Exhibit 10.60
INTELLECTUAL PROPERTY SECURITY AGREEMENT
This Intellectual Property Security Agreement (this "IP Agreement") is
made as of the 14th day of May, 2002 by and between INTERLIANT, INC., a Delaware
corporation with its principal place of business at 0 Xxxxxxxxxxxxxx Xxxx,
Xxxxxxxx, Xxx Xxxx 00000 ("Grantor"), and SILICON VALLEY BANK, a
California-chartered bank, with its principal place of business at 0000 Xxxxxx
Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000 and with a loan production office located
at One Newton Executive Park, Suite 200, 0000 Xxxxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, doing business under the name "Silicon Valley East"
("Lender").
RECITALS
A. Lender has agreed to make advances of money and to extend certain
financial accommodations to Grantor (the "Loan"), pursuant to a certain Loan and
Security Agreement of even date between Grantor and Lender, as amended from time
to time (as amended, the "Loan Agreement"). The Loan is secured pursuant to the
terms of the Loan Agreement. Lender is willing to enter into certain financial
accommodations with Grantor, but only upon the condition, among others, that
Grantor shall grant to Lender a security interest in certain Copyrights,
Trademarks, Patents, and Mask Works, and other assets, to secure the obligations
of Grantor under the Loan Agreement. Defined terms used but not defined herein
shall have the same meanings as in the Loan Agreement.
B. Pursuant to the terms of the Loan Agreement, Grantor has granted to
Lender a security interest in all of Grantor's right title and interest, whether
presently existing or hereafter acquired in, to and under all of the Collateral
(as defined therein).
NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged and intending to be legally bound, as collateral security
for the prompt and complete payment when due of Grantor's Indebtedness (as
defined below), Grantor hereby represents, warrants, covenants and agrees as
follows:
1. Grant of Security Interest. As collateral security for the prompt
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and complete payment and performance of all of Grantor's present or future
indebtedness, obligations and liabilities to Lender (hereinafter, the
"Indebtedness"), including, without limitation, under the Loan Agreement,
Grantor hereby grants a security interest in all of Grantor's right, title and
interest in, to and under its registered and unregistered intellectual property
collateral (all of which shall collectively be called the "Intellectual Property
Collateral"), including, without limitation, the following:
(a) Any and all copyright rights, copyright applications, copyright
registrations and like protections in each work or authorship and
derivative work thereof, whether published or unpublished and whether
or not the same also constitutes a trade secret, now or hereafter
existing, created, acquired or held, including without limitation those
set forth on EXHIBIT A attached hereto (collectively, the
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"Copyrights");
(b) Any and all trade secret rights, including any rights to
unpatented inventions, know-how, operating manuals, license rights and
agreements, and confidential information, and any and all intellectual
property rights in computer software and computer software products now
or hereafter existing, created, acquired or held;
(c) Any and all design rights which may be available to Grantor now
or hereafter existing, created, acquired or held;
(d) 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");
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(e) Any trademark and service xxxx rights, slogans, trade dress,
and tradenames, trade styles, whether registered or not, applications
to register and registrations of the same and like protections, and the
entire goodwill of the business of Grantor connected with and
symbolized by such trademarks, including without limitation those set
forth on EXHIBIT C attached hereto (collectively, the "Trademarks");
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(f) All mask works or similar rights available for the protection
of semiconductor chips, now owned or hereafter acquired, including,
without limitation those set forth on EXHIBIT D attached hereto
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(collectively, the "Mask Works");
(g) 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;
(h) All licenses or other rights to use any of the Copyrights,
Patents, Trademarks, or Mask Works and all license fees and royalties
arising from such use to the extent permitted by such license or
rights, including, without limitation those set forth on EXHIBIT E
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attached hereto; and
(i) All amendments, extensions, renewals and extensions of any of
the Copyrights, Trademarks, Patents, or Mask Works; and
(j) 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.
2. Authorization and Request. Grantor authorizes and requests that the
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Register of Copyrights and the Commissioner of Patents and Trademarks record
this IP Agreement.
3. Covenants and Warranties. Grantor represents, warrants, covenants
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and agrees as follows:
(a) Grantor is now the sole owner of the Intellectual Property
Collateral, except for non-exclusive licenses granted by Grantor to its
customers in the ordinary course of business.
(b) Performance of this IP Agreement does not conflict with or
result in a breach of any material agreement to which Grantor is bound
or to transferees of assets in connection with certain permitted
dispositions of business assets of Grantor.
