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COLLATERAL ASSIGNMENT, PATENT MORTGAGE
AND SECURITY AGREEMENT
This Collateral Assignment, Patent Mortgage and Security Agreement (the
"Assignment") is made as of the 23rd day of April, 1998, by and between ACE*COMM
CORPORATION, a Maryland corporation ("Assignor"), and CRESTAR BANK ("Assignee").
RECITALS
Assignee has entered into a Loan and Security Agreement of even date
herewith (as amended, modified or supplemented from time to time, the "Loan
Agreement," the terms defined therein and not otherwise defined herein being
used herein as therein defined) with Assignor. It is a condition precedent to
the making of Loans by Assignee under the Loan Agreement that Assignor shall
have assigned certain property to Assignee in accordance with this Assignment.
NOW, THEREFORE, FOR VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF
WHICH ARE ACKNOWLEDGED, THE PARTIES HERETO AGREE AS FOLLOWS:
1. Assignment, Patent Mortgage and Grant of Security Interest. As
collateral security for the prompt and complete payment and performance of the
Obligations (as defined below), Assignor hereby assigns, transfers, conveys and
grants a security interest and mortgage to Assignee, as security, but not as an
ownership interest, in and to Assignor's entire right, title and interest in, to
and under the following (all of which shall collectively be called the
"Collateral"):
(a) All present and future United States registered copyrights and
copyright registrations, including, without limitation, the registered
copyrights listed in Exhibit A-1 to this Agreement (and including all of the
exclusive rights afforded a copyright registrant in the United States under 17
U.S.C. Section 106 and any exclusive rights which may in the future arise by act
of Congress or otherwise) and all present and future applications for copyright
registrations (including applications for copyright registrations of derivative
works and compilations) (collectively, the "Registered Copyrights"), and any and
all royalties, payments, and other amounts payable to Assignor in connection
with the Registered Copyrights, together with all renewals and extensions of the
Registered Copyrights, the right to recover for all past, present, and future
infringements of the Registered Copyrights, and all computer programs, computer
databases, computer program flow diagrams, source codes, object codes and all
tangible property embodying or incorporating the Registered Copyrights, and all
other rights of every kind whatsoever accruing thereunder or pertaining thereto;
(b) All present and future copyrights, or contract or license rights
arising from agreements by which Assignor is a licensee, which are not
registered in the United States Copyright Office (the "Unregistered Rights"),
whether now owned or hereafter acquired, including without limitation the
Unregistered Rights listed in Exhibit A-2 to this Agreement, and any and all
royalties, payments, and other amounts payable to Assignor in connection with
the
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Unregistered Rights, together with all renewals and extensions of the
Unregistered Rights, the right to recover for all past, present, and future
infringements of the Unregistered Rights, and all computer programs, computer
databases, computer program flow diagrams, source codes, object codes and all
tangible property embodying or incorporating the Unregistered Rights, and all
other rights of every kind whatsoever accruing thereunder or pertaining thereto.
