Document:

Unassociated Document

    
      EXHIBIT
        10.3

       

    

    ANTIK
      DENIM, LLC

    LICENSE
      AGREEMENT

    

    This
      Agreement entered into by and between ANTIK
      DENIM, LLC,
      a
      California limited liability company, having its principal office at
5804
      E. Slauson Avenue, Commerce, CA 90040 (“Licensor”)
      and
MAX
      RAY, INC., a
      California corporation having
      its principal office at 1363
      Elwood Street, Los Angeles, California 90021 (“Licensee”) with
      reference to the following recitals:

    

    A.    Licensor
      is the owner of certain proprietary rights identified in Exhibit C, which are
      comprised of a pending trademark application for registration of the “Antik
      Denim In Jeans We Trust” trademark (the “Trademark”), copyright registrations
      described in Exhibit A hereto (the “Copyrights”) and a pending design patent
      described in Exhibit A hereto (the “Patent”). The Trademarks, Copyrights and
      Patent are collectively referred to herein as the “Property”. 

    

    B.    Licensee
      wishes to license the Property as set forth herein upon and in connection with
      the manufacture, sale, marketing and distribution of the products described
      in
      the attached Exhibit A. The products described in the attached Exhibit A on
      which or in connection with which Licensee uses the Property shall hereinafter
      be referred to as “Licensed Product(s)”.

    

    NOW,
      THEREFORE,
      in
      consideration of the mutual promises of this Agreement, the parties agree as
      follows:

    

    
      	
            	1.	
              GRANT
                OF LICENSE

            

    

    

    (a) Licensor
      hereby grants to Licensee, and Licensee accepts, subject to the terms and
      conditions of this Agreement, the sole and exclusive right within the Territory
      (as defined hereinafter): (i) to use the Property on or in connection with
      the
      Licensed Products described in the attached Exhibit A and in connection with
      the
      Licensed Products' design, development, manufacture, sale, marketing and
      distribution to the general wholesale and retail trade; (ii) to use the
      Trademarks and brand names used or owned by Licensor to merchandise the Licensed
      Products; and (iii) to adopt existing styles and designs of Licensed Products
      presently being sold by Licensor and to design, develop, manufacture, sale,
      market and distribute such Licensed Products to Licensor and to Licensor's
      parent, affiliate and subsidiary corporations, and to the general wholesale
      and
      retail trade. Licensor reserves any rights, benefits and opportunities not
      expressly granted to Licensee under this Agreement. 

    

    
      	 	
              2.

            	
              TERRITORY

            

    

    

    (a) The
      license granted under this Agreement shall extend throughout the United States
      and its possessions, territories and military bases worldwide (the “Territory”).

    

    (b) In
      the
      event that Licensor wishes to grant a license under its rights in the Property
      for the Licensed Products in a country (or portion thereof, as applicable)
      that
      is outside of the Territory, Licensor hereby grants to Licensee, and Licensee
      shall have, a right of first refusal to amend this Agreement and to add that
      country (or portion thereof, as applicable) to the Territory, subject to the
      same Minimum Net Sales and Minimum Guaranteed Royalty that has been offered
      by
      the third party for such country (or portion thereof, as applicable) in a bona
      fide offer in writing delivered to Licensee.

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

     

    
      	
            	3.	
              TERM

            

    

    

    (a) The
      parties agree that the term of this Agreement shall commence on July 1, 2007
      and
      will extend for a “First
      Term”
      of
      eighteen (18) months from July 1, 2007 through December 31, 2008. Upon the
      expiration of the First Term, this Agreement shall automatically renew for
      four
      (4) successive one (1)-year term (each, an “Extended
      Term”, and
      collectively together with the First Term, the “Term”),
      unless this Agreement is earlier terminated pursuant to the provisions hereof.
      The First Term and the Extended Terms are collectively referred to herein as
      the
“Term”.

    

    (b) Notwithstanding
      anything else contained herein, Licensee shall have the right to terminate
      this
      Agreement effective as of December 31, 2008, December 32, 2009, and December
      31,
      2010, provided that Licensee has given Licensor ninety (90) days written notice
      prior to the effective date of such termination. In the event of termination
      pursuant to this provision, Licensee shall have the rights set forth below
      in
      Section 19(b) to dispose of the Licensed Products and Licensee’s Guaranteed
      Minimum Royalty shall be limited to only the amount due for the then-current
      First Term or Extended Term, as applicable.

    

    
      	
            	4.	
              ROYALTIES
                AND MINIMUM NET SALES

            

    

    

    (a) Subject
      to the terms and conditions of this Agreement, Licensee shall pay to Licensor
      as
      royalty (“Royalty” or “Royalties”) a sum equal to eight percent (8%) of all Net
      Sales of the Licensed Products. Such Royalty shall accrue when Net Sales are
      collected. “Net Sales” shall mean gross sales (i.e., the gross invoice amount
      billed and collected by Licensee from customers) of the Licensed Products during
      the Term, less the following deductions: (i) discounts or rebates, (ii)
      transportation, freight and other charges, such as insurance, related to the
      handling and distribution of Licensed Products, (iii) taxes, excises, and other
      governmental charges or duties and (iv) refunds, chargebacks and other
      allowances actually shown on the invoice and, further, (v) less any bona fide
      returns (net of all returns actually made or allowed as supported by credit
      memorandum actually issued to the customers) provided such returns do not exceed
      [ten percent (10%)] of gross sales per quarterly period. Costs incurred in
      the
      manufacturing, selling, advertising and distribution of the Licensed Products
      shall not be deducted nor shall any deduction be allowed for any uncollectible
      accounts or allowances. No deductions shall be made for any discounts not
      reflected on the invoice(s), or for commissions, taxes, fees, assessments,
      impositions, or payments or expenses of any kind which may be incurred or paid
      by Licensee in connection with the transfer of funds or with the conversion
      of
      any currency into United States dollars. 

    

    (b) Royalty
      payments shall be made by Licensee to Licensor on all Net Sales. In the event
      that Licensee sells any or all of the Licensed Products to any affiliate of
      Licensee, including, without limitation, any individual(s), entity or entities
      in whole or in part controlled by Licensee, or having any relationship, contract
      or arrangement with Licensee with respect to any matter which affects, or is
      affected by, this Agreement, the invoice price used to determine Net Sales
      hereunder shall be the invoice price at which the Licensed Products are resold
      by such individual or entity to an unrelated customer in an arm’s-length
      transaction. 

    

    (c) Guaranteed
      Minimum Royalty:
      Subject
      to the terms and conditions of this Agreement, Licensee shall, during the First
      Term and, only if and as applicable, each Extended Term

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    (each,
      an
“Annual
      Period”),
      pay
      to Licensor the non-refundable "Guaranteed Minimum Royalty" listed below,
      payable in equal quarterly installments within thirty (30) days after the end
      of
      each quarter during each such Annual Period. All such payments shall be fully
      creditable against Royalties due and payable under this Agreement. Upon
      execution of this Agreement, Licensee shall pay Licensor Twenty Thousand Dollars
      ($20,000.00) as an advance (“Advance”) (to be applied by Licensor against the
      First Term Guaranteed Minimum Royalty due to Licensor hereunder). If, for any
      reason or no reason, this Agreement is terminated prior to full application
      of
      the Advance delivered to Licensor hereunder, within ten (10) days following
      the
      termination of this Agreement, Licensor shall deliver an amount equal to the
      unused portion of any the Advance to Licensee. The balance of the First Term
      Guaranteed Minimum Royalty shall be paid in four (4) equal quarterly
      installments of Seventeen Thousand Two Hundred Twenty Two Dollars and 20/100
      ($17,222.20) each, with the first installment due for the quarter ending
      December 31, 2007.

    

    If
      upon
      termination or expiration of this Agreement, the Royalties paid and/or payable
      by Licensee to Licensor, together with the amounts paid by Licensee to Licensor
      pursuant to the foregoing paragraph, during or with respect to the then current
      Annual Period are, in aggregate, less than the Guaranteed Minimum Royalty for
      such Annual Period, Licensee shall pay such difference to Licensor; provided,
      however,
      if this
      Agreement is terminated due to Licensor’s default, in addition to any rights and
      remedies available to Licensee, Licensee shall only be responsible for Royalties
      earned under Section 4 hereof up to the date of termination of this Agreement.
      Royalty payments shall be credited against the Guaranteed Minimum Royalty.
      In
      the event that during any Annual Period, the actual payments for Royalties
      under
      Section 4 hereof equal or exceed the Guaranteed Minimum Royalty with respect
      to
      that Annual Period, no further Guaranteed Minimum Royalty payments need be
      made
      for such Annual Period.

    

    
      	 	 	
              GUARANTEED

            	 	 	 
	
              ANNUAL
                PERIOD

            	 	
              MIN.
                ROYALTY

            	 	
              TARGET
                NET SALES

            	 
	 	 	 	 	 	 
	
              04/01/07
                - 12/30/08

            	 	
              $

            	
              88,888.80

            	 	
              $

            	
              1,111,111.20

            	 
	
              1/01/09
                - 12/30/09

            	 	
              $

            	
              240,000.00

            	 	
              $

            	
              3,000,000.00

            	 
	
              1/01/10
                - 12/30/10

            	 	
              $

            	
              400,000.00

            	 	
              $

            	
              5,000,000.00

            	 
	
              1/01/11
                - 12/30/11

            	 	
              $

            	
              640,000.00

            	 	
              $

            	
              8,000,000.00

            	 
	
              1/01/11
                - 12/30/12

            	 	
              $

            	
              800,000.00

            	 	
              $

            	
              10,000,000.00

            	 

    

    

    (d) Target
      Net Sales:
      During
      the First Term and for each of the Extended Terms, Licensee agrees to use
      commercially reasonable efforts to achieve “Target Net Sales” as shown above;
      provided that, the failure to achieve such Target Net Sales shall not be a
      breach of this Agreement. Licensee acknowledges that failure to pay Guaranteed
      Minimum Royalties in effect during the Term, would be a material breach of
      this
      Agreement. 

