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                                                                   EXHIBIT 10.38





                              EMPLOYMENT AGREEMENT


                                 BY AND BETWEEN


                             CONSTELLATION 3D, INC.


                                       AND


                                  STEVE HADDAD
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                              EMPLOYMENT AGREEMENT

         This Employment Agreement (this "Agreement") is entered into effective
as of February 9, 2001 by and between Steve Haddad ("Employee") residing at 2511
Sunny Meadow McKinney, TX 75070 and Constellation 3D, Inc. ("C3D") a Corporation
incorporated in the state of Delaware with its offices at 230 Park Avenue, Suite
453, New York, NY 10169.

         WHEREAS, C3D desires to employ Employee, and Employee desires to become
employed by C3D, on the terms hereinafter set forth.

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

                                    ARTICLE 1

                                     DUTIES

         1.1 During the term of this Agreement, Employee shall be employed by
C3D as Senior Vice President of Business Development and as an officer of C3D
and shall report to the President/Chief Executive Officer of C3D. As such,
Employee shall have duties and responsibilities commensurate with such position,
including, without limitation, the duties and responsibilities set forth in
Exhibit A to this Agreement and such other duties and responsibilities
commensurate with such position as may from time to time be assigned to or
vested in Employee by C3D's Board of Directors, or by the Chairman of the Board
of Directors, or by the Director of Business Development or by the
President/Chief Executive Officer of C3D, all upon the terms and subject to the
conditions set forth herein. Subject to the provisions of Article 5.13, Employee
acknowledges and agrees that Employee may be required, without additional
compensation, to perform services for any business entity controlling,
controlled by, or under common control with C3D by virtue of direct or indirect
beneficial ownership of voting securities of or voting interest in the
controlled entity (such business entities hereinafter individually and
collectively, "Affiliates") and to accept such office or position with any
Affiliate as C3D may reasonably require, including, but not limited to, service
as an officer or director of C3D or any Affiliate, provided that the nature of
such duties is not inconsistent with Employee's position hereunder. Employee
shall comply with all applicable written policies of C3D and Affiliates.
Notwithstanding the foregoing, nothing contained herein shall preclude Employee
from receiving securities in, or from participating in any option plans of, any
Affiliates.

         1.2 During the term of this Agreement, C3D agrees to provide all
reasonable assistance and support to Employee in furtherance of Employee's goals
detailed in Exhibit A to this Agreement. Employee specifically recognizes that
C3D is a development stage company and operates under significant financial
constraints. It shall not be a failure by C3D to provide the requisite support
to Employee, if monetary constraints dictate otherwise.

         1.3 During the term of this Agreement, Employee shall, except during
periods of vacation, sick leave, or other duly authorized leave of absence,
devote the whole of Employee's time, attention, skill, and ability during usual
business hours (and outside those hours on a reasonable basis and when
reasonably necessary to Employee's duties hereunder) to the faithful and
diligent performance of his duties and responsibilities.
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         1.4 During the term of this Agreement, it shall not be a violation of
this Agreement for Employee to serve as an officer or director of a cooperative
apartment, or civic or charitable organization or committee (including, without
limitation, service on a church finance committee), to perform speaking
engagements, or to manage personal passive investments, so long as such
activities (individually or collectively) do not conflict or materially
interfere with the performance of Employee's duties hereunder.

         1.5 Employee's services shall be regularly performed primarily from
Employee's office in Dallas, Texas and at such locations and subject to such
travel requirements as reasonably necessary to the performance of Employee's
duties herein.

                                    ARTICLE 2

                               TERM OF EMPLOYMENT

         The term of this Agreement shall commence on the effective date hereof
and continue for a period of one year subject to earlier termination as
hereinafter provided. At the end of the initial term of this Agreement and each
renewal term of this Agreement, this Agreement shall renew for a period of one
(1) year unless terminated by either party upon providing written notice to the
other party at least thirty days prior to the anniversary of this Agreement. If
at the end of the initial term of this Agreement, C3D does not renew this
Agreement for any reason other than for "Good Cause" as that term is defined
herein, then C3D agrees to pay and Employee shall be entitled to receive 6
months of benefits, perquisites and severance pay of salary, payable in
accordance with C3D's then prevailing practices of its regular payroll. In the
event C3D terminates this Agreement during the initial term or at any time prior
to the two (2) year anniversary of the effective date of this Agreement, for any
reason other than for Good Cause, then C3D agrees to pay and Employee shall be
entitled to receive the remaining term of the Agreement or 6 months, whichever
is longer, of all benefits, perquisites and severance pay of salary, payable in
accordance with C3D's then prevailing practices of its regular payroll. In the
event C3D terminates this Agreement during any term after the two year
anniversary of the effective date of this Agreement, for any reason other than
for Good Cause, then C3D agrees to pay and Employee shall be entitled to receive
for the remainder of the term all benefits, perquisites and severance pay of
salary, payable in accordance with C3D's then prevailing practice of its regular
payroll. In the event C3D fails to pay Employee any and all payments indicated
in this Article 2 when due, Employee shall be entitled to an additional two
months of benefits, perquisites and severance pay in addition to the amounts
payable in accordance with C3D's then prevailing practice of its regular
payroll.

