU\HUHFRJQL]HVWKHXVHRIDPHFKDQLFDO ™ 7KHPHDQVRIHJUHVVLVUHTXLUHGWRFRQIRUPWR
VPRNHFRQWUROV\VWHPGHVLJQHGLQDFFRUGDQFH WKH IROORZLQJ 6%&  VHFWLRQV IRU QHZ
ZLWK WKH SURYLVLRQV RI WKH FRGH LQ D IXOO\ FRQVWUXFWLRQEHIRUHHYDOXDWLRQ
VSULQNOHUHG EXLOGLQJ (DFK ILUH DUHD LQ WKH x 6%&  6HFWLRQ  HVWDEOLVKHV WKDW
EXLOGLQJPXVWKDYHDPHFKDQLFDOVPRNHFRQWURO HOHYDWRUV HVFDODWRUV DQG PRYLQJ ZDONV
V\VWHP5HWXUQDQGH[KDXVWDLUIURPWKHV\VWHP FDQQRWEHFRQVLGHUHGDVSDUWRIWKHPHDQVRI
PXVW EH GLVFKDUJHG GLUHFWO\ WR WKH H[WHULRU WR HJUHVV
DFKLHYH WKH QHFHVVDU\ OHYHO RI SURWHFWLRQ $
VSHFLILF DLU FKDQJH UHTXLUHPHQW LV SURYLGHG x 6%&  6HFWLRQ  HVWDEOLVKHV WKH
LQGHSHQGHQW RI WKH ILUH DUHD¶V YROXPH RU VL]H PLQLPXP QXPEHU RI RFFXSDQWV WKH H[LW
1RWHWKDWDVPRNHFRQWUROV\VWHPGHVLJQHGLQ IDFLOLWLHVPXVWDFFRPPRGDWH

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

x 6%&6HFWLRQGHILQHVWKHFDSDFLW\ RI HJUHVV FRPSOLHV ZLWK WKH PLQLPXP

RI WKH PHDQV RI HJUHVV E\ LGHQWLI\LQJ D UHTXLUHG ZLGWK GLPHQVLRQV VSHFLILHG LQ WKH
PLQLPXP ZLGWK RI HJUHVV FRPSRQHQW SHU 6%&  DQGWKH QXPEHURIH[LWVFRPSOLHV
RFFXSDQW7KLVLVXVHGWRFDOFXODWHWKHWRWDO ZLWK WKH PLQLPXP QXPEHU UHTXLUHG E\
FDSDFLW\RIWKHPHDQVRIHJUHVVFRPSRQHQW 6HFWLRQRI6%&
x 6%&  6HFWLRQ  HVWDEOLVKHV  &DWHJRU\ G²7KH QXPEHU RI H[LWV SURYLGHG
UHTXLUHPHQWV IRU FRPPRQ SDWK RI HJUHVV H[FHHGV WKH QXPEHU RI H[LWV UHTXLUHG E\
WUDYHO 6HFWLRQ  RI 6%&  ([LWV VKDOO EH
x 6%&  6HFWLRQ  HVWDEOLVKHV ORFDWHGDGLVWDQFHDSDUWIURPHDFKRWKHUHTXDO
UHTXLUHPHQWV IRU WKH UHPRWHQHVV RI H[LW WR QRW OHVV WKDQ WKDW VSHFLILHG LQ 6HFWLRQ
GRRUVDQGPHDQVRIHJUHVVGRRUV RI6%&
x 6%&  6HFWLRQ  HVWDEOLVKHV  &DWHJRU\H²7KHDUHDEHLQJHYDOXDWHGPHHWV
UHTXLUHPHQWVIRUPLQLPXPQXPEHURIH[LWV ERWK&DWHJRULHVFDQGG
x 6%&  6HFWLRQV   DQG ™ )LYH FDWHJRULHV PXVW EH FRQVLGHUHG 7KHVH
HVWDEOLVKUHTXLUHPHQWVUHODWHGWRWKH FDWHJRULHV DQG WKH RFFXSDQF\ RI WKH EXLOGLQJ
H[LWGLVFKDUJH ZLOO GHWHUPLQH WKH VFRUH HQWHUHG LQ 7DEOH
x 6%&  6HFWLRQV   DQG 
 HVWDEOLVK UHTXLUHPHQWV UHODWHG WR ™ &DWHJRU\ D LV DSSOLFDEOH WR EXLOGLQJV WKDW
H[LWVDQGOREELHVIRUDVVHPEO\RFFXSDQFLHV FRPSO\ ZLWK HLWKHU WKH PHDQVRIHJUHVV
FDSDFLW\ RU WKH QXPEHU RI H[LWV LQFOXGLQJ WKH
x 6%&  6HFWLRQ  HVWDEOLVKHV XVHRIILUHHVFDSHV $OWKRXJKWKHFRGHDOORZV
UHTXLUHPHQWV IRU HPHUJHQF\ HVFDSH DQG ILUHHVFDSHVWREHXVHGDVDQHJUHVVHOHPHQW
UHVFXH LQH[LVWLQJEXLOGLQJVWKLVLVWKHOHDVWGHVLUDEOH
™ 7DEOH  DVVLJQV YDOXHV IRU HDFK RSWLRQLQDQ\W\SHRIEXLOGLQJ7KHFRGHUHTXLUHV
RFFXSDQF\ DQG FDWHJRU\ IURP 6HFWLRQ DEXLOGLQJXVLQJILUHHVFDSHVWRXVH&DWHJRU\D
7KHWDEOHJLYHVFUHGLWIRUSURYLGLQJ DQGLWVFRUUHVSRQGLQJQHJDWLYHSRLQWV
DGGLWLRQDOQXPEHUVRIH[LWVDQGDGGLWLRQDOH[LW ™ &DWHJRU\ELVXVHGIRUEXLOGLQJVWKDWPHHWWKH
FDSDFLW\EH\RQGWKHPLQLPXPUHTXLUHGIRUQHZ PLQLPXP UHTXLUHPHQWV RI 6%&  6HFWLRQ
FRQVWUXFWLRQ IRUFDSDFLW\RIPHDQVRIHJUHVVDQG6%&
™ 7KLV DGGLWLRQDO HYDOXDWLRQ FRQWULEXWHV WR WKH 6HFWLRQIRUPLQLPXPQXPEHURIH[LWV
RYHUDOODVVHVVPHQWRIWKHEXLOGLQJ¶VVDIHW\DQG DQGFRQWLQXLW\
PD\ RIIVHW RWKHU VDIHW\ GHILFLHQFLHV >VHH ™ &DWHJRU\FLVXVHGIRUEXLOGLQJVWKDWH[FHHGWKH
&RPPHQWDU\ )LJXUHV  DQG UHTXLUHPHQWV IRU QHZ FRQVWUXFWLRQ 7KLV
@ 1RWH D RI WKH WDEOH SURYLGHV D FDWHJRU\ SURYLGHV VPDOO SRVLWLYH SRLQWV IRU
VLJQLILFDQW SHQDOW\ IRU KLJKULVH EXLOGLQJV WKDW H[LVWLQJEXLOGLQJVWKDWPHHWDOORIWKHIROORZLQJ
XVHILUHHVFDSHVDVSDUWRIWKHPHDQVRIHJUHVV UHTXLUHPHQWV
,Q WKLV FDVH LI WKH EXLOGLQJ LV VHYHQ VWRULHV RU ™ 7KH FDSDFLW\ RI DOO PHDQVRIHJUHVV
JUHDWHU LQ KHLJKW DQG XVHV ILUH HVFDSHV  FRPSRQHQWVLVJUHDWHUWKDQSHUFHQWRIWKH
SRLQWV PXVW EH DGGHG WR WKH YDOXHV DOUHDG\ UHTXLUHGFDSDFLW\
OLVWHGIRU&DWHJRU\DEXLOGLQJV ™ $OO PHDQVRIHJUHVV FRPSRQHQWV FRPSO\ ZLWK
WKHPLQLPXPUHTXLUHGZLGWKV>HJPFOHDU
IRU GRRUV FRUULGRUV WKDW DUH  P ZLGH DQG
 &DWHJRULHV  7KH FDWHJRULHV IRU VWDLUZD\V@
PHDQVRIHJUHVVFDSDFLW\DQGQXPEHURIH[LWVDUH ™ 7KH PLQLPXP QXPEHU RI H[LWV LV SURYLGHG
EDVHG RQ WKH QXPEHU RI RFFXSDQWV RQ HDFK
 &DWHJRU\D²&RPSOLDQFHZLWKWKHPLQLPXP IORRUOHYHO
UHTXLUHGPHDQVRIHJUHVVFDSDFLW\RUQXPEHU ™ %\ SURYLGLQJ RYHUVL]HG HJUHVV FDSDFLW\ DQG
RIH[LWVLVDFKLHYHGWKURXJKWKHXVHRIDILUH PLQLPXP HJUHVV ZLGWK UHTXLUHPHQWV DQ
H[LVWLQJ EXLOGLQJ KDV DGGHG VDIHW\ ZKLFK LV
HVFDSHLQDFFRUGDQFHZLWK6HFWLRQ
UHZDUGHG ZLWK D VPDOO QXPEHU RI SRVLWLYH
 &DWHJRU\E²&DSDFLW\RIWKHPHDQVRIHJUHVV SRLQWV
FRPSOLHVZLWK6HFWLRQRI6%&DQG ™ &DWHJRU\ G VLPSO\ UHODWHV WR EXLOGLQJV ZKHUH
WKH QXPEHU RI H[LWV FRPSOLHV ZLWK WKH PRUHH[LWVDUHSURYLGHGWKDQUHTXLUHGE\ 6%&
PLQLPXPQXPEHUUHTXLUHGE\6HFWLRQRI 6HFWLRQZKLFKFRQWULEXWHVDSRVLWLYH
6%& IDFWRUWRWKHEXLOGLQJ¶VH[LWFDSDFLW\
 &DWHJRU\F²&DSDFLW\RIWKHPHDQVRIHJUHVV ™ %HIRUH FUHGLW FDQ EH JLYHQ WR DQ H[LVWLQJ
LV HTXDO WR RU H[FHHGV  SHUFHQW RI WKH EXLOGLQJZLWKDJUHDWHUQXPEHURIH[LWVWKHH[LWV
UHTXLUHGPHDQVRIHJUHVVFDSDFLW\WKHPHDQV PXVW EH HYDOXDWHG IRU WKHLU UHPRWHQHVV DQG

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

LQGHSHQGHQFHIURPHDFKRWKHU$OORIWKHH[LWV SDVVDJHZD\V DQG FRUULGRUV ZKHUH RFFXSDQWV

PXVWEHORFDWHGDWOHDVWRQHKDOIWKHOHQJWKRI PD\QRWUHDOL]HWKDWWKHFRUULGRUHQGVDQGWKH\
WKHGLDJRQDOIURPHDFKRWKHUEHIRUH&DWHJRU\G PD\ KDYH WR UHWUDFH WKHLU VWHSV LQ RUGHU WR
FDQ EH XVHG ,I WKH EXLOGLQJ LV HTXLSSHG UHPDLQRQDSDWKWRZDUGDQH[LW
WKURXJKRXWZLWKDQDXWRPDWLFVSULQNOHUV\VWHP ™ 7KHWDEOHUHIOHFWVWKHUHODWLYHGHJUHHRIKD]DUG
LQDFFRUGDQFHZLWK1)3$RU5WKHH[LWV DVVRFLDWHG ZLWK GHDGHQG SDVVDJHZD\V DQG
FDQ EH ORFDWHG RQHWKLUG WKH OHQJWK RI WKH FRUULGRUV7KLVLVVKRZQE\WKHGHILFLHQF\SRLQWV
GLDJRQDOIURPHDFKRWKHU WKDWDSSO\ZKHUHDGHDGHQGH[FHHGVRU
™ &DWHJRU\ H SURYLGHV DGGLWLRQDO FUHGLW IRU PLQDQRFFXSDQF\ZLWKDUHODWLYHO\KLJK
H[LVWLQJEXLOGLQJVWKDWKDYHWKHFKDUDFWHULVWLFV RFFXSDQW ORDG VXFK DV DQ DVVHPEO\
RI ERWK &DWHJRULHV F DQG G 6XFK D EXLOGLQJ RFFXSDQF\1RWH DDOORZV IRUWKHLQWHUSRODWLRQ
ZKLFK KDV RYHUVL]HG FDSDFLWLHV LQ LWV HJUHVV IRU DFWXDO GHDGHQG OHQJWKV EHWZHHQ WKH
HOHPHQWV PLQLPXP UHTXLUHG FOHDU ZLGWKV IRU GLVWDQFHV VSHFLILHG LQ WKH FDWHJRULHV )RU
WKHHJUHVVFRPSRQHQWVDQGDGGLWLRQDOH[LWVWKDW H[DPSOH LI D EXLOGLQJ FRQWDLQV D FRUULGRU WKDW
DUH DOO UHPRWHO\ ORFDWHG IURP RQH DQRWKHU LV KDV D GHDGHQG OHQJWK RI  P DW HDFK HQG
FRQVLGHUHG WR KDYH WKH KLJKHVW GHJUHH RI EH\RQGWKHH[LWVWKHYDOXHRILVXVHGWKLVLV
VDIHW\KRZHYHUWKLVLVWUXHIRURQO\VRPHRIWKH WKHPLGSRLQWEHWZHHQ&DWHJRULHVEDQGF
DSSOLFDEOHRFFXSDQFLHV,Q*URXS%)6DQG5
RFFXSDQFLHV DQ\ DGGLWLRQDO FDSDFLW\ RU 
LQFUHDVHG QXPEHU RI H[LWV LV QRW D VLJQLILFDQW  &DWHJRULHV  7KH FDWHJRULHV IRU
IDFWRU1RSRVLWLYHSRLQWVDUHDZDUGHGIRU WKLV GHDGHQGVDUH
OLIHVDIHW\LVVXHIRUWKHVHRFFXSDQFLHV 
 &DWHJRU\ D²'HDG HQG RI  P LQ
 'HDGHQGV,QVSDFHVUHTXLUHGWR
QRQVSULQNOHUHG EXLOGLQJV RU  P LQ
EH VHUYHG E\ PRUH WKDQ RQH PHDQV RI HJUHVV
VSULQNOHUHGEXLOGLQJV
HYDOXDWHWKHOHQJWKRIWKHH[LWDFFHVVWUDYHOSDWKLQ
 &DWHJRU\E²'HDGHQGRIPRUP
ZKLFK WKH EXLOGLQJ RFFXSDQWV DUH FRQILQHG WR D
LQ *URXS % LQ DFFRUGDQFH ZLWK 6HFWLRQ
VLQJOH SDWK RI WUDYHO 8QGHU WKH FDWHJRULHV DQG
([FHSWLRQRI6%&
RFFXSDQFLHV LQ 7DEOH  GHWHUPLQH WKH
 &DWHJRU\F²1RGHDGHQGVRUUDWLRRIOHQJWK
DSSURSULDWH YDOXH DQG HQWHU WKDW YDOXH LQWR 7DEOH
WRZLGWKOZLVOHVVWKDQ
 XQGHU 6DIHW\ 3DUDPHWHU  'HDG
 &DWHJRU\G²'HDGHQGVH[FHHGLQJ&DWHJRU\
(QGVIRUPHDQVRIHJUHVVDQGJHQHUDOVDIHW\
D
™ 7KLVVHFWLRQLVXVHGWRHYDOXDWHGHDGHQGH[LW
™ 7KLV VHFWLRQ GHILQHV WKH FDWHJRULHV IRU GHDG
DFFHVV FRQGLWLRQV ZLWKLQ WKH EXLOGLQJ 7KLV
HQGH[LWDFFHVVFRQGLWLRQV
VHFWLRQ XVHV WKH WHUPLQRORJ\ ³FRQILQHG WR D
™ &DWHJRU\DDOORZVGHDGHQGFRQGLWLRQVRIXSWR
VLQJOHSDWKRIWUDYHO´$QRWKHUZD\WRLOOXVWUDWH
PIRUH[LVWLQJEXLOGLQJVWKDWDUHQRWIXOO\
WKH PHDQLQJ RI WKLV LV ³D VLQJOH GLUHFWLRQ RI
VSULQNOHUHG DQG XS WR  P IRU H[LVWLQJ
WUDYHOWRUHDFKDQH[LW´$FRUULGRULVW\SLFDOO\RI
EXLOGLQJV WKDW DUH IXOO\ VSULQNOHUHG 7KHVH
DZLGWKWKDWSURYLGHVHIIHFWLYHO\RQO\RQHSDWK
GLVWDQFHVFRUUHVSRQGWRWKHDEVROXWHPD[LPXP
LQZKLFKDEXLOGLQJRFFXSDQWFDQWUDYHOLQRQH
GHDGHQGOHQJWKVDOORZHGLQH[LVWLQJEXLOGLQJV
RIWZRGLUHFWLRQVWRUHDFKH[LWV$GHDGHQGPD\
E\WKH6%&'HDGHQGVJUHDWHUWKDQWKHVH
EHDVLQJOHSDWKEXWWKHNH\IHDWXUHRIDGHDG
GLVWDQFHV DUH FRQVLGHUHG DQ XQVDIH FRQGLWLRQ
HQG LV WKDW RQO\ RQH GLUHFWLRQ LV DYDLODEOH WR
EHFDXVHWKH\DUHQRWDOORZHGE\WKH6%&
UHDFK DQ H[LW :KHQ EXLOGLQJ RFFXSDQWV KDYH
WR RFFXU LQ DQ H[LVWLQJ EXLOGLQJ ,W ZRXOG
RQO\ RQH GLUHFWLRQ RI WUDYHO DYDLODEOH D
WKHUHIRUHEHLQFRQVLVWHQWWRDOORZJUHDWHUGHDG
SRWHQWLDOO\ KD]DUGRXV FRQGLWLRQ LV FUHDWHG
HQG OHQJWKV XQGHU WKLV HYDOXDWLRQ PHWKRG
EHFDXVH WKH\ PD\ EHFRPH WUDSSHG LI WKH
6LQFH WKHVH OHQJWKV IDU H[FHHG WKH DOORZDEOH
GLUHFWLRQRIWUDYHOWRWKHH[LWLVEORFNHGE\ILUHRU
OHQJWKV SHUPLWWHG IRU QHZ FRQVWUXFWLRQ
VPRNH
QHJDWLYH YDOXHV DUH DVVRFLDWHG ZLWK WKLV
™ 7KLVVHFWLRQDGGUHVVHVRQO\GHDGHQGVWKDWDUH
FDWHJRU\
DFRPSRQHQWRIH[LWDFFHVVWUDYHOZKLFKLV³WKDW
™ &DWHJRU\ELVWKHFODVVLILFDWLRQIRUEXLOGLQJVWKDW
SRUWLRQ RI D PHDQV RI HJUHVV WKDW OHDGV WR DQ
FRPSO\ ZLWK WKH UHTXLUHPHQWV IRU QHZ
HQWUDQFH WR DQ H[LW´ $OWKRXJK D URRP
FRQVWUXFWLRQ 7KLV ]HUREDVHG FDWHJRU\
FRQWDLQLQJRQO\RQH HJUHVVGRRUKDVRQO\RQH
SURYLGHVQRH[WUDFUHGLWIRUFRPSO\LQJZLWKQHZ
ZD\ RXW LW LV QRW FRQVLGHUHG D GHDGHQG
FRQVWUXFWLRQUHTXLUHPHQWV
FRQGLWLRQ 7KH FRGH WDNHV WKLV FRQGLWLRQ LQWR
™ &DWHJRU\ F UHSUHVHQWV FRQGLWLRQV WKDW H[FHHG
DFFRXQW LQ HVWDEOLVKLQJ WKH OLPLWDWLRQV XQGHU
WKHUHTXLUHPHQWVIRUQHZFRQVWUXFWLRQ,IWKHUH
ZKLFK D URRP LV DOORZHG WR KDYH RQO\ RQH
DUH QR GHDGHQG FRUULGRUV RU WKH ³FRUULGRU´ LV
PHDQVRIHJUHVV'HDGHQGVDUHDFRQFHUQLQ
PRUHRID³VSDFH´&DWHJRU\FFDQEHXVHG,Q

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

&DWHJRU\ F WKH OHQJWKWRZLGWK UDWLR RI  WR DVVLJQHG QHJDWLYH SRLQWV EDVHG RQ WKH H[WHQW
GHILQH D VSDFHFRUULGRU LV WKH VDPH DV WKHWUDYHOGLVWDQFHH[FHHGVWKHDOORZDEOHOLPLW
([FHSWLRQLQ6%&6HFWLRQ6XFK ™ )RU H[DPSOH DQ H[LVWLQJ *URXS % EXVLQHVV
DVSDFHDOORZVWKHEXLOGLQJXVHUDPRUHFLUFXODU EXLOGLQJ KDVD WUDYHO GLVWDQFHRI P7KH
URXWHDQGIXOOYLHZRIWKHVSDFHDQGWKHUHIRUH GLVWDQFH LV PHDVXUHG IURP WKH PRVW UHPRWH
GRHVQRWUHSUHVHQWDVJUHDWDSRWHQWLDOKD]DUG FRUQHU RI D SDUWLWLRQHG RIILFH GRZQ D FRUULGRU
DVDFODVVLFGHDGHQGFRUULGRU DQG WR DQ H[LW GRRU 6%&  7DEOH 
™ 7KHVH FDWHJRULHV DQG RFFXSDQFLHV RI WKH SHUPLWV DQ XQVSULQNOHUHG *URXS % EXLOGLQJ WR
EXLOGLQJ DUH XVHG LQ 7DEOH  WR KDYH D WUDYHO GLVWDQFH RI  P 7KH HTXDWLRQ
GHWHUPLQH WKH VFRUH WR EH HQWHUHG LQ 7DEOH \LHOGVWKHIROORZLQJ
IRUWKH6DIHW\3DUDPHWHURI'HDG(QGV ™ 3RLQWV ²PPP 
RQ OLQH  >VHH &RPPHQWDU\ )LJXUHV 
  DQG ™ 6HH &RPPHQWDU\ )LJXUHV 
@  DQG  IRU RWKHU
H[DPSOHV
 0D[LPXP H[LW DFFHVV WUDYHO
GLVWDQFH WR DQ H[LW  (YDOXDWH WKH OHQJWK RI H[LW  (OHYDWRU FRQWURO  (YDOXDWH WKH
DFFHVV WUDYHO WR DQ DSSURYHG H[LW 'HWHUPLQH WKH SDVVHQJHUHOHYDWRUHTXLSPHQWDQGFRQWUROVWKDWDUH
DSSURSULDWHSRLQWVLQDFFRUGDQFHZLWKWKHIROORZLQJ DYDLODEOH WR WKH ILUH GHSDUWPHQW WR UHDFK DOO
HTXDWLRQ DQG HQWHU WKDW YDOXH LQWR 7DEOH  RFFXSLHG IORRUV (PHUJHQF\ UHFDOO DQG LQFDU
XQGHU6DIHW\3DUDPHWHU0D[LPXP([LW RSHUDWLRQ RI HOHYDWRUV VKDOO EH SURYLGHG LQ
$FFHVV 7UDYHO 'LVWDQFH IRU PHDQV RI HJUHVV DQG DFFRUGDQFHZLWKWKH6%&8QGHUWKHFDWHJRULHV
JHQHUDOVDIHW\7KHPD[LPXPDOORZDEOHH[LWDFFHVV DQGRFFXSDQFLHVLQ7DEOHGHWHUPLQHWKH
WUDYHO GLVWDQFH VKDOO EH GHWHUPLQHG LQ DFFRUGDQFH DSSURSULDWH YDOXH DQG HQWHU WKDW YDOXH LQWR 7DEOH
ZLWK6HFWLRQRI6%& XQGHU6DIHW\3DUDPHWHU(OHYDWRU
&RQWUROIRUILUHVDIHW\PHDQVRIHJUHVVDQGJHQHUDO
VDIHW\ 7KH YDOXHVVKDOO EH ]HURIRUD VLQJOHVWRU\
ƒš‹—ƒŽŽ‘™ƒ„Ž‡ ƒš‹—ƒ…–—ƒŽ
െ EXLOGLQJ
‘‹–• ൌ ʹͲ ൈ –”ƒ˜‡Ž†‹•–ƒ…‡ –”ƒ˜‡Ž†‹•–ƒ…‡ 
ƒš‹—ƒŽŽ‘™ƒ„Ž‡–”ƒ˜‡Ž†‹•–ƒ…‡ ™ 7KHDYDLODELOLW\RIHOHYDWRUVLQWKHEXLOGLQJDQG
WKHLU LQFDSDELOLW\ LQ DQ HPHUJHQF\ DUH
  HYDOXDWHG7KLVVHFWLRQDGGUHVVHVIRXUGLIIHUHQW
FDWHJRULHV RI HOHYDWRUV LQ H[LVWLQJ EXLOGLQJV
™ 7KH OHQJWK RI H[LW DFFHVV WUDYHO GLVWDQFH LV
7KLVVHFWLRQGRHVQRWDGGUHVVWKHUHTXLUHPHQWV
HYDOXDWHGLQFRPSDULVRQWRWKHWUDYHOGLVWDQFH
RI 6%&  &KDSWHU  $FFHVV PXVW EH
DOORZHG E\ 6%&  7DEOH  IRU D
SURYLGHG WR DOO RFFXSLHG IORRUV E\ SDVVHQJHU
SDUWLFXODU RFFXSDQF\ 7KH H[LW DFFHVV WUDYHO
HOHYDWRUV IRU WKH SXUSRVHV RI WKLV HYDOXDWLRQ
GLVWDQFH LV PHDVXUHG IURP WKH PRVW UHPRWH
)UHLJKW HOHYDWRUV FDQQRW EH FRQVLGHUHG VLQFH
SRLQWLQWKHEXLOGLQJWRWKHQHDUHVWHQWUDQFHWR
WKH\PD\EHLQORFDWLRQVQRWUHDGLO\DFFHVVLEOH
DQH[LW7RWDOH[LWDFFHVVWUDYHOGLVWDQFHLQ6%&
IRU ILUH GHSDUWPHQW XVH (PHUJHQF\ HOHYDWRU
7DEOHLQFOXGHVWUDYHOZLWKLQDURRP
RSHUDWLRQ PXVW FRPSO\ ZLWK WKH 6%&  IRU
RUVSDFHSOXVDQ\H[LWDFFHVVFRUULGRUWUDYHOWR
HLWKHUD3KDVH, HPHUJHQF\UHFDOORU 3KDVH,,
WKH H[LW 6RPH PRGLILFDWLRQV WR WKH 6%& 
HPHUJHQF\ LQFDU RSHUDWLRQ 2QHVWRU\
7DEOHUHTXLUHPHQWVDUHOLVWHGIRUFHUWDLQ
EXLOGLQJV LQFOXGLQJ WKRVH ZLWK PH]]DQLQHV
RFFXSDQFLHVDQGEXLOGLQJVDVOLVWHGLQWKHQRWHV
VHUYHGE\DQHOHYDWRUDUHDZDUGHG]HURYDOXH
WRWKDWWDEOH
™ 7KHWDEOHDVVLJQVYDOXHVEDVHGRQWKHW\SHVRI
™ 7R GHWHUPLQH WKH YDOXH WR EH DVVLJQHG IRU
FRQWUROV WKH HOHYDWRUV KDYH DQG WKH GLVWDQFH
PD[LPXP WUDYHO GLVWDQFHV WR DQ H[LW WKH
WKH HOHYDWRUV PXVW WUDYHO WR UHDFK WKH IORRUV
VSHFLILHGHTXDWLRQPXVWEHXVHG7KLVHTXDWLRQ
WKH\ VHUYH 7KH  P WKUHVKROG RI HOHYDWRU
DOORZVDJUDGXDWHGVFDOHWREHXVHGWRHYDOXDWH
WUDYHO LV EDVHG RQ WKH 6%&  UHTXLUHPHQWV
FRPSOLDQFH RI DQ H[LVWLQJ VLWXDWLRQ ZLWK QHZ
DQG $60( $ (OHYDWRU WUDYHO GLVWDQFH LV
FRQVWUXFWLRQWUDYHOGLVWDQFHUHTXLUHPHQWV:LWK
EDVHG RQ WKH OHYHO ZKHUH WKH HOHYDWRU LV
WKH HTXDWLRQ D PRUH GHILQLWH HYDOXDWLRQ FDQ
DFFHVVHGE\WKHILUHGHSDUWPHQW8VXDOO\WKLV
RFFXU ZLWK D EURDGHU UDQJH RI VFRUHV $Q\
LV WKH JURXQG IORRU RU JUDGHOHYHO IORRU DQG
H[LVWLQJEXLOGLQJKDYLQJRYHUDOOWUDYHOGLVWDQFHV
FRUUHVSRQGV WR WKH OHYHO ZKHUH ILUH FRPPDQG
OHVV WKDQ WKRVH VSHFLILHG LQ 6%&  7DEOH
VWDWLRQV RU ILUH DODUP V\VWHP DQQXQFLDWRU
 ZLOO DFKLHYH D SRVLWLYH FUHGLW ([LVWLQJ
SDQHOV DUH ORFDWHG $Q\ HOHYDWRU WKDW WUDYHOV
EXLOGLQJV ZLWK WUDYHO GLVWDQFHV JUHDWHU WKDQ
PRUPRUHPXVWDOZD\VEHSURYLGHGZLWK
WKRVH DOORZHG IRU QHZ FRQVWUXFWLRQ ZLOO EH
3KDVH,DQG,,UHFDOOFDSDELOLWLHV
™ ([DPSOH

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

™ $VVXPHD*URXS%EXVLQHVVRFFXSDQF\WKUHH ™ &DWHJRU\GLVXVHGIRUOHDVWRQHRIWKHHOHYDWRUV
VWRULHVLQKHLJKWZKHUHWKHHOHYDWRUOREELHVDUH LQWKHH[LVWLQJEXLOGLQJVHUYHVDOORFFXSLHGIORRU
HTXLSSHG ZLWK VPRNH GHWHFWRUV WKDW UHFDOO WKH OHYHOV 7KH FRQWUROV PXVW DOVR FRPSO\ ZLWK DOO
HOHYDWRU WR WKH PDLQ IORRU RU WR DQ DOWHUQDWLYH UHTXLUHPHQWV IRU QHZ FRQVWUXFWLRQ 7KLV
IORRULIWKHPDLQIORRUGHWHFWRULVDFWLYDWHG7KH FDWHJRU\ UHFRJQL]HV WKH EHQHILWV RI KDYLQJ DOO
HOHYDWRU WUDYHOV PRUH WKDQ  P DERYH WKH HOHYDWRUV ZLWK 3KDVH , HPHUJHQF\ UHFDOO DQG
PDLQIORRU 3KDVH ,,HPHUJHQF\LQFDOORSHUDWLRQFRQWUROV
™ 7KLV EXLOGLQJ PXVW EH SODFHG LQ &DWHJRU\ F DVZHOODVKDYLQJDQHZO\FRQVWUXFWHGHOHYDWRU
%HFDXVHWKHHOHYDWRUWUDYHOVPRUHWKDQP ZLWKDOOWKHIHDWXUHVWRIDFLOLWDWHILUHILJKWLQJDQG
DERYH WKH PDLQ IORRU LW PXVW EH EURXJKW LQWR UHVFXH RSHUDWLRQV %DVHG RQ WKH FRQWUROV
FRPSOLDQFH ZLWK WKH 6%&  ZKLFK UHTXLUHV SURYLGHG RU WKH ODFN RI HOHYDWRUV WKH
3KDVH , RU ,, UHFDOO :KHQ WKH HOHYDWRUV DUH DSSURSULDWH FDWHJRU\ LV GHWHUPLQHG 7KLV
EURXJKWLQWRFRPSOLDQFHZLWKWKH6%&WKH\ FDWHJRU\DQGWKH GLVWDQFH WKH HOHYDWRUWUDYHOV
DUH SODFHG DXWRPDWLFDOO\ LQ &DWHJRU\ F 7KH DUH WKHQ XVHG DORQJ ZLWK 7DEOH  WR
YDOXHIURP7DEOHLV]HURWKHUHIRUH GHWHUPLQH WKH YDOXH VFRUH WKH EXLOGLQJ ZLOO
]HUR PXVW EH HQWHUHG LQ 7DEOH  IRU WKH UHFHLYHIRUWKLVLWHP7KHYDOXHLVWKHQHQWHUHG
6DIHW\ 3DUDPHWHU RI (OHYDWRU &RQWURO RQ OLQH LQ7DEOH

 0HDQVRIHJUHVV HPHUJHQF\
OLJKWLQJ(YDOXDWHWKHSUHVHQFHRIDQGUHOLDELOLW\RI
 &DWHJRULHV  7KH FDWHJRULHV IRU PHDQVRIHJUHVV HPHUJHQF\ OLJKWLQJ 8QGHU WKH
HOHYDWRUFRQWUROVDUH FDWHJRULHV DQG RFFXSDQFLHV LQ 7DEOH 
GHWHUPLQHWKHDSSURSULDWHYDOXHDQGHQWHUWKDWYDOXH
 &DWHJRU\D²1RHOHYDWRU LQWR 7DEOH  XQGHU 6DIHW\ 3DUDPHWHU
 &DWHJRU\ E²$Q\ HOHYDWRU ZLWKRXW 3KDVH ,  0HDQVRI(JUHVV (PHUJHQF\ /LJKWLQJ
HPHUJHQF\ UHFDOO RSHUDWLRQ DQG 3KDVH ,, IRUPHDQVRIHJUHVVDQGJHQHUDOVDIHW\
HPHUJHQF\LQFDURSHUDWLRQ
™ /LJKWLQJWKURXJKRXWWKHHQWLUHPHDQVRIHJUHVV
 &DWHJRU\ F²$OO HOHYDWRUV ZLWK 3KDVH , LVHYDOXDWHGLQWKLVVHFWLRQ,OOXPLQDWLRQRIWKH
HPHUJHQF\ UHFDOO RSHUDWLRQ DQG 3KDVH ,, PHDQVRIHJUHVVLVHVVHQWLDOLQDEXLOGLQJGXULQJ
HPHUJHQF\LQFDURSHUDWLRQDVUHTXLUHGE\WKH QRUPDO RFFXSDQF\ 'XULQJ DQ HPHUJHQF\
6%& LOOXPLQDWLRQ EHFRPHV HYHQ PRUH LPSRUWDQW
 &DWHJRU\ G²$OO PHHW &DWHJRU\ F RU EHFDXVHRFFXSDQWVPD\EHXQGHUPRUHVWUHVV
&DWHJRU\ E ZKHUH SHUPLWWHG WR EH ZLWKRXW ZKHQ VHHNLQJ WR HYDFXDWH WKH EXLOGLQJ DQG
3KDVH,HPHUJHQF\UHFDOORSHUDWLRQDQG3KDVH YLVLELOLW\ PD\ EH UHGXFHG E\ WKH EXLOGXS RI
,,HPHUJHQF\LQFDURSHUDWLRQDQGDWOHDVWRQH VPRNHIURPDILUH7KHUHODWLYHYDOXHRIPHDQV
HOHYDWRUWKDWFRPSOLHVZLWKQHZFRQVWUXFWLRQ RIHJUHVVOLJKWLQJLVUHSUHVHQWHGE\WKHSRVLWLYH
SRLQWV DVVLJQHG E\ 7DEOH  ZKHQ
UHTXLUHPHQWVVHUYHVDOORFFXSLHGIORRUV
UHOLDELOLW\RIHJUHVVOLJKWLQJLVSURYLGHGEH\RQG
™ 7KHFDWHJRULHVWKDWDEXLOGLQJPD\EHSODFHGLQ WKHPLQLPXPUHTXLUHGE\WKHFRGH
UDQJH IURP EXLOGLQJV ZLWK QR HOHYDWRUV WR ™ 7KLVWDEOHLVXVHGWRDVVHVVWKHUHODWLYHULVNWR
EXLOGLQJV ZLWK HOHYDWRUV FRPSO\LQJ ZLWK QHZ WKH RFFXSDQWV RI WKH EXLOGLQJ ZKHQ HJUHVV
FRQVWUXFWLRQ UHTXLUHPHQWV DQG WRWDO HOHYDWRU OLJKWLQJ LV QRW DGHTXDWH 7KH WDEOH UHLQIRUFHV
UHFDOOFDSDELOLW\ WKHLGHDWKDWZKHQDEXLOGLQJLVUHTXLUHGWRKDYH
™ &DWHJRU\ D LV DSSOLFDEOH WR EXLOGLQJV ZLWK QR WZR RU PRUH H[LWV OLJKWLQJ KDV PRUH
HOHYDWRUV :LWKRXW DQ HOHYDWRU LQ D PXOWLSOH VLJQLILFDQFH7KHOLJKWLQJYDOXHVDUHOHVVFULWLFDO
VWRU\ EXLOGLQJ ILUH GHSDUWPHQW SHUVRQQHO DUH LQ VPDOOHU EXLOGLQJV ZKHUH RQO\ RQH H[LW LV
UHTXLUHG WR XVH WKH VWDLUV IRU UHVFXLQJ SHRSOH UHTXLUHG EHFDXVH WKH KD]DUG RI D VXEVWDQWLDO
DQG DFFHVVLQJ ILUH IORRUV &DWHJRU\ D LV RFFXSDQWORDGORFDWLQJDQGXVLQJWKHPHDQVRI
DVVLJQHGDQHJDWLYHYDOXH HJUHVVLVPLQLPDO
™ &DWHJRU\ E LV DSSOLFDEOH WR EXLOGLQJV LQ ZKLFK ™ ([DPSOH
HOHYDWRUV DUH SUHVHQW EXW KDYH QR UHFDOO $ *URXS $ PRVTXH EXLOGLQJ ZLWK D QXPEHU RI
FRQWUROV :LWKRXW UHFDOO RU ILUH GHSDUWPHQW FODVVURRPVWKDWZLOODFFRPPRGDWHXSWRSHRSOH
FRQWUROWKHHOHYDWRUVDUHDOORZHGYHUWLFDOWUDYHO KDVDWOHDVW RQHODPSRIOX[LOOXPLQDWLRQDWWKH
GLVWDQFHVRIOHVVWKDQP7KLVDSSURDFKLV IORRU OHYHO WKURXJKRXW WKH HQWLUH PHDQV RI HJUHVV
FRQVLVWHQW ZLWK WKH 6%&  ZKLFK UHTXLUHV 7KH PHDQVRIHJUHVV OLJKWLQJ LQ WKH SUD\HU KDOO
FRQWUROVIRUHOHYDWRUVUHDFKLQJPRUPRUH FRUULGRUV DQG VWDLUZD\V LV SURYLGHG ZLWK EDWWHU\
™ &DWHJRU\ F LV DSSOLFDEOH WR EXLOGLQJV ZLWK EDFNXSSRZHUWKDWLVVL]HGWRSURYLGHOLJKWLQJIRU
HOHYDWRUVWKDWKDYHDXWRPDWLFUHFDOODVUHTXLUHG KRXU 7KH FODVVURRP OLJKWLQJ LV ZLUHG WR WKH PDLQ
E\WKH6%&

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

VZLWFKSDQHOLQWKHEXLOGLQJDQGKDVQRHPHUJHQF\ WKHEXLOGLQJRUVRPHZKHUHLQWKHEXLOGLQJVLWH
SRZHUVRXUFH ,WGRHVQRWDVVXPHWKDWWKHSRZHUIDLOXUHRFFXUV
™ 7KH OLJKWLQJ PXVW EH SODFHG LQ &DWHJRU\ D DWWKHVRXUFHRISRZHUWRWKHVLWHLHIURPWKH
EHFDXVHWKHFODVVURRPVDUHSDUWRIWKHPHDQV SURYLGHU,IWKHHPHUJHQF\SRZHUSURYLGHVIXOO
RI HJUHVV H[LW DFFHVV DQG WKH ODFN RI SURWHFWLRQ WR WKH VLWH RU EXLOGLQJ GXULQJ SRZHU
HPHUJHQF\ SRZHU GRHV QRW FRPSO\ ZLWK 6%& IDLOXUH&DWHJRU\FLVDSSOLFDEOH&DPSXVW\SH
 6HFWLRQ  7KH FODVVURRP ZLOO FRPSOH[HV RU EXLOGLQJV WKDW UHTXLUH H[WUD
DFFRPPRGDWHXSWRRFFXSDQWVWKHUHIRUHLQ VHFXULW\ PD\ KDYH D SRZHU SODQW DYDLODEOH WR
DFFRUGDQFH ZLWK 6%&  6HFWLRQ  SURYLGH FRPSOHWH EDFNXS SRZHU IRU LQGHILQLWH
DQG 6%&  7DEOH  WKH URRPV DUH SHULRGV7KLVZLOOTXDOLI\IRUWKHSRVLWLYHSRLQWV
UHTXLUHG WR KDYH WZR PHDQV RI HJUHVV 7KH RIWKLVFDWHJRU\
OLJKWLQJ PXVW EH SURYLGHG ZLWK DQ HPHUJHQF\ ™ 7KHVH FDWHJRULHV DORQJ ZLWK WKH QXPEHU RI
SRZHU VRXUFH LQ DFFRUGDQFH ZLWK 6%&  UHTXLUHG H[LWV DUH XVHG WR GHWHUPLQH WKH
6HFWLRQ  7KH YDOXH GHWHUPLQHG IURP DSSURSULDWH YDOXH IURP 7DEOH  7KH
7DEOH  LV ³13´ (PHUJHQF\ SRZHU YDOXHGHWHUPLQHGIURP7DEOHLVWKHQ
PXVWEHDGGHGWRWKHOLJKWLQJLQWKHFODVVURRPV HQWHUHGLQ7DEOH
7KH UHVXOWLQJ &DWHJRU\ E KDV D YDOXH RI 
ZKLFKVKRXOGEHHQWHUHGLQ7DEOH  0L[HG RFFXSDQFLHV  :KHUH D
EXLOGLQJKDVWZRRUPRUHRFFXSDQFLHVWKDWDUHQRW
LQWKHVDPHRFFXSDQF\FODVVLILFDWLRQWKHVHSDUDWLRQ
 &DWHJRULHV  7KH FDWHJRULHV IRU EHWZHHQWKHPL[HGRFFXSDQFLHVVKDOOEHHYDOXDWHG
PHDQVRIHJUHVVHPHUJHQF\OLJKWLQJDUH LQDFFRUGDQFHZLWKWKLVVHFWLRQ:KHUHWKHUHLVQR
VHSDUDWLRQ EHWZHHQ WKH PL[HG RFFXSDQFLHV RU WKH
 &DWHJRU\ D²0HDQVRIHJUHVV OLJKWLQJ DQG VHSDUDWLRQ EHWZHHQ PL[HG RFFXSDQFLHV GRHV QRW
H[LWVLJQVQRWSURYLGHGZLWKHPHUJHQF\SRZHU TXDOLI\IRUDQ\RIWKHFDWHJRULHVLQGLFDWHGLQ6HFWLRQ
LQDFFRUGDQFHZLWK6HFWLRQRI6%&  WKH EXLOGLQJ VKDOO EH HYDOXDWHG DV
 &DWHJRU\ E²0HDQVRIHJUHVV OLJKWLQJ DQG LQGLFDWHGLQ6HFWLRQDQGWKHYDOXHIRUPL[HG
H[LWVLJQVSURYLGHGZLWKHPHUJHQF\SRZHULQ RFFXSDQFLHVVKDOOEH]HUR8QGHUWKHFDWHJRULHVDQG
DFFRUGDQFHZLWK6HFWLRQRI6%& RFFXSDQFLHV LQ 7DEOH  GHWHUPLQH WKH
 &DWHJRU\ F²(PHUJHQF\ SRZHU SURYLGHG WR DSSURSULDWH YDOXH DQG HQWHU WKDW YDOXH LQWR 7DEOH
PHDQVRIHJUHVVOLJKWLQJDQGH[LWVLJQVZKLFK  XQGHU 6DIHW\ 3DUDPHWHU  0L[HG
SURYLGHV SURWHFWLRQ LQ WKH HYHQW RI SRZHU 2FFXSDQFLHVIRUILUHVDIHW\DQGJHQHUDOVDIHW\)RU
IDLOXUHWRWKHVLWHRUEXLOGLQJ EXLOGLQJV ZLWKRXW PL[HG RFFXSDQFLHV WKH YDOXH
™ 7KHUH DUH WKUHH FDWHJRULHV RI HJUHVV OLJKWLQJ VKDOO EH ]HUR )DFLOLWLHV LQ *URXS , RFFXSDQFLHV
7KHVH FDWHJRULHV DUH FRQVLVWHQW ZLWK WKH PHHWLQJ&DWHJRU\DVKDOOEHFRQVLGHUHGWRIDLOWKH
UHTXLUHPHQWVHVWDEOLVKHGE\WKH6%& HYDOXDWLRQ
™ &DWHJRU\ D LV DSSOLFDEOH ZKHQ WKHUH LV QR
™ 7KLV VHFWLRQ LV XVHG WR HYDOXDWH PL[HG
HPHUJHQF\ SRZHU VRXUFH SURYLGHG IRU WKH
RFFXSDQFLHVLQDQH[LVWLQJEXLOGLQJDQGZKHWKHU
OLJKWLQJ LQ WKH PHDQV RI HJUHVV :LWKRXW DQ
WKH PHWKRG RI VHSDUDWLQJ PL[HG RFFXSDQFLHV
HPHUJHQF\SRZHUVRXUFHWRHQVXUHFRQWLQXHG
FRQIRUPV WR WKH UHTXLUHPHQWV RI 6%& 
LOOXPLQDWLRQRIWKHPHDQVRIHJUHVVWKHPHDQV
6HFWLRQ  ,I 6%&  6HFWLRQ  LV QRW
RIHJUHVV OLJKWLQJ DQG H[LW VLJQV ZRXOG QRW
FRPSOHWHO\ XQGHUVWRRG VHH WKH DVVRFLDWHG
SURYLGH DV UHOLDEOH D OHYHO RI VDIHW\ WR WKH
FRPPHQWDU\ EHIRUH SURFHHGLQJ ZLWK WKH
EXLOGLQJRFFXSDQWV)RUEXLOGLQJVLQZKLFKRQO\
HYDOXDWLRQ RI WKH H[LVWLQJ EXLOGLQJ LQ WKLV
RQH H[LW LV UHTXLUHG WKLV FDWHJRU\ UHSUHVHQWV
VHFWLRQ $OVR UHIHU WR WKH FRPPHQWDU\ WR
WKH ]HUREDVHG FULWHULD ZKLFK LV WKH OHYHO
6HFWLRQ
UHTXLUHGIRUQHZFRQVWUXFWLRQ
™ 7KLV VHFWLRQ LV DSSOLFDEOH RQO\ WR VHSDUDWHG
™ &DWHJRU\ E LV DSSOLFDEOH WR EXLOGLQJV WKDW DUH
PL[HG RFFXSDQFLHV ,I D EXLOGLQJ LV D VLQJOH
SURYLGHGZLWKDQHPHUJHQF\SRZHUVRXUFHIRU
RFFXSDQF\WKHDSSOLFDEOHYDOXHIRUWKLVVHFWLRQ
PHDQVRIHJUHVV LOOXPLQDWLRQ )RU EXLOGLQJV LQ
LV]HUR,IDQH[LVWLQJPL[HGRFFXSDQF\EXLOGLQJ
ZKLFKDPLQLPXPRIWZRH[LWVDUHUHTXLUHGWKLV
KDV QR ILUHUHVLVWDQFHUDWHG VHSDUDWLRQ
FDWHJRU\ UHSUHVHQWV WKH ]HUREDVHG FULWHULD
EHWZHHQWKHGLIIHUHQWXVHVRUWKHVHSDUDWLRQLV
ZKLFKLVWKHOHYHOUHTXLUHGIRUQHZFRQVWUXFWLRQ
ILUHUHVLVWDQFH UDWHG IRU OHVV WKDQ  KRXU WKH
™ &DWHJRU\ F LV DSSOLFDEOH ZKHQ HPHUJHQF\
DSSOLFDEOHYDOXHLVDOVR]HUR7KHEXLOGLQJPXVW
SRZHULVSURYLGHGIRUPHDQVRIHJUHVVOLJKWLQJ
DOVR EH HYDOXDWHG LQ DFFRUGDQFH ZLWK 6HFWLRQ
DQG H[LW VLJQV LQ H[FHVV RI WKH PLQLPXP
 7KH ]HUREDVHG FDWHJRU\ IRU WKLV
UHTXLUHPHQWV IRU QHZ FRQVWUXFWLRQ 7KH
VHFWLRQ LV HTXLYDOHQW WR IXOO FRPSOLDQFH ZLWK
HPHUJHQF\ SRZHU UHTXLUHPHQWV IRU QHZ
FRQVWUXFWLRQDVVXPHDSRZHUIDLOXUHRFFXUVLQ

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

6%&6HFWLRQZKLFKLVWKHUHTXLUHPHQW DVVHPEO\DWWKHILUVWIORRUEHWZHHQWKH*URXS5
IRUQHZFRQVWUXFWLRQ RFFXSDQF\DQGWKH*URXS$RFFXSDQF\LV
™ 7KLV WDEOH DGGUHVVHV WKH UHODWLYH ULVN RI D DOVR  KRXUV &RQVLGHULQJ WKHVH EXLOGLQJ
EXLOGLQJ LQ RU FORVH WR FRPSOLDQFH ZLWK WKH FKDUDFWHULVWLFV WKH IROORZLQJ GHWHUPLQDWLRQV
SURYLVLRQV IRU VHSDUDWHG PL[HG RFFXSDQFLHV DUHPDGH
:KHUH PL[HG RFFXSDQFLHV DUH QRW VHSDUDWHG ™ %HFDXVH RI WKH SUHVHQFH RI DQ DXWRPDWLF
IURP HDFK RWKHU WKH ULVN IURP KD]DUGV LV VSULQNOHU V\VWHP 6%&  7DEOH 
JUHDWHU LQ KLJKGHQVLW\ RFFXSDQFLHV VXFK DV UHTXLUHV D ILUHUHVLVWDQFH KDYH D KRXU
*URXSV$DQG$7KLVULVNLVDOVRJUHDWHULQ VHSDUDWLRQLWKDVDKRXUVHSDUDWLRQZKLFKLV
UHVLGHQWLDO RFFXSDQFLHV EHFDXVH RFFXSDQWV PRUHWKDQGRXEOHWKHPLQLPXP7KLVEXLOGLQJLV
PD\EHVOHHSLQJDQGPD\QRWEHIXOO\DOHUW)RU FODVVLILHGDV&DWHJRU\F$YDOXHRISRLQWVLV
WKLV UHDVRQ LQDGHTXDWH VHSDUDWLRQ LV JLYHQ DZDUGHGWRERWKRFFXSDQFLHV
JUHDWHUQHJDWLYHYDOXHV,QEXLOGLQJVZLWKORZHU
RFFXSDQWORDGV DQGZKHUHWKH RFFXSDQWVDUH 
DOHUWWKHULVNVDUHUHODWLYHO\ORZHU  &DWHJRULHV  7KH FDWHJRULHV IRU
™ 1RWH D SHUPLWV OLQHDU LQWHUSRODWLRQ RI WKH PL[HGRFFXSDQFLHVDUH
FRUUHVSRQGLQJ YDOXHV LQ HDFK FDWHJRU\ )RU 
H[DPSOHDQXQVSULQNOHUHG*URXS%*URXS)  &DWHJRU\ D²2FFXSDQFLHV VHSDUDWHG E\
PL[HG RFFXSDQF\ EXLOGLQJ LV VHSDUDWHG ZLWK D PLQLPXPKRXUILUHEDUULHUVRUPLQLPXP
KRXU ILUHUHVLVWDQFHUDWHG DVVHPEO\ )URP KRXUKRUL]RQWDODVVHPEOLHVRUERWK
6%&  7DEOH  WKH UHTXLUHG ILUH  &DWHJRU\ E²6HSDUDWLRQV EHWZHHQ
UHVLVWDQFH UDWLQJ RI WKH VHSDUDWLRQ EHWZHHQ D RFFXSDQFLHVLQDFFRUGDQFHZLWK6HFWLRQ
*URXS % DQG D *URXS ) RFFXSDQF\ IRU
RI6%&
&DWHJRU\ELVKRXUV6LQFHWKHUDWLQJWKDWLV
SURYLGHGLVRQO\KRXUDQLQWHUSRODWLRQKDOIZD\  &DWHJRU\ F²6HSDUDWLRQV EHWZHHQ
EHWZHHQ &DWHJRU\ D DQG &DWHJRU\ E FDQ EH RFFXSDQFLHVKDYLQJDILUHUHVLVWDQFHUDWLQJRI
XVHG7KHUHVXOWLQJSRLQWVDUH QRW OHVV WKDQ WZLFH WKDW UHTXLUHG E\ 6HFWLRQ
™ ([DPSOH RI6%&
™ $WKUHHVWRU\EXLOGLQJKDVD*URXS0PHUFDQWLOH
™ 7KLV VHFWLRQ DGGUHVVHV WKUHH GLIIHUHQW
RFFXSDQF\RQWKHILUVWIORRUDQGWKHXSSHUWZR
FRQGLWLRQV
VWRULHV DUH *URXS 5 UHVLGHQWLDO RFFXSDQFLHV
™ &DWHJRU\ D LV DSSOLFDEOH ZKHQ WKH UDWLQJ
7KH EXLOGLQJ LV 7\SH 9% FRQVWUXFWLRQ  P 
EHWZHHQ PL[HG RFFXSDQFLHV LV OHVV WKDQ
SHU IORRU ,W LV IXOO\ VSULQNOHUHG DQG RQO\ 
VSHFLILHGLQ6%&6HFWLRQEXWLVDILUH
SHUFHQWRIWKHSHULPHWHULVDFFHVVLEOH$OWKRXJK
EDUULHU ZLWK D PLQLPXP KRXU ILUHUHVLVWDQFH
7\SH 9% FRQVWUXFWLRQ LV QRW UHTXLUHG WR EH
UDWLQJ
SURWHFWHGWKH*URXS0RFFXSDQF\RQWKHILUVW
™ &DWHJRU\ E LV DSSOLFDEOH ZKHQ WKH VHSDUDWLRQ
IORRULVVHSDUDWHGIURPWKH*URXS5RFFXSDQF\
EHWZHHQ RFFXSDQFLHV LV LQ DFFRUGDQFH ZLWK
RQ WKH VHFRQG IORRU ZLWK D KRXU ILUH
6%&  6HFWLRQ  IRU ILUHUHVLVWDQFH
UHVLVWDQFHUDWHG IORRUFHLOLQJ DVVHPEO\ ,Q WKLV
UDWLQJV
FDVH6%&7DEOH UHTXLUHVDKRXU
™ &DWHJRU\ F LV DSSOLFDEOH ZKHQ WKH ILUH
ILUHUHVLVWDQFH UDWLQJ EHFDXVH WKH EXLOGLQJ LV
UHVLVWDQFHUDWLQJWKDWVHSDUDWHVRFFXSDQFLHVLQ
HTXLSSHG WKURXJKRXW ZLWK DQ DXWRPDWLF
DQ H[LVWLQJ EXLOGLQJ LV QR OHVV WKDQ WZLFH WKH
VSULQNOHU V\VWHP LQ DFFRUGDQFH ZLWK 6%& 
UDWLQJ UHTXLUHG E\ 6%&  6HFWLRQ 
6HFWLRQ7KHKRXUUDWLQJSURYLGHGLVWZLFH
&DWHJRU\ F JLYHV ERQXV SRLQWV RU LQFUHDVHG
WKDW UHTXLUHG WKHUHIRUH WKLV EXLOGLQJ TXDOLILHV
FUHGLWV WR H[LVWLQJ EXLOGLQJV WKDW KDYH KLJKHU
IRU&DWHJRU\F$YDOXHRISRLQWVLVDVVLJQHG
ILUHUHVLVWDQFHUDWLQJV
WRWKHUHVLGHQWLDOSRUWLRQRIWKHEXLOGLQJDQGD
™ 6HFWLRQGRHVQRWUHTXLUHIXOOFRPSOLDQFH
YDOXHRISRLQWVLVDVVLJQHGWRWKHPHUFDQWLOH
ZLWK DOO RI 6%&  6HFWLRQ  6HFWLRQ
SRUWLRQ VHH 6HFWLRQ  IRU FRPPHQWDU\
 HYDOXDWHV ZKHWKHU WKH H[LVWLQJ
DERXWPL[HGXVHV
EXLOGLQJ¶V FRPSOLDQFH ZLWK 6%&  6HFWLRQ
™ ([DPSOH
 SURYLGHV UHODWLYH VDIHW\ ZLWKLQ WKH
™ $ IRXUVWRU\ EXLOGLQJ LV 7\SH ,,% FRQVWUXFWLRQ
EXLOGLQJ,IWKHEXLOGLQJGRHVFRPSO\ZLWK 6%&
DQGLVIXOO\VSULQNOHUHG,WKDVPSHUIORRU
 6HFWLRQ  6HFWLRQ 
ZLWKDSHUFHQWRSHQSHULPHWHU7KHEXLOGLQJ
DFNQRZOHGJHV WKDW WKHUH LV QR EDVLV IRU
LVWREHD*URXS5KRWHOH[FHSWIRUDSRUWLRQ
DVVLJQLQJ QHJDWLYH SRLQWV QRU LV WKHUH DQ\
RIWKHILUVWIORRUZKLFKZLOOEHXVHGDVD*URXS
EDVLV IRU DVVLJQLQJ SRVLWLYH SRLQWV IRU VDIHW\
$ QLJKWFOXE RFFXS\LQJ  P $OWKRXJK WKH
WKHUHIRUHDQHXWUDO]HURYDOXHLVDVVLJQHG7KH
EXLOGLQJ LV XQSURWHFWHG 7\SH ,,% FRQVWUXFWLRQ
DSSURSULDWHYDOXHLVHQWHUHGLQ7DEOHIRU
WKH IORRUFHLOLQJ DVVHPEOLHV RI WKH ILUVW DQG
WKH6DIHW\3DUDPHWHURI0L[HG2FFXSDQFLHVRQ
VHFRQG IORRUV DUH  KRXUV DQG WKH ILUH EDUULHU
OLQH

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

 $XWRPDWLF VSULQNOHUV (YDOXDWH VSULQNOHU V\VWHPV LQ H[LVWLQJ EXLOGLQJV E\

WKHDELOLW\WRVXSSUHVVDILUHEDVHGRQWKHLQVWDOODWLRQ SURYLGLQJ VXEVWDQWLDO QHJDWLYH DQG SRVLWLYH
RIDQDXWRPDWLFVSULQNOHUV\VWHPLQDFFRUGDQFHZLWK SRLQWV
VHFWLRQ  RI 6%&  ³5HTXLUHG ™ 7KH YDOXHV IRU VSULQNOHUV DUH JLYHQ LQ 7DEOH
 7KH DSSURSULDWH FUHGLW YDOXHV IURP
VSULQNOHUV´ VKDOO EH EDVHG RQ WKH UHTXLUHPHQWV RI
7DEOHDUHHQWHUHGLQ7DEOHIRU
WKLVFRGH8QGHUWKHFDWHJRULHVDQGRFFXSDQFLHVLQ WKH 6DIHW\ 3DUDPHWHU RI $XWRPDWLF 6SULQNOHUV
7DEOH  GHWHUPLQH WKH DSSURSULDWH YDOXH RQOLQHIRUERWKILUHVDIHW\)6DQG
DQGHQWHUWKDWYDOXHLQWR7DEOHXQGHU6DIHW\ JHQHUDOVDIHW\*6EXWRQO\RQHKDOIWKHYDOXH
3DUDPHWHU$XWRPDWLF6SULQNOHUVIRUILUH LVHQWHUHGXQGHUWKHPHDQVRIHJUHVV0(7KH
VDIHW\PHDQV RI HJUHVV GLYLGHG E\  DQG JHQHUDO RQHKDOI FUHGLW IRU HJUHVV LV DOORZHG EHFDXVH
VDIHW\+LJKULVHEXLOGLQJVGHILQHGLQ&KDSWHURI VRPHFUHGLWVIRUVSULQNOHUVDUHLQFRUSRUDWHGLQWR
6%&  WKDW XQGHUJR D FKDQJH RI RFFXSDQF\ WR WKH SDUDPHWHUV IRU PHDQVRIHJUHVV FDSDFLW\
*URXS 5 VKDOO EH HTXLSSHG WKURXJKRXW ZLWK DQ VHH 6HFWLRQ  GHDG HQGV VHH
DXWRPDWLF VSULQNOHU V\VWHP LQ DFFRUGDQFH ZLWK 6HFWLRQ  DQG PD[LPXP WUDYHO
GLVWDQFHWRDQH[LWVHH6HFWLRQ
VHFWLRQRI6%&DQG&KDSWHURI6%&
™ 7KLV WDEOH OLVWV WKH FUHGLW YDOXHV IRU WKH
)DFLOLWLHV LQ *URXS , RFFXSDQFLHV PHHWLQJ UHVSHFWLYH FDWHJRULHV RI 6HFWLRQ 
&DWHJRU\DEFRUIVKDOOEHFRQVLGHUHGWRIDLOWKH EDVHGRQWKHRFFXSDQF\EHLQJHYDOXDWHGLQWKH
HYDOXDWLRQ H[LVWLQJ EXLOGLQJ 7KH DVVHPEO\ RFFXSDQFLHV
™ 7KHVH SURYLVLRQV DUH XVHG WR GHWHUPLQH WKH FRQWDLQLQJ ODUJH FRPEXVWLEOH IXHO ORDGV ZLWK
DPRXQW RI FUHGLW WKDW FDQ EH DSSOLHG WR WKH ODUJH RFFXSDQW ORDGV DUH LQFOXGHG ZLWK WKRVH
HYDOXDWLRQ IRU WKH LQVWDOODWLRQ RI DQ DXWRPDWLF RFFXSDQFLHVFRQWDLQLQJODUJHIXHOORDGV7KHVH
VSULQNOHUV\VWHPLQDQH[LVWLQJEXLOGLQJ RFFXSDQFLHV UHSUHVHQW EXLOGLQJV ZKHUH
™ 7KHYDOXHRIVSULQNOHUSURWHFWLRQLVUHIOHFWHGLQ H[SHULHQFHKDVVKRZQWKDWDGHTXDWHVSULQNOHU
WKHDGGLWLRQDOFUHGLWDYDLODEOHLQWKLVSDUDPHWHU V\VWHPV VDYH OLYHV DQG ZKHUH DQ RQVLWH
RYHU DQG DERYH WKH EDVLF FUHGLWV WKDW DUH VSULQNOHU V\VWHP LV QHFHVVDU\ WR VXSSOHPHQW
SURYLGHGIRUEXLOGLQJKHLJKWLQ6HFWLRQ WKHORFDOILUHGHSDUWPHQWFDSDELOLWLHV
EXLOGLQJDUHDLQ6HFWLRQDQGPD[LPXP ™ *URXS$EXLOGLQJVDUHFRQWDLQHGLQDVHSDUDWH
WUDYHOGLVWDQFHWRDQH[LWLQ6HFWLRQ OLQHLQWKHWDEOHIRUGHWHUPLQLQJVSULQNOHUV\VWHP
7KURXJKRXW WKH FRGH DGGLWLRQDO FUHGLWV DUH YDOXHV7KLVRFFXSDQF\ZLWKLWVGHQVHO\SDFNHG
RIIHUHG IRU WKH XVH RI DQ DXWRPDWLF VSULQNOHU KLJK RFFXSDQW ORDGV LOOGHILQHG VHDWLQJ DQG
V\VWHP DLVOHDUUDQJHPHQWVDQGIDFLOLWLHVVHUYLFHVPXVW
™ 7KH HYDOXDWLRQ RI VSULQNOHUV LQ DQ H[LVWLQJ EHVHSDUDWHO\HYDOXDWHGWRDGHTXDWHO\PDWFKLWV
EXLOGLQJ LV EDVHG RQ ZKHWKHU DQ DXWRPDWLF KD]DUGV ZLWK VSULQNOHU V\VWHP UHTXLUHPHQWV
VSULQNOHUV\VWHPLVERWKUHTXLUHGDQGLQVWDOOHG 0RVTXHV DQG VFKRROV ZKLFK KDYH KLJK
7KH FULWHULD XVHG WR GHWHUPLQH ZKHQ DQ RFFXSDQW ORDGV EXW ORZ IXHO ORDGV DUH
DXWRPDWLFVSULQNOHUV\VWHPLVUHTXLUHGDUHWLHG FRPELQHGZLWKRWKHUORZIXHOORDGRFFXSDQFLHV
WRWKHVDPHUHTXLUHPHQWVIRUQHZFRQVWUXFWLRQ LQWKHODVWOLQHLWHPLQWKHWDEOH&DWHJRU\FLV
LQ6%&6HFWLRQ7KHWKUHVKROGVOLVWHG WKH]HUREDVHGFDWHJRU\7KHFDWHJRULHVWRWKH
LQ6%&6HFWLRQVWKURXJK OHIWRIWKLVFROXPQFRQWDLQQHJDWLYHYDOXHVWKDW
PXVW EH XVHG WR HYDOXDWH ZKHWKHU WKRVH GHILQHEXLOGLQJVDQGRFFXSDQFLHVWKDWZRXOGEH
FKDUDFWHULVWLFV DQG RFFXSDQFLHV DUH SUHVHQW UHTXLUHGWREHVSULQNOHUHGDVQHZFRQVWUXFWLRQ
DQG ZKHWKHU D VSULQNOHU V\VWHP ZRXOG EH EXW DUH QRW VSULQNOHUHG RU DUH SURYLGHG ZLWK
UHTXLUHGIRUQHZFRQVWUXFWLRQ LQDGHTXDWH VSULQNOHU V\VWHPV 7KH WKUHH
™ 7KH H[FHSWLRQV WR 6%&  6HFWLRQ  WKH FDWHJRULHV WR WKH ULJKW RI WKLV FROXPQ FRQWDLQ
UHTXLUHPHQWVIRUVWRULHVLQFOXGLQJEDVHPHQWV SRVLWLYH YDOXHV WKDW UHSUHVHQW EXLOGLQJV DQG
ZLWKRXW RSHQLQJV RI 6%&  6HFWLRQ RFFXSDQFLHV ZLWK VSULQNOHU V\VWHPV WKDW DUH
DQGWKHVXSSUHVVLRQUHTXLUHPHQWV GHHPHG DGHTXDWH RU FRPSO\ ZLWK FXUUHQW
IRU FRYHUHG PDOO EXLOGLQJV KLJKULVH EXLOGLQJV VWDQGDUGVDQGUHTXLUHPHQWV
SXEOLF JDUDJHV DQG XQOLPLWHG DUHD EXLOGLQJV 
PXVW DOVR EH HYDOXDWHG 7KH GHWHUPLQDWLRQ RI  &DWHJRULHV  7KH FDWHJRULHV IRU
ZKHWKHUVSULQNOHUVDUHUHTXLUHGLQDEXLOGLQJRU
DXWRPDWLFVSULQNOHUV\VWHPSURWHFWLRQDUH
DSRUWLRQRIDEXLOGLQJPXVWEHGRQHWRFRUUHFWO\
GHWHUPLQH WKH FDWHJRU\ DSSOLFDEOH WR WKH 
H[LVWLQJEXLOGLQJ  &DWHJRU\ D²6SULQNOHUV DUH UHTXLUHG
™ 7KHVHJXLGHOLQHVIRUVSULQNOHUVDOORZIRUDPRUH WKURXJKRXW VSULQNOHU SURWHFWLRQ LV QRW
HTXLWDEOHHYDOXDWLRQRIWKHFRQWULEXWLRQ RIWKDW SURYLGHGRUWKHVSULQNOHUV\VWHPGHVLJQLVQRW
IHDWXUH WR RYHUDOO EXLOGLQJ VDIHW\ 7KLV IDFWRU DGHTXDWH IRU WKH KD]DUG SURWHFWHG LQ
HQFRXUDJHV WKH LQVWDOODWLRQ RI DXWRPDWLF DFFRUGDQFHZLWKVHFWLRQRI6%&

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

 &DWHJRU\ E²6SULQNOHUV DUH UHTXLUHG LQ D PHUFDQWLOH EXLOGLQJ PD\ KDYH RQH ILUH DUHD
SRUWLRQRIWKHEXLOGLQJVSULQNOHUSURWHFWLRQLV H[FHHGLQJ  P DQG UHTXLUH VSULQNOHUV ,Q
QRWSURYLGHGRUWKHVSULQNOHUV\VWHPGHVLJQLV ERWK FDVHV WKH EXLOGLQJV DUH ZLWKRXW DQ
QRW DGHTXDWH IRU WKH KD]DUG SURWHFWHG LQ DXWRPDWLF VSULQNOHU V\VWHP RU WKH VSULQNOHU
V\VWHPV WKDW DUH LQ SODFH DUH LQDGHTXDWH DQG
DFFRUGDQFHZLWKVHFWLRQRI6%&
GR QRWFRPSO\ZLWKWKHWHFKQLFDO SURYLVLRQVRI
 &DWHJRU\F²6SULQNOHUVDUHQRWUHTXLUHGQRQH WKH FRGH 6LQFH RQO\ SRUWLRQV RI WKH EXLOGLQJV
DUHSURYLGHG DUH UHTXLUHG WR EH VSULQNOHUHG WKH QHJDWLYH
 &DWHJRU\ G²6SULQNOHUV DUH UHTXLUHG LQ D VSULQNOHU V\VWHP YDOXHV IRU WKLV FDWHJRU\ LQ
SRUWLRQ RI WKH EXLOGLQJ VSULQNOHUV DUH 7DEOH  DUH H[DFWO\ KDOI RI WKH
SURYLGHG LQ VXFK SRUWLRQ WKH V\VWHP LV RQH &DWHJRU\DYDOXHV
WKDW FRPSOLHG ZLWK WKH FRGH DW WKH WLPH RI ™ &DWHJRU\FLVWKH]HUREDVHGFDWHJRU\IRUWKLV
LQVWDOODWLRQDQGLVPDLQWDLQHGDQGVXSHUYLVHG VDIHW\ SDUDPHWHU 7KH H[LVWLQJ EXLOGLQJ LV QRW
LQDFFRUGDQFHZLWKVHFWLRQRI6%& UHTXLUHG E\ 6%&  6HFWLRQ  WR EH
 &DWHJRU\ H²6SULQNOHUV DUH UHTXLUHG VSULQNOHUHGDQGQRVSULQNOHUV\VWHPLVSURYLGHG
6XFK EXLOGLQJV DUH QHLWKHU SHQDOL]HG QRU
WKURXJKRXW VSULQNOHUV DUH SURYLGHG
UHZDUGHGE\7DEOH
WKURXJKRXW LQ DFFRUGDQFH ZLWK &KDSWHU  RI ™ &DWHJRU\ G LV VLPLODU WR &DWHJRU\ E EHFDXVH
6%& RQO\DSRUWLRQRIWKHH[LVWLQJEXLOGLQJLVUHTXLUHG
 &DWHJRU\ I²6SULQNOHUV DUH QRW UHTXLUHG E\6%& 6HFWLRQWREHVSULQNOHUHG,Q
WKURXJKRXW VSULQNOHUV DUH SURYLGHG WKLVFDVHWKHUHLVDVSULQNOHUV\VWHPLQSODFHLQ
WKURXJKRXW LQ DFFRUGDQFH ZLWK &KDSWHU  RI WKDWSRUWLRQRIWKHEXLOGLQJDQGWKHV\VWHPZDV
6%& GHVLJQHGDWWKHWLPHRILWVLQVWDOODWLRQWRFRPSO\
ZLWK WKH UHTXLUHPHQWV RI DQ HDUOLHU HGLWLRQ RI
™ 6L[ FDWHJRULHV DUH GHILQHG LQ WKLV VHFWLRQ IRU 6%&6HFWLRQ$QH[DPSOHRIWKLVLVD
HYDOXDWLQJWKHDXWRPDWLFVSULQNOHUV\VWHPLQDQ VSULQNOHU V\VWHP GHVLJQHG WR FRPSO\ ZLWK WKH
H[LVWLQJEXLOGLQJ7KHVHFDWHJRULHVDGGUHVVDOO K\GUDXOLFGHVLJQFULWHULDRI WKHHGLWLRQ RI
DVSHFWV IURP H[LVWLQJ EXLOGLQJV WKDW DUH 1)3$  IRU DQ RUGLQDU\ *URXS  KD]DUG $V
XQVSULQNOHUHGEXWDUHUHTXLUHGWREHVSULQNOHUHG ORQJ DV WKLV H[LVWLQJ VSULQNOHU V\VWHP LV VWLOO
LIQHZFRQVWUXFWLRQWRH[LVWLQJEXLOGLQJVWKDWDUH SURSHUO\ PDLQWDLQHG DQG VXSHUYLVHG WKH
VSULQNOHUHG DQG DUH QRW UHTXLUHG WR EH EXLOGLQJ TXDOLILHV IRU WKH VPDOO SRVLWLYH YDOXHV
VSULQNOHUHG LI QHZ FRQVWUXFWLRQ 7KHVH OLVWHGLQ7DEOH
FDWHJRULHV UHGXFH WKH LPSDFW RI SURYLGLQJ ™ &DWHJRU\ H DGGUHVVHV H[LVWLQJ EXLOGLQJV WKDW
VSULQNOHUSURWHFWLRQUHTXLUHGE\&KDSWHURIWKH DUH UHTXLUHG E\ WKH SURYLVLRQV RI 6%& 
6%&WREHVSULQNOHUHGLQQHZFRQVWUXFWLRQ &KDSWHUWREHVSULQNOHUHGWKURXJKRXWDQGDUH
7KLV JUHDWHU UDQJH RI SRLQWV LQFUHDVHV WKH SURWHFWHG WKURXJKRXW E\ D SURSHUO\ GHVLJQHG
IOH[LELOLW\LQWKHXVHRIWKLVHYDOXDWLRQPHWKRG LQVWDOOHG DQG VXSHUYLVHG VSULQNOHU V\VWHP
™ &DWHJRU\ D LQFOXGHV EXLOGLQJV RU RFFXSDQFLHV $OWKRXJKWKLVFDWHJRU\PRUHFORVHO\UHSUHVHQWV
WKDWZRXOGEHUHTXLUHGE\WKHQHZFRQVWUXFWLRQ WKH UHTXLUHPHQWV IRU QHZ FRQVWUXFWLRQ
FULWHULD RI 6%&  6HFWLRQ  WR EH PRGHUDWHSRVLWLYHYDOXHVDUHDZDUGHGE\7DEOH
VSULQNOHUHGWKURXJKRXWWKHEXLOGLQJ&DWHJRU\D  7KH HYDOXDWLRQ UHZDUGV H[LVWLQJ
EXLOGLQJV DUH SURYLGHG ZLWK HLWKHU QR VSULQNOHU EXLOGLQJVWKDWDUHVSULQNOHUHGZLWKKLJKHUSRLQWV
V\VWHPRURQHWKDWLVLQDGHTXDWHDQGGRHVQRW ™ &DWHJRU\ILVWKHKLJKHVWOHYHORISURWHFWLRQDQG
SURYLGH WKH UHTXLUHG OHYHO RI SURWHFWLRQ 7R LVUHZDUGHGZLWKPD[LPXPSRVLWLYHSRLQWVLQWKH
HYDOXDWHWKHH[LVWLQJVSULQNOHUV\VWHPDWUDLQHG DFFRPSDQ\LQJ WDEOH ([LVWLQJ EXLOGLQJV ZKLFK
ILUH SURWHFWLRQ HQJLQHHU VKRXOG HYDOXDWH WKH DUHQRWUHTXLUHGE\6%&6HFWLRQWREH
V\VWHP¶V GHVLJQ DJDLQVW WKH DSSOLFDEOH VSULQNOHUHG EXW DUH YROXQWDULO\ SURYLGHG ZLWK D
UHIHUHQFHGVWDQGDUGV7KLVLVQRWWKHVDPHW\SH IXOO\ GHVLJQHG LQVWDOOHG DQG VXSHUYLVHG
RIFRQVLGHUDWLRQQHHGHG LQ&DWHJRU\GZKHUH V\VWHP SURYLGH DQ DGGHG OHYHO RI SURWHFWLRQ
WKH H[LVWLQJ V\VWHP DFWXDOO\ PHHWV DOO RI WKH WKDWMXVWLILHVVXEVWDQWLDOERQXVSRLQWVWKDWPD\
UHTXLUHPHQWV RI DQ\ HDUOLHU HGLWLRQ RI WKH XOWLPDWHO\ GHWHUPLQH ZKHWKHU DQ H[LVWLQJ
DSSOLFDEOHUHIHUHQFHGVWDQGDUGV7KLVFDWHJRU\ EXLOGLQJPHHWVLWVPDQGDWRU\VDIHW\VFRUHV
LV FRQVLGHUHG WKH ORZHVW DFFHSWDEOH OHYHO RI
FRPSOLDQFH DQG LV WKHUHIRUH DVVRFLDWHG ZLWK  6WDQGSLSHV(YDOXDWHWKHDELOLW\WR
WKHODUJHVWQHJDWLYHYDOXHVLQ7DEOH LQLWLDWHDWWDFNRQDILUHE\DPDNLQJVXSSO\RIZDWHU
™ &DWHJRU\ELVDSSOLFDEOHZKHQRQO\DSRUWLRQRI DYDLODEOH UHDGLO\ WKURXJK WKH LQVWDOODWLRQ RI
WKH H[LVWLQJ EXLOGLQJ LV UHTXLUHG E\ WKH VWDQGSLSHVLQDFFRUGDQFHZLWK6HFWLRQRI6%&
SURYLVLRQV RI 6%&  6HFWLRQ  WR EH  ³5HTXLUHG 6WDQGSLSHV´ VKDOO EH EDVHGRQWKH
VSULQNOHUHG )RU H[DPSOH D PXOWLSOH VWRU\
UHTXLUHPHQWVRIWKH6%&8QGHUWKHFDWHJRULHV
EXLOGLQJ PD\KDYHWZR RILWVVWRULHVTXDOLI\DV
ZLQGRZOHVVVWRULHVWKDWUHTXLUHVSULQNOHUVRUD DQGRFFXSDQFLHVLQ7DEOHGHWHUPLQHWKH

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

DSSURSULDWH YDOXH DQG HQWHU WKDW YDOXH LQWR 7DEOH  6WDQGSLSH FDWHJRULHV  7KH
 XQGHU 6DIHW\ 3DUDPHWHU  FDWHJRULHVIRUVWDQGSLSHV\VWHPVDUH
6WDQGSLSHV IRU ILUH VDIHW\ PHDQV RI HJUHVV DQG 
JHQHUDOVDIHW\  &DWHJRU\ D²6WDQGSLSHV DUH UHTXLUHG
™ 7KHVH SURYLVLRQV DUH XVHG WR GHWHUPLQH WKH
VWDQGSLSH LV QRW SURYLGHG RU WKH VWDQGSLSH
DPRXQW RI FUHGLW WKDW FDQ EH DSSOLHG WR WKH V\VWHP GHVLJQ LV QRW LQ FRPSOLDQFH ZLWK
HYDOXDWLRQ IRU WKH LQVWDOODWLRQ RI D VWDQGSLSH 6HFWLRQRI6%&
V\VWHPLQDQH[LVWLQJEXLOGLQJ6WDQGSLSHVDUH  &DWHJRU\ E²6WDQGSLSHV DUH QRW UHTXLUHG
SURYLGHGDVDWRROIRUXVHE\ILUHILJKWHUVWRDLG QRQHDUHSURYLGHG
WKHLU ILUHILJKWLQJ RSHUDWLRQV 7KH JHQHUDO  &DWHJRU\ F²6WDQGSLSHV DUH UHTXLUHG
FRQVHQVXVLVWKDWWKH\DUHQRWUHFRPPHQGHGRU VWDQGSLSHV DUH SURYLGHG LQ DFFRUGDQFH ZLWK
LQWHQGHG IRU XVH E\ XQWUDLQHG EXLOGLQJ 6HFWLRQRI6%&
RFFXSDQWV  &DWHJRU\ G²6WDQGSLSHV DUH QRW UHTXLUHG
™ 7KH HYDOXDWLRQ RI VWDQGSLSH V\VWHPV LQ DQ
VWDQGSLSHV DUH SURYLGHG LQ DFFRUGDQFH ZLWK
H[LVWLQJ EXLOGLQJ PXFK OLNH WKDW IRU DXWRPDWLF
VSULQNOHU V\VWHPV LV EDVHG RQ ZKHWKHU D
6HFWLRQRI6%&
VWDQGSLSHV\VWHPLVERWKUHTXLUHGDQGLQVWDOOHG ™ )RXU FDWHJRULHV DUH GHILQHG LQ WKLV VHFWLRQ IRU
7KH FULWHULD XVHG WR GHWHUPLQH ZKHQ D HYDOXDWLQJWKHVWDQGSLSHV\VWHPLQDQH[LVWLQJ
VWDQGSLSH V\VWHP LV UHTXLUHG DUH WLHG WR WKH EXLOGLQJ7KHVHFDWHJRULHVDGGUHVVDOODVSHFWV
VDPHUHTXLUHPHQWVIRUQHZFRQVWUXFWLRQLQ6%& IURP H[LVWLQJ EXLOGLQJV WKDW GR QRW KDYH
6HFWLRQ7KHWKUHVKROGVOLVWHGLQ6%& VWDQGSLSHV EXW ZRXOG EH UHTXLUHG WR KDYH
6HFWLRQVWKURXJKPXVWEH VWDQGSLSHV LI QHZ FRQVWUXFWLRQ WR H[LVWLQJ
XVHGWRHYDOXDWHZKHWKHUWKRVHFKDUDFWHULVWLFV EXLOGLQJV WKDW KDYH VWDQGSLSHV DQG ZRXOG QRW
DQG RFFXSDQFLHV DUH SUHVHQW DQG ZKHWKHU D EH UHTXLUHG WR KDYH VWDQGSLSHV LI QHZ
VWDQGSLSH V\VWHP ZRXOG EH UHTXLUHG IRU QHZ FRQVWUXFWLRQ
FRQVWUXFWLRQ7KHVHSDUDPHWHUVIRUVWDQGSLSHV ™ &DWHJRU\ D LV DSSOLFDEOH WR EXLOGLQJV RU
HQFRXUDJHWKHLQVWDOODWLRQRIVWDQGSLSHV\VWHPV RFFXSDQFLHVWKDWZRXOGEHUHTXLUHGE\WKHQHZ
LQ H[LVWLQJ EXLOGLQJV E\ SURYLGLQJ VXEVWDQWLDO FRQVWUXFWLRQFULWHULDWREHSURYLGHGZLWKD&ODVV
QHJDWLYHDQGSRVLWLYHSRLQWV , ,, RU ,,, VWDQGSLSH V\VWHP &DWHJRU\ D
™ 7KHYDOXHVIRUVWDQGSLSHV\VWHPVDUHJLYHQLQ EXLOGLQJVDUHSURYLGHGZLWKHLWKHUQRVWDQGSLSH
7DEOH7KH DSSURSULDWHYDOXHVIURP V\VWHPRURQHWKDWLVLQDGHTXDWHDQGGRHVQRW
7DEOHDUHHQWHUHGLQ7DEOHIRU FRPSO\ ZLWK WKH DSSOLFDEOH GHVLJQ DQG
WKH 6DIHW\ 3DUDPHWHU RI 6WDQGSLSHV RQ OLQH LQVWDOODWLRQFULWHULDRI6%&6HFWLRQ7R
IRUILUHVDIHW\)6PHDQVRIHJUHVV HYDOXDWH WKH H[LVWLQJ VWDQGSLSH V\VWHP D
0(DQGJHQHUDOVDIHW\*6 WUDLQHGILUHSURWHFWLRQHQJLQHHUVKRXOGHYDOXDWH
™ 7KLV WDEOH OLVWV WKH FUHGLW YDOXHV IRU WKH WKH V\VWHP¶V GHVLJQ DJDLQVW WKH DSSOLFDEOH
UHVSHFWLYH FDWHJRULHV RI 6HFWLRQ  UHIHUHQFHG VWDQGDUGV 7KLV FDWHJRU\ LV
EDVHGRQWKHRFFXSDQF\EHLQJHYDOXDWHGLQWKH FRQVLGHUHG WKH ORZHVW DFFHSWDEOH OHYHO RI
H[LVWLQJEXLOGLQJ7KHJURXSLQJRIRFFXSDQFLHV FRPSOLDQFH DQG LV WKHUHIRUH DVVRFLDWHG ZLWK
LVWKHVDPHDVSURYLGHGIRUWKHVSULQNOHUV\VWHP WKHODUJHVWQHJDWLYHYDOXHVLQ7DEOH
SDUDPHWHU VLQFH WKH QHHG IRU DQG YDOXH RI D &DWHJRU\DLVQRWDQRSWLRQLQXQVSULQNOHUHGRU
VWDQGSLSH V\VWHP OLNH VSULQNOHU V\VWHPV LV D LQDGHTXDWHO\ VSULQNOHUHG EXLOGLQJV WKDW ZRXOG
IXQFWLRQRIWKHOLNHOLKRRGDQGSRWHQWLDOVHYHULW\ EHUHTXLUHGWREHSDUWLDOO\RUIXOO\VSULQNOHUHGDV
RIDILUHWKDWWKHYDULRXVRFFXSDQFLHVSUHVHQW QHZFRQVWUXFWLRQ7KLVLVUHIOHFWHGLQ1RWHDWR
™ &DWHJRU\DFRQWDLQVQHJDWLYHYDOXHVWKDWGHILQH 7DEOHZKLFKLQGLFDWHVWKDW&DWHJRU\
EXLOGLQJV DQG RFFXSDQFLHV WKDW ZRXOG EH DFDQQRWEHXVHGLI&DWHJRU\DRUELVXVHGLQ
UHTXLUHG WR KDYH D VWDQGSLSH V\VWHP DV QHZ WKH DXWRPDWLF VSULQNOHU SDUDPHWHU LQ 6HFWLRQ
FRQVWUXFWLRQ EXW DUH QRW SURYLGHG ZLWK RQH RU 7KHHIIHFWRIWKLVSURYLVLRQLVWKDWWKH
DUHSURYLGHGZLWKDVWDQGSLSHV\VWHPWKDWLVQRW DEVHQFH RI ERWK VSULQNOHUV DQG VWDQGSLSHV LV
GHVLJQHGDQGLQVWDOOHGLQDFFRUGDQFHZLWKWKH XQDFFHSWDEOH LQ EXLOGLQJV WKDW ZRXOG EH
GHVLJQ DQG LQVWDOODWLRQ UHTXLUHPHQWV RI 6%& UHTXLUHG WR SURYLGH ERWK VSULQNOHUV DQG
 6HFWLRQ  IRU QHZ FRQVWUXFWLRQ VWDQGSLSHV 2QH RU WKH RWKHU V\VWHP PXVW EH
&DWHJRU\ELVWKH]HUREDVHGFDWHJRU\ SURYLGHG LQ RUGHU WR FRPSOHWH WKLV HYDOXDWLRQ
™ &DWHJRULHVFDQGGFRQWDLQSRVLWLYHYDOXHVWKDW PHWKRG,IRQO\RQHRIWKHUHTXLUHGV\VWHPVLV
UHSUHVHQW EXLOGLQJV DQG RFFXSDQFLHV ZLWK SURYLGHGQHJDWLYHSRLQWVZLOOEHDFFUXHGLQWKH
VWDQGSLSHV\VWHPVWKDW DUHGHHPHG DGHTXDWH SDUDPHWHU IRU WKH RWKHU V\VWHP EXW LW LV VWLOO
RU FRPSO\ ZLWK FXUUHQW GHVLJQ VWDQGDUGV DQG SRVVLEOH WR KDYH DQ RYHUDOO SDVVLQJ VFRUH IRU
LQVWDOODWLRQUHTXLUHPHQWV WKH EXLOGLQJ 7KLV UHIOHFWV WKH FRQFHSW WKDW
ZKLOH ERWK V\VWHPV DUH UHTXLUHG IRU QHZ