    

    (e) Licensor
      may impose a charge on all overdue Royalty payments at a rate equal to the
      lesser of one and one-half percent (1 1⁄2%) per month or the maximum rate allowed
      by law, without prejudice to any other rights of Licensor under this Agreement.
      

    

    (f) All
      of
      Licensee's obligations under this Paragraph 4 shall be performed without any
      right of Licensee to invoke set-offs, deductions and other similar
      rights.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    (g) The
      financial and monetary obligations of Licensee solely with respect to the
      Guaranteed Minimum Royalty hereunder accruing during the Term shall be
      guaranteed by Josh Cherin, an individual residing in the State of California,
      on
      a year-by-year basis (“Guarantor”). It is expressly agreed by the parties that
      this Agreement shall have no validity, force or effect until such time as
      Guarantor has executed and delivered the written Guaranty (“Guaranty”), annexed
      hereto as Exhibit D. 

    

    
      	
            	5.	
              ROYALTY
                PAYMENT AND REPORTING

            

    

    

    (a) Licensee
      shall pay the royalties based upon Net Sales in quarterly periods ending on
      the
      last days of March, June, September, and December. Payments shall be received
      by
      Licensor within thirty (30) days after the end of each quarterly period. At
      the
      time of payment, Licensee will also furnish Licensor on forms provided or
      approved by Licensor with a statement of Net Sales and number of units of all
      Licensed Products sold in the Territory (whether or not subject to a royalty)
      during the immediately preceding quarterly period and statements of other
      information as the forms may require. Such statements shall be furnished to
      the
      Licensor whether or not any Licensed Products have been shipped, distributed
      and/or sold and whether or not actual royalties have been earned during the
      preceding royalty period. Royalty statements will be certified true and correct
      by a duly authorized officer of Licensee if Licensee is a corporation or by
      a
      principal of Licensee if Licensee is a partnership or sole proprietor. Licensee
      shall send all payments and statements required by this Paragraph to Licensor
      at
      the address in Paragraph 24. Neither the expiration nor the termination of
      this
      Agreement shall relieve Licensee from its royalty payment obligations that
      accrued prior to the expiration or termination of this Agreement.

    

    (b) All
      amounts to be paid by Licensee to Licensor under this Agreement shall be payable
      in United States currency according to a method directed by Licensor (including
      by electronic transfer) without deduction for taxes (including withholding
      taxes), levies, duties, imports, commissions, expenses or charges of any
      kind.

    

    (c) Neither
      the receipt nor acceptance by Licensor of any royalty payment or royalty
      statement shall prevent Licensor from subsequently challenging the accuracy
      or
      validity of such payment or statement.

     

    (d) During
      the term of this Agreement and for at least two (2) years following the
      termination or expiration of this Agreement, Licensee shall maintain at
      Licensee's principal office such books and records including but not limited
      to
      production, inventory and sales records (collectively "Books and Records")
      as
      are necessary to substantiate that (i) all statements submitted to Licensor
      hereunder were true, complete and accurate, (ii) all royalties and other
      payments due Licensor hereunder shall have been paid to Licensor in accordance
      with the provisions of this Agreement, and (iii) no payments have been made,
      directly or indirectly, by or on behalf of Licensee to or for the benefit of
      any
      Licensor employee or agent who may reasonably be expected to influence
      Licensor's decision to enter this Agreement or the amount to be paid by Licensee
      under this Agreement. (As used in this Paragraph, "payment" shall include money,
      property, services, and all other forms of consideration.) All Books and Records
      shall be maintained in accordance with generally accepted accounting principles
      consistently

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    applied.
      During the term of, and for two (2) years after the termination or expiration
      of
      this Agreement, the Books and Records shall be open to inspection, audit and
      copy by or on behalf of Licensor during business hours, provided that any audit
      shall be conducted by an independent Certified Public Accountant who has agreed
      to provide the results of such audit, in writing, with such results provided
      simultaneously to both Licensor and Licensee, and, further provided, that no
      audit shall be conducted on less than two weeks’ notice to Licensee and any
      audit shall be conducted solely during Licensee’s normal business day and in a
      manner designed to minimize impact on Licensee’s ongoing business and no more
      than once in each calendar year. If any such audit reveals a discrepancy between
      the royalties owed Licensor and the royalties Licensee paid, Licensee shall
      pay
      such discrepancy, plus interest calculated at the lesser of one and one-half
      percent (1 1⁄2%) per month or the maximum rate allowed by law. If such discrepancy
      is more than fifteen percent (15%), Licensee shall reimburse Licensor upon
      demand for the cost of such audit including any reasonable attorneys' fees
      in
      connection therewith.

    

    
      	 	
              6.

            	
              ADVERTISING,
                MARKETING AND DISTRIBUTION

            

    

    

    (a) On
      an
      annual basis during the Term, Licensee shall spend no less than the two percent
      (2%) of the Minimum Net Sales for the corresponding year of the License
      Agreement on advertising and marketing. Licensee shall participate in
      international trade shows that are customarily attended by distributors who
      market the same categories of products as have been licensed to Licensee under
      this Agreement. In addition, as reasonably requested with reasonable advance
      notice, Licensee shall coordinate to show the Licensed Products at the apparel
      trade shows that are attended by Licensor. All advertising materials shall
      require the prior written approval of Licensor, as set forth in Article 8 below,
      which approval shall not to be unreasonably withheld or delayed. Other than
      product placement, Licensee shall not obtain any celebrity endorsements or
      associate the Licensed Products with any particular celebrity without first
      obtaining the prior written consent of Licensor. 

    

    (b) Licensee
      acknowledges that in order to preserve the goodwill attached to the Trademark,
      the Licensed Products are to be sold at prices and terms, and through
      distribution channels, reflecting the prestigious nature of the Trademark,
      it
      being understood, however, that Licensor is not empowered to fix or regulate
      the
      prices at which the Licensed Products are to be sold, either at the wholesale
      or
      retail level. Licensee
      shall distribute the Licensed Products only to upper tier department stores,
      specialty chain stores, and specialty boutiques.

    

    (c) The
      sale
      and distribution of the Licensed Products in the Territory shall be performed
      exclusively by Licensee or under its supervision or control. Notwithstanding
      the
      foregoing, Licensor shall be entitled, as reasonably requested by Licensor,
      to
      attend and participate in any meetings and/or negotiations that Licensee may
      have with Licensor’s existing sales agents. 

    

    (d) Licensee
      shall maintain the high standards of the Property and the Licensed Products
      in
      all advertising, packaging and promotion of the Licensed Products. Licensee
      shall not employ or otherwise release any of such advertising or packaging
      or
      other business materials relating to any Licensed Products or bearing the
      Property, unless and until Licensee shall have received approval by Licensor.
      Licensee may include on it business materials an indication of the relationship
      of the parties hereto in a form approved by Licensor. All usage by Licensee
      of
      the Property of Licensor on a Licensed Product shall include the © copyright
      symbol, ® or TM trademark symbol, or notice of “Patent Pending”, or “Patented”
(with the number of any issued patent), as appropriate. Licensor will
      inform

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    Licensee
      as to the correct legal notices required by Licensor when Licensee submits
      its
      concepts for approval, as described in Article 8 below.

    

    (e) Consistent
      with the high quality and prestige of the Trademark and products manufactured
      by, or under license from, Licensor and its affiliates, Licensee undertakes,
      during the Term, to diligently manufacture and sell all Licensed Products,
      to
      use its commercially reasonable efforts to create a demand therefore, supply
      such demand, and maintain adequate arrangements and facilities for the
      distribution of Licensed Products throughout the Territory. As an essential
      part
      of its distribution program, Licensee shall use commercially reasonable efforts
      to cause to be manufactured adequate quantities (consistent with good industry
      practice) of all Licensed Products to satisfy the requirements of its customers
      for a full line of such Licensed Products and to expedite the delivery
      thereof.

    

    
      	
            	7.	
              SALE
                OF LICENSED PRODUCTS TO
                LICENSOR

            

    

    

    Subject
      to standard order terms and lead times, Licensee agrees to sell to Licensor
      the
      Licensed Products in such quantities, as Licensor may need in connection with
      its wholesale and retail activities. All sales by Licensee to Licensor of
      Licensed Product(s) shall be on terms at least as good as those given by
      Licensee to any of its customers with similar order volumes such that the
      Licensor can purchase the Licensed Product(s) from the Licensee at a price
      never
      to exceed the lowest price offered to any other customer of the Licensee with
      similar order volumes and on such other terms that are as good as the most
      favorable terms given to any other customers of the Licensee with similar order
      volumes. 

    

    
      	
            	8.	
              QUALITY
                AND APPROVAL

            

    

    

    
      	
            	(a)	
              Purpose
                of Quality Control.

            

    

    

    It
      is the
      intent of the parties hereto to establish, through the performance of this
      Agreement, prestige and goodwill and recognition in the minds of the public
      with
      respect to the Trademark and, therefore, it is of great importance to each
      party
      that high standards and reputation be established in the Trademark and
      maintained in the manufacture and sale of the Licensed Products. Accordingly,
      all items of Licensed Products manufactured by or on behalf of the Licensee
      shall be of high quality and high workmanship. Neither party shall knowingly
      take any action which damages the reputation of the other party or which
      diminishes and/or tarnished the image and/or reputation of the
      Trademark.

    

    
      	
            	(b)	
              Design/Concept
                Approval.

            

    

    

    Licensee
      shall submit to Licensor for approval, not to be unreasonably withheld,
      pre-production submittals consisting of concepts, designs, line drawings or
      sketches and finished artwork, as the case may be, with respect to any proposed
      Licensed Products or promotional or packaging material relating to the Licensed
      Products (“Concept Submittal(s)”). Licensee shall not manufacture, sell, market
      or distribute any Licensed Products or any promotional or packaging material
      relating to the Licensed Products before obtaining Licensor's approval of
      Concept Submittals for each such Licensed Product, which approval shall not
      to
      be unreasonably withheld or delayed. If Licensor fails to communicate its
      approval or disapproval of any Concept Submittal within five (5) days after
      receipt of Licensee's submission, Licensor shall be deemed to have approved
      such
      Concept Submittal.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

     

    
      	
            	(c)	
              Pre-Production
                Approvals.

