Interserve, Inc. et al v. Fusion Garage PTE. LTD

Filing 175

Declaration of Patrick C. Doolittle in Support of Memorandum in Opposition to Motion for Preliminary Injunction (Re-filed pursuant to order dated 9/10/2010) filed byFusion Garage PTE. LTD. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G)(Doolittle, Patrick) (Filed on 9/16/2010)

Interserve, Inc. et al v. Fusion Garage PTE. LTD

Doc. 175 Att. 7

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EXHIBIT G

Dockets.Justia.com

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ChandraRUf.TXT

1 2

DISCLAIMER The material contained in this ASCII

3 file, the deposition of Chandrasekar Rathakrishnan, 4 taken April 22, 2010, at the offices of Winston & 5 Strawn, has not been reviewed or proofread by the 6 court reporter . Any reference to page and line
This ASCII is not It is for review only.

7 number will not be accurate . 8 certified by the reporter . 9 10 --000-THE"VIDEOGRAPHER :

Here begins volume 1,

11 Videotape No. 1, in the deposition of Chandra

12 Rathakrishnan , in the matter of Interserve, Inc., 13 versus Fusion Garage , in the united states District 14 Court, Northern District of California, case 15 No. C 09 - cv-5812 RS (PVT). 16 April 22nd , 2010 . 17 10: 14. Today's date is

The time on the video monitor is

Your video operator today is 7ennifer

18 McKay , a notary public contracted by Merrill Legal 19 solutions , San Francisco , California . This video

20 deposition is taking place at Winston & Strawn in 21 San Francisco , California.

22

counsel, please identify yourselves and

23 state whom you represent.
24 MR . DOOLITTLE : Patrick Doolittle for

25 Fusion Garage.

1
UNCERTIFIED TRANSCRIPT - FOR REVIEW ONLY

1

MR. SOHN :

J oshua Sohn for Fusion Page 1

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chandraRuf.TXT 2 Garage.
3 MR. BRIDGES: Andrew Bridges with

4 Matthew Scherb and David Bloch for the plaintiffs, 5 and also attending is Michael Arrington, a client 6 representative. 7 THE VIDEOGRAPHER: The court reporter

8 today is Debbie Allustiarti of Merrill Legal

9 Solutions.
10 11 witness.
12 13 THE VIDEOGRAPHER: MR. BRIDGES: Q. Please, begin. Good morning,

would the reporter please swear in the

14 Mr. Rathakrishnan.

15

A.

Good morning.

16
17 record. 18

Q.

Please state your full name for the

A.

My full name is Chandrasekar

19 Rathakrishnan.

20 21

Q. A.

can you please spell both those names. C -h-a-n-d-r-a-s-e - k-a-r; Rathakrishnan

22 is R-a-t-h-a-k-r-i-s- h-n-a-n. 23 24 Q. A. where do you live? I live in Singapore.

25

Q.

what's your home address?
2
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1
2

A.

My home address is 501
THE REPORTER: I'm sorry. I didn't hear

3 the street name.
4 THE WITNESS: It's Pasir Panjang, which Page 2

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20 21 ambiguous. 22

ChandraRuf.TXT MR. DOOLITTLE: Objection, vague and

THE WITNESS:

We were in acquisition

23 discussions and that's how the name came up. 24 MR. BRIDGES: Q. You named -- you used

25 a code name for a product -- sole product you were 29 UNCERTIFIED TRANSCRIPT - FOR REVIEW ONLY

1 developing because of acquisition discussions; is 2 that your testimony?
3 MR. DOOLITTLE: Objection,

4 argumentative.

5

THE WITNESS:

No.

My testimony is that

6 we were working on a product, and we were looking 7 to be acquired. And because we were looking to be 8 acquired by CrunchPad, Inc., we were referring to 9 the product we were working on as "CrunchPad."
10 MR. BRIDGES: Q. And in September 2009,

11 was your -- was your presentation to investors

12 about the opportunity to be acquired by TechCrunch 13 or CrunchPad? 14 A. we did reference that we were in

15 acquisition discussions with CrunchPad. 16 Q. Were you representing -- during your

17 presentations to potential new shareholders, did 18 you state that the goal of the company was to be 19 acquired by TechCrunch or CrunchPad? 20 21 ambiguous. 22
THE WITNESS: No, we did not state that MR. DOOLITTLE: Objection, vague and

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23 as a goal.
24 MR. BRIDGES: Q. was it a goal of the

25 company to be acquired by CrunchPad or TechCrunch

30
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1 in September 2009? 2 A. We were interested in being acquired.