(c) During the term of this IP Agreement, Grantor will not transfer
or otherwise encumber any interest in the Intellectual Property
Collateral, except for non-exclusive licenses granted by Grantor in the
ordinary course of business or as set forth in this IP Agreement;
(d) To its knowledge, each of the Patents is valid and enforceable,
and no part of the Intellectual Property Collateral has been judged
invalid or unenforceable, in whole or in part, and no claim has been
made that any part of the Intellectual Property Collateral violates the
rights of any third party;
(e) Grantor shall promptly advise Lender of any material adverse
change in the composition of the Collateral, including but not limited
to any subsequent ownership right of the Grantor in or to any
Trademark, Patent, Copyright, or Mask Work specified in this IP
Agreement;
(f) Grantor shall (i) protect, defend and maintain the validity and
enforceability of the Trademarks, Patents, Copyrights, and Mask Works,
(ii) use its best efforts to detect infringements of the Trademarks,
Patents, Copyrights, and Mask Works and promptly advise Lender in
writing of material infringements detected and (iii) not allow any
Trademarks, Patents, Copyrights, or Mask Works to be
abandoned, forfeited or dedicated to the public without the written
consent of Lender, which shall not be unreasonably withheld, unless
Grantor determines that reasonable business practices suggest that
abandonment is appropriate.
(g) Grantor shall promptly register the most recent version of any
of Grantor's Copyrights, if not so already registered, and shall, from
time to time, execute and file such other instruments, and take such
further actions as Lender may reasonably request from time to time to
perfect or continue the perfection of Lender's interest in the
Intellectual Property Collateral;
(h) This IP Agreement creates, and in the case of after acquired
Intellectual Property Collateral, this IP Agreement will create at the
time Grantor first has rights in such after acquired Intellectual
Property Collateral, in favor of Lender a valid and perfected first
priority security interest and collateral assignment in the
Intellectual Property Collateral in the United States securing the
payment and performance of the obligations evidenced by the Loan
Agreement upon making the filings referred to in clause (i) below;
(i) To its knowledge, except for, and upon, the filing of UCC
financing statements in the appropriate filing office and 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 and Mask Works necessary to perfect the security interests
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 (i) for the grant by Grantor of the security interest
granted hereby, or for the execution, delivery or performance of this
IP Agreement by Grantor in the U.S. or (ii) for the perfection in the
United States or the exercise by Lender of its rights and remedies
thereunder;
(j) All information heretofore, herein or hereafter supplied to
Lender by or on behalf of Grantor with respect to the Intellectual
Property Collateral is accurate and complete in all material respects.
(k) Grantor shall not enter into any agreement that would
materially impair or conflict with Grantor's obligations hereunder
without Lender's prior written consent, which consent shall not be
unreasonably withheld, delayed or conditioned. Grantor 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 Grantor's rights and interest in any property
included within the definition of the Intellectual property Collateral
acquired under such contracts.
(l) Upon any executive officer of Grantor obtaining actual
knowledge thereof, Grantor will promptly notify Lender in writing of
any event that materially adversely affects the value of any material
Intellectual Property Collateral, the ability of Grantor to dispose of
any material Intellectual Property Collateral of the rights and
remedies of Lender in relation thereto, including the levy of any legal
process against any of the Intellectual Property Collateral.
4. Lender's Rights. Lender shall have the right, but not the
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obligation, to take, at Grantor's sole expense, any actions that Grantor is
required under this IP Agreement to take but which Grantor fails to take, after
fifteen (15) days' written notice to Grantor. Grantor shall reimburse and
indemnify Lender for all reasonable costs and reasonable expenses incurred in
the reasonable exercise of its rights under this section 4.
5. Inspection Rights. Grantor hereby grants to Lender and its
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employees, representatives and agents the right to visit, during reasonable
hours upon prior reasonable written notice to Grantor, any of Grantor'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
Intellectual Property Collateral, and to inspect the products and quality
control records relating thereto upon reasonable written notice to Grantor and
as often as may be reasonably requested, but not more
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than once in every six (6) months; provided, however, nothing herein shall
entitle Lender access to Grantor's trade secrets and other proprietary
information.
6. Further Assurances; Attorney in Fact.
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(a) On a continuing basis, Grantor will, upon request by Lender,
subject to any prior licenses, encumbrances and restrictions and prospective
licenses, 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 Lender, to perfect Lender's security
interest in all Copyrights, Patents, Trademarks, and Mask Works and otherwise to
carry out the intent and purposes of this IP Agreement, or for assuring and
confirming to Lender the grant or perfection of a security interest in all
Intellectual Property Collateral.
