Document:

Unassociated Document

    
          Exhibit 10.17

     

    SUBSURFACE ETCHING AND
SERVICING AGREEMENT

    

    THIS SUBSURFACE ETCHING AND SERVICING
AGREEMENT (“Agreement”) is made
and entered into as of the 26 day of April, 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)           “Crystal Blanks” means
Crystal Products prior to subsurface engraving.

    

    
      	
               
      

            	
              b)

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

            

    

    

    
      	
               
      

            	
              c)

            	
              “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.

            

    

    

    
      	
               
      

            	
              d)

            	
              “Laser
      Equipment” means laser subsurface engraving
    machines.

            

    

    

    
      	
               
      

            	
              e)

            	
              “Laser Decorative
      Engraving Business” means the etching of the Crystal
      Blanks.

            

    

    

    
      	
               
      

            	
              f)

            	
              “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.

            

    

    

    
      	
               
      

            	
              g)

            	
              “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.

            

    

    

    
      	
               
      

            	
              h)

            	
              “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

            

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      	
               
      

            	
              i)

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

            

    

    

    
      	
               
      

            	
              j)

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

            

    

    

    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 in part based on Crystal Magic’s Net Profit (as
      defined below) as determined pursuant to Appendix B and
      shall be due and payable as provided
therein.

            

    

    

    “Gross
Revenues” means revenues from all the operation of all sources of business
related to the sale of crystal - products, equipment and accessories of Crystal
Magic as well as its subsidiaries (minority or majority), partners, affiliates,
owners, and other entities in common control (whether wholly or in part) with
Crystal Magic including, without limitation, income received from the Cashman
Photo Enterprises business excluding revenues directly attributable to laser
engraving of Crystal Products which are not Licensed Decorative Products. “Net
profit” means Gross Revenues less all ordinary, reasonable, and necessary
expenses, either paid or accrued in accordance with the accounting system used
by the Crystal Magic for federal income tail purposes; provided however,
that no deduction shall be made for the following items:

    

    
      	
              ·  

            	
              depreciation
      and amortization

            

    

    
      	
              ·  

            	
              amounts
      paid to spouses of - officers, directors, employees, or owners of Crystal
      Magic

            

    

    
      	
              ·  

            	
              amounts
      paid to Steven M. Rhodes and John C. Wolf (or the replacement or
      substitution of such executive officer) in excess of $250,000 per year
      combined.

            

    

    
      	
              ·  

            	
              expenses
      directly attributable to laser engraving of Crystal Products which are not
      Licensed Decorative Products

            

    

    
      	
              ·  

            	
              fees,
      expenses, settlements and costs of litigation in excess of $16,000 per
      calendar year

            

    

    
      	
              ·  

            	
              damages
      or other awards from litigation

            

    

    
      	
              ·  

            	
              payments
      on debt, including principal and
interest

            

    

    

    Notwithstanding
the foregoing, no deduction shall be made for damages by way of judgment,
consent, or otherwise or other awards related to or in connection with laser
etching licensing or patent matters.

    

    In
considerations of calculating profits and distributions, and as agreed by both
parties, a sufficient level of earnings will remain as future operating
capital.

    

    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 per Appendix B.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    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, and deliver a true correct copy of the profit and loss
      statement, balance sheet, and earnings statement to Owner on a quarterly
      basis no later than 30 calendar days following the end of each quarter,
      and a true and correct copy of Crystal Magic’s Federal income tax return
      within 5 calendar days after filing same. 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 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. Cost
of labor and parts will be charged at 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 bona fide
      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, subject to the consent of Crystal Magic as provided in Paragraph
      23(a) below.

            

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      	
               
      

            	
              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.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    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 WILL 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 “Equipment in Appendix
A or the Agreement or grant any license, concession, or other right with respect
to the “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 direct or indirect Customer of Crystal
magic. Crystal Magic will not compete directly or indirectly for sales to
Owner’s customers. On at least a quarterly basis, Crystal Magic and Owner will
supply each other with a current Customer list. 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. “Customer” shall only include those persons or
entities who have consummated a retail or wholesale purchase of engraved
products, directly or though distributors, and shall not include merely
potential prospects. In the event of a disagreement as to whose Customer a
person or entity is, the date of first sale, of product to that Customer shall
control. If no sales are made to an existing Customer for a period of 90
consecutive days, then that Customer shall be considered to be removed
“Customer” status.

    

    Upon
Owner providing and Crystal Magic accepting delivery of Assets from Owner in the
amount of $544,000, Crystal Magic will not, without the express written consent
of Owner which consent shall not be unreasonably withheld;

    

    
      	
               
      

            	
              a)

            	
              permit
      any change in beneficial ownership of Crystal Magic other than by
      operation of law (e.g., descent and distribution) or pursuant to this
      Agreement, or permit any change in directors, executive officers, or other
      control persons in other than by operation of law;
  or

            

    

    

    
      	
               
      

            	
              b)

            	
              issue
      stock, options or other beneficial interest, unless to employees of
      Crystal Magic; or

            

    

    

    c)           Hire
any personnel with a salary greater than $75,000 without the consent of
Owner.

    

    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
upon Owner providing and Crystal Magic accepting delivery of Assets from Owner
in the amount of $544,000, Crystal Magic will not, without the express written
permission of Owner which consent shall be unreasonably withheld (other than as
contemplated by this Agreement);

    

    a.           [intentionally
omitted];

    

    b.           [intentionally
omitted];

    

    c.           [intentionally
omitted];

    

    d.           [intentionally
omitted];

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    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.           [intentionally
omitted];

    

    j.           [intentionally
omitted];

    

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

    

    1.           [intentionally
omitted];

    

    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.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    d)           Crystal
Magic shall be liable for the prorated value of diode replacement of each laser
returned upon default or termination under this agreement. Diode replacement is
$7,500 amortized over an average 4,000 hour operational life. LCW software
reflecting hourly operation shall not be changed or affected in its
operation.

    

    e)           If
an Event of Default occurs by Owner, Crystal Magic has the right, but not the
obligation, to continue this Agreement for an additional 180 days. Owner must
provide Crystal Magic with a written 160 days’ notice in order to take
possession of assets as listed in Appendix A after Default by Owner. If an Owner
default occurs after September 3, 2005, Owner will forfeit any displays provided
to Crystal Magic.

