Яресько (петиция) by Sergey Kharchenko

EFiled: Dec 19 2012 11 :34A Transaction ID 48501489 Case No. 7936-VCP

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE EMERGING EUROPE GROWTH FUND, L.P., and HORIZON CAPITAL GP LLC, a Delaware limited liability company, Plaintiffs, v. IHOR FIGLUS, Defendant.

) ) ) ) ) ) ) ) )

C.A. No. 7936-VCP REDACTED PUBLIC VERSION-FILED DECEMBER 19, 2012

PLAINTIFFS' OPENING BRIEF IN SUPPORT OF THEIR MOTION FOR PRELIMINARY INJUNCTION

Richard P. Rollo (#3994) Kevin M. Gallagher (#5337) Richards, Layton & Finger, P.A. 920 North King Street Wilmington, DE 19801 302-65 l- 7700 Attorneys/hr Plaintiffs Emerging Europe Growth Fund, L.P. and Horizon Capital GPLLC Dated: December 12, 2012

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TABLE OF CONTENTS

TABLE OF AUTHORITIES

PRELIMINARY STATEMENT

NATURE AND STAGE OF THE PROCEEDINGS

STA1'EMEN"f OF FACTS

FIGLUS AND HIS EX-WIFE JOINTLY INVEST IN THE PARTNERSHIP

II.

INVESTORS ARE BOUND BY A CONFIDENTIALITY PROVISION

III. FTGLUS BREACHED THE CONFIDENTIALITY PROVISION

IV. FIGLUS IGNORED A CEASE AND DESIST LETTER.

ARGUMENT

PLAINTIFFS ARE ENTITLED TO A PRELIMINARY INJUNCTION

A. Plaintiffs Have A Reasonable Probability Of Success On The Merits

Figlus Is Bound By The Confidentiality Provision

Figlus Breached The Confidentiality Provision

Plaintiffs Have Established Irreparable Harm

The Balance Of Equities Weighs In Favor Of The Plaintiffs

II. FIGLUS IS OBLIGATED TO REIMBURSE PLAINTIFFS' ATTORNEYS' FEES "AS THEY ARE INCURRED."

CONCLUSION

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TABLE OF AUTHORITIES

Page(s) CASES

Concord Steel, Inc. v. Wilmington Steel Processing Co., 2008 WL 902406 (Del. Ch. Apr. 3, 2008)

Emerging Europe Growth Fund, L.P. v. Figlus, C.A. No. 7936-VCP (Del. Ch. Oct. 16, 2012) (TRANSCRIPT)

Graham v. State Farm Mut. Auto. Ins. Co., 565 A.2d 908 (Del. 1989)

Horizon Pers. Commc'ns, Inc. v. Sprint Corp., 2006 WL 2337592 (Del. Ch. Aug. 4, 2006)

Hough Assocs., Inc. v. Hill, 2007 WL 148751 (Del. Ch. Jan. 17, 2007)

In re K-Sea Trans. Partners L.P. Unitholders Litig., 2011WL2410395 (Del. Ch. June 10, 2011)

Martin Marietta Materials, Inc. v. Vulcan Materials Co., 2012 WL 5257252 (Del. Ch. May 4, 2012)

In re Micro met, Inc. S'holders Litig., 2012 WL 681785 (Del. Ch. Feb. 29, 2012)

Pellaton v. Bank ofNew York, 592A.2d473 (Del.1991)

Potter v. Cmty. Commc'ns Corp., 2004 WL 550747 (Del. Ch. Mar. 11, 2004)

Roseton OL, LLC v. Dynegy Holdings Inc., 2011 WL 3275965 (Del. Ch. July 29, 2011)

SLC Beverages, inc. v. Burnup & Sims, Inc., 1987 WL 16035 (Del. Ch. Aug. 20, 1987) Stirling Inv. Hldgs., Inc. v. Glenoit Universal, Ltd., 1997 WL 74659 (Del. Ch. Feb. 12, 1997) !]

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27 28

Tafeen v. Homestore Inc.,

2005 WL 1314782 (Del. Ch. May 26, 2008)

True N Commc'ns, Inc. v. Publicis, S.A., 711 A.2d 34 (Del. Ch. 1997)

Vitalink P harm. Servs., Inc. v. Grancare, Inc., 1997 WL 458494 (Del. Ch. Aug. 7, 1997)

iii RLFl 7721263v.l

PRELIMINARY

STATEMENT

Through this motion, plaintiffs Emerging Europe Growth Fund, L.P. "Partnership" or "EEGF")

(the

and Horizon Capital GP LLC (the "General Partner";

collectively, "Plaintiffs") seek a preliminary injunction to prevent defendant Ihor Figlus ("Figlus" or "Defendant"), a Limited Partner, from further disclosing non-public information in violation of a confidentiality provision (the "Confidentiality Provision") contained in the operative Partnership agreement (the "Partnership Agreement"). 1 As discussed below, the preliminary injunction standard is easily met. First, Plaintiffs have a reasonable probability of success on the merits. Figlus and his former wife, Natalie A. Jaresko ("Jaresko"), jointly invested as Limited Partners in the Partnership.

In connection with that investment, Figlus voluntarily executed a

subscription agreement (the "Subscription Agreement"), which bound him to the Partnership Agreement terms, and granted the General Partner a power of attorney to execute the Partnership Agreement on his behalf. That Partnership Agreement contains a Confidentiality Provision, which prevents Limited Partners from disclosing non-public information relating to the General Partner or the Partnership.

During his deposition,

A true and correct copy of the Partnership Agreement is attached as Exhibit A, Tab 5 to

the Affidavit of Kevin M. Gallagher, Esq., filed herewith (the "Gallagher Affidavit").

All

citations to "Ex. _" refer to exhibits attached to the Gallagher f\ffida':'..,it; and citations to "Figlus Dep. at _" refer to Defendant's deposition testimony, also filed herewith.

Unless otherwise

defined, capitalized terms have the meanings set forth in the verified complaint (the "Complaint") and, unless otherwise noted, emphasis is added.

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Figlus essentially admitted that the information and documents at issue in this action fall within

the Confidentiality

foregoing

assertion,

Provision.

While

Figlus

will undoubtedly

he cannot fairly dispute that the Plaintiffs

dispute

the

have demonstrated

reasonable probability of success on the underlying merits. Second,

Plaintiffs

have established

investment, Figlus contractually

irreparable

harm.