The Registered Copyrights and the Unregistered Rights collectively are referred
to herein as the "Copyrights";
(c) All right, title and interest in and to any and all present and
future license agreements with respect to the Copyrights, including without
limitation the license agreements listed in Exhibit A-3 to this Agreement (the
"Licenses");
(d) All present and future accounts, accounts receivable and other
rights to payment arising from, in connection with or relating to the
Copyrights;
(e) Any and all trade secrets, and any and all intellectual property
rights in computer software and computer software products now or hereafter
existing, owned by Assignor;
(f) Any and all design rights which may be owned by Assignor now or
hereafter existing, created, acquired or held;
(g) All patents, patent applications and like protections including,
without limitation, improvements, divisions, continuations, renewals, reissues,
extensions and continuations-in-part of the same, including without limitation
the patents and patent applications set forth on Exhibit B attached hereto
(collectively, the "Patents"), and any and all royalties, payments, and other
amounts payable to Assignor in connection with the Patents, together with all
renewals and extensions of the Patents, the right to recover for all past,
present, and future infringements of the Patents, and all computer programs,
computer databases, computer program flow diagrams, source codes, object codes
and all tangible property embodying or incorporating the Patents, and all other
rights of every kind whatsoever accruing thereunder or pertaining thereto;
(h) Any trademark and servicemark rights, whether registered or not,
applications to register, and the entire goodwill of the business of Assignor
connected with and symbolized by such trademarks, including without limitation
those set forth on Exhibit C attached hereto (collectively, the "Trademarks"),
and any and all royalties, payments, and other amounts payable to Assignor in
connection with the Trademarks, together with all renewals and extensions of the
Trademarks, and the right to recover for all past, present, and future
infringements of the Trademarks;
(i) Any and all claims for damages by way of past, present and future
infringements of any of the rights included above, with the right, but not the
obligation, to xxx for and collect such damages for said use or infringement of
the intellectual property rights identified above;
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(j) All licenses or other rights to use any of the Copyrights,
Patents or Trademarks, and all license fees and royalties arising from such use
to the extent permitted by such license or rights;
(k) All amendments, extensions, renewals and extensions of any of the
Copyrights, Trademarks or Patents; and
(l) All proceeds and products of the foregoing, including without
limitation all payments under insurance or any indemnity or warranty payable in
respect of any of the foregoing.
THE INTEREST IN THE COLLATERAL BEING ASSIGNED HEREUNDER SHALL NOT BE CONSTRUED
AS A CURRENT ASSIGNMENT, BUT AS A CONTINGENT ASSIGNMENT TO SECURE ASSIGNOR'S
OBLIGATIONS TO ASSIGNEE.
This Assignment secures the payment of all obligations of Assignor now or
hereafter existing under the Loan Agreement, including, but not limited to, the
Loans, the Revolving Notes, and all obligations, indebtedness and liabilities of
Assignor under this Assignment and each other Loan Document, and all other
obligations, indebtedness and liabilities of Assignor to Assignee, whether now
existing or hereafter arising, whether or not evidenced by notes or other
instruments, and whether such obligations, indebtedness and liabilities are
direct or indirect, fixed or contingent, liquidated or unliquidated, due or to
become due, joint, several, or joint and several (all such obligations of
Assignor being the "Obligations"). Without limiting the generality of the
foregoing, this Assignment secures the payment of all amounts that constitute
part of the Obligations and would be owed by Assignor to Assignee but for the
fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving Assignor.
2. Authorization and Request. Assignor authorizes and requests that the
Register of Copyrights and the Commissioner of Patents and Trademarks record
this conditional assignment.
3. Covenants and Warranties. Assignor represents, warrants, covenants and
agrees as follows:
(a) Assignor is now the sole owner of its Collateral, except for
non-exclusive licenses granted by Assignor to its Customers in the ordinary
course of business.
(b) Listed on Exhibits A-1 and A-2 are all material Copyrights owned
by Assignor, in which Assignor has an interest (excluding off-the-shelf licensed
software and databases), or which are used in Assignor's business. Listed on
Exhibit A-3 are all material Licenses pursuant to which Assignor has a right to
use the Collateral, in which Assignor has an interest (excluding off-the-shelf
licensed software and databases), or which are used in Assignor's business.
Listed on Exhibit B are all material Patents owned by Assignor, in which
Assignor has an interest, or which are licensed to Assignor for use in
Assignor's business. Listed on Exhibit C are all material Trademarks owned by
Assignor, in which Assignor has an interest, or which are used in Assignor's
business.
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(c) Each employee, agent and/or independent contractor of Assignor
who has participated in the creation of the property constituting the Collateral
has either executed an assignment of his or her rights of authorship to Assignor
or is an employee of Assignor acting within the scope of his or her employment
and was such an employee at the time of said creation.
