Document:

Unassociated Document

    
          Exhibit 10.11

     

    Control #
9TFL-00512                                                           U. S. Small Business
Administration

    Secured
Economic Injury Disaster Loan

    

    LOAN AUTHORIZATION AND
AGREEMENT

    

    Date: December 19.
2001

    

    On the
above date, this Administration (SBA) authorized (under Section 7(b) of the
Small Business Act, as amended) a Loan (Loan Number EIDL 51147840-07) to
Crystal Magic.
Inc. (Borrower) of 2120 Hidden Pine Lane,
Apopka. Florida 32712 in the amount of Two Hundred Fifty-Three
Thousand Four Hundred and no/100 ($253,400.00) Dollars upon the following
conditions:

    

    1.           PAYMENT
TERMS

    

    
      	
               
      

            	
              A.

            	
              Interest
      will accrue at the rate of 4.000% per
      annum; installment payments, including principal and interest, of One Thousand Two
      Hundred Thirty-Four and no/100 ($1,234.00) Dollars monthly, will
      begin Five (5)
      months from the date of the promissory Note. The balance of
      principal and interest will be payable Thirty (30) Years from the date of
      die promissory Note.

            

    

    

    
      	
               
      

            	
              B.

            	
              Each
      payment will be applied first to interest accrued to the dare of receipt
      of each payment, and the balance if any, will be applied to
      principal.

            

    

    

    
      	
               
      

            	
              C.

            	
              Each
      payment will be made when due even if at that time the mil amount of the
      Loan has not yet been advanced or the authorized amount of the Loan has
      been reduced.

            

    

    

    
      	
               
      

            	
              D.

            	
              Interest
      will accrue only on funds actually advanced from the date(s) of each
      advance.

            

    

    

    2.           COLLATERAL

    

    Borrower
will provide the following collateral:

    

    
      	
               
      

            	
              A.

            	
              Security
      Interest in machinery and
      equipment, excluding automotive, now owned, hereafter acquired, or
      purchased in whole or in part from the proceeds of this Loan, and/or the
      proceeds of any disposition
thereof.

            

    

    

    3.           GUARANTEE

    

    
      	
               
      

            	
              Borrower
      will provide the following
guarantee(s):

            

    

    

    
      	
               
      

            	
              A.

            	
              Guarantor
      will provide a guarantee on SBA Form 2128 of Steven M.
      Rhodes of 2120 Hidden Pine
      Lane. Apopka, Florida
      32712, secured by the following
  collateral:

            

    

    

    
      	
               
      

            	
              (1)

            	
              Deed
      of Trust/Mortgage on real estate located at 2120 Hidden Pine
      Lane Apopka. Florida 32712. Said Deed of Trust/Mortgage to be
      subject only to the following:

            

    

    

    
      	
               
      

            	
              (a)

            	
              Trust
      Deed/Mortgage held by Bank of America, Post
      Office Box I7018. Baltimore. Maryland 21297 with a current
      approximate balance of $105.000-00.

            

    

    

    
      	
              B.

            	
              Guarantor
      will provide a guarantee on SBA Form 2129 of Vicki L. Rhodes
      of 2120 Hidden
      Pine Lane, Apopka, Florida 32712, limited to the Guarantor’s
      interest in, and secured by, the following
  collateral:

            

    

    

    
      	
               
      

            	
              (1)

            	
              Deed
      of Trust/Mortgage on real estate located at 2120 Hidden Pine Lane.
      Apopka. Florida 32712. Said Deed of Trust/Mortgage to be subject
      only to the following;

            

    

    

    
      	
               
      

            	
              (a)

            	
              Trust
      Deed/Mortgage held by Bank of America, Post
      Office Box 17018 Baltimore. Maryland 21297 with a current
      approximate balance of $105,000.00.

            

    

     

     

     

    
 

    SBA Form
1391
(5.00)                                                      9TFL-00512                                Page
1

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    4.           REQUIREMENTS
RELATIVE TO COLLATERAL

    

    
      	
               
      

            	
              A.

            	
              Borrower
      will submit to SBA evidence of SBA’s recorded lien position and of payment
      of appropriate fees prior to the disbursement of Loan funds in excess of
      $5,000.00. Such evidence will be in a form satisfactory to SBA Counsel and
      will be at Borrower’s expense.

            

    

    

    
      	
               
      

            	
              B.

            	
              Borrower
      will not sell or transfer any collateral (except normal inventory turnover
      in the ordinary course of business) described in paragraph 2 hereof
      without the prior written consent of
SBA.

            

    

    

    
      	
               
      

            	
              C.

            	
              Borrower
      will neither seek nor accept future advances under any superior liens on
      the collateral securing this Loan without prior written consent of
      SBA.

            

    

    

    5.           USE OF
LOAN PROCEEPS

    

    Borrower
will use the proceeds of this Loan solely to alleviate economic injury caused by
Disaster occurring in the month of September. 2001.
Borrower will apply all Loan proceeds to the following specific
uses:

    

    A.           Approximately
$253,400.00 for
working capital.

    

    6.           REQUIREMENTS FOR USE OF LOAN
PROCEEDS AND RECEIPTS

    

    
      	
               
      

            	
              A.

            	
              Borrower
      will obtain and itemize receipts (paid receipts, paid invoices or
      cancelled checks) and contracts for all Loan funds spent and retain these
      receipts for 3 years from the date of the final disbursement. Prior to
      each subsequent disbursement (if any) and whenever requested by SBA,
      Borrower will submit to SBA such itemization together with copies of the
      receipts.

            

    

    

    
      	
               
      

            	
              B.

