Hercules Capital, Inc. v. Gittleman et al

Filing 141

OPINION AND ORDER. ORDERED AND ADJUDGED that final judgment is entered in favor of Defendants onall of Plaintiff s claims. Signed by Judge Donald M. Middlebrooks on 1/12/2018. (jas)

UNI
TED STATES DI
STRI COURT
CT
SO UTH ERN DI
STRI O F FLO RI
CT
DA
CASE NO :16- 81663- l
cvM DDLEBROO KS
HERCULES CAPI
TAL,I C.,
N
Pl i if
antf,
V.

DAX I GI
EL TTLEM A N .

DAVI BARCLAY. nà
D
a
HowAlo A. ok,
t Kw
Def nda s
e nt .

OPI ON AND ORDER
NI
I
NTRODUCTI N
O

Som ei
tmes a til t a lgai of a c
t ra he le tons
ompl i f l f r s tof t i pr s . l
ant al a hor
he r omie t
hap ne he e.The a us tonsoffa , mir pr s ntton,and vi ai ofge r l a ce ed
pe d r
cc a i
r ud se e e a i
ol tons
ne aly c pt

a c u tn p i ils(
c o ni g rncp e GAAP)ma e a an tt re idviu lo fc r o ab n r p tc n l y
d g is h e n i d a fie s f a k u t e h oog
sa tup t ned outt be pos- r tona ia i f a bad l n. The l rknew t rs of
tr- ur
o
thoc a i lz tons or
oa
ende
he iks
t l nsa iso a i a i em a doc
he oa nd t wn ctons nd nt l ument dipr iscai .
s s ove t l ms

Thi i a a ton f rfa en m ir pr s t ton, ne i ntm ir pr s nt ton,a cvi
s s n c i o r udul t s e e en a i
glge
se e e ai
nd i l

c pia br htby Pli ifHe c esCa tl l (tlr ul ')agans Defnda sDa el
ons rcy oug
antf r ul pia, nc. dle c es' i t e nt ni
Gite n (d tlman' Da d Ba cay ($ r a ', a Howa d A. Kwon (d
tlma çGite '
) vi r l $Bac1y') nd
r
ç
Kwon'
'
)

(olciey,s fn a t' .Hec e alg st a Dee d n s idviu ly a da e ly e o
c l tv l S e d n s' ruls l e h t fn a t,n i d al n s mpo e s f
e
De
)
e
non- r y Ope a a s t a e c pa c pi e t i ento ly or neglg ty m a f l e
pa t
npe k, ofw r om ny, ons r d o nt i na l
i en l
ke a s

mir pr e a i t Her ul s ave ur d l r a t t fna a sa e ofOpenpe k a
se es nt tons o
c e , nt e ebt ende , s o he i ncil t t
a nd
t vi biiy ofis pr
he a lt
t oduct be wee J nua y a O c ober201 . He c esal gest ti r led on
s t n a r nd t
4
r ul le
ha t ei

t s m ae i m ir pr e a i i de di t t ke c ti ac i wih r ga d t is l n t
he e tral s c es nttons n ci ng o a era n tons t e r o t oa o

Openpea On Nove be 1 , 1 1 a 27- a De m be 1 lhed a be h til Ba ed on
k.
m r 3 5- 7, nd 29, nd ce r ,
l
nc ra . s

t d m e a y a t tm oni e de e pr ent , lma t f l ng fndi off c and
he ocu nt r nd esi al vi nc es ed
ke he olowi i ngs a t
co l i oflw .
ncusons a
I.
I

FI NG S O F FACT
NDI

a. H e c e Ckpïlt I ., Ve ur DebtLende
r ul s
/ nc.4 nt e
r
Pl ntf He c e Ca t l I c (t ec ls' i a ctz n o M a ya d a Caio n a
ai if r uls pia , n . dl r ue ' s iie f r ln nd lfr i
l
)

,

a

b sn s d v l p n c mp n (BDC', a s l-e c ie t e t r d b ln e' t a
u i e s e eo me t o a y 1
t ' nd efd s rb d ' n u e e t e d r' h t
)
v
s cilz i l nst hi gr h, i
pe a ies n oa o gh- owt nnova i ve u e ba ked c
tve nt r - c
ompa esi t t c ogy a
ni n he e hnol
nd
lf - ce i ti . ( mi ue Tetmo .
ie s ince ndusres He q z si ny)

Manue He iue Cl- que ' i t Chanua a ChifExe i Of er(t '
l nrq z lemi z' s he i n nd e cutve fc i
l
)
CEO'
)
ofHec es ( i zTetmo .Sc t Ble ti (s u sen' wa teCh e CrdiOfie
rul . Henrque si ny) ot u sen l e ti' s h if e t fc r
Bl
)

(CCO' a d b c me t e Ch e l v sme t Of e (1 O' o He c ls d rn te p ro
i
1 ' n e a h if n e t n sc r $ ' f r u e u ig h eid
)
Cl )
r e ntt t s matr ( ueti Tesi
elva o hi te . Bl sen tmony) AprlYoung (t
.
i
1
Young' wast M a gi
'
)
he na ng
Die t f He c e M i Ata i Pr c ie, and was r s
r c or or r uls' d- lntc a tc
e ponsbl f i ntf ng a i ta l
i e or de iyi nd niily

r vi ng i t e opporunii , i l ng wih Ope ak. ( u g Te tmo ) M ak
e ewi nvesm nt
t tes ncudi
t
npe
Yo n si ny . r

Ro se (toe lr'wa aPo to i CrdiM a a e a Hec lsfo Oco r2 3tr u h J n
e lr lt se' s rf lo e t n g r t r ue r m tbe 01 h o g u e
l
)
o J l o 2 6.( e lr si n ) M r Ro se woke o t eOp n a a c u tfo 2 3
r uy f 01 Ro se Te tmo y . . e lr r d n h e pe k c o n r m 01
t ough 201 (( . J Eggbe (t bee')wa a Prncpa a Hec e ,whe e he ha
hr
5. ff) ohn
er V
Egg r' s
i i l t ruls
r
s
wo ke fom Oc obe 2011 t t pr s nt M r Eggbee wor d t s c e ua e sr t e,
r d r
t r
o he e e . .
r ke o our e, val t , tucur

a cl eve ur de opporuniis a he wor d on t Ope a a countbewe n 201 a
nd os nt e bt
t te , nd
ke
he
npe k c
t e
4 nd

201 (
6. Eggbe Te tmony)
er si
.
H e c e prm a iy l nds m one t ç ve opm e - t ge c pa es' t t a e not
r ul s i r l e
y o f l
de
nt s a
om ni ' ha r

ge r tng r venue a a e t ni c s 'by c um i wor ng c piala t y ty t i r as
ne ai e
nd r ' ng a h'
bur
ons ng
ki a t s he r o nc e c

s l . ( rque Tetmony;Young Tetmony) W he He c es decdes t i s i a
aes Hen i z si
si
.
n r ul
i o nvet n
2

d l
cveopmentsage Compa , t c
-t
ny he ompa i ge r ly 3- ye r a y fom ge r tng an
ny s ne al 5 a s wa r
ne a i
y

m e ni ulr ve
a ngf e nue,and 4- ye r fom ge ai a m ea ngf Ea ni Bef e l er s,
7 as r
ner tng ny
ni ul r ngs or nt e t
Ta s Depr c ai n, a Amo t to (i TDA' . ( nrque Tesi
xe ,
e i to nd
ri in S
za
EBI
' He i z tmony) The tpia
)
.
y cl
c
ompany t t Her ul i s s i ha be n i e se e f 2- ye r , a ha gone t oug
ha
c es nve t n s e n xit nc or 3 a s nd s
hr h

a oxi el 2 r
ppr mat y ounds of c pia e t f asng. (d) A b ro rsh so ia rv n e
a tl quiy undr ii
1 . o r we ' itrc l e e u

fg rso prj ce r v n sa en tHec ls f c i d cdn wh t rt ma e ala o i
i u e r oe td e e ue r o r ue ' o us n e i ig ehe o k o n r n
how He c es cacult s a borowe ' vaue ( n iu z Tetmo y Yo n Tetmo y . I
r ul
l ae
r rs l . He rq e
si n ; u g si n ) n
or rt ac ountf dif r nce i rs a ong borowe s Hec lsa j ssitrs r tsa d te
de o c
or fe e s n ik m
r r , rue d u t n eet ae n h

f sr t e oft l n. ( i z Tetmo . I ees pa nt a f sa et bi s
ee tucur
he oa Henrque si ny) ntr t yme s nd ee r he gge t

s u c so He c ls ic me (#) W h n e ey hn g e wel He c ls b sn s i lcaie
o re f rue ' n o . f .. e v r t ig o s l rue ' u ie s s u r t ;
,
v
t l
he oansi t sc e had i e es r esof 1 and t f swe e quie hi . (d ; .Exs 5,6,
n hi as
ntr t at
2%
he ee r
t gh 1 Tr
.

1 1 0)
68, 8 .
The prm a y t ng t tHe cul c i swhe de di whe he t make a l n i t
i r hi ha r es onsder
n ci ng
t ro
oa s he

c mpa y' e tr rs vau ,wh c i wha te c mpa y i prj ce t bewo t o e tmea d
o n s nep ie l e ih s t h o n s oe td o
rh v r i n
wha t c
t he ompa c d be s d f i t f ur . ( u g Te tmo y . He c lspro iie a
ny oul
ol or n he ut e Yo n
si n ) rue irtz s
compa s e e rs val bec us t t i how He c es ge s r pad on is l n. (d4 For
ny' nt m ie ue a e ha s
r ul
t e i
t oa
1 .

rp y n ,Hec e r l so isb ro r a qurng s bs q n if so o e ut o j no
e a me t ruls ei n t o r wes c ii u e ue t n u ins f q iy r u ir
e
de ,o t occ r nce of a ç xi e ,' m e ni a a ston by anot r c
bt r he ure
n i t vent ' a ng n cquiii
e
he ompany or a

p bi o frn . (d;Ble ti Te tmo y . The v s mao iy o c a is t a Hec ls
u l fe ig 1
c
u sen si n )
a t j rt f omp ne h t ru e
i ssi a e r fna e ora quied. ( ungTe tmony)
nve t n r e i nc d
c r
Yo
si
.
l m a ng orr sr t i a l He c e r i on t i onnai i ude i a i ew
n ki
e tuc urng oan, r ul s eles he nf
ton ncl d n v
N

Dea Req tM e a
l ues morndum'(t w De M e ',a i ena He c esdoc
's
Ne
al mo' n ntr l r ul
)
umen prpae by
t e rd
t t a Te m ' a ç e t Te m ' a Her ul f r vi w by t Sl sm e Com mit e.''
he i l a ' nd s di a ' t c es or e e
De
cr
he lnve t nt
te

( nrquezTetmony;Bl t nTe tmony)
He i
si
uesei si
.TheI t ntCommitedecdest appr or
nvesme
te i o ove

de al n ba ed o t i or ton co ane i t New De lM e . ( n iu z Tetmo y'
ny oa s n he nf mai
nt i d n he
a mo He rq e si n ,

Bl ti Tesi
uesen tmony) l drfi t Ne Dea Me Hecul c
. n a tng he w
l mo, r es onduct due dii nce a
s
lge
nd
r les on f t i or ton pr de by t borowe .
ei
acual nf ma i
ovi d
he
r r

( uet n Te tmony; Eggbe r
Bl sei si
e

Te tmony; He que Tesi
si
mi z tmony) He c es c i s i or ton fom itr e a
. r ul onsder nf mai r ne viws nd

rp e e tto o ma a e n , it rc l n p o e tdfn n ilif r to , e i et r a d
e rs nains f n g me t h so ia a d rj ce ia ca n o mai n k y nv so s n
pa t r ,a t c poston of t borowe ' Boa d of Diecor .
rne s nd he om ii
he r rs
r
r t s

( uesei Tetmony;
Bl t n si

Egg rTesi
bee tmony;HenrquezTesi ny) Ne Dea M e o lnet t msoft pr ed
i
tmo . w
l mos uti he er
he opos
l n,gve a i c r
oa i
t kg ound a st ton ove v e 'of t compa a is fna i st ton,
ba
nd iua i
r i w'
he
ny nd t i nc al iua i
a yz t po e ilr t ns f He c e ,dic s f c o s i s ppor and rs oft l n, a
nal e he t nta e ur or r ul s s us a t r n u
t
iks he oa nd

d ti k y ic me sae n d ie s ( e Tra Ex i t 1 8 ( e en fe ,( .Ex.) Th
eal e n o ttme t rv r . S e il hbi 6 ) h r ia tr t
Tr ' . e
'
me
mos c n an h so ia a d p oe td fn n il i omain p o ie b t e p o p cie
o ti itrc l n rj ce a ca nfr to r vd d y h r s e tv
borowe ,i udi t balnce s ta c s fows whih He c e ca l t lM a ge e
r r ncl ng he a
hee nd a h l ,
c
r ul s ls he s na m nt

Cas '( eTr Exs 1 18 YoungTesi
e. Se . . 68, 0;
'
tmony)
.

He c ls as c lu ae is o p o e to s f r t e fn n il p ro ma c o te
r ue lo ac lts t wn rj cin o h i a ca e f r n e f h
bo
nowe ,c l t C
r aled he I
HTGC Cas ' ( e Tr Exs 168,1 Young Tesi
e. Se . .
'
80;
tmony) The HTGC
.

Ca e i ba e o tebo r we ' fn n ilhitr a d p oe to s b tHec lst e iie 'te
s s s d n h ro rs i a ca so y n rj cin , u r ue ' nstz s'h
s
fn n ilp oe t n t s o wh tte fn n il o t e c mp n wo d b gv n S r iay
i a ca rj ci s o h w a h i a cas f h o a y ul e ie t dn r o
o
cou s del . (
re ays' Eggbe Tesi
'
er tmony) Hec esc
. rul hange ce ti a s i underyi t
s ran sumptons
l ng he
M a e t Ca t a at m p st t kt i o a c
nag m nt s nd tt t o a nt c ountt bo r r sûna i lta k r c d, a lt
he r owe '
nc a r c e or biiy

t a c r tl p oe tf tr rv n ea dg o h t eb ro rsc tmes t p so r v n e a d
o c u aey rj c uu e e e u n r wt, h o r we ' uso r, y e f e e u , n
f c or out i of t com pa s c r . (
a t s s de he
ny' ont ol Eggbe rTe t
e si
mony) Hec esalo c i swha
. rul s onsder
t

willkel ha n t t boro r bas d on is e re wih de opm e -t ge compa e .
l i y ppe o he r we
e
t xpe ince t vel
ntsa
ni s

( ueti Te tmony)
Bl sen si
.

4

b. Openpe t bo r r
ak. he r owe
Openpea i a now- nk pt s t r c pa . Defnda Dani J.Gitema a
k s
ba ru ofwa e om ny
e nt
el
tl n,

ctze of Fl i ,wa t Char n a CEO of Ope a durng a ltm e r e nt t t s
ii n
orda s he
ima nd
npe k i 1 i s elva o hi

ds t. ( t e n Te tmo y . Dee d n Ho r A.Kwo ,a ct e o Flrd , w asV i e
ipue Git ma si n ) f n a t wad
l
n iz n f o i a
i
c
Pr i t a Ge r Couns lof Ope a durng a 1tm e r e tt t s diput . (
esden nd ne al
e
npe k
i l i s elvan o hi s e Kwon

Tesi
tmony) Def nt Da d Baca a ctz of W ahi on,was a Exe utve Vie
.
enda
vi rly, iien
s ngt
n
c i
c
Pr i ntofOpe a a 1d Ope a sfna e de rm e begi ng i 201 , butdi not
esde
npe k, nd e
npe k' i nc pa t nt
nni n
3
d

hol t tteofCFO.PrtilStp. t7)
d he il
( era i a .
Ot r i vi s who hel r e i Ope a s fna e de rm e t sii d a ti .
he ndi dual
d ols n
npe k' i nc pa t nt e tfe t ral

Gln Fa r (l r r' was Openpe k' Fi e Die t fom J y 201 t
e nne d me'
Fa
)
a s nanc rcor r ul
4 koug Augus
h
t

201 ( r rTe tmony) M r Barl wasM r Far rss vior (d) Mr Fame was
5. Fame si
. . cay
. me ' uper s 1 . . r r
.

i ve i pr pa i t fna i l sa e
nvol d n e rng he i nc a tt ment f Ope ak and i dicus i a
s or
npe
n s sons bout ho t
w o
r cog z r venue pur ua t O pe ak' a e e s (d4 tv n Rih r (Rih r s'wa
e ni e e
s nt o
npe s gr em nt . 1 .S e e c ads d c ad ' s
l
)

t Vie Pr i ntofCor a e De o e and Fi nc atOpe a and wo ked t r fo
he c esde
por t velpm nt
na e
npe k
r
he e r m
J y 2011tlough M a 201 ( c r sTetmo y . Mr Rihad s pe vs d Bra Hr n k
ul
lr
y
4. Rihad si n )
. c r s u r ie in o s y
and Trs Pi ,a he r po td t M r Ba c a M r Riha ds d d ope a i
ih kus nd
e re o . r l y.
. c r i
r tonal fna e a
i nc t

Ope a i udi m a i t books a buidi fna i lf ec tmodel . (J.. Bra
npe k, ncl ng nag ng he
nd l ng i nc a or as
s f ) in

Hr n k (lr n k ' wa aCo to lri teFia c a d Ac o n ig De a t n a Op n e k
o s y V- o s y' s nr le n h n n e n c u tn p rme t t e p a
çl
)
fom J nua y t ough J
r
a r hr
une,201 . ( o ky Te t ny . M r Hr ns i a CPA ( riid
4 Hr ns
si )
mo
. o ky s
Ce tfe

PublcAc tnt a wa s r s dbyMr Rihads (d..
i couna ) nd s upevie
. c r .1 )
Som e Openpea ofi e s i ve i t t c c l o r to o Ope a s s t r
k fc r nvol d n he e hni a pe ai ns f
npe k' ofwa e

alo tsiid a ti . Ll Sive ($ l r ' wor d a Ope k fom Febr r 201 untl
s e tfe t ral oyd l m 1 ven') ke t npea r
Si
uay 0 i
a oxi t l N o mber 201 a durng t r l nt tm e pe i he wa r ponsbl f
ppr ma ey ve
5, nd
i he eeva i
rod
s es
i e or
moniorng t Togge lce e pr vii ng pr es wih AT&T. ( l r Tetmony) Andy
t i he
l i ns o soni
oc s t
Siven si
.

Ailo(Ail ' wa t eChifOp rto sOfs e (COO' o Op n a , ndwa e ly db
el $ el ' s h
t o)
t e ain tc r $
t ' f e pe k a
)
s mpo e y
elo
e
bl or i ng
Openpea fom 2005t oug 201 ( eloTe tmony) M r.Ai l wasr sponsi e f drvi
kr
hr h 6. Ai l si
.

t t i e i of Openpea s s
he ng ne rng
k' ohwa e pr
r oduct, i l ng t s
s ncudi he ohwa e a c t t e a
r r hiecur nd

buidi c rvi ,a quaiyt tng.(d4 Hes r s dOpe k' s t eengi e s
l ng, ode e ews nd lt esi 1 . upe vie
npea s ofwar
ne r
a rpore t M r Gite n.Ld..
nd e td o . tlma 1 )
i H er ul s l talL oa t O pe ak:201 M L SA -t Ci c T abl t
.
c e ' ni i
n o
npe
2
he s o
e

On M a c 3 201 Ope a e e e i o a $15 m ilon s ur d c e t f ciiy wih
r h 0, 2, npe k nt r d nt
li ec e r di a lt t

Hec e t o h a Ma trLo n a d Se u iy Ag t mt t(h 1 01 M LSA' wi amau iy
ruls hrug
se a n c rt rt n te 1 2
2
' t
) h
trt
dae ofJ 3 201 ( .Ex.1. The 201 Se o Tem De wa c ltrlz by al t
t
une 0, 5. Tr
)
2 nir r
bt s olaeaied
l he
a s t of Openpea excudi Ope a s i t le t l pr pe t a s t but i udi any
ses
k, l ng
npe k' n e lc ua o ry s e s
ncl ng

pr ee fo t s eofa i elecualpr rya s t.( eralStp.a 5- .
oc ds r m he al ny nt l t ope t s es Pr ti i t 6)
Unde t 201 M LSA,Ope a co na e r pr e e a wa r t t He c e
r he
2
npe k ve nt d, e es nt d nd ran ed o r uls

(ole vel t iW ar nte ' t t
e ldi y,he t ra is' ha:
)
No e nt ha ha or woul r as bl be e
ve
s d
d e ona y
xpeced t ha a
t o ve
M ae ilAdvere Efe tha oc ur e a i c i ng ....
tra
s f c s c r d nd s ontnui

No i onnai rpor, or Adva Requet ( q fna il
nf ton, e t
nce
s, or
nca
sa e nt...f nihe by oron be l ofBorowert Lende ...
t t me
ur s d
ha f
r
o
r
c ai d orc ai any m ae i m isae e off c or o it d
ont ne
ont ns
tral s t tm nt a t m te
o omist sa ean m a e ilf c ne s ar t m a t s aeme s
r t o tt y t ra a t ce s y o ke he t t nt
t r n,i t lght oft cr um sanc s u r whih t y we e
he ei n he i
he ic t e nde
c he
r
ma not m ila ng a t tme s h satm e was m a or
de,
se di t he i
uc t e nt
de
de m e m a
e d de. Addii l a and a l fnancal or busne s
tonaly, ny
1
i
i s

p o e to p o ie b Bo r we t Le d rwe ep e a e i g o
rj cins r vd d y ro r o n e r rp rd n o d
f t bas d upon a s pto t ber as bl a t tm e....
aih e
s um ins o e ona e t he i

( n u tditrm a dy a -o d t fn n ilsae n sa o t e
Ul a di n ei n e rt - ae a ca ttme t s f h
e
e d o s h mo t l q a tr a d y a). . a e b e p e a e i
n f uc n h , u re, n e r . h v e n r p r d n
accor
dance wih GA A P ....
t

( .Ex. 1 a 1 1 17 . Ope a wa as rquie t pr de Hec e wih monhl
Tr
t 3, 6- )
npe k s lo e rd o ovi
ruls t
t y,
qua t l a a
rery, nd nnua lcompla Ce tfc t ' sg by Ope ak' CEO orCFO ce tf ng
lt
ince riia es' i ned
npe s
riyi
6

t t Ope a s ac om pa ng fna i sa e e s co ple wih t W a r ntes i l ng
ha
npe k' c
nyi i ncal tt m nt m id t he ra i , ncudi

t tt yweeprpae i a cor ncewihGe r ly Ac e e Ac ountngPrncpl (
ha he r e rd n c da
t ne al c ptd c i i i es GAAP)
.
( .Ex.1a 1 1 Young Tesi
Tr
t 6- 7;
tmony) ç nc Re t'Fo mss tedby Ope kt
.S
Adva e ques' r ubmit
npea o
Her est o ai f
cul o bt n undspurua tt t l n a e m e alo r a ûr d t W a r nte . ( eral
s n o he oa gr e nt s e f me he r a i s Prti

Si .a 6 . Up n rc it o mo t y q re l,a d a n lfna ca sae n s Hec ls
tp t )
o e ep f nhl, uatry n n ua i n il ttme t, ru e
i t d t fna ili or ai i o isown s t m , PM R,t m oniora tac t fna a
npute he i nca nf m ton nt t
yse
o
t nd r k he i ncil
c ton ofal ofisporf i c
ondii
l t
tolo ompa e ,i udi Ope a . ( e lrTe tmo y .
nis ncl ng
npe k Ro se si n )
He c esen e e it t 2012 M LSA wih Ope a i l r pa tdue t Ope a s
r ul
t r d n o he
t
npe k n a ge r
o
npe k'

sr r ltons pwihCic Syse (1 s o')a de opmen oft CI Ta e f Cic
tong eai hi t so tms ç c ' nd vel
Ci
t he US blt or s o.
(
YoungTe tmony;Tr Ex.1 a 1.Howe r wihi sx we ksofl ni t $1 milon t
si
.
68 t )
ve , t n i e
oa ng he 5 li o
Ope a Cic e d t r ai ns p a g nc le t CI Ta e . (
npe k, s o nde he elto hi nd a e ld ht US bl t YoungTetmony; .
si
Tr

