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Final Award


This is a dispute between highly sophisticated business persons and entities. EB Safe, LLC ("EB") and Mark P. Hurley ("Hurley") entered into the Third Amended and Restated Limited Liability Company Operating Agreement of Fiduciary Network, LLC, dated as of July 1, 2016 (the "LLC Agreement"). EB and Hurley are Members of Fiduciary Network, LLC ("FN"). EB is a subsidiary of Emigrant Savings Bank, a bank wholly owned by the Howard Milstein family (MH Ex. 2, at Hurley 0012975), and the country's largest privately-owned, family-run bank. One of EB's representatives on the FN Board is Barry Friedberg, a prominent investment banker, who serves on the Board of Directors of Emigrant Bank, and formerly served as a member of the Executive Committee at Merrill Lynch and as head of its Global Investment Banking Division. FN's Chief Executive Officer, Mark Hurley, one of the co-founders of FN, is a graduate of the US Military Academy at West Point, as well as an M.B.A. recipient from Stanford Graduate School of Business, following which he held positions at Goldman Sachs and Merrill Lynch, before entering into business as an entrepreneur.


The LLC Agreement provides that EB may acquire the equity interests in FN owned by Hurley (and other members of FN management) pursuant to a Call Right on or after December 1, 2017 (LLC Agreement, Section 7.4(a)). Moreover, EB may exercise its Call Right before that date if and only if Hurley first triggers a sale of FN pursuant to his Forced Sale Right. (LLC Agreement, Section 7.3(a) and (b)). The LLC Agreement provides that Hurley may exercise this Forced Sale Right on December 1, 2015 and on each annual anniversary thereafter (LLC Agreement, Section 7.3(a)). If Hurley exercises his Forced Sale Right and EB elects not to exercise its Call Right, EB retains a Right of First Refusal ("ROFR"), the exercise of which would require EB to pay a substantial break-up fee to the highest bidder in the sale process (LLC Agreement, Section 7.3).
In March through December 2016, EB and Hurley engaged in a series of discussions and acts involving invocation of the Forced Sale and Call Right processes that led directly to this dispute.


On January 4, 2017, pursuant to Section 10.4 of the LLC Agreement,1 EB demanded arbitration with regard to the events in 2016. Its "General Statement of Claim" stated:

"This action involves Fiduciary Network, LLC ('FN’), a company involved in making long-term, cash flow participating, convertible loans to Independent Financial Advisors throughout the United States. Pursuant to Section 7.3 of the Agreement, the Members of FN agreed to a procedure whereby Respondent could force a sale of FN subject to certain limitations. Pursuant to Section 7.4 of the Agreement, one of those limitations was that EB has a 'Call Right’ whereby it may compel Respondent to sell its equity interest in FN to EB under a formula set forth in Section 7.5 of the Agreement. A dispute has arisen as to the effectiveness of Respondent’s 'Forced Sale Notice’ and EB’s exercise of its Call Right."2

The "Remedy Sought" was as follows:

"EB hereby seeks a declaration from the Tribunal that Respondent failed to initiate the sale process in compliance with the requirements of the Agreement; that in connection with his purported exercise of the Forced Sale Notice, Respondent withheld and misrepresented material information; and, in the event Respondent effectively exercised his Forced Sale Right, EB properly exercised its Call Right. Pursuant to Section 10.4 of the Agreement, EB further requests that the Tribunal’s fees and any associated costs of this arbitration be assessed against Respondent."

On February 6, 2017, Hurley submitted his Notice of Defense, Answer and Counterclaim. Hurley denied "each and every allegation in the Arbitration Notice, which fails to provide any details regarding the nature of EB Safe’s claims against Mr. Hurley, except that Mr. Hurley admits that the contract dispute is subject to resolution through arbitration." Hurley also asserted detailed counterclaims. First, Hurley asserted that EB had waived its Call Right (under Section 7.4). In particular, Hurley relied on a discussion that he had had with Friedberg on March 31, 2016, and on an e-mail from Friedberg on November 22, 2016. This e-mail, entitled "Trigger", provides:

"Knowing urgency of this answer to you, I am emailing as I may not be able to reach you today. We would not exercise option if you trigger. I will do my best to reach you later." (MH Ex. 97)

Second, he sought "damages in an amount to be determined." Third, he sought the costs and expenses of this arbitration, including attorneys’ fees, pursuant to Section 10.4 of the LLC Agreement.

On February 15, 2017, EB submitted an Amended Notice of Arbitration. The only substantive charge was that the Amended Notice sought "damages in an amount to be determined resulting from Hurley’s improper conduct."3
On March 3, 2017, EB submitted its Notice of Defense and Reply. EB alleged that "Hurley has engaged in a well-orchestrated wrongful scheme to steal from EB" its Call Right (p. 1):

(a) Hurley pursued "a management led buy-out," although the "Agreement provides for the sale of the Company in its entirety" (P. 3);

(b) Hurley prepared "an extensive marketing document complete with financial projections" and "a purported equity value for [FN] of $135-170 million" (p. 3);

(c) "Hurley likewise failed to share the discussions he had with sovereign wealth funds, instead advising Friedberg that there was little interest in [FN] due to its unusual capital structure" (p. 3);

(d) When "Hurley informed Friedberg that be intended to exercise his Forced Sale right," Friedberg "requested that Hurley have [FN] management calculate EB’s Call Right price." Hurley "provided EB with a calculation that EB only later discovered was materially overstated," with the result that "EB erroneously believed that the right of first refusal protected EB’s ability to acquire [FN] at a price lower than the Call Right" (p. 3);

(e) Hurley "informed EB that, should it exercise its Call Right, the Management Team would not stay with [FN]" (p. 3);

(f) "Based on the foregoing material misrepresentations, Friedberg sent Hurley [the November 22, 2016 Waiver], in which he stated that EB did not intend to exercise its Call Right. At that time, Hurley had wrongfully led EB to believe that the Management Team would quit and had provided [EB] with an inaccurate and inflated Call Right price" (p. 3);

(g) When EB met with the Management Team, "each expressed a willingness to remain with [FN], subject to reasonable compensation packages, should EB exercise its Call Right" (pp. 3-4);

(h) "Friedberg sent Hurley an email stating that EB did not intend to exercise its Call Right based on Hurley’s material misrepresentations and omissions concerning third-party interest in [FN] and Management’s willingness to remain with [FN] should EB exercise its Call Right and the Call Right price" (pp. 4-5);

(i) "Hurley informed [Friedberg] that he was continuing to communicate with sovereign wealth funds but was not having much success" (p. 8); and

(j) Friedberg "suggested names of certain sovereign wealth funds to Hurley in order that he might make preliminary inquiries as to whether they would have any interest in acquiring [FN]" (p.8).

