Exhibit 10-5

 

PURCHASE AND SALE AGREEMENT

 

between

 

VISUAL ENTERTAINMENT SYSTEMS, LLC

 

and

 

VGTel, Inc.

 

DATED: March 28, 2012

 

 

 

 

  TABLE OF CONTENTS         Paragraph Heading Page       1 RECITATIONS 1 2
EQUIPMENT DESCRIPTION 1 3 TERMS 1 4 CONDITIONS 1 5 DELIVERY SCHEDULE 1 6
INSTALLATION AND ACCEPTANCE 2 7 EXCUSE FOR NON-PERFORMANCE 2 8 REPRESENTATION
AND WARRANTIES OF THE PARTIES 2 9 MANUFACTURER’S WARRANTY AND LIMITATION THEREOF
4 10 INSPECTION OF UNITS BY SELLER 4 11 SOFTWARE SERVICE FEE 4 12 ACCOUNTING 4
13 PRODUCT CHANGES 4 14 MISCELLANEOUS 5   SIGNATURES 6        

TABLE OF SCHEDULES AND EXHIBITS 

        Exhibit A

COPY OF FULLY EXECUTED DISTRIBUTION AGREEMENT WITH WESTERN CAPITAL VENTURES,
INC.

7 Exhibit B EQUIPMENT WARRANTY 8 Schedule A EQUIPMENT DESCRIPTION 9 Schedule B
CONSENT TO ASSIGNMENT OF DISTRIBUTION AGREEMENT 10 Schedule C MAINTENANCE
PROGRAM 11

 

 

 

 

          THIS AGREEMENT made on this 28th day of March 2012, between Visual
Entertainment Systems, LLC (hereinafter alternately referred to as “VES” or
“Seller”), an Ohio limited liability company with a principal place of business
at 5125 West 140th Street, Brook Park, OH 44142, acting herein by Giovanni A.
Carriero, its Managing Member, duly authorized, and VGTel, Inc., a New York
corporation, doing business as 360 Entertainment and Productions, Inc.
(hereinafter alternately referred to as “360” or “Buyer”), with a principal
place of business at 400 Rella Boulevard, Suite 174, Montebello, NY 10901,
acting herein by Peter W. Shafran, its Chief Executive Officer, duly authorized.
VES and 360 are collectively referred to herein as the “Parties”, in singular or
plural usage, as required by context.

 

WITNESSETH:

 

          WHEREAS, Seller manufactures, distributes and sells arcade style
sweepstake gaming systems, software and hardware (referred to herein
collectively as the “Units”);

          WHEREAS, Seller has previously entered into a certain distribution
agreement dated July 1, 2011 (hereinafter referred to as the “Distribution
Agreement”) with Western Capital Ventures, Inc. (hereinafter referred to as
“WCV”), a Nevada corporation with a principal place of business located at 124
S. First Street, Campbell, CA 95008, for the purchase and distribution of Units
from Seller. A copy of the Distribution Agreement is attached hereto as Exhibit
A;

          WHEREAS, subject to the terms and conditions of this Agreement, WCV
desires to sell and assign and Buyer desires to purchase all of WCV’s right,
title and interest in the Distribution Agreement; and

          WHEREAS, subject to the terms and conditions of this Agreement, Seller
desires to consent to such assignment of the Distribution Agreement; and

          WHEREAS, Seller desires to sell and Buyer desires to purchase Units,
pursuant to the Distribution Agreement, as modified by the terms and provisions
of this Agreement.

 

AGREEMENT

 

          NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties and covenants herein contained, the parties hereby
agree as follows:

 

1. The above recitations are true and correct and are incorporated herein by
this reference.

 

2. EQUIPMENT DESCRIPTION. The arcade style sweepstakes gaming systems, software,
and hardware manufactured by Seller, more particularly described in Exhibit B.

