OT: Enzy: Update to Complaint (lawsuit with ARI)

[Guest guest]

Note: It is the format to mark all the posts concerning the

more " social " issues of enzymes and autism that have evolved over

the past months with " ENZY " . Please feel free to go to another post

if you are not interested in this topic.

Following is an update to the Complaint against ARI for their

libelous posts, publications, and information dissemination

concerning myself, an individual parent. There is a letter by my

lawyer followed by 15 attachments. There is value in these

attachments apart from the Complaint because they resolve a few

issues that have been under debate.

Copies of the original documents, showing letterheads and

signatures, are located in the Files section as .pdf:

/files/Complaint-

Update.pdf

Because accessing a .pdf is not always possible, the text only of

the documents follows and is also located in the Files:

/files/Complaint-Update

.

>>>>>>>>>>>>>>>>>>>>

LAW OFFICES

BURKE, WILLIAMS & SORENSEN, LLP

611 WEST SIXTH STREET, SUITE 2500

LOS ANGELES, CALIFORNIA 90017-3102

Tel: (213) 236-0600

Fax: (213) 236-2700

www.bwslaw.com

August 20, 2002

B.

Sheppard Mullin et al.

501 West Broadway 19th Floor

San Deigo, CA 92101-3598

Marc D. Adelman

One America Plaza

600 West Broadway 7th Floor

San Diego, CA 92101

Re: DeFelice v. Bernard Rimland et al/ San Diego Superior

Court Case No: IC 791230

Dear Gentlemen:

As you know, I represent DeFelice in the above-referenced

action, a suit that is of apparent widespread interest to the autism

community, as evidenced by the amount of internet postings and other

communications focusing on this dispute. Subsequent to the filing of

Ms. DeFelice's Complaint, I have been contacted by a large number of

people from around the country offering information, some reliable

and some not, in support of my client's position; unfortunately,

some very credible information relating to your clients' conduct is

quite disturbing and reflects conduct much more serious, and of a

larger scope, than the relatively narrow focus of the lawsuit. I

have attached some of these documents to show that I am not

just " blowing smoke. "

California Rule of Professional Conduct 5-100 (A) states:

" A member shall not threaten to present criminal, administrative, or

disciplinary charges to obtain an advantage in a civil dispute. "

California Rule of Professional Conduct 3-700 ( states that a

lawyer must withdraw from a case if, inter alia:

" (2) The member knows or should know that continued employment will

result in these Rules or the State Bar Act. "

Because we now have information, including the attached documents,

that relate your clients to potential tax evasion/income reporting

issues, violation of Federal Trade Commission regulations, and

patent validity matters, we have concluded that such items should be

dealt with by the appropriate governmental agencies and not by us in

this lawsuit. To that end, CRPC 3-700 and 5-100 mandate that we

withdraw from representing Ms. DeFelice in this action.

In discussing the ramifications of this situation with my client,

she has three basic options: (1) represent herself pro per, (2) find

another attorney to substitute into this case, or (3) dismiss

without prejudice, thereby preserving her right to refile within the

1 year limitations period. Because Ms. DeFelice resides in Iowa and

is not a lawyer, and because Ms. DeFelice may not be able to find

alternate counsel in time to adequately meet pending court

deadlines, my client rejected Options 1 and 2; accordingly, please

find attached the Entry Of Voluntary Dismissal terminating this case

without prejudice. If Ms. DeFelice chooses to refile later, you will

certainly be made aware of such circumstance.

Please note that Ms. DeFelice's choice to dismiss this suit at this

time should not be taken as a sign that she has no case; in fact,

the attached documents, especially the ones showing that Dr. Rimland

was publicly endorsing SerenAid for compensation while privately

expressing his severe misgivings about the product, fully support

many of the allegations in Ms. DeFelice's Complaint. 's

decision to dismiss the suit at this time is a result of my

inability to represent her, not the merits of her case.

Very truly yours,

STEPHEN R. ONSTOT

OF BURKE, WILLIAMS & SORENSEN, LLP

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ATTACHMENT 1

Memo

From : Dr. Jon Pangborn (Bionostics)

Dr. Bernie Rimland (Autism Research Institute); Ms. Farr

(Klaire Laboratories); Ilene Buchholz (Klaire Labs); Gene Lundstrom

(Klaire Labs, Anabolic).

