FILED
DALLAS COUNTY
2/5/2016 4:29:03 PM
FELICIA PITRE
DISTRICT CLERK

6 CIT CERT MAIL

Angie Avina

DC-16-01483
CAUSE NO.____________________
)
MARK R. BRESLIN; BRIAN D. DEARING,
)
Individually and as Trustee of BRIAN D.
)
DEARING TRUST; SHARON M. DEARING; )
H. DEARING COMPANY; TOD E. FRICK;
)
ALAN HENSLER; RACHELLE HENSELER; )
COLE HENSELER and ROSS HENSELER,
)
minors by and through their parents ALAN and )
)
RACHELLE HENSELER; DAVID
HENSELER; GARRETT HENSELER;
)
TAYLOR HENSELER; RHONDA G. HICE;
)
PHILIP HODGSON; CHRISTOPHER IVES; )
)
RICHARD JOHNSON; DAN MATTHEWS,
Individually and as Trustee with CATHY
)
ATTHEWS as Trustee of CAZ LIVING TRUST;)
WILLIAM RANCE REEHL; DWAYLAH
)
REEHL; WILLIAM CAMERON REEHL;
)
CAROLINE REEHL BOYKIN; CLAUDIA D. )
SHOEMAKER; MARSHALL SHOEMAKER; )
WILLIAM R. STAGGERS; LORI B. TERRAL; )
T. GREGORY TERRAL; and STEPHEN D.
)
WALKER;
)
)
Plaintiffs,
)
)
v.
)
)
)
SERVERGY, INC.; LANCE A. SMITH;
WILLIAM MAPP, III; WILLIAM MAPP IV; )
VIHAR R. RAI; and TOWNSEND J. “JACK” )
SMITH;
)
)
Defendants.
)

IN THE DISTRICT COURT

DALLAS COUNTY, TEXAS

______JUDICIAL DISTRICT

JURY TRIAL DEMANDED

PLAINTIFFS’ ORIGINAL PETITION
TO THE HONORABLE JUDGES OF SAID COURT:
COME NOW Plaintiffs, MARK R. BRESLIN; BRIAN D. DEARING; SHARON M.
DEARING; DR. BRIAN D. DEARING as Trustee of BRIAN D DEARING TRUST; H. DEARING

1
Page 1 of 178

 COMPANY; TOD E. FRICK; ALAN HENSLER; RACHELLE HENSELER; COLE HENSELER
and ROSS HENSELER, minors by and through their parents; DAVID HENSELER; GARRETT
HENSELER; TAYLOR HENSELER; RHONDA G. HICE; PHILIP HODGSON; CHRISTOPHER
W. IVES; RICHARD JOHNSON; DAN MATTHEWS, individually and jointly with his wife
CATHY MATTHEWS, as Trustees of CAZ LIVING TRUST; WILLIAM RANCE REEHL;
DWAYLAH REEHL; CAROLINE REEHL BOYKIN; WILLIAM CAMERON REEHL;
CLAUDIA D. SHOEMAKER; MARSHALL SHOEMAKER; WILLIAM R. STAGGERS; LORI B.
TERRAL; T. GREGORY TERRAL; and STEPHEN D. WALKER (together, “Plaintiffs”), and for
their complaint against Defendants SERVERGY, INC. (“Servergy” or the “Company”), LANCE
SMITH; WILLIAM MAPP, III (“Bill Mapp”), WILLIAM MAPP, IV (“Will Mapp”); VIHAR RAI;
and TOWNSEND J. “JACK” SMITH (“Jack Smith”) (together, “Defendants”), allege as follows:1
DISCOVERY CONTROL PLAN
1.

Plaintiffs intend to conduct discovery under Level 3 of the Texas Rules of Civil

Procedure 190.4 because this is a relatively document-intensive case.

INTRODUCTION
2.

From February 2013 to November 2013, defendant Servergy conducted a private

placement stock offering, raising $20 million, mostly from individual investors in or around
Fairhope, Alabama. Servergy was a “pre-revenue” start-up, holding itself out as having invented an

1

Plaintiffs have made allegations contained herein based upon the investigation of Plaintiffs' counsel, which
included, among other things, a review of SEC filings by Servergy, as well as regulatory filings and reports, the SEC’s
lawsuit against Servergy to enforce its subpoenas, filed in December 2014, press releases, Investor Updates and other
public statements issued by the Company, communications between Plaintiffs and Defendants, the Company’s Private
Placement Memorandum, the Roadshow PowerPoint presentation used to solicit Plaintiffs’ purchases, communications
between Plaintiffs and their broker, Mark Baggerly, and/or his employer, WFG Investments (the underwriter for the
offering), and media reports about the Company. Plaintiffs believe that substantial additional evidentiary support will
exist for the allegations set forth herein after a reasonable opportunity for discovery.

2
Page 2 of 178

 amazing new technology for data center computer servers that allowed their servers to operate with
up to 80% less power consumption than competing products, and in one-quarter (1/4) the space
required by current technologies. Defendants’ claims for their product and the market therefor had
been true, such an energy and space efficient data server might truly have been the “game changer”
that Servergy claimed. But many of Defendants’ claims are now known to have been untrue and
Plaintiffs have lost their entire $2.78 million investment in Servergy.
3.

The Servergy defendants herein conducted at least three “roadshow” investor

meetings in the Fairhope area (the “Roadshow PowerPoint”). Plaintiffs either attended one or more
of such roadshow meetings and/or were provided access to the PowerPoint presentation given at
those meetings and/or representations made at such meetings were repeated to Plaintiffs.
4.

In the Private Placement Memorandum provided to prospective investors (“PPM”),

the Roadshow PowerPoint, emails, text messages, phone calls and/or in-person meetings, Servergy
and the other defendants named herein made multiple and repeated representations to investors in
general, and Plaintiffs in particular, regarding, among other things, the claimed capabilities and
relative merits of Servergy’s CTS-1000 server as compared to competing products, representations
about the volume of pre-sales of the CTS-1000 units and buyers awaiting production and delivery of
the units, supposed “partners” with Servergy, a promised distribution network, and a supposed buyer
of the Company with others in the waiting.
5.

But as revealed by the facts and materials supporting a lawsuit filed in December 2014

against Servergy by the Securities and Exchange Commission (“SEC”), Servergy’s many
representations about the specifications, testing, pre-sales, and prospects for sales of its one product
were false and misleading. The SEC’s Memorandum supporting its investigation, along with its
attachments, are attached hereto as Exhibits A and B and incorporated herein by reference.

3
Page 3 of 178

 6.

Servergy’s claims of having substantial pre-sales, including pre-sales to, among

others, Amazon, Netflix, NASA, the City of Beijing, China, and numerous companies around the
world were bogus. Servergy’s claim that large companies such as Facebook, Wal-Mart and CVS
were “waiting on” production and delivery of their CTS-1000 servers had no basis in fact. Servergy’s
claim that IBM and others were already waiting to buy out the Company, and that one such offer to
purchase the Company already was in hand which would result in a quick 10-45% return for
investors, was a lie. Even the chart that Servergy provided investors to tout the Company’s CTS1000 server as compared to the competition was false, as Defendants now have admitted in testimony
before the SEC.
7.

Plaintiffs pursue their claims under Texas and Alabama state securities laws and

common law to obtain a return of the $2.78 million that Defendants wrongfully took from them when
selling Servergy stock under false pretenses, plus punitive damages, pre-judgment interest, costs and
attorneys’ fees. No claims are asserted under federal law.
PARTIES & NON-DEFENDANT CO-CONSPIRATORS
Plaintiffs
8.

Plaintiff MARK R. BRESLIN (“Breslin”) is a resident of Fairhope, Alabama.

During the summer of 2013, Breslin was contacted regarding investing in Servergy through WFG.2
Breslin received information regarding the Servergy investment via email from WFG, including

Servergy conducted its 2013 stock offering with the assistance of its underwriter/managerdealer, WFG Investments, Inc. Most of the stock was sold through RockBridge Asset Management,
LLC in Daphne, Alabama, a WFG broker-dealer. WFG Investments, Inc., its parent Williams
Financial Group, and RockBridge Asset Management, LLC (including its principals) are referred to
collectively herein as “WFG”. WFG is the subject of a separate arbitration proceeding by the
Plaintiffs herein.
2

4
Page 4 of 178

 Servergy’s Private Placement Memorandum (“PPM”) and the Roadshow PowerPoint. In reliance
upon these representations by Servergy, Breslin invested $100,000 in Servergy.
9.

Plaintiffs BRIAN DEARING and SHARON M. DEARING (“Dearings”) are over

the age of nineteen and are residents of Fairhope, Alabama. Mr. Dearing brings these claims on behalf
of himself and as Trustee of Plaintiff BRIAN D DEARING TRUST. Plaintiff H. DEARING
COMPANY has its principal place of business in Louisiana. Mr. Dearing attended a “roadshow”
meeting regarding investing in Servergy on May 23, 2013, which was sponsored by Servergy and
WFG. During this meeting, representatives of Servergy stated that Servergy’s conservative
projections were for a ten times return on investment in 2 to 3 years. They further represented that
Servergy had the following customers waiting to purchase their product: Wal-Mart, CVS, and
Facebook. They represented that they had relationships with several billion dollar companies such
as IBM and Oracle. In reliance upon Servergy’s representations, including those repeated through
WFG, the Dearings invested $250,000 in Servergy. Mr. Dearing invested an additional $50,000 in
Servergy as Trustee of Brian D. Dearing Trust and an additional $50,000 was invested by the H.
Dearing Company. Accordingly, the Dearings, including their family business and family trust,
invested $350,000 in Servergy.
10.

Plaintiff TOD E. FRICK (“Frick”) is over the age of nineteen and a resident of

Orange Beach, Alabama. Frick was provided an Internet link to the PPM and Roadshow PowerPoint
for the offering, upon which Frick relied. In reliance upon Servergy’s representations, whether made
directly or through WFG, Frick purchased 25,000 shares of Servergy through WFG for a $50,000
total investment.
11.

Plaintiffs ALAN HENSELER and his wife, RACHELLE HENSELER, are over

the age of nineteen and are residents of Fairhope, Alabama. Alan and Rachelle Henseler also bring

5
Page 5 of 178

 claims on behalf of their minor son, COLE HENSELER. Their other sons, Plaintiffs ROSS
HENSELER, GARRETT HENSELER and TAYLOR HENSELER, are over the age of nineteen
and are residents of Fairhope, Alabama. Plaintiff DAVID HENSELER, Alan Henseler’s brother, is
over the age of nineteen and is a resident of Fairhope, Alabama.
12.

A WFG representative spoke with Alan Henseler, David Henseler, Garrett Henseler

and Taylor Henseler about the Servergy investment and provided them with access to the PPM and
Roadshow PowerPoint. Based on representations contained in PPM, Roadshow presentations, and/or
Roadshow PowerPoint, which these Plaintiffs either saw, heard or had repeated to them, Alan
Henseler invested $230,000 in Servergy through WFG.
13.

Plaintiff RHONDA HICE (“Hice”) is over the age of nineteen and is a resident of

Fairhope, Alabama. Hice had little to no previous investment experience and had never participated
in a private placement offering prior to Servergy. Hice learned of the Servergy investment when she
received a postcard in mail announcing a sales meeting sponsored by Servergy. Based on the
representations made by Servergy, Hice invested $25,000 in Servergy through WFG.
14.

Plaintiff PHILIP HODGSON (“Hodgson”) is over the age of nineteen and is a

resident of Fairhope, Alabama. Consistent with the PPM and Roadshow PowerPoint, the WFG
representative represented that Hodgson could expect a 15-20 times return on his investment, that
Servergy was looking at a 2-3 year period before the Company would be acquired, and that IBM was
looking at either buying Servergy’s server technology or acquiring the Company. Based on these
false representations Hodgson invested $100,000 in Servergy.
15.

Plaintiff CHRISTOPHER W. IVES (“Ives”) is over the age of nineteen and is a

resident of Point Clear, Alabama. A WFG representative contacted Ives regarding an investment in
Servergy, and consistent with the PPM and Roadshow PowerPoint, represented to Ives that he could

6
Page 6 of 178

 expect “at least a ten times” return on his investment. Based on the representations made by or on
behalf of Servergy, Christopher Ives invested $100,000 in Servergy.
16.

Plaintiff RICHARD JOHNSON (“Johnson”) is over the age of nineteen and is a

resident of Fairhope, Alabama. A WFG representative represented to Johnson that Servergy was
working with IBM and that IBM would be buying the company and showed Johnson a false
explanation of how Servergy’s product had been tested by respected computer companies and
performed as represented. In reliance upon these and other false represenations made by or on behalf
of Servergy, Johnson invested $50,000 in Servergy.
17.

Plaintiffs DAN AND CATHY MATTHEWS (hereinafter “the Matthews”) are over

the age of nineteen and are residents of Fairhope, Alabama. Mr. Matthews brings these claims on
behalf of himself and jointly with his wife Cathy Matthews as trustees of Plaintiff CAZ LIVING
TRUST. The Matthews attended an investment sales meeting in Mobile, Alabama sponsored by
Servergy. During the meeting, Servergy represented that it had business relationships with Facebook,
Freescale, and Avnet and was working to further its business dealings with Beijing, China. Servergy
further represented that it did not expect Servergy to be longer than a 24 month investment and that
investors could conservatively expect as high as 10-12 times return on their investment. In reliance
upon these and other representations described herein, the Matthews invested a total of $400,000 in
Servergy in two WFG accounts: $300,000, in the Dr. Dan Matthews’ retirement account and
$100,000 in the name of the Matthews as Trustees of the CAZ Living Trust.
18.

Plaintiffs RANCE REEHL and DWAYLAH REEHL (“Reehls”) are over the age

of nineteen and are residents of Fairhope, Alabama. Their children, , Plaintiffs CAROLINE REEHL
BOYKIN AND WILLIAM CAMERON REEHL, are adult residents of North Carolina and
Alabama, respectively. Rance Reehl attended a Servergy investment sales meeting in Fairhope,

7
Page 7 of 178

 Alabama sponsored by Servergy. During this meeting, Servergy representatives stated that the
expected profit projections for Servergy investments were for a ten times return on investment
monies. The Servergy representatives also stated that Servergy had large business customers waiting
for its product including Google, Amazon, and $100,000 in orders from a municipality in China.
Servergy further represented that it had relationships with several billion dollar companies such as
IBM and Oracle. In reliance upon Servergy’s representations about the Company, Rance and
Dwaylah Reehl invested $450,000 in Servergy. The Reehls’ $450,000 investment in Servergy was
made through two accounts: $200,000 in the Reehls’ joint account and $250,000 in Rance Reehl’s
IRA. During the summer of 2015, WFG transferred a total of 50,000 shares valued at $100,000,
evenly split into two accounts for their two children, Caroline Reehl Boykin and William Cameron
Reehl. Following these transfers, the. Reehls’ Servergy investment currently totals $350,000. He
and his wife continue to own 175,000 shares in the Company.
19.

Plaintiffs MARSHALL AND CLAUDIA SHOEMAKER (hereinafter, the

“Shoemakers”) are over the age of nineteen and are residents of Fairhope, Alabama. Mr. Shoemaker
attended a Servergy investment sales meeting sponsored by Servergy. During the meeting, Servergy
representatives stated that the expected profit projections for Servergy investments were for a ten
times return on investment monies. The Servergy representatives also stated that Servergy had large
business customers waiting to purchase its product including Google, Amazon, and $100,000 in
orders from a municipality in China. Servergy further represented that it had relationships with
several billion dollar companies such as IBM and Oracle. As provided in Servergy’s PPM,
representations were made to Mr. Shoemaker during the meeting that there were presales of the
Servergy product and that the Company had a working relationship with IBM. In reliance upon
Servergy’s representations of the Company, the Shoemakers invested $200,000 in Servergy.

8
Page 8 of 178

 20.

Plaintiff WILLIAM R. STAGGERS (“Staggers”) is over the age of nineteen and is

a resident of Fairhope, Alabama. Staggers had never participated in a private placement offering prior
to his investment in Servergy. After a WFG representative contacted Staggers about Servergy,
Staggers received, on information and belief, a copy of Servergy’s PPM and Roadshow PowerPoint.
In reliance on Servergy’s representations about the Company, both directly and through
WFG/Baggerly, Staggers invested $400,000 in Servergy.
21.

Plaintiffs GREGG AND LORI TERRAL (hereinafter, the “Terrals”) are over the

age of nineteen and are residents of Fairhope, Alabama. Mr. Terral met with a WFG representative
regarding an investment in Servergy. Consistent with Servergy’s sales materials, a WFG broker
represented that Servergy had made presales to Microsoft. In reliance upon representations made by
or on behalf of Servergy, the Terrals invested $250,000 in Servergy.
22.

Plaintiff STEPHEN D. WALKER (“Walker”) is over the age of nineteen and is a

resident of Point Clear, Alabama. Consistent with Servergy’s PPM and Roadshow PowerPoint, a
WFG representative represented that Walker could expect a 20 times return on his investment in
Servergy and that Servergy already had obtained substantial presales of the Servergy server product.
In reliance upon these and other representations made by or on behalf of Servergy, Walker invested
$75,000 in Servergy.
Defendants
23.

Defendant SERVERGY, a Nevada C Corporation, maintains its principal place of

business at 5900 S. Lake Forest Dr., Suite 120, McKinney, TX 75070, where it may be served with
service of process. Servergy is both the “issuer” and a “seller”, within the meaning of Texas and
Alabama state securities laws, of the stock sold to Plaintiffs.

9
Page 9 of 178

 24.

Defendant LANCE SMITH was, at all relevant times the Chief Operating Officer,

and later, the Chief Executive Officer and Chairman, of Servergy. Defendant Lance Smith
participated in the Company’s “roadshow”, directly making false representations and failing to
disclose material facts which he was under a duty to disclose or which were necessary in order to
make the statements he made non-misleading. He further fraudulently induced Plaintiffs to maintain
their stock positions in Servergy by concealing the SEC’s investigation and concerns from them, by
concealing from them the Company’s true financial state of affairs, and by affirmatively lying about
the same. Defendant Lance Smith had an opportunity to review and did review the Company’s PPM
and Roadshow PowerPoint (which he presented at roadshow meetings) prior to providing them to
Plaintiffs. Defendant Lance Smith also had the opportunity to and did review the misleading
comparison chart prepared by Defendant Will Mapp before it was included in the PPM and
Roadshow PowerPoint, and before it was provided to WFG financial advisors (to be provided to
prospective investors, including Plaintiffs) and to Plaintiffs herein. At all relevant times, Lance Smith
was aware of the falsity of his and Servergy’s statements, including the lack of a meaningful basis
for their projections and claims about pre-sales, projected revenues, prospective buyers, timeline for
production, and timeline for acquisition. Lance Smith may be served c/o Servergy, Inc., 5900 S. Lake
Forest Drive, Suite 120, McKinney, TX 75070.
Defendant WILLIAM MAPP, III (“Bill Mapp”), was at all relevant times the Chief
Executive Officer, Chairman of the Board and Founder of Servergy. Defendant Bill Mapp
represented in the PPM that he was a “BSCS/MBA Exec with 30+ Years of experience. Seasoned
Business, Strategy, Sales, Marketing, Technology and Operations Exec/Entrepeneur with proven
CEO, COO, CMO, and CTO skill sets in helping companies of all sizes, from Fortune 1000/Global
2000 to new start-ups, accelerate their business and brand velocity fast-forward … As Principal with

10
Page 10 of 178

 the IBM Global Services Consulting Group, put together the largest e-Business deal in IBM history
at the time, valued at $3.8 billion. Bill Mapp was also a GM/Global Exec for a Fortune 400
Company’s new division, which he took from not one penny to well on its way to a billion dollar a
year enterprise in a little over 366 months.” PPM, at 48. Defendant Bill Mapp fraudulently induced
Plaintiffs to maintain their stock positions in Servergy by concealing the SEC’s investigation and
concerns from them, by concealing the true reasons for his resignation, first as CEO and later as
Chairman, by concealing from them the Company’s true financial state of affairs, and by
affirmatively lying about the same. Defendant Bill Mapp had an opportunity to review and did review
and approve for distribution the Company’s PPM and Roadshow PowerPoint (which he presented at
roadshow meetings) prior to providing them to Plaintiffs. At all relevant times, Defendant Bill Mapp
was aware of the falsity of his and Servergy’s statements, including the lack of a meaningful basis
for their projections and claims about pre-sales, projected revenues, prospective buyers, timeline for
production, and timeline for acquisition. Bill Mapp resides and may be served at 5331 E.
Mockingbird Lane, Apt. 241, Dallas, TX 75206-5169.
25.

Defendant WILLIAM MAPP, IV (“Will Mapp”) was at all relevant times the Vice

President-Strategic Projects of Servergy. Defendant Will Mapp assisted in the preparation of the
misleading PPM by preparing for distribution to the Plaintiffs herein a chart titled, “Comparing
Servergy to the Blade Server Competition.” This same chart was included in the Roadshow
PowerPoint provided and/or displayed to Plaintiffs. According to the SEC, Defendant Will Mapp
admitted in a deposition that the information contained in that chart was “inaccurate.” Defendant
Will Mapp further testified that before the chart was included in the PPM and Roadshow PowerPoint,
he provided a draft of that “inaccurate” chart for review by Defendants Lance Smith, Vihar Rai

11
Page 11 of 178

 and/or Jack Smith. Will Mapp resides and may be served at 4028 Kestrel Court, Castle Rock, CO
80109-4503.
26.

Defendant VIHAR RAI was at all relevant times the Vice President-Engineering of

Servergy. Defendant Rai participated in the “roadshow” meetings with Plaintiffs at which the false
and misleading representations and nondisclosures were made to Plaintiffs without correction.
Additionally, Defendants Vihar Rai and/or Jack Smith were provided a draft of the misleading chart
comparing Servergy’s CTS-1000 to other blade servers, and Vihar Rai allowed that misleading chart
to be provided to investors, including Plaintiffs herein. Rai resides and may be served at 212 Pheasant
Ridge Drive, Cedar Park, TX 78613-4069.
27.

Defendant TOWNSEND J. “JACK” SMITH was at all relevant times the Vice

President-Technology of Servergy. Defendant Jack Smith participated in the “roadshow” meetings
with Plaintiffs at which the false and misleading representations and nondisclosures were made to
Plaintiffs without correction. Additionally, Defendants Vihar Rai and/or Jack Smith were provided a
draft of the misleading chart comparing Servergy’s CTS-1000 to other blade servers, and Jack Smith
allowed that misleading chart to be provided to investors, including Plaintiffs herein. Townsend J.
“Jack” Smith resides and may be served at 3228 Nutmeg Drive, McKinney, TX 75070-7777.
28.

By reason of the positions held at Servergy by Defendants Bill Mapp, Lance Smith,

Will Mapp, Vihar Rai, and Jack Smith (collectively referred to herein as the “Individual
Defendants”), the Individual Defendants at all times acted with the requisite degree of scienter (and
for control person liability, Defendants’ scienter is derivative of that of the controlled persons). The
Individual Defendants purposely or recklessly misrepresented Servergy’s business product,
prospects, and sales as well as anticipated returns on investments. They had access to the adverse
undisclosed and/or misrepresented information about Servergy’s business, operations, product,

12
Page 12 of 178

 operational trends, financial statements, markets, and present and future business prospects via access
to internal corporate documents (including the Company’s operating plans, budgets and forecasts and
reports of actual operations compared thereto), conversations and connections with other corporate
officers and employees, attendance at management and Board of Directors meetings and committees
thereof and via reports and other information provided to them in connection therewith.
29.

By reason of their status, role and actual conduct as management, officers and/or

directors of Servergy, the Individual Defendants were at all relevant times control persons (within
the meaning of Ala. Code § 8-6-19(c) and Section 33 of the Texas Securities Act) of Servergy.
30.

As officers, directors and/or controlling persons of Servergy, and because they all

participated either in the preparation of the PPM that was prepared and disseminated for the purpose
of soliciting investors’ purchases of Servergy stock, and/or by participating in the roadshow meetings
with Plaintiffs at which the Plaintiffs’ purchases were expressly solicited, each of the Individual
Defendants had a duty to promptly disseminate accurate and truthful information with respect to the
Company’s financial condition and performance, growth, operations, pre-sales, financial statements,
business, products, markets, management, earnings and present and future business prospects, and to
correct any previously-issued statements that had become materially misleading or untrue so that
Plaintiffs could make an investment decision based on truthful and accurate information. The
Individual Defendants violated these requirements and obligations.
31.

The Individual Defendants participated in the drafting, preparation, and/or approval

of the various communications complained of herein and were aware of, or recklessly disregarded,
the misstatements contained therein and omissions therefrom, and were aware of their materially
false and misleading nature. Because of their Board membership and/or executive and managerial
positions with Servergy, the Individual Defendants had access to the adverse undisclosed information

13
Page 13 of 178

 about Servergy’s business prospects and financial condition and performance as particularized herein
and knew (or recklessly disregarded) that these adverse facts rendered the positive representations
made by or about Servergy and its business issued or adopted by the Company materially false and
misleading.
32.

The Individual Defendants, because of their positions of control and authority as

officers and/or directors of the Company, were able to and did control the content of the PPM,
Investor Update mailings and/or emails, the Roadshow PowerPoint, and other statements pertaining
to the Company. The Individual Defendants were provided with copies of the documents alleged
herein to be misleading prior to or shortly after their issuance and/or had the ability and/or opportunity
to prevent their issuance or cause them to be corrected. Accordingly, the Individual Defendants are
responsible for the accuracy of the public reports and releases detailed herein and are therefore
primarily liable for the representations contained therein.
33.

Each of the defendants is liable as a participant in a fraudulent scheme and course of

business that operated as a fraud or deceit on purchasers of Servergy stock by disseminating
materially false and misleading statements and/or concealing material adverse facts. Their bios are
featured prominently in the PPM and they made and/or adopted the representations contained in the
PPM as their own. The scheme deceived the Plaintiffs regarding Servergy’s business, operations,
management and the intrinsic value of Servergy stock and caused Plaintiffs to purchase Servergy
common stock despite its lack of value and the fact that the Company and its CTS-1000 product was
a sham.
AGENCY AND CULPABILITY FOR ACTS OR OMISSIONS OF OTHERS
34.

Plaintiffs allege that in doing the acts and omissions herein alleged, Defendants and

their co-conspirators with respect to the acts or steps taken by each of them in connection with the

14
Page 14 of 178

 closing and the issuance, offer, sale and distribution of the Servergy stock herein described, and the
expenditure of stock offering proceeds, acted as the agent of the other Defendants and coconspirators, pursuant to a common goal or scheme to bring about the stock offering, and each of
them is in some manner responsible as principals or under the doctrine of respondeat superior for
the matters complained of, in that the PPM and transactions comprising the stock financing, and the
communications and transactions related thereto, were parts of a connected or interrelated fraudulent
or deceptive set of schemes and conspiracies, requiring steps and activities by each of the Defendants
in order to make the interrelated schemes and conspiracies work or be successful.
35.

At the times relevant to this Complaint, each Defendant, in connection with the

Servergy stock offering and the alleged violations and tortious conduct set forth herein,
a. acted in concert with the other Defendants;
b. knew that the conduct of the other Defendants described herein (including omissions
to act in the face of the situation then obtaining) constituted a breach of duty to the
Plaintiffs;
c. induced the wrongful or tortious conduct, and such Defendant knew or should have
known of the circumstances that would make the conduct tortious if it were such
Defendant's own conduct;
d. conducted its activities with the aid of other Defendants and was negligent in
employing or engaging or supervising the other Defendants; and/or
e. controlled, or had a duty to use care to control, the conduct of the other Defendants,
who were likely to do harm if not supervised and/or controlled, and failed to exercise
care in the control.

15
Page 15 of 178

 JURISDICTION; VENUE
36.

The court has jurisdiction over the lawsuit because the amount in controversy exceeds

this court’s minimum jurisdictional requirements.
37.

Venue for this action lies in Dallas County, Texas pursuant to § 15.002, Texas Civil

Practice and Remedies Code, in that this is the County in which all or a substantial part of the events
giving rise to this action occurred.

FACTUAL ALLEGATIONS
38.

From February 2013 to November 2013, Defendant Servergy conducted a private

placement securities offering, raising $20 million, mostly from individual investors in or around
Mobile, Alabama. $2.78 million of that amount was obtained from the Plaintiffs herein.
39.

Servergy was a “pre-revenue” start-up, holding itself out as having invented an

amazing new technology for data center computer servers that allowed their servers to operate with
up to 80% less power consumption, and in one-quarter (1/4) the space required by current
technologies. If these and other of the Defendants’ representations had been true, such an energy and
space efficient data server might truly have been the “game changer” that Servergy claimed. But as
revealed by Servergy’s actual performance and by the facts and materials supporting a lawsuit filed
in December 2014 against Servergy by the SEC, Servergy’s representations were false and
misleading.
40.

Servergy’s claims of having substantial pre-sales, including pre-sales to Amazon,

Netflix, NASA, Beijeng China, and numerous companies around the world were wholly and
completely false. Servergy’s claim that large companies such as Facebook, Wal-Mart and CVS were
“waiting on” their CTS-1000s had no basis in fact. Servergy’s claim that IBM and others were already

16
Page 16 of 178

 waiting to buy out the Company, resulting in a quick 10-45% return for investors was baseless. Even
the chart that Servergy provided investors to tout the Company’s CTS-1000 server as compared to
the competition was false, as Servergy executive Defendant Will Mapp later admitted under oath in
a deposition taken by the SEC. Indeed, even before Servergy’s $20 million offering was closed, and
while it was selling stock based on these false representations to the Plaintiffs herein, the SEC
(unbeknownst to the Plaintiffs) already had opened its investigations into Servergy’s false
representations.
41.

As a start-up, “pre-revenue” company, one of the most critical and material pieces of

information that investors need about the Company is the demand for the product—here, Servergy’s
miracle server – the CTS-1000. Servergy represented to the Plaintiffs and other investors that, as of
February 2013, the Company already had pre-sold 1,500 of its servers without even marketing them.
Servergy claimed that buyers were coming to them without the need to market their product.
Additionally, Servergy represented to the Plaintiffs and other investors that “billion dollar”
technology companies, including Facebook, Wal-Mart, CVS and others were “waiting” for
Servergy’s servers. In roadshow investor meetings, and in the Roadshow PowerPoint presentations
provided in those meetings and also made available to investors online, Servergy further represented
that the pre-sale pipeline was continuing to grow.
42.

When converted to sales, these purported pre-sales would have generated millions in

revenue for Servergy, putting the Company well on its way to achieving its “conservative” projection
of $68 million in EBITDA earnings in the first year of production of the CTS-1000, before marketing
had even begun. The claimed pre-sales accordingly lent credibility to the Company’s financial
projections. But the claimed pre-sales were non-existent, the financial projections failed miserably,
and Plaintiffs’ stock is worthless.

17
Page 17 of 178

 43.

Servergy further misrepresented that its CTS-1000 servers had been “validated by

world class test labs,” that its “growing pre-sales pipeline” included Netflix, Amazon, redhat, Oracle,
Wal-Mart, CVS, Walt Disney, Schlumberger, Avnet, Canonical, Shell, NASA, IBM and Fujitsu,
among others. At his deposition b efore the SEC, Defendant Bill Mapp testified that the CTS-1000
had undergone “extensive” third-party testing, and Defendant Lance Smith listed at least five thirdparties that had tested the CTS-1000. But the Company was unable to produce any documents
supporting any such testing, other than a single email.
44.

Servergy further represented that (without even considering foreign sales) the

Company’s “good faith” projection was for EBITDA (earnings before interest, taxes, depreciation
and amortization) of $68 million in the first year of production, with substantial increases in revenue
thereafter. As noted, the claimed pre-sales seemed to support this projection; but in fact, the pre-sales
did not exist. Defendants had no good faith basis or factual support for their projections.
45.

Servergy represented that it had distribution and other relationships with IBM and

Oracle; that it would use Avnet for distribution; and that its servers were “backed by a rapidly
growing network of top global partners,” including APC, Avnet, Cisco, Freescale and Oracle. Again,
Servergy’s representations were wholly false with no basis in fact. The partnerships and distribution
channels never materialized because they never existed.
46.

Servergy falsely claimed that its new “disruptive” server technology had left its

competition, including IBM and Dell, “years behind.”
47.

Servergy falsely claimed that its new server technology was in such high demand that

Servergy “already had offers to buy” the Company, including an offer from “a top aerospace &
defense company.” Other suitors included Alcatel-Lucent, AT&T, Cisco and Dell, among others.
Servergy projected that the Company would be bought out within 2-3 years, thereby providing

18
Page 18 of 178

 investors in the $20 million offering an anticipated return of at least 10-15% and possibly a multiple
of that amount.
48.

Not one of these representations was true.

49.

Servergy’s auditors did not complete their audit of the Company’s 2013 financials

until the fall of 2014. The audited report was sent to shareholders on October 17, 2014. Defendant
Lance Smith’s cover letter accompanying the 2013 audited financials stated that as of September
2014, it had become evident that “Servergy, Inc. needed a new path to revenue generation.” One of
the critical parts of the Company’s “New Philosophy” was to generate business relationships with
established leaders in the industry, something Defendants repeatedly and falsely represented to
Plaintiffs already had been accomplished when soliciting their stock purchases.
50.

By May of 2015, Servergy had completely abandoned its CTS-1000 and “executed a

pivot” in business strategy from manufacturing cutting-edge data center computer servers to become
a security “software company”, still “pre-revenue” but in a different area of the tech industry. By
this time, Servergy had spent the $20 million raised from Plaintiffs and other investors (10% of which
was paid as commissions to WFG), along with $6 million it raised from earlier investors, with nothing
to show for it other than a completely new “strategy.”
51.

Servergy’s audited financial statements were sent to shareholders on July 27, 2015.

The audited financials revealed that for 2014—the first full production year for Servergy and its CTS1000 servers—sales revenue totaled $36,004, far from the $68 million projected. Servergy had a net
loss for the year of almost $9.7 million.
52.

Moreover, even though the SEC had opened an investigation into Servergy’s

representations to investors beginning in August 2013—while Servergy was continuing to solicit
Plaintiffs’ stock purchases, the Company never clearly disclosed the pendency of the SEC’s

19
Page 19 of 178

 investigation. Not until December 4, 2014 did the SEC’s investigation into Servergy come to light,
and only then did it become public when the SEC had to file a lawsuit against Servergy to force
Servergy to comply with the SEC’s outstanding subpoenas.
53.

As provided in the SEC’s December 4, 2014 court filing, the SEC deposed Defendants

Bill Mapp, Will Mapp, and Lance Smith. Defendant Will Mapp admitted under oath in his deposition
that he had prepared a table comparing the capabilities of Servergy’s CTS-1000 server to those of its
supposed competitors, including IBM and Dell. Although Defendant Will Mapp testified that he had
provided his table to Defendants Lance Smith and Jack Smith and/or Vihar Rai to review for
accuracy, Will Mapp’s chart misrepresented Servergy’s performance specifications in comparison to
the models listed. Nevertheless, Servergy included that chart in its PPM and Roadshow PowerPoint
and shared Defendant Will Mapp’s chart with the Plaintiffs and represented the chart to contain true
and accurate information when soliciting their investments in Servergy.
54.

The SEC’s complaint further reveals that although Defendants Bill Mapp and Lance

Smith testified that Servergy’s CTS-1000 had been extensively tested by third parties (consistent
with their representations to the Plaintiffs), the Company failed to produce to the SEC any
documentary support for such claims other than a single email (still undisclosed to Plaintiffs).
55.

The SEC’s complaint further reveals that although Defendant Bill Mapp had sent a

company-wide email bragging on a pre-sale to Amazon (consistent with the Roadshow PowerPoint’s
listing of Amazon on its world pre-sale map), no such pre-sale had ever been made. All that had
happened was an individual employee of Amazon had ordered a single CTS-1000 for his personal
use. Nonetheless, Servergy’s Roadshow PowerPoint map of presales falsely included Amazon as one
of its pre-sales.

20
Page 20 of 178

 56.

The SEC’s investigation remains pending. On information and believe, state securities

regulators also have opened criminal investigations regarding Servergy. Indeed, a grand jury has
indicted the Texas Attorney General for securities violations in connection with his referral of
potential investors to Servergy.
57.

All claims have been brought within their applicable statutes of limitation.

COUNT 1
Violations of the Securities Act of Alabama,
Ala. Code § 8-6-19(a)(2)

58.

Plaintiffs incorporate all preceding paragraphs by reference.

59.

Defendants offered or sold securities by means of untrue statements of material facts

or omissions to state material facts necessary in order to make the statements made, in the light of
the circumstances under which they were made, not misleading in violation of ALA. CODE § 8-619(a)(2).
60.

This count does not incorporate by reference any allegations of common law “fraud,”

as this count is based and grounded in strict liability; and it is legally unnecessary, in order to prevail,
for Plaintiffs to allege or prove common law-style “fraud,” “causation,” or “scienter,” among other
fraud-claim type elements.
61.

Plaintiffs tender their Servergy securities to Defendants.

62.

Pursuant to ALA. CODE § 8-6-19(a)(2), Defendants are liable to Plaintiffs for, and the

Plaintiffs hereby demand, the full amount of their combined investment, plus prejudgment interest at
6% per annum, court costs and attorney’s fees.

21
Page 21 of 178

 COUNT 2
Violations of Securities Act of Alabama,
Ala. Code §§ 8-6-19(a)(1) and 8-6-17

63.

Plaintiffs incorporate all preceding paragraphs by reference.

64.

Defendants, in connection with the offer, sale or purchase of the above-described

securities, did, directly or indirectly (i) employ devices, schemes or artifices to defraud; (ii) make
untrue statements of material facts and omit to state material facts necessary in order to make the
statements made, in the light of the circumstances under which they were made, not misleading; or
(iii) engage in acts, practices or courses of business which operated as a fraud or deceit on the
plaintiffs as more specifically described elsewhere herein, all in violation of ALA. CODE § 8-6-17.
65.

By violating § 8-6-17, the Defendants violated ALA. CODE § 8-6-19(a)(1).

66.

Plaintiffs tender their Servergy securities to Defendants.

67.

Pursuant to ALA. CODE §§ 8-6-19(a)(1) and 8-6-17, Defendants are liable to Plaintiffs

for, and Plaintiffs hereby demand, the full amount of their combined investment, plus prejudgment
interest at 6% per annum, court costs and attorney’s fees.

COUNT 3
Control Person Liability Under
ALA. CODE § 8-6-19(c)
(All Defendants)
68.

Plaintiffs incorporate all preceding paragraphs by reference.

69.

Pursuant to ALA. CODE § 8-6-19(c), “[e]very person who directly or indirectly controls

a person liable under [Count 1 or 2, above], including every partner, officer, or director of such a
person, every person occupying a similar status or performing similar functions, every employee of
such a person who materially aids in the conduct giving rise to the liability, and every dealer or agent

22
Page 22 of 178

 who materially aids in such conduct is also liable jointly and severally with and to the same extent as
the person liable under [Count 1 or 2, above]….”
70.

By reason of their roles as partner, officer and/or director, or of having some similar

status, or by reason of their ownership interests, directly or indirectly, in Servergy, Individual
Defendants Bill Mapp, Will Mapp, Lance Smith, Vihar Rai and Jack Smith had the power to and did
control (within the meaning of ALA. CODE §§ 8-6-19(c) and 8-6-2(24) and Section 33 of the Texas
Securities Act) Servergy. By reason of such status and direct or indirect control of Servergy,
Individual Defendants Bill Mapp, Will Mapp, Vihar Rai, Lance Smith and Jack Smith are jointly and
severally liable for all violations of ALA. CODE § 8-6-19(a).
71.

Plaintiffs tender their Servergy securities to Defendants.

72.

Pursuant to ALA. CODE §§ 8-6-19(a)(1) and (2) and 8-6-19(c), Defendants are liable

to Plaintiffs for, and Plaintiffs hereby demand, the full amount of their combined investment, plus
prejudgment interest at 6% per annum, court costs and attorney’s fees.

Count 4
Fraud/Willful Misrepresentation
73.

Plaintiffs incorporate all preceding paragraphs by reference.

74.

Defendants made misrepresentations of fact in connection with the sale of the above-

described securities, both for the purpose of inducing Plaintiffs’ purchases of Servergy stock and for
inducing Plaintiffs to continue to hold such stock after it was purchased. At the time said
misrepresentations were made, said Defendants knew, or reasonably should have known, that
Plaintiff would rely on their misrepresentations.

23
Page 23 of 178

 75.

Said misrepresentations were made willfully or recklessly and with an intent to

deceive the Plaintiffs and with the requisite malice and scienter to support an award of punitive
damages.
76.

Plaintiffs, who were unaware of the true facts, reasonably relied on said

misrepresentations in reaching their investment decisions.
77.

As a direct and proximate consequence of Plaintiffs’ reliance on said

misrepresentations, Plaintiffs were injured through the loss of their entire investments in Servergy
stock.

COUNT 5
Omission & Suppression
78.

Plaintiffs incorporate all preceding paragraphs by reference.

79.

In connection with the sale of the above-described securities, Defendants suppressed

material facts which they were under an obligation to disclose. both for the purpose of inducing
Plaintiffs’ purchases of Servergy stock and for inducing Plaintiffs to continue to hold such stock after
it was purchased. At the time said omissions of facts were made, said Defendants knew, or reasonably
should have known, that the omitted information was material to Plaintiffs’ investment decisions.
80.

Said omissions and suppressions of material fact were made willfully or recklessly

and with an intent to deceive the Plaintiffs and with the requisite malice and scienter to support an
award of punitive damages.
81.

The Plaintiffs, who were unaware of the true facts, reasonably relied on said material

omissions in making their decisions to purchase Servergy stock and to continue to hold such stock
after purchase.

24
Page 24 of 178

 82.

As a direct and proximate consequence of Plaintiffs’ reliance on said material

omissions, Plaintiffs have been damaged through the loss of their entire investments in Servergy
securities.
COUNT 6
Negligent Misrepresentation and Omission
83.

Plaintiffs incorporate all preceding paragraphs by reference.

84.

Defendants owed Plaintiffs a duty: to use reasonable care to ensure that

representations made about the Servergy stock and its value, the finances of Servergy, and the
capabilities, the financial wherewithal and acumen of Servergy’s principals, were true; to refrain
from omitting material facts necessary to avoid misleading Plaintiffs; and to fairly and adequately
communicate all materials facts to Plaintiffs.
85.

Said Defendants directly and through their agents each failed to exercise reasonable

care in making accurate and timely representations about Servergy, its stock, its financial condition,
and reasonable financial prospects, , both for the purpose of inducing Plaintiffs’ purchases of
Servergy stock and for inducing Plaintiffs to continue to hold such stock after purchase.
86.

At the time said misrepresentations and omissions of fact were made, said Defendants

knew, or should have known, that Plaintiffs would rely on their misrepresentations.
87.

Plaintiffs, who were unaware of the true facts, reasonably, foreseeably and justifiably

relied on said misrepresentations and omissions in reaching their investment decisions.
88.

As a direct and proximate consequence of Plaintiffs’ reliance on said

misrepresentations, Plaintiffs were injured through the loss of their entire investments in Servergy
securities.

25
Page 25 of 178

 COUNT 7
Innocent Misrepresentation
89.

Plaintiffs incorporate all preceding paragraphs by reference.

90.

The misrepresentations of material fact described herein, whether made willfully to

deceive, recklessly without knowledge, or if made by mistake, constitute legal fraud under ALA.
CODE § 6-5-101 by Defendants, so long as they were acted on by Plaintiffs.
91.

Such misrepresentations were made to Plaintiffs both for the purpose of inducing

Plaintiffs’ initial purchases of Servergy stock, and to induce Plaintiffs to continue to hold such stock
after it was purchased.
92.

The Plaintiffs, who were unaware of the true facts, reasonably, foreseeably and

justifiably relied on said misrepresentations in reaching their investment decisions.
93.

