Case 1:18-cv-00095-LAK Document 1 Filed 01/05/18 Page 1 of 13

81,7('67$7(6',675,&7&2857  
)257+(6287+(51',675,&72)1(:<25.
 
.(85,**5((102817$,1,1&
D'HODZDUHFRUSRUDWLRQ

3ODLQWLII

Y 1RFY

*/2%$/%$5,67$686//&  
D:DVKLQJWRQOLPLWHGOLDELOLW\FRUSRUDWLRQDQG
*/2%$/%$5,67$6//&
D:DVKLQJWRQOLPLWHGOLDELOLW\FRUSRUDWLRQ

'HIHQGDQWV



&203/$,17)25,1-81&7,9(5(/,()$1''$0$*(6


 )RU LWV &RPSODLQW DJDLQVW 'HIHQGDQWV *OREDO %DULVWDV //& DQG *OREDO %DULVWDV 86

//& WRJHWKHU ³*OREDO %DULVWDV´ 3ODLQWLII .HXULJ *UHHQ 0RXQWDLQ ,QF ³.HXULJ´ VWDWHV

DVIROORZV

 .HXULJ EULQJV WKLV DFWLRQ DJDLQVW LWV OLFHQVHH *OREDO %DULVWDV²ZKLFK RSHUDWHV

UHWDLOFRIIHHORFDWLRQVDQGVHOOVOLFHQVHGSURGXFWXQGHU.HXULJ¶V78//<¶6EUDQG²IRULQMXQFWLYH

UHOLHI DQG GDPDJHV UHVXOWLQJ IURP *OREDO %DULVWDV¶ EUHDFK RI WKH SDUWLHV¶ 7UDGHPDUN /LFHQVH

$JUHHPHQWYLRODWLRQRIWKH)HGHUDO/DQKDP$FWDQGYLRODWLRQRIUHODWHGVWDWHDQGFRPPRQODZ

FODLPVWKDWDULVHRXWRIWKHVDPHRSHUDWLYHIDFWV

7+(3$57,(6

 .HXULJLVDQLQGXVWU\OHDGHULQVSHFLDOW\FRIIHHDQGFRIIHHEUHZHUVUHFRJQL]HGIRU

LWV DZDUGZLQQLQJ FRIIHHV DQG LQQRYDWLYH EUHZLQJ WHFKQRORJ\  .HXULJ PDUNHWV LWV .(85,*Š

EUHZHUV DQG LWV .&83Š SRGV XVHG ZLWK LWV EUHZHUV WKURXJK GLVWULEXWRUV UHWDLO DQG GLUHFW
 Case 1:18-cv-00095-LAK Document 1 Filed 01/05/18 Page 2 of 13

FKDQQHOV IRU XVH LQ RIILFHV KRPHV DQG KRWHO URRPV LQ 1RUWK $PHULFD  ,WV .&83Š SRGV DUH

SURGXFHGXQGHUDYDULHW\RIEUDQGVLQFOXGLQJWKRVHRZQHGE\.HXULJDQGE\WKLUGSDUWLHV

 .HXULJ LV D 'HODZDUH FRUSRUDWLRQ ZLWK LWV SULQFLSDO SODFH RI EXVLQHVV ORFDWHG DW

&RIIHH/DQH:DWHUEXU\9HUPRQW

 'HIHQGDQWV *OREDO %DULVWDV //& DQG *OREDO %DULVWDV 86 //& DUH HDFK

:DVKLQJWRQ OLPLWHG OLDELOLW\ FRUSRUDWLRQV ZLWK WKHLU KHDG RIILFHV ORFDWHG DW  :HVWHUQ

$YHQXH6XLWH6HDWWOH:DVKLQJWRQ8SRQLQIRUPDWLRQDQGEHOLHI'HIHQGDQW*OREDO

%DULVWDV//&PDQDJHV'HIHQGDQW*OREDO%DULVWDV86//&

-85,6',&7,21$1'9(18(

 7KLVFRXUWKDVVXEMHFWPDWWHUMXULVGLFWLRQSXUVXDQWWR86&†86&

†86&†86&†DQG86&†

 7KLV FRXUW KDV SHUVRQDOMXULVGLFWLRQEHFDXVHWKHSDUWLHVFRQVHQWHG WR MXULVGLFWLRQ

LQWKLV&RXUWSXUVXDQWWRWKHSDUWLHV¶7UDGHPDUN/LFHQVH$JUHHPHQW

 9HQXHLVSURSHULQWKLV'LVWULFWEHFDXVHWKHSDUWLHVSURVSHFWLYHO\DJUHHGWKDWDQ\

GLVSXWHV XQGHU WKH SDUWLHV¶ 7UDGHPDUN /LFHQVH $JUHHPHQW VKDOO EH YHQXHG LQ DQ\ FRXUW LQ

1HZ<RUN

)$&78$/%$&.*5281'

