Document:

KATHY HILTON LICENSE
AGREEMENT

    

             This
LICENSE AGREEMENT ("Agreement") is made and effective as of the 13th  day
of October, 2006 (“Effective Date”), by and between KRH Licensing Company, LLC., a
newly formed California corporation with an office and place of business at 250
North Canon Drive, 2nd Floor,
Beverly Hills, California 90210 (collectively, "Licensor"), and OmniReliant Corp., a Florida
corporation with an office and principal place of business at 4902 Eisenhower
Blvd., Suite 185 Tampa, Florida 33634 ("Licensee") (together the
"Parties").

    

    W
I T N E S S E T H :

    

    WHEREAS, Richard Hilton is the
worldwide owner of the KATHY HILTON trademark and all variations and
combinations thereof, including various U.S. Trademark Registrations therefore,
including Reg. No. 2,884,868 in International Class 24 for bed linens, et. seq.;
Reg. No. 2,882,681 in International Class 20 for furniture; and, Reg. No.
3,018,255 in International Class 14 for jewelry (collectively, the “Licensed
Mark” or “Licensed Marks”); and,

    

    WHEREAS, pursuant to a master
license agreement, Richard Hilton has granted all worldwide rights to the
Licensed Marks to the Licensor herein; and,

    

    WHEREAS, Licensee is a newly
incorporated Florida corporation specifically formed to develop the Licensed
Marks with the intent of manufacturing, promoting and selling Licensed Products
(as hereinafter defined), and Licensor
further desires to obtain the personal services of Ms. Kathy Hilton pursuant to
the terms of this Agreement in connection with the formulation and manufacture
as well as the promotion and sale of the Licensed Products; and

    

    WHEREAS, Licensor is willing
to grant the license contained in this Agreement and (the “License”) Licensee
desires to obtain from Licensor, the exclusive right and license to use the
Licensed Marks in the Territory (as hereinafter defined) in connection with the
manufacture, promotion, distribution and sale of Licensed Products.

    

    NOW, THEREFORE, in
consideration of the premises and mutual agreements contained herein, the
parties hereto covenant and agree as follows:

    

    ARTICLE
1

    

    Definitions: The following
definitions shall apply:

    

    A.           Territory. All countries of
the world and all duty-free-shops, ships, airplanes, military bases and
diplomatic missions of every country of the world, including, but not limited
to, retail, wholesale, the world-wide web, radio, multi-level marketing,
newspapers, magazines, direct response, infomercials, television shopping networks and any other
channel of distribution and sale approved in writing by Licensor, which approval
shall not be unreasonably withheld, conditioned or delayed.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    B.           Licensed Products. All
products comprising goods within the scope of the description of International
Class 3 as defined in the records of the United States Patent and Trademark
Office, namely: Men's and Women's skincare products, fragrances, cosmetics and
related personal care products such as body lotion, body cream, body mist, hand
cream, bath and shower gel, massage oil, dusting powder, after shave, after
shave balm or gel, deodorant stick and bath soap, and home/environmental
products such as candles, potpourri and incense bearing the Licensed
Marks.   Notwithstanding the foregoing, in the event that
Licensee does not develop and begin the marketing of a fragrance under the
Licensed Marks with 18 months of the Effective Date, Licensee shall forfeit the
rights for fragrance (deleting such category from this definition of Licensed
Products) and Licensor shall be free to develop itself or license a third-party
to use the Licensed Marks for a fragrance.

    

    C.           Licensed Mark or Licensed Marks. The trademark
KATHY HILTON and such other trademarks as are, from time to time, agreed to by
Licensor. At Licensor’s cost, Licensor has or will file to register the Licensed
Mark in the United States Patent and Trademark Office in International Class 3
for: Men's and Women's skincare products, fragrances, cosmetics and related
personal care products such as body lotion, body cream, body mist, hand cream,
bath and shower gel, massage oil, dusting powder, after shave, after shave balm
or gel, deodorant stick and bath soap, and home/environmental products such as
candles, potpourri and incense.

    

    D.           Net Sales. The arms-length
sales price at which Licensee or any Subsidiary or Affiliate (as hereinafter
defined) bills its Non-Subsidiary or Affiliate customers for Licensed Products
(or ultimate consumers in the case of infomercial sales) less: (i) all returns
of damaged, defective or other merchandise, actual trade and cash discounts and
allowances provided to customers, and taxes directly applicable to the sale of
Licensed Products to such customers (such as sales, use, excise, value added or
similar taxes); (ii) as actually incurred and reserved for; (ii) actual charges
and reserves for all freight and shipping and handling charges, credit card
fees, refunds, credits, insurance costs, duties and other governmental charges
paid by the Licensee in connection with such sales to customers to the extent
such expenses are stated separately on any invoice; (iii) all receipts from the
sale of Licensed Products sold to bone fide customers at a cost
below Licensee’s landed duty paid cost (or the equivalent of such pricing) for
such Licensed Products (“Below Cost Sales”) but only to the extent that
the aggregate gross sales of Below Cost
Sales in any
Annual Period (as hereinafter defined) do not exceed fifteen percent (15%) of
total gross sales for such Annual
Period; and, (iv) all of Licensee’s actual out-of-pocket expenses for
samples, displays, brochures, gift-with-purchase goods and promotional materials
and packaging supplies actually supplied to Licensee’s customers (but not
including Licensee’s expenditures for any advertising of Licensed Products).
Notwithstanding the terms of sub-section (iii) above, Licensee shall not be
excused from paying royalties on sales of Licensed Products above the 15% level
and on sales that are not Below Cost Sales.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    The
reserve for shipping and handling charges, credit card fees, refunds, credits or
other actual trade and cash discounts and uncollectibles shall initially be 10%
of Net Sales and shall be adjusted (and liquidated, if applicable) periodically
based on actual experience.

    

    E.           Subsidiary. Any corporation or
other entity which is 100% directly or indirectly owned by
Licensee.

    

    F.           Affiliate. Any corporation or
other entity which is at least 50% owned by Licensee.

    

    G.           Annual Period.  A 12
month period of time from January 1st of a
given year through December 31st of the
same year, except the first Annual Period herein shall run from the Effective
Date through December 31, 2007.

    

    ARTICLE
2

    Grant of License
Rights

    

    Upon the
terms and conditions of this Agreement, Licensor hereby grants to Licensee,
during the term of this Agreement, the sole and exclusive right and license to
use the Licensed Mark in the Territory as a trademark in connection with the
development, manufacture, promotion, advertising, distribution and sale of
Licensed Products and on all brand identification materials, such as product
packing, containers, promotional and sale materials, publicity materials, and in
all advertising media, such as newspapers, magazines, radio, television,
infomercials, live television shopping, the world-wide web, cinema and similar
media both presently existing or developed in the future.  Sales of
Licensed Products shall only be through any or all the channels of trade
described in Article 1, paragraph A, but shall not include mass marketing stores
such as Target, Walmart, K-Mart, Sam’s Club, Costco and Dollar
General.  Except as specified in Section 1(B) above, during the term
of this Agreement and any extensions thereof, Licensor shall not grant any
rights to any third party in connection with the Licensed Products for the
Licensed Marks or any derivative thereof without Licensee’s
approval.

    

    ARTICLE
3

    Exclusivity of
License

    

    Licensee
shall have exclusive rights to all of the licensed products described in Article
1, paragraph B, above. All rights not specifically granted to Licensee herein
shall be reserved for Licensor, such that Licensor may use or grant others the
right to use the Licensed Marks on or in connection with goods of all other
types and descriptions in the Territory other than Licensed Products. Licensor
further acknowledges and consents to Licensee obtaining other additional
licenses for the manufacture and/or distribution of products similar to the
Licensed Products during the term of this Agreement. Licensee, will not, during
the term of this Agreement and thereafter, attack either Licensor's title in and
to the Licensed Marks or the validity of this License.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    ARTICLE
4

    

    Term of
Agreement

    

    Subject
to the rights of termination set forth in this Agreement, the initial term of
this Agreement shall commence on the Effective Date and terminate on December
31, 2011 (the "Initial Term"). Licensee shall have the option to renew this
Agreement for an additional five-year period (through December 31, 2016) as long
as the Minimum Royalties (as hereinafter defined) for the Initial Term have been
fully paid. Licensee shall notify Licensor of its intent to either renew or not
renew no later than December 31, 2010.  Following the expiration of
the first renewal term on December 31, 2016, the Agreement shall renew pursuant
to the provisions of Article 8 below.  The Initial Term and all
permitted extensions thereof shall be collectively defined as the
“Term”.

    

    ARTICLE
5

    

    Confidentiality

    

    The
Parties acknowledge that all information relating to the business and operations
of Licensor and Licensee which they learn or have learned during or prior to the
Term of this Agreement is confidential. The Parties acknowledge the need to
preserve the confidentiality and secrecy of such information and agree that,
both during the Term of this Agreement and after the expiration or termination
hereof, they shall not use or disclose same, and shall take all necessary steps
to preserve in all respects such confidentiality and secrecy. The provisions of
this Section shall not apply with respect to any information which has entered
the public domain through no fault of the Parties. The provisions of this
Section shall survive the expiration or termination of this
Agreement.

    

    ARTICLE
6

    

    Duties of
Licensee

    

    A.           Commercially Reasonable
Efforts. During the Term of this Agreement, Licensee will use its
commercially reasonable efforts to exploit the rights granted herein throughout
the Territory and to sell the maximum quantity of Licensed Products therein
consistent with the standards
and prestige represented by the Licensed Mark.

    

    B.           Design and Sample
making. Licensor shall not be responsible for the production, design or
sample making of the Licensed Products and Licensee shall bear all costs related
thereto.

