Case 1:15-cv-00293-LTS-JCF Document 200-12 Filed 06/29/17 Page 1 of 28

([KLELW/
 Case
Case 1:15-cv-00293-LTS-JCFDocument
1:15-cv-00293-LTS-JCF Document 146 Filed
200-12 Filed02/28/17
06/29/17 Page
Page12ofof128



81,7('67$7(6',675,&7&2857
6287+(51',675,&72)1(:<25.

[
0257*$*(5(62/87,216(59,&(6//&67  
),'(/,7</2$16(59,&,1*//&DQG6 $  
&$3,7$/3$571(56,1&  
  
3ODLQWLIIV  
  1R&9/76-&)
DJDLQVW  
  
-3025*$1&+$6(%$1.1$&+$6(+20(  
),1$1&(//&DQG-3025*$1&+$6( &2 
 
'HIHQGDQWV 
 [


127,&(2)3/$,17,))6¶027,2172&203(/',6&29(5<

 3/($6( 7$.( 127,&( WKDW XSRQ WKH DFFRPSDQ\LQJ 0HPRUDQGXP RI /DZ DQG

DVVRFLDWHG ([KLELWV 3ODLQWLIIV 0RUWJDJH 5HVROXWLRQ 6HUYLFHV //& VW )LGHOLW\ /RDQ 6HUYLFLQJ

//&DQG6 $&DSLWDO3DUWQHUV,QFZLOOPRYHWKLV&RXUWEHIRUHWKH+RQRUDEOH-DPHV&)UDQFLV

DW WKH 8QLWHG6WDWHV&RXUWKRXVH 3HDUO 6WUHHW &RXUWURRP ' DV VRRQDV FRXQVHOPD\ EH

KHDUGIRUDQ2UGHUSXUVXDQWWR)HG5&LY3JUDQWLQJ3ODLQWLIIV¶0RWLRQWR&RPSHO'LVFRYHU\

'DWHG1HZ<RUN1HZ<RUN  5HVSHFWIXOO\VXEPLWWHG
)HEUXDU\   
%\V%UHQW7DQWLOOR
%UHQW7DQWLOOR
7DQWLOOR/DZ3//&
      &KXUFK6WUHHW
WK)ORRU
      1HZ<RUN1<


$WWRUQH\IRU3ODLQWLIIV






 Case1:15-cv-00293-LTS-JCF
Case 1:15-cv-00293-LTS-JCF Document
Document200-12
147 Filed
Filed02/28/17
06/29/17 Page
Page1 3ofof2628



81,7('67$7(6',675,&7&2857
6287+(51',675,&72)1(:<25.

[
0257*$*(5(62/87,216(59,&(6//&67  
),'(/,7</2$16(59,&,1*//&DQG6 $  
&$3,7$/3$571(56,1&  
  
3ODLQWLIIV  
  1R&9/76-&)
DJDLQVW  
  
-3025*$1&+$6(%$1.1$&+$6(+20(  
),1$1&(//&DQG-3025*$1&+$6( &2 
 
'HIHQGDQWV 
 [


3/$,17,))6¶0(025$1'802)/$:,168332572)
027,2172&203(/',6&29(5<

 

7DQWLOOR/DZ3//&  
 &KXUFK6WUHHW
WK)ORRU   
 1HZ<RUN1<


$WWRUQH\VIRUWKH3ODLQWLIIV







 Case1:15-cv-00293-LTS-JCF
Case 1:15-cv-00293-LTS-JCF Document
Document200-12
147 Filed
Filed02/28/17
06/29/17 Page
Page2 4ofof2628

7$%/(2)&217(176

           3DJH

7$%/(2)$87+25,7,(6««««««««««««««««««««« LL

35(/,0,1$5<67$7(0(17$1'58/(D&(57,),&$7,21 

%$&.*5281'«««««««««««««««««««««««««« 

67$1'$5'2)5(9,(:«««««««««««««««««««««« 

3/$,17,))6$5((17,7/('727+(352'8&7,212)'2&80(1767+$7
'()(1'$176+$9(&217,18('72:,7++2/'$&203/(7(35,9,/(*(
/2*$1'7+(63(&,),&,'(17,),&$7,212)$58/(%:,71(66 

$ 7KH&RXUW2UGHUHG'HIHQGDQWVWR3URGXFH&HUWDLQ&DWHJRULHVRI'RFXPHQWV%\
,WV-XO\2UGHUDQG'HIHQGDQWV+DYH1RW3URYLGHG$&RPSOHWH5HVSRQVH
WR7KRVH&DWHJRULHVRI'RFXPHQWV       

 /RDQ'DWDDQG'RFXPHQWV        

 5REHUW:LFNDQDO\VLVDQGLQYHVWLJDWLRQGRFXPHQWDWLRQ    

 &XVWRGLDQ)LOHV         

% 'HIHQGDQWV+DYH1RW3URYLGHG$Q$GHTXDWH7LPHO\3ULYLOHJH/RJ)RU7KH
'RFXPHQWV7KDW+DYH%HHQ:LWKKHOG)URP3URGXFWLRQDQG6KRXOG+DYHWKH
3ULYLOHJH:DLYHGRU%H&RPSHOOHGWR3URYLGHD&RPSOHWH3ULYLOHJH/RJ:LWK
1R)XUWKHU'HOD\         

& 'HIHQGDQWV+DYH)DLOHGWR,GHQWLI\D5XOHE:LWQHVVDV5HTXLUHG%\
WKH-XO\2UGHU        

5(48(67('5(/,()«««««««««««««««««««««««« 












i
 Case1:15-cv-00293-LTS-JCF
Case 1:15-cv-00293-LTS-JCF Document
Document200-12
147 Filed
Filed02/28/17
06/29/17 Page
Page3 5ofof2628

7$%/(2)$87+25,7,(6

           3DJHV

&DVHV

'RXJODVY9LFWRU&DSLWDO*URXS:/1R&LY
DW 6'1<1RY««««««««««««««««««««« 

)LUHPDQ¶V)XQG,QV&RY*UHDW$P,QV&RRI1HZ<RUN
)5'6'1<«««««««««««««««««« 

2SSHQKHLPHU)XQG,QFY6DQGHUV86««««««««« 

5RVDVY$OLFH¶V7HD&XS//&)6XSSG6'1<«««««« 

6(&Y<RUNYLOOH$GYLVRUV//&)5'6'1<«««««««« 

6WDWXWHV5XOHVDQG5HJXODWLRQV

)HGHUDO5XOHRI&LYLO3URFHGXUHE««««««««««««««««« 

)HGHUDO5XOHRI&LYLO3URFHGXUHE««««««««««««« 

)HGHUDO5XOHRI&LYLO3URFHGXUH«««««««««««««««««««« 

/RFDO&LYLO5XOHE«««««««««««««««««««««««« 

5HDO(VWDWH6HWWOHPHQW3URFHGXUHV$FW86&HWVHT««««««««« 


 

ii
 Case1:15-cv-00293-LTS-JCF
Case 1:15-cv-00293-LTS-JCF Document
Document200-12
147 Filed
Filed02/28/17
06/29/17 Page
Page4 6ofof2628

 3ODLQWLIIV 6 $ &DSLWDO 3DUWQHUV ,QF µ6 $´ 0RUWJDJH 5HVROXWLRQ 6HUYLFHV //&

³056´ DQG VW )LGHOLW\ /RDQ 6HUYLFLQJ //& ³VW )LGHOLW\´FROOHFWLYHO\ ³3ODLQWLIIV´ RU WKH

³6FKQHLGHU (QWLWLHV´ VXEPLW WKLV 0HPRUDQGXP RI /DZ LQ VXSSRUW RI WKHLU PRWLRQ WR FRPSHO

SURGXFWLRQ RI GLVFRYHU\ IURP 'HIHQGDQWV -30RUJDQ &KDVH %DQN 1$ &KDVH +RPH )LQDQFH

//&DQG-30RUJDQ&KDVH &RSXUVXDQWWR)HG5&LY3

35(/,0,1$5<67$7(0(17$1'58/(D&(57,),&$7,21

 3ODLQWLIIVKDYHVHUYHGGLVFRYHU\RQ'HIHQGDQWVDQG'HIHQGDQWVKDYHSURYLGHGZRHIXOO\

LQFRPSOHWHUHVSRQVHVWRWKHUHTXHVWV3ODLQWLIIVSUHYLRXVO\PRYHGWKLV&RXUWWRFRPSHO'HIHQGDQWV

WR SURYLGH FRPSOHWH UHVSRQVHV WR LWV GLVFRYHU\ UHTXHVWV  3XUVXDQW WR LWV -XO\  

0HPRUDQGXP DQG 2SLQLRQ '( 1R  ³2UGHU´ WKH &RXUW RUGHUHG 'HIHQGDQWV WR SURYLGH

FRPSOHWH UHVSRQVHV WR WKRVH GLVFRYHU\ UHTXHVWV DW OHDVW DV LW UHODWHG WR 3ODLQWLIIV¶ QRQ5,&2

FODLPV  'HVSLWH QXPHURXV WHOHSKRQH FRQIHUHQFHV OHWWHUV DQG HOHFWURQLF PDLO FRUUHVSRQGHQFH

EHWZHHQ3ODLQWLIIV¶FXUUHQWFRXQVHODQG'HIHQGDQWV¶FRXQVHOVLQFH1RYHPEHUDQGFRQWLQXLQJ

WKURXJKWKLVPRQWKWRVHFXUHFRPSOHWHUHVSRQVHVWRWKHVHGLVFRYHU\UHTXHVWV3ODLQWLIIVFRQWLQXH

WR EH OHIW ZLWK ZRHIXOO\ LQDGHTXDWH UHVSRQVHV WR WKH UHTXHVWV WKDW 'HIHQGDQWV ZHUH RUGHUHG WR

SURYLGHFRPSOHWHUHVSRQVHVWRE\WKH-XO\2UGHU'(1RDQG'HIHQGDQWVKDYH

WDNHQWKHXQWHQDEOHSRVLWLRQWKDWWKH\KDYHQRIXUWKHUGLVFRYHU\WRSURYLGH

,Q DGGLWLRQ WR WKH UHTXHVWV IRU ZKLFK 'HIHQGDQWV ZHUH RUGHUHG WR SURYLGH FRPSOHWH

UHVSRQVHV 'HIHQGDQWV KDYH DOVR IDLOHG WR FRRSHUDWH ZLWK 3ODLQWLIIV LQ SURYLGLQJ D FRPSOHWH

SULYLOHJH ORJ IRU GRFXPHQWV WKDW 'HIHQGDQWV KDYH ZLWKKHOG IURP SURGXFWLRQ GHVSLWH UHSHDWHG

SURPLVHVE\'HIHQGDQWVWKDWDFRPSOHWHSULYLOHJHORJZRXOGEHIRUWKFRPLQJ3ODLQWLIIV¶FRXQVHO

KDV DGGUHVVHG 'HIHQGDQWV¶ IDLOXUH WR SURYLGH WKH FRPSOHWH SULYLOHJH ORJ LQ D WLPHO\ PDQQHU








 Case1:15-cv-00293-LTS-JCF
Case 1:15-cv-00293-LTS-JCF Document
Document200-12
147 Filed
Filed02/28/17
06/29/17 Page
Page5 7ofof2628

PXOWLSOH WLPHV VLQFH 1RYHPEHU  WKURXJK WKH SUHVHQW PRQWK E\ WHOHSKRQH FDOO OHWWHU DQG

HOHFWURQLFPDLOWRQRDYDLO

)LQDOO\'HIHQGDQWVGHVSLWHUHSHDWHGUHTXHVWVIURP3ODLQWLIIVKDYH\HWWRGHVLJQDWHD5XOH

EGHSRVLWLRQZLWQHVVNQRZOHGJHDEOHDERXW'HIHQGDQWV¶UHFRUGNHHSLQJSUDFWLFHV3ODLQWLIIV¶

FRXQVHOWULHGLQJRRGIDLWKWRVHFXUHWKHLGHQWLW\RIWKHGHSRVLWLRQZLWQHVVIURP'HIHQGDQWVGXULQJ

QXPHURXVWHOHSKRQHFDOOVOHWWHUVDQGHOHFWURQLFPDLOVH[FKDQJHGZLWK'HIHQGDQWV¶FRXQVHOEXW

KDVQRWEHHQDEOHWRREWDLQWKLVLQIRUPDWLRQ

%$&.*5281'

