Dear Vending Operator: You are receiving this letter because your client/prospective client is implementing a system to independently verify vending commission rebates. Their decision should not be construed as a negative reflection upon you or your organization. If you are currently using DEX within your operation, you already know the benefits that DEX will bring to your bottom line. From that perspective, incorporating our system into your operation will involve very few changes. The information attached is directed more towards operators not using DEX, having little or no knowledge as to how it works, and needing additional information. We welcome your feedback, and will respond promptly to your questions and concerns. Yours truly, Vend Audit Controls, Inc.

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What is DEX? DEX is an electrical interface used to connect a vending machine to an external computer/hand held device. The interface has a standard set of data and transmission protocol. This standardized interface allows any external device using this protocol to communicate with a DEX-equipped vending machine. In simple terms, it is a data recorder for vending machines. Who owns DEX? DEX is a protocol created by the European Vending Association in conjunction with National Automatic Merchandising Association (NAMA). DEX is to vending what the Internet is to computers. It is a standardized language designed to transmit data transmission from a vending machine. It is the vending machine’s equivalent of an airplane’s ‘black box’. What do I need to do to make my machines DEX compatible? In many cases, nothing at all. Beverage machine manufacturers have been DEX resident since the early 1980’s. Full line vending machine manufacturers began manufacturing their machines with DEX in the the late 1990’s. Virtually any machine using a single price or dumb mech can be outfitted with an aftermarket DEX kit, and the installation can be done in a matter of minutes. As of this writing, DEX aftermarket kits can be purchased from ASC or from one of their distributors, and cost about $200 each. ASC can be reached at (410) 666-3800 X 102. Their web site is http://inonetechnology.com. To determine which of your existing machines are DEX resident, contact the manufacturer or ASC. As of this writing, we know of no other company manufacturing an aftermarket DEX upgrade kit. How do I retrieve and transfer this data from the vending machine? The data is retrieved from the vending machine using a hand held device/computer. Every major vending software house now offers a DEX compatible hand-held device to compliment their software package and they will be a valuable resource for helping you through this conversion. When your driver services the DEX-equipped vending machines, he simply plugs his hand held device into the vending machine and when he returns to your facility, plug this same device into an Internet-capable computer. We will provide the utility for transmitting the data. To use our system, you must have Internet access. While high speed access is preferred, a standard dial-up connection will be adequate. I do not want to use the hand-held device provided by my vending software provider. Do I have an alternative? Yes. ASC manufactures an independent device for about $440 with holster. One ASC device or one hand-held device is required for each route salesperson, serving Vend Audit Control monitored machines. What does Vend Audit Controls charge for this service? The vend operator pays nothing for our service and technical support is also provided at no charge.

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How does the Vend Audit Controls system work? From an operational perspective, it works exactly like any other DEX system. There are however, some very important differences:

1. We will provide you with a utility used to send this data to our site. Data must be transmitted by the end of each day for all vend Audit Control machines.

2. We compute receipts based upon meter readings. If refunds, tests, robberies, or other reductions to cash collected have taken place, you need to let us know so that we can adjust cash receipts accordingly.

3. You are responsible for maintaining on our system a complete list of all of the machines you operate at the client’s site. If machines are exchanged, removed, or added, we need to know this as well. The client will be auditing machine placements on a regular basis and would not be happy if you were operating machines that we were not tracking. DEX boards and DEX-resident main boards are serialized. From time to time, these could fail and will need to be replaced. When that happens our system must be notified so that we can update the serial number(s).

4. During the month we will be computing and notifying you of period to date commission rebates. If we do not hear from you, we must assume that you agree with our computations.

5. At the end of the month, we will send you an invoice for commission rebates due. While this is a radical departure from the way vending rebates are now presented, sales volume and the rebate amount itself should be exactly what you expect it to be, with no surprises.

Our system is not so different than what one would expect from a vending management company. However we do not dictate prices, do not negotiate contracts, and do not charge you fees for our services. Also, with our system, there are no forms to fill out, no documents to mail. Everything you need will be located on our web page and all of our systems will be user-friendly.