At the time of his

stipulated that a breach of the Confidentiality

Provision

would result in irreparable harm, and that Plaintiffs would be entitled to an injunction and specific performance. disclosure

Even without that contractual stipulation, the improper use and

of information

that is subject to a confidentiality

agreement

constitutes

irreparable harm under Delaware law. Third, the balance of the equities weighs in favor of Plaintiffs.

Through this

action, Plaintiffs seek to enforce their bargained-for contractual rights. In contrast, Figlus seeks to avoid contractual

obligations

he voluntarily

undertook.

The excuses

and

justifications offered by Figlus, to date, do not pass muster. While Figlus would have this Court believe that his breach of the Confidentiality

Provision

was "whistle-blowing"

motivated by a desire to protect a purported "agency of the government States," the discovery record demonstrates

that the breach was actually an attempt by

Figlus to harm his ex-wife, who is a co-founder executive officer of the Partnership.

of the United

of the General Partner and the chief

Simply put, the equities do not permit Figlus to

violate the Partnership Agreement to use Plaintiffs' non-public information as a weapon in his divorce dispute (or for revenge).

Accordingly, Plaintiffs respectfully submit that 2

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this Court should convert the existing temporary restraining order into a preliminary injunction. In addition, Plaintiffs respectfully seek an order directing Figlus to reimburse Plaintiffs for their "legal and other expenses ... as they are incurred in connection with" this action, as Figlus is contractually bound to do under the Subscription Agreement. By refusing to pay Plaintiffs' legal costs "as they are incurred" Figlus is depriving Plaintiffs of the benefit of their contractual bargain (e.g., ignoring the advancement component and converting his obligation into a pure indemnification provision). remedy, will not make Plaintiffs whole.

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An after-the-fact

NATURE AND STAGE OF THE PROCEEDINGS

On October 10, 2012, Plaintiffs filed their Complaint, which seeks, among other things, (i) injunctive relief prohibiting Defendant from disclosing Plaintiffs' non-public information to third parties, including, but not limited to,

.REDACTED

(ii) an award of

damages resulting from Figlus' breach of the Partnership Agreement, indemnification pursuant to the terms of the Subscription Agreement.'

and (iii)

At that time,

Plaintiffs also filed a motion to expedite and motion for a temporary restraining order. 3 On October 16, 2012, the Court granted both motions during a telephonic hearing and, subsequently, issued a temporary restraining order dated October 19, 2012.4 On October 23, 2012,5 Defendant answered the Complaint. A hearing on Plaintiffs' motion for a preliminary injunction (the "PI Motion") is scheduled for December 21, 2012, and this is Plaintiffs' opening brief in support of their PI Motion.

Trans. 10 46878969.

Trans. ID 46878969.

Trans. ID 47163533.

See Trans. ID 47292497; Trans. ID 47812632. 4

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STATEMENT OF FACTS I.

FIGLUS AND HIS EX-WIFE .JOINTLY INVEST IN THE PARTNERSHIP. In February 2006, Figlus executed the Subscription Agreement and committed

REDACTED

(as of that time) in exchange for Limited Partnership interests on the terms and

conditions set forth in the Subscription Agreement and the Partnership Agreement.

The

Limited Partnership interests are jointly held by Figlus and his ex-wife, Jaresko, who is a co-founder of the General Partner and the chief executive officer of the Partnership.

The Subscription Agreement contains multiple representations and warranties by Figlus, including that he had "been furnished with, and ha[ d] carefully read, the ...

Ex. A, Tab l at Figlus 006215 (Subscription Agreement) (" l. The subscriber named on

the signature page to this Subscription Agreement (the "Subscriber") hereby applies to become a limited partner of ... the "Partnership"[],

on the terms and conditions set forth in this

Subscription Agreement and in the Amended and Restated Agreement of Limited Partnership of the Partnership, as the same may be amended and/or restated from time to time (the "Partnership Agreement"), a copy of which has been furnished to the Subscriber."), 006216-17

Figlus

("7. The Subscriber hereby represents and warrants to, and agrees with, the General

Partner and the Partnership that the following statements are true as of the date hereof and will be true and correct as of the Closing Date applicable to the Subscriber: . . . (g) ... Subscription

Agreement constitutes, and the Partnership Agreement

this

when executed and

delivered will constitute, a valid and binding agreement r~f the Subscriber, enforceable against the Subscriber in accordance with its terms."); Figlus Dep. at 6-7 (admitting Figlus signed the Subscription Agreement), 14 (admitting that by signing the Subscription Agreement, Figlus was agreeing to its terms). 7

Figlus Dep. at 21 (stating Jaresko was a founder), 198 ("Q. You have a joint interest in

the LP's, right? A. Yes. Q. You and Natalie? A. Yes."). 5

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Partnership Agreement. "8 Notwithstanding the foregoing, Figlus now claims that he did not read the Partnership Agreement before he executed the Subscription Agreement (or at any time prior to his deposition on December 6, 2012).

Figlus also now claims that he

did not even read the Subscription Agreement before he executed it. 10 Nevertheless, by executing the Subscription Agreement signature page and returning it to the Partnership, Figlus agreed to be bound the terms of the Subscription Agreement and the Partnership Agreement11

a fact he reluctantly admitted at deposition.

Ex. A, Tab I at Figlus 006217.

Figlus Dep. at 10, 12, 15, 20-21, 22, 130, 180-181, 213, 214, 217-218,

240, 296 ("Q.

Final question and then we'll take a break and I'm pretty sure I have no further questions. Have you read the partnership agreement? A. Have I read it? No. Q. As of today? A. No.").

째 Figlus Dep. at 10,

12, 15, 29, and 31.

Ex. A, Tab l at Figlus 006223 ("By executing the signature page to this Subscription

Agreement, the Subscriber [i.e., Figlus] agrees to be bound by the foregoing."); see also Figlus Dep. at 8 ("I just signed the signature pages and had them faxed back to her office."); 24 (admitting Figlus voluntarily executed the Subscription Agreement and that no one forced him to sign the agreement). 12

Figlus Dep. at 23-27 (claiming

Figlus

was not bound by Section 7(g) of the

Subscription Agreement, which agreed to be bound by the Partnership Agreement); 30-32 (claiming Figlus was not bound by Section 14 of the Subscription Agreement, which granted the General Partner a proxy to execute the Partnership Agreement on behalf of Figlus); 32-33 (admitting Figlus was bound by both Sections 7(g) and 14 of the Subscription Agreement); see also id. at 32 ("Q. Just so I understand and the record is clear,

if I, as ':,!).individual,

who is about

to sign a contract simply close my eyes and don't read it but sign it, 1 have the ability to later say nothing in that document binds me, is that your understanding, sir? ... A. No, I guess not. Q. That's not your understanding? A. I guess you are bound by it."). 6

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On September 29, 2006, Figlus and Jaresko committed an additional

REDACTED

the Partnership (in exchange for additional Partnership interests). In connection with that follow-on investment, Figlus executed another signature page for the Subscription Agreement and an "Investor Suitability Certificate."