Date: July 20, 1998

Subject: PEPTIDASE ENZYME DEVELOPMENT

Over the past two years we have endeavored to develop a digestive

peptidase enzyme that would be specifically targeted at casomorphins

and gluteomorphin dietary peptides. These opiate-acting dietary

peptides are known to be present at significant levels in blood and

urine of autistic individuals per clinical studies of Dr. Karl

Reichelt and others.

After a year of searching for safe, food-grade proteins with

essentially 100% peptidase activity, we located such a product in

Quebec at ABIASA Biotech, a small company run by Dr. G. Arora, whose

Ph.D. is in enzymology and peptidase chemistry. Specifications on

their peptidase were presented at the 1997 DAN! meeting in San Diego.

The peptidase must have an enteric coating to protect it from

stomach acid and to then allow it to become active in the small

intestine. Supporting nutrients would be combined with the

peptidase: zinc as citrate, and two amino acids: L-lysine and L-

arginine. The dosage of the peptidase itself is set at 6500 units

per capsule. Anabolic Laboratories (Gene Lundstrom) was to

manufacture a trial batch of about 20,000 capsules.

Because tablets may not be swallowed by young children and because

capsules would be opened and their contents mixed with food, we

opted for capsules. However, capsules cannot be enterically coated.

Therefore, the plan was to use calcium sulfate particles as a

nucleus, coat with peptidase, zinc, lysine and arginine, and to hold

the layers together with shellac. The resulting beads would then be

enteric coated. The small, coated beads could then be loaded into

gelatin capsules (#1 or #0). (Analysis for certification of content

could be done on recovered zinc.)

Unfortunately, Gene Lundstrom now reports that Anabolic Labs will

not be able to complete the manufacturing of the test batch. They

did two trial runs and managed a 50% recovery using a different

digestive enzyme as a test substance. However, manpower and company

commitments to their regular business prevents them from continuing

with this project, which they were kind enough to pursue at no

charge.

The present status is that we cannot move further without rather

sophisticated manufacturing. This will cost money, and Bionostics

(Jon Pangborn) and Klaire Labs ( Farr) have no more funds for

this project. The Autism Research Institute has also provided modest

funding; further funding needs could be significant.

Additionally, we now have the problem of locating a manufacturer

with the requisite capabilities. I welcome any suggestions or ideas.

However, we are, at this point, stalled on this project.

Sincerely,

Jon B. Pangborn, Ph.D.

Bionostics, Inc.

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ATTACHMENT 2

Letter

To Randall Wilkinson, M.D. (became President of Klaire Labs)

From Bernard Rimland (Autism Research Institute)

Date July 22, 1999

Dear Randy,

I enjoyed our conversation yesterday, and look forward to working

with you.

As you probably know, the peptidase enzyme project was started by

Jon Pangborn and myself 4 or 5 years ago, with this Institute

financing some of Jon's efforts to search for manufacturers in the

U.S., Asia and elsewhere who might be making the kinds of enzyme

needed. Clare learned about it, from Jon, I think, and wanted to

have Klaire Labs enter the picture as a partner, which was fine with

Jon and me.

Anyway, I phoned Jon last might to discuss the situation, and faxed

along to him the raw data that I also sent to you, showing that the

results are a long way from spectacular, thus far. I wanted to know

what he thought of my suggestion that we undertake phase 2 of the

trial, using the same people who participated in the first phase,

but this time with a double or triple dose of the enzyme. Jon

thought that would be a good idea, although he was much more in

favor of doubling the dose, rather than tripling it.

Jon told me something that I didn't know, but that you may be aware

of: Jon did not think that the peptidase products would do the job

alone, but that it should be part of a larger, more complete

package. The package would consist of 4 components:

1. the peptidase enzyme

2. Lactobacillus Gg based on a Finnish study

3. a Klaire Lab pro-biotic product containing 4 components " Vital-

Immune Biotics "

4. the amino acids glutamine 500+mg/day, arginine 500mg/day and

lysine 500mg/day

Jon said that during one of the phone conferences Dr. Houston had

indicated that he thought that the peptidase enzyme was sufficiently

strong to do the job by itself, whereas Jon argued in favor of the

above 4-part program. The physicians who were part of that

conversation voted in favor of Houston's idea, which was okay with

Jon, but he still thinks that the more comprehensive approach

outlined above would be more likely to be effective, even though it

is not as convenient to administer.

Jon made it clear that he has a great deal of respect for Dr.