    

    f)           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. The acceptance of
Laser Equipment by Crystal Magic constitutes its stipulation and acknowledgment
of Owner’s substantial compliance with the delivery requirements.

    

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

    

    h)           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.

    

    i)           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

    

    Owner
agrees to provide Crystal Magic has accepted assets to equal Two Hundred
Eighteen Thousand Dollars ($218,000) of fixed assets at OEM pricing as
identified below for consideration of a Base Percentage of 26.0
percent.

    

    Based on
laser systems meeting tiling performance capabilities consistent with the laser
etching industry, Owner has the option by December 31, 2004 to fund an
additional amount not to exceed Three Hundred Twenty Six Thousand Dollars ($
326,000) in additional assets. The full $ 326,000 will increase the base
percentage an additional 24.0 percent to yield 50 percent. The calculation of
the base percentage is pro rata according to actual amount funded. Additional
funding after December 31, 2004 may only be accepted at Crystal Magic’s
option.

    

    Assets
Funded

    

    1                                532
Laser
System                                              $
80,000                      LCW-532-1202
Delivered: Mar 3, 2003

    1                                532
Laser
System                                              $
80,000                      LCW-532-0203
Delivered: Mar 3, 2003

    

    2                                Computer
Systems                                      
     $
2,000                       Delivered;
Mar 3, 2003

    

    1                                3D
Minolta
300                                               
  $13,000                      1001054
Delivered; Mar 3, 2003

    1                                3D
Minolta
300                                            
     $ 8,
000                      1001103
Delivered; Mar 3, 2003

    1                              
 Display                                                               $
7,842                        Delivered;
Dec 1, 2003

    

                                     
Cash
Funding                                                
   $27,158

    

                                                                                             
$218,000

    

    Cash
funding maybe used for the purchase of- laser equipment, displays, electronic
and computer equipment, 3D camera systems or point clouding software.
Operational, Tiling, and Motion Control upgrades provided at no additional
charge. LCW vendor provided point clouding software available at $3000 / copy
OEM cost. All laser systems for Crystal Magic operations shall be provided at
Owners manufacturing cost.

    

    This
Appendix shall be amended from time to time to reflect equipment and funding
received.

    

    

    

    

    Initialed
for
Identification:                                                                this           
day  of April, 2004.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    APPENDIX
B

    

    As set
forth in detail below Crystal Magic agrees to pay owner etching fees, royalty
plus a percent of Crystal Magic’s Net Profit.

    

    ETCHING
FEES

    

    A monthly
etching fee paid by the l5th of the following month shall be determined as the
greater of items 1 or 2 specified below.

    

    
      	
               
      

            	
              1.

            	
              An
      hourly etching cost for actual laser time to etch each crystal decorative
      product, this hourly rate shall be adjustable monthly based on market
      tolling rates as agreed by both
parties.

            

    

    

    Hourly Etch Fee = Laser Hourly Rate +
Labor Cast

    

    2.      A
minimum etch fee regardless of sales volume.

    

    Min Etch
Fee = Laser Equipment Fee + Labor Cost

    

    The
minimum etch fee will vary with labor cost changes and the Laser Equipment Fee
portion will be $1622 per laser for a 60 month period.

    

    Crystal
Magic is responsible for the procurement and cost of crystal.

    

    The Etch
Pees may not be prorated, or offset due to laser performance or repair
time.

    

    in the
event of unforeseen circumstances and Crystal Magic can not pay the Min Etch
fee, the labor portion must be paid in full and the laser equipment fee will
accumulate at 8% interest yearly.

    

    ROYALTY
PAYMENT

    Crystal
Magic shall pay Owner by the 15th of the
month following the quarter end, a royalty payment of ten percent (10%) of the
greater of items 1 & 2 above. This payment is only due and owing during the
period that Owner is subject to the Patent Sublicense Agreement or such date
Owner determines such agreement is contractually unenforceable.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    PROFIT
SHARE PAYMENT

    

    Crystal
Magic shall pay Owner a percentage of Crystal Magic’s Net Profit as calculated
below. Owner and Crystal Magic have agreed to set profit percentages as
described below - (X,Y,Z) The profit share payment due Owner shall equal the set
profit percentage times the Net Profit, less hourly laser fees and/or equipment
fees paid to Owner plus any delinquent portion of etching fees due. Profit
percentages shall apply as of the date of amount funded.

    

    Profit
Percentage
(X)                                           50
percent                      Full
Funding                                           $544,000

                                   
26
percent                      Funded
to
Date                                      $218,000

    

    *(X)
shall be known as base percentage, based on final amount funded.

    

    Actual
Base percentage (X) will be determined by amount funded on December 31, 2004.
Any amount greater than the guaranteed amount will be pro rata not to exceed
hill funding.

    

    Profit
Percentage
(Y)                                           if
X equals
50%,                                Y
= 40.00 percent

                               
26%,                      
         Y = 20.80
percent

    

    Profit
Percentage shall be equal to (Y) until the sum of etching fees less Owners
manufacturing labor plus non etching equipment payments and profit share
payments equals the value of provided assets listed in appendix A up to
$544,000.

    

    Then,

    

    Profit
Percentage
(Z)                                           if
X equals
50%                                           Y
= 26.00 percent

                               
26%                
                          Y
= 13.52 percent

    

    Profit
Percentage shall be equal to (Z) until Crystal Magic’s debt has been paid in
full as of the date of this agreement. Crystal Magic agrees to utilize average
cash balances in excess of $200,000, unless otherwise agreed to by both parties,
to pay down debt principal on a monthly basis.

    

    Then,

    

    Profit
percentage shall be equal to (X) upon Crystal Magic’s debt paid in
full.

    

    Profit
Share payments to Owner shall be paid bi-annually June 31st and
December 31st,
payable for each period within 30 days. Payment schedule becomes quarterly upon
Crystal Magic experiencing four (4) consecutive Net Profit quarters. Any Quarter
resulting in a loss will revert the payment schedule to bi-annually for the term
of this contract unless agreed by both parties.

    

    Upon
approval by owner a portion of this profit payment maybe loaned to Crystal Magic
for the purpose of meeting shortfalls in operating capital. This amount is to be
repaid within the following quarter at 6% interest yearly.

