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Patent And Trademark Security Agreement

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Sectors: Specialty Retail
Governing Law: New York, View New York State Laws
Effective Date: May 22, 2002
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EXHIBIT 10.4


FORM OF
PATENT AND TRADEMARK SECURITY AGREEMENT (U.S.)


PATENT AND TRADEMARK SECURITY AGREEMENT (U.S.) (this "AGREEMENT") dated as of May 22, 2002 by and between ____________________(1) having its chief executive office at 122 Fifth Avenue, New York, NY 10011, as debtor (the "BORROWER"), and FLEET NATIONAL BANK, as secured party and as administrative agent for itself and each other Bank (as defined below) (the "ADMINISTRATIVE AGENT") under the terms of that certain Revolving Credit Agreement dated as of May 22, 2002 (as it may be amended from time to time, the "LOAN Agreement") by and among the Borrower, the lending institutions that are party thereto (collectively, the "BANKS"), and the Administrative Agent.


WHEREAS, the Borrower has requested that the Banks enter into the Loan Agreement with the Borrower, and to make Loans to the Borrower and issue Letters of Credit on the Borrower's behalf, upon the terms and subject to the conditions set forth therein; and


WHEREAS, it is a condition precedent to the Banks' agreement to enter into the Loan Agreement and extend credit to the Borrower thereunder that the Borrower execute and deliver this Agreement and grant the security interest herein provided.


NOW, THEREFORE, in order to induce the Banks to enter into the Loan Agreement and extend credit to the Borrower thereunder, and in consideration thereof, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:


ARTICLE 1. DEFINITIONS; INTERPRETATION.


1.01 Generally. Capitalized terms used but not defined herein or in any certificate, report or other document delivered pursuant hereto, shall have the meanings ascribed to such terms in the Loan Agreement. Except as otherwise defined herein, terms defined in the NY UCC (as defined below) and used herein shall have the meanings ascribed to such terms in the NY UCC; provided, however, that if a term is defined in Article 9 of the NY UCC differently than in another Article thereof, the term shall have the meaning set forth in Article 9.


1.02 Terms Defined in this Agreement. For purposes of this Agreement, the following terms have the meanings set forth below:


"ADMINISTRATIVE AGENT" shall have the meaning set forth in the Preamble.


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(1) See Footnote 2 on signature page.


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"ASSIGNMENT OF MARKS" shall have the meaning set forth in Article 3.


"ASSIGNMENT OF PATENTS" shall have the meaning set forth in Article 3.


"BANKS" shall have the meaning set forth in the Preamble.


"BORROWER" shall have the meaning set forth in the Preamble.


"DAMAGES" shall have the meaning set forth in Article 11.


"INDEMNIFIED PERSONS" shall have the meaning set forth in Article 11.


"IP COLLATERAL" shall have the meaning set forth in Article 2.


"LOAN AGREEMENT" shall have the meaning set forth in the Preamble.


"NY UCC" means the Uniform Commercial Code in effect in the State of New York, as it may be amended from time to time, provided, that if by reason of mandatory provisions of law, perfection, or the effect of perfection or nonperfection, of the security interest in any IP Collateral or the availability of any remedy hereunder is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, "NY UCC" means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection or availability of such remedy, as the case may be.


"PATENT LICENSE" means any oral or written agreement now or hereafter in existence granting to the Borrower any right to use any invention on which a patent is in existence, all as may be amended, supplemented or otherwise modified from time to time, including, without limitation, those listed on Schedule A hereto.


"PATENTS" means collectively all of the following now owned or hereafter created or acquired by the Borrower: (a) all patents, patent applications and Patent Licenses (as defined below) including, without limitation, those listed on Schedule A hereto (but as to any such Patent License, only to the extent the Borrower has the right to assign rights or grant a security interest therein), which issue or have issued in any country or jurisdiction upon any patent applications which correspond with any of such patents or patent applications; (b) all letters patent of the United States or any other country, and all applications for letters patent of the United States or any other country; (c) the reissues, divisions, continuations, renewals, extensions and continuations-in-part of any of the foregoing which issue or have issued in any country or jurisdiction; (d) all income, royalties, damages and payments now or hereafter due and/or payable under any of the foregoing or with respect to any of the foregoing, including, without limitation, damages and payments for past, present and future infringements of any of the foregoing; (e) the right to sue for past, present and future infringements of any of the foregoing; (f) all rights


-2- corresponding to any of the foregoing throughout the world; and (g) all goodwill associated with any of the foregoing.


"TRADEMARK LICENSE" means any oral or written agreement now or hereafter in existence granting to the Borrower any right to use any trademark, all as may be amended, supplemented or otherwise modified from time to time, including, without limitation, those listed on Schedule B hereto.


