pardo brian 8-27-08.txt 0001 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 0002 1 2 3 4 5 6 7 8 9 10 11 12 ORAL DEPOSITION OF BRIAN D. PARDO AUGUST 27, 2008 ORAL DEPOSITION OF BRIAN D.

PARDO, produced as a witness at the instance of the PLAINTIFF FRED J. JOSEPH, Securities Commissioner for the State of Colorado and duly sworn, was taken in the above-styled and numbered cause on the 27th of August, 2008, from 9:02 a.m, to 9:45 a.m., before Sherry D. Current, CSR, in and for the State of Texas, reported by machine shorthand, at the offices of Life Partners, Inc., 204 woodhew Drive, Waco, Texas, pursuant to the Texas Rules of Civil Procedure and the provisions stated on the record or attached hereto. Page 1 DISTRICT COURT, CITY AND ) COUNTY OF DENVER, ) COLORADO ) ) 1437 Bannock street ) Denver, CO 80202 ) ) FRED J. JOSEPH, ) Securities Commissioner ) for the State of ) Colorado, ) ) Plaintiff, ) ) V. ) ) LIFE PARTNERS, INC., a ) Texas Corporation, LIFE ) PARTNERS HOLDINGS, INC., ) a Texas Corporation, ) SCOTT PEDEN, SCOTT ) BEEMER, ERIC COX, LOWRY ) LYNNE DAVIS, GARY HANSON, ) TIM HARPER, KENNETH ) ) KELLER, MIKE LOWE, LARRY MICKELSON, JOHN ROTH, ) RALPH SIEBERT, AND BRIAN ) PARDO, ) ) Defendants. ) ) JOHN W. SUTHERS, ) Attorney General ) Case No. 2007 cV 5218 CHRISTINE C. STRETESKY, ) ) 31749* RUSSELL KLEIN, ) Div.: 5 ) 31965* Asst. Attorneys General ) ) 1525 Sherman Street, 7th Floor ) Denver, CO 80203 ) 303-866-5278 ) 303-866-5395 Facsimile ) *counsel of Record )

pardo brian 8-27-08.txt 13 14 15 16 17 18 19 20 21 22 23 24 25 0003 1 APPEARANCES 2 3 PLAINTIFF FRED J. JOSEPH, Securities Commissioner for the State of Colorado: 4 JOHN W. SUTHERS, Attorney General 5 CHRISTINE C. STRETESKY, 31749 RUSSELL KLEIN, 31965 6 Asst. Attorneys General 1525 Sherman Street, 7th Floor 7 Denver, CO 80203 (303) 866-5278 Telephone 8 (303) 866-5395 Facsimile 9 FOR THE DEFENDANTS LIFE PARTNERS, INC., a Texas 10 Corporation, LIFE PARTNERS HOLDINGS, INC., a Texas 11 Corporation, SCOTT PEDEN, TIM HARPER, LARRY MICKELSON, JOHN ROTH, AND BRIAN PARDO: 12 Mr. Otto K. Hilbert, II 13 Robinson Waters & O'Dorisio, P.C. 1099 18th Street 14 26th Floor Denver, Colorado 80202-1926 15 (303) 297-2600 Firm (303) 824-3120 Direct 16 17 FOR THE DEFENDANTS SCOTT BEEMER, ERIC COX, LOWRY LYNNE DAVIS, GARY HANSON, KENNETH KELLER, MIKE LOWE 18 AND RALPH SIEBERT: 19 Mr. Thomas Tenenbaum 20 The Tenenbaum Law Firm Park Ridge Corporate Center, suite 600 21 10475 Park Meadows Drive Lone Tree, Colorado 80214 22 (303) 804-3800 Telephone (303) 804-3802 Facsimile 23 24 25 0004 1 INDEX 2 PAGE VOL 3 Appearances 3 1 4 Stipulations 5 1 5 Page 2

pardo brian 8-27-08.txt BRIAN D. PARDO 6 Examination by Ms. Stretesky 7 8 9 10 11 12 13 14 15 16 No. 17 18 19 20 21 NO DESCRIPTION 22 NONE 23 24 25 0005 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 0006 1 2 3 4 5 6 7 8 9 NONE EXHIBITS PAGE VOL Signature and Changes Reporter's Certificate 5 30 32 1 1 1

