Here's something interesting. Note who HAS employment agreements with LOCH and ChemTech (see bolded items) and Secore, a LOCH attorney, is responding for document request matters relating to Wade Poteet and Harold Cauthen.
SECORE & WALLER, L.L.P.
ATTORNEYS AND COUNSELORS
SUITE 2290, ONE GALLERIA TOWER
13355 NOEL ROAD, LB 75
DALLAS, TEXAS 75240-6657
(972) 776-0200
TELECOPIER (972) -776-0240
WAYNE SECORE, P.C. DIRECT LINE: (972) 776-0222
November 13, 2000
VIA HAND DELIVERY
Marshall Gandy, Esq.
U.S. Securities and Exchange Commission
Division of Enforcement
801 Cherry Street, 19th Floor
Fort Worth, Texas 76102
Re: Loch Harris Inc., File No. FW-2194-A
Dear Mr. Gandy:
Enclosed please find documents requested by your subpoena to Mr. Rodney A. Boone, President and Chief Executive Officer of Loch Harris, Inc. Please be advised that the Company will be sending you minutes that clarify certain minutes, which are being transmitted with this request. Additionally, I have contacted Quinton Seamons, attorney for Henry Blair, and have asked him to send copies of the VAMMP Documents in his client's possession. I have been unable to contact the attorney for Messrs. Poteet and Cauthen, because he is, and has been, involved in a lengthy trial. When he becomes available, I will request that his clients gather the VAMMP documents in their possession. I will forward the documents to you shortly after I receive them, except for documents that may be withheld due to trade secret and confidentiality issues. Moreover, the Company has two wholly-owned subsidiaries which are not specifically mentioned in the subpoena, Stockton Feed and Milling, lnc. And Ranchers Feed Yards, Inc. These were purchased by Loch Harris, effective January 1, 2000. The records called for by the subpoena regarding these Companies are maintained at Fort Stockton, Texas and will be produced no later than November 18, 2000. Finally, the Company continues to search its records and will produce additional documents as they are discovered.
B. Production.
1. All articles of incorporation, charters, bylaws, and any amendments to any of the foregoing, for Loch Harris, ChemTech, SSI, Agra Tech, Petro Tech, Info Tech and PMR.
These documents are Bates stamped numbered 000267 through 000323 and numbered 003014throughOO3041.
In addition, in connection with your request for the Article of Incorporation and other documents pertaining to SSI and PMR, please be advised that Loch Harris does not own those companies, as the Company purchased only SSI's and PMR's assets.
Marshall Gandy, Esq.
U.S. Securities and-Exchange Commission
November 13, 2000
Page 2
2. All agenda, minutes, resolutions, consents, or reports of the boards of directors of Loch Harris, ChemTech, SSI, AgraTech, PetroTech, InfoTech and PMR, including agenda, minutes, resolutions, consents or reports of committees of the boards of directors of Loch Harris, ChemTech, SSI, AgraTech, PetroTech, InfoTech and PW and all memoranda, presentations, exhibits, handouts and other documents that were reviewed by or disseminated to the boards of directors or committees thereof.
These documents are Bates stamped numbered 000324 through 000425.
3. Documents sufficient to identify the name, address, telephone number, social security number, position, and dates of employment or service for all present and former officers, directors, and employees of Loch Harris, ChemTech, SSI, AgraTech, PetroTech, InfoTech and PNM.
A list is provided and Bates stamped numbered 003042 through 003043.
4. All organizational charts that reflect the subsidiaries, divisions, departments, offices, committees, groups and other organizational units within Loch Harris, ChemTech, SSI, AgraTech, PetroTech, InfoTech and PNM and the names and positions of persons within those organizational units, including without limitation such charts that reflect the identities and positions of persons within the finance and administration departments and audit committees, if any.
There are no documents responsive to this request.
5. Documents sufficient to identify all bank, savings & loan, brokerage or other financial institution accounts in the name of Loch Harris, ChemTech, SSI, AgraTech, PetroTech, InfoTech and PMR under the control of Loch Harris, ChemTech, SSI, AgraTech PetroTech, InfoTech and PMR or in which Loch Harris, ChemTech, SSI, AgraTech, PetroTech, InfoTech and PMR has a direct, indirect or beneficial interest.
A list is provided and Bates stamped numbered 003044 through 003047.
6. Documents sufficient to identify all safe deposit boxes in the name of Loch Harris,Loch Harris, ChemTech, SSI, AgraTech, PetroTech, InfoTech and PNM, under the control of Loch Harris, Loch Harris, ChemTech, SSI, AgraTech, PetroTech, InfoTech and PMR, or in which Loch Harris, ChemTech, SSI, AgraTech, PetroTech, InfoTech and PMR has a direct, indirect or beneficial interest, and documents sufficient to identify the following:
a. the name, address, and telephone number for the financial institution;
b. the branch at which each safe deposit box is located; and
Marshall Gandy, Esq.