On March 7, 2017, Hurley submitted his Notice of Defense and Reply. Hurley denied EB’s allegations and incorporated his February 6, 2017 submission.
On March 17, 2017, the Panel had a telephone conference with the parties, as a result of letter submissions by Hurley stressing the need for an expedited hearing on the ownership of FN.
On March 31, 2017, the Panel held the Preliminary Conference at the offices of EB’s counsel. Friedberg explained EB’s contentions to the Panel, and counsel for the parties argued their respective views of the case.
On April 14, 2017, the Panel signed a stipulated Scheduling Order. Pursuant to the Scheduling Order:

(a) The parties conducted discovery of each other and served subpoenas on various non-parties;4

(b) The parties served pre-hearing memoranda on May 10, 2017;

(c) The hearing on the merits was held on May 15, 2017 and June 9-10, 2017. Four people testified - - Friedberg; Alain Lebec, an EB consultant; Hurley; and Yvonne Kanner, the president and chief operating officer of FN;

(d) The parties served post-hearing memoranda on July 6, 2017; and

(e) The date for the Panel’s written statement of findings and conclusions (from Section 10.4 of the Agreement) was changed to August 7, 2017.

On June 9, 2017, the Panel entered a Stipulated Order Regarding Withdrawal of Damages Claims.5 The sole issue before the Panel thus relates to the effectiveness of the Call Right and of the Forced Sale Notice.6
In mid-July 2017, each Party provided the Panel with a request for expenses pursuant to Section 10.4. Each Party brought its request up to date in early August 2017. Hurley’s submissions sought a total of $2,222,397.7
On July 20, 2017, the Panel conducted a telephonic hearing to ask various questions of the parties.
On July 27, 2017, EB withdrew "the following requests made in the decretal paragraph of its Post-Hearing Memorandum: (i) the request to install shadow management (Paragraph (h)) and (ii) the request for a declaration that EB may disclose the particulars of the proceedings and that it may [make] any legally required disclosures (Paragraph (k)(iii))."
This Award consists of the following sections:

(a) The November 22, 2016 Waiver (Section I);

(b) The Parties’ Dealings in 2016 (Section II);

(c) Analysis of EB’s Claims (Section III); and

(d) Our Decision (Section IV).


We start our analysis with the November 22, 2016 email from Friedberg to Hurley, to determine whether that email constituted a waiver of EB's right to submit its Call Right Notice. For reasons provided below, we conclude that the November 22, 2016 email does constitute such a waiver.
EB is correct that Section 10.11 of the LLC Agreement requires that any waiver be in writing (EB Post-Hearing Memorandum at p. 5). Section 10.11 provides that any waiver must be "contained in a written notice given to the party claiming such waiver has occurred." The November 22, 2016 e-mail is such a writing. We reject EB’s argument that the e-mail fails to be a proper notice under Section 10.12. That Section provides that "any notice ... permitted under this Agreement shall be sufficiently given to a person if in writing and shall become effective when... received by email" at an e-mail address "set forth below." We do not accept EB’s assertion that Hurley’s not "designat[ing] an email address" means that he "did not authorize EB ... to serve him such notices by email" (EB Post-Hearing Memorandum at pp. 5-6). The evidence is clear that Friedberg "often use[d] e-mail for important Fiduciary Network matters." (Tr. 175). Moreover, there is no doubt that Hurley received the November 22, 2016 Waiver (Friedberg, Tr. 178; MH Ex. 97).
We turn now to the words of the email, which, as stated above, provides as follows:

"Knowing urgency of this answer to you, I am emailing as I may not be able to reach you today. We would not exercise option if you trigger. I will do my best to reach you later." (MH Ex. 97) (emphasis added).

EB recognizes that:

"After meeting with Mr. Milstein, Mr. Friedberg tried to reach Mr, Hurley by phone to tell him that EB did not intend to exercise its Call Right... When Mr. Friedberg failed to reach Mr. Hurley, he sent him the November 22 email...." (EB Post-Hearing Memorandum at p. 14).

EB recognizes further that the "urgency" in the email "was due to the upcoming Thanksgiving holiday and Mr. Hurley’s need to make a decision as to whether to trigger his Forced Sale Right by December 1." (EB Post-Hearing Memorandum, p. 14). We conclude that EB fully intended for Hurley to rely on his e-mail in connection with the December 1 Forced Sale Right.

But we do not credit EB’s argument that this email was "only an expression of intent" (EB Post-Hearing Memorandum at p. 1), that "the email was no more than an expression of EB’s intention; it was not a waiver of the Call Right." (EB Post-Hearing Memorandum at p. 14).8
Friedberg claims that "we didn’t say we will not exercise our call option" (Tr. 89):

"He was asking what our intention was. And I said we would not exercise our call option."

"We never said we would waive our call option. And we had a period of time after he exercised his for sale trigger right that we were still allowed to exercise our call option." (Tr. 89-90).

When pressed further whether he was "content to tell [Hurley] that you would not exercise if he did that," Friedberg answered:

"Yes, we told him we would not. We didn’t say we hereby waive it. We simply said we would not."

"And he chose not to call me up and ask what that meant." (Tr. 91).

And when he was asked "when you told Mr. Hurley you would not exercise, what did you mean?", he answered:

"I meant that based on the information we had at that time, and the information available to us, including what his company had - what we had received from him on the option price and the market feedback he had given us, we didn’t intend to exercise. We still had 40 days to decide to exercise."

"CHAIRMAN MILLSON: I don’t understand what you just said there.

"If you say you’re not going to exercise, then how do you have 40 days to exercise?"

"THE WITNESS: We said we would not exercise. We didn’t say we will not exercise and waive our right to exercise."

"CHAIRMAN MILLSON: So will not exercise when??

"MR. CHERNOV: Can you explain, Mr. Friedberg, how the 40 days works, with the for sale provision and the call right?."

"THE WITNESS: After he exercises his for sale right, we have 40 days to decide whether or not to exercise our call right."

"Q. Mr. Friedberg, could you under the LLC agreement, invoke your call right in December or November 2016 before Mr. Hurley invoked his for sale right?"

"A. No. We could not exercise our call right under the LLC agreement until December 1, 2017."

"CHAIRMAN MILLSON: But you could waive it before then?"

"THE WITNESS: We could have waived it."