 2Q -XO\   .HXULJ DQG *OREDO %DULVWDV HQWHUHG LQWR D WUDGHPDUN OLFHQVH

DJUHHPHQWKHUHDIWHUWKH³7UDGHPDUN/LFHQVH$JUHHPHQW´DWUXHDQGFRUUHFWFRS\RIZKLFKLV

DWWDFKHGKHUHWRDV([KLELW$

7+(75$'(0$5./,&(16($*5((0(17

 $VVHWIRUWKRQWKH([KLELWVWRWKH7UDGHPDUN/LFHQVH$JUHHPHQW.HXULJ

 
 Case 1:18-cv-00095-LAK Document 1 Filed 01/05/18 Page 3 of 13

RZQVDSSUR[LPDWHO\DSSOLFDWLRQVDQGUHJLVWUDWLRQVZRUOGZLGHIRUPDUNV

LQFRUSRUDWLQJWKHZRUG78//<¶6KHUHDIWHU³WKH78//<¶60DUNV´DQG

PDQ\RIWKRVHPDUNVLQWKH8QLWHG6WDWHVDUHLQFRQWHVWDEO\UHJLVWHUHGVXFK

DVWKHRQHWRWKHULJKW


 ,QDGGLWLRQ.HXULJDOVRRZQVWKHEXVLQHVVQDPHV7XOO\¶V7XOO\¶V5RDVWHURI)LQH

&RIIHHDQG%HOODFFLQRWRJHWKHUZLWKWKH78//<¶60DUNVWKH³/LFHQVHG0DUNV´

 .HXULJ XVHV WKH 78//<¶V 0DUNV IRU FRIIHH

VROGLQ.&83ŠSRGVXVDEOHLQ.(85,*ŠFRIIHHEUHZHUVDQG

RQSDFNDJHVIRUWKHSRGVVXFKDVWKRVHVKRZQWRWKHULJKW

 .HXULJDOVRXVHVWKH78//<¶V0DUNVIRUFRIIHHVROGE\IRRGVHUYLFHSURYLGHUV

VXFKDVFDIHWHULDVDQGEDJJHGFRIIHHVROGLQJURFHU\VWRUHV

 8QGHU WKH 7UDGHPDUN /LFHQVH $JUHHPHQW DQG DV VHW IRUWK PRUH IXOO\ WKHUHLQ

.HXULJ JUDQWHG *OREDO %DULVWDV DQ H[FOXVLYH QRQWUDQVIHUDEOH H[FHSW DV SURYLGHG LQ WKH

7UDGHPDUN /LFHQVH $JUHHPHQW OLFHQVH WR ODVW IRU DQ LQLWLDO WHUP RI WHQ  \HDUV WR XVH WKH

/LFHQVHG 0DUNV WR VHOO 78//<¶6 FRIIHH GHILQHG DV ³/LFHQVHG 3URGXFWV´ LQ WKH 7UDGHPDUN

/LFHQVH$JUHHPHQWDW/LFHQVHG5HWDLO6WRUHVDVGHILQHGLQWKH7UDGHPDUN/LFHQVH$JUHHPHQW

DVZHOODVUHODWHGPHUFKDQGLVHEHDULQJWKH/LFHQVHG0DUNVKDWVWHHVKLUWVDQGWKHOLNHDQGWR

PDLQWDLQ D ZHEVLWH ZZZWXOO\VFRIIHHVKRSVFRP KHUHDIWHU WKH ³:HEVLWH´ IRU WKH SXUSRVH

DPRQJRWKHUVRISURYLGLQJLQIRUPDWLRQWRFRQVXPHUV%\WKHWHUPVRIWKH7UDGHPDUN/LFHQVH

 
 Case 1:18-cv-00095-LAK Document 1 Filed 01/05/18 Page 4 of 13

$JUHHPHQW*OREDO%DULVWDVFRXOGXVHWKH/LFHQVHG0DUNVRQRULQFRQQHFWLRQZLWKWKH/LFHQVHG

3URGXFWVRQO\DVSURYLGHGIRULQWKH/LFHQVH$JUHHPHQW

 7KH7UDGHPDUN/LFHQVH$JUHHPHQWSURYLGHVWKDW.HXULJVKRXOGUHFHLYHDFRS\RI

DQ\VXEOLFHQVHVJUDQWHGE\*OREDO%DULVWDV

 )XUWKHU *OREDO %DULVWDV PD\ QRW DVVLJQ RU GHOHJDWH DQ\ REOLJDWLRQV XQGHU WKH

7UDGHPDUN/LFHQVH$JUHHPHQWZLWKRXW.HXULJ¶VDSSURYDO

 8QGHUWKH7UDGHPDUN/LFHQVH$JUHHPHQW*OREDO%DULVWDVLVSHUPLWWHGWRVRXUFH

WKH/LFHQVHG3URGXFWVWKURXJKVXSSOLHUVRWKHUWKDQ.HXULJ³6HFRQGDU\9HQGRUV´ZLWKWKHSUH

DSSURYDORI.HXULJDQGVXEMHFWWR.HXULJ¶VTXDOLW\DQGVHUYLFHVWDQGDUGV

 7KH 7UDGHPDUN /LFHQVH$JUHHPHQW SURYLGHV WKDW IRU /LFHQVHG 3URGXFWV VRXUFHG

