wmu?lthH mum 51mm DISTRICT COURT DISTRICT or CALIFORNIA SAN FRANCISCO DIVISION UNITED STATES OF Plaintiff, DANIEL RUSH. Defendant. lcasnuo. 15-CR-00454 - 1 AUDIO TRANSCRIPTION OF FILE so. usuussnar. FEBRUARY 26. 2014 REPORTING AND VIDEO SERVICES, INC. HY: LAURIE CREIGHTON BIRT, CBR N0. 5141 160 SPEAK STREET. SUITE 300 SAN FRANCISW. CALIFORNIA 94105 {115) 597-5600 BERNIE REPORTING AND VIDEO SERVICES, INC. (415) 597-5600 MR. TERBEEK: This is Marc. MR. PETERSON: Hey. Marc, it's Derek. How are you doing? MR. TERBEEK: Hi. Derek. Not bad. What's up. Man? How goes with you? MR. PETERSON: Sorry,_seven minutes late. Not bad for me, I guess. MR. That's all right. He're talking, that?s good. HR. PETERSON: It's been a rough couple weeks. Thanks for being patient. I'm sorry, I have been always canceling on you and moving back and forth. I had a ended up getting pneumonia and was knocked out for about two weeks or so. So been playing catch up. HR. TERBEEK: I just dodged that. I thought couple days agoMonday anyway. MR. PETERSON: Yeah, I guess everybody has got it. So I pushed myself too hard. I went back to New York and it was like two degrees and I got caught in that big snow storm back there and that wasn't helpful. Pushed me over the -- pushed me over the edge. So I've been -- I've been soft dancing. probably. for lack of a better analogy, a little bit. talking to Hartin about, you know. wanting to use Dan for 7 ss?mms REPORTING AND VIDEO SERVICES, INC. (415) 597-5600 some more stuff and this and that. And kind of gauging his level of acceptance or irritation with things and -- and that type of thing. So I've been thinking a lot about our meeting and the more and more I thought about it. the more and more it?s actually becoming concerning to me for lot of other reasons. And those a lot of other reasons are my own selfish interests of looking at Nevada and Massachusetts and San Francisco and all the other markets I want to go into and thinking that if this thing blows up, you know. a year down the line or whatever that first payment's due, it's not just a blowup between Dan and Marc. it's a blowup for all of us. and how do we fix that, right? HR. TERBEEK: Yeah. HR. PETERSON: So I'm willing to put myself out there and get pretty aggressive in trying to kind of manage and arbitrate some sort of a settlement here. I think I have a decent amount of ideas on how to do this. And I assume this is probably relatively high on your guys' priority list? HR. TERBEEK: I mean. it?s up there on my priority list because I'm. you know -- ER. PETERSON: Stuck in the middle. HR. TBRBEEK: I want to I want to prepare to deal with it and and see what resources can EEHMKE REPORTING sun vmso SERVICES, Inc. (4.15) 597-5600 1 be brought in to bear on that and if it's even doable. 2 HR. PETERSON: Well, I think. like -- I 3 think it is and I think I can be helpful with itis. you lmow. I-think. how we structure it. 5 Martin do you know Martin really well or 6 MR. TBRBEEK: No. No, I don't. I mean. 7 I -- I met him five years ago when when somebody referred him to me on the cannabis thing. And then I 9 thought. hey. that was a natural connection with Dan. So 10 I introduced him to Dan. And then, you know. and then 11 that was that. 12 That whole situation went off to the races. 13 Dan did his thing with him and -- and, you know. so so 14 yeah, so -- 15 HR. PETERSON: So he?s -- he's. you know. 16 he's a great guy. He's a nice. nice guy. He's, I think, 1? highly intelligent. has really creative thoughts and ideas 18 and he's. I think. a pretty decent businessman. he's got a 19 high risk tolerance. You know. he's somebody that knows. no you know -- he's willing to put money out there for 21 opportunities. 22 But he?s also a hothesd 23 HR. TERBEEK: Yes. I agree with that. 24 MR. PETERSON: -- yeah, but a controlled 25 hot-head. not like a Carl hothead. BEHMKE REPORTING AND VIDEO SERVICES. INC. (415] 597?5600 aov?v?" u' ll 30 J) mum-'nmuubhnn? numutu?h-omumu It.? manual-lit.? cm. I m: Ill": ?Minimal; ?It ?ll-n? ~mn?ulmmunmuun I .3. ran I a ?Mun-Iota! II nonhuman-and unnum- Adah-acacia m5 ?Lu-tun. on Dan an u- ?Ill-I can ?urn?num- ?summation?.- mum abundant-n nun-Iii. unnamed-nu nun-mu.? it?. u' in?: nun-mammal: 0 m. hltmumuuk-nn-H mml-h'ltmmamum. ?u 1 1. .-lhn_ Katalin-?monummutumupuu ?1 I ui u. ?no. :1 Ian- Iuluyu In. u! ?try.? hull Luann nigh-??3 no u. and run. hut-nu nun ?nun-mu I. lulu. lnL-u Wu! u? 12- Huh- 39' ?autumn-ulna.? u- loam. I'll". um 3* i MR. PETERSON: Okay. MR. And burned through the rest of her time, that the note was 400 and some change and there was like another 00 or 90 or something like that -- HR. PETERSON: Okay. HR. TERBEEK: -- he used for living expenses for the next -- rm. PETERSON: So you are (unintelligible) -- a HR. TERBEBK: Yeah, exactly. Exactly, [unintelligible] the higher odds. 5 n- HR. PETERSON: okay. Igl HR- TERBEEK: And then the other hundred .5 thou was -- was to help fund the acquisition of the house next door. which he did. as HR. PETERSON: Okay. All right. All right. So that gives me a firm understanding of that so 54- I'm always going to refer to it as, you know, like I said, tn $500,000. I understand the mechanics behind that now. We 0 don't -- I don't think -- I think that evens everything 1.: that needs to come up with Martin because. you know, the mechanics of him . 