"CHAIRMAN MILLSON: So what did you mean you had 40 days after he exercised his call right to exercise your call right if you said we would waive our right?"

"THE WITNESS: Well, I meant what I said. But let me give an example. Let’s assume that subsequent to this happening, somebody walked in and made an unsolicited bid for the equity of the company for 150 million dollars three days later. We would have exercised our call right. Something can change."

"This happens in the takeover world all the time. People shake hands on a deal, they intend to something, and then sometimes a bid comes in that upsets the marketplace." (Tr. 98-100).

On balance, we do not find this testimony persuasive. We conclude, based on the totality of the evidence presented on the issue, that this email to Hurley reflected EB’s intent to waive its Call Right, and was intended for Hurley’s reliance.
Accordingly, we find that there was an "intent to waive," as required by Delaware law.


A. The "Toxic Relationship" between EB and FN Management

Friedberg made clear his point of view, both in his presentation at the Preliminary Conference and in his testimony, that Hurley and FN management desired to be paid more money, to be free of the Call Right, and were annoyingly persistent in their requests for more compensation and for more independence from EB.9 This irritation was presumably increased by EB’s awareness that it was dependent on FN management - EB preferred to own FN with the management (Friedberg, Tr. 225); Friedberg told Lebec and Jesse Watson of Virgo, another investor in FN, in January 2016 that selling the company without management was a "serious issue" (MH Ex. 21; Friedberg, Tr. 229-30); and EB’s preference was concededly "for management to remain with the Company." (EB Post-Hearing Memorandum at p. 4).
FN management, for its part, felt underpaid and under-appreciated. Thus, Kanner testified that the FN management team "really hasn’t [had] a relationship" with EB - - "from the very beginning, there was a disconnect." (Tr. 1030-31). Kanner described the FN management team’s compensation issues with EB, which included being dismissed in 2008 as an Emigrant Bank cost-saving issue (Tr. 1033) and a 2013 dispute when the FN management team was "about to walk out", until "Friedberg came down [to FN] and met with each of us and our compensation was adjusted." (Tr. 1035).
Friedberg called Kanner "once" in 11 years, over this compensation issue (Tr. 1071-72). She testified further:

"In the 11 years since the beginning of [FN], I have been to the bank three times. I have met Mr. Milstein twice. I have met Mr. Friedberg in person three times, Mr. Lebec twice and Mr. Staudt once." (Tr. 1032).10

B. The Increased Tension in Early 2016

Following the failure of the management team to receive a raise after 2013 (Tr. 1038), feelings were running high when another dispute with EB arose in "early 2016" (Tr. 1039). The upshot of an EB proposal was that Kanner had "probably the worst conversation ... with Mark Hurley since I have known him" (Tr. 1038-39) - - she was "done" with FN and Hurley "had to talk [her] off the ledge." (Tr. 1039). FN management was angry because of a "very negative" compensation proposal; FN management was convinced that Hurley "was being a patsy, that [EB] was going to screw them and that [Hurley] had kind of led them down the primrose path." (Hurley, Tr. 781-82). Hurley felt that FN management was "very close to the same point... where they walked out three years earlier." (Tr. 783). Kanner agreed with Hurley’s January 4, 2016 email to Watson of Virgo that FN management "has no interest in continuing at FN under any circumstance if we sell our equity." (MH Ex. 20; Kanner, Tr. 1060). Kanner’s view was that "we need to separate- - it was a "toxic relationship." (Tr. 1040). This was her view and the view of the rest of the FN management (Tr. 1041). In Hurley’s words, he told Friedberg that FN management was "less enthusiastic about working for Emigrant than I was, and I was not at all enthused. If anything, they were much angrier." (Hurley, Tr. 785).
Hurley talked Kanner "off the ledge" by telling her that he had spoken to Friedberg "and had told him it was time to separate." (Kanner, Tr. 1039). Hurley reported to Kanner that Friedberg had said that EB "had zero interest in owning the firm" (Tr. 1041) and that Hurley should "relax and that [Friedberg] would even put it in writing that they were not going to exercise" the Call Right (Kanner, Tr. 1042).
On February 25, 2016, Hurley informed Friedberg, Lebec and Watson that he believed that "things have calmed down a bit" with FN management and that he had assured management that he was "doing everything [he could] to put together a management-led buyout proposed to put in front of Virgo and Milstein." (MH Ex. 35).

C. The March 31, 2016 Friedberg-Hurley Call

On March 31, 2016, Hurley and Friedberg had a telephone conversation that lasted 52 minutes (Hurley, Tr. 791).
Hurley described the conversation as follows:

"... I gave [Friedberg] an ultimatum. ... [I]t concerned what was going to happen with the [Call Right].... I was in an impossible predicament. My partners were getting ready to waltz out. The only way I was going to keep my partners on is if they were convinced that Emigrant wasn’t going to exercise the option, and we were going to line up some potential bidders for a sale process that would commence [after] December 1st... ." (Tr. 793).

Hurley testified further:

"I told him he had to make a decision [on the Call Right] and ... I was not going to risk my credibility ...." (Tr. 794).

And that it was "decision time" because if "they were unwilling to commit to getting rid of the option, I had to assume they were going to exercise it," at which point there would be a "train wreck" because his colleagues would leave (Tr. 795-96).

Hurley claims that Friedberg told him "to calm down and relax and that they had zero interest in exercising the option, that Howard Milstein doesn’t pay 14 times for anything, much less 14 times for anything without management." (Tr. 797). Hurley testified further:

"Then almost impulsively, there was a pause and almost impulsively be said, 'Look, we are not going to exercise this option. You come to me before it’s time to actually trigger and I will put it in writing. Quit worrying about this.’" (Tr. 797; emphasis added).

Hurley testified that Friedberg encouraged him to work with Watson to start lining up prospective investors, especially sovereign wealth funds, which had a very long learning process (Tr. 797).

