Free Transcript - District Court of Arizona - Arizona

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA _________________ ) ) ) ) Plaintiff, ) ) ) vs. ) ) PETER THIMMESCH, et al., ) ) Defendants. ) ______________________________) BILTMORE ASSOCIATES, as Trustee for the Visitalk, Creditors' Trust,

CV 02-2405-PHX-HRH Phoenix, Arizona March 11, 2008 12:59 p.m.

BEFORE:

THE HONORABLE H. RUSSEL HOLLAND, JUDGE

REPORTER'S TRANSCRIPT OF PROCEEDINGS BENCH TRIAL VOLUME #7 P.M. Pages 1372 to 1504

Official Court Reporter: Elizabeth A. Lemke, RDR, CRR, CPE Sandra Day O'Connor U.S. Courthouse, Suite 312 401 West Washington Street, SPC. 34 Phoenix, Arizona 85003-2150 (602) 322-7247 Proceedings Reported by Stenographic Court Reporter Transcript Prepared by Computer-Aided Transcription

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1 2 3 For the Plaintiff: 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 UNITED STATES DISTRICT COURT Case 2:02-cv-02405-HRH Document 509 Filed 04/22/2008 Page 2 of 133 TIFFANY & BOSCO By: Christopher Reed Kaup, Esq. Andrew M. Ellis, Esq. Tracy Shelden Morehouse, Esq Robert A. Royal, Esq. 2525 East Camelback Road, 3rd Floor Phoenix, AZ 85016 For the Defendants: MARISCAL, WEEKS MC INTYRE & FRIEDLANDER, PA By: Gary L. Birnbaum, Esq. Timothy J. Thomason, Esq. Scot L. Claus, Esq. 2901 North Central Avenue, Suite 200 Phoenix, AZ 85012 A P P E A R A N C E S

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1 2 3 4 5 6 7 8 9 10 EXHIBIT NO.: 11 12 13 Exhibit No. 104 14 Exhibit No. 295 15 Exhibit No. 604 16 17 18 19 20 21 22 23 24 25 UNITED STATES DISTRICT COURT Case 2:02-cv-02405-HRH Document 509 Filed 04/22/2008 Page 3 of 133 Term sheet for stock purchase $2,000,000 Letter from Michael O'Donnell to R. Mallery April 1999 Visitalk.com Visit and Evaluation 1457 1448 1477 Exhibit No. 25 Email from Kimberly Clouse to Marcia O'Donnell 1422 DESCRIPTION: RECEIVED: INDEX OF EXHIBITS WITNESSES MICHAEL O'DONNELL INDEX OF WITNESSES Direct 1375 Cross 1440 Redirect

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Q Q A Q sir? A Q A I have it here.

P R O C E E D I N G S (Called to the order of court at 12:59 p.m.) THE COURT: MR. KAUP: Please be seated. Yes, Your Honor. Mr. Kaup. We're going to call

Mr. O'Donnell back to the stand. THE COURT: under oath? THE WITNESS: I do. Mr. O'Donnell, you understand you're still

MICHAEL O'DONNELL, WITNESS, SWORN DIRECT EXAMINATION (cont'd) Mr. O'Donnell, you see the exhibit folders in front of you? I do. Could you look at the one for Exhibit 101. Are you there,

Did you see Exhibit 101 in 1998? Not that I recall. Was this part of a bigger document? Mr. O'Donnell, let me just be clear for the record. My

question was not precise enough. A Q A Q A Okay. Do you see the first page of Exhibit 101 in 1998? I don't know the context, so I can't recall if I saw it. Could you look at the third page of Exhibit 101. Yes.

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Q A

Did you see the third page of Exhibit 101 in 1998? This is Peter Thimmesch's stock certificate. I believe I

probably did not. Q A Q A Q A I said the third page. Oh, I'm sorry. One, two, three. Yes. I have it.

Do you recall having seen that document in 1998? No, I do not. Do you recall having seen that document in 1999? I know I have seen it. It probably would have occurred at

least by 1999.

It might have been 1998, I just don't have a

specific recollection. Q A Q A Q A Q Could you look at the fourth page of Exhibit 101. Yes. Did you see this document at any time in 1998? Not that I recall. Did you see this document at any time in 1999? I don't recall. And just to be clear, because I don't think I asked this Did you see the first page of Exhibit 101 at any

question.

time in 1999? A I don't know that I ever saw this page. It might have been

part of another document that I read.

I remember seeing it a

year ago or when we did our deposition, but I don't know that I saw it before that. Q Could you look at Exhibit 102 please, sir.

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A Q A Q A

Yes.

Okay.

Did you see Exhibit 102 in 1999? I believe I probably did. Do you have an understanding about what Exhibit 102 is? It looks to be financial statements for Visitalk as of the

period January 2nd, 1999. Q Did you have an understanding as to who Visitalk's auditors

were for the period reflected in this document which is Exhibit 102? A Q I did. Ernst & Young.

During 1999, in connection with your duties as an officer

and director of Visitalk, did you speak with persons employed by Ernst & Young on matters relating to Visitalk? A Q I did. And as the President of Visitalk and a member of the board

of directors, did you receive Visitalk financial information? A Q I did. Now, did you ever tell anyone at Ernst & Young in 1999 that

anything in Exhibit 102 was in error? A Q I don't believe I did. Did you ever tell anyone at Ernst & Young anything in

Exhibit 102 was in error during the year 2000? A I don't believe I did. Well, I don't think I had that conversation with Ernest and young. I remember having conversations about the

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dates of who became a shareholder on which date.