(d) All of Assignor's present and future Collateral (including,
without limitation, software, computer programs and other works of authorship)
subject or entitled to United States copyright, patent or trademark protection,
the sale, licensing or other disposition of which results in royalties
receivable, license fees receivable, accounts receivable or other sums owing to
Assignor (collectively, "Receivables"), have been and shall be registered with
the United States Copyright Office or the United States Patent and Trademark
Office, as applicable, prior to the date Assignor includes any such Receivables
in the Borrowing Base, and Assignor shall provide to Assignee copies of all such
registrations promptly upon the receipt of the same.
(e) Assignor shall undertake all reasonable measures to cause its
employees, agents and independent contractors to assign to Assignor all rights
of authorship to any copyrighted material in which Assignor has or may
subsequently acquire any right or interest.
(f) Performance of this Assignment does not conflict with or result
in a breach of any agreement to which Assignor is bound, except to the extent
that certain intellectual property agreements prohibit the disclosure of
information or the assignment of the rights thereunder to a third party without
the licensor's or other party's consent and this Assignment constitutes an
assignment or requires such disclosure.
(g) During the term of this Assignment, without the prior written
consent of Assignee, Assignor will not transfer or otherwise encumber any
interest in the Collateral, except for non-exclusive licenses granted by
Assignor in the ordinary course of business or as set forth in this Assignment.
(h) Each part of the Collateral is valid and enforceable, and no part
of the Collateral has been judged invalid or unenforceable, in whole or in part,
and no claim has been made that any part of the Collateral violates the rights
of any third party.
(i) Assignor shall promptly advise Assignee of any material change in
the composition of the Collateral, including but not limited to any subsequent
ownership right of Assignor in or to any Trademark, Patent or Copyright not
specified in this Assignment.
(j) Assignor shall (1) protect, defend and maintain the validity and
enforceability of the Trademarks, Patents and Copyrights, subject to Assignor's
reasonable business judgment as to the value of the Trademark, Patent or
Copyright, and the cost of such defense, (2) use commercially reasonable efforts
to detect infringements of the Trademarks, Patents and Copyrights and promptly
advise Assignee in writing of material infringements detected, and (3) not allow
any Trademarks, Patents, or Copyrights to be abandoned, forfeited or dedicated
to the public without the written consent of Assignee, which shall not be
unreasonably withheld, unless Assignor determines that reasonable business
practices suggest that abandonment is appropriate.
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(k) Assignor shall promptly register the most recent version of any
of Assignor's Copyrights, Trademarks or Patents, if not so already registered,
that are material to Assignor's business, and shall, from time to time, execute
and file such other instruments, and take such further actions as Assignee may
reasonably request from time to time to perfect or continue the perfection of
Assignee's interest in the Collateral.
(l) This Assignment creates, and in the case of after acquired
Collateral, this Assignment will create at the time Assignor first has rights in
such after acquired Collateral, in favor of Assignee a valid and perfected first
priority security interest in the Collateral in the United States securing the
payment and performance of the Obligations upon making the filings referred to
in clause (m) below.
(m) To its knowledge, except for, and upon, the filing with the
United States Patent and Trademark office with respect to the Patents and
Trademarks and the Register of Copyrights with respect to the Copyrights
necessary to perfect the security interests and assignment created hereunder and
except as has been already made or obtained, no authorization, approval or other
action by, and no notice to or filing with, any U.S. governmental authority or
U.S. regulatory body is required either (1) for the grant by Assignor of the
security interest granted hereby or for the execution, delivery or performance
of this Assignment by Assignor in the U.S. or (2) for the perfection in the
United States or the exercise by Assignee of its rights and remedies thereunder.
(n) All information heretofore, herein or hereafter supplied to
Assignee by or on behalf of Assignor with respect to the Collateral is accurate
and complete in all material respects.
(o) Assignor shall not enter into any agreement that would materially
impair or conflict with Assignor's obligations hereunder without Assignee's
prior written consent. Assignor shall not permit the inclusion in any material
contract to which it becomes a party of any provisions that could or might in
any way prevent the creation of a security interest in Assignor's rights and
interest in any property included within the definition of the Collateral
acquired under such contracts.