    
      
         

      

      
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    ARTICLE
7

    

    Quality
Standards

    

    A.           Manufacture of Licensed
Products; Quality Control.

    

    
      	
               
      

            	
              (i)

            	
              The
      contents and workmanship of Licensed Products shall be at all times of
      the  quality consistent with the reputation, image and prestige
      of the Licensed Marks and Licensed Products shall be distributed and sold
      with packaging and sales promotional materials appropriate for such
      quality products. The parties agree that the Licensed Products shall be of
      the quality, prestige and price similar to those of La prairie & Estee
      Lauder for skincare, Clarins & L’Oreal for cosmetics, and Calvin Klein
      & Ralph Lauren for fragrances as those products are positioned in the
      marketplace as of the Effective
Date.

            

    

    

    
      	
               
      

            	
              (ii)

            	
              Licensor,
      at its sole discretion, may from time-to-time determine the re-positioning
      of the Licensed Mark.

            

    

    

    

    
      	
               
      

            	
              (iii)

            	
              All
      Licensed Products shall be manufactured, labeled, sold, distributed and
      advertised in accordance with all applicable national, state and local
      laws and regulations.

            

    

    

    
      	
               
      

            	
              (iv)

            	
              Licensee
      shall submit to Licensor for prior written approval two preproduction
      samples of proposed Licensed Products, along with their proposed packaging
      and any other accompanying sales materials (the "Approval Package") for
      Licensor's review, which approval shall not be unreasonably
      withheld.  In the event that Licensor does not respond to
      Licensee within 15 days of the receipt of any and all items within the
      scope of the Approval Package, any such item shall be deemed
      approved.

            

    

    

    
      	
               
      

            	
              (v)

            	
              During
      the Term of this Agreement, upon Licensor's request, Licensee shall
      submit, free of charge to Licensor, the then current production samples of
      each Licensed Product marketed.  Production samples submitted by
      Licensee for this purpose may be retained by Licensor. Further, Licensee
      shall provide Licensor with 100 samples of the various Licensed Products
      being distributed each year for Licensor to use for public relations and
      promotional purposes. All Licensed Products to be sold hereunder shall be
      at least equal in quality to the samples presented to the Licensor in the
      Approval Package. Licensor and its duly authorized representatives shall
      have the right, upon reasonable advance notice and during normal business
      hours, at Licensor's expense, to examine Licensed Products in the process
      of being manufactured and to inspect all facilities utilized by Licensee
      in connection therewith.

            

    

    
      
         

      

      
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    B.           Required
Markings.   Licensee shall cause to appear on all
packaging of Licensed Products, (i) "the trademark, KATHY HILTON is licensed to
OmniReliant Corp."; and such additional legends, markings and notices complying
with the requirements of any law or regulation in the Territory and; (ii) such
other legends, markings and notices as Licensor, from time-to-time, may
reasonably request.

    

    C.           Distribution. In
order to maintain the reputation, image and prestige of the Licensed Marks,
Licensee's normal distribution patterns shall consist of those means of
distribution described in Article 2 of this Agreement.

    

    D.           Sales
Force.  During the term of this Agreement, Licensee shall
maintain a non-exclusive sales force suitable to carry out the purpose of this
Agreement.

    

    ARTICLE
8

    

    Guaranteed Minimum Royalties
& Right of Licensor to Terminate for Failure to Obtain Minimum Annual Sales
Following the Second Extended Term

    

    A.           Guaranteed Minimum
Royalties.   In consideration of both the license granted
herein and the services to be performed by Ms. Kathy Hilton hereunder including,
but not limited to, appearances on television shopping networks, in
infomercials, and other personal appearances, Licensee shall pay to Licensor an
annual guaranteed minimum royalty (the “Guaranteed Minimum Royalty” or
“Guaranteed Minimum Royalties”) as follows:

    

    ANNUAL PERIOD GUARANTEED MINIMUM
ROYALTIES

    
      
        
          
            
              
                
                  
                    	
                            Annual
      Period

                          	 	
                            Dates

                          	 	
                            Minimum
      Royalty

                          
	
                            1

                          	 	
                            Effective
      Date to 12/31/07

                          	 	
                            One
      Million Dollars

                          
	
                            2

                          	 	
                            1/1/07
      to 12/31/08

                          	 	
                            One
      Million Dollars

                          
	
                            3

                          	 	
                            1/1/08
      to 12/31/09

                          	 	
                            One
      Million Dollars

                          
	
                            4

                          	 	
                            1/1/09
      to 12/31/10

                          	 	
                            One
      Million Dollars

                          
	
                            5

                          	 	
                            1/1/10
      to 12/31/11

                          	 	
                            One
      Million
Dollars

                          

                  

                

              

            

          

        

      

    

    

               In
the event that the Initial Term of this Agreement is extended for an additional
five-year term (January 1st, 2012 –
December 31st, 2016
(the “First Extended Term”), the Guaranteed Minimum Royalty for each Annual
Period of the First Extended Term shall be One Million Five Hundred Thousand
Dollars ($1,500,000).   Subject to Licensor’s right to terminate
in Sub Section (B) below for Licensee’s failure to reach the specified minimum
annual sales, Licensee shall have the right to extend the Term of this Agreement
for continuing subsequent five-year extensions by paying an increased Guaranteed
Minimum Royalty of $250,000 per Annual Period for each subsequent five-year
period.  In other words, the Guaranteed Minimum Royalty for each
Annual Period from 1/1/17 through 12/31/21 (the “Second Extended Term”) will be
$1,750,000 and the Guaranteed Minimum Royalty for each Annual Period from 1/1/22
through 12/31/26 (the “Third Extended Term”) will be $2,000,000 and so
forth.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    Notwithstanding the foregoing, if
Licensee fails to pay the Guaranteed Minimum Payment for any Annual Period, that
failure to make the Guaranteed Minimum Payment will not be deemed to constitute
a breach of this Agreement, or to generate a claim for monetary relief, but
shall merely give Licenser the right to terminate this Agreement upon 60 days’
written notice to Licensee.  Upon such event, the parties agree that
Licensee shall pay Licensor a termination fee of One Hundred Thousand Dollars
($100,000) within 60 days of the termination date, at which point Licensor shall
be free to exploit itself or license a third-party to exploit the Licensed
Products bearing the Licensed Marks.

    

    The
Guaranteed Minimum Royalty payable for each Annual Period shall be paid to
Licensor semi-annually in advance on the first day of the month of each half
year starting with the payment of the Guaranteed Minimum Royalty for the 2nd Annual
Period, such that each half of the Guaranteed Minimum Royalty Payments shall be
paid on January 1st and
July 1st of each
Annual Period.  Notwithstanding the foregoing, the Guaranteed Minimum
Royalty for the first Annual Period shall be paid thirty (30) days following the
Effective Date.  In the event that such payment is not timely made,
Licensor shall have the right to cancel this Agreement, making it void ab initio, upon 5-days
written notice to cure.

    

    B.          
  Right to
Terminate for Failure to Reach Minimum Annual Sales after the First Extension
Term.   Notwithstanding Licensee’s willingness to continue
paying the specified Guaranteed Minimum Royalties specified above, Licensor
shall have the right to terminate this Agreement and all rights granted
hereunder in the event that Licensee does not reach the Minimum Annual Sales of
Licensed Products in the Annual Periods specified below:

    

    
      
        
          
            
              	
                      Minimum
      Sales of Licensed Products

                      To
      Obtain Right to Extend Term for an

                      Additional
      Period of Five Years

                    	 	
                      Dates
      of Term Extension if Required

                      Minimum
      Sales are Achieved

                    
	
                      $25,000,000
      in the Annual Period 1/1/2015 through 12/31/2015

                    	 	
                      1/1/2017
      through 12/21/2021

                    
	
                      $30,000,000
      in the Annual Period 1/1/2020 through 12/31/2020

                    	 	
                      1/1/2022
      through 12/21/2026

                    
	
                      $35,000,000
      in the Annual Period 1/1/2025 through 12/31/2025

                    	 	
                      1/1/2027
      through 12/21/2031

                    
	
                      $25,000,000
      in the Annual Period 1/1/2030 through 12/31/2030

                    	 	
                      1/1/2032
      through
12/21/2036

                    

            

          

        

      

    

     

    
      
         

      

      
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    ARTICLE
9

    

    Sales Royalty; Stock in
OmniReliant; Withholding Taxes

    

    A.           Licensee
shall pay to Licensor a sales royalty (the “Sales Royalty” or “Sales Royalties”)
of eight percent (8%) on each Annual Period's Net Sales on sales made in all
venues other than infomercials.  The Sales Royalty payable hereunder
shall be accounted for and paid on a quarterly basis within forty-five (45) days
after the close of the prior quarter's sales. In other words, the actual Sales
Royalty will be paid 45-days in arrears computed on the basis of Net Sales
during the quarter ending 45 days before the period upon which royalties are
being paid, with a credit for any Guaranteed Minimum Royalties and Sales Royalty
payments previously made to Licensor.

    

    B.           Licensee
shall pay Licensor a Sales Royalty payment of a minimum of three percent (3%) of
Net Sales, on all revenues generated from the sale of the Licensed Products
through infomercials sold in connection the Licensed Products.  The
Sales Royalties shall be paid quarterly, along with sufficient reports
justifying the calculation of the Sales Royalty payments within forty-five (45)
days after the close of the prior quarter’s sales.  Should the
infomercial’s performance exceed a three to one (3X) media ratio, meaning the
revenues generated by the infomercial exceeds three times the expenditures on
the media, the Sales Royalty shall be increased to four percent (4%) of the
Adjusted Gross Collected Revenues.   The Sales Royalty on sales
made through direct response infomercials will not exceed four percent (4%) of
the Net Sales in infomercials.  The Sales Royalty on all up-sells of
Licensed Products shall be one percent (1%) greater than the applicable royalty
rate based on the sliding scale stated in this Sub Section (B) attributable to
the sale otherwise occurring during such up-sell.  “Expenditures on
the media” as that phrase is used herein shall be defined as the actual
out-of-pocket expenses attributable to purchasing television air time and shall
not include any and all costs associated with the production of the show content
for such infomercial.