That would

have been in board meetings and meetings associated with Founder's Warrants and Snell & Wilmer. Whether it was

Ernst & Young as part of that conversation, I don't recall. Q Again, I was pointing out this particular document, and to

be clear for the record, did you tell anyone at Ernst & Young anything in this particular document 102 was in error? A I remember having conversations about there being an error I don't recall if Ernst & Young was a party

in this document.

to any of those conversation. Q What was the error in the document which was -- which you

have referenced as having been included in conversations? A That would have been the Statement of Changes in

Shareholder's Equity document. Q A With whom did you have that conversation? I had that conversation with the board of directors -Well, let me look at the document. Yeah. That would

have been with the board of directors, Snell & Wilmer, other principals in the company. Q A Q A When did you have that conversation? That would have been in the fall of 1999. When during the fall of 1999? I don't recall exactly. It would have been during the

board meetings when the Founder's Warrants issue was addressed and cleared up. UNITED STATES DISTRICT COURT Case 2:02-cv-02405-HRH Document 509 Filed 04/22/2008 Page 7 of 133

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Q

Do you see -- could you look at the third page of this

document, sir. Do you see the date under the address of Phoenix, Arizona, as being November 23, 1999? A Q I do. Did the conversations that you just referenced relating to

an error in the Ernst & Young Audit Report, Exhibit 102, occur after November 23, 1999? A I can't pinpoint to which date. You would have the

documents that show the dates of those meetings and discussions. Our controller would have been present at those

meetings, so I assume that would have been communicated to Ernst & Young. Q What was the error in this document, Exhibit 102, relating

to Founder's Warrants and stock about which you testified a few minutes ago? A I haven't read the entire table, but the first line --

number in the table, 6.1 million shares, and I believe it declares them to be initial shares issued to founders, September 4th. Q A Q A Are you looking at the page which has VT 19848? I am. The bottom of it? I am. Mark Cardwell was not a founder -- I'm sorry. UNITED STATES DISTRICT COURT Case 2:02-cv-02405-HRH Document 509 Filed 04/22/2008 Page 8 of 133

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Q A

Go ahead. Mark Cardwell was not a founder of the company and he

wasn't a shareholder on September 4th. Q Is it your testimony now that you told someone at a board

meeting in the fall of 1999 that Mr. Cardwell was not a shareholder on September 4, 1998? A Yes, it is. I believe the issue came up substantially

earlier than that, but the resolution to the Founder's Warrants issue went on for that -- you know, during that period of time and that was a topic that was discussed specifically and addressed. MR. KAUP: Q BY MR. KAUP: Your Honor, may I approach? Mr. O'Donnell, I have given you copies of

your -- the transcript from your deposition -A Q Uh-huh. -- taken in this case. Do you recall having been deposed in my offices? A Q A Q I do. Now, could you look at page 94 at line 9. I am. I asked you: "Did you ever inform anyone at Ernst & Young that Mr. Cardwell did not receive -- was not issued stock in Visitalk on September 4, 1998?" And you answered: UNITED STATES DISTRICT COURT Case 2:02-cv-02405-HRH Document 509 Filed 04/22/2008 Page 9 of 133 Are you there?

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"I would not have been sure as to which date he received stock and would have thought September 4 to be as good as any other date. I would not have brought that to their

attention, because I would not have known what date he actually became a shareholder. became a stockholder." That testimony was true, wasn't it? MR. THOMASON: answer, please. THE COURT: MR. KAUP: Please read the rest of his answer. "I believe that the paralegal at Bryan, Your Honor, can we read the rest of his To this day, I don't know which day he

Cave found it convenient to list all three on the same date on the same pad of stock certificates, and I believe she established the date of September 4 as the date convenient after September 3." "I don't think Mark Cardwell was a shareholder as soon as September 4. When we incorporated on September 3, I don't

think Peter and I had yet made him an offer of employment, which the million shares was part of an offer of employment. believe that came later." That testimony was true, sir? THE WITNESS: BY MR. KAUP: It is. I

So, sir, if you didn't know what day

Mr. Cardwell became a shareholder as of the day you testified in this proceeding in the deposition on July 18, 2006, how was UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 10 of 133

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it that you were able to inform anyone at a board meeting about the date Mr. Cardwell became a shareholder? A As I told you then and it comes later in this testimony and

I will tell you again now, the answer is the same. I was absolutely certain as to the sequence of events in which the company was incorporated; that there was a period of time between that incorporation and Mark Cardwell being made an offer of employment; that he was not a founder of the company or party to the discussions about founding the company; that after the company was incorporated and founded, he was identified as an individual that could be hired and that that -- there was a negotiation and a process to make him an offer. Those things all took place -- those things took a period of time. I think I mentioned then, as I will mention

now, that seemed to be about a couple of weeks and that he would have been a shareholder after he was made an offer of employment. And those shares would have been conveyed to him

at that time, which would have been sometime in the next couple, several weeks. Q Now, did you ever tell anyone at Snell & Wilmer that

Mr. Cardwell did not become a shareholder on September 4, 1998? A We discussed this in depth at board meetings. My

recollection is that Snell & Wilmer was present at those board meetings and would have been a part of the conversation where UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 11 of 133

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we identified that the date September 4th, which Joe Richardson and Bryan, Cave had put down on some of the initial -- initial corporate documents, was incorrect and they would have been present at those meetings. Q A Q A When were those meetings? The board meetings where this was discussed? Yes. There were a number of meetings throughout 1999, starting They were the

very shortly after Snell & Wilmer was hired.

ones that identified the issue of the paperwork being inconsistent, that there was a problem with some of the dates on the paperwork that was documenting the corporate events prior to having counsel and then as they were recorded by our counsel, which came, you know, several weeks after we raised the initial funds. Q Now, look at page 95 of your -- the transcript of your

deposition, sir. A Q I'm there. At line 4 I asked you: "Did you ever tell anyone at Snell & Wilmer that Mr. Cardwell did not become the shareholder of Visitalk on September 4, 1998?" You answered: "Until my conversations with you, I would not have believed that to be a relevant fact to anything pertinent." UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 12 of 133

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Then I asked: "So the answer to my question is, no, you never told that to anyone at Snell & Wilmer?" And you answered: "Well, I don't recall telling anyone at Snell & Wilmer that fact, because I don't think it was ever an issue." That testimony was true, wasn't it, sir? It was, to the best of my recollection at that time. And

as I just said to you, they were the ones that identified the issue and told me that there were inconsistencies. They were

present during the meetings where we discussed what, in fact, did happen at the beginning of the company's history. And it was during those meetings that it was discussed that the dates were very obviously incorrect on the documentation that Bryan, Cave had prepared. Q Did Mr. Cardwell ever tell anyone at Snell & Wilmer while

you were present that he did not become a shareholder of Visitalk on September 4, 1998? A I remember Snell & Wilmer being present during the process

to get these matters corrected and Mark Cardwell was in those conversations. And it's my memory that he agreed with the

sequence of events; that he was made an employee after the company was founded; that he was made an offer of employment that included a million shares and that came later -- later on in the company's first month. UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 13 of 133

