Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 1 of 132 Page ID #:1 $1'(5621 <(+ 3& (GZDUG 0 $QGHUVRQ 67$7( %$5 12 5HJLQD i.e. 38%/,&,6 DV WKDW GHILQHG WHUP LV XVHG LQ WKLV &RPSODLQW@ WR VLJQ DQ\ GRFXPHQW UHODWHG WR WKH Blade Runner 2049 SURMHFW RQ EHKDOI RI 3HXJHRW >ˆ@ )RU WKLV SXUSRVH WKRVH SHUVRQV PD\ VLJQ IRU 3HXJHRW RQ LWV EHKDOI DQ\ IRUP RI GRFXPHQW UHTXLUHG 7KH\ PD\ DOVR UHTXLUH DQ\ QHFHVVDU\ GRFXPHQWV IRU 3HXJHRW ´ ,QGHHG 0(1'(= VLJQHG DQG WUDQVPLWWHG WKH ³'HOHJDWLRQ RI 6LJQDWXUH $XWKRULW\´ GRFXPHQW twice. 7KH ILUVW YHUVLRQ RI WKH FRQILUPDWLRQ RI 38%/,&,6 VLJQDWXUH DXWKRULW\ VLJQHG E\ 0(1'(= ZDV GDWHG HIIHFWLYH DV RI 'HFHPEHU 7KH SDUWLHV DOO FRQVLGHUHG WKHLU IXQGDPHQWDO GHDO DV KDYLQJ EHHQ PDGH QR ODWHU WKDQ $XJXVW 7KXV $/&21 DQG &70* H[SUHVVO\ UHTXHVWHG WKDW 0(1'(= UH VLJQ WKH HIIHFWLYH GDWH RI WKH ³'HOHJDWLRQ RI 6LJQDWXUH $XWKRULW\´ WR JR EDFN DV HDUO\ DV $XJXVW DQG H[SUHVVO\ EHFDXVH WKDW ZDV DERXW WKH WLPH WKDW $/&21 DQG 3(8*(27 KDG UHDFKHG DJUHHPHQW RQ PDWHULDO WHUPV 0(1'(= FRPSOLHG ZLWK $/&21 DQG &70*¶6 UHTXHVW DQG H[HFXWHG WKH ³'HOHJDWLRQ RI 6LJQDWXUH $XWKRULW\´ D VHFRQG WLPH ZLWK WKH $XJXVW HIIHFWLYH GDWH 38%/,&,6 DQG RU 3(8*(27 FDXVHG LW WR EH WUDQVPLWWHG WR $/&21 DQG &70* DQG $/&21 UHFHLYHG LW LQ &DOLIRUQLD DV XQGHUVWRRG DQG LQWHQGHG E\ 38%/,&,6 3(8*(27 DQG 0(1'(= RQ RU DERXW )HEUXDU\ $V GHVFULEHG LQ GHWDLO LQ VXEVHTXHQW SDUDJUDSKV GHVSLWH 0(1'(=¶6 FOHDU VLJQDWXUH WZLFH RQ WKH ³'HOHJDWLRQ RI 6LJQDWXUH $XWKRULW\´ GRFXPHQWV 0(1'(= DQG 3(8*(27 XOWLPDWHO\ GHQLHG LQ EDG IDLWK XQGHU DW OHDVW RQH IDFWXDO DOWHUQDWLYH WKDW 38%/,&,6 KDG EHHQ DXWKRUL]HG WR QHJRWLDWH RQ EHKDOI RI 3(8*(27 RU KDG H[FHHGHG LWV DXWKRULW\ 3(8*(27 DQG 0(1'(= IXUWKHU &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 55 of 132 Page ID #:55 DVVHUWHG WKDW WKH\ KDG QHYHU EHFRPH REOLJDWHG WR $/&21 RU 6RQ\ XQGHU DQ\ FRQWUDFWXDO RU RWKHU GXW\ RI DQ\ NLQG ZLWK UHVSHFW WR DQ\ FR SURPRWLRQ DQG GLG QRW HYHQ NQRZ VXFK GLVFXVVLRQV ZHUH HYHQ RFFXUULQJ GHVSLWH 0(1'(=¶6 SHUVRQDO SK\VLFDO SUHVHQFH DQG SDUWLFLSDWLRQ LQ IRU H[DPSOH WKH -DQXDU\ FR SURPRWLRQ NLFNRII PHHWLQJ $V GHVFULEHG LQ IXUWKHU GHWDLO LQ VXEVHTXHQW VHFWLRQV RI WKLV &RPSODLQW HYHQ WKRXJK 3(8*(27 KDG H[SUHVVO\ LQGXFHG $/&21 WR VWRS FRQVLGHULQJ RWKHU ELGGHUV E\ VSHFLILFDOO\ VZHHWHQLQJ 3(8*(27¶6 RZQ ELG ZLWK DQ ³XS WR PLOOLRQ FR SURPRWLRQ ´ DQG HYHQ WKRXJK 0(1'(= KDG VLJQHG WKH VLJQDWXUH GHOHJDWLRQ GRFXPHQWV WZLFH DQG HYHQ WKRXJK 0(1'(= KHUVHOI KDG SHUVRQDOO\ FRPPXQLFDWHG ZLWK ERWK $/&21 DQG &70* DQG KHUVHOI DIILUPHG WKDW WKH GHDO ZDV IRU ERWK D SODFHPHQW DQG D FR SURPRWLRQ DQG HYHQ WKRXJK 0(1'(= KHUVHOI SHUVRQDOO\ DWWHQGHG DQG SDUWLFLSDWHG DW $/&21¶6 /RV $QJHOHV RIILFHV LQ WKH FR SURPRWLRQ ³NLFNRII´ PHHWLQJ 0(1'(= QRQHWKHOHVV XOWLPDWHO\ IODWO\ UHIXVHG WR KDYH DQ\ 3(8*(27 H[HFXWLYH VLJQ any YHUVLRQ RI WKH PXOWLSOH ZULWWHQ GUDIWV WKDW WKH SDUWLHV¶ H[FKDQJHG RI D PRUH IRUPDO ZULWWHQ DJUHHPHQW GRFXPHQWLQJ WKH FR SURPRWLRQ DQG DPD]LQJO\ 0(1'(= HYHQ VHQW HPDLOV GHQ\LQJ WKDW VKH RU 3(8*(27 KDG HYHU DJUHHG WR DQ\ FR SURPRWLRQ DQG IXUWKHU GHQLHG WKDW 3(8*(27 had even ever discussed one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ase 2:19-cv-00245 Document 1 Filed 01/10/19 Page 56 of 132 Page ID #:56 .¶V VSLQQHU E 2QFH WKH . 6SLQQHU EDGJLQJ DQG IHDWXUH GHVLJQV ZHUH DSSURYHG E\ 3(8*(27 WKH\ ZRXOG EH ORFNHG DQG 3(8*(27 ZRXOG QRW EH DEOH WR FKDQJH RU GLVDSSURYH WKHP ODWHU DQG WKH EDGJLQJ DQG IHDWXUH GHVLJQV ZHUH DFWXDOO\ DSSURYHG E\ 3(8*(27 QR ODWHU WKDQ -DQXDU\ F 7KH ILQLVKHG %5 ILOP ZRXOG LQFOXGH DW OHDVW WHQ VHFRQGV RI IRRWDJH LQ ZKLFK 3(8*(27¶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± $/&21 DQG &70* H[SUHVVO\ GHFOLQHG WR EH ERXQG E\ PHDVXULQJ WLPLQJ E\ VLQJOH VKRWV EXW UDWKHU ZRXOG RQO\ DJUHH WR ³VHTXHQFHV´ RU ³VFHQHV´ PHDQLQJ DJJUHJDWLRQV RI UHODWHG VKRWV H 7KH DW OHDVW WHQ VHFRQGV RI IRRWDJH ZDV WR EH DSSRUWLRQHG DFURVV WZR W\SHV RI VHTXHQFHV EDGJLQJ RQ .¶V VSLQQHU DQG DW OHDVW RQH VHTXHQFH ZKHUH WKH 3HXJHRW ORJR ZRXOG DSSHDU LQ WKH %5 ZRUOG VXFK DV LQ DQ RXWGRRU DGYHUWLVHPHQW LQ WKH EDFNJURXQG I 2I WKH WZR W\SHV RI VHTXHQFHV WKH . VSLQQHU EDGJLQJ VHTXHQFHV ZHUH PRUH LPSRUWDQW WR 3(8*(27 DQG WKH RXWGRRU ZDOO DG VHTXHQFHV RU ³KRORJUDSKLF DGYHUWLVHPHQWV´ ZHUH RI VHFRQGDU\ LPSRUWDQFH LQFOXGLQJ PHDQLQJ WKDW RI WKH WHQ VHFRQGV PRUH RI WKH WLPH ZRXOG JR WR WKH . VSLQQHU EDGJLQJ VHTXHQFHV J $W OHDVW RQH PXWXDOO\ DFFHSWDEOH DOORFDWLRQ RI WKH WHQ VHFRQGV ZDV &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 57 of 132 Page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¶6 FRPPHUFLDOO\ UHDVRQDEOH DQG JRRG IDLWK UHYLHZ DQG DSSURYDO ZKLFK ZDV WR EH SURPSW DQG ZLWKLQ WKH FUHDWLYH DQG DUWLVWLF SDUDPHWHUV RI WKH ILOP ZKLFK ZHUH XQGHUVWRRG QRW WR EH LQ 3(8*(27¶6 SXUYLHZ 3(8*(27¶6 UHYLHZ DQG DSSURYDO ZDV WR EH FRQGXFWHG E\ 3(8*(27 ZLWKRXW XQUHDVRQDEOH GLVUXSWLRQ RI WKH ILOP¶V VFKHGXOH LQFOXGLQJ 3LFWXUH /RFN )LOP 'HOLYHU\ DQG 5HOHDVH 'DWH DQG DOVR HDUO\ HQRXJK VXFK WKDW WKH FR SURPRWLRQ FRXOG EH SODQQHG DQG H[HFXWHG L 7KH 3HXJHRW VSLQQHU EDGJLQJ ZRXOG EH DVVRFLDWHG ZLWK 5\DQ *RVOLQJ¶V FKDUDFWHU . M 5\DQ *RVOLQJ¶V FKDUDFWHU . ZRXOG QRW EH DVVRFLDWHG ZLWK DQ\ ULYDO DXWRPRELOH EUDQG N 7KH 3HXJHRW EUDQG ZRXOG QRW EH SUHVHQWHG LQ D SHUMRUDWLYH FRQWH[W 3(8*(27 DFNQRZOHGJHG WKDW LW KDG UHYLHZHG WKH %5 VFULSW DQG NQHZ XQGHUVWRRG DQG DJUHHG WKDW WKH %5 LQYROYHG RQH RU PRUH FUDVKHV RI .¶V VSLQQHU DQG WKDW WKHVH FUDVKHV ZHUH DJUHHG DV QRW YLRODWLYH RI DQ\ WHUP RI WKH SDUWLHV¶ DJUHHPHQW O ,I XSRQ UHYLHZ 3(8*(27 ZDV QRW UHDVRQDEO\ DQG LQ JRRG IDLWK VDWLVILHG ZLWK D SURSRVHG H[HFXWLRQ RI WKH IRRWDJH SODFHPHQW WKHQ 3(8*(27 ZDV WR HQJDJH ZLWK $/&21 UHDVRQDEO\ DQG LQ JRRG IDLWK &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 58 of 132 Page ID #:58 RQ FKDQJHV RU HQKDQFHPHQWV VXFK WKDW 3(8*(27 ZRXOG EH DEOH WR JLYH LWV UHDVRQDEOH DQG JRRG IDLWK DSSURYDO DOVR DJDLQ ZLWKLQ WKH FUHDWLYH DQG DUWLVWLF SDUDPHWHUV RI WKH ILOP DQG ZKLFK ZDV WR EH FRQGXFWHG E\ 3(8*(27 ZLWKRXW XQUHDVRQDEOH GLVUXSWLRQ RI WKH ILOP¶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¶6 ZULWWHQ FRQILUPDWLRQ WR &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 59 of 132 Page ID #:59 3(8*(27 WKDW WKH SODFHPHQWV ZRXOG EH LQ WKH ILQDO 3LFWXUH ± ZKLOH WKH SODFHPHQW IHH FRXOG EH SDLG E\ 3(8*(27 DIWHU UHOHDVH RI WKH 3LFWXUH LW ZDV HDUQHG E\ $/&21 DQG RZHG E\ 3(8*(27 HDUOLHU RQ $/&21¶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³$7/´ 6SHQG DQG PLOOLRQ LQ %HORZ 7KH /LQH ³%7/´ 6SHQG ZLWK LW XQGHUVWRRG DQG DJUHHG WKDW WKH $7/ DQG %7/ GHILQLWLRQV ZHUH WKH DGYHUWLVLQJ LQGXVWU\ VWDQGDUG GHILQLWLRQV RI WKHVH WHUPV ± YHU\ JHQHUDOO\ $7/ 6SHQG UHIHUV WR PHGLD WKDW PDVV WDUJHWV ODUJH DXGLHQFHV OLNH WHOHYLVLRQ DQG UDGLR DQG PDQ\ IRUPV RI ,QWHUQHW PHGLD %7/ 6SHQG UHIHUV WR PHGLD WKDW PRUH VSHFLILFDOO\ WDUJHWV D OLPLWHG VHW RI FRQVXPHUV OLNH IO\HUV