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

FRQVWUXFWLRQLWLVSHUPLVVLEOHWRRQO\KDYHRQH ORZHVWVFRUHPXVWEHDVVLJQHGWRWKHEXLOGLQJ
LQDQH[LVWLQJEXLOGLQJEHFDXVHWKHDEVHQFHRI RU ILUH DUHD IRU WKH VSHFLILF XVH DUHDV )RU
WKHRWKHUV\VWHPZLOOKDYHSRVLWLYHDWWULEXWHVRU H[DPSOHDQH[LVWLQJ*URXS(KLJKVFKRROKDV
IHDWXUHVWKDWRIIVHWWKHQHJDWLYHSRLQWVDFFUXHG WKUHH ODERUDWRU\ FODVVURRPV ,I WZR RI WKH
E\LWVDEVHQFH FODVVURRPV DUH SURWHFWHG ZLWK OLPLWHG DUHD
™ &DWHJRU\ELVWKH]HUREDVHGFDWHJRU\IRUWKLV VSULQNOHU V\VWHPV DQG VHSDUDWHG ZLWK
VDIHW\ SDUDPHWHU 7KH H[LVWLQJ EXLOGLQJ LV QRW FRQVWUXFWLRQFDSDEOHRIUHVLVWLQJWKHSDVVDJHRI
UHTXLUHG E\ 6%&  6HFWLRQ  WR KDYH D VPRNH DQG WKH WKLUG URRP LV QRW SURWHFWHG LQ
VWDQGSLSHV\VWHPDQG QR VWDQGSLSHV\VWHP LV WKHVDPHPDQQHUWKHORZHVWVFRUHIRUDOOWKH
SURYLGHG6XFKEXLOGLQJVDUHQHLWKHUSHQDOL]HG FODVVURRPV LV GHWHUPLQHG E\ WKH VLQJOH
QRUUHZDUGHGE\7DEOH XQSURWHFWHGFODVVURRP,IWKHEXLOGLQJGHVLJQHU
™ &DWHJRU\ F LV DSSOLFDEOH WR EXLOGLQJV WKDW DUH FKRRVHVWRWUHDWWKHVSHFLILFRFFXSDQF\DUHDV
UHTXLUHG E\ 6%&  6HFWLRQ  WR KDYH D DV VHSDUDWH RFFXSDQFLHV WKH SURYLVLRQV RI
VWDQGSLSH V\VWHP DQG DUH SURYLGHG ZLWK WKH 6HFWLRQ  DUH DSSOLFDEOH DQG D ]HUR LV
FODVVVWDQGSLSHV\VWHPWKDWZRXOGEHUHTXLUHG LQVHUWHG LQ 7DEOH  XQGHU 6DIHW\
IRU QHZ FRQVWUXFWLRQ DQG LV GHVLJQHG DQG 3DUDPHWHU  ,QFLGHQWDO 8VH $UHDV
LQVWDOOHG LQ DFFRUGDQFH ZLWK 6%&  6HFWLRQ 6HH7DEOH,QFLGHQWDO8VH$UHDV
 $OWKRXJK WKLV FDWHJRU\ PRUH FORVHO\ ™ 7KLV WDEOH SURYLGHV D PDWUL[ RI FKDUDFWHULVWLFV
UHSUHVHQWV WKH UHTXLUHPHQWV IRU QHZ DUUDQJHG LQ D IRUPDW RI URZV DQG FROXPQV IRU
FRQVWUXFWLRQ PRGHUDWH SRVLWLYH YDOXHV DUH GHWHUPLQLQJ YDOXHV IRU LQFLGHQWDO XVHV 7KH
DZDUGHG E\ 7DEOH  7KH HYDOXDWLRQ YDOXHV DUH LQVHUWHG LQWR WKH EXLOGLQJ VFRUH
UHZDUGV H[LVWLQJ EXLOGLQJV WKDW KDYH D VKHHW 7KH OHIWKDQG FROXPQ RI WKH WDEOH LV
FRQWHPSRUDU\ UHOLDEOH VWDQGSLSH V\VWHP ZLWK DUUDQJHGIRUWKHVHSDUDWLRQSURWHFWLRQVSHFLILHG
KLJKHUSRLQWV E\ 6%&  7DEOH  IRU D SDUWLFXODU
™ &DWHJRU\GLVWKHKLJKHVWOHYHORISURWHFWLRQDQG RFFXSDQF\URRP RUDUHD 6%&7DEOH 
LVUHZDUGHGZLWKPD[LPXPSRVLWLYHSRLQWVLQWKH PXVWILUVWEHFRQVXOWHGWRGHWHUPLQHWKHOHYHORI
DFFRPSDQ\LQJ WDEOH ([LVWLQJ EXLOGLQJV ZKLFK VHSDUDWLRQSURWHFWLRQ UHTXLUHG E\ WKH FRGH IRU
DUH QRW UHTXLUHG E\ 6%&  6HFWLRQ  WR QHZFRQVWUXFWLRQ7KLVVDPHHQWU\LVWKHQIRXQG
KDYH D VWDQGSLSH V\VWHP EXW DUH YROXQWDULO\ LQWKHOHIWKDQGFROXPQRI7DEOH7KH
SURYLGHG ZLWK D IXOO\ GHVLJQHG DQG LQVWDOOHG WRSURZUHSUHVHQWVWKHDFWXDOOHYHORISURWHFWLRQ
V\VWHP SURYLGH DQ DGGHG OHYHO RI SURWHFWLRQ WKDW LV SURYLGHG LQ WKH H[LVWLQJ EXLOGLQJ 7KH
WKDWMXVWLILHVVXEVWDQWLDOERQXVSRLQWV FRUUHVSRQGLQJXVHDUHDYDOXHLVUHDGDQGWKHQ
LQVHUWHG LQWR 7DEOH  XQGHU 6DIHW\
 ,QFLGHQWDO XVHV  (YDOXDWH WKH 3DUDPHWHU  ,QFLGHQWDO 8VH $UHDV
SURWHFWLRQ RI LQFLGHQWDO XVHV LQ DFFRUGDQFH ZLWK 9DOXHVRI]HURDUHDVVLJQHGWRDOODUUDQJHPHQWV
6HFWLRQRI6%&'RQRWLQFOXGHWKRVH WKDW UHSUHVHQW FRPSOLDQFH ZLWK WKH
ZKHUH WKLV FRGH UHTXLUHV DXWRPDWLF VSULQNOHU UHTXLUHPHQWV IRU QHZ FRQVWUXFWLRQ 1HJDWLYH
V\VWHPVWKURXJKRXWWKHEXLOGLQJLQFOXGLQJFRYHUHG YDOXHV DUH DVVLJQHG EDVHG RQ WKH GHJUHH RI
DQGRSHQPDOOEXLOGLQJVKLJKULVHEXLOGLQJVSXEOLF QRQFRPSOLDQFH ZLWK WKH UHTXLUHPHQWV IRU QHZ
JDUDJHV DQG XQOLPLWHG DUHD EXLOGLQJV $VVLJQ WKH FRQVWUXFWLRQ
ORZHVWVFRUHIURP7DEOHIRUWKHEXLOGLQJ  6PRNH FRPSDUWPHQWDWLRQ
RU IORRU DUHD EHLQJ HYDOXDWHG DQG HQWHU WKDW YDOXH (YDOXDWHWKHVPRNHFRPSDUWPHQWVIRUFRPSOLDQFH
LQWR 7DEOH  XQGHU 6DIHW\ 3DUDPHWHU ZLWK 6HFWLRQ  RI 6%&  8QGHU WKH
,QFLGHQWDO8VHVIRUILUHVDIHW\PHDQVRI FDWHJRULHV DQG RFFXSDQFLHV LQ 7DEOH 
HJUHVV DQG JHQHUDO VDIHW\ ,I WKHUH DUH QR VSHFLILF GHWHUPLQHWKHDSSURSULDWHVPRNHFRPSDUWPHQWDWLRQ
RFFXSDQF\DUHDVLQWKHEXLOGLQJRUIORRUDUHDEHLQJ YDOXH6&9DQGHQWHUWKDWYDOXHLQWR7DEOH
HYDOXDWHGWKHYDOXHVKDOOEH]HUR XQGHU 6DIHW\ 3DUDPHWHU  6PRNH
™ 7KLVVHFWLRQLQFOXGHVDQHYDOXDWLRQV\VWHPIRU &RPSDUWPHQWDWLRQIRUILUHVDIHW\PHDQVRIHJUHVV
WKH VHSDUDWLRQSURWHFWLRQ UHTXLUHPHQWV DQG JHQHUDO VDIHW\ )DFLOLWLHV LQ *URXS ,
LQGLFDWHG IRU LQFLGHQWDO XVHV LQ DQ H[LVWLQJ RFFXSDQFLHV PHHWLQJ &DWHJRU\ E RU F VKDOO EH
EXLOGLQJ7KLVHYDOXDWLRQLVEDVHGRQ6%& FRQVLGHUHGWRIDLOWKHHYDOXDWLRQ
7DEOH,IWKHEXLOGLQJGHVLJQHUFKRRVHV
WRVHSDUDWHSURWHFWWKHVPDOOURRPVRUDUHDVLQ ™ 7KLV VHFWLRQ DGGUHVVHV WKH LVVXH RI VPRNH
DQ H[LVWLQJ EXLOGLQJ LQ DFFRUGDQFH ZLWK WKLV FRPSDUWPHQWV ZKLFK DUH UHTXLUHG IRU QHZ
WDEOHWKHEXLOGLQJLVFODVVLILHGDFFRUGLQJWRLWV FRQVWUXFWLRQLQ*URXS,7KLVSURYLGHVVFRUHV
PDLQ XVH %HFDXVH VRPH H[LVWLQJ EXLOGLQJV WR IXOO\ HYDOXDWH *URXS , RFFXSDQFLHV XQGHU
PD\ KDYH EHHQ GHVLJQHG LQ WKLV IDVKLRQ DQ WKLVDOWHUQDWLYHPHWKRG
HYDOXDWLRQ SURFHGXUH KDV EHHQ DGGHG WR ™ 7KLV WDEOH OLVWV WKH FUHGLW YDOXHV IRU WKH
DFFRXQWIRUWKHOHYHORISURWHFWLRQSURYLGHG7KH UHVSHFWLYH FDWHJRULHV LQ WKH DUHD RI VPRNH

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

FRPSDUWPHQWV RI 6HFWLRQ  EDVHG RIWKHWKUHHFDWHJRULHVZKHQPXOWLSOLHGWRJHWKHU

RQ WKH RFFXSDQF\ EHLQJ HYDOXDWHG LQ WKH LV  RU JUHDWHU WKHQ WKH VPRNH FRPSDUWPHQW
H[LVWLQJEXLOGLQJ7KHJURXSLQJRIRFFXSDQFLHV IDLOVFRPSOLDQFH2EVHUYLQJWKHYDOXHVIRUHDFK
LQWKHWDEOHLVVLPSO\,DQGDOORIWKHUHVW$ RI WKHVH IDFWRUV ZLOO VKRZ WKDW WKH YDOXH IRU
%()05DQG67KHRQO\RFFXSDQF\WKDW &DWHJRU\FLQHDFKIDFWRULV7KHUHIRUHLIWKH
UHTXLUHVVPRNHFRPSDUWPHQWVLV*URXS,DQG FDWHJRU\ IRU DQ\ WZR RI WKH WKUHH IDFWRUV LV
WKHUHIRUHWKLVWDEOHHVWDEOLVKHVWKDWDTXDOLI\LQJ &DWHJRU\FZLWKWKHWKLUGIDFWRUEHLQJ&DWHJRU\
H[LVWLQJ*URXS,RFFXSDQF\PXVWKDYHVPRNH DWKHQWKHSURGXFWRIWKRVHIDFWRUVZRXOGEH
FRPSDUWPHQWVWKDWDUHDPD[LPXPRIP DQGFRPSOLDQFHKDVIDLOHG7KLVPHDQVWKDWIRU
7KH VFRUH LV  IRU WKRVH TXDOLI\LQJ H[LVWLQJ DQ\ FRPSDUWPHQW RQO\ RQH RI WKHVH WKUHH
*URXS , RFFXSDQFLHV DQG QRW SHUPLWWHG IRU IDFWRUV FDQ EH &DWHJRU\ F DQG ZKHQ WKDW
*URXS , RFFXSDQFLHV ZLWK ODUJHU VPRNH RFFXUV RQH RI WKH RWKHU IDFWRUV PXVW EH
FRPSDUWPHQWV &DWHJRU\D%\UHTXLULQJDPD[LPXPPXOWLSOHRI
WKHFRGHLVUHTXLULQJVRPHOHYHORIWUDGHRII
 &DWHJRULHV&DWHJRULHVIRUVPRNH RQWKHVHFDWHJRULHV
FRPSDUWPHQWVL]HDUH
 3DWLHQW DELOLW\ IRU VHOI
 &DWHJRU\ D²6PRNH FRPSDUWPHQW VL]H LV SUHVHUYDWLRQ(YDOXDWHWKHDELOLW\RIWKHSDWLHQWV
HTXDOWRRUOHVVWKDQP IRUVHOISUHVHUYDWLRQLQHDFKVPRNHFRPSDUWPHQWLQ
 &DWHJRU\ E²6PRNH FRPSDUWPHQW VL]H LV DQ HPHUJHQF\ 8QGHU WKH FDWHJRULHV DQG
JUHDWHUWKDQP RFFXSDQFLHV LQ 7DEOH  GHWHUPLQH WKH
 &DWHJRU\ F²6PRNH FRPSDUWPHQWV DUH QRW DSSURSULDWH YDOXH DQG HQWHU WKDW YDOXH LQ 7DEOH
SURYLGHG XQGHU6DIHW\3DUDPHWHU3DWLHQW
$ELOLW\ IRU 6HOISUHVHUYDWLRQ IRU PHDQV RI HJUHVV
™ 7KUHHFDWHJRULHVDUHSURYLGHGLQWKLVVHFWLRQIRU
DQGJHQHUDOVDIHW\
HYDOXDWLQJ VPRNH FRPSDUWPHQWV LQ *URXS ,
IDFLOLWLHV )RU *URXS , LI WKH VPRNH ™ 6HHWKHFRPPHQWDU\WR6HFWLRQ
FRPSDUWPHQW IDOOV LQ &DWHJRU\ E VPRNH
FRPSDUWPHQW WRR ODUJH RU &DWHJRU\ F QR  &DWHJRULHV   7KH FDWHJRULHV IRU
VPRNH FRPSDUWPHQW WKHQ WKH VPRNH SDWLHQWDELOLW\IRUVHOISUHVHUYDWLRQDUH
FRPSDUWPHQWIDLOVWKLVHYDOXDWLRQ 
 &DWHJRU\D²PRELOH3DWLHQWVDUHFDSDEOHRI
 3DWLHQW DELOLW\ FRQFHQWUDWLRQ VHOISUHVHUYDWLRQZLWKRXWDVVLVWDQFH
VPRNH FRPSDUWPHQW ORFDWLRQ DQG UDWLR WR  &DWHJRU\ F²QRW PRELOH 3DWLHQWV UHO\ RQ
DWWHQGDQW  ,Q , RFFXSDQFLHV WKH DELOLW\ RI DVVLVWDQFHIRUHYDFXDWLRQRUUHORFDWLRQ
SDWLHQWVWKHLUFRQFHQWUDWLRQDQGUDWLRWRDWWHQGDQWV  &DWHJRU\G²QRWPRYDEOH3DWLHQWVFDQQRWEH
VKDOOEHHYDOXDWHGDQGDSSOLHGLQDFFRUGDQFHZLWK HYDFXDWHGRUUHORFDWHG
WKLV VHFWLRQ (YDOXDWH HDFK VPRNH FRPSDUWPHQW
XVLQJ WKH FDWHJRULHV LQ 6HFWLRQV  ™ 7KLVVHFWLRQHVWDEOLVKHVWKHGLIIHUHQWFDWHJRULHV
DQGDQGHQWHUWKHYDOXHLQ IRUVFRULQJSDWLHQWDELOLW\LQD*URXS,VPRNH
FRPSDUWPHQW
7DEOH  7R GHWHUPLQH WKH VDIHW\ IDFWRU
PXOWLSO\WKHWKUHHYDOXHVWRJHWKHULIWKHVXPLVRU 
JUHDWHUFRPSOLDQFHKDVIDLOHG  3DWLHQW FRQFHQWUDWLRQ  (YDOXDWH
™ 7KLV VHFWLRQ DGGUHVVHV WKH LVVXH RI SDWLHQW WKH FRQFHQWUDWLRQ RI SDWLHQWV LQ HDFK VPRNH
VDIHW\ LQ D VPRNH FRPSDUWPHQW LQ *URXS , FRPSDUWPHQWXQGHU6HFWLRQ8QGHUWKH
IDFLOLWLHV 7KHUH DUH WKUHH IDFWRUV IRU SDWLHQW FDWHJRULHV DQG RFFXSDQFLHV LQ 7DEOH 
VDIHW\ LQFOXGHG  3DWLHQW DELOLW\ 6HFWLRQ GHWHUPLQHWKHDSSURSULDWHYDOXHDQGHQWHUWKDWYDOXH
3DWLHQWFRQFHQWUDWLRQ6HFWLRQ LQ 7DEOH  XQGHU 6DIHW\ 3DUDPHWHU
 DQG  $WWHQGDQWWRSDWLHQW UDWLR  3DWLHQW &RQFHQWUDWLRQ IRU PHDQV RI
6HFWLRQ  %DVLFDOO\ WKHVH HJUHVVDQGJHQHUDOVDIHW\
FRQVLGHUDWLRQVDGGUHVVSDWLHQWVDIHW\IURPWKH
VWDQGSRLQWRIWKHDELOLW\RISDWLHQWVWREHEURXJKW ™ 6HHWKHFRPPHQWDU\WR6HFWLRQ
WRVDIHW\LQWKHHYHQWRIDQHPHUJHQF\7KHVH  $WWHQGDQWWRSDWLHQW UDWLR
WKUHHIDFWRUVDUHHQWHUHGLQWR7DEOHIRU
(YDOXDWH WKH DWWHQGDQWWRSDWLHQW UDWLR IRU HDFK
DQRYHUDOOVFRUHIRUWKH,VPRNHFRPSDUWPHQW
EHLQJHYDOXDWHG
FRPSDUWPHQWXQGHUVHFWLRQ8QGHUWKH
™ 7KLV VHFWLRQ DOVR HVWDEOLVKHV D PDQGDWRU\ FDWHJRULHV DQG RFFXSDQFLHV LQ 7DEOH 
VDIHW\ VFRUH IRU WKHVH WKUHH HYDOXDWLRQ GHWHUPLQHWKHDSSURSULDWHYDOXHDQGHQWHUWKDWYDOXH
FDWHJRULHVDORQH7KHUXOHLVWKDWLIWKHSURGXFW LQ 7DEOH  XQGHU 6DIHW\ 3DUDPHWHU

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

$WWHQGDQWWRSDWLHQW5DWLRIRUPHDQV ILUHVDIHW\PHDQVRIHJUHVVDQGJHQHUDOVDIHW\
RIHJUHVVDQGJHQHUDOVDIHW\ 7KHPDQGDWRU\VDIHW\YDOXHVDUHEDVHGRQWKH
VFRUHV FRQVLGHUHG WR SURYLGH DQ RYHUDOO
™ 6HHWKHFRPPHQWDU\WR6HFWLRQ DFFHSWDEOHOHYHORIVDIHW\LQDQH[LVWLQJEXLOGLQJ
 &DWHJRULHV  7KH FDWHJRULHV IRU RQ ZKLFK DSSURYDO RI WKH DOWHUDWLRQV UHSDLUV
DWWHQGDQWWRSDWLHQWFRQFHQWUDWLRQVDUH FKDQJHRIRFFXSDQF\RUDGGLWLRQFDQEHEDVHG
7KLV LV WKH ]HUREDVHG FRQFHSW 7KH VFRUHV
KDYH EHHQ GHWHUPLQHG DV UHSUHVHQWLQJ RQH
 &DWHJRU\ D²DWWHQGDQWWRSDWLHQW OHYHO RI FRPSOLDQFH KLJKHU WKDQ WKH FRGH¶V
FRQFHQWUDWLRQVLV PLQLPXP UHTXLUHPHQWV IRU QHZ FRQVWUXFWLRQ
 &DWHJRU\ E²DWWHQGDQWWRSDWLHQW 7KH PDQGDWRU\ VDIHW\ VFRUHV DUH FRQVLVWHQW
FRQFHQWUDWLRQVLVWR ZLWKWKHLGHDRIHVWDEOLVKLQJDQHTXLYDOHQWOHYHO
 &DWHJRU\ F²DWWHQGDQWWRSDWLHQW RI VDIHW\ HYHQ WKRXJK WKH H[LVWLQJ EXLOGLQJ LV
FRQFHQWUDWLRQV LV JUHDWHU WKDQ  RU QR HYDOXDWHGRQO\IRUWKHVDIHW\SDUDPHWHUV
SDWLHQWV  (YDOXDWLRQ RI EXLOGLQJ VDIHW\  7KH
™ 7KLVVHFWLRQHVWDEOLVKHVWKHGLIIHUHQWFDWHJRULHV PDQGDWRU\ VDIHW\ VFRUH LQ 7DEOH  VKDOO EH
IRUVFRULQJDWWHQGDQWWRSDWLHQWUDWLRLQD*URXS VXEWUDFWHGIURPWKHEXLOGLQJVFRUHLQ7DEOH
,VPRNHFRPSDUWPHQW IRU HDFK FDWHJRU\ :KHUH WKH ILQDO VFRUH IRU DQ\
 %XLOGLQJ VFRUH  $IWHU GHWHUPLQLQJ WKH FDWHJRU\ HTXDOV ]HUR RU PRUH WKH EXLOGLQJ LV LQ
DSSURSULDWH GDWD IURP6HFWLRQ HQWHU WKRVH FRPSOLDQFHZLWKWKHUHTXLUHPHQWVRIWKLVVHFWLRQIRU
GDWDLQ7DEOHDQGWRWDOWKHEXLOGLQJVFRUH WKDW FDWHJRU\ :KHUH WKH ILQDO VFRUH IRU DQ\
FDWHJRU\ LV OHVV WKDQ ]HUR WKH EXLOGLQJ LV QRW LQ
™ 7KLV VHFWLRQ LV WKH WDOO\ VKHHW IRU DOO RI WKH  FRPSOLDQFHZLWKWKHUHTXLUHPHQWVRIWKLVVHFWLRQ
VDIHW\ SDUDPHWHUV HYDOXDWHG LQ 6HFWLRQV
 WKURXJK  ZKLFK GHWHUPLQH ™ 7KHVHFWLRQVDQGWDEOHWKDWIROORZDUHWKHILQDO
WKH EXLOGLQJ¶V RYHUDOO VDIHW\ SURILOH IRU ILUH VWHSV LQ WKH HYDOXDWLRQ SURFHVV 7KLV VHFWLRQ
VDIHW\PHDQVRIHJUHVVDQGJHQHUDOVDIHW\ DOVR GLVFXVVHV KRZ PL[HG RFFXSDQFLHV PXVW
™ 7KLVVHFWLRQDOVRGLUHFWVWKHGDWDDQGYDOXHVRI EHWUHDWHGGXULQJWKHILQDOVWHSRIWKHHYDOXDWLRQ
WKHVDIHW\SDUDPHWHUVRI6HFWLRQV SURFHVV
WKURXJK  WR EH HQWHUHG LQ 7DEOH ™ 7KLVVHFWLRQFRPSDUHVWKHWKUHHEXLOGLQJVFRUHV
IRUWRWDOLQJWKHEXLOGLQJVFRUHV IURP 7DEOH  WR WKH WKUHH PDQGDWRU\
™ 7DEOHLVWKHVXPPDU\VKHHWFRQWDLQLQJ VDIHW\VFRUHVIURP7DEOH,IWKHYDOXHV
DOO WKH UHODWLYH DWWULEXWHV RI WKH EXLOGLQJ 7KH LQ DOO WKUHH FDWHJRULHV IURP 7DEOH 
VXPPDU\VKHHWDOVRFRQWDLQVDFRPSOHWHOLVWLQJ H[FHHG WKH FRUUHVSRQGLQJ PDQGDWRU\ VDIHW\
RI WKH  VDIHW\ SDUDPHWHUV WKDW KDYH EHHQ VFRUHVLQ7DEOHWKHEXLOGLQJSDVVHVDQG
HYDOXDWHG 7KH XSSHU SRUWLRQ RI WKH VXPPDU\ LV LQ FRPSOLDQFH ZLWK WKH FRGH ,I WKH VFRUH LQ
VKHHWVHUYHVDVDJXLGHWRWKHXVHUWRFDWDORJ DQ\ RQH FDWHJRU\ LV OHVV WKDQ WKH PDQGDWRU\
DQG KLJKOLJKW H[LVWLQJ EXLOGLQJ HOHPHQWV WKDW VDIHW\ VFRUH WKH EXLOGLQJ LV GHHPHG WR KDYH
UHODWH WR WKH  VDIHW\ SDUDPHWHUV DQG WR WKH IDLOHG DQG DGGLWLRQDO PHDVXUHV PXVW EH WDNHQ
HYDOXDWLRQ 7KH ORZHU SRUWLRQ RI WKH VXPPDU\ WR EULQJ WKH VFRUHV WR D SRLQW WKDW ZLOO DW OHDVW
VKHHW LV XVHG WR UHFRUG WKH UHVXOWV RI WKH  HTXDOWKHPDQGDWRU\VDIHW\VFRUHV
VDIHW\ SDUDPHWHUV WKDW KDYH EHHQ HYDOXDWHG ™ 7KHVHFWLRQVDQGWDEOHWKDWIROORZDUHWKHILQDO
7KHVHDUHDGGHGWRSURGXFHWKHEXLOGLQJVFRUH VWHSV LQ WKH HYDOXDWLRQ SURFHVV 7KLV VHFWLRQ
WRWDOYDOXHVIRUILUHVDIHW\PHDQVRIHJUHVVDQG DOVR GLVFXVVHV KRZ PL[HG RFFXSDQFLHV PXVW
JHQHUDO VDIHW\6DIHW\ VFRUHV  7KH YDOXHV LQ EHWUHDWHGGXULQJWKHILQDOVWHSRIWKHHYDOXDWLRQ
7DEOHDUHWKHUHTXLUHGPDQGDWRU\VDIHW\ SURFHVV
™ 7KLVVHFWLRQFRPSDUHVWKHWKUHHEXLOGLQJVFRUHV
VFRUHV IRU WKH HYDOXDWLRQ SURFHVV OLVWHG LQ
IURP 7DEOH  WR WKH WKUHH PDQGDWRU\
6HFWLRQ VDIHW\VFRUHVIURP7DEOH,IWKHYDOXHV
™ 7KLV VHFWLRQ OLVWV WKH PLQLPXP VFRUHV IRU ILUH LQ DOO WKUHH FDWHJRULHV IURP 7DEOH 
VDIHW\PHDQVRIHJUHVVDQGJHQHUDOVDIHW\WKDW H[FHHG WKH FRUUHVSRQGLQJ PDQGDWRU\ VDIHW\
PXVWEHREWDLQHGIURPWKHHYDOXDWLRQRIWKH VFRUHVLQ7DEOHWKHEXLOGLQJSDVVHVDQG
VDIHW\ SDUDPHWHUV WR EH DFFHSWDEOH DV D LV LQ FRPSOLDQFH ZLWK WKH FRGH ,I WKH VFRUH LQ
EXLOGLQJPHHWLQJWKHFRGH¶VREMHFWLYHVIRUSXEOLF DQ\ RQH FDWHJRU\ LV OHVV WKDQ WKH PDQGDWRU\
VDIHW\DQGKHDOWK7KLVVHFWLRQVXPPDUL]HVWKH VDIHW\ VFRUH WKH EXLOGLQJ LV GHHPHG WR KDYH
PDQGDWRU\YDOXHVRI7DEOHWKDWPXVWEH IDLOHG DQG DGGLWLRQDO PHDVXUHV PXVW EH WDNHQ
PHWIURPWKHHYDOXDWLRQSURJUDP WR EULQJ WKH VFRUHV WR D SRLQW WKDW ZLOO DW OHDVW
™ 7KH 7DEOH OLVWV PLQLPXP PDQGDWRU\ VDIHW\ HTXDOWKHPDQGDWRU\VDIHW\VFRUHV
VFRUHVIRUYDULRXVRFFXSDQFLHVLQWKHDUHDVRI

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

™ 7DEOH  VKRZV LQ VLPSOH HTXDWLRQV WKDWDUHVHSDUDWHGZLWKDILUHUHVLVWDQFHUDWLQJ

ZKHWKHU D EXLOGLQJ SDVVHV WKH HYDOXDWLRQ E\ RIOHVVWKDQKRXUPDQGDWRU\VDIHW\VFRUHVIRU
VXEWUDFWLQJ WKH PDQGDWRU\ VDIHW\ VFRUH IURP WKH RFFXSDQF\ ZLWK WKH ORZHVW JHQHUDO VDIHW\
7DEOH7KLVLVGRQHIRUHDFKRIWKHWKUHH VFRUHRI7DEOHDSSO\
JHQHUDO FDWHJRULHV RI HYDOXDWLRQ ILUH VDIHW\ ™ 3URFHGXUH
PHDQV RI HJUHVV DQG JHQHUDO VDIHW\ ,I WKH ™ )RUVHSDUDWHGRFFXSDQFLHVLQDFFRUGDQFHZLWK
GLIIHUHQFHIRUHDFKFDWHJRU\LV]HURRUJUHDWHU 6%&  6HFWLRQ  RU RQH RI WKH
WKHH[LVWLQJEXLOGLQJSDVVHVDQGLVFRQVLGHUHG FDWHJRULHV OLVWHG LQ 6HFWLRQ 
WR FRPSO\ ZLWK WKH FRGH REMHFWLYHV IRU SXEOLF PDQGDWRU\ VDIHW\ VFRUHV IRU HDFK RFFXSDQF\
VDIHW\ DUHFRPSDUHGWRWKHHYDOXDWLRQVFRUHVIRUWKH
™ ([DPSOH DSSURSULDWHRFFXSDQF\7KHWRWDOEXLOGLQJVFRUH
™ $ *URXS 0 PHUFDQWLOH RFFXSDQF\ UHFHLYHV RI 7DEOH  LV FRPSXWHG IRU HDFK
HYDOXDWLRQV IRU WKH  VDIHW\ SDUDPHWHUV WKDW DSSURSULDWHRFFXSDQF\
UHVXOWLQWRWDOEXLOGLQJVFRUHVLQ7DEOHDV ™ 7KLVVHFWLRQGRHVQRWDGGUHVVDWKLUGRSWLRQIRU
IROORZV PL[HGRFFXSDQFLHVDQGWKDWLVWKHVHSDUDWLRQ
™ )LUHVDIHW\)6  0HDQV RI HJUHVV RIPXOWLSOHRFFXSDQFLHVZLWKLQDVLQJOHEXLOGLQJ
0( *HQHUDOVDIHW\*6  RU VWUXFWXUH ZLWK RQH RU PRUH ILUH ZDOOV
™ 7KHVHVFRUHVDUHFRPSDUHGWRWKHPDQGDWRU\ /LNHZLVH WKLV RSWLRQ LV QRW DGGUHVVHG LQ 6%&
VDIHW\ VFRUHV IRU D *URXS 0 RFFXSDQF\ IURP  6HFWLRQ  $ ILUH ZDOO FUHDWHV VHSDUDWH
7DEOH  VHH &RPPHQWDU\ )LJXUH DQG LQGHSHQGHQW EXLOGLQJV WKHUHIRUH D
 VHSDUDWH HYDOXDWLRQ PXVW EH GRQH IRU HDFK
™ 0DQGDWRU\ ILUH VDIHW\ 0)6   0DQGDWRU\ EXLOGLQJWKDWLVFUHDWHGE\ILUHZDOOV
PHDQVRIHJUHVV00(  ™ ([DPSOH
™ 0DQGDWRU\JHQHUDOVDIHW\0*6  ™ $  P WKUHHVWRU\ EXLOGLQJ KDV DQ RSHQ
™ 7KH PDQGDWRU\ VFRUH LV VXEWUDFWHG IURP WKH SHULPHWHU RI  SHUFHQW ,W LV 7\SH ,,%
EXLOGLQJVFRUH XQSURWHFWHG FRQVWUXFWLRQ XQVSULQNOHUHG 7KH
™ &RQFOXVLRQ EXLOGLQJ KDV  P SHU IORRU $ *URXS $
™ 7KHEXLOGLQJLVDFFHSWDEOHDOORIWKHILQDOVDIHW\ DVVHPEO\ LV RQ WKH ILUVW IORRU ZLWK *URXS %
VFRUHVDUH]HURRUJUHDWHU(DFKFDWHJRU\PXVW EXVLQHVVRFFXSDQFLHVRQWKHVHFRQGDQGWKLUG
LQGLYLGXDOO\ KDYH D EXLOGLQJ VFRUH HTXDO WR RU IORRUV $OWKRXJK WKH EXLOGLQJ LV XQSURWHFWHG
JUHDWHU WKDQ WKH UHVSHFWLYH PDQGDWRU\ VDIHW\ 7\SH ,,% FRQVWUXFWLRQ WKHUH LV D KRXU ILUH
VFRUH IRU WKH EXLOGLQJ WR SDVV WKH RYHUDOO UHVLVWDQFHUDWHG IORRUFHLOLQJ DVVHPEO\
HYDOXDWLRQ VHSDUDWLQJ WKH ILUVW DQG VHFRQG IORRUV $Q
DQDO\VLV RI WKLV EXLOGLQJ ZLOO UHVXOW LQ WKH
 0L[HG RFFXSDQFLHV  )RU PL[HG IROORZLQJ,QDFFRUGDQFHZLWK6%&6HFWLRQ
RFFXSDQFLHVWKHIROORZLQJSURYLVLRQVVKDOODSSO\  DQG 6%&  7DEOH  WKH PL[HG
RFFXSDQFLHVDUHVHSDUDWHGE\WKHUHTXLUHGILUH
 :KHUH WKH VHSDUDWLRQ EHWZHHQ PL[HG UDWHGDVVHPEO\RIKRXUV
RFFXSDQFLHVGRHVQRWTXDOLI\IRUDQ\FDWHJRU\ ™ 7KLVEXLOGLQJTXDOLILHVIRU&DWHJRU\ELQ6HFWLRQ
LQGLFDWHGLQ6HFWLRQWKHPDQGDWRU\  $ VHSDUDWH VXPPDU\ VKHHW IRU
VDIHW\ VFRUHV IRU WKH RFFXSDQF\ ZLWK WKH WDEXODWLQJ WKH EXLOGLQJ VFRUH LQ 7DEOH 
ORZHVW JHQHUDO VDIHW\ VFRUH LQ 7DEOH  KDV WR EH FRPSOHWHG IRU HDFK RI WKH WZR
VKDOOEHXWLOL]HG6HH6HFWLRQ RFFXSDQFLHV7KHYDOXHVRIWKHEXLOGLQJVFRUHV
IRU ILUH VDIHW\ PHDQV RI HJUHVV DQG JHQHUDO
 :KHUH WKH VHSDUDWLRQ EHWZHHQ PL[HG
VDIHW\ IRU WKH *URXS 0 PHUFDQWLOH RFFXSDQF\
RFFXSDQFLHV TXDOLILHV IRU DQ\ FDWHJRU\ DQGWKH*URXS5UHVLGHQWLDORFFXSDQF\PXVWEH
LQGLFDWHGLQ6HFWLRQWKHPDQGDWRU\ FDOFXODWHG7KHPHUFDQWLOHEXLOGLQJVFRUHVDUH
VDIHW\ VFRUHV IRU HDFK RFFXSDQF\ VKDOO EH FRPSDUHGWRWKHPDQGDWRU\VDIHW\VFRUHVIURP
SODFHG DJDLQVW WKH HYDOXDWLRQ VFRUHV IRU WKH 7DEOH  RI   DQG  DQG WKH
DSSURSULDWHRFFXSDQF\ UHVLGHQWLDOEXLOGLQJVFRUHVDUHFRPSDUHGWRWKH
PDQGDWRU\VDIHW\VFRUHVIURP7DEOHRI
™ 7KLVVHFWLRQH[SODLQVKRZWRGHWHUPLQHZKHWKHU
DQG,IDQ\RQHRIWKHWKUHHEXLOGLQJ
DPL[HGRFFXSDQF\EXLOGLQJSDVVHVRUIDLOVWKH
VFRUHVIURPHLWKHURIWKHWZRRFFXSDQFLHVGRHV
SURFHVV RI HYDOXDWLRQ ,W UHVWDWHV WKH
QRWHTXDORUH[FHHGWKHDSSOLFDEOHVDIHW\VFRUH
LQIRUPDWLRQLQ6HFWLRQVDQG
WKHHQWLUHEXLOGLQJIDLOVWKHHYDOXDWLRQ)RUWKH
7KH PL[HG RFFXSDQF\ HYDOXDWLRQ LV EDVHG RQ
EXLOGLQJWRSDVVWKHVDIHW\SDUDPHWHUVWKDWDUH
WKHUHTXLUHPHQWVRI6%&6HFWLRQ
OHVVWKDQWKHPDQGDWRU\VDIHW\VFRUHPXVWEH
™ 7KHWZRSURFHGXUHVGHVFULEHGDUH
XSJUDGHGXQWLODSDVVLQJVFRUHLVDFKLHYHG
™ 3URFHGXUH
™ )RUQRQVHSDUDWHGRFFXSDQFLHVLQDFFRUGDQFH 
ZLWK6%&6HFWLRQRUIRURFFXSDQFLHV

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

™ %LEOLRJUDSK\ 5HKDELOLWDWLRQ *XLGHOLQHV :DVKLQJWRQ '&

1DWLRQDO ,QVWLWXWH RI %XLOGLQJ 6FLHQFH IRU WKH
7KHIROORZLQJUHVRXUFHPDWHULDOVZHUHXVHGLQWKH
86 'HSDUWPHQW RI +RXVLQJ DQG 8UEDQ
SUHSDUDWLRQRIWKHFRPPHQWDU\IRUWKLVFKDSWHU
'HYHORSPHQW
RIWKHFRGH
*XLGHOLQH IRU 6HWWLQJ DQG $GRSWLQJ 6WDQGDUGV IRU
 &)5 3DUWV  DQG  'UDIW 7KH
%XLOGLQJ5HKDELOLWDWLRQ
$PHULFDQV ZLWK 'LVDELOLWLHV $FW $FFHVVLELOLW\
*XLGHOLQHIRU$SSURYDORI%XLOGLQJ5HKDELOLWDWLRQ
*XLGHOLQHV $'$$* :DVKLQJWRQ '&
6WDWXWRU\*XLGHOLQHIRU%XLOGLQJ5HKDELOLWDWLRQ
$UFKLWHFWXUDO DQG 7UDQVSRUWDWLRQ %DUULHUV
*XLGHOLQHIRU0DQDJLQJ2IILFLDO/LDELOLW\$VVRFLDWHG
&RPSOLDQFH%RDUG$SULO
ZLWK%XLOGLQJ5HKDELOLWDWLRQ
$FFHVVLELOLW\ DQG (JUHVV IRU 3HRSOH ZLWK 3K\VLFDO
(JUHVV*XLGHOLQHIRU5HVLGHQWLDO5HKDELOLWDWLRQ
'LVDELOLWLHV)DOOV&KXUFK9$&$%2%RDUGIRU
(OHFWULFDO*XLGHOLQHIRU5HVLGHQWLDO5HKDELOLWDWLRQ
WKH&RRUGLQDWLRQ RIWKH0RGHO&RGHV5HSRUW
3OXPELQJ ':9 *XLGHOLQH IRU 5HVLGHQWLDO
2FWREHU
5HKDELOLWDWLRQDQG
³)LQDO 5HSRUW 5HFRPPHQGDWLRQV IRU D 1HZ
*XLGHOLQHRQ)LUH5DWLQJVRI$UFKDLF0DWHULDOVDQG
$'$$*´ :DVKLQJWRQ '& $'$$* 5HYLHZ
$VVHPEOLHV
)HGHUDO $GYLVRU\ &RPPLWWHH 6HSWHPEHU 

 

6%&&& 

 &+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

7$%/(6$1'),*85(62)&+$37(5

7$%/(
&203$570(17$7,219$/8(6

&DWHJRULHV
H
D E F G
&RPSDUWPHQW
2FFXSDQF\ &RPSDUWPHQWVL]HHTXDO &RPSDUWPHQW &RPSDUWPHQW &RPSDUWPHQW
VL]HRI
WRRUJUHDWHUWKDQ VL]HRI VL]HRI VL]HRI
P
P P P P
RUOHVV
$$     
$     
$%(     
6
)056     

7$%/(
6(3$5$7,219$/8(6
&$7(*25,(6
2&&83$1&<
D E F G H
$     
$     
5     
$$%()06     
,     
6     

7$%/(
&255,'25:$//9$/8(6
&$7(*25,(6
2&&83$1&<
D E F D GD
$    
$    
$)056    
$%(6    
,    
D&RUULGRUVQRWSURYLGLQJDWOHDVWRQHKDOIWKHH[LWDFFHVVWUDYHOGLVWDQFHIRUDOORFFXSDQWVRQDIORRUVKDOOXVH&DWHJRU\E

7$%/(
9(57,&$/23(1,1*3527(&7,219$/8(
3527(&7,21 9$/8(
1RQHXQSURWHFWHGRSHQLQJ WLPHVQXPEHURIIORRUVFRQQHFWHG
/HVVWKDQKRXU WLPHVQXPEHURIIORRUVFRQQHFWHG
WROHVVWKDQKRXUV 
KRXUVRUPRUH 

7$%/(
&216758&7,217<3()$&725
7<3(2)&216758&7,21
)$&725

,$ ,% ,,$ ,,% ,,,$ ,,,% ,9 9$ 9%

        



6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

7$%/(
$8720$7,&),5('(7(&7,219$/8(6
&$7(*25,(6
2&&83$1&<
D E F G H I
$$)056      ²
$      ²
$%(6      ²
, 13 13 13   

7$%/(
),5($/$506<67(09$/8(6
&$7(*25,(6
2&&83$1&<
$ ED F G
$$$$%(5    
)06    
,    
D)RUEXLOGLQJVHTXLSSHGWKURXJKRXWZLWKDQDXWRPDWLFVSULQNOHUV\VWHPDGGSRLQWVIRUDFWLYDWLRQE\DVSULQNOHUZDWHU
IORZGHYLFH

7$%/(
602.(&21752/9$/8(6
&$7(*25,(6
2&&83$1&<
$ E F G H )
$$$      
$(      
%05  D D D D D
         
)6  D D D D D
         
,      
D 7KLVYDOXHVKDOOEHLIFRPSOLDQFHZLWK&DWHJRU\GRUHLQ6HFWLRQKDVQRWEHHQREWDLQHG

7DEOH
0HDQVRI(JUHVV9DOXHVD
&DWHJRULHV
2FFXSDQF\
D E F G H
$$$$(,     

0     
%)6     
5     
D7KHYDOXHVLQGLFDWHGDUHIRUEXLOGLQJVVL[VWRULHVRUOHVVLQKHLJKW)RUEXLOGLQJVRYHUVL[VWRULHVDERYHJUDGHSODQH
DGGDQDGGLWLRQDOSRLQWV


6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

7DEOH
'HDG(QG9DOXHV
&DWHJRULHVD
2FFXSDQF\
D E F G
$$$%)056    

$(    

,    
D)RUGHDGHQGGLVWDQFHVEHWZHHQFDWHJRULHVWKHGHDGHQGYDOXHVKDOOEHREWDLQHGE\OLQHDULQWHUSRODWLRQ

7$%/(
(/(9$725&21752/9$/8(6
&$7(*25,(6
(/(9$72575$9(/
D E F G
/HVV WKDQ  P RI WUDYHO
DERYH RU EHORZ WKH SULPDU\
OHYHO RI HOHYDWRU DFFHVV IRU    
HPHUJHQF\ ILUHILJKWLQJ RU
UHVFXHSHUVRQQHO
7UDYHORIPRUPRUHDERYH
RUEHORZWKHSULPDU\OHYHORI
HOHYDWRUDFFHVVIRUHPHUJHQF\  13  
ILUHILJKWLQJ RU UHVFXH
SHUVRQQHO
13 1RWSHUPLWWHG

7$%/(
0($162)(*5(66(0(5*(1&</,*+7,1*9$/8(6
&$7(*25,(6
1XPEHURI([LWV5HTXLUHGE\6HFWLRQRIWKH6%&
D E F
7ZRRUPRUHH[LWV 13  
0LQLPXPRIRQHH[LW   
13 1RWSHUPLWWHG

7$%/(
0,;('2&&83$1&<9$/8(6D
&$7(*25,(6
2&&83$1&<
D E F
$$5   
$$%()06   
, 13  
13 QRWSHUPLWWHG
D)RUILUHUHVLVWDQFHUDWLQJVEHWZHHQFDWHJRULHVWKHYDOXHVKDOOEHREWDLQHGE\OLQHDULQWHUSRODWLRQ

7$%/(
635,1./(56<67(09$/8(6
&$7(*25,(6
2&&83$1&<
DD E D F G H I
$$)056      
$      
$%(6      
, 13 13 13   13
13 QRWSHUPLWWHG
D 7KHVHRSWLRQVFDQQRWEHWDNHQLI&DWHJRU\DLQ6HFWLRQLVXVHG

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

7$%/(
67$1'3,3(6<67(09$/8(6
&$7(*25,(6
2&&83$1&<
D D E F G
$$)056    
$    
$%(6    
,    
D7KLVRSWLRQFDQQRWEHWDNHQLI&DWHJRU\DRU&DWHJRU\ELQ6HFWLRQLVXVHG

7$%/(
602.(&203$570(17$7,219$/8(6
&$7(*25,(6D
2&&83$1&<
D E F
$%(
  
)05DQG6
,  13 13
13 1RWSHUPLWWHG
D )RUDUHDVEHWZHHQFDWHJRULHVWKHVPRNHFRPSDUWPHQWDWLRQYDOXHVKDOOEHREWDLQHGE\OLQHDULQWHUSRODWLRQ

7$%/(
,1&,'(17$/86($5($9$/8(6
3527(&7,213529,'('
3527(&7,21 5(48,5(' %< 7$%/(
$6 ZLWK  KRXU KRXUVDQG
RI6%& 1RQH KRXU $6 KRXUV
&56 DQG$6 $6
KRXUVDQG$6       
KRXUVRUKRXUDQG$6       
KRXUDQG$6       
KRXU       
KRXURU$6ZLWK&56       
$6ZLWK&56       
KRXURU$6       
$6 $XWRPDWLFVSULQNOHUV\VWHP
&56 &RQVWUXFWLRQFDSDEOHRIUHVLVWLQJWKHSDVVDJHRIVPRNHVHH%&
1RWH)RU7DEOHVHHSDJHRIWKHFRGHRUSDJHRIWKLVYROXPH

7$%/(
3$7,(17&21&(175$7,219$/8(6
&$7(*25,(6
2&&83$1&<
D E F
,   

7$%/(
$77(1'$17723$7,(175$7,29$/8(6
&$7(*25,(6
2&&83$1&<
D E F
,   

7$%/(
3$7,(17$%,/,7<9$/8(6
&$7(*25,(6
2&&83$1&<
D E F
,   



6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

7$%/(
6XPPDU\6KHHW%XLOGLQJ&RGH
([LVWLQJRFFXSDQF\BBBBBBBBBBBBBBBBBBBBB 3URSRVHGRFFXSDQF\BBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
<HDUEXLOGLQJZDVFRQVWUXFWHGBBBBBBBBBBBBB 1XPEHURIVWRULHVBBBBBBB+HLJKWLQPHWHUBBBBBBBBBBBBB
7\SHRIFRQVWUXFWLRQBBBBBBBBBBBBBBBBBBBBB $UHDSHUIORRUBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
3HUFHQWDJHRIRSHQSHULPHWHULQFUHDVHBBBBBB 
&RPSOHWHO\VXSSUHVVHG<HVBBBBBBB1RBBBBB &RUULGRUZDOOUDWLQJBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
 7\SHBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
&RPSDUWPHQWDWLRQ<HVBBBBB1RBBBBBBB 5HTXLUHGGRRUFORVHUV<HVBBBBBBBB1RBBBBBBBBBB
)LUHUHVLVWDQFHUDWLQJRIYHUWLFDORSHQLQJHQFORVXUHVBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
7\SHRI+9$&V\VWHPBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBVHUYLQJQXPEHURIIORRUVBBBBBBBBBBBB
$XWRPDWLFILUHGHWHFWLRQ<HVBBBBBBB1RBBBBB 7\SHDQGORFDWLRQBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
)LUHDODUPV\VWHP<HVBBBBBBB1RBBB 7\SHBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
6PRNHFRQWURO<HVBBBBBBB1RBBB 7\SHBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
$GHTXDWHH[LWURXWHV<HVBBBBBBB1RBB 'HDGHQGVBBBBBBBBBBBBBB<HVBBBBBBB1RBBBBBB
0D[LPXPH[LWDFFHVVWUDYHOGLVWDQFHBBBBBBBB (OHYDWRUFRQWUROV<HVBBBBB1RBBBBBB
0HDQVRIHJUHVVHPHUJHQF\OLJKWLQJ<HVBBB1R 0L[HGRFFXSDQFLHV<HVBBBBBBB1RBBBBBB
6WDQGSLSHV<HVBBBBBB1RBB 3DWLHQWDELOLW\IRUVHOISUHVHUYDWLRQBBBBBBBBBBBBBBBBB
,QFLGHQWDOXVH<HVBBBBBB1RBB 3DWLHQWFRQFHQWUDWLRQBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
6PRNHFRPSDUWPHQWDWLRQOHVVWKDQP<HV $WWHQGDQWWRSDWLHQWUDWLRBBBBBBBBBBBBBBBBBBBBBBBBBB
B1RBBB

6DIHW\3DUDPHWHUV )LUH6DIHW\)6 0HDQVRI(JUHVV0( *HQHUDO 6DIHW\

*6
%XLOGLQJ+HLJKW   
%XLOGLQJ$UHD   
&RPSDUWPHQWDWLRQ   
 7HQDQW DQG 'ZHOOLQJ 8QLW   
6HSDUDWLRQV
&RUULGRU:DOOV   
9HUWLFDO2SHQLQJV   
+9$&6\VWHPV   
$XWRPDWLF)LUH'HWHFWLRQ   
)LUH$ODUP6\VWHP   
6PRNHFRQWURO      
0HDQVRI(JUHVV      
'HDGHQGV      
 0D[LPXP ([LW $FFHVV 7UDYHO      
'LVWDQFH
(OHYDWRU&RQWURO   
 0HDQV RI (JUHVV (PHUJHQF\      
/LJKWLQJ
0L[HG2FFXSDQFLHV      
$XWRPDWLF6SULQNOHUV  ·  
6WDQGSLSHV   
,QFLGHQWDO8VH   
6PRNHFRPSDUWPHQWDWLRQ   
 3DWLHQW DELOLW\ IRU VHOI      
SUHVHUYDWLRQ
3DWLHQWFRQFHQWUDWLRQ      
$WWHQGDQWWRSDWLHQW5DWLR      
%XLOGLQJVFRUH²WRWDOYDOXH   
   1RDSSOLFDEOHYDOXHWREHLQVHUWHG

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

7$%/(
0$1'$725<6$)(7<6&25(6D
2&&83$1&< ),5(6$)(7<0)6 0($162)(*5(6600( *(1(5$/6$)(7<0*6
$   
$   
$   
$(   
%   
)   
,   
0   
5   
6   
6   
D 0)6 0DQGDWRU\)LUH6DIHW\
00( 0DQGDWRU\0HDQVRI(JUHVV
0*6 0DQGDWRU\*HQHUDO6DIHW\

7$%/(
(9$/8$7,21)2508/$6D
)2508/$ 7 7  6&25( 3$66 )$,/
)60)6• BBBBBB)6± BBBBBB0)6  BBBBBBB BBBBBBB BBBBBBB
0(±00(• BBBBBB0(± BBBBBB00(  BBBBBBB BBBBBBB BBBBBBB
*6±0*6• BBBBBB*6± BBBBBB0*6  BBBBBBB BBBBBBB BBBBBBB
D)6ILUHVDIHW\0)60DQGDWRU\ILUHVDIHW\
0(PHDQVRIHJUHVV00(0DQGDWRU\PHDQVRIHJUHVV
*6JHQHUDOVDIHW\0*6PDQGDWRU\PHDQVRIVDIHW\

7$%/(
(9$/8$7,21)2508/$6D
)RUPXOD 7DEOH 7DEOH 6FRUH 3DVV )DLO
 െ   ൒ Ͳ )6 0)6   ൈ െ
 െ  ൒ Ͳ 0( 00(   ൈ െ

 െ 
 ൒ Ͳ *6 0*6   ൈ െ
D)6 )LUH6DIHW\  )6 0DQGDWRU\)LUH6DIHW\
0( 0HDQVRI(JUHVV 0( 0DQGDWRU\0HDQVRI(JUHVV
*6 *HQHUDO6DIHW\  *6 0DQGDWRU\*HQHUDO6DIHW\

),*85(
([DPSOHRI(YDOXDWLRQ)RUPXODV


6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6





),*85(
$//2:$%/($5($²6,1*/(2&&83$1&<%8,/',1*


6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6


),*85(
$//2:$%/($5($²0,;('2&&83$1&<%8,/',1*


6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6


),*85(
':(//,1*81,76(3$5$7,21

1.8 m


),*85(
7(1$176(3$5$7,21

6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6


),*85(
&255,'25:$//9$/8(6²&$7(*25<$


6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6


),*85(
&255,'25:$//9$/8(6²&$7(*25<%


6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6


),*85(
0($162)(*5(669$/8(6²&$7(*25<%


6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6


),*85(
0($162)(*5(669$/8(6²&$7(*25<$



),*85(
7<3,&$/'($'(1'&255,'25


6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6


),*85(
'($'(1'9$/8(6²&$7(*25<%




),*85(
'($'(1'9$/8(6²&$7(*25<$


6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6


),*85(
(;,7$&&(6675$9(/',67$1&(9$/8(²2&&83$1&<*52836



),*85(
(;,7$&&(6675$9(/',67$1&(9$/8(²2&&83$1&<*52835


6%&&& 

&+$37(5²3(5)250$1&(&203/,$1&(0(7+2'6

























7KLVSDJHOHIWLQWHQWLRQDOO\EODQN

6%&&& 

 &+$37(5²&216758&7,216$)(*8$5'6

²&216758&7,216$)(*8$5'6

™ 7KHPRVWFULWLFDOSHULRGLQEXLOGLQJFRQVWUXFWLRQ
™ *HQHUDO&RPPHQWV
UHODWHGWRWKHSK\VLFDOVDIHW\RIWKRVHRQWKHMRE
™ 7KH EXLOGLQJ FRQVWUXFWLRQ SURFHVV LQYROYHV D
VLWH LV GXULQJ WKH RQJRLQJ SURFHVV ZKHQ DOO
QXPEHU RI NQRZQ DQG XQDQWLFLSDWHG KD]DUGV
EXLOGLQJ FRPSRQHQWV KDYH QRW \HW EHHQ
&KDSWHU  HVWDEOLVKHV VSHFLILF UHJXODWLRQV LQ
FRPSOHWHG&RPSRXQGLQJWKLVLQFRPSOHWHVWDWH
RUGHUWRPLQLPL]HULVNWRWKHSXEOLFDQGDGMDFHQW
LVWKHXVHRIGDQJHURXVFRQVWUXFWLRQPHWKRGV
SURSHUW\ 6RPH FRQVWUXFWLRQ IDLOXUHV KDYH
PDWHULDOVDQGHTXLSPHQW
UHVXOWHG GXULQJ WKH LQLWLDO VWDJHV RI JUDGLQJ
™ 3XUSRVH
H[FDYDWLRQ DQG GHPROLWLRQ 'XULQJ WKHVH HDUO\
™ 7KH SXUSRVH RI &KDSWHU  LV WR FLWH VDIHW\
VWDJHVSRRUO\GHVLJQHGDQGLQVWDOOHGVKHHWLQJ
UHTXLUHPHQWVGXULQJFRQVWUXFWLRQRUGHPROLWLRQ
DQG VKRULQJ KDYH UHVXOWHG LQ GLWFK DQG
RI EXLOGLQJV DQG VWUXFWXUHV 7KHVH
HPEDQNPHQW FDYHLQV $OVR LQDGHTXDWH
UHTXLUHPHQWVDUHLQWHQGHGWRSURWHFWWKHSXEOLF
XQGHUSLQQLQJ RI DGMRLQLQJ H[LVWLQJ VWUXFWXUHV
IURP LQMXU\ DQG DGMRLQLQJ SURSHUW\ IURP
DQGWKHFDUHOHVVUHPRYDORIH[LVWLQJVWUXFWXUHV
GDPDJH
KDYHSURGXFHGFRQVWUXFWLRQIDLOXUHV
5HTXLUHG H[LWV H[LVWLQJ VWUXFWXUDO HOHPHQWV ILUH
SURWHFWLRQGHYLFHVDQGVDQLWDU\VDIHJXDUGVVKDOOEH
6(&7,21*(1(5$/ PDLQWDLQHG DW DOO WLPHV GXULQJ UHPRGHOLQJ
 6FRSH DOWHUDWLRQVUHSDLUVRUDGGLWLRQVWRDQ\EXLOGLQJRU
VWUXFWXUH
7KH SURYLVLRQVRI WKLVFKDSWHUVKDOOJRYHUQVDIHW\
GXULQJFRQVWUXFWLRQWKDWLVXQGHUWKHMXULVGLFWLRQRI ([FHSWLRQV
WKLVFRGHDQGWKHSURWHFWLRQRIDGMDFHQWSXEOLFDQG  :KHQVXFKUHTXLUHGHOHPHQWVRUGHYLFHVDUH
SULYDWHSURSHUWLHV EHLQJDOWHUHGRUUHSDLUHGDGHTXDWHVXEVWLWXWH
™ 7KHIXQGDPHQWDOUDWLRQDOHEHKLQGWKLVFKDSWHU SURYLVLRQVVKDOOEHPDGH
LV WR HVWDEOLVK WKDW UHDVRQDEOH VDIHW\  :KHQWKHH[LVWLQJEXLOGLQJLVQRWRFFXSLHG
SUHFDXWLRQV DUH WR EH SURYLGHG GXULQJ WKH
FRQVWUXFWLRQ RU GHPROLWLRQ SURFHVV WR SURWHFW ™ 'HPROLWLRQ DQG FRQVWUXFWLRQ RSHUDWLRQV PXVW
WKH SXEOLF IURP LQMXU\ DQG DGMRLQLQJ SURSHUW\ QRW FUHDWH D KD]DUG IRU WKH RFFXSDQWV RI D
IURP GDPDJH 7KLV FKDSWHU GRHV QRW DGGUHVV EXLOGLQJ GXULQJ DQ DOWHUDWLRQ RU DGGLWLRQ $V
SURMHFWV QRW DVVRFLDWHG ZLWK D EXLOGLQJ RU VXFK WKH H[LVWLQJ ILUH SURWHFWLRQ PHDQV RI
VWUXFWXUH6HFWLRQHVWDEOLVKHVWKHVFRSH HJUHVV HOHPHQWV DQG VDIHW\ V\VWHPV PXVW
DV DSSOLFDEOH WR EXLOGLQJV RU VWUXFWXUHV )RU UHPDLQ LQ SODFH DQG EH IXQFWLRQDO +RZHYHU
H[DPSOH WKH ZLGHQLQJ RU GHHSHQLQJ RI DQ WZRH[FHSWLRQVDUHSURYLGHGLQWKLVVHFWLRQWKDW
H[LVWLQJ ULYHU IRU IORRG FRQWURO SXUSRVHV RU D SHUPLW WKH ILUH SURWHFWLRQ PHDQV RI HJUHVV
VLPLODU SURMHFW ZRXOG QRW EH UHJXODWHG E\ WKLV HOHPHQWV DQG VDIHW\ V\VWHPV WR EH FKDQJHG
FKDSWHU PRGLILHGRUUHPRYHG7KHILUVWRSWLRQSURYLGHV
DQDOWHUQDWLYHPHWKRGWKDWPXVWEHDSSURYHGE\
 6WRUDJH DQG SODFHPHQW  &RQVWUXFWLRQ WKHEXLOGLQJRIILFLDO7KHVHFRQGRSWLRQLVVLPSO\
HTXLSPHQWDQGPDWHULDOVVKDOOEHVWRUHGDQGSODFHG WRKDYHDQXQRFFXSLHG EXLOGLQJZKLFKPHDQV
VR DV QRW WR HQGDQJHU WKH SXEOLF WKH ZRUNHUV RU WKDWUHVLGHQWVRIDGZHOOLQJXQLWRUHPSOR\HHVRI
DGMRLQLQJ SURSHUW\ IRU WKH GXUDWLRQ RI WKH D EXVLQHVV DUH QRW WR EH SUHVHQW GXULQJ WKH
FRQVWUXFWLRQSURMHFW FRQVWUXFWLRQRUGHPROLWLRQSURFHVV

™ 7KLV VHFWLRQ UHTXLUHV WKDW FRQVWUXFWLRQ  0DQQHURIUHPRYDO:DVWHPDWHULDOVVKDOO

PDWHULDOVDQGHTXLSPHQWPXVWEHORFDWHGDQG EHUHPRYHGLQDPDQQHUZKLFKSUHYHQWVLQMXU\RU
SURWHFWHGSXUVXDQWWRWKHJRYHUQLQJSURYLVLRQV GDPDJHWRSHUVRQVDGMRLQLQJSURSHUWLHVDQGSXEOLF
RIWKLVFKDSWHUVRWKDWWKHSXEOLFDQGDGMRLQLQJ ULJKWVRIZD\
SURSHUW\ DUH VDIHJXDUGHG DW DOO WLPHV GXULQJ
FRQVWUXFWLRQRUGHPROLWLRQSURFHVVHV ™ 6DIHDQGVDQLWDU\SURFHGXUHVIRUWKHUHPRYDORI
EXLOGLQJ FRQVWUXFWLRQ DQG GHPROLWLRQ ZDVWH
 5HPRGHOLQJDQGDGGLWLRQV PXVW EH SURYLGHG 7KH PHWKRG RI ZDVWH
UHPRYDOPXVWEHFRQWUROOHGVXFKWKDWGHEULVZLOO

6%&&& 

&+$37(5²&216758&7,216$)(*8$5'6

QRWSRVHDKD]DUGH\HVRUHRUQXLVDQFHWRWKH GHWHUPLQHGIURPWKHWDEOHWKHDSSOLFDEOHFRGH
SXEOLFDQGQHLJKERULQJSURSHUWLHV([DPSOHVRI VHFWLRQ VXFK DV 6HFWLRQ  IRU
DFFHSWDEOH SUDFWLFHV LQFOXGH HYLGHQFH WKDW D FRQVWUXFWLRQ UDLOLQJV 6HFWLRQ  IRU
SURIHVVLRQDOGLVSRVDOVHUYLFHZLOOKDXODZD\WKH EDUULHUV DQG 6HFWLRQ  IRU FRYHUHG
GHEULV OLPLWLQJ DUHDV XVHG IRU VWRULQJ DQG ZDONZD\VPXVWEHIROORZHG
KDQGOLQJ GHPROLVKHG PDWHULDOV HQFORVLQJ
VWRUDJHDUHDVVRWKDWRQO\DXWKRUL]HGSHUVRQQHO  :DONZD\V  $ ZDONZD\ VKDOO EH
FDQJDLQDFFHVVHVWDEOLVKLQJURXWHVWKDWZDVWH SURYLGHG IRU SHGHVWULDQ WUDYHO LQ IURQW RI HYHU\
UHPRYDOYHKLFOHVDUHSHUPLWWHGWRXVHFRYHULQJ FRQVWUXFWLRQ DQG GHPROLWLRQ VLWH XQOHVV WKH
RU WDUSLQJ GHEULV WR SUHYHQW IO\LQJ REMHFWV DXWKRULW\ KDYLQJ MXULVGLFWLRQ DXWKRUL]HV WKH
SURYLGLQJIXOO\HQFORVHGFKXWHVWRFRQWUROIDOOLQJ VLGHZDONWREHIHQFHGRUFORVHG:DONZD\VVKDOOEH
REMHFWV DQG GXVW DQG VFKHGXOLQJ ZDVWH RIVXIILFLHQWZLGWKWRDFFRPPRGDWHWKHSHGHVWULDQ
UHPRYDO ZKHQ DQ DGMRLQLQJ SURSHUW\ DQG WKH WUDIILFEXWLQQRFDVHVKDOOWKH\EHOHVVWKDQ
SXEOLF ZLOO EH OHDVW H[SRVHG WR XQXVXDO DQG PHWHULQZLGWK:DONZD\VVKDOOEHSURYLGHGZLWKD
SRVVLEO\ GDQJHURXV VLWXDWLRQV FDXVHG E\ GXUDEOH ZDONLQJ VXUIDFH :DONZD\V VKDOO EH
IXPHVQRLVH
DFFHVVLEOHLQDFFRUGDQFHZLWK&KDSWHURIWKH6%&
™ GXVW DQG XQIDPLOLDU HYHQWV LQYROYHG GXULQJ D
GHPROLWLRQ SURFHVV 1RWH WKDW WKH DFFHSWHG  DQG VKDOO EH GHVLJQHG WR VXSSRUW DOO LPSRVHG
SUDFWLFH RI ZDVWH UHPRYDO LV VXEMHFW WR WKH ORDGV DQG LQ QR FDVH VKDOOWKH GHVLJQOLYH ORDG EH
DSSURYDO RI WKH EXLOGLQJ RIILFLDO $ JURZLQJ OHVVWKDQN1P
QXPEHU RI ORFDO MXULVGLFWLRQV DV SDUW RI WKHLU ™ &RQVWUXFWLRQ RSHUDWLRQV PXVW QRW QDUURZ RU
VXVWDLQDELOLW\ RU JUHHQ SURJUDPV OLPLW WKH LPSHGH WKH QRUPDO IORZ RI SHGHVWULDQ WUDIILF
DPRXQW RI FRQVWUXFWLRQ DQG GHPROLWLRQ GHEULV DORQJDZDONZD\E\WKHSODFHPHQWRIDIHQFHRU
WKDWFDQEHVHQWWRODQGILOOV)LUHVDIHW\GXULQJ RWKHU HQFORVXUH 1RWH WKDW WKH DSSOLFDEOH
FRQVWUXFWLRQ JRYHUQLQJ DXWKRULW\ PXVW DSSURYH DQ\
 )LUH VDIHW\ GXULQJ FRQVWUXFWLRQ  )LUH FRQVWUXFWLRQ RSHUDWLRQV WKDW ZLOO FDXVH WKH
VDIHW\ GXULQJ FRQVWUXFWLRQ VKDOO FRPSO\ ZLWK WKH QDUURZLQJRULPSHGDQFHRIDZDONZD\VXFKDV
WKH VLGHZDON ,I D ZDONZD\ LV QDUURZHG RU
DSSOLFDEOH UHTXLUHPHQWV RI WKH 6%&  DQG WKH
HQFORVHGWKHFRQVWUXFWLRQRIDQRWKHURUZLGHU
DSSOLFDEOHSURYLVLRQVRI&KDSWHURIWKH6%& ZDONZD\ LV UHTXLUHG IRU DOO SHGHVWULDQV 7KH
™ 7KLVUHTXLUHPHQWFRUUHODWHV6HFWLRQRIWKH ZDONZD\ PXVW EH DEOH WR KDQGOH WKH QRUPDO
6%&  DGGUHVVLQJ ³&RQVWUXFWLRQ DQWLFLSDWHG IORZ RI SHGHVWULDQ WUDIILF DQG PXVW
6DIHJXDUGV´ DQG WKH FRQVWUXFWLRQ VDIHJXDUG QRW EH OHVV WKDQ WKH PLQLPXP  P ZLGWK
UHTXLUHPHQWVRIWKLVFKDSWHUZLWKWKH6%& (YHQWKRXJKVXFKZDONZD\VPD\EHWHPSRUDU\
UHTXLUHPHQWVRQILUHVDIHW\GXULQJFRQVWUXFWLRQ LQVWDOODWLRQVWKH\PD\VWLOOQHHGWREHXVDEOHE\
DQG GHPROLWLRQ &KDSWHU  RI WKH 6%&  SHUVRQVZLWKGLVDELOLWLHVZKHUHVXFKZDONZD\V
³)LUH 6DIHW\ 'XULQJ &RQVWUXFWLRQ DQG PXVWSURYLGHDQDFFHVVLEOHURXWHLQDFFRUGDQFH
'HPROLWLRQ´KDVDOOWKHILUHVDIHW\UHTXLUHPHQWV ZLWK 6%&  &KDSWHU  ,Q DGGLWLRQ WKH
SURYLGHG LQ RQH SODFH IRU ILUHVDIH RSHUDWLRQV ZDONZD\ PXVW EH D VWDEOH VXUIDFH WKDW LV
GXULQJFRQVWUXFWLRQDQGGHPROLWLRQ FDSDEOH RI VXSSRUWLQJ DOO LPSRVHG ORDGV 7KH
PLQLPXPGHVLJQORDGRIWKHZDONZD\PXVWQRW
 3URWHFWLRQ RI SHGHVWULDQV  3HGHVWULDQV EHOHVVWKDQN1P
VKDOOEHSURWHFWHGGXULQJFRQVWUXFWLRQUHPRGHOLQJ
DQGGHPROLWLRQDFWLYLWLHVDVUHTXLUHGE\&KDSWHU  'LUHFWLRQDO EDUULFDGHV
RI WKH 6%&  DQG 7DEOH 6LJQVVKDOOEH 3HGHVWULDQWUDIILFVKDOOEHSURWHFWHGE\DGLUHFWLRQDO
SURYLGHGWRGLUHFWSHGHVWULDQWUDIILF EDUULFDGH ZKHUH WKH ZDONZD\ H[WHQGV LQWR WKH
VWUHHW 7KH GLUHFWLRQDO EDUULFDGH VKDOO EH RI
™ 6DIHJXDUGVDUHUHTXLUHGWREHLQSODFHGXULQJ VXIILFLHQWVL]HDQGFRQVWUXFWLRQWRGLUHFWYHKLFXODU
FRQVWUXFWLRQ RU GHPROLWLRQ RSHUDWLRQV LQ
WUDIILFDZD\IURPWKHSHGHVWULDQSDWK
DFFRUGDQFHZLWK7DEOHDQGWKLVFKDSWHU
,QDGGLWLRQVLQFHFRQVWUXFWLRQRSHUDWLRQVDOWHU ™ 6LPLODU WR WKH JXLGHOLQHV WKDW JRYHUQ WKH
WKH IDPLOLDU VHWWLQJ DQG SDWK RI WUDYHO LW LV SURYLVLRQV WR SURWHFW HPSOR\HHV ZKLOH GRLQJ
QHFHVVDU\ WR SURYLGH VRPH IRUP RI YLVLEOH URDGZRUNWKLVVHFWLRQHVWDEOLVKHVWKDWDEDUULHU
GLUHFWLRQDOVLJQWROHDGWKHSXEOLFWRZDUGVDIHW\ PXVWEHHUHFWHG7KHEDUULHUPXVWEHFDSDEOH
DQGDZD\IURPSRWHQWLDOKD]DUGV RI UHGLUHFWLQJ DQG UHJXODWLQJ WKH IORZ RI
™ 7$%/(6HHEHORZ YHKLFXODUWUDIILFZKHUHFRQVWUXFWHGRUSURMHFWHG
™ 7DEOHHVWDEOLVKHVWKHW\SHRISURWHFWLRQ LQWR D VWUHHW $Q H[DPSOH RI KRZ WR UHJXODWH
UHTXLUHG EDVHG RQ WKH ORFDWLRQ WR RYHUKHDG WUDIILF LV WR SURYLGH WKH QHFHVVDU\ ZDUQLQJV
KD]DUGV DQG GLVWDQFH LQ UHODWLRQ WR JURXQG QRWLFH RI FDXWLRQ DQG LQVWUXFWLRQV WR WKH
KD]DUGV 2QFH WKH W\SH RI SURWHFWLRQ LV RSHUDWRUV RI PRWRU YHKLFOHV ZLWK VLJQV DQG

6%&&& 

&+$37(5²&216758&7,216$)(*8$5'6

FRORUVWKDWDUHFRPPRQWRWKHJXLGHOLQHV1RWH  :RRG VWUXFWXUDO XVH SDQHOV  PP RU 
WKDW WKH LQWHQW RI WKLV YLVXDO EDUULHU LV WR NHHS PPLQWKLFNQHVVVKDOOKDYHVWXGVVSDFHGQRW
SHGHVWULDQVRXWRIYHKLFXODUWUDIILFDQGSUHYHQW PRUHWKDQPHWHURQFHQWHUSURYLGHGD
YHKLFOHV IURP HQFURDFKLQJ RQ RU XVLQJ WKH PP E\  PP VWLIIHQHU LV SODFHG
SHGHVWULDQZDONZD\DVDURDGZD\
KRUL]RQWDOO\DWWKHPLGKHLJKWZKHUHWKHVWXG
 &RQVWUXFWLRQ UDLOLQJV VSDFLQJH[FHHGVPPRQFHQWHU
&RQVWUXFWLRQUDLOLQJVVKDOOEHDWOHDVWPHWHULQ  :RRGVWUXFWXUDOXVHSDQHOVPPRUWKLFNHU
KHLJKWDQGVKDOOEHVXIILFLHQWWRGLUHFWSHGHVWULDQV VKDOOQRWVSDQRYHUPHWHU
DURXQGFRQVWUXFWLRQDUHDV ™ 7KLVVHFWLRQHVWDEOLVKHVWZRPHWKRGVWKDWFDQ
™ $ EDUULHU FRQVLVWLQJ RI D KRUL]RQWDO UDLO DQG EH XVHG WR GHVLJQ EDUULHUV 7KH ILUVW PHWKRG
VXSSRUWVPXVWEHFRQVWUXFWHGZLWKDPLQLPXP HVWDEOLVKHV WKDW WKH EDUULHU FDQ EH GHVLJQHG
KHLJKWRIP,QDGGLWLRQWKLVEDUULHUPXVWEH XVLQJ WKH VDPH PDWHULDOV DQG DVVHPEO\
FDSDEOH RI FRQWUROOLQJ WKH IORZ RI SHGHVWULDQ LQVWUXFWLRQVDV LQGLFDWHGLQ,WHPVWKURXJK
WUDIILFE\URXWLQJWUDYHODZD\IURPWKHKD]DUGV 7KHVHFRQGPHWKRGSURYLGHVIRUDEDUULHUWKDW
DVVRFLDWHG ZLWK D FRQVWUXFWLRQ DUHD :KHUH ZLOOUHVLVWWKHORDGVLPSRVHGRQLWWREHSDUWRI
FRQVWUXFWLRQUDLOLQJVDUHORFDWHGZKHUHJXDUGV DGHVLJQHGDVVHPEO\7KHORDGVZKLFKQHHGWR
ZRXOGEHUHTXLUHGE\6%&6HFWLRQ EHUHVLVWHGDUHWKHVDPHDVWKRVHHVWDEOLVKHG
VXFK UDLOLQJV ZRXOG DOVR QHHG WR FRPSO\ ZLWK LQ6%&&KDSWHU
6%&6HFWLRQ(YHQZKHUHJXDUGVDUH
 &RYHUHG ZDONZD\V  &RYHUHG
QRW UHTXLUHG WKH GHVLJQ VWDQGDUGV IRU JXDUGV
FRXOG EH XVHIXO LQ GHVLJQLQJ FRQVWUXFWLRQ ZDONZD\V VKDOO KDYH D PLQLPXP FOHDU KHLJKW RI
UDLOLQJV  P DV PHDVXUHG IURP WKH IORRU VXUIDFH WR WKH
FDQRS\ RYHUKHDG $GHTXDWH OLJKWLQJ VKDOO EH
 %DUULHUV  %DUULHUV VKDOO EH D SURYLGHG DW DOO WLPHV &RYHUHG ZDONZD\V VKDOO EH
PLQLPXPRIPHWHULQKHLJKWDQGVKDOOEHSODFHG GHVLJQHGWR VXSSRUW DOOLPSRVHGORDGV ,Q QR FDVH
RQWKHVLGHRIWKHZDONZD\QHDUHVWWKHFRQVWUXFWLRQ VKDOOWKHGHVLJQOLYHORDGEHOHVVWKDQN1PIRU
%DUULHUV VKDOO H[WHQG WKH HQWLUH OHQJWK RI WKH WKHHQWLUHVWUXFWXUH
FRQVWUXFWLRQVLWH2SHQLQJVLQVXFKEDUULHUVVKDOOEH
SURWHFWHGE\GRRUVZKLFKDUHQRUPDOO\NHSWFORVHG ([FHSWLRQ  5RRIV DQG VXSSRUWLQJ VWUXFWXUHV RI
FRYHUHG ZDONZD\V IRU QHZ OLJKWIUDPH
™ :KHQDEDUULHULVUHTXLUHGE\7DEOHLW FRQVWUXFWLRQQRWH[FHHGLQJWZRVWRULHVDERYHJUDGH
PXVW EH FRQVWUXFWHG WR LPSHGH VHSDUDWH DQG
SODQHDUHSHUPLWWHGWREHGHVLJQHGIRUDOLYHORDGRI
REVWUXFW SDVVDJH RI SHGHVWULDQV RQWR D
FRQVWUXFWLRQ VLWH 7KH VWUXFWXUH PXVW EH D
N1PRUWKHORDGVLPSRVHGRQWKHPZKLFKHYHU
PLQLPXP  P LQ KHLJKW DQG ORFDWHG LV JUHDWHU ,Q OLHX RI VXFK GHVLJQV WKH URRI DQG
FRQWLQXRXVO\ DORQJ WKH ZDONZD\ RQ WKH VLGH VXSSRUWLQJ VWUXFWXUH RI D FRYHUHG ZDONZD\ DUH
ZKHUH FRQVWUXFWLRQ DFWLYLWLHV DUH EHLQJ GRQH SHUPLWWHGWREHFRQVWUXFWHGDVIROORZV
1RWHWKDWRSHQLQJVVXFKDVGRRUVRUJDWHVDUH 
SHUPLWWHGDVORQJDVWKHRQO\WLPHWKH\DUHRSHQ  )RRWLQJV VKDOO EH FRQWLQXRXV  PP î 
LVGXULQJXVHE\DXWKRUL]HGSHUVRQQHO$VVXFK PPPHPEHUV
ZKHQ WKH GRRUV RU JDWHV DUH QRW EHLQJ XVHG  3RVWVQRWOHVVWKDQPPîPPVKDOOEH
WKH\PXVWUHPDLQFORVHG SURYLGHGRQERWKVLGHVRIWKHURRIDQGVSDFHG
 %DUULHUGHVLJQ%DUULHUVVKDOOEH QRWPRUHWKDQPHWHURQFHQWHU
GHVLJQHGWRUHVLVWORDGVUHTXLUHGLQ &KDSWHU  RI  6WULQJHUV QRW OHVV WKDQ  PP î  PP
WKH6%&XQOHVVFRQVWUXFWHGDVIROORZV VKDOOEHSODFHGRQHGJHXSRQWKHSRVWV
 -RLVWVUHVWLQJRQWKHVWULQJHUVVKDOOEHDWOHDVW
 %DUULHUVVKDOOEHSURYLGHGZLWKPPî  PP î  PP DQG VKDOO EH VSDFHG QRW
PPWRSDQGERWWRPSODWHV PRUHWKDQPPRQFHQWHU
 7KHEDUULHUPDWHULDOVKDOOEHDPLQLPXPRI  7KHGHFNVKDOOEHSODQNVDWOHDVWPPWKLFN
PP ERDUGV RU  PP ZRRG VWUXFWXUDO XVH RU ZRRG VWUXFWXUDO SDQHOV ZLWK DQ H[WHULRU
SDQHOV H[SRVXUH GXUDELOLW\ FODVVLILFDWLRQ DW OHDVW 
 :RRG VWUXFWXUDO XVH SDQHOV VKDOO EH ERQGHG PPWKLFNQDLOHGWRWKHMRLVWV
ZLWKDQDGKHVLYHLGHQWLFDOWRWKDWIRUH[WHULRU  (DFK SRVWVKDOOEH NQHHEUDFHGWR MRLVWVDQG
ZRRGVWUXFWXUDOXVHSDQHOV VWULQJHUV E\  PP î  PP PLQLPXP
 :RRGVWUXFWXUDOXVHSDQHOVPPRUPP PHPEHUVPHWHUORQJ
LQWKLFNQHVVVKDOOKDYHVWXGVVSDFHGQRWPRUH  $PPîPPPLQLPXPFXUEVKDOOEH
WKDQPPRQFHQWHU VHWRQHGJHDORQJWKHRXWVLGHHGJHRIWKHGHFN

6%&&& 

&+$37(5²&216758&7,216$)(*8$5'6

™ :DONZD\VZLWKDFRYHULQJWKDWH[WHQGVRXWRYHU H[FDYDWLRQLVORFDWHGJUHDWHUWKDQPIURP
WKHSHGHVWULDQSDWKRIWUDYHOSXUVXDQWWR7DEOH WKH HGJH RI WKH URDGZD\ WKH EXLOGLQJ RIILFLDO
PXVWEHDWOHDVWPLQKHLJKW7KH PXVWHYDOXDWHWKHOHYHORIKD]DUGIRUWKHSXEOLF
PHDVXUHPHQWPXVWEHWDNHQIURPWKHWRSRIWKH DQG WKH QHFHVVDU\ SUHFDXWLRQV WR WDNH $V
ZDONLQJ VXUIDFH YHUWLFDOO\ XSZDUG WR WKH VXFK WKH EXLOGLQJ RIILFLDO KDV WKH DXWKRULW\ WR
XQGHUVLGH RI WKH URRI FRYHULQJ 7KH ZDONZD\ RUGHU WKH FRQVWUXFWLRQ RI D VWUXFWXUDO EDUULHU
PXVWPDLQWDLQDVDWLVIDFWRU\OHYHORIOLJKWWRWKH 1RWH WKDW DQ\ EDUULHU HUHFWHG PXVW PDLQWDLQ
VSDFH WKDW ZLOO EH HTXDO WR RU EHWWHU WKDQ WKDW RWKHU SURYLVLRQV RI WKH FRGH VXFK WKDW LW LV
SURYLGHG SULRU WR WKH LQVWDOODWLRQ RI WKH FDSDEOH RI KDQGOLQJ DQG UHVLVWLQJ WKH GHVLJQ
SURWHFWLYHFRYHULQJ7KHFRYHUHGZDONZD\PXVW ZLQGORDGVGHQRWHGLQ6%&&KDSWHU
DOVR EH VWUXFWXUDOO\ FDSDEOH RI UHVLVWLQJ WKH
GHVLJQ ORDGV HVWDEOLVKHG LQ 6%&  &KDSWHU  )DFLOLWLHV UHTXLUHG  6DQLWDU\ IDFLOLWLHV
EXWQRWOHVVWKDQN1PIRUWKHOLYHORDG VKDOOEHSURYLGHGGXULQJFRQVWUXFWLRQUHPRGHOLQJ
1RWH WKDW WKLV VHFWLRQ SURYLGHV WZR DOWHUQDWLYH RUGHPROLWLRQDFWLYLWLHVLQDFFRUGDQFHZLWKWKH6%&
GHVLJQRSWLRQV2QHRSWLRQSHUPLWVWKHFRYHUHG 
ZDONZD\WRUHVLVWWKHGHVLJQORDGVHVWDEOLVKHG
™ &RQVWUXFWLRQ HPSOR\HHV PXVW KDYH SOXPELQJ
LQ 6%&  &KDSWHU  EXW QRW OHVV WKDQ WKH
IDFLOLWLHV DYDLODEOH GXULQJ WKH FRQVWUXFWLRQ RU
PLQLPXP  N1P OLYH ORDG LI QHDUE\
GHPROLWLRQ SURFHVV RI D EXLOGLQJ 7KH IDFLOLWLHV
FRQVWUXFWLRQ GRHV QRW H[FHHG WZR VWRULHV LQ
PXVW FRQIRUP WR WKH UHTXLUHPHQWV VHW IRUWK LQ
KHLJKW DQG WKH FRQVWUXFWLRQ PDWHULDOV DUH
WKH6%&
OLJKWZHLJKW VXFK DV OLJKWIUDPH FRQVWUXFWLRQ
7KHVHFRQGRSWLRQLVWRFRQVWUXFWWKHFRYHUHG 
ZDONZD\LQDFFRUGDQFHZLWKWKHVHYHQFULWHULD
VHWIRUWKLQWKLVVHFWLRQ 6(&7,213527(&7,212)
$'-2,1,1*3523(57<
 5HSDLU PDLQWHQDQFH DQG
UHPRYDO3HGHVWULDQSURWHFWLRQUHTXLUHGE\6HFWLRQ  3URWHFWLRQ UHTXLUHG  $GMRLQLQJ SXEOLF
 VKDOO EH PDLQWDLQHG LQ SODFH DQG NHSW LQ DQG SULYDWH SURSHUW\ VKDOO EH SURWHFWHG IURP
JRRGRUGHUIRUWKHHQWLUHOHQJWKRIWLPHSHGHVWULDQV GDPDJH GXULQJ FRQVWUXFWLRQ UHPRGHOLQJ DQG
PD\ EH HQGDQJHUHG 7KH RZQHU RU WKH RZQHU¶V GHPROLWLRQZRUN3URWHFWLRQPXVWEH SURYLGHGIRU
DJHQW XSRQ WKH FRPSOHWLRQ RI WKH FRQVWUXFWLRQ IRRWLQJV IRXQGDWLRQV SDUW\ ZDOOV FKLPQH\V
DFWLYLW\ VKDOO LPPHGLDWHO\ UHPRYH ZDONZD\V VN\OLJKWV DQG URRIV 3URYLVLRQV VKDOO EH PDGH WR
GHEULVDQGRWKHUREVWUXFWLRQVDQGOHDYHVXFKSXEOLF FRQWURO ZDWHU UXQRII DQG HURVLRQ GXULQJ
SURSHUW\LQDVJRRGDFRQGLWLRQDVLWZDVEHIRUHVXFK FRQVWUXFWLRQ RU GHPROLWLRQ DFWLYLWLHV 7KH SHUVRQ
ZRUNZDVFRPPHQFHG PDNLQJRUFDXVLQJDQH[FDYDWLRQWREHPDGHVKDOO
SURYLGH ZULWWHQ QRWLFH WR WKH RZQHUV RI DGMRLQLQJ
™ $Q\ VDIHJXDUGV UHTXLUHG E\ WKLV FKDSWHU PXVW
EH NHSW LQ JRRG IXQFWLRQDO FRQGLWLRQ IRU WKH
EXLOGLQJVDGYLVLQJWKHPWKDWWKHH[FDYDWLRQLVWREH
HQWLUHGXUDWLRQRIWKHFRQVWUXFWLRQRUGHPROLWLRQ PDGH DQG WKDW WKH DGMRLQLQJ EXLOGLQJV VKRXOG EH
DFWLYLW\VRWKDWWKH SXEOLF ZLOOQRWEHSODFHGLQ SURWHFWHG6DLG QRWLILFDWLRQVKDOO EH GHOLYHUHGQRW
KDUP¶V ZD\ 2QFH D EXLOGLQJ RU VWUXFWXUH LV OHVVWKDQGD\VSULRUWRWKHVFKHGXOHGVWDUWLQJGDWH
RFFXSLDEOHDQGWKHVLWHLVSURSHUO\JUDGHGWKH RIWKHH[FDYDWLRQ
SURWHFWLRQ PXVW EH UHPRYHG $V VXFK SXEOLF
™ 7KLVVHFWLRQHPSKDVL]HVWKHQHHGWRSURWHFWDOO
SURSHUW\WKDW ZDVDIIHFWHG E\WKHFRQVWUXFWLRQ
H[LVWLQJ SXEOLF DQG SULYDWH SURSHUW\ ERUGHULQJ
DFWLYLW\ PXVW EH UHVWRUHG WR RU OHIW LQ WKH
SURSRVHG FRQVWUXFWLRQ RU GHPROLWLRQ
FRQGLWLRQWKDWH[LVWHGSULRUWRWKHZRUN
RSHUDWLRQV7KHWHUP³SURSHUW\´RQO\DOOXGHVWR
 $GMDFHQW WR H[FDYDWLRQV  (YHU\ H[LVWLQJ EXLOGLQJV $V VXFK DQ\ EXLOGLQJ
H[FDYDWLRQRQDVLWHORFDWHGPHWHURUOHVVIURP HOHPHQW RU V\VWHP PXVW EH SURYLGHG ZLWK D
WKHVWUHHWORWOLQHVKDOOEHHQFORVHGZLWKDEDUULHUQRW VDIHJXDUGWKDWZLOOOLPLWWKHGDPDJHWKDWFRXOG
OHVVWKDQPHWHUKLJK:KHUHORFDWHGPRUHWKDQ EHFDXVHGIURPWKH SURFHVVHVLQYROYHGWRWKH
HTXLSPHQW DQG PDWHULDOV XVHG $GGLWLRQDOO\
PHWHUIURPWKHVWUHHWORWOLQHDEDUULHUVKDOOEH
VRLOHURVLRQDQGODQGGLVEXUVHPHQWFRQWUROPXVW
HUHFWHG ZKHQ UHTXLUHG E\ WKH EXLOGLQJ RIILFLDO EH SURYLGHG WR SUHYHQW VSLOODJH DQG VSUHDG RI
%DUULHUVVKDOOEHRIDGHTXDWHVWUHQJWKWRUHVLVWZLQG GLVWXUEHG VRLO GHEULV 7KH RZQHU RU RZQHU¶V
SUHVVXUHDVVSHFLILHGLQ&KDSWHURIWKH6%& DJHQWKDVWKHUHVSRQVLELOLW\WRSURYLGHDZULWWHQ
™ 7KLV VHFWLRQ HVWDEOLVKHV WKDW ZKHQHYHU QRWLFHGD\VLQDGYDQFHIRUDQ\GHPROLWLRQRU
H[FDYDWLRQ LV WR WDNH SODFH OHVV WKDQ  P FRQVWUXFWLRQ DFWLYLWLHV WKDW PD\ ZDUUDQW
IURPWKHHGJHRIDURDGZD\DEDUULHUPXVWEH ERUGHULQJORWVWREHSURWHFWHGIURPGDPDJH
HUHFWHGZLWKDPLQLPXPKHLJKWRIP,IWKH 