Ex.1 a 1. Ms Youngt tfe t tasar s tofCic sde ii t ç nd- -ie't CI
68 t ) .
esiid ha
e ul
so' cson o l oflf 'he US
e
tblt lt c ny t t( r e lha i se i i tal wasr ly no l rt c
a e,%he ompa ha Heculs d nvetd n niily
eal
onge he ompa
ny
t tweha i se i ' (
ha
d nvetd n. YoungTe tmony) Hec es ohermotvai f e ei i o t
'
si
. rul ' t
i tons or ntrng nt he
201 M LSA i l
2
ncuded M r Gite a s pro busnes s es and t sr t of Ope ak'
. tlm n' i r i s ucc s
he teng h
npe s
Boa d of Diecor , whih i l
r
r t s
c ncuded f
onner Appl CEO J m Sc l , a ot r pr ne
e
ol
uly nd he omi nt

busnesme M or Topfra Tom Hil ( be rTesi
i s n t e nd
l. Egg e tmony;Bl sen Te tmony) Hec e
ueti si
. ruls
doesnotcontndoraleget tt r wa a wr
e
l ha he e s ny ongdoi i c
ng n onne ton w ih t 201 M LSA .
ci
t he 2
i. O penpeak' Busne sChanges
i
s
i s

Untl M a c 201 Ope
i
rh
2,
npea s busnes was t deve o a s l e t e
k'
i s
o
l p nd el nd-o- nd
t e omm uni tons a daa s r c f ha dwa e ba ed s t m s ( eti lStp.a 5) Afe
elc
cai
nd t e vies or r r - s yse . Pr ra i t . tr
t ca elaton oft Cic tbl t Ope a s fed isf ust Adva
he nc l i
he s o a e , npe k hit t oc o
nced De ee Applc ton
vi
ia i

M a eme (k
nag nt $
ADAM ' s t r f mo l tl mmuni tonsde ce ADAM i or ae
' ofwa e or bie eeco
)
cai
vi s.
nc portd
muli e s t r compone st talo d c
tpl ofwa e
nt ha l we ompa est s cur y per te oye st us t r
ni o e el
mi mpl e o e hei

o mobiedeviesi t wor a e. ( eralStp.a 5) Thi wascaled iBri YourOwn
wn
l
c n he kplc Prti i t . s
l l ng

De ie' (1
vc ' '
BYOD' s fwae ( tlma Tetmo y . The ADAM soft a e had t ee
' o t r . Gi e n si n )
)
t
w r
hr
c
ompo s i l ng ( )a i tonst trn on a e us rsmobie de ce lke a e i
nent, ncudi 1 pplcai ha a
n nd- e '
l vi , i n mal

a piain, 2 s c rt s fwaef rt ea piain o temo l d vie a ( )as r e t a
p lc to () e u iy o t r o h p lc to s n h bi e c , nd 3 e v r h t
e
ha a ad i sr tve cons e a d c i era e. ( el Te tmo ) Usn Op n a s
d n m nitai
ol nd evie nt f c
Ailo si ny . ig e pe k'
s t r a i vi ,orte us r' woul be a e t us t i o m obiephone t downl d
ofwa e, n ndi dual ûnd e ,
'
d
bl o e her wn
l
o
oa
a Ope a c e t d m ala ia i n t ough whih t y coul s ur l s a r ei t r
n
npe k- r a e
i pplc to hr
c he
d ec e y end nd ec ve hei

wor r ltd e i. (d ) Ope ak wasa Swhie-a l'c
k-eae mal 1 .
npe
ç t lbe' ompany i t ti di no s lis
n ha t d t el t
pr t unde isown br nd nnme bu cusomi e ispr
oduc s
rt
a
, t t z d t oductt isc t r br nd a t ft
o t usome s' a nd o i

ise tmes n e . ( r ly Tetmo y Tr Ex.2 a 1 ) Ope pe k' mao c so r
t uso r' e ds Baca si n ; .
6 t 4.
n a s j r u t me s
i l d Rl (ç a kber 'a AT&T.( .Exs 25,1 1 .
ncude M sBlc ry' nd
)
Tr . 68, 80)
ii O pe ak' M as e Re al Agre m e wih AT& T
i.
npt s
tr s e
e nt t

On Aprl3,201 Ope k e ee i o a M atrRes e Agreme (i 2 M IA'
i
2, npea ntrd nt
se
al
e nt 1
201 t '
)
wih AT&T f a ADAM pr uc t tAT&T r e r d t asK'oggl .' ( era Stp. t5; .
t
or n
od t ha
ef re o
r e ' Prtil i a Tr

Ex.1 ) Puruantt t 201 M RA a s e ntag e ment bewe n AT&T a Ope a
3. s
o he 2
nd ubs que r e s t e
nd npe k,
AT&T woul buy pe mi sonsorçi e e 'fom Ope a t us t Toggl s
d
r si
ç c ns s' r
l
npe k o e he
e ohwar . ( el
e Ail
o

Tetmony) AT&T diti e s oft Toggl lc ns i e ly,butwoul prmaiys l
si
.
srbutd ome he
e ie es ntmal
d i rl el
or ot r s diti e t Toggl lc es t is e e rs c t e s. Ld.. Entprs
he wie srbut he
e iens o t ntp ie usom r
1)
e ie

c t e swer t cal lr c pa tst whi AT&T pr de ot rs r e s. (#) W h n
usom r
e ypi ly a ge om ni o ch
ovi d he e vi e f .. e
AT&T s d Toggl lce e t a entp rs c t m e ,AT& T woul make a r ques f t e
ol
e i ns s o n e ie uso r
d
e t or hos
lce e t be pr sone t t t e e prs c t e t oug t Toggl s r r (J.. The
i ns s o
ovii d o ha nt r ie usom r hr h he
e e ve . f )
Toggl s r r pr es e Toggl lc e pr s oni r
e e ve oc s d
e i ens ovi i ng eque t t A T& T' e e r s c t e s
ss o
s nt m i e us om r .

(d.. l t pr es wor d a i e d,AT&T' de woul a omai ly be s ntt t
1 4 f he oc s ke s ntnde
sor r
d ut tcal
e o he
Toggl s r r whih woul t n a oma ialy pr e st r ques a e ur t tt e e rs
e e ve , c
d he ut tc l oc s he e t nd ns e ha he ntm ie
8

c t rsad nitaorha a e st t ne y prvii lct e . (d.. I t ss nai
usomt ' mi srt d cc s o he wl o soned i ns s 1 4 n hi ce ro,
Openpea pl dnor ei pr soni t lc e .(d4
k aye
ol n ovii ng he iens s 1 .
l t Toggl s ve wa unabl t undert nd t AT& T or r f lce e ,Ope a
f he
e er r s
e o
sa he
de or i ns s
npe k

woul wor wih AT&T t man lyi t or rit t Toggl s v r (d.. TheTogge
d k t
o ual nput he de no he
e er e . 1 )
l
s t e t t a e e or er a pr vii d lc ns s wa l ca e a dif r t tm e , on
ofwar ha cc pt d d s nd o sone i e e
s o t d, t fe en i s

AT&T' cl ba e ofei Sive Li ng,oronAmaz ss r r.(#..Oncet e e ie
s oud- s d frng, l r ni
on' eves f )
he ntprs
c t rha a ce st t pr sone Toggl lc ns s t en e prs cusom e ' admi sr t
usome d c s o he ovii d
e i e e , he t r ie t rs
nitaor
c d d t r i e c l whi h e oye ,orend us r ,a t entr ie c t rwoul r c i
oul e e m ne xa ty
c mpl es
e s t he e prs usome
d e e ve

a i ttont us t lc ns (d) Ope a di no ha a co r ove whihe oye
n nviai o e he ie e. 1 . npe k d t ve ny ntol r c mpl es
or ç
' us r ' gott Toggl lc e or whehe t e us r c e t a tva e t Toggl
end e s'
he
e iens
t r he nd e hos o c i t he
e

lc ns . (d4 An e us rwho r c ve aToggl lc ns woul t n be a e t us Toggl
ie e I .
nd e
e ei d
e ie e
d he
bl o e
e
a i a i on t i own mobie devies downl de fom App St es on Appl,Andr d,or
pplc tons
he r
l
c ,
oa d r
or
e
oi

Blc ry.(#..
a kber f )

Op n e k' s fwae p o ucs icudn ADAM, wee s b e t t rg r us itr a
e p a s o t r r d t, n l ig
r u j c o io o n en l
t tng,i l ngby AT&T. (#.. Atonepoi ,AT&T s ntAc nt et Openpea t ase s
esi ncudi
f)
nt
e
ce ur o
k o ss
t rgor us sofOpe
he i o nes
npea ss t r ts i Ac e ur r t d Ope
k' ofwa e e tng. c nt e a e
npea st tng asa 3. on
k' esi
5

a s ae b t e 1 ( s)t 5 ( e t,whc me n ta Op n e k h d a r l bl,rpe tbe
c l ewe n wort o b s) ih a s h t e p a a ei e e aa l
a
t tng pr s . (#.. A rtng of2 or2. woul be g f a sa tup compa smia t
esi oce s . )
J
ai
5
d
ood or trny i lr o
Openpea ( eloTesi ny) n a ton,AT&T di s lbiiytssofOpenpea ss t r
k. Ai l tmo .l ddii
d caa lt et
k' ofwae
a rgulri er as wih tte orf r
t e a nt v l, t lre our oundsofsalbiiytsi ove afw ye r (d4 Mr
c a lt e tng r e as. 1 . .
A i lo w a notawa e ofa s a abiiy c e ns a ong AT& T' e em r s c t m e s usng t
el
s
r
ny c l lt onc r m
s nt i e us o r i he

Toggl pr t (d)
e oduc. 1 .Ope k' s t r c it typa s a1 ofAT&T' salbiiy t t.
npea s ofwae onssenl sed 1
s c a lt ess

(d..
1)

9

c The 2012M LSA Re t uc urnz
.
sr t i

AsofQ3201 Hec esr td Ope ka1 ' iss aef moniorngt ce trs
3, rul ae
npea $ on t c l or
35
t i he rdi iks

ofisla st b ro r .( . 1 1a 1 .Thesaea sg e av lebewe n 1a d 5t t e
t o n o o r we s Tr Ex. 6 t )
c l s in d au t e n o h
c edi rs ofa borowe ,wih 5 bei t rs es c edi. ( se Tetmony) A cr trtng
r t ik
r r t
ng he iki t r t Roe lr si
. edi ai
of$ 5mea t Openpe k wasa ' t h-aed cr di.' ( . 1 a 1;
$
35
nt hat
a
û c rt
wa
e t ' Tr Ex. 61 t Roese Tesi
lr tmony)
.

Th r t as me n t a Hec lsp oe td Op n a wo d et rne d t rie c ptlo
e ai lo a t h t r ue rj ce e pe k ul i
ng
he e o as a i r
a
ha a lqui t eve wihi t e t sx mont f r t compa t s vi . ( se
ve
i diy
nt t n hr e o i
hs o he
ny o ur ve Roe lr

Tesi
tmony) Hecul moniordc
. r es
t e ompa eswihace trtngof3orhi rmor cl eyt n
ni t rdi ai
ghe
e os l ha
i di isot rporf i c
t d t he
tolo ompa e wih bete c e tr tngs (d4
nis t tr r di a i . 1 .

I N ove
n
mber 201 AT&T i t d $1 m ilon dola s i Ope ak. ( tlma
3,
nvese
5 li
lr n
npe
Gite n

Tetmon .AsofDe embe 31 201 Ope k ha a oxi t y $1 8milon i c s and
si y)
c r , 3, npea d ppr mael 0. li n a h

rc ia ls ( era S i a 6 . Att a tme te o ttn n b ln e d et Hec e o te
e ev be . Prtil tp. t )
h t i , h usa dig aa c u o ruls n h
201 Seni Te m De wasa oxi t l $9. m ilo noti l ng a $1 1 m ilon end- 2
or r
bt
ppr ma ey 3 li n, ncudi
25 li
of
.

tl fe.(d..
e' e 1 j
m
i O pe ak' l e s i Resruc ur ng
.
npe s nt re t n
t t i

Att be nni of201 Ope a s
he gi ng
4, npe k oughtt r tucur 201 M LSA t gan a tonal
o esr t e 2
o i ddii
ca t lfo He c e ,e e t i e e tonl pa
pia r m
r ul s xt nd he nt r s- y ymen pe i , a e e t ma urt da e o
t rod nd xt nd he t iy t n

t l n. ( uesen Tesi
he oa Bl ti
tmony) l i notunc
. ts
ommon f Herul t wor wih a boro ng
or c es o k t
rwi
c
ompany t a nd,modiy,orr tucur a l n t gi t borowe a oppo t t t s e d.
o me
f
esr t e oa o ve he r r n
runiy o ucc e

(d..
1)
I a
n dvanc of t pot nta r s r
e
he
e i l e t udur ng, M r Ba cl y upda e M s Y oung a M r
i
. r a
td
.
nd
.

Eggbee a He c e on t sausofOpe
r t r ul s
he t t
npea spr t , is r l tons p w ih A T& T,a t l
k' oduc s t e a i hi t
c ua

fn n ilsae n sf r(42 3 a tna ca p oe to sf r2 4 ( eTr Ex . -7 . On
a ca ttme t o ) 01 , nd s n il rj ci n o 01 . Se . s 252 )
J n ay 1 ,2 4, r Ba ca sae i a e i t Hec e t tOp n a sû j rpate s
a u r 3 01 M . rly ttd n n mal o ruls ha e pe k' i o rn r
ma
1
0

h v n w c mpee t erf l lu h o te p o u t i lt ( 01 )Q4. ( .Ex.2 P era
a e o o ltd h i ul a nc f h r d cs n ae 2 3
' Tr
'
5; rtil

S i a 7 . On o b f r J n r 2 , 01 Mr Baca ak d fra d rc ie p o e to sfo
tp. t )
r eo t a uay 0 2 4, . r ly s e o n e ev d rj cin r m
AT&T ast AT&T' f r catd lc ns s l f Toggl i 201 ( rly Tetmony;Tr Ex.
o
s o e se ie e aes or
e n 4. Baca si
.

2 3 . I a e i s n t Mr Ba ca ,AT&T p oe td To g elc ns slso 5 5 0 i Q1
8 ) n n mal e t o . rly
rj ce g l ie e ae f 0,0 n
2 4 2 ,0 i (2 2 4 2 35 0i Q32 4, n 2 75 0i Q42 4, o at tlo 8 0,0
01 , 210 0 n ) 01 , 9 ,0 n
01 a d 9 ,0 n
01 f r o a f 5 0 0

p oe tdTo gelc ns s lsi 2 4.( . 2 3 .
rj ce g l ie e ae n 01 Tr Ex. 8 )
On J nua y 22,201 M r Ba ca s ntM s Young and M r Eggbee an e al at c ng a
a r
4, . r ly e
.
.
r m i, ta hi

s e he wih Ope ak' rvenue fr as f 201 ( .Ex. 26) The s e ds e
prads et t
npe s e
oec t or 4. Tr
.
pr a he t

rp e e td Op n a sp o e tdln n ilmerc ,n ldnglc n es lsa dr v n ed rv d
e rs ne e pe k' rj ce a ca tis icu i ie s ae n e e u ei e
t eer m. ( rtilS i a 7 8 Tr Ex. 6 . M r Baca r l d o AT&T' p oe td lc ns
h rfo P era tp. t - ; . 2 ) . r ly ei n
e
s rj ce ie e
sls fr 201 i f r ltn te fn nca p oe to s t a he s n t Hec ls ( rly
ae o
4 n o muaig h ia il rj cin h t e t o r ue . Ba ca
Tetmo y;Tr Ex.2 3 2 a 3 . Op n a s fn n ilp oe to sf r c se ta Op n a
si n
.
8 , 6 t ) e pe k' i a ca rj cin o e a td h t e pe k
woul s l AT&T 861467 Toggl lc ns by t end of 201
d el
,
e ie es
he
4.

Ex. 26 a 3; Ba cl y
t
r a

Tetmony) TheJ r 22 e las atche aPowe poi pr enai whihsatdt tt
si
.
anuay mai lo ta d
r nt es tton c t e ha he

C
'
AT&T i tr a s lsq o a's: 6 0 0 l e s si 2 4. ( . . 6a 1 ) Th Po r it
nen l ae u t'i 1 0,0 i n e n 01 5 Tr Ex 2 t 5 . e wepon
8
c
'
as rp e e t t a To ge ila n h d i Q4 2 4'a AT&T,a d t tI
lo e r s ns h t g l t lu c e n
g
01 5 t
n ha S
AT&T h sara y
a le d
r l g oggl ou t ove 40kof1 t gee i enalus r.'(d)
oled ' ej t o r
r
00k ar td ntr
es' I .

He c ls rle o t s s ls a d tna ilp o e to i e auaig wh t r t
r ue eid n he e ae n i nca rj cins n v l tn
ehe o
r sr t e t 201 M LSA by i l ng t m i isEM a ge e Cas 's di oft M a c
e tucur he
2
ncudi he n t l na m nt e' e on
ht r h

201 Ne De Reques M e (é ac 201 NDRM') (
4 w al
t mo l rh 4
M
'. Eggbe Te tmony;Bl t n
er si
uesei
Tesi
tmony;Tr Ex.1 Tr Ex.26a 2- .The efna a sae t die ty te Ope ak'
.
68; .
t 6)
s i ncil ttmens rcl id npe s
f e as r ve
or c t e nue f om A T& T Toggl s lst isp oe td n mbe o To g e l e s s ls t
r
e ae o t rj ce u r f g l i n e ae o
c

AT&T.( era Stp.a 8)
Prtil i t .

On J nua y 29,201 M r Ba c a e a ld M r Eggbe r a M s Young wih da f w
a r
4, . r l y m ie
.
e nd .
t $ e

moe si 't tOpe k ha bee wor ng on. ( .Ex.27 a 1 .Theatc d Powe poi
r ldes'ha
npea d n ki
Tr
t)
ta he
r nt
p es nt ton i udes a si t r t a e Openpea s e rir r pr entton t t AT&T'
r e a i ncl
lde hat eiert d
k' a le e es a i ha
s

Tog elc ns s e quot wa 860, lce esf 201 ( .Ex.27 a 20) The si alo
gl ie e als a s 000 i ns or 4. Tr
t .
ldes s
r pr e e t He c e t tbe nni Fe u r 6t AT&T woul ofe Toggl t isc t
e es nt d o r uls ha gi ng br a y h,
d fr
e o t usomer
s

f rfe p s n t AT&T' S le Tik t pr g a ( . . 7 a 1 ;Eg b e Tetmo y .
o r e urua t o
s ç d n c e' o r m. Tr Ex 2 t 9 g e r si n )
Go
'
The Gol Tiketm ehod wa a AT&T pr
den c
t
s n
omoton wher by AT&T s i z Toggl a
i
e
ubsdied
e nd

ga i t c t r a no c ti or rt pr et sl ofot AT&T s r i s ( tl n
ve t o usomes t os n de o omot he ae
her
e vee . Gitema

Tesi
tmony;You Tesi
ng tmony) By s lnglc ns t ise e iec tme s AT&T s
. eli ie es o t ntmrs uso r,
oughtt
o
tghtn is r ltons p wih t e en e prs c t e s by pr di t
i e t ea i hi t hos t r ie usom r
ovi ng hem wih a ne s r i e.
t
w e vc

( tlma Te tmony;YoungTetmo Eggbee Tesi
Gite n si
si ny;
r tmony)
.
On Fe ua y 11,201 M r Gite a a M r Ba c a m e wih He c es CEO M a l
br r
4, . tlm n nd . r l y t t r ul '
nue
He i z,C1 Sc tBl t i J Egg r a AprlYoung a He c es ofk ei Pao Alo,
nrque
O ot uesen, ohn
bte , nd
i
t r ul ' t n l t

Caio nat d sus ap tnil e tu trngo t 2 2M LS ( era S i a 8 Tr Ex. ,
lfr i o ic s oe ta r sr cu i f he 01
A. Prtil tp. t ) . 28
29) Thene da Mr He queze ee hi not fo t me tng i oaHecul daa s .
.
xt y, . mi
ntrd s es rm he ei nt
r es tba e
( .Ex.29 a 3- . M r He i z rco e t tM r Gitema a Mr Bacly S lneg
Tr
t 4) . nrque e untd ha . tl n nd . r a t i dl
out
t i r ques f r He c e t c i e e ng bo h a ne i e es onl pe i as wela r her t t o
r uls o onsder xt ndi
t
w nt r t y rod
l se

u iea tona c pialt t c
psz ddii l a t o he ompa ' (d.a 3) M r He iue as wr t t tt CAT&T
ny. I t . . nrq z lo oe ha he S
'

a n a s l q t f r n w s b s rp in )i 8 40 0 a $5 /u whc e u tst a a n a
n u l ae uoe o e u lcito s s 6 ,0 t 0 s b ih q ae o n n u l
f r as ofappr m ael $43 milon i r ve s As i r di e a t s
o ec t
oxi t y
li n e nue .
nc e bl s hat ounds t scompa
, hi
ny

ha yett dei ron isma prors e f e ass' (#.. Mr He i di notrl o Mr
s o lve
t ny i als orc t. f ) . - quez d
'
ey n .
Ba c a a M r G item a s r pr e a i a r quie t D e l Tea a He c es t ve i y
r l y nd . tl n' e es nt tons nd e r d he a
m t r ul o r f

t saeme s ( nrque Te tmony) M r Henrque desrbe AT&T' e ce s e rmp
he tt nt. He i z si
. . i z ci d
s xpe td als a

u o To ge lc n e t 8 40 0 lc n e ,whc co ey ta k t e p o e to s t a AT&T
p f g l ie s s o 6 ,0 ie s s ih ls l r c s h rj cin h t
12

p o ie t Op n a ( . Ex. 2 3 Baca Te t n ) a d t r s tn ice s i
r vd d o e pe k Tr
8 ) rly si y , n he eul g n r ae n
mo
i
Op n e k' p oe td rve u . ( .Ex. a 3 He rq e Te t n Eg b e Tetmo y .
e p a s rj ce e n e Tr
29 t ; n iu z si y; g e r si n )
mo
M r He i z not t t M r Ba ca a M r Gite a e e s d i e es i a ne c edi
. nrque
ed ha
. r ly nd . tlm n xpr s e nt r t n
w r t

f c lt fom Ht c e t ti ude i e e tonl pa e tpe i a new ca t l a t the
a iiy r
r ul s ha ncl d nt r s - y ym n rods nd
pia , nd ha
r id t he woul be ha
eple hat
d
ppy t co i i i Ope a de onsr t lr ton' wih t i
o nsder t f
npe k m taed s ac i ' t he r
t

pr t ( .Ex. a 4) M r He iue alosae hi beleft tdes t Mr Baca andM r
oduc. Tr 29 t . . nrq z s ttd s i ha pie . rly
.

Gi lma sr yp o e to , 1 Op n a wo dr no to c s b lt Ap i o e ryM a , 2
t e n' os rj cins ( ) e pe k ul u u f a h y ae rl r a l y ( )
t
Ope
npea sunc ran outook de ndson gr dua i r as i lc ns s es a d( )çh n x 6
k'
e ti
l
pe
a l nc e es n ie e al , n 3 ç e e t 0
t
da a e c ii a f t co pa .' (d )
ys r r tc l or he m ny ' 1 .