3 It wasn't a goal.

4

Q.

were you interested in walking away from

5 an acquisition by TechCrunch or CrunchPad in
6 September 2009? 7 THE WITNESS : If the terms of the

8 acquisition deal did not make sense , we were 9 prepared to walk.
10 MR. BRIDGES : Q. And what were the

11 latest terms of an acquisition deal that existed in 12 September 2009? 13 MR. DOOLITTLE : Objection. Assumes

14 facts not in evidence , lacks foundation.
THE WITNESS : There wasn't an official

16 term in place because we did not receive an 17 official term sheet in September 2009.
MR. BRIDGES : Q. Had you ever received

19 a term sheet? 20 A. we only received a letter of intent that

21 was never signed in December 2008.

22

Q.

Had you had any discussions or

23 correspondence with anybody at TechCrunch or 24 CrunchPad about terms of an acquisition?
25 MR . DOOLITTLE : Objection, vague and

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1 ambiguous.
2 THE WITNESS: I recollect having a-mails

3 being sent in relation to proposed -- possible

MR. BRIDGES:

Q.

Do you recall

6 indicating that any particular terms were 7 acceptable to Fusion Garage? 8 9 10 11 12 A. No, not in September 2009.
THE REPORTER: THE WITNESS: THE REPORTER: MR. BRIDGES : I'm sorry. What?

No, not in September 2009. Thank you. Q. At any time?

13
14

A.
Q.

No.
What financial accounts does Fusion

15 Garage have? 16
MR. DOOLITTLE: Objection, confidential,

17 and I guess I'll designate this part of the 18 transcript attorneys' eyes only. 19 MR. BRIDGES: Well, we know that some

20 materials are public, so I'd like -- let's get the 21 public -22 23 p ublic? 24 25
THE WITNESS: MR. BRIDGES : Not that I know of. Q. Is it not a public MR. DOOLITTLE: Is there anything

32
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22 23 ambiguous. 24

MR. DOOLITTLE:

Objection, vague and

THE WITNESS :

We had been in discussion

25 about Plan B probably sometime since
103 UNCERTIFIED TRANSCRIPT - FOR REVIEW ONLY CONFIDENTIAL - PURSUANT TO PROTECTIVE ORDER

1 September 2009, and, again, that's to my best 2 recollection.
3 MR. BRIDGES: Q. What do you mean by

4 "Plan B" in that context?

5

A.

As I said, we were in discussions to be

6 acquired, but as an entity, we had to make sure 7 that we could continue to grow the business even if 8 an acquisition does not happen. So that's what we 9 meant as what constituted Plan B. 10 Q. So you were discussing , as early as

11 September 2009, the launch of a web tablet under 12 Fusion Garage's own brand?
13 MR. DOOLITTLE : Objection. Misstates

14 testimony, lacks foundation.

15 16

You can answer. THE WITNESS: So the point about when we

17 started discussing our own brand tablet, we started 18 discussions on that since the inception of the 19 company in February 2008.
20. MR . BRIDGES : Q. You discussed

21 producing a tablet under Fusion Garage ' s own brand 22 as early as what time?

23
24

A.

February 2008.
MR. DOOLITTLE : Objection, misstates his Page 94

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1 that?
2 A. Because I'm involved in almost any of

3 those discussions. 4 5 Monier? 6 7 A. Q.
Yes.

Q.

Did you ever have discussions with Louis

what kind of conversations did you have

8 with Louis Monier? 9 10 overbroad. 11 12 But you may answer. THE WITNESS: Louis wanted our software
MR. DOOLITTLE: I'll just object. It's

13 for use on Prototype B, that he was working on for 14 CrunchPad, and we had discussions pertaining to 15 that; and he was tasked with doing due diligence 16 for CrunchPad's intended acquisition of Fusion 17 Garage.
18 MR. BRIDGES: Q. Did he make

19 suggestions regarding the design or development of 20 a web tablet?
21 MR. DOOLITTLE: Objection, vague and

22 ambiguous as to the term "a web tablet."
23 MR. BRIDGES: Q. Did he make

24 suggestions to Fusion Garage regarding the design 25 or development of the web tablet that Fusion Garage 201
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1 was working on?
2 3 MR. DOOLITTLE: THE WITNESS: Objection NO.

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4 5

MR. DOOLITTLE: MR. BRIDGES: Q.

