Document:

Unassociated Document

    
          Exhibit 10.15

     

    
       

      Operating
Agreement

      

      This
Operating Agreement (this “Agreement’) is made effective as of September 7, 2001 by and
between Cashman Enterprises, Inc., a Nevada corporation (“Cashman”), and Crystal Magic,
Inc. a Florida corporation (“Crystal Magic”),

      

      RECITALS

      

      
        	
                A.

              	
                Crystal
      Magic has developed technology, software, equipment, know how,
      intellectual property and systems to create “Laser Damage Products” in
      transparent media (The “Crystal Magic
  Technology”).

              

      

      

      
        	
                B.

              	
                Crystal
      Magic distributes Laser Damage Products world wide through retail outlets
      it owns, distributors who resell Crystal Magic’s products, authorized
      dealers and the internet.

              

      

      

      
        	
                C.

              	
                Crystal
      Magic desires to obtain the help and cooperation of Cashman to introduce
      and sell its Laser Damage Products in the state of
  Nevada.

              

      

      

      
        	
                D.

              	
                Cashman
      and its Affiliates own and operate retail stores in the state of Nevada
      that sell photographic products and services including but not limited to
      custom images of customers on various media (“Video
    Stores”),

              

      

      

      
        	
                E.

              	
                Cashman
      and its Affiliates own and operate “Wedding Chapel photographic services
      and concessions at major hotel and casino properties in the state of
      Nevada (“Wedding Chapels”),

              

      

      

      
        	
                F.

              	
                Cashman
      and its Affiliates have long standing relationships and current operating
      agreements with major hotel, casino and entertainment complex properties
      in the state of Nevada.

              

      

      

      
        	
                G.

              	
                Cashman
      desires to sell Laser Damage
Products.

              

      

      

      
        	
                H.

              	
                Crystal
      Magic desires Cashman to sell Laser Damage Products in the state of
      Nevada.

              

      

      

      
        	
                I.

              	
                Cashman
      represents that Cashman and it Affiliates have not less than two years of
      prior management experience in this and similar businesses and the parties
      in good faith anticipate sales arising from this Agreement will constitute
      no more than 20% of Cashman’s and its Affiliates’ projected gross sales
      revenues for at least one year after Cashman begins to sell the Laser
      Damage Products.

              

      

      

      Therefore,
in consideration of their mutual covenants contained herein, the parties agree
as follows;

      

      DEFINITIONS

      

      
        	
                1.

              	
                NET
      SALES shall mean the total sales revenue, exclusive of sales tax, produced
      by the sale, lease or other disposition of Laser Damage Products by
      Cashman and/or its affiliates, reduced by any units of Laser Damage
      Products returned to and accepted by Cashman and/or its Affiliates for
      which the purchase price has been refunded. For sales of Laser Damage
      Products to an Affiliate, the higher of the Affiliate’s purchase or sale
      price for each item will be included in Net Sales; provided however that
      the Net Sales to such Affiliate shall not be recognized for royalty
      calculations until sold by the Affilate to a third party and shall then be
      recognized as a sale at the higher of the Affiliated or third party’s
      purchase or sale price. For purposes of calculating Net Sales, the revenue
      attributed to any Laser Damage Products sold in promotional combinations
      with other products sold by Cashman shall be the retail price established
      on the Crystal Magic website or as otherwise agreed between the
      parties.

              

      

      

       

       

       

      
        	
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      Operating
Agreement

      

      
        	
                2.

              	
                AFFILIATE shall mean,
      with respect to any Person: (i) any Person directly or indirectly
      controlling, controlled by, or under common control of such Person, (ii)
      any Person owning or controlling 10% or more of the outstanding voting
      interests of such Person, (iii) any officer, director, or general partner
      of such Person, or (iv) any officer, director, general partner, trustee or
      holder of 10% or more of the voting interests of any Person described in
      clauses (i) through (iii) of this sentence. For purposes of this
      definition: (a) Person means any individual or business entity, and the
      heirs, executors, administrators, legal representatives, successors, and
      assigns of such “Person” and (b) “controls”, “is controlled by”, or “is
      under common control with” shall mean the possession, direct or indirect,
      of the power to direct or cause the direction of the management and
      policies of a Person, whether through the ownership of voting securities,
      by contract or otherwise.

              

      

      

      
        	
                3.

              	
                LASER DAMAGE PRODUCT
      shall mean any object that contains internal decorative or indicative
      images that have been created by a
Laser.

              

      

      

      
        	
                4.

              	
                LASER DAMAGE SYSTEMS
      shall mean any laser marking device whose construction or method produces
      a “Laser Damage Product”.

              

      

      

      
        	
                5.

              	
                KNOW-HOW
      means any and all information of any kind whatsoever now possessed by or
      known to, or hereafter developed or acquired by, relating to (1) the
      manufacturing data, and technical specifications for the Crystal Magic
      Technology, and/or marketing information of potential competitive value
      (e.g. customer information, promotional plans, market data, etc.) (2)
      specific techniques, software, algorithms and methods used in connection
      with the production of the Laser Damage Products utilizing the Crystal
      Magic Technology (3) the techniques and methods for installing and
      servicing the equipment necessary in connection with the production of the
      Laser Damage Products utilizing the Crystal Magic Technology, and (4) any
      techniques and methods for creating the internal images in the Laser
      Damage Products.

              

      

      

      
        	
                6.

              	
                IMPROVEMENTS shall mean
      any technical information or know-how developed by Crystal Magic or
      Cashman (or either of such parties’ Affiliates) after the date of the
      initial transfer of the Know-How and during the term of this Agreement
      that uses or relates to the
Know-How.

              

      

      

      
        	
                7.

              	
                OPERATING PRE TAX PROFIT
      for the purposes of this Agreement shall be calculated by deduction from
      Net Sales, the following direct operating costs; product, freight,
      insurance manufacturing payroll, sales commissions, location percentage
      rent, supplies, equipment repairs, maintenance, equipment depreciation,
      interest, communications costs, training expenses
      (including travel and hotel), artwork, promotional materials, F&F
      Depreciation (e.g. Display F&F specific to Laser Damage Products) and
      any other normal and ordinary business expense directly related to the
      promotion and/or sale of Laser Damage Products. and license fees
      (which shall include any royalties or other fees required to be paid to
      any third party, if any, including, but not limited to fees for licensing
      of logos, trademarks, characters, and Know-How or any Improvements
      thereof). For the purposes of determining Operating Pre Tax Profits, the
      following indirect costs shall not be deducted from Net Sales: allocations
      of corporate overhead, depreciation of existing equipment and leasehold
      improvements, existing payroll expenses and operating costs currently in
      place for its retail stores and wedding chapel product offerings. In the
      event of an indirect, unanticipated or existing expense that arises or
      increases as a direct result of Cashman ‘s compliance or Implementation of
      this Agreement, such expense shall be reasonably documented and a
      reasonable pro-rata portion of such expense shall be “charged” as an
      additional deduction from the “Net Sales” as agreed to by Crystal Magic
      and Cashman.

              

      

      

      

      

       

      
        	
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      Operating
Agreement

      

      TERM

      

      
        	
                8.

              	
                This
      Agreement shall commence on the effective date set forth above and shall
      continue for a period of twenty (20) years unless sooner terminated as
      provided herein.

              

      

      

      LICENSE
GRANT, EXCLUSIVE TERRITORY AND EQUIPMENT PURCHASE

      

      
        	
                9.

              	
                LICENSE
      USE OF KNOW-HOW, TRADEMARKS AND OTHER PROPRIETARY
  RIGHTS

              

      

      

      
        	
                9.1.

              	
                Know-How License.
      Subject to Cashman’s compliance with all material terms of this Agreement,
      Crystal Magic grants to Cashman an exclusive license, without the right to
      sublicense to manufacture and sell Laser Damage Products within the State
      of Nevada only (the “Territory”), using Know-How that Crystal Magic now
      has or may subsequently acquire during the term of this Agreement. Except
      as stated herein or by other written agreement, no further license is
      implied or given. So long as this Agreement is in effect. Crystal Magic
      will not manufacture or sell Laser Damage Products in the Territory and
      will not enter into any agreement with nor sell, lease, rent or give its
      materials, products. or Know How to any other company, person or entity
      for the purpose of selling, either directly or indirectly, any Laser
      Damage Product in the Territory. Notwithstanding anything herein to the
      contrary. Crystal Magic shall not be prohibited from selling Laser Damage
      Products within the Territory through sales generated by Crystal Magic
      through web sites sales, internet sales, and the remarketing to Cashman’s
      database of Customers who purchase Laser Damage
  Products.

              

      

      

      
        	
                9.2.

              	
                Transfer of Know-How.
      Crystal Magic shall provide Cashman with the Know How necessary to produce
      the Laser Damage Products pursuant to this Agreement and provide initial
      training to Cashman in the techniques and methods used in production of
      the Laser Damage Products utilizing the Know How on the equipment
      purchased from Crystal Magic pursuant to this Agreement. Crystal Magic
      will update the Know How from time to time throughout the term of this
      Agreement. Crystal Magic shall provide troubleshooting services and
      general technical assistance, from time to time as agreed between the
      parties, as well as routine checkups to verify the correctness of
      Cashman’s procedures. All such services and assistance shall be provided
      at the rates set forth in Exhibit A, as may be modified from time to time
      by Crystal Magic.

              

      

      

      

      

       

      
        	
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      Operating
Agreement

      

      
        	
                9.3.

              	
                Trademark License.
      Crystal Magic grants to Cashman a nonexclusive license, without the right
      to sublicense, to use the trademark “CRYSTAL MAGIC” and related marks
      developed by Crystal Magic from time to time in connection with Laser
      Damage Products during the term of this Agreement (the “Trademarks”) in
      the State of Nevada only, in the manner and form and subject to the
      quality control requirements herein defined, during the term of this
      Agreement, on Laser Damage Products produced utilizing the Crystal Magic
      Technology under the Know-How license granted pursuant to this Agreement.
      Crystal Magic shall supply Cashman with sample graphics for the use of the
      Trademark in printed material.