            	
              Borrower
      will make the damaged, repaired or replacement property(ies) available to
      SBA for inspection and verification of the use of Loan proceeds when so
      requested.

            

    

    

    
      	
               
      

            	
              C.

            	
              Borrower
      will return to SBA, as soon as possible but not later than 1 year from the
      date of final disbursement, all funds received but not used for disaster
      repairs as authorized by the above paragraph. Funds so returned will be
      used to reduce the outstanding balance of this Loan and will not be
      applied in lieu of scheduled
payments.

            

    

    

    
      	
               
      

            	
              D.

            	
              Borrower
      will not use any proceeds of this Loan to pay wages or any other
      compensation for repair work performed by Borrower or members of
      Borrower’s immediate family, or to pay overhead or profit for repairs
      performed by, or materials acquired from, a business in which Borrower
      owns a 50% or greater interest.

            

    

    

    
      	
               
      

            	
              E.

            	
              Borrower
      will not use, directly or indirectly, any portion of the proceeds of this
      Loan to relocate without the prior written permission of SBA. The law
      prohibits the use of any portion of the proceeds of this Loan for
      voluntary relocation from the business area in which the disaster
      occurred. To request SBA’s prior written permission to relocate, Borrower
      will present to SBA the reasons therefore and a description or address of
      the relocation site. Determinations of (1) whether a relocation is
      voluntary or otherwise, and (2) whether any site other than the
      disaster-affected location is within the business area in which the
      disaster occurred, will be made solely by
SBA.

            

    

    

    
      	
               
      

            	
              F.

            	
              Borrower
      will, to the extent feasible, purchase only American-made equipment and
      products with the proceeds of this
Loan.

            

    

    

    7.           DEADLINE
FOR RETURN OF LOAN CLOSING DOCUMENTS

    

    Loan
closing documents must be signed and returned to SBA within 2 months from the
date of this Loan Authorization and Agreement. SBA will cancel this Loan if
Borrower fails to meet this deadline. If causes beyond the control of the
Borrower result in delay which prevents meeting the deadline, Borrower may
submit a written explanation of the delay and request for an extension of this
deadline. The deadline may be extended only by SBA in writing.

     

    
 

    

    SBA Form
1391
(5.00)                                                      9TFL-00512                                Page
2

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    
      	
              8.

            	
              AGREEMENT
      TO REMIT AND ASSIGNMENT OF COMPENSATION FROM OTHER
      SOURCES

            

    

    

    
      	
               
      

            	
              A.

            	
              Eligibility
      for this disaster Loan is limited to disaster losses that are not
      compensated by other sources. Other sources include but are not limited
      to: (l) proceeds of policies of insurance or other indemnifications, (2)
      grants or other reimbursement (including loans) from government agencies
      or private organizations, (3) claims for civil liability against other
      individuals, organizations or governmental entities, and (4) salvage
      (including any sale or re-use) of items of damaged
    property.

            

    

    

    
      	
               
      

            	
              B.

            	
              Borrower
      will promptly notify SBA of the existence and status of any claim or
      application for such other compensation, and of the receipt of any such
      compensation, and Borrower will promptly submit the proceeds of same (not
      exceeding the outstanding balance of this Loan) to
  SBA.

            

    

    

    
      	
               
      

            	
              C.

            	
              Borrower
      hereby assigns to SBA the proceeds of any such compensation from other
      sources and authorizes the payor of same to deliver said proceeds to SBA
      at such time and place as SBA shall
designate.

            

    

    

    
      	
               
      

            	
              D.

            	
              SBA
      will in its sole discretion determine whether any such compensation from
      other sources is a duplication of benefits. SBA will use the proceeds of
      any such duplication to reduce the outstanding balance of this Loan, and
      Borrower agrees that such proceeds will not be applied in lieu of
      scheduled payments.

            

    

    

    9.           DUTY TO
MAINTAIN INSURANCE

    

    
      	
               
      

            	
              A.

            	
              Prior
      to disbursement of Loan funds in excess of $5,000.00, Borrower will
      purchase hazard insurance, including fire, lightning, and extended
      coverage equal to 80% of the insurable value of the collateral or the
      minimum coinsurance requirement set forth in the insurance policy provided
      by Borrower, whichever is greater, or such other amounts and types of
      coverage as SBA may require. Borrower will provide proof of such hazard
      insurance coverage to SBA together with an endorsement naming SBA as
      mortgagee or loss payee, and Borrower will maintain such coverage
      throughout the entire term of this
Loan.

            

    

    

    10.           BOOKS AND
RECORDS

    

    
      	
               
      

            	
              A.

            	
              Borrower
      will maintain current and proper books of account in a manner satisfactory
      to SBA for the most recent 5 years until 3 years after the date of
      maturity, including extensions, or the date this Loan is paid in full,
      whichever occurs first. Such books will include Borrower’s financial and
      operating statements, insurance policies, tax returns and related filings,
      records of earnings distributed and dividends paid and records of
      compensation to officers, directors, holders of 10% or more of Borrower’s
      capital stock, members, partners and
  proprietors.

            

    

    

    
      	
               
      

            	
              B.

            	
              Borrower
      authorizes SBA to make or cause to be made, at Borrower’s expense and in
      such a manner and at such times as SBA may require: (1) inspections and
      audits of any books, records and paper in the custody or control of
      Borrower or others relating to Borrower’s financial or business
      conditions, including the making of copies thereof and extracts therefrom,
      and (2) inspections and appraisals of any of Borrower’s
      assets.

            

    

    

    
      	
               
      

            	
              C.