 7KHEDFNJURXQGRIWKLVGLVSXWHKDVEHHQSUHVHQWHGWRWKLV&RXUWLQWKHEULHILQJRQ3ODLQWLII¶V

SULRU0RWLRQ7R&RPSHODQG'HILQH6FRSHRI'LVFRYHU\DQGZDVZHOOVXPPDUL]HGLQWKH&RXUW¶V

-XO\2UGHUUXOLQJRQWKHSUHYLRXV0RWLRQWR&RPSHO'(1R6SHFLILFDOO\WKLV

FDVHUHODWHVWRWKRXVDQGVRIORDQVWKDW3ODLQWLIIVSXUFKDVHGIURP'HIHQGDQWVERWKLQWKHIRUPRI

3ODLQWLIIV6 $&DSLWDODQGVW)LGHOLW\¶VSXUFKDVHRILQGLYLGXDOQRWHVDOHDJUHHPHQWVIURP

WRDQG3ODLQWLII056¶VSXUFKDVHRIDODUJHSRRORIORDQVIURP'HIHQGDQWVLQSXUVXDQW

WR WKH 0RUWJDJH /RDQ 3XUFKDVH $JUHHPHQW ³0/3$´  3ODLQWLIIV KDYH DOOHJHG LQ WKHLU 7KLUG

$PHQGHG &RPSODLQW ³7$&´ WKDW 'HIHQGDQWV EUHDFKHG WKHVH YDULRXV QRWH VDOH DJUHHPHQWV DV

ZHOODVWKH0/3$LQWHUDOLDE\WUDQVIHUULQJWR056DVLJQLILFDQWVHWRIOLDELOLWLHVZKLFKYLRODWHG

DSSOLFDEOHODZVDQGWKHH[SUHVVZDUUDQWLHVFRQWDLQHGZLWKLQWKH0/3$DVZHOODVUHSUHVHQWLQJWR

ERUURZHUVWKDW'HIHQGDQWVVWLOORZQHGFHUWDLQORDQVDQGWKHQFROOHFWLQJDQGUHWDLQLQJSD\PHQWVRQ

WKRVH ORDQV DQG E\ LPSURSHUO\ IRUJLYLQJ ORDQV RU UHOHDVLQJ OLHQV FRQQHFWHG ZLWK ORDQV WKDW

3ODLQWLIIVKDGSXUFKDVHGIURP'HIHQGDQWV








 Case1:15-cv-00293-LTS-JCF
Case 1:15-cv-00293-LTS-JCF Document
Document200-12
147 Filed
Filed02/28/17
06/29/17 Page
Page6 8ofof2628

67$1'$5'2)5(9,(:

 5XOH E RI WKH )HGHUDO 5XOHV RI &LYLO 3URFHGXUH DOORZV GLVFRYHU\ RI ³DQ\ QRQ

SULYLOHJHGPDWWHUWKDWLVUHOHYDQWWRDQ\SDUW\¶VFODLPRUGHIHQVHDQGSURSRUWLRQDOWRWKHQHHGVRI

WKHFDVHFRQVLGHULQJWKHLPSRUWDQFHRIWKHLVVXHVDWVWDNHLQWKHDFWLRQWKHDPRXQWLQFRQWURYHUV\

WKHSDUWLHV¶UHODWLYHDFFHVVWRUHOHYDQWLQIRUPDWLRQWKHSDUWLHV¶UHVRXUFHVWKHLPSRUWDQFHRIWKH

GLVFRYHU\LQUHVROYLQJWKHLVVXHVDQGZKHWKHUWKHEXUGHQRUH[SHQVHRIWKHSURSRVHGGLVFRYHU\

RXWZHLJKVLWVOLNHO\EHQHILW´5HOHYDQFHLV³FRQVWUXHGEURDGO\WRHQFRPSDVVDQ\PDWWHUWKDWEHDUV

RQRUWKDWUHDVRQDEO\FRXOGOHDGWRRWKHUPDWWHUWKDWFRXOGEHDURQ´DQ\SDUW\¶VFODLPRUGHIHQVH

2SSHQKHLPHU)XQG,QFY6DQGHUV86

 2QFHWKHSDUW\VHHNLQJGLVFRYHU\GHPRQVWUDWHVWKHUHOHYDQFHRIWKHUHTXHVWHGGLVFRYHU\

WKHEXUGHQVKLIWVWRWKHSDUW\UHVLVWLQJGLVFRYHU\WRMXVWLI\ZK\WKHGLVFRYHU\KDVEHHQZLWKKHOG

)LUHPDQ¶V)XQG,QV&RY*UHDW$P,QV&RRI1HZ<RUN)5'6'1<

5RVDVY$OLFH¶V7HD&XS//&)6XSSG6'1<

 5XOHRIWKH )HGHUDO 5XOHVRI &LYLO 3URFHGXUHSURYLGHVWKDW DSDUW\ DJJULHYHGE\ WKH

UHVSRQVHVSURYLGHGWRLWVGLVFRYHU\UHTXHVWVPD\PRYHWKH&RXUWWRFRPSHOSURGXFWLRQRIFRPSOHWH

UHVSRQVHVDQGIRUSXUSRVHVRI5XOHDQLQFRPSOHWHUHVSRQVHLVWUHDWHGDVDIDLOXUHWRUHVSRQG

)HG5&LY3D








 Case1:15-cv-00293-LTS-JCF
Case 1:15-cv-00293-LTS-JCF Document
Document200-12
147 Filed
Filed02/28/17
06/29/17 Page
Page7 9ofof2628

3/$,17,))6$5((17,7/('727+(352'8&7,212)'2&80(1767+$7
'()(1'$176+$9(&217,18('72:,7++2/'$&203/(7(35,9,/(*(
/2*$1'7+(63(&,),&,'(17,),&$7,212)$58/(%:,71(66

$ 7KH&RXUW2UGHUHG'HIHQGDQWVWR3URGXFH&HUWDLQ&DWHJRULHVRI'RFXPHQWV%\
,WV-XO\0HPRUDQGXPDQG2UGHUDQG'HIHQGDQWV+DYH1RW3URYLGHG$
&RPSOHWH5HVSRQVHWR7KRVH&DWHJRULHVRI'RFXPHQWV

3XUVXDQWWRLWV-XO\2UGHU'(1RWKH&RXUWRUGHUHG'HIHQGDQWVWRSURGXFH

GRFXPHQWVUHVSRQVLYHWRDQ\RIWKHUHTXHVWVIRUSURGXFWLRQIURP3ODLQWLIIV³WKDWIDOOLQWRRQHRI

WKHVHWZRVXEFDWHJRULHV´

 ³'RFXPHQWVIRFXVHGRQWKHORDQVWKDWWKHGHIHQGDQWVVROGWRWKHSODLQWLIIV´ZKLFKWKH
&RXUWUHFRJQL]HGDVEHLQJ³UHOHYDQWWRµWKHSULYDWHFRPPHUFLDOGLVSXWHEHWZHHQWKH
SDUWLHV¶´

 ³'RFXPHQWVUHODWLQJWRFRPPXQLFDWLRQVLQYHVWLJDWLRQVUHVHDUFKSROLFLHVRUVHOHFWLRQ
FULWHULDFRQQHFWHGWRORDQIRUJLYHQHVVOHWWHUVVHQWRQ6HSWHPEHU'HFHPEHU
  DQG -DQXDU\  ´ ZKLFK WKH &RXUW DOVR KHOG ZHUH UHOHYDQW ³DV DUH
VLPLODUGRFXPHQWVUHODWLQJWRWKHSUH'2-/LHQ5HOHDVH3URJUDPHYHQWKRXJKWKHVH
GRFXPHQWVUHODWHDOVRWRORDQVQRWVROGWRWKHSODLQWLIIV´-XO\0HPRUDQGXP
DQG2UGHUDW'(1R

,QDGGLWLRQWKH&RXUWKHOGWKDW3ODLQWLII¶V5HTXHVW)RU3URGXFWLRQ1XPEHU³VHHN>LQJ@

GRFXPHQWVUHODWLQJWRWKHFULWHULDDQGSURFHVVHVGHIHQGDQWVHPSOR\HGLQGHFLGLQJWRSODFHORDQVLQ

WKH5&9GDWDEDVH´ZDVDOVRUHOHYDQWWRWKHEUHDFKRIFRQWUDFWFODLPVLQWKLVFDVHDQGRUGHUHG

'HIHQGDQWVWRSURGXFHWKHUHVSRQVLYHGRFXPHQWVWRWKDW5HTXHVW-XO\2UGHUDW'(

1R

7KH&RXUWIXUWKHUKHOGWKDW'HIHQGDQWVZHUHUHTXLUHGWRSURGXFHGRFXPHQWVUHVSRQVLYHWR

5HTXHVWIRU3URGXFWLRQ1XPEHUZKLFKUHTXHVW³DVNVIRUGRFXPHQWVVXIILFLHQWWRLGHQWLI\YDULRXV

GHWDLOV QXPEHU W\SH DPRXQW VHFXULW\ VWDWXV DQG ERUURZHU RI ORDQV WKH GHIHQGDQWV µVROG

WUDQVIHUUHGSXWLQWRWKHQDPHRIGHVLJQDWHGDVEHORQJLQJWRRURIIHUHGWRVHOOWR¶WKHSODLQWLIIV







 Case
Case 1:15-cv-00293-LTS-JCFDocument
1:15-cv-00293-LTS-JCF Document 147 Filed
200-12 Filed02/28/17
06/29/17 Page
Page810
of of
2628

-XO\2UGHUDW'(1R7RWKHH[WHQWWKDW'HIHQGDQWVZHUHREMHFWLQJWRWKLV

SURGXFWLRQRIGRFXPHQWVLGHQWLI\LQJORDQVLQFOXGHGRQWKH5&9GDWDEDVHEHFDXVH'HIHQGDQWV

DVVHUWHGWKDWWKHGRFXPHQWVRQWKH5&9GDWDEDVHZHUHQRWRUJDQL]HGE\WKHQDPHRIWKHHQWLW\

WR ZKLFK WKH ORDQ KDG EHHQ VROG WKH &RXUW LQVWUXFWHG 'HIHQGDQWV WR SURYLGH 3ODLQWLIIV ZLWK

LQIRUPDWLRQDERXWORDQVVROGWR3ODLQWLIIVPDLQWDLQHGRQRWKHUGDWDEDVHVWKDWZHUHVHDUFKDEOHE\

WKHLGHQWLW\RIWKHHQWLW\WRZKRPWKHORDQZDVVROG-XO\2UGHUDW'(1R

2Q1RYHPEHU3ODLQWLIIV¶FRXQVHOZURWHWR'HIHQGDQWV¶FRXQVHOWRIROORZXSRQ

'HIHQGDQWV¶SURGXFWLRQRIWKHGRFXPHQWV1RYOHWWHUIURP%7DQWLOORWR&3LVWLOOL([

 WR % 7DQWLOOR 'HFODUDWLRQ  6SHFLILFDOO\ 3ODLQWLIIV¶ FRXQVHO UDLVHG LVVXH ZLWK WKH IROORZLQJ

GHILFLHQFLHVLQWKHSURGXFWLRQ

 3ODLQWLIIV¶ FRXQVHO UHPLQGHG 'HIHQGDQWV RI WKH UHTXLUHPHQW IURP WKH 0DJLVWUDWH¶V
0HPRUDQGXP DQG 2UGHU WR SURGXFH ³DOO GRFXPHQWV UHODWLQJ WR FRPPXQLFDWLRQV
LQYHVWLJDWLRQV UHVHDUFK SROLFLHV RU VHOHFWLRQ FULWHULD FRQQHFWHG WR ORDQ IRUJLYHQHVV
OHWWHUVVHQWRQ6HSWHPEHU'HFHPEHUDQG-DQXDU\DVZHOO
DVVLPLODUGRFXPHQWVUHODWLQJWRWKH3UH'2-/LHQ5HOHDVH3URJUDPHYHQWKRXJKWKHVH
GRFXPHQWVPD\DOVRUHODWHWRORDQVQRWVROGWR3ODLQWLIIV´3ODLQWLIIVSRLQWHGRXWWKDW
DVRIWKDWGDWHWKH\KDGQRWUHFHLYHG³VLJQLILFDQWGLVFRYHU\UHJDUGLQJWKHIRUJLYHQHVV
OHWWHUVVLPLODUWRWKDWUHFHLYHGUHJDUGLQJWKH3UH'2-/LHQ5HOHDVH3URMHFW´DQG³QR
GRFXPHQWVLQWKLVFDWHJRU\KDYHEHHQSURGXFHGUHODWHGWRQRQSODLQWLIISDUWLHV´