As a direct and proximate consequence of Plaintiffs’ reliance on said

misrepresentations, Plaintiffs were injured through the loss of their entire investments in Servergy
securities.
COUNT 8
Inducement To Maintain Position
94.

The preceding paragraphs of this Complaint, and any additional factual averments set

forth in any subsequent paragraphs or sections of this Complaint, are deemed to be repeated and
incorporated by reference in this Count.
95.

In addition to fraudulently inducing Plaintiffs to initially purchase Servergy stock,

Defendants thereafter fraudulently induced them to continue holding such Servergy stock in violation
of a number of applicable tort law principles in addition to Alabama common law and ALA. CODE §§
6-5-100 through 6-5-104, et seq., including the following:

26
Page 26 of 178

 a.

Restatement of Torts (Second), § 525: “One who fraudulently makes a

misrepresentation of fact, opinion, intention or law for the purpose of inducing another to act or to
refrain from action in reliance upon it, is subject to liability to the other in deceit for pecuniary loss
caused to him by his justifiable reliance upon the misrepresentation.” (Emphasis added.)
b.

Restatement of Torts (Second), § 531: “One who makes a fraudulent

misrepresentation is subject to liability to the persons or class of persons whom he intends or has
reason to expect to act or to refrain from action in reliance upon the misrepresentation, for pecuniary
loss suffered by them through their justifiable reliance in the type of transaction in which he intends
or has reason to expect their conduct to be influenced.” (Emphasis added.)
c.

Restatement of Torts (Second), § 551(1): “One who fails to disclose to another a fact

that he knows may justifiably induce the other to act or refrain from acting in a business transaction
is subject to the same liability to the other as though he had represented the nonexistence of the matter
that he has failed to disclose....” (Emphasis added.)
96.

Each of such Defendants either: (1) had material personal roles in devising and

implementing the frauds described herein; (2) approved or caused to be issued misleading documents,
reports and communications to Plaintiffs that have been described herein; (3) personally benefited
(directly and/or indirectly) from the frauds described herein; (4) occupied a fiduciary position
(including fiduciary disclosure obligations of an ongoing nature) and management or control
positions as regards passive investors in Servergy’s stock like Plaintiffs; (5) occupied a vastly
superior position of knowledge and access to relevant and material information than Plaintiffs; (6)
was or legally is responsible for the dissemination of false and misleading reports and information to
Plaintiffs in Alabama; (7) was under an obligation and affirmative duty under the special
circumstances of this case, and under statutory requirements of the Alabama Securities Act and other

27
Page 27 of 178

 laws which governed their conduct, respectively, to communicate (and/or cause Servergy to
communicate) all material facts to Plaintiffs and not to misrepresent facts and not to tell “half-truths”;
and (8) knew and expected that their false and misleading information, and the omissions of material
facts, would be conveyed to the Plaintiffs and Servergy’s stockholders in Alabama. Each such
defendant participated by agreement and otherwise in the schemes and conspiracies of the other
Defendants as to financing and operation of Servergy, and stood to benefit therefrom.
97.

Said Defendants spoke (or controlled and caused or allowed other Defendants to

speak) half-truths and to suppress, conceal, and omit to disclose material facts which, under the
special circumstances of this case and under statutorily-imposed disclosure obligations, the
Defendants were under a duty to communicate truthfully and fully to Plaintiffs, which constitutes
fraud.
98.

Each of said Defendants has knowingly, willfully and/or recklessly deceived the

Plaintiffs through such secretive, misleading and omissive activity, and through conducting it or
participating in it or allowing it to occur.
99.

Said Defendants knew, or recklessly disregarded, or were reckless in not

knowing, of the misrepresentations of material fact and the omissions of material facts necessary to
make the statements made, in light of the circumstances under which they were made, not misleading,
that occurred in their communications with Plaintiffs, and said Defendants acted knowing of, or
recklessly disregarding the severe risk of, loss to the Plaintiffs that would be proximately caused by
said Defendants’ acts and omissions described herein.
100.

Said Defendants, who were in possession of the material undisclosed facts and

willfully or knowingly or recklessly concealed them, acting in concert and conspiracy, engaged in
the aforesaid omissive, and therefore deceptive and manipulative and fraudulent, acts, practices and

28
Page 28 of 178

 courses of business with the intent to take advantage of the position of inferior knowledge and
ignorance of the true facts on the part of the Plaintiffs, and in order to take advantage of fiduciary
positions held by various Defendants with respect to Plaintiffs, and with the intent to defraud the
Plaintiffs, and with a profit-seeking motive on the Defendants’ part.
101.

Plaintiffs did not know, when Plaintiffs invested in the Servergy’s stock, or at any

time until less than two years before this suit was filed, about the material misrepresentations and
undisclosed facts which are the basis of and are described in this Complaint, because no such
disclosure was anywhere ever made, and thus the Plaintiffs justifiably and reasonably relied on such
representations and on Plaintiffs absence of knowledge of such undisclosed facts.
102.

By reason of the facts, relationships, duties to speak and disclose, and other special

circumstances alleged herein, Defendants, acting in concert and conspiracy with each other,
negligently, innocently, recklessly, wantonly, or intentionally failed in said duties of candor and
disclosure, and induced Plaintiffs to buy, keep and/or maintain its positions in Servergy’s stock which
proximately caused Plaintiffs’ losses sued upon here.
COUNT 9
Violations of Section 33(A)(2)
of the Texas Securities Act
103.

Plaintiff incorporates all preceding paragraphs by reference.

104.

Defendants offered or sold securities (whether or not such securities or transactions

were exempt from registration under Sections 5 and/or 6 of the Texas Securities Act) by means of
untrue statements of material facts or omissions to state material facts necessary in order to make the
statements made, in the light of the circumstances under which they were made, not misleading in
violation of Section 33(A)(2) of the Texas Securities Act.

29
Page 29 of 178

 105.

This count does not incorporate by reference any allegations of common law “fraud,”

as this count is based and grounded in strict liability.
106.

Plaintiffs tender their Servergy securities to Defendants.

107.

Pursuant to Section 33(D) of the Texas Securities Act, Defendants are liable to

Plaintiffs for the full amount of their combined investment, plus prejudgment interest at the legal
rate.
COUNT 10
Control Person Liability Under
Section 33(F)(1) of the Texas Securities Act
108.

Plaintiffs incorporate all preceding paragraphs by reference.

109.

Pursuant to Section 33(F)(1) of the Texas Securities Act, “A person who directly or

indirectly controls a seller, buyer, or issuer of a security is liable under Section 33A … jointly and
severally with the seller …or issuer, and to the same extent as if he were the seller … or issuer, unless
the controlling person sustains the burden of proof that he did not know, and in the exercise of
reasonable care could not have known, of the existence of the facts by reason of which the liability
is alleged to exist.”
110.

By reason of their roles as partner, officer and/or director, or of having some similar

status, or by reason of their ownership interests, directly or indirectly, in Servergy, individual
defendants Bill Mapp, Will Mapp, Lance Smith, Vihar Rai and Jack Smith had the power to and did
control Servergy. By reason of such status and direct or indirect control of Servergy, individual
defendants Bill Mapp, Will Mapp, Vihar Rai, Lance Smith and Jack Smith are jointly and severally
liable for all violations of Section 33(A)(2) of the Texas Securities Act.
111.

Plaintiffs tender their Servergy securities to Defendants.

30
Page 30 of 178

 112.

Pursuant Section 33(F)(1) of the Texas Securities Act, Defendants are liable to

Plaintiffs for the full amount of their combined investment, plus prejudgment interest at the legal
rate.
COUNT 11
Aiding and Abetting Liability Under
Section 33(F)(2) of the Texas Securities Act
113.

Plaintiffs incorporate all preceding paragraphs by reference.

114.

Pursuant to Section 33(F)(2) of the Texas Securities Act, “A person who directly or

indirectly with intent to deceive or defraud or with reckless disregard for the truth or the law
materially aids a seller … or issuer of a security is liable under Section 33A … jointly and severally
with the seller, buyer, or issuer, and to the same extent as if he were the seller, buyer, or issuer.”
115.

As described herein, individual defendants Bill Mapp, Will Mapp, Lance Smith, Vihar

Rai and Jack Smith did, with intent to deceive or with reckless disregard for the truth or the law
materially aid each other as sellers, Servergy as the issuer and seller, and their co-conspirators the
WFG defendants, in their sales of Servergy stock to the Plaintiffs herein.
116.

Plaintiffs tender their Servergy securities to Defendants.

117.

Pursuant Section 33(F)(2) of the Texas Securities Act, Defendants are liable to

Plaintiffs for the full amount of their combined investment, plus prejudgment interest at the legal
rate.
PRAYERS FOR RELIEF
WHEREFORE, Plaintiffs pray for relief and judgment, as follows:

31
Page 31 of 178

 A.

Awarding damages in favor of Plaintiffs against all Defendants, jointly and
severally, for all damages sustained as a result of Defendants’ wrongdoing, in
the amount of $2,780,000;

B.

Awarding Plaintiffs their reasonable costs and expenses incurred in this action,
including counsel fees and expert fees;

C.

Awarding Plaintiffs prejudgment interest on the Alabama Securities Act and
Texas Securities Act claims;

D.

Awarding rescission or a rescissory measure of damages (to the extent
necessary to achieve rescission or rescissory damages, Plaintiffs hereby tender
to Defendants their Servergy shares);

E.

Awarding Plaintiffs sufficient Constitutionally-limited punitive or exemplary
damages to punish Defendants for their intentional or wanton misconduct; and

F.

Such equitable/injunctive or other relief as deemed appropriate by the Court.

JURY DEMAND
Plaintiffs demand a trial by jury.
Respectfully submitted,

/s/ Braden W. Sparks
Braden W. Sparks
BRADEN W. SPARKS, P.C.
S.B.N 18874500
8333 Douglas Avenue
Suite 1000
Dallas, TX 75225
(214)750-3372
(214) 696-5971 Facsimile
brady@sparkslaw.com

32
Page 32 of 178

 /s/ David J. Guin
David J. Guin
Tammy McClendon Stokes
Dawn Stith Evans
GUIN, STOKES & EVANS, LLC
The Title Building
300 Richard Arrington Jr. Blvd North
Suite 600
Birmingham, AL 35203
(205) 226-2282 (telephone)
(205) 226-2357 (fax)
davidg@gseattorneys.com
tstokes@gseattorneys.com
devans@gseattorneys.com
Attorneys for Plaintiffs

33
Page 33 of 178

 Exhibit A

Page 34 of 178 EXHIBIT A, pg. 1 of 70

Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 1 of 69 PageID 4

\
\.....
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
FORT WORTH DIVISION
)

SECURITIES AND EXCHANGE COMMISSION, )
)

Applicant,

)

Misc. Action No.:

)

vs.

)
)

SERVERGY, INC.

)
)

Respondent.

)

MEMORANDUM OF LAW IN SUPPORT OF APPLICATION
OF THE SECURITIES AND EXCHANGE COMMISSION FOR AN ORDER
COMPELLING COMPLIANCE WITH ADMINISTRATIVE SUBPOENAS

MATTHEW GULDE
Illinois Bar No. 6272325
United States Securities and
Exchange Commission
Bumett Plaza, Suite 1900
801 Cherry Street, Unit 18
Fort Worth, TX 76102
Telephone: (817) 978-1410
Facsimile: (817) 978-4927
guldem@sec.gov
Of Counsel:
R. JOANN HARRIS
Texas Bar No. 24013332
SAMANTHA S. MARTIN
Texas Bar No. 24065090
United States Securities and Exchange Commission
Bumett Plaza, Suite 1900
80 I Cherry Street, Unit 18
FortWorth,TX 76102
Attorneysfor Applicant United States
Securities and Exchange Commission

Page 35 of 178

EXHIBIT A, pg. 2 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 2 of 69 PageID 5

TABLE OF CONTENTS
TABLE OF CONTENTS ................................................................................................................. i
TABLE OF AUTHORITIES ...................................................................................................... ii-iii
I.

PRELIMINARY STATEMENT ......................................................................................... 1

II.

STATEMENT OF FACTS .................................................................................................. 2
A. The SEC's Investigation ......................................................................................... .2
B. October 17, 2013 Subpoena ..................................................................................... 3
C. May 14,2014 Subpoena .......................................................................................... 5

D. Third-Party Testing of the CTS-IOOO ...................................................................... 7
E. Comparison Charts and the September 16,2014 Subpoena .................................... 7
F. The SEC's November 24,2014 Letter and Severgy's Response ............................. 8
III.

ARGUMENT ....................................................................................................................... 9
A. This Court Has Authority and Jurisdiction To Enforce the Subpoenas,
and Venue Lies in this District... .............................................................................. 9
B. The SEC's Subpoenas Satisfy All Requirements for Enforcement ....................... 11

IV.

1.

The Purpose of the SEC's Investigation Is Legitimate ................................... 12

2.

The Subpoenas Seek Relevant Infonnation .................................................... 12

3.

The SEC Satisfied Applicable Administrative Requirements ........................ 13

CONCLUSION .................................................................................................................. 14

SEC v. Ser1-'ergy, Inc.
MEMORANDUM OF LAW

Page i

Page 36 of 178

EXHIBIT A, pg. 3 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 3 of 69 PageID 6

TABLE OF AUTHORITIES
FEDERAL CASES
Endicott Johnson Corp. v. Perkins,
317 U.S. 501 (1943) ..................................................................................................... 12
Mazurek v. United States,
271 F.3d 226 (5th Cir. 2001) ....................................................................................... 11
RNR Enterprises, Inc. v. SEC,
122 F.3d 93 (2d Cir. 1997) ........................................................................................... 11
Ruggles v. SEC,
567 F. Supp. 766 (S.D. Tex. 1983) .............................................................................. 13
SEC v. Arthur Young & Co.,
584 F.2d 1018 (D.C. Cir. 1978), cerl. denied, 439 U.S. 1071 (1979) ......................... 11
SEC v. Brigadoon Scotch Distributing Co.,
480 F.2d 1047 (2d Cir. 1973), cert. denied, 415 U.S. 915 (1974) ......................... 11, 12
SEC v. ESM Government Securities, Inc.,
645 F.2d 310 (5th Cir. 1981) ....................................................................................... 11
SEC v. First Security Bank,
447 F.2d 166 (lOth Cir. 1971) ..................................................................................... 10
SEC v. Howatt,
525 F.2d 226 (lst Cir. 1975) ........................................................................................ 11
SECI'. Jerry T O'Brien, Inc.,
467 U.S. 735 (1984) ..................................................................................................... 12
SEC v. Lavin,
III F.3d921 (D.C.Cir.1997) ..................................................................................... 10
SEC v. McCarthy,
322 F.3d 650 (9th Cir. 2003) ..................................................................................... 110
SECv. OKCCorp.,
474F. Supp.l031 (N.D. Tex. 1979) ......................................................... 11,12,13,14
United States v. Morton Salt Co.,
338 U.S. 632 (1950) ..................................................................................................... 11

SEC v. Sen}ergy, Inc.
MEMORANDUM OF LAW

Page ii

Page 37 of 178

EXHIBIT A, pg. 4 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 4 of 69 PageID 7

United States v. Powell,
379 U.S. 48 (1964) ....................................................................................................... II

FEDERAL STATUTES AND RULES
Section 10(b) of the Securities Exchange Act of 1934,
IS U.S.c. § 78j(b) ......................................................................................................... .2
Section 17(a) of the Securities Act of 1933,
IS U.S.c. § 77q(a) ........................................................................................................ .2
Section 19( c) of the Securities Act of 1933,
IS U.S.c. § 77s(c) .............................................................................................. 9,13-14
Section 20(a) of the Securities Act of 1933,
IS U.S.c. § 77t(a) ................................................................................................ 2, 9,12
Section 21 (a) of the Securities Exchange Act ofl934,
IS U.S.c. § 78u(a) ........................................................................................... 2, 3, 9,12
Section 21(b) of the Securities Exchange Act of 1934,
IS U.S.C. § 78u(b) ............................................................................................. 9, 12, 14
Section 21 (c) of the Securities Exchange Act of 1934,
IS U.S.C. § 78u(c) ................................................................................................... 9, 10
Commission's Rules of Practice and Investigations,
17 C.F.R. § 201.150(c)(2) .................................................................................. 3,5-6,8
Commission's Rules of Practice and Investigations,
17 C.F.R. § 201.232(c) ....................................................................................... 3,5-6,8
Commission's Rules of Practice and Investigations,
17 C.F.R. § 203.8 .............................................................................................. 3,5-6,8
Commission's Rules of Practice and Investigations,
17 C.F.R. § 240. I Ob-5 .................................................................................................... 2

SEC v. Sen'crgy, Inc.
MEMORANDUM OF LAW

Page iii

Page 38 of 178

EXHIBIT A, pg. 5 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 5 of 69 PageID 8

Applicant United States Securities and Exchange Commission (the "SEC") submits this
Memorandum of Law in suppOli of its Motion for an Order Compelling Compliance with
Administrative Subpoenas.
I.

PRELIMINARY STATEMENT
Through this application, the SEC seeks an order compelling Respondent Servergy, Inc.

("Servergy") to comply with administrative subpoenas issued in the SEC's ongoing investigation
of possibly fraudulent statements or omissions related to Servergy's technology and purported
business relationships.
The SEC's investigation has revealed potential misstatements related to Servergy's
touting of alleged pre-orders from both Amazon and Freescale Semiconductor, Ltd.
("Freescale") for Servergy's only product, the Cleantech-IOOO, when, in fact, Servergy
apparently never received a pre-order from either company.

The investigation has further

revealed potential misstatements related to Servergy's claim that the CTS-lOOO consumes up to
80% less power, cooling, and space in comparison to other servers currently available. The
SEC's investigation is ongoing.
In furtherance of its investigation, the SEC issued and served administrative subpoenas

on Respondent seeking production of communications with investors and prospective investors
as well as other documents critical to the investigation. Respondent, however, has repeatedly
disregarded its legal obligation to comply with the subpoenas, offering partial and selective
compliance, and often silence, instead.
Accordingly, the SEC now requests that this Court order Respondent to do what it should
already have done without the threat of being held in contempt and the concomitant waste of
judicial resources - to produce documents in response to lawfully issued subpoenas.

SEC v. Servergv, Inc.
MEMORANDUM OF LAW

Page I

Page 39 of 178

EXHIBIT A, pg. 6 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

II.

Page 6 of 69 PageID 9

STATEMENT OF FACTS
A.

The SEC's Investigation

The SEC's investigation, captioned In the Maller of Servergy, Inc., is being conducted
pursuant to an Order Directing Private Investigation and Designating Officers to Take Testimony
(the "Fonna] Order"), which the SEC issued on August 27,2013 pursuant to Section20(a) of the
Securities Act of 1933 ("Securities Act"), 15 U.S.c. § 77t(a), and Section 21(a) of the Securities
Exchange Act of 1934 ("Exchange Act"), ]5 U.S.C. § 78u(a). (Declaration of Samantha S.
Martin dated December 4,20]4 ("Martin Decl.")

~

4,) The Fonnal Order directs that a private

investigation be conducted to detennine, among other things, whether any persons have violated
the antifraud and registration provisions ofthe federal securities laws.] (Id. ~ 5.) Specifically, an
aspect of the SEC's investigation concerns whether Servergy's statements relating to its
technology and purported business relationships, among other matters, are misleading. (Id.) The
Fonnal Order designates certain members ofthe SEC staff as officers of the SEC, and authorizes
the designated officers to subpoena witnesses, compel their attendance, take evidence, and
require the production of records deemed by the SEC or its designated officers to be relevant to
the investigation, (Id, ,[6.)
The SEC's investigation uncovered that on or around July 30, 20]2, Servergy's Chief
Executive Officer, William Mapp III ("Bill Mapp"), touted to a purported independent advisor
that received commissions for referring investors to the company that Servergy had received an
order from Freescale. (Martin Decl.

~

42.) The SEC has found no evidence corroborating that

Freescale ever placed such an order with Servergy. (Id. '143.) Similarly, in January and February
2013, Bill Mapp told purported independent advisors and a potential investor that Servergy had
l The antifraud provisions of the federal securities laws identified in the Fonnal Order are Section IO(b) of the
Exchange Act, Rule IOb-5 promulgated thereunder, and Section 17(a) of the Securities Act. (Martin Dec!. '15.)

Page 2

SEC v. Servergy, Inc.
MEMORANDUM OF LAW

Page 40 of 178

EXHIBIT A, pg. 7 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 7 of 69 PageID 10

received a pre-order from Amazon for Servergy's CTS-IOOO server. (ld. '11 31.) In fact, the
investigation revealed that Amazon had not placed a pre-order with Servergy.

Rather, in

December 2012, an Amazon employee had ordered aCTS-I 000 from Servergy for his own
personal use and had specifically infonned Servergy that he was acting personally and not on
behalf of his employer.

(ld.

'11" 29-30.) Meanwhile, Servergy had raised approximately $6

million selling shares of its common stock to private investors between 2009 and February 14,
2013. (Martin Dec!. "11.) Additionally, on February 14, 2013, a broker-dealer registered with
the SEC began offering 10 million additional shares of Servergy's common stock at a price of
$2.00 per share. (ld.) This offering raised approximately $20 million for Servergy. (Jd)

B.

October 17,2013 Subpoena

To further investigate infonnation uncovered

111

the course of its investigation, on

October 17,2013, the SEC staff issued to Servergy a subpoena for documents. (Martin Decl. '11
12; Martin Decl. Ex. A.) The subpoena was issued pursuant to the Fonnal Order and the SEC's
Rules of Practice and Investigations, 17 CF.R. §§ 203.8, 201.232(c), and 201.1S0(c)(2). The
SEC staff served the subpoena on Servcrgy by mailing it via UPS and electronic mail to
Servergy's counsel, Ted Schweinfurth of Baker McKenzie, LLP. who accepted the subpoena on
his client's behalf. (Martin Decl. Ex. A.) The subpoena required Servergy to produce several
categories of documents, including "[alII communications with investors and/or prospective
investors" during the relevant period 2 by November I, 2013. (Id.)
On December 9, 2013, Servergy produced documents purportedly responsIve to the
October 17 subpoena.

(Martin Decl. '11 13.)

The staffs review of the produced documents

revealed that they included investor communications of only one representative of Servergy: Bill

2

The October 17, 2013 subpoena defined the relevant period as from January 1,2009 to the present.

SEC v. Serverg:v, Inc.
MEMORANDUM OF LAW

Page 3

Page 41 of 178

EXHIBIT A, pg. 8 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Mapp. (ld.,

~

Page 8 of 69 PageID 11

14.) The SEC's staff requested, on March 18, March 25, and Apri115, 2014, that

Servergy's attorneys verify the list of Servergy officers and employees whose emails had been
searched in response to the staffs October 17,2013 subpoena. (Martin Dec!.

~~

16-17.) After

the requests, on April 21, 2014, Servergy's counsel sent a letter indicating that they had not
searched the emails of the following Servergy officers: Vice-President of Technology, Townsend
Jack Smith ("Jack Smith"); Vice-President of Engineering, Vihar Rai; and fonner Vice-President
of Strategic Projects and Bill Mapp's son, William Mapp IV ("Will Mapp·'). (Martin Dec!.

~

18.) The staff pointed out the insufficiency of this response in a letter to Servergy's counsel on
May 28, 2014. (ld. '119.)
In the months that followed, SEC staff conducted testimony of Servergy officers that
apparently con finn suspicions that Servergy continued to withhold communications with
investors and prospective investors that are responsive to the October 17, 2013 subpoena.
Specifically, Lance Smith (Servergy's fonner Chief Operating Officer and current Chief
Executive Officer) testified that Will Mapp communicated with current and prospective
investors.

(ld.'1 20.)

Additionally, Vihar Rai testified that he personally participated in

Servergy's presentations to investors. (ld.

~

21.) Will Mapp testified that he, Jack Smith, and

Vihar Rai participated in meetings with investors. (Martin Decl.

~

24.)

On July 24, 2014, having confinned that several Servergy representatives involved in
investor communications were not among the email accounts searched in response to the SEC's
subpoena and after Servergy's counsel claimed that Servergy had conducted additional searches
to ensure that all requested documents were produced, the staff again requested that Servergy
provide an updated list of custodians for emails. (ld.

~

23.) Servergy ignored this request, which

the staff reiterated on September 3, September 22, September 23, and October 1,2014. (ld.

~

Page 4

SEC v. Sen'ergy. Inc.
MEMORANDUM OF LAW

Page 42 of 178

EXHIBIT A, pg. 9 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

25.)

Page 9 of 69 PageID 12

Finally, Servergy provided an updated list of email custodians used to identify

communications with investors on October 3, 2014. Amazingly, this Jist showed that Servergy
still had not expanded their search to include any investor communications limn the in- or outboxes of Jack Smith, Vihar Rai, or Will Mapp. (Jd.

~

26.) On October 7, 2014, the staff again

pointed out that the continued exclusion of these document custodians was unreasonable.
27.)

(Jd.'1

As this Motion is filed, 13 months after the staff of the SEC reasonably requested its

communications with investors, Servergy continues to flaunt its refusal to comply.
C.

May 14, 2014 Subpoena

As stated above, the SEC's investigation revealed that in early 2013, Bi11 Mapp touted
that Servergy received a pre-order from Amazon in communications with a potential investor
and purported independent advisors that received commissions for referring investors to
Servergy. The investigation also revealed that Amazon had made no such pre-order, and that
although an Amazon employee had requested a CTS-IOOO, he had quickly made clear to
Servergy's Wi11 Mapp that his order was unrelated to his employment at Amazon. (Martin Decl.
~

29-30.) Similarly, the SEC's investigation showed that Bill Mapp had also told a purpmied

independent advisor that Servergy had received an order from Freescale. (Jd.

~

42.) We have

found no evidence confirming that Frcescale made any such order. (Jd.'1 43.) Accordingly, the
SEC's staff issued a subpoena to Servergy on May 14, 2014 requesting "[a]11 documents and
communications related to Servergy's claim that it received an order from Amazon" and "[a]ll
documents and communications related to Servergy's claim that it received an order from
Freescale." (Jd.

~~

32, 46; Martin Decl. Ex. E.) The subpoena was issued pursuant to the F0n11al

Order and the SEC's Rules of Practice and Investigations, 17 C.F.R. §§ 203.8, 20I.232(c), and
201. I 50(c)(2).

The SEC staff served the subpoena on Servergy by mailing it via UPS and

SEC v. Sen'ergy, Inc.
MEMORANDUM OF LAW

Page 5

Page 43 of 178

EXHIBIT A, pg. 10 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 10 of 69 PageID 13

electronic mail to Servergy's counsel, Cass Weiland of Squire Patton Boggs, LLP, who accepted
the subpoena on his client's behalf. (Id.)
Servergy again made a selective and partial response to the SEC's subpoena.

With

regard to the touted Amazon "pre-order," Servergy produced a single email string containing
communications dated between December 25,2012 and January 3, 2013, which amounted only
to the Amazon employee's personal request and his subsequent clarification to Will Mapp.
(Ma!iin Decl.

~

33.) Notably, although Lance Smith testified that he received a company-wide

email from Bill Mapp announcing a pre-order from Amazon, Servergy has never produced this
email.

(ld.'1 34.)

As to the Freescale documents, Servergy produced a mere handful of

documents related to its attempt to obtain Freescale's business in July 2012 and Freescale's
request for a Servergy server for testing purposes in November 2012. (ld.

~

45.)

In response to the staffs request for clarification, Servergy's attorneys provided the
search terms used to find the Amazon and Freescale related documents requested by the May 14,
2014 subpoena.

(ld.

~

37, 46.)

Given the fact that these search terms did not turn up the

company-wide Amazon-related email Lance Smith refelTed to, the staff believes that Servergy's
process in responding to the May 14 subpoena was flawed and incomplete. At the very least,
Servergy's search tern1s, as presented to the staff, are ambiguous as to the custodians of searched
documents and use nonsensical modifiers to unnecessarily limit search results.

(Id.)

When

searching for documents related to the purported Freescale order, for example, Servergy limited
its search to include only a handful of days scattered in July, August, and November 2012. In
shOJi, the searches appear tailored to return documents specifically known to Servergy and not
all documents related to a pm1icular subject, as required by the SEC's subpoenas.

Page 6

SEC v. Servergy, Inc.
MEMORANDUM OF LAW

Page 44 of 178

EXHIBIT A, pg. 11 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

D.

Page 11 of 69 PageID 14

Third-Party Testing ofthe CTS-IOOO

To investigate whether Servergy had overstated the capabilities of its products, the SEC
twice issued subpoenas requesting documents related to third-party testing of Servergy's
(Martin Decl. ~~ 49-51.)

products. 3

Testimony of Servergy officers before the SEC staff

indicated that extensi ve testing of Servergy's CTS-IOOO server had been conducted by third
parties. (Id.

~~

52-53.) Specifically, Lance Smith named five different entities that had received

CTS-I ODDs to test. And yet, as of the filing of this Motion, Servergy has produced only a single
email related to third-party testing by any of the entities that Lance Smith identified by name.

(ld.

~

54.) When Servergy revealed the search tenns it used to find responsive documents, they

again appeared to be tailored to find a single document from a specific day - not the broader
category of documents actually requested by the subpoenas. (Id.
E.

~

55.)

Comparison Charts and the September 16,2014 Subpoena

In February 2013, Servergy used a chart titled -'Comparing Servergy to the Blade Server
Competition" in a private placement memorandum ("PPM") to tout the capabilities of its
products. (Mm1in Decl.

~

57.) The SEC's investigation revealed that Will Mapp created this

chart, and Mapp admitted in testimony that - although he thought the chart was accurate when he
created it - he now realizes that his lack of technical expertise resulted in the chart containing
errors. (ld.

~

58.) Mapp's testimony also showed that he created other similar charts and shared

them via email with others within Servergy. (ld.) Accordingly, the SEC issued a subpoena to
Servergy on September 16,2014 requesting "[aJII documents and communications concerning
the comparison of the Cleantech Server 1000 to blade servers, including all drafts of the chart

The October 17, 2013 subpoena requested "[a JI1 documents related to third-party testing of Servergy products."
(Martin Decl. Ex. A). The May 14,2014 subpoena requested "[aJI1 documents and communications related to
perfonnance and feedback from third-parties that tested the CTS-IOOO." (Martin Decl. Ex. E).

3

SEC v. Servergy. inc.
MEMORANDUM OF LAW

Page 7

Page 45 of 178

EXHIBIT A, pg. 12 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 12 of 69 PageID 15

titled 'Comparing Servergy to the Blade Server Competition.'" (Jd.

'l! 59; Martin Decl.

Exhibit

I.) The subpoena was issued pursuant to the Fonnal Order and the SEC's Rules of Practice and

Investigations, 17 C.F.R. §§ 203.8, 201.232(c), and 201.150(c)(2). The SEC staff served the
subpoena on Servergy by mailing it via UPS and electronic mail to Servergy's counsel, Cass
Weiland of Squire Patton Boggs, LLP, who accepted the subpoena on his client's behalf (Jd.)
In an October IS, 2014 letter, Servergy claimed that no responsive documents existed
because the chali in the PPM "was created using infonnation from the web sites of other
companies and there are no drafts of this chart." (Id. '160.) To date, Servergy has produced no
documents in response to the September 16, 2014 subpoena request for comparison charts.
Notably, during a November 24, 2014 telephone conference, counsel for Servergy admitted that
the company actually had hundreds of documents containing Will Mapp's comparison chart that
had not been produced and that he considered the September 16 subpoena "unreasonable" if it
required production of such documents. (Jd.

F.

'l! 61.)

The SEC's November 24, 2014 Letter and Servergy's Response

On November 24, 2014, the SEC staff and counsel for Servergy participated in a phone
call to discuss the issues described above. During that call, and in response to Servergy's prior
complaints about the expense involved in responding to the SEC's subpoenas, the staff proposed
a resolution in which Servergy would produce all the emails sent and received by Bill Mapp,
Lance Smith, Will Mapp, Jack Smith, and Vihar Rai for a smaller timeframe than previously
requested: only 2012 and 2013. (Id.

'l! 63-64.)

The staffs proposal ensures that Servergy cannot

manipulate search results by excluding relevant custodians or applying nonsensical search tenns
and date limitations. In accordance with the proposal, the staff sent a letter to Servergy's counsel
detailing the issues described above, the SEC's proposal, and offering a "clawback" agreement

SEC v. Servergy, Inc.
MEMORANDUM OF LAW

Page 8

Page 46 of 178

EXHIBIT A, pg. 13 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 13 of 69 PageID 16

to assuage fears of inadvertently produced privileged documents. (/d. 'jj 66-67,70.) The
November 24,2014 letter requested a response by December 3, 2014. (/d. 'jj 71.)
On December 2, 2014, counsel for Servergy phoned to inform the staff that Servergy
would be unable to respond to the staff s proposal by December 3 and did not know when a
written response would be provided. (Jd. 'jj 72.) The staff responded by letter on the same day,
noting that the SEC was prepared to file this action to enforce compliance. (/d. 'jj 73.)
Subsequently, on the evening of December 2, 2014, counsel for Servergy sent the staff an email
claiming that he had recently discovered that "200 or so documents" related to the Amazon issue
had inadvertently not been produced. (/d. 'jj 74.) Counsel's email did not address the other issues
discussed here.

III.

ARGUMENT
A.

This Court Has Authority and Jurisdiction To
Enforce the Subpoenas, and Venue Lies in this District

Congress granted the SEC broad authority to conduct investigations and demand
production of evidence relevant to its investigations. See Section 20(a) of the Securities Act, 15
U.S.c. § 77t(a); Section 21 (a) and (b) of the Exchange Act, 15 U.S.c. § 78u(a) and (b). The SEC
and officers it designates are empowered, among other things, to administer oaths, subpoena
witnesses, and compel their testimony and attendance. See Section 19(c) of the Securities Act, 15
U.S.c. §77s(c); Section 21(b) of the Exchange Act, 15 U.S.C. § 78u(b). When a subpoenaed party
refuses to comply with a subpoena issued by the SEC, as Servergy has done here, the SEC has the
authority to seek a court order enforcing the subpoena by compelling compliance. See Section
21 (c) of the Exchange Act, 15 U.S.C. § 78u(c)4 Congress explicitly conferred jurisdiction on the

4

Section 2I(e) of the Exchange Act provides, in relevant part, that

In case of ... refusal to obey a subpoena issued to any person, the [SEC] may
SEC v. SeJTergy, Inc.

Page 9

MEMORANDUM OF LAW

Page 47 of 178

EXHIBIT A, pg. 14 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 14 of 69 PageID 17

United States District Courts to enforce subpoenas upon application by the SEC. Jd. Accordingly,
this Court has jurisdiction over the subject matter of the instant application.
Venue is proper in this district because Congress authorized the SEC to bring subpoena
cnforcement actions in any United States District Court "within the jurisdiction of which such
invcstigation or proceeding is carried on." Jd. Here, the investigation is being conducted by staff
in the SEC's Fort Worth Regional Office, and the subpoena was issued in Fort Worth, Texas.
(Martin Decl.

~~

4, 6.)

Furthennore, this Court has authority to adjudicate the SEC's application in a summary
proceeding. See SEC v. McCarthy, 322 F.3d 650, 658 (9th Cir. 2003) (noting that summary
proceedings are appropriate for SEC subpoena enforcement actions).

Accordingly, the SEC

requests that the Court promptly hear and rule on the SEC's application so that its investigation
is not further delayed. See SEC v. First Security Bank, 447 F.2d 166, 168 (lOth Cir. 1971)
("Questions concerning agency subpoenas should be promptly detennined so that the subpoenas,
if valid, may be speedily enforced"); see also SEC v. Lavin, III F.3d 921, 926 (D.C. Cir. 1997)
(noting that subpoena enforcement actions "are generally summary in nature and must be
expedited").

B.

The SEC's Subpoenas Satisfy All Requirements for Enforcement

"It is well established that the scope of an administrative agency's investigatory power is

broad." SEC v. OKC Corp., 474 F. Supp. 1031, 1034 (N.D. Tex. 1979) (Higginbotham, J.). The
Supreme Court has compared a United States government agency inquiry to that of a grand jury,

invoke the aid of any court of the United States within the jurisdiction of which
such investigation or proceeding is carried on . . .. And such court may issue an
order requiring such person . . . to produce records ... and any failure to obey such
order may be punished by such court as a contempt thereof.

15 U.s.c. § 78u(c).

SEC v. SC1Tergy, Inc.
MEMORANDUM OF LAW

Page 10

Page 48 of 178

EXHIBIT A, pg. 15 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 15 of 69 PageID 18

which can investigate without probahle cause, but "merely on suspicion that the law is being
violated, or even just because it wants assurance that it is not." United States v. Morton Salt Co.,
338 U.S. 632, 642-43 (1950).
Conversely, "[tJhe courts' role in a proceeding to enforce an administrative subpoena is
extremely limited." RNR Enterprises, Inc. v. SEC, 122 F.3d 93, 96 (2d Cir. 1997) (internal
quotations omitted). A court enforces an administrative agency's investigative subpoena if (1)
the investigation is conducted pursuant to a legitimate purpose, (2) the subpoena seeks
information that may be relevant to the purpose, and (3) the subpoena was issued in accordance
with applicable administrative procedures. See SEC v. HawaII, 525 F.2d 226, 229 (1 st Cir.
1975)5 The agency's burden in satisfying this test is "slight'· or "minimal:' and the agency's
"minimal burden ... can be fulfilled by a simple affidavit of the ... agent issuing the summons."
Mazurek v. United States, 271 F.3d 226, 230 (5th Cir. 2001) (internal quotations and citation

omitted) (enforcing IRS summons). As demonstrated below, the SEC has satisfied all
requirements for enforcement in this case.
Once an agency satisfies these threshold criteria, the burden shifts to the respondent to
establish that the subpoena is unreasonable. See SEC v. Arthur Young & Co., 584 F.2d 1018,
1024, 1034 n.139 (D.C. Cir. 1978), cert. denied, 439 U.S. 1071 (1979); SEC v. Brigadoon Scotch
Distrib. Co., 480 F.2d 1047, 1056 (2d Cir. 1973), cert. denied, 415 U.S. 915 (1974); OKC Corp.,

474 F. Supp. at 1036. When the SEC's inquiry is legally authorized and the information sought is
relevant to the inquiry, the burden of showing unreasonableness "is not easily satisfied."

OKC

Corp., 474 F. Supp. at 1036 (citing Brigadoon Scotch, 480 F.2d at 1056).
See also United States v. Powell, 379 U.S. 48, 57-58 (1964) (establishing similar test governing enforcement of
Internal Revenue Service ("IRS") summons); SEC v. ESM Gov't Sec" Inc., 645 F.2d 310, 313 n.3 (5th Cir. 1981)
(noting that standards of IRS summons enforcement cases, including POlvcll, apply generally to SEC subpoena
enforcement cases); OKC CO'1J., 474 F. Supp. at 1034-36 (applying Powell sumdards to SEC subpoena enforcement
action).
5

SEC v. Senvrgy, Inc.

Page 11

MEMORANDUM OF LAW

Page 49 of 178

EXHIBIT A, pg. 16 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

1.

Page 16 of 69 PageID 19

The Purpose of the SEC's Investigation Is Legitimate

The SEC staff is conducting this investigation pursuant to the Fonnal Order, which
authorizes designated officers of the SEC to investigate, among other things, whether violations of
the antifraud provisions of the Securities Act and the Exchange Act have occurred. (Martin Dec!.

'1

5.) This purpose is "Congressionally authorized," because Congress empowered the SEC "to
conduct investigations to determine whether any person has violated or is about to violate the
securities laws." OKC Corp., 474 F. Supp. at 1034-35 (holding that purpose of SEC investigation
was legitimate where investigation was conducted pursuant to SEC's order authorizing
investigation to determine whether issuer violated antifraud and reporting requirements of the
Exchange Act); see Section 20(a) of the Securities Act, 15 U.S.c. § 77t(a); Section 21(a) of the
Exchange Act, 15 U.S.c. §78(u)(a).'

Accordingly, the SEC is conducting this investigation

pursuant to a lawfully authorized and legitimate purpose.
2.

The Subpoenas Seek Relevant Information

An agency's subpoena seeks relevant information when such infonnation is not "'plainly
incompetent or irrelevant to any lawful purpose.'"

OKC Corp., 474 F. Supp. at 1036 (quoting

Endicott Johnson Corp. v. Perkins, 317 U.S. 501, 509 (1943)). Because Congress authorized the
SEC to subpoena documents that it deems "relevant or material to the inquiry," 15 U.S.c. §
78u(b), "a court should be reluctant to declare the subpoenaed documents irrelevant," unless the
subpoena "on its face" seeks documents that "do not pertain to the official subject of tbe
investigation." OKC Corp., 474 F. Supp. at 1036; see also Ruggles v. SEC, 567 F. Supp. 766, 768
(S.D. Tex. 1983) (federal securities laws empower the SEC "to subpoena any records which it

"See also SEC v. Jerry T O·Brien. Inc., 467 U.S. 735, 741 (1984) ("Congress has vested the [SEC] with broad
authority to conduct investigations into possible violations of the federal securities la\vs and to demand production
of evidence relevant to such investigations.").
Page 12

SEC v. Sen'el'gy. Inc.
MEMORANDUM OF LAW

Page 50 of 178

EXHIBIT A, pg. 17 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 17 of 69 PageID 20

deems relevant, and the courts are to pennit inquiries to whatever extent is necessary to make
effective this power of investigation. '').
Here, the infonnation the SEC seeks from Respondent satisfies the relevance standard. The
purpose of the SEC's investigation is to dctennine whether any person violated the antifraud and
other provisions of the federal securities laws in connection with the sale of Servergy securities.
(Martin Dec!.

~

5.)

The subject subpoenas seek documents and communications related to

Servergy's technology, business relationships, and the statements made to investors. (Martin Dec!.
Exhibits A, E & I.) While counsel for Servergy has called the SEC's request for comparison charts
that appear to misrepresent the benefits of Serveq,,),'s technology - for example - "unreasonable,"
the issue of who saw the charts, and when, is undoubtedly relevant infonnation. Far from being
"plainly incompetent" or "irrelevant," all of the documents that the subpoenas require to be
produced are squarely germane to the purpose of the SEC's investigation because they may shed
light on whether any provisions of the federal securities laws were violated.
3.

The SEC Satisfied Applicable Administrative Requirements

Finally, the SEC staff issued and served the administrative subpoenas in accordance with
the applicable administrative requirements.

The federal securities laws authorize the SEC to

designate officers and empower them, among other things, to subpoena witnesses, to compel their
attendance, to take evidence, and to require the production of any books, papers, or other
documents that the SEC deems relevant or material to its investigation. See Section 19(c) of the
Securities Act, 15 U.S.c. § 77s(c), and Section 2l(b) of the Exchange Act, 15 U.S.c. § 78u(b).
Here, a staff attomey who was designated in the Fonnal Order as an officer of the SEC for
purposes of this investigation issued each of the subpoenas to Respondent. (Martin Decl.

~~

5.)

The SEC staff properly served the subpoenas on Respondent by sending subpoenas to Servergy's

SEC v. Servergy, inc.
MEMORANDUM OF LAW

Page 13

Page 51 of 178

EXHIBIT A, pg. 18 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

attomeys. who accepted the subpoenas on Servergy's behalf. (Id,

Page 18 of 69 PageID 21

~'112,

32 & 59,) Accordingly,

the SEC's subpoenas satisfy applicable administrative procedures, See OKC Corp" 474 F, Supp,
at 1036 (holding that the SEC complied with applicable laws where it issued subpoena "pursuant to
an agency order authorizing a legitimate agency investigation"),
IV.