                                    ARTICLE 3

                                  COMPENSATION

3.1.1    Compensation. During the term of this Agreement, as compensation for
         services rendered under this Agreement and in consideration of this
         Agreement, C3D shall pay Employee a salary, in accordance with C3D's
         then prevailing payroll practices, at an annual rate of one hundred
         twenty thousand ($120,000.00) U.S. dollars per year. At the discretion
         of the Board of Directors and upon completion by C3D of its next
         significant financing,

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         Employee's salary may be adjusted in accordance with any adjustment
         granted to other senior executive officers of C3D.

3.1.2    Bonus. For each year of the term of this Agreement, Employee shall be
         entitled to receive a bonus which shall be subject to the discretion of
         the Board of Directors of C3D. At C3D's election, such bonus may be
         paid in cash and/or as a grant of stock options. In the event C3D
         elects to grant Employee stock options as a bonus, such options shall
         be granted upon terms and conditions reasonably determined by the Board
         of Directors and in accordance with C3D's then current Incentive Stock
         Option Plan.

3.2      Options. In connection with and upon the execution of this Agreement by
         both parties, C3D shall grant to Employee under C3D's then current
         Incentive Stock Option Plan an Option to purchase shares of C3D's
         Common Stock at the exercise price and vesting schedule set forth
         below. Any Option must be exercised not later than forty-eight (48)
         months following its vesting.

         a)       Primary Grant: Employee is hereby granted an option to
                  purchase one hundred thousand (100,000) shares of common stock
                  of C3D at an exercise price per share of $6.0625, the closing
                  price of the common stock of C3D on the Nasdaq National Market
                  (Symbol: CDDD) on the effective date of this Agreement.
                  Employee's right to exercise this Primary Grant shall vest as
                  follows: 50% of the Options (representing 50,000 shares)
                  granted pursuant to the Primary Grant shall vest on the six
                  (6) month anniversary of the effective date of this Agreement.
                  The remaining 50% of the Options (representing the remaining
                  50,000 shares) granted pursuant to this Primary Grant shall
                  vest on the one (1) year anniversary of the effective date of
                  this Agreement. In the event Employee is terminated for "Good
                  Cause" and/or resigns for any reason other than for "Good
                  Reason" as that term is defined herein during the initial term
                  of this Agreement, all Options granted to Employee hereunder
                  which have not vested prior to Employee's termination date
                  shall be forfeited and shall not vest and/or be exercisable
                  under any circumstance.

         b)       Secondary Grant: Employee is hereby granted an option to
                  purchase an additional one hundred thousand (100,000) shares
                  of common stock of C3D at an exercise price per share of
                  $6.0625, the closing price of the common stock of C3D on the
                  Nasdaq National Market (Symbol: CDDD) on the effective date of
                  this Agreement. Employee's right to exercise this Secondary
                  Grant of options shall be premised upon Employee achieving the
                  goals detailed in Exhibit A to this Agreement and incorporated
                  herein. The Board of Directors of C3D shall, in its sole
                  discretion and with all due reasonableness and good faith,
                  make the determination as to whether Employee has achieved the
                  goals detailed in Exhibit A. In the event C3D's Board of
                  Directors determines that Employee has achieved the goals
                  detailed in Exhibit A, the options granted under this
                  Secondary Grant shall immediately vest. In the event the
                  Employee is terminated for "Good Cause" and/or resigns for any
                  reason other than for "Good Reason", all Options granted to
                  Employee under the Secondary Grant which have not vested prior
                  to Employee's termination date shall be forfeited

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                  and shall not vest and/or be exercisable under any
                  circumstance, subject to the provisions of Article 3.2.3(b)
                  below.

         c)       Additional Grant: Employee is hereby granted an additional
                  option to purchase 17,320 shares of common stock of C3D at an
                  exercise price per share of $.01. The options granted pursuant
                  to this Additional Grant shall vest immediately upon the
                  effective date of this Agreement. The number of shares that
                  Employee shall be entitled to purchase pursuant to this
                  Additional Grant was determined by dividing One Hundred Five
                  Thousand and No/100 dollars by $6.0625 per share which was the
                  closing price of C3D's common stock on the Nasdaq National
                  Market (symbol: CDDD) on the effective date of this Agreement.