    

    NON
ETCHING EQUIPMENT PAYMENTS

    

    On a
quarterly basis, Crystal Magic will pay owner for the use of Non Etching
Equipment payments equal to Owner’s cost of the equipment amortized over 60
months at an interest rate of 8%.Unassociated Document

    
          Exhibit 10.18

     

     

    FORM:
STORE

    Non-Apparel
– NPR

    

    LICENSEE:                                CRYSTAL
MAGIC
INC.                                                RETAIL
PRODUCT LICENSE AGREEMENT

    ADDRESS:                                7703
Kingspointe Parkway

                       
Suite 300

                        Oriando,FL32819

    

    THIS RETAIL PRODUCT LICENSE
AGREEMENT is entered into by NBA Properties. Inc. (“NBAP”), with its
principal office at 645 Fifth Avenue, New York, New York 10022. and the licensee
listed above (“LICENSEE”) with regard to the commercial use of certain names,
logos, symbols, emblems, designs and uniforms and all identifications, labels,
insignia, indicia or trade dress thereof (the “Marks”) of the National
Basketball Association (the “NBA”), the Women’s National Basketball Association
(the “WNBA”) and their respective Member Teams (separately, the “NBA Marks” and
the “WNBA Marks”). Subject to the terms of this Agreement and the attached NBAP
Standard Terms and Conditions, NBAP hereby grants to LICENSEE, and LICENSEE
hereby accepts, the non-exclusive right and license to use the NBA Marks and the
WNBA Marks (collectively, the “Licensed Marks”) solely in connection with the
manufacture, distribution and sale of the products described in Paragraph A
below (“Licensed Products”) to the Authorized Purchasers described in Paragraph
C below. No license or right is granted for the use of the NBA Marks or the WNBA
Marks for any purpose other than on the Licensed Products sold to the Authorized
Purchasers in accordance with this Agreement.

    

    A.           LICENSED PRODUCTS: Crystal
awards and crystal desktop accessories.

    

    
      	
              B.

            	
              TERM: The rights granted
      hereunder shall be perpetual, unless sooner terminated in accordance with
      the provisions of this Agreement (the
“Term”).

            

    

    

    
      	
              C.

            	
              TERRITORY; NBA
      controlled channels, including without limitation. In-arena
      concessionaires of the Member Teams, The NBA Store on 5th
      Avenue in New York City, the NBA Store on NBA.com (or other such URL
      designated by NBAP). and NBA City (collectively, the “Authorized
      Purchasers”).

            

    

    

    
      	
              D.

            	
              PURCHASES; ROYALTY RATES;
      STATEMENTS; LICENSEE shall make Licensed Products only for sale to
      the Authorized Purchasers and only pursuant to purchase orders duly issued
      by the Authorized Purchasers (the “Purchase Order”). LICENSEE shall pay to
      NBAP a combined royalty and advertising promotion payment equal to 12% of
      the aggregate price of all. Licensed Products purchased by the Authorized
      Purchasers from LICENSEE (hereinafter referred to as a “Combined Royalty
      Payment”),

            

    

    

    
      	
               
      

            	
              Within
      thirty (30) days following the end of each month, LICENSEE shall furnish
      to NBAP (on forms provided-by NBAP), a full and accurate statement
      indicating units sold, unit price, and the calculation of Combined Royalty
      Payments and, simultaneously with the submission of each such statement,
      LICENSEE shall make all Combined Royalty Payments due under this
      Agreement.

            

    

    

    
      	
              E

            	
              ADVERTISING
      AND PROMOTION:

            

    

    Consistent
with NBAP’s past practice of creating, undertaking and supporting advertising
and promotion activities with respect to NBAP-licensed products sold at retail,
NBAP shall devote up to two percent (2%) of the Combined Royalty Payments made
by LICENSEE pursuant to Paragraph D above to cover the expenses incurred by MBAP
in connection with such advertising and promotion activities.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    AGREED TO
AND ACCEPTED,
subject                                                                                     AGREED
TO AND ACCEPTED:

    to and
incorporating the attached
NBAP                                                                             
      NBA PROPERTIES, INC.

    Standard
Terms and Conditions which

    the
undersigned has
read:                                                                                                              By:                                           

    CRYSTAL
MAGIC
INC.                                                                                                              
  Salvatore LaRocca

                                                         
Executive Vice President

                                                          Global
merchandising Group

    

    By: /s/Steven M. Rhodes

    Title:  President                                                                                               
Dated: 10/23/07

     

     

     

     

    
 

    

    2

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    NBAP STANDARD TERMS AND
CONDITIONS

    

    
      	
              1.

            	
              STATEMENTS AND
      PAYMENTS

            

    

    LICENSEE
shall not deduct or withhold from any payment to NBAP any amounts by reason of
any tax (including any taxes imposed on NBAP). Any tax applicable to the
distribution and sale of the Licensed Products shall be borne, and paid
directly, by LICENSEE. All computations and payments shall be in U.S. dollars,
from a U.S. source approved by NBAP, at the spot rate for the local currency as
published in the Wall Street Journal for the last business day of the preceding
month. If LICENSEE shall fail to timely pay any amount due under this Agreement,
then without prejudice to any other rights that NBAP may have under this
Agreement or otherwise, LICENSEE shall pay interest on such amount at a rate
equal to the lesser of (i) three percent (3%) per annum over the highest prime
rate (announced by JP Morgan Chase Manhattan Bank, New York branch) prevailing
during the period between the date the payment first became due and the date
such payment is actually paid or (ii) the highest rate permitted by law during
the period between the date the payment first became due and the date such
payment is actually paid. The receipt or acceptance by NBAP of any of the
statements furnished or Combined Royalty Payments made by LICENSEE (including
the cashing by NBAP of any checks) shall not preclude NBAP from auditing
LICENSEE’S books and records pursuant to Paragraph 8 or claiming any shortfall
in payments due hereunder.

    

    
      	
              2.

            	
              NON-RESTRICTIVE GRANT; RIGHTS
      RESERVED

            

    

    Nothing
in this Agreement shall prevent NBAP from granting any other licenses and
rights. All rights not exclusively granted to LICENSEE in this Agreement are
expressly reserved by NBAP. LICENSEE shall have no right to continue
manufacturing or selling Licensed Products after the termination of this
Agreement.

     

    
      	
              3.