IURPD6HFRQGDU\9HQGRU*OREDO%DULVWDVVKDOOSD\.HXULJDUR\DOW\IHHHTXDOWRSHU

\HDUWKH³5R\DOW\)HH´VWDUWLQJZLWKWKHFDOHQGDU\HDUEHJLQQLQJRQ-DQXDU\

 8QGHUWKH7UDGHPDUN/LFHQVH$JUHHPHQW.HXULJUHWDLQHGFRQWURORYHUWKHXVHDQG

SURPRWLRQ RI WKH 78//<¶6 0DUNV  )RU H[DPSOH WKH /LFHQVH $JUHHPHQW SURYLGHV WKDW WKH

³SDUWLHV DFNQRZOHGJH DQG DJUHH WKDW .HXULJ VKDOO KDYH WKH DEVROXWH ULJKW WR DSSURYH >*OREDO

%DULVWDV¶@XVHRIDQGPDQQHURIXVHRIWKH/LFHQVHG0DUNVLQDQ\3URPRWLRQDODQG$GYHUWLVLQJ

0DWHULDO´7UDGHPDUN/LFHQVH$JUHHPHQWˆD

 ³3URPRWLRQDO DQG $GYHUWLVLQJ 0DWHULDO´ LV GHILQHG LQ WKH 7UDGHPDUN /LFHQVH

$JUHHPHQW WR PHDQ ODEHOV SDFNDJLQJ DGYHUWLVLQJ EURFKXUHV FDWDORJXHV DQG RWKHU ZULWWHQ RU

JUDSKLF PDWHULDO DOO DGYHUWLVLQJ LQFOXGLQJ WHOHYLVLRQ UDGLR QHZVSDSHU DQG RWKHU PHGLD

DGYHUWLVLQJ VLJQDJH VWDWLRQDU\ VWRUH DQG SRLQWRIVDOH GLVSOD\V DQG DOO RWKHU PDWHULDOV XSRQ

ZKLFKDQ\RIWKH/LFHQVHG0DUNVDUHSODFHG

 
 Case 1:18-cv-00095-LAK Document 1 Filed 01/05/18 Page 5 of 13

 3DUDJUDSK  RI WKH 7UDGHPDUN /LFHQVH $JUHHPHQW UHTXLUHV *OREDO %DULVWDV WR

VXEPLWWR.HXULJDQGREWDLQDSSURYDOIRUXVHRIDOO3URPRWLRQDODQG$GYHUWLVLQJ0DWHULDOXVHG

E\*OREDO%DULVWDVEHDULQJWKH/LFHQVHG0DUNVLQFOXGLQJPRGLILFDWLRQVRISUHYLRXVO\DSSURYHG

3URPRWLRQDODQG$GYHUWLVLQJ0DWHULDO

 $GGLWLRQDOO\ WKH 7UDGHPDUN /LFHQVH $JUHHPHQW VWDWHV WKDW *OREDO %DULVWDV VKDOO

QRWDOWHUWKH/LFHQVHG0DUNVGHYHORSGHULYDWLYHVRUQHZYDULDWLRQVRIWKH/LFHQVHG0DUNVRU

FRPELQH WKH /LFHQVHG 0DUNV ZLWK RWKHU PDUNV GHVLJQV QDPHV VW\OHV ZRUGV RU EUDQGLQJ

ZLWKRXWWKHSULRUZULWWHQFRQVHQWRI.HXULJ

 7KH7UDGHPDUN/LFHQVH$JUHHPHQWDOORZV.HXULJWRFRQGXFWLQVSHFWLRQVDQGDXGLW

*OREDO%DULVWDV¶DFWLYLWLHVXQGHUWKH$JUHHPHQW

 )LQDOO\WKH7UDGHPDUN/LFHQVH$JUHHPHQWSURYLGHVWKDWLI*OREDO%DULVWDVIDLOVWR

PDLQWDLQDWOHDVWWZHQW\%HQFKPDUN6WRUHVLHVWDQGDORQH/LFHQVHG5HWDLO6WRUHVLQ1RUWK

$PHULFD *OREDO%DULVWDV¶H[FOXVLYHOLFHQVHULJKWVVKDOOUHYHUWWRQRQH[FOXVLYHULJKWVLQ1RUWK

$PHULFD  )XUWKHU LI *OREDO %DULVWDV IDLOV WR PDLQWDLQ DW OHDVW WHQ  %HQFKPDUN 6WRUHV LQ

1RUWK$PHULFD.HXULJKDVWKHULJKWWRWHUPLQDWHWKH7UDGHPDUN/LFHQVH$JUHHPHQW

 7KH7UDGHPDUN/LFHQVH$JUHHPHQWPD\EHWHUPLQDWHGE\HLWKHUSDUW\XSRQZULWWHQ

QRWLFHWRWKHRWKHUSDUW\LQWKHHYHQWRIDQ\EUHDFKRIDPDWHULDOREOLJDWLRQXQGHUWKH$JUHHPHQW

ZKLFKWKHUHFHLYLQJSDUW\IDLOVWRFXUHZLWKLQWKLUW\GD\VDIWHUUHFHLYLQJVXFKQRWLFH

 7KH 7UDGHPDUN /LFHQVH $JUHHPHQW UHTXLUHV WKDW LPPHGLDWHO\ XSRQ WHUPLQDWLRQ

