Essential Reality Inc Sample Contracts

Alliance Distributors Holding Inc. – AGREEMENT AND GENERAL RELEASE AND WAIVER (August 3rd, 2007)

ANDRE MULLER, residing at 16 Hunting Hollow Ct., Dix Hills, NY 11746 (the “Employee”) and ALLIANCE DISTRIBUTORS HOLDING, INC., a Delaware corporation with an office at 1160 Commerce Avenue, Bronx NY 10462 (the “Company” or “Alliance”), on behalf of itself and its officers, directors, shareholders, employees, agents and parent, affiliates, predecessor, successor, subsidiary, and other related companies, and each of them jointly and severally (hereinafter singularly and collectively referred to as the “Company”), hereby enter into the following Agreement and General Release and Waiver (the “Agreement”), concerning the Employee’s resignation from the Company.

Alliance Distributors Holding Inc. – May 11, 2007 Alliance Distributors Holding, Inc. 1160 Commerce Avenue Bronx NY 10462 Ladies and Gentlemen: (May 17th, 2007)

We refer to the (i) Financing Agreement, dated November 11, 2004, (the “Financing Agreement”); (ii) the Inventory Security Agreement, dated December 9, 2003 (the “Inventory Security Agreement”); and (iii) the Equipment Security Agreement, dated November 11, 2004 (the “Equipment Security Agreement”), in each case executed or assumed by you and as supplemented and amended.

Alliance Distributors Holding Inc. – ALLIANCE DISTRIBUTORS HOLDING INC. REPORTS THIRD QUARTER 2006 FINANCIAL RESULTS Year-to-Date Sales Increased 15% over Previous Year For Immediate Release New York, New York - November 14, 2006 - Alliance Distributors Holding Inc. (OTC Bulletin Board: ADTR), a distributor of interactive video games and gaming products, announced its financial results for the third quarter of 2006. Net sales for the quarter increased 14% to $15.4 million compared to $13.6 million in the third quarter of 2005. The company incurred a net loss of $283,000, or $0.01 per share, compared to net income of $222,000, or (November 14th, 2006)

Three Months Nine Months ------------------------------ ------------------------------ 2006 2005 2006 2005 ------------- ------------- ------------- ------------- NET SALES $ 15,453 $ 13,566 $ 42,040 $ 36,679 COST OF GOODS SOLD 14,093 12,035 37,470 32,835 ------------- ------------- ------------- ------------- GROSS PROFIT 1,360 1,531 4,570 3,844 ------------- ------------- ------------- ---

Alliance Distributors Holding Inc. – Exhibit No. 99.1 ALLIANCE DISTRIBUTORS HOLDING INC. REPORTS SECOND QUARTER 2006 FINANCIAL RESULTS Year-to-Date Sales Increased 15.0% Over Previous Year For Immediate Release College Point, New York - August 11, 2006 - Alliance Distributors Holding Inc. (OTC Bulletin Board: ADTR), a distributor of interactive video games and gaming products, announced its financial results for the second quarter of 2006. Net sales for the quarter increased 8.5% to $13.3 million compared to $12.2 million in the second quarter of 2005. Net income was $73,095, or $0.00 per share, compared to a net loss of $335,803 (August 11th, 2006)

Three months ended June 30, Six months ended June 30, --------------------------- --------------------------- 2006 2005 2006 2005 ------------ ------------ ------------ ------------ Net sales $ 13,268,597 $ 12,224,803 $ 26,587,196 $ 23,113,638 Cost of goods sold 11,617,158 11,154,292 23,376,846 20,800,790 ------------ ------------ ------------ ------------ Gross profit 1,651,439 1,070,511 3,210,350 2,312,848 Operating expenses: Selling, general and administrative expenses

Alliance Distributors Holding Inc. – Exhibit No. 99.1 ALLIANCE DISTRIBUTORS HOLDING INC. REPORTS FIRST QUARTER 2006 FINANCIAL RESULTS Sales Increased 22.3% Over Previous Year For Immediate Release College Point, New York - May 5, 2006 - Alliance Distributors Holding Inc. (OTC Bulletin Board: ADTR), a distributor of interactive video games and gaming products, announced its results for the first quarter of 2006. Net sales in the first quarter increased 22.3% to $13.3 million compared to $10.9 million in the first quarter of 2005. Net loss was $93,587, or $0.00 per share, compared to a net loss of $129,678, or $0.00 per share, in t (May 11th, 2006)
Alliance Distributors Holding Inc. – Exhibit No. 99.1 ALLIANCE DISTRIBUTORS HOLDING INC. REPORTS FOURTH QUARTER AND YEAR END 2005 FINANCIAL RESULTS Company Operated Profitably; Sales Increased 67% Over Previous Year For Immediate Release College Point, New York - March 13, 2006 - Alliance Distributors Holding Inc. (OTC Bulletin Board: ADTR), a distributor of interactive video games and gaming products, today announced financial results for the fourth quarter and for the year ended December 31, 2005. Net sales in the fourth quarter increased 48.2% to $22.0 million compared to $14.8 million in the fourth quarter of 2004. Net income (March 16th, 2006)