(b) Grantor hereby irrevocably appoints Lender as Grantor's
attorney-in-fact, with full authority in the place and stead of Grantor and in
the name of Grantor, Lender or otherwise, from time to time in Lender's
reasonable discretion, upon Grantor's failure or inability to do so within
thirty (30) days of written notice from Lender, to take any action and to
execute any instrument which Lender may deem reasonably necessary or advisable
to accomplish the purposes of this IP Agreement, including:
(i) To modify, in its sole discretion, this IP Agreement
without first obtaining Grantor's approval of or signature to such
modification by amending Exhibit A, Exhibit B, Exhibit C, and Exhibit D
hereof, as appropriate, to include reference to any right, title or
interest in any Copyrights, Patents, Trademarks or Mask Works acquired
by Grantor after the execution hereof or to delete any reference to any
right, title or interest in any Copyrights, Patents, Trademarks, or
Mask Works in which Grantor 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
Intellectual Property Collateral without the signature of Grantor where
permitted by law.
(iii) Grantor hereby authorizes Lender to file financing
statements without notice to Grantor with all appropriate
jurisdictions, as Lender deems appropriate, in order to further perfect
or protect Lender's interest in the Intellectual Property Collateral,
provided however, that Lender shall notify Grantor promptly after such
filing and provide Grantor with a copy of such filing with recording
information noted thereon.
7. Events of Default. The occurrence of any of the following shall
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constitute an Event of Default under this IP Agreement:
(a) An Event of Default occurs under the Loan Agreement; or any
document from Grantor to Lender; or
(b) Grantor breaches any warranty or agreement made by Grantor in
this IP Agreement and such breach is not cured within thirty (30) days
of written notice from Lender.
8. Remedies. Upon the occurrence and continuance of an Event of
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Default, Lender shall have the right to exercise all the remedies of a secured
party under the Massachusetts Uniform Commercial Code, including without
limitation the right to require Grantor to assemble the Intellectual Property
Collateral and any tangible property in which Lender has a security interest and
to make it available to Lender at a place designated by Lender. Lender shall
have a nonexclusive, royalty free license to use the Copyrights, Patents,
Trademarks, and Mask Works
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to the extent reasonably necessary to permit Lender to exercise its rights and
remedies upon the occurrence of an Event of Default. Grantor will pay any
reasonable expenses (including reasonable attorney's fees) incurred by Lender in
connection with the exercise of any of Lender's rights hereunder, including
without limitation any expense incurred in disposing of the Intellectual
Property Collateral. All of Lender's rights and remedies with respect to the
Intellectual Property Collateral shall be cumulative.
9. Indemnity. Grantor agrees to defend, indemnify and hold harmless
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Lender 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 IP Agreement, and (b) all
direct losses or expenses suffered, incurred, or paid by Lender as a result of
the transactions between Lender and Grantor, under this IP Agreement (including
without limitation, reasonable attorneys fees and reasonable expenses), except
for losses arising from or out of Lender's gross negligence or willful
misconduct.
10. Reassignment. At such time as Grantor shall completely satisfy all
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of the obligations secured hereunder, Lender shall promptly execute and deliver
to Grantor all deeds, assignments, and other instruments as may be necessary or
proper to reinvest in Grantor full title to the property assigned hereunder,
subject to any disposition thereof which may have been made by Lender pursuant
hereto.
11. Course of Dealing. No course of dealing, nor any failure to
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exercise, nor any delay in exercising any right, power or privilege hereunder
shall operate as a waiver thereof.
12. Amendments. This IP Agreement may be amended only by a written
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instrument signed by both parties hereto.
13. Counterparts. This IP Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original but all of which
together shall constitute the same instrument.
14. Law and Jurisdiction. This IP Agreement shall be governed by and
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construed in accordance with the laws of the Commonwealth of Massachusetts.
GRANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE COMMONWEALTH OF MASSACHUSETTS IN ANY ACTION, SUIT,
OR PROCEEDING OF ANY KIND, AGAINST IT WHICH ARISES OUT OF OR BY REASON OF THIS
AGREEMENT; PROVIDED, HOWEVER, THAT IF FOR ANY REASON LENDER CANNOT AVAIL ITSELF
OF THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS, GRANTOR ACCEPTS JURISDICTION
OF THE COURTS AND VENUE IN SANTA XXXXX COUNTY, CALIFORNIA. NOTWITHSTANDING THE
FOREGOING, THE LENDER SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING
AGAINST THE GRANTOR OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION
WHICH THE LENDER DEEMS NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE
COLLATERAL OR TO OTHERWISE ENFORCE THE LENDER'S RIGHTS AGAINST THE GRANTOR OR
ITS PROPERTY.
GRANTOR AND LENDER EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE
LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER
CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH
PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
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15. Confidentiality. In handling any confidential information, Lender
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shall exercise the same degree of care that it exercises for its own proprietary
information, but disclosure of information may be made: (i) to Lender's
subsidiaries or affiliates in connection with their present or prospective
business relations with Grantor; (ii) to prospective transferees or purchasers
of any interest in the Loans; (iii) as required by law, regulation, subpoena, or
other order, (iv) as required in connection with Lender's examination or audit;
and (v) as Lender considers appropriate in exercising remedies under this
Agreement. Confidential information does not include information that either:
(a) is in the public domain or in Lender's possession when disclosed to Lender,
or becomes part of the public domain after disclosure to Lender; or (b) is
disclosed to Lender by a third party, if Lender reasonably does not know that
the third party is prohibited from disclosing the information.