The latter document is one page

and contains two certifications (conspicuously located one inch above Figlus' signature): 1. The representations and warranties of the Investor set forth in the Subscription Agreement continue to be true and

correct in all respects as of the date hereof. 2. The Investor understands that the Fund is relying on this Certificate ... and ... the accuracy of the representations and warranties of the Investor in the Subscription Agreement. t4 Figlus admits reading the first certification before signing, but claims that he simply "didn't pay attention to it." is As for the second certification, Figlus claims he did not read it. 16 Nevertheless, by executing and returning the documents to the Partnership, Figlus again agreed to be bound the terms of the Subscription Agreement and the Partnership Agreement (whether or not he took the time to read those documents).

Ex. A, Tab 1 at Figlus 006234, 006235; Figlus Dep. at 7, 19 _(confirming his signature). .... /

Ex. A, Tab 1 at Figlus 006234.

Figlus Dep. at 18-19.

Id.

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Section 8 of the Subscription Agreement obligates Figlus to indemnify the Plaintiffs for any losses resulting from his breach of the Subscription Agreement and certain other documents.

Specifically, it states:

The Subscriber will, to the fullest extent permitted by applicable law, indemnify each Indemnified Party and the Partnership against any losses, claims, damages or liabilities to which any of them may become subject in any capacity in any action, proceeding or investigation arising out of or based upon any false representation or warranty, or breach or failure by the Subscriber to comply with any covenant or agreement made by the Subscriber herein, or in any other document furnished to the General Partner or the Partnership by the Subscriber in connection with the offering of the Interests. The Subscriber will reimburse each Indemnified Party and the Partnership for legal and other expenses (including the cost of any investigation and preparation) as they are incurred in connection with any such action, proceeding or investigation (whether incurred between any Indemnified Party or the Partnership and the Subscriber, or between any Indemnified Party or the Partnership and any third party). The reimbursement and indemnity obligations of the Subscriber under this Section 8 will survive the Closing Date applicable to the Subscriber (or, if this Subscription Agreement is terminated pursuant to Section 5, such termination) and will be in addition to any liability which the Subscriber may otherwise have (including, without limitation, liabilities under the Partnership 18 Agreement ) ....

The Partnership Agreement was executed and delivered to the Partnership by Figlus,

through a proxy (i.e.,

the General Partner), in connection with his investment.

Thus, the

Partnership Agreement constitutes "a document furnished t~ the r:,(!rtnership by [Figlus] in connection with the offering of Interests" to him. 18

The General Partner falls within the term "Indemnified Party," as defined in the

Partnership Agreement. See Ex. A, T'ab 5 ยง 4.7(a) (Partnership Agreement). The Subscription 8

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Ultimately, the Partnership delivered to the Partnership make,

execute,

Partners.19

Agreement was executed by the General Partner and

on behalf of Figlus pursuant to an irrevocable

sign and file the Partnership

Agreement"

proxy "to

on behalf of the Limited

Figlus admits that he did not, at any time, attempt to revoke the foregoing

irrevocable proxy.i" II.

INVESTORS ARE BOUND BY A CONFIDENTIALITY PROVISION. The Confidentiality Provision is contained in Section 14.14 of the Partnership

Agreement, which states: 1. REDACTED

Agreement incorporates the Partnership Agreement definitions by reference. See Ex. A, Tab 1

l (Subscription Agreement). 19

See Ex. A, Tab I at Figlus 006223 (Subscription Agreement) ("14. The Subscriber

hereby constitutes and appoints the General Partner as its true and lawful representative and attorney-in-fact ... to make, execute, sign and file the Partnership Agreement. ... "); Ex. A Tab 5 (Figlus 006357) (Partnership Agreement) (executed by the General Partner on behalf of the limited partners "pursuant to a power of attorney executed in favor of, and delivered to, the

General Partner").

째

Figlus Dcp. at 37, 38, 94. See also Ex. A, Tab 1 at Figlus 006215 (Subscription

Agreement) ("2 ... The Subscriber understands that it is not entitled to cancel, terminate or revoke the subscription or any agreements of the Subscriber hereunder.").

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REDACTED

That

is,

as a Limited

information Partnership.

furnished

Partner,

Figlus

is prohibited

to him by the General

At deposition,

Figlus conceded

Partner

from regarding

that "non-public"

disclosing

any non-public

the General

Partner

or the

is a broad term (e.g.,

it is

not limited to "confidential" information): Q .... What do you understand the term non-public to mean? A. It's not published. Q. So if it is not publicly available, it is non-public? A. Right. If I wanted to find it on the internet, I wouldn't find it there.22 As discussed below, none of the information at issue in this action is "published" available on the internet.

_ ... 21

Ex. A, Tab 5 ยง 14.14 (Partnership Agreement).

Figlus Dep. at 79. 10

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III.

FIGLUS BREACHED THE CONFIDENTIALITY PROVISION. From 2006 through early 20 I 0, Figlus and Jaresko jointly shared the benefits of

being Limited Partners of the Partnership.

Around May 2010, however, Jaresko

informed Figlus that she wanted a divorce and they separated.