Three months ended Year ended December 31, December 31, (unaudited) ---------------------------- ---------------------------- 2005 2004 2005 2004 ------------ ------------ ------------ ------------ Net sales $ 21,990,855 $ 14,836,792 $ 58,670,335 $ 35,036,991 Cost of goods sold 19,897,132 13,752,396 52,732,769 31,116,020 ------------ ------------ ------------

Alliance Distributors Holding Inc. – RIDER TO LEASE BETWEEN (January 10th, 2006)
Alliance Distributors Holding Inc. – Exhibit No. 99.1 ALLIANCE DISTRIBUTORS HOLDING INC. REPORTS THIRD QUARTER FINANCIAL RESULTS Company Operated Profitably in the Quarter; Sales Increased 95.9% Over Third Quarter 2004 For Immediate Release College Point, New York - November 7, 2005 - Alliance Distributors Holding Inc. (OTC Bulletin Board: ADTR), a distributor of interactive video games and gaming products, today announced financial results for the third quarter and nine months ended September 30, 2005. Net sales in the third quarter increased 95.9% to $13.6 million compared to $6.9 million in the third quarter of 2004. Net incom (November 8th, 2005)

Three months ended Nine months ended September 30, September 30, --------------------------- ---------------------------- 2005 2004 2005 2004 ------------ ------------ ------------ ------------ Net sales $ 13,565,841 $ 6,924,181 $ 36,679,480 $ 20,200,199 Cost of goods sold 12,034,847 5,966,406 32,835,637 17,363,624 ------------ ------------ ------------ ------------ Gross profit 1,530,994 957,775

Alliance Distributors Holding Inc. – Exhibit No. 99.1 ALLIANCE DISTRIBUTORS HOLDING INC. REPORTS RESULTS FOR PERIOD ENDED JUNE 30, 2005 For Immediate Release College Point, New York - August 16, 2005 - Alliance Distributors Holding Inc. (OTC Bulletin Board: ADTR), a distributor of interactive video games and gaming products, announced its results for the second quarter of 2005. Revenues for the quarter increased by $6,248,426, or 104.6%, from $5,976,377 for the second quarter of 2004 to $12,224,803 for the second quarter of 2005. Net loss was $335,803 or $0.01 per share, compared to net loss of $56,611, or $0.00 per share, in the (August 16th, 2005)

Three months ended June 30, Six months ended June 30, --------------------------- --------------------------- 2005 2004 2005 2004 ------------ ------------ ------------ ------------ Net sales $ 12,224,803 $ 5,976,377 $ 23,113,638 $ 13,276,018 Cost of goods sold 11,154,292 5,196,597 20,800,790 11,397,218 ------------ ------------ ------------ ------------ Gross profit 1,070,511 779,780 2,312,848 1,878,800 Selling, general and administrative expenses 1,2

Alliance Distributors Holding Inc. – Exhibit No. 10.01 [logo] March 21, 2005 Dear Barbara, The following is an understanding that we have reached about your part-time employment with Alliance Distributors Holding Inc. (Alliance). Part-time shall be defined as a minimum of 25 hours per week. It can be changed only by a written letter that both of us sign. Your position will be Chief Financial Officer. Your employment is at will. It may be terminated by either you or Alliance on 30 days' notice for any reason or no reason. Based on our agreement, the starting salary is at the rate of $125,000 per year. In addition you will have the (April 8th, 2005)
Alliance Distributors Holding Inc. – LLIANCE DISTRIBUTORS HOLDING INC. REPORTS FOURTH-QUARTER AND YEAR-END 2004 FINANCIAL RESULTS For Immediate Release College Point, New York - March 31, 2005 - Alliance Distributors Holding Inc. (OTC Pink Sheets: ADTR), a distributor of interactive video games and gaming products, today reported results for the fourth quarter and full year ended December 31, 2004. Net sales and net loss for the fourth quarter were $14,836,792 and ($281,993), respectively, resulting in a net loss per share of ($0.01), compared with net sales of $10,160,521 and net income of $256,331 resulting in a net income per (March 31st, 2005)
Alliance Distributors Holding Inc. – ALLIANCE DISTRIBUTORS HOLDING INC. [date] To: Number of shares subject to Option(s): _________ Nature of Option(s): Nonstatutory Option Price: ___________ Date of Grant: __________ Expiration Date: _________ Quarterly Vesting Percentage: _________ Certain Limitations: If the Optionee's employment with or rendering of other services to the Company shall terminate other than by reason of death, such Option(s) shall thereafter be exercisable only to the extent, if any, that the Option(s) was(were) exercisable immediately prior to the date of such termination. Such exercise must occur within 30 da (January 18th, 2005)
Essential Reality Inc – ALLIANCECORNER DISTRIBUTORS INC. Financial Statements December 31, 2003 ALLIANCECORNER DISTRIBUTORS INC. Index Page ---- Report of Independent Registered Public Accounting Firm 1 Balance Sheet as of December 31, 2003 2 Statement of Income for the Period from May 9, 2003 (Inception) to December 31, 2003 3 Statement of Stockholders' Equity for the Period from May 9, 2003 (Inception) to December 31, 2003 4 Statement of Cash Flows for the Period from May 9, 2003 (Inception) to December 31, 2003 5-6 Notes to Financial Statements 7-16 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Stock (September 1st, 2004)

