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DISTRICT COURT, ADAMS COUNTY, COLORADO Adams County Justice Center 1100 Judicial Center Drive Brighton, CO 80601 |
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Plaintiff: XOR INC., a Delaware corporation Defendant: HEALTHCENTRAL, INC., a Delaware corporation |
s court
use only
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Attorney or Party Without Attorney: Name:
William J. Leone (#11403)
Cooley Godward
llp Address:
One Tabor Center Phone Number: (303) 606-4800 Fax Number (303) 606-4899 Email
Address:
leonewj@cooley.com |
Case Number: 01 CV 108 Div.: C Ctrm: |
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Exhibit 1 Affidavit of Don Wrege | |
I, Don Wrege, being a Colorado resident over the age of majority, do hereby state and depose of my own personal knowledge as follows:
1. I am an employee of XOR, Inc. as a Manager of Creative Services. I have been employed at XOR since March, 1998.
2. I have personal knowledge of the contracts and facts at issue in this suit.
3. XOR is a Delaware corporation engaged in the business of designing, building, maintaining, and managing eBusiness for companies. On occasion, XOR will also perform limited scope consulting work for clients.
4. XOR has offices in Chicago, Tulsa, Atlanta, and Boulder. I am resident in the Boulder office, the location of XOR’s Managed Services Center. The Managed Services Center houses XOR’s monitoring and control center which includes Internet and PWAN hosting operations, infrastructure engineering, application management, platform management and service level management. From the monitoring and control center XOR is able to host and manage client eBusinesses by monitoring security and performance, enhancing applications, and engineering improvements to a client's network. The Managed Services Center also houses XOR's Advanced Technology Lab which is responsible for identifying and evaluating new hardware and software products, emerging technologies, and eBusiness development techniques.
5. I served as the project manager on the Vitamins.com project and as eCIO on the HealthCentralRx project.
6. In July of 1999, XOR entered into a Technical Services Agreement with Vitamins.com. Later in that same year, XOR and Vitamins entered into a web-hosting agreement. Under this agreement, XOR designed and created a web site for Vitamins.com in Colorado. This web site was stored on a server in Colorado and accessed by telecommunications lines at least partly in Colorado. The web site processed requests in Colorado. When HealthCentral had any questions or problems related to the web site they called the XOR office in Colorado. (When Vitamins.com had a problem, they called us; we never hosted HealthCentralRx.com – maybe this is the source of some confusion…) When XOR received these calls it answered the questions and fixed any problems in Colorado. All updates and modifications to the web site were made in Colorado. Amy Gunning, a current XOR employee, was the Producer for Vitamins.com during the time when I was eCIO of the Build stage of the HealthCentralRx.com project (which never launched and was never hosted at XOR beyond a development environment).
7. Soon after XOR and Vitamins.com entered into the web-hosting agreement, Vitamins.com was acquired by HealthCentral, Inc., a web-based provider of health care information and health care products. After the acquisition, XOR continued to provide the same web-hosting services for Vitamins.com from its Boulder office. When the web-hosting agreement expired, HealthCentral negotiated an extension with XOR representatives in the Boulder office. (While hosting may have come up during our meetings, our primary goal was definining the eCommerce site, its relationship to the content site, eCommerce functionality, new features and the site’s eventual marketing strategy and customer service mechanisms. I’m sure Ray Thompson discussed hosting at length, but that was not my focus and I would have to review the audio transcriptions to speak to any discussion of hosting services.) XOR continued to perform the same services for Vitamins from its Colorado office until the agreement was terminated in November of 2000.
8. Immediately after acquiring Vitamins.com, HealthCentral approached XOR in Colorado to discuss integrating the Vitamins.com web site with HealthCentral’s consumer (instead of “consumer” I would say “eCommerce” here) site HealthCentralRx.com (which would later become WebRx.com). HealthCentral wanted to take advantage of Vitamin.com’s large customer base stored on XOR’s servers in Colorado and Vitamin.com’s auto-reorder function implemented, maintained, and stored by XOR in Colorado. This function automatically reordered a customer’s vitamins and charged the customer’s credit card on a set time schedule.
