court's order in this case dismissing cabello complaint should be reversed there are a number of points that the district court simply got wrong as a matter of law and with the court's permission i'd like to preview the issues i'd like to address today before jumping into the substance st cavelos claims here are based on a domestic security strands action that is within the scope of the exchange act the claims clearly meet the requirements of morrison since both parties entered into a middle well your honor it is our position that the parties became irrevocably bound when spencer through defendant's stein signed the subscription agreement which i think with that point because there were conditions in section four and four point eight was a condition that said that if you pay for the shares upon closing so at least i understand are independent grounds  hear your point about there being conditions upon closing however it is ordinary that there are perfunctory calls and conditions in almost every deal and the parties become balland at such point as liable just by not paying for the shivs the end and the whole room is off well i think even defendants would admit here that once there was a signed agreement once covello sent back the subscription agreement with its signature and the other side signed there were there were performance issues to be sure both sides had to perform but covello could be at that point the fact in our briefing having the discretion to either accept or reject the subscription agreement isn't every fights right to revoke that acceptance and the clothes and conditions here were just formality it seems to be quite confusing and well yeah payment is important for sure but this court and the courts the district courts within the circuit every day see contracts that are entered into determination as to whether it's predominantly foreign so there are numerous busy the steps in this transaction and aspects of the deal that are quite clearly in the us that aren't at all minor st the fact that we've just been talking about the fact that the deal was accepted and signed in new york the primer which is the main sales document was sent from new york which under cabela's pleading means the misrepresentation and a mission on which the claims are based was made in new york the agreement again was signed in new york by mister stein on behalf of spencer spencer had its principal place the business in new york and the deal documents reflect that issued all together to finance the acquisition of u s assets so if you take all of the facts together i don't think it can fairly be said that this transaction was so predominantly foreign as to make it i extraterritorial value let me ask you this i mean short you say we subject to u s securities laws i take it that's because it's a clause in the contract that says they can sell them or these shares subject to u s securities laws but for the fact that the parties agreed that the buyer would not sell to anyone without registering them with the f c c well i'm not sure that there is much more to it than that except i would say that the majority of shareholders as as we understand it are us shareholders with only very few outside of the u s so i think it's an inherent and an important part of the transaction  that they're covered by the u s securities laws it's not our position that that that standing alone makes this a u s transaction because as as i see the structure of this it looks as though it's structured so that it would not be subject to the u s securities laws which is perfectly fine only then you get the question of why dumbass would want to make the courts would want to open the doors of the u s courts to dealing with a controversy over transaction with the parties to care to avoid americans furiously well i don't think it's the case that the parties took care to avoid the the us securities love when the agreement itself makes reference to the u s securit laws and there is a clear in our view misread the misrepresentation regarding the securities made out of the u s over of variety of investors including primarily u s investors so i don't think this is  all what was in this and by park central in addition to the transaction that is so predominantly foreign this court case law in that regard points to all kinds of different circumstances where really the heart of the transaction is outside the u s here we have u s individual d on behalf of a company with its principal place of business in new york signing up subscribers based on a representation that cavell contends just simply isn't true point out your honor that the subscription agreement was sent both by mail from new york and by e mail by mister stein so i don't think we necessarily get to that question i believe that the law that we cited in our brief to that effect  which i can i can check for your honor and give you a specific  discussion purposes only if there was any ambiguity in the center of the issue the client's obviously stupid investor why why would it be an irrelevance for the district court to conclude court's decision in the f i a case made very clear based on longstanding nd circuit law that a general merger clause can't overcome reliance in the face of a very specific misrepresentation or omission in those circumstances where there is a specific list of incorporated representations and warranties coupled with the merger clause the situation may be different but that isn't what happened here here there's just a very general merger prepared for discussion purposes only you know there's other ones as well well you know certainly there are those words in the primer however we have a situation here where the defendants deliberately concealed the truth about the management fees and cavell of reasonably believe that a management incentive feed would not include a windfall that was siphoned off of an increase  arguments on this issue i want to back up a minute no to few points that provide a framework for this discussion because the bass and circumstances of each case will be different and so it is important to keep in mind that the overarching objective of morrison was to avoid extraterritorial application of the securities was as a or that more than we begin with the presumption against extraterritoriality and the supreme court in mor domestic transaction in other securities where you have cases that are not publicly traded on any exchange under estimate after the st line of inquiry is whether your vocal liability was incurred in the united states but even if it that that both parties became irrevocably bound when the the acceptance was sent by mail from new york so we submit that  under under new york contract law and as the as the district court judge found the contract enough to come finding at the earliest until the acceptance was communicated to to the purchaser the it's not until it's actually