EXHIBIT 10.1
FORM OF MASTER EQUIPMENT LEASE AND
SOFTWARE LICENSE AGREEMENT
MASTER EQUIPMENT LEASE
AND
SOFTWARE LICENSE AGREEMENT
THIS MASTER EQUIPMENT LEASE AND SOFTWARE LICENSE AGREEMENT (THE
"AGREEMENT") is made this ____ day of _____________, 2002 by and between
Crystalix USA Group, Inc., a Nevada corporation having an office located at 0000
Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxx 00000 (hereinafter referred
to as "CUSA"), and __________________________________________, an individual
having an office at _______________________________________ (hereinafter
referred to as "Affiliate ").
RECITALS
WHEREAS, CUSA is a licensee and distributor of the LaserMark II, which
is a subsurface laser engraving machine (the "LaserMark II"); and
WHEREAS, CUSA is the owner of certain proprietary software, which
enables the LaserMark II to produce 2-Dimensional and 3-Dimensional facial
images inside glass cubes (the "Software"); and
WHEREAS, Affiliate is desirous of leasing the LaserMark II and related
equipment from CUSA, a true and correct list of said equipment included in the
lease is attached hereto as Exhibit 1 (the "LaserMark II System"); and
WHEREAS, CUSA is willing to license Affiliate to utilize the Software
in connection with the lease of the LaserMark II System and otherwise provide
Affiliate with training and support; and
WHEREAS, after good faith negotiations, CUSA and Affiliate have agreed
upon certain terms and conditions which will govern Affiliate's use of the
LaserMark II System and Software during the Term of this Agreement, as
hereinafter defined; and
WHEREAS, the parties have reduced these terms and conditions to writing
by entering into this Agreement together with the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing recitals along with
the mutual promises and understandings herein contained and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
CRYSTALIX USA GROUP
0000 Xxxxx Xxxxxxx Xx#000, Xxx Xxxxx, XX 00000
Tel: 000.000.0000 Fax 000.000.0000
Web: XXX.XXXXXXXXXXXX.XXX Email: xxxx@xxxxxxxxxxxx.xxx 021104
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AGREEMENT:
1. RECITALS. The above-listed Recitals are incorporated into
this Agreement in their entirety and expressly made a part hereof.
2. TERM. This Agreement shall commence on the date the LaserMark
II System and Software are delivered and set up at Affiliate's place of business
and shall continue for sixty (60) months thereafter (the "Term"). Affiliate
shall have the right to extend the Term for successive one (1) year periods
thereafter, provided the following conditions are met: (a) Affiliate is in good
standing under the terms of this Agreement; (b) Affiliate has continuously sold
an average of two hundred (200) Units (as hereinafter defined) during each month
of the previous two (2) years; and (c) Affiliate provides CUSA with written
notice of its intention to extend the Term of this Agreement within sixty (60)
days prior to the expiration of the then current term.
3. LEASE OF LASERMARK II SYSTEM/ADDITIONAL EQUIPMENT. In
consideration for a one-time, lump sum, non-refundable, flat lease fee of Two
Hundred Thirty Five Thousand Dollars ($235,000.00), which shall be paid in two
(2) equal installments of One Hundred Seventeen Thousand Five Hundred Dollars
($117,500.00), the first of which is due upon the execution of this Agreement,
with the balance due upon delivery of the LaserMark II System, CUSA agrees to
lease the LaserMark II System to Affiliate and Affiliate agrees to lease the
LaserMark II System from CUSA, subject to the terms and conditions contained
herein. CUSA agrees to cause the LaserMark II System and Software to be
delivered and operational at Affiliate's business location by no later than
eight (8) weeks from the date of this Agreement. Ownership of the LaserMark II
System shall at all times be vested in CUSA and Affiliate agrees to execute any
and all documents reasonably required by CUSA to evidence this ownership,
including the preparation, execution and filing of UCC-1 Forms. Affiliate shall
not allow any liens or encumbrances to be placed upon the LaserMark II System,
or any part thereof. Affiliate shall immediately remove any and all liens which
may be placed upon the LaserMark II System or be deemed to be in breach of this
Agreement. Affiliate hereby agrees to purchase any and all additional equipment,
including but not limited to digital cameras and workstations, exclusively from
CUSA.
4. LICENSE OF SOFTWARE. In consideration for the Software License
Fee (as hereinafter defined), CUSA hereby grants to Affiliate the license to
utilize the Software during the Term of this Agreement, subject to the following
conditions.
(a) RESTRICTED USE. Affiliate shall use the Software in connection with
the LaserMark II System to manufacture and sell Two-Dimensional ("2-D")
and Three-Dimensional ("3-D") facial images (the "Facial Images").
Affiliate is strictly prohibited from utilizing the Software and/or
LaserMark II System for any use other than to manufacture and sell
Facial Images from equipment purchased and/or leased from CUSA.
Affiliate shall specifically not be allowed to utilize the Software in
connection with equipment obtained from any source other than through
CUSA.
CRYSTALIX USA GROUP
0000 Xxxxx Xxxxxxx Xx#000, Xxx Xxxxx, XX 00000
Tel: 000.000.0000 Fax 000.000.0000
Web: XXX.XXXXXXXXXXXX.XXX Email: xxxx@xxxxxxxxxxxx.xxx 021104
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(b) EXCLUSIVE TERRITORY: Affiliate shall enjoy the exclusive rights to
manufacture and sell the Facial Images in the County of ________, State
of __________ (the "Territory"). Affiliate's initial location shall be
located at: ___________________________________. It should be noted
that Affiliate shall continue to enjoy the exclusive right to
advertise, manufacture and sell the Units and utilize the Software and
LaserMark II System within the Territory, provided Affiliate opens
additional locations each six (6) months during the Term of this
Agreement, along with any extensions thereto. In the unlikely event
Affiliate fails to open a new location within any six (6) month period,
Affiliate's exclusive rights shall be limited to the city limits of
those locations opened prior to that date and CUSA shall be free to
license others to utilize the Software and Equipment in any and all
other cities within the Territory, without being liable to Affiliate
for any loss Affiliate may experience as a direct or indirect result of
CUSA's grant of these subsequent licenses.