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Q

Mr. O'Donnell, at page 95, line 15, I asked you: "Did Mark Cardwell in your presence ever tell anyone

at Snell & Wilmer that he did not become a shareholder on September 4, 1998?" And you answered: "I don't recall him making an issue of what date he became a stockholder." Now, that testimony was true, wasn't it, sir? A Yeah. I don't recall him making an issue of what date he In fact, from the dates discussed, he

became a stockholder.

was in accordance with the sequence of events, and that the date on the certificates obviously were wrong and that he became a stockholder later. Q A Q A Q A Could you look at Exhibit 105, sir. I have it here. When was the first time you saw Exhibit 105? I cannot recall the date. Was it during the fall of 1998? Yes. This document was prepared by Bryan, Cave as they constructed the company's corporate book, and they prepared the documents and had it as part of our corporate book. Q A Q Could you look at the last page of this exhibit, sir. Yes. You see the signature line with your name? UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 14 of 133

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A Q A Q

I do. Is that your signature? It is. You signed this -- did you sign this document after

September 12, 1998? A Q A Yes. Did you sign this document in November of 1998? I don't know exactly what date. It would have been after

the date that we sat down with Bryan, Cave, with Joe Richardson. It seems to me it was a number of weeks before he

had everything prepared and had us sit down and sign documents. It probably would have been in October or November. Q Were you in Mr. Richardson's office when you signed this

document? A I had a handful of meetings with Joe Richardson, Peter and By that time Mark was a part

I did, as well as Mark Cardwell.

of -- we referred to Mark and Peter and I as the principals. We would have principal meetings. He was not a founder, but he

was a principal, and he was part of the meetings with Joe Richardson. At that time we had a number of meetings in his office. Some were in our office. I believe this one would

have been at his office, but I couldn't say specifically -- I couldn't say for sure one way or the other. Q Did you and Mr. Thimmesch sign this document at the same UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 15 of 133

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time? A I can't be sure. I think that's probably the case. I

think we sat down and went through a bunch of documents and worked with Joe Richardson to complete the work that we had hired him to do. Q Could you look at Exhibit 112, please, sir. Mr. O'Donnell, did you see this document in the -- for the first time in the summer of 1999? A I don't know if I saw that document then. I believe I saw

it -- I know for sure I saw it during the deposition. Q A Q By "the deposition," you mean my deposition with you? The deposition you held with me, correct. Do you recall having seen this document at any time prior

to Visitalk's bankruptcy? A I don't have any idea what the content of this document is,

so, would you like me to read it? Q Take your time to familiarize yourself with it so you feel

able to testify about it. A Okay. I have read up through the middle of the second

page.

I think I understand what the document is and what it's I have not read the other four or five pages.

addressing. Q

So now having read the first page-and-a-half, sir, did you

ever see this document prior to the date on which Visitalk filed bankruptcy? A I believe I did. UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 16 of 133

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Q A

When -I believe I saw it as part of the discussions about the

Founder's Warrants in board meetings. Q So you -- is it your testimony you believe having -- you

believe you saw this document for the first time in a board meeting? A I know I would have been -- as part of discussions about I probably saw it prior to a

this document in board meetings. board meeting as well. Q

Did you ever see a copy of this document which was on Snell

& Wilmer letterhead and was signed by Mr. Donahey during the time before Visitalk filed for bankruptcy? A I saw a copy of this document. This one is not signed. I

don't know if the copy I saw was signed. I remember reading this document as part of those conversations and meetings. Q When you saw this document during the time you were an

officer of Visitalk, did you observe anything in the document which you believed to be in error at that time? A Q A I did. Do you recall what that was? Well, again, I haven't read the entire document. I

remember this document being commissioned by Stephen Best to have Snell & Wilmer review the issue of the Founder's Warrants. They were asked to prepare a finding as to, you know, UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 17 of 133

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what the potential issues were.

I understand this document to

be talking about potential liabilities down the road if the issue of the Founder's Warrants isn't cleared up to some satisfaction. And this was their document informing us as to what the issues were and, you know, possible consequences were. I

think they might have went into a couple different solutions, but I'm not sure if that was in this document or another document. Q Mr. O'Donnell, do you see the third full paragraph which

begins with the words, "As we understand it..." on the first page? A Q I do. Do you see it goes on to read, "...in early November, 1998,

after the closing of the company's offering Series A Preferred Stock, Messrs. Thimmesch and O'Donnell authorized, pursuant to a resolution of the board of directors dated September 12, 1998, the issuance of the Founder's Warrants in order to prevent dilution of their ownership percentages through the initial capital raising activities of the company." Is that statement accurate? A No -- well, that depends. I'm not sure I understand, and I I'm not sure I understand the

told you this in my deposition.

difference between "authorized" and "issued" and what the technical definitions of those are. UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 18 of 133

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What I knew is that, you know, two guys started a company and we built a term sheet. And before we offered the

term sheet, we realized that we had not -- we had not thought ahead far enough and the two guys that were the only owners stockholders, and directors made a decision to change the capital structure of the company. And we did that in very

early September when we were the only stockholders. Joe Richardson went on to take that information from us and prepare corporate documents that would reflect that correctly and accurately. It came to my attention much later

that the documents he prepared did not reflect that accurately. You're asking me if, you know, our Unanimous Consent Resolution on the 12th, that was authorizing it. And then I

don't understand what legal issues or technical issues have to do with them then later being issued. So I was not aware that they were authorized on one day, issued on another day, and quite frankly, it wasn't something I was concerned with until it was identified as a problem later on. Q And I'm not asking you to give any legal opinion, sir. I'm

just asking you whether you understood that that sentence is this document is accurate. A Again, I don't believe it is accurate, unless somebody

can -- unless someone can help me out with a definition of "issued" versus "authorized" that I don't understand now, I UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 19 of 133

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believe it to be inaccurate, unless there is a technical thing that happens when one piece of paper gets filed or something and the warrants go from "authorized" to "issued." I'm not familiar with something other than what we already did in early September that needed to occur. this looks to me to be inaccurate. Q Mr. O'Donnell, could you look at page 151 of your So at --

deposition, and it's in the second book. A Q A Q I'm at the page. Could you look at line 12 please, sir. Okay. Do you see that I read the same first sentence of paragraph I asked you

3 of this exhibit which I just read to you.

whether you see that language, and you answered, "I do." A Q Uh-huh. And then I asked you: "That's an accurate statement?" And you answered as follows: "This is an accurate statement, although I don't know if September the 12th is the exact date but -- well, it's an accurate statement because it's saying pursuant to a document dated that. So that is correct."

