Perpetual License Agreement - Ritz Camera Centers Inc. and Ritz Interactive Inc.
PERPETUAL LICENSE AGREEMENT
This Perpetual License Agreement (this "Agreement") is being entered into
effective as of the 1st day of August 2005 (the "Effective Date"), by and
between Ritz Camera Centers, Inc., a Delaware corporation ("RCC") and Ritz
Interactive, Inc., a Delaware corporation ("RII").
RECITALS
A. RCC owns the name, trademark, service mark and/or tradename "Ritz
Interactive" (referred to herein as the "Mark").
B. RCC and RII are entering into that certain Second Amended and Restated
Agreement, to be effective concurrently herewith (the "RCC Agreement").
C. RII has certain rights to use the Mark under the RCC Agreement, and
desires additional rights to use the Mark, in the event the RCC Agreement is
terminated, as set forth in this Agreement.
D. In consideration for the mutual promises herein, and RII's entry into
the RCC Agreement, RCC desires to grant to RII additional rights to use the Mark
under the terms and conditions set forth in this Agreement.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. GRANT OF LICENSE
1.1 "RII Field" means any business other than sales of (i) photographic
equipment, supplies and products, (ii) boating, fishing and marine equipment,
supplies and products, (iii) photo finishing, digital imaging, portraits and
related services, or (iv) consumer electronic equipment.
1.2 RCC hereby grants to RII a perpetual, worldwide, royalty-free,
fully-paid exclusive (including as to RCC) license to, after the termination of
the RCC Agreement, use and reproduce the Mark in conjunction with any business
or use in the RII Field (the "License"). RII shall also have the right to
authorize its third-party service providers to, after the termination of the RCC
Agreement, use and reproduce the Mark as permitted to RII herein. Except as
expressly permitted herein or in the RCC Agreement, RCC agrees that it shall not
transfer any right, title and/or interest and/or grant a license or authorize
another Person to use or reproduce the Mark. Nothing in this Agreement shall be
construed to grant RII any ownership rights in or to the Mark, or restrict any
of the rights granted under the RCC Agreement. Except as specifically provided
in this Agreement or the RCC Agreement, RCC is the sole and exclusive owner of
the Mark and all goodwill associated with or appurtenant to it, and RII has no
right or interest in the Mark except as specifically provided in this Agreement
or the RCC Agreement.
1.3 Notwithstanding the License granted in Section 1.2, in the event that,
after termination of the RCC Agreement, RII desires to use the Mark in
conjunction with any business that is not an existing business of RII as of the
time of the termination of the RCC Agreement (a "New Business"), then RII shall
provide RCC with thirty (30) days prior written notice to RCC
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of the New Business that RII is considering entering along with a general
description of the manner in which RII would expect to use the Mark in
connection with such New Business. RCC shall have the right, within such thirty
(30) day period, to demand in writing that RII not use the Mark in connection
with such New Business if RCC determines that use of the Mark in connection with
such New Business would subject RCC to a risk of any unfavorable regulatory
action, violate any law, infringe the rights of any third party, impair the
goodwill associated with the Mark or any other Marks (as such term is defined in
the RCC Agreement), or unreasonably subject RCC to liability. Upon such written
demand from RCC, RII shall, in its discretion, either (i) not use the Mark in
connection with such New Business or (ii) submit the dispute to binding
arbitration in accordance with the provisions of Section 5.2 of this Agreement,
pending the outcome of which RII shall not use the Mark in conjunction with such
proposed New Business. The sole determination to be made by the arbitrators in
any such proceeding shall be a determination of whether RII's use of the Mark in
connection with such New Business would subject RCC to a risk of any unfavorable
regulatory action, violate any law, infringe the rights of any third party,
impair the goodwill associated with the Mark or any other Marks (as such term is
defined in the RCC Agreement), or unreasonably subject RCC to liability. If the
arbitrators determine that RII's use of the Mark in connection with such New
Business would subject RCC to a risk of any unfavorable regulatory action,
violate any law, infringe the rights of any third party, impair the goodwill
associated with the Mark or any other Marks (as such term is defined in the RCC
Agreement), or unreasonably subject RCC to liability, then RII shall not use the
Mark in connection with such New Business. If the arbitrators do not determine
that RII's use of the Mark in connection with such New Business would subject
RCC to a risk of any unfavorable regulatory action, violate any law, infringe
the rights of any third party, impair the goodwill associated with the Mark or
any other Marks (as such term is defined in the RCC Agreement), or unreasonably
subject RCC to liability, then RII may use the Mark in connection with such New
Business, subject to the other terms and conditions of this Agreement.
2. TERM
2.1 This Agreement shall begin on the Effective Date and shall, unless
terminated pursuant to this ARTICLE 2, continue in perpetuity.
