Exhibit 10.24
                 EMPLOYMENT AND SEPARATION AGREEMENT AND RELEASE

      This AGREEMENT is entered into by and between PhotoWorks, Inc. (the
"Company"), and Mickey Lass ("Executive"), to be effective as provided herein.

WHEREAS, the Company employs Executive as its Executive Vice President, and

WHEREAS, the Company has informed the Executive it will be hiring a new
President and Chief Executive Officer; and

WHEREAS, the Company desires to provide Executive with separation benefits
should the new President and Chief Executive Officer decide to make significant
changes in the management team in the first 12 months after beginning
employment;

NOW, THEREFORE, for good and valuable consideration, the sufficiency of which is
hereby acknowledged, the parties agree as follows:

1. Term of Agreement. This Agreement shall be in force and effect only from its
effective date until the expiration of twelve months after the next President
and Chief Executive Officer hired by the Company begins work, unless
automatically terminated by the death or disability of the Executive. For
purposes of this agreement "effective date" shall be defined as the hire date of
the next President and Chief Executive Officer. "Disability" shall mean the
Executive's inability (with such accommodation as may be required by law and
which places no undue burden on the Company), as determined by an independent
physician selected by the Company and reasonably acceptable to the Executive, to
perform his normal duties for a period or periods aggregating 120 calendar days
in any 12-month period as a result of physical or mental illness, loss of legal
capacity or any other cause beyond the Executive's control, unless the Executive
is granted a leave of absence by the Board.

2. Severance Benefits. If Executive's employment with Company should be
involuntarily terminated without cause, or should the Executive resign for good
reason within twelve months of a new President and Chief Executive Officer
beginning work at the Company, and at the time of the notice of termination or
resignation, Company shall have a cash balance of at least two million dollars
($2,000,000.00), Company will pay to Executive the following severance benefits,
on the condition that Executive signs a full Release of Claims in the form
attached hereto as Exhibit A. For purposes of this agreement "cash balance"
shall be defined as the book balance of the Company as reported on the daily
cash report on the date of notification of termination or resignation.

      A. Executive shall be paid severance in the amount of eighty-one thousand
      dollars ($81,000.00), less lawfully required withholdings. Forty thousand
      five hundred dollars ($40,500.00) of this amount will be paid on the first
      regular pay date after termination date, and the remaining forty thousand
      five hundred dollars ($40,500.00) of this amount will be paid no later
      than the first regular pay date that occurs no less than three months
      following termination date.

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      B. Executive shall be paid any accrued vacation and earned personal time
      on the next regular payroll date after his termination.

      C. Executive's health benefits for himself and his dependents shall be
      continued for three calendar months beyond the month in which the
      termination takes effect, on the same terms as the Company provides them
      immediately prior to the termination, or until the Company has made the
      second severance payment, whichever is later, provided, however, that
      health benefits continuation shall cease upon Executive becoming employed
      in a position that provides reasonably comparable health benefits.

3. Definitions.

      A. For purposes of this Agreement, "termination without cause" means
      involuntary termination for reasons other than the following:

            (i) A clear refusal to carry out any material lawful duties of the
      Executive or any reasonable directions of the Board or Chief Executive
      Officer, provided the Executive has been given reasonable notice and
      opportunity to correct any such failure;

            (ii) Violation by the Executive of a state or federal criminal law
      involving the commission of a crime against the Company or any of its
      subsidiaries;

            (iii) Deception, fraud, misrepresentation or dishonesty by the
      Executive, or any incident materially compromising the Executive's
      reputation or ability to represent the Company with investors, customers
      or the public; or

            (iv) Unauthorized use or disclosure of confidential information or
      trade secrets.

      B. For purposes of this Agreement, "good reason" means:

            (i) The assignment to the Executive of any duties materially
      inconsistent and adverse with respect to the Executive's title, position,
      or authority, or removal of a substantial majority of the duties of the
      Executive without replacing them with other duties consistent with a
      position at the executive level in the Company; provided, however, that
      the Company retains the right to make reasonable reorganizations of duties
      within the executive levels of the Company that it determines are in the
      best interests of the Company.

            (ii) Any other material violation of any provision of this Agreement
      by the Company.

4. Confidential Information, Non-Competition.

      A. Executive agrees that, during and after his employment with the
      Company, he will not use or disclose any Confidential Information of the
      Company. Confidential Information is information not known to the general


Separation Agreement and Release - 2
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      public and includes, without limitation, trade secrets, plans, programs,
      source and object codes, specifications, drawings, diagrams, schematics,
      formulae, product designs and concepts, reports, studies, technical
      know-how, methods, customer and supplier lists, customer requirements,
      price lists and policies, budgets, projections, bids, costs, financial
      reports, financing materials, training programs and manuals, and sales and
      marketing programs, materials, plans, and strategies.

      B. Executive agrees that during his employment by the Company and for six
      months thereafter, Executive will not in any capacity (including without
      limitation, as an employee, officer, agent, director, consultant, owner,
      shareholder, partner, member or joint venture) directly or indirectly,
      whether or not for compensation, engage in or assist others to engage in
      any business that is, or is preparing to be, in competition with the
      Company's business of film processing and any and all other businesses in
      which the Company is engaged or demonstrably prepared to be engaged at the
      conclusion of the period in which Executive provides services to the
      Company. Executive agrees that this prohibition extends to any country in
      which the Company conducts business.

