Legal Matters, page-2

Also in the appeal judgement reference is made clause 6.3 of the JVA which "imposes limits on the liability of the manager inconsistent with those that would ordinarily arise from a principal and agent relationship. Clause 6.3 provides:

1. 1. 1. Heathgate as Manager shall not have any liability to the joint venturers for losses sustained or liabilities incurred if, in the circumstances of the particular case, it has acted or refrained from acting in the course of an effort made in good faith to perform its obligations under this Agreement and has not committed any act of wilful misconduct and has not been grossly negligent. For the purposes of this clause “grossly negligent” means such conduct as constitutes a reckless or wilful disregard for harmful and foreseeable circumstances."

This would seem to restrict Alliance's potential for damages in the current action only to situations were Heathgate has engaged in wilfully misconduct or gross negligence.

But the clause only refers to Heathgate as Managers and not agents. There could be an argument and the judges seem to refer to it in the preface of their paragraph ("inconsistent with those that would ordinarily arise from a principal and agent relationship"), and this is pure speculation on my part, that as agents Heathgate's duty to Alliance may extend beyond this clause. So as managers they have no liability for losses, but as agents under clause 10.11, they might.

These are just all my speculations and opinions, I'm not a lawyer, I have never had any legal training. Do not rely in any way on what I've said. Do your own research. Seek professional advice if you are unsure about any investment decisions and their suitability to your particular circumstances.

Eshmun