La ero Febr r 1 201 M r Bl t i pr pos d a de sr ur t twoul r quie
t n
ua y 2, 4, . uesen o e
al tuct e ha
d e r

ijcig a s l a u to a dto a c ptli Op n a bu wo l e a l Ope pe k t
ne tn
mal mo n f d i n l a ia n e pe k, t u d n b e n a o
i
rfnanc al ise si oblg tonsunde t 201 M LSA (ncudi t ba k-nd f ) extnd
ei e 1 t xitng iai
r he 2
i l ng he c e ee, e
Ope
npea s r pa e t r s l we ismont y l pa
k' e ym nt e m , o r t
hl oan ymen s a gi i t opporuniy f
t , nd ve t he
t t or

i ee tonl pa ntperods ( .Ex.29 a 3;Bl sen Tesi
ntrs- y yme
i . Tr
t
ueti tmony) Thi pr a pr de
. s oposl ovi d
t ge r lsr eoft M ac 24,201 l n rsr durng (1 4 ARMLSA' . ( .Ex.5;
he ne a tudur he rh
4 oa etu i .
201
' Tr
)
Bl t i Te tm ony;s e Tr Ex. 1 )
ues e n s i
e .
68 .

i. H e cul 'M otvatonst Res r ure
i
r es
i i
o t uct

Att s me tme t tM r Gite
he a i ha . tl man a M r Ba c a we e i rng a
nd . r l y r nquii boutr tucurng
esr t i
t 201 M LSA,He c e wa e l tng isborowe sa l r sr durng c ndi t s t ti
he 2
r ul s s va ua i t r r s oan e tu i a daes o ha t

c d ge r t fe i omet r s e r ngsf is Q1 201 fna a satme s ( nrq
oul ne ae e nc
o aie ani or t
4 i ncil t e nt. He iuez
Te tmo Tr Exs 1 1 )
si ny; . . 66, 67 .
On Fe ua y 1 201 M r He i
br r 4, 4, . nrquez s nta e lt M r tlm a f l ng up o
e n mai o .Gite n olowi
n
Ope a sr que tf a ne l n,a sai t the ha 1a sr i entve t m a t sofe
npe k' e s or
w oa nd t tng ha
s 1 tong nc i o ke hi f r
BUT i m us cos be or M a c 15 h,t r a trl si t r t d.' ( . 72) Two da ltr
t t l e f e r h t he e fe es n e est ' Tr Ex. .
ys ae,
l3

Mr He rq e s n a e i t s n o me e so He c ls wih t e s b e tln :'i t
, n iu z e t n mal o e ir mb r f r ue t h u j c ie lme o
t
have ts e mi f Q1201 - guysnoras t hi be ndt fcs weaei de pc a
r s ome a ngs or
4
e on o de hi he a t, r n e r p

fr Q1 201 eani gi n our ne orgnai a f ngs s fr i Q1 201 ' M r
o
4 r ngs ve
w ii tons nd undi o a n
4.' .

He rq e g e o t me to Op n a a aç ao r sr cu i p tn il a dd t . ( . .
n iu z o s n o ni n e pe k s s j r e tu trng oe ta c n iae' Tr Ex
M
'
1 . l t s me e i,Mr He que saed t the i ioo ng f a mi mum of$2 t $3
66) n he a mal . mi z tt ha
s l ki or
l
ni
o
m ilon i f ori e es i ome by t e ofM a c ' M r He q z co i
li n ee nt r t nc
he nd
r h.
' . mi ue ntnued,iGuys w e
l
,

e n tmis t r ig i (i) n e a1ha s o d c t e u e ta we a e no g i g t mis
a ' s ann s sc e d l nd n e k o ns r h t
r t on o s
e m i .I wilkilwha weha a lwor s ha d t buid. g t o yourporf i ,s ub
a ngs t l l
t
ve 1
ked o r o l Di hr ugh
tolos cr

e e y d a,t r o e e r r c ...So h n sl i(i) n e e eyo es h l. W e n e
v r e l u n v r vey o k.
o et
y, sc e d v r n ' ep
ed
ea i ,fnds penni f mepl s ' (d..
nzngs i ome
es or
eae. 1 4
'

On Mac 4 2 4 M r He q e flo d u o h srq s f rmao r sr cu i
r h , 01 , . mi u z o lwe - p n i e uet o j r e tu trng
c ndi t whe he s a e al t M r Bl sen a ot r m e
a daes
n
ent n m i o . ue t i nd he
mber o He c e ' s ni r
s f r uls e o

ma a e n wih te s be t l e ç y u dae o t e mao rsr trn o mae il
n g me t t h u j c i : s
n An p ts n h j r e tucu i g r tra
modii ai . l t body oft ema l M r He i
fc tons' n he
'
he
i, . nrquezas d S her ar we o . . . Open peak
ke ç
W e e
n

(ij'a d c niu d ' e s snd a u d t a d te poe ta d lr b ig g n rtd b t e
sc' n o tn e l ae e n p ae n h tn il ol s en e e ae y h
pl
a
rsr t e.'( .Ex.1 a 5) J scaBar Hec es Chi Fi nci Ofi r r po
e tucur ' Tr
67 t . esi ron, rul ' ef na al fce, es ndedt
o
t e la i l
he mai nd ncuded a c r t tlse t a o ofi ome t twoul be ge aed fom
ha t ha it d he m unt ne
ha
d
ner t r
e c r sr
a h e tudurng dea orma e i lmodika i aong wih t co r s
i
l
t ra
f ton, l
t he r e pondi i r as on a pe
ng nc e e
r

s r e ni bass (d.a 4) Ope a waslse ont c r.(d.. Thec r sae t ta
hae ar ngs i. I t . npe k
itd he ha t 1 )
ha t ttd ha

p oe td Op n a rsr cu ig wo l g n rt $ 9 ,1 i i o f rHec ls a u tn
rj ce e pe k e tu trn u d e eae 3 61 9 n nc me o rue , mo n ig
t a e ni i r s of$ 007pers r .(d a 4)
o n ar ngs ncea e 0.
ha e 1 t .
ii M arch 2014 N ew D ealR eques M em o
i.
t

I lghtofbot Ope a sa He c e de iet r tuc ur t 201 M LSA , r ul s
ni
h
npe k' nd r uls' sr o esr t e he 2
He c e
bega isi e alpr e f a ovi t l n r t u t i On M a c 1 201 H e c e a
n t nt m
oc ss or ppr ng he oa esr c urng.
r h 0, 4, r ul s nd
14

Ope a t ough M r Kwon,sgned a Te m She tt t outi t es e i lt r s of t
npe k, hr
.
i
r
e ha
lned he s nta e m
he

r tucurng agee .( .Ex.4) On M ach 11 201 M r Bl t n s nta e i t t
esr t i r ment Tr
.
r
, 4, . uesei e n mal o he
He c es l t nt Comm it e, c ng ot r membe s of t Openpe k Deal Te m a
r ul nvesme
te opyi
he
r
he
a
n t

Hec es and atc ng t Ne De Memo t rsr cur t 201 M LSA (f a c 201
rul
ta hi he w al
o e tu t e he 2
i rh 4
M
NDRM '. ( .Ex.1 ) l t e i,Mr Bl t nwr et tt M ach201 NDRM rfe t
' Tr
)
68 . n he mal . uesei ot ha he r
4
elcs
ç n efo tt ge a r tudurng /ne de f c lt i pl c t tma s s ns f rt Co pa
i f r o t esr
a
i
w bt a iiy n a e ha ke e e o he m ny

wh l a te smetmep oe t a dc mp n ae glr ue )a p o raey.. . 1 a o vo sy
ie t h a i r tcs n o e s ts lec ls p r p itl . () m b iu l
s
uppori oft spr al' ( . 1 a 1.
tve hi opos . Tr Ex. 68 t )
'
M r Bl se n ou lne a pr alwhe e He c es woul c mi a new $1 m ilon
. ue ti ti d
opos
r by r ul
d om t
5 li

l n t Ope ak,di de i ot ta hes Tr Ex.1 a 1.I t Fis Trnc dueupon
oa o npe
vi d nt wo rnc .( .
68 t ) n he rt a he,
sg ng,Hec e woul l n Openpe k $1 5milon t ti ude ( )s if nga1 rmani
ini
ruls
d oa
a 0. li ha ncl d 1 atsyi l e i ng
prncpl a i ers due a t $1.25 milon ba e fe of t 201 MLSA,( a
i i e nd nt et
nd he 1
li
ck-nd e
he 2
2)
$ 000 é w fclt fe't Herulsf t ne l n,a ( a oxi tl $51 000 i
200, i
ne a iiy e ' o c e or he w oa nd 3) ppr maey 8, n

ne c pia i sme . (d ) Ther tucurd l nwoul ber i on anew 36- nt tr
w a tl nvet nt 1 .
esr t e oa
d epad
mo h em,
a c ai d a fna i c na whe e Ope a wasr quie t r s a l s $1 milon
nd ont ne i ncal ove nt r by
npe k
e r d o aie t ea t 5 li
i ne e t by t e ofM a wih a l s $5 m ilon c i no lt rt n Aprl ores t r
n w quiy he nd
y, t t ea t
li om ng a e ha
i, le he e

wo dbea a t tce n ofdea t (d..TheSe ndTr nc wa a$4. milon l nt t
ul
n uomai ve t
ful. 1 4
co
a he s
5 li oa ha
woul o ybe mea ia ei Ope a me ce ti pef ma emiet s (d.a 1, .
d nl eo valbl f npe k t ran ror nc lsone . 1 t 9)
The M a c 201 NDRM a tc d t M r Bl t i s e a louti d t t r s of t
rh
4
ta he o . uesen' m i
lne he e m
he

prpos r sr curngandmades ve a obs r ai rgadi t saeofOpe k.(d a 3
o ed e tu t i
e r l e v tons e r ng he tt
npea 1 t 20 . l t Ba ound a Siuai Ove viw s ci Heculs r c z d t t tSi
) n he ckgr
nd t ton
r e e ton, r e e ognie ha ' nce
f ngst Com pa ha s r ed t g o r ve
undi he
ny s t uggl o r w e nues f l i t ca la i of t Ci c
olow ng he nce l ton
he s o

CI tbl . (d.a 3 .Tha s ci alonoe t fsgnii ntsri 'on Ope a slq diy
US a et' 1 t )
'
t e ton s td he si fca tan'
npe k' iui t

15

fo t e2 2M LS Sc re ta riain rt,a dt ei nc u a i ( ltts l)rve u s'
r m h 01
A' u rn mo t to at n h i o rgng ab i mal t n e '
z
e
fo Op n a sh g - r ûl p rn r,
r m e pe k' ih p o e a te s AT&T a dBlc b ry.(# a 3 .
n a k er f . t )
TheBusnes Updae s ton oft M a c 201 NDRM a c ael de crbe t t r of
i s
t eci
he r h
4
c ur t y s i d he e ms
Ope a s r a i hi wih AT& T,i l ng t tAT& T wa r s
npe k' eltons p t
ncudi ha
s e ponsbl f t hi t
i e or '
pus ng he

To gep o u tt e dusr, a dt tt n a e p cs5 k s blcito l i 1 4b s do
g l r d c o n es' n ha ç pe k x e t 0 u s rp in s n Q1 a e n
'
ope
AT itr a f r c ss Th 2 4 tr tgo AT&T To ge l t s s i 8 41' (d a 6
&T ne n l o e a t. e 01 a ge f r
g l i n e ) s 6 1. 1 . t )
c
'
(
empha i a
ss dded) Herul not t ttglc rng lc ns /ubsrpin r nue fom e si
. c es ed ha tre uri ie es c ito eve r xitng
pa t rhi wilne d t m ae ilz ' f r Ope a t s c d,but as poi e outt tt s
rne s ps l e o t rai e' o
npe k o uc ee
lo nt d
ha hi
t e rrs 't t cr di wa l e e i bot t c r ntsr t e a t ne sr t e' (d.a
i a ik' o he e t s t s nt n h he ure tucur nd he w tucur . ' 1 t
cl
pr

6) Hec e alodic s t sr ngt ofOpe k' pa t rhi wih Blc ry,whi ha
. ruls s s used he te h
npea s rnes p t a kber
ch d
$ en e prs i ti ' a $1 1payi lc ns s'whieSse diy addi 2.5k s c i r pe
1
200 t r ies n ral' nd : 81
ng ie ee ' l ft a l
ng
ubs rbe s r

mont snc lunc i 3Q13. (#..
h i ea hn
' f)
'
I t i cor i Suppor'sci t M ac 201 NDRM rcognie t t( )Hec e
n he ç t s n
Fa
t' e ton,he r h 4
e
z d ha 1 ruls

wo d tk o çu t6 0 i ic e na Da lprn ia rs , a ( t tt afnnai
ul a e n t s 0 k n n r me tl y
i
icp l ik' nd 2) ha he fi tve
,
fna i l c na r quii $1 milon i addii l equiy by M a 31 201 l e
i nc a ove nt e rng 5 li n
tona
t
y , 4 i dl
addg
pr e ton' f Her ul r l tve t t e si l n s h t ti wa ts ii a l de ine t
ot c i ' or c es e ai o he xitng oa uc ha t s 'pecfc ly sg d o

alvit t rs asoeitd wih a nea-e m lqui t is ' (#.. Addii l Hec e
le ae he ik s ae t
rtr i diy s ue. f )
'
tonaly, ruls
r c z t ttr ve
e ognied ha ûe nue tac i i ver lm ie a t s poi ' but wa optmitc t t t e
r ton s y i t d t hi
nt'
s i si ha her
woul be m or r venue ta ton be us AT&T a Bl kbe we e ç c i y s li t
d
e e
rci
ca e
nd ac ny r i tvel elng he
a

pr tt e us r. (#..
oduc o nd- es' f )
'
I t l s ' s c i He c e r ogni d bo h t tOpe
n he i ks' e ton, r ul s ec ze t ha
Ri
npea ç ss
kt
ha hown an i biiy
na lt

t p ro m i a e r a c wi gt)f rc ss' n t a ih it rc l e n efo e dusr i sil
o ef r n c o d n e t is o e at'a d h tt lso ia rve u r m n es s tl
h
l
mi ma, wih non-e uri e neei (1 ' r nue c tt i ûrc rvenueofa
ni l' t
'
rc rng ngi rng t
NRE' eve
)
onsiutng te ent e
ny

1
6

sg i c n e' (d a 7 .He c lsk t t a NRE r v n ewa tpia f rad veo me tsa e
inf a c . 1 . t ) rue n w h t
i
'
e t u s y c l o e lp n -tg
c nylkeOpe a (
ompa i
npe k. Eggbee Tetmony;Bl t nTesi
r si
uesei tmony)
.
The M a ge
na ment Ca e s ton of t M emo i or a e Ope a s fna a
s eci
he
nc por t d
npe k' i ncil

sae nsa dp o e to sp o ie b Mr Baca i teJ n a y2 e i.( . 2 ; .
ttme t n rj cin r vd d y . r ly n h a u r 2 mal Tr Ex. 6 Tr Ex.
1 a 8- 0) The fnanca sae s c itd of Openpe k' ç t lna i s t o h
68 t 1 .
i il ttment onsse
a s i ual ncal hrug
ac

De e e 31 2 3 wi q a try p o e to st ra tr' ( .Ex.1 a 8 1 ) Ope pe k
c mb r , 01 , t u re l rj cin hee fe. Tr
h
'
68 t , 1 . n a
rp e e tdt a i g neae a p o i tl $ 8 mi in i rv n ei 2 3 a d p oe td ta
e rs ne h t t e rtd p r xmaey 2.4 l o n e e u n 01 , n rj ce h t
l
i wo dge ae$72. milo i rve i 201 t#.a 8 .Ope kalorpr e e t t
t ul nert
93 lin n e nue n 4. f t )
npea s e es ntd ha

i l s $ 231milo i 2 3 a d p o e tdt a i wo dma e$ . mil n i 2 4. (d a
t o t 2 . lin n 01 , n rj ce h t t ul k 3165 li n 01 1 . t
o

9 . Th çoe l c me Sae n Drv r' lse icu e t ep o e td rmp i AT&T To g e
) e s y n o ttme t i es' itd n ld d h rj ce a n
l
gl
lce e s l ,c it ntwih wha AT&T r pr s nt t Openpea t be isToggl lc ns s e
i ns aes onsse
t
t
e e e ed o
k o t
e i e e als

tr tfr 201 ( .Ex.283 . ( .Ex.1 a 8) The M ac 201 NDRM as noe t t
age o
4 Tr
) Tr
68 t .
rh 4
lo td ha

'o v rl AT&T p o e td rv n c n ttts 7 .% ' o t tl 2 4 p oe td rv n e
i l eal
g
rj ce e e ue o si e 40 9 f oa 01 rj ce e e u ,
u
sg f igtesg fc n eo Ope pe k' rlto hpwi AT&T.(d4
iniyn h iniia c f n a s eains i t
h
1 .
l t HTGC Cas He cul c nged Ope a sas umptons a made isown,mor
n he
e, r es ha
npe k' s
i
nd
t
e

p si si prj cin f rOpe pe k i 2 4 ( . 1 8a 1 - 3 . He c lsp o e td ta
e smitc oe to s o
n a n 01 . Tr Ex. 6 t 1 1 ) r ue rj ce h t
Ope a woul ge r t $1 68 milon i r nue i 201 (d.a 11 . Hec e as
npe k
d ne ae 5.
li n eve n 4. I t )
ruls lo

prj ce t a Ope pe k wo l ls $ .6 milo d lasi 2 4 l sn $ mi in mo et a
o e td h t n a ud o e 255 lin olr n 01 , o ig 3 l o r h n
l
Op n a l t i 2 3 (# ) l ma n t i p oe t n,Hec ls a s me ,c n rr t
e pe k os n 01 . f .. n kig hs rjci
o
ru e su d o tay o
Op np a ' p oe to s $ Q1 g o h o 0 i p r eu ll e s s(
e e k s rj cin , 1 4 r wt f % n ep t a i n e AT&T)a d s b cito
2
c
n u s rp in
( a kber . (d..Hec esmadet s a s i , cha
Blc ryl' 1 4 rul
'
he e sumptons whi mountdt Ope a a hi ng
e o npe k c evi

j s 2 2 o p oe t d rv n e b c u e i rc g ie t tSthe Co a y h s rpe tdy
u t 0.% f rj ce e e u , e a s t e o n z d ha û q
l
mp n a e ae l
m i s t r t ' a t t i he r l of bot of t a
s ed a ge s' nd ha l
t olout
h
he bove parne r a i hi c d be
t r el tons ps oul

sg i c n l so rta t eCo n a tcp t s' (#) Th HTGC Ca ewe to t p oe t
i nf a ty lwe h n h mpa y niiae . f .. e
i
'
s n n o rj c
17

ta Op n a wo l g n rt j s 1 0 o p oe td rv n ei 3 4,1 4 f r4Q1 ,a d
h t e pe k ud e eae u t 8.% f rj ce e e u n Q1 9.% o
4 n
21. f t yea .Tr Ex.1 a 11.
4% or he r ( . 68 t )
d. 201 ARM LSA be wee H e cul sand Openpe
4
t n r e
ak

On M a c 24, 201 Her ul a Ope
rh
4, c es nd
npea e ut t ç
k xec ed he i
Amende a Re t t
d nd saed

M a tr Loa a Se iy Agreme ' ($ 4 ARM LSA')
se
n nd curt
e nt' 1
201
',wheen Hec e a Ope a
ri ruls nd npe k
ag ee t r tucur t 201 M LSA , wih He c esc
r d o esr t e he 2
t r ul omm itng $1 m ilon i a l on t r s
ti
5 li n oan e m

s tntaly t s m e as i t tnn s e . ( era Stp. 8;Tr Exs 4,5,6) The Sec
ubsa i l he a
n he e
he t Pr til i at
. .
.
ond
Am e d and Resatd Sc dul of Te ms a Condii at c a i por t t 201
nde
te
he e
r nd
tons ta hed nd ncor aed he
4

ARM LSA. ( era Stp.a 8;Tr Ex.6 . The201 ARMLSA c ai t W ara iss t
Prtil i t
.
)
4
ont ned he
rnte e

f t i t 201 M LSA ( era Stp.at8)a rquied Ope a t s t Co i e
orh n he 2
Pr til i
nd e r
npe k o ubmi mplanc
Ce tfc t s a compa ng fna i lsa e nt t tc ris d t saemen s comple wih t
riia e c
nyi i nc a t t me s ha e tte he t t
t
i d t he

W arn is ( .Ex.5 j 7 1d ,Ex.E) The a r e n a s c n ane a p o ii n i j 72
ra te Tr
.()
.
g e me t lo o ti d r v so n
.

i ana ment Ri s'whih per ted Her ul s ç o i pe t t Colatr l a e m i a
l
M ge
ght'
c
mit
c e ç ns c he
t
l e a nd xa ne nd
m a c esa a tac soft booksofa ounta r co ds' ûo m e twih m a ge e
ke opi nd bsr t
he
cc
nd e r 'and '
t
e t
na m nt

a ofi r ofBorowert dic ss h booksofac ountand r cor .' ( . 5a 1 .
nd fce s
r
o s us uc
c
e ds ' Tr Ex. t 4)
Upon cosng oft 201 ARM LSA a a trr eptofa Advanc Re s Fonu fom
l i
he 4
nd fe ec i
n
e que t
r

Ope a ( .Ex.7 , c esln $1 5milondolas(hel rtTrnche' t Ope a , ata
npe k Tr
) Herul e t 0. li
lr t s s a
Fi
' o npe k
)
1 i ees rt ( .Exs 5,6,168) The pr ee oft Fis Trnche woul trtgo t
2% ntr t ae. Tr .
.
oc ds he rt a
d ss
o
r payi He e e a 1a ount r m ani on t 201 M LSA l n, i l ng prncpalba a e
e ng r uls l m
s e i ng
he
2
oa ncudi
i i
l nc

a it r t a o i t a pr m atl $8. m ilon ( .Ex.5 a 7;Tr Ex.6 1 ) Th
nd n e es, m untng o p oxi t y 6 li
Tr
t
.
, 68 . e
.