"TRADEMARKS" means collectively all of the following now owned or hereafter created or acquired by the Borrower: (a) all trademarks, Trademark Licenses including, without limitation, those listed on Schedule B hereto (but as to any such Trademark License other than the B&N License, only to the extent the Borrower has the right to assign rights or grant a security interest therein) trade names, corporate names, company names, business names, fictitious business names, trade styles, trade dress, service marks, logos, other business identifiers, prints and labels on which any of the foregoing have appeared or appear, all registrations and recordings thereof in the United States, any state in the United States or any foreign jurisdiction, and all applications in connection therewith, including, without limitation, those listed on Schedule B hereto, whether or not any of the foregoing is registered or the subject of an application for registration under federal law, state law, foreign law or otherwise; (b) all renewals thereof; (c) all income, royalties, damages and payments now or hereafter due and/or payable under any of the foregoing or with respect to any of the foregoing, including, without limitation, damages and payments for past, present and future infringements of any of the foregoing; (d) the right to sue for past, present and future infringements of any of the foregoing, (e) all rights corresponding to any of the foregoing throughout the world; and (f) all goodwill associated with and symbolized by any of the foregoing.


"UNIFORM COMMERCIAL CODE" means, in reference to any jurisdiction, the Uniform Commercial Code as adopted and in effect in such jurisdiction, as it may be amended from time to time.


1.03 Matters of Interpretation and Construction.


(a) The language of this Agreement, having been negotiated by the parties hereto, shall not be construed against any party hereto by reason of the extent to which such party or its counsel participated in the drafting hereof or by reason of the extent to which any such provision is inconsistent with any prior draft hereof.


(b) Use of the singular shall be deemed to include the plural and use of the plural shall be deemed to include the singular. Use of any gender shall be deemed to include all other genders.


(c) A reference to any law, agreement or other document includes any amendment or modification to such law, agreement or document.


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(d) A reference to any Person includes its successors and permitted assigns.


(e) Unless the context clearly requires otherwise, reference to a particular "Article" or "Section" refers to the corresponding article or section of this Agreement.


(f) Unless the context clearly requires otherwise, use of the word "including" shall mean "including, without limitation".


ARTICLE 2. GRANT OF SECURITY INTEREST. As security for the prompt and unconditional payment and performance of the Obligations, and for the benefit of the Administrative Agent and the Banks, the Borrower hereby grants, assigns, transfers and conveys to the Administrative Agent a continuing security interest in and first priority lien on all Patents and all Trademarks, whether now owned or hereafter acquired, and all Proceeds thereof (collectively, the "IP COLLATERAL"). In order to more fully effectuate the grant of such security interest, and to facilitate the exercise by the Administrative Agent of its remedies under this Agreement, the Borrower grants, assigns, transfers, conveys and sets over to the Administrative Agent, the Borrower's entire right, title and interest in and to the Trademarks and the Patents; provided that such grant, assignment, transfer and conveyance shall become effective only upon the giving of written notice thereof by the Administrative Agent to the Borrower at any time (i) during the existence of an Event of Default and (ii) after the Loans have been accelerated pursuant to Section 7.2 of the Loan Agreement; provided, however, that it shall become effective immediately and automatically (without notice or action of any kind by the Administrative Agent) (i) upon an Event of Default if such Event of Default is one for which acceleration of the Loans is automatic under the Loan Agreement and/or (ii) upon the sale or other disposition of or foreclosure upon the Collateral pursuant to this Agreement and the other Loan Documents and applicable law (including the transfer or other disposition of the IP Collateral to the Administrative Agent or its nominee in lieu of foreclosure).


ARTICLE 3. DELIVERIES AND FILING. With respect to the Trademarks, the Borrower has executed in blank and delivered to the Administrative Agent an assignment of federally registered trademarks in substantially the form of Exhibit 1 hereto (the "ASSIGNMENT OF MARKS"), and, with respect to the Patents, the Borrower has executed in blank and delivered to the Administrative Agent an assignment of patents, patent applications and related patent property in substantially the form of Exhibit 2 hereto (the "ASSIGNMENT OF PATENTS"). The Borrower hereby authorizes the Administrative Agent to complete as assignee and record with the U.S. Patent and Trademark Office either or both of the Assignment of Marks and the Assignment of Patents following the effectiveness thereof as provided in Article 2 above.


ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF BORROWER. The Borrower represents and warrants to the Administrative Agent as follows:


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4.01 Ownership of Collateral; Absence of Liens and Restrictions. As of the date hereof, the IP Collateral listed on Schedule A and Schedule B constitutes Patents and Trademarks, respectively, now owned or used by the Borrower. The Borrower is the sole owner in the United States and all other applicable jurisdictions of the entire right, title and interest in and to each of the Patents and Trademarks comprising the IP Collateral, free from any mortgage, pledge, lien, security interest, charge, adverse claim or other encumbrance including, without limitation, licenses, shop rights (with regard to the Patents) and covenants not to sue, except as set forth on Schedule 4.01 and except for the security interest herein granted and as otherwise permitted by the Loan Agreement.


4.02 Validity of Collateral; No Infringement. All of the IP Collateral is subsisting, and none of the IP Collateral has been adjudged invalid or unenforceable, in whole or in part. No claim has been made to the Borrower that the use of any of the IP Collateral violates or may violate the rights of any third Person and, to the Borrower's actual knowledge, there is no infringement by the Borrower of any patent or trademark rights of others.


4.03 Due Authorization; Non-Contravention. The execution, delivery and performance of this Agreement are within the power of the Borrower, have been duly
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