              

      

      

      
        	
                9.4.

              	
                Product Name and
      Quality: Cashman will use only approved Crystal Magic packaging and
      all packaging will identify the product as a Crystal Magic product and
      utilize the Trademarks, as agreed to herein. Crystal Magic will set
      quality control standards for Laser Damage Products, which from time to
      time it may modify and Cashman will implement such standards. Cashman will
      display the Trademarks at all of Cashman’s Wedding Chapels and other non
      Video Store locations that sell Laser Damage Products in the manner and
      form required by Crystal Magic from time to time and consistent with the
      latest sample graphics supplied by Crystal Magic and with all applicable
      government requirements. Cashman will display the Trademarks at all of
      Cashman’s Video Stores after one year from the signing of this agreement
      unless otherwise agreed to in writing by Crystal Magic and Cashman.
      Cashman shall submit to Crystal Magic for its prior written approval
      samples of all proposed material, copy and oral scripts, including
      promotional, advertising, labeling and packaging material promoting Laser
      Damage Products or displaying the
Trademarks

              

      

      

      
        	
                9.5.

              	
                Prohibited Activities.
      Cashman shall not at any time adopt, or use, or attempt to register with
      any governmental authority, without first obtaining Crystal Magic’s
      written approval, any word or mark that is similar, or bears any
      resemblance, to any Trademark or service mark owned or used by Crystal
      Magic.

              

      

      

      
        	
                9.6.

              	
                Improvements to Know-How and
      Third Party Licensing Arrangements. From time to time, Crystal
      Magic may enter into third party licensing arrangements (with third
      parties that are not Affiliates of Crystal Magic) related to the Know-How,
      Patents, or Improvements thereof, or in connection with licensing of
      additional brands, trademarks, logos, characters or other similar
      promotional ventures (“Third Party Agreements”). Cashman hereby
      acknowledges and agrees that any licensing fees or royalties for the use
      of any rights under any such Third Party Agreements related to Laser
      Damage Products manufactured, used, sold, licensed or otherwise disposed
      of by Cashman shall be the responsibility of Cashman (whether paid
      directly to such third party or paid to Crystal Magic for payment to such
      third party) and shall be included by Cashman as a direct operating cost
      deducted from Net Sales in accordance with this
  Agreement.

              

      

      

       

       

       

      
        	
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      Operating
Agreement

      

      
        	
                9.7.

              	
                Ownership and
      Improvements. Crystal Magic shall own all right, title, and
      interest in the Know-How, the Trademarks and all other intellectual
      property rights inherent therein, including all Improvements. Cashman
      shall promptly notify Crystal Magic in writing upon its discovery of any
      unauthorized use of the Know-How or infringement of Crystal Magic’s
      proprietary rights therein and shall further cooperate with Crystal Magic
      to protect its ownership and rights in and to the Know-How and any
      Improvements,

              

      

      

      
        	
                10.

              	
                MINIMUM REQUIREMENTS TO
      MAINTAIN EXCLUSIVITY. Within one hundred twenty days (120) of the
      date of this Agreement, Cashman agrees to make all
      reasonable efforts to obtain landlords permission to display and
      sell Laser Damage Products from all of its Video Stores, including but not
      limited to Video Stores located at the Venetian, New York-New York,
      Aladin, MGM Grand, Forum Shops, Rio Hotel & Casinos. Within one
      hundred twenty days (120) of this Agreement, Cashman agrees to make all
      reasonable efforts to obtain landlords permission to display and
      sell Laser Damage Products from its Wedding Chapels, including but not
      limited to Treasure Island, Flamingo Hilton, Mandalay Bay, MGM Grand, and
      Rio Hotel & Casino’s, Throughout the term of this Agreement, Cashman
      shall continue to display and sell Laser Damage Products at each such
      Video Store and Wedding Chapel so long as Cashman or its Affiliates
      continues to operate such Video Stores and Wedding Chapels (the “Minimum
      Sites”). Within one year from the date of this Agreement Cashman agrees to
      maintain an annual Net Sales of not less than five hundred thousand
      dollars ($500,000) or annual Royalty Payments of not less than twenty five
      thousand dollars ($25,000) and for each subsequent calendar year
      thereafter, Cashman agrees to maintain an annual Net Sales of not less
      than one million dollars ($1,000,000) or annual Royalty Payments of not
      less than fifty thousand dollars ($50,000) (the “Minimum Sales Volume”).
      In the event Cashman fails to meet or maintain the Minimum Sites or
      Minimum Sales Volume set forth herein, Crystal Magic may, on thirty (30)
      days written notice, terminate the exclusive license for the Territory
      granted herein and the license granted to Cashman shall become a
      non-exclusive license for the
Territory.

              

      

      

      
        	
                11.

              	
                CUSTOMER DATABASE,
      Cashman agrees to use Crystal Magic’s order entry system to process all
      Laser Damage Products orders. On a monthly basis, Cashman will provide
      Crystal Magic with a copy of the database generated by the Crystal Magic
      order entry system. Crystal Magic may exclusively remarket sales of Laser
      Damage Products to the Cashman database. Crystal Magic will pay to Cashman
      twenty percent (20%) of the Net Sales generated from remarketing to the
      Cashman database within fifteen days of the end of each month for the
      preceding month.

              

      

      

      
        	
                12.

              	
                EQUIPMENT AND SUPPLIES
      PURCHASE. Cashman agrees to purchase from Crystal Magic at least
      two (2) Crystal Magic Laser Damage System, as more fully described in
      Exhibit A attached hereto (the “Initial System”) for the purchase price of
      $80.000.00 for each Initial System. Such purchase price shall be paid as
      follows: Within seven (7) days of effective date of this agreement,
      Cashman will pay to Crystal Magic one hundred thousand ($100,000) towards
      the purchase price of the initial Crystal Magic Laser Damage Systems,
      Equipment and Supplies, Cashman will pay Crystal Magic the remaining
      invoice amount for all Crystal Magic Laser Damage Systems, equipment and
      supplies upon delivery and installation of the Crystal Magic Laser Damage
      Systems.. Subject to payment of such purchase price. Crystal Magic shall
      deliver and install the Initial Systems on or about August 30, 2001, Durme
      the term of this Agreement, Cashman may but shall not be required to,
      purchase additional Laser Damage Systems, equipment and supplies from
      Crystal Magic, or approved Crystal Magic suppliers, according to the terms
      and conditions as set forth in “EXHIBIT A” attached hereto and made a part
      of this Agreement by reference. Cashman acknowledges that the costs set
      forth in EXHIBIT A are current costs and subject to change by Crystal
      magic from time to time.

              

      

       

       

       

       

      
        	
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      Operating
Agreement

      

      
        	
                13.

              	
                ROYALTY PAYMENTS,
      Crystal Magic and Cashman will “split” the Operating Pre Tax Profits from
      the sale of Laser Damage Products sold by Cashman or its Affiliates on a
      ratio of 33.33% to Crystal Magic and 66-66% to Cashman. Through the first
      full three months of the Agreement, Cashman shall provide a monthly
      statement of Net Sales and shall pay ten percent (10%) of said Net Sales
      it has received from the sale of Laser Damage Products by the fifteenth
      (15th)
      of each month for the immediately previous month to Crystal Magic (the
      “Monthly Payment”). By the end of each quarter and based on GAAP and the
      Operating Pre Tax Profit definitions as set forth in this Agreement.
      Cashman will provide a “Profit and Loss” statement for the Laser Damage
      Products operations for the immediately previous quarter to Crystal Magic.
      If said statement shows that the Royalty payments previously made do not
      reflect the 33.33% / 66.66% split, the monthly payment percentage will be
      adjusted accordingly for future payments (the “Adjusted Percentage”).
      Thereafter, Cashman shall continue to provide a monthly statement of Net
      Sales and shall pay a percentage of Net Sales from the sale of Laser
      Damage Products based on the Adjusted Percentage. All Monthly Payments
      shall be due to Crystal Magic by the fifteenth (15th)
      of the each month for the immediately previous month. Further. Cashman’s
      Laser Damage Products operations will be reviewed, reconciled and analyzed
      on an annual basis concurrent with and as part of Cashman’s fiscal year.
      If an over or under payment situation is found, either Cashman or Crystal
      Magic shall, within thirty days, issue a check for the difference and, the
      percent of Net Sales Royalty Payment shall be adjusted accordingly for all
      future Royalty payments., In no event shall the Royalty payment paid to
      Crystal Magic be less than five percent (5%) of Net
  Sales.

              

      

      

      INSURANCE

      

      
        	
                14.

              	
                Cashman
      and Crystal Magic shall, throughout the term of this Agreement, maintain
      general and product liability insurance of no less than one million
      dollars ($1,000,000.00), Because of the public perception of Laser Beam
      technology, each party shall produce copies of certificates for the
      aforementioned insurance within thirty days of the execution of this
      Agreement and again, within thirty days of each renewal of said insurance.
      Each party agrees that its failure to maintain such insurance will be
      considered a material breach of this
Agreement,

              

      

      

      REPORTS;
INSPECTIONS AND EXAMINATION OF RECORDS-AUDITS

      

      
        	
                15.

              	
                Cashman
      will maintain accurate records of amounts and kinds of Laser Damage
      Products manufactured and sold and will submit monthly reports reflecting
      its operations under this Agreement and all reports to be provided by
      Cashman to Crystal Magic in connection with the Royalty Payments due
      pursuant to this Agreement shall be in such form as Crytal Magic shall
      require from time to time.

              

      

       

       

       

       

      
        	
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      Operating
Agreement

      

      
        	
                16.

              	
                Crystal
      Magic shall have the right at all times to inspect the premises of Cashman
      (including all materials and supplies used by Cashman in its operations
      under this Agreement) and to audit Cashman’s records for the purpose of
      determining compliance with any or all portions of this
      Agreement.

              

      

      

      
        	
                17.