Houston's knowledge and competence, but he felt that the problem in

autism was not quite as simple as replacing missing enzymes, but

instead involved healing the leaky gut with glutamine, tying up the

arabinose with arginine and lysine, etc., so the treatment, he

feels, should be a bit more complex than just giving the enzymes.

I am dictating this late Tuesday night. I will look forward to our

conference call Wednesday at 1:30.

Sincerely,

Bernard Rimland, Ph.D.

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ATTACHMENT 3

Letter

To Randal Wilkinson, M.D. (President of Klaire Labs)

From Bernard Rimland (Autism Research Institute)

Date September 23, 1999

Dear Randy,

A friend has just faxed to me a single page of what appears to be an

AAEM newsletter. The bottom half of the page is taken up with a

notice about an " AAEM Special Event " in which I will reportedly be a

participant. The event is a breakfast meeting on the morning of

Sunday, October 10th, at which I, Waickman and Devin Houston

will " discuss the very promising results of a recent clinical trial

using a Multi-Enzyme Peptidase formula with autistic children. "

I find this announcement distressing for several reasons:

I was not informed about this breakfast meeting. I had heard several

months ago that there might be a Sunday morning meeting at which the

autism conference speakers would be available for a question and

answer session, or something of the sort, but when I asked about

this of the people at the AAEM office, they said that such a meeting

was not scheduled, so I made my airline reservations accordingly.

Right now I am scheduled to leave Spokane at 8:30 a.m., which would

preclude my participation unless I were to reschedule my flights,

which my not be feasible.

A more serious concern is the claim in the announcement that " the

results of a recent clinical trial " of the peptidase formula

were " very promising. " I certainly have never said that. I would not

characterize the results of the first, low-dose, trial as

being " very promising, " and unless some spectacular data have been

collected in the meantime (I have not seen the data from the second

phase, since they are being sent directly to Ilene), I certainly

would not want to be represented as saying that the results were

very promising.

I hope that the announcement will get very limited distribution.

This is a particularly bad time for me to be quoted as saying

something is very promising in the absence of good evidence. I am

enclosing a copy of the editorial from the next issue of our

newsletter, which will be mailed out tomorrow, September 24th, to

about 10,000 subscribers and then placed on the internet.

As you can see from the editorial (I have circled several places)

there is a lot of fighting going on now in the autism world about

the scientific status of a number of interventions that I have been

supporting, including megavitamin therapy and the gluten/casein-free

diet. As you can see, I am arguing strongly that these interventions

have been scientifically proven and that there are a number of

published studies which demonstrate their efficacy. The last thing I

need at this stage of the game is for me to be misquoted as saying

that something is promising, when there are only very weak,

uncontrolled clinical trials underway.

If there is any way to limit the circulation of the announcement,

please do so.

Very sincerely,

Bernard Rimland, Ph.D.

P.S. I can talk about the peptidase during my several Saturday

afternoon talks and panel presentation. (I just called Bobbie

Hinshaw – fewer than 50 registrants for Saturday.).

>>>>>>>>>>>>>>>>>>>>

ATTACHMENT 4

Fax

To Randal Wilkinson, M.D. (Klaire), cc: Jim s (Klaire)

From Ilene Buchholz (Klaire)

Date October 25, 1999

RE: Autism Pilot Study Issues

Randy,

I spoke with Dr. Bernie Rimland this morning regarding sending out

correspondence to the participating families involved with the Multi-

Enzyme Pilot Study. Additionally I told him that we would be faxing

him the data results of the Phase II study for his review. He will

be leaving to go out of town on Wednesday but will review this

information before he leaves.

Bernie is interested in any decision that you and Jim have made in

relationship to compensating the Autism Research Institute with a

percentage of the SerenAid sales. Bernie will be attending several

more Autism meetings in the next two weeks. Additionally he has been

asked to write an article for a national magazine on the treatments

of autism. If he knows that there is an arrangement with Klaire Labs

then he will provide disclosure that the foundation is benefiting

from endorsing Klaire products.

If possible Bernie would appreciate a call or fax before he leaves

town so that he can feel free to express his connection with Klaire

Laboratories. Would you have an opportunity to give him a call at

(619) 281-7165 or fax him at (619) 563-6840 by the early afternoon

on Tuesday 26th? (He will be flying out on Wednesday morning the

27th).

The issue of processing the Urinary Polypeptides came up and Bernie

suggested that we consider having the families directly ship the

urine specimens to the Repligen Lab where Dr. Herlihy is CEO. I told

Bernie that I believe that you had talked with Dr. Herlihy and that

at this time it was best to ship specimens to Coeur d'Alene.

