Document:

Equity Incentive Plan

Exhibit 10.14

ETERNAL IMAGE, INC CORPORATION

2008 EQUITY INCENTIVE PLAN

Adopted by the Board of Directors on September 10, 2008

Approved by Shareholders on September 10, 2008

Termination Date:  October 1, 2015

1. PURPOSES.

Available Stock Awards.  The purpose of this Plan is to provide a means by which Eligible Recipients may be given an opportunity to benefit from increases in value of the Common Stock through the granting of the following Stock Awards:  (i) Incentive Stock Options, (ii) Non-qualified Stock Options, (iii) Stock Bonuses, and (iv) Stock Appreciation Rights.

General Purpose.  The Company, by means of this Plan, seeks to retain the services of Eligible Recipients, to secure and retain the services of new members of this group, and to provide incentives for Participants to exert maximum efforts for the success of the Company and its Affiliates.

2. DEFINITIONS.

(a) “Affiliate” of the Company means any parent corporation or subsidiary corporation of the Company, whether now or hereafter existing, as those terms are defined in §§424(e) and (f), respectively, of the Code.

(b) “Board” means the board of directors of the Company, as such board may be duly constituted from time to time.

(c) “Bonus Shares” means the shares of Common Stock issued or issuable pursuant to an award of a Stock Bonus.

(d) “Business of the Company” as of any designated date means (i) the design and manufacturing of brand-name funerary products, and (ii) any other business conducted or publicly announced by the Company or any of its Affiliates, if any, as of such date.

(e) Termination for “Cause” means termination of a Participant’s employment or other association with the Company principally due to and within thirty (30) days following actual knowledge of the Board of any of the following:  

(i)       indictment, conviction or a plea of nolo contendre of the Participant of any crime involving moral turpitude, or any felony; 

(ii)      any willful misconduct, gross negligence, or gross neglect of the Participant’s duties to the Company; 

(iii)     any illegal use by the Participant of any controlled substances, or any severe alcoholic intoxication on Company premises; 

(iv)     any discrimination by the Participant against or harassment of the Company’s employees, customers, vendors or guests, which behavior is illegal or civilly actionable under federal or state law; 

(v)      falsification of any report or document (regardless of medium) by the Participant, related to the business of the Company; 

(vi)     failure to use best efforts to comply with any reasonable legal directive of the Board or of the Company’s Chief Executive Officer, which failure continues after warning; 

(vii)   any repeated material violation of any generally applicable written Company policy;  or 

(viii)  Any breach by the Participant of any Employment Agreement or Confidentiality Agreement to which the Participant may be subject, which breach is not cured to the Company’s reasonable satisfaction within ten (10) days following written notice thereof by Company to the Participant.  

Occasional, unrelated, unrepeated, ordinary mistakes shall not constitute grounds for termination of a Participant for Cause, for purposes of this Plan.

(f)  “Change of Control” means (i) a sale, lease or other disposition of all or substantially all of the assets of the Company, (ii) a consolidation or merger of the Company with or into any other corporation or other entity, or a merger of another corporation or other entity into the Company, or any other corporate reorganization, in connection with any of which the shareholders of the Company immediately prior to such consolidation, merger or reorganization, own less than fifty percent (50%) of the outstanding voting power of the surviving entity (or its parent) following the consolidation, merger or reorganization, or (iii) any transaction (or series of related transactions involving a person or entity, or a group of affiliated persons or entities) in which in excess of fifty percent (50%) of the Company’s outstanding voting power is transferred.

(g)  “Code” means the Internal Revenue Code of 1986, as amended.

(h)  “Committee” shall have the meaning set forth in §3(a), below.

(i)  “Common Stock” means the voting Common Stock of the Company.

(j)  “Company” means Eternal Image Inc, a Delaware Corporation.

(k)  “Consultant” means any person (i) engaged full-time or part-time by the Company or an Affiliate of the Company to render consulting or advisory services and who is compensated for such services, or (ii) who is a member of the board of directors of an Affiliate of the Company.  

(l)  “Continuous Service” of a Participant means that the Participant’s service with the Company or an Affiliate of the Company, whether as an Employee, Director or Consultant, is not interrupted.  A Participant’s Continuous Service shall not be deemed to have been interrupted merely because of a change in the capacity in which the Participant renders service to the Company or an Affiliate of the Company as an Employee, Consultant or Director or a change in the entity for which the Participant renders such service  (for example, a change in status from an Employee of the Company to a Consultant of an Affiliate of the Company or a Director of the Company will not constitute an interruption of Continuous Service).  Authorized vacations and other authorized leaves of absence (such as sick leave, military leave, maternity leave, and jury duty) shall not result in interruption of Continuous Service.  The Board shall determine in its sole discretion whether Continuous Service shall be considered interrupted in the case of any unauthorized leave of absence of a Participant.

(m)  “Director” means a member of the Board, as the Board may be duly constituted from time to time.

(n)  “Disability” means the permanent and total disability of a person within the meaning of §22(e)(3) of the Code.

(o)  “Eligible Recipients” means the Employees, Directors and Consultants of the Company.

 (p)  “Employee” means any person employed by the Company or an Affiliate of the Company.  Mere service as a Director or payment of a director’s fee by the Company or an Affiliate of the Company shall not be sufficient to constitute “employment” by the Company or an Affiliate of the Company.

(q)  “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(r)  “Fair Market Value” or “FMV” of a share of Common Stock means:

(i)        in connection with any effective registration under the Securities Act and public sale of Common Stock by the Company, the gross offering price per share to the public; or 

(ii)      otherwise, if there exists a public market for the Common Stock, the average of the closing bid and asked prices of the Common Stock quoted in the Over-The-Counter Market Summary or the last reported sale price of the Common Stock or the closing price quoted on any exchange on which the Common Stock is listed, as published in the Western Edition of The Wall Street Journal, for the five (5) trading days immediately preceding the date of determination of FMV; or otherwise, the fair market value thereof as determined in good faith by the Board.

(s)  “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of §422 of the Code and the regulations promulgated thereunder.

(t)  “Non-qualified Stock Option” means an Option not intended to qualify as an Incentive Stock Option.

(u)  “Officer” means a person who is an officer of the Company within the meaning of §16 of the Exchange Act and the rules and regulations promulgated thereunder.

(v)  “Option” means an Incentive Stock Option or a Non-qualified Stock Option granted pursuant to this Plan.

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(w)  “Option Agreement” means a written agreement between the Company and an Optionholder evidencing the terms and conditions of an individual Option grant.  Each Option Agreement shall be subject to the terms and conditions of this Plan.

(x) “Optionholder” means a person to whom an Option is granted pursuant to this Plan or, if applicable, such other person who holds an outstanding Option.

(y)  “Option Shares” means the shares of Common Stock underlying and subject to acquisition as a result of exercise of an Option.

(z)  “Outside Director” means a Director of the Company who is both (i) an “outside director” for purposes of §162(m) of the Code, and (ii) a “non-employee director” for purposes of Rule 16b-3.

(aa)  “Participant” means a person to whom a Stock Award is granted pursuant to this Plan or, if applicable, any other person who holds an outstanding Stock Award.

(bb)  “Plan” means this Timberline Resources Corporation 2004 Equity Incentive Plan.

(cc)  “Public Registration” means the earlier to occur of (i) the effectiveness of a registration statement filed by the Company with the U.S. Securities and Exchange Commission under the Securities Act with respect to the Common Stock, or (ii) registration of the Company under the Exchange Act.

(dd)  “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.

(ee)  “SAR” means a Stock Appreciation Right, i.e. the contractual right to receive a cash bonus on or before a designated date in an amount equal to the increase (if any) between the FMV as of the date of issuance of the SAR (or other designated base date) and the FMV as of the date of exercise or expiration of the SAR (or other designated end date).

(ff)  “Securities Act” means the Securities Act of 1933, as amended.

(gg)  “Stock Award” means any right granted under this Plan, including an Option, a Stock Bonus and/or a SAR.

(hh)  “Stock Award Agreement” means a written agreement between the Company and a holder of a Stock Award evidencing the terms and conditions of an individual Stock Award grant.  Each Stock Award Agreement shall be subject to the terms and conditions of this Plan.

(ii)  “Stock Bonus” means an outright grant of Common Stock to a Participant, for which a Participant pays no consideration or less than Fair Market Value.

(jj)  “Ten Percent Shareholder” means a person who owns (or is deemed to own pursuant to §424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company.

3. ADMINISTRATION.

(a) General.  The Board may delegate administration of this Plan to a committee of one or more Directors (a “Committee”).  If the Board delegates administration of this Plan to a Committee, the Committee shall have, in connection with the administration of this Plan, the powers theretofore possessed by the Board, including the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board shall thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of this Plan, as may be adopted from time to time by the Board.  Following a Public Registration, the Committee shall consist exclusively of one or more Outside Directors.  The Board may abolish the Committee at any time and revest in the Board the administration of this Plan.  If no Committee is appointed by the Board or if the Committee has been abolished without replacement, the entire Board shall constitute the Committee for purposes of this Plan.

(b) Administration by Committee.  The Committee shall administer this Plan.  The Committee shall have the power, subject to, and within the limitations of, the express provisions of this Plan:

(i)     Determination of Grants.  To determine from time to time which Eligible Recipients shall be granted Stock Awards; when and how each Stock Award shall be granted; what type or combination of types of Stock Award shall be granted; the provisions of each Stock Award (which need not be identical); and the number of shares with respect to which a Stock Award shall be granted to each Participant.

(ii)     Interpretation. To construe and interpret this Plan and Stock Awards granted under it, and to establish, amend and revoke rules and regulations for its administration.  The Committee, in 

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the exercise of this power, may correct any defect, omission or inconsistency in this Plan or in any Stock Award Agreement, in a manner and to the extent it shall deem necessary or expedient to make this Plan fully effective.

(iii)    Amendments.  To amend this Plan as provided in §15, below.

(iv)    General.  Generally, to exercise such powers and to perform such acts as the Committee deems necessary or expedient to promote the best interests of the Company which are not in conflict with the provisions of this Plan.

4. SHARES SUBJECT TO THIS PLAN.

(a) Share Reserve.  Subject to the provisions of §6(l) below, the Common Stock that may be issued pursuant to Stock Awards (not including SARs) shall not exceed in the aggregate Twenty million (20,000,000) shares of Common Stock (the “Share Reserve”).  There is no limit upon the number of SARs that may be awarded to Participants.  

(b)  Reversion of Shares to the Share Reserve.  If any Option shall for any reason expire or otherwise terminate, in whole or in part, without having been exercised in full, the Option Shares not acquired under such Option shall revert to the Share Reserve and again become available for issuance under this Plan.  If any Option Shares or Bonus Shares are forfeited prior to vesting, such Option Shares or Bonus Shares shall revert to the Share Reserve and again become available for issuance under this Plan.

(c) Source of Shares.  The Common Stock subject to this Plan may be unissued shares or reacquired shares in Treasury.

5. ELIGIBILITY.

(a) Eligibility for Specific Stock Awards.  Incentive Stock Options may be granted only to Employees.  Stock Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants.

(b) Ten Percent Shareholders.  Ten Percent Shareholder shall be eligible for the grant of an Incentive Stock Option on an equal basis with any other permitted participant.

(c) Section 162(m) Limitation.  Following a Public Registration, and subject to the provisions of §6(m) below, no Employee shall be granted Stock Awards covering more than five million (5,000,000) shares of Common Stock during any calendar year if and to the extent that such grant(s) would cause such Employee to receive excessive (and therefore non-deductible) remuneration under §162(m) of the Code and the rules and regulations promulgated there under. 

6. OPTION PROVISIONS.

(a) General.  Each Option shall be evidenced and governed by an Option Agreement, in such form and containing such terms and conditions as the Committee shall deem appropriate.  Each Option may be exercised, to the extent vested, in whole or in part, at any time and from time to time.  All Options shall be separately designated Incentive Stock Options or Non-qualified Stock Options at the time of grant, and a separate certificate or certificates will be issued for Option Shares purchased on exercise of each type of Option.  The provisions of separate Options need not be identical, but each Option Agreement shall incorporate by reference the provisions of this Plan.

(b)  Term.  Unless otherwise provided in an individual Option Agreement, no Option shall be exercisable after the expiration of seven (7) years from the date it is granted.

(c) Exercise Price. 

(i)      Incentive Stock Options.  Subject to the provisions of §5(b) above, the exercise price of each Incentive Stock Option shall equal one hundred percent (100%) of the Fair Market Value of the stock subject to the Option on the date the Option is granted.  Notwithstanding the foregoing, an Incentive Stock Option may be granted with an exercise price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of §424(a) of the Code. 

(ii)    Non-Qualified Stock Options.  Unless otherwise provided in an Option Agreement, the exercise price of each Non-qualified Stock Option shall equal one hundred percent (100%) of the Fair Market Value of the stock subject to the Option on the date the Option is granted.

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(d) Incentive Stock Option Limitations. 

(i)       Shareholder Approval.  This Plan, and the ISOs issued pursuant to this Plan have not, as of the date of adoption, been approved by the shareholders of the Company as provided in Section 422(a) of the Code.  No ISO may be issued pursuant to this Plan absent such shareholder approval, which must occur, if at all, within 12 months after the date of adoption of this Plan.

(ii)     $100,000 Limitation.  To the extent that the aggregate Fair Market Value (determined at the time of grant) of stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and its Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as Non-qualified Stock Options.