Fis Tr nc woul as pa He c est $1125 m ilon e oft r f owe fom t 201
rt a he
d lo y r ul he .
li nd- -e m ee
d r he 2

MLSA,a a$200, ne fciiy fe.( .Ex.6,1 . I t al t Fis Trnchepr ded
nd
000 w a lt e Tr
68) n ot , he rt a
ovi
Ope a wih a oxi ael $51 000 i ne ca t l M r Kwon sgned t 201 ARM LSA
npe k t ppr m t y 8, n w pia . .
i
he 4

18

a ac ompa ng doc e s a t Adva Re tt tOpe ak wa r quie t sg
nd c
nyi
um nt, nd he
nce ques ha
npe
s e rd o in

beor t Fis Tr nc f d.( . .5, 7)
f e he rt a he unde Tr Exs 6, .
e Wai e ofFi i Cov nanti 20 ARM LSA
.
vr
nancal e
n 14
The 201 ARM LSA c aned a ne cove ntt t Ope a wa r quie t r ie a
4
ont i
w
na ha
npe k s e r d o a s n

a tona $1 m ilon i ne e t by M a 31 201 r ii $5m ilon oft ta
ddii l 5 li n w quiy
y , 4, asng
li
ha moun by Aprl
t
i

30,201 ( .Ex.6 a 4- ) l tal Ope a beive t ti woul mee t s c na
4. Tr
t 5 . niily, npe k le d ha t
d t hi ove nt

t r u h a$1 milo c s iv sme tfo Acim Hodig LLC (Acim'. Op n a a
ho g
5 l n a h n et n r m t
i
u
l ns
1 tu '
1
) e pe k nd
Aci sgned aTe m Shee on Aprl25, 4 t touti d t t r ofAc i ' i smenti
tum i
r
t
i 201 ha lne he e ms
tum s nve t
n

Ope k. ( .Ex.32a 2- . OnAprl28,2015,Mr Ba cayf wadedt t m s e t Ms
npea Tr
t 3)
i
. r l or r he er he t o .
You M r Bl t i and M r Eggbe ra r pr e e t t m t tOpe
ng, . uesen,
.
e nd e es ntd o he ha
npea wason ta k t
k
rc o

sg t tnaldoc e son M a 5 a cl tt f lf ng by M a 9. ( . 3 a 1.
i n he i
um nt
y nd os he ul undi
y
Tr Ex. 2 t )
J t a f w da l tr ba el one mont afe He c e a Openpe k e e e i o t
us e
ys ae , r y
h tr r ul s nd
a nt r d nt he
201 ARM LSA,Ope
4
npea wa o t ve ge ofa a oma i e ntofdef ul be a e Aci
k s n he r
n ut tc ve
a t c us
tum

d cd d n tt ivetal$1 mil n i Ope pe k. ( .Ex.6 a 4- ;Tr Ex.1 4 . Acim
e ie o o n s 1 5 li n n a Tr
o
t 5 .
7 ) tu
rduce isco t ntt $5milon.( .Ex.1 a 2) Des t t f tt tHerulsrquie
e d t mmime o
li Tr
74 t . pie he ac ha c e e rd

ti fn n ilc v n n e p iil t ç l vit ters (oHec e )a s itd wiha n a-e m
h s ia ca o e a t x lct o i l ae h ik t ruls socae t e rtr
y ae
lqui t is ,'Heruls silde ded t wave t c nan . ( .Ex.8) To ac mmodae
i diy s ue' c e tl ci o i he ove t Tr
.
co
t
Ope a a avoi an a oma i eve ofde aul o t 201 ARM LSA , He c es a e d t
npe k nd
d
ut tc nt
f t n he 4
r ul gr e o

t Fis Ame
he rt ndme a W a e oft 201 ARM LSA (l rtW ave ' Tr Ex.8) TheFis
nt nd vir he 4
l s i r).( .
Fi
.
rt
W ai r i ude a r vied fna i c nan whih r quied Ope ak t r ie a l a t $7
ve ncl d e s i ncal ove t c e r
npe o a s t e s
m ilon i ne e t by M a 1 201 and a a tonal$8m ilo ln ca h pr ee fom t
li n w quiy
y 2, 4,
n ddii
li n t s oc ds r he
i
s l a i s nc ofis e t s c ii a orupfontlc ns r nue.' Ld. t2) l rt nf
a e nd s ua e t quiy e ur tes nd/
r i e e eve
' l a . n eur or

t ec
hes once sons He cul c ncel d a 3s i , r es a le
mont i t r tonl perod t tOpe a ha eane
h n e es- y i ha
npe k d r d

baed o 1 4 peror e. ( .Ex.8 . Hec e de son t modiy t c
s n Q1 f manc Tr
) ruls' cii o
f he ovena o t e
nt n hos
19

t nmswa not$as i t da k t tt c
e
s
t hot n he r ha he ompa mi c eup wih a pr pa ,' butHe c e
ny ght om
t
e y'
r uls
kne 'ha a ne i i wasunde wa wih AT&T t s c e t pa e a t tfna ng.''
w l t
t
gotaton
r y t
o e ur hat ym nt nd ha i nci

( be rTesi
Egg e tmony)
.

I t Sec Ame nt a W averof t 2014 AM RLSA (û c W ave ',
n he ond
ndme nd i
he
lse ond i r'
)
e c e a t s me tme,He c esa Ope
xe ut d t he a i
r ul nd
npea a r d t tHe cul e d l n Openpea
k g ee ha r es oul oa
k

addiinala
to dvanc .i udi t $4. m ilon Se ond Tr he, r ga dls ofwhet rOpe
es ncl ng he 5 li
c
anc e r e s
he
npea
k
r a d c t n fna alm iesones i t 2014 AM RLSA . ( Ex.9) Hec es c l t
e che erai i nci
l t
n he
Tr.
. rul oleced
ad tona f sfo He cul asco i r ton. (d..Mr Kwonsgnedbot W ai r. ( . .
dii l ee r m r es
nsde a i
1) .
i
h ves Tr Exs

8,9) Mr Kwon sgned t Compla Ce tsc t a ompa ng t Aprl201 fna a
. .
i
he
ince ri ae cc nyi he i 4 ncil

sae n s ( . 3 a 2 . Al s b t u n Co la c Ce tk ae ta mi e t He c ls
ttme t. Tr Ex. 6 t ) l u s q e t mp in e ri t s rns t d o r ue
t
t
c riyi t fna a sae e swer sg d by M r Baca ( Tr Ex. a 2;Tr Ex.
e tf ng he i ncil t tm nt
e ine
.
rly. See . 37 t
. 38
a 2)Tr Ex. a 5)Tr Ex.42 a 5;Tr Ex. 5 a 5)
t
. 39 t
.
t
.
0t

f Ame e 6 - The, T& T Non- undabl Pr navme
.
ndm nt
4
Ref
e e
nt
On J y 22,201 Ope a a AT&T e c e Am e e 6 t t 201 M RA wih
ul
4, npe k nd
xe ut d
ndm nt o he 2
t

AT&T. ( .Ex.1 . l rl ntpar,Ame
Tr
8) n eeva
t
ndme 6 a id difrntt msa c tonst
nt pple fee er nd ondii o
t e s t ofToggl lc ns s d t AT& T. (d. Ba ca Tetmon Gi lma Tesi
hr e es
e i e es ol o
1 ; r ly si y; t e n tmony)
t
.
Fis,AT&T woul n be r quie t pa a pe peua lc nsng f e on t 1 ,000 lc ns s
rt
d ot t r d o y ny r t l ie i e s
he 00
it e
t tOpe a g a e t AT&T f i e nalus i Am e e No. 4.( . 1 a 3) Ne ,
ha
npe k r nt d o
or ntr
en
ndm nt
Tr Ex. 8 t . xt

AT&T a ee t pay Ope a 1 milon f 225, nonr f bl AT& T Toggl pe pe ua
gr d o
npe k 58 li or 000
e unda e
e r t l

lce e . (#.a 3) The$8milonwoul bepad i t i tlme s buti noe ntltrt n
i ns s' f t .
'
li
d
i n wo nsal nt, n ve ae ha
J y25,201 (#.. Ope k a r dt çdei rt 225, f l pad- pepeua lc es
ul
4. f )
npea g ee o i lve he 000 uly i up r t l iens
t AT&T pe t f l ng s hedul 0, i J y 201 55,000 i Augus 201 60, i
o
r he olowi c
e:5 000 n ul
4;
n
t 4; 000 n

S p e e 2 4; nd6 0 0i Oco e 2 4. (d a 3 4 . La ty Ame d n 6 d tie te
e tmb r 01 a 0,0 n t b r 01 ' 1 t - ) sl , n me t eald h
9

t te sf ra d t n lp r eua lc ns s' e o t e2 50 0 f rwh c AT&T p e ad. Ld a
il e o d ii a e p t l ie e 'b y nd h 2 ,0 o ih
g
o
rp i l . t
20

4 (mp a i a d d .Th ti lie s fe wil bi e f rçcieu e s'd fne a f l ws
) e h ss d e ) os t lc n t t s l be l d o a tv s r , e d s ol :
l
l
o
Prort J ua y 1,201 AT&T wilpa pe peua lc ns a ma nt nee f e f I t le
i o an r
5,
l y r t l ie e nd i ena
e s or nsal d

Us r oft applca e s
e s he
i bl ohwa e.An çnsale Us r i an End Us rt thas i t ld AT&T
r
l t ld e ' s
e ha
nsale
Togg eon a l s o devi t tha bee r se e on a AT& T Toggl Se ver' ( . 1
l
t ea t ne
ce ha s n egit r d
n
e r . ' Tr Ex. 8

a 4)
t .
He cul 'cli ofGAAP non- ompla e prma iy r vol a ound t m eho og of
r es am
c
i nc i rl e ves r
he t dol y
r po tng t r venue de i fom t AT& T pr pa e . Eac m ont be wee J y a
e ri he e
rved r
he
e ym nt
h
h t n ul nd

Ocobe ,201 Ope a r cogni d a r ve a pori of t $8 milon nonr unda e
t r
4, npe k e
ze s e nue
ton
he
li
ef bl
pa
ymen t tc r s
t ha ore ponde t t numbe oflce est tOpe a dei r d t AT&T a pal
d o he
r i ns ha
npe k lve e o
s 4
ofAm e e 6' lce e dei r s dul . ( ame Tetmo y Baca Te tmo y . W ih
ndm nt s i ns lve y che e F r r si n ; r ly si n )
t
r pe t t t Am e e 6 nonr f bl lc ns s l t AT&T, Ope a decded t
es c o he
ndm nt
e unda e ie e ae o
npe k
i
o

r ognie r ve
ec z e nue i t s manne i pa tba e on c ulai ns i ha wih is i pe nt
n hi
r n r sd
ons t to t d t t nde nde

a tng fr Maye Hofman Mccn (i HM '. ( ca Tesi
udii im,
r f
nn t
M
' Barly tmony;Tr Ex .2 4 2 )
)
s 2 , 27 .
.

W he Ope a a AT&T we e dr fi Ame
n
npe k nd
r a tng
ndmen 6, M r Ba cay s
t
. r l ought unofii l
fc a
g da e fom J r my Ahweeand M i e Pe chi ofM HM a e l asM a 30, 201 f t r
ui nc r
ee
cha l c a
s ary
y
4, or hei

t ht on how Openpe k s d r c ze r ve fom AT&T' $8 m ilon pa nt
houg s
a houl e ogni e nue r
s
li
yme
.

( r a Tetmo Tr Exs 224, )
Bacly si ny; . . 227 .
J r my Ahwee a CPA,wa a die t a s r hol wih M HM who wa r s nsbl
ee
,
s r c or nd ha e der t
s e po i e
f conduci an i pende a tofOpenpea f FY 201 a 201 . (
or
tng
nde
nt udi
k or
2 nd
3 AhweeTesi
tmony)
.
M HM , M r Ahwe , a M r Pe chi we e not co r c e by Ope
.
e nd . c a r
nta t d
npea t deenui how
k o t ne
Ope a s d r c z t r nue fom Am e e 6, bu pr ded unofi i gui nc a
npe k houl e ognie he eve
r
ndm nt
t ovi
fcal da e s
pa toft i o ng r l tons p wih Ope a . (d..
r her ngoi e a i hi t
npe k 1 )

On J
unc 25, 201 M r Ba c a e ie M r Ahwe a M r Pec hi a d a t of
4, . r l y ma l d
.
e nd
. c a
rf
Am e
ndme 6 a a ke f t i t
nt nd s d or he r hought on r venue r c nii bec us he wa e io ma
s
e
e og ton a e
nt d t
t ke

s eweae sr t i i c rcl t rcog z t u r trve pe t she e. ( .Ex.
ur
r tucurng t ore ty o e nie he pfon e nue r he c dul ' Tr
'
227 a 4) M r Ahwe a ke M r Ba ca a s is of q si desg d t ge a bet
t . .
e s d . r ly ere
uetons ine o t
ter
unde sa ng ofAm e e 6 a s ese a ng lnguage t t pe euallc nsng f
rt ndi
ndm nt nd ugg t d ddi a
hat he p t i e i ee

was k rf bl.' (#.a 3) Mr Baca ac
' eunda e' f t . . rly knowldg M r Ahwe s s si a
none ed .
e' uggeton nd

tncude nonrf bl lng ge'i Ame me 6. ( .Ex.228 a 2 . Afe M r Baca
i l d
i
eunda e a ua ' n
nd nt Tr
t ) tr . rly
a ke f fna c
s d or i l omm e sfom M r Ahwteon t dr f ofAm e e 6,M r Ahweel i outhi
nt r
.
he a t
ndm nt
.
ad
s
as
s umptons sae t the t d notnot a ot rit ' i Am e
i , t td ha
s
di
e ny he tm ' n
ndment6,a t tone oft
nd ha
he

çman iems'wasShenon-efndabl pepeua lc nsng fea t rmova ofanyout (uc
i i t '
ç
t
ru
e r t l ie i e nd he e
l
ss h

a a a e a eclus r ltvet t Toggl lce el' (d a 1. M r Ahwe concudedlf
s ny cc ptnc a es eai o he
e i ns s. 1 t ) .
'
e l
i
i
t c nta si a e t a
he o r d tpult s he bove ie s a i e
t m , s nt nded,webei t tt Compa woul be a e
leve ha he
ny
d
bl

t mt t h r v n er e nto cie i. (d4 Mr Baca as viwe 1 98 - 0 ,S fwaeo e t e t e u e og iin rtra' 1 .. . rly lo e d i 56 5 o t r
'
j
Re ueRec ton,'t AI
ven
ognii ' he CPA r venuer ognii sa r a i bl t t Ame e 6
e
ec ton tnda d pplca e o he
ndm nt
Toggl lce e s l i a e f t t e ur Ope
e i ns ae, n n for o ns e
npea s r nue r cog ton wa GAAPk' eve
e nii
s

c int ( .Ex. a 2)
ompla . Tr 235 t .
g. Openpeak Revenue.June 2014

On J 23,201 M r Ba da s ntM r Egg ra t al at hi Ope a s M a
unt
4, . r y e
. bee n m i, tac ng
npe k'
y
201 fna i lsa e
4 i nc a tt ment,a r pr e i t tS a e wr ng up t AT&T dea t swe k
s nd e es ntng ha t r appi
we
he
l hi e

s wes dt hba eahe t t J i s pi upt beourbes mont e r' ( .Ex.37a
o
houl ouc s
r ha. une s ha ng o
t
h ve l' Tr
t
1. M r Baca sgne t at he Compla Ce tfcae f t M a 201 tna il
)
. rly i d he tac d
ince rii t or he y
4 i nca

sae nt c riyi t i c incewiht W ara is ( .Ex.37a 2)
ttme s e tf ng her ompla
t he r nte . Tr
t .
On J y 30,201 M r Ba c a s ta ema lt M r Eggbe r c ng M r Bl sei a
ul
4, . r l y en n
i o .
e , opyi
. ue t n nd

Ms Yo f wadi Openpea sJ a Q2 201 c rii fna il. ( .Ex.38) M r
. ung, or r ng
k' une nd
4 e tfed i ncas Tr
. .
Baca sae t t' ha agea Q2(nd epe ilyJ )t twa ne l doubl ourrve
rly ttd ha s d r t a s cal une ha s ary
we
e
e nue
i Ql. Eve mor e ii wecl e t AT&T dea,i udi $8M ofaddii lf ngi
n
n e xctng,
osd he
l ncl ng
tona undi n

J y. (#.. The a c
ul ' f )
'
c ompa ng Gna il sae n rpr snt t t Ope a ge rtd
nyi
nca ttme t e e e ed ha
npe k neae

$ 3 7,0 i lc ns s lsrv n e i J n 2 4, n $ 0 ,7 f rQ2 2 4. (# a 4 . M r
2,7 3 6 n it e ae e e u n u e 01 a d 4,972 0 o
01 f . t ) .
Bacly sgne t Complanc Ce tfc t atc dt t e lc riyi t tt (2 201 a
r a i d he
i e riiae ta he o he mai e tf ng ha he )
4 nd

J n 2 4fn n il c mpl dwihteW arn is ( . 3 a 2 .
u e 01 ia cas o i t h ra te . Tr Ex. 8 t )
e
A diput ar e bewe AT&T a Ope a a
s e os
t en
nd
npe k bout whe her t Am e e t 6
t
he
ndm n
pr pa ntco r d Toggl lce e AT&T pur has d i J 201 . O n A ugus 1,
e yme
ve e
e i ns s
e e n une 4
t 2014,AT&T

e i d Ch i Hil Pr sd n o Op np a ,wrtn i e d t ej n gijlc ns sstld i t
mal
e rs l, e ie t f e e k iig l e h u e sc ie e ete n he
n
new mode. ( .Ex.300 a
l' Tr
'
t

On Augus 4,201 Hildiputd t tAT&T' purha e of
t
4, l s e ha
s c s

Toggl lce e i J wa co r d by Ame e 6, notng:( lt ougho t l s t pl
e i ns s n une s ve e
ndm nt
i : hr
Al
ut he a t wo us
m on hsoftyi t ge t ne ag ee e el ed, a nota r ofa sngl c
t
r ng o t he w r m nt os 1 m
wa e
i e onve s ton a a
r a i t ny
l ve ora a tme t s tt e
e l t ny i hat e he xpeca i t tt ag e me woul nee t be r toaci , nor
tton ha he r e nt
d d o
er tve
doe t fna ag t nts ppo tr oa tve a i ton. . . . Th p epad l e s alc to gn
s he
l r eme u r dr c i pplcai
e r - i i n e lo ain i
c

Ame nt6)i ce ry stf t i t a r mentr nni fom J yt u Od. (d.a 1 .
ndmc
s lal e orh n he gee
u ng r ul hr
' I t)
'
Si e Ope
nc
npea be i ve t tAm e e 6 di notcove a J 201 Toggl lc ns
k le d ha
ndm nt d
r ny une 4
e ie e

pur ha es on Augus 5,201 M r Fa m e s nta e i t AT&T, c ng M r Ba cly a M r
c s ,
t
4, . r r e n ma l o
opyi
, r a nd .
Sive n,a a tc ng a i c f J lc e f AT&T' S e e a pa nt' ( .
l r nd ta hi n nvoie or une iens s or
s f viw nd yme . ' Tr Ex.
r

302 a 2) On Augus 6,201 AT&T rple sai ç1 lghtoft agre nton J
t .
t
4,
e id, ttng: $n i
he e me
une
s tlme bewe n Openpe k a AT&T 1ha sntt J s tlme rpor t g r Sivenl
ete nt t e
a nd
ve e he unt ete nt e t o M . l r .
The ear no addii llc ns st bepur s d a t stm e. Pl as w ihdr w your i ce and
r e
tona ie e o
cha e t hi i
e e t a
nvoi
a e ha
rs mi wih t mantna fesonl ' t( a 2) Mr Bar ay r ponded lt r t tday,
e ub t t he i e nce e
y, ff t . . cl es
'

sai t ttgj ehasbee noa ee tont J stlme tt twoul c ngeouri c
ttng ha 'ther
n gr men he une ete n ha
d ha
nvoie.
W ewilnotbewihdrwi ouri c a t stme. (d..
l
t a ng
nvoie t hi i ' 1 j
'
Thats m e da A T& T e a l d M r Sive n s a i CAT& T a Openpea ha a e
a
y,
m ie
. l r t tng: C
nd
k ve gr ed
t us t tr ti t lm e of50k lc ns pur has d a pa tofA m endm e 6 t a y t t J
o e he l s ns a l nt
i e es c e s r
nt o ppl o he une
23

EOM de a ...
m nd. The a tona 50k lc ns i r s sourac r lc e poolt 57,7 a
ddii l
ie es nc ea e
quied iens
o
47 nd
co r t 47, lc ns i e f ta ofJ 3 . N o a tonallc ns ne d t be pur has a
ve s he 951 ie es n fec s une 0
ddii
ie es e o
c ed t

t stme. (d a 1. I r s ns M r Ba ca wr e:ç eha notag e t a yanyoft
hi i ' 1 t ) n epo e, . r ly ot $
'
W ve
r ed o ppl
he
lc ns s i Ame m e 6 t t J de a . Tha you f fna l pr di t J r por
ie e n
nd pt o he une m nd
nk
or i ly ovi ng he une e t
bu you c n e c t twewilbes
t
a xpe t ha
l
ubmitnga dipu el te t oro .' ( . 302a 1.
ti
s t et r om r w ' Tr Ex.
t)

The e d e i c t s t t AT&T di notdiput ho ma lce e i pur ha e i
vi enc ndia e ha
d
s e w
ny i ns s t c s d n

J butr t rwhet r i wa r r d t pa f t e lc esi lghtofAme m e 6' $8
une, a he
he t s cquie o y or hos iens n i
nd nt s
m ilon pa e f 225, Toggl lce e . M r Gite a a M r Ba cly t sii d t t
li
ym nt or
000
e i ns s
. tlm n nd . r a e tfe ha
AT&T owe Ope
d
npea mone fom AT&T' lc ns pur has i J 201 , a t ta trt
k
y r
s ie e c es n une 4 nd ha fe he
pa te ag ee t Amendm e 6 on J y 22, AT& T wa ed Openpea t l
ri s r d o
nt
ul
nt
k o ump t e lc ns s i
hos ie e n

wih t lce e pur has d f $8 m ilon s t t AT&T di not ha t pa Ope a
t he i ns s c e or
li o ha
d
ve o y
npe k

a d t n lmo e . ( t e n Te tmo y Baca Tetmo y . W h n Op n a ivoc d
d ii a n y Git ma si n ; r ly si n )
o
l
e
e pe k n ie
AT&T,Ope a r s bl be i d t ti wa due t be pad f t lce e t tAT&T
npe k ea ona y leve ha t s
o
i or he i ns s ha

pur ha e i J
c s d n une,a AT&T di not diput t t t y pur ha e t e lc ns . ( r ly
nd
d
s e ha he
c s d hos ie es Ba ca

Te tmony;Fame Te tmony)
si
r r si
.
M r Eggbee c am e t t i he had kno a t tme t t Ope a s J r ve
.
r l i d ha f
wn t he i ha
npe k' une e nue

number we e i ore t He c eswoul ha exe c s t de i a countcon r ag e me s
s r nc r c , r ul
d ve r ied he post c
tol r e nt

unde t 201 ARM LSA,Ws pt' he $7m ilon i c h t tOpe k had i isa ount, and
r he 4
we 't
li n as ha
npea
n t cc s
k
'
moved t mone i t r mai ng as e st r cove ' as muc a Her uls c d be
o
tze he e ni
st o e
r'
h s
c e oul yond t
he

c s ( be rTesi
a h. Egg e tmony) Howe r 1a notpe s de t tOpe ak a td i ba f t or
.
ve, m
rua d ha
npe ce n d aih
vi a e GAAP i isr ognii ofr ve fo J 201 lc ns s e . The e de e s w s
olt d
n t ec ton e nue r m une 4 i e e als
vi nc ho

t t AT&T di notdipu e how m a lce e i pur ha ed i J 201 a t t Ope a
ha
d
s t
ny i ns s t c s n une
4 nd ha
npe k
r c ni e r ve fo t s l oft e lc ns i t s m e wa i had i pr vi mont .
e og z d e nue r m he ae hos ie es n he a
y t
n e ous
hs

24

M r Bar l r as bl bele t tAm e
. cay e ona y ived ha
ndment6 di no i l lce e pur ha ed i J
d t ncude i ns s c s n une
201
4.
h. One
npeak R e nue Jul - Se e be 2014
ve . v
pt m r

On Augus 28 201 M r Ba cly emaie Ope a s fna i l f r J y 201 t
t , 4, . r a
ld
npe k' i nc a s o ul
4 o
He c e ,al wih t Compla t Ce tfcae sg d by M r Ba c a . ( .Ex.99 a 6) Mr
r ul s ong t he
i nc
rii t ine
. r l y Tr
t . .