GLVWULEXWHG IURP D SDUWLFXODU UHWDLO VWRUH RU PRVW IRUPV RI HYHQW PDUNHWLQJ OLNH D IDQ FRQYHQWLRQ RU DXWR VKRZ X $/&21 KDG D UHYLHZ DQG DSSURYDO ULJKW RYHU WKH FR SURPRWLRQ¶V VSHFLILF H[HFXWLRQV RQ D FDVH E\ FDVH EDVLV &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 60 of 132 Page ID #:60 Y 7KH FR SURPRWLRQ ZDV WR LQFOXGH D GHGLFDWHG SUHVHQFH RQ 3(8*(27¶6 ZHEVLWH ZZZ SHXJHRW IU Z 3(8*(27 ZDV REOLJDWHG WR FUHDWH DQG WKH FR SURPRWLRQ ZDV WR LQFOXGH DW OHDVW RQH WKLUW\ VHFRQG WHOHYLVLRQ VSRW XQOHVV *RVOLQJ UHIXVHG WR DSSURYH XVH RI KLV OLNHQHVV LQ WKH VSRW LQ ZKLFK FDVH 3(8*(27 ZDV UHOLHYHG RI WKH WHOHYLVLRQ VSRW REOLJDWLRQ EXW QRW RI WKH HQWLUH FR SURPRWLRQ *RVOLQJ DJUHHG LQ SULQFLSDO WR SRWHQWLDO XVH RI KLV OLNHQHVV LQ D WHOHYLVLRQ VSRW IRU 3(8*(27 DQG 3(8*(27 QHYHU VRXJKW *RVOLQJ¶V UHYLHZ RU DSSURYDO RI DQ\ SURSRVHG VSRW LQFOXGLQJ EHFDXVH 3(8*(27 QHYHU FUHDWHG RQH [ 3(8*(27 ZDV WR FUHDWH DQG SURGXFH %HORZ 7KH /LQH VSHQG VSRWV \ 3(8*(27 ZDV WR FUHDWH DQG LVVXH D SUHVV UHOHDVH WR WKH PHGLD UHJDUGLQJ WKH FR SURPRWLRQ February 2017 to May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ase 2:19-cv-00245 Document 1 Filed 01/10/19 Page 61 of 132 Page ID #:61 WKH IXQGDPHQWDO GHDO RU 38%/,&,6¶6 DQG 3(8*(27¶6 SULQFLSDO DJHQW UHODWLRQVKLS EXW DW PRVW DQ LVVXH DERXW ZKDW OHYHO RI UHYLHZ RI VSHFLILF GUDIWV ZDV DSSURSULDWH LQWHUQDOO\ DV EHWZHHQ 38%/,&,6 DQG 3(8*(27 +RZHYHU DIWHU VRPH EDFN DQG IRUWK 38%/,&,6 DJUHHG WR REWDLQ 3(8*(27¶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ase 2:19-cv-00245 Document 1 Filed 01/10/19 Page 62 of 132 Page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¶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¶6 LQWHUQDO OHJDO WHDP DERXW ZKDW WKH\ PLJKW EH $/&21 DQG &70* PDUNHWLQJ H[HFXWLYHV FRQWLQXHG WR FRPPXQLFDWH ZLWK 3(8*(27 DERXW YDULRXV VSHFLILF FR SURPRWLRQDO RSSRUWXQLWLHV LQFOXGLQJ RSSRUWXQLWLHV WKDW 3(8*(27 FRXOG WDNH DGYDQWDJH RI LW ZDQWHG WR GR VR )RU &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 63 of 132 Page ID #:63 H[DPSOH RQ RU DURXQG 0DUFK $/&21 DQG &70* H[HFXWLYHV LQTXLUHG DERXW ZKDW 3(8*(27 ZDQWHG WR GR DERXW LWV EUDQGLQJ LQ FRQQHFWLRQ ZLWK FRQVXPHU SURGXFWV PRGHOV RI .¶V VSLQQHU ± ZKHWKHU 3(8*(27 ZDQWHG WR KDYH LWV EUDQGLQJ RQ WKHP RU QRW ,Q WKHVH FRPPXQLFDWLRQV DQG VLPLODU VXFK FRPPXQLFDWLRQV FRQWLQXLQJ WKURXJK DW OHDVW 0DUFK DQG HYHQ DIWHUZDUG 3(8*(27 QHYHU FRPPXQLFDWHG WR $/&21 WKDW WKH GHDO ZDV RII RU KDG QHYHU EHHQ PDGH RU GLG QRW LQFOXGH D FR SURPRWLRQ 2Q RU DERXW $SULO DOPRVW WKUHH PRQWKV DIWHU 0RQWURQ¶V VLJQDWXUH RQ WKH -DQXDU\ ZULWLQJ 38%/,&,6¶6 LQWHUQDO OHJDO WHDP HPDLOHG D SURSRVHG UHYLVHG GUDIW WR $/&21 DQG &70* H[HFXWLYHV LQ &DOLIRUQLD ZLWK 38%/,&,6¶6 DQG 3(8*(27¶6 UHTXHVWHG DGGLWLRQDO FRPPHQWV 38%/,&,6 UHSUHVHQWHG E\ LWV H[SUHVV VWDWHPHQWV DQG LPSOLHG FRQGXFW WKDW WKH $SULO GUDIW KDG QRZ ZLWK IXOO FHUWDLQW\ EHHQ UHYLHZHG GLUHFWO\ E\ 3(8*(27 DQG DSSURYHG E\ 3(8*(27 3/$,17,)) LV LQIRUPHG DQG EHOLHYHV DQG RQ WKDW EDVLV DOOHJHV WKDW WKH $SULO GUDIW IURP 38%/,&,6¶6 LQWHUQDO OHJDO WHDP ZDV LQ IDFW UHYLHZHG DQG DSSURYHG E\ 3(8*(27 DQG VSHFLILFDOO\ 0(1'(= SULRU WR LWV WUDQVPLVVLRQ WR $/&21 DQG &70* $/&21 DQG &70* H[HFXWLYHV UHYLHZHG WKH $SULO GUDIW DQG FRPPHQWV LQ JRRG IDLWK 7KH\ ZHUH GLVFRQFHUWHG DQG FRQFHUQHG E\ WKH QDWXUH RI VRPH RI WKH FRPPHQWV DQG ZKHWKHU WKH\ ZHUH EHLQJ PDGH LQ JRRG IDLWK E\ 3(8*(27 $W OHDVW VRPH RI WKH UHTXHVWHG FKDQJHV DSSHDUHG WR EH LQ EDG IDLWK DQG FRXOG QRW SRVVLEO\ EH H[SODLQHG E\ DQ\ LQWHUQDO PLVFRPPXQLFDWLRQ EHWZHHQ 38%/,&,6 DQG 3(8*(27 RU DQ\ ODFN RI 38%/,&,6 LQWHUQDO OHJDO UHYLHZ $V RQH H[DPSOH WKH $SULO GUDIW DVNHG WR HOLPLQDWH ODQJXDJH DFNQRZOHGJLQJ WKDW 3(8*(27 KDG UHYLHZHG DQG DSSURYHG WKH . VSLQQHU EDGJLQJ GHVLJQ LPSOHPHQWDWLRQV HYHQ WKRXJK 0(1'(= KHUVHOI KDG SHUVRQDOO\ UHYLHZHG DQG DSSURYHG WKHP ZKLOH VLWWLQJ LQ IURQW RI $/&21 DQG &70* H[HFXWLYHV DQG ZKLOH &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 64 of 132 Page ID #:64 VLWWLQJ QH[W WR 38%/,&,6¶6 6LVVRNR DQG %(7& H[HFXWLYHV LQ WKH -DQXDU\ PHHWLQJ $Q\ GUDIWLQJ PLVFRPPXQLFDWLRQ EHWZHHQ 38%/,&,6 DQG 3(8*(27 FRXOG QRW SRVVLEO\ MXVWLI\ QRW DFNQRZOHGJLQJ 0(1'(=¶6 DQG 3(8*(27¶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ase 2:19-cv-00245 Document 1 Filed 01/10/19 Page 65 of 132 Page ID #:65 ZLWK VWDWHPHQWV WKDW WKH QXPHURXV GHVLJQ FKDQJHV WKDW 3(8*(27 KDG UHTXHVWHG LQFOXGLQJ LQ WKH &DL GUDZLQJV ([KLELW % DQG WKDW $/&21 KDG LUUHYRFDEO\ LPSOHPHQWHG DV VLJQLILFDQW H[SHQVH ZHUH QRW LPSRUWDQW DQG RI QR YDOXH WR 3(8*(27 $V 3(8*(27 ZHOO NQHZ DQG DV $/&21¶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¶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¶ FRXUVH RI SHUIRUPDQFH DQG FRQGXFW SULRU WR 3(8*(27¶6 H[SUHVV UHQHJLQJ RQ WKH GHDO RQ 0D\ WKDW WKHUH ZDV LQ IDFW DQ DJUHHPHQW EHWZHHQ $/&21 DQG 3(8*(27 RQ DOO PDWHULDO WHUPV WKDW $/&21 VHHNV WR HQIRUFH E\ WKLV &RPSODLQW DQG WKDW DJUHHPHQW RQ DOO WHUPV DV VWDWHG DERYH ZDV UHDFKHG QR ODWHU WKDQ -DQXDU\ ZLWK PDQ\ WHUPV DJUHHG ZHOO EHIRUH WKDW DV HDUO\ DV $XJXVW &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 66 of 132 Page ID #:66 ,Q DGGLWLRQ WR FRQFHUQV DERXW WKH VFRSH DQG VXEVWDQFH RI 3(8*(27¶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¶6 LQWHUQDO OHJDO WHDP WKDW $/&21 DQG &70* SUHIHUUHG QRW WR UH RSHQ WKH GUDIWLQJ GLVFXVVLRQV RQ WKH SURSRVHG ORQJ IRUP WR WKH H[WHQW WKDW 38%/,&,6 DQG 3(8*(27 DSSHDUHG WR EH DVNLQJ DQG WKDW WKH SDUWLHV QHHGHG WR PRYH RQ WR DFWXDO IXUWKHU H[HFXWLRQ RI SHUIRUPDQFHV $/&21 DQG &70* UHTXHVWHG WKDW 3(8*(27 VLPSO\ VLJQ WKH -DQXDU\ 0RQWURQ GUDIW 3(8*(27 QHYHU GLG DQG LQGHHG UHIXVHG WR SXW WKH VLJQDWXUH RI DQ\ 3(8*(27 H[HFXWLYH RQ DQ\ GUDIW RI WKH ORQJ IRUP GRFXPHQWDWLRQ 3/$,17,)) LV LQIRUPHG DQG EHOLHYHV DQG RQ WKDW EDVLV DOOHJHV WKDW QR YHUVLRQ RI D ORQJ IRUP DJUHHPHQW HYHU FDPH LQWR H[LVWHQFH EHDULQJ WKH VLJQDWXUH RI D 3(8*(27 H[HFXWLYH EHFDXVH 0(1'(= DQG RU 3(8*(27 DOZD\V LQWHQGHG WR ZLWKKROG DQ\ VXFK VLJQDWXUH RXW RI D EDG IDLWK IUDXGXOHQW DQG PLVWDNHQ YLHZ WKDW LI 3(8*(27 DYRLGHG SXWWLQJ LWV VLJQDWXUH RQ D ORQJ IRUP WKHQ 3(8*(27 ZRXOG EH DEOH WR ZDON DZD\ IURP WKH GHDO DW DQ\ WLPH ZLWK QR FRQVHTXHQFHV WR 3(8*(27 UHJDUGOHVV RI ZKDW 0(1'(= DQG 3(8*(27 KDG DFWXDOO\ SURPLVHG DQG UHSUHVHQWHG DQG KRZ PXFK LW PLJKW FRVW $/&21 IRU 3(8*(27 WR DEDQGRQ WKH ILOP &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 67 of 132 Page ID #:67 May 4, 2017: Peugeot Communicates Material Breach And Begins to Reveal Its Bad Faith %\ ODWH $SULO DQG ZHOO EHIRUH WKDW LW ZDV DEXQGDQWO\ FOHDU WKDW $/&21 LQWHQGHG WR PDNH WKH IXOO SODFHPHQW LQ IXOO FRPSOLDQFH ZLWK WKH LQWHQW RI WKH GHDO DQG ZRXOG ZRUN ZLWK 3(8*(27 XQWLO 3(8*(27 ZDV UHDVRQDEO\ DQG LQ JRRG IDLWK VDWLVILHG ZLWK WKH SODFHPHQW HYHQ LI WKDW PHDQW RYHUSHUIRUPLQJ RQ WKH QXPEHU RI VHFRQGV RI RQVFUHHQ EDGJLQJ YLVLELOLW\ ,QGHHG $/&21¶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¶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¶6 PRUH VSHFLILF FR SURPRWLRQ SODQV +H FRPPXQLFDWHG WKDW $/&21 DQG &70* ZHUH DOO DQ[LRXV DQG ORRNLQJ IRUZDUG WR VHHLQJ WKHP &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 68 of 132 Page ID #:68 0(1'(= ZDV FRUQHUHG :LWK QR IXUWKHU VWDOOLQJ RQ VLJQDWXUHV DYDLODEOH ZLWK $/&21 UHDG\ ZLOOLQJ DQG DEOH WR PHHW DOO RI LWV REOLJDWLRQV DQG ZLWK $/&21 DQG &70* DVNLQJ IRU 3(8*(27¶6 PRUH VSHFLILF FR SURPRWLRQ SODQV 0(1'(= VLPSO\ ZHQW ZLWK EODWDQW IDOVHKRRGV DQG EDG IDLWK GHQLDOV WR IXUWKHU VWDOO DQG DYRLG DQ\ 3(8*(27 SHUIRUPDQFHV 3/$,17,)) LV LQIRUPHG DQG EHOLHYHV DQG RQ WKDW EDVLV DOOHJHV WKDW 0(1'(= GLG VR WR JXDUG KHU RZQ FRUSRUDWH FDUHHU DQG LQWHUQDO SROLWLFDO SRVLWLRQ DW 3(8*(27 DJDLQVW KHU RZQ H[FHHGLQJO\ SRRU MXGJPHQW LQ KHU EDG IDLWK GHDOLQJV RQ %5 DQG DOVR NQRZLQJ WKDW IRU KHU WR FRQWLQXH WR FRQGXFW KHUVHOI LQ WKLV PDQQHU ZRXOG EH WR $/&21¶6 IXUWKHU H[WUHPH SUHMXGLFH DQG GHWULPHQW 2Q 0D\ 0(1'(= HPDLOHG EDFN ,Q KHU 0D\ HPDLO WR &70* 0(1'(= WRRN WKH IROORZLQJ VWXQQLQJ SRVLWLRQV DQG PDGH WKH IROORZLQJ DGPLVVLRQV D )DOVH 'HQLDO RI -XO\ /2, 0(1'(= GHQLHG WKDW VKH KDG HYHU KDG DQ\ NQRZOHGJH SULRU WR &70* VHQGLQJ LW WR KHU GLUHFWO\ RQ RU DERXW $SULO WKDW WKH -XO\ /2, RU WKH GHDO GHVFULEHG LQ LW HYHU H[LVWHG ³, ZDV H[WUHPHO\ VXUSULVHG ZKHQ , IRXQG RXW WKH H[LVWHQFH RI WKLV GRFXPHQW \RX FDOOHG /2, HQWLWOHG µ%ODGH 5XQQHU ,, ± $JUHHPHQW LQ SULQFLSOH¶ VLQFH ,W >VLF@ ZDV WKH ILUVW WLPH WKDW , HYHU VDZ WKLV GRFXPHQW ´ %\ WKLV IDOVH GHQLDO DQG DV FOHDU IURP WKH UHVW RI KHU HPDLO 3/$,17,)) LV LQIRUPHG DQG EHOLHYHV DQG RQ WKDW EDVLV DOOHJHV WKDW 0(1'(= DOVR LPSOLFLWO\ PHDQW WKDW QHLWKHU VKH QRU DQ\RQH HOVH DW 3(8*(27 KDG HYHU DXWKRUL]HG DQ\ DJHQF\ HYHQ WR PDNH D %5 bid WKDW LQFOXGHG D FR SURPRWLRQ SURSRVDO 6KH VR FRPPXQLFDWHG HYHQ WKRXJK E\ WKLV SRLQW 0(1'(= KHUVHOI KDG EHHQ SHUVRQDOO\ LQWHUDFWLQJ IURP WLPH WR WLPH ZLWK $/&21 DQG &70* H[HFXWLYHV VSHFLILFDOO\ DERXW D SODFHPHQW AND FR SURPRWLRQ IRU DOPRVW WHQ PRQWKV &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 69 of 132 Page ID #:69 E )DOVH 'HQLDO WKDW 0HQGH] RU 3HXJHRW +DG *UDQWHG 1HJRWLDWLQJ DQG &RQWUDFWLQJ $XWKRULW\ WR 3XEOLFLV 0(1'(= GHQLHG WKDW WKH ODWH -DQXDU\ HDUO\ )HEUXDU\ 'HOHJDWLRQ RI 6LJQDWXUH $XWKRULW\ WKDW VKH KDG SHUVRQDOO\ VLJQHG WZLFH FRQILUPLQJ 38%/,&,6¶6 DXWKRULW\ WR ELQG 3(8*(27 KDG JLYHQ RU FRQILUPHG DQ\ DFWXDO DXWKRULW\ E\ 38%/,&,6 WR ELQG 3(8*(27 WR DQ\WKLQJ (YHQ IXUWKHU 0(1'(= GHQLHG WKDW 38%/,&,6 KDG DQ\ DXWKRULW\ WR PDNH DQ\ FRPPLWPHQWV IRU 3(8*(27 RQ DQ\ VXEMHFW ,Q DQ H[SODQDWLRQ EHDULQJ QR UHODWLRQVKLS DW DOO WR DQ\ ODQJXDJH LQ WKH 'HOHJDWLRQ RI 6LJQDWXUH $XWKRULW\ 0(1'(= IDOVHO\ FKDUDFWHUL]HG WKH GRFXPHQW DV RQO\ FRQILUPLQJ WKDW 3(8*(27 ZDV QRW ZRUNLQJ ZLWK DQ\ DJHQFLHV RWKHU WKDQ 38%/,&,6 RQ WKH SURGXFW SODFHPHQW ³7KH RWKHU GRFXPHQW WKDW &$6$%/$1&$ >38%/,&,6@ DVNHG XV WR VLJQ JLYLQJ WKHP D PDQGDWH WR EH RXU H[FOXVLYH LQWHUORFXWRU IRU WKH %ODGH 5XQQHU SURGXFW SODFHPHQW SURMHFW ZDV RQO\ WR DVVXUH WKHP WKDW ZH RQO\ ZRUNHG ZLWK WKHP RQ %/$'( 5811(5 SURGXFW SODFHPHQW DQG QRW ZLWK DQ\ RWKHUV DJHQFLHV :H QHYHU JDYH WKHP WKH ULJKW WR WDNH DQ\ FRPPLWPHQW RQ RXU EHKDOI DQG QHYHU LQWHQGHG WR GR VR WKURXJK WKLV GRFXPHQW ´ (PSKDVLV DGGHG 7KLV H[SODQDWLRQ LV HVSHFLDOO\ FOHDUO\ IDOVH DQG LQ EDG IDLWK ZKHUH HYHU\RQH NQHZ WKDW 3(8*(27 ZDV DOVR ZRUNLQJ ZLWK %(7& RQ %5 DQG QRW VROHO\ ZLWK 38%/,&,6 F )DOVH 'HQLDO WKDW 0(1'(= RU 3(8*(27 KDG HYHU HYHQ GLVFXVVHG D FR SURPRWLRQDO DVSHFW WR WKH %5 'HDO ³>7@KH /2, GRHVQ¶W UHIOHFW DW DOO RXU GLVFXVVLRQV ZLWK &$6$%/$1&$ >38%/,&,6@ )RU XV ZH DJUHHG RQO\ RQ D SURGXFW SODFHPHQW IRU D FHUWDLQ DPRXQW WKDW REYLRXVO\ LV PXFK KLJKHU WKDQ WKH RQH ZULWWHQ LQ WKH /2, ´ 3/$,17,)) LV LQIRUPHG DQG EHOLHYHV DQG RQ WKDW EDVLV DOOHJHV WKDW E\ &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 70 of 132 Page ID #:70 WKLV ODVW UHIHUHQFH 0(1'(= PHDQW WKDW 3(8*(27 KDG DJUHHG WR SD\ WR 38%/,&,6 IRU WKH SODFHPHQW RI ZKLFK 38%/,&,6 ZRXOG UHWDLQ DV D IHH DQG WUDQVPLW WKH UHPDLQLQJ WR $/&21 >DQ DUUDQJHPHQW WR ZKLFK $/&21 DQG &70* ZHUH HQWLUHO\ LQGLIIHUHQW WKDW WKH SODFHPHQW IHH SDLG GLUHFWO\ WR $/&21 ZDV WR EH ZDV DJUHHG DQG QRW LQ GLVSXWH@ $JDLQ 0(1'(=¶6 VWDWHPHQWV UHSUHVHQW DQ XWWHUO\ IDOVH GHQLDO RI 0(1'(= RU DQ\RQH DW 3(8*(27 HYHQ KDYLQJ DQ\ DZDUHQHVV RI DQ\ FR SURPRWLRQDO DVSHFW RI WKH GHDO RU WKDW 38%/,&,6 ZDV LQYROYHG LQ WKH FRPPXQLFDWLRQV DERXW LW 7KLV ZDV DQG LV DJDLQVW DOO REMHFWLYH UHDOLW\ 0(1'(= KHUVHOI KDG EHHQ SHUVRQDOO\ LQWHUDFWLQJ IURP WLPH WR WLPH ZLWK $/&21 DQG &70* H[HFXWLYHV VSHFLILFDOO\ DERXW D SODFHPHQW DQG FR SURPRWLRQ IRU DOPRVW WHQ PRQWKV LQFOXGLQJ 0(1'(= LQWHUDFWLQJ GLUHFWO\ ZLWK 38%/,&,6 H[HFXWLYHV about the co-promotion ZKLOH UHSUHVHQWDWLYHV IURP $/&21 &70* 3(8*(27 EH\RQG MXVW 0(1'(= 38%/,&,6 DQG %(7& ZHUH DOO SK\VLFDOO\ WRJHWKHU LQ WKH VDPH URRP DW $/&21¶6 /RV $QJHOHV RIILFHV G 0(1'(= DGPLWWHG WKDW $/&21 KDG SHUIRUPHG WR 3(8*(27¶6 VDWLVIDFWLRQ RQ WKH SODFHPHQW DQG WKDW 38%/,&,6 KDG HYHQ SDUWLDOO\ SDLG 38%/,&,6 IRU LW ³>:@H KDYH DOUHDG\ SDLG >WR 38%/,&,6@ ODVW \HDU RI WKH IXOO DPRXQW >RI WKH SODFHPHQW IHH@ :H ZHUH ZDLWLQJ WR VHH WKH SURRI RI WKH SODFHPHQW GXULQJ WKH UHOHDVH RI WKH PRYLH LQ WKHDWHUV LQ RUGHU WR SD\ WKH UHVW ´ 7KH FOHDU LPSOLFDWLRQ RI WKLV DGPLVVLRQ E\ 0(1'(= ZDV WKDW 3(8*(27 ZDV VDWLVILHG ZLWK $/&21¶6 SHUIRUPDQFH RQ WKH SODFHPHQW DV 3(8*(27 DQG 0(1'(= KHUVHOI KDG DIILUPHG WR $/&21 QXPHURXV WLPHV LQFOXGLQJ DW WKH -DQXDU\ FR SURPRWLRQ NLFNRII PHHWLQJ LQ /RV &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 71 of 132 Page ID #:71 $QJHOHV 7KDW WKH SODFHPHQW ZRXOG LQ IDFW EH LQ WKH 3LFWXUH ZDV QRW LQ DQ\ GRXEW ± $/&21 KDG EHHQ SHUIRUPLQJ DQG KDG UHSHDWHGO\ DIILUPHG WR 3(8*(27 WKDW $/&21 LQWHQGHG WR FRQWLQXH WR SHUIRUP DQG ZDV UHDG\ ZLOOLQJ DQG DEOH WR GR VR LQFOXGLQJ DFURVV D UHODWLYHO\ ZLGH VSHFWUXP RI 3(8*(27¶6 DGGLWLRQDO VSHFLILF LPSOHPHQWDWLRQ LQSXW )RU H[DPSOH DV QRWHG LQ SUHYLRXV SDUDJUDSKV $/&21 LQWHUQDOO\ ZDV SUHSDUHG DQG UHDG\ DEOH DQG ZLOOLQJ LI QHFHVVDU\ WR JR DERYH DQG EH\RQG WKH FRQWUDFW WHUPV RQ VHFRQGV RI YLVLELOLW\ IRRWDJH HYHQ DV PDQ\ DV VHFRQGV LI QHFHVVDU\ WR DYRLG DQ\ WLPH FRXQWLQJ GLVSXWHV 0RUHRYHU DV 3(8*(27 DQG 0(1'(= ZHOO NQHZ $/&21 ZDV E\ WKLV WLPH GHHSO\ DQG IRU DOO FRPPHUFLDOO\ SUDFWLFDO SXUSRVHV LUUHYRFDEO\ FRPPLWWHG WR .