-- vague and ambiguous. He made no

6 suggestions? 7 A. He did not make any suggestions to the

8 web tablet that Fusion Garage was working on. 9 Q. Did he make any suggestions to Fusion

10 Garage at all about anything? 11 MR. DOOLITTLE : Objection . Vague and

12 ambiguous, overbroad.
THE WITNESS : MR. BRIDGES: Yes, he did. Q. What?

A.

That the project did not have any legs

16 to continue.
THE REPORTER: THE WITNESS : I'm sorry? That the project did not

19 have any legs to continue. 20 21
THE REPORTER : MR. BRIDGES : Any legs? I'm going to move that --

22 I'm going to move to strike that as nonresponsive. 23
24 25 responsive. 202 UNCERTIFIED TRANSCRIPT - FOR REVIEW ONLY HIGHLY CONFIDENTIAL - ATTORNEYS ' EYES ONLY

Q.

I'm asking whether -MR. DOOLITTLE : I think it was

1

MR. BRIDGES:

Q.

--

whether Louis

2 Monier made any suggestions at all regarding the 3 design and the development of the web tablet that 4 Fusion Garage was working on? 5 A. No.

Q.

Did Brian Kindle ever make any Page 183

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ChandraRuf.TXT 7 suggestions to Fusion Garage regarding the design

8 or development of the web tablet that Fusion Garage 9 was working on? 10
A.

No.

11

Q.

Did Nik cubrilovich make any suggestions

12 to Fusion Garage regarding the design or 13 development of the web tablet that Fusion Garage 14 was working on? 15 16 A. Q. No. Did Michael Arrington make any

17 suggestions to Fusion Garage regarding the design 18 or development of the web tablet that Fusion Garage 19 was working on?

20
21

A.
Q.

No.
Did anybody from TechCrunch or CrunchPad

22 influence the design or development of the web 23 tablet that Fusion Garage was working on?
24 MR. DOOLITTLE: Object as vague and

25 ambiguous as to the term "influence." 203 UNCERTIFIED TRANSCRIPT - FOR REVIEW ONLY HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY

1 2 that.

THE WITNESS:

I was just going to ask

what do you -- what's the definition of

3 "influence" in this context?
4 MR. BRIDGES: Q. I think -- I think you

5 can try to answer it as phrased. 6 MR. DOOLITTLE: Well, he's asking you

7 for clarification. 8 for clarification. 9

You've invited him to ask you

MR. BRIDGES:

I know, and I will do that Page 184

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ChandraRuf.TXT 7 8 9 too. 10 MR. BRIDGES: Actually , I think the A. Again, I ' m really confused right now. MR. DOOLITTLE : I'm sort of confused,

11 record's going to show what I mean. I think it's 12 going to.

13

Q.

There are only two investors in the

14 company that you have failed to identify today in 15 this deposition ; is that correct?

16
17

A.
Q.

Yes.
And those only two investors , whom we

18 are calling Investor A and Investor B, first 19 invested in January 2010, right? 20 21 A. Q. Yes. okay . Can you please tell me when the

22 due diligence process for a potential acquisition 23 of Fusion Garage by CrunchPad began. 24
25

A.

I would say October 2008.
MR. DOOLITTLE: Are you asking this 245 UNCERTIFIED TRANSCRIPT - FOR REVIEW ONLY

HIGHLY CONFIDENTIAL - ATTORNEYS '

EYES ONLY

1 about CrunchPad or also about TechCrunch?
2 MR. BRIDGES : Q. Well, the acquisition

3 was to be by crunchPad , Inc., correct?
4 A. Yes.

5

Q.

And you understood that TechCrunch and

6 Michael Arrington established CrunchPad , Inc., as a 7 company that has as its goal the commercialization 8 of the CrunchPad web tablet , correct?
9 MR. DOOLITTLE: Calls for speculation. Page 222

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ChandraRuf.TXT 10 THE WITNESS: Yeah, I'm not sure what

11 his reasons were. 12 13 understood.
14 15 MR. DOOLITTLE: THE WITNESS: Calls for speculation. Yeah, that he wanted to

MR. BRIDGES:

Q.