*OREDO %DULVWDV PXVW FHDVH DOO VDOH RI DQ\ /LFHQVHG 3URGXFWV DQG XVH RI WKH 3URPRWLRQDO DQG

$GYHUWLVLQJ 0DWHULDO H[FHSW IRU OLPLWHG GHILQHG XVHV  7KH SDUWLHV DJUHHG WKDW LUUHSDUDEOH

GDPDJHZRXOGRFFXULIWKH7UDGHPDUN/LFHQVH$JUHHPHQWZHUHEUHDFKHG

 
 Case 1:18-cv-00095-LAK Document 1 Filed 01/05/18 Page 6 of 13

*/2%$/%$5,67$6¶:521*)8/$&7,216

 $V GHVFULEHG LQ WKH IROORZLQJ SDUDJUDSKV *OREDO %DULVWDV KDV EUHDFKHG WKH

7UDGHPDUN/LFHQVH$JUHHPHQW

 7KH 7UDGHPDUN /LFHQVH $JUHHPHQW SURYLGHV IRU SD\PHQW RI DQ DQQXDO 5R\DOW\

)HHRI.HXULJLQYRLFHG*OREDO%DULVWDVRQ1RYHPEHUIRUWKH5R\DOW\

)HH  7KDW LQYRLFH UHPDLQV XQSDLG DQG RXWVWDQGLQJ  .HXULJ LQYRLFHG *OREDO %DULVWDV RQ

)HEUXDU\IRUWKH5R\DOW\)HH7KDWLQYRLFHDOVRUHPDLQVXQSDLGDQGRXWVWDQGLQJ

 2Q 2FWREHU   YLD )HGHUDO ([SUHVV .HXULJ VHQW *OREDO %DULVWDV D IRUPDO

QRWLFHRIEUHDFKDQGGHPDQGIRUSD\PHQWWKH³1RWLFH/HWWHU´$WUXHDQGFRUUHFWFRS\RIWKH

1RWLFH /HWWHU DQG WKH UHOHYDQW LQYRLFHV DUH DWWDFKHG DV ([KLELW %  7KH 1RWLFH /HWWHU ZDV

GHOLYHUHG RQ2FWREHU*OREDO%DULVWDV¶GHIDXOWZDVQRWFXUHGZLWKLQWKLUW\GD\V

DIWHULWVUHFHLSWRIWKHOHWWHUDQGKDV\HWWREHFXUHG$VDUHVXOWRI*OREDO%DULVWDVIDLOXUHWRFXUH

LWV EUHDFK ZLWKLQ WKLUW\  GD\V DIWHU UHFHLSW RI WKH 1RWLFH /HWWHU WKH 7UDGHPDUN /LFHQVH

$JUHHPHQWWHUPLQDWHGRILWVRZQWHUPVRQ'HFHPEHU

 8SRQ WHUPLQDWLRQ RI WKH 7UDGHPDUN /LFHQVH $JUHHPHQW 3DUDJUDSK &

SURYLGHV WKDW *OREDO %DULVWDV VKDOO LPPHGLDWHO\ L FHDVH WKH VDOH RI DQ\ /LFHQVHG 3URGXFW

OLFHQVHGXQGHUWKH$JUHHPHQWRWKHUWKDQLQWKHRUGLQDU\FRXUVHRIEXVLQHVVGXULQJDSHULRGQRW

WRH[FHHGGD\VIURPWKHGDWHRIWHUPLQDWLRQWKH³:LQGGRZQSHULRG´DQGLLFHDVHXVHRI

DOOSURPRWLRQDODQGDGYHUWLVLQJPDWHULDOVWKDWDUHLQ*OREDO%DULVWDV¶SRVVHVVLRQRUFRQWURORWKHU

WKDQODEHOVFRQWDLQHUVDQGSDFNLQJ7KH:LQGGRZQSHULRGH[SLUHVRQ0DUFK

 )XUWKHUPRUHDVLVH[SUHVVO\SHUPLWWHGXQGHUWKH7UDGHPDUN/LFHQVH$JUHHPHQW

LQ  .HXULJ SHUIRUPHG DQ DXGLW RI *OREDO %DULVWDV¶ RSHUDWLRQV  ,Q WKH DXGLW .HXULJ

 
 Case 1:18-cv-00095-LAK Document 1 Filed 01/05/18 Page 7 of 13

GLVFRYHUHGWKDW*OREDO%DULVWDVZDVDFWLYHO\HQJDJHGLQFRQGXFWLQYLRODWLRQRIWKH7UDGHPDUN

/LFHQVH$JUHHPHQWLQWKHIROORZLQJZD\V,QVWHDGRIXVLQJ

WKH DXWKRUL]HG 78//<¶V ORJR VKRZQ

DERYH *OREDO %DULVWDV LV XVLQJ

XQDXWKRUL]HG ORJRV VXFK DV WKDW VKRZQ WR

WKHULJKWRQVWRUHV 

 0RUHRYHU *OREDO %DULVWDV LV XVLQJ 

XQDXWKRUL]HG ORJRV RQ 3URPRWLRQDO DQG $GYHUWLVLQJ

