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FILED

2 CIT ESERVE / JURY DEMAND DALLAS COUNTY


1/31/2020 10:21 AM
FELICIA PITRE
DISTRICT CLERK

Belinda Hernandez
D C -2 O - 0 17 96
NOPC'ZO'O1796
CAUSE NO.

LEGACY FIGHTING ALLIANCE, LLC § IN THE DISTRICT COURT


§
Plaintiff, §
§
V.
v. § DALLAS COUNTY, TEXAS
§
HDNet LLC D/B/A AXS, AND §
ANTHEM SPORTS & §
ENTERTAINMENT, A-14TH JUDICIAL DISTRICT
§

Defendants.

PLAINTIFF’S ORIGINAL PETITION AND JURY DEMAND

TO THE HONORABLE JUDGE OF SAID COURT:

COME NOW, Plaintiff Legacy Fighting Alliance, LLC (“LFA” or “Plaintiff’) and files
0r

this Original Petition and Jury Demand (the “Petition”)


“Petiti0n”) complaining 0f Defendants HDNet LLC

d/b/a AXS (“AXS”), and Anthem Sports & Entertainment (“Anthem”, and together with
With AXS, the

0f action, would respectfully show the Court as follows:


“Defendants”) and for causes of

I. INTRODUCTION

Imagine that it is a Friday night. After a long week at work, you are getting ready to
t0 host

of your closest fn'ends


15 0f friends who are sports enthusiasts at your home. You will gather with your

friends in your living room t0 watch the live televised mixed martial arts fight 0f
of the season.

Unfortunately, no idea that Defendants AXS and Anthem unilaterally cancelled the fight
you have n0

and refused to televise


t0 it, in direct of Defendants’ contractual obligations t0
breach 0f to LFA under the

of a certain Production and Distribution Agreement (“Agreement”).


terms 0f LFA is filing this

lawsuit because this scenario happened not just once, but nine times from September through

December 20 1 9.

PLAINTIFF’S ORIGINAL PETITION AND JURY DEMAND PAGE 1


The Agreement required AXS t0 serve as the exclusive television broadcaster for up t0 30

annual mixed martial arts events promoted by LFA. Robert Thoele, AXS’S CFO and General

Counsel requested in writing that LFA agree t0 extend the Agreement m, asking for a rooster

0f events t0 g0 through December 2019. LFA agreed t0 extend the Agreement, in reliance that

AXS would satisfy its obligations under the Agreement. But in September 2019, when at least nine

televised events remained under the Agreement, AXS abruptly repudiated the Agreement, refusing

t0 televise the remaining events. The same month AXS merged with the sports media entity

Anthem. Despite the fact that the Agreement fully binds successors and assigns like Anthem, Ed

Nordholm, Anthem’s Chief Corporate Officer, brazenly informed LFA that the Agreement was

cancelled, and that Anthem would not broadcast the nine remaining fights 0f the 2019 events

season.

Defendants’ wrongful conduct and willful breaches 0f the Agreement caused LFA t0

sustain a ripple effect 0f damages. LFA lost in excess 0f $20,000 per cancelled fight in addition t0

lost profits. Defendants’ unilateral cancellation 0f the 2019 fights also interfered with LFA’S

contracts with third parties who provide services required t0 stage and promote the then scheduled

events. Even more, Defendants’ conduct greatly damaged LFA’S reputation. Viewers in over 53

million homes nationwide were precluded from Viewing anticipated LFA fights that were supposed

t0 be broadcast subject t0 the Agreement’s terms. Perhaps the most troubling damage that LFA

suffered as a result 0f Defendants’ wrongful conduct has been the loss 0f LFA’S hard-earned trust

by athletes whose careers are made from being featured in LFA promoted fights. The damages that

LFA suffered as a result 0f Defendants are significant. Accordingly, through this lawsuit, Plaintiff

LFA seeks t0 recover the damages caused by Defendants’ wrongful conduct.

PLAINTIFF’S ORIGINAL PETITION AND JURY DEMAND PAGE 2


II. DISCOVERY LEVEL

1. Plaintiff intends that discovery be conducted under Level 2 pursuant t0 Rule 190.3

of the Texas Rules 0f Civil Procedure (“TRCP”). Plaintiff affirmatively pleads that this suit is not

governed by the expedited-actions process in TRCP 169 because Plaintiff seeks monetary relief of

over $ 1 00,000.

