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1 |) WILLIAM T. WEBB #193832 ELECTRONICALLY
JENNIFER D. SU #291603 FILED
21 155 Montgomery Street, Suite 1200 e eodaer ee 2. eet
San Francisco, CA 94104
3 : 04/28/2017
(415) 277-7200 On: of 4,2 Court
4 || (415) 277-7210 (fax) BY:ANNA TORRES
Attorneys for BILLFLOAT, INC., eo
5 | RYAN GILBERT AND SEAN O’MALLEY
6
7
8
9 SUPERIOR COURT OF THE STATE OF CALIFORNIA
IN AND FOR THE COUNTY OF SAN FRANCISCO
10 (Unlimited Jurisdiction)
a 1l | GOLDEN PACIFIC BANK, N.A., } Case No.: CGC-16-549804
aed 7 Plaintiff, } DECLARATION OF RYAN GILBERT IN
343, 13 ) SUPPORT OF BILLFLOAT, INC.’S
Sasa v. } MOTION FOR SUMMARY
gice M4 j ADJUDICATION
Seae BILLFLOAT, INC., RYAN GILBERT, SEAN )
2222 15 | OMALLEY,DOES 1-50, ) Dates July 14, 2017
7 ~ 16 Time: 10:00 a.m.
2 Defendants. ) Dept: 606
17 ;
18 }
19 | BILLFLOAT, INC. )
i )
Cross-Complainant, )
20 )
v. )
21 )
9) | GOLDEN PACIFIC BANK, N.A., and ROES }
1-50, )
23 ;
Cross-Defendants. )
24 J
)
25
26
27
28
DECLARATION OF RYAN GILBERT IN SUPPORT OF BILLFLOAT, INC."S MOTION FOR SUMMARY ADJUDICATIONI, RYAN GILBERT, declare:
1. 1am a Senior Executive of Defendant BillFloat, Inc. (“Better Finance”). From 2009
to 2016 my title was Chief Executive Officer. Since January 2016, my title is Executive Chairman.
The statements in this Declaration are made on the basis of my own personal knowledge, and I
could, and would, competently testify thereto if called upon to do so.
2. I was not extensively involved in the negotiation of the License Agreement, the
Marketing Agreement, or the Amended Marketing Agreement between Better Finance and Golden
Pacific Bank (collectively, the “Agreements”). Despite this fact, in its Complaint, Golden Pacific
Bank ("GPB") has raised specific allegations against me. This declaration is being made to
demonstrate that the allegations are false.
3. I was copied on email communications during the course of the negotiations between
BillFloat and GPB ("the Parties") leading up to the execution of the License Agreement, the
Marketing Agreement, and the Amended Marketing Agreement. However, my direct
communications with GPB concerning the negotiation of any specific terms or conditions of these
agreements were limited. For example, I did not serve as BillFloat's lead representative in any
phone conferences or in-person meetings with GPB to handle the negotiation of specific terms and
conditions. Moreover, I did not prepare correspondence to GPB that attempted to articulate or
advance BillFloat's position concerning a term or condition under consideration by the Parties, I did
not make any false statement to any representative of GPB. Rather, my goal, consistent with the goal
of BillFloat, was to reach agreement on terms and conditions that were mutually acceptable to GPB
and BillFloat. Accordingly, any statement that I did make to GPB during the negotiation of the
License Agreement, the Marketing Agreement, and/or the Amended Marketing Agreement was
backed by my firm belief and expectation that BillFloat would perform in a manner consistent with
the agreements, including but not limited to the terms and conditions pertaining to: ownership of
intellectual property, appropriate charges to GPB, sharing of improvement costs for the Joint IP (as
defined in the agreements), the issuance and reconciliation of Joint IP SOWs (as defined in the
agreements), referral of business to GPB, and the delivery of accurate reports to GPB regarding the
1
DECLARATION OF R. GILBERT IN SUPPORT OF MSJ OR MSA
Case No, CGC-16-549804
3564877v1 0980208volume of loan referrals to and fee income from other lenders. Further, it is my understanding that,
at all times since the above-referenced agreements were signed, BillFloat has in fact performed in a
manner consistent with these agreements. I never had any participation in the preparation, review or
submission to GPB of any Joint IP SOW. Further, I never submitted to GPB, or authorized anyone
at BillFloat to submit to GPB, any Joint IP SOW. Beyond that, I never submitted to GPB, or
authorized anyone at BillFloat to submit to GPB, any written document with the intent to overbill,
defraud or induce reliance by GPB. Finally, I never concealed from GPB any of BillFloat's license
agreements with or loan referrals to other lenders. I did not participate in the marketing of the Joint
Technology to any prospective sublicensee. Regarding the sublicensing of the Parties' rights and
interest in the Joint Technology, which BillFloat was authorized to do by §2 of the marketing
agreements, no such sublicenses have been issued. Further, | never disclosed the Joint Technology
(the "GOLD Standard") to any lender or person.