REQUESTED DOCUMENTS/INFORMATION NO. DESCRIPTION PAGE NONE CERTIFIED QUESTIONS PAGE/LINE

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THE REPORTER: Before I swear the witness, are there any stipulations or agreements that you would like to place on the record? MS. STRETESKY: No, ma'am. MR. HILBERT: None. MR. TENENBAUM: Nope. (Witness sworn.) BRIAN PARDO, after having been first sworn, testified as follows: EXAMINATION BY MS. STRETESKY: Q. Good morning, Mr. Pardo. we met yesterday. I'm Christine Stretesky. I'm an assistant attorney general with the state of Colorado, representing Fred Joseph in this action against Life Partners and the individual defendants. Have you ever had your deposition taken before? A. Yes. Q. Okay. This might be familiar to you, but I'm just going to set up some ground rules. I would ask that you speak loud enough for the court reporter to hear. we want to get as good of a record as we can get. And if she can't hear you, then we won't get your answers down properly. okay. Q. I'd also ask that you wait until I'm done asking a question to give your answer so that we don't talk over each other and we can get a clean record. A. Okay. Q. And I also ask that you answer orally either "yes" or "no," not "uh-huh" or "huh-uh" or a nod of the head because that's difficult to discern Page 3
A.

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pardo brian 8-27-08.txt when we're reading the transcript. A. All right. Q. Also, if you need to take a break, we can take breaks. This isn't a test to see how long you can sit in the chair and drink coffee and answer questions, but I would ask and let you know that I will not allow a break if a question is pending. so if I ask a question, I'm going to ask that you answer the question before we break for any reason, regardless if it's to discuss something with your counsel or go use the bathroom. A. Okay. Q. Also, if you don't understand a question I've asked you, let me know and I will try to rephrase it to where you can understand it. if you answer, I'm going to assume that you understood my question and are answering the question that I think I asked. A. Okay. Q. Are you on any medication that affects your memory, sir? No, I don't think so. A. MR. HILBERT: Not that I remember. (Laughter.) THE WITNESS: That's what I was going to say, "Not that I recall." (Laughter.) Q. (BY MS. STRETESKY) Have you had any recent illness that would affect your memory today? A. I don't think so. Q. All right. could you give me a brief description of your employment history? A. Yes. I was in the Army -- I guess I can start there?
Q. Sure.

A. -- from 1962 to 1968. I went to work for a company called Dart Industries for -- until -well, anyway, it was until about the early '70s, '72 or '73. And then I started a company called Solar King, which was incorporated in 1974. And I remained the president and chairman of Solar King until 2000, roughly. NO, no, no, no. I'm sorry. 1990. Did Solar King go out of business in 1990? Q. A. Yes. It went out of the solar energy business in 1986, and we tried to -- it went into Chapter 11. And myself and other investors tried to save the company for four years and finally we couldn't so we just gave up on it, liquidated it actually in '89. And then I began to -- I was technically, you might say, unemployed for about a year. And I had incorporated Life Partners in 1991, and from there -- I've been there ever since. So actually I was 17 years, I think, at Solar King, and 17 or 18 years now at Life Partners. So both of my careers have just been two companies. Q. what kind of business was solar King? A. Solar energy company. Page 4