III. PARTIES AND SERVICE

2. Plaintiff Legacy Fighting Alliance, LLC (“LFA”) is a limited liability company

organized under the laws 0f the State 0f Texas which maintains a registered agent at 1999 Bryan

Street Suite 900, Dallas, Texas 75201.

3. Defendant HDNet LLC (“AXS”) is a Delaware limited liability company registered

t0 d0 business in Texas. AXS is the original contracting party 0f the Agreement with LFA subj ect

0f this lawsuit. AXS may be served through its registered agent Capitol Services, Inc., 1675 S.

State Street, Suite B, Dover, Delaware 19901 with a copy 0f the Petition also served t0 its local

address, 18583 Dallas Parkway, Suite 150, Dallas, Texas 75287 0r if unable, through the Texas

Secretary 0f State.

4. Defendant Anthem Sports and Entertainment Corporation (“Anthem”) is the

successor in interest and/or assign 0f AXS under the Agreement. Anthem is an active Ontario

Business Corporation with a place 0f business located at 171 E. Liberty St, Suite 245, Toronto,

Ontario M6K 3P6. A copy 0f the Petition may served 0n Anthem in accordance with the

Convention 0f 15 November 1965 0n the Service Abroad 0f Judicial and Extrajudicial Documents

in Civil or Commercial Matters (the “Hague Convention”). Pursuant t0 the Hague Convention, a

copy 0f the Petition may be served 0n the Ministry 0f the Attorney General Ontario Court 0f Justice

PLAINTIFF’S ORIGINAL PETITION AND JURY DEMAND PAGE 3


located at 393 Main Street Haileybury, Ontario POJ 1K0 Canada, who will in turn serve the Petition

0n Anthem.

IV. JURISDICTION AND VENUE

5. Plaintiff seeks monetary relief over $1,000,000. TEX. R. CIV. P. 47(c)(5).

6. Subject matter jurisdiction is proper in this Court because the amount in

controversy exceeds the minimum jurisdictional threshold 0f this Court.

7. This dispute arises from and concerns the Agreement entered into between LFA

and AXS which sets the laws 0f the State 0f Texas as the governing law applicable t0 this dispute,

and sets mandatory venue 0f the dispute in Dallas County, Texas. Each Defendant is subject t0

this Court’s jurisdiction pursuant t0 the Agreement’s mandatory forum selection clause, which is

expressly “without regard t0 conflict 0f law rules.” See, e.g., CNOOC Se. Asia Ltd. v. Paladin

Res. (SUNDA) Ltd., 222 S.W.3d 889 (Tex. App.—Dallas 2007, pet. denied) (An agreement’s

forum selection clause may bind a successor in interest t0 the agreement, like Anthem.)

8. Venue is alternatively proper in this Dallas County Court in accordance with

Sections 15.002(a)(4) 0f the Texas Civil Practice and Remedies Code. Venue is proper before this

Court, and this Court has general personal jurisdiction over Defendants because Defendants

actively conducted business in the State 0f Texas. Additionally, venue is proper because Dallas

County is the county in which all 0r a substantial part 0f the events 0r omissions giving rise t0 the

claims in the Petition occurred. See, TEX. CIV. PRAC. & REM. CODE §15.002(a)(1).
V. ALTERNATIVE ALLEGATIONS

9. T0 the extent any allegation in this Petition is inconsistent with any other allegation,

such inconsistent allegations are pleaded in the alternative pursuant t0 Texas law. See, e.g., TEX.

PLAINTIFF’S ORIGINAL PETITION AND JURY DEMAND PAGE 4


R. CIV. P. 48 (“A party may also state as many separate claims or defenses as he has regardless of

consistency and Whether based upon legal or equitable grounds or both.”).

VI. STATEMENT OF FACTS


AXS and LFA enter into the Production and Distribution Agreement, through
which LFA’s mixed martial arts programming is broadcast t0 Viewers in
53 million homes nationwide.

10. LFA is a professional mixed martial arts (“MMA”) promotion company that gives

rising stars and top contenders the opportunity to prove their talent to fans and leaders in the

industry, primarily through televised events. LFA does so by giving top MMA prospects and

resurgent MMA veterans high-profile fights on a broadcast international stage.