            	
              Borrower
      will furnish to SBA, not later than 3 months following the expiration of
      Borrower’s fiscal year and in such form as SBA may require, Borrower’’
      financial operating statements.

            

    

    

    
      	
               
      

            	
              D.

            	
              Upon
      written request of SBA, Borrower will accompany such statements with an
      “Accountant’s Review Report” prepared by an independent public accountant
      at Borrower’s expense.

            

    

    

    
      	
              E.  

            	
              Borrower
      authorizes all Federal. State and municipal authorities to furnish reports
      of examination, records and other information relating to the conditions
      and affairs of Borrower and any desired information from such reports,
      returns, file?, and records of such authorities upon request of
      SBA.

            

    

     

     

     

    
 

    SBA Form
1391
(5.00)                                                      9TFL-00512                                Page
3

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    11.           DISTRIBUTIONS
AND COMPENSATION

    

    
      	
               
      

            	
              A.

            	
              Borrower
      will not, without the prior written consent of SBA, declare or pay any
      dividend or make any distribution upon its capital stock, or purchase or
      retire any of its capital stock, or consolidate, or merge with any other
      company, or give any preferential treatment, make any advance, directly or
      indirectly, by way of Loan, gift, bonus, or otherwise, to any company
      directly or indirectly controlling or affiliated with or controlled by
      Borrower, or any other company, or to any officer, director or employee of
      Borrower, or of any such company.

            

    

    

    12.           CONDITIONS
RELATIVE TO LEASED PREMISES

    

    
      	
               
      

            	
              A.

            	
              Prior
      to disbursement of Loan funds in excess of $5,000.00, Borrower will obtain
      and submit in a form satisfactory to SBA a landlord’s waiver covering the
      Borrower’s leased premises. Said waiver must allow SBA free access to such
      leased premises in case of default or forclosure in order to remove those
      items covered in the Security Interest(s) referred to in Paragraph 2
      hereof.

            

    

    

    13.           OTHER
CONDITIONS

    

    
      	
               
      

            	
              A.

            	
              If
      Borrower has or intends to have employees. Borrower will pose SBA Form
      722. “Equal Opportunity Poster”, in Borrower’s place of business where it
      will be clearly visible to employees, applicants for employment, and the
      general public.

            

    

    

    
      	
               
      

            	
              B.

            	
              Prior
      to disbursement of any Loan funds. Borrower will execute and submit Board
      of Directors1
      Resolution on SBA Form 160.

            

    

    

    
      	
               
      

            	
              C.

            	
              Prior
      to disbursement of any Loan proceeds. Borrower will complete the
      Certification Concerning Lobbying and the Disclosure of Lobbying
      Activities (if appropriate), and submit the required document(s) to SBA
      (for Loans in excess of $150,000).

            

    

    

    14.           BORROWER’S
CERTIFICATIONS

    

    Borrower
certifies that;

    

    
      	
               
      

            	
              A.

            	
              There
      has been no substantial adverse change in Borrower’s financial condition
      (and organization, in case of a business borrower) since the date of the
      application for this Loan. (Adverse changes include, but are not limited
      to: judgment liens, tax liens, mechanic’s liens, bankruptcy, financial
      reverses, arrest or conviction of felony,
etc.)

            

    

    

    
      	
               
      

            	
              B.

            	
              No
      fees have been paid, directly or indirectly, to any representative
      (attorney, accountant, ere.) for services provided or to be provided in
      connection with applying for or closing this Loan other than those
      reported on SBA Form 5, “Business Disaster Loan Application”; or SBA Form
      159, “Compensation Agreement.” All fees not approved by SBA are
      prohibited.

            

    

    

    
      	
               
      

            	
              C.

            	
              All
      representations in the Borrower’s Loan application (including all
      supplementary submissions) are true, correct and complete and are offered
      to induce SBA to make this Loan.

            

    

    

    
      	
               
      

            	
              D.

            	
              No
      claim or application for any other compensation for disaster losses has
      been submitted to or requested of any source, and no such other
      compensation has been received, other than that which Borrower has fully
      disclosed to SBA.

            

    

    

    
      	
               
      

            	
              E.

            	
              Neither
      the Borrower nor, if the Borrower is a business, any principal who owns at
      least 50% of the Borrower, is delinquent more than 60 days under the terms
      of any: (a) administrative order; (b) court order; or (c) repayment
      agreement that requires payment of child
  support.

            

    

    

    
      	
              F.  

            	
              The
      Borrower(s) arc the owner(s) of and hold legal title to certain real
      estate property fully described in Section 2--Collateral. Said premises
      are in my/our possession, and my/our title thereto has never been disputed
      or questioned as to any part thereof. Said premises are free of all
      mortgages, taxes, assessments, liens, encumbrances, and claims, or
      interest of any other parry, except as listed in Section 2 of this
      document. There are no actions pending affecting said real
      property,

            

    

     

     

     

    
 

    SBA Form
1391
(5.00)                                                      9TFL-00512                                Page
4

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    15.           CIVIL AND
CRIMINAL PENALTIES

    

    
      	
               
      

            	
              A.

            	
              Criminal
      Penalties: Any person who knowingly makes a false statement or
      misrepresentation to SBA shall be subject to a fine of not more than
      $10,000,00 or to imprisonment for not more than 5 years, or both, under
      provisions of 18 U’.S.C. 1001 and/or 15 U.S.C.
  645.

            

    

    

    
      	
               
      

            	
              B.

            	
              Civil
      Penalties: Public Law 92-385 provides that for all disaster Loans
      made after August 16, 1972, anyone who wrongfully misapplies the proceeds
      of a disaster Loan shall be civilly liable to the Administrator in an
      amount equal to one and one-half times the original principal amount of
      the Loan.