 

3. TERMS.

          3.1. PURCHASE PRICE. Seller shall sell the Units to Buyer at a per
unit price of no more than $2,500.00.

          3.2. QUANTITY. Buyer agrees to purchase 100 units.

          3.3. PAYMENT. Buyer agrees to pay for the Units as follows:

                    A.          50% within five (5) days after Buyer’s receipt
of a fully executed original copy of this Agreement (initial deposit);

                    B.          25% per unit upon completion and shipment of
each Unit; and

                    C.          25% within five days of Buyer’s verified
operation of each Unit installed.

 

4. CONDITIONS.

          Buyer’s obligations under this Agreement are subject to fulfillment,
prior to the tender of any payments required in Section 3.3 above, of the
following conditions:

                    A.          Seller’s delivery of a fully executed Consent to
Assignment as set forth in Exhibit B annexed hereto.

 

5. DELIVERY SCHEDULE.

          5.1.   Seller will begin to manufacture the Units within three (3)
business days after receipt of the initial deposit. Seller estimate that it can
manufacture approximately 50 units per week, however, in no event can Seller
complete the manufacture of any units within thirty (30) days of receipt of the
initial deposit. Seller agrees to use its best efforts to complete the
manufacture of the ordered units within sixty (60) days of receipt of the
initial deposit. Seller agrees to use its best efforts to complete manufacture
within that period. Seller will manufacture the Units in minimum lots of 10. The
Parties acknowledge and agree, however, that due to the size of the order and
the availability of materials and supplies, the time for manufacture is only an
estimate and Seller does not guarantee completion in that time.

 

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          5.2.          Within thirty (30) days after Seller commences
manufacturing, Seller will provide to Buyer an updated estimate of the number of
Units to be delivered on or before April 15, 2012. Seller will use its best
efforts to deliver and to install all of the Units by such date. Further, Seller
will use its best efforts to make the first lot of Units available for
inspection at Seller’s facilities by April 1, 2012.

          5.3.          Thereafter, Seller anticipates that lots will be
completed and available for inspection every five (5) days. If Buyer’s
inspection discloses defects or adjustments, Seller shall have a reasonable time
to correct such defects and make such adjustments as are necessary. Buyer shall
thereafter have an opportunity to make a final pre-installation inspection.
Within thirty (30) days of receiving an inspection approval from Buyer, Seller
shall appropriately transport and install the completed Units at the locations
as mutually agreed to by the Parties. Transportation and installation of units
within a fifty-mile radius of Brook Park, Ohio shall be at Seller’s expense.

          5.4.          Transportation and installation of units beyond such
radius shall be at Buyer’s and Seller's expense equally.

          5.5.          Seller shall, at its expense, package Units for shipment
and delivery so as to insure their safe and undamaged arrival at Buyer’s
locations.

          5.6.          Risk of loss shall remain with Seller only after
installation and confirmation of proper operation.

          5.7.          Title to Units and all risk of loss shall pass to Buyer
only after installation and confirmation of proper operation.

 

6. INSTALLATION AND ACCEPTANCE.

          6.1.          Within five (5) days after delivery of the Units at the
Buyer’s locations, Seller shall assemble, install and activate the Units
delivered.

          6.2.          After Units are activated by Seller, Buyer shall have
the right to inspect the Unit at any time prior to acceptance by a location
owner to determine whether such Units are in compliance with the Specifications
and free from defects in material or workmanship.

          6.3.          Buyer, in writing, may reject any Unit that is not in
compliance with the Unit Specifications or that is not free from defects in
material or workmanship.

          6.4.          Effect of Rejection. Any nonconforming Unit that has
been rejected by Buyer can, at Buyer’s option after consultation with Seller:

                          A. will be picked up by Seller for repair, replacement
or a refund of the original purchase price, at Seller’s expense, or

                          B. be repaired by Seller at Buyer's designated
facility, or

                          C. be repaired by Buyer at Seller's expense.

          6.5.          Payment by Buyer shall not constitute acceptance of the
Units or impair Buyer's remedies for non-conformance.