(c) SOFTWARE LICENSE FEE. In consideration for the license to utilize the
Software to manufacture and sell Facial Images, Affiliate agrees to pay
CUSA a proprietary software license Fee of Eighteen Dollars and Fifty
Cents ($18.50) for each Unit manufactured and sold by Affiliate (the
"Software License Fee"). For purposes of this Agreement, a Unit shall
be defined as an image etched inside a plastic or glass cube produced
by the LaserMark II System.
(d) PAYMENT TERMS. The Software License Fee shall be paid by no later
than the seventh (7th) of each calendar month, for the sale of Units
during the preceding month. Each monthly payment shall be submitted
with a detailed accounting of how the Software License Fee was
calculated for that respective month. Acceptance of amounts by CUSA
shall not preclude CUSA from questioning the correctness of same at any
time. All amounts shall be made without set-off of any amount
whatsoever, whether based upon any claimed debt or liability of CUSA to
Affiliate. Any and all late payments will be subject to a Five Percent
(5%) late penalty and shall accrue interest at the rate of 1.5% per
month.
(e) TAXES. Affiliate shall be responsible for any and all taxes assessed
in connection with the sale of Units and/or the operation of the
Machine. The Software License Fee, along with any and all other fees
payable from Affiliate to CUSA hereunder, shall be made free and clear
of any and all applicable taxes, including but not limited to excise,
sales, use and/or income tax.
5. PURCHASE OF SUPPLIES. During the Term of this Agreement, Affiliate
agrees to purchase the following supplies for use in the manufacture and sale
of the Units exclusively from CUSA:
(a) GLASS CUBES. Affiliate shall purchase all of its glass cubes from CUSA,
which CUSA warrants will be of good quality and free from defects. In
the event of a defective glass cube, Affiliate shall be required to
return the defective product back to CUSA in order for the defect to be
verified and credit to be applied. CUSA agrees to sell the glass cubes
to Affiliate on a most favored nations basis with CUSA's other
Affiliate's, which may be amended from time to time in CUSA's sole
discretion. All glass cubes shall be delivered F.O.B.
CRYSTALIX USA GROUP
0000 Xxxxx Xxxxxxx Xx#000, Xxx Xxxxx, XX 00000
Tel: 000.000.0000 Fax 000.000.0000
Web: XXX.XXXXXXXXXXXX.XXX Email: xxxx@xxxxxxxxxxxx.xxx 021104
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(b) LIGHT BASES, COLLECTION IMAGES AND RELATED PRODUCTS. Affiliate shall
purchase Light Bases, Collection Images and Related Products from CUSA
at such prices and in such minimum quantities as are specified on
Exhibit 2. Affiliate agrees to sell these products at such minimum
prices as are set forth by CUSA from time to time in its sole
discretion.
(c) EXCLUSIVITY. Affiliate shall purchase all of its glass cubes, light
bases, collection images and related products exclusively from CUSA
6. MARKETING AND PROMOTION. CUSA shall be entitled to create, and/or
engage third parties to create, advertising campaigns, including, without
limitation, television, radio and print campaigns, in connection with the
advertising and promotion of the manufacture and sale of the Units. Licensee
shall obtain CUSA's prior written approval of any and all such advertising
campaigns. Affiliate agrees to work closely with CUSA regarding all promotional
activities on behalf of CUSA. Affiliate agrees that any advertising campaigns
including internet web sites, flyers, brochures, coupons, audio-visual and other
forms of advertising are not to be distributed without the prior written
approval of CUSA.
7. INSURANCE. Affiliate shall, at is own cost and expense, immediately
insure the LaserMark II System for the full value against loss, or damage by
fire, theft, water, acts of vandalism, or acts of nature (force majeure), with a
qualified, reputable insurance company and shall deliver the said insurance
policy to CUSA together with the paid receipt for premiums thereunder. In
connection with the advertisement, production, manufacturing and sale of the
Units, along with the operation of the Equipment and Software, Affiliate shall
be solely responsible for procuring any and all necessary insurance. Affiliate
shall at all times while this Agreement is in effect and for one (1) year
thereafter, obtain and maintain at its own expense, from a qualified insurance
carrier with a Best rating of at least "B", insurance, including, without
limitation, insuring the LaserMark II System for the full value against loss, or
damage by fire, theft, water, acts of vandalism, or acts of nature (force
majeure), products, personal injury, advertising, and contractual liability
coverage, which includes as an additional insured CUSA and its subsidiaries,
affiliates, officers, directors, employees, representatives and agents. The
amount of coverage shall be not less than $1,000,000 combined single limit (with
no deductible amount) for each single occurrence. The policy shall provide for
thirty (30) days written notice to CUSA from the insurer by registered or
certified mail, return receipt requested, in the event of any modification,
cancellation or termination. Upon execution of this Agreement, Affiliate shall
furnish CUSA with a certificate of insurance issued by the carrier evidencing
the same. In no event shall Affiliate manufacture, advertise, distribute or sell
any Units prior to CUSA's receipt of such certificate of insurance. Affiliate
expressly indemnifies CUSA, and holds CUSA harmless, from and against any and
all claims and/or damages in connection with the advertising, manufacturing
and/or sale of the Units produced by Affiliate using the Equipment and Software.
8. INDEMNIFICATION.
(a) CUSA shall indemnify, hold harmless and defend Affiliate, and its
parents, subsidiaries, affiliates, officers, directors and employees,
against any claims, liabilities, demands,
CRYSTALIX USA GROUP
0000 Xxxxx Xxxxxxx Xx#000, Xxx Xxxxx, XX 00000
Tel: 000.000.0000 Fax 000.000.0000
Web: XXX.XXXXXXXXXXXX.XXX Email: xxxx@xxxxxxxxxxxx.xxx 021104
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causes of action, judgments, settlements and expenses (including, but
not limited to, reasonable attorneys' fees and court costs) arising
solely out of Affiliate's use of the Equipment and/or Software as
authorized hereunder; provided, however, that Affiliate shall notify
CUSA in writing within ten (10) days after Affiliate receives
notification of any claim or suit relating to Affiliate's use of the
Equipment and/or Software. CUSA shall undertake and control the defense
and settlement of any such claim or suit and Affiliate shall cooperate
fully with CUSA in connection herewith. In no event shall CUSA be
liable for any consequential damages or loss of profits, which
Affiliate may suffer arising out of same. The foregoing indemnity shall
not be construed to cover any claim with respect to which Affiliate has
committed to indemnify CUSA under Paragraph 8(b) below.