(e) Consideration.  The purchase price of Common Stock acquired pursuant to an Option shall be paid at the time the Option is exercised either (1) in cash, or (2) if (and only if) explicitly permitted in the applicable Option Agreement, to the extent allowed by applicable statutes and regulations:

(i)      Pyramiding. By delivery to the Company of already owned shares of Common Stock that either have been held for the period required to avoid a charge to the Company’s reported earnings (generally six (6) months) or were not acquired, directly or indirectly, from the Company, and that are owned free and clear of any liens, claims, encumbrances, or security interests; provided, however, that no Option may be so exercised to the extent it would constitute a violation of the provisions of any law, regulation, or agreement restricting the redemption of the Company’s stock.  Shares of Common Stock so delivered in payment of the exercise price of an Option shall be valued at the FMV thereof as of the date of exercise of the Option. 

(ii)      Net Issue (“Cashless”) Exercise. If at any time when an Option is otherwise exercisable the FMV of one share of Common Stock is greater than the exercise price for the Option, the Optionholder may notify the Company of his or her election to exercise the Option in whole or in part by Net Issue Exercise by delivering a such notification together with surrender of the Option Agreement as provided herein, and the Optionholder shall receive from the Company a number of shares of Common Stock equal to:

A  x  (FMV - Exercise Price)

FMV

where A equals the number of Option Shares as to which the Option is being exercised by Net Issue Exercise.

(iii)   Other.  In any other form of legal consideration that may be acceptable to the Committee.

(f) Transferability.

(i)      Incentive Stock Options. An Incentive Stock Option shall not be transferable except by will or by the laws of descent and distribution.

(ii)     Non-qualified Stock Options.  Unless otherwise provided in the applicable Option Agreement, a Non-qualified Stock Option shall not be transferable except by will or by the laws of descent and distribution.

(g) Vesting.  

(i)      Schedule.  Unless otherwise provided in the applicable Option Agreement, each Option shall vest (i.e. become exercisable) as to one (1) year following the applicable Date of Grant for Officers; and as to three (3) years following the applicable Date of Grant for anyone else.  

(ii)     Cessation.  Vesting of all Options shall cease upon the Optionholder’s termination of Continuous Service, regardless of the reason for termination, except as otherwise provided in §10, below.

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(h) Early Termination.

(i)     Disability.  In the event an Optionholder’s Continuous Service terminates as a result of the Optionholder’s Disability, the Optionholder or his or her representative may exercise his or her Option (to the extent vested as of the date of termination), but only within such period of time ending on the earlier of (A) the date twelve (12) months following such termination, or (B) the expiration of the term of the Option as set forth in the Option Agreement.  If and to the extent, after termination, the Optionholder does not exercise his or her Option within the time specified herein, the Option shall terminate.

(ii)     Death.  In the event (A) an Optionholder’s Continuous Service terminates as a result of the Optionholder’s death, or (B) the Optionholder dies within three (3) months after the termination of the Optionholder’s Continuous Service for a reason other than death, then the Option may be exercised (to the extent vested as of the date of termination) by the Optionholder’s estate or by a person who acquired the right to exercise the Option by bequest or inheritance, but only within the period ending on the earlier of (1) the date twelve (12) months following the date of termination, or (2) the expiration of the term of such Option as set forth in the Option Agreement.  If and to the extent, after death, an Option is not exercised within the time specified herein, the Option shall terminate.

(iii)    Other Termination of Continuous Service.  In the event an Optionholder’s Continuous Service terminates (other than due to the Optionholder’s death or Disability, and other than due to termination for Cause), the Optionholder may exercise his or her Option (to the extent vested as of the date of termination) but only within such period of time ending on the earlier of (A) the date three (3) months following the termination of the Optionholder’s Continuous Service, or (B) the expiration of the term of the Option as set forth in the Option Agreement.  If and to the extent that, after termination, an Optionholder does not exercise his or her Option within the time specified herein, the Option shall terminate.

(iv)    Extension of Termination Date.  Notwithstanding the foregoing, if the exercise of an Option following termination of an Optionholder’s Continuous Service is prohibited at any time when the Optionholder otherwise desires to exercise the Option, solely because an exemption from the registration requirements of the Securities Act and/or any applicable state securities law is not available, then the Option shall terminate on the earlier to occur of (A) three (3) months after the date on which such an exemption first becomes available, or (B) the expiration of the term of the Option as set forth in the Option Agreement.

(v)     Termination for Cause.  In the event that an Optionholder’s employment or other association with the Company is terminated by the Company for Cause, all Options held by such Optionholder (whether or not vested) shall thereupon immediately terminate.

(i) Early Exercise.  If (and only if) explicitly permitted in the applicable Option Agreement, the Optionholder may elect at any time before the Optionholder’s Continuous Service terminates to exercise any or all of the unvested portion of the Option (“Early Exercise”).  Any Option with respect to which Early Exercise is available, shall be subject to the following:

(i)     Partial Exercise.  Partial exercise of a partially vested Option shall be deemed to cover first the vested portion of the Option and then the earliest vesting installment of the unvested portion of the Option.

 (ii)    $100,000 ISO Limitation.  If the Option is an Incentive Stock Option, then, to the extent that the aggregate Fair Market Value (determined at the time of grant) of stock with respect to which the Option plus all other Incentive Stock Options held by the Optionholder are exercisable for the first time during any calendar year (under all plans of the Company and its Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or portions thereof that exceed such limit (according to the order in which they were granted) shall be treated as Non-qualified Stock Options.

(iii)    Repurchase of Unvested Shares.  In the event that, following Early Exercise, the Optionholder’s Continuous Service is interrupted prior to the date on which the Option would have been fully vested, an appropriate portion of the Option Shares acquired by Early Exercise shall be subject to repurchase by the Company, at the option of the Company 

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exercisable at any time within sixty (60) days following the date of such interruption, for cash in an amount equal to the exercise price thereof.

(j) Re-Load Options.  If (and only if) explicitly permitted in the applicable Option Agreement, in the event an Optionholder exercises an Option in whole or in part by pyramiding or by cashless exercise prior to expiration or earlier termination of the Option, the Optionholder shall be entitled to a further Option (a “Re-Load Option”) upon exercise of the Option.  Any such Re-Load Option shall be subject to the following:

(i)      Number of Shares.  The number of Option Shares subject to a Re-Load Option shall equal (A) the number of shares surrendered as part or all of the exercise price of such Option, in the event of pyramiding, or (B) the number of Option Shares foregone, in the event of cashless exercise.

(ii)     Expiration Date.  The expiration date of the Re-Load Option shall be the same as the expiration date of the Option the exercise of which gave rise to such Re-Load Option. 

(iii)    Exercise Price.  The exercise price for the Re-Load Option shall equal one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Re-Load Option on the date of exercise of the original Option.  

(iv)   Subject to Plan.  The Re-Load Option shall be subject to this Plan.  

(v)     Same Type of Option.  If the original Option was a Non-qualified Stock Option, the Re-Load Option also shall be a Non-qualified Stock Option. If the original Option was an Incentive Stock Option, the Re-Load Option also shall be an Incentive Stock Option; provided, however, that the designation of any Re-Load Option as an Incentive Stock Option shall be subject to the one hundred thousand dollar ($100,000) annual limitation on the exercisability of Incentive Stock Options described in §6(d)(ii) above and in §422(d) of the Code.  

(vi)    No Further Re-Loads.  There shall be no Re-Load Options on a Re-Load Option.  

(vii)   Limitations.  Any Re-Load Option shall be subject to the availability of sufficient shares under §4(a) and the “Section 162(m) Limitation” on the grants of Options under §5(c), above 

(k) No Shareholder Rights.  No Optionholder shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any Option Shares subject to an Option unless and until such Participant has exercised and satisfied all requirements for exercise of the Option pursuant to its terms.

(l) Stock Splits.  

(i)      Forward Stock Splits.  If at any time the number of shares of Common Stock outstanding shall be increased by a subdivision or split-up of shares of Common Stock, or by a stock dividend or recapitalization, then, effective upon the date of such increase, (A) the number of Option Shares to be delivered upon exercise of each outstanding Option shall be increased so that the Optionholder will be entitled to purchase the number of shares of Common Stock that such Optionholder would have owned immediately following such action had his or her Option been exercised immediately prior thereto, and (B) the number of shares of Common Stock subject to the Share Reserve shall be increased proportionately.

(ii)    Reverse Stock Splits. If at any time the num­ber of shares of Common Stock outstanding shall be decreased by a combination of shares of Com­mon Stock, then, effective upon the date of date of such combination, (A) the number of Option Shares to be delivered upon exercise of each outstanding Option shall be decreased so that the Optionholder will be entitled to purchase the number of shares of Common Stock that such Optionholder would have owned immediately following such action had his or her Option been exercised immediately prior thereto, and (B) the number of shares of Common Stock subject to the Share Reserve shall be decreased proportionately.

(iii)    Exercise Price Adjustment.  Whenever the number of Option Shares purchasable upon exercise of outstanding Options is adjusted pursuant to this §6(l), the exercise price payable upon exercise of each such Option shall be adjusted by multiplying the applicable exercise 

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price in effect immedi­ately prior to such adjustment by a fraction, of which the numerator shall be the number of Option Shares purchasable upon the exercise of the Option immediately prior to such adjustment, and of which the denominator shall be the number of Option Shares purchasable immediately thereafter.

(m) Liquidation.  In the event of a liquidation of the Company, then effective immediately prior to such event (i) all outstanding Options shall terminate, and (ii) all unvested Option Shares and unvested Bonus Shares shall be forfeited and revert to the Company.

(n) Reorganization, Reclassification, Consolidation, Merger or Sale.  

(i)       Organic Changes. Any reorganization, recapitalization, reclassification, consolidation, merger, sale of all or substantially all of the Company’s assets or other transaction, in each case which is effected in such a manner that the holders of Common Stock are entitled to receive (either directly or upon subsequent liquidation) cash, securities and/or other property of the Company and/or of any third party with respect to or in exchange for Common Stock, is referred to herein as an “Organic Change”.  In connection with any Organic Change, absent an election by the Board permitted under §6(n)(ii) immediately below, (A) the Company shall make appropriate provision to ensure that each Optionholder shall thereafter have the right to acquire and receive, in lieu of or in addition to (as the case may be) the Option Shares immediately theretofore acquirable upon exercise of his or her Option, such cash, securities and/or other property as such Optionholder would have received in connection with such Organic Change if such Optionholder had been entitled to exercise and had exercised his or her Option immediately prior to such Organic Change, and (B) the vesting, early termination and other provisions of this Plan and the applicable Option Agreement shall continue thereafter with respect to the Option and such cash, securities and/or other property to the extent possible.  The Company shall not effect any Organic Change unless prior to the consummation thereof, the successor entity (if other than the Company) resulting from consolidation or merger or the entity purchasing such assets assumes, by written instrument, the obligation to deliver to the Optionholder such cash, securities and/or other Property as, in accordance with the foregoing provisions, the Optionholder may be entitled to acquire.

(ii)     Accelerated Vesting/Termination.  In connection with any Organic Change, notwithstanding the provisions of §6(n)(i) above, the Board may elect instead (A) to accelerate the vesting of all outstanding Options, and (B) to require all Optionholders to decide whether to exercise their Options in connection with (and contingent upon the consummation of) the Organic Change.  Any Options not exercised following an election by the Board under this §6(n)(ii) shall terminate effective and contingent upon the consummation of the Organic Change.

(o) Notice of ISO Disposition.  Each Optionholder acquiring Option Shares through exercise of an ISO shall notify the Company in writing within fifteen (15) days after the date of any disposition of any of such Option Shares that occurs (i) within two (2) years after the applicable Date of Grant, or (ii) within one (1) year after such Option Shares were acquired as a result of exercise of the ISO.

(p) Exercise Procedure.  An Optionholder may exercise the vested portion of an Option (and the unvested portion of an Option if the applicable Option Agreement so permits) during its term by delivering a Notice of Exercise (in a form designated by the Company) together with the applicable exercise price to the Secretary of the Company, or to such other person as the Company may designate, during regular business hours, together with such additional documents as the Company may then require.

7. PROVISIONS OF STOCK BONUSES.

(a) General.  Each Stock Bonus shall be evidenced and governed by a Stock Award Agreement, in such form and containing such terms and conditions as the Committee shall deem appropriate.  The terms and conditions of separate Stock Bonus awards need not be identical, but each Stock Bonus award shall incorporate by reference the provisions of this Plan.

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(b) Consideration.  A Stock Bonus shall be awarded in consideration for past services actually rendered to the Company or an Affiliate of the Company for its benefit.

(c) Vesting Schedule.  Unless otherwise provided in the applicable Stock Award Agreement, Bonus Shares shall vest (i.e. become non-forfeitable) as follows:  one-third of the total number of Bonus Shares shall vest one (1) year following the Date of Grant, and two-thirds (the remainder) of the Bonus Shares shall vest over the subsequent three (3) year period in eight (8) equal quarterly increments.    

(d) End of Continuous Service.  Effective upon the Participant’s termination of Continuous Service, regardless of the reason for termination, except as otherwise provided in §9  below, (i) vesting of all Bonus Shares shall cease, and (ii) all unvested Bonus Shares shall be forfeited and revert to the Company.

8. PROVISIONS OF SARS.

(a) General.  Each SAR shall be evidenced and governed by a SAR Award, in such form and containing such terms and conditions as the Committee shall deem appropriate.  Unless otherwise provided in the SAR Award, each SAR may be exercised, to the extent vested, in whole or in part, at any time and from time to time.  The provisions of separate SAR Awards need not be identical, but each SAR Award shall incorporate by reference the provisions of this Plan.

(b) Base Price.   Unless otherwise provided in a SAR Award, the base price of each SAR shall equal one hundred percent (100%) of the Fair Market Value of the Common Stock on the date the SAR is granted.

(c) Transferability.   Unless otherwise provided in the applicable SAR Award, a SAR shall only be transferable during the lifetime of the Participant.   

(d) Vesting.  

(i)      Schedule.  Unless otherwise provided in the applicable SAR Award, each SAR shall vest (i.e. become exercisable) as to one (1) year following the applicable Date of Grant for Officers; and as to two (2) years following the applicable Date of Grand for anyone else.  

 (ii)     Cessation.  Vesting of all SARs shall cease upon the Participant’s termination of Continuous Service, regardless of the reason for termination, except as otherwise provided in §10, below.

(e) Early Termination.

(i)      Disability.  In the event a Participant’s Continuous Service terminates as a result of his or her Disability, the Participant or his or her representative may exercise his or her SAR (to the extent vested as of the date of termination), but only within such period of time ending on the earlier of (A) the date twelve (12) months following such termination, or (B) the expiration of the term of the SAR as set forth in the SAR Award.  If and to the extent, after termination, the Participant or his or her representative does not exercise his or her SAR within the time specified herein, the SAR shall terminate.

(ii)     Death.  In the event (A) a Participant’s Continuous Service terminates as a result of the Participant’s death, or (B) the Participant dies within three (3) months after the termination of the Participant’s Continuous Service for a reason other than death, then the SAR may be exercised (to the extent vested as of the date of termination) by the Participant’s estate or by a person who acquired the right to exercise the SAR by bequest or inheritance, but only within the period ending on the earlier of (1) the date twelve (12) months following the date of termination, or (2) the expiration of the term of such SAR as set forth in the SAR Award.  If and to the extent, after death, a SAR is not exercised within the time specified herein, the SAR shall terminate.

(iii)    Other Termination of Continuous Service.  In the event a Participant’s Continuous Service terminates (other than due to the Participant’s death or Disability, and other than due to termination for Cause), the Participant may exercise his or her SARs (to the extent vested as of the date of termination) but only within such period of time ending on the earlier of (A) the date three (3) months following the termination of the Participant’s Continuous Service, or (B) the expiration of the term of the SAR as set forth in the SAR Award.  If and to the extent that, after termination, a Participant does not exercise his or her SAR within the time specified herein, the SAR shall terminate.

9

(iv)    Termination for Cause.  In the event that a Participant’s employment or other association with the Company is terminated by the Company for Cause, all SARs held by such Participant (whether or not vested) shall thereupon immediately terminate.

(f) Stock Splits.  If at any time the number of shares of Common Stock outstanding shall be increased by a subdivision or split-up of shares of Common Stock, or by a stock dividend or recapitalization, or the num­ber of shares of Common Stock outstanding shall be decreased by a combination of shares of Com­mon Stock, then, effective upon the date of such increase, the number of shares and base price of each outstanding SAR shall be subject to appropriate adjustment. 

(g) Liquidation.  In the event of a liquidation of the Company, then effective immediately prior to such event, all outstanding SARs shall terminate. 

(h) Reorganization, Reclassification, Consolidation, Merger or Sale.  In connection with any Organic Change, (i) all outstanding unvested SARs shall vest, and (ii) absent exercise prior to consummation of the Organic Change (which exercise may be made contingent upon closing of the Organic Change), all outstanding SARs shall terminate effective upon the consummation of the Organic Change.

9. PROVISIONS APPLICABLE TO ALL STOCK AWARDS

(a) Market Standoff.  The Company (or a representative of its underwriters) may, in connection with a Public Registration, require that each Participant not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, any shares of Common Stock or other securities of the Company held by the Participant for a period of time specified by the Company or its underwriter(s) following the effective date of the Public Registration.  The Company or the underwriter(s) may require the Participants to execute and deliver such other agreements that are consistent with the foregoing or that are necessary to give further effect thereto.  In order to enforce the foregoing, the Company may impose stop-transfer instructions with respect to the Common Stock until the end of such period.

(b) Claw-back.  This §9(b) shall apply in the event (and only in the event) that, during the term of a Participant’s employment or other association with the Company or within nine (9) months thereafter, the Participant becomes employed by or otherwise affiliated with, directly or indirectly as an officer, director, employee, manager, general partner, trustee, consultant, contractor, or more than five percent (5%) owner of, any person or entity that competes with the Business of the Company anywhere in North America (a “Competitive Event”).   Effective upon a Competitive Event, unless waived by the Company:

(i)      Termination of Unexercised Rights.  All vested and unvested unexercised Options and SARs shall terminate.

(ii)     Forfeiture of Unvested Shares.  All unvested Option Shares and unvested Bonus Shares shall be forfeited and revert to the Company.

(iii)     Repurchase of Vested Shares.  The Company shall have the right, exercisable at any time within sixty (60) days following actual knowledge of the Competitive Event by the Committee, to repurchase any or all of the Participant’s vested Option Shares and vested Bonus Shares for cash in an amount equal to the original purchase price thereof. 

(c) No Transfer of Unvested Rights.   No Participant shall be entitled to sell, pledge or otherwise transfer, with or without consideration (“Transfer”), any SARs, any unvested Option Shares, or any unvested Bonus Shares.

(d) Right of First Refusal.

(i)      General.  If any Participant shall at any time propose to Transfer any vested Option Shares or vested Bonus Shares (“Offered Shares”), other than to a spouse, a lineal descendant, or a trust all of the beneficiaries of which are the Participant’s spouse and/or lineal descendants (“Permitted Transferees”), the Participant shall, prior to such Transfer, deliver to the Company an offer (the “Offer”) to Transfer the Offered Shares to the Company or its assigns in accordance with this §8(d)(i).  The Offer shall state the name of the proposed transferee and the terms (including the purchase price) of the proposed Transfer.  The Offer shall remain open and irrevocable for a period of thirty (30) days from the delivery thereof 

10

to the Company (the “Acceptance Period”).  The Company may accept the Offer and purchase all (but not less than all) of the Offered Shares by delivering to the Participant a notice in writing (the “Acceptance Notice”) within the Acceptance Period.  If the Company delivers an Acceptance Notice, the transfer of the Offered Shares to the Company shall be made on a business day, not less than ten (10) and not more than thirty (30) days after delivery of the Acceptance Notice, on the terms and conditions of the Offer.  If the Company does not exercise within the Acceptance Period its right to purchase all of the Offered Shares, the Participant may Transfer all (and not less than all) of the Offered Shares on terms and conditions not less favorable to Participant than the terms and conditions of the Offer to (and only to) the proposed transferee within ninety (90) days after expiration of the Acceptance Period.  If such Transfer is not made within such 90-day period, the restrictions provided for in this §8(d)(i) shall again become effective.

(ii)     Termination of Right of First Refusal.  This §9(d) shall terminate and become void upon a Public Registration.

(e) Continuing Agreements.  As a condition to the effectiveness of any Transfer of Option Shares or Bonus Shares, the transferee shall be required to execute an acknowledgement that the provisions of this §9 shall survive the Transfer.  Any Transfer in violation of this §9 shall be null and void.  Each certificate evidencing Option Shares and Bonus Shares shall reflect a legend substantially as follows:

THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF THE ISSUER’S 2004 EQUITY INCENTIVE PLAN, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICES OF THE ISSUER.  AMONG OTHER PROVISIONS, SUCH PLAN RESTRICTS TRANSFER OF THE COMMON STOCK EVIDENCED BY THIS CERTIFICATE.

10. CHANGE OF CONTROL.

(a) Loss of Employment.  In connection with a Change of Control, with respect to each Participant who holds any unvested Stock Awards and who is an Employee of the Company immediately prior to such Change of Control (a “Continuing Employee”), in the event that (A) any surviving or acquiring entity assumes unvested Stock Awards outstanding under this Plan or substitutes similar stock awards pursuant to §6(n)(i) above, and (B) either (I) the Continuing Employee is not offered employment by the surviving or acquiring entity (which employment shall not result in any reduction in the Participant’s salary or any material adverse change in the Participant’s package of benefits in effect at the time of the Change of Control, taken as a whole), (II) such Continuing Employee is terminated by the surviving or acquiring entity without Cause within nine (9) months following the effective date of the Change of Control, or (III) such Continuing Employee voluntarily terminates his or her employment for Good Reason (as defined herein) within nine (9) months following the effective date of the Change of Control, then with respect to such unvested Stock Awards held by such Continuing Employee, the vesting of such Stock Awards shall be accelerated in full effective immediately prior to such termination.  As used herein, “Good Reason” shall mean (I) a reduction in compensation; (II) a relocation of the principal worksite location to a location more than thirty (30) miles from the principal worksite immediately prior to the Change of Control; or (III) for an Officer, a material reduction in responsibilities, title or authority as in effect immediately prior to the Change of Control.

(b) Automatic Acceleration.  The Committee shall have the authority (but not an obligation) to include as part of any Stock Award Agreement a provision automatically vesting in full the Option or the Bonus Shares subject to the Stock Award, effective upon a Change of Control, regardless of whether the Participant is an Employee or whether the Participant’s employment or other association with the Company terminates in connection with the Change of Control.

11. TAX BONUSES.

In connection with any Stock Award, if specifically so provided in the Stock Award Agreement, the Company shall have the right (but no obligation) to pay or commit itself to pay to the Participant a cash bonus (a “Tax Bonus”) in such amount as may be sufficient to allow the Participant pay his or her incremental federal and state income taxes arising as a consequence of (i) receipt of the Tax Bonus, and (ii) as applicable, receipt of a Stock Bonus, exercise of a Non-qualified Stock Option, or exercise of a SAR. 

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12.  COVENANTS OF THE PARTICIPANTS.

(a) No Employment or other Service Rights.  Nothing in this Plan or any Stock Award Agreement (i) shall confer upon any Participant any right to continue to serve the Company or an Affiliate of the Company in the capacity in effect at the time the Stock Award was granted or in any other capacity, or (ii) shall affect the right of the Company or an Affiliate of the Company to terminate (I) the employment of an Employee with or without notice and with or without cause, subject to the terms of any employment agreement with such Employee, (II) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate of the Company, or (III) the service of a Director pursuant to the Bylaws of the Company (or its Affiliate) and any applicable provisions of the corporate law of the state in which the Company (or its Affiliate) is incorporated, as the case may be.

(b) Investment Assurances.  

(i)       By virtue of his or her acceptance of a Stock Award and execution of a Stock Award Agreement, each Participant automatically shall be deemed to have represented and warranted to the Company that: 

(A)  The Stock Award is being acquired for the Participant’s own account, for investment purposes only, not for the account of any other person and not with a view to distribution, assignment or resale to others. The Participant will not sell, hypothecate or otherwise transfer the Stock Award unless (I) the transfer is registered under the Securities Act, and registered or qualified for sale under applicable state securities laws, or (II) unless waived by the Company, the Company has received a written opinion of counsel (which opinion and counsel are satisfactory to the Company) that an exemption from the registration or qualification requirements of the Securities Act and such state laws is available.

(B)  The Participant understands that (I) the value of the Stock Award is speculative, and (II) there may be no public or other market for the Stock Award.

(ii)      By virtue of his or her exercise of an Option, each Optionholder automatically shall be deemed to have represented and warranted to the Company that: 

(A)  The Option Shares purchased as a consequence of exercise of the Option are being acquired for the Optionholder’s own account, for investment purposes only, not for the account of any other person and not with a view to distribution, assignment or resale to others. The Optionholder will not sell, hypothecate or otherwise transfer the Option Shares unless (I) the transfer is registered under the Securities Act, and registered or qualified for sale under applicable state securities laws, or (II) unless waived by the Company, the Company has received a written opinion of counsel (which opinion and counsel are satisfactory to the Company) that an exemption from the registration or qualification requirements of the Securities Act and such state laws is available.

(B)  The Optionholder is familiar with and understands the current and proposed business activities of the Company. The Optionholder has been given the opportunity to obtain additional information from the Company and to discuss the current and proposed business of the Company with representatives of the Company. The Company has made available to the Optionholder all documents and information that the Optionholder has requested relating to an investment in the Option Shares. With respect to tax and other economic considerations involved in the investment, the Optionholder is not relying on any advice or opinions from the Company or any person acting on its behalf.  The Optionholder has carefully considered and has, to the extent the Optionholder believes appropriate, discussed with the Optionholder’s legal, tax, accounting and financial advisors the suitability of an investment in the Option Shares for the Optionholder’s particular tax and financial situation and has determined that the Option Shares which the Optionholder is purchasing are a suitable investment. 

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The Optionholder (I) has adequate means for providing for the Optionholder’s current financial needs and personal contingencies; (II) has no need for liquidity in the investment; (III) can afford a complete loss of the funds invested in the Option Shares; (IV) does not have an overall commitment to investments which are not readily marketable that is disproportionate to the Optionholder’s net worth, and (V) the Optionholder’s investment in the Option Shares will not cause such overall commitment to become excessive.

(C)  The Optionholder understands that (I) an investment in the Option Shares is speculative in nature and involves a substantial degree of risk, including risk of losing of all or a portion of the Optionholder’s investment, (II) the return of the Optionholder’s investment, not just the return on the Optionholder’s investment, is in doubt, (III) there may be no public or other market for the Option Shares, and no assurance can be given that any such market will ever develop, (IV) there can be no assurance that the Optionholder will be able to sell or dispose of the Option Shares, and (V) no assignment, sale, transfer, exchange or other disposition of the Option Shares can be made except in accordance with the provisions of this Plan.  The Optionholder understands the risk factors related to his or her purchase of the Option Shares. 

(iii)    The Company may require a Participant, as a condition of exercising an Option or a SAR, or acquiring Bonus Shares under any Stock Award, to give written assurances satisfactory to the Company as to the Participant’s knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters, that he or she is capable of evaluating, alone or together with the purchaser representative, the merits and risks of acquiring Common Stock.

(iv)     By virtue of his or her acceptance of Bonus Shares, each such Participant automatically shall be deemed to have represented and warranted to the Company that: 

(A)   The Bonus Shares are being acquired for such Participant’s own account, for investment purposes only, not for the account of any other person and not with a view to distribution, assignment or resale to others.  Such Participant will not sell, hypothecate or otherwise transfer the Bonus Shares unless (I) the transfer is registered under the Securities Act, and registered or qualified for sale under applicable state securities laws, or (II) unless waived by the Company, the Company has received a written opinion of counsel (which opinion and counsel are satisfactory to the Company) that an exemption from the registration or qualification requirements of the Securities Act and such state laws is available.