 

7. EXCUSE FOR NON-PERFORMANCE. Seller’s obligations hereunder are accepted
subject to the risk of strikes, labor disturbances, floods, fires, accidents,
delays, shortage of materials or equipment, contingencies of transportation and
other causes of like or different character beyond the control of Seller.
Impossibility of performance by reason of any legislative, executive or judicial
act of any governmental authority shall excuse performance or delay in
performance of this Agreement. Neither party shall be liable for its failure to
perform hereunder due to any contingency beyond its reasonable control,
including, but not limited to, acts of God, fires, floods, wars, civil
disturbances, sabotage, governmental laws, ordinances, rules and/or regulations,
whether valid or invalid. During the period of such contingency, the Seller
shall have the right to omit all or any portion of the quantity deliverable
during such period, whereupon the total quantity deliverable under this
Agreement shall be reduced by the quantity omitted.

 

8. REPRESENTATION AND WARRANTIES OF THE PARTIES

          8.1. Buyer hereby warrants and represents to Seller that:

                    A.          It is a corporation duly established and
existing under the laws of the State of New York, in good standing and duly
qualified, licensed and authorized to do business as a corporation. Buyer has
full power to carry on its business as now being conducted. All acts and other
proceedings required to be taken by or on the part of Buyer, including, if
necessary, all appropriate member interest action, to authorize it to carry out
this Agreement and such other agreements and instruments and the transactions
contemplated hereby and thereby have been duly and properly taken. This
Agreement has been duly executed and delivered by Buyer and constitutes, and
such other agreements and instruments when duly executed and delivered by Buyer
will constitute, legal, valid and binding obligations of Buyer and will be
enforceable in accordance with their respective terms;

 

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                    B.          It has full legal capability to execute and
perform any and all obligations arising of this Agreement and no legal
constrains against it exist;

                    C.          It has the financial capability to perform any
and all obligations arising out of this Agreement; and

                    D.          It has not started winding up, settlement
proceedings with creditors and no receiver or liquidator has been appointed.

                    E.          There is no material claim, litigation, lien,
action, suit or proceeding, investigation, arbitration proceedings,
administrative or judicial, pending or threatened against or affecting Buyer,
the Buyer’s Business or involving any of the Assets of Buyer, at law or in
equity or before any governmental authority, nor to Buyer’s knowledge is there
any basis upon which any such claim, litigation, action, suit or proceeding
could be brought or initiated. Buyer is not subject to or in default under any
judgment, order, writ, injunction or decree of any court or any governmental
authority, and no material replevins, attachments, or executions have been
issued or are now in force against Buyer. No petition in bankruptcy or
receivership has ever been filed by or against Buyer.

                    F.          No consent, authorization, license, permit,
order, certificate or approval which has not heretofore been obtained is
required by any person, corporation, partnership, estate, trust, governmental
agency or other person or entity not a party to this Agreement to the
transactions contemplated by this Agreement.

 

          8.2. Seller hereby warrants and represents to Buyer that:

                    A.          It is a duly organized and validly existing
limited liability company and in good standing under the laws of the State of
Ohio and is duly qualified, licensed and authorized to do business as a limited
liability company. Seller has full power to carry on its business as now being
conducted. All acts and other proceedings required to be taken by or on the part
of Seller, including, if necessary, all appropriate member interest action, to
authorize it to carry out this Agreement and such other agreements and
instruments and the transactions contemplated hereby and thereby have been duly
and properly taken. This Agreement has been duly executed and delivered by
Seller and constitutes, and such other agreements and instruments when duly
executed and delivered by Seller will constitute, legal, valid and binding
obligations of Seller and will be enforceable in accordance with their
respective terms.

                    B.          It has full legal and factual capability to
execute and perform any and all obligations arising of this Agreement and no
legal constrains against it exist;

                    C.          It has the financial, technical and factual
capability to perform any and all obligations arising out of this Agreement;

                    D.          It has not started winding up, settlement
proceedings with creditors and no receiver or liquidator has been appointed.

                    E.          There is no material claim, litigation, lien,
action, suit or proceeding, investigation, arbitration proceedings,
administrative or judicial, pending or threatened against or affecting Seller,
the Seller’s Business or involving any of the Assets of Seller, at law or in
equity or before any governmental authority, nor to Seller’s knowledge is there
any basis upon which any such claim, litigation, action, suit or proceeding
could be brought or initiated. Seller is not subject to or in default under any
judgment, order, writ, injunction or decree of any court or any governmental
authority, and no material replevins, attachments, or executions have been
issued or are now in force against Seller. No petition in bankruptcy or
receivership has ever been filed by or against Seller. The Seller has insurance
coverage adequate in character and amount to pay all liabilities relating to any
litigation, claims or proceedings.