Now, that testimony was truthful? MR. THOMASON: Your Honor, under the rule of

completeness, could we have the next two questions and answers UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 20 of 133

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where he gives the same clarification he just gave here. THE COURT: MR. KAUP: Let's go on. You say "go on," to my next question or "go

on" and read the rest of it? THE COURT: MR. KAUP: Read the rest of it. You see then Mr. O'Donnell, I asked you to

read the rest of the paragraph to yourself and you answered: "Yes. I have read the rest to myself."

And then I asked you: "And you don't recall having told any lawyer at Snell & Wilmer that anything in the rest of this paragraph was inaccurate?" You then answered: "As we discussed this, I recall my comments in this discussion having to do with the difference between the existence and the issuance of the warrants. So I would have

taken exception to the fact that this document says they were not -- that the existence of the warrants actually occurred in November, which it doesn't say that. It says issuance.

So I would have probably -- I remember my contribution, my discussion being around the difference between issuance and existence. so I did not take exception to the fact that from a paperwork standpoint, the warrants were issued in early November, but that they existed in early September." You -- that testimony was accurate, sir? That was

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truthful? A now. It was truthful then, and I think that's what I just said I would have "taken issue" to mean somebody handed me the

piece of paper to reflect what they were authorized to do back in September. Would there be any reason now to educate me on the difference between "issued" and "authorized" so I know what we're talking about? THE COURT: THE WITNESS: No. That's fine with me.

It might help me better answer a question if I knew. Q BY MR. KAUP: Now, Mr. O'Donnell, during the summer of

1999, did you ever visit Mr. Mallery in his house? A Q A Q A Q A Q A I think I visited his house on two occasions. When? I can't recall specifically. Was it during 1999 that you visited his house? I believe so, yes. But you just don't know when in 1999? I don't know what day. Do you know what month? No. I wouldn't have any idea what specific date. You're You're asking me the dates or --

asking me if I have ever been to his house. on two different occasions. Q

I have, I think,

On those two occasions do you recall whether it was in the UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 22 of 133

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fall? A Q That could very well be the case. What was the reason you went to Mr. Mallery's house on

those two occasions in 1999? A It seems to me that one occasion I stopped by his house and

it was to pick up documents of some sort, and literally came into his front foyer. And I think we -- if I remember right,

we discussed some pleasantries, and I think he even lent me a book. In fact, it was the Queen's Bench Seven. He had a

little library there and I'm an avid book reader and he had lent me a book. On the next occasion, again, we were working seven days a week, twenty-four hours a day. And Mike Mallery was

trying to get Peter and I both together -- I'm mean, I'm sorry, Mike Donahey were trying to get us both together for a meeting. And I believe we had a meeting about the Founder's Warrants on this -- it would be a Saturday morning, I would guess. It seemed to be a weekend day, weekend morning, and

they were trying to get Peter and I both to sit in one place and listen to the issues regarding the Founder's Warrants. I think that might have been -- I think that might have been the meting that we held on that date at Dick Mallery's residence. These are very vague recollections. I'm

trying to give you the best I have. Q What did you discuss during that meeting? UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 23 of 133

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A

They -- I believe that's really the first time that I ever

became aware that there was an issue with any dates with regard to the Series A shareholders. I don't remember Mark Cardwell's

date of employment being an issue at that time, but I believe that's when the news was broken to Peter and I -- or maybe just myself. Peter might have already had some prior conversations

that because of the way those things were documented by Bryan, Cave, there could be an issue with the Founder's Warrants; and that Snell & Wilmer was looking into what the issues were. I believe that's what this document we just looked at was the -- the findings of those issues. And, you know, what the possible consequences of that were and, you know, discussed potential solutions. Q A Were you given any materials at that meeting? I don't remember. That might have been where I received

this letter. Q

I don't know.

Now, prior to you coming here to testify yesterday, had you

spoken with any lawyers representing Snell & Wilmer relating to the matters in this litigation? A I believe I called Snell & Wilmer and asked them to

represent me early on after the -- you know, when I first started receiving notices, they informed me they could not, that there was a conflict of interest. I met lawyers from Snell & Wilmer and their counsel at your office. I think I first attended Ray Gaston's deposition. UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 24 of 133

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I didn't have the money to pay my attorney to attend those depositions, so I saw attended myself. with everyone in that room at that time. you a complete answer. mind. Q After the date of your deposition, did you ever speak with And I would have talked I'm trying to give

Those are two things that come top

any lawyers representing Snell & Wilmer on matters relating to Visitalk? A Q No. Did you ever speak to any lawyers at Snell & Wilmer

regarding matters regarding this litigation? A I don't think I did. I think my attorney Joe Mayes from

Brown & Bain may have placed calls to Snell & Wilmer and that they were preparing a defense against similar issues and I would have had conversations with my attorney. I think -- he had conversations with me. I don't know

if he had conversations with Snell & Wilmer that were in-depth about the possibility of somehow, you know, me benefiting from some of the work they were doing so I didn't have to pay him to redo it or something. Those are vague recollections as well. I haven't had

But I have -- they're not my law firm.

any discussions with them or gotten advice from them pertaining to my involvement in this case directly. Q Did any lawyer at Snell & Wilmer ever tell you prior to

Visitalk's bankruptcy that the Series A investors held claims UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 25 of 133