Thereafter, Figlus began

asking the General Partner to provide him with "all documentation pertaining to the shares Natalie and [Figlus] own in the funds managed by HCA, including reports" and, in addition, "all documents pertaining to the loans taken from HCA by Natalie on our REDACTED

behalf. "24

See Ex. A, Tab 29 at Figlus 004885 ("[M]y wife has told me she wants a divorce and

we are currently separated."); see also Figlus Dep. at 52. 24

Ex. A, Tabs 45-50 at Figlus 006435.

o , .. A , r. a.b s 8"_,_ 88. -路?S <Jee .F.,x 26

Ex. Ex. A, Tab 21 (December 2008 email to Figlus.discusging

loans); Figlus Dep. at

92. See also Ex. A, Tab 26 (December 2009 email to Figlus discussing loans). 27

Figlus Dep. at 52-53, 55

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REDACTED

Lenna Koszarny, the General Partner's CFO ("Koszarny"), responded to Figlus' request on February 3, 2011, and informed Figlus that "[t]he information requested is

掳

sensitive and only Founding Partners have access to certain information. 113

Figlus

responded later that day and confirmed that he understood Koszarny's request for . 1路 31 con fid 1 entia ity. On February 10, 2011, Koszarny provided Figlus with: (1) the Security Agreement; (2) the Partnership Agreement, including Amendment No. 1; (3) the Subscription Agreement; ( 4) the Capital Account; and (5) the most-recent Quarterly Report for the Partnership. Each of the foregoing documents was, and remains, nonpublic information regarding the General Partner and the Partnership. 32 To belabor the

Figlus Dep. at 52, 57-58.

Figlus Dep. at 53, 56-57, 62, 63 ("Q ....

The first time you ever suggested that the

[HCA] loans were inappropriate was a month or two after your wife moved out? ... A. Yes."), 118-119. 30

Ex. A, Tabs 45-50 at Figlus 006434; see also Ex. B ii 9 (identifying Lenna Koszamy as

"Founding Partner and Chief Financial Officer, Horizon Capital GP, LLC"). 31

Ex. A, Tabs 45-50 at Figlus 006434.

Figlus Dep. at 75 ("Q: Do you agree with me that those documents were not publicly

_,.

available at that time? A: Yes."); id. ("Q: These documents, at least, the ones that were given to you by Lenna, were non-public; right? A: Right.").

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obvious, Figlus was provided the documents because he was a Limited Partner

i.e., they

were provided pursuant to the Partnership Agreement. 路 On September 2, 2011, Figlus made a second request "to receive directly any and all communications normally sent to investors in EEGF, which, as you confirm, I am."33 On September 26, 2011, Koszarny, acting in her capacity as CFO of the General Partner, agreed to furnish additional non-public information relating to the Partnership and the General Partner, including the December 31, 2010 audited financial statements and three separate capital accounts and quarterly reports. 34 In her cover email, Koszarny, once more, reminded Figlus that the documents he requested constituted "confidential information. "35 Figlus' attorneys were copied on the correspondence, 36 During this time, as Figlus was requesting non-public information from the General Partner, Figlus was having meetings with 37

REDACTED

Also, in terms of the divorce, Figlus and Jaresko were

having significant disputes. 38

33 34

Ex. A, Tab 70 at Figlus 006413. Id.; see also Figlus Dep. at 75- 76 (confirming that Ms. Koszarny is the General

Partner's CFO and she is one of the individuals that would send Figlus information on behalf of the Partnership). 35

Ex. A, Tab 70 at Figlus 0064 I 3; Figlus Dep. at I] l.

Figlus Dep. at 109.

Id. at 95-97.

See, e.g., Ex. A, Tab l3 5 at Figlus 000230; Ex. A, Tab I 46 at Figlus 000195; Ex. A.,

Tab 147 at Figlus 001126; Figlus Dep. at 274-76.

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On November information.39

9, 2011, Figlus made another request for non-public

Shortly thereafter, on November 17, 2011,

REDACTED

requested a meeting, and stated that he had "given some thought ... documents that [

REDACTED

Partnership

emailed Figlus, about the kind of

would] like to see. "40 Although Figlus admits to being in

possession of the Partnership Agreement for at least nine months by that point (if not longer), he testified that he had not bothered to read

u."

On December 15, 2011, Figlus received the Security Agreement and certain promissory notes from Koszarny. 42 In late 2011, Figlus left Ukraine and returned to the United States until approximately May 2012.43 conversations with

REDACTED

Figlus, however, continued to have

regarding the Partnership. 44

Ex. A, Tabs 85-88 at Figlus 000470.

Ex. A, Tab 73 at Figlus 0024 76.

Figlus Dep, at 129-130.

Ex. A, Tabs 85-88 at Figlus 000470.

Figlus Dep, at 151 ("I wasn't in Ukraine for most of that time. I forget the exact date

that I left, but I left there some time, I believe, in December [2011 ], and I didn't return until May of 2012."). 44

Figlus Dep, at 151.

REDACTED

During this time, the communications between Figlus and

occurred primarily by Skype. During his deposition, Figlus testified that after this I

.._,..-â&#x20AC;˘.

lawsuit was filed he voluntarily "wiped" his computer and destroyed certain relevant data (e.g., his Skype logs). Figlus Dep, at 151-154, 308-310. While Figlus claims that the data loss was inadvertent, that is likely an issue to be addressed at a later day. 14

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Upon his return to Ukraine in May 2012, Figlus met with among other things, the Partnership.45 On May 24, 2012,

REDACTED

to discuss,

asked Figlus for "a

copy of the legal documents that set up Horizon or the investment funds. "46 promptly responded and informed

REDACTED

that "[a]s an investor in EEGF, I have a

copy of that document" - referring to the Partnership Agreement." REDACTED

Figlus

Figlus provided

with a copy of the Partnership Agreement on July 13, 2012. 48

Figlus,

however, claims that he did not read the Partnership Agreement before providing it to REDACTED

, nor did he make any effort to determine whether or not the Partnership

Agreement contained a confidentiality provision.49

Approximately one month later,

while investigating a potential story regarding the Partnership (based on non-public information provided by Figlus)

REDACTED

requested an organizational chart from

Figlus that "could possibly be included in the story to aid readers to understand what · d at th e f Il'Il'l , •• ·~o transpire On September 25,

2012,

REDACTED

individuals with

Figlus Dep. at 151-159.

Ex. A, Tab 121 at Figlus 000250.

informed Figlus that he contacted

REDACTED

and the

Id; see also Figlus Dep, at 175 ("I probably would have been referring to the

partnership agreement."). 48

Ex. A, Tabs 133-134 at Figlus 001134; see also Figlus Dep. at 151-152.

Figlus Dep. at 180-18 l.

Ex. Ex. A, Tab 150 at Figlus 00019 l; see also Figlus Dep. at 185-186.