pardo brian 8-27-08.txt Where was it located? 21 Q. It was located in Nevada and then was A. 22 transferred in 1976 here to Texas. 23 Waco? 24 Q. Uh-huh. Yes. A. 25 0009 Where did it file chapter 11 bankruptcy? Q. 1 Here in Texas. A. 2 And at the time that it filed bankruptcy, Q. 3 were you president and chairman? 4 A. Yes, I was. 5 Now, you said you incorporated Life Q. 6 Partners in 1991. Which Life Partners company was 7 incorporated in 1991? 8 Well, Life Partners, Inc., the operating A. 9 company now, was incorporated in September of 1991. 10 When was Life Partners Holdings Q. 11 incorporated? 12 That was in connection with the reverse A. 13 merger when we took the entity public in 2000. 14 And then had you also incorporated Q. 15 16 Extended Life Services, Inc.? A. I don't recall. 17 Does that company name sound familiar to Q. 18 19 you? Yes, but I'm not sure I recall what the A. 20 21 function of the company is now. (Telephonic interruption.) 22 (BY MS. STRETESKY) Starting with Life Q. 23 Partners, Inc., what were your titles with that 24 25 company? 0010 Well, I was the founder and was chairman A. 1 and chief executive officer. Chairman of the board 2 of directors and chief executive officer and 3 president. 4 Q. And president, as well? 5 A. Yes. 6 What titles do you currently hold with Q. 7 regard to Life Partners, Inc.? 8 (Telephonic interruption.) 9 (Brief discussion off the record.) 10 (BY MS. STRETESKY) I'm sorry for the Q. 11 interruption. 12 What are your current titles with 13 Life Partners, Inc.? 14 I believe that I'm just chairman of the A. 15 board of directors. 16 Is that a compensated position? 17 Q. No, I don't think it is. A. 18 When did you cease acting as CEO of Life Q. 19 20 Partners, Inc.? When we organized or incorporated Life A. 21 Partners Holdings, Inc. 22 That would have been sometime in 2000? Q. 23 Yes. 24 A. When did you cease acting as president for Q. 25 0011 1 Life Partners, Inc.? 2 A. That's when. Q. The same time? 3 4 A. Yeah. Q. Some time in 2000. 5 Page 5

pardo brian 8-27-08.txt Were you compensated as CEO or 6 7 president of Life Partners, Inc.? 8 A. Yes. 9 Q. You drew an annual salary? MR. HILBERT: Object to the form. 10 A. Yes. 11 12 Q. (BY MS. STRETESKY) what were your duties 13 as CEO and president of Life Partners, Inc.? A. 14 To oversee the operations of the company. Q. 15 what -- what are your current titles with Life Partners Holdings, Inc.? 16 A. 17 I'm chairman and chief executive officer 18 and president of Life Partners Holdings, Inc. Q. 19 Are you compensated as chairman of the 20 board of Life Partners Holdings, Inc.? 21 MR. HILBERT: Object to form. 22 A. I'm compensated as president. I'm not compensated as a board member. 23 24 Q. (BY MS. STRETESKY) What are your duties with regards to being president of Life Partners 25 0012 1 Holdings, Inc.? A. 2 Oversee the operations of the company. 3 Q. what does that entail on a daily basis? 4 A. Pardon me? 5 Q. what does that entail? 6 A. Well, it entails making sure that all of 7 the management positions are filled and operating 8 properly and that the company is basically staying 9 on course as set by the board of directors. 10 Q. How many board members are on the board of 11 directors for LPHI? A. 12 Five, I believe. 13 Q. And LPHI is a publicly-traded company; 14 correct? A. Yes, it is. 15 16 Q. And what percentage of the stock do you 17 own? A. 18 Well, I personally only own about 2,000 19 shares. 20 Q. HOW many outstanding stock total is there 21 in LPHI? Outstanding? 22 A. Uh-huh. 23 Q. 24 A. About 12 million. Q. 25 Do you have a trust that owns stock in 0013 1 LPHI? 2 MR. HILBERT: Object to the form. 3 A. There is a trust, a family trust -- yes, I 4 do. It's a family trust. 5 Q. (BY MS. STRETESKY) And how many shares 6 does the family trust own? 7 A. Approximately 6 million. Q. Is the family trust the largest 8 9 shareholder? A. 10 Yes. 11 Q. Who has the right to vote on behalf of the trust? 12 13 MR. HILBERT: Object to form. 14 A. Well, normally I vote by proxy; but the 15 right is -- the trustee has the right to vote. Q. 16 (BY MS. STRETESKY) Who is the trustee? Page 6