communicated and received it's communicated received in bermuda if someone across the bottom in new york to send an e mail but it didn't go through to bermuda then there wouldn't be think under section on one of the conditions that we have to deliver the security and it's different then just because in general what was the what was the issue was whether whether there was a there waiting for the bahamian regulator but i don't see that the agreement does provide that there will be a closing at which we will deliver the security of the condition not in section five that's just in the general language of the agreement section five if no such condition well right so i'm looking  section five none of those ring you're going to control is my point well the repton want to have to be true and i think some of the rep warranties relate to things we do have control over but but nevertheless even if even if we get away from the to deliver shares an exchange for a set price value to show up at the closing would be a breach and the breach would support i'm action for damages and those to be when the when the except as was communicated that's why i haven't even gotten to the focusing on fifteen if i look i think if you look at the remember the schwartz versus greenberg case in that say there was a transaction that's it this is a new york court of appeal activists and in our central and part of what those agreements were actually governed by us law had us form selection so the fact that there had to be there is as was pointed out a registration where there's a transfer of share that's not  positive about whether the transaction is extraterritorial the obligation to register if there's a transfer or when is that obligation comes from the federal rise from united states law or does that arise from a provision in the contract there is a provision in the contract it states the subscription agreement informed about is that they want to press on they have to register them whether that's just something in the contract or whether it's  and that question about you know that was raised about whether there's an ambiguity i think all the cases are clear if there's some sort of ambiguity that was someone i know this then you have to have some duty to inquire and they should have looked at the i m f and the reason for that is in fact that he is described as twenty percent of profits above eight percent growth in book value for share on a base that doesn't make sense because profits and book value are two different two different concepts and  brief they do not take issue at all cavell does not with our position our separate point you know our brief that there is no contractual privity and therefore twenty nine b should fall so we'd say   state with particularity that there was any cyan there are involved in the in the matters at hand what we're really focused on here is just a simple transfer of a document it was details discussed with respect to the primer is an allegation in the complaint that there was a phone call from mister shulman stein to the plaintiff in which the the there was a pitch if you will there's no allegation whatsoever that anything was discussed with respect to the primer and in particular with respect to the incentive three and so we say that when you really focus on what is chase's about it's essentially an e mail in even in their in their motion papers they've said they wouldn't have entered into the transaction had they known this is the way this incentive you would have been a counterweight what was a separate point in the primer and if this indeed is what  counsel has said arguments that we were attempting to hide well there was st if the incentive if it was so important it's separate from the management fee it could have easily been checked by due diligence by as misess cook said just asking for the investment management agreement that would have explained and it defies logic to think that shubin stein would have attempted to hide this when at the st time that the calculation of the incentive management fee had to take place which was which was several months after the transaction it would have been totally obvious to everyone and so it's defies logic that this this one piece of  a fact was somehow hidden from sophisticated already see here and they had the ability to check and see and to conduct their due diligence would have readily revealed th question your honor and one that one that i haven't looked at to be honest i don't see a reason why i couldn't be brought in bermuda i'd like to turn back well what i would say that your honor is that my client reasonably understood the term profits to mean financial gain due to operational activities or return on investments profits clearly don't encompass an increase in retained but i i don't think that anything here would have thrown up a storm warning or red flag to my client that what was actually intended here including the use of the word profits is that spencer would pay spencer think what i would say your honor is that my client didn't took a representation that there would be a management fee based on based on profit based on the performance of the investment and that is entirely ordinary and not the kind of thing even a specific reference to profit and if it were going to be the case that there was a management fee paid on something just raising additional capital i think it's fair to say that no investor would address a few of the points that came up in opposing counsel's argument st going back to the point of the agreement i think the central point and i think it was judge bianco that raise that that if either party had not performed on this contract there would have clearly been a breach if you look at your decisions and gents and that's fluid activist on a revocable liability the question is whether something gives the parties here the right to walk away the right to change their mind nothing in this agreement none of the close and conditions on either side gave spencer in particular the right to change  critical or not well i think that the the terms of the agreement here if you read the terms of of our agreement they don't make they don't condition a meeting of the mind anything about the agreement itself being conditional upon notice and receipt of notice nor would it make any logical sense to imply that from the terms of the agreement because no this can only happen after there actually is an agreement in the and meeting of the minds i would just say and i realize i'm over my time but on the d on the point on twenty nine b i would just draw your honor's attention to the points of our brief that to state a claim under twenty required is the pleading of a violation of the exchange act not the separate individual elements of a private right of action we think that briefing is clear on that it's a it's a very interesting issue i'm sorry didn't get more of an