Document:

LICENSE AGREEMENT

 

This License
Agreement (this “Agreement”), dated as of May 20, 2011 (the “Effective Date”), is
entered into by and between Beamz Cypher Partnership, LLC, a Delaware limited liability company (“Licensee”), and
Beamz Interactive, Inc., a Delaware corporation (“Beamz”). Licensee and Beamz are each sometimes referred to
herein as a “Party” and collectively as the “Parties.”

 

I. BACKGROUND AND RECITALS

 

1.1           Beamz
owns and has the right to grant licenses with respect to the Licensed IP (as hereinafter defined).

 

1.2           Licensee
desires to obtain from Beamz, and Beamz hereby desires to grant to Licensee, a license to use the Licensed IP as further provided
in this Agreement.

 

II. DEFINITIONS

 

The following terms shall have
meanings ascribed to them below:

 

2.1           “Affiliate”
means, with respect to either Party, any Person that (directly or indirectly) controls, is controlled by or is under common
control with that party. “Control” of a Person means the power (directly or indirectly) to direct the management
or policies of that Person, whether through ownership of voting securities, by contract, by agency or otherwise. For purposes of
this Section, “Person” means a corporation, partnership, joint venture, association, individual or other entity.

 

2.2           “Beamz
Content” means the musical song content, video content and other content developed for the Beamz Products by Beamz or
its partners, subcontractors or affiliates, including the musical content developed to allow each laser on a Beamz Product to play
musical instruments or sound effects along with a background song, video song, or soundstage, all as may be supplemented from time
to time by Beamz or its partners, subcontractors or affiliates.

 

2.3           “Beamz
Cypher LLC Agreement” means the Limited Liability Company Agreement, of even date herewith, by and between Cypher and
Beamz.

 

2.4           “Beamz
DJ Software” means the Beamz DJ software as currently marketed by Beamz, together with any future versions or derivative
works thereof, or modifications or enhancement thereto

 

2.5           “Beamz
Player” means the Beamz Player interactive music system, as currently marketed by Beamz, together with any future versions
or derivative works thereof, or modifications or enhancement thereto.

 

2.6           “Beamz
Player Software” means the Beamz Player software as currently marketed by Beamz with the Beamz Player, together with
any future versions or derivative works thereof, or modifications or enhancement thereto.

 

    	 

    	 

    

 

2.7           “Beamz
Products” means the Beamz Player, the Stand-Alone Beamz Player and the Licensee Gaming Platform.

 

2.8           “Beamz
Software” means the Beamz Player Software, Beamz Studio Software, and Beamz DJ Software (including any new software developed
for the Stand-Alone Beamz Player), together with any future versions or derivative works thereof, or modifications or enhancement
thereto.

 

2.9           “Beamz
Software Engine” means the software (including all source code, technology, documentation, architecture, intellectual
property, and related materials) used to create interactive music, including but not limited to (a) the Beamz Software; (b) any
software which is similar to Beamz Software or provides features and/or functionalities similar or comparable to the Beamz Software;
and (c) all of the features and functionality and other items and descriptions which are the subject of Beamz's patent application
No. 12/586,885, CIP of 1005 (System and Methods for the Creation and Performance of Enriched Musical Composition), and patent application
no. PCT!US2010/000644, PCT of 1013 (System and Methods for the Creation and Performance of Enriched Musical Composition).

 

2.10         “Beamz
Studio Software” means the Beamz studio software as currently marketed by Beamz, together with any future versions or
derivative works thereof, or modifications or enhancement thereto

 

2.11         “Cypher”
means Cypher Entertainment Company, Inc.

 

2.12         “Cypher
Content” means Gaming Products developed by Cypher for use on a Beamz Product or on any New Laser Controller Hardware.

 

2.13         “Cypher
Customer” means any customer that (a) is verifiably directed to the Beamz website by Cypher or a Cypher customer and
(b) was a paying customer of Cypher prior to being directed to the Beamz website.

 

2.14         “Field
of Use” means the use of the Licensed IP in conjunction with the Beamz

Products.

 

2.15         “Gaming
Products” means video games that are designed and developed to be played on the Beamz Products or any New Laser Controller
Hardware.

 

2.16         “Intellectual
Property” means any and all current and future patents and patentable rights, patents pending, continuations, enhancements,
know how, rights in mask works, copyrights, trademarks (including service marks), technology, trade secrets, specifications, software,
drawings and design rights whether registered or unregistered, and including any application for registration and any registration
of any of the foregoing, and all rights or forms of protection of a similar nature or having equivalent or similar effect to any
of these, which may subsist anywhere in the world.

 

2.17         “Licensed
IP” means the Intellectual Property pertaining or relating to (a) the Beamz Content; (b) the Beamz Products; (c) the
Beamz Software; and (d) the patents, patents pending, and trademarks listed on Schedule A hereto; (d) the Beamz brand; and
(e) any derivative works, modifications, future patents, patents pending, enhancements, or future versions or generations of the
above.

 

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2.18         “Licensee
Gaming Platform” means a New Laser Controller Hardware platform that will be developed and designed by Licensee pursuant
to the Beamz Cypher LLC Agreement for use with the Beamz Content, Beamz Software, or Cypher Content.

 

2.19         “Manufacturing
License” means the right to manufacture the Beamz Products.