(b) During and after the Term hereof, Affiliate shall indemnify and hold
harmless, CUSA, its subsidiaries, affiliates, officers, directors,
representatives, employees and agents (each, an "Indemnitee" and
collectively "Indemnitees") from and against any and all claims,
liabilities, losses, demands, causes of action, judgments, settlements
and expenses (including, but not limited to, reasonable attorneys' fees
and court costs) ("Claim") arising out of or in connection with (i) the
design, manufacture, packaging, distribution, shipment, advertising,
promotion, sale, or exploitation of the Units (ii) alleged defects or
deficiencies in the Equipment, Software and/or Units or the use
thereof, the failure of the Equipment, Software and/or Units to meet
any applicable laws or standards, or false advertising, fraud,
misrepresentation or other claims related to the Equipment, Software
and/or Units not involving a claim of right to the Software, (iii) any
breach of any representation, warranty, or covenant made by Affiliate
hereunder, including without limitation in connection with the
advertising, manufacture and/or sale of the Units; or (iv) the failure
of Affiliate to perform any of its covenants or obligations contained
in this Agreement. Without limiting the generality of the foregoing,
Affiliate's indemnity shall specifically apply to claims relating to or
based upon defects in the Units, whether hidden or obvious, and despite
CUSA's approval of the Units, it being agreed that any governmental
order of recall or injunction against distribution and/or sale shall,
as between Affiliate and CUSA, be deemed conclusive proof of such
defect for purposes of invoking Affiliate's indemnity hereunder. The
foregoing indemnity shall not be construed to cover any claim with
respect to which CUSA has committed to indemnify Affiliate under
Paragraph 8(a) above. If any Claim is initiated against any Indemnitee
with respect to which such Indemnitee may make a claim against
Affiliate pursuant to this Paragraph 8(b), then the Indemnitee shall
give prompt written notice of such Claim to the Affiliate; provided,
however, that the failure to so notify the Affiliate shall not relieve
the Affiliate from any liability under this Paragraph 8(b) unless, and
only to the extent that, such failure results in prejudice to or
forfeiture of, substantive rights or defenses of the Affiliate.
Affiliate, at Affiliate's own expense, shall have the option to assume
the defense of such Claim. If Affiliate assumes the defense of such
Claim, (i) Affiliate shall keep the Indemnitee informed of all material
developments and events relating to such Claim, (ii) the Indemnitee
shall have the right to participate, at its own expense, in the defense
of such Claim (but such participation shall not be deemed to give the
Indemnitee the right to control such defense), (iii) the Indemnitee
shall cooperate as
CRYSTALIX USA GROUP
0000 Xxxxx Xxxxxxx Xx#000, Xxx Xxxxx, XX 00000
Tel: 000.000.0000 Fax 000.000.0000
Web: XXX.XXXXXXXXXXXX.XXX Email: xxxx@xxxxxxxxxxxx.xxx 021104
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reasonably requested by Affiliate in the defense of such Claim, and
(iv) Affiliate shall not settle such Claim without the prior written
consent of the Indemnitee, which consent shall not be unreasonably
withheld. If Affiliate fails to assume the defense of such Claim, or
fails to diligently defend such Claim, Indemnitee may assume the
defense of such Claim and Affiliate shall reimburse Indemnitee for all
reasonable expenses (including reasonable attorneys' fees which may
include, without limitation, an allocation for in-house counsel) as
such expenses are incurred, relating to the defense of such Claim.
9. WARRANTY. CUSA makes no express or implied warranties of any kind,
including without limitation those of merchantability or fitness for purpose or
use or condition performance suitability or design, or conformity to any law,
rule, regulation, agreement or specification, or of infringement of any Patent,
Trade Secret, Trademark, Copyright, or other intangible property right. CUSA
shall have no liability to Affiliate, nor any other party, nor shall Affiliate
xxxxx payments, for any loss, claim or damage of any fixture caused or alleged
to be caused directly, indirectly, incidentally or consequentially by the
LaserMark II System and/or Software, any inadequacy thereof, deficiency or
defect therein (whether known or knowable by CUSA), by any incident whatsoever
arising in connection therewith, whether in strict liability or otherwise, or in
any way relating to or arising out of this Agreement.
10. TERMINATION.
10.1 In addition to any and all other remedies available to it
hereunder, CUSA shall have the right to immediately terminate this Agreement
upon written notice to Affiliate upon the occurrence of any of the following:
(a) Affiliate presents, makes, sells, offers for sale,
uses or distributes the Equipment, Software and/or Units
without having the prior written approval of CUSA or continues
to present, make, sell, offer for sale, use or distribute the
same after receipt of notice from CUSA withdrawing approval of
same.
(b) Affiliate becomes subject to any voluntary or
involuntary order of any government agency involving the
Equipment, Software and/or Units because of safety, health or
other hazards or risks to the public.
(c) CUSA discovers that the Counter on the Equipment has
been tampered with and/or if an accounting of the books and
records of Affiliate indicate that Affiliate has manipulated
its sale of the Units to the detriment of CUSA.
(d) Affiliate conducts sales of Units and/or operates the
Equipment and/or Software outside his or her designated area
and/or territory by means of internet, advertising or
un-authorized showing or use of the Equipment and/or Software
at Trade Shows or any other manifestations without the written
consent of CUSA
CRYSTALIX USA GROUP
0000 Xxxxx Xxxxxxx Xx#000, Xxx Xxxxx, XX 00000
Tel: 000.000.0000 Fax 000.000.0000
Web: XXX.XXXXXXXXXXXX.XXX Email: xxxx@xxxxxxxxxxxx.xxx 021104
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10.2 In addition to any and all other remedies available to it
hereunder, on seven (7) days prior written notice to Affiliate, CUSA may
terminate this Agreement (in which case such termination shall be effective
immediately upon expiration of the seven (7) day notice period), upon the
occurrence of any of the following circumstances, provided that during such
seven (7) day period, Affiliate fails to cure the breach to CUSA's
satisfaction:
(a) Affiliate fails to immediately discontinue the
advertising, distribution or sale of the Units which do not
contain the appropriate legal legend or notice.
(b) Affiliate breaches any of the provisions of this
Agreement relating to the unauthorized assertion of rights in
the Software.