    

    C.           If
applicable, on behalf of Licensor, Licensee shall compute any payment of
required taxes (other than United States Federal, state or local income taxes)
which any governmental authority in the Territory may impose on trademark
royalties being paid from such country. The amount of such taxes and the
reasonable costs incurred by Licensee in determining those taxes, including, but
not limited to, the cost of professional advisors, shall be deducted from the
payments of royalties, provided that Licensor is entitled under applicable law
to credit the amount of such taxes against its United States Federal Income Tax
obligations. Licensee shall furnish Licensor with an official receipt (together
with a translation thereof if not in English) promptly after each such payment
of taxes. In the event such taxes are not paid when due, all resulting penalties
and interest shall be borne by Licensee.

    

    D.           The
payment of Sales Royalties for any Annual Period in excess of the payments of
the Guaranteed Minimum Royalty for the same Annual Period shall be credited
against the Guaranteed Minimum Royalty due to Licensor for any other Annual
Period.

    
      
         

      

      
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    E.           In
addition to the Sales Royalties and Guaranteed Minimum Royalties being paid to
Licensor herein, Licensor shall be further compensated by the receipt of twenty
five percent (25%) of the total outstanding shares of stock of OmniReliant Corp.
as of the Effective Date.  The parties acknowledge and agree that as
of the Effective Date, the total outstanding shares of stock is 12,000,000 and
thus Licensor shall receive 3,000,000 shares of stock of OmniReliant Corp. upon
execution hereof.  Licensee anticipates that it will bring in future
equity investors into OmniReliant Corp. that will be issued shares of stock
which will dilute Licensor’s ownership percentage and thereafter OmniReliant
Corp. will become a wholly-owned subsidiary of a public company, at which point
Licensor’s stock will be exchanged for stock in the public company, which is
currently anticipated to be approximately equivalent to 14% initial ownership in
the public company on a fully diluted basis (a calculation which includes all
outstanding warrants and options being exercised).

    

    F.           
The addresses for all Royalty Payments, including the Guaranteed Minimum Royalty
shall be as follows:

    

    
      	
               
      

            	
              (1)

            	
              85%
      of the initial Guaranteed Minimum Royalty payable upon execution hereof
      together with a stock certificate representing 25% of the total
      outstanding shares of OmniReliant and 85% of all other royalties payable
      hereunder to:

            

    

    

    KHR
Licensing Company, Inc.

                                 250
North Canon Drive,

    2nd
Floor,

    Beverly
Hills, CA 90210

    

    
      	
               
      

            	
              (2)

            	
              15%
      of the initial Guaranteed Minimum Royalty (which does not include any
      remuneration that Licensor is receiving from Licensee in stock benefits)
      payable upon execution hereof and 15% of all other royalties
      to:

            

    

    

    GLMAC

    2875 NE
191st
Street

    Suite
501

    Aventura,
Fl. 33180

    Attn :
Mr. Lucien Lallouz

    

    ARTICLE
10

    

    Advertising

    

    Licensee
agrees to spend in the United States for "consumer advertising" (as defined
below) 10% of Net Sales during each Annual Period.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    For the
other markets in the Territory, Licensee or its distributors will jointly spend
not less than 10% of Net Sales in such markets during each Annual
Period.  For purposes of television shopping networks, one-half (1/2)
of the wholesale sales to television shopping networks shall be attributable to
consumer advertising.

    

    "Consumer
Advertising" shall be understood to include, but not be limited to, newspapers,
magazines, television, live television shopping, infomercials, radio, billboards
(including related artwork and production charges for these five categories),
retailer demonstration charges, retailer's catalogues, gifts-with-purchase
including the gift aspect of value sets, direct mail, remittance envelopes,
blow-ins, billing inserts (both scented and unscented), product samples, free
goods (including those to Licensor for events and other public relation
activities), window and counter displays (including testers, dummies, counter
cards and other visual aids), special events, contests, publicity and promotions
and cooperative advertising.

    

    Licensor
understands the critical importance of live appearances on television shopping
networks and infomercial production sessions.  Therefore, Licensor
undertakes at Licensee's request to make Ms. Kathy Hilton ("KH") available
during each year of the term of this Agreement at reasonable intervals and for
reasonable periods (which shall involve a maximum of eight (8) appearances of
three (3) days each, exclusive of travel, for television shopping appearances,
two (2) appearances of two (2) days each for infomercial production and two (2)
appearances of one (1) day each for other personal appearances. Licensee shall
also be entitled to the use of KH's likeness for advertising and promotional
purposes upon Licensor's prior written approval first being obtained in each
instance, which approval shall not be unreasonably withheld or delayed. Licensor
shall make every reasonable effort, in light of KH's busy schedule, at the
request of the Licensee, to arrange for KH's cooperation for publicity launch
parties, personal appearances and radio and TV interviews (which shall be
included in KH's obligations of eight (8), two (2) and two (2) appearances
discussed above). Licensee shall reimburse Licensor for the reasonable costs
involved in providing KH plus one other individual, selected by Licensor, if
they wish to attend, with first-class travel, lodging, food and other related
expenses, which shall include the cost of hair, makeup and security personnel,
mutually agreed upon in advance of each appearance attended by KH at Licensee's
request. If KH fails to appear for a scheduled Licensor approved event, Licensee
will have the right to deduct up to $50,000 of its non-refundable out of pocket
expenses incurred in connection with such specific event from the Sales Royalty.
The failure to appear at a scheduled event could have a material adverse effect
on the Licensee's ability to market the Licensed Products.

    

    ARTICLE
11

    

    Sales Statement; Books and
Records; Audits

    

    A.           Sales
Statement.   Licensee shall deliver to Licensor at the
time each Sales Royalty payment is due, a reasonably detailed report signed by a
duly authorized officer of Licensee indicating by quarter the Net Sales and a
computation of the amount of Sales.  Such statement shall be furnished
to Licensor whether or not any Royalties are payable hereunder for said period
or whether any Licensed Products have been sold during the period of which such
statement is due. Licensee shall deliver to Licensor, not later than ninety (90)
days after the close of each Annual Period during the Term (or portion thereof
in the event of prior termination for any reason), a statement signed by a duly
authorized officer relating to said entire Annual Period, setting forth the same
information required to be submitted by Licensee in accordance with the first
Section of this Article and also setting forth the information concerning
expenditures for the advertising and promotion of Licensed Products during such
Annual Period required by Article 10 hereof.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    B.           Books and Records;
Audits. Licensee shall prepare and maintain, in such manner as will allow
its accountants to audit same in accordance with generally accepted accounting
principles, complete and accurate books of account and records (specifically
including without limitation the originals or copies of documents supporting
entries in the books of account) in which accurate entries will be made covering
all transactions, including advertising expenditures, arising out of or relating
to this Agreement. Licensee shall keep separate general ledger accounts for such
matters that do not include matters or sales related to this Agreement. Licensor
and its duly authorized representatives shall have the right, for the duration
of this Agreement and for one (1) year thereafter, during regular business hours
and upon seven (7) business days advance notice (unless a shorter period is
appropriate in the circumstances), to audit said books of account and records
and examine all other documents and material in the possession or under the
control of Licensee with respect to the subject matter and the terms of this
Agreement, including, without limitation, invoices, credits and shipping
documents, and to make copies of any and all of the above. All such books of
account, records, documents and materials shall be kept available by Licensee
for at least two (2) years after the end of the Annual Period to which they
relate.  If, as a result of any audit of Licensee's books and records,
it is shown that Licensee's payments were less than the amount which should have
been paid by an amount equal to 10% or more of the payments actually made with
respect to sales occurring during the period in question, Licensee shall
reimburse Licensor for the cost of such audit and shall make all payments
required to be made (along with accrued interest at the rate of eight percent
(8%)) to eliminate any discrepancy revealed by said audit within ten (10) days
after Licensor's demand therefore.

    

    ARTICLE
12

    

    Indemnification and
Insurance

    

    A.            Indemnification of
Licensor. Licensee of hereby agrees to save and hold Licensor, Kathy
Hilton and its agents harmless of and from and to indemnify them against any and
all claims, suits, injuries, losses, liability, demands, damages and expenses
(including, subject to sub paragraph D below, Licensor's reasonable attorneys'
fees and expenses) which Licensor or Kathy Hilton may incur or be obligated to
pay, or for which either may become liable or be compelled to pay in any action,
claim or proceeding against it, for or by reason of any acts, whether of
omission or commission, that may be committed or suffered by Licensee or any of
its servants, agents or employees in connection with Licensee's performance of
this Agreement, including but not limited to those arising out of: (i) the
alleged defect in any Licensed Product produced by Licensee under this
Agreement; (ii) the manufacture, labeling, sale, distribution or advertisement
of any Licensed Product by Licensee in violation of any national, state or local
law or regulation or the breach of Article 5 hereof; (iii) any allegations of
any nature and kind with regard to the advertisement, distribution and sale of
Licensed Products.. The provisions of this Section and Licensee's obligations
hereunder shall survive the expiration or termination of this
Agreement.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    B.           Insurance
Policy.   Licensee shall procure and maintain at its own
expense in full force and effect at all times during which Licensed Products are
being sold, with a responsible insurance carrier acceptable to Licensor, a
public liability insurance policy including products liability coverage with
respect to Licensed Products with a limit of liability not less than Two Million
Dollars ($2,000,000). The liability coverage shall increase to a maximum amount
of Three Million Dollars ($3,000,000) when sales of Licensed Products equal or
exceed $10,000,000 annually.  It shall be acceptable if such coverage
is provided by a product liability policy and an additional umbrella policy.
Such insurance policies shall be written for the benefit of Licensee and
Licensor and shall provide for at least thirty (30) days prior written notice to
the Parties of the cancellation or substantial modification thereof. Licensor
and Ms. Kathy Hilton shall be named as additional insured parties on each such
policy. Such insurance may be obtained by Licensee in conjunction with a policy
which covers products other than Licensed Products.