 

2.20         “New
Laser Controller Hardware” means a new hardware design which utilizes the Beamz Licensed IP and is an alternative variation
of the Beamz Products.

 

2.21         “Stand-Alone
Beamz Player” means the Beamz Player modified to operate with a handheld device pursuant to the development program defined
in the Beamz Cypher LLC Agreement.

 

2.22         “Subject
Content” means the Licensed IP, the Cypher Content, or the Beamz Content.

 

2.23         “Term”
has the meaning set forth under Section 7.1 below.

 

2.24         “Unit”
means one unit of any Beamz Product.

 

III. GRANT OF LICENSE

 

3.1           During
the Term, and subject to the terms and conditions of this Agreement and the Beamz Cypher LLC Agreement, Beamz hereby grants to
Licensee the following:

 

(a)          A
worldwide, non-exclusive, non-transferable, non-sublicensable right and license to use, sell, market, and distribute up to 50 songs
of the Beamz Content in conjunction with the sale of Beamz Products in the Field of Use. Cypher and Licensee will be required to
include the Beamz Player Software or the new software to be developed in conjunction with the Stand-Alone Beamz Player (or future
generations of such software) and a mutually agreeable range of Beamz Content with each Beamz Product, and will be responsible
for any production and media cost associated with including such software and content with the Beamz Products.

 

(b)          A
worldwide, non-exclusive, non-transferable, non-sublicensable right and license (the “Manufacturing License”)
to develop, modify and/or manufacture the Beamz Products and any additional products unanimously approved by the Board of Managers
of Licensee (the “Licensee Board”).

 

(c)          A
worldwide, exclusive, non-transferable, non-sublicensable right and license to make (for itself) Cypher Content and other software
for the Licensee Gaming Platform, the Beamz Products, and any New Laser Controller Hardware, except as otherwise unanimously approved
by the Licensee Board.

 

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(d)          Licensee
desires to develop software in order to allow the Beamz Player Software to work on the Stand-Alone Beamz Player and the Licensee
Gaming Software. Such software will be of two-types: (i) software which modifies, enhances, improves, or is a derivative of, the
Beamz Software and/or the Beamz Software Engine but that is included in the Beams Software and/or the Beamz Software Engine (the
“Modified Beamz Core Software”); and (ii) software which is outside of the Modified Beamz Core software, but
that can be used in conjunction with the Beamz Core Software (the “Non-Beamz Core Software”). Licensee is hereby
granted a worldwide, exclusive, non-transferable, non-sublicensable right and license to add to, enhance, and modify the Beamz
Player Software in order to allow the Beamz Player Software to work on the Stand-Alone Beamz Player and the Licensee Gaming Platform;
it being agreed and understood that: (i) Licensee's shall exclusively own all right, title and interest in, to and under the Non-Beamz
Core Software; and (ii) Beamz shall exclusively own all right, title and interest in, to and under the Modified Beamz Core Software.
It is further agreed that Beamz will be provided with a copy of all source code and documentation for the Modified Beamz Core Software
developed by Licensee, and Beamz will have the non-exclusive right to use such software without remuneration to Licensee.

 

3.2           For
so long as Licensee delivers to Beamz the Minimum Royalty Payments (as defined below) within the period of time specified in Section
4.5 below, Beamz agrees that Beamz shall not: (i) manufacture, or have manufactured, any New Laser Controller Hardware except in
conjunction with Licensee; and (b) license the Licensed IP for use by any other person or entity to make Gaming Products; it being
agreed and understood that, notwithstanding the above, Beamz will have the right to license the Licensed IP to any other person
or entity for any other purposes, provided, however, that should a licensee desire to make a hardware product that utilizes the
Licensed IP and that is competitive with the Beamz Products in the consumer market, such license must be approved by seventy five
percent (75%) of the Managers of Licensee then in office, which approval will not be unreasonably withheld or delayed. For the
purposes of this Agreement, the “Minimum Royalty Payments” means royalties paid pursuant to Article IV
hereof in accordance with the following annual minimum sales requirements (each, an “Annual Minimum Sales Requirement”):

 

	 	 	Minimum No. of Units
 to Be Sold by	 
	Calendar Year	 	Cypher (1)(2)	 
	2011	 	 	0	 
	2012	 	 	0	 
	2013	 	 	30,000	 
	2014	 	 	50,000	 
	2015 & Thereafter	 	 	75,000	 

 

(1)         To
the extent Cypher exceeds the minimum in any calendar year, such excess will apply toward future minimum requirements in the next
calendar years.

(2)
For the sake of clarity, the Minimum Royalty Payment is only for the purpose of retaining rights to renew and for exclusivity and
is not recoverable in the event of a shortfall.

 

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IV. ROYALTY & OTHER PAYMENT OBLIGATIONS

 

4.1           For
each Beamz Product sold by Licensee, Licensee will pay Beamz a royalty for the use of the Beamz Content included on such Beamz
Products (if any) equal to $1.50/Unit plus 100% of the out-of-pocket third-party royalties associated with such Beamz Content.
Cypher will have the right to choose the required Beamz Content to be included with any Beamz Product so as to minimize third
party out-of-pocket royalties; it being agreed and understood that no out of-pocket third party royalties will be charged on any
Beamz original content or any Beamz free style “drop and jam” songs that are included as part of the songs to be included
with the Beamz Products.