(c) Affiliate fails to make timely payment of amounts
when due or fails to make timely submission of Reports when
due. However, in the event Affiliate has previously been given
notification and time to cure a prior breach relating to
Affiliate's failure to remit a payment and/or Report when due,
then CUSA may terminate this Agreement immediately upon notice
to Affiliate and no further time to cure need be given to
Affiliate by CUSA regardless of whether or not Affiliate cured
any prior failure or breach.
10.3 In addition to any and all other remedies available to it
hereunder, on thirty (30) days prior written notice to Affiliate, CUSA may
terminate this Agreement (in which case such termination shall be effective
immediately upon expiration of the thirty (30) day notice period), upon the
occurrence of any of the following circumstances, provided that during such
thirty (30) day period, Affiliate fails to cure the breach to CUSA's
satisfaction:
(a) Affiliate fails to obtain or maintain insurance as
required hereunder.
(b) A petition in bankruptcy is filed by or against
Affiliate; Affiliate is adjudicated bankrupt or insolvent, or
makes an assignment for the benefit of creditors or an
arrangement pursuant to any bankruptcy law; Affiliate
discontinues its business; or a receiver is appointed for
Affiliate or Affiliate's business and such receiver is not
discharged within thirty (30) days.
(c) Affiliate or any of its controlling shareholders,
officers, directors or employees take any actions in
connection with the manufacture, sale, distribution or
advertising the Units which damages or reflects adversely upon
CUSA and/or the Software.
(d) Affiliate violates any of its other obligations or
breaches any of its covenants, agreements, representations or
warranties hereunder.
(e) Affiliate discontinues the use of the LaserMark II
System during any consecutive thirty (30) day period, without
the prior written consent of CUSA.
CRYSTALIX USA GROUP
0000 Xxxxx Xxxxxxx Xx#000, Xxx Xxxxx, XX 00000
Tel: 000.000.0000 Fax 000.000.0000
Web: XXX.XXXXXXXXXXXX.XXX Email: xxxx@xxxxxxxxxxxx.xxx 021104
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(f) The Units produced by Affiliate are of inferior
quality as determined in the sole discretion of CUSA.
11. EFFECT OF TERMINATION.
(a) On expiration or termination of this Agreement, all amounts owing
shall be immediately due and payable without set-off of any kind and no
amounts paid to CUSA shall be refunded to Affiliate.
(b) On expiration or termination of this Agreement, Affiliate shall have no
further right to exercise the rights licensed hereunder or otherwise
acquired in relation to this Agreement and such rights shall forthwith
revert to CUSA.
(c) Upon the termination of this Agreement, whether by the natural elapse
of time or otherwise, Affiliate agrees to return the LaserMark II
System in the same good working order and condition, reasonable wear
and tear excepted. In the event the LaserMark II System, or any piece
thereof, is returned in a damaged state beyond reasonable wear and
tear, CUSA shall cause the same to be repaired and/or replaced, at
CUSA's option, all at the sole cost and expense of Affiliate. If
Affiliate fails to return any item of the LaserMark II System without
proper justification, Affiliate hereby grants to CUSA the right to
charge Affiliate the full replacement value of the missing item(s)
along with all costs related thereto, including any loss of rental
profits caused by the loss of the equipment. All materials supplied
to Affiliate by CUSA hereunder shall be immediately returned to CUSA at
Affiliate's expense.
12. WARRANTY AND SERVICING OF LASERMARK II SYSTEM.
(a) XXXX xxxxx warrants that the LaserMark II System shall be in
good working order and condition upon delivery to Affiliate and that
the LaserMark II System will come with the original manufacturer's
warranty (twelve-month repair or replacement guaranty). During this
twelve (12) month manufacturer's warranty period, CUSA agrees to
service the LaserMark II System at its sole cost and expense for all
malfunctions other than human error or misinterpretation of start-up
procedures. Commencing on the thirteenth (13th) month of the Term and
continuing for each month thereafter, Affiliate shall pay CUSA a
monthly service fee of One Thousand Dollars ($1,000.00), to maintain
the LaserMark II System, which includes servicing of the vital parts of
the LaserMark II System such as Lenses and Laser components. This
service includes any and all labor required to service and/or repair
the LaserMark II System, but specifically does not include the cost of
replacement parts which is the responsibility of Affiliate.
(b) In the unlikely event of disrepair, CUSA guarantees the
presence of a certified technician within 72 hours of receiving written
or electronic mail notification from Affiliate. Affiliate shall not be
entitled to any compensation for loss of business if the LaserMark II
System is repaired within five (5) days after CUSA receives
notification from Affiliate. If CUSA has failed to fix the LaserMark II
System or replace it with a another LaserMark II System, then CUSA
agrees to compensate Affiliate in an amount
CRYSTALIX USA GROUP
0000 Xxxxx Xxxxxxx Xx#000, Xxx Xxxxx, XX 00000
Tel: 000.000.0000 Fax 000.000.0000
Web: XXX.XXXXXXXXXXXX.XXX Email: xxxx@xxxxxxxxxxxx.xxx 021104
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equal to Affiliate's average daily sales during the proceeding ninety
(90) day period for each day thereafter that CUSA fails to either fix
or replace the LaserMark II System.
(c) If CUSA determines that the LaserMark II System is in disrepair as a
result of Affiliate's violation of the Rules and Conditions which
govern the operation of the LaserMark II System, then the warranty
specified in Paragraph (a) above shall not apply. The Rules and
Conditions for optimal performance of the LaserMark II System are
contained in the LaserMark II System Manual, a true and correct copy of
which has been delivered to Affiliate with the LaserMark II System.
These Rules and Conditions include, but are not limited to: (i) Keeping
the LaserMark II System in a dry and dust free environment; (ii)
Keeping the water cooled system of the laser and the coolant fluid
level at the maximum level; (iii) Keeping all spillable liquids of any
kind away from the LaserMark II System components; and (iv) Strict
adherence to the correct diode, trigger and frequency settings of the
laser so that the LaserMark II System produces optimal results and
maximum resolution inside the glass cubes.
13. TECHNICAL SUPPORT. CUSA shall provide Affiliate with an initial three
(3) to four (4) day Software training seminar at CUSA's corporate headquarters
in Las Vegas, Nevada so as to train Affiliate on the proper operation of the
LaserMark II System and Software. While this Software training seminar will be
free of charge to Affiliate, Affiliate shall be responsible for its own travel
and hotel accommodations to and from this training seminar. In addition to this
initial training seminar, CUSA shall provide Affiliate with all updates to the
Software, along with 365 days per year technical support during the Term of this
Agreement, along with any extensions thereto.
