INTELLECTUAL PROPERTY SECURITY AGREEMENT
INTELLECTUAL
PROPERTY SECURITY AGREEMENT AND COLLATERAL ASSIGNMENT,
dated
as of June 5, 2007 (this “Agreement”),
made
by and among THE
BOMBAY COMPANY, INC.,
a
Delaware corporation, BBA
HOLDINGS, LLC,
a
Delaware limited liability company, and BOMBAY
INTERNATIONAL, INC.,
a
Delaware corporation (individually, a “Grantor”
and
collectively, the “Grantors”),
in
favor of GENERAL
ELECTRIC CAPITAL CORPORATION,
as
administrative Agent and collateral Agent (in such capacity, together with
its
successors and permitted assigns, “Administrative
Agent”).
WHEREAS,
pursuant to the Credit Agreement, dated as of October 24, 2006 as amended by
Amendment No. 1 to Credit Agreement, dated as of May 25, 2007 by and among
the
Borrowers, the Lenders, and the Administrative Agent, (as amended, supplemented
or otherwise modified from time to time the “Credit
Agreement”),
the
Lenders have made Revolving Loans to the Borrowers upon the terms and subject
to
the conditions set forth therein;
WHEREAS,
each
Grantor has granted a security interest to Administrative Agent, for the benefit
of itself and the Lenders, in, among other things, all right, title and interest
of the Grantors in, to and under all of the Grantors’ Intellectual Property (as
defined below), whether now existing or hereafter arising or acquired as
security for the Obligations from time to time owing by the Grantors under
the
Credit Agreement;
WHEREAS,
the
Administrative Agent and GB Merchant Partners, LLC (the “Term
Loan Agent”)
have
entered into that certain Intercreditor Agreement, dated as of June 5, 2007
(as
the same may be amended, restated, amended and restated, supplemented, replaced
or otherwise modified from time to time, the “Intercreditor
Agreement”);
WHEREAS,
each
Grantor is the owner of the entire right, title and interest in, to and under
such Grantor’s respective Intellectual Property listed on Schedule
I
hereto;
and
NOW,
THEREFORE,
in
consideration of the premises and for good and valuable consideration, the
receipt and sufficiency of which hereby are acknowledged, the Grantors hereby
agree with Administrative Agent as follows:
1. Defined
Terms.
(a) Definitions.
Unless
otherwise defined herein or the context otherwise requires, terms used in this
Agreement, including its preamble and recitals, have the meanings provided
in
the Credit Agreement.
(b) Definitions
of Certain Terms Used Herein.
As used
herein, the following terms shall have the following meanings:
“Copyrights”
shall
mean, with respect to any Grantor, all of such Grantor’s now existing or
hereafter acquired right, title, and interest in and to: (i) copyrights, rights
and interests in copyrights, works protectable by copyright, all applications,
registrations and recordings relating to the foregoing as may at any time be
filed in the United States Copyright Office or in any similar office or agency
of the United States, any State thereof, any political subdivision thereof
or in
any other country, and all research and development
relating
to the foregoing; and (ii) all renewals of any of the foregoing.
“Copyright
Licenses”
shall
mean all agreements, whether written or oral, providing for the grant by or
to
any Grantor of any right to use any Copyright.
“Credit
Agreement”
shall
have the meaning assigned to such term in the preliminary statement of this
Agreement.
“Intellectual
Property”
shall
mean all: (i) Trademarks and Trademark Licenses; (ii) Patents and Patent
Licenses; (iii) Copyrights and Copyright Licenses; (iv) all customer lists
and
customer information; (v) books, records, writings, computer tapes or disks,
flow diagrams, specification sheets, computer software, source codes, object
codes, executable code, data, databases and other physical manifestations,
embodiments or incorporations of any Trademark, Trademark License, Patent,
Patent License, Copyright or Copyright License; (vi) all other intellectual
property; and (vii) all common law and other rights throughout the world in
and
to all of the foregoing.
“IP
Collateral”
shall
have the meaning assigned to such term in Section 2
hereof.
“Licenses”
shall
mean, collectively, the Trademark Licenses, the Patent Licenses, and the
Copyright Licenses.
“Patents”
shall
mean, with respect to any Grantor, all of such Grantor’s now existing or
hereafter acquired right, title and interest in and to: (i) all patents, patent
applications, inventions, invention disclosures and improvements, and all
applications, registrations and recordings relating to the foregoing as may
at
any time be filed in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof, any political
subdivision thereof or in any other country, and all research and development
relating to the foregoing; and (ii) the reissues, divisions, continuations,
renewals, extensions and continuations-in-part of any of the
foregoing.