 

4.2           For
each Unit sold by Licensee, Licensee will pay Beamz a royalty equal to eight percent (8%) of the price paid to Licensee's contract
manufacturer (i.e. initially Luster) or supplier for such Beamz Product.

 

4.3           For
all Beamz Content sold by Beamz, Beamz will pay Licensee an amount equal to eight percent (8%) of the net revenue received by Beamz
from such Beamz Content sales.

 

4.4           For
all Cypher Content sold by Cypher, Cypher will pay Licensee an amount equal to eight percent (8%) of the net revenue received by
Cypher from such Cypher Content sales.

 

4.5           All
payments owed under this Article IV shall be made on a quarterly basis within thirty (30) days after the end of each month.
In the event that Licensee has not purchased the Annual Minimum Sales Requirement for any calendar year, then Licensee shall be
deemed to have fulfilled its minimum by paying to Licensor, within thirty (30) days after the end of such calendar year, an amount
equal to such shortfall (in units) multiplied by 8% of the manufacturing cost of Licensee's contract manufacturer (the “Deficit
Amount”). If Licensee fails to make such payment as provided in the preceding sentence, then Beamz shall have the right
to manufacture, or have manufactured, any New Laser Controller Hardware without restriction whatsoever (including, without limitation,
the restrictions set forth in Section 3.2 above).

 

4.6           Beamz
will issue to Cypher 25,000 shares of its new Series D Convertible Preferred Stock ( which is initially convertible into 250,000
share of Beamz common stock) once Cypher sells a total of 250,000 units of Beamz Products provided, however, that such sales threshold
must be achieved on or prior to June 1, 2021.

 

V. BRANDING AND TRADEMARK USAGE

 

5.1           During
the Term, and subject to the terms and conditions of this Agreement, Beamz hereby grants to Licensee the worldwide, non-exclusive,
non-transferable, nonsublicensable right and license to use the name and trademark “Beamz” in conjunction with the
distribution, marketing and sale of the Beamz Content, the Beamz Software, and the Beamz Products hereunder. Such Beamz branding,
packaging, and all related product and marketing materials, TV advertisements, and other related promotional material will prominently
feature the Beamz brand and logo in a manner approved in writing by Beamz. All such items will also include compliance with any
branding guidelines established by Beamz from time to time as well as any appropriate legal notices specified by Beamz from time
to time.

 

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VI. TITLE AND OWNERSHIP

 

6.1           Licensee
hereby expressly acknowledges and agrees that, as between Licensee and Beamz, and except as otherwise provided herein, the ownership
of, and all right, title and interest in, to and under, the Licensed IP, is and will remain vested solely in Beamz. Except as otherwise
provided herein, Licensee will not have access to or permission to use in any manner the Beamz Products, the Beamz Content, the
Beamz Software, the Beamz name or trademark, or any other Licensed IP without the express written consent of Beamz. All rights
not expressly granted herein are reserved by Beamz.

 

VII. TERM

 

7.1           The
term of this Agreement shall commence on the Effective Date and shall continue for a period of ten (10) years thereafter (the “Initial
Term”); provided, however, that (a) the Agreement will automatically extend for an additional one (1) year periods (an
“Extension Term”) unless Cypher has not sold at least 20% of the minimum sales specified in paragraph 3.2 during
the prior calendar year and either Party provides written notice of cancellation at least 90 days prior to the expiration of the
Initial Term, and (b) if Licensee fails to make payment of any Royalties hereunder (including the payment of any payment of any
Deficit Amount) within the time period set forth herein, and such failure continues for a period of five (5) days after delivery
of written notice by Beamz to Licensee, then either Party may terminate this Agreement upon written notice to the other Party,
which written notice may only be given five (5) years from the Effective Date. The Initial Term, together with any Extension Terms
(if applicable), are referred to together in this Agreement as the “Term.” Notwithstanding anything in this
Agreement to the contrary, all amounts due under this Agreement at the time of the termination or expiration of this Agreement
shall be due and payable in full at the time of such termination, and such obligation, as well as the rights and obligations of
the Parties set forth in Articles VIII and X below, shall survive such termination or expiration.

 

VIII. CONFIDENTIALITY

 

8.1           The
Parties each recognize that they may exchange “Confidential Information” (as defined below) during the Term. For purposes
of this Article VIII, the Party disclosing such Confidential Information shall be referred to as the “Discloser,”
and the Party receiving such Confidential Information shall be referred to as the “Recipient.”

 

8.2           Recipient
has no rights or interest in any Confidential Information of Discloser, and during the Term and thereafter, Recipient shall not
use, for Recipient's own benefit (except to perform its obligations under and to effectuate the intent of this Agreement), or disclose
to any other person, corporation or other entity any Confidential Information disclosed to or acquired by Recipient, except with
the prior written authorization of an officer of Discloser. Recipient shall ensure that any of its shareholders, directors, officers,
employees, agents, servants, independent contractors, subsidiaries or affiliates that are given access to Discloser's Confidential
Information will be bound, by contract, work rules or otherwise, by the same obligations of confidentiality as are provided for
herein.