              	
                Because
      Royalty Payments by Cashman to Crystal Magic will be based on Cashman’s
      books and records, Cashman agrees to maintain such books and records for a
      period of four (4) years after the reporting due date and, further, grants
      Crystal Magic the right to formally audit said books and records on an
      annual basis at Cashman’s corporate offices or at such other place as may
      be mutually agreed upon. Crystal Magic may, at its sole cost and expense,
      perform said audits utilizing its own employees or a Certified Public
      Accounting firm licensed to practice within the State of Nevada. If any
      audit shows that Cashman has underpaid Crystal Magic, Cashman shall issue
      a check for the amount underpaid to Crystal Magic within thirty days of
      receiving the result of the audit. If any audit shows that Cashman has
      overpaid Crystal Magic, Crystal Magic shall issue a check for the amount
      overpaid to Cashman within thirty days of receiving the result of the
      audit.

              

      

      

      
        	
                18.

              	
                Because
      Crystal Magic will supply Cashman with equipment as listed in Exhibit A at
      its manufacturing cost and supplies and materials at its “cost”,
      therefore, Crystal Magic agrees to maintain its relevant books and records
      for a period of four (4) years after the date such items were sold to
      Cashman and, further, grants Cashman the right to formally audit said
      books and records on an annual basis at Crystal Magic’s corporate offices
      or at such other place as may be mutually agreed upon. Cashman may, at its
      sole cost and expense, perform said audits utilizing its own employees or
      a Certified Public Accounting firm licensed to practice within the State
      of Florida, If any audit shows that Cashman has underpaid Crystal Magic,
      Cashman shall issue a check for the amount underpaid to Crystal Magic
      within thirty days of receiving the result of the audit. If any audit
      shows that Cashman has overpaid Crystal Magic, Crystal Magic shall issue a
      check for the amount overpaid to Cashman within thirty days of receiving
      the result of the audit.

              

      

      

      LATE
PAYMENTS AND COLLECTION COSTS

      

      
        	
                19.

              	
                Each
      party agrees to pay the other interest at the rate of one percent (1%) per
      month on any past due amounts owed. Such interest shall accrue if any
      payment is more than thirty (30) days overdue and shall continue until the
      balance is paid in full.

              

      

      

      
        	
                20.

              	
                In
      the event either party retains an attorney to collect an overdue amount,
      the attorney’s fees and reasonable collection costs will be added to the
      amount owed and paid by the offending
party.

              

      

      

      
        	
                      
                  WARRANTY
      AND INDEMNIFICATION

                

              	
                 

              

      

      

      
        	
                21.

              	
                WARRANTIES. Crystal
      Magic represents and warrants that (i) it has the right to grant the
      license for the Know-How and Crystal Magic Technology pursuant to this
      Agreement and is the owner of the rights, title and interest in the
      Know-How and Crystal Magic Technology; and (ii) it has not granted any
      license for the Know-How and Crystal Magic Technology in the Territory
      except to Cashman pursuant to this Agreement and is under no obligation to
      grant any such license.

              

      

       

       

       

       

      
        	
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      Operating
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                22.

              	
                WARRANTY DISCLAIMER.
      Nothing in this Agreement is or shall be construed
  as;

              

      

      

      (i) A
warranty or representation by Crystal Magic as to the validity or scope of any
patents licensed as part of the Know-How transferred pursuant to this
Agreement;

      

      (ii) A
warranty or representation that anything made, used, sold or otherwise disposed
of under any license granted in this Agreement is or will be free from
infringement of patents, copyrights and other rights of third
parties;

      

      (iii)           An
obligation to bring or prosecute actions or suits against third parties for
infringement of any license granted pursuant to this Agreement, or

      

      (iv)           Granting
by implication, estoppel, or otherwise any licenses under patents of Crystal
Magic or other persons other than the license in the Know-How granted pursuant
to this Agreement.

      

      23.           NO
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR USE

      

      EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT, CRYSTAL MAGIC MAKES NO REPRESENTATION AND
EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, OR ANY WARRANTIES
OF MERCHANTABILITY OR FITNESS FORA PARTICULAR PURPOSE.

      

      24.
LIMITATION OF LIABILITY

      

      NOTWITHSTANDING
ANYTHING TO THE CONTRARY, CRYSTAL MAGIC SHALL NOT BE LIABLE WITH RESPECT TO ANY
SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT
LIABILITYOR OTHER LEGAL OR EQUITABLE THEORY FOR (i) ANY SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES; OR (ii) COST OF PROCUREMENT OF SUBSTITUTE GOODS.
TECHNOLOGY OR SERVICES. THIS LIMITATION WILL APPLY NOTWITHSTANDING ANY FAILURE
OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY PROVIDED HEREIN.

      

      25. INDEMNITY

      

      
        	
                25.1.

              	
                Crystal
      Magic shall indemnify, hold harmless and defend Cashman (and its
      directors, officers, employees, and agents) from and against any and all
      claims, demands, or actions and any losses, expenses, and damages
      resulting directly therefrom: (i) based on a claim against Cashman that
      the Know-How and Crystal Magic Technology infringe or abridge a
      third-party right in the United States in a validly issued patent,
      copyright, or trade secret and (ii) based on an error in the
      representations made pursuant to paragraph 21. Any such indemnification by
      Crystal Magic pursuant to section (i) above shall be contingent upon
      Cashman giving Crystal Magic prompt written notice of the claim for which
      indemnification is sought, Cashman allowing Crystal Magic to control the
      defense and/or settlement of such claim, and Cashman cooperating with
      Crystal Magic in such defense and/or settlement and provided, that, in the
      event any such settlement by Crystal Magic includes an agreement to pay an
      ongoing license fee to such third party, Cashman agrees that such ongoing
      license fee related to Laser Damage Products manufactured, used, sold or
      otherwise disposed of by Cashman shall be the responsibility of Cashman
      and shall be included by Cashman as a direct operating cost deducted from
      Net Sales in accordance with this Agreement and shall not be subject to
      indemnification by Crystal Magic.

              

      

       

       

       

       

      
        	
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                25.2.

              	
                Cashman
      agrees to indemnify, hold harmless, and defend Crystal Magic (and its
      directors, officers, employees, and agents) from and against any and all
      claims, demands, or actions and any losses, expenses, and damages arising
      out of the manufacture, use, sale, or other disposition of Laser Damage
      Products by Cashman or its Affiliates or otherwise related to Cashman’s
      performance of this Agreement, However, the foregoing undertaking by
      Cashman shall not apply to any claims resulting from Crystal Magic’s
      willful misconduct or gross
negligence.

              

      

      

      26.           CONFIDENTIALITY

      

      
        	
                26.1.

              	
                Except
      as required by law or by order of any court that has legal jurisdiction,
      each party agrees not to disclose the terms of this Agreement to any third
      party without the other’s written consent. If either party is required to
      disclose any of the terms of this Agreement, said party shall immediately
      inform the other and each party shall provide the other reasonable
      cooperation and assistance in seeking confidential treatment of such terms
      with the proceedings for which the information is
  sought.

              

      

      

      
        	
                26.2.

              	
                Cashman
      agrees to safeguard all Know-How covered by this Agreement and will not
      disclose or provide any Know-How to any third party without Crystal
      Magic’s prior written consent.

              

      

      

      
        	
                26.3.
      

              	
                Cashman
      acknowledges (i) that the Know-How obtained from Crystal Magic hereunder
      is commercially valuable proprietary information of Crystal Magic or
      others, the design and development of which has involved the expenditure
      of substantial amounts of money and the use of skilled development experts
      over a long period of time and which affords Crystal Magic a commercial
      advantage over its competitors: (ii) that such Know-How constitutes trade
      secrets and confidential business information that is disclosed to Cashman
      for use on the basis of the confidential relationship between Crystal
      Magic and Cashman under this Agreement and is to be used only as may be
      expressly permitted by the terms and conditions of this Agreement; (iii)
      that the loss of this competitive advantage due to unauthorized disclosure
      of such proprietary information would cause great injury and
      harm.

              

      

      

      
        	
                26.4.

              	
                Cashman
      covenants that it will not divulge, or publish to others, other than as
      herein provided, any Know-How obtained from Crystal Magic hereunder, or
      any information about the Crystal Magic’s commercial practices, policies,
      or plans, and that it shall divulge the same only to employees of Cashman
      who require it for the purpose of distribution of Laser Damage Products
      hereunder and only if such employees are
subject

              

      

      

       

       

       

       

      
        	
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      to
restrictions on use and disclosure at least as restrictive as those assumed by
Cashman hereunder.

      

      
        	
                26.5.

              	
                Cashman
      shall take reasonable action, by instruction, agreement or otherwise. with
      respect to independent contractors employed by Cashman’s employees or
      other persons who have not entered into the aforesaid restrictive
      engagements in order to prevent the unauthorized disclosure or use of such
      Know-How

              

      

      

      
        	
                26.6.

              	
                Know-How
      does not include information that shall become generally known in the
      trade through no fault of Cashman, (ii) any Know-How or information that
      shall be disclosed to Cashman by a party having legitimate possession
      thereof and the unrestricted right to make such disclosure, or (iii) any
      Know-How or information that Cashman can demonstrate was within its
      possession prior to the disclosure by Crystal Magic, and was provided by a
      party having legitimate possession thereof and the unrestricted right to
      make such disclosure

              

      

      

      
        	
                26.7.

              	
                Cashman
      and Crystal Magic agree to not solicit or employ any employee who works
      for the other entity during the term of such employee’s employment or for
      a period of eighteen months (18) after the termination of any such
      employee’s employment for whatever
reason.

              

      

      

      TERMINATION;
CONSEQUENCES OF TERMINATION

      

      
        	
                27.

              	
                TERMINATION. If either
      party should commit or cause to occur a material breach, default or
      noncompliance of or with any term or condition of this Agreement, said
      party shall have thirty (30) days after written notification to cure such
      breach, default or noncompliance, otherwise, in addition to any other
      remedy available in law or equity, the non-defaulting party may, at its
      election, terminate this agreement by written notice to the other.
      Included, without limitation, in the types of breach for which such notice
      of termination may be sent are: (i) failure to employ the Trademark to the
      extent or in the manner required under this Agreement; (ii) failure to
      clear trademark copy in advance as required under this Agreement; (iii)
      disclosure of the Know-How by Cashman, its affiliates or its employees or
      former employees to another party; (iv) violation of quality control
      standards or specifications on Laser Damage Products utilizing the Crystal
      Magic Technology; (v) denial of visitation or inspection rights granted
      pursuant to this Agreement; (vi) failure to pay Royalty Payments or
      provide the required reports under this Agreement; (vii) an assignment is
      made of either party’s business for the benefit of creditors; or (viii) if
      a receiver, trustee in bankruptcy, or like official is appointed to take
      all or part of a party’s business or if either party ceases doing business
      in the ordinary course.

