Exhibit 10.6
TECHFARM
August 30, 1996
Mr. ▇▇▇▇ ▇▇
President
VIAVISION Systems, Inc.
Saratoga, California
Dear ▇▇▇▇,
This letter will summarize our proposal to you for an agreement between
VIAVISION Systems, Inc. (and its future corporate forms) and Techfarm
Management, Inc. Techfarm will act as consultants and advisors for VIAVISION and
help to obtain funding. This letter is intended to set forth the principal terms
of the agreement between the parties and to enable Techfarm and VIAVISION to
commence work on the projects while formal documents are being put in place.
We are uniquely qualified to work with you in forming and funding this new
venture. Techfarm has experience in most areas of business management & start-up
development, and we are looking forward to working together.
1. Techfarm will perform the following services:
a) Assist VIAVISION in the development of a structure and strategy in
order to obtain outside funding.
b) Assist VIAVISION in finalizing its business plan, including financials
and strategic issues related to the definition, development,
marketing, and distribution of VIAVISION's products;
c) Assist in implementation of the strategic plan, including bringing the
products to market and establishing strategic relationships;
d) Provide early stage management, as needed, to round out VIAVISION's
existing management expertise;
e) Make a representative of Techfarm available to serve on VIAVISION's
Board of Directors.
2. Techfarm will arrange an initial bridge loan of $250,000 at 10% annual
interest with 25% warrant coverage. The convertible note will entitle
Techfarm and others to purchase shares of the security sold in the
financing. This loan will be initiated with a deposit of $50,000 within 3
days of the signing of the note and balances being deposited as moneys are
needed.
3. Techfarm will receive a monthly management fee of $5,000, accruing but not
paid until after bridge financing is put in place and continuing until its
services are no longer required, as determined by VIAVISION's Board of
Directors;
Letter of Intent
VIAVISION
4. The initial capitalization will be as follows:
a) 80% of VIAVlSION initial stock will be reserved for founders and
employees. It is expected that the founders will be issued founders'
shares of common stock which will vest over four years. An employee
stock option pool will be created in order to attract key employees.
Such employee options will be subject to a standard 4 year vesting
schedule with an initial nine month cliff vesting period.
b) 20% of VIAVISION initial stock in the form of common shams will be
issued to Techfarm ▇▇ ▇▇ subject to a 4 year vesting based upon a
stock repurchase agreement. Shares vesting in the first year (25% of
the shares) will become fully vested at the time of first equity
financing with the remaining 75% vesting at the rate of 1/36 per
month from the first anniversary of this letter's date. Should an
IPO, acquisition or change of control event of VIAVISION be approved
by its Board of Directors, Techfarm's shares shall become immediately
vested.
5. This Agreement shall have a term of one year but may be terminated by
either party at any time.
We look forward to working with you on this exciting opportunity.
Please sign below and return by September 30/th/ to acknowledge your agreement
to this proposal.
Very Truly Yours, AGREED AND ACCEPTED:
Techfarm Management Inc. VIAVISION Systems, Inc.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Date: 9/30/96
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