14. REFERRAL FEES. Affiliate agrees to actively promote CUSA products to
all potential customers interested in the purchase of the LaserMark II System
and to promptly refer any and all such customers identities and pertinent
information to CUSA (a "Referred Party"). In the event CUSA is successful in
entering into an Agreement with a Referred Party to lease a LaserMark II System
and license for the Software, Affiliate shall be entitled to a referral fee
equal to Five Percent (5%) of: (a) The equipment lease fee (which shall be no
less than $195,000); and (b) All Software License Fees earned from the Referred
Party (collectively, the "Referral Fees"). CUSA agrees to pay Affiliate these
Referral Fees within ten (10) days of CUSA's receipt of the same from the
Referred Party. Affiliate shall not be entitled to receive any Referral Fees,
which are not ultimately received by CUSA and acknowledges that CUSA shall be
under no obligation to Affiliate, legally or otherwise, to pursue collection
efforts for these unpaid Referral Fees. If Affiliate refers three (3) Referred
Parties whom ultimately enter into equipment lease and software licensing
agreement with CUSA, Affiliate's Software License Fees shall be increased to
Eight Percent (8%) for every subsequent Referred Party.
15. AUDIT RIGHTS. The LaserMark II System will be equipped with a counter
that will register each unit produced by Affiliate. Affiliate agrees that CUSA
shall have the right to check the counter during Affiliate's normal business
hours at any time during the term of this Agreement. Additionally, Affiliate
shall keep and maintain accurate books of account and records covering all
transactions relating to this Agreement. CUSA or its designee
CRYSTALIX USA GROUP
0000 Xxxxx Xxxxxxx Xx#000, Xxx Xxxxx, XX 00000
Tel: 000.000.0000 Fax 000.000.0000
Web: XXX.XXXXXXXXXXXX.XXX Email: xxxx@xxxxxxxxxxxx.xxx 021104
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shall be entitled to (i) audit and inspect such books and records at any time or
times during or after the Term during reasonable business hours and upon five
(5) days prior written notice to Affiliate, and (ii) make copies and summaries
of such books and records. All such books of account and records shall be
retained by CUSA for a minimum of three (3) years after expiration or
termination of this Agreement. If CUSA's duly authorized representative
discovers a deficiency in the amounts paid to CUSA for any period under audit
(an "Audit Deficiency"), Affiliate shall promptly pay such Audit Deficiency to
CUSA and, if such Audit Deficiency is three percent (3%) or more of the amounts
paid to CUSA for such audit period, Affiliate shall also reimburse CUSA for all
costs and expenses incurred by CUSA in connection with such audit. In
calculating costs for an internal auditor to perform such audit, CUSA shall xxxx
its personnel costs incurred in performing such audit on an hourly basis at the
hourly salaried rate of the personnel performing such services multiplied by a
factor of 1.75. If such Audit Deficiency is twenty percent (20%) or more of the
amounts paid to CUSA for such audit period, then in addition to the above, CUSA
may, at its sole option, immediately terminate the Agreement upon notice to
Affiliate, even if Affiliate tenders the Audit Deficiency and associated costs
and expenses to CUSA. Without prejudice to any other rights of CUSA hereunder,
time is of the essence regarding all payments due hereunder and Affiliate shall
pay interest on any Audit Deficiency, as well as on all delinquent payments
hereunder, at two percent (2%) plus the "prime rate" established by the Bank of
America in Las Vegas, Nevada, compounded annually at the rate from time to time
in effect and calculated from the date on which such payment was due.
16. SOFTWARE USE/CREDIT. Affiliate shall have the right, during the Term
to use the Software solely in connection with the manufacturing and sale of the
Units, including the advertising and promotion of the same. CUSA shall have the
right to approve, in writing, any and all advertisement materials. Affiliate
agrees that CUSA shall be given credit as specified by CUSA on and in all
programs and other advertising materials created in connection with the
promotion and sale of the Units. In addition, any and all advertising, promotion
and other materials created in connection with the manufacture and sale of the
Units, including, without limitation, all packaging and advertising materials
shall contain the following credits: "________________________________."
17. COPYRIGHT/TRADEMARKS/RESERVED RIGHTS.
(a) Affiliate's use of the Software shall inure exclusively to the benefit
of CUSA, and Affiliate shall not acquire any rights therein. Affiliate
recognizes the value of the goodwill associated with the Software, and
that the Software has acquired secondary meaning in the mind of the
public. Affiliate agrees, during the Term and thereafter, never to
contest the rights of CUSA in such Software or the validity of the
license herein granted to it. Affiliate shall not at any time apply for
any registration of any copyright, trademark, patent, or any other
intellectual property right, whether recognized currently or in the
future, or other designation which would affect the ownership or rights
of CUSA in and to the Software nor file any document with any
governmental authority or otherwise to take any action which would
adversely affect any of such ownership or rights in and to the
Software, or assist anyone else in doing so.
CRYSTALIX USA GROUP
0000 Xxxxx Xxxxxxx Xx#000, Xxx Xxxxx, XX 00000
Tel: 000.000.0000 Fax 000.000.0000
Web: XXX.XXXXXXXXXXXX.XXX Email: xxxx@xxxxxxxxxxxx.xxx 021104
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(b) Ownership of all intellectual property rights, whether recognized
currently or in the future, including, without limitation, copyright,
patent and trademark rights, in the Software, the LaserMark II System,
and in all artwork, packaging, copy, literary text, advertising
material and promotion material of any sort utilizing the Software,
including all such material developed by Affiliate, shall vest in CUSA
and title thereof shall be in the name of CUSA, or its respective
designees. All such items shall bear the copyright and trademark
notices specified by CUSA and any other legal notices which CUSA may
from time to time prescribe. Any and all additions to, and new
renderings, modifications or embellishments of the artwork shall,
notwithstanding their invention, creation and use by Affiliate or its
agents, be and remain the property of CUSA, and CUSA may use, and
license others to use the same, subject only to the provisions of this
Agreement. Affiliate shall enter into written agreements with all of
its employees and independent contractors (i) providing that all
performances, concepts, characters, artwork and designs created by them
in the course of Affiliate's manufacture and/or sale of the Units under
this Agreement shall be the property of CUSA either as works for hire
under United States copyright law or otherwise, and (ii) obligating
them to assign all such rights to CUSA. Upon the request of CUSA,
Affiliate shall submit to CUSA for CUSA's approval copies of all such
agreements prior to use thereof. Affiliate shall not permit any of its
employees or independent contractors to obtain or reserve, by written
or oral agreement or otherwise, any rights as "authors" or "inventors"
of any such artwork or designs (as such terms are used in present or
future United States copyright and/or patent statutes or judicial
decisions). Affiliate shall furnish to CUSA at CUSA's request, full
information concerning the invention and creation of such Units,
concepts, characters, artwork and designs, together with the originals
of assignments of all rights therein obtained from all such third
parties to CUSA.
