Document:

“PRECIOUS MOMENTS” LICENSE AGREEMENT

Agreement #14627-0-2

Exhibit 10.18

Contract: 14627

“PRECIOUS MOMENTS”

LICENSE AGREEMENT

THIS AGREEMENT, dated as of  March 31, 2005, between UNITED FEATURE SYNDICATE, INC., d.b.a. UNITED MEDIA, a New York corporation with its principal office at 200 Madison Avenue, 4th Floor, New York, New York 10016 (“UM”), as exclusive worldwide licensing representative of PRECIOUS MOMENTS, INCORPORATED, an Illinois corporation with its principal office at 2170 Point Boulevard, Suite 200, Elgin, Illinois 60123 (“PMI”) and Eternal Image, a Michigan corporation with its principal office at 28175 Haggerty Road, Novi, Michigan, 48377 (the “Licensee”), is to evidence:

WHEREAS, PMI owns copyrights and trademark rights in a property known as PRECIOUS MOMENTS (the “Property”); and

WHEREAS, PMI has granted UM exclusive worldwide representation rights to license the use of said copyrights and trademarks, on behalf of PMI, in connection with the manufacture and sale of merchandise articles of every type and description; and

WHEREAS, the Licensee desires to obtain from UM a license to manufacture and sell certain merchandise articles using said copyrights and trademarks;

NOW, THEREFORE, the parties agree as follows:

1.

Definitions.  For purposes of this Agreement the following definitions shall apply:

(a)

The term “Actual Sale Royalties” shall mean royalties payable to UM by the Licensee under this Agreement as a result of actual sales of the Licensed Products by the Licensee.

(b)

The term “Advertising Materials” shall mean all advertising and promotional materials and all packaging, wrapping, and labeling materials for the Licensed Products (including, by way of illustration, but not limitation, catalogs, trade advertisements, television advertisements, flyers, sales sheets, labels, package inserts, hangtags, displays, and materials designed for dissemination via the Internet or any other electronic form of dissemination) which are produced by or for the Licensee and which make use of any of the Copyrights or Trademarks.

(c)

The term “Artwork” shall mean all artwork depicted by or embodied in the Works (but excluding all Chapel artwork and all animated artwork).

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(d)

The term “Copyrights” shall mean all copyrights now or hereafter owned by PMI in connection with the Property and the Artwork, and on all derivative works based on or using material from the Property or the Artwork.

(e)

The term “F.O.B. Sale” shall mean a sale of Licensed Products by the Licensee to a customer located in a country other than the country where the Licensed Products are manufactured, for which the customer pays any portion of the costs of shipping the Licensed Products to the Territory (or any other costs or duties associated with the shipping arrangement), regardless of whether the parties to the shipping arrangement specifically characterize the sale as an F.O.B. sale.

(f)

The term “Licensed Products” shall mean the following items: ADULT AND YOUTH CASKETS AND URNS, IN EACH CASE MADE OF COMPOSITE MATERIAL (NOT PRIMARILY WOOD OR METAL).

(g)

The term “Net Sales Price” shall mean the Licensee’s invoiced billing price to its Approved Retail Outlet and other customers for the Licensed Products, less only documented returns for damaged goods, which shall not exceed 5% of the Licensee’s total gross sales of the Licensed Products in any quarterly accounting period.

(h)

The term “Property” shall mean the Copyrights, the Trademarks, and all other property rights relating to the Works and the Artwork.

(i)

The term “Territory” shall mean the United States, its territories and possessions and Canada.

(j)

The term “Trademarks” shall mean the name of the Property, PRECIOUS MOMENTS, the names associated with the Artwork, and all other trademarks used in connection with the Property.

(k)

The term “Works” shall mean those works of visual art marketed by PMI under any of the Trademarks.

2.

Grant of License; Channels of Distribution.

(a)

Grant of License. UM grants to the Licensee, on the terms and conditions set forth in this Agreement, the [*****] right and license to use the Copyrights and Trademarks in connection with the manufacture, distribution, sale, and advertising of the Licensed Products in the Territory via the channels of distribution specified in subparagraph 2(b).

(b)

Channels of Distribution.  The Licensee shall have the right to offer the Licensed Products directly to or through the following channels of distribution: distributors selling directly to funeral homes.  The Licensee shall have no right to distribute the Licensed Products (or distribute the Licensed Products to any party the Licensee has reason to believe will distribute the Licensed Products) (i) to a theme park 

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or an amusement park; (ii) via television or other broadcast home shopping channels or services; or (iii) to discount stores, buyers clubs, jobbers, liquidators, or any other retailers selling goods at a deep discount.

3.

Period of Agreement.  The period of this Agreement shall commence on January 1, 2005, and end on December 31, 2007.  If the Licensee is desirous of extending the period of this Agreement beyond the foregoing expiration date, the Licensee shall provide UM with written notice of such desire at least six months prior to said expiration date; provided, however, that the Licensee’s giving of such notice shall not create any right on the part of the Licensee or obligation on the part of UM to extend the period of this Agreement, and no extension of this Agreement beyond December 31, 2007, shall occur except through a formal written amendment to this Agreement signed by both parties.

4.

Royalties and Marketing Expense Contributions.  In consideration for the rights granted to it under this Agreement, the Licensee agrees to pay UM the following royalties and Marketing Expense Contributions:

(a)

Guaranteed Royalties.  On execution of this Agreement and on or before the subsequent dates indicated below the Licensee agrees to pay UM the following non-refundable Guaranteed Royalty Amounts [*****], which shall be set off as a credit against the royalties due UM under subparagraph 4(b) (but not as a credit against the amounts payable to UM under subparagraph 4 (d)):

Due Date

Guaranteed Royalty Amount

On execution of this Agreement

[*****]

September 1, 2005

[*****]

June 30, 2006

[*****]

December 31, 2006

[*****]

If UM has not received the Guaranteed Royalty Amount due on execution of this Agreement or the above-referenced letter of credit by the date 15 days from the date of UM’s execution of this Agreement, UM shall have the right to terminate this Agreement, with immediate effect, by providing the Licensee with written notice of termination at any time prior to UM’s receipt of said Guaranteed Royalty Amount payment.

(b)

Percentage Royalties.  [*****]

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(c)

Sales to Subsidiaries or Other Controlled Parties.  If the Licensee sells a Licensed Product to a subsidiary or other party controlled by the Licensee (“Controlled Party”), or a series of Controlled Parties, the percentage royalty payable by the Licensee shall be calculated on the basis of the Net Sales Price for such Licensed Product charged by such Controlled Parties on resale of such Licensed Product to a third party or third parties that are not Controlled Parties.  Sales to Controlled Parties shall be conditioned on such Controlled Parties agreeing in writing to be bound by all of the terms and conditions of this Agreement.  The Licensee agrees to provide UM with copies of all such agreements between the Licensee and Controlled Parties.

(d)

Marketing Expense Contributions.  In addition to the amounts payable by the Licensee under subparagraphs 4 (a) and 4 (b), the Licensee shall pay UM the following Marketing Expense Contributions (amounts payable by the Licensee under this subparagraph 4 (d) shall not be taken into consideration in calculating whether the Licensee has earned out any Guaranteed Royalty Amounts the Licensee is obligated to pay under this Agreement):

(e)

Advance Marketing Expense Contributions.  On execution of this Agreement and on or before the subsequent dates indicated below the Licensee agrees to pay UM the following non-refundable Advance Marketing Expense Contributions [*****], which shall be set off as a credit against the amounts due UM under subparagraph 4(d)(ii):

Due Date

Advance Marketing Expense Contribution

On execution of this Agreement

[*****]

September 30, 2005

[*****]

June 30, 2006

[*****]

December 31, 2006

[*****]

(f)

Percentage Marketing Expense Contributions.  As a contribution to UM’s Property-related marketing expenses, the Licensee shall pay UM an amount equal to 1% of the Net Sales Price of all Licensed Products sold by the Licensee to its customers or distributors.

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5.

Marketing Plans; Sales Projections

(a)

Marketing Plans.  On execution of this Agreement and on or before each one-year anniversary of the commencement date of this Agreement, the Licensee shall provide UM with a written marketing plan with respect to the Licensed Products.  Each such marketing plan shall include, on a Licensed Product-by-Licensed Product basis, a marketing timetable, channels and methods of distribution, nature and amount of advertising and advertising expenditures, the top ten existing customers for the Licensed Products (if any), the top ten targeted customers for the Licensed Products, retail sell-through information and results in connection with such top ten existing customers, and any other information which UM may ask the Licensee to include.  Each marketing plan shall contain specific information for the one-year period immediately succeeding its submission and general estimates or projections for subsequent periods during which this Agreement remains in effect.  Where available, the Licensee will provide on-line retail consumption information.

(b)

Budgets and Sales Projections.  On execution of this Agreement and on or before each September 30 while this Agreement remains in effect the Licensee shall provide UM with a written budget and sales projection reports with respect to the Licensed Products.  On or before each March 31 and June 30 while this Agreement remains in effect the Licensee shall provide UM with sales projection reports.  Budgets and sales projection reports shall be provided to UM using prescribed forms to be supplied to the Licensee by UM.  In addition to the foregoing, the Licensee agrees at UM’s request to provide re-forecasts of its budgets and sales projections.

6.

Marketing Commitments.  

(a)

Availability to Distributors.  The Licensee shall make the Licensed Products generally available to distributors selling directly to funeral homes in the Territory by November 1, 2005, and shall notify UM in writing that it has done so.  If the Licensee fails to meet the foregoing obligations, UM shall have the right to terminate this Agreement with immediate effect, by providing the Licensee with written notice of termination.

(b)

Availability to Consumers.  The Licensee shall make the Licensed Products generally available to consumers in the Territory by November 1, 2005, and shall notify UM in writing that it has done so.  If the Licensee fails to meet the foregoing obligations, UM shall have the right to terminate the Agreement with immediate effect, by providing the Licensee with written notice of termination.

7.

PRECIOUS MOMENTS 101.  Within 60 days of the execution of this Agreement, one or more representatives of the Licensee shall be obligated to participate in the PRECIOUS MOMENTS 101 Orientation Course provided by UM.

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8.

License Acknowledgment.  The Licensee by executing this Agreement acknowledges that it has reviewed and understands all provisions of this Agreement, including the attached Standard Terms and Conditions.

9.

Standard Terms and Conditions.  This Agreement is subject to all of the provisions of the Standard Terms and Conditions which are attached to and made a part of the Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.

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“PRECIOUS MOMENTS” LICENSE AGREEMENT

STANDARD TERMS AND CONDITIONS

SECTION A.  QUALITY CONTROLS AND APPROVAL PROCEDURES FOR LICENSED PRODUCTS AND ADVERTISING MATERIALS.

A(1)

Warranty of Quality; Employment Practices.

(a)

Warranty of Quality.  The Licensee warrants that the Licensed Products will be of very good quality in design, material, and workmanship and suitable for their intended purpose; that no injurious, deleterious, or toxic substances will be used in or on the Licensed Products; that the Licensed Products will not cause harm when used as instructed and with ordinary care for their intended purpose; and that the Licensed Products will be manufactured, sold, and distributed in strict compliance with all applicable laws and regulations.

(b)

Employment Practices.  The Licensee warrants that neither the Licensee nor any manufacturer used by the Licensee: (i) shall use in connection with the manufacture, distribution, and sale of the Licensed Products labor provided by persons younger than the age for completing compulsory education in the jurisdiction where the relevant activity occurs; (ii) shall use in connection with the manufacture, distribution, and sale of the Licensed Products any children younger than 15 years of age; (iii) shall employ any persons whose labor is provided involuntarily (such as prison laborers); (iv) shall use corporal punishment or other forms of mental or physical coercion in disciplining its employees; (v) shall discriminate in hiring and employment practices on grounds of race, religion, national origin, political affiliation, sexual orientation, or gender; (vi) shall fail to comply with local labor laws and regulations, including, but not limited to, laws and regulations designed to provide employees with a safe and healthy workplace and wage and hour laws and regulations (including those setting minimum wages, maximum overtime, and maximum daily hours that may be worked).

A(2)

Approval Procedures for Licensed Products and Advertising

Materials; Approval Standards; Time for Approval by UM.

(a)

General.  The Licensee shall comply with all reasonable procedures which UM and PMI may from time to time adopt regarding their approval of Licensed Products and Advertising Materials which the Licensee proposes to manufacture, sell, or use under this Agreement.  These approval procedures shall be carried out on prescribed forms to be supplied to the Licensee by UM, and shall incorporate the basic approval requirements and steps outlined in the following subsections.  With the prior written approval of UM, two or more approval steps may be combined into a single step.  The Licensee agrees to retain all materials relating to approvals in its files while this Agreement remains in effect and for one year thereafter.

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(b)

Approval of Licensed Products.  With respect to each different Licensed Product which the Licensee proposes to manufacture and sell under this Agreement, the Licensee shall submit to UM for review and approval by UM and PMI the following materials for such Licensed Product, in the order stated.

(i)

a generic sample of the type of Licensed Product in question (that is, a sample of the kind of merchandise article to which the Licensee proposes to add the Copyrights or Trademarks in producing the Licensed Product, showing the general quality standard which will be met by the Licensed Product), including any mechanical, video, and sound elements;

(ii)

a concept for each design, item, and/or sku of the proposed Licensed Product, showing by rough art and product designs the nature and appearance of the proposed Licensed Product and describing the operation of any mechanical, video, and/or sound elements;

(iii)

finished art or schematics for the Licensed Product, showing the exact use of the Copyrights or Trademarks on or in connection with the proposed Licensed Product;

(iv)

a pre-production prototype sample of the Licensed Product, where appropriate, or a pre-production finial sample of the Licensed Product, showing in either case the exact form, finish, features, and quality the Licensed Product will have when manufactured in production quantities; and

(v)

two identical production samples of the Licensed Product, to be submitted immediately upon commencement of production.

The Licensee shall comply with all of the foregoing approval steps for each Licensed Product, obtaining written approval from UM, and from PMI, through UM, at each step of the procedure, unless by prior written notice from UM it is exempted from any such step with respect to a specific Licensed Product.  If the Licensee submits to UM for approval under this Section A(2)(b) an item which is not contained in the definition of “Licensed Products” set forth in paragraph 1 of this Agreement, and UM inadvertently approves such item, such approval shall not be deemed to add such item to said definition; in any such circumstance, the Licensee shall, upon receipt of written notice from UM, immediately and permanently cease manufacturing, distributing, selling, and advertising the item in question.

(c)

Approval of Advertising Materials.  With respect to each different item of Advertising Material which the Licensee (or any party acting on its behalf) proposes to produce and use under this Agreement, the Licensee shall submit to UM for review and approval by UM and PMI the following materials, in the order stated:

(i)

proposed written copy for the item of Advertising Material, with attached rough art showing how the Copyrights or Trademarks will be used in 

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connection with the copy, and, where appropriate, a description of all mechanical, video, and/or sound elements;

(ii)

final copy for the item, with finished “lift” art or other media, where appropriate, showing the use of the Copyrights or Trademarks;

(iii)

finished “mechanicals” or “masters” for the item; and

(iv)

six final printed samples of the item, where feasible (as, for example, in the case of packaging, labels, hangtags, printed brochures, catalogs, and the like), or, in the case of an item of Advertising Material for use on television, a VHS or DVD copy of such item.

The Licensee shall comply with all of the foregoing approval steps for each item of Advertising Material, obtaining written approval from UM, and from PMI, through UM, at each step of the procedure, unless by prior written notice from UM, it is exempted from any such step with respect to a specific item of Advertising Material.

(d)

Approval Standards.  UM and PMI shall have the right to disapprove any materials submitted under Sections A(2)(b) or A(2)(c) if they determine, in the exercise of their good faith judgment, that the materials in question would impair the value and goodwill associated with the property, the Copyrights, the Trademarks and/or UM’s licensing program therefore by reason of (i) their failure to satisfy the general quality standards set forth in Section A(1)(a); (ii) their use of art, designs, or concepts which fail accurately to depict the Artwork or would otherwise cause harm to the image or reputation of the Property or the Artwork; (iii) their use of materials which are unethical, immoral, or offensive to good taste; (iv) their failure to carry proper copyright or trademark notices; or (v) any other reasonable cause.