0DWHULDOVXFKDVWKDWVKRZQWRWKHULJKW

 *OREDO %DULVWDV EHJDQ WKLV XQDXWKRUL]HG XVH ZLWKRXW QRWLI\LQJ RU FRQVXOWLQJ

.HXULJ DV UHTXLUHG XQGHU WKH 7UDGHPDUN /LFHQVH $JUHHPHQW  *OREDO %DULVWDV¶ XVH RI

XQDXWKRUL]HG ORJRV YLRODWHV WKH WHUPV RI WKH 7UDGHPDUN /LFHQVH $JUHHPHQW DQG FRQVWLWXWHV D

EUHDFKRIWKH7UDGHPDUN/LFHQVH$JUHHPHQWDQGWKH/DQKDP$FW

 ,Q DGGLWLRQ WKH 7UDGHPDUN /LFHQVH $JUHHPHQW UHTXLUHV *OREDO %DULVWDV WR

³SURPLQHQWO\ GLVSOD\ DW HDFK /LFHQVHG 5HWDLO 6WRUH D VLJQ VWDWLQJ WKDW L /LFHQVHH RU LWV

VXEOLFHQVHHV LV DQ LQGHSHQGHQW RZQHU RI VXFK /LFHQVHG 5HWDLO 6WRUH RSHUDWLQJ WKH /LFHQVHG

5HWDLO6WRUHXQGHUDOLFHQVHIURP.HXULJLL/LFHQVHHRULWVVXEOLFHQVHHVLVQRWDIILOLDWHGZLWK

.HXULJLQDQ\RWKHUPDQQHUDQGLLL.HXULJKDVQRLQWHUHVWLQWKH/LFHQVHG5HWDLO6WRUH´7KH

DXGLWUHYHDOHGWKDW*OREDO%DULVWDVZDVQRWGLVSOD\LQJWKLVUHTXLUHGVLJQLQDQ\DXGLWHGORFDWLRQ

LQEUHDFKRIWKH7UDGHPDUN/LFHQVH$JUHHPHQW

 7KH 2FWREHU   1RWLFH /HWWHU LGHQWLILHG WKH IROORZLQJ EUHDFKHV RI WKH

7UDGHPDUN/LFHQVH$JUHHPHQWL*OREDO%DULVWDV¶IDLOXUHWRSD\WKH5R\DOW\)HHVIRUDQG

 
 Case 1:18-cv-00095-LAK Document 1 Filed 01/05/18 Page 8 of 13

 DQG LL *OREDO %DULVWDV¶ QRQFRQIRUPLQJ EUDQG SURPRWLRQDO DQG PDUNHWLQJ XVHV  7KH

1RWLFH /HWWHU DOVR UHTXHVWHG FRQILUPDWLRQ RI *OREDO %DULVWDV¶ SHUIRUPDQFH RI LWV REOLJDWLRQV

XQGHUWKH7UDGHPDUN/LFHQVH$JUHHPHQWLQFOXGLQJLQIRUPLQJ.HXULJRIDQ\VXEOLFHQVHVJUDQWHG

E\ *OREDO %DULVWDV DQ\ DGGLWLRQDO 6HFRQGDU\ 9HQGRUV DQG DQ\ DVVLJQPHQWV RU GHOHJDWLRQV RI

REOLJDWLRQVXQGHUWKH7UDGHPDUN/LFHQVH$JUHHPHQWDVZHOODVFRQILUPDWLRQRIWKHQXPEHURI

%HQFKPDUN 6WRUHV *OREDO %DULVWDV LV PDLQWDLQLQJ  $V UHTXLUHG XQGHU WKH 7UDGHPDUN /LFHQVH

$JUHHPHQW*OREDO%DULVWDVKDGGD\VWRFXUHDOOGHIDXOWV

 7KHFXUHSHULRGH[SLUHGRQ1RYHPEHUDQGWRGDWH*OREDO%DULVWDVIDLOHG

WR FXUH DQ\ RI WKH GHIDXOWV DQG KDV IDLOHG WR RWKHUZLVH UHVSRQG WR .HXULJ¶V 2FWREHU

OHWWHU

 %HFDXVH*OREDO%DULVWDVIDLOHGWRWLPHO\FXUHWKHEUHDFKWKH/LFHQVH$JUHHPHQW

WHUPLQDWHGE\LWVWHUPVDVRI'HFHPEHU$VRIWKDWGDWH*OREDO%DULVWDVZDVUHTXLUHGWR

LPPHGLDWHO\FHDVHXVHRI.HXULJ¶V/LFHQVHG0DUNVDQGEXVLQHVVQDPHVZLWKWKHH[FHSWLRQIRU

DQ\DXWKRUL]HG:LQGGRZQDFWLYLWLHVZKLFKPXVWEHFRPSOHWHGRQRUEHIRUH0DUFK

&2817,
9LRODWLRQRI86&†D

 .HXULJDGRSWVDQGUHDOOHJHVWKHSUHFHGLQJSDUDJUDSKVDVLIIXOO\UHVWDWHGKHUHLQ

 .HXULJLVWKHRZQHURIWKH8QLWHG6WDWHVWUDGHPDUNUHJLVWUDWLRQVIRUWKH78//<¶6

0DUNV LQ 86 5HJLVWUDWLRQ 1RV      

        