 'HIHQGDQWV¶SURGXFWLRQ³GRHVQRWLQFOXGHDQ\RIWKHDQDO\VLVDQGLQYHVWLJDWLRQUHOLHG
XSRQE\5REHUW:LFNLQKLVOHWWHUVRI$XJXVWDQG6HSWHPEHU´

 ³>1@RGRFXPHQWVKDYHEHHQSURGXFHGUHODWHG´WR5HTXHVWIRU3URGXFWLRQ1XPEHU

 3ODLQWLIIV¶ FRXQVHO VRXJKW FRQILUPDWLRQ ZKHQ 'HIHQGDQWV ZRXOG FRPSOHWH ³WKHLU
SURGXFWLRQRIDOOGRFXPHQWVUHODWHGWRORDQOHYHOGDWDLQFOXGHGRQWKHµ&RUUXSWHG/LVW¶
DVZHOODVDQ\RIWKHRUVRLQGLYLGXDOQRWHVDOHDJUHHPHQWVEHWZHHQ6 $&DSLWDO
DQGVW)LGHOLW\´DQG'HIHQGDQWV,QSDUWLFXODU3ODLQWLIIV¶FRXQVHOQRWHGWKDW3ODLQWLIIV
³KDYHQRWUHFHLYHGDQ\FRPPXQLFDWLRQVUHJDUGLQJDQ\RIWKHQRWHVDOHDJUHHPHQWVZLWK
6 $DQGVW)LGHOLW\´







 Case
Case 1:15-cv-00293-LTS-JCFDocument
1:15-cv-00293-LTS-JCF Document 147 Filed
200-12 Filed02/28/17
06/29/17 Page
Page911
of of
2628

 3ODLQWLIIV¶FRXQVHODVNHG'HIHQGDQWV³ZLWKGHWDLOVDVWRWKHH[LVWHQFHDQGORFDWLRQRI
VXFKGDWDEDVHV>WKDWFDQEHVHDUFKHGE\WKHLGHQWLW\RIWKHHQWLW\WRZKRP'HIHQGDQWV
VROGDORDQ@ZKHWKHUWKH\FDQEHVHDUFKHGE\EX\HURIWKHORDQDQGLIVRZKHQVXFK
GRFXPHQWVZLOOEHSURGXFHG´

,QDVHULHVRIFRPPXQLFDWLRQVEHWZHHQWKHSDUWLHV¶FRXQVHOWKDWFRQWLQXHGRYHUWKHFRXUVH

RI 1RYHPEHU  DQG FDUULHG RYHU WKURXJK )HEUXDU\  FRXQVHO IRU 'HIHQGDQWV KDV

FRQVLVWHQWO\HQJDJHGLQDSDWWHUQRIDFWLYLW\WKDWLVLQWHQGHGVROHO\WRPLQLPL]HLWVUHVSRQVHWRWKH

RXWVWDQGLQJGLVFRYHU\UHTXHVWVDGGUHVVHGE\WKH-XO\0HPRUDQGXPDQG2UGHUGHVSLWH

EHLQJWKHRQO\SDUW\LQSRVVHVVLRQRIWKHUHTXHVWHGGRFXPHQWV3ODLQWLIIVZLOOGLVFXVVHDFKFDWHJRU\

LQWXUQDQGWKHLQFRPSOHWHVWDWHRI'HIHQGDQWV¶UHVSRQVHV

/RDQ'DWDDQG'RFXPHQWV

$VRI'HIHQGDQWV¶FRXQVHO¶VILQDOFRPPXQLFDWLRQVZLWK3ODLQWLIIV¶FRXQVHOUHJDUGLQJORDQ

GDWDDQGGRFXPHQWV'HIHQGDQWVKDYHWDNHQWKHIROORZLQJSRVLWLRQ

 >,@W KDV SURGXFHG    DOO GRFXPHQWV WKDW LW KDV EHHQ DEOH WR ORFDWH E\ PHDQV RI D
UHDVRQDEO\GLOLJHQWVHDUFKUHJDUGLQJWKH0/3$
 ³&KDVH KDV DOUHDG\ SURGXFHG WKRXVDQGV RI VSUHDGVKHHWV DQG RWKHU GRFXPHQWV
FRQWDLQLQJGDWDUHODWHGWRWKHVHORDQV´DQG³>L@WLVQRW&KDVH¶VREOLJDWLRQWRUHYLHZDQG
DQDO\]H GDWD LW SURGXFHV IRU 3ODLQWLIIV¶ EHQHILW WR UHIRUPDW WKH GDWD LW SURGXFHV IRU
3ODLQWLIIV¶HDVHRIXVH´
 ³7KHVSUHDGVKHHW&KDVHSURGXFHGLQFOXGHVGDWDRQDOOORDQVLGHQWLILHGE\3ODLQWLIIV
RQ0D\DVSXUSRUWHGO\KDYLQJEHHQSXUFKDVHGE\3ODLQWLIIVWKDW&KDVHZDV
DEOHWRORFDWHE\PHDQVRIDUHDVRQDEO\GLOLJHQWVHDUFK´)HEOHWWHUIURP&
3LVWLOOLWR%7DQWLOOR([WR%7DQWLOOR'HFODUDWLRQ



 ³&KDVH SURGXFHG WKH VSUHDGVKHHW    LQ RUGHU WR SURYLGH UHVSRQVLYH ORDQ GDWD WR
3ODLQWLIIV7KHUHLVQRµXQGHUO\LQJORDQGDWD¶EH\RQGZKDW&KDVHSURGXFHGZKLFKZDV
SXOOHGGLUHFWO\IURPWKHUHOHYDQWGDWDEDVHV´
 ³1RQH RI 3ODLQWLIIV¶ GRFXPHQW UHTXHVWV    UHTXHVWHG WKDW &KDVH SURGXFH µIXOO ORDQ
ILOHV¶IRUWKRXVDQGVRIORDQV1RUGLG-XGJH)UDQFLVRUGHU&KDVHWRµSURYLGHFRSLHVRI
DOOORDQILOHV¶WR3ODLQWLIIVLQKLV-XO\RUGHU´







 Case1:15-cv-00293-LTS-JCF
Case 1:15-cv-00293-LTS-JCF Document
Document200-12
147 Filed
Filed02/28/17
06/29/17 Page
Page1012ofof2628

 ³&KDVHKDVSURGXFHGRUZLOOSURGXFHDQ\QRWHVDOHFRQWUDFWVEHWZHHQ&KDVHDQGHLWKHU
6 $RUVW)LGHOLW\WKDWLWLVDEOHWRORFDWHE\PHDQVRIDUHDVRQDEO\GLOLJHQWVHDUFK
+RZHYHU&KDVHKDVQRPHDQVRIV\VWHPDWLFDOO\LGHQWLI\LQJORDQVSXUSRUWHGO\VROG
WR6 $RUVW)LGHOLW\RWKHUWKDQE\UHIHUHQFHWRWKH0D\OLVWV´-DQ
OHWWHUIURP&3LVWLOOLWR%7DQWLOOR([WR7DQWLOOR'HFODUDWLRQ


'HIHQGDQWV¶ SRVLWLRQ LV XQWHQDEOH DQG WKHLU UHVSRQVH WR WKH UHTXHVWV IRU ORDQ GDWD LV

XQDFFHSWDEOH3ODLQWLIIVKDYHUHYLHZHGWKHGRFXPHQWVDQGGDWDSURYLGHGWRGDWHE\'HIHQGDQWV

DQGWKHGRFXPHQWVDQGGDWDDUHLQFRPSOHWHLQDGHTXDWHDQGLQFRPSUHKHQVLEOH7KHVHGHILFLHQFLHV

DUHSDUWLFXODUO\WURXEOHVRPHEHFDXVHWKHLQIRUPDWLRQZDVQHYHUSURYLGHGLQIXOOWR3ODLQWLIIVLQWKH

FRXUVHRISXUFKDVLQJWKHORDQVIURPWKH'HIHQGDQWVDQGLVQHHGHGWRIXOO\H[SODLQWKHVFRSHRI

GDPDJHFDXVHGWR3ODLQWLIIVE\'HIHQGDQWV¶FRQGXFWDQGWKLVLQIRUPDWLRQZRXOGEHLQ'HIHQGDQWV¶

SRVVHVVLRQ  3ODLQWLIIV DUH JRYHUQHG E\ WKH VDPH ODZV DV 'HIHQGDQWV DV WR WKH UHTXLUHPHQWV RI

VHUYLFLQJDIHGHUDOO\UHODWHGPRUWJDJH7KHVHPRUWJDJHVHUYLFLQJDQGFRQVXPHUSURWHFWLRQODZV

ZHUHHQDFWHGWRSURWHFWWKHFRQVXPHUDQGWKHILQDQFLDOLQVWLWXWLRQ8QOHVVWKHSULRURZQHUVHUYLFHU

RIDPRUWJDJHORDQSURYLGHVWKHVXFFHVVRULQLQWHUHVWZLWKDFRPSOHWHRULJLQDOORDQILOHLQFOXGLQJ

LWHPVVXFKDVRULJLQDOSULQFLSDODPRXQWLQWHUHVWUDWHFXUUHQWSULQFLSDOEDODQFHRUDFFUXHGXQSDLG

SULQFLSDOLQWHUHVWSHQDOWLHVWKHQWKHVXFFHVVRULQLQWHUHVWFDQQHYHUOHJDOO\SXUVXHSD\PHQWIURPD

ERUURZHU

$V3ODLQWLIIVDOOHJHGLQWKH7$&RQ)HEUXDU\3ODLQWLII056DJUHHGWRSXUFKDVH

ILUVWOLHQPRUWJDJHORDQVZLWKDQDJJUHJDWHIDFHYDOXHRIPLOOLRQIURP'HIHQGDQWV

7KH 0/3$ WKDW HYLGHQFHG WKLV SXUFKDVH UHIHUUHG WR DQ ([KLELW $ WKDW ZDV VXSSRVHG WR EH WKH

PDVWHUOLVWRIORDQVVROGE\'HIHQGDQWVWR056,Q6HFWLRQRIWKH0/3$'HIHQGDQWVUHSUHVHQWHG

WKDW³>W@KHLQIRUPDWLRQVHWIRUWKRQWKH'DWD7DSHSURYLGHGE\6HOOHUWR3XUFKDVHULVWUXHDQGFRUUHFW








 Case1:15-cv-00293-LTS-JCF
Case 1:15-cv-00293-LTS-JCF Document
Document200-12
147 Filed
Filed02/28/17
06/29/17 Page
Page1113ofof2628