9. Jason Edwards, the Vice President of Marketing at Vitamins.com ‘sserved as HealthCentral’s representative for much of the integration project. Edwards became XOR’s primary client contact within HealthCentral. He visited XOR’s Boulder office on numerous occasions and was responsible for organizing meetings in Colorado and California to discuss the project. There were a number of times that he authorized the purchase of airline tickets for XOR employees to fly to HealthCentral’s office in California and later, after the acquisition of DrugEmporium.com, to DrugEmporium’s offices in Ohio, to meet with HealthCentral employees regarding the projects. It was XOR’s belief that Edwards had the authority to negotiate and bind HealthCentral.
10. Other HealthCentral executives visited XOR’s Boulder office multiple times to discuss strategy, check on the progress of the project, visit the Managed Services Center XOR personnel, (“Managed Services Center” was not a term we used then and I feel should not be used here for that reason.) provide guidance to XOR regarding the project, and educate themselves regarding XOR’s functionality. On one occasion, HealthCentral and XOR held a two-day meeting from March 22-23, 2000 at the Pearl Street Inn in Boulder. Attending this meeting were a number of XOR employees including Edwards, Marcus Atanasoulis (Vice President of Engineering), Miles Munger (Vice President of Marketing and Merchandising), and John Johnson (Director of eCommerce). At this meeting HealthCentral and XOR representatives assessed the existing business environment including reviewing trends in e-business, evaluating HealthCentral’s competitors, reviewing the products and services offered by HealthCentral, discussing HealthCentral’s organization, and assessing HealthCentral’s corporate objectives. During the meeting HealthCentral representatives also set forth their strategy and plans for each of its individual web sites including HealthCentral.com, RxList.com, and Vitamins.com and identified its e-Business initiatives and priorities including mergers and acquisitions. There were also discussions relating to the technology requirements for the project and how the project would be implemented once it was completed. (Absolutely right. Well put.)
11. Later, while the project was still in the Conceive phase, the same HealthCentral personnel again visited XOR’s Boulder office. On this visit, the HealthCentral representatives assessed the progress of the project, reviewed XOR’s ideas and models of the project, injected their own ideas regarding the project, and did other work related and unrelated to the project on-site.
12. In May of 2000, HealthCentral and XOR entered into an Electronic Commerce Management Agreement. Electronic Commerce Management Agreements are XOR’s one-stop service agreements. Under the agreement, XOR was to provide project management, core site development, system additions and improvements, maintenance, problem resolution, business analysis, technology strategy, interactive marketing strategy, usability testing, network performance auditing, external network strategy, web hosting, and other aspects of creating and managing custom eBusiness solutions all from its Boulder office for a period of three years. XOR was to receive payment for its work in Colorado. After executing the Agreement XOR employees in Boulder spent substantial amounts of time and effort researching the industry, talking to HealthCentral representatives in Colorado and California, developing web pages for HealthCentralRx.com, budgeting its Colorado resources so the project would be adequately staffed, and preparing presentations in Colorado to display its capabilities. All of the preparatory work for the project as well as the work done for the first five months was performed in the Boulder office and XOR received payments for this work in Colorado. Although XOR was prepared to perform further under the Agreement HealthCentral decided it did not want further services.
13. After five months under the agreement HealthCentral acquired DrugEmporium.com. In order to relieve HealthCentral from some of the cost of paying for services it was not using, (More like, “You are paying us this much every month and not asking us to do anything. Here’s what we can do for you for that money.” Chris was trying to give them value for their committed dollars.) Chris Lietz, the Managing Director of the West Region and Senior Vice President at XOR, prepared a presentation in Boulder displaying other services that XOR could provide HealthCentral. The presentation was staged for HealthCentral representatives in both Boulder and California. This presentation prompted the execution of Amendment 1.0 to the Electronic Commerce Management Agreement. (I have/had no knowledge of such presentations and do not recall being involved. I was reassigned to FranklinCovey.com by this time.)
14. Under the Amendment, XOR agreed to modify its services to allow HealthCentral to assimilate the DrugEmporium web site with its own.
15. Soon after the Amendment was executed I left the project.
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Don Wrege
STATE OF COLORADO )
) ss.
COUNTY OF EL PASO )
The foregoing instrument was acknowledged before me this ______ day of ______________, 2001, by Don Wrege as ____________________ of ___________________________________, a _________________________.
Witness my hand and official seal.
My commission expires: .
Notary Public