 

8.3           For
purposes of this Agreement, “Confidential Information” shall mean any confidential information relating to either
Party or its business including, but not limited to, information and data concerning names and other characteristics of actual
or potential customers of Discloser that such Party has procured in accordance with this Agreement, unpublished financial information
including sales and cost figures and projections, tax records and calculations, accounting procedures, personnel records, and the
processes or techniques employed or being evaluated by Discloser, and related know-how and information, now and hereafter developed.
“Confidential Information” shall not include information which is (i) now or which subsequently becomes (otherwise
than in breach of this Agreement) public knowledge; (ii) properly known to Recipient at the time of receipt of the same from Discloser;
(iii) at any time received in good faith by the Recipient from a third party having the right to disclose the same; or (iv) independently
developed by Recipient, provided that the person or persons developing the same have not used the Confidential Information of Discloser.

 

8.4           Upon
the expiration, termination or cancellation of this Agreement for any reason, Recipient shall, upon request by Discloser, return
all physical embodiments of the Confidential Information received from Discloser, and Recipient shall continue for a period of
five (5) years to treat as strictly confidential all Confidential Information received from Discloser. Recipient shall not release
any Confidential Information to any other person or entity, either by declaration, deposition or as a witness except upon prior
written notice to Discloser, which notice shall provide reasonable opportunity for Discloser to take any appropriate measures,
and Recipient shall fully cooperate with Discloser, to provide for the confidential treatment of all such Confidential Information
so disclosed. Discloser shall be entitled to obtain an injunction or restraining order by any court of competent jurisdiction to
enjoin or restrain the unauthorized use or disclosure by Recipient of any Confidential Information, along with all other remedies
available at law and the costs and reasonable attorneys' fees related to enforcing this Agreement.

 

8.5           The
provisions of this Article VIII shall survive for a period of five (5) years following the termination or expiration of this Agreement.

 

IX. INFRINGEMENT BY OTHERS

 

9.1           In
the event during the Term there is any apparent infringement, by third parties of the Licensed IP, the Parties agree that Beamz
shall have the sole right to proceed against such infringers at Beamz's sole discretion. All recoveries had or obtained in such
suit shall belong to Beamz. Each Party shall promptly provide the other Party notice of any potential infringement. The rights
granted herein in no way imply or grant a license or other rights to any of the Beamz patents, patentable inventions, software
or technology or intellectual property. Licensee and its Affiliates acknowledge and agree not to bring any action seeking to invalidate
or render unenforceable any of Beamz's patents.

 

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X. INDEMNIFICATION

 

10.1         Each
Party (the “Indemnifying Party”) agrees at its expense to defend and indemnify the other Party (the “Indemnified
Party”) for damages and reasonable costs incurred in any suit, claim or proceeding brought by a third party against the
Indemnified Party alleging that the Subject Content furnished by the Indemnifying Party and used within the scope of this Agreement
infringes any third party's intellectual property rights (including, without limitation, any copyright, trademark or trade secret
right); provided that each Indemnifying Party is promptly notified of any claim or suit brought against such Indemnified Party
in respect of which such Indemnified Party intends to invoke the provisions of this Section 10.1, although the failure to so notify
the Indemnifying Party shall not release the Indemnifying Party from its obligations under this Section 10.1 so long as the Indemnifying
Party has not been materially prejudiced by such failure. The Indemnifying Party shall be responsible for the defense of any such
action, and shall provide and keep the Indemnified Party fully informed on a current basis of the defense and/or settlement of
such claim or suit. The Indemnified Party shall reasonably cooperate in the defense of such claim or suit and shall have the right,
but no obligation, to participate in the defense thereof at the Indemnified Party's sole cost and expense.

 

10.2         Each
Party agrees at its expense to defend and indemnify the other Party for damages and reasonable cost incurred in any claim, suit
or proceeding brought by any third party against the Party that owns the rights to the Subject Content alleging that any improvements
made by such indemnifying Party to the Subject Content infringes any third party's copyright, trademark or trade secret right.

 

10.3         EXCEPT
FOR CLAIMS MADE BY THIRD PARTIES, NEITHER PARTY SHALL BE LIABLE FOR INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY OR
PUNITIVE DAMAGES (INCLUDING LOSS OF INCOME, PROFITS OR GOODWILL) ARISING UNDER OR IN RELATION TO THIS AGREEMENT WHETHER BASED ON
AN ACTION OR CLAIM IN CONTRACT, EQUITY, NEGLIGENCE, INTENDED CONDUCT, TORT OR OTHERWISE AND EACH PARTY HEREBY WAIVES ANY CLAIMS
WITH RESPECT THERETO. IN CONNECTION WITH THE CONDUCT OF ANY LITIGATION WITH THIRD PARTIES RELATING TO ANY LIABILITY OF ONE PARTY
TO THE OTHER OR TO SUCH THIRD PARTIES, THE ONE PARTY SHALL HAVE ALL RIGHTS (INCLUDING THE RIGHT TO ACCEPT OR REJECT SETTLEMENT
OFFERS AND TO PARTICIPATE IN SUCH LITIGATION) WHICH ARE APPROPRIATE TO ITS POTENTIAL RESPONSIBILITIES OR LIABILITIES.