CONCLUSION

For the foregoing reasons and those stated in the SEC's Application for Order
Compelling Compliance with Administrative Subpoenas, the SEC respectfully requests that the
Court b'fant the Application and enter an Order compelling Respondent to comply with the
SEC's administrative subpoenas,
Dated: December 4, 2014
Respectfully submitted,
UNITED STATES SECURITIES
AND EXCHANGE COMMISSION

...~c~:J!1f!!;~-----

~"'>":~kftHEW GULDE

Illinois Bar No, 6272325
United States Securities and
Exchange Commission
Bumett Plaza, Suite 1900
80 I Cherry Street, Unit 18
Fort Worth, TX 76102
Telephone: (817) 978-1410
Facsimile: (817) 978-4927
guldem@sec,gov
Of Counsel:
R. JOANN HARRIS
Texas Bar No. 24013332
SAMANTHA S. MARTIN
Texas Bar No, 24065090
United States Securities and Exchange Commission
Bumett Plaza, Suite 1900
801 Cherry Street, Unit 18
Fort Worth, TX 76102
SEC v, Servergy, Inc.
MEMORANDUM OF LAW

Page 14

Page 52 of 178

EXHIBIT A, pg. 19 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 19 of 69 PageID 22

CERTIFICATE OF SERVICE

On December 4, 2014, I served the (I) the Application of the Securities and Exchange
Commission Compelling Compliance with Administrative Subpoenas, (2) the Memorandum of
Law in Support of the Application of the Securities and Exchange Commission Compelling
Compliance with Administrative Subpoenas, (3) the Declaration of Samantha S. Martin, dated
December 4,2014, and exhibits thereto, and (4) the Proposed Order by mailing the foregoing
documents via UPS overnight delivery to:
Servergy, Inc.
5900 S. Lake Forest Dr. Suite 1201
McKinney, Texas 75070
With a courtesy copy via UPS ovemight delivery to:
S. Cass Weiland
Squire Patton Boggs LLP
2000 McKinney Ave., Suite 1700
Dallas, TX 75201

tt ew J. GuIde

/

SEC v. Sen'crgy, Inc.
MEMORANDUM OF LAW

Page 15

Page 53 of 178

EXHIBIT A, pg. 20 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 20 of 69 PageID 23

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
FORT WORTH DIVISION
)

SECURITIES AND EXCHANGE COMMISSION, )
)

Applicant,

)

vs.

)

Misc. Action No.:

)

)

SERVERGY, INC.

)

Respondent.

)

)

DECLARA TION OF SAMANTHA S. MARTIN IN
SUPPORT OF MOTION FOR AN ORDER COMPELLING
COMPLIANCE WITH ADMINISTRATIVE SUBPOENAS

I.

I am an attorney in the Division of Enforcement of the United States Securities

and Exchange Commission (the ·'SEC").
2.

I submit this declaration in support of the SEC's Motion for an Order Compelling

Compliance with Administrative Subpoenas. I have personal knowledge of the statements in this
declaration, either through direct involvement in, or knowledge of, the SEC's investigation
captioned In the Matter (j{Servergy. Inc., SEC File No. FW-03828.
3.

I am a staff attorney in the SEC's Fort Worth Regional Office. In the course of

my duties, I conduct investigations into possible violations of the federal securities laws. My
responsibilities include, among other things: (1) subpoenaing documents and witnesses, (2)
obtaining and analyzing documents, (3) taking testimony, and (4) determining whether there
have been violations of the statutes enforced by and regulations promulgated by the SEC.

Page 54 of 178

EXHIBIT A, pg. 21 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 21 of 69 PageID 24

The SEC's Investigation
4.

On August 27, 2013, pursuant to Section 20(a) of the Securities Act of 1933

("Securities Act"), 15 U.S.c. § 77t(a), and Section 21(a) of the Securities Exchange Act of 1934
("Exchange Act"), 15 U.S.c. § 8u(a), the SEC issued an Order Directing Private Investigation
and Designating Officers to Take Testimony (the "Fonnal Order") in the investigation captioned
In the Maller of Servergy, Inc.

5.

The Fonnal Order directs that a private investigation be conducted to detennine,

among other things, whether any persons have violated Section 1O(b) of the Exchange Act, 15
U.S.c. § 78j(b), Rule IOb-5 promulgated thereunder, 17 C.F.R. § 240.10b-5, and Section 17(a)
of the Securities Act, 15 U.S.c. §77q(a).

The SEC's investigation concerns, among other

matters, whether Servergy's statements to investors relating to its technology and purported
business relationships, such as the status of alleged pre-orders for the Cleantech-1000 C'CTS1000"), are misleading.
6.

The Fonnal Order designates me and certain other members of the SEC staff as

officers of the SEC, and authorizes the designated officers to subpoena witnesses, compel their
attendance, take evidence, and require the production of records deemed by the SEC or its
designated officers to be relevant to the investigation.

The investigation authorized by the

Fonnal Order is being conducted by the SEC staff in the Fort Worth Rebrional Office.
7.

On March 31, 2014, the SEC issued a supplemental fonnal order designating

additional officers of the SEC (the "Supplemental Fonnal Order").
8.

Because the investigation is ongoing, confidential, and non-public, the SEC has

not attached a copy of the Fonnal Order or Supplemental Fonnal Order as exhibits hereto. If

2
Page 55 of 178

EXHIBIT A, pg. 22 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 22 of 69 PageID 25

requested by the Court, the SEC will provide a copy of the Fonnal Order and Supplemental
Fonnal Order for the Court's review in camera.
9.

In or about June 2013, the SEC staff became aware of complaints that Servergy,

Inc. ("Servergy") and William Mapp III ("Bill Mapp"), Servergy's Chief Executive Officer until
his resignation effective September I, 2014, were making misleading statements about the
company to induce investors to purchase shares of Servergy common stock.
10.

As part of my investigation to date, among other things, 1 have: (1) reviewed

documents produced by Servergy and third-party companies purported to be Servergy business
partners; (2) had discussions with representatives of third-party companies purported to be
Servergy business partners; and (3) taken the testimony of certain current and fonner Servergy
employees. (collectively, the "Investigative Steps").
1 I.

My Investigative Steps have revealed the following:
•

Servergy is incorporated in Nevada with its principal place of business in

McKinney, Texas. Servergy claims to have developed a server, the CTS-I000, which
consumes up to 80% less power, cooling, and space in comparison to other servers
currently available.
•

From 2009 to February 14, 2013, Servergy raised approximately

56,000,000 selling shares of its common stock to private investors.
•

On February 14, 2013, WFG Investments, Inc., a broker-dealer registered

with the SEC, began offering up to 10,000,000 shares of Servergy's common stock, at a
price of 52.00 per share. This offering raised approximately $20,000,000 for Servergy.

3
Page 56 of 178

EXHIBIT A, pg. 23 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 23 of 69 PageID 26

Communications with Investors and Prospective Investors
12.

I signed and issued a subpoena to Servergy on October 17, 2013 (the "October 17,

2013 Subpoena") requiring the company to produce "All communications with investors and/or
prospective investors." (A copy of the October 17, 2013 Subpoena is attached as Exhibit A).
13.

On Deccmber 9,2013, Servergy, through its counsel, Ted Schweinfurth of Baker

& McKenzie LLP, made a production purportedly responsive to the request.

14.

By January 13,2014, I had reviewed the documents produced by Servergy and

noted that Servergy appeared to only produce Bill Mapp's communications with investors and/or
prospective investors.
IS.

On or about January 13, 2014, Servergy retained new counsel, S. Cass Weiland

("Cass Weiland") and James T. Jacks ("Jim Jacks") of Squire Patton Boggs.
16.

On March 18,2014, the staff met with Cass Weiland and Jim Jacks at the SEC's

offices in Fort Worth (the "March 18,2014 Meeting"). During the March 18,2014 Meeting, the
staff expressed concem that Servergy's response to the October 17, 2013 Subpoena was
incomplete due to thc lack of electronic communications to and from Servergy officers other
than Bill Mapp. The staff requested that Servergy's counsel produce Servergy's email custodian
list in order to verify that documents from all Servergy employees that had communications with
investors and prospective investors were collected and searched.
17.

When Servergy's counsel failed to respond to the staffs request for a custodian

list, I reiterated the request for the custodian list by sending an email to Servergy's counsel on
March 25, 2014 and again during an April 15, 2014 telephone conversation with Jim Jacks.
18.

On April 21, 2014, Servergy's counsel finally provided the custodian list. On that

date, the staffleamed that the following custodians were omitted from Servergy's custodian list:

4
Page 57 of 178

EXHIBIT A, pg. 24 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 24 of 69 PageID 27

Townsend Jack Smith ("Jack Smith"), Servergy's Vice President of Technology, Vihar Rai,
Servergy's Vice President of Engineering, and William Mapp IV ("Will Mapp"), Servergy's
former Vice President of Strategic Projects and Bill Mapp' s son. (A copy of the letter dated
April 21, 2014 is attached as Exhibit B).
19.

In a May 28,2014 letter to Servergy's counsel, I expressed the staffs belief that

Servergy's failure to include Jack Smith and Vihar Rai as custodians amounted to
noncompliance with the October 17, 2013 Subpoena. (A copy of the May 28, 2014 letter is
attached as Exhibit C). Servergy never provided a response to the May 28,2014 letter.
20.

On June 4, 2014, Lance Smith, Servergy's fonner Chief Operating Officer and

current Chief Executive Officer, testified that Will Mapp communicated with investors and
prospective investors regarding updates on marketing initiatives and strategic aspects of the
technology.
21.

On June II, 2014, Vihar Rai testified that he participated in Servergy's

presentations to investors to provide technical expertise and that he was never asked by
Servergy's counsel whether he was in possession of documents responsive to the October 17,
2013 Subpoena.
22.

During a June 17,2014 telephone conference with Jim Jacks, I stated that the staff

was concerned that Vihar Rai testified that he was never asked whether he possessed documents
responsive to the October 17, 2013 Subpoena.

I also expressed concern that Will Mapp's

custodial electronically stored infonnation (,"ESP') was not properly searched for responsive
documents. Jim Jacks said that he would research these issues.
23.

During a July 24, 2014 telephone conference, Servergy's counsel requested a

meeting with the staff for the purposes of discussing a possible settlement. The staff stated that

5
Page 58 of 178

EXHIBIT A, pg. 25 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 25 of 69 PageID 28

settlement discussions were premature until Servergy provided evidence that it was not
withholding documents responsive to the outstanding subpoenas.

When Servergy's counsel

protested that Servergy had conducted additional ESI searches to ensure that all requested
documents were produced, the staff asked Servergy's counsel to provide the updated search tenn
and custodian lists that corresponded with the new ESI searches.
24.

On September 5, 2014, Will Mapp testified that he, Jack Smith, and Vihar Rai

participated in Bill Mapp's meetings with investors.
25.

After Servergy's counsel failed to provide updated search tenn and custodian lists

to verify that Servergy was no longer withholding critical documents, I reiterated my request
during a telephone conference with Jim Jacks on September 3, 2014 and in emails to Servergy's
counsel on September 22,2014, September 23,2014, and October 1, 2014.
26.

Servergy's counsel finally provided updated search tenn and custodian lists in a

letter dated October 3,2014 (the "October 3,2014 Letter"). The updated custodian list revealed
that Servergy's list of custodians used to identify communications with investors and prospective
investors had not changed since the custodian list was first provided to the staff on April 21,
2014. (A copy of the October 3, 2014 letter is attached as Exhibit D).
27.

During an October 7, 2014 telephone conference, the staff expressed to

Servergy's counsel that the company's continued exclusion of Jack Smith, Vihar Rai, and Will
Mapp as custodians was unreasonable.
28.

As of the date of this declaration, Servergy has failed to supplement its production

to include Jack Smith's, Vihar Rai's, and Will Mapp's communications with investors and
prospective investors.

6
Page 59 of 178

EXHIBIT A, pg. 26 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 26 of 69 PageID 29

Communications Related to Alleged Amazon Pre-Order
29.

My Investigative Steps have revealed that Servergy received what it later

characterized as a pre-order from Amazon.com, Inc. ("Amazon") on December 25, 2012, when
an Amazon employee filled out a request for a CTS-1000 on Servergy's website.
30.

My Investigative Steps have revealed that the Amazon employee emailed Will

Mapp on December 31,2012 and explained, "I do indeed work at Amazon Web Services ... but
I am not inquiring about the CTS-I 000 for business reasons, nor do I speak on behalf of Amazon
... Presently, I am looking at the CTS-I 000 product for personal use"
31.

My Investigative Steps have revealed that, after December 31, 2012, Bill Mapp

subsequently claimed that Servergy received a pre-order from Amazon on at least three
occasions in January and February 2013:
•

On January 7, 2013, Bill Mapp emailed a purported independent advisor

that received commissions for referring investors to Servergy, and claimed, "Things
moving very well on this end, many BIG exciting updates, including: We just got our
first order from Amazon .... "
•

On January 16, 2013, Bill Mapp emailed a prospective investor and

claimed, "As I mentioned, we are getting ready to ship our first unit to Amazon .... "
•

On February 4, 2013, Bill Mapp emailed a purported independent advisor

that received commissions for referring investors to Servergy, and claimed, "We continue
to take in pre-orders ... [t]his includes Amazon ... they are wanting to order 1-2 systems
to try and them [sic] for 1-2 weeks to be able to plug them in, tum them on and test them;
after which we'll see follow on orders."

7
Page 60 of 178

EXHIBIT A, pg. 27 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

32.

Page 27 of 69 PageID 30

On May 14, 2014, I signed and issued a subpoena (the "May 14, 2014 Subpoena")

to Servergy requesting, "All documents and communications related to Servergy's claim that it
received an order from Amazon." (A copy of the May 14,2014 Subpoena is attached as Exhibit
E).

33.

In response to the May 14, 2014 Subpoena, Servergy only produced one email

string containing communications dated December 25, 2012

(0

January 3, 2013 involving (he

Amazon employee's pre-order and subsequent clarification to Will Mapp.
34.

On June 4, 2014, Lance Smith testified that he received a company-wide email

from Bill Mapp announcing a pre-order from Amazon. Servergy never produced this email.
35.

In a July 18,2014 letter, Cass Weiland addressed the staffs concern that Servergy

was withholding documents related to the purported Amazon pre-order. He wrote, "[W]e have
gone back and created a point-by-point explanation for the Amazon-related documents we have
already produced and we have conducted a new search for any other related items .... We
believe you have all of these e-mails but will review further." (A copy of the July 18, 2014 letter
is attached as Exhibit F). In subsequent follow-up conversations, Servergy's counsel assured
the staff that no additional relevant documents were identified other than the communications
dated December 25, 2012 to January 3,2013 involving the Amazon employee's pre-order and
subsequent clarification to Will Mapp that the company already produced.
36.

In a September 23,2014 email to Servergy's counsel, I requested the search term

list that Servergy used to identify documents responsive to the May 14, 2014 Subpoena.
37.

In the October 3, 2014 Letter, Servergy's counsel disclosed that the following

searches were used to identify ESI responsive to the staff's request in the May 14, 2014

8
Page 61 of 178

EXHIBIT A, pg. 28 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 28 of 69 PageID 31

Subpoena for "All documents and communications related to Servergy's claim that it received an
order from Amazon":

•

tenns:

(steven@uplinklabs.net

AND

apologize),

accounts: Will.m@servergy.com, sent between 2012-1-1 and 2012-12-31;
•

tenns: (noonan AND amazon) [Exclude drafts], sent between 2012-7-31

and 2013-7-31, type: (Mail); and
•

tenns: (amazon NOT (unsubscribe OR kindle)), sent between 2012-7-31

and 2013-7-31, type: (Mail).
38.

On October 7, 2014, the staff participated in a telephone conference with

Servergy's counsel. During the telephone conference, I stated that: (I) it was unclear from the
search parameters which custodians were used for the searches; and (2) the search tenn
"apologize" appeared to be an unreasonable search tenn to identify all documents and
communications related to Servergy's claim that it received a pre-order from Amazon.
39.

After Servergy failed to produce additional documents related to its claim that it

received a pre-order from Amazon, the staff sent a letter to Servergy's counsel dated November
24,2014 infonning counsel that Servergy had not conducted a reasonable search. (A copy of the
November 24, 2014 letter is attached as Exhibit G).
40.

In a December 2, 2014 email, Cass Weiland admitted that an additional "200 or

so" documents related to the alleged Amazon pre-order were previously identified but never
produced.

Cass Weiland claimed that he has "no idea" why these documents were never

produced and that he was "very surprised" to discover that the staff was not in possession of the
documents. (A copy of the December 2,2014 email is attached as Exhibit H).

9
Page 62 of 178

EXHIBIT A, pg. 29 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

41.

Page 29 of 69 PageID 32

On December 3, 2014, Servergy produced the "200 or so" documents related to

the alleged Amazon pre-order that Cass Weiland referenced in his December 2, 2014 email.
Communications Related to Alleged Freescale Order

42.

My Investigative Steps have revealed that Bill Mapp emailed a purported

independent advisor that received commissions for referring investors to Servergy on July 30,
2012 and claimed, "Will keep you posted on exciting developments as we start gearing-up to get
'production ready' and head into production on our first order from http://www.freescale.com.
with more on the way!"
43.

My investigative steps have found no evidence corroborating Servergy's claim

that Freescale submitted an order for the CTS-I 000 ..
44.

A request for "All documents and communications related to Servergy's claim

that it received an order from Freescale" was included in the May 14,2014 Subpoena.
45.

In response to the May 14, 2014 Subpoena, Servergy produced ten documents

related to Servergy pitching Freescale in July of2012 and Freescale's request for a CTS-1000 for
testing purposes in November 2012.
46.

In the October 3, 2014 Letter, Servergy's counsel disclosed that the following

searches were used to identify ESI responsive to the request for "All documents and
communications related to Servergy's claim that it received an order from Freescale":
•

terms:

from:

bill@servergy.com aidan AND ballpark AND pre-

commitment), accounts: Bill@servergy.com, sent between 2012- 7-26 and 2012-7-26;
•

terms: (from: vihar@servergy.com freescale AND magma NOT to:

bill@servergy.com), accounts: jack@servergy.com, sent between 2012-7-25 and 2012-725;

10
Page 63 of 178

EXHIBIT A, pg. 30 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

•

Page 30 of 69 PageID 33

tenns: (from: dan.s@servergy.com PDF and subject: freescale and

exciting), accounts: vihar@servergy.com, sent between 2012-7-30 and 2012-7-30;
•

tenns: (B07373@frcescale.com), accounts: vihar@servergy.com, sent

between 2012-8-10 and 2012-8-10;
•

tenns: (from: B07373@frecscale.com), accounts: vihar@servergy.com,

sent between 2012-11-6 and 2012-1 1-6;

•

tenns:

(from:

freescalc),

jack@servergy.com

accounts: Bill@servergy.com,sentbetween 2012-11-12 and 2012-11-12;
•

tenns: (from: jack@servergy.com to: B07373@freescale.com),

accounts: vihar@servergy.com, sent between 2012-8-2 and 2012-8-2; and
•

tenns:

(from:vihar@servergy.com

freescale

AND

magma

NOT

to: bill@servergy.com), accounts: jack@servergy.com, sent between 2012-7-25 and
2012-7-25.
47.

On October 7, 2014, the staff participated in a telephone conference with

Servergy's counsel. During the telephone conference, I stated that: (1) it was unreasonable for
Servergy to limit its search for responsive documents to three days in July 2012, two days in
August 2012, and three days in November 2012; and (2) the search tenns "ballpark'· and
"exciting" were unreasonable to identify all documents and communications related to
Servergy's claim that it received an order from Freescale.
48.

After Servergy failed to produce additional documents related to its claim that it

received an order from Freescale, the staff sent the November 24, 2014 Letter infonning counsel
that Servergy had not conducted a reasonable search.

11
Page 64 of 178

EXHIBIT A, pg. 31 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 31 of 69 PageID 34

Third-Party Testing of the CTS-lOOO

49.

In order to investigate allegations that Servergy overstated the technological

benefits of the CTS-l 000, the staff requested documents related to third-party testing of the CTS1000.
50.

A request for "All documents related to third-party testing of Servergy products"

was included in the October 17,2013 Subpoena.
51.

A request for "All documents and communications related to performance

feedback from third-parties that tested the CTS-IOOO" was included m the May 14, 2014
Subpoena.
52.

On April 3, 2014, Bill Mapp testified that "extensive" beta testing was conducted

on the CTS-l 000 by "a lot" of third parties.
On June 4,2014, Lance Smith testified that five different entities received CTS-

53.
1000s to test.
54.

To date, the only documents that Servergy produced related to third-party testing

by the companies identified by Lance Smith is a single email related to feedback received by one
of the entities.
55.

In the October 3, 2014 Letter, Servergy's counsel disclosed that the following

search was used to identify ESI responsive to the request for documents related to third-party
testing:

tenns:

(from

anna. b@servergy.com

AND

mgram

AND

feedback),

accounts:lance.s@servergy.com, sent between 2014-3-28 and 2014-3-28.
56.

The November 24, 2014 Letter infonned counsel that no attempt was made by

Servergy or its counsel to create reasonable search tenns or a reasonable custodian list to identify

12
Page 65 of 178

EXHIBIT A, pg. 32 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 32 of 69 PageID 35

documents related to third-party testing of the CTS-l 000 because Scrvergy limited its search for
responsive documents to feedback received a single entity on a single day.
Documents Related to Charts Comparing the CTS-IOOO with Other Servers

57.

My Investigative Steps have revealed that a chart titled "Comparing Servergy to

the Blade Server Competition" contained in Servergy's private placement memorandum dated
February 14, 2013 ("PPM") appears to misrepresent the energy efficiency, space, and cost
savings benefits of the CTS-1000 in comparison to four blade server models manufactured by
other companies.
58.

On September 5, 20J4, Will Mapp testified that he created the chart titled

"Comparing Servergy to the Blade Server Competition." During testimony, Will Mapp stated
that he believed the chart was accurate when he created it, but he now realizes that his lack of
technical expertise resulted in the chart containing errors. Will Mapp also testified that he: (1)
created several comparison charts that were substantially similar to the chart contained in the
PPM while employed at Servergy, (2) emailed either the version of the chart contained in the
PPM or an earlier version of the chart to either Jack Smith or Vihar Rai to review for accuracy,
and (3) emailed the chart to Lance Smith.

59.

On September 16, 2014, I signed and issued a subpoena (the "September 16, 2014

Subpoena") to Servergy requesting "All documents and communications concerning the
comparison of the Cleantech Server 1000 to blade servers, including all drafts of the chart titled
'Comparing Servergy to the Blade Server Competition' contained in Servergy's private
placement memorandum dated February 14, 2013."

(A copy of the September 16, 2014

Subpoena is attached as Exhibit J).

13
Page 66 of 178

EXHIBIT A, pg. 33 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

60.

Page 33 of 69 PageID 36

In an October 15, 2014 letter to the staff, Cass Weiland claimed that no

responsIve documents existed because the chart contained in the PPM "was created using
infonnation from the websites of other companies and there are no drafts of this chart." (A copy
of the October 15, 2014 letter is attached as Exhibit J).
61.

On November 24, 2014, the staff participated

111

a telephone conference with

Servergy's eounsel to discuss the outstanding subpoena response Issues (the "November 24,
2014 Telephone Conference"). During the November 24,2014 Telephone Conference, the staff
asked Servergy" s counsel to explain their affinnation that no responsive documents existed in
light of Will Mapp's testimony.

Cass Weiland then disclosed that hundreds of documents

containing the chart "Comparing Servergy to the Blade Server Competition" were identified by
the company and questioned whether the September 16, 2014 Subpoena required Servergy to
produce these documents. When the staff answered in the affirmative, Cass Weiland stated that
the request was ·'unreasonable."
62.

The November 24, 2014 Letter stated that the documents and communications

conceming the comparison of the CTS-I000 to blade servers were critical to our investigation
and that Servergy" s refusal to produce the documents was unreasonable.
Proposal to Resolve the Outstanding Subpoena Response Issues

63.

During the November 24, 2014 Telephone Conference, the staff communicated

the following to Servergy's counsel:
•

the staff has evidence that Servergy is withholding several categories of

documents that are critical to our investigation;
•

Servergy and its counsel have failed to create a reasonable process for

identifying responsive documents; and

14
Page 67 of 178

EXHIBIT A, pg. 34 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

•

Page 34 of 69 PageID 37

The staff has no confidence that Servergy will create a reasonable process

for identifying responsive documents going forward.
64.

During the November 24, 2014 Telephone Conference, the staff proposed that

Servergy produce all emails sent and received from Bill Mapp, Lance Smith, Will Mapp, Jack
Smith, and Vihar Rai from January 1,2012 to December 31,2013 to the SEC.
65.

The staff explained that its proposal was a reasonable compromise because it

narrows the relevant time period from the five years previously requested in the October 17,
2013 Subpoena, May 14, 2014 Subpoena, and September 16, 2014 Subpoena to two years and
limits the production only to custodians that have testified that they possessed responsive
documents. Additionally, Servergy and its counsel have proven that, at best, they are unwilling
to craft a reasonable process for searching Servergy's ESI, and at worst, are willfully
withholding documents critical to this investigation.

Thus, the only means to assure that

Servergy will not continue to withhold critical documents is for the staff to assume the burden
and expense of searching Servergy's ESI.
66.

Also, the staff stated that it was willing to enter into a "clawback" a,b'Teement,

where, among other things, the staff would agree that the inadvertent production of privileged
materials by Servergy does not automatically constitute a waiver of privilege.
67.

During the November 24, 2014 Telephone Conference, Servergy's counsel

expressed concem that entering into a "clawback" agreement with the staff would waive the
attomey-client privilege as to documents inadvertently produced to the staff in future litigation
involving third-parties.
68.

During the November 24, 2014 Telephone Conference, the staff advised that it

was willing to file an action in U.S. District Court to enforce compliance with the subpoenas.

15
Page 68 of 178

EXHIBIT A, pg. 35 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

69.
IS

Page 35 of 69 PageID 38

The November 24, 2014 Letter explained in detail the staffs belief that Servergy

withholding documents critical to our investigation and the reasons why the staff has no

confidence that Servergy will create a reasonable process for identifying responsive documents
going forward. It also repeated the staffs proposal discussed during the November 24, 2014
Telephone Conference.
70.

The November 24, 2014 Letter also expressed the staffs willingness to enter into

an additional compromise to address the concem expressed by Servergy's counsel that entering
into a "claw back" agreement with the staff would waive the attorney-client privilege as to
documents inadvertently produced to the staff in future litigation involving third-parties.
Specifically, the staff stated that it was willing to allow Servergy to exclude potentially
privileged documents from the initial production based on reasonable and mutually agreed upon
limitations, such as excluding communications sent and received by Servergy's attomeys.
71.

The November 24, 2014 Letter requested that Servergy respond to the staffs

proposal by Wednesday, December 3, 2014 and repeated the staffs willingness to file an action
in U.S. District Court to enforce compliance with the subpoenas.
72.

At or around 2:15 p.m. CST on December 2, 2014, Jim Jacks telephoned my

office to infolln that Servergy would be unable to respond to the staff s proposal by Wednesday,
December 3, 2014.

Jim Jacks stated that Servergy was preparing a written response to the

November 24, 2014 Letter, but he did not know when the written response would be provided to
the staff.
73.

In a December 2, 2014 letter, I infollned Servergy's counsel that the staff

remained prepared to file an action in U.S. District Court to enforce compliance with our
subpoenas. (A copy of the December 2, 2014 letter is attached as Exhibit K)

16
Page 69 of 178

EXHIBIT A, pg. 36 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

74,

Page 36 of 69 PageID 39

As of the date of this declaration, the staff has not received any additional

documents from Servergy in response to the categories of documents described above other than
the production of the "200 or so" documents related to the Amazon pre-order referenced in Cass
Weiland's December 2, 2014 email, or a response to the staff s proposal outlined in the
November 24, 2014 Letter.
75,

It will be difficult, if not impossible, to obtain the materials sought in the October

17, 2013 Subpoena, May 14, 2014 Subpoena, and September 16, 2014 Subpoena from other
sources,

The staff cannot access communications solely between and among Servergy

employees unless Servergy complies with the subpoena,
76,

I declare under penalty of perjury that the foregoing is true and con'ecl.

Executed on the 4th day of December, 2014,

17
Page 70 of 178

EXHIBIT A, pg. 37 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 37 of 69 PageID 40

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORT WORTH REGIONAL OFFICE
BURNETT PLAZA. SUITE 1900
SOl CHERRY STREET. UNIT #IS
FORT WORTH. TEXAS 76102
PHONE, (SI7) 978·6480
FAX, (817) 978·2700

INREPlYltliG
PLEASE QUOTE

FW·3828

October 17, 2013

VIA UPS AND ELECTRONIC MAIL (Ted.Schwein/urth@bakermckenzie.com)
Servergy, Inc.
c/o Ted Schweinfurth
Baker & McKenzie LLP
2300 Trammell Crow Center
2001 Ross Ave.
Dallas, TX 75201
Re:

In the Matter of Servergy, Inc.
[FW-3828)

Dear Sir or Madam:
The staff of the Securities and Exchange Commission ("Commission") is conducting an
investigation in the matter identified above. The enclosed subpoena has been issued to Servergy,
Inc. ("Servergy") as part of this investigation. The subpoena requires Servergy to produce
documents in the matter referenced above.
Please read the subpoena and this letter carefully. This letter answers some questions you
may have about the subpoena. You should also read the enclosed SEC Form 1662. Servergy
must comply with the subpoena. It may be subject to a fine and/or imprisonment if it does not.
In addition, the staff asks that Servergy preserve and retain, until further notice, all
documents and electronic data in its possession or control relating to this matter.

Producing Documents

What materials do I have to produce?
The subpoena requires Servergy to give us the documents described in the attachment to
the subpoena. Servergy must provide these documents by 5 p.m. on Thursday, November 1,
2013. The attachment to the subpoena defines some tenns (such as "document") before listing
what Servergy must provide.
Please note that if copies of a document differ in any way, they are considered separate
documents and Servergy must send each one. For example, if Servergy has two copies of the
same letter, but only one of them has handwritten notes on it, Servergy must send both the clean
copy and the one with notes.
-;:,
iiJi
_""""·PL..''''''''''''''''''''".

Page 71 of 178

EXHIBIT A, pg. 38 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 38 of 69 PageID 41

IfServergy prefers, it may produce photocopies of the originals. The Commission cannot
reimburse Servergy for the copying costs. The copies must be identical to the originals,
including even faint marks or print. If Servergy chooses to send copies, it must keep the
originals in a safe place. The staff will accept the copies for now, but may require Servergy to
produce the originals later.
If Servergy does produce photocopies, please put an identifying notation on each page of
each document to indicate that Servergy produced it and number the pages of all the documents
submitted. (For example, if Jane Doe sends documents to the staff, she may number the pages
JO-I, JO-2, JO-3, etc., in a blank comer of the documents.) Please make sure that the notation
and number do not conceal any writing or markings on the document. If Servergy produces
originals, please do not add any identifying notations.
Do J need to send anything else?

Servergy should enclose a list briefly describing each item it sends. The list should state
which paragraph(s) in the subpoena attachment each item responds to. A copy of the subpoena
should be included with the documents that are produced.
Passwords for documents, files, compressed archives, and encrypted media should be
provided separately either via email addressed to ENF-CPU@sec.gov, or in a separate cover
letter mailed separatel y from the data.
Please include a cover letter stating whether Servergy believes it has met its obligations
under the subpoena by searching carefully and thoroughly for everything called for by the
subpoena, and sending it all to us.
What

if J do not send everything described in the attachment to the subpoena?

The subpoena requires Servergy to send all the materials described in it. If, for any
reason -- including a claim of attorney-client privilege -- Servergy does not produce something
called for by the subpoena, Servergy should submit a list of what it is not producing. The list
should describe each item separately, noting:
•

its author(s);

•

its date;

•

its subject matter;

•

the name of the person who has the item now, or the last person known to have it;

•

the names of everyone who ever had the item or a copy of it, and the names of
everyone who was told the item's contents; and

•

the reason Servergy did not produce the item.

If Servergy withholds anything on the basis of a claim of attorney-client privilege or attorney
work product protection, Servergy should also identify the attorney and client involved.
Where should J send the materials?

Please send the materials to:
2

Page 72 of 178

EXHIBIT A, pg. 39 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 39 of 69 PageID 42

ENF-CPU
U.S. Securities and Exchange Commission
100 F St., N.E., Mailstop 5973
Washington, DC 20549-5973
For smaller electronic productions under 10MB in size, the materials may be e-mailed to
the following email address: ENF-CPU@sec.gov.
Other Important Information
May 1 have a lawyer help me respond to the subpoena?

Yes. Servergy has the right to consult with and be represented by its own lawyer in this
matter. We cannot give it legal advice.
What will the Commission do with the materials 1 send and/or the testimony 1 provide?

The enclosed SEC Form 1662 includes a List of Routine Uses of information provided to
the Commission. This form has other important information for Servergy. Please read it
carefully.
Has the Commission determined thai anyone has done anything wrong?

This investigation is a non-public, fact-finding inquiry. We are trying to determine
whether there have been any violations of the federal securities laws. The investigation and the
subpoena do not mean that we have concluded that Servergy or anyone else has broken the law.
Also, the investigation does not mean that we have a negative opinion of any person, entity or
security.
1 have read this letter, the subpoena, and the SEC Form 1662, but 1 still have questions. What
should 1 do?

If you have any other questions, Servergy or its attorney may call me at (817) 978-5035.

Samantha S. Cox
Enforcement Attorney

Enclosures:

Subpoena
Subpoena attachment
SEC Form 1662
SEC Data Delivery Standards

3

Page 73 of 178

EXHIBIT A, pg. 40 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 40 of 69 PageID 43

SUBPOENA

UNITED STATES OF AMERICA
Securities and Exchange Commission
In the Matter of Servergy, Inc. (FW-3828)
To:

Servergy, Inc.
clo Ted Schweinfurth
Baker & McKenzie LLP
2300 Trammell Crow Center
2001 Ross Ave.
Dallas, TX 75201

YOU MUST PRODUCE everything specified in the Attachment to this subpoena to officers of the
Securities and Exchange Commission, at the place, date and time specified below:
ENF-CPU
U.S. Securities and Exchange Commission
100 F St., N.E., Mailstop 5973
Washington, DC 20549-5973
By 5:00 P.M. (Central), November 1, 2013
FEDERAL LAW REQUIRES YOU TO COMPLY WITH THIS SUBPOENA.
Failure to comply may subject you to a fine and/or imprisonment.

Date: October 17, 2013
By:
Enforcement Attorney
Securities and Exchange Commission
801 Cherry Street, Suite 1900
Fort Worth, Texas 76102
I am an officer of the Securities and Exchange Commission authorized to issue subpoenas in this
matter. The Securities and Exchange Commission has issued a formal order authorizing this
investigation under Section 21 Ca) of the Securities Exchange Act of 1934.

NOTICE TO WITNESS:

If you claim a witness fee or mileage, submit this subpoena with the claim voucher.

Page 74 of 178

EXHIBIT A, pg. 41 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 41 of 69 PageID 44

Servergy, Inc.

SUBPOENA ATTACHMENT
In the Matter ofServergy, Inc. (FW-03828)
October 17, 2013

A.

Definitions

As used in this subpoena, the words and phrases listed below shall have the following meanings:
I. "Relevant Period" shall mean from January 1,2009 to the present.
2. "Servergy" means Servergy, Inc. and all present and former subsidiaries, affiliates,
predecessors, successors, officers, directors, agents, employees, consultants,
shareholders, partnerships, and any general and limited partners thereof, any entities
acquired by or merged with Servergy, Inc. in the Relevant Period, and any aliases,
code names, or trade or business names used by any of the foregoing.
3. "Bill Mapp" means Bill Mapp, Chief Executive Officer, Chairman and Founder of
Servergy.
4. "Lance Smith" means, Lance Smith, Chief Operating Officer of Servergy.
5. "Jack Smith" means Jack Smith, Vice President, Technology ofServergy.
6. "Vihar Rai" means Vihar Rai, Vice President, Engineering of Servergy.
7. "Wade Cramer" means Wade Cramer, Vice President, Manufacturing Operations of
Servergy.
8. "Corporate Board of Advisors" means the Servergy board of advisors cited in
Servergy's private placement memorandum dated February 14,2013.
9. "Document" shall include, but is not limited to, any written, printed, or typed matter
including, but not limited to all drafts and copies bearing notations or marks not
found in the original, letters and correspondence, interoffice communications, slips,
tickets, records, worksheets, financial records, accounting documents, bookkeeping
documents, memoranda, reports, manuals, telephone logs, telegrams, facsimiles,
messages of any type, telephone messages, voice mails, tape recordings, notices,
instructions, minutes, summaries, notes of meetings, file folder markings, and any
other organizational indicia, purchase orders, information recorded by photographic
process, including microfilm and microfiche, computer printouts, spreadsheets, and
other electronically stored information, including but not limited to writings,
drawings, graphs, charts, photographs, sound recordings, images, and other data or
data compilations that are stored in any medium from which information can be
retrieved, Obtained, manipulated, or translated.
10. "Communication" means any correspondence, contact, discussion, e-mail, instant
message, text message, voicernail or any other kind of oral or written exchange or
Page 75 of 178

EXHIBIT A, pg. 42 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 42 of 69 PageID 45

Servergy, Inc.
Subpoena Attachment
Page 2

transmission ofinfonnation (in the fonn of facts, ideas, inquiries, or otherwise) and
any response thereto between two or more persons or entities, including, without
limitation, all telephone conversations, face-to-face meetings or conversations,
internal or external discussions, or exchanges of a document or documents.
II. As used in this attachment, a communication or document "related," or that
"relate(s)" to any given subject means any communication or document that
constitutes, contains, embodies, evidences, reflects, identifies, states, refers to, deals
with, bears upon, or is in any way pertinent to that subject, including without
limitation, documents concerning the preparation of other documents.
12. As used in this attachment, the tenns "include" or "including" denotes "including, but
not limited to."
13. To the extent necessary to bring within the scope of this subpoena any infonnation or
documents that might otherwise be construed to be outside its scope:
a.
b.
c.
d.
B.

the word "or" means "and/or";
the word "and" means "and/or";
the functional words "each," "every," "any," and "all" shall each be
deemed to include each of the other functional words;
the singular includes the plural and the plural includes the singular.

Instructions
I.

Unless otherwise specified, the subpoena calls for production of the original
documents and all copies and drafts of same. Documents responsive to this
subpoena may be in electronic or paper fonn. Electronic documents such as email
should be produced in accordance with the attached document entitled SEC Data
Delivery Standards. All electronic documents responsive to the document
subpoena, including all metadata, should also be produced in their native software
fonnat.

2.

For documents in paper fonnat, you may send the originals, or, if you prefer, you
may send copies of the originals. The Commission cannot reimburse you for the
copying costs. If you are sending copies, the staff requests that you scan (rather
than photocopy) hard copy documents and produce them in an electronic fonnat
consistent with the SEC Data Delivery Standards. Alternatively, you may send us
photocopies of the documents in paper fonnat. If you choose to send copies, you
must secure and retain the originals and store them in a safe place. The staff may
later request or require that you produce the originals.

3.

Whether you scan or photocopy documents, the copies must be identical to the
originals, including even faint marks or print. Also, please note that if copies of a
document differ in any way, they are considered separate documents and you
must send each one. For example, if you have two copies of the same letter, but
only one of them has handwritten notes on it, you must send both the clean copy
and the one with notes.
Page 76 of 178

EXHIBIT A, pg. 43 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 43 of 69 PageID 46

Servergy, Inc.
Subpoena Attachment
Page 3

4.

In producing a photocopy of an original document that contains post-it(s),
notation flag(s), or other removable markings or attachments which may conceal
all or a portion of the markings contained in the original document, photocopies
of the original document both with and without the relevant post-it(s), notation
flag(s), or removable markings or attachments should be produced.

5.

Documents should be produced as they are kept in the ordinary course of business
or be organized and labeled to correspond with the categories in this request. In
that regard, documents should be produced in a unitized manner, i.e., delineated
with staples or paper clips to identifY the document boundaries.

6.

Documents should be labeled with sequential numbering (bates-stamped).

7.

You must produce all documents created during, or concerning, the period
January 1,2009 to the present, unless otherwise specified.

8.

The scope of any given request should not be limited or narrowed based on the
fact that it calls for documents that are responsive to another request.

9.

You are not required to produce exact duplicates of any documents that have been
previously produced to the Securities and Exchange Commission staff in
connection with this matter. If you are not producing documents based upon a
prior production, please identifY the responsive documents that were previously
produced.

10.

This subpoena covers all documents in or subject to your possession, custody or
control, including all documents that are not in your immediate possession but
that you have the effective ability to obtain, that are responsive, in whole or in
part, to any of the individual requests set forth below. If, for any reasonincluding a claim of attorney-client privilege - you do not produce something
called for by the request, you should submit a list of what you are not producing.
The list should describe each item separately, noting:
a.
b.
c.
d.
e.
f.
g.
h.
i.

II.

its author(s);
its date;
its subject matter;
the name of the person who has the item now, or the last person known to
have it;
the names of everyone who ever had the item or a copy of it, and the
names of everyone who was told the item's contents;
the basis upon which you are not producing the responsive document;
the specific request in the subpoena to which the document relates;
the attorney(s) and the cJient(s) involved; and
in the case of the work product doctrine, the litigation for which the
document was prepared in anticipation.

If documents responsive to this subpoena no longer exist because they have been
Page 77 of 178

EXHIBIT A, pg. 44 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 44 of 69 PageID 47

Servergy. Inc.
Subpoena Attachment
Page 4

lost, discarded, or otherwise destroyed, you should identify such documents and
give the date on which they were lost, discarded or destroyed.
12.

C.

No agreement by the Securities and Exchange Commission or its staff, purporting
to modify, limit, or otherwise vary this subpoena or attachment, is binding on the
Commission or its staff unless confirmed or acknowledged in writing by the
Commission or its staff.

Documents to be Produced
I. The curricula vitae for Bill Mapp, Lance Smith, Jack Smith, Vihar Rai and Wade Cramer.
2. Servergy's organization chart and all documents reflecting Servergy's officers, directors,
board members, Corporate Board of Advisors, employees and consultants, whether under
a full-time, part-time or contract basis.
3. All minutes for board of directors and/or Corporate Board of Advisors meetings.
4. Documents or a list sufficient to identify all Servergy offerings, and, for each offering,
the title of the offering; the type of security or investment offered; the dates the offering
started and concluded; the dollar amount of securities offered; the dollar amount raised;
the number of investors; and the number of accredited investors.
5. All documents used to promote or describe to investors and/or prospective investors
Servergy's offerings and/or products, including without limitation, any private placement
memoranda, confidential placement memoranda, information memoranda, brochures
and/or presentations.
6. Documents or a list sufficient to identify all of the individuals or entities that purchased
any Servergy offerings, including without limitation their names, age, address, telephone
number, date of investment and amount invested.
7. All communications with investors and/or prospective investors.
8. All tax returns filed by Servergy.
9. Documents or a list sufficient to identify each bank account held by Servergy, including
without limitation bank name, account number, account owner and authorized
signatories.
10. Bank statements for each bank account into which proceeds from the Servergy offerings
were deposited or subsequently transferred to.
11. If not included in response to Request No.9, the bank statements for Servergy's
operating account or operating accounts.
12. Ifnot included in response to Request No.9, the bank statements for Servergy's revenue
accounts for each of the Servergy offerings.
Page 78 of 178

EXHIBIT A, pg. 45 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 45 of 69 PageID 48

Servergy, Inc.
Subpoena Attachment
Page 5

13. All Servergy general ledgers in Excel format.
14. All balance sheets, income statements and statement of cash flows for each quarter and
year.
15. Provide Servergy's audited financial statements for years 2011 and 2012.
16. Documents sufficient to identify in reasonable detail how the proceeds of the Servergy
offerings were used.
17. All documents related to third-party offers to purchase Servergy.
18. All documents related to third-party testing of Servergy products.
19. All documents related to the claim that Servergy's Cleantech Servers operate on up to
80% less power, cooling and space.
20. Documents or a list sufficient to identify all orders of Servergy products, including
without limitation, date, purchaser, quantity and purchase price.
21. All documents related to the manufacturing of Servergy' s products.