3.2.1    Method of Exercise. The Option shall be exercisable only by delivery of
         an Exercise Notice which shall state the election to exercise the
         Option, the number of Shares in respect of which the Option is being
         exercised (provided that no fractional shares may be exercised except
         on the last exercise of the Option), and such other provisions as may
         be reasonably necessary to evidence Employee's exercise of the Option.
         Such Exercise Notice shall be signed by the Optionee and shall be
         delivered in person or by certified mail to C3D accompanied by payment
         of the Exercise Price. The Option shall be deemed to be exercised upon
         receipt by C3D of such written notice accompanied by the Exercise Price
         as permitted to be paid in Article 3.2.2 below.

3.2.2    Method of Payment. Payment of the Exercise Price shall be by any of the
         following, or a combination thereof, at the election of the Optionee;
         provided, however, that such exercise method does not then violate any
         Applicable Law:

         a)       Cash; or

         b)       Check; or

         c)       Surrender of C3D Shares or delivery of a properly executed
                  form of attestation of ownership of C3D Shares as may be
                  required (including withholding of C3D Shares otherwise
                  deliverable upon exercise of the Option) which have a Fair
                  Market Value on the date of surrender or attestation equal to
                  the aggregate Exercise Price of the Shares as to which the
                  Option is being exercised (but only to the extent that such
                  exercise of the Option would not result in an accounting
                  compensation charge with respect to C3D Shares used to pay the
                  exercise price); and

         d)       Delivery of a properly executed Exercise Notice together with
                  such other documentation as may be required to effect an
                  exercise of the Option and delivery to C3D of the proceeds
                  required to pay the Exercise Price.

3.2.3    Change in Control. With respect to the options granted in Article 3.2
         of this Agreement, upon a "Change of Control" the following shall
         occur:

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         a)       The option for 100,000 shares granted pursuant to the "Primary
                  Grant" shall immediately vest and be exercisable;

         b)       In the event a Change of Control occurs subsequent to the
                  expiration of the initial term of this Agreement, but prior to
                  a determination having been made by the Board of Directors as
                  to whether Employee has achieved the goals set forth in
                  Exhibit A hereto, the option for 100,000 shares granted
                  pursuant to the Secondary Grant shall vest on a pro rata basis
                  to the extent the part or all of the goals set forth in
                  Exhibit A have been achieved as reasonably and with good faith
                  determined by C3D's Board of Directors.

         c)       In the event a Change of Control occurs subsequent to a
                  determination having been made by the Board of Directors that
                  Employee has achieved the goals set forth in Exhibit A hereto,
                  the option for 100,000 shares granted pursuant to the
                  Secondary Grant shall immediately vest and be exercisable; and

         d)       The options granted pursuant to the Additional Grant shall
                  immediately vest and be exercisable.

         For purposes of this Agreement, "Change in Control" means the
occurrence of any of the following events: (i) the acquisition by any person
(deemed to have the same meaning as when used in Section 13 of the Securities
Exchange Act of 1934) or group of persons in one or more specifically related
transactions (and designated as such) of more than Fifty Percent (50%) of C3D's
shares of stock entitled to vote for directors; (ii) a merger, consolidation or
other combination of C3D with one or more other corporations or entities which
results in more than Fifty Percent (50%) of the voting stock or other voting
interests of the surviving corporation being held by former shareholders of the
corporations or entities (other than C3D) which are parties to such merger,
consolidation or other combination; or (iii) the dissolution and liquidation of
C3D or the adoption and execution of a plan or agreement for the sale or other
disposition of all or substantially all of the assets of C3D.

3.3      Benefits and Perquisites. Employee shall be entitled to participate in
         C3D's health, accident and other benefit plans or programs, as
         implemented. Employee agrees and understands that the benefits may be
         changed, altered, amended, discontinued, decreased, or increased at the
         sole discretion of the Board of Directors. Such benefit plans and
         programs may be structured as (i) a C3D-sponsored benefit plan; (ii) a
         grant by C3D of an allowance for Employee to obtain such benefits; or
         (iii) such other structure as C3D may implement at its discretion.
         Until such time as C3D implements an employee benefit plan, Employee
         shall be entitled to reimbursement of COBRA and other premium payments
         for his (and his family's) continuing health, dental, disability,
         employee life and dependent life insurance coverage at benefit levels
         comparable to the benefits provided by Employee's previous employer,
         including for disability, employee life and dependent life insurance
         coverage. With respect to this Article 3.3, C3D shall not be required
         to reimburse Employee for any amounts exceeding $ 1800 per month.