(e)

Time for Approval.  UM agrees to use reasonable efforts to notify the Licensee in writing of approval or disapproval by UM and PMI of any materials submitted to UM under Sections A(2)(b) and A(2)(c) within 20 business days after UM’s receipt of such materials, and agrees, in the case of disapproval, to notify the Licensee in writing of the reasons for disapproval.

A(3)

Maintenance of Quality of Licensed Products; Inspection of Production Facilities.  The Licensee agrees to maintain the quality of each Licensed Product manufactured under this Agreement up to the specifications, quality, and finish of the production sample of such Licensed Product approved by UM and PMI under Section A(2)(b), and agrees not to change the Licensed Product in any material respect or to make any change in the art for the Licensed Product without first submitting to UM samples showing such proposed changes and obtaining written approval of such samples by UM, and PMI, through UM.  From time to time after it has commenced manufacturing the Licensed Products, the Licensee, upon request, shall furnish free of charge to UM a reasonable number of random production samples of any licensed product specified by UM in its request.  Also, upon request, the Licensee shall furnish to UM the addresses of 

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the production facilities used by the Licensee for manufacturing the Licensed Products, and shall make arrangements for UM or PMI or their representatives to inspect such production facilities during reasonable business hours.

A4

Prohibition Against Manufacture, Sale, or Use of Unapproved Licensed Products or Advertising Materials; Termination Right of UM.  The Licensee shall not have the right to manufacture, offer for sale, distribute, sell, or use any Licensed Product or item of Advertising Material unless it has complied with all of the approval procedures and requirements set forth in this Section A, and has obtained prior written approval of such Licensed Product or item of Advertising Material by UM, and PMI, through UM.  Failure by the Licensee to comply with the provisions of this Section A shall constitute a material breach of this Agreement and shall be grounds for immediate termination of this Agreement by UM, as provided in Section K(1).

A(5)

Miscellaneous:

(a)

Style Guides and Special Art.  With respect to Property-related style guides and periodic style guide updates or supplements (“Style Guides”) and special Property-related artwork created for the Licensee at the Licensee’s request (“Special Art”), the Licensee shall reimburse PMI, within 30 days of the licensee’s receipt of an appropriate invoice, for all costs of supplying such Style Guides and Special Art to the Licensee, including, without limitation, travel expenses incurred at the Licensee’s request by PMI’s in-house art personnel.  The Licensee shall pay PMI interest on late payments of invoices for Style Guides or Special Art at a rate of 1.5% per month.  All Property-related artwork and any media created by or for the Licensee pursuant to this Agreement shall remain the property of PMI, and at UM’s or PMI’s request the Licensee shall promptly, at the Licensee’s expense, deliver to UM or PMI all such media containing Property-related artwork.

(b)

Translations.  All translations of written material used on or in connection with the Licensed Products or Advertising Materials shall be accurate, and the Licensee, when submitting the Licensed Products and the Advertising Materials for approval, shall provide UM with English translations of all such written materials in a language other then English.

(c)

Special Provision on Production of Licensed Products.  The Licensee shall not, without UM’s prior written consent, (i) have the Licensed Products printed or otherwise reproduced by another Licensee of UM; or (ii) print or have the Licensed Products printed using film or similar devices obtained by the Licensee from another Licensee of UM.

(d)

Transactions with Other Licensees.  The Licensee shall not, without UM’s prior written consent, (i) sell or deliver to another UM Licensee the films or other devices used by the Licensee to produce the Licensed Products; or (ii) print or otherwise produce any items using the Copyrights or Trademarks for another UM Licensee.

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(e)

Duplicate Films or Devices.  When requested by UM to do so, the Licensee shall supply duplicates of the films or other devices used by the Licensee in producing the Licensed Products to other Licensees of UM outside the Territory, at cost of duplication plus shipping.

(f)

Right of UM and PMI to Acquire Licensed Products.

(i)

UM Right to Obtain Licensed Products.  During each one-year period while this Agreement remains in effect, UM shall have the right to obtain from the Licensee up to one unit of each Licensed Product.  UM shall notify the Licensee in writing of its desire to obtain Licensed Products from the Licensee under this Section A(5)(f)(i), identifying the specific Licensed Products and the quantity of each such Licensed Product UM wishes to acquire.  Within 15 business days of its receipt of any such request from UM, the Licensee shall ship the requested Licensed Products, to the extent they are then available, to UM free of charge and at the Licensee’s expense.  Any Licensed Products acquired by UM under this Section A(5)(f)(i) shall be royalty-free.

(ii)

Right of UM and PMI to Purchase Licensed Products.  In addition to the random production samples of the Licensed Products to be supplied by the Licensee to UM free of charge under Section A(5)(f)(i), UM and PMI shall be entitled at any time while this Agreement remains in effect to purchase from the Licensee, (A) at the Licensee’s most favorable wholesale price, any available quantity of the Licensed Products, which may be resold by UM or PMI, or (B) at the Licensee’s cost of manufacture, any available quantity of the Licensed Products, which may not be resold by UM or PMI.  Any such Licensed Products purchased by UM or PMI shall be royalty-free.

(g)

Licensee’s Name to Appear on Licensed Products.  All Licensed Products shall bear the Licensee’s name, in a location specified by UM.

A(6)

Establishment of Policies and Procedures.  The Licensee shall, at its sole expense, establish policies and procedures reasonably calculated to insure that the Licensed Products are produced in accordance with this Section A.

SECTION B.

  RESTRICTIONS ON SALE OF LICENSED PRODUCTS;

CONSEQUENCES OF VIOLATION OF RESTRICTIONS; EFFORTS TO SELL LICENSED PRODUCTS.

B(1)

Restrictions on Sale of Licensed Products.    The Licensed Products shall be sold to the public only through the channels of distribution specified in subparagraph 2(b), and only in the manner in which merchandise articles of the same general description are customarily merchandised to the public.  The Licensee shall not use or sell the Licensed Products as premiums, or distribute the Licensed Products to third parties which the Licensee has reason to believe intend to use or sell the Licensed 

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Products as premiums.  Use or sale of the Licensed Products as “premiums,” for purposes of the foregoing provisions, shall mean use or sale of the Licensed Products in connection with the following kinds of promotional activities: self-liquidator programs, joint merchandising programs; giveaways; sales incentive programs; door openers; traffic builders; and any other kinds of promotional programs designed to promote the sale of the Licensed Products or other goods or services of the Licensee or a third party.

B(2)

Consequences of Violation of Restrictions.  If the Licensee breaches the provisions of Section B(1) by using or selling the Licensed Products as premiums, the provisions of this Section B(2) shall apply, whether or not UM elects to exercise its rights under Section K with respect to such breach.  On all Licensed Products used or sold by the Licensee as premiums, the Licensee shall pay UM a percentage royalty five percentage points higher than the percentage royalty for regular sales specified in subparagraph 4(b).  Such percentage royalty shall be calculated as if such Licensed Products used or sold as premiums had been sold by the Licensee at a Net Sales Price equal to the average Net Sales Price for the same Licensed Products sold by the Licensee through its authorized channels of distribution during the calendar quarter in which the Licensee’s use or sale of such Licensed Products as premiums occurred.

B(3)

Restriction on Sales to Distributors.  The Licensee shall not sell Licensed Products to wholesalers, jobbers, or distributors unless authorized in writing to do so by UM on a case-by-case basis.  The contract of sale between the Licensee and each approved distributor shall be subject to UM’s prior written approval.  Such contracts of sale shall incorporate all conditions and restrictions set forth in this Agreement governing the sale and distribution of the Licensed Products and shall authorize UM to commence actions directly against distributors to enforce such conditions and restrictions.  The Licensee agrees strictly to enforce against its distributors all such terms and conditions, and to cooperate fully with UM in connection with actions taken by UM to enforce such terms and conditions.

B(4)

Efforts to Sell Licensed Products.

(a)

Failure to Submit Prototype.  If within three months of the execution of this Agreement the Licensee has failed to submit to UM a prototype of a particular Licensed Product, UM shall have the right to delete such Licensed Product from the definition of “Licensed Products,” by giving written notice of such deletion to the Licensee, and upon the sending of such notice, all rights to such Licensed Product shall revert to UM.

(b)

Good Faith Effort to Exploit Rights.  If within three months of the execution of this Agreement the Licensee has failed to take any good faith steps to exploit the rights granted to it (for example, by seeking to obtain UM’s approval of a proposed Licensed Product, or commencing to manufacture and sell an approved Licensed Product,) UM shall have the right to terminate this Agreement immediately by giving written notice of termination to the Licensee.

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(c)

General Obligation as to Manufacture and Sale of Licensed Products.  The Licensee agrees to manufacture the Licensed Products at the Licensee’s own expense in sufficient quantities to meet the reasonably anticipated demand.  The Licensee also agrees to exercise reasonable efforts to advertise and promote the Licensed Products at its own expense and to use its best efforts to sell the Licensed Products in the Territory.

(d)

UM Right to Eliminate country from Territory.  If at any time during the period of this Agreement the Licensee is not making regular sales of more than a nominal nature of any of the Licensed Products in a country of the Territory, as determined by UM, UM shall have the right, upon giving 30 days prior written notice to the Licensee, to terminate the Licensee’s rights for all Licensed Products for such country.

(e)

UM Right to Terminate Licenses for Specific Licensed Product.  If at any time during the period of this Agreement the Licensee is not making regular sales of more than a nominal nature of a particular Licensed Product in a country of the Territory, as determined by UM, UM shall have the right, upon giving 30 days prior written notice to the Licensee, to terminate the Licensee’s rights for such Licensed Product for such country.  In order to assist UM in reviewing its marketing activities, the Licensee agrees to furnish UM upon request complete information evidencing on a country-by-country basis the Licensee’s efforts to market the Licensed Products in such countries.

(f)

Effect of Termination of Rights as to Licensed Product or Portion of Territory.  UM’s termination, pursuant to Sections B(4)(d) or B(4)(e), of the Licensee’s rights with respect to a particular Licensed Product or a country of the Territory shall not reduce or otherwise alter the Guaranteed Royalty Amounts due UM from the Licensee under this Agreement.

B(5)

Special Sales.

 For purposes of this Agreement, the term “Special Sale” shall mean a sale of the Licensed Products through channels of distribution not included within the Licensee authorized channels of distribution or otherwise not permitted or authorized by the terms and conditions of this Agreement.  Special Sales shall include, by way of illustration, but not limitation, sales of Licensed Products created specifically for a particular retailer and sold to such retailer on a non-returnable basis, and sales of Licensed Products to another UM Licensee with the intention that such other UM Licensee will package such Licensed Products with products bearing the Copyrights and Trademarks produced by such other UM Licensee.  All Special Sales shall be subject to UM’s prior written approval, which may be granted or withheld in UM’s absolute discretion.  On all Licensed Products sold by the Licensee in connection with a Special Sale, the Licensee shall pay UM a percentage royalty to be agreed by the parties at the time of UM’s approval of such Special Sale.  Each sale off the Licensed Products in connection with a Special Sale approved in advance in writing by UM shall be separately identified in the Licensee’s quarterly royalty accountings to UM under Section C(5) of this Agreement.

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SECTION C.  ROYALTIES: STATEMENTS

C(1)

Basis for Computation of Royalties.  All royalties and Marketing Expense Contributions due to UM shall accrue upon the sale of the Licensed Products, regardless of the time of collection by the Licensee.  For purposes of this Agreement, a Licensed Product shall be considered “sold” as of the date on which such Licensed Product is billed, invoiced, shipped, or paid for, whichever event occurs first.  If any Licensed Products are consigned to an approved distributor by the Licensee, the Licensed Products shall be considered “sold” by the Licensee as of the date on which such distributor bills invoices, ships, or receives payment for any of the Licensed Products, whichever event occurs first.  Royalties and Marketing Expense Contributions payable by the Licensee on sales of the Licensed Products made in violation of any of the provisions of this Agreement shall not be taken into consideration in calculating whether the Licensee’s sales of the Licensed Products have earned out any Guaranteed Royalty Amounts and/or Advance Marketing Expense Contributions the Licensee is obligated to pay under this Agreement.

C(2)

Time of Payment.

(a)

Time of Payment – Royalties.  The Licensee shall pay all royalties owing to UM under this Agreement for any calendar quarter within 30 days following the end of the calendar quarter in question.  All royalty amounts in this Agreement are stated in U.S. Dollars, and all royalty payments shall be made in U.S. Dollars.  All royalty statements required to be submitted by the Licensee shall be submitted within 30 days following the end of the calendar quarter to which they relate and shall accompany the royalty payments made to UM.  All royalty checks, which shall be made payable to UM and accounting statements (as required by Section C(5)(a) shall be sent by the Licensee to the following address:

United Media

Attn: Controller, Licensing

P. O. Box 85271

Cincinnati, OH 45264

Alternatively, royalty payments may be made by wire transfer to the following account, with accounting statements sent to the above address:

US Bank

Attn: United Media

#801-3641

ABA#042000013

Cincinnati, OH 45202

Copies of all royalty checks or wire transfer confirmations and accounting statements shall be sent simultaneously to the following address:

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United Media

Attn: Financial Manager, Licensing

200 Madison Avenue, 4th Floor

New York, New York 10016

(b)

Time of Payment – Marketing Expense Contributions.  The Licensee shall pay all Marketing Expense Contributions owing to UM under this Agreement for any calendar quarter within 30 days following the end of the calendar quarter in question.  All Marketing Expense Contribution amounts in this Agreement are stated in U.S. Dollars, and all Marketing Expense Contribution payments shall be made in U.S. Dollars.  All Marketing Expense Contribution statements required to be submitted by the Licensee shall be submitted within 30 days following the end of the calendar quarter to which they relate and shall accompany the Marketing Expense Contribution payments made to UM.  All Marketing Expense Contribution checks (which shall be made payable to UM PRECIOUS MOMENTS Marketing Fund) and accounting statements (as required by Section C(5)(b) shall be sent by the Licensee to the following address:

UM PRECIOUS MOMENTS Marketing Fund

P. O. Box 641865

Cincinnati, OH 45264-1865

Copies of all Marketing Expense Contribution checks and accounting statements shall be sent to the following address:

United Media

Attn: Financial Manager, Licensing

200 Madison Avenue, 4th Floor

New York, New York 10016

(c)

Royalty Adjustments.  The receipt or acceptance by UM of any royalty or Marketing Expense Contribution statements furnished pursuant to this Agreement, or the receipt or acceptance of any royalty or marketing expense contribution payments made, or the fact that UM has previously audited the periods covered by such royalty or Marketing Expense Contribution statements shall not preclude UM from questioning their accuracy at any time.  If any inconsistencies or mistakes are discovered in such statements or payments, appropriate adjustments shall be made immediately by the parties.  The Licensee shall pay UM interest on a late royalty and/or Marketing Expense Contribution payment at a rate of 1.5% per month, compounded monthly.

C(3)

Negotiation of Royalty on Discounted Sales.  If the Licensee proposes to sell any Licensed Product at a price which is less than 10% above the Licensee’s manufactured cost of such Licensed Product, the Licensee shall so notify UM in writing.  UM shall have a right of prior approval over any such proposal, and if it approves such a proposal, the parties agree to negotiate in good faith with regard to a percentage royalty higher than that specified in paragraph 4 to be payable by the Licensee with respect to such sale.

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C(4)

Deductions; Taxes; Remittance Controls.

(a)

Deductions.  There shall be no deduction from the royalties owed to UM for uncollectible accounts, or for taxes, fees, assessments, or other expenses of any kind which may be incurred or paid by the Licensee in connection with: (i) royalty payments due UM; (ii) the manufacture, sale, distribution, or advertising of the Licensed Products in the Territory; or (iii) the transfer of funds or royalties or the conversion of any currency into U.S. Dollars.  It shall be the Licensee’s sold responsibility at its expense to obtain the approval of any governmental authorities; to take whatever steps may be required to effect the payment of funds to UM; to minimize or eliminate the incidence of taxes, fees, or assessments which may be imposed; to enable it to commence or continue doing business in any country; and to comply in any and all respects with all applicable laws and regulations.