            	
              OWNERSHIP OF MARKS AND
      GOODWILL

            

    

    LICENSEE
acknowledges that the NBA Marks and the WNBA Marks and the goodwill attached
thereto belong exclusively to NBAP, the NBA, the WNBA and their respective
Member Teams. LICENSEE also acknowledges (i) the great value of the goodwill
associated with the NBA Marks and the-WNBA Marks, (ii) that the NBA Marks and
the WNBA Marks are famous and (iii) that the NBA Marks and the WNBA Marks have
secondary meanings in the minds of the public. LICENSEE agrees that all use by
LICENSEE of the NBA Marks and the WNBA Marks shall inure to the benefit of NBAP,
the NBA, the WNBA and their respective Member Teams, and any right that may
accrue to LICENSEE related thereto shall be assigned to NBAP or its designee
upon NBAP’s request. LICENSEE shall not, during the Term or thereafter,
challenge (y) the rights of the Member Teams, whether severally owned or held in
association as the NBA, WNBA or NBAP’s rights, in and to the NBA Marks and the
WNBA Marks, or (z) the validity, legality or enforceability of this Agreement.
LICENSEE shall not. without NBAP’s specific authorization, use, during or after
the Term, (i) any Licensed Marks or (ii) any Marks or other material in
connection with the Licensed Marks that are confusingly similar to the Licensed
Marks, and/or that relate or refer to any Licensed Mark, Member Team or event or
activity involving the NBA, the WNBA or a Member Team.

     

    
      	
              4.

            	
              PROTECTION
      OF RIGHTS

            

    

    
      	
               
      

            	
              (a)

            	
              Assistance
      in Protecting Marks: LICENSEE shall cooperate to the fullest extent
      necessary to assist NBAP in the protection of the rights of NBAP, the NBA,
      the WNBA and their respective Member Teams in and to the Licensed Marks.
      Without limiting the effect of the preceding sentence, if any of
      LICENSEE’S authorized Third Party Contributors (as defined in Paragraph 7
      below) uses the Licensed Marks for any unauthorized purpose, LICENSEE
      shall be responsible for, and shall cooperate fully and use its best
      efforts to stop, such unauthorized
use.

            

    

    
      	
               
      

            	
              (b)

            	
              Ownership of Other Intellectual
      Property: LICENSEE acknowledges that NBAP and/or the Member Teams
      are the exclusive owners of all variations of the Licensed Marks and all
      designs or graphics that incorporate any aspect of the Licensed Marks. Any
      intellectual property rights in the Licensed Marks that may accrue to
      LICENSEE shall inure to the benefit of NBAP and shall be assigned to NBAP
      upon its request.

            

    

     

    

    

    3

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Any
copyright, trademark, service mark or other intellectual property right used,
created, developed or procured by or on behalf of LICENSEE with respect to or
involving (i) any Licensed Product or (ii) the Licensed Marks, derivations or
adaptations of the Licensed Marks or (iii) any word, symbol or design which uses
or is similar to the Licensed Marks so as to suggest association with or
sponsorship by the NBA, the WNBA, one of their respective Member Teams or any of
their affiliates, is hereby assigned, or in the case of rights not yet
assignable, shall be assigned to NBAP, and upon NBAP’s request, LICENSEE shall,
at its sole expense, apply for registration of such intellectual property right
in the name of NBAP or its designee. To the extent such intellectual property
right was not created by LICENSEE, LICENSEE shall take all necessary steps to
secure an assignment to NBAP of such intellectual property, including, but not
limited to, any copyright from a creator of any original work of authorship that
does not constitute a work made for hire. Any copyright, trademark, service mark
or other intellectual property right affecting or relating to the Licensed Marks
procured in the name of LICENSEE or applied for in the name of LICENSEE is
hereby assigned to NBAP. LICENSEE shall supply NBAP with any necessary
supporting materials required to obtain registrations of any intellectual
property right required to be assigned to NBAP under this
Agreement.

    
      	
              (c)

            	
              Designs: All designs of
      the Licensed Products, including any packages, containers or tags, shall
      be subject to NBAP’s prior written approval and shall be used solely in
      furtherance of this Agreement, and such designs will not be used in any
      other respect by LICENSEE nor will LICENSEE permit any third party to use
      such designs, except as may be authorized by NBAP. Notwithstanding the
      foregoing, NBAP acknowledges that LICENSEE may hold other licenses
      pursuant to which LICENSEE manufactures, distributes or sells products
      similar in design to the Licensed Products, and nothing in this Agreement
      is intended to prohibit LICENSEE’S manufacture, distribution or sale of
      such products not bearing or relating to the Licensed
    Marks.

            

    

    
      	
              (d)

            	
              Notices, Labeling and
      Records: NBAP may from time-to-time designate such copyright,
      trademark or service mark notices (including the form, location and
      content of such notices) that LICENSEE shall cause to appear on or within
      each Licensed Product sold, by means of a tag, label, imprint or other
      appropriate device, in every instance in which any Licensed Mark is used.
      The following applicable, general notice (in the English language and the
      language of the country where the Licensed Products will be sold) must be
      included on a label, the packaging material or on a separate slip of paper
      packed with or attached to the Licensed
Product:

            

    

    “The NBA
and individual NBA member team identifications reproduced on this product are
trademarks and copyrighted designs, and/or other forms of intellectual property,
that are the exclusive property of NBA Properties, Inc. and the respective NBA
member teams and may not be used, in whole or in part, without the prior written
consent of NBA Properties, Inc. © 200_ NBA Properties, Inc. All rights
reserved.”

    “The WNBA
and individual WNBA team identifications reproduced on this product are
trademarks and copyrighted designs, and/or other forms of intellectual property,
that are the exclusive property of WNBA Enterprises, LLC and may not be used, in
whole or in part, without the prior written consent of WNBA Enterprises, LLC. ©
200_ WNBA Enterprises, LLC. All rights reserved.”