            

    

    

    16.           RESULT OF
VIOLATION OF THIS LOAN AUTHORIZATION AND AGREEMENT

    

    
      	
               
      

            	
              A.

            	
              If
      Borrower violates any of the terms or conditions of this Loan
      Authorization and Agreement, the Loan will be in default and SBA may
      declare all or any part of the indebtedness immediately due and payable.
      SBA’s failure to exercise its rights under this paragraph will not
      constitute a waiver.

            

    

    

    
      	
               
      

            	
              B.

            	
              A
      default (or any violation of any of the terms and conditions) of any SBA
      Loan(s) to Borrower and/or its affiliates will be considered a default of
      all such Loan(s).

            

    

    

    17.           DISBURSEMENT
OF THE LOAN

    

    
      	
               
      

            	
              A.

            	
              Disbursements
      will be made by and at the discretion of SBA Counsel, in accordance with
      this Loan Authorization and Agreement and the general requirements of
      SBA,

            

    

    

    
      	
               
      

            	
              B.

            	
              Disbursements
      may be made in increments as
needed.

            

    

    

    
      	
               
      

            	
              C.

            	
              Other
      conditions may be imposed by SBA pursuant to general requirements of
      SBA.

            

    

    

    
      	
               
      

            	
              D.

            	
              Disbursement
      may be withheld if, in SBA’s sole discretion, there has been an adverse
      change in Borrower’s financial condition or in any other material fact
      represented in the Loan application or if Borrower fails to meet any of
      the terms or conditions of this Loan Authorization and
      Agreement.

            

    

    

    
      	
               
      

            	
              E.

            	
              NO DISBURSEMENT WILL BE MADE
      LATER THAN 6 MONTHS FROM THE DATE OF THIS LOAN AUTHORIZATION AND
      AGREEMENT.

            

    

    

    18.           PARTIES
AFFECTED

    

    
      	
               
      

            	
              A.

            	
              This
      Loan Authorization and Agreement will be binding upon Borrower and
      Borrower’s successors and assigns and will inure to the benefit of SBA and
      its successors and assigns.

            

    

    

     

     

     

     

    SBA Form
1391
(5.00)                                                      9TFL-00512                                Page
5

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    19.           DATE

    

    
      	
               
      

            	
              A.

            	
              This
      Loan Authorization and Agreement is approved and issued on December 19.
      2001.

            

    

    

    Hector V.
Barreto

    

    Administrator

    

    

    Brent
Dowdle

    Supervisory
Loan Officer

    U.S.
Small Business Administration

    

    The
undersigned agree(s) to be bound by the terms and conditions herein during the
term of this Loan, and further agree(s) that no provision stated herein will be
waived without prior written consent of SBA.

    

    Crystal
Magic, Inc.

    

    By: /s/ Steven M. Rhodes

    

    Steven M.
Rhodes,
President                                                              Date: 12/19/01

    

    By: /s/ Steven M. Rhodes

    

    Steven M.
Rhodes,
President                                                              Date: 12/19/01

    

    

    Note:                      Corporate
Borrowers must execute Loan Authorization and Agreement in corporate name by a
duly authorized officer, and seal must be affixed and duly attested; partnership
Borrowers must execute in firm name, together with signature of a general
partner. Limited liability entities must execute in the entity name by the
signature of the authorized managing person.

    

     

     

     

    SBA Form
1391
(5.00)                                                      9TFL-00512                                Page
6Unassociated Document

    
          Exhibit 10.12

     

      
        Small
Business Administration

      

      U.S.
Small Business Administration

      

      AUTHORIZATION

      (SBA
GUARANTEED LOAN)

      

      

      
        

      

      

      
        	
                SBA
      Loan #

              	
                PLP
      399-356-4007

              
	
                SBA
      Loan Name

              	
                Crystal
      Magic, Inc.

              
	
                Approval
      Date

              	
                10/05/00

              

      

      

      Lender:                                                      U.
S. Small Business Administration (SBA):

      

      Liberty
National
Bank                                                      North
Florida District Office

      502 N.
Highway
17-92                                               
       7825 Baymeadows Way - Suite
100-B

      Longwood,
FL
32750                                               
        Jacksonville, FL
32256-7504

      

      SBA
approves, under Section 7(a) of the Small Business Act as amended. Lender’s,
application, received 10/04/00, for SBA to guarantee 75% of a loan (“Loan”) in
the amount of $300,000.00 to assist;

      

      Borrower;

      1.      Crystal
Magic, Inc.

       2120 Hidden Pine
Lane

       Apopka, FL 32712

      

      All
requirements in the Authorization which refer lo Borrower also apply to any
Co-Borrower.

      

      
        	
                A.

              	
                THE GUARANTEE FEE IS
      $562.50. Lender must pay the guarantee fee prior to SBA signing
      this Authorization. Any Lender with authority to sign this Authorization
      on behalf of SBA certifies that it has paid the guarantee fee to the Small
      Business Administration, prior to signing this Authorization. No guarantee
      exists if Lender has not timely paid the guarantee fee in full. SBA will
      not refund the guarantee payment of the guarantee fee is not contingent
      upon disbursement. Lender may collect this fee from Borrower upon receipt
      by Lender of the Authorization Borrower Denver, CO 80259-0001. The
      remittance check should show the Loan number. No part of the guarantee fee
      is refundable if Lender has made any disbursement. Lender may collect this
      fee from Borrower after initial disbursement of Loan. Borrower may use
      Loan proceeds to reimburse Lender for the guarantee
  fee.

