I. The Trans World - BuddyUSA Securities Purchase
1. Jan. 2001 – Trans World’s Securities Purchase
153. Trans World and the corporation BuddyUSA Inc. entered into a Securities Purchase Agreement dated January 18, 2001.
154. My signature was attached to the same Securities Purchase Agreement involving BuddyUSA Inc. and Trans World
155. The signature of John Sullivan, Chief Financial Officer of Trans World, was attached to the same Securities Purchase Agreement.
156. A stock certificate was issued by the corporation BuddyUSA Inc. to Trans World as part of the same Securities Purchase Agreement.
157. A disclosure schedule was attached to the same Securities Purchase Agreement, including Schedule 2.8 Capitalization Table.
158. Schedule 5.3, Consulting Agreement Terms, was attached to the same Securities Purchase Agreement and is referenced on page 9 of the same Securities Purchase Agreement. The Purchaser referred to therein is Trans World
159. As promised in the same Schedule 5.3, Consulting Agreement Terms, I have granted Trans World an exclusive right to the Digital Download Technology described within.
160. As promised in the same Schedule 5.3, Consulting Agreement Terms, Trans World’s obligations to me included that Trans World “shall be responsible for ... obtaining permission from copyright owners, as applicable, for the use, distribution, licensing or sale of [music, movies and videogames], and making any payments owed to the copyright owners in respect thereof.”
161. On or around the same date, January 18, 2001, Boies Schiller sent a letter stating that Boies-Schiller had worked on this securities purchase transaction.
162. I expected that Boies-Schiller would represent my interests in the Trans World – BuddyUSA transaction, and advise me of any conflicts of interest.
163. However, neither David Boies nor Boies-Schiller made any disclosure to me about Boies-Schiller’s role as lawyers representing Trans World as a defendant in antitrust litigation.
2. “Datamine’s 15% Equity Interest” to My Lawyers
164. Certain footnotes were attached to the capitalization table of BuddyUSA.
165. Footnote 5 states, “Mr. Deep has granted an option to Economic Resource Associates Inc. to acquire 2809 of his shares for .39 per share and an option to Datamine LLC to acquire 18,000 of his shares for .39 per share.”
166. The option granted to Datamine LLC to acquire 18,000 of my shares is an interest that David Boies directed me to pay as the consideration he described as “Datamine’s 15% entity interest” in his November 15 letter.
167. I expected that Boies-Schiller would represent my interests in the Trans World – BuddyUSA transaction, and advise me of any conflicts of interest.
168. However, neither David Boies nor Boies-Schiller made any disclosure to me about Boies-Schiller’s interest in the options that I granted to Datamine LLC to acquire my shares.
3. Economic Resource’s Undisclosed Interest
169. Footnote 5 states, “Mr. Deep has granted an option to Economic Resource Associates Inc. to acquire 2809 of his shares for .39 per share and an option to Datamine LLC to acquire 18,000 of his shares for .39 per share.”
170. The option granted to Economic Resource Associates Inc. to acquire 2,809 of my shares is consideration that David Boies directed me to pay, to an interest that Boies-Schiller did not disclose.
171. Again, I expected that Boies-Schiller would represent my interests in the Trans World – BuddyUSA transaction, and advise me of any conflicts of interest.