ASSETS (Note 4) Current assets: Cash $ 656,853 Accounts receivable, net of allowance for doubtful accounts of $10,000 180,684 Due from factor (Note 4) 1,283,854 Inventory 2,896,207 Due from vendors 14,400 Prepaid expenses and other current assets 42,074 ---------- Total current assets 5,074,072 Property and equipment, net (Notes 5, 6 and 7) 423,372 Other assets 18,334

Essential Reality Inc – CONSULTING AGREEMENT BETWEEN IVC Group AND ESSENTIAL REALITY, INC. This Consulting Agreement (the "Agreement") is made as of the [ ] day of June 2004 by and between Essential Reality, Inc. (the "Company") and IVC Group, a Cayman Island corporation, with an address at 802 Grand Pavilion 1st Floor, P.O. Box 30543 SMB, Grand Cayman, Cayman Islands, BWI (the "Consultant"). WHEREAS, the Company wishes to engage Consultant to advise the Company and Consultant wishes to accept such engagement, all upon the terms and subject to the conditions contained in this Agreement; NOW, THEREFORE, the parties he (August 17th, 2004)
Essential Reality Inc – AGREEMENT This Agreement between ESSENTIAL REALITY, INC., a Nevada corporation (the "Company"), and JAY GELMAN ("Executive") is hereby entered into on July 26, 2004 effective as of July 1, 2004. In consideration of the mutual promises, terms, covenants and conditions set forth herein and the performance of each, it is hereby agreed as follows: 1. Employment and Duties. During the period beginning effective as of July 1, 2004 and ending on June 30, 2006, the Company shall employ Executive on the terms and conditions herein set forth. Executive's title shall be Chairman and Chief Executive Offic (August 17th, 2004)
Essential Reality Inc – SUNRISE SECURITIES CORP. DR. AMNON MANDELBAUM MANAGING DIRECTOR INVESTMENT BANKING TELEPHONE (212) 421-1616 FACSIMILE (212) 750-7277 Mr. Humbert B. Powell, Chairman Essential Reality, Inc. 263 Horton Highway Mineola, NY 11501 INVESTMENT BANKING AGREEMENT Dear Humbert: This agreement ("Agreement") is made and entered into this December ___, 2003, between SUNRISE SECURITIES CORP. ("Sunrise") and ESSENTIAL REALITY, INC. (together with all subsidiaries, affiliates, successors and other controlled units, either existing or formed subsequent to the execution of this engagement, the "Company"). In co (July 14th, 2004)
Essential Reality Inc – CERTIFICATE OF DESIGNATION, OF THE RIGHTS AND PREFERENCES OF SERIES A 6% CONVERTIBLE NON REDEEMABLE PREFERRED SHARES ----------------------------------- --------------------------------------------- PURSUANT TO SECTION 78.195 OF THE GENERAL CORPORATION LAW OF THE STATE OF NEVADA Essential Reality, Inc. a corporation organized and existing under the laws of the State of Nevada (the "Company"), hereby certifies that the following resolutions were adopted by the Board of Directors of the Company pursuant to the authority of the Board of Directors. RESOLVED, that pursuant to the authority granted t (July 14th, 2004)
Essential Reality Inc – IRREVOCABLE PROXY The undersigned stockholders of Essential Reality, Inc., a Nevada corporation (the "Company"), hereby irrevocably make, constitute and appoint Jay Gelman ("Gelman"), from and after the Closing Date (as defined in that certain Exchange Agreement, dated as of June __, 2004, by and among the undersigned stockholders and the Sellers listed therein), as the sole and exclusive attorney and proxy of the undersigned, with full power of substitution and resubstitution, to the full extent of the undersigned's rights with respect to (i) the voting of all the voting securities (whether i (July 14th, 2004)
Essential Reality Inc – {00070274.1 / 0836-001}12 {00070274.1 / 0836-001} THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), (ii) AN EXEMPTION FROM REGISTRATION, OR (iii) TO THE EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES). THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THE ATTACHED WARRANT CERTIFICATE ARE RESTRICTED IN ACCORDANCE WITH THE TER (July 14th, 2004)
Essential Reality Inc – CERTIFICATE OF DESIGNATION, OF THE RIGHTS AND PREFERENCES OF SERIES B CONVERTIBLE NON REDEEMABLE PREFERRED SHARES ----------------------------------- --------------------------------------------- PURSUANT TO SECTION 78.195 OF THE GENERAL CORPORATION LAW OF THE STATE OF NEVADA Essential Reality, Inc. a corporation organized and existing under the laws of the State of Nevada (the "Company"), hereby certifies that the following resolutions were adopted by the Board of Directors of the Company pursuant to the authority of the Board of Directors. RESOLVED, that pursuant to the authority granted to a (July 14th, 2004)
Essential Reality Inc – REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of June [ ], 2004, by and among Essential Reality, Inc. a Nevada corporation (the "COMPANY"), and the investors listed on the Schedule of Investors attached hereto (each, an "Investor" and collectively, the "INVESTORS"). WHEREAS: A. The Company has agreed, upon the terms and subject to the conditions of certain subscription agreements (collectively, the "SUBSCRIPTION AGREEMENTS") with the Investors, to issue and sell on the date hereof to each Investor the Company's Series A 6% Non-Redeemable Convertible P (July 14th, 2004)