              

      

      

      
        	
                B.

              	
                ONGOING SERVICING FEE -
      Lender agrees to pay an ongoing fee equal to one-half of one percent per
      year of the guaranteed portion of the outstanding balance. Lender may not
      charge this fee to Borrower.

              

      

      

      
        	
                C.

              	
                IT IS LENDER’S SOLE
      RESPONSIBILITY TO:

              

      

      

      
        	
                 
      

              	
                1.

              	
                Close
      the Loan in accordance with the terms and conditions of this
      Authorization.

              

      

      

      
        	
                 
      

              	
                2.

              	
                Obtain
      valid and enforceable Loan documents, including obtaining the signature or
      written consent of any obligor’s spouse if such consent or signature is
      necessary to bind the marital community or create a valid lien on marital
      property.

              

      

      

       

       

       

      SBA Loan
Number: PLP
399-236-4004                                                                                                                    Page
1

      SBA Loan
Name: .Crystal Magic,
Inc.                                                                                                         (7a
Wizard 3.0)

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                3.

              	
                Retain
      all Loan closing documents. Lender must submit these documents, along with
      other required documents, to SBA for review if Lender requests SBA to
      honor its guarantee on the Loan, or at any time SBA requests the documents
      for review.

              

      

      

      D.           REQUIRED FORMS

      

      
        	
                 
      

              	
                1.

              	
                Lender
      may use its own forms except as otherwise instructed in this
      Authorization. Lender must use the following SBA forms for the
      Loan:

              

      

      

      SBA Form
147, Note

      SBA Form
1050, Settlement Sheet, for each disbursement

      SBA Form
159, Compensation Agreement, for each representative

      SBA Form
2004, Lender’s Certification

      SBA Form
722, Equal Opportunity Poster

      SBA Form
793, Notice to New Borrowers

      

      
        	
                 
      

              	
                2.

              	
                Lender
      may use computer-generated versions of mandatory SBA Forms, as long as
      these versions are exact
reproductions.

              

      

      

      
        	
                 
      

              	
                3.

              	
                Lenders
      must submit completed SBA Forms 159 and 2004 for non-PLP loans to the SBA
      immediately after final
disbursement.

              

      

      

      
        	
                E.

              	
                CONTINGENCIES - SBA
      issues this Authorization in reliance on representations in the Loan
      application, including supporting documents. The guarantee is contingent
      upon Lender:

              

      

      

      
        	
                 
      

              	
                1.

              	
                Having
      and complying with a valid SBA Loan Guarantee Agreement (SBA Form 750 or
      SBA Form 750B for short-term loans) and any required supplemental
      guarantee agreements, between Lender and
SBA;

              

      

      

      
        	
                 
      

              	
                2.

              	
                Complying
      with the current SBA Standard Operating Procedures
  (SOP);

              

      

      

      
        	
                 
      

              	
                3.

              	
                Making
      initial disbursement of the Loan no later than 3 months, and completing
      disbursement no later than 6 months, from the date of this Authorization,
      unless SBA extends the time in
writing;

              

      

      

      
        	
                 
      

              	
                4.

              	
                Having
      no evidence since the date of the Loan application, or any preceding
      disbursement, of any unremedied adverse change in the financial condition,
      organization, operations, or fixed assets of Borrower which would warrant
      withholding or not making any further disbursement,
  and;

              

      

      

      
        	
                 
      

              	
                5.

              	
                Satisfying
      all of the conditions in this
Authorization.

              

      

       

       

       

       

      SBA Loan
Number: PLP
399-356-4004                                                                                                                    Page
2

      SBA Loan
Name: .Crystal Magic,
Inc.                                                                                                         (7a
Wizard 3.0)

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      F.      NOTE TERMS:

      

      1.      Maturity: This Note will
mature in 1 years from date of Note.

      

      
        	
                 
      

              	
                2.

              	
                Repayment Terms: Lender
      must insert onto SBA Note, Form 147, to be executed by Borrower, the
      following repayment terms, without modification. Lender must complete all
      blank terms on the Note at time of
closing:

              

      

      

      The
interest rate on this Note will fluctuate. The initial interest rate is 11.50%
per year. This initial rate is the prime rate on the date SBA received the loan
application, plus 2.00%.

      

      Borrower
must pay three payments of interest only on the disbursed principal balance
beginning one month from the month this Note is dated and every month
thereafter payment must be made on the first calendar day in the month it is
due.

      

      Borrower
must pay principal and interest payments of $28,866.00 every month,
beginning four months from the month this Note is dated;
payments must be made on the first calendar day in the months they are
due.

      

      Lender
will apply each installment payment first to pay interest accrued to the day
Lender receives the payment, then to bring principal current, then to pay any
late fees, and will apply any remaining balance to reduce
principal.

      

      The
interest rate will be adjusted every calendar quarter (the “change
period”).

      

      The
“Prime Rate” is the prime rate in effect on the first business day of the
quarter in which a change occurs, as published in the Wall Street Journal
on the next business day.

      

      The
adjusted interest rate will be 2.00% above the Prime Rate. Lender will adjust
the interest rate on the first calendar day of each change period. The change in
interest rate is effective on that day whether or not Lender gives Borrower
notice of the change. The initial rate must remain in effect until the first
change period begins.

      

      Lender
must adjust the payment amount at least annually as needed to amortize principal
over the remaining term of the note.

      

      If SBA
purchases the guaranteed portion of the unpaid principal balance, the interest
rate becomes fixed at the rate in effect at the time of the earliest uncured
payment default. If there is no uncured payment default, the rate becomes fixed
at the rate in effect at the time of purchase.

