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Patent Security Agreement

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Sectors: Retail
Governing Law: New York, View New York State Laws
Effective Date: September 23, 2002
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EXHIBIT 10.6


PATENT SECURITY AGREEMENT


This PATENT SECURITY AGREEMENT (this "Agreement"), dated as of September 23, 2002 is made by IRON AGE CORPORATION, a Delaware corporation, and FALCON SHOE MFG. CO., a Maine corporation, (each a "Debtor" and collectively, jointly and severally, the "Debtors"), in favor of FOOTHILL CAPITAL CORPORATION, a California corporation, as the arranger and administrative agent for the Lenders ("Secured Party").


RECITALS


A. Iron Age Holdings Corporation, a Delaware corporation, Debtors and the Lender Group have entered into that certain Loan and Security Agreement, of even date herewith (as amended, restated, modified, renewed or extended from time to time, the "Loan Agreement"), pursuant to which the Lender Group has agreed to make certain financial accommodations to Debtors, and pursuant to which Debtors have granted to Secured Party for the benefit of the Lender Group security interests in (among other things) all or substantially all of the general intangibles of Debtors.


B. Pursuant to the Loan Agreement and as one of the conditions precedent to the obligations of the Secured Party and the Lenders under the Loan Agreement, each of the Debtors have agreed to execute and deliver this Agreement to Secured Party for filing with the PTO and with any other relevant recording systems in any domestic jurisdiction, and as further evidence of and to effectuate Secured Party's existing security interests in the patents and other general intangibles described herein.


ASSIGNMENT


NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which is hereby acknowledged, Each Debtor hereby agrees in favor of Secured Party as follows:


1. Definitions; Interpretation.


(a) Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings:


"Debtor" and "Debtors" shall have the meaning ascribed to such terms in the introductory paragraph of this Agreement.


"Event of Default" means any Event of Default under the Loan Agreement.


"Lender Group" means, individually and collectively, each of the Lenders and Secured Party.
"Lenders" means, individually and collectively, each of the financial institutions identified on the signature pages of the Loan Agreement, and any other Person made a party thereto in accordance with the provisions of Section 14 thereof (together with their respective successors and assigns).


"Patent Collateral" shall have the meaning set forth in Section 2.


"Patents" shall have the meaning set forth in Section 2.


"Proceeds" means whatever is receivable or received from or upon the sale, lease, license, collection, use, exchange or other disposition, whether voluntary or involuntary, of any Patent Collateral, including "proceeds" as defined at UCC Section 9-102(a)(64), all insurance proceeds, and all proceeds of proceeds. Proceeds shall include (i) any and all accounts, chattel paper, instruments, general intangibles, cash and other proceeds, payable to or for the account of any Debtor, from time to time in respect of any of the Patent Collateral, (ii) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to or for the account of any Debtor from time to time with respect to any of the Patent Collateral, (iii) any and all claims and payments (in any form whatsoever) made or due and payable to any Debtor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Patent Collateral by any Person acting under color of governmental authority, and (iv) any and all other amounts from time to time paid or payable under or in connection with any of the Patent Collateral or for or on account of any damage or injury to or conversion of any Patent Collateral by any Person.


"PTO" means the United States Patent and Trademark Office and any successor thereto.


"Secured Obligations" shall mean, with respect to each Debtor, all liabilities, obligations, or undertakings owing by such Debtor to the Lender Group of any kind or description arising out of or outstanding under, advanced or issued pursuant to, or evidenced by the Loan Agreement, any of the other Loan Documents, or this Agreement, irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, voluntary or involuntary, whether now existing or hereafter arising, and including all interest (including interest that accrues after the filing of a case under the Bankruptcy Code) and any and all costs, fees (including attorneys fees), and expenses which such Debtor is required to pay pursuant to any of the foregoing, by law, or otherwise.


"Secured Party" shall have the meaning ascribed to such term in the introductory paragraph of this Agreement.


"UCC" means the Uniform Commercial Code as in effect from time to time in the State of New York.


"United States" and "U.S." each mean the United States of America.


(b) Terms Defined in UCC. Where applicable and except as otherwise defined herein, terms used in this Agreement shall have the meanings ascribed to them in the UCC.


-2-
(c) Interpretation. In this Agreement, except to the extent the context otherwise requires:


(i) Any reference to a Section or a Schedule
is a reference to a section hereof, or a schedule hereto, respectively,
and to a subsection or a clause is, unless otherwise stated, a
reference to a subsection or a clause of the Section or subsection in
which the reference appears.


(ii) The words "hereof," "herein," "hereto,"
"hereunder" and the like mean and refer to this Agreement as a whole
and not merely to the specific Section, subsection, paragraph or clause
in which the respective word appears.


(iii) The meaning of defined terms shall be
equally applicable to both the singular and plural forms of the terms
defined.


(iv) The words "including," "includes" and
"include" shall be deemed to be followed by the words "without
limitation."


(v) References to agreements and other
contractual instruments shall be deemed to include all subsequent
amendments, restatements, supplements, refinancings, renewals,
extensions, and other modifications thereto and thereof.


(vi) References to statutes or regulations
are to be construed as including all statutory and regulatory
provisions consolidating, amending or replacing the statute or
regulation referred to.


(vii) Any captions and headings are for
convenience of reference only and shall not affect the construction of
this Agreement.


(viii) Capitalized words not otherwise
defined herein shall have the respective meanings assigned to them in
the Loan Agreement.


(ix) In the event of a direct conflict
between the terms and provisions of this Agreement and the Loan
Agreement, it is the intention of the parties hereto that both such
documents shall be read together and construed, to the fullest extent
possible, to be in concert with each other. In the event of any actual,
irreconcilable conflict that cannot be resolved as aforesaid, the terms
and provisions of the Loan Agreement shall control and govern;
provided, however, that the inclusion herein of additional obligations
on the part of any Debtor and supplemental rights and remedies in favor
of Secured Party for the benefit of the Lender Group (whether under New
York law or applicable federal law), in each case in respect of the
Patent Collateral, shall not be deemed a conflict with the Loan
Agreement.


2. Security Interests.


(a) Assignment and Grant of Security in respect of the Secured Obligations. Each Debtor, as security for the prompt payment and performance of the Secured Obligations, hereby grants, assigns, transfers and conveys to Secured Party, for the benefit of the


-3- Lender Group, a continuing, first priority security interest in all of such Debtor's right, title and interest in, to and under the following property, whether now existing or hereafter acquired or arising (collectively, the "Patent Collateral"):


(i) all patent letters of the U.S. or any
other country, all registrations and recordings thereof, and all
applications for letters patent of the U.S. or any other country,
owned, held or used by such Debtor in whole or in part, including all
existing U.S. patents and patent applications of such Debtor which are
described in Schedule A hereto, as the same may be amended or
supplemented pursuant hereto from time to time, and together with and
including all patent licenses held by such Debtor, together with all
reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof and the inventions disclosed therein, and
all rights corresponding thereto throughout the world, including the
right to make, use, lease, sell and otherwise transfer the inventions
disclosed therein, and all proceeds thereof, including all license
royalties and proceeds of infringement suits (collectively, the
"Patents");


(ii) all claims, causes of action and rights
to sue for past, present and future infringement or unconsented use of
any of the Patents and all ri
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