              

      

      

      28.           CONSEQUENCES
OF TERMINATION.

      

      
        	
                28.1.

              	
                On
      termination of this Agreement, for any reason, or due to the expiration of
      the term of the Agreement, all rights and obligations of the parties shall
      forthwith cease, except the obligations of Cashman to make payments
      pursuant to this Agreement, to provide reports, and to maintain the
      confidential nature of the Know-How and the obligations of the parties
      regarding solicitation of employees, Further, Crystal Magic shall retain
      the right to inspect the books, records, and facilities of Cashman
      following termination of this Agreement for purposes of ensuring that all
      surviving obligations are met by
Cashman.

              

      

       

       

       

       

      
        	
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                28.2.

              	
                The
      provision for Royalty Payments due to Crystal Magic shall survive the
      expiration or termination of this Agreement, for any reason,, for a period
      of five (5) years (the “Post Termination Period”) and Cashman shall
      continue to make Royalty Payments on all Laser Damage Products sold by
      Cashman in accordance with this Agreement so long as Cashman continues to
      manufacture and sell Laser Damage Products during the Post Termination
      Period.

              

      

      

      GENERAL
TERMS

      
        

        
          	
                  29.

                	
                  NO
      ASSIGNMENT. Cashman shall not assign or otherwise transfer, by
      contract, operation of law, or otherwise, without the express written
      consent of Crystal Magic, which consent shall not be unreasonably
      withheld, this Agreement, the Know How, or any license right granted
      hereunder or any interest herein, and any such unauthorized assignment,
      transfer or sublicense shall be null and
void

                

        

         

      

      
        	
                30.

              	
                TAXES. Cashman shall pay
      all taxes and other charges that may be imposed by any Governmental agency
      as a result of the performance of this Agreement, including but not
      limited to capital, property, turnover, excise, use, sales and income
      taxes or other charges imposed by such Government agency provided,
      however, that Cashman shall not be held liable for any taxes imposed on
      Crystal Magic for Royalties or other payments made by Cashman to Crystal
      Magic or for any other taxes or charges imposed on Crystal Magic by any
      Government agency for the normal operation of Crystal Magic’s business,
      income, equity, ownership or for any other
  reason,

              

      

      

      
        	
                31.

              	
                INDEPENDENT CONTRACTOR,
      The parties hereby agree that no agency, joint venture or partnership is
      created by this Agreement, and that Cashman shall incur no obligation in
      the name of Crystal Magic without Crystal Magic’s prior written
      consent.

              

      

      

      
        	
                32.

              	
                SEVERABILITY. If any
      provision of this Agreement shall be held to be invalid or unenforceable
      for any reason, the remaining provisions shall continue to be valid and
      enforceable. If a court finds that any provision of this Agreement is
      invalid or unenforceable, but that by limiting such provision it would
      become valid or enforceable, then such provision shall be deemed to be
      written, construed, and enforced as so
limited.

              

      

      

      
        	
                33.

              	
                WAIVER OF CONTRACTUAL
      RIGHT, The failure of either party to enforce any provision of this
      Agreement shall not be construed as a waiver or limitation of that party’s
      right to subsequently enforce and compel strict compliance with every
      provision of this Agreement.

              

      

      

      
        	
                34.

              	
                ATTORNEYS’ FEES. In the
      event that any legal action or arbitration becomes necessary to enforce or
      interpret the terms of this Agreement, the prevailing party shall be
      entitled, in addition to its court costs or arbitration fees, to such
      reasonable attorneys’ fees as shall be determined by a court or
      arbitrator.

              

      

       

       

       

       

      
        	
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                35.

              	
                ENTIRE AGREEMENT. This
      Agreement contains the entire agreement of the parties and there are no
      other promises or conditions in any other agreement whether oral or
      written, This Agreement supersedes any prior written or oral agreements
      between the parties.

              

      

      

      
        	
                36.

              	
                AMENDMENT, This
      Agreement may be modified or amended, if the amendment is made in writing
      and is signed by both parties or their duly authorized
      representatives.

              

      

      

      
        	
                37.

              	
                APPLICABLE LAW. This
      Agreement shall be governed by the laws of the State of Florida and venue
      for any legal action must be filed in Orange County Circuit
      Court.

              

      

      

      
        	
                38.

              	
                NOTICES, All notices
      shall be delivered in writing via the United States Postal Service,
      certified mail or by other commercial carrier to each party as
      follows;

              

      

      

      Cashman:                             Cashman
Enterprises, Inc.

      Attn: Morgan Cashman, Secretary /
Treasurer

      3660 Cinder Lane

      Las Vegas, NV
89103-3003

      

      Crystal
Magic;                        Crystal
Magic, Inc.

                       
Attn: Steven M. Rhodes, President

                       
2120 Hidden Pine Lane

                       
Apopka, FL 32712

      

       

       

      
        	
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      The
undersigned confirm that they have read and agree with the terms and conditions
appearing above and that they are authorized to sign on behalf of their
respective entities. This agreement shall become effective upon acceptance by
Cashman at its corporate offices.

      

      IN WITNESS THEREOF, the
parties have executed this Agreement.

      

      CRYSTAL
MAGIC, INC.

      

      

      By:           STEVEN
M. RHODES

      Its:           President
and Chief Executive Officer

      

      CASHMAN
ENTERPRISES, INC.

      

      

      By:           MORGAN
CASHMAN

      Its:           Secretary
/ Treasurer

       

       

       

       

      
        	
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      EXHIBIT
A

      

      EQUIPMENT
AND SUPPLIES PURCHASE

      

      Crystal
Magic initially agrees to sell to Cashman, Laser Damage Systems at the following
manufacturing costs:

      

      Crystal
Magic’s Laser Damage
System                                                                                                           $80,000
each

      

      Laser
safety provisions:

      ANSI
Class IV laser system

      Interlocked
and labeled enclosure per ANSI Z136.1

      Keyswitch
and emergency stop

      Safety
features documented in instruction manual

      Product
registration with CDRH

      Laser
Subsystem

      Ultra GRM
1064, standard specifications

      Wavelength;
10G4 nm (Nd: YAG fundamental)

      Energy
per pulse: variable by manual external attenuator

      Repetition
rate: externally fired at approximately 30 Hz maximum.

      Transverse
mode: Low-order unstable resonator mode

      Far field
spatial profile: > 90% Gaussian

      Divergence:<0.5
mr after external expander

      System
control functions: over RS-232 interface and fast trigger inputs Positioner
Subsystem

      Stepper-driven
3-axis positioning system with motors, drives, and indexer

      Load
capacity: > 2 Ibs, axial

      Travel;
100 mm (“4”) all axes

      Acceleration;
~ Ig

      Max.
speed: - 0.5 m/s

      Minimum
position increment: ~5 um

      Position
accuracy: -12 urn

      Position
repeatability: ~5 um

      Control
interface options: RS-232, fast network

      System
Controller

      PC-platform
including, but not limited to

      Intel
PI1-350 MHz or better processor

      128 MB
RAM

      10 GB
internal mass storage (hard drive)

      1.44MB
removable mass storage (floppy drive)

      Multi-protocol
network card

      color
monitor

      Keyboard

      RS-232
serial interface

      Operating
system: Windows 98

       

       

       

       

      
        	
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      Operating
Agreement

      

      Crystal
Magic agrees to sell future Laser Damage Systems to Cashman at its procurement
and manufacturing costs. Upon Cashman’s order of additional Laser Damage
Systems, Crystal Magic will provide Cashman with an estimate of the total cost
to procure and manufacture the number of Laser Damage Systems ordered by
Cashman, Upon written acceptance of orders for Laser Damage Systems by both
parties, Cashman will provide Crystal Magic with fifty percent (50%) of the
estimated procurement and manufacturing costs. Cashman will provide Crystal
Magic with twenty five percent (25%) of the estimated procurement and
manufacturing costs within sixty days (60) of acceptance of the order, Cashman
will pay Crystal Magic any balance due of the procurement and manufacturing
costs of the Laser Damage Systems at the time of delivery.

      

      During
the term of this agreement, Crystal Magic agrees to sell the following items at
its procurement and manufacturing cost. Current Manufacturing and procurement
costs are as follows and are subject to change with written notice to
Cashman.

      

      Two Sets
of Fixtures (3 each of 5 different
sizes)                                                                $18,000
each

      Backup
Laser head and cooling
unit                                                                                     $15,000
each

      6K4
Controller                                                                                                                           $  2,500
each

      Energy
Meter & Protective
Glasses                                                                                 
     $  3,500 each

      Flash
lamps                                                                                                                         
 
    $     300.each

      Limit
Switches                                                                                                                   
     
  $       50 each

      

      Cashman
agrees to purchase all optical crystal used for creating Laser Damage Products
from approved Crystal Magic suppliers. Crystal Magic and Cashman may develop
other possible suppliers for its products taking into account, price, quality,
and buying terms and conditions. Current supplier pricing from Topmost Designs
for optical crystal is as follows, FOB suppliers warehouse.

