FILED: NEW YORK COUNTY CLERK 06/22/ :16 PM INDEX NO /2016 NYSCEF DOC. NO. 14 RECEIVED NYSCEF: 06/22/2016
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1 FILED: NEW YORK COUNTY CLERK 06/22/ :16 PM INDEX NO /2016 NYSCEF DOC. NO. 14 RECEIVED NYSCEF: 06/22/2016 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK PERSEUS TELECOM LTD., v. Plaintiff, INDY RESEARCH LABS LLC Index No /2016 AFFIDAVIT OF MITCH SONIES Defendant. STATE OF NEW YORK } } ss.: COUNTY OF NEW YORK } MITCH SONIES, being duly sworn, deposes and says: 1. I am a managing member of Indy Research Labs, LLC ( Indy ). I have personal knowledge of the facts and circumstances recited herein. 2. Indy is a quantitative trading firm that was established in July 2015 and began developing its proprietary trading system in September Quantitative trading firms are critically dependent on high-speed telecommunications networks and computer servers, so that they can remain in constant contact with electronic trading exchanges. This places extreme demands on the firms network and datacenter infrastructure. Many firms, particularly smaller firms like Indy, rely on colocation vendors to provide and manage this infrastructure. 4. In June 2015, Indy began evaluating Perseus Telecom Ltd. ( Perseus ) as a possible provider of colocation services. We were hoping to start our trading system development in September 2015 and begin live trading in mid Both of these stages depended on having colocation services available. 1 of 5
2 5. On August 12, 2015, Perseus ed us a draft of its Service Order Form, which itemized the colocation services we were discussing and the related one-time activation expenses and monthly recurring fees for them. The draft Service Order Form also listed the pricing of computer server and networking equipment to be owned by Indy that Perseus could potentially purchase on Indy s behalf. The draft Service Order Form provided, in a section titled Approval, that so long as a Master Services Agreement had not been entered into, Perseus s Master Terms & Conditions would apply to the Service Order Form, after which the Master Services Agreement would replace the Master Terms & Conditions. A true and correct copy of Perseus s and the draft Service Order Form attached to it is attached hereto as Exhibit A. 6. On the same day, August 12, 2015, Perseus also ed us a draft of its form Master Services Agreement. A true and correct copy of that and the draft Master Services Agreement attached to it is attached hereto as Exhibit B. 7. On August 21, 2015, Perseus s President of Global Financial Services Anthony Gerace ed us an updated draft of the Service Order Form, reflecting the parties negotiations since August 12, This draft included the same provisions referring to the Master Terms & Conditions and the Master Services Agreement that were included in the August 12 draft. A true and correct copy of Perseus s and its attachments is attached hereto as Exhibit C. 8. We at Indy carefully reviewed the draft documents and determined that we could not agree to the Master Terms & Conditions or the Master Services Agreement. Many of the provisions were unacceptable, particularly given how dependent our business would be on the colocation services Perseus was to provide. For example, the terms did not require Perseus to actually meet our specific deadlines, only to use commercially reasonable efforts to do so, and did not require them to meet our required service levels, only to be substantially in conformity 2 2 of 5
3 with them. We would be required to pay all invoices in full regardless of any dispute. And if Perseus did not materially breach these terms, we would not be able to terminate the agreement or any part of it unless we paid for a full three years of services. 9. I discussed these concerns with Perseus over the telephone, and confirmed in an on August 28, 2015, that Indy could not agree to these terms, noting some of our concerns, in particular that they did not include sufficient remedies for Indy if Perseus underperformed. I proposed new language for the Approval section of the Service Order Form that would replace the references to the Master Terms & Conditions and Master Services Agreement, instead turning the Service Order Form into a limited, standalone agreement that would obligate Indy only to (1) work in good faith to negotiate final terms for a Master Services Agreement, and (2) pay Perseus for any out-of-pocket costs for equipment procured on our behalf and project management services during the negotiation period. A true and correct copy of my is attached as Exhibit D. 10. In response, Perseus proposed adding a clause that would protect Perseus in the event that 60 days passed and Indy was using Perseus s colocation services without a Master Services Agreement in place. In that case, if Indy continued to use the colocation services and was not negotiating the Master Services Agreement in place, it would be obligated to purchase the colocation services subject to Perseus s standard terms and conditions. I agreed to that addition. A true and correct copy of that exchange is attached as Exhibit E. 11. On August 31, 2015, Gerace sent me a new draft of the Service Order Form, in which Perseus had added the newly negotiated language to the Circuit Description & Special Instructions section of the form rather than the Approval section. The references to the Master Terms & Conditions and the Master Service Agreement remained in the Approval section. Gerace told me in an that he was only able to edit the Circuit Description & 3 3 of 5
4 Special Instructions section of the form. A true and correct copy of these s are attached as Exhibit F. 12. To make sure our intentions were absolutely clear, I suggested adding the phrase Notwithstanding any contrary provision under Approval below to the new language in the Circuit Description & Special Instructions section. Gerace directed me to add that language directly onto the form before I signed it. I did so, signed the Service Order Form on behalf of Indy with this modification, and ed a copy back to Gerace. A true and correct copy of that and its attachment is attached as Exhibit G. 13. Neither I nor anyone else at Indy ever signed or otherwise agreed to the Master Terms & Conditions or any form of the Master Services Agreement. Perseus s counsel was slow to respond to our attempts to negotiate the terms of the service documents. In fact, as late as October 2015, I was still asking Perseus s counsel to send me new versions of service documents referenced in the draft Master Services Agreement that set forth key requirements for the colocation services. A true and correct copy of an from Perseus s counsel stating that they are working on revised language for these documents is attached as Exhibit H. 14. At the time I signed the Services Order Form, Perseus proposed to begin providing colocation services to Indy by the end of September During September and October 2015, it became clear that Perseus could not meet the deadline it had initially promised. Perseus repeatedly moved its timeline back, and as of October 30, 2015, none of the colocation services Perseus was supposed to provide were yet active. 16. Indy was very dissatisfied with Perseus s repeated delays and failures to communicate. On October 30, 2015, I therefore called Gerace and told him that we no longer had confidence in Perseus as a business mission-critical service provider and had decided not to 4 4 of 5
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Defendants. CHEN KASHER, an attorney duly licensed to practice law before the
FILED: NEW YORK COUNTY CLERK 04/21/2016 04:21 PM INDEX NO. 450303/2016 NYSCEF DOC. NO. 24 RECEIVED NYSCEF: 04/21/2016 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK -----------------------------------------------------------------------------}{
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