“Patent
Licenses”
shall
mean all agreements, whether written or oral, providing for the grant by or
to
any Grantor of any right to manufacture, use or sell any invention covered
by a
Patent.
“Trademarks”
shall
mean, with respect to any Grantor, all of such Grantor’s now existing or
hereafter acquired right, title, and interest in and to: (i) all of such
Grantor’s trademarks, trade names, corporate names, company names, business
names, fictitious business names, trade styles, service marks, logos, other
business identifiers, prints and labels on which any of the foregoing have
appeared or appear, all applications, registrations and recordings relating
to
the foregoing as may at any time be filed in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof, any political subdivision thereof or in any other country, and
all research and development relating to the foregoing; (ii) all renewals
thereof; (iii) the entire goodwill of the such Grantor’s business connected with
and symbolized by the foregoing or the use thereof; and (iv) all designs and
general intangibles of a like nature.
“Trademark
Licenses”
shall
mean all agreements, whether written or oral, providing for the grant by or
to
any Grantor of any right to use any Trademark.
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(i) The
words
“hereof,” “herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement and section and paragraph references are to this
Agreement unless otherwise specified.
(ii) The
meanings given to terms defined herein shall be equally applicable to both
the
singular and plural forms of such terms.
2. Grant
of Security Interest.
To
secure the payment and performance of the Obligations, each Grantor hereby
confirms and acknowledges that, it has granted, assigned and conveyed (and,
to
the extent not previously granted under the Credit Agreement, does hereby grant,
assign and convey) to Administrative Agent for the benefit of itself and the
Lenders a security interest in such Grantor’s entire right, title and interest
in its respective Intellectual Property and all proprietary rights relating
to
or arising from such Intellectual Property, in each case whether now owned
or
hereafter acquired by such Grantor, and including, without limitation, each
Grantor’s right, title and interest in and to each Intellectual Property and
proprietary rights identified on Schedule
I
attached
hereto and made a part hereof, and the right to xxx for past, present and future
infringements and dilutions, and all rights corresponding thereto throughout
the
world, and the entire goodwill of such Grantor’s business connected with and
symbolized by the Intellectual Property and all income, fees, royalties,
proceeds and other payments at any time due or payable with respect to any
of
the foregoing (referred to collectively as the “IP
Collateral”).
3. Protection
of Intellectual Property by Grantors.
The
Grantors shall, at their sole cost, expense and risk, undertake the following
with respect to the Intellectual Property identified on Schedule I:
(a) Pay
all
renewal fees and other fees and costs associated with maintaining the
Intellectual Property and with the processing of the Intellectual Property
and
take all other reasonable and necessary steps to maintain each registration
of
the Intellectual Property.
(b) Take
all
actions reasonably necessary to prevent any of the Intellectual Property from
becoming forfeited, abandoned, dedicated to the public, invalidated or impaired
in any way.
(c) Pursue
the prompt, diligent processing of each application for registration which
is
the subject of the security interest created herein and not abandon or delay
any
such efforts.
(d) Take
any
and all action which the Grantors reasonably deem appropriate under the
circumstances to protect the Intellectual Property from infringement,
misappropriation or dilution, including, without limitation, the prosecution
and
defense of infringement actions.
4. Representations
and Warranties.
Each
Grantor represents and warrants that:
(a) Schedule
I
is a
true, correct and complete list of all registered or applied for Intellectual
Property owned by the Grantors as of the date hereof.
(b) Except
as
set forth in Schedule
I,
none of
the Intellectual Property identified on Schedule I is the subject of any
licensing or franchise agreement pursuant to which any Grantor is the licensor
or franchisor.
(c) The
Intellectual Property identified on Schedule
I
hereto,
is valid and enforceable, and (i) no claim has been made that the use of any
of
the Intellectual Property does or may violate the rights of any third person;
and (ii) no material claim has been asserted and is pending by any Person
challenging or questioning the use by any Grantor of any
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(d) Each
Grantor owns, or is licensed to use, all Intellectual Property necessary for
the
conduct of its business as currently conducted, and such Grantor is the sole
and
exclusive owner of the entire right, title and interest in, under and to, free
and clear of any liens, charges and encumbrances, other than any Intellectual
Property listed on Schedule
I
that is
purported to be owned by each of the Grantors, Permitted Liens and Liens in
favor of Administrative Agent.