LQDOOPDWHULDOUHVSHFWV´3ODLQWLIIVKDYHQHYHUUHFHLYHG([KLELW$QRUWKH'DWD7DSHQRUKDYH

3ODLQWLIIVUHFHLYHGXVXDODQGFXVWRPDU\ORDQILOHVDQGERUURZHUSD\PHQWKLVWRU\WKDWZHUHUHTXLUHG

WRFRPSO\ZLWK5HJXODWLRQ;RIWKH5HDO(VWDWH 6HWWOHPHQW3URFHGXUHV$FW86&HW

VHT,QIDFWWKLVVSUHDGVKHHWGRHVQRWVKRZWKHRULJLQDOSULQFLSDODPRXQWLQWHUHVWUDWHFXUUHQW

SULQFLSDO EDODQFH RU DFFUXHGXQSDLG SULQFLSDOLQWHUHVWSHQDOWLHV  2Q WKLV VSUHDGVKHHW RQO\ 

ORDQVVKRZDODVWSD\PHQWDPRXQWDQGDQRWKHUVKRZDODVWSD\PHQWGDWHEXWQRDPRXQW

6HFRQG EDVHG XSRQ D UHYLHZ RI WKH VSUHDGVKHHW 3ODLQWLIIV FRQWHQG WKDW WKH VSUHDGVKHHW LV QRW

FRQVLVWHQWLQGDWDLQWHJULW\FRPSUHKHQVLYHQHVVRUODEHOLQJ)RUH[DPSOHLQWKHFROXPQODEHOHG

³&200´ RQ WKH VSUHDGVKHHW  ORDQV LQFOXGH WKH SKUDVH ³3523(57< $''5(66´ 

LQGLFDWH VRPH IRUP RI %DQNUXSWF\  DUH EODQN DQG WKH UHPDLQLQJ  KDYH UDQGRP

LQIRUPDWLRQ

'HIHQGDQWVKDYHDUJXHGWKDWWKHVSUHDGVKHHWWKDWWKH\KDYHSURGXFHGLQGLVFRYHU\WLWOHG

³'HIHQGDQWV
 3URGXFWLRQ RI /RDQ 'DWD  1RYHPEHU  ´ ZLWK %DWHV QXPEHU -30&056

 VXIILFHV IRU WKH UHTXLUHPHQW E\ -XGJH )UDQFLV WKDW ORDQ GDWD EH SURGXFHG

7KLVVSUHDGVKHHWLVPDWHULDOO\GHILFLHQW)LUVWWKLVVSUHDGVKHHWWLWOHG³'HIHQGDQWV
3URGXFWLRQRI

/RDQ'DWD1RYHPEHU´LVQRWVXIILFLHQWIRUDFWXDOO\VHUYLFLQJWKHORDQV&KDVH

VXSSRVHGO\VROGWR056%HWZHHQDQGVW)LGHOLW\DQG6 $SXUFKDVHGRYHU

ORDQVIURP&KDVH,QDOPRVWHYHU\FDVH&KDVHSURYLGHGWKH6FKQHLGHU(QWLWLHVZLWKWKHRULJLQDO

ORDQGRFXPHQWVDQGWKHIROORZLQJLQIRUPDWLRQ%RUURZHU
VVWDQG/DVW1DPH 6617,1

&R%RUURZHU
VVWDQG/DVW1DPH 6617,1DVDSSOLFDEOH&RPSOHWHPDLOLQJDGGUHVVDQG

SURSHUW\ DGGUHVV  %RUURZHU

V SKRQH QXPEHU  /RDQ RULJLQDWLRQ GDWH DPRXQW ERUURZHG

LQWHUHVW UDWH  2XWVWDQGLQJ EDODQFH DV RI GDWH RI VDOH LQFOXGLQJ SULQFLSDO DQGDFFUXHG








 Case1:15-cv-00293-LTS-JCF
Case 1:15-cv-00293-LTS-JCF Document
Document200-12
147 Filed
Filed02/28/17
06/29/17 Page
Page1214ofof2628

LQWHUHVWPLVVHG SD\PHQWVSHQDOWLHV DQG  /LHQ SRVLWLRQ  7KHVH VRUWV RI GRFXPHQWV DQG

LQIRUPDWLRQZHUHQRWSURYLGHGIRUDOORIWKHORDQV&KDVHVXSSRVHGO\VROGWR056

)XUWKHUPRUHWKHGDWDWLWOHG³'HIHQGDQWV
3URGXFWLRQRI/RDQ'DWD1RYHPEHU´

ZLWK%DWHVQXPEHU-30&056LVQRWVXIILFLHQWIRUGHWHUPLQLQJWKHGDPDJHV

&KDVH¶VDFWLRQVFDXVHGWKH6FKQHLGHU(QWLWLHV)URPWKLV³3URGXFWLRQRI/RDQ'DWD´WKHUHLVQR

DEVROXWHO\QRLQGLFDWLRQRIZKLFKRIWKHVHORDQVZHUHSXWLQWRWKH5&9V\VWHPRIUHFRUGVZKLFK

ORDQV KDG WKHLU OLHQV UHOHDVHG DQG ZKLFK ERUURZHUV ZHUH VHQW IRUJLYHQHVV OHWWHUV  :KLOH WKH

6FKQHLGHU(QWLWLHVWKURXJKH[WHQVLYHDQGFRVWO\UHVHDUFKDVUHIOHFWHGLQWKHVSUHDGVKHHWDQGVHW

RI/LHQ5HOHDVHVDWWDFKHGDV&RPSRVLWH([KLELWWRWKH%7DQWLOOR'HFODUDWLRQKDYHGHWHUPLQHG

WKDW&KDVHUHOHDVHGWKHOLHQRQDWOHDVWRIWKHDSSUR[LPDWHO\ILUVWOLHQPRUWJDJHORDQVWKDW

&KDVHVROGVW)LGHOLW\DQG6 $EHWZHHQDQGDQGE\H[DPLQLQJGR]HQVRIXQODEHOHG

VSUHDGVKHHWVUHFHLYHGDVSDUWRIWKRXVDQGVRIGRFXPHQWVSURGXFHGE\&KDVHGXULQJGLVFRYHU\KDV

GHWHUPLQHGWKDWPRUHWKDQRIWKHILUVWOLHQPRUWJDJHORDQVWKDW&KDVHVXSSRVHGO\VROGWR056

ZHUHOLHQUHOHDVHGEHFDXVH&KDVHKDVQRPHDQVRIV\VWHPDWLFDOO\LGHQWLI\LQJORDQVSXUSRUWHGO\

VROGWRWKH6FKQHLGHU(QWLWLHV3ODLQWLIIVZLOOQHYHUNQRZWKHIXOOH[WHQWRIWKHKDUPFDXVHGE\

'HIHQGDQWV 

0RUHRYHULQQRVSUHDGVKHHWSURGXFHGE\'HIHQGDQWVFDQ3ODLQWLIIVLGHQWLI\IRUDOO

ORDQVWKHUHOHYDQWLQIRUPDWLRQWKDW3ODLQWLIIVZRXOGQHHGWREHDEOHWRWUDFHEDFNWRFRQILUPWKDW

HDFKORDQZDVDVWOLHQPRUWJDJHRZQHGE\'HIHQGDQWVDQGHOLJLEOHWREHVROGE\'HIHQGDQWVWR



7KH-XO\2UGHUVLPLODUO\UHTXLUHG'HIHQGDQWVWRSURGXFHGRFXPHQWVUHVSRQVLYHWR5HTXHVWV1XPEHUHG
DQGZKLFKDVNHGIRUGRFXPHQWVDQGLQIRUPDWLRQUHJDUGLQJOLHQUHOHDVHVE\'HIHQGDQWV7KHVHGRFXPHQWV
GLUHFWO\UHODWHWRWKHEUHDFKHVRIWKHFRQWUDFWXDODJUHHPHQWVE\'HIHQGDQWVDQG3ODLQWLIIVDUHHQWLWOHGWRUHFHLYH
WKRVHGRFXPHQWV







 Case1:15-cv-00293-LTS-JCF
Case 1:15-cv-00293-LTS-JCF Document
Document200-12
147 Filed
Filed02/28/17
06/29/17 Page
Page1315ofof2628

056RQ)HEUXDU\SXUVXDQWWRWKH0/3$1RUKDYH'HIHQGDQWVSURYLGHG3ODLQWLIIVZLWK

GHWDLOHG FXVWRPHU ILOHV IRU HDFK ORDQ WR FRUUHODWH ZLWK WKH VSUHDGVKHHWV WKDW 'HIHQGDQWV KDYH

SURGXFHG3XUVXDQWWRWKHGLVFRYHU\UHTXHVWVWKDWWKLV&RXUWRUGHUHG'HIHQGDQWVWRFRPSO\ZLWK

E\LWV-XO\2UGHU3ODLQWLIIVDUHHQWLWOHGWRDIXOODFFRXQWLQJIRUDOORIWKHORDQV

SXUSRUWHGO\ VROG WR 056  )RU D PRUH GHWDLOHG GHVFULSWLRQ RI WKH GHILFLHQFLHV LQ 'HIHQGDQWV¶

GRFXPHQWSURGXFWLRQUHODWLQJWRWKHORDQILOHVDQGGRFXPHQWDWLRQSOHDVHVHHWKHDWWDFKHGOHWWHUV

GDWHG-DQXDU\DQG-DQXDU\IURPFRXQVHOIRU3ODLQWLIIVWRFRXQVHOIRU'HIHQGDQWV

DWWDFKHGDV&RPSRVLWH([KLELWWRWKH%7DQWLOOR'HFODUDWLRQ4XLWHVLPSO\ZLWKRXWDFRPSOHWH

VHWRIQRUPDODQGFXVWRPDU\ORDQVHUYLFLQJLQIRUPDWLRQDQGGRFXPHQWVWRVXEVWDQWLDWHDFODLPIRU

SD\PHQWIURPDERUURZHUWKHVXFFHVVRULQLQWHUHVWFDQPDNHQRGHPDQGIRUSD\PHQW$SDUWLDO

OLVWRIGDWDLVZRUVHWKDQYDOXHOHVVLWLVDEDJRIOLDELOLWLHVOHDYLQJWKH3ODLQWLIIVZLWKWKRXVDQGVRI

YLRODWLRQVRI5(63$DQGRWKHUODZVUHODWHGWRPRUWJDJHVHUYLFLQJ

)XUWKHU'HIHQGDQWV¶SRVLWLRQWKDWWKH\GRQRWKDYHWRLGHQWLI\WKHGDWDWKH\SURGXFHLQ

UHVSRQVHWR3ODLQWLIIV¶GRFXPHQWUHTXHVWVFOHDUO\LJQRUHVWKH&RXUW¶VFOHDULQVWUXFWLRQLQWKH-XO\

  2UGHU ZKHUHLQ WKH &RXUW UHMHFWHG 'HIHQGDQWV¶ FRQWHQWLRQ WKDW ³LW LV SODLQWLIIV¶

UHVSRQVLELOLW\WRLGHQWLI\VSHFLILFORDQVWKDWIRUPWKHEDVLVRIWKHLUFODLPV´,WLVVLPSO\QRWHQRXJK

IRU 'HIHQGDQWV WR SUHVHQW 3ODLQWLIIV ZLWK GR]HQV RI XQODEHOHG XQVXSSRUWHG DQG XQH[SODLQHG

VSUHDGVKHHWVWRLGHQWLI\ZKLFKRIWKHORDQVSXUSRUWHGO\VROGWR056VW)LGHOLW\DQG6 $

PLJKWKDYHEHHQZURQJIXOO\OLHQUHOHDVHGDQGZKLFKFRQWLQXHGWRPDNHSD\PHQWVWR'HIHQGDQWV

IROORZLQJWKHVDOH3ODLQWLIIVDUHHQWLWOHGWRWKHLQIRUPDWLRQRQDOOWKHORDQVQRWMXVWVSHFLILFORDQV

7KHVDPHGHIHFWDSSOLHVWR'HIHQGDQWV¶LQFRPSOHWHSURGXFWLRQRIWKHORDQGDWDUHODWLQJWR








 Case1:15-cv-00293-LTS-JCF
Case 1:15-cv-00293-LTS-JCF Document
Document200-12
147 Filed
Filed02/28/17
06/29/17 Page
Page1416ofof2628