he votes. Q. who directs mr. Phillips how to vote? MR. HILBERT: Object to form. A. Mr. Phillips does. He's the trustee. Q. (BY MS. STRETESKY) what's the day-to-day business of Life Partners Holdings, Inc.? 6 7 A. Life Partners Holdings, Inc. is the 8 holding company of the operating subsidiary Life Partners. 9 How many employees does Life Partners 10 Q. 11 Holdings, Inc. have? A. I'm really not sure. 12 who would know that? 13 Q. A. Scott Peden would know that. 14 15 Q. what's Scott Peden's position with LPHI? A. 16 With LPHI he is general counsel. 17 Q. And you understand the question I was 18 asking was how many employees the holdings company 19 has? A. Yes. 20 21 okay. what was the purpose of creating a Q. 22 holdings company for LPI? MR. HILBERT: Object to form. 23 A. well, there was no particular purpose. It 24 25 just resulted from the fact that we took the company 0015 public in 2000, not to raise money but to -- to 1 2 provide transparency, which we felt was going to be 3 important in the growth of the industry. And as a 4 result of that, it was done through a reverse 5 merger. And that company was the public company and so that company became Life Partners Holdings, Inc., 6 7 and its asset was Life Partners, Inc. Q. (BY MS. STRETESKY) And it's Life Partners 8 9 Holdings, Inc. that is publicly traded; correct? MR. HILBERT: Object to form. 10 A. Yes. 11 MR. HILBERT: You're fine. Just so 12 you know, periodically I will make an objection for 13 the record. And unless I instruct you not to 14 answer,go ahead and answer. I will try to squeeze 15 16 it in before your answer. If I don't, she will get 17 it. THE WITNESS: All right. 18 Q. (BY MS. STRETESKY) You mentioned that it 19 20 was -- you did a reverse merger to have a 21 publicly-traded company for the purpose of transparency because you felt the industry needed to 22 have -- or the direction that the industry was going 23 24 was that it was better for the company to be 25 transparent. 0016 1 what about the company needed to be Page 7

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pardo brian 8-27-08.txt A. Tom Phillips. Has there ever been a time where the trust Q. hasn't given you its proxy? MR. HILBERT: Object to form. Yes. whenever they come to the annual A. meetings. Q. (BY MS. STRETESKY) whenever Mr. Phillips comes to the meetings? A. Yes. If he comes to the annual meetings,

pardo brian 8-27-08.tXt transparent? 2 I'm sorry? A, 3 Q. I don't know how to -- you said one of the 4 purposes of creating a publicly-traded company was 5 to allow for transparency; correct? 6 Yes. A. 7 8 Q. what was it that the creation of a public company was allowing you to be transparent? 9 MR. HILBERT: Object to form. 10 A. well, if you're public then you're filing 11 under -- you're regulated by the FCC and you're 12 filing periodic reports, 10-Ks and 10-Qs, and also 13 complying now with Sarbanes-Oxley, as an example. 14 But people that are interested in 15 learning about the company have a much greater view 16 from an independent third party; namely, the 17 auditors, as to the condition and health and welfare 18 19 and so on of the company than you would of a private company where you would just simply be taking the 20 word of the owners that the company is in a certain 21 22 condition. Q. (BY MS. STRETESKY) So you created the 23 publicly-funded company or the publicly-traded 24 company so that potential clients of LPI would have 25 0017 an independent third-party view or opinion of how 1 2 stable LPI was? 3 MR. HILBERT: object to form. MR. TENENBAUM: Join. 4 well, they could derive to their A. 5 satisfaction any question about the company that was 6 material to the operations of the company, whatever 7 that might be. 8 (BY MS. STRETESKY) Are you familiar with Q. 9 10 what kind of information needs to be disclosed in your, for example, 10-Q SB to the FCC? 11 MR. HILBERT: Object to form. 12 Generally, yes. 13 A. Q. (BY MS. STRETESKY) Who prepares those 14 annual reports for the FCC, or for submittal to the 15 FCC? 16 A. well, they are prepared by the company, 17 but they are audited by outside auditors. 18 Q. who within the company prepares them? 19 well, there's -- generally speaking, it's 20 A. the accounting and legal departments that do the 21 22 bulk of the work. The commissioner has taken this action not Q. 23 only against Life Partners and Life Partners 24 Holdings and yourself but a group of people who it's 25 0018 1 been established have entered into licensee agreements with Life Partners. 2 what I'd like to explore right now is 3 4your communications with those what we've called licensees, what your company calls licensees. 5 Do you know who Scott Beemer is? 6 A. No, I do not. 7 Q. Do you know who Eric Cox is? 8 No, I don't. A. 9 Q. Do you know who Lynne Davis is? 10 A. 11 No. Q. Do you know who Gary Hanson is? 12 Page 8