¶V VSLQQHU DSSHDULQJ WKURXJKRXW WKH HQWLUH ILOP DV D 3HXJHRW 7KLV PHDQW WKDW 3(8*(27¶6 VDWLVIDFWLRQ RQ WKH SODFHPHQW ZDV QRW LQ DQ\ ZD\ DQ REVWDFOH WR FRQWLQXLQJ WR PRYH IRUZDUG ZLWK WKH FR SURPRWLRQ RQ DQ\ UHDVRQDEOH RU JRRG IDLWK PHDVXUH :KLOH $/&21 ZDV ZLOOLQJ WR ZDLW XQWLO UHOHDVH RI WKH 3LFWXUH DFWXDOO\ WR UHFHLYH WKH SODFHPHQW IHH QR PRWLRQ SLFWXUH FDQ ZDLW XQWLO DIWHU WKH UHOHDVH RI WKH SLFWXUH WR SODQ DQG H[HFXWH D FR SURPRWLRQ ± WKH SXUSRVH RI WKH FR SURPRWLRQ LV WR SUHFHGH DQG VXSSRUW WKH UHOHDVH RI WKH 3LFWXUH 7KXV WKH DFWXDO SD\PHQW WLPLQJ RI WKH SODFHPHQW IHH DQG FRPPHQFHPHQW RI WKH FR SURPRWLRQ ZHUH GLVWLQFW LVVXHV ZLWK OLWWOH EHDULQJ RQ HDFK RWKHU DV DOO SURIHVVLRQDOV WKDW ZRUN LQ WKH PRWLRQ SLFWXUH SURGXFW SODFHPHQW DQG FR SURPRWLRQ ILHOG LQFOXGLQJ 0(1'(= ZHUH DQG DUH ZHOO DZDUH :KDW 0(1'(= FOHDUO\ PHDQW E\ KHU VWDWHPHQW DV RWKHU SRUWLRQV RI KHU HPDLO PDNH FOHDU ZDV WR VXJJHVW QRQVHQVLFDOO\ DQG LQ HJUHJLRXV EDG IDLWK WKDW WKH SDUWLHV VKRXOG RQO\ EHJLQ WR GLVFXVV D FR SURPRWLRQ after WKH UHOHDVH RI WKH SLFWXUH KDG RFFXUUHG ± ZKHQ WKH FR SURPRWLRQ &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 72 of 132 Page ID #:72 ZRXOG EH WRR ODWH DQG KDYH OLWWOH RU QR YDOXH WR $/&21 H )DOVH 'HQLDO WKDW 3(8*(27 +DG :RQ WKH %LGGLQJ 6SHFLILFDOO\ E\ 2IIHULQJ D /DUJH &R 3URPRWLRQ DQG WKDW 0(1'(= KDG EHHQ ,QYROYHG LQ 'RLQJ 6R ³,I , KDG NQRZQ D \HDU DJR DW WKH EHJLQQLQJ RI RXU GLVFXVVLRQV WKDW 6RQ\ >sic $/&21@ ZDV H[SHFWLQJ D PLQLPXP LQYHVWPHQW RQ D SURPRWLRQ FDPSDLJQ WR VLJQ D GHDO , ZRXOG KDG >VLF@ QHYHU DJUHHG ZLWK LW ´ 0(1'(= PHDQW E\ WKLV WKDW 38%/,&,6 KDG JRQH URJXH DQG H[FHHGHG LWV DXWKRULW\ E\ HYHU GLVFXVVLQJ 3(8*(27 SURSRVDOV WKDW LQFOXGHG D FR SURPRWLRQ ZLWK D JXDUDQWHHG PHGLD VSHQG 7KLV ZDV DJDLQ DQRWKHU QRQVHQVLFDO VWDWHPHQW DQG LQ PDQ\ ZD\V ZDV QRQVHQVLFDO UHJDUGOHVV RI ZKDW 38%/,&,6¶6 DXWKRULW\ DFWXDOO\ ZDV RU ZDV QRW $V GHWDLOHG LQ SULRU SDUDJUDSKV 3(8*(27 KDG ZRQ WKH ELGGLQJ D \HDU HDUOLHU E\ YROXQWDULO\ VZHHWHQLQJ LWV RZQ ELG WR LQFOXGH DQ ³XS WR PLOOLRQ´ JXDUDQWHHG PHGLD VSHQG 7KDW SURSRVDO KDG EHHQ LQLWLDOO\ FRPPXQLFDWHG by BEN IRU 3(8*(27 ± not 38%/,&,6 38%/,&,6 KDG QHYHU EHHQ WKH LQLWLDWRU RI 3(8*(27¶6 GLVFXVVLRQV ZLWK $/&21 DERXW 3(8*(27¶6 FOHDU DQG LQWHQWLRQDOO\ HQWLFLQJ SURSRVDO IRU D ODUJH JXDUDQWHHG PHGLD VSHQG 7KXV WR EODPH DQ\ ODFN RI DXWKRULW\ E\ 38%/,&,6 IRU 3(8*(27 SXUSRUWHGO\ QRW XQGHUVWDQGLQJ WKDW PEUGEOT KDG SURSRVHG WKH JXDUDQWHHG PHGLD VSHQG DQG WKDW LW ZDV SDUW RI WKH GHDO DQG LQGHHG WKH RQO\ UHDVRQ $/&21 KDG EHHQ ZRUNLQJ ZLWK 3(8*(27 IRU WKH EHWWHU SDUW RI D \HDU UDWKHU WKDQ RWKHU DXWRPRWLYH SDUWQHUV ZDV DQG LV DJDLQVW DOO REMHFWLYH UHDOLW\ DQG FOHDUO\ GHPRQVWUDWHV 0(1'(=¶6 DQG 3(8*(27¶6 H[WUHPH EDG IDLWK I $GPLVVLRQ DQG RU )DOVH 'HQLDO WKDW 1R 3(8*(27 %XGJHW IRU D 0HGLD 6SHQG (YHU ([LVWHG ³, ZDV YHU\ FOHDU ZLWK &DVDEODQFD , &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 73 of 132 Page ID #:73 &$1127 FRPPLW RQ DQ\ EXGJHW RQ 3HXJHRW VXEVLGLDULHV¶ EHKDOYHV EHFDXVH WKH\ DUH IUHH WR PDQDJH WKHLU RZQ PHGLD EXGJHWV ´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¶6 UHWDLO GHDOHUV DURXQG WKH ZRUOG RQO\ WKHQ 3(8*(27 PLJKW SXW WRJHWKHU D PHGLD FDPSDLJQ ZKHUH WKH 3(8*(27 EUDQG URGH RII WKH HVWDEOLVKHG VXFFHVV RI WKH 3LFWXUH 0(1'(= DOVR PHDQW WKDW VKH ZDV QRW HYHQ JRLQJ WR VWDUW WKH SURFHVV ZLWKLQ 3(8*(27 WKDW PLJKW EH UHTXLUHG IRU DQ\ FR SURPRWLRQ XQWLO WKH UHOHDVH RI WKH 3LFWXUH KDG DFWXDOO\ RFFXUUHG 3/$,17,)) LV LQIRUPHG DQG EHOLHYHV DQG RQ WKDW EDVLV DOOHJHV XQGHU DW OHDVW RQH IDFWXDO DOWHUQDWLYH WKDW 0(1'(=¶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ase 2:19-cv-00245 Document 1 Filed 01/10/19 Page 74 of 132 Page ID #:74 DQG 3(8*(27 DQG FRPSOHWHO\ FRQWUDU\ WR WKH IXQGDPHQWDO VXEVWDQFH RI DOO FRPPXQLFDWLRQV EHWZHHQ $/&21 DQG 3(8*(27 IURP WKH WLPH RI 3(8*(27¶6 0D\ VZHHWHQHG ELG IRUZDUG $/&21 ZRXOG QHYHU KDYH DJUHHG WR DQ\ VXFK EXVLQHVV UHODWLRQVKLS ZLWK 3(8*(27 RQ WKH WHUPV WKDW 0(1'(= ZDV QRZ OD\LQJ RXW QRU ZRXOG DQ\ PDMRU PRWLRQ SLFWXUH VWXGLR HYHU GR VR 1RZ RQO\ DERXW ILYH PRQWKV DZD\ IURP WKH 3LFWXUH¶V UHOHDVH GDWH DQG ZLWK $/&21 FRPSOHWHO\ XQDEOH IRU DOO FRPPHUFLDOO\ SUDFWLFDO SXUSRVHV WR ILQG DQ DOWHUQDWLYH DXWRPRWLYH SDUWQHU RU HYHQ HDVLO\ UHPRYH 3(8*(27¶6 EUDQGLQJ IURP WKH 3LFWXUH 0(1'(= ZHQW RQ LQ KHU 0D\ HPDLO WR SURSRVH D FRPSOHWH UH QHJRWLDWLRQ RI WHUPV HQWLUHO\ LQ EDG IDLWK ³:KDW ZH ZRXOG OLNH WRGD\ LV WR VWLFN WR RXU GLVFXVVLRQV ZLWK &$6$%/$1&$ ILUVW DQ DJUHHPHQW RQ WKH SURGXFW SODFHPHQW DQG WKHQ LI ZH DUH VDWLVILHG E\ WKLV SURGXFW SODFHPHQW ZH ZLOO UHYLHZ WKH SRVVLELOLW\ WR ZRUN RQ D SURPRWLRQDO FDPSDLJQ LI WKH FUHDWLYH FDPSDLJQ SURSRVHG E\ RXU DG DJHQF\ LV YDOLGDWHG E\ RXU &(2 DQG QR FRPPLWPHQWV RQ DQ\ EXGJHW RU ILJXUHV RQ DQ\ RI RXU VXEVLGLDULHV¶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ase 2:19-cv-00245 Document 1 Filed 01/10/19 Page 75 of 132 Page ID #:75 ,VDEHO´ %\ WKH DERYH DPRQJ RWKHU WKLQJV 0(1'(= FOHDUO\ GHFODUHG RQ EHKDOI RI 3(8*(27 WKDW 3(8*(27 PLJKW QRW DFNQRZOHGJH LWV VDWLVIDFWLRQ ZLWK WKH SODFHPHQW XQWLO DIWHU WKH 3LFWXUH¶V WKHDWULFDO UHOHDVH DQG ZDV GHQ\LQJ WKH SDUWLHV HYHQ KDG D ELQGLQJ SODFHPHQW DJUHHPHQW \HW OHW DORQH D FR SURPRWLRQ DJUHHPHQW DQG UHJDUGOHVV DQG HYHQ LI WKH SODFHPHQW ZHUH VDWLVIDFWRU\ DV $/&21¶6 SODFHPHQW SHUIRUPDQFH FOHDUO\ KDG EHHQ XS WR WKH WLPH RI 0(1'(=¶6 0D\ HPDLO 3(8*(27 ZRXOG never LWVHOI IXQG D FR SURPRWLRQ PHGLD VSHQG IRU %5 0(1'(= WKXV FOHDUO\ GHFODUHG RQ EHKDOI RI 3(8*(27 WKDW 3(8*(27 ZDV never JRLQJ WR SHUIRUP WKH PHGLD VSHQG DV SURPLVHG ± D PDWHULDO WHUP RI 3(8*(27¶6 0D\ VZHHWHQHG DQG ZLQQLQJ ELG D PDWHULDO WHUP RI WKH -XO\ /2, D PDWHULDO WHUP RI WKH SDUWLHV¶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¶6 0D\ HPDLO DOVR FOHDUO\ GHFODUHG WKDW 3(8*(27 UHIXVHG WR GR VR DQG LQVWHDG LQVLVWHG WKDW WKH REOLJDWLRQV RQ WKDW SRLQW EH UHYHUVHG DQG WKDW $/&21 DQG &70* LQVWHDG PDNH WKH PHGLD VSHQG SODQV IRU 3(8*(27 WR UHYLHZ DQG DSSURYH DQG ZKLFK SODQV 3(8*(27 PDGH FOHDU LW ZRXOG QRW EH SD\LQJ IRU DQ\ SDUW RI LWVHOI HYHQ LI LW DSSURYHG WKHP 7KLV UHIXVDO ZDV LWVHOI D PDWHULDO EUHDFK &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 76 of 132 Page ID #:76 0(1'(= RYHUDOO PDGH FOHDU E\ KHU 0D\ HPDLO WKDW IURP WKH SRLQW RI 3(8*(27¶6 0D\ VZHHWHQHG ELG WR $/&21 DQG IRUZDUG DIWHU WKDW 3(8*(27 KDG DW DOO WLPHV EHHQ QHJRWLDWLQJ LQ EDG IDLWK DQG IUDXGXOHQWO\ ZLWK UHVSHFW WR WKH PHGLD VSHQG WKDW ZDV WKH VLQJOH PRVW PDWHULDO WHUP RI WKH HQWLUH GHDO :RUVH 3(8*(27 ZDV QRZ SURSRVLQJ WR UHQHJRWLDWH WKH GHDO WR EH UDGLFDOO\ PRUH IDYRUDEOH WR 3(8*(27 DIWHU 3(8*(27¶6 RZQ EDG IDLWK KDG VKDUSO\ UHGXFHG $/&21¶6 OHYHUDJH $OO RI WKHVH FRPPXQLFDWLRQV E\ 0(1'(= RQ EHKDOI RI 3(8*(27 FRQVWLWXWHG DFWXDO DQG RU DQWLFLSDWRU\ PDWHULDO EUHDFKHV RI WKH SDUWLHV¶ DJUHHPHQWV DQG 3(8*(27¶6 QHJRWLDWLQJ GXWLHV WRZDUG $/&21 DQG &70* 7KXV XQGHU FOHDU &DOLIRUQLD ODZ IURP 0(1'(=¶6 0D\ HPDLO IRUZDUG LI QRW HDUOLHU $/&21 DQG &70* ZHUH UHOLHYHG RI PDNLQJ DQ\ IXUWKHU SHUIRUPDQFHV WR 3(8*(27 RU PDNLQJ DQ\ IXUWKHU VDWLVIDFWLRQ RI DQ\ FRQGLWLRQV RI 3(8*(27 SHUIRUPDQFHV ± DQG FRXOG VWLOO IXOO\ HQIRUFH WKH GHDO WHUPV DJDLQVW 3(8*(27 $V MXVW RQH H[DPSOH IURP WKH WLPH RI 0(1'(=¶6 0D\ HPDLO IRUZDUG $/&21 ZDV QR ORQJHU ERXQG WR SHUIRUP IRU LQVWDQFH WKH DOORFDWLRQ RI WKH YLVLELOLW\ IRRWDJH GRZQ WR DQ\ VWULFW PHDVXUH RI VHFRQGV EHWZHHQ VSLQQHU VHTXHQFHV DQG RXWGRRU ZDOO DG VHTXHQFHV ,QGHHG DOWKRXJK $/&21 GLG VR UHJDUGOHVV DQG LQ WKH XWPRVW JRRG IDLWK IURP 0(1'(=¶6 0D\ HPDLO IRUZDUG $/&21 ZDV QR ORQJHU ERXQG WR LQFOXGH any 3(8*(27 EUDQGLQJ YLVLELOLW\ VHTXHQFHV DW DOO $QG DV ORQJ DV $/&21 GLG QRW DFW LQ EDG IDLWK RU FRPPHUFLDOO\ XQUHDVRQDEO\ $/&21 FRXOG PDNH QR IXUWKHU SHUIRUPDQFHV WR 3(8*(27 ZKDWVRHYHU ± LQFOXGLQJ KDYLQJ QR EUDQGLQJ YLVLELOLW\ IRRWDJH DW DOO LQ WKH 3LFWXUH DQG FRXOG VWLOO IXOO\ HQIRUFH WKH DJUHHPHQW DJDLQVW 3(8*(27 1HLWKHU $/&21 QRU &70* HYHU ZDLYHG DQ\ RI 3(8*(27¶6 DFWXDO DQG DQWLFLSDWRU\ EUHDFKHV LQ 0(1'(=¶6 0D\ HPDLO RU DQ\ RWKHUV $QG 0(1'(=¶6 DQG 3(8*(27¶6 FRQGXFW ZDV EH\RQG HJUHJLRXV &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 77 of 132 Page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¶6 0D\ HPDLO RQ RU DERXW 0D\ $/&21¶6 PDUNHWLQJ WHDP DQG &70* SUHVHQWHG 3(8*(27 ZLWK WKH RSSRUWXQLW\ WR LQFOXGH 3(8*(27 EUDQGLQJ LQ DQ LPPHUVLYH 95 H[SHULHQFH LQYROYLQJ .