            

    

    

    Licensee
      shall submit to Licensor for approval, not to be unreasonably withheld or
      delayed, pre-production samples for any proposed Licensed Products (“Sample
      Submittal(s)”). Licensee shall not manufacture, sell, market or distribute any
      Licensed Products before obtaining Licensor's approval of the Sample Submittals
      for each such item, which approval shall not to be unreasonably withheld or
      delayed. If Licensor fails to disapprove any Sample Submittal within five (5)
      days after receipt of Licensee's submission, Licensor shall be deemed to have
      approved such Sample Submittal. 

    

    
      	
            	(d)	
              Quality
                Maintenance.

            

    

    

    Licensee
      shall maintain the same quality in the Licensed Products and promotional and
      packaging material relating to the Licensed Products produced as in the Sample
      Submittals approved by Licensor. Upon commencement of manufacture and
      distribution of the Licensed Products and/or promotional and packaging material
      relating to said Licensed Products after all required approvals have been given
      by Licensor, Licensee shall submit to Licensor, at its own cost, three (3)
      production samples of each of the Licensed Products and/or promotional and
      packaging material produced by Licensee. Licensor may require that Licensee
      submit to Licensor, at Licensee’s cost, up to three (3) additional sets of
      production samples of the Licensed Products and/or promotional and packaging
      material for Licensor’s use in product placement and promotional
      endeavors.

     

    
      	
            	(e)	
              Changes.

            

    

    

    If
      during
      the term of this Agreement there is to be any material change in the Licensed
      Products or the promotional or packaging material relating to the Licensed
      Products after the approval of production samples, Licensee must comply with
      the
      provisions of Paragraph 8(b) and Paragraph 8(c) for such Licensed Product or
      material before its manufacture, sale, marketing or distribution.

    

    
      	
            	(f)	
              Licensee's
                Production Facilities.

            

    

    

    Licensee
      agrees to furnish Licensor promptly with the addresses of Licensee's production
      facilities for the Licensed Products and the names and addresses of the persons
      or entities, if any, which are manufacturing each of the Licensed Products
      for
      Licensee. Licensor shall have the right upon reasonable notice to Licensee,
      during regular business hours, at its own expense to inspect any production
      facilities where any Licensed Products are being manufactured for the purpose
      of
      enabling Licensor to determine whether Licensee is adhering to the requirements
      of this Agreement relating to the nature and quality of the Licensed Products
      and the use of the Property in connection therewith.

    

    
      	
            	(g)	
              Imperfect,
                Irregulars or Second Quality Items.

            

    

    

    Licensee
      shall have the right to sell and distribute Licensed Products which
      are

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    imperfect,
      irregular or second quality through such outlets and in such manner as Licensee
      may reasonably determine; provided, however, that such products shall be limited
      to ten (10%) of first quality sales (measured in number of units sold),
      reconciled on an annual basis, and provided that Licensee shall remove or deface
      labels, tags and other packaging which bears or identifies the Property prior
      to
      the sale thereof and provided further that Licensee shall notify Licensor as
      to
      the retailers selected for the disposition of merchandise. Notwithstanding
      anything to the contrary herein, the royalty payable to Licensor in respect
      of
      such products shall be four percent (4%) which shall be deemed the “Royalty” for
      such products for all purposes hereunder.

    

    
      	
            	(h)	
              Damaged,
                Defective or Non-Approved Items.
                

            

    

    

    Licensee
      shall not sell any items that are damaged, defective, or non-approved. To the
      extent that any such items shall exist during the Term of this Agreement,
      Licensee agrees that such items will be disposed of in accordance with
      reasonable and customary instructions from Licensor.

    

    
      	
            	9.	
              OWNERSHIP
                OF RIGHTS

            

    

    

    (a) Licensor
      is the sole and exclusive owner of all rights, title and interest in and to
      the
      Property.

     

    (b) Licensee
      shall not use Licensor's name or the Property or incorporate Licensor’s name or
      the Property in the Licensee’s corporate or business name in any manner
      whatsoever other than as permitted hereunder. Licensee shall not represent
      that
      it has any rights to the Property other than those expressly granted under
      this
      Agreement. Licensee shall not use and/or authorize the use, either during or
      after the Term of this Agreement, of any configuration, trademark, trade name
      or
      other designation confusingly similar to Licensor's name and the
      Property.

    

    
      	
            	10.	
              GOOD
                WILL AND PROMOTIONAL VALUE

            

    

    

    (a) Licensee
      recognizes the value of the good will associated with the Property and
      acknowledges that the Property and all rights therein and the good will
      pertaining thereto, belong exclusively to Licensor. Licensee further
      acknowledges that the Property has acquired secondary meaning in the mind of
      the
      public. Licensee agrees that during this Agreement, or thereafter, it will
      not
      challenge or otherwise contest the title or any rights of Licensor to the
      Property or the validity of the License being granted.

    

    (b) Licensee's
      use of the Property shall inure to the benefit of Licensor and Licensee shall
      not, at any time, acquire any rights in the Property by virtue of any use it
      may
      make of the Property.

    

    
      	
            	11.	
              INFRINGEMENTS

            

    

    

    Licensee
      shall reasonably assist Licensor, at Licensor’s cost and expense, in the
      enforcement of any rights of Licensor in the Property. Licensor may commence
      or
      prosecute any claims or actions in its own name or in the name of Licensee
      or,
      at Licensor’s cost and expense, join Licensee as

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    a
      party
      thereto. If Licensor elects to join Licensee as a party to any such claim or
      action, Licensor shall indemnify and hold harmless Licensee from any and all
      costs, expenses, damages and liabilities arising from such claim or action.
      Licensee shall notify Licensor in writing of any infringements by third parties
      of the Property, which may come to Licensee's attention. Licensor shall have
      sole right to determine whether any action shall be taken on account of any
      infringement. However, in the event that Licensor decides not to proceed, or
      if
      Licensor fails to take action within third (30) days of receipt of written
      notice of such claim, then Licensee may take action on the claim at Licensee’s
      sole cost and expense, in which case Licensee shall be entitled to receive
      any
      damages awarded in such claim. Except as provided in the foregoing sentence,
      Licensee shall not contact the third party, make any demands or claims,
      institute any suit or take any other action on account of such infringements
      without first obtaining the prior written permission of Licensor. All costs
      and
      expenses, including attorneys' fees, incurred in connection with any suit
      instituted by Licensee without the consent of Licensor shall be borne solely
      by
      Licensee. 

    

    
      	
            	12.	
              COOPERATION
                WITH LICENSOR

            

    

    

    (a) Licensee
      agrees to reasonably cooperate with Licensor, at Licensor’s cost and expense, in
      the prosecution of any trademark or copyright application that Licensor may
      desire to file or in the conduct of any litigation relating to the Property.
      Licensee shall supply to Licensor such reasonable quantities of samples,
      containers, labels, sales information and similar material and, at Licensor’s
      cost and expense and upon Licensor's request, shall procure evidence, give
      testimony and cooperate with Licensor as may reasonably be required in
      connection with any such application or litigation.

    

    (b) With
      respect to all claims and actions, including actions in which Licensee is joined
      as a party, Licensor shall have the sole right to employ counsel of its choosing
      and to direct handling of the litigation and any settlement thereof. Except
      as
      set forth in Section 11, Licensor shall be entitled to receive and retain all
      amounts awarded as damages, profits or otherwise in connection with such
      actions.

    

    
      	
            	13.	
              TRADEMARK,
                PATENT AND COPYRIGHT
                PROTECTION

            

    

    

    (a) The
      License is conditioned upon Licensee's complete compliance with the provisions
      of the trademark, copyright and patent laws of the United States and the foreign
      country or countries in the licensed Territory with respect to the
      Property.

    

    (b) Licensor
      has the right but not the obligation, to obtain at its cost appropriate
      trademark, patent and copyright protection for the Property, the Licensed
      Products and/or the promotional and packaging material; provided that, Licensor
      has the obligation to maintain, at its cost and expense, existing registrations
      for the Property during the Term. 

    

    (c) Licensee
      shall reasonably cooperate with Licensor in protecting the Property. In the
      event that any third party claim arises with respect to the Property in the
      Territory of which Licensee becomes aware, Licensee shall promptly advise
      Licensor in writing of such event. Licensor has no obligation to take any action
      whatsoever in the event that any claim arises with respect to the protection
      of
      the Property. Licensor shall have the right, however, to proceed with counsel
      of
      its own choice. In
      the
      event that Licensor decides not to proceed, or if Licensor fails to take action
      within third (30) days of

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    receipt
      of written notice of such claim or problem, then Licensee may take action on
      the
      claim at Licensee’s sole cost and expense, in which case Licensee shall be
      entitled to receive any damages awarded in such claim.

    

    (d) Licensee
      shall not at any time challenge or dispute Licensor's ownership of any rights
      in
      the Property nor file any documents with any governmental authority or take
      any
      other action challenging or disputing Licensor's ownership of the Property,
      or
      aid or abet anyone else in doing so.

     

    
      	
            	14.	
              COMPLIANCE
                WITH GOVERNMENT STANDARDS

            

    

    

    Licensee
      represents and warrants that the Licensed Products, their packaging, marketing,
      sales and distribution shall meet or exceed all Federal, State and local laws,
      ordinances, standards, regulations and guidelines pertaining to such Licensed
      Products or activities, including, but not limited to, those pertaining to
      product safety, quality, labeling and propriety. Licensee agrees that it will
      not package, market, sell or distribute any Licensed Products or cause or permit
      any Licensed Products to be packaged, marketed, sold or distributed in violation
      of any such Federal, State or local law, ordinance, standard, regulation or
      guideline.

    

    
      	
            	15.	
              IDENTIFICATION

            

    

    

    Licensee
      shall place its own name or identifying mark on the Licensed Products or on
      their packaging in an inconspicuous manner so that Licensor can readily identify
      the source of the Licensed Products. Licensee shall use commercially reasonable
      efforts to institute an identification program for security purposes to prevent
      counterfeiting of the Licensed Products. Licensee shall obtain Licensor’s prior
      written consent for use of the security product that Licensor wishes to utilize,
      which consent shall not be unreasonably withheld or delayed. 

