Weather Underground, Incorporated v. Navigation Catalyst Systems, Incorporated et al

Filing 249

DECLARATION by William A. Delgado re 248 MOTION in Limine No. 5 filed by Connexus Corporation, Firstlook, Incorporated, Navigation Catalyst Systems, Incorporated (Attachments: # 1 Exhibit A) (Delgado, William)

EXHIBIT A

Page 1
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN

THE WEATHER UNDERGROUND, INC., )
a Michigan Corporation,
)
)
Plaintiff,
)
)
vs.
) Case No. 2:09-CV-10756
)
NAVIGATION CATALYST SYSTEMS,
) Volume I
INC., a Delaware corporation; )
BASIC FUSION, INC., a Delaware )
corporation; CONNEXUS CORP., a )
Delaware corporation; and
)
FIRSTLOOK, INC., a Delaware
)
corporation,
)
)
Defendants.
)
_______________________________)

DEPOSITION OF DAVID GRAFF
New York, New York
Friday, June 24, 2011

Reported by:

Danielle Grant

NDS Job No.:

143388

Network Deposition Services, Inc. • networkdepo.com • 866-NET-DEPO

Page 2
1

UNITED STATES DISTRICT COURT

2

EASTERN DISTRICT OF MICHIGAN

3
4
5
6
7
8
9
10
11
12
13

THE WEATHER UNDERGROUND, INC., )
a Michigan Corporation,
)
)
Plaintiff,
)
)
vs.
) Case No. 2:09-CV-10756
)
NAVIGATION CATALYST SYSTEMS,
) Volume I
INC., a Delaware corporation; )
BASIC FUSION, INC., a Delaware )
corporation; CONNEXUS CORP., a )
Delaware corporation; and
)
FIRSTLOOK, INC., a Delaware
)
corporation,
)
)
Defendants.
)
_______________________________)

14
15
16

DEPOSITION OF DAVID GRAFF, held at the

17

offices of Butzel Long, 380 Madison Avenue, New

18

York, New York, on Friday, June 24, 2011, at 10:09

19

a.m., pursuant to Notice before Danielle Grant, a

20

Shorthand Reporter and Notary Public of the State

21

of New York.

22
23
24
25

Network Deposition Services, Inc. • networkdepo.com • 866-NET-DEPO

Page 46
1
2

Act.
Q

All right.

And when did that

3

litigation get resolved relative to the May

4

consummation of the merger?

5

A

The Beyond Systems litigation?

6

Q

Correct.

7

A

It's still pending.

8

Q

Is it still pending?

9

A

Yeah.

10

Q

And is that a suit that remains

11

between Beyond Systems and the Connexus Group

12

of companies, or has Epic been pulled into that

13

litigation?

14

A

Epic has not been pulled into

15

it; it's a suit between -- as you just said,

16

it's a suit against Connexus and/or Traffic

17

Marketplace.

18

look at the caption again to -- to remember.

19
20
21

Q

And my apologies, I would have to

At the time of the merger, what

were the companies under the Connexus umbrella?
A

Prior to the acquisition, my

22

understanding is that Connexus had a number of

23

subsidiaries; a subsidiary called Traffic

24

Marketplace, a subsidiary called First Look, a

25

subsidiary called Net Blue or Net Blue Vietnam.

Network Deposition Services, Inc. • networkdepo.com • 866-NET-DEPO

Page 47
1

And then underneath those three

2

subsidiaries were additional subsidiaries.

3

Underneath Traffic Marketplace, I believe there

4

were three subsidiaries.

5

Look, there were a number of subsidiaries.

6

underneath Net Blue Vietnam -- well, actually,

7

off the top of my head, I don't think -- I'm

8

not -- I'm not sure if there was a subsidiary

9

under Net Blue Vietnam.

10

And

I would have to go

back and look at the corporate org chart.

11
12

Underneath First

Q

Do you recall what the

subsidiaries were under Traffic Marketplace?

13

A

I believe there was a subsidiary

14

also called Traffic Marketplace under the

15

subsidiary Traffic Marketplace.

16

two others whose names I do not recall off the

17

top of my head.

And there were

18

Q

And what about First Look?

19

A

First Look had, if I recall

20

correctly, two subsidiaries.

21

Catalyst Systems was one.

22

another.

23

believe they had a third subsidiary called

24

Global Quest.

25

Navigation

Basic Fusion was

Excuse me, they might have had -- I

Q

All right.