Because the Multi-Enzyme Pilot Study is co-sponsored by Klaire Labs

and the Autism Research Institute I faxed Bernie a copy, of the

proposed correspondence, for his editing and review. Attached please

find the first draft of this information. If you have any

suggestions, changes or corrections, to this material, please let me

know. I am hoping to get this follow-up material out by Wednesday of

this week since I will be leaving Thursday AM for the ACAM meetings.

Many thanks!

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ATTACHMENT 5

Letter

To (became President/CEO Klaire Labs)

From Bernard Rimland (Autism Research Institute)

Date April 4, 2000

Subject: SerenAid: Joint Project of Autism Research Institute and

Klaire Laboratories

As you no doubt are aware, the Autism Research Institute has funded

the research project resulting in the development of SerenAid, for

several years, prior to Klaire Laboratories joining the project as a

co-sponsor. Additionally, the Autism Research Institute has been

involved in the phase one and phase two clinical trials of SerenAid.

I have been keeping the ARI Board of Directors apprised of

developments involving SerenAid over the past few years, and I would

like to bring them up to date at our forthcoming Board meeting in

May. They will of course be particularly interested in the revenue

stream from the sales of SerenAid, since I have told them over the

years, that we do expect our investment in the product to bring

about some significant returns, both in the health and welfare of

autistic children, and to the treasury of the Autism Research

Institute.

Our agreement with Klaire Laboratories was that we would receive 3%

of the net profits, which I understand to mean 3% of the difference

between the price at which each unit is sold and the price paid for

that unit by Klaire Labs. (As you very probably know, Jon Pangborn

has donated his part of the profits from the sale of SerenAid to

ARI, and thus his share is included in our 3% portion.)

I would like to be able to provide our Board members with the

following information:

1. Date at which the sale of SerenAid was initiated (presumably this

would be soon after the October 3, 1999 date at which the

availability of SerenAid was announced at our DAN! Conference in New

Jersey).

2. The number of units sold since that time, and the net profit upon

which our 3% share is based.

3. The schedule (monthly, quarterly, etc.) upon which payments to

ARI will be made.

Thank you for your cooperation with this request. I look forward to

hearing from you.

Cordially,

Bernard Rimland, Ph.D.

P.S. I am leaving here am to DC (to testify at Congressional

hearings on autism) will be back in after Monday 10th. BR.

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ATTACHMENT 6

Letter

To (President/CEO Klaire)

From Bernard Rimland (Autism Research Institute)

Date April 11, 2000

Dear ,

I enjoyed our phone conversation Monday and am looking forward to

our lunch together on Tuesday, the 25th. I am sending along by mail

another copy of the map that I faxed to you, since faxes are often

unclear, and thus the map may be a bit confusing.

I have been mentally reviewing our conversation with regard to the

royalty payments to ARI for the sale of SerenAid. You mentioned that

the amount of profit thus far from the sale of SerenAid was a bit

unclear, because of such issues as lawyer's fees, etc. During our

discussions last year on the payment of royalties to ARI, a number

of different possible formulas were considered, most of them

involving a considerably higher royalty figure than the 3% that was

finally agreed upon. We agreed to the rather low 3% figure because

calculating the royalty to be paid was very simple, involving only 3

values (the number of units sold times the price per unit minus the

direct cost to Klaire Laboratories of the product itself). The other

formulas were rejected because they required making subjective

judgments as to what proportion of such things as attorney's fees,

floor space, utility bills, etc. were chargeable to the sale of

SerenAid.

So, under the circumstances, I would greatly appreciate being

supplied with the information requested at the end of my letter to

you of April 4th.

Very cordially,

Bernard Rimland. Ph.D.

>>>>>>>>>>>>>>>>>>>>

ATTACHMENT 7

Letter

To (President/CEO Klaire)

From Bernard Rimland (Autism Research Institute)

Date April 24, 2000

Dear ,

Welcome back! I hope you enjoyed your vacation.

I'm looking forward to our lunch tomorrow.

As you know, SerenAid was placed on the market after the positive

results of the first joint ARI-Klaire Laboratories SerenAid study

was announced at the ARI conference in October, 1999. It had been

agreed that the data for Study 1 would be collected from the parents

and the physician participants by ARI, with copies sent to Klaire

Laboratories; the data for Study 2 would be collected by Klaire

Laboratories, with copies sent to ARI.

