Karim, you could earn thousands of miles

-----BEGIN PGP SIGNED MESSAGE----- Hash: SHA1 A.C. - This is amazing. Thank you very much for doing this and you have my commitment for my part. Just heading back from DC today. Lots to tell. Thanks, Karim On 2/15/2011 11:39 PM, Antony Chan wrote:

Sorry for the long email, but it's taken quite an effort to maneuver this opportunity. Jerry - you've been extended a complimentary invitation to attend a member's only Gartner event for IT Executives. Invite is attached and will be held in Marietta on WED, Feb 23 from 8am-11am. Following the event, you will need to transport the analyst to Buckhead for a lunch meeting with you and Karim. You have the analyst from 11am-1pm. I'd suggest someplace quiet with good wifi. Afterward, a Gartner sales rep will pickup the analyst @ 1pm to take him to a meeting downtown. Karim - your obligation in making this happen is to have a 30-45 minute call with a Gartner sales rep to provide feedback on your experience with the analyst, discuss the company and perhaps hear a pitch. I won't be able to attend the event as I have another CIO meeting to facilitate in Birmingham that morning. Please let me know ASAP if you can commit to this event and the schedule as laid out. There's a few loose ends I need to tie up but please confirm so I can move forward on my end. Thanks, A.C. --- P.S. Jerry, I've started a list of potential prospects that I'd like to track and add to my watch list. Could I please add the first 20? I'm working on looking up the rest. Thx dude! https://spreadsheets.google.com/ccc?key=0AlB80VoVM6JodE84Y3FQbU1yTFRhV2JvcnJ4N3lRSlE&hl=en&authkey=COTYvMoJ <https://spreadsheets.google.com/ccc?key=0AlB80VoVM6JodE84Y3FQbU1yTFRhV2JvcnJ4N3lRSlE&hl=en&authkey=COTYvMoJ> On Fri, Feb 4, 2011 at 6:54 PM, Karim Hijazi Unveillance Email <khijazi@unveillance.com <mailto:khijazi@unveillance.com>> wrote: That would be most incredible. :) Thanks A.C. KH On 2/4/2011 6:52 PM, Antony Chan wrote:

Feb 23. As Jerry is the senior most IT Executive at Unveillance, I could get him in as a prospect. It would require getting into a minor sales discussion with Gartner, but I can help navigate that.

- -- All the best, Karim Hijazi CEO | President Unveillance O. (800) 540-8478 M. (561) 542-5704 www.unveillance.com khijazi@unveillance.com ******************************************** CONFIDENTIAL & PRIVILEGED COMMUNICATION This message is for the named person's use only. The information contained in this communication is confidential and/or privileged, proprietary information that is transmitted solely for the purpose of the intended recipient(s). No confidentiality or privilege is waived or lost by any mistransmission. If you receive this message in error, please immediately delete it and all copies of it from your system, destroy any hard copies of it and notify the sender. You must not, directly or indirectly, use, disclose, distribute, print, or copy any part of this message if you are not the intended recipient. The sender or any of its subsidiaries each reserve the right to monitor all e-mail communications through its networks. ******************************************** -----BEGIN PGP SIGNATURE----- Version: GnuPG v1.4.11 (MingW32) iQEcBAEBAgAGBQJNW8s1AAoJEIk0Dw4U/G3lSkMH/27x1563KRW3RyJHQWGHe/Ed KF2TyphsiYcXRh/WOdlhjgyDT+zRfrQmnr7sOeGGXdcPtK2v3PcZ0R6qM+u7vAWw l872luq8rjDAWRx9FY85P76C1q+2E/AqeQeC2QEYccy92ra+DAhAygqjlsRF2KWi KIa82JZ9TR3S0m0HkucakTVl7uyWfp+d5xO248e+L7z3cLl2Q6lSfi6o7ZZXQnsX 3/zm/aazWJbw4F/cvHboJpv/4zhTf1cV+yiuDef8O19TKbf0IJ6JF1s0S2gAvI5m RtrFMlyykwvsqAsf+hZZsfZs4s5Ro0jkx1riByuKAs1KNEYXd0TAt5iC62fuIrA= =wyo5 -----END PGP SIGNATURE-----