      

      All
remaining principal and accrued interest is due and payable 1 years from date of
Note.

      

      Late
Charge: If a payment on this Note is more than 10 days late. Lender may charge
Borrower a late fee of up to 5% of the unpaid portion of the regularly scheduled
payment.

      

      G.           USE OF PROCEEDS

       

      
        

        
          	
                  1.  

                	
                  $210,000.00
      to purchase equipment.

                

        

         

      

      
        	
                2.  

              	
                $45,000.00
      to purchase inventory.

              

      

      

      
        	
                3.  

              	
                $45,
      000.00 for working capital

              

      

      

      
         

         

         

      

      SBA Loan
Number: PLP
399-356-4004                                                                                                                    Page
3

      SBA Loan
Name: .Crystal Magic,
Inc.                                                                                                         (7a
Wizard 3.0)

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Lender
may not disburse Loan proceeds solely to pay the guarantee fee. Lender may
disburse to Borrower, as working capital only, funds not spent for the listed
purposes as long as these funds do not exceed 10% of the specific purpose
authorized or $l0,000.00, whichever is less. An Eligible Passive Company may not
receive working capital funds.

      

      Lender
must complete SBA Form 1050. Settlement Sheet, for each disbursement and retain
these forms in its Loan file.

      

      H.           COLLATERAL
CONDITIONS

      

      Lender
must obtain a lien on 100% of the interests in the following collateral and
properly perfect all lien positions:

      

      
        	
                 
      

              	
                1.

              	
                First Perfected Security
      Interest, subject to no other liens, in the following personal
      property (including any proceeds and products), whether now owned
      or later acquired, wherever located: Equipment; Fixtures; Inventory,
      Accounts; Instruments; Chattel Paper, General
  Intangibles;

              

      

      

      
        	
                 
      

              	
                a.

              	
                Lender
      must obtain a written agreement from all Lessors (including sublessors)
      agreeing .to: (I) Subordinate to Lender Lessor’s interest, if any, in this
      property; (2) Provide Lender written notice of default and reasonable
      opportunity to cure the default; and (3) Allow Lender the right to take
      possession and dispose of or remove the
  collateral.

              

      

      

      
        	
                 
      

              	
                b.

              	
                Lender
      must obtain a list of all equipment and fixtures that are collateral for
      the Loan. For items with a unit value of $500 or more, the list must
      include a description and serial number, if
  applicable.

              

      

      

      
        	
                c.  

              	
                Lender
      must obtain an appropriate Uniform Commercial Code lien search evidencing
      all required lien positions. If UCC search is not available, another type
      of lien search maybe substituted.

              

      

      

      The
following language must appear in all lien instruments including Mortgages,
Deeds of Trust, and Security Agreements;

      

      “The
Loan secured by this lien was made under a United Stales Small Business
Administration (SBA) nationwide program which uses tax dollars to assist small
business owners. If the United States is seeking to enforce this document, then
under SBA regulations”

      

      
        	
                 
      

              	
                a)

              	
                When
      SBA is the holder of the Note, this document and all documents evidencing
      or securing this Loan will be construed in accordance with federal
      law.

              

      

      

      
        	
                 
      

              	
                b)

              	
                Lender
      or SBA may use local or state procedures for purposes such as filing
      papers, recording documents, giving notice, foreclosing liens, and other
      purposes. By using these procedures, SBA does not waive any federal
      immunity from local or state control, penalty, tax or liability. No
      Borrower or Guarantor may claim or assert against SBA any local or state
      law to deny any obligation of Borrower, or defeat any claim of SBA with
      respect to this Loan.

              

      

      

      Any
clause in this document requiring arbitration is not enforceable when SBA is the
holder of the Note secured by this instrument.”

       

       

       

       

      SBA Loan
Number: PLP
399-356-4004                                                                                                                    Page
4

      SBA Loan
Name: .Crystal Magic,
Inc.                                                                                                         (7a
Wizard 3.0)

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      I.      ADDITIONAL
CONDITIONS

      

      1.      Insurance
Requirements

      

      Prior to
disbursement. Lender must require Borrower to obtain the following insurance
coverage and maintain this coverage for the life of Loan;

      

      
        	
                 
      

              	
                a.

              	
                Personal Property Hazard
      Insurance coverage on all equipment, fixtures or inventory that is
      collateral for the Loan, in the amount of full replacement costs. If full
      replacement cost insurance is not available, coverage should be for
      maximum insurable value. This policy must contain a LENDER’S LOSS PAYABLE
      CLAUSE in favor of Lender. This clause must provide that any act or
      neglect of the debtor or owner of the insured property will not invalidate
      the interest of Lender. The policy or endorsements must provide for at
      least 10 days prior written notice to Lender of policy
      cancellation.

              

      

      

      
        	
                 
      

              	
                b.

              	
                Life Insurance,
      satisfactory to Lender

              

      

      
        	
                 
      

              	
                (1)

              	
                on
      the life of Steven M. Rhodes in the amount of
    $1,000,000.00.

              

      

      

      Lender
must obtain a collateral assignment of each policy with Lender as assignee which
provides that Insurer will give Lender at least 30 days written notice of
payment default and a right to cure. Lender must also obtain acknowledgment of
the assignment by the Home Office of the Insurer.

      

      
        	
                 
      

              	
                c.

              	
                Liability Insurance in
      an amount and with an insurance company satisfactory to
      Lender.

              

      

      

      
        	
                 
      

              	
                d.

              	
                Workers’ Compensation
      Insurance in an amount meeting state law requirements and with an
      insurance company satisfactory to
Lender.