                    F.          No consent, authorization, license, permit,
order, certificate or approval which has not heretofore been obtained is
required by any person, corporation, partnership, estate, trust, governmental
agency or other person or entity not a party to this Agreement to the
transactions contemplated by this Agreement.

                    G.          Seller represents that it has the full and
exclusive right to sell the Units without any broker or agent.

 

          8.3.    MUTUAL REPRESENTATIONS.           Each party hereto
acknowledges to the other that no financial advisor, broker or agent negotiated
this Agreement. Each of the parties agrees to indemnify the other for any claims
by any financial advisor, broker or agent in connection with this Agreement and
the transactions contemplated hereby resulting from any act by such party,
provided that it is adjudged by a court of competent jurisdiction that a
commission is due by reason of such financial advisor, broker or agent being the
procuring cause of this purcahse and sale, said indemnity to include all costs
of defending any such claim, including reasonable attorney’s fees. In the event
of any such claim, the party receiving notice of such claim shall promptly
notify the other party, and the other party shall have the right, but not the
obligation, to assume the defense of such claim.

 

          8.4.     All of the above representations and warranties shall survive
the installation of the Units and shall not be merged therein. 

  

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9. MANUFACTURER’S WARRANTY AND LIMITATION THEREOF.

          9.1. Seller warrants that title to all Units delivered to Buyer under
this Agreement will be free and clear of all liens, encumbrances, security
interests or other claims. Seller also warrants that the Units will be free of
defects in design, material and workmanship and, if operated in accordance with
the applicable Specifications, will conform to the Unit Specifications for one
(1) year following installation of the Units at Buyer’s location. Buyer's
inspection or acceptance of, or payment for, any Units shall not constitute a
waiver of any breach of warranty.

          9.2. Seller hereby represents and warrants that it has not received
and knows of no claim made or proceeding brought by a third party on the basis
that any Unit or Documentation infringes or utilizes a patent, copyright, mask
work, trade secret or trademark of a third party and that no patent, copyright,
mask work, trade secret or trademark of a third party has been used without
permission to manufacture or complete such Unit or Documentation or has been
incorporated therein without permission. If Buyer receive any such notice, Buyer
shall, within ten (10) days, notify Seller of such claim. If Buyer fails to
forward such notice to Seller, it shall be deemed to have released Seller from
this warranty and as to such claim. There are WARRANTIES OF MERCHANTABILITY but
NO WARRANTIES WHICH EXTEND BEYOND THE DESCRIPTION ON THE FACE HEREOF. Seller
further agrees that it will replace without charge any part that proves
defective in material or workmanship of any unit within one (1) year from the
date of the initial installation at the locations of Buyer.

          9.3. The warranty provided to Buyer by Seller with respect to the
Units is set forth in Exhibit B attached hereto and incorporated herein. The
warranty period shall commence upon Acceptance of the Unit.

 

10. INSPECTION OF UNITS BY SELLER. The Parties agree to permit Seller, its
agents, representatives and/or employees or any independent experts or their
agents, representatives and/or employees to inspect said units and observe their
performance at reasonable times and after reasonable notice. Further, the
Parties agree to permit Seller, its agents, representatives and/or employees and
its independent manufacturer’s agents to show such units while in operation to
prospective purchasers of comparable units, notwithstanding that such
prospective purchasers are competitors or potential competitors.

 

11. SOFTWARE SERVICE FEE.

          11.1. Buyer is also purchasing a software service program (attached
hereto as Schedule C) for the Units, which includes a monthly software service
fee associated with the operation of each Unit. The software service fee shall
insure the full and faithful performance of the sweepstake gaming systems and
will provide automatic updates of the software as needed for ongoing operations.
The software updates do not include a re-write of the software or a change of
the theme of the sweepstakes.