6%&&& 

&+$37(5²&216758&7,216$)(*8$5'6

6(&7,217(0325$5<86(2) WKH XWLOLW\ FRPSDQLHV DQG WKH DXWKRULW\ KDYLQJ

675((76$//(<6$1'38%/,& MXULVGLFWLRQLQFOXGLQJWKHILUHGHSDUWPHQWPD\
KDYH VSHFLILF UHTXLUHPHQWV DQG JXLGHOLQHV WR
3523(57< IROORZ WR OLPLW WKH SRVVLELOLW\ RI GDPDJH DQG
 6WRUDJHDQGKDQGOLQJRIPDWHULDOV7KH REVWUXFWLRQ
WHPSRUDU\XVHRIVWUHHWVRUSXEOLFSURSHUW\IRUWKH 
VWRUDJH RU KDQGOLQJ RI PDWHULDOV RU HTXLSPHQW
UHTXLUHG IRU FRQVWUXFWLRQ RU GHPROLWLRQ DQG WKH 6(&7,21),5((;7,1*8,6+(56
SURWHFWLRQSURYLGHGWRWKHSXEOLFVKDOOFRPSO\ZLWK  :KHUH UHTXLUHG  $OO VWUXFWXUHV XQGHU
WKHSURYLVLRQVRIWKH DXWKRULW\KDYLQJMXULVGLFWLRQ FRQVWUXFWLRQ DOWHUDWLRQ RU GHPROLWLRQ VKDOO EH
DQGWKLVFKDSWHU SURYLGHGZLWKQRWOHVVWKDQRQHDSSURYHGSRUWDEOH
™ ,Q DGGLWLRQ WR DSSOLFDEOH UHJXODWLRQV WKLV ILUHH[WLQJXLVKHULQ DFFRUGDQFHZLWKWKH6%& 
FKDSWHUHVWDEOLVKHVSURFHGXUHVIRUWKHVWRUDJH DQG VL]HG IRU QRW OHVV WKDQ RUGLQDU\ KD]DUG DV
RI FRQVWUXFWLRQ PDWHULDOV DQG HTXLSPHQW WR IROORZV
SURWHFW DFFHVV WR SXEOLF VDIHW\ HTXLSPHQW 
XWLOLWLHVDQGSXEOLFWUDQVSRUWDWLRQIDFLOLWLHV  $W HDFK VWDLUZD\ RQ DOO IORRU OHYHOV ZKHUH
 2EVWUXFWLRQV &RQVWUXFWLRQ PDWHULDOVDQG FRPEXVWLEOHPDWHULDOVKDYHDFFXPXODWHG
HTXLSPHQW VKDOO QRW EH SODFHG RU VWRUHG VR DV WR  ,QHYHU\VWRUDJHDQGFRQVWUXFWLRQVKHG
REVWUXFWDFFHVVWRILUHK\GUDQWVVWDQGSLSHVILUHRU  $GGLWLRQDOSRUWDEOHILUHH[WLQJXLVKHUVVKDOOEH
SROLFHDODUPER[HVFDWFKEDVLQVRUPDQKROHVQRU SURYLGHG ZKHUH VSHFLDO KD]DUGV H[LVW
VKDOOVXFKPDWHULDORUHTXLSPHQWEHORFDWHGZLWKLQ LQFOXGLQJEXWQRWOLPLWHGWRWKHVWRUDJHDQG
PHWHURIDVWUHHWLQWHUVHFWLRQRUSODFHGVRDVWR XVHRIIODPPDEOHDQGFRPEXVWLEOHOLTXLGV
REVWUXFWQRUPDOREVHUYDWLRQVRIWUDIILFVLJQDOVRUWR ™ $ PHDQV WR SURYLGH ILUH SURWHFWLRQ GXULQJ WKH
KLQGHUWKHXVHRISXEOLFWUDQVLWORDGLQJSODWIRUPV FRQVWUXFWLRQ DQG GHPROLWLRQ SURFHVV LV
™ 7KLV VHFWLRQ LQGLFDWHV WKDW SUHFDXWLRQV IRU UHTXLUHG $V VXFK WKLV VHFWLRQ LQGLFDWHV
PDWHULDODQGHTXLSPHQWVWRUDJHDQGSODFHPHQW SURYLVLRQV IRU SRUWDEOH ILUH H[WLQJXLVKHUV ,Q
PXVWEHSURYLGHGVRDVQRWWREORFNRUREVWUXFW DGGLWLRQ WR WKH SURYLVLRQV RI WKLV VHFWLRQ WKH
DFFHVV WR ILUH K\GUDQWV VWDQGSLSHV LQFOXGLQJ UHJXODWLRQV RI 6%&  6HFWLRQ  PXVW EH
ILUH GHSDUWPHQW 6LDPHVH FRQQHFWLRQV IRU PDLQWDLQHG
VSULQNOHUVDQGVWDQGSLSHVILUHRUSROLFHDODUP  )LUHKD]DUGV7KHSURYLVLRQVRIWKLVFRGH
ER[HVXWLOLW\ER[HVDQGPHWHUVFDWFKEDVLQVRU DQG WKH 6%&  VKDOO EH VWULFWO\ REVHUYHG WR
PDQKROHV RU DQ\ RWKHU YLWDO IDFLOLW\ ZLWK D VDIHJXDUG DJDLQVW DOO ILUH KD]DUGV DWWHQGDQW XSRQ
IXQFWLRQ WKDW FRQWULEXWHV WR WKH KHDOWK VDIHW\
FRQVWUXFWLRQRSHUDWLRQV
DQG ZHOIDUH RI WKH SXEOLF $OVR VWRUDJH PXVW
QRW EH SODFHG ZLWKLQ  P RI D VWUHHW ™ 0HWKRGV SURFHGXUHV DQG FRQVWUXFWLRQ
LQWHUVHFWLRQ LI LW REVWUXFWV WKH QRUPDO PDWHULDOV HDFK FRQWULEXWH LQ VRPH ZD\ WR
REVHUYDWLRQRIWUDIILFVLJQDOVRUKLQGHUVWKHXVH FUHDWLQJDILUHKD]DUG7KHUHIRUHLQDGGLWLRQWR
RIDQ\PDVVWUDQVLWORDGLQJSODWIRUPVVXFKDV WKHSURYLVLRQVRIWKHFRGHWKH 6%&PXVW
VLGHZDONEXVVWRSVWD[LZDLWLQJDUHDVHWF EHXVHGWRUHJXODWHWKHSURSHUPHDQVRIVDIHW\
WKDW PXVW EH SURYLGHG IRU D EXLOGLQJ EHLQJ
 8WLOLW\ IL[WXUHV  %XLOGLQJ PDWHULDOV GHPROLVKHGDOWHUHGRUFRQVWUXFWHG
IHQFHVVKHGVRUDQ\REVWUXFWLRQRIDQ\NLQGVKDOO
QRWEHSODFHGVRDVWRREVWUXFWIUHHDSSURDFKWRDQ\ 
ILUH K\GUDQW ILUH GHSDUWPHQW FRQQHFWLRQ XWLOLW\ 6(&7,21(;,76
SROHPDQKROHILUHDODUPER[RUFDWFKEDVLQRUVR
DV WR LQWHUIHUH ZLWK WKH SDVVDJH RI ZDWHU LQ WKH  6WDLUZD\VUHTXLUHG:KHUHDEXLOGLQJKDV
JXWWHU3URWHFWLRQDJDLQVWGDPDJHVKDOOEHSURYLGHG EHHQFRQVWUXFWHGWRDKHLJKWJUHDWHUWKDQPHWHUV
WR VXFK XWLOLW\ IL[WXUHV GXULQJ WKH SURJUHVV RI WKH RU IRXU VWRULHV RU ZKHUH DQ H[LVWLQJ EXLOGLQJ
ZRUNEXWVLJKWRIWKHPVKDOOQRWEHREVWUXFWHG H[FHHGLQJPHWHUVLQEXLOGLQJKHLJKWLVDOWHUHG
DW OHDVW RQH WHPSRUDU\ OLJKWHG VWDLUZD\ VKDOO EH
™ 8WLOLW\IL[WXUHVVXFKDVWKRVHXVHGE\HOHFWULFDO
WHOHSKRQHZDWHUJDVRUVHZHUFRPSDQLHVDV
SURYLGHG XQOHVV RQH RU PRUH RI WKH SHUPDQHQW
ZHOO DV ILUH SURWHFWLRQ GHYLFHV PXVW QRW EH VWDLUZD\VDUHHUHFWHGDVWKHFRQVWUXFWLRQSURJUHVVHV
KLGGHQ IURP YLHZ DQG QRW EH EORFNHG IURP ™ 7HPSRUDU\ VWDLUZD\V PXVW EH FRQVWUXFWHG LQ
DFFHVVDQGXVH:KHQFRQVWUXFWLRQRSHUDWLRQV DFFRUGDQFH ZLWK 6%&  6HFWLRQ 
DUH QHDU D XWLOLW\ IL[WXUH SUHFDXWLRQV PXVW EH LQFOXGLQJ ULVHU WUHDG JXDUG DQG KDQGUDLO
SURYLGHGVRDVQRWWRFDXVHGDPDJH1RWHWKDW UHTXLUHPHQWV

6%&&& 

&+$37(5²&216758&7,216$)(*8$5'6

 0DLQWHQDQFHRIH[LWV5HTXLUHGPHDQVRI 6LPLODU WR EXLOGLQJV XQGHU FRQVWUXFWLRQ WKH

HJUHVV VKDOO EH PDLQWDLQHG DW DOO WLPHV GXULQJ VWDQGSLSH LV WR UHPDLQ LQ RSHUDWLRQ XS WR RQH
FRQVWUXFWLRQGHPROLWLRQUHPRGHOLQJRUDOWHUDWLRQV IORRU OHYHO EHORZ WKH IORRU EHLQJ GHPROLVKHG
DQGDGGLWLRQVWRDQ\EXLOGLQJ 1RWH WKDW WKH SXUSRVH RI WKLV VHFWLRQ LV WR
HVWDEOLVK WKH UHTXLUHPHQW IRU ILUH VDIHW\
([FHSWLRQ$SSURYHGWHPSRUDU\PHDQVRIHJUHVV SURFHGXUHV GXULQJ WKH GHPROLWLRQ SURFHVV LQ
V\VWHPVDQGIDFLOLWLHV DFFRUGDQFHZLWKWKHFRGHDQGWKH6%&
™ $FFHVV WR DOO H[LVWLQJ UHTXLUHG H[LWV PXVW  'HWDLOHGUHTXLUHPHQWV 6WDQGSLSHVVKDOO
UHPDLQ XQREVWUXFWHG DQG XVDEOH E\ DQ\ EHLQVWDOOHGLQDFFRUGDQFHZLWKWKHSURYLVLRQVRIWKH
RFFXSDQWV LQ WKH H[LVWLQJ EXLOGLQJ ZKLOH 6%&
FRQVWUXFWLRQRUGHPROLWLRQZRUNLVEHLQJGRQH
1RWHWKDWGHSHQGLQJRQWKHH[WHQWRIZRUNDQ ([FHSWLRQ6WDQGSLSHVVKDOOEHHLWKHUWHPSRUDU\RU
H[LW PD\ EHFRPH REVWUXFWHG 7KHUHIRUH DQ SHUPDQHQW LQ QDWXUH DQG ZLWK RU ZLWKRXW D ZDWHU
DOWHUQDWLYHH[LWPXVWEHSURYLGHGLIWKHEORFNHG VXSSO\ SURYLGHG WKDW VXFK VWDQGSLSHV FRQIRUP WR
H[LWLVDUHTXLUHGH[LW WKH UHTXLUHPHQWV RI WKH 6%&  DV WR FDSDFLW\
RXWOHWVDQGPDWHULDOV
™ 'XULQJWKHFRQVWUXFWLRQRUGHPROLWLRQSURFHVV
6(&7,2167$1'3,3(6<67(06 VWDQGSLSHVPXVWEHSURYLGHGLQDWHPSRUDU\RU
 :KHUHUHTXLUHG%XLOGLQJVIRXUVWRULHVRU SHUPDQHQWORFDWLRQVRWKDWILUHILJKWHUVZLOOKDYH
PRUHLQKHLJKWVKDOOEHSURYLGHGZLWKQRWOHVVWKDQ D VXIILFLHQW PHDQV WR VXSSO\ ZDWHU WR WKHLU
RQH VWDQGSLSH IRU XVH GXULQJ FRQVWUXFWLRQ 6XFK FRQQHFWLRQ 7KHVH VWDQGSLSHV PXVW HLWKHU EH
FRQQHFWHGWRDSHUPDQHQWZDWHUVXSSO\VRXUFH
VWDQGSLSHVVKDOOEHLQVWDOOHGZKHUHWKHSURJUHVVRI
RUKDYHWKHFDSDELOLWLHVRI EHLQJFRQQHFWHG WR
FRQVWUXFWLRQLV QRWPRUHWKDQ PHWHUVLQKHLJKW RQH LQ DFFRUGDQFH ZLWK 6%&  6HFWLRQ
DERYH WKH ORZHVW OHYHO RI ILUH GHSDUWPHQW DFFHVV  1RWH WKDW DOO VWDQGSLSHV PXVW FRPSO\
6XFKVWDQGSLSHVVKDOOEHH[WHQGHGDVFRQVWUXFWLRQ ZLWK 6%&  6HFWLRQ  DQG PXVW EH
SURJUHVVHVWRZLWKLQRQHIORRURIWKHKLJKHVWSRLQW LQVWDOOHGDQGSURYLGHGLQDEXLOGLQJSXUVXDQWWR
RIFRQVWUXFWLRQKDYLQJVHFXUHGGHFNLQJRUIORRULQJ WKHUHJXODWLRQVRI 6%&&KDSWHU
™ 7KHVFRSHRIWKLVVHFWLRQLVWRSURYLGHILUHVDIHW\ 
SURFHGXUHVGXULQJWKHFRQVWUXFWLRQRSHUDWLRQLQ
DFFRUGDQFH ZLWK WKH FRGH DQG WKH 6%&  6(&7,21$8720$7,&
6WDQGSLSHV WKDW DUH UHTXLUHG E\ 6%&  635,1./(56<67(0
6HFWLRQDQGDUHWREHDSHUPDQHQWSDUWRI
WKH EXLOGLQJ PXVW EH LQVWDOOHG DQG UHPDLQ  &RPSOHWLRQ EHIRUH RFFXSDQF\  ,Q
IXQFWLRQDO DV FRQVWUXFWLRQ SURJUHVVHV EXLOGLQJV ZKHUH DQ DXWRPDWLF VSULQNOHU V\VWHP LV
)XQFWLRQDOVWDQGSLSHVDUHUHTXLUHGVRWKDWILUH UHTXLUHG E\ WKLV FRGH UHTXLUHPHQWV LW VKDOO EH
ILJKWLQJFDSDELOLW\LVDYDLODEOHDWDOOWLPHVZLWKLQ XQODZIXO WR RFFXS\ DQ\ SRUWLRQV RI D EXLOGLQJ RU
D UHDVRQDEOH SUR[LPLW\ WR DOO SRWHQWLDO ILUH VWUXFWXUH XQWLO WKH DXWRPDWLF VSULQNOHU V\VWHP
ORFDWLRQV1RWHWKDWVWDQGSLSHVPXVWEHLQSODFH LQVWDOODWLRQKDVEHHQWHVWHGDQGDSSURYHGH[FHSWDV
SULRU WR D EXLOGLQJ RU VWUXFWXUH XQGHU SURYLGHGLQ6%&
FRQVWUXFWLRQH[FHHGLQJPHWHULQKHLJKWDQG
WKHUHDIWHU DV LW SURJUHVVHV WR LWV FRPSOHWHG ™ $FHUWLILFDWH RI RFFXSDQF\ PXVWQRW EHLVVXHG
KHLJKW'XULQJFRQVWUXFWLRQWKHVWDQGSLSHPXVW E\ WKH EXLOGLQJ RIILFLDO LI D UHTXLUHG DXWRPDWLF
EH RSHUDWLRQDO QR ORZHU WKDQ RQH IORRU EHORZ VSULQNOHU V\VWHP LV QRW DSSURYHG +RZHYHU D
WKHKLJKHVWSRLQWRIFRQVWUXFWLRQ WHPSRUDU\ RFFXSDQF\ PD\ EH JUDQWHG DW WKH
GLVFUHWLRQRIWKHEXLOGLQJRIILFLDO
 %XLOGLQJV EHLQJ GHPROLVKHG  :KHUH D
EXLOGLQJLVEHLQJGHPROLVKHGDQGDVWDQGSLSHH[LVWV  2SHUDWLRQ RI YDOYHV  2SHUDWLRQ RI
ZLWKLQ VXFK D EXLOGLQJ VXFK VWDQGSLSH VKDOO EH VSULQNOHUFRQWUROYDOYHVVKDOOEHSHUPLWWHGRQO\E\
PDLQWDLQHG LQ DQ RSHUDEOH FRQGLWLRQ VR DV WR EH SURSHUO\ DXWKRUL]HG SHUVRQQHO DQG VKDOO EH
DYDLODEOH IRU XVH E\ WKH ILUH GHSDUWPHQW 6XFK DFFRPSDQLHG E\ QRWLILFDWLRQ RI GXO\ GHVLJQDWHG
VWDQGSLSHVKDOOEHGHPROLVKHGZLWKWKHEXLOGLQJEXW SDUWLHV :KHQ WKH VSULQNOHU SURWHFWLRQ LV EHLQJ
VKDOOQRWEHGHPROLVKHGPRUHWKDQRQHIORRUEHORZ UHJXODUO\WXUQHGRIIDQGRQWRIDFLOLWDWHFRQQHFWLRQ
WKHIORRUEHLQJGHPROLVKHG RIQHZO\FRPSOHWHGVHJPHQWVWKHVSULQNOHUFRQWURO
YDOYHV VKDOO EH FKHFNHG DW WKH HQG RI HDFK ZRUN
™ 6WDQGSLSHVLQEXLOGLQJVXQGHUGHPROLWLRQPXVW SHULRGWRDVFHUWDLQWKDWSURWHFWLRQLVLQVHUYLFH
UHPDLQLQVHUYLFHGXULQJWKHGHPROLWLRQSURFHVV
VR WKDW ILUHILJKWLQJ FDSDELOLW\ LV PDLQWDLQHG ™ 7KHVFRSHRIWKLVVHFWLRQLVWRSURYLGHILUHVDIHW\
SURFHGXUHV GXULQJ FRQVWUXFWLRQ RSHUDWLRQV LQ

6%&&& 

&+$37(5²&216758&7,216$)(*8$5'6

DFFRUGDQFH ZLWK WKH FRGH DQG WKH 6%&  FRQVWUXFWLRQSURMHFWDUHQRWH[HPSWRQO\WKRVH

1RWH WKDW D VSULQNOHU V\VWHP PXVW UHPDLQ VSHFLILFDOO\ LQYROYHG LQ WKH DFWXDO SURFHVV RI
RSHUDEOH XQOHVV ZRUN LV EHLQJ GRQH RQ LW ,Q FRQVWUXFWLRQ )RU H[DPSOH LI PRELOH XQLWV DUH
VXFKDFDVHWKHZDWHUPXVWRQO\EHVKXWRIIE\ EURXJKWLQWRKRXVHFODVVURRPVGXULQJDVFKRRO
DXWKRUL]HG SHUVRQQHO FRXSOHG ZLWK WKH DGGLWLRQSURMHFWWKRVHPRELOHXQLWVZRXOGKDYH
QRWLILFDWLRQ RI WKH SURSHU DXWKRULWLHV VR WKDW D WRFRPSO\ZLWKDFFHVVLELOLW\SURYLVLRQV7KLVLV
IRUPRIFKHFNDQGEDODQFHLVDFKLHYHGWRPDNH FRQVLVWHQWZLWKWKHH[FHSWLRQSHUPLWWHGIRUQHZ
FHUWDLQWKHZDWHULVWXUQHGEDFNRQ FRQVWUXFWLRQLQ 6%&6HFWLRQ

6(&7,21$&&(66,%,/,7< 6(&7,21:$7(56833/<)25
 &RQVWUXFWLRQVLWHV 6WUXFWXUHVVLWHVDQG ),5(3527(&7,21
HTXLSPHQW GLUHFWO\ DVVRFLDWHG ZLWK WKH DFWXDO  :KHUH UHTXLUHG $Q DSSURYHG ZDWHU
SURFHVVRIFRQVWUXFWLRQLQFOXGLQJEXWQRWOLPLWHGWR VXSSO\ IRU ILUH SURWHFWLRQ HLWKHU WHPSRUDU\ RU
VFDIIROGLQJ EULGJLQJ PDWHULDO KRLVWV PDWHULDO SHUPDQHQW VKDOO EH PDGH DYDLODEOH DV VRRQ DV
VWRUDJHRUFRQVWUXFWLRQWUDLOHUVDUHQRWUHTXLUHGWR FRPEXVWLEOHPDWHULDODUULYHVRQWKHVLWH
EHDFFHVVLEOH
™ 7KLVVHFWLRQLVWRSURYLGHDILUHVDIHW\SURYLVLRQ
™ 7KLV VHFWLRQ H[HPSWV VWUXFWXUHV GLUHFWO\ LQDFFRUGDQFHZLWKWKHFRGHDQG6%&$V
DVVRFLDWHG ZLWK WKH FRQVWUXFWLRQ SURFHVV VXFK ZKHQ D VWDQGSLSH V\VWHP LV SUHVHQW
EHFDXVH WKH QHHG IRU DFFHVVLELOLW\ RQ D GXULQJ WKH FRQVWUXFWLRQ SURFHVV SXUVXDQW WR
FRQWLQXRXV RU UHJXODU EDVLV LQ WKRVH 6HFWLRQDZDWHUVRXUFHPXVWEHUHDGLO\
FLUFXPVWDQFHVLVXQOLNHO\WRDULVH1RWHWKDWDOO DYDLODEOH WR SURYLGH ILUHILJKWLQJ FDSDELOLWLHV DW
VWUXFWXUHV WKDW PD\ EH LQYROYHG GXULQJ D DOOWLPHV



6%&&& 

&+$37(5²&216758&7,216$)(*8$5'6

7$%/(6$1'),*85(62)&+$37(5

7$%/(
3527(&7,212)3('(675,$16
+(,*+72) ',67$1&(2)&216758&7,2172/27 7<3(2)3527(&7,21
&216758&7,21 /,1( 5(48,5('
/HVVWKDQPP &RQVWUXFWLRQUDLOLQJV
PRUOHVV
PPRUPRUH 1RQH
/HVVWKDQPP %DUULHUDQGFRYHUHGZDONZD\
PPRUPRUHEXWQRWPRUHWKDQRQHIRXUWK %DUULHUDQGFRYHUHGZDONZD\
WKHKHLJKWRIFRQVWUXFWLRQ
0RUHWKDQP PPRUPRUHEXWEHWZHHQRQHIRXUWKDQG
%DUULHU
RQHKDOIWKHKHLJKWRIFRQVWUXFWLRQ
PPRUPRUHEXWH[FHHGLQJRQHKDOIWKH 1RQH
KHLJKWRIFRQVWUXFWLRQ

6%&&& 

&+$37(5²5()(5(1&('67$1'$5'6

²5()(5(1&('67$1'$5'6

7KLVFKDSWHUOLVWVWKHVWDQGDUGVWKDWDUHUHIHUHQFHGLQYDULRXVVHFWLRQVRIWKLVGRFXPHQW7KHVWDQGDUGVDUH
OLVWHGKHUHLQE\WKHSURPXOJDWLQJDJHQF\RIWKHVWDQGDUGWKHVWDQGDUGLGHQWLILFDWLRQWKHHIIHFWLYHGDWHDQG
WLWOHDQGWKHVHFWLRQRUVHFWLRQVRIWKLVGRFXPHQWWKDWUHIHUHQFHWKHVWDQGDUG7KHDSSOLFDWLRQRIWKHUHIHUHQFHG
VWDQGDUGVVKDOOEHDVVSHFLILHGLQ6HFWLRQ
7KHVHVWDQGDUGVDUHOLVWHGKHUHIRUJXLGDQFHKRZHYHUIRUHQIRUFHPHQWWKH\VKDOOEHDGRSWHGDQGRUDSSURYHG
E\WKHDSSURSULDWHJRYHUQPHQWDODXWKRULW\6$62RU6%&1&DVSHUWKHLUPDQGDWHVEHIRUHEHLQJFRQVLGHUHG
SDUWRIWKLVFRGH

$PHULFDQ6RFLHW\RI&LYLO(QJLQHHUV6WUXFWXUDO(QJLQHHULQJ,QVWLWXWH
$6&(6(, $OH[DQGHU%HOO'ULYH5HVWRQ9$
6WDQGDUG 5HIHUHQFHG
UHIHUHQFH 7LWOH LQFRGH
QXPEHU  VHFWLRQQXPEHU
²  0LQLPXP'HVLJQ/RDGVIRU%XLOGLQJVDQG2WKHU6WUXFWXUHVZLWK
 6XSSOHPHQW1R
²  6HLVPLF(YDOXDWLRQDQG5HWURILWRI([LVWLQJ%XLOGLQJV
7DEOH
7DEOH7DEOH

7DEOH
$PHULFDQ6RFLHW\RI+HDWLQJ5HIULJHUDWLQJDQG$LU&RQGLWLRQLQJ(QJLQHHUV
$6+5$( 7XOOLH&LUFOH1($WODQWD*$
6WDQGDUG 5HIHUHQFHG
UHIHUHQFH 7LWOH LQFRGH
QXPEHU  VHFWLRQQXPEHU
²  9HQWLODWLRQIRU$FFHSWDEOH,QGRRU$LU4XDOLW\
$PHULFDQ 6RFLHW\ RI 0HFKDQLFDO (QJLQHHUV  3DUN $YHQXH 1HZ <RUN 1<
$60( 
6WDQGDUG 7LWOH 5HIHUHQFHG
UHIHUHQFH LQFRGH
QXPEHU  VHFWLRQQXPEHU
$60($ 
&6$%²  6DIHW\&RGHIRU(OHYDWRUVDQG(VFDODWRUV
$²  6DIHW\&RGHIRU([LVWLQJ(OHYDWRUVDQG(VFDODWRUV
$² 6DIHW\6WDQGDUGIRU3ODWIRUP/LIWVDQG6WDLUZD\&KDLU/LIWV
$670,QWHUQDWLRQDO%DUU+DUERU'ULYH:HVW&RQVKRKRFNHQ3$
$670 
6WDQGDUG 5HIHUHQFHG
UHIHUHQFH 7LWOH LQFRGH
QXPEHU  VHFWLRQQXPEHU
&&0²  6SHFLILFDWLRQIRU5HDG\PL[HG&RQFUHWH
(²$  7HVW0HWKRGIRU6XUIDFH%XUQLQJ&KDUDFWHULVWLFVRI%XLOGLQJ0DWHULDOV
(²  6WDQGDUG7HVW0HWKRGVIRU)LUH7HVWVRI5RRI&RYHULQJV
7HVW0HWKRGIRU%HKDYLRURI0DWHULDOVLQD9HUWLFDO7XEH)XUQDFHDWƒ&
(² 
6WDQGDUG 6DIHW\ 6SHFLILFDWLRQ IRU :LQGRZ )DOO 3UHYHQWLRQ 'HYLFHV IRU 1RQ
)² (PHUJHQF\

6%&&& 

&+$37(5²5()(5(1&('67$1'$5'6

 (VFDSH(JUHVVDQG5HVFXH,QJUHVV:LQGRZV

6WDQGDUG6SHFLILFDWLRQIRU:LQGRZ)DOO3UHYHQWLRQ'HYLFHVZLWK(PHUJHQF\
)²  (JUHVV
 5HOHDVH0HFKDQLVPV
,&& ,QWHUQDWLRQDO&RGH&RXQFLO,QF1HZ-HUVH\$YHQXH1:WK)ORRU
:DVKLQJWRQ'&


,&&
6WDQGDUG 7LWOH 5HIHUHQFHG
UHIHUHQFH LQFRGH
QXPEHU  VHFWLRQQXPEHU
$FFHVVLEOHDQG8VDEOH%XLOGLQJVDQG)DFLOLWLHV
,&&$² 
,&&6WDQGDUGRQ%OHDFKHUV)ROGLQJDQG7HOHVFRSLF6HDWLQJDQG*UDQGVWDQGV
,&&² 
,(&&² ,QWHUQDWLRQDO(QHUJ\&RQVHUYDWLRQ&RGH

,5&² ,QWHUQDWLRQDO5HVLGHQWLDO&RGH
          
         
        


5HIHUHQFHG
6%&1& 7LWOH LQFRGH
VHFWLRQQXPEHU
6%& 6DXGL %XLOGLQJ &RGH 1DWLRQDO &RPPLWWHH  DEL DO KDVVDQ DV VDOPL ±
DOPXKDPPDGL\DK 8QLW 1R  $5 5,<$'+    .LQJGRP RI 6DXGL
$UDELD
6%&² 6DXGL%XLOGLQJ&RGH*HQHUDO

 









       






        




6%&&& 

&+$37(5²5()(5(1&('67$1'$5'6






7DEOH

6%&² 6DXGL(OHFWULFDO&RGH

6%&² 6DXGL0HFKDQLFDO &RGH

6%&² 6DXGL 3OXPELQJ &RGH        

6%&² 6DXGL3ULYDWH6HZDJH'LVSRVDO&RGH
6%&² 6DXGL)LUH&RGH

       

6%&² 6DXGL([LVWLQJ%XLOGLQJ&RGH
6%&² 6DXGL)XHO*DV&RGH
6%&² 6DXGL3URSHUW\0DLQWHQDQFH&RGH

1)3$ 1DWLRQDO )LUH 3URWHFWLRQ $JHQF\  %DWWHU\PDUFK 3DUN 4XLQF\ 0$ 

6WDQGDUG  5HIHUHQFHG
UHIHUHQFH  LQFRGH
QXPEHU 7LWOH  VHFWLRQQXPEHU
1)3$5² 6WDQGDUGIRUWKH,QVWDOODWLRQRI6SULQNOHU6\VWHPVLQ
 5HVLGHQWLDO2FFXSDQFLHVXSWRDQG,QFOXGLQJ)RXU6WRULHVLQ+HLJKW
1)3$² 1DWLRQDO(OHFWULFDO&RGH
 

1)3$² 1DWLRQDO)LUH$ODUPDQG6LJQDOLQJ&RGH
1)3$² +HDOWK&DUH)DFLOLWLHV&RGH
1)3$² /LIH6DIHW\&RGH
8/ 8///&3ILQJVWHQ5RDG1RUWKEURRN,/
6WDQGDUG  5HIHUHQFHG
UHIHUHQFH  LQFRGH
QXPEHU 7LWOH  VHFWLRQQXPEHU
² 6WDQGDUG IRU 7HVW IRU 6XUIDFH %XUQLQJ &KDUDFWHULVWLFV RI %XLOGLQJ 0DWHULDOV
ZLWK
 5HYLVLRQV7KURXJK6HSWHPEHU
² 6WDQGDUG 7HVW 0HWKRGV IRU )LUH 7HVWV RI 5RRI &RYHULQJV ZLWK 5HYLVLRQV
WKURXJK2FWREHU



6%&&& 

&+$37(5²5()(5(1&('67$1'$5'6

























7KLVSDJHOHIWLQWHQWLRQDOO\EODQN

6%&&& 

&+$37(5 $²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

&+$37(5$²6(,60,&675(1*7+(1,1*3529,6,216)25
815(,1)25&('0$6215<%($5,1*:$//%8,/',1*6

FRQVLVWHQW ZLWK ERWK WKH GHVLUH IRU VDIHW\ DQG

™ *HQHUDO
WKH OLPLWHG UHVRXUFHV DYDLODEOH WR DFKLHYH
™ $SSHQGL[ &KDSWHU $ DORQJ ZLWK WKH UHVW RI
LPSURYHGVDIHW\
$SSHQGL[ $ RI WKH FRGH LV UHIHUHQFHG E\ WKH
™ ,W LV JHQHUDOO\ DFFHSWHG WKDW WKH LQWHQVLW\ RI
6DXGL%XLOGLQJ&RGHVLQWZRZD\V
HDUWKTXDNHV UHDVRQDEO\ H[SHFWHG WR RFFXU LQ
x 6HFWLRQDOORZVWKHXVHRI$SSHQGL[ WKH PRGHUDWH DQG KLJK VHLVPLF ]RQHV RI WKH
$IRUTXDOLI\LQJEXLOGLQJVZKHQ³UHGXFHG6%& .LQJGRPRI6DXGL$UDELDZRXOGEHVXIILFLHQWWR
OHYHOVHLVPLFIRUFHV´DUHWULJJHUHG FDXVH EXLOGLQJV ZLWK PLQLPDO VHLVPLF
UHVLVWDQFH FKDUDFWHULVWLFV WR EH VHULRXVO\
x 6HFWLRQDOORZVWKHXVHRI$SSHQGL[$
GDPDJHGFDXVLQJSK\VLFDOLQMXU\RUORVVRIOLIH
IRUYROXQWDU\VHLVPLFUHWURILW
RI RFFXSDQWV RU SDVVHUVE\ DQG GDPDJH WR
™ 7KHSURYLVLRQVLQ$SSHQGL[&KDSWHU$UHTXLUH SURSHUW\
WKHVHOHFWLRQRIRQHRIWZRSURFHGXUHV²HLWKHU ™ ,W LV UHDVRQDEOH ZKHUH D UHDO VHLVPLF ULVN
WKHJHQHUDOSURFHGXUHRUWKHVSHFLDOSURFHGXUH H[LVWV WR WDNH VWHSV WR VLJQLILFDQWO\ UHGXFH LW
IRU WKH DQDO\VLV DQG VHLVPLF VWUHQJWKHQLQJ RI 7KHREMHFWLYH RI $SSHQGL[ $ LVWKHUHGXFWLRQ
XQUHLQIRUFHG PDVRQU\ 850 EXLOGLQJV 7KH RU HOLPLQDWLRQ RI VHLVPLF ULVN DVVRFLDWHG ZLWK
VSHFLDOSURFHGXUHLVEDVHGRQUHVHDUFKRQWKH 850EXLOGLQJV
EHKDYLRU RI 850 EXLOGLQJV DW WKHLU OLPLW VWDWH ™ 7KHPDLQJRDOLVWRUHGXFHOLIHVDIHW\ULVNVDV
DQGRQWKHH[SHULHQFHRIHQJLQHHUVZKRKDYH EHVW DV SRVVLEOH ZLWK WKH DYDLODEOH UHVRXUFHV
XSJUDGHGEXLOGLQJVLQWKH/RV$QJHOHVKD]DUG 7KH HIIRUWV DUH GLUHFWHG WRZDUG HQVXULQJ D
UHGXFWLRQ SURJUDP XVH RI WKH VSHFLDO FRKHUHQW ORDG SDWK IRU ODWHUDO ORDGV UHGXFWLRQ
SURFHGXUHLVH[SHFWHGIRUPRVWEXLOGLQJV7KH RIRXWRISODQHZDOOIDLOXUHVUHGXFWLRQRIORVVRI
JHQHUDOSURFHGXUHLVDSURFHGXUHIRUEXLOGLQJV VXSSRUW IRU IORRUV DQG URRIV DQG UHGXFWLRQ RI
ZLWKULJLGGLDSKUDJPVWKDWGRQRWTXDOLI\IRUWKH IDOOLQJ SDUDSHWV RU RUQDPHQWDWLRQ $SSOLFDWLRQ
VSHFLDO SURFHGXUH LW LV D FRPELQDWLRQ RI D RI WKLV FKDSWHU ZLOO GHFUHDVH WKH SUREDELOLW\ RI
FRQYHQWLRQDOFRGHDSSURDFKDQGVRPHSRUWLRQV ORVV RI OLIH EXW WKLV FDQQRW EH SUHYHQWHG
RI WKH VSHFLDO SURFHGXUH 7KH FRPPHQWDU\ ,QKHUHQWWRWKHSURFHGXUHLVWKHDFFHSWDELOLW\RI
GLVFXVVHVWKHJHQHUDODQG VSHFLDO SURFHGXUHV VRPHPDMRUDQGLUUHSDUDEOHGDPDJHDVORQJDV
LQGLYLGXDOO\DQGLQGHWDLO WKHUH LV D GHFUHDVH LQ WKH OLNHOLKRRG RI IDOOLQJ
™ 850 EHDULQJ ZDOO EXLOGLQJV KDYH VKRZQ SRRU EXLOGLQJ HOHPHQWV RU ORVV RI VXSSRUW IRU
SHUIRUPDQFHLQSDVWHDUWKTXDNHVLQFOXGLQJWKH KRUL]RQWDO IUDPLQJ DQG D UHGXFWLRQ LQ VHULRXV
IROORZLQJVLJQLILFDQWHYHQWVLQWKH0LGGOH(DVW LQMXU\DQGORVVRIOLIH
1HDU(DVWHDUWKTXDNH1RUWK<HPHQ ™ 7KHJRDORIWKLVUHFRPPHQGHGVWUHQJWKHQLQJLV
HDUWKTXDNH*XOIRI$TDEDHDUWKTXDNH ORZHU WKDQ WKH JRDO VHW IRU QHZ FRQVWUXFWLRQ
™ 7KHORVVRIOLYHVDQGSURSHUW\GDPDJHLQIXWXUH $SSHQGL[ &KDSWHU $ UHFRJQL]HV WKDW WKH
HDUWKTXDNHV ZLOO EH KHDYLHVW LQ EXLOGLQJV WKDW HFRQRPLF GLIILFXOW\ RI VWUHQJWKHQLQJ H[LVWLQJ
H[LVW WRGD\ HVSHFLDOO\ EXLOGLQJV RI 850 EXLOGLQJV QHFHVVLWDWHV UHOLDQFH RQ EXLOGLQJ
FRQVWUXFWLRQ 7KH VKRUWWHUP LPSDFW RI FRPSRQHQWV ZLWK VHLVPLF SHUIRUPDQFH
LPSURYHG NQRZOHGJH FRGHV DQG GHVLJQ FKDUDFWHULVWLFVWKDWDUHOHVVWKDQLGHDO
SUDFWLFHVZLOOEHOLPLWHGWRWKRVHUHODWLYHO\IHZ
UHFHQW EXLOGLQJV WKDW WDNH DGYDQWDJH RI WKLV 385326(
LPSURYHG NQRZOHGJH 7KXV WKH GRPLQDQW $3XUSRVH7KHSXUSRVHRIWKLVFKDSWHULVWR
SROLF\LVVXHVSRVHGE\HDUWKTXDNHVLQYROYHQRW SURPRWHSXEOLFVDIHW\DQGZHOIDUHE\UHGXFLQJWKH
QHZ EXW H[LVWLQJ EXLOGLQJV SDUWLFXODUO\ WKRVH
ULVNRIORVVRIOLIHRUSK\VLFDOLQMXU\DQGGDPDJHWR
VWUXFWXUHV WKDW KDYH REYLRXV ZHDNQHVVHV DQG
GR QRW FRPSO\ ZLWK WKH JHQHUDO LQWHQW DQG SURSHUW\ WKDW PD\ UHVXOW IURP WKH HIIHFWV RI
QHFHVVDU\UHTXLUHPHQWVRIFXUUHQWUHJXODWLRQV HDUWKTXDNHV RQ H[LVWLQJ XQUHLQIRUFHG PDVRQU\
7KHLVVXHEHIRUHWKHSXEOLFDQGWKHSURIHVVLRQ EHDULQJZDOOEXLOGLQJV
LV GHWHUPLQLQJ KRZ WR VHW VWDQGDUGV IRU WKHVH 7KH SURYLVLRQV RI WKLV FKDSWHU DUH LQWHQGHG DV
QRQFRPSOLDQW H[LVWLQJ EXLOGLQJV WKDW DUH PLQLPXP VWDQGDUGV IRU VWUXFWXUDO VHLVPLF

6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

UHVLVWDQFHDQGDUHHVWDEOLVKHGSULPDULO\WRUHGXFH LV XVHG LQVWHDG RI VKRUW SHULRG VSHFWUDO

WKH ULVN RI ORVV RI OLIH RU SK\VLFDO LQMXU\ DFFHOHUDWLRQ6'6EHFDXVH6'PRUHDFFXUDWHO\
&RPSOLDQFH ZLWK WKHVH SURYLVLRQV ZLOO QRW UHIOHFWV WKH VHLVPLF EHKDYLRU RI XQUHLQIRUFHG
QHFHVVDULO\SUHYHQWORVVRIOLIHRUSK\VLFDOLQMXU\RU PDVRQU\ EXLOGLQJV ZLWK IOH[LEOH GLDSKUDJPV
DQGWRDOHVVHUH[WHQWWKHRWKHULWHPVOLVWHGLQ
SUHYHQW HDUWKTXDNH GDPDJH WR UHKDELOLWDWHG
7DEOH $$ 7KH XSSHU ERXQG YDOXH RI 6'
EXLOGLQJV JLYHQ LQ 7DEOH $$ FRUUHVSRQGV WR
™ $SSHQGL[ &KDSWHU $ LV LQWHQGHG WR UHGXFH GHVFULSWLRQVRI6HLVPLF'HVLJQ&DWHJRULHV%&
ULVNVDVVRFLDWHGZLWKWKHVHLVPLFSHUIRUPDQFH DQG'
RI 850 EXLOGLQJV ,W UHSUHVHQWV PLQLPXP ™ $SSHQGL[ &KDSWHU $ GRHV QRW UHJXODWH
VWDQGDUGVUHTXLUHGWRUHGXFHULVNRIORVVRIOLIH QRQVWUXFWXUDOV\VWHPV
RU SK\VLFDO LQMXU\ 7KH REMHFWLYH LV
$(VVHQWLDODQGKD]DUGRXVIDFLOLWLHV7KH
DFFRPSOLVKHG E\ UHGXFLQJ WKH SRVVLELOLW\ RI
GDPDJH DQG WKH H[WHQW RI GDPDJH +RZHYHU SURYLVLRQV RI WKLV FKDSWHU VKDOO QRW DSSO\ WR WKH
FRPSOLDQFHZLWKWKLVFKDSWHUZLOOQRWQHFHVVDULO\ VWUHQJWKHQLQJRIEXLOGLQJVLQ2FFXSDQF\&DWHJRU\
SUHYHQW HDUWKTXDNH GDPDJH WR UHKDELOLWDWHG ,,, RU ,9 6XFK EXLOGLQJVVKDOOEH VWUHQJWKHQHGWR
EXLOGLQJV5LVNRIORVVRIOLIHRUSK\VLFDOLQMXU\LV PHHW WKH UHTXLUHPHQWV RI WKH 6%&  IRU QHZ
VLJQLILFDQWO\ UHGXFHG EXW QRW HOLPLQDWHG E\ EXLOGLQJVRIWKHVDPHULVNFDWHJRU\
FRPSOLDQFHZLWKWKLVFKDSWHU
™ 7KH GHJUHH RI HDUWKTXDNH ULVN UHGXFWLRQ
™ 7KH ULVN UHGXFWLRQ DSSOLHV WR WKH RYHUDOO
DQWLFLSDWHG LQ $SSHQGL[ &KDSWHU $ LV QRW
DYHUDJH SHUIRUPDQFH RI UHKDELOLWDWHG 850
FRQVLGHUHGDFFHSWDEOHIRU 6%&2FFXSDQF\
EXLOGLQJV $Q LQGLYLGXDO EXLOGLQJ PD\ KDYH
&DWHJRU\,,,RU,9%XLOGLQJVLQWKHVH2FFXSDQF\
GDPDJH OHYHOV DERYH RU EHORZ WKH DYHUDJH
&DWHJRU\ UHTXLUH VSHFLDO GHWDLOLQJ
GHSHQGLQJRQLWVVWUXFWXUDOFKDUDFWHULVWLFVDQG
FRQVLGHUDWLRQVLQFUHDVHGVHLVPLFORDGLQJDQG
WKHORFDOJURXQGPRWLRQ,ILWLVGHVLUHGWRIXUWKHU
OLPLWDWLRQVRQVHLVPLFIRUFHUHVLVWLQJV\VWHPV
OLPLW GDPDJH WR DQ\ VSHFLILF EXLOGLQJ RU
SUHVHUYH LWV SRVWHDUWKTXDNH IXQFWLRQ WKH '(),1,7,216
HQJLQHHUVKRXOGFRQVLGHUDGGLWLRQDO PHDVXUHV
IRUVWUHQJWKHQLQJWKHEXLOGLQJ )RU WKH SXUSRVH RI WKLV FKDSWHU WKH DSSOLFDEOH
GHILQLWLRQVLQWKHEXLOGLQJFRGHVKDOODOVRDSSO\
6&23(
™ ,QJHQHUDOWKHGHILQLWLRQVJLYHQLQWKLVVHFWLRQ
$*HQHUDO 7KH SURYLVLRQV RI WKLV FKDSWHU DUHVHOIH[SODQDWRU\7KHFRPPHQWDU\H[SDQGV
VKDOODSSO\WRDOOH[LVWLQJEXLOGLQJVKDYLQJDWOHDVW RQVHYHUDORIWKHGHILQLWLRQVWKDWDUHFULWLFDOWR
RQH XQUHLQIRUFHG PDVRQU\ EHDULQJ ZDOO 7KH WKHXVHRI$SSHQGL[&KDSWHU$
HOHPHQWV UHJXODWHG E\ WKLV FKDSWHU VKDOO EH &2//$5 -2,17 7KH YHUWLFDO VSDFH EHWZHHQ
GHWHUPLQHGLQDFFRUGDQFHZLWK7DEOH$$([FHSW DGMDFHQWZ\WKHV$FROODUMRLQWPD\FRQWDLQPRUWDU
DVSURYLGHGKHUHLQRWKHUVWUXFWXUDOSURYLVLRQVRIWKH RUJURXW
6%&VKDOODSSO\7KLVFKDSWHUGRHVQRWDSSO\WR
WKH DOWHUDWLRQ RI H[LVWLQJ HOHFWULFDO SOXPELQJ ™ 7KH FROODU MRLQW LV WKH VSDFH EHWZHHQ Z\WKHV
PHFKDQLFDORUILUHVDIHW\V\VWHPV VSDFHWKDWPD\EHHPSW\RUPD\EHILOOHGZLWK
PRUWDU RU JURXW $OWKRXJK WKH FRQGLWLRQ RI WKH
™ 7KLV FKDSWHU LV DSSOLFDEOH WR DOO H[LVWLQJ FROODUMRLQWPD\QRWEHFULWLFDOIRULQSODQHZDOO
EXLOGLQJV WKDW KDYH DW OHDVW RQH 850 ZDOO RU VKHDU VWUHVV WKH SURFHGXUH IRU GHWHUPLQLQJ
850 EHDULQJ ZDOO 6(&7,21 $ GHILQHV D DOORZDEOHVWUHVVIURPLQSODQHVKHDUWHVWVWDNHV
850 ZDOO DQG 850 EHDULQJ ZDOO 850 ZDOOV LQWRDFFRXQWWKHSUREDEOHHIIHFWRIPRUWDULQWKH
FRQVWUXFWHGZLWKLQFRQFUHWHRUVWHHOIUDPHVDUH FROODU MRLQW 7KH FRQGLWLRQ RI WKH MRLQW LV RI
QRW EHDULQJ ZDOOV 7KHVH IUDPH EXLOGLQJV ZLWK JUHDWHU LPSRUWDQFH IRU RXWRISODQH IRUFHV
850 LQILOO DUH FRQVLGHUHG DV SRWHQWLDOO\ ZKHUHLWLVQHFHVVDU\WRKDYHWKHZ\WKHVRIWKH
KD]DUGRXV EXW WKH\ DUH QRW FRYHUHG E\ WKLV ZDOODFWLQWHJUDOO\$YLVXDOH[DPLQDWLRQRIWKH
FKDSWHU FROODUMRLQWWRGHWHUPLQHLWVPRUWDUFRYHUDJHLV
™ 7DEOH$$OLVWVHOHPHQWVRIEXLOGLQJVWKDWDUH UHTXLUHG WR DOORZ WKH XVH RI WKH LQFUHDVHG
UHJXODWHG E\ WKLV FKDSWHU 7KLV OLVWLQJ RI KHLJKWWRWKLFNQHVV UDWLRV JLYHQ LQ 7DEOH $%
HOHPHQWV LV UHODWHG WR REVHUYHG GDPDJH RU IRUEXLOGLQJVZLWKFURVVZDOOVLQDOOVWRULHV
SDUWLDOFROODSVHRIWKHVHHOHPHQWVDQGVSHFWUDO
LQWHQVLW\ RI JURXQG VKDNLQJ 6HSDUDWLRQ RI &5266:$//$QHZRUH[LVWLQJZDOOWKDWPHHWV
XQEUDFHGSDUDSHWVKDVEHHQUHSRUWHGIRUFLWLHV WKH UHTXLUHPHQWV RI 6HFWLRQ $ DQG WKH
GLVWDQW IURP D ODUJH PDJQLWXGH HDUWKTXDNH GHILQLWLRQRI6HFWLRQ$$FURVVZDOOLVQRWD
VRXUFH7KHPHDVXUHRIVSHFWUDOYHORFLW\6' VKHDUZDOO

6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

™ $FURVVZDOOLVDOLJKWIUDPHZDOOVKHDWKHGZLWK RQO\´  7KH GHILQLWLRQ LV LQWHQGHG WR EH D

QHZRUH[LVWLQJPDWHULDOV/LJKWIUDPHZDOOVZLWK OLPLWDWLRQ 2SHQIURQW EXLOGLQJV RQ VWUHHW
VKHDU SDQHOV KDYH D GHVLUDEOH K\VWHUHWLF FRUQHUV PXVW KDYH ODWHUDO ORDGUHVLVWLQJ
EHKDYLRU DQG FDQ E\ WKHLU FRXSOLQJ VWUHQJWK HOHPHQWVVXFKDVVKHDUZDOOVLQVWDOOHGRQRQH
VWLIIHQ WKH GLDSKUDJP DQG UHGXFH GLDSKUDJP RIWKHVWUHHWIURQWVLGHV
GHIOHFWLRQV7KH\IXQFWLRQDVHQHUJ\GLVVLSDWHUV
ZKHQ FRQQHFWLQJ IOH[LEOH GLDSKUDJPV RU D 
IOH[LEOH GLDSKUDJPWRJUDGHZLWKLQWKHVSDQ RI 32,17,1* 7KH SURFHVV RI LPSOHPHQWLQJ WKH
WKHGLDSKUDJP7KH\DFWVLPLODUWRVKHDZDOOVWR MRLQWV WR D FHUWDLQ GHSWK DQG ILOOLQJ LW ZLWK EHWWHU
WKHH[WHQWWKDWWKH\GLPLQLVKWKHGLVSODFHPHQW TXDOLW\ PRUWDU LQ GHVLUHG VKDSH $OVR NQRZQ DV
RI D IORRU RU URRI UHODWLYH WR WKH EXLOGLQJ EDVH WXFNSRLQWLQJIRUSXUSRVHVRIWKLVFKDSWHU
EXW DUH QRW WUXH VKHDU ZDOOV 7KHLU LQSODQH
™ 3RLQWLQJ LV HTXLYDOHQW WR UHSRLQWLQJ 7KH
VWLIIQHVVLVQRWFRPSDUDEOHZLWKVKHDUZDOOVRI
UHFRPPHQGHG SURFHGXUH IRU SRLQWLQJ LV
PDVRQU\ FRQFUHWH RU ODWHUDO ORDGUHVLVWLQJ
GHVFULEHGLQ6HFWLRQ$
HOHPHQWV RI VWUXFWXUDO VWHHO 0RPHQWUHVLVWLQJ
IUDPHVPD\DOVREHGHVLJQHGDVFURVVZDOOV 
&5266:$// 6+($5 &$3$&,7< 7KH XQLW 5(32,17,1* 7KH SURFHVV RI UHPRYDO RI
VKHDUYDOXHvcWLPHVWKHOHQJWKRIWKHFURVVZDOOLc GHWHULRUDWHG PRUWDU IURP EHWZHHQ PDVRQU\ XQLWV
LHvcLc DQGSODFHPHQWRIQHZPRUWDU
5,*,' ',$3+5$*0 $ GLDSKUDJP RI
™ 7KHXQLWVKHDUFDSDFLWLHVDUHOLVWHGLQ7DEOH$ UHLQIRUFHGFRQFUHWH
' DQG 7DEOH $( IRU H[LVWLQJ DQG QHZ
FRQVWUXFWLRQ UHVSHFWLYHO\ )RU FURVVZDOOV ZLWK ™ :KHWKHU D GLDSKUDJP VKRXOG EH FRQVLGHUHG
RSHQLQJVWKHPLQLPXPOHQJWKRIWKHVXPRIWKH IOH[LEOH RUULJLGGHSHQGVRQWKHUHODWLRQVKLSRI
LQGLYLGXDO FURVVZDOOV DORQJ D OLQH WKURXJK WKH GLDSKUDJPLQSODQHVKHDUVWLIIQHVVWRPDVRQU\
RSHQLQJVVKRXOGEHXVHGWRGHWHUPLQHWKHWRWDO ZDOO LQSODQH VWLIIQHVV &RQFUHWH GLDSKUDJPV
OHQJWKRIFURVVZDOO/F LQFOXGLQJ ROGHU FRQFUHWH GLDSKUDJPV WKDW DUH
QRW ³UHLQIRUFHG´ EDVHG RQ FXUUHQW FRGH
',$3+5$*0 ('*( 7KH LQWHUVHFWLRQ RI WKH GHILQLWLRQVDUHW\SLFDOO\FRQVLGHUHGULJLGEDVHG
KRUL]RQWDOGLDSKUDJPDQGDVKHDUZDOO RQ VWLIIQHVV 7KH HQJLQHHU PXVW FRQVLGHU WKH
',$3+5$*0 6+($5 &$3$&,7< 7KH XQLW UHODWLYH VWLIIQHVV DQG VWUHQJWK OLPLW VWDWHV RI
VKHDUYDOXHvuWLPHVWKHGHSWKRIWKHGLDSKUDJPD RWKHUPDWHULDOVWRGHWHUPLQHDUDWLRQDODQDO\VLV
LHvuD SURFHGXUH IRUWKHH[LVWLQJ VWUXFWXUDOPDWHULDOV
)/(;,%/( ',$3+5$*0 $ GLDSKUDJP RI $SSHQGL[ &KDSWHU $ GRHV QRW FRQVLGHU
ZRRGRUXQWRSSHGPHWDOGHFNFRQVWUXFWLRQ VHPLULJLGGLDSKUDJPV

™ 7KH GHILQLWLRQ IRU ³)OH[LEOH GLDSKUDJP´ LV 78&.32,17,1*6HH³3RLQWLQJ´

UHTXLUHGIRU6HFWLRQ$ZKLFKGHWHUPLQHV 815(,1)25&('0$6215<,QFOXGHVEXUQHG
ZKHUHWKHVSHFLDOSURFHGXUHFDQEHXVHG)RU FOD\ FRQFUHWH RU VDQGOLPH EULFN KROORZ FOD\ RU
IXUWKHUH[SODQDWLRQUHIHUWRWKHFRPPHQWDU\WR FRQFUHWHEORFNSODLQFRQFUHWHDQGKROORZFOD\WLOH
WKHGHILQLWLRQRI³5LJLGGLDSKUDJP´ 7KHVHPDWHULDOVVKDOOFRPSO\ZLWKWKHUHTXLUHPHQWV
RI6HFWLRQ$DVDSSOLFDEOH
1250$/ :$// $ ZDOO SHUSHQGLFXODU WR WKH 815(,1)25&(' 0$6215< %($5,1*
GLUHFWLRQRIVHLVPLFIRUFHV :$// $ 850 ZDOO WKDW SURYLGHV WKH YHUWLFDO
VXSSRUW IRU WKH UHDFWLRQ RI IORRU RU URRIIUDPLQJ
™ $QRUPDOZDOOLVD850EHDULQJZDOOZLWKORDGV PHPEHUV
SHUSHQGLFXODUWRWKHZDOO:KHQWKHHDUWKTXDNH 815(,1)25&('0$6215<850:$//
ORDGVDUHSDUDOOHOWRDQ850EHDULQJZDOOWKH
$PDVRQU\ZDOOWKDWUHOLHVRQWKHWHQVLOHVWUHQJWKRI
ZDOOLVFRQVLGHUHGDVKHDUZDOO
PDVRQU\XQLWVPRUWDUDQGJURXWLQUHVLVWLQJGHVLJQ
23(1 )5217 $Q H[WHULRU EXLOGLQJ ZDOO OLQH ORDGVDQGLQZKLFKWKHDUHDRIUHLQIRUFHPHQWLVOHVV
ZLWKRXW YHUWLFDO HOHPHQWV RI WKH ODWHUDO IRUFH WKDQSHUFHQWRIWKHPLQLPXPUDWLRUHTXLUHGE\
UHVLVWLQJV\VWHPLQRQHRUPRUHVWRULHV WKHEXLOGLQJFRGHIRUUHLQIRUFHGPDVRQU\
™ ³2SHQIURQW´LVDWHUPIRUWKHVLGHRIDEXLOGLQJ ™ $850ZDOOLVDZDOOFRQVWUXFWHGRIVROLGFOD\RU
WKDW GRHV QRW KDYH D VKHDU ZDOO IUDPH RU FRQFUHWHXQLWVRUDZDOOFRQVWUXFWHGRIKROORZ
EUDFHGIUDPHDWWKHH[WHULRUZDOOOLQH7KHRSHQ XQLWV HLWKHU FOD\ RU FRQFUHWH ,I WKH ZDOO LV
IURQW PD\ EH DW WKH ILUVW VWRU\ RU DW DOO VWRULHV FRQVWUXFWHGRIKROORZXQLWVWKHQHWDUHDRIWKH
7KHRSHQIURQWLVGHILQHGDV³RSHQRQRQHVLGH PDVRQU\ZDOOPXVWEHXVHGIRULQSODQHVKHDU

6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

FDOFXODWLRQV 7KH 7KH DOORZDEOH KHLJKWWR ‫ܣ‬௕   7RWDO DUHD RI WKH EHG MRLQWV DERYH DQG
WKLFNQHVV UDWLRV JLYHQ LQ 7DEOH $% DUH QRW EHORZWKHWHVWVSHFLPHQIRUHDFKLQSODFHVKHDUWHVW
DIIHFWHGE\WKHVROLGLW\RIWKHPDVRQU\XQLW2QO\ PP
WKHKHLJKWWRWKLFNQHVVUDWLRDIIHFWVWKHVWDELOLW\ 
RIWKHZDOO7KHZHLJKWSHUVTXDUHPHWHURIWKH
D  ,QSODQH ZLGWKGLPHQVLRQRISLHUPP RU
ZDOO LV QRW D SDUDPHWHU IRU RXWRISODQH ZDOO
VWDELOLW\ GHSWKRIGLDSKUDJPP
™ 7KHLQSODQHEHGMRLQWVKHDUVWUHQJWKRUWHQVLOH 
VSOLWWLQJ VWUHQJWK RI WKH PDVRQU\ PXVW EH DCR 'HPDQGFDSDFLW\ UDWLR VSHFLILHG LQ
GHWHUPLQHG E\ WHVWLQJ )LHOG VWRQH RU DGREH 6HFWLRQ$
PDVRQU\GRHVQRWKDYHDUHOLDEOHWHVWPHWKRG 
IRU GHWHUPLQDWLRQ RI LQSODQH VKHDU VWUHQJWK ݂௠ᇱ   &RPSUHVVLYHVWUHQJWKRIPDVRQU\
7KH HQJLQHHU VKRXOG ZLWK WKH FRQFXUUHQFH RI 
WKH EXLOGLQJ RIILFLDO GHWHUPLQH VWUHQJWK OLPLW ݂௦௣   7HQVLOHVSOLWWLQJVWUHQJWKRIPDVRQU\
VWDWHPDWHULDOVSURSHUWLHV
™ $SSHQGL[&KDSWHU$KDVEHHQGHYHORSHGIRU

850 7KH WHQVLOH VWUHQJWK RI EHG MRLQWV LV ‫ܨ‬௪௫   )RUFHDSSOLHGWRDZDOODWOHYHO[1
FRQVLGHUHG DV ]HUR $ ZDOO LV FRQVLGHUHG 
XQUHLQIRUFHGLIWKHDPRXQWRIUHLQIRUFLQJLVOHVV H  /HDVW FOHDU KHLJKW RI RSHQLQJ RQ HLWKHU
WKDQ  SHUFHQW RI WKH PLQLPXP DPRXQW WKDW VLGHRIDSLHUPP
ZRXOG EH UHTXLUHG E\ WKH 6%&  7KH 
LQWHQWLRQLVWRH[FOXGHHQJLQHHUHGV\VWHPVWKDW h/t  +HLJKWWRWKLFNQHVVUDWLRRI850ZDOO
KDYH VPDOO EXW GHILQLWH DPRXQWV RI KRUL]RQWDO 
DQGYHUWLFDOUHLQIRUFLQJ +HLJKW K LV PHDVXUHG EHWZHHQ ZDOO DQFKRUDJH
™ ,Q PRVW FDVHV D ZDOO ZLOO HLWKHU FRQWDLQ
OHYHOVDQGRUVODERQJUDGH
UHLQIRUFLQJ DW RU QHDU WKH 6%& 
UHTXLUHPHQWVRULWZLOOKDYHQRUHLQIRUFLQJDWDOO 
7KH UHLQIRUFLQJ PXVW EH ERWK YHUWLFDO DQG L  6SDQRIGLDSKUDJPEHWZHHQVKHDUZDOOV
KRUL]RQWDO 6WHHO VWUDSV ODLG DORQJ EHG MRLQWV RUVSDQEHWZHHQVKHDUZDOODQGRSHQIURQWP
H[LVWLQVRPHROGHUW\SHVRIFRQVWUXFWLRQWKHVH 
VKRXOG QRW EH FRQVLGHUHG KRUL]RQWDOO\ ‫ܮ‬௖   /HQJWKRIFURVVZDOOP
UHLQIRUFHG VLQFH WKHVH VWUDSV FRXOG DFWXDOO\ 
ZHDNHQWKHEHGMRLQW ‫ܮ‬௜   (IIHFWLYH VSDQ IRU DQ RSHQIURQW EXLOGLQJ
<,(/'6725<'5,)77KHODWHUDOGLVSODFHPHQW VSHFLILHGLQ6HFWLRQ$P
RIRQHOHYHOUHODWLYHWRWKHOHYHODERYHRUEHORZDW 
ZKLFK \LHOG VWUHVV LV ILUVW GHYHORSHG LQ D IUDPH P  $SSOLHG IRUFH DV GHWHUPLQHG E\
PHPEHU VWDQGDUG WHVW PHWKRGRI$670&RU$670
(1
™ 7KLVWHUPUHIHUVWRWKH ODWHUDOGLVSODFHPHQWRI 
RQHOHYHOUHODWLYHWRWKHOHYHODERYHRUEHORZDW
ܲ஽  6XSHULPSRVHGGHDGORDGDWWKHORFDWLRQ
ZKLFK\LHOGVWUHVVLVILUVWGHYHORSHGLQDIUDPH
PHPEHU RI PRPHQW IUDPHV DFWLQJ DV XQGHUFRQVLGHUDWLRQN1)RUGHWHUPLQDWLRQRIWKH
FURVVZDOOV URFNLQJVKHDUFDSDFLW\GHDGORDGDWWKHWRSRIWKH
SLHUXQGHUFRQVLGHUDWLRQVKDOOEHXVHG
6<0%2/6$1' 
127$7,216 ܲ஽ା௅   3UHVV UHVXOWLQJ IURP WKH GHDG SOXV DFWXDO
)RU WKH SXUSRVH RI WKLV FKDSWHU WKH IROORZLQJ OLYHORDGLQSODFHDWWKHWLPHRIWHVWLQJN3D
QRWDWLRQV VXSSOHPHQW WKH DSSOLFDEOH V\PEROV DQG 
QRWDWLRQVLQWKH6DXGLEXLOGLQJFRGH ܲ௪   :HLJKWRIZDOO1

ܽ௡   'LDPHWHURIFRUHPXOWLSOLHGE\LWVOHQJWK R  5HVSRQVHPRGLILFDWLRQIDFWRUIRU2UGLQDU\
RUWKHDUHDRIWKHVLGHRIDVTXDUHSULVP SODLQPDVRQU\VKHDUZDOOVLQ%HDULQJ:DOO6\VWHP
IURP7DEOHRI6%&ZKHUH5 
A  &URVVVHFWLRQDO DUHD RI XQUHLQIRUFHG 
PDVRQU\SLHURUZDOOPP ܵ஽ௌ   'HVLJQVSHFWUDODFFHOHUDWLRQDWVKRUWSHULRG
LQJXQLWV


6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

ܵ஽ଵ   'HVLJQ VSHFWUDO DFFHOHUDWLRQ DW VHFRQG ܹ௪   7RWDOGHDGORDGRID850ZDOODERYHWKH

SHULRGLQJXQLWV OHYHO XQGHU FRQVLGHUDWLRQ RU DERYH DQ RSHQIURQW
EXLOGLQJ1
‫ݒ‬௔   7KH VKHDU VWUHQJWK RI DQ\ 850 SLHU 
‫ݒ‬௠ ‫ܣ‬ΤͳǤͷܰ ܹ௪௫   'HDG ORDG RI D 850 ZDOO DVVLJQHG WR
OHYHO[KDOIZD\DERYHDQGEHORZWKHOHYHOXQGHU
‫ݒ‬௖   8QLW VKHDU FDSDFLW\ YDOXH IRU D FURVVZDOO FRQVLGHUDWLRQ1
VKHDWKHGZLWKDQ\RIWKHPDWHULDOVJLYHQLQ 7DEOH 
$'RU7DEOH$(1P σ ‫ݒ‬௨ ‫ ܦ‬ 6XPRIGLDSKUDJPVKHDUFDSDFLWLHV
RIERWKHQGVRIWKHGLDSKUDJP1
‫ݒ‬௠   6KHDU VWUHQJWK RI XQUHLQIRUFHG PDVRQU\ 
N3D σ σ ‫ݒ‬௨ ‫ ܦ‬ )RU GLDSKUDJPV FRXSOHG ZLWK
FURVVZDOOV YX' LQFOXGHV WKH VXP RI VKHDU
ܸ௔௔   7KH VKHDU VWUHQJWK RI DQ\ 850 SLHU RU FDSDFLWLHV RI ERWK HQGV RI GLDSKUDJPV FRXSOHG DW
ZDOO1 DQGDERYHWKHOHYHOXQGHUFRQVLGHUDWLRQ1

ܸ௖௔   7RWDO VKHDU FDSDFLW\ RI FURVVZDOOV LQ WKH σ ܹௗ  7RWDOGHDGORDGRIDOOWKHGLDSKUDJPVDWDQG
GLUHFWLRQ RI DQDO\VLV LPPHGLDWHO\ DERYH WKH DERYHWKHOHYHOXQGHUFRQVLGHUDWLRQ1
GLDSKUDJPOHYHOEHLQJLQYHVWLJDWHGQcLc1 ™ 6HOHFWHGGHILQLWLRQVDUHJLYHQWRFODULI\WKHXVH
RIWKHIROORZLQJV\PEROV
ܸ௖௕   7RWDO VKHDU FDSDFLW\ RI FURVVZDOOV LQ WKH 3' 7KHWULEXWDU\GHDGORDGDWWKHWRSRIWKHSLHU
GLUHFWLRQ RI DQDO\VLV LPPHGLDWHO\ EHORZ WKH XQGHUFRQVLGHUDWLRQ)RU XQLIRUPO\ ORDGHGEHDULQJ
GLDSKUDJPOHYHOEHLQJLQYHVWLJDWHGvcLc1 ZDOOVLWFRQVLVWVRIWKHGHDGORDGRQDZLGWKRIZDOO
H[WHQGLQJ EHWZHHQ WKH FHQWHUV RI WKH RSHQLQJV
ܸ௣  6KHDUIRUFHDVVLJQHGWRDSLHURQWKHEDVLV DGMDFHQWWRDQLQWHULRUSLHUIURPWKHZDOOHGJHWRWKH
FHQWHURIWKHDGMDFHQWRSHQLQJIRUWKHH[WHULRUSLHUV
RILWVUHODWLYHVKHDUULJLGLW\1 RUIURPZDOOHGJHWRZDOOHGJH)RUXVHLQ(TXDWLRQV
$$DQG$3'LVWKHVXSHULPSRVHGGHDG
ܸ௥   3LHU URFNLQJ VKHDU FDSDFLW\ RI DQ\ 850 ORDGDWWKHWHVWORFDWLRQ
ZDOORUZDOOSLHU1 3'/  6WUHVV UHVXOWLQJ IURP WKH GHDG ORDG SOXV
DFWXDOOLYHORDGLQSODFHDWWKHWLPHRIWHVWLQJLQN3D
‫ݒ‬௧   0RUWDU VKHDU VWUHQJWK DV VSHFLILHG LQ )RU XVH LQ (TXDWLRQ $ WKH TXDQWLW\ 3'/ LV WKH
6HFWLRQ$N3D VWUHVVREWDLQHGE\GLYLGLQJWKHD[LDOORDGRQWKHZDOO
E\WKHZDOODUHDQRWWKHDUHDRIWKHWHVWEHGMRLQWV
ܸ௧௘௦௧   /RDGDWLQFLSLHQWFUDFNLQJIRUHDFKLQSODFH 9WHVW  /RDG DW LQFLSLHQW FUDFNLQJ IRU WKH LQSODFH
VKHDUWHVWGHVFULEHGLQ6HFWLRQ$,WHP
VKHDU WHVW SHUIRUPHG LQ DFFRUGDQFH ZLWK 6HFWLRQ
$N1 6YX' 7KHVXPRIWKHGLDSKUDJPVKHDUFDSDFLWLHV
RI ERWK HQGV RI WKH GLDSKUDJP WKDW DUH SDUDOOHO WR
WKHGLUHFWLRQRIWKHODWHUDOORDG
‫ݒ‬௧௢   0RUWDU VKHDU WHVW YDOXHV DV VSHFLILHG LQ
66YX' 7KHVXPRIWKH 6YX'YDOXHVIRUDOORIWKH
6HFWLRQ$N3D FRXSOHGGLDSKUDJPVDWDQGDERYH WKH OHYHOXQGHU
‫ݒ‬௨   8QLWVKHDUFDSDFLW\YDOXHIRUDGLDSKUDJP FRQVLGHUDWLRQ
VKHDWKHGZLWKDQ\RIWKHPDWHULDOVJLYHQLQ 7DEOH
$'RU7DEOH$(1P *(1(5$/
5(48,5(0(176
ܸ௪௫   7RWDOVKHDUIRUFHUHVLVWHGE\DVKHDUZDOODW $*HQHUDO  7KH VHLVPLF IRUFHUHVLVWLQJ
WKHOHYHOXQGHUFRQVLGHUDWLRQ1 V\VWHPVSHFLILHGLQWKLVFKDSWHUVKDOOFRPSO\ZLWK
WKH6%&H[FHSWDVPRGLILHGKHUHLQ
W  7RWDO VHLVPLF GHDG ORDG DV GHILQHG LQ WKH
EXLOGLQJFRGH1 ™ 6DXGL %XLOGLQJ&RGHVDQG
SURYLGH WKH EDVLF UHTXLUHPHQWV IRU D VHLVPLF
IRUFHUHVLVWLQJ V\VWHP 'LVWULEXWLRQ RI ODWHUDO
ܹௗ  7RWDO GHDG ORDG WULEXWDU\ WR D GLDSKUDJP
ORDGV VKDOO FRQVLGHU WKH UHODWLYH ULJLGLW\ RI
OHYHO1 KRUL]RQWDO GLDSKUDJPV )OH[LEOH GLDSKUDJPV
KDYH LQDGHTXDWH UHODWLYH VWLIIQHVV WR
UHGLVWULEXWHIRUFHEHWZHHQWKRVHHOHPHQWVWKDW

6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

DUH FRQVLGHUHG VKHDU ZDOOV E\ WKH VSHFLDO ™ 7KHVHDUHPLQLPXPUHTXLUHPHQWVIRUWKHSODQV

SURFHGXUH 'LDSKUDJPV LQ EXLOGLQJV WKDW XVH WREHVXEPLWWHG$OWKRXJKWKLVPD\VHHPOLNHDQ
WKH JHQHUDO SURFHGXUH DUH FDSDEOH RI DGPLQLVWUDWLYH UHTXLUHPHQW WKLV VHFWLRQ LV
UHGLVWULEXWLQJ WKH ODWHUDO ORDGV FDXVLQJ QHHGHGWRHQVXUHWKDWDWKRURXJKLQYHVWLJDWLRQ
LQFUHDVHGIRUFHVGXHWRWRUVLRQDOUHVSRQVHDQG RIWKHEXLOGLQJKDVEHHQPDGHDQGLVVKRZQRQ
FRXSOLQJWKHZHLJKWDWHDFKVWRU\OHYHOZLWKWKH UHTXLUHGSODQVWKDWDUHVXEPLWWHGWRWKHEXLOGLQJ
VKHDUZDOOV RIILFLDO
™ 7KH SODQV VKRXOG LQFOXGH RSHQLQJV DQG WKHLU
$$OWHUDWLRQV DQG UHSDLUV $OWHUDWLRQV DQG GLPHQVLRQV (DFK GLDSKUDJP VKRXOG EH
UHSDLUV UHTXLUHG WR PHHW WKH SURYLVLRQV RI WKLV LQYHVWLJDWHGDWVHYHUDOORFDWLRQV7KHOD\XSRI
FKDSWHU VKDOO FRPSO\ ZLWK DSSOLFDEOH VWUXFWXUDO WKHVKHDWKLQJVKRXOGEHREVHUYHGDQGSURSHUO\
UHTXLUHPHQWV RI WKH 6%&  XQOHVV VSHFLILFDOO\ GHVFULEHGLQWKHSODQV+RZHYHUWKHFRQWLQXLW\
SURYLGHGIRULQWKLVFKDSWHU7KH6%&DSSOLHV RI WKH ILQLVK IORRU VKHDWKLQJ XQGHU SDUWLWLRQV
XQOHVVH[SOLFLWO\H[FOXGHGRUPRGLILHGKHUHLQ QHHG QRW EH YHULILHG 6HFWLRQ $
UHIHUHQFHG E\ ,WHP  LV EDVHG RQ WKH
$5HTXLUHPHQWV IRU SODQV 7KH IROORZLQJ UHTXLUHPHQWV RULJLQDOO\ ZULWWHQ IRU WKH 8QLIRUP
FRQVWUXFWLRQ LQIRUPDWLRQ VKDOO EH LQFOXGHG LQ WKH &RGH IRU %XLOGLQJ &RQVHUYDWLRQ >DQG ODWHU DV
SODQVUHTXLUHGE\WKLVFKDSWHU 8QLIRUP %XLOGLQJ &RGH 8%& 6WDQGDUG @
RQ WKH VXEMHFW RI GLUHFW WHQVLRQ WHVWLQJ RI
 'LPHQVLRQHG IORRU DQG URRI SODQV VKRZLQJ H[LVWLQJDQFKRUVDQGQHZEROWV WRUTXHWHVWLQJ
H[LVWLQJZDOOVDQGWKHVL]HDQGVSDFLQJRIIORRU RI QHZ EROWV DQG SUHTXDOLILFDWLRQ WHVWLQJ IRU
DQG URRIIUDPLQJ PHPEHUV DQG VKHDWKLQJ EROWV DQG RWKHU W\SHV RI DQFKRUV
PDWHULDOV7KHSODQVVKDOOLQGLFDWHDOOH[LVWLQJ 3UHTXDOLILFDWLRQ WHVWLQJ PD\ EH XVHG WR MXVWLI\
FDSDFLWLHVIRUQHZEROWVWKDWGLIIHUIURPWKHRQHV
DQGQHZFURVVZDOOVDQGVKHDUZDOOVDQGWKHLU
VSHFLILHG LQ 7DEOH $( KRZHYHU WKH WHQVLRQ
PDWHULDOV RI FRQVWUXFWLRQ 7KH ORFDWLRQ RI DQG VKHDU FDSDFLWLHV RI QHZ EROWV GHWHUPLQHG
WKHVHZDOOVDQGWKHLURSHQLQJVVKDOOEHIXOO\ E\SUHTXDOLILFDWLRQWHVWLQJPD\QRWH[FHHG
GLPHQVLRQHGDQGGUDZQWRVFDOHRQWKHSODQV WLPHVWKHYDOXHVVSHFLILHGLQ7DEOH$(
 'LPHQVLRQHG ZDOO HOHYDWLRQV VKRZLQJ
RSHQLQJV SLHUV ZDOO FODVVHV DV GHILQHG LQ $6WUXFWXUDO REVHUYDWLRQ WHVWLQJ DQG
6HFWLRQ $ WKLFNQHVV KHLJKWV ZDOO LQVSHFWLRQ 6WUXFWXUDO REVHUYDWLRQ LQ DFFRUGDQFH
VKHDU WHVW ORFDWLRQV FUDFNV RU GDPDJHG ZLWK6HFWLRQRIWKH6%&VKDOOEHUHTXLUHG
SRUWLRQV UHTXLULQJ UHSDLUV WKH JHQHUDO IRUDOOVWUXFWXUHVLQZKLFKVHLVPLFUHWURILWLVEHLQJ
FRQGLWLRQ RI WKH PRUWDU MRLQWV DQG LI DQG SHUIRUPHG LQ DFFRUGDQFH ZLWK WKLV FKDSWHU
ZKHUHSRLQWLQJLVUHTXLUHG:KHUHWKHH[WHULRU 6WUXFWXUDO REVHUYDWLRQ VKDOO LQFOXGH YLVXDO
IDFHLVYHQHHUWKHW\SHRIYHQHHULWVWKLFNQHVV REVHUYDWLRQ RI ZRUN IRU FRQIRUPDQFH ZLWK WKH
DQG LWV ERQGLQJ DQGRU WLHV WR WKH VWUXFWXUDO DSSURYHGFRQVWUXFWLRQGRFXPHQWVDQGFRQILUPDWLRQ
ZDOOPDVRQU\VKDOODOVREHQRWHG RIH[LVWLQJFRQGLWLRQVDVVXPHGGXULQJGHVLJQ
 7KHW\SHRILQWHULRUZDOODQGFHLOLQJPDWHULDOV 6WUXFWXUDO WHVWLQJ DQG LQVSHFWLRQ IRU QHZ
DQGIUDPLQJ FRQVWUXFWLRQPDWHULDOVVKDOOEHLQDFFRUGDQFHZLWK
 7KH H[WHQW DQG W\SH RI H[LVWLQJ ZDOO WKH6%&H[FHSWDVPRGLILHGE\WKLVFKDSWHU
DQFKRUDJHWRIORRUVDQGURRIZKHQXVHGLQWKH ™ 7KHFRQVWUXFWLRQSKDVHRIWKHUHWURILWSURJUDP
GHVLJQ ZLOOXVXDOO\XQFRYHUXQIRUHVHHQFRQGLWLRQV7KH
 7KHH[WHQWDQGW\SHRISDUDSHWFRUUHFWLRQVWKDW HQJLQHHU UHVSRQVLEOH IRU WKH GHVLJQ PXVW
ZHUHSUHYLRXVO\SHUIRUPHGLIDQ\ SURYLGH D PRUH H[WHQVLYH REVHUYDWLRQ RI WKLV
 5HSDLUGHWDLOVLIDQ\RIFUDFNHGRUGDPDJHG W\SH RI SURMHFW WKDQ WKDW UHTXLUHG IRU QHZ
FRQVWUXFWLRQ7KLVLVWKHUHDVRQWKDWVWUXFWXUDO
XQUHLQIRUFHGPDVRQU\ZDOOVUHTXLUHGWRUHVLVW
REVHUYDWLRQ LV UHTXLUHG IRU DOO VWUXFWXUHV
IRUFHVVSHFLILHGLQWKLVFKDSWHU XQGHUJRLQJDVHLVPLFUHWURILW
 $OORWKHUSODQVVHFWLRQVDQGGHWDLOVQHFHVVDU\
WRGHOLQHDWHUHTXLUHGUHWURILWFRQVWUXFWLRQ 0$7(5,$/6
 7KHGHVLJQSURFHGXUHXVHGVKDOOEHVWDWHGRQ 5(48,5(0(176
ERWK WKH EXLOGLQJ SODQV DQG WKH EXLOGLQJ
$*HQHUDO 0DWHULDOV SHUPLWWHG E\ WKLV
SHUPLWDSSOLFDWLRQ
FKDSWHULQFOXGLQJWKHLUDSSURSULDWHVWUHQJWKGHVLJQ
 'HWDLOVRIWKHDQFKRUSUHTXDOLILFDWLRQSURJUDP
YDOXHV DQG WKRVH H[LVWLQJ FRQILJXUDWLRQV RI
UHTXLUHG E\ 6HFWLRQ $ LI XVHG
PDWHULDOVVSHFLILHGKHUHLQPD\EHXVHGWRPHHWWKH
LQFOXGLQJORFDWLRQDQGUHVXOWVRIDOOWHVWV
UHTXLUHPHQWVRIWKLVFKDSWHU

6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

™ ([LVWLQJPDWHULDOVDVGHVFULEHGLQ7DEOH$' QHZ PDWHULDOV RU DOWHUQDWLYHO\ VKDOO KDYH LWV

QHZPDWHULDOVDVGHVFULEHGLQ7DEOH$(DQG VWUXFWXUDO IXQFWLRQV UHSODFHG ZLWK QHZ PDWHULDOV
PDVRQU\PDWHULDOVZKHQWHVWHGDVGHVFULEHGLQ DQGVKDOOEHDQFKRUHGWRVXSSRUWLQJHOHPHQWV
WKLVVHFWLRQRUFDWHJRUL]HGE\I¶PPD\EHXVHG
DVDSDUWRIWKHVHLVPLFIRUFHUHVLVWLQJVWUXFWXUDO ™ ,WLVHVVHQWLDOIRUWKHHQJLQHHUWRPDNHDSURSHU
V\VWHP 1HZ PDWHULDOV SHUPLWWHG E\ WKH 6%& HYDOXDWLRQ RI WKH H[LVWLQJ PDVRQU\ $OORZDEOH
PD\EHXVHGWRVXSSOHPHQWWKHVWUHQJWKRI VKHDU YDOXHV IRU XVH LQ WKH DQDO\VLV RI VKHDU
H[LVWLQJPDWHULDOV ZDOOVDQGDOORZDEOHKHLJKWWRWKLFNQHVVYDOXHV
IRUQRUPDOZDOOVWKDWDUHQRWDQDO\]HGIRURXW
$([LVWLQJ PDWHULDOV ([LVWLQJ PDWHULDOV RISODQHORDGLQJDUHEDVHGRQWKHDVVXPSWLRQ
XVHGDVSDUWRIWKHUHTXLUHGYHUWLFDOORDGFDUU\LQJRU RI DGHTXDWH VWUHQJWKV DQG OD\XS RI WKH
ODWHUDO IRUFHUHVLVWLQJ V\VWHP VKDOO EH LQ VRXQG PDVRQU\ 1RQFRQIRUPLQJ PDVRQU\ PXVW EH
FRQGLWLRQ RU VKDOO EH UHSDLUHG RU UHPRYHG DQG UHPRYHGRUWUHDWHGDVYHQHHU
UHSODFHGZLWKQHZPDWHULDOV$OORWKHUXQUHLQIRUFHG $ /D\XSRIZDOOV
PDVRQU\PDWHULDOVVKDOOFRPSO\ZLWKWKHIROORZLQJ
UHTXLUHPHQWV $ 0XOWLZ\WKH VROLG EULFN 7KH
IDFLQJDQGEDFNLQJVKDOOEHERQGHGVRWKDWQRWOHVV
 7KHOD\XSRIWKHPDVRQU\XQLWVVKDOOFRPSO\ WKDQ  SHUFHQW RI WKH H[SRVHG IDFH DUHD LV
ZLWK 6HFWLRQ $ DQG WKH TXDOLW\ RI FRPSRVHGRIVROLGKHDGHUVH[WHQGLQJQRWOHVVWKDQ
ERQG EHWZHHQ WKH XQLWV KDV EHHQ YHULILHG WR  PP LQWR WKH EDFNLQJ 7KH FOHDU GLVWDQFH
WKHVDWLVIDFWLRQRIWKHEXLOGLQJRIILFLDO EHWZHHQ DGMDFHQW IXOOOHQJWK KHDGHUV VKDOO QRW
 &RQFUHWH PDVRQU\ XQLWV DUH YHULILHG WR EH H[FHHG  PP YHUWLFDOO\ RU KRUL]RQWDOO\:KHUH
ORDGEHDULQJ XQLWV FRPSO\LQJ ZLWK $670 WKH EDFNLQJ FRQVLVWV RI WZR RU PRUH Z\WKHV WKH
&RUVXFKRWKHUVWDQGDUGDVLVDFFHSWDEOHWR KHDGHUVVKDOOH[WHQGQRWOHVVWKDQPPLQWRWKH
WKHEXLOGLQJRIILFLDODQG PRVWGLVWDQWZ\WKHRUWKHEDFNLQJZ\WKHVVKDOOEH
 7KH FRPSUHVVLYH VWUHQJWK RI SODLQ FRQFUHWH ERQGHG WRJHWKHU ZLWK VHSDUDWH KHDGHUV ZLWK WKHLU
ZDOOV VKDOO EH GHWHUPLQHG EDVHG RQ FRUHV DUHD DQG VSDFLQJ FRQIRUPLQJ WR WKH IRUHJRLQJ
WDNHQ IURP HDFK FODVV RI FRQFUHWH ZDOO 7KH :\WKHV RI ZDOOV QRW ERQGHG DV GHVFULEHG DERYH
ORFDWLRQDQGQXPEHURIWHVWVVKDOOEHWKHVDPH VKDOOEHFRQVLGHUHGYHQHHU9HQHHUZ\WKHVVKDOOQRW
DV WKRVH SUHVFULEHG IRU WHQVLOHVSOLWWLQJ EH LQFOXGHG LQ WKH HIIHFWLYH WKLFNQHVV XVHG LQ
VWUHQJWK WHVWV LQ 6HFWLRQV $ DQG FDOFXODWLQJ WKH KHLJKWWRWKLFNQHVV UDWLR DQG WKH
$RULQ6HFWLRQ$ VKHDUFDSDFLW\RIWKHZDOO
([FHSWLRQ  :KHUH 6' LV QRW PRUH WKDQ 
7KH XVH RI PDWHULDOV QRW VSHFLILHG KHUHLQ RU LQ YHQHHUZ\WKHVDQFKRUHGDVVSHFLILHGLQWKH6%&
6HFWLRQ $ VKDOO EH EDVHG RQ VXEVWDQWLDWLQJ DQGPDGHFRPSRVLWHZLWKEDFNXSPDVRQU\PD\EH
UHVHDUFKGDWDFRYHULQJYDULRXVEHKDYLRUDODVSHFWVRIWKH XVHGIRUFDOFXODWLRQRIWKHHIIHFWLYHWKLFNQHVV
PDWHULDOV RU HQJLQHHULQJ MXGJPHQW ZLWK WKH
DSSURYDORIWKHEXLOGLQJRIILFLDO ™ 7KHFRQFHUQLVIRUWKHLQWHJULW\RIWKHPXOWLZ\WKH
ZDOODFWLQJDVDZKROHLQUHVLVWLQJRXWRISODQH
™ $670 & FDQ EH XVHG IRU GHVFULSWLRQ RI IRUFHV³)DFLQJ´PHDQVWKHZ\WKHDWWKHIDFHRI
GLPHQVLRQV RI ORDGEHDULQJ KROORZ FRQFUHWH WKHZDOOZKHWKHULQWHULRURUH[WHULRU³EDFNLQJ´
XQLWV )DFH VKHOO WKLFNQHVV RI KROORZ XQLWV LV PHDQV WKH LQQHU Z\WKHV WKDW DUH QRW QRUPDOO\
QHHGHG IRU FDOFXODWLRQ RI QHW EHGGHG FURVV YLVLEOH³/D\XS´PHDQVWKHSDWWHUQRIPDVRQU\
VHFWLRQ WUDGLWLRQDOO\ RQO\ IDFH VKHOOV DUH XQLWV LQ HDFK Z\WKH DQG LQ WKH LQWHUORFNLQJ RI
PRUWDUHG LQ XQJURXWHG KROORZ FRQFUHWH XQLWV Z\WKHV 7KH SULPDU\ UHTXLUHPHQW LV WKDW DOO
)DFH VKHOO WKLFNQHVV IRU QRPLQDO WKLFNQHVV RI Z\WKHV EH DGHTXDWHO\ LQWHUORFNHG E\ KHDGHU
WKHXQLWLVPPQRPLQDOPPPP EULFNV7KHTXDQWLW\RIPRUWDULQWKHFROODUMRLQWV
QRPLQDOPPPPQRPLQDOPP EHWZHHQ Z\WKHV LV DOVR LPSRUWDQW KDYLQJ DQ
PPQRPLQDOPP HIIHFWRQWKHDOORZDEOHKHLJKWWRWKLFNQHVVUDWLR
IRU WKH ZDOO DV VSHFLILHG LQ WKH QRWHV WR 7DEOH
$([LVWLQJXQUHLQIRUFHGPDVRQU\
$%
$ *HQHUDO 8QUHLQIRUFHG PDVRQU\ ™ 7KH VHFWLRQ H[FHSWLRQ WR WKH UHTXLUHPHQWV RI
ZDOOVXVHGWRFDUU\YHUWLFDOORDGVRUVHLVPLFIRUFHV WKH FRPPRQ OD\XS RI PXOWLZ\WKH ZDOOV LV
SDUDOOHODQGSHUSHQGLFXODUWRWKHZDOOSODQHVKDOOEH SHUPLWWHGIRUORZHUVHLVPLFKD]DUG]RQHV7KLV
WHVWHGDVVSHFLILHGLQWKLVVHFWLRQ$OOPDVRQU\WKDW H[FHSWLRQ LV DSSOLFDEOH ZKHUH 6' DV GHILQHG
DQGPDSSHGLQWKH6%&LVJRUOHVV7KH
GRHVQRWPHHWWKHPLQLPXPVWDQGDUGVHVWDEOLVKHG
H[FHSWLRQLQWKLVVHFWLRQSHUPLWVYHQHHUZ\WKHV
E\WKLVFKDSWHUVKDOOEHUHPRYHGDQGUHSODFHGZLWK