(B)   Such Participant is familiar with and understands the current and proposed business activities of the Company.  Such Participant has been given the opportunity to obtain additional information from the Company and to discuss the current and proposed business of the Company with representatives of the Company.  The Company has made available to such Participant all documents and information that such Participant has requested relating to an investment in the Bonus Shares.  With respect to tax and other economic considerations involved in the investment, such Participant is not relying on any advice or opinions from the Company or any person acting on its behalf.  Such Participant has carefully considered and has, to the extent such Participant believes appropriate, discussed with such Participant’s legal, tax, accounting and financial advisors the suitability of an investment in the Bonus Shares for such Participant’s particular tax and financial situation and has determined that the Bonus Shares are a suitable investment. Such Participant (I) has adequate means for providing for such Participant’s current financial needs and personal contingencies; (II) has no need for liquidity in the investment; (III) can afford a complete loss of the value of the Bonus Shares; (IV) does not have an overall commitment to investments which are not readily marketable that is disproportionate to such Participant’s net 

13

worth, and (V) such Participant’s investment in the Bonus Shares will not cause such overall commitment to become excessive.

(C)   Such Participant understands that (I) an investment in the Bonus Shares is speculative in nature and involves a substantial degree of risk, including risk of losing of all or a portion of such Participant’s investment, (II) the return of such Participant’s investment, not just the return on such Participant’s investment, is in doubt, (III) there may be no public or other market for the Bonus Shares, and no assurance can be given that any such market will ever develop, (IV) there can be no assurance that such Participant will be able to sell or dispose of the Bonus Shares, and (V) no assignment, sale, transfer, exchange or other disposition of the Bonus Shares can be made except in accordance with the provisions of this Plan.  Such Participant understands the risk factors related to an investment in the Bonus Shares. 

(v)     The foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if the issuance of Option Shares upon the exercise of an Option or acquisition of Bonus Shares under a Stock Award has been registered under a currently effective registration statement under the Securities Act.  Absent such registration, each certificate evidencing Option Shares and Bonus Shares shall reflect a legend substantially to the following effect:

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR ANY STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR DISPOSED OF UNLESS THEY ARE REGISTERED UNDER THE 1933 ACT AND REGISTERED OR QUALIFIED FOR SALE UNDER APPLICABLE STATE SECURITIES LAWS OR, UNLESS WAIVED BY THE COMPANY, THE COMPANY HAS RECEIVED AN ACCEPTABLE OPINION OF COUNSEL THAT AN EXEMPTION FROM THE REGISTRATION OR QUALIFICATION REQUIREMENTS OF THE 1933 ACT AND APPLICABLE STATE SECURITIES LAWS IS AVAILABLE.

(c) Withholding Obligations.  The Participant shall satisfy any federal, state or local tax withholding obligation relating to the exercise of an Option, the acquisition of Bonus Shares, the lapse of any substantial risk of forfeiture, and/or the disposition of Common Stock acquired in connection with a Stock Award, in one or more of the following ways to be selected by the Company:  (i) tendering a cash payment; (ii) authorizing the Company to withhold shares from the shares of Common Stock otherwise issuable to the Participant as a result of the exercise or acquisition of stock under the Stock Award; or (iii) delivering to the Company owned and unencumbered shares of Common Stock.  No Option or SAR may be exercised, nor may any Bonus Shares be issued, unless the tax withholding obligations of the Company are satisfied.  

13. COVENANTS OF THE COMPANY.

(a) Availability of Shares.  During the terms of the Stock Awards, the Company shall keep available at all times the number of shares of Common Stock required to satisfy such Stock Awards.

(b) Securities Law Compliance.  The Company shall seek to obtain from each regulatory commission or agency having jurisdiction over this Plan such authority as may be required to grant Stock Awards and to issue and sell shares of Common Stock upon exercise of Options; provided, however, that this undertaking shall not require the Company to register under the Securities Act, or qualify under any state securities laws, this Plan, any Stock Award or any stock issued or issuable pursuant to any such Stock Award.  If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under this Plan, the Company shall be relieved from any liability for failure to issue Stock Bonuses and sell stock upon exercise of Options, unless and until such authority is obtained.

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14. USE OF PROCEEDS FROM STOCK.

Any proceeds from the sale of Common Stock pursuant to Stock Awards shall constitute general funds of the Company. 

15. AMENDMENT OF THIS PLAN.

(a) Amendment of Plan.  The Board at any time, and from time to time, may amend this Plan.  However, except as provided in §6(m), no amendment shall be effective unless approved by the shareholders of the Company to the extent shareholder approval is necessary to satisfy the requirements of §422 of the Code, Rule 16b-3 or any Nasdaq or securities exchange listing requirements.

(b) Shareholder Approval.  The Board may, in its sole discretion, submit any other amendment to this Plan for shareholder approval, including, but not limited to, amendments to this Plan intended to satisfy the requirements of §162(m) of the Code and the regulations thereunder regarding the exclusion of performance-based compensation from the limit on corporate deductibility of compensation paid to Officers.

(c) Contemplated Amendments.  It is expressly contemplated that the Committee may amend this Plan in any respect the Committee deems necessary or advisable to provide Eligible Recipients with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to ISOs and/or to bring this Plan and/or ISOs granted hereunder into compliance therewith.

(d) No Impairment of Rights.  Rights under any Stock Award granted before any amendment of this Plan shall not be impaired by such amendment unless (i) the Company requests the consent of the Participant, and (ii) the Participant consents in writing.

16. TERMINATION OR SUSPENSION OF PLAN.

(a) Plan Term.  The Committee may suspend or terminate this Plan at any time.  Unless sooner terminated, this Plan shall terminate on the fifth (5th) anniversary of its adoption date first set forth above.  No Stock Awards may be granted under this Plan while this Plan is suspended or after it is terminated.

(b) No Impairment of Rights.  Suspension or termination of this Plan shall not impair any rights or affect any obligations under any Stock Award outstanding as of the date of the suspension or termination.

17. MISCELLANEOUS.

(a) Acceleration of Exercisability and Vesting.  The Committee shall have the power to accelerate the time at which an Option may first be exercised or the time at which Option Shares or Bonus Shares or any part thereof will vest, notwithstanding any provisions in this Plan or in the applicable Stock Award to the contrary.

(b) Interpretation; Governing Law.  All questions concerning the construction, validity and interpretation of this Plan (i) shall be decided conclusively by the Committee, without appeal, and (ii) shall be governed by the law of the State of Idaho, without regard to such state’s conflict of laws rules.

(c) Notices.  Any notices related to a Stock Award Agreement or this Plan shall be given in writing and shall be deemed effectively given upon actual receipt or, in the case of notices delivered by the Company to a Participant, five (5) days after deposit in the United States mail, postage prepaid, addressed to the Participant at his or her last address in the Company’s records. 

15LICENSE AGREEMENT

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to a confidentiality request. Omissions are designated [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission with the confidentiality request.

Exhibit 10.15

SUBLICENSE AGREEMENT

between

1451 INTERNATIONAL, LTD.,

a California corporation

and

SECOND RENAISSANCE, LLC,

a California limited liability company

(collectively, “Sublicensor”)

and

ETERNAL IMAGE,

a Michigan limited liability company

(“Sublicensee”)

Date: July 21, 2005

07/08/05

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to a confidentiality request. Omissions are designated [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission with the confidentiality request.

SUBLICENSE AGREEMENT

(“Caskets & Urns”)

THIS SUBLICENSE AGREEMENT (the "Agreement") is entered into effective as of the 21st day of July, 2005 by and among SECOND RENAISSANCE, LLC, a California limited liability company (“SRLLC”) and 1451 INTERNATIONAL LTD., a California corporation ("1451")  (collectively, “Sublicensor”), and ETERNAL IMAGE, a Michigan limited liability company ("Sublicensee").

RECITALS

A.

Sublicensor has an exclusive worldwide license (the “License Agreement”) to manufacture and sell products constituting reproductions and adaptations of works of art (the "Properties") which are the exclusive property of the Biblioteca Apostolica Vaticana ("BAV" or the "Vatican Library").  There are other licensees that hold exclusive worldwide licenses with the Ufficio Vendita Pubblicazioni e Riproduzioni dei Musei Vaticani ("UVPR") in relation to the Vatican Library in specified product categories. Sublicensor has made Sublicensee aware of these other licensees and the scope of their licenses.

B.

The foregoing third party direct licenses are issued and administered by the UVPR of the sovereign State of Vatican City. Under no condition or circumstance can the rights of such licensees be violated. SRLLC and 1451 (Sublicensor) and Sublicensee guarantee not to infringe on any and all of the rights that are owned by other companies or licensees. Ignorance of such rights does not lessen the culpability and severity of violation of said rights. Should any of these three companies (or parties and/or affiliates) infringe on such rights, they alone and exclusively are liable. It is further guaranteed that the UVPR and BAV, the Vatican City State and the Roman Catholic Church are completely and fully excluded from any legal action that might arise from such infringement.

C.

Sublicensor has the right to sublicense the rights granted by its License Agreement, subject to written approval of UVPR. The approval of this Agreement by UVPR is conditional to the prior consultation with BAV.  

D.

The UVPR, along with its prior consultation with the BAV, retains the exclusive and sole right to refuse the granting of its approval based on serious reasons, such as that which would present the Vatican City State or the Roman Catholic Church or the UVPR or the BAV in a negative light due to a negative historical/personal background of a Sublicensee and/or his or her company. It is the exclusive and sole duty of the Sublicensor to investigate the integrity and worthiness of its prospective Sublicensee. Hence, it is the sole and exclusive responsibility of Sublicensor to ascertain that the current and prospective Sublicensees abide by said clause. 

E.

Sublicensee desires to obtain from Sublicensor and Sublicensor desires to grant to Sublicensee a sublicense to use, manufacture and sell certain products (as herein defined) incorporating, based on or derived from certain of the Properties, and to use the Logo (see Schedule 2.2.1) in connection with the sale of such products, subject to the terms and conditions hereinafter set forth.

07/08/05

1

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to a confidentiality request. Omissions are designated [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission with the confidentiality request.

AGREEMENT

NOW, THEREFORE, the parties hereto agree as follows:

1.

Definitions.  The defined terms used in this Agreement shall have the meanings set forth below.

Advertising Material shall mean any and all packaging, advertising and promotional materials in any medium whatsoever used by Sublicensee in connection with the Sublicensed Products, including without limitation written advertisements, point-of-sale displays, tags, labels, and radio and television commercials.  (See  Approval Procedures-Section 15.) 

1.1.1  The use of Internet is strictly limited specifically to advertising pictures of the Sublicensed Products. It is strictly prohibited in every circumstance and under every condition to scan onto the Internet any and all digital images from the BAV. There is no exception to this.

Affiliate shall mean any entity which directly or indirectly controls, is controlled by or is under common control with Sublicensee.  The term “control” as used herein means possession of the power to direct or cause the direction of the management and the policies of an entity, whether through the ownership of a majority of the outstanding voting securities or by contract or otherwise.

1.2.1  Affiliates means every partner that has a provable valid contract with the Sublicensor. The affiliates do not have the rights or grants in the main License Agreement. They must strictly and always abide by the limitations and conditions which bind the Sublicensor in the main License Agreement with UVPR. It is the sole and exclusive responsibility of the Sublicensor to ensure that this clause in being implemented by their Sublicensees.

Commencement Date shall mean the date first set forth above.

1.3.1 The Commencement Date shall mean the date this Agreement is approved and signed by the UVPR. Only original copies are required, one for each signing party and one for UVPR. Each page of the sublicense shall be initialized by ALL parties, including UVPR. 

Exhibit(s) shall mean temporary exhibition(s) sponsored and staged independently or in conjunction with a museum or gallery, which (i) include the display of multiple (not less than an aggregate of fifty), different Sublicensed Products of any Sublicensee or  Affiliate of Sublicensor, (ii) are generally open to the public for an admission fee, and (iii) have been pre-approved by UVPR, following consultation with BAV, when other items appearing with Sublicensed Products form part of the total exhibit

1.4.1 The admission fee must be approved by UVPR to insure that it is reasonable; this requirement is to protect the image of the Vatican and the BAV to prospective viewers of any exhibit.

Sublicensed Products shall mean those Products described on Schedule 1.5 hereto. 

Sublicensee’s Work Product shall mean that Work Product which Sublicensee owns as set forth in Section 16.4.

2

Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to a confidentiality request. Omissions are designated [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission with the confidentiality request.

Properties shall mean original artwork, manuscripts, books, sculptures, coins, images, and other three-dimensional objects that are located in and owned exclusively by the Vatican Library, including rights and property of the Vatican Library in the Salone Sistino and the Library Gallery prior to October 1, 1999.

1.7.1  Excluded are any items that are conserved in the BAV but under copyright and proprietary laws outside of BAV dominion and independent of the contracting parties hereunder, such as particular coins, books, manuscripts and other types of works of art and medals from the Medagliere that have been recently donated to the BAV and whose artists (authors, designers and sculptors) are still living.

1.7.2  The Sublicensee possesses no rights whatsoever to reproduce in any form, including adaptations, any work of art and/or manuscript and/or facsimile that does not form part of the stable patrimony of BAV and of which BAV has no exclusive copyright.

1.8  Receipts shall mean the gross amount actually billed by Sublicensee or its Affiliates on sales of Sublicensed Products, less any returns, taxes and/or freight, shipping and insurance charges, and other allowances approved by Sublicensor, but only to the extent that such returns, taxes and/or charges, and allowances are actually paid or credited by Sublicensee or its Affiliates with respect to any customer accounts. Sales of Sublicensed Products to any Affiliate which is a reseller thereof shall be excluded until the subsequent sale by such Affiliate.