4, In ¥ 12, the Complaint alleges that, during the Parties' 2013 negotiations, I "promised
GPB that GPB and BILLFLOAT would jointly own the intellectual property which they would
jointly develop and finance into an online design to apply GPB's decision-making criteria to process
more accurate, rapid and efficient evaluation, underwriting and marketing of SBA 7(a) Program
Loans." I made no such promise to GPB.
5. In { 13, the Complaint alleges that I "promised GPB that Plaintiff would have 'most
favored nation’ status with respect to any future small business lending products or services that
BILLFLOAT would offer." I made no such promise to GPB.
6. In § 45(a), the Complaint alleges that in "negotiating the terms and conditions of" the
Marketing Agreement and the Amended Marketing Agreement, I "promised GPB’s negotiators that,
by entering into” these agreements, GPB "was not responsible for all of BillFloat's operating costs or
even for any of BillFloat's operating costs unrelated to the Joint Technology or the SmartBiz brand
that marketed the Joint Technology." I made no such promise to GPB.
7. In ¥ 45(a), the Complaint alleges that in "negotiating the terms and conditions of" the
Marketing Agreement and the Amended Marketing Agreement, I "told GPB’s executives, that prior
2
DECLARATION OF R. GILBERT IN SUPPORT OF MSJ OR MSA
Case No, CGC-16-549804
3564877¥1 0980208to the commencement of work on technology development that would improve or add to the value of
the ‘Joint IP,’ BillFloat would have to deliver a Joint IP SOW to GPB no later than 15 days before the
work would commence." I made no such promise to GPB.
8. In § 45(a), the Complaint alleges that, in "negotiating the terms and conditions of" the
Marketing Agreement and the Amended Marketing Agreement, I "told GPB’s executives that
BillFloat could not charge GPB for a 50 percent share of the improvement costs of their Joint IP
Improvement Expenses to which GPB did not agree." I made no such promise to GPB.
9. In ¥ 45(c), the Complaint alleges that in "negotiating the terms and conditions of" the
Marketing Agreement and the Amended Marketing Agreement, I "promised GPB’s negotiators that
(sic) would make referrals of ‘qualified’ businesses seeking an SBA loan of $25,000 or less and from
future lending products and services that BILLFLOAT would offer through GPB under the proposed
‘most favored nation' status." I made no such promise to GPB. Nonetheless, the facts demonstrate
that BillFloat did, in fact, make referrals of qualified businesses to GPB for SBA 7(a) loans, as
contemplated by § 3 of the marketing agreements.
10. In § 45(d), the Complaint alleges that in "negotiating the terms and conditions of" the
marketing agreements, I "promised GPB’s negotiators that (sic) would deliver accurate reports for
the volume of referrals to, and fee income from other lending banks to GPB." I did not make any
such promise to GPB concerning the delivery of reports. As a practical matter, after the marketing
agreements were signed, the Parties regularly exchanged information relevant to § 2 ("Joint IP
Ownership and Licensing") and § 3 ("Preferred Relationships") of these agreements; however, I was
not involved in the preparation, review and/or receipt of such information and reports.