6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

ZLWK DQFKRUDJH DV VSHFLILHG E\ WKH 6%&  ™ ,WHP0DQ\PDVRQU\ZDOOVLQWKH.LQJGRPRI

DQGPDGHFRPSRVLWHZLWKWKHEDFNLQJPDVRQU\ 6DXGL $UDELD KDYH EHHQ FRQVWUXFWHG ZLWK
WREHFRQVLGHUHGDVDSDUWRIWKHVWUXFWXUDOZDOO PRUWDUVWKDWKDYHVKHDUVWUHQJWKVXFKWKDWWKH
7KHZ\WKHVPD\EHERQGHGE\DFRPELQDWLRQ PRUWDUVKHDUVWUHQJWKWHVWLVQRWSRVVLEOHHJ
RI DGGLWLRQDO WLHV RU WKH FRPELQDWLRQ RI JURXW KROORZ PDVRQU\ 7KH IDLOXUH PD\ EH WKH
DQGWLHVDQGVKRXOGEHFKHFNHGWRGHWHUPLQHLI EHDULQJRQWKHHQGRIWKHPDVRQU\XQLWVDWWKH
WKH\FDQWUDQVIHUWKHFDOFXODWHGVWUHVVEHWZHHQ MDFN :KHUH WKLV RFFXUV DQ DOWHUQDWLYH WHVWLQJ
Z\WKHV PHWKRG GHVFULEHG LQ 6HFWLRQ 
GHWHUPLQHV WHQVLOH VSOLWWLQJ VWUHQJWK E\ WKH
$ *URXWHG RU XQJURXWHG KROORZ VWDQGDUG$670SURFHGXUH
FRQFUHWHRUFOD\EORFNDQGVWUXFWXUDOKROORZFOD\
WLOH*URXWHGRUXQJURXWHGKROORZFRQFUHWHRUFOD\ $ $OWHUQDWLYH SURFHGXUHV IRU
EORFNDQGVWUXFWXUDOKROORZFOD\WLOHVKDOOEHODLGLQ WHVWLQJPDVRQU\ 7KH WHQVLOHVSOLWWLQJVWUHQJWKRI
DUXQQLQJERQGSDWWHUQ H[LVWLQJ PDVRQU\ ݂௦௣  RU WKH SULVP VWUHQJWK RI
H[LVWLQJPDVRQU\݂௠ᇱ  PD\ EH LQ DFFRUGDQFH ZLWK
$ 2WKHU OD\XS SDWWHUQV /D\XS
RQHRIWKHIROORZLQJSURFHGXUHV
SDWWHUQV RWKHU WKDQ WKRVH VSHFLILHG LQ 6HFWLRQV

$ DQG $ DERYH DUH DOORZHG LI
 :\WKHVRIVROLGPDVRQU\XQLWVVKDOOEHWHVWHG
WKHLUSHUIRUPDQFHFDQEHMXVWLILHG
E\VDPSOLQJWKHPDVRQU\E\GULOOHGFRUHVRI
$ 7HVWLQJRIPDVRQU\ QRWOHVVWKDQPPLQGLDPHWHU$EHGMRLQW
LQWHUVHFWLRQZLWKDKHDGMRLQWVKDOOEHLQWKH
$ 0RUWDU WHVWV 7KH TXDOLW\ RI
FHQWHU RI WKH FRUH 7KH WHQVLOHVSOLWWLQJ
PRUWDULQDOOPDVRQU\ZDOOVVKDOOEHGHWHUPLQHGE\
VWUHQJWKRIWKHVHFRUHVVKRXOGEHGHWHUPLQHG
SHUIRUPLQJLQSODFHVKHDUWHVWVLQDFFRUGDQFHZLWK
E\WKHVWDQGDUGWHVWPHWKRGRI$670&
WKHIROORZLQJ
7KHFRUHVKRXOGEHSODFHGLQWKHWHVWDSSDUDWXV
ZLWKWKHEHGMRLQWGHJUHHVUDGIURP
 7KH EHG MRLQWV RI WKH RXWHU Z\WKH RI WKH
WKH KRUL]RQWDO 7KH WHQVLOHVSOLWWLQJ VWUHQJWK
PDVRQU\VKDOOEHWHVWHGLQVKHDUE\ ODWHUDOO\
VKRXOG EH GHWHUPLQHG E\ WKH IROORZLQJ
GLVSODFLQJ D VLQJOH EULFN UHODWLYH WR WKH
HTXDWLRQ
DGMDFHQWEULFNVLQWKHVDPHZ\WKH7KHKHDG

MRLQWRSSRVLWHWKHORDGHGHQGRIWKHWHVWEULFN ଶ௉
VKDOOEHFDUHIXOO\H[FDYDWHGDQGFOHDUHG7KH ݂௦௣ ൌ     $
௔
೙
EULFN DGMDFHQW WR WKH ORDGHG HQG RI WKH WHVW 
EULFNVKDOOEHFDUHIXOO\UHPRYHGE\VDZLQJRU  +ROORZXQLWPDVRQU\FRQVWUXFWHGRIWKURXJK
GULOOLQJDQGH[FDYDWLQJWRSURYLGHVSDFHIRUD WKHZDOOXQLWVVKDOOEHWHVWHGE\VDPSOLQJWKH
K\GUDXOLFUDPDQGVWHHOORDGLQJEORFNV6WHHO PDVRQU\E\DVDZQVTXDUHSULVPRIQRWOHVV
EORFNVWKHVL]HRIWKHHQGRIWKHEULFNVKDOO WKDQ  PP 7KH WHQVLOHVSOLWWLQJ
EHXVHGRQHDFKHQGRIWKHUDPWRGLVWULEXWH VWUHQJWKVKRXOGEHGHWHUPLQHGE\WKHVWDQGDUG
WKH ORDG WR WKH EULFN 7KH EORFNV VKDOO QRW WHVWPHWKRGRI$670(7KHGLDJRQDORI
FRQWDFW WKH PRUWDU MRLQWV 7KH ORDG VKDOO EH WKH SULVP VKRXOG EH SODFHG LQ D YHUWLFDO
DSSOLHGKRUL]RQWDOO\LQWKHSODQHRIWKHZ\WKH SRVLWLRQ7KHWHQVLOHVSOLWWLQJVWUHQJWKVKRXOG
7KHORDGUHFRUGHGDWILUVWPRYHPHQWRIWKHWHVW EHGHWHUPLQHGE\WKHIROORZLQJHTXDWLRQ
EULFNDVLQGLFDWHGE\VSDOOLQJRIWKHIDFHRIWKH 
PRUWDUEHGMRLQWVLV9WHVWLQ(TXDWLRQ$ ݂௦௣ ൌ
଴Ǥସଽସ௉
   $
 $OWHUQDWLYH SURFHGXUHV IRU WHVWLQJ VKDOO EH ௔ ೙

XVHG ZKHUH LQSODFH WHVWLQJ LV QRW SUDFWLFDO 

EHFDXVHRIFUXVKLQJRURWKHUIDLOXUHPRGHRI  $QDOWHUQDWLYHWRPDWHULDOWHVWLQJLVHVWLPDWLRQ
WKHPDVRQU\XQLWVHH6HFWLRQ$ RI WKH I
P RI WKH H[LVWLQJ PDVRQU\ 7KLV
DOWHUQDWLYH VKRXOG EH OLPLWHG WR UHFHQWO\
™ ,WHP0RUWDUWHVWVDUHSHUIRUPHGE\VKHDULQJ FRQVWUXFWHG PDVRQU\ 7KH GHWHUPLQDWLRQ RI
RI WKH PRUWDU MRLQWV DERYH DQG EHORZ WKH WHVW
I
P UHTXLUHV WKDW WKH XQLW FRUUHVSRQG WR D
PDVRQU\XQLW7KHWHVWORDGLVUHFRUGHGDWWKH
ILUVWVLJQRIPRYHPHQWRIWKHWHVWEULFN7KLVFDQ VSHFLILFDWLRQRIWKHXQLWE\DQ$670VWDQGDUG
EH GHWHFWHG ZKHQ VDQG JUDLQV DUH GHWDFKLQJ DQGFODVVLILFDWLRQRIWKHPRUWDUE\W\SH
IURP WKH PRUWDU MRLQW 7KH XVHU FDQ UHIHU WR ™ 7KHVH SURFHGXUHV GHWHUPLQH WKH WHQVLOH
$670 & IRU D SURFHGXUH IRU FRQGXFWLQJ VSOLWWLQJ VWUHQJWK RI PDVRQU\ IVS 7KH WHQVLOH
VKHDUVWUHQJWKWHVWV VSOLWWLQJ VWUHQJWK RI PDVRQU\ DGMXVWHG IRU WKH

6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

HIIHFWVRID[LDOORDGDVXVHGLQ(TXDWLRQ$ PD\ QRW KDYH EHHQ VXEMHFWHG WR WKH VDPH

LVXVHGWRGHWHUPLQHWKHXQUHLQIRUFHGPDVRQU\ HQYLURQPHQWDO LQIOXHQFHV 7KHVH DQG RWKHU
VKHDUVWUHQJWKYP7KHSLHUVKHDUVWUHQJWK9P FRQGLWLRQVPD\PDNHLWGHVLUDEOHWRGLYLGHZDOOV
LV FDOFXODWHG XVLQJ YP$Q ZKLFK LV WKH LQWR FODVVHV DFFRUGLQJ WR WKHLU UHODWLYH RYHUDOO
DYHUDJH VWUHQJWK LQ VKHDU IRU D UHFWDQJXODU TXDOLW\ VHH 6HFWLRQ $ 7KH QXPEHU
FURVVVHFWLRQ RI WHVWV LQ HDFK FODVV RI ZDOO VKRXOG EH
™ 7KH VKHDU VWUHQJWK LV DQ H[SHFWHG VKHDU HVWDEOLVKHG WR SURYLGH D ERG\ RI GDWD WKDW LV
VWUHQJWKQRORDGIDFWRUVRUFDSDFLW\UHGXFWLRQ DGHTXDWHWRHVWDEOLVKDSHUFHQWYDOXHYW
IDFWRUVDUHXVHGLQ$SSHQGL[&KDSWHU$ ™ $FRPPRQOLQHRIUHVLVWDQFHLVGHILQHGDVDVHW
RIRQHRUPRUHPDVRQU\ZDOOVDWDQHGJHRID
$ /RFDWLRQRIWHVWV7KH VKHDUWHVWV GLDSKUDJP 7KH ZDOO PD\ KDYH RIIVHWV LQ WKDW
VKDOO EH WDNHQ DW ORFDWLRQV UHSUHVHQWDWLYH RI WKH FRPPRQ OLQH $ PLQLPXP RI HLJKW WHVWV IRU D
PRUWDU FRQGLWLRQV WKURXJKRXW WKH HQWLUH EXLOGLQJ EXLOGLQJ LV VSHFLILHG 7KLV ZRXOG EH WKH
WDNLQJ LQWR DFFRXQW YDULDWLRQV LQ ZRUNPDQVKLS DW PLQLPXP QXPEHU IRU D VLQJOHVWRU\ EXLOGLQJ
GLIIHUHQW EXLOGLQJ KHLJKW OHYHOV YDULDWLRQV LQ 7KHDUHDRIPLVJURVVDUHDLQFOXGLQJZDOO
ZHDWKHULQJRIWKHH[WHULRUVXUIDFHVDQGYDULDWLRQV RSHQLQJV
LQ WKH FRQGLWLRQ RI WKH LQWHULRU VXUIDFHV GXH WR $ 0LQLPXPTXDOLW\RIPRUWDU
GHWHULRUDWLRQFDXVHGE\OHDNVDQGFRQGHQVDWLRQRI
ZDWHU DQGRU E\ WKH GHOHWHULRXV HIIHFWV RI RWKHU  0RUWDUVKHDUWHVWYDOXHVYWRLQN3DVKDOOEH
VXEVWDQFHVFRQWDLQHGZLWKLQWKHEXLOGLQJ7KHH[DFW REWDLQHG IRU HDFK LQSODFH VKHDU WHVW LQ
WHVWORFDWLRQVVKDOOEHGHWHUPLQHGDWWKHEXLOGLQJVLWH DFFRUGDQFHZLWKWKHIROORZLQJHTXDWLRQ
E\ WKH HQJLQHHU LQ UHVSRQVLEOH FKDUJH RI WKH 
VWUXFWXUDO GHVLJQ ZRUN $Q DFFXUDWH UHFRUG RI DOO ܸ
‫ݒ‬௧௢ ൌ ቀ ௧௘௦௧ൗ‫ ܣ‬ቁ െ ܲ஽ା௅   $
VXFKWHVWVDQGWKHLUORFDWLRQVLQWKHEXLOGLQJVKDOOEH ௕

UHFRUGHGDQGWKHVHUHVXOWVVKDOOEHVXEPLWWHGWRWKH
 ,QGLYLGXDO XQUHLQIRUFHG PDVRQU\ ZDOOV ZLWK
EXLOGLQJ GHSDUWPHQW IRU DSSURYDO DV SDUW RI WKH
YWR FRQVLVWHQWO\ OHVV WKDQ  N3D VKDOO EH
VWUXFWXUDODQDO\VLV
HQWLUHO\SRLQWHGSULRUWRUHWHVWLQJ
™ 7KHWHVWORFDWLRQVVKRXOGEHGLVWULEXWHGRYHUWKH  7KHPRUWDUVKHDUVWUHQJWKYWLVWKHYDOXHLQ
ZDOO VXUIDFH WR DFFRXQW IRU YDULDELOLW\ LQ N3D WKDW LV H[FHHGHG E\  SHUFHQW RI WKH
FRQVWUXFWLRQ HQYLURQPHQWDO LQIOXHQFHV DQG PRUWDUVKHDUWHVWYDOXHVYWR
ZHDWKHULQJ 7KH H[DFW ORFDWLRQ RI HDFK WHVW
 8QUHLQIRUFHG PDVRQU\ ZLWK PRUWDU VKHDU
VKDOOEHGHWHUPLQHGDWWKHVLWHE\WKHHQJLQHHU
5HODWLYHO\ VPDOO DUHDV WKDW DUH SRLQWHG GXH WR
VWUHQJWK YW OHVV WKDQ  N3D VKDOO EH
ORFDO GHWHULRUDWLRQ VKRXOG QRW EH XVHG IRU WHVW UHPRYHGSRLQWHGDQGUHWHVWHGRUVKDOOKDYHLWV
DUHDV VLQFH SRLQWHG DUHDV ZLOO SURGXFH KLJKHU VWUXFWXUDO IXQFWLRQ UHSODFHG DQG VKDOO EH
YDOXHVWKDWFDQVNHZWKHWHVWUHVXOWV DQFKRUHG WR VXSSRUWLQJ HOHPHQWV LQ
DFFRUGDQFH ZLWK 6HFWLRQV $ DQG
$ 1XPEHU RI WHVWV  7KH PLQLPXP $:KHQH[LVWLQJPRUWDULQDQ\Z\WKHLV
QXPEHURIWHVWVSHUFODVVVKDOOEHDVIROORZV SRLQWHG WR LQFUHDVH LWV VKHDU VWUHQJWK DQG LV
UHWHVWHG WKH FRQGLWLRQ RI WKH PRUWDU LQ WKH
 $WHDFKRIERWKWKHILUVWDQGWRSVWRULHVQRW DGMDFHQW EHG MRLQWV RI WKH LQQHU Z\WKH RU
OHVV WKDQ WZR WHVWV SHU ZDOO RU OLQH RI ZDOO Z\WKHVDQGWKHRSSRVLWHRXWHUZ\WKHVKDOOEH
HOHPHQWV SURYLGLQJ D FRPPRQ OLQH RI H[DPLQHG IRU H[WHQW RI GHWHULRUDWLRQ 7KH
UHVLVWDQFHWRODWHUDOIRUFHV VKHDU VWUHQJWK RI DQ\ ZDOO FODVV VKDOO EH QR
 $WHDFKRIDOORWKHUVWRULHVQRWOHVVWKDQRQH JUHDWHUWKDQWKDWRIWKHZHDNHVWZ\WKHRIWKDW
WHVWSHUZDOORUOLQHRIZDOOHOHPHQWVSURYLGLQJ FODVV
DFRPPRQOLQHRIUHVLVWDQFHWRODWHUDOIRUFHV
 ,QDQ\FDVHQRWOHVVWKDQRQHWHVWSHUP ™ $ PRUWDU VKHDU WHVW YDOXH YWR LV REWDLQHG IRU
RIZDOOVXUIDFHDQGQRWOHVVWKDQDWRWDORIHLJKW HDFK WHVW ORFDWLRQ E\ GLYLGLQJ WKH WHVW IRUFH
WHVWV 9WHVWE\WKHVXPRIWKHDUHDVRIWKHXSSHUDQG
ORZHUVXUIDFHVRIWKHEULFNDQGVXEWUDFWLQJWKH
™ 1XPEHUVDQGORFDWLRQVDUHVSHFLILHGWRHQVXUH D[LDOVWUHVVLQWKHZDOODWWKHWLPHRIWHVWLQJ
D UHSUHVHQWDWLYH VDPSOH RI H[LVWLQJ PDVRQU\ ™ $[LDOVWUHVVLVGHILQHGWRLQFOXGHDFWXDOOLYHORDG
FRQVLGHULQJWKDWWKHZDOOVZHUHQRWQHFHVVDULO\ ZKHUHLWLVVLJQLILFDQWRUGLQDULO\WKHXVHRIWKH
EXLOW DW WKH VDPH WLPH DQG ZLWK WKH VDPH GHDG ZHLJKW RI WKH VXSHULPSRVHG PDVRQU\ LV
ZRUNPDQVKLS :RUNPDQVKLS PD\ YDU\ LQ D FORVH HQRXJK $ VHW RI YDOXHV RI Y WR LV
JLYHQZDOORIWHQEHLQJSRRUHUQHDUWKHWRSDQG DVVHPEOHGIRUWKHZKROHEXLOGLQJ

6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

™ :KHQ DQ LQGLYLGXDO ZDOO KDV YDOXHV RI Y WR WKDW ™ :KHQ D PDVRQU\ XQLW LV UHPRYHG IRU WKH LQ
DUH FRQVLVWHQWO\ EHORZ  N3D WKH ZDOO PD\ SODFH VKHDU WHVW WKH FROODU MRLQW EHWZHHQ WKH
EH XSJUDGHG E\ SRLQWLQJ :KHUH WKLV LV GRQH H[WHULRU Z\WKH DQG WKH LQWHULRU Z\WKH LV
WKH ZKROH ZDOO PXVW EH SRLQWHG 7KHQ WKH H[SRVHG7KHSHUFHQWDJHRIPRUWDUFRYHUDJHRI
XSJUDGHGZDOOLVUHWHVWHGDQGLPSURYHGYDOXHV WKH FROODU MRLQW LV HVWLPDWHG DQG UHSRUWHG ZLWK
RIYWRZLOOEHREWDLQHG7KHVHLPSURYHGYDOXHV WKH UHVXOWV RI WKH LQSODFH VKHDU WHVWLQJ )LIW\
RIYWRPD\EHXVHGLQSODFHRIWKHRULJLQDOYDOXHV SHUFHQWRIWKHFROODUMRLQWPXVWEHILOOHGWRPHHW
IRU WKDW ZDOO DQG D QHZ VHW RI YDOXHV RI YWR LV WKH UHTXLUHPHQWV RI WKH QRWHV WR 7DEOH $%
DVVHPEOHGIRUFDOFXODWLRQRIY WRVLQFHWKLVZDOO 7DEOH $% VSHFLILHV WKH DOORZDEOH KHLJKW
QRZUHSUHVHQWVDFODVVRIPDVRQU\ WKLFNQHVVUDWLRVRI850ZDOOV
™ 2QFHDVHWRIYDOXHVRIYWRLVREWDLQHGIRUWKH
EXLOGLQJRUDFODVVRIPDVRQU\WKHPRUWDUVKHDU $ 8QUHLQIRUFHG PDVRQU\ FODVVHV
VWUHQJWK YW IRU WKH EXLOGLQJ RU WKH FODVV RI ([LVWLQJXQUHLQIRUFHGPDVRQU\VKDOOEHFDWHJRUL]HG
PDVRQU\LVGHWHUPLQHGDVWKHYDOXHRIYWRWKDW LQWR RQH RU PRUH FODVVHVEDVHG RQ VKHDU VWUHQJWK
LVH[FHHGHGE\SHUFHQWRIWKHYDOXHVRIYWR TXDOLW\RIFRQVWUXFWLRQVWDWHRIUHSDLUGHWHULRUDWLRQ
™ :KHQYWLVOHVVWKDQN3DIRUWKHEXLOGLQJRU DQG ZHDWKHULQJ$ FODVVVKDOOEH FKDUDFWHUL]HGE\
DFRPPRQOLQHRIUHVLVWDQFHWKHPDVRQU\LQWKH WKH DOORZDEOH PDVRQU\ VKHDU VWUHVV GHWHUPLQHG LQ
EXLOGLQJ RU OLQH RI UHVLVWDQFH PXVW EH HLWKHU DFFRUGDQFHZLWK6HFWLRQ$ &ODVVHVVKDOOEH
UHPRYHG RU XSJUDGHG E\ UHSRLQWLQJ DQG WKHQ GHILQHG IRU ZKROH ZDOOV QRW IRU VPDOO DUHDV RI
UHWHVWHG WR YHULI\ WKDW WKH PRUWDU PHHWV WKH PDVRQU\ZLWKLQDZDOO
PLQLPXP VKHDU VWUHQJWK YDOXH RI  N3D
$OWHUQDWLYHO\WKHZDOO¶VVWUXFWXUDOIXQFWLRQVKDOO ™ 7KLV VHFWLRQ DOORZV FDWHJRUL]DWLRQ RI PDVRQU\
EHUHSODFHGDQGWKHPDVRQU\LVWREHDQFKRUHG LQWRFODVVHV$VLQJOHZDOOPD\EHGHILQHGDVD
LQDFFRUGDQFHZLWKFRGHUHTXLUHPHQWV FODVV7KHSURYLVLRQWKDWSHUFHQWRIWKHWHVWV
PDGHLQWKLVZDOOH[FHHGWKHWHVWYDOXHYWRZRXOG
$ 0LQLPXPTXDOLW\RIPDVRQU\ UHTXLUH D PLQLPXP RI ILYH WHVWV LQ WKDW ZDOO $
 7KH PLQLPXP DYHUDJH YDOXH RI WHQVLOH WKUHHVWRU\ RU KLJKHU EXLOGLQJ ZLOO KDYH D
VSOLWWLQJVWUHQJWKGHWHUPLQHGE\(TXDWLRQ$ PLQLPXP RI ILYH WHVWV LQ DQ\ ZDOO ,I
FDWHJRUL]DWLRQ RI D ZDOO RU ZDOOV DV D FODVV LV
 RU $ VKDOO EH  N3D 7KH PLQLPXP
FRQWHPSODWHGLQDEXLOGLQJRIIHZHUWKDQWKUHH
YDOXHRII
PGHWHUPLQHGE\FDWHJRUL]DWLRQRI VWRULHVDGGLWLRQDOWHVWVZLOOEHUHTXLUHGLQHDFK
WKH PDVRQU\ XQLWV DQG PRUWDU VKRXOG EH  RIWKHZDOOVRUOLQHRIZDOOV
03D
 ,QGLYLGXDO XQUHLQIRUFHG PDVRQU\ ZDOOV ZLWK $ 3RLQWLQJ 'HWHULRUDWHG PRUWDU
DYHUDJHWHQVLOHVSOLWWLQJVWUHQJWKRIOHVVWKDQ MRLQWV LQ XQUHLQIRUFHG PDVRQU\ ZDOOV VKDOO EH
 N3D VKDOO EH HQWLUHO\ SRLQWHG SULRU WR SRLQWHG LQ DFFRUGDQFH ZLWK WKH IROORZLQJ
UHWHVWLQJ UHTXLUHPHQWV
 +ROORZXQLWXQUHLQIRUFHGPDVRQU\ZDOOVZLWK 
HVWLPDWHGSULVPFRPSUHVVLYHVWUHQJWKRIOHVV  -RLQW SUHSDUDWLRQ 7KH GHWHULRUDWHG PRUWDU
WKDQ  03D VKDOO EH JURXWHGWR LQFUHDVHWKH VKDOOEHFXWRXWE\PHDQVRIDWRRWKLQJFKLVHO
DYHUDJHQHWDUHDFRPSUHVVLYHVWUHQJWK RUQRQLPSDFWSRZHUWRROWRDGHSWKDWZKLFK
VRXQGPRUWDULVUHDFKHGEXWQRWOHVVWKDQ
™ $ PLQLPXP TXDOLW\ RI DQ DVVHPEODJH RI XQLWV PP &DUH VKDOO EH WDNHQ QRW WR GDPDJH WKH
DQG PRUWDU LV UHTXLUHG LQ RUGHU WR KDYH
EULFN HGJHV $IWHU FXWWLQJ LV FRPSOHWH DOO
FRQILGHQFHLQWKHGHWHUPLQDWLRQRIVWUHQJWKOLPLW
YDOXHV+ROORZXQLWPDVRQU\FDQKDYHLWVWHQVLOH ORRVHPDWHULDOVKDOOEHUHPRYHGZLWKDEUXVK
VSOLWWLQJVWUHQJWKLQFUHDVHGE\SRLQWLQJ+ROORZ DLUVWUHDPRUZDWHUVWUHDP
XQLWPDVRQU\FRPPRQO\KDVRQO\WKHIDFHVKHOO  0RUWDUSUHSDUDWLRQ7KHPRUWDUPL[VKDOOEH
VXSSRUWHG RQ D PRUWDU EHG MRLQW +ROORZ XQLW SURSRUWLRQHG DV UHTXLUHG E\ WKH UHJLVWHUHG
PDVRQU\PD\DOVREHJURXWHGWRLQFUHDVHLWVQHW GHVLJQSURIHVVLRQDO7KHSRLQWLQJPRUWDUVKDOO
DUHDDQGWHQVLOHVSOLWWLQJVWUHQJWK EHSUHK\GUDWHGE\ILUVWWKRURXJKO\PL[LQJDOO
$ &ROODU MRLQWV 7KH FROODU MRLQWV LQJUHGLHQWVGU\DQGWKHQPL[LQJDJDLQDGGLQJ
VKDOOEHLQVSHFWHGDWWKHWHVWORFDWLRQVGXULQJHDFK RQO\ HQRXJK ZDWHU WR SURGXFH D GDPS
LQSODFHVKHDUWHVWDQGHVWLPDWHVRIWKHSHUFHQWDJH ZRUNDEOHPL[ZKLFKZLOOUHWDLQLWVIRUPZKHQ
RI DGMDFHQW Z\WKH VXUIDFHV WKDW DUH FRYHUHG ZLWK SUHVVHGLQWRDEDOO7KHPRUWDUVKDOOEHNHSWLQ
PRUWDUVKDOOEHUHSRUWHGDORQJZLWKWKHUHVXOWVRIWKH D GDPS FRQGLWLRQ IRU  KRXUV WKHQ
LQSODFHVKHDUWHVWV VXIILFLHQWZDWHUVKDOOEHDGGHGWREULQJLWWRD

6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

FRQVLVWHQF\ WKDW LV VRPHZKDW GULHU WKDQ ™ 5HIHUWRWKHFRPPHQWDU\WR6HFWLRQ$IRU

FRQYHQWLRQDOPDVRQU\PRUWDU D GHVFULSWLRQ RI WKH WHVWLQJ SURFHGXUH DQG
 3DFNLQJ7KHMRLQWLQWRZKLFKWKHPRUWDULVWR LQWHUSUHWDWLRQRIWHVWUHVXOWV
EH SDFNHG VKDOO EH GDPS EXW ZLWKRXW $1HZEROWV$OOQHZHPEHGGHGEROWVVKDOO
IUHHVWDQGLQJZDWHU7KHPRUWDUVKDOOEHWLJKWO\ EH VXEMHFW WR SHULRGLF VSHFLDO LQVSHFWLRQ LQ
SDFNHGLQWRWKHMRLQWLQOD\HUVQRWH[FHHGLQJ DFFRUGDQFHZLWKWKH6%&SULRUWRSODFHPHQWRI
PPLQGHSWKXQWLOLWLVILOOHGWKHQLWVKDOOEH WKHEROWDQG JURXWRUDGKHVLYHLQ WKHGULOOHGKROH
WRROHG WR D VPRRWK VXUIDFH WR PDWFK WKH )LYHSHUFHQWRIDOOEROWVWKDWGRQRWH[WHQGWKURXJK
RULJLQDOSURILOH WKHZDOOVKDOOEHVXEMHFWWRDGLUHFWWHQVLRQWHVWDQG
DQ DGGLWLRQDO  SHUFHQW VKDOO EH WHVWHG XVLQJ D
1RWKLQJ VKDOO SUHYHQW SRLQWLQJ RI DQ\ GHWHULRUDWHG FDOLEUDWHG WRUTXH ZUHQFK 7HVWLQJ VKDOO EH
PDVRQU\ ZDOOMRLQWV EHIRUH WHVWLQJLVSHUIRUPHGLQ SHUIRUPHGLQDFFRUGDQFHZLWK6HFWLRQ$1HZ
DFFRUGDQFH ZLWK 6HFWLRQ $ H[FHSW DV EROWVWKDWH[WHQGWKURXJKWKHZDOOZLWKVWHHOSODWHV
UHTXLUHGLQ6HFWLRQ$ RQWKHIDUVLGHRIWKHZDOOQHHGQRWEHWHVWHG
™ 3RLQWLQJLVPDLQWHQDQFHZRUN2OGPRUWDUVDUH ([FHSWLRQ6SHFLDOLQVSHFWLRQLQDFFRUGDQFHZLWK
VXEMHFWWRGHWHULRUDWLRQDQGLIVRWKH\QHHGWR WKH6%&PD\EHSURYLGHGGXULQJLQVWDOODWLRQRI
EHSRLQWHG0RUWDUMRLQWVPD\EHSRLQWHGEHIRUH
QHZDQFKRUVLQOLHXRIWHVWLQJ
WHVWLQJ WR LQFUHDVH WKH VKHDU WHVW YDOXHV EXW

WKLV SRLQWLQJ PXVW EH SHUIRUPHG ZLWK VSHFLDO
LQVSHFWLRQDVUHTXLUHGE\6HFWLRQ$ $OOQHZHPEHGGHGEROWVUHVLVWLQJWHQVLRQIRUFHVRU
™ 1RWH LW LV YHU\ LPSRUWDQW WKDW WKH GHWHULRUDWHG DFRPELQDWLRQRIWHQVLRQDQGVKHDUIRUFHVVKDOOEH
PRUWDUEHUHPRYHGFDUHIXOO\VRDVWRPLQLPL]H VXEMHFWWRSHULRGLFVSHFLDOLQVSHFWLRQLQDFFRUGDQFH
GDPDJHWRWKHH[LVWLQJPDWHULDOVWKDWUHPDLQ ZLWK WKH EXLOGLQJ FRGH SULRU WR SODFHPHQW RI WKH
EROWDQGJURXWRUDGKHVLYHLQWKHGULOOHGKROH)LYH
48$/,7<&21752/ SHUFHQWRIDOOEROWVUHVLVWLQJWHQVLRQIRUFHVVKDOOEH
$3RLQWLQJ3UHSDUDWLRQDQGPRUWDUSRLQWLQJ VXEMHFWWRDGLUHFWWHQVLRQWHVWDQGDQDGGLWLRQDO
VKDOOEHSHUIRUPHGZLWKVSHFLDOLQVSHFWLRQ SHUFHQW VKDOO EH WHVWHG XVLQJ D FDOLEUDWHG WRUTXH
ZUHQFK7HVWLQJVKDOOEHSHUIRUPHGLQDFFRUGDQFH
([FHSWLRQ  $W WKH GLVFUHWLRQ RI WKH EXLOGLQJ ZLWK6HFWLRQ$1HZWKURXJKEROWVQHHGQRW
RIILFLDO LQFLGHQWDO SRLQWLQJ PD\ EH SHUIRUPHG EHWHVWHG
ZLWKRXWVSHFLDOLQVSHFWLRQ
$7HVWV RI DQFKRUV LQ XQUHLQIRUFHG
™ 3UHSDUDWLRQ DQG SRLQWLQJ RI PRUWDU MRLQWV VKDOO
KDYH VSHFLDO LQVSHFWLRQ 6HFWLRQ $ 
PDVRQU\ZDOOV7HVWVRIDQFKRUVLQXQUHLQIRUFHG
SURYLGHV JXLGDQFH IRU WKH SRLQWLQJ ZRUN 7KH PDVRQU\ZDOOVVKDOOEHLQDFFRUGDQFHZLWK6HFWLRQV
H[FHSWLRQ DOORZV WKH EXLOGLQJ RIILFLDO WR DOORZ $WKURXJK$
SRLQWLQJ RI VPDOO GHWHULRUDWHG DUHDV DW KLV RU $ 'LUHFWWHQVLRQWHVWLQJRIH[LVWLQJ
KHUGLVFUHWLRQZLWKRXWVSHFLDOLQVSHFWLRQ
DQFKRUVDQGQHZEROWV7KHWHVWDSSDUDWXVVKDOOEH
$0DVRQU\ VKHDU WHVWV  ,QSODFH PDVRQU\ VXSSRUWHG E\ WKH PDVRQU\ ZDOO 7KH GLVWDQFH
VKHDU WHVWVVKDOOFRPSO\ZLWK 6HFWLRQ $ EHWZHHQWKHDQFKRUDQGWKHWHVWDSSDUDWXVVXSSRUW
7HVWLQJ RI PDVRQU\ IRU GHWHUPLQDWLRQ RI WHQVLOH VKDOOEHQRWOHVVWKDQRQHKDOIWKHZDOOWKLFNQHVVIRU
VSOLWWLQJ VWUHQJWK VKDOO FRPSO\ ZLWK 6HFWLRQ $ H[LVWLQJDQFKRUVDQGSHUFHQWRIWKHHPEHGPHQW
 IRUQHZHPEHGGHGEROWV([LVWLQJZDOODQFKRUVVKDOO
EHJLYHQDSUHORDGRIN1SULRUWRHVWDEOLVKLQJD
™ 6HHWKHFRPPHQWDU\WR6HFWLRQ$
GDWXP IRU UHFRUGLQJ HORQJDWLRQ 7KH WHQVLRQ WHVW
$([LVWLQJ ZDOO DQFKRUV  ([LVWLQJ ZDOO ORDG UHSRUWHG VKDOO EH UHFRUGHG DW  PP UHODWLYH
DQFKRUVXVHGDVDOORUSDUWRIWKHUHTXLUHGWHQVLRQ PRYHPHQW EHWZHHQ WKH H[LVWLQJ DQFKRU DQG WKH
DQFKRUV VKDOO EH WHVWHG LQ SXOORXW DFFRUGLQJ WR DGMDFHQWPDVRQU\VXUIDFH1HZHPEHGGHGWHQVLRQ
6HFWLRQ $ 7KH PLQLPXP QXPEHU RI EROWVVKDOOEHVXEMHFWWRDGLUHFWWHQVLRQORDGRIQRW
DQFKRUVWHVWHGVKDOOEHIRXUSHUIORRUZLWKWZRWHVWV OHVVWKDQWLPHVWKHGHVLJQORDGEXWQRWOHVVWKDQ
DWZDOOVZLWKMRLVWVIUDPLQJLQWRWKHZDOODQGWZR N1IRUILYHPLQXWHVSHUFHQWGHYLDWLRQ
WHVWVDWZDOOVZLWKMRLVWVSDUDOOHOWRWKHZDOOEXWQRW
OHVVWKDQSHUFHQWRIWKHWRWDOQXPEHURIH[LVWLQJ $ 7RUTXH WHVWLQJ RI QHZ EROWV
WHQVLRQDQFKRUVDWHDFKIORRUOHYHO %ROWV HPEHGGHG LQ XQUHLQIRUFHG PDVRQU\ ZDOOV
VKDOOEHWHVWHGXVLQJDWRUTXHFDOLEUDWHGZUHQFKWR
WKHIROORZLQJPLQLPXPWRUTXHV

6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

.DULRWLV G\QDPLF WHVWLQJ RI GXFWLOH PDWHULDOV

x 12 mm bolts: 52 Nm. VXFK DV VKHDWKHG GLDSKUDJPV DUH VWUHQJWK
x 16 mm bolts: 70 Nm. OLPLWYDOXHV
™ 'HVLJQ RI QHZ HOHPHQWV LQWHQGHG WR
x 20 mm bolts: 87 Nm. VXSSOHPHQW WKH H[LVWLQJ PDWHULDO VKRXOG EH
$ 3UHTXDOLILFDWLRQ WHVW IRU EROWV GHVLJQHG XVLQJ VWUHQJWK SURFHGXUHV EXW QRW
DQG RWKHU W\SHV RI DQFKRUV  7KLV VHFWLRQ LV ZLWKFDSDFLW\UHGXFWLRQIDFWRUV
DSSOLFDEOHZKHQLWLVGHVLUHGWRXVHWHQVLRQRUVKHDU ™ :KHQ GHVLJQLQJ QHZ HOHPHQWV VSHFLDO
DWWHQWLRQVKRXOGEHSDLGWRWKHUHODWLYHVWLIIQHVV
YDOXHVIRUDQFKRUVJUHDWHUWKDQWKRVHSHUPLWWHGE\
RIWKHH[LVWLQJVWUXFWXUDOHOHPHQWVDQGWKHQHZ
7DEOH $( 7KH GLUHFWWHQVLRQWHVW SURFHGXUH VHW HOHPHQWV )RU H[DPSOH LI QHZ VKHDU ZDOOV RU
IRUWKLQ6HFWLRQ$IRUH[LVWLQJDQFKRUVVKDOO EUDFHG IUDPHV VXSSOHPHQW WKH VWUHQJWK RI D
EHXVHGWRGHWHUPLQHWKHDOORZDEOHWHQVLRQYDOXHV 850ZDOOWKHORDGLQJVKRXOGQRWEHUHGXFHGE\
IRU QHZ HPEHGGHG WKURXJK EROWV H[FHSW WKDW QR DQLQFUHDVHG5IDFWRU+RZHYHULIWKHH[LVWLQJ
SUHORDGLVUHTXLUHG%ROWVVKDOOEH LQVWDOOHGLQWKH VWUXFWXUDO V\VWHP LV VWUHQJWKHQHG VR WKDW WKH
VDPHPDQQHUDQGXVLQJWKHVDPHPDWHULDOVDVZLOO V\VWHP¶VGXFWLOLW\LVLQFUHDVHGDKLJKHU5IDFWRU
EHXVHGLQWKHDFWXDOFRQVWUXFWLRQ$PLQLPXPRI FRXOG EH MXVWLILHG 6XFK DQ H[DPSOH ZRXOG EH
ILYH WHVWV IRU HDFK EROW VL]H DQG W\SH VKDOO EH ZKHUHQHZFRQFUHWHVKHDUZDOOVDUHDGGHGDQG
SHUIRUPHGIRUHDFKFODVVRIPDVRQU\LQZKLFKWKH\ DUHGHVLJQHGWRFDUU\WKHIXOO ODWHUDO ORDGDQG
850SLHUVDUHDGHTXDWHWRDFFRPPRGDWHWKH
DUH SURSRVHG WR EH XVHG 7KH DOORZDEOH WHQVLRQ
H[SHFWHG VXP RI OLQHDU DQG QRQOLQHDU
YDOXHV IRU VXFK DQFKRUV VKDOO EH WKH OHVVHU RI WKH GLVSODFHPHQWVZLWKRXWVKHDUIDLOXUH
DYHUDJHXOWLPDWHORDGGLYLGHGE\DVDIHW\IDFWRURI
RUWKHDYHUDJHORDGDWZKLFKPPHORQJDWLRQ $0DVRQU\ VKHDU VWUHQJWK  7KH
RFFXUVIRUHDFKVL]HDQGW\SHRI EROWDQGFODVVRI XQUHLQIRUFHGPDVRQU\VKHDUVWUHQJWKYPVKDOOEH
PDVRQU\ GHWHUPLQHGIRUHDFKPDVRQU\FODVVIURPRQHRIWKH
7KH WHVW SURFHGXUH IRU SUHTXDOLILFDWLRQ RI VKHDU IROORZLQJHTXDWLRQV
EROWV VKDOO FRPSO\ ZLWK $670 ( RU DQRWKHU 
DSSURYHGSURFHGXUH  7KHXQUHLQIRUFHGPDVRQU\VKHDUVWUHQJWKvm
7KH DOORZDEOH YDOXHV GHWHUPLQHG LQ WKLV PDQQHU VKDOOEHGHWHUPLQHGE\(TXDWLRQ$ZKHQ
VKDOOEHSHUPLWWHGWRH[FHHGWKRVHVHWIRUWKLQ7DEOH WKHPRUWDUVKHDUVWUHQJWKKDVEHHQGHWHUPLQHG
$( E\6HFWLRQ$

$ 5HSRUWV5HVXOWVRIDOOWHVWVVKDOO ଴Ǥ଻ହ௉ವ
EHUHSRUWHG7KHUHSRUWVKDOOLQFOXGHWKHWHVWUHVXOWV ‫ݒ‬௠ ൌ ͲǤͷ͸‫ݒ‬௧ ൅   $
஺
DV UHODWHG WR DQFKRU VL]H DQG W\SH RULHQWDWLRQ RI 
ORDGLQJ GHWDLOV RI WKH DQFKRU LQVWDOODWLRQ DQG 7KH PRUWDU VKHDU VWUHQJWK YDOXHV YW VKDOO EH
HPEHGPHQWZDOOWKLFNQHVVDQGMRLVWRULHQWDWLRQ GHWHUPLQHGLQDFFRUGDQFHZLWK6HFWLRQ$

'(6,*1675(1*7+6  7KHXQUHLQIRUFHGPDVRQU\VKHDUvmVKDOOEH
$9DOXHV GHWHUPLQHG E\ (TXDWLRQ $ ZKHQ WHQVLOH
VSOLWWLQJ VWUHQJWK KDV EHHQ GHWHUPLQHG LQ
 6WUHQJWK YDOXHV IRU H[LVWLQJ PDWHULDOV DUH DFFRUGDQFHZLWK6HFWLRQ$,WHP
JLYHQLQ7DEOH$'DQGIRUQHZPDWHULDOVLQ RU
7DEOH$( ௉
‫ݒ‬௠ ൌ ͲǤͺ݂௦௣ ൅ ͲǤͷ ವ   $
 &DSDFLW\UHGXFWLRQIDFWRUVQHHGQRWEHXVHG ஺
 7KHXVHRIQHZPDWHULDOVQRWVSHFLILHGKHUHLQ 
VKDOOEHEDVHGRQVXEVWDQWLDWLQJUHVHDUFKGDWD  :KHQ ݂௠ᇱ KDV EHHQ HVWLPDWHG E\
RUHQJLQHHULQJMXGJPHQWZLWKWKHDSSURYDORI FDWHJRUL]DWLRQ RI WKH XQLWV DQG PRUWDU LQ
WKHEXLOGLQJRIILFLDO DFFRUGDQFHZLWK&KDSWHURIWKHSBC 305WKH
XQUHLQIRUFHG PDVRQU\ VKHDU VWUHQJWK ‫ݒ‬௠ 
™ 7KH PDWHULDOV UHVLVWDQFH YDOXHV XVHG LQ
VKDOOQRWH[FHHG03DRUWKHOHVVHURIWKH
$SSHQGL[&KDSWHU$DUHVWUHQJWKYDOXHVEXW
DUH QRW XVHG ZLWK FDSDFLW\ UHGXFWLRQ IDFWRUV
IROORZLQJ
6WUHQJWK YDOXHV REWDLQHG E\ H[SHULPHQWDO 
WHVWLQJ DQG LQSODFH WHVWLQJ RI 850 DUH DͲǤͻͷඥ݂Ԣ௠ RU
H[SHFWHGVWUHQJWKYDOXHV7KHVWUHQJWKYDOXHV EN3DRU
REWDLQHG E\ WKH $%. $JEDELDQ %DUQHV DQG ௉
F‫ ݒ‬൅ ͲǤ͹ͷ ஺ವ    $

6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

 ™ )RXQGDWLRQ ORDGV PD\ EH LQFUHDVHG RYHU

ZKHUH H[LVWLQJ ORDGV IRU VHYHUDO UHDVRQV )LUVW
Y N3DIRUUXQQLQJERQGPDVRQU\QRWJURXWHG FRQVROLGDWLRQ RI IRXQGDWLRQ PDWHULDOV KDV
VROLG GHFUHDVHGWKHSUREDELOLW\RIVHWWOHPHQWGXHWR
DGGHG ORDGV 6HFRQG WKH G\QDPLF ORDGLQJ RI
Y   N3D IRU UXQQLQJ ERQG PDVRQU\ JURXWHG
VRLOV E\ HDUWKTXDNHV FDQ EH WROHUDWHG E\
VROLG IRXQGDWLRQ PDWHULDOV ZLWKRXW DGGLWLRQDO
Y N3DIRUVWDFNERQGJURXWHGVROLG VHWWOHPHQW
™ ,WHP  7KH FRUUHODWLRQ RI YW DQG YP ZDV ™ 7KLUGLQPDQ\FDVHVWKHGHDGORDGDGGHGE\
REWDLQHG E\ SK\VLFDO WHVWLQJ SHUIRUPHG E\ WKH VHLVPLF VWUHQJWKHQLQJ LV XVXDOO\ UHODWLYHO\
$%. MRLQW YHQWXUH (TXDWLRQ $ LV DQ LQVLJQLILFDQW FRPSDUHG WR WKH GHDG ORDG IURP
HPSLULFDOIRUPXOD WKHH[LVWLQJ850EHDULQJZDOO
™ ,WHP  (TXDWLRQ $ LV D WKHRUHWLFDO IRUPXOD ™ 7KH UHVWULFWLRQV PD\ EH LOOXVWUDWHG E\ WKH
DGMXVWHG IRUDSUREDEOHFRHIILFLHQWRIYDULDWLRQ IROORZLQJ([DPSOH
RIWKHWHVWGDWD ™ *LYHQRULJLQDOGHDGORDG 
™ ,WHP  (TXDWLRQ $ LV VLPLODU WR WKH VKHDU ™ $GGHGGHDGORDG 
YDOXHV JLYHQ LQ WKH 6%&  7KH\ DUH ™ /LYHORDG 
DOORZDEOH VWUHQJWK YDOXHV DGMXVWHG XSZDUG E\ ™ 6HLVPLF 
DERXW ™ 7KHQHZGHDGORDGLV 
™ $FFRUGLQJ WR WKH ILUVW VHQWHQFH LQ 6HFWLRQ
$0DVRQU\ FRPSUHVVLRQ  :KHUH DQ\ $QHZGHDGORDGPD\EHLQFUHDVHGRYHU
LQFUHDVH LQ GHDG SOXV OLYH FRPSUHVVLRQ VWUHVV WKH H[LVWLQJ GHDG ORDG E\  SHUFHQW LQ WKH
RFFXUV WKH FRPSUHVVLRQ VWUHVV LQ XQUHLQIRUFHG H[DPSOH  LV OHVV WKDQ  î   
PDVRQU\VKDOOQRWH[FHHG03D WKHUHIRUH WKH DGGHG GHDG ORDG LV DFFHSWDEOH
$FFRUGLQJ WR WKH VHFRQG VHQWHQFH QHZ GHDG
™ 7KLV PD[LPXP DOORZDEOH VWUHVV LV D ORDG SOXV OLYH ORDG SOXV VHLVPLF ORDG PD\ EH
FRQVHUYDWLYH HVWLPDWH RI WKH FRPSUHVVLYH LQFUHDVHGRYHUWKHH[LVWLQJGHDGORDGSOXVOLYH
VWUHQJWK RI PLQLPXP DFFHSWDEOH PDVRQU\ 1R ORDGE\SHUFHQW,QWKHH[DPSOHQHZGHDG
VWUHQJWK LQFUHDVH IRU VHLVPLF ORDGLQJ LV SOXVOLYHSOXVVHLVPLFLV 
SHUPLWWHG ZKLFK LV OHVV WKDQ  î     
$0DVRQU\WHQVLRQ7KHWHQVLOHVWUHQJWKRI WKHUHIRUHWKHDGGHGGHDGORDGLVDFFHSWDEOH,I
XQUHLQIRUFHGPDVRQU\LVLJQRUHG WKH GHDG ORDG H[FHHGV WKH VSHFLILHG OLPLWV
KLJKHU YDOXHV PD\ EH XVHG LI MXVWLILHG E\ D
™ 7KHWHQVLOHVWUHQJWKRIXQUHLQIRUFHGPDVRQU\LV JHRWHFKQLFDOHQJLQHHU
LJQRUHG 7KH RYHUWXUQLQJ IRUFHV VKRXOG ™ (YHU\ VWUXFWXUH VKRXOG DGHTXDWHO\ UHVLVW
WKHUHIRUH EH IXOO\ UHVLVWHG E\ WKH JUDYLW\ RYHUWXUQLQJ HIIHFWV 7KLV LV OHVV LPSRUWDQW IRU
UHVLVWLQJPRPHQW H[LVWLQJ XQUHLQIRUFHG PDVRQU\ HOHPHQWV VLQFH
WKHLUODWHUDOORDGFDUU\LQJFDSDFLW\LVOLPLWHGE\
$([LVWLQJWHQVLRQDQFKRUV7KHUHVLVWDQFH
WKHLU URFNLQJ FDSDFLW\ +RZHYHU ZKHUH QHZ
YDOXHVRIWKHH[LVWLQJDQFKRUVVKDOOEHWKHDYHUDJH HOHPHQWV DUH DGGHG RYHUWXUQLQJ FDQ EH D
RIWKHWHQVLRQWHVWVRIH[LVWLQJDQFKRUVKDYLQJWKH FRQWUROOLQJ LVVXH ,Q WKHVH FDVHV WKH QHZ
VDPHZDOOWKLFNQHVVDQGMRLVWRULHQWDWLRQ HOHPHQWV VKRXOG EH GHVLJQHG WR UHVLVW
™ (DFKYDULDWLRQRIZDOODQFKRUW\SHVXVHGVKRXOG RYHUWXUQLQJLQJHQHUDODFFRUGDQFHZLWKWKH6%&
EHWHVWHGLQDFFRUGDQFHZLWK6HFWLRQ$ 
FRQVLGHULQJ ZDOO WKLFNQHVV ZDOO IUDPLQJ $1$/<6,6$1'
FRQGLWLRQV PDVRQU\ TXDOLW\ DQG RWKHU IDFWRUV
DIIHFWLQJWKHDQFKRU,WVKRXOGEHQRWHGWKDWZDOO
'(6,*1352&('85(
DQFKRU FDSDFLW\ LV GHSHQGHQW RQ LWV $*HQHUDO7KHHOHPHQWVRIEXLOGLQJVKHUHE\
HPEHGPHQWLQWKHPDVRQU\DQGDWWDFKPHQWWR UHTXLUHGWREHDQDO\]HGDUHVSHFLILHGLQ7DEOH$
WKHURRIRUIORRUIUDPLQJ $
$)RXQGDWLRQV  )RU H[LVWLQJ IRXQGDWLRQV ™ $SSHQGL[&KDSWHU$XVHVDQDO\VLVDQGGHVLJQ
QHZ WRWDO GHDG ORDGV PD\ EH LQFUHDVHG RYHU WKH SURFHGXUHVWKDWDUHVSHFLILFIRU850EXLOGLQJV
H[LVWLQJGHDG ORDG E\  SHUFHQW1HZ WRWDOGHDG 7KH FKDSWHU LV IRU DQDO\VLV DQG UHWURILW IRU
ORDG SOXV OLYH ORDG SOXV VHLVPLF IRUFHV PD\ EH H[LVWLQJEXLOGLQJV7KHHOHPHQWVRIWKHPDVRQU\
LQFUHDVHGRYHUWKHH[LVWLQJGHDGORDGSOXVOLYHORDG EXLOGLQJV WKDW DUH UHJXODWHG E\ $SSHQGL[
E\SHUFHQW+LJKHUYDOXHVPD\EHMXVWLILHGRQO\ &KDSWHU$DUHJLYHQLQ7DEOH$$7KLVWDEOH
LQFRQMXQFWLRQZLWKDJHRWHFKQLFDOLQYHVWLJDWLRQ H[HPSWVFHUWDLQLWHPVIURPUHJXODWLRQLQORZWR
PRGHUDWHVHLVPLFKD]DUGUHJLRQV

6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

$6HOHFWLRQ RI SURFHGXUH  %XLOGLQJV ZLWK LQDXQLIRUPORDGLQJSDWWHUQRQDPXOWLGHJUHHRI

ULJLGGLDSKUDJPVVKDOOEHDQDO\]HGE\WKHJHQHUDO IUHHGRPPRGHOLIWKHVKHDUZDOOKDVVXEVWDQWLDO
SURFHGXUHRI6HFWLRQ$%XLOGLQJVZLWKIOH[LEOH SHUIRUDWLRQV DW HDFK VWRU\ OHYHO 7KH
GLDSKUDJPV VKDOO EH DQDO\]HG E\ WKH JHQHUDO PXOWLGHJUHH RI IUHHGRP PRGHO LV D VKHDU
\LHOGLQJ PRGHO QRW D IOH[XUDO EHDP PRGHO
SURFHGXUHRUZKHQDSSOLFDEOHPD\EHDQDO\]HGE\
6WRU\ \LHOG PHFKDQLVPV PD\ EH RQO\ D VLQJOH
WKH VSHFLDO SURFHGXUH RI 6(&7,21 $6HFWLRQ IORRU OHYHO LI WKH \LHOG PHFKDQLVP LV LQSODQH
$ VKHDULQWKHSLHUV,IURFNLQJRIWKHSLHUVLVWKH
™ 850 EXLOGLQJV ZLWK FRQFUHWH IORRUV DQG URRIV \LHOG PHFKDQLVP LW LV D SRVVLELOLW\ WKDW \LHOG
ULJLGGLDSKUDJPVPXVWEHDQDO\]HGXVLQJWKH PHFKDQLVPVPD\IRUPDWVHYHUDOVWRU\OHYHOV,I
JHQHUDO SURFHGXUH 7KH JHQHUDO SURFHGXUH WKH ZDOO LV EDVLFDOO\ VROLG D WULDQJXODU ORDGLQJ
IROORZVWKH6%& LQWKDWWKHDQDO\VLVEDVH VKRXOG EH DSSOLHG DV SHU WKH 6%&  7KH
VKHDULVFDOFXODWHGXVLQJWKHWRWDOPDVVRIWKH HQJLQHHUVKRXOGPDNHSUHOLPLQDU\FDOFXODWLRQV
EXLOGLQJ7KHULJLGGLDSKUDJPVFRXSOHWKHVKHDU DV WR SUREDEOH VWRU\ VWUHQJWKV DQG \LHOG
ZDOOVRIHDFKOHYHOZLWKWKHZHLJKWRIWKHVWRU\ PHFKDQLVPVWRGHWHUPLQHDUDWLRQDOGLVWULEXWLRQ
OHYHO DQG QRUPDO ZDOOV 850 EXLOGLQJV ZLWK RIWKHEDVHVKHDURYHUWKHKHLJKWRIDPXOWLVWRU\
IOH[LEOH GLDSKUDJPV KDYH DQ HQWLUHO\ GLIIHUHQW 850VKHDUZDOO
G\QDPLFUHVSRQVHFKDUDFWHULVWLF7KHPDVVRI ™ *OREDO RYHUWXUQLQJ LV QRW D FULWLFDO LVVXH IRU
WKHIORRUURRIVDQGQRUPDOZDOOVLVFRXSOHGZLWK 850VKHDUZDOOV)OH[XUDOWHQVLOHIRUFHVGXHWR
WKH VKHDU ZDOO SDUDOOHO WR WKH GLUHFWLRQ RI WKH JOREDORYHUWXUQLQJFDQQRWEHFDUULHGGRZQZDUG
VHLVPLFORDGLQJE\DVKHDUEHDPHOHPHQWWKDW ZLWKRXW D WHQVLRQ ORDG SDWK 6WRU\ KHLJKW
KDV D IXQGDPHQWDO HODVWLF SHULRG LQ WKH UDQJH RYHUWXUQLQJ PRPHQWV FDXVH D PRGLILFDWLRQ RI
ZKHUH G\QDPLF UHVSRQVH LV UHODWHG WR 7 WKH WKH D[LDO ORDG RQ WKH SLHU EXW HTXLOLEULXP
HODVWLF SHULRG RI WKH GLDSKUDJP 7KLV VKHDU UHTXLUHV WKDW WKH UHGXFWLRQ LQ YHUWLFDO SLHU
EHDPKDVVLJQLILFDQWGXFWLOLW\SRWHQWLDODQGWKH ORDGLQJEHHTXDOWRWKHLQFUHDVHLQYHUWLFDOSLHU
FRXSOLQJRIWKHVWRU\DQGQRUPDOZDOOPDVVZLWK ORDGLQJ RQ RWKHU DGMDFHQW SLHUV 7KH LQSODQH
WKH VKHDU ZDOO ZLOO EH OLPLWHG WR WKH VKHDU VKHDU FDSDFLW\ DQG URFNLQJ VKHDU FDSDFLW\ RI
FDSDFLW\ RIWKHGLDSKUDJP DWHDFKVWRU\ OHYHO LQGLYLGXDO SLHUV LV DIIHFWHG E\ SLHU YHUWLFDO
6HFWLRQ $  SURYLGHV WKH OLPLWV D EXLOGLQJ ORDGLQJEXWWKHWRWDOLQWHUVWRU\VKHDUFDSDFLW\LV
PXVWVDWLVI\LQRUGHUIRUWKHVSHFLDOSURFHGXUH QRWVLJQLILFDQWO\FKDQJHG
WREHXVHG $/DWHUDOIRUFHVRQHOHPHQWVRIVWUXFWXUHV
*(1(5$/ 3DUWV DQG SRUWLRQV RI D VWUXFWXUH QRW FRYHUHG LQ
352&('85( 6HFWLRQ$VKDOOEHDQDO\]HGDQGGHVLJQHGSHU
WKH6%&XVLQJIRUFHOHYHOVGHILQHGLQ6HFWLRQ
$0LQLPXPGHVLJQODWHUDOIRUFHV%XLOGLQJV $
VKDOOEHDQDO\]HGWRUHVLVWPLQLPXPODWHUDOIRUFHV
DVVXPHGWRDFWQRQFRQFXUUHQWO\LQWKHGLUHFWLRQRI ([FHSWLRQV
HDFKRIWKHPDLQD[HVRIWKHVWUXFWXUHLQDFFRUGDQFH  8QUHLQIRUFHGPDVRQU\ZDOOVIRUZKLFKKHLJKW
ZLWKWKHIROORZLQJ WRWKLFNQHVV UDWLRV GR QRW H[FHHG UDWLRV VHW
IRUWKLQ7DEOH$%QHHGQRWEHDQDO\]HGIRU
ௌವೄ ௐ
ܸ ൌ ͲǤ͹ͷ    $ RXWRISODQH ORDGLQJ 8QUHLQIRUFHG PDVRQU\
ோ
ZDOOV WKDW H[FHHG WKH DOORZDEOH KW UDWLRV RI
™ 7KHEDVHVKHDURIWKH850EXLOGLQJZLWKULJLG 7DEOH $% VKDOO EH EUDFHG DFFRUGLQJ WR
GLDSKUDJPV LV JLYHQ E\ (TXDWLRQ $ ,W LV D 6HFWLRQ$
VLPSOLILHGIRUPRIWKHXVXDOEDVHVKHDUIRUPXOD
 3DUDSHWV FRPSO\LQJ ZLWK 6HFWLRQ $ 
™ 7KHIXQGDPHQWDOHODVWLF SHULRGRI WKHEXLOGLQJ
LV WDNHQ DV EHLQJ LQ WKH FRQVWDQW DFFHOHUDWLRQ QHHGQRWEHDQDO\]HGIRURXWRISODQHORDGLQJ
UDQJH LH 6'6 7KH EDVH VKHDU LV DW WKH  :KHUH ZDOOV DUH WR EH DQFKRUHG WR IOH[LEOH
PD[LPXPYDOXHIRUWKHVHLVPLFKD]DUG]RQH IORRU DQG URRI GLDSKUDJPV WKH DQFKRUDJH
™ 7KLVEDVHVKHDULVUHGXFHGE\SHUFHQWWREH VKDOOEHLQDFFRUGDQFHZLWK6HFWLRQ$
FRQVLVWHQW ZLWK WKH SROLF\ WKDW WKH DQDO\VLV
™ 7KH IDLOXUH RI EXLOGLQJ HOHPHQWV VXFK DV
IRUFHVIRUH[LVWLQJEXLOGLQJVDUHWKUHHIRXUWKVRI
SDUDSHWV DQG SRUWLRQV RI ZDOOV UHSUHVHQWV D
WKH GHVLJQ IRUFHV VSHFLILHG IRU QHZ EXLOGLQJV
PDMRUVRXUFHRIULVNSRVHGE\850EXLOGLQJV
7KHEDVHVKHDULVDOVRGLYLGHGE\DQ5YDOXHRI
$OOYXOQHUDEOHHOHPHQWVVKRXOGEHLGHQWLILHGDQG
 7KLV LV FRQVLVWHQW ZLWK WKH 6%&  IRU
DQDO\]HG
EHDULQJ ZDOO V\VWHPV KDYLQJ RUGLQDU\ SODLQ
™ 'LDSKUDJPV DUH DQDO\]HG IRU WKH ORDGLQJV
XQUHLQIRUFHG PDVRQU\ VKHDU ZDOOV ,W LV
FDOFXODWHGE\WKHGLVWULEXWLRQ RIEDVHVKHDU DW
UHFRPPHQGHGWKDWWKLVEDVHVKHDUEHDSSOLHG

6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

WKHOHYHORIFRQVLGHUDWLRQ7KHDOORZDEOHVKHDU VKHDUVWUHVVLVGHWHUPLQHGLQDFFRUGDQFHZLWK
YDOXHVRIH[LVWLQJDQGQHZPDWHULDOVDSSOLHGWR 6HFWLRQ $ DQG WKH SLHUV LQ WKH VKHDU ZDOO
H[LVWLQJ PDWHULDOV JLYHQ LQ 7DEOH $' DQG DUH DQDO\]HG LQ DFFRUGDQFH ZLWK 6HFWLRQ
7DEOH $( DUH DSSOLFDEOH WR WKH JHQHUDO DQG $
VSHFLDO SURFHGXUHV 7KHVH SURYLVLRQV UHTXLUH
WKHVDPHIRUFHIDFWRUVRQSDUWVDQGSRUWLRQVDV $5HGXQGDQF\ DQG RYHUVWUHQJWK IDFWRUV
DUHUHTXLUHGIRUDQHZEXLOGLQJ $Q\UHGXQGDQF\RURYHUVWUHQJWKIDFWRUVFRQWDLQHG
™ $OWKRXJK QRW VSHFLILFDOO\ VWDWHG LQ EXLOGLQJV LQWKH6%&PD\EHWDNHQDVXQLW\7KHYHUWLFDO
EHLQJ DQDO\]HG E\ WKH JHQHUDO SURFHGXUH DQG FRPSRQHQWRIHDUWKTXDNHORDGEvPD\EHWDNHQDV
KDYLQJ IOH[LEOH GLDSKUDJPV DQG FURVVZDOOV ]HUR
FRQIRUPLQJ WR 6HFWLRQ $ XVH RI WKH
™ 1R UHGXQGDQF\ RU RYHUVWUHQJWK IDFWRUV DUH
FURVVZDOOVWRSURYLGHSDUWLDOODWHUDOVXSSRUWIRU
UHTXLUHG WR EH XVHG DV WKH IRUFHV DQG WKH
WKHGLDSKUDJPORDGLQJKDVEHHQXVHGE\VRPH
FDSDFLWLHVDUHDWVWUHQJWKOLPLWVWDWHV7KHODFN
HQJLQHHUV DQG SHUPLWWHG E\ VHYHUDO
RI UHGXQGDQF\ LV JHQHUDOO\ QRW DQ LVVXH IRU
MXULVGLFWLRQV
EXLOGLQJVRIXQUHLQIRUFHGPDVRQU\FRQVWUXFWLRQ
™ ([FHSWLRQ  VWDWHV WKDW QRUPDO ZDOOV RI
,Q DGGLWLRQ WKH RYHUVWUHQJWK IDFWRUV RI WKH
XQUHLQIRUFHGPDVRQU\QHHGQRWEHDQDO\]HGIRU
ZRRGIUDPHGHOHPHQWVWKDWFRXSOHWKHG\QDPLF
IOH[XUDOFDSDFLW\EXWPD\EHGHHPHGDGHTXDWH
UHVSRQVHRIWKHULJLGPDVRQU\ZDOOVDUHDOUHDG\
LI WKH KHLJKWWRWKLFNQHVV UDWLRV VSHFLILHG LQ
LQFOXGHGLQWKHSURYLVLRQV
7DEOH$%DUHQRWH[FHHGHG8VHRIWKLVWDEOH
LVYHU\FRQVHUYDWLYHIRUULJLGGLDSKUDJPV7KH 63(&,$/352&('85(
ULJLGGLDSKUDJPGRHVQRWDPSOLI\WKHVWRU\OHYHO
DFFHOHUDWLRQ OLNH D IOH[LEOH GLDSKUDJP ,Q $/LPLWV IRU WKH DSSOLFDWLRQ RI WKLV
DGGLWLRQ WR WKLV HIIHFW WKH RYHUEXUGHQ ZDOO SURFHGXUH7KHVSHFLDOSURFHGXUHVRIWKLVVHFWLRQ
ZHLJKWUDWLRXVHGLQWKHGHYHORSPHQWRI 7DEOH PD\ EH DSSOLHG RQO\ WR EXLOGLQJV KDYLQJ WKH
$% XVHVWKHZHLJKWRIZRRGIORRUVDQGRQO\ IROORZLQJFKDUDFWHULVWLFV
RQHDGGLWLRQDOVWRU\IRUPXOWLVWRU\EXLOGLQJV7KH 
SUREDEOH YHUWLFDO ORDG RI FRQFUHWH IORRUV DQG  )OH[LEOH GLDSKUDJPV DW DOO OHYHOV DERYH WKH
URRIV ZRXOG JUHDWO\ LQFUHDVH WKH DFFHSWDEOH
EDVHRIWKHVWUXFWXUH
KHLJKWWRWKLFNQHVVUDWLRIRUQRUPDOZDOOV
™ ([FHSWLRQ  VWDWHV WKDW SDUDSHWV WKDW KDYH
 9HUWLFDOHOHPHQWVRIWKHODWHUDOIRUFHUHVLVWLQJ
KHLJKWWRWKLFNQHVVUDWLRVOHVVWKDQVSHFLILHGLQ V\VWHPFRQVLVWLQJSUHGRPLQDQWO\RIPDVRQU\
6HFWLRQ $ QHHG QRW EH DQDO\]HG RUFRQFUHWHVKHDUZDOOV
3DUDSHWV ZLWK KHLJKWWRWKLFNQHVV UDWLRV LQ  ([FHSW IRU VLQJOHVWRU\ EXLOGLQJV ZLWK DQ
H[FHVVRIWKLVOLPLWVKDOOEHEUDFHG RSHQIURQWRQ RQHVLGHRQO\D PLQLPXPRI
™ 7KH VSHFLDO ZDOO DQFKRUDJH UHTXLUHPHQWV RI WZR OLQHV RI YHUWLFDO HOHPHQWV RI WKH ODWHUDO
([FHSWLRQIRUIOH[LEOHGLDSKUDJPVDUHEDVHG IRUFHUHVLVWLQJV\VWHPSDUDOOHOWRHDFKD[LVRI
RQWKH $%.UHVHDUFK SHUIRUPHG LQWKHV WKH EXLOGLQJ VHH 6HFWLRQ $ IRU RSHQ
7KHZDOODQFKRUDJHIRUFHVSHFLILHGLQ6HFWLRQ$ IURQWEXLOGLQJV
6'6LVKLJKHUWKDQWKHDQFKRUDJH
IRUFH UHTXLUHPHQWV IRU QHZ PDVRQU\ ™ ,WHP  7KH EXLOGLQJ PXVW KDYH IOH[LEOH
FRQVWUXFWLRQ ZLWK IOH[LEOH GLDSKUDJPV ZLWK D GLDSKUDJPVDWDOOVWRU\OHYHOVWRTXDOLI\IRUWKLV
VSDQOHVVWKDQP SURFHGXUHDQGWKHVHLVPLFORDGLQJXVHGLQWKLV
™ 7KHSURYLVLRQVRIWKH6%&GRDSSO\IRUZDOO VHFWLRQ LV H[FOXVLYHO\ IRU IOH[LEOH GLDSKUDJPV
DQFKRUDJHZLWKULJLGGLDSKUDJPVWKHH[FHSWLRQ 7KH GHILQLWLRQ RI ³5LJLG GLDSKUDJP´ JLYHQ LQ
RQO\ DSSOLHV WR IOH[LEOH GLDSKUDJPV ,W LV 6HFWLRQ $ LV SXUSRVHO\ YHU\ QDUURZ
DSSURSULDWH WR PDNH WKLV GLVWLQFWLRQ VLQFH WKH ,QYHVWLJDWLRQRIH[LVWLQJ850ZDOOEXLOGLQJVZLOO
$%. WHVWLQJ SURJUDP GLG QRW FRYHU EXLOGLQJV ILQG PDWHULDOV WKDW GR QRW ILW LQWR WKLV QDUURZ
ZLWKULJLGGLDSKUDJPV GHILQLWLRQ 6XFK D EXLOGLQJ ZRXOG KDYH WR EH
PRGHOHG ZLWK WKH XQLTXH VWLIIQHVV
$,QSODQHORDGLQJRI850VKHDUZDOOVDQG FKDUDFWHULVWLFV RI WKH PDWHULDOV 6WLIIQHVV
IUDPHV  /DWHUDO ORDGUHVLVWLQJ YHUWLFDO HOHPHQWV GHJUDGDWLRQ VKRXOG EH DVVHVVHG LI D OLQHDU
VKDOOEHDQDO\]HGLQDFFRUGDQFHZLWK6HFWLRQ$ HODVWLFDQDO\VLVLVPDGH,WLVRXWVLGHWKHVFRSH
RI$SSHQGL[&KDSWHU$WRSURYLGHJXLGDQFHIRU
™ 2QFHWKHVWRU\VKHDUIRUFHVDUHGHWHUPLQHGE\
DQDO\VLVRIXQLTXHEXLOGLQJV7KHHQJLQHHUDQG
WKH PHWKRGV RI WKH JHQHUDO SURFHGXUH WKH
DQDO\VLV RI XQUHLQIRUFHG PDVRQU\ VKHDU ZDOOV WKHEXLOGLQJRIILFLDOVKRXOGPDNHWKHGHFLVLRQV
IROORZV WKH VDPH SURFHGXUHV DV VSHFLILHG IRU IRUDQDQDO\VLV SURFHGXUH VSHFLILF WR DXQLTXH
VWUXFWXUDOV\VWHP
WKH VSHFLDO SURFHGXUH 7KH PDVRQU\ LV WHVWHG
DV SUHVFULEHG E\ 6HFWLRQ $ WKH DOORZDEOH

6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

™ ,WHP  7KH YHUWLFDO VHLVPLF IRUFHUHVLVWLQJ RIWKHPDWHULDOVGHVFULEHGLQ7DEOH$'RU7DEOH

V\VWHP VKRXOG KDYH VWLIIQHVV VXFK WKDW WKH $( RU RWKHU V\VWHP DV GHILQHG LQ 6HFWLRQ
UHODWLYH VWLIIQHVV UDWLR RI WKH GLDSKUDJPV DQG $&URVVZDOOVVKDOOEHVSDFHGQRPRUHWKDQ
VKHDU ZDOOV DVVXPHG IRU WKLV SURFHGXUH LV  P RQ FHQWHU PHDVXUHG SHUSHQGLFXODU WR WKH
PDLQWDLQHG $ VWHHO RU UHLQIRUFHG FRQFUHWH
GLUHFWLRQ RI FRQVLGHUDWLRQ DQG VKDOO EH SODFHG LQ
PRPHQWIUDPHGRHVQRWKDYHWKHVWRU\VWLIIQHVV
RIDUHLQIRUFHGFRQFUHWHRUPDVRQU\VKHDUZDOO HDFKVWRU\RIWKHEXLOGLQJ&URVVZDOOVVKDOOH[WHQG
GHVLJQHG IRU WKH VDPH ODWHUDO ORDGLQJ $ WKHIXOOVWRU\KHLJKWEHWZHHQGLDSKUDJPV
PRPHQW IUDPH PD\ EH DGHTXDWH WR DFW DV D ([FHSWLRQV
VKHDU ZDOO LQ WKH PLGGOH SRUWLRQ RI D IOH[LEOH
GLDSKUDJP RU DW DQ RSHQ IURQW RI DQ  &URVVZDOOVQHHGQRWEHSURYLGHGDWDOOOHYHOV
XQUHLQIRUFHG PDVRQU\ EXLOGLQJ 6HFWLRQ ZKHQ XVHG LQ DFFRUGDQFH ZLWK 6HFWLRQ
$ KDV VSHFLDO OLPLWV RQ \LHOG GULIW RI D $,WHP
PRPHQW IUDPH XVHG DV D FURVVZDOO 6HFWLRQ  ([LVWLQJ FURVVZDOOV QHHG QRW EH FRQWLQXRXV
$ UHTXLUHV XVH RI WKH VDPH GHVLJQ EHORZDZRRGGLDSKUDJPDWRUZLWKLQPRI
IRUFHVDVIRUDVKHDUZDOODQGIXUWKHUOLPLWVWKH JUDGHSURYLGHG
HODVWLFGULIWRIWKLVPRPHQWIUDPH8VHRIDQ5

IDFWRU LQ WKH GHVLJQ RI WKH PRPHQW IUDPH LV
SURKLELWHG  6KHDU FRQQHFWLRQV DQG DQFKRUDJH
™ ,WHP  $ PLQLPXP RI WZR OLQHV RI YHUWLFDO UHTXLUHPHQWV RI 6HFWLRQ $ DUH
VHLVPLF IRUFHUHVLVWLQJ HOHPHQWV RQ HDFK D[LV VDWLVILHGDWDOOHGJHVRIWKHGLDSKUDJP
RIWKHEXLOGLQJLVUHTXLUHG6HFWLRQ$,WHP  &URVVZDOOVZLWKWRWDOVKHDUFDSDFLW\RI
 UHTXLUHV WKDW HDFK RI WKHVH HOHPHQWV EH  6'6:G LQWHUFRQQHFW WKH
³SUHGRPLQDQWO\ RI PDVRQU\ RU FRQFUHWH VKHDU GLDSKUDJPWRWKHIRXQGDWLRQ
ZDOOV´,IVWUXFWXUDOVWHHORUUHLQIRUFHGFRQFUHWH  7KH GHPDQGFDSDFLW\ UDWLR RI WKH
EUDFLQJLVXVHGIRURQHRUERWKRIWKHVHYHUWLFDO GLDSKUDJPEHWZHHQWKHFURVVZDOOVWKDW
HOHPHQWVDUHODWLYHULJLGLW\FKHFNRIWKHEUDFLQJ
DUH FRQWLQXRXV WR WKHLU IRXQGDWLRQV
YHUVXVDVKHDUZDOOVKRXOGEHPDGHWRFRQILUP
WKDW WKH FRQFHSW RI D ³ULJLG ZDOOIOH[LEOH GRHV QRW H[FHHG  FDOFXODWHG DV
GLDSKUDJP´ UHVSRQVH WR HDUWKTXDNH LV IROORZV
SUREDEOH 
ሺଶǤଵௌವభ ௐ೏ ା௏೎ೌ ሻ
$/DWHUDOIRUFHVRQHOHPHQWVRIVWUXFWXUHV ‫ ܴܥܦ‬ൌ
ଶ௩ೠ ஽
   $
:LWK WKH H[FHSWLRQ RI WKH SURYLVLRQV LQ 6HFWLRQV
™ 7KHGHILQLWLRQRID³&URVVZDOO´LVJLYHQDQGIXOO\
$ WKURXJK $ HOHPHQWV RI VWUXFWXUHV GHILQHG LQ WKLV FRPPHQWDU\ LQ 6HFWLRQV $
VKDOOFRPSO\ZLWK6HFWLRQV$WKURXJK$ DQG $ $ FURVVZDOO LV D OLJKWIUDPH
™ 7KLV VHFWLRQ VSHFLILHV WKDW IORRU DQG URRI VKHDWKHG ZDOO SDUDOOHO WR WKH GLUHFWLRQ RI
GLDSKUDJPVDUHRQO\FKHFNHGIRUVWUHQJWKOLPLW HDUWKTXDNH ORDGLQJ $ FURVVZDOO LV QRW
VWDWH DQG VWLIIQHVV 7KH UHTXLUHPHQW IRU WKH FRQVLGHUHGDVDVKHDUZDOOLQWKDWLWQHHGQRWEH
FKHFN LV JLYHQ LQ 6HFWLRQ $ ,Q DGGLWLRQ GHVLJQHG IRU WKH WULEXWDU\ ORDGV RI WKH IOH[LEOH
UHTXLUHPHQWV IRU GLDSKUDJP VKHDU WUDQVIHU GLDSKUDJP RU GLDSKUDJPV 7KH FURVVZDOO
VKHDUZDOOVDQGRXWRISODQHIRUFHVDUHJLYHQLQ GHFUHDVHVWKHGLVSODFHPHQWRIWKHFHQWHURIWKH
6HFWLRQV $ $ DQG $ GLDSKUDJP UHODWLYH WR WKH VKHDU ZDOOV DQG
UHVSHFWLYHO\ 2WKHU HOHPHQWV RI VWUXFWXUHV DUH SURYLGHV GDPSLQJ RI WKH UHVSRQVH RI WKH
DQDO\]HGDVSUHVFULEHGE\WKH6%&EXWWKH GLDSKUDJPWRHDUWKTXDNHVKDNLQJ
IRUFHVDUHWKRVHJLYHQLQ6HFWLRQ$DQGWKH ™ 7KH VSDFLQJ RI WKH FURVVZDOOV DORQJ WKH
PDWHULDO¶VUHVLVWDQFHYDOXHVDUHWKRVHJLYHQLQ GLDSKUDJPVSDQOHQJWKLVOLPLWHGWRP7KLV
6HFWLRQ $ 7KHVH GHVLJQ VWUHQJWKV DUH UHVWULFWLRQ LV LQWHQGHG WR OLPLW WKH VLJQLILFDQW
FDOFXODWHG XVLQJ WKH SULQFLSOH RI ORDG DQG KLJKHU PRGH SDUWLFLSDWLRQ RI WKH GLDSKUDJP
UHVLVWDQFH IDFWRU GHVLJQ /5)' VWUHQJWK EHWZHHQ FURVVZDOOV ,Q JHQHUDO LI FURVVZDOOV
PHWKRGV +RZHYHU ORDG LV QRW IDFWRUHG DQG DUH XVHG WR LQFUHDVH WKH DOORZDEOH KHLJKWWR
FDSDFLW\ UHGXFWLRQ IDFWRUV DUH QRW XVHG IRU WKLFNQHVVUDWLR RIQRUPDOZDOOVWKHFURVVZDOOV
UHVLVWDQFHYDOXHV PXVWEHLQHDFKVWRU\RIWKHEXLOGLQJ ([LVWLQJ
DQGQHZFURVVZDOOVPXVW H[WHQGWKHIXOOVWRU\
$&URVVZDOOV  &URVVZDOOV VKDOO PHHW WKH KHLJKWEHWZHHQGLDSKUDJPOHYHOV
UHTXLUHPHQWVRIWKLVVHFWLRQ ™ ([FHSWLRQ  DOORZV WKH XVH RI FURVVZDOOV WKDW
H[WHQGRQO\EHWZHHQWKHURRIGLDSKUDJPDQGD
$ &URVVZDOO GHILQLWLRQ   $ IORRU GLDSKUDJP WR FRXSOH WKHVH LQWR D
FURVVZDOOLVDZRRGIUDPHGZDOOVKHDWKHGZLWKDQ\

6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

FRPELQHG GLDSKUDJP IRU LWV GHPDQG FDSDFLW\ PXVWEHSURYLGHG1RWHERI7DEOH$'OLPLWV

UDWLR'&5DQDO\VLV WKHWRWDOFDSDFLW\WRN1PUHJDUGOHVVRIWKH
™ ([FHSWLRQ  DOORZV D VSHFLDO FRQGLWLRQ WKDW FRPELQHGFDSDFLW\RIWKHH[LVWLQJPDWHULDOVRQ
FRPPRQO\ RFFXUV LQ UHVLGHQWLDO RFFXSDQFLHV WKH FURVVZDOO 7KLV OLPLWDWLRQ ZDV SURYLGHG LQ
2IWHQ LQ WKLV RFFXSDQF\ PDQ\ FURVVZDOOV OLHX RI DQ LQYHVWLJDWLRQ RI WKH FDSDFLW\ RI WKH
LQWHUFRQQHFWWKHURRIDQGIORRUV+RZHYHUWKH FRQQHFWLRQRIWKHFURVVZDOOWRWKHGLDSKUDJP
ILUVWIORRULVFRPPRQO\FRQVWUXFWHGRYHUDFUDZO
VSDFHZLWKRXWFURVVZDOOV7KLVH[FHSWLRQDOORZV $ 1HZ FURVVZDOOV  1HZ FURVVZDOO
WKH XVH RI VSHFLDO FURVVZDOOV VSDFHG DV IDU FRQQHFWLRQV WR WKH GLDSKUDJP VKDOO GHYHORS WKH
DSDUWDVPWRVWLIIHQWKHORZHVWGLDSKUDJP FURVVZDOOVKHDUFDSDFLW\1HZFURVVZDOOVVKDOOKDYH
7KHFURVVZDOOVPXVWKDYHDGHTXDWHVWUHQJWKWR WKHFDSDFLW\WRUHVLVWDQRYHUWXUQLQJPRPHQWHTXDO
OLPLW WKH GHIRUPDWLRQ RI WKH GLDSKUDJP DW WKH WR WKH FURVVZDOO VKHDU FDSDFLW\ WLPHV WKH VWRU\
VSHFLDOFURVVZDOOV7KHORDGLQJRIWKHILUVWIORRU KHLJKW&URVVZDOORYHUWXUQLQJPRPHQWVQHHGQRWEH
GLDSKUDJP LV LWV WULEXWDU\ ORDG DQG WKH HQWLUH FXPXODWLYHRYHUPRUHWKDQWZRVWRULHV
FDSDFLW\ RI WKH FURVVZDOOV WKDW DUH DERYH WKH
ILUVWIORRU ™ &RQQHFWLRQVRIQHZFURVVZDOOVWRGLDSKUDJPV
VKDOO EH GHVLJQHG E\ WKH DSSOLFDEOH VWUHQJWK
$ &URVVZDOOVKHDUFDSDFLW\ GHVLJQVHFWLRQVRIWKH6%&7KLVLQFOXGHV
WKHGHVLJQRIDYHUWLFDOFRQQHFWLRQRIWKHHQGRI
:LWKLQDQ\  P PHDVXUHGDORQJ WKH VSDQ RI WKH
WKHFURVVZDOOWRWKHIRXQGDWLRQRIWKHFURVVZDOO
GLDSKUDJP WKH VXP RI WKH FURVVZDOO VKHDU RUVXSSRUWEHORZWKHOHYHORIWKHFURVVZDOO7KLV
FDSDFLWLHV VKDOO EH DW OHDVW  SHUFHQW RI WKH FRQQHFWLRQ LV UHTXLUHG WR SURWHFW WKH IORRU
GLDSKUDJP VKHDU FDSDFLW\ RI WKH VWURQJHVW IUDPLQJIURPZDOORYHUWXUQLQJHIIHFWV7KHGHDG
GLDSKUDJP DW RU DERYH WKH OHYHO XQGHU ORDG RI WKH IORRU RU URRI IUDPLQJ VXSSRUWHG E\
FRQVLGHUDWLRQ WKH FURVVZDOO FDQQRW EH XVHG WR UHVLVW WKH
FDOFXODWHG RYHUWXUQLQJ GXH WR ODWHUDO IRUFHV
™ 7KH VWLIIQHVV RI VKHDWKHG V\VWHPV VXFK DV
+RZHYHUWKHFDOFXODWHGIRUFHDWWKHHQGRIWKH
IOH[LEOH GLDSKUDJPV DQG FURVVZDOOV LV GLUHFWO\
FURVVZDOOQHHGQRWXVHDQRYHUWXUQLQJPRPHQW
UHODWHG WR WKHLU SHDN VWUHQJWK WKHUHIRUH WKH
DFFXPXODWHG IURP PRUH WKDQ WZR VWRULHV
PLQLPXP VWUHQJWK RI D FURVVZDOO LV UHODWHG WR
LQFOXGLQJWKHOHYHORIFDOFXODWLRQ
WKH VWUHQJWK RI WKH GLDSKUDJP WKDW LW LV
UHVWUDLQLQJ 7KH PLQLPXP VWUHQJWK RI D $ 2WKHU FURVVZDOO V\VWHPV  2WKHU
FURVVZDOOPXVWEHSHUFHQWRIWKHVWUHQJWKRI V\VWHPVVXFKDVPRPHQWUHVLVWLQJIUDPHVPD\EH
WKH GLDSKUDJP VKHDU FDSDFLW\ RI WKH VWURQJHU XVHGDVFURVVZDOOVSURYLGHGWKDWWKH\LHOGVWRU\GULIW
GLDSKUDJP DW RU DERYH WKH OHYHO XQGHU GRHVQRWH[FHHGPPLQDQ\VWRU\
FRQVLGHUDWLRQ
™ 2WKHU V\VWHPV PD\ EH XVHG DV FURVVZDOOV $
$ ([LVWLQJ FURVVZDOOV  ([LVWLQJ VWHHO IUDPH PD\ EH PRUH GHVLUDEOH WKDQ D
FURVVZDOOVVKDOOKDYHDPD[LPXPKHLJKWWROHQJWK FURVVZDOOLQDFRPPHUFLDOVSDFH6XFKDIUDPH
UDWLR EHWZHHQ RSHQLQJV RI  WR  ([LVWLQJ VKRXOGEHDPRPHQWIUDPHUDWKHUWKDQDEUDFHG
FURVVZDOO FRQQHFWLRQV WR GLDSKUDJPV QHHG QRW EH IUDPH VR DV WR KDYH WKH GDPSLQJ HIIHFW RI D
LQYHVWLJDWHGDVORQJDVWKHFURVVZDOOH[WHQGVWRWKH FURVVZDOOUDWKHUWKDQWKHULJLGEUDFLQJHIIHFWRI
IUDPLQJRIWKHGLDSKUDJPVDERYHDQGEHORZ DVKHDUZDOO7KHSUHVFULSWLRQRI\LHOGVWRU\GULIW
QRW WR H[FHHG  PP LV LQWHQGHG WR SURYLGH
™ ([LVWLQJFURVVZDOOVJHQHUDOO\DUHSHUIRUDWHGE\ VWLIIQHVV DQ LQHODVWLF WKUHVKROG DQG ORDG
GRRU RSHQLQJV 7KH HIIHFWLYH OHQJWK RI WKH GHIRUPDWLRQEHKDYLRUVLPLODUWRWKDWRIH[LVWLQJ
FURVVZDOOXVHGIRUFDOFXODWLRQVRIWKHUHTXLUHG FURVVZDOOV
FURVVZDOOVWUHQJWKFDQQRWLQFOXGHSRUWLRQVWKDW ™ 7KH IUDPH XVHG DV D FURVVZDOO LV LQWHQGHG WR
KDYHDKHLJKWWROHQJWKUDWLROHVVWKDQWR \LHOGDQGWKHIUDPHVHFWLRQVDWZKLFK\LHOGLQJ
,IWKHRSHQLQJVZHUHPKLJKGRRUVDVHFWLRQ ZLOORFFXUPXVWEHEUDFHGWREXLOGLQJHOHPHQWV
EHWZHHQWKHGRRURUGRRUVDQGWKHHQGRIWKH WKDW FDQ SURYLGH DGHTXDWH UHVWUDLQW DJDLQVW
ZDOORIOHVVWKDQPFDQQRWEHXVHGIRUWKH ODWHUDOEXFNOLQJ
FDOFXODWLRQRIFURVVZDOOFDSDFLW\ ™ &RQVLGHULQJ WKH FRVW RI DGGLQJ D IUDPH
™ 7KH FDSDFLWLHV RI WKH FRQQHFWLRQV RI WKH UHJDUGOHVV RI WKH GHVLJQ FULWHULD LW PD\ EH
H[LVWLQJFURVVZDOOWRWKHGLDSKUDJPVDERYHRU EHWWHUWRSURYLGHDPRPHQWIUDPHGHVLJQHGDV
EHORZ WKH ZDOO QHHG QRW EH LQYHVWLJDWHG LI WKH D VKHDU ZDOO :KHQ XVHG DV D VKHDU ZDOO WKH
FURVVZDOO H[WHQGV WR WKH GLDSKUDJP OHYHO PRPHQWIUDPHLVGHVLJQHGWRUHVLVWWKHORDGLQJ
DERYH ,I WKH FURVVZDOO RQO\ H[WHQGV WR FHLOLQJ RI WKH WULEXWDU\ DUHD RI WKH GLDSKUDJP RU
MRLVWV WKDW DUH VHSDUDWH IURP WKH IORRU RU URRI GLDSKUDJPV DQG LWV GULIW XQGHU WKLV ORDGLQJ LV
IUDPLQJDERYHWKHQFRQWLQXLW\RIWKHFURVVZDOO