    

    C.           Evidence of
Insurance. Licensee shall, from time to time upon reasonable request by
Licensor, promptly furnish or cause to be furnished to Licensor evidence in the
form and substance reasonably satisfactory to Licensor of the maintenance of the
insurance required by subsection B above, including, but not limited to, copies
of policies, certificates of insurance (with applicable riders and endorsements)
and proof of premium payments. Nothing contained in this Section shall be deemed
to limit in any way the indemnification provisions of the sub Section A
above.

    

    D.           Notice.  Licensor
will give Licensee notice of any action, claim, suit or proceeding in respect of
which indemnification may be sought and Licensee shall defend such action,
claim, suit or proceeding on behalf of Licensor.  In the event
appropriate action is not taken by Licensee within thirty (30) days after its
receipt of notice from Licensor, then Licensor shall have the right, but not the
obligation, to defend such action, claim, suit or proceeding. Licensor may,
subject to Licensee's indemnity obligation under sub Section A above, be
represented by its own counsel in any such action, claim, suit or proceeding. In
any case, the Licensor and the Licensee shall keep each other fully advised of
all developments and shall cooperate fully with each other in all respects in
connection with any such defense as is made.  Nothing contained in
this sub Section shall be deemed to limit in any way the indemnification
provisions of the sub Section A above except that in the event appropriate
action is being taken by Licensee, by counsel reasonably acceptable to Licensor,
with respect to any not-trademark or intellectual property action, claim, suit
or proceeding, Licensor shall not be permitted to seek indemnification from
Licensee for attorneys' fees and expenses incurred without the consent of
Licensee. In connection with the aforesaid actions, claims and proceedings, the
parties shall, where no conflict of interest exists, seek to be represented by
common reasonably acceptable counsel.  In connection with actions,
claims or proceedings involving trademark or other intellectual property matters
which are subject to indemnification hereunder, Licensor shall at all times be
entitled to be represented by its own counsel, for whose reasonable fees and
disbursements it shall be entitled to indemnification
hereunder.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    ARTICLE
13

    

    The Licensed
Marks

    

    A.           Licensee
shall not join any name or names with the Licensed Marks so as to form a new
mark without the prior written consent of Licensor, which shall not be
unreasonably withheld. Licensee acknowledges the validity of the Licensed Marks,
the secondary meaning associated with the Licensed Marks and the rights of
Licensor with respect to the Licensed Marks in the Territory in any form or
embodiment thereof and the goodwill attached or which shall become attached to
the Licensed Marks in connection with the business and goods in relation to
which the same has been, is or shall be used. Sales by Licensee shall be deemed
to have been made by Licensor for purposes of trademark registration and all
uses of the Licensed Marks by Licensee shall inure to the benefit of
Licensor.  Licensee shall not, at any time, do or suffer to be done,
any act or thing which may in any way adversely affect any rights of Licensor in
and to the Licensed Marks or any registrations thereof or which, directly or
indirectly, may reduce the value of the Licensed Marks or detract from their
reputation.  Licensee will use its best efforts to distribute Licensed
Products in the proper channels comparable to those of the brands outlined in
Article 7 A (i) herein.

    

    B.           At
Licensor's request, Licensee shall execute any documents, including Registered
User Agreements, reasonably required by Licensor to confirm the respective
rights of Licensor in and to the Licensed Marks in each jurisdiction in the
Territory and the respective rights of Licensor and Licensee pursuant to this
Agreement.  Licensee shall cooperate with Licensor, in connection with
the filing and the prosecution by Licensor of applications to register or renew
the Licensed Marks in International Class 3 for Licensed Products sold hereunder
in each jurisdiction in the Territory where Licensee has reasonably requested
the same.  Such filings and prosecution outside the U.S. shall be in
the name of Mr. Richard Hilton or Licensor, as Licensor shall so decide, the
expense of which will be fully paid by Licensor.  Nothing contained
herein shall obligate Licensor to prosecute any trademark application outside
the U.S. which is opposed or rejected in any country after the application is
filed, provided, however, that any such prosecution shall go forward if (a)
Licensee requests same; (b) Licensee and Licensor share the costs for same
directly; and (c) such prosecution is in Licensor's name and directed by
Licensor.  Licensor shall cooperate fully with any such
prosecution.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    C.           Licensee
shall use the Licensed Marks in each jurisdiction in the Territory strictly in
compliance with the legal requirements obtained therein and shall use such
markings in connection therewith as may be required by applicable legal
provisions. Licensee shall cause to appear on all Licensed Products and on all
materials on or in connection with which the Licensed Marks are used, such
legends, markings and notices as may be reasonably necessary in order to give
appropriate notice of any trademark, trade name or other rights therein or
pertaining thereto.

    

    D.           Licensee
shall never challenge the validity of the Licensed Marks or any application for
registration or registration thereof or any rights of Licensor therein. The
foregoing shall not be deemed to prevent Licensee from asserting, as a defense
to a claim of breach of contract brought against Licensee by Licensor for
failure to perform its obligations hereunder, that its ceasing performance under
this Agreement was based upon Licensor's failure to own the Licensed Marks in
the United States of America, provided that it is established in a court of law
that Licensor does not own the Licensed Marks, that the Licensed Marks are owned
by a third party so as to preclude the grant of the license provided
herein.

    

    E.           In
the event that Licensee learns of any infringement or imitation of
the      Licensed Marks or of any use by any
person of a trademark similar to the Licensed Marks, it promptly shall notify
Licensor thereof.  In no event, however, shall Licensor be required to
take any action if it deems it inadvisable to do so.

    

    F.           Licensor
shall be required to protect, indemnify and hold Licensee harmless against, or
be liable to Licensee for, any liabilities, losses, expenses or damages which
may be suffered or incurred by Licensee as a result of any infringement or
allegation thereof by any other person, firm or corporation, other than by
reason of Licensor's breach of the representations made and obligations assumed
herein.  Licensor and Ms. Kathy Hilton make no warranties or
representations as to the registrability of the Licensed Marks in the various
worldwide trademark offices in the Territory, except that Licensor warrants and
represents that a trademark application will be filed for the Licensed Mark in
the United States Patent and Trademark Office in International Class 3. Licensor
and Ms. Kathy Hilton warrant and represent that they are not aware of any
registrations or pending applications in International Class 3, or otherwise,
that would preclude or restrict Licensee from selling the Licensed Products
anywhere in the Territory.

    

    ARTICLE
14

    

    Defaults;
Termination

    

    A.           The
following conditions and occurrences shall constitute "Events of Default" by
Licensee:

    

    
      
        	
              	
                1.

              	
                the
      failure to pay Licensor the full amount due it under any of the provisions
      of this Agreement by the prescribed date for such
  payment;

              

      

    

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    
      
        	
              	
                2.

              	
                the
      failure to deliver full and accurate reports pursuant to any of the
      provisions of this Agreement by the prescribed due date
      therefore;

              

      

    

    

    
      
        	
              	
                3.

              	
                the
      making or furnishing of a knowingly false statement in connection with or
      as part of any material aspect of a report, notice or request rendered
      pursuant to this Agreement;

              

      

    

    

    
      
        	
              	
                4.

              	
                the
      failure to maintain the insurance required by Article
  12;

              

      

    

    

    
      
        	
              	
                5.

              	
                use
      of the Licensed Marks in an unauthorized or unapproved
    manner;

              

      

    

    

    
      
        	
              	
                6.

              	
                Licensee's
      use of other trademarks in association with the Licensed Products, without
      prior written consent of
Licensor;

              

      

    

    

    
      
        	
              	
                7.

              	
                the
      commencement against Licensee of any proceeding in bankruptcy, or similar
      law, seeking reorganization, liquidation, dissolution, arrangement,
      readjustment, discharge of debt, or seeking the appointment of a receiver,
      trustee or custodian of all or any substantial part of Licensee's
      property, not dismissed within sixty (60) days, or Licensee's making of an
      assignment for the benefit of creditors, filing of a bankruptcy petition,
      its acknowledgment of its insolvency or inability to pay debts, or taking
      advantage of any other provision of the bankruptcy
  laws;

              

      

    

    

    
      
        	
              	
                8.

              	
                the
      material breach of any other material promise or agreement made
      herein.