Last week, Matt, the ARI employee who has been coordinating the ARI

data collection and analysis, called his counterpart at Klaire

Laboratories, Marcella, to ask about the status of the data being

collected by Klaire Laboratories. He was surprised to learn, as I

was, that Marcella had left. We were surprised to find that she had

left without sending us the data that had already been collected,

and without even telling us the status of the project nor of her

departure. Klaire Laboratories, ARI, and the physicians involved in

the project have devoted a great deal of time and effort to the

planning and execution of Study 2, and the data represent an

invaluable resource. I certainly hope that the study is not veering

off track.

Needless to say, I am very concerned about this. I would greatly

appreciate your bringing with you a diskette of the data Marcella

had entered prior to her departure, as well as the hard copies of

the SerenAid Evaluation Questionnaires that had been mailed to

Klaire Laboratories.

Very cordially,

Bernard Rimland, Ph.D.

>>>>>>>>>>>>>>>>>>>>

ATTACHMENT 8

Letter

To Bernard Rimland (Autism Research Institute)

From (Klaire)

Date April 25, 2000

Dear Dr. Rimland:

Thanks so much for the generosity of your time today sharing lunch

with me. I enjoyed the opportunity to get to know you and your work

with the Autism Research Institute a little better.

As a follow-up to one of today's points of conversation, just wanted

to give you an update regarding the royalty agreement with

Farr, the previous owner of Klaire Laboratories. I spoke with

and she believes that the agreement was verbal and not a written

contractual agreement. It is not clear if the current owner of

Klaire Laboratories was aware of this arrangement at the time of the

sale. recalls that you were going to discuss this with Randy

during a meeting at her home but the facts are pretty sketchy as to

whether or not this was recognized as a transferable obligation at

the time of the Corporation sales transaction.

I encourage you to review your files and in the event you find a

written agreement, I would be happy to review it with you. I have

also forwarded a memorandum to the Executive Committee of Klaire

Laboratories with a synopsis of our meeting and encouraged both

and the Executive Committee to review this issue.

In the absence of a written agreement, I cannot release information

or funds to the Autism Research Institute for prior sales of

SerenAid. HOWEVER, as we discussed today, I am more than willing to

look at a promising agreement for both parties on the future

marketing and sales of this product. Since time is of the essence, I

suggest we meet again soon to brainstorm on what an acceptable

arrangement would be.

Please advise as to when you would be available and we can set

something up before your next board meeting mid-May. Again, thank

you for taking time out of your busy schedule today. I hope your

phone conversation with " new " friends in Washington went well. Talk

to you soon.

Sincerely,

President/CEO

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ATTACHMENT 9

Memorandum

To Cary Ferguson (Klaire)

From (Klaire)

Date April 25, 2000

Subject: Royalty payments to the Autism Research Institute

I met with Bernard Rimland, the Director of the Autism Research

Institute to discuss several issues regarding Klaire Laboratories,

SerenAid, and the royalty payments that they have requested to

receive. Apparently, it was Bernie's understanding that there was a

contractual agreement (most likely verbal) between Klaire

Laboratories and the Autism Research Institute that they would

receive a 3% royalty on the sale of the enzyme product developed for

use in the digestion of protein peptides found in wheat and diary.

There has been a linked association to the presence of these

undigested proteins and autistic behaviors. This agreement dates

back to Farr's ownership of Klaire Laboratories and the

development work on the end result product, SerenAid.

claims that even though this was a 'gentleman's agreement "

and not in writing, that Randy and Jim were aware of this commitment

when the business was transferred in the sale and a commitment was

made on the part of the new ownership to honor this royalty. The

fingers point to Dr. Wilkinson as the agreeing owner and I have

explained to and Bernie that I am not in a position to honor

any verbal commitments made by Randy since he is no longer a part of

Klaire Laboratories.

No to pass the buck, but in my opinion, since there is not a written

contractual agreement in place, I as the new President am not

willing to pay Dr. Rimland a royalty on any past sales of SerenAid.

I have however offered to review with Dr. Rimland and the Research

Institute their proposal for marketing and promotional assistance

for future sales of the product and a level of compensation they are

willing to accept for their assistance. Bernie and I plan to meet

again prior to May 15.

At this point, I have left it with Dr. Rimland to discuss his verbal

agreement with and find out how the transfer was handled

during the sale. has been advised that she should discuss

this with the Executive Committee if she believes this was clearly

stated as transferable obligations at the time of the sale.