(e) No
holding, decision or judgment has been rendered by any Governmental Authority
which would limit, cancel or question the validity of, or any Grantor’s rights
in, any Intellectual Property set forth on Schedule
I
in any
respect that could reasonably be expected to have a Material Adverse Effect
on
the business or the property of any Grantor.
(f) Each
Grantor has the legal right and authority to enter into this Agreement and
perform its terms.
(g) The
Grantors shall give Administrative Agent written notice (with reasonable detail)
following the occurrence of any of the following:
(i) The
Grantors’ obtaining rights to, and filing applications for registration of, any
new Intellectual Property, or otherwise acquiring ownership of any newly
registered Intellectual Property.
(ii) The
Grantors’ becoming entitled to the benefit of any registered Intellectual
Property whether as licensee or licensor.
(iii) The
Grantors’ entering into any new Licenses.
(iv) The
Grantors’ shall give Administrative Agent written notice (with reasonable
detail) following the occurrence of the Grantors’ knowing or having reason to
know, that any application or registration relating to any material Intellectual
Property may become forfeited, abandoned or dedicated to the public, or of
any
adverse determination or development (including, without limitation, the
institution of, or any such determination or development in, any proceeding
in
the United States Patent and Trademark Office or any court or tribunal)
regarding the Grantors’ ownership of, or the validity of, any material
Intellectual Property or the Grantors’ right to register the same or to own and
maintain the same.
(h) If
any
Grantor amends its name, such Grantor shall provide copies of such amendment
documentation to Administrative Agent and shall re-register such Grantor’s
Intellectual Property with the appropriate Governmental Authority and shall
execute and deliver such agreements or documentation as Administrative Agent
shall request to maintain a perfected first priority security interest (except
to the extent that the Administrative Agent’s claim is junior to that of the
Term Loan Agent under the terms of the Intercreditor Agreement, in which case
such Grantor shall take all actions required under this Section 4(h) to maintain
the Administrative Agent’s perfected second priority security interest) in such
Intellectual Property, to the extent such security interest can be perfected
by
such filing.
5. No
Violation of Credit Agreement.
The
representations, warranties or covenants contained herein are supplemental
to
those representations, warranties and
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(a) The
provisions of this Agreement shall automatically apply to any such additional
property or rights described in Sections 4(g)(i),
above,
all of which shall be deemed to be and treated as “Intellectual Property” within
the meaning of this Agreement.
(b) Upon
the
reasonable request of Administrative Agent, the Grantors shall execute and
deliver, and have recorded, any and all agreements, instruments, documents
and
papers as Administrative Agent may request to evidence Administrative Agent’s
security interest in any
Intellectual Property and the goodwill of the Grantors relating thereto or
represented thereby (including, without limitation, filings with the United
States Patent and Trademark Office or any similar office), and the Grantors
hereby constitute Administrative Agent as their attorney-in-fact to execute
and
file all such writings for the foregoing purposes, all acts of such attorney
being hereby ratified and confirmed; provided,
however,
Administrative Agent’s taking of such action shall not be a condition to the
creation or perfection of the security interest created hereby.
7. Grantors’
Rights To Enforce Intellectual Property.
Prior to
Administrative Agent’s giving of notice to the Grantors following the occurrence
and during the continuance of an Event of Default below, the Grantors shall
have
the exclusive right to xxx for past, present and future infringement of the
Intellectual Property including the right to seek injunctions and/or money
damages, in an effort by the Grantors to protect the Intellectual Property
against encroachment by third parties, provided,
however:
(a) Any
money
damages awarded or received by the Grantors on account of such suit (or the
threat of such suit) shall constitute IP Collateral.
(b) Any
damages recovered in any action pursuant to this Section, net of costs and
attorneys’ fees reasonably incurred, to be applied as provided in Section
2.11(c) of the Credit Agreement.
(c) Following
the occurrence of any Event of Default, Administrative Agent, by notice to
the
Grantors may terminate or limit the Grantors’ rights under this Section
7.
8. Administrative
Agent’s Actions To Protect Intellectual Property.
In
the
event of the occurrence and continuance of any other Event of Default,
Administrative Agent, acting in its own name or in that of the Grantors, may
(but shall not be required to) act in the Grantors’ place and stead and/or in
Administrative Agent’s own right in connection therewith.
9. Rights
Upon Default.
Upon the
occurrence of any Event of Default, Administrative Agent may exercise all rights
and remedies as provided for in the Credit Agreement.