              

      

    

    

    B.           In
the event Licensee fails to cure (i) an Event of Default within thirty (30) days
after written notice of default is transmitted to Licensee under Article 14A.3,
A.5, A.6, or A.7; or (ii) Licensee fails to cure any other Event of Default
within sixty (60) days after written notice of default is transmitted to
Licensee or within such further period as Licensor may allow, this Agreement
shall, at Licensor's option, be terminated, on notice to Licensee, without
prejudice to Licensor's right to receive other payments due or owing to Licensor
under this Agreement or to any other right of Licensor, including the right to
damages and/or equitable relief, except with respect to a failure to make all of
the payments due under paragraph A of this Article 14, which shall only give
rise to a right of termination and the payment of a termination fee of $100,000
by Licensor and not a right to recover Guaranteed Minimum
Royalties.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    C.           Upon
the termination of this Agreement; or, in the event this Agreement is not
renewed as provided in Article 4 above; or, in the event of the termination or
expiration of a renewal term of this Agreement, Licensee, except as specified
below, will immediately discontinue use of the Licensed Marks, will not resume
the use thereof or adopt any colorable imitation of the Licensed Marks or any of
part thereof, will promptly deliver and convey to Licensor (free of all liens
and encumbrances) (i) all plates, engravings, silk-screens, or the like used to
make or reproduce the Licensed Marks, and (ii) all items affixed with likeness
or reproductions of the Licensed Mark, whether Licensed Products, labels, bags,
hangers, tags or otherwise, and, upon request by Licensor, will assign to
Licensor such rights as Licensee may have acquired in the Licensed
Marks.  In the event that this Agreement expires or is terminated by
Licensor due to Licensee's default, Licensor shall have an option, but not an
obligation, to purchase any bottle molds and tooling for the Licensed Products,
free of all liens and other encumbrances, at a price equal to Licensee's cost
for same established by submission of bill(s) from supplier and satisfactory
proof of payment for same. Licensor shall pay such cost as follows: 50% at
closing and the balance paid by six (6) equal monthly payments. Licensor shall,
at the time it exercises its purchase option, enter into a security agreement
with Licensee with respect to the molds, which shall entitle Licensee to
foreclose on its security interest in the molds in the event Licensor fails to
make any installment payments due within fifteen (15) days after receiving
notice of default. Licensor shall exercise its aforesaid option within thirty
(30) days after Licensee's submission of documents establishing the cost
thereof.  Notwithstanding the foregoing, if Licensor has terminated
this Agreement due to Licensee's default, Licensor, at its option, shall be
entitled, in exercising its purchase option, to deduct from the cost price an
amount equal to the sales and guaranteed minimum royalties Licensor is entitled
to recover, for which deduction Licensee shall receive a credit. In the event
Licensor exercises its aforesaid option, Licensee shall be precluded forever
from using the bottle molds or tools and from selling or otherwise transferring
or licensing any rights whatsoever in the molds or tools to any third party. In
the event that Licensor does not exercise its aforesaid option, Licensee shall
not use the bottle molds or tools or sell or otherwise transfer or license any
rights whatsoever in the bottle mold or tools to any third party for a period of
two (2) years after the date of termination of the Agreement. In the event of
any permitted use of the bottle mold and/or tools by Licensee, Licensee shall
not use in connection therewith the Licensed Mark, any trademark confusingly
similar thereto, any trade dress associated with the Licensed Products, any
advertising or promotional materials used in connection with the Licensed
Products or any other markings or materials which would cause a reasonable
consumer to believe that any new items sold using the bottle mold and tools are
authorized by Licensor or in some way associated with the Licensed
Marks.  Any permitted sale or license of the bottle molds and/or tools
by Licensee shall prohibit in writing the purchaser or licensee from using the
Licensed Marks, and any confusingly similar trademarks and any such trade dress,
advertising, promotional materials, markings or other materials and shall
expressly make Licensor a third party beneficiary of such
provision.

    

    ARTICLE
15

    

    Rights on Expiration or
Termination

    

    A.           If
this Agreement expires or is terminated, Licensee shall cease to manufacture
Licensed Products (except for work in process or to balance component inventory)
but shall be entitled, for an additional period of twelve (12) months only, on a
non-exclusive basis, to sell and dispose of its inventory subject, however, to
the provisions of Article 9. Such sales shall be made subject to all of the
provisions of this Agreement and to an accounting for and the payment of Sales
Royalties thereon but not to the payment of Guaranteed Minimum Royalties. Such
accounting and payment shall be made monthly.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    B.           In
the event of termination in accordance with Article 14 above, Licensee shall pay
to Licensor, the Sales Royalty then owed to it pursuant to this Agreement or
otherwise.

    

    C.           Notwithstanding
any termination in accordance with Article 14 above, Licensor shall have and
hereby reserve all rights and remedies which it has, or which are granted to it
by operation of law, to enjoin the unlawful or unauthorized use of the Licensed
Mark, and to collect royalties payable by Licensee pursuant to this Agreement
and to be compensated for damages for the breach of this Agreement.

    

    D.           Upon
the expiration or termination of this Agreement, Licensee shall deliver to
Licensor a complete and accurate schedule of Licensee's inventory of Licensed
Products and of related work in process then on hand (including any such items
held by Subsidiaries, Affiliates or others on behalf of Licensee) (hereinafter
referred to as "Inventory”). Such schedule shall be prepared as of the close of
business on the date of such expiration or termination and shall reflect
Licensee's cost of each such item. Notwithstanding anything contained to the
contrary in this Agreement, Licensor thereupon shall have the option,
exercisable by notice in writing delivered to Licensee within thirty (30) days
after its receipt of the complete Inventory schedule, to purchase any or the
entire Inventory, free of all liens and other encumbrances, for an amount equal
to Licensee's cost plus 20%.   In the event such notice is sent
by Licensor, Licensee shall deliver to Licensor or its designee all of the
Inventory referred to therein within thirty (30) days after Licensor's said
notice and, in respect of any Inventory so purchased, assign to Licensor all
then outstanding orders from Licensee to its suppliers and to Licensee from its
customers.  Licensor shall pay Licensee for such Inventory within
twenty (20) days after the delivery of such Inventory to Licensor. No Sales
Royalty shall be payable to Licensor with respect to the Inventory purchased by
Licensor.

    

    ARTICLE
16

    

    Sublicensing and
Distribution

    

    A.           The
performance of Licensee hereunder is of a personal nature. Therefore, neither
this Agreement nor the License or other rights granted hereunder may be
assigned, sublicensed or transferred by Licensee, whether to a Subsidiary,
Affiliate or unrelated third-party except by prior written approval of Licensor,
which approval will not be unreasonably withheld. However, any assignment of
this Agreement or the rights granted hereunder must be to an entity with equal
or superior financial strength to Licensee, unless Licensor agrees
otherwise.

    

    B.           Notwithstanding
anything contained to the contrary in this Agreement, this Agreement shall not
terminate if Licensee is merged or otherwise consolidated into another entity
which is the surviving entity of equal or superior financial
strength.

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    C.           Licensee
shall be entitled to use distributors in connection with its sale of Licensed
Products under this Agreement without approval of Licensor.  No such
distributor, however, shall be entitled to exercise any of Licensee's rights
hereunder except for the manufacture and sale of Licensed Products which have
been approved by Licensor hereunder.

    

    ARTICLE
17

    

    Miscellaneous

    

    A.           Representations. The
parties respectively represent and warrant that they have full right, power and
authority to enter into this Agreement and perform all of their obligations
hereunder and that they are under no legal impediment which would prevent their
signing this Agreement or consummating the same.  Licensor represents
and warrants that it has the right to license the Licensed Mark and that
Licensor has not granted any other existing license to use the Licensed Mark on
products covered hereunder in the Territory and that no such license will be
granted during the Term of this Agreement except in accordance with the
provisions hereof.

    

    B.           Licensor's Rights.
Not withstanding anything to the contrary contained in this Agreement, Licensor
shall not have the right to negotiate or enter into agreements with third
parties pursuant to which it may grant a license to use the Licensed Marks in
connection with the manufacture, distribution and/or sale of products covered
hereunder in the Territory or provide consultation and design services with
respect to such products in the Territory prior to the termination or expiration
of this Agreement.

    

    C.           Governing Law; Entire
Agreement. This Agreement shall be construed and interpreted in
accordance with the laws of the State of the defendant, either California or
Florida, applicable to agreements made and to be performed in said State,
contains the entire understanding and agreement between the parties hereto with
respect to the subject matter hereof, supersedes all prior oral or written
understandings and agreements relating thereto and may not be modified,
discharged or terminated, nor may any of the provisions hereof be waived,
orally.   Any legal action must be brought in the State of the
defendant, either California for Licensor or Florida for Licensee.

    

    D.           No
Agency.  Nothing herein contained shall be construed to
constitute the parties hereto as partners or as joint venturers, or either as
agent of the other, and Licensee shall have no power to obligate or bind
Licensor in any manner whatsoever.

    

    E.           No
Waiver.  No waiver by either party, whether express or implied,
of any provision of this Agreement, or of any breach or default thereof, shall
constitute a continuing waiver of such provision or of any other provision of
this Agreement. Acceptance of payments by Licensor shall not be deemed a waiver
by Licensor of any violation of or default under any of the provisions of this
Agreement by Licensee.

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    F.           Void
Provisions.   If any provision or any portion of any
provision of this Agreement shall be held to be void or unenforceable, the
remaining provisions of this Agreement and the remaining portion of any
provision held void or unenforceable in part shall continue in full force and
effect.

    

    G.           Construction.   This
Agreement shall be construed without regard to any presumption or other rule
requiring construction against the party causing this Agreement to be drafted.
If any words or phrases in this Agreement shall have been stricken out or
otherwise eliminated, whether or not any other words or phrases have been added,
this Agreement shall be construed as if those words or phrases were never
included in this Agreement, and no implication or inference shall be drawn from
the fact that the words or phrases were so stricken out or otherwise
eliminated.