Page 79 of 178

EXHIBIT A, pg. 46 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 46 of 69 PageID 49

SECURITIES AND EXCHANGE COMMISSION
Wasbington, D.C. 20549
Supplemental Information for Persons Requested to Supply
Information Voluntarily or Directed to Supply Information
Pursuant to a Commission Subpoena
A. False Statements and Documants
Seclion 1001 o!Title 18 of the Uniled Stales Code provides as follows:
(W]hoever, in any mailer within Ihe jurisdiction of the executive, legislative, or judicial branch of the
Govemment of the UnHed States, knowingly and willfully(1) falsifies, conceals, or covers up by any trick, scheme, or device a material fact;
(2) makes any materially false, fictitious, or fraudulent statement or representation; or
(3) makes or uses any false writing or document knowing the same to contain any materially false,
fictitious, or fraudulent statement or entry;
shall be fined under this title, imprisoned not more than 5 years ... or both.
B. Testimony
If your testimony is taken, you should be aware of the following:
1.

Record. Your testimony will be transcribed by a reporter. If you desire to go off the record, please indicate this to

the Commission employee taking your testimony. who will determine whether to grant your request. The reporter
will not go off the record at your, or your counsel's, direction.

2.

Counsel. You have the right to be accompanied, represented and adviSed by counsel of your choice. Your
counsel may advise you before, during and after your testimony; question you briefly at the conclusion of your
testimony to clarify any of the answers you give during testimony; and make summary notes during your
testimony solely for your use. If you are accompanied by counsel, you may consult privately.

If you are not accompanied by counsel, please advise the Commission employee taking your testimony if, during the
testimony, you desire to be accompanied, represented and advised by counsel. Your testimony will be adjoumed
once to afford you the opportunity to arrange to be so accompanied, represented or advised.
You may be represented by counsel who also represents other persons involVed in the Commission's investigation.
This multiple representation, however, presents a potential connict of interest if one client's interests are or may be
adverse to another's. If you are represented by counsel who also represents other persons involved in the
investigation, the Commission will assume that you and counsel have discussed and resolved all issues conceming
possible conflicts of interest. The choice of counsel. and the responsibility for that choice, is yours.

3.

Transcript Availability. Rule 6 of the Commission's Rules Relating to Investigations, 17 CFR 203.6, states:

A person who has submitted documentary evidence or testimony in a formal investigative proceeding
shall be entitled, upon written request, to procure a copy of his documentary evidence or a transcript of
his testimony on payment of the appropriate faes: Provided, however, That in a nonpublic Ionnal
investigative proceeding the Commission may for good cause deny such request In any event any
witness, upon proper identification, shall have the right to inspect the official transcript of the witness'
own testimony.

If you wish to purchase a copy of the trenscript of your testimony, the reporter will provide you with a copy of the
appropriate fonn. Persons requested to supply infonnation voluntarily will be allowed the rights provided by this rule.
4.

Perjury. Section 1621 of Title 18 of the United States Code provides as follows:

Whoever(1) having taken an oath before a competent tribunal, officer, or person, in any case in which a law of
the United States euthorizes an oath to be administered, that he will testify, declare, depose, or certify
truly. or that any written testimony, declaration. deposition, or certificate by him subscribed, is true,
willfully and contrary to such oath states or subscribes any material mailer which he does not believe to
be true; or

SEC 1662 (08-13)

Page 80 of 178

EXHIBIT A, pg. 47 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 47 of 69 PageID 50

(2) in any declaration, certificate, verification, or statement under penalty of pe~ury as permitted under
section 1746 of title 28, Uniled States Code, willfully subscribes as true any material matter which he
does not believe to be true;
is guilty of pe~ury and shall, except as otherwise expressly provided by law, be fined under this tiUe or
imprisoned not more than five years, or both.
5. Fifth Amendment and Voluntary Tesffmony. Information you give may be used against you in any federal, state,
local or foreign administrative, civil or criminal proceeding brought by the Commission or any other agency.

You may refuse, in accordance with the rights guaranleed to you by the Fifth Amendment to the Constitution of the
United States, to give any information that may tend to incriminate you.
If your testimony is not pursuant to subpoena, your appearance to testify is voluntary, you need not answer any
question. and you may leave whenever you wish. Your cooperation is, however, appreciated.
6. Formal Orriar Availability. If the Commission has issued a formal order of investigation, it will be shown to you
during your testimony, at your request. If you desire a copy of the formal order, please make your request in writing.
C. Submissions and Settlements
Rule 5(c) of the Commission's Rules on Informal and Other Procedures, 17 CFR 202.5(c), states:
Persons who become involved in ... investigations may, on their own initiative, submit a written
statement to the Commission setting forth their interests and pOSition in regard to the subject matter
of the investigation. Upon request, the staff, in its discretion, may advise such persons of the
general nature of the investigation, including the indicated violations as they pertain to them, and
the amount of time that may be available for preparing and submitting a stalement prior to the
presentation of a staff recommendation to the Commission for the commencement of an
administrative or injunction proceeding. Submissions by interested persons should be forwarded to
the appropriate Division Director or Regional Director with a copy to the staff membe", conducting
the investigation and should be clearly referenced to the speCific Investigation to which they relale.
In the event a recommendation for the commencement of an enforcement proceeding is presented
by the staff, any submissions by interested pe",ons will be forwarded to the Commission in
conjunction with the staff memorandum.

The staff of the Commission routinely seeks to introduce SUbmissions made pursuant to Rule 5(c) as evidence in
CommissIon enforcement proceedings, when the staff deems appropriate.

Rule 5(1) of the Commission's Rules on Informal and Other Procedures, 17 CFR 202.5(1), states:
In the course of the Commission's investigations, civil lawsuits, and administrative proceedings, the
staff, with appropriate authorization, may discuss with persons involved the disposition of such
metteffi by consent, by settlement. or in some other manner. It is the policy of the Commission,
however, that the disposition of any such matter may not, expressly or impliedly, extend to any
criminal cherges that have been, or may be, brought against any such person or any
recommendation with respect thereto. Accordingly, any person involved in an enforcement matter
before the Commission who consents, or agrees to consent, to any judgment or order does so
solely for the purpose of resolving the daims against him in that investigative, civil, or
administrative matter and not for the purpose of resolving any criminal charges that have been, or
might be, brought against him. This policy reflects the fact that neither the Commission nor its staff
has the authority or responsibility for instituting, conducting, settling, or otherwise disposing of
criminal proceedings. That authority and responsibility are vested in the Attorney General and
representatives of the Department of Justice.

0, Freedom of Information Act
The Freedom of Information Act, 5 U.S.C. 552 (the "FOIA"), generally provides for disclosure of information 10 the
public, Rule 83 of the Commission's Rules on Information and RequBsts, 17 CFR 200,83, provides a procedure by
which a peffion can make a written request that information submitted to the Commission not be disclosed under the
FOIA. That rule states that no determination as to the validity of such e request will be made until a request for
disclosure of the information under the FOIA is received. Accordingly, no response to a request that information not
be disclosed under the FOIA is necessary or will be given until a request for disclosure under the FOIA is received. If
you desire an ecknowledgment of receipt of your written request that information not be disdosed under the FOIA,
please provide a duplicate request, together with a stamped, self addressed envelope.

2
Page 81 of 178

EXHIBIT A, pg. 48 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 48 of 69 PageID 51

E. Authority for Solicitation of Information

Persons Directed to Supply Information Pursuant to Subpoena. The aulhority for requiring production of information
is set forth in the subpoena. Disclosure of the information to the Commission is mandatory, subject to the valid
assertion of any legal right or privilege you might have.

Persons Requested to Supply Information Voluntarily. One or more of Ihe following provisions authorizes the
Commission 10 solicn Ihe informalion requested: Sections 19 and/or 20 of the Securities Act of 1933; Section 21 of
Ihe Securities Exchange Act of 1934; Section 321 of Ihe Trust Indenture Act of 1939; Section 42 of Ihe Inveslment
Company Act of 1940; Section 209 of the Inveslment Advisers Act of 1940; and 17 CFR 202.5. Disclosure of the
requested information to the Commission is voluntary on your part:.
F. Effecl of Nol Supplying Information

Persons Directed to Supply Information Pursuant to Subpoena. If you fail to comply with the subpoena, Ihe
Commission may seek a court order requiring you to do so. If such an order is obtained and you thereafter fail to
supply Ihe information, you may be subject to civil andlor Criminal sanctions for contempt of court. In addition, if Ihe
subpoena was issued pursuant to Ihe Securities Exchange Act of 1934, Ihe Inveslment Company Actof 1940, and/or
Ihe InveSlment Advisers Act of 1940, and if you, without just cause, fail or refuse to attend and testify, or to answer

any lawful inquiry, or to produce books, papers, correspondence, memoranda, and other records in compliance with
the subpoena, you may be found guilty of a misdemeanor and fined not more than $1,000 or imprisoned tor a term of
not more than one year, or both.

Persons Requested to Supply Information Voluntarily. There are no direct sanctions and thus no direct effects for
failing to provide all or any part of the requested information.
G. Principal Uses of Information

The Commission's principal purpose in soliciting the information is to gather facts in order to determine whether any
person has violated. is violating. or is about to violate any provision of the federal securities laws or rules for which
the Commission has enforcement authority, such as rules of securities exchanges and the rules of the Municipal
Securities Rulemaking Board. Facts developed may, however, constitute violations of olher laws or rules. Information

provided may be used in Commission and other agency enforcement proceedings. Unless the Commission or its staff
explicitly agrees to the contrary in writing, you should not assume that the Commission or its staff acquiesces in,
accedes to, or concurs or agrees with, any position, condition, request, reservation of right. understanding. or any
other statement that purports, or may be deemed, to be or to reflect a limitation upon the Commission's receipt, use,
disposition, transfer, or retention, in accordance with applicable law, of information provided.
H. Routine Uses of Information
The Commission often makes its files available to other govemmental agencies, particularly United States Attomeys
and state prosecutors. There is a likelihood that information supplied by you will be made available to such agencies

where appropriate. Whether or not the Commission makes its files available to other governmental agencies is, in
general, a confidential matter between the Commission and sudl other governmental agencies.
Set forth below is a list of Ihe routine uses which may be made of Ihe information fumished.
1. To appropriate agencies, entities, and persons when (a) n is suspected or confirmed Ihat Ihe security or
confidentiality of infonmetion in Ihe system of records has been compromised; (b) the SEC has determined Ihat, as a

result of the suspected or confirmed compromise, there is a risk of harm to economic or property interests, identity
Iheft or fraud, or harm to the security or integrity of this system or other systems or programs (whether maintained by
Ihe SEC or anolher agency or entity) that rely upon the compromised information; and (c) Ihe disclosure made to

such agencies, entities, and persons is reasonably necessary to assist in connection with the SEC's efforts to
respond to the suspected or confirmed compromise and prevent, minimize, or remedy such harm.
2. To other federal, state, local, or foreign law enforcement agencies; securities self-regulatory organizations; and

foreign financial regulatory authorities to assist in or coordinate regulatory or law enforcement activities with the SEC.
3. To national securities exchanges and national securities associations that are registered with the SEC, the
Municipal Securities Rulemaking Board; the Securities Investor Protection Corporation; the Public Company
Accounting Oversight Board; Ihe federal banking authorities, including, but not limited to, the Board of Governors of
Ihe Federal Reserve System, Ihe Comptroller of !he Currency, and Ihe Federal Deposn Insurance Corporation; state

securities regulatory agencies or organizations; or regulatory authorities of a foreign government in connection with
their regulatory or enforcement responsibilities.

3

Page 82 of 178

EXHIBIT A, pg. 49 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 49 of 69 PageID 52

4. By SEC personnel for purposes of investigating possible violations of, or to conduct investigations authorized by,
the federal securities laws.
5. In any proceeding where the federa! securities laws are in issue or in which the Commission, or past or present
members of its staff, is a party or otherwise involved in an official capaCity.

6. In connection with proceedings by the Commission pursuant to Rule 102(e) of ils Rules of Practice, 17 CFR
201.102(e).

7. To a bar association, state accountancy board, or other federal, state, local, or foreign licensing or oversight
authority; or professional association or self.·regulatory authority to the extent that it performs similar functions
(including the Public Company Accounting Oversight Board) for investigations or possible disciplinary action.
8. To a federal, state, local, tribal, foreign, or international agency, if necessary to obtain information relevant to the
SEC's decision concerning the hiring or retention of an employee; the issuance of a security clearance; the letting of
a contract; or the issuance of a license, grant, or othar benefit.
9. To a federal, state, local, tnbal, foreign, or intemational agency in responsa to ils request for information
concerning the hiring or retention of an employee; the issuance of a security clearance; the reporting of an
investigation of an employee; the letting of a contract; or the issuance of a license, grant, or other benefit by the
requesting agency, to the extent that the information is relevant and necessary to the requesting agency's decision on
the matter.
10. To produce summary descriptive statistics and analytical studies, as a data source for management information,
in support of the function for which the records are collected and maintained or for related personnel management
functions or manpower studies; may also be used to respond to general requests for statistical information (without
personal identification of individuals) under the Freedom of Information Act.
11. To any trustee, receiver, master, special counsel, or other individual or entity that is appOinted by a court of
competent jurisdiction, or as a result of an agreement between the parties in connection with litigation or
administrative proceedings involving allegations of violations of the federal securities laws (as defined in section
3(a)(47) of the Securities Exchange Act of 1934, 15 U.S.C. 78c{a)(47» or pursuant to the Commission's Rules of
Practice, 17 CFR 201.100 - 900 or the Commission's Rules of Fair Fund and Disgorgement Plans, 17 CFR
201.1100·1106, or otherwise, where such trustee, receiver, master, special counsel, or other individual or entity is
specifically designated to perform particular functions with respect to, or as a result of, the pending action or
proceeding or in connection with the administration and enforcement by the Commission of the federal securities laws
or the Commission's Rules of Practice or the Rules of Fair Fund and Disgorgement Plans.

12. To any persons during tha course of any inquiry, examination, or investigation conducted by the SEC's staff, or in
connection with civil litigation, jf the staff has reason to believe that the person to whom the record is disclosed may
have further information about the matters related therein, and those matters appeared to be relevant at the time to
the subject matter of the inquiry.
13. To intems, grantees, experts, contractors, and others who have been engaged by the Commission to assist in
the performance of a service related to this system of records and who need access to the records for the purpose of
assisting the Commission in the efficient administration of its programs, including by performing clerical,
stenographic, or data analysis functions, or by reproduction of records by electronic or other means. ReCipients of
these records shall be required to comply wilh the requiremants of the Privacy Act of 1974, as amended, 5 U.S.C.
552a.

14. In reports published by the Commission pursuant to authority granted in the federal securities laws (as such term
is defined in section 3(a)(47) of the Securities Exchange Act of 1934,15 U.S.C. 78c(a)(47», which authority shall
include, but not be limited to, section 21(a) of the Securities Exchange Act of 1934, 15 U.S.C. 78u(a».
15. To members of advisory committees that are created by the Commission or by Congress to render advice and
recommendations to the Commission or to Congress, to be used solely in connection with their official designated
functions.

16. To any person who is or has agreed to ba subject to the Commission's Rules of Conduct, 17 CFR 200.735-1 to
200.735-18, and who assists in the investigation by the Commission of possible violations of the federal securities
laws (as such term is defined in section 3(a)(47) oftha Securities Exchange Act of 1934,15 U.S.C. 78c(a)(47», in the
preparation or conduct of enforcement actions brought by the Commission for such violations, or otherwise in
connection with the Commission's enforcement or regulatory functions under the federal securities laws.

4

Page 83 of 178

EXHIBIT A, pg. 50 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 50 of 69 PageID 53

17. To a Congressional office from the record of an individual in response to an inquiry from the Congressional office
made at the request of that individual.
18. To members of Congress, the press, and the public in response to inquiries relating to particular Registrants and
their activities, and other matters under the Commission's jurisdiction.
19. To prepare and publish information relating to violations of the federal securities laws as provided in 15 U.S.C.
78c(a)(47», as amended.
20. To respond to subpoenas in any litigation or other proceeding.
21. To a trustee in bankruptcy.
22. To any govemmental agency. governmental or private collection agent, consumer reporting agency or
commercial reporting agency, governmental or private employer of a debtor, or any other person, for collection,
including collection by administrative offset, federal salary offset, tax refund offset, or administrative wage
gamishment, of amounts owed as a result of Commission civil or administraUve proceedings.

*****
Small Business Owners: The SEC always welcomes comments on how it can better assist small businesses. If you
have comments about the SEC's enforcement of the securiUes laws, please contact the Office of Chief Counsel in the
SEC's Division of Enforcement at 202-551-4933 or the SEC's Small Business Ombudsman at 202-551-3460. If you
would prefer to comment to someone outside of the SEC, you can contact the Small Business Regulatory
Enforcement Ombudsman at http://www.sba.gov/ombudsman or toll free at 888-REG-FAIR. The Ombudsman's office
receives comments from small businesses and annually evaluates federal agency enforcement activities for their
responsiveness to the special needs of small business.

5

Page 84 of 178

EXHIBIT A, pg. 51 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 51 of 69 PageID 54

U.S. Securities and Exchange Commission
Data Deliverv Standards

The following outlines the technical requirements for producing scanned paper collections, email and electronic document!
native file collections to the Securities and ExciHlilge Commission. The SEC uses RecommindJO Axcelerate v4.5 software to
search, review and retrieve documents produced to us in electronic format. Any proposed production in a format other than
those identified below, the proposed use of Predictive Coding, compuler-assisted review or technology-assisted review (TAR),
or the use of de-duplication during the processing of documents, must be discussed with and approved by the lega! and
technical stafTofthe Division of Enforcement (ENF) and the methodology must be disclosed in the cover letter. We appreciate
your efforts in assisting us by preparing data in a format that will enable our stofrto use the data efficiently.

Gcnerallnstructions .......................................................................................................................... .
Delivery FOflnats ................................................................................................................................................... ..

I.

Structured Data - C"'ol1cordance@ Farlnat ................................................................................................. ..

.... 2
........ 2

J. Itnages ..................................................................................................................................................................... 2
2. Concordance Image® Cross-Reference Filc ....................................................... .

.. ....... 2

3. c.'oncordance® Data File ..................................................................................... ..

........ 3

4. l'ext ..................................................................................................................................................... .

.6

5. Linked Native Files .................................................................................................................................

...6

II. Native File Production ................. ..
Ill. Audio Files ............. ,................... ..
IV. Video Files ................................................................ , ............................................. .
V. Electronic Trade and Bank Records ....................... ................... .................

.......... 7
7

VI. Electronic Phone Records ............................................................................. " ............................................ ,,,.,, ........... 7

Gcncrni Instructions
I.

2.

J.
4.

A cover letter should be included with each production. This leiter MUST be imaged und provided as lhejirst record
in the loadiile.
The following information should be included in the letter:
a. List of each piece of media (hard drive, thumb drive, DVD or CD) included in the production by the unique
number assigned to it, and readily apparent on the physical media.
b. List of custodians, identifying:
I) The Bates range (and any gaps therein) for each custodian
2) Total number of records for each custodian
J) Total number of images for each custodian
4) Total number of native files for each custodian
c. List of fields in the order in which they are listed in the data file.
d. Time zone in which emails were standardized during conversion (email collections only).
Documents created or stored electronically MUST be produced in their original electronic format, not printed to paper
or PDF.
Data can be produced on CD, DVD or hard drive; lise lhe media requiring the leasl number a/deliverables.
Label all media with the following:
a. Case number
b. Production date
c. Bates range
d. Disk number (lor X), ir applicable

(Revised 01117/2013)

-I -

Page 85 of 178

EXHIBIT A, pg. 52 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 52 of 69 PageID 55
U.S. Securities and Exchange Commission
Data Delivery Standards

S.

Organize productions by custodian. unless otherwise instructed. All documents from an individual custodian should

6.
7.

be confined to a single load file.
All productions should be checked and produced free of computer viruses.
All produced media should be encrypted.

8.

Passwords for documents, files. compressed archives and encrypted media should be provided separately either via
email or in a separate cover letter from the data.

Delivery Formats
I.

Structured Data .. Concordanc~ Format
The SEC prefers that all data be produced in structured fonnat prepared for Concordance®. All scanned paper, email and
native file collections should be converted I processed to TIFF files, Bates numbered, and include fully searchable text.
Additionally, email and native file collections should include linked native files.

Bates numbering documents:
The Bates number must be a unique. consistently formatted identifier, Le., an alpha prefix along with a fixed length
number for EACH custodian. i.e., ABCOOOOOO I. This fonnat MUST remain consistent across all production numbers for
each custodian. The number of digits in the numeric portion of the fonnat should not change in subsequent productions.
nor should spaces, hyphens, or other separators be added or deleted.
The following describes !he specifications for producing image-based productions to the SEC and the load files required

for Concordance® and Concordance Image®.
I.

Images
a. Images should be single-page, Group IV TIFF files, scanned at 300 dpi.

b.
c.

File names cannot contain embedded spaces.
Bates numbers should be endorsed on the lower right comer of all images.

d.
e.

The number of TIFF files per folder should not exceed 500 files.
Rendering to images PowerPoint, AUTOCADI photographs and Excel files:
I) PowerPoint: All pages of the file should be scanned in full slide image fonnat, with any speaker notes
following the appropriate slide image.
2) AUTOCADI photographs: If possible, files should be scanned to single page JPEG (.WG) file format.

3) Excel: TIFF images of spreadsheets are not useful for review purposes; because the imaging process can
often generate thousands of pages per file, a placeholder image, named by the IMAGEID of !he file, may be
used instead.
2.

Concordance Image® Cross-Reference File
The image cross-reference file is needed to link the images to the database. It is a comma-delimited file consisting of
seven fields per line. There must be a line in the cross-reference file for every image in the database.
The format is as follows:
ImagelD. VolumeLabel,lmageFilePath.DocumentBreak,FolderBreak,BoxBreak,PageCount

ImagelD:

The unique designation that Concordance® and Concordance Image® use to identify an image.
Note: This imagelD key must be a unique andfaed length number. This number will be used in the
.DAT jile as the ImagelDjield that links the database to the images. Theformat of this image key
must be consistent across all productions. We recommend that the format be a 7 digit number 10

aI/ow for the possible increase in the size ofa production.
VolumeLabe/:

Optional

ImageFilePath:

The full path to the image file.

DocumentBreak: The letter "Y" denotes the first page of a document. If this field is blank. then the page is not the

first page ofa document.
FolderBreak:

Leave empty

BoxBreak:

Leave empty

PageCoun/:

Optional

(Revised 01/17/2013)

- 2-

Page 86 of 178

EXHIBIT A, pg. 53 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 53 of 69 PageID 56
U.S. Securities and Exchange Commission
Data Delivery Standards

Sample

IMG0000001"E:\001\IMGOOOOO01.TIF,Y,,,
IMG0000002"E:\001\IMG0000002.TIF""
IMG0000003"E:\001\IMG0000003.TIF""
IMG0000004"E:\001\IMG0000003.TIF,Y,,,
IMGOOOOOOS"E:\001\IMG0000003.TIF,Y,,,
IMGOOOOOO6"E:\001\IMGOOOOO03.TIF""
3,

Concordance® Data File
The data file (.DAT) contains all ofthe fielded information that will be loaded into the Concordance® database.
a.
b.

The first line ofthe .DA T file must be a header row identifying the field names.
The .DAT file must use the following Concordance® default delimiters:
Comma
'II
ASCII characler (020)
Quote
~
ASCII character (254)
Newline
®
ASCII character (174)

c.
d.
e.

Date fields should be provided in the format: mmlddlyyyy
All attachments should sequentially follow the parent documentlemail.

f.

All metadata associated with email, audio files, and native electronic document collections must be produced (see
pages 4-5).
The .DAT file for scanned paper collections must contain, at a minimum, the following fields:
1) F1RSTBATES:
2) LASTBATES:
3) IMAGElD:
4) CUSTODIAN:
5) OCRTEXT:

Beginning Bates number
Ending Bates number
Image Key field
Individual from whom the document originated
Optical Character Recognition (file path, or text)

Sample of .DAT file (when text files are provided separately)
I>FIRSTBAT£5I>'iIPLASTBAI£5I>~I>IllAGEIIlJ>~pctJSIODIlW\>~POCRIEXII>

I>pcoOOOOOOll>~I>PC00000002I>fll>lHG00000011>~I>Smith, Johnl>~E:\TEXI\PC00000001.IXIJ>
I>pcoooOOOOJI>~I>PCO00000031>~l>lHG00000031>~I>Smith. Johnl>flI>E:\IEXI\PC00000003.IXIJ>
I>pco00000041>~pcooooOOOSI>~l>lHG0000004I>flI>Smith, Johnl>flI>E:\IEXI\PC00000004.IXIJ>

Sample of .DAT file (with text)
I>FIRSTBAT£5I>~pLASIBA1£51>flI>IllAGEIDl>flpctJSIODIlW\>~POCRIEXII>
I>pcoOOOOOOll>~I>PCO00000021>~IHGOOOOOOll>~l>Smith. Johnl>~I>'"

IHGOOOOOOl

"'~e

world of

inveBting iB fascinBting and ccmplex, and it can be very fruitful. But unlike 'the banking
world, where deposits are guaranteed by t:he federal government, stocks, bonds and other
securities can lOBe value. There are no guarantees. That's why investing is not a spectator
sport. By far 'the best:. way for investors eo protect 'the money tiley put into the securities
markets i, t:.o do research and ask questio~.~ --. IHG0000002 ···~Ihe laws and rules that
qOveIIl t.he securitieB industry in t:.he United States derive from a simple IUld
9traight:.forward concept: all investors, whether large inStit:.utions or private individuals,
should have access t:.o cenain basic facUi about an investment:. prior to buying it, and 30
long as they hold it. to achieve this, the SEC requires pUblic companies to disclose
meaningful financial and other iDformatio~ to the public. Ibis provides a cammon pool of
knowledge for all investors to use to judge for th~elves whether to buy, sell. or hold a
pa.rt;icular security. Only 'through t:.he steady flov of timely, comprebe~ive, and accurate
info~tion can people make sound investment decisions.~
~PCOOOOOOOJ~~~PC00000003~~~IHG0000003~~~Sm1th, John~~~·-.tHGOOOOOOJ ···~e result of this
iufo~tion flow is a far more active, efficie~t, and transparent capital market Chat
facilit:.ate9 the capital fo~t:.ion so tmporcant to our nation's economy.p
pPC00000004~~pPCOOOOOOOS~~IHG0000004~~~th, Johnp~~ ••• IHG0000004 •• *~o in3ure that
this objective i:r always belng met, t:he SEC continually works witil all major market
~cipants, including especiBlly tbe invest:.ors in our securities markets, to listen t:.o
tileir concerns and to leam from t:heir experience.~ ... IHGOOOOOOS .. ·=the SEC oversees
the key partiCipants in the securities world, including securitie9 exchanges, securities
broker3 and dealers, invescment:. adVisors, and mutual fund9. Here the SEC i9 concerned
primarily with promoting the disclosure of 1mporta~t:. market-related i~for.mation,
maintaining fair dealinq, and protecting against fraud.~

(Revised 01/1712013)

-3-

Page 87 of 178

EXHIBIT A, pg. 54 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 54 of 69 PageID 57
U.S. Securities and Exchange Commission
Data Delivery Standards

The text and metadata of Email and the attachments, and native file document collections should be extracted and
provided in a .DAT file using the field definition and formatting described below:

populat,ed in

Native: Author(s) of document
··semi.-.colon should be used to separate multiple
Entries

TO

Janice; LeeW
[mailto:LeeW@MSN.com)

should be used to separate multiple

":senli-,,,,I,lO should be used to separate multiple

.msg

will vary

(Revised 01/17/2013)

-4-

Page 88 of 178

EXHIBIT A, pg. 55 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 55 of 69 PageID 58
U.S. Securities and Exchange Commission
Data Delivery Standards

document was created
be a

field and cannot be

native file document was stored

Agenda.doc

Meeting

text
Sent: Tuesday, October 12,
201007:05 PM

To: Coffman, Janice
Subject: Board Meeting

Minutes
Janice;
Attached is a copy ofthe

September Board Meeting
Minutes and the draft agenda
for October. Please let me
know if you have any

questions.
John Smith

Assistant Director
Infonnation Technology
Phone: (202) 555-1111
Fax: (202) 555-1112
Email: jsmith@xyz.com

(Revised 0111712013)

- 5-

Page 89 of 178

EXHIBIT A, pg. 56 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 56 of 69 PageID 59
U.S. Securities and Exchange Commission
Data Delivery Standards

4.

Text
Searchable text of the entire document must be provided for every record, at the document level.
a.

Extracted text must be provided for an documents that originated in electronic fonnat. The text files should
include page breaks that correspond to the 'pagination' of the image files. Note: Any document in which text
cannot be extracted must be OCR'd, particularly in the case ofPDFs without embedded text.

b.

OCR text must be provided for all documents that originated in hard copy format. A page marker should be
placed at the beginning, or end, of each page of text, e.g .... IMGOOOOOO I ... whenever possible. The data
surrounded by asterisks is the Concordance® ImageID .
Sample page markers with OCR text:

••• IMGOOOOOO I •••
The world of investing is fascinating and complex, and it can be very fruitful. But unlike Ihe
banking world, where deposits are guaranteed by the federal government, stocks, bonds and other
securities can lose value. There are no guarantees. That's why investing is not a spectator sport. By
far the best way for investors to protect the money they put into the securities markets is to do
research and ask questions .

••• IMG0000002 ...
The laws and rules that govern the securities industry in the United States derive from a simple and
straightforward concept: all investors, whether large institutions or private individuals, should have
access to certain basic facts about an investment prior to buying it, and so long as they hold it. To
achieve this, the SEC requires public companies to disclose meaningful financial and other
information to the public. This provides a common pool of knowledge for all investors to usc to
judge for themselves whether to buy, sell, or hold a particular security. Only through the steady
flow of timely, comprehensive, and accurate information can people make sound investment
decisions.

S.

c.

For redacted documents, provide the full text for the redacted version.

d.

Delivery
The text can be delivered two ways:
I) As multi-page ASCII text files with the files named the same as the ImagelD field. Text files can be placed in
a separate folder or included with the .TIF files. The number of files per folder should be limited to 500 files.
2) Included in the .DAT file.

Linked Native riles
Copies of original email and native file documents/attachments must be included for all electronic productions.
a. Native file documents must be named per the FIRSTBA TES number.
b. The full path of the native file must be provided in the .DAT file for the LINK field.
c. The number of native files per folder should not exceed 500 files.

II.

Native File Production
The SEC will also accept native file productions. The files must be produced as they are maintained in the nonnal course
of business. Data must be organized by custodian named file folders.

III.

Audio riles
Audio files from telephone recording systems must be produced in a fonnat that is playable using Microsoft Windows
Media PlayerT>!. Additionally, the call information (metadata) related to each audio recording MUST be provided. The
metadata file must be produced in a delimited text format. Field names must be included in the first row of the text file.
The metadata must include, at a minimum, the following fields:
I)
2)
3)
4)

Caller Name:
Originating Number:
Called Party Name:
Terminating Number:

(Revised 0111712013)

Caller's name or account/identification number
Caller's phone number
Called party's name
Called party's phone number

·6·

Page 90 of 178

EXHIBIT A, pg. 57 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 57 of 69 PageID 60
U.S. Securities and Exchange Commission
Data Delivery Standards

5)
6)
7)

IV.

Date:
Time:
Filename:

Date of call
Time of call

Filename of audio file

Video Files

Video files must be produced in a format that is playable using Microsoft Windows Media Player™.
V.

Electronic Trade and Bank Records
When producing electronic trade and bank records, provide the files in one of the following fonnats:
1.

MS Excel spreadsheet with header infonnation detailing the field structure. If any special codes exist in the dataset, a
separate document must be provided that details all such codes. If details of the field structure do not fit in the header.

a separate document must be provided that includes such details.
2.

Delimited text file with header information detailing the field structure. The preferred delimiter is a vertical bar "I". If

any special codes exist in the dataset, a separate document must be provided that details all such codes. If details of
the field structure do not fit in the header, a separate document must be provided that includes such details.
VI.

Electronic Phone Records

When producing electronic phone records, provide the files in one of the following fonnats:
I.

MS Excel spreadsheet with header information detailing the field structure. If any special codes exist in the dataset. a
separate document must be provided that details all such codes. If details of the field structure do not fit in the header.

a separate document must be provided that includes such details. Data must be formatted in its native fonnat (Le.
dates in a date format, numbers in an appropriate numerical fonnat, and numbers with leading zeros as text).
2.

Delimited text file with header information detailing the field structure. The preferred delimiter is a vertical bar

"I". If

any special codes exist in the dataset, a separate document must be provided that details all such codes. If details of
the field structure do not fit in the header, a separate document must be provided that includes such details.
The metadata must include. at a minimum, the following fields in separate columns:
I) Account Number:
2) Originating Number:
3) Terminating Number:
4) Connection Date:

5) Connection Time:
6)
7)

End Time:
Elapsed Time:

Caller's telephone account number
Caller's phone number
Called party's phone number
Date ofcall
Start time of call
End time of call
Duration in minutes of the call

Each field of data must be loaded into a separate column. For example, Connection Date and Connection Time must be
produced in separate columns and not combined into a single column containing both pieces of infonnation. Any fields of
data that are provided in addition to those listed here must also be loaded into separate columns.

(Revised 01/1712013)

-7-

Page 91 of 178

EXHIBIT A, pg. 58 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 58 of 69 PageID 61

Page I of I

UPS CampusShip: Shipment Label
UPS CampusShip: View/Print Label
1. Ensure there are no other shipping or tracking labels attached to your package. Select the
Print button on the print dialog box thai appears. Note: If your browser does not support this function
select Print from the File menu to print the label.
2. Fold the printed sheet containing the label at the line so that the entire shipping label is visible.
Place the label on a single side of the package and cover it completely with clear plastic
shipping tape. Do not cover any seams or closures on the package with the label. Place the
label in a UPS Shipping Pouch. if you do not have a pouch, affix the folded labei using clear piastic
shipping tape over the entire label.
3. GETTING YOUR SHIPMENT TO UPS
UPS locations include the UPS Store®, UPS drop boxes, UPS customer centers, authorized
retail outlets and UPS drivers.
Schedule a same day or future day Pickup to have a UPS driver pickup all your CampusShip
packages.
Hand the package to any UPS driver in your area.
Take your package to any iocation of The UPS Store®, UPS Drop Box, UPS Customer Center, UPS
Alliances (Office Depot® or Staples®) or Authorized Shipping Outlet near you. items sent via UPS
Return Services(SM) (including via Ground) are also accepted at Drop Boxes. To find the location
nearest you, please visit the Resources area of CampusShip and select UPS Locations.
Customers with a Daily Pickup
Your driver will pickup your shipment(s) as usual.

FOLD HERE

<I.l

~

o

=

o

~-­

~-­
N
-

:8

https:1Iwww.campusship.ups.com/cship/create?ActionOriginPair=default_PrintWindowPage&... 10/17/2013
Page 92 of 178

EXHIBIT A, pg. 59 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 59 of 69 PageID 62

2000 McKlll!'ley Avenlle
Suite 1700

PAnON BOGGS llP

Dailas, TX 75201
21'·758·1500

Facsimiie 214-758-1550
www.pattonboggs.com

April 21, 2014

S, Cas> Weil.llld
214-753-1504
cweiland@pattonbo,l;l;s,com

VIA E-MAIL: coxsa@sec.gov
Ms. Samantha S. Cox, Esq.
U.S. Securities and Exchange Commission
Fort Worth Regional Office
801 Cherry Street, Suite 1900
Fort Worth, TX 76102
Re:

CONFIDENTIAL TREATMENT
REQUESTED

In the Matter of Servergy, Inc. (FW-3828)

Dear Ms. Cox:
This is in response to your informal request for additional documents.
The documents we are enclosing are presented in the order of your list dated April 7,
2014.
1. Pre-order forms. The forms and related information are included under Tab 1.
You will recall that the Company ceased using forms after a short time. Note
that we have also included substantial documentation relating to the
Company's P-Cubed efforts.
2. Calendars for executives. We are having various calendars transferred
electronically and will furnish these separately. See Tab 2.
3. Employment agreements. We are still in the process of putting these together
rather than sending them piecemeal. See Tab 3.
4. Salary disbursements. See Tab 4.
5. Allocation tables for pre-production
manufactured by Avnet. See Tab 5.

units

by

Interphase

and

units

4828-7859·3306.1
CONFld~MIAL 1'k~A'1l0E<fn ~EOOE~IBDD'··"'"

I

c,',,,

I

c,,,, ;)",:,'

Page 93 of 178

I 'I"'" ':,,' I ";,'''', I

EXHIBIT A, pg. 60 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 60 of 69 PageID 63

PATTON BOGGSIlI
April 21 ,2014
Page 2

6. Servergy/Amazon order. There are several documents relating to this. See
Tab 6.
7. Servergy/Freescale order. See Tab 7.
8. Performance feedback from third-party testers. This topic is being further
researched. In some cases, oral feedback may have been later referenced in
e-mails. Enclosed at Tab 8 are discussions with Freescale, Ingram Micro, and
Aerosim relating to this topic.
9. Term sheet/Lion Capital. Recall that Mr. Mapp ended these conversations
before they progressed very far. See Tab 9.
10. Term sheet/Data Consortium Group. See Tab 10.
11. Roger Klotz loan documents. See Tab 11.
12. AA Center suite attendance log. See Tab 12.
13. Employee manual. See Tab 13.
14. Consulting Agreements. We are still collecting these and will furnish them to
you as a set.
15. Avnet's recent purchase order. See Tab 15.
16. Salary disbursements. See Tab 4 above.
17. Partnership program documents. See Tab 17.
In response to some questions you have posed, I want to provide this additional
information:
1. The Company conducted a document search with the assistance of its IT
Director, Christian Sculpher. The search terms were:
Terms series-a OR series-b OR series-c private-placementmemorandum OR ppm OR memorandum OR funding OR investor OR
investors OR investment OR acquisition OR exist OR questionnaire OR
subscription-agreement OR accredited OR offering OR offerings OR

4828-7859-1306.1
P8/SVG/SEC0370

CONFIDENTIAL TREATMENT REOUESTED

Page 94 of 178

EXHIBIT A, pg. 61 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 61 of 69 PageID 64

PABON BOGGSILf
Apn121,2014
Page 3

offeree OR subdocs OR v-room OR vroom
unsubscribe

OR update NOT

Accounts:
Bill@servergy.com
lance.s@servergy.com
michael.h@servergy.com dan.s@servergy .com roger.l@servergy.com
david.1@servergy.com
Sent: between 2009-1-1 and 2013-11-7
We believe this approach was sufficient to capture the documents requested.
Of course, we have since conducted additional searches per your informal requests
of March 18, 2014 (meeting at SEC), March 25, 2014 (e-mail) and April 7, 2014 (email).
2. Although we are not entirely clear who might constitute a "records
custodian," Mr. Sculpher, Lance Smith (COO), and Michael Holder (CFO) have all
been involved in the collection effort. Roger Tannery (VP, Finance) has also played
a role.
3. We are also enclosing certain documents relating to your questions of Bill
Mapp, which may be of interest. (Tab 18):
a. Linux Foundation membership invoice;
b. Cleantech Agreement; and
c. Dallas Data Center invoice.
Please call me with any questions.

,

SCW:mcr
Enclosures
cc:

Servergy, Inc.
Jim Jacks, Esq. (firm)

4828·7859·3)06.1
CONFIDENTIAL TREATMENT REQUESTED

PB/SVG1SEC0371

Page 95 of 178

EXHIBIT A, pg. 62 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 62 of 69 PageID 65

Servergy
Documents to
SEC

Bates Numbers
D369'()780

Page 96 of 178

EXHIBIT A, pg. 63 of 70

 Fw APR24lt4

I"rom . Ongll1 JD KJPA (214) l!58 1S21

Annie I arne

iEi~:::tN~

SIIIP 10

(817) 918 38:1l1LL SENDER

U.S. SEC
Samantha S. Cox Esq.
801 Cherry Street
Suite 1900

~.

II::...J,,-_

.~
::II

Ship Date 23APR14

ACIWgl 1 l8

~", ~:~)lji~i~~l~il'llIm"mmllml

!

Refit

InVOIce if

~
.c

~

PO II

'"'
.

TR #
~
~ 4483 3449 9487

en

Fort Worth, IX 76102

,f>

!~ AD

THU - 24 APR 10:30\
PRIORITY OVERNIGW
76102
THIS
DFW

GLEA

,[
0

h1I P:/lfed ex nl ine: 8080/fsm e/Fj leAccessServ jet '?src=c: (fSIll e)
955774. 23APR14 DAtA

Page 63 of 69 PageID 66

no

51ACl/7BD9/6SDD

@201JfedEx1$8396REV1I11
EXHIBIT A, pg. 64 of 70

'\

~
\\~1\1

\)~:J.~

<"

Page 97 of 178

•
,I.
.c6f

0327290101

Case 4:14-mc-00022-O Document 2 Filed 12/04/14

"~WARN1NG:

PLEASE FOLD THIS SHIPPING DOCUMENT IN HALF AND PLACE IT INA WAYBILL POUCH AFFIXED TO YOUR SHIPMENT SO THATTHE BARCODE PORTI
USE ONLY THE PRINTED ORIGINAL LABEL fOR SHIPPING. USING A PHOTOCOPY OF HilS LABEL FOR SHIPPING PI
AND COULD RESULT IN ADDITIONAL BilliNG CHARGES. ALONG WITH THE CANCElLATION OF YOUR FEDEX ACCOUNT NUMBER

READ AND SCANNED.

Align bottom of perll and stick airbill here.

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 64 of 69 PageID 67

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
BURNETT PLAZA, SUITE 1900
801 CHERRY STREET, UNIT #18
FORT WORTH, TEXAS 76102-6882
FAX: (817) 978-2700
PHONE: (817) 978-5035

IN REPLYING

PU,ASE QUOl t"

FW-382B

May 28,2014

ViA EMAiL AND UPS

Servergy, Inc,
c/o S, Cass Weiland
Patton Boggs LLP
2000 McKinney Ave" Suite 1700
Dallas, TX 75201
Re:

In the Malier o/Servergy, Inc, (FW-3828)

Dear Mr, Weiland:
This letter is in response to your cOlTespondence dated May 23, 2014, requesting an
extension of time to respond to the subpoena issued to Servergy, Inc. ("Servergy") on May 14,
2014.
Servergy's Failure to Comply with the Subpoena Issued on October 17,2013
The staff issued a subpoena to Servergy on October 17, 2013. On January 13, 2014, Ted
Schweinfurth, Servergy's former counsel in this matter, infol1ned the staffthat Baker &
McKenzie LLP was no longer representing Servergy and refelTed the staff 10 you. On January
14,2014, we spoke on the telephone regarding the change in representation and the stafTs belief
that Servergy had not produced documents required hy the subpoena issued on October 17, 2013.
On March 18,2014, statI and counsel met at the Commission's office in Fort Worth. At
this meeting, the staff listed several documents that were required to be produced by the October
17, 2013 subpoena but remained outstanding. Further, the staff expressed concern that
Servergy's previous productions of documents were incomplete due to the lack of electronic
communications sourced to the following individuals that were named in the subpoena: Lance
Smith, Jack Smith, Vihar Rai and Wade Cramer. The staff asked you to verify that docwnents
from the above mentioned individuals were collected and that all responsive documents were
produced. After repeated requests to you fllr this infol1nation, the list of custodians was finally
provided on April 21, 2014. The staff notes that Servergy's custodian list omitted Jack Smith,
Vihar Rai and Wade Cramer. On April 21, 2014, counsel also represented that Servergy's
approach was "sufficient to capture the documents requested." However, the staff's repeated
requests for responsive documents belie this representation.