RLFl 7721263v.l

REDACTED

(both of whom were Limited Partners), and that

was planning to contact "more LPs to see how they react to the news.t' "

On October 2, 2012,

REDACTED

requested additional information regarding the

Partnership, including audits of the two private equity growth funds. 52 Figlus, having previously received an audit from the General Partner, provided it to full knowledge that the audit was non-public.53 REDACTED

REDACTED

with

Also on or about October 2, 2012,

contacted multiple Limited Partners, 54 informed them that he possessed

"documented proof' of alleged impropriety by the General Partner and requested interviews concerning that alleged impropriety. 55 The emails from

REDACTED

included

non-public information found only in the Funding Notices issued to the Limited Partners, including the name of the Limited Partners and the amount of their respective capital . commitments to t h. e p .. artners hi1p. ss 路

On October 3, 2012, Figlus provided

REDACTED

with an organizational chart

(based upon Figlus' speculation) and the 2011 audited financial statements for the Partnership. 57 In the cover email, Figlus stated: I have read thru the LP agreement again, but I believe that 51

Ex. A, Tab 159 at Figlus 000137; see also Figlus Dep. at 188-189.

Ex. A, Tab 165 at Figlus 001090.

Figlus Dep. at 210.

See Ex. C.

... -路

ss Id. 56

Id.

Ex. A, Tabs 173-175 at Figlus 001092-1113.

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EEGF investors do not have the right to access information about any HCA company .... Per se, I think there is probably nothing illegal about any of the loans, but it is something that I believe investors in the funds would not like if they knew about it and could potentially exert great pressure on I-ICS management over this. 58

Although the above email refers to reading the Partnership Agreement "again," during his deposition Figlus testified that he had not (in fact) read the Partnership Agreement as of that date.59 As for illegality, Figlus confirmed during his deposition that does not contend in this action that the "HCA loans" were illegal. 60 Also on October 3, 2012,

REDACTED

informed Figlus that the General Partner

and the Partnership had learned of Figlus' improper disclosures: Well, [Jaresko] knows. Word has got back to her from some of the investors. She called two REDACTED for some reason.

editors last night crying, not me,

She said I don't know when I'm talking about and that "the damage has already been done" although she says nothing wrong happened. 61 Figlus responded stating, in part:

Id. at Figlus 001092.

Figlus Dep. at 213, 214 ("Q. And this is October 2012, which is 18 months after you

were provided a copy of the partnership agreement; right? A. Yes. Q. And during that 18 months you never went back and actually read it? A. No."). 60

Figlus Dep. at 48, 54-55; 257 (''Q. REDACTED

law; you agree with that, right? A. Right."). 61

Ex. A, Tab 187 at Figlus 001086.

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---

also says [Jaresko] didn't break the

Interesting. So she knows about me, but does she know about me talking to you specifically? Can you be more specific on what she said about everything? There were only a couple people that knew I was talking to a reporter plus a couple of others who knew about the facts that I have given you (four total). Two of them were investors,

but they are my close friends who support me in the divorce and would not have discussed this with anyone. If any investors told her about it, it must have come from elsewhere, not from me. I told three other persons that I have information that could be damaging to Natalie [Jaresko], but did not give them details .... 62 According to

REDACTED

Jaresko "easily deduced" that Figlus was the source of the

Partnership's non-public information and

REDACTED

expressed doubt as to the story's

credibility because "there's the element of my 'source's' motivation for leaking this."63 REDACTED

thereafter confirmed that none of the eight or nine investors that he REDACTED

contacted (which, collectively, hold more than

of the Partnership interests)

responded to his inquiries or would discuss the Partnership with him. 64 In a later communication on October 3, 2012,

REDACTED

(again) expressed

doubt as to the story's credibility because Limited Partners (other than Figlus) would not respond to him, and because: [ Jaresko] didn't break the law[] and the fact that I know all this based on documents that aren't publicly available received from her ex-husband . . it won't look good, it'll

Id at Figlus 001085-86 (emphasis added).

Id. at Figlus 001085.

Id.

RLFl 772J263v.l

look like we're after her. 65

Notably, the foregoing email expressly confirms that both Figlus and

REDACTED

understood that the Partnership information at issue was non-public. As for the final point, sometimes you cannot hide your true motivation. IV.

FIGLUS IGNORED A CEASE AND DESIST LETTER. On October 5, 2012, the General Partner delivered a cease and desist letter to

Figlus on behalf of the Partnership. 66 The General Partner demanded that Figlus cease and desist any further disclosure of non-public information concerning the General Partner or the Partnership.67 Figlus, however, ignored that demand. In fact, Figlus did not even bother to review the Partnership Agreement at that time to determine whether or not he was bound by the Confidentiality Provision. 68 Three days later, on October 8, 2012, pursuant to Section 14.14(b)(ii) of the Partnership Agreement, the Partnership demanded that Figlus return all copies of any non-public information in his possession, custody and control concerning the General Partner or the Partnership that was provided to him, directly or indirectly, by the General 65 66

Id at Figlus 00 I 084 (emphasis added).

Ex. D ("[Y]ou are obligated not to disclose 'information which is non-public

information furnished by the General Partner regarding the General Partner and the Partnership ... received by [you] pursuant to the [Partnership Agreement].' Furthermore, as a limited partner of the Fund you have agreed that 'irreparable damage would occur if the provisions of this I

Section 14.14 were breached."'). 67

Figlus Dep. at 240-24 l. 19

RLFl 772l263v. I

Partner or the Partnership.

discussions with

REDACTED

Figlus ignored that demand as well, and continued his

REDACTED

Figlus contacted Complaint

REDACTED

on October 10, 2012 - the day Plaintiffs filed their

to explain how the Partnership's funding worked. 70

In fact, Figlus and

communicated multiple times via email on October 10, 2012, and also set a

. . Sk tune to diiscuss f ace-to- f ace via , ype. 71 breaching the Confidentiality Provision,

Despite Figlus' willingness to continue

REDACTED

suspended the Partnership article

related to the Partnership. 72 On October 19, 2012, this Court entered an order temporarily restraining Figlus from "disclosing any nonpublic (or confidential) information regarding the General Partner and the Partnership."

Ex. E.

Ex. A, Tab ] 81 at Figlus 00 l 073.

See Ex. A, Tab 184 at Figlus 001079; Ex. A, Tab 186/' atFiglus ...,.... 001081; see also Figlus

Dep. at 245-246. 72

Figlus Dep. at 246-248.

Trans ID. 47163533.

RLFl 7721263v.l

ARGUMENT I.