    

    
      	
            	16.	
              TRADEMARK
                AND COPYRIGHT OWNERSHIP AND
                NOTICES

            

    

    

    (a) All
      Licensed Products and all promotional and packaging material shall contain
      appropriate legends, markings and/or notices as required from time to time
      by
      Licensor, to give notice to the public of Licensor's right. Unless otherwise
      expressly approved in writing by Licensor, each usage of the Trademarks shall
      be
      followed by the appropriate trademark notice symbol as set forth in Paragraph
      6(c). Licensor will provide Licensee with the appropriate legend for each
      Licensed Product and/or promotional and packaging material during the approval
      process.

    

    (b) Licensor
      and Licensee agree and intend that all artwork and designs created by Licensee
      or any other person or entity on behalf of Licensee and combined with the
      Trademarks in connection with the commercial marketing of the Licensed Products
      shall be the property of Licensor, which shall be entitled to use and license
      to
      others the use of such artwork and designs subject to the provisions of this
      Agreement. Licensee assigns to Licensor the copyright in all such artwork and
      designs. Licensee agrees to execute any additional documents proposed by
      Licensor to effectuate and confirm Licensor's sole and exclusive ownership
      of
      all copyright in and to such artwork and designs, and Licensee irrevocably
      appoints Licensor as its attorney-in-fact to execute any and all such documents
      if Licensee fails to return executed copies of such documents to Licensor within
      five (5) days following submission.

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

    (c) Licensee
      shall use no other markings, legends and/or notices on or in association with
      the Licensed Products or on or in association with the promotional and packaging
      material other than the specified legend and Licensee's legend, without first
      obtaining Licensor's prior express written approval.

    

    (d) The
      use
      of any word, name, symbol or device to identify or distinguish any of the
      Licensed Products shall inure to the benefit of Licensor. The use of any such
      word, name, symbol or device in connection with any of the Licensed Products
      shall be made only with Licensor's prior approval. All trademark rights in
      any
      such word, name, symbol or device shall belong to Licensor and shall be
      exercised by Licensee only pursuant to Licensor's prior, written approval.
      

     

    
      	
            	17.	
              MANUFACTURER'S
                AGREEMENT

            

    

    

    If
      the
      Licensed Products or parts of the Licensed Products are to be manufactured
      for
      Licensee, Licensee shall, before authorizing such manufacture and before placing
      any orders with the proposed manufacturer, obtain Licensor's approval in the
      manner provided herein, which approval will not be unreasonably withheld or
      delayed. Licensee shall have the proposed manufacturer sign in duplicate
      original an agreement no less protective of Licensor’s rights than the agreement
      attached in Exhibit B ("Manufacturer's Agreement"). Licensee shall deliver
      the
      original copies of the Manufacturer's Agreement signed by Licensee and the
      proposed manufacturer to Licensor, and Licensee shall obtain Licensor's
      signature on the Manufacturer's Agreements before the manufacture of the
      Licensed Products or parts of the Licensed Products by the proposed
      manufacturer. 

    

    
      	
            	18.	
              TERMINATION

            

    

    

    (a) Without
      prejudice to any other rights that Licensor may have, Licensor may at any time
      give notice of termination effective immediately:

    

    (1) If
      within
      one hundred eighty (180) days of execution of this Agreement,
      Licensee
      shall not have begun the bona fide distribution and sale of the Licensed
      Products in commercially reasonable quantities throughout the Territory.

    

    (2) If
      Licensee shall fail for sixty (60) consecutive days to continue the bona fide
      distribution and sale of the Licensed Products in commercially reasonable
      quantities throughout the Territory.

    

    (3) If
      Licensee shall fail to timely make any payment due hereunder or submit any
      statement required hereunder and such failure to pay or submit a statement
      is
      not remedied within fifteen (15) days of receipt of written notice
      thereof;

    

    (4) If
      Licensee shall be unable to pay its obligations when due, shall make any
      assignment for the benefit of creditors, shall file a voluntary petition in
      bankruptcy, shall be adjudicated bankrupt or insolvent, shall have any receiver
      or trustee in bankruptcy or insolvency

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    appointed
      for its business or property, or shall make an assignment for the benefit of
      creditors;

    

    (5) If
      the
      quality in any Licensed Products is lower than in the approved samples referred
      to in Paragraph 8 and such failure to maintain the same quality in the Licensed
      Products as in the approved samples is not remedied within thirty (30) days
      of
      receipt of written notice thereof;

    

    (6) If
      Licensee manufactures, sells, markets, distributes or uses any Licensed Products
      or promotional or packaging material relating to the Licensed Products without
      Licensor's approval as provided for by this Agreement or continues to
      manufacture, sell, market, distribute or use any Licensed Products or
      promotional or packaging material relating to the Licensed Products after
      receipt of notice from Licensor disapproving such items;

    

    (7) If
      Licensee becomes subject to any voluntary or involuntary order of any
      governmental agency involving the recall of any Licensed Products or promotional
      or packaging material relating to the Licensed Products because of safety,
      health or other hazards or risks to the public;

    

    (8) If
      Licensee breaches any provision of this Agreement relating to the unauthorized
      assertion of rights in the Property and fails to cure such breach within thirty
      (30) days following written notice thereof;

    

    (9) If
      Licensee breaches any provision of this Agreement prohibiting Licensee from
      assigning, transferring, sublicensing, delegating or otherwise encumbering
      this
      Agreement or any of its rights or obligations;

    

    (10) If
      Licensee fails to obtain or maintain insurance coverage as required by the
      provisions of this Agreement and fails to cure such breach within thirty (30)
      days following written notice thereof;

    

    (11) If
      Licensee commits any material breach of its obligations under this Agreement
      and
      fails to cure such breach within thirty (30) days following written notice
      thereof.

    

    (b) If
      reasonable grounds for insecurity arise with respect to Licensee's performance
      of this Agreement, Licensor may in writing demand adequate assurance of due
      performance. Until Licensor receives such assurance in writing, it may suspend
      its performance of this Agreement. If Licensor does not receive such written
      assurance within five (5) days after Licensee’s receipt of its request thereof
      or within such other shorter period of time as Licensor may reasonably designate
      under the circumstances, but in any case, no less than three (3) days after
      Licensee’s receipt of such request, the failure by Licensee to furnish such
      assurance will constitute a material breach, which entitles Licensor to
      immediately terminate this Agreement. 

    

    (c) Without
      prejudice to any other rights which Licensee may have, Licensee may terminate
      this Agreement upon thirty (30) days written notice to Licensor of the
      occurrence of a material breach by Licensor of any of the material terms,
      covenants, representations and/or warranties of this Agreement which breach
      is
      not remedied by Licensor to Licensee’s reasonable satisfaction within such
thirty
      (30) day notice period.

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    

    
      	 	
              19.

            	
              POST-TERMINATION
                AND EXPIRATION RIGHTS AND
                OBLIGATIONS

            

    

    

    (a) If
      this
      Agreement is terminated for any cause under Paragraph 18(a) or (b), Licensee
      and
      Licensee's receivers, representatives, trustees, agents, administrators,
      successors or permitted assigns shall have no right after the effective date
      of
      termination to manufacture, sell, ship, market or distribute Licensed Products
      or to use any promotional and packaging material relating to the Licensed
      Products. Licensee's final statement and payment of royalties (and all other
      amounts due hereunder) including the difference, if any, between all royalties
      based upon Net Sales for the Annual Period and the Guaranteed Minimum Royalty
      for such Annual Period, shall be received by Licensor within ten (10) days
      after
      the effective date of termination. Licensee shall send all payments and
      statements required by Paragraph 18(a) to Licensor at the address in Paragraph
      23.

    

    (b) After
      expiration of the Term of this Agreement or the termination of this Agreement
      under any provision other than Paragraph 18(a) or (b), Licensee may sell, ship,
      market and distribute Licensed Products which are on hand or in the process
      of
      manufacture at the date of expiration or at the time notice of termination
      is
      received for a period of one hundred eighty (180) days after the date of
      expiration or the date of notice of termination (“Sell-Off Period”), as the case
      may be, provided that the Royalties with respect to that period are paid and
      the
      appropriate statements for that period are furnished. Licensee shall make no
      post-termination sales to affiliates, except in the ordinary course of its
      business operations. For purposes of this subsection, “affiliate” shall mean (i)
      any entity having any relationship, contract, or arrangement with Licensee
      whereby Licensee has or exercises or has the power to exercise, directly or
      indirectly, any manner, control, direction, or restraint over the business
      or
      operations of such entity, or (ii) Licensee and such entity are subject to
      common or mutual control or direction by some other entity. Any Licensed
      Products not sold, shipped and distributed by Licensee within the Sell-Off
      Period must be destroyed or reprocessed so that the Property is no longer
      present in whole or in part on the Licensed Products or on their packaging
      material. Upon Licensor's request, Licensee shall provide evidence satisfactory
      to Licensor of such destruction or reprocessing of remaining Licensed Products
      or packaging material. After expiration of the Sell-Off Period, Licensee's
      final
      statement and payment of Royalties including the difference, if any, between
      all
      royalties based upon Net Sales and the full Guaranteed Minimum Royalty
      (pro-rated, if applicable) shall be received by Licensor within ninety (90)
      days
      after expiration of the Sell-Off Period. Licensee shall send all payments and
      statements required by Paragraph 18(b) to Licensor at the address in Paragraph
      23.

    

    (c) After
      the
      expiration or termination of this Agreement and except as provided in Paragraph
      18(b), all rights granted to Licensee under this Agreement shall forthwith
      revert to Licensor, and Licensee shall refrain from further use of the Property
      or any further reference to the Property, either directly or indirectly, or
      from
      use of any marks or designs similar to the Property in connection with the
      manufacture, sale, marketing or distribution of Licensee's Licensed Products.
      Licensee also shall turn over to Licensor all molds, silk-screens and other
      materials, which reproduce the Property or shall give evidence satisfactory
      to
      Licensor of their destruction. Licensee shall be responsible to Licensor for
      any
      damages caused by the unauthorized use by Licensee or by others of such molds,
      silk-screens or reproduction materials which are not turned over to
      Licensor.