(b)

Taxes.  Notwithstanding the provisions of the preceding Section C(4)(a), if (i) any country imposes a withholding tax against UM, as Licensor, with respect to the royalties payable to UM by the Licensee on sales of the Licensed Products in such country, (ii) such tax is paid by the Licensee on behalf of UM, and (iii) such tax is an income tax as to which a foreign tax credit is allowable to UM under Section 901 of the Internal Revenue Code of 1986, as amended, the Licensee may deduct the amount of such withholding tax from the royalties paid to UM under this Agreement on the condition that the Licensee furnishes to UM all information and documentation required by UM to enable UM to obtain a foreign tax credit on its U.S. income tax return with respect to such withholding tax payments by the Licensee.

(c)

Remittance Controls.  If any payment required to be made to UM pursuant to this Agreement cannot be made when due because of exchange controls imposed by a law or regulation of any country of the Territory, and such payment remains unpaid for such reason for 180 days, the Licensee shall, recommend to UM, in writing, either of the following alternative methods of handling such payment: (i) if local currency can be converted legally into currencies other than U.S. Dollars for purposes of foreign remittances, the Licensee may recommend that UM receive such payment in any such currency as UM may specify, and in such case the amount payable in foreign currency so selected shall be determined by reference to the then applicable rate of exchange most favorable to UM; (ii) the Licensee may recommend that UM elect to have payment made to it in local currency deposited to the credit of UM in a bank account in the foreign country in question designated by UM, upon which the Licensee shall furnish to UM evidence of such deposit.  UM shall have the right, at its sole discretion, to elect which method of payment it will require the Licensee to adopt.

C(5)

Royalty and Marketing Expense Contribution Statements.

(a)

Royalty Statements.  The Licensee shall furnish to UM, at the same time it makes payment of royalties, a full and complete statement, duly certified by an officer of the Licensee to be true and accurate, showing the number of each stock keeping unit (“sku”) of the Licensed Products manufactured during the calendar quarter in question, 

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the number of each sku of the Licensed Products sold during the calendar quarter in question, the number of each sku of the Licensed Product sold during the calendar quarter in question (including a separate listing for skus of the Licensed Product sold via the Internet or other electronic sales channels), the bar code for each sku of the Licensee Products, the total gross sales revenues for each sku of the Licensed Products, an itemization of all allowable deductions, if any, the Net Sales Price for each sku of the Licensed Products sold, the amount of royalties due with respect to such sales, the names of the five customers that purchased the highest wholesale value of the Licensed Products from the Licensee during the calendar quarter in question along with the wholesale value of the Licensed Products purchased by each such customer, and copies of contracts for any sales to Controlled Parties as required by subparagraph 4(c), together with such other pertinent information as UM may reasonably request from time to time.  There shall be a breakdown of sales of Licensed Products by country, and all figures and monetary amounts shall first be stated in the currency in which the sales were actually made.  If several currencies are involved in any reporting category, that category shall be broken down by each such currency.  Next to each currency amount shall be set forth the equivalent amount stated in U.S. Dollars, and the rate of exchange used in making the required conversion calculation.  The rate of exchange shall be the actual rate of exchange obtained by the Licensee on the date of payment.  UM shall have the right, on providing the Licensee with reasonable prior written notice, to modify the elements of the information the Licensee is obligated to provide UM in connection with its royalty accountings provided to UM under this Section C(5)(a).

(b)

Marketing Expense Contribution Statements.  In addition to the royalty accounting statements required by Section C(5)(a), the Licensee shall furnish to UM, at the same time it makes payment of royalties, a full and complete statement, duly certified by an officer of the Licensee to be true and accurate, showing the amount of the Marketing Expense Contribution due from the Licensee with respect to the Licensee’s sales of the Licensed Products during the calendar quarter in question, together with such other pertinent information as UM may reasonably request from time to time.

SECTION D.  BOOKS OF ACCOUNT AND OTHER RECORDS; AUDITS.

D(1)

Retention of Records.  While this Agreement remains in effect and for two years thereafter, the Licensee shall keep full and accurate books of account and copies of all documents and other material relating to this Agreement at the Licensee’s principal office.  UM, by its duly authorized agents and representatives, shall have the right on reasonable prior notice to audit such books, documents, and other material, shall have access thereto during ordinary business hours, and shall be at liberty to make copies of such books, documents, and other material.  At UM’s request, the Licensee shall provide an authorized employee to assist in the examination of the Licensee’s records.

D(2)

Audits by UM.  If any audit of the Licensee’s books and records reveals that the royalties and/or Marketing Expense Contributions actually accounted for and paid to UM with respect to any period were underpaid or overpaid by 5% or more, the Licensee shall, in addition to paying UM any underpaid royalties and/or underpaid 

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Marketing Expense Contributions, reimburse UM for professional fees and direct out-of-pocket expenses incurred in conducting such audit, together with interest on the underpaid royalty, and/or underpaid Marketing Expense Contribution amount at a rate of 1.5% per month, compounded monthly.

D(3)

Failure to Provide Adequate Accountings or Maintain Adequate Records.  If the royalty accountings or Marketing Expense Contribution accountings submitted by the Licensee to UM under Section C(5) do not contain all information required by the provisions of Section C(5), if UM schedules an audit of the Licensee’s books and records and finds that the Licensee’s books and records cannot be audited, the Licensee shall pay UM within 15 days of its receipt of notice from UM invoking the provisions of this Section D(3), as liquidated damages and not as a penalty, an amount equal to twice the Guaranteed Royalty Amounts and/or Advance Marketing Expense Contribution payments due UM under this Agreement with respect to the periods as to which the Licensee has provided inadequate information or UM was unable to audit.

SECTION E.  TRADEMARK PROTECTION.

E(1)

Trademark Uses Inure to PMI’s Benefit.  All trademark uses of the Trademarks by the Licensee shall inure to the benefit of PMI, which shall own all trademarks and trademark rights created by such uses.  The Licensee hereby assigns and transfers to PMI all trademark and trademark rights created by such uses of the Trademarks, together with the goodwill of the business in connection with which such trademarks area used.

E(2)

Trademark Registrations.  On behalf of PMI, UM shall have the right, but not the obligation, to file in the appropriate offices of countries of the Territory trademark applications relating to the use or proposed use by the Licensee of any of the Trademarks in connection with the Licensed Products, such findings to be made in the name of PMI or in the name of any third party selected by PMI.

E(3)

Records Relative to Trademark Uses.  The Licensee shall keep appropriate records (including copies of pertinent invoices and correspondence) relating to the dates when each of the Licensed Products is first placed on sale or sold in each country of the Territory, and the dates of first use in each country of each different Trademark on the Licensed Products and Advertising Materials.  At UM’s request, the Licensee shall supply UM with samples of the trademark usages in question and other information which will enable UM to complete and obtain trademark applications or registrations on behalf of PMI, or to evaluate or oppose any trademark applications, registrations, or uses of third parties.

E(4)

Registered User Laws.  As to those countries which require applications to register the Licensee as a registered user of a Trademark or Trademarks used on or in connection with the Licensed Products or which require the recordation of this Agreement, the Licensee agrees to execute and deliver to UM such documents as may be necessary and as are furnished by UM for such purposes.

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E(5)

Trademark Notices.  The Licensee agrees to affix to the Licensed Products and to the Advertising Materials such trademark notices as may be specified by UM.  When one of the Trademarks is used as a trademark for any Licensed Product, the name shall be properly used as a trademark in a larger or bolder type than the Licensed Product (e.g., PRECIOUS MOMENTS casket), and shall not be used as the generic name of the Licensed Product.

E(6)

No Assertion of Rights.  The Licensee shall not, during the period of this Agreement or thereafter, directly or indirectly: (a) assert any interest or property rights in any of the Trademarks or any word or phrase confusingly similar with any of the Trademarks or associated with the Property; or (b) register, attempt to register, or adopt any of the Trademarks, or any word or phrase confusingly similar with any of the Trademarks or associated with the Property, as a trademark, service mark, trade name, corporate name, or Internet domain name; or (c) challenge or deny the validity of the Trademarks or PMI’s ownership of the Trademarks; or (d) permit or acquiesce in any of the foregoing activities by any of the Licensee’s subsidiaries, manufacturers, approved distributors, shareholders or other owners of an equity interest, or the agents or employees of any of the foregoing, or of the Licensee.

SECTION F.  COPYRIGHT PROVISIONS.

F(1)

Copyright Notices.  The authorization of UM and PMI to the Licensee to make public distribution of the Licensed Products and Advertising Materials is expressly conditioned upon the following agreement of the Licensee.  The Licensee agrees to place on all Licensed Products and on all Advertising Materials the copyright notice or notices in the name of PMI specified in writing by UM.

F(2)

Affixation of Notice; Name of Copyright Owner.  The Licensee acknowledges that proper copyright notices must be permanently affixed to all Licensed Products and Advertising Materials and to any separate portions of Licensed Products or Advertising Materials which contain the Artwork and which are intended to be used separately by the purchaser or ultimate user.  The Licensee agrees that it will not, without UM’s prior written consent, affix to the Licensed Products or the Advertising Materials a copyright notice in its name or the name of any person, firm, or corporation other than PMI.

F(3)

Assignment by Licensee.  The Licensee sells, assigns, and transfers to PMI its entire worldwide right, title, and interest in and to all “new works” or “derivative works” previously or hereafter created using or based on the Artwork, including, but not limited to, the copyrights and renewal copyrights thereon.  If parties who are not employees of the Licensee living in the U.S. make or have made any contribution to the creation of a “new work” so that such parties might be deemed to be authors of such “new work” as that term is used in present or future U.S. copyright statutes, the Licensee agrees to obtain from such parties a comparable full assignment of rights so that the foregoing assignment by the Licensee vests in PMI full rights in the “new work,” free of any claims, interests, or rights of other parties.  The Licensee agrees not to permit any of 

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its employees to obtain or reserve by oral or written employment agreements any rights as “authors” of such “new works.”  At UM’s request, the Licensee agrees to furnish UM with full information concerning the creation of “new works” and with copies of assignments of rights obtained from other parties.

SECTION G.  INDEMNIFICATIONS; PRODUCT LIABILITY

INSURANCE

G(1)

Licensee’s Indemnification.  The Licensee agrees to indemnify and hold UM and PMI harmless from any and all claims, liabilities, judgments, penalties, losses, costs, damages, and expenses resulting therefrom, including reasonable attorney’s fees, but excluding lost profits): (a) made by third parties against UM or PMI or suffered or incurred by UM or PMI arising by reason of or in connection with any act under or in violation of this Agreement by the Licensee, its subsidiaries, manufacturers, approved distributors, or other persons, or the employees or agents of any of the foregoing or of the Licensee, including, but not limited to, the manufacture, distribution, exploitation, advertising, sale, or use of the Licensed products by any of them, but excluding any claims based solely upon the use of the Copyrights or the Trademarks by the Licensee in accordance with the terms of this Agreement; (b) suffered or incurred by UM or PMI as a result of the exercises by UM of its termination rights against third parties which are provided for in any agreements entered into between the Licensee and such third parties in accordance with the provisions of Section J; or (c) suffered or incurred by UM or PMI as a result of (i) the sale or distribution of the Licensed Products outside the Territory by the Licensee or any third party; (ii) the sale or distribution of the Licensed Products outside the Licensee’s authorized channels of distribution by the Licensee or any third party; or (iii) the sale or distribution of the Licensed Products in violation of any other restriction on the sale or distribution of the Licensed Products, including, but not limited to, those restrictions set forth in Sections B(1) or B(3).

G(2)

UM’s Indemnification.  UM agrees to indemnify and hold the Licensee harmless from any and all claims (and liabilities, judgments, penalties, losses, costs, damages, and expenses resulting therefrom, including reasonable attorney’s fees, but excluding lost profits) made by third parties against the Licensee asserting rights in the Artwork and based solely upon the use of the Artwork by the Licensee in strict accordance with the terms of this Agreement.

G(3)

Claims Procedures.  With respect to any claims falling within the scope of the foregoing indemnifications:  (a) each party agrees promptly to notify the other of and keep the other fully advised with respect to such claims and the progress of any suits in which the other party is not participating; (b) each party shall have the right to assume, at its sole expense, the defense of a claim or suit made or filed against the other party; (c) each party shall have the right to participate, at its sole expense, in any suit instituted against it and to approve any attorneys selected by the other party to defend it, which approval shall not be unreasonably withheld or delayed; and (d) a party assuming the defense of a claim or suit against the other party shall not settle such claim or suit without 

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the prior written approval of the other party, which approval shall not be unreasonably withheld or delayed.

G(4)

Product Liability Insurance.  The Licensee agrees to obtain and maintain during the period of this Agreement, and for three years following expiration or termination of the Agreement, at its own expense, product liability insurance providing protection (at a minimum, in the amount of $2,000,000 per occurrence/$2,000,000 annual aggregate) applicable to any claims, liabilities, damages, costs, or expenses arising out of any defects or alleged defects in the Licensed Products.  Such insurance shall include coverage of UM and PMI, and their directors, officers, agents, employees, assignees, and successors.  Within 30 days after the execution of this Agreement by UM, the Licensee shall cause the insurance company issuing such policy to add UM and PMI to such policy as additional insureds and to issue a certificate to UM confirming that such policy has been issued and is in full force and effect and provides coverage of UM and PMI as required by this Section G(4), and also confirming that before any cancellation, modification, or reduction in coverage of such policy the insurance company shall give UM 30 days prior written notice of such proposed cancellation, modification, or reduction.  Any insurance carried by UM or PMI shall be deemed excess insurance, not subject to contribution.

SECTION H.  RESERVATION OF RIGHTS.

All rights in and to the Property (including premium rights in the Licensed Products) are retained by UM and PMI for their own use, except for the specific rights in the Property licensed to the Licensee under this Agreement.  UM and PMI reserve the right to use, and to license other parties to use, the Property in the Territory for any purpose UM or PMI may determine.

SECTION I.  INFRINGEMENTS: CLAIMS.

I(1)

Infringements.  When the Licensee learns that a party is making unauthorized uses of the Copyrights or Trademarks, the Licensee agrees promptly to give UM written notice giving full information with respect to the actions of such party.  The Licensee agrees not to make any demands or claims, bring suit, effect any settlements, or take any other action against such party without the prior written consent of UM.  The Licensee agrees to cooperate with UM, at no out-of-pocket expense to the Licensee, in connection with any action taken by UM to terminate infringements.  UM shall retain 100% of all net amounts recovered from infringers.

I(2)

Claims.  If claims are made against UM or the Licensee by a party asserting the ownership of rights in a name or design which is the same as or similar to one of the Copyrights or Trademarks, and asserting further that the use of a particular Copyright or Trademark by the Licensee infringes the rights of such party, or if the parties learn that another party has or claims rights in a trademark, name, or design which would or might conflict with the proposed or actual use of a Copyright or Trademark by the Licensee, UM and the Licensee agree in any such case to consult with each other on a 

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suitable course of action.  In no event shall the Licensee have the right, without the prior written consent of UM, to acknowledge the validity of the claim of such party, to obtain or seek a license from such party, or to take any other action which might impair the ability of UM to contest the claim of such party if UM so elects.  The Licensee agrees at UM’s request to make reasonable modifications requested by UM in the Licensee’s use of the Copyrights or Trademarks in question or to discontinue their use in the country of the Territory in question on the particular Licensed Product or Licensed Products which are involved, if UM, in its sole discretion, reasonably exercised, determines that such action is necessary to resolve or settle the claim or suit or eliminate or reduce the threat of a claim or suit by such party.  UM shall have the right to participate fully at its own expense in the defenses of any claim or suit institute against the Licensee with respect to the use by the Licensee of a Copyright or Trademark.

SECTION J.  NO SUBLICENSING; AGREEMENTS WITH 

MANUFACTURERS.