I'm asking what you

16 create -- yes, he wanted to create a company to 17 launch a web tablet. 18 MR. BRIDGES: Q. And that company was

19 CrunchPad, Inc. --

20 21 22

A. Q.

Yes. -- to your knowledge? So from October 2008 until

23 November 2009, what did you understand to be all of 24 the due diligence activities that you can recall, 25 in connection with a potential acquisition of
246 UNCERTIFIED TRANSCRIPT - FOR REVIEW ONLY HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY

1 Fusion Garage by CrunchPad?
2 MR. DOOLITTLE: I'll just object.

3 Overbroad, vague as to time, vague and ambiguous. 4
5

But you may answer.
THE WITNESS: The question was, what can

6 I identify as the due diligence process from the

7 period of October 2008 to November 2009?
8 MR. BRIDGES: Q. What are all the

9 activities that you recall associated with the due 10 diligence process during that time; from 11 October 2008 to November 2009? 12 A. This is going to be a long story, but Page 223

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ChandraRuf.TXT 13 there are breaks in between.

14 15

Q. A.

That's okay. October 2008, when CrunchPad first

16 engaged with us, they wanted us -- well, they saw a 17 demonstration of our product, and they wanted us to 18 provide the software for what they would call 19 Prototype B; our browser software for what they 20 would call Prototype B. 21 Q. okay. And you say they saw a demo of

22 your product? 23 24 A. Q. Yes. what was your product that they saw the

25 demonstration of?
247 UNCERTIFIED TRANSCRIPT - FOR REVIEW ONLY HIGHLY CONFIDENTIAL - ATTORNEYS ' EYES ONLY

1

A.

They saw our browser operating system

2 running on a netbook during a meeting that I had 3 with them. 4 Q. And your product at that time was a

5 software program in the nature of a browser
6 operating system, correct? 7 A. Yes.

8

Q.

And so you said that Techcrunch --

9 strike that.
10 So you said that CrunchPad wanted Fusion

11 Garage to provide software for Prototype B, 12 correct?

13

A.

Let's take a step backwards. They saw

14 the demonstration -15 Q. Right. Page 224

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ChandraRuf.TXT 16 A. -- and suggested that they wanted to

17 acquire the company.

18
19

Q.
A.

Right.
where the acquisition would involve a

20 due diligence process. 21 Q. Yes. And I'm just trying to find out

22 all the steps in that due diligence process. 23 A. Sure. so the first part to that, they

24 wanted us to provide software -- the browser

25 software for their Prototype B, which we did in
248 UNCERTIFIED TRANSCRIPT - FOR REVIEW ONLY HIGHLY CONFIDENTIAL - ATTORNEYS' EYES ONLY

1 December -- between December 2008 and 2 February 2009. 3 Q. what was the next step in the due

4 diligence process?

5

A.

They gave us a letter of intent based on

6 that in December 2008, where they provided for -7 where they laid out a certain set of terms, and we 8 had replied via an e-mail suggesting that those 9 terms were not acceptable, and we counter-proposed 10 a certain set of terms against what they provided 11 for. 12 Q. okay. what was the next step of the due

13 diligence process? 14 A. They said they needed to raise money for

15 CrunchPad, and we were trying to use Prototype B to 16 raise money for CrunchPad. 17 MR. BRIDGES: I'm sorry. What was the

18 end -- can you just read the last clause, please, Page 225

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19 of the answer. 20
21

(Record read.)
MR. DOOLITTLE: Madam court Reporter,

22 this doesn't need to be marked "confidential 23 Attorneys' Eyes only." 24 25
THE REPORTER: MR. DOOLITTLE: It doesn't? Does not.

249
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1
2

(Nonconfidential testimony resumed.)
MR. BRIDGES: Q. what was the next step

3 of the due diligence process? 4 A. So this led up to end February 2009, and

5 during which time, I'd got no response back for the 6 counteroffer that we had for the letter of intent 7 that they provided; except for suggesting that they 8 were reviewing it, and they would revert soon.
9 10 MR. DOOLITTLE: THE WITNESS: They would what soon? They would revert soon;

11 something to that effect. 12 MR. BRIDGES: Q. what was the next step

13 of the due diligence process?

14

A.

There wasn't a next step because Louis

15 Monier suggested that raising money for this would 16 be difficult and the project had no legs to 17 continue. 18 Q. You say there was no next step in the

19 due diligence process? 20 A. At that point in time. Because they

21 came back and said that they were not -- that they Page 226

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ChandraRUf.TXT 22 were not able to raise the money required for the 23 project, and in his opinion, the project had no 24 legs to continue. He specifically said this after 25 a meeting with Google ventures.