Although Friedberg denies that there was an ultimatum (Tr. 1115) and any commitment to waive, let alone in writing (Tr. 1116), we note the following points.
First, although Friedberg was unclear whether the Call Right was discussed at all on the March 31, 2016 call (Tr. 72), there is not a real dispute over Hurley’s assertion that Friedberg told him on March 31, 2016 that "Howard Milstein doesn’t pay 14 times for anything, much less 14 times for anything [without] management" (Tr. 793, 797). Friedberg concedes that he told Hurley on several occasions that exercising the Call Right at a 14 times multiple was "unattractive" (Friedberg, Tr. 92, 102, 105, 1126): Moreover, Friedberg further claims that Hurley "probably asked .. once a month for the last three years if the bank would exercise its call right"11 and that he answered consistently that "we probably wouldn’t" (Tr. 102), because "based on the market as it exists today, 14 is too high a multiple" (Tr. 105). According to Friedberg, EB had told Hurley "over the course of the year ... that the formula of 14 times ... was a high number for the purchase of that interest" and that "the market was more likely award 10 to 12 times." (Tr. 92). Indeed, EB asserts that on March 31, 2016 "Friedberg did no more than state that EB did not intend to exercise the Call Right at that time." (EB Post-Hearing Memorandum at p. 2).
Second, according to Friedberg, Hurley "thought that the most logical potential bidders might be Sovereign Wealth Funds," which were "slower to act than other potential competitors," and he "wanted to have a chance to educate them about the business" (Tr. 23). Friedberg agreed with the characterization of those funds (MH Ex. 57). Moreover, in the summer of 2016, Hurley told Friedberg that he was expanding this effort beyond sovereign wealth funds to include large family funds and look into debt funding (Friedberg, Tr. 254-55).
Third, on March 31, 2016 Friedberg authorized Hurley "to contact potential bidders" to develop their interest in acquiring FN (EB Defense at p. 7). Friedberg and Lebec helped Hurley in identifying sovereign wealth funds to speak to (MH Ex. 59). Moreover, on April 3, 2016, Hurley asked Lebec when was a good time to discuss sovereign wealth funds (MH Ex. 56). Friedberg had encouraged Hurley "to get going on this." (Hurley, Tr. 802).
Fourth, Friedberg concedes that he was informed by Hurley in early 2016 that some of FN management was going to leave, but he did not "take that seriously" because their team members were "very loyal" to Hurley and it would have been economically "irrational for them to do so." (Tr. 1114, 1116).
Fifth, Friedberg understood that an investment by sovereign wealth funds "conceptually" was likely to involve FN management staying on (Tr. 1129):

"ARBITRATOR MOXLEY ... So the question ... is whether implicit in the notion that Mr. Hurley is going out there to talk to sovereign wealth funds in the notion that this likely will include the piece where the management stays on ... "

"THE WITNESS: Yes, I think that that is a reasonable conclusion, that any sovereign wealth fund that were to buy this company would expect management to stay on." (Tr. 1129).

Sixth. Friedberg was asked a series of questions about his expectation on what Hurley would say about EB’s Call Right. Thus, he was asked about the ROFR:

"ARBITRATOR MOXLEY: ... I understand that because you have a right of first refusal... you have ... the break-up fee, right? Otherwise, why would anybody ever participate in the process? ... But this is kind of a consolation prize."

"THE WITNESS: It is a fair way to look at it." (Tr. 1123-24).

This was contrasted with the Call Right:

"ARBITRATOR MOXLEY ... Then you don’t have any break-up fee,... and it means that anybody he’s talked to in the interim he wasted their time and he put his reputation at risk because he discussed something with them that wouldn’t happen.

"So it seems logical that he wouldn’t want to do it if [EB] were going to exercise [its] right or at least without telling people ... this was a risk . ..."

"THE WITNESS: That’s right. Logical that he would have told people that we are confronted with a call option, but... it might come to market." (Tr. 1124-25).

Seventh, on April 2, 2016, Friedberg informed Lebec that Hurley had told him that "he was inclined to trigger this [D]ec. 1"; contacting the sovereign wealth funds was probably Virgo’s idea; there was no prejudice to EB because "we can just say no"; and this would "keep Mark and team off our case for 6 months" (MH Ex. 57; Friedberg, Tr. 71-72).
Based on the totality of the evidence presented, we conclude that the statements by Friedberg to Hurley in their extended March 31, 2016 conversation did not rise to the level of a waiver by EB of its Call Right or as a basis for estopping EB from exercising the Call Right. Those statements were too general to manifest the intention by EB to waive the Call Right or to serve as the basis of an estoppel. Bolstering this conclusion is that Hurley did not at the time ask Friedberg to state in writing that EB would not exercise the Call Right.
We understand Hurley’s contention that he would not have engaged in the marketing effort to sovereign wealth funds and wealthy family investment offices in 2016 had he not believed EB would let its Call Right go. However, we conclude Hurley took a chance there. Friedberg had repeatedly told him over the years and repeated in the March 31, 2016 call that Milstein would not pay a 14 times EBITDA price for the Call Right and Hurley decided to rely on this, notwithstanding the absence of an actual waiver of the Call Right by EB. Believing that EB would not exercise its Call Right and relying, as he did, on that belief, do not constitute a basis for finding that EB waived its right to exercise its Call Right at that point of time. However, Hurley’s justified belief that Friedberg had made EB’s intentions clear in the March 31, 2016 telephone call, even in the absence of an actual waiver of the Call Right by EB, helps inform our conclusion that a true waiver came with the November 22, 2016 email.

D. The FN Management Outreach

Much of the evidence at the hearing and in the various pre- and post-hearing memoranda on the events between March 31, 2016 and November 22, 2016 is not relevant to the narrow issue of whether the November 22, 2016 Waiver should be vitiated by EB’s alleged lack of knowledge of all the material facts.12
We turn to the relevant evidence.
Friedberg had "[m]aybe half a dozen" conversations with Hurley about the outreach to potential investors (Tr. 75). These occurred "[m]aybe once a month;" he "would call and say, I want to give you some update." (Tr. 78). Hurley confirmed that he had conversations "regularly" with Friedberg about these contacts:

"Every three to four weeks we’d have a call." (Tr. 858). These calls were initiated by Hurley (Hurley Tr. 860; Friedberg Tr. 78).

Friedberg testified on the content of the calls as follows:

"The essence of those calls is that owing to the complex capital structure of Fiduciary Network, he was having difficulty communicating with the various institutions with whom he was having conversations."

"That these institutions were organized with debt professionals and with equity professionals. And each of them was looking at it from their own perspective. And there was little ability to integrate those two issues out there."

"The other, at one point in time, we also had a conversation that he was having difficult finding debt financing at a lower cost. People that would provide him with debt financing at a lower cost than we were providing. And that he intended to discuss securitization with one advisor."

"And he later reported back to me that there was not enough debt in FN to securitize it." (Tr. 76-77).

Hurley testified likewise:

"I explained what we were working on. I made it... clear we were talking to sovereign funds, but debt was a problematic issue .... And that we were talking to the families ... Most of our conversations focused on the debt because that was the big element." (Tr. 859).