/,
",,,,,,,,,,-:···--'!-.-o':..,,,,,,,,,::m::=

Page 98 of 178

EXHIBIT A, pg. 65 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 65 of 69 PageID 68
Page :2

Servergy, Inc.
FW-3S28
May 28.2014

Servergy's Failure to Comply with the Commission's Data Delivery Standards
In your letter dated May 23, 2014, you write that Scrvcrgy rcquircs "additional time to
ensure compliance" with the Commission's Data Delivery Standards. The staff denies this
rcquest. Servergy was made aware of the Commission's Data Delivery Standards on July 26
2013, the date of the staffs first request for docnments. The Commission's Data Delivery
Standards were also enclosed with the subpoena issued to Servergy on October 17, 2013, and the
staf1'has instructed counsel in multiple written and oral communications of the necessity of
producing documents in their Oliginal electronic format, not printed to paper or PDF. Further,
you have not provided the staff any infol1nation that explains Servergy's failure to comply with
the Commission's Data Delivery Standards since you began representing Servergy in this matter.
Moreover, Servergy was notified ofthe Commission's request for seventeen of the
nineteen document reqnests included in the May 14, 20 I 4 subpoena issued on April 7, 2014,
whcn the staff requested these documents through counsel. FUlihermore, many ofthe document
requests included in the May 14,2014 subpoena are also responsive to the October 17, 2013
subpoena. Also, the staff reminds you that these requests were prompted by the testimony of Bill
Mapp, Servergy's Chief Executive Officer, on April 2-3, 2014, in which, Mapp testitied to the
existence of documents that were either previously requested by the Commission or otherwise
vitally relcvant to the investigation. At the conclusion ofMapp's testimony, you asked us to
issue the request for documents through electronic communication as opposed to a formal
subpoena. The statT complied with your request, and only issued the May 14, 2014 subpoena
after repeated requests to you that Servergy produce the responsive documents in their original
electronic format proved unfruitful.

Extension Requests Related to Specific Categories of Documents
I. Servergy's request to extend the production deadline as to electronic calendars tor
Messrs. Bill Mapp, Lance Smith, Wade Cramer, Jack Smith, Vihar Rai, Michael Holder,
Roger Tannery and William Mapp until June 10, 2014, is granted.
2. Servcrgy's request to extend the production deadline as to paragraph 4 until June 10,
2014, is b'ranted. The subpoena requires that these documents be produced in their
original electronic format, not printed to pdf. If it is not possible to produce these
documents in their Oliginal electronic f011nat, please explain the technical limitations in
your production cover letter.
3. Servergy's request to extend the production deadline as to paragraphs 18-19 until June
10,2014, is granted.
4. Scrvergy's request to extend the production deadline as to paragraphs 1 and 3-17 until
June 10, 2014, is denied for the reasons explained above.

Page 99 of 178

EXHIBIT A, pg. 66 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Page 66 of 69 PageID 69
Page 3

Servergy, Inc.
FW-3R28
May 28,2014

If you have any questions concerning this matter, you may contact me at (817) 978-5035
or at coxsa@sec.gov.

Sincerely,

~/&¥
Samantha S. Cox
Enforcement Attorney

Page 100 of 178

EXHIBIT A, pg. 67 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

SQUIRE ..

Page 67 of 69 PageID 70
Squire Patton Boggs (US) LLP
2000 McKinney Avenue
Suite 1700
Dallas, TX 75201

PATTON BOGGS

o

214-758-1500

F

214· 758-1550

squirepattonboggs_com
S. Cass Weiland
T
214-758-1504
cass.weUand@squirepb.com
James T. Jacks

T

214-758-3519

James.jacks@squirepb.com

October 3, 2014

Samantha S. Cox, Esq.
U.S. Securities and Exchange Commission
Fort Worth Regional Office
801 Cherry Street, Suite 1900
Fort Worth, TX 76102
Re:

In the Matter of Servergy, Inc. (FW-03828)

Dear Ms. Cox:
This is in response to your request of September 3,2014, for an updated search terms
list.
The following search terms were included in our April 21, 2014 letter:
Terms series-a OR series-b OR series-c private-placement-memorandum
OR ppm OR memorandum OR funding OR investor OR investors OR
investment OR acquisition OR exist OR questionnaire OR subscriptionagreement OR accredited OR offering OR offerings OR offeree OR
subdocs OR v-room OR vroom OR update NOT unsubscribe
Ignce.s@servergy.com
Accounts:
Bill@servergv.com
michael.h@servergy.com dan .s@servergy.com roger.t@servergy.com
david.1@servergy.com
Sent: between 2009- 1-1 and 2013-11-7

44 Offices in 21 Countries
Squire Patton Boggs (US) LLP is part of the international legal practice Squire Patton 80ggs, which operates worldwide through a number of separate
legal enlities
Please visit squirepattonboggs.com for more information

4837-5613-3918.1.

Page 101 of 178

EXHIBIT A, pg. 68 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Squire Patton Boggs (US) LLP

Page 68 of 69 PageID 71

October 3, 2014

In addition to the above terms included in our April 21, 2014 letter, the following terms
were used in the document search by Servergy:
terms:(has:attachmentAND filename: (contractor*.pdf OR advisor*.pdf OR consult*.pdf
OR emQloyment*.pdf)) accounts:(Bill@servergy.commichael.h@servergy.com
roger.t(g!servergY.com lance.s@servergy.com) sent between 2009-1-1 and 2014-5-12
terms:(has:attachmentAND filename:(contract*.pdfOR advisor*.pdf OR consult*.pdf OR
employment*. pdf)) accounts: (Bill@servergy.com michael.h@serverQy.com
roger.f@servergy.com lance.s@servergy.com) sent between 2009- i -1 and 2014-5-12

TAB7
terms: (steven@uplinklabs.netAN D apologize) accounts:Wili. m@servergy.com sent
between 2012-1-1 and 2012-12-31
TAB8a
terms:(from anna.b@servergy.comAND ingram AND feedback)
accounts:lance.s@servergy.comsent between 2014-3-28 and 2014-3-28
TAB8b 2
terms:(from:bill@servergy.comaidan AND baliRark AND p're-commitment)
accounts:Bill@servergy.com sent between 2012-7-26 ana 2012-7-26
TAB8c
terms: (from:vihar@servergy.comfreescale AND maQma NOT to:bill@servergy.com)
accounts:jack@servergy.comsent between 2012-7-25 and 2012-7-25
TAB8d
terms:(from: dan.s@servergy.com PDF and subjectfreescale and exciting)
accounts:vihar@servergy.com sent between 2012-7-30 and 2012-7-30
TAB8e
terms:(B07373@freescale.com) accounts:vihar@servergy.comsent between 2012-8-10
and 2012-8-10
TAB8f
terms: (from:B07373@freescale.com) accounts:vihar@servergy.comsent between 201211-6 and 2012-11-6
TAB8g
terms: (from :jack(ci)servergy .com free scale ) accounts: Bill@servergy.com sent between
2012-11-12and 2"012-11-12
TAB8h
terms: (from :jack@servergy.com to: B07373@freescale.com)
accounts:vihar@servergy.com sent between 2012-8-2 and 2012-8-2

2

4837- 5613- 3918. L

Page 102 of 178

EXHIBIT A, pg. 69 of 70

 Case 4:14-mc-00022-O Document 2 Filed 12/04/14

Squire Patton Boggs (US) LLP

Page 69 of 69 PageID 72

October 3,2014

TABSi
terms: (from:vihar@seNergy.comfreescale AND maqma NOT to:bill@seNergy.com)
accounts:jack@seNergy.comsent between 2012-7-25 and 2012-7-25
TAB9a
terms:(to:joem69@atlanticbb.net) accounts:BiII@seNergy.com sent between 2012-7-20
and 2012-7-20
Noonan
terms:(noonan AND amazon) [Exclude drafts] sent between 2012-7-31 and 2013-7-31
type: (Mail)
Amazon_2012_2013
terms:(amazon NOT (unsubscribe OR kindle)) sent between 2012-7-31 and 2013-7-31
type: (M ail)
term: McGann
term: Paxton
term: Koerr
In addition to these search terms, a great number of terms were utilized in the original
searches conducted under the auspices of Baker McKenzie. These terms involved
primarily investors and potential investors. A list is enclosed.

Sincerely,

S. Cass Weiland
James T. Jacks
Enclosure
cc:

SeNergy, Inc.
Joann Harris, Esq. (w/enc.)

3
4837-5613~ )918. L

Page 103 of 178

EXHIBIT A, pg. 70 of 70

 Exhibit 

Page 104 of 178 EXHIBIT B, pg. 1 of 75

Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 1 of 74 PageID 73

ATTACHMENT
SEARCH TERMS

Servergy6 Keywords22 + NOT

Terms. series-a OR senes-b OR series-c OR pilvate-placement-mernomndum OR ppm OR
memorandum OR funding OR Investor OR Ilwestors OR .nvestment OR acquisfilon OR ex.t OR
quest.onnaire OR subscnplron-agreemenl OR accredded OR offenng OR offenngs OR offeree
OR subdocs OR v-room OR vroOm OR update NOT unsubscribe
Accounts: Bill@servergycom<mainoBiII@servergy.com>
lance s@servergy_com<maiHo:iance.s@selvergy_com>
micllaeLh@servergycom<mailto:michaeLIl@se.vergy.com>
dan.s@servergy.com<mallto:dan.s@servergycom>
roger. t@servergy.com<ma.lfo:roger t@selvergycom>
david.l@servergycom<maillo:david.l@servergy.com>
Sent: belween 2009· t -1 and 201 3-11-7

WFG Inveslor Email List

Tenns: lewisabronski@yahoo,com<mailto:lewisabronski@yahoo.com> 0 R
amagapoS@betisoulh.net<mattto·amagapos@belisoulh.net> OR
caikman@bellsouth.net<mailto:caikman@bellsouth nel> OR
Grega m es@att.nel<ma.lto:gregames@atl.nel> 0 R
dalinarnold@comcastnet<mattto.darinarnold@comcastnet> OR
Igbacon@olin.com<maitto:tgbacon@olln.com> OR
Jbadeaux@baselogislics nel<mamOJbadeaux@baseloglstics.net> OR
Mar1<@rockbwm.com<maijtoMark@mckbwmcom>OR
Jbanow46@comcasl.nel<mailtoJbarlow46@comcast.net> OR
doncbames@live.col1l<rnaitto:doncbarnes@live.com> 0 R
Anlhony@precisionibc.com<mai~o:Anthony@prec,slon.bccom> OR
] bea ton@tradestation .com <maHto :jb eaton@tradestation.com> 0 R
damian@rockbwm.com<maillodamian@rockbwm.com> OR
drbender@gcdemlcentre .com<mailto:drtJender@gcdermoonlre.com> OR
rebeverly@aft.nej<maillorebeveny@att.net> OR
patl@branyonagency.com<maillo:palt@branyonagencycom> OR
markbres Iin@beUsouthnet<maillo m arkb res lin@bellsouth.nel> 0 R
wyn onial aza ro@baselogislics .nel<m alito wynon iataza ro@baselog.sltes.nat> 0 R
Drew.Brown@gmail.com<mailtoDrew.Brown@gmail.com> OR
an n .ceh] ordan@millry. nel<m a.~o can niceh]ordan@mrllry.nel> 0 R
Broxton_dolphus@yahoo.com<mailto:Broxton_dolphus@yahoo.com> OR
SlenI74@mchs •. com<maitto:SlenI74@mchsi.com> OR
stcaminili@gmall.com<mailto:stcaminiti@gmail.com> OR
beneamp@lcloud com<maitlo:bencamp@icloud.com> OR
gremlinghOl @aol.com<maillogremlinghOl@aolcom> OR sea-rayl@comcastnet<maillosea-

Page 105 of 178

EXHIBIT B, pg. 2 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 2 of 74 PageID 74

rayl@comcastnet> OR dhclalldio@aoLcom<malltodhclaud,o@aol com> OR
dcoate@belisouth.net<mallto:dcoate@belisolllhnet> OR
jOnes@COleman@belisouth.net<maittojones@cole01an@belisoulh.net> OR
ji01@rockbwm.co01<mamo:jim@rockbw01.colll> OR
Estu 76@belisouth.net<maitto:Estu!6@belisouth.net> 0 R
rc@xlremecoulure.lv<maiHo:rc@xtremecoullire tv> OR
Patflck@patfickdallyco01<mailto:Patflck@patrickdaily.com> OR
tdziuba@yahoo.colll<maifio:tdziuba@yahoo.com> OR
ebbadampier@gmail.com<mailto:ebbadampier@gmail.com>OR
bdeaflng@bellsouth.net<mailto:bdearing@bellsouth.net> OR
Mhdearing06@gmad.com<maifio:Mhdeanng06@gmalicom> OR
Jdb@orthomobilel.com<mailto:Jdb@orthomobilel.com> OR
Todd_Dowdy@CINFIN.com<rnailtoTodd_Dowdy@CINFIN.com>OR
edowey@summit.colll<mailto:edowey@summil.co01> OR
mdruha n@bellsouth.net<mailto:mdruhan@bellsouth.net> OR
tdz,uba@yahoo.com<maiHotdz,uba@yahoo.com> OR
Ilegberi@belisouth.net<01a,ltoHegbeli@belisouth.net> 0 R
t hom as Jad den@cobaltmortgage.com<01ailto:thomas.fadden@cobalt01ortga go. com> 0 R
3fouche@gmail.com<mai~0:3fouche@gmail.com> OR
Tod frick@ms.com<mailto:Todfrick@mscom> OR
soudes@gma,l.com<rnaiitosoudes@gmail com> OR
ga rywg arner@bellsouth.net<mamo:garywgamer@bellsouth.net> 0 R
ga sbarro@bellsouth.net<mailto:gasbarro@bellsoutll.net> OR
skcblg@yahoo.com<ma,lto:skcblg@yahoo.com> OR
sg oodson@singnet.com<mamo:sgoodson@SlI1gnet.com> 0 R
jrtl ancken@att.net<llla,lto:jrhancken@att.net> 0 R
juliecharrison@bellsouth.net<mailtojul,echalfison@bellsouth. net> 0 R
babbie7387@gma,l.com<mailfobabbie7387@gmail.com> OR
ajhenseler@aol.com<mamoajhenseler@aol.com> OR
rhond a@rhondahice.com<mailto:rhonda@rhondahiee.com> 0 R
phodgson@reehicommerc,al.com<mailto:phodgson@reehicommercial.com> OR
tclayhood@gmail.com<mailto:tclayhood@gmail.com> OR
daveh.hood@g01ail.com<mailto:dave.h.hood@gma,l.com> OR
dennishome@gmail.com<maiitodennisho01e@gmaHcom> OR
andyhoward@bellsouth.net<mailto:andyhoward@bellsouth.net> OR
Chap.huffman@gma,l.com<maHto:Chap.huffman@gmail.com> OR
Ichsah@yahoo.com<01arlto:lchsah@yahoo.com> 0 R
gicrves@bellsouth.net<mailto:gicives@bellsouth.net> OR
Jjja eger@hotmail.com<ma,ltoiJjaeger@hotmal.com> 0 R
Anton 1@atcnet.net<01ai~oAntonl @atcnelnet> OR
DDCCjj@yahoo.com<mailto:DDCC.Jj@yahoo.com> OR
donj2001@bellsouth.net<mailtodonj2001@bellsouth net> OR
RHJ65@belisouth.net<mallto:RHJ65@belisouth.llet> OR
johnvjones@belisouth.net<mailto:johnv)ones@belisoulll.net> OR
ke nhflyboY@belisauth.llet<mailto:keithflyboy@bellsouth.net> 0 R
rklezm er@klezmennauftin.com<01amo:lklezmer@klezmermauftincolll> 0 R
Mkohn@hargrovepc com<mailtoMkohll@hargrovepc.com> OR
paul.kraemer@gmail.co01<maitto.paul.kraemer@gmail.com> OR
BJL 1331 @belisolltt.net<lllallto:BJL 1331 @bellsouthnet> 0 R
wmlazaro@baselogislics.net<maillo wmlazaro@baselogistics.llet> OR
wlaza ro@baselogist,csnet<01aiitowlazaro@baselog,stics.net> OR
georgelee@gulftel.com<maiitogeorgelee@Qulftelcom> OR
jef1!ind@comcast.net<mallto:)efflii1d@comcast.net> OR
twlindsey@frontrer.nef<maitto.twlindsey@frontier.net> 0 R
tOllllpage@Zebra.net<mailta:tomlpage@zebra.net> OR
plong@askb,s.com<maitto:plong@askbis.com> OR

Page 106 of 178

EXHIBIT B, pg. 3 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 3 of 74 PageID 75

t resdmd@belisouth.l1et<mailtotresdmd@belisoutll.net> 0 R
MaltmarchOl@hotmall.com<mailto:MaltmarchOl@hotmail.com>OR
dmalt22@mchsl.com<mailto:dmatt22@mchsl.com> OR InshmcmillaI125@hotmai, OR
scmeadows@bellsouth.net<mailto:scmeadows@belisouth.l1et> OR
aumetton@aol.com<mallto:aumelton@aol.com> OR
cmiller@craighomes.com<mailto:cmlller@craighomes.com> OR
Ray.miller@pdgeng.com<mailto:Raymiller@pdgengcom> OR Imiller@emplreconcrete.com<maittojmiller@empire-concrete.com> OR
Imillard r6@gmall.com<mailtoJmHlardr6@gmail.com> OR
Tommonlz@bbvacompass.com<rnailtoTom.montz@bbvacompass.com> OR
rwm 1975@aoLcom<maillo:rwm1975@aolcom> OR iJ@wildbluenet<mailtoll@wildbluo net> 01.<
Dmorns1@mrndspring.com<maittoDmorris1@mindspring.com> OR
m ontrosesupe IV el@att.net<mailto:lllontrosesupervet@att.net> 0 R
Dmynck2@hotmail.com<maitto:Dmyrick2@hotmail.com> OR
m artin@themyrickagency.com<maiilo:martin@lhemyrickagencycom > 0 R
whn@nfibuildingcentercom<mailto whn@nftbuildingcenlercom> OR
Inewman@sJm.com<maillolnewman@sjiTIcom> OR
golson@bea'pathgoILcom<maito.golson@bearpathgolfcom> OR
rori@usouthal.edu<rnailtoTori@usouthal.edu> OR
paul.padgetf46@gmail.com<maittopaulpadgetl46@gmarlcom> OR
Shamn_patferson@belisouth.nel<maillo·Sharon_patferson@bellsouth net> OR
jlp@dupm.com<mailto:jlp@dupmcom>OR
stephen@rockbwm.colll<lllarllo.slephen@rockbwlllcom> OR
cliffpitman@bellsouth.net<maillo:cliffpilman@bellsouthnet> OR
gprescol@usoulhal.edu<ma,lIo:gprescot@usouthaledu> OR
randallc@jccal.org<mailto:randallc@jccalorg> OR
ha mid. reed@dgextern.com<maillo·harold.reed@dgextern.com> 0 R
rreehl@coldwelibankeLcom<maillo:rreehl@coldwelibankercom> OR
cdogdoc@aol.com<maillo:cdogdoc@aol.com> OR
~richard4@Yahoo.com<malllo:ljflchard4@yahoo.com> OR
de keriv@bellsouth.net<maillo:dekeriv@bellsouth.net> 0 R
Droel @,ts.Jnjcom<mailto:Droe1 @~sjnjcom> OR
bamama@bellsouth.net<mailfo:bamama@bellsoufh.net> OR
laxdan@gmail.com<mailtolaxdan@gmail.com> OR
tljhawk@belisouth.net<maillotljhawk@belisouth.net> OR
m aryfou@onginaloystemouse.com<mailto:marylou@orrglnalo yster hous e. COill > 0 R
be rt@gransladerstayfor.com<mailto:bert@granstaderslayfor.com> 0 R
ghschack@yahoo.com<mailto:ghschack@yahoo com> OR
scottfree@bellsouth.net<maiito:scottfree@bellsouth.net> 0 R
m shoem aken@bellsouth .net<m a ilt o:ms hoe ma ker@bellsouth.net> 0 R
Jacksimmons@earthlink.net<maiHojacksimmons@earthlink.net> OR
wrstaggers@gmaiLcom<mailto:wrstaggers@gmail.com> OR
Platinum286@hotmail.com<maillo:Plalinum286@hotmaiLcom> OR
CIl,isstewart@reagan.com<mailto:cllfisstewart@reagan.com>OR
StrnebaLlgh1@attnet<mailto:Stineballgh1@atl.net> 0 R
bille@0Id27grill.colll<mai~0:bille@0Id27grill.colll> OR
greg.slrachan@atl.net<maillo:greg.strachan@att.net> OR
gremlingh01@aoLcom<mallto:gremhngh01@aol.com> OR
dm .stuart@gulftel.com<mailto:d.l11.stuart@glllfteLcom> 0 R
stublera@belisouthnet<mailto:stliblem@bellsQuth.net> OR
Suberly1@belisollth.net<maillo:Subeny1@bellsoulh.nel> OR
ph iltaber2@aol.com<maillo:phutaber2@aol.com> 0 R
olegt@guildmortgage.net<malltoolegt@guudmol1gage.net> OR
dtanella@haroonightholdings.com<maillo:dtanella@harbo rfig htholdings .com> 0 R
greggstretch@yahoo.com<maitto:greggstretcil@yahoo.com> OR
Rydr2@bellsouth.net<mailto:Rydr2@belisouth.nef> OR ferry@terry-

Page 107 of 178

EXHIBIT B, pg. 4 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 4 of 74 PageID 76

thompson.com<mailtoterry@lerry-lhompson corn> OR
dutch@gulftel.com<mailtodutch@gulflel.com> OR
Wsv1975@belisouthnel<mailto:W;v1975@belisouth.net> 0 R
N323st@yahoo.com<maitto.N323st@yahoo.com> OR
scottw a Hers@sbcglobaLne<mailt05coltw a Iters@sbcglobal.ne> 0 R
twelch@parrbrown.com<marlto:twelch@parrbrown.com> OR
ken.welch7731@gmail.com<ma,tokenwelch7731@gmallcom> OR
jpwheHon@comcastnet<mailto.jpwhetton@comcastnet> OR
lundywilder@gmai.com<rnailto.lundywilder@gmail.com> OR
swampratI950@gmail.com<maittoswamprat1950@gma,l.com> OR
Rwood1947@grnaiLcom<rnailtoRwood1947@grnail.com>
Sent between 2009·1-1 and 2013-11-8
Selected Emails
Terms: keresa@llmc.com<mailto.keresa@llmc.com> OR
don.moudy@regencygas.com<mailtodon.moudy@regencygas.com> OR
curt is@curtismcole.com<mailto.curlts@curtismcole.com> 0 R
robert@securegrowthllc.com<maiitoTobert@securegrowthllc.com> 0 R
waynef@fisherooyd.com<mailto:waynef@ftsherboyd.com> OR
rick.sage@el)(network.com<matlloTick.sage@,,,,,network.com> OR
kthagan51@msn.com<matltokthogan51@msn.com> OR
ne Isongleen@live.com<mailto:nelsongreen@live.com> 0 R
planner84@yahoo.com<mailto:planner84@yahoo com> OR
scottJr@abilene.cam<mailto:scotqr@abtlene.cam> 0 R
stockbucks@yahoo.com<matllO:stockbucks@yahoo.com> OR
botlom_solulions@suddenltnk.net<mailto:boHom_solutions@suddenlink.net> OR
langasDC@yahoo.com<maillo:langasDC@yahoo.com> OR
geoffdillo@gmail.com<mailto:geoffdrtto@gmail.com> OR
JenntfeLr@servergy.com<matito:Jenntferr@servergy.com> OR
miketolleson@aol.com<mailto:miketolleson@aol.com> OR
kb run ner@sQulhwesternservices.com<mallto:kbrun ner@southwestemservices .C om > 0 R
ptomaso@letcogroup.com<mailto:ptomaso@etcogroup.com> OR
j .parker@rmcn.com<mailto:j.par1<er@rmcn.com> 0 R
ken@kenpaxtonlawcorn<rnatltoken@kenpaxtonlaw com> OR
ray@heros777.com<mailtoray@herbs777.com> OR
ca rlsylchat@aol.com<matlto.carlsylchat@aol.com> 0 R
rusty mayeux@everesthp com<malitoTusty.mayeux@everesthpcom> OR
billd34@yahoo.com<mailtobilld34@yahoocom> OR
neilnance@Y-dhoo.com<maiUo:neilnance@yahoo,com> OR
gsdutka@tx.rr.com<maitlo:gsdutka@tx.rr.com> OR
cate b@soundharoorlinanclal.com<rnailtocaleb@soundharoarlinancia I. co m> 0 R
bkg410@gmaiLcom<mailto:bkg410@gmaiLcom> OR
billl1 arm on@centurytel.net<mailto:billharmon@centu,ytel.net> 0 R
schroede r@globafsourcepartners.com<mailta: schroeder@globalsourcepartners.com> 0 R
btomes@bobtomesfard.com<mailtobtames@bobtomesford.com> 0 R
richard.mitchen@att.nel<mailto:richard.mrtchen@attnet> OR
alsbeck@gmatl.com<mailto:alsbeck@gmail.com> OR
kengoldsmith@mudsmrth.com<mailto:kengoldsmrth@mudsmith.com> OR
)csinv@tx.IT.com<maiito:jcsinv@tx.rr.com> OR
bryan .shnider@gmall.com<mailto:bryan.shntder@gmaILeorn> OR
michha4@regent.edu<mailtotnichha4@regenledu> OR
mlwoodall@aol.com<maiHo:mlwoodall@aol.com> OR
rreagan@aol.com<mallto.rreagan@aoLcom> OR
tgdokk@gmail.com<maitlo:tgdokk@gmail.com> OR
roywestb rook@sumcertatn.com<malto.roywestbrook@sumcertaltl.com> 0 R

Page 108 of 178

EXHIBIT B, pg. 5 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 5 of 74 PageID 77

dpearsoll@stmartinsbylake.org<maiitodpearson@slmartlllsbyiake org> OR
wrs.tyl@gmail.com<ll1amo:wrs.tyl@gll1ail.com> OR joel@rareci.com<mailtopel@rarecl.coll1>
OR dave@gmanfamily.coll1<maiHodave@gmanfamilycom> OR
dtxdtx@aolcom<mailtodtxdtx@aol.com> OR
cactussch@gmail.com<mal~o:cactll ssch@gmail.com> OR
nannieboOl@gmall.cOm<maillo:nannleboOl@gmail.com> OR
Iinam7@verizollnet<mallto:linam7@venzon net> OR
aboname@gmail.com<mailto:aboname@gmail.com> OR dp@mlcncom<malrto dp@nncn.com>
OR IDsektlte@holmailcom<mailtorosektae@hotmall.com> OR
roger.klotz@nomaglc.com<maillo:rogerklotz@nomagic.com> OR
preston pate @centripetaI3.com<mailto:prestonpale@centnpetaI3.com > 0 R
rolynn37@aolcom<maiHo:rolynn37@aol.com>OR
jlldymyklak@msll.com<maiHojudymyklak@msn.com>OR
cratxn@mecom<maito:cratxn@me.com> 0 R
Wade.c@Sen/ergy.com<mailtoWade.c@servergy.com> OR
bgfortexas@aol.com<mai~o:bgfortexas@aol.com> OR
cook3214@aol.com<mailtocook3214@aol.com>OR
russro@msn.com<maltlo:lUssrb@msn.com>OR Ir@ilmc com<mailto:lr@llmc com> OR
Ibonner92@gmail.com<mailto:jbonner92@gmail.com> OR
Byron W@fonnertexasrangersorg<maiitoByronW@formertexasrangers.org> 0 R
dianas7@att.net<rnailtodianas7@att.nel> OR
moore813@veopoin1.com<maitto:moore813@veopoint.com> OR
alanjstoner@atl.net<marlto:alanlsloner@attnel> OR
ccowman@erwaste.com<maillo:ccowman@eiwaste.com> OR
johnaker@cox.net<maiitojohnaker@cox.net> OR
rbecq uet@sbcglobal.net<mailto·.roecquet@sbcglobal.nel> OR
wacramer@gmarl com<maiHo:wacramer@grnail.com> OR
jjtt24@suddenlink.net<mailto:jjlt24@suddenlrnk net> OR
mwclark@wildblue.net<marilo:mwclark@wildblue.net> 0 R
ba ny@quikwash.com<maiito:barry@quikwash.com> 0 R
benwillia m s@kenpaxlon .com <ma illo: benwilliams@kenpaxlon.com> 0 R
slw rrg ht 1@sbcglobal.nel<mallto:slwnghtl@sbcglobal.net>

Page 109 of 178

EXHIBIT B, pg. 6 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 6 of 74 PageID 78

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORT WORTH REGIONAL OFFICE
801 CHERRY STREET
SUITE 1900
FORT WORTH, TEXAS 76102
PHONE: (817) 978-3821
FAX (817) 978-2700

iN REPLYING
PLEASE QUOTE

FW-3828

May 14,2014

VIA UPS AND ELECTRONIC MAIL (cweiland@pattonboggs.colll)
Servergy, Inc.
clo Cass S_ Weiland
Patton Boggs LLP
2000 McKinney Ave., Suite 1700
Dallas, TX 75201
Re: In the Maller o!Servergy, Inc. (FW-3828)
Dear Mr. Weiland:
Pursuant to Rule 8 of the United States Securities and Exchange Commission's Rules
Relating to Investigations, 17 C.F.R. § 203_8, and your agreement to accept service, 1 have
enclosed a subpoena for documents and testimony issued to your client, Servergy, Inc,
CServergy"), in connection with the above-referenced fonnal investigation_ The subpoena
requires Servergy to produce documents by 5:00 p.m. (Central) on May 28, 2014.
PI case send the materials to:
ENF-CPU
U.S, Securities and Exchange Commission
100 F St, N.E., Mailstop 5973
Washington, DC 20549-5973
For smaller electronic productions under 10MB in size, the materials may be emailed to the
following email address: ENF-CPU@sec.gov.
Please carefully read the subpoena attachmcnt, which contains, among other things,
important instructions rclated to the manner of producing documents, In particular, if you prefer
to send us copies of original documents, the staff requests that you scan and produce hard
copy documents, as well as electronic documents, in an electronic format consistent with
the SEC Data Delivery Standards attached hereto. All electronic documents responsive to
the document subpoena, including all metadata, should also be produced in their native
software format.

Page 110 of 178

EXHIBIT B, pg. 7 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 7 of 74 PageID 79

In previous discussions between the staff and counsel, counsel has expressed uncertainty
as to how documents should be produced. As previously explained to counsel, documents
created or stored electronically, such as Microsoti Word and Excel documents and .pst fiIes
MUST be produced in their original electronic format, not printed to paper or PDF. If a
document only exists in hard copy fonnat, such as hand written notes, the document may be
imaged and produced in PDF fonnat. For a complete list of instructions of production
requirements, please refer to the SEC Data Delivery Standards attached hereto. If you have any
questions concerning the production of documents in an electronic fOl1nat, please contact me as
soon as possible and in any event before producing documents.
In your cover Ietter(s) accompanying the production of responsive documents, please
enclose a list briefly describing each item you send. The list should state to which paragraph(s)
in the subpoena attachment each item responds. Please also state in the cover letter(s) whether
you believe you have met your obligations under the subpoena by searching carefully and
thoroughly for everything called for by the subpoena, and sending it all to us. A copy of the
subpoena should be included with the documents that are produced.
Passwords for documents, files, compressed archives, and encrypted media should be
provided separately either via email addressed to ENF-CPU@see.gov, or in a separate cover
letter mailed separately from the data.
Please also provide a narrative description describing what was done to identify and
collect documents responsive to the subpoena. At a minimum, the narrative should describe:
•
•
•
•

•
•
•
•

who searched for documents;
who reviewed documents found to detel1nine whether they were responsive;
which custodians were searched;
what sources were searched (e.g., computer files, CDs, DVDs, thumb drives, flash drives,
online storage media, hard copy files, diaries, datebooks, planners, filing cabinets, storage
facilities, home offices, work offices, voicc mails, home email, webmail, work email,
backup tapes or other media);
what search terms, if any, were employed to identify responsive documents;
what finns and/or persons, if any, assisted in analyzing the data collected;
what third parties, if any, were contacted to obtain responsive documents (~.g., phone
companies for phone records, brokerage finns for brokerage records); and
where the original electronic and hardcopy documents are maintained and by whom.

Please note that, in any matter in which enforcement action is ultimately deemed to be
waITanted, the Division of Enforcement will not recommend any settlement to the Commission
unless the party wishing to settle certifies, under penalty of perjury, that all documents
responsive to Commission subpoenas and f0n1131 and infol1nal document requests in this matter
have been produced.
The infonnation you provide is subject to the Commission's routine uses. A list of those
uses is contained in the enclosed copies of SEC Fonn 1662, which also contain other important
infonnation. Please provide a copy of thesc fl1rmS to your client. This investigation is

2

Page 111 of 178

EXHIBIT B, pg. 8 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 8 of 74 PageID 80

confidential and nonpublic and should not be construed as an indication by the Commission or
its staff that any violation oflaw has occurred, nor as a rcflection upon any person, entity, or
security.
If you have any questions or would like to discuss this matter, you may call me at (8 I 7)
978-5035 or email me at coxsa@sec.gov.

Kind regards,

/~f.C¥
Samantha S. Cox
Enforcement Attorney

Enclosures:

Subpoena
Subpoena Attachmcnt
SEC Fonn 1662
SEC Data Delivery Standards

3

Page 112 of 178

EXHIBIT B, pg. 9 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 9 of 74 PageID 81

SUBPOENA

UNITED STATES OF AMERICA
Securities and Exchange Commission
In the Matter of Servergy, Inc. (FW-3828)
To:

Servergy, Inc.
cia Cass S. Weiland
Patton Boggs LLP
2000 McKinney Ave., Suite 1700
Dallas, TX 75201

YOU MUST PRODUCE everything specified in the Attachment to this subpoena to officers of the
Securities and Exchange Commission, at the place, date and time specified below:
ENF-CPU
U.S. Securities and Exchange Commission
100 F St., N.E., Mailstop 5973
Washington, DC 20549-5973
By 5:00 p.m. (Central) on May 28, 2014
FEDERAL LAW REQUIRES YOU TO COMPLY WITH THIS SUBPOENA.
Failure to comply may subject you to a fine and/or imprisonment.

By:

>i~1~

Date: May 14, 2014

Samantha S. Cox
Enforcement Attorney
Securities and Exchange Commission
801 Cherry Street, Suite 1900
Fort Worth, Texas 76102

I am an officer of the Securities and Exchange Commission authorized to issue subpoenas in this
matter. The Securities and Exchange Commission has issued a formal order authorizing this
investigation under Section 21 (a) of the Securities Exchange Act of 1934.

NOTICE TO WITNESS:

If you claim a witness fec or mileage, submit this subpoena with the claim voucher.

Page 113 of 178

EXHIBIT B, pg. 10 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 10 of 74 PageID 82

Servergy, Inc.

SUBPOENA ATTACHMENT
In the Maller o/Serl'crgy, Inc. (FW-3R2R)
May 14,2014
A.

Definitions

As used in this subpoena, the words and phrases listed below shall have the following meanings:
I. "Relevant Period" shall mean from January 1, 2009 to the present.
2. "Servergy" means Servergy, Inc. and all present and fonner subsidiaries, affiliates,
predecessors, succcssors, officers, directors, agents, employees, consultants,
shareholders, partnerships, and any general and limited partners thereof, any entities
acquired by or merged with Scrvergy, Inc. in the Relevant Period, and any aliases,
code names, or trade or business names used by any of the foregoing.
3. "Bill Mapp" means Bill Mapp, Chief Executive Officer, Chainnan and Founder of
Servergy.
4. "Lance Smith" means, Lance Smith, Chief Operating Officer ofServergy,
5. "Jack Smith" means Jack Smith, Vice President, Technology ofServergy.
6. "Vihar Rai" means Vihar Rai, Vice President, Engineering of Servergy.
7. "Wade Cramer" means Wade Cramer, Vice President, Manufacturing Operations of
Servergy.
8. "Michael Holder" means Michael Holder, Chief Financial Officer and Director of
Servergy,
9. "Roger Tannery" means Roger Tannery, Vice Presidcnt of Finance and Accounting
of Servergy.
10. "William Mapp" means William Mapp, Vice President, Strategic Projects of
Servergy.
II. "Insperity" means Insperity, Inc. and all present and f(lnner subsidiaries, affiliates,
predecessors, successors, officers, directors, agents, employees, consultants,
shareholders, partnerships, and any general and limited partners thereof, any entities
acquired by or merged with Insperity, Inc. in the Relevant Period, and any aliases,
code names, or trade or business names used by any of the foregoing.
12. "Interphase" means Interphase Corporation and all present and fonner subsidiaries,
affiliates, predecessors, successors, officers, directors, agents, employees, consultants,
shareholders, partnerships, and any general and limited partners thereof, any entities
acquired by or merged with Interphase Corporation in the Relevant Period, and any

Page 114 of 178

EXHIBIT B, pg. 11 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 11 of 74 PageID 83

Servergy, Inc,
Subpoena Attachment
Page 2

aliases, code names, or trade or business names used by any of the foregoing.
13. "Avnet" means Avnet, Inc. and all present and fonner subsidimies, affiliates,
predecessors, successors, officers, directors, agents, employees, consultants,
shareholders, partnerships, and any general and limited partners thereof, any entities
acquired by or merged with Avnet, Inc. in the Relevant Period, and any aliases, code
names, or trade or business names used by any of the foregoing.
14. "Amazon" means Amazon.com and all present and fonner subsidiaries, affiliates,
predecessors, successors, officers, directors, agents, employees, consultants,
shareholders, p31inerships, and any general and limited partners thereof, any entities
acquired by or merged with Amazon.com in the Relevant Period, and any aliases,
code names, or trade or business names used by any of the foregoing.
15. "Freescale" means Freescale Semiconductor, Ltd. and all present and fonner
subsidiaries, affiliates, prcdecessors, successors, officers, directors, agents,
employees, consultants, shareholders, partnerships, and any general and limited
partners thereof, any entities acquired by or merged with Freescale Semiconductor,
Ltd. in the Relevant Period, and any aliases, code names, or trade or business names
used by any of the foregoing.
16. "Lion Capital" means Lion Capital Management and all present and fonner
subsidiaries, affiliates, predecessors, successors, officers, directors, agents,
employees, consultants, shareholders, partnerships, and any general and limited
partners thereof, any entities acquired by or merged with Lion Capital Management,
Ltd. in the Relevant Period, and any aliases, code names, or trade or business names
used by any of the foregoing.
17. "Document" shall include, but is not limited to, any written, printed, or typed matter
including, but not limited to all drans and copies bearing notations or marks not
found in the original, letters and correspondence, interoffice communications, slips,
tickets, records, worksheets, financial records, accounting documents, bookkeeping
documents, memoranda, repolis, manuals, telephone logs, telegrams, facsimiles,
messages of any type, telephone messages, voice mails, tape recordings, notices,
instructions, minutes, summaries, notes of meetings, file folder markings, and any
other organizational indicia, purchase orders, infonnation recorded by photof,'I'aphic
process, including microfilm and microfiche, computer printouts, spreadsheets, and
other electronically stored infonnation, including but not limited to writings,
drawings, graphs, charts, photographs, sound recordings, images, and other data or
data compilations that are stored in any medium from which infonnation can be
retrieved, obtaincd, manipulated, or translated.
18. "Communication" means any corrcspondence, contact, discussion, e-mail, instant
message, text message, voicemail or any other kind of oral or written exchange or
transmission ofinfonnation (in the fClrIll of facts, ideas, inquiries, or otherwise) and
any response thereto betwecn two or more persons or entities, including, without
limitation, all telephone conversations, face-to-face meetings or conversations,
internal or extemal discussions, or exchanges of a document or documents.

Page 115 of 178

EXHIBIT B, pg. 12 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 12 of 74 PageID 84

Servergy, Inc.
Subpoena Attachment

Page 3

19. As used in this attachment, a communication or document "related," or that
"relatc(s)" to any given subject means any communication or document that
constitutes, contains, embodies, evidences, reflects, identifies, states, refers to, deals
with, bears upon, or is in any way pertinent to that subject, including without
limitation, documents concerning the preparation of other documents.
20. As used in this attachment, the ternlS "include" or "including" denotes "including, but
not limited to."
21. To the extent necessary to bring within the scope of this subpoena any infilDllation or
documents that might otherwise be construed to be outside its scope:
a.
b.
c.
d.
B.

the word "or" means "and/or";
the word "and" means "and/or";
the functional words "each," "every," "any," and "all" shall each be
deemed to include each of the other functional words;
the singular includes the plural and the plural includes the singular.

Instructions
1.

Unless otherwise specified, the subpoena calls for production of the original
documents and all copies and drafts of same. Documents responsive to this
subpoena may be in electronic or paper fODll. Electronic documents such as email
should be produced in accordance with the attached document entitled SEC Data
Delivery Standards. All electronic documents responsive to the document
subpoena, including all metadata, should also be produced in their nativc software
fODllat.

2.

For documents in paper format, you may send the originals, or, if you prefer, you
may send copies of the originals. The Commission cannot reimburse you for the
copying costs. If you are sending copies, the staff requests that you scan (rather
than photocopy) hard copy documents and produce them in an electronic fonllat
consistent with the SEC Data Delivery Standards. Altematively, you may send us
photocopies of the documents in paper fODllat. If you choose to send copies, you
must secure and retain the originals and store them in a safe place. The staff may
latcr request or require that you produce the originals.

3.

Whether you scan or photocopy documents, the copies must be identical to the
originals, including even faint marks or print. Also, please note that if copics of a
document differ in any way, they arc considered separate documents and you
must send each one. For example, if you have two copies of the same letter, but
only one of them has handwritten notes on it, you must send both the clean copy
and the one with notes.

4.

In producing a photocopy of an original document that contains post-it(s),
notation flag(s). or other removable markings or attachments which may conceal
all or a portion of the markings contained in the original document, photocopies

Page 116 of 178

EXHIBIT B, pg. 13 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 13 of 74 PageID 85

Servergy, Inc.
Subpoena Attachment
Page 4

of the original document both with and without the relevant post-it(s), notation
flag(s), or removable markings or attachments should be produced.
5.

Documents should be produced as they are kept in the ordinary course of business
or be organized and labeled to correspond with the categories in this request. In
that regard, documents should be produced in a unitized manner, i.e., delineated
with staples or paper clips to identify the document boundaries.

6.

Documents should be labeled with sequential numbering (bates-stamped).

7.

You must produce all documents created during, or conceming, the period
January I, 2009 to the present, unless otherwise specified.

8.

The scope of any given request should not be limited or narrowed based on the
fact that it calls for documents that are responsive to another request.

9.

You are not required to produce exact duplicates of any documents that have been
previously produced to the Securities and Exchange Commission staffin
connection with this matter. If you are not producing documents based upon a
prior production, please identify the responsive documents that were previously
produced.

10.

This subpoena covers all documents in or subject to your possession, custody or
control, including all documents that are not in your immediate possession but
that you have the effective ability tD obtain, that are responsive, in whole or in
part, to any Dfthe individual requests set f<Jrth below. If, for any reasonincluding a claim of attorney-client privilege - you dD not produce something
called for by the request, you should submit a list of what you are not producing.
The list should describe each item separately, noting:
a.
b.
c.
d.
c.
f.
g.
h.
1.

its author(s);
its date;
its subject matter;
the name of the person who has the item now, or the last person known to
have it;
the names of everyone who ever had the item or a copy of it, and the
names of everyone who was told the item's contents;
the basis upon whieh you arc not producing the responsive document;
the specific request in the subpDena to which the dDcument relates;
the attomey(s) and the c1ient(s) involved; and
in the case ofthe work product doctrinc, the litigation tix which the
document was prepared in anticipation.

