Both parties expect to establish a jointly owned marketing entity that will focus on this segment of the jewelry business.

The direct-marketing entity will serve all of House of Taylor Jewelry's (HOTJ's) consumer segments and will cover a range of exclusive product categories under the House of Taylor Jewelry and Kathy Ireland Jewelry brands. As proposed, PD Financial will be responsible for marketing as well as the design and development of the entity's catalogs and websites, while HOTJ will oversee design, development, manufacturing and sourcing of all diamonds and jewelry to be marketed under the brands.

Under the letter of intent, HOTJ will issue a three-year warrant to PD Financial to purchase five million shares of HOTJ's stock at $1 if the warrant is exercised during its first year, $1.50 if it is exercised during the second year and $2 if it is exercised during its third year.

Jack Abramov, president and CEO of HOTJ, said: "This agreement with PD Financial is a significant, exciting milestone in broadening our brand strategy and expanding our distribution through an exclusive direct-marketing channel for our jewelry."