WKH LQGLYLGXDO QRWH VDOH DJUHHPHQWV EHWZHHQ 'HIHQGDQWV DQG 3ODLQWLIIV 6 $ DQG VW )LGHOLW\

'HIHQGDQWV¶REOLJDWLRQWRSURGXFHWKHGRFXPHQWDWLRQLQFOXGLQJFRPPXQLFDWLRQVUHODWLQJWRWKHVH

QXPHURXV DJUHHPHQWV ZDV VSHFLILFDOO\ RUGHUHG E\ WKH &RXUW LQ WKH -XO\   2UGHU

'HIHQGDQWVKDYHIDLOHGWRSURYLGHDOOUHVSRQVLYHGRFXPHQWDWLRQDQGVKRXOGEHRUGHUHGWRGRVR

5REHUW:LFNDQDO\VLVDQGLQYHVWLJDWLRQGRFXPHQWDWLRQ

'HIHQGDQWVDOVRKDYHUHIXVHGWRSURGXFHWKHDQDO\VLVDQGLQYHVWLJDWLRQE\5REHUW:LFN

WKDWKHUHOLHGXSRQLQVXSSRUWRIKLVOHWWHUVGDWHG$XJXVWDQG6HSWHPEHUDGGUHVVHG

WR3ODLQWLIIV¶FRXQVHOLQWKHVHSDUDWHDFWLRQEHIRUHWKH8QLWHG6WDWHV'LVWULFW&RXUWIRUWKH'LVWULFW

RI &ROXPELD ZKLFK GRFXPHQWV ZHUH UHTXHVWHG E\ OHWWHU RQ 1RYHPEHU   DV SDUW RI

3ODLQWLIIV¶ UHTXHVW IRU WKH GRFXPHQWV UHODWLQJ WR UHOHDVHV RI 3ODLQWLII¶V ORDQV WKDW WKH &RXUW KDG

RUGHUHGEHSURGXFHG$FRS\RIWKRVH$XJXVWDQG6HSWHPEHUOHWWHUVDUHDWWDFKHG

DV&RPSRVLWH([KLELWWRWKH%7DQWLOOR'HFODUDWLRQ,QWKH$XJXVWOHWWHU'HIHQGDQWV¶

FRXQVHO 5REHUW :LFN VWDWHV WKDW &KDVH KDG LQYHVWLJDWHG WKH UHOHDVH RI 3ODLQWLII¶V ORDQV DQG

ZKHWKHU'HIHQGDQWVZHUHHQWLWOHGWRFODLPFUHGLWIRUORDQVZKLFKZRXOGKDYHUHTXLUHG&KDVH¶V

RZQHUVKLSRIWKRVHORDQVDVIROORZV

³7KHFRPSODLQWWKDWLVQRZRQILOHZLWKWKHFRXUWPD\KDYHEHHQLQWHQGHGWRDOOHJHWKDW
&KDVHFODLPHGFUHGLWXQGHUWKH1DWLRQDO0RUWJDJH6HWWOHPHQW³106´IRUUHOHDVLQJOLHQVWKDWLW
GLG QRW RZQ RU WKDW ZHUH LQHOLJLEOH IRU FUHGLW XQGHU WKH 106  )RU HDFK OLHQ LGHQWLILHG LQ WKH
FRPSODLQW&KDVHKDVLQYHVWLJDWHGZKHWKHULWFODLPHGFUHGLWIRUWKHOLHQDQGZKHWKHULWZDVHQWLWOHG
WRGRVR:LWKWZRH[FHSWLRQV&KDVHGLGQRWLQIDFWFODLPFUHGLWIRUWKHLGHQWLILHGOLHQV´$XJ
OHWWHUIURP5:LFNWR-%ODFN&RPSRVLWH([WR%7DQWLOOR'HFODUDWLRQ

$ VLPLODU DVVHUWLRQ LV UHSHDWHG E\ 5REHUW :LFN LQ KLV 6HSWHPEHU   OHWWHU WR

3ODLQWLIIV¶FRXQVHOLQWKH'&DFWLRQ

³>$@Q\ DOOHJDWLRQ WKDW &KDVH FODLPHG 106 FUHGLW IRU UHOHDVLQJ OLHQV LW GLG QRW RZQ LV







 Case1:15-cv-00293-LTS-JCF
Case 1:15-cv-00293-LTS-JCF Document
Document200-12
147 Filed
Filed02/28/17
06/29/17 Page
Page1517ofof2628

ZKROO\LQFRUUHFW´6HSOHWWHUIURP5:LFNWR-%ODFN&RPSRVLWH([WR%7DQWLOOR
'HFODUDWLRQ

'HIHQGDQWVKDYHUHIXVHGWRSURGXFHWKHVHGRFXPHQWVDVVHUWLQJWKDWWKHVHGRFXPHQWVDUH

DWWRUQH\FOLHQWSULYLOHJHGDQGDWWRUQH\ZRUNSURGXFWDQGDUHQRWUHOHYDQWWRDQ\DUHDRIGLVFRYHU\

WKDWZDVQRWVWD\HGE\WKH&RXUW¶V-XO\2UGHUQDPHO\WKHFRPPHUFLDOGLVSXWHEHWZHHQ

WKHSDUWLHV1RYOHWWHUIURP&3LVWLOOLWR%7DQWLOOR([WR%7DQWLOOR'HFODUDWLRQ

'HIHQGDQWVDUHZURQJ

3ODLQWLIIVDUHQRWVHHNLQJDWWRUQH\FOLHQWSULYLOHJHGFRPPXQLFDWLRQVEHWZHHQFRXQVHODQG

'HIHQGDQWVQRUZRUNSURGXFWJHQHUDWHGE\5REHUW:LFNLQDQWLFLSDWLRQRIOLWLJDWLRQ)XUWKHUPRUH

&KDVH¶VFKDUDFWHUL]DWLRQRILWVVHDUFKDVVROHO\UHODWHGWRZKHWKHULWWRRNFUHGLWSXUVXDQWWRWKH

106RU50%66HWWOHPHQWVIRU3ODLQWLIIV¶ORDQVLVDQDWWHPSWWRKLGHWKHEDOO3ODLQWLIIVDUHVHHNLQJ

WKHXQGHUO\LQJIDFWXDOGRFXPHQWVWKDWZHUHXVHGE\5REHUW:LFNLQKLVDQDO\VLVDQGLQYHVWLJDWLRQ

DVDPHDQVRIGHWHUPLQLQJZKHWKHU&KDVHOLHQUHOHDVHGORDQVRZQHGE\WKH3ODLQWLIIV'HIHQGDQWV

KDYH UHSUHVHQWHG WR WKH FRXUW WKDW WKH\ DUH XQDEOH WR VHDUFK WKH ORDQV ZKLFK ZHUH VROG WR WKH

3ODLQWLIIV7KDWUHSUHVHQWDWLRQLVVTXDUHO\FRQWUDGLFWHGE\5REHUW:LFN¶VDVVHUWLRQLQWKHVHOHWWHUV

WKDW&KDVHGLGQRWFODLPFUHGLWIRUOLHQUHOHDVHGORDQVLWGLGQRWRZQ'HIHQGDQWVDUHHQWLWOHGWR

UHFHLYHWKHGRFXPHQWVWKDWVKRZHG5REHUW:LFNWKDW&KDVHGLGQRWOLHQUHOHDVHORDQVLWGLGQRW

RZQ

0RUHRYHU WKH DQDO\VLV DQG LQYHVWLJDWLRQ LV HQFRPSDVVHG E\ WKH -XO\   2UGHU

ZKHUHLQ WKH &RXUW RUGHUHG 'HIHQGDQWV WR SURGXFH ³'RFXPHQWV UHODWLQJ WR FRPPXQLFDWLRQV

LQYHVWLJDWLRQVUHVHDUFKSROLFLHVRUVHOHFWLRQFULWHULDFRQQHFWHGWRORDQIRUJLYHQHVVOHWWHUVVHQW

RQ 6HSWHPEHU   'HFHPEHU   DQG -DQXDU\  ´ DV ZHOO DV 5HTXHVW IRU







 Case1:15-cv-00293-LTS-JCF
Case 1:15-cv-00293-LTS-JCF Document
Document200-12
147 Filed
Filed02/28/17
06/29/17 Page
Page1618ofof2628

3URGXFWLRQ 1XPEHU  ZKLFK VRXJKW GRFXPHQWV UHODWLQJ WR WKH FULWHULD DQG SURFHVV XVHG E\

'HIHQGDQWV WR GHWHUPLQH ZKHQ ORDQV ZRXOG EH SODFHG LQ 5&9  -XO\   2UGHU DW 

HPSKDVLVDGGHG'(1RVHHDOVR'HFOHWWHUIURP%7DQWLOORWR&3LVWLOOL([

WR%7DQWLOOR'HFODUDWLRQ

&XVWRGLDQ)LOHV

$IWHU UHYLHZLQJ WKH OLPLWHG GLVFRYHU\ 'HIHQGDQWV KDG SURYLGHG 3ODLQWLIIV¶ FRXQVHO KDG

ZULWWHQWR'HIHQGDQWV¶FRXQVHORQ1RYHPEHUWRGLVFXVVYDULRXVLVVXHVZLWKWKHGLVFRYHU\

SURGXFHGE\'HIHQGDQWV2QHLVVXHWKDWZDVUDLVHGZDV'HIHQGDQWV¶IDLOXUHWRSURGXFHGRFXPHQWV

IURPWKHFXVWRGLDQILOHVRI0DUN'DYLVRQHRI'HIHQGDQWV¶RZQSURSRVHGFXVWRGLDQV1RY

OHWWHUIURP%7DQWLOORWR&3LVWLOOLDW([WR%7DQWLOOR'HFODUDWLRQ,QUHVSRQVH

'HIHQGDQWVKDYHDVVHUWHGWKDW³&KDVH¶VSURGXFWLRQRIUHVSRQVLYHGRFXPHQWVIURP0DUN'DYLVLV

FRPSOHWH´)HEOHWWHUIURP&3LVWLOOLWR%7DQWLOOR([WR%7DQWLOOR'HFODUDWLRQ

'HIHQGDQWV¶ SRVLWLRQ LV QRW FUHGLEOH  3ODLQWLIIV DWWDFK DV ([KLELW  WR WKH % 7DQWLOOR

'HFODUDWLRQDOLVWRIWKHHPDLOVWKDWZHUHSURGXFHGE\'HIHQGDQWVWRGDWHWKDWZHUHSXUSRUWHGO\

UHFHLYHGE\0DUN'DYLV+RZHYHULQ'HIHQGDQWV¶SURGXFWLRQ'HIHQGDQWVKDYHIDLOHGWRSURGXFH

DVLQJOHHPDLOVHQWE\0DUN'DYLV3ODLQWLIIVILQGLWLPSRVVLEOHWREHOLHYHWKDW'HIHQGDQWVKDYH

QRHPDLOVLQWKHLUSRVVHVVLRQWKDWZRXOGKDYHUHVSRQGHGWRDQ\RIWKHQXPHURXVHPDLOVWKDWZHUH

VHQWWR0DUN'DYLV7KHVHGRFXPHQWVDUHUHOHYDQWDQG'HIHQGDQWVVKRXOGEHRUGHUHGWRSURGXFH

WKHP

3XUVXDQWWRWKH&RXUW¶VGLUHFWLYHLQWKH-XO\2UGHU3ODLQWLIIV¶FRXQVHOZURWHWR








 Case1:15-cv-00293-LTS-JCF
Case 1:15-cv-00293-LTS-JCF Document
Document200-12
147 Filed
Filed02/28/17
06/29/17 Page
Page1719ofof2628