Friedberg never asked the names of the parties Hurley was meeting with (Hurley Tr. 859) or asked for details of the meetings (Hurley Tr. 860).
We have reviewed the record evidence. During the months between March 31, 2016 and November 22, 2016 Hurley had preliminary discussions with more than a dozen potential bidders but, aside from three entities -Invus. Mubadala, and ADIC -none, as of the hearing, had requested any follow-up or provided meaningful indications of interest in buying out EB or acquiring FN. As to the three entities that were prepared to go to the next level, not even they had yet provided specific interest in assisting FN to finance the $1 billion in debt. In any event, EB, which was on full notice that Hurley was pitching FN to sovereign wealth funds, did not ask for any details of such efforts.

E. The Position in August

The parties have been engaged in a toxic relationship for many years. It is, therefore, not surprising that they disagree about many details of their relationship. We note here -- and at a later point -- pertinent observations on this dysfunctional relationship by Watson of Virgo, the independent view by a third party.
On August 10, 2016, Hurley sent Friedberg a note saying that he was "working very hard to get a great outcome with FN for all constituencies." (MH Ex. 72). In forwarding this e-mail to Watson, Friedberg informed him that "we have been working with Mark [Hurley] on ways to exit sooner rather than later." (MH Ex. 72). This e-mail was also sent to Milstein and Lebec.
Watson reported to Hurley on this e-mail chain as follows:

"Anyway they [EB wants] to sell and exit and so do you. So it’s a short term issue." (MH Ex. 74).

Hurley considered Watson’s e-mail as being consistent with what Friedberg had said on March 31, 2016 about EB’s intent (Hurley, Tr. 861).

F. The Call Purchase Price

In November 2016, when Hurley said that he was thinking of exercising the Forced Sale Right, Friedberg asked for a calculation of the exercise price in the Call Right (Tr. 80).
On November 16, 2016, Ms. Kelly Mills, FN's CFO, sent Friedberg and Lebec an e-mail, stating:

"Mark [Hurley] asked me to calculate what the EB Option Exercise Price would be based on our current estimates. (MH Ex. 91; emphasis added).

She stated further:

"As you can all see in my analysis (attached) it is estimated to be approximately $27.5 million."

Since the latest finalized financials as of November 16, 2016 were for the period ending June 30, 2016, FN had to use estimates to arrive at the exercise price. Lebec knew and conceded that the November 16 calculation by Ms. Mills was an estimate:

"[W]e all agree it is an estimate. No one knew what the numbers were. It was an estimate with respect to September. We didn’t have numbers for September either." (Tr. 590: see also Tr. 478).

Not only did Mills use the word "estimate" four times, but she added:

"Please let me know if you have any questions." (MH Ex. 91).

Friedberg did not look at Mills’ calculation "because I couldn’t understand it" (Tr. 80). Instead he "gave it to Alan Lebec" and "asked him to give me his conclusions on what this said" (Tr. 80). The format of Mills’ calculation was a standard one within FN - - it "was very similar to the process we went through every time Mr. Hurley took advances under his liquidity line" (Tr. 80) and Lebec "was the one who oversaw that for [EB]" (Tr. 81).
Not only did Lebec give Friedberg information on the Call Right before he received Mills’ analysis (see e.g., MH Ex. 92), but he later informed Friedberg that he had "looked at [Mills’] analysis":

"Should EB exercise the option upon MH’s trigger of the Forced Sale Right, it would be based on the 7 quarters ending Q3 2016, not Q4 as estimated by Kelly. Overall valuation would be about $2.5 million lower, so exercise price should be just about $27 million. Still, the 14 times EBITDA multiple is way above current market, even if it is one of trailing 7 quarters, especially considering how much FN capitalizes in loan origination costs." (MH Ex. 93).

Lebec, who is "quite familiar with the option price formula" (Tr. 576), informed Friedberg on November 16, 2016 that his own estimate was $500,000 lower than the FN calculation (MH Exs. 92-93). Lebec reported to Friedberg that Mills’ calculation was an "exercise price" of $27.5 million and he "did his own calculating and came up with 27" (Friedberg, Tr. 81). Friedberg "trusted his numbers that he gave me." (Tr. 81).

EB never contacted or otherwise followed up with Mills regarding her analysis. Friedberg confirmed that he "never directed Lebec to call Ms. Mills" regarding her estimate of the Call Purchase Price (Tr. 280; see also Tr. 174). Lebec confirmed that he did not contact Mills about her Call Purchase Price valuation (Tr. 586).
Mills’ estimate was a good faith estimate of the Call Purchase Price. Friedberg admitted that it "was not a big gap" between Mills’ estimate and Lebec’s analysis of Mills’ estimate (Tr. 122). Friedberg admitted that "one could reasonably argue" that calculation of the option price was a "misunderstanding." (Tr. 347). Lebec testified that he had "no reason to doubt that [Mills] did it the way she should have done it. I had no reason to — and I am not - I was not disputing that. My point was she used December, and since both September and December numbers are still estimates or projections, it doesn’t matter. I mean, it’s a projection." (Tr. 478).13
Lebec admitted that "[a]n estimate is just another estimate. I wasn’t concerned about what she was doing. I didn’t think there was anything right, wrong or indifferent. It was just she had a number, but I thought it was a different number." (Tr. 703). In early-mid November 2016, EB had the same access to the same data as did FN regarding calculation of the Call Purchase Price. Lebec admitted that he "didn't have the actual results for September in November" and "neither did Ms. Mills." (Tr. 591). Lebec testified that Ms. Mills’ analysis contained "an estimate of EBITDA. She had an estimate, she just plugged it in. But when I looked at the debt tab, it showed a calculation of debt all the way down to December, and so my reaction was, she calculated that with an estimate as of December." (Tr. 465).

G. The November 22, 2016 Waiver

Based upon Mills’ estimate and Lebec’s analysis, Friedberg and Lebec then "had a conversation to ensure that [Friedberg] understood exactly what the numbers were here" and to discuss how EB "might best protect ourselves . .. with a calculation of the exercise price of say 27 million." (Tr. 81-82).14
EB’s "estimate of the market value of the employee ownership at that time was about 20 million, on a good day" (Tr. 82):

That’s what the ... high end of the range of that valuation of the business would be, and based on the market feedback we’d received from [Hurley], which gave us no reason to think it might be higher than that." (Tr. 82).

Friedberg and Milstein discussed "these issues":

"And we concluded it was unlikely that [Hurley] would exercise the call right because if our analysis was correct, he would risk receiving less than our exercise price." (Tr. 82).