11. LFA presents live MMA events on a monthly basis around the United States

including in Dallas, Houston, Las Vegas, Los Angeles, and Denver. LFA takes pride in furthering

the careers of its exceptional athletes While developing and maintaining a global fan base. By

promoting and staging televised MMA events nationwide, LFA strives to produce the next

generation of MMA stars.

12. AXS is a media entity that holds itself out to be “trusted by the biggest names in

sports?” AXS fumher represents that its technologies and partnerships provide access to the best

live entertainment experiences in the world? Additionally, AXS publicly represents that it

believes in supporting “an entire event life cycle.”

13. In reliance 0n AXS’S reputation and representations, 0n August 25, 2016, LFA and

AXS (collectively, the “Parties”) entered into the Agreement and joined forces to promote and

televise LFA’s highly sought after events.

1
See AXS “Sports”, available at https://solutions.axs.com/sp011s/, last accessed January 21, 2020.
2
See e.g., “About” AXS, available at https://solutions.axs.com/about/, last accessed January 21, 2020.

PLAINTIFF’S ORIGINAL PETITION AND JURY DEMAND PAGE 5


14. Specifically, through the Agreement, the Parties agreed that LFA would promote

and stage a yearly roster 0f up t0 30 MMA events (“Event(s)”), and that AXS in turn bore the

responsibly 0f producing and distributing the Events 0n national television.

15. Pursuant t0 the Agreement, the Parties agreed that AXS would be the “exclusive

television broadcaster” 0f all MMA Events promoted by LFA.


16. In addition t0 promoting the Events, the Agreement further obligated LFA—at its

sole cost and expense, t0 take the following non-exhaustive measures: (i) obtain all licenses and

permits for the lawful staging 0f Events, (ii) maintain insurance (iii) obtain Event equipment,

including, but not limited t0 canvas ring mat(s) and lighting; (iv) pay certain wages, salaries, fees,

and other compensation 0f third parties affiliated with Events, including, but not limited t0 those

0f the hosting facility, technicians, and audiovisual staff and equipment, (V) pay applicable athletic

commission fees and taxes related t0 Events, (Vi) obtain the right for AXS t0 use the name, likeness

and photos 0f fighters and Event participants, (Vii) any additional fees associated with staging

events, (viii) pay labor fees and union fees, if applicable, among other responsibilities.

17. In exchange for the foregoing and the covenants under the Agreement, LFA

provided valuable consideration, including, but not limited t0, the deal term which granted AXS

exclusive production and distribution rights for certain Events.

18. From August 2016 until Defendants’ September 2019 breach 0f the Agreement,

discussed below, the Parties showcased live Events in over 53 million homes coast t0 coast.

19. Given the vast scale 0f televised Events, should either Party cancel an Event under

non-force majeure circumstances, the Agreement requires the cancelling party t0 pay the non-

breaching party a cancellation fee. Under this clause 0f the Agreement, the cancelling party must

pay the non-breaching party $20,000 for each Event cancelled five days prior t0 the Event, $ 1 0,000

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for each Event cancelled six t0 ten days prior t0 the Event, in addition t0 all third party fees, and

reasonable out-of-pocket fees and expenses incurred in connection with the cancellation 0f the

Events, including, but not limited t0 non-breaching party’s legal fees.

At AXS’s request, the Parties twice extend the Agreement.

20. The Agreement includes a provision which grants AXS the exclusive option t0

license LFA’S annual Events by providing written notice, at a specified time, that AXS is excising

the Agreement’s Option (the “Option”). The Agreement contemplated AXS exercising an Option

in 2018 and 2019, all the way through 2021.

21. Exercising the Option extends the term 0f the Agreement through the Option

period.

22. On August 29, 2017, Robert Thoele (“Thoele”), CFO & General Counsel 0f AXS,

requested t0 exercise the Agreement’s 2018 Option in a written correspondence t0 LFA titled

“First Amendment t0 Production and Distribution Agreement Between HDNet LLC and LFA

Fighting Alliance, LLC dated, August 25, 2016 (the “First Amendment t0 the Agreement”).

23. The Parties agreed in writing t0 the First Amendment t0 the Agreement, extended

the Agreement, and each agreed t0 provide the services necessary t0 cover a series 0f at least 29

Events.