Call me with questions.

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ATTACHMENT 10

Fax

To Bernard Rimland (Autism Research Institute)

From (President/CEO Klaire)

Date June 29, 2000

RE: Possible Meeting

Bernie, I know you have been extremely busy in your travels.

Hopefully, you now have some time available in your schedule for us

to meet. Points of discussion are:

1. Putting together a financial grant request for the completion of

the SerenAid trial. We need to get our approximate cost and plan

together to submit for funding.

2. An agreement as to how Klaire Laboratories can benefit ARI with

financial contributions as a direct result of support for SerenAid.

3. The presentation of SerenAid study at DAN meeting. I have Jon

Pangborn's commitment that if we can have the compilation complete,

we will be on the podium to present it. Jon suggested that since he

is presenting on other findings that possibly Dr. Houston or one of

the medical doctors in the study should present the findings.

4. The current issue of Dr. Shaw's claims against gelatin as an

inhibitor of DPP IV enzyme activity. My concern about his

presentation at the Irvine conference is the feedback we've had from

parents who now think they need to empty out gelatin capsule content

or buy products in Vegi-Caps (at a higher price). We have many

others in the scientific community looking into Dr. Shaw's

scientific discovery. I do not want these already financially

challenged parents to go to additional expense unnecessarily.

Please call and let me know what opening your schedule has. I'm out

on vacation next week but can be reached by cell phone at 858-395-

7880.

>>>>>>>>>>>>>>>>>>>>

ATTACHMENT 11

Letter

To (President/CEO Klaire Labs)

From Bernard Rimland (Autism Research Institue)

Date July 7, 2000

Dear ,

Time is really running out! During the past several months I have

written to you several times, as well as discussed with you

personally, the fact that Klaire Laboratories has in its possession

the data – owned jointly by this Institute and by Klaire

Laboratories – for phase II of the SerenAde study, and that we must

have the data if we are to analyze it in time for Jon Pangborn to

include it in his presentation at our Defeat Autism Now! conference

in September.

Jon will be discussing several topics during his presentation at our

DAN! conference, and one of those topics was supposed to be an

update of the project in the development of peptidase digestive

enzymes for use in autistic children.

It takes time to analyze data. We must have the data delivered to

the Autism Research Institute in the very near future, say on or

about July 12th, if we are going to be able to analyze it in time

for Jon to include it as part of his presentation at the DAN!

conference.

The last families reporting – the stragglers – should have reported

no later than March 15th, according to our schedule.

As I noted in earlier correspondence, the arrangement was that the

reports for phase I would be mailed to the Autism Research Institute

and copies would be made to be forwarded to Klaire Laboratories. Now

it is up to Klaire Laboratories to keep its part of the bargain. We

must be sent the originals, or copies, of all of the data for phase

II of the study within the next week.

I asked Ilene, with whom we were working closely on this project

about the disposition of the data, and she said that when she left

Klaire Laboratories all the reports were in a cardboard carton

sitting on, or next to, her desk.

I await the receipt of the data.

Very sincerely,

Bernard Rimland, Ph.D.

CC: Jon Pangborn, Devin Houston

>>>>>>>>>>>>>>>>>>>>

ATTACHMENT 12

Letter

To Bernard Rimland (Autism Research Institute)

From (President/CEO Klaire Labs)

Date July 10, 2000

Dear Dr. Rimland:

Thank you for your letter dated July 7th as well as discussion today

on the contents. I would like nothing more than to draw conclusions

as to the success of the SerenAid trial and have data for Dr.

Pangborn to present at the upcoming DAN conference. As we have

discussed previously, all the written or paper documents that were

present in our office at the time of my arrival as the new President

of Klaire has been photocopied, and sent to the Autism Research

Institute per your request. I had no prior knowledge that some of

these materials were actually relating to the first phase of the

trial and had actually been provided by ARI. Regarding what is

available on a computer database, I personally reviewed the computer

used by Marcella Snyder and did find limited information and will be

more than happy to share that with Matt for his review. It is

probably best to have him come here so we can also review the paper

files.

In looking at the organization of the study responses and the

missing reports from families involved in the study, I have asked

Dr. Houston to start on the phone interviewing each participant

family/caregiver to get a synopsis of their use of SerenAid. Many of

these kids are still on the product, which will give us some sense

of safety and effectiveness with long-tern use. We anticipate that

he should complete this by the end of this week. I would like to

take that approach an additional step further by reviewing the

individuals still on SerenAid and selecting 20-25 to have further

clinical observation by their physician as well as urinary testing

for peptide levels.