Friedberg explained EB’s conclusion that Hurley probably would not exercise his Forced Sale right:

(a) EB’s Call Right price was at $27 million (Tr. 85);

(b) EB thought the market value would be around $20 million (Tr. 85);

(c) If Hurley exercised his Forced Sale Right, and he did not have a better number than $20 million and EB did not exercise its call right, Hurley was "taking a chance that [EB] would buy the company" with the ROFR, in which EB only had to match the best bid. (Tr. 85).

Friedberg saw the question actually as part of "pretty much an annual pattern of renegotiating everything every year, or trying to renegotiate everything every year." (Tr. 86). According to Friedberg:

"It seemed strange, based on what we knew that, that he would be asking the question if we intended to exercise our call right if he had market information that was consistent with our expectation is [sic] that the best price he might get was something in 20 million dollars or less."

"So we didn’t know what he was going to come back with. It wouldn’t have surprised us at all if he came back and said, look, I decided not to do anything here. Why don’t we let this run another year and let’s see if we can reach a deal about it, changing something here, because that’s what he’s been doing every year." (Tr. 87).

Thus, relying upon their own substantial business experience and judgment, Milstein and Friedberg then decided that EB would not exercise the Call Right (Tr. 82). In Friedberg’s words (twice at the March 31, 2017 Initial Conference), EB called Hurley’s bluff because it thought Hurley was trying to trick EB into a renegotiation.
After Hurley exercised the Forced Sale Right, Friedberg advised Milstein and Lebec that he had advised Hurley that EB "would be making a bid to maintain our ROFR." (MH Ex. 99). Friedberg’s view was that the "ROFR provided us adequate protection based on all the information we had at that time." (Tr. 194).
We find credible Hurley’s testimony that he relied on the November 22, 2016 Waiver (Hurley Tr. 865). Thus, he had the general counsel of FN prepare the Forced Sale Notice (Tr. 865; MH Ex. 98). Moreover, he accelerated the process of meeting with potential investors (Tr. 865). In particular, he notified entities that, "as [he] had represented to them, Emigrant has waived." (Tr. 868-69). Indeed, on November 22, 2016, Hurley sent an e-mail to FN management stating:

"We are in business." (MH Ex. 180).

H. EB "Conspiracy" Theories

When Friedberg got the Forced Sale Notice (EB Ex. 95), EB was "surprised":

"We thought, based on the market information we had, that this was an unusual step. We were trying to decide what, if anything we should do." (Tr. 114).

Friedberg could have called Hurley to ask further questions, including whether Hurley knew something that EB did not know (Tr. 88). Surprisingly to us, he did not.
Instead, Friedberg concluded that "things began to feel fishy." (Tr. 123). When Hurley objected to the Call Right exercise, EB was "very suspicious":

"And it was our expectation that if he objected, that there was information that he had that he had not shared with us." (Tr. 125).

Friedberg made this very clear:

"ARBITRATOR BRODSKY: If you didn’t intend to waive your option, what was the purpose of telling him on November 22nd we would not exercise option if you trigger?"

"THE WITNESS: Well, the context of that was that we didn’t think he would exercise his option. It didn’t make economic sense for him to. And we would have been surprised if he did."

"Once he did, we figured there must be information there that we don’t know. And we requested that information. We still had time to make a decision on that, to make a decision to use our call right." (Tr. 111-12).

The first step was to ask Hurley to get the FN management to NYC on the pretext that EB was "trying to assess whether or not to exercise our right of first refusal." (Tr. 114). Friedberg reported to Milstein and Lebec that he had used this pretext in a phone call to Hurley (Hurley Ex. 105). In reality, they "were trying to decide what to do overall." (Tr. 114-15).

I. The FN Management Visit

Kanner plus two other members of the FN management team were asked to meet with EB in New York City on December 16, 2016 (Kanner Tr. 1054).
Hurley informed Kanner that Friedberg had requested the meeting (Kanner, Tr. 1055). Kanner called Friedberg to ask "if there was an agenda":

"I explained to him there was a lot of anxiety at the firm regarding this meeting. And I reminded Mr. Friedberg that they were asking to meet with people who had previously been fired by the bank". (Tr. 1056).

Friedberg said that "there was no agenda" and added that as Hurley had "triggered the process ... they had to consider putting a bid, and that’s why they wanted to talk to the partners of the Firm." (Tr. 1056). Likewise, Hurley testified that Friedberg requested that he facilitate the meeting with FN management so that EB could put in a higher qualifying bid than Virgo, to figure out if FN would still have management (Hurley, Tr. 870).

Upon arrival, the FN management group, including Kanner, was taken into a conference room and then they each met separately with EB executives (Kanner, Tr. 1059). When Friedberg "jokingly said" that he hoped that FN "would in the future be part of a bank like this", Kanner responded that she did not understand how FN "fit within the [bank]", (Tr. 1059), a comment which she repeated to another bank executive -- "I thought it was time to separate" (Tr. 1062). Indeed, Kanner then had "a pretty contentious discussion" with Lebec:

"I told him I didn’t understand why they were talking about owning Fiduciary National... that it didn’t fit in with what the bank did ... especially without the management team". (Tr. 1062-63).15

At the time of this meeting, Kanner did not intend to stay at FN if EB bought out the management team (Kanner, Tr. 1069-70). Kanner was "very uncomfortable" at this meeting:

"I was politely trying to say that we should separate ... [b]ut at the time, the next members of the board .... I was trying to respectfully say to them that it was time to separate." (Tr. 1070).

Although she does not know if she "directly told [the EB executives that she] would leave" (Kanner, Tr. 1086-87), Kanner believed that she made the "message" of separation clear to the EB executives on December 16, 2016 (Tr. 1070).

EB claims that it interviewed each of the members of the FN management, under what were admittedly false pretenses, but did not perceive their lack of interest in working for EB any longer. This is not the conduct of such highly-sophisticated businessmen; they could not have believed, based on even their minimal contacts with FN management, that Hurley had misrepresented their lack of interest in continuing to work with EB. And EB could have asked Watson of Virgo, who would have given the actual facts. We are supported on this conclusion by a December 30, 2016 e-mail from Watson to Lebec and Friedberg:

"We should discuss... the state of play with non-Mark Management. It is not positive. It is not just Mark stirring the pot. I don’t know how we put the genie back in the bottle post recent meetings at Emigrant (not well received) and what they (as much as Mark) believe ... was an about face on the call option, which they feel very strongly was an agreement with them as well." (MH Ex. 142).