2.2 RCC shall have the right (but not the obligation) to terminate
immediately this Agreement:
2.2.1 if RII is in material breach of any of its obligations or
representations hereunder, which are material to this Agreement and which
breach is not cured or remedied within sixty (60) days of receipt by RII
of written notice from RCC of such breach;
2.2.2 if RII files or is the subject of a voluntary petition in bankruptcy
or any voluntary proceeding relating to insolvency, receivership,
liquidation, or composition for the benefit of creditors, if such petition
or proceeding is not dismissed within sixty (60) days of filing; or
becomes the subject of any involuntary petition in bankruptcy or any
involuntary proceeding relating to insolvency, receivership, liquidation,
or composition for the benefit of creditors, if such petition or
proceeding is not dismissed within sixty (60) days of filing;
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2.2.3 if the business of RII is liquidated or otherwise terminated for
insolvency or any other basis; or
2.2.4 if RII makes a general assignment for the benefit of its creditors.
2.3 RII shall have the right (but not the obligation) to terminate
immediately this Agreement:
2.3.1 if RCC is in material breach of any of its obligations or
representations hereunder, which are material to this Agreement and which
breach is not cured or remedied within sixty (60) days of receipt by RCC
of written notice from RII of such breach;
2.3.2 if RCC is the subject of a voluntary petition in bankruptcy or any
voluntary proceeding relating to insolvency, receivership, liquidation, or
composition for the benefit of creditors, if such petition or proceeding
is not dismissed within sixty (60) days of filing, or becomes the subject
of any involuntary petition in bankruptcy or any involuntary proceeding
relating to insolvency, receivership, liquidation, or composition for the
benefit of creditors, if such petition or proceeding is not dismissed
within sixty (60) days of filing;
2.3.3 if the business of RCC is liquidated or otherwise terminated for
insolvency or any other basis; or
2.3.4 if RCC makes a general assignment for the benefit of its creditors.
2.4 A party may exercise its right to terminate this Agreement pursuant to
this ARTICLE 2 by sending written notice to the other party. No exercise by a
party of its rights under this ARTICLE 2 will limit its remedies by reason of
the other party's default, such party's rights to exercise any other rights
under this ARTICLE 2, or any other rights of such party.
3. OWNERSHIP AND PROTECTION OF THE MARK
3.1 The parties acknowledge that the Mark is a trademark owned by RCC and
that all goodwill generated by RII's use of the Mark shall inure to RCC's
benefit. Nothing contained herein shall constitute an assignment of the Mark or
grant to RII any right, title or interest therein, except as specifically set
forth herein. RII shall maintain RCC's quality standards with respect to its use
of the Mark, and otherwise use the Mark subject to any reasonable restrictions
or requirements established by RCC from time to time. In the event that RII
shall obtain any proprietary right in the Mark, as a result of the exercise by
RII of any right granted to it hereunder, such proprietary right shall
immediately vest in RCC, however, RII shall be authorized to use such new
proprietary right as though the same had specifically been included in this
Agreement.
3.2 RII shall, upon the prior written request of RCC, furnish RCC proofs
of all materials bearing the Mark licensed hereunder by RCC or sublicensed
hereunder by RII (including, without limitation, printed or electronic copies of
all advertising and publicity materials). Review by RCC shall not relieve RII of
any of its warranties or obligations under this
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Agreement. Samples and materials to be reviewed by RCC shall be submitted to
such person that may be designated in writing by RCC.
3.3 In the event that RII learns of any infringement or threatened
infringement of the Mark, or that any Person claims or alleges that the Mark is
liable to cause deception or confusion to the public, RII shall immediately
notify RCC of the substance of any such infringement, claim or allegation
thereof, and, in the case of any infringing use, RCC shall at its discretion
take all reasonable steps so as to cause the cessation of such use. If RCC does
not take action in the case of any infringing use, RII may, but is not obligated
to, take action to cause the cessation of such use. If RII takes such action,
RCC agrees to cooperate with the reasonable requests of RII (including, without
limitation, sending cease and desist letters and becoming a co-party or party in
interest in any litigation) with respect to such action and, in the event of a
judgment or settlement in favor of RCC and/or RII, RII shall be entitled to (i)
attorneys' fees and costs and (ii) damages to the extent damages are
attributable to the detriment to any RII business or sales.
3.4 RII shall cause the trademark notice "(R)" or "(SM)" and/or the legend
"Ritz Interactive is a trademark of RCC and is used under license" and/or such
other legend as requested by RCC from time to time to appear on promotional
materials and, to the extent consistent with general Internet practices, in
connection with services provided by RII.
3.5 Except for actions permitted by this Agreement, RII shall not,
directly or indirectly, do or cause to be done anything which contests or
materially impairs RCC's right, title or interest in the Mark.
3.6 RCC has a substantial and legitimate interest in protecting the
exceptional goodwill and value associated with the Mark and in encouraging RII's
full and complete performance under this Agreement. Except for actions permitted
by this Agreement, RII shall use commercially reasonable best efforts to not do
or cause to be done anything to materially damage or materially impair the
goodwill associated with the Mark.