250
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1

MR. DOOLITTLE:

Can I just ask you to

2 clarify? Do you mean there was no more due 3 diligence in this early 2009 time frame?
4 5 February. 6 MR. BRIDGES: Actually, I -- I THE WITNESS: There was a date ended in

7 understand, but I think I need to let you ask 8 questions when I'm through. 9 Q. so when did Louis Monier make this

10 suggestion you just referred to? 11 A. somewhere late February 2009.

12 13
14 15 16 17

Q. A.
Q. A. Q. A.

In what context did he say that? Don't understand.
Did he say it to you directly? Yes. where? via an e-mail first and then through a

18 phone call. 19 Q. was anybody else included in the e-mail?

20
21 22 23 24

A.
Q. A. Q. A.

Not that I remember.
was anybody else on the phone call? No. What was your reaction to his statement? I thought the prototype that was created Page 227

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25 by them did not quite live up to expectation.
251
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1

Q.

In what respects?

2

A.

There's no way the product could be

3 commercialized.
4 5 Q. A. Why not? It was a product put together by

6 off-shelf parts, and one that did not reflect
7 consumer device, whether in design or in function. 8 MR. BRIDGES : I'm sorry. Can you repeat

9 his answer for me?

10
11

(Record read.)
MR. BRIDGES : Q. What were the

12 customer ' s desired requirements in design or

13 function that prototype -- that the prototype did 14 not reflect?
15 16 MR. DOOLITTLE: THE WITNESS: Calls for speculation. And to clarify what I

17 meant was, it did not reflect a consumer product.

18

MR. BRIDGES :

Q.

And this was

19 Mr. Monier ' s opinion?
20 21 testimony. 22 THE WITNESS: This was my opinion. MR . DOOLITTLE: Objection , misstates

23

MR . BRIDGES:

Q.

This was your opinion.

24 So please tell me how -- by the way, which 25 prototype were you referring to at that time? 252
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1

A.

Prototype B, which was created by

2 Techcrunch, and for which we provided browser 3 software. 4 Q. So in what ways did that prototype not

5 reflect what consumers desired?

6

A.

The form factor of the device, the

7 design of the device was just not commercial and 8 was not reflective of what a consumer wanted to 9 use. And that was reflected in Louis's statement 10 about not being able to get funding from vcs, and 11 those were similar reasons he suggested. 12 Q. okay. we can talk about what your views

13 were, and we can talk about what Mr. Monier's views 14 were, as expressed by him to you. Let me focus 15 right now on your views. 16 You said the form factor and design were

17 not satisfactory? 18 19 A. Yeah.

Q.

what else about Prototype B was not

20 satisfactory? 21 A. The software stacks was something that

22 they put together by using open-source solutions. 23 Q. Does that alone make it unsatisfactory

24 or does that simply -25 A. It was just not functioning the way it 253 UNCERTIFIED TRANSCRIPT - FOR REVIEW ONLY

1 was supposed to function. Page 229

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2 3

ChandraRUf.TXT THE REPORTER: It was just -THE WITNESS: Not functioning the way it

4 was supposed to function.

5

MR. BRIDGES:

Q.

How was it supposed to

6 functioning -- strike that. 7 8 9 overbroad.
10 THE WITNESS: It was supposed to have a

How was it supposed to function? MR. DOOLITTLE: Vague and ambiguous,

11 browser operating system. It wasn't having a

12 browser operating system.
13 MR. BRIDGES: Q. In what other ways did

14 it not function the way it was supposed to

15 function? 16 A. It was not complete. Touch wasn't --

17 the touch wasn't working the way it's supposed to 18 work. 19 Q. when you refer to "touch," what do you

20 mean by "touch"? 21 A. Touch-screen technology used was one

22 that was not reflective of the new industry 23 standard. 24 25 Q. A. what was the new industry standard? They used a resistive touch screen, 254
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1 which was more attuned for pen-based input versus 2 what should have been a capacitive touch screen 3 that would have been more attuned for the use of 4 finger. Page 230

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5

Q.