6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

OLPLWHGE\6HFWLRQ$WRWLPHVWKH ™ $OO RI WKH '&5 IRUPXODV DVVXPH WKDW WKH

VWRU\KHLJKW UHVLVWDQFH RI HDFK HQG RI WKH GLDSKUDJP LV
QHDUO\ HTXDO ,I D ODUJH LQHTXDOLW\ H[LVWV WKH
$:RRGGLDSKUDJPV WRWDO FDSDFLW\ RI WKH GLDSKUDJP VKRXOG EH
$ $FFHSWDEOH GLDSKUDJP VSDQ  $ DGMXVWHG$FRQVHUYDWLYHDVVXPSWLRQZRXOGEH
GLDSKUDJPLVDFFHSWDEOHLIWKHSRLQW/ '&5 RQ WR XVH WZLFH WKH FDSDFLW\ RI WKH HQG ZLWK WKH
)LJXUH$IDOOVZLWKLQ5HJLRQRU OHDVW GHSWK 7KH DQDO\VLV RI D IOH[LEOH
GLDSKUDJP IRU D '&5 DVVXPHV WKDW WKH
™ &RQYHQWLRQDO GLDSKUDJP DQDO\VLV LV QRW GLDSKUDJP VKDSH LQ DQ\ VSDQ LV UHODWLYHO\
UHTXLUHGE\WKHVSHFLDOSURFHGXUH7KHVWUHQJWK UHFWDQJXODU %XLOGLQJV ZLWK SODQ LUUHJXODULWLHV
DQG VWLIIQHVV RI D IOH[LEOH GLDSKUDJP DUH EXW SDUDOOHO ZDOOV FDQ EH DQDO\]HG E\ WKLV
DFFHSWDEOH LI LWV VSDQ OHQJWK DQG '&5 IDOO LQ PHWKRG 7KH VSDQ RI WKH GLDSKUDJP LV WKH
5HJLRQRURI)LJXUH$)LJXUH$LV GLVWDQFH EHWZHHQ VKHDU ZDOOV ZKHQ WLHV RU
DSORWRIWKHHVWLPDWHGG\QDPLFGLVSODFHPHQWRI FROOHFWRUVGHYHORSWKHORDGWUDQVIHUWRWKHVKHDU
WKH FHQWHU RI WKH GLDSKUDJP RI  PP ZDOO
PHDVXUHG UHODWLYH WR WKH VKHDU ZDOOV WKDW DUH ™ '&5V DUH FDOFXODWHG IRU WKH IROORZLQJ IRXU
VKDNLQJ WKH GLDSKUDJP 7KH JURXQG PRWLRQV FRQGLWLRQV
XVHGIRUWKHVHFDOFXODWLRQVZHUHVFDOHGWRWKH ™ ,WHP  ,I WKHUH DUH QR TXDOLI\LQJ FURVVZDOOV
$7& SHUFHQW GDPSHG UHVSRQVH VSHFWUXP DERYHRUEHORZWKHGLDSKUDJPOHYHODQDO\]HG
KDYLQJ J HIIHFWLYH SHDN DFFHOHUDWLRQ DQG WKHWRWDOODWHUDOORDGWULEXWDU\WRWKHGLDSKUDJP
PPVSHDNJURXQGYHORFLW\ PXOWLSOLHG E\ D ODWHUDO ORDG FRHIILFLHQW DQG
VSHFWUDOUHVSRQVHIDFWRULVGLYLGHGE\WKHWRWDO
$ 'HPDQGFDSDFLW\ UDWLRV VKHDUFDSDFLW\RIERWKHQGVRIWKHGLDSKUDJP
'HPDQGFDSDFLW\UDWLRVVKDOOEHFDOFXODWHGIRUWKH ™ ,WHP7KHFURVVZDOOVLQDVLQJOHVWRU\EXLOGLQJ
GLDSKUDJPDWDQ\OHYHODFFRUGLQJWRWKHIROORZLQJ DUH DOVR XVXDOO\ DQ DGGLWLRQDO ORDG SDWK
IRUPXODV EHWZHHQ WKH URRI GLDSKUDJP DQG WKH JURXQG
7KHFDSDFLW\RIERWKHQGVRIWKHGLDSKUDJPDQG
 )RU D GLDSKUDJP ZLWKRXW TXDOLI\LQJ WKHFURVVZDOOVEHORZWKHGLDSKUDJPDUHDGGHG
FURVVZDOOV DW OHYHOV LPPHGLDWHO\ DERYH RU WRJHWKHU WR GHWHUPLQH WKH FDSDFLW\ RI WKH
EHORZ GLDSKUDJP
 ™ ,WHP,IWKHEXLOGLQJKDVFURVVZDOOVLQDOOOHYHOV
ଶǤଵௌ ௐ RI WKH EXLOGLQJ WKH FDOFXODWLRQ RI '&5 EHJLQV
‫ ܴܥܦ‬ൌ σ ವభ ೏   $ ZLWK WKH URRI OHYHO DQG LV PDGH DW HDFK VWRU\
஽
௩ೠ
 OHYHO 7KH VXP RI WKH GLDSKUDJP ORDGV DERYH
 )RU D GLDSKUDJP LQ D VLQJOHVWRU\ EXLOGLQJ WKH OHYHO XQGHU FRQVLGHUDWLRQ LV XVHG DV WKH
GHPDQG 7KH WRWDO FDSDFLW\ RI DOO WKH
ZLWK TXDOLI\LQJ FURVVZDOOV RU IRU D URRI
GLDSKUDJPV DERYH WKH OHYHO XQGHU
GLDSKUDJP FRXSOHG E\ FURVVZDOOV WR WKH FRQVLGHUDWLRQDQGWKHFDSDFLW\RIWKHFURVVZDOOV
GLDSKUDJPGLUHFWO\EHORZ EHORZ WKH GLDSKUDJP OHYHO DQDO\]HG DUH WKH
 FRPELQHG FDSDFLW\ 7KH FURVVZDOOV DW HDFK
ଶǤଵௌ ௐ
‫ ܴܥܦ‬ൌ σ ವభ ೏ ൅ ܸ௖௕   $ OHYHOKDYHDPLQLPXPFDSDFLW\RISHUFHQWRI
௩ೠ ஽
WKH GLDSKUDJP FDSDFLW\ DERYH DQG FDXVH D
 QHDUO\ FRPPRQ GLVSODFHPHQW RI WKH
 )RUGLDSKUDJPVLQDPXOWLVWRU\EXLOGLQJZLWK GLDSKUDJPVUHODWLYHWRWKHVKHDUZDOOV
TXDOLI\LQJFURVVZDOOVLQDOOOHYHOV ™ ,WHP  $ VSHFLDO WUHDWPHQW RI WKH URRI
 GLDSKUDJPLVSURYLGHGLQWKLVSDUDJUDSK5RRI
ଶǤଵௌ ௐ GLDSKUDJPV DUH JHQHUDOO\ PRUH IOH[LEOH WKDQ
‫ ܴܥܦ‬ൌ ሺσ σ ವభ ೏ ሻ  $
௩ೠ ஽ା௏೎್ DGMDFHQW IORRUV 7KLV SURYLVLRQ DOORZV WKH
 FDOFXODWLRQ RI D '&5 IRU WKH FRPELQDWLRQ RI D
'&5VKDOOEHFDOFXODWHGDWHDFKOHYHOIRUWKHVHWRI URRIDQGWKHDGMDFHQWIORRUZKHQRQO\WKHVHWZR
GLDSKUDJPV DW DQG DERYH WKH OHYHO XQGHU GLDSKUDJPV DUH FRXSOHG E\ FURVVZDOOV
FRQVLGHUDWLRQ,QDGGLWLRQWKHURRIGLDSKUDJPVKDOO &URVVZDOOVPD\RUPD\QRWH[LVWLQWKHVWRULHV
DOVRPHHWWKHUHTXLUHPHQWVRI(TXDWLRQ$ EHORZWKHIORRUDGMDFHQWWRWKHURRIGLDSKUDJP
$ &KRUGV  $Q DQDO\VLV IRU
 )RU D URRI GLDSKUDJP DQG WKH GLDSKUDJP GLDSKUDJP IOH[XUH QHHG QRW EH PDGH DQG FKRUGV
GLUHFWO\EHORZLIFRXSOHGE\FURVVZDOOV QHHGQRWEHSURYLGHG

ଶǤଵௌ ௐ ™ 'LDSKUDJPV DUH FKHFNHG XVLQJ WKH GHPDQG
‫ ܴܥܦ‬ൌ σ σವభ ೏   $ FDSDFLW\ IRUPXODV DQG )LJXUH $ 7KH
௩ೠ ஽

6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

FRQYHQWLRQDO DQDO\VLV IRU GLDSKUDJP FKRUGV LV  'LDSKUDJPIRUFHVDWFRUQHUVRIRSHQLQJVVKDOO

QRW SDUW RI WKH VSHFLDO SURFHGXUH DQG WKH EHLQYHVWLJDWHGDQGVKDOOEHGHYHORSHGLQWRWKH
DQDO\VLVLVH[SOLFLWO\H[FOXGHGLQWKHSURYLVLRQV GLDSKUDJPE\QHZRUH[LVWLQJPDWHULDOV
7KH UHDVRQ LV WKDW WKHUH LV QRW D VLJQLILFDQW  ,Q DGGLWLRQ WR WKH GHPDQGFDSDFLW\ UDWLRV RI
IOH[XUDOUHVSRQVHLQIOH[LEOHZRRGGLDSKUDJPV
6HFWLRQ$ WKHGHPDQGFDSDFLW\UDWLR
WKH SULPDU\ HIIHFW LV VKHDU \LHOGLQJ LQ WKH HQG
]RQHV 7KH VRXUFH RI IOH[XUDO FDSDFLW\ RI WKH RIWKHSRUWLRQRIWKHGLDSKUDJPDGMDFHQWWRDQ
GLDSKUDJP LV WKH FRQWLQXLW\ LQKHUHQW LQ WKH RSHQLQJVKDOOEHFDOFXODWHGXVLQJWKHRSHQLQJ
GLDSKUDJP FRQVWUXFWLRQ 6LQFH VLJQLILFDQW OLIH GLPHQVLRQDVWKHVSDQ
WKUHDWHQLQJ GDPDJH UHODWHG WR ODFN RI  :KHUHDQRSHQLQJRFFXUVLQWKHHQGTXDUWHURI
GLDSKUDJPFKRUGVKDVQRWEHHQREVHUYHGDQG WKHGLDSKUDJPVSDQWKHFDOFXODWLRQRIvuDIRU
YLUWXDOO\ HYHU\ GLDSKUDJP KDV VRPH IRUP RI WKH GHPDQGFDSDFLW\UDWLR VKDOO EH EDVHG RQ
HGJHUHVWUDLQWDQGRULQWHUQDOFRQWLQXLW\FDSDEOH WKHQHWGHSWKRIWKHGLDSKUDJP
RISURYLGLQJDGHTXDWHIOH[XUDOFDSDFLW\QRUXOHV
IRU IRUPDO DQDO\VLV RI FKRUGV DUH LQFOXGHG LQ ™ ,WHP7KHDQDO\VLVRIDGLDSKUDJPIRULWV'&5
$SSHQGL[&KDSWHU$ DVVXPHVDUHFWDQJXODUVKDSH7KHSUHVHQFHRI
D ODUJH RSHQLQJ FDQ LQFUHDVH WKH IOH[LELOLW\ RI
$ &ROOHFWRUV  $Q DQDO\VLV RI WKH GLDSKUDJP DQG FDXVH ORFDOL]HG VWUHVVHV
GLDSKUDJP FROOHFWRU IRUFHV VKDOO EH PDGH IRU WKH 7KH GLDSKUDJP VKHDU LV DVVXPHG WR EH DQ
WUDQVIHU RI GLDSKUDJP HGJH VKHDUV LQWR YHUWLFDO DYHUDJH VKHDU VWUHVV DQG WKLV DVVXPSWLRQ
HOHPHQWV RI WKH ODWHUDO IRUFHUHVLVWLQJ V\VWHP LPSOLHVWKDWWKHXQLIRUPVKHDULQWKHGLDSKUDJP
&ROOHFWRUIRUFHVPD\EHUHVLVWHGE\QHZRUH[LVWLQJ DGMDFHQWWRWKHRSHQLQJPXVWEHWUDQVIHUUHGE\
HOHPHQWV FROOHFWRUVWRWKHSRUWLRQRIWKHGLDSKUDJPWKDWLV
FRQWLQXRXVSDVWWKHRSHQLQJ6HFWLRQ$
™ 7KH WUDQVIHU RI VKHDU IRUFHV DW WKH HGJH RI D GHVFULEHVERWKWKHVWLIIQHVVDQGVWUHQJWKFKHFN
GLDSKUDJP WR WKH VKHDU UHVLVWLQJ HOHPHQWV DW WKHUHGXFWLRQLQVWLIIQHVVFDXVHGE\DQRSHQLQJ
WKDWHGJHPD\UHTXLUHDFROOHFWRUDWWKHHGJHRI LVFKHFNHGDVLQGLFDWHGLQ,WHP,IWKHVWUHQJWK
WKHGLDSKUDJPIRUGLVWULEXWLRQRIWKHGLDSKUDJP RI WKH H[LVWLQJ GLDSKUDJP ZLWK WKH RSHQLQJ LV
VKHDUWRWKHHOHPHQWVRIWKHVKHDUZDOO,IWKH DGHTXDWHIRUWKHVWUHQJWKDQDO\VLVWKHWUDQVIHU
VKHDUZDOOLVWKHIXOOGHSWKRIWKHGLDSKUDJPQR RIXQLIRUPVKHDUWRWKHUHPDLQLQJVHFWLRQRIWKH
QHHGIRUDFROOHFWRUZRXOGH[LVWDVWKHXQLIRUPO\ GLDSKUDJP FRXOG EH DVVXPHG WR EH
GLVWULEXWHGVKHDUORDGRIWKHGLDSKUDJPZRXOG DFFRPSOLVKHGE\WKHGLDSKUDJPLWVHOI DQGWKH
EH XQLIRUPO\ UHVLVWHG DORQJ WKH OHQJWK RI WKH GLDSKUDJPHGJHDGMDFHQWWRWKHRSHQLQJFRXOG
VKHDU ZDOO ,I WKH VKHDU ZDOO VWUHQJWK DQG EHDVVXPHGWRKDYHQRVKHDUVWUHVV
VWLIIQHVV ZHUH DW RQH HQG RI WKDW OLQH RI ™ ,WHP  :KHQ WKH OHQJWK RI DQ RSHQLQJ LV D
UHVLVWDQFHWKHFROOHFWRUZRXOGDFFXPXODWHORDG VLJQLILFDQW SDUW RI WKH GLDSKUDJP VSDQ OHQJWK
IURPWKHGLDSKUDJPDQGDFWDVDWLHWRWKHVKHDU DQGLWLVLQWKHFHQWHUKDOIRIWKHGLDSKUDJPWKH
ZDOO HOHPHQW 7KH FDOFXODWHG FROOHFWRU IRUFH '&5RIWKHGLDSKUDJPWKDWLVFRQWLQXRXVVKDOO
PD\ EH UHVLVWHG E\ H[LVWLQJ RU QHZ HOHPHQWV EH FKHFNHG 7KH GHPDQG LV WKDW SDUW RI WKH
7KH UHODWLYH ULJLGLW\ RI QHZ DQG H[LVWLQJ GLDSKUDJP ORDG :G ZLWKLQ WKH OHQJWK RI
HOHPHQWVVKRXOGEHFRQVLGHUHGLQDSSRUWLRQLQJ RSHQLQJ DQG WKH VSDQ LV WKH OHQJWK RI WKH
WKHORDGVWRWKHYDULRXVHOHPHQWV RSHQLQJ PHDVXUHG SDUDOOHO WR WKH GLDSKUDJP
™ $ SLHU DGMDFHQW WR D FRUQHU RI WKH WZR VSDQ
LQWHUVHFWLQJVKHDUZDOOVLVPXFKVWLIIHUWKDQWKH ™ ,WHP  2SHQLQJV ZLWKLQ WKH OHQJWK RI WKH
XVXDOSLHUDQDO\VLVLQGLFDWHV7KHHIIHFWRIWKH GLDSKUDJPVLJQLILFDQWO\DIIHFWLWVVWLIIQHVV7KH
IODQJH ZKLFK LV WKH RWKHU ZDOO DURXQG WKH UHGXFWLRQRIVWLIIQHVVLVDSSUR[LPDWHGE\XVLQJ
FRUQHU LV VLJQLILFDQW ZKHQ WKH IODQJH LV LQ D FDSDFLW\ RI WKH GLDSKUDJP WKDW LV FDOFXODWHG
WHQVLRQ7KHVWLIIQHVVRIWKLVSLHUPD\FDXVHWKH IRUWKHQHWGHSWKUDWKHUWKDQWKHIXOOGHSWK
VSDQGUHOWRKDYHDVLJQLILFDQWFROOHFWRUVWUHVV
7KLVVKRXOGEHFRQVLGHUHGLQWKHGHVLJQRIWKH $'LDSKUDJPVKHDUWUDQVIHU 'LDSKUDJPV
FROOHFWRU %HFDXVH RI WKLV LQFUHDVHG FROOHFWRU VKDOOEHFRQQHFWHGWRVKHDUZDOOVZLWKFRQQHFWLRQV
IRUFH D PLQLPXP UHTXLUHG VSDFLQJ RI WKH ILUVW FDSDEOH RI GHYHORSLQJ WKH GLDSKUDJPORDGLQJ
VKHDU EROW IURP WKH FRUQHU LV VSHFLILHG LQ WULEXWDU\WRWKHVKHDUZDOOJLYHQE\WKHOHVVHURIWKH
6HFWLRQ $ WR SURYLGH DQ DWWDFKPHQW RI IROORZLQJIRUPXODV
WKH FROOHFWRU LPPHGLDWHO\ DGMDFHQW WR WKH 
FRUQHU ܸ ൌ ͳǤʹܵ஽ଵ ‫ܥ‬௣ ܹௗ    $
$ 'LDSKUDJPRSHQLQJV 
XVLQJWKH&SYDOXHVLQ7DEOH$&RU


6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

ܸ ൌ ‫ݒ‬௨ ‫ܦ‬    $ 6'WLPHVWKHWULEXWDU\ZHLJKWRIWKHZDOODWWKH

OHYHO RI FDOFXODWLRQ SOXV RQHKDOI RI WKH GHDG
™ 7KH FDOFXODWLRQ RI WKH FDSDFLW\ RI WKH VKHDU ORDGRIWKHGLDSKUDJPDQGQRUPDOZDOOVDWWKH
FRQQHFWLRQRIWKHGLDSKUDJPWRWKHVKHDUZDOO OHYHORIFRQVLGHUDWLRQ+RZHYHUWKHVWRU\IRUFH
LV EDVHG RQ WKH FRHIILFLHQWV IRU VSHFWUDO QHHG QRW H[FHHG WKH VSHFWUDO UHVSRQVH
DFFHOHUDWLRQ 6' IRU WKH 6%&  DQG D &S FRHIILFLHQW WLPHV WKH WULEXWDU\ ZHLJKW RI WKH
IDFWRU WKDW LV EDVHG RQ WKH PDWHULDOV XVHG IRU VKHDU ZDOO SOXV WKH VKHDU FDSDFLW\ RI WKH
FRQVWUXFWLRQ RI WKH GLDSKUDJP 7KH YDOXHV RI GLDSKUDJPDWWKHOHYHORIFRQVLGHUDWLRQ
WKH&SUDQJHIURPWR7KHOHDVWYDOXH
LVIRUDVLQJOHOD\HURIVKHDWKLQJ7KHJUHDWHVW $ :DOOVWRU\VKHDU7KHZDOOVWRU\
YDOXHRI&SLVIRUPXOWLSOHOD\HUVRIVKHDWKLQJ$ VKHDUVKDOOEHWKHVXPRIWKHZDOOVWRU\IRUFHVDWDQG
VLQJOHOD\HURISO\ZRRGZLWKDOOHGJHVVXSSRUWHG DERYHWKHOHYHORIFRQVLGHUDWLRQ
RQ WKH IUDPLQJ RU EORFNHG LV FRQVLGHUHG 
HTXLYDOHQW WR D GRXEOHOD\HU V\VWHP 6WHHO ܸ௪௫ ൌ σ ‫ܨ‬௪௫     $
GHFNV ZLWKRXW ILOO PDWHULDO KDYH &S YDOXHV
EHWZHHQWKRVHRIVLQJOHDQGGRXEOHVKHDWKHG ™ 7KH GHVLJQ VKHDU ORDG LQ D VKHDU ZDOO DW DQ\
GLDSKUDJPV 7KH VWURQJHU DQG VWLIIHU OHYHO LV WKH WRWDO RI WKH ZDOO VWRU\ IRUFHV
GLDSKUDJPV DPSOLI\ WKH JURXQG PRWLRQV FDOFXODWHG DW WKH VWRULHV DERYH E\ (TXDWLRQV
WUDQVPLWWHGWRWKHHQGVRIWKHGLDSKUDJPE\WKH $DQG$7KHOHDVWYDOXHRIFDOFXODWHG
VKHDUZDOOVPRUHWKDQVLQJOHVKHDWKHGV\VWHPV VWRU\ VKHDU LV WR EH XVHG IRU DQDO\VLV RI WKH
DQGDUHDVVLJQHGDKLJK&SFRHIILFLHQW H[LVWLQJVKHDUZDOO
™ 7KH HYDOXDWLRQ RI WKH UHTXLUHG FDSDFLW\ RI WKH
$ 6KHDUZDOODQDO\VLV6KHDUZDOOV
VKHDUFRQQHFWLRQRIDGLDSKUDJPWRWKHVKHDU
ZDOO LV QRW D FDOFXODWLRQ RI WKH UHDFWLRQ RI D VKDOOFRPSO\ZLWK6HFWLRQ$
EHDPZLWKDORDGLQJWKDWPD\EHYDULDEOHZLWKLQ ™ 7KHIRUFHVFDOFXODWHGLQWKLVVHFWLRQDUHXVHGWR
LWV VSDQ OHQJWK 7KH UHTXLUHG FDSDFLW\ RI WKH DQDO\]H WKH H[LVWLQJ VKHDU ZDOOV E\ WKH
FRQQHFWLRQLVRQHKDOIRIWKHWRWDOGHDGORDGRI SURFHGXUHVVSHFLILHGLQ6HFWLRQ$
WKHGLDSKUDJPDQGQRUPDOZDOOVPXOWLSOLHGE\
WKH VSHFWUDO UHVSRQVH DQG FRQVWUXFWLRQ $ 0RPHQWIUDPHV0RPHQWIUDPHV
FRHIILFLHQWV7KHDQDO\VLVRIGLDSKUDJPVE\WKH XVHG LQ SODFH RI VKHDU ZDOOV VKDOO EH GHVLJQHG DV
VSHFLDO SURFHGXUH DFFHSWV QRQOLQHDU EHKDYLRU UHTXLUHG E\ WKH 6%&  H[FHSW WKDW WKH IRUFHV
RI WKH GLDSKUDJP DQG OLPLWV WKH UHTXLUHG VKDOOEHDVVSHFLILHGLQ6HFWLRQ$DQGWKH
FDSDFLW\RIWKHVKHDUFRQQHFWLRQWRWKHFDSDFLW\ VWRU\GULIWUDWLRVKDOOEHOLPLWHGWRH[FHSWDV
RIWKHGLDSKUDJP7KHFKHFNIRUWKHDFFHSWDEOH IXUWKHUOLPLWHGE\6HFWLRQ$
'&5 RI WKH GLDSKUDJP LV IRU GLVSODFHPHQW
FRQWURO7KHOLPLWDWLRQRI WKHVKHDUFRQQHFWLRQ ™ 0RPHQWIUDPHVPD\EHXVHGDVVKHDUZDOOVLQ
FDSDFLW\WRWKHVKHDUFDSDFLW\RIWKHGLDSKUDJP ORFDWLRQVZKHUHDVKHDUZDOOGRHVQRWH[LVW$
SURYLGHV D FRQQHFWLRQ VWUHQJWK WKDW FDXVHV FRPPRQXVHIRUPRPHQWIUDPHVLVDWWKHRSHQ
VKHDU\LHOGLQJLQWKHGLDSKUDJP IURQW RI D FRPPHUFLDO EXLOGLQJ 7KH ORDGLQJ RI
WKHPRPHQWIUDPHLVFDOFXODWHGDVLILWZHUHDQ
$6KHDUZDOOV,QSODQHORDGLQJ H[LVWLQJ VKHDU ZDOO 7KH LQWHUVWRU\ GULIW RI WKH
$ :DOOVWRU\IRUFH7KHZDOOVWRU\ PRPHQW IUDPH LV OLPLWHG WR  RI WKH VWRU\
KHLJKW,IWKHPRPHQWIUDPHLVXVHGLQDOLQHRI
IRUFHGLVWULEXWHGWRDVKHDUZDOODWDQ\GLDSKUDJP
UHVLVWDQFH ZLWK D 850 ZDOO PRUH VHYHUH
OHYHOVKDOOEHWKHOHVVHUYDOXHFDOFXODWHGDV OLPLWDWLRQVRQLQWHUVWRU\GULIWDUH SUHVFULEHGE\
6HFWLRQ$DQGWKHPRPHQWIUDPHPXVW
‫ܨ‬௪௫ ൌ ͲǤͺܵ஽ଵ ሺܹ௪௫ ൅ ܹௗ Τʹሻ  $ EH GHVLJQHG WR WDNH  SHUFHQW RI WKH ORDG
DORQJWKDWOLQH
EXWQHHGQRWH[FHHG
$2XWRISODQH IRUFHVXQUHLQIRUFHG
PDVRQU\ZDOOV
‫ܨ‬௪௫ ൌ ͲǤͺܵ஽ଵ ܹ௪௫ ൅ ‫ݒ‬௨ ‫ܦ‬  $
$ $OORZDEOHXQUHLQIRUFHGPDVRQU\
ZDOOKHLJKWWRWKLFNQHVVUDWLRV7KHSURYLVLRQVRI
™ 7KHVSHFLDOSURFHGXUHGLIIHUVIURPWKHJHQHUDO
SURFHGXUHLQWKDWWKHORDGLQJRIWKHVKHDUZDOO 6HFWLRQ$DUHDSSOLFDEOHH[FHSWWKHDOORZDEOH
LVGHWHUPLQHGE\WKHGLDSKUDJPFDSDFLW\UDWKHU KHLJKWWRWKLFNQHVVUDWLRVJLYHQLQ7DEOH$9VKDOO
WKDQDQDUELWUDU\GLVWULEXWLRQRIDEDVHVKHDUWR EHGHWHUPLQHGIURP)LJXUH$DVIROORZV
WKH OHYHOV RI WKH GLDSKUDJP ,I WKHUH DUH QR 
FURVVZDOOVWKHVWRU\IRUFHRIDGLDSKUDJPOHYHO
LV HTXDO WR WKH VSHFWUDO UHVSRQVH FRHIILFLHQW

6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

 ,Q 5HJLRQ  KHLJKWWRWKLFNQHVV UDWLRV IRU ™ ,WHP  $ VSHFLDO FRQGLWLRQ H[LVWV ZKHQ WKH
EXLOGLQJV ZLWK FURVVZDOOV PD\ EH XVHG LI '&5 RI WKH GLDSKUDJPV IDOOV LQ 5HJLRQ  RI
TXDOLI\LQJFURVVZDOOVDUHSUHVHQWLQDOOVWRULHV )LJXUH $ ,Q WKLV VSHFLDO FRQGLWLRQ WKH
 ,Q 5HJLRQ  KHLJKWWRWKLFNQHVV UDWLRV IRU KHLJKWWRWKLFNQHVVUDWLRVIRUFURVVZDOOVPD\EH
XVHGHYHQWKRXJKTXDOLI\LQJFURVVZDOOVDUHQRW
EXLOGLQJV ZLWK FURVVZDOOV PD\ EH XVHG
SUHVHQW
ZKHWKHU RU QRW TXDOLI\LQJ FURVVZDOOV DUH ™ ,WHP7KLVVSHFLDOSURYLVLRQDOORZLQJUDWLRVRI
SUHVHQW EXLOGLQJV³ZLWKFURVVZDOOV´ZKHQQRFURVVZDOOV
 ,Q5HJLRQKHLJKWWRWKLFNQHVVUDWLRVIRU³DOO DUHSUHVHQWLVGXHWRWKHSUHVHQFHRIK\VWHUHWLF
RWKHUEXLOGLQJV´VKDOOEHXVHGZKHWKHURUQRW GDPSLQJ RI GLDSKUDJPV WKDW KDYH '&5V LQ
TXDOLI\LQJFURVVZDOOVDUHSUHVHQW H[FHVVRI
™ 850 ZDOOV QHHG QRW EH DQDO\]HG IRU IRUFHV $ :DOOV ZLWK GLDSKUDJPV LQ
QRUPDOWRWKHZDOOVXUIDFH,QVWHDGRIDIOH[XUDO GLIIHUHQWUHJLRQV  :KHQGLDSKUDJPV DERYHDQG
DQDO\VLV DFFHSWDEOH KHLJKWWRWKLFNQHVV UDWLRV EHORZWKHZDOOXQGHUFRQVLGHUDWLRQKDYHGHPDQG
IRU WKH 850 ZDOOV DUH VSHFLILHG :DOOV FDSDFLW\UDWLRVLQGLIIHUHQWUHJLRQVRI)LJXUH$
FRQIRUPLQJ WR WKHVH KHLJKWWRWKLFNQHVV UDWLRV
WKHOHVVHUKHLJKWWRWKLFNQHVVUDWLRVKDOOEHXVHG
DUHVWDEOHGXHWRG\QDPLFURFNLQJVWDELOLW\QRW
EHFDXVHRIWKHWHQVLOHFDSDFLW\RIWKHEHGMRLQWV ™ 7KH '&5 RI ERWK WKH XSSHU DQG ORZHU
7KHFRQFHSWRIG\QDPLFVWDELOLW\DVVXPHVWKDW GLDSKUDJPV WKDW VKDNH WKH RXWRISODQH ZDOO
WKHEHGMRLQWVDUHFUDFNHGDWWKHZDOODQFKRUDJH VKDOO EH FKHFNHG ,I WKH '&5 RI HLWKHU
OHYHOVDQGQHDUWKHFHQWHURIWKHZDOOEHWZHHQ GLDSKUDJP IDOOV LQWR 5HJLRQ  RI )LJXUH $
ZDOODQFKRUDJHOHYHOV,IWKHKHLJKWWRWKLFNQHVV WKH KHLJKWWRWKLFNQHVV UDWLRV IRU ³DOO RWKHU´
UDWLRRIWKH850ZDOOH[FHHGVWKHVHSUHVFULEHG EXLOGLQJVVKDOOEHXVHGHYHQLITXDOLI\LQJFURVV
UDWLRVWKHZDOO PXVWEHEUDFHGWR LQFUHDVH LWV ZDOOV DUH QRW SUHVHQW 7KH '&5 RI ERWK
VWDELOLW\ GLDSKUDJPVPXVWIDOOZLWKLQ5HJLRQRI)LJXUH
™ 7KH DOORZDEOH KHLJKWWRWKLFNQHVV UDWLRV DUH $IRUWKHKHLJKWWRWKLFNQHVVUDWLRVIRU³ZLWK
JLYHQ LQ 7DEOH $% 7KH KHLJKWWRWKLFNQHVV FURVVZDOOV´WREHXVHGHYHQWKRXJKFURVVZDOOV
UDWLRV ZHUH GHWHUPLQHG E\ GDWD REWDLQHG E\ DUH QRW SUHVHQW ,Q WKH FDOFXODWLRQ RI '&5 IRU
G\QDPLFWHVWLQJRIIXOOVL]HZDOOV7KHZDOOVDW GHWHUPLQDWLRQRIKHLJKWWRWKLFNQHVVUDWLRVWKH
WKHXSSHUPRVWVWRU\OHYHODUHPRVWYXOQHUDEOH FDSDELOLW\ RI FURVVZDOOV WR UHGXFH GLDSKUDJP
EHFDXVH WKHUH LV QR RYHUEXUGHQ :DOOV DW WKH OHQJWKV RU DFWLQJ DV OLQHV WR UHVLVW GLDSKUDJP
ILUVWVWRU\RIWKHEXLOGLQJVKDYHOHVVYXOQHUDELOLW\ VKHDULVH[FOXGHG
DV WKH XQDPSOLILHG JURXQG PRWLRQ VKDNHV DW
RQH HQG RI WKH ZDOO 7KH LQFUHDVHG UDWLRV IRU $2SHQIURQWGHVLJQSURFHGXUH$VLQJOH
EXLOGLQJV ZLWKFURVVZDOOVDUHGXHWRWKH HIIHFW VWRU\EXLOGLQJZLWKDQRSHQIURQWRQRQHVLGHDQG
RI GDPSLQJ E\ WKH FURVVZDOOV RI WKH FURVVZDOOV SDUDOOHO WR WKH RSHQ IURQW PD\ EH
GLDSKUDJPV 7KHVH KHLJKWWRWKLFNQHVV UDWLRV GHVLJQHGE\WKHIROORZLQJSURFHGXUH
ZLWKWKHH[FHSWLRQRIEXLOGLQJVZLWKFURVVZDOOV 
DUH DSSOLFDEOH WR EXLOGLQJV DQDO\]HG E\ HLWKHU  (IIHFWLYHGLDSKUDJPVSDQ/LIRUXVHLQ)LJXUH
WKHJHQHUDORUVSHFLDOSURFHGXUH $VKDOOEHGHWHUPLQHGLQDFFRUGDQFHZLWK
™ %XLOGLQJV ZLWK FURVVZDOOV DQDO\]HG E\ WKH WKHIROORZLQJIRUPXOD
VSHFLDO SURFHGXUH PD\ KDYH ODUJHU KHLJKWWR 
WKLFNQHVVUDWLRVLIVHYHUDOVSHFLDOOLPLWDWLRQVDUH
PHW
‫ܮ‬௜ ൌ ʹሾሺܹ௪௫ Ȁܹௗ ሻ‫ ܮ‬൅ ‫ܮ‬ሿ  $
™ ,WHP  ,Q 5HJLRQ  WKH LQFUHDVHG KHLJKWWR 
WKLFNQHVVUDWLRVDUHDSSOLFDEOHRQO\WREXLOGLQJV  'LDSKUDJP GHPDQGFDSDFLW\ UDWLR VKDOO EH
ZLWK FURVVZDOOV LQ DOO VWRU\ OHYHOV DQG LI WKH FDOFXODWHGDV
IROORZLQJFRQGLWLRQVDUHPHW 
‫ ܴܥܦ‬ൌ ʹǤͳܵ஽ଵ ሺܹௗ ൅ ܹ௪ ሻȀሺ‫ݒ‬௨ ‫ ܦ‬൅ ܸ௖௕ ሻ
x 7KHWHVWHGPRUWDUVKHDUVWUHQJWKVKDOOQRWEH
OHVV WKDQ  N3D RU ZKHUH WKH YLVXDO $
H[DPLQDWLRQ RI WKH FROODU MRLQWV LQGLFDWHV  ™ ,W VKRXOG EH QRWHG WKDW ³RSHQIURQW´ KDV DQ
SHUFHQWRUPRUHRIWKHFROODUMRLQWLVILOOHGZLWK RUGLQDU\ PHDQLQJ UHIHUULQJ WR D EXLOGLQJ IDFH
PRUWDUDQGWKHWHVWHGPRUWDUVKHDUVWUHQJWK WKDW LV RSHQ LH IUHH IURP VLJQLILFDQW VROLG
LVN3DRUPRUH ZDOOVXVXDOO\DWRQHVWRU\0RVWFRPPRQO\DQ
x 7KH VHSDUDWLRQ RI WKH EXLOGLQJ IURP DQ RSHQIURQW EXLOGLQJ LV WKH JURXQG IORRU RI D
DGMDFHQWEXLOGLQJVKDOOQRWEHOHVVWKDQ FRPPHUFLDO EXLOGLQJ %XLOGLQJV RQ FRUQHUV RI
PPVHH6HFWLRQ$ EORFNVRIWHQKDYHRSHQIURQWVRQWZRVLGHV

6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

™ ,I D PRPHQW IUDPH FRPSO\LQJ ZLWK 6HFWLRQ $1$/<6,6$1'

$ LV SODFHG LQ WKH RSHQ IURQW WKHQ WKH '(6,*1
EXLOGLQJ PHHWV WKH UHTXLUHPHQW RI 6HFWLRQ
$,WHPIRUWZROLQHVRIYHUWLFDOHOHPHQWV $*HQHUDO7KHIROORZLQJUHTXLUHPHQWVDUH
LQ WKH GLUHFWLRQ SDUDOOHO WR WKH IURQW WKHUHIRUH DSSOLFDEOH WR ERWK WKH JHQHUDO SURFHGXUH DQG WKH
WKHRSHQIURQWSURFHGXUHLVQRWDSSOLFDEOH VSHFLDOSURFHGXUHIRUDQDO\]LQJYHUWLFDOHOHPHQWVRI
™ 8QGHUWKHH[FHSWLRQRI6HFWLRQ$,WHP WKHODWHUDOIRUFHUHVLVWLQJV\VWHP
WKH RSHQ IURQW RI D VLQJOHVWRU\ EXLOGLQJ LV
SHUPLWWHGWRUHPDLQRSHQLIWKHEXLOGLQJVDWLVILHV ™ 7KHUHTXLUHPHQWVRIWKLVVHFWLRQDUHDSSOLFDEOH
WKHUHTXLUHPHQWVRIWKHRSHQIURQWSURFHGXUHLQ WRERWKWKHJHQHUDODQGVSHFLDOSURFHGXUHV7KH
WKLV VHFWLRQ DQG WKH EXLOGLQJ FRQWDLQV WZRSURFHGXUHVZLOOGHWHUPLQHGLIIHUHQWLQSODQH
FURVVZDOOV VKHDUORDGLQJIRUWKHVKHDUZDOOVIRUEXLOGLQJV
™ 7KH RSHQIURQW SURFHGXUH LV SHUPLWWHG RQO\ LQ RI HTXDO IORRU DUHD GXH WR WKH GLIIHUHQFH LQ
RQHGLUHFWLRQLIWKHUHDUHWZRRSHQIURQWVRQH RYHUDOOEXLOGLQJZHLJKWDQGWKHFRXSOLQJRIWKH
RIWKHPPXVWEHSURYLGHGZLWKDEUDFHGIUDPH ZHLJKWRIQRUPDOZDOOVZLWKWKHVKHDUZDOOV
RUVKHDUZDOO
$([LVWLQJXQUHLQIRUFHGPDVRQU\ZDOOV
™ ,Q FDVH WKH RSHQIURQW SURFHGXUH LV WULHG EXW
FDQQRW EH VDWLVILHG WKH VROXWLRQ ZRXOG EH WR $ )OH[XUDO ULJLGLW\  )OH[XUDO
SURYLGHDEUDFHGIUDPHRUDPRPHQWIUDPHLQ FRPSRQHQWV RI GHIOHFWLRQ PD\ EH QHJOHFWHG LQ
WKHRSHQIURQW7KHRSHQIURQWSURFHGXUHXVHV GHWHUPLQLQJWKHULJLGLW\RIDQXQUHLQIRUFHGPDVRQU\
(TXDWLRQ$WRGHWHUPLQHDQHIIHFWLYHVSDQ ZDOO
/LWKHGLVWDQFHIURPWKHQHDUHVWVKHDUZDOOWR
WKH RSHQ IURQW LV WKH OHQJWK / $Q DGGLWLRQDO ™ 7KH UHODWLYH ULJLGLW\ RI SLHUV LQ D ZDOO PD\ EH
OHQJWKLVFDOFXODWHGLQRUGHUWRDFFRXQWIRUWKH GHWHUPLQHGRQWKHEDVLVRIQHWDUHDDQGKHLJKW
ZHLJKW RI PDVRQU\ DW WKH RSHQ IURQW 7KLV DV LQ D VKHDU EHDP :DOO SLHUV UDUHO\ KDYH
ZHLJKWZKLFKLVDFRQFHQWUDWHGORDGDWWKHHQG VSDQGHSWK UDWLRV WKDW H[FHHG WKH UDWLR ZKHUH
RIWKHGLDSKUDJPLVDVVXPHGWREHGLVWULEXWHG IOH[XUDOVWUHVVVWUDLQUHODWLRQVKLSVH[LVW8VHRI
XQLIRUPO\ DORQJ D OHQJWK :Z:G / 7KH VKHDU GHIRUPDWLRQV RQO\ IRU FDOFXODWLRQ RI
DXJPHQWHG OHQJWK LV >:Z:G /  /@ 7KLV UHODWLYHULJLGLW\LVDQDSSURSULDWHSURFHGXUH
OHQJWKLVWKHQGRXEOHGWRHVWLPDWHWKHVSDQ/L
$ 6KHDUZDOOVZLWKRSHQLQJV:DOO
RIDQHTXLYDOHQWGLDSKUDJPWKDWKDVDGHIOHFWHG
VKDSH VLPLODU WR D VKHDU EHDP VSDQQLQJ SLHUVVKDOOEHDQDO\]HGDFFRUGLQJWRWKHIROORZLQJ
EHWZHHQWZRVKHDUZDOOV SURFHGXUHZKLFKLVGLDJUDPPHGLQ)LJXUH$
™ 7KHGLDSKUDJP'&5LVFDOFXODWHGE\(TXDWLRQ 
$XVLQJWKHVSHFWUDOUHVSRQVHFRHIILFLHQW  )RUDQ\SLHU
WKHVXPRIWKHGLDSKUDJPDQGQRUPDOZDOOGHDG 
ORDGWKHZHLJKWRIWKHZDOODWWKHRSHQIURQWDQG  7KH SLHU VKHDU FDSDFLW\ VKDOO EH
WKHVKHDUFDSDFLW\RIRQHHQGRIWKHGLDSKUDJP FDOFXODWHGDV
DQG WKH UHTXLUHG FURVVZDOO 7KLV DQDO\VLV 
GHWHUPLQHVWKHFDSDFLW\RIWKHFURVVZDOOWKDWLV ܸ௔ ൌ ‫ݒ‬௠ ‫ܣ‬ȀͳǤͷ  $
UHTXLUHGWRFRQWUROWKHGLVSODFHPHQWDWWKHHQG
RIWKHGLDSKUDJPDWWKHRSHQIURQW

™ 7KHUHTXLUHGFURVVZDOOQHHGQRWEHULJKWLQWKH  7KHSLHUURFNLQJVKHDUFDSDFLW\VKDOOEH
RSHQIURQWEXWPD\EHDWVRPHGLVWDQFHEDFN FDOFXODWHGDV
ZLWKLQWKHEXLOGLQJ,WVKRXOGDOVREHQRWHGWKDW 
DPRPHQWIUDPHRURWKHUV\VWHPPLJKWEHXVHG ܸ௥ ൌ ͲǤͻܲ஽ ‫ܦ‬Ȁ‫ܪ‬ $
LQ SODFH RI D FURVVZDOO LQ DFFRUGDQFH ZLWK 
6HFWLRQ$:KHUHWKHFURVVZDOORURWKHU  7KH ZDOOSLHUVDWDQ\OHYHODUHDFFHSWDEOHLI
V\VWHPLVDWVRPHGLVWDQFHEDFNIURPWKHRSHQ WKH\FRPSO\ZLWKRQHRIWKHIROORZLQJPRGHV
IURQWWKH DQDO\VLVSHUIRUPHGWRGHWHUPLQHWKH RIEHKDYLRU
PD[LPXP GLVWDQFH WKDW LV SHUPLWWHG EHFRPHV

DQLWHUDWLYHSURFHVV,WLVVLPLODUWRWKHDQDO\VLV
GHVFULEHG DERYH H[FHSW WKDW D FURVVZDOO
 5RFNLQJ FRQWUROOHG PRGH :KHQ WKH
FDSDFLW\ LV QRW LQFOXGHG LQ WKH FDOFXODWLRQ RI SLHUURFNLQJVKHDUFDSDFLW\LVOHVVWKDQ
(TXDWLRQ$7KHPD[LPXPGLVWDQFHLV/L$ WKHSLHUVKHDUFDSDFLW\LHVrVaIRU
WULDOYDOXHRI/LVXVHGLQ(TXDWLRQ$DQG HDFKSLHULQDOHYHOIRUFHVLQWKHZDOO
WKH FRUUHVSRQGLQJ /L DQG '&5 DUH XVHG WR DWWKDWOHYHOVwxVKDOOEHGLVWULEXWHGWR
FKHFNWKHGLDSKUDJP7KHSURFHVVLVUHSHDWHG HDFKSLHULQSURSRUWLRQWR3''+
XQWLODQDFFHSWDEOHYDOXHRI/LVREWDLQHG 

6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

)RUWKHZDOODWWKDWOHYHO VKHDUFDSDFLW\3''+LVXVHGDVWKHUHODWLYH

ULJLGLW\RIHDFKSLHU
ͲǤ͹ܸ௪௫ ൏ σ ܸ௥    $ ™ 6KHDUFRQWUROOHGPRGH :KHQWKH D[LDO ORDG
 RQDQ\ZDOOSLHULVODUJHHQRXJKWRSUHYHQWEHG
 6KHDUFRQWUROOHGPRGH:KHUHWKHSLHU MRLQW FUDFNLQJ SULRU WR WKH IRUPDWLRQ RI D
VKHDU FDSDFLW\ LV OHVV WKDQ WKH SLHU GLDJRQDOVKHDUFUDFNDVKHDUIDLOXUHLQWKLVSLHU
URFNLQJFDSDFLW\LHVaVrLQDWOHDVW PD\RFFXUDWDVPDOOGLVSODFHPHQW,QWKLVFDVH
RQHSLHULQDOHYHOIRUFHVLQWKHZDOODW WKH ORDG LV SURSRUWLRQHG WR WKH SLHUV E\ WKH
WKH OHYHO Vwx VKDOO EH GLVWULEXWHG WR UHODWLYH VKHDU ULJLGLW\ )OH[XUDO VWLIIQHVV LV QRW
HDFKSLHULQSURSRUWLRQWR'+ LQFOXGHG LQ WKH UHODWLYH ULJLGLW\ FDOFXODWLRQV DV
WKH FRPPRQ SLHU VKDSH LV VXFK WKDW IOH[XUDO

GHIRUPDWLRQVDUHWKRVHUHODWHGWRGHHSEHDPV
)RUHDFKSLHUDWWKDWOHYHO ™ :KHQWKHSLHUVKHDUFDSDFLW\9DLVOHVVWKDQ
 WKHSLHUURFNLQJFDSDFLW\9ULQHYHQRQHSLHU
ܸ௣ ൏ ܸ௔    $ WKHVKHDUIRUFHLQWKHZDOO9ZLVGLVWULEXWHGWR
DQG WKH SLHUV LQ DFFRUGDQFH ZLWK WKHLU UHODWLYH
ܸ௣ ൏ ܸ௥    $ ULJLGLW\'+7KHGLVWULEXWHGORDGWRDSLHU9S
PXVWEHOHVVWKDQ9DDQGLI9S9DWKHVKHDU
UHVLVWDQFHRIWKHZDOOSLHUVLVDGHTXDWH,I9S
,I ܸ௣ ൏ ܸ௔ IRU HDFK SLHU DQG ܸ௣ ൐ ܸ௥ IRU RQH RU
9D IRU HDFK SLHU DQG 9S ! 9U IRU RQH RU PRUH
PRUH SLHUV VXFK SLHUV VKDOO EH RPLWWHG IURP WKH SLHUVWKHQDQLQFRPSDWLEOHSLHUFDSDFLW\H[LVWV
DQDO\VLVDQGWKHSURFHGXUHVKDOOEHUHSHDWHGIRUWKH 7KH SLHUV ZKHUH 9S ! 9U DUH RPLWWHG IURP WKH
UHPDLQLQJSLHUVXQOHVVWKHZDOOLVVWUHQJWKHQHGDQG DQDO\VLV DQG WKH SURFHGXUH LV UHSHDWHG XVLQJ
UHDQDO\]HG RQO\WKHSLHUVZKHUH9S!9D7KLVSURFHGXUHLV
VKRZQLQDIORZGLDJUDPLQ)LJXUH$
 0DVRQU\ SLHU WHQVLRQ VWUHVV 8QUHLQIRUFHG ™ 0DVRQU\ SLHU WHQVLRQ VWUHVV )OH[XUDO
PDVRQU\ZDOOSLHUVQHHGQRWEHDQDO\]HGIRU PRPHQWV DQG WHQVLOH VWUHVVHV DUH QRW
WHQVLRQVWUHVV FDOFXODWHG IRU XQUHLQIRUFHG PDVRQU\ SLHUV
)OH[XUDOFUDFNLQJPD\RFFXURQEHGMRLQWVGXH
™ 7KLV VHFWLRQ LV IRU WKH DQDO\VLV RI D 850 ZDOO WRRXWRISODQHIOH[XUHEXWWKHSLHUV\VWHPFDQ
ZLWK ZLQGRZV DQGRU RSHQLQJV 7KH LQSODQH EH VWDEOH ZKHQ VXEMHFWHG WR WKH G\QDPLF
VWUHQJWKRIWKHZDOOLVWKHVWUHQJWKRIWKHSLHUV ORDGLQJRIDQHDUWKTXDNH
EHWZHHQ WKH ZLQGRZV DQG GRRUV 7KH SLHU
VKHDUFDSDFLW\LVLWVDOORZDEOHVKHDUY PWLPHV $ 6KHDU ZDOOV ZLWKRXW RSHQLQJV
WKH QHW DUHD RI WKH SLHU $ DQG DGMXVWHG IURP 6KHDUZDOOVZLWKRXWRSHQLQJVVKDOOEHDQDO\]HGWKH
SHDNVKHDUVWUHVVWRDYHUDJHVKHDUVWUHVV7KLV VDPHDVIRUZDOOVZLWKRSHQLQJVH[FHSWWKDWVrVKDOO
DGMXVWHGVKHDUVWUHQJWKLVWKHDYHUDJHVKHDUDV EHFDOFXODWHGDVIROORZV
XVHG LQ WKH GHVLJQ RI UHLQIRUFHG PDVRQU\ DQG ܸ௥ ൌ ͲǤͻሺܲ஽ ൅ ͲǤͷܲ௪ ሻ‫ܦ‬Ȁ‫(ܪ‬TXDWLRQ$
UHLQIRUFHG FRQFUHWH $ VHFRQG PHWKRG RI
FDOFXODWLQJWKHLQSODQHVKHDUFDSDFLW\LVJLYHQ ™ 7KHVHZDOOVVKDOOEHDQDO\]HGDVDVLQJOHSLHU
E\(TXDWLRQ$7KLVURFNLQJVKHDUFDSDFLW\ IRULQSODQHVKHDUFDSDFLW\7KHURFNLQJVKHDU
DVVXPHV WKDW WKH EHG MRLQWV DW WKH WRS DQG FRPSXWDWLRQXVHVRQHKDOIRIWKHZDOOZHLJKWDV
ERWWRP RI WKHSLHU KDYHFUDFNHGDQGWKHD[LDO WKHUHVWRULQJIRUFHEHFDXVHWKHSURGXFWRI3'LV
ORDG RQ WKH SLHU DFWLQJ HFFHQWULFDOO\ RQ WKH ZLWKRQHKDOIRIWKHZDOOOHQJWK'
GLVSODFHG SLHU SURYLGHV WKH UHVWRULQJ VKHDU RU $3O\ZRRGVKHDWKHGVKHDUZDOOV3O\ZRRG
URFNLQJVKHDUFDSDFLW\7KHHIIHFWLYHOHYHUDUP VKHDWKHGVKHDUZDOOVPD\EH XVHGWR UHVLVWODWHUDO
RIWKHD[LDOORDGVRQWKHHQGVRIWKHSLHULVDERXW IRUFHV IRU EXLOGLQJV ZLWK IOH[LEOH GLDSKUDJPV
SHUFHQWRIWKHSLHUZLGWK7KLVUHVWRULQJIRUFH
DQDO\]HGDFFRUGLQJWRSURYLVLRQVRI6HFWLRQ$
LVDVWUHQJWKOLPLWVWDWH
™ 5RFNLQJFRQWUROOHGPRGH:KHQWKHURFNLQJ 3O\ZRRGVKHDWKHGVKHDUZDOOVPD\QRWEHXVHGWR
VKHDU FDSDFLW\ RI HDFK LQGLYLGXDO SLHU LV OHVV VKDUHODWHUDOIRUFHVZLWKRWKHUPDWHULDOVDORQJWKH
WKDQWKDW RISLHU¶VVKHDUFDSDFLW\WKH SLHUZLOO VDPHOLQHRIUHVLVWDQFH
URWDWH RU URFN DV D ULJLG EORFN DQG KDYH D ™ 6KHDWKHGOLJKWIUDPHVKHDUZDOOVPD\EHXVHG
VWDEOH G\QDPLF EHKDYLRU ,Q WKLV FDVH WKH DV VKHDU ZDOOV LQ EXLOGLQJV ZLWK IOH[LEOH
FDSDFLW\ RI WKH ZDOO FRQVLVWLQJ RI D VHULHV RI GLDSKUDJPVLQFRQIRUPLW\ZLWKWKHUHVWULFWLRQVLQ
SLHUVLVWKHVXPRIWKHURFNLQJVKHDUFDSDFLWLHV WKH 6%&  7KHVH VKHDWKHG ZDOOV FDQQRW
RI HDFK SLHU DQG HDFK SLHU LV ORDGHG ZLWK D VKDUHODWHUDOIRUFHVZLWKRWKHUPDWHULDOVLQWKH
SRUWLRQ RI WKH WRWDO EDVH VKHDU 7KH URFNLQJ OLQHRIWKHVKHDWKHGOLJKWIUDPHZDOOV

6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

$&RPELQDWLRQVRIYHUWLFDOHOHPHQWV GLUHFWO\WRURRIRUIORRUIUDPLQJDQGZKHUHDEXWWLQJ
PDVRQU\ZDOOVVKDOOHLWKHUEHDQFKRUHGWRWKHZDOOV
$ /DWHUDOIRUFH GLVWULEXWLRQ
DWDPD[LPXPVSDFLQJRIPRUEHUHPRYHG
/DWHUDO IRUFHV VKDOO EH GLVWULEXWHG DPRQJ WKH
YHUWLFDOUHVLVWLQJ HOHPHQWV LQ SURSRUWLRQ WR WKHLU ™ 850ZDOOVDUHDQFKRUHGWRDOOURRIVDQGIORRUV
UHODWLYH ULJLGLWLHV H[FHSW WKDW PRPHQWUHVLVWLQJ DQGWRFHLOLQJVLQFHUWDLQFDVHV,IWKHFHLOLQJLV
IUDPHVVKDOOFRPSO\ZLWK6HFWLRQ$ IRUFHG WR GLVSODFH ZLWK WKH URRI GLDSKUDJP E\
H[LVWLQJZRRGWUXVVLQJWKHDQFKRUVKRXOGDOVR
™ 7KH GLVWULEXWLRQ RI WKH ODWHUDO IRUFH VKRXOG EH EHDWWKHFHLOLQJOHYHO7KH850ZDOOLVIRUFHG
EDVHGRQUHDOLVWLFFDOFXODWLRQVRIVWLIIQHVV7KH WRUHPDLQYHUWLFDOZLWKLQWKHGHSWKRIWKHWUXVV
FRPSUHVVLYHPRGXOXVRIXQUHLQIRUFHGEULFNKDV DQG WKH IOH[XUDO FUDFN ZLOO RFFXU DW WKH FHLOLQJ
EHHQGHWHUPLQHGE\WHVWLQJWRKDYHYDOXHVYDU\ OHYHO $ GHSWK RI WUXVV WKDW WULJJHUV FHLOLQJ
IURP03DWR03D(IIHFWLYHPRGXOLRI DQFKRUDJH KDV QRW EHHQ GHILQHG (QJLQHHULQJ
UHLQIRUFHG FRQFUHWH DQG PDVRQU\ VKHDU ZDOOV MXGJPHQW VKRXOG EH XVHG WR GHWHUPLQH DQ
YDU\IURPWRSHUFHQWRIXQFUDFNHGPRGXOL DFFHSWDEOHGHSWKRIWKHURRIWUXVVHVQRWKDYLQJ
$ VSHFLDO FDVH LV JLYHQ LQ 6HFWLRQ  IRU DQFKRUDJHDWWKHFHLOLQJOHYHO
DVVLJQPHQW RI ODWHUDO ORDGV UHJDUGOHVV RI ™ &HLOLQJ V\VWHPV RI VXEVWDQWLDO ZHLJKW DFW DV
UHODWLYHVWLIIQHVV ORDGLQJRQWKHZDOOV7KHWUDQVIHURIWKHFHLOLQJ
$ 0RPHQWUHVLVWLQJ IUDPHV ZHLJKWWRWKHVKHDUZDOOFRXOGEHPDGHE\WKH
GLDSKUDJPDERYHDQGLWVVKHDUFRQQHFWLRQRU
0RPHQWUHVLVWLQJIUDPHVVKDOOQRWEHXVHGZLWKDQ
E\ DQ LQGHSHQGHQW VKHDU FRQQHFWLRQ DQG
XQUHLQIRUFHG PDVRQU\ ZDOO LQ D VLQJOH OLQH RI GLDSKUDJPDWWKHFHLOLQJOHYHO
UHVLVWDQFH XQOHVV WKH ZDOO KDV SLHUV WKDW KDYH
DGHTXDWH VKHDU FDSDFLW\ WR VXVWDLQ URFNLQJ LQ $ $QFKRU UHTXLUHPHQWV  $QFKRUV
DFFRUGDQFH ZLWK 6HFWLRQ $ 7KH IUDPHV VKDOOFRQVLVWRIEROWVLQVWDOOHGWKURXJKWKHZDOODV
VKDOOEHGHVLJQHGLQDFFRUGDQFHZLWKWKH6%& VSHFLILHGLQ7DEOH$(RUDQDSSURYHGHTXLYDOHQW
WRFDUU\SHUFHQWRIWKHODWHUDOIRUFHVWULEXWDU\WR DW D PD[LPXPDQFKRU VSDFLQJRI  P $OO ZDOO
WKDWOLQHRIUHVLVWDQFHDVGHWHUPLQHGIURP(TXDWLRQ DQFKRUVVKDOOEHVHFXUHGWRWKHMRLVWVWRGHYHORSWKH
$ 7KH VWRU\ GULIW UDWLR VKDOO EH OLPLWHG WR UHTXLUHGIRUFHV
 ™ :KHQ H[LVWLQJ ZDOO DQFKRUV KDYH EHHQ WHVWHG
™ 8VH RI D FRPELQDWLRQ RI PRPHQW IUDPH DQG WRFRQILUPWKHDGHTXDF\RIWKHHPEHGGHGHQG
850VKHDUZDOOLQWKHVDPHOLQHRIUHVLVWDQFH WKH FRQQHFWLRQ RI WKH H[LVWLQJ DQFKRU WR WKH
LVSURKLELWHGXQOHVVWKHSLHUVLQWKHZDOOKDYHD ZRRG IUDPLQJ VKDOO EH DQDO\]HG E\ UDWLRQDO
URFNLQJ VKHDU FDSDFLW\ WKDW H[FHHGV WKH SLHU HQJLQHHULQJPHWKRGVIRULWVDGHTXDF\
VKHDU FDSDFLW\ VHH (TXDWLRQV $ DQG $ $ 0LQLPXP ZDOO DQFKRUDJH
 ,I WKLV FRQGLWLRQ LV PHW D PRPHQW IUDPH $QFKRUDJHRIPDVRQU\ZDOOVWRHDFKIORRURUURRI
PD\ EH XVHG ZLWK  SHUFHQW RI WKH ORDG
VKDOOUHVLVWDPLQLPXPIRUFHGHWHUPLQHGDV6'6
DVVLJQHG WR LW 7KH PLQLPXP VWLIIQHVV RI WKH
PRPHQWIUDPHVKDOOEHWZLFHWKDWVSHFLILHGIRU WLPHVWKHWULEXWDU\ZHLJKWRUN1PZKLFKHYHULV
RWKHU PRPHQW IUDPHV WKDW DUH XVHG WR UHVLVW JUHDWHUDFWLQJQRUPDOWRWKHZDOODWWKHOHYHORIWKH
ODWHUDO ORDGV VHH 6HFWLRQ $ 7KLV IORRURUURRI([LVWLQJZDOODQFKRUVLIXVHGPXVW
VHFWLRQ VKRXOG QRW EH LQWHUSUHWHG WR EH PHHW WKH UHTXLUHPHQWV RI WKLV FKDSWHU RU PXVW EH
DSSOLFDEOHWRDPRPHQWIUDPHXVHGLQWKHRSHQ XSJUDGHG
IURQWRID850EXLOGLQJZKHUHWKHSLHUVGRQRW
KDYH VLJQLILFDQW VWLIIQHVV 7KHVH PDVRQU\ $ $QFKRUVDW FRUQHUV $W WKHURRI
FROXPQV PD\ VXSSRUW OLQWHOV WKDW KDYH D DQG IORRU OHYHOV ERWK VKHDU DQG WHQVLRQ DQFKRUV
VXEVWDQWLDO ORDG 7KH HQJLQHHU VKRXOG DVVHVV VKDOOEHSURYLGHGZLWKLQPPKRUL]RQWDOO\IURP
WKH VWDELOLW\ RI WKH PDVRQU\EHDULQJ VXUIDFH WKHLQVLGHRIWKHFRUQHUVRIWKHZDOOV
ZKHQWKHGHVLJQGULIWRIWKHRSHQIURQWRFFXUV
™ 7KHHQGSLHULQDV\VWHPRISLHUVKDVDGGLWLRQDO
'(7$,/('6<67(0 VWLIIQHVVGXHWRWKHHIIHFWRIWKHLQWHUVHFWLQJZDOO
'(6,*15(48,5(0(176 DFWLQJ DV D IODQJH 7KH SODFHPHQW RI WKH ILUVW
VKHDUDQFKRUZLWKLQPPRIWKHHQGRIWKH
$:DOODQFKRUDJH ZDOODLGVLQWUDQVIHUULQJWKHVKHDUORDGIURPWKH
GLDSKUDJPWRWKHFRUQHUSLHU
$ $QFKRU ORFDWLRQV  8QUHLQIRUFHG
PDVRQU\ ZDOOV VKDOO EH DQFKRUHG DW WKH URRI DQG $ 'LDSKUDJP VKHDU WUDQVIHU %ROWV
IORRUOHYHOVDVUHTXLUHGLQ6HFWLRQ$&HLOLQJV WUDQVPLWWLQJ VKHDU IRUFHV VKDOO KDYH D PD[LPXP
RI SODVWHU RU VLPLODU PDWHULDOVZKHQ QRW DWWDFKHG EROWVSDFLQJRIPDQGVKDOOKDYHQXWVLQVWDOOHG

6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

RYHUPDOOHDEOHLURQRUSODWHZDVKHUVZKHQEHDULQJ LQGHSHQGHQWO\RIUHTXLUHGZDOODQFKRUV+RUL]RQWDO
RQZRRGDQGKHDY\FXWZDVKHUVZKHQEHDULQJRQ VSDFLQJ RI YHUWLFDO EUDFLQJ PHPEHUV VKDOO QRW
VWHHO H[FHHG RQHKDOI RI WKH XQVXSSRUWHG KHLJKW RI WKH
ZDOORUP'HIOHFWLRQRIVXFKEUDFLQJPHPEHUVDW
$&ROOHFWRUV  &ROOHFWRU HOHPHQWV VKDOO EH
GHVLJQORDGVVKDOOQRWH[FHHGRQHWHQWKRIWKHZDOO
SURYLGHGWKDWDUHFDSDEOHRIWUDQVIHUULQJWKHVHLVPLF
WKLFNQHVV
IRUFHVRULJLQDWLQJLQRWKHUSRUWLRQVRIWKHEXLOGLQJ
WR WKH HOHPHQW SURYLGLQJ WKH UHVLVWDQFH WR WKRVH ™ 7KH YHUWLFDO PHPEHU VKDOO EH DWWDFKHG WR WKH
IRUFHV GLDSKUDJPV 7KH UHDFWLRQ VKDOO QRW EH
WUDQVIHUUHG LQWR WKH 850 ZDOO DQG WR LWV
™ 7KH WUDQVIHU RI VKHDU IRUFHV DW WKH HGJH RI D DQFKRUDJH V\VWHP 7KH KRUL]RQWDO VSDFLQJ RI
GLDSKUDJP WR WKH VKHDU UHVLVWLQJ HOHPHQWV DW WKHZDOOEUDFHVLVOLPLWHGWRDGLVWDQFHHTXDOWR
WKDWHGJHPD\UHTXLUHDFROOHFWRUDWWKHHGJHRI RQHKDOIRIWKHZDOOKHLJKWLQRUGHUWRSURYLGHD
WKHGLDSKUDJPIRUGLVWULEXWLRQRIWKHGLDSKUDJP XQLIRUPO\GLVWULEXWHGUHVLVWDQFHWRRXWRISODQH
VKHDUWRWKHHOHPHQWVRIWKHVKHDUZDOO,IWKH GLVSODFHPHQWV 7KLV EUDFLQJ GRHV QRW SUHYHQW
VKHDU ZDOO LV WKH IXOO GHSWK RI WKH GLDSKUDJP WHQVLRQ FUDFNLQJ RI WKH 850 ZDOO 7KH EUDFH
WKHUH ZLOO EH QR QHHG RI D FROOHFWRU DV WKH VKRXOG EH DQFKRUHG WR WKH ZDOO ZLWK D ZDOO
XQLIRUPO\ GLVWULEXWHG VKHDU ORDG RI WKH DQFKRU DW WKH FHQWHU RI WKH ZDOO KHLJKW DV D
GLDSKUDJP ZRXOG EH XQLIRUPO\ UHVLVWHG DORQJ PLQLPXP7KHGHVLJQORDGLQJRIWKHZDOOEUDFH
WKH OHQJWK RI WKH VKHDU ZDOO ,I WKH VKHDU ZDOO LVGHWHUPLQHGE\WKHUHTXLUHPHQWVRIWKH 6%&
VWUHQJWKDQGVWLIIQHVVZHUHDWRQHHQGRIWKDW DQGWKHVWLIIQHVVRIWKHZDOOEUDFHPXVWEH
OLQHRIUHVLVWDQFHWKHFROOHFWRUZLOODFFXPXODWH VXIILFLHQWWRPHHWWKHGHIOHFWLRQOLPLWDWLRQV
ORDGIURPWKHGLDSKUDJPDQGDFWDVDWLHWRWKH
VKHDU ZDOO HOHPHQW 7KH FDOFXODWHG FROOHFWRU $ ,QWHUPHGLDWH ZDOO EUDFLQJ  7KH
IRUFH PD\ EH UHVLVWHG E\ H[LVWLQJ RU QHZ ZDOO KHLJKW PD\ EH UHGXFHG E\ EUDFLQJ HOHPHQWV
HOHPHQWV 7KH UHODWLYH ULJLGLW\ RI QHZ DQG FRQQHFWHGWRWKHIORRURUURRI+RUL]RQWDOVSDFLQJ
H[LVWLQJ HOHPHQWV VKRXOG EH FRQVLGHUHG LQ RIWKHEUDFLQJHOHPHQWVDQGZDOODQFKRUVVKDOOEHDV
DSSRUWLRQLQJORDGVWRWKHYDULRXVHOHPHQWV UHTXLUHGE\GHVLJQEXWVKDOOQRWH[FHHGPRQ
™ $SLHUDGMDFHQWWRDFRUQHURIWZRLQWHUVHFWLQJ FHQWHU %UDFLQJ HOHPHQWV VKDOO EH GHWDLOHG WR
VKHDUZDOOVLVPXFKVWLIIHU WKDQWKH XVXDOSLHU
PLQLPL]HWKHKRUL]RQWDOGLVSODFHPHQWRIWKHZDOOE\
DQDO\VLV LQGLFDWHV 7KH HIIHFW RI WKH IODQJH
ZKLFK LV WKH RWKHU ZDOO DURXQG WKH FRUQHU LV WKHYHUWLFDOGLVSODFHPHQWRIWKHIORRURUURRI
VLJQLILFDQW ZKHQ WKH IODQJH LV LQ WHQVLRQ 7KH ™ %UDFHVWKDWH[WHQGEHWZHHQIORRUVRUURRIVFDQ
VWLIIQHVVRIWKLVSLHUPD\FDXVHWKHVSDQGUHOWR UHGXFHWKHXQEUDFHGKHLJKWRIWKH850ZDOO$
KDYHDVLJQLILFDQWFROOHFWRUVWUHVV%HFDXVHRI KRUL]RQWDOJLUWDQFKRUHGRQWKHIDFHRIWKHZDOO
WKLV LQFUHDVHG FROOHFWRU IRUFH D PLQLPXP FDQEHXVHGWRGLVWULEXWHWKHZDOODQFKRUIRUFH
UHTXLUHGVSDFLQJRIWKHILUVWVKHDUEROWIURPWKH WREUDFHVWKDWDUHVSDFHG JUHDWHUWKDQ  P
FRUQHU LV VSHFLILHG WR PLQLPL]H WKH FROOHFWRU 9HUWLFDO GLVSODFHPHQW RI WKH DQFKRUDJH RI WKH
VWUHVV LQ WKH VSDQGUHO DERYH WKH RSHQLQJ EUDFHWRWKHIORRUDQGURRIZLOOFDXVHDQRXWZDUG
QHDUHVWWRWKHEXLOGLQJFRUQHU GLVSODFHPHQW RU EHQGLQJ VWUHVV LQ WKH 850
ZDOO 7KH GHIOHFWLRQ RI WKH EUDFH DQFKRUDJH
$7LHVDQGFRQWLQXLW\7LHVDQGFRQWLQXLW\
SRLQW FDXVHG E\ OLYH ORDGLQJ VKDOO EH
VKDOOFRQIRUPWRWKHUHTXLUHPHQWVRIWKH6%& LQYHVWLJDWHGDQGPLQLPL]HG
$:DOOEUDFLQJ $3DUDSHWV  3DUDSHWV DQG H[WHULRU ZDOO
$ *HQHUDO:KHUHDZDOOKHLJKWWR DSSHQGDJHVQRWFRQIRUPLQJWRWKLVFKDSWHUVKDOOEH
WKLFNQHVVUDWLRH[FHHGVWKHVSHFLILHGOLPLWVWKHZDOO UHPRYHGRUVWDELOL]HGRUEUDFHGWRHQVXUHWKDWWKH
PD\ EH ODWHUDOO\ VXSSRUWHG E\ YHUWLFDO EUDFLQJ SDUDSHWV DQG DSSHQGDJHV UHPDLQ LQ WKHLU RULJLQDO
PHPEHUVSHU6HFWLRQ$RUE\UHGXFLQJWKH SRVLWLRQV
ZDOOKHLJKWE\EUDFLQJSHU6HFWLRQ$ 7KHPD[LPXPKHLJKWRIDQXQEUDFHGXQUHLQIRUFHG
PDVRQU\SDUDSHWDERYHWKHORZHURIHLWKHUWKHOHYHO
™ 1RUPDO ZDOOV ZLWK H[FHVVLYH KHLJKWWR
WKLFNQHVV UDWLRV PD\ EH VXSSRUWHG E\ DQ
RI WHQVLRQDQFKRUVRU WKH URRI VKHDWKLQJVKDOOQRW
DGGLWLRQDO OLQH RI ZDOO DQFKRUV WKDW UHGXFH WKH H[FHHGWKHKHLJKWWRWKLFNQHVVUDWLRVKRZQLQ7DEOH
XQEUDFHG KHLJKW RU E\ YHUWLFDO PHPEHUV WKDW $) ,I WKH UHTXLUHG SDUDSHW KHLJKW H[FHHGV WKLV
VXSSRUWWKHZDOOZKHQFUDFNHG PD[LPXPKHLJKWDEUDFLQJV\VWHPGHVLJQHGIRUWKH
IRUFHVGHWHUPLQHGLQDFFRUGDQFHZLWKWKH6%&
$ 9HUWLFDO EUDFLQJ PHPEHUV VKDOO VXSSRUW WKH WRS RI WKH SDUDSHW 3DUDSHW
9HUWLFDOEUDFLQJPHPEHUVVKDOOEHDWWDFKHGWRIORRU
DQG URRI FRQVWUXFWLRQ IRU WKHLU GHVLJQ ORDGV

6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

FRUUHFWLYHZRUNPXVWEHSHUIRUPHGLQFRQMXQFWLRQ VDPSOHRIWLHVQRWOHVV WKDQIRXUIRU

ZLWKWKHLQVWDOODWLRQRIWHQVLRQURRIDQFKRUV LQVSHFWLRQE\WKHEXLOGLQJRIILFLDO
7KHPLQLPXPKHLJKWRIDSDUDSHWDERYHDQ\ZDOO ™ 8QERQGHG EULFN YHQHHU DQG YHQHHU SRRUO\
DQFKRUVKDOOEHPP ERQGHGZLWKDQJOHGEULFNVRUVSRUDGLFIODWPHWDO
([FHSWLRQ  ,I D UHLQIRUFHG FRQFUHWH EHDP LV WLHVWRWKH850VWUXFWXUDOZDOOKDYHEHHQIRXQG
SURYLGHGDWWKHWRSRIWKHZDOOWKHPLQLPXPKHLJKW WRGHWDFKIURPWKHVWUXFWXUDOZDOOZKHQVKDNHQ
ZLWKWRSHUFHQWRIJUDYLW\JURXQGPRWLRQ
DERYHWKHZDOODQFKRUPD\EHPP
7KH H[FHSWLRQ LQ WKLV VHFWLRQ ZDV WDNHQ IURP
™ $PD[LPXPKHLJKWRIXQEUDFHGSDUDSHWVDERYH WKH/RV$QJHOHV%XLOGLQJ&RGH
WKH ZDOO DQFKRUDJH SRLQWV LV VSHFLILHG 7KLV
KHLJKWRIXQUHLQIRUFHGZDOOZLOOEHG\QDPLFDOO\ $1RQVWUXFWXUDO PDVRQU\ ZDOOV
VWDEOHEXWPD\VOLGHODWHUDOO\E\WKHGLDSKUDJP 8QUHLQIRUFHG PDVRQU\ ZDOOV WKDW FDUU\ QR GHVLJQ
UHVSRQVH$PLQLPXPKHLJKWRISDUDSHWDERYH YHUWLFDORUODWHUDOORDGVDQGWKDWDUHQRWUHTXLUHGE\
WKH ZDOO DQFKRUDJH LV VSHFLILHG DV LWV WHQVLRQ WKH GHVLJQ WR EH SDUW RI WKH ODWHUDOIRUFHUHVLVWLQJ
FDSDFLW\LVGHSHQGHQWRQWKHD[LDOVWUHVVLQWKH V\VWHP VKDOO EH DGHTXDWHO\ DQFKRUHG WR QHZ RU
ZDOODWWKHOHYHORIDQFKRUDJH$QH[FHSWLRQLV H[LVWLQJ VXSSRUWLQJ HOHPHQWV 7KH DQFKRUV DQG
SURYLGHGIRUDPLQLPXPKHLJKWRIPP7KLV HOHPHQWV VKDOO EH GHVLJQHG IRU WKH RXWRISODQH
H[FHSWLRQ LV QHFHVVDU\ DV LW ZDV VSHFLILHG IRU IRUFHV VSHFLILHG LQ WKH 6%&  7KH KHLJKW RU
VWDQGDUGGHWDLOVXVHGIRUSDUDSHWULVNUHGXFWLRQ OHQJWKWRWKLFNQHVV UDWLR EHWZHHQ VXFK VXSSRUWLQJ
SULRU WR WKH GHYHORSPHQW RI FRPSUHKHQVLYH
HOHPHQWVIRUVXFKZDOOVVKDOOQRWH[FHHGQLQH
UHTXLUHPHQWVIRUHDUWKTXDNHULVNUHGXFWLRQ,WLV
QRW D UHFRPPHQGHG GHWDLO DQG UHLQIRUFHG ™ $QRQVWUXFWXUDOZDOOPXVWEHLVRODWHGIURPWKH
FRQFUHWHEHDPVPD\VOLGHODWHUDOO\RQWKHWRS VWUXFWXUH RQ WKUHH VLGHV ,I WKH ZDOO LV QRW
RI WKH ZDOO E\ DQFKRUDJH IRUFHV +RZHYHU LVRODWHG IURP WKH VWUXFWXUH LW PXVW EH
IDLOXUH RI WKH DQFKRUDJH V\VWHP KDV QRW EHHQ FRQVLGHUHG DV D VKHDU ZDOO DQG RU EHDULQJ
REVHUYHG PDVRQU\ ZDOO 7KH DOORZDEOH KHLJKWWR
WKLFNQHVVUDWLRLVUHGXFHGIURPWKDWDOORZHGIRU
$9HQHHU D RQHVWRU\ EHDULQJ ZDOO EHFDXVH YHUWLFDO
ORDGLQJ LQFUHDVHV WKH VWDELOLW\ RI DQ
 9HQHHU VKDOO EH DQFKRUHG ZLWK DSSURYHG XQUHLQIRUFHG PDVRQU\ ZDOO 7KH KHLJKWWR
DQFKRUWLHVFRQIRUPLQJWRWKHUHTXLUHGGHVLJQ WKLFNQHVV UDWLR PD\ QRW H[FHHG  RU WKH
FDSDFLW\ VSHFLILHG LQ WKH EXLOGLQJ FRGH DQG OLPLWDWLRQVRI6HFWLRQ$
VKDOOEHSODFHGDWDPD[LPXPVSDFLQJRI
$7UXVVDQGEHDPVXSSRUWV:KHUHWUXVVHV
PPZLWKDPD[LPXPVXSSRUWHGDUHDRI
DQGEHDPVRWKHUWKDQUDIWHUVRUMRLVWVDUHVXSSRUWHG
P
RQPDVRQU\LQGHSHQGHQWVHFRQGDU\FROXPQVVKDOO
([FHSWLRQ([LVWLQJDQFKRUWLHVIRUDWWDFKLQJEULFN EHLQVWDOOHGWRVXSSRUWYHUWLFDOORDGVRIWKHURRIRU
YHQHHU WR EULFN EDFNLQJ PD\ EH DFFHSWDEOH IORRUPHPEHUV
SURYLGHGWKHWLHVDUHLQJRRGFRQGLWLRQDQGFRQIRUP
([FHSWLRQ  6HFRQGDU\ VXSSRUWV DUH QRW UHTXLUHG
WR WKH IROORZLQJ PLQLPXP VL]H DQG PDWHULDO
ZKHUH6'LVOHVVWKDQJ
UHTXLUHPHQWV
([LVWLQJ YHQHHU DQFKRU WLHV PD\ EH FRQVLGHUHG ™ &RQIRUPDQFHRIWKH850ZDOOZLWKWKHKHLJKW
DGHTXDWHLIWKH\DUHRIFRUUXJDWHGJDOYDQL]HGLURQ WRWKLFNQHVV OLPLWDWLRQV GRHV QRW LPSO\ WKDW
VWULSV QRW OHVV WKDQ  PP LQ ZLGWK  PP LQ WKHVH ZDOOV ZLOO EH XQFUDFNHG DQG GHIRUP DV
OHQJWKDQGPPLQWKLFNQHVVRUWKHHTXLYDOHQW IOH[XUDOEHDPV,WLVKLJKO\OLNHO\WKDWDFUDFNZLOO
RFFXUDWHDFKDQFKRUDJHSRLQWDQGLQWKHFHQWHU
 SDUW RI WKH ZDOO ZKHUH WKH GHVLJQ OHYHO RI
 7KHORFDWLRQDQGFRQGLWLRQRIH[LVWLQJYHQHHU LQWHQVLW\ RI VKDNLQJ RFFXUV 7KHVH EORFNV RI
DQFKRUWLHVVKDOOEHYHULILHGDVIROORZV ZDOOV ZLOO URWDWH RQ WKHVH FUDFNV EXW ZLOO EH
G\QDPLFDOO\VWDEOH7KHURWDWLRQDQJOHEHWZHHQ
 $Q DSSURYHG WHVWLQJ ODERUDWRU\ VKDOO D EORFN DERYH DQG EHORZ D ZDOO DQFKRUDJH
YHULI\WKH ORFDWLRQDQG VSDFLQJ RI WKH FRXOG EH JUHDWHU WKDQ  GHJUHHV $ WUXVV RU
WLHV DQG VKDOO VXEPLW D UHSRUW WR WKH EHDP WKDW KDV DQ XQ\LHOGLQJ EHDULQJ VXUIDFH
EXLOGLQJRIILFLDOIRUDSSURYDODVSDUWRI FDQORDGWKHHGJHRILWVEHDULQJRQWKHPDVRQU\
WKHVWUXFWXUDODQDO\VLV DQGFDXVHVSDOOLQJRIWKHEHDULQJVXUIDFH7KH
VHFRQGDU\VXSSRUWVHUYHVWKHVDPHSXUSRVHDV
 7KHYHQHHULQDVHOHFWHGDUHDVKDOOEH
VKRULQJ WKDW ZRXOG EH LQVWDOOHG DIWHU WKH
UHPRYHG WR H[SRVH D UHSUHVHQWDWLYH HDUWKTXDNH$IRXQGDWLRQLVQRWUHTXLUHGIRUWKH

6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

VHFRQGDU\VXSSRUWDQGWKHVHFRQGDU\VXSSRUW
ORDGVQHHGQRWEHDFFXPXODWLYHLQDPXOWLVWRU\
EXLOGLQJ 7KH H[FHSWLRQ WR WKH UHTXLUHPHQW IRU
VHFRQGDU\ VXSSRUW RI YHUWLFDO ORDGV RI URRI RU
IORRU PHPEHUV LV SHUPLWWHG IRU ORZHU VHLVPLF
KD]DUG ]RQHV 7KH H[FHSWLRQ LV DSSOLFDEOH
ZKHUH6'DVGHILQHGDQGPDSSHGLQWKH6%&
LVJRUOHVV
$ $GMDFHQW EXLOGLQJV :KHUH
HOHPHQWV RI DGMDFHQW EXLOGLQJV GR QRW KDYH D
VHSDUDWLRQRIDWOHDVWPPWKHDOORZDEOHKHLJKW
WRWKLFNQHVV UDWLRV IRU ³DOO RWKHU EXLOGLQJV´ SHU
7DEOH $% VKDOO EH XVHG LQ WKH GLUHFWLRQ RI
FRQVLGHUDWLRQ
™ 7KH LQFUHDVHV LQ WKH DOORZDEOH KHLJKWWR
WKLFNQHVVUDWLRVRI850ZDOOVZKHQFURVVZDOOV
DUH SUHVHQW LQ HDFK VWRU\ ZHUH SUHGLFDWHG RQ
DOORZLQJ WKH GLDSKUDJPV WR KDYH G\QDPLF
GLVSODFHPHQWV WKDW FDXVH QRQOLQHDU
GLVSODFHPHQWV LQ WKH FURVVZDOOV DQG WKH
GLDSKUDJP RU LQ WKH GLDSKUDJP DORQH )LJXUH
$ ZDV SORWWHG E\ QRQOLQHDU DQDO\VLV XVLQJ
JURXQG PRWLRQV VFDOHG WR J HIIHFWLYH SHDN
DFFHOHUDWLRQ 7KH DFFHSWDEOH GHPDQG
FDSDFLW\VSDQ ERXQGDU\ LV HTXLYDOHQW WR 
PP RI GLVSODFHPHQW RI WKH FHQWHU RI WKH
GLDSKUDJPUHODWLYHWRWKHVKHDUZDOOVDWWKHHQG
RIWKHVSDQ,IDQDGMDFHQWEXLOGLQJUHVWULFWVWKH
GLDSKUDJP GLVSODFHPHQW WKH LQFUHDVH LQ WKH
DOORZDEOH KHLJKWWRWKLFNQHVV UDWLR LV QRW
DSSOLFDEOH
:$//62)81%851('
&/$<$'2%(256721(0$6215<
$*HQHUDO:DOOVRIXQEXUQHGFOD\DGREHRU
VWRQH PDVRQU\ FRQVWUXFWLRQ VKDOO FRQIRUP WR WKH
IROORZLQJ

 :DOOV RI XQEXUQHG FOD\ DGREH RU VWRQH

PDVRQU\VKDOOQRWH[FHHGDKHLJKWRUOHQJWK
WRWKLFNQHVVUDWLRVSHFLILHGLQ7DEOH$*
 $GREHPD\EHDOORZHGDPD[LPXPYDOXHRI
 N3D IRU VKHDU XQOHVV KLJKHU YDOXHV DUH
MXVWLILHGE\WHVW
 0RUWDUIRUUHSRLQWLQJPD\EHRIWKHVDPHVRLO
FRPSRVLWLRQDQGVWDELOL]DWLRQDVWKHEULFNLQ
OLHXRIFHPHQWPRUWDU


6%&&& 

&+$37(5 $ ²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

™ %LEOLRJUDSK\ $7& (YDOXDWLQJ WKH 6HLVPLF 5HVLVWDQFH RI

([LVWLQJ %XLOGLQJV 5HSRUW $7& 5HGZRRG
7KHIROORZLQJUHVRXUFHPDWHULDOVZHUHXVHGLQWKH
&LW\&$$SSOLHG7HFKQRORJ\&RXQFLO
SUHSDUDWLRQRIWKHFRPPHQWDU\IRUWKLVFKDSWHU
,&%2 WKURXJK  8QLIRUP &RGH IRU
RIWKHFRGH
%XLOGLQJ &RQVHUYDWLRQ :KLWWLHU &$
$%. 0HWKRGRORJ\ IRU 0LWLJDWLRQ RI 6HLVPLF
,QWHUQDWLRQDO&RQIHUHQFH RI%XLOGLQJ2IILFLDOV
+D]DUGV LQ ([LVWLQJ 8QUHLQIRUFHG 0DVRQU\
±
%XLOGLQJV 7KH 0HWKRGRORJ\ 7RSLFDO 5HSRUW
,&%2 *XLGHOLQHV IRU WKH 6HLVPLF 5HWURILW RI
1DWLRQDO6FLHQFH)RXQGDWLRQ&RQWUDFW1R
([LVWLQJ%XLOGLQJV:KLWWLHU&$,QWHUQDWLRQDO
16)&3)5 :DVKLQJWRQ '&
&RQIHUHQFHRI%XLOGLQJ2IILFLDOV
$SSOLHG 6FLHQFH DQG 5HVHDUFK $SSOLFDWLRQV
3UHVHUYDWLRQ %ULHI  5HSRLQWLQJ 0RUWDU -RLQWV LQ

+LVWRULF 0DVRQU\ %XLOGLQJV 5REHUW & 0DFN
$%. *XLGHOLQHV IRU WKH (YDOXDWLRQ RI +LVWRULF
)$,$ DQG -RKQ 3 6SHZHLN IRU WKH 1DWLRQDO
%ULFN0DVRQU\%XLOGLQJVLQ(DUWKTXDNH+D]DUG
3DUN 6HUYLFH 8QLWHG 6WDWHV *RYHUQPHQW
=RQHV $%. $ -RLQW 9HQWXUH )XQGHG E\ WKH
2FWREHU
'HSDUWPHQW RI 3DUNV DQG 5HFUHDWLRQ RI WKH
71  7HFKQLFDO 1RWH RQ 0DLQWHQDQFH RI %ULFN
6WDWH RI &DOLIRUQLD DQG WKH 1DWLRQDO 3DUN
0DVRQU\SS0RUWDU-RLQW5HSDLU5HVWRQ
6HUYLFH 8QLWHG 6WDWHV *RYHUQPHQW -DQXDU\
9$7KH%ULFN,QGXVWU\$VVRFLDWLRQ'HFHPEHU