Baca wr t ,Swl ha a oh rg t tmo t wih $ M ofrv n t twa i ln wi o r
r ly oe t e d n tt r a n h t 2
g
e e ue ha s n ie t u
h
f e s. t#.at1.Thefna alsae nt r esnt t tOpenpea ha eane $1983,
orcat' f
'
)
i nci ttme s epr e ed ha
k d r d , 369

i rv n ei J l (d a 3 . M r Baca as wr t t t( g s i s a i gu t b o rbet
n e e u n uy. 1 . t ) . r ly lo oe ha s u t s h p n p o e u s
Au
mo he rbasd o s oft deasweknow ha cos dale ' ( .Ex. .
nt ve e n ome he l
ve l e rady. Tr 99)
'
M r Ba ca s ntan e a lt M r Eggbe ,c pyi M r Bl t i a M s Young,o
. r ly e
m i o .
er o ng . uesen nd .
n

Se e r 1 201 i whi he sa e $W eha an AW ESOM E m on h wih $3. ofr ve
pt mbe 8, 4, n ch t t d: k
d
t t 5M
e nue
a $80 ofEBI
nd 0K
TDA !Bot AT&T a Bl c r y ha bot be n e utng r ly wel....
h
nd a kBe r ve h e xee i eal
l '
'

( .Ex.42 a 1. The e i atche Openpea sAugus 201 fna i sand a Co inc
Tr
t)
mal ta d
k'
t 4 i ncal
mpla e
Cetfc t sg d by M r Ba cay (d a 5)t trpr e ed t Heruls t Ope ak ha
riiae ine
. r l 1 t ha e es nt o c e hat npe
d
e r d $3, 205 i r nuei Aug t(d a 2) M r Eggbe rtsiid t tMr Baca a
ane 460, n eve n us I t . .
e etfe ha . rly nd
M r Gite a r pr e ed t hi t tt Augus 201 r ve fgur wast r ul oflc ns
. tlm n e es nt o m ha he
t 4 e nue i e
he es t i e e

s e. (
als Eggbe rTetmony) Thi rpr e ai wa a urt ast rve rcognied i
e si
. s e esntton s cc ae, he e nue e
z n
Augus 201 wa derved,i par,fom Ope a s de i r of Toggl lc es t AT&T
t
4 s i
n
t r
npe k' lve y
e iens o
pur ua t Am e e 6, a Ope k' c rs
s nt o
ndm nt
nd
npea s ore pondi rvenue r ognii
ng e
ec ton. ( r a
Bacly

Tetmony;Fa me Tesi ny) Ope k' rve sae nt fom J y,Se embe ,a
si
r r tmo .
npea s e nue ttme s r ul pt r nd
Ocoberwe e as t r s toflc ns s l sbe a et y we ede i d,i pa t fom r c zng
t
r lo he e ul i e e a e c us he
r rve n r, r e ogni i

r venue fom AT&T' $8 milon pa
e
r
s
li
ymen c r po ng t t de i y of Toggl lc ns s
t ores ndi o he lver
e ie e .

(d..
1)

i Dic s onsAboutSe ond Tr heLoan
. s us i
c
anc
i O c obe 201 M ee i
.
t r 4
tng

Be nni i l t Se e r 201 M r Gite a a M r Ba cly r a he o t
gi ng n ae pt mbe
4, . tlm n nd
.
r a e c d ut o

He c es abou t pot nta t dr w down o t $ 5 milon Sec Tr nc i t 201
r ul
t he e il o a
n he 4. li
ond a he n he 4

ARM LSA. ( e Tr Ex.43 . On Se embe 30,201 Mr.Gite n wx e a e lt Mr
Se .
)
pt r
4,
tlma ot n mai o .
He i z s a i SW e' r ly bee c us ng i l t l , r ve
nr que t tng: t ve ea l
n r hi t a e y e nue ha be n g o ng t oug t
s e r wi hr h he

r a we'lha ove $15M EBI
oof nd l ve r .
TDA i Se e r' (#.. l t e i,M r Gite n
n ptmbe. f ) n he mal . tlma
'
i r d whehe M r He i zwasa l et me ti e l Oc obe . (#,.
nquie
t r , nrque
vaiabl o e n ary t r f )

On Oc obt 9,201 M r Gite a a M r Ba c a m e wih M r He i z i Pal
t r
4, . tlm n nd . r l y t t
. nrque n o
Alo,Caio ni t dic st pos i lt ofd a ng down on t Se nd Tr nc . ( . .
t
lf r a o s us he sbiiy
r wi
he co
a he Tr Exs 45,

46.Gite n Tesi ,He i z Te tmony) Durng t me tng,M r Gite n,Mr
, tlma
tmony' nrque si
.
i he ei
. tlma
.
He i z a M r Ba cay dic s d Ope ak' fna a pe f m a
nrque nd . r l
s us e
npe s i ncil ror nce a is r a i hi
nd t eltons p

wihAT&T.( .Ex. He i zTesi
t
Tr 46; nrque tmony)
.
I a e al t s ni me be s of He c es i ved wih Ope ak,M r He i z
n n m i o e or m r
r ul nvol
t
npe
. nrque

r ount t me tng. ( .Ex.46) M r He que wr e:d l r ognii t tDa i t
ec ed he ei Tr
. . mi z ot t y ec zng ha n s he
Ful
vonsa t s c ma but as s eng t t he i a m a wih pa so a r lgi t wha he i
t n als n,
lo e i ha
s
n t s i n nd e i on o
t
s
a tm p i t a c pls t ngs a e m ac i ly i ove a t company.' (#.a
te tng o c om ih, hi
r
t ral mpr d t he
' / t

W ih
t

r a d t AT&T,M r Hc i z wr et tM r Gitema r e e ed t tAT&T wa i elng
eg r o
. nrque ot ha
. tl n epr s nt ha
s s li
s

o e 2 00 0 ( g l lc ns s pe mo t' b tta ' n ge p e sd g r Gite n a t
v r 0 ,0 To ge ie e ) r nh' u h t f
whe h l r se M . tlma l s o
h w g n lo t s lc ns sh veb e t me o t en mb rwa d a tc l lwe . (d )
o ma y f ho e ie e a e n u d n h u e s rmaia l o r' 1 ..
y
'
He i z contnued,s ai t tM r Gite a r e e ed t tOpe ak ç e e l is d a
nrque
i
t tng ha
. tlm n epr s nt ha
npe t c nty s ue
r
s f i t l t m a t f t e ea ir t e bl ' whi h M r Giteman beleve woul
el nsal o
ke he eaur
se o na e'
c
.
tl
i d
d

S a tcal i e s t numbe ofus r. (#.. Hec eswa a r oft S a tc ly'
t mai ly ncra e he
dr
r
es' / ) rul
'
s wa e he ' maial '
dr
l a i t o of A T& T Toggl lce e by Oct r 9, a t l t t M r H e i ue a s s i
ow d va i ns
e i ns s
obe
t he a es .
. nr q z l o a d
26

t a h o s r t ttne a piain i p a d r r n a dmo ei ra ty igi)win s td
h t e b e v d h w p l to s s n umi g n r mpo tnl sc t e se )
c
u
wha a ne us r woul e re e on e blng t Ope
t
w e
d xpe i nc
na i he
npea s uto whih wa a a i .''
k ol i n
c
s m zng

(d)
1 .
M r He i
. nrquez alo wr t t tM r Gite a sa e he a ii t d Ope a wo d be
s
o e ha
. tlm n t t d
ntcpa e
npe k ul
' ec i ng e es i ofi e es t bea uie ' a t ti a va e ofs h a tviy, O pe a
' evi xpr sons nt r t o
r
cq r d,' nd ha n d nc
ue c i t
npe k

wa e t boltrislqùi t $ $3- m ilon' a woul pr f rt do t ti t f o dde
ntd o se t i diy %y $5 li ' nd
d e e o ha n he onm f l bt

fna i ' (d.a 2;He iuezTetmo . M r Ht i zc uded t tçhtc
i ncng. 1 t
'
nrq
si ny) . nrque oncl
ha s ompa has
t
ny

d mo ta yma ea va c st t gijwa n te p cigt s e' n t a l s o l f lo u
e nsrbl d d n e ha i sc s o x e tn o e 'a d h t ç h u d olw p
we
a t n sa p asgijt b p o r sig q iewel whih wo l a1n e t b c n ime a d
nd hig p e r sc o e r g e sn ut l, c ud l e d o e o fr d n
e d n cs p rigt s camsv ld td. (#..
vie c u po t he e li ai ae ' J )
n
'
i. O c obe 1 E m a l Toggl Li ns s and A c i i
i
t r 4
i:
e ce e
tvatons

On Odobe 1 201 M r Ba cly s ntM r Egg rand M s Young a e a lco ani
r 4, 4, . r a e
. bee
.
n m i nt i ng,
a ong o hert ngs Ope
m
t hi , npea sfna i sa e e sf t m o h ofSept
k' i ncal t t m nt or he nt
embe 201 . ( .
r 4 Tr Ex.

47) l t emai,M r Barl saed:i Sept rRe nuewas$4. and EBI
. n he
l . cay tt s
our embe ve
4M
TDA wa
s
$16M ba e on c i d sr ngpef ma efom AT&T a Bl kBe r ...Ove al(3wa
.
s d ontnue to
ror nc r
nd ac ry.
rl ) s
a f nt si qua tr f Ope Pe k wih 1
a a tc re or
n a t 65K lc ns s s d t AT&T and 155 lc ns s d t
i e e ol o
K i e es ol o

Blc ry.'Tr Ex. a 1.Thea c
a kBe r '( . 47 t )
c ompa ngfna a saeme f Ope krpr s e
nyi i ncil tt nt or npea e eentd
t Hec e t tOpe kge r td $4, 1232i rve f Se e
o ruls ha
npea ne ae 41 , n e nue or ptmber201 (d a 3) The
4. 1 t .
e i alo ma c ti rpr enai a t G
mal s de eran e es ttons s o t
AT&T Q3 Saes'a at he a rpor fom
l ' nd tac d e t r
AT&T t tlsed t t a numbe oflc ns s pr vii d t e h AT& T e ep rs c t r
ha it he ot l
r ie e o sone o ac
nt ie usome ,

a t t alnumbe o pr sonedlc ns st twee$i us ' 1 a 7- 0) Mr Baca wrt
nd hc ot
r f ovii
ie e ha r 1n e. d. t 1 . . r ly oe
'(
t tt ate ntts
ha he ta hme dhowsAT&T s l of415 lc esi Q3,a mor t nt 1 lc nss
aes
K iens n fr e ha he 65K ie e

Ope Pe k (ilr c g ie a r v n e Th ge ii )25 K l e s s( 5-1 5= 2 0 wilb
n a sc e o nz d s e e u . e r manng 0 i n e 41 6 5 ) l e
c
r c g z da te a ea tv td i :#' (d a 1 (mp a i a d d .
e o nie s h y r ciae n . 1 . t ) e h ss d e )
'

Consse wih M r Ba c a sr pr s n a i i t e al t at hedAT&T Q3 Sals
it nt t . r l y' e e e t tons n he m i, he t
ac
e
Re r lse 41 , lc ns spr soned b AT&T t ise eprs c t
po t it d 3 252 i e e ovii
y
o t nt r ie usomer , wihj t3 5o
s t us 3 f
t e lc ns s i n us .' (d a 7- 0) M r Baca s e la atc nt c i ne t
hos i e e i
i e' 1 t 1 .
. rly' mai nd ta hme s onfl d o
n

Hec e t t( )t rvenuenumbesMr Baca hadrpore i J yt ough Se embe wer
ruls ha 1 he e
r . rly
e td n ul hr
pt r e
notbas d on a tva i oft lc ns t tOpenpea s d t AT&T unde Am e e 6, a
e
c i tons he i e es ha
k ol o
r
ndm nt nd

( )Op n a wo l r c g ierv n efo t es l o a y a di o a lc n e t AT&T wh n
2 e pe k ud e o nz e e u rm h ae f n d t n l ie s s o
i
e
t elc ns swe ea i t . (d4
hos i e e r ctvaed 1 .

M r Ba ca sOcobe 1 e i as maderpr s nttonsast t S T&T (4 Pi lne'
. r ly' t r 4 mal lo
e e e ai
o he W
) pei '
a at c d a r por wih m o e deai. ( . 4 ) Mr Ba ca r p e e e t t(
nd ta he
e t t
r t l Tr Ex. 7 . . rly e rs ntd ha t
AT&T h s
a

ove 2M lc nsst 225difrnte eprs a count (e c r on lf sdeoftrtpag ' ( .
r ie e o
fee ntr ie c
s se ha t e t i
ss el ' Tr
.

Ex.47a 1. Theatc rpor lse aS a ttl'of233e eprs a count a AT&T f
t)
ta hed e t itd t nd oa'
gr
ntr ie c
st
or
whi Toggl lc ns s had be n a ove t ough t Gol n Tike pr a , am ountng t a
ch
e ie e
e ppr d hr
he de c t ogr m
i o
pi lne of 2, 7 Toggl lc e . (d) The e AT&T d ume s rpr e ed t M r
pei
087,63
e iens s 1 .
s
oc nt e esnt o .
Ba cly a He c e t tAT&T ha a sr sae pi lne f Toggl , e n t
r a nd r ul s ha
d tong ls pe i or
e ve hough f w e
e nd

us sha a tva e Toggl a t tpoi .
er d c i t d
e t ha nt
ii Oc obe 1 AT& T Se tem e Re June2014 Li ns Diput
i. t r 5
tl nt :
ce e s e
On Ocober 1 201 Openpea a AT&T e e ed i o a ç tl me Agr e e a
t
5, 4,
k nd
ntr nt s te nt e m nt nd
se

M uu l la e'C
t a Ree s '(û
AT&T S tlme f'ta sae i pat
ete n ) h t ttd n r:
Fo p r o e o caii ai n g ig fr r ( o tl n 201 ) P y n f r
r u p s s f lrtc to on o wad p s-u e 4 : a me t o
pe e ua lce e f s be
m t l i ns s ee
yond 225,00 ne ne a tve us r wil be pai
0
w t ci
es l
d
a c d ng t Am e e 6.No pe pe ua lc ns f es wilbe due fom AT&T
c or i o
ndm nt
r t l ie e e
l
r
durng t perod J y 201 t De e r 201 unl s AT& T pr sons mor
i he i ul
4 o c mbe
4 es
ovi i
e
t t 225, ne ne lc e t Actve U s r .
han he
000 t w i ens s o i
es

( .Ex.1 a 12) Thi pr son mea t tbeor AT&T pad Ope a pe t llc ns
Tr
9 t - . s ovii
nt ha f e
i
npe k meua ie e
f esf rToggl lc ns s s d i e s oft 225,000 pr pa d lce esi Ame m e 6,a l s
e o
e i e e ol n xce s he
e i i ns n
nd nt t ea t
225, end us r w oul ha t a tva e t i Toggl lc ns s. ( r ly Tesi y)
000
es
d ve o c i t he r
e i e e Ba ca
tmon .
28

The AT&T Se tt t as r s vt t dipu e bet e AT&T a Opt a a
tlm nt lo e ol d he s t
wt n
nd
npe k bout
whehe t Togge lc ns AT& T p cha e i J 201 we e i l d i Amendme 6, and
t r he
l i e es
ur s d n une 4 r ncude n
nt
whehe AT&T wasr quie t s par t y pa Ope ak f t e lce e . ( . 1 a 1 Tr
t r
e r d o e ael y
npe or hos i ns s Tr Ex. 9 t ; .

Ex.11 ) Ast sgnii a l l ge compa wih geae lvea AT&T ha t powe t
7.
he i tc nty ar r
ny t r tr e rge,
d he
ro
di t isr lto hi wih Ope k.( tlma Tesi
dat t tains p t
npea Gite n tmony;Ba ca Tetmony) TheAT&T
r ly si
.
Se te nt a r t e r ule i Ope
tl me g e m nt es t d n
npta notbe ng a e t r ogni e r venue i J 201
k
i bl o ec z e
n une
4
f o t lce est tAT&T boughtd i t tm ont . (#..
r m he i ns ha
urng ha
h f)

i. Oco r1 Ema l Ope a Fi n ilS a e nt a d Pr j ci n
v
t be 7
i: npe k na ca t t me s n o e to s
Two dayslt r on Oc obe 1 201 M r Ba cly e al d M r Eggbe a M s Y oung,
ae,
t r 7, 4, . r a m ie
.
er nd .
at c ng Ope
ta hi
npea s acualfna i lsa e nt fom J nua y t ough Se e r201 . ( .
k' t
nc a t t me s r
a r hr
pt mbe
4 Tr

Ex. a 4) l tadoflsi t s me$ 377, i rven f J 201 t tOpenpe khad
48 t . nse
itng he a 2, 306 n e ue or une 4 ha
a

rp re o J y 3 ,2 4 ( .Ex 8a 3 ,J n 2 4 rv n e wa l td a j t$1 25 4,al
e o td n ul 0 01 Tr .3 t ) u t 01 e e u s i e s us 2 ,6 l
s
c ng fo lc ns s
omi rm ie e uppor a mai e nc f e ( .Ex.48 a 4,6) Mr Barl t tfe
t nd ntna e e s. Tr
t . . cay esiid
t tOpe a r t td is J 201 r ve as a r s tof t AT& T Seteme e t r on
ha
npe k esae t une
4 e nue
e ul
he
tl nt n e ed

Ocobe 1 201 ( r a Tesi ny) Mr Eggbe rtsiid t thea Mr Bacly s ke
t r 5, 4. Bacly tmo . .
e etfe ha
nd . r a po
a tOpt a sJ 201 rve r ttme ,whihaf ce Ope k' 92 201 rve ,
bou
npe k' une 4 e nue esae nt c fe td npea s
4 e nue

aoundt tmet tM r Baca s ntMr Egg rt a Q3201 fna l on Odobe 1
r
he i ha . r ly e
. bee he dual
4 i ndas
r 7,
a t t he was s tsi d wih M r Ba ca s explna i f t r t t nt
nd ha
a ife
t
. r ly'
a ton or he esaeme .

(
Eggbe
er

Tesi
tmony;Bacl Tesi
r ay tmony;Tr Ex.11 a 1 .Hec e wa a r oft rsae J 201
.
7 t ) ruls s wa e he e ttd une 4
r ve n
e nue umbe sby Oc obe 1 be o eHe c e de i d t m a t Se
r
t r 7, f r r ul s c de o ke he cond Tr nc l n. ( .
a he oa Tr

Ex. a 4,6)
48 t .
The fna i l saeme s c ane deaie fna al i or a i a
i nc a t t nt ont i d t ld i nci nf m ton bout t t of
he ype
r ve ge r t d fom ATAT,i l ng whehe t r ve wa de i d fo NRE, pe et l
e nue ne a e r
nc udi
t r he e nue s rve r m
m ua
lce e f es o s ppo tand m a nt na e f s a d g v p oe td tn n il a d l e s s lsf r
i ns e , r u r
i e nc ee , n a e rj ce i a cas n i n e ae o
c
29

Oco e 2 4 tr u h De e e 2 5.( . 48a 4 .Thes r a s e r p t e tdt a: 1
tb r 01 h o g c mb r 01 Tr Ex. t )
p e d he t e rs n e h t ( )
c ul tve A T& T lc ns s l s f om J y t ough O c obe 201 die ty ta k t lc e
um a i
ie e ae r
ul hr
t r
4 r c l r c he iens

dei r s hed e i Ame nt6 a t rve rc ni d upon dei r t r ;a (
lvey c ul n
ndme
nd he e nue e og ze
lvey heeof nd 2)

Op n e kprj ce s lso 1 00 0To gelc nssi No e e 2 4, o r s o digt $ 8
e p a oe td ae f 0 ,0 g l ie e n v mb r 01 c re p n n o 2.
milon i r ve
li n e nue,a s esof 1 000 Toggl lc ns s i De embe 201 , cor espondi t
nd al
50,
e ie e n c
r 4
r
ng o

$5. milon i rve
5 li n e nue.( .Ex. a 4)
Tr 48 t .
v. O c obe 21Em a l çcr s ve ' f om Am e
t r
i: i os o r' r
ndm e 6 Pr pa ent
nt
e ym
On Ocobe 21 201 M r Egg ra ke M r Ba c a i a e ltwhen t cr s r
t r , 4, . bee s d , r l y n n mai '
he os ove

o t e AT&T p e y g s p oe td t h p e . ( .Ex.4 a 1 . M r Ba ca rs nd d
nh
rpa wa ) rjce o a p n' Tr
'
9t)
. r ly epo e
i en o t i mo t . (d4 Mr Eg b e f lo du , s i Mr Baca wh t rth l e s
i l d f hs n h' 1 .. . g e r olwe p a kng . r ly ehe s e i n e
g
'
t c
c u t i t ef rc s g a )b e u dae t rte a t a lc n e t r u h S p e r2 4, a d
o n s n h o e a t h d e n p td o el d cu l ie s s h o g e tmbe 01 ' n
'
Mr Barl rs
. cay e ponde iYes' Ld.BaclyTe tmony'Egg rTesi
d,$ . l ; r a si , bee tmony)
'
.
M r Egg e a s d t tt sic os ove ' m e ntt tOpe a ha t ol t ough' t
. be r s ume ha hi tr s r' a ha
npe k d ' d hr
s
' he

2 50 0 l e s s t a wee te s b e t o t e $ mil n p e a s l t AT&T. ( g e r
2 ,0 i n e h t r h u j c f h 8 li rp y ae o
c
o
Eg b e
Te tmony) M r Eggbee beleve t tby t endofOcobe ,Ope ak woul ha delvee
si
. .
r i d ha
he
t r
npe
d ve i rd
aloft 225, Tog e lc ns st AT&T a wo d ha r cog z aloft $8 m ilon a
l he
000 gl i e e o
nd ul ve e nied l he
li s
r ve
e nue,a t tOpe a w asnow m ovi t a çpa a you g r a i hi 'w ih A T& T, ih
nd ha
npe k
ng o s y s
o el tons p' t
wt

Ope akç neai a to lope ai ca hfow.'(#..
npe i rtng ddiina r tng s l ' . )
ge
J
M r Eggbe r t tfed t t M r Ba cly t d hi t t t 1 a i i is was
.
e esii ha
. r a ol m ha he ow ctvaton s ue

P i rl tc n c li n t r,a d t tOp n e k wa wo kig o a fx ta wo l e be e d
rmaiy e h ia n au e n ha e p a s r n n i à t u d na l n
us r t s fi tl t s t r (#.. Thi t tmo wa c nsse wih M r Hemi z'
es o el-nsal he ofwae. f )
s esi ny s o itnt t .
que s
co e ane not ofhi meei wih M r Gite n and Mr Bacly. ( .Ex.46) As
ntmpor ous es
s tng t . tlma
. r a Tr
.
e l as J
ary
anua y 201 M r Ba cly r pr s nt t He c es t t Ope
r
4, . r a e e e ed o r ul ha
npea wa wor ng o
k s
ki n

ma ngt aci tonpr e se irfre usr . ( .Ex.27 a 22) Hec e di notpr de
ki he tvai oc s ase o nd e s Tr
t . ruls d
ovi
30

e de et s
vi ne o how t tOpe
ha
npea di no r l a ea t efi t l'orwa notw o ki o at c ca
k d t e e s t l nsal'
s
s
r ng n e hni l
s uton t e bl e ir a tva i
ol i o na e ase c i ton. The r pr s nttons of M r Ba cl and M r Gite a
e e e ai
.
r ay
. tlm n

r r ng t c c s utons t t l Toggl lce e a tva i di notc ng t f c t t
ega di e hnial ol i o he ow
e i ns c i tons d
ha e he a t ha
He c e wa awa e t tOpe a di notc r Toggl lc ns a tva i , t tan e us r
r ul s s
r ha
npe k d
ontol
e i e e c i ton ha
nd e
ha t de i t aci et lc ns , a t ta tva i by e us r wasl .
d o cde o tvat he ie e nd ha c i ton
nd e s
ow

j Oco e 2 1 Ne De l q e t e
. t b r 0 4 w a Re u s M mo
On Ocobe 23,201 M s Young a M r Eggbe rpubls d a he New De M e
t r
4, .
nd .
e
ihe not r
al mo

f r h $ 5milo S c n Tr n h (t t2 1 NDRM '. ( . 1 0 . Th Oc 2 4NDRM
o t e 4. li n e o d a c e ' 0 4
oc
' Tr Ex. 8 ) e t 01
)
outi t t r s of t Se ond Tr nc a ma s ve a obs r a i a t t sa e of
lned he e m
he c
a he nd de e r l e v tons s o he t t

Ope k. ( .Ex.1 .Aswih all nsa r tucurngs Herul r i ont Oc 201
npea Tr
80)
t l oa nd esr t i , c es eled he t 4
N DRM i de i ng t gi t Se
n c di o ve he cond Tr nc t Ope ak. (
a he o
npe
Eggbe Tetmony;Bl sei
er si
uet n

Te tmony) A ciialfdori Herul 'de son t l n Openpea t Se nd Trnc wa
si
. rtc a
n c es cii o oa
k he co
a he s
t t Openpe k wa lkel t be ac r d wihi t ne sx m ont , t r
ha
a
s i y o
quie
t n he xt i
hs he eby r suli i
e tng n

Hec e beng r i i f lon isl n. ( eTr Ex.1 . Att tmet Od 201 NDRM
ruls i epad n ul t oa Se .
80)
he i he
4
wa pr pa e a c it wih M r Gite a a M r Ba cly' r pr s nttons t M r
s e r d, nd onssent t
. tlm n nd . r a s e e e a i
o .
He i
nrqueza t Odobe 9 meei Ope a wasr evi e e so ofi e e ta
t he
r
tng, npe k
ec i ng xpr s i ns nt r s boutbei
ng

a quie ( .Ex.46;He i zTesi
c r d. Tr
nrque tmony)
l t tBa kg ound and Siuai Ove vi 's di , t Od 201 NDRM de a l t
n he i c r
t ton
r ew' e on he
4
t is he

r lvan f c s r ga di Openpea s r que tf t Se ond Tr he. ( . l a 12) The
ee t a t e r ng
k' e s or he c
anc
Tr Ex. 80 t - .