              

      

      

      
        	
                 
      

              	
                2.

              	
                Borrower, Guarantor and
      Operating Company Documents

              

      

      

      
        	
                 
      

              	
                a.

              	
                Prior
      to closing, Lender must obtain from Borrower, Guarantor and Operating
      Company a current copy of each of the following as
      appropriate:

              

      

      

      
        	
                 
      

              	
                (1)

              	
                Corporate Documents -
      Articles or Certificate of Incorporation (with amendments), any By-laws,
      Certificate of Good Standing (or equivalent), Corporate Borrowing
      Resolution, and, if a foreign corporation, current authority to do
      business within this state.

              

      

      

      
        	
                 
      

              	
                (2)

              	
                Limited Liability Company (LLC)
      Documents - Articles of Organization (with amendments), Fact
      Statement or Certificate of Existence, Operating Agreement, Borrowing
      Resolution, and evidence of registration with the appropriate
      authority.

              

      

      

      
        	
                 
      

              	
                (3)

              	
                General Partnership
      Documents - Partnership Agreement, Certificate as to Partners, and
      Certificate of Partnership or Good Standing (or equivalent), as
      applicable.

              

      

      

      
        	
                 
      

              	
                (4)

              	
                Limited Partnership
      Documents - Partnership Agreement, Certificate as to Partners, and
      Certificate of Partnership or Good Standing (or equivalent), as
      applicable, Certificate of Limited Partnership, and evidence of
      registration with the appropriate
authority.

              

      

      

      
        	
                 
      

              	
                (5)

              	
                Limited Liability Partnership
      (LLP) Documents - Partnership Agreement, Certificate as to
      Partners, Certificate of Partnership or Good Standing (or equivalent) as
      applicable, and evidence of registration with the appropriate
      authority.

              

      

       

       

       

       

      SBA Loan
Number: PLP
399-356-4004                                                                                                                    Page
5

      SBA Loan
Name: .Crystal Magic,
Inc.                                                                                                         (7a
Wizard 3.0)

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                (6)

              	
                Trustee Certification -
      A Certificate from the trustee warranting
that:

              

      

      
        	
                 
      

              	
                (a)

              	
                The
      trust will not be revoked or substantially amended for the term of the
      Loan without the consent of SBA;

              

      

      
        	
                 
      

              	
                (b)

              	
                The
      trustee has authority to act;

              

      

      
        	
                 
      

              	
                (c)

              	
                The
      trust has the authority to borrow funds, guarantee loans, and pledge trust
      assets;

              

      

      
        	
                 
      

              	
                (d)

              	
                If
      the trust is an Eligible Passive Company, the trustee has authority to
      lease the property to the Operating
Company;

              

      

      
        	
                 
      

              	
                (e)

              	
                There
      is nothing in the trust agreement that would prevent Lender from realizing
      on any security interest in trust
assets;

              

      

      
        	
                 
      

              	
                (f)

              	
                The
      trust agreement has specific language confirming the above;
      and

              

      

      
        	
                 
      

              	
                (g)

              	
                The
      trustee has provided and will continue to provide SBA with a true and
      complete list of all trustors and
donors.

              

      

      
        	
                 
      

              	
                (7)

              	
                Trade Name –
      Documentation that Borrower has complied with state requirements for
      registration of Borrower’s trade name (or fictitious name), if one is
      used.

              

      

      

      3.      Operating
Information

      

      Prior
to any disbursement of Loan proceeds, Lender must obtain;

      

      
        	
                 
      

              	
                a.

              	
                Verification of Financial
      Information - Lender must submit IRS Form 4506 to the Internal
      Revenue Service to obtain federal income tax information on Borrower or,
      if the Borrower is an EPC, then the Operating Company for the last 3 years
      (unless Borrower or Operating Company is a start-up business). If the
      business has been operating for less than 3 years, lender must obtain the
      information for all years in operation. This requirement does not include
      tax information for the most recent fiscal year if the fiscal year-end is
      within 6 months of the application date. Lender must compare the tax data
      received from the IRS with the financial data or tax returns submitted
      with the Loan application, and relied upon in approving the Loan. Borrower
      must resolve any significant differences to the satisfaction of Lender and
      SBA, Failure to resolve differences may result in cancellation of the
      Loan.

              

      

      

      
        	
                 
      

              	
                b.

              	
                If
      Lender has not submitted IRS Form 4506 prior to the date of this
      Authorization, it must submit the Form no later than 10 business days from
      this date. If the Lender does not receive a response from the IRS within
      10 business days of submitting the SBA version of IRS Form 4506, then
      Lender may disburse prior to completing this verification. At the time the
      information is received, Lender must still perform the verification and
      resolve any significant differences discovered, even if the loan is fully
      disbursed.

              

      

      

      
        	
                 
      

              	
                c.

              	
                Authority to Conduct
      Business - Evidence that the Borrower has an Employer
      Identification Number and all insurance, licenses, permits and other
      approvals necessary to lawfully operate the
  business.

              

      

      

      
        	
                 
      

              	
                d.

              	
                Flood Hazard
      Determination - A completed Standard Flood Hazard Determination
      (FEMA Form 81-93).

              

      

      

      
        	
                 
      

              	
                e.

              	
                Lease - Current lease(s)
      on all business premises where collateral is located with term, including
      options, at least as long as the term of the
  Loan.

              

      

      

      
        	
                4.