11.

If documents responsive to this subpoena no longer exist because they have been
lost, discarded, or otherwise destroyed, you should identify such documents and
give the date on which they were lost, discarded or destroyed.

12.

No a!,'feement by the Securities and Exchange Commission or its stafl purporting

Page 117 of 178

EXHIBIT B, pg. 14 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 14 of 74 PageID 86

Servergy, Inc.
Subpoena Attachment
Page 5

to modify, limit, or otherwise vary this subpoena or attachment, is binding on the
Commission or its statTunless confinned or acknowledged in writing by the
Commission or its stafT.

C.

Documents to be Produced
1. All pre-orders, including pre-orders submitted through Servergy's website.
2. All calendars, including Google electronic calendars, maintained by Bill Mapp, Lance
Smith, Wade Cramer, Jack Smith, Vihar Rai, Michael Holder, Roger Tannery and
William Mapp.
3. All employment agreements.
4. All payroll records maintained through lnsperity.
5. All allocation tables for the pre-production units manufactured by Interphase.
6. All allocation tables for the production units assembled by Avnet.
7. All documents and communications related to Servcrgy's claim that it received an order
from Amazon.
8. All documents and communications related to Servergy's claim that it received an order
from Freescale.
9. All documents and communications related to perfonnance feedback from third-parties
that tested the CTS-l 000.
10. All documents and communications relatcd to Lion Capital's offer to provide Servergy
funding.
11. All documents and communications relatcd to the Data Consortium Group.
12. All documents and communications related to Roger Klotz's loan of$50,000 to Servergy.
13. All American Airlines Center suite attendance logs.
14. All employee manuals.
15. All consulting agreements.
16. All documents and communications related to A vnet's purchase of CTS-l 000 units.
17. All documents and communications related to Scrvergy's application and/or approval for
third-party partncrship programs.

Page 118 of 178

EXHIBIT B, pg. 15 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 15 of 74 PageID 87

Servergy, Inc.
Subpoena Attachment
Page 6

18. All documents and communications related to Robert McGann. including all documents
and communications related to investors Robert McGann brought to Servergy.
19. All Investor Questionnaires and/or Confidential Representative Questionnaires signed by
investors that Robert McGann brought to Servergy.

Page 119 of 178

EXHIBIT B, pg. 16 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 16 of 74 PageID 88

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Supplemental Information for Persons Requested to Supply
Information Voluntarily or Directed to Supply Information
Pursuant to a Commission Subpoena
A. False Statements and Documents
Section 1001 of Title 18 of the United States Code provides as follows:
[W]hoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the
Government of the United States, knowingly and wilJfully~·
(1) falsifies, conceals, or covers up by any trick, scheme, or device a material fact;
(2) makes any materially false, fictitious, or fraudulent statement or representation: or
(3) makes or uses any false writing or document knowing the same to contain any materially false,
fictitious, or fraudulent statement or entry;
shall be fined under this title, imprisoned not more than 5 years. . or both.

B. Testimony
If your testimony is taken, you should be aware of the following:

Record. Your testimony will be transcribed by a reporter. If you desire to go off the record, please indicate this to
the Commission employee taking your testimony, who will determine whether to grant your request. The reporter
will not go off the record at your, or your counsel's, direction.
2.

Counsel. You have the right to be accompanied, represented and advised by counsel of your choice. Your
counsel may advise you before, during and after your testimony: question you briefly at the conclusion of your
testimony to clarify any of the answers you give during testimony; and make summary notes during your
testimony solely for your use. If you are accompanied by counsel, you may consult privately.

If you are not accompanied by counsel, please advise the Commission employee taking your testimony if, during the
testimony, you desire to be accompanied, represented and advised by counsel. Your testimony will be adjourned
once to afford you the opportunity to arrange to be so accompanied, represented or advised.
You may be represented by counsel who also represents other persons involved in the Commission's investigation.
This multiple representation, however, presents a potential conflict of interest if one client's interests are or may be
adverse to another's. If you are represented by counsel who also represents other persons involved in the
investigation, the Commission will assume that you and counsel have discussed and resolved all issues concerning
possible conflicts of interest The choice of counsel, and the responsibility for that choice, is yours.

3.

Transcript Availability. Rule 6 of the Commission's Rules Relating to Investigations, 17 CFR 203.6, states:
A person who has submitted documentary evidence or testimony in a formal investigative proceeding
shall be entitled, upon written request, to procure a copy of his documentary evidence or a transcript of
his testimony on payment of the appropriate fees: Provided, however, That in a nonpublic formal
investigative proceeding the Commission may for good cause deny such request. In any event, any
witness, upon proper identification, shall have the right to inspect the official transcript of the witness'
own testimony.

If you wish to purchase a copy of the transcript of your testimony, the reporter will provide you with a copy of the
appropriate form. Persons requested to supply information voluntarily will be allowed the rights provided by this rule

4.

Perjury. Section 1621 of Title 18 of the United States Code provides as follows:
Whoever-(1) having taken an oath before a competent tribunal, officer, or person, in any case in which a law of
the United States authorizes an oath to be administered, that he will testify, declare, depose, or certify
truly, or that any written testimony, declaration, deposition, or certificate by him subscribed, is true,
willfully and contrary to such oath states or subscribes any material matter which he does not believe to
be true; or

SEC 1662 (08-13)

Page 120 of 178

EXHIBIT B, pg. 17 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 17 of 74 PageID 89

(2) in any declaration, certificate, verification, or statement under penalty of pe~ury as permitted under
section 1746 of title 28, United States Code, willfully subscribes as true any material matter which he
does not believe to be true;
is gulJty of pe~ury and shall, except as otherwise expressly provided by law, be fined under this title or
imprisoned not more than five years, or both.

5. Fifth Amendment and Voluntary Testimony. Information you give may be used against you in any federal, state,
local or foreign administrative, civil or criminal proceed·lng brought by the Commission or any other agency.
You may refuse, in accordance with the rights guaranteed to you by the Fifth Amendment to the Constitution of the
United States, to give any information that may tend to incriminate you.
If your testimony is not pursuant to subpoena, your appearance to testify is voluntary, you need not answer any
question, and you may leave whenever you wish. Your cooperation is, however, appreciated.

6. Formal Order Availability. If the Commission has issued a formal order of investigation, it will be shown to you
during your testimony, at your request. If you desire a copy of the formal order, please make your request in writing.

C. Submissions and Settlements
Rule 5(c) ofthe Commission's Rules on Informal and Other Procedures, 17 CFR 202.5(c), states:
Persons who become involved in. . investigations may, on their own initiative, submit a written
statement to the Commission setting forth their interests and position in regard to the subject matter
of the investigation, Upon request, the staff, in its discretion, may advise such persons of the
general nature of the investigation, including the indicated violations as they pertain to them, and
the amount of time that may be available for preparing and submitting a statement prior to the
presentation of a staff recommendation to the Commission for the commencement of an
administrative or injunction proceeding. Submissions by interested persons should be forwarded to
the appropriate Division Director or Regional Director with a copy to the staff members conducting
the investigation and should be clearly referenced to the specific investigation to which they relate.
In the event a recommendation for the commencement of an enforcement proceeding is presented
by the staff, any submissions by interested persons will be forwarded to the Commission in
conjunction with the staff memorandum.
The staff of the Commission routinely seeks to introduce submissions made pursuant to Rule 5(c) as evidence in
Commission enforcement proceedings, when the staff deems appropriate.
Rule 5(f) of the Commission's Rules on Informal and Other Procedures, 17 CFR 2025(D, states:
In the course of the Commission's investigations, civil lawsuits, and administrative proceedings, the
staff, with appropriate authorization, may discuss with persons involved the disposition of such
matters by consent, by settlement, or in some other manner. It is the policy of the Commission,
however, that the disposition of any such matter may not, expressly or impliedly, extend to any
criminal charges that have been, or may be, brought against any such person or any
recommendation with respect thereto. Accordingly, any person involved in an enforcement matter
before the Commission who consents, or agrees to consent, to any judgment or order does so
solely for the purpose of resoiving the claims against him in that investigative, civil, or
administrative matter and not for the purpose of resolving any criminal charges that have been, or
might be, brought against him. This policy reflects the fact that neither the Commission nor its staff
has the authority or responsibility for instituting, conducting, settling, or otherwise disposing of
criminal proceedings. That authority and responsibility are vested in the Attorney General and
representatives of the Dep?rtment of Justice.

D. Freedom of Information Act
The Freedom of Information Act, 5 U.S.C. 552 (the "FOIA"), generally provides for disclosure of information to the
public. Rule 83 of the Commission's Rules on Information and Requests, 17 CFR 200.83, provides a procedure by
which a person can make a written request that information submitted to the Commission not be disclosed under the
FOrA. That rule states that no determination as to the validity of such a request will be made until a request for
disclosure of the information under the FOIA 's received. Accordingly, no response to a request that information not
be disclosed under the ForA is necessary or will be given until a request for disclosure under the FOIA is received. If
you desire an acknowledgment of receipt of your written request that information not be disclosed under the FOIA,
please provide a duplicate request, together with a stamped, self addressed envelope.

2

Page 121 of 178

EXHIBIT B, pg. 18 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 18 of 74 PageID 90

E. Authority for Solicitation of Information
Persons Directed to Supply Information Pursuant to Subpoena. The authority for requiring production of information
is set forth in the subpoena. Disclosure of the information to the Commission is mandatory, subject to the valid
assertion of any legal right or privilege you might have.
Persons Requested to Supply Information Voluntarily One or more of the following provisions authorizes the
Commission to solicit the information requested: Sections 19 and/or 20 of the Securities Act of 1933; Section 21 of
the Securities Exchange Act of 1934; Section 321 of the Trust Indenture Act of 1939; Section 42 of the Investment
Company Act of 1940; Section 209 of the Investment Advisers Act of 1940; and 17 CFR 202.5. Disclosure of the
requested information to the Commission is voluntary on your part.
F. Effect 01 Not Supptying Inloomation

Persons Directed to Supply Information Pursuant to Subpoena. If you fail to comply with the subpoena, the
Commission may seek a court order requiring you to do so. If such an order is obtained and you thereafter fail to
supply the information, you may be subject to civil and/or criminal sanctions for contempt of court. In add"ltion, if the
subpoena was issued pursuant to the Securities Exchange Act of 1934, the Investment Company Act of 1940, and/or
the Investment Advisers Act of 1940, and if you, without just cause, fail or refuse to attend and testify, or to answer
any lawful inquiry, or to produce books, papers, correspondence, memoranda, and other records in compliance with
the subpoena, you may be found guilty of a misdemeanor and fined not more than $1,000 or imprisoned for a term of
not more than one year, or both.
Persons Requested to Supply Information Voluntarily There are no direct sanctions and thus no direct effects for
failing to provide aU or any part of the requested information.

G. Principal Uses of Information
The Commission's principal purpose in solidting the information is to gather facts in order to determine whether any
person has violated, is violating, or is about to violate any provision of the federal securities laws or rules for which
the Commission has enforcement authority, such as rules of securities exchanges and the rules of the Municipal
Securities Rulemaking Board. Facts developed may, however, constitute violations of other laws or rules. Information
provided may be used in Commission and other agency enforcement proceedings. Unless the Commission or its staff
explicitly agrees to the contrary in writing, you should not assume that the Commission or its staff acquiesces in,
accedes to, or concurs or agrees with, any position, condition, request, reservation of right, understanding, or any
other statement that purports, or may be deemed, to be or to reflect a limitation upon the Commission's receipt, use,
dispOSition, transfer, or retention, in accordance with applicable law, of information provided.

H. Routine Uses of Information
The Commission often makes its files available to other governmental agencies, particularly Un'lted States Attorneys
and state prosecutors. There is a likelihood that information supplied by you will be made available to such agencies
where appropriate. Whether or not the Commission makes its files available to other governmental agencies is, in
general, a confidential matter between the Commission and such other governmental agencies.
Set forth below is a list of the routine uses which may be made of the information furnished.
1. To appropriate agencies, entities, and persons when (a) it is suspected or confirmed that the security or
confidentiality of information in the system of records has been compromised; (b) the SEC has determined that, as a
result of the suspected or confirmed compromise, there is a risk of harm to economic or property interests, identity
theft or fraud, or hann to the security or integrity of this system or other systems or programs (whether maintained by
the SEC or another agency or entity) that rely upon the compromised information; and (c) the disclosure made to
such agencies, entities, and persons is reasonably necessary to assist in connection with the SEC's efforts to
respond to the suspected or confirmed compromise and prevent, minimize, or remedy such harm.
2. To other federal, state, local, or foreign law enforcement agencies; securities self~regulatory organizations; and
foreign financial regulatory authorities to assist in or coordinate regulatory or law enforcement activities with the SEC.
3. To national securities exchanges and national securities associations that are registered with the SEC, the
Municipal Securities Rulemaking Board; the Securities Investor Protection Corporation; the Public Company
Accounting Oversight Board; the federal banking authorities, induding, but not limited to, the Board of Governors of
the Federal Reserve System, the Comptroller of the Currency, and the Federal Oeposit Insurance Corporation; state
securities regulatory agencies or organizatior.s; or regulatory authorities of a foreign government in connection with
their regulatory or enforcement responsibilities.

3

Page 122 of 178

EXHIBIT B, pg. 19 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 19 of 74 PageID 91

4. By SEC personnel for purposes of investigating possible violations of, or to conduct investigations authorized by,
the federal securities laws.
5. In any proceeding where the federal securities laws are in issue or in which the Commission, or past or present
members of its staff, is a party or otherwise involved in an official capacity.
6. In connection with proceedings by the Commission pursuant to Rule 102(e) of its Rules of Practice, 17 CFR
201.102(e).
7. To a bar association, state accountancy board, or other federal, state, local, or foreign licensing or oversight
authority; or professional association or self-regulatory authority to the extent that it performs similar functions
(including the Public Company Accounting Oversight Board) for investigations or possible discipl"rnary action.
8. To a federal, state, local, tribal, foreign, or international agency, if necessary to obtain information relevant to the
SEC's decision concerning the hiring or retention of an employee; the issuance of a security clearance; the letting of
a contract; or the issuance of a license, grant, or other benefit.
9. To a federal, state, local, tribal, foreign, or international agency in response to its request for information
concerning the hiring or retention of an employee; the issuance of a security clearance; the reporting of an
investigation of an employee; the letting of a contract; or the issuance of a license, grant, or other benefit by the
requesting agency, to the extent that the information is relevant and necessary to the requesting agency's decision on
the matter.
10, To produce summary descriptive statistics and analytical studies, as a data source for management information,
in support of the function for which the records are collected and maintained or for related personnel management
functions or manpower studies; may also be used to respond to general requests for statistical information (without
personal identification of individuals) under the Freedom of Information Act.
11. To any trustee, receiver, master, special counsel, or other individual or entity that is apPOinted by a court of
competent jurisdiction, or as a result of an agreement between the parties in connection with litigation or
administrative proceedings involving allegations of violations of the federal securities laws (as defined in section
3(a)(47) of the Securities Exchange Act of 1934, 15 U.SC. 78c(a)(47)) or pursuant to the Commission's Rules of
Practice, 17 CFR 201.100 - 900 orthe Commission's Rules of Fair Fund and Disgorgement Plans, 17 CFR
201.1100-1106, or otherwise, where such trustee, receiver, master, special counsel, or other individual or entity is
specifically designated to perform particular functions with respect to, or as a result of, the pending action or
proceeding or in connection with the administration and enforcement by the Commission of the federal securities laws
or the Commission's Rules of Practice or the Rules of Fair Fund and Disgorgement Plans.
12. To any persons during the course of any inquiry, examination, or investigation conducted by the SEC's staff, or in
connection with civil litigation, if the staff has reason to believe that the person to whom the record is disclosed may
have further information about the matters related therein, and those matters appeared to be relevant at the time to
the subject matter of the inquiry.
13. To interns, grantees, experts, contractors, and others who have been engaged by the Commission to assist in
the peliormance of a service related to this system of records and who need access to the records for the purpose of
assisting the Commission in the efficient administration of its programs, including by performing clerical,
stenographic, or data analysis functions, or by reproduction of records by electronic or other means. Recipients of
these records shall be required to comply with the requirements of the Privacy Act of 1974, as amended, 5 U.S.C.
552a.
14. In reports published by the Commission pursuant to authority granted in the federal securities laws (as such term
is defined in section 3(a)(47) of the Securities Exchange Act of 1934, 15 U.S.C. 78c(a)(47)), which authority shall
include, but not be limited to, section 21(a) of the Securities Exchange Act of 1934, 15 U.S.C. 78u(a)).
15. To members of advisory committees thaI are created by the Commission or by Congress to render advice and
recommendations to the Commission or to Congress, to be used solely in connection with their official designated
functions.
16. To any person who is or has agreed to be subject to the Commission's Rules of Conduct, 17 CFR 200.735-1 to
200.735-18, and who assists in the investigation by the Commission of possible violations of the federal securities
laws (as such term is defined in section 3(a)(47) of the Securities Exchange Act of 1934, 15 US.C. 78c(a)(47)), in the
preparation or conduct of enforcement actions brought by the Commission for such violations, or otherwise in
connection with the Commission's enforcement or regulatory functions under the federal securities laws.

4

Page 123 of 178

EXHIBIT B, pg. 20 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 20 of 74 PageID 92

17. To a Congressional office from the record of an individual in response to an inquiry from the Congressional office
made at the request of that individual.
18. To members of Congress, the press, and the public in response to inquiries relating to particular Registrants and
their activities, and other matters under the Commission's jurisdiction
19. To prepare and publish information relating to violations of the federal securities laws as provided in 15 U.S.C.
78c(a)(47)), as amended.
20. To respond to subpoenas in any litigation or other proceeding.
21. To a trustee in bankruptcy,
22. To any governmental agency, governmental or private collection agent, consumer reporting agency or
commercial reporting agency, governmental or private employer of a debtor, or any other person, for collection,
including coJ!ection by administrative offset, federal salary offset, tax refund offset, or administrative wage
garnishment, of amounts owed as a result of Commission civil or administrative proceedings.

*****
Small Business Owners: The SEC always welcomes comments on how it can better assist small businesses. If you
have comments about the SEC's enforcement of the securities laws, please contact the Office of Chief Counsel in the
SEC's Division of Enforcement at 202-551-4933 or the SEC's Small Business Ombudsman at 202-551-3460. If you
would prefer to comment to someone outside of the SEC, you can contact the Small Business Regulatory
Enforcement Ombudsman at http://www.sba.gov/ombudsman or toll free at 888~REG~FAIR. The Ombudsman's office
receives comments from small businesses and annually evaluates federal agency enforcement activities for their
responsiveness to the special needs of small business.

5

Page 124 of 178

EXHIBIT B, pg. 21 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 21 of 74 PageID 93

u.s. Securities and Exchange Commission
Data Delivery Standards

The following outlines the technical requirements for producing scanned paper collections, email and electronic document..'
native file collections to the Securities and Exchange Commission. The SEC uses Recommindx .-lxce/eraf/! v4.5 software to
search, reviev,: and retrieve documents produced to us in electronic format. Any proposed production in a formal other than
those identified below, the proposed use of PrediCliv(! Coding, compUler-assisred redcH' or lI.!cl1fI%?,),-assisted review (TAR).
or the use of de·duplication during the processing of documents, must be discussed with and approved by the legal and
technical staff of the Division of Enforcement (ENF) and the methodology must be disclosed in the cover letter. We appreciate
your efforts in assisting us by preparing data in a format that will enable our 5tatfto use the data efficiently.

General Instructions.

......... 1

Delivery Formats

1.

.................... ,........... ,.. ,2

.. 2

Structured Data - ('oncorduHce® Format
I, Images ................. .

.......... 2
.. ... 2

2. Concordance Image® Cross-Reference File ..

.. .........'

3. Concordance® Data File ..

4. Text .....

......... 6

5. Linked Native Files .......... ,... .

.. ...... 6

II. Native File Production.

.. .... 6

Ill. Audio Files .............. ..

.. .. 6

............................... 7

IV. Video Files
V.

... 7

Electronic Trade and Bank Records

.7

VI. Electronic Phone Records ................. .

General Instructions
1, A cover letter should be included with each production. Ihis letter :HC\'?" be imaged and provided as fhe firsl I'fxord
in fhe loadfile.
The following information should be included in the letter:
a. List of e~ch piece of media (hard drive, thumb drive, DVD or CD) included in the production by the unique
number assigned to it, and readily apparent on thc physical mcdia.
b. List of custodians, identifying:
I) The Bates range (and any gaps therein) for each custodian
2) Total number of records for each custodian
3) Total number of images for each custodian
4) Total number of native files for each custodian
c. List of fields in the order in which they are listed in the data file.
d. Time zone in which emails were standardized during conversion (email collections only).
2. Documents created or stored electronically )'v1UST be produced in their original electronic format. not printed to paper
or PDF.
3, Data can be produced on CD, DVD or hard drive; use thl! llIr!dia requiring the least number o/deliverables.
4. Label all media with the follm.ving:
a. Case number
b. Production date
c. Bates range
d. Disk number (I of X). if applicable

(Revised 01117/2013)

. I .

Page 125 of 178

EXHIBIT B, pg. 22 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 22 of 74 PageID 94
U.S. Securities and Exchange Commission
Data Delivery Standards

5.
6.
7.
8.

Organize productions by custodian, unless otherwise instructed. All documents from an individual custodian should
be confined to a single load file.
All productions should be checked and produced free of computer viruses.
All produced media should be encrypted.
Passwords for documents, files, compressed archives and encrypted media should be provided separately either via
email or in a separate cover letter from the data.

Delivery Formats
I.

Structured Data - Concordance® Format
The SEC prefers that all data be produced in structured format prepared for Concordance®. AI! scanned paper, email and
native file collections should be converted I processed to TIFF files, Bates numbered, and include fully searchable text.
Additionally, email and native file collections should include linked native files.
Bates numbering documents:
The Bates number must be a unique, consistently formatted identifier, i.e .. an alpha prefix along with a fixed length
number for EACH custodian, i.e., ABCOOOOOO I. This format MliST remain consistent across all production numbers for
each custodian. The number of digits in the numeric portion of the format should not change in subsequent productions,
nor should spaces. hyphens, or other separators be added or deleted.
The following describes the specifications for producing image-based productions to the SEC and the load files required
for Concordance® and Concordance Image'JD.

J.

Images
a. Images should be single-page, Group IV TIFF files, scanned at 300 dpi.
b. File names cannot contain embedded spaces.
c. Bates numbers should be endorsed on the lower right corner of all images.
d. The number of TIFF files per folder should not exceed 500 files.
e. Rendering to images PowerPoint, AUTOCADI photographs and Excel files:
I) PowerPoint: All pages of the file should be scanned in full slide image format, with any speaker notes
following the appropriate slide image.
2) AUTOCADI photographs: If possible, files should be scanned to single page JPEG (JPG) file format.
3) Excel: TIFF images of spreadsheets are not useful for review purposes: because the imaging process can
often generate thousands of pages per file, a placeholder image, named by the IMAGEID of the file, may be
used instead.

2.

Concordance Imagew Cross-Reference File
The image cross-reference file is needed to link the images to the database. It is a comma-delimited file consisting of
seven fields per line. There must be a line in the cross-reference file for ever), image in the database.
The format is as follows:
Image!D, Volume Label, !mageFile Path, DocumenlBreak, FolderBreak, BoxBreak, PageCount

!mage!D:

The unique designation that Concordance® and Concordance !mage® use to identify an image.
Note: This image!D key must be a unique andjixed length number. This number will be used h1 the
.DAT file as the !mage!D field that links the database to the images. The format of this image key
mllst be consistent across all productions. We recommend that the format be a 7 digit number to
allow for the possible increase in the size of a production.

Volume Label:

Optional

ImageFilePath:

The full path to the image file.

DocumentBreak: The letter "Y" denotes the first page of a document. If this field is blank, then the page is not the
first page of a document.
FolderBreak:

Leave empty

BoxBreak:

Leave empty

PageCollnt:

Optional

(Revised 011l7/2013)

-2-

Page 126 of 178

EXHIBIT B, pg. 23 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 23 of 74 PageID 95
U.S. Securities and Exchange Commission
Data Delivery Standards

Sample
1MGOOOOOO 1" E: \00 1\1 M G0000001. TI F, Y",
1MG0000002" E: \001 \1 MG0000002 .TI F""
IMG0000003" E: \00 1\1 MG0000003. TI F""
1MG0000004" E: \001 \1 MG0000003. TIF, Y",
1MGOOOOOOS" E:\001\1 MG0000003. TI F, Y",
1MG 0000006" E: \001\1 MG0000003. TI F""

3.

Concordunce® Data File
The data file (.DAT) contains all of the fie/ded information that will be loaded into the Concordance@database.
a.
b.

The first line of the .DAT file must be a header row identifying the field names.
The .DAT file must use the following COl1cordance® default delimiters:
Comma
91
ASCII character (020)
Quote
p
ASCII character (254)
Newline
®
ASCII character (174)

c.
d.
e.

Date fields should be provided in the format: mm/dd/yyyy
All attachments should sequentially follo\v the parent document/email.
All metadata associated with email, audio files, and native electronic document collections must be produced (see
pages 4-5).

f.

The .DAT file for scanned paper collections must contain, at a minimum, the following fields:
I) FIRSTBATES: Beginning Bates number
2) LASTBATES:
Ending Bates number
3) IMAGElD:
Image Key field
4) CUSTODIAN: Individual from whom the document originated
5) OCRTEXT:
Optical Character Recognition (file path, or text)
Sample of .DAT file (when text files are provided separately)
I>FIRSTBATESl>~I>LASTBATESI>~pIYAGEIDl>~I>CUSTODIAlIl>~l>OCRTD(!1>
pPCOOOOOOOlp~pPC00000002p~pIMGOOOOOOlP~pSmith, Johnp~pE:\IEX!\PC00000001.rx!p
pPCOOOoooo3p'ilpPCOOOOO 003p'ilpIMGOOOOO o3p'ilpSmi th, Johnp'flpE: \ TEXI\FCOOOOOOQ3. TXTp
pF~00000004p~ppcoooooOOSp'flpIMG0000004p~pSmith,

Johnp'ilpE:\IEXT\PC00000004.1XIp

Sample of .OAT file (with text)
I> FIRSTBAT ESI> ~j:·LASTBAT E51> ~l> IHAGEI Dp ~jA."UST OD IAN!> ~I>OCRTEXT P
PPCOOOOOOOlp'flPPC0000000.2p'ilpI1!30000001pl1pSmlth, Johnp'flpH* IMGOOOODOl u"Mllhe wcrld c:'

inve.:n:;inq ~s !asc~nating and cOlrlplex, and it can be very fruitful. But ur.llke the banking
world, ,",'here deposits are guaranteed by the federal -government, 3tocks, bonds and other
securities can lose value. There a::-e no guarantees. That.'s why in\'est~ng i3 not Ii tlpectatcr
3port. By tar the best .... ay fer ~nve3tortl t.o prOtect the :r,cne~' they put lnte the tleCuritie3
markets 13 to do research and ask que.3tlons.~ **'" IMGQ000002 **·.wThe la .... s anj rules that
govern the securit;ies industry in the Unlted States derive frem a sur,ple and
straightforward concept: all investors, whether large institutiona or private individuals,
should have acc!!'.:!.3 'to certain ba.3ic fact3 about. an lnVe.3trr:ent prier to bUl'ing it, and 30
long d.3 they hold it-. To achleve this, the SEC re~ul::e3 publlC cOIr:pan~es t.o disclose
meaning!ul financial and other ~nfcrmation to t.he public. Ihu prcvldes a corn.cn pocl 0:
l'11cwledge for all ~nve:;tQr9 to use to Judge fer themselves whether to buy, Bell, or hold a
pa::t.icular securi~y. Onl:'t' through the steady flG'" of timel:!!', corr:p::ehensive, and accurate
infc:=Jrdltlcn can people make 30u:1d lnvestrnent dec1310n3.p
pPC00000003pllPPCOOOOO 003pllpTMGOOOOO 03pl1pSmi th, Jchnp'flp·· "'1M-3-0000 003 •• ·~Ihe r esul t 0:' th13
lnformat~on flow is a far more actlye, effiCient, and transparent ca~}1tal market that
facili tates the capital formation .:'lO ll!portant to our naticn' 09 e conm!,y. p
PPCOOOOOoJ04p'ilPPC00000005p'flpIY.G0000004p'flpSrruCh, Johnp'llp *H IHG0000004 "*~To lnsure that
this obJective is always being met, the SEC continually works wi th all maJor market
partiClpant!!, including e;3pecially the inve.:rtors in eu:: securit-ie.:! market.:!, to l1sten te
their concerns and to learn froIt> thelr expe!'ience.M' ... 1MGOOOOOOS '**~Ihe SEC oversee.:r
the J.::er participants ~n the .:recuritie3 world, including 3eCUrltleS exchanges, .:recuritie.:r
brokers and dealers, lnvestrr~~t adviaors, and mutual funds. Here the SEC l~ concerned
primaril~f ..·ith promoting the disclosure of important ltarket-related in!ormation,
maintalning fair deal lng, a~d prctectlng against fraud.p

(Revised 01117/2013)

-3 -

Page 127 of 178

EXHIBIT B, pg. 24 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 24 of 74 PageID 96
U.S. Securities and Exchange Commission
Data Delivery Standards

The text and metadata of Email and the attachments. and native file document collections should be extracted and
provided in a .DA T file using the field definition and formatting described below:

Field Name

F1RSTBATES
LASTBATES

Sarnole Data
EDCOOOOOOI
EDCOOOOOOI

Descrintion
First Bates number of native file document/email
Last Bates number of native file document/email

"The LASTBATES field should be populated
ATTACHRANGE

EDCOOOOOO I - EDCOOOOO 15

BEGATTACH
ENDATTACH
PARENT_BATES

EDCOOOOOOI
EDCOOOOOl5
EDCOOOOOOI

for simde oalle documents/emails.
Bates number of the first page of the parent
document to the Bates number of the last page of the
last attachment "child" document
First Bates number of attachment range
Last Bates number of attachment range
First Bates number of parent document/Email

**This PARENTBA TES field should be populated

CHILD_BATES

EDC0000002: EDCOOOOO 14

in each record representing an attachment "child"
document
First Bates number of "child" attachment(s); can be
more than one Bates number listed depending on the
number of attachments

**The CHILD_BATES field should be populated in
each record representing a "parent" document
Email: mailbox where the email resided
Native: Individual from whom the document
originated
Email: Sender
Native: Author(s) of document
**semj~colon should be used to separate multiple
Entries

CUSTODIAN

Smith, John

FROM

John Smith

TO

Coffman, Janice; LeeW

Recipient(s)

[mailto:LeeW@MSN.com]

**scmi-colon should be used to separate multiple
Entries
Carbon copy recipient(s)
**semi~colon should be used to separate multiple
Entries
Blind carbon copy recipient(s)
**semi-colon should be used to separate multiple
Entries
Email: Subject line of the email
Native: Title of document (ifavailable)
Email: Date the email was sent

CC

Frank Thompson [mailto:

frank_ Thompson@cdt.com]
BCC

John Cain

SUBJECT

Board Meeting Minutes

DATE_SENT

10112/2010

TIME_SENT

07:05 PM

Email: Time the email was sent
Native: (empty)
**This data must be a separate field and cannot be

LINK

D:IOO I I EDCOOOOOO I.msg

Hyperlink to the email or native file document
**The linked file must be named per the

MIMEJYPE

MSG

FILE_EXTEN

MSG

The content type of an Email or native file document
as identified/extracted from the header
The file type extension representing the Email or
native file document; will vary depending on the
email format

AUTHOR

John Smith

Native: (emDty)

combined with the DATE SENT field

FIRSTBATES number

Email: (empty)
Native: Author of the document

DATE_CREATED

10110/2010

Email: (empty)
N alive: Date the document was created

(Revised 01117/2013)

Page 128 of 178

EXHIBIT B, pg. 25 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 25 of 74 PageID 97
U,S, Securities and Exchange Commission
Data Delivery Standards