          11.2. Buyer agrees to pay a monthly maintenance/service fee to Seller
for each Unit in an amount equal to either 20% of “gross-net” (as hereinafter
defined) or $300.00, whichever amount is less. Seller shall provide regular
software service of the units. The Parties agree that Seller shall deduct the
monthly software service fee from gross revenues generated by each Unit.

 

12. ACCOUNTING.           

          12.1.     Seller shall provide to Buyer an accounting for each Unit on
the first day of each month.

          12.2.     To determine “Gross-Net” revenue, Seller shall deduct from
the gross receipts generated by a Unit, the cost of any sweepstakes material
provided to the end-user. The balance remaining is referred to as the
“Gross-Net” revenue of each Unit.

          12.3.     "End User" shall mean a person that purchases internet time
through the Unit.

          12.4.     Seller shall collect the Gross-Net revenue generated from
each Unit and shall distribute it as follows:

                       A. Maintenance/Software Service Fees to Seller;

                       B. Proceeds to vendors and site operators pursuant to
site agreements; and

                       C. Balance to Buyer by ACH transfer to Buyer’s bank
account.

 

13. PRODUCT CHANGES.

          13.1.     SELLER INITIATED CHANGES. Seller shall provide Buyer with
the earliest possible notice and a written evaluation of the anticipated effect
of any Seller initiated Engineering Change or Software Change. Seller shall not
make an Engineering Change or Software Change to the Units without Buyer's prior
written consent. A Seller initiated change may require that the Unit
Specifications be updated.

 

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          13.2.     MANDATORY CHANGES. In the event an Engineering Change or
Software Change is required in order for the Units to satisfy governmental
standards or regulations, including safety and environmental laws and
regulations, avoid intellectual property infringement or comply with the
Specifications, Seller shall issue a mandatory Engineering Change or Software
Change upon reasonable written notification to Buyer. Seller shall also install
the required parts, materials, documentation, detailed instructions and any
special tools, equipment, or media to Buyer at no charge and shall reimburse
Buyer for the expenses it incurs in implementing the mandatory Engineering
Change or Software Change. A mandatory change may require that the Unit
Specifications be updated to refer to the new governmental standards. In the
event that a mandatory change under this Section 13 is made retroactive, the
parties shall negotiate the extent to which each of them bears the cost of field
replacement or retrofit to meet the new or modified standard. All parties
recognize and agree that in the event of a mandatory Engineering Change or
Software Change, a unit may be out of service for a period of time and that
neither party shall have any liability to the other party for lost revenues or
profits as a result during that time.

 

14. MISCELLANEOUS.

          14.1. Assignment. Neither this Agreement, nor the rights and
obligations of the either of the parties under this agreement, may be
transferred or assigned to third parties without the prior written consent of
the other Party.

          14.2. Dispute Resolution. It is mutually agreed to between the Parties
that all disputes arising between the Parties that cannot be resolved by mutual
agreement, shall be settled by arbitration. The Parties agree the arbitration
shall occur in Cleveland, Ohio in accordance with the rules then obtaining of
the American Arbitration Association and judgment may be had upon any award
therein in any court of competent jurisdiction. The Parties agree that prior to
the commencement of any arbitration, the party desiring to do so must provide
the other Party with notice of the intent to arbitrate and the issues that are
to be arbitrated. Both Parties shall be entitled to pre-arbitration discovery,
including the right to conduct depositions of witnesses and retrieve documentary
evidence from the other Party.

          14.3. Entire Agreement. This Agreement contains the entire
understanding between the parties and supersedes all prior and collateral
communications, reports, agreements and understandings between the Parties. No
change, modification, alteration or addition to any provision hereof shall be
binding unless made in writing and signed by authorized representatives of the
Parties. The duties of the Parties shall be determined exclusively by this
Agreement.

          14.4. Severability. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal, or unenforceable or set
aside in any respect, the validity, legality or enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby, and said provision shall be affected only to the extent of such
invalidity, illegality, unenforceability or setting aside.