U.S. Securities and Exchange Commission
November 13, 2000
Page 3
C. the names of all persons or entities with access to the safe deposit box(es). There are no documents responsive to this request.
7. All documents relating to or concerning the acquisition of the assets and operations of ChemTech by Loch Harris.
Please be advised that Loch Harris did not acquire the assets and operations of ChemTech. Loch Harris formed ChemTech in 1997 and therefore, there are no documents responsive to this request.
8. All documents relating to or concerning the acquisition of the assets and operations of SSI by Loch Harris.
These documents are Bates stamped numbered 000426 through 000485 and 003048 through 003055.
In addition, also see response to item numbers 13 and 15.
9. All documents relating to or concerning the acquisition of the assets and operations of AgraTech by Loch Harris.
Please be advised that Loch Harris formed AgraTech in 1997 and therefore did not acquire the assets and operations from another company and therefore, there are no documents responsive to this request.
10. All documents relating to or concerning the acquisition of the assets and operations of PetroTech by Loch Harris.
Loch Harris formed PetroTech and did not acquire the assets and operations from another company and therefore, there are no documents responsive to this request.
ii. All documents relating to or concerning the acquisition of the assets and operations of InfoTech by Loch Harris.
Loch Harris formed InfoTech and therefore, there are no documents responsive to this request.
12. All documents relating to or concerning the acquisition of the assets and operations of PMR by Loch Harris.
These documents are Bates stamped numbered 000486 through 000489.
Also see response to item number 15.
Marshall Gandy, Esq.
U.S. Securities and Exchange Commission
November 13, 2000
Page 4
13. All documents reflecting or relating to communications concerning Loch Harris' accounting for the acquisition of the assets and operations of ChemTech, SSI, AgraTech, PetroTech, InfoTech and PMR including, all appraisals, reviews, evaluations, or other documents relating to or concerning the valuation(s) of the assets.
See responses to item numbered 8 and 12.
14. Financial statements, audited and unaudited, prepared by or for Loch Harris, ChemTech, SSI, AgraTech, PetroTech, and PMR for internal use or otherwise during the relevant period.
These documents are Bates stamped numbered 000490 through 000651.
15. All general ledgers and trial balances for Loch Harris, ChemTech, SSI, Agra Tech, Petro Tech, Info Tech and PMR during the relevant period.
These documents are Bates stamped numbered 000652 through 000810.
16. The personal files and all documents related to compensation agreements, stock option plans, bonuses, and employment contracts for the following individuals:
Dr. Robert B. ("R.B.”) Baker ("Dr.Baker”)
Rodney A. Boone ("Boone")
Mark E. Baker ("Baker)
Dr. Henry M. Blair ("Blair")
Dr. Wade M. Poteet ("Poteet)
Harold K. Cauthen ("Cauthen”)
These documents are Bates stamped numbered 003056 through 003062. Please see item number 8.
In addition, I understand that Dr. Blair has previously submitted a contract for his employment agreement with Loch Harris and the Company could not locate the agreement.
-17. All address books, telephone lists, "Rolodexes", and other similar documents used by Dr. Baker, Boone, Baker, Blair Poteet and Cauthen during the relevant period whether such documents were maintained by them or on their behalf.
There are no documents in the control of Loch Harris.
18. All calendars, telephone logs, schedules, itineraries, diaries, journals, travel and entertainment records, and other similar documents reflecting the schedules and activities of Dr.Baker, Boone, Baker, Blair, Poteet and Cauthen during the relevant period whether such documents
Marshall Gandy, Esq.
U.S. Securities and Exchange Commission
November 13, 2000
Page 5
were maintained by them or on their behalf
These documents are Bates stamped numbered 000811 through 001609.
19. All telephone billing records, including long distance, local, facsimile, cellular, telex, and mobile phone records, identifying calls for the relevant period for Dr. Baker, Boone, Baker, Blair,
Poteet and Cauthen.
These documents are Bates stamped numbered 001610 through 002790 and 003063 through 003064.
20. All documents referring or relating to how Loch Harris operates as a technology incubator, acquiring developmental stage companies, patents and technologies that address identifiable consumer needs, including the criteria used in choosing the companies to acquire, finding prospects, progressing from one industry to another and determining exit strategies.
See response to items 14 and 29.
21. All documents referring or relating to any auditor's opinion or r6port concerning the ability of Loch Harris to continue as a going concern.
See response to item number 14.
22. All documents reflecting or relating to any long-term debt of Loch Harris ChemTech, SSI, AgraTech, PetroTech, InfoTech and PNM.