    LICENSEE
shall: (i) cause all Licensed Products to bear the NBA logo or WNBA logo on
either the article or its packaging in such place, in such prominence, and in
such form as NBAP may designate from time-to-time, (ii) faithfully comply with
and adhere to NBAP’s mandatory holographic label and hang tag system, or such
other shipment tracking, identification and anti-counterfeiting systems,
packaging tags and labels that NBAP may establish from time-to-time, (iii)
unless approved in writing by NBAP, not cross-license or otherwise use other
licensed properties or other Marks with the Licensed Products or Licensed Marks
and (iv) keep appropriate records, and advise NBAP, of the date when each of the
Licensed Products is first placed on sale or sold in each
country of the Territory and the date of first use in each country of each
different Licensed Mark on the Licensed Products and any promotional or
packaging materials, 5.

    

     

    

    4

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    5.           INDEMNIFICATIONS

    
      	
               
      

            	
              (a)

            	
              LICENSEE
      Indemnification; LICENSEE shall be solely responsible for, and
      shall defend, hold harmless and indemnify NBAP, NBA Media Ventures, LLC
      (“NBAMV”), the NBA, the WNBA, their respective Member Teams and the
      National Basketball Players Association (“NBPA”), and their respective
      affiliates, owners, directors, governors, officers, employees and agents
      (collectively “NBA Parties”) against any claims, demands, disputes
      (including disputes arising out of or in connection with this Agreement
      between the parties hereto) causes of action or damages, including
      attorneys’ fees (collectively, “Claims”), arising out of an allegation
      relating or referring to: (i) any act or omission of LICENSEE, any Third
      Party Contributor (as defined In Paragraph 7 below) or any other entity
      acting on LICENSEE’S behalf (whether or not approved by NBAP pursuant to
      this Agreement), (ii) any breach of this Agreement by LICENSEE, any Third
      Party Contributor or any other entity acting on LICENSEE’S behalf (whether
      or not approved by NBAF pursuant to this Agreement), (iii) the
      manufacture, distribution, sale, possession or use of any Licensed Product
      (including, but not limited to, claims relating to (w) any alleged defect
      (whether obvious or hidden and whether or not present in any sample
      approved by NBAP) in a Licensed Product or in any packaging or other
      materials, (x) any alleged injuries to persons or property, (y) any
      infringement of any rights of any person or entity or (z) the alleged
      failure by LICENSEE, any Third Party Contributor or any other entity
      acting on LICENSEE’S behalf (whether or. not approved by NBAP pursuant to
      this Agreement), to comply with applicable laws, regulations, standards,
      the terms of the NBAP vendor compliance guide, as amended from time to
      time by NBAP (the “Compliance Guide”), or the terms of the NBAP Code of
      Conduct, as amended from time to time by NBAP (the “Code of Conduct”),
      attached hereto as Exhibit A or
      (iv) any claim that any Licensed Product or element thereof violates or
      infringes upon the trademark, copyright or other intellectual property
      rights (including trade dress and rights of publicity and privacy) of a
      third party, provided LICENSEE is given prompt written notice of any such
      Claim. NBAP shall have the option to undertake and conduct the defense of
      any such Claim at LICENSEE’S expense. In the event NBAP has opted to allow
      LICENSEE to undertake and conduct the defense of any Claim in any instance
      to which the foregoing indemnities pertain, NBAP shall approve of the
      counsel who shall conduct the defense of such Claim. In any instance to
      which such indemnities pertain, LICENSEE shall keep NBAP fully advised of
      all developments pertaining to such Claim and shall not enter into a
      settlement of such Claim or admit liability or fault without NBAP’s prior
      written approval. LICENSEE shall obtain and maintain product liability
      insurance providing protection for the NBA Parties against any Claims
      arising out of any alleged defects in the Licensed Products or any use of
      the Licensed Products, in an amount and providing coverage satisfactory to
      NBAP (including the amount of the deductible, rating of insurance and
      notice provisions). Such insurance obligations shall not limit LICENSEE’S
      indemnity obligations.

            

    

    
      	
               
      

            	
              (b)

            	
              NBAP Indemnification:
      NBAP shall be solely responsible for, and shall defend, hold harmless and
      indemnify LICENSEE, its directors, officers, employees and agents against
      any Claims arising out of an allegation relating or referring to: (i) a
      claim that the use of the Licensed Marks as specifically approved by NBAP
      in accordance with the terms of this Agreement violates or infringes upon
      the trademark, copyright or other intellectual property rights (including
      trade dress) of a third party in or to the Licensed Marks or (ii) any
      breach of this Agreement by NBAP, provided NBAP is given prompt written
      notice of and shall have the option to undertake and conduct the defense
      of any such Claim. In any instance to which the foregoing indemnities
      pertain, LICENSEE shall cooperate fully with and assist NBAP in all
      respects in connection with any such defense. In any instance to which
      such indemnities pertain, , NBAP shall not enter into a settlement of such
      Claim or admit liability or fault without LICENSEE’S prior written
      approval.

            

    

     

     

    

    5

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    
      	
              (c)

            	
              Release:
      In consideration of the rights granted under this Agreement, except with
      respect to Claims for which NBAP indemnifies LICENSEE pursuant to
      Paragraph 5(b), LICENSEE hereby releases the NBA Parties from any Claims
      that, now or in the future arise out Of or in any manner relate to the
      manufacture, distribution or sale of the Licensed
  Products.

            

    

     

    6.           QUALITY; APPROVALS;
SAMPLES

    LICENSEE
shall cause the Licensed Products to meet and conform to high standards of
style, quality and appearance. In order to assure NBAP that it is in compliance
with such standards and other provisions of this Agreement, with respect to any
Licensed Product, LICENSEE must obtain the approval of NBAP with respect to such
Licensed Product before producing or distributing such Licensed
Product:

     

    
      	
               
      

            	
              (a)

            	
              Pre-Production: Before
      producing or distributing of any product bearing a Licensed Mark, LICENSEE
      shall submit to NBAP all artwork, three dimensional models (if any),
      prototypes, mock-ups and samples of each product in accordance with the
      procedures set forth in the Compliance Guide. NBAP shall approve or
      disapprove in writing all submissions, in its sole discretion, before
      LICENSEE shall be entitled to distribute, use, produce commercial
      quantities of or sell any item relating to any such submission. All
      approvals or authorizations by NBAP are to be granted or withheld in
      NBAP’s sole discretion and must be evidenced in writing. LICENSEE
      acknowledges that NBAP’s approval of an article does not imply approval
      of, or license to use, any elements not owned or controlled exclusively by
      NBAP contained in the article.