Recognizing that this will take time, in my opinion, we have two

choices:

1. We try to compile something with the few surveys we have back

working with the most complete files knowing that this is probably

not a good sampling.

2. We move ahead quickly to talk to each family and pursue

additional information as suggested above. I have funding that could

be used to pay for the testing and doctor's evaluation available.

Please let me reiterate that I was not personally involved in the

establishment of the responsibilities as it relates to the Phase II

portion of the study. At that point, I worked with Klaire

Laboratories in a product development role from a vendor viewpoint.

Since that time, many dynamics have changed at Klaire and it is only

within my power to move forward on these projects and like issues.

It is my desire to continue to work in concert with you and the

Autism Research Institute. As one who was actively involved in the

formulation team for SerenAid, I have a commitment to this project

on a personal level as well as a professional loyalty.

Additionally, it is my request that Ilene Buchholz not be contacted

in the future regarding this or any other question regarding

SerenAid. She has made the professional decision to join forces with

a competitor who is developing their own enzyme offering and to

involve her further would breach confidentiality with Klaire

Laboratories. As a side note, I did offer to partner with Dave

Humphreys and Kirkman Labs on an enzyme product (combining the best

of both our discoveries) and give him retail distribution. He

rejected my offer and has chosen to go alone with their own

development.

As always, I am available to meet with you to discuss solutions

further. We would like nothing more than to be a part of DAN!2000

and answer the parent/physician questions that have surfaced for

SerenAid since the last meeting.

Best regards,

President/CEO

>>>>>>>>>>>>>>>>>>>>

ATTACHMENT 13

Letter

To Jim s (owner Klaire), c/o Cary Ferguson (accountant, Board

of Directors, Klaire), cc: (President/CEO Klaire)

From Bernard Rimland (Autism Research Institute)

Date October 9, 2000

Subject Royalties on the sale of the SerenAid multiple-enzyme product

The idea of either finding or developing a multiple-enzyme product

that would assist autistic children and others unable to properly

digest casein and gluten in their food was conceived by Jon Pangborn

and me at the first Defeat Autism Now! Think Tank, held in Dallas in

January, 1995. I told Jon that the Autism Research Institute would

support his efforts to discover such a product, if one existed, or

to develop such a product, if there was none in existence, and he

undertook that task. The Autism Research Institute invested

thousands of dollars in this effort, until Farr, then

president of Klaire Laboratories, heard of our endeavor and offered

to help sustain the search, with the understanding that she would be

allowed to market the product once it became available.

After several years of effort, the product now being sold as

SerenAid became available and was publicly announced by Jon at our

Defeat Autism Now! conference in Cherry Hill New Jersey in October,

1998. I subsequently described the SerenAid product and told over

10,000 families of autistic children, and professionals, about it in

our year-end letter in December, 1998. I also mentioned SerenAid in

a number of lectures and articles in national magazines, and radio

talk shows, subsequent to the original announcement.

Further, for a number of months prior to the October, 1998

announcement of SerenAid, and for a number of months subsequent to

the announcement, the Autism Research Institute participated

intensively in a research project designed to evaluate both the

positive and negative effects of SerenAid on a sample of over 60

autistic children derived from the practices of a dozen physicians.

This effort involved a great deal of professional time, clerical and

statistical time, telephone conferencing, report writing, etc. All

in all, a costly investment on our part.

Therefore, not only the development, but almost all of the publicity

that it has received has been the results of the efforts of the

Autism Research Institute. After discussion with Klaire and Jon, it

was agreed that the Autism Research Institute's investment in

SerenAid would be compensated by a 3% royalty, based on the gross

profit. This agreement was acknowledged by Randy Wilkinson, in a

phone call to me on October 24, 1998.

I have attempted on several occasions to induce Klaire Laboratories

to pay the royalties due to the Autism Research Institute, but

insists that she cannot do so, because 1. " There is nothing in

writing " ; 2. She does not have the authority to do so, and 3. Klaire

Laboratories can not afford to pay us.

In California as in most states, there is no need for a contract to

be in writing unless the parties to the contract disagree on the

contract's terms. There is no such disagreement in the present

instance.

