Exhibit 10.12
TRADEMARK AND TRADEMARK
APPLICATIONS SECURITY AGREEMENT BankBoston Retail Finance Inc.
January__, 1998
This Trademark and Trademark Application Security Agreement (the "TM
Security Agreement") is made as of the __th day of January, 1998 by CSS Trade
Names, Inc. a _________ corporation with its principal executive offices at 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Obligor"), and BankBoston Retail
Finance Inc. (in such capacity, the "Agent"), a Delaware corporation with its
principal executive offices at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, as
Agent for the Lenders under and as defined in that certain Loan and Security
Agreement, dated as of October 29, 1997 amongst County Seat Stores, Inc. (the
"Borrower") on the one hand, and the Agent and the Lenders on the other, as such
Loan and Security Agreement is amended from time to time (hereafter, the "Loan
Agreement").
RECITALS
WHEREAS, pursuant to the Loan Agreement the Agent and the Lenders from
time to time a party thereto have agreed to make certain loans and other
financial accommodations (hereinafter, the "Loans") available to the Borrower,
subject to, and in accordance with the provisions of, the Loan Agreement;
WHEREAS, under the Loan Agreement, the Borrower has created a security
interest in the Borrower's assets to secure the Liabilities (as defined in the
Loan Agreement and used herein as so defined);
WHEREAS, as a condition, among others, to the establishment of the
credit facility contemplated by the Loan Agreement, the Obligor has guarantied
the Liabilities of the Borrower pursuant to the Obligor's Guaranty dated
November 14, 1997;
WHEREAS, to secure the Obligor's Guaranty, the Obligor has executed
this TM Security Agreement.
NOW THEREFORE, For good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the Obligor and the Agent agree as
follows:
1. Terms used herein which are defined the Loan Agreement are used
as so defined.
2. To secure the Liabilities, the Obligor hereby grants to the Agent
for the ratable benefit of the Lenders, a continuing security interest in and
to, and assigns for security to the Agent for the ratable benefit of the
Lenders (with power of sale exercisable upon the occurrence of an Event of
Default as defined in the Loan Agreement), the following, and each item thereof,
whether now owned or in which the Obligor has an existing interest or hereafter
acquired or arising and all products, proceeds, substitutions, and accessions of
or to any of the following::
(a) All trademarks, trademark applications, service marks,
registered service marks and service xxxx applications including,
without limitation, those listed on EXHIBIT A annexed hereto and made
a part hereof, together with any goodwill connected with and
symbolized by any such trademarks, trademark applications, service
marks, registered service marks, and service xxxx applications.
(b) All renewals of any of the foregoing.
(c) All income, royalties, damages and payments now and
hereafter due and/or payable under and with respect to any of the
foregoing, including, without limitation, payments under all licenses
entered into in connection therewith and damages and payments for past
or future infringements or dilutions thereof.
(d) The right to xxx for past, present and future infringements
and dilutions of any of the foregoing.
(e) All of Obligor's rights corresponding to any of the
foregoing throughout the world.
All of the foregoing trademarks, registered trademarks and trademark
applications, and service marks, registered service marks and service xxxx
applications described in Subsection 2.(a), together with the items respectively
described in Subsections 2.(b) through and including 2.(e) are hereinafter
individually and/or collectively referred to as the "Marks".
3. Until this TM Security Agreement is terminated in writing by a
duly authorized officer of the Agent, the Obligor shall undertake the following
with respect to each Xxxx which is material to its business as then being
conducted:
(a) Pay all renewal fees and other fees and costs associated
with maintaining the Marks and with the processing of the Marks.
(b) At the Obligor's sole cost, expense, and risk, pursue the
prompt, diligent, processing of each Application for Registration
which is the subject of the security interest created herein.
(c) At the Obligor's sole cost, expense, and risk, take any and
all action which Obligor deems desirable to protect the Marks,
including, without limitation, but subject to Obligor's discretion,
the prosecution and defense of infringement actions.
4. In the event of
(a) the Obligor's failure, within Five (5) days of written
notice from the Agent, to cure any failure by the Obligor to perform
any of the Obligor's obligations set forth in Section 3, above; and/or
(b) the occurrence and continuance of any Event of Default
beyond applicable grace periods as provided for in the Loan
Agreement, the Agent acting in its own name or in that of the
Obligor may (but shall not be required to) act in the Obligor's
place and stead and/or in the Agents' own right in connection
therewith.
5. The Obligor represents and warrants that:
(a) EXHIBIT A includes all of the registered trademarks, Federal
trademark applications, registered service marks and Federal service
xxxx applications now owned by the Obligor.
(b) No liens, claims or security interests which are still in
effect have been granted in any Xxxx by the Obligor to any Person
other than to the Agent.
6. In order to further secure the Liabilities:
(a) The Obligor shall give the Agent written notice (with
reasonable detail) within Twenty-five (25) days following the
occurrence of any of the following:
(i) The Obligor obtains rights to, and files applications
for registration of, any new trademarks, or service marks, or
otherwise acquires ownership of any newly registered trademarks,
registered service marks, trademark applications, or service xxxx
applications.
(ii) The Obligor becomes entitled to the benefit of any
registered trademarks, trademark applications, trademark
licenses, trademark license renewals, registered service marks,
service xxxx applications, service xxxx licenses or service xxxx
license renewals as licensee.
(b) The provisions of this TM Security Agreement shall
automatically apply to any such additional property or rights
described in 6.(a), above, all of which shall be deemed to be and
treated as "Marks" within the meaning of this TM Security Agreement.
