DISTRIBUTION AGREEMENT

THIS AGREEMENT (the “Agreement”), made effective this 26 ^th  day of August, 2009 (“Effective Date”) by and between Elliptical Mobile Solutions, LLC, a limited liability company duly organized under the laws of Arizona, (hereinafter “EMS”), and Dot VN, Inc., a corporation duly organized under the laws of the State of Delaware (hereinafter “DOT VN”).

WHEREAS, EMS manufactures and markets certain products and desires to increase the sales of such products;

WHEREAS, DOT VN desires to promote and sell such product; and

WHEREAS, EMS is willing to appoint DOT VN and DOT VN is willing to accept such appointment as distributor of EMS’ products in the territory defined herein;

NOW, THEREFORE, in light of the mutual promises and covenants hereinafter set forth and for consideration the sufficiency and receipt of which is hereby acknowledged, the parties agree to as follows:

For purposes of this Agreement, the following words, terms and phrases where written with an initial capital letter, shall have the meanings assigned to them in this Article 1 unless the context otherwise requires:

1.1 Products .  “Products” shall mean those products described in Exhibit A attached hereto and incorporated herein, as amended by EMS from time to time.  EMS shall give DOT VN thirty (30) days written notice of such Amendment.

1.2 Territory .  “Territory” shall mean a non-exclusive right to distribute in Asia and an exclusive right to distribute in Vietnam. DOT VN has exclusive rights only to Vietnam subject to the requirements of Article 2.1.

1.3 Dot VN List Price.   “Dot VN List Price” shall mean the prices then being quoted from time to time by EMS for sales of Products to DOT VN. Dot VN List Price does not include transportation, customs duties, tariffs, taxes, fees or other charges which may be imposed on the importation, handling, transportation, purchase, use or sale of Products. The current DotVN List Price can be found in Exhibit A .

1.4 DOT VN Information . “DOT VN Information” shall mean all information, other than information in published form or expressly designated by DOT VN as non-confidential, which is directly or indirectly disclosed to EMS, regardless of the form in which it is disclosed, relating in any way to DOT VN’s markets, customers, products, patents, inventions, procedures, methods, designs, strategies, plans, assets, liabilities, costs, revenues, profits, organization, employees, agents, or business in general.

1.5 EMS Information . “EMS Information” shall mean all information, other than information in published form or expressly designated by EMS as non-confidential, which is directly or indirectly disclosed to DOT VN or embodied in Products provided hereunder, regardless of the form in which it is disclosed, relating in any way to EMS’ markets, customers, products, patents, inventions, procedures, methods, designs, strategies, plans, assets, liabilities, costs, revenues, profits, organization, employees, agents, or business in general.

1.6 Brand(s).  “Brands” shall mean all names, logotypes and trademarks held by EMS licensed to DOT VN exclusively for the purpose of selling and promoting the Products.

2.1 Scope .  EMS hereby appoints DOT VN, and DOT VN hereby accepts appointment, as EMS’ distributor during the term of this Agreement with the right to sell or otherwise distribute Products in the Territory, under EMS’ name, logotypes and trademarks, or such other name as may be agreed to in writing by the Parties, subject to all the terms and conditions of this Agreement. Subject to the provisions of paragraph 2.2, such  right to distribution shall be exclusive as to Vietnam (only) (“Exclusivity Right”), and shall be effective for a period of eighteen months (18) months from the Effective Date, provided, however that the sales quotas (the “Quotas”) set forth in Exhibit B  are met by DOT VN.  Upon the satisfaction of the Quotas, the Exclusivity Right shall be extended in accordance with the schedule attached hereto as Exhibit B .  EMS shall not appoint any person or entity other than DOT VN as its distributor, representative or agent for Products in Vietnam. EMS shall not sell, transfer, license or otherwise make available Product to any person or entity other than DOT VN in Vietnam. The Quotas shall be subject to a good faith review by both parties every year. If the Quotas are not met in any particular year, the Exclusivity Right shall terminate and EMS shall have the right to appoint other distribution agents in and/or market and sell the Products directly into Vietnam.

