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\F3\C154 EAST DANA STREET
\CMOUNTAIN VIEW, CA. 94041
\F4\←L\-R\/'7;\+R\→.\→S   Telephone:
\←S\→.415-965-0557
\F1\COctober 4,1976

Information International Incorporated
5933 Slauson Avenue
Culver City, Cal. 90230

Dear Sirs:
\J
	Following a brief  discussion with Prof.  John McCarthy, I  understand
that your  organization  may  be  interested  in  entering  the  field  of
robotics.  Vicarm  is  a  small  California  corporation  engaged  in  the
development and manufacture  of computer  controlled manipulator  systems
and accessories.  We have been in business for about 3 years and now offer
for sale  one  of  the  most  advanced  type of  system  available.   Our
manipulators have been purchased by Universities, Research Labs, and large
corporations.  These include Stanford Universty, M.I.T.,Purdue Univ., SRI,
JPL, National Bureau of Standards, U.S. Navy, General Motors, and  Western
Electric Co.  As a small  company of but 2  employees, I am interested  in
seeking a working arrangement with  a larger, established and  responsible
firm because of the following reasons.

	I am also presently  a Research Assistant-  PhD Candidate at  Stanford
University in  the special  program area  of Automation.   I set  up  this
special study area a few years ago, and am currently funded by a  National
Science Foundation grant through  the Artificial Intelligence  Laboratory.
I  am  seriously  interested  in  completing  this  PhD  program  and  the
arrangement I want to  set up with you  should include some provision  for
this.  To help me achieve this goal, I am interested in selling Vicarm  to
III, and setting up a mutually agreeable working arrangement.

	In addition,  to this  date all  research and  development efforts  at
Vicarm  have  been  funded  entirely  out  of  income  from  fixed   price
manipulator sales  contracts.  I  find  that I  must personally  spend  an
excessive amount of my  time and effort  on manipulator production,  sales
and customer relations. By merging with a larger organization such as III,
I would expect  to be  freed of  some of these  chores to  spend a  larger
proportion of my time on advanced systems design and development.

	I propose the following terms and conditions:

	1.   III will  purchase all  of the  assets of  Vicarm,
including  machine  shop (lathes, milling machine, etc),
office  equipment, facility  improvements,
assembly jigs and fixtures,  test equipment, inventories of  finished
goods (one  demonstration arm complete with computer and
software ), and other  inventory (excluding parts
needed  to complete our current orders)  for $50,000 which represents
my estimate  of  the market  value  of these  assets.
Furthurmore, III will pay  Vicarm
$100,000 for all of the rights to  trade secrets and know-how relating
to the manipulators. III will pay for these assets in cash at
the time  of  purchase; Vicarm  will  retain responsibility  for  all
liabilities it  has incurred.   Vicarm will represent and  warrant to
you that  it has marketable title to the assets described above, free
and clear of any liens or encumbrances, and that  it has authority to
effect  the  sale  of  such  assets  to  you.  Vicarm  will  complete
production of  existing  orders, and  retain  the proceeds  of  those
sales.

	2.   I will  agree to  become a  consultant to III for
three  years.  My interests  are in the area  of advanced manipulator
design and advanced manipulator  instrumentation and sensor design.   I
would like to see  my future work in these areas,  rather than in the
area  of manipulator  manufacture and  production.   Specifically,  these areas
would  include;  new manipulator  designs,  force  and  touch  sensor
systems, new end effectors, and manipulator related accessory devices
including vision systems, positioning tables, computer  based control systems, and  advanced
computer based program and control methods.

	a.   The services I will perform for III will be such of the following
as we agree upon;\.
		
		1)  Bringing to the attention of III new developments in
		the manipulator and sensor areas.

		2)  Direct an R and D facility for III whose work will be
		of a Robotics nature and oriented to III needs or objectives.

		3)  Industrialize the Vicarm products by providing design
		specifications, reliability testing and production drawings.

		4)  Develop applications of Vicarm products in conjunction
		with III products.

		5)  Advanced research in the areas described above which
		will be a part of my research at Stanford University.


\J	b.  I will be available for consultation  at least 6 days per
month, and will be paid $1200 per month during that time, regardless
of whether III employs any of that time.

	c.  If I consult for more than 6 days in any  calendar month,
I will be paid  $200 per day in addition to the  fee described in the
previous paragraph.

	d.  In addition to the foregoing payments, I will be paid, on
a quarterly basis, the following percentages of the net sales prices
of the M.I.T. Arm, the Stanford Arm, sensors, and software described in Vicarm's current sales 
literature:\.

		First and Second years after purchase		8%
		Third and Fourth years after purchase		6%
		Fifth and Sixth years after purchase		4%
		Seventh and Eighth years after purchase	2%


\J	The proposal in this letter is not intended to be an offer, but merely a 
statement of the basis from which a binding agreement could be prepared.
I will appreciate hearing your reaction to this proposal.\.

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Yours sincerely,



Victor Scheinman
    President

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