3.7 RCC shall, at its sole expense, take such actions as necessary
(including the filing of any applicable renewal forms and payment of applicable
maintenance and renewal fees) in order to maintain with the applicable
regulatory authorities the registration in good standing of the Mark.
3.8 Each party agrees to take all action and cooperate as is reasonably
necessary, at the other party's request and expense, to protect the other's
respective rights, titles, and interests specified in this ARTICLE 3, and
further agrees to execute any documents that might be necessary to perfect each
party's rights, titles, and interests.
4. REPRESENTATIONS AND WARRANTIES
4.1 RCC represents and warrants that (a) it has full power and authority
to enter into this Agreement, (b) it owns the Mark and has sufficient right and
authority to grant to RII all licenses and rights granted by RCC hereunder, (c)
the Mark and the use thereof as permitted pursuant to this Agreement will not
violate any law or infringe upon or violate any rights of any Person, (d) the
execution, delivery and performance by RCC of this Agreement will not conflict
with, or result in a breach or termination of or constitute a default under, any
lease, agreement,
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commitment or other instrument to which RCC is a party, and (e) this Agreement
constitutes the valid and binding obligations of RCC enforceable against it in
accordance with its terms.
4.2 RII represents and warrants that (a) it has the full power and
authority to enter into and fully perform this Agreement, (b) this Agreement
constitutes the valid and binding obligations of RII enforceable against it in
accordance with its terms, and (c) the execution, delivery and performance by
RII of this Agreement will not conflict with, or result in a breach or
termination of or constitute a default under, any lease, agreement, commitment
or other instrument to which RII is a party.
5. GENERAL
5.1 RCC and RII may assign this Agreement, or any of their respective
rights and obligations hereunder, in whole or in part, provided that the
transferring party shall have first received the other party's written consent.
Except (i) as provided in the foregoing sentence, and (ii) for the assignment by
RCC or RII of all of their respective rights and obligations under this
Agreement to an unrelated Person in connection with the acquisition by that
third party of substantially all of the assets or voting securities of RCC or
RII, as applicable, where such unrelated Person agrees in writing that it
succeeds to all of the rights and is subject to all of the obligations of RCC or
RII, as applicable, under this Agreement, neither party may assign this
Agreement or any of their respective rights and obligations hereunder to any
Person and any attempt to assign this Agreement without such consent shall be
void and of no effect. In the event that RII or RCC seeks the consent of the
other to a proposed assignment, the non-assigning party shall, within fifteen
(15) days of its receipt of such request, respond in writing that it consents or
does not consent to the proposed assignment.
5.2 Any dispute or difference between the parties hereto arising out of or
relating to this Agreement shall be settled by arbitration in accordance with
the Commercial Rules of the American Arbitration Association by a panel of three
qualified arbitrators. RII and RCC shall each choose an arbitrator and the third
shall be chosen by the two arbitrators so chosen. If either RII or RCC fails to
choose an arbitrator within 30 days after notice of commencement of arbitration
or if the two arbitrators fail to choose a third arbitrator within 30 days after
their appointment, the American Arbitration Association shall, upon the request
of any party to the dispute or difference, appoint the arbitrator or arbitrators
to constitute or complete the panel as the case may be. Arbitration proceedings
hereunder may be initiated by either RII or RCC making a written request to the
American Arbitration Association, together with any appropriate filing fee, at
the office of the American Arbitration Association in Prince George's County,
Maryland. All arbitration proceedings shall be held in Prince George's County,
Maryland. Any order or determination of the arbitral tribunal shall be final and
binding upon the parties to the arbitration and may be entered in any court
having jurisdiction.
5.3 No failure of any party to exercise or enforce any of its rights under
this Agreement shall act as a waiver of such right.
5.4 This Agreement and the RCC Agreement contain the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersede all prior agreements and understandings relating to such
subject matter. No party shall be liable
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or bound to any other party in any manner by any representations, warranties or
covenants relating to such subject matter except as specifically set forth
herein.
5.5 This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement and shall become effective
when one or more such counterparts have been signed by each of the parties and
delivered to each of the other parties.
5.6 This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Maryland applicable to agreements made and to
be performed entirely within such State, without regard to the conflicts of law
principles of such State.
5.7 This Agreement is for the sole benefit of the parties hereto and
nothing herein expressed or implied shall give or be construed to give to any
person, other than the parties hereto any legal or equitable rights hereunder.
5.8 The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives as of the date first above written.
RITZ CAMERA CENTERS, INC.,
a Delaware corporation
By: /s/ Wade R. Mayberry
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Name: Wade R. Mayberry
Title: President
RITZ INTERACTIVE, INC.,
a Delaware corporation
By: /s/ Fred H. Lerner
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Fred H. Lerner, President
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