 

XI. DISCLAIMER OF WARRANTIES

 

11.1         NEITHER
BEAMZ NOR LICENSEE MAKE ANY WARRANTIES WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT OTHER THAN AS EXPRESSLY SET FORTH HEREIN,
AND EACH PARTY EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTIES, INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT.

 

 

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XII. GENERAL PROVISIONS 

 

12.1         This
Agreement shall be binding upon and inure to the benefit of the Parties and their respective permitted successors and permitted
assigns.         Neither Party may assign this Agreement or any of its rights or obligations
hereunder, whether by operation of law or otherwise, without the prior written consent of the other Party, which consent may not
be unreasonably withheld; provided, however, that either Party may assign this Agreement to any purchaser of all or substantially
all of the assets of such Party or to any entity which acquires such Party in a merger or consolidation whereby such Party is not
the surviving entity, without the consent of the other Party. Any permitted assignment of this Agreement by either Party shall
not relieve or release such Party from any of its duties or obligations under this Agreement. Each and every permitted successor
and permitted assign to the interests of either Party to this Agreement shall hold such interests subject to the terms, conditions
and provisions of this Agreement.

 

12.2         Except
as otherwise provided for in this Agreement, all disputes, claims and controversies between the Parties concerning this Agreement
shall be submitted to arbitration before a panel of three arbitrators who. shall apply applicable state and U.S. federal law. The
arbitration shall be conducted according to the commercial arbitration rules of the American Arbitration Association. A Party shall
commence arbitration under this Section by submitting a concise statement of its claim and a demand for arbitration to the other
Party and to the American Arbitration Association. The decision and award of the arbitrators shall be final and binding, and the
award so rendered may be entered in any court having jurisdiction thereof. The arbitration shall be held in Dallas, Texas or New
York, New York, United States of America, or such other location as mutually agreed to by the Parties.         Nothing
in this Agreement shall preclude a Party from seeking equitable or injunctive relief from a court on an emergency, temporary or
expedited basis prior to the pendency of an arbitration proceeding; provided that the arbitration panel, once appointed, shall
have the power and authority to modify or rescind such relief.

 

12.3         This
Agreement, and the rights and obligations of the Parties hereunder, shall be construed and enforced in accordance with the laws
of the State of Texas, United States of America, without regard to its choice of law principles.

 

12.4         All
notices required or permitted under this Agreement shall be in writing and shall be delivered personally or sent by certified mail,
return receipt requested, recognized overnight delivery service, recognized courier service or facsimile as follows:

 

	To Licensee:	Beamz Cypher  Partnership, LLC
	 	10 W. 33r , Suite 220
	 	New York, New York,  10001
	 	Attention:  David Braha
	 	 
	Copy To:	16039 North 82nd Street
	 	Scottsdale, Arizona  85260
	 	Attn:  Charles R. Mollo, CEO

 

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	To Beamz:	Beamz Interactive, Inc.
	 	16039 North 82nd Street
	 	Scottsdale, Arizona 85260
	 	Attn: Charles R. Mollo, CEO
	 	 

 

Either
Party may change its address or facsimile number by giving the other party notice of such change in accordance with this Section.
A notice shall be deemed given (a) if by personal delivery, on the date of such delivery, (b) if by certified mail, on the date
shown on the applicable return receipt, (c) if by courier service or overnight delivery service, on the day delivered, or (d) if
by facsimile, on the date of transmission.

 

12.5         This
Agreement constitutes the full and entire understanding and agreement between the Parties with regard to the subject matter hereof
and supersedes all prior or contemporaneous proposals, oral or written, understandings, representations, conditions and all other
communications between the Parties relating to such subject matter. Any other terms or conditions shall not be incorporated herein
or be binding upon either Party unless expressly agreed to in writing by both Parties. This Agreement may not be amended without
the prior written agreement of both Parties.

 

12.6         If
any provision of this Agreement is declared or found to be illegal, unenforceable or void, then both Parties shall be relieved
of all obligations arising under such provision, but only to the extent that such provision is illegal, unenforceable or void.
Further, this Agreement shall be deemed amended by modifying such provision to the extent necessary to make it legal and enforceable
while preserving its intent or, if that is not possible, by substituting therefor another provision that is legal and enforceable
and achieves the same intended objective. If the remainder of this Agreement shall not be affected by such illegal, unenforceable
or void provision and is capable of substantial performance, then each provision not so affected shall be enforced to the extent
permitted by law.

 

12.7         No
delay or omission by either Party to exercise any right or power hereunder shall impair any right or power or be construed to be
a waiver thereof. A waiver by either of the Parties of any of the covenants, conditions or agreements to be performed by the other
Party or any breach thereof shall not be construed to be a waiver of any succeeding breach thereof or of any other covenant, condition
or agreement contained herein. All remedies provided for in this Agreement shall be cumulative and in addition to and not in lieu
of any other remedies available to either Party at law, in equity or otherwise, and may be enforced concurrently therewith or from
time to time.

 

12.8         Each
Party is an independent contractor. No employment relationship is created by this Agreement. Each Party's employees and sub-contractors
will be under the sole and exclusive direction and control of that Party, will not be considered employees of the other Party for
any purpose, and are ineligible for any employee benefits from the other Party. Each Party shall comply with all relevant and applicable
U.S. and international local, state, and federal requirements, ordinances, regulations, and laws pertaining to the performance
of this agreement.