24. By exercising the 2018 Option, AXS was required t0 compensate LFA $25,000 per

each completed 201 8 Event from January 201 8 through December 2018.

25. On August 28, 201 8, Thoele requested t0 exercise the Agreement’s 2019 Option in

a written correspondence t0 LFA titled “Second Amendment t0 Production and Distribution

Agreement Between HDNet LLC and LFA Fighting Alliance, LLC dated, August 25, 2016 (the

“Second Amendment t0 the Agreement”).

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26. The Parties agreed in writing t0 the Second Amendment t0 the Agreement,

extended the Agreement, and each agreed t0 provide the services necessary t0 cover a series 0f at

least 28 Events from January 2019 through December 2019. AXS, having exercised its 2019

Option, agreed t0 televise each 2019 Event.

27. Further, by exercising the 2019 Option, AXS was required t0 compensate LFA

$27,500 per each completed 2019 Event.

28. For about two years, LFA enjoyed a consistent working relationship with AXS.

From January 2017 through September 2019, the Parties joined forces t0 produce and televise 7_6

M-
29. However, everything changed in September 2019.

Anthem acquires a majority interest in AXS, and Defendants proceed t0 breach the
outstanding obligations that AXS owed t0 LFA.

30. In September 20 1 9, with at least nine Events remaining under the 2019 Option that

AXS elected t0 exercise, LFA learned through the press that Anthem acquired a controlling interest

in AXS, becoming successor in interest and/or assign t0 AXS under the Agreement.

31. The Parties are permitted t0 assign their rights under the Agreement. In such an

event, the Agreement remains binding 0n any successors and assigns 0f the Parties, the assignee

must agree t0 be bound by the terms 0f the Agreement, and notably, the assignor is not relieved 0f

its obligations under the Agreement.

32. Defendants fully disrupted LFA’S business 0n 0r about September 11, 2019, at

which time Anthem’s Chief Corporate Officer Ed Nordholm (“Nordholm”), informed LFA that

Anthem was unilaterally cancelling the remaining rooster 0f 2019 Events (the “Cancelled 2019

Events”).

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33. Around this time LFA also learned that Anthem had terminated all 0f AXS’S

production staff and on-air talent associated with the Events.

34. Defendants cancelled the first 0f the Cancelled 2019 Events within just 2 weeks 0f

the scheduled Event.

35. Defendants willfully cancelled the Cancelled 2019 Events without the presence 0f

anyforce majeure circumstances.

36. Defendants failed t0 provide an explanation for their willful cancellation of the

Cancelled 2019 Events. Defendants must be held accountable for their intentional misconduct that

caused LFA t0 suffer extensive damages.

VII. CAUSES OF ACTION

COUNT ONE: BREACH OF CONTRACT


(Against AXS)

37. Plaintiff respectfully repeats and re-alleges all other allegations in this Petition as

though fully set forth in this claim.

38. The Production and Distribution Agreement between Plaintiff and AXS, including

the First Amendment t0 the Agreement, and the Second Amendment t0 the Agreement, is a

valid and enforceable agreement.

39. AXS, through its executive agent Thoele, voluntarily elected t0 exercise AXS’S

Option t0 extend the Agreement through the 2019 Option.

40. In reliance on AXS’S exercise 0f the 2019 Option, LFA performed its obligations

under the Agreement t0 promote and stage 2019 Events.

41. LFA is the proper party t0 bring suit for breach 0f contract against AXS.

42. LFA performed, tendered performance 0f, 0r was excused from performing its

contractual obligations t0 AXS.

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43. AXS willfully breached the Agreement with LFA by among other things,

cancelling at least nine Cancelled 2019 Events in non-force majeure circumstances. AXS further

breached the Agreement by failing t0 satisfy its contractual obligations post-merger with Anthem

during the 2019 Option period. By its express terms, the Agreement fully binds successors and

assigns like Anthem, while not relieving assignor AXS 0f its contractual obligations t0 LFA.

44. AXS’S willful breach has caused LFA t0 suffer injury in an amount 0f not less than

$700,000 in actual damages, in addition t0 attorneys’ fees, costs and expenses.

45. AXS’S willful breach also caused LFA t0 sustain damages associated with third

party expenses incurred in connection with LFA promoting and staging the Cancelled 2019

Events, which Defendants unilaterally cancelled at the last minute in non-force majeure

circumstances.