'HIHQGDQWV¶ FRXQVHO RQ 'HFHPEHU   UHTXHVWLQJ WKH SURGXFWLRQ RI FXVWRGLDO ILOHV IRU WKH

IROORZLQJDGGLWLRQDO&KDVHHPSOR\HHV5REHUW$GDPRYLF-R\3DOD]]R1DQF\5XELQR

3DQLNRV3DOOHWDV6WHYH+HPSHUO\DQG-RQDWKDQ%'ULYHU6HH'HFOHWWHUIURP

%7DQWLOORWR&3LVWLOOLDWWDFKHGDV([WRWKH%7DQWLOOR'HFODUDWLRQ

'HIHQGDQWV¶FRXQVHOUHVSRQGHGE\OHWWHURQ'HFHPEHU$VLWUHODWHGWR5REHUW

$GDPRYLF 'HIHQGDQWV¶ FRXQVHO DVVHUWHG WKDW ³&KDVH KDV DOUHDG\ FROOHFWHG DQG SURGXFHG

GRFXPHQWVIURP0U$GDPRYLF´'HFOHWWHUIURP&3LVWLOOLWR%7DQWLOORDWSDUDJUDSK

 DWWDFKHG DV ([  WR WKH % 7DQWLOOR 'HFODUDWLRQ  $V IRU WKH UHPDLQLQJ ILYH LQGLYLGXDOV

'HIHQGDQWV DVVHUWHG WKDW DOO ILYH LQGLYLGXDOV ³DUH >QRW@ OLNHO\ WR KDYH PDWHULDO QRQFXPXODWLYH

GRFXPHQWVUHODWLQJWRWKHEXVLQHVVGLVSXWHEHWZHHQ&KDVHDQG3ODLQWLIIV´DQGIRU-R\3DOD]]R

'HIHQGDQWV¶FRXQVHOIXUWKHUREMHFWHGWRWKHSURGXFWLRQRIKHUFXVWRGLDOILOHRQWKHEDVLVRIDWWRUQH\

FOLHQWSULYLOHJH'HFOHWWHUIURP&3LVWLOOLWR%7DQWLOORDWSDUDJUDSK([WRWKH

%7DQWLOOR'HFODUDWLRQ

)RUHDFKRIWKHILYHZLWQHVVHVGLVFRYHU\SURGXFHGE\&KDVHLQGLFDWHGDXQLTXHQHHGIRU

WKHLUFXVWRGLDOILOHV)LUVWIRU-R\3DOD]]RDVWKHOHDGFRXQVHOIRULPSOHPHQWDWLRQRIWKH1DWLRQDO

0RUWJDJH 6HWWOHPHQW 50%6 6HWWOHPHQW DQG WKH %DQNUXSWF\ 3URRI RI &ODLP 6HWWOHPHQW 0V

3DOD]]R¶VFXVWRGLDOILOHLVQHHGHGEHFDXVHRWKHUFXVWRGLDQVZHUHQRWUHVSRQVLEOHIRUWKHW\SHRI

FRPPXQLFDWLRQV VKH ZDV UHVSRQVLEOH IRU LQFOXGLQJ FRPPXQLFDWLRQV ZLWK WKH 0RQLWRU RI WKH

1DWLRQDO 0RUWJDJH 6HWWOHPHQW -RVHSK $ 6PLWK -U DQG KLV RIILFH WKH 2IILFH RI 0RUWJDJH

6HWWOHPHQWDVUHIOHFWHGLQ0V3DOD]]R¶V/LQNHG,Q3URILOH([WRWKH%7DQWLOOR'HFODUDWLRQ

$OWKRXJKVKHZDVDIRUPHULQKRXVHODZ\HUIRU'HIHQGDQWV3ODLQWLIIVDUHQRWVHHNLQJFRQILGHQWLDO








 Case1:15-cv-00293-LTS-JCF
Case 1:15-cv-00293-LTS-JCF Document
Document200-12
147 Filed
Filed02/28/17
06/29/17 Page
Page1820ofof2628

GRFXPHQWVUHODWLQJWRKHUDFWLRQVDVDODZ\HU5DWKHUDVGRFXPHQWVIURPGLVFRYHU\SURGXFHGE\

&KDVHKDYHVKRZQ0V3DOD]]RZDVXQLTXHO\LQYROYHGLQSURYLGLQJQRQSULYLOHJHGLQIRUPDWLRQ

UHJDUGLQJWKH5&9LQYHQWRU\DQGOLHQVUHOHDVHGIURPWKH5&9GDWDEDVHDVUHIOHFWHGLQHPDLO

FRUUHVSRQGHQFH EHWZHHQ -R\ 3DOD]]R DQG 0DUWKD 6YRERGD IURP WKH 2IILFH RI 0RUWJDJH

6HWWOHPHQWSURGXFHGE\'HIHQGDQWVDQG%DWHVVWDPSHG-30&056

$VWKHFRUUHVSRQGHQFHEHWZHHQ-R\3DOD]]RDQG0DUWKD6YRERGDUHIOHFWVLWZDV3DOD]]R¶V

FRPPXQLFDWLRQZLWKWKH2IILFHRI0RUWJDJH6HWWOHPHQW2YHUVLJKWWKDWSURYLGHGWKH³JUHHQOLJKW´

WRUHOHDVHWKRXVDQGVRIILUVWDQGVHFRQGOLHQPRUWJDJHVUHVXOWLQJLQGDPDJHWR3ODLQWLIIV$VWKH

OHDG LQGLYLGXDO WDVNHG ZLWK LPSOHPHQWDWLRQ RI WKH YDULRXV PRUWJDJH VHWWOHPHQWV DV ZHOO DV

PDQDJLQJ D WHDP WDVNHG ZLWK FRPSOLDQFH UHJDUGLQJ VZRUQ GRFXPHQWV QRWDU\ DQG UHGDFWLRQ

FRQWUROV0V3DOD]]R¶VFXVWRGLDOILOHPD\SURYLGHDQH[SODQDWLRQZK\&KDVHUHOHDVHGKXQGUHGVRI

ORDQV RZQHG E\ 3ODLQWLIIV ZKHQ WKH DFFXUDF\ DQG LQWHJULW\ RI VXFK LQIRUPDWLRQ ZDV WR EH

FRQILUPHGE\DVLJQHUDWWHVWLQJWRWKHLQIRUPDWLRQ0V3DOD]]R¶VFXVWRGLDOILOHPD\IXUWKHUVKRZ

KRZLQWKHZDNHRIYDULRXVVHWWOHPHQWVSURKLELWLQJURERVLJQLQJE\'HIHQGDQWVZKDWPHWKRGV

&KDVHDQGLWVWKLUGSDUW\YHQGRU1DWLRQZLGH7LWOH&OHDULQJ17&XVHGWRUHOHDVH3ODLQWLIIVORDQV

DQGVHQGIUDXGXOHQW³9DFDWLRQDQG5HVFLVVLRQRI0RGLILFDWLRQRI0RUWJDJH´GRFXPHQWVIRUORDQV

RZQHGE\3ODLQWLIIVWRFRXQW\UHFRUGHUVDFURVVWKH8QLWHG6WDWHVDVUHIOHFWHGLQ&RPSRVLWH([

WR WKH % 7DQWLOOR 'HFODUDWLRQ FRQVLVWLQJ RI QXPHURXV 9DFDWLRQ DQG 5HVFLVVLRQ 2I 5HOHDVH 2I

0RUWJDJHGRFXPHQWV 



3ODLQWLIIV¶5HTXHVWIRU3URGXFWLRQ1XPEHUVRXJKWLQIRUPDWLRQUHJDUGLQJWKHORDQVLGHQWLILHGE\'HIHQGDQWVIRU
D³9DFDWLRQRI0RGLILFDWLRQRI0RUWJDJH´DQG'HIHQGDQWVZHUHREOLJDWHGWRSURGXFHWKDWLQIRUPDWLRQSXUVXDQWWR
WKH-XO\2UGHUZKLFKIRXQGWKLVUHTXHVWUHOHYDQWWRWKHFRPPHUFLDOUHODWLRQVKLSEHWZHHQWKHSDUWLHV







 Case1:15-cv-00293-LTS-JCF
Case 1:15-cv-00293-LTS-JCF Document
Document200-12
147 Filed
Filed02/28/17
06/29/17 Page
Page1921ofof2628

6HFRQGIRU3DQLNRV3DOOHWRVKLVFXVWRGLDOILOHVVKRXOGEHSURGXFHGEHFDXVHKHSDUWLFLSDWHG

LQ WKH LQLWLDO UHPRYDO RI 5&9 ORDQV IRU OLHQ UHOHDVH DQG ZDV UHVSRQVLEOH IRU FKHFNLQJ WKH

DYDLODELOLW\RIOLHQVIRUWKH'2-/LHQ5HOHDVH3URJUDP*LYHQKLVXQLTXHUHVSRQVLELOLWLHV3DQLNRV

3DOOHWRV¶VFXVWRGLDOILOHVZRXOGSURYLGHPRUHGHWDLOHGLQIRUPDWLRQDVWRKRZ'HIHQGDQWVZRXOGEH

DEOHWRFRQILUPRZQHUVKLSRIWKHORDQVWREHUHOHDVHG

7KLUGIRU1DQF\5XELQRVKHKDVXQLTXHNQRZOHGJHDQGUHVSRQVLELOLWLHVUHJDUGLQJ5&9

DQGWKHOLHQUHOHDVHVIURP5&9UHVSRQVLELOLWLHVWKDWWKHRWKHUFXVWRGLDOZLWQHVVHVGLGQRWVKDUH

$VVKHZDVLQFKDUJHRI5&9DGPLQLVWUDWLYHVXSSRUWVKHZRXOGKDYHNQRZQZKDWUHFRUGVZHUH

NHSW LQ 5&9 DQG KDG RYHUVLJKW IRU ZKLFK ORDQV JRW OLHQ UHOHDVHV  ,Q DGGLWLRQ VKH ZRXOG EH

UHVSRQVLEOH IRU LQGLFDWLQJ LQ WKH 5&9 GDWDEDVH ZKLFK ORDQV ZHUH LQ IDFW OLHQ UHOHDVHG  0V

5XELQR¶V GRFXPHQWV DUH QHFHVVDU\ IRU SUHSDUDWLRQ RI WKH DOUHDG\ VFKHGXOHG GHSRVLWLRQV DQG WR

SUREHWKHH[LVWHQFHDQGORFDWLRQRIGRFXPHQWDWLRQRIWKHORDQVVROGWR3ODLQWLIIV)RUWKHVHUHDVRQV

GLVFRYHU\IURPKHUFXVWRGLDOILOHLVUHOHYDQWDQGQRQFXPXODWLYH

)RXUWKIRU-RQDWKDQ'ULYHUKHKDVXQLTXHNQRZOHGJHDQGUHVSRQVLELOLWLHVUHJDUGLQJWKH

OLHQUHOHDVHVDVHYLGHQFHGE\KLVWLWOHDW&KDVH9LFH3UHVLGHQWRI/LHQ0DQDJHPHQW)URPWKH

GRFXPHQWVUHYLHZHGLQGLVFRYHU\0U'ULYHULVUHVSRQVLEOHIRUWKHSURFHVVHVDQGV\VWHPVXVHGWR

WDNHDORDQWDUJHWHGIRUOLHQUHOHDVHDQGXVLQJDWKLUGSDUW\VXFKDV17&WRH[HFXWHWKHOLHQUHOHDVH

RQEHKDOIRI&KDVH7KHVHOLHQUHOHDVHGRFXPHQWVDIIHFWHGWKHFRQWUDFWXDOUHODWLRQVKLSEHWZHHQ

WKHSDUWLHVDVZHOODVWKHFRQWUDFWXDOUHODWLRQVKLSEHWZHHQWKH3ODLQWLIIVDQGWKHLUERUURZHUV0U

'ULYHUZRXOGWKHUHIRUHKDYHXQLTXHQRQFXPXODWLYHNQRZOHGJHDERXWWKHUHVFLVVLRQVPDGHWROLHQ

UHOHDVHV








 Case1:15-cv-00293-LTS-JCF
Case 1:15-cv-00293-LTS-JCF Document
Document200-12
147 Filed
Filed02/28/17
06/29/17 Page
Page2022ofof2628