          14.5. Authority of Representatives. The Parties each represent and
warrant to the other that each Party has the full right, power and authority to
enter into this Agreement and that this Agreement constitutes the valid, legal
and binding agreement of the Parties in accordance with its terms.

          14.6. Binding Effect. This Agreement shall be binding upon each of the
Parties, their respective successors and assigns, and all of the rights
hereunder shall inure to the benefit of their respective successors and assigns.

          14.6. Choice and Status of Law. This Agreement shall be construed in
accordance with, governed by and interpreted under the laws of the State of
Ohio, including its conflict of laws principles except to the extent that the
laws of another jurisdiction may apply to the exercise of Buyer’s remedies
hereunder.

          14.7. Notices. Any written notice required or permitted by this
Agreement shall be delivered by depositing it (registered or certified mail,
return receipt requested) in the U.S. mail, postage prepaid, or by telegram,
charges prepaid, addressed to the appropriate party at the address set forth on
page 3 hereof, or by recognized overnight courier which provides evidence of
delivery addressed to the appropriate party at the address set forth on page 3
hereof.

          14.8. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.

          14.9. Confidentiality. The parties hereto agree to keep the terms and
conditions of this Agreement confidential except for the following disclosures,
which are permitted in the following limited circumstances:

                    A. The parties hereto may make such disclosures as are
reasonably necessary for tax purposes;

                    B. The parties hereto may disclose the terms of and amount
paid under this Agreement as is reasonably necessary to obtain legal and tax
advice/services;

                    C. The parties hereto are permitted to disclose the terms of
this Agreement to the extent required in any legal proceeding involving the
enforcement of this Agreement, but as to any other legal proceeding, the parties
hereto are permitted to disclose the terms of this Agreement only to the extent
it is specifically requested and consented to in writing by an officer or other
authorized representative of VES or VGTL or compelled pursuant to statute, rule
of law, subpoena or other court directive or order;

                    D. The parties hereto may make such disclosures as are
reasonably necessary to their shareholders, board of directors or members as the
case may be; and

                    E. The parties hereto may make disclosures of the terms and
conditions of this Agreement to any person or entity if authorized by all the
parties to this Agreement in writing expressly evidencing complete mutual
consent to such disclosures.

 

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SELLER AND BUYER ACKNOWLEDGE THAT THE TRANSACTIONS AND MATTERS SET FORTH IN THIS
AGREEMENT ARE COMPLEX IN NATURE AND THAT ANY LITIGATION ARISING THEREFROM WOULD
BE MOST APPROPRIATELY, ECONOMICALLY AND SPEEDILY RESOLVED BY A NON-JURY TRIAL.
SELLER AND BUYER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT
THAT THEY MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION, DIRECTLY
OR INDIRECTLY, BASED ON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT, OR IN ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER
WRITTEN OR ORAL) OR ACTIONS OR OMISSIONS OF ANY PARTY TO THIS AGREEMENT. BUYER
AND SELLER EACH WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT.

 

Executed this 28th day of March 2012             VGTel Inc.     VISUAL
ENTERTAINMENT SYSTEMS, LLC           By: /s/     By: /s/   Peter Shafran, CEO  
  Giovanni A. Carriero, Managing Member

 

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EXHIBIT A

 

COPY OF FULLY EXECUTED DISTRIBUTION AGREEMENT

WITH WESTERN CAPITAL VENTURES, INC.

 

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EXHIBIT B

 

Equipment Warranty

 

For a one (1) year period from date of Acceptance (the "Warranty Period"),
Seller warrants that the Equipment provided to Buyer pursuant to this Agreement
shall be free from defects in material, manufacturing workmanship, and title,
and that the Equipment will operate in conformance with the Specifications set
forth in Schedule A and will operate as described in all marketing and
advertising materials provided to Buyer (the "Warranty"). The Warranty also
shall apply to any replacement part or to any Enhancement. Further, Seller
warrants that all service repairs shall be free from defects in materials and
workmanship for the greater of (i) the balance of the Warranty Period or (ii)
ninety (90) days after the date the repair is completed.