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A. . A Q. Q. A. Q. A. Q. A. . A. Q. A.

pardo brian 8-27-08.txt No. Do you know who Mike Lowe is? No. Do you know who Ken Keller is? No. Do you know who John Roth is? No. Do you know who Ralph Siebert is? No. Do you know who Tim Harper is? Yes. How do you know Mr. Harper? Tim Harper is here in Texas, and he is

what we call a master licensee. Q. How were you first introduced to Mr. Harper? A. Mr. Harper visited us here in Waco and introduced himself to us about five years ago or so. Q. And did he come down to Waco to introduce himself in the hopes of getting a job with Life Partners? MR. HILBERT: Object to form. A. Not -- not -- getting a job? Q. (BY MS. STRETESKY) uh-huh. A. I don't think so. Q. Did he come to Life Partners seeking to learn more about the opportunities in investing in viatical settlement investments? MR. HILBERT: Object to form. A. I don't think so, but I think you would be better off to ask him those questions. Q. (BY MS. STRETESKY) Did Mr. Harper come and speak to you about becoming a licensee with Life Partners? MR. HILBERT: Object to form. A. Not initially. I don t recall that, no. Q. (BY MS. STRETESKY) when did he, if not initially, did he start engaging in discussions with Life Partners about becoming a licensee? A. I don't recall. Q. Had you had a prior relationship with Mr. Harper before he came down to Waco? No. A. MR. HILBERT: Object to form. Q. (BY MS. STRETESKY) The sales agent e defendants have described in their depositions meetings that they have had in Waco with Life Partners' staff, particularly Mr. Peden and yourself. Do you recall ever having discussions in Waco with Gary Hanson? MR. HILBERT: Object to form. A. No. Q. (BY MS. STRETESKY) Do you ever recall meeting with a group of potential licensees or licensees in your offices in Waco? A. At any time you mean? Q. At any time. A. I -- I occasionally speak togroups of licensees as a way of telling them usua ly the background of the company and what the company does Page 9

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pardo brian 8-27-08.txt and give them information as to our philosophy and that sort of thing. What do you tell them about the background Q. of the company? A. when it was formed, what our philosophy is, why we do what we do. And that's what I'm asking you. Tell me Q. what you tell potential licensees. MR. HILBERT: Object to form. well, just what I told you I tell them. I A. mean, if you want me to give you a word-for-word speech, I -(BY MS. STRETESKY) I would like to hear Q. the background of Life Partners Holdings and Life Partners, Inc.; yes. MR. HILBERT: Object to form. I think you could find that information in A. our public documents filed with the FCC under the "Operations" section. (BY MS. STRETESKY) Are you unable to give Q. the background and history of Life Partners Holdings, Inc. and Life Partners, Inc. at this time? MR. HILBERT: Object to form. No. I just think the information is A. available publicly. (BY MS. STRETESKY) And did you draft Q. what's found in the annual reports filed with the FCC? A. No. Q. Then could you please, sir, give me your history of Life Partners Holdings and Life Partners, Inc.? MR. HILBERT: This is argumentative. He just did. we just went through this. THE WITNESS: It is the same as what I just told you. MS. STRETESKY: I'm asking him, though, what he told -- what he says when he meets with potential licensees. MR. HILBERT: He just told you the history of the company. He just gave it to you. Q. (BY MS. STRETESKY) Okay. Could you please give me the philosophy of Life Partners Holdings, Inc. and Life Partners, Inc.? A. Well, first of all, Life Partners Holdings, Inc. is a holding company and has no operations, so it's merely a holding vehicle. It does not operate. Life Partners, Inc.'s philosophy is to do the best job we can to act on behalf of the purchaser as their agent. The purchasers, we act as their agent to give them as much information possible about policies that are entered into the market for the purpose of being sold by the sellers and their representatives. So we're kind of the Caldwell Banker of the insurance world, you might say, in that we, Life Partners, represents, through an agency and special power of attorney, clients -- who you would call investors -- clients who are interested in Page 10