J(1)

Sublicensing.  The Licensee shall not have the right to sublicense any of the rights granted to it under this Agreement.  For purposes of this Agreement, “sublicense” means authorizing a third party to use the Copyrights and Trademarks in connection with the manufacture, distribution, sale, and advertising, for such third party’s own account, of the Licensed Products.

J(2)

Manufacturers.  The Licensee shall have the right to arrange with another party to manufacture the Licensed Products or components thereof for exclusive sale, use, and distribution by the Licensee.  Each such manufacturer shall be subject to UM’s prior written approval.  If UM approves the use by the Licensee of a particular manufacturer, the Licensee agrees within ten business days of its receipt of such approval to enter into a written agreement with such manufacturer, and agrees to incorporate into such written agreements all of the provisions, for the protection of the rights of UM and PMI, which are contained in the form manufacturer agreement which has been prepared by UM for such purposes, and which is available from UM.  The Licensee further agrees to furnish UM within 30 days of their execution copies of all agreements with such manufacturers.

J(3)

Enforcement of Manufacturer Agreements.  The Licensee agrees strictly to enforce against its manufacturers all of the provisions which are required to be included in such agreements for the protection of UM, as provided in Section J(2); to advise UM of any violations thereof by manufacturers, and of corrective actions taken by the Licensee and the results thereof; and at the request of UM to terminate such an agreement with any manufacturer which violates any of such provisions for the protection of UM and PMI.  If the Licensee fails to exercise such termination rights by giving written notice to the manufacturer in question within 20 days after being requested to do so in writing by UM, the Licensee appoints UM its irrevocable attorney-in-fact to send a notice of termination in the name of the Licensee to such manufacturer for the purpose of terminating the agreement or any specific rights of the manufacturer under such agreement.

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SECTION K.  BREACH AND TERMINATION.  

K(1)

Immediate Right of Termination.  UM shall have the right to terminate this Agreement immediately by giving written notice to the Licensee, in any of the following situations:

(a)

If the Licensee breaches any of the provisions of Section A(1)(b).

(b)

If the Licensee makes, sells, offers for sale, or distributes or uses any Licensed Product or Advertising Material without having the prior written approval of UM and PMI, as required by Section A, or makes any use of the Copyrights or Trademarks not authorized under this Agreement.

(c)

If the Licensee fails to make any Guaranteed Royalty Amount payment by the date such payment is required under the provisions of paragraph 4; or if the Licensee fails to submit royalty statements and/or royalty payments to UM during the time period specified in Section C(2)(a); or if the Licensee fails to make any Advance Marketing Expense Contribution payment by the date such payment is due under the provisions of paragraph 4; or if the Licensee fails to submit Marketing Expense Contributions or Marketing Expense Contribution statements to UM during the time period specified in Section C(2)(b).

(d)

If the Actual Sale Royalties for any period are less than the total of all Guaranteed Royalty Amount payments required to be made by the Licensee with respect to such period.

(e)

If the Licensee becomes subject to any voluntary or involuntary order of any governmental agency involving the recall of any of the Licensed Products because of safety, health, or other hazards or risks to the public.

(f)

If, other than under Title 11 of the United States Code, the Licensee becomes subject to any voluntary or involuntary insolvency, cession, bankruptcy, or similar proceedings, or an assignment for the benefit of creditors is made by the Licensee, or an agreement between the Licensee and its creditors generally is entered into providing for extension or composition of debt, or a receiver is appointed to administer the assets of the Licensee, or the assets of the Licensee 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 Licensed Products and remains undischarged for a period of 30 days.

(g)

If the Licensee breaches any of the provisions of Section 3.

(h)

If the Licensee breaches any of the provisions of Section M(1).

K(2)

Assumption and Rejection Under U.S. Bankruptcy Code.  After any order for relief under the Bankruptcy Code is entered against the Licensee, the Licensee 

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must assume or reject this Agreement within 60 days after the order for relief is entered.  If the Licensee does not assume the Agreement within such 60-day period, UM may, at its sole option, terminate this Agreement immediately by giving written notice to the Licensee, without further liability on the part of UM.  The Licensee agrees that any payments due UM under this Agreement after any order for relief under the Bankruptcy Code is entered against the Licensee shall be entitled to treatment as administrative expenses under Section 503 of the Bankruptcy Code, and shall be immediately paid when due to UM, without the need for UM to file an application or motion in the Licensee’s bankruptcy case for payment of such administrative expenses.

K(3)

Curable Breaches.  If either party breaches any of the terms and provisions of this Agreement other than those specified in Section K(1), and the party involved fails to cure the breach within 30 days after receiving written notice by certified or registered mail or overnight courier 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 to the defaulting party by registered or certified mail.

K(4)

Effect of Termination.  Termination of this Agreement under the provisions of this Section K or the provisions set forth elsewhere in this Agreement shall be without prejudice to any rights or claims which UM may otherwise have against the Licensee.  Upon the termination of this Agreement all royalties and Marketing Expense Contributions on sales previously made and all Guaranteed Royalty Amount payments and Advance Marketing Expense Contribution payments that would have been payable by the Licensee following termination shall become immediately due and payable to UM.  Upon the termination of this Agreement under the provisions of Section K(1)(f) or K(2) of this Agreement, the Licensee, its receivers, trustees, assignees, or other representatives shall have no right to sell, exploit, or in any way deal with the Licensed Products, the Advertising Materials, the Copyrights, or the Trademarks, except with the special written consent and instructions of UM.

K(5)

Discontinuance of Use of Copyrights, Trademarks, Etc..  Subject to the provisions of Section K(6), upon the expiration or earlier termination of this Agreement the Licensee agrees immediately and permanently to discontinue manufacturing, selling, advertising, distributing, and using the Licensed Products and Advertising Materials; immediately and permanently to discontinue using the Copyrights and Trademarks; at UM’s option, immediately to destroy, in the presence of UM’s designated representative, any films, molds, dies, patterns, or similar items from which the Licensed Products and Advertising Materials were made, where any Copyright or Trademark is an integral part thereof, or, alternatively, deliver such films, molds, dies, patterns, or similar items to UM’s designated representative; immediately deliver to UM or its designated representative, at the Licensee’s expense, all Property-related materials in the Licensee’s possession, custody or control, whether created by the Licensee or supplied to the Licensee by UM, including, but not limited to, Property-related art banks, Style Guides, and analogous materials; and immediately to terminate all agreements with manufacturers, approved distributors, and others which relate to the manufacture, sale, distribution, and use of the Licensed Products.  On termination of this Agreement by UM 

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for cause, the Licensee shall, at UM’s option and at the Licensee’s expense, either deliver its inventory of the Licensed Products to UM or UM’s designated representative, or destroy its inventory of the Licensed Products and supply UM with notarized certificate of destruction.  If the parties negotiate beyond the expiration date of this Agreement with respect to the terms and conditions of an extension of the period of this Agreement and then fail to reach agreement on such terms and conditions, such period of negotiation shall not be deemed to extend the period of this Agreement beyond its expiration date or to extend the sell-off period provided for in Section K(6).  The Licensee shall pay percentage royalties and percentage Marketing Expense Contributions on all Licensed Products sold by the Licensee during any such period of negotiation even the Licensee has not earned out 100% of any Guaranteed Royalty Amount or Advance Marketing Expense Contribution payments made by the Licensee pursuant to this Agreement.

K(6)

Disposition of Inventory upon Expiration.  Notwithstanding the provisions of Section K(5), if this Agreement expires in accordance with its terms, and is not terminated for cause by UM, the provisions of this Section K(6) shall apply.  If the Licensee delivers to UM on or before the date 30 days prior to the expiration of this Agreement a written inventory listing, on a Licensed Product-by-Licensed Product basis, all Licensed Products in the Licensee’s possession, custody, or control as of the date of such inventory, the Licensee shall have the [*****] right to sell any Licensed Products listed on such inventory for a period of 90 days immediately following such expiration, subject to the payment of royalties to UM on any such sales in accordance with the terms of this Agreement.  Following the expiration of said sell-off period, the Licensee shall, at UM’s option, either deliver its remaining inventory of the Licensed Products to UM or UM’s designated representative, or destroy its remaining inventory of the Licensed Products and supply UM with a notarized certificate of destruction.  The Licensee shall pay percentage royalties and percentage Marketing Expense Contributions on all Licensed Products sold by the Licensee during said sell-off period even if the Licensee has not earned out 100% of any Guaranteed Royalty Amount payments or Advance Marketing Expense Contributions made by the Licensee pursuant to this Agreement.  UM shall have the right (but not the obligation) to buy any or all of the License Products listed on such inventory at the Licensee’s cost of manufacture.  The sell-off right granted the Licensee under this Section K(6) shall in no event apply to a quantity of any Licensed Product exceeding 50% of the Licensee’s average quarterly unit sales of such Licensed Product during the one-year period immediately preceding the expiration of this Agreement.  If the Licensee breaches the provisions of this Section K(6) by selling the Licensed Products after the sell-off period, the Licensee shall pay UM, as liquidated damages, and not as a penalty, a percentage royalty three times the percentage royalty specified in subparagraph 4(b).

SECTION L.  RIGHTS OF UM IN PROPERTY.

The Licensee recognizes that all rights of UM in the Property are derived from UM’s Agreement with PMI, and that if for any reason UM’s rights under said Agreement are terminated, UM’s rights and obligations under this Agreement shall be automatically assigned to PMI, without liability to UM.  Following such automatic assignment, PMI 

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shall be substituted for UM as licensor under this Agreement, and the Licensee shall thereafter deal directly with PMI with respect to all matters arising out of this Agreement.

SECTION M.  MISCELLANEOUS PROVISIONS.

M(1)

Restriction on Assignments and Encumbrances.

(a)

Restriction on Assignments.  Without the prior written consent of both Um and PMI, the Licensee shall not directly or indirectly assign, transfer, or sublicense any of its rights under this Agreement.  The foregoing provision shall apply to transfers of ownership interests in the Licensee (including the stock of the Licensee) which would result in a change in control of the Licensee.  This Agreement shall be binding upon and inure to the benefit of the successors and assigns of UM.

(b)

Restriction on Encumbrances.  Without the prior written consent of UM, the Licensee shall not encumber any of its rights under this Agreement in any fashion, including but not limited to, the granting of a security interest in this Agreement or any of the Licensed Products.

(c)

Transfer and Encumbrance Fees.  If at any time while this Agreement remains in effect, the Licensee wishes to assign or encumber this Agreement, the Licensee shall so notify Um in writing, at the same time providing UM with all information and documentation necessary to permit UM to evaluate the contemplated transaction.  UM shall be entitled to condition its consent to any assignment or encumbrance of this Agreement to such reasonable terms and conditions as UM deems appropriate, including, but not limited to, payment by the Licensee of a transfer or encumbrance fee.  The amount of the transfer or encumbrance fee shall be determined by UM based on the circumstances of the particular transaction, taking into account such factors as the estimated value of the license being assigned or encumbered, the risk of business interruption or loss of quality, production, or control UM may suffer as a result of the assignment or encumbrance; the identity, reputation, creditworthiness, financial condition, and business capabilities of the proposed assignee or other entity involved in the assignment or encumbrance; and UM’s internal costs related to the assignment or encumbrance; provided, however, that in no event shall the transfer  or encumbrance fee be less than 25% of the Guaranteed Royalty Amounts due UM under this Agreement.  Payments made to UM by the Licensee pursuant to this Section M(1)(c) may be applied toward any Guaranteed Royalty Amounts the Licensee is obligated to pay under this Agreement.

M(2)

Parties Not Joint Venturers.  Nothing contained in this Agreement shall be construed so as to make the parties partners or joint venturers or to permit the Licensee to bind UM to any agreement or purport to act on behalf of UM in any respect.

M(3)

No Inducement.  Neither party has been induced to enter into this Agreement by, nor is either party relying on, any representation not expressly stated in this Agreement.

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Agreement #14627-0-2

M(4)

Modifications of Agreement Remedies.  No waiver or modification of any of the terms of this Agreement shall be valid unless in writing, signed by both parties.  Failure by either party to enforce any rights under this Agreement shall not be construed as a waiver of such rights, and a waiver by either party of a default in one or more instances shall not be construed as a continuing waiver or as a waver in other instances.

M(5)

Invalidity of Separable Provisions.  If any term or provision of this Agreement is for any reason held to be invalid, such invalidity shall not affect any other term or provision, and this Agreement shall be interpreted as if such term or provision had never been contained in this Agreement.

M(6)

Notices.  All notices to be given under this Agreement (which shall be in writing) shall be given at the respective addresses of the parties as set forth on page 1, unless notification of a change of address is given in writing.  The date of mailing shall be deemed to be the date the notice is given.  The Licensee acknowledges that UM’s agent for service of process in New York is the Secretary of State of New York, Department of State, 162 Washington Avenue, Albany, New York 12231.

M(7)

Headings.  The paragraph and section headings of this Agreement are inserted only for convenience and shall not be construed as a part of this Agreement.

M(8)

Entire Understanding.  This Agreement contains the entire understanding of the parties with respect to its subject matter.  Any and all representations or agreements by any agent or representative of either party to the contrary shall be of no effect.

M(9)

Choice of Law.  This Agreement and all disputes arising from or related to this Agreement or its subject matter shall be governed, resolved, and remedied in accordance with the laws of the State of New York, applicable to agreements, acts, omissions, and behavior made, performed, and accomplished wholly in New York, without resort to conflict of law principles.

M(10)

Choice of Proceeding and Forum.  Any and all disputes, except as provided below, shall be resolved at the request of either party through binding arbitration in New York, New York under the then existing Rules of the American Arbitration Association (the “AAA”).  The arbitration shall be conducted by a single arbitrator.  The prevailing party shall be entitled to recover its reasonable attorney’s fees and expenses in addition to any other awards.  The arbitrator’s award shall be final and binding on both parties and may be enforced by any court having a jurisdiction.  Notwithstanding the parties’ agreement with respect to arbitration, UM may elect to pursue a claim in an appropriate court if (a) there is in UM’s judgment a need for expedited relief to preserve the confidentiality of confidential information or the integrity, enforcement, or value of a Copyright, Trademark, or other proprietary right in the Property; or (b) there is an indispensable third party, as defined under Rule 19 of the U.S. Federal Rules of Civil Procedure, that will not agree to arbitration and it appears likely that the indispensable party can be joined in the action.  In cases falling within the scope 

27

Agreement #14627-0-2

of Section M(10)(a), UM may institute the action in an appropriate court that can grant expedited relief.  In cases falling within the scope of Section M(10)(b), the dispute shall be brought and maintained in a court of competent jurisdiction having jurisdiction over the parties to this Agreement as well as the indispensable party.  If UM elects to implement an action under either Section M(1)(a) or Section M(1)(b), and chooses the state or federal court in New York, New York, to resolve the dispute in question, the Licensee consents to the exclusive jurisdiction and appropriate venue of such court.  In no event shall any arbitrator have the right to rule on PMI’s ownership of the Copyrights or the Trademarks or the validity of the Copyrights or the Trademarks.

M(11)

No Injunctive Relief.  The Licensee acknowledges that no breach of this Agreement by UM will result in irreparable harm to the Licensee, and that the Licensee will be adequately compensated by monetary damages for any breach of this Agreement by UM.

M(12)

Limitation of Liability.  NEITHER UM NOR PMI SHALL UNDER ANY CIRCUMSTANCES BE LIABLE TO THE LICENSEE FOR INCIDENTAL, CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES, OR LOST OR IMPUTED PROFITS AND/OR ROYALTIES ARISING OUT OF THIS AGREEMENT OR ITS TERMINATION OR EXPIRATION, WHETHER FOR BREACH (OR ALLEGED BREACH OF A REPRESENTATION OR WARRANTY OR ANY OBLIGATION UNDER THIS AGREEMENT, WHETHER LIABILITY IS ASSERTED IN CONTRACT OR TORT AND IRRESPECTIVE OF WHETHER UM OR PMIHAS BEEN ADVISED OF THE POSSIBILITY OF ANY SUCH LOSS OR DAMAGE.  THE LICENSEE HEREBY WAIVES ANY CLAIM THAT THESE EXCLUSIONS DEPRIVE IT OF ANY ADEQUATE REMEDY.