    

    H.           Force
Majeure.  Neither party hereto shall be liable to the other for
delay in any performance or for the failure to render any performance under the
Agreement (other than payment to any accrued obligation for the payment of
money) when such delay or failure is by reason of lockouts, strikes, riots,
fires, explosions, blockade, civil commotion, epidemic, insurrection, war or
warlike conditions, the elements, embargoes, act of God or the public enemy,
compliance with any law, regulation or other governmental order, whether or not
valid, or other similar causes beyond the control of the party
effected.  The party claiming to be so affected shall give notice to
the other party promptly after it learns of the occurrence of said event and of
the adverse results thereof.  Such notice shall set forth the nature
and extent of the event. The delay or failure shall not be excused unless such
notice is so given.  Notwithstanding any other provision of this
Agreement, either party may terminate this Agreement if the other party is
unable to perform any or all of its obligations hereunder for a period of six
(6) months by reason of said event as if the date of termination were the date
set forth herein as the expiration date hereof.   If either party
elects to terminate this Agreement under this paragraph, Licensee shall have no
further obligations for the Guaranteed Minimum Royalties beyond the date of
termination (which shall be prorated if less than an Annual Period is involved)
and shall be obligated to pay any Sales Royalty which is then due or becomes
due.

    

    I.           Binding Effect. This
Agreement shall inure to the benefit of and shall be binding upon the parties,
their respective successors, Licensor's transferees and assigns and Licensee's
permitted transferees and assigns.

    

    J.           Resolution of
Disputes. Any controversy or claim arising out of, in connection with, or
relating to this Agreement, shall be determined by arbitration by a three person
arbitration panel at the office of the American Arbitration Association. Both
Parties shall share equally the cost of such arbitration (except each shall bear
its own attorney's fees). Any decision rendered by the arbitrators shall be
final and binding, and judgment may be entered in any court having
jurisdiction.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    K.            Consolidation.
Notwithstanding anything contained to the contrary in this Agreement (i) this
Agreement shall not terminate if Licensor is merged or otherwise consolidated
into another entity which is the surviving entity; and, (ii) Licensor shall be
entitled to assign this Agreement to any Corporation to which the Trademark is
assigned.

    

    L.          
  Survival. The
provisions of Licensed Products in Sections 11, 12A, 12D, 13, 15, 16, and 17
shall survive any expiration or termination of this Agreement.

    

    M.           Paragraph Headings.
The paragraph headings in this Agreement are for convenience of reference only
and shall be given no substantive effect.

    

    ARTICLE
18

    Notices

    

    Any
notice or other communications required or permitted by this Agreement to be
given to a party will be in writing and will be considered to be duly given when
sent by any recognized overnight courier service to the party concerned to the
following persons at their stated addresses (or to such other persons or
addresses as a party may specify by notice to the other):

    

    
      
        	
                To
      Licensor:

              	
                Richard
      & Kathy Hilton

              
	 
      	
                250
      North Canon Dr. 2nd Floor,

              
	 
      	
                Beverly
      Hills, CA 90210

              
	 
      	
                Hilt4321@aol.com

              
	 
      	 
      
	
                With
      a copy to:

              	
                Robert
      L. Tucker, Esq.,

              
	 
      	
                Tucker
      & Latifi, LLP

              
	 
      	
                160
      East 84th Street, New York, NY 10028

              
	 
      	
                Tel:
      212-472-6262; Fax: 212-744-6509.

              
	 
      	
                RTucker@TuckerLatifi.com

              
	
                and:

              	 
      
	 
      	
                GLMAC

              
	 
      	
                2875
      NE 191st Street

              
	 
      	
                Suite
      501

              
	 
      	
                Aventura,
      Fl. 33180

              
	 
      	
                Attn:
      Mr. Lucien Lallouz

              
	 
      	
                lallouz@glmac.com

              
	 
      	 
      
	
                To
      Licensee:

              	
                OmniReliant
      Corp.

              
	 
      	
                4902
      Eisenhower Blvd.,

              
	 
      	
                Suite
      185

              
	 
      	
                Tampa,
      Florida 33634

              

      

    

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    

    
      
        	
                With
      a copy to:

              	
                Steven
      Holtzman, Esq.

              
	 
      	
                Ruden
      McClosky

              
	 
      	
                401
      E. Jackson Street

              
	 
      	
                Suite
      2700

              
	 
      	
                Tampa,
      Florida 33602

              
	 
      	
                Tel:
      813-222-6616  Fax: 813-314-6916

              
	 
      	
                Steve.Holzman@ruden.com

              

      

    

    

    Notice of
the change of any such address shall be duly given by either party to the other
in the manner herein provided.

    

    EXECUTED on the day and year
first written above:

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  OMNIRELIANT
      CORP.

                                	 
	 
      	 
      	 
	
                                  By:

                                	 
        	 
	 
      	
                                  Chris
      D. Phillips, President

                                	 
	 
      	 
      	 
	KRH
      LICENSING COMPANY, LLC	 
	 
      	 
      	 
	
                                  By:

                                	 
       	 
	 
      	
                                  Richard
      Hilton, President

                                	 

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    Ms. Kathy
Hilton warrants and represents that should there be a successor entity to the
rights to the KATHY HILTON trademark, such successor shall assume the
obligations and succeed to the rights of the Licensor and the rights of Licensee
shall continue unaffected.

    

    
      
        
          
            	
                    ACKNOWLEDGE and
      APPROVED:

                  
	 
	 
        
	
                    Kathy
      Hilton

                  

          

        

      

    

    

    Dated:
October ___, 2006

    
      
         

      

      
        21Albeck
Financial Services

    11767
Katy Freeway #985

    Houston,
Texas 77079

    

     

    August 7,
2009

    

    Mr.
Charles Ramey

    Chief
Executive Officer

    US
Dataworks, Inc.

    One Sugar
Creek Center Blvd., Fifth Floor

    Sugar
Land, TX 77478

    

    
      	
              Re:

            	
              Engagement
      of Albeck Financial Services, Inc. and Randall J. Frapart for Chief
      Financial Officer Services

            

    

    

    Dear Mr.
Ramey:

    

    Thank you
for selecting Albeck Financial Services, Inc. (“Albeck”) and Randall J. Frapart
(“Mr. Frapart”) to provide Chief Financial Officer services to US Dataworks,
Inc. (the “Company”).  This letter agreement (this “Agreement”) states
the terms and conditions pursuant to which Albeck and Mr. Frapart will provide
such services to the Company.

     

    1. Scope of the
Engagement.  Albeck and Mr. Frapart will provide the personal
services of Mr. Frapart in the role of the Chief Financial Officer (the “CFO”)
of the Company.  In this capacity, Mr. Frapart will report to the
Chief Executive Officer (the “CEO”) of the Company (and, from time to time, to
the Company’s Board of Directors (the “Board”) and its committees), and, as
directed by the CEO (and, from time to time, the Board and its committees), will
perform those services typically performed by the CFO of a public company,
including overseeing and directing the financial affairs of the Company,
consistent with applicable corporate governance, legal and regulatory
frameworks.  These areas of responsibility include but are not limited
to (i) the Company’s accounting practices, (ii) the preparation of reports of
financial information, (iii) the public disclosure of financial information
(including the filing of required reports with the Securities and Exchange
Commission (the “SEC”) and the certifications thereof), (iv) investor relations,
(v) the direction of tax, budget, audit (internal and external) and cash
management functions, (vi) liaison with and support of the Board’s Audit
Committee, (vii) the financial planning, analysis and support of corporate
strategic initiatives, and (viii) counsel and communication to, and cooperation
with, other corporate executives, the Board, investors, bankers, customers,
employees and contractors as directed from time to time by the Chief Executive
Officer (and, from time to time, the Board and its committees).

     

    2. Term.  The term
of the engagement will be for a period of one year, beginning on July 15, 2009
(the “Effective Date”), notwithstanding the fact that this Agreement is being
executed and delivered on a later date.  The term will automatically
renew for successive one-year periods unless notice of non-renewal is given by
either party in writing sixty days or more before the anniversary of the
Effective Date.  The term is subject to earlier termination as stated
in Sections 13 and 14 hereof.

     

    3. Level of
Effort.  Mr. Frapart shall devote his full time, energies,
interest, abilities, and productive efforts to the business of the Company. Mr.
Frapart will perform his duties as the Company’s CFO in accordance with the
reasonable standards expected of a CFO of a public company.  Except as
may be approved by the Board in writing, Mr. Frapart shall not engage in any
activity which conflicts or interferes with his performance of his duties
hereunder. Notwithstanding the provisions of this Section 3, Mr. Frapart may,
with the prior written consent of the Board, engage in civic, charitable, or
educational activities; furthermore, he may serve as an officer of Albeck;
provided that such service and activities do not, individually or in the
aggregate, interfere with the performance of his duties under this Agreement;
provided, however, that this level of effort shall be subject to paid holidays
and paid time off applicable to Mr. Frapart’s services in a manner consistent
with the Company’s policies applicable to other senior executives, and in no
event less than twenty (20) days of paid time off per engagement
year.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      Mr.
Charles Ramey, CEO

      US
Dataworks, Inc.

      August 7,
2009

      Page
2

    

     

    4. Fees, Expenses, Billing, and
Payment.  The billing rate for Mr. Frapart’s CFO services under
this Agreement shall be U.S. $180,000.00 annually, payable in 24 semi-monthly
installments of $7,500.00 per installment in advance of each installment
period.  The billing rate does not include reasonable out-of-pocket
costs incurred by Mr. Frapart on the Company’s behalf or in furtherance of the
Company business.  These reasonable out-of-pocket costs incurred will
be added, under subsequent Albeck invoices, to the service amounts billed, and
will be reimbursed by the Company on delivery of the applicable invoice to
Company.

    

    Payment
is due promptly upon issuance of each invoice.  If payment of fees or
costs become past due, Mr. Frapart and Albeck may suspend providing CFO services
or may withdraw from the engagement.  An interest charge of one and
one-half percent (1.5%) per month may be imposed on past due amounts (excluding
interest charges themselves) starting fifteen (15) days after the date the
Company receives the applicable invoice.