(c) Affiliate shall assist CUSA, at CUSA's request and expense, in the
procurement and maintenance of CUSA's rights in the Software (including
all intellectual property rights, whether recognized currently or in
the future). In connection therewith, Affiliate shall, without
limitation, execute and deliver to CUSA in such form as it may
reasonably request, all instruments necessary to (i) effectuate
copyright and trademark protection, (ii) record Affiliate as a
registered user of any trademarks pursuant to this Agreement, or (iii)
cancel any such registration. Such registration shall be handled by
attorneys selected or approved by CUSA. CUSA makes no warranty or
representation that trademark or copyright protection shall be secured
in the Software.
(d) CUSA and Affiliate shall cooperate to ensure that third parties may not
unlawfully infringe on the Software or engage in any acts of unfair
competition involving the Software. Affiliate shall promptly notify
CUSA of any such infringements or acts of unfair competition by third
parties that comes to its attention. CUSA shall have the exclusive
right, exercisable at its discretion, to institute in its own name
and/or Affiliate's name and to control, all actions against third
parties relating to CUSA's copyrights, trademarks, and other
proprietary rights in and to the Software, at CUSA's expense. With
respect to any such actions, CUSA shall employ counsel of its own
choice to direct the handling of the litigation and any settlement
thereof. Company shall be entitled to
CRYSTALIX USA GROUP
0000 Xxxxx Xxxxxxx Xx#000, Xxx Xxxxx, XX 00000
Tel: 000.000.0000 Fax 000.000.0000
Web: XXX.XXXXXXXXXXXX.XXX Email: xxxx@xxxxxxxxxxxx.xxx 021104
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receive and retain all amounts awarded, if any, as damages, profits or
otherwise in connection with such suits. Affiliate shall not, without
CUSA's prior written consent, institute any suit or take any action on
account of such infringements, acts of unfair competition or
unauthorized uses. If, with CUSA's consent, Affiliate institutes, at
its sole cost and expense, such a suit or action, Affiliate shall be
entitled to recover all reasonable costs and expenses incurred in such
suit or action from any financial recovery awarded or obtained. CUSA
shall incur no liability to Affiliate by reason of CUSA's failure or
refusal to prosecute, or by CUSA's refusal to permit Affiliate to
prosecute, any alleged infringement by third parties, nor by reason of
any settlement to which CUSA may agree.
(e) CUSA can withdraw any or all elements of the Software, or any component
part thereof, from the terms of this Agreement if CUSA determines that
the exploitation therefore would or might violate or infringe the
copyright, trademark or other proprietary rights of third parties, or
subject CUSA to any liability or violate any law, court order,
government regulation or other ruling of any governmental agency, or
if, on account of the expiration or sooner termination of an agreement
between CUSA and a third party from whom CUSA has obtained certain
underlying rights relating to the exploitation of the Software
hereunder or otherwise, CUSA shall no longer have the right to act in
the capacity herein contemplated on behalf of any third party or
parties, or if CUSA determines that it cannot adequately protect its
rights in the Software under the copyright, trademark or other laws of
the Territory. Such a withdrawal shall not be deemed a breach of this
Agreement.
(f) Affiliate shall not use CUSA's name, or the Software, other than
as permitted hereunder and, in particular, shall not incorporate CUSA's
name, or the Software, in the Affiliate's corporate or business name in
any manner whatsoever. Affiliate agrees that in using the Software it
will in no way represent that it has any rights, title and/or interest
in or to the Software other than those expressly granted under the
terms of this Agreement. Affiliate further agrees that it will not use
or authorize the use, either during or after the Term, of any
configuration, trademark, trade name, or other designation confusingly
or substantially similar to CUSA's name or the Software, or any element
thereof.
(g) All copyrights, trademarks, service marks, trade names and the like
created by Affiliate or by the parties collectively specifically in
connection with the use of the LaserMark II System, Software and/or
sale of the Units (individually and collectively "Related Copyrights")
shall be registered in CUSA's name. CUSA reserves the exclusive right
to license the Related Copyrights for any and all media, including,
without limitation, publishing, merchandise, television, cable, film,
video and internet purposes.
(h) CUSA reserves all rights not expressly granted to Affiliate hereunder.
(i) CUSA shall not be prevented from granting third parties the right
to use the Software in any manner whatsoever, except as otherwise
provided herein.
(j) Affiliate acknowledges that the license granted herein does not include
any right, title, or interest in or to the Software, nor to any
intellectual property rights relating thereto,
CRYSTALIX USA GROUP
0000 Xxxxx Xxxxxxx Xx#000, Xxx Xxxxx, XX 00000
Tel: 000.000.0000 Fax 000.000.0000
Web: XXX.XXXXXXXXXXXX.XXX Email: xxxx@xxxxxxxxxxxx.xxx 021104
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including, without limitation, any copyrights, patents, and/or
trademarks therein or associated therewith. Furthermore, this Agreement
relates solely to the Software. Affiliate is not, by virtue of this
Agreement, acquiring any right whatsoever with respect to any motion
picture or television production, home video, publication, or other
endeavor which is based upon, derivative of, inspired by or otherwise
related to the Software ("Derivative Properties"). In this connection,
Affiliate expressly acknowledges that its license hereunder does not
include the right to use photographs, designs, materials, and artwork
from Derivative Properties to the extent such materials are different
from the Software. All right, title and interest in and to the
Derivative Properties is retained by CUSA.
