Question about Licences and Stock Images

My school is having a tshirt design contest. In the design that they like, the tshirt uses a royalty free stock image. I took that image (of a grunge frame) off the website for 1 credit (free with a new account) and manipulated it to fit the tshirt design with a whole bunch of other elements.  The problem is that the licence I got from them is not the extended one that allows resale with products. The cost of being able to do this is 100 credits, or $88. No way is the school going to do that.
The image is stretched, parts are removed, and another image is screened on top, making only really the outline show up. Also, I increased the size  to the point of it being all pixely before throwing it in to a paint stroke filter. Would there be issues if the school sold this tshirt without the extended license, even if I changed the image? I don't want to be liable for anything!

For what I think you are referring to, I often create my own "grunge" frame.
While I have three sets of "frames," I often find that I need something "close," but "different." Though my commercial sets are "Royalty Free," I seldom use them, as I bought them.
I have also created some, that were similar, say a Polaroid-type frame, by scanning an actual Polaroid. Lots of ways to create something, that really fits the bill.
As for # 50,000, I will try to make it worthwhile...
Good luck,
Hunt

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