    

    (d) Licensee
      acknowledges that any breach or threatened breach of any of Licensee's covenants
      in this Agreement relating to the Property, including without limitation,
      Licensee's failure to

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    cease
      the
      manufacture, sale, marketing or distribution of the Licensed Products or the
      promotional and packaging material relating to the Licensed Products at the
      termination or expiration of this Agreement, except as provided in Paragraph
      18(b), will result in immediate and irreparable damage to Licensor and to the
      rights of any subsequent licensee of Licensor. Licensee acknowledges and admits
      that there is no adequate remedy at law for any such breach or threatened
      breach, and Licensee agrees that in the event of any such breach or threatened
      breach, Licensor shall be entitled to injunctive relief and such other relief
      as
      any court with jurisdiction may deem just and proper.

    

    (e) Within
      twenty (20) days after expiration or notice of termination of this Agreement,
      as
      the case may be, Licensee shall deliver to Licensor a written report indicating
      the number and description of the Licensed Products, which it had on hand or
      in
      the process of manufacture as of the date of expiration or at the time
      termination notice is received. Licensor may conduct a physical inventory in
      order to verify such report. If Licensee fails to submit the required written
      report or refuses to permit Licensor to conduct such physical inventory,
      Licensee shall forfeit its rights under this Agreement to dispose of such
      inventory. In addition to such forfeiture, Licensor shall have recourse to
      all
      other available remedies.

    

    
      	
            	20.	
              LIMITATION
                OF LIABILITY

            

    

    

    EXCEPT
      WITH RESPECT TO THE INDEMNIFICATION OBLIGATIONS OF THE PARTIES HEREUNDER, IN
      NO
      EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR SPECIAL,
      INCIDENTAL, CONSEQUENTIAL, EXEMPLARY, PUNITIVE, MULTIPLE OR OTHER INDIRECT
      DAMAGES, OR FOR LOSS OF PROFITS, LOSS OF DATA OR LOSS OF USE DAMAGES, ARISING
      OUT OF THE MANUFACTURE, SALE, SUPPLYING OR FAILURE OR DELAY IN SUPPLYING OF
      THE
      PRODUCTS OR SERVICES RELATED THERETO, WHETHER BASED UPON WARRANTY, CONTRACT,
      TORT, STRICT LIABILITY OR OTHERWISE, EVEN IF  HAS BEEN ADVISED OF THE
      POSSIBILITY OF SUCH DAMAGES OR LOSSES.

    

    
      	
            	21.	
              INDEMNITY
                AND INSURANCE

            

    

    

    (a) Licensee
      acknowledges that it will have no claims against Licensor for any damage to
      property or injury to persons arising out of the operation of Licensee's
      business. Licensee agrees to indemnify, hold harmless and defend Licensor with
      legal counsel acceptable to Licensor from and against all demands, claims,
      injuries, losses, damages, actions, suits, causes of action, proceedings,
      judgments, liabilities and expenses, including reasonable attorneys' fees,
      court
      costs and other legal expenses, arising out of or connected with third party
      claims against Licensor relating to the Licensed Products, the promotional
      or
      packaging material relating to the Licensed Products, Licensee's methods of
      manufacturing, marketing, selling or distributing the Licensed Products, or
      any
      breach by Licensee of any provision of this Agreement or of any warranty made
      by
      Licensee in this Agreement. No approval by Licensor of any action by Licensee
      shall affect any right of Licensor to indemnification hereunder. 

    

    (b) Licensee
      shall obtain and maintain during the term of this Agreement and the one hundred
      eighty (180) day disposal period, if any, provided for in Paragraph 18(b),
      comprehensive general liability insurance coverage, including product liability
      insurance, naming Licensor as additional insured. Such insurance shall be
      underwritten by insurers satisfactory to Licensor and shall be written for
      limits of not less than Two Million Dollars ($2,000,000.00) each occurrence
      combined, for

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    bodily
      injury, including death and property damage. Licensee shall furnish Licensor
      promptly upon the execution of this Agreement with a certificate of insurance
      stating thereon the limits of liability, the period of coverage, the parties
      insured (including Licensee and Licensor), and the insurer's agreement not
      to
      terminate or materially modify such insurance without endeavoring to notify
      Licensor in writing at least ten (10) days before such termination or
      modification. Licensee’s coverage shall be primary, and any insurance maintained
      by Licensor shall be in excess of, and not contributing to, the insurance
      provided by Licensee.

    

    (c) [Intentionally
      Deleted.]

    

    (d) The
      existence of the insurance coverage shall not mitigate, alter or waive the
      indemnity provisions of Paragraph 21(a). Licensor shall not be responsible
      for
      the payment of the premiums, charge taxes, assessments or other costs for the
      insurance.

    

    
      	
            	22.	
              REPRESENTATION,
                WARRANTY AND
                INDEMNIFICATION

            

    

     

    Licensor
      warrants and represents that: (a) Licensor (and the officers executing on its
      behalf) has full right and power to enter into this Agreement; (b) neither
      the
      execution and the delivery of this Agreement, nor the license granted herein,
      will violate the terms of any existing Agreements to which Licensor is a party;
      (c) so long as this Agreement remains in effect, Licensor shall not commit
      any
      act or enter into any agreement with any third party which is inconsistent
      or in
      conflict with this Agreement; (d) the Property and any and all other materials
      delivered by Licensor to Licensee shall be original or under a valid license
      to
      Licensee with right to provide the exclusive License as set forth herein to
      Licensee; and (e) neither the execution and performance of this Agreement by
      Licensor nor the license granted herein, infringes, misuses, misappropriates
      or
      conflicts with the rights, including copyright, trademark and other intellectual
      property rights or contract rights, licensed to or from, or owned by, a party
      other than Licensor. Licensor shall defend, indemnify and hold harmless
      Licensee, its parent, affiliated companies and partners and their respective
      officers, directors, members, employees and agents from and against any and
      all
      liabilities, claims, obligations, suits, judgments, amounts paid in settlement,
      costs and expenses (including, without limitation, reasonable attorneys fees,
      court costs and expenses) which Licensee may incur as a result of a breach
      by
      Licensor of any its representations, warranties, covenants or undertakings
      as
      set forth in this Agreement.

    

    
      	
            	23.	
              NOTICES

            

    

    

    Notices
      provided for herein shall be considered effectively given when sent by Certified
      Mail, in the case of Licensor, to:

    

    ANTIK
      DENIM, LLC

    5804
      E.
      Slauson Avenue

    Commerce,
      CA 90040

    Attn:
      Paul Guez, Manager & CEO

    

    And,
      in
      the case of Licensee, to:

    

    MAX
      RAY,
      INC.

    1363
      Elwood Street

    Los
      Angeles, California 90021

    Attn: 
      Josh
      Cherin, President

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    

    
      	
            	24.	
              PAYMENT
                AND STATEMENT ADDRESS

            

    

    

    Licensee
      shall send payments and statements to:

    

    ANTIK
      DENIM, LLC

    5804
      E.
      Slauson Avenue

    Commerce,
      CA 90040

    

    
      	
            	25.	
              ASSIGNMENT
                AND SUBLICENSE

            

    

    

    The
      license granted hereunder is personal to Licensee, and Licensee shall not
      assign, transfer or sublicense any of its rights under this Agreement or
      delegate any of its obligations under this Agreement (whether voluntarily,
      by
      operation of law, change in control or otherwise) without Licensor's prior
      written approval, not to be unreasonably withheld. It shall be deemed
      unreasonable for Licensor to withhold its approval if Licensee wishes to assign
      its rights and obligations hereunder to any other entity owned or controlled
      by
      Licensee, or which owns or controls Licensee, or which is under common ownership
      or control as Licensee. Any attempted assignments, transfer, sublicense or
      delegation by Licensee without such approval shall be void and a material breach
      of this Agreement. A change in the majority ownership or a material change
      in
      the management of Licensee shall constitute an assignment of rights under this
      Paragraph requiring Licensor's prior approval. Licensor is entering into this
      Agreement with Licensee based, in substantial part, on the unique attributes,
      which Licensee and its business offer, in view of Licensee's management,
      products and methods of operation. Subject to the foregoing, this Agreement
      will
      be binding upon, and inure to the benefit of, the parties and their respective
      successors and assigns.

    

    
      	
            	26.	
              APPROVALS

            

    

    

    Any
      approval or consent required by this Agreement to be obtained from Licensor
      must
      be made in writing by Licensee and Licensor shall not unreasonably withhold,
      condition or delay any required consent or approval thereto. 

    

    
      	
            	27.	
              COSTS
                AND EXPENSES

            

    

    

    Each
      party shall bear and pay all costs and expenses arising in connection with
      its
      performance of this Agreement.

    

    
      	
            	28.	
              INDEPENDENT
                CONTRACTOR

            

    

    

    Licensee
      is an independent contractor and not an agent, partner, joint venturer,
      affiliate or employee of Licensor. No fiduciary relationship exists between
      the
      parties. Neither party shall be liable for any debts, accounts, obligations
      or
      other liabilities of the other party, its agents or employees. Licensee shall
      have no authority to obligate or bind Licensor in any manner. Licensor has
      no
      proprietary interest in Licensee and has no interest in the business of
      Licensee, except to the extent expressly set forth in this
      Agreement.

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    

    
      	
            	29.	
              SEVERABILITY

            

    

    

    If
      any
      provision of this Agreement shall be determined to be illegal and unenforceable
      by any court of law or any competent governmental or other authority, the
      remaining provisions shall be severable and enforceable in accordance with
      their
      terms so long as this Agreement without such terms or provisions does not fail
      of its essential purpose or purposes. The parties will negotiate in good faith
      to replace any such illegal or unenforceable provision or provisions with
      suitable substitute provisions, which will maintain the economic purposes and
      intentions of this Agreement.

    

    
      	
            	30.	
              EXHIBITS

            

    

    

    All
      references to "Exhibit" or "Exhibits" herein shall mean those Exhibits A through
      D attached to this Agreement, which Exhibits, wherever referred to herein,
      are
      hereby incorporated into this Agreement as though fully set forth
      herein.