            

    

    
      	
               
      

            	
              (b)

            	
              Promotional Use of
      Product: If NBAP wishes to purchase Licensed Products for give-away
      purposes and not for resale, LICENSEE shall sell the Licensed Products to
      NBAP at LICENSEE’S direct manufacturing cost for such Licensed Products
      and LICENSEE shall not be required to make Combined Royalty Payments on
      such sales to NBAP.

            

    

    
      	
               
      

            	
              (c)

            	
              Rejections and
      Non-Compliance: All submissions or samples not approved by NBAP
      shall promptly be destroyed by LICENSEE. In the event of LICENSEE’s
      unapproved or unauthorized manufacture, distribution, use or sale of any
      products or materials bearing the Licensed Marks, or the failure of
      LICENSEE to comply with Paragraphs 6, 7(a) or 7(b), NBAP shall have the
      right: (i) to revoke LICENSEE’S rights with respect to any Licensed
      Product and cancel any Purchase Order for any Licensed Product, without
      liability, whether or not such Licensed Product has already been received
      and/or accepted by NBAP, and if already received by NBAP, such Licensed
      Product shall be returned to LICENSEE at Its own expense and risk and/or
      (ii) at LICENSEE’S expense, to confiscate or order the destruction of such
      unapproved, unauthorized or non-complying products. Such right(s) shall be
      without prejudice to any other rights NBAP may have under this Agreement,
      the Purchase Order or otherwise.

            

    

    
      	
               

              7.

            	
               

              COMPLIANCE

            

    

    
      	
               
      

            	
              (a)

            	
              Third Party
      Contributors: If LICENSEE desires to use a third party
      manufacturer, supplier, subcontractor or sublicensee (each, a “Third Party
      Contributor”) in connection with the manufacturing of all or any part of a
      Licensed Product, LICENSEE must first notify NBAP of the name and address
      of such proposed Third Party Contributor and of the Licensed Product
      LICENSEE desires such proposed Third Party Contributor to manufacture.
      NBAP shall have the right, in its sole discretion, to withhold or withdraw
      approval of any proposed Third Party Contributor and may predicate its
      approval on any terms or conditions as NBAP shall determine in its sole
      discretion. LICENSEE may not use a Third Party Contributor in connection
      with the manufacture of all or any part of a Licensed Product prior to
      receiving such approval from NBAP. Attached as Schedule A is a
      true and complete list of all Third Party Contributors authorized by NBAP
      as of the date of execution of this
Agreement.

            

    

    
      	
               
      

            	
              (b)

            	
              Conduct Requirements:
      LICENSEE represents and warrants to NBAP that LICENSEE shall faithfully
      comply with and adhere to, and LICENSEE shall take all steps necessary to
      ensure that all Third Party Contributors shall faithfully comply with and
      adhere to, all of the terms, provisions and policies contained in this
      Agreement, the Code of Conduct and the Compliance Guide and all applicable
      United States and foreign laws, government rules and regulations, court
      and administrative decrees and the highest standard of business ethics
      then prevailing in the industry with regard to the conduct of all aspects
      of LICENSEE’S (or any Third Party Contributors) business and the
      manufacture, distribution, sale, testing and use of all Licensed Products
      (collectively, “Conduct Requirements”). NBAP and its authorized
      representatives shall have the right, upon reasonable prior notice, to
      examine and audit LICENSEE to ensure compliance with the Conduct
      Requirements, LICENSEE shall allow NBAP or its designee or NBAP’s or its
      designee’s authorized representatives access to any of its premises,
      personnel and business records at all reasonable times for the purposes of
      such auditing. LICENSEE shall take all necessary steps in negotiating
      contracts with Third Party Contributors to provide NBAP and its authorized
      representatives with a contractual right to audit such Third Party
      Contributors to ensure compliance with the Conduct Requirements, including
      the right of NBAP to have access to the premises and personnel of any
      Third Party Contributor at all reasonable times for the purposes of such
      auditing.

            

    

    

    

    

    

    

    

    6

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    
      	
               
      

            	
              (c)

            	
              Governmental Approvals:
      It shall be LICENSEE’S sole responsibility, at its sole expense, to obtain
      all approvals of all governmental authorities which may be necessary in
      connection with the Licensed Products and LICENSEE’S performance under
      this Agreements.

            

    

     

    
      	
              8.

            	
              RECORDS;
      AUDITS

            

    

    LICENSEE
shall keep accurate books of account and records covering all transactions
relating to the license granted in this Agreement. NBAP and its authorized
representatives shall have the right, upon reasonable prior notice, to examine
and audit such books of account and records and all other documents and
materials in LICENSEE’S possession or under its control (including records of
LICENSEE’S parents, subsidiaries, affiliates and third parties, if they are
involved in activities which relate to this Agreement) relating to this
Agreement. NBAP shall have free and full access for such purposes and for the
purpose of making extracts and copies. Should an audit by NBAP establish a
deficiency between the amount found to be due NBAP and the amount LICENSEE
actually paid or reported, the LICENSEE shall pay the amount of such deficiency,
plus interest at the then current prime rate (as announced by Chase Manhattan
Bank, New York branch) from the date such amount should have been paid until the
date of payment Should such audit establish a deficiency of more than five
percent (5%), LICENSEE shall also pay for the cost of the audit. .LICENSEE shall
pay such amount within thirty (30) days. All such books of account and records
shall be kept available for at least one (1) year after the termination of this
Agreement. LICENSEE shall supply NBAP with true and complete copies of any
agreement it has entered into, or in the future enters into, with any Member
Team or any NBA or WNBA player

     

    
      	
              9.

            	
              EARLY
      TERMINATION

            

    

    Without
prejudice to any other rights NBAP may have pursuant to this Agreement or
otherwise, NBAP shall have the right, upon five (5) days’ written notice, to
terminate this Agreement LICENSEE shall pay NBAP, within thirty (30) days after
such termination, all Combined Royalty Payments payable to NBAP under this
Agreement After termination of this Agreement, LICENSEE shall have no further
right hereunder to manufacture, distribute or sell (or authorize any third party
to manufacture, distribute or sell), any Licensed Product or otherwise use any
NBA Mark or WNBA Mark.