3.4      Vacations. Employee shall be entitled to twenty (20) days of vacation
         per year, during which time the Employee's compensation shall continue
         to be paid in full. The scheduling

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         of vacation time shall be subject to the prior reasonable approval of
         the CEO. The CEO may from time to time approve leaves of absence, with
         full or partial payment of salary and other expenses, for other reasons
         in its sole discretion.

3.5      Sick Leave. Employee shall be entitled to 5 (five) days of sick leave
         per year, during which time compensation and other benefits shall
         continue to be paid in full.

3.6      Reimbursement for Expenses. Employee shall be expected to incur various
         business expenses customarily incurred by persons holding like
         position, including but not limited to traveling, office equipment,
         entertainment and similar expenses, all of which are to be incurred by
         Employee for the benefit of C3D. Subject to C3D's reasonable policy
         regarding the reimbursement and non-reimbursement of such expenses, C3D
         shall promptly within 30 days of a properly submitted request,
         reimburse Employee for such expenses from time to time, at Employee's
         request, and Employee shall account to C3D for such expenses.

                                    ARTICLE 4

                                   TERMINATION

4.1      Unless Employee's employment is terminated pursuant to this Article, or
         pursuant to Article 2 above, C3D shall continue to employ Employee and
         Employee shall continue to serve C3D throughout the term of this
         Agreement.

4.2      This Agreement shall terminate automatically upon Employee's death. In
         the event this Agreement terminates by reason of Employee's death: (a)
         the options granted pursuant to the Primary Grant (option for 100,000
         shares) shall immediately vest and be exercisable as of the date of
         Employee's termination, and (b) to the extent Employee has achieved
         part or all of the goals set forth in Exhibit A hereto, the options
         granted pursuant Secondary Grant shall, on a pro rata basis, vest and
         immediately be exercisable. A determination as to the extent that
         Employee has achieved part or all of the goals set forth in Exhibit A
         hereto, if at all, shall be made solely by and in the reasonable and
         good-faith discretion of C3D's Board of Directors.

4.3      Upon Employee's "Disability", the payment of benefits under C3D's
         short-term and long-term disability insurance programs, if any, shall
         represent payments in lieu of salary and shall satisfy in full C3D's
         obligations for the payment of salary under the foregoing. If C3D has
         no short term and long term disability insurance program, then
         Employee's salary provided herein shall continue to be paid throughout
         Employee's Disability until such time as Employee's employment with C3D
         is terminated. For purposes of this Agreement, Employee shall be deemed
         to be under a Disability if Employee shall be unable, by virtue of
         illness or physical or mental incapacity or disability (from any cause
         or causes whatsoever), to perform Employee's essential job functions
         hereunder, whether with or without reasonable accommodation, in
         substantially the manner and to the extent reasonably required
         hereunder prior to the commencement of such disability, for a period
         exceeding Ninety (90) consecutive days. In light of the unique nature
         of Employee's services, and the undue burden on C3D that would result
         from Employee's long term absence, C3D shall have the right to
         terminate Employee's employment hereunder in the event Employee shall
         remain under a Disability for a period exceeding One Hundred

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         Eighty (180) consecutive days, such termination to occur at the end of
         any calendar month during the continuance of such Disability, upon at
         least Thirty (30) days prior written notice to Employee. In the event
         this Agreement is terminated by reason of Employee's Disability: (a)
         the options granted pursuant to the Primary Grant (option for 100,000
         shares) shall immediately vest and be exercisable as of the date of
         Employee's termination; and (b) to the extent Employee has achieved
         part or all of the goals set forth in Exhibit A hereto, the options
         granted pursuant Secondary Grant shall, on a pro rata basis, vest and
         immediately be exercisable. A determination as to the extent that
         Employee has achieved part or all of the goals set forth in Exhibit A
         hereto, if at all, shall be made solely by and in the reasonable and
         good-faith discretion of C3D's Board of Directors.