50. the whole thing now going forward is how do we look at that $600,000 and say. Martin, you know, we?re getting a big value from Dan and company and, you BEHHKE REPORTING AND VIDEO SERVICES. INC. 15 (415) 557-5600 know. We need some loan forgiveness, 1 or a haircut to put 2 in your terms for that. and how -- let's go back and 3 analyze what -- I?m sorry, go ahead. 4 MR. TERBEEK: I tell you what, here -- here's part of that. all right. So there's -- there's one 6 of the concepts that was being discussed with 7 (unintelligible) with Martin was -- is going to be open ro a recognizing this is that if he get his dreams come true, 9 which -- which, because Dan was doing this, you know. and 10 they were doing this also with an toward getting 11 Martin a ticket into the Oakland, you know. trade. 12 So the concept that there would be some 13 valuation of that success. it that was successful. there 14 would be some valuation of that. some haircut that would 15 take that into account. 16 MR. PETERSON: Yeah. nm muses: That'vas a'siae? 3:331. trays too among themselves. And I'm pretty sure 19 that that was part of theunderstanding at the time was, 20 you know. get that and there will he -- there will be -- 21 t?i??i?ii be worth scheming. That will be worth 22 something. 23 HR. PETERSON: It should be. right? so 24 here we have a business worth now, doing millions of 25 dollars in sales. right? BEE-IKE REPORTING AND VIDEO SERVICES. INC. 16 (415} 597-5600 1 HR. TERBEEK: -- but it would have been two 2 two-plus years of nothing on that one. all right? 3 HR. PETERSON: Okay. Okay. Okay. All 4 right. So that is helpful. 5 MR. So that was the bumpy road by 6 which -- by which he got into the non-linear path by which 7 he ultimately did get into and have the licensure for 31 that, all right? And it didn't happen as predicted. but 9 nothing happens in business as we predict. We all wind 10 our way to success through unpredicted paths, taking left 11 turns when we 12 MR. PETERSON: Or it was cheap. I can't 13 relenber what we paid him to get out of there but it was 14 like so or 35,000. 151 HR- TERBEEK: Thirty grand. It was thirty 16? grand. It was cheap. Han. It was 30 grand. 17 HR. PETERSON: Yeah. 13 MR. TERBEEK: It was cheap. And it was 19 that -- that's the type of profits that you make in a 20 couple weeks, right. So -- 21 HR. PETERSON: Hell. yeah, less than that. 22 So -- 23 HR. TERBEEK: Yeah. Yeah, yeah, yeah. I'm 24 always conservative when I say some things. 25 an. stresses: Okay. Okay. IBEHHKB REPORTING AND VIDEO SERVICES, INC. 23 (415] 597-5600 HR, TERBEEK: So the point of it is that -- that the point of it is. is that my -- my knowledge :5 situation was -- I was preemptively buying consideration for the both of them in this one that I wouldn't have if this exist if this relationship hadn't existed. Exactly. HR. PETERSON: Okay. All right. All right. So that bridges that. So to go through more points, is there anything else that I can bring up as consideration that Dan did for us in the -- in our pursuits to and I -- I I'm almost embarrassed to say, I was in Orange County at this time. You know, I had done so much work and then I had decided to go back to Orange County and Salwa picked up the ball and finished everything else. I wrote the application from afar so she was managing all the politics and everything else. So that's why I'm -- I?m dark on this. I don't want to ask her and Martin for .their interpretation on it. I want to ask you for your interpretation. What else -- did -- HR. TERBEEK: Dan was working this whole thing politically for that site from the get-go. That site is a site because of the network Dan was doing on it. BEHMKE REPORTING AND VIDEO SERVICES, INC. 24 (415) 597-5600 (gm-Jami- 22 23 HR. PETERSON: Okay. okay. MR. TERBEEK: izrl. And then when And he was doing it initially nag", you know and, frankly, here is one thing Dan did. when Carl fucked -- when Carl fucked the pooch on that and basically began fucking Martin on the deal. Because -- because Martin -- because Carl was fucking Martin on the deal like soon. ?what Dan did behind the scenes. to be on the QT. all right? Is -- here is- And this has really got MR. PETERSON: Okay.17 HR. TERBEEKOakland the fact that Carl and . . rum . m; . HR. PETERSON: Oh. okay. HR. TERBEEK: on grows. So basically. when when it became evident that Carl was fucking over Martin and that. you know, Carl was basic 1 o' to ZSUhrow anybody under the bus.& strum: REPORTING AND VIDEO SERVICES, INC. 25 [415) 591?5600 naulc . . aili- HR. PETERSON: I'm sorry. Man. I remember Arturo (phonetic) saying something like that -- HR. TERBEEK: And the work I was doing last year on the (unintelligible) California legislation, 1 actually talked to Niccolo DeLuca. City of Oakland. and he said that was all instrumental in Carl losing his license. Carl had gotten his license. he was -- he was disqualified assure REPORTING AND VIDEO INC. 26 [415) 597-5500