46. AXS’S willful breach caused LFA t0 suffer significant reputational damages as

well. AXS’S conduct tarnished LFA’S goodwill, reputation, and brand with: (i) national

sponsors, (ii) Viewers who planned t0 watch scheduled fights promoted by LFA that were

ultimately cancelled, (iii) ticket purchasers who planned t0 attend scheduled fights promoted

by LFA that were ultimately cancelled, (iv) athletes who invested their name, likeness, and

career development in scheduled fights promoted by LFA that were ultimately cancelled, and

(V) vendors and other third parties.

COUNT TWO: BREACH OF CONTRACT


(Against Anthem)

47. Plaintiff respectfully repeats and re-alleges all other allegations in this Petition as

though fully set forth in this claim.

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48. The Production and Distribution Agreement between Plaintiff and AXS, including

the First Amendment t0 the Agreement, and the Second Amendment t0 the Agreement, is a

valid and enforceable agreement.

49. AXS and Anthem merged 0n 0r about September 2019. Through this merger,

Anthem became a successor and/or assign t0 AXS 0f the Agreement, and assumed AXS’S

contractual obligations under the Agreement.

50. By its express terms, the Agreement remains binding 0n any successors and assigns

0f the Parties, like Anthem. Representations made by Anthem’s Chief Corporate Officer

Nordholm t0 LFA, further confirm that Anthem was aware 0f the Agreement, and the

obligations that it imposed 0n AXS and Anthem.

5 1. LFA is the proper party t0 bring suit for breach 0f contract against Anthem.

52. LFA performed, tendered performance 0f, 0r was excused from performing its

contractual obligations t0 Anthem.

53. Anthem willfully breached the Agreement with LFA by among other things,

cancelling at least nine Cancelled 2019 Events in non-force majeure circumstances.

54. Anthem’s willful breach has caused LFA t0 suffer injury in an amount 0f not less

than $700,000 in actual damages, in addition t0 attorneys’ fees, costs and expenses.

55. Anthem’s willful breach also caused LFA t0 sustain damages associated with third

party expenses incurred in connection with LFA promoting and staging the Cancelled 2019

Events that AXS and Anthem unilaterally cancelled at the last minute, none 0f which were

cancelled due toforce majeure circumstances.

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56. Anthem’s willful breach also caused LFA t0 sustain damages associated with third

party expenses incurred in connection with LFA promoting and staging the Cancelled 2019

Events.

57. Anthem’s willful breach caused LFA t0 suffer significant reputational damages as

well. Anthem’s conduct tarnished LFA’S goodwill, reputation, and brand with: (i) national

sponsors, (ii) Viewers who planned t0 watch scheduled fights promoted by LFA that were

ultimately cancelled, (iii) ticket purchasers who planned t0 attend scheduled fights promoted

by LFA that were ultimately cancelled, (iv) athletes who invested their name, likeness, and

career development in scheduled fights promoted by LFA that were ultimately cancelled, and

(V) vendors and other third parties.

COUNT THREE: TORTIOUS INTERFERENCE


(Against each Defendant)

58. Plaintiff respectfully repeats and re-alleges all other allegations in this Petition as

though fully set forth in this claim.

59. In order t0 stage and promote the Events, LFA had t0 engage the services 0f third

parties t0 provide services such as providing the Event space, equipment, audiovisual services,

in addition t0 other services associated with the Events.

60. LFA also had t0 engage the services 0f third parties in connection with the

Agreement’s requirement that LFA obtain Event equipment, including, but not limited t0

canvas ring mat(s) and lighting, among other third party Event related fees.

61. Having hosted 76 Events over more than two years under the Agreement with LFA,

AXS knew that LFA entered into third party agreements for the provision 0f services related

t0 Events.

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62. At the time 0f Defendants’ willful cancellation 0f the nine Cancelled 2019 Events,

LFA had valid third party contracts for the provision 0f services related t0 the Cancelled 2019

Events.

63. By willfully cancelling the nine Cancelled 2019 Events, AXS and Anthem caused

a domino effect 0f damages t0 LFA, including, but not limited t0, interference with LFA’S

numerous third party agreements for the provision 0f services related t0 the Cancelled 2019

Events.