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against Visitalk? A They told me that there was a possibility that the Series A

term sheet and the problems that it had, if it wasn't corrected, that they then would have claims; or that the way it stood, they could have claims and that was the reason we needed to address it. So that in the future they -- you know, wouldn't have cause to come back and assert a claim. They haven't made any

claims, but theoretically, someone could have had a claim and that's was why we did the work on the Founder's Warrants. Q Did any lawyer at Snell & Wilmer tell you that the Series C

investors have claims against Visitalk? A Well, we went through a protracted effort to get the Series

C term sheet and offering cleaned up and squared away, from a paperwork standpoint. That effort, I believe, resulted in them getting a right to rescind and receive their money back. And I think

that had to do with potential claims arising out of, you know, various sundry things that may or may not have been done properly prior to retaining Snell & Wilmer. Q Did Snell & Wilmer ever tell you that the Series C

investors held claims against Visitalk because there had not been disclosure to them relating to claims held by the Series A investors? A Again, I remember they were offered a right to rescind and UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 26 of 133

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that a number of issues were captured in that document. I don't recall if that was one or not, if that was one of the issues enumerated to them. I remember, specifically,

the Series A shareholders it being a concern that they could have potential claims; but if that cascaded down -- it seems like it did cascade down, but I don't recall specifically. Q Could you look at page 46 of the transcript of your

deposition please, sir. A Q Okay. Starting at line 1, I asked you: "Did any lawyer at Snell & Wilmer ever tell you that the Series A investors held claims against Visitalk due to the problems associated with the Founder's Warrants?" You answered: "I'm sorry. Repeat the question."

I had the question read back and then you answered: "Yes." Then looking down at line 18, I asked you: "Did any lawyer at Snell & Wilmer ever tell you that the Series C investors held claims against Visitalk because no disclosure was made to them of the claims held by the Series A investors?" And you answered: "I believe they did. And I believe that was explained

to me as part of the effort to get the Series C round completed UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 27 of 133

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was that that needed to be done.

And it also created a need to

let the Series C investors back out or rescind their investment if they chose to. I remember the Series A people had that, and I don't remember if B did or

I remember the C people had it. not, but I just don't recall."

Now, that testimony was truthful, sir? A Q A Q sir. A Q I'm there. Do you see at the upper third of the page the words Yes. Could you look at Exhibit 115 please, sir. Yes, I have it. Could you look at the third page of this exhibit please, Are you there?

"Characterizing the Issuance of the Warrants." A Q A Yes. Could you just read that paragraph to yourself, sir. Sure. Okay. Q I have read that section.

Did Snell & Wilmer ever tell the Visitalk board of

directors in a document that there was no known documentary evidence to support your assertions and the assertions of Mr. Thimmesch regarding the date that the Founder's Warrants were claimed to have been issued to yourselves? MR. THOMASON: Your Honor, I object. Lacks foundation

as to -- this document is phrased in the context in which it UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 28 of 133

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was given. THE COURT: THE WITNESS: Do you understand the question? Not really. And I don't understand the

document that I'm looking at. Wilmer to us? Q To Visitalk?

Is this a document from Snell &

BY MR. KAUP:

There is -- let me ask.

Do you recall having

seen Exhibit 115 at any time prior to the bankruptcy of Visitalk. A I'm not sure for certain, because I saw it at the You handed it to me then. Whether or not I saw it

deposition.

before then, I'm not certain. Q Well, aside from what's in the document, Mr. O'Donnell,

what I would like to know is -A Q Yes. -- did Snell & Wilmer tell the Visitalk board of directors

in a document that there was no known documentary evidence to support your assertions and Mr. Thimmesch's assertions regarding the claimed issuance of the Founder's Warrants? MR. THOMASON: THE WITNESS: THE COURT: THE WITNESS: Objection. Lacks foundation.

There wasn't -Just a minute. You may answer. It was

It wasn't about assertions.

about factually capturing what had happened, which we attempted to do with Bryan, Cave. Snell & Wilmer realized when they went through the UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 29 of 133

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book that there was a discrepancy in the dates and that there was an issue. It wasn't about assertions. It was about

getting it accurately reflected so that it was correct. In terms of documentary evidence, there were two guys that had started a company on that date and they had made a decision to offer stock and create shares out of nothing. You

know, just mathematically create a capitalization structure. And we gave all the documentation we had to Joe Richardson. I believe Cindy Thimmesch was present. She was

present at the meeting where the Founder's Warrants were created, as was Marcia O'Donnell, Peter Thimmesch, and myself. You know, we gave whatever documentary evidence we had to Joe Richardson at the time, which would have been, you know, it may have been Cindy Thimmesch's notes, et cetera. But

that -- you know, again, there was a couple guys and a piece of paper at the time. So we informed Joe Richardson of all of that and I had assumed he captured it accurately, but it appears mistakes were made. Q A Q And I appreciate that information. Uh-huh. Mr. O'Donnell, my question was did Snell & Wilmer ever tell

the Visitalk board of directors in writing that there was no known documentary evidence to support your and Mr. Thimmesch's versions of the events relating to the issuance of the UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 30 of 133

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Founder's Warrants? A If they handed this document to us, the answer to that And they might have. I don't recall

question would be "yes." specifically.

I remember them coming to us, you know, very intently and making us focus on this issue when we had a lot of other pressing issues to focus on in terms of running the company to look at this issue. And I know they impressed upon us that

there were very serious issues that needed to be corrected or we couldn't move forward. And they were successful in getting

us to pay attention to these issues and review the matters that were concerning to them and look at possible solutions. One of which was for us to completely surrender the warrants. I believe that was the first solution they proposed.

And I believe that was probably the solution that -- at the first meeting when I first heard about it, which I wouldn't have recalled being at Dick Mallery's residence until you brought it up. But while we were there, I'm pretty sure I was

told, There's a good chance your Founder's Warrants will just have to go away, you know, because this problem may not be solvable. It may not be something we can correct. And if that's the case, you will have to surrender your warrants and appeal to the board and things to remedy this in a different way. If we can't remedy it legally through documentation, UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 31 of 133

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we will need to remedy it in a different way.

And all of those

avenues were explained to me in extensive -- I won't say exhaustive, but extensive detail. And they were successful in Now

making me, you know, pay attention to all these issues. these types of issues were discussed.