PLAINTIFFS ARE ENTITLED TO A PRELIMINARY INJUNCTION. The standard governing the issuance of a preliminary injunction is well settled. To

obtain a preliminary injunction, plaintiffs must demonstrate: "(1) a reasonable probability of success on the merits at a final hearing; (2) an imminent threat of irreparable injury; and (3) a balance of the equities that tips in favor of issuance of the requested relief.t'" "[T]here is no steadfast formula for the relative weight each deserves.

Accordingly, a

strong demonstration as to one element may serve to overcome a marginal demonstration of another.t'? "[I]n other words, a strong showing on one element may overcome a weak showing on another element."

In sum, this Court has broad discretion to grant or deny a

motion for preliminary injunction. 77 Here, Plaintiffs have satisfied each element and this Court should issue the requested injunction. Plaintiffs have demonstrated a reasonable probability of success on their claim that Figlus breached the Confidentiality Provision by disclosing non-public Partnership information provided by the General Partner.

Moreover, Figlus has contractually

conceded that such a breach constitutes irreparable harm. 74

Accordingly, Plaintiffs are

In re Micromet, Inc. S'holders Litig., 2012 WL 681785, at *5 (Del. Ch. Feb. 29, 2012)

(quoting Nutzz.com, LLC v. Verture, Inc., 2005 WL I 653974, at *6 (Del. Ch. July 6, 2005)). 75

Id. (quoting Alpha Builders, Inc. v. Sullivan, 2004 WL 2694917, at *3 (Del. Ch. Nov.

5, 2004)). 76

Roseton OL. LLC v. Dynegy Holdings Inc., 2011 WL 3275965, at *9 (Del. Ch. July 29,

Id.

2011).

RLFl 7721263v.l

entitled to an order preliminary enjoining Figlus from further disclosing any non-public information regarding the General Partner or the Partnership.

Plaintiffs Have A Reasonable Probability Of Success On The Merits.

"To establish a reasonable probability of success on the merits of [a breach of contract] claim, [Plaintiffs] must prove that the [Partnership] Agreement is enforceable, that [Figlus] materially breached that [Partnership] Agreement, and that [Plaintiffs] suffered damages as a result of [Figlus'] breach."

Here, Plaintiffs have demonstrated a

reasonable probability of success that ( 1) the Partnership Agreement is enforceable; (2) that Figlus breached the Confidentiality Provision contained therein; and (3) the parties' contractually-stipulated that "irreparable damage would occur if'' the Confidentiality Provision was breached.

That is, as a Limited Partner, Figlus is bound by the

Confidentiality Provision, which precludes him from disclosing non-public information related to the General Partner or the Partnership that he received from the General Partner pursuant to the Partnership Agreement. Figlus breached the Confidentiality Provision by disclosing non-public Partnership information to

REDACTED

and, as a result, the

Partnership has been irreparably harmed.

Hough Assocs., Inc. v. Hill, 2007 WL 148751, at *14 (Del. Ch. Jan. 17, 2007) (citing

VLIW Technology, LLC v. Hewlett-Packard Co., 840 A.2d 606, 612 (Del. 2003)).

RLFl 7721263v.l

Figlus Is Bound By The Confidentiality Provision.

"The first step in evaluating [Plaintiffs'] breach of contract claim is to determine whether the covenants are valid and enforceable."79

"A contract is valid if it manifests

mutual assent by the parties and they have exchanged adequate consideration."

Here,

there can be no question that the Partnership Agreement is valid and enforceable. Figlus and Jaresko executed the Subscription Agreement, authorizing the General Partner to execute the Partnership Agreement on their behalf: and committed

REDACTED

exchange for Limited Partnership interests. As of June 30, 2012, Figlus and Jaresko had contributed

REDACTED

to the Partnership in relation to their Limited Partnership

interests, an amount in excess of their commitment. 81

Accordingly, by executing the

investment documents and consummating the transactions contemplated thereby, the parties manifested mutual assent and exchanged adequate consideration,

i.e.,

cash

contributions in exchange for Limited Partnership interests. 82 79

Concord Steel, Inc. v. Wilmington Steel Processing Co., 2008 WL 902406, at *4 (Del.

Ch. Apr. 3, 2008); see also In re K-Sea Trans. Partners L.P. Unitholders Litig., 2011

2410395, at *8 (Del. Ch. June 10, 2011) ("Consistent with the underlying policy of freedom of contract espoused by the Delaware Legislature, limited partnership agreements are to be construed in accordance with their literal terms....

By focusing on the partnership agreement,

the courts give 'maximum effect to the principle of freedom of contract' and maintain the preeminence of the intent of the parties to the contract.") (citations omitted). 8

Â° Concord Steel,

2008 WL 902406, at *4.

Ex. A., Tabs 154-156 atFiglus 0190.

See Ex. A, Tab I Â§ 7(g) (Subscription Agreement) ("The signature on the signature

page of this Subscription Agreement is genuine, and the Subscriber has legal competence and

RLFl 7721263v.l

Figlus' failure to read the Subscription Agreement or the Partnership Agreement cannot somehow justify his breach or render the contracts unenforceable

as to Figlus.

As the Delaware Supreme Court has observed, [i]t will not do for a man to enter into a contract, and, when called upon to respond to its obligations, to say that he did not read it when he signed it, or did not know what it contained. If this were permitted, contracts would not be worth the paper on which they are written. But such is not the law. A contractor must stand by the words of his contract; and, if he will not read what he signs, he alone is responsible for hits omission. . . 84 Nor can Figlus "silently accept [the Partnership Agreement's] benefits and then object to its perceived disadvantages. "85 Accordingly, Figlus is bound by the clear and unambiguous Confidentiality Provision. As a result, Figlus was required to maintain the confidentiality of non-public information relating to the General Partner or the Partnership, which he received from the General Partner pursuant to the Partnership Agreement.

capacity to execute the same, and this Subscription Agreement constitutes, and the Partnership Agreement when executed and delivered will constitute, a valid and binding agreement of the Subscriber, enforceable against the Subscriber in accordance with its terms."). 83

Graham v. State Farm Mut. Auto. Ins. Co., 565 A.2d 908, 913 (Del. 1989) ("[N]or can

a party's failure to read a contract justify its avoidance."). 84

Pellaton v. Bank of New York, 592 A.2d 473, 477 (Del. 1991) (quoting Upton,

Assignee v. Tribilcock, 91 U.S. 45 (1875)). 85

...., ....