4.4      Termination by C3D for Good Cause. Subject to the provisions of this
         Article, this Agreement may be terminated by C3D for "Good Cause" upon
         30-days prior written notice to Employee, during which time Employee
         shall be given the opportunity to cure. It shall be "Good Cause" for
         termination if Employee after expiration of such cure period: (i)
         materially or significantly defaults in performance of, or other
         material or significant breach by Employee of, Employee's obligations
         hereunder; or (ii) repeatedly fails to perform diligently Employee's
         material duties hereunder, other than by reason of illness or
         Disability; or (iii) commits an act of misconduct, dishonesty,
         insubordination, or other such intentional and bad faith act
         detrimental to C3D or its good will or damaging to its relationships
         with its customers, suppliers, or employees, including, without
         limitation, (A) the inappropriate and excessive use of alcohol or
         illegal drugs such as to materially interfere with the performance of
         Employee's obligations hereunder, (B) conviction of or plea of guilty
         or no contest to a felony or any crime involving moral turpitude,
         dishonesty, or theft, and (C) material failure by Employee to comply
         with applicable material laws or governmental regulations with respect
         to C3D operations or the performance of Employee's duties, of which
         matter or matters Employee knew or should have known. C3D shall provide
         notice of its intention to terminate employment for Good Cause. In the
         event of termination pursuant to this Article 4.4, C3D shall pay
         Employee, within fifteen (15) days of such termination, the monetary
         compensation earned to the date of such termination.

4.5      Termination by Employee. Employee may terminate employment under this
         Agreement for Good Reason. For purposes of this Agreement, Good Reason
         shall include (i) C3D's failure to pay salary and/or compensation
         and/or benefits as provided in this Agreement, or (ii) the repeated
         failure by C3D to timely reimburse Employee for expenses properly
         incurred on C3D's behalf, or (iii) a material change or diminution in
         Employee's position and/or duties or responsibilities contrary to the
         terms of this Agreement, or (iv) fails to timely issue stock upon
         exercise of Employee's options. Before terminating employment for Good
         Reason, Employee shall provide C3D not less than Ten (10) business
         days' advance written notice of intention do so and as to the nature of
         the Good Reason, and opportunity to cure such Good Reason. In the event
         Employee resigns for Good Reason, the Options granted pursuant to the
         Primary Grant and Additional Grant shall continue to vest and be
         exercisable, however the Options granted pursuant to the Secondary
         Grant shall only vest on a pro rata basis to the extent Employee has
         achieved part or all of the goals set forth in Exhibit A to this
         Agreement, all other options under the Secondary Grant shall be
         forfeited and shall not vest and/or be exercisable under any
         circumstance. A determination as to the extent that Employee has
         achieved part or all of the goals set forth

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         in Exhibit A hereto, if at all, shall be made solely by and in the
         reasonable and good-faith discretion of C3D's Board of Directors. In
         the event Employee resigns for any reason other than Good Reason, such
         resignation shall be deemed a "Good Cause" basis for terminating
         Employee's employment pursuant to Article 4.4 herein.







                                    ARTICLE 5

                              INTELLECTUAL PROPERTY

5.1      Inventions. As used in this Agreement, the term "Inventions" means any
         and all useful art, discovery, improvement, technical development, or
         invention whether or not patentable, and all related know-how, designs,
         maskworks, trademarks, formulae, processes, manufacturing techniques,
         trade secrets, ideas, artwork, software or other copyrightable or
         patentable works. However, the term "Invention" shall not be deemed to
         include art, discovery, improvement, technical development, or
         invention whether or not patentable, and all related know-how, designs,
         maskworks, trademarks, formulae, processes, manufacturing techniques,
         trade secrets, ideas, artwork, software or other copyrightable or
         patentable works which is: (a) unrelated at the time of conception or
         reduction to practice of the invention to C3D's business or actual or
         demonstrably anticipated research or development, and (b) which was not
         developed on any amount of C3D's time or with the use of any of C3D's
         equipment, supplies, facilities or trade secret information, and (c)
         which did not result from any work Employee performed for C3D.

5.2      Ownership of C3D's Inventions and License of Prior Inventions. Employee
         agrees promptly to disclose and describe to C3D, and hereby assigns and
         agrees to assign to C3D or its designee, his entire right, title, and
         interest in and to all Inventions and any associated intellectual
         property rights which he may solely or jointly conceive, develop or
         reduce to practice during the period of his employment with C3D (a)
         which relate at the time of conception or reduction to practice of the
         invention to C3D's business or actual or demonstrably anticipated
         research or development, or (b) which were developed on any amount of
         C3D's time or with the use of any of C3D's equipment, supplies,
         facilities or trade secret information, or (c) which resulted from any
         work Employee performed for C3D ("C3D's Inventions"). Employee agrees
         to grant C3D or its designees a royalty free, irrevocable, perpetual,
         worldwide license (with rights to sublicense through multiple tiers of
         distribution) to practice all applicable patent, copyright and other
         intellectual rights relating to any Inventions which Employee
         incorporates, or permits to be incorporated, in any C3D's Inventions.
         Notwithstanding the foregoing, Employee agrees that he will not
         incorporate, or permit to be incorporated, Inventions in any C3D's
         Inventions without C3D's prior written consent.