~_~

__

~~~~

__

,_~,~,

__

."w~~~~·~"~.

__ "___ .

_,_.,_~.~_,~

__

~~_~_"~

__

TIME_CREATED

10:25 AM

DATE MOD

10112/20 I 0

TIME_MOD

07:00 PM

DATE_ACCESSD

10112/20 I 0

TIME_ACCESSD

07:00 PM

PRINTED_DATE

10112/2010

FILE SIZE
PGCOUNT
PATH

5,952
I
J :ISharedlSm ithJIOctober
Agenda.doc

INTFILEPATH

Personal Folders\Deleted
Jtems\Board Meeting
Minutes.msg
<000805c2c7Ib$75977050$cb
8306d IlaiMSN>
dl31dd02c5e6eec4693d9a069
8aff95c
2fcab58712467eab4004583eb
8fb7f89
From: Smith, John
Sent: Tuesday, October 12,
20 I 007:05 PM
To: Coffman, Janice
Subject: Board Meeting
Minutes

INTMSGID
MD5HASH

TEXT

~_V.h_"

__

H"~

.••, _ _ ••• ,,_,,-.,.,_,, _ _ _ ,. _____ .·<>, _ _ _ " ••

__

_.~.

~_

Email: (empty)
Native: Time the document was created
**This data must be a separate field and cannot be
combined with the DATE CREATED field
Email: (empty)
Native: Date the document was last modified
Email: (empty)
Native: Time the document was last modified
**This data must be a separate field and cannot be
combined with the DATE MOD field
Email: (empty)
Native: Date the document was last accessed
Email: (empty)
Native: Time the document was last accessed
**This data must be a separate field and cannot be
combined with the DATE ACCESSD field
Email: (empty)
Native: Date the document was last printed
Size of native file document/email in KB
Number of pages in native file document/email
Email: (empty)
Native: Path where native fi Ie document was stored
including original file name.
Email: original location of email including original
file name.
Native: (empty)
Emaii: Unique Message ID
Native: (empty)
MD5 Hash value of the document.

Extracted text of the native file document/email

Janice:
Attached is a copy of the
September Board Meeting
Minutes and the draft agenda
for October. Please let me
know if you have any
questions,
John Smith
Assistant Director
Information Technology
Phone:(202)555-1111
Faxo (202) 555-1112
Email: jsmith@xyz.com

(Revised 01/17/2013)

-5-

Page 129 of 178

EXHIBIT B, pg. 26 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 26 of 74 PageID 98
U.S. Securities and Exchange Commission
Data Delivery Standards

4.

Text
Searchable text of the entire document must be provided for every record, at the document level.
a.

Extracted text must be provided for all documents that originated in electronic format. The text files should
include page breaks that correspond to the 'pagination' of the image files. Note: Any document in which text
cannot be extracted must be OCR'd, particularly in the case ofPDFs \vithout embedded text.

b.

OCR text must be provided for all documents that originated in hard copy format. A page marker should be
placed at the beginning, or end, of each page of text. e.g. *** IMGOOOOOOI *** whenever possible. The data
surrounded by asterisks is the Concordance® ImagelD .
Sample page markers with OCR text"

***

IMGOOOOOOI

***

The ". . orld of investing is iascinaling and complex. and it can be very fruitful. But unlike the
banking world, v.'here deposits are guaranteed by the federal government. stocks. bonds and other
sccuritil's can lose value. There arlo! no guarantees. That's \\'hy investing is not a spectator sport. By
far the best viay for investors 10 protect thc money they put into th<..· securities markets is to do
research and ask questions.

*** lMG0000002 ***
The lav.'s and rules th.lt govern the securities industry in the United States derive from a simple and
straightfon.vard concept: all investors. \vhcther largc institutions or private individuals. should have
access to certain basic facts about an investment prior 10 buying it and so long as they hold it. To
achieve this, the SEC requires public companit's to disclose meaningful financial and other
information to the public. This provides a common pool ofknowlcdgc for all investors to lISC to
judgL' for themselves whether to buy, sell, or hold a particular sccurity. Only through the steady
tlow of timely, comprehensive, a~d accurate information can people make sound investment
decisions.

5.

II.

III.

c.

For redacted documents, provide the full text for the redacted version.

d.

Delivery
The text can be delivered two ways:
I) As multiwpage ASCII text files with the files named the same as the ImagelD field. Text files can be placed in
a separate folder or included with the .TIF files. The number of files per folder should be limited to 500 files.
2) Included in the .DAT file.

Linked Native Files
Copies of original email and native file documents/attachments must be included for all electronic productions.
a. Native file documents must be named per the FJRSTBATES number.
b. The ful! path of the native file must be provided in the .DA T file for the LINK field.
c. The number of native files per folder should not exceed 500 files.

Native File Production
The SEC will also accept native file productions. The tiles must be produced as they are maintained in the normal course
of business. Data must be organized by custodian named file folders.

Audio Files
Audio files from telephone recording systems must be produced in a format that is playable using Microsoft Windows
Media Player™. Additionally, the call information (metadata) related to each audio recording MUST be provided. The
metadata file must be produced in a delimited text format. Field names must be included in the first row of the text file.
The metadata must include, at a minimum, the following fields:
I)
2)
3)
4)

Caller Name:
Originating Number:
Called Party Name:
Terminating Number:

(Revised 01/17/2013)

Caller's name or account/identification number
Caller's phone number
Called party's name
Called party's phone number
.6.

Page 130 of 178

EXHIBIT B, pg. 27 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 27 of 74 PageID 99
U.S. Securities and Exchange Commission
Data Delivery Standards

5)
6)
7)

IV.

Date:
Time:
Filename:

Date of call
Time ofcal!
Filename of audio file

Video Files
Video files must be produced in a format that is playable using Microsoft Windows Media PlayerTM.

V.

Electronic Trade and Bank Records
When producing electronic trade and bank records, provide the files in one of the following formats:

VI.

I.

MS Excel spreadsheet with header information detailing the field structure. If any special codes exist in the dataset, a
separate document must be provided that details all such codes. Ifdetails of the field structure do not fit in the header.
a separate document must be provided that includes such details.

2.

Delimited text tile with header information detailing the field structure. The preferred delimiter is a vertical bar'T'. If
any special codes exist in the dataset, a separate document must be provided that details all such codes. If details of
the field structure do not fit in the header, a separate document must be provided that includes such details.

Electronic Phone Records
When producing electronic phone records, provide the files in one of the following formats:
l.

MS Excel spreadsheet with header information detailing the field structure. If any special codes exist in the dataset. a
separate document must be provided that details all such codes. Ifdetails of the field structure do not fit in the header,
a separate document must be provided that includes such details. Data must be fomlatted in its native format (i.e.
dates in a date format, numbers in an appropriate numerical format. and numbers with leading zeros as text).

2.

Delimited text file with header information detailing the field structure. The preferred delimiter is a vertical bar ''I''. If
any special codes exist in the dataset, a separate document must be provided that details all such codes. If details of
the field structure do not fit in the header, a separate document must be provided that includes such details.

The metadata must include, at a minimum, the following fields in separate columns:
I) Account Number:
2) Originating Number:
3) Terminating Number:
4) Connection Date:
5) Connection Time:
6) End Time:
7) Elapsed Time:

Caller's telephone account number
Caller's phone number
Called party's phone number
Date of call
Start time of call
End time of call
Duration in minutes of the call

Each field of data must be loaded into a separate column. For example, Connection Date and Connection Time must be
produced in separate columns and not combined into a single column containing both pieces of information. Any fields of
data that are provided in addition to those listed here must also be loaded into separate columns.

(Revised 01117/2013)

-7-

Page 131 of 178

EXHIBIT B, pg. 28 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

UPS CampusShip: Shipment Label

Page 28 of 74 PageID 100

Page 1 of 1

UPS CampusShip: View/Print Label
1. Ensure there are no other shipping or tracking labels attached to your package. Select the
Print button on the print dialog box that appears. Note: If your browser does not support this function
select Print from the File menu to print the label.
2. Fold the printed sheet containing the label at the line so that the entire shipping label is visible.
Place the label on a single side of the package and cover it completely with clear plastic
shipping tape. Do not cover any seams or closures on the package with the label. Place the
label in a UPS Shipping Pouch. If you do not have a pouch, affiX the folded label using clear plastiC
shipping tape over the entire label.
3. GETTING YOUR SHIPMENT TO UPS
UPS locations include the UPS Store®, UPS drop boxes, UPS customer centers, authorized
retail outlets and UPS drivers.
Schedule a same day or future day Pickup to have a UPS driver pickup all your CampusShip
packages.
Hand the package to any UPS driver in your area.
Take your package to any location of The UPS Store®, UPS Drop Box. UPS Customer Center, UPS
Alliances (Office Depot® or Staples®) or Authorized Shipping Outlet near you. Items sent via UPS
Return Services(SM) (including via Ground) are also accepted at Drop Boxes. To find the location
nearest you, please visit the Resources area of CampusShip and select UPS Locations.
Customers with a Daily Pickup
Your driver will pickup your shipment(s) as usual.

FOLD HERE

Vl

::l
o

ci
I~=

N-

:3

Page 132 of 178

EXHIBIT B, pg. 29 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 29 of 74 PageID 101

Squire Patton Boggs (US) LLP
2000 McKinney Avenue
Suite 1700

SQUIREC}
PATTON BOGGS

Dallas, TX 75201

o

+12147581500
F
+12147581550
squirepattonboggs.com

21

S. Cass Weiland

T

+12147561504

cass.weiland@squlrepb.com

July 18, 2014
Joann Harris, Esq.
Samantha Cox, Esq.
U.S. Securities and Exchange Commission
Fort Worth Regional Office
801 Cherry St., Suite 1900
Fort Worth, TX. 76102
Re:

harrisr@sec.gov

coxsa@sec.qov

In the Matter of Servergy, Inc. (FW-3828)

Dear Ms. Harris and Ms. Cox:
One of several topics of the SEC's interest in its Servergy inquiry relates to the Company's
mistaken belief that it had received an order from Amazon.
In an effort to clarify the Amazon matter, we produced documents which had the opposite effect.
One of our submissions on April 21, 2014, apparenlly resulted in some misgivings about the emails we were producing. For this reason, we have gone back and created a point-by-point
explanation for the Amazon-related documents we have already produced and we have
conducted a new search for any other related items.
The Amazon Issue
We originally asked Lance Smith, COO, to check on the incoming and outgoing Amazon emails. Lance contacted Jack Smith, Server9Y's Vice President of Product Development, and
asked him to locate and retrieve the e-mails pertaining to this request. Jack Smith, located on
his computer, an e-mail chain ending on December31,2012,between Steven Noonan, an
engineer who works for Amazon, to Will Mapp, a sales representative for Servergy. Jack
retrieved the contents of the e-mail by highlighting the narrative of the last e-mail as well as the
preceding e-mails and placing that material into a separate document which he then printed.
Across the top of this printed document Jack Smith wrote "Amazon/Noonan Clarification." He
provided this to Lance after which it was provided to us. Patton Boggs subsequently sent this
document to the SEC in the 17-tab package of April 21 (Tab 7). On May 29,2014, this same
document was reproduced as a regeneration of the April 21 production and that e-mail string is
Bates No. PB/SVG/SEC0476-0478.

44 Oflices in 21 Countries
Squire Patton Boggs {US} lLP is part of the illiernalionallegal practice Squire Patton Boggs, which opemtes worldwide through a number of separate
legal antities

EXHIBIT

Please visit squlrepattonboggs,com for more information.

4810-3864·3740.2.

I
Page 133 of 178

EXHIBIT B, pg. 30 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Squire Patton Boggs (US) LLP

Page 30 of 74 PageID 102

July 18, 2014

We did not think it significant that the e-mail contained the written clarification. Obviously, you
did think it significant. Meanwhile, at the same time this document was being retrieved,
Servergy and its attorneys were attempting to locate and retrieve all responsive documents to
the SEC's above request in "native format." The above referenced e-mail chain between
Noonan and Will Mapp was obtained in native format and was subsequently produced to the
SEC on May 27, 2014 (labeled only as Tab 7 on the CD provided in native format). Included
here is a pdf of the latter and it bears Bates Nos. PB/SVG/SEC0781-0784.
The document generated by Jack Smith did not include the header of the e-mail sent by Noonan
on December 31, 2012 at 4:45 p.m., but instead began with the narrative body of that e-mail
message. At the time he responded to Lance Smith's request, Jack did not know or believe that
it was important to include the header for that e-mail message. He was operating under the
impression that it was only the content of the e-mail that was needed at that time. Jack had no
intention of withholding any information about that e-mail message and did not intend to deceive
anyone about when that message was sent or any other information contained within the
header. Hopefully. his lack of intent is made clear by the fact that we produced the same e-mail
in its native format including the header showing the date and time the message was sent.
Likewise, Jack Smith's prompt admission, when asked, that it was he who created the first
version of the e-mail produced to the SEC and that it was his handwriting across the top
supports his statement that there was no deception intended in inttially producing this e-mail in
this format. (See Declaration of Jack Smith, attached.)
Additional Production

We are in the process of responding to additional requests for documents and will be providing
the following:
1. McGann related e-mails in native format: In preparing these e-mails for production, we
realized attorney/client material was included. We expect to be able to produce these
documents shortly;
2. Employment agreements for Will Mapp and Wade Cramer:
herewith.

These are included

3. Salary information: This is included herewith; and
4. Amazon-related information: We believe you have all of these e-mails but will review
further.
You also asked for information on how the chart on page of 27 of the Servergy Private
Placement Memorandum dated February 14, 2013, was created. Vihar Rai touched on this
topic during his deposition testimony on June 11, 2014. It is Mr. Rai's recollection that Will
Mapp was the person who collected the data that is depicted in the chart. It was his
understanding that the data within the chart was obtained by going to the website of the
respective company depicted in each column and retrieving the information shown for each
product included in the chart. Although Will has now left the Company and we have not

2
481(}'3864·)740.2.

Page 134 of 178

EXHIBIT B, pg. 31 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Squire Patton Boggs (US) LLP

Page 31 of 74 PageID 103

July lB, 2014

confirmed this directly, we believe the website information he looked at to create,the chart was
not converted to hard copy and retained. That is, we do not believe Will printed out the website
information he was looking at on his screen. Hence, there are no documents to produce,

Need for a Meeting

In addition to the above information which we wanted to provide, we believe a meeting would be
useful. We want to brief you on certain management changes at Servergy and obtain
information from you as to the status of this matter and how it can be resolved in the short run.
We think it would be useful for David Peavler to attend if he is able.
Thanks for your consideration,

...

SCW:JTJ:mcr
Enclosures
cc:

SEC at ENF-CPU(w/encs) (CD sent via Federal Express)
100 F Street, N.E,
Mailtop 5973
Washington, DC 20549

3
48\0.-3864-3740.2.

Page 135 of 178

EXHIBIT B, pg. 32 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

STATE OF TEXAS

§

COUNTY OF COLLIN

§
§

Page 32 of 74 PageID 104

DECLARATION OF TOWNSEND JACKSON SMITH

I, Townsend Jackson Smith, declare under penalty of perjury that the following
statements are true and correct to the best of my knowledge, information, and belief:
1. I am over eighteen (18) years of age, am competent to make this Declaration,
and have personal knowledge of the facts below. I would testify truthfully to the facts
set forth herein if called upon to do so.
2. I am Vice President of TeChnology for Servergy, Inc.
3. On or about April 20, 2014, Lance Smith asked me if I would search for emails relating to Steve Noonan and Amazon, I understood that he wished to clarify the
relationship and determine if Noonan was speaking for Amazon when he contacted
Servergy.
4. I found a Noonan e-mail.printed it out, and left pages 2-4 on Lance's desk.
thought these were responsive to his inquiry. To be specific, this is how I produced the
e-mail:
(a) From Microsoft Outlook 2013 - Select and Open e-mail from Wililiam ("Will")
Mapp (Date: 1/2/2013 6:50 PM, title "Re: 1 CTS-1000 Pre-Order/Request(s) Amazon.com - Steven Noonan");
(b) From the e-mail message window, select Print (CTRL-P), press Enter to accept
default print options; and
(e) Discard Page 1,

DECLARATION OF TOWNSEND J. SMITH - PAGE 1
<lXII:!- 7(;42· 7420.

Page 136 of 178

EXHIBIT B, pg. 33 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 33 of 74 PageID 105

5. This was a simple maneuver I have done hundreds of times.

It never

occurred to me - or anyone at Servergy - that producing this e-mail in this fashion could
possibly be construed as inappropriate. I discarded the first page because the other
pages related to Noonan's position that he was not speaking for Amazon.
6. I declare under penalty of perjury that the foregOing is true and correct.

Executed on July 18, 2014

Townsend JVSmith

DECLARATION OF TOWNSEND J. SMITH - PAGE 2
481 fl· 7{J42-74?JJ

Page 137 of 178

EXHIBIT B, pg. 34 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 34 of 74 PageID 106

1]

t!
I

If

SQUIREC>
PATTON BOGGS
SERVERGY-SEC
SERVERGY
DOCUMENT
PRODUCTION
SATES
PS-SVG-SEC 002237.
PS-SVG-SEC 002414
CLIENTIMATTER:
032729.0101

Squl", Patton Bogg. (US) lLP
2000 McKInney Avenue. Sulle 1700

Doll ... 1)( 75201
squirepattonboggs.com

Page 138 of 178

EXHIBIT B, pg. 35 of 75

 I

uo nm St"IlP liqUids. blood, or diagnostics

<~W~««'W«<W''''<_'' ~<"<

" ,<-~

1[1

tiltS PBckag!ll(1
"

"tJ
"< 0

~

";l.

-.:;:r::ro::m~ro;;;ng;;:'";;-liCD"<K"'I"PA"I"'21"4'1"'75'ii8""56'ii8----;;fi;;-ea-~~;::;--<-"C1~"·h;;ip;]J);a~le;-;;,8DUliiiJllJ1c;r.-_.-:=__:::.:-.--~...=--_
Mar1ha Waner Rose
SQUIRE PATTON BOGGS (US) I LP

2000 MCKtNNLY AVENUe
STE 1700

DALLAS, TX 75201

[~I

HQlENI'

CI8-1'OO~W2tm

SHIP TO

(817) 978 50Blll SENDER

U,S, Securities & Exchange Commissi
ENF-CPU
100 F Street N.E.
Mailstop 5973

iner and
lions anc
Irlf:x

Sf'S

L

Washington, DC 20549
---------------iITR~

~

'serVice

Package Type:
se(lderNam e:

$,
COlli,

1Q.2Q

EXHIBIT B, pg. 36 of 75

http://fed ex onl i ne: 80801 fsme/j sp/S h ipAdapter.j sp

Page 139 of 178

i

DC-US

20549

7/18/2014

Page 35 of 74 PageID 107

SA.. YKNA

Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

U)
U)

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 36 of 74 PageID 108

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
BURNETT PLAZA, SUITE 1900
801 CHERRY STREET, UNIT #18
FORT WORTH, TEXAS 76102-6882
PHONE: (817) 978-3821
FAX: (817) 978-2700

IN REPLYING
PLEASE QUOTE

FW-03828

November 24,2014

VIA EMAIL AND UPS
Servergy, Inc.
c/o S. Cass Weiland
Squire Patton Boggs LLP
2000 McKinney Ave., Suite 1700
Dallas, TX 75201
Re:

In the Matter ofServergy. Inc. (FW-3828)

Dear Mr. Weiland:
I am writing to address several deficiencies in Servergy, Inc.' s ("Servergy's") responses
to the staff's investigative subpoenas in this matter. Because Servergy has not produced
responsive materials, we are in the process of preparing a motion seeking to enforce our
subpoenas. While we appreciate your assurances of cooperation, certain of the requests at issue
have been outstanding for over a year. Additionally, the staff concludes that Severgy's
unreasonable approach to identifying documents is contributing to the withholding of documents
critical to our investigation. Specifically, Servergy has excluded relevant custodians, utilized
unreasonable search terms, and placed inappropriately narrow date limitations on its searches.
In the hope that doing so may help both sides avoid unnecessary litigation, I have
summarized below the responsive materials that remain outstanding and the staff's proposal to
resolve the outstanding subpoena response issues:
All Communi£ations with Investors and Prospective Investors
The staff issued a subpoena to Servergy on October 17, 2013 (the "October 17, 2013
Subpoena") that included a request for "All communications with investors and/or prospective
investors. "
On December 9, 2013, Servergy, through its previous counsel Ted Schweinfurth of Baker
& McKenzie LLP, made a production purportedly responsive to the request, but also objected to

the request on the grounds that it was "unduly burdensome and harassing" because the request as
written did not allow Servergy to identify communications with prospective investors without
"undue burden or expense."

Page 140 of 178

EXHIBIT B, pg. 37 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 37 of 74 PageID 109

After reviewing the documents Servergy produced on December 9, 2013 and learning
that you now represented Servergy in this matter, we met at the Commission's office in Fort
Worth on March 18, 2014 (the "March 18,2014 Meeting".) During the March 18,2014
Meeting, the staff expressed concern that Servergy's response was incomplete due to the lack of
electronic communications sourced to the following Servergy officers: Lance Smith, Jack Smith,
Vihar Rai, and Wade Cramer. The staff asked you to verifY that documents from the above
mentioned individuals were collected and that all responsive documents were produced by
providing Servergy's custodian list. After repeated requests to you for this information, the
custodian list was finally provided on April 21, 2014. On that date, the staff learned that
Servergy never searched Jack Smith's and Vihar Rai's electronic communications for documents
responsive to the October 17, 2013 Subpoena.

In a letter dated May 28, 2014, I expressed concern that Servergy omitted Jack Smith and
Vihar Rai from its custodian list. Jack Smith, Severgy's Vice President of Technology, and
Vihar Rai, Servergy's Vice President of Engineering, invented Servergy's only product, the
Cleantech·IOOO ("CTS·I 000"), and have been involved with Servergy since the company was
founded in 2009. Thus, given Jack Smith's and Vihar Rai's significant involvement in Servergy,
the company's decision to omit them as custodians appears unreasonable on its face.
Moreover, witnesses omitted from Servergy's custodian list testified that they had
communications with investors. These witnesses testified that Bill Mapp, Servergy's Chief
Executive Officer until his resignation effective September I, 2014, was the primary company
contact with investors, but that other company executives also participated in communications
with investors. On June 4, 2014, Lance Smith, Servergy's former Chief Operating Officer and
current Chief Executive Officer, testified that Will Mapp, Servergy's former Vice President of
Strategic Projects, communicated with investors and prospective investors regarding updates on
marketing initiatives and strategic aspects ofthe technology. A week later, Vihar Rai testified
that he participated in Servergy's presentations to investors to provide technical expertise.
Finally, on September 5, 2014, Will Mapp testified that he, Jack Smith, and Vihar Rai
participated in Bill Mapp's meetings with investors.
After witnesses confirmed our suspicions that Servergy's custodian list provided on April
21,2014 was unreasonable, the staff requested an updated custodian list from you during a
telephone conference held on July 24,2014. When you failed to provide the updated custodian
list, I reiterated the request during a telephone conversation with your partner, Jim Jacks, on
September 3,2014, and emails to both you and Mr. Jacks on September 3, 2014 and September
12,2014. Mr. Jacks responded to my request for an updated custodian list on September 12,
2014 by explaining, "Honestly, I have been working on two other matters with more urgent
deadlines." I repeated the request for an updated custodian list in J. subsequent emails before the
information was finally provided on October 3,2014.
The updated custodian list provided on October 3,2014 revealed that Servergy's list of
custodians used to identifY communications with investors and prospective investors had not
changed since the custodian list was first provided on April 21, 2014. On a telephone conference
held on October 7, 2014, the staff told you that Servergy's continued exclusion of Jack Smith,
Vihar R.ai, and Will Mapp as custodians was unreasonable. To this day, Servergy has failed to
2tPage

Page 141 of 178

EXHIBIT B, pg. 38 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 38 of 74 PageID 110

supplement its production to include Jack Smith, Vihar Rai, and Will Mapp's communications
with investors and prospective investors.
Communications Related to Alleged Amazon Order
Servergy received what it later characterized as a pre-order from Amazon on December
25,2012 when Steven Noonan, an engineer employed at Amazon, requested a CTS-IOOO for
testing purposes. However, on December 31,2012, Mr. Noonan emailed Will Mapp and
explained that he was interested in the CTS-I 000 for personal use and that he did not speak on
behalf of Amazon. After Servergy learned the truth about the Amazon pre-order, Bill Mapp
subsequently touted that Servergy received a pre-order from Amazon on at least three occasions
during January and Feburary 2013.
On May 14, 2014, the staff issued a subpoena to Servergy requesting, "All documents
and communications related to Servergy's claim that it received an order from Amazon" to better
understand why Bill Mapp touted a non-existent pre-order from Amazon (the "May 14, 2014
Subpoena"). In response, Servergy only produced emails involving Steven Noonan's pre-order
and subsequent clarification to Will Mapp.

After the staff expressed concern that responsive documents were withheld, you revealed
in a letter dated October 3, 2014, that the company conducted the following searches:
•

terms:(steven@uplinklabs.net AND apologize), accounts:Will.m@servergy.com, sent
between 2012-1-1 and 2012-12-31;

•

terms:(noonan AND amazon) [Exclude drafts), sent between 2012-7-31 and 2013-731, type: (Mail); and

•

terms:(amazon NOT (unsubscribe OR kindle», sent between 2012-7-31 and 2013-731, type: (Mail).

The staff does not believe that Servergy has conducted a reasonable search for documents
related to the purported Amazon pre-order. It is unclear from the search parameters which
custodians were used for these searches or why a search term such as "apologize" is reasonable
to identifY all documents and communications related to Servergy's claim that it received a preorder from Amazon. Further, Lance Smith testified on June 4, 2014 that he received a companywide email from Bill Mapp announcing the pre-order from Amazon, and this email was never
produced.
Communications Related to Alleged Freescale Order
On or around July 30,2012, Bill Mapp touted that Servergy received an order from
Freescale. When the staff contacted Freescale's counsel, we learned that Freescale denied ever
placing an order with Servergy. Thus, a request for "All documents and communications related
to Servergy's claim that it received an order from Freescale" was included in the May 14, 2014
Subpoena.
31Page

Page 142 of 178

EXHIBIT B, pg. 39 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 39 of 74 PageID 111

After we expressed our concern that responsive documents were withheld, you revealed
in a letter dated October 3,2014, that the company conducted the following searches:
•

terms: from:bill@servergy.com aidan AND ballpark AND pre-commitment),
accounts:Bill@servergy.com, sent between 2012-7-26 and 2012-7-26;

•

terms: (from:vihar@servergy.com freescale AND magma NOT
to:bill@servergy.com), accounts:jack@servergy.com, sent between 2012-7-25 and
2012-7-25;

•

terms:(from: dan.s@servergy.com PDF and subject: freescale and exciting),
accounts:vihar@servergy.com, sent between 2012-7-30 and 2012-7-30;

•

terms: (B07373@freescale.com), accounts:vihar@servergy.com, sent between 20128-10 and 2012-8-10;

•

terms: (from: B07373@freescale.com), accounts:vihar@servergy.com, sent between
2012-11-6 and 2012-11-6;

•

terms: (from :jack@servergy.com freescale), accounts: Bill@servergy.com, sent
between 2012-11-12 and 2012-11-12;

•

terms: (from:jack@servergy.com to:B07373@freescale.com),
accounts:vihar@servergy.com, sent between 2012-8-2 and 2012-8-2; and

•

terms:(from:vihar@servergy.com freescale AND magma NOT
to:bill@servergy.com), accounts:jack@servergy.com, sent between 2012-7-25 and
2012-7-25.

The staff does not believe that the above searches are sufficient. Again, it is unclear how
search terms like "ballpark" and "exciting" are appropriate to identify all documents and
communications related to Servergy's claim that it received an order from Freescale. Moreover,
it appears that Servergy's search for responsive documents was further limited to three days in
July 2012, two days in August 2012, and three days in November 2012 for reasons unknown to
the staff. The staff can only conclude that these searches were created with specific known
documents in mind - not to capture all responsive documents. Thus, there is a high likelihood
that Servergy is withholding documents related to the company's claim that it received an order
from Freescale.

4/Page

Page 143 of 178

EXHIBIT B, pg. 40 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 40 of 74 PageID 112

Third-Party Testing ofthe CTS-IOOO
The staff has requested documents from Servergy related to third-party testing of the
CTS-IOOO. Specifically, we requested:
•

October 17, 2013 Subpoena: All documents related to third-party testing of Servergy
products; and

•

May 14, 2014 Subpoena: All documents and communications related to performance
feedback from third-parties that tested the CTS-l 000.

Both Bill Mapp and Lance Smith testified that numerous third-parties tested the CTS1000. For instance, Mapp testified that third-parties conducted extensive beta-testing on the
CTS-I000, and that specifically Oracle and Ingram Micro conducted beta-testing. Additionally,
Lance Smith testified that AT&T, Ingram Micro, Hitachi, A vnet, and the University of Texas at
San Antonio all received CTS-l OOOs to test. To date, the only documents that Servergy has
produced related to third-party testing by the companies identified by Bill Mapp and Lance
Smith is a single email related to feedback received by Ingram Micro. You revealed in a letter
dated October 3,2014, that the company conducted the following search to identify documents
related to third-party testing: terms:(from anna.b@servergy.com AND ingram AND feedback),
accounts:lance.s@servergy.com, sent between 2014-3-28 and 2014-3-28. It is hardly surprising
that the only document Servergy produced was related to feedback provided by Ingram Micro,
considering that the company inexplicably limited its search for all responsive documents to
feedback received from Ingram Micro on a single day.
The staff does not believe that Servergy has conducted a reasonable search for documents
related to third-party testing. Not only did Servergy limit its search for all responsive documents
to feedback received from Ingram Micro on a single day, but it appears that no attempt was made
to create reasonable search terms and a reasonable custodian list to identify documents in
response to this request.

Documents Related to Charts Comparing the CTS-IOO with Other Servers
On September 5,2014, Will Mapp testified that he created the chart titled "Comparing
Servergy to the Blade Server Competition" that is contained in Servergy's private placement
memorandum dated February 14, 2013 ("PPM") and that the chart misrepresents Servergy's
performance specs in comparison to the blade server models that are listed in the chart. Will
Mapp also testified that he: (1) created several comparison charts that were substantially similar
to the chart contained in the PPM while employed at Servergy, (2) emailed either the version of
the chart contained in the PPM or an earlier version of the chart to either Jack Smith or Vihar Rai
to review for accuracy, and (3) emailed the chart to Lance Smith.
On September 16, 2014, the staff issued a subpoena (the "September 16,2014
Subpoena") to Servergy requesting "All documents and communications concerning the
comparison of the Cleantech Server 1000 to blade servers, including all drafts of the chart titled
'Comparing Servergy to the Blade Server Competition' contained in Servergy's private
51Page

Page 144 of 178

EXHIBIT B, pg. 41 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 41 of 74 PageID 113

placement memorandum dated February 14,2013." Despite Will Mapp's testimony confirming
that he created and emailed several comparison charts, the staff received a letter from you dated
October 15, 2014 claiming that no responsive documents exist because the chart contained in the
PPM "was created using information from the websites of other companies and there are no
drafts of this chart." When the staff asked you to explain your affirmation that no responsive
documents existed in light of Will Mapp's testimony during this morning's telephone
conference, you admitted that hundreds of documents containing the chart "Comparing Servergy
to the Blade Server Competition" were identified by the company and questioned whether the
September 16, 2014 Subpoena required Servergy to produce these documents. When the staff
answered in the affirmative, you stated that the request was "unreasonable." Considering Will
Mapp's testimony and your admission that responsive documents were identified but not
produced, the staff can only conclude that Servergy is unreasonably withholding responsive
documents critical to our investigation.

Proposal to Resolve the Outstanding Subpoena Response Issues
As detailed above, the staff has evidence that Servergy is withholding several categories
of documents that are critical to our investigation. Further, both the company and its counsels
have failed to create a reasonable process for identifYing responsive documents, and the staff has
no confidence that you will create a reasonable process going forward. Thus, the staff proposes
that Servergy produce to us all emails sent and received from Bill Mapp, Lance Smith, Will
Mapp, Jack Smith, and Vihar Rai from January I, 2012 to December 31,2013. This proposal is
a reasonable compromise because it narrows the relevant time period from the five years
previously requested to two years and limits the production only to custodians that have testified
to possessing responsive documents.
The staff is sensitive to the costs involved with conducting a privilege review. In order to
meet Servergy's interests of saving the time and cost of conducting a privilege review of these
documents, we would be willing to enter into a clawback (non-waiver) agreement, where, among
other things, we agree that the inadvertent production of privileged materials by Servergy does
not automatically constitute a waiver of privilege. A draft of such an agreement is attached for
your review. To further protect against the production of inadvertently privileged documents, we
are willing to allow Servergy to exclude documents from the initial production based on
reasonable and mutually agreed upon limitations, such as excluding communications sent and
received by Servergy's attorneys.

61Page

Page 145 of 178

EXHIBIT B, pg. 42 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 42 of 74 PageID 114

The staff asks that you respond to this proposal by Wednesday, December 3, 2014. As
indicated during our conversation on Monday, November 24, 2014, the staff is prepared to take
further action without additional notice including, but not limited to, filing an action in U.S.
District Court to enforce compliance with our subpoenas.
If you have any questions concerning this matter, you may contact me at (817) 978-5035
or at martins@sec.gov.

Sincerely,

~-I!~~
Samantha S. Martin
Staff Attorney

Enclosure: Draft Clawback Agreement

7/Page

Page 146 of 178

EXHIBIT B, pg. 43 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 43 of 74 PageID 115

**November 24, 2014 DRAFf**
AGREEMENT BETWEEN THE UNITED STATES SECURITIES & EXCHANGE
COMMISSION AND SERVERGY, INC.
IN THE MATTER OF SERVERGY, INC. (FW-03828)

As part ofServergy, Inc's ("Servergy's") efforts to respond to the Staff of the
U.S. Securities and Exchange Commission's (the "Staff') subpoenas dated October 17,
2013, May 14,2014, and September 16,2014, in the above-referenced investigation,
Servergy intends to produce to the Staff certain communications which Servergy believes
may contain, among other documents, a variety of attorney-client communications and
attorney work-product (hereinafter collectively referred to as the "Communications").
Servergy will produce the remaining Communications the Staff has requested as
soon as possible, and Servergy will need to produce the vast majority of the
Communications prior to reviewing them for privilege. Servergy does not intend to
waive any privilege or work product protection in connection with any Communications
produced after the date hereof, and is willing to produce the remaining Communications
only on the basis of the following mutual understandings:
1)

Servergy has not waived, and does not intend to waive, for any Communication
produced to the Commission the attorney-client privilege, work-product privilege,
or any other applicable privilege as to any third party;

2)

Counsel for Servergy has retained copies of all Communications produced to the
Staff and is in the process of reviewing such items for the attorney-client or workproduct privilege. Counsel for Servergy agrees that the primary responsibility for
identifying any privileged Communications resides with counsel for Servergy,
and nothing herein is intended to shift such responsibility to the Staff. To the
extent counsel to Servergy determines that any Communications produced to the
Staff are subject to the attorney-client or work-product privilege, they will
produce a privilege log to the Staff identifying the Communications and
containing sufficient information to evidence the purportedly privileged nature of
the communication. Counsel for Servergy will provide any such privilege log as
soon as practicable, will endeavor to limit the number of interim privilege logs,
and in any event will provide the final privilege log no later than 120 days after
the related Communications are produced;

3)

As the Staff of the Commission reviews the Communications produced by
Servergy, it will make a good faith effort to segregate those items that on their
face appear to be subject to the attorney-client or work-product privilege, and will
set aside in a secure place any such Communications. The Staff agrees to not
further review or examine such items until counsel for Servergy has been notified
and has had an opportunity to review those items and assert the attorney-client or

Page 147 of 178

EXHIBIT B, pg. 44 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 44 of 74 PageID 116

work-product privilege on a case-by-case basis, subject to paragraph 6 and 7
below;
4)

Similarly, if, as, and when counsel for Servergy notifies the Staff that it has
determined that any of the Communications previously produced to the Staff are
subject to the attorney-client or work-product privilege, the Staff will set aside in
a secure place any such items, including any copies, and agrees, subject to
paragraph 6 and 7 below, to not further review or examine such items until a final
privilege determination is made;

5)

The Staff retains the right to challenge any assertion of the attorney-client or
work-product privilege by counsel to Servergy. Counsel to Servergy and the Staff
will in good faith attempt to reach a resolution as to the privileged status of the
Communications in question;

6)

Pending final resolution as to the privileged status of the Communications in
question, the Staff retains the right to disclose to any third party any
Communications in its possession that the Staff in good faith considers to be
outside the scope of the attorney-client or work-product privilege. Any such
subsequent disclosure by the Staff will be treated as irrelevant in determining
whether or not the Communication in question was privileged;

7)

Notwithstanding any language in this letter to the contrary, the Staff retains the
right to disclose to third parties any Communications in its possession to the
extent it determines that such disclosure is required by law;

8)

Any and all originals or copies of Communications deemed by both parties to be
the subject of a valid assertion ofthe attorney-client or work-product privilege by
Servergy or its counsel shall be promptly set aside in a secure place and will not
be further reviewed, examined, or used for any purpose by the Staff until such
time as, consistent with Commission document retention practices, the documents
can be returned to counsel for Servergy or destroyed;

Page 148 of 178

EXHIBIT B, pg. 45 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

9)

Page 45 of 74 PageID 117

Neither Servergy nor its counsel will argue that the Commission's investigation
has been tainted by the Commission's receipt, review, examination, or use of any
Communications subsequently determined in accordance with the provisions of
this letter to have been subject to the attorney-client or work-product privilege.

Dated:

Dated: _ _ _ _ _ _ _ _ _ _ _ __

SECURITES & EXCHANGE
COMMISSION

SERVERGY, INC.

By:

By:

Title: _ _ _ _ _ _ _ _ _ _ __

Title: _ _ _ _ _ _ _ _ _ _ __

---------------

Page 149 of 178

EXHIBIT B, pg. 46 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 46 of 74 PageID 118

Martin, Samantha S.
Weiland, Cass <cass.weiland@squirepb.com>
Tuesday, December 02, 2014 6:21 PM
Martin, Samantha S.
Harris, R. Joann; Hahn, Carol; Guide, Matthew; Hawkins, Robert; Jacks, James
RE: In the Matter of Servergy, Inc. (FW-03828)

From:

Sent:
To:
Cc:
Subject:

Hello: Regarding your letter to Jim today ..... we would regret your taking court action
since it would cause more harm to the Company.
In the meantime, however, you should know - and I was sending a separate email on
this before seeing that you had written Jim -- we have been working hard to track
down responses to your various claims and complaints. Late this afternoon I was
informed that the material we had carefully gathered relating to your Amazon
document subpoena was apparently not forwarded to you. Our legal assistant reported
this while searching for the Bill Mapp email to Lance Smith which you asked about in
your letter. We wondered why you were asking since we were confident it had been
included in the very extensive search we'd conducted on the Amazon issue. I have no
idea why these 200 or so documents got sidetracked and apologize for the mishap. I
think you have many if not most of these documents via other productions but that is
not an excuse.
Recall that we responded promptly to two (2) subsequent subpoenas and even listed
the Amazon search terms in one of our letters. In late October I took two weeks off and
Jim's illness has unfortunately been an ongoing thing. That said, I was very surprised
to hear the documents were not forwarded. We plan to do that tomorrow.
Please call me or Jim with any questions. I have to be in Austin tomorrow for a
hearing. Back Friday afternoon,
S.Cass Weiland
Dallas
214.758.1504
From: Martin, Samantha S. [mailto: MartinS@SEC.GOV]

Sent: Tuesday,

December 02, 2014 4:43 PM

To: Jacks, James; Weiland, Cass

Cc: Harris, R. Joann; Hahn, Carol; Guide, Matthew
Subject: In the Matter of Servergy, Inc. (FW-03828)

Jinl,
I'm attaching a letter memorializing our conversation from earlier today. You will also receive a hard copy of
the letter in the mail.

Page 150 of 178

EXHIBIT B, pg. 47 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 47 of 74 PageID 119

Kind regards,
Samantha S. Martin
Staff Attorney
U.S. Securities and Exchange Commission
Division of Enforcement
Fort Worth Regional Office
80 I Cherry Street, Suite 1900
Fort Worth, TX 76102
817-978-5035 (phone)
817-978-2809 (fax)

DISCLAIMER:
44 Offices in 21 Countries
This message is confidential and may be legally privileged or otherwise protected from disclosure. If you are
not the intended recipient, please telephone or email the sender and delete this message and any attachment
from your system; you must not copy or disclose the contents of this message or any attachment to any other
person.
Squire Patton Boggs (US) LLP is part of the international legal practice Squire Patton Boggs, which operates
worldwide through a number of separate legal entities. Please visit www.squirepallonboggs.com for more
information.

2

Page 151 of 178

EXHIBIT B, pg. 48 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 48 of 74 PageID 120

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Fort Worth Regional Office
801 Cherry Street. Suite 1900
Fort Worth. TX 76102
MAIN PHONE: (817) 978·3821
FAX: (817) 978·2700
DIVISION OF ENFORCEMENT

Samantha S. Cox
Enforcement Attorney
(817) 978·5035

September 16, 2014
VIA UPS AND ELECTRONIC MAIL (cweiland@pattonboggs.com)
Servergy, Inc.
c/o S. Cass Weiland, Esq.
Squire Patton Boggs LLP
2000 McKinney Ave., Suite 1700
Dallas, TX 75201
Re:

In the Matter of Servergy, Inc. (FW -03828)

Dear Mr. Weiland:
Pursuant to Rule 8 of the United States Securities and Exchange Commission's Rules
Relating to Investigations, 17 C.F.R. § 203.8, and your agreement to accept service, I have
enclosed a subpoena for documents issued to your client, Servergy, Inc., in connection with the
above-referenced formal investigation. The subpoena requires Servergy, Inc. to produce
documents by 5:00 p,m. (Central) on September 30, 2014, to the SEC's Fort Worth Regional
Office.
Please send the materials to:
ENF-CPU
U.S. Securities and Exchange Commission
100 F St., N.E., Mailstop 5973
Washington, DC 20549-5973
For smaller electronic productions under 10MB in size, the materials may be emailed to
the following email address: ENF-CPU@sec.gov.
Please carefully read the subpoena attachment, which contains, among other things,
important instructions related to the manner of producing documents. In particular, if your client
prefers to send us copies of original documents, the staff requests that you scan and produce
hard copy documents, as well as electronic documents, in an electronic format consistent
with the SEC Data Delivery Standards attached hereto. All electronic documents
responsive to the document subpoena, including all meta data, should also be produced in

r
Page 152 of 178

EXHIBIT B, pg. 49 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 49 of 74 PageID 121

Servergy, Inc.
c!0 S. Cass Weiland, Esq.
September 16,2014
Page 2

their native software format. If you have any questions concerning the production of
documents in an electronic format, please contact me as soon as possible and in any event before
producing documents.
In your cover letter(s) accompanying the production of responsive documents, please
enclose a list briefly describing each item you send. The list should state to which paragraph(s)
in the subpoena attachment each item responds. Please also state in the cover letter(s) whether
you believe your client has met its obligations under the subpoena by searching carefully and
thoroughly for everything called for by the subpoena, and sending it all to us. A copy of the
subpoena should be included with the documents that are produced.
Passwords for documents, files, compressed archives, and encrypted media should be
provided separately either via email addressed to ENF-CPU@sec.gov, or in a separate cover
letter mailed separately from the data.
Please also provide a narrative description describing what was done to identifY and
collect documents responsive to the subpoena. At a minimum, the narrative should describe:
•
•
•
•

•
•
•
•

who searched for documents;
who reviewed documents found to determine whether they were responsive;
which custodians were searched;
what sources were searched (e.g., computer files, CDs, DVDs, thumb drives, flash drives,
online storage media, hard copy files, diaries, datebooks, planners, filing cabinets, storage
facilities, home offices, work offices, voice mails, home email, webmail, work email,
backup tapes or other media);
what search terms, if any, were employed to identifY responsive documents;
what firms and/or persons, if any, assisted in analyzing the data collected;
what third parties, if any, were contacted to obtain responsive documents (e.g., phone
companies for phone records, brokerage firms for brokerage records); and
where the original electronic and hardcopy documents are maintained and by whom.

In addition, for any documents that qualifY as records of regularly conducted activities
under Federal Rule of Evidence 902(11), please have the appropriate representative(s) of your
client complete a business records certification (a sample of which is enclosed) and return it with
the document production.
Please note that, in any matter in which enforcement action is ultimately deemed to be
warranted, the Division of Enforcement will not recommend any settlement to the Commission
unless the party wishing to settle certifies, under penalty of perjury, that all documents
responsive to Commission subpoenas and formal and informal document requests in this matter
have been produced.
The information your client provides is subject to the Commission's routine uses. A list
of those uses is contained in the enclosed copies of SEC Form 1662, which also contain other

Page 153 of 178

EXHIBIT B, pg. 50 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 50 of 74 PageID 122

Servcrgy. Inc.
c/o S. Cass Weiland. Esq.
September 16.2014

Page 3

important inl(mnation. Please provide a copy "fthis 1()J"JnlO your client. This investigation is
confidential and nonpublic and should not be construed as an indication by the Commission or
its stafrthat any violation of law has occurred. nor as a rellection upon any person. emity. or
security.

If you havc any questions or would like to discuss this maller, you may ealImc at IS I 7)
978-5035 or email me at co.\sa'a.secgo\.

K:;~lN
Samantha S. ( ox
Enforcement Al1ornc)
Division of Enforcement
Enclosures:

Subpoena and Attachment
SEC [)ata Delivery Standards
SEC Form 1662
Business Records Ce11ification

Page 154 of 178

EXHIBIT B, pg. 51 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 51 of 74 PageID 123

SUBPOENA
UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
In the Matter of Servcrgy, inc. (FW-03S2S)
To:
c/o

SCfYtrgy, Inc.
S. Cass \Vciland. Esq.
Squire Patton Boggs LLl'
2000 McKinney fhc .. Suite 1700
Dallas. TX 7520 I

YOU MUST PRODUCE everything specified in the Allachll1cnt to this subpoena to oflieers ufthe

Securities and Exchange COlllmissIon. iJt the

p!~KC.

date and time spccilicd beIO\\':

ENF-CPU. U.S. Securities and Exchange Commission. 100 F St.. 1\.F .. Mailstop 5973.
Washington. DC 20549-5<J73.no later than September 30. 2014. at 5:00 p.m. (Central)
YOU MUST TESTIFY bel,,,'e oilicers "fthe Securities and Exchange Commission. at the place.
date alld time specified he\o\\':

FEDERAL LAW REQUIRES YOU TO COMPLY WITH THIS SUBPOENA.
Failure to comply may sul:iect you to a fine and/or imprisonment.

iJ/t _
--~M~UJV~
jl

By:

4J

Date:

Samantha S. Cox, Enf()fcement Attorney
U.S. Securities and Exchange Commission
80 I Cherry StreeL Suite 1900
FOit Worth. TX 76102

I am an officer of tile U.S. Securities and E:..:change COlllmission authorized to issue subpoenas in this
matter. The Securities and Exchange Commission has issued a formal order authorizing this investigation
under Section 21 (a) of the Securities Exchange Act of 1934.
NOTICE TO WITNESS:

If :you claim a witness fee or mileage. submit this subpoenn with the claim voucher.

Page 155 of 178

EXHIBIT B, pg. 52 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 52 of 74 PageID 124

SUBPOENA ATTACHMENT FOR SERVERGY, INC.

September 16, 2014
In the Matter of Servergy, Inc. (FW-03828)
A.

Definitions

As used in this subpoena, the words and phrases listed below shall have the following
meanmgs:
I.

"Servergy" means Servergy, Inc. and all present and former subsidiaries,
affiliates, predecessors, successors, officers, directors, agents, employees,
consultants, shareholders, partnerships, and any general and limited
partners thereof, any entities acquired by or merged with Servergy, Inc.,
and any aliases, code names, or trade or business names used by any of the
foregoing.

2.

"Koerr" means Koerr Inc. and all present and former subsidiaries,
affiliates, predecessors, successors, officers, directors, agents, employees,
consultants, shareholders, partnerships, and any general and limited
partners thereof, any entities acquired by or merged with Koerr Inc., and
any aliases, code names, or trade or business names used by any of the
foregoing.

3.

"Document" shall include, but is not limited to, any written, printed, or
typed matter including, but not limited to all drafts and copies bearing
notations or marks not found in the original, letters and correspondence,
interoffice communications, slips, tickets, records, worksheets, financial
records, accounting documents, bookkeeping documents, memoranda,
reports, manuals, telephone logs, telegrams, facsimiles, messages of any
type, telephone messages, voice mails, tape recordings, notices,
instructions, minutes, summaries, notes of meetings, file folder markings,
and any other organizational indicia, purchase orders, information
recorded by photographic process, including microfilm and microfiche,
computer printouts, spreadsheets, and other electronically stored
information, including but not limited to writings, drawings, graphs,
charts, photographs, sound recordings, images, and other data or data
compilations that are stored in any medium from which information can
be retrieved, obtained, manipulated, or translated.

4.

"Person" means a natural person, firm, association, organization,
partnership, business, trust, corporation, bank or any other private or
public entity.

5.

"Communication" means any correspondence, contact, discussion, e-mail,
instant message, or any other kind of oral or written exchange or
transmission of information (in the form of facts, ideas, inquiries, or

Page 156 of 178

EXHIBIT B, pg. 53 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 53 of 74 PageID 125

otherwise) and any response thereto between two or more Persons or
entities, including, without limitation, all telephone conversations, face-toface meetings or conversations, internal or external discussions, or
exchanges of a Document or Documents.
6.

"Concerning" means directly or indirectly, in whole or in part, describing,
constituting, evidencing, recording, evaluating, substantiating, concerning,
referring to, alluding to, in connection with, commenting on, relating to,
regarding, discussing, showing, describing, analyzing or reflecting.

7.

The term "you" and "your" means the entity to whom this subpoena was
issued.

8.

To the extent necessary to bring within the scope of this subpoena any
information or Documents that might otherwise be construed to be outside
its scope:
a.

b.
c.

d.
e.

B.

the word "or" means "and/or";
the word Hand" means "and/or";
the functional words "each," "every" "any" and "all" shall each be
deemed to include each of the other functional words;
the masculine gender includes the female gender and the female
gender includes the masculine gender; and
the singUlar includes the plural and the plural includes the singular.

Instructions

I.

Unless otherwise specified, the subpoena calls for production of the
original Documents and all copies and drafts of same. Documents
responsive to this subpoena may be in electronic or paper form.
Electronic Documents such as email should be produced in accordance
with the attached Document entitled SEC Data Delivery Standards. All
electronic Documents responsive to the Document subpoena, including all
metadata, should also be produced in their native software format.

2.

For Documents in paper format, you may send the originals, or, if you
prefer, you may send copies of the originals. The Commission cannot
reimburse you for the copying costs. If you are sending copies, the staff
requests that you scan (rather than photocopy) hard copy Documents and
produce them in an electronic format consistent with the SEC Data
Delivery Standards. Alternatively, you may send us photocopies of the
Documents in paper format. If you choose to send copies, you must
secure and retain the originals and store them in a safe place. The staff
may later request or require that you produce the originals.

2

Page 157 of 178

EXHIBIT B, pg. 54 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 54 of 74 PageID 126

3.

Whether you scan or photocopy Documents, the copies must be identical
to the originals, including even faint marks or print. Also, please note that
if copies of a Document differ in any way, they are considered separate
Documents and you must send each one. For example, if you have two
copies of the same letter, but only one of them has handwritten notes on it,
you must send both the clean copy and the one with notes.

4.

In producing a photocopy of an original Document that contains post-it(s),
notation flag( s), or other removable markings or attachments which may
conceal all or a portion of the markings contained in the original
Document, photocopies of the original Document both with and without
the relevant post-it(s), notation flag(s), or removable markings or
attachments should be produced.

5.

Documents should be produced as they are kept in the ordinary course of
business or be organized and labeled to correspond with the categories in
this request. In that regard, Documents should be produced in a unitized
manner, i.e., delineated with staples or paper clips to identify the
Document boundaries.

6.

Documents should be labeled with sequential numbering (bates-stamped).

7.

You must produce all Documents created during, or Concerning, the
period January I, 2009 to the present, unless otherwise specified.

8.

The scope of any given request should not be limited or narrowed based
on the fact that it calls for Documents that are responsive to another
request.

9.

You are not required to produce exact duplicates of any Documents that
have been previously produced to the Securities and Exchange
Commission staff in connection with this matter. If you are not
producing Documents based upon a prior production, please identify the
responsive Documents that were previously produced.

10.

For any Documents that qualify as records of regularly conducted
activities under Federal Rule of Evidence 902(11), please complete a
business records certification (a sample of which is enclosed) and return it
with the Document production.

11.

This subpoena covers all Documents in or subject to your possession,
custody or control, including all Documents that are not in your immediate
possession but that you have the effective ability to obtain, that are
responsive, in whole or in part, to any of the individual requests set forth
below. If, for any reason - including a claim of attorney-client privilege3

Page 158 of 178

EXHIBIT B, pg. 55 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 55 of 74 PageID 127

you do not produce something called for by the request, you should submit
a list of what it is not producing. The list should describe each item
separately, noting:
a.
b.
c.
d.
e.

f.
g.
h.
1.

12.

C.

its author(s);
its date;
its subject matter;
the name of the Person who has the item now, or the last Person
known to have it;
the names of everyone who ever had the item or a copy of it, and
the names of everyone who was told the item's contents;
the basis upon which you are not producing the responsive
Document;
the specific request in the subpoena to which the Document relates;
the attorney(s) and the client(s) involved; and
in the case of the work product doctrine, the litigation for which
the Document was prepared in anticipation.

If Documents responsive to this subpoena no longer exist because they
have been lost, discarded, or otherwise destroyed, you should identify
such Documents and give the date on which they were lost, discarded or
destroyed.

Documents to be Produced
I.

All Documents and Communications Concerning Koerr.

2.

All Documents and Communications Concerning the comparison of the
Cleantech Server 1000 to blade servers, including all drafts of the chart
titled "Comparing Servergy to the Blade Server Competition" contained in
Servergy's private placement memorandum dated February 14,2013.

3.

All Documents and Communications Concerning Servergy's webinar
presentations to potential investors, including all drafts ofwebinar
presentations.

4

Page 159 of 178

EXHIBIT B, pg. 56 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 56 of 74 PageID 128

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Supplemental Information for Persons Requested to Supply
Information Voluntarily or Directed to Supply Information
Pursuant to a Commission Subpoena
A. False Statements and Documents
Section 1001 ofTitle 18 of the United States Code provides as follows:
[W]hoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the
Government of the United States, knowingly and willfully-(1) falsifies, conceals, or covers up by any trick, scheme, or device a material fact;
(2) makes any materially false, fictitious, or fraudulent statement or representation; or
(3) makes or uses any false writing Or document knowing the same to contain any materially false,
fictitious, or fraudulent statement or entry;
shall be fined under this title, imprisoned not more than 5 years. . or both.

B. Testimony
If your testimony is taken, you should be aware of the following:
1.

Record. Your testimony will be transcribed by a reporter. If you desire to go off the record, please indicate this to
the Commission employee taking your testimony, who will determine whether to grant your request. The reporter
will not go off the record at your, or your counsel's, direction.

2.

Counsel. You have the right to be accompanied, represented and advised by counsel of your choice. Your
counsel may advise you before, during and after your testimony; question you briefly at the conclusion of your
testimony to clarify any of the answers you give during testimony; and make summary notes during your
testimony solely for your use. If you are accompanied by counsel, you may consult privately.

If you are not accompanied by counsel, please advise the Commission employee taking your testimony if, during the
testimony, you desire to be accompanied, represented and advised by counsel. Your testimony will be adjourned
once to afford you the opportunity to arrange to be so accompanied, represented or advised.
You may be represented by counsel who also represents other persons involved in the Commission's investigation.
This multiple representation, however, presents a potential conflict of interest if one client's interests are or may be
adverse to another's. If you are represented by counsel who also represents other persons involved in the
investigation, the Commission will assume that you and counsel have discussed and resolved all issues concerning
possible conflicts of interest. The choice of counsel, and the responsibility for that choice, is yours.
3.

Transcript Availability. Rule 6 of the Commission's Rules Relating to Investigations, 17 CFR 203.6, states:
A person who has submitted documentary evidence or testimony in a formal investigative proceeding
shall be entitled, upon written request, to procure a copy of his documentary evidence or a transcript of
his testimony on payment of the appropriate fees: Provided, however, That in a nonpublic formal
investigative proceeding the Commission may for good cause deny such request. In any event, any
witness, upon proper identification, shall have the right to inspect the offiCial transcript of the witness'
own testimony.

If you wish to purchase a copy of the transcript of your testimony, the reporter will provide you with a copy of the
appropriate form. Persons requested to supply information voluntarily will be allowed the rights provided by this rule.
4.

Perjury. Section 1621 of Title 18 of the United States Code provides as follows:

Whoever(1) having taken an oath before a competent tribunal, officer, or person, in any case in which a law of
the United States authorizes an oath to be administered, that he will testify, declare, depose, or certify
truly, or that any written testimony, declaration, deposition, or certificate by him subscribed, is true,
willfully and contrary to such oath states or subscribes any material matter which he does not believe to
be true; or
SEC 1662 (09-14)

Page 160 of 178

EXHIBIT B, pg. 57 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 57 of 74 PageID 129

(2) in any declaration, certificate, verification, or statement under penalty of pe~ury as permitted under
section 1746 of title 28, United States Code, willfully subscribes as true any material matter which he
does not believe to be true;
is guilty of pe~ury and shall, except as otherwise expressly provided by law, be fined under this title or
imprisoned not more than five years, or both.
5. Fifth Amendment and Voluntary Testimony. Information you give may be used against you in any federal, state,
local or foreign administrative, civil or criminal proceeding brought by the Commission or any other agency.

You may refuse, in accordance with the rights guaranteed to you by the Fifth Amendment to the Constitution of the
United States, to give any information that may tend to incriminate you.
If your testimony is not pursuant to subpoena, your appearance to testify is voluntary, you need not answer any
question, and you may leave whenever you wish. Your cooperation is, however, appreciated.
6. Formal Order Availability. If the Commission has issued a formal order of investigation, it will be shown to you
during your testimony, at your request. If you desire a copy of the formal order, please make your request in writing.

C. Submissions and Settlements
Rule 5(c) of the Commission's Rules on Informal and Other Procedures, 17 CFR 202.5(c), states:
Persons who become involved in ... investigations may, on their own initiative, submit a written
statement to the Commission setting forth their interests and position in regard to the subject matter
of the investigation. Upon request, the staff, in its discretion, may advise such persons of the
general nature of the investigation, including the indicated violations as they pertain to them, and
the amount of time that may be available for preparing and submitting a statement prior to the
presentation of a staff recommendation to the Commission for the commencement of an
administrative or injunction proceeding. Submissions by interested persons should be forwarded to
the appropriate Division Director or Regional Director with a copy to the staff members conducting
the investigation and should be clearly referenced to the specific investigation to which they relate.
In the event a recommendation for the commencement of an enforcement proceeding is presented
by the staff, any submissions by interested persons will be forwarded to the Commission in
conjunction with the staff memorandum.
The staff of the Commission routinely seeks to introduce submissions made pursuant to Rule 5(c) as evidence in
Commission enforcement proceedings, when the staff deems appropriate.
Rule 5(f) of the Commission's Rules on InfolT11al and Other Procedures, 17 CFR 202.5(f), states:
In the course of the Commission's investigations, Civil lawsuits, and administrative proceedings, the
staff, with appropriate authorization, may discuss with persons involved the disposition of such
matters by consent, by settlement, or in some other manner. It is the policy of the Commission,
however, that the disposition of any such matter may not, expressly or impliedly, extend to any
criminal charges that have been, or may be, brought against any such person or any
recommendation with respect thereto. Accordingly, any person involved in an enforcement matter
before the Commission who consents, or agrees to consent, to any judgment or order does so
solely for the purpose of resolving the claims against him in that investigative, civil, or
administrative matter and not for the purpose of resolving any criminal charges that have been, or
might be, brought against him. This policy reflects the fact that neither the Commission nor its staff
has the authority or responsibility for instituting, conducting, settling, or otherwise disposing of
criminal proceedings. That authority and responsibility are vested in the Attorney General and
representatives of the Department of Justice.
O. Freedom of Information Act

The Freedom of Infonnation Act, 5 U.S.C. 552 (the "FOIA"), generally provides for disclosure of information to the
public. Rule 83 of the Commission's Rules on Information and Requests, 17 CFR 200.83, provides a procedure by
which a person can make a written request that information submitted to the Commission not be disclosed under the
FOIA. That rule states that no determination as to the validity of such a request will be made until a request for
disclosure of the information under the FOIA is received. Accordingly, no response to a request that information not
be disclosed under the FOIA is necessary or will be given until a request for disclosure under the FOIA is received. If
you desire an acknowledgment of receipt of your written request that information not be disclosed under the FOIA,
please provide a duplicate request, together with a stamped, self~addressed envelope.

2

Page 161 of 178

EXHIBIT B, pg. 58 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 58 of 74 PageID 130

E. Authority for Solicitation of Information
Persons Directed to Supply Information Pursuant to Subpoena. The authority for requiring production of information is
set forth in the subpoena. Disclosure of the information to the Commission is mandatory, subject to the valid assertion
of any legal right or privilege you might have.
Persons Requested to Supply Information Voluntarily. One or more of the following provisions authorizes the
Commission to solicit the information requested: Sections 19 andlor 20 of the Securities Act of 1933; Section 21 of
the Securities Exchange Act of 1934; Section 321 of the Trust Indenture Act of 1939; Section 42 of the Investment
Company Act of 1940; Section 209 of the Investment Advisers Act of 1940; and 17 CFR 202.5. Disclosure of the
requested information to the Commission is voluntary on your part.

F. Effect 01 Not Supplying Inlonmation
Persons Directed to Supply Information Pursuant to Subpoena. If you fail to comply with the subpoena, the
Commission may seek a court order requiring you to do so. If such an order is obtained and you thereafter fail to
supply the information, you may be subject to civil and/or criminal sanctions for contempt of court. In addition, if the
subpoena was issued pursuant to the Securities Exchange Act of 1934, the Investment Company Act of 1940, and/or
the Investment Advisers Act of 1940, and if you, without just cause, fail or refuse to attend and testify, or to answer
any lawful inquiry, or to produce books, papers, correspondence, memoranda, and other records in compliance with
the subpoena, you may be found guilty of a misdemeanor and fined not more than $1,000 or imprisoned for a term of
not more than one year, or both.
Persons Requested to Supply Information Voluntarily. There are no direct sanctions and thus no direct effects for
failing to provide all or any part of the requested information.

G. Principal Uses of Infonnation
The Commission's principal purpose in soliciting the information is to gather facts in order to determine whether any
person has violated, is violating, or is about to violate any provision of the federal securities laVv'S or rules for which
the Commission has enforcement authority, such as rules of securities exchanges and the rules of the Municipal
Securities Rulemaking Board. Facts developed may, however, constitute violations of other laVv'S or rules. Information
provided may be used in Commission and other agency enforcement proceedings. Unless the Commission or its staff
explicitly agrees to the contrary in writing, you should not assume that the CommiSSion or its staff acquiesces in,
accedes to, or concurs or agrees with, any pOSition, condition, request, reservation of right, understanding, or any
other statement that purports, or may be deemed, to be or to reflect a limitation upon the Commission's receipt, use,
disposition, transfer, or retention, in accordance with applicable law, of information provided.

H. Routine Uses of Information
The CommiSSion often makes its files available to other governmental agencies, particularly United States Attorneys
and state prosecutors. There is a likelihood that information supplied by you will be made available to such agencies
where appropriate. Whether or not the Commission makes its files available to other governmental agencies is, in
general, a confidential matter between the Commission and such other governmental agencies.
Set forth below is a list of the routine uses which may be made of the information furnished.
1. To appropriate agencies, entities, and persons when (a) it is suspected or confirmed that the security or
confidentiality of information in the system of records has been compromised; (b) the SEC has determined that, as a
result of the suspected or confirmed compromise, there is a risk of harm to economic or property interests, identity
theft or fraud, or harm to the security or integrity of this system or other systems or programs (whether maintained by
the SEC or another agency or entity) that rely upon the compromised information; and (c) the disclosure made to
such agencies, entities, and persons is reasonably necessary to assist in connection with the SEC's efforts to
respond to the suspected or confirmed compromise and prevent, minimize, or remedy such harm.
2. To other federal, state, local, or foreign law enforcement agencies; securities self-regulatory organizations; and
foreign financial regulatory authorities to assist in or coordinate regulatory or law enforcement activities with the SEC.
3. To national securities exchanges and national securities associations that are registered with the SEC, the
Municipal Securities Rulemaking Board; the Securities Investor Protection Corporation; the Public Company
Accounting Oversight Board; the federal banking authorities, including, but not limited to, the Board of Governors of
the Federal Reserve System, the Comptroller of the Currency, and the Federal Deposit Insurance Corporation; state
securities regulatory agencies or organizations; or regulatory authOrities of a foreign government in connection with
their regulatory or enforcement responsibilities.

3

Page 162 of 178

EXHIBIT B, pg. 59 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 59 of 74 PageID 131

4. By SEC personnel for purposes of investigating possible violations of, or to conduct investigations authorized by,
the federal securities laws.
5, In any proceeding where the federal securities laws are in issue or in which the Commission, or past or present
members of its staff, is a party or othel'Nise involved in an official capacity.
6. In connection with proceedings by the Commission pursuant to Rule 102(e) of its Rules of Practice, 17 CFR
201.102(e).
7. To a bar association, state accountancy board, or other federal, state, local, or foreign licensing or oversight
authority; or professional association or self·regulatory authority to the extent that it performs similar functions
(including the Public Company Accounting Oversight Board) for investigations or possible disciplinary action.
8. To a federal, state, local, tribal, foreign, or international agency, if necessary to obtain information relevant to the
SEC's decision concerning the hiring or retention of an employee; the issuance of a security clearance; the letting of
a contract; or the issuance of a license, grant, or other benefit.
9. To a federal, state, local, tribal, foreign, or international agency in response to its request for information
concerning the hiring or retention of an employee; the issuance of a security clearance; the reporting of an
investigation of an employee; the letting of a contract: or the issuance of a license, grant, or other benefit by the
requesting agency, to the extent that the information is relevant and necessary to the requesting agency's decision on
the matter.
10. To produce summary descriptive statistics and analytical studies, as a data source for management information,
in support of the function for which the records are collected and maintained or for related personnel management
functions or manpower studies: may also be used to respond to general requests for statistical information (without
personal identification of individuals) under 1he Freedom of Information Act.
11. To any trustee, receiver, master, special counsel, or other individual or entity that is apPOinted by a court of
competent jurisdiction, or as a result of an agreement between the parties in connection with litigation or
administrative proceedings involving allegations of violations of the federal securities laws (as defined in section
3(a)(47) of the Securities Exchange Act of 1934, 15 U.S.C. 78c(a)(47)) or pursuant 10 the Commission's Rules of
Practice, 17 CFR 201.100 - 900 or the Commission's Rules of Fair Fund and Disgorgement Plans, 17 CFR
201.1100-1106, or otherwise, where such trustee, receiver, master, special counsel, or other individual or entity is
specifically deSignated to perform particular functions with respect to, or as a result of, the pending action or
proceeding or in connection with the administration and enforcement by the Commission of the federal securities laws
or the Commission's Rules of Practice or the Rules of Fair Fund and Disgorgement Plans.
12. To any persons during the course of any inquiry, examination, or investigation conducted by the SEC's staff, or in
connection with civil litigation, if the staff has reason to believe that the person to whom the record is disclosed may
have further information about the matters related therein, and those matters appeared to be relevant at the time to
the subject matter of the inquiry.
13. To interns, grantees, experts, contractors, and others who have been engaged by the Commission to assist in
the performance of a service related to this system of records and who need access to the records for the purpose of
assisting the Commission in the efficient administration of its programs, including by performing clerical,
stenographic, or data analysis functions, or by reproduction of records by electronic or other means. Recipients of
these records shall be required to comply with the requirements of the Privacy Act of 1974, as amended, 5 U.S.C.
552a.
14. In reports published by the Commission pursuant to authority granted in the federal securities laws (as such teon
is defined in section 3(a)(47) of the Securities Exchange Act of 1934, 15 U.S.C. 78c(a)(47)), which authority shall
include, but not be limited to, section 21(a) of the Securities Exchange Act of 1934, 15 U.S.C. 78u(a».
15. To members of advisory committees that are created by the Commission or by Congress to render advice and
recommendations to the Commission or to Congress, to be used solely in connection with their official deSignated
functions.
16. To any person who is or has agreed to be subject to the Commission's Rules of Conduct, 17 CFR 200.735-1 to
200.735-18, and who assists in the investigation by the Commission of possible violations of the federal securities
laws (as such term is defined in section 3(a)(47) of1he Securities Exchange Act of 1934,15 U.S.C. 78c(a)(47)), in the
preparation or conduct of enforcement actions brought by the Commission for such violations, or otherwise in
connection with the Commission's enforcement or regulatory functions under the federal securities laws.

4

Page 163 of 178

EXHIBIT B, pg. 60 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 60 of 74 PageID 132

17. To a Congressional office from the record of an individual in response to an inquiry from the Congressional office
made at the request of that individual.
18. To members of Congress, the press, and the public in response to inquiries relating to particular Registrants and
their activities, and other matters under the Commission's jurisdiction.
19. To prepare and publish infoOllation relating to violations of the federal securities laws as provided in 15 U.S.C.
78c(a)(47», as amended.
20. To respond to subpoenas in any litigation or other proceeding.
21. To a trustee in bankruptcy.
22. To any governmental agency, governmental or private collection agent, consumer reporting agency or
commercial reporting agency, governmental or private employer of a debtor, or any other person, for collection,
including collection by administrative offset, federal salary offset. tax refund offset, or administrative wage
garnishment, of amounts owed as a result of Commission civil or administrative proceedings.

*****
Small Business Owners: The SEC always welcomes comments on how it can better assist small businesses. If you
would like more information, or have questions or comments about federal securities regulations as they affect small
businesses, please contact the Office of Small Business Policy, in the SEC's Division of Corporation Finance, at 202~
551-3460. If you would prefer to comment to someone outside of the SEC, you can contact the Small Business
Regulatory Enforcement Ombudsman at http://www.sba.govlombudsmanortollfreeat888-REG-FAIR. The
Ombudsman's office receives comments from small businesses and annually evaluates federal agency enforcement
activities for their responsiveness to the special needs of small business.

5

Page 164 of 178

EXHIBIT B, pg. 61 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 61 of 74 PageID 133

V.S. Securities and Exchange Commission

Data Deliver\' Standards

rhe il)l\tming outlines the tcchnical requircmcllb l;x proJul'ing scanned papr.:r coikClions. email :.lilt..! elr.:drnnic dncumcnl
nati\e lile cnl!eetiuns to till' Sc..::uritks :1nJ J::-..changc Commission. 'J he SEC u.c,cs Rl'commind.R AXCl!iCl"llfC \4.5 so!tw:1rc In
search. re\'ie\\' and retric\ l' documents produced to us in l'b:trnnic !!.)J"I11at. Any pruposcd production in :l Il)fJnat other than
those idcntilied beID\\'. the proposed usc of P"ediC!in~ ('oiling. COll1pll!cr~t1Ssi.\·ICd n:l'iC\l' t)r Technol(}gy-(!s.~is!ed rel'iell' (TAR).
or Ihe usc of dc-duplkation during the processing oj' t.!ol'umcnts, must be discussed with and appron~d by the kgal and
technical swtr of the Di\ ision tlf Enforcement (Ei\F) and the IlH.'thot..!oh)g) musl be discillsed in the cm'e!" k'ttet". We appreciate
) our efjl.)I1S in assisting us by preparing data in a formal that wiljcnubk our sl~dr to usc the data dTidl'ntly.

(jenerallnstructions
Form~lts ..

[)cli\-cr)

t.

............•. 1

Structured Data - «ollco/"(lance)1, hmnat.

. ........ 2

. .......... -o

[. Jmages.

........ :2

2. Concordance Image:i< Cross-Rckrcllrc Fik ..
.1.

COllcord.wcdi. Dat.l Fik ..

. .3

.6

4. Text.

......... 6

5. Linked Native Fill's ..
I!.

...... 6

\;;nhe File Production.

Ill. Audio Files ...

. ........ 6

IV. Video Files ...

.. 7

V.

... 7

Electronk Trade and Bunk Recurds ..

..7

VI. Ekctronic Phone Rl'cords.

Gcncrallnstructions
1. A cover letter shuuld bl' included \\'jlh each proJuclil)l1. Iilis !('l!('/" .HC.\T he iilhlgcd and prOl'ided as lhi.!firSl record
inlhe load/lie.
The following information should bl' included in thl' Ictll:r:
a. l.ist oj' eueh picl.:e or media (harJ Jri\"c. thumb ol"i\'c. DVJ) or CD) included in the pruJuclion b) tile unique
number assigned ttl it. and readily apparent on the physical llll'Ji:.l.
b. l.ist ofcustudians. identilYing:
1) The Bates range (and any g;lpS therein) fur each cu~todian
2) rutal nUmb('I' ofrc("orJs for eJcll custodian
3) "1"01:11 number of images ll)r each cllstndian
4) Total numbCl' of natj\'(.; lilt·s l(ll" cach cu.c,todian
c. List of lie Ids in thc order in \\hich till')" arc listed in thl" t..!ala tile.
J. Time ZOIlI." in \\hidl emaib wen.:: stanJarJiLed Juring c()l1\"Crsion (email col!cL'lion~ on!)).
f
Documents created tlr stored electronically \-1LST be pnlduccd in their original electronic formal. I)\l! printed to p~!pcr
or PDF.

CD, DVD or hard drin:; use !he media requiring rhe !eos{number (!f de!il'{'!"able.l.

3.

D<Ha can be produced

4.

Labl"1 all media \\itll the 1()llowing:
a. Case numb:r
b. Production ddte
c. Bates r:.ll1ge
d. Disk number (1 of X). if applicabk

(Rc\ ised

01 iJ 7.:20 13)

011

- I -

Page 165 of 178

EXHIBIT B, pg. 62 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 62 of 74 PageID 134
U.S. Securities and Exchange Commission
Data Delivery Standards

5.
6.
7.
8.

Organize productions by custodian, unless otherwise instructed. AI! documents from an individual custodian should
be confined to a single load file.
All productions should be checked and produced free of computer viruses.
All produced media should be encrypted.
Passwords for documents, files, compressed archives and encrypted media should be provided separately either via
email or in a separate cover letter from the data.

Delivery Formats
I.

Structured Data * Concordance® Format
The SEC prefers that all data be produced in structured format prepared for Concordance®. All scanned paper, email and
native file collections should be converted I processed to TIFF files, Bates numbered, and include fully searchable text.
Additionally, email and native file collections should include linked native files.
Bates numbering documents:
The Bates number must be a unique, consistently formatted identifier, i.e., an alpha prefix along with a fixed length
number for EACH custodian, i.e., ABCOOOOOOI. This format MUST remain consistent across all production numbers for
each custodian. The number of digits in the numeric portion of the fonnat should not change in subsequent productions,
nor should spaces, hyphens, or other separators be added or deleted.
The following describes the specifications for producing image-based productions to the SEC and the load files required
for Concordance® and Concordance Image®.
1.

[mages
a. Images should be single-page, Group IV TIFF files, scanned at 300 dpi.
b. File names cannot contain embedded spaces.
c. Bates numbers should be endorsed on the lower right corner of all images.
d. The number of TIFF files per folder should not exceed 500 files.
e. Rendering to images PowerPoint, AUTOCADI photographs and Excel files:
1) PowerPoint: All pages of the file should be scanned in full slide image fonnat, with any speaker notes
following the appropriate slide image.
2) AUTOCADI photographs: If possible, files should be scanned to single page JPEG (JPG) file fonnat.
3) Excel: TIFF images of spreadsheets are not useful for revie\\' purposes; because the imaging process can
often generate thousands of pages per file, a placeholder image, named by the IMAGEID of the file, may be
used instead.

2.

Concordance Image® Cross- Reference File
The image cross-reference file is needed to link the images to the database. It is a comma-delimited file consisting of
seven fields per line. There must be a line in the cross-reference file for every image in the database.
The format is as follows:
ImagelD, VolumeLabel,lmageFilePath.DocumentBreak,FolderBreak,BoxBreak,PageCount
ImagelD:

The unique designation that Concordance® and Concordance Image® use to identify an image.
Note: This imagelD key must be a unique andfu:ed length number. This number will be used in the
.DAT file as the ImagelD field that links the database to the images. The format of this image key
must be consistent across all productions. We recommend that the format be a 7 digit number to
allow for the possible increase in the si:e ofa production

VolumeLabel:

Optional

imageFilePalh:

The full path to the image file.

DocumentBreak: The letter "Y" denotes the first page of a document. If this field is blank, then the page is not the
first page of a document.
FolderBreak:

Leave empty

BoxBreak:

Leave empty

PageCount:

Optional

(Revised 01117/2013)

-2-

Page 166 of 178

EXHIBIT B, pg. 63 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 63 of 74 PageID 135
U.S. Securities and Exchange Commission
Data Delivery Standards

Sarno Ie
IMG0000001" E:\OOl\IMGOOOOOO1. TIF, Y'"
IMG0000002"E :\001\1 MG0000002. TIF""
IMG0000003"E:\001 \1 MG0000003. TIF ""
IMG0000004" E:\OOl \IMGOOOOO03. TIF, Y'"
I MGOOOOOOS"E:\OOl \IMG0000003. TIF, Y'"
I MGOOOOOO6"E:\OOl \IMG0000003. TIF""

3.

Concordance® Data File
The data file (.DAT) contains all of the fielded information that will be loaded into the Concordance® database.

a.
b.

The first line of the .DAT file must be a header row identifying the field names.
The .DAT file must use the following Concordance® default delimiters:
Comma
~
ASCII character (020)
Quote
p
ASCII character (254)
Newline
®
ASCII character (174)

c.
d.
e.

Date fields should be provided in the format: mmidd/yyyy
All attachments should sequentially follow the parent document/email.
All metadata associated with email, audio files, and native electronic document collections must be produced (see
pages 4-5).

f.

The .DAT file for scanned paper collections must contain. at a minimum, the following fields:
1) FIRSTBA TES: Beginning Bates number
2) LASTBATES: Ending Bates number
3) IMAGEID:
Image Key field
4) CUSTODIAN: Individual from whom the document originated
5) OCRTEXT:
Optical Character Recognition (file path, or text)
Sample of .DAT file (when text files are provided separately)
l>FIRSIBAIrSl>1l>llSIBAIrSl>~l>I~.J\GrIDl>~l>CUSTOOIAl!l>~POCRTrxTl>

pPC00000001:pllpPCOOOO 0 o02p~pn!Gooooo Olpll:PSmi th, JohnpllpE: \ IEXl\PC 0000000 1. TXT!::
pPC00000003p1lpPC00000003pllpIMGOOQ0003pllpSmith, Johnpllp£:\TEXT\PCOOOOOD03.rXrp
pPC00000004p'11pPCOOOOO 005pllpIMG0000004pllpSmi th, Jchnp'11pE: \TEXT\F-::00000004. IXrp

Sample of .DAT file (with text)
l>FIRSTEATESl>~pllSTBATESl>~pIY.J\GrIDp~I>-'1JSTCDIANj;~l>C-CRTD<Tl>

ppcoOOOOOOlpllpK00000002pllpIY.;GOOOOOOlp'llPSmith, Johnpll:p"'** IMGOO(iOOOl *HNlIhe world o!
investin-q is fa.!!lcinatinq and cClr;plex, and it can be very fruitful. But unlike the banking
world, where deposits are guaranteed by the federal government, stecks, bonds and other
securitieg can loge value. There are n::l guarantee.!!!. That'S ,.,hy investinq is not a :spectate::::
epor't. B;{ far the best war fer inveBtors to pret;ect the money they put into the securitieB
markets is to do research and ask questicns.N H'" IMGO(l00002 *"'*NThe laws and rules that
govern the securities imiustry in the United States derive from a simple and
straightforward concept: all investors, whether large institutions ar private individuals,
.should have access to certain basic facts about an invest::n:.ent prier to cuying it, and so
lcnq a.3 they held it. 10 achieve thi.3. t:he SEC require.3 public ccn:panies to disclose
meaningful financial and other infcrlI":atic!l. to the public. 1M;! I=ravide.3 a cammon peol c!
i"Tlcwledqe for all investors to use tc judge in therr.5elve.3 whether to bU::{, sell, or held a
particular security. Only thrauqh the "teady flow af timel;,', cOlr.preherlsi ....e. and accura.te
informa~ion can people make sound inve"tment decisions.p
pFCOOQ00003:P~pPC00000003p~pI¥~0000003pllpSmith, ~ohnpllp***IP~0000003 *"'*~The result of this
inf::lrma~ion flow is a far more active, efficient, and transparent capital :rr~rket that
facilitates ~e capital formation so important; to our nation'S eeencn:y.p
pPC00000004pllpPC00000005p~PIHGOOQ0004p~pSmith, Johnp~p * .... IHG0000004 **·~10 insure that
tilis cbjecti...·e is always being Jr:et, the SEC ccnt;inuall~' \,"crk! ..1 th all n:ajar market
participants, includinq espeCl.all::.' the in-.:e.!tors in cur "ecuritie.3 market:s, to listen to
'their concern!'! and to learn from their experience . . . . . '" IMGOD00005 H*Nlhe SEC everBees
the key participants in ~he eecurities world, includinq Beeurit:ie3 exchange5, Becurities
nrc-Jeers and dealers, investrrrent advisor3, and rrlltual funds. Here the SEC i3 concerned
primarily wit:h prc~~inq the dieclosure of imp-ortant lr,G;rli:et-related infermati:n,
Jr,a1ntaining fair dealing, end prot:ectinq against fraud.p

(Revised 01/17/2013)

-3-

Page 167 of 178

EXHIBIT B, pg. 64 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 64 of 74 PageID 136
U.S. Securities and Exchange Commission
Data Delivery Standards

The text and metadata of Email and the attachments, and native file document collections should be extracted and
provided in a .DA T file using the field definition and fonnatting described below:

LASTBATES

EDCOOOOOOI
populated

ATTACH RANGE

EDCOOOOOOI - EDCOOOOOl5

EDC0000002; EDCOOOOO 14

Bates number of the first page of the parent
document to the Bates number of the last page of the
last
"child" document

First Bates
parent
"This PARENT_ BATES field should be populated
in each record representing an attachment "child"
document
First Bates
"child" attachment(s); can be
more than one Bates number listed depending on the
number of attachments
"The CHILD_BATES field should be populated in

Board ;V"'"U"g lV'llm""'

o

.msg

MSG
FILE_EXTEN

(Revised 01/17/2013)

MSG

-4-

Page 168 of 178

EXHIBIT B, pg. 65 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 65 of 74 PageID 137
U.S. Securities and Exchange Commission
Data Delivery Standards

1011

Email: (empty)
Native: Time the document was created
**This data must be a separate field and cannot be
combined with
TE
Email: (empty)
Native: Date the document was last modified

10

1011212010

Agenda.doc

Iterns\Board Meeting

text
Sent: Tuesday. October 12,
2010 07:05 PM
To: Coffman, Janice
Subject: Board Meeting
Minutes
Janice;
Attached is a copy of the
September Board Meeting
Minutes and the draft agenda
for October. Please let me
know if you have any
questions.
John Smith
Assistant Director
Information Technology
Phone: (202)555-1111
Fax: (202) 555-1112
Email: jsmith@xyz.com

(Revised 0111712013)

-5-

Page 169 of 178

EXHIBIT B, pg. 66 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 66 of 74 PageID 138
U.S. Securities and Exchange Commission
Data Delivery Standards

4.

Text
Searchable text of the entire document must be provided for every record, at the document level.
a.

Extracted text must be provided for all documents that originated in electronic format. The text files should
include page breaks that correspond to the 'pagination' of the image files. Note: Any document in which text
cannot be extracted must be OCR'd, particularly in the case ofPDFs without embedded text.

b.

OCR text must be provided for all documents that originated in hard copy format. A page marker should be
placed at the beginning, or end, of each page of text, e.g. *"'* IMGOOOOOOI *** whenever possible. The data
surrounded by asterisks is the Concordance® ImagelD .
Sample page markers with OCR text:

*** IMGOOOOOOI ***
Thc wurld ofin\'csting is fascimHing and ~omplcx, and it can bc \'cry fruitful. BUllll1likc the
banking \-\·orld. \vhere deposits are guaranteed by the fedcral govcmnlent. stocks, honds and other
securities can lose value. Therc an..' no guarantees. That's why investing is not a spectatur sport. By
far the hest way for investors to protect the mOlley they put into the securities markets is to do
research and ask questions.

*** IMG0000002 ***
The laws and rules that govern the securities industry in the United States derive hom a simple and
straightfonvard concept: all invesLors, wh(,.-ther large institutions or private indi",iduals, should have
access to certain basic facts about an investment prinr to buying it. and sn long as they hold it. To
achieve lhis, the SIX: requires public companies to disclose meaningful linancial and other
information to the public. This provides a common pool ofknowkdge t()r aU investors to usc to
judge for themselves whether to buy, sell. or hold a particular scew"itl', Only through the steady
110v.' of timely , comprehensive, and accurate information cun people make sound investment
decisions.

S.

c.

For redacted documents, provide the ful! text for the redacted version.

d.

Delivery
The text can be delivered two ways:
1) As multi·page ASCII text files with the files named the same as the ImagelD field. Text files can be placed in
a separate folder or included with the .TIF files. The number of files per folder should be limited to 500 files.
2) Included in the .DAT file.

Linked Native Files
Copies of original email and native file documents/attachments must be included for all electronic productions.
a. Native file documents must be named per the FIRSTBA TES number.
b. The full path of the native file must be provided in the .DAT file for the LINK field.
c. The number of native files per folder should not exceed 500 files.

II.

Native File Production
The SEC will also accept native file productions. The files must be produced as they are maintained in the normal course
of business. Data must be organized by custodian named file folders.

III.

Audio Files
Audio files from telephone recording systems must be produced in a format that is playable using Microsoft Windows
Media Player™. Additionally, the call information (metadata) related to each audio recording MUST be provided. The
metadata file must be produced in a delimited text format. Field names must be included in the first row of the text file.
The metadata must include, at a minimum, the following fields:
I)
2)
3)
4)

Caller Name:
Originating Number:
Called Party Name:
Terminating Number:

(Revised 01/17/2013)

Caller's name or account/identification number
Caller's phone number
Called party's name
Called party's phone number
- 6-

Page 170 of 178

EXHIBIT B, pg. 67 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 67 of 74 PageID 139
U.S. Securities and Exchange Commission
Data Delivery Standards

IV.

V.

5)

Date:

6)

Time:

7)

Filename:

Date of call
Time of call
Filename of audio file

Video Files
Video files must be produced in a fonnat that is playable using Microsoft Windows Media Player™.
Electronic Trade and Bank Records
When producing electronic trade and bank records, provide the files in one of the following formats:

VI.

1.

MS Excel spreadsheet with header information detailing the field structure. If any special codes exist in the dataset, a
separate document must be provided that details all such codes. If details of the field structure do not fit in the header,
a separate document must be provided that includes such details.

2.

Delimited text file with header information detailing the field structure. The preferred delimiter is a vertical bar "I". If
any special codes exist in the dataset, a separate document must be provided that details all such codes. If details of
the field structure do not fit in the header, a separate document must be provided that includes such details.

Electronic Pbone Records
When producing electronic phone records, provide the files in one of the following fonnats:
1.

MS Excel spreadsheet with header information detailing the field structure. If any special codes exist in the dataset, a
separate document must be provided that details all such codes. If details of the field structure do not fit in the header,
a separate document must be provided that includes such details. Data must be fonnatted in its native fonnat (Le.
dates in a date format, numbers in an appropriate numerical fonnat, and numbers with leading zeros as text).

2.

Delimited text file with header information detailing the field structure. The preferred delimiter is a vertical bar "I". If
any special codes exist in the dataset, a separate document must be provided that details all such codes. If details of
the field structure do not fit in the header, a separate document must be provided that includes such details.

The metadata must include, at a minimum, the following fields in separate columns:
I)
2)
3)
4)
5)

Account Number:
Originating Number:
Terminating Number:
Connection Date:
Connection Time:

6) End Time:
7) Elapsed Time:

Caller's telephone account number
Caller's phone number
Called party's phone number
Date of call
Start time of call
End time of call
Duration in minutes of the call

Each field of data must be loaded into a separate column. For example, Connection Date and Connection Time must be
produced in separate columns and not combined into a single column containing both pieces of infonnation. Any fields of
data that are provided in addition to those listed here must also be loaded into separate columns.

(Revised 01117/2013)

-7-

Page 171 of 178

EXHIBIT B, pg. 68 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 68 of 74 PageID 140

DECLARATION OF SERVERGY, INC. CERTIFYING RECORDS
OF REGULARLY CONDUCTED BUSINESS ACTIVITY
I, the undersigned, [insert name], pursuant to 28 U.S.C. § 1746, declare that:

I. I am employed by Servergy, Inc. as [insert position] and by reason of my position am
authorized and qualified to make this declaration. [ifpossible supply additional
information as to how person is qualified to make declaration, e.g., I am custodian of
records, I amfamiliar with the company's recordkeepingpractices or systems, etc.]
2. I further certify that the documents [attached hereto or submitted herewith] and stamped
[insert bates range] are true copies of records that were:
(a) made at or near the time of the occurrence of the matters set forth therein, by, or from
information transmitted by, a person with knowledge of those matters;
(b) kept in the course of regularly conducted business activity; and
(c) made by the regularly conducted business activity as a regular practice.
I declare under penalty of perjury that the foregoing is true and correct. Executed on
[date].

[Name]

Page 172 of 178

EXHIBIT B, pg. 69 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14
UPS CampusShip: Shipment Label

Page 69 of 74 PageID 141
Page 1 of 1

UPS CampusShip: View/Print Label
1. Ensure there are no other shipping or tracking labels attached to your package. Select the
Print button on the print dialog box that appears. Note: If your browser does not support this function
select Print from the File menu to print the label.
2. Fold the printed sheet containing the label at the line so that the entire shipping label is visible.
Place the label on a single side of the package and cover It completely with clear plastic
shipping tape. Do not cover any seams or closures on the package with the label. Place the
label in a UPS Shipping Pouch. If you do not have a pouch. affix the folded label using clear plastic
shipping tape over the entire label.
3. GETTING YOUR SHIPMENT TO UPS
UPS locations include the UPS Store®, UPS drop boxes, UPS customer centens, authorized
retail outlets and UPS drlvens.
Schedule a same day or future day Pickup to have a UPS driver pickup all your CampusShip
packages.
Hand the package to any UPS driver in your area.
Take your package to any location of The UPS Store®, UPS Drop Box. UPS Customer Center. UPS
Alliances (Office Depot® or Staples®) or Authorized Shipping Outlet near you. Items sent via UPS
Return Services(SM) (including via Ground) are also accepted at Drop Boxes. To find the location
nearest you. please visit the Resources area of CampusShip and select UPS Locations.
Customens with a Daily Pickup
Your driver will pickup your shipment(s) as usual.

FOLD HERE
.--,,-~".".--'

....

!

~

0

....

....~

L!)

00
0

til

....t:Q

C'iI

....
0
I

j

0

d

Ul'

tJ
tJ

0

C'iI

L!)

~r-..

°z GJ« ~
~o
co

Z
~~~88Zs