ChandraRUf.TXT whose idea was it that this product

6 should have a capacitive touch screen instead of a 7 resistive touch screen? 8 9 10 11 12 A. Q. A. Q. A. It was my idea. How did you communicate that idea? I did not at that point in time. why is that? Because that was something that was

13 asked of me. I was just absorbing what Louis 14 Monier was telling me and forming my opinions out 15 of that. 16 Q. when's the last time you've communicated

17 with Louis Monier? 18 A. I would think sometime in April of

19 2000 -- between April and may of 2009. 20 Q. In what other ways did the Prototype B

21 fail to reflect customer's desires?
22 MR. DOOLITTLE: Objection, calls for

23 speculation. 24 THE WITNESS: The fact that they

25 couldn't raise the money to commercialize it was 255
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1 reflective of the fact that VCs felt the product 2 was not commercializable from a consumer
3 standpoint, and that was what Louis Monier told me. 4 MR. BRIDGES: I'm sorry. Could you

5 repeat.that for me.
6 7 (Record read.)
MR. BRIDGES: I'm going to move to Page 231

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ChandraRuf.TXT

8 strike that answer. 9 Q. I'm asking you about the prototype --

10 namely, Prototype B -- and how, in your view, 11 Prototype B failed to reflect customer's desires.

12
13

A.
Q.

I've already answered that question.
So you' ve given me every aspect in which

14 you believe that Prototype B failed to reflect 15 customer's desires?
16 17 A. Q. Yeah, yes. what about the form factor was a

18 problem? 19 A. It was too bulky. it was made out of a

20 mechanical case that was not reflective of what a 21 production unit would be. 22 Q. Prototypes are not production units,

23 correct? 24 A. They're not, but there's a difference

25 between prototyping for engineering purposes versus 256
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1 prototyping for the sake of having -- versus 2 prototyping towards a production time line. 3 Q. was this a prototype for engineering

4 purposes?

5

A.

It wasn't, but that's how it was it was reflective of that.
What about the design was

6 created.
7 Q.

8 unsatisfactory, in your view? 9 A. It was archaic. It looked like a tablet

10 from the 1980s. Page 232

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11

Q.

ChandraRUf.TXT Name a tablet from the 1980s that it

12 looked like? 13 A. A big glass that has a plastic frame

14 around it.

15
16

Q.
A.

what are some of those tablets?
I just said that: A picture of a big Prototypes

17 glass with plastic frames around it .

18 that were shown by the likes of DEC, Compaq in the 19 '80s and ' 90s, for example. 20 Q. what made it look like that? what you

21 just said ; big frame and glass? 22
23

A.

Yes.
MR. DOOLITTLE : Objection. Asked and

24 answered , vague and ambiguous.

25

MR. BRIDGES :

Q.

What was it about the 257

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1 software stack that wasn't functioning the way it 2 was supposed to function? 3 A. It was supposed to be a browser

4 operating system, which means you boot directly to 5 the browser and nothing else, but that wasn't the 6 case with this Prototype B. 7 Q. whose idea was it to boot directly to a

8 browser on the web tablet that Fusion Garage and 9 CrunchPad were working on?
10 MR . DOOLITTLE : Objection. Assumes

11 facts not in evidence, lacks foundation.

12

THE WITNESS:

Fusion Garage started with

13 the implicit intention of a browser operating Page 233

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ChandraRuf.TXT 14 system -- a device that boots directly into a 15 browser , and that was in February 2008 . Michael

16 Arrington had also written a blog post in July 2008 17 suggesting that he saw a world where devices would 18 boot directly into a browser system. so we both
19 had similar visions. 20 The big difference, though, was in the

21 blog post , he referenced that creating a tablet 22 device that will run on Rumba, too; that will be 23 hack - - to load directly into Kiosk mode to have 24 Firefox launch directly , that wasn ' t -- that wasn't 25 our impression of a browser operating system. That
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1 was the idea that he circulated in his blog post in 2 June or July 2008, and that was exactly what
3 Prototype B was doing , with the exception of 4 running Firefox; it was running our browser 5 instead . Key word here : Running our browser and

6 not our browser operating system.
7 MR. BRIDGES: Q. Who originated the

8 attention to boot time in the development of

9 prototypes at CrunchPad?
10 11 the -THE REPORTER: I'm sorry. I didn't hear

12

MR. BRIDGES:

The attention to boot time

13 in the development of prototypes for web tablet.
14 15 ambiguous. MR . DOOLITTLE: Objection, vague and

16

MR. BRIDGES :

Q.

As between CrunchPad

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ChandraRuf.TXT 17 or Techcrunch and Fusion Garage. 18 MR. DOOLITTLE: Objection. Vague and

19 ambiguous, lacks foundation. I don't understand 20 the question. 21 MR. BRIDGES: Q. well, boot time was a

22 topic of conversation, correct, between

23 Techcrunch -- between Fusion Garage and Techcrunch 24 or crunchPad? 25 A. Yes. 259
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1

Q.