MAXIMUM NUMBER OF SHARES NUMBER OF SHARES OWNED TO BE SOLD PURSUANT TO NUMBER OF SHARES NAME OF SELLING SECURITYHOLDER PRIOR TO OFFERING) THIS PROSPECTUS OWNED AFTER OFFERING ------------------------------ ------------------ --------------- -------------------- [___] [___] [0] [Others] [___] [___] [0]

Essential Reality Inc – -------------------------------------------------------------------------- SUBSCRIPTION AGREEMENT BETWEEN ESSENTIAL REALITY, INC. AND THE PURCHASER LISTED ON SCHEDULE 1 HERETO -------------------- JUNE __, 2004 -------------------- -------------------------------------------------------------------------- LIST OF SCHEDULES: Schedule 1 Investor Questionnaire LIST OF EXHIBITS: Exhibit A The Certificate of Designation of the Series A Preferred Stock Exhibit B The Certificate of Designation of the Series B Preferred Stock Exhibit C Registration Rights Agreement Exhibit D Post Transaction Capitaliz (July 14th, 2004)
Essential Reality Inc – AMENDED AND RESTATED CERTIFICATE OF DESIGNATION, OF THE RIGHTS AND PREFERENCES OF SERIES A 6% CONVERTIBLE NON REDEEMABLE PREFERRED SHARES -------------------- ------------------------------------------------------------ PURSUANT TO SECTION 78.195 OF THE GENERAL CORPORATION LAW OF THE STATE OF NEVADA Essential Reality, Inc. a corporation organized and existing under the laws of the State of Nevada (the "Company"), hereby certifies that the following resolutions were adopted by the Board of Directors of the Company pursuant to the authority of the Board of Directors. RESOLVED, that pursuant to th (July 14th, 2004)
Essential Reality Inc – SUPPLEMENT NO. 1 TO SUBSCRIPTION AGREEMENT/CONFIDENTIAL PRIVATE PLACEMENT OFFERING MEMORANDUM ESSENTIAL REALITY, INC. (A NEVADA CORPORATION) This Supplement No. 1 (the "Supplement") to the Subscription Agreement (the "Agreement") and Confidential Private Placement Offering Memorandum dated June 17, 2004 (the "Memorandum") is being furnished to you on a confidential basis in connection with the offering by Essential Reality, Inc., a Nevada corporation (the "Company"), of shares of its Series A 6% Non-Redeemable Convertible Preferred Stock (the "Offering"). The information contained in this Supp (July 14th, 2004)
Essential Reality Inc – 8 1/2% CONVERTIBLE PROMISSORY NOTE (July 19th, 2002)
Essential Reality Inc – PROVISIONS OF THIS WARRANT CERTIFICATE. (July 19th, 2002)
Essential Reality Inc – PROVISIONS OF THIS WARRANT CERTIFICATE. (July 19th, 2002)
Essential Reality Inc – AMENDED CONTRIBUTION AGREEMENT (July 3rd, 2002)