DQGDOORIZKLFKDUHYDOLGVXEVLVWLQJ

DQGLQFRQWHVWDEOH.HXULJDOVRLVWKHRZQHURIWKH8QLWHG6WDWHVWUDGHPDUNUHJLVWUDWLRQVIRUWKH

78//<¶6 0DUNV LQ 86 5HJLVWUDWLRQ 1RV     

 
 Case 1:18-cv-00095-LAK Document 1 Filed 01/05/18 Page 9 of 13

DQGDOORIZKLFKDUHYDOLGDQGVXEVLVWLQJ&RSLHVRIWKHFHUWLILFDWHV

RIUHJLVWUDWLRQDUHDWWDFKHGKHUHWRDV([KLELW&

 *OREDO %DULVWDV¶ DFWLRQV GHVFULEHG DERYH FRQVWLWXWH XQDXWKRUL]HG XVH LQ

FRPPHUFHRIDUHJLVWHUHGPDUNLQFRQQHFWLRQZLWKWKHVDOHDQGDGYHUWLVLQJRIJRRGVDQGVXFKXVH

LVOLNHO\WRFDXVHFRQIXVLRQRUWRFDXVHPLVWDNHRUWRGHFHLYHDVWRWKHRULJLQRIWKHJRRGVVROGE\

*OREDO%DULVWDV

 $VVXFK*OREDO%DULVWDV¶DFWLRQVYLRODWH86&†D

 *OREDO %DULVWDV¶ DFWLRQV KDYH FDXVHG DQG XQOHVV UHVWUDLQHG E\ WKH &RXUW ZLOO

FRQWLQXH WRFDXVH .HXULJ DQG WKH JRRGZLOO DVVRFLDWHG ZLWK .HXULJ¶V SURWHFWHG /LFHQVHG 0DUNV

VHULRXV DQG LUUHSDUDEOH LQMXU\  .HXULJ LV HQWLWOHG WR LQMXQFWLYH UHOLHI HQMRLQLQJ *OREDO %DULVWDV

IURP DQ\ XQDXWKRUL]HG XVH RI WKH /LFHQVHG 0DUNV  .HXULJ KDV QR DGHTXDWH UHPHG\ DW ODZ

EHFDXVH WKH KDUP LW LV VXIIHULQJ LV GLIILFXOW WR TXDQWLI\ VXFK WKDW GDPDJHV DORQH FDQQRW IXOO\

FRPSHQVDWH.HXULJIRULWVORVV

 *OREDO %DULVWDV¶ DFWLRQV KDYH FDXVHG GDPDJHV WR .HXULJ LQ DQ DPRXQW WR EH

SURYHQ DW WULDO  *OREDO %DULVWDV¶ LQIULQJHPHQW LV ZLOOIXO DQG GDPDJHV VKRXOG EH WUHEOHG DV

SHUPLWWHGE\DSSOLFDEOHODZ

&2817,,
9LRODWLRQRI86&†D

 .HXULJDGRSWVDQGUHDOOHJHVWKHSUHFHGLQJSDUDJUDSKVDVLIIXOO\UHVWDWHGKHUHLQ

 *OREDO %DULVWDV¶ DFWLRQV GHVFULEHG DERYH LQFOXGLQJ EXW QRW OLPLWHG WR LWV XVH RI

WKH/LFHQVHG0DUNVRQVWRUHVLJQDJHQRWDSSURYHGE\.HXULJLWVXVHRIWKH/LFHQVHG0DUNVLQ

DGYHUWLVLQJDQGSURPRWLRQVQRWDSSURYHGE\.HXULJDQGRQJRLQJXVHRIWKH/LFHQVHG0DUNVLQ

DGYHUWLVLQJ DQGRU SURPRWLRQV FRQVWLWXWH XVH LQ LQWHUVWDWH FRPPHUFH RI D ZRUG WHUP QDPH

 
 Case 1:18-cv-00095-LAK Document 1 Filed 01/05/18 Page 10 of 13

V\PERORUGHYLFHRUDQ\FRPELQDWLRQWKHUHRIDQGDIDOVHGHVLJQDWLRQRIRULJLQZKLFKLVOLNHO\

WR FDXVH FRQIXVLRQ RU WR FDXVH PLVWDNH RU WR GHFHLYH DV WR WKH DIILOLDWLRQ FRQQHFWLRQ RU

DVVRFLDWLRQRI*OREDO%DULVWDVZLWK.HXULJRUGHFHLYHDVWRWKHRULJLQVSRQVRUVKLSRUDSSURYDO