(p) Upon any executive officer of Assignor obtaining actual knowledge
thereof, Assignor will promptly notify Assignee in writing of any event that
materially adversely affects the value of any material Collateral, the ability
of Assignor to dispose of any material Collateral or the rights and remedies of
Assignee in relation thereto, including the levy of any legal process against
any of the Collateral.
4. Assignee's Rights. Assignee shall have the right, but not the
obligation, to take, at Assignor's sole expense, any actions that Assignor is
required under this Assignment to take but which Assignor fails to take, after
fifteen (15) days' notice to Assignor. Assignor shall reimburse and indemnify
Assignee for all reasonable costs and reasonable expenses incurred in the
reasonable exercise of its rights under this Section 4.
5. Inspection Rights. Assignor hereby grants to Assignee and its
employees, representatives and agents the right to visit, during reasonable
hours upon prior reasonable
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written notice to Assignor, any of Assignor's plants and facilities that
manufacture, install or store products (or that have done so during the prior
six-month period) that are sold utilizing any of the Collateral, and to inspect
the products and quality control records relating thereto upon reasonable
written notice to Assignor and as often as may be reasonably requested, but not
more than one (1) in every six (6) months.
6. Further Assurances; Attorney in Fact.
(a) Assignor will make, execute, acknowledge and deliver, and file
and record in the proper filing and recording places in the United States, all
such instruments, including, appropriate financing and continuation statements
and collateral agreements and filings with the United States Patent and
Trademarks Office and the Register of Copyrights, and take all such action as
may reasonably be deemed necessary or advisable, or as requested by Assignee, to
perfect Assignee's security interest in all Copyrights, Patents and Trademarks
and otherwise to carry out the intent and purposes of this Assignment, or for
assuring and confirming to Assignee the grant or perfection of a security
interest in all Collateral.
(b) Upon an Event of Default, Assignor hereby irrevocably appoints
Assignee as Assignor's attorney-in-fact, with full authority in the place and
stead of Assignor and in the name of Assignor, Assignee or otherwise, from time
to time in Assignee's discretion, upon Assignor's failure or inability to do so,
to take any action and to execute any instrument which Assignee may deem
necessary or advisable to accomplish the purposes of this Assignment, including:
(i) To modify, in its sole discretion, this Assignment without
first obtaining Assignor's approval of or signature to such modification by
amending Exhibit X-0, Xxxxxxx X-0, Exhibit A-3, Exhibit B and Exhibit C,
thereof, as appropriate, to include reference to any right, title or interest in
any Copyrights, Patents or Trademarks acquired by Assignor after the execution
hereof or to delete any reference to any right, title or interest in any
Copyrights, Patents or Trademarks in which Assignor no longer has or claims any
right, title or interest; and
(ii) To file, in its sole discretion, one or more financing or
continuation statements and amendments thereto, relative to any of the
Collateral without the signature of Assignor where permitted by law.
7. Events of Default. The occurrence of any of the following shall
constitute an Event of Default under the Assignment:
(a) An Event of Default occurs under the Loan Agreement; or
(b) Assignor breaches or fails to perform or observe in any material
respect any representation, warranty or agreement made by Assignor in this
Assignment.