On Feb 16, 2011, at 7:20 PM, = Karim Hijazi Unveillance Email wrote:

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Hash: = SHA1

Jim,

Great email and a good bit to discuss. As = a basis for our impending
conversation, I will address each of your = points:

- - I have a very detailed financial plan that was = developed with the
intention to have a "wrapper" reseller model for = the data rather than
having the data source (and talent) integrated - = hence the on the fly
development of a high level plan. I = started work on the model that
included building a brand new malware = analysis and sinkhole division but
after my trip to Ottawa, I = convinced Davis to just contribute the
current systems and facilitate = ongoing development in exchange for
stock. As you know, I = finally got fully buy-in from Davis to do that
pretty much a day = before our presentation to your group. I will work
diligently = to modify the current plan to accommodate the new model.

1. I = agree that Davis is probably never going to put on a tie and suit.
= It is a fruitless effort to hope for such a thing and it was a = big
point of contention with some other investors. I agree it = is
frustrating but successful/exitable companies have been formed = with the
right team (you and I) managing and controlling those kinds = of people.
As it stands now Unveillance is a single-member LLC out of = Delaware
without even so much as a well designed operating agreement = (it was just
me - no need). My hopes are that with the influx = of money, other
shareholders and employees, we can develop a very = sophisticated
shareholders agreement/bylaws or operating agreement = that has provisions
that protect everyone from a Davis = disaster.

If you can get me the model, I can begin to review and = perhaps add some value in parallel with your further = inputs.

2. I think Davis' = other activities stem from his horrendous ability to
manage money. = He is constantly poor and makes some REALY VERY = stupid
decisions when he is in a financial crisis - case in point the = EGS cost
for data - I get physically ill when he talks about it. = I hope I cover
it well. On a number of occasions he = complained about his university
work and some of the other activities = he has been doing. I am pretty
certain that we (again you and = I) have him under a decent spell of the
potential for success and he = will follow the money. In Damballa, Davis
complained but = stayed. The final blow that made him leave was his = wife
demanding they move back to Canada; not his incredible = entrepreneurial
spirit and risk taking. I think this ties back = to point 1 - lets get a
rock solid agreement in place that outlines = all that he can and more
importantly CAN'T = do.

I think much of what we need we can get to in an = agreement but it may be a difficult discussion. I don't think we = will ever get 100% of what we would wish.

But if we can make sure = that even if he leaves we can still duplicate the sink holes and, some = some extent, his skill set, that may be all we can get. We = must

have a very long term contract in place for his data = (unlike EGS). You HAVE to take over the data as part of any deal. = Again, if he is selling EGS ALL his data

for such a low price, you = have no business. With $29M even with your selling wizardry, you = won't convince any investor that you could keep up with EGS. = Clearly

the solidification of Davis data makes you more than = just a reseller. If you are a reseller and people understand that, = you wind up with a valuation that is roughly 8 to 12 = cents

on a dollar of revenue - it really sucks. If you = can show you have control of the data, you then have value in the = company.

3. He can = be a rockstar tech speaker but coaching is key here. I did = a
good bit of that "coaching" before our presentation with you and it = was
pretty good with the exception of the "family ties" (more to say = in
point 4) with some of the people which I explicitly mentioned = would not
provide comfort to the group, but rather concern them that = he had hopes
to provide a welfare fund for his kin. He = understood but I guess still
felt it was a good thing to = say.

4. As for the family members, I only know Matt Thompson who = I can vouch
for as a very talented programmer, but needs an = incredible whip-cracking
director to keep him on pace and deadlines. = The "married to his wife's
sister" happened well after he was hired = as just good talent. I can't
speak about Anne Joynt or anyone = else he mentioned were related. In any
case every adviser that = we sign on will have to be vetted for
significant value otherwise = absolutely no go.

Again, be careful with = Chris driving the team - hard to drive your brother-in-law. Again, = your thoughts on "back-ups" when they don't show up at = work...