              	
                Certifications and
      Agreements

              

      

      

      a.      Lender
must require Borrower to certify that:

       

       

       

       

      SBA Loan
Number: PLP
399-356-4004                                                                                                                    Page
6

      SBA Loan
Name: .Crystal Magic,
Inc.                                                                                                         (7a
Wizard 3.0)

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                (1)

              	
                Receipt of Authorization
      - Borrower has received a copy of this Authorization and SEA Form 793,
      Notice to New SBA Borrower, from Lender; and acknowledges
      that:

              

      

      
        	
                 
      

              	
                (a)

              	
                The
      Authorization is not a
      commitment by Lender to make a loan to
Borrower;

              

      

      
        	
                 
      

              	
                (b)

              	
                The
      Authorization is between Lender and SBA and creates no third party rights
      or benefits to Borrower;

              

      

      
        	
                 
      

              	
                (c)

              	
                The
      Note will require Borrower to give Lender prior notice of intent to
      prepay.

              

      

      
        	
                 
      

              	
                (d)

              	
                If
      Borrower defaults on Loan, SBA may be required to pay Lender under the SBA
      guarantee. SBA may then seek recovery of these funds from Borrower. Under
      SBA regulations, 13 CFR Part 101, Borrower may not claim or assert against
      SBA any immunities or defenses available under local law to defeat, modify
      or otherwise limit Borrower’s obligation to repay to SBA any funds
      advanced by Lender to Borrower.

              

      

      
        	
                 
      

              	
                (e)

              	
                Payments
      by SBA to Lender under SBA’s guarantee will not apply to the Loan account
      of Borrower, or diminish the indebtedness of Borrower under the Note or
      the obligations of any personal guarantor of the
  Note,

              

      

      

      
        	
                 
      

              	
                (2)

              	
                Child Support - No
      principal who owns at least 50% of the ownership or voting interest of the
      company is delinquent more than 60 days under the terms of any (a)
      administrative order, (b) court order, or (c) repayment agreement
      requiring payment of child support.

              

      

      

      
        	
                 
      

              	
                (3)

              	
                Current Taxes - Borrower
      is current on all federal, state, and local taxes, including but not
      limited to income taxes, payroll taxes, real estate taxes, and sales
      taxes.

              

      

      

      
        	
                 
      

              	
                b.

              	
                Lender
      must require Borrower to certify that it
will:

              

      

      
        	
                 
      

              	
                (1)

              	
                Reimbursable
      Expenses-Reimburse Lender for expenses incurred in the making and
      administration of the Loan.

              

      

      
        	
                 
      

              	
                (2)

              	
                Books, Records, and
      Reports.

              

      

      
        	
                 
      

              	
                (a)

              	
                Keep
      proper books of account in a manner satisfactory to
  Lender;

              

      

      
        	
                 
      

              	
                (b)

              	
                Furnish
      year-end statements to Lender within 120 days of fiscal year
      end;

              

      

      
        	
                 
      

              	
                (c)

              	
                Furnish
      additional financial statements or reports whenever Lender requests
      them;

              

      

      
        	
                 
      

              	
                (d)

              	
                Allow
      Lender or SBA, at Borrower’s expense,
to:

              

      

      
        	
                 
      

              	
                [1]

              	
                Inspect
      and audit books, records and papers relating to Borrower’s financial or
      business condition; and

              

      

      
        	
                 
      

              	
                [2]

              	
                Inspect
      and appraise any of Borrower’s assets;
and

              

      

      
        	
                 
      

              	
                [3]

              	
                Allow
      all government authorities to furnish reports of examinations, or any
      records pertaining to Borrower, upon request by Lender or
    SBA.

              

      

      

      
        	
                 
      

              	
                (3)

              	
                Equal Opportunity - Post
      SBA Form 722, Equal Opportunity Poster, where it is clearly visible to
      employees, applicants for employment and the general public, and comply
      with the requirements of SBA Form 793, Notice to New SBA
      Borrowers.

              

      

      

      
        	
                 
      

              	
                (4)

              	
                American-made Products -
      To the extent feasible, purchase only American-made equipment and products
      with the proceeds of the Loan.

              

      

      

      
        	
                 
      

              	
                (5)

              	
                Taxes - Pay all federal, state,
      and local taxes, including income, payroll, real estate and sales taxes of
      the business when they come due.

              

      

       

       

       

       

       

      SBA Loan
Number: PLP
399-356-4004                                                                                                                    Page
7

      SBA Loan
Name: .Crystal Magic,
Inc.                                                                                                         (7a
Wizard 3.0)

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        	
                c.

              	
                Lender
      must require Borrower to certify that it will not, without Lender’s prior
      written consents

              

      

      
        	
                (1)

              	
                Distributions-Make any
      distribution of company assets that will adversely affect the financial
      condition of Borrower.

              

      

      
        	
                (2)

              	
                Ownership Changes -
      Change the ownership structure or interests in the business during the
      term of the Loan.

              

      

      
        	
                (3)

              	
                Transfer of Assets -
      Sell, lease, pledge, encumber (except by purchase money liens on property
      acquired after the date of the Note), or otherwise dispose of any of
      Borrowers property or assets, except in the ordinary course of
      business.

              

      

      

      ADMINISTRATOR

      SMALL
BUSINESS ADMINISTRATION

      

      

      
                                   

      

      By:           Laura
M. Badawi, Vice
President,                                                                Date: 10/04/00

       

      a
Preferred Lender, as Lender and as an agent of and on behalf of the SBA for the
purpose of executing this Authorization.

       

       

       

      SBA Loan
Number: PLP
399-356-4004                                                                                                                    Page
8

      SBA Loan
Name: .Crystal Magic,
Inc.                                                                                                         (7a
Wizard 3.0)

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