See documents Bates stamped numbered 002791 to 002809.
Please be advised that although these documents are being submitted, Loch Harris does not admit that it has ever had any long term debt during the period cited in the subpoena. Thus, these documents are being tendered for informational purposes only.
23. Documents sufficient to identify any officers, directors, executives or control persons of Loch Harris, ChemTech, SSI, AgraTech, PetroTech, InfoTech and PMR who have at any time filled for bankruptcy or been the subject of any criminal or regulatory proceedings.
There are no documents responsive to this request.
24. All documents referring or relating to the construction and operation of ELF and VAMMP including the theory, principle, design, description, specifications, diagrams, engineering reports and operation or instruction manuals.
Marshall Gandy, Esq.
U.S. Securities and Exchange Commission
November 13, 2000
Page 6
In connection with this request, please be advised that my understanding is that Messrs. Poteet, Cauthen and Blair have already submitted documents concerning the ELF. Please be advised that certain documents relating to the ELF have been withheld due to confidentiality and trade secret issues.
Other than those documents, the documents in Loch Harris' possession are Bates stamped numbered 003065 through 003125.
As stated in the opening paragraph of this response, the Company is in the process of gathering the subpoenaed documents relating to VAMMP and will produce the non-confidential documents to you as soon as I obtain the possession of such documents and reviewed them. In addition however, the Company expects that certain documents relating to VAMMP will be withheld which contain trade secrets and confidentiality matters.
25. All documents supporting representations and/or claims regarding the current and projected capabilities and performance of ELF and VAMMP including all internal and external reports or evaluations.
In connection with this request, please be advised that my understanding is that Messrs. Poteet, Cauthen and Blair have already submitted documents concerning the ELF. Please be advised that certain documents relating to the ELF have been withheld due to confidentiality and trade secret issues.
As stated in the opening paragraph of this response, the Company is in the process of gathering the subpoenaed documents relating to VAMMP and will produce the non-confidential documents to you as soon as I obtain the possession of such documents and reviewed them. In addition however, the Company expects that certain documents relating to VAMMP will be withheld which contain trade secret and confidentiality matters.
26. All documents referring or relating to any past or future tests or demonstrations of ELF including those:
a. attended by personnel of the United States General Accounting Office on or about January 21, 2000.
b. conducted at the Ruder Boskovic Institute in Zagreb, Croatia, on or about February 11, 2000.
C. conducted near Karlovac, Croatia, on or about February 12, 2000.
Marshall Gandy, Esq.
U.S. Securities and Exchange Commission
November 13, 2000
Page 7
d. conducted at the International Society for Optical Engineering conference in San Diego, California, on or about August 2, 2000.
e. conducted on the grounds of the United States Capitol ("House Triangle') on or about September 13, 2000.
See response to item 29.
27. All documents reflecting or relating to any advances, loans, contributions of funds, or other payments or transfers -of money or securities, directly or indirectly, to, from, between, or among Loch Harris, ChemTech, SSI, AgraTech, PetroTech, InfoTech and PMR and any public relations firm, investor relations firm, stock promoter, broker-dealer, any affiliate of a broker-dealer, registered representative or a broker-dealer, or person associated with a broker-dealer.
See documents Bates stamped numbered 003126 to 003130. See also response to item number 2.
28. All documents reflecting or relating to any contract, agreement or understanding between Loch Harris, ChemTech, SSI, AgraTech, Petro Tech, Info Tech and PMR and any public relations firm, investor relations firm, stock promoter, broker-dealer, any affiliate of a broker-dealer, registered representative of a broker-dealer, or person associated with a broker-dealer.
See documents Bates stamped numbered OO2810 through OO2813.
Additionally, see response to item number 27.
29. All press releases, newswire releases, Internet web pages, and public announcements issued by or on behalf of Loch Harris, ChemTech, SSI, AgraTech, PetroTech, InfoTech and PMR.
These documents are Bates stamped numbered 002814 through 003013 and 003131 through 003133.
In addition, Loch Harris previously supplied you with certain documents responsive to item number 29.
30. All documents reflecting or relating to approval of, or authorization for the dissemination of, press releases, newswire releases, Internet web pages, and public announcements issued by or on behalf of Loch Harris, ChemTech, SSI, AgraTech, PetroTech, InfoTech and PMR.
There are no documents responsive to this request.
31. All documents reflecting or relating to any advances, loans, contributions of funds or other payments of money or securities, or transfers, directly or indirectly, from Loch Harris, ChemTech, SSI, AgraTech, PetroTech, InfoTech and PMR, Dr..Baker, Boone, Baker, Blair, Poteet
Marshall Gandy, Esq.