    

    
      	
            	31.	
              SURVIVAL

            

    

    

    Licensee's
      obligations and agreements under Paragraphs 4, 5, 8, 9, 13, and 18 shall survive
      the termination or expiration of this Agreement. 

    

    
      	
            	32.	
              MISCELLANEOUS

            

    

    

    
      	
            	(a)	
              Captions.

            

    

    

    The
      captions for each Paragraph have been inserted for the sake of convenience
      and
      shall not be deemed to be binding upon the parties for the purpose of
      interpretation of this Agreement.

    

    
      	
            	(b)	
              Scope
                and Amendment of Agreement.

            

    

    

    This
      Agreement constitutes the entire agreement between the parties with respect
      to
      the subject matter of this Agreement, supersedes any and all prior and
      contemporaneous negotiations, understandings or agreements in regard to the
      license of the Property in connection with the Licensed Products is intended
      as
      a final expression of their agreement. Any amendment to this Agreement shall
      be
      ineffective unless it is made in writing, signed by authorized representatives
      of each of the parties, and expressly states that it is an amendment to this
      Agreement.

    

    
      	
            	(c)	
              Governing
                Law.

            

    

    

    This
      Agreement will be deemed to have been executed in the State of California and
      will be construed and interpreted according to the laws of that State without
      regard to its conflicts of law principles or rules. The parties agree that
      any
      legal action or proceeding with respect to this Agreement shall be brought
      in
      the Superior Court for the Central District of California, Los Angeles Judicial
      District or, if such court does not have jurisdiction, in any court of general
      jurisdiction in the County of Los Angeles, California. Licensee consents to
      the
      personal jurisdiction of such courts, agrees to accept service of process by
      mail and hereby waives any jurisdictional or venue defenses otherwise
available
      to it.

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    

    
      	
            	(d)	
              Attorneys'
                Fees.

            

    

    

    If
      either
      party brings any legal action or other proceeding to interpret or enforce the
      terms of this Agreement, or retains a collection agent to collect any amounts
      due under this Agreement, then the prevailing party shall be entitled to recover
      reasonable attorneys' fees and any other costs incurred, in addition to any
      other relief to which it is entitled.

    

    
      	
            	(e)	
              Interpretation.

            

    

    

    The
      parties agree that each party and its counsel have reviewed this Agreement
      and
      the normal rule of construction that any ambiguities are to be resolved against
      the drafting party shall not be employed in the interpretation of this
      Agreement.

    

    
      	
            	(f)	
              Waiver.

            

    

    

    The
      failure of Licensor to insist in any one or more instances upon the performance
      of any term, obligation or condition of this Agreement by Licensee or to
      exercise any right or privilege herein conferred upon Licensor shall not be
      construed as thereafter waiving such term, obligation, or condition, or
      relinquishing such right or privilege, and the acknowledged waiver or
      relinquishment by Licensor of any default or right shall not constitute waiver
      of any other default or right. No waiver shall be deemed to have been made
      unless expressed in writing and signed by an authorized officer of
      Licensor.

    

    
      	
            	(g)	
              Intentionally
                Deleted.

            

    

    

    
      	
            	(h)	
              Rights
                Cumulative.

            

    

    

    Except
      as
      expressly provided in this Agreement, and to the extent permitted by law, any
      remedies described in this Agreement are cumulative and not alternative to
      any
      other remedies available at law or in equity. 

    

    
      	
            	(i)	
              [Intentionally
                Deleted.] 

            

    

    

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK.]

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      parties have caused this Agreement to be executed by their
      authorized representatives on the dates indicated below.

    

    "LICENSOR"

    

    ANTIK
      DENIM, LLC

    

    

    By:
      /s/
      Larry
      Jacobs                             

    

    Title:
      CFO                                              

    

    Date:
      5/1/07                                           

    

    

    

    “LICENSEE”

    

    MAX
      RAY, INC.

     

     

    
      By:
        /s/ Josh Cherin 
                             

      

      Title: President                                      
        

      

      Date:
        5/1/07                                           

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

    Licensed
      Products

     

     

    
      	
              1.

            	
              Small
                leather goods, consisting
                of belts, handbags, small leather accessories and
                scarves.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      B

     

    MANUFACTURER'S
      AGREEMENT

     

     

    This
      Manufacturer's Agreement is made pursuant to the License Agreement between
      ANTIK
      DENIM, LLC ("Licensor") and MAX RAY, INC. ("Licensee")). The term of this
      Agreement shall begin on ________
      and end
      on _______,
      unless
      sooner terminated in accordance with Paragraph 20 of the License
      Agreement.

    

    __________________________________________________________________________________________________

    Manufacturing
      Company Name

    

    __________________________________________________________________________________________________

    Manufacturer
      Company Street Address (including, City, State, Zip, Country)

    

    __________________________________________________________________________________________________

    Manufacturing
      Location Street Address (including, City, State, Zip, Country)

    

    __________________________________________________________________________________________________

    Contact
      Person and Telephone and/or Fax Number

    

    __________________________________________________________________________________________________

    List
      the
      Licensed Products you will manufacture (Attach a separate sheet, if necessary
      to
      list all of the Licensed Products you will manufacture)

    

    Manufacturer
      desires to manufacture and sell to Licensee the above listed Licensed Products
      bearing the intellectual property of Licensor and as listed on the attached
      Exhibit C (herein after referred to as the "Property"). Such Licensed Products
      shall be manufactured only at Manufacturing Location. In consideration of
      Licensor's approval of the manufacture by Manufacturer of any Article listed
      above and bearing the Property, the parties agree as follows:

    

    Manufacturer
      acknowledges the validity of and Licensor's sole title to the Property.
      Manufacturer agrees that its right to manufacture Licensed Products with the
      Property thereon is in all respects subject to the terms and conditions in
      the
      License Agreement, including, but not limited to, the termination provisions
      and
      restrictions on the use of the Property. Manufacturer agrees that the provisions
      of the License Agreement shall take precedence over and supersede any agreements
      between Licensee and Manufacturer. Manufacturer shall sell Licensed Products
      with the Property thereon only to Licensee. Manufacturer agrees that its
      manufacture of Licensed Products shall give Manufacturer no right to use the
      Property or to sell Licensed Products bearing the Property beyond the expiration
      or termination of the License Agreement. If Licensee's right to use the Property
      expires or terminates, Manufacturer agrees to make no claim against ANTIK DENIM,
      LLC for any reason.

    

    
      	
              ANTIK
                DENIM, LLC

            	
              MANUFACTURER

            
	 	 
	
              By: 
                _________________________________________

            	
              By: 
                _________________________________________

            
	
              Title:

            	
              Title

            
	 	 
	
              Date:
                

            	
              Date:
                

            
	 	 
	
              MAX
                RAY, INC.

            	 
	 	 
	
              By: 
                _________________________________________

            	 
	
              Title:

            	 
	 	 
	
              Date:
                

            	 

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      C

     

    Trademark
      Applications and Registrations in the Territory for Class
      18

     

     

    PENDING
      TRADEMARK APPLICATIONS

    

    
      	
              United
                States

            	
              77095625

            

    

    

    PATENT
      PENDING

    

    
      	
              United
                States

            	
              29/182,927

            

    

    

    COPYRIGHTS

    

    
      	
              Eagle
                Design Plain

            	
              VA1-355-011

            
	
              Eagle
                Design (Text)

            	
              VA1-353-106

            
	
              Pocket
                Design

            	
              VA1-311-528

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      D

     

    GUARANTY

     

     

    This
      agreement (hereinafter “Guaranty”)
      is
      entered into by and between the undersigned guarantor (“Guarantor”)
      and
      Antik Denim, LLC. (“Antik”)
      as of
      the 1st day of September, 2006.

    

    WITNESSETH

    

    WHEREAS,
      Antik and Max Ray, Inc. (“Company”)
      have
      agreed to enter into a license agreement of even date herewith for the purposes
      of manufacturing, selling, marketing and distributing products bearing the
      Antik
      trademarks, copyrights and patents (the “License
      Agreement”);
      and

    

    WHEREAS,
      as a material inducement and condition precedent to entering into the License
      Agreement, Antik has required that Guarantor guaranty, and Guarantor has agreed
      to guaranty, the Guaranteed Minimum Royalty (defined in the License Agreement)
      due to Licensor under and pursuant to the License Agreement on year-by-year
      basis.

    

    AGREEMENT

    

    NOW,
      THEREFORE, in consideration of the foregoing premises, and for other good and
      valuable consideration the receipt and adequacy of which are hereby
      acknowledged, the parties agree as follows:

    

    1. In
      the
      event of termination of the License Agreement as a result of a non-curable
      breach by Licensee or Licensee ceases to do business and the royalties paid
      and/or payable by Licensee to Licensor during the Annual Period (defined in
      License Agreement), together with the amounts paid by Licensee to Licensor
      pursuant to Paragraph 4(c), are, in aggregate, less than the Guaranteed Minimum
      Royalty for such Annual Period, Guarantor hereby guarantees payment of such
      difference (the “Obligations”),
      in
      accordance with Paragraph 19(a) of the License Agreement.

    

    2. This
      Guaranty is and is intended to be an absolute, unconditional and continuing
      guaranty which shall not be affected by any act or thing whatsoever except
      as
      herein provided, and which shall be independent of and in addition to any other
      guaranty, endorsement or collateral held by Antik with respect to any or all
      of
      the Obligations. Guarantor specifically acknowledges and agrees that, as long
      as
      Company remains obligated to pay the Guaranteed Minimum Royalty under the
      Agreement, this Guaranty shall remain in full force and effect.

     

    3. Guarantor
      is an individual residing in the State of California. The execution, delivery,
      and performance of this Guaranty are not in contravention of any applicable
      law,
      or any indenture, agreement, or undertaking to which Guarantor is a party or
      by
      which Guarantor or his property is bound. This Guaranty constitutes the legal,
      valid, and binding obligation of Guarantor enforceable in accordance with its
      terms.

     

    4. Antik
      and
      Company shall have the right, without affecting the Guarantor’s obligation
      hereunder, and with demand or notice, from time to time: (a) to receive,
      exchange or release any collateral securing

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    payment
      of the Obligations or any part thereof; and (b) to release or compromise this
      or
      any other Guaranty executed in connection with the Obligations.