M(13)

Confidentiality.  The Licensee agrees to treat this Agreement and the terms and conditions of this Agreement as confidential information.  In addition, the Licensee acknowledges that, pursuant to the terms of this Agreement, it will come into possession of certain marketing and other proprietary information and records relating to the Feature and businesses of UM and PMI.  The Licensee agrees that any such information shall be treated as the confidential property of UM and PMI.  The Licensee agrees that it shall take every reasonable precaution to safeguard the confidentiality of such information with the same degree of care that it exercises to protect the confidentiality of its own proprietary information.  The Licensee shall transmit such confidential information only to such of its agents, employees, and professional advisers who need to know such information for purposes of effecting this Agreement and who shall agree to be bound by the terms and conditions of this section.  The Licensee agrees that confidential information shall not be disclosed to others, except as necessary to carry out or enforce the terms of this Agreement or as may be required by law or legal process (provided UM and PMI are given sufficient advance notice, in writing, in order to oppose any such required disclosure).  Confidential information provided or approved by UM or PMI in writing for distribution without restriction to third parties, and information which is or becomes independently known to the Licensee (other than as a result of the 

28

Agreement #14627-0-2

Licensee’s breach of its confidentiality obligations) shall not be subject to this prohibition.

M(14)

Survival.  The rights and obligations of the parties with respect to Sections A(1), D, E, F, G, K(4), K(5), K(6), M(9), M(10), M(11), M(12), and M(13) of this Agreement and any remaining royalty obligations of the Licensee, as well as any term, provision, or condition which expressly continues beyond the date of expiration or termination of this Agreement, or which is required for the interpretation of this Agreement or necessary for the full observation and performance by each party of all rights and obligations arising prior to the date of expiration or termination of this Agreement, shall survive any expiration or termination of this Agreement.

29

Agreement #14627-0-2

AMENDMENT TO AGREEMENT

THIS AMENDMENT TO AGREEMENT, dated this  15  day of February, 2006, between UNITED FEATURE SYNDICATE, INC., d.b.a. UNITED MEDIA, a New York corporation with its principal office at 200 Madison Avenue, 4th Floor, New York, New York 10016 (“UM”), as exclusive worldwide licensing representative of PRECIOUS MOMENTS, INCORPORATED, an Illinois corporation with its principal office at 2170 Point Boulevard, Suite 200, Elgin, Illinois 60123 (“PMI”), and ETERNAL IMAGE, a Michigan corporation with its principal office at 28175 Haggerty Road, Novi, Michigan 48377 (the “Licensee”), is to evidence:

WHEREAS, pursuant to an agreement dated April 11, 2005, UM granted the Licensee certain rights with respect to the PRECIOUS MOMENTS property, which is owned by PMI; and

WHEREAS, the parties wish to amend said agreement in certain respects;

WHEREAS, capitalized terms not otherwise defined herein have the meanings set forth in said agreement;

NOW, THEREFORE, said agreement is amended as follows:

1.

Subparagraph 4(a) is deleted and the following substituted therefor:

“(a)

Guaranteed Royalties.  On execution of this Agreement and on or before

the subsequent dates indicated below, the Licensee agrees to pay UM the following non-refundable Guaranteed Royalty Amounts [*****], which shall be set off as a credit against the royalties due UM under subparagraph 4(b) (but not as a credit against the amounts payable to UM under subparagraph 4(d):

Due Date

Guaranteed Royalty Amount

Upon execution of this Agreement

[*****]

Upon execution of the first

Amendment to this Agreement

[*****]

February 3, 2006

[*****]

June 30, 2006

[*****]

December 31, 2006

[*****]

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Agreement #14627-0-2

2.

Subparagraph 4(d)(i) is deleted and the following substituted therefore:

“(a)

Guaranteed Royalties.   On execution of this Agreement and on or before the subsequent dates indicated below, the Licensee agrees to pay UM the following non-refundable Guaranteed Royalty Amounts [*****], which shall be set off as a credit against the royalties due UM under subparagraph 4(b) but not as a credit against the amounts payable to UM under subparagraph 4(d)):

Amendment to this Agreement

[*****]

February 3, 2006

[*****]

June 30, 2006

[*****]

December 31, 2006

[*****]

Except as expressly modified by this amendment, all terms and conditions of said agreement shall remain in full force and effect, and all provisions of said agreement modified, replaced, or deleted by this amendment shall remain full enforceable in their original forms with respect to the period prior to the effective date of this amendment.

IN WITNESS WHEREOF, the parties have executed this amendment to

agreement on the date set forth above.

 

31

Agreement #14627-0-2

SECOND AMENDMENT TO AGREEMENT

THIS SECOND AMENDMENT TO AGREEMENT, dated October 26, 2006, between UNITED FEATURE SYNDICATE, d.b.a. UNITED MEDIA, a New York corporation with its principal office at 200 Madison Avenue, 4th Floor, New York, New York 10016 (“UM”), as exclusive worldwide licensing representative of PRECIOUS MOMENTS, INCORPORATED, an Illinois corporation with its principal office at 2170 Point Boulevard, Suite 200, Elgin, Illinois 60123 (“PMI”), and ETERNAL IMAGE, a Michigan corporation with its principal office at 2880 Orchard Lake Road, Suite 130, Farmington Hills, Michigan 48334 (the “Licensee”), is to evidence:

WHEREAS, pursuant to an agreement dated April 11, 2005, as amended February 15, 2006, PMI granted the Licensee certain rights with respect to the PRECIOUS MOMENTS property; and

WHEREAS, the parties wish to amend said agreement in certain respects, effective 

June 30, 2006;

NOW, THEREFORE, said agreement is amended as follows:

1.

Subparagraph 4(a) is deleted and replaced in its entirety with the following:

“(a)

Guaranteed Royalties.  On execution of this Agreement and on or

before the subsequent dates indicated below the Licensee agrees to pay to UM the following non-refundable Guaranteed Royalty Amounts [*****], which shall be set off as a credit against the royalties due UM under subparagraph 4(b) (but not as a credit against the amounts payable to UM under subparagraph 4(d):

Due

Guaranteed Royalty Amount

On execution of

this Agreement

[*****]

On execution of the first

amendment to this Agreement

[*****]

February 3, 2006

[*****]

December 4, 2006

[*****]

December 31, 2006

[*****]

32

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.

Subparagraph 4(d)(i) is deleted and replaced in its entirety with the following:

“(a)

Advance Marketing Expense Contributions.  On execution of this

Agreement and on or before the subsequent dates indicated below the Licensee agrees to pay to UM the following non-refundable Advance Marketing Expense Contributions [*****], which shall be set off as a credit against the royalties due UM under subparagraph 4(d)(ii):

Due Date

Guaranteed Royalty Amount

On execution of

this Agreement

[*****]

On execution of the first

amendment to this Agreement

[*****]

February 3, 2006

[*****]

December 4, 2006

[*****]

December 31, 2006

[*****]

3.

Except as expressly modified by this amendment, all terms and conditions of said

agreement shall remain in full force and effect, and all provisions of said agreement modified, replaced, or deleted by this amendment shall remain fully enforceable in their original forms with respect to the period prior to the effective date of this amendment.

IN WITNESS WHEREOF, the parties have executed this amendment on the date set forth above.

33

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.

THIRD AMENDMENT TO AGREEMENT

THIS THIRD AMENDMENT TO AGREEMENT, dated  March 2, 2007, between UNITED FEATURE SYNDICATE, d.b.a. UNITED MEDIA, a New York corporation with its principal office at 200 Madison Avenue, 4th Floor, New York, New York 10016 (“UM”), as exclusive worldwide licensing representative of PRECIOUS MOMENTS, INCORPORATED, an Illinois corporation with it’s principal office at 2850 W. Golf Road, Suite 250, Rolling Meadows, IL 60008 (“PMI”), and ETERNAL IMAGE, a Michigan corporation with its principal office at 2880 Orchard Lake Road, Suite 130, Farmington Hills, Michigan 48334 (the “Licensee”), is to evidence:

WHEREAS, pursuant to an agreement dated April 11, 2005, as amended February 15, 2007, PMI granted the Licensee certain rights with respect to the PRECIOUS MOMENTS property, and

WHEREAS, the parties wish to amend said agreement in certain respects, effective February 16, 2007;

NOW, THEREFORE, said agreement is amended as follows:

1.

Subparagraph 1(f) is deleted and replaced in its entirety with the following:

(f)

The term “Licensed Products” shall mean the following items:

ADULT AND YOUTH CASKETS AND URNS, IN EACH CASE MADE OF COMPOSITE MATERIAL (NOT PRIMARILY WOOD OR METAL).  THE URNS WILL BE MANUFACTURED OF COMPOSITE MATERIAL FOR THE BASE WITH A FIGURINE AT THE TOP.  THE FIGURINE IS TO BE MANUFACTURED OF COMPOSITE OR RESIN.

2.

Except as expressly modified by his amendment, all terms and conditions of said agreement shall remain in full force and effect, and all provisions of said agreement modified, replaced, or deleted by this amendment shall remain fully enforceable in their original forms with respect to the period prior to the effective date of this amendment.

IN WITNESS WHEREOF, the parties have executed this amendment on the date set forth above.

34

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.

35

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.

FOURTH AMENDMENT TO LICENSE AGREEMENT

THIS FOURTH AMENDMENT TO LICENSE AGREEMENT (“Fourth Amendment”), dated November 29, 2007, between PRECIOUS MOMENTS, INCORPORATED (“PMI”), an Illinois corporation with its principal office at 2850 West Golf Road, Suite 250, Rolling Meadows, Illinois 60008, U.S.A. (“PMI”), and ETERNAL IMAGE, a Michigan corporation with its principal office at 2880 Orchard Lake Road, Suite 130, Farmington Hills, Michigan 48334 (“Licensee”), is to evidence:

WHEREAS, pursuant to a license Agreement dated April 11, 2005 (the “License Agreement”), PMI granted the Licensee certain rights with respect to the PRECIOUS MOMENTS property; and

WHEREAS, pursuant to an amendment to agreement dated February 15, 2006 (the “First Amendment”), the parties amended the License Agreement; and 

WHEREAS, pursuant to an amendment to agreement dated October 26, 2006 (the “Second Amendment”), the parties further amended the License Agreement; and

WHEREAS, the License Agreement, the First Amendment and the Second Amendment are collectively referred to herein as the “Agreement”; and

WHEREAS, the Agreement expires on December 31, 2007: and

WHEREAS, the parties wish to renew and amend said Agreement in certain respects;

NOW, THEREFORE, said Agreement is amended as follows, effective as of 

January 1, 2008:

1.

It is agreed that the termination date of the Agreement shall be December 31, 2008.  Accordingly, paragraph 3(a) of the Agreement is deleted and the following substituted therefor:

(a)

Period of Agreement.  The period of this Agreement shall commence on January 1, 2005, and end on December 31, 2008.  If the Licensee is desirous of extending the period of this Agreement beyond the foregoing expiration date, the Licensee shall provide UM with written notice of such desire at least six months prior to said expiration date; provided, however, that the Licensee’s giving of such notice shall not create any right on the part of the Licensee or obligation on the part of UM to extend the period of this Agreement, and no extension of this Agreement beyond December 31, 2008, shall occur except through a formal written amendment to this Agreement signed by both parties.

36

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.

The Guaranteed Royalty Amounts payable under paragraph 4(a) shall be set off as a credit against the royalties due UM under subparagraph 4(b) for the period from January 1, 2005 through December 31, 2008 (but not as a credit against the amounts payable to UM under subparagraph 4(d).

3.

Except as expressly modified by this Fourth Amendment, all terms and conditions of the Agreement shall remain in full force and effect, and all provisions of the Agreement modified, replaced, or deleted by this Fourth Amendment shall remain fully enforceable in their original forms with respect to the period prior to the effective date of this Fourth Amendment.

IN WITNESS WHEREOF, the parties have executed this Fourth Amendment to Agreement as of the date set forth above.

 

37

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.

FIFTH AMENDMENT TO AGREEMENT

THIS FIFTH AMENDMENT TO AGREEMENT, dated this 27  day of August 2008, between PRECIOUS MOMENTS, INCORPORATED, an Illinois corporation with its principal office at 2850 West Golf Road, Suite 250, Rolling Meadows, Illinois 60008 (“PMI”), and ETERNAL IMAGE, a Michigan corporation with its principal office at 2880 Orchard Lake Road, Suite 130, Farmington Hills, Michigan 48334 (the “Licensee”), is to evidence:

WHEREAS, pursuant to an agreement dated April 11, 2005 (the “License Agreement”) PMI granted the Licensee certain rights with respect to the PRECIOUS MOMENTS property; and

WHEREAS, the parties amended the License Agreement pursuant to an Amendment to Agreement dated February 15, 2006 (the “First Amendment”); and

WHEREAS, the parties further amended the License Agreement pursuant to a Second Amendment to Agreement dated October 26, 2006 (the “Second Amendment”), and

WHEREAS, the parties further amended the License Agreement pursuant to a Third Amendment to Agreement dated March 2, 2007 (the “Third Amendment”), and

WHEREAS, the parties further amended the License Agreement pursuant to a Fourth Amendment to Agreement dated November 29, 2007 (the “Fourth Amendment”); and

WHEREAS, the License Agreement as amended by the First Amendment, the Second Amendment, the Third Amendment and the Fourth Amendment is hereinafter referred to as the “Agreement”; and

WHEREAS, the Agreement expires on December 31, 2008; and

WHEREAS, the parties wish to renew the Agreement;

NOW, THEREFORE, the Agreement is further amended as follows, effective January 1, 2009:

1.

It is agreed that the termination date of the Agreement shall be 

December 31, 2009.  Accordingly, paragraph 3 of the Agreement is deleted and the following substituted therefor:

“(a)

Period of Agreement.  The period of this Agreement shall commence on January 1, 2005, and end on December 31, 2009.  If the Licensee is desirous of 

38

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.

extending the period of this Agreement beyond the foregoing expiration date, the Licensee shall provide UM with written notice of such desire at least six months prior to said expiration date; provided, however, that the Licensee’s giving of such notice shall not create any right on the part of the Licensee or obligation on the part of UM or PMI to extend the period of this Agreement, and no extension of this Agreement beyond December 31, 2009, shall occur except through a formal written amendment to this Agreement signed by both parties.

2.

The Guaranteed Royalty Amounts payable under paragraph 4(a) shall be

set off as a credit against the royalties due UM under subparagraph 4(b) for the period from January 1, 2005 through December 31, 2008 (but not as a credit against the amounts payable to UM under subparagraph 4(d).

3.

Except as expressly modified by this Fifth Amendment, all terms and

conditions of the Agreement shall remain in full force and effect, and all provisions of the Agreement modified, replaced, or deleted by this Fifth Amendment shall remain fully enforceable in their original forms with respect to the period prior to the effective date of this Fifth Amendment.

IN WITNESS WHEREOF, the parties have executed this Fifth Amendment to Agreement on the date set forth above.

 

39Collegiate License 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 10.19

THE COLLEGIATE LICENSING COMPANY

STANDARD RETAIL PRODUCT LICENSE AGREEMENT

This is an Agreement between Eternal Image Inc., a Corporation organized under the laws of the state of MI, having its principal place of business at 28800 Orchard Lake Rd.,  Ste. 130, Farmington Hills, MI  48334   (“Licensee”), an the Collegiate Licensing Company, a Georgia corporation, having a principal place of business at 290 Interstate North, Suite 200, Atlanta, Georgia  30339 (“CLC”), as agent on behalf of the Collegiate Institutions (as defined below).

WHEREAS, the individual Collegiate Institutions have authorized CLC as agent to administer their respective trademark licensing programs; and

WHEREAS, certain Collegiate Institutions have authorized CLC to enter into this Agreement on their behalf to license the use of certain Licensed Indicia (as defined below); and

WHEREAS, Licensee desires to manufacture, advertise, distribute and sell certain Licensed Articles (as defined below) containing the Licensed Indicia, and certain Collegiate Institutions, through CLC, are willing, subject to certain conditions, to grant this license.