5.3      Future Inventions. Employee recognizes that C3D's Inventions or
         Proprietary Information (as defined in Article 5.7 below) relating to
         Employee's activities while working for C3D

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         and conceived or made by Employee, alone or with others, within one (1)
         year after termination of his employment may have been conceived in
         significant part while employed by C3D. Accordingly, Employee agrees
         that such Inventions and Proprietary Information will be presumed to
         have been conceived during his employment with C3D and are to be
         assigned to C3D unless and until Employee has established the contrary.

5.4      Non-assignable Inventions. This Agreement does not apply to an
         Invention which qualifies fully as a non-assignable Invention under the
         provisions of the respective Labor Code. Employee has reviewed the
         notification in Exhibit B ("Limited Exclusion Notification") and agrees
         that his signature acknowledges receipt of the notification. However,
         Employee agrees to disclose promptly in writing to C3D all Inventions
         made or conceived by him during the term of his employment and for one
         (1) year thereafter, whether or not Employee believes such Inventions
         are subject to this Agreement, to permit a determination by C3D as to
         whether or not the Inventions should be the property of C3D. Any such
         information will be received in confidence by C3D.

5.5      Cooperation in Perfecting Rights to Inventions.

         (a)      At C3D's sole cost and expense, Employee agrees to perform,
                  during and for a reasonable time after his employment, all
                  acts reasonably deemed necessary or desirable by C3D to permit
                  and assist it, at its expense, in obtaining and enforcing the
                  full benefits, enjoyment, rights and title throughout the
                  world in the Inventions hereby assigned to C3D. Such acts may
                  include, but are not limited to, execution of documents and
                  reasonable assistance or cooperation in the registration and
                  enforcement by C3D of applicable patents, copyrights,
                  maskworks or other legal proceedings.

         (b)      In the event that C3D, after 15 days written notice is unable
                  for any reason to secure Employee's signature to any document
                  required to apply for or execute any patent, copyright,
                  maskwork or other applications with respect to any Inventions
                  (including improvements, renewals, extensions, continuations,
                  divisions or continuations in part thereof), Employee hereby
                  irrevocably designates and appoints C3D and its duly
                  authorized officers and agents as his agents and
                  attorneys-in-fact to act for and on Employee's behalf and
                  instead of him, to execute and file any such application and
                  to do all other lawfully permitted acts to further the
                  prosecution and issuance of patents, copyrights, maskworks or
                  other rights thereon with the same legal force and effect as
                  if executed by the Employee. Notwithstanding the foregoing,
                  C3D agrees to indemnify and hold Employee and his successors
                  and assigns, harmless from and against all actions, claims,
                  losses, costs, obligations and damages asserted against or
                  incurred by Employee in connection with or relating to any
                  Inventions and/or any such actions taken by C3D on behalf of
                  Employee, including without limitation any alleged
                  infringement by C3D of the intellectual property rights of
                  others.

5.6 Proprietary Information. Employee's employment creates a relationship of
confidence and trust between C3D and Employee with respect to any non-public
information: Applicable to the business of C3D; or applicable to the business of
any client or customer of C3D, or learned by Employee in such context during the
period of his employment.

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         All of such information has commercial value in the business in which
         C3D is engaged and is hereinafter called "Proprietary Information." By
         way of illustration, but not limitation, Proprietary Information
         includes any and all technical and non-technical information including
         patent, copyright, trade secret, and proprietary information,
         techniques, sketches, drawings, models, inventions, know-how,
         processes, apparatus, equipment, algorithms, software programs,
         software source documents, and formulae related to the current, future
         and proposed products and services of C3D, and includes, without
         limitation, its respective information concerning research,
         experimental work, development, design details and specifications,
         engineering and financial information, procurement requirements,
         purchasing, manufacturing, customer lists, business forecasts, sales
         and merchandising and marketing plans and information. "Proprietary
         Information" also includes proprietary or confidential information of
         any third party who may disclose such information to C3D or Employee in
         the course of C3D's business during the term of this Agreement.

5.7      Nondisclosure of Proprietary Information. At all times, both during
         Employee's employment by C3D and after its termination, Employee agrees
         to keep in confidence and trust all Proprietary Information, and
         Employee agrees that he will not use or disclose any Proprietary
         Information or anything directly relating to it without the written
         consent of C3D, except as may be necessary in the ordinary course of
         performing the Employee's duties as set forth in this Agreement.
         Notwithstanding the foregoing, it is understood that, at all such
         times, Employee is free to use information which is or becomes
         generally known in the trade or industry not as a result of a breach of
         this Agreement and Employee's own skill, knowledge, know-how and
         experience to whatever extent and in whatever way Employee wishes.