Jim, I = intentionally let it be a bit of the "Davis show" as you may = have
figured in that I wanted him to have comfort value and not feel = like I
was railroading him with such a huge group that all seemed to = know me.
I really appreciate how you and the rest of the group = provided such a
welcoming environment as it was key to keep him in = play. I know Davis
considers me a friend but he knows that I am = relentless with business.

Believe me they were = briefed to be very careful with the handling of Davis in the meeting. = I think he came across well though. We know what we are = getting

a rock star programmer/strategist that's a bit = flaky.

I am still = traveling but let's chat tomorrow about all of this. I = see
incredible potential as I hope you do as well. I fully = admit I need
help here not simply = money.

OK we'll talk. but = also think about how you mitigate the stock damage if he bolts on you. = Perhaps a 10% per year deal that you can buy back, i.e. if he = leaves after one year,

you can buy back 40%, two = years 30%, etc. It them works like options but he gets the real = stock from the start and then if there is a sale (in anything more than = a year), he gets long term capital

gain on = it.

Thanks,

Karim

On 2/16/2011 6:30 PM, = James Hunt wrote:
Karim,

I'm going to be = working on the raise number tomorrow and over the weekend. If we = can get to a point where I have confidence in a number that I think will = make sense, then I'll be back to you.

It looks like = to me that perhaps you don't have a financial model in place for the = business. We really need to get that done. The high level = one is nice for the presentation but won't work for really looking at = the use of proceeds, what you really need, ebbs in cash flow, etc. = If you have one and can share it with me, I'll work to refine and = pound on it. If you don't have one, then I can get the templates = put together and work with you on the = inputs.

Second most = important issue is, in my mind, "how you handle Chris". This is = going to be a challenge. Here are some random = thoughts:

1. It may = well be that you can never institutionalize him. What you need to = worry about now is putting in place some sort of "buy back" clause for = that much stock in case he loses interest. What you really can't = afford to have happen is you grant him 50% of the stock and he abandons = the company after 6 months. So you need to protect yourself (as = well as any investors) by making sure you can buy back relatively large = portions of his stock if he leaves. I have seen shareholders that = bolt a company absolutely destroy the place. It can tie up a ton = of stock, etc.

2. Chris = can't likely have his cake and eat it too. For instance, we can = probably almost guarantee him a good salary (like $200K/year) but then = he can't spend great amounts of time chasing other money from teaching, = etc. When Softbank and Charterhouse wrote my employment contract = as CEO of EYT, it stated very specifically how much outside stuff I = could do. We are going to have to get comfortable with Chris and = what he wants to do. For instance, if UV can't fully control his = ability to provide data to whomever he wants, then there is no business. = If he sells a "God view" to EGS for $7K, no one will invest in you = guys. He must be controlled.

3. It is = clear that he wants to talk at conferences, he like the limelight. = That's nice but as we have seen, this can be disasterous so that = has to be really monitored. I doubt with his personality you will = ever stop him from doing that but he can't "go off the rez" or we could = greatly diminish the value of UV.

4. You have = to decide about all of his family members as consultants, what they are = to be paid, etc. You obviously have to balance what he wants to = pay them versus what you may need for revenue production. I have = also seen companies torn apart because of a bunch of family members who = effectively can't be terminated in the company. =

I have to run = into class now but there's still lots of work to do here. Please = bear in mind that I can probably be the bad guy on some of this so as = not to mess up your relationship.

jim

- --
All the best,

Karim = Hijazi
CEO | President
Unveillance
O. (800) 540-8478
M. = (561) 542-5704
www.unveillance.com
khijazi@unv= eillance.com

********************************************
CONFID= ENTIAL & PRIVILEGED COMMUNICATION This message is for the = named
person's use only. The information contained in this = communication is
confidential and/or privileged, proprietary = information that is
transmitted solely for the purpose of the = intended recipient(s). No
confidentiality or privilege is waived or = lost by any mistransmission.
If you receive this message in error, = please immediately delete it and
all copies of it from your system, = destroy any hard copies of it and
notify the sender. You must not, = directly or indirectly, use, disclose,
distribute, print, or copy any = part of this message if you are not the
intended recipient. The = sender or any of its subsidiaries each reserve
the right to monitor = all e-mail communications through its = networks.
********************************************
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