    

    5. Stock Option
Grant.  Pursuant to the terms that have been authorized by
Board (or the Compensation Committee of the Board), effective as of the date
hereof, Mr. Frapart will be granted a non-qualified stock option (the “Stock
Option”) to purchase 400,000 shares of Company’s common stock at an exercise
price equal to the fair market value at the time of grant as determined in
accordance with the US Dataworks, Inc. Amended and Restated 2000 Stock Option
Plan, as amended through the date hereof (the “Plan”).  The Stock
Option will vest (i.e., become exercisable) on the earlier to occur of (i) July
15, 2010 or (ii) the date that Mr. Frapart becomes a full-time employee of the
Company.  If prior to the date the Stock Option vests, this Agreement
is terminated for any reason or either Albeck or the Company provides a
non-renewal notice pursuant to Section 2 hereof, the Stock Option will be deemed
forfeited and canceled as of the date of such event and will be of no further
force or effect.  The Stock Option will be governed by the terms and
conditions of the Plan and the applicable written stock option agreement, which
terms and conditions will include (i) a prohibition on the transfer of the Stock
Option except in certain limited circumstances and (ii) the vesting of the Stock
Option upon an occurrence of a change of control of the Company as defined in
and provided for therein.

    

    Albeck
and Mr. Frapart understand, acknowledge and agree that neither the grant of the
Stock Option nor the issuance of the shares of the Company’s common stock
pursuant to Mr. Frapart’s exercise of the Stock Option (the “Option Shares”)
will be registered with the SEC, and, as a result, the Stock Option and the
Option Shares will be considered “restricted securities” under Rule 144
promulgated under the Securities Act of 1933, as amended (“Rule
144”).  Mr. Frapart agrees that he will not sell or otherwise transfer
the Stock Option or the Option Shares except in strict compliance with Rule 144
and Mr. Frapart further represents and warrants to the Company that he is
accepting the Stock Option and, in the event he exercises the Stock Option, he
will be purchasing the Option Shares for his own account and for investments
purposes only and not with view to the resale or distribution
thereof.  Mr. Frapart and Albeck further understand, acknowledge and
agree that the Company will have no obligation to register the issuance of the
Stock Option or the Option Shares with the SEC and will have no obligation to
comply with any of the requirements of Rule 144 as it relates to any resale or
transfer of the Stock Option and/or Option Shares.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      
        Mr.
Charles Ramey, CEO

        US
Dataworks, Inc.

        August 7,
2009

        Page
3

      

    

     

    6. Performance
Bonuses.  In addition to the service billings described in
Section 4 hereof and the Stock Option grant described in Section 5 hereof, in
the event that Company has or adopts a performance bonus plan applicable to
executive officers of the Company during the term of this Agreement, Albeck,
based on Mr. Frapart’s performance, will be eligible to receive performance
bonuses under such performance bonus plan applicable to the role and
contributions of the CFO that is consistent with the performance bonus
eligibility of other executive officers reporting to the CEO of the Company,
with such bonus being payable to Albeck concurrently with the payment of other
bonuses to the executive officers of the Company.  To that end, the
Company will include Mr. Frapart in applicable Compensation Committee approvals,
plan objectives and pay-out formulations, applicable grant documents, and bonus
determination and payments, in a manner consistent with that applied to other
executive officers reporting to the Company’s CEO.  Notwithstanding
the foregoing, Mr. Frapart and Albeck understand, acknowledge and agree that
being eligible for a performance bonus does not mean that Albeck will in all
cases earn a performance bonus and that, depending on the terms of a given
performance bonus plan, Albeck may, based on the performance of Mr. Frapart,
fail to earn a performance bonus even if other executive officers earn
theirs.

    

    7.
Nondisclosure/Confidentiality.  Albeck and Mr. Frapart
acknowledge that, in connection with their prior and continuing engagement by
the Company, Albeck and Mr. Frapart have acquired and learned, and will continue
to acquire and learn, Confidential Information (as defined below) by virtue of
the relationship of trust and confidence between Albeck and Mr. Frapart, on the
one hand, and the Company on the other hand. Albeck and Mr. Frapart warrant and
agree that during the term of this Agreement and at all times thereafter, each
of them shall continue to be bound by an obligation not disclose to any person
or entity (other than to officers of the Company or to such other persons as
such officers may designate), or use, except in the course of Mr. Frapart’s
engagement hereunder or his subsequent employment with the Company or its
affiliates, any Confidential Information acquired by Albeck or Mr. Frapart in
the course of or in connection with this engagement. As used herein, the term
“Confidential Information” shall include, but not be limited to the following
information (unless such information is in the public domain): all information
of any type or kind, whether or not reduced to a writing and whether or not
conceived, originated, discovered or developed in whole or in part by Albeck or
Frapart, which is directly related to the Company, its operations, policies,
agreements with third parties, financial affairs and related matters, including
business plans, strategic planning information, product information, purchase
and sales information and terms, supplier negotiation points, styles and
strategies, contents and terms of contracts between the Company and suppliers,
advertisers, vendors, contact persons, terms of supplier and/or vendor contracts
or particular transactions, potential supplies and/or vendors, or other related
data; marketing information such as but not limited to, prior, ongoing or
proposed marketing programs, presentations, or agreements by or on behalf of the
Company, pricing information, customer bonus programs, marketing tests and/or
results of marketing efforts, computer files, lists and reports, manuals and
memos pertaining to the business of the Company, lists or compilations of vendor
and/or supplier names, addresses, phone numbers, requirements and descriptions,
contract information sheets, compensation requirements or terms, benefits,
policies, and any other information whether about the Company, entities related
or affiliated with the Company or other key information pertaining to the
business of the Company, including but not limited to all information which is
not generally available to or known in the information services industry (or is
available only as a result of an unauthorized disclosure), including any and all
information concerning the Company’s technology, solutions, processes, software,
firmware, and source code, regardless of whether or not such Information is a
“trade secret” as otherwise defined by applicable law.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      
        Mr.
Charles Ramey, CEO

        US
Dataworks, Inc.

        August 7,
2009

        Page
4

      

    

     

    8. Covenant Not To Compete.
During the term of this Agreement and for a period of six months
thereafter (regardless of the reason for termination of this Agreement), Albeck
and Mr. Frapart shall comply in all respects with the Company’s written policies
with respect to conflicts of interest.  Except as may be approved in
writing by the Board, neither Albeck nor Mr. Frapart shall engage in or be
interested, directly or indirectly, in any business or operation that is
competitive in any way, directly or indirectly, with the Company (a “Competitive
Business”). For the purpose of this Section 8, Albeck and Mr. Frapart shall be
deemed to be interested in a business or operation which is competitive with the
Company if Albeck or Mr. Frapart is a holder of five percent (5%) or more of the
issued and outstanding ownership interests in a Competitive Business, or serves,
directly or indirectly, as an owner, director, officer, employee, agent,
partner, individual proprietor, lender, consultant, advisor or independent
contractor of a Competitive Business. The provisions of this Section 8 shall not
preclude Mr. Frapart from owning an interest in and actively serving as an
officer of Albeck provided that he and Albeck fully comply with such
provisions.

    

    9. No
Solicitation.  Albeck and Mr. Frapart agree that during the
term of this Agreement and for a period of one (1) year thereafter
(regardless of the reason for termination of this Agreement), Albeck and Mr.
Frapart shall not, directly or indirectly, either for themselves or for any
other person, firm, corporation, or entity, solicit any individual then employed
by the Company to leave the employment of the Company or hire such
individual.

    

    10. Ownership of Work Product and
Ideas.  Any discoveries, inventions, patents, materials,
licenses, processes, technology, software, solutions and ideas applicable to the
industries in which the Company operates or relating to Albeck’s or Mr.
Frapart’s services for the Company or its affiliates, whether or not patentable
or copyrightable, created by Mr. Frapart during the term of this Agreement
(“Work Product”) and all business opportunities within the industries in which
the Company operates introduced to Albeck or Mr. Frapart by the Company or its
affiliates or of which Mr. Frapart otherwise becomes aware during the term of
this Agreement (“Opportunities”) will continue to be owned solely and
exclusively by the Company, and Albeck and Mr. Frapart will continue to have no
interest whatsoever in such Work Product or Opportunities, except to the extent
that the Company allows (per a written instrument signed by the CEO of the
Company) Albeck to invest or participate in or have other rights to such Work
Product or Opportunities. During the term of this Agreement, Albeck and Mr.
Frapart will promptly disclose in writing any such Work Product and/or
Opportunities to the Company and will, and hereby does, assign to the Company
all rights and interests in such Work Product and/or Opportunities.

    

    11.
Indemnification.  Albeck, Mr. Frapart and the Company
understand, acknowledge and agree that during the term of this Agreement, Mr.
Frapart will be an officer of the Company as contemplated by the Nevada
corporate statutes and the Company’s articles of incorporation, bylaws and other
organizational documents.  In that regard, Mr. Frapart shall be
entitled to the same indemnification from the Company for his acts and omissions
as an officer of the Company, whether pursuant to applicable Nevada corporate
law or the Company’s organizational documents or otherwise, to which other
officers of the Company are entitled.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      
        Mr.
Charles Ramey, CEO

        US
Dataworks, Inc.

        August 7,
2009

        Page
5

      

    

     

    12. Liability
Insurance.  It is also the intent of Albeck, Mr. Frapart and
the Company that, during the term of this Agreement, Mr. Frapart shall be deemed
to be an officer of the Company under the Company’s applicable liability
insurance policies covering the Company, its directors, officers, employees and
agents from time to time in effect, including but not limited to the Company’s
Directors’ and Officers’ policy and Errors and Omissions policy.  In
furtherance thereof, the Company shall take all reasonable steps to have Mr.
Frapart and, if possible, Albeck included as named insureds on such liability
insurance policies, with coverage to an extent equal to that provided for
members of the Board, the CEO, and other officers reporting to the
CEO.