Graham, 565 A.2d at 913. 24

RLFl 7721263v.l

Figlus Breached The Confidentiality

Provision.

As set forth above, the Confidentiality Provision provides that REDACTED

As an initial matter, Figlus has admitted that he breached the Confidentiality Provision: Q: So you have the option of breaching the agreement and bearing the consequences; right? A: Apparently, yes. Q: And you made the decision to do that? Mr. Pazuniak: Objection. Q: Correct? Mr. Pazuniak: Objection. A: Yes. 87

Ex. A, Tab 5 ยง 14.14 (Partnership Agreement).

Figlus Dep. at 278.

RLFl 7721263v.l

Accordingly, based on the above admission alone, this Court should conclude that Plaintiffs demonstrated a reasonable probability of success on their claim that Figlus breached the Confidentiality Provision contained in the Partnership Agreement. Nevertheless, the limited record developed in discovery establishes that Figlus, a Limited Partner, obtained non-public information furnished by the General Partner relating to the General Partner and the Partnership and disclosed such information to, among others,

REDACTED

First, Plaintiffs do not dispute whether Figlus is a Limited

Partner. Plaintiffs alleged that Figlus is a Limited Partner in their Complaint and Figlus admitted as much in his answer.88 Second, Figlus conceded that he disclosed information to

REDACTED .

REDACTED

Third, Figlus also admitted that the information he disclosed to

was non-public."

Fourth, Figlus received the non-public information from

Koszarny, the General Partner's CFO, who was acting in such capacity when she furnished the non-public information at issue to Figlus.

Fifth, it cannot be reasonably

disputed that the non-public information was provided to Figlus pursuant to the Partnership Agreement

i.e., it clearly would not have been provided to him if he were

not a Limited Partner.

ir 3 (Trans. ID 46878969); Answer il 3 (Trans. ID 47292497). 89 See Answer ii 7 ("Defendant admits that Defendant provided...,,,. certain information . investigative repo1ier at the REDACTED "); Ex. F ii 7 (Amended Responses to Interrogatories). 88

See CompI.

to an

See Figlus Dep. at 264; Ex. G ii l3 (admitting that some or all of the documents and

information Figlus provided to the

REDACTED

were non-public).

RLFl 7721263v.l

In sum, Figlus disclosed non-public information related to the General Partner and the Partnership, which he received from the General Partner, to a newspaper reporter in Ukraine.

That disclosure by Figlus breached the Confidentiality

Provision.

Accordingly,

Plaintiffs have demonstrated a reasonable probability of success on the merits.

Plaintiffs Have Established IrreparableHarm.

The contractual stipulation of irreparable harm "alone suffices to establish the element of irreparable harm, and [Figlus] cannot be heard to contend otherwise."91

That

is, the parties to the Partnership Agreement, including Figlus, agreed that breaches of the Confidentiality Provision would result in irreparable harm, and that the Partnership would "be entitled to an injunction or injunctions to prevent breaches of [the Confidentiality Provision] and to enforce specifically the terms and provisions [t]hereof. ,m "This Court 'has repeatedly held that contractual stipulations as to irreparable harm alone suffice to establish that element for the purposes of issuing preliminary injunctive relief."'93

Vitalink Phann. Servs., Inc. v. Grancare, Inc., 1997 WL 458494, at *9 (Del. Ch. Aug.

7, 1997). 92

Ex. A, Tab 5 ยง 14.14 (Partnership Agreement).

Potter v. Cmty. Commc'ns Corp., 2004 WL 550747, at *3 n.10 (Del. Ch. Mar. 11,

2004) (quoting Cirrus Holding Co. v. Cirrus Indus., Inc., 794 ~.2d 1 l,21, 1209 (Del. Ch. 2001)); see also True N. Commc'ns, Inc. v. Publicis, SA., 711 A.2d 34, 44 (Del. Ch. 1997); Vitalink Pharmacy Servs., Inc., 1997 WL 458494, at *9; SLC Beverages, Inc. v. Burnup & Sims, Inc., 1987 WL 16035, at *2 (Del. Ch. Aug. 20, 1987).

RLFl 7721263v. I

Accordingly,

Plaintiffs

have established

the requisite

showing

sufficient to support this Court's issuance of a preliminary injunction.

of irreparable

harm

Even in the absence of such a contractual stipulation, "under Delaware law, the improper use and disclosure of information that was subject to a confidentiality agreement has been held to constitute irreparable harm. "95

For instance, in Stirling

Investment Holdings, Inc. v. Glenoit Universal, Ltd., the Court held that plaintiffs "claim of irreparable harm ... [was] clearly valid" because "of a contractual right to maintain the confidentiality of the terms of the Agreement. "96 The Court further observed in Stirling that if the confidentiality provision was validated, "it would be irretrievably lost if the prohibited information were publicly disclosed, and that loss could not be adequately remedied by an award of damages. "97 Thus, " [ oJn that basis, [plaintiff] ... demonstrated that it would be irreparably harmed by the disclosure of the contractually prohibited information. "98 Further, the Court has also held that "[ d]amages would not adequately

See Emerging Europe Growth Fund, L.P. v. Fig/us, C.A. No. 7936-VCP, at ] 8 (Del.

Ch. Oct. 16, 2012) ("ln preliminary injunction situations where 1 have a more developed record, I'm more likely to enforce those provisions and generally have."). 95

Martin Marietta Materials, Inc. v. Vulcan Materials Co., 2012 WL 5257252, at *58

n.286 (Del. Ch. May 4, 2012) (citing Stirling Inv. Hldgs., Inc. v. Glenoit Universal, Ltd., 1997 WL 74659, at *2 (Del. Ch. Feb. 12, 1997) and Horizon Pers. Commc'ns, Inc. v. Sprint Corp., 2006 WL 2337592, at *20 (Del. Ch. Aug. 4, 2006)). 96

Stirling, 1997 WL 74659, at *2.

Id.

RLFl 7721263v.l

compensate Plaintiffs for a breach of the confidentiality of such provisions

is to prevent

provisions because the purpose

harm and misuse before it occurs'v"

Accordingly,

irreparable harm has been established.

The Balance Of Equities Weighs In Favor Of The Plaintiffs.

The balance of the equities tilts greatly in favor of a preliminary injunction. Disclosure of non-public Partnership information will irreparably harm the General Partner, the Partnership and the Limited Partners.