U.S. Securities and Exchange Commission
November 13, 2000
Page 8
or Cauthen to the Croatian Mine Action Centre ("CROMAC'), the Croatian national government or any individual associated with any demining effort including, Dr. Vladivoj Valkovic.
These documents are Bates stamped numbered 003134 through 003136.
32. All documents reflecting or relating to any contract, agreement or understanding between Loch Harris, ChemTech, SSI, AgraTech, PetroTech, InfoTech and PMR, Dr. Baker, Boone, Baker, Blair, Poteet or Cauthen, and the Croatian Mine Action Centre ("CROMAC'), the Croatian national government or any individual associated with any demining effort including, Dr. Vladivoj Valkovic.
These documents are Bates stamped numbered 003137 through 003150.
33. All documents reflecting or relating to communications, directly or indirectly, between Loch Harris, ChemTech, SSI, AgraTech, PetroTech, InfoTech and PMR, Dr. Baker, Boone, Baker, Blair, Poteet or Cauthen, and the Croatian Mine Action Centre ("CROMAC'), the Croatian national government or any individual associated with any demining effort including, Dr. Vladivoj Valkovic.
These documents are Bates stamped numbered 003151 through 003164. Also, see item number 18.
34. All documents referring or relating to the status of development and testing of ELF or VAMMP including, costs analysis of past, present and future research and development, testing, manufacturing, marketing and distribution.
These documents are Bates stamped numbered 003165 through 003189. Also, see response to item 24.
35. All documents referring or relating to any communication including, any offer, solicitation, request, promise or pledge by Loch Harris to the shareholders of Loch Harris' common stock to contribute or donate proceeds from the sale of Loch Harris' common stock to Loch Harris in return or exchange for shares of restricted stock.
These documents are Bates stamped numbered 003190 through 003229, as well as item number 1. Documents Bates stamped numbered 003228 through 003229 are being withheld based on attorney-client privileges
36. All documents referring or relating to the accounting literature Loch Harris relied upon to record stock transactions during fiscal 1998 and 1999, including documents sufficient to identify how a determination was made that a restricted share of stock was worth 33% of the market value of a share common stock.
Marshall Gandy, Esq.
U.S. Securities and Exchange Commission
November 13, 2000
Page 9
See response to item 14.
37. All documents referring or relating to Loch Harris obtaining operating funds through capital contributions from interested investors, including documents sufficient to identify said interested investors.
These documents are Bates stamped numbered 003230 through 003333 and see responses to items 2, 14 and 35.
The enclosed materials have been submitted solely for the Commission's use in connection with the aforementioned request. Certain of the information contained in all of these documents is privileged and/or confidential. As provided by the Commission's procedures with respect to the Freedom of Information Act (FOIN), Loch Harris requests confidential treatment of all of the pages of the documents provided to you. We have stamped those documents "Confidential Treatment Requested."
Loch Harris requests that the documentation submitted to the Commission be kept in a nonpublic file and that access to them by any third party who is not a member of the Commission or its staff be denied, except as specifically required otherwise by law.
If the Commission receives a FOIA request for the enclosed documents, I understand that the staff of the Commission will make an initial determination as to whether access to this information should be granted. I also understand that if the Commission initially determines that such requested information should be provided, the Commission will provide Loch Harris written notice and an opportunity to substantiate the continued confidential treatment and withholding of the requested information as well an opportunity to seek judicial relief prior to the Commission releasing such information. If the Commission receives a FOIA request for documents provided by Loch Harris please contact the undersigned. Confidential treatment of this letter is also requested.
Finally, as we previously discussed, several other governmental agencies as well as academic institutions, research labs and private companies (many of which are funded by millions of dollars of governmental research grants) are conducting research to develop products which could be competitive with ELF and VAAMP. Dissemination of the trade secrets would destroy the value of the technology to the Company. In this day when substantial intellectual property is protected as a trade secret (rather than patent and copyright protection which often serves merely as a blueprint for competitors to copy and/or design around), it does not seem that it should be a question of first impression as to how to protect the sanctity of the trade secrets while still allowing the SEC to conduct its investigation. Loch Harris would like to work with the SEC to establish a procedure
Marshall Gandy, Esq.
U.S. Securities and Exchange Commission
November 13, 2000
Page 10
Whereby the SEC could satisfy questions it has regarding ELF and VAMMP without subjecting the Company’s proprietary trade secret information to potentially broad and destructive dissemination to competitors and others through the SEC’s Routine Uses of Information.
Very truly yours,
Wayne M. Secore, P.C.
WMS:dkc
Enclosures
Cc: Mr. Rodney A. Boone
Loch Harris
Cc: FOIA Officer (w/o enclosures)
Securities and Exchange Commission
6432 General Green Way
Mail Stop 0-5
Alexandria, Virginia 22312
AI