¶V VSLQQHU WKDW ZDV KLJKO\ DWWUDFWLYH WR FRQVXPHUV EXW 3(8*(27 VLPSO\ GLG QRW DFW RQ LW 7KXV $/&21 DQG &70* FRQWLQXHG WR SHUIRUP UHDVRQDEO\ DQG LQ JRRG IDLWK EXW ZLWKRXW ZDLYHU RI 3(8*(27¶6 EUHDFKHV DQG IXUWKHU HQJDJHG ZLWK 3(8*(27 WR WU\ WR FKDQJH LWV PLQG Alcon and CTMG Go to Extraordinary Lengths to Attempt to Please Peugeot, Even After Peugeot’s Egregious and Bad Faith Material Breaches $IWHU 0(1'(=¶6 0D\ HPDLO $/&21 DQG RU &70* PDGH FOHDU WR 3(8*(27 LQ YDULRXV FRPPXQLFDWLRQV WKDW 0(1'(=¶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ase 2:19-cv-00245 Document 1 Filed 01/10/19 Page 78 of 132 Page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ase 2:19-cv-00245 Document 1 Filed 01/10/19 Page 79 of 132 Page ID #:79 EDFN DQG IRUWK FRPPHQWV DQG HIIRUWV WR FXUH DQ\ 3(8*(27 JRRG IDLWK DQG FRPPHUFLDOO\ UHDVRQDEOH GLVVDWLVIDFWLRQ 3(8*(27 ZDV VDWLVILHG ZLWK WKH SODFHPHQW WKHQ 3(8*(27 ZRXOG FRPPLW WR D PLQLPXP PLOOLRQ PHGLD VSHQG 7KH DERYH SODFHPHQW WHUPV ZHUH DW OHDVW DV IDYRUDEOH WR 3(8*(27 DV DQ\ ODQJXDJH LQ HLWKHU WKH -DQXDU\ GUDIW ORQJ IRUP VLJQHG E\ 0RQWURQ RU WKH $SULO UHYLVHG GUDIW ORQJ IRUP SURSRVHG E\ 38%/,&,6¶6 LQWHUQDO OHJDO WHDP HYHQ XQGHU D YHU\ JHQHURXV WR 3(8*(27 LQWHUSUHWDWLRQ RI WKH GUDIWV¶ ODQJXDJH 2Q 0D\ 0(1'(= HPDLOHG EDFN WR &70* FRS\LQJ 38%/,&,6 H[HFXWLYHV ,Q KHU 0D\ HPDLO 0(1'(= UHMHFWHG WKH DERYH SURSRVHG DFFRUG RQ EHKDOI RI 3(8*(27 DQG LQVWHDG SURFHHGHG WR DWWHPSW WR UHQHJRWLDWH WKH GHDO DOPRVW HQWLUHO\ XVLQJ 3(8*(27¶6 E\ QRZ H[WUHPH OHYHUDJH ,Q KHU 0D\ HPDLO 0(1'(= DJDLQ GHQLHG HYHU\ KDYLQJ VHHQ RU EHHQ DZDUH RI DQ\ GUDIW RI WKH ORQJ IRUP DJUHHPHQW RU HYHQ WKDW 38%/,&,6 KDG EHHQ QHJRWLDWLQJ RQH IRU 3(8*(27 SULRU WR &70*¶6 0D\ WUDQVPLVVLRQ RI WKH -DQXDU\ GUDIW VLJQHG E\ 0RQWURQ GLUHFWO\ WR 0(1'(= 3/$,17,)) LV LQIRUPHG DQG EHOLHYHV WKDW WKLV GHQLDO E\ 0(1'(= ZDV EODWDQWO\ IDOVH DQG WKDW DW D EDUH PLQLPXP E\ QR ODWHU WKDQ $SULO 38%/,&,6¶6 LQWHUQDO OHJDO WHDP KDG VKDUHG DQG GLVFXVVHG ERWK WKH -DQXDU\ GUDIW DQG ZKDW EHFDPH WKH $SULO GUDIW ZLWK 0(1'(= $V D VHFRQG DOWHUQDWLYH EHFDXVH 3(8*(27 DVVHUWV DV PXFK DQG DW OHDVW VRPH RI WKH IDFWV DUH QRW NQRZQ RU UHDVRQDEO\ NQRZDEOH E\ $/&21 ZLWKRXW GLVFRYHU\ 3/$,17,)) UHVHUYHV WKH ULJKW WR DOOHJH WKDW 38%/,&,6¶6 UHSUHVHQWDWLRQV WR $/&21 DQG &70* WKDW VXFK KDG RFFXUUHG ZHUH QRW DFFXUDWH DQG HLWKHU LQWHQWLRQDOO\ IDOVH RU QHJOLJHQWO\ PDGH E\ 38%/,&,6 $/&21 VLPLODUO\ UHVHUYHV WKDW 38%/,&,6 SDUWLFXODUO\ &DVDEODQFD PD\ KDYH HQJDJHG LQ RWKHU FRQGXFW GHWULPHQWDO WR 3/$,17,)) SRVVLEO\ WKURXJKRXW WKH FRXUVH RI WKH SDUWLHV¶ GHDOLQJV DQG IRU ZKLFK 38%/,&,6 &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 80 of 132 Page ID #:80 PLJKW KDYH LWV RZQ OLDELOLW\ KRZHYHU DW SUHVHQW DOWKRXJK 3(8*(27 FRQWHQGV WKLV 3(8*(27 KDV WR GDWH GHFOLQHG WR GHOLYHU WR $/&21 DQ\ VXSSRUW IRU VXFK FRQWHQWLRQV DQG $/&21¶6 XQGHUVWDQGLQJ LV WKDW 38%/,&,6 GHQLHV 3(8*(27¶6 FRQWHQWLRQV $/&21 UHVHUYHV DOO SRVLWLRQV DV WR ZKDW PD\ RU PD\ QRW KDYH RFFXUUHG EHWZHHQ 38%/,&,6 DQG 3(8*(27 LQFOXGLQJ ZLWKRXW OLPLWDWLRQ WKH ULJKW WR SOHDG DGGLWLRQDO IDFWV LQFOXGLQJ DOWHUQDWLYH IDFWV DERXW VXFK PDWWHUV ,Q KHU 0D\ HPDLO 0(1'(= IXUWKHU GHQLHG DJDLQ WKDW 38%/,&,6 KDG DQ\ DXWKRULW\ WR QHJRWLDWH WKH SODFHPHQW WHUPV WKDW LW QHJRWLDWHG LQ WKH GUDIW ORQJ IRUPV RU DV SURSRVHG E\ &70*¶6 0D\ SRWHQWLDO DFFRUG RU DQ\ DXWKRULW\ WR QHJRWLDWH DQ\ PHGLD VSHQG DW DOO 0(1'(= WKHQ SURSRVHG WKH IROORZLQJ VSHFLILF UHQHJRWLDWHG WHUPV D 7KDW $/&21 DIIRUG DW OHDVW WKUHH VSLQQHU EUDQGLQJ YLVLELOLW\ VFHQHV UXQQLQJ DW OHDVW IRXU VHFRQGV HDFK E 7KDW WKH VSLQQHU YLVLELOLW\ VFHQHV KDG WR LQFOXGH DW OHDVW WKUHH YLHZV RI WKH VSLQQHU LQFOXGLQJ DOO 3(8*(27 EUDQGLQJ RQ LW ³)5217 5($5 DQG ,16,'( WKH DQLPDWHG RQH RQ WKH LQVLGH ERDUG \RX VKRZHG XV´ F 7KDW LQ DGGLWLRQ WR WKH DERYH PLQLPXP WZHOYH VHFRQGV RI VSLQQHU EUDQGLQJ YLVLELOLW\ WKDW $/&21 DOVR VWLOO DIIRUG 3(8*(27 DQ DGGLWLRQDO KRORJUDSKLF DGYHUWLVHPHQW LQ D EDFNJURXQG VFHQH G 7KDW WKH SODFHPHQW IHH EH DOORFDWHG HDFK WR DOO IRXU DERYH YLVLELOLW\ VFHQHV H 7KDW LI 3(8*(27 DSSURYHG WKH SODFHPHQW DIWHU UHYLHZ WKDW 3(8*(27¶6 &(2 ZRXOG WKHQ FRQVLGHU DSSURYLQJ D FR SURPRWLRQ FDPSDLJQ I %XW WKDW HYHQ LI 3(8*(27¶6 &(2 ZDV IXOO\ VDWLVILHG ZLWK ERWK WKH SODFHPHQW DQG WKH SODQQHG FR SURPRWLRQ 3(8*(27 ZRXOG VWLOO QRW HYHU PDNH DQ\ ELQGLQJ FRPPLWPHQW WR IXQG DQ\ FR SURPRWLRQ DW DOO J $W PRVW 3(8*(27 ZRXOG SUHVHQW WKH SRVVLELOLW\ RI D FR SURPRWLRQ &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 81 of 132 Page ID #:81 FDPSDLJQ WR LWV ORFDO GHDOHUVKLSV E\ WHUULWRU\ DQG HYHQ DV WR WKDW 3(8*(27 GHFOLQHG WR DJUHH HYHQ WR SURSRVH DQ\ VSHFLILF DPRXQW RI PHGLD VSHQG WR WKH ORFDO GHDOHUVKLSV &OHDUO\ NQRZLQJ WKDW 0(1'(=¶6 0D\ HPDLO ZRXOG EH DQG ZDV VKRFNLQJ WR &70* RQ 0D\ 0RQWURQ HPDLOHG WKH VDPH JURXS EDFN FRS\LQJ 0(1'(= DQG DWWHPSWHG WR VPRRWK RU ³FODULI\´ 0(1'(=¶6 SRVLWLRQV 0RQWURQ DWWHPSWHG WR FODULI\ WZR SRLQWV D 7KDW $/&21 DQG &70* ZHUH IXOO\ FRPPLWWHG WR %5 IHDWXULQJ WKH 3(8*(27 EUDQG DQG WKDW LW ZRXOG EH D KLJK YDOXH SODFHPHQW WR 3(8*(27 E 7KDW 0(1'(= DQG 3(8*(27 PHDQW WKDW LI 3(8*(27 ZDV VDWLVILHG ZLWK WKH SODFHPHQW WKHQ ³3HXJHRW LV UHDG\ WR ODXQFK D SURPRWLRQDO FDPSDLJQ LI 3HXJHRW DSSURYHV WKH SURGXFW EUDQG SODFHPHQW ´ 7KH VDPH GD\ 0D\ 0(1'(= UHVSRQGHG DQG FRUUHFWHG 0RQWURQ D ³:H GR ZDQW WR FRQWLQXH WKH ORJR SODFHPHQW EXW ZH QHHG WR DJUHH RQ WHUPV´ DQG E ³:H LQWHQG WR SXVK D FR SURPRWLRQDO FDPSDLJQ EXW ZH GR QRW JXDUDQWHH LW DOO even if the LOGO placement is confirmed ´ (PSKDVLV DGGHG ,W ZDV WKXV FU\VWDO FOHDU WKDW 0(1'(= DQG 3(8*(27 ZHUH UHDIILUPLQJ WKHLU DFWXDO DQG RU DQWLFLSDWRU\ PDWHULDO EUHDFK RI WKH DJUHHPHQW WKDW KDG EHHQ QHJRWLDWHG IRU RYHU WHQ PRQWKV DQG IXUWKHU ZHUH UHMHFWLQJ HYHQ &70*¶6 SURSRVHG VSHFLILF DFFRUG &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 82 of 132 Page ID #:82 .QRZLQJ KHU OHYHUDJH ZDV H[WUHPH DW WKLV SRLQW 0(1'(= WKXV SURFHHGHG