1.9  Retail Store shall mean any and all retail outlets operated by the [*****] sublicensee(s) of Sublicensor for retail stores under the trade name “Vatican Library Collection” (or other name specifically approved in writing by Sublicensor and UVPR) for point of purchase sale by such sublicensee(s) of the Sublicensed Products authorized by their respective sublicense agreement(s), including without limitation physical fixed locations (whether owned or rented), kiosks (fixed or movable), catalogue sales of Sublicensed Products sold at fixed location Retail Stores, limited internet sites pre-approved by UVPR, following consultation with BAV, for sale of Sublicensed Products sold at fixed location Retail Stores (or other technological means of distribution and sale of Sublicensed Products sold at fixed location Retail Stores, whether now existing or created in the future), temporary sites for events, and space within stores, malls or the like.  

1.10  Royalties shall mean the percentage compensation on Receipts and Sublicense income, if any, to be paid by Sublicensee to Sublicensor pursuant to Section 6.2 hereof.

1.11  Specifications shall mean the technical, functional and design specifications for a Sublicensed Product agreed upon by Sublicensee and approved by both Sublicensor and UVPR pursuant to Section 15.2.

1.12  Territory shall mean the specified geographic area covered by the Sublicensee’s rights pre-approved by UVPR, as described on Schedule 1.12 hereto.

2.

Grant of Sublicense.

2.1  Sublicense.  Sublicensor hereby grants to Sublicensee, under the terms and conditions set forth in this Agreement, the exclusive and/or nonexclusive (as specified in 

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Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to a confidentiality request. Omissions are designated [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission with the confidentiality request.

Schedule 1.12) right and sublicense to manufacture, sell, distribute and advertise the sale of Sublicensed Products in the Territory.

2.1.1 Notwithstanding the foregoing grant of rights, Sublicensor has informed Sublicensee and Sublicensee hereby acknowledges that the Sublicensor has certain obligations to third parties with respect to the sale and distribution of Sublicensed Products through the channels identified in this subsection 2.1.1. Accordingly, Sublicensee shall not be authorized to, and Sublicensee agrees that it shall not, (i)  sell Sublicensed Products through fundraising programs organized or operated by Sublicensee, (ii) stage, sponsor or hold “Exhibits” as defined in Section 1.4 to promote or market Sublicensed Products, (iii)  market and sell Sublicensed Products through Retail Stores operated under the name and logo of The Vatican Library Collection or otherwise promoted or advertised as “  officially licensed” Vatican Library stores, (iv)  market and sell Sublicensed Products through Internet sites or catalogue sales programs operated under the name and logo of The Vatican Library Collection or otherwise promoted or advertised as the “ officially licensed” Vatican Library Collection of products pre-approved by UVPR Internet site or catalogue sales program provided, however, that the display of Sublicensed Products on the Sublicensee’s website shall not be prohibited by, and shall not constitute any breach or violation of this clause (iv), (v) market and sell Sublicensed Products on television home shopping channels, except in conjunction with, and through sales at the Sublicensee’s  most favorable wholesale prices for similar quantities to Sublicensor’s exclusive “officially licensed” Vatican Library Collection home shopping channel sublicense, or (vi) market and sell to stores located in Vatican City and/or its extra-territorial domains.

Notwithstanding the foregoing grant of rights, Sublicensor reserves the right to manufacture and sell, or to sublicense third parties to manufacture and sell, products similar to the Sublicensed Products, but solely for sale as limited editions or collectibles contingent upon UVPR approval.

Sublicensee may not sell Sublicensed Products to any wholesaler or retailer or any other entity when Sublicensee knows or has reason to believe that the Sublicensed Products will be sold by street vendors and/or other non-conventional manners of distribution.

Sublicensee shall also not manufacture, sell or distribute the Sublicensed Products to any party or entity who changes, alters or adds to the Sublicensed Products in any manner whatsoever and then resells or distributes the Sublicensed Products to retailers, wholesalers, vendors or the general public, unless approved in advanced in writing by Sublicensor contingent upon UVPR approval.

2.2  Logo Sublicense.  Sublicensor hereby grants to Sublicensee a [*****] sublicense to use the Logo and logotype “The Vatican Library Collection” on or in association with the Sublicensed Products in the Territory and on all Advertising Material associated therewith.  Sublicensed Products shall be sold, distributed and advertised with appropriate labels, hang tags, trademark notices and other attributes and identification which identify them with Sublicensor.

2.2.1 The logo and logotype is the one specifically approved by UVPR and indicated on Schedule 2.2.1 

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Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to a confidentiality request. Omissions are designated [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission with the confidentiality request.

2.2.2 Sublicensee shall be authorized to utilize the name and approved logo “The Vatican Library Collection” in order to represent to the public that Products manufactured and sold by Sublicensee hereunder pursuant to the rights granted herein are officially sanctioned by The Vatican Library.  Hangtags/labels utilized for Sublicensed Products shall read “The Vatican Library Collection” and bear the Logo. Sublicensor shall provide specific graphic artwork for labels, hangtags or advertising materials in which “The Vatican Library Collection” name and/or logo is used.  All packaging, “text” labeling or advertising using the same requires the prior written approval of Sublicensor, who must already have prior written approval from UVPR.  A copy of the logo and graphic standard for The Vatican Library Collection is attached as Schedule 2.2.1.

2.3  No Combination.  No material from any Properties or the Logo shall be combined in any Sublicensed Product with any characters, images, products or trademarks of any other party without Sublicensor’s prior written approval contingent upon UVPR approval, except for Sublicensee’s trademark and design, and line and price listings.

2.4  No Sublicense.  Sublicensee shall not have any right to sublicense or transfer in any way the rights granted to it by Sublicensor under this Agreement.

2.5  Reservation of Rights.  Sublicensee has no right in and to the Properties and Logo which fall outside the provisions specifically stated in this Agreement.

3.

Cooperation.  Each of the parties acknowledges that the development of the Sublicensed Products will be a cooperative process requiring the contributions and special expertise, documents and personnel of each party as provided in this Agreement. Each party will appoint a project coordinator to facilitate the tasks to be performed by such party under this Agreement.

4.

Representations and Warranties.

4.1  Sublicensor Representations and Warranties.  Sublicensor hereby represents and warrants, both as of the Commencement Date and continuing thereafter until the termination date of the Agreement, that it has the right and power to grant the sublicense granted herein, there are no other agreements with any other party in conflict therewith and Sublicensor has no actual knowledge that the Properties or the Logo infringe any copyright or trademark of any third party.

4.2  Sublicensee Representations, Warranties and Covenants.  Sublicensee hereby represents, warrants and covenants as follows, both as of the Commencement Date and continuing thereafter:

4.2.1 Sublicensee is experienced and knowledgeable in the manufacture, sale and distribution of products similar to the Sublicensed Products and has adequate resources and experience to fulfill its obligations set forth herein.

4.2.2 Sublicensee agrees not to directly or indirectly produce or manufacture or permit the production or manufacture of Sublicensed Products with the use of prison, child or forced labor.

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Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to a confidentiality request. Omissions are designated [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission with the confidentiality request.

4.2.3 Sublicensee has the right and power to perform the obligations set forth herein, and there are no other agreements with any other party in conflict herewith and for the duration of this Agreement.

4.2.4 No injurious, deleterious or toxic substances shall be used in any Sublicensed Products, and the Sublicensed Products will be manufactured, advertised and sold in compliance with all applicable laws and regulations. It is the exclusive and sole responsibility of the Sublicensor and the Sublicensee to ascertain the current laws regarding these issues in the country in which the Sublicensed Products are being produced

4.2.5 Sublicensee shall use all reasonable efforts to develop and manufacture the Sublicensed Products so that they will not cause harm when used as instructed and with ordinary care for their intended purpose. Consequently, the Sublicensor and the Sublicensee are the ones solely and exclusively liable to the possible harm that the manufacturing of products might produce.

4.2.6 All services provided by Sublicensee hereunder will be performed in a skillful, competent and workmanlike manner in accordance with first-class industry standards.  Sublicensee warrants that the Sublicensed Products will be of high quality in design, material and workmanship and suitable for their intended purpose.

 4.2.7 The Sublicensor and Sublicensee are the ones solely and exclusively liable for the violation of any such laws and regulations, and will guarantee that the Sublicensed Products will be manufactured, distributed and sold in strict compliance with all applicable laws and regulations.   

5.

Term. This Agreement and the sublicense granted herein shall commence on the Commencement Date and shall continue for a term of approximately three (3) years ending June 30, 2008, unless earlier terminated as provided herein. Sublicensee shall have the right and option to extend the term for an additional five (5) years by written notice delivered to Sublicensor no less than ninety (90) days prior to expiration of the original term, during the continuance of Sublicensor’s License Agreement, as the same may be extended or renewed. (See Schedule 5 hereto.)

6.

Compensation.

6.1  Advance Sublicense Fee.  [*****]

If Sublicensor has not received the Advance Sublicense Fee due on the execution of this Agreement, Sublicensor shall have the right to terminate this Agreement, with immediate effect, by providing Sublicensee with written notice of termination. 

6.1.2 It is the exclusive responsibility of the Sublicensor to immediately inform UVPR of the termination of this Agreement.

6.2  Royalties.  Sublicensee agrees to pay to Sublicensor during the term of this Agreement the following Royalties: 

6.2.1  [*****]

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Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to a confidentiality request. Omissions are designated [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission with the confidentiality request.

6.2.2  A “sale” shall be deemed to have occurred and a Sublicensed Product shall be considered “sold” by Sublicensee when such Sublicensed Product is paid for. Sublicensee shall make commercially reasonable efforts to collect monies due on its sales of Sublicensed Products.

7.

Minimum Royalty.  Sublicensee agrees to pay to Sublicensor a minimum annual Royalty during each year of the term of this Agreement in accordance with Schedule 7 attached hereto and incorporated herein by reference.

7.1  Payment of Minimum Royalties.  In the event the actual Royalty amounts owed to Sublicensor by Sublicensee for any year or period pursuant to Section 6.2 are less than the minimum annual Royalty as specified in this section, Sublicensee shall pay the difference to Sublicensor within fifteen (15) days following the end of the applicable year or period. 

7.2  Termination Right.  In the event the actual Royalties payable by Sublicensee pursuant to Section 6.2 for any year are less than the minimum Royalty amounts set forth in Schedule 7, Sublicensor shall have the right, at its option and in its sole discretion, to terminate this Agreement within sixty (60) days following the end of such year, effective as of the date of such notice.  In the event of such termination, Sublicensee shall be released from its obligation for future minimum annual Royalties but shall remain responsible for the shortfall for the prior year.  If Sublicensee does not sell the minimum sales units for each Product category listed on Schedule 1.5 Sublicensor shall have the right, at its option and in its sole discretion, to terminate this Agreement or delete that Product from this Agreement upon sixty (60) days written notice by Sublicensor to Sublicensee but said deletion shall not serve to lower the total minimum Royalty payable by Sublicensee. However, should the terms of this Agreement be changed, such change must be approved by UVPR pursuant to Section 19.1.

7.1.1  If separate categories of Sublicensed Products with separate minimum annual royalty amounts and a separate Advance Sublicense Fee are covered by this Agreement, each such separate category of Sublicensed Products will be accounted for independently.  No royalties shall be paid to Sublicensor under Section 6.2 with respect to sales and licensing of a Sublicensed Product (or separate category thereof) during the initial year of the term hereof until the full amount of the Advance Sublicense Fee attributable to that Sublicensed Product (or separate category) has been fully recouped by Sublicensee.  

7.1.2  It is the exclusive and sole responsibility of the Sublicensor to immediately inform UVPR of the termination of this Agreement.

7.3  Payment.  Sublicensee shall pay to Sublicensor all Royalties owing under Section 6.2 for each calendar quarter no later than fifteen (15) days following the last day of such quarter.  All Royalties and other amounts payable to Sublicensor in accordance with the provisions of this Agreement are payable in United States dollars by check made payable to Sublicensor and delivered to the address set forth in Section 22.11 or at such other office or by such other method as Sublicensor may from time to time designate in writing.  A duplicate copy of the payments due to Sublicensor shall be sent by Sublicensor to UVPR. Each Royalty declaration must follow the requirements of Section 5.2 of the main License Agreement, a copy of which declaration and payment must also be sent to UVPR by Sublicensor.

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Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to a confidentiality request. Omissions are designated [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission with the confidentiality request.

7.3.1 Late Payments.  Late payments shall be subject to a late payment charge equal to 1% per month from the date such payments were originally due until paid in full. A copy of documentation relative to such late payment received by Sublicensor shall be sent to UVPR by Sublicensor.

7.4  Taxes and Deductions.  If any country imposes a withholding tax against Sublicensor with respect to the Royalties payable to Sublicensor by Sublicensee on sales of the Sublicensed Products in such country, and Sublicensee pays such tax on behalf of Sublicensor, Sublicensee may deduct the amount of such withholding tax from the Royalties owing to Sublicensor hereunder on the condition that (i) such tax is an income tax as to which a foreign tax credit is allowable to Sublicensor under the current Internal Revenue Code, and (ii) Sublicensee furnishes to Sublicensor such information as Sublicensor requires to evidence Sublicensor’s right to credit such withholding tax against its United States federal income tax liability.

7.5  Royalty Statements.  Sublicensee shall furnish to Sublicensor, at the same time it makes payment of Royalties, a full and complete statement, duly certified by the Chief Financial Officer of Sublicensee to be true and accurate, showing in reasonable detail the basis upon which such Royalties were calculated, including without limitation (i) the number of each type of Sublicensed Product sold during the calendar quarter in question, (ii) the total gross sales revenues for each such type of Sublicensed Product, (iii) an itemization of all allowable deductions, if any, (iv) the sales price for each Sublicensed Product, (v) the amount of Royalties due with respect to such sales, and (vi) such other pertinent information as Sublicensor may reasonably request from time to time. 