In view of the foregoing, I am turning to you with the request that

the agreement be acknowledged and honored and that royalties owed to

this Institute for past and future sales of the SerenAid be paid in

a prompt and orderly manner.

I await your reply.

Very sincerely,

Bernard Rimland, Ph.D.

Cc:

>>>>>>>>>>>>>>>>>>>>

ATTACHMENT 14

Email

To (Klaire)

From Cary Ferguson (accountant, on Board of Directors, Klaire)

Date October 23, 2000

Subject: Rimland Letter

Do not sent the letter to Rimland and the Board.

I have looked over all of the information you sent me as well as

some early memos I have from Randy. In fact it was Randy who

clarified with Dr. Rimland that the royalty would be based on 3% of

gross margin, not 3% of gross as had promised.

Based on what I have heard and reviewed I can't see any reason to

continue this battle of wills between you and Dr. Rimland. For $300

month I want Dr. Rimland to consider Klaire his friend – not his

enemy. Wouldn't it have been better to have Bernie at your cocktail

party rather than out trying to sabotage it. We don't need you to

send a letter to his Board causing more conflict just because he is

asking for a contribution that was promised by and reinforced

by Randy.

Back in April, your letter to Dr. Rimland stated that you say no

reason to pay a royalty but you would present it to the board. This

is the first time we have had a chance to review all of the info and

make a decision. Since I control 2 of the 3 votes I have resolved

this issue so you can concentrate your efforts on the show in Salt

Lake this week.

I have sent the Autism Research Board a check for $3,900

representing the sales for the last year.

I think this is money well spent. We were paying Sherie Stoker $1500

a month for nothing. Now we need to tear down the walls that have

been build between you and Bernie and work toward getting him to

include us in his newsletter and referring our products to the

readers of it.

Cary

>>>>>>>>>>>>>>>>>>>>

ATTACHMENT 15

Email

To Jim (s, owner Klaire)

From

Date October 25, 2000

Subject: FW: Rimland Letter

Importance: High

Jim, we need to talk immediately. Cary is in clear violation of my

contract and making decisions that effect me in a fiduciary manner

which are against my direct instructions. I cannot have him running

rampant around my decisions. According to our patent attorney…this

latest Cary decision could jeopardize our Patent claim. By

submission to Dr. Rimland's request, we imply prior discovery to our

patent filing. We must have a conference call with him immediately.

We are also in FTC violation by paying a not-for-profit organization

basically under the table. Cary is also now calling himself the

Chairman of the Board of Directors for Klaire Labs. Have you had a

board meeting without my attendance?

, President/CEO

>>>>>>>>

Email

To Cary Ferguson, cc Jim s (Klaire)

From (Klaire)

Date October 23, 2000

Subject: RE: Rimland Letter

Importance: High

Cary, it is very distressing to me that you would have made such a

decision and action without first discussing this issue with me. My

proposal had not been acted on (I did not send the letter or respond

to Dr. Rimland's request) without first discussing it with you. As

the President/CEO of Klaire Laboratories and the one who

participates in the industry and understands the political and

personality dynamics involved, I do not believe you were the one

best qualified to make this decision. We will now need to discuss

how we deal with the fall out of your action. This issue will not go

away with a modest $300 per month. You have now put us in the

bidding wars with competitors known and those to come. I was

positioning our stand on a basis of ethics which will always be in

our best interest and would keep our name clean in a very personal,

family oriented autism community. This royalty payment must now be

reflected in the asset/liability of SerenAid to any potential buyer

of Klaire or the SerenAid product. You have set a precedence that

will go with the product from this point on! If the patent is

granted and the full potential of SerenAid is explored…do you think

the ARI will settle for $300 per month? They will not easily give up

the claim that you have now granted them and will fight to continue

it with any future owner (as they have with us).

More troubling is your comment that you control 2/3 of the votes. We

need to have clarification from Jim on this point and agreement will

need to be met between Jim and myself as the remaining committee

members of my contract. In a memo from Jim dated February 3, Jim

informed me that he had asked you to take Randy's position. You

later revealed a memo from Jim to you dated the same day asking you

to take Jim and Randy's role. This document was not presented to me.

It would lead one to believe that Jim intended to keep this between

you and himself.

As we discussed in our meeting on Monday, having you step in and

contradict my leadership of this company will render me powerless in

the eyes of this industry and cripple me in my ability to accomplish

this role as well as dilute the image of who is really running this

company.

I request that we have a meeting immediately to clarify the roles of

management authority within this organization.

, President/CEO.