2.2 Equipment Licensure .   It is acknowledged that Products cannot be sold in Vietnam until the requisite equipment licenses are granted.   Therefore, the applicable time periods governing the Exclusivity Rights and Quotas during the initial year of this Agreement shall be tolled up to and including the date the requisite licenses are granted by Vietnam’s Ministry of Information and Communications or such other government agencies as applicable, but in no event shall the time periods be tolled for a period greater than 12 months.   DOT VN shall dilligently apply for the requisite licenses.    

2.3    Test Unit .   When requested, EMS shall loan DOT VN units of the Products for testing or marketing in Vietnam for such time as is reasonably required to demonstrate the unit for sale.   DOT VN will  pay all reasonably costs associated with testing the unit, including transportation, insurance, test personnel and installation.

2.4  Inquiries . Any inquiry or order received directly or indirectly by EMS concerning potential sales of Product to be deployed in Vietnam shall be promptly referred to DOT VN. DOT VN may not market, resell or distribute Products outside the Territory, and shall promptly contact EMS regarding all inquiries and referrals received by DOT VN regarding potential sales of Products outside the Territory.

2.5  Discontinuation .  EMS, in its sole discretion, shall have the right to discontinue the marketing, production, distribution of any or all of a Product Line at any time during the term of this Agreement, provided that EMS gives thirty (30) days prior written notice to DOT VN.  EMS shall be under no obligation to continue the production of any Products, except as per orders accepted and confirmed by EMS.  EMS may modify, replace, and improve Products, at EMS’ discretion, without prior notice and/or liability to DOT VN, but shall give thirty (30) days prior written notice to DOT VN of a price adjustment resulting from any such modication, replacement, improvement or otherwise.   

3.1  Legal Requirements.  DOT VN shall take all reasonable steps to accomplish all national and local legal requirements applicable to the importation and sale of the Product as well as any other activity associated with the importation and sale of the Product, including registration, certification and licensing of Product in Territory, as necessary, and shall provide such related documents to EMS upon request.  EMS retains all such rights, title, and interest in and concerning such rights after Product is so registered. DOT VN will keep EMS updated as to the process and timing. DOT VN is liable for all irregularities and fines attributable to DOT VN’s importation and/or sale of the Product. DOT VN agrees to comply with all intellectual property requirements as set forth in Section 9 of this agreement.

3.2. Assignment or Abandonment .  DOT VN may not abandon its obligations or transfer /assign to third party the rights and obligations originated from this Agreement, without prior written authorization of EMS.   Notwithstanding, nothing herein shall be construed to restrict DOT VN’s right to employ or utilize subcontractors in connection with Product installation or customer service.  DOT VN remains fully liable under this Agreement for any third party engaged by DOT VN to commercially or technically support the sale and distribution of the Product.

3.3. Competition .  DOT VN will not promote trade, represent or distribute, directly or indirectly, in its own name or through third parties other goods that compete directly with the Products supplied by EMS during the term of the Agreement.

3.4  Costs .  DOT VN shall be responsible for all costs and expenses incurred directly or indirectly, from the activities of DOT VN and may not seek from EMS any type of reimbursement or payment for its activities except in situations of gross negligence or malfeasance by EMS. In addition to Dot VN List Price, the amount of any present or future duty, tariff, tax, fee or charge applicable to the importation, handling, transportation, purchase, use or sale of Products shall be paid by DOT VN except where law otherwise provides, in which event the amount of such duties, tariffs, taxes, fees or charges shall be added to the then current Dot VN List Price.

3.5   Local Presence .  DOT VN must maintain an office in the Territory and comply with all applicable national and local legal requirements for maintaining such office.

3.6  Marketing .  DOT VN agrees to use best efforts to solicit, market and distribute Products in order to meet the Quotas.DOT VN agrees to advertise Products and to distribute literature and catalogues and to do such other tasks as are reasonably  necessary to maintain the goodwill of customers within the Territory, and to maintain at all times sufficiently trained sales and technical personnel to enable DOT VN to perform its obligations under this Agreement. EMS agrees to provide DOT VN with all formally released content, sales, marketing and training material written in the English languge, including software versions for DOT VN to translate, at its expense, into materials for the local market. EMS will continually under the term of this agreement provide DOT VN with updates to such marketing material within three (3) days of publication. DOT VN agrees to promote the Product at key marketing events in territory. 