(a) The
Grantors hereby irrevocably constitute and designate Administrative Agent as
and
for the Grantors’ attorney in fact, effective following the occurrence and
during the continuance of an Event of Default:
(i) To
supplement and amend from time to time Schedule
I
of this
Agreement to include any new or additional Intellectual Property of the
Grantors.
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(ii) To
exercise any of the rights and powers referenced herein.
(b) The
within grant of a power of attorney, being coupled with an interest, shall
be
irrevocable until this Agreement is terminated by a duly authorized officer
of
Administrative Agent.
(c) Administrative
Agent shall not be obligated to do any of the acts or to exercise any of the
powers authorized by this Section 10,
but if
Administrative Agent elects to do any such act or to exercise any of such
powers, it shall not be accountable for more than it actually receives as a
result of such exercise of power, and shall not be responsible to any Grantor
for any act or omission to act except for any act or omission to act as to
which
there is a final determination made in a judicial proceeding (in which
proceeding Administrative Agent has had an opportunity to be heard) which
determination includes a specific finding that the subject act or omission
to
act had been negligent or in actual bad faith.
11. Administrative
Agent’s Rights.
Upon an
Event of Default, any use by Administrative Agent of the Intellectual Property,
as authorized hereunder in connection with the exercise of Administrative
Agent’s rights and remedies under this Agreement and under the Credit Agreement
shall be coextensive with the Grantors’ rights thereunder and with respect
thereto and without any liability for royalties or other related
charges.
12. No
Limitation; Credit Agreement.
This
Agreement has been executed and delivered by the Grantors for the purpose of
recording the security interest granted to Administrative Agent with respect
to
the IP Collateral with the United States Patent and Trademark Office. The
security interest granted hereby has been granted as a supplement to, and not
in
limitation of, the security interest granted to Administrative Agent under
the
Credit Agreement. The Credit Agreement (and all rights and remedies of the
Grantors, Administrative Agent, and the Lenders thereunder) shall remain in
full
force and effect in accordance with its terms. In the event of a conflict
between this Agreement and the Credit Agreement, the terms of this Agreement
shall control with respect to the IP Collateral and the Credit Agreement with
respect to all other Collateral.
13. Termination;
Release of Trademark Collateral.
This
Agreement and all obligations of the Grantors and Administrative Agent hereunder
shall terminate on the date upon which the Obligations are performed in full
and
indefeasibly paid in full in cash and the Credit Agreement and other Loan
Documents are terminated in accordance with the terms of the Credit Agreement.
Upon termination of this Agreement, Administrative Agent shall, at the expense
of the Grantors, take such actions required by the Credit Agreement to release
its security interest in the IP Collateral.
14. Binding
Effect; Benefits.
This
Agreement shall be binding upon the Grantors and their respective successors
and
assigns, and shall inure to the benefit of Administrative Agent, the Lenders
and
their respective successors and assigns.
15. GOVERNING
LAW.
THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE
OF
NEW YORK, WITHOUT GIVING EFFECT TO ITS CHOICE OF LAW PROVISIONS.
[Remainder
of Page Intentionally Left Blank]
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IN
WITNESS WHEREOF,
the
parties have caused this Intellectual Property Security Agreement to be executed
by its duly authorized representatives as of the date first above
written.
|
THE
BOMBAY COMPANY, INC.
|
|
By:________________________________________
Name:
Title:
|
|
BBA
HOLDINGS, LLC
|
|
By:_______________________________________
Name:
Title:
|
|
BOMBAY
INTERNATIONAL, INC.
|
|
By:________________________________________
Name:
Title:
|
|
GENERAL
ELECTRIC CAPITAL CORPORATION,
as
Administrative Agent for itself and the Lenders
|
|
By:________________________________________
Name:
Title:
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Schedule
I
[SCHEDULE
IP BY EACH GRANTOR]
TRADEMARK
APPLICATIONS AND REGISTRATIONS
|
Trademark
|
Country
|
Status
|
App.
No./
Reg.
No.
|
App.
Date/
Reg.
Date
|
TRADEMARK
LICENSES
|
Name
of Agreement
|
Parties
|
Date
of Agreement
|
LIST
OF COPYRIGHTS AND APPLICATIONS
LIST
OF PATENTS
PATENT
APPLICATIONS AND REGISTRATIONS
|
Country
|
Status
|
Application
No./ Registration No.
|
Description
of Patent
|
Date
of Filing
|
PATENT
LICENSES
|
Name
of Agreement
|
Parties
|
Date
of Agreement
|