7.5.1  Sublicensor has the exclusive and singular obligation to inform UVPR every calendar quarter of the income generated from such Royalties. A projected late report should be accompanied by a thorough explanation by Sublicensor as to the reason for its tardiness.

7.5.2  Sublicensor has the responsibility of informing UVPR of any material controversy between Sublicensor and Sublicensee in accordance with the provisions of Section 21.

8.

Retention of Records.  During the term of this Agreement and for a period of five (5) years thereafter, Sublicensee shall keep complete and accurate records of:

The number and type of Sublicensed Products produced pursuant to this Agreement;

The gross sales recorded;

The taxes, duties, shipping costs, insurance costs and approved allowances incurred in connection with said sales; and

The net returns.

9.

Audit Right.  Sublicensor, by its duly authorized agents and representatives, shall have the right to audit such books, documents and other material from time to time and shall have access thereto during ordinary business hours, and shall be at liberty to make copies of such books, documents and other material.  Sublicensor shall maintain the confidentiality of all information obtained by Sublicensor as a result of auditing Sublicensee and shall not reveal any such information to any third 

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Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to a confidentiality request. Omissions are designated [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission with the confidentiality request.

party except in connection with legal action or such other proceeding implemented by Sublicensor to enforce any of Sublicensor’s rights under this Agreement.  Sublicensor shall conduct no more than one audit in any calendar year.

10.

Underpaid Royalties.  If any audit of Sublicensee’s books and records reveals that Sublicensee has failed to account for and pay Royalties owing to Sublicensor, and the amount of any Royalties which Sublicensee has failed properly to account for and pay for any annual accounting period exceeds, by three percent (3%) or more, the Royalties actually accounted for and paid to Sublicensor for such period, Sublicensee shall, in addition to paying Sublicensor such past due Royalties, reimburse Sublicensor for its direct out-of-pocket expenses incurred in conducting such audit, together with interest on the overdue Royalties, such interest to be at a monthly rate of 1.5 percent from the date past due royalties were due until the date royalties are paid in full in accordance with Section 7.3.1.

11.

Indemnification.

11.1  Right to Indemnification.  Sublicensee hereby agrees to indemnify and hold harmless Sublicensor, UVPR and BAV, the Vatican City State and the Roman Catholic Church and their respective subsidiaries, affiliates, successors and assigns, and the officers, directors, employees and agents of each of the foregoing (collectively, the “Indemnified Parties”) from and against any and all claims, demands, losses, costs, liabilities and expenses, including reasonable attorneys’ fees and costs, arising out of or related to the design, manufacture, distribution and sale of Sublicensed Products by Sublicensee pursuant to this Agreement.

11.2  Reimbursement Upon Demand. Sublicensee shall immediately reimburse an Indemnified Party upon demand for all damages, losses, liabilities, awards, costs and expenses, including reasonable attorneys’ fees and costs, incurred by the Indemnified Party to investigate, defend and/or settle any and all claims or suits or proceedings for which Sublicensee has an obligation to indemnify and hold harmless such Indemnified Party, provided such Indemnified Party gives prompt notice to Sublicensee of any such claim or suit or proceeding.

11.3  Claims Procedures.  With respect to any claims falling within the scope of the foregoing indemnifications:  (a) the indemnified party (the “Indemnitee”) agrees promptly to notify Sublicensee of and keep Sublicensee fully advised with respect to such claims and the progress of any suits in which Sublicensee is not participating; (b) Sublicensee shall have the right to assume, at its sole expense, the defense of a claim or suit made or filed against Indemnitee and for which it is claiming indemnification; (c) Sublicensee shall have the right to participate, at its expense, in any suit instituted against it; (d) Sublicensee shall have the right to approve any attorneys selected by Indemnitee to defend it; and (e) Indemnitee shall not settle any claim or suit without the prior written approval of Sublicensee.

12.

Commercialization Efforts.

12.1  Manufacture and Sale of Sublicensed Products.  Sublicensee agrees to make necessary arrangements so that the manufacture, packaging and introduction into distribution channels of each Sublicensed Product will occur promptly after Sublicensee and Sublicensor have approved the final production version of each Sublicensed Product contingent upon approval of each product by UVPR.  Sublicensee agrees to manufacture the Sublicensed Products in sufficient 

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Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to a confidentiality request. Omissions are designated [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission with the confidentiality request.

quantities to meet the reasonably anticipated demand for such Sublicensed Products.  Sublicensee also agrees to exercise reasonable efforts to advertise and promote the Sublicensed Products at its own expense and to use its best efforts to sell the Sublicensed Products in the Territory.  In order to assist Sublicensor in reviewing Sublicensee’s marketing activities, Sublicensee agrees to furnish Sublicensor upon request complete information evidencing, on a country-by-country basis, Sublicensee’s efforts to market the Sublicensed Products in such countries.

12.2  Business Development Plans.  Sublicensee shall, at least annually, provide Sublicensor with a brief written tentative business plan indicating the countries in which Sublicensee proposes to manufacture and sell Sublicensed Products during the following twelve (12) month period. Sublicensee agrees that, upon request, it will meet with Sublicensor on a biannual or more frequent basis to review promotional activities, production and sales during the year.

12.3  Notification Requirements.  Notwithstanding anything to the contrary contained in this Agreement, Sublicensee acknowledges and agrees that (i) Sublicensee shall give Sublicensor reasonable written notice prior to Sublicensees’ initial sale or other exploitation of a Sublicensed Product in each country outside the United States, (ii) Sublicensee shall not, unless Sublicensor, who must already have prior written approval from UVPR, otherwise consents in writing, sell or otherwise exploit a Sublicensed Product in any such country until Sublicensor have had an opportunity, at its election, to file an application for registration of the Trademarks in any such countries, and (iii) Sublicensee shall not, unless Sublicensor otherwise consents in writing, sell or otherwise exploit a Sublicensed Product in any country outside the United States and the British Commonwealth (including Canada) in which Sublicensor has notified Sublicensee that there exists litigation, or an unresolved dispute, with respect to registration of the Trademarks. 

The Sublicensor has the exclusive and singular obligation to inform UVPR every six months of such the activities.  

It is hereby guaranteed that the UVPR, the BAV, the Vatican City State, and the Roman Catholic Church are completely and fully excluded from any legal action that arises from such infringements unless caused directly by the aforementioned parties.

12.4

  Restrictions on Sales of Sublicensed Products.

12.4.1 The Sublicensed Products shall be sold to the public through normal retail outlets only in the manner in which articles of the same general description are generally merchandised to the public.  Sublicensee shall not use or sell the Sublicensed Products as premiums, or distribute the Sublicensed Products to parties which the Sublicensee has reason to believe intend to use or sell the Sublicensed Products as premiums, except with Sublicensor’s prior written consent.  Use or sale of the Sublicensed Products as “premiums” for purposes of the foregoing provisions shall mean the use or sale of the Sublicensed Products in connection with promotional programs designed to promote the sale of the Sublicensed Products or other goods or services of the Sublicensee or a third party, including without limitation joint merchandising programs, give-aways, sales incentive programs and traffic builders.

12.4.2 Nothing herein shall prevent Sublicensee from doing any of the foregoing when done exclusively for the purpose of promoting the sale of the Sublicensed Products or from offering the Sublicensed Products bundled with third parties’ goods or services, subject to the prior 

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Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to a confidentiality request. Omissions are designated [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission with the confidentiality request.

written approval of Sublicensor (such approval not to be unreasonably withheld or delayed) and subject always to the payment of Royalties pursuant to the provisions of Section 6  as if the Sublicensed Products had been sold at Sublicensee’s normal wholesale prices.

13.

Direct Purchase Right.  Sublicensor shall have the right to purchase Sublicensed Products from Sublicensee (for distribution and sale directly or indirectly by Sublicensor) at pricing equal to the best pricing and terms offered by Sublicensee to third parties, provided, however, that Sublicensor shall not distribute and sell such products, directly or indirectly, in a manner that could reasonably be expected to be disruptive to the marketing of the Sublicensed Products then being actively conducted by Sublicensee. Such purchases by Sublicensor shall be subject to payment of the Royalty provided for in Section 6 hereof. No more than 5% of each production run per product may be purchased by Sublicensor or Affiliates under this clause. 

  Sublicensor has the exclusive and singular obligation to inform the UVPR every six months of such activities.

14.

Free Copies.  In addition to the random production samples of the Sublicensed Product to be supplied by Sublicensee to Sublicensor free of charge under Section 15.5, Sublicensee shall, upon official publication of a Sublicensed Product hereunder, deliver ten (10) free copies of such Sublicensed Product to Sublicensor and two (2) free copies of such Sublicensed Product to UVPR. 

15.

Approval Procedures.

15.1  General.  Sublicensee shall comply with all reasonable procedures which Sublicensor may from time to time adopt regarding its approval of Advertising Material and of Sublicensed Products which Sublicensee proposes to manufacture and sell under this Agreement.  These approval procedures shall be implemented using prescribed forms to be supplied to Sublicensee by Sublicensor and shall incorporate the basic approval requirements and steps outlined in the following sections.  Sublicensee agrees to retain all materials relating to approvals in its files while this Agreement remains in effect and for one year thereafter.  Sublicensor’s approval rights shall be exercised in accordance with this Section 15.  Materials for review shall be sent to Sublicensor at the address set forth in Section 22.11 or such other address as Sublicensor may designate from time to time.

For the purposes of this approval clause, all final approvals for proposed Sublicensed Products are subject to prior approval by UVPR through Sublicensor. “Product” shall be deemed to include, but is not limited to the following: product, design, use of celebrities, promotions, and the format and content of press releases, press kits and advertising materials. Sublicensee further agrees that the content of any interviews or articles for publication in any media shall be limited to information relating to Sublicensee's products and marketing programs and the non-economic terms of this Agreement.  

15.2  Approval of Sublicensed Products.  Sublicensee shall comply with the following steps for each Sublicensed Product as requested by Sublicensor from time to time as may be necessary for a Sublicensed Product, obtaining Sublicensor’s written approval, for the step of the procedure requested. Sublicensor must already have prior written approval from UVPR.  Unless by prior written notice from Sublicensor, following written approval of UVPR, it is exempted from such step with respect to a specific Sublicensed Product, for each different Sublicensed Product, 

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Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to a confidentiality request. Omissions are designated [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission with the confidentiality request.

Sublicensee shall submit to Sublicensor for its prior review and approval the following materials as requested by Sublicensor:

(i)

the Vatican Library’s shelf number identifying the name of the collection, the number of the manuscript or item and the exact folio or page number, and the Vatican Library copyright information;

(ii)

a concept for the proposed Sublicensed Product, demonstrating by rough artwork, written description and product design the appearance and operation, including sound and interactive capabilities, if any,  of the proposed Sublicensed Product;

(iii)

finished artwork, text and/or audio for the Sublicensed Product, including the exact use of the Trademarks on or in connection with the Sublicensed Product;

(iv)

a reproduction master of the Sublicensed Product showing the exact form, quality, number and operational capabilities the Sublicensed Product will have when manufactured in production quantities;

(v)

three (3) identical production samples of each Sublicensed Product, to be submitted immediately to Sublicensor upon commencement of production; and

(vi)

any other materials Sublicensor deems necessary to review and approve proposed Sublicensed Products.

             15.2.1 Acknowledgement.  Sublicensor has advised Sublicensee and Sublicensee acknowledges that final product approval rests with Ufficio Vendita Pubblicazioni e Riproduzioni dei Musei Vaticani of the sovereign state of Vatican City (“UVPR”).  Sublicensee acknowledges the following approval clause contained in Sublicensor’s main License Agreement with UVPR:

Each Product must be approved in writing by [UVPR] before its sale, distribution or commercial presentation, which approval shall not be unreasonably withheld.  [UVPR] shall consult the Prefect of the Vatican Library before granting such approval.  All artistic and business decisions shall be made by Sublicensee, provided, however, that [UVPR] shall be accorded the right to review in advance of publication the content of each of the Products to insure its historical accuracy to determine whether in the exercise of its reasonable judgment the Project could subject the Vatican and/or the Catholic Church to criticism, embarrassment or obloquy.  Accordingly, each Product must be specifically approved by [UVPR].  [UVPR] shall have thirty (30) days from execution of this Agreement to review and approve any items scheduled for production in accordance with this Paragraph.  If [UVPR] disapproves of the content of a particular Product, it shall notify the Sublicensee of its reasons so that the Sublicensee may, if possible, make the necessary and appropriate changes.  If there has been no written notice of disapproval within thirty (30) calendar days of submission of such material by 

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Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to a confidentiality request. Omissions are designated [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission with the confidentiality request.

Sublicensee and unless there has been a written request for extensions for reasonable cause made within said thirty (30) calendar days, the submission shall be deemed approved.

15.3  Approval of Advertising Material.  With respect to each different item of Advertising Material which Sublicensee (or any party acting on its behalf) proposes to produce and use under this Agreement, Sublicensee shall submit to Sublicensor such of the following materials as may be requested by Sublicensor from time to time and as necessary with respect to the particular Advertising Material, for the prior review and approval of Sublicensor and UVPR: 

(i)

proposed written copy and text for the item of Advertising Material, with attached rough art showing how the Logos will be used in connection with the copy;

(ii)

final copy for the item, with finished “lift” art, showing the use of the Logo;

(iii)

finished “mechanicals” for the item; and 

(iv)

a final printed sample of the item where feasible (as, for example, in the case of labels, hangtags, printed brochures, catalogs and the like).