Me noe t rmp i rve fom Q1tr h Q3 201 a t tsgnis ntba kl of
mo td he a n e nue r
houg
4 nd he ti tca
c og
4Q1 s ls'whih S ul naed i t r c i oft i
4 ae ,' c t mi t n he e ept wo nboundLOI.' (d.a 1 . An in und
c
s' 1 t )
i bo
i
LOl'w a an uns i ie Le t ofl e t a quie Ope a . (
' s
olc t d ter nt nt o c r
npe k Eggbee Tesi ny) The LO1
r tmo .
t t w a ic e bl e ugh t pur ue 'c m e fom Sync onos , a $1. bilon m a ke c p publc
ha s l r di e no
o s ' a
r
hr
s
8 li
r ta
i

c nyt tval d Openpea a $300milon. ( .Ex.1 a 1. TheM e noe t tt
ompa ha ue
k t
li Tr
80 t )
mo td ha he

Ope a Boar ofDie t st ppr ved movi f war wih fna ne i tons' o be a quie
npe k
d
r c or t o
a
ng or d t i l gota i 't
c rd

a d t a Hec ls rv e d S n h o o s LOI t a q r Op n a a d û o fr e j i
n h t r ue e iwe y c r n s '
o c uie e pe k n l nimld t
c
s
a he iiy.' (d4 Hec e wasawa e t tOpe k' 3Q 201 r nue twer cr t
ut ntct ' 1 . ruls
r ha
npea s
4 eve s s e edied
a ns t AT&T pr pa 'a t tOpe ak ha l c l t c t
gai t he
e y' nd ha
npe
d t oleced usomerpa
not
ymen s i s r l
t n eve a

mont .' (d4 Thi rprs nt i unde sor s t fc t tHecul wa a r t t t
hs' 1 . s e e e aton
rc e he a t ha r es s wae ha he
rve Ope k r ognie i Q3 201 fom J y t ough Se e r wasderve fom
e nue npea ec z d n
4, r ul hr
ptmbe,
id r
AT&T' $8 milon pr pay e pur ua t Am e e 6. l lg ofM r Ba cly' Ocobe 1
s
li e m nt s nt o
ndm nt n i ht
.
ra s t r 4
e al whi i ude t l numbe of ac i tons of Toggl lce e a
m i
ch ncl d he ow
r
tvai
e i ns s mong AT& T'
s

e eprs cusomes Hecul kne t tOpe k' rc ton oft Q3 201 r nuewa
ntr ie t r, r es w ha
npea s e ognii
he
4 eve
s

n t te t To ge a tv to s ( e Tr Ex.4 a 7 1 ) The t c g o n a d Siu to
o id o g l ci ai n . S e .
7 t -0.
û k r u d n t ain
Ba
Ove v e 's c i c udes
r i w' e ton oncl :

TheCompa wilne dami mum of$3. miloni ne c pialt r c 1 5,
ny l e
ni
0 li n w a t o ea h Q1
at whih tme c lci fom 4Q1 wil sat t hi t baa e s t
c i ole tons r
4 l tr o t he lnc hee.
M a eme wa s t s i f t balnc s e i an i pa i ofneg itng a
nag nt nt o oldiy he a e he t n tci ton
ota i

de tve ag e m e . The ha a ked us t c i r fmdi $4. milon t
ûnii
r e nt
y ve s
o onsde t ng 5 li o
brdge t Com pa t ough t s es pr es a i o c s tow postve
i
he
ny hr
he al
oc s nd nt a h l
ii

opeai i 1 5. The De Te m viwst sass r tr ca tl and i i
rtons n Q1
al a e hi ho t em pia,
ts
prce a or ngl
i d cc di y.

( . 1 a 1.
Tr Ex. 80 t )
The t e pot il r pa e s e i lse i t Reum Ana yss s ton a 1
hr e
enta e ym nt c naros it d n he t
l i ec i 1
e soned Ope a be ng a quie or s e ot rç te t' ( . 18 a 3) Hec e
nvii
npe k i c r d
om
he ç
exi ven . ' Tr Ex. 0 t . ruls
bei ve t tt ' tlkey s ena i 'wa 'ha t Compa wile e a de i tve a t m e
le d ha he l
mos i l c ro' s % t he
t
ny l nt r fnii gr t nt

t b a q ie wihn t n x sx mo t s''g ie te a tvt a o n t ei o n LO1,a d
o e c ur d t i he e t i nh ' k lv n h ci iy r u d h nc mig s n
g
t bo r sr c ptve s t t o ni tr . (d..No r i Hec e 'rt n s nai i
he a d' e e i ne s o he pe ng ems' 1 4 whe e n ruls eur ce ros s
'

te ea y me to o Op n a shit rc lo p oe d rv n a af do i He c lsben
h r n n in f e pe k' so ia r rj de e e ue s a r n r ue ig
r pai
e d.

32

I t i i s Updae' s c i He c e r pr en e t ti unde sood Openpe k was
n he ç ne s
Bus
t ' e ton, r ul s e es t d ha t
rt
a
cl et l os ove 'fom Ame e 6' pr pa e a twils r ve tt pa - as you- at
os o i s r' r
cr
ndm nt s e ym nt nd s l oon e r o y - go

t eo i n lp ie' (d a 4 .Th M e we to t s yt a ' T&T h ss l t o h 41 ,000
h rgia rc . 1 L t ) e mo n n o a h t W
'
a o d hrug 3

lc n e o whc u tl 20 0h v b e rc g z d Th r mann -2 0,0 s l lc n e wil
ie s s f ihj s 8 ,0 a e e n e o nie . e e iig 3 0 0 o d ie s s l
be rcog ze i 4Q1 wih cr s ron t prpa nta e ntocc rng a t e of
e ni d n
4 t osove
he e yme greme ' uri t he nd
Oc obe 201 ...Furhe , AT&T ha a4Q1 p p l eo mo eta 20 0,0 lc n e . (d a
t r 4.
t r
s
4 i ei f r h n ,0 0 0 ie s s' 1 t
n
'

4 . Hec ls c ncu e te s cin b n t t a éas h s ha p n d wih p s b d es''
)
ru e o ld d h e to y oi h t i j a p e e t a t u g t,
ng
l
Ope a ha no me t r lva r venuet r st twoul ha al d i t dr w down on
npe k d t t he ee nt e
a get ha
d ve lowe t o a

t $4. milon Sec Trnche.( .Ex.1 at4) Des t t s He c e wr et tt De l
he 5 li
ond a
Tr
80
. pie hi, r uls ot ha he a

Te m a d Mr Ble ti i eiv e )teCo a y (a )t r e ac r e'a dt a p o r s wi
a n . u sen t l ld h mp n h d u n d o n r' n h t r g e s t
b e
h
is r s e pa t r hi ç ong wih t Ent m rs Vaue daa poi t of t LOI l a
t e al rne s ps '
al
t he
e ie l
t
n
he
e ves us
c orabl t ta i r as d e
omf t e ha n nc e e xpos ewoul bewe lpr t c e .' (d..
ur
d
l oe td ' 1 )
I t çFa or i Sup r' s c i Her es di not r l on a s i r ve
n he i ct s n
po t' e ton, cul
d
ey
ny pecsc e nue

p oe to s fo Op np a ' rlto s i wih Hec e , b t i se d i f c e o t e
rj cin r m e e k s eain hp t ruls u n ta s o usd n h
'e eprs vaue'oft c ny. (d.a 4- . Fis,Hec e noedt tAT&T' $8milon
'ntr ie l ' he ompa
1 t 5) rt ruls t ha
s
li
pr pay e ç ort rghtt gi t s t r a y t is e us r ' %co tt e a sg fca
e m nt k he i o ve he ofwa e wa o t nd e s' i nsiut s i nii nt
f

d mo tai n o ( e pe k'l u d ryn v l . Ld a 4 . Hec ls as wr t ta
e nsrto f Op n a s n el ig aue' l . t )
'
r ue lo o e h t
ltrcin fo AT&T ...h sa rv d a d e a n to o t b c o s g e t t ti wi
' la to r m
g
a rie n x miain f he a klg u g ss ha t l
l
c i i o201 ' ( . 1 a 4) Ho ve,at
ontnue nt 5. Tr Ex. 80 t . we r lhoughHec e bei dt r wasta ton
'
ruls leve hee
rci
wih AT&T lc ns s es He c e kne a
t
ie e al , r ul s w bout t 1 lvel of Toggl lce e aci to .
he ow e s
e i ns tvai ns
H e c es not d t l w a i tons a a t s 'i t ne s c i oft 201 Oc N D RM whe
r ul
e he o d va i
s s k' n he xt e ton he
Ri
4 t
n

iwr et tûg hiet e iue s lsfom AT&T t lac
t ot ha twl l he ontn d ae r
el ompeli sor veyfw e us r
lng t y, r e nd es
ha a tva e t s r c ...s d i c i i pe pe uiy,AT&T wile nt ly have t
ve c i t d he e vie
houl t ontnue n r t t
l ve ua l
o

rs
epond. ( .Ex. 1 a 5 . Hecul kne t ti
' Tr
'
80 t )
r es w ha û
AT&T a s
t ome poi woul be me
nt
d co
33

c n en d i t e ( w a t t n c l n e r mane . ( g e Te tmo ) H er uls w as
o c r e f hgl l ci i j hal g e i d' Eg be r si ny
o
va o
e
'
c e
.

a r of t rs t t AT&T woul sop pa ng Ope a f a pr
wa e
he ik ha
d t
yi
npe k or
odud t tt i e e rs
ha her nt m ie

c t swe enota t lyusng.( gbe rTe tmony) l addii Hecul wr ei t Oc
usomer r
cual i Eg e si
. n ton, r es ot n he t

201 NDRM ta tf eDe lTe m i c mf ra l wih g e lw e u e a t to s e a i'
4
h t û' a a s o o tbe t t o nd s r ci in) c n ro'
-h
h
va
f t l i a y r s 't t %
or he l m r ea on' ha t
pr
AT& T has us t a tvato t m a a pr i c nt r ofe
ed he c i i n ea s
oft e e , tn

c r ng$1000ormor t t n o t s t r ' ( .Ex.1 a 5) Hec lsas j tfe t i
ha gi ,
e o ur n he ofwae.' Tr
80 t
r ue lo usiid hs
.

rs bas d on isbe ift tlc ns a tva i a AT&T woul f l t s m etend ast r pi
ik e
t le ha ie e c i tons t
d olow he a r
he a d
lce e a tva i a Blc ry once Ope a r l s d a s l i t lf t s t r . (d)
i ns c i tons t a kbe r
npe k eea e
e f nsal or he ofwa e 1 .
He c e wa a r of t l ac i tons and at nda rs , buthope t t AT& T woul
r uls s wa e
he ow tva i
te nt iks
d ha
d
r plcae t s e s t t Ope
e i t he ucc s ha
npea ha wih Bl kbe r i a tva i lce e t ough a s f
k d t ac ry n c i tng i ns s hr
el
i t l pa c
nsal t h.
The s c iFa r i Suppor' r ie a e He c e 'f uson Ope
e ond l do n
t' et r t d r uls oe
npea be ng s d a a
k i ol s

motvai f c orf t Se
i tng a t or he cond Tr he,notng t tOpe
anc
i ha
npea ha ie e e a s epr es a
k d tntr d al oc s nd

( a jar a y r c ie t of r a mo et a 21 t ep o s d ( ruls e p u e' (d )
h d le d e ev d wo fe s t r h n x h r po i Hec e ) x os r . 1 ..
'
The s cond iFa t i Suppor' f t not d: Sl r i a r as bl lkelhood t t
e
i cor n
t' urher e ç- e s e ona e i i
-he
hat he
Co pa wil e e a de i tve a e m e i t s r t r .. . .' (#.. As i t c e
m ny l ntr
fnii gr e nt n he ho t e m
' f)
s he as
tr
h oughoutt Oc 2014 NDRM ,He c e bei ved t tOpe a woul be a r i t
he t
r uls le
ha
npe k
d
cquied n he

ls ' tnn' a r id on t tbelefi de i ng t gi Openpea t Se ond Tr nche. The
'hol e ' nd ele
t
ha i n c di o ve
k he c
a
fnalSFa t i Suppor' i c t d t t i decdi t l n Openpe k t Se
i ç c or n
t' ndia e ha n
i ng o oa
a he cond Tr nc ,
a he

Hec lswa n ta c nc r e wi Ope pe k' rv n ep o e to sa i wa wi Op n a s
rue s o s o en d t
h n a s e e u rj cin s t s t e pe k'
h
d biiyt r iesg fca e t ' (#..
i lt o as inii nt quiy. f )
a
'
l t d s ' s to Her ul not d t t i d s be n do n t s pa h w ih Ope ak
n he t ks' ec i n, c es e ha t f
Ri
ha e
w hi t t
npe

be or 'r r ng a e le potntals l oft co pa whe e t t oc s e ende wel
f e' ega di n ari r e i ae
he m ny
r he ç es xt d l
pr
be
yond i ta m a
nii l nage e e tm a e a w as eve ua l a nd d afer t boa d c ude
m nt s i t s nd
nt ly ba one t he r oncl d
34

t tt ac r wasno l rs rousa
ha he quier
onge e i boutt ta a ton.' (d) Th s e nto g Hec ls
he r ns c i ' 1 .. u , ve h u h ru e

vi we t $4. milon l n as a s tt m brdg t ough t s es pr es , H er ul
e d he 5 li oa
hor-er
i e hr
he al
oc s
c es
r c ze t rs t tt s ewoul notbec
e ogni d he ik ha he al
d
omplt d.
ee

He c e i
r uls ncom or t d Ope a s fna a a lc ns s l p oe o s fo M r
ae
npe k' i ncil nd ie e ae rj din r m
.
Ba cl y' O c ober 1 e a l i o t M ana m e Ca e s c i . ( . 48; .Ex.
r a s t
7 m i nt he
ge nt s e ton Tr Ex. Tr
18 a 7)
0 t .

Ope a rpr e e t tt y ge rtd a oxi tl $1 25 milon t oug 3 201 a
npe k e es ntd ha he neae ppr maey 4
li hr h Q
4, nd
.

prj ce g n rtn a a dto a $1 .4mil n i Q42 4 ao e ( . .1 0a 7 .He c ls
oe td e eaig n d iin l 75 li n 01 ln . Tr Ex 8 t ) r ue
o
i op or t Ope ak' l ,r t t J 201 r nue i o t ç a
nc
aed
npe s ower esaed une 4 eve
nt he i nage
M
mentCa e'oft
s ' he

Oc 201 NDRM . ( .Ex.1 0 a 7 . Th Oc 2 4 NDRM p oe td ta d c t e $ .
t 4
Tr
8 t ) e t 01
rj ce h t i e h 80
on
milon AT&T prpa nti abs bed (xpeced a o Oco r31,201 t c
li
e yme s or e t r und tbe
4) he ompa wil
ny l

sa t o g n r t me nng u fe c s to ' ( .Ex.1 0 a 9 . Op n a sp o e to swee
tr t e e ae a i f l re a h l w. Tr
'
8 t ) e pe k' rj cin r
pr mied on e us r a AT&T' e er ie c t m e s a tva i a l s 225,000 t alToggl
e s
nd e s t
s nt prs us o r c i tng t ea t
ot
e

lce e by t e of201 ( .Ex.48;Tr Ex.1 a 7;Ba ca Tesi
i ns s he nd
4. Tr
.
80 t
r ly tmony) M r Baca
. . rly

tsi e ta e e to g j s 3 To ge l e s s wee a tv td b AT&T' e tr rs
e tf d h t v n h u h u t 35 g l i n e r ciae y
i
c
s n ep ie

c so r, h s Q4 2 4 p oe t ns wee r a o a l be a s : ( ) Blc b ry s e d u es
u tme s i
01 rjci
o
r e s n be c u e 1 a k e r ' n s r

a tv td l e s sa a smia tae tr ( .Ex 1 0 a 5 ;()AT&T h d s o t ea ii t
ci ae i n e t i lr rjco y Tr . 8 t ) 2
c
a h wn h bl y o
t
a tvae alr numbe oflc ns si as r pei wih aprvi co ny,M o l Ion;(
ci t age
r ie e n ho t rod t
e ous mpa
bie r 3)
AT&T ha t a lt t do alr r lo oflc ns s asi ha donei er lyi Q1201 ( .
d he biiy o
age ol-ut ie e , t d
nt nal n
4 Tr
Ex.26 a 15 )( AT&T' s lstam wa i e i z d t pus o t lc ns a me ts l
t ) 4)
s ae e
s nc ntvie o h ut he ie es nd t aes
tr t ( .Ex.28 Tr Ex.26 a 3) ( AT&T' Gol n Tike slspi lnehad ld t t
a ges Tr
3; .
t ; 5)
s de c t ae pei
e o he
a ovalofover2milonlc ns f e eprs c t r ( .Ex.47a 1 ;a ( Ope a
ppr
li ie es or ntr ie usomes Tr
t 3) nd 6) npe k

c ud me tte ep oe to si j s afw e tr rs usr whoweeara yp o so e Tog l
o l e h s rj cin f u t e ne p ie e s
r le d r viin d g e
lc ns s aci td t ( .Ex.47 a 7- 0) ( r a Tetmony) I t fve entr ie
ie e tvae hem Tr
t 1 . Bacly si
. f he i
eprs
c t r t t wer pr soned t g e t s num be ofToggl lc ns aci t t m ,mor
usome s ha
e ovii
he r a e t
r
e ie es tvaed he
e
35

t n 225,00 Toggl lc es woul be a tva e a Ope a woul ge r t r ve fom
ha
0
e iens
d
c i t d nd
npe k
d ne a e e nue r

AT&T i Q4.( . . a 7 1 ) W hl M r Baca sp o e to sweea g e sv , t y wer
n
Tr Ex 47 t - 0 . ie . r ly' rj cin r g r sie he
e
no ne s a iy unr as na e orma i ba f t .
t ce s rl
e o bl
de n d aih
He culscr ul edt Oc 201 NDRM i e nal . ( . .
r e ic at he t 4
ntr ly Tr Exs 505, .Afe r e ng
506) tr eviwi
t M e Krsa O' l , aporf i c e tm a
he mo, it n Comor
tolo r di nage a He c es c le t Se ond Tr nc
r t r ul , al d he c
a he

a iex eln o p ru t t g t adrc l f rwh tmih welb as o t e a c mmo ain
n t l c le t p o tni o e p i ihy o a g t l e h r tnn c o d to
l
y
wih l m e um rs gi n LO1 See lke our c
t ow/ di ik ve
.
ms i
onfde on t s e i r l tvey hi h a
nce
he al s e ai l g nd

t si goodvai to f o t ssofsr gntr ieval f de c rge( x)' ( .
hi s
ldain or ur he i tong e eprs ue) or bt ovea 21 ' Tr
.

Ex. 0 a 2) M s O' n o as ctd Op n a sSd e n tae a iiyt rien w e u t'
5 5 t . . Co n r lo ie e pe k' t lmo srtd b lt o as e q iy'
l

a d t t sto g pp ln o lc n er v n e'a ra o swhy s ewa i fv ro l a i te
n he k qr n iei e f ie s e e u ' s e s n
g
h s n a o f o nng h
S c n Trn h .(#)
e o d a c e f ..
M s O'
. Connora s f l d up o a rs cied i t M e r r ng t 1 e us r
l o olowe
n ik t n he mo ega di he ow nd- e

a vai of'oggl a AT&T,as ngVst sunde l ngf c known t t pr pe vebuyes
di tons t e t
ki i hi
i
ryi a t
o he os di
r?