We note Friedberg’s response:

"Had they been honest with us, we might not have exercised the call option." (MH Ex. 142).

From the perspective of the finder of fact, however, this was not a matter of Hurley or FN management not being honest with EB. Instead, EB assumed that it understood what was in the minds of Hurley and FN management, but actually misjudged the factual situation, and failed to reach out and clarify what the true facts were. After the fact, EB has sought to justify its actions based upon alleged misrepresentations when, in fact, the situation EB found itself in was due to its own choices.

J. The Virgo Complication

Significantly, although Friedberg testified that he had understood that Virgo "had interests that were quite different from ours in seeing the process accelerated" (Tr. 43), he, in fact, also testified that, on the key date of November 22, 2016. Friedberg "had not remembered ... that Virgo actually could put in ... an offer to protect its ROFR." (Tr. 212-13). On that day Friedberg sent an e-mail to Milstein and Lebec about scheduling a November 29, 2016 meeting:

"Please be organized to present the critical points in the process from the time that Mark triggers. Also how Virgo fits into the process and their rights." (MH Ex. 101).

On November 26, 2016, a few days before a scheduled meeting with Milstein, Lebec sent Friedberg a "short outline of the Forced Sale Process", which stated:

"EB and Virgo each separately free to pursue purchase of FN .."Hurley has 10 days to accept (highest) [offer]." (MH Ex. 101).

The EB ROFR would be foreclosed in the event that Virgo put in a higher member bid (Friedberg, Tr. 212).
On January 3, 2017, Friedberg asked Lebec to give some thought to a "buyout price that may appeal to [Virgo]." (MH Ex. 145). It is a "logical conclusion" that this was motivated by a desire that Virgo not submit a bidding member offer (Friedberg, Tr. 301-02). On January 18, 2017, Virgo announced that it had received a firm offer from EB to buy its shares, which it intended to accept (MH Ex. 153).

K. The "Untimely" Notice

On December 29, 2016, EB sent a letter stating that Hurley’s Forced Sale Notice was "untimely." (MH Ex. 136). EB provided no explanation to Hurley and we find this assertion by EB to be without merit. In the same letter, EB also offered to permit Hurley to withdraw the Forced Sale Notice to allow the parties to "be in the same positions they were in before the communications of November 22, 2016 (MH Ex. 136). Friedberg felt that the "situation ... had gotten out of hand" and "was spinning out of control." (Tr. 299, 313). This was a repeat of his notion that Hurley was engaged in a negotiation (Tr. 320-21).


A. The November 22, 2016 Waiver is Effective

EB argues that, "[u]nder Delaware law, for a waiver to be effective, the question is not whether a party was 'duped’ or misled, but rather, whether the waiver was intentional and made with knowledge of all material facts." (EB Post-Hearing Memorandum at p. 1).
We are bound by the LLC Agreement to follow Delaware law.16
It is "well settled ... that contractual... conditions may be waived", but the "standards for proving waiver... are 'quite exacting.’" AeroGlobal Capital Mgmt., LLC v. Citrus Indus., 871 A.2d 428, 444 (Del. 2005).17
We find that Hurley has "put forward unequivocal facts that establish both [EB’s] knowledge of all the material facts ... and an intent to waive." Seaford Machine Works v. Johnson, No. 95A-08-004, 1996 Del. Super LEXIS 134 at *10 (Del. Super. Ct. April 1, 1996).18
As discussed above, the November 22, 2016 Waiver constituted the "voluntary and intentional relinquishment" of a "known right," namely the Call Right.
Moreover, this was done either in "knowledge of all material facts" or with constructive knowledge of all facts necessary to have been known.
First, EB’s assertion that a waiver is not effective "simply [as a result of] a failure to be fully informed" (EB Post-Hearing Memorandum at p. 22) misstates Delaware law.
Delaware law is as follows:

"'The test for ascertaining the knowledge possessed by a party is what the party knew or by the exercise of reasonable diligence could have known at the time of the purported waiver.’" (Seaford Machine Works v. Johnson, ids, citation omitted.)

EB repeatedly states that it did not exercise any diligence. For example:

(a) Friedberg, when asked whether he had asked to see the confidential information memorandum that he assumed Hurley was using (Tr. 1121), said no - "I assumed it wouldn’t have anything in it I didn’t know." (Tr. 32);

(b) Friedberg, although he received at least half a dozen calls from Hurley about the FN management outreach (Tr. 75), did not ask Hurley any questions about this information, even though he purportedly thought Hurley’s questions "strange," "puzzling," etc. (Tr. 87, 184);

(c) EB never asked Mills any questions about her Call Right Price estimate (Friedberg, Tr. 280, Lebec Tr. 586), despite her invitation (MH Ex. 93);

(d) EB never asked Virgo about Hurley’s marketing outreach or the attitude of MH management; and

(e) EB never asked Hurley any questions about his exercise of the Forced Sale Right.19

In fact, EB waived the Call Right because it believed Hurley was bluffing, as Friedberg informed the Panel, and because exercising the Call Right at the then-estimated price of $27 million (or $27.5 million) did not make economic sense to EB. Friedberg so informed the Panel. Moreover, the December 29, 2016 letter -- inaccurately stating that the Forced Sale Right was untimely- concededly was an effort to test the hypothesis that Hurley was bluffing.
Second, EB’s current theory depends, in significant part, on the theory that subsequent developments can undo the November 22, 2016 Waiver. Thus, EB states:

"After Receiving The Third Quarter Financials, Calculating The Call Right, And Meeting With Senior Management, EB Determined That the Call Right Better Protected Its Ownership Interest In Fiduciary Network Than The ROFR." (EB Post-Hearing Memorandum at p. 15).

This argument incorrectly assumes that EB may ignore the November 22, 2016 Waiver. Thus, EB states, "Messrs. Friedberg, Lebec and Milstein met on or about November 29, 2016, and discussed whether the Call Right or the ROFR better protected EB’s ownership interest...." (EB Post-Hearing Memorandum at p. 15), EB further justifies the completion of the Third Quarter Financials - not available to anyone at the time of the waiver - as a factor for its change of heart, because, through them, EB purportedly realized that Mills’ estimate was $3.4 million "too high." (EB Post-Hearing Memorandum at p. 22). But both Friedberg and Lebec knew Mills was using estimated fourth quarter financials to make her estimate and that such estimate may have been on the high side.