     

    10.           DISPOSAL OF STOCK

    Ten (10)
days after any termination under Paragraphs 6 or 9, LICENSEE will furnish to
NBAP a certificate showing the number and description of Licensed Products on
hand or in process of manufacture and LICENSEE shall destroy all such Licensed
Products.

    

     

     

     

    

    7

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    11.           EQUITABLE RELIEF

    LICENSEE
acknowledges that (i) the Licensed Marks possess a special, unique and
extraordinary character which makes difficult the assessment of the monetary
damage which NBAP would sustain as a result of the unauthorized use thereof and
(ii) any unauthorized or unapproved use of the Licensed Marks would cause
immediate and irreparable damage to NBAP for which NBAP would not have an
adequate remedy at law. Therefore, LICENSEE agrees that, in the event of a
breach of this Agreement by LICENSEE, in addition to such other legal and
equitable rights and remedies as shall be available to NBAP, NBAP shall be
entitled to injunctive and other equitable relief, without the necessity of
proving damages or furnishing a bond or other security.

     

    
      	
              12.

            	
              NOTICES

            

    

    All
notices and statements to be given and all payments to be made under this
Agreement shall be given or made at the respective address of the parties as set
forth above, unless notification of a change of address is given in writing. Any
notice of breach or default must be in writing and sent by facsimile, overnight
express delivery, or registered or certified mail, return receipt requested,
properly addressed and stamped. Any written notice shall be deemed to have been
given at the time it is sent.

     

    13.           NO JOINT VENTURE

    Nothing
in this Agreement shall be construed to place the parties in the relationship of
partners or joint venturers. Neither party shall have the power to obligate or
bind the other to a third party in any manner whatsoever

     

    14.           ARBITRATION OF CERTAIN
MATTERS

    Any
dispute or disagreement between the parties relating solely to the amount of
Combined Royalty Payments owing under this Agreement shall be settled by
arbitration in New York City under the rules then in effect of the American
Arbitration Association. Judgment upon the award may be entered in any court
having jurisdiction. No other dispute or disagreement between the parties
(including any claim by NBAP that LICENSEE is using the Licensed Marks in a
manner not authorized by this Agreement or is otherwise in breach of this
Agreement) shall be settled by arbitration. All decisions by NBAP relating to
disapproval of any Licensed Product shall be final and binding on LICENSEE and
shall not be subject to review in any proceeding.

     

    15.           NO USE OF PLAYERS

    LICENSEE
acknowledges that this Agreement does not grant to LICENSEE any licenses or
rights with respect to the use of the names, likenesses or other attributes of
any NBA or WNBA player (collectively, “Player Attributes”). The license granted
under this Agreement does not include, and shall not be used to imply, a
testimonial or endorsement of any Licensed Products by any NBA player. LICENSEE
shall not use Player Attributes in any manner that may imply such a testimonial
or endorsement without first obtaining written authorization from the subject
player(s). LICENSEE shall not (a) enter into any endorsement or other form of
agreement with any NBA or WNBA player without the prior written approval of NBAP
(which approval may be granted, withheld or conditioned in NBAP’s sole
discretion), (b) take any action to cause or induce any NBA or WNBA player to
“opt-out” of any group license agreement between NBAP and NBPA (or its
successor) or WNBA Enterprises, LLC (“WNBAE”) and WNBPA (or its successor), to
breach any collective bargaining agreement between the NBA and NBPA (or its
successor) or WNBAE and WNBPA (or its successor) or to breach any NBA or WNBA
Uniform Player Contract, and/or (c) take any action to cause or induce any NBA
or WNBA player to wear or use any apparel or accessory products and/or not to
wear any “on-court” product manufactured by an NBAP licensee, in either case,
during a game (including warm-up periods, going to and from the locker room to
the playing floor and pre- and post-game media sessions) or a team
practice.

     

    16.          WARRANTIES

    Each
party represents and warrants that it has the right and authority to enter into
and perform this Agreement and NBAP represents and warrants that it has the
right to grant the rights to use the Licensed Marks in accordance with the terms
and conditions of this Agreement. LICENSEE represents and warrants that the
Licensed Products shall comply with the Conduct Requirements. NBAP’s approval of
such materials will not imply a representation
or belief that NBAP believes such materials are sufficient to meet applicable
laws, regulations and standards. LICENSEE further represents and warrants that
the Licensed Products and all graphics used on Licensed Products will not
violate the intellectual property rights of any third party.

    

     

    

    

    

    8

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    17.          SEVERABILITY

    In the
event any provision of this Agreement is found to be void, invalid or
unenforceable as a result of any judicial or administrative proceeding or
decree, this Agreement shall be construed and enforced as if such provision were
not contained in this Agreement,

     

    18.          ASSIGNMENT

    This
Agreement and any rights granted under this Agreement are personal to LICENSEE
and shall not be assigned, sublicensed, subcontracted or encumbered, directly or
indirectly, by law or by contract, without NBAP’s prior written
consent.

     

    19.          MISCELLANEOUS

    
      	
               
      

            	
              (a)

            	
              Waiver: None of the
      provisions of this Agreement can be waived or modified except expressly by
      a writing signed by both parties. There are no representations, promises,
      agreements, warranties, covenants or undertakings by either party other
      than those contained in this Agreement No failure on the part of NBAP to
      exercise any right under this Agreement shall operate as a waiver of such
      right; nor shall any single or partial exercise of any right preclude any
      other or further exercise or the exercise of any other
    rights.

            

    

    
      	
               
      

            	
              (b)

            	
              Survival: No termination
      of this Agreement shall relieve LICENSEE of its obligation to pay NBAP any
      amounts due to NBAP at the time of termination, regardless of whether
      these amounts are then or thereafter payable. The provisions of Paragraphs
      8 and 19(d) shall survive the termination of this
    Agreement.

            

    

    
      	
               
      

            	
              (c)

            	
              Governing Law and
      Jurisdiction: This Agreement shall be construed in accordance with
      the laws of the State of New York, USA, without regard to its principles
      of conflicts of laws. Any claim arising under this Agreement (except as
      provided under Paragraph 14) shall be prosecuted only in a federal or
      state court of competent jurisdiction located within the City of New York,
      USA and LICENSEE consents to the jurisdiction of such court and to the
      service of process by mail.