That's a -- that's a

Network Deposition Services, Inc. • networkdepo.com • 866-NET-DEPO

Page 48
1

new one that I haven't heard before.

2
3

What -- what, if anything, did
Global Quest do at that time?

4
5

A

Global Quest owned a majority

stake 95 percent of a company called April C.

6

VIDEOGRAPHER:

Stand by, please.

7

The time on the video monitor is

8

11:07.

9

and this concludes Tape No. 1.

We are going off the record

10

(Whereupon, at 11:07 a.m., a

11

recess was taken to 11:20 a.m.)

12

(The deposition resumed with all

13

parties present.)

14

VIDEOGRAPHER:

The time is

15

11:20.

16

this is the beginning of Tape No. 2.

17

You may continue.

18

We are back on the record and

BY MR. CLARK:

19

Q

Very good.

We were talking

20

about the companies under the First Look

21

umbrella and you identified Global Quest as a

22

95 percent owner in another company called

23

April C.

24

A

That's correct.

25

Q

All right.

Any other companies

Network Deposition Services, Inc. • networkdepo.com • 866-NET-DEPO

Page 49
1

under First Look?

2

Catalyst and Basic Fusion and Global Quest.

3

A

We talked about Navigation

At the time of the acquisition,

4

I believe there were a few other companies, a

5

few other subsidiaries of First Look.

6

called Marcado and another called Kasba.

7

believe that under those companies -- those two

8

companies were additional subsidiaries, one

9

called Nomen and one called Volurum.

10
11

Q

All right.

One
And I

And what business,

if any, was Marcado involved in?

12

A

None that I was aware or that I

13

recall.

14

and Volurum was set up to facilitate

15

international expansion of First Look's

16

business, but they were never actually

17

utilized.

18

I believe that Marcado, Kasba, Nomen

Q

So, to your knowledge, as of the

19

time of the merger, anyway, they never

20

conducted any business activities?

21
22
23
24
25

A

That's correct.

That's my

understanding.
Q

Did they do anything like

register domain names to your knowledge?
A

No.

Network Deposition Services, Inc. • networkdepo.com • 866-NET-DEPO

Page 50
1

Q

Do they still exist?

2

A

It dissolved -- I dissolved

3

Nomen and Volurum.

4

Marcado and Kasba, I just frankly haven't done

5

it.

6

Q

I'm intending to dissolve

All right.

Other than own

7

95 percent of April C, does Global Quest

8

conduct any business in and of itself?

9

A

No.

10

Q

All right.

And is April C under

11

one of the other umbrellas that we talked

12

about, TM -- Traffic Marketplace, First Look,

13

or Net Blue Vietnam?

14

A

No.

I believe it -- to the best

15

of my recollection, I believe April C is just

16

under the First Look.

17

Q

Under First Look?

18

A

Under First Look.

19

Q

And what business is conducted

20

by April C?

21

A

April C is a registrar.

22

Q

Of domain names?

23

A

Correct.

24

Q

Does it have any other business

25

purpose?

Network Deposition Services, Inc. • networkdepo.com • 866-NET-DEPO

Page 51
1

A

No.

2

Q

Does it generate any revenue?

3

A

No.

I don't believe it

4

generates any revenue, or certainly any

5

significant revenue.

6

Q

7

Are there any other companies

under April C to your knowledge?

8

A

No.

9

Q

Does April C service any other

10

companies under the Connexus umbrella?

11

other words, if it registers domain names, does

12

it register the domain names for another one of

13

the companies up the chain?

14
15
16
17
18

A

No.

In

It would only register

domain names for First Look.
Q

When did April C begin

registering domain names if you know?
A

April C was created, you know,

19

prior to the acquisition.

20

exactly when April C first became operational

21

and first started registering domain names.

22

The -- if memory serves correct, it was not in

23

existence for a very long time prior to the

24

acquisition.

25

Q

All right.

So, I don't know

Net Blue Vietnam,

Network Deposition Services, Inc. • networkdepo.com • 866-NET-DEPO

Page 52
1

does it have any subsidiary companies?

2

A

I don't believe so.

My only

3

hesitation is the combined corporate org chart

4

is complicated and I don't have it in front of

5

me.

6

any subsidiaries.

7

the top of my head.

But I don't believe Net Blue Vietnam has

8
9
10

At least, I don't recall off

Q

What is the business of Net Blue

A

Really, it is just the corporate

Vietnam?

11

entity that employs the folks that work in the

12

company's Vietnam office.