M

0

:;;
~

~I-~
~~~~i:
ell

"''''

_'9I-c::o
~

~QO:'::w~

<So&!Of-

~~U .... :.::

;~g~

.. '" gj " :;:
~Ul5"';o

is O'Ul 0

e: '"
:I:

til

~.

M
MI
0\
C\1

,~

=
i ~

an
r....

g

--

~

!!!!!!!!!!!!
~--

~-N
-

;8

"'""'5

0'

~

0.[;1
<;;:[;1

0[2

1;; i'l Cl

z<

~~

til

Q3Vi

Page 173 of 178

~
~

N

:8

;;;
"
0

"~
.l!
"'"

EXHIBIT B, pg. 70 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 70 of 74 PageID 142
Squire Patton Boggs (US) LLP
2000 McKinney Avenue
Suite 1700

SQUIREC}
PATTON BOGGS

Dallas, TX 75201

o

214~758-1500

F
214-758-1550
sq uirepatto nboggs _com

S Cass Weiland
T
214-758-1504
Casso weHand@squirepb,com

October 15, 2014
VIA FEDERAL EXPRESS

CONFIDENTIAL TREATMENT
REQUESTED

ENF-CPU
US. Securities and Exchange Commission
100 F Street, N.E., Mailstop 5973
Washington, DC 20549-5973
Re:

In the Matter of Servergy, Inc. (FW-03828)

Dear Madam or Sir:
In response to your subpoena of September 16, 2014, please be advised as follows:
In response to request number 2, no responsive documents exist The chart titled "Comparing
Servergy to the Blade Server Competition" was created using information from the websites of
the other companies and there are no drafts of this chart.
In response to request number 3, the enclosed CD also contains a file titled "Williams Financial
Group Servergy Call" which was presented as a webinar. No other recorded webinar exists to
our knowledge.
By copy of this letter we are providing Ms. Cox with a copy of these documents.

:,t~u~

James T. Jacks
Enclosure
cc:

Servergy, Inc.
Samantha S. Cox, Esq.
U.S. Securities and Exchange Commission
Fort Worth Regional Office
801 Cherry Street, Suite 1900
Fort Worth, TX 76102 (w/enclosure)

44 Offices In 21 Countries
Squire Patton Boggs (US) LLP 'IS part of the IOternalionallegal practice Sqwire Patton Boggs, which operates worldwide through a number of separate
legal entities

EXHIBIT

Please VISit SQUIrepat1onboggs com for more information

4inJ·5121)-()21i:.l.

Page 174 of 178

EXHIBIT B, pg. 71 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 175 of 178

Page 71 of 74 PageID 143

EXHIBIT B, pg. 72 of 75

 -~'

Department: HQ/ENF

\

Mall Stop: 5973

~rgent

Building: SP3

® (J)

Package Type:

(J)

Sender Name:

!

(J)

!a.....

f'i
r rom:-"'O"'r"rg=rn"II"J-;:K"IP'"~"'(2"1"4)"7"58"'35=93
Donna Miller
SQUIRE PATTON BOGGS (US) LIP
2000 MCKINNEY AVENUE

STE 1700
DALLAS, TX 75201

320549911600000144833450541020

~

lID

1011612012 10:05:22

AM
v'''''''''t
Accouo!1t S ......~~."t'(~U~tl
.,~,~,,,,,.

(214)

7~8

1SlBIll SENDER

US Securities & Exchange Commission
ENF·CPU
100 F Street NE
Mailstop 5973

lontainer

~

Delivery Address 8m Code

IIIIIIII~IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII

CUI,ltMIUl'ollrn

SHIP 10

I

Washington, DC 20549
THU • 160CT
A2
PRIORITY OVERNIGHT

EXHIBIT B, pg. 73 of 75

;W,O~
~·.,"I,·".j
F<i'N_,"

DC-US

20549

Zd

\1 "9~~~v'

http://fedexonline: 8080/fsme~jsp/ShipAdaptcr.jsp
Page 176 of 178

10/15/20J 4

Page 72 of 74 PageID 144

lAD

'.

.

Iservlces,
dex.con

1'0#
Dept tt

XC-YKNA

onditions

\e FedEx
edEx Sen

Ref #
03:?729 0101
Invo!ce #

4483 3450 5410

Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

HQ·5c

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 73 of 74 PageID 145

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
BURNETT PLAZA, SUITE 1900
801 CHERRY STREET, UNIT #18
FORT WORTH, TEXAS 76102·6882
PHONE: (817) 978·3821
FAX: (817) 978·2700

IN REPLYING
PLEASE aUOTE

FW·03828

December 2,2014

VIA EMAIL AND UPS
Servergy, Inc.
c/o James T. Jacks
Squire Patton Boggs LLP
2000 McKinney Ave., Suite 1700
Dallas, TX 75201
Re:

In the Matter ojServergy. Inc. (FW-3828)

Dear Mr. Jacks:
I am writing in response to the telephone conversation that you initiated today at or
around 2: 15 p.m. CST. During our conversation, you stated that Servergy would be unable to
respond to the staffs proposal for resolving the outstanding subpoena response issues by
Wednesday, December 3, 2014. You indicated that Servergy planned to provide a written
response to the staff s proposal at some future date but did not provide a specific date for the
response. Additionally, you were unable to confirm whether Servergy planned to either accept
or reject the staff s proposal. Considering the length of time the subpoena response issues have
remained outstanding, the staff remains prepared to take further action without additional notice
including, but not limited to, filing an action in U.S. District Court to enforce compliance with
our SUbpoenas.
If you have any questions concerning this matter, you may contact me at (817) 978-5035
or at martins@sec.gov.

Sincerely,

/~/~
Samantha S. Martin
Staff Attorney

Page 177 of 178

EXHIBIT B, pg. 74 of 75

 Case 4:14-mc-00022-O Document 2-1 Filed 12/04/14

Page 74 of 74 PageID 146

https:llwww.campusship.ups.com/cship/create?ActionOriginPair=default_PrintWindowPage&... Page 1 of 1
UPS CampusShip: View/Print label
1, Ensure there are no other shipping or tracking labels attached to your package. Select the
Print button on the print dialog box that appears, Note: If your browser does not support this function
select Print from the File menu to print the label.
2. Fold the printed sheet containing the label at the line so that the entire shipping label is visible.
Place the label on a single side of the package and cover it completely with clear plastic
shipping tape. Do not cover any seams or closures on the package with the label. Place the
label in a UPS Shipping Pouch, If you do not have a pouch, affix the folded label using clear plastic
shipping tape over the entire label.
3, GETTING YOUR SHIPMENT TO UPS
UPS locations Include the UPS Store®, UPS drop boxes, UPS customer centers, authorized
retail outlets and UPS drivers.
Schedule a same day or future day Pickup to have a UPS driver pickup all your CampusShip
packages.
Hand the package to any UPS driver in your area.
Take your package to any location of The UPS Store@, UPS Drop Box, UPS Customer Center, UPS
Alliances (Office Depot® or Staples®) or Authorized Shipping Outlet near you. Items sent via UPS
Return Services(SM) (including via Ground) are also accepted at Drop Boxes. To find the location
nearest you, please visit the Resources area of CampusShip and select UPS Locations,
Customers with a Daily Pickup
Your driver will pickup your shipment(s) as usual.

FOLD HERE

...

'"....o

til

~

o
ci
~-­

~-N
-

:8

Page 178 of 178

EXHIBIT B, pg. 75 of 75