11. In §45(b), the Complaint alleges that, after execution of the Marketing Agreement
and the Amended Marketing Agreement, I "caused to be delivered BillFloat’s Joint IP SOWs to
GPB that over-billed GPB for BillFloat’s operating costs unrelated to the Joint Technology or the
SmartBiz brand that marketed the Joint Technology." This statement is not true. I never submitted
to GPB, or authorized anyone at BillFloat to submit to GPB, any Joint IP SOW. Beyond that, I
never submitted to GPB, or authorized anyone at BillFloat to submit to GPB, any written document
3
DECLARATION OF R. GILBERT IN SUPPORT OF MSJ OR MSA
Case No. CGC-16-549804
3564877v1 0980208with the intent to oyerbill, defraud or induce reliance by GPB.
12, In § 29, the Complaint alleges that 1 “purposely. concealed BillFloat’s license
agreements and loan referrals to other lenders from GPB in direct meetings with Plaintiff's (GPB's)
executives, including Ms. Varela and board members, ...". This statement is not true. I never
concealed from GPB any of BillFloat's license agreements with or loan referrals to other lendets,
13. [have read and reviewed the Plaintiff's. Code of Civ. Proc. § 2019.201 Trade Secrets
Disclosure ("GPB's Trade Secret Disclosure") that was served in this action in or about February
2016. This document provides non-specific information under three separate headings:
"Underwriting" in section "A"; "Expertise" in section "B"; and “Vendor/Supplier Information" in
section"C." Regarding both the information of GPB that has been provided in its Trade Secret
Disclosure and more specific information that may exist, but is not identified in the Disclosure: 1
never used or had the opportunity to use any such information; and I never disclosed any such
information to a third party lender or anyone else. To the extent a portion of GPB's Trade Secret
Disclosure refers to GPB's contribution to the Joint Technology, as described in § 2 of the marketing
agreements: I likewise never used or had the Opportunity to. use that information; and I never
disclosed that information to a third party lender or anyone else, I did not participate in the
marketing of the Joint Technology to any prospective sublicensee, And, as stated above, regarding
the sublicensing of the Parties’ rights and interest in the Joint Technology, which BillFloat was
authorized to do by §2 of the marketing agreements, no such sublicenses have been issued,
I declare under penalty of perjury under the laws of the State of California that the foregoing
is true and correct and that if called as a witness, I could competently testify to the same. Executed
on April 2S, 2017, at San Francisco, California, Cy
RYAN GI4BERT
4
DECLARATION OF R. GILBERT IN SUPPORT OF MSJ OR MSA
Case No. CGC-16-549804
3564877v1 0980208
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1 |) WILLIAM T. WEBB #193832 ELECTRONICALLY JENNIFER D. SU #291603 FILED 21 155 Montgomery Street, Suite 1200 e eodaer ee 2. eet San Francisco, CA 94104 3 : 04/28/2017 (415) 277-7200 On: of 4,2 Court 4 || (415) 277-7210 (fax) BY:ANNA TORRES Attorneys for BILLFLOAT, INC., eo 5 | RYAN GILBERT AND SEAN O’MALLEY 6 7 8 9 SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF SAN FRANCISCO 10 (Unlimited Jurisdiction) a 1l | GOLDEN PACIFIC BANK, N.A., } Case No.: CGC-16-549804 aed 7 Plaintiff, } DECLARATION OF RYAN GILBERT IN 343, 13 ) SUPPORT OF BILLFLOAT, INC.’S Sasa v. } MOTION FOR SUMMARY gice M4 j ADJUDICATION Seae BILLFLOAT, INC., RYAN GILBERT, SEAN ) 2222 15 | OMALLEY,DOES 1-50, ) Dates July 14, 2017 7 ~ 16 Time: 10:00 a.m. 2 Defendants. ) Dept: 606 17 ; 18 } 19 | BILLFLOAT, INC. ) i ) Cross-Complainant, ) 20 ) v. ) 21 ) 9) | GOLDEN PACIFIC BANK, N.A., and ROES } 1-50, ) 23 ; Cross-Defendants. ) 24 J ) 25 26 27 28 DECLARATION OF RYAN GILBERT IN SUPPORT OF BILLFLOAT, INC."S MOTION FOR SUMMARY ADJUDICATIONI, RYAN GILBERT, declare: 1. 1am a Senior Executive of Defendant BillFloat, Inc. (“Better Finance”). From 2009 to 2016 my title was Chief Executive Officer. Since January 2016, my title is Executive Chairman. The statements in this Declaration are made on the basis of my own personal knowledge, and I could, and would, competently testify thereto if called upon to do so. 2. I was not extensively involved in the negotiation of the License Agreement, the Marketing Agreement, or the Amended Marketing Agreement between Better Finance and Golden Pacific Bank (collectively, the “Agreements”). Despite this fact, in its Complaint, Golden Pacific Bank ("GPB") has raised specific allegations against me. This declaration is being made to demonstrate that the allegations are false. 