 

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12.9         Captions,
headings and titles in this Agreement are for reference purposes only and are neither part of this Agreement nor to be used for
purposes of interpreting the Parties' intent.

 

12.10
This Agreement and any amendments, waivers, consents or supplements hereto may be executed in any number of counterparts, and by
different parties in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same agreement. Each such agreement shall become effective upon the execution
of a counterpart hereof or thereof by each of the Parties.

 

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IN
WITNESS WHEREOF, the Parties have executed this Agreement to be effective as of the Effective Date.

 

	 	Beamz Interactive,
    Inc.
	 	 	 
	 	By:	/s/ Charles R. Mollo
	 	 	Charles R. Mollo, Chief Executive Officer
	 	 	 
	 	Beamz Cypher Partnership,
    LLC
	 	 
	 	By:	/s/ David Elmekies
	 	 	David Elmekies
	 	 	Co-CEO

 

    	11LOAN ASSIGNMENT

AGREEMENT

 

THIS LOAN ASSIGNMENT
AGREEMENT, dated June 25, 2012 by and between XL FASHIONS, INC., a Delaware corporation ("Seller") and SEACOAST HOLDINGS
(EFASHION), INC., a Delaware CORPORATION ("Buyer"). Seller and Buyer are sometimes hereinafter referred to individually
as a “Party” and collectively as the “Parties.”

 

RECITALS

 

WHEREAS, pursuant
to a Loan and Security Agreement originally dated as of April 18, 2008, as amended, supplemented or otherwise modified from time
to time, including but not limited to by Amendment to Loan Documents dated March 9, 2011, April I, 2010, December 30, 2010, April
21, 2011 and June 14, 2011 (collectively, the "Loan Agreement") and the other Loan Documents (as hereinafter defined),
Orix Venture Finance LLC (“Orix”) has made certain Loans (as defined in the Loan Agreement) to eFashion Solutions,
LLC ("Borrower");

 

WHEREAS, Pursuant
to an Assignment Agreement dated January 23, 2012 between Seller and Orix, the Loans and the Loan Documents were assigned from
Orix to Seller; and

 

WHEREAS, Seller now
desires to sell to Buyer, and Buyer desires to purchase from Seller the Assigned Interest (as defined herein).

 

NOW THEREFORE, in consideration
of the premises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the Parties hereto agree as follows:

 

I.            Definitions.

 

A.           Assigned
Interest: Any and all rights, claims (including "claims" within the meaning of Section 101(5) of the Bankruptcy Code)
and causes of action of Seller against the Borrower or Orix and any other person or entity that arise under, from, in, to or in
connection with the Loans or the Loan Documents including without limitation: (i) all principal of and interest (whether heretofore
or hereafter accrued) on the Loans and all other amounts paid or payable to Seller from time to time under the Loan Documents from
and after the Effective Date (as defined herein); (ii) any and all payments and property received by or distributions to Seller
and/or Orix from and after the Effective Date (whether for principal, accrued and unpaid interest, fees or otherwise); (iii) all
collateral and security of any kind for or in respect of the foregoing as provided for in the Loan Documents and applicable law;
(iv) warrants to purchase Class A Preferred Units together with any registration rights and (v) all proceeds of any kind of the
foregoing.

 

B.           Assumed
Obligations: The obligations of Seller under the Loan Documents, including but not limited to the documents and filings listed
on Schedule A attached hereto, in respect of the Assigned Interest solely and to the extent arising on and after the Effective
Time (as defined herein).

 

    	 

    	 

    

 

C.           Loan
Documents: The Loan Agreement and all other documents and agreements under which the Assigned Interest or any part thereof
has been created and all material documents and agreements relating thereto, and all amendments, waivers and consents thereto.

 

D.           Person:
Any person, entity, regulatory body or governmental authority.

 

E.           Proceeds:
All proceeds of any kind of the Assigned Interest.

 

F.           Retained
Obligations: The obligations of Seller under the Loan Documents, including but not limited to the documents and filings listed
on Schedule A annexed hereto, in respect of the Assigned Interest solely and to the extent arising before the Effective
Time.

 

II.           Assignment
and Payment.

 

A.           Assignment.
Effective upon receipt of the Purchase Price (the "Effective Time"), Seller hereby irrevocably sells, transfers, assigns,
grants and conveys the Assigned Interest to Buyer; and the Buyer hereby assumes the Assumed Obligations; and Buyer from the Effective
Time shall be entitled to collect and receive the Assigned Interest and all Proceeds and to exercise and enforce all rights with
respect to the Assigned Interest.

 

B.           Payment.
In consideration of the sale and assignment of the Assigned Interest, Buyer shall pay to Seller (in immediately available funds
by wire transfer to the account set forth on Schedule B attached hereto) the purchase price equal to Nine Hundred Twenty
Five Thousand Dollars ($925,000.00) (the "Purchase Price") on or before close of business on June 27, 2012 with time
being of the essence with respect thereto.

 

III.          Seller's
Representations. Seller hereby represents and warrants to Buyer and its successors and assigns as of the Effective Time that:

 

A.           Seller
has full power and authority to assign the Assigned Interest and to enter into and perform this Agreement, and such assignment
and this Agreement have been duly authorized, are legal, valid and binding and enforceable against Seller, and are not in contravention
of any law, order or agreement by which Seller is bound.