1.  DEFINITIONS

In addition to the terms defined elsewhere in the Agreement, as used in this Agreement, the following terms shall have the following respective meanings:

(a)

“Collegiate Institutions” means the individual colleges, universities and other institutions represented by CLC, including any additions or deletions that may be made from time-to-time by CLC.

(b)

“Licensed Indicia” means the names and identifying indicia of  the Collegiate Institutions including, without limitation, the trademarks, service marks, trade dress, team names, nicknames, abbreviations, city/state names in the appropriate context, slogans, designs, colors, uniform and helmet designs, distinctive landmarks, logographics, mascots, seals and other symbols associated with or referring to the respective Collegiate Institutions.  Licensed Indicia includes those shown in Appendix B, modifications of the Licensed Indicia approved for use by the Collegiate Institutions, and any other names or identifying indicia adopted and approved for use by the Collegiate Institutions.

(c)

“Licensed Articles” means the products listed in Appendix C which contain Licensed Indicia.

(d)

 “Authorized Brands” means any additional brand names or labels Licensee may use in association with the Licensed Articles.  Authorized Brands are listed in Appendix D.

(e)

 “Distribution Channels” means the channels of trade in which Licensee may advertise distribute and sell the Licensed Articles in the Territory.  The Distribution Channels authorized herein are indicated in Appendix D, which may also identify Distribution Channels that are not authorized in this Agreement.  Licensee shall not advertise, distribute or sell Licensed Articles to any third party that 

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.

Licensee knows or should reasonably know intends or is likely to advertise, redistribute or resell Licensed Articles outside the authorized Distribution Channels.

(f)

“Territory” means the United States of America, its territories and possessions, and United States military bases aboard.  Licensee shall not advertise, distribute or sell Licensed Articles outside the Territory, or to any person or entity that Licensee knows or should reasonably know intends or is likely to advertise, redistribute or resell Licensed Articles outside the Territory.

(g)

“Net Sales” means the total gross sales of all Licensed Articles distributed or sold at the greater of Licensee’s invoiced selling price or Licensee’s regular domestic wholesale warehouse price, including the royalty amount, less lawful quantity trade discounts actually allowed and taken as such by customers and shown on the invoice, less any credits for returns actually made as supported by credit memoranda issued to customers, less sales taxes, and less prepaid transportation charges on Licensed Articles shipped by Licensee from its facilities to the purchaser.   There shall be no other deductions allowed including, without limitation, deductions for direct or indirect costs incurred in the manufacturing, distributing, selling, importing or advertising (including cooperative and other advertising and promotional allowances) of the Licensed Articles, nor shall any deductions be allowed for non-collected or uncollectable accounts, commissions, cash or early payment discounts, close-out sales, distress sales, sales to employees, or any other costs.

(h)

“Premiums” means any products, including Licensed Articles, bearing any Licensed Indicia featured alone or in combination with the indicia of any third party, that Licensee sells or gives away for the purposes of (i) promoting, publicizing or increasing the sale of its own products or services; or (ii) promoting, publicizing or increasing the sale of the products or services of any third party.  Premiums include, without limitation, combination sales, incentives for sales force, and trade or consumer promotions such as sweepstakes.

2.  GRANT OF LICENSE

 

(a)

Grant:  Upon execution of this Agreement, and subject to its terms and conditions, the    Collegiate Institutions listed in Appendix A, through CLC, grant Licensee the [*****], revocable, nontransferable rights to manufacture, advertise, distribute and sell the Licensed Articles listed in Appendix C, containing the Licensed Indicia shown in Appendix B, under the applicable Authorized Brands and in the Distribution Channels indicated in Appendix D, in the Territory, during the Term.  Licensee shall exercise such rights in accordance with all CLC and Collegiate Institution guidelines, policies and requirements provided to Licensee, which shall be deemed part of the Agreement.

(b)

Rights Reserved:  Nothing in this Agreement shall be construed to prevent CLC or any Collegiate Institution from granting any other licenses or rights for use of the Licensed Indicia.  The Collegiate Institutions retain all rights to use and license their respective Licensed Indicia.

(c)

Term:  This Agreement shall begin effective as of last date of signature below and shall expire December 31, 2008, unless terminated sooner or renewed in the manner provided in this Agreement.

(d)

Renewal:  Upon expiration, if Licensee has complied with all terms and conditions of this Agreement during the proceeding Term or renewal period, Licensee shall be considered for renewal 

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.

of this Agreement.  Renewal is at the discretion of the individual Collegiate Institutions in consultation with CLC.  Licensee recognizes and agrees that CLC and the Collegiate Institutions have no express or implied obligation to renew the Agreement.  CLC and the Collegiate Institutions will have no liability to Licensee for any expenses incurred by Licensee in anticipation of any renewal of the Agreement.

(e)

Limitations on License:  This license is subject to the following limitations and obligations, as well as other limitations and obligations set forth in the Agreement:

(1)

Licensee shall not use the Licensed Indicia for any purpose other than as authorized in this Agreement.  Any proposed additions to the Licensed Articles and/or new designs shall be submitted in writing or via MyiCLC to CLC and samples shall be submitted to CLC for prior approval, as provided in Section 10.  Licensee shall, upon notice by CLC, immediately recall any unauthorized products or designs from the marketplace, and destroy them or submit them to CLC, at CLC’s option and at Licensee’s expense.

(2)

Licensee shall not use any brand names other than Authorized Brands in connection with the manufacture, advertising, distribution and sales of the Licensed Articles.  CLC and the Collegiate Institutions shall have the right to remove or change any of the Authorized Brands during the Term.

(3)

Licensee shall advertise, distribute and sell Licensed Articles only in the authorized Distribution Channels.  CLC and the Collegiate Institutions shall have the right to determine whether a particular retail account falls within a particular Distribution Channel.  Unless specified in Appendix D, Licensee shall have no right to advertise, distribute or sell licensed articles directly to consumers. 

(4)

Licensee must receive CLC’s prior written authorization to use any Distributor of any Licensed Article.  A “Distributor” shall mean any party whose business includes purchasing manufactured products from any other third party and shipping such products to retailers without changing such products.  Licensee will remain primarily obligated to CLC and the Collegiate Institutions under this Agreement notwithstanding CLC’s approval of a Distributor and Licensee shall ensure that nay approved Distributor complies with all applicable terms and conditions of the Agreement including, without limitation, providing such Distributor with instructions relating to the distribution of the Licensed Articles and the Distribution Channels for the Licensed Articles.  If an approved Distributor engages in conduct that would be a default under the Agreement if Licensee engaged in such conduct, Licensee shall be deemed in default and shall fully cooperate with CLC to ensure that such conduct ceases promptly.

3

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.

(5)

Licensee shall not provide any method of application of Licensed Indicia for any third party unless CLC authorizes Licensee to provide said application under the terms of an authorized manufacturer’s or supplier’s agreement.

(6)

Licensee shall not contract with any domestic or foreign third party for the production of Licensed Articles or application of Licensed Indicia by that party (“Manufacturer”) without CLC’s prior written authorization.  In the event that Licensee desires to have a Manufacturer producer one or more Licensed Article, or any component thereof, Licensee shall provide CLC with the name, address, telephone number and principal contact of the proposed Manufacturer.  CLC must approve any Manufacturer, and the Manufacturer must execute and authorized manufacturer’s or supplier’s agreement provided by CLC prior to use the Licensed Indicia.  In addition, Licensee shall take the steps necessary to ensure the following:  Manufacturer shall produce the Licensed Articles only as and when directed by Licensee, which remains fully responsible for ensuring that the Licensed Articles are manufactured in accordance with the terms herein including approval, labor code requirements and royalty payment; Manufacturer shall not advertise, distribute or sell Licensed Articles to any person or entity other than Licensee; and Manufacturer shall not delegate in any manner whatsoever its obligations with respect to the Licensed Articles.  Licensee’s failure to comply with this Section may result in termination of this Agreement and/or confiscation and seizure of Licensed Articles.  CLC and the individual Collegiate Institutions hereby reserve the right to terminate the engagement of any Manufacturer at any time.

(7)

Licensee shall comply, and ensure that all Manufacturers comply, with labor code and monitoring requirements as established by the respective Collegiate Institutions and as set forth in the Collegiate Licensing Company Special Agreement Regarding Labor Codes of Conduct, which is incorporated herein by reference.  CLC shall give Licensee reasonable written notice of any changes in labor code requirements.  Licensee, upon receipt of the notice, is responsible for complying with the new labor code requirements.

(8)

Any Licensed Articles manufactured at a location outside of the United States shall be taken into the possession of Licensee prior to being distributed or sold in the Territory.

(9)

Licensee shall have no right to delegate any responsibility to any Sublicensee of any Licensed Article without the prior written approval of CLC.  A “Sublicensee” shall mean any third party that manufactures any Licensed Article, ships such product to retailers, and invoices retailers directly. 

(10)

Licensee shall not use any of the Licensed Articles as Premiums unless Licensee receives prior written authorization through CLC pursuant to a separate agreement with CLC.  Licensee shall not provide Licensed Articles as premiums to any third party whom Licensee knows or should reasonably know intends to use the Licensed Articles as Premiums.

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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.

(11)

Licensee is not permitted, without the applicable Collegiate Institution’s prior written authorization, to promote or market a Licensed Article by means of a direct mailing or any other direct solicitation to a list of alumni, students, parents, athletic contributors, faculty or staff, or other group associated with the Collegiate Institution, regardless of how Licensee acquires such list.

(12)

The National Collegiate Athletic Association (NCAA) rules prohibit the use of the name or likeness of any person who has current or remaining collegiate athletic eligibility on or in connection with the sale or promotion of any commercial product or service.  In conducting activity under this Agreement, licensee shall not encourage or participate in any activity that would cause an athlete or a Collegiate Institution to violate any such rule of the NCAA or other governing body of any intercollegiate athletic conference.

3.  MARKETING EFFORTS / PERFORMANCE

(a)

Marketing Efforts:  Licensee recognizes that marketing efforts for Licensed Articles are important to the success of this program and Licensee, if requested, will assist CLC with such efforts by its participation.

(b)

Performance:  With respect to each of the Collegiate Institutions listed in Appendix A, Licensee shall manufacture, distribute, sell and maintain inventory of sufficient quantities of Licensed Articles to meet the reasonable market demand in the Distribution Channels.

4.  SELECTION OF COLLEGIATE INSTITUTIONS

Prior to execution of this Agreement, Licensee requested a license for certain Collegiate Institutions.  Appendix A lists those Collegiate Institutions that have approved Licensee’s request for a license.  Licensee may from time-to-time request the addition of Collegiate Institutions to this Agreement, as provided in Section 5(d).

5.  MODIFICATION OF APPENDICES

(a)

The Collegiate Institutions and their royalty charges listed in Appendix A, the Licensed Indicia shown in Appendix B, the Collegiate Institution policies including those in Appendix B-1, the Licensed Articles listed in Appendix C, the Authorized Brands and Distribution Channels indicated in Appendix D, and labor code requirements may be changed by CLC when and if such changes are directed by CLC and the Collegiate Institutions.

(b)

Through periodic advisory bulletins or notices, including, without limitation, notification through online publications (e.g., MyiCLC) or via email, CLC will give Licensee written reasonable notice of any changes to appendices or policies.  Licensee, upon receipt of the bulletins or notices, is responsible for distributing them promptly to the appropriate party(s) and complying with the modified appendices and policies.

(c)

Licensee recognizes and agrees that certain changes to appendices A,B, B-1, C, or D may affect Licensee’s right regarding certain Collegiate Institutions, Licensed Indicia, Licensed Articles, Authorized Brands or Distribution Channels.  Licensee agrees that such rights shall cease on the 

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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.

effective date of the notice of such changes, in accordance with the terms of the notice.  In such event, those provisions of Section 17 regarding disposal of inventory shall become effective for the affected Collegiate Institutions, Licensed Indicia, Licensed Articles, authorized Brands or Distribution Channels unless Licensee obtains written permission from the affected Collegiate Institutions concerned to continue to use the Licensed Indicia, or to manufacture, advertise, distribute or sell the Licensed Articles.

(d)

Upon notification by CLC of the addition of a Collegiate Institution to the CLC program, or at any other time, Licensee may request in writing or through MyiCLC the addition of Collegiate Institutions to the Agreement.  Any such addition will require an addendum to Appendix A.  Such addendum will be fully executed only upon Licensee’s completion of product and design approval requirements, as provided in Section 10.

6.  PAYMENTS

(a)

Rate:  Licensee agrees that it shall pay to CLC the applicable royalty charges set forth adjacent to the respective Collegiate Institutions listed in Appendix A.   Unless otherwise specified, the royalties paid (“Royalty Payments”) shall be based upon Net Sales, as defined in Section 1(g), of all Licensed Articles sold during the Term and any renewal, and during any period allowed pursuant to Section 17.

(b)

For purposes of determining the Royalty Payments, sales shall be deemed to have been made when Licensed Articles are billed, invoiced, shipped, or paid for, whichever occurs first.

(c)

Advance Payments:  Upon execution of this Agreement by Licensee, and on an annual basis, including renewal, Licensee shall pay CLC, as a nonrefundable payment, the Advance Payments set forth in Appendix A.  On an annual basis, including renewal, the Advance Payments will be prorated, where applicable, as per CLC’s written instructions.  Licensee may apply the Advance Payments as particular account is exempt.

7.  ROYALTY STATEMENT AND PENALTIES

(a)

On or before the twentieth (20th) day of each month, Licensee shall submit to CLC, in a format provided or approved by CLC, a full and complete statement, certified by an officer of the Licensee to be true and accurate, showing the quantity, description, and Net Sales (including itemization of any permitted deductions and/or exemptions) of the Licensed Articles distributed and /or sold during the preceding month, listed (d) by Collegiate Institution, (ii) by Licensed Article, (iii) by applicable Authorized Brand, and (iv) by Distribution Channel.  Such report shall include any additional information kept in the normal course of business by the Licensee which appropriate to enable an independent determination of the amount due hereunder with respect to each Collegiate Institution.  All Royalty Payments then due CLC shall be made simultaneously with the submission of the statements.  If no sales or use of the Licensed Articles were made during any reporting period for one or more Collegiate Institutions, Licensee shall provide CLC a written statement to that effect as part of the report.

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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.

(b)

Licensee shall pay CLC an additional charge of one and one-half percent (1.5%) per month, compounded on a monthly basis, or the maximum rate allowed by law, if lower, on any payment due under the Agreement that remains unpaid after such payment becomes due.

(c)

CLC’s receipt or acceptance of any statements or Royalty Payments, or the cashing of any royalty checks, shall not preclude CLC from questioning the correctness thereof at any time.  Upon discovery of any verifiable inconsistency or mistake in such statements or payments, Licensee shall immediately rectify such inconsistency or mistake.

(d)

Licensee shall,unless otherwise directed in writing by CLC, send all payments and statements to CLC at the address set forth in the heading of this Agreement, or transmit the same via electronic format approved by CLC.

8.  OWNERSHIP OF LICENSED INDICIA AND PROTECTION OF RIGHTS

(a)

Licensee acknowledges and agrees that the respective Collegiate Institutions own each of their respective Licensed Indicia, modifications of the Licensed Indicia, as well as any other Licensed Indicia adopted for use by the Collegiate Institutions, that each of the Licensed Indicia is valid, and that each Collegiate Institution has the exclusive right to use each of its Licensed Indicia subject only to limited permission granted to Licensee to use the Licensed Indicia pursuant to this Agreement.  Licensee acknowledges the validity of the state and federal registrations each Collegiate Institution owns, obtains or acquires for its Licensed Indicia.  Licensee shall not, at any time, file any trademark application with the United States Patent and Trademark Office, or with any other governmental entity for the Licensed Indicia, regardless of whether such Licensed Indicia is shown in Appendix B.  Licensee shall not use any of the Licensed Indicia or any similar mark as, or as part of, a trademark, service mark, trade name, fictitious name, company or corporate name anywhere in the world.  Any trademark or service mark registration obtained or applied for that contains the Licensed Indicia or any similar mark shall be immediately transferred to the applicable Collegiate Institution without compensation.