3. I was copied on email communications during the course of the negotiations between BillFloat and GPB ("the Parties") leading up to the execution of the License Agreement, the Marketing Agreement, and the Amended Marketing Agreement. However, my direct communications with GPB concerning the negotiation of any specific terms or conditions of these agreements were limited. For example, I did not serve as BillFloat's lead representative in any phone conferences or in-person meetings with GPB to handle the negotiation of specific terms and conditions. Moreover, I did not prepare correspondence to GPB that attempted to articulate or advance BillFloat's position concerning a term or condition under consideration by the Parties, I did not make any false statement to any representative of GPB. Rather, my goal, consistent with the goal of BillFloat, was to reach agreement on terms and conditions that were mutually acceptable to GPB and BillFloat. Accordingly, any statement that I did make to GPB during the negotiation of the License Agreement, the Marketing Agreement, and/or the Amended Marketing Agreement was backed by my firm belief and expectation that BillFloat would perform in a manner consistent with the agreements, including but not limited to the terms and conditions pertaining to: ownership of intellectual property, appropriate charges to GPB, sharing of improvement costs for the Joint IP (as defined in the agreements), the issuance and reconciliation of Joint IP SOWs (as defined in the agreements), referral of business to GPB, and the delivery of accurate reports to GPB regarding the 1 DECLARATION OF R. GILBERT IN SUPPORT OF MSJ OR MSA Case No, CGC-16-549804 3564877v1 0980208volume of loan referrals to and fee income from other lenders. Further, it is my understanding that, at all times since the above-referenced agreements were signed, BillFloat has in fact performed in a manner consistent with these agreements. I never had any participation in the preparation, review or submission to GPB of any Joint IP SOW. Further, I never submitted to GPB, or authorized anyone at BillFloat to submit to GPB, any Joint IP SOW. Beyond that, I never submitted to GPB, or authorized anyone at BillFloat to submit to GPB, any written document with the intent to overbill, defraud or induce reliance by GPB. Finally, I never concealed from GPB any of BillFloat's license agreements with or loan referrals to other lenders. I did not participate in the marketing of the Joint Technology to any prospective sublicensee. Regarding the sublicensing of the Parties' rights and interest in the Joint Technology, which BillFloat was authorized to do by §2 of the marketing agreements, no such sublicenses have been issued. Further, | never disclosed the Joint Technology (the "GOLD Standard") to any lender or person. 4, In ¥ 12, the Complaint alleges that, during the Parties' 2013 negotiations, I "promised GPB that GPB and BILLFLOAT would jointly own the intellectual property which they would jointly develop and finance into an online design to apply GPB's decision-making criteria to process more accurate, rapid and efficient evaluation, underwriting and marketing of SBA 7(a) Program Loans." I made no such promise to GPB. 5. In { 13, the Complaint alleges that I "promised GPB that Plaintiff would have 'most favored nation’ status with respect to any future small business lending products or services that BILLFLOAT would offer." I made no such promise to GPB. 6. In § 45(a), the Complaint alleges that in "negotiating the terms and conditions of" the Marketing Agreement and the Amended Marketing Agreement, I "promised GPB’s negotiators that, by entering into” these agreements, GPB "was not responsible for all of BillFloat's operating costs or even for any of BillFloat's operating costs unrelated to the Joint Technology or the SmartBiz brand that marketed the Joint Technology." I made no such promise to GPB. 7. In ¥ 45(a), the Complaint alleges that in "negotiating the terms and conditions of" the Marketing Agreement and the Amended Marketing Agreement, I "told GPB’s executives, that prior 2 DECLARATION OF R. GILBERT IN SUPPORT OF MSJ OR MSA Case No, CGC-16-549804 3564877¥1 0980208to the commencement of work on technology development that would improve or add to the value of the ‘Joint IP,’ BillFloat would