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 0024 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 0025 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

pardo brian 8-27-08.txt purchasing policies. And our philosophy is to do the best job possible to get them the most accurate information, up-to-date information, so they can i make an informed decision on whether or not they want to buy a policy or a portion of a policy. Q. Is it your opinion that Life Partners, Inc. is in the business of insurance? MR. HILBERT: Object to form. A. No, we're not in the business of insurance. (BY MS. STRETESKY) Is it your opinion -Q. correct me if I'm wrong -- that Life Partners, Inc. is in the business of brokering insurance contracts? MR. HILBERT: Object to form. A. No, we're not brokering insurance contracts. Q. (BY MS. STRETESKY) When you have occasion to meet in Waco and the discuss with potential licensees or licensees here to give them the background and the history philosophy of Life Partners, Inc., do you the SEC case, Life Partners versus SEC? MR. HILBERT: Object to form. I do not, but that information is provided A. by our legal department and it is discussed, yes. (BY MS. STRETESKY) And your legal Q. department would be Scott Peden? Yes, or Justin Bound. A. (Clarification by the reporter.) THE WITNESS: Bound. B O U N D. Q. (BY MS. STRETESKY) Do you recall ever having any communications with a client who resides in Colorado? No. A. Q. Have you ever been to Colorado? A. Yes. Q. How many times? A. Twice. Q. And what were the circumstances? well, the first time was to go to Vail for A. a skiing vacation, although I don't ski. (Laughter.) Q. (BY MS. STRETESKY) You can sit by the
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fireplace; right? A. And that was about 20 years ago. Okay. And the other occasion that Q. you've -A. The other occasion was to lay a courtesy call on our -- the owner of the -- tie trustee we were using at the time, which was a bank there that owns Sterling Trust, a Texas nonbank trust company. And what was the purpose of the courtesy Q. call? To eat dinner. We had dinner with the A. chairman and senior officers and just talked to them about the, you know, the business. Just a courtesy call; there was no specific purpose. Do you recall when that was? Q. It was more than a year ago, but I don't A. recall exactly when. Are you still -- is Life Partners, Inc. Q. still using Sterling Trust as the escrow agent? Page 11

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A. Q. time?

pardo brian 8-27-08.txt We do still use them; yes. Are they your primary escrow agent at this

Well, they are one of three. A. How often do you discuss Life Partners, Q. Inc.'s business with Scott Peden? MR. HILBERT: Object to form. well, pretty much on an ongoing basis. A. He's a senior officer of the company. we both work here so we -Q. (BY MS. STRETESKY) would it be fair to say on a daily basis? A. To the extent we are here, yes. Q. Does he consult you prior to making decisions with regard to Life Partners, Inc.? MR. HILBERT: object to form. well, not all of them, no. Not all A. decisions, no. Q. (BY MS. STRETESKY) Most decisions? MR. HILBERT: Object to form. A. I don't know that I would say most decisions. It would be a -- probably not. (BY MS. STRETESKY) what type of decisions Q. does he consult you on? A. He consults with me on legal matters and personnel matters. Part of his role is operational, and so he consults with me on that. Primarily technical issues of the company's operations. MR. KLEIN: Can we take a little break? (Recess at 9:33 a.m. to 9:38 a.m.) Q. (BY MS. STRETESKY) I just had a few more questions. A. okay. Q. Could you describe the process by which -how Life Partners, Inc. finds policies for sale? MR. HILBERT: Object to form. A. They are tendered to us by -- usually by representatives of the sellers. Q. (BY MS. STRETESKY) Could you describe the process by which Life Partners utilizes licensees to market policies to purchasers? MR. HILBERT: Object to form. MR. TENENBAUM: Join. A. we don't market policies to purchasers. (BY MS. STRETESKY) What do you do? Q. A. we make policies available for purchasers who are interested in owning a policy or a piece of a policy as an investment. Q. How do you do that? MR. HILBERT: Ob . ct to form. A. well, by going throug a very significant underwriting pprocess to gather all the information that we possibly can that would be pertinent as to all the aspects of the policy that could possibly have an effect one way or the other, you know, on