5.8      No Violation of Rights of Third Parties. Employee's performance of all
         the terms of this Agreement and as an employee of C3D does not and will
         not breach any agreement to keep in confidence proprietary information,
         knowledge or data acquired by Employee prior to his employment with
         C3D, and Employee agrees that he will not disclose to C3D, or induce
         C3D to use, any confidential or proprietary information or material
         belonging to any previous employer or others. Employee asserts that he
         is not a party to any other agreement that will interfere with his full
         compliance with this Agreement.

5.9      Return of Materials. Upon termination of Employee's employment or at
         the request of C3D before termination, Employee will deliver to C3D all
         written and tangible material in his possession incorporating the
         Proprietary Information or otherwise relating to C3D's business.

5.10     Notification To Third Parties. In the event that Employee leaves the
         employ of C3D, Employee hereby consents to the notification by C3D to
         his new employer or principal of Employee's rights and obligations
         under this Agreement if C3D reasonably and in good faith believes that
         Employee is in default of the provisions of Article 5 of this
         Agreement.

5.11     Injunctive Relief. A breach of any of the promises or agreements
         contained herein will result in irreparable and continuing damage to
         C3D for which there will be no adequate remedy at law, and C3D shall be
         entitled to injunctive relief and/or a decree for specific performance,
         and such other relief as may be proper (including all monetary,
         consequential and compensatory damages, provided however, that C3D
         shall not be entitled to recover punitive and/or speculative damages
         from Employee).

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<PAGE>

5.12     Survival. This Article of the Agreement ("Article 5") (a) shall survive
         Employee's employment by C3D for the period specified above, (b) does
         not in any way restrict Employee's right or the right of C3D to
         terminate his employment at any time, for any reason or for no reason,
         subject to the terms of this Agreement, (c) inures to the benefit of
         successors and assigns of C3D, and (d) is binding upon Employee's heirs
         and legal representatives.

5.13     Indemnification. To the maximum extent permitted by law, applicable
         statutes and the Articles of Incorporation, By-laws and resolutions of
         C3D and its Affiliates in effect from time to time, C3D and its
         Affiliates shall indemnify Employee against all claims, actions,
         obligations, costs, liability and loss arising out of or in connection
         with Employee's actual or attempted performance or misfeasance or
         nonfeasance in the performance of Employee's actions, obligations and
         duties on behalf of C3D and its Affiliates, and all actions taken by
         C3D and its officers and agents pursuant to Article 5.5 hereof,
         including, but not limited to, judgments, fines, settlements, and
         expenses incurred in the defense of action, proceedings, and appeals
         therefrom. The Provisions of this paragraph shall apply to and inure to
         the benefit of Employee and the estate, executor, administrator, heirs,
         legatees, or devisees of Employee, shall survive the termination of
         this Agreement and Employee's employment for any reason, and shall be
         binding on C3D, Affiliates and C3D's successors and assigns.

                                    ARTICLE 6

                      NON-COMPETITION AND NON-SOLICIATATION

6.1      No Solicitation. As a condition of employment with C3D, and as a
         further material inducement to C3D to employ Employee hereunder,
         Employee agrees that unless approved in writing by C3D's Board of
         Directors, during the period that Employee is employed by C3D, and for
         a period of six months following the Employee's termination, Employee
         shall not, directly or indirectly solicit, hire, or induce the
         termination from employment or engagement with C3D of any person who
         was employed or engaged by C3D (including without limitation
         consultants and independent contractors) or any Affiliate or induce
         such person to accept employment other than with C3D or any Affiliate.

6.2      No Competition. As a condition of employment with C3D, and as a
         material inducement to C3D to employ Employee hereunder, Employee
         agrees that, while Employee is employed by C3D, and during the six
         month period following Employee's termination, so long as Employee
         receives his severance and other payments, Employee shall not, directly
         or indirectly, whether or not for compensation, and whether or not as
         an employee, be engaged in or have a 5% or greater financial interest
         in any other business which competes with any business conducted by C3D
         and its Affiliates in any area where such business is being conducted
         by C3D and its Affiliates as of the date of Employee's termination.
         Notwithstanding the foregoing, Employee shall not be prevented from
         returning to the employment of Texas Instruments as a regular employee
         and/or independent contractor, subject to the provisions of Article 5
         herein, which shall survive termination of this Agreement.