And who introduced the topic of boot

2 time into the communications?
3 MR. DOOLITTLE: Objection. Vague and

4 ambiguous, lacks foundation. 5 THE WITNESS: It was both ways. we had

6 intent -- we were building a system to boot within 7 10 seconds, and Michael Arrington had written in

8 his blog post that he would like to see a system 9 that boots very quickly; hopefully, within 10

10 seconds.
11 MR. BRIDGES: Q. And what had you done

12 to that effect before Michael Arrington's blog post 13 on that point? 14 A. we had an operating system that could

15 boot directly on a netbook. 16 17 18 Q. A. Q. How long did it take to boot? Something like 10 to 14 seconds. 10 to 14 seconds in September 2008?

19

A.

Yeah.
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20

ChandraRuf.TxT MR. BRIDGES: I think we're out of tape,

21 so we should take a break. 22 THE VIDEOGRAPHER: This marks the end of

23 Tape No. 3, in the deposition of Chandra

24 Rathakrishnan. 25 5:37.

Going off the record, the time is

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1
2 3 recess.)
4

(Recess taken.)
(Mr. Kearney left the deposition at the

THE VIDEOGRAPHER:

This marks the

5 beginning of Tape No. 4, in the deposition of

6 Chandra Rathakrishnan. 7 time is 5:49.

Back on the record, the

F MR. BRIDGES: Q. Mr. Rathakrishnan, I think you testified that, at the end of February 2009, there was no next step in the due diligence; did I understand that correctly? 12 A. Yes. I was told by Louis Monier that we

13 should go figure out what we're going to do, given 14 that the project had no legs to continue. 15 Q. So it's your understanding -- was there

16 any due diligence after that? 17 A. Yes.

18
19

Q.
A.

what due diligence?
so between February and April 2009,

20 there was hardly, if any, dialog with anyone 21 associated with the CrunchPad project. After 22 hearing what Louis had to say, I decided that Page 236

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ChandraRuf.TXT 23 internally we will continue building the operating 24 system that we were building on, and we will build 25 the hardware required to get the operating system

261
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1 to market.

2

I had written an e-mail -- a skype

3 message to Michael Arrington suggesting that, I 4 understand the project had met with some 5 difficulties, but I'm working on something that 6 could possibly excite everyone, and that I'll be 7 coming to the United states sometime in April to 8 show off what we would have done by then. 9 so during the period of February and

10 April 2009, we hired hardware consultants; we 11 continued work on the software; we designed the 12 form factor of the device and put together a

13 complete product that would demonstrate what a
14 tablet should do. we built four prototype units of 15 that and brought it up to the United states in the 16 beginning of April -- somewhere around April 7th or 17 8th -- of 2009, and showed off to Techcrunch what 18 we'd actually done. 19 This was then referred to as "CrunchPad

20 Prototype C." we had even designed the box and the 21 branding associated with Prototype c to show the 22 complete package of what a consumer product should 23 be and how -- and how this would be used by 24 consumers. 25 It was at this stage that Louis Monier Page 237

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ChandraRUf.TXT

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1 mentioned to me that we brought project back from 2 the dead and what we'd done was exciting. Michael 3 then reiterated that he wanted to acquire the 4 company, and we should discuss acquisition. That 5 was when the next step of due diligence started.

6

Q.

And what was -- what did that next step

7 of due diligence consist of?
8 A. Two things. one, is trying to ensure --

9 well, trying to understand from their point of view 10 how we were going to productize this or 11 commercialize this for the partners we were going 12 to use; how we're going to bring this to market. 13 The second element is, for them to

14 acquire us, there was a need to raise funding, and 15 CrunchPad believed they could raise funding. And 16 they wanted, as part of the process, for us to
17 engage with them in joint venture meetings. And 18 that continued throughout the period of -- from 19 April 2009. 20 21 Q. A. From April 2009 until when? To November 2009, and there are breaks

22 in between. And we had Brian Kindle and Nik 23 Cubrilovich, who were two new additions by 24 CrunchPad on their end -- because Louis Monier left 25 the project -- they were centering upon the due 263
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ChandraRuf.TXT 1 diligence on where we were with the product, as far 2 as commercialization was concerned.