I don't believe anybody asserting that they didn't think that it occurred that way or I don't remember having a discussion about evidentiary -- you know, nothing evidentiary backing up our claims. No one disputed our claims.

There was no person -- Mark Cardwell who was present when we gave all this information to Joe Richardson at the later date, the Series A shareholders, there was nobody claiming that we didn't have those Founders Warrants. was not a dispute there. Q Did Snell & Wilmer ever tell the Visitalk board of There

directors in any type of writing that the Action by Unanimous Consent relating to the Founder's Warrants, Exhibit 105, was ineffective as of October 22, 1999? A Q A Do you want me to look at 105, or -Sure. So -- I'm sorry. Would ask you me again. Did they say

what to us? Q

Ineffective?

Would you just reread the question to the witness, please. (Requested portion of the record read back by reporter.) THE WITNESS: Well, they were very clear that there

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was a significant problem with the Founder's Warrants. that I don't remember the words "ineffective."

And

I remember them

discussing that the way they were documented would cause problems downstream and that those problems had to be corrected or it could, you know, jeopardize the health of the company at a future date. That language might have been used, but I can't say for sure now. Q Did you ever threaten to sue Visitalk if Visitalk did not

recognize your claimed right to the Founder's Warrants? A Nobody was questioning my claim. Nobody threatened to take

it away.

I understood, because we had amateurishly documented I

the early history of the company that they were in jeopardy. believe I accepted that. I didn't like that.

I was determined

to explore what alternatives there were, if any. I don't -- I don't ever get into -- I don't remember getting to a point where I thought I might sue or I don't believe that came up. Q Did you ever tell anyone at Snell & Wilmer that you were

going to sue Visitalk if Visitalk didn't recognize your right to the warrants? A What I remember about discussions with regard to me and

suing the company was that one of the concerns about the Founder's Warrants -- and again, they had to be handled properly and fairly -- some solution that was fair had to be UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 33 of 133

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remedied, it had to be offered. And one of the concerns was that if we just surrendered them or, you know, were forced to just give them up, that we could have a claim; and that the company would be in just as much jeopardy. And so I think there was just as much concern about handling the Founder's Warrants unfairly with regard to Peter and I as they were concerned about the Series A shareholders. That if we gave them up unjustly and unfairly because of a documentation error, that we could potentially have a claim. I don't recall anybody wondering if Peter and I were

going to sue ourselves. Q So is that a "no, you didn't tell anyone at Snell & Wilmer

that you would sue Visitalk if Visitalk didn't recognize your claimed right to the warrants." A I don't think I precluded it in the discussion that there

would be a potential claim there, but the discussion never reached a point where I would have said, "I'm going to sue if I don't get blah, blah," So I'm certain I did not threaten to sue the company. Q Did you ever tell anyone at Snell & Wilmer that you would

leave Visitalk if Visitalk didn't recognize your claimed right to the Founder's Warrants? A Again, it never got to that point. We crafted a solution

and the solution, I was told, was legal and effective and was UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 34 of 133

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successful. And so it never got to a point where I contemplated the consequences of not, you know, having those Founder's Warrants. company. So, no, I did not tell anyone I would leave the In fact, I think the opposite. I think I agreed that

if our solution wasn't effective, that I would volunteer to give up the Founder's Warrants. Q A Q Could you look at Exhibit 117 please, sir. I have it. Do you see that the first page of Exhibit 117 is a memo

from Mr. Donahey to the board of directors dated November 2, 1999? A Q Yes. Did you receive this document which is Exhibit 117 in

November of 1999? A Q A Q Yes. Did you read it? Yes. Did the board -- was this -- did you understand when you

received and read this document that it was being provided to the board to assist the board in deciding what to do about the problems regarding the Founder's Warrants? A Q A Yes. This is what we had asked Snell & Wilmer to do. Are you there, sir?

Could you look at Exhibit 121, please. I am.

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Q

Take a moment to look at Exhibit 121 to make sure you're

familiar with it. A Okay. I haven't read it all. I have read a significant

portion of it. Q A Do you have an understanding about what Exhibit 121 is. Yeah it's the minutes of a board meeting held on November

24, 1999. Q First, sir, do you recall having seen Exhibit 121 at any

time after November 24, 1999, but prior to the date Visitalk filed for bankruptcy? A Prior to the date -- I would be very confident that I would

have received this at the next board meeting and read them and approved the minutes, but I can't say for certain. It looks -- I mean, this is a standard board meeting minutes. Q I read them all the time.

Do you recall having voiced any concerns after the date you

received and reviewed this document about whether this document accurately reflected the matters that were discussed and agreed to at that meeting? A I'm sorry. I'm going to ask you to repeat the question. I

was still reading. Q A Could you reread it? I'm sorry. (Requested portion of the record read back by reporter.) THE WITNESS: I don't recall and I haven't read the

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document to see if there is anything in it that I don't recall -- that I would have disagreed with. Q BY MR. KAUP: Aside from reading the document, sir, do you

recall anything about the Visitalk board of directors' meeting that occurred on November 24, 1999? A Q As I read these minutes, I do remember that meeting. Aside from what you read, do you have an independent

recollection of what happened at that meeting? A I do. I remember being at that meeting and these minutes

followed what I remember to be the -- pretty much the board agenda, things the board was dealing with. Q Do you recall Mr. Mallery and Mr. Donahey having been

present at that meeting? A Q I recall them being present at a number of board meetings. Do you see the bottom of the first page a bullet point that

says "Stephen Best Ratification"? A I do. And I also see that Richard Mallery and Michael

Donahey were present at the meeting, as was my Executive Assistant Amanda Turley. Q Do you recall matters regarding the changes to Mr. Best's

contract being discussed at this meeting? A Q A Q I don't remember the details. But do you remember that subject matter being discussed? Yes. Look at the next page. Do you see the bullet point for

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"Phone Free Litigation"? A Q I do. Do you recall that matter was discussed during this board

meeting? A Q A Q I do. Do you see the next bullet point says "Series C Round"? I do. Why don't you take a minute to read the texts under Series