      

      Current Supplier
Items:

      

      Small
Paperweight                                           60mm
x 60mm x
19mm                                     
$  6.00 each

      Large
Paperweight                                           120mm
x 60mm x
19mm                                  
 $11.00 each

      Small
Cube                                           50mm
x 50mm x
75mm                                                   $12.00
each

      Medium
Cube                                           90mm
x 65mm x
65mm                                              $26.80
each

      Large
Cube                                           115mm
x 65mm x
75mm                                                 $30.85each

      Light
Base                                           N/A                                                                            
     $10.00 each

      

      System
Installation:

      Cashman
will pay for all Labor, Travel, Accommodations, Shipping and other required
costs for the installation, service and repair of any Laser Damage Systems
purchased from Crystal Magic or other training services provided by Crystal
Magic. Crystal Magic has included estimated installation and training costs of
$30.000 in the overall invoice provided to Cashman upon the execution of this
agreement. Any unused installation and training costs will be applied against
royalty amounts due Crystal Magic, and any charges in excess of the initial
deposit will be paid by Cashman to Crystal Magic within fifteen (15) days of
invoice by Crystal Magic. All future installation, training and service costs
will be paid to Crystal Magic within fifteen (15) days of invoice by Crystal
Magic. Crystal Magic’s current labor costs are listed below. Crystal
Magic

       

       

       

       

      
        	
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      may from
time to time modify it labor costs and will notify Cashman in writing of any
modifications.

      

      Crystal Magic Current Labor
Rates:

      

      Engineers                                                                              $369.23
per day

      Manager
Trainers                                                                $230.77
per day

      

      Crystal
Magic will pass on to Cashman all component parts manufactures warranty or
actual out of warranty repairs at costs to Crystal Magic.

      

       

       

       

       

      
        	
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                Initials:Unassociated Document

    
          Exhibit 10.16

     

    
       

      SUBSURFACE ETCHING AND
SERVICING AGREEMENT

      

      THIS SUBSURFACE ETCHING AND SERVICING
AGREEMENT (“Agreement”) is made
and entered into as of the 1st day of August, 2003, by and between LASER CRYSTAL WORKS, LP, a
Texas limited partnership (“Owner” or “Laser
Crystal Works”), whose address is 100 Bowie Dr., Red Oak, Texas 75154, and CRYSTAL MAGIC, INC., a Florida
corporation (“Crystal
Magic”), whose address is 3329 Bartlett Blvd., Orlando, Florida
32811.

      

      1.           DEFINED TERMS. For
purposes of this Agreement all terms defined in this Agreement (including other
exhibits to this Agreement) will be used in this Agreement without further
definition. In addition, when delineated with initial capital letters, the
following terms will have the following respective meanings:

      

      a)           “Commercial Business”
means the engraving of promotional products.

      

      b)           “Crystal Blanks” means
Crystal Products prior to subsurface engraving.

      

      
        	
                 
      

              	
                c)

              	
                “Crystal
      Products” means leaded or optical glass materials which have been
      etched by subsurface engraving by Laser
  Equipment.

              

      

      

      
        	
                 
      

              	
                d)

              	
                “Insurance
      Requirements” shall mean all terms of any Insurance policy obtained
      by Owner or Crystal Magic covering or applicable to the Laser Equipment,
      the Retail Center or the Laser Decorative Engraving
    Business.

              

      

      

      
        	
                 
      

              	
                e)

              	
                “Laser
      Equipment” means laser subsurface engraving
    machines.

              

      

      

      
        	
                 
      

              	
                f)

              	
                “Laser Decorative
      Engraving Business” means the etching of the Crystal Blanks. For
      purposes of this Agreement, Laser Decorative Engraving Business shall
      exclude Commercial Business.

              

      

      

      
        	
                 
      

              	
                g)

              	
                “Legal
      Requirements” shall mean all laws, statutes, codes, acts,
      ordinances, orders, judgments, decrees, injunctions, rules, regulations,
      permits, licenses, authorizations, and requirements of all governmental
      authorities, foreseen or unforeseen, which now or at any time hereafter
      may be applicable to the Retail Centers or the Laser Decorative Engraving
      Business, including (a) all federal, state, and local laws, regulations,
      and ordinances pertaining to employment laws, (b) all federal, state, and
      local laws, regulations, and ordinances pertaining to tax matters; and (c)
      all laws, codes, and regulations pertaining to zoning, land use, healthy
      or safety.

              

      

      

      
        	
                 
      

              	
                h)

              	
                “Licensed Decorative
      Products” means Crystal Products which are used for decorative
      purposes under a Patent Sub-License Agreement (“Patent
      Sublicense”) to which Owner is a
party.

              

      

      

      
        	
                 
      

              	
                i)

              	
                “Operative
      Documents” means this Agreement, the Confidentiality and
      Non-Circumvention Agreement, the Security Agreement, and all other
      agreements, instruments, documents, exhibits, schedules and certificates
      executed and delivered by or on behalf of Owner or Crystal Magic pursuant
      to this Agreement

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                j)

              	
                “Retail
      Business” means the sale of Crystal Products at Retail Centers to
      final customers (consumers).

              

      

      

      
        	
                 
      

              	
                k)

              	
                “Retail
      Centers” means the locations where the Crystal Products are sold to
      consumers.

              

      

      

      
        	
                 
      

              	
                l)

              	
                “Theme Park”
      means any amusement complex such as Disneyland, Six Flags, Sea World, but
      shall exclude gaming and general vacation
sites.

              

      

      

      
        	
                 
      

              	
                m)

              	
                “Wholesale
      Business” means the production of Crystal Products which are not
      sold directly to final customers in a Retail
  Center.

              

      

      

      With
respect to any Business of Crystal Magic, the definitions of its Business shall
include the Business activities of Crystal Magic as well as its subsidiaries,
partners, affiliates, owners, and other entities in common control (whether
wholly or in part) with Crystal Magic.

      

      2.           ENGRAVING
SERVICES. Subject to and upon the terms set forth in this Agreement,
Owner will provide etching services to Crystal Magic for purposes of selling
Crystal Products at such Retail Centers as are approved in writing by Owner.
During the period the Sublicense Agreement is in place, this License is granted
only with respect to Licensed Decorative Products.

      

      3.           TERM.
This Agreement shall be in effect beginning the 3rd day of
March, 2003 and shall continue until terminated as provided herein. At the
termination of this Agreement by breach, Crystal Magic shall cause all of
Owner’s property, including the Laser Equipment, to be delivered to Owner at
Crystal Magic’s expense to such locations as directed by Owner.

      

      4.           RETAIL
CENTER PREPARATON. Owner shall hire its own employees or independent
contractors to operate the Laser Equipment and shall be responsible for all such
individuals at Crystal Magic Retail Centers. Owner specifically represents and
warrants that it has reviewed the scope of Crystal Magic’s Retail Business and
that Crystal Magic’s Retail Business does not violate Owners Laser Equipment
Patent License with LDI or any other Licensor, Crystal Magic understands that
the Laser Equipment must be kept secure at all times and must not be a danger to
the public. Owner shall at all times retain ownership of the Laser Equipment and
have ultimate supervision and authority with respect to its use.

      

      5.           DELIVERY
AND SHIPPING. The delivery and shipping charges of the Laser Equipment in
each Retail Center shall be at the sole cost and expense of Owner and shall be
performed by Owner’s employees or representatives, with assistance from Crystal
Magic employees at the installation site. Crystal Magic shall provide Owner with
the location of each Retail Center and shall assist Owner in obtaining access to
each Retail Center, Owner will initially provide Assets as set forth in Appendix
A hereto.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      6.           FEES AND
EXPENSE PAYMENTS.

      

      
        	
                 
      

              	
                a)

              	
                The
      Fees are described in Appendix B and
      shall be calculated as determined pursuant to Appendix B and shall be due
      and payable as provided therein. In addition, (1) litigation expenses
      including attorney’s fees of Crystal Magic for existing legal litigation
      in excess of $16,000 per year and (2) compensation to management (for
      Crystal Magic, in excess of $250,000 for the following management members:
      Steven M. Rhodes and John C. Wolf (3) compensation to spouses or
      additional forms of compensation to management not approved by owner shall
      not be deducted from gross revenues to arrive at Crystal Magic’s
      distributable net revenue as defined in Appendix B. Further, the gross
      revenues of Crystal Magic shall specifically include revenues from laser
      equipment acquired from or operated by sources other than Owner but
      exclude revenues from Crystal Magic’s Commercial Business. The cost of any
      Owner’s employee to operate lasers (including, without limitation, salary,
      taxes, benefits, workers compensation insurance premiums, etc.) will be
      reimbursed by Crystal Magic to
Owner.

              

      

      

      
        	
                 
      

              	
                b)

              	
                In
      addition to the Fees, Crystal Magic shall pay Owner the expense
      reimbursements and costs as determined under Appendix B as
      well as any sales, use or other taxes or assessments which are assessed or
      due by reason of this License
hereunder.

              

      

      

      
        	
                 
      

              	
                c)

              	
                Crystal
      Magic shall keep accurate sets of books and records prepared in accordance
      with Generally Accepted Accounting Principles consisting of a profit and
      loss statement, balance sheet, and earnings statement, and all supporting
      records such as sales receipts, expense receipts, and other records which
      are necessary to verify and substantiate the amount of the Fees and
      expenses, at each party’s principal business office. All such books and
      records shall be retained and preserved for at least five (5) years after
      the end of the calendar year to which they relate and shall be subject to
      inspection and audit by Owner and its agents at all reasonable times. In
      the event Owner is not satisfied with any monthly statement or annual
      statement submitted by Crystal Magic, it shall have the right to have its
      auditors make a special audit of all books and records during the period
      in question. If such statements are found to be incorrect to an extent of
      more than two percent (2%) over the figure submitted, Crystal Magic shall
      pay for such audit. Crystal Magic shall promptly pay to Owner any
      deficiency or Owner shall promptly refund any overpayment, as the case may
      be, which is established by such
audit.

              

      

      

      7.           RETAIL
CENTER AREAS. Crystal Magic shall use its best commercial efforts to
obtain authorization from the property owner or lessee of the Retail Centers for
the installation, operation and maintenance, of the Laser Equipment in the
Retail Centers.

      

      8.           MAINTENANCE
ANP REPAIR. At Crystal Magic’s expense, Owner shall maintain and repair
the Laser Equipment and digital cameras which may be required from time to time,
and Crystal Magic shall inform Owner of the need for such required repairs on a
timely basis. All other maintenance and repair items relating to the Retail
Center and Laser Decorative Engraving Business shall be the responsibility of
Crystal Magic. Parts purchased from Owner will be provided at its full OEM cost
and Owner shall obtain warranty work when possible. Owner will stock major laser
parts required to repair a laser system efficiently.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      9.           CRYSTAL
BLANKS. Crystal Magic shall purchase the Crystal Blanks at its own
expense.