I n t i t i a Ac ils h e t a p rpe tv s l a dorv lain ' (d4 M r Ro se
f o , s hs n h l e l o es cie ae n / au to ?' 1 . . e lr
e
r ponde t M s O' mors e alt the woul as t i t undert nd t tActvai n of
es
d o . Cor ' m i ha
d lo t ke o
l
sa ha
i to

lc ns rs a bi be t ...wih AT&T' a t the wasgoi t ealM r Eggbe r û o ge an
i e e ik
t ter
t
' nd ha
ng o l .
e ç t
t

e ai ont t c. (d.a 1 .
duc ton he opi ' 1 t )
'
l t s me e a l M r Roest alo e e s d s
n he a
m i, .
lr s xpr s t uppor f l ni t Sec Tr nc
t or oa ng he ond a he

whe hewr e:1Ilket sdea ...1lket siki s ofbot c t r (
n
ot i i hi l
i he tc ne s
h usomes AT&T /BB).
epecalywihBB a tvai mor lce es... mos ha ac tf l ng. (t .Mr Roe lr
s il t
ci tng e i ns
al t s ul olowi ' ff) . se
'
we ont wrt t tt Sec Trnc pr dedS e trt n( rlkey vey s ttr ...
nt o ie ha he ond a he ovi l a eur ove i l r hor em)
gr
onl goi a f milo m o e t wepu outo i naly a t rs pr ie now i m uc be tr
y ng ew li n r han
t
rgi l nd he ik ofl
s
h te

t n 1 mont a o. (( .
ha 8
hs g ' ff)
'

36

On Oc o r 30, 201 He c es l ne Ope a t $4. m ilon Sec Tr nc
t be
4, r ul oa d
npe k he 5 li
ond a he

purua t t 201 ARM LSA.( etilStp.a 11 .
s nt o he 4
Pr ra i t )
k. Pos - cond Tr he F undi
tse
anc
nz

Afe Her ul f
tr c es unded t Sec Tr he,Openpea wor d wih Sync onos a t
he ond anc
k
ke
t
hr
s s he

co ny c
mpa onduce dii ncet a uieOpe a ( .Exs 1 415,41 .AsSync onos
td lge o cq r
npe k. Tr . 46,
6)
hr s
c
onduc e duedii enc i communia e t Ope ak t i wa çwori d' a
td
lg e, t
c td o
npe hat t s s re ' boutOpe ak'
npe s

$ 251lc ns Soe 's c t a tthe raiet tb f r we g t2 k a tv lc ns srv n e
1 1 ie e h l' u h h t ij y e l ha e o e
2
'
g
z
e 25 ci e ie e e e u
wilbezeo. ( .Ex.1 a 1 . Thus Sync onos ,havi onl co td duediienc on
l
r ' Tr
'
46 t )
, hr s
ng y nduce
lg e
Ope a f a s r perod oftm e by Novembe 11 201 wasar dy awa et tOpe a s
npe k or ho t i
i
r . 4,
lea
r ha
npe k'

f ur rvenuea AT&T wastedt e us ra tvai .(#..AsofNove r1 201 Mr
ut e e
t
i o nd- e ci tons f )
mbe 8, 4, .
Gite a r pr e e t t Boa d ofDie t s a Openpea t t he bele d t ta a ton
tlm n e es nt d o he
r
r c or t
k ha
ive he r ns c i
bewe Ope a a Synch o swoul be complt by ç he l s we ofDe e be 201
t en
npe k nd
r nos
d
eed
û a t ek
t
cm r 4

a t Ertwe k ofJ nuay2015. ( .Ex.41 a 2) By De e r29,201 Synvhrnos
nd he s e
a r
5 Tr
'
6t .
c mbe
4,
o s
ha tr natdisef t t a quieOpe a ( .Ex. 7a 1.
d emi e t fors o c r
npe k. Tr 41 t )
i GW e di s e t scom i you m ay re al ...'
.
d e hi
ng,
c l b

Afe t Sync onos de t a uieOpe a f l tlo h,He c e kne t tis$4.
tr he
hr s al o cq r
npe k el lr ug
r ul s w ha t 5
milo Sec Tr nc woul notbrdgeOpe a t r
li n ond a he
d
i
npe k h ough a s l a t tOpe a wo d
ny ae, nd ha
npe k ul

ne d mor f ngSoma i t oug e nt s t tofdii ncec l ' ( . 1 a 1.
e
e undi t ke t hr h ve he hores
t
lge yces. Tr Ex. 86 t )
'
Openpe i tfed a he $5 m ilon i brdg f ng fom a he compa butHe c es
ak den ii not r
li n i e undi r not r
ny,
r ul

beive t khetr 't tOpe akga t t compa we eçih ( a s l .'(d a 1.
le d hatt ems' ha npe ve o he
t
ny r ç c 3x t ael' 1 t )
r
Acc di y,Herul beive iwas'g ar t i gi g npe k)bei wilngt a oa h'
or ngl
c es le d t
shl d o ma ne ope a
ng li o ppr c '
AT&T a Bl kbe r f addii l f ng on t e t r be us i woul sgniy t t
nd ac ry or
tona undi
hos e ms ca e t
d i f ha
Openpea i i om plt l ove a ba r l a woul desr a lve age t y m i ha i
k s i
c
eey
r
re nd
d toy ny e r
he
ght ve n

ne itng a hi down t lne.' (d.. I lghtof Ope k' fie ac ston a
gotai nyt ng
he i ' 1 ) n i
npea s ald quiii nd
3
7

pr c i tna a poston,M s Yo e l M r Eggbee ,M r Bl t i and M r Roese
e arous i ncil ii
. ung maied .
r . uesen,
.
lr
on J r 8,201 wrtng:éW e di s t sc i , you m a r a l whe t y a e t tke
anua y
5, ii i
d ee hi om ng
y ec l, n he gr ed o a
AT&T' i t nta a pr pa i t d ofr ale t . The s prs i t sow aci ton t t
s nvesme s
e y nsea
e quiy
ur ie s he l
tvai ha
t compa t d usa
he
ny ol
bouti t f l . . . .' ( . .1 6 .W h nAT&T d cd dt b y l e s s
n he al
' Tr Ex 8 ) e
e ie o u i n e
c
fo Ope ak i t ad of doi an e t i t e t Her ul r alzed t t A T& T was not
rm
npe nse
ng
quiy nvesm n ,
c es e i
ha

i e ese i i si i t l t r de l
ntr t d n nve tng n he ong-e m ve opme ofOpenpea . (
nt
k YoungTetmo .
si ny)

i. Dur n Repor:Ope ak' Fi i sar Sl ascaly ce '
i
ki
t
npe s nancal e sbl i l lan'
Her ul dec de t do a Eed e mi ton of Ope a s books a r or al
c es i d o
l xa na i
npe k'
nd ec ds fer
Synchr nos bac d out of is a quiii n of Ope a . On J nua y 20,2015,M r Rocser
o s ke
t c sto
npe k
a r
.
l
e ld ChrsTe i fom t Dur n Gr , co ng M r Eggbe r wrtng t tDur n' ke
maie
i nagla r he
ki oup pyi
.
e , ii ha
ki s y

f c sp it s o l i ld teira u o p e p i lc n e b iga tv td b AT&T. ( .
o u on s h u d ncu e h ç jmp p f r - ad ie s s en ciae y
l
' Tr
'
Ex.
497aa 1.Mr Roese we on t wrt t tHecul 'e l wa gdlt s i f e i ly
t ) . lr nt o ie ha r es t aly nte o ee f ornscal
r
a f busne si g ngonheebytki at oughl a t a countng( t ldg r
ny unny i s s oi
r a ng hor
ook t he c
i how he e es

fo tr u ht tefn , t . . ( . . 9 aa 1.
lw h o g o h i s ec..' Tr Ex 4 7 t )
)'
Be wee Fe ua y 2 a Fe ua y 5, 201 t Dur n Gr
t n br r
nd br r
5, he
ki
oup c
onduc e a fed
td
il

e mi to ofOpenpea Tr Ex.1 .Hec e beive t tt e mi to c ucedby
xa nain
k.( .
92) ruls le d ha he xa nain ond t
t Dur n Gr wa t a opra e mec nim t i tga e Openpea sbooksa r c ds
he ki oup s he ppr it
ha s o nvesi t
k'
nd e or .
The Dur n Re t cha a t rz d t s ope of t fel e m i ton a ta r vi w of c h,
ki
por
r c e i e he c
he s d xa na i s ( e e
as
a ount r c va e a ount pa e, and fna a s
cc s e ei bl, cc s yabl
i ncil

. . f t t re n mont e d
or he hite
hs nde

1 311 5 ( .Ex.1 a 3) Bas ont sr ew,heDur n Re tdi no fnda fa or
2/ / 4. Tr
'
93 t . ed hi evi t
ki por d t i ny r ud
mir pr e a i i Ope a s boo a r c ds orwih r s tt is r nue r ognii
se es nt ton n
npe k'
ks nd e or
t e pec o t eve
ec ton

polcis ( .Ex.1 ) Dur n as çe e t nvoi s t t mont y a tviy rpors
i e . Tr
93 .
ki lo s viwed hei ce o he
r
hl ci t e t
pr de by t c t r f m ont y bilng' a f
ovi d
he usome s or
hl li ' nd ound t t the is d i c s we e
ha s s ue nvoie
t
r

s
upporedwihoute ptont t c tme pr deda tviy rpors' ( .Ex.1 a 8) On
t t
xce i o he uso r ovi ci t e t. Tr
'
93 t .
38

Fe ua y 12,201 M r Roese wr e a e ai t M r Bl sen a ot r sai t t t
br r
5, .
l r ot n m l o . ue t i nd he s ttng ha he

Du knRe o t o n ta Op n a sfn n il weeSb a ial ce n' ( .Ex.1 a 1.
r i p r f u d h t e pe k' i a cas r t l sc l la ' Tr
g
y
93 t )
.

ii N o N ot c ofD e aul or l pai m e ofL oan
i.
ie
f t m r nt

He c es ne r s t Ope a a notce of de a t ba e on a al ge m aera
r ul
ve en
npe k
i
f ul s d
ny le d
t il
m ir pr enttons oromisons undicl e M a e i lAdve s Efe t , or on O pe ak' nonse es a i
si ,
s os d t ra
re fcs
npe s

c
ompla e wih t W a r nte ,i udi noni nc t he ra i s ncl ng
compla e wih GAAP. The frt Notc of
i nc
t
is
ie
De a t t t He c es s nt t Ope ak wa on J r 1 , 201 bas d on f l e t pa
f ul ha
r ul e o
npe
s
anua y 4
6, e
aiur o y

prnci la i e e tdue on J r 1 201 . ( . 1 0 . Thswa t eb ssf rs b e u n
i pa nd nt r s
anua y , 6 Tr Ex. 3 ) i s h a i o u s q e t

Notc ofDeaulaswel.( . .1 1 )
ies
f t
l Tr Exs 35, 41.

He c t di not i i is l n t Ope a i Q4 201 or Q1 2015. ( l
r uls d
mpar t oa o
npe k n
4
Roeser

Te t n ) Asap bl c mp n ,Hec e i r q ie t pu l l rp r isa s sme to te
si y .
mo
u i o a y ruls s e ur d o bi y e o t t se s n f h
c
c
pr biiy t tisl nswoul be r pa d,a di a pr r t val ton oft l n ba e on t
oba lt ha t oa
d
e i nd d
o a a ua i
he oa s d
he

pr pe tofdeful. (#.. Noti ii isl n me ntt tHec e rpr e t t t publc
os c
at f)
mparng t oa a ha ruls e es ntd o he i
t ti bele d Openpea woul be a e t r pay isl n t He cul i f l Ope
ha t ive
k
d
bl o e
t oa o r es n ul.
npea fld a
k ie
vol a y pe ii f Cha e 7 ba u c on Se e be 27,201 and He c e fld t s
unt r tton or
ptr
nkr pt y
ptm r
6,
r ul s ie hi
l ws ta i tt De e nt on Se e r29, 6.
a ui gans he f nda s
pt mbe
201
GA AP R ev nue Rec
e
ozni
don
i A m endm ent6 Prepaym ent
.

Bo h He c e a De e nt elct d e r t si ony r ga di whe he He c e
t
r uls nd f nda s iie xpe t e tm
e r ng
t r r uls
r c ze r venue fom AT&T' Amend e 6 pr pa e pr ry a or ng t GAAP
e ogni d e
r
s
m nt
e ym nt ope l cc di o

(k neal Acc ptd Ac ountng Prncpls'. Herul c l P.Vi entM ia a a e r
sGe rly e e c i i i e '
)
c es aled
nc
lno s n xpe t
t t tf a
o esiy bout la lt a a
i biiy nd bout whehe Ope
t r
npea s r ve
k' e nue r cognii polc e we e i
e
ton ii s r n

ac or ncewihGAAP.( ia Tesi
c da
t
M lno tmony) enda scaldParc Ga
.Def nt le tik nnona a e r t
s n xpe to

39

t siy a
e tf bout t s m e a alo t t siy a
he a , nd s o e tf bout He c e ' alege da a s
r ul s l d m ge .

( nnon
Ga

Tesi
tmony)
.
Boh e rs a e d t t j 985- of t Fi nca Accountng St r Boar s
t xpet gr e ha
605
he na il
i
anda ds
d'
c t a i go i r venuer c nii f s fwa e a i st how Ope a s d ha
odik ton, vem ng t
e og ton or o t r , pple o
npe k houl ve
r c ze r nuepur uan t Am e
e ogni d eve
s to
ndment6' s l of225,000 Toggl lc ns t AT& T f $8
s ae
e i e es o
or

mil n. ( .Ex 3 8 M ia o Te tmo y;Ga n n Te tmo y . S e i al,b t e p rs
li
o Tr . 6 ; ln si n
n o si n ) p csc ly oh x e t
a id j 985- 25- r aed t t c to fr s t r rve rc nii whih
pple
605- 3, elt o he ondiins o ofwae e nue e og ton, c
i ude:()pe s i e de e of a ar me e ss ( dei r ha oc rd;()t
ncl
a ruasve vi nc
n range nt xit; b) lvey s cure c he
ve ' fe i fxe ordeer nabl ( coleca lt i pr bl. ( .Ex.368 a 1 M ia
ndors e s i d
t mi e; d) l tbiiy s oba e Tr
t 4; lno
Tesi
tmony;Ga
nnonTe tmony) Alelme smus beme t rc niervenue.(d..
si
. l e nt t
t o e og z e
14
Ga n a M ia do notdipue t tcondii ()a () ae stsid. ( ia
nno nd lno
s t ha
tons a nd d r aife M lno

Te tmo y Ga n n Te tmo y . Fis,b t e p rs a re ta Ame me t 6 s tsi s te
si n ' n o
,
si n ) rt o h x t t g e h t
nd n
aife h
c ton t tç ruasve evi nc ofa ara me e ss' (#.. Bot e t alo a e
ondii ha s s i
pe
de e n rnge nt xit. f )
'
h xpers s gre
t tt ole t biiy i pr bl' be us t $8m ilo wasa t ly c l t by Ope k fom
ha ' lc a lt s oba e' ca e he
c
li n
c ua l oleced
npea r

AT&T i J l 2 4 (#) Th d s ue b t e te e pe t c n ee o f co s ( a d ( )
n uy 01 . . .. e ip t ewe n h x rs e trd n a tr b) n c ,
J
na l whehe de i r oft s t r occ r d,a whe he t $8 milon pa e wa
me y, t r lve y he ofwa e ure nd
t r he
li
ym nt s

fxt ordeemi bl (d..
id
tr na t. 1 j
W ih r pec t wheher dei r oft s t e oc ured,i M ia s expe topi on
t es t o
t
lve y
he ofwar c r n l no'
r ni

delvey ne rocc rd be us ( )t Toggl lc ns we enottngi e t ngsand t r f e
i r ve ure ca e 1 he
e ie es r
a bl hi
he eor

wee n v r a tal d lv r d t AT&T,a d ( ) Op n a s c so r wa te e u e o
r e e cu l eiee o
y
n 2 e pe k' u t me s h nd s r f
Toggl s t a e,not AT& T,a Ope a ha no r a on t be i ve t c d r c ni e t t
e ofw r
nd
npe k d
e s o le hey oul e og z ha

rve be us s fw e usr wer a t ly usng t Toggepr uc.( ia Tetmo .
e nue ea e o e nd e s e cual i he
l od t M lno si ny)
Ga
nnon opi d t tt c tons f dei r wee me her purua t j 985- 25 18.
ne ha he ondii or lvey r t e s nt o
605- ( nnon Tesi
Ga
tmony) Unde t t s to dei r o ur ç n t ta fr oft pr t
.
r ha ecin, lvey cc s û
upo he rnse
he oduc
40

m a t r'a when et ri h c t e ha t ke pos e son oft s t r vi a downl d,' or
se ' nd
ihe t t usom r s a n s s i
t
ht ofwa e a
oa '
S he cusom e has be n pr de wih a ce scode t tal t cusomert tke i
'
t
t r
e ovi d t c s
s ha low he t
o a mmedit
ae
pos es i o t s t r on isha dwa e pur ua t a ag e men o pur ha e or r f t
s son f he ofwa e
t r r
s nt o n r e t r c s de or he

s t r ' ( .Ex.368 a 23 . Hee,t l od tmase' f t Toggl s t e wa
ofwae.' Tr
t )
r he t uc
pr
tr' or he
e ofwar s
dei r d t AT&T s e tme i 201 whe AT&T frtr e ve Toggl fom Ope
lve e o
om i n
3
n
is ec i d
e r
npea a
k nd

pu Toggl i t vaiusApp St es ( tlmanTetmo Ga
t
e n he ro
or . Gite
si ny; nnon Tesi
tmony) l a ii
. n ddton,
purua t Am e e 6,Ope a dei r d t Toggl lc ns t AT&T on a de i r
s nt o
ndm nt
npe k lve e he
e ie es o
lve y

sh d eo tie i Ame d n 6 ( .Ex 1 a 3 4 F r rTe tmo y . Fn l Ga n n
c e ul u l d n
n
n me t . Tr . 8 t - ; ame si n ) ial n o
y,
pe s svel o ne t tOpenpea sc tme wa AT&T,nott endus ,bec us ( )AT&T
rua i y pi d ha
k' uso r s
he
er a e 1
wa t en iy t tpai Ope a f t Toggl lc ns s a f a mai e nce a s
s he tt ha d
npe k or he
e i e e nd or ny
nt na
nd uppor
t

fe a s cae wih t e ()te ewee n p o iin i Ame d n 6 t tln e AT&T'
e s so itd t h m, 2 h r r o r v so s n
n me t ha ik d
s
pa e f t 225, lc ns s o O pe a s r c nii n of r ve
ym nt or he
000 i e e , r
npe k' e og to
e nue de i d f om t m ,t
r ve r
he o

e us a tvai ort c a ' oft lce e ,a ( Ope a ha no i a t wha
nd- er ci ton b eptnce' he i ns s nd 3) npe k d nput s o t
ac

AT&T di wiht lce e at t s e.( nn Tesi
d t he i ns s fer he al Ga on tmony)
.
Ne ,M ia a gue t tt $8 milon AT&T pai f r t 225, pe peua Togg e
xt lno r d ha he
li
d o he
000 r t l
l
lc ns s wa notfxe orde e mi e be aus afe Ame
ie e
s
i d
t r nabl c e tr
ndme 6 wa e c e bot AT&T
nt
s xe ut d, h

a M r Ba cly dic s r f ng pa tof t $8 m ilon t make Ope k a a m o e
nd . r a s us ed e undi
r
he
li o
npea ppe r r

ata tvet bea quie t ianoTesi
trci o c rd. M l
tmony) To s
. uppor hi poston,M ia ctdt e l
t s ii
lno ie wo mais
i l t 201 bewe M r Ba cly a AT&T whe e t pa te consde e a
n ae
4 t en
. r a nd
r he ri s
i r d mendi
ng

Ame nt6t gi bac t $8milo ( ia Tetmony;Tr Exs 1 328) Ac or ngt
ndme o ve k he
lin. M lno si
. . 46, . c di o
Ga n,bot AT&T and Ope ak te td t $8 milon a nonr f bl bec us ( )
nno
h
npe rae he
li s
eunda e a e 1

Ame d n 6 i efe pl il r fre t $ 8mi in f r2 ,0 n n eu d b eAT&T To ge
n me t t l x i ty e erd o $ l o o 250 0 o rf n a l
s
c
$ l
gl
pepeua lc es'( .Ex.1 a 3)(mphassa d) and( t fc t tAT&T a Ope ak
r t l iens ' Tr
8t e
i dde , 2) he a t ha
nd npe
wer dic sng t m e ng' Ame
e s us i i ndi '
a
ndme 6 t gi ba k t $8 milon m e ntt tbot AT&T
nt o ve c he
li
a ha h
41

a Ope a bei d t t pur ua t Am e e 6, t $8 m ilon was nonr f bl
nd
npe k leve ha
s nt o
ndm nt he
li
e unda e.

(
GannonTesi
tmony)
.
Ha ng c i e t t si ony ofbot e t, ltnd t t tm ony ofGa
vi onsder d he e tm
h xpers s he esi
nnon t be
o

mor pe s i He c esdi notde o ta e t tt m n ri whi Ope a r cog z d
e r uasve. r ul d
m nsr t ha he nne n
ch
npe k e nie

r nuede i d fom AT&T' $8 milon pa nti Ame m e 6 vi a e GAAP.
eve
rve r
s
li
yme n
nd nt olt d
1 1 CONCLUSI
1.
ONS OF LAW AND ANALYSI
S
a. N e i ntand Fr
zlze
audul nt ir pr s nt ton
e M s e e e ai
i A pplca e La
.
i bl w

A pli if m us al ge f
a ntf
t le
our ee e s t esa ih a faud or
lm nt o t bls
r

fa e
r udulnt

mirpr e ai cli :ç 1 a fle sae ntc r ng a maeilfct ( t rpr enors
se esntton am $ ) as ttme onceni
(
tra a ; 2) he e es t '
knowldget tt rpr e ai i fle;( a i eni t tt rpr s nttoni uc a he
e ha he e es ntton s as 3) n nt ton ha he e e e ai nd e not r

t a o i;a d ( )c ns q n ij r b te pat a ng i r la c o te rp e e tto '
o d n t n 4 o e ue t n uy y h ry di n ein e n h e r s n ain.
'
Bute v.Yus 44 So. 1 1 ( a. 0)( tton o te .
lr
em,
3d 02, 05 F1 201 ciai mitd)
To esa ih a neg i ntmir pr e a i cli unde Flrda l a pa t m us s w :
t bls
lge
se es ntton a m
r o i aw, ry
t ho

$ 1 a mirpr s ntton ofmaeilfc t tt dee tbele d t be t' butwa i fc
$ ) se e e ai
(
tra a t ha he fndan ive o l
ue
s n at
fle;( t tdefnda s d ha known t rprs nt i wa as () t d e nt
as 2) ha e nt houl ve
he e e e aton sf le; 3 he efnda
i ende t i e t pli ift r y on t mir e e aton;a ( t pl ntf a td i
nt d o nduc he antf o el
he seprs nt i nd 4) he ai if ce n

j si be r la c u n te mirp e e tto ,r s lig i ij r ' Arig o Pe l Cr e ,
u tfa l ein e po h se r s nain e utn n nu y. ln t n bbe e k
'
LLC v CampusEdge Condo As ',I .
.
. s n nc ,

So.3d

-

-

,

201 W L 5076915,a * ( a.1tDCA
7
t 2 Fl s

Nov. 201 .
6, 7)
tThe fr t e e ent of bo h c us s of ac i r r f s s a e en s of m a eral f c .
'
is l m s
t a e
ton equie al e t t m t
t i a t'
'
Ar i on Pebb e Cr k LL C,
lngt
l ee ,

-

So.3d

-

,

201 W L 507691 a #2. A f ti m a erali ,but
7
5, t
ac s t i f

f rt a l ge nondi c os r orm i r pr s nt ton, he com pl ni pary w oul nothave e e e
o he le d
s l ue
se e e ai t
ai ng t
d
nt r d

42

it teta s cin.Wf Na 1Ba ko a v Ve t48 S 2 1 2 ,1 3 ( a 2 DCA 1 8 )
no h r n a to
/ t n fFl. . s, 0 o. d 3 8 3 2 Fl. d
.
95
(ntr cttonsomit .
i enal iai
ted)
d n a ton f fa ge r ly m a not be pr di t on sa eme s of opi on or
i
A
c i or r ud nc a l
y
e caed
tt nt
ni

pr m ie off ur ac i butr t rm us be ba e o a sa e e c e i apa tore si
o s s ut e ton,
ahe
t
s d n tt m nt onc m ng
s
xitng

fc. Mei v Ju ih 78 S 2 1 75 1 7 ( 1 .3d DCA 2 01 ( iains o te )
a t' ja . rc , 1 o. d 1 , 1 7 F a r
'
0 ) ctto mi d .
t
Cpufi 'saeme s s h asa i omiet dei ra Sxc ina'pr tors r c r gr )
k fng' tt nt, uc
s s o lve n e epto l oduc
pr
eviekl ae

matrs o o no rte t a fc,a d c nsi t l n n a o a l p fe y' MDVI I c v
te g) f piin ah r h n a t n o tt e) o - di n be u f r .
u
'
P, n . .
Be e , 2 So 3 5 ,5 ( a 4h DCA 2 7 (iain o te ) Fia ca p oe to sh v
b r 2 2 . d 55 61 F1. t
01 ) ctto mitd . n n il rj ci n a e
be n c i r d non- c i bl t fng' pr s s off ur a ton. Royal Typewrier Co. v.
e onsde e
a tona e s
puf ' omi e
ut e ci
t
Xe ogr phi Su is Cop. 71 F.d 1 9 , 1 0 ( 1h Ci. 1 8 ) (n lzn fa d ln
r a c pple
r , 9 2 0 2 1 3 1 t r 9 3 a ay i g r u ue t

mirpr e ai cam unde Fl i lw)
se esntton li
r orda a .
A nal s
ysi

The e i a dic
r s
s onnec be wee t cli s br
t t n he am
oughti t s l ws t t a tons He c e
n hi a ui, he c i
r uls
t a t tm e,a is i e nal c empor neous doc
ook t he i
nd t ntr
ont
a
ument a emais The r s f
s nd
l.
ea ons or
r sr t i a maki t l n a e de al a sa kl c r s wih t c us r cli sof
e tucurng nd
ng he oa r t ied nd tr y onta t t he oncl o y am

rla c o p oe to s a d frc ss Th GAAP is e ae boh u c n i ig a d c nrv d
ein e n rj cin n o e a t. e
su s r t n o vncn n o tie
a di nota ie un i t Ope a ba up c a t flng oft l ws t He c e kne
nd d
rs tl he
npe k nkr t y nd he ii
he a ui. r uls w
a
boutt AT&T pr ym e fo t oute ,none ofis c t mpo a ous doc
he
epa nt r m he s t
t on e r ne
ument e e s
s xpr s
c e n a t t wa t r ve
onc r bou he y he e nue was beng r cog z a e n atti l is ofi e s a
i e nied, nd ve
ra t fc r nd
e pl e c d note a n why t r po tng w a noti c pla e w ih GA AP. The GA A P
m oye s oul
xpl i
he e r i
s
n om i nc t
i s onl s f c afe t f c t ough H e c es l w ye s a e r a pl yed no r e i t
s ue y ur a ed t r he a t hr
r ul ' a r nd xpe t nd a
ol n he
de s ons m a by H e cul a t tm e t l ns w e e m ade. W hie l ne not de i tve y
ci i
de
r es t he i he oa
r
l
ed
f nii l
de de t tt m ont y r por i oft AT& T pr pa e w as G AA P c pla ,lf nd t ti
ci ha he
hl e tng
he
e ym nt
om i nt i ha t
w a c it nt w ih Ope ak' r por i a t tm e i l ng t Bl kbe r por i of t
s ons s e
t
npe s e tng t he i , nc udi he ac r y
ton
he
43

busne s and wa m a a trr vi w ofs t r r ve e r ognii prnci esand cons t ton
i s,
s de fe e e
ofwa e e nu ec ton i pl
ula i
of outi audior . The e wa no e de e of a efo t t dec i He culs 1 am not
sde
ts
r
s
vi nc
ny f r o
e ve r e .
pe s de by t t si ony ofHe c e e twines t tt r po tng wa i orec. The
r ua d
he e tm
r uls' xper t s ha he e ri
s nc r t
AT&T pr pa ntwa c rai , non-ef nda e,a t s t r wa de i r d t Ope
e yme
s et n
r u bl nd he ofwa e s lve e o
npea s
k'
cuso e ,AT&T.
tm r

The i ta 201 l n w a m ad be us oft pr vi s ce s of M r Gitc a t
nii l 2 oa
s
e ca e he e ous uc s
.
tlm n, he
CEO,t pr e e ofBoar m e r ,i l ng t f
he es nc
d mbe s ncudi he onnerCEO ofAppl , a t pr ie of
e nd he om s
t Cic t blt W he t Cic t e was c nc le , te mao p e s f r t e l n
he s o a e .
n he s o ablt
a e ld h
j r rmic o h oa
dia a e Ope a e s ntal be a e a dif r ntc
s ppe r d.
npe k s e i ly c m
fe e ompa . The l n wasr tucur i
ny
oa
esr t ed n

201 t gan i m e a e f i om e f He c es a t buy mor tm e whie pr di lmie
4 o i m dit ee nc
or r ul nd o
ei
l ovi ng i t d
a tona ca t lf rOpe
ddii l pia o
npea sc nge i diec i
k' ha
n r ton.The AT&T i sm e ,s ce swih t
nve t nt uc s t he
Bl c ry r ai hi a optmim a
a kbe r eltons p, nd i s boutt Toggl s t a et c ogy c us d He c e t
he
e ofw r e hnol
a e
r uls o
sa t c s
t y he our e.