64. AXS and Anthem willfully and intentionally interfered with LFA’s third party

agreements for the provision 0f services related t0 the Cancelled 2019 Events.

65. Defendants’ interference proximately caused LFA’S injury.

66. LFA incurred actual damage 0r loss as a proximate cause 0f Defendants’ wrongful

conduct in an amount t0 be determined at trial.

COUNT FOUR: FRAUD BY NON-DISCLOSURE


(Against AXS)

67. Plaintiff respectfully repeats and re-alleges all other allegations in this Petition as

though fully set forth in this claim.

68. AXS concealed from 0r failed t0 disclose certain facts t0 LFA about AXS’S merger

with Anthem.

69. When LFA learned 0f AXS’S merger with Anthem in September 2019, AXS was

still responsible for performing its agreed 0n obligations under the Agreement in connection

with a roster 0f nine events t0 occur between September — December 2019.

70. As contracting parties with LFA, AXS had a duty t0 disclose the facts t0 LFA about

its merger with Anthem. AXS also had a duty t0 disclose the facts t0 LFA about its merger

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with Anthem because at the time 0f the merger, AXS was still responsible for televising nine

Events, and performing its contractual obligations in connection with each Event.

71. The facts about the Anthem merger that AXS concealed from 0r failed t0 disclose

t0 LFA were material.

72. AXS knew that: (i) LFA was ignorant 0f the facts related t0 the Anthem merger,

and (ii) that LFA did not have an equal opportunity t0 discover the undisclosed facts about the

Anthem merger.

73. AXS was deliberately silent when it had a duty t0 speak.

74. By failing t0 disclose the facts about the Anthem merger, AXS intended t0 induce

LFA t0 take some action, 0r refrain from acting.

75. LFA relied 0n the representations made by AXS. AXS m extended the

Agreement, and exercised the 2019 Option, among other material representations made by AXS

that LFA relied 0n. Through its representations, AXS induced LFA t0 continue t0 promote 2019

Events, secure third party services necessary t0 stage the 2019 Events, among other acts.

76. LFA relied 0n AXS’S nondisclosure.

77. LFA was injured as a result 0f acting without the knowledge 0f the undisclosed

facts, in an amount t0 be determined at trial.

VIII. PLAINTIFF’S DAMAGES


78. As a direct and proximate result 0f Defendants’ improper acts and/or omissions

described herein, Plaintiff was caused t0 suffer severe injuries and damages, for which it seeks

appropriate judicial relief, including the following:

(1) actual and special monetary damages (including compensatory and consequential
damages), in an amount t0 be determined at trial;

(2) pre-judgment and post-judgment interest;

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(3) attorneys’ fees;

(4) reasonable costs and expenses in pursuing this action; and

(5) due t0 the deliberate, willful, and malicious nature 0f Defendants’ conduct as described
herein, Plaintiff seeks and is entitled t0 recover punitive damages from Defendants in
an amount t0 be determined by the jury.

IX. JURY TRIAL DEMAND

79. Plaintiff hereby respectfully requests a trial by jury and submits the appropriate fee

herewith.

X. PRAYER

WHEREFORE, PREMISES CONSIDERED, Plaintiff prays that Defendants be cited t0

appear and answer herein, and that the Court enter judgment against Defendants, and award all

damages to Plaintiff t0 which Plaintiff is entitled under law and equity; for pre-judgment interest

in accordance with law and/or at the highest legal rate; for interest 0n the judgment; for costs 0f

suit; for attorneys’ fees; and for such other and further relief, either at law 0r in equity, to which

Plaintiff has shown or will show itselfjustly entitled.

DATED: January 3 1, 2020 Respectfully submitted,

/S/Michael K. Hurst
Michael K. Hurst
Texas State Bar N0. 103 1 63 1 0
mhurst@lvnnllp.com
Chisara Ezie-Boncoeur
Texas State Bar N0. 24103714
cezie-boncoeur@lynnllp.com
LYNN PINKER COX & HURST, LLP
2100 Ross Avenue, Suite 2700
Dallas, Texas 75201
(2 14) 98 1 -3 800 - Telephone
(2 14) 98 1 -3 839 - Facsimile

ATTORNEYS FOR PLAINTIFF LEGACY


FIGHTING ALLIANCE, LLC

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