RI *OREDO %DULVWDV¶ JRRGV DQG FRPPHUFLDO DFWLYLWLHV E\ .HXULJ LQ YLRODWLRQ RI  86&

†D

 *OREDO %DULVWDV¶ DFWLRQV KDYH FDXVHG DQG XQOHVV UHVWUDLQHG E\ WKH &RXUW ZLOO

FRQWLQXH WRFDXVH .HXULJ DQG WKH JRRGZLOO DVVRFLDWHG ZLWK .HXULJ¶V SURWHFWHG /LFHQVHG 0DUNV

VHULRXV DQG LUUHSDUDEOH LQMXU\  $V VXFK .HXULJ LV HQWLWOHG WR LQMXQFWLYH UHOLHI HQMRLQLQJ

'HIHQGDQW IURP DQ\ XVH RI WKH /LFHQVHG 0DUNV H[FHSW LQ WKH YHU\ OLPLWHG DQG H[SOLFLWO\

HQXPHUDWHG ZD\V DV VHW IRUWK LQ WKH 7UDGHPDUN /LFHQVH $JUHHPHQW  .HXULJ KDV QR DGHTXDWH

UHPHG\DWODZEHFDXVHWKHKDUPLWLVVXIIHULQJLVGLIILFXOWWRTXDQWLI\VXFKWKDWGDPDJHVDORQH

FDQQRWIXOO\FRPSHQVDWH.HXULJIRULWVORVV

 *OREDO %DULVWDV¶ DFWLRQV KDYH FDXVHG GDPDJHV WR .HXULJ LQ DQ DPRXQW WR EH

SURYHQ DW WULDO  *OREDO %DULVWDV¶ LQIULQJHPHQW LV ZLOOIXO DQG GDPDJHV VKRXOG EH WUHEOHG DV

SHUPLWWHGE\DSSOLFDEOHODZ

&2817,,,
9LRODWLRQRI86&†G

 .HXULJDGRSWVDQGUHDOOHJHVWKHSUHFHGLQJSDUDJUDSKVDVLIIXOO\UHVWDWHGKHUHLQ

 8SRQWHUPLQDWLRQRIWKH7UDGHPDUN/LFHQVH$JUHHPHQW*OREDO%DULVWDV¶ULJKWVWR

XVH WKH /LFHQVHG 0DUNV DV DXWKRUL]HG E\ WKH 7UDGHPDUN /LFHQVH $JUHHPHQW FHDVHG H[FHSW LQ

YHU\OLPLWHGDQGH[SOLFLWO\HQXPHUDWHGZD\VDVVHWIRUWKLQWKH7UDGHPDUN/LFHQVH$JUHHPHQW

   
 Case 1:18-cv-00095-LAK Document 1 Filed 01/05/18 Page 11 of 13

 *OREDO %DULVWDV¶ FRQGXFW LQFOXGLQJ LWV FRQWLQXHG RSHUDWLRQ RI WKH

WXOO\VFRIIHHVKRSVFRPDIWHUWKHWHUPLQDWLRQRIWKH7UDGHPDUN/LFHQVH$JUHHPHQWLVZLWKRXWWKH

FRQVHQWRI.HXULJDQGFRQVWLWXWHVDYLRODWLRQRI86&†G

 .HXULJLVHQWLWOHGWRDQRUGHUHQMRLQLQJ*OREDO%DULVWDVIURPFRQWLQXHGRSHUDWLRQ

RI WKH :HEVLWH DQG UHTXLULQJ *OREDO %DULVWDV WR FDXVH WKH :HEVLWH WR EH WDNHQ GRZQ IURP

WKH,QWHUQHW

&2817,9
9LRODWLRQRI'HODZDUH8QLIRUP'HFHSWLYH7UDGH3UDFWLFH$FW
'HO&RGH$QQWLW†HWVHT

 .HXULJDGRSWVDQGUHDOOHJHVWKHSUHFHGLQJSDUDJUDSKVDVLIIXOO\UHVWDWHGKHUHLQ

 7KH 7UDGHPDUN /LFHQVH $JUHHPHQW DW LVVXH LV JRYHUQHG E\ WKH VXEVWDQWLYH ODZ

RI'HODZDUH

 *OREDO%DULVWDV¶XVHRIWKH/LFHQVHG0DUNVLVOLNHO\WRFDXVHFRQIXVLRQPLVWDNH

RU GHFHLYH WKH FRQVXPLQJ SXEOLF DV WR WKH DIILOLDWLRQ FRQQHFWLRQ RU DVVRFLDWLRQ RI *OREDO