      

      10.           RIGHT OF
FIRST REFUSAL.

      

      
        	
                 
      

              	
                a)

              	
                In
      the event Crystal Magic or any shareholder thereof receives a bonafide
      offer for the purchase of common stock, and Crystal Magic and/or any
      shareholder thereof desires to accept such offer, such person (the “Offering
      Person”) agrees to promptly give written notice of such offer to
      Owner. The notice must set forth the name and address of the proposed
      transferee and the qualifications of such transferee to hold the common
      stock (the “Offered
      Stock”), price and all other terms and conditions of the proposed
      transfer. On receipt of the notice with respect to such offer, Owner will
      have the exclusive right and option exercisable at any time during a
      period of sixty (60) days from the date notice is received, to purchase
      the Offered Stock upon the same terms and conditions as contained in the
      offer from the third party. If Owner elects to exercise its option to
      purchase the Offered Stock, Owner will give written notice to that effect
      to the Offering Person. If Owner does not desire to purchase the Offered
      Stock, the Offering Person will have the right to transfer the Offered
      Stock, or available portion thereof, to the third party purchaser pursuant
      to the terms of the offer.

              

      

      

      
        	
                 
      

              	
                b.

              	
                In
      the event Owner or any limited partner thereof receives a bona fide offer
      for the purchase of limited partnership interests, and Owner and/or any
      limited partner thereof desires to accept such offer, such person (the
      “Offering
      Person”) agrees to promptly give written notice of such offer to
      Crystal Magic. The notice must set forth the name and address of the
      proposed transferee and the qualifications of such transferee to hold the
      limited partnership interests (the “Offered
      Interests”), price and all other terms and conditions of the
      proposed transfer. On receipt of the notice with respect to such offer,
      Crystal Magic will have the exclusive right and option exercisable at any
      time during a period of sixty (60) days from the date notice is received,
      to purchase the Offered Interests upon the same terms and conditions as
      contained in the offer from the third party. If Crystal Magic elects to
      exercise its option to purchase the Offered Interests, Crystal Magic will
      give written notice to that effect to the Offering Person. If Crystal
      Magic does not desire to purchase the Offered Interests, the Offering
      Person will have the right to transfer the Offered Interests, or available
      portion thereof, to the third party purchaser pursuant to the terms of the
      offer.

              

      

      

      
        	
                 
      

              	
                c.

              	
                This
      Section 10 shall only apply to offers from persons unaffiliated with each
      entity and shall not apply to transfers among existing equity owners,
      their family members, persons under common control, or involuntary
      transfers such as death, bankruptcy or
divorce.

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      11.           RELATIONSHIP.
Owner is providing Laser Equipment to Crystal Magic, and is performing the
repair and maintenance services, as well as other services hereunder, as an
independent contractor and not as an employee of Crystal Magic, and Owner shall
not be entitled to receive any compensation, benefits or other incidents of
employment from Crystal Magic. Nothing in this Agreement shall be deemed to
constitute a partnership, joint venture, or other related party relationship
between Crystal Magic and Owner, nor shall anything in this Agreement be deemed
to constitute Crystal Magic or Owner the agent of the other. Neither Owner nor
Crystal Magic shall be or become liable or bound by any representation, act, or
omission whatsoever of the other.

      

      12.           LICENSES
AND PERMITS. Prior to commencing any work in any Retail Center, Crystal
Magic shall obtain all necessary licenses, permits and consents related to the
Laser Decorative Engraving Business and to the operation and use of the Laser
Equipment and provide copies of same to Owner. Owner shall have the right to
monitor all such work, at the expense of Crystal Magic.

      

      13.           COSTS.
IT addition to the fees and expenses referenced in Section 6, Crystal Magic
shall be responsible for any and all cost, damage or expense arising from the
installation, maintenance, repair or operation of the Laser Equipment and the
Laser Decorative Engraving Business, including, without limitation, the purchase
of Crystal Blanks and any and all cost, damage or expense to the Retail Centers
or the property of owners or tenants thereof. Owner and Crystal Magic shall each
pay all of their respective fees, costs and expenses (including those of
accountants and attorneys) incurred in connection with or related to the
preparation, negotiation, execution, delivery, satisfaction; compliance and
consummation of this Agreement and the transactions contemplated hereby and the
closing matters hereunder.

      

      14.           TAXES.
Crystal Magic shall pay directly (or reimburse, but only if instructed by Owner)
all taxes, fees, and assessments that may be imposed by any taxing authority in
connection with the Laser Decorative Engraving Business or on the Laser
Equipment, its purchase, use, ownership, delivery, possession, operation,
rental, or return to Owner (collectively, Taxes); provided, however, that
Crystal Magic shall not be liable for any such Taxes (whether imposed by the
United States of America or by any other domestic or foreign taxing authority)
imposed or measured by Owner’s net income or tax preference items. Crystal
Magic’s obligation includes, but is not limited to, the obligation to pay all
license and registration fees and all sales, use, personal property and other
taxes and governmental charges, together with any penalties, fines and interest
thereon, that may be imposed during the License Term. Crystal Magic is liable
for these Taxes whether they are imposed upon Owner, Crystal Magic, the Laser
Equipment, or this Agreement. If Crystal Magic is required by law or
administrative practice to make any refund or return with respect to such Taxes,
Crystal Magic shall promptly advise Owner thereof in writing and shall cooperate
with Owner to ensure that such reports are properly filed and accurately reflect
Owner’s interest in the Laser Equipment. Owner has no obligation to contest any
such Taxes, however Crystal Magic may do so provided that; (a) Crystal Magic
does so in its own name and at its own expense, (b) the contest does not and
will not result in any lien attaching to any Laser Equipment or otherwise
jeopardize Owner’s right to any Laser Equipment; and (c) Crystal Magic
indemnifies Owner for all expenses (including legal fees and costs), liabilities
and losses that Owner incurs as a result of any such contest.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      15.           CONFIDENTIALITY.
As a material inducement to this Agreement, Owner and Crystal Magic shall enter
into a Confidentiality and Non-Circumvention Agreement in the form attached
hereto as Exhibit
B.

      

      16.           LAWS AND
REGULATIONS. Crystal Magic, at Crystal Magic’s sole cost, shall (a)
comply with all Legal Requirements and Insurance Requirements applicable to
Crystal Magic’s use and occupancy of the Retail Centers, and (b) take all
measures necessary to assure that it strictly complies with all applicable Legal
Requirements, Owner shall (a) comply with all Legal Requirements of its Patent
Sublicense with LDI or other licensor and take all measures necessary to assure
that it strictly complies with all applicable Legal Requirements.

      

      17.           NO
WARRANTY. CRYSTAL MAGIC ACKNOWLEDGES AND AGREES THAT OWNER HAS MADE NO
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO THE EFFECT THAT ANY RETAIL
CENTER OR THE LASER EQUIPMENT ARE ADEQUATE FOR THE OPERATION OF CRYSTAL MAGIC’S
BUSINESS OR FOR ANY PARTICULAR PURPOSE WHATSOEVER, NOR THAT THE LOCATION OF EACH
RETAIL CENTER OR ITS OPERATIONS WELL RESULT IN FINANCIALLY SUCCESSFUL RESULTS TO
CRYSTAL MAGIC. OWNER MAKES NO REPRESENTATIONS OR WARRANTIES EXCEPT AS
SPECIFICALLY SET FORTH HEREIN. SOME JURISDICTIONS DO NOT ALLOW THE EXCLUSION OF
IMPLIED WARRANTIES, SO THE ABOVE EXCLUSION MAY NOT APPLY TO YOU.

      

      OWNER
ACKNOWLEDGES AND AGREES THAT CRYSTAL MAGIC HAS MADE NO REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, TO THE EFFECT THAT ANY RETAIL CENTER OR THE LASER
EQUIPMENT ARE ADEQUATE FOR THE OPERATION OF CRYSTAL MAGIC'S BUSINESS OR FOR ANY
PARTICULAR PURPOSE WHATSOEVER, NOR THAT THE LOCATION OF EACH RETAIL CENTER OR
ITS OPERATIONS WILL RESULT IN FINANCIALLY SUCCESSFUL RESULTS TO CRYSTAL MAGIC,
CRYSTAL MAGIC MAKES NO REPRESENTATIONS OR WARRANTIES EXCEPT AS SPECIFICALLY SET
FORTH HEREIN. SOME JURISDICTIONS DO NOT ALLOW THE EXCLUSION OF IMPLIED
WARRANTIES, SO THE ABOVE EXCLUSION MAY NOT APPLY TO YOU.

      

      18.           ENTRY AND
INSPECTION BY OWNER. Crystal Magic shall permit Owner. and its employees,
agents, contractors, or representatives, to have access to any portion of the
Retail Centers at all times to inspect the same, to clean or make repairs,
alterations or additions thereto.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      19.           INDEMNIFICATION.

      

      a)           CRYSTAL
MAGIC WILL INDEMNIFY AND HOLD HARMLESS OWNER, ITS AGENTS, SERVANTS, OWNERS AND
EMPLOYEES (COLLECTIVELY, “OWNER”) FROM AND AGAINST (1) ANY LOSS, COST, CLAIM,
LIABILITY, DAMAGE, EXPENSE (INCLUDING REASONABLE ATTORNEY FEES), RELATING TO OR
ARISING OUT OF NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF CRYSTAL
MAGIC INCLUDING. WITHOUT LIMITATION, (i) THE INSTALLATION, OPERATION, REPAIR,
AND MAINTENANCE OF THE LASER EQUIPMENT, THE OPERATION OF THE LASER DECORATIVE
ENGRAVING BUSINESS, AND ANY OTHER BUSINESS ACTIVITIES OF CRYSTAL MAGIC EXCEPT TO
THE EXTENT ANY LIABILITY, CLAIMS OR DAMAGES ARISE DIRECTLY FROM THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF OWNER; AND (2) ALL LIABILITY AND CLAIMS FOR
PATENT ROYALTIES PAYABLE BASED UPON THE SALE OF LICENSED DECORATIVE PRODUCTS
MADE BY THE LASER EQUIPMENT. CRYSTAL MAGIC WILL ALSO DEFEND ANY ACTION OR SUIT
BROUGHT BY A THIRD PARTY AGAINST OWNER AND INDEMNIFY AND HOLD HARMLESS OWNER FOR
ANY LOSS, CLAIM, LIABILITY, DAMAGE, OR EXPENSE RELATING TO OR ARISING OUT OF THE
NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF CRYSTAL MAGIC, ITS
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, OR CONTRACTORS, IN THE PERFORMANCE OF
THIS AGREEMENT.