Sublicensee shall comply with all of the foregoing approval steps for each item of Advertising Material, obtaining Sublicensor’s and UVPR's written approval at each step of the procedure, unless by prior written notice from Sublicensor and following written approval by UVPR, it is exempted from any such step with respect to a specific item of Advertising Material.  All Advertising Material shall include the copyright information (© Biblioteca Apostolica Vaticana).  Any Advertising Material that fails to include the copyright information shall not be approved.  Further, in connection with each submission under this Section 15.3, Sublicensee shall describe the proposed uses of the Advertising Material (including the media to be used) and the duration of such proposed uses.  In such cases, Sublicensor’s and UVPR's approval of the Advertising Material shall extend only to those proposed uses, duration of use, etc., described in Sublicensee’s submissions.

Sublicensee shall obtain Sublicensor’s written approval before using any celebrity or other spokesperson for the Sublicensed Product. Sublicensor must already have prior written approval from UVPR.

Sublicensee shall not (i) issue any press releases, without the express prior written authorization for the format and content from Sublicensor, who shall already have prior written approval from UVPR, or (ii) discuss matters other than the development of the Sublicensed Products and related marketing programs in any interviews with the press or other media concerning this Agreement or any related subject matter.

15.4  Time for Approval by Sublicensor. Sublicensor agrees to use reasonable efforts to notify Sublicensee in writing of the approval or disapproval by Sublicensor and UVPR of any materials submitted to Sublicensor under Section 15.2 and Section 15.3, within thirty (30) business days after Sublicensor's receipt of such materials. Sublicensor will endeavor to notify Sublicensee as soon as practicable of any changes to the content and context of the proposed materials.  Sublicensee will exercise its best efforts to provide materials to Sublicensor early in the production process so as 

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Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to a confidentiality request. Omissions are designated [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission with the confidentiality request.

to allow as much time as possible for approval by UVPR. Sublicensor may need an additional thirty (30) business days for approvals on new images in order to secure the required approval from UVPR. Sublicensor’s approval shall not be unreasonably withheld or delayed.

15.5  Maintenance of Quality; Inspection of Production Facilities.  Sublicensee agrees to maintain the quality of each Sublicensed Product up to the specifications, quality and finish of the production sample of such Sublicensed Product approved by Sublicensor and UVPR under Section 15.2.  Sublicensee agrees not to change the Sublicensed Product in any respect that would materially alter either its looks or its quality, or to make any change in the artwork for the Sublicensed Product, without first submitting to Sublicensor samples showing such proposed changes and obtaining Sublicensor’s written approval of such samples in accordance with Section 15.2. Sublicensor must already have prior written approval from UVPR. From time to time after it has commenced manufacturing any Sublicensed Product, Sublicensee, upon Sublicensor’s request, shall furnish free of charge to Sublicensor a reasonable number of samples not to exceed four (4) from any production run of any Sublicensed Product specified by Sublicensor. Sublicensor shall have the right to withdraw its approval of any Sublicensed Product if the quality of such Sublicensed Product ceases to be acceptable to Sublicensor.

15.6  Unapproved Sublicensed Products or Advertising Materials.  Sublicensee shall not have the right to manufacture, offer for sale, distribute or sell any Sublicensed Product or use any item of Advertising Material unless Sublicensee has complied with all of the approval procedures and requirements set forth in this Section 15 and has obtained Sublicensor’s and UVPR's prior written approval of such Sublicensed Product or item of Advertising Material.  Failure by the Sublicensee to comply with the provisions of this Section 15 shall constitute a material breach of this Agreement and shall be grounds for termination of this Agreement by Sublicensor, as provided in Section 20.1 hereof.

15.7  Access to Vatican Library.  Pursuant to its main License and BAV terms and conditions, Sublicensor has the right of a limited access to the collection of the Vatican Library and of the Salone Sistino and the Library Gallery on a prescribed basis by each of these entities for purposes of obtaining/creating designs for Sublicensed Products.  The Sublicensee must contact directly and in writing the Prefect of the BAV and follow the prescribed procedure to have access to the BAV. This must be done on reasonable notice (two business weeks’ prior written notice shall constitute reasonable notice) and upon terms and conditions specified by the BAV.  Original artwork may not be used in molds or removed from the premises.  All work using the originals must be performed on the premises (e.g., copied by film, video, artist sketches) and under the supervision of the BAV.  All costs incurred in obtaining artwork, photographs, transparencies or otherwise in utilizing BAV staff shall be the responsibility of Sublicensee, and all time schedules and arrangements for access by Sublicensee to original art works shall be approved in writing by BAV. Furthermore, in accordance with the main License, transparencies must be returned to BAV within ninety (90) days as stated in the BAV protocol regarding this activity. 

Images granted for reproduction from BAV may not be reproduced in any way, shape, or form and for any means and/or purposes other than the ones declared and approved by the UVPR and the BAV. It is prohibited to concede such items to third parties. It is the sole and exclusive responsibility of the Sublicensor to ensure that this clause is being strictly implemented by their Sublicensees. 

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Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to a confidentiality request. Omissions are designated [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission with the confidentiality request.

Transparencies and any other images of the Properties are obtained only from BAV following its terms and conditions.

15.8  Translations. All translations of written material used on or in connection with the Sublicensed Products or Advertising Material shall be accurate, and Sublicensee, when submitting the Sublicensed Products and the Advertising Material for approval, shall provide Sublicensor with accurate English translations of all such written materials.

15.9  Use of Properties.  None of the Properties or Logo shall be shown on or in any product or item of advertising, promotional or other material used by, endorsing or identifying Sublicensee or the products (including the Sublicensed Products) or services of Sublicensee without Sublicensor’s prior written approval. Sublicensor must already have prior written approval from UVPR.  Neither the Properties nor the Logo shall be combined in any Sublicensed Products or Advertising Material with any other characters, images, products or logos of any other party without Sublicensor’s and UVPR’s prior written approval.

15.10  Transactions with Other Sublicensees.  Sublicensee shall not, without Sublicensor’s prior written consent contingent upon UVPR prior written approval, (i) sell or deliver to another Sublicensee the artwork, films, molds or other devices used by Sublicensee to produce the Sublicensed Products or to create Advertising Material or (ii) print or otherwise produce any items using the  Logo for another Sublicensee.

16.

Copyright Provisions.

16.1  Rights in Copyrights.  Sublicensee shall not at any time during the term hereof or thereafter dispute or contest, directly or indirectly, Sublicensor’s and UVPR’s right and title to the Properties.  Sublicensee shall not acquire any rights in any copyrights or other rights in the Properties, except for the Sublicense granted herein.

16.2  Copyright Notices.  Sublicensee agrees to place on all Sublicensed Products and on all Advertising Material the copyright notice or notices in the name of Sublicensor specified below or as otherwise specified in writing by Sublicensor from time to time.  All Sublicensed Products shall contain the following notice of copyright:  ãBiblioteca Apostolica Vaticana.  Nothing herein contained shall prohibit Sublicensee from using its own trademark(s) on the Sublicensed Products and its own copyright notice on the Sublicensed Products where said Sublicensed Products contain independent material which is the property of Sublicensee.

16.3 Affixation of Notices; Name of Copyright Proprietor. Sublicensee acknowledges that proper copyright notices must be permanently affixed to all Sublicensed Products and Advertising Material and to any separate portions of Sublicensed Products or Advertising Material which contain the Properties or any portion thereof and which are intended to be used separately by the purchaser or ultimate user.  Sublicensee agrees that it will not, without Sublicensor’s prior written consent, affix to the Sublicensed Products or the Advertising Material a copyright notice in its name or the name of any person, firm or corporation other than Sublicensor.

16.4  Ownership and Assignment.  In accordance with the main License Agreement between UVPR and Sublicensor and the rights granted therein, Sublicensor shall own all right, title and interest, including all copyrights and copyright renewals and extensions, with respect to any 

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Sublicensed Product or any portion or component thereof using or incorporating the Properties, except as to such portion or component thereof as is a “derivative work” or “new work” (the “Sublicensee’s Work Product”). 

16.5  Cooperation.  Each party agrees to take such actions and to execute, acknowledge and deliver to the other party such assignments, documents, instruments and agreements as either party shall request to effect or evidence the parties’ respective ownership rights described herein.

17.

Insurance.  Sublicensee shall obtain and maintain, at its sole cost and expense, a comprehensive general liability insurance policy from a recognized insurance company with coverage limits of not less than $1,000,000 per occurrence for bodily injury and property damage and products liability.  Such insurance shall be in the form and with insurers acceptable to Sublicensor and UVPR and shall include coverage for all premises and operations, broad form property damage, product liability and contractual liability (including obligations assumed under this Agreement).  The policies shall name each of Sublicensor, UVPR, BAV, the Vatican City State and the Roman Catholic Church as additional insureds.  Sublicensee shall furnish Sublicensor with evidence of the required insurance coverage within ten (10) days following execution hereof and shall thereafter provide Sublicensor with written notice of any change, replacement or termination of such insurance. In its turn Sublicensor must provide this information to UVPR within 10 days of receipt of insurance certificate. 

Such insurance shall include coverage of Sublicensor, UVPR, BAV, the Holy See and their respective directors, officers, agents, employees, assignees and successors.  Within thirty (30) days after execution of this Agreement by Sublicensor, Sublicensee shall cause the insurance company or companies issuing such policies to issue certificates to Sublicensor confirming that such policies have been issued and are in full force and effect and provide coverage of Sublicensor as required by this Section 17, and also confirming that before any cancellation, modification or reduction in coverage of any such policy, the insurance company shall give Sublicensor thirty (30) days prior written notice of such proposed cancellation, modification or reduction.  Any insurance carried by Sublicensor or the other named insureds shall be deemed excess insurance not subject to contribution.

18.

Compliance with Laws.  Sublicensee shall, at Sublicensee’s expense, obtain all necessary governmental approvals, permits and sublicenses and comply with all laws, rules and regulations applicable to the manufacture, production, distribution, export, import, sale and use of all Sublicensed Products, including without limitation any safety studies.  Sublicensee shall have sole responsibility for any warning labels, packaging and instructions as to the use of the Sublicensed Products or any components or properties thereof.

19.

Sublicensor Approvals.  Except as otherwise expressly stated, any approval or consent of Sublicensor provided for herein may be given or withheld by Sublicensor in its sole discretion for any reason or no reason, subject to obtaining such consent or approval of UVPR/BAV as may be required hereunder. Except as otherwise expressly provided in the main License Agreement or in Section 19.1 below or elsewhere in this Sublicense, UVPR/BAV shall approve or disapprove requests for required approvals or consents within ten (10) business days following receipt of a written request, or the request shall be deemed approved.

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Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to a confidentiality request. Omissions are designated [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission with the confidentiality request.

UVPR Approvals.  Sublicensor shall provide UVPR with not less than thirty (30) days advance written notice of its intent to terminate or modify the material terms of this Sublicense.  Sublicensor agrees that subject to the following provision it shall obtain UVPR’s approval for any such modification prior to implementing such modification or termination, which approval shall not be unreasonably withheld.  Within ten (10) business days of its receipt of notice of Sublicensor’s intent to terminate or modify, UVPR shall either formally approve of the intended action or if it disapproves, it shall state the reasons for its disapproval in writing.  In the event that UVPR fails to respond in writing to the notice of intended action within said ten (10) business days, it shall be deemed to have approved of said action.  The parties understand and agree that the business terms of the Sublicense, including but not limited to the Territory, Minimum Royalties, Royalty percentage, and other substantive business terms fall within the discretion of Sublicensor.

20.

Breach and Termination.

20.1  Immediate Right of Termination.

20.1.1 In addition to any other right of termination contained elsewhere herein, Sublicensor shall have the right to terminate this Agreement immediately, by giving written notice to Sublicensee, in any of the following situations:

(a)

if Sublicensee becomes subject to any voluntary or involuntary order of any governmental agency involving the recall of any of the Sublicensed Products because of safety, health or other hazards or risks to the public;

(b)

if, other than under Title 11 of the United States Code or a similar law of any other country, Sublicensee becomes subject to any voluntary or involuntary insolvency, bankruptcy or similar proceedings, or an assignment for the benefit of creditors is made by Sublicensee, or an agreement between Sublicensee and its respective creditors generally is entered into providing for extension or composition of debt, or a receiver is appointed to administer the assets of Sublicensee, or the assets of Sublicensee are liquidated, or any distress, execution or attachment is levied on such of its manufacturing or other equipment as is used in the production and distribution of the Sublicensed Products and the same remains undischarged for a period of thirty (30) days;

(c)

if Sublicensee breaches the provisions of Section 2.4 prohibiting sublicensing;

(d)

if Sublicensee breaches the provisions of Section 22.1 prohibiting assignments;

(e)

if there is (i) a transfer of twenty-five percent (25%) or more of the capital stock of the Sublicensee in a single transaction or a series of transactions, (ii) if there is a transfer of the business and/or substantially all of the assets of the Sublicensee in a single transaction or a series of transactions, or (iii) if there is a merger or consolidation of Sublicensee with any other entity; 

(f)

if Sublicensee undergoes a significant change in management;

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(g)

if any changes are made to the terms of the Sublicense without written approval of UVPR pursuant to Section 19.1;

(h)

if Sublicensee is found guilty of a felony and/or becomes involved in activities that publicly denigrate or go against the doctrine of the Catholic Church and as a consequence tarnish the good name and image of UVPR and/or BAV and/or the Vatican City State and/or the Roman Catholic Church; or

(i)

if Sublicensee fails to perform or generate any income within two (2) years of signing this Agreement.

20.2  Curable Breaches.

If either party breaches any of the terms and provisions of this Agreement, other than those specified in Section 20.1, and the party involved fails to cure the breach within thirty (30) days after receiving written notice by certified or registered mail from the other party specifying the particulars of the breach, the non-defaulting party shall have the right to terminate this Agreement by giving written notice thereof to the defaulting party.