C Round through the next bullet point on the next page, which is page 3, to yourself. A Q Through the top of page 3, just that one paragraph? Well, through the bottom of page 3 where you see the bullet

point that starts "Partnerships." A Q Okay. Do you recall those matters were discussed at this board

meeting? A Q I do. Do you see the bottom of the page, the bullet point

"Partnerships"? A Q I do. Do you recall that the topic of partnerships with MP3 and

china.com were discussed at this meeting on November 24, 1999? A Q I do. Do you see the bullet point on page 4, "Employee Stock

Incentive Plan"? UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 38 of 133

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A Q

I do. Do you recall that that meeting was -- that that topic was

discussed at this meeting? A Q I do. The bottom of the page, do you see the bullet point

"Founder's Warrants"? A Q I do. Do you see the line that says, "The background on the

Founder's Warrants was explained to the board." A Q I do. Who explained the background on the Founder's Warrants to

the board at this meeting? A I believe -- I can't say for sure. If I had to guess, I would guess it would have been Mike Donahey. Q What was discussed about the background of the Founder's

Warrants at this meeting? A That there were several solutions, each of them had

potential problems with potential claims that would arise. There was a solution to just go back and have the Series A shareholders acknowledge that they knew about the Founder's Warrants, which they did. sheet. I think to a man they became investors in Series B, so they all knew about the Founder's Warrants by then, if not UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 39 of 133 They all signed the Series B term

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before, and to have them sign a new term sheet and waive any claims. The board, in the self-interest of Series A shareholders, was not skeptical, but not optimistic that they would necessarily do that. But they said, Hey, you know, that

certainly gets us to -- that certainly gets us to being corrected. If they will do that, that will be a good solution.

Peter and I agreed that if that wasn't the case, we would just surrender them. As it turns out, they were willing

to do that and they agreed to it almost immediately. Q And is that it that was discussed regarding the background

of the Founder's Warrants? A I would image there was probably more detail with regard to I mean, the

some of the other solutions that were possible.

document you handed me before went into a lot of detail about multiple -- multitudes of options or, your know, various options. And I believe it went into a significant amount of

detail on each of the different possible solutions. Q Do you see the second sentence under the heading "Founder's

Warrants" says that the board went into executive session where the alternatives were reviewed? A Q A I do. Who participated in that executive session? Executive session was usually -- it seems to me executive

sessions were just the members of the board without counsel or, UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 40 of 133

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you know, other secretaries and things of that nature.

I

believe that was -- I believe that's what the executive session was. Q And you seem to be testifying about what generally was done

in an executive session, meaning the board of directors of Visitalk? A Q Right. I was asking specifically about who participated in this

executive session meeting of Visitalk's board of directors? A I know I did and the rest of the board members did. I

don't recall if anyone else did as well. Q Now, you said you participated and the rest of the board. Does that mean you and Mr. Thimmesch participated in the discussions regarding the alternatives for the Founder's Warrants? A Q I believe so. Did you and Mr. Thimmesch vote on the solution the board

would adopt to deal with the problems regarding the Founder's Warrants at this meeting? A I don't recall. I don't see anything in the minutes saying If that was the case,

that we were asked to excuse ourselves. we would have excused ourselves. recall. Q A

I'm not sure -- I can't

You don't recall voting on this matter? No. UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 41 of 133

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Let's say I don't recall not voting on it.

I may have

been asked to step out or something, but I don't recall that. It's not in the minutes. I remember voting on hundreds and

hundreds of issues as a board member. Q A Q A Q A If you go over on page 5, sir. Yes. Do you see there's a bullet point for "Direct Sales Force"? I do. Do you recall that matter was discussed at this meeting? Yeah. In fact, that was a matter that I was -- you know, I

was the champion on that issue and I would have been the one reporting to the board on the progress of that effort. Q A Q A Q A Q Do you see on page 6 a bullet point for "CFO Direction"? I do. Do you recall that matter was discussed at this meeting? I do. And then do you see the bullet point for "COO Direction"? I do. And do you recall that that agenda item was pushed to a

future meeting? A That's what the minutes say. I recall all of these issues

being issues that were discussed, and you know, ongoing board meetings, numerous board meetings. Q A Do you see the bullet point "Open Issues"? I do. UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 42 of 133

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Q

Do you see under that the words, "There were no other

issues brought before the board." A Q I do. Is your recollection of this meeting consistent with that

statement? A I have no specific recollection about whether there were I'm reading that in the minutes like you.

other open issues.

I don't -- I would have no reason to not believe that was the case. Q Well, I just want to be clear, sir. Aside from all the

matters that we looked at in this -- in these minutes, do you recall whether there were any other issues that the board of directors discussed at this meeting on November 24, 1999? A Perhaps my memory isn't as good as others. This meeting

took place almost then years ago, so I remember all of these issues in very good detail, because I was concerned about them from business matters. I don't necessarily able to give you a specific recollection about sitting at a table at this particular meeting and having -- you know, I do remember each one of these issues -- each of these issues individually. my input was and what was said to me. I don't necessarily associate a conversation from one board meeting to another board meeting so that I could say I remember this happened at this meeting and this happened at UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 43 of 133 I remember what

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that meeting. Q A Q Could you look at Exhibit 123 please, sir. Yeah. I have it.

Do you see the first page of Exhibit 123 is a letter from

Mr. Kaplan to Susan Cole dated November 29, 1999? A Q A Q A Q I do. And the next three pages are Release of Claims? I do. Could you look to the last page of the Release of Claims? Yep. Do you see that -- first is that your signature on the

right-hand side of the page? A Q It is. Did you review -- well, first, my question is: Do you know whether Releases of Claims were sent to each of the Series A investors at the end of November of 1999? A That's what I understood was to happen, and that's what I

understood did happen. Q Did you sign all of the Releases of Claims on behalf of

Visitalk? A Looking at one of them here, I would guess that I signed

the other ones as well. Q A Q Let's just look at this one then, sir. Yeah. That's my signature.

Did you review this Release of Claims document before it UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 44 of 133

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was sent to Ms. Cole? A This was prepared after the board meeting. I'm sure that I

looked at it.