Upon receiving each machine’s data we determine the commission amount due and send you an email confirmation stating same. Commission amount will be computed from DEX-maintained cash meters, using the formulas stated in your contract. In cases where commission rebates are based on net sales, we will maintain a data table showing tax rates for your municipality.

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From an operator’s perspective, what are the benefits of DEX? DEX to a vend operator is sort of like a health club membership is to an out of shape body. Assuming you join the DEX club and are fully committed to its implementation, the benefits are dramatic. It does however, change the way that you operate – forever. The measured benchmarks you will enjoy include:

• Increase sell-out rates. The ‘sell-out’ rate is defined as total value of inventory (at retail), divided by average receipts per service. So, if your machine has a capacity of $200 and you collect $75 per service, your sell-out rate is 38%. Today’s vending operators have sellout rates between 25-40%. With DEX implementation, sellout rates are frequently 50-75%.

• Reduced truck and warehouse inventory. The reported figure is a 25% reduction. • Reduced machine inventory. Now you can set pars based on actual sales rather than

column capacity. In fact, the cost of the hand held will probably be paid from the elimination of excessive vending machine inventory.

• Warehouse SKU’s will be reduced by a reported 30%. • Same-machine sales will increase by a minimum of 10% to a high of 35%. Remember,

every dollar increase in same machine sales, generates an additional 40 cents to your bottom line.

• Route driver capacity will increase by a reported 20%. This means that for every 5 drivers (and their expensive vehicles), you will now only need 4.

• Faster time to take machine inventories. Without DEX, the best driver will take 3 minutes to inventory a snack machine and 1.5 minutes to inventory a beverage machine. With DEX, count-down inventory is less than 10 seconds.

• Reduced shortages. The typical operator has reported CASH Variance\Shortage of 2 – 3.5%, with some routes as high as 9%. Expect this number to dramatically drop to around ½ of 1%.

• Dynamic, location-specific plan-o-grams. Todays vend operator counts on column placement rebates in order to survive. However, we all know that a spiral turn always generates more profit than a column paid for by a product manufacturer. With DEX, each machine can be individually configured based on location-specific product preference. You will also experience less empties.

• Less office support. No manual data entry. • Distributed Data Processing. Larger operations can now create vending specialists who

are responsible for monitoring efficient service. They can create high sell-out rates, productive inventory turns, controllable shortages, and so on. Supervisors and managers who belong in front of clients have no need to be burdened with this duty.

This is where DEX is today. Want to know where it is heading? Keep reading.

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Consider the technologies now being tested, all of which are dependent upon the machine having DEX installed:

• Curbside polling. Your driver will know what to bring into the location before he

leaves his vehicle. • Wireless inventory reporting. Your warehouse will know exactly what to load on the

driver’s truck before the driver returns. • Automated malfunction reporting. DEX can be programmed to report multiple alarm

settings including unauthorized door openings, refrigeration problems, lack of electricity, malfunctioning bill acceptors, etc.

Moving to DEX sooner rather than later, may determine your long-term survival. If your competition begins to properly utilize and execute all of these features and you do not, how will you compete? Want to know more about DEX within your operation? Contact your vending software provider. Contact ASC as well. Ask them to provide proof that these benchmarks are real, and not just contrived. Then act. Starting with Vend Audit Control managed machines will be a great place to start. One last comment. Vend Audit Control’s mission is to protect the vending client, making sure that he receives all of the commission he is entitled to receive under the terms and conditions of his contract. It is our belief that a sufficient number of clients are getting less than they should. By providing this service, we generate our compensation from the any revenues we recover during the time that our monitoring takes place. From that perspective, Vend Audit Controls, Inc., and your organization are in a position to help each other, as well as the entire industry. Chances are, you already know a site or two who is in need of our service. While paying you a placement fee could represent an ethical conflict, you will receive satisfaction in knowing that any operator who quotes a commission rate too-good-to-be-true, and is then audited by us, will be forced to either pay what he quoted, or leave. That is good for your industry and for your operation as well. Now it is time to do your share. Will you help us help make you more profitable, while bringing a higher level of credibility to the industry in which you operate?