Accordingly, Plaintiffs are simply

attempting to receive the benefit of their bargain in the Partnership Agreement and to protect the expectations and interests of their Limited Partners. In contrast, there are no equities weighing in favor of Figlus. Indeed, Figlus did not even bother to read the Partnership Agreement before he executed the Subscription Agreement and purchased interests in the Partnership.

100

Even at his deposition in this

action, Figlus admitted that he still had not read the Partnership Agreement.i'':

Having

executed the Subscription Agreement voluntarily, Figlus cannot now be heard to argue that the restrictions contained in the Partnership Agreement are unreasonable or otherwise do not apply to him.

Horizon Pers. Commc'ns, Inc., 2006 WL 2337592, at *20.

100

See, e.g., Ex. A, Tab ] (Subscription Agreement).

101

Figlus Dep. at 296.

RLFl 7721263v. I

II.

FIGLUS IS OBLIGATED TO REIMBURSE PLAINTIFFS' ATTORNEYS' FEES "AS THEY ARE INCURRED." Not only did Figlus breach the Confidentiality Provision, he also breached the

Subscription Agreement. As noted above, the indemnification/advancement obligations contained in Section 8 of the Subscription Agreement arise in actions relating to, among other things, a (i) false representation or warranty in the Subscription Agreement, (ii) breach or failure to comply with any covenant or agreement in the Subscription Agreement, or (iii) breach or failure to comply with any covenant or agreement in the Partnership Agreement. First, Figlus admits that he did not read the Private Placement Memorandum or the Partnership Agreement before he executed the Subscription Agreement in February 2006, and again in September 2006, 102 or the "Investor Suitability Certificate" in September 2006103 (which certified that the representations and warranties in the Subscription Agreement remained true ).104 As such, the representation and warranty that Figlus "ha]d] carefully read, the Private Placement Memorandum and the Partnership Agreement" was

102

Ex. Ex. A, Tab 1 at Figlus 00623 l (February 2006), Figlus 006234 (September 2006).

103

Ex. Ex. A, Tab 1 at Figlus 006235 (September 2006).

104

Figlus Dep. at 10, 12, 15, 20-21, 22, 130, 180-181, 213, 214, 217-218, 240, 296. See

also Answer, Second Affirmative Defense (alleging that the Plaintiffs failed to advise Figlus of the Confidentiality Provision); Ex. G at ir 2 (denying Figlus,read tb,t:: Partnership Agreement before he signed the Subscription Agreement); Ex.Bir 14 (denying Figlus read the Partnership Agreement); Ex. B

19 ("Defendant did not read the Partnership Agreement prior to executing

the Subscription Agreement.").

RLFI 772J263v.l

During his deposition, Figlus candidly admitted that his failure to read the

false.105

investment documents led to the filing of this action: ... So the fact that you didn't read some of the materials, would you agree with me that that is one of the reasons we are here today? MR. P AZlJNIAK: Objection. A. Yes, one of th e reasons. 106 Stated differently, this action arises (in whole or

111

part) out of Figlus' false

representation and warranty. Second, Figlus failed to acknowledge (or comply) with his contractual obligations under the Subscription Agreement. For example, in this action Figlus: •contested that he was bound by the Confidentiality Agreement in the Partnership Agreement (Answer iii! 6, 17, 22), which is inconsistent with the agreement in Section 7(g) of the Subscription Agreement that the Partnership Agreement constitutes a valid and binding agreement, enforceable against Figlus in accordance with its terms; •contested that he was bound by Paragraph 8 of the Subscription Agreement (Answer iJ 26), which is inconsistent with the agreement in Section 7(g) of the Subscription Agreement that the Subscription Agreement constitutes a valid and binding agreement, enforceable against Figlus in accordance with its terms; •contested the validity of the power of attorney granted to the General Partner in Paragraph 14 of the Subscription Agreement, pursuant to which the Partnership Agreement was executed on behalf of Figlus (Answer, First Affirmative Defense), which is inconsistent with the agreement in Section 7(g) of the Subscription Agreement that the Subscription Agreement

105

Ex. Ex. A, Tab 1 at Figlus 006217 (Subscription Agreement).

106

Figlus Dep. at 319-20.

RLFl 7721263v. I

constitutes a valid and binding agreement,

enforceable

against Figlus

111

accordance with its terms; Third, as noted above, Figlus breached the Confidentiality Provision in the Partnership Agreement. As noted above, the Partnership Agreement was executed and delivered to the Partnership by Figlus, through a proxy (the General Partner). As such, the Partnership Agreement is "a document furnished to the ... Partnership by the Subscriber in connection with the offering" - meaning that a breach of the Partnership Agreement triggers the indemnification

and advancement obligations contained in

Paragraph 8 of the Subscription Agreement. Fourth, Paragraph 8 obligates Figlus to reimburse Plaintiffs for their "legal and other expenses . . as they are incurred in connection with" this action. The foregoing is, in essence, and advancement right. By refusing to pay Plaintiffs' legal costs "as they are incurred" Figlus is depriving Plaintiffs of the benefit of their contractual bargain (e.g., ignoring the advancement component and converting his obligation into a pure indemnification provision). An after-the-fact remedy, will not make Plaintiffs whole.

107

. -路 107

See, e.g., Tafeen v. Hornestore Inc., 2005 WL 1314782, *2 (Del. Ch. May 26, 2008)

("Cutting off foes and costs to business litigants is 'a harm that could never be undone ... "').

RLFl 7721263v.l

CONCLUSION

For the foregoing reasons, Plaintiffs respectfully request that the Court grant their motion for a preliminary injunction against defendant Figlus and enter an order awarding attorneys' fees pursuant to Paragraph 8 of the Subscription Agreement.

Isl Richard P. Rollo Richard P. Rollo (#3994) Kevin M. Gallagher (#5337) Richards, Layton & Finger, P.A. 920 North King Street Wilmington, DE 1980 I 302-651-7700 Attorneysfor Plaintiffs Emerging Europe Growth Fund, L.P. and Horizon Capital GPLLC Dated: December 12, 2012

RLFl 7721263v. I

CONCLUSION

Isl Richard P. Rollo Richard P. Rollo (#3994) Kevin M. Gallagher (#5337) Richards, Layton & Finger, P.A. 920 North King Street Wilmington, DE 19801 302-65 l- 7700 Attorneys for Plaintiffs Emerging Europe Growth Fund, L.P. and Horizon Capital GPLLC Dated: December 12, 2012

RLFl 7721263v. I