)LQDOO\ IRU 6WHYH +HPSHUO\ KLV FXVWRGLDO ILOH LV QHFHVVDU\ EHFDXVH KH H[HUWHG VHQLRU

UHVSRQVLELOLW\DV0DQDJLQJ'LUHFWRU±+HDGRI0RUWJDJH2ULJLQDWLRQVDW&KDVHDQGZDVXOWLPDWHO\

UHVSRQVLEOHIRUZKLFKOLHQVFRXOGEHUHOHDVHGDQGWKHVWDQGDUGVIRUUHOHDVHRIOLHQV)XUWKHU6WHYH

+HPSHUO\ZDVGLUHFWO\LQYROYHGLQVHWWLQJXSWKH'2-QG/LHQ([WLQJXLVKPHQW3URJUDPEDVHG

XSRQ3ODLQWLIIV¶UHYLHZRIGRFXPHQWVSURGXFHGWRGDWHE\'HIHQGDQWV


% 'HIHQGDQWV +DYH 1RW 3URYLGHG $Q $GHTXDWH 7LPHO\ 3ULYLOHJH /RJ )RU 7KH
'RFXPHQWV 7KDW +DYH %HHQ :LWKKHOG )URP 3URGXFWLRQ DQG 6KRXOG +DYH WKH
3ULYLOHJH:DLYHGRU%H&RPSHOOHGWR3URYLGHD&RPSOHWH3ULYLOHJH/RJ:LWK1R
)XUWKHU'HOD\

,Q1RYHPEHU3ODLQWLIIV¶FRXQVHOZURWHWR'HIHQGDQWV¶FRXQVHOE\HOHFWURQLFPDLO

QRWLI\LQJ'HIHQGDQWVWKDWEDVHGXSRQ3ODLQWLIIV¶UHYLHZRIWKHGLVFRYHU\UHVSRQVHVSURYLGHGDVRI

WKDWGDWHE\'HIHQGDQWVWKHUHDUHWKRXVDQGVRIUHGDFWLRQVRQGRFXPHQWVDVZHOODVRWKHULQVWDQFHV

RIGRFXPHQWVEHLQJZLWKKHOGDQG3ODLQWLIIVUHTXHVWHGWKHIXUQLVKLQJRIDFRPSOHWHSULYLOHJHORJ

E\1RYHPEHU1RYHPDLOIURP%7DQWLOORWR&3LVWLOOL([WR%7DQWLOOR

'HFODUDWLRQ,QIDFW3ODLQWLIIV¶UHYLHZRIWKHGRFXPHQWVSURGXFHGWRGDWHKDVUHYHDOHGQXPHURXV

LQVWDQFHVRIGRFXPHQWVWKDWZHUHSURGXFHGZLWKODUJHVHFWLRQVRIWKHGRFXPHQW³EODFNHGRXW´ZLWK

QR LQGLFLD RI ZK\ WKH GRFXPHQW ZDV UHGDFWHG  7KH GRFXPHQWV WKDW EHDU WKLV IHDWXUH LQFOXGH

GRFXPHQWV %DWHVVWDPSHG -30& 056  

     

DQG

)ROORZLQJDPHHWDQGFRQIHUWHOHSKRQLFPHHWLQJRQ1RYHPEHU3ODLQWLIIV¶FRXQVHO

ZURWH'HIHQGDQWV¶FRXQVHORQ1RYHPEHUWRVXPPDUL]HWKHRXWVWDQGLQJLVVXHVWKDWKDG

EHHQGLVFXVVHGUHJDUGLQJWKHSULYLOHJHORJDQGUHGDFWLRQV1RYOHWWHUIURP%7DQWLOOR








 Case1:15-cv-00293-LTS-JCF
Case 1:15-cv-00293-LTS-JCF Document
Document200-12
147 Filed
Filed02/28/17
06/29/17 Page
Page2123ofof2628

WR&3LVWLOOL([WR%7DQWLOOR'HFODUDWLRQ,QDGGLWLRQWRWKHLVVXHVZLWKWKHSULYLOHJHORJ

3ODLQWLIIV¶ FRXQVHO QRWHG IRU 'HIHQGDQWV¶ FRXQVHO WKH FRQFHUQ WKDW ³FHUWDLQ UHGDFWLRQV GLG QRW

DSSHDUWRUHODWHWRLVVXHVRISULYLOHJHEXWUDWKHUZKHWKHUWKHGRFXPHQWPD\EHFRQVLGHUHGGDPDJLQJ

WR 'HIHQGDQWV´  1RY   OHWWHU IURP % 7DQWLOOR WR & 3LVWLOOL ([  WR % 7DQWLOOR

'HFODUDWLRQ

%DVHGXSRQ3ODLQWLIIV¶UHYLHZRIWKHGRFXPHQWVSURGXFHGWRGDWHE\'HIHQGDQWVDVHDUFK

IRUHYHU\%DWHVQXPEHUHGGRFXPHQWFRQWDLQLQJWKHZRUG³UHGDFWHG´SURGXFHGE\WKH'HIHQGDQWV

UHYHDOHGDWRWDORIUHGDFWHGGRFXPHQWVZLWKDSSUR[LPDWHO\ILYHSDJHVSHUGRFXPHQWDQGILYH

UHGDFWLRQVSHUGRFXPHQW7KHUHIRUHLWLVHVWLPDWHGWKDW'HIHQGDQWVKDYHPDGHUHGDFWLRQV

IURPFXVWRGLDQVZKLFKDUHRQO\EHLQJVHDUFKHGIRUDQH[WUHPHO\OLPLWHGVHWRIVHDUFKWHUPV

2Q1RYHPEHU'HIHQGDQWV¶FRXQVHOLQIRUPHG3ODLQWLIIV¶FRXQVHOE\OHWWHUWKDWWKH

SULYLOHJHORJIRUWKHILUVWURXQGRISURGXFWLRQZRXOGEHSURGXFHGWKDWZHHNDQGDVXSSOHPHQWDO

SULYLOHJHORJ³FRYHULQJPRUHUHFHQWO\SURGXFHGGRFXPHQWVDIWHU&KDVH¶VSURGXFWLRQRIGRFXPHQWV

LVVXEVWDQWLDOO\FRPSOHWH´1RYOHWWHUIURP&3LVWLOOLWR%7DQWLOORDW,,([WR%

7DQWLOOR 'HFODUDWLRQ  3ODLQWLIIV¶ FRXQVHO DVNHG DJDLQ DERXW WKH VWDWXV RI WKLV SULYLOHJH ORJ RQ

'HFHPEHU'HFOHWWHUIURP%7DQWLOORWR&3LVWLOOLDW([WR%7DQWLOOR

'HFODUDWLRQ

7KHQRQ'HFHPEHU3ODLQWLIIV¶FRXQVHOLQIRUPHG'HIHQGDQWV¶FRXQVHORIQXPHURXV

GHILFLHQFLHVLQWKHILUVWSULYLOHJHORJ7KHVHGHILFLHQFLHVLQFOXGHGWKHIROORZLQJ

 GRFXPHQWVPLVVLQJD³WR´ILHOG³IURP´ILHOGRUERWK
 RIGRFXPHQWVWKDWZHUHZLWKKHOGZHUHQRWEDWHVVWDPSHG3ODLQWLIIV¶FRXQVHO
VSHFLILFDOO\UHTXHVWHGLQWKLVOHWWHUWKDWDOOZLWKKHOGGRFXPHQWVEHEDWHVVWDPSHGWR
HQVXUHWKHLQWHJULW\RIWKHGRFXPHQWSURGXFWLRQ








 Case1:15-cv-00293-LTS-JCF
Case 1:15-cv-00293-LTS-JCF Document
Document200-12
147 Filed
Filed02/28/17
06/29/17 Page
Page2224ofof2628

 GRFXPHQWVSXUSRUWHGO\ZLWKKHOGRQWKHEDVLV³VXVSLFLRXVDFWLYLW\UHSRUW´3ODLQWLIIV¶
FRXQVHOUHTXHVWHGLQIRUPDWLRQUHJDUGLQJWKLVDVVHUWHGSULYLOHJHDSULYLOHJHZKLFK LV
QRWXQTXDOLILHG
 7KHQDPHVRIWKHDWWRUQH\VLQYROYHGLQDQ\GRFXPHQWUHIHUHQFHGE\'HIHQGDQWVWREH
DFRPPXQLFDWLRQZLWKFRXQVHORUWKHVHHNLQJRUSURYLGLQJRIOHJDODGYLFHZKHUHWKHUH
ZDVQRFOHDUGHVLJQDWLRQWKDWWKHGRFXPHQWZDV³WR´RU³IURP´DQDWWRUQH\
 )RU  GRFXPHQWV SXUSRUWHGO\ ZLWKKHOG RQ WKH EDVLV ³FRQILGHQWLDO VXSHUYLVRU\
LQIRUPDWLRQ´ WKH LGHQWLILFDWLRQ RI WKH VXSHUYLVRU DQG WKH OHJDO DXWKRULW\ IRU WKH
DVVHUWLRQRIWKLVSULYLOHJH
 GRFXPHQWGHVFULEHGDVDFRPPXQLFDWLRQZLWKWKH86'HSDUWPHQWRI-XVWLFHEHWZHHQ
5REHUW:LFNDQG$86$%ULDQ+XGDNDQG&RXQVHOWRWKH$VVLVWDQW$WWRUQH\*HQHUDO
:LOOLDP(GJDU 3ODLQWLII¶V FRXQVHO UHPLQGHG 'HIHQGDQWV¶ FRXQVHOWKDWWKHSULYLOHJH
SURWHFWLQJFRPPXQLFDWLRQVZLWKJRYHUQPHQWUHJXODWRUVLVQRWXQTXDOLILHGDQGPXVWEH
VXEVWDQWLDWHGDQG
 $VSUHDGVKHHWRIGRFXPHQWVIURP'HIHQGDQWV¶1RYHPEHUSURGXFWLRQ
ZKLFKZHUHZLWKKHOGRQWKHEDVLVRISULYLOHJHEXWZKLFKZHUHQRWLGHQWLILHGRQDQ\
SULYLOHJHORJ'HFOHWWHUIURP%7DQWLOORWR&3LVWLOOL([WR%7DQWLOOR
'HFODUDWLRQ

2Q'HFHPEHU'HIHQGDQWV¶FRXQVHOUHVSRQGHGWRWKHOLVWRIGHILFLHQFLHV6HH([

WR%7DQWLOOR'HFODUDWLRQ$VWRWKHGRFXPHQWVODFNLQJD%DWHVVWDPS'HIHQGDQWVWDNHVWKH

SRVLWLRQWKDWLWLVQRWUHTXLUHGWR%DWHVVWDPSWKRVHGRFXPHQWV'HIHQGDQWV¶SRVLWLRQLVZURQJ

6HH'RXJODVY9LFWRU&DSLWDO*URXS:/1R&LYDW 6'1<1RY

³1XPEHUVWDPSLQJGRFXPHQWSURGXFWLRQVVKRXOGEHGRQHLQDOOFDVHV´

$VWRWKHGRFXPHQWVZLWKKHOGDV6$5V'HIHQGDQWV¶FRXQVHOUHSUHVHQWHGWKDWLWZDVUH

UHYLHZLQJWKRVHGRFXPHQWVWRGHWHUPLQHLIDQ\VKRXOGEHSURGXFHG3ODLQWLII¶VFRXQVHOZRXOG

KDYHWKRXJKW'HIHQGDQWVZRXOGKDYHPDGHVXFKDUHYLHZSULRUWRLGHQWLI\LQJWKHPDVVRSULYLOHJHG

RQWKHLQLWLDOSULYLOHJHORJZKLFKFDXVHV3ODLQWLIIVWRZRQGHUZKDWHIIRUWKDVJRQHLQWRDVVHUWLQJD

SULYLOHJHIRUDQ\RIWKHGRFXPHQWV

$VWRWKHGRFXPHQWVWKDWZHUHZLWKKHOGEXWQRWLGHQWLILHGRQWKHLQLWLDOSULYLOHJHORJ

'HIHQGDQWV¶VWDQGDUGDQVZHUFRQWLQXHVWREHWKHVDPHQDPHO\WKH\ZLOOSURGXFHDSULYLOHJHORJ








 Case1:15-cv-00293-LTS-JCF
Case 1:15-cv-00293-LTS-JCF Document
Document200-12
147 Filed
Filed02/28/17
06/29/17 Page
Page2325ofof2628