(k) Affiliate agrees that CUSA is only granting those rights as are
specifically set forth herein and only for such period of time as
specifically stated herein. Upon the termination of this Agreement,
whether through the natural elapse of time or otherwise, all rights
conferred by CUSA hereunder will automatically revert back to CUSA
without the necessity of taking any affirmative action, including but
not limited to the right to use the name Crystalix or any variation
thereof.
18. CONFIDENTIALITY. All "Confidential Information" (defined below)
that CUSA or any of its "Representatives" (defined below) furnishes to Affiliate
(including without limitation any such information furnished prior to the date
of this Agreement) shall be used by the Affiliate solely in connection with the
furtherance of the Agreement. Affiliate shall take reasonable steps to ensure
that all of CUSA's Confidential Information is kept confidential; provided,
however, that such information may be disclosed if required by law, rule,
regulation or court order, or to those representatives, counsel, directors,
officers, employees and agents (each, a "Representative," and collectively, the
"Representatives") of Affiliate who have a need to know such information in
connection with the Agreement only if each such Representative is informed by
Affiliate of the confidential nature of such information and of the
confidentiality undertakings of Affiliate contained herein. Affiliate shall be
responsible for any breach of this Agreement by its Representatives.
As used herein, "reasonable steps" means the steps that the Affiliate
takes to protect its own, similar confidential and proprietary information,
which shall not be less than a reasonable standard of care. As used herein,
"Confidential Information" means any of CUSA's proprietary or confidential
information, technical data, trade secrets or know-how, including, but not
limited to, research, production plans, productions, service plans, services,
customer lists and customers, markets, software, developments, inventions,
processes, formulas, technology, designs, drawings, engineering, marketing,
distribution and sales methods and systems, sales and profit figures, finances
and other business information disclosed to Affiliate by or on behalf of CUSA,
either directly or indirectly, in writing, orally or by drawings or inspection
of documents or other tangible property. However, "Confidential Information"
does not include any of the foregoing items which: (i) prior to disclosure, is
known to the public; (ii) after disclosure, becomes known to the public or
otherwise ceases to be a trade secret, through no act or omission of Affiliate
in violation of this Agreement; (iii) is required to be disclosed pursuant to
applicable laws, rules or regulations or government requirement or court order
(provided, however, that Affiliate shall promptly advise CUSA of its notice of
any such requirement or order); (v) is already rightfully in
CRYSTALIX USA GROUP
0000 Xxxxx Xxxxxxx Xx#000, Xxx Xxxxx, XX 00000
Tel: 000.000.0000 Fax 000.000.0000
Web: XXX.XXXXXXXXXXXX.XXX Email: xxxx@xxxxxxxxxxxx.xxx 021104
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Affiliate's possession at the time of disclosure; (vi) is independently
developed by or for Affiliate; or (vii) is received by Affiliate from another
person or entity whom Affiliate reasonably believes is not obligated to CUSA
to keep the same confidential.
Upon the termination of this Agreement, Affiliate shall promptly
deliver to CUSA all Confidential Information in the possession of Affiliate, in
whatever medium, including any and all copies thereof, and shall cause all
summaries or synopses thereof to be either delivered to CUSA or destroyed. Such
destruction shall be confirmed in writing by Affiliate to CUSA. The provisions
of this Agreement shall survive any such termination, such return of
Confidential Information and such destruction of summaries and synopses thereof
for a period of two (2) years from and after the date of this Agreement.
19. NON-COMPETE/NON-CIRCUMVENTION. Affiliate acknowledges that the
representations contained in this Agreement, along with the training,
proprietary information and trade secrets CUSA will be sharing with Affiliate
pursuant to the express terms of this Agreement constitute a material inducement
to CUSA to enter into this Agreement. Each party has carefully considered the
nature and extent of the restrictions, rights and revenues conferred upon them
under this Agreement and hereby acknowledge and agree that: the same are
reasonable in time and territory; are designed to eliminate competition which
otherwise would be unfair to the other party; do not stifle the inherent skill
and experience of such party; would not operate as a bar to such parties sole
means of support; are fully required to protect the legitimate interest of such
party; and do not confer a benefit upon such party disproportionate to the
detriment to the other party. Affiliate further agrees that during the Term of
this Agreement and for a period of five (5) years thereafter, it will not, on
behalf of itself or on behalf of any other person, company, corporation,
partnership, or other entity or enterprise, directly or indirectly, as a
proprietor, stockholder, partner, consultant or otherwise, compete with CUSA by
utilizing the LaserMark II System, Software and/or any equipment or software
programs similar in nature to the LaserMark II System or Software in any manner
which may be construed in any way to be competitive with CUSA.
20. VIOLATION OF COVENANTS. If any of the covenants or agreements contained
in Paragraphs 18 or 19 hereof are violated, Affiliate agrees and acknowledges
that such violation or threatened violation will cause irreparable injury to
Affiliate and that the remedy at law for any such violation or threatened
violation would be inadequate, and that Affiliate will be entitled, in addition
to any other remedies, to injunctive relief without the necessity of proving
actual damages. Affiliate agrees that the provisions of this Paragraph shall
survive the expiration or termination of this Agreement or any part thereof,
without regard to the reason therefore. CUSA would be entitled to an injunction
to be issued by any court of competent jurisdiction, restraining Affiliate from
committing or continuing any such violation of this Agreement.
21. ASSIGNMENT. Affiliate's rights and obligations hereunder are personal
to Affiliate and shall not be assigned to any affiliate of Affiliate (including,
without limitation, subsidiary and parent companies, and partnerships, joint
ventures and the like, in which Affiliate has an interest.) Affiliate's rights
and obligations hereunder shall not be sublicensed, assigned, mortgaged or
otherwise transferred or encumbered by Affiliate or by operation of law unless
otherwise previously agreed in writing by CUSA. CUSA reserves the right to
assign this
CRYSTALIX USA GROUP
0000 Xxxxx Xxxxxxx Xx#000, Xxx Xxxxx, XX 00000
Tel: 000.000.0000 Fax 000.000.0000
Web: XXX.XXXXXXXXXXXX.XXX Email: xxxx@xxxxxxxxxxxx.xxx 021104
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Agreement to any third party and to hypothecate or pledge this Agreement as
collateral for any purpose. In the event of any such assignment, Affiliate shall
pay all amounts due hereunder as directed by CUSA. This Agreement shall be
binding upon and shall inure to the benefit of the successors and assigns of
CUSA.