$7&7HQWDWLYH3URYLVLRQVIRUWKH'HYHORSPHQW
RI 6HLVPLF 5HJXODWLRQV IRU %XLOGLQJV 5HSRUW

$7&  5HGZRRG &LW\ &$ $SSOLHG
7HFKQRORJ\&RXQFLO

6%&&& 

&+$37(5 $²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

7$%/(6$1'),*85(62)&+$37(5$
7$%/($$
(/(0(1765(*8/$7('%<7+,6&+$37(5
%8,/',1*(/(0(176 J”SD J J”SD J SD •J
3DUDSHWV ; ; ;
:DOOVDQFKRUDJH ; ; ;
:DOOVh/tUDWLRV  ; ;
:DOOVLQSODQHVKHDU  ; ;
D   ;
'LDSKUDJPV 
'LDSKUDJPVVKHDUWUDQVIHU  ; ;
E   ;
'LDSKUDJPVGHPDQGFDSDFLW\UDWLRV 
D $SSOLHVRQO\WREXLOGLQJVGHVLJQHGDFFRUGLQJWRWKHJHQHUDOSURFHGXUHVRI6HFWLRQ$
E $SSOLHVRQO\WREXLOGLQJVGHVLJQHGDFFRUGLQJWRWKHVSHFLDOSURFHGXUHVRI6HFWLRQ$

7$%/($%
$//2:$%/(9$/8(2)+(,*+7727+,&.1(665$7,22)815(,1)25&('0$6215<
:$//6
SD•J SD!J
J”SD %8,/',1*6:,7+
:$//7<3(6 J”SDJ $//27+(5
J
&5266:$//6D %8,/',1*6
:DOOVRIRQHVWRU\ EF
    
EXLOGLQJV
)LUVWVWRU\ZDOORI
   
PXOWLVWRU\EXLOGLQJ
:DOOVLQWRSVWRU\RI EF
    
PXOWLVWRU\EXLOGLQJ
$OORWKHUZDOOV    

D $SSOLHVWRWKHVSHFLDOSURFHGXUHVRI6HFWLRQ$RQO\6HH6HFWLRQ$IRURWKHUUHVWULFWLRQV
E 7KLV YDOXH RI KHLJKWWRWKLFNQHVV UDWLR PD\ EH XVHG RQO\ ZKHUH PRUWDU VKHDU WHVWV HVWDEOLVK D WHVWHG PRUWDU VKHDU
VWUHQJWKvtRIQRWOHVVWKDQN3D7KLVYDOXHPD\DOVREHXVHGZKHUHWKHWHVWHGPRUWDUVKHDUVWUHQJWKLVQRWOHVV
WKDQN3DDQGZKHUHDYLVXDOH[DPLQDWLRQRIWKHFROODUMRLQWLQGLFDWHVQRWOHVVWKDQSHUFHQWPRUWDUFRYHUDJH
F :KHUHDYLVXDOH[DPLQDWLRQRIWKHFROODUMRLQWLQGLFDWHVQRWOHVVWKDQSHUFHQWPRUWDUFRYHUDJHDQGWKHWHVWHGPRUWDU
VKHDU VWUHQJWK v t LV JUHDWHU WKDQ  N3D EXW OHVV WKDQ  N3D WKH DOORZDEOH KHLJKWWRWKLFNQHVV UDWLR PD\ EH
GHWHUPLQHGE\OLQHDULQWHUSRODWLRQEHWZHHQWKHODUJHUDQGVPDOOHUUDWLRVLQGLUHFWSURSRUWLRQWRWKHWHVWHGPRUWDUVKHDU
VWUHQJWK

6%&&& 

&+$37(5 $²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

7$%/($&
+25,=217$/)25&()$&725Cp
&21),*85$7,212)0$7(5,$/6 &S

5RRIVZLWKVWUDLJKWRUGLDJRQDOVKHDWKLQJDQGURRILQJDSSOLHGGLUHFWO\WRWKHVKHDWKLQJRUIORRUVZLWK

VWUDLJKWWRQJXHDQGJURRYHVKHDWKLQJ

'LDSKUDJPVZLWKGRXEOHRUPXOWLSOHOD\HUVRIERDUGVZLWKHGJHVRIIVHWDQGEORFNHGSO\ZRRGV\VWHPV 
'LDSKUDJPVRIPHWDOGHFNZLWKRXWWRSSLQJ 
0LQLPDOZHOGLQJRUPHFKDQLFDODWWDFKPHQW 
:HOGHGRUPHFKDQLFDOO\DWWDFKHGIRUVHLVPLFUHVLVWDQFH 

7$%/($'
675(1*7+9$/8(6)25(;,67,1*0$7(5,$/6
(;,67,1*0$7(5,$/625&21),*85$7,212)0$7(5,$/6D 675(1*7+9$/8(6
5RRIV ZLWK VWUDLJKW VKHDWKLQJ DQG URRILQJ DSSOLHG N1PIRUVHLVPLFVKHDU
GLUHFWO\WRWKHVKHDWKLQJ
5RRIV ZLWK GLDJRQDO VKHDWKLQJ DQG URRILQJ DSSOLHG N1PIRUVHLVPLFVKHDU
GLUHFWO\WRWKHVKHDWKLQJ
)ORRUVZLWKVWUDLJKWWRQJXHDQGJURRYHVKHDWKLQJ N1PIRUVHLVPLFVKHDU
+RUL]RQWDOGLDSKUDJPV )ORRUV ZLWK VWUDLJKW VKHDWKLQJ DQG ILQLVKHG ZRRG N1PIRUVHLVPLFVKHDU
IORRULQJZLWKERDUGHGJHVRIIVHWRUSHUSHQGLFXODU
)ORRUV ZLWK GLDJRQDO VKHDWKLQJ DQG ILQLVKHG ZRRG N1PIRUVHLVPLFVKHDU
IORRULQJ
0HWDOGHFNZHOGHGZLWKPLQLPDOZHOGLQJF N1PIRUVHLVPLFVKHDU
0HWDOGHFNZHOGHGIRUVHLVPLFUHVLVWDQFHG N1PIRUVHLVPLFVKHDU
3ODVWHURQZRRGRUPHWDOODWK N1PIRUVHLVPLFVKHDU
3ODVWHURQJ\SVXPODWK N1PIRUVHLVPLFVKHDU
&URVVZDOOVE
*\SVXPZDOOERDUGXQEORFNHGHGJHV N1PIRUVHLVPLFVKHDU
*\SVXPZDOOERDUGEORFNHGHGJHV N1PIRUVHLVPLFVKHDU
݂௖ᇱ  03D XQOHVV RWKHUZLVH
3ODLQFRQFUHWHIRRWLQJV
([LVWLQJ IRRWLQJ ZRRG VKRZQE\WHVWV
IUDPLQJ VWUXFWXUDO VWHHO 'RXJODVILU')ZRRG 6DPHDV')1R
UHLQIRUFLQJVWHHO 5HLQIRUFLQJVWHHO Fy 03DPD[LPXP
6WUXFWXUDOVWHHO Fy 03DPD[LPXP
D 0DWHULDOPXVWEHVRXQGDQGLQJRRGFRQGLWLRQ
E 6KHDUYDOXHVRIWKHVHPDWHULDOVPD\EHFRPELQHGH[FHSWWKHWRWDOFRPELQHGYDOXHVKRXOGQRWH[FHHGN1P
F 0LQLPXPPPWKLFNVWHHOGHFNZLWKZHOGVWRVXSSRUWVVDWLVI\LQJWKHVWDQGDUGVRIWKH6WHHO'HFN,QVWLWXWH
G 0LQLPXPPPWKLFNVWHHOGHFNZLWKPPGLDPHWHUSOXJZHOGVDWDQDYHUDJHVSDFLQJQRWH[FHHGLQJPPDQG
ZLWKVLGHODSZHOGVDSSURSULDWHIRUWKHGHFNVSDQ

 

6%&&& 

&+$37(5 $²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

7$%/($(
675(1*7+9$/8(62)1(:0$7(5,$/686(',1&21-81&7,21:,7+(;,67,1*
&216758&7,21

1(:0$7(5,$/625&21),*85$7,212)0$7(5,$/6 675(1*7+9$/8(6
3O\ZRRGVKHDWKLQJDSSOLHGGLUHFWO\RYHUH[LVWLQJVWUDLJKW
+RUL]RQWDO VKHDWKLQJZLWKHQGVRISO\ZRRGVKHHWVEHDULQJRQMRLVWVRU
N1P
GLDSKUDJPV UDIWHUV DQG HGJHV RI SO\ZRRG ORFDWHG RQ FHQWHU RI
LQGLYLGXDOVKHDWKLQJERDUGV
3O\ZRRGVKHDWKLQJDSSOLHGGLUHFWO\RYHUZRRGVWXGVQR
WLPHVWKHYDOXH VSHFLILHGLQWKH 6%&
YDOXH VKRXOG EH JLYHQ WR SO\ZRRG DSSOLHG RYHU H[LVWLQJ

SODVWHURUZRRGVKHDWKLQJ
&URVVZDOOV
'U\ZDOORUSODVWHUDSSOLHGGLUHFWO\RYHUZRRGVWXGV 7KHYDOXHVSHFLILHGLQWKH6%&
'U\ZDOORUSODVWHUDSSOLHGWRVKHDWKLQJRYHUH[LVWLQJZRRG  SHUFHQW RI WKH YDOXH VSHFLILHG LQ WKH
VWXGV 6%&
%ROWV H[WHQGLQJ HQWLUHO\ WKURXJK XQUHLQIRUFHG PDVRQU\
H ZDOO VHFXUHG ZLWK EHDULQJ SODWHV RQ IDU VLGH RI D WKUHH N1SHUEROW
7HQVLRQEROWV  EF N1IRUWZRZ\WKHZDOOV
Z\WKHPLQLPXPZDOOZLWKDWOHDVWPPRIDUHD 
%ROWVHPEHGGHGDPLQLPXPRIPPLQWRXQUHLQIRUFHG 7KHYDOXHIRUSODLQPDVRQU\VSHFLILHGIRU
H PDVRQU\ ZDOOV EROWV VKRXOG EH FHQWHUHG LQ  PP VROLG PDVRQU\ LQ WKH 6%&  QR YDOXH
6KHDUEROWV  GLDPHWHUKROHVZLWKGU\SDFNRUQRQVKULQNJURXWDURXQG ODUJHU WKDQ WKRVH JLYHQ IRU  PP EROWV
WKHFLUFXPIHUHQFHRIWKHEROW VKRXOGEHXVHG
7KURXJKEROWV²EROWVPHHWLQJWKHUHTXLUHPHQWVIRUVKHDU 7HQVLRQ²VDPH DV IRU WHQVLRQ EROWV
EF 6KHDU²VDPHDVIRUVKHDUEROWV
DQGIRUWHQVLRQEROWV 
&RPELQHG WHQVLRQ (PEHGGHGEROWV²EROWVH[WHQGLQJWRWKHH[WHULRUIDFHRI
DQGVKHDUEROWV WKH ZDOO ZLWK D  PP URXQG SODWH XQGHU WKH KHDG DQG 7HQVLRQ²N1SHUEROW6KHDU²VDPHDV
GULOOHG DW DQ DQJOH RI ò GHJUHHV WR WKH KRUL]RQWDO IRUVKHDUEROWV
DEF
LQVWDOOHGDVVSHFLILHGIRUVKHDUEROWV 
5HLQIRUFHG PDVRQU\ LQILOOHG RSHQLQJV LQ H[LVWLQJ
6DPHDVYDOXHVVSHFLILHGIRUXQUHLQIRUFHG
,QILOOHGZDOOV XQUHLQIRUFHG PDVRQU\ ZDOOV SURYLGH NH\V RU GRZHOV WR
PDVRQU\ZDOOV
PDWFKUHLQIRUFLQJ
5HLQIRUFHG 7KH YDOXH VSHFLILHG LQ WKH 6%&  IRU
0DVRQU\SLHUVDQGZDOOVUHLQIRUFHGSHUWKH6%&
PDVRQU\ VWUHQJWKGHVLJQ
5HLQIRUFHG &RQFUHWHIRRWLQJVZDOOVDQGSLHUVUHLQIRUFHGDVVSHFLILHG 7KH YDOXH VSHFLILHG LQ WKH 6%&  IRU
G LQWKH6%& VWUHQJWKGHVLJQ
FRQFUHWH 
D (PEHGGHGEROWVWREHWHVWHGDVVSHFLILHGLQ6HFWLRQ$
E %ROWVWREHPPPLQLPXPLQGLDPHWHU
F 'ULOOLQJIRUEROWVDQGGRZHOVVKDOOEHGRQHZLWKDQHOHFWULFURWDU\GULOOLPSDFWWRROVVKRXOGQRWEHXVHGIRUGULOOLQJ
KROHVRUWLJKWHQLQJDQFKRUVDQGVKHDUEROWQXWV
G 1RORDGIDFWRUVRUFDSDFLW\UHGXFWLRQIDFWRUVKDOOEHXVHG
H 2WKHUEROWVL]HVYDOXHVDQGLQVWDOODWLRQPHWKRGVPD\EHXVHGSURYLGHGDWHVWLQJSURJUDPLVFRQGXFWHGLQDFFRUGDQFH
ZLWK 6HFWLRQ $ 7KH VWUHQJWK YDOXH VKDOO EH GHWHUPLQHG E\ PXOWLSO\LQJ WKH FDOFXODWHG DOORZDEOH YDOXH
GHWHUPLQHGLQDFFRUGDQFHZLWK6HFWLRQ$E\DQGWKHXVDEOHYDOXHVKDOOEHOLPLWHGWRDPD[LPXPRI
WLPHVWKHYDOXHJLYHQLQWKHWDEOH%ROWVSDFLQJVKDOOQRWH[FHHGPRQFHQWHUDQGVKDOOEHQRWOHVVWKDQPPRQ
FHQWHU




6%&&& 

&+$37(5 $²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6

7$%/($)
0$;,080$//2:$%/(+(,*+7727+,&.1(665$7,26)253$5$3(76

 SD
J” SDJ J”SDJ SD•J
0D[LPXPDOORZDEOHKHLJKWWRWKLFNQHVVUDWLRV   

7$%/($*
0$;,080+(,*+7727+,&.1(665$7,26)25$'2%(256721(:$//6

 J” SDJ J”SDJ SD•J

2QHVWRU\EXLOGLQJV   
7ZRVWRU\EXLOGLQJV   
)LUVWVWRU\   
6HFRQGVWRU\   

6%&&& 

&+$37(5 $²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6



),*85($
$&&(37$%/(',$3+5$*063$1

6%&&& 

&+$37(5 $²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6


),*85($
$1$/<6,62)850:$//,13/$1(6+($5)25&(6


6%&&& 

&+$37(5 $²6(,60,& 675(1*7+(1,1* 3529,6,216 )25 815(,1)25&('
0$6215<%($5,1*:$//%8,/',1*6
























7KLVSDJHOHIWLQWHQWLRQDOO\EODQN

6%&&& 

&+$37(5 $²($57+48$.( +$=$5' 5('8&7,21 ,1 (;,67,1* 5(,1)25&('
&21&5(7( $1' 5(,1)25&(' 0$6215< :$// %8,/',1*6 :,7+ )/(;,%/(
',$3+5$*06

&+$37(5$²($57+48$.(+$=$5'5('8&7,21,1
(;,67,1*5(,1)25&('&21&5(7($1'5(,1)25&('
0$6215<:$//%8,/',1*6:,7+)/(;,%/(',$3+5$*06

385326(
$3XUSRVH7KHSXUSRVHRIWKLVFKDSWHULVWR x :KHQ XVHG ZDOOWRURRI DQG ZDOOWRIORRU
SURPRWHSXEOLFVDIHW\DQGZHOIDUHE\UHGXFLQJWKH DQFKRUV KDYH RIWHQ LQFOXGHG HFFHQWULF
ULVNRIORVVRIOLIHRUSK\VLFDOLQMXU\DQGGDPDJHWR IOH[LEOH VKHHW PHWDO KDUGZDUH WKDW LV
SURSHUW\ WKDW PD\ UHVXOW IURP WKH HIIHFWV RI VXVFHSWLEOHWREXFNOLQJDQGIUDFWXUHDWVWUHVV
HDUWKTXDNHVRQUHLQIRUFHGFRQFUHWHDQGUHLQIRUFHG FRQFHQWUDWLRQV VXFK DV WKRVH FDXVHG E\
KROHV IRU FRQQHFWRUV WR ZRRG 3RRU
PDVRQU\ZDOO EXLOGLQJVZLWK IOH[LEOHGLDSKUDJPV
LQVWDOODWLRQ LQFOXGLQJ PLVDOLJQPHQW RI
%DVHG RQ SDVW HDUWKTXDNHV WKHVH EXLOGLQJV KDYH DQFKRUVFUHDWHGDGGLWLRQDOVWUHVVHV
EHHQFDWHJRUL]HGDVEHLQJSRWHQWLDOO\KD]DUGRXVDQG
SURQH WR VLJQLILFDQW GDPDJH LQFOXGLQJ SRVVLEOH x 2XWRISODQHIRUFHVKDYHFDXVHGGLVWUHVVDW
JLUGHUWRSLODVWHU FRQQHFWLRQV 7KH SLODVWHU
FROODSVH LQ D PRGHUDWH WR PDMRU HDUWKTXDNH 7KH
SURYLGHVDQHGJHVXSSRUWWRWKHZDOOSDQHO
SURYLVLRQVRI WKLVFKDSWHUDUH PLQLPXPVWDQGDUGV ZKLFK FRQFHQWUDWHV D VXEVWDQWLDO SRUWLRQ RI
IRU VWUXFWXUDO VHLVPLF UHVLVWDQFH HVWDEOLVKHG WKH RXWRISODQH VWUXFWXUDO UHVSRQVH WR WKLV
SULPDULO\WRUHGXFHWKHULVNRIORVVRIOLIHRUSK\VLFDO FRQQHFWLRQ &RPPRQO\ WKH DQFKRU EROWV
LQMXU\ RQ ERWK VXEMHFW SURSHUW\ DQG DGMDFHQW FRQQHFWLQJJLUGHUVWRWKHWRSRIWKHSLODVWHUV
SURSHUWLHV 7KHVH SURYLVLRQV ZLOO QRW QHFHVVDULO\ GLG QRW KDYH DGHTXDWH HGJH GLVWDQFH RU
SUHYHQW ORVV RI OLIH RU SK\VLFDO LQMXU\ RU SUHYHQW FRQILQHPHQWLQWKHFRQFUHWH7\SLFDOO\SDVW
HDUWKTXDNH GDPDJH WR DQ H[LVWLQJ EXLOGLQJ WKDW GDPDJH LQFOXGHGVSDOOLQJ RIWKH LQVLGHIDFH
FRPSOLHVZLWKWKHVHVWDQGDUGV RIWKHFRQFUHWHSLODVWHUVDQGORVVRIVXSSRUW
IRU WKH JLUGHUV 7KH FORVHO\ VSDFHG WLHV
™ 7KHSURYLVLRQVRIWKLVFKDSWHUDSSO\WREXLOGLQJV UHTXLUHG E\ WKH 6%&  DW WKH WRS RI WKH
GHVLJQHG SULRU WR WKH DGRSWLRQ RI WKH 6DXGL SLODVWHUVGLGQRWSUHYHQWWKLVNLQGRIGDPDJH
%XLOGLQJ&RGHRURWKHUHTXLYDOHQWFRGHV7KH\
x 7KH ODFN RI FRQWLQXRXV WLHV DFURVV WKH IXOO
DGGUHVVGHILFLHQFLHVWKDWKDYHEHHQIRXQGWREH
GHSWK RIWKHGLDSKUDJPDOORZHGFURVVJUDLQ
GLUHFW WKUHDWV WR OLIH VDIHW\ GXULQJ SULRU
WHQVLRQ IDLOXUHV RI WKH IUDPLQJ PHPEHUV DW
HDUWKTXDNHV 7KHVH GHILFLHQFLHV ILUVW EHFDPH
FRQWLQXRXVMRLQWVLQWKHZRRGVWUXFWXUDOSDQHO
DSSDUHQW GXULQJ WKH  6DQ )HUQDQGR
VKHDWKLQJ7KLVRFFXUUHGLQWKHLQWHULRURIWKH
&DOLIRUQLDHDUWKTXDNHZKHQDODUJHQXPEHURI
URRIRUIORRUGLDSKUDJPV/DFNRIWHQVLRQWLHV
WLOWXS EXLOGLQJV SDUWLDOO\ FROODSVHG )XUWKHU
DWJOXODPKLQJHORFDWLRQVDOVROHGWRORVVRI
VLJQLILFDQWGDPDJHZDVREVHUYHGLQWLOWXSVDQG
VXSSRUWIRUVXVSHQGHGJLUGHUV
FRQFUHWH EORFN ZDOO EXLOGLQJV ZLWK IOH[LEOH
GLDSKUDJPV LQ VXEVHTXHQW VLJQLILFDQW 86 x :DOOV DW UHHQWUDQW FRUQHUV RU VKRUW
HYHQWV LQFOXGLQJ WKH  :KLWWLHU 1DUURZV DUFKLWHFWXUDO ILQ ZDOOV QRW GHVLJQHG WR UHVLVW
 /RPD 3ULHWD DQG  1RUWKULGJH WULEXWDU\ ORDGV DQGRU SURYLGHG ZLWK
HDUWKTXDNHV7KHVHGHILFLHQFLHVDUHDVIROORZV FROOHFWRUV ZLWK DGHTXDWH FROOHFWRU
FRQQHFWLRQV DOVR H[SHULHQFHG
x $FRPPRQO\XVHGPHWKRGRIFRQQHFWLQJZDOO GLVSURSRUWLRQDWHGDPDJH
SDQHOV WR URRIV DQG IORRUV IRU RXWRISODQH
ORDGLQJZDVWRQDLOWKHGLDSKUDJPVWRZRRG ™ 7KLVFKDSWHUUHTXLUHV
OHGJHUV DQG EROW WKH ZRRG OHGJHUV WR WKH
x 3RVLWLYHDQFKRUDJHRIDOOUHLQIRUFHGFRQFUHWH
ZDOOV7KLVPHWKRGRIFRQQHFWLRQDOORZHGWKH
DQG PDVRQU\ ZDOOV WR GHYHORS WKH RXWRI
ZDOOSDQHOVWRVHSDUDWHIURPWKHURRIRUIORRU
SODQH ZDOO ORDGV LQWR WKH IORRU DQG URRI
E\ IDLOXUH RI WKH OHGJHU LQ FURVVJUDLQ
GLDSKUDJPV DQG WR SUHYHQW VSOLWWLQJ RI WKH
EHQGLQJ QDLO SXOORXW IURP WKH OHGJHU RU E\
OHGJHURUQDLOVSXOOLQJWKURXJKWKHHGJHRIWKH
WHDURXWRIWKHQDLOVWKURXJKWKHHGJHRIWKH
VKHDWKLQJ
ZRRGVWUXFWXUDOSDQHO

6%&&& 

&+$37(5 $²($57+48$.( +$=$5' 5('8&7,21 ,1 (;,67,1* 5(,1)25&('
&21&5(7( $1' 5(,1)25&(' 0$6215< :$// %8,/',1*6 :,7+ )/(;,%/(
',$3+5$*06

x 3URYLVLRQ IRU FROOHFWRUV DQG FROOHFWRU ™ 7KHFKDSWHUPD\EHXVHGIRUUHWURILWVWULJJHUHG

FRQQHFWLRQVIRUZDOOV E\ DOWHUDWLRQV WR WKH EXLOGLQJ RFFXSDQF\
FKDQJHVDWWKHEXLOGLQJRUUHSDLUVWULJJHUHGE\
™ :KHUH ODUJH HDUWKTXDNHV KDYH SUHYLRXVO\ VLJQLILFDQWGDPDJHLQDQHDUWKTXDNH+RZHYHU
RFFXUUHG DQG SRUWLRQV RI WKH H[LVWLQJ ZDOO LQ VXFK FDVHV LW LV QHFHVVDU\ WR XVH RWKHU
DQFKRUDJH V\VWHP PD\ KDYH EHHQ GDPDJHG SURYLVLRQVWRHYDOXDWHPHPEHUVQRWZLWKLQWKH
GXHWRGHILFLHQFLHVLQWKHRULJLQDOGHVLJQLWPD\ VFRSH RI WKLV FKDSWHU HJ GLDSKUDJPV DQG
EH DSSURSULDWH WR IXUWKHU LQYHVWLJDWH DQG ZDOOV
SULRULWL]H UHWURILWV IRU WKHVH VWUXFWXUHV
'HWHULRUDWHGDQGPRGLILHGVWUXFWXUHVPXVWDOVR 6&23(
EH LQYHVWLJDWHG WR GHWHUPLQH WKH HIIHFW RQ WKH
EXLOGLQJ¶V DELOLW\ WR ZLWKVWDQG VWURQJ JURXQG $6FRSH7KHSURYLVLRQVRIWKLVFKDSWHUVKDOO
PRWLRQV DSSO\WRZDOODQFKRUDJHV\VWHPVWKDWUHVLVWRXWRI
™ 2WKHU SRVVLEOH GHILFLHQFLHV VXFK DV SODQHIRUFHVDQGWRFROOHFWRUVLQH[LVWLQJUHLQIRUFHG
LQDGHTXDWH GLDSKUDJP VWUHQJWK LQDGHTXDWH FRQFUHWH RU UHLQIRUFHG PDVRQU\ EXLOGLQJV ZLWK
GLDSKUDJP VWLIIQHVV RU LQDGHTXDWH IOH[LEOHGLDSKUDJPV:DOODQFKRUDJHV\VWHPVWKDW
UHLQIRUFHPHQWDWGLDSKUDJPRSHQLQJVKDYHQRW ZHUHGHVLJQHGDQGFRQVWUXFWHGLQDFFRUGDQFHZLWK
EHHQ UHSRUWHG DV FDXVLQJ FROODSVH RU SDUWLDO WKH6%&VKDOOEHGHHPHGWRFRPSO\ZLWKWKHVH
FROODSVHDQGDUHQRWDGGUHVVHGLQWKLVFKDSWHU SURYLVLRQV
EHFDXVHWKHOHYHORIULVNDVVRFLDWHGZLWKWKHP
LVJHQHUDOO\ORZHU,WLVDVVXPHGWKDWVWUXFWXUDO ™ 7KHVFRSHLQFOXGHVDOOUHLQIRUFHGFRQFUHWHDQG
GLDSKUDJPV H[LVW LQ WKH VWUXFWXUHV FRYHUHG E\ UHLQIRUFHG PDVRQU\ EXLOGLQJV ZLWK IOH[LEOH
WKLV FKDSWHU 7KDW LV GLDSKUDJPV VXFK DV GLDSKUDJPV &RQFUHWH WLOWXS EXLOGLQJV DUH D
J\SVXP RU RWKHU SURSULHWDU\ FRPSRQHQWV ZLWK VXEVHW RI WKLV W\SH RI VWUXFWXUH ,Q WHUPV RI
PLQLPDO ODWHUDO ORDG FDSDFLW\ DUH QRW XVHG HDUWKTXDNH SHUIRUPDQFH WKHUH LV OLWWOH RU QR
$OWKRXJKUHLQIRUFHGFRQFUHWHDQGPDVRQU\ZDOO GLIIHUHQFH EHWZHHQ EXLOGLQJV ZLWK SUHFDVW
EXLOGLQJVZLWKPHWDOGHFNGLDSKUDJPVDUHZLWKLQ FRQFUHWHZDOOVRURWKHUKHDY\ZDOOVDVVXPLQJ
WKH VFRSH RI WKLV FKDSWHU WKH\ KDYH EHHQ WKH EXLOGLQJV KDYH VLPLODU GLDSKUDJP VSDQV
UHODWLYHO\ UDUH LQ DUHDV WKDW KDYH H[SHULHQFHG ZDOOKHLJKWVDQGZDOOUHLQIRUFLQJ7KHNH\LVWKH
HDUWKTXDNHV DQG FRQVHTXHQWO\ SRVW WUDQVIHU RI IRUFHV DVVRFLDWHG ZLWK RXWRISODQH
HDUWKTXDNH REVHUYDWLRQV DQG OHVVRQV OHDUQHG HDUWKTXDNH IRUFHV RQ WKHVH ZDOOV LQWR WKH
IURPWKHVHFRQILJXUDWLRQVDUHYHU\OLPLWHG,WLV IOH[LEOHGLDSKUDJPVRIWKHEXLOGLQJ
SRVVLEOH WKDW YXOQHUDELOLWLHV DVVRFLDWHG ZLWK ™ 7KHSUHGHFHVVRUWR&KDSWHU$'LYLVLRQRI
PHWDO GHFN GLDSKUDJPV ZLOO EH REVHUYHG LQ WKH/RV$QJHOHV%XLOGLQJ&RGHZDVGHYHORSHG
IXWXUHHDUWKTXDNHV IRUVLQJOHVWRU\UHLQIRUFHGFRQFUHWHRUPDVRQU\
™ 6LPLODUO\WKHDQDO\VLVRIWKHZDOOVIRUHLWKHULQ VKHDU ZDOO EXLOGLQJV ZLWK URRIV VKHDWKHG ZLWK
SODQH RU RXWRISODQH IRUFHV LV QRW SDUW RI WKLV ZRRGEDVHG PDWHULDOV WKDW DUH FRQVLGHUHG
FKDSWHU $OWKRXJK ZDOOV DUH GHVLJQHG IRU ³IOH[LEOH´ GLDSKUDJPV %XLOGLQJV ZLWK
VPDOOHUIRUFHVIRURXWRISODQHEHQGLQJWKDQWKH XQUHLQIRUFHG ZDOOV DUH WKH VXEMHFW RI &KDSWHU
IRUFHV XVHG IRU ZDOO DQFKRU GHVLJQ $DQGDUHQRWZLWKLQWKHVFRSHRIWKLVFKDSWHU
SHUIRUPDQFH RI UHLQIRUFHG ZDOOV LQ SDVW ™ 6WUXFWXUHVWKDWZHUHGHVLJQHGDFFRUGLQJWRWKH
HDUWKTXDNHVSURYLGHGWKDWWKH\KDYHQRWEHHQ 6%&  DUH SUHVXPHG WR KDYH DGHTXDWH
ZHDNHQHG E\ WKH LQWURGXFWLRQ RI ODUJH GHVLJQV DQG QHHG QRW EH VWUHQJWKHQHG 3DVW
RSHQLQJVKDVEHHQJRRG6RPHHQJLQHHUVDUH SHUIRUPDQFHKDVLQGLFDWHGWKDWSDUWLDODQGIXOO
FRQFHUQHG WKDW ZDOOV FRQVLVWLQJ SULPDULO\ RI FROODSVH RI WKHVH VWUXFWXUHV EXLOW ZLWK WKH
QDUURZ SLHUV ZLWKRXW SURSHU GHWDLOLQJ PD\ GHILFLHQWVHLVPLFGHVLJQSURYLVLRQVRIWKHSDVW
H[SHULHQFH VXEVWDQWLDO GDPDJH FDXVHG E\ LQ DUH OLNHO\ DW SHDN JURXQG DFFHOHUDWLRQV
SODQHORDGLQJLQDPDMRUHDUWKTXDNH7KXVDQ H[FHHGLQJJ7KLVREVHUYDWLRQLVEDVHGRQ
HQJLQHHU FRQVLGHULQJ LWHPV EH\RQG WKH VFRSH SDVW HDUWKTXDNHV ZLWK VKRUW WR PRGHUDWH
RI WKLV FKDSWHU PD\ ZDQW WR HYDOXDWH DQG GXUDWLRQ *URXQG VKDNLQJ RI OHVV VHYHULW\ EXW
SRVVLEO\VWUHQJWKHQZDOOVFRQVLVWLQJSULPDULO\RI ORQJHUGXUDWLRQFRXOGDOVRUHVXOWLQFROODSVHV
WUXFNGRRUVRUODUJHZLQGRZVIRULQSODQHVKHDU ™ 7KH VFRSH RI WKLV FKDSWHU LQFOXGHV RQO\
DQG RXWRISODQH EHQGLQJ $GGLWLRQDOO\ ZDOOV HOHPHQWV RI WKH ZDOO DQFKRUDJH V\VWHP DQG
FRQVWUXFWHG XVLQJ EXLOGLQJ FRGHV ZLWKRXW FROOHFWRUV DQG WKHLU FRQQHFWLRQV 7KH ZDOO
VHLVPLF UHTXLUHPHQWV EXW ORFDWHG LQ UHJLRQV DQFKRUDJHV\VWHPLVGHILQHGLQWKH6%&DV
ZLWK VLJQLILFDQW VHLVPLFLW\ PD\ UHSUHVHQW DQ LQFOXGLQJWKRVHHOHPHQWVLQWKHGLDSKUDJPWKDW
DGGLWLRQDOULVNQRWDGGUHVVHGE\WKHSURYLVLRQV DUHUHTXLUHGWRGHYHORSZDOODQFKRUDJHIRUFHV

6%&&& 

&+$37(5 $²($57+48$.( +$=$5' 5('8&7,21 ,1 (;,67,1* 5(,1)25&('
&21&5(7( $1' 5(,1)25&(' 0$6215< :$// %8,/',1*6 :,7+ )/(;,%/(
',$3+5$*06

VXFK DV ZDOO DQFKRUV VWUXWV VXEGLDSKUDJPV SHUWLQHQWGLPHQVLRQVDQGVL]HVIRUSODQUHYLHZDQG

FURVVWLHVDQGFRQWLQXLW\WLHV FRQVWUXFWLRQ7KHIROORZLQJVKDOOEHSURYLGHG
'(),1,7,216 
 )ORRUSODQVDQGURRISODQVVKDOOVKRZH[LVWLQJ
$'HILQLWLRQV  )RU WKH SXUSRVH RI WKLV IUDPLQJ FRQVWUXFWLRQ GLDSKUDJP
FKDSWHUWKHDSSOLFDEOHGHILQLWLRQVOLVWHGLQWKH6%& FRQVWUXFWLRQ SURSRVHG ZDOO DQFKRUV FURVV
WKH6%&WKH6%&DQGWKH6%& WLHVDQGFROOHFWRUV([LVWLQJQDLOLQJDQFKRUV
DQGWKHIROORZLQJVKDOODSSO\ FURVVWLHVDQGFROOHFWRUVVKDOODOVREHVKRZQ
)/(;,%/( ',$3+5$*06 5RRIV DQG IORRUV RQWKHSODQVLIWKH\DUHFRQVLGHUHGSDUWRIWKH
LQFOXGLQJEXW QRW OLPLWHGWR WKRVH VKHDWKHGZLWK ODWHUDOIRUFHUHVLVWLQJV\VWHPV
SO\ZRRG ZRRG GHFNLQJ E\ RU E\ RU PHWDO  $W HOHYDWLRQV ZKHUH WKHUH DUH DOWHUDWLRQV RU
GHFNVZLWKRXWFRQFUHWHWRSSLQJVODEV GDPDJH GHWDLOV VKDOO VKRZ URRI DQG IORRU
™ 7KH GHILQLWLRQ RI ³)OH[LEOH GLDSKUDJPV´ LQ WKLV KHLJKWVGLPHQVLRQVRIRSHQLQJVORFDWLRQDQG
FKDSWHULVQHDUO\LGHQWLFDOWRWKDWLQ6HFWLRQ H[WHQW RI H[LVWLQJ GDPDJH DQG SURSRVHG
RI 6%&  ,W LV QRW LQWHQGHG WKDW PDWHULDOV UHSDLU
VXFK DV J\SVXP ZLWK PLQLPDO VWUXFWXUDO  7\SLFDO ZDOO SDQHO GHWDLOV DQG VHFWLRQV ZLWK
FDSDFLW\EHLQFOXGHG SDQHOWKLFNQHVVKHLJKWSLODVWHUVDQGORFDWLRQ
6<0%2/6$1' RIDQFKRUVVKDOOEHSURYLGHG
127$7,216  'HWDLOVVKDOOLQFOXGHH[LVWLQJDQGQHZDQFKRUV
DQGWKHPHWKRGRIGHYHORSLQJDQFKRUIRUFHV
$*HQHUDO)RUWKHSXUSRVHRIWKLVFKDSWHU LQWR WKH GLDSKUDJP IUDPLQJ H[LVWLQJ DQGRU
WKH DSSOLFDEOH V\PEROV DQG QRWDWLRQV LQ WKH 6%& QHZ FURVVWLHV DQG H[LVWLQJ DQGRU QHZ RU
WKH6%&DQGWKH6%&VKDOODSSO\ LPSURYHGVXSSRUWRIURRIDQGIORRUJLUGHUVDW
™ $OOV\PEROVDQGQRWDWLRQVXVHGLQWKLVFKDSWHU SLODVWHUVRUZDOOV
DUHWKHVDPHDVWKRVHXVHGLQWKH6%&WKH  7KHEDVLVIRUGHVLJQDQGWKH6DXGL%XLOGLQJ
6%&DQGWKH6%& &RGHVXVHGIRUWKHGHVLJQVKDOOEHVWDWHGRQ
WKHSODQV
*(1(5$/
5(48,5(0(176 $6WUXFWXUDO REVHUYDWLRQV WHVWLQJ DQG
LQVSHFWLRQ 6WUXFWXUDOREVHUYDWLRQLQDFFRUGDQFH
$*HQHUDO  7KH VHLVPLFUHVLVWLQJ HOHPHQWV ZLWK6HFWLRQRI6%&VKDOOEHUHTXLUHGIRU
VSHFLILHG LQ WKLV FKDSWHU VKDOO FRPSO\ ZLWK DOO VWUXFWXUHV LQ ZKLFK VHLVPLF UHWURILW LV EHLQJ
SURYLVLRQVRIVHFWLRQRI6%&H[FHSWDV SHUIRUPHG LQ DFFRUGDQFH ZLWK WKLV FKDSWHU
PRGLILHGKHUHLQ 6WUXFWXUDO REVHUYDWLRQ VKDOO LQFOXGH YLVXDO
™ ,W LV RQO\ LQWHQGHG WKDW WKH ZDOO DQFKRUDJH REVHUYDWLRQ RI ZRUN IRU FRQIRUPDQFH WR WKH
V\VWHP FROOHFWRUV DQG FROOHFWRU FRQQHFWLRQV DSSURYHGFRQVWUXFWLRQGRFXPHQWVDQGFRQILUPDWLRQ
FRPSO\ZLWKWKHUHTXLUHPHQWVRIWKH6%& RIH[LVWLQJFRQGLWLRQVDVVXPHGGXULQJGHVLJQ
DV PRGLILHG KHUHLQ 2WKHU VWUXFWXUDO 6WUXFWXUDO WHVWLQJ DQG LQVSHFWLRQ IRU QHZ
FRPSRQHQWV DUH FRQVLGHUHG ORZHU SULRULW\ LQ FRQVWUXFWLRQPDWHULDOVVKDOOEHLQDFFRUGDQFHZLWK
WHUPV RI UHGXFLQJ WKH SRWHQWLDO IRU EXLOGLQJ
WKH6%&H[FHSWDVPRGLILHGE\WKLVFKDSWHU
FROODSVH IRU WKHVH W\SHV RI VWUXFWXUHV $V
GLVFXVVHGLQWKHFRPPHQWDU\WR6HFWLRQ$ ™ 7KH SURYLVLRQV RI WKLV FKDSWHU DUH LQWHQGHG WR
FRQGLWLRQV ZKHUH RWKHU FRPSRQHQWV FRXOG EH DGGUHVV GHILFLHQFLHV WKDW UHSUHVHQW GLUHFW
HYDOXDWHGDUHLGHQWLILHG WKUHDWV WR OLIH VDIHW\ 7KH SULPDU\ FRQFHUQ LV
SURYLGLQJDQDGHTXDWHZDOODQFKRUDJHV\VWHP
$$OWHUDWLRQVDQGUHSDLUV$OWHUDWLRQVDQG /DFN RI DGHTXDWH FROOHFWRUV RU FROOHFWRU
UHSDLUV UHTXLUHG WR PHHW WKH SURYLVLRQV RI WKLV FRQQHFWLRQV DW UHHQWUDQW FRUQHUV RU LQWHUQDO
FKDSWHU VKDOO FRPSO\ ZLWK DSSOLFDEOH VWUXFWXUDO ZDOOV FDQ DOVR EH VLJQLILFDQW GHILFLHQFLHV WKDW
UHTXLUHPHQWV RI WKH 6%&  XQOHVV VSHFLILFDOO\ FDQOHDGWRORFDOL]HGFROODSVHV,IWKHHQJLQHHU
PRGLILHGLQWKLVFKDSWHU ILQGVWKDWFRPSOHWHORDGSDWKVDUHDEVHQWHJ
VRPH VKHDU ZDOOV KDYH QR VWUXFWXUDO
$5HTXLUHPHQWVIRUSODQV7KHSODQVVKDOO FRQQHFWLRQV IRU IRUFH WUDQVIHU IURP WKH URRI WR
DFFXUDWHO\ UHIOHFW WKH UHVXOWV RI WKH HQJLQHHULQJ WKH VKHDU ZDOOV RU LI PRGLILFDWLRQV RU
LQYHVWLJDWLRQ DQG GHVLJQ DQG VKDOO VKRZ DOO GHWHULRUDWLRQKDYHLQWURGXFHGZHDNQHVVHVWKH
UHTXLUHPHQWVRIWKH6%&IRUFRPSOHWHORDG

6%&&& 

&+$37(5 $²($57+48$.( +$=$5' 5('8&7,21 ,1 (;,67,1* 5(,1)25&('
&21&5(7( $1' 5(,1)25&(' 0$6215< :$// %8,/',1*6 :,7+ )/(;,%/(
',$3+5$*06

SDWKV ZLWK UHGXFHG IRUFH OHYHOV VKRXOG EH ZKLOH EHLQJ DFWHG XSRQ E\ WKH PD[LPXP WHQVLRQ
DSSOLHG IRUFHGXHWRDQHDUWKTXDNH&ULWHULDIRUDQDO\VLVDQG
$1$/<6,6$1''(6,*1 WHVWLQJVKDOOEHGHWHUPLQHGE\WKHEXLOGLQJRIILFLDO
([SDQVLRQ DQFKRUV DUH RQO\ DOORZHG ZLWK VSHFLDO
$5HLQIRUFHG FRQFUHWH DQG UHLQIRUFHG LQVSHFWLRQDQGDSSURYHGWHVWLQJIRUVHLVPLFORDGLQJ
PDVRQU\ZDOODQFKRUDJH&RQFUHWHDQGPDVRQU\ $WWDFKLQJ WKH HGJH RI SO\ZRRG VKHDWKLQJ WR VWHHO
ZDOOVVKDOOEHDQFKRUHGWRDOOIORRUVDQGURRIVWKDW OHGJHUVLVQRWFRQVLGHUHGFRPSOLDQWZLWKWKHSRVLWLYH
SURYLGHODWHUDOVXSSRUWIRUWKHZDOO7KHDQFKRUDJH DQFKRULQJ UHTXLUHPHQWV RI WKLV FKDSWHU $WWDFKLQJ
VKDOOSURYLGHDSRVLWLYHGLUHFWFRQQHFWLRQEHWZHHQ WKH HGJH RI VWHHO GHFNV WR VWHHO OHGJHUV LV QRW
WKHZDOODQGIORRURUURRIFRQVWUXFWLRQFDSDEOHRI FRQVLGHUHGDV SURYLGLQJ WKH SRVLWLYHDQFKRUDJH RI
UHVLVWLQJ  SHUFHQW RI WKH KRUL]RQWDO IRUFHV WKLV FKDSWHU XQOHVV WHVWLQJ DQGRU DQDO\VLV DUH
VSHFLILHGLQVHFWLRQRIWKH6%& SHUIRUPHG WR HVWDEOLVK VKHDU YDOXHV IRU WKH
™ 7KLV FKDSWHU VSHFLILHV WKDW ZDOO DQFKRUDJH DWWDFKPHQW SHUSHQGLFXODU WR WKH HGJH RI WKH GHFN
V\VWHPV LQ H[LVWLQJ EXLOGLQJV EH HYDOXDWHG :KHUHVWHHOGHFNLQJLVXVHGDVDZDOODQFKRUV\VWHP
XVLQJDIRUFHOHYHORISHUFHQWRIWKHGHVLJQ WKH H[LVWLQJ FRQQHFWLRQV VKDOO EH VXEMHFW WR ILHOG
IRUFH UHTXLUHG IRU QHZ EXLOGLQJV 7KH ZDOO YHULILFDWLRQ DQG WKH QHZ FRQQHFWLRQV VKDOO EH
DQFKRUDJHV\VWHPLVGHILQHGLQ6HFWLRQ VXEMHFWWRVSHFLDOLQVSHFWLRQ
RI 6%&  DV LQFOXGLQJ WKH HOHPHQWV LQ WKH
GLDSKUDJPUHTXLUHGWRGHYHORSZDOODQFKRUDJH ™ 7KH ZDOO DQFKRUDJH IRUFHV DUH GHSHQGHQW RQ
IRUFHV VXFK DV ZDOO DQFKRUV VWUXWV WKHVSDQDQGVWLIIQHVVRIWKHGLDSKUDJPDQGWKH
VXEGLDSKUDJPV FURVVWLHV DQG FRQWLQXLW\ WLHV ZHLJKW WKLFNQHVV KHLJKW DQG IOH[LELOLW\ RI WKH
)RUGHVLJQRIZDOODQFKRUVߩPD\EHWDNHQDV ZDOOV ,Q D GHVLJQ HDUWKTXDNH WKH SUREDEOH
 1RWH DOVR WKDW DOWKRXJK ZDOO DQFKRUV DUH G\QDPLF IRUFHV ZLOO H[FHHG WKH GHVLJQ IRUFH
FRQQHFWLRQV EHWZHHQ WKH URRI GLDSKUDJP DQG 5HFHQW VWXGLHV RI VWURQJ PRWLRQ UHFRUGV LQ
WKH ZDOOV LW LV QRW UHTXLUHG WKDW WKH\ EH EXLOGLQJV ZLWK IOH[LEOH GLDSKUDJPV VKRZ
GHVLJQHG IRU SHUFHQW KLJKHU ORDGV DV DPSOLILFDWLRQDWWKHURRIGLDSKUDJPOHYHORIWZR
UHTXLUHG IRU EXLOGLQJV ZLWK UHHQWUDQW FRUQHUV WR IRXU WLPHV WKH SHDN JURXQG DFFHOHUDWLRQ
KRUL]RQWDO LUUHJXODULW\  LQ 7DEOH  RI 6%& +LJKHU DPSOLILFDWLRQV W\SLFDOO\ RFFXU DW ORZHU
 DV UHTXLUHG LQ 6HFWLRQ  RI 6%& JURXQGDFFHOHUDWLRQVZKHUHORZHUGDPSLQJDQG
 QRLQHODVWLFEHKDYLRURIWKHGLDSKUDJPRFFXUV
™ 2QFH LW LV GHFLGHG WKDW UHWURILW RI WKH ZDOO 6XFK DPSOLILFDWLRQV RI SHDN JURXQG
DQFKRUDJH V\VWHP ZLOO EH XQGHUWDNHQ DFFHOHUDWLRQ DUH H[SHFWHG IRU VWUXFWXUHV WKDW
DGGLWLRQDOULVNUHGXFWLRQFDQRIWHQEHDFKLHYHG KDYHGLDSKUDJPSHULRGVFRUUHVSRQGLQJZLWKWKH
LQ D FRVWHIIHFWLYH PDQQHU WKURXJK WKH XVH RI SHDNRIWKHUHVSRQVHVSHFWUXP
VWURQJHUKDUGZDUHWKDWPHHWVFXUUHQW6%& ™ $OWKRXJK LW LV QRW UHFRPPHQGHG WKDW ZDOO
UHTXLUHPHQWV 7KH HQJLQHHU PD\ ZDQW WR DQFKRUVEHGHVLJQHGWR\LHOGZKHQVXEMHFWHGWR
GLVFXVV WKH SRVVLELOLW\ RI VXFK YROXQWDU\ PDMRU HDUWKTXDNHV \LHOGLQJ ZRXOG UHVXOW LQ
HQKDQFHPHQWVZLWKWKHEXLOGLQJRZQHU ODUJHGHIRUPDWLRQVWKDWFRXOGFDXVHGDPDJHWR
GLDSKUDJP QDLOLQJ DW WKH OHGJHUV IRU ZRRG
$6SHFLDOUHTXLUHPHQWVIRUZDOODQFKRUDJH GLDSKUDJPV LW LV VWLOO UHFRPPHQGHG WKDW WKH
V\VWHPV7KHVWHHOHOHPHQWVRIWKHZDOODQFKRUDJH GHVLJQHU SURYLGH ZDOO DQFKRUV WKDW ZLOO \LHOG
V\VWHP VKDOO EH GHVLJQHG LQ DFFRUGDQFH ZLWK WKH UDWKHU WKDQ IDLO LQ D EULWWOH PDQQHU DW UHGXFHG
6%&  ZLWKRXW WKH XVH RI WKH RQHWKLUG VKRUW VHFWLRQVHJWZLVWHGVWUDSVRUDWVWHHOVWUDSV
GXUDWLRQ DOORZDEOH VWUHVV LQFUHDVH ZKHQ XVLQJ ZLWK VWUHVV FRQFHQWUDWLRQV VXFK DV WKRVH
FDXVHGE\KROHVLQVWHHOFRPSRQHQWV
DOORZDEOHVWUHVVGHVLJQ
™ 6WUXFWXUDO VWHHO ZKLFK KDV D NQRZQ GXFWLOH
:DOO DQFKRUV VKDOO EH SURYLGHG WR UHVLVW RXWRI EHKDYLRUDQGDVPDOOFRHIILFLHQWRIYDULDWLRQLQ
SODQHIRUFHVLQGHSHQGHQWRIH[LVWLQJVKHDUDQFKRUV VWUHQJWKKDVWKHORZHVWUDWLRRI\LHOGVWUHVVWR
([FHSWLRQ  ([LVWLQJ FDVWLQSODFH VKHDU DQFKRUV DOORZDEOHVWUHVVRIDOORIWKHPDWHULDOVXVHGLQ
DUH DOORZHG WR EH XVHG DV ZDOO DQFKRUV LI WKH WLH WKH ZDOO DQFKRU V\VWHP 7KH PDWHULDOVSHFLILF
IDFWRURILQ6HFWLRQRI6%&
HOHPHQWFDQEHUHDGLO\DWWDFKHGWRWKHDQFKRUVDQG
ZDV ILUVW LQWURGXFHG LQ WKH  8%& IRU
LI WKH HQJLQHHU RU DUFKLWHFW FDQ HVWDEOLVK WHQVLRQ VWUHQJWK GHVLJQ ZKLFK DGMXVWV WKH VWUHQJWK RI
YDOXHVIRUWKHH[LVWLQJDQFKRUVWKURXJKWKHXVHRI WKH VWHHO WR PHHW WKH H[SHFWHG DQFKRUDJH
DSSURYHG DVEXLOW SODQV RU WHVWLQJ DQG WKURXJK ORDGLQJDQGWKXVPDLQWDLQVFRQVLVWHQF\LQWKH
DQDO\VLV VKRZLQJ WKDW WKH EROWV DUH FDSDEOH RI HODVWLF FDSDFLW\ RI DOO RI WKH PDWHULDOV XVHG LQ
UHVLVWLQJWKHWRWDOVKHDUORDGLQFOXGLQJGHDGORDG WKH ZDOO DQFKRUDJH V\VWHP 7KH VWHHO

6%&&& 

&+$37(5 $²($57+48$.( +$=$5' 5('8&7,21 ,1 (;,67,1* 5(,1)25&('
&21&5(7( $1' 5(,1)25&(' 0$6215< :$// %8,/',1*6 :,7+ )/(;,%/(
',$3+5$*06

FRPSRQHQWV RI WKH DQFKRU KDUGZDUH DUH FDOFXODWLRQ WKDW WKH PHWDO GHFNLQJ DQG OHGJHU
GHVLJQHG XVLQJ WKLV ORDG IDFWRU 7KH DQJOHFDQ EH XVHG IRUZDOODQFKRUDJHZLWKRXW
HPEHGPHQWRI WKHDQFKRU EROWV DQGEROWV DQG VLJQLILFDQW GLVSODFHPHQW QRUPDO WR WKH ZDOO
QDLOV LQ ZRRG PHPEHUV DUH HYDOXDWHG ZLWKRXW VXUIDFH &DOFXODWLRQV VKRXOG FRQVLGHU WKDW WKH
WKHIDFWRUIRUVWHHO ZHOGVDUHDOVRVLPXOWDQHRXVO\ORDGHGLQVKHDU
™ ,WLVDOVR LPSRUWDQWWRFRQVLGHUWKHVWLIIQHVVRI GXH WR JOREDO GLDSKUDJP EHKDYLRU 7KH 
WKHVWHHODQGRWKHUPDWHULDOVLQWKHDQFKRUDJH PDWHULDOVSHFLILF IDFWRU VKRXOG EH XVHG LQ
)RU H[DPSOH WKH ZDOO DQFKRUV VKRXOG EH FDOFXODWLRQV
VXEVWDQWLDOO\ VWLIIHU WKDQ WKH OHGJHU QDLOV
DGMDFHQWWRDZDOODQFKRULQRUGHUWRSUHYHQWWKH $'HYHORSPHQW RI DQFKRU ORDGV LQWR WKH
QDLOV IURP UHVLVWLQJ VXEVWDQWLDO ORDG DQG GLDSKUDJP  'HYHORSPHQW RI DQFKRU ORDGV LQWR
FDXVLQJIDLOXUHRIWKHZRRGOHGJHULQFURVVJUDLQ URRI DQG IORRU GLDSKUDJPV VKDOO FRPSO\ ZLWK
EHQGLQJ&OHDUO\VWLIIZDOODQFKRUVDQGPLQLPDO VHFWLRQRIWKH6%&XVLQJKRUL]RQWDOIRUFHV
EROWVOLSHJQRRYHUVL]HGKROHVZLOOKHOSIRUP WKDW DUH  SHUFHQW RI WKRVH XVHG IRU QHZ
DJRRGZDOODQFKRUDJHV\VWHP FRQVWUXFWLRQ
™ ([LVWLQJOHGJHUEROWVHPEHGGHGLQWKHFRQFUHWH
RUPDVRQU\ZDOOPD\EHXVHGDVDSDUWRIWKH ([FHSWLRQ,IFRQWLQXRXVO\WLHGJLUGHUVDUHSUHVHQW
ZDOO DQFKRUDJH V\VWHP LI WKHLU WHQVLRQ YDOXHV WKHPD[LPXPVSDFLQJRIWKHFRQWLQXLW\WLHVLVWKH
FDQ EH HVWDEOLVKHG E\ WHVWLQJ RU WKURXJK JUHDWHURIWKHJLUGHUVSDFLQJRUP
DQDO\VLV7KHVL]HDQGVSDFLQJRIWKHVHDQFKRU ,Q ZRRG GLDSKUDJPV DQFKRUDJH VKDOO QRW EH
EROWVPXVWEHVKRZQRQWKHDSSURYHGSODQVDQG DFFRPSOLVKHGE\XVHRIWRHQDLOVRUQDLOVVXEMHFWWR
YHULILHGE\VLWHLQYHVWLJDWLRQ$VWUHQJWKGHVLJQ ZLWKGUDZDO :RRG OHGJHUV WRS SODWHV RU IUDPLQJ
DQDO\VLV PXVW VKRZ WKDW WKHVH HPEHGGHG VKDOOQRW EH XVHGLQ FURVVJUDLQEHQGLQJRUFURVV
DQFKRU EROWV DUH FDSDEOH RI UHVLVWLQJ WKH JUDLQ WHQVLRQ 7KH FRQWLQXRXV WLHV UHTXLUHG LQ
IDFWRUHG WHQVLRQ ORDG LQ FRPELQDWLRQ ZLWK WKH
VHFWLRQRIWKH6%&VKDOOEHLQDGGLWLRQWR
IDFWRUHG FRPELQDWLRQ RI HDUWKTXDNH DQG
JUDYLW\LQGXFHG VKHDU ORDGV LQ ERWK WKH WKHGLDSKUDJPVKHDWKLQJ
KRUL]RQWDODQGYHUWLFDOGLUHFWLRQV /HQJWKV RI GHYHORSPHQWRI DQFKRU ORDGV LQ ZRRG
™ 8VHRIQHZH[SDQVLRQDQFKRUVLVRQO\DOORZHG GLDSKUDJPVVKDOOEHEDVHGRQH[LVWLQJILHOGQDLOLQJ
LIWKH\DUHLQVWDOOHGZLWKVSHFLDOLQVSHFWLRQDQG RI WKH VKHDWKLQJ XQOHVV H[LVWLQJ HGJH QDLOLQJ LV
LI WKH\ PHHW WKH DSSURSULDWH FULWHULD >VXFK DV SRVLWLYHO\ LGHQWLILHG RQ WKH RULJLQDO FRQVWUXFWLRQ
WKRVHDQFKRUVHYDOXDWHGLQDQ,&&(YDOXDWLRQ SODQVRUDWWKHVLWH
6HUYLFHV ,&&(6 UHSRUW@ LQGLFDWLQJ WKH
FRQGLWLRQVIRUZKLFKWKHDQFKRUVDUHSHUPLWWHG ™ 7KLVVHFWLRQSUHVHQWVWKHUHTXLUHPHQWVRI6%&
WRUHVLVWVHLVPLFIRUFHV   FKDSWHU  DQG VHFWLRQ  RI
™ :DOO DQFKRUDJH WKDW UHOLHV RQ WKH WHDURXW 6%&  IRU GHYHORSPHQW RI ZDOO DQFKRUDJH
VWUHQJWKVKRWSLQVSXOOLQJWKURXJKWKHHGJHRI ORDGLQJ &RQWLQXRXV WLHV RU VWUXWV EHWZHHQ
WKH ZRRG VWUXFWXUDO SDQHO IRU DWWDFKPHQW WR D GLDSKUDJPFKRUGVDUHUHTXLUHGWRGLVWULEXWHZDOO
VWHHO OHGJHU LV QRW FRQVLGHUHG FRPSOLDQW ZLWK DQFKRUDJH IRUFHV LQWR WKH ERG\ RI WKH
WKHSURYLVLRQVRIWKLVFKDSWHU7KLVLVEHFDXVH GLDSKUDJP 6XEGLDSKUDJPV FUHDWHG ZLWK
VXFK FRQQHFWRUV DW WKH HGJH RI WKH ZRRG VXEGLDSKUDJPFKRUGVDWWKHLUERXQGDULHVPD\
VWUXFWXUDO SDQHO VKHHWV DUH ORDGHG ZLWK D EHXVHGWRWUDQVPLWWKHDQFKRUDJHIRUFHVWRWKH
FRPELQDWLRQ RI VKHDU DQG WHQVLRQ LQSODQH PDLQ FURVVWLHV 1RWH WKDW DOWKRXJK
VKHDU DQG WHDURXW GXULQJ DQ HDUWKTXDNH VXEGLDSKUDJPV DUH XVHIXO WRROV IRU KHOSLQJ WR
UHVXOWLQJ LQ ORFDO GHPDQG WKDW LV PXFK KLJKHU GHILQH UXOHV IRU GHYHORSLQJ ZDOO DQFKRU IRUFHV
WKDQ WKH RULJLQDO GHVLJQ FDSDFLW\ ,Q DGGLWLRQ LQWR WKH GLDSKUDJPV WKH HQJLQHHU VKRXOG QRW
WHDURXW YDOXHV RI FRQQHFWRUV DGMDFHQW WR WKH UHDOO\ H[SHFW WKH IRUFH WUDQVIHU WR RFFXU LQ D
HGJHRIWKHZRRGVWUXFWXUDOSDQHOVKHHWDUHQRW PDQQHU FRQVLVWHQW ZLWK WKH VXEGLDSKUDJP
VSHFLILHGLQWKH6%& DVVXPSWLRQV
™ :HOGLQJVWHHOGHFNLQJWRDVWHHOOHGJHUDQJOHLV ™ 7KH VSDQGHSWK UDWLR RI VXEGLDSKUDJPV VKDOO
QRWFRQVLGHUHGSRVLWLYHDQFKRUDJHDVUHTXLUHG QRWH[FHHG7KLVDOORZDEOHVSDQGHSWKUDWLR
E\WKLVFKDSWHUZKHQIOXWHVDUHSDUDOOHOWRWKH LVVXEVWDQWLDOO\OHVVWKDQWKHYDOXHSHUPLWWHG
ZDOOLQDFFRUGDQFHZLWK6HFWLRQRI SULRUWRWKH8%&7KLVOLPLWLVDQLQGLUHFW
6%&  7KH UHDVRQV DUH WKH VDPH DV IRU DWWHPSW WR OLPLW VXEGLDSKUDJP VKHDU 7KH
ZRRG VWUXFWXUDO SDQHO DWWDFKPHQW DQG DOVR FRPELQDWLRQ RI JOREDO GLDSKUDJP VKHDU IURP
EHFDXVH WKH IOXWHV KDYH VXEVWDQWLDO IOH[LELOLW\ RUWKRJRQDO GLUHFWLRQV DQG VXEGLDSKUDJP
:KHQ IOXWHV DUH SHUSHQGLFXODU WR WKH ZDOO LW VKHDUV FDQ H[FHHG WKH DFWXDO GLDSKUDJP
VKRXOG EH GHPRQVWUDWHG WKURXJK WHVWLQJ RU FDSDFLW\ WKRXJK WKLV HIIHFW LV FRPPRQO\

6%&&& 

&+$37(5 $²($57+48$.( +$=$5' 5('8&7,21 ,1 (;,67,1* 5(,1)25&('
&21&5(7( $1' 5(,1)25&(' 0$6215< :$// %8,/',1*6 :,7+ )/(;,%/(
',$3+5$*06

LJQRUHG E\ GHVLJQHUV HYHQ LQ QHZ VWUXFWXUHV SDQHOL]HG URRIV 3UHGULOOLQJ RI KROHV FDQ EH
7KHUH ZDV VRPH GLVFXVVLRQ E\ WKH FKDSWHU XVHG WR UHGXFH WKH WHQGHQF\ IRU VSOLWWLQJ
DXWKRUVDERXWUHOD[LQJWKLVUHTXLUHPHQWWRDOORZ 6WDSOHV PD\ EH XVHG WR HQKDQFH GLDSKUDJP
D VXEGLDSKUDJP UDWLR RI  IRU H[LVWLQJ FDSDFLW\ ZLWKRXW VSOLWWLQJ DOWKRXJK UHODWLYH
EXLOGLQJV VLQFH VXEGLDSKUDJPV ZLWK  [ IOH[LELOLW\ PXVW EH FRQVLGHUHG E\ XVLQJ GDWD
 PP GLPHQVLRQV XVHG WR EH FRPPRQ IURPWHVWLQJ
+RZHYHU WKLV ZDV D PLQRULW\ RSLQLRQ DQG WKH ™ ,QSUHYLRXVHGLWLRQVDPLQLPXPPHPEHUVL]HRI
UHTXLUHPHQWIRUUHWURILWWLQJVXEGLDSKUDJPVZLWK  PP QRPLQDO ZDV UHTXLUHG IRU ZRRG
D OHQJWKWRGHSWK UDWLR RI PRUH WKDQ  LV D PHPEHUV XVHG WR GHYHORS DQFKRUDJH IRUFHV
UHTXLUHPHQW RI WKLV FKDSWHU )RU FDVHV ZKHQ LQWRWKHGLDSKUDJPV6LQFHDPLQLPXPPHPEHU
UHWURILWV DUH EHLQJ SHUIRUPHG RQ D YROXQWDU\ VL]HUHTXLUHPHQWGRHVQRWH[LVWLQ6%&WKLV
EDVLV DQG OHQJWKWRGHSWK UDWLRV RI ZDV FRQVLGHUHG LQDSSURSULDWH ,QVWHDG
VXEGLDSKUDJP H[FHHG E\DVPDOODPRXQW ZKDWHYHUVL]HFDQEHVKRZQDGHTXDWHWKURXJK
WKH HQJLQHHU PD\ ZDQW WR FRQVLGHU RPLWWLQJ FDOFXODWLRQLVDOORZHG,WLVGLIILFXOWRULPSRVVLEOH
FRUUHFWLRQRIWKLVGHILFLHQF\VLQFHLWLVDORZHU WRPDNH[PHPEHUVZRUNGXHWRHGJHGLVWDQFH
SULRULW\ LWHP WKDQ RWKHU LWHPV LQFOXGHG LQ WKLV UHTXLUHPHQWV DQG W\SLFDO FRQVWUXFWLRQ
FKDSWHU WROHUDQFHVQRWZLWKVWDQGLQJWKDWLWPD\DSSHDU
™ 7KHHQJLQHHUVKRXOGFRQVLGHUWKHH[LVWLQJZRRG DGHTXDWH WKURXJK FDOFXODWLRQ $Q H[LVWLQJ 
VWUXFWXUDOSDQHOOD\RXWZKHQVHOHFWLQJORFDWLRQV PP QRPLQDO PHPEHU FDQ EH VXSSOHPHQWHG
IRU ZDOO DQFKRUV ,I PHPEHUV ZLWKRXW HGJH ZLWK RWKHU  PP QRPLQDO PHPEHUV LI WKH
QDLOLQJDUHXVHGDVSDUWRIWKHZDOODQFKRUDJH DGGLWLRQDO PHPEHUV DUH LQWHUQDLOHG ,W LV
V\VWHP WKH UHGXFHG FDSDFLW\ IRU ILHOG QDLOLQJ QHFHVVDU\ WR SURYLGH VXIILFLHQW LQWHUQDLOLQJ
PXVW EH FRQVLGHUHG RU QHZ QDLOLQJ PXVW EH EHWZHHQWKHQHZDQGH[LVWLQJPHPEHUIRUIRUFH
SURYLGHG 7KLV LQFOXGHV ORFDWLRQV ZKHUH WKH WUDQVIHU ,Q DGGLWLRQ LI QR QHZ QDLOLQJ LQWR WKH
ZRRG VWUXFWXUDO SDQHO LV VWDJJHUHG DQG WKH GLDSKUDJPLVSURYLGHGWKHVWUHVVHVGXHWRWKH
VXESXUOLQLQWKHILUVWED\KDVHGJHQDLOLQJEXW HFFHQWULF ORDGLQJ IURP WKH GLDSKUDJP QDLOV LQ
WKH VXESXUOLQ LQ WKH VHFRQG ED\ GRHV QRW RU WKHH[LVWLQJPHPEHURQO\PXVWEHFRQVLGHUHG
YLFHYHUVD,IWKHGLDSKUDJPQDLOLQJLVXQNQRZQ ,WLVFRPPRQSUDFWLFHWRJOXHWKHWRSRIWKHQHZ
QR GHVLJQ GUDZLQJV H[LVW WKH URRILQJ VKRXOG PHPEHU WR WKH GLDSKUDJP LQ RUGHU WR DFKLHYH
EHUHPRYHGORFDOO\LQDQXPEHURIORFDWLRQVWR VWUHVVWUDQVIHUIURPWKHGLDSKUDJPWRWKHQHZ
GHWHUPLQH HGJH QDLOLQJ XQOHVV ILHOG QDLOLQJ LV [PHPEHU+RZHYHUWKHVWUHQJWKRIWKHJOXH
DVVXPHG$VQDLOLQJZLOOSUREDEO\YDU\RYHUWKH VKRXOGQRWEHUHOLHGXSRQLQFDOFXODWLRQVXQOHVV
OHQJWK RI WKH GLDSKUDJP ]RQH QDLOLQJ WKH LWFDQEHGHPRQVWUDWHGWKDWWKHJOXHGRHVQRW
QDLOLQJ VKRXOG EH YHULILHG LQ D QXPEHU RI ORVH LWV VWUHQJWK RU EHFRPH PRUH EULWWOH ZLWK
UHJLRQV ,I WKHUH DUH LQGLFDWLRQV RI SRRU DJH
FRQVWUXFWLRQ TXDOLW\ HJ QDLO VSDFLQJ HUUDWLF
QDLOV RYHUGULYHQ UHPRYDO RI WKH URRILQJ WR $$QFKRUDJH DW SLODVWHUV  $QFKRUDJH DW
YHULI\ QDLOLQJ DW ZDOO DQFKRU ORFDWLRQV LV SLODVWHUV VKDOO EH GHVLJQHG IRU WKH WULEXWDU\ ZDOO
UHFRPPHQGHG DQFKRULQJORDGSHU6HFWLRQ$FRQVLGHULQJWKH
™ 1RWHWKDWWKHHQJLQHHUVKRXOGFRQVLGHUZKHWKHU ZDOODVDWZRZD\VODE7KHHGJHVRIWKHWZRZD\
DGGLWLRQDOQDLOLQJLQWR[PHPEHUVWRLQFUHDVH VODE VKDOO EH FRQVLGHUHG IL[HG ZKHQ WKHUH LV
HLWKHUZDOODQFKRUWUDQVIHURUGLDSKUDJPVKHDU FRQWLQXLW\ DW SLODVWHUV DQG VKDOO EH FRQVLGHUHG
FDSDFLW\ZLOOVSOLWWKHPHPEHUV*HQHUDOO\QDLO SLQQHGDWURRIDQGIORRU7KHSLODVWHUVRUWKHZDOOV
VSDFLQJ QHZ DQG H[LVWLQJ FRPELQHG VKRXOG LPPHGLDWHO\ DGMDFHQW WR WKH SLODVWHUV VKDOO EH
QRWEHOHVVWKDQWKDWSHUPLWWHGLQ[PHPEHUV DQFKRUHGGLUHFWO\WRWKHURRIIUDPLQJVXFKWKDWWKH
LQQHZGLDSKUDJPV,W LVVRPHWLPHVGLIILFXOWWR
H[LVWLQJ YHUWLFDO DQFKRU EROWV DW WKH WRS RI WKH
WLJKWHQ H[LVWLQJ QDLO VSDFLQJ ZLWKRXW WULJJHULQJ
WKH SURYLVLRQV DVVRFLDWHG ZLWK FORVHO\ VSDFHG SLODVWHUVDUHE\SDVVHGZLWKRXWSHUPLWWLQJWHQVLRQRU
QDLOLQJ )RU H[DPSOH VSDFLQJ DW  PP VKHDUIDLOXUHDWWKHWRSRIWKHSLODVWHUV
FDQQRWEHGHFUHDVHGWRPPZLWKRXWSODFLQJ ([FHSWLRQ,IH[LVWLQJYHUWLFDODQFKRUEROWVDWWKH
RQHQDLOEHWZHHQWZRH[LVWLQJQDLOVHIIHFWLYHO\ WRS RI WKH SLODVWHUV DUH XVHG IRU WKH DQFKRUDJH
SURGXFLQJDPPVSDFLQJ1DLOLQJIURPVWUDS
DGGLWLRQDOH[WHULRUFRQILQHPHQWVKDOOEHSURYLGHGDV
DQFKRUV RQ WRS RI WKH [ PHPEHUV LQFUHDVHV
WKH OLNHOLKRRG RI VSOLWWLQJ ,I VWUDSV DUH DSSOLHG UHTXLUHGWRUHVLVWWKHWRWDODQFKRUDJHIRUFH
RQWRSRISO\ZRRGQHZGLDSKUDJPQDLOLQJDWWKH 7KH PLQLPXP DQFKRUDJH IRUFH DW D IORRU RU URRI
VDPHORFDWLRQPD\EHRPLWWHG6SOLWWLQJRIVKRUW EHWZHHQ WKH SLODVWHUV VKDOO EH WKDW VSHFLILHG LQ
[ PHPEHUV HJ EORFNLQJ LV PRUH RI D 6HFWLRQ$
FRQFHUQWKDQORQJHUPPHPEHUVW\SLFDORI

6%&&& 

&+$37(5 $²($57+48$.( +$=$5' 5('8&7,21 ,1 (;,67,1* 5(,1)25&('
&21&5(7( $1' 5(,1)25&(' 0$6215< :$// %8,/',1*6 :,7+ )/(;,%/(
',$3+5$*06

™ ,WKDVEHHQSDVWSUDFWLFHWRDQFKRUZDOOVWRWKH VSDQDVLQJOHVSDQKDYLQJPRPHQWUHVWUDLQWRU
IORRUDQGWKHURRIGLDSKUDJPVIRUWULEXWDU\ZDOO D VLPSOH VXSSRUW 7KH PRPHQW UHVWUDLQW
ORDGLQJ DVVXPLQJ WKH ZDOO SDQHO VSDQV GHSHQGV RQ ZKHWKHU FRQWLQXLW\ RI WKH SDQHO
EHWZHHQ DGMDFHQW IORRUV RU EHWZHHQ WKH IORRU WKURXJKWKH SLODVWHULVVKRZQRQWKH GUDZLQJV
DQGURRI+RZHYHUZKHQSLODVWHUVDUHSUHVHQW RU ZKHWKHU DQ RSHQ MRLQW H[LVWV DW RQH VLGH RI
LQWKHZDOOVWKHVWLIIHQLQJHIIHFWRIWKHSLODVWHUV WKH SLODVWHU 7KH VXSSRUW FRQGLWLRQ DW WKH URRI
RQ WKH GHIRUPHG VKDSH RI WKH ZDOOSLODVWHU OHYHO LV W\SLFDOO\ FRQVLGHUHG DV D VXSSRUW
V\VWHP PXVW EH WDNHQ LQWR DFFRXQW 7KLV LV ZLWKRXW PRPHQW UHVWUDLQW $ WH[WERRN RU
FRQVLVWHQWZLWK6HFWLRQRI6%& VWDQGDUGIRU WKHGHVLJQRI VODEVVXSSRUWHGRQ
6LQFH WKH UHODWLYH VWLIIQHVV RI WKH ZDOOV DQG IRXUHGJHVPD\EHXVHGWRGHWHUPLQHUHDFWLRQV
SLODVWHUV PD\ YDU\ D UDWLRQDO PHWKRG LV DW HDFK HGJH RI WKH SDQHO 7KHVH UHIHUHQFHV
UHTXLUHGWRFDOFXODWHWKHZDOOSDQHOORDGFDUULHG FRQVLGHUWKHDVSHFWUDWLR RIWKHSDQHODQGWKH
E\WKHSLODVWHU7KHUHDFWLRQRIDSLODVWHUDWWKH URWDWLRQDO UHVWUDLQW DW HDFK SDQHO HGJH
GLDSKUDJPOHYHOUHVXOWLQJIURPWKHDQDO\VLVRI $QDO\VHVFDQEHFRPSOLFDWHGE\WKHSUHVHQFH
WKH ZDOOSLODVWHU V\VWHP LV WKH ORDG DSSOLHG RI RSHQLQJV DQG SDUDSHWV ,Q VXFK FDVHV
GLUHFWO\ WR WKH JLUGHU WKURXJK LWV H[LVWLQJ DSSUR[LPDWH FRQVHUYDWLYH VLPSOLI\LQJ
DQFKRUDJHWRWKHWRSRIWKHSLODVWHU DVVXPSWLRQV VKRXOG EH XVHG $ ORJLFDO
™ 7KUHHFRQFHUQVPXVWEHDGGUHVVHGIRUH[LVWLQJ DSSURDFKUHJDUGLQJWULEXWDU\DUHDIRUWKHGHVLJQ
ZDOODQFKRUVDWSLODVWHUV7KHH[LVWLQJEROWHG RISLODVWHUZDOODQFKRUDJHLVLQFOXGHGLQ)LJXUH
FRQQHFWLRQ WR WKH JLUGHU PXVW KDYH DGHTXDWH & RI WKH  6WUXFWXUDO (QJLQHHUV
VWUHQJWK IRU WKH SLODVWHU UHDFWLRQ  7KH $VVRFLDWLRQ RI &DOLIRUQLD 6($2&
KDUGZDUHPXVWEHVWURQJHQRXJKLQFOXGLQJWKH 5HFRPPHQGHG /DWHUDO )RUFH 5HTXLUHPHQWV
QHWVHFWLRQDQG7KHVKHDUVWUHQJWKRIWKH DQG &RPPHQWDU\ %OXHERRN ,Q DQ\ FDVH
H[LVWLQJDQFKRUVZLWKFRQVLGHUDWLRQRIWKHHGJH ZLWKRXWDQH[DFWVROXWLRQWKDWFRQVLGHUVSLODVWHU
GLVWDQFHRIWKHHPEHGGHGEROWVLQWKHWRSRIWKH WR ZDOO VWLIIQHVV DQG GLIIHUHQW ZDOO DQFKRU
SLODVWHUPXVWEHDGHTXDWH VWLIIQHVVHV VRPH FRQVHUYDWLVP LV
™ $Q LQDGHTXDWHEROWHGFRQQHFWLRQWR WKHJLUGHU UHFRPPHQGHG
FDQ EH HQKDQFHG E\ DGGLWLRQDO EROWV 6LGH ™ 7KH VWLIIHQLQJ HIIHFW RI SLODVWHUV VKRXOG EH
SODWHVFDQEHH[WHQGHGE\HLWKHUZHOGLQJQHZ FRQVLGHUHG HYHQ ZKHQ IUDPLQJ PHPEHUV DUH
SODWHVWRWKHH[LVWLQJSODWHVRUE\UHPRYLQJWKH QRW GLUHFWO\ VXSSRUWHG RQ WKH SLODVWHUV HJ
H[LVWLQJEROWVSURYLGLQJDVHFRQGORQJHUSODWH SXUOLQV 7KHLU SUHVHQFH ZLOO FDXVH WKH RXWRI
ZLWK DGGLWLRQDO KROHV RYHU HDFK SODWH DQG SODQH ORDGLQJ DW WKH GLDSKUDJP OHYHO DGMDFHQW
UHLQVWDOOLQJWKHH[LVWLQJSOXVQHZEROWV WR WKH SLODVWHU WR H[FHHG WKH ³DYHUDJH´
™ ,QDGHTXDWH KDUGZDUH VWUHQJWK FDQ EH DQFKRUDJH ORDGLQJ ,I SRVVLEOH GLUHFW
DGGUHVVHG E\ UHSODFLQJ WKH H[LVWLQJ DQFKRUV FRQQHFWLRQIURPWKHSLODVWHUWRQHDUE\PHPEHUV
ZLWKQHZVWLIIZDOODQFKRUVGHVLJQHGWRWDNHWKH LVGHVLUDEOH
HQWLUH ORDG 7KH VWLIIQHVV RI VXFK D E\SDVV ™ :DOO DQFKRUV DW SLODVWHU ORFDWLRQV VKRXOG EH
V\VWHPPXVWEHFKHFNHGWRYHULI\WKDWLWLVVWLIIHU ORFDWHGFORVHHQRXJKWRWKHWRSRIWKHSLODVWHU
XQGHU ORDGLQJ WKDQ WKH H[LVWLQJ V\VWHP ,I WKH WR DYRLG RYHUVWUHVVLQJ WKH ZDOO SDQHOV LQ
QHZDQFKRUVDUHQRWVLJQLILFDQWO\VWLIIHUWKDQWKH EHQGLQJ IURP WKH KLJKHU ZDOO DQFKRU IRUFHV
H[LVWLQJV\VWHPWKHH[LVWLQJV\VWHPVKRXOGEH DVVRFLDWHGZLWKWKHSLODVWHU7KHGHVLUHWRDYRLG
GLVFRQQHFWHGHJUHPRYHEROWVIURPJLUGHU EHQGLQJLQWKHZDOOVKRXOGEHEDODQFHGZLWKWKH
™ ,IWKHVKHDUVWUHQJWKRIWKHH[LVWLQJEROWVLVQRW IDFWWKDWWKHURRIIUDPLQJPHPEHUVH[SHULHQFH
DGHTXDWHGXHWRWKHLUHGJHGLVWDQFHDGGLWLRQDO OHVVEHQGLQJZKHQWKHZDOODQFKRUVDUHFORVH
H[WHULRU FRQILQHPHQW DW WKH WRS RI WKH SLODVWHU WRWKHURRIVKHDWKLQJZKHUHWKHZDOODQFKRUORDG
PXVWEHSURYLGHGLIWKHEROWVDUHWREHUHOLHGRQ LV WUDQVIHUUHG WR WKH GLDSKUDJP $OVR W\LQJ
WRUHVLVWORDGV WKHP WR WKH ZDOO QHDU WKH OHYHO RI WKH URRI
™ $VLQJOHVWRU\ZDOOSDQHOZLWKSLODVWHUVDWHDFK SURYLGHVVRPHIOH[LELOLW\QHJDWLQJWRDQH[WHQW
HQGLVVXSSRUWHGDWIRXUHGJHVE\FRPELQDWLRQ WKHVWLIIHQLQJHIIHFWRIWKHSLODVWHU
RI WKH SLODVWHUV WKH URRI GLDSKUDJP DQG WKH ™ $OWKRXJK LW LV DSSURSULDWH WR LQFUHDVH WKH
VODERQJUDGH 7\SLFDOO\ WKH VXSSRUW DW WKH WULEXWDU\ ZDOO DQFKRU IRUFHV DW SLODVWHUV WR
VODERQJUDGH VKRXOG EH FRQVLGHUHG DV D FRQVLGHU WKH SLODVWHUV¶ VWLIIQHVV GHVLJQ IRUFHV
VXSSRUW ZLWKRXW PRPHQW UHVWUDLQW 7KH SDQHO IRU DGMDFHQW ZDOO DQFKRUV LH VXESXUOLQV
FRXOGDOVREH PRGHOHG ZLWKODWHUDOUHVWUDLQWDW VKRXOGQRWEHUHGXFHG
ERWKWKHVODERQJUDGHDQGWKHIRRWLQJLQFDVHV
ZKHUH WKH HOHYDWLRQV RI WKH WZR DUH $6\PPHWU\6\PPHWU\RIZDOODQFKRUDJH
VXEVWDQWLDOO\GLIIHUHQW7KHVXSSRUWFRQGLWLRQRI DQGFRQWLQXLW\FRQQHFWRUVDERXWWKHPLQRUD[LVRI
WKH SDQHO DW WKH SLODVWHU FDQ EH D FRQWLQXRXV WKHIUDPLQJPHPEHULVUHTXLUHG

6%&&& 

&+$37(5 $²($57+48$.( +$=$5' 5('8&7,21 ,1 (;,67,1* 5(,1)25&('
&21&5(7( $1' 5(,1)25&(' 0$6215< :$// %8,/',1*6 :,7+ )/(;,%/(
',$3+5$*06

([FHSWLRQ  (FFHQWULFLW\ PD\ EH DOORZHG ZKHQ LW ™ 7KH VKDULQJ RI WKH ORDG RQ D VLQJOH IUDPLQJ
FDQ EH VKRZQ WKDW DOO FRPSRQHQWV RI IRUFHV DUH PHPEHU EHWZHHQ ZDOO DQFKRUV RI GLIIHUHQW
SRVLWLYHO\ UHVLVWHG 7KH UHVLVWDQFH PXVW EH W\SHV UHTXLUHV DQ DQDO\VLV RI WKHLU UHODWLYH
VXSSRUWHGE\FDOFXODWLRQVRUWHVWV VWLIIQHVV 6WLIIQHVV PXVW FRQVLGHU WKH W\SH RI
DQFKRUEROWXVHG7HVWLQJRI-EROWVKDVIRXQG
™ 6\PPHWU\ RI ZDOO DQFKRUDJH FRQQHFWRUV WKDW WKDW WKH VPRRWK SRUWLRQ FDQ H[KLELW PLQLPDO
DUHSODFHGRQWKHYHUWLFDOVLGHVRIWKHIUDPLQJ ERQGDQGSXOORXWPD\RFFXUE\VWUDLJKWHQLQJRI
PHPEHUV LH ZDOO DQFKRUV WKDW ZRXOG WKH-EHQG7KXV-EROWVWHQGWREH LQIHULRUWR
JHQHUDWH EHQGLQJ DERXW PLQRU D[LV RI WKH KHDGHG EROWV 6LPLODUO\ H[SDQVLRQ DQFKRUV
IUDPLQJ PHPEHUV LV UHTXLUHG XQOHVV VWUHVVHV PD\ VOLS SULRU WR IDLOXUH UHVXOWLQJ LQ XQHTXDO
FDXVHGE\WKHHFFHQWULFLW\DUHDFFRXQWHGIRULQ ORDG GLVWULEXWLRQ LI XVHG LQ FRPELQDWLRQ ZLWK
WKH GHVLJQ 7KLV LV FRQVLVWHQW ZLWK 6HFWLRQ FDVWLQSODFH DQFKRUV RU WKURXJK EROWV ,I QR
RI6%&,QWKHSDVWHQJLQHHUV GDWDH[LVWVIRUFDOFXODWLRQRIUHODWLYHVWLIIQHVVRI
RIWHQ XVHG DOORZDEOH KDUGZDUH YDOXHV LQ WKH H[LVWLQJ KDUGZDUH DQGRU DQFKRU EROWV ORDG
PDQXIDFWXUHUV¶ FDWDORJV ZLWKRXW FRQVLGHUDWLRQ VKDULQJEHWZHHQGLIIHUHQWW\SHVRIZDOODQFKRUV
RI PHPEHU FDSDFLW\ DQG VSHFLILFDOO\ WKH LVQRWSHUPLWWHG
VWUHVVHVFDXVHGE\HFFHQWULFFRQQHFWLRQV7KH ™ 2OGHUKDUGZDUHLVRIWHQPRUHIOH[LEOHWKDQQHZ
YDOXHV LQ WKH KDUGZDUH FDWDORJ W\SLFDOO\ ZHUH KDUGZDUH DQG LW PD\ EH PRUH SUDFWLFDO WR
GHYHORSHG E\ WHVWLQJ WKH KDUGZDUH RQ D VWHHO UHPRYH H[LVWLQJ KDUGZDUH RU LJQRUH LW DQG
MLJ DQG WKXV GLG QRW FRQVLGHU WKH HFFHQWULFLW\ SURYLGHWZRLGHQWLFDOSLHFHVRIQHZKDUGZDUH
VWUHVVHV LQ WKH ZRRG PHPEHUV ,W LV YHU\ RQHRQHDFKVLGHRIWKHPHPEHU
FRPPRQ WR ILQG VLQJOHVLGHG ZDOO DQFKRU
FRQQHFWLRQV LQ H[LVWLQJ EXLOGLQJV 7KLV LV $$QFKRUDJH DW LQWHULRU ZDOOV  ([LVWLQJ
HVSHFLDOO\DSUREOHPIRUVXESXUOLQVEXWPD\EH LQWHULRUUHLQIRUFHGFRQFUHWHRUUHLQIRUFHGPDVRQU\
DSUREOHPIRUSXUOLQVDQGEHDPV ZDOOVWKDWH[WHQGWRWKHIORRUDERYHRUWRWKHURRI
™ 7KH IOH[XUDO VWUHVVHV DERXW WKH PLQRU D[LV GLDSKUDJPVKDOOEHDQFKRUHGIRURXWRISODQHIRUFHV
FDXVHGE\XQV\PPHWULFDO FRQQHFWRUVPXVWEH SHU6HFWLRQV$DQG$:DOOVH[WHQGLQJ
FRPELQHG ZLWK VWUHVVHV FDXVHG E\ JUDYLW\ WKURXJKWKH URRIGLDSKUDJPVKDOOEH DQFKRUHGIRU
ORDGLQJ(FFHQWULFLW\EHWZHHQWKHOLQHRIORDGLQJ RXWRISODQH IRUFHV RQ ERWK VLGHV DQG FRQWLQXLW\
RQ WKH FRQQHFWRU DQG WKH FHQWHUOLQH RI WKH WLHV VKDOOEH VSOLFHGDFURVV RU FRQWLQXRXVWKURXJK
UHVLVWLQJPHPEHUPXVWEHUHVLVWHGE\SURYLGLQJ
WKHLQWHULRUZDOOWRSURYLGHGLDSKUDJPFRQWLQXLW\
VXSSRUWV QRUPDO WR WKH OLQH RI ORDGLQJ RU E\ D
UHVLVWLQJ FRXSOH 7KH UHDFWLRQV DW WKHVH ™ 7KLV VHFWLRQ UHTXLUHV LQWHULRU ZDOOV WR EH
VXSSRUWVPXVWEHGHWHUPLQHGE\FDOFXODWLRQVRU SURYLGHGZLWKZDOODQFKRUV\VWHPV,Q&DVH
WHVWLQJ ZKHUH WKH ZDOO GRHV QRW SURMHFW WKURXJK WKH
™ 7KHHQJLQHHUVKRXOGEHDZDUHRIWKHIDFWWKDW GLDSKUDJP DQG WKH IUDPLQJ LV FRQWLQXRXV LW
HFFHQWULFLW\FDQDULVHHLWKHUWKURXJKGHVLJQRU PD\ RQO\ EH QHFHVVDU\ WR SURYLGH ZDOO
EHFDXVHRIEROWRUVWUDSPLVDOLJQPHQWLHSRRU DQFKRUDJH RQ RQH VLGH )RU &DVH  LQ
LQVWDOODWLRQ3ODFLQJDQDQFKRURQHDFKYHUWLFDO GLDSKUDJPVLQWHUUXSWHGE\ZDOOVLWLVQHFHVVDU\
IDFHRIWKHIUDPLQJPHPEHUDWHDFKFRQQHFWLRQ WR SURYLGH ZDOO DQFKRUV RQ ERWK VLGHV 7KH
LVDQHDV\PHWKRGRISURYLGLQJV\PPHWU\)RUD LQWHQW LV WKDW HYHU\ ZDOO EH DQFKRUHG LQWR WKH
FRQGLWLRQ ZLWK DQ H[LVWLQJ VLQJOHVLGHG ZDOO IUDPLQJ DQG WKDW WKH ORDGV EH GLVWULEXWHG LQWR
DQFKRU D VHFRQG QHZ ZDOO DQFKRU FDQ EH WKH GLDSKUDJP IRU VHLVPLF ORDGLQJ LQ HDFK
DGGHG EXW WKH QHZ DQFKRU VKRXOG FORVHO\ GLUHFWLRQ )RU &DVH  WKLV UHTXLUHV HLWKHU
PDWFKWKHH[LVWLQJDQFKRULQWHUPVRIVWLIIQHVV VXEGLDSKUDJPV RQ ERWK VLGHV RI WKH ZDOO RU
DQGVWUHQJWKXQOHVVWKHDQDO\VLVFRQVLGHUVWKH FRQWLQXLW\WLHVWKURXJKWKHZDOO
ULJLGLW\DQGVWUHQJWKVHH6HFWLRQ$
™ :KHUHWZRQHZDQFKRUVDUHSURYLGHGDQRIIVHW $&ROOHFWRUV,IFROOHFWRUVDUHQRWSUHVHQWDW
RI DQFKRUV DORQJ WKH OHQJWK RI WKH IUDPLQJ UHHQWUDQWFRUQHUVRULQWHULRUVKHDUZDOOVWKH\VKDOO
PHPEHU PD\ EH UHTXLUHG WR DYRLG IDVWHQHU EH SURYLGHG ([LVWLQJ RU QHZ FROOHFWRUV VKDOO EH
LQWHUIHUHQFH IRU DQFKRUV WKDW XVH VFUHZV RU GHVLJQHGIRUWKHFDSDFLW\UHTXLUHGWRGHYHORSLQWR
QDLOVUDWKHUWKDQWKURXJKEROWV WKH GLDSKUDJP D IRUFH HTXDO WR WKH OHVVHU RI WKH
URFNLQJRUVKHDUFDSDFLW\RIWKHUHHQWUDQWZDOORUWKH
$&RPELQDWLRQ RI DQFKRU W\SHV  1HZ
WULEXWDU\VKHDUEDVHGRQSHUFHQWRIWKHKRUL]RQWDO
DQFKRUV XVHG LQ FRPELQDWLRQ RQ D VLQJOH IUDPLQJ
PHPEHU VKDOO EH RI FRPSDWLEOH EHKDYLRU DQG IRUFHVVSHFLILHGLQWKH6%&WKH6%&WKH
6%&  DQG WKH 6%&  7KH FDSDFLW\ RI WKH
VWLIIQHVV
FROOHFWRU QHHG QRW H[FHHG WKH FDSDFLW\ RI WKH