³VKRUWO\DIWHULWVXEVWDQWLDOO\FRPSOHWHVWKRVHSURGXFWLRQV´,QIDFWDVRI'HIHQGDQWV¶FRXQVHO¶V

)HEFRUUHVSRQGHQFHWR3ODLQWLIIV¶FRXQVHO'HIHQGDQWVFRQWLQXHWRWDNHWKHSRVLWLRQWKDW

³>D@VUHSHDWHGO\H[SODLQHG&KDVHLVLQWKHSURFHVVRISUHSDULQJLWVVXSSOHPHQWDOSULYLOHJHORJ

DQGH[SHFWVWRSURGXFHWKHORJWKLVPRQWK´)HEOHWWHUIURP&3LVWLOOLWR%7DQWLOOR([

WR%7DQWLOOR'HFODUDWLRQ

'HIHQGDQWV¶FRXQVHOLVLJQRULQJLWVREOLJDWLRQVXQGHUWKHODZRIWKH6RXWKHUQ'LVWULFWRI

1HZ<RUNDVZHOODVWKH/RFDO5XOHV/RFDO&LYLO5XOHESURYLGHVDVIROORZV

E:KHUHDFODLPRISULYLOHJHLVDVVHUWHGLQUHVSRQVHWRGLVFRYHU\RUGLVFORVXUH
RWKHUWKDQDGHSRVLWLRQDQGLQIRUPDWLRQLVQRWSURYLGHGRQWKHEDVLVRIVXFKDVVHUWLRQ
WKHLQIRUPDWLRQVHWIRUWKLQSDUDJUDSKDDERYHVKDOOEHIXUQLVKHGLQZULWLQJDWWKHWLPH
RIWKHUHVSRQVHWRVXFKGLVFRYHU\RUGLVFORVXUHXQOHVVRWKHUZLVHRUGHUHGE\WKH&RXUW

+HUH3ODLQWLIIVKDYHQHYHUDJUHHGWRWKLVRSHQHQGHGIXUQLVKLQJRIDSULYLOHJHORJ7KH

ODWHVWWKDW3ODLQWLIIVH[SHFWHGDSULYLOHJHORJIURP'HIHQGDQWVZDV'HFHPEHUWKZKLFK

GDWHKDVFRPHDQGJRQHDQG'HIHQGDQWVWUHDWDVWKRXJKLWZDVQRWDSSOLFDEOHWRWKHP'HIHQGDQWV

VKRXOGEHRUGHUHGWRSURGXFHLPPHGLDWHO\DFRPSOHWHSULYLOHJHORJDVWRDOOGRFXPHQWVZLWKKHOG

RUUHGDFWHGRUEHGHHPHGDVKDYLQJZDLYHGWKHLUULJKWWRDVVHUWDSULYLOHJHQRWKDYLQJSURGXFHGD

SURSHUSULYLOHJHORJLQFRQIRUPLW\ZLWKWKH/RFDO5XOH6HHDOVR6(&Y<RUNYLOOH$GYLVRUV//&

)5'6'1<FRXUWKHOGWKDW6(&¶VIDLOXUHWRSURYLGHDGHTXDWHSULYLOHJHORJLQ

WLPHO\PDQQHUUHVXOWHGLQZDLYHURIDQ\DSSOLFDEOHSULYLOHJHVDQGUHYLVHGSULYLOHJHORJGLGQRW

RYHUFRPHLQVXIILFLHQFLHVLQLQLWLDOSULYLOHJHORJ


& 'HIHQGDQWV+DYH)DLOHGWR,GHQWLI\D5XOHE:LWQHVVDV5HTXLUHG%\7KH
-XO\2UGHU

,QLWV-XO\2UGHUWKH&RXUWDOVRDGGUHVVHGWKHQHHGIRUD5XOHEZLWQHVV








 Case1:15-cv-00293-LTS-JCF
Case 1:15-cv-00293-LTS-JCF Document
Document200-12
147 Filed
Filed02/28/17
06/29/17 Page
Page2426ofof2628

:KLOHQRWIRUHFORVLQJWKHSRVVLELOLW\RIWKHQHHGIRUD5XOHEZLWQHVVIRURWKHUWRSLFVWKH

&RXUWVSHFLILFDOO\QRWHGWKDW

³WKHGHIHQGDQWVKDYHRIIHUHGD5XOHEZLWQHVVWRWHVWLI\RQVRPHVXEMHFWVUHOHYDQW
WRWKHSODLQWLIIV¶FRQFHUQVWKHJHQHUDOUHWHQWLRQSROLFLHVDSSOLFDEOHWRWKHGHIHQGDQWV¶
PRUWJDJHOHQGLQJDQGGHEWVDOHEXVLQHVVWKHGRFXPHQWUHWULHYDOSURFHGXUHVXVHGLQWKLV
FDVH DQG  WKH ORFDWLRQ VWRUDJH DQG PDLQWHQDQFH RI D FRPPXQLFDWLRQV ZLWK RU
UHJDUGLQJWKHSODLQWLIIVDQGEFRPPXQLFDWLRQVDQGGRFXPHQWVRUGDWDUHODWLQJWRORDQV
VROGRURIIHUHGWRWKHSODLQWLIIV´-XO\2UGHUDW'(1R

7KH&RXUWQRWHGWKHYDOXHRIWKLVZLWQHVVLQLWV-XO\2UGHUVWDWLQJWKDW³>Z@KHQ

WKLV DGGLWLRQDO LQIRUPDWLRQ LV SURGXFHG DORQJ ZLWK WKH GHIHQGDQWV¶ UHVSRQVLYH GRFXPHQWV WKH

SODLQWLIIVVKRXOGEHDEOHWREHWWHUDVVHVVWKHOLNHOLKRRGWKDWRWKHUGDWDEDVHVZRXOGLQFOXGHUHOHYDQW

GDWD´-XO\2UGHUDW'(1R

2Q 1RYHPEHU   FRXQVHO IRU 3ODLQWLIIV ZURWH WR FRXQVHO IRU 'HIHQGDQWV DVNLQJ

FRXQVHOLQSDUDJUDSKRIWKHOHWWHUWRGRWKHIROORZLQJ

3OHDVHLGHQWLI\E\QDPHDGGUHVVWLWOHDQGKLVWRU\RIHPSOR\PHQWZLWKGHIHQGDQWV
WKH5XOHEZLWQHVVRIIHUHGE\GHIHQGDQWVLQ\RXUHPDLOGDWHG-XQH
ZKRLVSUHSDUHGWRWHVWLI\WRWKHWRSLFVOLVWHGWKHUHLQLQFOXGLQJWKHVSHFLILFDUHDVVHW
IRUWKE\WKH0DJLVWUDWHDWSDJHRIKLV0HPRUDQGXPDQG2UGHUDQGSURSRVHG
GDWHVDQGORFDWLRQIRUVXFKGHSRVLWLRQ1RY/HWWHUIURP%7DQWLOOR
WR&3LVWLOOL([WR%7DQWLOOR'HFODUDWLRQ

 ,QDVHULHVRIOHWWHUVDQGHPDLOVEHWZHHQFRXQVHOIRU3ODLQWLIIVDQG'HIHQGDQWVWKDWKDYH

IROORZHG WKLV1RYHPEHU FRPPXQLFDWLRQ3ODLQWLIIVKDYH \HWWR UHFHLYHWKHQDPH RI D

VLQJOH SHUVRQ WR VSHDN RQ EHKDOI RI 'HIHQGDQWV RQ DQ\ RI WKRVH WRSLFV GHVSLWH WKH UHSHDWHG

DVVXUDQFHVDQGDFNQRZOHGJHPHQWRI'HIHQGDQWV¶REOLJDWLRQWRGRVR,QVWHDG'HIHQGDQWVKDYH

IRFXVHGWKHLUHQWLUHWLPHDQGHIIRUWLQWKHRQJRLQJFRPPXQLFDWLRQVWRJHW3ODLQWLIIVWRDJUHHWR

ZLWKGUDZZLWKSUHMXGLFHWKHRSWLRQWRQRWLFHD5XOHEGHSRVLWLRQDWDODWHUGDWHRQRWKHU

WRSLFV6HH'HFOHWWHUIURP&3LVWLOOLWR%7DQWLOORDW6HFWLRQ,9([WR%7DQWLOOR








 Case1:15-cv-00293-LTS-JCF
Case 1:15-cv-00293-LTS-JCF Document
Document200-12
147 Filed
Filed02/28/17
06/29/17 Page
Page2527ofof2628

'HFODUDWLRQ 'HF   OHWWHU IURP % 7DQWLOOR WR & 3LVWLOOL DW  ([  WR % 7DQWLOOR

'HFODUDWLRQ 'HF   OHWWHU IURP & 3LVWLOOL WR % 7DQWLOOR DW  ([  WR % 7DQWLOOR

'HFODUDWLRQ 'HF   OHWWHU IURP % 7DQWLOOR WR & 3LVWLOOL DW  ([  WR % 7DQWLOOR

'HFODUDWLRQ 1RY   OHWWHU IURP % 7DQWLOOR WR & 3LVWLOOL DW  ([  WR % 7DQWLOOR

'HFODUDWLRQ

3ODLQWLIIVDUHQRWOHJDOO\REOLJDWHGWRDJUHHWRWKHFRQGLWLRQ'HIHQGDQWVKDYHLQVLVWHGXSRQ

DVDSUHUHTXLVLWHWRUHFHLYLQJWKHUHTXHVWHGLQIRUPDWLRQDERXWWKH5XOHEGHSRVLWLRQZLWQHVV

HLWKHUE\WKHWHUPVRIWKH-XO\2UGHURUDQ\RWKHUDSSOLFDEOHODZ7KHUHIRUH3ODLQWLIIV

PRYH 'HIHQGDQWV WR DELGH E\ WKH -XO\   2UGHU DQG SURYLGH WKH UHTXHVWHG LGHQWLI\LQJ

LQIRUPDWLRQDERXWWKH5XOHEZLWQHVV

5(48(67('5(/,()

7KHUHIRUHIRUWKHIRUHJRLQJUHDVRQVDQGWRHQVXUHWKDWQRIXUWKHULUUHSDUDEOHLQMXU\LV

VXIIHUHGE\3ODLQWLIIVSXUVXDQWWR5XOHRIWKH)HG5&LY33ODLQWLIIV056VW)LGHOLW\

DQG6 $PRYHWKLV+RQRUDEOH&RXUWIRUDQ2UGHU

D &RPSHOOLQJ 'HIHQGDQWV WR SURGXFH DOO GRFXPHQWV UHVSRQVLYH WR WKH

5HTXHVWVIRU3URGXFWLRQLQFOXGLQJDOO5HTXHVWVVSHFLILFDOO\UHIHUHQFHGLQWKH-XO\

2UGHU

E&RPSHOOLQJ'HIHQGDQWVWRSURGXFHDFRPSOHWHSULYLOHJHORJIRUDOOZLWKKHOG

GRFXPHQWVLPPHGLDWHO\RUEHGHHPHGWRKDYHZDLYHGWKHLUFODLPRISULYLOHJHDQG

F &RPSHOOLQJ'HIHQGDQWVWRVSHFLILFDOO\LGHQWLI\WKH5XOHEZLWQHVVWR

EHPDGHDYDLODEOHIRUGHSRVLWLRQWRWHVWLI\RQWKHWRSLFVVHWIRUWKRQSDJHRIWKH-XO\

2UGHU







 Case1:15-cv-00293-LTS-JCF
Case 1:15-cv-00293-LTS-JCF Document
Document200-12
147 Filed
Filed02/28/17
06/29/17 Page
Page2628ofof2628

'DWHG1HZ<RUN1HZ<RUN   5HVSHFWIXOO\VXEPLWWHG
)HEUXDU\   
%\V%UHQW7DQWLOOR
%UHQW7DQWLOOR
7DQWLOOR/DZ3//&
       &KXUFK6WUHHW
WK)ORRU
       1HZ<RUN1<


$WWRUQH\IRU3ODLQWLIIV