Not by way of limitation, Sublicensor shall have the right to terminate this Agreement (subject to Section 20.2.1), by giving written notice to Sublicensee, in any of the following events:

(a)

if Sublicensee makes, sells, offers for sale or distributes any Sublicensed Product or Advertising Material without having the prior written approval of Sublicensor and UVPR as required by Section 15 or makes any use of the Properties or Trademarks not authorized under this Agreement;

(b)

if Sublicensee fails to make any payment hereunder by the date such payment is due, or Sublicensee fails to submit complete and specific royalty statements to Sublicensor within the time periods specified in Section 7; 

(c)

if Sublicensee becomes involved in activities that will tarnish the good name and image of UVPR and/or BAV and/or Vatican City State and/or the Roman Catholic Church; or

(d)

if Sublicensee breaches any of the provisions or covenants of Sections 11, 12.4, or 16. 

Any Sublicensee breach as to a particular Sublicensed Product shall be considered a breach of the entire Agreement, and termination by Sublicensor shall be deemed to pertain to the entire Agreement and all Sublicensed Products unless Sublicensor specifies otherwise with prior written approval of UVPR. 

20.3  Effect of Termination.  Termination of this Agreement under the provisions of this Section 20 or provisions set forth elsewhere in this Agreement shall be without prejudice to any rights or claims which Sublicensor may otherwise have against Sublicensee.  Upon the termination of this Agreement, all Royalties on sales made prior to the date of termination shall become 

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immediately due and payable to Sublicensor.  Upon the termination of this Agreement under the provisions of Section 20.1, neither Sublicensee nor its receivers, trustees, assignees or other representatives shall have the right to develop, sell, exploit or in any way deal with the Properties, Sublicensed Products, Advertising Material or Logo, except with the written approval and instructions of Sublicensor following pre-approval of UVPR. 

Sections 2.5 (“Reservation of Rights”), 4 (“Representations and Warranties”), 7.3.1 (“Late Payments”), 8 (“Retention of Records”), 11 (“Indemnification”), 16  (“Copyright Provisions”), 20.3 (“Effect of Termination”), 20.4 (“Discontinuance of Use of Logo, Etc.”), 20.5 (“Disposition of Inventory Upon Expiration”), 22 (“Miscellaneous Provisions”) and any other provisions which by their nature are intended to survive shall survive any termination or expiration of this Agreement.

20.4  Discontinuance of Use of Logo, Etc.  Subject to the provisions of Section 20.5, upon the expiration or earlier termination of this Agreement, Sublicensee agrees to immediately and permanently discontinue manufacturing, selling, advertising, distributing and using the Sublicensed Products and Advertising Material, immediately and permanently discontinue using the Properties and Logo, immediately, either deliver to Sublicensor or destroy any copies, storyboards, molds, dies, patterns, devices or similar items from which the Sublicensed Products and Advertising Material were made or which contain any element of the Properties, and immediately terminate all agreements with manufacturers, distributors, affiliates and others which relate to the manufacture, sale, distribution and use of the Sublicensed Products.

20.5  Disposition of Inventory Upon Expiration.  Notwithstanding the provisions of Section 20.4, if this Agreement expires in accordance with its terms, and is not terminated for cause by Sublicensor, the provisions of this Section 20.5 shall apply.  If Sublicensee delivers to Sublicensor on or before the date thirty (30) days prior to the expiration of this Agreement a written inventory listing, on a product-by-product basis, of all Sublicensed Products in Sublicensee’s possession, custody or control as of the date of such inventory, Sublicensee shall have the right to sell any Sublicensed Products listed on such inventory for a period of six (6) months immediately following such expiration, subject to the payment of Royalties to Sublicensor on any such sales in accordance with the terms of this Agreement.  Sublicensor shall have the right (but not the obligation) to buy any or all of the Sublicensed Products listed on such inventory at Sublicensee’s cost of manufacture at the end of such six (6) month period.

21.

Communications.  Except as otherwise provided in Section 15.7, all contacts and communications of any type with UVPR or BAV in connection with or arising out of the provisions and requirements of this Agreement shall be handled exclusively by Sublicensor.  Sublicensee understands and acknowledges that it shall have no direct contact or written communication with UVPR or BAV without the prior written consent of Sublicensor.  Furthermore, Sublicensee shall promptly notify Sublicensor of the content and nature of any contact or communication that it may receive from UVPR or BAV.

22.

Miscellaneous Provisions.

22.1  No Assignments by Sublicensee.  Without the prior written consent of Sublicensor following pre-approval from UVPR, Sublicensee may not directly or indirectly assign, 

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Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to a confidentiality request. Omissions are designated [*****]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission with the confidentiality request.

transfer, sublicense or encumber any of its rights under this Agreement, and any such assignment, transfer, sublicense or encumbrance shall be void. 

22.1.1 It is hereby guaranteed that the UVPR, the BAV, the Vatican City State, and the Roman Catholic Church are completely and fully excluded from any legal action that arises from such actions.

22.2 Assignment by Sublicensor.  Sublicensor (and its successors and assigns) shall have the right to assign, transfer or encumber any or all of its rights under this Agreement following pre-approval from UVPR.

22.3  Successors and Assigns.  Subject to Section 22.1, this Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto.

22.4  Independent Contractors.  The relationship between Sublicensor and Sublicensee is that of independent contractors.  Sublicensor and Sublicensee are not joint venturers, partners, principal and agent, master and servant, or employer and employee and have no relationship other than independent contracting parties.  Sublicensee shall have no power to bind or obligate Sublicensor in any manner other than as is expressly set forth in this Agreement.

22.5  Governing Law; Dispute Resolution.

Any disagreements between Sublicensor and Sublicensee shall be resolved exclusively in the Sovereign State of Vatican City.  Sublicensor and Sublicensee each hereby consent to jurisdiction in the Sovereign State of Vatican City.  All disputes relating to this Agreement between Sublicensor and Sublicensee shall be governed by the laws of the Sovereign State of Vatican City, and Sublicensor and Sublicensee each hereby consents thereto.  All proceedings shall be conducted in the English language.

Any party to this Agreement may, upon written notice reasonably made, request that the dispute be decided by binding arbitration.  Whenever a controversy arises between Sublicensor and Sublicensee in regard to the formulation, interpretation or application of any part of this Agreement, or in regard to an alleged wrongful act by either party, and when the parties are unable to settle said controversy amicably and one party has demanded arbitration, the dispute shall be referred to a College of Arbiters in the Sovereign State of Vatican City.  The College of Arbiters shall be composed of the following three members:  one Arbiter designated by Sublicensor, one Arbiter designated by Sublicensee and the third Arbiter, who will be the President of the College, will be agreed upon by the two (2) designated Arbiters.  In the instance when a party fails to designate its Arbiter within twenty (20) days of the receipt of notification of the appointment of the first Arbiter, the President of the Tribunal of the Sovereign State of Vatican City shall appoint the second Arbiter.  If the designated Arbiters cannot agree to a third Arbiter, the President of the College of Arbiters (i.e., the third Arbiter) shall be appointed by the President of the Tribunal of the Sovereign State of Vatican City (“Tribunal”).  Every Arbiter shall be independent and impartial. 

The College of Arbiters shall have its seat in the Sovereign State of Vatican City.  There will be no appeal of its decision.  The expenses incurred by the arbitration will be assumed by the losing party.  

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In any arbitration proceeding a party may be represented by legal counsel of its choice in accord with the laws of the Sovereign State of Vatican City.

Except as set forth below, the parties shall keep confidential the fact of the arbitration, the dispute being arbitrated and the decision of the Arbiters. Notwithstanding the foregoing, the parties may disclose information about the arbitration to persons who have a need to know, such as directors, trustees, management employees, witnesses, experts, investors, attorneys, lenders, insurers and others who may be directly affected.  Additionally, if a party has stock which is publicly traded, the party may make such disclosures as are required by applicable securities laws.  Further, if a party is expressly asked by a third party about the dispute or the arbitration, the party may disclose and acknowledge in general and limited terms that there is a dispute with the other party which is being (or has been) arbitrated.  Once the arbitration award has become final, if the arbitration award is not promptly satisfied, then these confidentiality provisions shall no longer be applicable.

22.6 Entire Agreement; Modification. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter set forth in this Agreement.  There shall be no amendments or modifications to this Agreement, except by a written document which is signed by all parties including UVPR.

22.7  Headings.  The headings for each article and section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular article or section.

22.8  Severability.  Should any one or more of the provisions of this Agreement be held invalid or unenforceable by a court of competent jurisdiction, it shall be considered severed from this Agreement and shall not serve to invalidate the remaining provisions hereof.  The parties shall make a good faith effort to replace any invalid or unenforceable provision with a valid and enforceable provision such that the objectives contemplated by them when entering this Agreement may be realized.

22.9  No Waiver.  Any delay in enforcing a party’s rights under this Agreement or any waiver as to a particular default or other matter shall not constitute a waiver of such party’s right to the future enforcement of its rights under this Agreement, excepting only an express written and signed waiver as to a particular matter for a particular period of time.

22.10  Attorneys’ Fees.  In the event of a dispute between the parties hereto or in the event of any default hereunder, the party prevailing in the resolution of any such dispute or default shall be entitled to recover its reasonable attorneys’ fees and other costs incurred in connection with resolving said dispute or default.

22.1  Notices.  Any notices required by this Agreement shall be in writing, shall specifically refer to this Agreement and shall be sent by registered or certified airmail, postage prepaid, or by prepaid nationally recognized overnight courier, or by telefax, telex or cable, charges prepaid, to the respective addresses set forth below unless subsequently changed by written notice to the other party given in accordance with this section.  Notice shall be deemed delivered upon the earlier of (i) when received, (ii) three (3) business days after post-mark of destination or (iii) the date notice is sent via telefax during normal business days.

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To 1451:

1451 International Ltd.

600 West Broadway, Suite 1520

San Diego, California 92101

Fax: (619) 515-1481

with a copy to:

Guillermo Marrero, Esq.

International Practice Group

600 West Broadway, Suite 1520

San Diego, California 92101

Fax: (619) 515-1481

To SRLLC:

Second Renaissance, LLC

870 Encanto Street

Corona, California 92881

Fax: (951) 280-0971

with a copy to:

James R. Pickett, Esq.

32847 Abana Court

Temecula, California 92592

Fax: (951) 302-7205

To Sublicensee:

Eternal Image

28175 Haggerty Road

Novi, MI 48377

Attn: Clint Mytych, President & CEO

Fax: (248) 671-5001

To UVPR:

Francesco Riccardi, Administrator

Ufficio Vendita Pubblicazioni e Riproduzioni

I-00120 Vatican City State, Europe

Fax: 011-39-06-6988-3478

22.12  Compliance with Laws.  Nothing contained in this Agreement shall require or permit Sublicensor or Sublicensee to perform any act inconsistent with the requirements of any Vatican City State law, regulation or executive order may be in effect from time to time.

22.13  Confidentiality.  Except as otherwise agreed by the parties in writing, the parties shall treat in confidence and not disclose to any third party the terms of this Agreement, except as required by law.

UVPR Approval. This Agreement and the obligations of the parties hereunder are conditioned upon obtaining the pre-approval hereof by UVPR in the form of Schedule 22.14 attached hereto and incorporated herein by reference.

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IN WITNESS WHEREOF, the parties have executed this Agreement by their duly authorized representatives as of the date first set forth above.

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SCHEDULE 1.5

SUBLICENSED PRODUCTS

Sublicensed products shall mean caskets and urns for funeral home use.

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SCHEDULE 1.12

TERRITORY

Sublicensee shall have the [*****] right to manufacture and sell the Sublicensed Products in the following Territory:                                                worldwide.

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SCHEDULE 2.2.1

The VATICAN LIBRARY COLLECTION LOGO/SEAL

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SCHEDULE 5

TERM

This Agreement and the sublicense granted herein shall commence on the Commencement Date and shall continue for a term of approximately three (3) years ending June 30, 2008, unless earlier terminated as provided herein. Sublicensee shall have the right and option to extend the term for an additional five (5) years by written notice delivered to Sublicensor no less than ninety (90) days prior to expiration of the original term, during the continuance of Sublicensor’s License Agreement, as the same may be extended or renewed. 

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SCHEDULE 6

ADVANCE SUBLICENSE FEE

[*****]

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SCHEDULE 7

MINIMUM ANNUAL ROYALTIES

[*****]

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SCHEDULE 22.14

APPROVAL OF UVPR

A.

  This will certify that 1451 INTERNATIONAL LTD. and SECOND RENAISSANCE, LLC (combined as “Sublicensor”) have separate legal and binding main License Agreements with the UFFICIO VENDITA PUBBLICAZIONI E RIPRODUZIONI ("UVPR"), whose legal representative is the undersigned, granting certain rights (as defined therein) to the BIBLIOTECA APOSTOLICA VATICANA  ("BAV" or "THE VATICAN LIBRARY"). 

B.  This will further certify and acknowledge that pursuant to the main License Agreements, Sublicensor has the right, subject to review and approval of proposed Products, publicity and other matters by UVPR following consultation with BAV, to sell and distribute within the Territory consisting of the entire world, unless otherwise specified, Products covered by the main License Agreements, and to utilize the name and logo of the Vatican Library Collection in connection therewith.

C.

  This will further certify that Sublicensor has the right, subject to approval by UVPR following consultation with BAV, to sublicense its rights under the main License Agreements, through the approved form of Standard Agreement for Sublicensing incorporated herewith. On July ___, 2005, the Standard Agreement for Sublicensing - Caskets & Urns and has been presented to the undersigned for pre-approval and UVPR hereby approves the same. 

Approved on

Date: 

UFFICIO VENDITA PUBBLICAZIONI 

E RIPRODUZIONI (UVPR)

By:    Dr. Francesco Riccardi

Its:    Administrator

31

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