have to deliver a Joint IP SOW to GPB no later than 15 days before the work would commence." I made no such promise to GPB. 8. In § 45(a), the Complaint alleges that, in "negotiating the terms and conditions of" the Marketing Agreement and the Amended Marketing Agreement, I "told GPB’s executives that BillFloat could not charge GPB for a 50 percent share of the improvement costs of their Joint IP Improvement Expenses to which GPB did not agree." I made no such promise to GPB. 9. In ¥ 45(c), the Complaint alleges that in "negotiating the terms and conditions of" the Marketing Agreement and the Amended Marketing Agreement, I "promised GPB’s negotiators that (sic) would make referrals of ‘qualified’ businesses seeking an SBA loan of $25,000 or less and from future lending products and services that BILLFLOAT would offer through GPB under the proposed ‘most favored nation' status." I made no such promise to GPB. Nonetheless, the facts demonstrate that BillFloat did, in fact, make referrals of qualified businesses to GPB for SBA 7(a) loans, as contemplated by § 3 of the marketing agreements. 10. In § 45(d), the Complaint alleges that in "negotiating the terms and conditions of" the marketing agreements, I "promised GPB’s negotiators that (sic) would deliver accurate reports for the volume of referrals to, and fee income from other lending banks to GPB." I did not make any such promise to GPB concerning the delivery of reports. As a practical matter, after the marketing agreements were signed, the Parties regularly exchanged information relevant to § 2 ("Joint IP Ownership and Licensing") and § 3 ("Preferred Relationships") of these agreements; however, I was not involved in the preparation, review and/or receipt of such information and reports. 11. In §45(b), the Complaint alleges that, after execution of the Marketing Agreement and the Amended Marketing Agreement, I "caused to be delivered BillFloat’s Joint IP SOWs to GPB that over-billed GPB for BillFloat’s operating costs unrelated to the Joint Technology or the SmartBiz brand that marketed the Joint Technology." This statement is not true. I never submitted to GPB, or authorized anyone at BillFloat to submit to GPB, any Joint IP SOW. Beyond that, I never submitted to GPB, or authorized anyone at BillFloat to submit to GPB, any written document 3 DECLARATION OF R. GILBERT IN SUPPORT OF MSJ OR MSA Case No. CGC-16-549804 3564877v1 0980208with the intent to oyerbill, defraud or induce reliance by GPB. 12, In § 29, the Complaint alleges that 1 “purposely. concealed BillFloat’s license agreements and loan referrals to other lenders from GPB in direct meetings with Plaintiff's (GPB's) executives, including Ms. Varela and board members, ...". This statement is not true. I never concealed from GPB any of BillFloat's license agreements with or loan referrals to other lendets, 13. [have read and reviewed the Plaintiff's. Code of Civ. Proc. § 2019.201 Trade Secrets Disclosure ("GPB's Trade Secret Disclosure") that was served in this action in or about February 2016. This document provides non-specific information under three separate headings: "Underwriting" in section "A"; "Expertise" in section "B"; and “Vendor/Supplier Information" in section"C." Regarding both the information of GPB that has been provided in its Trade Secret Disclosure and more specific information that may exist, but is not identified in the Disclosure: 1 never used or had the opportunity to use any such information; and I never disclosed any such information to a third party lender or anyone else. To the extent a portion of GPB's Trade Secret Disclosure refers to GPB's contribution to the Joint Technology, as described in § 2 of the marketing agreements: I likewise never used or had the Opportunity to. use that information; and I never disclosed that information to a third party lender or anyone else, I did not participate in the marketing of the Joint Technology to any prospective sublicensee, And, as stated above, regarding the sublicensing of the Parties’ rights and interest in the Joint Technology, which BillFloat was authorized to do by §2 of the marketing agreements, no such sublicenses have been issued, I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct and that if called as a witness, I could competently testify to the same. Executed on April 2S, 2017, at San Francisco, California, Cy RYAN GI4BERT 4 DECLARATION OF R. GILBERT IN SUPPORT OF MSJ OR MSA Case No. CGC-16-549804 3564877v1 0980208