22. MODIFICATION AND WAIVER. This Agreement contains the complete and
exclusive statement of the Agreement between the parties with respect to the
subject matter hereof, and supersedes any previous understandings,
communications, commitments or agreements, oral or written. No term or condition
of this Agreement will be considered as waived unless such waiver is in writing
and duly executed by an officer of the waiving party. Any waiver by either party
of a breach of any term or condition of this Agreement will not be considered as
a waiver of any subsequent breach of the Agreement or any other term or
condition thereof.
23. GOVERNING LAW. This Agreement, and all questions relating to its
validity, interpretation, performance and enforcement (including, without
limitation, provisions concerning limitations of action), shall be governed by
and construed in accordance with the laws of the state of Nevada.
24. NOTICES. Any notice, consent, approval, request, demand or other
communication required or permitted hereunder must be in writing to be effective
and shall be deemed delivered and received when: (a) Personally delivered or if
delivered by facsimile, when electronic confirmation is actually received by the
party to whom notice was sent, or (b) If delivered by mail whether actually
received or not, at the close of business on the third (3rd) business day
following a day when placed in the United States Mail, postage prepaid,
certified or registered mail, return receipt requested, at the addresses set
forth below (or to such other address as any party shall specify by written
notice so given), and shall be deemed to have been delivered as of the date so
personally delivered or mailed. The address of CUSA for purposes of this
paragraph is as follows: Crystalix USA Group, Inc., 0000 Xxxxx Xxxxxxx Xxxxxx,
Xxxxx 000, Xxx Xxxxx, Xxxxxx 00000, with a courtesy copy to: Xxxxxxxxxxx X.
Xxxxx, Esq., Silver State Legal, 0000 Xxxx Xxxxx Xxxxx, Xxx Xxxxx, Xxxxxx 00000.
Address for Affiliate shall be as follows: ___________________________________.
25. ATTORNEYS' FEES AND COSTS. If any legal action or any other proceeding
is brought for the enforcement of this Agreement, or if a dispute arises under
this Agreement, the successful or prevailing party shall be entitled to recover
reasonable attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it may be entitled.
26. SEVERABILITY. If for any reason whatsoever, any one or more of the
provisions of this Agreement shall be held or deemed to be illegal, inoperative,
unenforceable or invalid as applied to any particular case or in all cases, such
circumstances shall not have the effect of rendering such provisions illegal,
inoperative, unenforceable or invalid in any other case or of rendering any
other provisions of this Agreement illegal, inoperative, unenforceable or
invalid.
CRYSTALIX USA GROUP
0000 Xxxxx Xxxxxxx Xx#000, Xxx Xxxxx, XX 00000
Tel: 000.000.0000 Fax 000.000.0000
Web: XXX.XXXXXXXXXXXX.XXX Email: xxxx@xxxxxxxxxxxx.xxx 021104
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27. CAPTIONS. The captions contained herein are not a part of this
Agreement. They are only for the convenience of the parties and do not in any
way modify, amplify or give full notice of any of the terms, covenants or
conditions of this Agreement.
28. CONSTRUCTION. For purposes of this Agreement, the language of the
contract shall be deemed to be the language of both parties and neither party
shall be construed as the drafter.
29. COUNTERPARTS/EXECUTION. This Agreement may be executed in
counterparts. All facsimile signatures hereon shall be deemed original for all
purposes.
IN WITNESS WHEREOF, the parties hereto acknowledge their acceptance
to the express terms and conditions contained in this Agreement by affixing
their respective signatures below the date first above written.
CRYSTALIX USA GROUP, INC. ________________________
("CUSA") ("AFFILIATE")
----------------------- ------------------------
By: By:
Its: Its:
CRYSTALIX USA GROUP
0000 Xxxxx Xxxxxxx Xx#000, Xxx Xxxxx, XX 00000
Tel: 000.000.0000 Fax 000.000.0000
Web: XXX.XXXXXXXXXXXX.XXX Email: xxxx@xxxxxxxxxxxx.xxx 021104
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EXHIBIT 1
LIST OF EQUIPMENT INCLUDED WITH LASERMARK II SYSTEM
One LaserMark II Unit
One 3-D Scanner/Camera
One complete Computer Workstation
One TV with infomercial on loop
CRYSTALIX USA GROUP
0000 Xxxxx Xxxxxxx Xx#000, Xxx Xxxxx, XX 00000
Tel: 000.000.0000 Fax 000.000.0000
Web: XXX.XXXXXXXXXXXX.XXX Email: xxxx@xxxxxxxxxxxx.xxx 021104
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EXHIBIT 2
PRODUCT AND PRICE LIST FOR LIGHT BASES, COLLECTION IMAGES AND RELATED ITEMS
SUGGESTED RETAIL PRICES GUIDELINES AND CRYSTAL CUBE SIZES (in inches)
---------------------------------------------------------
o 2 x 2 x 3 (1 portrait) $69.95
o 2.4 x 2.4 x 2.4 (1 portrait) $79.95
o 3.2 x 3.2 x 3.2 (2 portraits) $159.95
o 2.25 x 3.25 x 4.75 (2 portraits) $199.00
o Each additional portrait $59.95
o Text Added $19.95
LESSEE'S RIGHTS TO SELL SIDE-PRODUCTS.
A. All light bases and accessory products provided by CUSA to Lessee
at wholesale prices, are exempt of all royalty fees and Lessee agrees to sell
these products taking into account the suggested retail prices guidelines
described below.
X. XXXX agree that Lessee shall be charged the same prices as other
Lessees.
The following wholesale prices do not include shipping costs and require a 48
piece minimum order.
Classic Mirrored light base 4" (xxxx or black) with 5 shades of changing
colored light
Wholesale to Lessee: $16.00
Suggested retail: $39.95
Rotating Mirrored light base 3.5" LED (xxxx or black) Multi colored diodes
Wholesale to Lessee: $19.00
Suggested Retail: $69.95
CRYSTALIX USA GROUP
0000 Xxxxx Xxxxxxx Xx#000, Xxx Xxxxx, XX 00000
Tel: 000.000.0000 Fax 000.000.0000
Web: XXX.XXXXXXXXXXXX.XXX Email: xxxx@xxxxxxxxxxxx.xxx 021104
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