3.7  Compliance .  DOT VN agrees (i) not to make nor permit any of its employees, agents, sales representatives or subcontractors to make any representation or warranty with respect to or otherwise describe any Products distributed and sold hereunder except in strict accordance with literature relating thereto and written descriptions thereof; (ii) that compliance with all applicable laws and regulations and the accurate translation of any descriptive or operational literature, including the expense thereof, shall be DOT VN’s sole responsibility; (iii) not to do anything in violation of the U.S. Import and Export Administration statutes and regulations, or similar laws and regulations within the Territory; (iv) to comply with all laws applicable to the performance of the Agreement, including the Foreign Corrupt Practices Act (15 USC 78 et seq.); and (v) to immediately bring to the attention of EMS any improper or wrongful use in the Territory of EMS’ patents, trademarks, copyrights, emblems, designs, models or similar industrial or commercial rights which come to DOT VN’s notice.

3.8.     Pricing .  DOT VN shall have discretion to establish Product pricing within the Territory.

4.1 Purchase Orders .  DOT VN shall submit purchase orders for the products to EMS in writing or by facsimile which shall set forth at a minimum:

Upon receipt of a DOT VN purchase order, EMS shall respond in writing by either accepting the order as received or modifing the terms of the purchase order.  No purchase order shall be deemed accepted unless and until each party has confirmed in writing their respective acceptance.  The terms and conditions of this Agreement shall apply to and govern all orders for Products submitted to EMS by DOT VN.  Nothing contained in any such orders shall in any way modify such terms and conditions or add any additional terms and conditions except as otherwise agreed to in writing by the parties hereto.  In the event of any conflicting terms between any purchase order and this Agreement, the terms and conditions set forth herein shall control.

4.2 Delivery Terms .  Products will be delivered FOB common carrier at EMS’ facility on the date specified on an accepted purchase order. EMS shall inform DOT VN of any delay in shipment of Products under accepted purchase orders. If such unexpected delays exceeding 30 days occur DOT VN shall have the right to cancel such accepted but delayed purchase order.

5.1 Prices.  The EMS List Price and related discount to DOT VN for distribution of the Product is expressed in Exhibit A .

5.2   Price Changes . EMS shall inform DOT VN of any price changes at least 30 days before such pricing comes into effect. DOT VN shall during the term of this Agreement be eligible for lowest pricing of the Product offered by EMS to any channel partner in Viet Nam, subject to related volume and quota requirements to be elgible for such lower price level.

(c) Price Decrease. In the event that EMS decreases the price for any EMS Product, the decrease shall apply to all units of such product that remain unshipped and to future Products ordered.

5.3 Payment Terms.   All payments hereunder shall be made on the terms contained in each accepted purchase order in U.S. Dollars.

6.1 Representations and Warranties by EMS .

6.1.1 Organization .  EMS is a limited liability company duly organized, validly existing and in good standing under the laws of the state of Arizona.

6.1.2 Authority; Consents and Approvals; No Violations . EMS has the full corporate power and authority and legal right to execute and deliver this Agreement, and otherwise to perform its obligations hereunder. This Agreement has been validly executed and delivered by EMS and will constitute a valid and binding obligation of EMS enforceable in accordance with its terms, except to the extent such enforceability may be limited by the effects of bankruptcy, insolvency, reorganization, moratorium or other similar laws  affecting creditors' rights generally, and by the effect of general principles of equitable law, regardless of whether such enforceability is considered in a proceeding in equity or at law. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby do not and will not violate any provision of EMS’ Articles of Organization or Operating Agreement or violate, conflict with, result in a breach of or constitute (with or without due notice, lapse of time or both) a default under any agreement, license, contract, franchise, permit, indenture, lease, or other instrument to which EMS is a party, or by which it or any of its assets are bound.

6.1.3 Intellectual Property.  EMS warrants and represents that the exercise of any rights by DOT VN in accordance with this Agreement will not infringe upon the any right of any third party.

EMS further represents and warrants that:

6.2 Representations and Warranties by DOT VN .

6.2.1 Organization .  DOT VN is a corporation duly organized, validly existing and in good standing under the laws of the state of Delaware.

6.2.2 Authority; Consents and Approvals; No Violations .  DOT VN has the full corporate power and authority and legal right to