    

    13. Termination by
Company.  The Company shall have the right to terminate this
Agreement at any time for any reason whatsoever and such termination shall be
effective as of the date the Company provides Albeck with written notice
thereof.  If this Agreement is terminated other than for Cause (as
defined below), the Company will pay Albeck the Termination Fee (defined
below).  The term “Cause” with respect to the Company’s termination of
this Agreement shall mean termination by the Company based upon the occurrence
of any of the following: (i) any embezzlement or wrongful diversion of funds of
the Company or any affiliate of the Company by Albeck or Mr. Frapart; (ii) any
willful act or omission constituting gross malfeasance on the part of Albeck or
Mr. Frapart in their performance of the CFO services hereunder; (iii) any
material breach by Albeck or Mr. Frapart of this Agreement that is not cured
after notice of such breach and reasonable opportunity to cure such breach
(unless such breach is not capable of being cured, as determined by the Board);
(iv) any willful act or omission constituting gross negligence on the part of
Albeck or Mr. Frapart in their performance of the CFO services hereunder; (v)
any violation by Albeck or Mr. Frapart of the Company’s policies on trading in
Company securities from time to time in effect or any applicable federal or
state securities laws or regulations; (vi) any violation by Albeck or Mr.
Frapart of the Company’s code of conduct or ethics policies or any other
material policies of the Company from time to time in effect; (vii) the
conviction of Albeck or Mr. Frapart of a felony or a crime involving fraud,
dishonesty or other act of moral turpitude; (viii) Mr. Frapart leaving the
employment of Albeck (other than to become an employee of the Company), dying or
otherwise becoming unable to perform the CFO services hereunder; and (ix) the
willful failure of Mr. Frapart or Albeck to substantially perform their duties
under this Agreement.  No act or failure to act will be considered
"willful" unless it is done, or omitted to be done, in bad faith or without
reasonable belief that such action or omission was in the best interests of the
Company.  As used in this Agreement, the term “Termination Fee” shall
mean the lesser of (i) $45,000 and (ii) the amount of services fees remaining to
be paid to Albeck under Section 4 hereof for the remainder of the term of this
Agreement (assuming the term is not renewed).

    

    14. Termination by
Albeck.  In the event that Albeck in good faith determines that
Mr. Frapart has become unable or unwilling to substantially perform his duties
under this Agreement for any reason whatsoever, Albeck shall have the option to
terminate this Agreement upon making such determination by giving prompt written
notice to Company.  In such event, the Company shall pay Albeck any
services billings and bonuses which are earned but unpaid as of the effective
date of termination.  In the event of a material breach of this
Agreement by the Company, and following written notice of such breach from
Albeck to the Company, the Company has failed to cure such breach, Albeck may
terminate this Agreement immediately by providing Company with written notice of
such termination.  In such event, the Company shall pay Albeck any
services billings and bonuses which are earned but unpaid as of the effective
date of termination, plus the Termination Fee.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      
        Mr.
Charles Ramey, CEO

        US
Dataworks, Inc.

        August 7,
2009

        Page
6

      

    

     

    15. Fiduciary Duties;
Certifications.  Mr. Frapart and Albeck understand, acknowledge
and agree that as an officer of the Company, Mr. Frapart will have certain
fiduciary duties imposed by applicable law to always act in the best interests
of the Company and its stockholders, including but not limited to the duty of
care, the duty of loyalty and the duty of good faith.  During the term
of this Agreement and, to the extent applicable law dictates, following the
termination of this Agreement, Mr. Frapart shall act in compliance with such
fiduciary duties.  Mr. Frapart and Albeck also understand, acknowledge
and agree that, as the Company’s CFO, Mr. Frapart will be deemed to be the
Company’s “principal financial officer” and may at some point become the
Company’s “principal accounting officer” (as such terms are defined in the rules
and regulations of the SEC) and, as such, will be primarily responsible for
ensuring the accuracy and completeness of the Company’s financial reports
disclosed to the public and/or filed with the SEC (the “Public
Reports”).  In furtherance thereof and as required by the rules and
regulations of the SEC and applicable federal securities laws, Mr. Frapart will
be required to make certain certifications in connection with such financial
reporting and disclosure which, if false, may subject him to personal civil
liability and criminal prosecution.  During the term of this Agreement
and, to the extent applicable law dictates, following the termination of this
Agreement, Mr. Frapart shall not knowingly allow the Company to make or file
Public Reports that are false or misleading in any material
respect.

    

    16. Obligations Joint and
Several.  The contractual obligations of Mr. Frapart and Albeck
under this Agreement shall be joint and several such that the Company may look
to either of them for any damages in contract caused by their breach of such
obligations regardless of who actually committed the breach.

     

    17.
Miscellaneous Provisions.

     

    17.1 Entire Agreement. This
Agreement and that certain Confidentiality and Non-Disclosure Agreement dated on
or around May 25, 2009 by and between the Company and Mr. Frapart (which
agreement shall remain in effect) (the “Prior NDA”) contains the entire
agreement among the parties hereto and supersedes all prior oral and written
agreements, understandings, commitments, or practices between or among the
parties hereto with respect to the subject matter hereof. Other than as
expressly set forth herein and in the Prior NDA, Albeck and the Company
acknowledge and represent that there are no other promises, terms, conditions or
representations (verbal or written) regarding any matter relevant hereto. No
supplement, modification, or amendment of any term, provision or condition of
this Agreement shall be binding or enforceable unless evidenced in writing and
executed by each of the parties hereto. The provisions contained in Sections 7,
8, 9, 10, 11, 12, 15, 16 and 17 hereof shall survive termination of this
Agreement.

     

    17.2 Applicable Law. This
Agreement shall be governed exclusively by and construed in accordance with the
laws of the State of Texas, notwithstanding choice of law provisions thereof;
and the venue of any litigation commenced hereunder shall be Houston,
Texas.

     

    17.3 Injunctive
Relief.  Albeck and Mr. Frapart acknowledge and agree that
their obligations under Sections 7, 8 9 and 10 hereof are of a special, unique,
unusual, extraordinary and intellectual character, which gives them a peculiar
value, the loss of which cannot be reasonably or adequately compensated in
damages in an action at law.  If Albeck or Mr. Frapart should breach
any of those provisions, in addition to its rights and remedies under applicable
law generally, the Company shall be entitled to seek equitable relief by way of
injunction and any bond therefore shall not be required to exceed
$1,000.

     

    17.4 Partial Invalidity. If
the application of any provision of this Agreement, or any section, subsection,
subdivision, sentence, clause, phrase, word or portion of this Agreement should
be held invalid or unenforceable, the remaining provisions thereof shall not be
affected thereby, but shall continue to be given full force and effect as if the
invalid or unenforceable provision had not been included herein.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      
        Mr.
Charles Ramey, CEO

        US
Dataworks, Inc.

        August 7,
2009

        Page
7

         

      

    

    17.5 Notices. Notices given
under this Agreement shall be given by registered or certified mail, postage
prepaid, return receipt requested, or by personal delivery to the respective
addresses of the parties. Notices to Albeck and Mr. Frapart shall be sent to the
letterhead address heading this letter, Attn:  Christy Albeck. Notices
to the Company shall be sent to the addressee address at the beginning of this
letter, Attn: Chief Executive Officer. A mailed first-class notice shall be
deemed given two (2) business days after deposit with U.S. Postal
Service.

     

    17.6 Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which shall constitute one and the same
instrument.

     

    17.7 Assignment. The Company
(but not Albeck or Mr. Frapart) may assign this Agreement to any successor
(whether by merger, consolidation, or purchase of the assigning party’s stock)
to all or a controlling interest in the Company’s business, in which case this
Agreement shall be binding upon and inure to the benefit of such successor(s)
and assign(s).

     

    17.8 Limitation on Waiver. A
waiver of any term, provision, or condition of this Agreement shall not be
deemed to be, or constitute a waiver of any other term, provision or condition
herein, whether or not similar. No waiver shall be binding unless in writing and
signed by the waiving party.

     

    17.9 Attorney’s Fees. In the
event that any proceeding is commenced involving the interpretation or
enforcement of the provisions of this Agreement, the party prevailing in such
proceeding shall be entitled to recover its reasonable costs and attorneys’
fees.

     

    17.10 Not for the Benefit of
Creditors or Third Parties. The provisions of this Agreement are intended
only for the regulation of relations among the parties hereto. This Agreement is
not intended for the benefit of creditors of the parties hereto or other third
parties and no rights are granted to creditors of the parties hereto or other
third parties under this Agreement.

     

    Again,
thank you for giving us the opportunity to work with you.  If this
letter correctly states our understanding, please countersign it and return it
to our attention at your earliest convenience.

     

    Very
truly yours,

     

    
      
        	
                Albeck
      Financial Services, Inc.

              
	 
      	 
      
	
                By:

              	
                /s/ Christy Albeck

              
	 
      	
                Name:
      Christy Albeck

              
	 
      	
                Title:
      CEO

              
	 
      	 
      
	
                /s/ Randal J. Frapart

              
	
                Randall
      J. Frapart

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
       

      
        Mr.
Charles Ramey, CEO

        US
Dataworks, Inc.

        August 7,
2009

        Page
8

      

       

    

    
      
        	
                AGREED
      AND ACCEPTED:

              
	 
      
	
                US
      Dataworks, Inc.

              
	 
      	 
      
	
                By:

              	
                /s/ Charles E. Ramey

              
	 
      	
                Charles
      Ramey, CEO

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