%DULVWDV¶JRRGVZLWK.HXULJ

 *OREDO %DULVWDV¶ DFWLRQV DUH OLNHO\ WR FDXVH FRQIXVLRQ DV WR WKH VRXUFH RU

VSRQVRUVKLSRI'HIHQGDQW¶VJRRGV

 *OREDO %DULVWDV¶ DFWLRQV FRQVWLWXWH IDOVH UHSUHVHQWDWLRQ DQG IDOVH GHVLJQDWLRQ RI

RULJLQLQYLRODWLRQRI'HO&RGH$QQWLW†

 .HXULJKDVEHHQGDPDJHGE\*OREDO%DULVWDV¶DFWLRQVLQDQDPRXQWWREHSURYHQ

DWWULDO

&28179
&RPPRQ/DZ8QIDLU&RPSHWLWLRQ

 .HXULJDGRSWVDQGUHDOOHJHVWKHSUHFHGLQJSDUDJUDSKVDVLIIXOO\UHVWDWHGKHUHLQ

   
 Case 1:18-cv-00095-LAK Document 1 Filed 01/05/18 Page 12 of 13

 *OREDO%DULVWDV¶DFWLRQVFRQVWLWXWHXQIDLUFRPSHWLWLRQXQGHUWKHFRPPRQODZ

 .HXULJKDVEHHQGDPDJHGE\*OREDO%DULVWDV¶DFWLRQVLQDQDPRXQWWREHSURYHQ

DWWULDO

&28179,
%UHDFKRIWKH/LFHQVH$JUHHPHQW

 .HXULJDGRSWVDQGUHDOOHJHVWKHSUHFHGLQJSDUDJUDSKVDVLIIXOO\UHVWDWHGKHUHLQ

 *OREDO%DULVWDVDFWLRQVGHVFULEHGDERYHLQFOXGLQJEXWQRWOLPLWHGWRLWVIDLOXUHWR

SD\ .HXULJ LWV RZHG DQQXDO 5R\DOW\ )HHV DQG LWV XVH RI VWRUH VLJQDJH DGYHUWLVLQJ DQG

SURPRWLRQVWKDWKDYHQRWEHHQDSSURYHGE\.HXULJYLRODWHWKH7UDGHPDUN/LFHQVH$JUHHPHQW

 $V D SUR[LPDWH UHVXOW RI *OREDO %DULVWDV¶ EUHDFK RI WKH 7UDGHPDUN /LFHQVH

$JUHHPHQW .HXULJ KDV VXIIHUHG GDPDJHV LQ DPRXQW H[FHHGLQJ  H[FOXVLYH RI LQWHUHVW

DQGFRVWV

:+(5()25(.HXULJ*UHHQ0RXQWDLQ,QFUHVSHFWIXOO\UHTXHVWWKLV&RXUWHQWHU

 $ -XGJPHQWLQIDYRURI.HXULJRQHDFKRILWVFODLPVDJDLQVW*OREDO%DULVWDV//&

LQDQDPRXQWWREHSURYHQDWWULDO

 % $ SHUPDQHQW LQMXQFWLRQDJDLQVW*OREDO%DULVWDV//&UHVWUDLQLQJLWLWVRIILFHUV

DJHQWV UHSUHVHQWDWLYHV HPSOR\HHV SDUHQWV VXEVLGLDULHV UHODWHG FRPSDQLHV OLFHQVHHV

VXFFHVVRUVDVVLJQVDQGDOOSHUVRQVDFWLQJLQFRQFHUWRUSDUWLFLSDWLRQZLWK*OREDO%DULVWDV//&

IURP   GLUHFWO\ RU LQGLUHFWO\ LQIULQJLQJ .HXULJ¶V /LFHQVHG 0DUNV HQJDJLQJ LQ DFWV RU

DFWLYLWLHVWRXQIDLUO\FRPSHWHZLWK.HXULJDQGRWKHUZLVHHQJDJLQJLQDQ\DFWVRUFRQGXFWWKDW

ZRXOG FDXVH FRQVXPHUV WR HUURQHRXVO\ EHOLHYH WKDW *OREDO %DULVWDV¶ JRRGV DUH VRPHKRZ

VSRQVRUHGE\DXWKRUL]HGE\OLFHQVHGE\DSSURYHGE\RULQDQ\ZD\DVVRFLDWHGZLWK.HXULJRU

DQ\RILWVEUDQGVLQFOXGLQJWKH78//<¶60DUNV

   
Case 1:18-cv-00095-LAK Document 1 Filed 01/05/18 Page 13 of 13