5. Nondisparagement. Executive agrees that during his employment and afterward,
he will refrain from making any type of negative or disparaging comments about,
or in any way casting in an unfavorable light, the business operations or
conduct of the Company and its past or present directors, officers, Executives,
representatives, and agents. The Company agrees to direct its officers and
executives to refrain from making or authorizing any type of negative or
disparaging comments about, or in any way casting in an unfavorable light on,
the conduct or performance of Executive.

6. Confidentiality. Each party shall maintain in confidence and not disclose the
existence of or specific terms included in this Agreement, or any payment made
pursuant to the agreement, except to the extent required to obtain tax,
accounting or legal advice, to the extent disclosure is compelled by legal
process, or to the extent disclosure is compelled by applicable law (e.g.,
complying with securities law disclosure requirements).

7. Cooperation. Executive agrees that for six months following the termination
of his employment pursuant to this Agreement, he will reasonably cooperate with
management in case of litigation and as needed to effect a smooth transition of
duties to any successor to Executive.

8. Binding Effect. Executive's rights, duties, and release of claims hereunder
inure to and will bind Executive's heirs, successors, and assigns, and will
benefit the Company and its successors and assigns. No waiver of or forbearance
to enforce any right or provision hereof shall be binding unless in writing and
signed by the party to be bound, and no such waiver or forbearance in any
instance shall apply to any other instance or to any other right or provision.

9. Governing Law; Venue. This Agreement will be governed by the laws of the
State of Washington without regard to its conflicts of laws rules to the
contrary. The parties hereby consent to the exclusive jurisdiction and venue of
the state and federal courts sitting in King County, Washington for all matters
and actions arising under or relating to this Agreement, Executive's employment,
and the termination thereof. The prevailing party in any such action shall be
entitled to reasonable attorney's fees and costs incurred in connection with
such litigation.


Separation Agreement and Release - 3
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10. Severability. No term hereof shall be construed to limit or supercede any
other right or remedy of the Company under applicable law with respect to the
protection of trade secrets or otherwise. If any provision of this Agreement is
held to be invalid or unenforceable to any extent in any context, it shall
nevertheless be enforced to the fullest extent allowed by law in that and other
contexts, and the validity and force of the remainder of the Agreement shall not
be affected.

11. Final Agreement. This Agreement represents the final agreement of the
parties as to all matters addressed herein and supercedes all previous
agreements, negotiations, and discussions by the parties regarding the subject
matter addressed herein.

PhotoWorks, Inc.


By: /s/ Douglas Rowan
        Douglas Rowan
    Its:    Board Member
    Dated:  September 23, 2003

Executive:


/s/ Mickey Lass
Mickey Lass
Dated: August 14, 2003


Separation Agreement and Release - 4
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EXHIBIT A: RELEASE OF CLAIMS

Executive expressly waives, and releases PhotoWorks, Inc. ("Company"), its
officers, agents, employees, directors, successors, assigns, parents,
subsidiaries and affiliated entities (the "Released Parties") from and against,
any and all claims, causes of action, liability and damages Executive has or may
have against the Released Parties, asserted or unasserted, known or unknown,
arising from or in any way relating to Executive's employment or the termination
of such employment through the Effective Date of this release, including without
limitation, common law claims for breach of contract and/or torts, and claims
under any law, statute, ordinance or regulation of the United States and any
state, county, municipality or other governmental entity, specifically including
Title VII of the Civil Rights Act of 1964 as amended, the Age Discrimination in
Employment Act, the Fair Labor Standards Act, the Equal Pay Act, the Family and
Medical Leave Act, the Americans with Disabilities Act, the Employment
Retirement Income Security Act, the Health Insurance Portability Protection Act,
the Washington Law Against Discrimination, any and all other laws regarding
civil rights, and any other legal limitation on the employment relationship.
Executive agrees that he is entitled to no further compensation or consideration
from the Company after the date of this Final Release except as expressly
provided in the Employment and Severance Agreement and Release entered into by
Executive and the Company ("Agreement").

Executive represents that he has not filed any complaints, charges, or lawsuits
against the Released Parties with any governmental agency or court, and agrees
that he will not file any complaint, charge, or lawsuit in the future asserting
a claim he is releasing under this Final Release; provided that this covenant
shall not preclude Executive from exercising any non-waiveable legal right he
may have to file a charge with the Equal Employment Opportunity Commission, but
Executive acknowledges and agrees that he has waived any and all rights to
receive monetary compensation in connection with the resolution or ultimate
disposition of such charge or any related legal proceeding.

Executive acknowledges that he is executing this Release in exchange for and as
a condition of receiving the consideration set forth in the Agreement.

Executive is hereby advised that he is waiving legal rights under the Age
Discrimination in Employment Act by executing this Agreement, which Act requires
that Executive be advised to consult an attorney prior to executing this
Agreement. Executive has 21 days in which to consider this Agreement, but may
sign and return it sooner if Executive so elects. This Agreement can be revoked
by Executive for seven days after it is executed by Executive, by written notice
of revocation delivered to the Company's offices. The severance benefits
provided for herein are offered individually to Executive and are not part of
any group program or plan.

This Agreement shall be effective seven days after the date executed by
Executive and delivered to the Company.

Executive: __________________________________             Dated:________________
           Mickey Lass


Exhibit A - Release