h

the owner if they chose to buy it. They make the choice. Q. (BY MS. STRETESKY) Who determines what information would be pertinent to a potential Page 12

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pardo briar 8-27-08.txt contestability period of the policy is completed? A. Yes. Q. Are they vetted for determination of life expectancy? A. Yes. Q. Who makes the determination of life expectancy? A. Usually that's -MR. HILBERT: object to form. A. -- done by a third party. Doctors or medical underwriters experienced in estimating life expectancy; although the senior settlements, the average age of the insured is 78 to 82, so their life expectancies are estimated. But it doesn't take a mental giant to figure out that, you know, these people are probably not going to be around, you know, a long, long time. Q. (BY MS. STRETESKY) Regardless of what health issues they may have? A. Well, if they have a serious health issue, then, of course it could be less; but if they have a family history of good health, it would be conceivably longer. Q. Who contracts with the third party making the life expectancy determinations? We do. Life Partners does. A. MS. STRETESKY: I don't think I have anything else. MR. HILBERT: Thank you. (DEPOSITION CONCLUDED AT 9:45 A.M.)

CHANGES AND SIGNATURE WITNESS NAME: BRIAN D. PARDO DATE: 08-27-08 PAGE LINE CHANGE REASON

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pardo Brian 8-27-08.txt I, BRIAN D. PARDO, have read the foregoing deposition and hereby affix my signature that same is true and correct, except as noted above.

BRIAN D. PARDO THE STATE OF 8 COUNTY OF 9 Before me, , on this 10 day personally appeared BRIAN D. PARDO, known to me 11 12 (or proved to me under oath or through 13 ) (description of 14 identity card or other document)) to be the person 15 whose name is subscribed to the foregoing instrument 16 and acknowledged to me that they executed the same 17 for the purposes and consideration therein 18 expressed. 19 Given under my hand and seal of office this 20 day of 21 22 NOTARY PUBLIC IN AND FOR THE STATE OF 23 COMMISSION EXPIRES: 24 25 0034 1 DISTRICT COURT, CITY AND ) 2 COUNTY OF DENVER, ) COLORADO ) 3 ) 1437 Bannock Street ) 4 Denver, CO 80202 ) ) 5 FRED J. JOSEPH, ) ) Securities Commissioner for the state of 6 )
Colorado, 7 ) )

8 9 10 11 12 13 14 15 16 17

) ) v. ) ) LIFE PARTNERS, INC., a ) Texas Corporation, LIFE ) ) PARTNERS HOLDINGS, INC., a Texas Corporation, ) SCOTT PEDEN, SCOTT ) BEEMER, ERIC COX, LOWRY ) LYNNE DAVIS, GARY HANSON, ) TIM HARPER, KENNETH ) ) KELLER, MIKE LOWE, LARRY MICKELSON, JOHN ROTH, ) ) RALPH SIEBERT, AND BRIAN PARDO, ) ) Defendants. ) ) JOHN W. SUTHERS, ) Page 15

Plaintiff,

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Attorney General CHRISTINE C. STRETESKY, 31749* RUSSELL KLEIN, 31965* Asst. Attorneys General 1525 Sherman Street, 7th Floor Denver, CO 80203 303-866-5278 303-866-5395 Facsimile *Counsel of Record

pardo brian 8-27-08.txt ) Case No, 2007 CV 5218 ) ) ) Div.: 5 ) ) ) ) ) ) ) )