 

B.           Seller
has made no prior assignment, hypothecation, pledge, conveyance, participation or other sale or transfer of the Assigned Interest
or of any interest therein. Seller is the sole legal and beneficial owner of the Assigned Interest and has good title thereto,
free and clear of all liens, claims and encumbrances of any kind.

 

C.           Seller
has not exercised or waived any rights in connection the Warrant to Purchase Class A Preferred Units.

 

    	 

    	 

    

 

D.           No
consents, notices, filings, approvals or authorizations are required to be made to or with or received from any person, entity,
or governmental body for the sale hereunder and consummation of the transactions contemplated by this Agreement.

 

E.           Seller
is a sophisticated seller with respect to the Assigned Interest, has adequate information concerning the business and financial
condition of the Borrower to make an informed decision regarding the Assigned Interest, and has independently, without reliance
on the Buyer and based on such information as it deemed appropriate, made its own analysis and decision to enter into this Agreement.

 

IV.         Buyer's
Representations. Buyer hereby represents and warrants to Seller and its successors and assigns, that:

 

A.           Buyer
has full power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and
has obtained all consents and approvals, and, to the best of its knowledge, made all registrations required in connection herewith.

 

B.           This
Agreement and any documents to be executed and delivered in connection herewith have been duly authorized by Buyer, are valid and
enforceable against Buyer in accordance with their terms and are not in contravention of any law, rule, regulation or agreement
by which Buyer is bound.

 

C.           Buyer
has made such examination, review and investigation of facts and circumstances necessary to evaluate the Assigned Interest as it
has deemed necessary or appropriate.

 

D.           Buyer
has made its credit determination and analysis based upon such information as Buyer deems sufficient to enter into this Agreement
and not based on any statements or representations by Seller except as expressly set forth herein.

 

E.           The
sale of the Assigned Interest hereunder is made without recourse, representation or warranty of any kind, except as expressly set
forth in this Agreement.

 

F.           Buyer
is a sophisticated buyer with respect to the Assigned Interest, has adequate information concerning the business and financial
condition of the Borrower to make an informed decision regarding the Assigned Interest, and has independently, without reliance
upon the Seller and based on such information as it deemed appropriate, made its own analysis and decision to enter into this Agreement,
Buyer acknowledges that Seller has advised Buyer that Borrower is in default under the Loan Documents and the Loans are due and
owing.

 

    	 

    	 

    

 

V.          Acknowledgments.
The Parties acknowledge, represent and warrant to each other that neither Party has made any representation or warranty, whether
express or implied, of any kind or character except as expressly set forth in this Agreement and the assignment and transfer of
the Assigned Interest by Seller to Buyer is irrevocable.

 

VI.         Payment
and Delivery by Seller. Subject to the occurrence of the Effective Time, Seller agrees to use commercially reasonable efforts
to have all Proceeds paid or delivered after the Effective Time to be paid or delivered directly to Buyer; in the event that Seller
nevertheless receives any Proceeds after the Effective Time: (a) Seller agrees to accept the same on behalf of Buyer, and to pay
or deliver the same within two (2) business day to Buyer in the same form received, with the endorsement of Seller, without cost
to Buyer, recourse or deduction in any manner, when necessary or appropriate; and (b) Seller shall have no legal, equitable or
beneficial interest in such Proceeds.

 

VII.        Indemnities.

 

A.           Seller
agrees to indemnify, defend and hold Buyer and its officers, directors, employees, agents, partners and controlling persons and
their successors, assigns (collectively, the "Buyer Indemnitees") harmless from and against any and all expenses, losses,
claims, damages and liabilities which are incurred by or threatened against the Buyer Indemnitees or any of them, including without
limitation attorneys' fees and expenses, caused by, or in any way resulting from or relating to: (i) Seller's breach of any of
the representations, warranties, covenants or agreements of Seller set forth in this Agreement and (ii) the Retained Obligations.

 

B.           Buyer
agrees to indemnify, defend and hold each of the Seller and its officers, directors, employees, agents, partners and controlling
persons (collectively, the "Seller Indemnitees") harmless from and against any and all expenses, losses, claims,
damages and liabilities which are incurred by or threatened against the Seller Indemnitees or any of them, including without limitation
reasonable attorneys' fees and expenses, caused by, or in any way resulting from or relating to: (i) Buyer's breach of any of the
representations, warranties, covenants or agreement of Buyer set forth in this Agreement and (ii) the Assumed Obligations.

 

VIII.      Costs
and Fees. Except as otherwise expressly provided for herein, each Party shall bear its own costs and expenses, including but
not limited to attorneys' fees and expenses, in connection with the closing of the transactions contemplated hereby.

 

IX.        Filings
and Further Assurances. Each of the Parties hereto agrees, at its own cost and expense, to execute and deliver, or to cause
to be executed and delivered, all such instruments (including all necessary endorsements) and to take all such action as the other
Party may reasonably request in order to (i) effectuate the intent and purposes of, and to carry out the terms of this Agreement,
and (ii) further effect the transfer of legal, beneficial and record ownership of the Assigned Interest to Buyer.