WR HQFRXUDJH &70* WR FRPH WR 3DULV DQG SUHVHQW LQ SHUVRQ WR 3(8*(27¶6 &(2 VR WKDW PD\EH 3(8*(27 ZRXOG DW OHDVW GR VRPHWKLQJ RQ WKH FR SURPRWLRQ FDPSDLJQ LI LW IHOW OLNH LW DIWHU WKH &(2 YLHZHG URXJK FXW YLVLELOLW\ IRRWDJH :LWKRXW ZDLYLQJ 3(8*(27¶6 EUHDFKHV EXW ZLWK OLWWOH FKRLFH EXW WR WU\ WKHLU EHVW WR PLWLJDWH WKH VLWXDWLRQ $/&21 DQG &70* ZRUNHG WRJHWKHU WR SUHSDUH D SUHVHQWDWLRQ LQFOXGLQJ URXJK FXW DFWXDO IRRWDJH IURP WKH 3LFWXUH DV LW VWRRG LQ SURJUHVV ZLWK 3HXJHRW EUDQGLQJ IRU WKH H[SUHVV SXUSRVH RI &70* H[HFXWLYHV SHUVRQDOO\ SUHVHQWLQJ LW LQ 3DULV WR 3(8*(27¶6 &(2 :LWK WKH DFWLYH SDUWLFLSDWLRQ DQG LQYROYHPHQW RI 0(1'(= DQG KHU FOHDU NQRZOHGJH DQG DZDUHQHVV RI WKH SXUSRVH DQG LQWHQW RI WKH WULS DQ H[FHSWLRQDOO\ KLJK OHYHO WHDP RI &70* H[HFXWLYHV LQFOXGLQJ D 3UHVLGHQW OHYHO SURPRWLRQV DQG PDUNHWLQJ H[HFXWLYH ZLWKLQ WKH 6RQ\ RUJDQL]DWLRQ WUDYHOHG LQ SHUVRQ WR 3(8*(27¶6 3DULV RIILFHV $JDLQ WKH H[SUHVV SXUSRVH RI WKH WULS ZDV WR PHHW ZLWK 3(8*(27¶6 &(2 3(8*(27 LQFOXGLQJ WKURXJK 0(1'(= KDG DJUHHG WR DQG SDUWLFLSDWHG LQ WKH SODQQLQJ DQG ILQDOL]DWLRQ RI WKH WULS DQG VSHFLILFDOO\ WKDW WKH PHHWLQJ ZRXOG EH ZLWK WKH 3(8*(27 &(2 $FFRUGLQJO\ RQ RU DERXW -XQH ± WKH SODQQHG DQG DJUHHG GDWH IRU 3(8*(27 DQG LWV &(2 WR UHFHLYH WKH &70* WHDP WKH &70* WHDP DUULYHG DW 3(8*(27¶6 3DULV RIILFHV ZLWK VRPH RI WKHP KDYLQJ WUDYHOHG IURP &DOLIRUQLD IRU WKH VSHFLILF SXUSRVH RI WKH PHHWLQJ ZLWK WKH SUHVHQWDWLRQ PDWHULDOV LQFOXGLQJ 3LFWXUH IRRWDJH %\ WKLV WLPH WKH RULJLQDOO\ SODQQHG 3LFWXUH /RFN GHDGOLQH RI -XQH ZDV RQO\ VHYHQ GD\V DZD\ DQG LQ DQ\ HYHQW ZDV LPPLQHQW 7KH 5HOHDVH 'DWH ZDV MXVW RYHU IRXU PRQWKV DZD\ 3(8*(27 ZDV ZHOO DZDUH RI WKHVH GHDGOLQHV DQG WKDW WLPLQJ ZDV FULWLFDO &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 83 of 132 Page ID #:83 0(1'(= PHW WKH &70* WHDP DQG LQIRUPHG WKHP WKDW 3(8*(27¶6 &(2 ZDV QRW LQ 3(8*(27¶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¶6 RIILFHV 3/$,17,)) LV LQIRUPHG DQG EHOLHYHV DQG RQ WKDW EDVLV DOOHJHV WKDW 0(1'(=¶6 VWDWHPHQWV WKDW WKH 3(8*(27 &(2 ZDV QRW LQ 3(8*(27¶6 3DULV RIILFH DQG ZDV XQDYDLODEOH IRU WKH PHHWLQJ ZHUH IDOVH DQG WKDW LQ IDFW 3(8*(27¶6 &(2 was SK\VLFDOO\ DW WKH RIILFHV WKDW GD\ DQG FRXOG KDYH PHW ZLWK &70* 3/$,17,)) LV LQIRUPHG DQG EHOLHYHV DQG RQ WKDW EDVLV DOOHJHV WKDW 0(1'(= LQ IDFW VWLOO ZDV ZLWKKROGLQJ IURP KHU &(2 VXEVWDQWLDOO\ WKH HQWLUH %5 VLWXDWLRQ DQG WKDW 0(1'(= KDG IUDXGXOHQWO\ DQG LQ EDG IDLWK LQGXFHG &70* LQWR WKH -XQH 3DULV PHHWLQJ NQRZLQJ DQG LQWHQGLQJ IURP WKH RXWVHW WKDW 0(1'(= ZRXOG QHYHU DOORZ WKH &70* WHDP WR PHHW ZLWK RU SUHVHQW GLUHFWO\ WR 3(8*(27¶6 &(2 ,Q WKH DOWHUQDWLYH 3/$,17,)) LV LQIRUPHG DQG EHOLHYHV DQG RQ WKDW EDVLV DOOHJHV WKDW WKH 3(8*(27 &(2 ZDV DZDUH RI WKH VLWXDWLRQ DQG KLPVHOI SDUWLFLSDWHG DQG FRRUGLQDWHG ZLWK 0(1'(= LQ KDYLQJ &70* WUDYHO KDOIZD\ DFURVV WKH ZRUOG IRU WKH PHHWLQJ DQG DOZD\V LQWHQGHG WR KDYH 0(1'(= WDNH LW LQ KLV VWHDG RU WR FDQFHO RU RWKHUZLVH IUXVWUDWH LW 7KH &70* WHDP REMHFWHG EXW KDG OLWWOH DELOLW\ WR FRPSHO WKH &(2 WR FRPH RXW RI KLV RIILFH DQG SURFHHGHG LQ JRRG IDLWK DV EHVW WKH\ FRXOG $W 0(1'(=¶6 EHKHVW WKH &70* PDGH WKHLU SUHVHQWDWLRQ WR D JURXS RI PRUH MXQLRU 3(8*(27 H[HFXWLYHV OHG DQG 3/$,17,)) LV LQIRUPHG DQG EHOLHYHV DQG RQ WKDW EDVLV DOOHJHV FRQWUROOHG E\ 0(1'(= 7KLV LQFOXGHG VKRZLQJ URXJK FXW IRRWDJH &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 84 of 132 Page ID #:84 IURP WKH VWLOO LQ SURJUHVV 3LFWXUH WKDW GHPRQVWUDWHG SURSRVHG YLVLELOLW\ IRRWDJH VHTXHQFHV ZLWK 3(8*(27 EUDQGLQJ RQ WKH VSLQQHU DQG LQ DW OHDVW RQH RXWGRRU ZDOO DG 7KH IRRWDJH ZDV DOO FRQVLVWHQW DW WKH YHU\ OHDVW ZLWK 3(8*(27¶6 LQSXWV RQ SODFHPHQW UHTXLUHPHQWV DQG GHVLUHV XS WR WKDW WLPH DQG FRPSOHWHO\ RU DW WKH YHU\ OHDVW VXEVWDQWLDOO\ WUXH WR WKH &DL GHVLJQ QRWHV &70*¶6 WHDP DOVR H[SUHVVO\ GLVFXVVHG ZLWK 0(1'(= WKDW DOWKRXJK WKH DJUHHPHQW RQO\ FDOOHG IRU WHQ VHFRQGV RI YLVLELOLW\ IRRWDJH $/&21 ZDV SUHSDUHG WR GHOLYHU WZHOYH VHFRQGV ZLWK QR DGGLWLRQDO DVNV IURP 3(8*(27 H[FHSW WKDW 3(8*(27 DFWXDOO\ PRYH IRUZDUG ZLWK WKH GHDO DV SUHYLRXVO\ DJUHHG LQ IDFW DV DOUHDG\ QRWHG $/&21 ZDV UHDG\ DEOH DQG ZLOOLQJ LI QHFHVVDU\ WR GHOLYHU DV PDQ\ DV VL[WHHQ VHFRQGV &70*¶6 WHDP DOVR H[SUHVVO\ H[SODLQHG WKDW WKH IRRWDJH SUHVHQWHG FRXOG VWLOO EH PRGLILHG LI 3(8*(27 GHVLUHG HVSHFLDOO\ ZLWK UHVSHFW WR YLVLELOLW\ ,QGHHG $/&21 ZDV SUHSDUHG WR EH DQG ZRXOG KDYH EHHQ KLJKO\ IOH[LEOH ZLWK DQG DFFRPPRGDWLQJ WR 3(8*(27 DV WR DOPRVW DQ\ FRPPHUFLDOO\ UHDVRQDEOH DGMXVWPHQWV WR WKH SODFHPHQW WKDW 3(8*(27 PLJKW KDYH UHTXHVWHG LQ JRRG IDLWK ERWK WR VDWLVI\ 3(8*(27 DV D SDUWQHU DQG WR JHW WKH PHGLD VSHQG ±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ase 2:19-cv-00245 Document 1 Filed 01/10/19 Page 85 of 132 Page ID #:85 3(8*(27 ORJR VDPSOHV IRU SRVVLEOH LQVHUWLRQ DQG RU VXEVWLWXWLRQ LQ WKH SODFHPHQW ZKLFK $/&21 ZDV LQ IDFW SUHSDUHG DQG DEOH WR GR LI 3(8*(27 KDG LQGHHG GHVLUHG LW )XUWKHU 0(1'(= HYHQ SURPLVHG WKDW VKH ZRXOG GLUHFW %(7& 3(8*(27¶6 DJHQF\ IRU SODQQLQJ DQG FDUU\LQJ RXW WKH FR SURPRWLRQ WR VHQG RYHU D GHFN 3RZHU3RLQW RU .H\QRWH SUHVHQWDWLRQ ZLWK D PRUH VSHFLILF DQG XSGDWHG FR SURPRWLRQ SODQ &70* UHWXUQHG WR WKH 8QLWHG 6WDWHV RSWLPLVWLFDOO\ DQG ERWK &70* DQG $/&21 UHPDLQHG UHDG\ ZLOOLQJ DEOH DQG DQ[LRXV WR SHUIRUP 2Q RU DERXW -XQH RQH RI 0(1'(=¶6 VXERUGLQDWHV 0\OHQH 3RQFHW HPDLOHG WKH SURPLVHG DGGLWLRQDO ORJR VDPSOHV WR &70* %XW QRWKLQJ HOVH 1R %(7& GHFN FDPH 2Q -XQH ZLWK PRUH WKDQ D ZHHN KDYLQJ SDVVHG VLQFH WKH -XQH PHHWLQJ DQG 0(1'(=¶6 SURPLVHV IURP LW DQG ZLWK WKH 3LFWXUH QRZ SDVW WKH RULJLQDOO\ SODQQHG 3LFWXUH /RFN &70* HPDLOHG 0(1'(= DJDLQ ³:H DVVXPH \RX KDYH QRZ VKDUHG WKH FDPSDLJQ LGHDV ZLWK \RXU &(2 DV SURPLVHG DQG XUJHQWO\ QHHG WR NQRZ KLV UHDFWLRQ DQG IHHGEDFN $V PHQWLRQHG LQ WKH PHHWLQJ ZH XUJHQWO\ QHHG WR VKDUH WKHVH LGHDV LQWHUQDOO\ QH[W ZHHN LQ RUGHU WR PHHW GHDGOLQHV DQG ZRXOG OLNH WR NQRZ ZKHQ WR H[SHFW WKH UHYLVHG GHFN IURP %(7& ´ (PSKDVLV LQ RULJLQDO 2Q -XQH 3(8*(27 ILQDOO\ VXUIDFHG DJDLQ DQG UHVSRQGHG LQ DQ HPDLO IURP 0(1'(=¶6 VXERUGLQDWH 3RQFHW 0(1'(= LV RSHQO\ FRSLHG RQ 3RQFHW¶V -XQH HPDLO DQG 3/$,17,)) LV LQIRUPHG DQG EHOLHYHV DQG RQ WKDW EDVLV DOOHJHV WKDW 0(1'(= HLWKHU VXEVWDQWLDOO\ GUDIWHG RU GLFWDWHG WKH HPDLO KHUVHOI DQG KDG 3RQFHW VHQG LW RU WKDW 0(1'(= UHYLHZHG LW DQG DSSURYHG LW SULRU WR 3RQFHW WUDQVPLWWLQJ LW DQG LQGHHG GLUHFWHG 3RQFHW WR VHQG LW ,Q KHU -XQH HPDLO UHVSRQVH 3RQFHW IRU 0(1'(= GHFOLQHG WR VD\ WKDW WKH SODFHPHQW PHW 3(8*(27¶6 VDWLVIDFWLRQ DQG LQVWHDG FRPPXQLFDWHG WKDW LW GLG QRW DQG GLUHFWHG &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 86 of 132 Page ID #:86 WKDW $/&21 UH GR LW 6RPH RI WKH 3RQFHW FRPPHQWV UHODWHG WR VXFK WKLQJV DV OLJKWLQJ RQ D SDUWLFXODU ORJR DQG UHTXHVWV WKDW LW EH LPSURYHG ±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¶V FKDUDFWHU . DQG WKH 3HXJHRW EUDQGHG VSLQQHU ZDV QRW VWURQJ HQRXJK ±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³5HJDUGLQJ WKLV SRWHQWLDO &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 87 of 132 Page ID #:87 SURPRWLRQDO FDPSDLJQ , QHHG WR UHLWHUDWH RXU SRVLWLRQ WKDW even if the placement was satisfying ZH FDQQRW FRPPLW RQ WKH SURPRWLRQDO FDPSDLJQ DQG RU DQ\ ILJXUHV UHJDUGLQJ WKH FDPSDLJQ ´ (PSKDVLV DGGHG )XUWKHU WKH -XQH 3RQFHW HPDLO DOVR GLVFORVHG WKDW 0(1'(= DFWXDOO\ KDG QRW \HW VKRZQ WKH SODFHPHQW SUHVHQWDWLRQ WR KHU &(2 RU HYHQ DV 3/$,17,)) XQGHUVWDQGV KHU FRPPXQLFDWLRQ WR any RI KHU FRUSRUDWH VXSHULRUV 5DWKHU WKH VWDWHPHQWV RI GLVVDWLVIDFWLRQ RQ EHKDOI RI 3(8*(27 ZLWK WKH SODFHPHQW ZHUH HQWLUHO\ IURP 0(1'(= KHUVHOI YLD 3RQFHW DQG QRW IURP WKH &(2 ,QGHHG 0(1'(= GLVFORVHG YLD WKH 3RQFHW HPDLO WKDW VKH ZRXOG QRW HYHQ EH PHHWLQJ ZLWK DQ\RQH DERYH KHU LQ WKH 3(8*(27 ³KLHUDUFK\´ DERXW WKH %5 RSSRUWXQLW\ DQG LVVXHV XQWLO -XQH )XUWKHU NQRZLQJ WKDW VKH KDG VXFFHHGHG LQ GHVWUR\LQJ DOO $/&21 QHJRWLDWLQJ OHYHUDJH ZLWK KHU UHSHDWHG GHOD\V EDG IDLWK QHJRWLDWLRQ WDFWLFV DQG RXWULJKW IDOVH VWDWHPHQWV RYHU WKH FRXUVH RI QRZ PRUH WKDQ \HDU 0(1'(= EROGO\ DVNHG WKDW &70* VHQG RYHU RQH RI LWV )UDQFH EDVHG H[HFXWLYHV WR SUHVHQW DJDLQ WR 3(8*(27 RQ -XQH &70*¶V 3UHVLGHQW OHYHO H[HFXWLYH ZKR KDG SHUVRQDOO\ DWWHQGHG WKH H[WUDRUGLQDU\ -XQH QRQ &(2 PHHWLQJ LQ 3DULV UHVSRQGHG WR 0(1'(= GLUHFWO\ RQ -XQH UHJDUGLQJ KHU VXERUGLQDWH¶V VWXQQLQJ -XQH HPDLO 7KH &70* H[HFXWLYH SRLQWHG RXW WR 0(1'(= WKDW KHU H[SUHVVLRQ RI RYHUDOO GLVVDWLVIDFWLRQ ZLWK WKH SODFHPHQW ZDV FRPSOHWHO\ FRQWUDU\ WR KHU FRPPHQWV LQ WKH -XQH PHHWLQJ +H DOVR H[SODLQHG KRZ PDQ\ RI 0(1'(=¶6 -XQH FRPSODLQWV DERXW WKH SODFHPHQW ZHUH FRPSOHWHO\ XQWHQDEOH REMHFWLYHO\ +H FRPPXQLFDWHG WKDW LW DSSHDUHG WKDW 3(8*(27 DQG 0(1'(= ZHUH VLPSO\ VWDOOLQJ DQG LQ WKH IDFH RI FULWLFDO XUJHQF\ RQ WLPLQJ LI DQ\ FR SURPRWLRQ ZDV HYHU JRLQJ WR KDSSHQ +H WROG 0(1'(= WKDW WKH PDWWHU ZRXOG KDYH WR EH WXUQHG RYHU WR WKH ODZ\HUV DW WKLV SRLQW &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 88 of 132 Page ID #:88 $/&21 DQG &70* FRQIHUUHG DQG GHFLGHG WR GR WKHLU EHVW WR DGGUHVV WKLQJV WKH\ UHDVRQDEO\ FRXOG LQFOXGLQJ 0(1'(=¶6 LQH[SOLFDEOH GHQLDOV WKDW DQ\ FR SURPRWLRQ GHDO KDG HYHU HYHQ EHHQ XQGHU QHJRWLDWLRQ 2Q RU DERXW -XQH $/&21 DQG &70* H[HFXWLYHV DIIL[HG VLJQDWXUHV IRU $/&21 DQG &70* WR WKH ZULWWHQ ORQJ IRUP YHUVLRQ WKDW KDG EHHQ VLJQHG DQG GHOLYHUHG E\ 0RQWURQ RQ -DQXDU\ DQG SUHSDUHG WR VHQG D IXOO\ H[HFXWHG FRS\ RI LW WR 0(1'(= %HIRUH WKH\ DFWXDOO\ GLG RQ -XQH 0(1'(= ILQDOO\ UHVSRQGHG WR &70*¶6 -XQH HPDLO DQG UHSHDWHG \HW DJDLQ DOO RI KHU EDG IDLWK DQG IDOVH GHQLDOV ,Q KHU -XQH HPDLO 0(1'(= GLG WKH IROORZLQJ D )DOVHO\ GHQLHG DJDLQ WKDW 3(8*(27 KDG HYHU JLYHQ DQ\ QHJRWLDWLQJ RU FRQWUDFWLQJ DXWKRULW\ WR 38%/,&,6 DW DOO DQG IDOVHO\ GHQLHG WKDW WKH ³'HOHJDWLRQ RI 6LJQDWXUH $XWKRULW\´ GRFXPHQWV WKDW VKH KDG VLJQHG WZLFH KHUVHOI JDYH 38%/,&,6 DQ\ DXWKRULW\ DW DOO RQ DQ\WKLQJ E )DOVHO\ GHQLHG HYHU EHLQJ DZDUH RI WKH -XO\ /2, F )DOVHO\ GHQLHG WKDW 3(8*(27 KDG HYHU VLJQHG DQ\ FRQWUDFW HYHQ WKRXJK 38%/,&,6 KDG VLJQHG ERWK WKH -XO\ /2, DQG WKH -DQXDU\ GUDIW RI WKH SURSRVHG ORQJ IRUP ERWK WLPHV H[SUHVVO\ RQ 3(8*(27¶6 EHKDOI G 5HLWHUDWHG WKDW UHJDUGOHVV RI DQ\ VROXWLRQ WKDW PLJKW EH IRXQG DV WR WKH SODFHPHQW 3(8*(27 ZRXOG QHYHU ILQDQFH D FR SURPRWLRQ PHGLD VSHQG LWVHOI DQG WKDW DOO 3(8*(27 ZRXOG HYHU SD\ ZRXOG EH WKH SODFHPHQW IHH HYHQ WKRXJK 3(8*(27 KDG ZRQ WKH ELGGLQJ LQ 0D\ VSHFLILFDOO\ E\ VZHHWHQLQJ LWV ELG ZLWK WKH FR SURPRWLRQ FRPPLWPHQW DQG HYHQ WKRXJK WKH ELG KDG EHHQ WUDQVPLWWHG IRU 3(8*(27 E\ %(1 QRW 38%/,&,6 H 0(1'(= 5HSHDWHG WKDW HYHQ DV WR WKH SODFHPHQW WKH &(2¶6 UHYLHZ DQG DSSURYDO ZDV UHTXLUHG DQG IXUWKHU UHYHDOHG WKDW VWXQQLQJO\ 0(1'(= KDG again GHOD\HG WKDW 0(1'(= KDG FDQFHOOHG WKH -XQH &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 89 of 132 Page ID #:89 PHHWLQJ UHIHUHQFHG LQ 3RQFHW¶V -XQH HPDLO I /LNH &KDUOHV 6FKXOW]¶V /XF\ WHHLQJ XS WKH IRRWEDOO IRU D SODFHNLFN WR VHH LI &KDUOLH %URZQ ZRXOG EH JXOOLEOH HQRXJK WR OHW KHU SXOO LW DZD\ IURP KLP DW WKH ODVW PRPHQW \HW DJDLQ 0(1'(= DVNHG &70* WR VHQG D WHDP RYHU DJDLQ IRU KHU &(2 WR EH DIIRUGHG \HW DQRWKHU FKDQFH WR UHYLHZ WKH SODFHPHQW IRRWDJH $W WKH VDPH WLPH DQG LQ WKH YHU\ QH[W VHQWHQFH 0(1'(= DOVR PDGH FU\VWDO FOHDU WKDW VXFK DQ HIIRUW ZRXOG EH IXWLOH UHJDUGOHVV ³, DOVR UHLWHUDWH RXU SRVLWLRQ WKDW even if the product placement is approved LW GRHV QRW PHDQ WKDW WKHUH ZLOO EH D SURPRWLRQDO FDPSDLJQ ´ (PSKDVLV DGGHG 2Q -XQH D &70* ODZ\HU UHVSRQGHG WR 0(1'(= YLD HPDLO &70*¶6 -XQH ODZ\HU HPDLO DWWDFKHG WKH -DQXDU\ YHUVLRQ RI WKH ORQJ IRUP DV VLJQHG E\ 0RQWURQ DQG QRZ ZLWK VLJQDWXUHV DIIL[HG IRU $/&21 DQG &70* ZLWK D FOHDU VWDWHPHQW WKDW DOWKRXJK $/&21 DQG &70* ZHUH UHVHUYLQJ DOO ULJKWV WKH\ ERWK UHPDLQHG UHDG\ ZLOOLQJ DQG DEOH WR PRYH IRUZDUG ZLWK WKH SDUWQHUVKLS LQFOXGLQJ LI UHTXLUHG LQ VDWLVIDFWLRQ RI DOO WHUPV DV VWDWHG LQ WKH -DQXDU\ ORQJ IRUP ± LI 3(8*(27 ZRXOG ZLWKGUDZ LWV UHQHJLQJ RQ WKH FR SURPRWLRQ DQG FRPPLW WR DFWXDOO\ VWDUW GRLQJ LW %\ WKLV FRPPXQLFDWLRQ $/&21 DQG &70* ERWK PHDQW DQG 0(1'(= DQG 3(8*(27 ERWK FOHDUO\ XQGHUVWRRG DQG NQHZ WKDW DPRQJ RWKHU WKLQJV UHJDUGOHVV RI 3(8*(27¶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± EXW DOO RQO\ LI 3(8*(27 ZRXOG UH FRPPLW WR DQG DFWXDOO\ FRPPHQFH &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 90 of 132 Page ID #:90 PRYLQJ IRUZDUG ZLWK WKH FR SURPRWLRQ DV KDG EHHQ ORQJ DJUHHG DQG UHOLHG RQ E\ $/&21 WR LWV H[WUHPH GHWULPHQW 7KH QH[W GD\ -XQH 0(1'(= UHVSRQGHG 0(1'(= GHQLHG HYHU KDYLQJ VHHQ WKH -DQXDU\ GRFXPHQW VLJQHG E\ 0RQWURQ RU DQ\ RWKHU GUDIW RI WKH ORQJ IRUP DJUHHPHQW )XUWKHU 0(1'(= DVVHUWHG HVVHQWLDOO\ WKDW VKH ZDV HQWLUHO\ XQDZDUH WKDW 38%/,&,6 ZDV HYHQ QHJRWLDWLQJ VXFK D GRFXPHQW RQ 3(8*(27¶6 EHKDOI 3/$,17,)) LV LQIRUPHG DQG EHOLHYHV DQG RQ WKDW EDVLV DOOHJHV XQGHU DW OHDVW RQH IDFWXDO DOWHUQDWLYH WKDW WKLV ZDV EODWDQWO\ IDOVH RQ DOO SRLQWV ,QGHHG 3/$,17,)) LV LQIRUPHG DQG EHOLHYHV DQG RQ WKDW EDVLV DOOHJHV WKDW DW D EDUH PLQLPXP LQ FRQQHFWLRQ ZLWK WKH 38%/,&,6 3(8*(27 IHH GLVSXWH LQ WKH ILUVW IHZ PRQWKV RI 38%/,&,6¶6 LQWHUQDO OHJDO WHDP KDG VKRZQ 0(1'(= WKH -DQXDU\ GUDIW VLJQHG E\ 0RQWURQ DQG KDG VRXJKW DQG UHFHLYHG 0(1'(=¶6 UHYLHZ DQG H[SOLFLW DSSURYDO RI WKH SURSRVHG $SULO UHYLVHG GUDIW RI WKH ORQJ IRUP VHQW WR $/&21 E\ 38%/,&,6¶6 LQWHUQDO OHJDO WHDP $JDLQ $/&21 H[SUHVVO\ UHVHUYHV WKH ULJKW WR DOOHJH DOWHUQDWLYH IDFWV WKDW 3(8*(27¶6 FRQWHQWLRQ WKDW HVVHQWLDOO\ 38%/,&,6 LV O\LQJ DERXW LPSRUWDQW WKLQJV RU GLG LV LQVWHDG ZKDW KDSSHQHG +RZHYHU DJDLQ 3(8*(27 KDV QRW GHOLYHUHG WR $/&21 DQ\ VXSSRUW IRU DQ\ VXFK FRQWHQWLRQV E\ 3(8*(27 DQG $/&21¶6 XQGHUVWDQGLQJ LV WKDW 38%/,&,6 HQWLUHO\ RU VXEVWDQWLDOO\ GHQLHV WKHP 0(1'(= ZHQW RQ LQ KHU -XQH HPDLO WR UHMHFW RQ EHKDOI RI 3(8*(27 $/&21¶6 DQG &70*¶6 UHVHUYHG ULJKWV RIIHU WR KDYH DOO