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<PAGE>

6.3      Survival. This provision of the Agreement ("Article 6") (a) shall
         survive Employee's employment by C3D for the period referenced above,
         (b) does not in any way restrict Employee's right or the right of C3D
         to terminate his employment at any time, for any reason or for no
         reason, subject to the terms of this Agreement, (c) inures to the
         benefit of successors and assigns of C3D, and (d) is binding upon
         Employee's heirs and legal representatives.

6.4      Injunctive Relief. A breach of any of the promises or agreements
         contained in this Article 6 will result in irreparable and continuing
         damage to C3D for which there will be no adequate remedy at law, and
         C3D shall be entitled to injunctive relief and/or a decree for specific
         performance, and such other relief as may be proper (including all
         monetary, consequential and compensatory damages, provided however,
         that C3D shall not be entitled to recover punitive and/or speculative
         damages from Employee).

                                    ARTICLE 7

                                  MISCELLANEOUS

7.1      Modification; Amendment; Waiver. No modification, amendment or waiver
         of any provisions of this Agreement shall be effective unless approved
         in writing by both parties. The failure at any time to enforce any of
         the provisions of this Agreement shall in no way be construed as a
         waiver of such provisions and shall not affect the right of either
         party thereafter to enforce each and every provision hereof in
         accordance with its terms.

7.2      Severability. Whenever possible, each provision of this Agreement shall
         be interpreted in such manner as to be effective and valid under
         applicable law, but if any provision of this Agreement shall be held to
         be prohibited by or invalid under applicable law, such provision shall
         be ineffective only to the extent of such prohibition or invalidity,
         without invalidating the remainder of such provision or the remaining
         provisions of this Agreement. For purposes of interpreting this
         Agreement, neither party shall be deemed the author of the Agreement.

7.3      Survival. Employee's obligations as set forth in Articles 5 and 6,
         above, represent independent covenants for which Employee is receiving
         additional consideration in the form of severance payments (as set
         forth herein) and by which Employee shall remain bound, notwithstanding
         any breach or claim of breach by C3D and/or Employee, and shall survive
         the termination or expiration of this Agreement, except as otherwise
         provided in Article 6.

7.4      Assignment. The rights and obligations of the parties under this
         Agreement shall be binding upon and inure to the benefit of their
         respective successors, assigns, executors, administrators and heirs,
         provided, however, that neither C3D nor Employee nor their respective
         successors, assigns, executors, administrators and heirs may assign,
         transfer, pledge, or hypothecate this Agreement or any rights, duties
         or obligations thereunder without the prior written consent of the
         other.

7.5      Notices. All notices and other communications hereunder shall be in
         writing and shall be deemed to have been duly given if delivered
         personally, mailed by certified mail (return receipt requested) or sent
         by reputable overnight delivery service, cable, telegram, facsimile

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<PAGE>

         transmission or telex to the parties at the following addresses or at
         such other addresses as shall be specified by the parties by like
         notice:

                  If to C3D:                       230 Park Avenue Suite 453
                                                   New York, NY 10169
                                                   Attention: General Counsel

                  With a Copy to:                  Michael Goldberg
                                                   2625 NE 11th Court
                                                   Fort Lauderdale, FL 33304

                  If to the Employee:              Steve Haddad
                                                   2511 Sunny Meadow
                                                   McKinney, Texas 75070


                  Copy to attorney:                Glen A. Bellinger
                                                   Bellinger & DeWolf, L.L.P.
                                                   750 North St. Paul, Suite 900
                                                   Dallas, Texas 75201


7.6      Complete Agreement. This Agreement constitutes the entire agreement
         between the parties, and cancels and supersedes all other agreements
         between the parties that may have related to the subject matter
         contained in this Agreement.

7.7      Articles and Headings. The articles and headings throughout this
         Agreement are for convenience of reference and shall in no way be held
         or deemed to be a part of or affect the interpretation of this
         Agreement.

7.8      Governing Law. This Agreement and performance under it, and all
         proceedings that may ensue from its breach, shall be construed in
         accordance with and under the laws of the State of New York and in New
         York. The Parties consent and agree to the exclusive jurisdiction of
         the Federal and State courts located in New York, New York.

7.9      Execution. This Agreement may be executed in counterparts, each of
         which shall be deemed an original, but all of which together shall
         constitute one and the same instrument.

7.10     Attorney's Fees. If any action at law or in equity is necessary to
         enforce or interpret the terms of this Agreement, the prevailing party
         shall be entitled to reasonable attorney's fees and costs, in addition
         to any other relief to which he may be entitled.

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<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the day and year indicated above.



         CONSTELLATION 3D, INC.             EMPLOYEE:

         /s/ Eugene Levich                  /s/ Steve Haddad
         -----------------                  ----------------
         Eugene Levich                      Steve Haddad
         President & CEO

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