 

    	 

    	 

    

 

X.           Integration.
This Agreement constitutes the complete agreement of the Parties with respect to the subject matters referred to herein and supersedes
all prior or contemporaneous negotiations, promises, covenants, agreements or representations of every nature whatsoever with respect
thereto, all of which have become merged and finally integrated into this Agreement. This Agreement cannot be amended, modified
or supplemented except by an instrument in writing executed by both Parties.

 

XI.          Notices,
Payments and Deliveries. Notices shall be given by certified or registered mail or personally or by courier at the addresses
set forth on Schedule B attached hereto. Payments and deliveries of Proceeds shall be made as set forth on Schedule B.

 

XII.         Miscellaneous.
The terms of this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors
and assigns. All representations and warranties made herein shall survive the execution and delivery of this Agreement. This Agreement
may be executed in counterparts or by facsimile signature, each of which when so executed shall be an original, but all such counterparts
shall together constitute but one and the same instrument. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to any conflicts of laws provisions thereof. Each party to this Agreement hereby
irrevocably consents to the jurisdiction of the United States Court for the Southern District of New York and the Supreme Court
of the State of New York, County of New York in any action to enforce, interpret or construe any provision of this Agreement or
of any other agreement or document delivered in connection with this Agreement, and also hereby irrevocably waives any defense
of improper venue, forum non conveniens or lack of personal jurisdiction to any such action brought in those courts. Each
Party further irrevocably agrees that any action to enforce, interpret or construe any provision of this Agreement will be brought
only in one of those courts.

 

-SIGNATURE PAGES TO FOLLOW-

 

    	 

    	 

    

 

IN WITNESS WHEREOF, the undersigned have
executed and delivered this Loan Assignment Agreement as of the date first stated above.

 

	 	XL FASHIONS, INC.
	 	 	 
	 	By:	s/Ruben Azrak
	 	Name: 	Ruben Azrak
	 	Title:	CEO
	 	 	 
	 	SEACOAST HOLDINGS (EFASHION), INC.
	 	 	 
	 	By: 	s/Eben Moulton
	 	Name: 	Eben Moulton
	 	Title:	Partner

 

    	 

    	 

    

 

SCHEDULE A

List of Loan Documents

 

1.           Loan
and Security Agreement between ORIX Venture Finance LLC and eFashion Solutions, LLC dated April 18, 2008

2.           Schedule
to Loan Agreement

3.           Authorization
to File UCC-1 Financing Statement executed by Borrower dated March 27, 2008

4.           Warrant
to Purchase Class A Preferred Units issued by Borrower to ORIX

5.           Certified
Resolution and Incumbency Certificate of Borrower

6.           Disbursement
Instructions from Borrower to ORIX

7.           Confirmation
re closing Documents executed by Borrower

8.           Representations
and Warranties of Borrower dated February 26, 2008

9.           Control
Agreement among Borrower, ORIX and Morgan Stanley

10.         Letter
of instruction form ORIX to Morgan Stanley

11.         Payment
Agreement executed by UPS Capital Business Credit in favor of borrower and ORIX

12.         Amendment
to Registration Rights Agreement among Borrower, ORIX, and the other parties thereto

13.         Landlord
Agreement executed by 80-90 Enterprise A venue Associates, LLC with respect to premises located at 80 enterprise Avenue south,
Secaucus, New Jersey 07094

14.         Legal
Opinion of Olender Feldman LLP to ORIX

15.         Insurance-Lender's
Loss Payee Endorsement

16.         Amendment
to Loan Documents dated March 9, 2009, April 1, 2010, December 30, 2010, April 21, 2011 and June 14,2011.

17.         Debt
Subordination Agreement dated December___, 2010 with ABS Capital Partners V, L.P.

18.         Side
Letter dated June 14, 2011 with ABS Capital

19.         UCC-1
Financing Statement Filed in the office of the NJ Secretary of State

20.         Letter
to Wachovia Bank, dated January 13, 2012 regarding wiring of funds

21.         Letter
to Wachovia Bank, dated January 12,2012 regarding Notice

22.         Letter
to Morgan Stanley, dated January 12, 2012 regarding notice of control

23.         Letter
to Morgan Stanley, dated January 12, 2012 regarding no longer acting on Borrower's instruction

24.         Assignment
Agreement dated January 23, 2012 between ORIX and XL Fashions Inc.

 

    	 

    	 

    

 

SCHEDULE B

Notice, Payment and Delivery Instructions

 

To Seller:

 

Notices:

XL Fashions Inc.

1384 Broadway, 17th Floor

New York, New York 10018

Attention:       Chief
Executive Officer

 

With a copy to:

 

XL Fashions Inc.

1384 Broadway, 17th Floor

New York, New York 10018

Attention:        Legal
Department – General Counsel

 

Payments:

 

	Bank Name:	Gotham Bank
	City/State:	New York, New York
	ABA#:	026010605
	Account Name:	XLFashions, Inc.
	Account Number:	004068785
	Re:	eFashion

 

To Buyer:

 

Notices:

 

SEACOAST HOLDINGS (EFASHION),
INC.

55 Ferncrof Road, Suite 110

Danvers, Massachussets 01923

Attention: Thomas W. Gorman

Telephone: 978-750-1311

Email: tgorman@seacoastcapital.com

 

    	9

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