B. EB May Not Withdraw the November 22, 2016 Waiver

EB argues that it properly rescinded any waiver (EB Post-Hearing Memorandum at pp. 38-41).20 Its argument is refuted by the very case it cites -- Roam-Tel Partners v. AT&T Mobility Wireless Operations Holdings, Inc., No. C.A. 5745-VCS, 2010 Del. Ch. LEXIS 247 (Del. Ch. Dec. 17, 2010).
That case involved whether a stockholder "irrevocably waived its statutory right to an appraisal when it signed the Letter of Transmittal and mailed it along with its stock certificate to AT&T Mobility in exchange for the check representing the merger consideration." (Id. at *29). The Vice Chancellor found that this waiver "argument depends on using confusing equitable doctrines in an inequitable way, oversimplifies our case law, and cuts against the policies served by [the appraisal statute]." (Id. at *30 -31).21
The Vice Chancellor explained that the "confusing doctrines are those of waiver and estoppel" (Id. at *31) and explained that waiver, unlike estoppel, "does not necessarily imply that one party has been misled to his detriment in reliance on the conduct of the other party" (Id. at *31). The Vice Chancellor described the "continuing problem, which I do not attempt to solve in this opinion, is that few actual waiver cases exist where the waiver that was enforced did not result in some change of position on the part of someone receiving the waiver." (Id. at *33.) Although the Vice Chancellor announced that "I did find this rare case," he stressed that it is "far easier to find cases where waivers were upheld because of clear detriment to the other party, and cases where waivers were allowed to be rescinded because of the absence of such detriment." The Vice Chancellor explained a Delaware Supreme Court case which "said that a right that is waived is gone forever" as follows:

"[W]hen Party A defends his conduct by an allegation that Party B has waived the right he now seeks to enforce, Party A often does so because he has acted in a way inconsistent with the continuing existence of the right that Party B has waived, and is placed in a worse position because of it." (Id. at *34).

Since, according to the Vice Chancellor, "a waiver can be retracted before the other party has practically changed his position in reliance thereon," Delaware "courts ... will look to whether the non-waiving party has been prejudiced by the waiving party’s attempt to rescind its prior waiver." (Id., at *37). In support of this proposition, the Vice Chancellor has a footnote 77 which states:

(a) "Courts in Delaware will not allow a waiving party to rescind its waiver if the non-waiving party has relied to her detriment on the waiver or would be prejudiced by its revocation." (Id. at *38-39).

(b) "On the other hand, our courts are willing to allow a waiving party to change her mind in the absence of such detrimental reliance on other prejudice." (Id. at *39).

We reject EB’s argument that Hurley has "not demonstrated that he took any action, much less materially changed his position between November 22 and December 19." (EB Post-Hearing Memorandum at p. 39). EB's argument ignores established doctrine regarding waiver that it cannot be withdrawn if the person to whom the waiver was given relied on the waiver to his detriment. In our view, that is what we have here: once EB waived the Call Right, Hurley, to his detriment, relied on that waiver. We find that courts in Delaware would not allow "the waiving party" (here EB) to "rescind its waiver if the non-waiving party [here Hurley] has relied to [his] detriment on the waiver."
First, Hurley issued the Forced Sale Notice in reliance on the November 22, 2016 Waiver. This was part of a process of "separation" between FN and EB that Hurley and FN management had sought since at least the beginning of 2016. EB knew about Hurley’s and management’s desire in this regard, including the notion of the management buyout. If EB were allowed to rescind the waiver, it would in effect have accelerated its Call Right to December 1, 2016 from December 1, 2017 by having induced Hurley’s exercise of his Forced Sale Right.
Second, Hurley’s reliance on the November 22, 2016 Waiver included his interactions, directly and indirectly, with the FN management, investors and in the wealth management industry (Hurley, Tr. 876), with whom Hurley had been communicating regarding his intentions with respect to FN almost continually during 2016, including in the period immediately after receipt of the November 22, 2016 waiver. His email to other members of FN management immediately after receipt of the November 22, 2016 Waiver ("we are in business") suggests very strongly that, now that Hurley knew EB would not be an obstacle, he and his team set out to put into place the plans they had been making during 2016, plans that involved "separation" from EB.
EB has offered no persuasive support for its notion (EB Post-Hearing Memorandum at pp. 21-22) that it is sufficient for EB to offer Hurley "the opportunity to return to the status quo as it existed before November 22, 2016."
Thus, we conclude that, based on our assessment of the evidence proffered and the credibility of the witnesses, that Friedberg, acting for EB, knowingly and deliberately waived its Call Right on November 22, 2016; that Hurley detrimentally relied on the waiver; and that EB's subsequent assertion of its Call Right was ineffective.


This is the Final Award in this Arbitration. It is effective immediately, without the necessity of further hearing and may be confirmed in any court having jurisdiction. This Final Award decides all the Parties’ claims and counterclaims, except as otherwise noted. Any argument not addressed in this Final Award was found to be unavailing, without merit, academic or unnecessary to reach.
This Final Award may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute together one and the same instrument.
The undersigned Arbitrators find that EB waived the Call Right and declare as follows:

(1) Hurley’s Forced Sale Notice was timely and effective in accordance with Section 7.3(a) of the LLC Agreement;

(2) EB Safe’s Call Right Notice is invalid, ineffective, and null and void;

(3) The Sale Process shall proceed in accordance with Section 7.3 of the LLC Agreement;

(4) All dates, time periods, and deadlines under Sections 7.3 and 7.4 of the LLC Agreement are stayed and suspended between December 19, 2016 and August 7, 2017;

(5) The full twelve-month period permitted for the Sale Process to obtain a letter of intent or agreement in principle with a third party bidder, as specified in Section 7.3(e) of the LLC Agreement, shall begin on August 7, 2017;

(6) EB’s Call Right effective as of December 1, 2017 pursuant to Section 7.4(a) of the LLC Agreement shall be stayed and suspended for a period of twelve months from August 7, 2017, or upon termination of the Sale Process, whichever is later;

(7) Hurley is the prevailing party in the Arbitration pursuant to Section 10.4 of the LLC Agreement; and

(8) EB’s claims in this arbitration are denied and dismissed, except to the extent preserved by the Stipulated Order Regarding Withdrawal of Damages Claims, dated June 9, 2017.

In addition, pursuant to Section 10.4, the undersigned Arbitrators award Hurley all costs and disbursements incurred by him in connection with this Arbitration, including all of his reasonable attorneys’ fees, expert fees, and the costs of the Arbitration. These amount to $2,222,397, provided that any amounts refunded by CPR are for EB’s account.
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