6%&&& 

&+$37(5 $²($57+48$.( +$=$5' 5('8&7,21 ,1 (;,67,1* 5(,1)25&('
&21&5(7( $1' 5(,1)25&(' 0$6215< :$// %8,/',1*6 :,7+ )/(;,%/(
',$3+5$*06

GLDSKUDJP WR GHOLYHU ORDGV WR WKH FROOHFWRU $ 0D[LPXP IRUFH WKDW FDQ EH GHOLYHUHG E\ WKH
FRQQHFWLRQVKDOOEHSURYLGHGIURPWKHFROOHFWRUWR GLDSKUDJP9G Y//
WKHUHHQWUDQWZDOOWRWUDQVIHUWKHIXOOFROOHFWRUIRUFH ZKHUH
ORDG,IDWUXVVRUEHDPRWKHUWKDQDUDIWHURUSXUOLQ
LVVXSSRUWHGE\WKHUHHQWUDQWZDOORUE\DFROXPQ / /  'HSWK RI WKH GLDSKUDJP PHDVXUHG RQ
HDFKVLGHRIWKHUHWXUQRULQWHULRUZDOO
LQWHJUDOZLWKWKHUHHQWUDQWZDOOWKHQDQLQGHSHQGHQW
VHFRQGDU\FROXPQLVUHTXLUHGWRVXSSRUWWKHURRIRU Y $OORZDEOHGLDSKUDJPVKHDUYDOXHIURP6%&
IORRUPHPEHUVZKHQHYHUURFNLQJRUVKHDUFDSDFLW\ &KDSWHUWLPHVDIDFWRURI7KH
RIWKHUHHQWUDQWZDOOLVOHVVWKDQWKHWULEXWDU\VKHDU 1(+53 PD\ EH XVHG IRU VWUHQJWK GHVLJQ
YDOXHVIRUGLDJRQDOVKHDWKLQJ
™ $W UHHQWUDQW FRUQHUV DQG ILQ ZDOOV WKH
FRQFUHWH RU PDVRQU\ UHWXUQ ZDOOV PD\ KDYH ™ ,I WKH FROOHFWRU DQG FROOHFWRU FRQQHFWLRQ
EHHQ LJQRUHG LQ WKH GLDSKUDJP DQDO\VLV FDSDFLW\ H[FHHG HDFK RI WKH WKUHH FDSDFLWLHV
SHUIRUPHG LQ WKH RULJLQDO GHVLJQ %HFDXVH RI GLVFXVVHG DERYH WKHQ WRJHWKHU WKH\ ZLOO QRW
WKHLULQSODQHVWLIIQHVVWKHVHZDOOVZLOOIXQFWLRQ UHSUHVHQWWKHZHDNOLQNLQWKHVWUXFWXUHDQGQR
DV GLDSKUDJP VXSSRUWV DQG PD\ DWWUDFW YHU\ VWUHQJWKHQLQJ LV UHTXLUHG ,W VKRXOG EH QRWHG
ODUJH ORDGV EDVHG RQ WULEXWDU\ DUHD $OWKRXJK WKDW WKH FRQVHTXHQFHV RI IDLOXUH RI ZKLFKHYHU
ODFNRIFROOHFWRUVDWLQWHULRUPDVRQU\RUFRQFUHWH HOHPHQW DERYH KDV WKH ZHDNHVW FDSDFLW\
ZDOOV RU EUDFHG IUDPHV LV QRW FRPPRQ WKH VKRXOG EH FRQVLGHUHG HYHQ LI VXFK DQDO\VLV LV
ZDOOVPD\DWWUDFWODUJHUORDGVE\WULEXWDU\DUHD QRWUHTXLUHGE\WKLVFKDSWHU)RULQVWDQFHVKHDU
WKDQWKH\ZHUHGHVLJQHGIRUGXHWRFKDQJHVLQ IDLOXUHRIWKHZDOOPD\QRWEHDFFHSWDEOH
6%&  SURYLVLRQV LH LQFUHDVH LQ EDVH ™ 7KH HQJLQHHU VKRXOG FRQVLGHU SURYLGLQJ D
VKHDURULQWURGXFWLRQRIRYHUVWUHQJWKIDFWRU: UHGXQGDQW LQGHSHQGHQW YHUWLFDO VXSSRUW
(YHQ IRU QDUURZ UHODWLYHO\ IOH[LEOH ZDOOV EHQHDWK PDMRU IUDPLQJ PHPEHUV VXFK DV
GHIOHFWLRQRIWKHGLDSKUDJPVSDQQLQJEHWZHHQ JLUGHUVRUWUXVVHVVXSSRUWHGE\HQGVRIUHWXUQ
HQGZDOOVRIWKHEXLOGLQJPD\QRWEHFRPSDWLEOH RU LQWHULRU ZDOOV LI WKHVH ZDOOV DUH OLPLWHG LQ
ZLWK WKH GHIRUPDWLRQ RI WKH WRS RI WKHVH FDSDFLW\ZKHQHLWKHU9!9QRU9!95DQG9!
UHHQWUDQWRULQWHULRUPDVRQU\RUFRQFUHWHZDOOV 9GZKHUH9LVWKHGHPDQGRQWKHZDOOVWUHQJWK
7KLV GHIRUPDWLRQ LQFRPSDWLELOLW\ PD\ UHVXOW LQ GHVLJQ7KHIDLOXUHPRGHFRXOGEHVKHDULQWKH
GLDSKUDJP GDPDJH DQGRU VHSDUDWLRQ RI WKH UHLQIRUFHGFRQFUHWHRUUHLQIRUFHGPDVRQU\ZDOO
GLDSKUDJP IURP WKH UHWXUQ ZDOO $V DQ RUD G\QDPLFUHVSRQVHWKDWFDXVHVURFNLQJ LQ
DOWHUQDWLYH WR XVLQJ D GHIOHFWLRQ FRPSDWLELOLW\ WKHUHWXUQZDOO$ZDOOWKDWIDLOVLQLQSODQHVKHDU
DSSURDFKDVLPSOHFRPSDULVRQRIVWUHQJWKVRU PD\ORVHLWVFDSDFLW\WRVXSSRUWYHUWLFDOORDGV
FDSDFLWLHV LV UHFRPPHQGHG 7KH REMHFWLYH RI $ZDOOWKDWURFNVRQ LWVIRXQGDWLRQ PD\FDXVH
WKH FRPSDULVRQ LV WR ILQG WKH PLQLPXP ORDG GDPDJH WR WKH EHDULQJ VXUIDFH SURYLGLQJ
QHHGHGWRDGHTXDWHO\WLHWKHUHWXUQZDOOWRWKH VXSSRUWIRUWKHPHPEHUIUDPLQJRQWRWKHUHWXUQ
GLDSKUDJP 7KH FDSDFLWLHV RI WKH GLDSKUDJP ZDOO
V\VWHPRUWKHUHWXUQZDOOFRXOGEHHVWLPDWHGDV ™ 3URYLVLRQ RI D UHGXQGDQW VXSSRUW IRU VPDOOHU
IROORZVIRUDVLQJOHVWRU\VWUXFWXUH PHPEHUVVXFKDVSXUOLQVUDIWHUVRUVXESXUOLQV
LV QRW DV LPSRUWDQW ,W LV OLNHO\ WKDW ORVV RI
 5RFNLQJ FDSDFLW\ RI D ZDOO 7KH DFWXDO VXSSRUW IRU VXFK PLQRU URRI IUDPLQJ PHPEHUV
URFNLQJ FDSDFLW\ 95 RI WKH ZDOO VKDOO EH ZLOOQRWUHVXOWLQVLJQLILFDQWFROODSVHRUWKUHDWWR
FDOFXODWHG IURP DQ HTXLOLEULXP HTXDWLRQ OLIHVDIHW\
XVLQJ DOO WKH GHDG ORDGV RQ WKH ZDOOV ™ 1RWH WKDW IRU GHVLJQ SXUSRVHV WKH WKUHH
LQFOXGLQJWKHZHLJKWRIWKHZDOOWDNHQDERXW FDSDFLWLHVLGHQWLILHGDERYHURFNLQJFDSDFLW\RI
DQH[WUHPHHGJHRIWKHIRRWLQJ2WKHUIDFWRUV ZDOO VKHDU FDSDFLW\ RI ZDOO DQG GLDSKUDJP
VXFK DV VRLO ZHLJKW DQG FRQWULEXWLRQV IURP FDSDFLW\ DUH FRPSDUHG ZLWK WKH FROOHFWRU DQG
FRQWLQXRXV IRRWLQJV VKRXOG EH LQFOXGHG DV FROOHFWRUFRQQHFWLRQFDSDFLW\ZLWKRXWUHGXFWLRQ
XQGHUHVWLPDWLQJWKHRYHUWXUQLQJUHVLVWDQFHLQ 7KHIDFWRULVDSSOLHGWRFRGHGHVLJQIRUFHV
WKLVFRQWH[WLVQRWFRQVHUYDWLYH/RDGIDFWRUV RQO\
VSHFLILHG LQ WKH 6%&  WKDW SURYLGH WKH
PD[LPXPUHVLVWDQFHVKDOOEHDSSOLHG $0H]]DQLQHV([LVWLQJPH]]DQLQHVUHO\LQJ
RQUHLQIRUFHGFRQFUHWHRUUHLQIRUFHGPDVRQU\ZDOOV
 6KHDU FDSDFLW\ RI WKH ZDOO 9Q VKDOO EH WKH IRUYHUWLFDODQGRUODWHUDOVXSSRUWVKDOOEHDQFKRUHG
QRPLQDO VKHDU VWUHQJWK RI WKH ZDOO SURYLGHG
WRWKHZDOOVIRUWKHWULEXWDU\PH]]DQLQHORDG:DOOV
E\ WKH FRQFUHWH RU PDVRQU\ DQG VKHDU
UHLQIRUFHPHQWZLWKRXWDQ\VWUHQJWKUHGXFWLRQ GHSHQGLQJ RQ WKH PH]]DQLQH IRU ODWHUDO VXSSRUW
IDFWRU VKDOOEHDQFKRUHGSHU6HFWLRQV$$DQG
$

6%&&& 

&+$37(5 $²($57+48$.( +$=$5' 5('8&7,21 ,1 (;,67,1* 5(,1)25&('
&21&5(7( $1' 5(,1)25&(' 0$6215< :$// %8,/',1*6 :,7+ )/(;,%/(
',$3+5$*06

([FHSWLRQ  ([LVWLQJ PH]]DQLQHV WKDW KDYH ™ 7KLVFKDSWHUGRHVQRWUHTXLUHWKDWWKHIOH[XUDO

LQGHSHQGHQWODWHUDODQGYHUWLFDOVXSSRUWQHHGQRWEH VWUHQJWK RI WKH ZDOOV DQGRU SLODVWHUV EH
DQFKRUHGWRWKHZDOOV DQDO\]HGIRUODWHUDOORDGVIURPWKHPH]]DQLQH
+RZHYHULWLVUHFRPPHQGHGWKDWFRQVLGHUDWLRQ
™ ([LVWLQJEXLOGLQJVFRPPRQO\KDYHPH]]DQLQHV EH JLYHQ WR WKH H[LVWLQJ VWUHQJWK RI WKHVH
WKDW DUH XVHG IRU RIILFH RU OLJKW VWRUDJH HOHPHQWV EHIRUH PDNLQJ D GHFLVLRQ DERXW WKH
0H]]DQLQHVPD\EHGHSHQGHQWRQWKHZDOODQG DOWHUQDWLYHV RI SURYLGLQJ ODWHUDO EUDFLQJ EHORZ
SLODVWHUV IRU ODWHUDO VXSSRUW ,Q WKHVH WKH H[LVWLQJ PH]]DQLQH RU XVLQJ WKH ZDOO WR
FRQILJXUDWLRQVWKHVHLVPLFORDGRIDPH]]DQLQH WUDQVPLWWKHVHLVPLFORDGLQJRIWKHPH]]DQLQH
LV DGGLWLYH WR WKH VHLVPLF ORDG RI WKH ZDOOV IRU WR WKH URRI DQG VODERQJUDGH OHYHOV 7KLV LV
FDOFXODWLRQRIWKHDQFKRUDJHIRUFHDWWKHWRSRI HVSHFLDOO\ WUXH LI WKH PH]]DQLQH ZDV DGGHG
WKHZDOO7KLVFRPELQHGORDGLQJVKRXOGEHXVHG DIWHU WKH RULJLQDO FRQVWUXFWLRQ ,Q SDVW
IRUFDOFXODWLRQRIZDOODQFKRUDJHIRUFHVDWWKH HDUWKTXDNHV KRUL]RQWDO IOH[XUDO FUDFNV DQG
URRI GLDSKUDJP OHYHO DERYH DQG EHORZ LI ERZLQJ DWWULEXWDEOH WR PH]]DQLQH ORDGLQJ RQ
DSSOLFDEOH WKH PH]]DQLQH $Q DOWHUQDWLYH ZDOOVKDYHEHHQREVHUYHG
ZRXOG EH WR SURYLGH D ODWHUDO ORDGUHVLVWLQJ
V\VWHP IRU WKH PH]]DQLQH DQG XVH WKH 0$7(5,$/62)
PH]]DQLQHIRUVXSSRUWRIWKHDGMDFHQWZDOOV,Q &216758&7,21
HLWKHURIWKHVHFDVHVWKH PH]]DQLQHPXVWEH
DQFKRUHG WR WKH ZDOO ,I WKH PH]]DQLQH LV $0DWHULDOV$OOPDWHULDOVSHUPLWWHGE\WKH
LVRODWHG IURP WKH ZDOO LQ DFFRUGDQFH ZLWK WKH 6%&  LQFOXGLQJ WKHLU DSSURSULDWH VWUHQJWK RU
EXLOGLQJVHSDUDWLRQUHTXLUHPHQWRIWKH6%& DOORZDEOH VWUHVVHV PD\ EH XVHG WR PHHW WKH
DQG KDV LQGHSHQGHQW ODWHUDO DQG YHUWLFDO UHTXLUHPHQWVRIWKLVFKDSWHU
VXSSRUW QR FRQVLGHUDWLRQ RI WKH DQFKRUDJH RI ™ 7KLVVHFWLRQJHQHUDOO\JLYHVSHUPLVVLRQWRXVH
WKH PH]]DQLQH LV UHTXLUHG 7KLV LV ZKDW LV DQ\ PDWHULDO DOORZHG E\ WKH 6%&  DV
PHDQW E\ ³LQGHSHQGHQW ODWHUDO DQG YHUWLFDO DSSOLFDEOHWRWKHVLWXDWLRQ
VXSSRUW´LQWKHH[FHSWLRQ


6%&&& 

&+$37(5 $²($57+48$.( +$=$5' 5('8&7,21 ,1 (;,67,1* 5(,1)25&('
&21&5(7( $1' 5(,1)25&(' 0$6215< :$// %8,/',1*6 :,7+ )/(;,%/(
',$3+5$*06

/RPD 3ULHWD (DUWKTXDNH 5HFRQQDLVVDQFH 5HSRUW

™ %LEOLRJUDSK\
((5,6SHFWUD9RO6XSSOHPHQW0D\
7KHIROORZLQJUHVRXUFHPDWHULDOVZHUHXVHGLQWKH 1(+53 5HFRPPHQGHG 3URYLVLRQV IRU 6HLVPLF
SUHSDUDWLRQRIWKHFRPPHQWDU\IRUWKLVFKDSWHU 5HJXODWLRQ RI 1HZ %XLOGLQJV DQG 2WKHU
RIWKHFRGH 6WUXFWXUHV )(0$  3DUW  3URYLVLRQV
1RUWKULGJH (DUWKTXDNH 5HFRQQDLVVDQFH 5HSRUW :DVKLQJWRQ '& )HGHUDO (PHUJHQF\
9RO((5,6SHFWUD9RO6XSSOHPHQW&WR9RO 0DQDJHPHQW$JHQF\
-DQXDU\ 1(+53 5HFRPPHQGHG 3URYLVLRQV IRU 6HLVPLF
6($2& 5HFRPPHQGHG /DWHUDO )RUFH 5HJXODWLRQ RI 1HZ %XLOGLQJV DQG 2WKHU
5HTXLUHPHQWVDQG&RPPHQWDU\6DFUDPHQWR 6WUXFWXUHV )(0$  3DUW 
&$ 6WUXFWXUDO (QJLQHHUV $VVRFLDWLRQ RI 3URYLVLRQV :DVKLQJWRQ '& )HGHUDO
&DOLIRUQLD6HLVPRORJ\&RPPLWWHH (PHUJHQF\0DQDJHPHQW$JHQF\
7KH  :KLWWLHU (DUWKTXDNH ((5, 6SHFWUD 9RO
 1R  )HE  DQG 9RO  1R  0D\



6%&&& 

&+$37(5 $²35(6&5,37,9( 3529,6,216 )25 6(,60,& 675(1*7+(1,1* 2)
&5,33/( :$//6 $1' 6,// 3/$7( $1&+25$*( 2) /,*+7 :22')5$0(
5(6,'(17,$/%8,/',1*6

&+$37(5$²35(6&5,37,9(3529,6,216)256(,60,&
675(1*7+(1,1*2)&5,33/(:$//6$1'6,//3/$7(
$1&+25$*(2)/,*+7:22')5$0(5(6,'(17,$/
%8,/',1*6

127$33/,&$%/(1$
6HH,17(51$7,21$/([LVWLQJ%XLOGLQJ&RGH 

6%&&& 

&+$37(5 $²($57+48$.( 5,6. 5('8&7,21 ,1 :22')5$0(' 5(6,'(17,$/
%8,/',1*6:,7+62)7:($.2523(1)5217:$//6

&+$37(5$²($57+48$.(5,6.5('8&7,21,1:22'
)5$0('5(6,'(17,$/%8,/',1*6:,7+62)7:($.25
23(1)5217:$//6

127$33/,&$%/(1$
6HH,17(51$7,21$/([LVWLQJ%XLOGLQJ&RGH

6%&&& 

&+$37(5$²(DUWKTXDNH+D]DUG5HGXFWLRQLQ([LVWLQJ&RQFUHWH%XLOGLQJV

&+$37(5$²(DUWKTXDNH+D]DUG5HGXFWLRQLQ([LVWLQJ
&RQFUHWH%XLOGLQJV

JLYH UHDVRQDEOH FRQILGHQFH WKDW ³VSHFLDO

™ 3XUSRVH
UHLQIRUFHG FRQFUHWH PRPHQW IUDPHV´ ZLOO KDYH
™ $SSHQGL[ &KDSWHU $  DORQJ ZLWK WKH UHVW RI
WKHGHWDLOLQJUHTXLUHGIRUVXFKVWUXFWXUHV
$SSHQGL[$RIWKHFRGHLVUHIHUHQFHGE\6DXGL
™ 6XEVWDQWLDO GDPDJH DQG FROODSVH RI FRQFUHWH
%XLOGLQJ&RGHVLQWZRZD\V
EXLOGLQJV ZLWK LQDGHTXDWH GHWDLOLQJ ZDV
™ 6HFWLRQDOORZVWKHXVHRI$SSHQGL[$
REVHUYHG LQ WKH 6DQ )HUQDQGR HDUWKTXDNH RI
IRUTXDOLI\LQJEXLOGLQJVZKHQ³UHGXFHG6%&
 86 'HSDUWPHQW RI &RPPHUFH 
OHYHOVHLVPLFIRUFHV´DUHWULJJHUHG
WKH 0H[LFR &LW\ HDUWKTXDNH RI  ((5,
™ 6HFWLRQDOORZVWKHXVHRI$SSHQGL[$IRU
WKH:KLWWLHU1DUURZVHDUWKTXDNHRI
YROXQWDU\VHLVPLFUHWURILW
((5,  WKH /RPD 3ULHWD HDUWKTXDNH RI
™ $SSHQGL[ &KDSWHU $  DGGUHVVHV VWUXFWXUHV
 ((5, WKH 1RUWKULGJH HDUWKTXDNH
ZKHUH WKH JUDYLW\ DQG VHLVPLF ORDGUHVLVWLQJ
RI  ((5,  WKH .REH -DSDQ
V\VWHPFRQVLVWVRIEHDULQJZDOOVFROXPQVDQG
HDUWKTXDNH RI  ((5,  WKH ,]PLW
EHDPV RI UHLQIRUFHG FDVWLQ SODFH FRQFUHWH
7XUNH\HDUWKTXDNHRI((5,DQG
FRQVWUXFWLRQ 7KH DELOLW\ RI WKHVH VWUXFWXUHV WR
WKH &KL&KL 7DLZDQ HDUWKTXDNH RI 
GLVVLSDWHVHLVPLFHQHUJ\LVVWURQJO\GHSHQGHQW
((5,  $OVR PRUH UHFHQW HDUWKTXDNHV
RQ WKH GHWDLOLQJ RI WKH UHLQIRUFLQJ 2OGHU
VXFK DV WKH  HDUWKTXDNH LQ O¶$TXLOD ,WDO\
UHLQIRUFHG FRQFUHWH EXLOGLQJV ZLWK LQDGHTXDWH
3URJHWWD]LRQH 6LVPLFD  DQG WKH 
GHWDLOLQJ FDQ H[SHULHQFH VXGGHQ EULWWOH
&KULVWFKXUFK HDUWKTXDNH LQ 1HZ =HDODQG
IDLOXUHVDVRSSRVHGWRFRQWUROOHGORFDOGDPDJH
FDXVHG VXEVWDQWLDO GDPDJH WR FRQFUHWH
3DVW SHUIRUPDQFH KDV VKRZQ WKDW VWURQJ
EXLOGLQJV)XUWKHUDGLVSURSRUWLRQDWHORVVRIOLIH
JURXQGVKDNLQJFDQFDXVHWKHVHEXLOGLQJVWREH
ZDV DVVRFLDWHG ZLWK WKH FROODSVH RI D OLPLWHG
KHDYLO\ GDPDJHG RU FROODSVH FDXVLQJ VHULRXV
QXPEHU RI FRQFUHWH EXLOGLQJV ZLWK LQDGHTXDWH
LQMXU\RUORVVRIOLIHRIWKHRFFXSDQWVRUSDVVHUV
GHWDLOLQJ EHFDXVH WKH RFFXSDQF\ RI WKHVH VR
E\
FDOOHG QRQGXFWLOH EXLOGLQJV WHQGV WR EH DERYH
™ &RGHUHTXLUHGGHWDLOLQJIRUUHLQIRUFHGFRQFUHWH
DYHUDJHWKHUHODWLYHPDVVZHLJKWRIIORRUDQG
IUDPH VHLVPLF IRUFHUHVLVWLQJ V\VWHPV ³VSDFH
URRIFRQVWUXFWLRQLVVHYHUDOWLPHVJUHDWHUWKDQ
IUDPHGXFWLOH PRPHQW UHVLVWLQJ´ FKDQJHG LQ
VWHHO IUDPH DQG OLJKWIUDPHG EXLOGLQJV DQG
WKH  8QLIRUP %XLOGLQJ &RGH 8%& 7KH
VWLIIQHVVDQGVWUHQJWKGHJUDGDWLRQRIUHLQIRUFHG
HIIHFWLYHQHVV RI WKHVH GHVLJQ DQG GHWDLOLQJ
FRQFUHWH V\VWHPV VLJQLILFDQWO\ DIIHFWV WKH
UHYLVLRQV ZDV FRQILUPHG E\ GDPDJH VXUYH\V
IUDJLOLW\ RI WKH JUDYLW\ ORDGFDUU\LQJ V\VWHP
PDGHDIWHUWKH6DQ)HUQDQGRHDUWKTXDNH
6WLIIQHVV GHJUDGDWLRQ LH FUDFNLQJ RI WKH
7KH8%&FKDQJHVZHUHRQO\DSSOLFDEOHWR
FRQFUHWH PD\ UHVXOW LQ FRQFHQWUDWLRQ RI
8%& ³]RQHV´  DQG  LQ D VHLVPLF KD]DUG
QRQOLQHDU GLVSODFHPHQWV LQDIHZVWRULHV7KLV
PDSSLQJWKDWKDVOLWWOHUHODWLRQVKLSZLWKFXUUHQW
PD\H[DFHUEDWHVKHDUVWUHQJWKGHJUDGDWLRQLQ
6%&KD]DUGPDSSLQJ7KRXJKWKHUHZHUH
SODVWLFKLQJH]RQHVDQGUHVXOWLQORVVRIYHUWLFDO
IHZ FKDQJHV LQ GHWDLOLQJ UHTXLUHPHQWV JRLQJ
VXSSRUW LQ ZDOOV DQG FROXPQV 7KHUHIRUH WKH
IURP WKH  8%& WR WKH  8%& WKH
FRQVHQVXV DPRQJ EXLOGLQJ RIILFLDOV DQG
VHLVPLFORDGLQJUHTXLUHPHQWVRIWKH8%&
HQJLQHHUV LV WKDW H[LVWLQJ FRQFUHWH EXLOGLQJV
ZHUHVLJQLILFDQWO\KLJKHU%XLOGLQJVGHVLJQHGLQ
FRYHUHGE\WKLVFKDSWHUFDQSRVHDVLJQLILFDQW
DFFRUGDQFHZLWKWKH6%&FDQWKHUHIRUHEH
VHLVPLFULVN
H[SHFWHG WR KDYH VXSHULRU SHUIRUPDQFH DQG
™ 7KHLPSDFWRILPSURYHGNQRZOHGJHFRGHVDQG
DUH VHOHFWHG DV WKH EHQFKPDUN EXLOGLQJ LQ
GHVLJQ SUDFWLFHV ZLOO EH OLPLWHG WR WKRVH
6HFWLRQ$
UHODWLYHO\ IHZ UHFHQW EXLOGLQJV WKDW WDNH
™ %HFDXVHDWWHQWLRQWRGHWDLOLQJZDVW\SLFDOO\QRW
DGYDQWDJH RI WKLV LPSURYHG NQRZOHGJH 7KXV
DSULRULW\SULRUWRFDXWLRQLVUHFRPPHQGHG
WKH GRPLQDQW SROLF\ LVVXHV SRVHG E\
IRU DFFHSWLQJ ZKDW DSSHDUV WR EH DGHTXDWH
HDUWKTXDNHV LQYROYH QRW QHZ EXW H[LVWLQJ
GHWDLOLQJ RQ FRQWUDFW GRFXPHQWV IRU SUH
EXLOGLQJV SDUWLFXODUO\ WKRVH VWUXFWXUHV WKDW
EXLOGLQJVZLWKRXWYHULILFDWLRQE\GHVWUXFWLYHDQG
KDYH REYLRXV ZHDNQHVVHV DQG GR QRW FRPSO\
QRQGHVWUXFWLYHPHWKRGV7KHDGRSWLRQGDWHVLQ
ZLWK WKH JHQHUDO LQWHQW DQG QHFHVVDU\
6HFWLRQ $  >WKH  %2&$ 1DWLRQDO
UHTXLUHPHQWVRIFXUUHQWUHJXODWLRQV7KHLVVXH
%XLOGLQJ &RGH RI &DQDGD 1%&@ 
EHIRUHWKHSXEOLFDQGWKHSURIHVVLRQDOVLVKRZ
6WDQGDUG%XLOGLQJ&RGH6%&DQG8%&

6%&&& 

&+$37(5$²(DUWKTXDNH+D]DUG5HGXFWLRQLQ([LVWLQJ&RQFUHWH%XLOGLQJV

WRVHWVWDQGDUGVIRUWKHVHQRQFRPSOLDQWH[LVWLQJ RQJRLQJ DFWLYLWLHV RI WKH 6WUXFWXUDO (QJLQHHUV

EXLOGLQJV FRQVLVWHQW ZLWK ERWK WKH GHVLUH IRU $VVRFLDWLRQ RI &DOLIRUQLD¶V 6($2& ([LVWLQJ
VDIHW\ DQG WKH OLPLWHG UHVRXUFHV DYDLODEOH WR %XLOGLQJ &RPPLWWHH UHODWHG WR WKH DQDO\VLV RI
DFKLHYHLPSURYHGVDIHW\ QRQGXFWLOH FRQFUHWH EXLOGLQJV VXFK DV
™ ,W LV UHDVRQDEOH WR WDNH VWHSV WR VLJQLILFDQWO\ $SSHQGL[ &KDSWHU $ RI WKH *XLGHOLQHV IRU
UHGXFH WKLV ULVN 7KH REMHFWLYH RI $SSHQGL[ 6HLVPLF5HWURILWRI([LVWLQJ%XLOGLQJV*65(%
&KDSWHU$LVWKHUHGXFWLRQRUPLWLJDWLRQRIULVN ,&&
WRWKHJUHDWHVWH[WHQWSUDFWLFDEOH$SSOLFDWLRQRI ™ 7KHSHUIRUPDQFHJRDORI$SSHQGL[&KDSWHU$
WKHVHSURYLVLRQVZLOOGHFUHDVHWKHSUREDELOLW\RI LVORZHUWKDQWKHSHUIRUPDQFHJRDOVHWIRUQHZ
ORVVRIOLIHEXWZLWKRXWDJXDUDQWHHWKDWORVVRI FRQVWUXFWLRQVLQFHWKHIRUFHOHYHOXVHGIRU7LHU
OLIH ZLOO EH SUHYHQWHG $OVR WKH SRVVLELOLW\ RI DQG7LHUDQDO\VHVLVSHUFHQWRIFXUUHQW
PDMRUSHUKDSVLUUHSDUDEOHGDPDJHVKRXOGEH FRGH 8VH RI D UHGXFHG VHLVPLF GHVLJQ IRUFH
DFFHSWHGDVORQJDVWKHUHLVDGHFUHDVHLQWKH FRUUHVSRQGV WR D ³UHGXFHG UHKDELOLWDWLRQ
OLNHOLKRRG RI FROODSVH 7KH SURYLVLRQV LQ WKLV REMHFWLYH 6HFWLRQ  RI $6&(  ,W
FKDSWHU ZHUH GHULYHG PDLQO\ IURP VHYHUDO VKRXOGEHUHFRJQL]HGWKDWWKHHFRQRPLFFRVWV
VRXUFHV7KHWKUHHWLHUHGDSSURDFKLVEDVHGRQ DQGGLIILFXOW\RIVWUHQJWKHQLQJH[LVWLQJEXLOGLQJV
$6&(  ZKLFK VSHFLILHV PHWKRGRORJLHV WR QHFHVVLWDWHV UHOLDQFH RQ EXLOGLQJ FRPSRQHQWV
DQDO\]H H[LVWLQJ FRQFUHWH EXLOGLQJV 7KHVH ZLWK VHLVPLF SHUIRUPDQFH FKDUDFWHULVWLFV WKDW
SURYLVLRQV IXUWKHU GUDZ RQ WKH SURYLVLRQV IRU DUHOHVVWKDQLGHDO
DQDO\VLV RI H[LVWLQJ UHLQIRUFHG FRQFUHWH ™ $QDO\VLV RI FRQFUHWH PRPHQWUHVLVWLQJ IUDPH
EXLOGLQJVGHYHORSHGE\WKH&LW\RI/RV$QJHOHV EXLOGLQJVZLWKXQUHLQIRUFHGPDVRQU\LQILOOLVQR
%XLOGLQJ &RGH )LQDOO\ WKLV FKDSWHU EXLOGV RQ ORQJHUFRYHUHGLQ$SSHQGL[&KDSWHU$
%XLOGLQJV WKDW ZHUH GHVLJQHG DQG FRQVWUXFWHG LQ
DFFRUGDQFHZLWKWKHVHLVPLFSURYLVLRQVRIWKH6%&
385326(  VKDOO EH GHHPHG WR FRPSO\ ZLWK WKHVH
$3XUSRVH7KHSXUSRVHRIWKLVFKDSWHULVWR SURYLVLRQVXQOHVVWKHVHLVPLFLW\RIWKHUHJLRQKDV
SURPRWHSXEOLFVDIHW\DQGZHOIDUHE\UHGXFLQJWKH LQFUHDVHGVLQFHWKHGHVLJQRIWKHEXLOGLQJ
ULVNRIORVVRIOLIHRUSK\VLFDOLQMXU\DQGGDPDJHWR
([FHSWLRQ  7KLV FKDSWHU VKDOO QRW DSSO\ WR
SURSHUW\ WKDW PD\ UHVXOW IURP WKH HIIHFWV RI
EXLOGLQJVDVVLJQHGWR5LVN&DWHJRU\,9
HDUWKTXDNHV RQ FRQFUHWH EXLOGLQJV DQG FRQFUHWH
IUDPHEXLOGLQJV ™ 1RWH WKDW WKLV H[FHSWLRQ LV QRW DSSOLFDEOH IRU
7KH SURYLVLRQV RI WKLV FKDSWHU DUH LQWHQGHG DV GLDSKUDJPV RI FRQFUHWH PRPHQW IUDPHV 7KLV
PLQLPXP VWDQGDUGV IRU VWUXFWXUDO VHLVPLF FKDSWHUGRHVQRWFRYHUFRQFUHWHEXLOGLQJVZLWK
IOH[LEOH GLDSKUDJPV VXFK DV XQWRSSHG VWHHO
UHVLVWDQFHDQGDUHHVWDEOLVKHGSULPDULO\WRUHGXFH
GHFNLQJRUZRRGVWUXFWXUDOSDQHOV
WKH ULVN RI ORVV RI OLIH RU SK\VLFDO LQMXU\ ™ 7KH DQDO\VLV RI FRQFUHWH PRPHQWUHVLVWLQJ
&RPSOLDQFHZLWKWKHSURYLVLRQVLQWKLVFKDSWHUZLOO IUDPHG EXLOGLQJV ZLWK XQUHLQIRUFHG PDVRQU\
QRW QHFHVVDULO\ SUHYHQW ORVV RI OLIH RU LQMXU\ RU LQILOO LV QRW FRYHUHG LQ $SSHQGL[ &KDSWHU $
SUHYHQW HDUWKTXDNH GDPDJH WR WKH UHKDELOLWDWHG 7KHFRPSOH[EHKDYLRURIWKHVHEXLOGLQJVGRHV
EXLOGLQJV QRWILWWKHWKUHHWLHUHGDSSURDFKDGRSWHGLQWKLV
FKDSWHU
™ 7KH SXUSRVH RI WKLV FKDSWHU LV WR LGHQWLI\ DQG
™ 7KH FRQFHSW RI ³EHQFKPDUN EXLOGLQJ´ XVHG LQ
UHGXFHWKHOLNHOLKRRG RIVLJQLILFDQWHDUWKTXDNH
$6&(  LV DGRSWHG WR OLPLW WKH VFRSH RI WKLV
GDPDJH DQG FROODSVH RI H[LVWLQJ FRQFUHWH
FKDSWHU :KLOH EHQFKPDUN EXLOGLQJV QHHG QRW
EXLOGLQJVGHVLJQHGDQGFRQVWUXFWHGSULRUWRWKH
SURFHHG ZLWK IXUWKHU HYDOXDWLRQ WKH GHVLJQ
DGRSWLRQRIWKHEXLOGLQJFRGHVOLVWHGLQ6HFWLRQ
SURIHVVLRQDO VKRXOG GHPRQVWUDWH WKDW WKH
$
EXLOGLQJ LV FRPSOLDQW ZLWK WKH EHQFKPDUN
6&23( GRFXPHQW %HQFKPDUN EXLOGLQJV DUH GHHPHG
OLNHO\WRKDYHLPSURYHGSHUIRUPDQFHFRPSDUHG
$6FRSH7KHSURYLVLRQVRIWKLVFKDSWHUVKDOO WR SUHEHQFKPDUN EXLOGLQJV DQG WR QRW UHTXLUH
DSSO\ WR DOO EXLOGLQJV KDYLQJ FRQFUHWH IORRUV RU VWUHQJWKHQLQJ³XQOHVVWKHPDSSHGVHLVPLFLW\RI
URRIVVXSSRUWHGE\UHLQIRUFHGFRQFUHWHZDOOVRUE\ WKHUHJLRQKDVLQFUHDVHGVLQFHWKHGHVLJQRIWKH
FRQFUHWHIUDPHVDQGFROXPQV7KLVFKDSWHUVKDOOQRW EXLOGLQJ´ 7KLV SURYLVLRQ HQDEOHV WKH DXWKRULW\
DSSO\ WR EXLOGLQJV ZLWK URRI GLDSKUDJPV WKDW DUH KDYLQJ MXULVGLFWLRQ WR GHFLGH ZKHWKHU QHZHU
GHILQHGDVIOH[LEOHGLDSKUDJPVE\WKH6%&DQG EXLOGLQJV GHVLJQHG LQ DFFRUGDQFH ZLWK WKH
VKDOO QRW DSSO\ WR FRQFUHWH IUDPH EXLOGLQJV ZLWK VHLVPLF SURYLVLRQV RI PRUH UHFHQW EXLOGLQJ
FRGHV FRPSO\ 8QLQWHQWLRQDOO\ WKLV H[FHSWLRQ
PDVRQU\LQILOOHGZDOOV
FRXOGEHPLVLQWHUSUHWHGWRQHDUO\HOLPLQDWHWKH
FRQFHSW RI WKH EHQFKPDUN EXLOGLQJ DQG WKH

6%&&& 

&+$37(5$²(DUWKTXDNH+D]DUG5HGXFWLRQLQ([LVWLQJ&RQFUHWH%XLOGLQJV

GHVLJQ SURIHVVLRQDO LV HQFRXUDJHG WR YHULI\ ™ $OO DYDLODEOH GDWD UHODWLQJ WR WKH GHVLJQ DQG
ZKDWWKHORFDOLQWHUSUHWDWLRQRIWKHVHSURYLVLRQV GHWDLOLQJRIWKHH[LVWLQJEXLOGLQJVKDOOEHXVHGLQ
LVEHIRUHMXGJLQJDEXLOGLQJFRPSOLDQWEDVHGRQ WKHDQDO\VLV
WKHEXLOGLQJFRGHXVHGIRULWVGHVLJQ ™ 7KH PDWHULDO SURSHUWLHV XVHG LQ 7LHU 
™ &KDSWHU$LVLQWHQGHGWRLPSURYHDEXLOGLQJ¶V SURFHGXUHV VKDOO EH QRPLQDO YDOXHV :KHQ
SHUIRUPDQFH ZLWK UHVSHFW WR VDIHW\ EXW QRW VXIILFLHQW LQIRUPDWLRQ UHJDUGLQJ WKH PDWHULDO
QHFHVVDULO\ ZLWK UHVSHFW WR SRVWHDUWKTXDNH SURSHUWLHVLVQRWDYDLODEOHLQWKHRULJLQDOGHVLJQ
IXQFWLRQDOLW\ RU UHFRYHU\ $V VXFK LW LV QRW DQG FRQVWUXFWLRQ GRFXPHQWV PDWHULDO
DSSOLFDEOH WR EXLOGLQJV DVVLJQHG WR 5LVN SURSHUWLHVVKDOOEHGHWHUPLQHGE\VDPSOLQJDQG
&DWHJRU\,9 WHVWLQJ DV VSHFLILHG LQ 6%&  1RPLQDO
PDWHULDOYDOXHVXVHGLQ7LHUDQDO\VHVVKRXOG
*(1(5$/ EHUHGXFHGE\WKHFDSDFLW\UHGXFWLRQIDFWRUVRI
5(48,5(0(176 6%&LQDFFRUGDQFHZLWK6HFWLRQ$
$*HQHUDO  7KLV FKDSWHU SURYLGHV D WKUHH $6WUXFWXUDO REVHUYDWLRQ WHVWLQJ DQG
WLHUHG SURFHGXUH WR HYDOXDWH WKH QHHG IRU VHLVPLF LQVSHFWLRQ 6WUXFWXUDOREVHUYDWLRQLQDFFRUGDQFH
UHKDELOLWDWLRQ RI H[LVWLQJ FRQFUHWH EXLOGLQJV 7KH ZLWK6HFWLRQRI6%&VKDOOEHUHTXLUHGIRU
HYDOXDWLRQVKDOOVKRZWKDWWKHH[LVWLQJEXLOGLQJLVLQ DOO VWUXFWXUHV LQ ZKLFK VHLVPLF UHWURILW LV EHLQJ
FRPSOLDQFH ZLWK WKH DSSURSULDWH SDUW RI WKH SHUIRUPHG LQ DFFRUGDQFH ZLWK WKLV FKDSWHU
HYDOXDWLRQSURFHGXUHDVGHVFULEHGLQ6HFWLRQ$ 6WUXFWXUDO REVHUYDWLRQ VKDOO LQFOXGH YLVXDO
6HFWLRQ $ DQG 6HFWLRQ $ RU VKDOO EH REVHUYDWLRQ RI ZRUN IRU FRQIRUPDQFH WR WKH
PRGLILHGWR FRQIRUPWR WKH UHVSHFWLYHDFFHSWDQFH DSSURYHGFRQVWUXFWLRQGRFXPHQWVDQGFRQILUPDWLRQ
FULWHULD7KLVFKDSWHUGRHVQRWSUHFOXGHDEXLOGLQJ RIH[LVWLQJFRQGLWLRQVDVVXPHGGXULQJGHVLJQ
IURPEHLQJHYDOXDWHGRUPRGLILHGWRFRQIRUPWRWKH 6WUXFWXUDO WHVWLQJ DQG LQVSHFWLRQ IRU QHZ
DFFHSWDQFH FULWHULD XVLQJ RWKHU ZHOOHVWDEOLVKHG FRQVWUXFWLRQPDWHULDOVVKDOOEHLQDFFRUGDQFHZLWK
SURFHGXUHVEDVHGRQUDWLRQDOPHWKRGVRIDQDO\VLV WKH EXLOGLQJ FRGH H[FHSW DV PRGLILHG E\ WKLV
LQ DFFRUGDQFH ZLWK SULQFLSOHV RI PHFKDQLFV DQG FKDSWHU
DSSURYHGE\WKHDXWKRULW\KDYLQJMXULVGLFWLRQ
™ 6LPLODU WR QHZ FRQVWUXFWLRQ VWUXFWXUDO
™ $VDUHVXOWRIWKHXVHRIUHGXFHGOHYHOVHLVPLF REVHUYDWLRQLVFULWLFDOIRUTXDOLW\FRQWUROGXULQJ
IRUFHVDVSHU 6%&DFKLHYLQJFRPSOLDQFH FRQVWUXFWLRQRIDQ\UHWURILWRIH[LVWLQJEXLOGLQJV
WKURXJK7LHURUDQDO\VLVKDVDVLJQLILFDQW 7KHVWUXFWXUDOREVHUYDWLRQUHTXLUHGE\6HFWLRQ
LPSDFWRQWKHFRVWVRIWKHUHVXOWLQJUHSDLUDQG $ ZLOO KHOS HQVXUH WKDW WKH FRQVWUXFWLRQ
UHWURILWUHTXLUHPHQWV FRQIRUPV WR WKH DSSURYHG FRQVWUXFWLRQ
™ ,I WKH EXLOGLQJ IDLOV DFFHSWDQFH E\ 7LHU  GRFXPHQWV ,Q DGGLWLRQ VWUXFWXUDO REVHUYDWLRQ
HYDOXDWLRQ WKH HQJLQHHU PD\ UHDQDO\]H WKH FDQ DOVR SURYLGH D XQLTXH RSSRUWXQLW\ IRU
VWUXFWXUDO V\VWHP E\ 7LHU  SURFHGXUHV ,I WKH FRQILUPDWLRQRIVWUXFWXUDOGHWDLOVWKDWPD\DIIHFW
EXLOGLQJ IDLOV DFFHSWDQFH E\ WKH 7LHU  WKHPRGHOLQJDQGGHVLJQDVVXPSWLRQV
SURFHGXUHWKH7LHU SURFHGXUHPD\EHXVHG ™ 6WUXFWXUDO WHVWLQJ DQG LQVSHFWLRQ IRU QHZ
IRUDFFHSWDQFHRIWKHH[LVWLQJVWUXFWXUDOV\VWHP FRQVWUXFWLRQ PDWHULDOV VKDOO EH LQ DFFRUGDQFH
,IWKHEXLOGLQJFDQQRWEHVKRZQWRZRUNE\DQ\ ZLWKWKH6%&
RI WKHVH PHWKRGV WKH EXLOGLQJ VKDOO EH
VWUHQJWKHQHG VR WKDW LW PHHWV WKH DFFHSWDQFH 6,7(*5281'027,21
FULWHULDRIRQHRUPRUHRIWKHWKUHHWLHUV $6LWH JURXQG PRWLRQ IRU 7LHU  DQDO\VLV
$3URSHUWLHV RI FDVWLQSODFH PDWHULDOV 7KHHDUWKTXDNHORDGLQJXVHGIRUWKHGHWHUPLQDWLRQ
([FHSW ZKHUH VSHFLILFDOO\ SHUPLWWHG KHUHLQ WKH RI GHPDQG RQ HOHPHQWV RI WKH VWUXFWXUH VKDOO
VWUHVVVWUDLQ UHODWLRQVKLS RI FRQFUHWH DQG FRUUHVSRQGWRWKDWUHTXLUHGE\6%&
UHLQIRUFHPHQWVKDOOEHGHWHUPLQHGIURPSXEOLVKHG ™ 7KHVHLVPLFIRUFHXVHGIRU7LHUDQDO\VHVPD\
GDWD RU E\ WHVWLQJ $OO DYDLODEOH LQIRUPDWLRQ EHKLJKHUWKDQWKDWXVHGIRU7LHUDQDO\VHVWR
LQFOXGLQJEXLOGLQJSODQVRULJLQDOFDOFXODWLRQVDQG OLPLWWKHSRVVLELOLW\WKDWDEXLOGLQJZLWKPDUJLQDO
GHVLJQ FULWHULD VLWH REVHUYDWLRQV WHVWLQJ DQG VWUHQJWK DQG GHWDLOLQJ ZLOO EH GHWHUPLQHG
UHFRUGV RI W\SLFDO PDWHULDOV DQG FRQVWUXFWLRQ FRPSOLDQWZLWK$SSHQGL[&KDSWHU$
SUDFWLFHVSUHYDOHQWDWWKHWLPHRIFRQVWUXFWLRQVKDOO $6LWH JURXQG PRWLRQ IRU 7LHU  DQDO\VLV
EH FRQVLGHUHG ZKHQ GHWHUPLQLQJ PDWHULDO 7KHHDUWKTXDNHORDGLQJXVHGIRUWKHGHWHUPLQDWLRQ
SURSHUWLHV RI GHPDQG RQ HOHPHQWV DQG WKH VWUXFWXUH VKDOO
)RU 7LHU  DQDO\VLV ORZHUERXQG DQG H[SHFWHG FRQIRUPWRSHUFHQWRIWKDWUHTXLUHGE\WKH6%&
PDWHULDO SURSHUWLHV VKDOO EH HVWDEOLVKHG LQ 
DFFRUGDQFHZLWKWKH6%&

6%&&& 

&+$37(5$²(DUWKTXDNH+D]DUG5HGXFWLRQLQ([LVWLQJ&RQFUHWH%XLOGLQJV

™ 7KHHDUWKTXDNHORDGLQJXVHGIRUGHWHUPLQDWLRQ  6LWHLQVSHFWLRQVXPPDU\

RIWKHGHPDQGRQHOHPHQWVIRUD7LHUDQDO\VLV  6XPPDU\RIUHYLHZHGUHFRUGGRFXPHQWV
LV UHGXFHG WR  SHUFHQW RI WKDW UHTXLUHG E\  (DUWKTXDNH GHVLJQ GDWD XVHG IRU WKH
FXUUHQW FRGH 7KLV HDUWKTXDNH ORDGLQJ LV HYDOXDWLRQRIWKHEXLOGLQJ
LQFUHDVHGE\WKHLPSRUWDQFHIDFWRURI6%&
 &RPSOHWHGFKHFNOLVWV
ZKHQDSSOLFDEOH7KLVUHGXFWLRQLQHDUWKTXDNH
GHPDQGLVFRQVLVWHQWZLWK&KDSWHURI$6&(  4XLFNFKHFNDQDO\VLVFDOFXODWLRQV
 7KH  IDFWRU LV FRQVLVWHQW ZLWK  6XPPDU\RIGHILFLHQFLHV
KLVWRULFDO UHWURILW UHTXLUHPHQWV LV LGHQWLFDO WR ™ 7KHHYDOXDWLRQUHSRUWLVLQWHQGHGWRVXPPDUL]H
WKDW XVHG LQ $6&(  IRU 7LHU  DQDO\VHV WKH HYDOXDWLRQ SHUIRUPHG DQG IDFLOLWDWH UHYLHZ
DQGQHDULGHQWLFDOWRWKDWXVHGIRU)(0$ E\WKHEXLOGLQJRIILFLDO7KHUHSRUWVKRXOGVWDWH
-XQH1(+53+DQGERRNIRUWKH 6HLVPLF FOHDUO\ WKDW RQO\ FRPSOLDQW LWHPV H[LVW LQ WKH
(YDOXDWLRQRI([LVWLQJ%XLOGLQJVDQDO\VHV EXLOGLQJDQGDVVXFKQRUHKDELOLWDWLRQPHDVXUHV
$6LWH JURXQG PRWLRQ IRU 7LHU  DQDO\VLV DUHQHFHVVDU\RUQRQFRPSOLDQWLWHPVGRH[LVW
LQWKHEXLOGLQJDQGZKDWVXEVHTXHQWVWHSVDUH
7KH VLWH JURXQGPRWLRQVKDOOEH DQ HODVWLFGHVLJQ
WR EH IROORZHG E\ WKH GHVLJQ SURIHVVLRQDO WR
UHVSRQVHVSHFWUXPSUHSDUHGLQFRQIRUPDQFHWRWKH DGGUHVV WKHVH LWHPV $V QRWHG LQ 6HFWLRQ
6%&  EXW KDYLQJ VSHFWUDO DFFHOHUDWLRQ YDOXHV $WKHGHVLJQSURIHVVLRQDOKDVWKHRSWLRQ
HTXDO WR  SHUFHQW RI WKH FRGH GHVLJQ UHVSRQVH RISHUIRUPLQJVXEVHTXHQWDQDO\VHV7LHUVRU
VSHFWUXP7KHVSHFWUDODFFHOHUDWLRQYDOXHVVKDOOEH  WR VKRZ WKDW WKH QRQFRPSOLDQW LWHPV DUH
LQFUHDVHGE\WKHRFFXSDQF\LPSRUWDQFHIDFWRUZKHQ DFFHSWDEOH RU LI QRW DFFHSWDEOH WR SXUVXH D
UHTXLUHGE\WKH6%& PLWLJDWLRQ HIIRUW WR FRUUHFW WKH GHILFLHQFLHV
QRWHGIURPWKH7LHUDQDO\VLV
™ 7KHORDGLQJFULWHULRQIRUD7LHUDQDO\VLVLVDQ ™ :KHQDVXEVHTXHQWDQDO\VLVLVSHUIRUPHGWKH
HODVWLF GHVLJQ UHVSRQVH VSHFWUXP FRPSDWLEOH UHSRUWUHTXLUHGXQGHUWKLVVHFWLRQLVLQWHQGHGWR
ZLWKPDSSHGVSHFWUDODFFHOHUDWLRQDQGYHORFLW\ EH XVHG DV VXSSRUWLQJ GRFXPHQWDWLRQ IRU
SDUDPHWHUV DV PRGLILHG E\ VLWH VRLO FODVV OLPLWLQJ WKH DQDO\VLV WR RQO\ WKH QRQFRPSOLDQW
IDFWRUV 7KH VSHFWUDO DFFHOHUDWLRQ YDOXHV VKDOO LWHPV
EH UHGXFHG WR  SHUFHQW RI WKH GHVLJQEDVLV
JURXQG PRWLRQ VLPLODU WR WKDW SHUPLWWHG IRU D 7,(5$1$/<6,6
7LHU  DQDO\VLV 7KH VSHFWUDO DFFHOHUDWLRQ 352&('85(
YDOXHVDUHLQFUHDVHGE\RFFXSDQF\LPSRUWDQFH
IDFWRUV UHODWHG WR WKH EXLOGLQJ¶V ULVN FDWHJRU\ $*HQHUDO  $ 7LHU  DQDO\VLV LQFOXGHV DQ
ZKHQDSSOLFDEOH DQDO\VLVXVLQJWKHIROORZLQJOLQHDUPHWKRGV6WDWLF
RU HTXLYDOHQW ODWHUDO IRUFH SURFHGXUHV $ OLQHDU
7,(5$1$/<6,6 G\QDPLF DQDO\VLV PD\ EH XVHG WR GHWHUPLQH WKH
352&('85( GLVWULEXWLRQRIWKHEDVHVKHDURYHUWKHKHLJKWRIWKH
$*HQHUDO  6WUXFWXUHV FRQIRUPLQJ WR WKH VWUXFWXUH7KHDQDO\VLVDVDPLQLPXPVKDOODGGUHVV
UHTXLUHPHQWVRI&KDSWHU$6FUHHQLQJ3KDVHDUH DOOSRWHQWLDOGHILFLHQFLHVLGHQWLILHGLQ7LHUXVLQJ
SHUPLWWHGWREHVKRZQWREHLQFRQIRUPDQFHWRWKLV SURFHGXUHVVSHFLILHGLQWKLVVHFWLRQ
FKDSWHU E\ VXEPLVVLRQ RID UHSRUW WR WKH EXLOGLQJ ,I D 7LHU  DQDO\VLV LGHQWLILHV D QRQFRQIRUPLQJ
RIILFLDODVGHVFULEHGLQWKLVVHFWLRQ FRQGLWLRQ VXFK FRQGLWLRQ VKDOO EH PRGLILHG WR
FRQIRUP WR WKH DFFHSWDQFH FULWHULD $OWHUQDWLYHO\
™ 7KLV VHFWLRQ SURYLGHV D PHDQV IRU FRQGXFWLQJ
VLPSOLILHG DQG UDSLG HYDOXDWLRQV RI H[LVWLQJ
WKH GHVLJQ SURIHVVLRQDO PD\ FKRRVH WR SHUIRUP D
FRQFUHWHEXLOGLQJV7KLVVHFWLRQLVQRWLQWHQGHG 7LHU  DQDO\VLV WR YHULI\ WKH DGHTXDF\ RI WKH
WR EH XVHG IRU FRQFUHWHIUDPHG EXLOGLQJV ZLWK VWUXFWXUH
PDVRQU\ LQILOO $ IHZ ³TXLFN FKHFNV´ UHTXLUH ™ 7KH 7LHU  OLQHDU DQDO\VLV SURFHGXUH LV WKH
DQDO\VLV DV SDUW RI WKH FKHFNOLVW SURFHVV 7KH HTXLYDOHQWODWHUDOIRUFHSURFHGXUHGHVFULEHGLQ
DQDO\VLV LV EDVHG RQ WKH VLPSOLILHG HTXLYDOHQW 6HFWLRQRI6%&7KLVSURFHGXUHXVHV
ODWHUDOIRUFHSURFHGXUHRI6HFWLRQRI$6&( D VLQJOH ³JOREDO´ UHVSRQVH PRGLILFDWLRQ IDFWRU
XVLQJ%6(( 5IRUWKHHQWLUHVWUXFWXUH7KLVDSSURDFKGLIIHUV
$(YDOXDWLRQUHSRUW7KHUHJLVWHUHGGHVLJQ IURPWKHOLQHDUVWDWLFSURFHGXUHDQDO\VLVLQ6%&
SURIHVVLRQDOVKDOOSUHSDUHDUHSRUWVXPPDUL]LQJWKH  ZKLFK HPSOR\V D ³FRPSRQHQWEDVHG´
GXFWLOLW\ UHODWHG IDFWRU P LQ FKHFNLQJ WKH
DQDO\VLVFRQGXFWHGLQFRPSOLDQFHZLWKWKLVVHFWLRQ
DFFHSWDELOLW\RIWKHFRPSRQHQWHYDOXDWHG
$V D PLQLPXP WKH UHSRUW VKDOO LQFOXGH WKH ™ 7KH 5 IDFWRU IRU 7LHU  DQDO\VHV VKDOO EH
IROORZLQJLWHPV VHOHFWHGEDVHGRQWKHW\SHRIH[LVWLQJVHLVPLF
IRUFHUHVLVWLQJ V\VWHP JLYHQ LQ 7DEOH  RI
 %XLOGLQJGHVFULSWLRQ 6%&  7KH :R DQG &G IDFWRUV DVVRFLDWHG

6%&&& 

&+$37(5$²(DUWKTXDNH+D]DUG5HGXFWLRQLQ([LVWLQJ&RQFUHWH%XLOGLQJV

ZLWK WKH 5 IDFWRUV VKDOO EH XVHG ZKHQ UHVLVWLQJV\VWHPLQDQ\VWRU\LVPRUHWKDQ

DSSURSULDWH &ODVVLILFDWLRQ RI VHLVPLF IRUFH SHUFHQWRIWKDWLQDQDGMDFHQWVWRU\
UHVLVWLQJ V\VWHPV DV RWKHU WKDQ ³RUGLQDU\´ IRU  7KH EXLOGLQJ KDV D QRQRUWKRJRQDO ODWHUDO
VHOHFWLRQRIDQ5IDFWRUIURP7DEOHRI6%& IRUFHUHVLVWLQJV\VWHP
 LV RQO\ DOORZHG DV VSHFLILHG LQ 6HFWLRQV
,WHPDQGRIWKHFRGH,W ™ 7KHVHOLPLWVIRUXVHRIHTXLYDOHQWODWHUDOIRUFH
LVXQOLNHO\WKDWDQH[LVWLQJEXLOGLQJZLOOPHHWDOO GHVLJQ SURFHGXUHV DUH VLPLODU WR WKRVH
WKHSURYLVLRQVRIWKHFXUUHQWFRGHWRTXDOLI\DV OLPLWDWLRQV JLYHQ LQ 6HFWLRQ  RI 6%& 
DV\VWHPRWKHUWKDQ³RUGLQDU\´ /LQHDUVWDWLFSURFHGXUHVDUHPRVWO\DSSOLFDEOH
™ $FFHSWDQFH RI WKH EXLOGLQJ XVLQJ WKH 7LHU  WR EXLOGLQJV ZLWK UHJXODU JHRPHWULHV DQG
SURFHGXUH LV EDVHG RQ KDYLQJ WKH IOH[XUDO SUHVFULEHG GLVWULEXWLRQV RI VWLIIQHVV VWUHQJWK
VWUHQJWK D[LDO VWUHQJWK VKHDU VWUHQJWK DQG DQGPDVV
FRQQHFWLRQ VWUHQJWK WKDW DUH SUHVFULEHG E\ ™ )RU EXLOGLQJV ZLWK SODQ LUUHJXODULWLHV VRIW
UHIHUHQFHGVWDQGDUGVJLYHQLQWKH6%&IRU VWRULHV RU ZHDN VWRULHV WKH LQHODVWLF GXFWLOLW\
UHVLVWDQFH WR WKH UHGXFHG VHLVPLF ORDGLQJ GHPDQGPD\VLJQLILFDQWO\GLIIHUIURPWKHUHVXOW
7KHVHUHIHUHQFHGVWDQGDUGVLQFOXGH6%& RI OLQHDU DQDO\VHV WKHUHIRUH 7LHU  DQDO\VLV
SURFHGXUHV VKDOO EH XVHG )RU EXLOGLQJV ZLWK
$/LPLWDWLRQV$7LHUDQDO\VLVSURFHGXUH YHUWLFDOLUUHJXODULWLHVRUVLJQLILFDQWKLJKHUPRGH
PD\EHXVHGLI UHVSRQVH OLQHDU G\QDPLF SURFHGXUHV PD\
SURYLGHDPRUHDFFXUDWHYHUWLFDOGLVWULEXWLRQRI
 7KHUHLVQRLQSODQHRIIVHWLQWKHODWHUDOIRUFH VHLVPLF GHPDQG DV FRPSDUHG WR WKH OLQHDU
UHVLVWLQJV\VWHP VWDWLFSURFHGXUH
 7KHUH LVQR RXWRISODQH RIIVHWLQ WKHODWHUDO $$QDO\VLVSURFHGXUH$VWUXFWXUDODQDO\VLV
IRUFHUHVLVWLQJV\VWHP VKDOOEHSHUIRUPHGIRUDOOVWUXFWXUHVLQDFFRUGDQFH
 7KHUH LV QR WRUVLRQDO LUUHJXODULW\ SUHVHQW LQ ZLWKWKHUHTXLUHPHQWVRIWKH6%&WKH6%&
DQ\ VWRU\ $ WRUVLRQDO LUUHJXODULW\ PD\ EH DQG WKH 6%&  H[FHSW DV PRGLILHG LQ 6HFWLRQ
GHHPHGWRH[LVWLQDVWRU\ZKHQWKHPD[LPXP $7KHUHVSRQVHPRGLILFDWLRQIDFWRU5VKDOOEH
VWRU\ GULIW FRPSXWHG LQFOXGLQJ DFFLGHQWDO VHOHFWHGEDVHGRQWKHW\SHRIVHLVPLFIRUFHUHVLVWLQJ
WRUVLRQDWRQHHQGRIWKHVWUXFWXUHWUDQVYHUVH V\VWHP HPSOR\HG DQG VKDOO FRPSO\ ZLWK WKH
WRDQD[LVLVPRUHWKDQWLPHVWKHDYHUDJH UHTXLUHPHQWVRI6HFWLRQ
RI WKH VWRU\ GULIWV DW WKH WZR HQGV RI WKH
VWUXFWXUH ™ 7KH VWLIIQHVV RI DQ\ FRPSRQHQW VKDOO EH
 7KHUHLVQRZHDNVWRU\LUUHJXODULW\DWDQ\IORRU FDOFXODWHGXVLQJ6%&7KHEXLOGLQJSHULRG
FDOFXODWHG XVLQJ D SHUFHQWDJH RI WKH JURVV
OHYHORQDQ\D[LVRIWKHEXLOGLQJ$ZHDNVWRU\
VWLIIQHVV WR DFFRXQW IRU HIIHFWLYH VWLIIQHVV PD\
LVRQHLQZKLFKWKHVWRU\VWUHQJWKLVOHVVWKDQ H[FHHG DQG LV SHUPLWWHG WR H[FHHG WKH XSSHU
SHUFHQWRIWKDWLQWKHVWRU\DERYH7KHVWRU\ OLPLWRIFDOFXODWHGSHULRGJLYHQLQWKH6%&
VWUHQJWK LV WKH WRWDO VWUHQJWK RI DOO VHLVPLF 7R GHWHUPLQH WKH HIIHFWLYH VWLIIQHVV RI D IODW
UHVLVWLQJHOHPHQWVVKDULQJWKHVWRU\VKHDUIRU SODWHRUIODWVODEWKHGHVLJQSURIHVVLRQDOVKDOO
WKHGLUHFWLRQXQGHUFRQVLGHUDWLRQ UHIHUWRDYDLODEOHUHVHDUFKGDWD7KHHPSLULFDO
OLPLWVRQHODVWLFIXQGDPHQWDOSHULRGJLYHQLQWKH
([FHSWLRQ  6WDWLF RU HTXLYDOHQW ODWHUDO IRUFH 6%&DUHQRWDSSURSULDWHIRUDQDO\VLVRIWKH
SURFHGXUHVVKDOOQRWEHXVHGLI GLYHUVLW\RIVWUXFWXUDOV\VWHPVIRXQGLQH[LVWLQJ
EXLOGLQJV
 7KHEXLOGLQJLVPRUHWKDQPLQKHLJKW
 7KHEXLOGLQJKDVDYHUWLFDOPDVVRUVWLIIQHVV $ 0DWKHPDWLFDOPRGHO7KHWKUHH
LUUHJXODULW\ VRIW VWRU\ 0DVV LUUHJXODULW\ GLPHQVLRQDO PDWKHPDWLFDO PRGHO RI WKH SK\VLFDO
VKDOOEHFRQVLGHUHGWRH[LVWZKHUHWKHHIIHFWLYH VWUXFWXUHVKDOOUHSUHVHQWWKHVSDWLDOGLVWULEXWLRQRI
PDVVRIDQ\VWRU\LVPRUHWKDQSHUFHQWRI PDVVDQGVWLIIQHVVRIWKHVWUXFWXUHWRDQH[WHQWWKDW
WKHHIIHFWLYHPDVVRIDQ\DGMDFHQWVWRU\$VRIW LV DGHTXDWH IRU WKH FDOFXODWLRQ RI WKH VLJQLILFDQW
VWRU\LVRQHLQZKLFKWKHODWHUDOVWLIIQHVVLVOHVV IHDWXUHV RI LWV GLVWULEXWLRQ RI ODWHUDO IRUFHV $OO
WKDQSHUFHQWRIWKDWLQWKHVWRU\DERYHRU FRQFUHWHDQGPDVRQU\HOHPHQWVVKDOOEHLQFOXGHGLQ
OHVVWKDQSHUFHQWRIWKHDYHUDJHVWLIIQHVVRI WKHPRGHORIWKHSK\VLFDOVWUXFWXUH
WKHWKUHHVWRULHVDERYH ([FHSWLRQ&RQFUHWHRUPDVRQU\SDUWLWLRQVWKDWDUH
 7KH EXLOGLQJ KDV D YHUWLFDO JHRPHWULF LVRODWHGIURPWKHFRQFUHWHIUDPHPHPEHUVDQGWKH
LUUHJXODULW\ 9HUWLFDO JHRPHWULF LUUHJXODULW\ IORRUDERYH
VKDOO EH FRQVLGHUHG WR H[LVW ZKHUH WKH &DVWLQSODFHUHLQIRUFHGFRQFUHWHIORRUVZLWKVSDQ
KRUL]RQWDO GLPHQVLRQ RI WKH ODWHUDO IRUFH WRGHSWK UDWLRV OHVV WKDQ WKUHHWRRQH PD\ EH

6%&&& 

&+$37(5$²(DUWKTXDNH+D]DUG5HGXFWLRQLQ([LVWLQJ&RQFUHWH%XLOGLQJV

DVVXPHG WR EH ULJLG GLDSKUDJPV 2WKHU IORRUV $ &RPSRQHQWVWLIIQHVV&RPSRQHQW

LQFOXGLQJ IORRUV FRQVWUXFWHG RI SUHFDVW HOHPHQWV VWLIIQHVV VKDOO EH FDOFXODWHG EDVHG RQ WKH
ZLWKRUZLWKRXWDUHLQIRUFHGFRQFUHWHWRSSLQJVKDOO DSSUR[LPDWHYDOXHVVKRZQLQ$6&(7DEOH
EH DQDO\]HG LQ FRQIRUPDQFH WR WKH 6%&  WKH ™ 7KH UDQJHV RI DSSUR[LPDWH SHUFHQWDJHV RI
6%&DQGWKH6%&WRGHWHUPLQHLIWKH\PXVW JURVV VWLIIQHVV JLYHQ LQ $6&(  UHGXFH WKH
EHFRQVLGHUHGVHPLULJLGGLDSKUDJPV7KHHIIHFWLYH HOHPHQW¶V JURVV VHFWLRQ SURSHUWLHV WR DQ
LQSODQH VWLIIQHVV RI WKH GLDSKUDJP LQFOXGLQJ HIIHFWLYH VWLIIQHVV SURSHUW\ &UDFNLQJ RI WKH
HIIHFWV RI FUDFNLQJ DQG GLVFRQWLQXLW\ EHWZHHQ FRQFUHWH LQ WKH HODVWLF VWUHVV UDQJH DQG
SUHFDVW HOHPHQWV VKDOO EH FRQVLGHUHG 3DUNLQJ DGGLWLRQDOFUDFNLQJLQQRQOLQHDUEHKDYLRUUDQJH
VWUXFWXUHVWKDWKDYHUDPSVUDWKHUWKDQDVLQJOHIORRU PXVW EH FRQVLGHUHG (IIHFWLYH VWLIIQHVV
OHYHOVKDOOEHPRGHOHGDVKDYLQJPDVVDSSURSULDWHO\ SURSHUWLHVDUHUHTXLUHGIRUFRQVLGHUDWLRQRIWKH
GLVWULEXWHGRQHDFKUDPS7KHODWHUDOVWLIIQHVVRIWKH UHODWLYH ULJLGLWLHV RI UHLQIRUFHG FRQFUHWH
HOHPHQWVDQGIRUOLQHDUG\QDPLFSURFHGXUHV
UDPSPD\EHFDOFXODWHGDVKDYLQJSURSHUWLHVEDVHG
RQWKHXQFUDFNHGFURVVVHFWLRQRIWKHVODEH[FOXVLYH $'HVLJQ GHWDLOLQJ UHTXLUHPHQWV DQG
RIEHDPVDQGJLUGHUV VWUXFWXUDO FRPSRQHQW ORDG HIIHFWV  7KH GHVLJQ
™ 7KH PDWKHPDWLFDO PRGHO RI WKH EXLOGLQJ PXVW DQG GHWDLOLQJ RI QHZ FRPSRQHQWV RI WKH VHLVPLF
EH WKUHH GLPHQVLRQDO ' DQG LQFOXGH DOO IRUFHUHVLVWLQJ V\VWHP VKDOO FRPSO\ ZLWK WKH
FRQFUHWH HOHPHQWV WKDW ZLOO EH GHIRUPHG E\ UHTXLUHPHQWV RI WKH 6%&  DQG WKH 6%& 
ODWHUDO IRUFHV 7KH H[FHSWLRQ DOORZV LVRODWHG XQOHVVVSHFLILFDOO\PRGLILHGKHUHLQ
SDUWLWLRQVWREHRPLWWHGIURPWKH'PRGHO7KH
™ 7KHGHVLJQDQGGHWDLOLQJRIQHZHOHPHQWVRID
SDUWLWLRQVPXVWEHLVRODWHGIURPWKHVWUXFWXUHDW
VXSSOHPHQWDO VHLVPLF IRUFHUHVLVWLQJ V\VWHP
WKHWRSDQGDORQJERWKYHUWLFDOHGJHVE\MRLQWV
VKDOO FRQIRUP WR WKH UHTXLUHPHQWV RI WKH 6%&
DGHTXDWHWRDFFRPPRGDWHH[SHFWHGLQWHUVWRU\
DQGWKH6%&
GULIWV6HFWLRQRI6%&GHVFULEHVWKH
HOHPHQWV WKDW PXVW EH LQFOXGHG LQ WKH ' $$FFHSWDQFH FULWHULD  7KH FDOFXODWHG
PRGHO 7KLV ' PRGHO VKDOO EH XVHG IRU VWUHQJWKRIDPHPEHUVKDOOEHQRWOHVVWKDQWKHORDG
DQDO\VLV RQ HDFK D[LV RI WKH EXLOGLQJ IRU HIIHFWVRQWKDWPHPEHU
FRPSOLDQFH ZLWK DSSOLFDEOH VXEVHFWLRQV RI
6HFWLRQ  RI 6%&  &DVWLQSODFH ™ 7KH VWUHQJWK RI HOHPHQWV FDOFXODWHG LQ
UHLQIRUFHG FRQFUHWH IORRU V\VWHPV PD\ EH FRQIRUPDQFH ZLWK WKH 6%&  DQG WKH 6%&
DVVXPHG WR DFW DV ULJLG GLDSKUDJPV LI LQ  VKDOO HTXDO RU H[FHHG WKH ORDG HIIHFWV
FRQIRUPDQFH ZLWK WKH VSHFLILHG VSDQWRGHSWK GHWHUPLQHG LQ FRQIRUPDQFH ZLWK WKH 6%& 
UDWLRRI6HFWLRQRI6%&2WKHUIORRU DQGWKH6%&
V\VWHPVPXVWEHDQDO\]HGLQFRQIRUPDQFHZLWK $ /RDGFRPELQDWLRQV)RUORDGDQG
6HFWLRQRI6%&WRFRQILUPWKDWWKH
UHVLVWDQFHIDFWRUGHVLJQVWUHQJWKGHVLJQVWUXFWXUHV
IORRUGLDSKUDJPLVQRWIOH[LEOH,IWKHGLDSKUDJP
LVGHWHUPLQHGWREHQRWIOH[LEOHWKHKRUL]RQWDO DQGDOOSRUWLRQVWKHUHRIVKDOOUHVLVWWKHPRVWFULWLFDO
IOH[LELOLW\RIWKHGLDSKUDJPPXVWEHLQFOXGHGLQ HIIHFWV IURP WKH FRPELQDWLRQV RI IDFWRUHG ORDGV
WKH ' PRGHO 7KLV GHILQLWLRQ RI ZKHQ D SUHVFULEHGLQWKH6%&
GLDSKUDJPLVULJLGRUVHPLULJLGPD\EHUHODWHG ([FHSWLRQ  )RUFRQFUHWHEHDPVDQGFROXPQVWKH
WR LWV RUWKRJRQDO D[LV WKH GHILQLWLRQ PD\ EH
VKHDUHIIHFWVKDOOEHGHWHUPLQHGEDVHGRQWKHPRVW
GLIIHUHQW DORQJ HDFK D[LV RI D UHFWDQJXODU
EXLOGLQJ,QWKLVFDVHXVHRIDSODWHHOHPHQWDV FULWLFDO ORDG FRPELQDWLRQV SUHVFULEHG LQ WKH 6%&
UHSUHVHQWDWLYH RI WKH RUWKRJRQDO KRUL]RQWDO  7KH VKHDU ORDG HIIHFW EHFDXVH RI VHLVPLF
VWLIIQHVV RI WKH GLDSKUDJP PD\ VLPSOLI\ WKH IRUFHV VKDOO EH PXOWLSOLHG E\ D IDFWRU RI Cd EXW
DQDO\VLV FRPELQHGVKHDUORDGHIIHFWQHHGQRWEHJUHDWHUWKDQ
™ 3DUNLQJVWUXFWXUHVWKDWFRQVLVWRIUDPSVLQOLHX VeDVFDOFXODWHGLQDFFRUGDQFHZLWK(TXDWLRQ$
RI KRUL]RQWDO IORRU OHYHOV VKDOO KDYH WKH PDVV Mpr1DQGMpr2DUHWKHHQGPRPHQWVDVVXPHGWREH
GLVWULEXWHGDORQJWKHUDPSOHQJWKWRGHWHUPLQH LQ WKH VDPH GLUHFWLRQ FORFNZLVH RU FRXQWHU
WKHLU H[SHFWHG LQSODQH GHIRUPDWLRQV 7KH FORFNZLVHEDVHGRQVWHHOWHQVLOHVWUHVVEHLQJHTXDO
ODWHUDO VWLIIQHVV RI WKH UDPSV VKDOO EH WKH WRfyZKHUHfyLVWKHVSHFLILHG\LHOGVWUHQJWK
XQFUDFNHGVWLIIQHVVZLWKRXWVWLIIHQLQJHIIHFWVRI

HGJH EHDPV DQG JLUGHUV &ROXPQV WKDW DUH ெ ାெ ௐ
UHVWUDLQHG E\ IORRU EHDPV DW HDFK DGMDFHQW ܸ௘ ൌ ೛ೝభ ೛ೝమ േ ೒   $
௅ ଶ
UDPS OHYHO PD\ KDYH FULWLFDO VKHDU VWUHVV 
LQGXFHG E\ WKH IORRU EHDPV DQG VKRXOG EH ZKHUH
FDUHIXOO\FRQVLGHUHGLQWKHPRGHO
Wg 7RWDOJUDYLW\ORDGVRQWKHEHDP

6%&&& 

&+$37(5$²(DUWKTXDNH+D]DUG5HGXFWLRQLQ([LVWLQJ&RQFUHWH%XLOGLQJV

™ 7KH FULWLFDO ORDG FRPELQDWLRQV IRU VWUHQJWK RI $6&(  7KH JHQHUDO DVVXPSWLRQV DQG
GHVLJQRUORDGDQGUHVLVWDQFHIDFWRUGHVLJQRI UHTXLUHPHQWV RI 6HFWLRQ  RI $6&( 
WKH 6%&  VKDOO EH XVHG 7KH H[FHSWLRQ LQ H[FOXGLQJ WKRVH IRU FRQFUHWH IUDPHV ZLWK LQILOOV
WKLV VHFWLRQ UHTXLUHV WKDW WKH VKHDU GHPDQGV VKDOOEHXVHGLQWKHHYDOXDWLRQ5HGXFHG6%&
IURP VHLVPLF IRUFHV EH PXOWLSOLHG E\ &G EXW
OHYHO VLWHJURXQG PRWLRQV LQ DFFRUGDQFH ZLWK
QHHG QRW H[FHHG WKH YDOXH RI 9H FDOFXODWHG
XVLQJ (TXDWLRQ $ 7KH &G IDFWRU LV XVHG LQ 6HFWLRQ $ DUH SHUPLWWHG IRU WKLV HYDOXDWLRQ
WKLV VHFWLRQ WR FDOFXODWH WKH SRVW\LHOG 6WUXFWXUHVPHHWLQJWKH$6&(/LIH6DIHW\/6
PRPHQWV&GLVWKHDSSURSULDWHPDJQLILHUDVWKH DFFHSWDQFHFULWHULDVKDOOEHGHHPHGWRFRPSO\ZLWK
PD[LPXP PRPHQW RFFXUV ZKHQ WKH SODVWLF WKLV FKDSWHU ,I D 7LHU  DQDO\VLV LGHQWLILHV
KLQJHLVDWLWVPD[LPXPFXUYDWXUHZKLFKRFFXUV QRQFRQIRUPLQJFRQGLWLRQVVXFKFRQGLWLRQVVKDOOEH
DWWKHSRLQWRIPD[LPXPGULIW,WVKRXOGEHQRWHG PRGLILHGWRFRQIRUPWRWKHDFFHSWDQFHFULWHULD
WKDWWKH SODVWLFPRPHQWVDQG9HZLOOJHQHUDOO\
SODFH DQ XSSHU ERXQG RQ WKH GHVLJQ VKHDU ™ 7KH7LHUHYDOXDWLRQSURFHGXUHLVVSHFLILHGDV
IRUFH DQRQOLQHDUSURFHGXUHFRUUHVSRQGLQJWR$6&(
™ 7KHHQGPRPHQWVLQ(TXDWLRQ$DUHEDVHG  ,W LV LQWHQGHG WKDW OLIH VDIHW\ DFFHSWDQFH
RQ VWHHO WHQVLOH VWUHVV RI  SHUFHQW RI FULWHULDEHXVHG8VHRIOLQHDUVWDWLFSURFHGXUHV
VSHFLILHG\LHOGVWUHVV7KHWRWDOJUDYLW\ORDGPD\ LVQRWSHUPLWWHGIRU7LHUDQDO\VHV7KH7LHU
EHFDOFXODWHGXVLQJWKHORZHURIWKHXQIDFWRUHG SURFHGXUH XVHV WKH FRGH HTXLYDOHQW ODWHUDO
GHDG DQG UHGXFHG OLYH ORDG RU WKH JUDYLW\ IRUFH SURFHGXUH LQ OLHX RI WKH OLQHDU VWDWLF
FRPSRQHQW RI WKH IDFWRUHG ORDG FRPELQDWLRQ SURFHGXUHV ,I WKH EXLOGLQJ LV VKRZQ
ZLWK HDUWKTXDNH ORDGV DV DSSOLFDEOH IRU QHZ QRQFRPSOLDQWE\D7LHUDQDO\VLVLWZRXOGQRW
FRQVWUXFWLRQ EHH[SHFWHGWREHVKRZQFRPSOLDQWE\DQRWKHU
™ 7KLV UHTXLUHPHQW LV LQWHQGHG WR PLQLPL]H WKH OLQHDUDQDO\VLV
SUREDELOLW\RIDVKHDUIDLOXUHLQFRPSRQHQWVZLWK ™ (QJLQHHUV VKRXOG IDPLOLDUL]H WKHPVHOYHV ZLWK
IOH[XUDODQGD[LDOORDGLQJVSULRUWRDWWDLQLQJWKH $6&(SULRUWR EHJLQQLQJD7LHUDQDO\VLV
QRQOLQHDU GLVSODFHPHQW DVVXPHG E\ WKH $6&(  SURYLGHV FRPPHQWDU\ LQ OLHX RI
UHVSRQVH UHGXFWLRQ IDFWRU LQ WKH FDOFXODWLRQ RI FRPPHQWDU\LQWKLVGRFXPHQW
WKH VHLVPLF ORDGLQJ 7KH FRPPHQWDU\ WR ™ 7KHSURFHGXUHIRU7LHUDQDO\VHVLVGHVFULEHG
&KDSWHURIWKH1(+53)(0$IRU LQ6HFWLRQRI$6&(
)LJXUHV & DQG & VKRZV WKH ™ 7KHPDWKHPDWLFDOPRGHORIWKHEXLOGLQJVKDOOEH
UHODWLRQVKLS RI QRQOLQHDU GLVSODFHPHQW DQG VXEMHFWHGWRPRQRWRQLFDOO\LQFUHDVLQJORDGVWR
QRQOLQHDU IOH[XUDO PRPHQWV LQ V\VWHPV RU SHUFHQWRIWDUJHWGLVSODFHPHQW7KHWDUJHW
HOHPHQWV 7KH HODVWLF PRPHQW LQFUHDVHV WKH GLVSODFHPHQW VKDOO EH DPSOLILHG IRU KRUL]RQWDO
VWUHQJWK OLPLW PRPHQW XOWLPDWH DV WKH WRUVLRQ LI DSSOLFDEOH LQ DFFRUGDQFH ZLWK
QRQOLQHDU FXUYDWXUH RI WKH SODVWLF KLQJH 6HFWLRQRI$6&(
LQFUHDVHV 7KHVH SRVW\LHOG PRPHQWV FDQ EH ™ $FFHSWDQFH FULWHULD IRU QRQOLQHDU SURFHGXUHV
FDOFXODWHGE\DVVXPLQJDVWUDLQRI\LHOGVWUDLQî VKDOO EH DV SUHVFULEHG LQ 6HFWLRQ  RI
&'DWWKHWHQVLRQIDFHDQGDVWUDLQRIDW $6&(3ULPDU\DQGVHFRQGDU\FRPSRQHQWV
WKHFRPSUHVVLRQIDFH(TXDWLRQ$VLPSOLILHV VKDOOKDYHH[SHFWHGGHIRUPDWLRQFDSDFLWLHVQRW
WKHGHWHUPLQDWLRQRIWKHSUREDEOHPRPHQWVE\ OHVV WKDQ WKH PD[LPXP GHIRUPDWLRQ GHPDQGV
OLPLWLQJ WKH LQFUHDVH WR  SHUFHQW RI \LHOG FDOFXODWHG DW WKH WDUJHW GLVSODFHPHQW
PRPHQW &RPSRQHQWGHIRUPDWLRQOLPLWVDUHDVGHVFULEHG
LQ &KDSWHU  RI $6&(  IRU WKH OLIH VDIHW\
$ 'HWHUPLQDWLRQRIWKHVWUHQJWKRI SHUIRUPDQFHOHYHO
PHPEHUV  7KH VWUHQJWK RI D PHPEHU VKDOO EH ™ )RUFHFRQWUROOHG DFWLRQV RI SULPDU\ DQG
GHWHUPLQHGE\PXOWLSO\LQJWKHQRPLQDOVWUHQJWKRI VHFRQGDU\ FRPSRQHQWV VKDOO KDYH VWUHQJWKV
WKHPHPEHUE\DVWUHQJWKUHGXFWLRQIDFWRUI7KH QRWOHVVWKDQWKHPD[LPXPGHVLJQIRUFH
™ )RUEXLOGLQJVZLWKQHJDWLYHSRVW\LHOGVWLIIQHVV
QRPLQDOVWUHQJWKRIWKHPHPEHUVKDOOEHGHWHUPLQHG
ZLWK WDUJHW GLVSODFHPHQW JUHDWHU WKDQ WKH
LQDFFRUGDQFHZLWKWKH6%& GLVSODFHPHQW DW PD[LPXP EDVH VKHDU WKH
™ 6WUHQJWK RI PHPEHUV VKDOO EH GHWHUPLQHG E\ PD[LPXP VWUHQJWK UDWLR PVWUHQJWK VKDOO EH
UHGXFLQJ WKH QRPLQDO VWUHQJWK E\ VWUHQJWK GHWHUPLQHG E\ (TXDWLRQ  RI $6&(  ,I
UHGXFWLRQIDFWRUVIVSHFLILHGLQ6%& PVWUHQJWK H[FHHGV PPD[ WKH QRQOLQHDU G\QDPLF
SURFHGXUH VKDOO EH XVHG WR VKRZ FRPSOLDQFH
7,(5$1$/<6,6 ZLWKUHGXFHGOHYHOVHLVPLFIRUFHV,QOLHXRIWKLV
352&('85( QRQOLQHDU G\QDPLF SURFHGXUH DQDO\VLV WKH
ODWHUDO IRUFHUHVLVWLQJ V\VWHP DQGRU JUDYLW\
$*HQHUDO  $ 7LHU  HYDOXDWLRQ VKDOO EH VXSSRUWV\VWHPRIWKLVEXLOGLQJPD\EHGHHPHG
SHUIRUPHGXVLQJWKH1RQOLQHDU6WDWLF3URFHGXUHRU
1RQOLQHDU'\QDPLF3URFHGXUHRI6HFWLRQ