            

    

    
      	
               
      

            	
              (d)

            	
              Confidentiality:
      LICENSEE shall not (nor shall it permit or cause its employees or agents
      or any Third Party Contributor to) divulge, disseminate or publicize the
      terms of, or the information relating to, this Agreement to any third
      party (other than its attorneys or accountants), except as may be required
      by law or to fulfill the terms of this
  Agreement.

            

    

    
      	
               
      

            	
              (e)

            	
              Construction: This
      Agreement has been executed in a text using the English language, which
      text shall be controlling. This Agreement, together with any exhibits or
      attachments, when fully-executed shall constitute the entire agreement and
      understanding between the parties and cancels, terminates and supersedes
      any prior agreement or understanding relating to the subject matter of
      this Agreement between LICENSEE and the NBA, WNBA any Member Team, NBAP or
      NBAMV. The headings in this Agreement are for reference purposes only and
      shall not affect the interpretation of this Agreement. This Agreement
      shall not be binding on NBAP until signed on its behalf by its President
      or Executive Vice President. Global Merchandising Group or such other
      executive designated by the President to sign # #
  #

            

    

    

     

     

     

    

    

    

    9

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
A

    

    Third
Party Contributors

    

    [To be
provided by LICENSEE]

    

     

    

    

    

    10

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
A

    

    LICENSEE AND SUPPLIER CODE
OF CONDUCT

    

    The NBA’s
mission is to be the most respected and successful sports league and sports
marketing organization in the world. In keeping with this mission, NBA
Properties, Inc., WNBA Enterprises, LLC and NBA Development League, LLC
(collectively, the “NBA Entities”) are committed to conducting their business in
a socially responsible and ethical manner. We expect all NBA Entities licensees,
including their contractors, engaged in the manufacture and sourcing of products
bearing NBA, WNBA, NBADL and USA Basketball Marks (collectively “Product
Suppliers”) to share this commitment. At a minimum, all Product Suppliers must
adhere to the following Licensee and Supplier Code of Conduct:

    

    1.     ETHICAL STANDARDS

    Product
Suppliers shall conduct their businesses in accordance with the highest
standards of ethical behavior.

    

    2.     COMPLIANCE WITH APPLICABLE
LAWS

    Product
Suppliers shall comply with all applicable laws and regulations of the
countries, states and localities in which they operate.

    

    3.     EMPLOYMENT
PRACTICES

    The NBA
Entities will only do business with Product Suppliers whose employees are
appropriately compensated, present at work voluntarily, not at undue risk of
physical harm and not exploited in any way. In addition, Product Suppliers must
comply with the following specific standards:

    

    
      	
              ·  

            	
              Wages and
      Benefits: Product Suppliers shall provide wages, overtime
      compensation and benefits at not less than the minimum levels required by
      applicable laws and regulations or the prevailing local industry levels,
      if higher.

            

    

    

    
      	
              ·  

            	
              Working
      Hours: Product Suppliers shall, at a minimum, comply with all
      applicable working hours laws and regulations. Except in unusual business
      circumstances, employees shall not be required to work more than the
      lesser of (a) 48 hours per week and 12 hours of overtime or (b) the limits
      on regular and overtime hours allowed by local law or, where local law
      does not limit the hours of work, the regular work week in such locality
      plus 12 hours of overtime. In addition, except in unusual business
      circumstances, employees shall be entitled to at least one day off in
      every seven-day period.

            

    

    

    
      	
              ·  

            	
              Child
      Labor: Product Suppliers shall not employ any person under the age
      of 15 (or 14 where allowed by local law) or under the local age for
      completing compulsory education, if
higher

            

    

    

    
      	
              ·  

            	
              Forced
      Labor: Product Suppliers shall not use any forced labor, whether in the
      form of prison labor, indentured labor, bonded labor or
      otherwise.

            

    

    

    
      	
              ·  

            	
              Harassment
      or Abuse: Product Suppliers shall treat each employee with dignity
      and respect, and shall not use corporal punishment, threats of violence or
      other forms of physical, sexual, psychological or verbal harassment or
      abuse.

            

    

    

    
      	
              ·  

            	
              Nondiscrimination:
      Product Suppliers shall not discriminate in employment practices on the
      basis of race, religion, age, nationality, social or ethnic origin,
      gender, sexual orientation, political opinion or
    disability.

            

    

    

     

     

     

    

    11

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    
      	
              ·  

            	
              Freedom of
      Associations Product Suppliers shall recognize and respect the
      right of employees to join organizations of their own choosing and shall
      neither threaten nor penalize employees for their efforts to organize or
      bargain collectively.

            

    

    

    
      	
              ·  

            	
              Health and
      Safety: Product Suppliers shall provide employees with a safe and
      healthy working environment. Manufacturing facilities shall, at a minimum,
      contain clean restrooms, potable water, adequate fighting, adequate
      ventilation and fire exits, Residential facilities, if provided, shall
      also be kept sanitary and safe.

            

    

    

    4.     ENVIRONMENTAL
REQUIREMENTS

    Product
Suppliers shall comply with all applicable environmental laws and
regulations.

    

    5.     COMMUNICATION

    Product
Suppliers shall take appropriate steps to ensure that the provisions of this
Code are communicated to employees, including the prominent posting of the Code
(in the local language) in their manufacturing facilities,

    

    6.     MONITORING
AND COMPLIANCE

    Product
Suppliers shall conduct periodic audits of manufacturing facilities, on the
basis of which they shall certify to the NBA Entities on request either that (a)
all products bearing NBA, WNBA, NBADL and USA Basketball trademarks have been
manufactured in compliance with this Code, or (b) identified facilities have
been found not to be in compliance with this Code, in which event the Product
Supplier shall specify appropriate and effective steps to remedy the
non-compliance. The NBA Entities or their representatives are authorized to
engage in monitoring activities to confirm compliance with this Code, including
on-site inspections of manufacturing facilities and residential facilities,
audits of records relating to employment matters and private Interviews with
employees at all levels. Product Suppliers shall retain and make available to
the NBA Entities or their representatives, either on site or at agreed upon
locations, all documentation that may be required to assess whether or not the
Product Supplier is in compliance with this Code.

    7.     FAILURE
TO COMPLY

    The NBA
Entities reserve the right, in addition to all other legal and contractual
rights, to terminate its relationship with any Product Supplier found to be in
violation of this Code.

    

    
 

     

    

    

    

    12

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