SDUWLHV DJUHH WR EH ERXQG E\ WKH -DQXDU\ ORQJ IRUP VLJQHG E\ 0RQWURQ LI 38%/,&,6 ZRXOG ZLWKGUDZ LWV EUHDFKHV DQG UH DIILUP LWV SURPLVHV WR SHUIRUP WKH FR SURPRWLRQ DQG DFWXDOO\ PRYH LW IRUZDUG ,QVWHDG 0(1'(= FRPPXQLFDWHG \HW DJDLQ FOHDUO\ 3(8*(27¶6 XWWHUO\ EDG IDLWK GHQLDO WKDW 3(8*(27 KDG DQ\ ELQGLQJ REOLJDWLRQV WR $/&21 ZKDWVRHYHU DQG FHUWDLQO\ UHIXVHG WR EH ERXQG E\ WKH WHUPV DV VWDWHG LQ WKH -DQXDU\ GUDIW ORQJ IRUP RU DQ\ RWKHU WHUPV 0(1'(= IXUWKHU PDGH FOHDU E\ KHU -XQH HPDLO WKDW LI $/&21 DQG &70* ZRXOG &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 91 of 132 Page ID #:91 QRW HQJDJH ZLWK 3(8*(27 RQ UHQHJRWLDWHG WHUPV IRU D SODFHPHQW RQO\ ZLWK QR ELQGLQJ 3(8*(27 FRPPLWPHQW WR DQ\ FR SURPRWLRQ FDPSDLJQ WKHQ 3(8*(27 ZDV QRW LQWHUHVWHG LQ DQ\ IXUWKHU GLVFXVVLRQV Peugeot Receives the Benefit of the Placement without Any Co-Promotion and Still Refuses to Pay Alcon Even a Single Penny $IWHU 0(1'(=¶6 DQG 3(8*(27¶6 -XQH DEDQGRQPHQW RI WKH 3LFWXUH DQG IXUWKHU GLVFXVVLRQV DERXW LW $/&21 DQG &70* QRQHWKHOHVV FRQWLQXHG WR DFW UHDVRQDEO\ DQG LQ JRRG IDLWK WR VD\ WKH OHDVW ,Q -XO\ D OLIH VL]H UHDO ZRUOG PRGHO RI .¶V 3HXJHRW EUDQGHG VSLQQHU ZLWK DOO RI &DL¶V GHVLJQ QRWHV ZDV WKH FHQWHUSLHFH RI DQ LPPHUVLYH IDQ PDUNHWLQJ H[SHULHQFH DW 6DQ 'LHJR &RPLF &RQ &RPLF &RQ LV QRZ RQH RI WKH HQWHUWDLQPHQW LQGXVWU\¶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¶V UHOHDVH QHDUHG DQG ZRUG EHJDQ WR VSUHDG WKDW .¶V VSLQQHU ZRXOG EH D 3HXJHRW PXOWLSOH QHZV RXWOHWV FRQWDFWHG $/&21 ZDQWLQJ WR GR VWRULHV IRFXVLQJ RQ 3HXJHRW¶V UROH LQ %5 +RZHYHU WKHVH SXEOLFLW\ RSSRUWXQLWLHV DOO SDVVHG E\ ZLWK 0(1'(= KXQNHUHG LQ KHU RIILFH LQ 3DULV EORFNLQJ 3(8*(27¶V SDUWLFLSDWLRQ RU HYHQ IXOO FRUSRUDWH NQRZOHGJH RI WKH VLWXDWLRQ DV 0(1'(= JXDUGHG KHU RZQ SROLWLFDO FRUSRUDWH FDUHHU DW WKH H[SHQVH RI VR YHU\ PDQ\ SHRSOH DQG FRPSDQLHV ZKR ZRUNHG RQ %5 DQG WKH SODFHPHQW &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 92 of 132 Page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¶6 EUDQG LQ WKH 3LFWXUH DQG LWV VWRU\ ,QGHHG WKH WUXWK IDU EH\RQG FRXQWLQJ VHFRQGV RI ORJRV LV WKDW &DL¶V GHVLJQ QRWHV LQWHQGHG WR PDNH WKH HQWLUH VSLQQHU VLQJ ZLWK 3(8*(27¶6 WUDGH GUHVV IURP DOPRVW HYHU\ DQJOH DUH RQVFUHHQ WKURXJKRXW WKH 3LFWXUH 7KH VSLQQHU DFFRPSDQLHV . WKURXJK DOPRVW HYHU\ DVSHFW RI KLV TXHVW 3(8*(27¶6 WULSOH FODZ EUDNH OLJKWV EODVWLQJ RYHU D G\VWRSLDQ 6RXWKHUQ &DOLIRUQLD IDUPVFDSH DUH DOPRVW WKH ILUVW WKLQJ WKH DXGLHQFH VHHV LQ WKH HQWLUH ILOP 7KH ILOP¶V ILUVW VHTXHQFHV IHDWXUH *RVOLQJ LQWHUDFWLQJ ZLWK WKH YHKLFOH DQG VSHDNLQJ WR LW DOPRVW DV D OLYLQJ FRPSDQLRQ ZLWK *RVOLQJ¶V IDFH QH[W WR 3(8*(27¶6 ORJR PXOWLSOH WLPHV 7KH YLVLELOLW\ RI WKH 3(8*(27 ORJR LQ WKHVH VHTXHQFHV DQG RWKHUV FRXOG KDYH EHHQ HYHQ KLJKHU KDG 3(8*(27 QRW DEDQGRQHG WKH SURFHVV *RVOLQJ¶V FORVH FRQQHFWLRQ WR WKH VSLQQHU JRHV RQ WKURXJKRXW WKH ILOP DOO WKH ZD\ WR WKH ILOP¶V ILQDO VHTXHQFHV ZKHQ . ILQDOO\ OD\V EDFN LQ WKH IDOOLQJ VQRZ WR UHVW ZLWK KLV VSLQQHU D IHZ IHHW DZD\ $WWDFKHG KHUHWR DV ([KLELW ' DQG LQFRUSRUDWHG KHUHLQ E\ UHIHUHQFH DUH SKRWRJUDSKLF VWLOOV RI VFHQHV IURP WKH 3LFWXUH LQFRUSRUDWLQJ 3(8*(27¶6 EDGJLQJ DQG WUDGH GUHVV &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 93 of 132 Page ID #:93 7KH SODFHPHQW DQG LWV ULSSOH HIIHFWV WDNH 3(8*(27¶6 EUDQG ORJRV DQG WUDGH GUHVV WR FRQVXPHUV ZHOO SDVW MXVW WKH ILOP DV LW DSSHDUV RQ WKHDWHU DQG VWUHDPLQJ VFUHHQV 6RPH RI WKH ILOP¶V PRVW SURPLQHQW RQH VKHHWV PDUNHWLQJ SRVWHUV IHDWXUH *RVOLQJ QH[W WR WKH 3HXJHRW VSLQQHU ,Q IDFW WKH YHU\ ILUVW RQH VKHHW UHOHDVHG WR D KXQJU\ DXGLHQFH ILOOHG ZLWK DQWLFLSDWLRQ IRU WKH ORQJ GRUPDQW Blade Runner SURSHUW\ ZDV *RVOLQJ VWDQGLQJ LQ IRJ QH[W WR WKH VSLQQHU¶V UHG OLW WULSOH FODZ 3HXJHRW WUDGHPDUN EUDNH OLJKWV MXVW DV &DL PDUNHG WKHP XS 6HH ([KLELW ( >2QH 6KHHW@ $XGLHQFHV DQG DXWRPRWLYH LQGXVWU\ SXEOLFDWLRQV DURXQG WKH ZRUOG UHFRJQL]HG DQG JHQHUDOO\ UHDFWHG RYHUZKHOPLQJO\ IDYRUDEO\ WR WKH SODFHPHQW ZLWK SOHDVDQW VXUSULVH DQG DSSUHFLDWLRQ WR VHH WKDW .¶V VSLQQHU ZDV D 3HXJHRW $QG LQ VRPH PDUNHWV WKH SODFHPHQW ZDV VHHQ DV D WUXH PLOHVWRQH IRU 3(8*(27 ± HVSHFLDOO\ WKH 8QLWHG 6WDWHV +HUH LQ WKH 8 6 VRPH RI WKH EXVLQHVV FRPPXQLWLHV PRVW SURPLQHQW ZDWFKHUV FOHDUO\ WRRN QRWH RI WKH SODFHPHQW $QG WKH\ UHFRJQL]HG WKDW E\ LW 3(8*(27 KDG WDNHQ D ILUVW JLDQW DQG SRVLWLYH VWHS WRZDUG UHEXLOGLQJ LWV EUDQG LQ WKH 8 6 PDUNHW IURP ZKLFK LW KDG EHHQ DEVHQW IRU DQ HQWLUH JHQHUDWLRQ )RU H[DPSOH RQ 2FWREHU WKH 3LFWXUH¶V 5HOHDVH 'DWH Bloomberg SXEOLVKHG D WZR SDJH VWRU\ RQ %5 ¶V WUHDWPHQW RI EUDQGV DQG LWV GHHSHU UHOHYDQFH WR EXVLQHVV KLVWRU\ 7KH 3HXJHRW SODFHPHQW IHDWXUHV SURPLQHQWO\ DQG RYHUZKHOPLQJO\ SRVLWLYHO\ LQ WKH VWRU\ 7KH Bloomberg VWRU\ HIIHFWLYHO\ HTXDWHV WKH ORQJ KLEHUQDWHG 3HXJHRW¶V EUDQG VWDWXUH ZLWK &RFD &ROD RQH RI WKH ZRUOG¶V PRVW UHYHUHG EUDQGV ,W LV KDUG WR LPDJLQH KRZ PXFK SDLG 8 6 WHOHYLVLRQ UDGLR DQG SULQW DGYHUWLVLQJ PLJKW KDYH EHHQ UHTXLUHG IRU 3(8*(27 WR DFKLHYH VXFK D EUDQGLQJ PDJLF WULFN ± WR JR DOPRVW RYHUQLJKW LQ WKH 8 6 PDUNHW IURP DOPRVW QR UHFRJQLWLRQ WR EHLQJ HTXDWHG WR WKH UHYHUHG &RFD &ROD EUDQG DEVHQW WKH %5 SODFHPHQW &203/$,17 Case 2:19-cv-00245 Document 1 Filed 01/10/19 Page 94 of 132 Page ID #:94 3(8*(27 QHYHU H[HFXWHG DQ\ SURPRWLRQ DQG WKH 3LFWXUH XQGRXEWHGO\ VXIIHUHG IRU LW 7KH 3LFWXUH KDG DW OHDVW PLOOLRQ OHVV LQ SDLG PHGLD WR VXSSRUW WKH ILOP¶V UHOHDVH WKDQ H[SHFWHG QRW WR PHQWLRQ ORVW SXEOLFLW\ VKRUW IRUP YLGHR SUH DPEOHV QHYHU PDGH RU UHOHDVHG WR FRQVXPHUV WR SUH WHOO WKH VWRU\ RI .¶V VSLQQHU DV D 3(8*(27 DQG RWKHU ZD\V WR DGYDQFH WKH ILOP ZLWK FRQVXPHUV EH\RQG HYHQ MXVW SDLG PHGLD WKDW 3(8*(27 VKRXOG KDYH EHHQ SDUW RI DQG HYHQ OHG %XW WKDW 3(8*(27 ZDVQ¶W DQG GLGQ¶W 3(8*(27¶6 EDG IDLWK IDLOXUH WR SHUIRUP LWV FR SURPRWLRQDO REOLJDWLRQV DOPRVW FHUWDLQO\ QHJDWLYHO\ DIIHFWHG WKH 3LFWXUH¶V ER[ RIILFH SHUIRUPDQFH %XW HYHQ DV WKH 3LFWXUH DFWXDOO\ SHUIRUPHG ZLWKRXW WKH VXEVWDQWLDO PDUNHWLQJ DQG SURPRWLRQ VXSSRUW WKDW 3(8*(27 ZDV VXSSRVHG WR SURYLGH %5 VWLOO JURVVHG DERXW PLOOLRQ LQ ZRUOGZLGH ER[ RIILFH PHDQLQJ WKDW LQ LWV LQLWLDO WKHDWULFDO UHOHDVH DORQH LW DQG WKH 3(8*(27 VSLQQHU LQWHJUDO WR WKH VWRU\ IURP EHJLQQLQJ WR HQG ZDV VHHQ E\ RYHU WKLUW\ PLOOLRQ SHRSOH HDFK RI ZKRP ZHUH H[SRVHG WR VHYHUDO minutes RI VFUHHQ WLPH RI 3(8*(27 WUDGH GUHVV DQG EUDQGLQJ 7KH 3LFWXUH DOVR UHFHLYHG H[WUDRUGLQDULO\ SRVLWLYH DXGLHQFH UHVSRQVH ZLWK DQ SRVLWLYH DXGLHQFH UHDFWLRQ RQ 5RWWHQ 7RPDWRHV 7KH FULWLFDO DFFODLP IRU WKH 3LFWXUH ZDV HYHQ JUHDWHU $WWDFKHG KHUHWR DV ([KLELW ) LV D OLVW RI DZDUGV ZRQ E\ %5 ,W LV SDJHV ORQJ $PRQJ QXPHURXV RWKHU DZDUGV %5 ZDV QRPLQDWHG IRU ILYH $FDGHP\ $ZDUGV DQG LW ZRQ WZR %HVW &LQHPDWRJUDSK\ DQG %HVW 9LVXDO (IIHFWV ± ERWK QRWDEO\ DUJXDEO\ WKH KLJKHVW UHFRJQLWLRQ D ILOP FDQ UHFHLYH DV WR WKH ZD\ WKH ILOP LQFOXGLQJ WKH VSLQQHU ORRNV RQ WKH VFUHHQ ,*1 QDPHG %5 WKH %HVW 0RYLH RI WKH