 

To enable Seller to properly administer the Warranty, Buyer shall (i) promptly
notify Seller of any claim hereunder, and (ii) provide Seller with the
opportunity to inspect and test parts claimed by Buyer to be defective.

 

Seller will arrange for Defective Equipment to Seller and Seller will replace
the Unit with a “Loaner” piece of equipment within twenty-four (24) hours of
such notification. Buyer will have full use of the Loaner equipment until
Defective Equipment has been repaired or replaced and received by Buyer.

 

If during the Warranty Period on-site service is required, warranty service will
be available from Seller, free of charge, on an appointment basis, Monday
through Friday, 8:00 a.m. to 5:00 p.m.

 

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SCHEDULE A

 

Visual Entertainment Systems, LLC NetStar Kiosks

Components

 

Overview

The NetStar Kiosk is where the customer can reveal their sweepstakes entries by
playing entertaining games. The NetStar Kiosk also has a user interface where a
customer can browse easily to various web sites. The customer’s identity and
current data are protected via the NetStar Kiosk’s security. The NetStar Kiosk
supports the following functionality:

·Secure login for the customer by supplying a user id/password or by swiping a
player card and entering a password (only where allowed).

·Front end support browsing various web sites

·Ability to Purchase more internet time, and in turn earn more sweepstakes
points

·A multitude of entertaining games for revealing sweepstakes entries

 

The NetStar Kiosk displays and tracks the following critical data:

·Customer login information

·Remaining internet time

·Sweepstakes entries that are still available for revealing sweepstakes

·Amount won from revealed sweepstakes entries

 

Cabinet specifications

·Custom steel cabinet

·Paint Electro-static powder coat with baked-on finish

·Graphics decal

 

Hardware specifications

·22" or 19" touch screen monitor (size varies based upon cabinet configuration)

·Bill acceptor (where applicable)

·Printer

·Customized CPU

·Power supply

·All pertinent wiring/cables

·Programmed for operation

·Video Card/On board video

·Hard Drive

·OS: appropriate to run software

·Internet connection

·Card Swipe (only where applicable or required)

·Power Single grounded plug (115V/15A circuit).

·Overall power consumption <400W typ.

·Display Viewable image size:

oResolution: up to 1440 x 900

·Touch screen

oCapacitive: Input: finger, stylus.

oTouch transmission: 85% +/- 2%.

oResistive: Input: finger, gloved hand, and stylus.

oTouch transmission: 91.5% +/- 1.5%.

o1/4" thick tempered glass surface acoustic wave touch)

·Speakers - 2 speakers, 16 ohm 1.5W

·Custom IT Printer coded to software

 

Software specifications

·Licensed game software

·Proprietary software licensed by and compliant with NetSweeps

 

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Reporting Service - POS

Various metrics are kept (data values) including:

·Internet Time remaining

·Sweepstakes points remaining

·Sweepstakes winnings

·Last Free Entries Date

·Cash In amounts

·Cash out amounts

·Comp amounts

 

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SCHEDULE B

 

CONSENT TO ASSIGNMENT OF DISTRIBUTION AGREEMENT

 

Visual Entertainment Systems, LLC, an Ohio limited liability company with a
principal place of business at 5125 West 140th Street, Brook Park, OH 44142,
acting herein by Giovanni A. Carriero, its Managing Member, duly authorized,
hereby consents to the foregoing assignment and all of the terms and conditions
contained therein.

 

    Visual Entertainment Systems, LLC             By: /s/         Giovanni A.
Carriero, its Managing Member       Duly Authorized            

 

STATE OF OHIO )       ) Ss.:  Brook Park COUNTY OF CUYAHOGA )  

 

On this 27th day of March 2012, before me, the undersigned officer, personally
appeared, Giovanni A. Carriero, who acknowledged himself to be the Managing
Member of Visual Entertainment Systems, LLC, and that he, as such Managing
Member, being authorized to do so, executed the foregoing instrument for the
purposes therein contained, by signing the name of the limited liability company
by himself as Managing Member.

 

  IN WITNESS WHEREOF, I hereunto set my hand.           /s/       Notary Public
    My Commission Expires:     Seal:          

 

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