6%&&& 

&+$37(5$²(DUWKTXDNH+D]DUG5HGXFWLRQLQ([LVWLQJ&RQFUHWH%XLOGLQJV

WREHQRQFRPSODLQWDQGPRGLILHGWRFRQIRUPWR
WKHDFFHSWDQFHFULWHULD


6%&&& 

&+$37(5$²(DUWKTXDNH+D]DUG5HGXFWLRQLQ([LVWLQJ&RQFUHWH%XLOGLQJV

™ %LEOLRJUDSK\ ³/RPD 3ULHWD (DUWKTXDNH ´ ((5, 6SHFWUD

9RO6XSSOHPHQW0D\
7KHIROORZLQJUHVRXUFHPDWHULDOVZHUHXVHGLQWKH
³0H[LFR&LW\(DUWKTXDNH´((5,6SHFWUD9RO
SUHSDUDWLRQRIWKHFRPPHQWDU\IRUWKLVFKDSWHU
1R$XJXVW
RIWKHFRGH
1(+53 +DQGERRN IRU WKH 6HLVPLF (YDOXDWLRQ RI
&DOLIRUQLD (DUWKTXDNH RI )HEUXDU\   6DQ
([LVWLQJ %XLOGLQJV )(0$  :DVKLQJWRQ
)HUQDQGR&$86'HSDUWPHQWRI&RPPHUFH
'& )HGHUDO (PHUJHQF\ 0DQDJHPHQW
1DWLRQDO 2FHDQLF DQG $WPRVSKHULF
$JHQF\
$GPLQLVWUDWLRQ
1(+53 5HFRPPHQGHG 3URYLVLRQV DQG
³&KL&KL 7DLZDQ (DUWKTXDNH´ ((5, 6SHFWUD
&RPPHQWDU\IRU6HLVPLF5HJXODWLRQVIRU1HZ
6XSSOHPHQWWR9RO$SULODQG9RO
%XLOGLQJV DQG 2WKHU 6WUXFWXUHV )(0$ 
1R1RYHPEHU
:DVKLQJWRQ '& )HGHUDO (PHUJHQF\
³(DUWKTXDNH +D]DUG 5HGXFWLRQ LQ ([LVWLQJ
0DQDJHPHQW$JHQF\
5HLQIRUFHG &RQFUHWH %XLOGLQJV DQG &RQFUHWH
³1RUWKULGJH(DUWKTXDNH´((5,6SHFWUD9RO
)UDPH%XLOGLQJVZLWK0DVRQU\)LOO´&LW\RI/RV
1R
$QJHOHV%XLOGLQJ&RGH²9ROXPH
3URJHWWD]LRQH 6LVPLFD 6SHFLDO ,VVXH RQ WKH $SULO
((5, 7KH +\RJR.HQ 1DQEX (DUWKTXDNH *UHDW
WK  O
$TXLOD HDUWKTXDNH ,866 3UHVV
+DQVKLQ (DUWKTXDNH 'LVDVWHU -DQXDU\ 
3DYLD9RO1R
 3UHOLPLQDU\ 5HFRQQDLVVDQFH 5HSRUW
³:KLWWLHU(DUWKTXDNH´((5,6SHFWUD9RO
)HEUXDU\
1R )HEUXDU\  DQG 9RO  1R  0D\
*XLGHOLQHV IRU WKH 6HLVPLF 5HWURILW RI ([LVWLQJ

%XLOGLQJV ,QWHUQDWLRQDO &RGH &RXQFLO
:DVKLQJWRQ'&
 
³,]PXW 7XUNH\ (DUWKTXDNH ´ ((5, 6SHFWUD
6XSSOHPHQW$WR9RO'HFHPEHU

6%&&& 

&+$37(5$²(DUWKTXDNH+D]DUG5HGXFWLRQLQ([LVWLQJ&RQFUHWH%XLOGLQJV
























7KLVSDJHOHIWLQWHQWLRQDOO\EODQN

6%&&& 

&+$37(5$²5()(5(1&('67$1'$5'6

&+$37(5$²5()(5(1&('67$1'$5'6

7KLVFKDSWHUOLVWVWKHVWDQGDUGVWKDWDUHUHIHUHQFHGLQYDULRXVVHFWLRQVRIWKLVGRFXPHQW7KHVWDQGDUGVDUH
OLVWHGKHUHLQE\WKHSURPXOJDWLQJDJHQF\RIWKHVWDQGDUGWKHVWDQGDUGLGHQWLILFDWLRQWKHHIIHFWLYHGDWHDQG
WLWOHDQGWKHVHFWLRQRUVHFWLRQVRIWKLVGRFXPHQWWKDWUHIHUHQFHWKHVWDQGDUG7KHDSSOLFDWLRQRIWKHUHIHUHQFHG
VWDQGDUGVVKDOOEHDVVSHFLILHGLQ6HFWLRQ
7KHVHVWDQGDUGVDUHOLVWHGKHUHIRUJXLGDQFHKRZHYHUIRUHQIRUFHPHQWWKH\VKDOOEHDGRSWHGDQGRUDSSURYHG
E\WKHDSSURSULDWHJRYHUQPHQWDODXWKRULW\6$62RU6%&1&DVSHUWKHLUPDQGDWHVEHIRUHEHLQJFRQVLGHUHG
SDUWRIWKLVFRGH

$PHULFDQ6RFLHW\RI&LYLO(QJLQHHUV6WUXFWXUDO(QJLQHHULQJ,QVWLWXWH
$6&(6(, $OH[DQGHU%HOO'ULYH5HVWRQ9$
6WDQGDUG 5HIHUHQFHG
UHIHUHQFH 7LWOH LQ FRGH
QXPEHU VHFWLRQQXPEHU
² 0LQLPXP'HVLJQ/RDGVIRU%XLOGLQJVDQG2WKHU6WUXFWXUHVZLWK6XSSOHPHQW
1R««$
² 6HLVPLF 5HKDELOLWDWLRQ RI ([LVWLQJ %XLOGLQJV««$ $ $
$$
$670,QWHUQDWLRQDO%DUU+DUERU'ULYH:HVW&RQVKRKRFNHQ3$
$670 
6WDQGDUG 5HIHUHQFHG
UHIHUHQFH 7LWOH LQ FRGH
QXPEHU VHFWLRQQXPEHU
$$0 6SHFLILFDWLRQIRU&DUERQ6WUXFWXUDO6WHHO««««««««««««$
$$0² 6WDQGDUG6SHFLILFDWLRQIRU6WHHO6KHHW=LQF&RDWHG*DOYDQL]HGRU
=LQF,URQ$OOR\&RDWHG*DOYDQQHDOHGE\+RW'LS3URFHVV««$
%² 6WDQGDUG6SHFLILFDWLRQIRU&RDWLQJRI=LQF0HFKDQLFDOO\'HSRVLWHGRQ
,URQ$QG6WHHO
&²&0 6WDQGDUG7HVW0HWKRGIRU6SOLWWLQJ7HQVLOH6WUHQJWKRI&\OLQGULFDO&RQFUHWH
6SHFLPHQV««««««««««««««««$$
( 7HVW 0HWKRG IRU 6WUHQJWK RI $QFKRUV LQ &RQFUHWH DQG 0DVRQU\
(OHPHQWV«$
((0² 6WDQGDUG7HVW0HWKRGIRU'LDJRQDO7HQVLRQ6KHDULQ0DVRQU\$VVHPEODJH
««««««««««««««««««««««$$
6DXGL %XLOGLQJ &RGH 1DWLRQDO &RPPLWWHH  DEL DO KDVVDQ DV VDOPL ±
6%& DOPXKDPPDGL\DK8QLW1R$55,<$'+.LQJGRPRI6DXGL
$UDELD
6WDQGDUG 5HIHUHQFHG
5HIHUHQFH LQFRGH
7LWOH
QXPEHU VHFWLRQ
QXPEHU
6%&² 6DXGL %XLOGLQJ &RGH IRU /RDGLQJ DQG )RUFHV «$ $ $
$ $ $ $ $ $ $ $
$$
6%&² 6DXGL&RQVWUXFWLRQ&RGH««««$$$$$
6%&² 6DXGL %XLOGLQJ &RGH IRU 6RLOV  )RXQGDWLRQV
«««««««««««$$

6%&&& 

$33(1',; %²6XSSOHPHQWDU\ $FFHVVLELOLW\ 5HTXLUHPHQWV IRU ([LVWLQJ %XLOGLQJV DQG
)DFLOLWLHV

6%&² 6DXGL&RQFUHWH6WUXFWXUHV&RGH«$$$$$
$$$$
6%&² 6DXGL 0DVRQU\ &RGH ««$ $ $ $ $
$$ $ $ $ $ $ $
$$$$$$$$$
$$$
6%&² 6DXGL6WHHO6WUXFWXUHV&RGH««««««««$$$



6%&&& 

$33(1',; %²6XSSOHPHQWDU\ $FFHVVLELOLW\ 5HTXLUHPHQWV IRU ([LVWLQJ %XLOGLQJV DQG
)DFLOLWLHV

























7KLVSDJHOHIWLQWHQWLRQDOO\EODQN 

6%&&& 

$33(1',; %²6XSSOHPHQWDU\ $FFHVVLELOLW\ 5HTXLUHPHQWV IRU ([LVWLQJ %XLOGLQJV DQG
)DFLOLWLHV

$33(1',;%²6XSSOHPHQWDU\ $FFHVVLELOLW\ 5HTXLUHPHQWV IRU

([LVWLQJ%XLOGLQJVDQG)DFLOLWLHV

™ *HQHUDO&RPPHQWV 6HFWLRQ % OLVWV FULWHULD VSHFLILF WR IL[HG

$V VWDWHG LQ 6HFWLRQ  WKH SURYLVLRQV RI WKH WUDQVSRUWDWLRQ IDFLOLWLHV DQG VWDWLRQV VXFK DV WUDLQ
DSSHQGLFHV GR QRW DSSO\ XQOHVV VSHFLILFDOO\ VWDWLRQV
DGRSWHG 6HFWLRQ % FRQWDLQV SURYLVLRQV UHODWHG WR
&KDSWHURIWKH6%&FRQWDLQVSURYLVLRQVWKDW FRPPXQLFDWLRQ IHDWXUHV IRU DOWHUHG RU DGGHG
VHWIRUWKUHTXLUHPHQWVIRUDFFHVVLELOLW\WREXLOGLQJV GZHOOLQJRUVOHHSLQJXQLWV
DQG WKHLU DVVRFLDWHG VLWHV DQG IDFLOLWLHV IRU SHRSOH 6HFWLRQ%OLVWVWKHVWDQGDUGVUHIHUHQFHGLQWKLV
ZLWK SK\VLFDO GLVDELOLWLHV 6HFWLRQV    DSSHQGL[
       ™ 3XUSRVH
DQG  LQ WKH FRGH DGGUHVV DFFHVVLELOLW\ $SSHQGL[%LQFOXGHVVFRSLQJUHTXLUHPHQWVIRXQGLQ
SURYLVLRQV DQG DOWHUQDWLYHV SHUPLWWHG LQ H[LVWLQJ WKH $PHULFDQV ZLWK 'LVDELOLWLHV $FW $FFHVVLELOLW\
EXLOGLQJV $SSHQGL[ % ZDV DGGHG WR DGGUHVV *XLGHOLQHV$'$$*WKDWDUHQRWLQWKHDFFHVVLELOLW\
DFFHVVLELOLW\ LQ FRQVWUXFWLRQ IRU LWHPV WKDW DUH QRW SURYLVLRQVLQWKH6%&RUWKHFRGH,WHPVLQWKLV
W\SLFDOO\HQIRUFHDEOHWKURXJKWKHWUDGLWLRQDOEXLOGLQJ DSSHQGL[GHDOZLWKWRSLFVQRWW\SLFDOO\DGGUHVVHGLQ
FRGHHQIRUFHPHQWSURFHVV EXLOGLQJ FRGHV )RU H[DPSOH 6HFWLRQ %
6HFWLRQ%GHDOVZLWKKLVWRULFDOIDFLOLWLHVWKDWDUH VSHFLILHVWKHSURFHVVWRIROORZUHJDUGLQJDOWHUDWLRQV
UHJLVWHUHG WKURXJK WKH 6DXGL &RPPLVVLRQ IRU RU FKDQJH RI RFFXSDQF\ LQ KLVWRULFDOO\ UHJLVWHUHG
7RXULVPDQG1DWLRQDO+HULWDJH6&7+$FW,IVXFK EXLOGLQJV
D IDFLOLW\ XQGHUJRHV DQ DOWHUDWLRQ RU FKDQJH RI 7KLVDSSHQGL[LVEHLQJLQFOXGHGLQWKHFRGHIRUWKH
RFFXSDQF\ LW PXVW FRPSO\ ZLWK DFFHVVLELOLW\ FRQYHQLHQFHRIEXLOGLQJRZQHUVDQGGHVLJQHUVZKR
UHJXODWLRQV DV VSHFLILHG LQ 6HFWLRQV  DQG DUH UHTXLUHG WR FRPSO\ ZLWK $'$$* DQG IRU WKH
,IWKHUHTXLUHGDOWHUDWLRQVZRXOGDGYHUVHO\ EHQHILWRIMXULVGLFWLRQVWKDWPD\ZLVKWRJREH\RQG
DIIHFW VRPH KLVWRULF DVSHFW RI WKH VWUXFWXUH WKH WUDGLWLRQDO ERXQGDU\ RI WKH FRGH DQG IRUPDOO\
DOWHUQDWLYHVDUHDYDLODEOH%HIRUHWKHVHDOWHUQDWLYHV DGRSW WKHVH DGGLWLRQDO $'$$* UHTXLUHPHQWV 7KH
FDQ EH XWLOL]HG WKH RZQHU PXVW JR WKURXJK D UHTXLUHPHQWVLQWKHFRGHLQGLFDWHZKDWLVUHTXLUHG
SURFHVV WR HYDOXDWH WKH UHTXLUHPHQWV DQG DQG HQIRUFHDEOH E\ WKH EXLOGLQJ RIILFLDO 7KH
LPSOLFDWLRQVRIHDFK6HFWLRQ%GHVFULEHVWKH DSSHQGL[LQFOXGHVLWHPVWKDWDUHRXWVLGHWKHVFRSH
SURFHVV LI WKH EXLOGLQJ LV UHJLVWHUHG WKURXJK WKH RIFRGHHQIRUFHPHQWEXWPXVWEHFRPSOLHGZLWKLQ
6&7+6HFWLRQ%GHVFULEHVWKHSURFHVVLIWKH DGGLWLRQWRWKHFRGHUHTXLUHPHQWVWRVDWLVI\$'$$*
EXLOGLQJLVUHJLVWHUHGWKURXJKRWKHUUHJLVWUDWLRQODZ UHJXODWLRQV
6HFWLRQ%SURYLGHVDOWHUQDWLYHVIRUGLVSOD\VLQ
KLVWRULFDOEXLOGLQJV
DGYHUVHO\DIIHFWWKHKLVWRULFDOVLJQLILFDQFHRIWKH
EXLOGLQJ
6(&7,21%48$/,),('+,6725,&$/
%8,/',1*6$1')$&,/,7,(6 %4XDOLILHGKLVWRULFEXLOGLQJVDQGIDFLOLWLHV
VXEMHFW WR 6DXGL &RPPLVVLRQ IRU 7RXULVP DQG
%*HQHUDO4XDOLILHGKLVWRULFEXLOGLQJVDQG 1DWLRQDO +HULWDJH 6&7+ $FW  :KHUH DQ
IDFLOLWLHV VKDOO FRPSO\ ZLWK 6HFWLRQV % DOWHUDWLRQRUFKDQJHRIRFFXSDQF\LVXQGHUWDNHQWR
WKURXJK% DTXDOLILHGKLVWRULFEXLOGLQJRUIDFLOLW\WKDWLVVXEMHFW
™ 6SHFLDO FRQVLGHUDWLRQV DUH JLYHQ WR UHJLVWHUHG WR6&7+WKHQDWLRQDODJHQF\ZLWKMXULVGLFWLRQRYHU
KLVWRULF EXLOGLQJV VHH FRPPHQWDU\ 6HFWLRQV WKH XQGHUWDNLQJ VKDOO IROORZ 6&7+ UHJXODWLRQV
DQG :KHUH WKH 6&7+ UHSUHVHQWDWLYH RU $GYLVRU\
%4XDOLILHG KLVWRULF EXLOGLQJV DQG &RXQFLO RQ +LVWRULF 3UHVHUYDWLRQ GHWHUPLQHV WKDW
IDFLOLWLHV7KHVHSURFHGXUHVVKDOODSSO\WREXLOGLQJV FRPSOLDQFH ZLWK WKH UHTXLUHPHQWV IRU DFFHVVLEOH
DQGIDFLOLWLHVGHVLJQDWHGDVKLVWRULFVWUXFWXUHVWKDW URXWHV UDPSVHQWUDQFHVRU WRLOHWIDFLOLWLHVZRXOG
XQGHUJRDOWHUDWLRQVRUDFKDQJHRIRFFXSDQF\ WKUHDWHQRUGHVWUR\WKHKLVWRULFVLJQLILFDQFHRIWKH
EXLOGLQJRUIDFLOLW\WKHDOWHUQDWLYHUHTXLUHPHQWVRI
™ 7KLV VHFWLRQ SURYLGHV D SURFHVV WR HYDOXDWH 6HFWLRQIRUWKDWHOHPHQWDUHSHUPLWWHG
KLVWRULFDO UHJLVWHUHG EXLOGLQJV LQ WKH HYHQW
ZKHUH DFFHVVLELOLW\ UHTXLUHPHQWV PD\

6%&&& 

$SSHQGL[%²6XSSOHPHQWDU\$FFHVVLELOLW\5HTXLUHPHQWVIRU([LVWLQJ%XLOGLQJVDQG)DFLOLWLHV

™ ,I D IDFLOLW\ LV VXEMHFW WR 6HFWLRQ  RI WKH KLVWRULFGLVWULFWRUDUHDWKDWJURXSFDQWDNHRQ
1DWLRQDO +LVWRULF 3UHVHUYDWLRQ $FW 1+3$ RU WKHUROHRIWKHKLVWRULFSUHVHUYDWLRQRIILFHU
ORFDO HTXLYDOHQW 6&7+  WKLV VHFWLRQ RXWOLQHV
WKH SURFHGXUH WR IROORZ ZLWK WKH DJHQF\ %'LVSOD\V  ,Q TXDOLILHG KLVWRULF EXLOGLQJV
LQYROYHG WR DOORZ WKH IDFLOLW\ WR XWLOL]H WKH DQG IDFLOLWLHV ZKHUH DOWHUQDWLYH UHTXLUHPHQWV RI
DOWHUQDWLYHV RIIHUHG LQ 6HFWLRQ  7KLV 6HFWLRQ  DUH SHUPLWWHG GLVSOD\V DQG ZULWWHQ
LQIRUPDWLRQ LV UHSHDWHG LQ 6HFWLRQV  DQG LQIRUPDWLRQVKDOOEHORFDWHGZKHUHWKH\FDQEHVHHQ
 E\ D VHDWHG SHUVRQ ([KLELWV DQG VLJQV GLVSOD\HG
KRUL]RQWDOO\VKDOO EH  P PD[LPXPDERYH WKH
%4XDOLILHGKLVWRULFEXLOGLQJVDQGIDFLOLWLHV
IORRU
QRW VXEMHFW WR 6DXGL &RPPLVVLRQ IRU 7RXULVP
DQG 1DWLRQDO +HULWDJH 6&7+ $FW  :KHUH DQ ™ 'LVSOD\VH[KLELWVDQGVLJQVLQKLVWRULFEXLOGLQJV
DOWHUDWLRQRUFKDQJHRIRFFXSDQF\LVXQGHUWDNHQWR PXVW EH ORFDWHG VR WKDW D SHUVRQ LQ D
D TXDOLILHGKLVWRULFEXLOGLQJ RU IDFLOLW\WKDW LV QRW ZKHHOFKDLUFDQORRNDWWKHP
VXEMHFWWR6&7+$FWDQGWKHHQWLW\XQGHUWDNLQJWKH 
DOWHUDWLRQV EHOLHYHV WKDW FRPSOLDQFH ZLWK WKH
UHTXLUHPHQWV IRU DFFHVVLEOH URXWHV UDPSV 6(&7,21%),;('75$163257$7,21
HQWUDQFHV RU WRLOHW IDFLOLWLHV ZRXOG WKUHDWHQ RU )$&,/,7,(6$1'67$7,216
GHVWUR\WKHKLVWRULFVLJQLILFDQFHRIWKHEXLOGLQJRU %*HQHUDO  ([LVWLQJ IL[HG WUDQVSRUWDWLRQ
IDFLOLW\ WKH HQWLW\ VKDOO FRQVXOW ZLWK WKH 6&7+ IDFLOLWLHV DQG VWDWLRQV VKDOO FRPSO\ ZLWK 6HFWLRQ
UHSUHVHQWDWLYH RU QDWLRQDO KLVWRULF SUHVHUYDWLRQ %
RIILFHU :KHUH WKH QDWLRQDO KLVWRULF SUHVHUYDWLRQ
™ )L[HGWUDQVSRUWDWLRQIDFLOLWLHVDQGVWDWLRQVVXFK
RIILFHU GHWHUPLQHV WKDW FRPSOLDQFH ZLWK WKH
DVWUDLQRUOLJKWUDLOVWDWLRQVSURYLGHDFFHVVWR
DFFHVVLELOLW\ UHTXLUHPHQWV IRU DFFHVVLEOH URXWHV SXEOLF WUDQVSRUWDWLRQ DQG DUH FRQVLGHUHG DQ
UDPSVHQWUDQFHVRUWRLOHWIDFLOLWLHVZRXOGWKUHDWHQ HVVHQWLDO VHUYLFH WKHUHIRUH DFFHVVLELOLW\ LQ
RUGHVWUR\WKHKLVWRULFDOVLJQLILFDQFHRIWKHEXLOGLQJ WKHVH IDFLOLWLHV LV RI VSHFLDO FRQFHUQ
RUIDFLOLW\WKHDOWHUQDWLYHUHTXLUHPHQWVRI6HFWLRQ 5HTXLUHPHQWV IRU QHZ FRQVWUXFWLRQ FDQ EH
IRUWKDWHOHPHQWDUHSHUPLWWHG IRXQGLQ$SSHQGL[(RIWKH6%&
™ ,IDIDFLOLW\LVQRWVXEMHFWWR6HFWLRQRIWKH %([LVWLQJ IDFLOLWLHV²NH\ VWDWLRQV  5DSLG
1+3$ WKLV VHFWLRQ RXWOLQHV WKH SURFHGXUH WR UDLO OLJKW UDLO FRPPXWHU UDLO LQWHUFLW\ UDLO KLJK
IROORZ ZLWK WKH KLVWRULF SUHVHUYDWLRQ RIILFHU WR VSHHGUDLODQGRWKHUIL[HGJXLGHZD\V\VWHPVDOWHUHG
DOORZ WKH IDFLOLW\ WR XWLOL]H WKH DOWHUQDWLYHV VWDWLRQV DQG LQWHUFLW\ UDLO DQG NH\ VWDWLRQV DV
RIIHUHG LQ 6HFWLRQ  7KLV LQIRUPDWLRQ LV
GHILQHG XQGHU FULWHULD HVWDEOLVKHG E\ WKH
UHSHDWHGLQ6HFWLRQVDQG
7UDQVSRUWDWLRQ0LQLVWU\5HJXODWLRQVDQG7HFKQLFDO
% &RQVXOWDWLRQ ZLWK LQWHUHVWHG 5HTXLUHPHQWVVKDOOFRPSO\ZLWK6HFWLRQV%
SHUVRQV  ,QWHUHVWHG SHUVRQV VKDOO EH LQYLWHG WR WKURXJK%
SDUWLFLSDWH LQ WKH FRQVXOWDWLRQ SURFHVV LQFOXGLQJ
™ ([LVWLQJJXLGHZD\V\VWHPIDFLOLWLHVDUHUHTXLUHG
QDWLRQDO DFFHVVLELOLW\ RIILFLDOV LQGLYLGXDOV ZLWK WR PHHW D OHVVHU GHJUHH RI DFFHVVLELOLW\
GLVDELOLWLHV DQG RUJDQL]DWLRQV UHSUHVHQWLQJ VSHFLILHG LQ 6HFWLRQV % WKURXJK
LQGLYLGXDOVZLWKGLVDELOLWLHV %
™ 6RPHW\SHRISXEOLFIRUXPRUPHHWLQJPXVWEH % $FFHVVLEOH URXWH  $W OHDVW RQH
KHOGWRDOORZIRUWKHLQSXWRILQWHUHVWHGSDUWLHV DFFHVVLEOH URXWH IURP DQ DFFHVVLEOH HQWUDQFH WR
WKDWPD\ZLVKWRXWLOL]HWKHIDFLOLWLHVRIIHUHGLQ
WKRVHDUHDVQHFHVVDU\IRUXVHRIWKHWUDQVSRUWDWLRQ
WKHKLVWRULFEXLOGLQJ
V\VWHPVKDOOEHSURYLGHG7KHDFFHVVLEOHURXWHVKDOO
% &HUWLILHG ORFDO JRYHUQPHQW LQFOXGHWKHIHDWXUHVVSHFLILHGLQ$SSHQGL[(
KLVWRULF SUHVHUYDWLRQ SURJUDPV  :KHUH WKH RIWKH6%&H[FHSWWKDWHVFDODWRUVVKDOOFRPSO\
QDWLRQDOKLVWRULFSUHVHUYDWLRQRIILFHUKDVGHOHJDWHG ZLWK 6%&  6HFWLRQ  :KHUH WHFKQLFDO
WKHFRQVXOWDWLRQUHVSRQVLELOLW\IRUSXUSRVHVRIWKLV XQIHDVLELOLW\ LQ H[LVWLQJ VWDWLRQV UHTXLUHV WKH
VHFWLRQ WR D JRYHUQPHQW KLVWRULF SUHVHUYDWLRQ DFFHVVLEOHURXWH WR OHDG IURP WKH SXEOLF ZD\ WR D
SURJUDPWKDWKDVEHHQFHUWLILHGLQDFFRUGDQFHZLWK SDLG DUHD RI WKH WUDQVLWV\VWHPDQ DFFHVVLEOHIDUH
6&7+ UHJXODWLRQV WKH UHVSRQVLELOLW\ VKDOO EH FROOHFWLRQ PDFKLQH FRPSO\LQJ ZLWK 6%& 
SHUPLWWHG WR EH FDUULHG RXW E\ WKH DSSURSULDWH $SSHQGL[ ( VKDOO EH SURYLGHG DORQJ VXFK
JRYHUQPHQWERG\RURIILFLDO DFFHVVLEOHURXWH
™ ,I D ORFDO JURXS LV FHUWLILHG LQ DFFRUGDQFH ZLWK ™ $W OHDVW RQH DFFHVVLEOH URXWH LV UHTXLUHG
WKH 6&7+ RU 1+3$ WR RYHUVHH DFWLYLW\ LQ D WKURXJKRXW SDVVHQJHU DUHDV LQ DQ H[LVWLQJ

6%&&& 

$SSHQGL[%²6XSSOHPHQWDU\$FFHVVLELOLW\5HTXLUHPHQWVIRU([LVWLQJ%XLOGLQJVDQG)DFLOLWLHV

IDFLOLW\ ([LVWLQJ HVFDODWRUV LQ VXEZD\ VWDWLRQV ™ 1HZEXLOGLQJVWKDWSURYLGHDGLUHFWFRQQHFWLRQ

DUHQRWUHTXLUHGWRPHHWWKHFULWHULDIRUD WRWKHH[LVWLQJWUDQVLWV\VWHPVPXVWDOVRKDYH
P PLQLPXP FOHDU ZLGWK LQ 6%&  6HFWLRQ DQDFFHVVLEOHURXWHWRWKH WUDQVLWV\VWHP7KH
,ILWLVWHFKQLFDOO\LQIHDVLEOHWRSURYLGH H[FHSWLRQVLQ6HFWLRQDUHDSSOLFDEOH7KLV
DQDFFHVVLEOHURXWHIURPWKHHQWUDQFHWRDWLFNHW LQIRUPDWLRQLVUHSHDWHGLQ6HFWLRQ
VDOHVDUHDVRPHW\SHRIIDUHWDNLQJPDFKLQHU\
PD\EHSURYLGHGDORQJWKHDFFHVVLEOHURXWHWR 6(&7,21%':(//,1*81,76$1'
WKHWUDLQSODWIRUP 6/((3,1*81,76
% 3ODWIRUP DQG YHKLFOH IORRU %&RPPXQLFDWLRQ IHDWXUHV  :KHUH
FRRUGLQDWLRQ6WDWLRQSODWIRUPVVKDOOEHSRVLWLRQHG GZHOOLQJ XQLWV DQG VOHHSLQJ XQLWV DUH DOWHUHG RU
WR FRRUGLQDWH ZLWK YHKLFOHV LQ DFFRUGDQFH ZLWK DGGHGWKHUHTXLUHPHQWVRI6HFWLRQ(RI6%&
DSSOLFDEOH SURYLVLRQV RI 7UDQVSRUWDWLRQ 0LQLVWU\  VKDOO DSSO\ RQO\ WR WKH XQLWV EHLQJ DOWHUHGRU
/RZOHYHO SODWIRUPV VKDOO EH  P PLQLPXP DGGHG XQWLO WKH QXPEHU RI XQLWV ZLWK DFFHVVLEOH
DERYHWRSRIUDLO FRPPXQLFDWLRQ IHDWXUHV FRPSOLHV ZLWK WKH
PLQLPXPQXPEHUUHTXLUHGIRUQHZFRQVWUXFWLRQ
([FHSWLRQ  :KHUH YHKLFOHV DUH ERDUGHG IURP
VLGHZDONVRUVWUHHWOHYHOORZOHYHOSODWIRUPVVKDOO ™ &RPPXQLFDWLRQ IHDWXUHV DUH UHTXLUHG LQ D
OLPLWHG QXPEHU RI URRPV LQ WUDQVLHQW ORGJLQJ
EHSHUPLWWHGWREHOHVVWKDQP
DQG MDLOV VHH 6%&  $SSHQGL[ ( 6HFWLRQ
™ ,Q H[LVWLQJ IDFLOLWLHV WKH YHUWLFDO VHSDUDWLRQ ( 7KH LQWHQW LV WR DOORZ IRU VSHFLDO
EHWZHHQ WKH SODWIRUP DQG WKH FDUV LV VOLJKWO\ IHDWXUHVIRUSHRSOHZLWKKHDULQJLPSDLUPHQWVLQ
OHVV UHVWULFWLYH WKDQ LQ QHZ FRQVWUXFWLRQ 7KH WKRVHIDFLOLWLHV
JDSEHWZHHQWKHSODWIRUPDQGWKHFDUVLVRQO\ ™ :KHUHWUDQVLHQWORGJLQJGZHOOLQJDQGVOHHSLQJ
PHDVXUHG DW DFFHVVLEOH FDUV 5HWURILWWHG FDUV XQLWVDUHDOWHUHGRUDGGHGRQO\WKHVHXQLWVDUH
PD\KDYHDQHYHQODUJHUYDULDQFH:KHUHWUDLQ FRXQWHGWRGHWHUPLQHWKHQXPEHURIXQLWVWKDW
FDUV FDQQRW PHHW WKH YHUWLFDO VHSDUDWLRQ DQG ZLOOUHTXLUHDFFHVVLEOHFRPPXQLFDWLRQIHDWXUHV
JDSUHTXLUHPHQWVDOWHUQDWLYHVVXFKDVOLIWVDQG 2QFH WKH HQWLUH EXLOGLQJ PHHWV WKH QXPEHU
UDPSVPD\EHXWLOL]HG UHTXLUHG IRU QHZ FRQVWUXFWLRQ QR DGGLWLRQDO
DFFHVVLEOH FRPPXQLFDWLRQ IHDWXUHV DUH
% 'LUHFW FRQQHFWLRQV  1HZ GLUHFW UHTXLUHG7KLVLVFRQVLVWHQWZLWKWKHLQWHQWLQWKH
FRQQHFWLRQV WR FRPPHUFLDO UHWDLO RU UHVLGHQWLDO FRGHH[SUHVVHGIRUZKHQ$FFHVVLEOHDQG7\SH
IDFLOLWLHV VKDOO WR WKH PD[LPXP H[WHQW IHDVLEOH $XQLWVDUHUHTXLUHGLQH[LVWLQJEXLOGLQJV
KDYH DQ DFFHVVLEOH URXWH FRPSO\LQJ ZLWK 6HFWLRQ
 IURP WKH SRLQW RI FRQQHFWLRQ WR ERDUGLQJ 6(&7,21%5()(5(1&('
SODWIRUPVDQGWUDQVSRUWDWLRQV\VWHPHOHPHQWVXVHG 67$1'$5'6
E\WKHSXEOLF$Q\HOHPHQWVSURYLGHGWRIDFLOLWDWH 6DXGL &RPPLVVLRQ IRU 7RXULVP DQG 1DWLRQDO
IXWXUHGLUHFWFRQQHFWLRQVVKDOOEHRQDQDFFHVVLEOH +HULWDJH 6&7+ $FW KWWSVZZZVFWDJRYVDH
URXWH FRQQHFWLQJ ERDUGLQJ SODWIRUPV DQG Q3DJHVGHIDXOWDVS[
WUDQVSRUWDWLRQV\VWHPHOHPHQWVXVHGE\WKHSXEOLF 7UDQVSRUWDWLRQ0LQLVWU\KWWSVPRWJRYVDHQXV
7.LQJGRP6SHFLILFDWLRQV3DJHVGHIDXOWDVS[


6%&&& 

$SSHQGL[%²6XSSOHPHQWDU\$FFHVVLELOLW\5HTXLUHPHQWVIRU([LVWLQJ%XLOGLQJVDQG)DFLOLWLHV
























7KLVSDJHOHIWLQWHQWLRQDOO\EODQN

6%&&& 

$SSHQGL[&²$SSHQGL[&*XLGHOLQHVIRUWKH:LQG5HWURILWRI([LVWLQJ

$33(1',;&²*XLGHOLQHVIRUWKH:LQG5HWURILWRI([LVWLQJ

6%&&& 

&+$37(5&²*$%/((1'5(752),7)25+,*+:,1'$5($6

&+$37(5&²*$%/((1'5(752),7)25+,*+:,1'
$5($6

127$33/,&$%/(1$
6HH,QWHUQDWLRQDO([LVWLQJ%XLOGLQJ&RGH

6%&&& 

&+$37(5&²*$%/((1'5(752),7)25+,*+:,1'$5($6

&+$37(5&²*$%/((1'5(752),7)25+,*+:,1'
$5($6

127$33/,&$%/(1$
6HH,QWHUQDWLRQDO([LVWLQJ%XLOGLQJ&RGH


6%&&& 

&+$37(5&²*$%/((1'5(752),7)25+,*+:,1'$5($6

%,%/,2*5$3+<  'HSDUWPHQW RI 6FLHQWLILF DQG ,QGXVWULDO

5HVHDUFKDQGRIWKH)LUH2IILFHV¶&RPPLWWHH
 &HQWUDO +RXVLQJ &RPPLWWHH RQ 5HVHDUFK -RLQW &RPPLWWHH RI WKH %XLOGLQJ 5HVHDUFK
'HVLJQ DQG &RQVWUXFWLRQ 6XEFRPPLWWHH RQ %RDUG ³)LUH *UDGLQJV RI %XLOGLQJV 3DUW ,
)LUH 5HVLVWDQFH &ODVVLILFDWLRQV ³)LUH *HQHUDO 3ULQFLSOHV DQG 6WUXFWXUDO
5HVLVWDQFH &ODVVLILFDWLRQV RI %XLOGLQJ 3UHFDXWLRQV´ 3RVW:DU %XLOGLQJ 6WXGLHV 1R
&RQVWUXFWLRQV´ %XLOGLQJ 0DWHULDOV DQG 0LQLVWU\RI:RUNV/RQGRQ
6WUXFWXUHV5HSRUW%061DWLRQDO%XUHDXRI  /DZVRQ',:HEVWHU&7DQG$VKWRQ/
6WDQGDUGV:DVKLQJWRQ2FW$YDLODEOH $ ³)LUH (QGXUDQFH RI 7LPEHU %HDPV DQG
IURP17,61R&20 )ORRUV´1DWLRQDO%XLOGLQJ6WXGLHV%XOOHWLQ1R
 )RVWHU+'3LQNVWRQ(5DQG,QJEHUJ6 'HSWRI6FLHQWLILFDQG,QGXVWULDO5HVHDUFK
+ ³)LUH 5HVLVWDQFH RI 6WUXFWXUDO &OD\ 7LOH DQG )LUH 2IILFHV¶ &RPPLWWHH -RLQW )LUH
3DUWLWLRQV´%XLOGLQJ0DWHULDOVDQG 6WUXFWXUHV 5HVHDUFK2UJDQL]DWLRQ/RQGRQ
5HSRUW %06  1DWLRQDO %XUHDX RI  3DUNHU 7 : 1XUVH 5 : DQG %HVVH\ *
6WDQGDUGV:DVKLQJWRQ2FW ( ³,QYHVWLJDWLRQV RQ %XLOGLQJ )LUHV 3DUW ,
 5\DQ - 9 DQG %HQGHU (: ³)LUH 7KH(VWLPDWLRQRIWKH0D[LPXP7HPSHUDWXUH
(QGXUDQFH RI 2SHQ:HE 6WHHO-RLVW )ORRUV $WWDLQHGLQ%XLOGLQJ)LUHVIURP([DPLQDWLRQRI
ZLWK &RQFUHWH 6ODEV DQG *\SVXP &HLOLQJV´ WKH'HEULVDQG3DUW,,7KH9LVLEOH&KDQJHLQ
%XLOGLQJ0DWHULDOVDQG6WUXFWXUHV5HSRUW%06 &RQFUHWH RU 0RUWDU ([SRVHG WR +LJK
 1DWLRQDO %XUHDX RI 6WDQGDUGV 7HPSHUDWXUHV´ 1DWLRQDO %XLOGLQJ 6WXGLHV
:DVKLQJWRQ$XJ 7HFKQLFDO3DSHU1R'HSWRI6FLHQWLILFDQG
 0LWFKHOO 1 ' ³)LUH 7HVWV RI :RRG)UDPHG ,QGXVWULDO 5HVHDUFK %XLOGLQJ 5HVHDUFK
:DOOV DQG 3DUWLWLRQV ZLWK $VEHVWRV&HPHQW 6WDWLRQ/RQGRQ
)DFLQJV´ %XLOGLQJ 0DWHULDOV DQG 6WUXFWXUHV  %HYDQ 5 & DQG :HEVWHU & 7
5HSRUW %06  1DWLRQDO %XUHDX RI ³,QYHVWLJDWLRQV RQ %XLOGLQJ )LUHV 3DUW ,,,
6WDQGDUGV:DVKLQJWRQ0D\ 5DGLDWLRQ IURP %XLOGLQJ )LUHV´ 1DWLRQDO
 5RELQVRQ+(&RVJURYH/$DQG3RZHOO %XLOGLQJ 6WXGLHV 7HFKQLFDO 3DSHU 1R 
) - ³7KHUPDO 5HVLVWDQFH RI $LUVSDFH DQG 'HSW RI 6FLHQWLILF DQG ,QGXVWULDO 5HVHDUFK
)LEURXV ,QVXODWLRQV %RXQGHG E\ 5HIOHFWLYH %XLOGLQJ5HVHDUFK6WDWLRQ/RQGRQ
6XUIDFHV´ %XLOGLQJ 0DWHULDOV DQG 6WUXFWXUHV  :HEVWHU ' - DQG $VKWRQ / $
5HSRUW %06  1DWLRQDO %XUHDX RI ³,QYHVWLJDWLRQVRQ%XLOGLQJ)LUHV3DUW,9)LUH
6WDQGDUGV:DVKLQJWRQ1RY 5HVLVWDQFH RI 7LPEHU 'RRUV´ 1DWLRQDO
 6KRXE + DQG ,QJEHUJ 6 + ³)LUH %XLOGLQJ 6WXGLHV 7HFKQLFDO 3DSHU 1R 
5HVLVWDQFH RI 6WHHO 'HFN )ORRU $VVHPEOLHV´ 'HSW RI 6FLHQWLILF DQG ,QGXVWULDO 5HVHDUFK
%XLOGLQJ 6FLHQFH 6HULHV1DWLRQDO %XUHDX %XLOGLQJ5HVHDUFK6WDWLRQ/RQGRQ
RI6WDQGDUGV:DVKLQJWRQ'HF  .LGGHU ) ( $UFKLWHFWV¶ DQG %XLOGHUV¶
 'DYH\ 1 DQG $VKWRQ / $ ³,QYHVWLJDWLRQV +DQGERRN 'DWD IRU $UFKLWHFWV 6WUXFWXUDO
RQ %XLOGLQJ )LUHV 3DUW 9 )LUH 7HVWV RI (QJLQHHUV &RQWUDFWRUV DQG 'UDXJKWVPHQ
6WUXFWXUDO (OHPHQWV´ 1DWLRQDO %XLOGLQJ FRPSE\D6WDIIRI6SHFLDOLVWVDQG+3DUNHU
6WXGLHV 5HVHDUFK 3DSHU 1R  'HSW RI HGLWRULQFKLHI WK HG HQO - :LOH\ 1HZ
6FLHQWLILF DQG ,QGXVWULDO 5HVHDUFK %XLOGLQJ <RUN
5HVHDUFK6WDWLRQ/RQGRQ  3DUNHU+*D\&0DQG0DF*XLUH-:
 1DWLRQDO %RDUG RI )LUH 8QGHUZULWHUV )LUH 0DWHULDOV DQG 0HWKRGV RI $UFKLWHFWXUDO
5HVLVWDQFH 5DWLQJV RI %HDP *LUGHU DQG &RQVWUXFWLRQ UG HG - :LOH\ 1HZ <RUN
7UXVV 3URWHFWLRQV &HLOLQJ &RQVWUXFWLRQV 
&ROXPQ 3URWHFWLRQV )ORRU DQG &HLOLQJ  'LHWV$*+'ZHOOLQJ+RXVH&RQVWUXFWLRQ
&RQVWUXFWLRQV5RRI&RQVWUXFWLRQV:DOOVDQG 7KH0,73UHVV&DPEULGJH
3DUWLWLRQV1HZ<RUN$SULO  &URVE\(8DQG)LVNH+$+DQGERRNRI
 0LWFKHOO 1' %HQGHU (' DQG 5\DQ -9 )LUH 3URWHFWLRQ WK HG 7KH ,QVXUDQFH )LHOG
³)LUH 5HVLVWDQFH RI 6KXWWHUV IRU 0RYLQJ &RPSDQ\/RXLVYLOOH.\
6WDLUZD\ 2SHQLQJV´ %XLOGLQJ 0DWHULDOV DQG  &URVE\(8)LVNH+$DQG)RUVWHU+:
6WUXFWXUHV5HSRUW%061DWLRQDO%XUHDX +DQGERRN RI )LUH 3URWHFWLRQ WK HG 5 6
RI6WDQGDUGV:DVKLQJWRQ0DUFK 0RXOWRQ JHQHUDO HGLWRU 1DWLRQDO )LUH
 1DWLRQDO %RDUG RI)LUH8QGHUZULWHUV1DWLRQDO 3URWHFWLRQ$VVRFLDWLRQ%RVWRQ
%XLOGLQJ&RGHDQ2UGLQDQFH3URYLGLQJIRU)LUH  .LGGHU ) ( %XLOGLQJ &RQVWUXFWLRQ DQG
/LPLWV DQG 5HJXODWLRQV *RYHUQLQJ WKH 6XSHULQWHQGHQFH UHY DQG HQO E\ 7 1RODQ
&RQVWUXFWLRQ $OWHUDWLRQ (TXLSPHQW RU :7&RPVWRFN1HZ<RUNYROV
5HPRYDORI%XLOGLQJVRU6WUXFWXUHV1HZ<RUN  1DWLRQDO )LUH 3URWHFWLRQ $VVRFLDWLRQ
 &RPPLWWHH RQ )LUH5HVLVWLYH &RQVWUXFWLRQ

6%&&& 

&+$37(5&²*$%/((1'5(752),7)25+,*+:,1'$5($6

7KH %DOWLPRUH &RQIODJUDWLRQ QG HG %RDUG´1DWLRQDO%XUHDXRI6WDQGDUGV1%6,5

&KLFDJR :DVKLQJWRQ
 3U]HWDN/6WDQGDUG'HWDLOVIRU)LUH5HVLVWLYH  *DOEUHDWK 0 ³)LUH 7HVWV RI :RRG 'RRU
%XLOGLQJ&RQVWUXFWLRQ0F*UDZ+LOO%RRN&R $VVHPEOLHV´ )LUH 6WXG\ 1R  'LY RI
1HZ<RUN %XLOGLQJ5HVHDUFK1DWLRQDO5HVHDUFK&RXQFLO
 +LUG ' DQG )LVFKO & ) ³)LUH +D]DUG RI &DQDGD2WWDZD0D\
,QWHUQDO /LQLQJV´ 1DWLRQDO %XLOGLQJ 6WXGLHV  0RUULV : $ ³$Q ,QYHVWLJDWLRQ LQWR WKH )LUH
6SHFLDO5HSRUW1R'HSWRI6FLHQWLILFDQG 5HVLVWDQFH RI 7LPEHU 'RRUV´ )LUH 5HVHDUFK
,QGXVWULDO 5HVHDUFK DQG )LUH 2IILFHV¶ 1RWH 1R  )LUH 5HVHDUFK 6WDWLRQ
&RPPLWWHH-RLQW)LUH5HVHDUFK2UJDQL]DWLRQ %RUHKDP:RRG-DQ
/RQGRQ  +DOO * 6 ³)LUH 5HVLVWDQFH 7HVWV RI
 0HQ]HO & $ 7HVWV RI WKH )LUH5HVLVWDQFH /DPLQDWHG 7LPEHU %HDPV´ 7LPEHU
DQG 6WUHQJWK RI :DOOV &RQFUHWH 0DVRQU\ $VVRFLDWLRQ5HVHDUFK5HSRUW:555+LJK
8QLWV3RUWODQG&HPHQW$VVRFLDWLRQ&KLFDJR 6\FRPEH-XO\
  *RDOZLQ ' 6 ³)LUH 5HVLVWDQFH RI &RQFUHWH
 +DPLOWRQ 6 % ³$ 6KRUW +LVWRU\ RI WKH )ORRUV´ %XLOGLQJ 0DWHULDOV DQG 6WUXFWXUHV
6WUXFWXUDO )LUH 3URWHFWLRQ RI %XLOGLQJV 5HSRUW %06  1DWLRQDO %XUHDX RI
3DUWLFXODUO\ LQ (QJODQG´ 1DWLRQDO %XLOGLQJ 6WDQGDUGV:DVKLQJWRQ'HF
6WXGLHV 6SHFLDO 5HSRUW 1R  'HSW RI  0LWFKHOO1'DQG5\DQ-9³)LUH7HVWVRI
6FLHQWLILF DQG ,QGXVWULDO 5HVHDUFK %XLOGLQJ 6WHHO &ROXPQV (QFDVHG ZLWK *\SVXP /DWK
5HVHDUFK6WDWLRQ/RQGRQ DQG 3ODVWHU´ %XLOGLQJ 0DWHULDOV DQG
 6DFKV ( 2 DQG 0DUVODQG ( ³7KH )LUH 6WUXFWXUHV5HSRUW%061DWLRQDO%XUHDX
5HVLVWDQFH RI 'RRUV DQG 6KXWWHUV EHLQJ RI6WDQGDUGV:DVKLQJWRQ$SULO
7DEXODWHG5HVXOWVRI)LUH7HVWV&RQGXFWHGE\  ,QJEHUJ 6 + ³)LUH 7HVWV RI %ULFN :DOOV´
WKH &RPPLWWHH´ -RXUQDO RI WKH %ULWLVK )LUH %XLOGLQJ0DWHULDOVDQG6WUXFWXUHV5HSRUW%06
3UHYHQWLRQ&RPPLWWHH1R9,,/RQGRQ  1DWLRQDO %XUHDX RI 6WDQGDUGV
 (JDQ0'&RQFHSWVLQ%XLOGLQJ)LUHVDIHW\ :DVKLQJWRQ1RY
-:LOH\1HZ<RUN  1DWLRQDO %XUHDX RI 6WDQGDUGV ³)LUH
 6DFKV ( 2 DQG 0DUVODQG ( ³7KH )LUH 5HVLVWDQFH DQG 6RXQG,QVXODWLRQ 5DWLQJV IRU
5HVLVWDQFHRI)ORRUVEHLQJ7DEXODWHG5HVXOWV :DOOV 3DUWLWLRQV DQG )ORRUV´ 7HFKQLFDO
RI )LUH 7HVWV &RQGXFWHG E\ WKH &RPPLWWHH´ 5HSRUWRQ%XLOGLQJ0DWHULDOV:DVKLQJWRQ
-RXUQDO RI WKH %ULWLVK )LUH 3UHYHQWLRQ 
&RPPLWWHH1R9,/RQGRQ  0DOKRWUD+/³)LUH5HVLVWDQFHRI%ULFNDQG
 6DFKV ( 2 DQG 0DUVODQG ( ³7KH )LUH %ORFN :DOOV´ )LUH 1RWH 1R  0LQLVWU\ RI
5HVLVWDQFH RI 3DUWLWLRQV EHLQJ 7DEXODWHG 7HFKQRORJ\DQG)LUH2IILFHV¶&RPPLWWHH-RLQW
5HVXOWV RI )LUH 7HVWV &RQGXFWHG E\ WKH )LUH 5HVHDUFK 2UJDQL]DWLRQ /RQGRQ +062
&RPPLWWHH´ -RXUQDO RI WKH %ULWLVK )LUH 
3UHYHQWLRQ&RPPLWWHH1R,;/RQGRQ  0LWFKHOO 1 ' ³)LUH 7HVWV RI 6WHHO &ROXPQV
 5\DQ-9DQG%HQGHU(:³)LUH7HVWVRI 3URWHFWHGZLWK6LOLFHRXV$JJUHJDWH&RQFUHWH´
3UHFDVW&HOOXODU&RQFUHWH )ORRUV DQG5RRIV´ %XLOGLQJ0DWHULDOVDQG6WUXFWXUHV5HSRUW%06
1DWLRQDO%XUHDXRI6WDQGDUGV0RQRJUDSK  1DWLRQDO %XUHDX RI 6WDQGDUGV
:DVKLQJWRQ$SULO :DVKLQJWRQ0D\
 .LQJEHUJ 6 + DQG )RVWHU + ' ³)LUH  )UHLWDJ - . )LUH 3UHYHQWLRQ DQG )LUH
5HVLVWDQFHRI+ROORZ/RDG%HDULQJ:DOO7LOH´ 3URWHFWLRQDV$SSOLHGWR%XLOGLQJ&RQVWUXFWLRQ
1DWLRQDO %XUHDX RI 6WDQGDUGV 5HVHDUFK D+DQGERRNRI7KHRU\DQG3UDFWLFHQGHG
3DSHU 1R  5HSULQW IURP 1%6 -RXUQDO RI -:LOH\1HZ<RUN
5HVHDUFK9RO:DVKLQJWRQ  ,QJEHUJ6+DQG0LWFKHOO1'³)LUH7HVWV
 +XOO : $ DQG ,QJEHUJ 6 + ³)LUH RI:RRGDQG0HWDO)UDPHG3DUWLWLRQ´%XLOGLQJ
5HVLVWDQFH RI &RQFUHWH &ROXPQV´ 0DWHULDOV DQG 6WUXFWXUHV 5HSRUW %06 
7HFKQRORJLF 3DSHUV RI WKH %XUHDX RI 1DWLRQDO %XUHDX RI 6WDQGDUGV :DVKLQJWRQ
6WDQGDUGV 1R  9RO  :DVKLQJWRQ 
SS  &HQWUDO +RXVLQJ &RPPLWWHH RQ 5HVHDUFK
 1DWLRQDO %RDUG RI )LUH 8QGHUZULWHUV )LUH 'HVLJQ DQG &RQVWUXFWLRQ 6XEFRPPLWWHH RQ
5HVLVWDQFH 5DWLQJV RI /HVV WKDQ 2QH +RXU 'HILQLWLRQV ³$ *ORVVDU\ RI +RXVLQJ 7HUPV´
1HZ<RUN$XJ %XLOGLQJ0DWHULDOVDQG6WUXFWXUHV5HSRUW%06
 +DUPDWK\7=³7HQ5XOHVRI)LUH(QGXUDQFH  1DWLRQDO %XUHDX RI 6WDQGDUGV
5DWLQJ´ )LUH 7HFKQRORJ\ 9RO  0D\  :DVKLQJWRQ6HSW
SS  &URVE\(8)LVNH+$DQG)RUVWHU+:
 6RQ % & ³)LUH (QGXUDQFH 7HVW RQ D 6WHHO +DQGERRN RI )LUH 3URWHFWLRQ WK HG ' 9DQ
7XEXODU &ROXPQ 3URWHFWHG ZLWK *\SVXP 1RVWUDQG&R1HZ<RUN

6%&&& 

&+$37(5&²*$%/((1'5(752),7)25+,*+:,1'$5($6

 %LUG(/DQG'RFNLQJ6-)LUHLQ%XLOGLQJV  )UHLWDJ - . $UFKLWHFWXUDO (QJLQHHULQJ ZLWK

$ &%ODFN/RQGRQ (VSHFLDO 5HIHUHQFH WR +LJK %XLOGLQJ
 $PHULFDQ ,QVWLWXWH RI 6WHHO &RQVWUXFWLRQ )LUH &RQVWUXFWLRQ ,QFOXGLQJ 0DQ\ ([DPSOHV RI
5HVLVWDQW &RQVWUXFWLRQ LQ 0RGHUQ 6WHHO 3URPLQHQW2IILFH%XLOGLQJVQGHGUHZULWWHQ
)UDPHG%XLOGLQJV1HZ<RUN -:LOH\1HZ<RUN
 &HQWUDO'RFN\DUG/DERUDWRU\³)LUH5HWDUGDQW  $UFKLWHFWXUDO 5HFRUG 6ZHHW¶V ,QGH[HG
3DLQW 7HVWV²D &ULWLFDO 5HYLHZ´ &'/ &DWDORJXH RI %XLOGLQJ &RQVWUXFWLRQ IRU WKH
7HFKQLFDO 0HPRUDQGXP 1R 3 + 0 <HDU1HZ<RUN
1DYDO%DVH3RUWVPRXWK'HF  'HSW RI &RPPHUFH %XLOGLQJ &RGH
 0DOKRWUD+/³)LUH5HVLVWDQFHRI6WUXFWXUDO &RPPLWWHH ³5HFRPPHQGHG 0LQLPXP
&RQFUHWH %HDPV´ )LUH 5HVHDUFK 1RWH 1R 5HTXLUHPHQWV IRU )LUH 5HVLVWDQFH LQ
 )LUH 5HVHDUFK 6WDWLRQ %RUHKDPZRRG %XLOGLQJV´ %XLOGLQJ DQG +RXVLQJ 1R 
0D\ 1DWLRQDO %XUHDX RI 6WDQGDUGV :DVKLQJWRQ
 $EUDPV 0 6 DQG *XVWDIHUUR $ + ³)LUH 
7HVWV RI 3RNH7KUX $VVHPEOLHV´ 5HVHDUFK  %ULWLVK 6WDQGDUGV ,QVWLWXWLRQ ³)LUH 7HVWV RQ
DQG 'HYHORSPHQW %XOOHWLQ  3RUWODQG %XLOGLQJ 0DWHULDOV DQG 6WUXFWXUHV´ %ULWLVK
&HPHQW$VVRFLDWLRQ6NRNLH 6WDQGDUGV3W/RQGRQ
 %XOOHQ 0 / ³$ 1RWH RQ WKH 5HODWLRQVKLS  /|EHUJ+ROP . ³*ODVV´ 7KH $UFKLWHFWXUDO
EHWZHHQ6FDOH)LUH([SHULPHQWVDQG6WDQGDUG 5HFRUG2FWSS
7HVW 5HVXOWV´ %XLOGLQJ 5HVHDUFK  6WUXFWXUDO &OD\ 3URGXFWV ,QVWLWXWH ³)LUH
(VWDEOLVKPHQW 1RWH 1 %RUHKDPZRRG 5HVLVWDQFH´7HFKQLFDO1RWHVRQ%ULFNDQG7LOH
0D\ &RQVWUXFWLRQUHY:DVKLQJWRQ
 7KH $PHULFD )RUH *URXS RI ,QVXUDQFH  5DPVH\ & * DQG 6OHHSHU + 5
&RPSDQLHV 5HVHDUFK 'HSDUWPHQW 6RPH $UFKLWHFWXUDO*UDSKLF6WDQGDUGVIRU$UFKLWHFWV
&KDUDFWHULVWLF)LUHVLQ)LUH5HVLVWLYH%XLOGLQJV (QJLQHHUV 'HFRUDWRUV %XLOGHUV DQG
6HOHFWHGIURPWZHQW\\HDUVUHFRUGLQWKHILOHV 'UDIWVPHQUGHG-:LOH\1HZ<RUN
RIWKH1)3$³4XDUWHUO\´1HZ<RUNF  8QGHUZULWHUV¶ /DERUDWRULHV )LUH 3URWHFWLRQ
 6SLHJHOKDOWHU ) ³*XLGH WR 'HVLJQ RI &DYLW\ (TXLSPHQW/LVW&KLFDJR-DQ
%DUULHUV DQG )LUH 6WRSV´ &XUUHQW 3DSHU &3  8QGHUZULWHUV¶ /DERUDWRULHV )LUH 5HVLVWDQFH
 %XLOGLQJ 5HVHDUFK (VWDEOLVKPHQW 'LUHFWRU\ ZLWK +RXUO\ 5DWLQJV IRU %HDPV
%RUHKDPZRRG)HE &ROXPQV)ORRUV5RRIV:DOOVDQG3DUWLWLRQV
 :DUGOH70³1RWHVRQWKH)LUH5HVLVWDQFHRI &KLFDJR-DQ
+HDY\ 7LPEHU &RQVWUXFWLRQ´ ,QIRUPDWLRQ  0LWFKHOO1'³)LUH7HVWVRI*XQLWH6ODEVDQG
6HULHV 1R  1HZ =HDODQG )RUHVW 6HUYLFH 3DUWLWLRQV´ %XLOGLQJ0DWHULDOVDQG 6WUXFWXUHV
:HOOLQJWRQ 5HSRUW %06  1DWLRQDO %XUHDX RI
 )LVKHU5:DQG6PDUW307³5HVXOWVRI 6WDQGDUGV:DVKLQJWRQ0D\
)LUH5HVLVWDQFH7HVWVRQ(OHPHQWVRI%XLOGLQJ  :RROVRQ,+DQG0LOOHU53³)LUH7HVWVRI
&RQVWUXFWLRQ´ %XLOGLQJ 5HVHDUFK )ORRUV LQ WKH 8QLWHG 6WDWHV´ 3URFHHGLQJV
(VWDEOLVKPHQW5HSRUW*5/RQGRQ+062 ,QWHUQDWLRQDO$VVRFLDWLRQIRU7HVWLQJ0DWHULDOV
 9,WK&RQJUHVV1HZ<RUN6HFWLRQ&SS
 6HUH[ ( 5 ³)LUH 5HVLVWDQFH RI $OWD %DWHV 
*\SVXP %ORFN 1RQ/RDG %HDULQJ :DOO´  8QGHUZULWHUV¶ /DERUDWRULHV ³$Q ,QYHVWLJDWLRQ
5HSRUW WR $OWD %DWHV &RPPXQLW\ +RVSLWDO RI WKH (IIHFWV RI )LUH ([SRVXUH XSRQ +ROORZ
6WUXFWXUDO 5HVHDUFK /DERUDWRU\ 5HSRUW (6 &RQFUHWH %XLOGLQJ 8QLWV &RQGXFWHG IRU
8QLYHUVLW\RI&DOLI%HUNHOH\ $PHULFDQ &RQFUHWH ,QVWLWXWH &RQFUHWH
 7KRPDV ) * DQG :HEVWHU & 7 3URGXFWV $VVRFLDWLRQ 3RUWODQG &HPHQW
³,QYHVWLJDWLRQVRQ%XLOGLQJ)LUHV3DUW9,7KH $VVRFLDWLRQ -RLQW 6XEPLWWRUV´ 5HWDUGDQW
)LUH 5HVLVWDQFH RI 5HLQIRUFHG &RQFUHWH 5HSRUW1R&KLFDJR0D\
&ROXPQV´ 1DWLRQDO %XLOGLQJ 6WXGLHV  'HSWRI6FLHQWLILF ,QGXVWULDO5HVHDUFKDQGRI
5HVHDUFK 3DSHU 1R  'HSW RI 6FLHQWLILF WKH )LUH 2IILFHV¶ &RPPLWWHH -RLQW &RPPLWWHH
DQG ,QGXVWULDO 5HVHDUFK %XLOGLQJ 5HVHDUFK RIWKH%XLOGLQJ5HVHDUFK%RDUG³)LUH*UDGLQJV
6WDWLRQ/RQGRQ+062 RI %XLOGLQJV 3DUW ,9 &KLPQH\V DQG )OXHV´
 %XLOGLQJ5HVHDUFK(VWDEOLVKPHQW³7LPEHU)LUH 3RVW:DU %XLOGLQJ 6WXGLHV 1R  /RQGRQ
'RRUV´ 'LJHVW  %RUHKDPZRRG 1RY +062
  1DWLRQDO 5HVHDUFK &RXQFLO RI &DQDGD
 0DVVDFKXVHWWV 6WDWH %XLOGLQJ &RGH $VVRFLDWH&RPPLWWHHRQWKH1DWLRQDO%XLOGLQJ
5HFRPPHQGHG3URYLVLRQV$UWLFOH5HSDLUV &RGH)LUH3HUIRUPDQFH5DWLQJV6XSSO1R
$OWHUDWLRQV $GGLWLRQV DQG &KDQJH RI 8VH RI WR WKH 1DWLRQDO %XLOGLQJ &RGH RI &DQDGD
([LVWLQJ%XLOGLQJV%RVWRQ2FW 2WWDZD

6%&&& 

&+$37(5&²*$%/((1'5(752),7)25+,*+:,1'$5($6

 $VVRFLDWHG )DFWRU\ 0XWXDO )LUH ,QVXUDQFH RQ WK 2FWREHU ´ 6\PSRVLXP 1R 
&RPSDQLHV 7KH 1DWLRQDO %RDUG RI )LUH /RQGRQ+062
8QGHUZULWHUV DQG WKH %XUHDX RI 6WDQGDUGV  6KRXE+DQG*URVV'³'RRUVDV%DUULHUV
)LUH 7HVWV RI %XLOGLQJ &ROXPQV DQ WR)LUHDQG 6PRNH´ %XLOGLQJ6FLHQFH 6HULHV
([SHULPHQWDO ,QYHVWLJDWLRQ RI WKH 5HVLVWDQFH 1DWLRQDO%XUHDXRI6WDQGDUGV:DVKLQJWRQ
RI&ROXPQV/RDGHGDQG([SRVHGWR)LUHRUWR 
)LUHDQG:DWHUZLWK5HFRUGRI&KDUDFWHULVWLF  ,QJEHUJ 6 + ³7KH )LUH 5HVLVWDQFH RI
(IIHFWV -RLQWO\ &RQGXFWHG DW 8QGHUZULWHUV *\SVXP 3DUWLWLRQV´ 3URFHHGLQJV RI WKH
/DERUDWRULHV&KLFDJR $PHULFDQ 6RFLHW\ IRU 7HVWLQJ DQG 0DWHULDOV
 0DOKRWUD + / ³(IIHFW RI $JH RQ WKH )LUH YRO3KLODGHOSKLDSS
5HVLVWDQFHRI5HLQIRUFHG&RQFUHWH&ROXPQV´  ,QJEHUJ 6+ ³,QIOXHQFH RI 0LQHUDO
)LUH 5HVHDUFK 0HPRUDQGXP 1R  )LUH &RPSRVLWLRQRI$JJUHJDWHVRQ)LUH5HVLVWDQFH
5HVHDUFK6WDWLRQ%RUHKDPZRRG$SULO RI &RQFUHWH´ 3URFHHGLQJV RI WKH $PHULFDQ
 %RQG+HG5HVHDUFKRQ)LUHD'HVFULSWLRQ 6RFLHW\ IRU 7HVWLQJ DQG 0DWHULDOV YRO 
RI WKH )DFLOLWLHV 3HUVRQQHO DQG 0DQDJHPHQW 3KLODGHOSKLDSS
RI $JHQFLHV (QJDJHG LQ 5HVHDUFK RQ )LUH D  ,QJEHUJ6+³7KH)LUH5HVLVWLYH3URSHUWLHV
6WDII 5HSRUW 1DWLRQDO )LUH 3URWHFWLRQ RI *\SVXP´ 3URFHHGLQJV RI WKH $PHULFDQ
$VVRFLDWLRQ%RVWRQ 6RFLHW\ IRU 7HVWLQJ DQG 0DWHULDOV YRO 
 &DOLIRUQLD6WDWH+LVWRULFDO%XLOGLQJ&RGH'UDIW 3KLODGHOSKLDSS
  *RWWVFKDON ): ³6RPH )DFWRUV LQ WKH
 )LVKHU ) / HW DO ³$ 6WXG\ RI 3RWHQWLDO ,QWHUSUHWDWLRQ RI 6PDOO6FDOH 7HVWV IRU )LUH
)ODVKRYHU )LUHV LQ :KHHOHU +DOO DQG WKH 5HWDUGDQW :RRG´ %XOOHWLQ RI WKH $PHULFDQ
5HVXOWV IURP D )XOO 6FDOH )LUH 7HVW RI D 6RFLHW\ IRU 7HVWLQJ DQG 0DWHULDOV 2FWREHU
0RGLILHG :KHHOHU +DOO 'RRU $VVHPEO\´ )LUH SS
5HVHDUFK/DERUDWRU\5HSRUW8&;8&;  0LQLVWU\ RI 7HFKQRORJ\ DQG )LUH 2IILFHV¶
 8QLYHUVLW\ RI &DOLI 'HSW RI &LYLO (QJ &RPPLWWHH-RLQW )LUH5HVHDUFK2UJDQL]DWLRQ
%HUNHOH\ ³%HKDYLRXU RI 6WUXFWXUDO 6WHHO LQ )LUH
 )UHLWDJ - . 7KH )LUHSURRILQJ RI 6WHHO 3URFHHGLQJV RI WKH 6\PSRVLXP +HOG DW WKH
%XLOGLQJVVWHG-:LOH\1HZ<RUN )LUH5HVHDUFK6WDWLRQ%RUHKDPZRRG+HUWVRQ
 *URVV ' ³)LHOG %XUQRXW 7HVWV RI $SDUWPHQW WK -DQXDU\ ´ 6\PSRVLXP 1R 
'ZHOOLQJV8QLWV´%XLOGLQJ6FLHQFH6HULHV /RQGRQ+062
1DWLRQDO %XUHDX RI 6WDQGDUGV :DVKLQJWRQ  *XVWDIHUUR$+DQG0DUWLQ/''HVLJQIRU
 )LUH5HVLVWDQFHRI3UHFDVW&RQFUHWHSUHSIRU
 'XQODS0(DQG&DUWZULJKW)3³6WDQGDUG WKH 3UHVWUHVVHG &RQFUHWH ,QVWLWXWH )LUH
)LUH7HVWVIRU&RPEXVWLEOH%XLOGLQJ0DWHULDOV´ &RPPLWWHHVWHG&KLFDJR3&,
3URFHHGLQJV RI WKH $PHULFDQ 6RFLHW\ IRU  ³7KH )LUH (QGXUDQFH RI &RQFUHWH D 6SHFLDO
7HVWLQJ0DWHULDOVYRO3KLODGHOSKLD ,VVXH´ &RQFUHWH &RQVWUXFWLRQ YRO  QR 
SS $XJSS
 0HQ]HO & $ ³7HVWV RI WKH )LUH 5HVLVWDQFH  7KH %ULWLVK &RQVWUXFWLRQDO 6WHHOZRUN
DQG 6WDELOLW\ RI :DOOV RI &RQFUHWH 0DVRQU\ $VVRFLDWLRQ ³0RGHUQ )LUH 3URWHFWLRQ IRU
8QLWV´ 3URFHHGLQJV RI WKH $PHULFDQ 6RFLHW\ 6WUXFWXUDO 6WHHOZRUN´ 3XEOLFDWLRQ 1R )3O
IRU 7HVWLQJ 0DWHULDOV YRO  3KLODGHOSKLD /RQGRQ
SS  8QGHUZULWHUV¶ /DERUDWRULHV ³)LUH +D]DUG
 6WHLQHU $ - ³0HWKRG RI )LUH+D]DUG &ODVVLILFDWLRQ RI %XLOGLQJ 0DWHULDOV´ %XOOHWLQ
&ODVVLILFDWLRQRI%XLOGLQJ0DWHULDOV´%XOOHWLQRI 1R6HSW&KLFDJR
WKH $PHULFDQ 6RFLHW\ IRU 7HVWLQJ DQG &HQWUDO +RXVLQJ &RPPLWWHH RQ 5HVHDUFK
0DWHULDOV0DUFK3KLODGHOSKLDSS 'HVLJQ DQG &RQVWUXFWLRQ 6XEFRPPLWWHH RQ
 %XLOGLQJ &RGHV ³5HFRPPHQGHG %XLOGLQJ
 +HVHOGHQ $ - 0 6PLWK 3 * DQG &RGH 5HTXLUHPHQWV IRU 1HZ 'ZHOOLQJ
7KHREDOG & 5 ³)LUHV LQ D /DUJH &RQVWUXFWLRQ ZLWK 6SHFLDO 5HIHUHQFH WR :DU
&RPSDUWPHQW &RQWDLQLQJ 6WUXFWXUDO +RXVLQJ 5HSRUW´ %XLOGLQJ 0DWHULDOV DQG
6WHHOZRUN 'HWDLOHG 0HDVXUHPHQWV RI )LUH 6WUXFWXUHV5HSRUW%061DWLRQDO%XUHDXRI
%HKDYLRU´)LUH 5HVHDUFK 1RWH1R)LUH 6WDQGDUGV:DVKLQJWRQ6HSW
5HVHDUFK6WDWLRQ%RUHKDPZRRG'HF 'H &RSSHW %HUJK ' 6DIH %XLOGLQJ
 0LQLVWU\ RI 7HFKQRORJ\ DQG )LUH 2IILFHV¶ &RQVWUXFWLRQ D 7UHDWLVH *LYLQJ LQ 6LPSOHVW
&RPPLWWHH-RLQW)LUH5HVHDUFK2UJDQL]DWLRQ )RUPV 3RVVLEOH 3UDFWLFDO DQG 7KHRUHWLFDO
³)LUHDQG6WUXFWXUDO8VHRI7LPEHULQ%XLOGLQJV 5XOHV DQG )RUPXODH 8VHG LQ &RQVWUXFWLRQ RI
3URFHHGLQJV RI WKH 6\PSRVLXP +HOG DW WKH %XLOGLQJV DQG *HQHUDO ,QVWUXFWLRQ QHZ HG
)LUH 5HVHDUFK 6WDWLRQ %RUHKDPZRRG +HUWV WKRURXJKO\ UHY 0DFPLOODQ &R 1HZ <RUN


6%&&& 

&+$37(5&²*$%/((1'5(752),7)25+,*+:,1'$5($6

&\FORSHGLDRI)LUH3UHYHQWLRQDQG,QVXUDQFH 6HUYLFH 5HSRUW 1R  0DGLVRQ $SULO

D *HQHUDO 5HIHUHQFH :RUN RQ )LUH DQG )LUH 
/RVVHV )LUHSURRI &RQVWUXFWLRQ %XLOGLQJ )RUHVW3URGXFWV/DERUDWRU\³&KDUULQJ5DWHRI
,QVSHFWLRQ SUHS E\ DUFKLWHFWV HQJLQHHUV 6HOHFWHG :RRGV²7UDQVYHUVH WR *UDLQ´
XQGHUZULWHUV DQG SUDFWLFDO LQVXUDQFH PHQ )RUHVW 6HUYLFH 5HVHDUFK 3DSHU )/3 
$PHULFDQ 6FKRRO RI &RUUHVSRQGHQFH 0DGLVRQ$SULO
&KLFDJR %LUG * , ³3URWHFWLRQ RI 6WUXFWXUDO 6WHHO
6HWFKNLQ 1 3 DQG ,QJEHUJ 6 + ³7HVW $JDLQVW )LUH´ )LUH 1RWH 1R  'HSW RI
&ULWHULRQ IRU DQ ,QFRPEXVWLEOH 0DWHULDO´ 6FLHQWLILF DQG ,QGXVWULDO 5HVHDUFK DQG )LUH
3URFHHGLQJV RI WKH $PHULFDQ 6RFLHW\ IRU 2IILFHV¶ &RPPLWWHH -RLQW )LUH 5HVHDUFK
7HVWLQJ0DWHULDOVYRO3KLODGHOSKLD 2UJDQL]DWLRQ/RQGRQ+062
SS 5RELQVRQ : & 7KH 3DUNHU %XLOGLQJ )LUH
8QGHUZULWHUV¶ /DERUDWRULHV ³5HSRUW RQ )LUH 8QGHUZULWHUV¶/DERUDWRULHV&KLFDJRF
+D]DUG &ODVVLILFDWLRQ RI 9DULRXV 6SHFLHV RI )HUULV - ( ³)LUH +D]DUGV RI &RPEXVWLEOH
/XPEHU´5HWDUGDQW&KLFDJR :DOOERDUGV´ &RPPRQZHDOWK ([SHULPHQWDO
6WHLQJLVHU6³$3KLORVRSK\RI)LUH7HVWLQJ´ %XLOGLQJ 6WDWLRQ 6SHFLDO 5HSRUW 1R 
-RXUQDO RI )LUH  )ODPPDELOLW\ YRO  -XO\ 6\GQH\2FW
SS 0DUNZDUGW/- %UXFH+'DQG)UHDV$
<XLOO&+%DXHUVFKODJ:+DQG6PLWK+ ' ³%ULHI 'HVFULSWLRQ RI 6RPH )LUH7HVW
0 ³$Q (YDOXDWLRQ RI WKH &RPSDUDWLYH 0HWKRGV 8VHG IRU :RRG DQG :RRG %DVH
3HUIRUPDQFH RI  3O\ZRRG DQG 7ZR,QFK 0DWHULDOV´ )RUHVW 6HUYLFH 5HSRUW 1R 
/XPEHU 5RRI 'HFNLQJ XQGHU (TXLYDOHQW )LUH )RUHVW3URGXFWV/DERUDWRU\0DGLVRQ
([SRVXUH´ )LUH 3URWHFWLRQ 6HFWLRQ )LQDO )RVWHU+'3LQNVWRQ(5DQG,QJEHUJ6
5HSRUW 3URMHFW 1R $ 6RXWKZHVW + ³)LUH 5HVLVWDQFH RI :DOOV RI *UDYHO
5HVHDUFK ,QVWLWXWH 'HSW RI 6WUXFWXUDO $JJUHJDWH&RQFUHWH0DVRQU\8QLWV´ %XLOGLQJ
5HVHDUFK6DQ$QWRQLR'HF 0DWHULDOV DQG 6WUXFWXUHV 5HSRUW %06 
$VKWRQ/$DQG6PDUW3076SRQVRUHG 1DWLRQDO %XUHDX RI 6WDQGDUGV :DVKLQJWRQ
)LUH5HVLVWDQFH7HVWVRQ6WUXFWXUDO(OHPHQWV 0DUFK
/RQGRQ 'HSW RI 6FLHQWLILF DQG ,QGXVWULDO )RVWHU+'3LQNVWRQ(5DQG,QJEHUJ6
5HVHDUFK DQG )LUH 2IILFHV &RPPLWWHH + ³)LUH 5HVLVWDQFH RI :DOOV RI /LJKWZHLJKW
/RQGRQ $JJUHJDWH&RQFUHWH0DVRQU\8QLWV´ %XLOGLQJ
%XWFKHU(*&KLWW\7%DQG$VKWRQ/$ 0DWHULDOV DQG 6WUXFWXUHV 5HSRUW %06 
³7KH7HPSHUDWXUH$WWDLQHGE\6WHHOLQ%XLOGLQJ 1DWLRQDO %XUHDX RI 6WDQGDUGV :DVKLQJWRQ
)LUHV´)LUH5HVHDUFK7HFKQLFDO3DSHU1R 0D\
0LQLVWU\ RI 7HFKQRORJ\ DQG )LUH 2IILFHV 6WUXFWXUDO &OD\ 3URGXFWV ,QVWLWXWH ³6WUXFWXUDO
&RPPLWWHH-RLQW)LUH5HVHDUFK2UJDQL]DWLRQ &OD\ 7LOH )LUHSURRILQJ´ 7HFKQLFDO 1RWHV RQ
/RQGRQ+062 %ULFN  7LOH &RQVWUXFWLRQ YRO  QR  6DQ
'HSW RI WKH (QYLURQPHQW DQG )LUH 2IILFHV¶ )UDQFLVFR1RY
&RPPLWWHH-RLQW)LUH5HVHDUFK2UJDQL]DWLRQ 6WUXFWXUDO &OD\ 3URGXFWV ,QVWLWXWH ³)LUH
³)LUH5HVLVWDQFH 5HTXLUHPHQWV IRU 5HVLVWDQFH 5DWLQJV RI &OD\ 0DVRQU\ :DOOV²
%XLOGLQJV²D 1HZ $SSURDFK 3URFHHGLQJV RI ,´ 7HFKQLFDO 1RWHV RQ %ULFN  7LOH
WKH 6\PSRVLXP +HOG DW WKH &RQQDXJKW &RQVWUXFWLRQ YRO  QR  6DQ )UDQFLVFR
5RRPV /RQGRQ  6HSWHPEHU ´ 'HF
6\PSRVLXP1R/RQGRQ+062 6WUXFWXUDO&OD\3URGXFWV,QVWLWXWH³(VWLPDWLQJ
/DQJGRQ7KRPDV*-³5RRIVDQG)LUH´)LUH WKH)LUH 5HVLVWDQFHRI&OD\0DVRQU\:DOOV²
1RWH 1R  'HSW RI 6FLHQWLILF DQG ,QGXVWULDO ,,´ 7HFKQLFDO 1RWHV RQ %ULFN  7LOH
5HVHDUFK DQG )LUH 2IILFHV¶ &RPPLWWHH -RLQW &RQVWUXFWLRQYROQR6DQ)UDQFLVFR-DQ
)LUH 5HVHDUFK 2UJDQL]DWLRQ /RQGRQ +062 
 %XLOGLQJ5HVHDUFK6WDWLRQ³)LUH0DWHULDOVDQG
1DWLRQDO )LUH 3URWHFWLRQ $VVRFLDWLRQ DQG WKH 6WUXFWXUHV´'LJHVW1R/RQGRQ+062
1DWLRQDO%RDUGRI)LUH8QGHUZULWHUV5HSRUWRQ 
)LUH WKH (GLVRQ 3KRQRJUDSK :RUNV 7KRPDV 0LWFKHOO 1 ' ³)LUH +D]DUG 7HVWV ZLWK
$(GLVRQ,QF:HVW2UDQJH1-'HFHPEHU 0DVRQU\ &KLPQH\V´ 1)3$ 3XEOLFDWLRQ 1R
%RVWRQ 4%RVWRQ2FW
7KRPSVRQ - 3 )LUH 5HVLVWDQFH RI &OLQWRQ:LUH&ORWK&RPSDQ\6RPH7HVW'DWD
5HLQIRUFHG&RQFUHWH)ORRUV3RUWODQG&HPHQW RQ )LUHSURRI )ORRU &RQVWUXFWLRQ 5HODWLQJ WR
$VVRFLDWLRQ&KLFDJR &LQGHU &RQFUHWH 7HUUD &RWWD DQG *\SVXP
)RUHVW 3URGXFWV /DERUDWRU\ ³)LUH 5HVLVWDQFH &OLQWRQ
7HVWV RI 3O\ZRRG &RYHUHG :DOO 3DQHOV´ 6WUXFWXUDO (QJLQHHUV $VVRFLDWLRQ RI 6RXWKHUQ
,QIRUPDWLRQ UHYLHZHG DQG UHDIILUPHG )RUHVW &DOLIRUQLD )LUH 5DWLQJV 6XEFRPPLWWHH ³)LUH

6%&&& 

&+$37(5&²*$%/((1'5(752),7)25+,*+:,1'$5($6

5DWLQJVD5HSRUW´SDUWRI$QQXDO5HSRUW/RV XQGHU 9DU\LQJ &RQGLWLRQV RI )LUH 6HYHULW\´

$QJHOHVSS 5HSRUW&KLFDJR
/DZVRQ',)R[//DQG:HEVWHU&7 ,QWHUQDWLRQDO&RQIHUHQFH RI%XLOGLQJ2IILFLDOV
³7KH +HDWLQJ RI 3DQHOV E\ )OXH 3LSHV´ )LUH 8QLIRUP %XLOGLQJ &RGH  HG :KLWWLHU
5HVHDUFK 6SHFLDO 5HSRUW 1R  'HSW RI &$
6FLHQWLILF DQG ,QGXVWULDO 5HVHDUFK DQG )LUH %DEUDXVNDV 9 DQG :LOOLDPVRQ 5 % ³7KH
2IILFHV¶&RPPLWWHH/RQGRQ+062 +LVWRULFDO %DVLV RI )LUH 5HVLVWDQFH 7HVWLQJ
)RUHVW 3URGXFWV /DERUDWRU\ ³)LUH 5HVLVWDQFH 3DUW,DQG3DUW,,´)LUH7HFKQRORJ\YROQR
RI :RRG &RQVWUXFWLRQ´ ([FHUSW IURP µ:RRG    $XJ  1RY  SS  
+DQGERRN²%DVLF ,QIRUPDWLRQ RQ :RRG DV D 
0DWHULDORI&RQVWUXFWLRQZLWK'DWDIRULWV8VH 8QGHUZULWHUV¶ /DERUDWRULHV ³)LUH 7HVWV RI
LQ 'HVLJQ DQG 6SHFLILFDWLRQ¶ 'HSW RI %XLOGLQJ&RQVWUXFWLRQDQG0DWHULDOV´WKHG
$JULFXOWXUH +DQGERRN 1R  :DVKLQJWRQ 6WDQGDUGIRU6DIHW\8/&KLFDJR
SS +ROG + * )LUH 3URWHFWLRQ LQ %XLOGLQJV
*RDOZLQ ' 6 ³3URSHUWLHV RI &DYLW\ :DOOV´ &URVE\/RFNZRRG/RQGRQ
%XLOGLQJ0DWHULDOVDQG6WUXFWXUHV5HSRUW%06 .ROOEUXQQHU & ) ³6WHHO %XLOGLQJV DQG )LUH
 1DWLRQDO %XUHDX RI 6WDQGDUGV 3URWHFWLRQLQ(XURSH´-RXUQDORIWKH6WUXFWXUDO
:DVKLQJWRQ0D\ 'LYLVLRQ$6&(YROQR673URF3DSHU
+XPSKUH\ 5 / ³7KH )LUH5HVLVWLYH 1RYSS
3URSHUWLHV RI 9DULRXV %XLOGLQJ 0DWHULDOV´ 6PLWK 3 ³,QYHVWLJDWLRQ DQG 5HSDLU RI
*HRORJLFDO 6XUYH\%XOOHWLQ :DVKLQJWRQ 'DPDJH WR &RQFUHWH &DXVHG E\ )RUPZRUN
 DQG)DOVHZRUN)LUH´-RXUQDORIWKH$PHULFDQ
1DWLRQDO /XPEHU 0DQXIDFWXUHUV $VVRFLDWLRQ &RQFUHWH ,QVWLWXWH YRO  7LWOH QR 
³&RPSDUDWLYH )LUH 7HVW RQ :RRG DQG 6WHHO 1RYSS
-RLVWV´7HFKQLFDO5HSRUW1R:DVKLQJWRQ ³5HSDLU RI )LUH 'DPDJH´  SDUWV &RQFUHWH
 &RQVWUXFWLRQ0DUFK0D\
1DWLRQDO /XPEHU 0DQXIDFWXUHUV $VVRFLDWLRQ 1DWLRQDO)LUH3URWHFWLRQ$VVRFLDWLRQ 1DWLRQDO
³&RPSDUDWLYH )LUH 7HVW RI 7LPEHU DQG 6WHHO )LUH &RGHV D &RPSLODWLRQ RI 1)3$ &RGHV
%HDPV´7HFKQLFDO5HSRUW1R:DVKLQJWRQ 6WDQGDUGV 5HFRPPHQGHG 3UDFWLFHV DQG
 0DQXDOVYROV%RVWRQ
0DOKRWUD + / DQG 0RUULV : $ ³7HVWV RQ ,QJEHUJ 6 + ³7HVWV RI 6HYHULW\ RI %XLOGLQJ
5RRI&RQVWUXFWLRQ6XEMHFWHGWR([WHUQDO)LUH´ )LUHV´ 1)3$ 4XDUWHUO\ YRO  QR  -XO\
)LUH 1RWH 1R  'HSW RI 6FLHQWLILF DQG SS
,QGXVWULDO 5HVHDUFK DQG )LUH 2IILFHV¶ 8QGHUZULWHUV¶ /DERUDWRULHV ³)LUH ([SRVXUH
&RPPLWWHH-RLQW)LUH5HVHDUFK2UJDQL]DWLRQ 7HVWV RI 2UGLQDU\ :RRG 'RRUV´ %XOOHWLQ RI
/RQGRQ+062 5HVHDUFKQR'HF&KLFDJR
%URZQ & 5 ³)LUH 7HVWV RI 7UHDWHG DQG 3DUVRQ + ³7KH 7DOO %XLOGLQJ XQGHU 7HVW RI
8QWUHDWHG:RRG3DUWLWLRQV´5HVHDUFK3DSHU )LUH´5HG%RRNQR%ULWLVK)LUH3UHYHQWLRQ
53  SDUW RI -RXUQDO RI 5HVHDUFK RI WKH &RPPLWWHH/RQGRQ
1DWLRQDO %XUHDX RI 6WDQGDUGV YRO  6DFKV ( 2 ³7KH %ULWLVK )LUH 3UHYHQWLRQ
:DVKLQJWRQ)HESS &RPPLWWHH7HVWLQJ6WDWLRQ´5HG%RRNQR
8QGHUZULWHUV¶ /DERUDWRULHV ³5HSRUW RQ %ULWLVK )LUH 3UHYHQWLRQ &RPPLWWHH /RQGRQ
,QYHVWLJDWLRQRI)LUH5HVLVWDQFHRI:RRG/DWK 
DQG/LPH3ODVWHU,QWHULRU)LQLVK´ 3XEOLFDWLRQ 6DFKV ( 2 ³)LUH 7HVWV ZLWK 8QSURWHFWHG
63&KLFDJR1RY &ROXPQV´ 5HG %RRN QR  %ULWLVK )LUH
8QGHUZULWHUV¶/DERUDWRULHV³5HSRUWRQ,QWHULRU 3UHYHQWLRQ&RPPLWWHH/RQGRQ
%XLOGLQJ&RQVWUXFWLRQ&RQVLVWLQJRI0HWDO/DWK %ULWLVK)LUH3UHYHQWLRQ&RPPLWWHH³)LUH7HVWV
DQG *\SVXP 3ODVWHU RQ :RRG 6XSSRUWV´ ZLWK )ORRUV D )ORRU E\ WKH ([SHQGHG 0HWDO
5HWDUGDQW1R&KLFDJR &RPSDQ\´5HG%RRNQR/RQGRQ
8QGHUZULWHUV¶ /DERUDWRULHV ³$Q ,QYHVWLJDWLRQ (QJLQHHULQJ1HZVYRO$XJSS
RI WKH (IIHFWV RI )LUH ([SRVXUH XSRQ +ROORZ 
&RQFUHWH%XLOGLQJ8QLWV´5HWDUGDQW1R (QJLQHHULQJ1HZVYRO$XJSS
&KLFDJR0D\ 
0RUDQ 7 + ³&RPSDUDWLYH )LUH 5HVLVWDQFH %DXVFKLQJHU-0LWWKHLOXQJHQGH0HFK7HFK
5DWLQJVRI'RXJODV)LU3O\ZRRG´'RXJODV)LU /DE GHU . 7HFK +RFKVFKXOH 0FKHQ YRO
3O\ZRRG $VVRFLDWLRQ /DERUDWRU\ %XOOHWLQ  
$7DFRPD (QJLQHHULQJ1HZVYRO'HFSS
*DJH %DEFRFN  $VVRFLDWLRQ ³7KH 
3HUIRUPDQFH RI )LUH3URWHFWLYH 0DWHULDOV 7KH $PHULFDQ $UFKLWHFW DQG %XLOGLQJ 1HZV
YRO0DUFKSS

6%&&& 

&+$37(5&²*$%/((1'5(752),7)25+,*+:,1'$5($6

%ULWLVK )LUH 3UHYHQWLRQ &RPPLWWHH )LUVW 6HSW SS 6HSW  
,QWHUQDWLRQDO )LUH 3UHYHQWLRQ &RQJUHVV SS2FWSS2FW
2IILFLDO&RQJUHVV5HSRUW/RQGRQ SS
$PHULFDQ 6RFLHW\ IRU 7HVWLQJ 0DWHULDOV %DEUDXVNDV 9\WHQLV ³)LUH (QGXUDQFH LQ
6WDQGDUG 6SHFLILFDWLRQV IRU )LUH 7HVWV RI %XLOGLQJV´3K'7KHVLV)LUH5HVHDUFK*URXS
0DWHULDOV DQG &RQVWUXFWLRQ & 5HSRUW 1R 8&% )5*  8QLYHUVLW\ RI
3KLODGHOSKLD &DOLIRUQLD%HUNHOH\1RY
,QWHUQDWLRQDO2UJDQL]DWLRQIRU6WDQGDUGL]DWLRQ 7KH,QVWLWXWLRQRI6WUXFWXUDO(QJLQHHUVDQG7KH
)LUH5HVLVWDQFH7HVWVRQ(OHPHQWVRI%XLOGLQJ &RQFUHWH6RFLHW\)LUH5HVLVWDQFHRI&RQFUHWH
&RQVWUXFWLRQ5/RQGRQ 6WUXFWXUHV/RQGRQ$XJ
(QJLQHHULQJ5HFRUGYRO-DQSS
 0D\   SS  YRO 

6%&&&