3 4

Q. A.

when was that? The two of them came down to conduct due

5 diligence sometime in August 2009. Both of them 6 joined the CrunchPad -- well, I'm not sure they 7 joined CrunchPad, but both of them were brought on 8 board by Michael Arrington sometime during 3uly 9 2009 time period, and they came down for due 10 diligence in August 2009. 11 while Louis Monier left the project

12 sometime between April and may 2009. when I say 13 "left the project," means whatever engagement he 14 was having with TechCrunch or CrunchPad that ceased 15 to exist.
16 MR. DOOLITTLE: Would you wait for a

17 question, okay? You're just.talking.

18

MR. BRIDGES:

Q.

what breaks were there

19 in the due diligence, as you described it, between 20 April 2009 and November 2009? 21 A. It wasn't an everyday process. They

22 didn't have definitive goals how they wanted to 23 conduct the due diligence. They wanted to 24 understand how to bring the product to market, but 25 they also needed to raise money, which they were 264
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1 trying to focus on. 2 Q. so after August 2009, what was the next

3 step in the due diligence, as you described it? Page 239

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ChandraRuf.TXT 4 A. we had to get the production version

5 ready for launch.

And I want to make it clear that

6 this was not explicit due-diligence steps they
7 established and communicated to us. The process 8 just dragged on with the promise of an acquisition 9 during this period of time, while we continued on 10 the path of trying to productize this device. 11 So from their point of view, the next

12 step was for us to bring the device to them for 13 launch at TechCrunch50 in September 2009. 14 Q. Were there any more steps in the due

15 diligence process, apart from the ones you've 16 described? 17 MR. DOOLITTLE: Objection. Vague,

18 ambiguous, overbroad.
19 20 THE WITNESS: MR. BRIDGES: Not that I'm aware of. Q. During that period,

21 had there been discussions between you and anybody 22 at CrunchPad or TechCrunch about capitalization

23 tables for an acquisition?
24 MR. DOOLITTLE: Objection, vague as to

25 time. 265
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1 2

THE WITNESS: MR. BRIDGES:

During which period again? Q. During any of that

3 period, after December 2008 to November 2009, were 4 there any communications between CrunchPad or

5 TechCrunch, on the one hand, and Fusion Garage, on 6 the other, about capitalization tables?
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ChandraRuf.TXT 7 A. Yes.

8

Q.

what were the decisions or

9 communications? 10 A. There were several , so I'm not sure what

11 you're referring to. 12 13 Q. A. How many communications; do you know? I wouldn't know the exact number, but it

14 was a discussion that was ongoing from 15 December 2008 to November 2009. So there's several 16 exchanges, both verbally and via e-mails.

17

Q.

And do you recall whether the

18 capitalization structure of Fusion Garage had an 19 effect on the potential for an acquisition to 20 occur? 21 22 A.
No.

Q.

Do you have any understanding that

23 Fusion Garage's capitalization needed to be cleaned 24 up before an acquisition?
25 MR. DOOLITTLE: Objection , vague and

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1 ambiguous.
2 THE WITNESS: No. And I would also like

3 to clarify what you mean by "cleaned up."

4 5 altered.
6 7 ambiguous. 8

MR. BRIDGES:

Q.

That needed to be

MR. DOOLITTLE:

Objection, vague and

THE WITNESS:

Not that I know of. I

9 mean, from my understanding, an acquisition is, you Page 241

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ChandraRuf.TXT 10 want to buy a company; you buy the company for what 11 it is under a certain set of terms.
12 MR. BRIDGES: Q. Was this discussion of

13 a cash acquisition? 14 15 ambiguous. 16 THE WITNESS: Not exactly. MR. DOOLITTLE: Objection, vague and

17

MR. BRIDGES:

Q.

Not exactly.

In fact,

18 it involved issuance of equity; it involved 19 assumption of loans; it involved conversions of 20 loans to equity; it involved creation of stock 21 options -- did it not? -- as discussed by Fusion 22 Garage and CrunchPad? 23 24 foundation.
25 THE WITNESS: Yes. And an assumption of

MR. DOOLITTLE:

Objection, lacks

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1 loans could include repayment of loans as well and 2 that would equate to a cash component of the deal. 3 MR. BRIDGES: Q. Cash component of the

4 deal. It would not be a cash acquisition?
5 A. Yes, it was.

6

Q.

This was a deal that was going to have a

7 number of different component parts, correct?
8 MR. DOOLITTLE: Objection. Vague and

9 ambiguous, assumes facts, lacks foundation. 10 11 yes. 12 MR. BRIDGES: Q. Tell me all of the -Page 242 THE WITNESS: From my understanding,