(b)

Licensee shall not oppose or seek to cancel or challenge, in any forum, including, but not limited to, the United States Patent and Trademark office, any application or registration of the Licensed Indicia of any Collegiate Institution.  Licensee shall not object to, or file any action or lawsuit because of, any use by the Collegiate Institutions of their Licensed Indicia for any goods or services, whether such use is by the Collegiate Institutions directly or through licensees or authorized users.

(c)

Licensee recognizes the great value of the good will associated with the Licensed Indicia and acknowledges that such good will belongs to the Collegiate Institutions, and that such Licensed Indicia have inherent and/or acquired distinctiveness.  Licensee shall not, during the term of this Agreement or thereafter, dispute or contest the property rights of the Collegiate Institutions, dispute or contest the validity of this Agreement, or use the Licensed Indicia or any similar mark in any manner other than as licensed hereunder.

(d)

Licensee agrees to assist CLC in the protection of the rights of the Collegiate Institutions in and to the Licensed Indicia and shall provide, at reasonable cost to be borne by CLC and/or the Collegiate Institutions, any evidence, documents, and testimony concerning the use by Licensee of the Licensed 

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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.

Indicia, which CLC may request for use in obtaining, defending, or enforcing rights in any Licensed Indicia or related applications or registrations.  Licensee shall notify CLC in writing of any infringements by others of the Licensed Indicia of which it is aware.  CLC and the applicable Collegiate Institution shall have the right to determine whether any action shall be taken on account of any such alleged infringements.  Licensee shall not institute any suit or take any action on account of any such alleged infringements without first obtaining the written authorization of CLC and the Collegiate Institutions.  Licensee agrees that it is not entitled to share in any proceeds received by CLC or any Collegiate Institution (by settlement or otherwise) in connection with any formal or informal action brought by CLC, Collegiate Institutions or other entity.

(e)

Nothing in this Agreement give Licensee any right, title, or interest in the Licensed Indicia except the right to use the Licensed Indicia in accordance with the terms of this Agreement.  Licensee’s use of the Licensed Indicia shall inure to the benefit of the respective Collegiate Institutions.

(f)

(1)  Acknowledgement:  Licensee acknowledges that any original designs, artwork or other compilations (“Works”) created by it pursuant to this Agreement that contain the Licensed Indicia are “compilations” or “supplementary works” as those terms are used in Section 101 of the Copyright Act, and that the Works will be, and will be treated as having been, specially ordered or commissioned for use as a compilation or supplementary work rendered for, at the instigation and under the overall direction of the Collegiate Institutions; and therefore that all the work on and contributions to the Works by Licensee, as well as the Works themselves, are and at all time shall be regarded as “work made for hire” by the Licensee for the Collegiate Institutions.  Without limiting the foregoing acknowledgment or subsequent assignment, Licensee further acknowledges that any rights that Licensee might have under this Agreement do not in any way dilute or affect the interests of the Collegiate Institutions in the Licensed Indicia or any derivatives thereof; nor permit Licensee to copy or use the Works or the Licensed Indicia, except as expressly permitted under this Agreement; nor to affix a copyright or trademark notice to any product bearing the Works or the Licensed Indicia, except as expressly permitted under this Agreement.

 

(2)  Assignment:  Without curtailing or limiting the foregoing acknowledgment, Licensee assigns, grants and delivers (and agrees further to assign, grant and deliver) exclusively to the respective Collegiate Institutions, all right, titles and interests of every kind and nature whatsoever in and to the Works, and all copies and versions, including all copyrights and all renewals.  Licensee further agrees execute and deliver to CLC and the Collegiate Institutions such other and further instruments and documents as CLC or the particular Collegiate Institutions from time-to-time reasonably may request for the purpose of establishing, evidencing and enforcing or defending the complete, exclusive, perpetual and worldwide ownership by such respective Collegiate Institutions of all right, titles and interests of every kind and nature whatsoever, including all copyrights, in and to the Works, and Licensee appoints CLC as agent and attorney-in-fact, with full power of substitution, to execute and deliver such documents or instruments as Licensee may fail or refuse promptly to execute and deliver, this power and agency being coupled with an interest and being irrevocable.

(g)

Licensee acknowledges that its breach or threatened breach of this Agreement will result in immediate and irremediable damage to CLC and/or the Collegiate Institutions and that money damages alone would be inadequate to compensate CLC and/or the Collegiate Institutions.  Therefore, in the event of a breach or threatened breach of the Agreement by Licensee, CLC and/or 

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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.

the Collegiate Institutions may, in addition to other remedies, immediately obtain and enforce injunctive relief prohibiting the breach or threatened breach or compelling specific performance.  In the event of any breach or threatened breach of this Agreement by Licensee or infringement of any rights of the Collegiate Institutions, if CLC and/or the Collegiate Institutions employ attorneys or incur other expenses, Licensee shall reimburse CLC and/or the Collegiate Institutions for their reasonable attorney’s fees and other expenses.

9.  DISPLAY AND APPROVAL OF LICENSED INDICIA

(a)

Licensee shall use the Licensed Indicia properly on all Licensed Articles, as well as labels, containers, packages, tags and display (collectively “Packaging”), and in all print and online advertisements and promotional literature, and television and radio commercials promoting Licensed Articles (collectively “Advertising Materials”).  On all visible Packaging and Advertising Materials, the Licensed Indicia shall be emphasized in relation to surrounding material by using a distinctive type face, color, underlining, or other technique approved by CLC and the Collegiate Institutions.  Any use of any Licensed Indicia shall conform to the requirements as specified in Appendix B. Wherever appropriate, the Licensed Indicia shall be used as a proper adjective, and the common noun for the product shall be used in conjunction with the Licensed Indicia.  The proper symbol to identify the Licensed Indicia as a trademark (i.e., the ® symbol if the Licensed Indicia is registered in the United States Patent and Trademark Office or the TM symbol if not so registered) and/or copyright legend (i.e., © [Date][Collegiate Institution]) shall be placed adjacent to each Licensed Indicia.  Except when otherwise expressly authorized in writing by CLC, Licensee shall not use on any one Licensed Article or it’s Packaging the Licensed Indicia of more than one Collegiate Institution.

(b)

CLC will provide to Licensee guidance on the proper use of the Licensed Indicia.  A true representation or example of any proposed use by Licensee of any of the Licensed Indicia listed, in any visible or audible medium, and all proposed Licensed Articles, Packaging and Advertising Materials containing or referring to any Licensed Indicia, shall be submitted at Licensee’s expense to CLC for written approval prior to such use, as provided in Section 10.  Licensee shall not use any Licensed Indicia in any form or in any material disapproved or not approved by CLC.

(c)

Licensee shall display on each Licensed Article or its Packaging and Advertising Materials the trademark and license notices required by CLC’s written instructions n effect as of the date of manufacture.

10.  PROCEDURE FOR APPROVAL

 

(a)

Licensee understands and agrees that it is an essential condition of this Agreement to protect the standards and good reputations of the Collegiate Institutions, and agrees that the Licensed Articles, Packaging, Advertising Materials and /or designs containing the Licensed Indicia shall be of high and consistent quality, subject to the prior written approval and continuing supervision and control of CLC and the Collegiate Institutions.  Licensee shall submit all Licensed Articles, Packaging, Advertising Materials and/or designs containing the Licensed Indicia to CLC in a timely fashion to ensure that CLC and the Collegiate Institutions have adequate time to review such materials prior to 

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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.

the date of their proposed use by Licensee, and Licensee must receive prior written quality control approval by CLC as provided herein.

(b)

Prior to the manufacture, use, distribution or sale of any Licensed Article, Packaging, Advertising Materials and /or designs containing the Licensed Indicia, Licensee shall submit to CLC for approval, at Licensee’s expense and in the format required by CLC, at least one sample of each proposed Licensed Article, Packaging, Advertising Materials and/or design for each Collegiate Institution and one sample for CLC as the same would be manufactured, used, distributed or sold.  If CLC approves in writing or via MyiCLC the proposed Licensed Article, Packaging, Advertising Materials and/or design, the same shall be accepted to serve as an example of quality for that Licensed Article, Packaging, Advertising Materials and/or design, the same shall be accepted to serve as an example of quality for that Licensed Article, Packaging, Advertising Materials and/or design, and production quantities may be manufactured by Licensee in strict conformity with the approved sample.  All approvals provided herein are effective only for the Term or renewal period in which Licensee has submitted and CLC has approved the Licensed Articles, packaging, Advertising Materials and/or designs, unless Licensee is otherwise notified in writing by CLC.  Licensee shall not depart from the approved quality standards in any material respect without the prior written approval of CLC.   Licensed Articles, Packaging, Advertising Materials and/or designs not meeting those standards, including seconds, irregulars, etc., shall not be distributed or sold under any circumstances without CLC’s prior written authorization.

(c)

Licensee may only use the Licensed Indicia as shown in Appendix B and approved in the manner set forth herein.  Licensee may not modify the Licensed Indicia without the prior written approval of CLC as provided in Section 10(b) above.  The use of the Licensed Indicia in conjunction with original artwork supplied by the Licensee requires the express approval of CLC as provided in Section 10(b) above.  Licensee may submit sketches of proposed artwork for preliminary approval before submitting finished samples.

(d)

The descriptions of the Licensed Articles are set out in Appendix C.  Licensee agrees to adhere strictly to the description of each Licensed Article.

(e)

At time of renewal, or upon request by CLC at any other time, in addition to any other requirement, Licensee shall submit to CLC such number of each Licensed Article, Packaging, Advertising Materials and/or design manufactured, used, distributed or sold under the Licensed Indicia as may be necessary for CLC to examine and test to assure compliance with the quality and standards for Licensed Articles, packaging, Advertising Materials and/or designs approved herein.  Each item shall be shipped in its usual container or wrapper, together with all labels, tags, and other materials usually accompanying the item.  Licensee shall bear the expense of manufacturing and shipping the required number of Licensed Articles, Packaging, Advertising Materials and/or designs to the destination(s) designated by CLC.

(f)

If CLC notifies Licensee of any defect in any Licensed Article, Packaging, Advertising Materials and/or designs or of any deviation from the approved use of any of the Licensed Indicia, Licensee shall have fifteen (15) days from the date of notification from CLC to correct every noted defect or deviation.  Defective Licensed Articles, Packaging, Advertising Materials and/or designs in Licensee’s inventory shall not be used, distributed or sold and shall, upon request by CLC, be 

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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.

immediately recalled from the marketplace and destroyed or submitted to CLC, at CLC’s option and at Licensee’s expense.  However, if it is possible to correct all defects in the Licensed Articles, Packaging, Advertising Materials and/or designs in Licensee’s inventory, said items may be distributed or sold after all defects are corrected to the satisfaction of CLC, which shall be indicated in writing.  CLC and/or its authorized representatives shall have the right at reasonable times without notice to inspect Licensee’s plants, warehouses, storage facilities and operations related to the production of Licensed Articles.

(g)

Licensee shall comply with all applicable laws, regulations, standards and procedures relating or pertaining to the manufacture, use, advertising, distribution or sale of the Licensed Articles.  Licensee shall comply with the requirements, including reporting requirements, of any regulatory agencies (including, without limitation, the United States Consumer Product Safety Commission, Federal Trade Commission, or Food and Drug Administration) which shall have jurisdiction over the Licensed Articles.  Both before and after Licensed Articles are put o the market, Licensee shall follow reasonable and proper for testing Licensed Articles for compliance with laws, regulations, standards and procedures, and shall permit CLC and/or its authorized representatives, upon reasonable notice, to inspect its and its Manufacturer’s testing, manufacturing and quality control records, procedures and facilities and to test or sample Licensed Articles for compliance with this Section.  Licensed Articles found by CLC at any time not to comply with applicable laws, regulations, standards and procedures shall be deemed disapproved, even if previously approved by CLC, and shall not be shipped and/or shall be subject to recall unless and until Licensee can demonstrate to CLC’s satisfaction that such Licensed Articles have been brought into full compliance.

(h)

Licensee shall inform CLC in writing of any complaint regarding the Licensed Articles promptly upon Licensee’s receipt of such complaint.

(i)

Any unauthorized or unapproved use by Licensee of any Licensed Indicia of any Collegiate Institution shall constitute grounds for immediate termination of this Agreement and also may result in action against Licensee for trademark infringement and/or unfair competition, other applicable claims, and collection of monetary damages.

11.  DISPLAY OF OFFICIAL LABEL

(a)

Licensee shall, prior to advertising, distribution or sale of any Licensed Article, affix to each Licensed Article, it Packaging and Advertising Materials an “Officially Licensed Collegiate Products” tag or label in the form prescribed by CLC (“Official Label”).  In addition, Licensee shall affix Licensee’s Authorized Brand(s) to each Licensed Article, its Packaging and Advertising Materials.  It is acceptable for Licensee’s Authorized Brands(s) to appear on the Official Label subject to prior written approval b CLC.  Licensee shall obtain Official Labels from the supplier(s) authorized by CLC to provide those labels.

(b)

Licensee is responsible for affixing the Official label to each Licensed Article, its Packaging and Advertising Materials.  Licensee shall not provide Official Labels to any third party for any purpose whatsoever, without prior written approval by CLC.

 

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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.

(c)

Licensee agrees to defend, indemnify and hold harmless CLC, the Collegiate Institutions, and those Indemnified parties set forth in Section 14(a) from all liability claims, costs or damages, including, but not limited to any liability for the conversion or seizure of any of the Licensed Articles not containing the Official Label and/or Licensee’s Authorized Brand(s) as required by this Section.  This provision is in addition to and in no way limits Section 14.

 

(d)

Licensee’s purchase and use of the Official Label is contingent upon the Licensee maintaining its rights under this Agreement.  Upon termination or expiration of this Agreement, subject to those provisions of Section 17 regarding disposal of inventory, Licensee must return all Official Labels to CLC for destruction.  Licensee agrees that there will be no financial reimbursement to the Licensee by CLC, its agents, employees, or business partners for any unused Official Labels.

12.  NO JOINT VENTURE OR ENDORSEMENT OF LICENSEE

Nothing in this Agreement shall be construed to place the parties in the relationship of partners, joint ventures or agents, and Licensee shall have no power to obligate or bind CLC or any Collegiate Institution in any manner whatsoever.  Neither CLC nor any Collegiate Institution is in any way a guarantor of the quality of any product produced by Licensee.  Licensee shall neither state nr imply, directly or indirectly, that the Licensee or its activities, other than under this license, are supported, endorsed or sponsored by CLC or by any Collegiate Institution and, upon the direction of CLC, shall issue express disclaimers to that effect.

13.  REPRESENTATIONS

Licensee represents, warrants and agrees that the Licensed Articles, Packaging, Advertising Materials and/or designs shall (i) be of good quality in design, material and workmanship and suitable for their intended purpose, (ii) not cause harm when used with ordinary care, and (iii) not infringe or violate the rights of any third party.  Licensee further represents, warrants and agrees that all work on and contribution to the Works shall be by bona fide “employees” of Licensee working “within the scope of employment” as those terms are used in 17 U.S.C. § 101, et. seq.  Each party represents and warrants that it has the right and authority to enter into and perform under this Agreement.

14.  INDEMNIFICATION AND INSURANCE

(a)

Licensee is solely responsible for, and will defend, indemnify and hold harmless CLC, the Collegiate Institutions, and their respective officers, agents, and employees (collectively “Indemnified Parties”) from any claims, demands, causes of actions or damages, including reasonable attorney’s fees, arising out of (i) any unauthorized use of or infringement of any patent, copyright, trademark or other proprietary right of a third party by Licensee in connection with the Licensed Articles, packaging, Advertising Materials and/or designs covered by this Agreement, (ii) defects or alleged defects or deficiencies in said Licensed Articles, Packaging, Advertising Materials and/or designs or the use thereof, (iii) false advertising, fraud, misrepresentation or other claims related to the Licensed Articles, Packaging, Advertising Materials and/or designs not involving a claim of right to the Licensed Indicia, (iv) the unauthorized use of the Licensed Indicia or any breach or alleged breach by Licensee of any of its representations, warranties, covenants or obligations contained in the Agreement, (v) libel or slander against or invasion of the right of privacy, publicity or property of, or violation or misappropriation of any other right of any third party, and/or (vi) agreements or 

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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.

alleged agreements made or entered into by Licensee to effectuate the terms of this Agreement.  The indemnifications hereunder shall survive the expiration or termination of this Agreement.