No oft t e i vi lDe e
ne
he hr e ndi dua f ndant m a a f le sa e
s de ny a s t t ment a
s bouta ma e i
ny t ral
f t t He c e .
acs o r ul s
1. M r.K won

1que to why M r Kwon wase n s d.The e i no e de t thepe s na l m a
si n
.
ve ue
r s
vi nce ha
r o ly de
a r pr s a i et rve baly o i wrtng t He c e . He di sgn ce t n doc e son
ny e e entton ihe r l r n ii o r ul s
d i
rai
um nt

be l ofOpe a t 201 AMRLSA a Advanc Re t( .Exs 5- ;heAprl30, 4
haf
npe k:he 4
nd
e ques Tr . 7) t
i 201

Fis a Se ond Ame me s a W ave s t t 201 ARM LSA ( .Exs 8- ;t 3d
rt nd c
nd nt nd i r o he 4
Tr
. 9) he r
Ame
ndme t t 201 ARM LSA ( .Ex.11 ;t Se
nt o he 4
Tr
) he cond Trnc Adva eRe s ( .Ex.
a he
nc que t Tr
1 ;a compla c tfc ts a t monhl fna il f J nua y,M ac Q1 a Aprl
0) nd
ince eri ae s o
t y i ncas or a r
rh, , nd i,

201 ( .Exs 30,34,36) Howe r 1fnd no sae ntwihi t e doc nt t tM r
4. Tr .
.
ve , i
ttme
t n hos
ume s ha .
Kwon kne t ha be n f le, any sa e ntt tM r Kwon s d ha kno wa f le.
w o ve e a s nor
t t me ha .
houl ve wn s a s
44

He c es a gue t tM r Kwon wa gr sy ne i nti r l ng upon M r Ba c a a
r ul r s ha .
s os l glge n eyi
.
r l y nd
t Ope a fna e de t tsnceM r Ba c a ha noprore re e a aCFO,wa no a
he
npe k i nc parmen i
.
rly d
i xpe inc s
s t
CPA,a Ri ha dsa Hr ns bot l tt fna de t e i M a a J of201 . (
nd c r nd o ky h ef he i nce parm nt n y nd une
4 DE

1 Pl Su Pr e Fi ngsofFac a ConcusonsofLa , ! 1 8 .
40, . pp. opos d ndi
t nd
l i
w
9)
Thi ar
s gume i dii nuous a doe nots
nt s snge
nd
s
uppor He c e cli ofr i nc . The
t r ul s' a ms ela e
He c es l n doc e s r quie t c
r ul oa
um nt e r he ompla
ince ce tfcae t be sgne by et r t
rii ts o
i d
ihe he
c
ompa s CEO or CFO. W he 1 as d why He c e acc pt a was no alnne by
ny'
n
ke
r ul s e ed nd
t a d
c
ompla e c rii t t t we e sgne by t co ny l wye , t H e cul w ine s
i nc e tfcaes ha
r i d
he mpa
a r he r es t s es
e ane t tsa tup co pa esa e ofe s r el sa f d and m a notha a CFO . l i no
xpli d ha trm ni r l n pa s y t fe
y
ve
ts t

ce i l f rHe c lst ag eta t y c ul j si by rl o fna ca sae n sprp r di
r dbe o r ue o r u h t he o d u tsa l ey n n il ttme t e ae n
t a e e ofaCFO orCPA butM r Kwon coul not
he bs nc
.
d .
2. M r Gite n
. tlma
1lke s s no evi nce ofany f le sa e e by M r Gite a W ih r s tt M r
i wie ee
de
a s tt m nt
. tlm n. t e pec o .
Gite n,Her ul poi st t Febr a y 11 201 m e tng wih M r He i z, M r Bl sei
tlma
c es nt o he
u r , 4 ei
t
. nrque
. ue t n,

a M r Egg e ;t Oc obe 9,201 m e tng wih M r Henrque a an e a ls ntt M r
nd . be r he t r
4 ei
t
.
i z, nd
m i e o .
He i ue on Se e r 30,201 as ng f t Odobe m e tng. Ho
nrq z
pt mbe
4, ki or he
r ei
weve ,t Toggl s e
r he
e als

p o e to s if r t n a o t h i le Tik t' r g a a d AT&T s lsq o ap st o t
rj cin ,n o mai b u t e t d n c e'p o rm, n
o
Go
ae u t a sd n o
He culsbe o e a a t Fe ua y 11 201 mee i we er e ve die ty fom AT&T. The e
r e f r nd t he br r , 4
tng r ec i d r c l r
r
i no i c ton t tM r Gite a doubt t AT&T da a Inot t tM r He i ,on t
s ndi a i ha
. tlm n
ed he
t.
e ha
. nrquez
he
ot r ha had r e v i ns Hi no esa
he nd,
es r ato . s t boutt meei i c t d t t$ i r bl ast t
he
tng ndi a e ha 1 nc edi e ha
as

gie equot a t al201 rve prj ci s unds t sc ny ha ye t dei ron is
lc ns
a nd ot
4 e nue oe tonl o ,hi ompa
s t o lve
t
m a pr ors l f ec s s'
ny i a es or a t .
'
I as ng f t Oc obe m e tng,M r G ite a w r e ' e' r ly be n c us ng i
n ki or he t r e i
. tl m n ot l ve ea l e r hi t
W

lt l r ve has be g owi t oug t r a we'lha ove $1.M EBI
a ey, e nue
en r ng hr h he oof nd
l ve r 5
TDA i
n
45

Se e be . M r Gite
ptm r'
'
. tlman' e husa tc o i im a
s nt isi ptm s bout Ope a s pe f m a e i
npe k' ror nc s
nona tona eopi on a t r i no i c ton t tt ûna i i or a i wa i cc ae.
c i bl ni nd he e s ndia i ha he ncal nf m ton s na ur t
The e i no evi nc t tM r Gite
r s
de e ha . tlman mad a f s r pr entton a t Ocobe 9
e ny ale e es a i t he t r
m e tng ort tM r He i z r i u t twhih wa s d. l r c i t m e tng,M r
ei
ha . nrque eled pon ha
c
s ai n e ountng he e i
.

He rq e S ful rc g igd t a Da g tlma )i t e c n tn s l s n b t...ama
n iu z i l l e o n ze ) h t n Gi e n s h o sa t ae ma , u
g y
t
n
wih pas i a r lgi t wha he i at mptng t a co pls .' Att meei Ope a
t
son nd e i on o
t s te i o c m ih '
he
tng, npe k
dic os t tt numbe oflc ns a tva e wa f a ai a l l r't n t numbe s d.
s l ed ha he
r i e es c i t d s l m tc ly owe ' ha he
dr
r ol

M r He i
. nrquez s w f hi s ft ine a i a i u a nmni 'a i e i
a or m el he ' w pplc tons p nd
ng' nd s
mor mpora l i
tnty

gi)win s gd wh tan w u e wo l e pein e o e a ig t e Ope pe k s ui n whc
sc t e se l a e sr ud x re c n n bl h
n
n a olto ih
was a a ng.' W hie e our ed by t m e tng, M r He i z was no pr r d t
m zi '
l nc ag
he e i
. nrquc
t epa e o
ne e s rl r y on et r hi own obs r a i or t sa e e s m a ûhe c
c s a iy el
ihe s
e v tons
he t t m nt
de: l
t ompa ha
ny s
de
monsr bl m a ad nce t t1wa note c i t s e ... we s d f l up a t ngs
ta y de va s ha
s
xpe tng o e
houl olow
nd hi

a pe r (i) t b p o r sig q ie wel whih a1 n e t be c n ime a d e i e c
p as sc o e r g e sn ut l, c 1 e d o
o fr d n v d n e
s
uppori t s c am svai t ' Is eno bassf rla lt on t par ofM r Gite a
tng he e l i
ldaed. e
'
i o ibiiy he t
. tl m n.
3. M r Bar l
. c ay

Oft t ee i vi lDef nt,M r Ba c a ha mos oft co a twih He c e
he hr ndi dua
enda s . r l y d
t he nt c t
r uls
empl es a mos oft alegai ofm ir e e a i a e made a i thi He c e
oye , nd
t he l tons
sepr s nttons r
ga ns m. r ul s
a g t tM r Ba c a made f le sa e e t w hih l t m t e e t 201 ARM LSA a
r ues ha
. rly
a s tt m n s c ed he o ntr he 4
nd
l n t Sec
oa he
ond Tr nc
a he. Si e t si o i cae t t He c es r i s upon is Ne De
nc e tm ny ndi td ha r ul ele
t w
al
Re tM e
ques
mos i dec di t m a a l n,t is t ns o whehe He cul i po ae
n i ng o ke oa he s ue ur n
t r r es ncor r td
a f s r pr s nt i a l ge y m a by M r Ba c a i eihert M a ch 201 N D RM or t
ny ale e e e aton le dl
de
. r l y n t he r
4
he
O ct2014 N D RM .

Th tn n ilp o e to si t et n g me tCa e'o t e Ma c 2 4NDRM aeal
e i a ca rj cin n h s a e n s ' f h
Ma
rh 01
r l

d rv d fo M r Ba ca ' fn n ilp oe to sf rOp n a f rFY 201 whc we eb s d
ei e r m . r ly s i a ca rj cin o e pe k o
4 ih r a e
46

o To ges lsp o e to t t r Baca dr cl r c ie fo AT&T.Ht c lswa a r
n g l ae rj cins ha M . rly ie ty e ev d r m
r ue s wae
t tMr Baca s fn nca p o e to s wee b s d o AT&T' itr a s ls Sa g t' a d
ha . r ly' i a il rj cin r a e n
s n en l ae ç r es' n
t
if r ass' M r Ba c a had no r s t doubt AT&T' num be s a ace r as bl i
io ec t.'
. rly
ea on o
s
r nd td e ona y n

rli gu nt e t p o e tOpe a s2 4tn nca p ro ma c .
ey n po h m o rj c npe k' 01 s a il ef r n e
The noton t tM r Ba cly' s ls f r ca t a e s fce t i
i ha
. r a s ae o e ss r ufi int o mpos la lt i t nuous
e ibiiy s e

a bes. As age r r e,sa e nt ofo ni and pr iesoff ur ac i s asfna i l
t t
ne al ul t t me s pi on
om s
ut e ton uch i nc a

p o e to sa ds lsf r c ssa en ta to a l a amatro lw.AsLe n Ha d si wh n
rj cin n ae o e a t r o cin be s te f a
a wd n ad e
t buye of a mac ne cli d t s l ha de ei d hi by e gger tng t ma hi s
he
r
hi
a mc he eler d c ve m
xa ai he c ne'
c pa lte Sl r a e s eki oft l whi h no s nsbl ma t kess i l , a i he doe
a biiis: s- e r om
-he
nds ak
c
e i e n a
erousy nd f
s

h s fe sfo hsce uiy' V lanMea sCo v Si n Mf .Co, 48F. 5 8 6( dCi.
e u fr r m i r d l . uc
t '
tl . . mmo s g .2
8 3, 5 2 r
1 8 . Th t i p riu al t c s wi n w tc n l g c mpa is W ih n hso y o
91 )
a s atc lry he a e t e e h o o y o ne . t o it r f
h
eani ,fna a f eca t a e i r ty s c a i ltl m o e t n g s wor To quot
r ngs i ncil or ss r nhe en l pe ultve; ite r ha ue s k.
e
W a r n Bufe :' ec t m a t l you a gr tde la
re
ft '
For ass y el
ea a boutt f ec ser t y t l you not ng
he or a t ; he e l
hi
a tt f ur '
bou he ut e.
'
The cli t t He c e r i on M r Ba c a s ûna i l f e s s i unt bl I
a m ha
r ul s eled
. r l y'
nc a or ca t s ena e. n
Fe ua y 201 wel bef e t M a c or O c o
br r
4,
l or he
rh
t ber 201 N e Dea Re s M e os M r
4
w
l que t m , .

He i z c l t 201 r venue f e ss inc e bl ' a poi e outt tOpe a ha
nrquc aled he
4 e
or ca t f r di e' nd ntd
i
ha
npe k d
ne rme any ofiss esf ec ss
ve t
t al or a t.

M r Barl sg d t M a J Q2,J y,Aug t a Se embe 201 compla e
. cay ine he y, une,
ul
us, nd pt r 4
inc
c tfc ts( .Exs 37,38,39,42,50)a t 201 Audie Fi ncas( .Ex.50) Hec e
eriiae Tr .
nd he 3
td na il Tr
. ruls
a gues t t s m e w e e no i c pla e wih GA AP. A s no e a
r
ha o
r t n om i nc t
t d bove and i t tndi of
n he i ngs

f c ,lc udet tM r Ba cay be ived t flngst beGAAP compla a ha no r as t
a t oncl ha . r l
le
he ii o
int nd d
e on o
bele ot r i e.
i ve he w s

47

As 1 s e i,He cul 'onl lgii ae c
e t r es
y e tm t ompli i t tmi oft r r alza i t t
ant s he i ng
hei e i ton ha
addii lr ve de nde upo aci to oft lc ns by e us s H er ul s alegest t
tona e nue pe d n tvai n he ie es
nd er .
c e l
ha
snc t 225, pr pai lc ns s woul ne t be a tva e bef e Ope ak ge r td
i e he
000 e d i e e
d cd o
ci t d or
npe
ne ae
ad tonals l sr ve fom AT&T, a dj t3 5 lc n e weea tv td a o Oco e 2 4
dii
a e e nue r
n us 3 ie s s r ci ae s f t b r 01 ,

M r Baea sfn n ilp oe t nsb y n Oco r2 4 wee u r a o a e a d n tma e i
. r ly' a ca rjci e o d tbe 01 r n e s n bl n o d n
o
good f ih.
at

Un o b e l M r Baca ' p oe to sweeo tmitc M r Ba ca c e il e pli e
d u tdy, . r ly s rj cin r pi si. . rly rdb y x an d

wh het o g th sprj cin weer a o be Ov rt milo lc ns sha b e a p o d
y h u h i oe to s r e s na l. e wo l n ie e d e n p r ve .
i
AT&T ha huge entr ie c t e s wih ma t a ofe oye , a i onl a f w of
d
e prs usom r t ny hous nds
mpl es nd f y e
t e c t r s ce suly enc ag t rpeo e t us t pr t t ac i tons woul
hos usome s uc s f l
our ed hei
pl o e he oduc , he tva i
d
r pi y i r e.Het
a dl nc eas
hough t Bl kbe r e renc woul ber plc t .
t he ac ry xpe i e
d
e i a ed
I
mpora l He c e kne bot t t AT&T ha pr pad f t lc ns ,a t t
tnty, r uls
w
h ha
d e i or he i e es nd ha
a tva i we e s rsngl l w . He c e r og ze a i ntfe asa rs i t Oc 201
c i tons r up ii y o
r uls ec ni d nd de ii d
ik n he t 4
NDIM t tAT&T woul no c i t buy s t r t twa no bei us by isc t
; ha
d t ontnue o
ofwa e ha s t ng ed t usomer .
s
He c esknew t tOpe ak wastyi t s ve t pr e a t tBlckbe r ha a be tr
r ul
ha
npe
r ng o ol he obl m nd ha a
ry d
te
a tva i r e. Bu Openpea is fhad bot 1 w vii lt a ltl a lt t s vet pr c
c i ton at
t
k tel
h o sbiiy nd ite biiy o ol he oblm
be us i wa t e oye ofAT&T' cusome s who nee d t a fr ai l aci t t
ca e t s he mpl es
s t r
de o fim tvey tvae he
s l r Openpea coul notdie ty c r whehe a AT& T c t
ofwa e.
k
d
r c l ontol t r n
usomers h asHom eDe
uc
pot
w o d enc age is peopl t us t pr
ul
our
t
e o e he oduc . I c d onl ty t m ake a tva i e i r t
t t oul
y r o
c i ton ase o
a om pls
cc
ih.

I do not s a e de e t t s r r ly ti d t hi t pr e ,a He c e
ee ny vi nc ha 4 .Ba ca re o de he oblm nd r uls
unde sood t t t 1 a tva i m i be t n Ac les he ' t a pr pe tve s e o
rt
ha he ow c i tons ght
s
a
hil
el' o
os c i al r
val ton. Sync onos was a e t quikl dic r t pr e i is due dii nc
ua i
hr s
bl o
c y s e n he oblm n t
lge e.

48

Unf t t l t m oment of r koni ca e s
oruna ey, he
ec ng m oone t n et r Openpe k or Her ul
r ha ihe
a
c es
e ce
xpe t d.

l a y e e t He c lsdd n tr l u o Mr Ba ca ' rv n p oe o . He c e
n n v n, rue i o ey p n . r ly s e e ue r j dins ruls
ma t l nsbas d upon t i nt r ievaue't tOpe
de he oa
e
he s e prs l ' ha
e
npea c d brng i i a uied i t
k oul i n f cq r n he
f ur Uli t l He c es s
ut e. tma e y, r ul ought t gi is l t be t opporuniy t r c
o ve t ef he s
t t o e over t f
he unds

ad nc d i t i ta 201 l n.
va e n he niil 2 oa
J
udgmen i r nde e i f vor of a 1 Def nda s a t Count 1 a 4 f neglg nt
t s e rd n a
l
e nt s o
s nd or
ie
m ir pr entton a Count 2 a 5 f rf a ulntmir pr s ntton.
se es a i nd
s nd o r ud e
se e e ai
b. Ci lCons r
vi
piacv

Theee nt ofacvi c pia ae:()aco pia ybewee t ormor pa tes (
lme s
i l ons rcy r a
ns r c t n wo
e ri , b)
t doa unlwf a tort do alwf a tbyunlwf me ns ()t doi ofs ove ta ti
o n a ul c o
a ul c
a ul a , c he ng ome r c n

frh rn e o te c n pia y,a d ( )d ma e t panifa a r s l o t e a t p ro me
u tea c f h o s rc n d a g o litf s e ut f h cs e fr d
purua t t cons rcy. Wale sv.Bl ns p,931 So.2d 1 1 ( a.5hDCA 2006
s nt o he
pia
tr
anke hi
37, 40 F1 t
)

(iai omitd) An acina e co pia y rquie an a tona e underyi t torwr
ctton te .
to bl ns rc e rs ci bl
l ng or
ong.
Wrghtv Yur o,446 So.2d 11 11 ( a.5t DCA 1 . lhave deemi d t tno
i . k
62, 65 F1 h
984)
tr ne ha
De enda i la e f ne i nt or f a ulnt mir pr e a i on a of He c e ' c am s
f nt s ibl or glge
r ud e
se es nt ton
ny
r ul s l i .

Ac o dn l te ei n u eli ç n a u a t' rta 'l c ( o e b u a u me n 'o
c r igy,h r s o nd ryng s lwf l c'o s wf a t d n ) y nlwf l a s' n
u
l u
whi t bas a c vi c pia y cai agans a Def nda .J
ch o e i l ons r c l m
i t ny
e nt udgmenti r nde ed i fvorof
se r n a
alDefnda sast Count 3 a 6 f ci lc piac
l e nt
o
s nd or vi ons r y.
I
V.

CONCLUSI
ON
The Cour fnds i f vor of Def nda s a t a1 Count a s t d i H e cul 'Com pl i .
ti
n a
e nt s o 1
s s ere n r es
a nt

He cul s ha f ie t de ons r t t t a oft D e e
r e s a l d o m t a e ha ny
he f ndan s kne or ha r s n t know t t
t
w
d ea o o
ha

a of t r saeme s we e f s . He c es a s f ie t pr t ti r le on t a lged
ny
hei t t nt r ale
r ul lo a ld o ove ha t e id
he le

m isae e s J
s t tm nt . udgmenti t r or r nde e i f vo ofDef nda sa t Count 1 2,4,a 5.
s he ef e e r d n a r
e nt s o
s ,
nd
49

Si He c e ha f l t e t bls t tDe e
nce r ul s s aied o sa ih ha f ndant co mit d a unde l ng unl wf ac ora
s m te n
ryi
a ul t
l wf ac done by unlwf m e ns Her ul ' cli f ci l c pia y a s f l Thus
a ul t
a ul a , c es a ms or vi ons r c lo ai.
,

j d me t srn ee i fvo o De e d n sa t Co n s3a 6 Ac o d n l,ti
u g n i e d r d n a r f fn a t s o u t nd . c r i gy i s
ORDERED AND ADJUDGED t a fn lud me ti e tr di fv ro Dee d nso
h t i a j g n s n ee n a o f f n a t n
a lofPl ntf scl m s
l
ai if ai .

DONE AND ORDERED i Chmbr tWetP l Bec,Foia ti/W a o
n a esa s am ah lrd,hs
yf
J nua y,201
a r
8.

D
LD M .M I LEBRO O K S
DD
UNI
TED STA TES D I
STRI J DG E
CT U
Co est Couns lofRec d
pi o:
e
or