      

      b)           THE
PARTIES ALSO ACKNOWLEDGE THAT (1) THE PROVISIONS OF THIS SECTION SPECIFY THE
PARTIES’ AGREEMENT REGARDING ALLOCATION OF RISK AND (2) SUCH PROVISIONS ARE AN
ESSENTIAL AND CENTRAL FART OF THIS AGREEMENT.

      

      c)           Owner
shall protect, defend, indemnify, and hold Crystal Magic harmless from all
liability and claims in connection with any other business activities of Owner
unrelated to the Laser Decorative Engraving Business, except to the extent any
liability, claims or damages arise from the negligence, gross negligence or
willful misconduct of Crystal Magic.

      

      20.           DAMAGE.
Crystal Magic shall be liable to Owner for any loss or damage to all or any part
of the Laser Equipment to the extent not reimbursed by Insurance.

      

      21.           INSURANCE.
At its own expense, Crystal Magic shall provide and maintain (or reimburse Owner
for providing and maintaining) the following insurance: (a) insurance against
the loss or theft of or damage to the Laser Equipment for the fall replacement
value thereof, naming Owner as a loss payee; and (b) public liability and third
party property damage insurance, naming Owner as an additional insured
(collectively, “Insurance”). Such
Insurance shall be in a form, amount and with companies reasonably satisfactory
to Owner, shall contain the insurer’s agreement to give Owner 30 days’ prior
written notice before cancellation or material change thereof, and shall be
payable to Owner regardless of any act, omission or breach by Crystal Magic.
Crystal Magic shall deliver to Owner the Insurance policies or copies thereof or
certificates of such Insurance on or before the Effective Date hereof, and at
such other times as Owner may reasonably request.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      22.           TRANSFERS
BY CRYSTAL MAGIC. Crystal Magic shall not assign, convey, mortgage,
pledge, hypothecate, encumber, or otherwise transfer the Laser Equipment or the
Agreement or grant any license, concession, or other right with respect to the
Laser Equipment or the Agreement without the prior written consent of Owner,
which consent may be granted or withheld in Owner’s sole option; and the
Agreement shall, at Owner’s sole option, terminate upon the occurrence of any
attempted transfer of the Laser Equipment.

      

      23.           NEGATIVE
COVENANTS. Owner shall not establish or compete with Crystal Magic
directly or indirectly in any Disney owned or operated Theme Park, any Universal
Studios owned or operated Theme Park or any engraving location owned or operated
by Cashman Photo Enterprises, Inc., Should Owner desire to establish a sales
operation in any Theme Park where Crystal Magic is not established, Owner agrees
to notify Crystal Magic of Owner’s intent and provide Crystal Magic rights of
first refusal. If Crystal Magic does not exercise its right of first refusal
within 90 days after Owner’s notice, Owner may independently establish a
business in such Theme Park.

      

      Until
Crystal Magic pays the outstanding unamortized cost of Assets provided by Owner,
Crystal Magic will not, without the express written consent of Owner which
consent shall not be unreasonably withheld:

      

      a

      

      b)           permit
any change in directors, executive officers, or other control persons in other
than by operation of law; or

      

      d)
c)           issue stock,
options or other beneficial interest.

      

      In
addition. Crystal Magic shall operate its Business consistent with past
practice, in the ordinary course of business, and not intentionally allow any
material adverse change in its Business, the Laser Equipment or in the
operation, condition (financial or otherwise), assets, properties, liabilities
or Business prospects. Without limiting the generality of the foregoing, and
until Crystal Magic pays the outstanding unamortized cost of Assets provided by
Owner, Crystal Magic will not, without the express written permission of Owner
which consent shall not be unreasonably withheld (other than as contemplated by
this Agreement):

      

      a)           Subject
any of their respective assets (collectively, “Asset”) or permit any Asset to
become subject to, or incur, any mortgages, deeds of trust, claims, liens,
security interests, pledges, leases, conditional sale contracts, rights of first
refusal, options, charges, liabilities, obligations, agreements, easements,
rights-of-way, powers of attorney, limitations, reservations, restrictions and
other encumbrances of any kind (collectively, “Lien”) (whether voluntary or by
operation of law) absolute, accrued, contingent or otherwise, whether due or to
become due except for current Liens and liabilities for trade and business
obligations incurred in connection with the purchase of goods or services in the
ordinary course of business consistent with past practice;

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      b)           sell,
transfer, mortgage, assign, lease, license or otherwise dispose any material
Asset other than inventory sold in the ordinary course of business and
consistent with past practice;

      

      c)           make
any capital expenditures, capital additions or improvements or incur any debt
obligations in excess of an aggregate of $10.000 or make any legally binding
commitments therefor;

      

      d)           enter
into any material contract, agreement, instrument or understanding (whether
written or oral), or make or agree (whether in writing or orally) to any
amendment, modification or termination to any material contract, agreement,
instrument or understanding, other than in the ordinary course of business and
consistent with past practice;

      

      e)           fail
to replenish inventories of the Business in a normal and customary manner
consistent with prior practice and prudent business practices prevailing in the
industry, or make any purchase commitment in excess of the normal, ordinary and
usual requirements of the Business or at any price in excess of the then current
market price or upon the terms and conditions more onerous than those usual and
customary in the industry, or make any change in its selling, pricing,
advertising or personnel practices of the Business inconsistent with past
practice and prudent business practices prevailing in the industry;

      

      f)           defer
payment on any liabilities outside the ordinary course of business or otherwise
treat suppliers of the Business in such a way that could negatively affect the
future relationship;

      

      g)           accept
or enter into any purchase order or quotation, arrangement or understanding
(whether written or oral) for future sale of services or Crystal Products by or
in the Business which Crystal Magic knows, or should know at the time of such
acceptance or execution, would not be profitable in any material
respect;

      

      h)           adopt
or amend any bonus, profit sharing, pension, retirement or other compensation
plan or (except for cost of living adjustments) make any material change in the
rate of compensation, commission, bonus or other direct or indirect remuneration
payable, or pay or agreed or orally promised to pay, conditionally or otherwise,
any bonus, incentive, retention or other compensation, retirement, welfare,
fringe or severance benefit or vacation pay to or in respect of any director,
officer, employee, salesman, distributor, consultant or agent providing services
to the Business other than in the ordinary course of business and consistent
with past practice;

      

      i)           institute,
settle or agree to settle any proceeding before any court or governmental body
other than in the ordinary course of business consistent with past practices but
not in any case involving amounts in excess of $5,000;

      

      j)           enter
into any transaction related to the Business other than those contemplated by
this Agreement, any other agreement between the parties hereto, or considered to
be in the ordinary course of business;

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      k)           vary
insurance coverage other than in the ordinary course of business and consistent
with past practice; or

      

      1)           enter
into any agreement or understanding to do or permit any of the foregoing, or
taken any action or omitted to take any action that could reasonably be expected
to result in the occurrence of any of the foregoing other than in the ordinary
course of business and consistent with past practice.

      

      24.           REFORMATION.
It is expressly understood and agreed that although Owner and Crystal Magic
consider the restrictions and provisions contained herein to be reasonable, if a
final judicial determination is made by a court having jurisdiction that any
restriction or provision contained in this Agreement is an unreasonable or
otherwise unenforceable restriction against Owner and/or Crystal Magic, the
parties hereto do hereby authorize such court to revise and amend this Agreement
so as to produce a legally enforceable agreement.

      

      25.           DEFAULT
AND REMEDIES / TERMINATION.

      

      a)           Security Agreements.
Crystal Magic and Owner shall enter into a Security Agreement in the form
attached hereto as Exhibit C and Crystal Magic hereby consents to the filing of
any applicable Uniform Commercial Code Financing Statement (UCC-1) in connection
therewith, as well as any security agreements and Financing Statements affecting
Owner’s interest in the Laser Equipment.

      

      b)           Events of Default.
Any of the following shall constitute an Event of Default under this Agreement
and all Schedules; (a) Crystal Magic fails to pay any Fee or any other amount
payable to Owner hereunder as provided herein; or (b) Crystal Magic fails to
perform or observe any other representation, warranty, covenant, condition or
agreement to be performed or observe by Crystal Magic hereunder or in any other
agreement with Owner, and Crystal Magic fails to cure any such breach within 30
days after notice thereof; or (c) Crystal Magic makes an assignment for the
benefit of creditors, whether voluntary or involuntary; or (d) a proceeding
under any bankruptcy, reorganization, arrangement of debts, insolvency or
receivership law is filed by or against Crystal Magic or Crystal Magic takes any
action to authorize any of the foregoing matters; or (e) Crystal Magic becomes
insolvent or fails generally to pay its debts as they become due, the Laser
Equipment is levied against, seized or attached; or (f) Crystal Magic seeks to
effectuate a bulk sale of Crystal Magic’s inventory or assets; or (g) Crystal
Magic voluntarily or involuntarily dissolves or is dissolved, or terminates or
is terminated.