     

    5. This
      Guaranty shall inure to the benefit of Antik, its successors in interest and
      assigns and shall be binding upon the heirs, executors, administrators, and
      successors and assigns, of the Guarantor. Notwithstanding the foregoing,
      Guarantor shall not be permitted to assign his Obligations hereunder without
      the
      prior written consent of Antik, which consent may be withheld.

     

    6. Antik
      may
      enforce this Guaranty whenever the Obligations become due or at any time
      thereafter, following the service of fifteen (15) days written notice upon
      Guarantor with respect to a default of the Obligations. Payment under this
      Guaranty shall be due immediately upon demand by Antik, following the expiration
      of all applicable cure periods.

     

    7. Notices
      to Guarantor hereunder shall be sent to the address set forth opposite its
      signature below.

     

    8. If
      any
      party brings an action or is required to retain counsel to enforce any provision
      of this Guaranty or to declare rights hereunder, the prevailing party shall
      be
      entitled to recover from the other party any and all expenses and costs
      incurred, including, but not limited to, reasonable attorneys’
fees.

     

    9.This
      Guaranty shall be governed by the laws of the State of California. In the event
      of any action, suit or proceeding brought under or in connection with this
      Guaranty exclusive venue and jurisdiction shall lie in the County of Los
      Angeles, State of California, or any county and state where Guarantor may reside
      at the time of enforcement of any provision of this Guaranty.

     

    10. This
      Guaranty may not be amended or modified unless such amendment or modification
      is
      in writing and signed by the party against which the modification or amendment
      is sought to be enforced.

     

    11. No
      delay
      in enforcing or failure to enforce any right under this Guaranty by Antik will
      constitute a waiver by Antik of that right.

     

    12. If
      any
      provision of this Guaranty is held to be invalid or unenforceable, that
      invalidity or unenforceability will not invalidate this Guaranty as a whole,
      but
      this Guaranty will be construed as though it did not contain the particular
      provision held to be invalid or unenforceable and the rights and obligations
      of
      the parties will be construed and enforced only to the extent as is permitted
      by
      applicable law.

     

    13. This
      Guaranty represents the entire agreement and understanding of the Guarantor
      concerning the subject matter of this Guaranty, and supersedes all other prior
      agreements, understandings, negotiations, discussions, representations,
      warranties, commitments, proposals, offers, and contracts concerning the subject
      matter of this Guaranty, whether oral or written.

     

    Executed
      and effective as of this _______day of March, 2007.

     

     

    
      	
              Guarantor:

            	
              Josh
                Cherin

            
	
              Address:

            	
              12314
                Sunset Parkway

            
	
              City,
                State, Zip

            	
              Los
                Angeles, CA 90064

            
	 	 
	 	 
	 	
              GUARANTOR

            
	 	 
	 	 
	 	
              By: 
                _________________________________________

            
	 	
              Josh
                Cherin

            
	 	 
	 	
              Date:EXHIBIT 10.1

THIS PROMISSORY  NOTE HAS NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933,
AS  AMENDED,  OR ANY  APPLICABLE  STATE  SECURITIES  LAWS AND MAY NOT BE SOLD OR
TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS
OF  APPLICABLE  FEDERAL  AND  STATE  SECURITIES  LAWS OR  APPLICABLE  EXEMPTIONS
THEREFROM.

THIS PROMISSORY NOTE IS SUBJECT TO A SUBORDINATION AND  INTERCREDITOR  AGREEMENT
DATED AS OF OCTOBER  11, 2002 BY AND AMONG  CHEMED  CORPORATION,  PCI-A  HOLDING
CORP., PCI HOLDING CORP. AND PNC BANK, NATIONAL ASSOCIATION.

                              AMENDED AND RESTATED
                              --------------------
                       SENIOR SUBORDINATED PROMISSORY NOTE
                       -----------------------------------

$12,500,000                         Original Date: October 11, 2002
                       Amended and Restated as of February 23, 2007

     FOR VALUE RECEIVED, PCI HOLDING CORP., a Delaware corporation (the
"Borrower") promises to pay to the order of Chemed Corporation, a Delaware
corporation (hereinafter referred to as the "Lender") on or before October 31,
2009 (the "Maturity Date"), the principal sum of TWELVE MILLION FIVE HUNDRED
THOUSAND DOLLARS ($12,500,000), or such part thereof as then remains unpaid, and
to pay interest from the date hereof on the whole amount of said principal sum
remaining from time to time unpaid at the rate of (i) seven and one-half percent
(7.5%) per annum for the period from October 11, 2002 through September 30,
2004; (ii) eight and one-half percent (8.5%) per annum for the period from
October 1, 2004 through September 30, 2005; (iii) nine and one-half percent
(9.5%) per annum for the period from October 1, 2005 through March 1, 2007; and
(iv) the greater of (1) the annual interest rate payable by the Borrower on its
senior credit facility with PNC Bank, National Association (or any successor
senior lender to the Borrower) plus 2.0% per annum or (2) eleven and one-half
percent (11.5%) per annum for the period from March 1, 2007 through the Maturity
Date. Such interest shall be payable quarterly in arrears on the last Business
Day of March, June, September and December in each year, the first such payment
to be due and payable on December 31, 2002. Principal, premium, if any, and
interest shall be payable in lawful money of the United States of America, in
immediately available funds, by wire transfer of funds to the account or
accounts designated in writing by the Lender or in such other manner as the
Lender may designate from time to time in writing to the Borrower.

     Interest shall be computed on the basis of a 360-day year for the actual
number of days elapsed. Nothing in this Note shall require the Borrower to pay
interest at a rate in excess of the maximum rate permitted by applicable law.
Notwithstanding any other provision of this Note, the Lender does not intend to
charge and Borrower shall not be required to pay any interest or other fees or
charges in excess of the maximum permitted by applicable law; any payments in
excess of such maximum shall be credited to reduce principal hereunder. All
payments received by the Lender hereunder will be applied first to costs of
collection, if any, then to interest and the balance to principal.

     The Borrower also promises to pay all taxes levied or assessed upon said
advances againstany holder of this Note and to pay all costs, including
attorneys' fees, costs relating to the appraisal and/or valuation of assets and
all costs incurred in the collection, defense, preservation, administration,
enforcement or protection of this Note or in any guaranty or endorsement of this
Note, or in any litigation arising out of the transactions of which this Note or
any guaranty or endorsement of this Note is a part.

     This Note amends and restates in its entirety that certain Senior
Subordinated Promissory Note of the Borrower in favor of the Lender dated
October 11, 2002 in the original principal amount of $12,500,000.

     This Note is subject to the following terms and conditions:

     1.   Prepayment.
          ----------

          (a) Required Liquidity Redemption. In the event and upon the closing
of a Qualified Public Offering or a Sale Event (as defined below) prior to the
Maturity Date, the Borrower shall redeem, without penalty or premium, except as
set forth in Section 1(c), this Note, together with all accrued and unpaid
interest then due thereon.

                                      E-1
<PAGE>

          (b) Optional Redemption. In addition to the redemption of this Note
required under Section 1(a), the Borrower may, at any time and from time to
time, redeem, without penalty or premium except as set forth in Section 1(c),
this Note, in whole or in part, together with interest due on the amount so
redeemed through the date of redemption.

          (c) Redemption Premium. Should the Borrower redeem this Note, in whole
or in part, pursuant to Section 1(a) or 1(b), at any time after October 11, 2007
and prior to the Maturity Date, the Borrower shall pay to the Lender at the time
of such redemption an additional amount equal to five percent (5%) of the total
principal amount of this Note redeemed at such time. No redemption premium shall
be payable by the Borrower should the Borrower redeem this Note, in whole or in
part, pursuant to Section 1(a) or 1(b), at any time on or prior to October 11,
2007.

          (d) Notice of Redemption. Notice of any optional redemption pursuant
to Section 1(b) shall be given to the Lender at least five (5) Business Days
prior to the date of such redemption and notice of any required redemption
pursuant to Section 1(a) shall be given to the Lender at least five (5) Business
Days prior to the closing of a Qualified Public Offering or a Sale Event.

          (e) Liquidation Payment. In the event that this Note is paid by the
Borrower on or after the Maturity Date without having been redeemed by the
Borrower prior thereto pursuant to Section 1(a) or 1(b), then upon the closing
of a Qualified Public Offering or a Sale Event after the Maturity Date, the
Borrower shall pay to the Lender at the time of such closing an additional
amount equal to ten percent (10%) of the total principal amount of this Note
paid by the Borrower on or after the Maturity Date.

     2. Transfer and Exchange of this Note. The Lender may, prior to maturity or
prepayment thereof surrender this Note at the principal office of the Borrower
for transfer or exchange. The Lender shall first notify the Borrower in writing
at least five (5) Business Days in advance of such transfer or exchange. Within
a reasonable time after such notice to the Borrower from the Lender of its
intention to make such exchange and without expense (other than transfer taxes,
if any) to the Lender, the Borrower shall issue in exchange therefor another
note or notes, in such denominations as requested by the Lender, for the same
aggregate principal amount, as of the date of such issuance, as the unpaid
principal amount of this Note so surrendered and having the same maturity and
rate of interest, containing the same provisions and subject to the same terms
and conditions as this Note so surrendered provided that such proposed
transferees shall, prior to the issuance of the new note, execute and deliver an
instrument of accession to the Subordination Agreement (as defined below). Each
new note shall be made payable to such person or persons, or assigns, as the
Lender may designate, and such transfer or exchange shall be made in such a
manner that no gain or loss of principal or interest shall result therefrom.

     3. Replacement of Notes. Upon receipt of evidence satisfactory to the
Borrower of the loss, theft, destruction or mutilation of this Note and, if
requested by the Borrower in the case of any such loss, theft or destruction,
upon delivery of an indemnity bond or other agreement or security reasonably
satisfactory to the Borrower, or, in the case of any such mutilation, upon
surrender and cancellation of such Note, the Borrower will issue a new Note, of
like tenor and amount and dated the date to which interest has been paid, in
lieu of such lost, stolen, destroyed or mutilated Note.