ORAL DEPOSITION OF BRIAN D. PARDO AUGUST 27, 2008 I, Sherry D. Current, Certified shorthand Reporter in and for the State of Texas, hereby certify to the following: That the witness, BRIAN D. PARDO, was duly sworn by the officer and that the transcript of the oral deposition is a true record of the testimony given by the witness; That the deposition transcript was submitted on to the witness or to the attorney for the witness for examination, signature and return to me by That the amount of time used by each party at the deposition is as follows: MS. STRETESKY 00 HOURS:38 MINUTE(S) MR. KLEIN 00 HOURS:00 MINUTE(S) MR. HILBERT 00 HOURS:00 MINUTE(S) MR. TENENBAUM 00 HOURS:00 MINUTE(S) That pursuant to information given to the deposition officer at the time said testimony was taken, the following includes counsel for all parties of record: PLAINTIFF FRED J. JOSEPH, Securities Commissioner for the State of Colorado:

JOHN W. SUTHERS, Attorney General CHRISTINE C. STRETESKY, 31749 25 0036 1 Asst. Attorneys General 1525 Sherman street, 7th Floor 2 Denver, CO 80203 (303) 866-5278 Telephone (303) 866-5395 Facsimile 3 4 FOR THE DEFENDANTS LIFE PARTNERS, INC., a Texas Corporation, LIFE PARTNERS HOLDINGS, INC., a Texas Corporation, SCOTT PEDEN, TIM HARPER, LARRY 5 MICKELSON, JOHN ROTH, AND BRIAN PARDO: 6 Mr. Otto K. Hilbert, II 7 Robinson waters & O'Dorisio, P.C. 1099 18th Street 8 26th Floor Denver, Colorado 80202-1926 (303) 297-2600 Firm 9 (303) 824-3120 Direct 10 Page 16

pardo brian 8-27-08.txt
11 FOR THE DEFENDANTS SCOTT BEEMER, ERIC COX, LOWRY LYNNE DAVIS, GARY HANSON, KENNETH KELLER, MIKE LOWE

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AND RALPH SIEBERT:

Mr. Thomas Tenenbaum 14 The Tenenbaum Law Firm Park Ridge Corporate Center, Suite 600 15 10475 Park Meadows Drive Lone Tree, Colorado 80214 16 (303) 804-3800 Telephone (303) 804-3802 Facsimile 17 18 I further certify that I am neither counsel for, 19 related to, nor employed by any of the parties or 20 attorneys in the action in which this proceeding was 21 taken, and further that I am not financially or 22 otherwise interested in the outcome of the action. Further certification requirements pursuant to 23 24 Rule 203 of TRCP will be certified to after they 25 have occurred. 0037 1 certified to by me this 12th of September, 2008, 2 3 4 Sherry D. Current 5 Texas CSR No. 3113 Expiration Date: 12-31-09 6 ASSOCIATED COURT REPORTERS Firm No. 29 7 P. 0. Box 1247 Waco, Texas 76703 8 (254) 753-3330 Telephone (800) 340-5881 Toll Free 9 (254) 754-4050 Facsimile 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 0038 FURTHER CERTIFICATION UNDER RULE 203 TRCP 1 2 3 The original deposition was/was not returned to 4 the deposition officer on • 5 If returned, the attached changes and Signature 6 page contains any changes and the reasons therefor; 7 If returned, the original deposition was 8 delivered to MS. STRETESKY, Custodial Attorney; 9 That $ is the deposition officer's 10 charges to the PLAINTIFF FRED J. JOSEPH, Securities 11 Commissioner for the State of Colorado for preparing Page 17

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pardo brian 8-27-08.txt the original deposition transcript and any copies of exhibits; That the deposition was delivered in accordance with Rule 203.3, and that a copy of this certificate was served on all parties shown herein on and filed with the Clerk. Certified to by me this day of , 2008. Sherry D. Current Texas CSR No. 3113 Expiration Date: 12-31-09
ASSOCIATED COURT REPORTERS Firm No. 29

P. 0. Box 1247 Waco, Texas 76703 (254) 753-3330 Telephone (800) 340-5881 Toll Free (254) 754-4050 Facsimile

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