(b)

Prior to the first sale or distribution of any Licensed Article, or use of the Licensed Indicia, Licensee shall obtain from an insurance carrier having a rating of at least A-7 by the A.M. Best & Co. or other rating satisfactory to CLC, and thereafter maintain, Commercial General Liability insurance, including product, advertising and contractual liability insurance. Licensee’s insurance coverage shall provide adequate protections for the Indemnified Parties as additional insured parties on Licensee’s policy against any claims, demands, or causes of action and damages, including reasonable attorney’s fees, arising out of any of the circumstances described in Section 14(a) above. Such insurance policy shall not be canceled or materially changed in form without at least thirty (3) days written notice to CLC.  Prior to the first sale or distribution of any Licensed Article, or use of the Licensed Indicia, Licensee shall furnish CLC a certificate of such insurance and endorsements in the form prescribed by CLC.  Licensee agrees that such insurance policy or policies shall provide coverage of one million dollars ($1,000,000) for personal and advertising injury, bodily injury and property damage arising out of corrective action that Licensee will be required to take for such failure to perform or breach commensurate with the scope and history of Licensee’s past performance.  Such action may include, without limitation, requiring Licensee to adopt remedial accounting and reporting measures; requiring Licensee to conduct an internal audit; requiring Licensee to train its personnel or permitting CLC to assist therein at Licensee’s expense; and requiring Licensee to discontinue the manufacture, advertising, distribution and sale of certain products bearing the Licensed Indicia. Additionally, in the event any default by Licensee results in damages to CLC or the Collegiate Institutions in an amount that would be difficult or impossible to ascertain (including, without limitation, sales of products bearing the Licensed Indicia that have not been approved pursuant to Section 10, ales of Licensed Articles without labeling as required in Section 11, etc.), then CLC and the Collegiate Institutions shall be entitled to receive compensation for damages in an amount to be determined by CLC in consultation with the Collegiate Institutions.  The amount of such compensation payable pursuant to this provision shall not be less than an amount equivalent to the greater of the Advance Payment or $100, per occurrence, for each affected Collegiate Institution; provided, however, that nothing contained herein shall limit CLC’s or the Collegiate Institution’s rights under this Agreement, in law, in equity or otherwise, including, without limitation, the amount of damages CLC or the Collegiate Institutions may be entitled to.  If damages are assessed against the Licensee pursuant to this provision, then Licensee’s ability to continue to operate under this Agreement shall be contingent upon payment of such damages in the time allowed CLC and the Collegiate Institutions.

(c)

In addition to the right to require corrective action for default as set forth in Section 16(a), CLC and the individual Collegiate Institutions shall have the right to terminate this Agreement without prejudice to any other rights under this Agreement, in law, in equity or otherwise, upon written notice to Licensee at any time should any of the following occur, which shall also be deemed defaults under the Agreement:

a.

Licensee has not begun the bona fide manufacture, distribution, and sale of Licensed Articles within one (1) month of the date of approval of the samples of Licensed Articles.

b.

Licensee fails to continue the bona fide manufacture, distribution, and sale of Licensed Articles during the Term.  If, during any calendar quarter of the Term, Licensee fails to see any of the Licensed Articles or fails to see any Licensed Articles for a particular Collegiate 

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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.

Institution, CLC may terminate this Agreement with respect to said Licensed Article or Collegiate Institution.

c.

Licensee fails to make any payment due or fails to deliver any required statement.

d.

The amounts stated in the periodic statements furnished pursuant to Section 7 are significantly or consistently understated.

e.

Licensee fails to generate royalties during the Term or any annual period, including renewal period, that meet or exceed the amount of the Advance Payments and Minimum Guarantee amounts as provided in Section 6 and Appendix A.

f.

Licensee fails to make available its premises, records or other business information for any audit or to resolve any issue raised in connection with any audit, as required in Section 15.

g.

Licensee fails to pay its liabilities when due, or makes any assignment for the benefit of creditors, or files any petition under federal or state bankruptcy statue, or is adjudicated corrective action that Licensee will be required to take for such failure to perform or breach commensurate with the scope and history of Licensee’s past performance.  Such action may include, with limitation, requiring Licensee to adopt remedial accounting and reporting measure; requiring Licensee to conduct an internal audit; requiring Licensee to train its personnel or permitting CLC to assist therein at License’s expense; and requiring Licensee to discontinue the manufacture, advertising, distribution and sale of certain products bearing the Licensed Indicia.  Additionally, in the even any default by Licensee results in damages to CLC or the Collegiate Institutions in an amount that would be difficult or impossible to ascertain (including, without limitation, sales of products bearing the Licensed Indicia that have not been approved pursuant to Section 10, sales of Licensed Articles without labeling as required in Section 11, etc.), then CLC and the Collegiate Institutions shall be entitled to receive compensation for damages in an amount to be determined by CLC in consultation with the Collegiate Institutions.  The amount of such compensation payable pursuant to this provision shall not be less than an amount equivalent to the greater of the Advance Payment or $100, per occurrence, for each affected Collegiate Institution; provided, however, that nothing contained herein shall limit CLC’s or the Collegiate Institutions’ rights under this Agreement, in law, in equity or otherwise, including, without limitation, the amount of damages CLC or the Collegiate Institutions may be entitled to.  If damages are assessed against the Licensee pursuant to this provision, then License’s ability to continue to operate under this Agreement shall be contingent upon payment of such damages in the time allowed by CLC and the Collegiate Institutions.

(d)

In addition to the right to require corrective action for default as set forth in Section 16(s), CLC and the individual Collegiate Institutions shall have the right to terminate this Agreement without prejudice to any other rights under this Agreement, in law, in equity or otherwise, upon written notice to Licensee at any time should any of the following occur, which shall also be deemed defaults under the Agreement:

a.

Licensee has not begun the bona fide manufacture, distribution, and sale of Licensed Articles with one (1) month of the date of approval of the samples of Licensed Articles.  

b.

Licensee fails to continue the bona fide manufacture, distribution, and sales of Licensed Articles during the Term.  If, during any calendar quarter of the Term, Licensee fails to sell any of the Licensed Articles or fails to sell any Licensed Articles for a particular Collegiate 

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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.

Institution, CLC may terminate this Agreement with respect to said Licensed Article or Collegiate Institution.

c.

Licensee fails to make any payment due or fails to deliver any required statement.

d.

The amounts stated in the periodic statements furnished pursuant to Section 7 are significantly or consistently understated.

e.

Licensee fails to generate royalties during the Term or any annual period, including renewal period, that meet or exceed the amount of the Advance Payments and Minimum Guarantee amounts as provided in Section 6 and Appendix A.

f.

Licensee fails to make available its premises, records or other business information for any audit or to resolve any issue raised in connection with any audit, as required in Section 15.

g.

Licensee fails to pay its liabilities when due, or makes any assignment for the benefit of creditors, or files any petition under any federal or state bankruptcy statute, or is adjudicated bankrupt or insolvent, or if any receiver is appointed for its business or property, or if any trustee in bankruptcy shall be appointed under the laws of the United States government or the several states.

h.

Licensee attempts to grant or grants a sublicense or attempts to assign or assigns any right or duty under this Agreement to any person or entity without the prior written authorization of CLC.

i.

Licensee distributes or sells any Licensed Articles outside the authorized Distribution Channels for such Licensed Articles, or distributes or sells any Licensed Articles to any third party that Licensee knows or should reasonably know intends to distribute or sell such Licensed Articles outside the authorized Distribution Channels for such Licensed Articles.

j.

Licensee distributes or sells any Licensed Articles outside the Territory or distributes or sells any Licensed Articles to a third party that Licensee knows or should reasonably know intends to distribute or sell such Licensed Articles outside the Territory.

k.

If an entity acquires in a single transaction or through a series of transactions more than fifty percent (50%) ownership or controlling interest in Licensee.

l.

Licensee or any related entity manufactures, distributes or sells any product infringing or diluting the trademark, property or any other right of any Collegiate Institution or any other party.

m.

Licensee fails to deliver to CLC and maintain in full force and effect the insurance referred to in Section 14(b).

n.

CLC, a Collegiate Institution, or any governmental agency or court of competent jurisdiction finds that the Licensed Articles are defective in any way, manner or form.

o.

Any monitoring agency authorized by a Collegiate Institution determines that Licensee is in violation of the labor code adopted by that Collegiate Institution, and Licensee fails to effectively remediate said violation for that Collegiate Institution within a period that is reasonable with respect to the nature and extent of the violation.

p.

Licensee commits any act or omission that damages or reflects unfavorably, embarrasses or otherwise detracts from the good reputation of any Collegiate Institution.

q.

Licensee manufactures, distributes or sells Licensed Articles of quality lower than the samples approved, or manufactures, distributes, sells or uses Licensed Articles or Licensed Indicia in a manner not approved or disapproved by CLC.

r.

Licensee fails to affix to each Licensed Article, its Packaging and Advertising Materials an Official Label and Authorized Brand in the manner provided in Section 11.

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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.

s.

Licensee commits a default under any other provision of this Agreement, and fails to cure such default within fifteen (15) days of written notice from CLC.

t.

CLC shall have the right to terminate this Agreement upon written notice to Licensee without cause with respect to a particular Collegiate Institution in the event that said Collegiate Institution directs CLC to terminate this Agreement on an annual basis or otherwise.  This termination shall be without prejudice to any other rights CLC may have, whether under the provisions of this Agreement, in law, in equity or otherwise.

(e)

The entire unpaid balance of all Royalty Payments and other amounts owing and due under this Agreement shall immediately become due and payable upon termination.

17.  EFFECT OF EXPIRATIN OR TERMINATION; DISPOSAL OF INVENTORY

(a)

Effect of Expiration or Termination: After expiration or termination of this Agreement for any reason, Licensee shall immediately discontinue the manufacture, advertising, use, distribution and sale of all Licensed Articles, Packaging and Advertising Materials, the use of all Licensed Indicia, and all similar marks, except as provided in Section 17(b), or unless expressly authorized in writing by CLC or the applicable Collegiate Institution.  Until payment to CLC of any monies due it, CLC shall have a lien on any units of Licensed Articles not then disposed of by Licensee and on any monies due Licensee from any jobber, wholesaler, distributor, or other third parties with respect to sales of Licensed Articles.

(b)

Disposal of Inventory:  After expiration or termination of this Agreement for any reason, Licensee shall have no further right to manufacture, advertise, use, distribute or sell Licensed Articles, Packaging or Advertising Materials utilizing the Licensed Indicia, but may continue to distribute its remaining inventory of Licensed Articles in existence at the time of expiration or termination for a period of sixty (6) days; provided, however, that Licensee has delivered all statements (including Final Statement) and payments then due, that during the disposal period Licensee shall deliver all statements and payments due in accordance with Section 7, that Licensed Articles are sold at Licensee’s regular Net Sales price and within the Distribution Channels, and that Licensee shall comply with all other terms and conditions of this Agreement.  Notwithstanding the foregoing, Licensee shall not manufacture, advertise, use, distribute, or sell any Licensed Articles, Packaging or Advertising Materials after the expiration or termination of this Agreement because of: (i) departure of Licensee from the quality an style approved by CLC under this Agreement, (ii) failure of Licensee to obtain product or design approval, or (ii) a default under Section 16.

18. FINAL STATEMENT

Upon expiration or termination of this Agreement for any reason, or at any other time upon request by CLC or the Collegiate Institutions Licensee shall furnish to CLC at statement showing the number and description of Licensed Articles on hand or in process.  Following such expiration or termination, including inventory disposal period, if allowed, CLC may request Licensee to either (i) surrender unsold Licensed Articles, Packaging and Advertising Materials, as well as dies, molds and screens used to manufacture such Licensed Articles and Packaging, or (ii) destroy all such remaining unsold materials certifying their destruction to CLC and specifying the number of each destroyed.  CLC and/or its authorized representatives reserve the right to conduct physical inventories to ascertain or verify Licensee’s compliance with the foregoing.

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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.

19.  SURVIVAL OF RIGHTS

The terms and conditions of this Agreement necessary to protect the rights and interests of CLC and the Collegiate Institutions, including, without limitation, Licensee’s obligations under Sections 8, 13, 14, and 15, shall survive the termination or expiration of this Agreement.  The terms and conditions of this Agreement providing for any other activity following the effective date of termination or expiration of this Agreement shall survive until such time as those terms and conditions have bee fulfilled or satisfied.

20. NOTICES

All notices and statements to be given and all payments to be made, shall be given or made to the parties at their respective addresses set forth herein, unless notification of a change of address is given in writing.  Unless otherwise provided in the Agreement, all notices shall be sent be certified mail, return receipt requested; facsimile, the receipt of which is confirmed by confirmation document; email, confirmed by email receipt confirmation notice; or nationally recognized delivery service that provides evidence of delivery, and shall be deemed to have been given at the time they are sent.

21.  CONFORMITY TO LAW AND POLICY

(a)

Licensee shall comply with such guidelines, policies, and requirements as CLC may give written notice from time-to-time including, without limitation, guidelines, policies and/or requirements contained in periodic CLC bulletins or notices.

(b)

Licensee undertakes and agrees to obtain and maintain all applicable permits and licenses at Licensee’s expense.

(c)

Licensee shall pay all federal, state and local taxes due on or by reason for the manufacture, distribution or sale of the Licensed Articles.

22.  SEVERABILITY

The determination that any provision of this Agreement is invalid or unenforceable shall not invalidate this Agreement, and the remainder of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

23.  NON-ASSIGNABILITY

This Agreement is personal to Licensee. Neither this Agreement nor any of Licensee’s rights shall be sold, transferred or assigned by Licensee without CLC’s prior written approval, and no rights shall devolve by operation of law or otherwise un any assignee, receiver, liquidator, trustee or other party.  Subject to the foregoing, this Agreement shall be binding upon any approved assignee or successor of Licensee and shall inure to the benefit of CLC, its successors and assigns.

24.  ENTIRE AGREEMENT / NO WAIVER

Unless otherwise specified herein, this Agreement or any renewal, including appendices,  constitutes the entire agreement and understanding between the parties and cancels, terminates, and supersedes any prior agreement 

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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.

or understanding, written or oral, relating to the subject matter hereof  between Licensee, CLC and the Collegiate Institutions.  There are no representations, promises, agreements, warranties, covenants or understandings other than those contained herein.  None of the provisions of this Agreement may be waived or modified, except expressly in writing signed by both parties. However, failure of either party to require the performance of any term in this Agreement or the waiver by either party of any breach shall not prevent subsequent enforcement of such term nor be deemed a waiver of any subsequent breach.

25.   COLLECIATE INSTITUTIO RIGHT TO ENFORCE

Each Collegiate Institution is entitled to enforce its rights in the licensed Indicia and the terms of this Agreement directly against the Licensee; and each Collegiate Institution is entitled to all the rights and remedies available under this Agreement.

26.  MISCELLANEOUS

When necessary for appropriate meaning, a plural shall be deemed to be the singular and singular shall be deemed to be the plural.   The attached appendices are an integral part of this Agreement.  Section headings are for convenience only and shall not add to or detract from any of the terms or provisions of this Agreement.  This Agreement shall be governed by and construed in accordance with the laws of the state Georgia, which shall be the sole jurisdiction for any disputes.  This Agreement shall not be binding on CLC until signed by CLC as agent on behalf of the Collegiate Institutions.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed effective as of the last date of signature below.

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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.

Appendix  A

Eternal Image Inc.

[*****]

______________________________________________________________________________________For Internal Use Only

Account #67903   Check#__________  Date _________   Amount ___________  Class _____________

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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.

Appendix  C

Eternal Image Inc.

Licensed Article                                                    Specifications (materials, content, other pertinent information)

Memorial Product / 03B-4   (Caskets, Urns, Vaults)

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