     4. Subordination. The indebtedness evidenced by this Note shall be
subordinate and junior to certain indebtedness of the Borrower to PNC Bank,
National Association (the "Bank") and certain other lenders in the manner and to
the extent provided in the Subordination and Intercreditor Agreement entered as
of October 11, 2002 by and among the Lender, PCI-A Holding Corp., the Borrower
and the Bank (the "Subordination Agreement"). At the request of the Borrower's
current or future senior lender at any time or from time to time, the Lender and
the Borrower shall enter into (i) an amendment of the Subordination Agreement to
confirm that the terms of the Subordination Agreement apply to this Note as
amended and restated and/or (ii) a similar agreement on comparable terms with
any other senior lender of the Borrower.

     5. Representations and Warranties of Borrower. The Borrower represents and
warrants to Lender as follows:

                                      E-2
<PAGE>

     5.1 Organization and Corporate Power. The Borrower is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, and has all necessary corporate power and authority to issue this
Note and to perform its obligations hereunder.

     5.2 Authorization of Transaction. The execution, delivery and performance
of this Note has been duly and validly authorized by all requisite corporate
action on the part of the Borrower, and no other corporate proceedings on their
part are necessary to authorize the execution, delivery or performance of this
Note. This Note constitutes a valid and binding obligation of the Borrower,
enforceable in accordance with its terms.

     5.3 No Violation. The Borrower is not subject to or obligated under its
certificate of incorporation or by-laws or any applicable material law, rule or
regulation of any governmental authority, or any agreement or instrument, or any
license, franchise or permit, or any order, writ, injunction or decree, that
would be breached or violated by the Borrower's execution, delivery or
performance of this Note.

     5.4 Governmental Authorities and Consents. No consent, approval or
authorization of any governmental or regulatory authority or any other party or
person is required to be obtained by the Borrower in connection with its
execution, delivery and performance of this Note.

     5.5 Litigation. There are no material actions, suits, proceedings or orders
pending or, to the Borrower's knowledge, threatened against or affecting the
Borrower at law or in equity, or before or by any federal, state, municipal or
other governmental court, department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that would adversely affect the Borrower's
ability to perform its obligations under this Note.

     6. Covenants of Borrower. The Borrower covenants and agrees with the Lender
as follows for so long as this Note is outstanding:

     6.1 Dividends and Distributions; Acquisitions. Except with the prior
written consent of the Lender, the Borrower will not (i) pay any cash dividend
on, or make any other cash distribution in respect of, any of its Capital Stock
or (ii) acquire all or substantially all of the voting capital stock or assets
of any business entity (other than any subsidiary of the Borrower).

     6.2 Transactions with Affiliates. The Borrower will not enter into any
transaction with any officer, director or stockholder of the Borrower, or any
entity controlled by any such officer, director or stockholder, except for (i)
transactions between the Borrower and any direct or indirect wholly-owned
subsidiary of the Borrower, (ii) compensation to officers, directors, employees,
consultants or agents of the Borrower in connection with their employment by the
Borrower in the ordinary course of business and consistent with the Borrower's
past practices, and (iii) transactions that are in the ordinary course of the
Borrower's business, upon fair and reasonable terms that are no less favorable
to the Borrower than would be obtained in an arm's-length transaction with a
non-affiliated person or entity.

     6.3 Payment of Subordinated Indebtedness. The Borrower will not make any
payment on any indebtedness for borrowed money that is pari passu with or
subordinated to this Note, except under the terms of the subordination,
intercreditor, or other similar agreement to which such other indebtedness is
subject.

     6.4 Payment of Senior Indebtedness. For the avoidance of doubt, nothing in
this Note shall in any way restrict the Borrower's right or ability to make any
payment on any current or future indebtedness that is not by its express terms
pari passu with or subordinated to this Note.

     7. Events of Default. If any of the following events "Events of Default")
shall occur and be continuing:

          (a) The Borrower shall fail to pay any installment of principal of
this Note when due;

          (b) The Borrower shall fail to pay any interest or premium, if any, on
this Note when due and such failure is not cured within fifteen (15) days;

          (c) The Borrower shall default in the performance of any other
covenant or obligation contained in this Note for thirty (30) days after written
notice thereof shall have been given to the Borrower;

                                      E-3
<PAGE>

          (d) The Borrower shall be involved in financial difficulties evidenced
(1) by its admitting in writing its inability to pay its debts generally as they
become due; (ii) by its commencement of a voluntary case under Title 11 of the
United States Code as from time to time in effect, or by its 4 authorizing, by
appropriate proceedings of its board of directors or other governing body, the
commencement of such a voluntary case; (iii) by its filing an answer or other
pleading admitting or failing to deny the material allegations of a petition
filed against it commencing an involuntary case under said Title Ii, or seeking,
consenting to or acquiescing in the relief therein provided, or by its failing
to controvert timely the material allegations of any such petition; (iv) by the
entry of an order for relief in any involuntary case commenced under said Title
11 which is not dismissed within sixty (60) days; (v) by its seeking relief as a
debtor under any applicable law, other than said Title 11, of any jurisdiction
relating to the liquidation or reorganization of debtors or to the modification
or alteration of the rights of creditors, or by its consenting to or acquiescing
in such relief; (vi) by the entry of an order by a court of competent
jurisdiction (a) finding it to be bankrupt or insolvent, (b) ordering or
approving its liquidation, reorganization or any modification or alteration of
the rights of its creditors, or (c) assuming custody of, or appointing a
receiver or other custodian for, all or a substantial part of its property; or
(vii) by its making an assignment for the benefit of, or entering into a
composition with, its creditors, or appointing or consenting to the appointment
of a receiver or other custodian for all or a substantial part of its property;

          (e) Any judgment, writ, warrant of attachment or execution or similar
process shall be issued or levied against a substantial part of the property of
the Borrower and such judgment, writ, or similar process shall not be released,
vacated or fully bonded within thirty (30) days after its issuance or levy;

then, and in any such event listed in Sections 6(a) through (g), the Lender may,
by notice to the Borrower, declare the entire unpaid principal amount of this
Note, and all interest accrued and unpaid thereon to be forthwith due and
payable, whereupon this Note, and all such accrued interest shall become and be
forthwith due and payable (unless there shall have occurred an Event of Default
under Section 6(d) in which case all such amounts shall automatically become due
and payable), without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrower, provided that,
if at any time after the principal of this Note shall have become due and
payable, and before any judgment or decree for the payment of the moneys so due,
or any portion thereof, shall have been entered, then and in every such case the
Lender may, by written instrument filed with the Borrower, rescind and annul
such declaration and its consequences.

     8. Definitions.

     "Business Day" means any day other than a Saturday, Sunday or public
holiday or the equivalent for banks under the laws of the Commonwealth of
Massachusetts.

     "Capital Stock" means all authorized capital stock of the Borrower.

     "Common Stock" means the common stock of the Borrower, par value $0.01 per
share.

     "Qualified Public Offering" means an initial underwritten public offering
by the Borrower of its Common Stock pursuant to an effective registration
statement under the Securities Act of 1933, as amended, for an offering price
resulting in net proceeds to the Borrower of at least Fifty Million Dollars
($50,000,000.00).

     "Sale Event" means any (i) consolidation or merger of the Borrower into or
with any other entity or entities which results in the exchange of outstanding
shares of Capital Stock of the Borrower for securities or other consideration
issued or paid or caused to be issued or paid by any such entity or any
affiliate thereof (other than (A) a merger or consolidation to reincorporate the
Borrower in a different jurisdiction, or (B) a merger or consolidation in which
the stockholders of the Borrower immediately prior to such consolidation or
merger shall own more than 50% of the outstanding shares of capital stock or
have sufficient voting power (by virtue of number of votes and/or special voting
rights) to elect a majority of the members of the board of directors of the
resulting or surviving Borrower immediately after such consolidation or merger
(a "Merger Acquisition"), (ii) the sale or transfer by the Borrower of all or
substantially all its assets, or the sale by the Borrower after February 23,
2007 of assets resulting in aggregate net cash proceeds to the Borrower in
excess of Twenty Five Million Dollars ($25,000,000.00) (an "Asset Sale"), or
(iii) the sale or transfer by the Borrower's stockholders of outstanding shares
of Capital Stock that have sufficient voting power (by virtue of number of votes
and/or special voting rights) to elect a majority of the members of the Board of
Directors, in a single transaction or series of related transactions, to a
person, entity or "group" (as such term is used in Section 13(d) of the U.S.
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder) (a "Change of Control").

                                      E-4
<PAGE>

     9. Waivers, Consent to Jurisdiction.

     If this Note is not paid in accordance with its terms, Borrower shall pay
to Lender, in addition to principal and accrued interest thereon, all costs of
collection of the principal and accrued interest and any required liquidation
payment, including, but not limited to, reasonable attorneys' fees, court costs
and other costs for the enforcement of payment of this Note.

     No waiver of any obligation of Borrower under this Note shall be effective
unless it is in a writing signed by Lender. A waiver by Lender of any right or
remedy under this Note on any occasion shall not be a bar to exercise of the
same right or remedy on any subsequent occasion or of any other right or remedy
at any time.

     This Note is delivered in and shall be enforceable in accordance with the
internal domestic laws of the State of Delaware (without regard to the conflicts
of law provisions thereof), and shall be construed in accordance therewith, and
shall have the effect of a sealed instrument.

     Borrower hereby expressly waives presentment, demand, and protest, notice
of demand, dishonor and nonpayment of this Note, and all other notices or
demands of any kind in connection with the delivery, acceptance, performance,
default or enforcement hereof and hereby consents to any delays, extensions of
time, renewals, waivers or modifications that may be granted or consented to by
the holder hereof with respect to the time of payment or any other provision
hereof.

     IN WITNESS WHEREOF, the Borrower has executed this Note under seal as of
the date first written above.

                                                     PCI HOLDING CORP.

                                                     By: /s/ Robert J. Nixon

                                                         Name: Robert J. Nixon
                                                               ---------------
                                                         Title: CEO
                                                                ---

WITNESS: By: /s/ Larry Sussman

     Name: Larry Sussman
           -------------

     Title: Director of Finance
            -------------------

                                      E-5

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