I'm doubtful that I probably read it with great

care, but I knew what was in it and looked over it to make sure that it made sense based on what we had decided. signed it when it came back. Q A Q Do you know who prepared the Release of Claims document? I do not. I would guess Snell & Wilmer. And then I

Did you ever discuss with anyone at Snell & Wilmer the

information contained in the recitals of the Release of Claims before you executed this document and caused it to be sent out to Ms. Cole? A Q I'm sorry. I lost track of the point of the question.

Let me ask it this way: Did you ever discuss with anyone at Snell & Wilmer the

information disclosed in the recitals of this or any other Release of Claims document to the Series A investors? A I believe the board directed them to do that and I think we

assumed that, you know, they would understand the content of the document and relied upon them to put together a document that had that content. And when I got this back, that's probably why I would not have spent a lot of time reading it. I would have looked

it over and made sure that in general it made sense to me and signed it. UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 45 of 133

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Q

And I appreciate that, but did you then speak to any lawyer

over at Snell & Wilmer about this document? A I don't recall. I know they were directed to do it. It's very likely that I It

would have been given back to me.

would have had it handed back to me by Stephen Best, our general counsel or inside counsel. And I would have expected him to have that dialogue and prepare it for me with a brief discussion. Q Mr. O'Donnell, you mentioned earlier a meeting regarding Do you

the Founder's Warrants between you and Mr. Thimmesch. know when that meeting occurred? A

It occurred after we incorporated and it occurred before we

presented term sheets to the Series A investors. Q A Q A Q Do you know what month in which that meeting occurred? Early September. Do you know when in early September? I believe that it happened on or about September 12th. You mentioned earlier in your testimony that Mrs. O'Donnell

was present and Mrs. Thimmesch was present at this meeting. Was anyone else present at that time? A Q A Peter Thimmesch and myself. Just the four of you? Correct. Two members of the board. Cindy was the

Secretary or Treasurer and Marcia O'Donnell. Q Where did this meeting occur? UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 46 of 133

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A

It occurred in my garage.

Visitalk had no offices.

We

were officed primarily in Peter's house, in his bedroom specifically. I believe we had -- we earlier in the evening had been to dinner. I think we had actually been at Peter's house And we were arriving back at

talking with interested parties.

my house and he was dropping me off at home, I believe, and my children were in the house and I believe asleep with a baby-sitter. And so they were kind of dropping us off. And we had

meetings the next day where we needed to have that business concluded. And so Peter had floated the idea -- I believe he

got the idea from Joe Richardson that we could change the capital structure of the company without backing up and changing the documents, the offering documents, by adding Founder's Warrants. And so Peter had floated the idea by me. sense. And so we decided we should do that. It made

We called a It was voted on.

meeting of the board and that was proposed.

That was the only item of business in that meeting and the meeting was concluded. Q A When did you call the meeting of the board? In the garage. We were talking about the matter in the car Peter was dropping me off. We

on the way home from dinner.

realized that it was the last time we would be together prior UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 47 of 133

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to the meetings the following day.

And so we realized we

didn't have another opportunity to do that, so we decided to do it right then. We did it and moved on to the meetings the next day. I believe that's how the -- that's why those -- I don't know that I -- I had never seen a term sheet before in my life. had never prepared one. I had never subscribed to one. I

I had

never sold stock in any of my previous ventures. I had been involved in a couple startups that were self-funded, and I had not seen a Series A term sheet. I

don't -- I believe I didn't realize at the time that warrants or options should be on a term sheet. I mean, it seems obvious

to me now, but it didn't occur to me then. But we knew that we needed to have the capital structure set before we sold stock in the company, and that was why we had that meeting then. Q A Q A Was there a prior notice of this board meeting? To who? To the directors? That would have been the preceding fifteen minutes in the

car where we decided that it would be a good idea -- I mean the idea had come about again from Peter earlier in the day, having prepared a term sheet. After preparing the term sheet, not wanting to change the term sheet, had talked to Joe Richardson. He had floated

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the idea -- you know, as one of the solutions -- and so Peter brought it up at dinner and we discussed that and came to the conclusion that was the easiest way, retrospectively not the best way, to remedy the problem. And so he and I were the only two shareholders and directors in a company with no money at that time, so there was not a formality that was, you know, I don't think there was an expectation of formality. Q Had you and the Thimmesches been anywhere prior to dinner

that day? A I believe we were at his house where we were talking to

potential employees, potential investors, potential -- you know, people interested in our idea. Q Other than that, had you been anywhere with the Thimmesches

earlier in the day? A Q I don't recall. Did the board -- were written minutes prepared for this --

after this meeting that you say occurred on September 12, 1998, regarding the Founder's Warrants which were then approved by the board at a subsequent meeting? A Did that action at that meeting which was authorized and

approved at that meeting, did we bring it up at a different meeting? Q No, sir. What I asked is:

Were written minutes of the meeting you say occurred UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 49 of 133

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on September 12, 1998, regarding the Founder's Warrants prepared after that meeting, which were then approved by the board at a subsequent meeting? A It was still sometime before any kind of semblance of

formality -- which we did end up, you know, having at future meetings. There was no semblance of that formality. And the

next board meeting that we had would have -- I don't know if Peter and I had another meeting before Mark joined the board. Later on, Mark joined the board. And I think at some

point after we had had meetings with Joe Richardson where we were trying to construct the corporate documents and stuff, I think we tried to become more formal. Q A Q Mr. O'Donnell, do you have Exhibit 25 there? I have it. Sir, do you recall having seen Exhibit 25 in -- during the

fall of 1999? A Q A Q A Q I haven't read the document. Take a minute --

It doesn't really look like a document -Take a minute to familiarize yourself with it, please. Okay. I think I'm familiar with the document.

Do you recall having seen the e-mail that is dated

October 28, 1999, during 1999? A I think so. I remember the meeting she is referring to and UNITED STATES DISTRICT COURT Document 509 Filed 04/22/2008 Page 50 of 133

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I remember the information she's giving us here. Q A Do you know who Kimberly Clouse is? Yeah. Kimberly Clouse was an associate of Peter Mindich.

Goldman Sachs.com being very concerned that we were eminently to become billionaires, had put us in working association with their estate, private wealth management practice, and they flew to Phoenix and were concerned with us getting our affairs in order prior to future offerings which were expected later on in 2000. Q Did you ever speak to Ms. Clouse about attorneys who could