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8. Remedies. Upon the occurrence and continuance of an Event of Default,
Assignee shall have the right to exercise all the remedies of a secured party
under the UCC, including without limitation the right to:
(a) require Assignor to assemble any tangible property in which the
Collateral is embodied and in which Assignee has a security interest and to make
it available to Assignee at a place designated by Assignee,
(b) exercise any and all rights as beneficial and legal owner of the
Collateral, including, without limitation, any and all consensual rights and
powers with respect to the Collateral, and
(c) sell or assign or grant a license to use, or cause to be sold or
assigned or grant a license to use any or all of the Collateral or any part
thereof, in each case, free of all rights and claims of Assignor therein and
thereto, except to the extent such actions would violate restrictions against
assignments contained in any Collateral in which Assignor's rights arise by
contract or license. In that connection, Assignee shall have the right to cause
any or all of the Collateral to be transferred of record into the name of
Assignee or its nominee and the right to impose (i) such limitations and
restrictions on the sale or assignment of the Collateral as Assignee may deem to
be necessary or appropriate to comply with any law, rule or regulation having
applicability to such sale or assignment and (ii) requirements for any necessary
governmental approvals. To the extent not inconsistent with any license or
contract under which Assignor's rights arise, Assignee shall have a
nonexclusive, royalty-free license to use the Copyrights, Patents and Trademarks
to the extent reasonably necessary to permit Assignee to exercise its rights and
remedies upon the occurrence of an Event of Default. Assignor will pay any
expenses (including reasonable attorney's fees) incurred by Assignee in
connection with the exercise of any of Assignee's rights hereunder, including
without limitation any expense incurred in disposing of the Collateral. All of
Assignee's rights and remedies with respect to the Collateral shall be
cumulative.
9. Indemnity. Assignor agrees to defend, indemnify and hold harmless
Assignee and its officers, employees, and agents against: (a) all obligations,
demands, claims, and liabilities claimed or asserted by any other party in
connection with the transactions contemplated by this Assignment, and (b) all
losses or expenses in any way suffered, incurred, or paid by Assignee as a
result of or in any way arising out of, following or consequential to
transactions between Assignee and Assignor, whether under this Assignment or
otherwise (including without limitation, reasonable attorneys fees and
reasonable expenses), except for losses arising from or out of Assignee's gross
negligence or willful misconduct.
10. Release. At such time as Assignor shall completely satisfy all of the
Obligations, Assignee shall execute and deliver to Assignor all assignments and
other instruments as may be reasonably necessary or proper to terminate
Assignee's security interest and any conditional assignment in the Collateral,
subject to any disposition of the Collateral which may have been made by
Assignee pursuant to this Assignment. For the purpose of this Assignment, the
Obligations shall be deemed to continue if Assignor enters into any bankruptcy
or similar proceeding at a time when any amount paid to Assignee could be
ordered to be repaid as a
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preference or pursuant to a similar theory, and shall continue until it is
finally determined that no such repayment can be ordered.
11. No Waiver. No course of dealing between Assignor and Assignee, nor any
failure to exercise nor any delay in exercising, on the part of Assignee, any
right, power, or privilege under this Agreement or under the Loan Agreement or
any other agreement, shall operate as a waiver. No single or partial exercise of
any right, power, or privilege under this Assignment or under the Loan Agreement
or any other agreement by Assignee shall preclude any other or further exercise
of such right, power, or privilege or the exercise of any other right, power, or
privilege by Assignee.
12. Rights Are Cumulative. All of Assignee's rights and remedies with
respect to the Collateral whether established by this Assignment, the Loan
Agreement, or any other documents or agreements, or by law shall be cumulative
and may be exercised concurrently or in any order.
13. Course of Dealing. No course of dealing, nor any failure to exercise,
nor any delay in exercising any right, power or privilege hereunder shall
operate as a waiver thereof.
14. Attorneys' Fees. If any action relating to this Assignment is brought
by either party hereto against the other party, the prevailing party shall be
entitled to recover reasonable attorneys fees, costs and disbursements.
15. Amendments. This Assignment may be amended only by a written
instrument signed by both parties hereto. To the extent that any provision of
this Agreement conflicts with any provision of the Loan Agreement, the provision
giving Assignee greater rights or remedies shall govern, it being understood
that the purpose of this Assignment is to add to, and not detract from, the
rights granted to Assignee under the Loan Agreement. This Assignment, the Loan
Agreement, and the documents relating thereto comprise the entire agreement of
the parties with respect to the matters addressed in this Assignment.
16. Severability. The provisions of this Assignment are severable. If any
provision of this Assignment is held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such provision, or part thereof, in such jurisdiction, and shall not in any
manner affect such provision or part thereof in any other jurisdiction, or any
other provision of this Assignment in any jurisdiction.