      

      c)           Remedies. If an Event
of Default occurs by Crystal Magic, Owner may, in its sole discretion, exercise
one or more of the following remedies but must provide Crystal Magic with a
written 60 days’ notice and opportunity to cure any default: (a) terminate this
Agreement; or (b)take possession of, or render unusable, any Laser Equipment
wherever the Laser Equipment may be located, without demand or notice, without
any court order or other process of law and without liability to Crystal Magic
for any damages occasioned by such action, and no such action shall constitute a
termination of this Agreement; or (c) require Crystal Magic to deliver the Laser
Equipment at a location designated by Owner at Crystal Magic’s sole expense; or
(d) proceed by court action to enforce specific performance by Crystal Magic of
any provision or covenant hereof and/or to recover all damages and expenses
incurred by Owner by reason of any Event of

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Default
or (e) terminate any other agreement that Owner may have with Crystal Magic. In
addition, Crystal Magic shall pay Owner all costs and expenses (including legal
fees and cost and fees of collection agencies) incurred by Owner in enforcing
any of the terms, conditions or provisions of this Agreement Upon repossession
or surrender of any Laser Equipment, Crystal Magic shall remain liable to Owner
for any damages or liability notwithstanding such repossession. Crystal Magic
agrees that with respect to any notice of a sale required by law to be given,
180 days’ notice shall constitute reasonable notice. These remedies are
cumulative of every other right or remedy given hereunder or now or hereafter
existing at law or in equity or by statute or otherwise, and may be enforced
concurrently therewith or from time to time. If an Event of Default occurs by
Owner, Owner must provide Crystal Magic with a written 180 days’ notice in order
to take possession of any Laser Equipment. If an Owner default occurs after
September 3. 2005, Owner will forfeit any displays provided to Crystal
Magic.

      

      d)           Delivery of Equipment
If Owner fails to deliver Laser Equipment on a timely basis, Crystal Magic shall
notify Owner in writing within three (3) calendar days of such occurrence, and
Owner shall have sixty (60) days to deliver such equipment.

      

      e)           Cross-Default
Provisions. A material breach or default of this Agreement shall
constitute a material breach of the Operative Agreements, and vice
versa.

      

      f)           Force Majeure.
Neither party shall be in default hereunder by reason of any failure or delay in
the performance of any obligation under this Agreement where such failure or
delay arises out of any cause beyond the reasonable control and without the
fault or negligence of such party.

      

      e)           Termination by Owner.
Owner shall have the right, but not the obligation, to immediately terminate
this Agreement in the event of any disagreement, conflict, alleged breach or
default, or other notice of a potential or actual dispute in connection with or
related to the Patent Sublicense and/or royalties payable thereunder. If this
termination occurs by Owner, Owner must provide Crystal Magic with a written 180
days’ notice in order to take possession of any Laser Equipment If a Termination
by Owner occurs after September 3, 2005, Owner will forfeit any displays
provided to Crystal Magic.

      

      26.           SURVIVAL.
Certain provisions of this Agreement relate to the rights and obligations of
Owner and Crystal Magic subsequent to the termination or expiration of the
Agreement Term. Such provisions include, without limitation, the indemnification
obligations under Paragraph 19 hereof. Such provisions shall survive the
expiration or other termination of the Agreement Term and the License granted to
Crystal Magic hereunder.

      

      27.           ASSIGNMENT.
Neither party hereto may assign this Agreement or any of the rights or
obligations established herein, in whole or in part, without the prior written
consent of the other party hereto. Any purported assignment without such consent
shall be void. Notwithstanding the foregoing, the rights and duties of Owner
hereunder may be assigned by Owner, without the consent of Crystal Magic, to any
successor-in-interest, subsidiary, affiliate or related party of
Owner.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      28.           APPLICABLE
LAW THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS (AS OPPOSED TO
CONFLICTS OF LAW PROVISIONS) OF THE STATE OF TEXAS. Owner and Crystal Magic
consent to the jurisdiction of any local, state or Federal court located within
the State of Texas, and waive any objection relating to improper venue or forum
non conveniens to the conduct of any proceeding in any such court.

      

      29.           CAPTIONS;
COUNTERPARTS; INTEGRATION: ENTIRE AGREEMENT. The captions contained in
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement. This Agreement may be executed in any number of counterparts,
and each such counterpart hereof shall be deemed to be an original instrument,
but all such counterparts together shall constitute but one agreement. This
Agreement may also be executed by facsimile signature. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
permitted successors or assigns. This Agreement and all other Operative
Documents executed by both Owner and Crystal Magic constitute the entire
agreement between the parties hereto relating to the matters hereof, and
supersede all prior agreements relating thereto, whether written or oral, and
may not be amended or modified except in a writing signed by the parties
hereto.

      

      30.           SEVERABILITY.
If any provision of this Agreement, including any phrase, sentence, clause,
section or subsection, is legally inoperative or unenforceable for any reason,
such circumstances shall not have the effect of rendering any other provision or
provisions herein contained invalid, inoperative, or unenforceable to any extent
whatsoever.

      

      31.           NOTICES.
All notices, claims, certificates, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally or mailed (by first class registered or certified mail,
postage prepaid, return receipt requested), or via Federal Express or other
nationally recognized service as follows:

      

      

      
      	With A Copy To:
      

      
      	To Owner:
        Laser Crystal Works, LP
		Vial, Hamilton, Koch & Knox, L.L.P.
      

      
      	100 Bowie Dr.
        1700 Pacific Ave., Suite 2800
      

      
      	Red Oak, Texas 75154
        Dallas, Texas 75201
      

      
      	Attn: Paul D. Schoonover, Esq.
      

      

      
      	To Crystal Magic:
        Crystal Magic, Inc.
      

      
        3329 Bartlett Blvd.
      

      
      	Orlando, Florida 32811
      

      

      
      	or to such other address as the party to whom notice is to be given may have furnished to the other parties in writing in accordance herewith.
      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the Effective
Date.

      

      OWNER:

      

      LASER
CRYSTAL WORKS, LP

      a Texas
limited partnership

      

      By:           PTC
MANAGEMENT, L.L.C,

      a Texas limited liability company, and its general partner

      

      Date
Executed on                                                                   By:  /s/ Richard Lamden

      Behalf of
Owner:                                                                    Name: Richard Lamden 

                                     
                                                 Title: Manager

      

      LICENSEE:

      

      CRYSTAL
MAGIC, INC.,

      a Florida
corporation

      

      

      Date
Executed on                                                                   By:  /s/ Steven M. Rhodes

      Behalf of Crystal Magic:                                                       Name: Steven M. Rhodes

                                     
                                                 Title: President

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      APPENDIX
A

      FEES
AND EQUIPMENT SCHEDULE

      

      
        	
                I.

              	
                Owner
      agrees to provide Crystal Magic with Five Hundred Forty Four Thousand
      Dollars ($544,000) of fixed assets at OEM pricing as identified below to
      and including laser systems, 3D digital Cameras, Fixtures or Kiosks or
      other assets as both parties may agree to from time to time. Such assets
      will be provided by owner to Crystal Magic in a timely manner, but not to
      exceed sixty days (60) from the time of notification, exceptions being
      unforeseen vendors delays.

              

      

      

      ASSET
SCHEDULE

      

      532
Wavelength Laser, $80,000, Delivered March 3. 2003

      532
Wavelength Laser, $80,000, Delivered March 3, 2003

      Minolta
3D Digital Camera, $13,000, Delivered March 3, 2003

      Minolta
3D Digital Camera, $8,000, Delivered March 3, 2003

      

      532
Wavelength Laser, $80,000, Delivery On or Before. August 30, 2003

      6 3D
Digital Cameras, Manufactured to be decided upon by Crystal Magic, and delivered
by vendor as soon as possible at OEM cost.

      Retail
Fixtures, Manufacturer to be decided upon by Crystal Magic and delivered by
Manufacturer as soon as possible

      

      Owner
agrees to sell to Crystal Magic for company operations additional equipment at
OEM cost while this agreement is in effect.

      

      Owner and
Crystal Magic agree to each fund fifty percent (50%) of the cost of any assets
needed above the Five Hundred Forty Four Thousand Dollars ($544,000) of fixed
assets at OEM pricing to further grow Crystal Magic’s business.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      APPENDIX
B

      

      
        	
                1.

              	
                On
      a monthly basis, Crystal Magic agrees to pay to Owner monthly fees
      equivalent to the cost of fixed assets provided by Owner, amortized over a
      sixty (60) month period at a fixed rate of 8%
  interest.

              

      

      

      
        	
                 
      

              	
                a.

              	
                In
      the event that Crystal Magic cannot make the monthly payment, the
      calculated interest will be added back to the principal balance of the
      outstanding amount due and the payment will be
  reamortized.

              

      

      

      
        	
                 
      

              	
                b.

              	
                On
      an annual basis but paid and adjusted quarterly and until Crystal Magic
      pays the outstanding unamortized cost of Assets provided by Owner, Crystal
      Magic agrees to pay to Owner Forty Percent (20%) of Crystal Magic’s non
      Commercial Business Earnings Before Interest, Depreciation, and
      Amortization but not less than the sum of monthly fees paid for the annual
      period.

              

      

      

      
        	
                 
      

              	
                i.

              	
                Upon
      Crystal Magic’s payment in full of the costs of Assets provided by Owner,
      Crystal Magic agrees to pay to Owner Thirty Three and One Third Percent
      (13.33%) of Crystal Magic’s non Commercial Business Earnings Before
      Interest, Depreciation, and Amortization. Crystal Magic agrees to apply
      the additional 6.67% to service CM
debt.

              

      

      

      
        	
                 
      

              	
                ii.

              	
                Upon
      Crystal Magic’s payment in full of its debt existing as of the date
      hereof, CM agrees to pay to Owner Fifty Percent (30°/o) of Crystal Magic’s
      non Commercial Business Earnings Before Interest Depreciation, and
      Amortization.

              

      

      

      
        	
                2.

              	
                On
      a quarterly basis, Crystal Magic will pay to owner etching fees for all
      non commercial etching services (tolling) for Crystal Products sold for
      Twenty Percent (20%) of Crystal Magic’s non Commercial Business Earnings
      Before Interest, Depreciation, and Amortization. Additionally, and on a
      quarterly basis, Crystal Magic will pay to owner royalty fees equal to Ten
      Percent (10%) of the etching fees as calculated in this paragraph plus Ten
      Percent (10%) of the operating labor costs incurred by owner for etching
      services provided
hereunder.

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