13

office in Vietnam.

14
15
16

Q

The company has an

Is there a primary business

function for the Vietnam group?
A

They are primarily technology

17

people, technology support.

18

that's really the only function of the Vietnam

19

office is to provide technological support.

20
21

Q

In fact, I think

Have you heard of a company

called Metes, that's M-E-T-E-S?

22

A

Yes.

23

Q

What is Metes?

24

A

Metes is a Luxembourg company

25

that I formed to assist with First Look's

Network Deposition Services, Inc. • networkdepo.com • 866-NET-DEPO

Page 53
1

international expansion.

2

Q

And where is it based?

3

A

Luxembourg.

4

It's incorporated

in Luxembourg.

5

Q

And is that under the First Look

6

umbrella or is that under another -- a

7

different umbrella?

8
9

A

It is -- well, it's to be

used -- the purpose of Metes is to be used in

10

association with Metes.

The structure is a

11

little different than that, because it's set up

12

through a company in Luxembourg that

13

facilitates the creation of Luxembourg

14

entities.

15

under First Look.

So, it technically doesn't fall

16

Q

Who owns it?

17

A

It's owned by -- the way that

18

it's set up, it's owned by a company called One

19

Luxembourg.

20

essentially controlled by First Look, which is

21

why I'm saying it technically doesn't fall

22

under First Look, just from the legal structure

23

point of view.

24
25

Q

And it's certainly -- it's

And what specifically does Metes

assist First Look in with respect to overseas

Network Deposition Services, Inc. • networkdepo.com • 866-NET-DEPO

Page 54
1

development?

2

A

Well, the concept at the time

3

was to the extent that First Look wanted to

4

expand its business internationally and

5

essentially have, you know, somewhat parallel

6

structures on an international basis.

7

so, if it were seeking international traffic

8

and registering international domains, it would

9

just serve as the registrant, right, as opposed

10

So --

to NCS.

11

There haven't -- there aren't

12

very many domains that have been -- for which

13

Metes is the registrant.

14

that we really sort of kicked off with any

15

degree of fervor, for lack of a better word.

16

But that was its intended purpose -- or is its

17

intended purpose.

It's not something

18

Q

19

registrant?

20

A

A registrar.

21

Q

A registrar as opposed to

22

registrant, okay.

23
24
25

We talked about April C being a

And Navigation Catalyst is also
a registrant?
A

Correct.

Network Deposition Services, Inc. • networkdepo.com • 866-NET-DEPO

Page 55
1

Q

Okay.

Does April C act as a

2

registrar for any particular entity that we

3

have talked about?

4

A

Well, April C acts as a

5

registrar for First Look, just the same way

6

that Basic Fusion has acted as a registrar for

7

First Look.

8

Q

9
10

Any idea why there were two

registrar companies established under the First
Look umbrella?

11

A

Well, the companies were

12

established prior to the acquisition, so I

13

wasn't around for their creation.

14

understanding is that one was essentially for,

15

you know, U.S., we'll call it domestic

16

registrations.

17

used for international registrations.

My

And the other was going to be

18

Q

April C?

19

A

Correct.

20

Q

Let's talk about post merger up

That's correct.

21

until the present time.

Have there been any

22

companies added, either under the Epic or

23

Connexus umbrellas that we haven't talked

24

about?

25

utilized by --

And when I say "added," created and

Network Deposition Services, Inc. • networkdepo.com • 866-NET-DEPO

Page 56
1
2

A

I understand your question, I'm

just thinking.

3

Q

All right.

4

A

No.

5

Q

Other than the ones you have

6

talked about dissolving -- Marcado, Kasba, and

7

I think there were two other ones, Volurum and

8

any other ones -- any others dissolved or on

9

the slate to be dissolved?

10

A

Marcado and Kasba have not yet

11

been dissolved, but they are on the slate to be

12

dissolved.

13

dissolved, but that was prior to the

14

acquisition.

15

companies dissolved -- that have been

16

dissolved.

17

Bazaar Advertising has been

Q

There have been no other

Let's talk about the corporate

18

structure after the merger of the Connexus

19

side.

20

We took the deposition of Art

21

Shaw last week or the week before, it all runs

22

together.

23

of Epic Media after the merger, and that Don

24

Mathis was the president.

25

Don Mathis is -- is now also the CEO, and that

He indicated that he became the CEO

And now we know that

Network Deposition Services, Inc. • networkdepo.com • 866-NET-DEPO