17. Counterparts. This Assignment may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute the same instrument.
18. Governing Law and Jurisdiction. This Assignment shall be governed by
the laws of the State of Maryland, without regard for choice of law provisions.
Assignor and Assignee consent to the nonexclusive jurisdiction of any state or
federal court located in Xxxxxxxxxx County, Maryland.
19. Confidentiality. In handling any confidential information, each of
Assignee and its agents shall exercise the same degree of care that its exercise
with respect to its own
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proprietary information of the same types to maintain the confidentiality of any
non-public information thereby received or received pursuant to this Assignment
except that the disclosure of this information may be made (a) to the affiliates
of Assignee, (b) to prospective transferee or purchasers of an interest in the
obligations secured hereby, provided that they have entered into a comparable
confidentiality agreement in favor of Assignor and have delivered a copy to
Assignor, (c) as required by law, regulation, rule or order, subpoena judicial
order or similar order and (d) as may be required in connection with the
examination, audit or similar investigation of Assignee.
20. WAIVER OF RIGHT TO JURY TRIAL. ASSIGNEE AND ASSIGNOR EACH HEREBY WAIVE
THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT
OF, OR IN ANY WAY RELATING TO: (a) THIS AGREEMENT; OR (b) ANY OTHER PRESENT OR
FUTURE INSTRUMENT OR AGREEMENT BETWEEN ASSIGNEE AND ASSIGNOR; OR (c) ANY
CONDUCT, ACTS OR OMISSIONS OF ASSIGNEE OR ASSIGNOR OR ANY OF THEIR DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH
ASSIGNEE OR ASSIGNOR; IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN
CONTRACT OR TORT OR OTHERWISE.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed this Assignment on
the day and year first above written.
ADDRESS OF ASSIGNOR: ASSIGNOR:
ACE*COMM CORPORATION,
000 Xxxxxx Xxxxxxx Xxxx a Maryland corporation
Xxxxxxxxxxxx, Xxxxxxxx 00000
By:
---------------------------
Name:
-------------------------
Title:
------------------------
ADDRESS OF ASSIGNEE: ASSIGNEE:
CRESTAR BANK
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
By:
---------------------------
Name:
-------------------------
Title:
------------------------
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___________ OF ____________ )
) ss.
COUNTY OF _________________ )
On _____________________, 1998, before me, _____________________________
_______________________________________, Notary Public, personally appeared
_______________________________________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
-------------------------------
Notary Public
(Seal)
______________ OF _________ )
) ss.
COUNTY OF _________________ )
On _____________________, 1998, before me, _______________________________
___________________________________, Notary Public, personally appeared
_______________________________________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
-------------------------------
Notary Public
(Seal)
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Exhibit "A-1" attached to that certain Collateral Assignment, Patent Mortgage
and Security Agreement
EXHIBIT "A-1"
REGISTERED COPYRIGHTS
REG. NO. REG. DATE COPYRIGHT
-------- --------- ---------
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Exhibit "A-2" attached to that certain Collateral Assignment, Patent Mortgage
and Security Agreement
EXHIBIT "A-2"
UNREGISTERED RIGHTS
DESCRIPTION OF COPYRIGHTS
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Exhibit "A-3" attached to that certain Collateral Assignment, Patent Mortgage
and Security Agreement
EXHIBIT "A-3"
DESCRIPTION OF LICENSE AGREEMENTS
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Exhibit "B" attached to that certain Collateral Assignment, Patent Mortgage and
Security Agreement
EXHIBIT "B"
PATENTS
DOCKET NO. COUNTRY SERIAL NO. FILING DATE STATUS
---------- ------- ---------- ----------- -------
16
Exhibit "C" attached to that certain Collateral Assignment, Patent Mortgage and
Security Agreement
EXHIBIT "C"
TRADEMARKS
XXXX COUNTRY SERIAL NO. STATUS
---- ------- ---------- ------