(c) The Obligor hereby authorizes the Agent to modify this
agreement by amending EXHIBIT A to include any future registered
trademarks, trademark applications, registered service marks and
service xxxx applications, written notice of which is so given,
provided, however, the modification of said EXHIBIT shall not be a
condition to the creation or perfection of the security interest
created hereby.
7. Upon the occurrence of any Event of Default, and only if such
default shall be continuing beyond applicable grace periods as provided for in
the Loan Agreement, the Agent may exercise all rights and remedies of a secured
party upon default under the Uniform Commercial Code as adopted in Massachusetts
(Massachusetts General Laws, Chapter 106), with respect to the Marks, in
addition to which the Agent, subject to the terms of the Loan Agreement, may
sell, license, assign, transfer, or otherwise dispose of the Marks. Any person
may conclusively rely upon an affidavit of an officer of the Agent that an Event
of Default has occurred and that the Agent is authorized to exercise such rights
and remedies.
8. The Obligor hereby irrevocably constitutes and designates the
Agent as and for the Obligor's attorney in fact, effective with and upon the
Agent's first exercise (the "First Exercise") of such powers following the
occurrence of any Event of Default continuing beyond applicable grace periods as
provided for in the Loan Agreement:
(a) To exercise any of the rights and powers referenced in
Section 7.
(b) To execute all and singular such instruments, documents, and
papers as the Agent determines to be appropriate in connection with
the exercise of such rights and powers and to cause the sale, license,
assignment, transfer, or other disposition of the Marks.
The within grant of a power of attorney, being coupled with an interest, shall
be irrevocable until the within TM Security Agreement is terminated by a duly
authorized officer of the Agent, but shall be exercisable only following the
occurrence of an Event of Default.
9. Any use by the Agent of the Marks as authorized hereunder in
connection with the exercise of the Agents' rights and remedies under the within
TM Security Agreement and the Loan Agreement shall be coextensive with Obligor's
rights thereunder and with respect thereto and without any liability for
royalties or other related charges from the Agent to the Obligor. Such use by
the Agent shall be permitted only with and upon the First Exercise following the
occurrence of an Event of Default continuing beyond applicable grace periods as
provided for in the Loan Agreement.
10. Agent hereby acknowledges that the Obligor shall continue to have
the exclusive right, prior to notice from the Agent following the occurrence of
an Event of Default continuing beyond applicable grace periods as provided for
in the Loan Agreement, to xxx for past, present and future infringement of the
Marks including the right to seek injunctions and/or money damages, in an effort
by Obligor to protect the Marks against encroachment by third parties; provided,
however, that Obligor must promptly notify Agent in writing of its filing of a
lawsuit for enforcement of the trademarks against a particular party. All costs
arising in connection with any infringement shall be borne by Obligor.
11. Following the payment and satisfaction of all Liabilities, and
the termination of any obligation of the Agent to provide loans or financial
accommodations under the credit facility contemplated by the Loan Agreement,
this TM Security Agreement shall terminate and the Agent shall execute and
deliver to Obligor all such instruments as the Obligor reasonably may request to
release any Encumbrance in favor of the Agent created hereby or pursuant hereto,
subject, however, to any disposition thereof which may have been made by Agent
pursuant hereto or pursuant to the Loan Agreement. The Agent will also execute
and deliver to the Obligor such releases as Obligor shall reasonably request in
connection with any disposition permitted hereunder or under the Loan Agreement
of any Xxxx or other collateral pledged hereunder.
12. Neither anything contained in the within TM Security Agreement or
in the Loan Agreement nor any act, omission, or circumstance may be construed
as directly or indirectly conveying to the Agent any rights in and to the Marks
(except the grant of security pursuant to Section 2 hereof, and Section 8.1 of
the Loan Agreement) which rights are effective except following the occurrence
and continuance of any Event of Default beyond applicable grace periods as
provided for in the Loan Agreement (and in such circumstances, only with and
upon the First Exercise).
13. This TM Security Agreement is intended to be supplemental of the
Loan Agreement. All provisions of the Loan Agreement shall apply to the Marks
and the Agent shall have the same rights with respect to any and all security
interests in the Marks granted the Agent to secure the Liabilities hereunder as
thereunder. Notwithstanding the foregoing in the event of a conflict between
this TM Security Agreement and the Loan Agreement, the terms of this TM Security
Agreement shall control with respect to the Marks and the Loan Agreement with
respect to all other collateral.
14. This TM Security Agreement and all rights and obligations
hereunder, including matters of construction, validity, and performance, shall
be governed by the laws of The Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the Obligor and the Agent respectively have caused
this Loan Agreement to be executed by officers duly authorized so to do on the
date first above written.
CSS TRADE NAMES, INC. BANKBOSTON RETAIL FINANCE INC.
(The "Obligor") (The "Agent")
By By
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Title: Title:
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............................
County of .........., ss
Then personally appeared before me ...................... who
acknowledged that such person is the duly authorized ................... of CSS
Trade Names, Inc. and that such person had executed the foregoing instrument on
its behalf.
Witness my hand and seal this ..... day of .................
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, Notary Public
My Commission Expires:
The ........ of .................
County of .............
Then personally appeared before me ...................., who
acknowledged that such person is the duly authorized .........................
of BankBoston Retail Finance Inc.; and that such person executed the foregoing
instrument on its behalf.
Witness my hand and seal this ...day of .................
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, Notary Public
My Commission Expires:
EXHIBIT A
Obligor's now owned or existing or hereafter acquired or arising registered
service marks and Federal service xxxx applications, registered trademarks, and
Federal trade xxxx applications:
Trademark/Service Xxxx Registrations
TRADEMARK REGISTRATION NUMBER REGISTRATION DATE
Trademark Applications
XXXX SERIAL NUMBER FILING DATE