16. Notices. All notices given by either party hereunder shall be in
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writing and delivered either by a reputable overnight courier or by certified
mail, return receipt requested to the address of the appropriate party listed
below. Notices shall be effective upon receipt.
If to Grantor: Interliant, Inc. If to Lender: Silicon Valley Bank
2 Manhattanville Road One Newton Executive
Xxxxxxxx, XX 00000 Park
Attention: General Counsel 0000 Xxxxxxxxxx
Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxxxxx
00000
Attention: Xx. Xxxx
X. Xxxxxxx
EXECUTED as a sealed instrument under the laws of the Commonwealth of
Massachusetts on the day and year first written above.
GRANTOR:
INTERLIANT, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
--------------------------------
Title: Chief Financial Officer
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SILICON VALLEY BANK
By: /s/ Xxxx X. Xxxx
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Name: Xxxx X. Xxxx
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Title: Vice President
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Exhibit "A" attached to that certain Intellectual Property Security
Agreement dated May 14, 2002.
EXHIBIT "A"
COPYRIGHTS
SCHEDULE A - ISSUED COPYRIGHTS
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COPYRIGHT REGISTRATION DATE OF
DESCRIPTION NUMBER ISSUANCE
----------- --------- --------
None
SCHEDULE B - PENDING COPYRIGHT APPLICATIONS
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FIRST DATE
COPYRIGHT APPLICATION DATE OF DATE OF OF PUBLIC
DESCRIPTION NUMBER FILING CREATION DISTRIBUTION
----------- ----------- ------ -------- ------------
None
SCHEDULE C - UNREGISTERED COPYRIGHTS (Where No Copyright Application is Pending)
--------------------------------------------------------------------------------
DATE AND
RECORDATION
NUMBER OF IP
AGREEMENT WITH
OWNER OR ORIGINAL
GRANTOR IF ORIGINAL AUTHOR
AUTHOR OR OWNER OR OWNER OF
FIRST DATE OF COPYRIGHT COPYRIGHT IS
COPYRIGHT DATE OF OF IS DIFFERENT DIFFERENT ROM
DESCRIPTION CREATION DISTRIBUTION FROM GRANTOR GRANTOR
----------- -------- ------------ ------------ -------------
Grantor has copyrights in certain literature such as marketing, sales and
training materials, but does not register those copyrights as they have little,
if any, commercial value, to Grantor's knowledge. Grantor may also have
copyrights in certain literature and computer code developed for specific
customers, but Grantor has not registered these rights because to Grantor's
knowledge, the material does not have general applicability or mass market
potential.
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Exhibit "B" attached to that certain Intellectual Property Security Agreement
dated May 14, 2002.
EXHIBIT "B"
PATENTS
PATENT
DESCRIPTION DOCKET NO. COUNTRY SERIAL NO. FILING DATE STATUS
----------- ---------- ------- ---------- ----------- ------
None
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Exhibit "C" attached to that certain Intellectual Property Security Agreement
dated May 14, 2002.
EXHIBIT "C"
TRADEMARKS
TRADEMARK
DESCRIPTION COUNTRY SERIAL NO. REG. NO STATUS
----------- ------- ---------- ------- ------
INTERLIANT 75/153,487 Open
NAVITUS 75/152,584 Open
INTERLIANT - CANADA 846,571 Open
INTERLIANT - JAPAN 118322/1977 Open
EEC SERVICE XXXX 000469585 Open
INTERLIANT LOGO 75/393,989 Open
INTERLIANT - MEXICO 301,505 Open
INTERLIANT ONSIGHT 75/418,781 Open
PRIMETRICS 75/365,331 Open
SALESPACE 75/394,682 Open
LEGALSPACE 75/344,130 Open
ONSIGHT 75/418,782 Closed
BUILDING GLOBAL 75/448,010 Open
COMMUNITIES
APPSTORE 75/542,841 Open
APPSONLINE 75/542,832 Open
ONE WORLD ONE HOST 75/621,388 Open
EREACH 75/781,075 Open
WE SELL SANITY 75/893,785 Open
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Exhibit "D" attached to that certain Intellectual Property Security Agreement
dated May 14, 2002.
EXHIBIT "D"
MASK WORKS
MASK WORK
DESCRIPTION COUNTRY SERIAL NO. REG. NO STATUS
----------- ------- ---------- ------- ------
None
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Exhibit "E" attached to that certain Intellectual Property Security Agreement
dated May 14, 2002.
EXHIBIT "E"
LICENSES
Grantor has certain agreements which contain a license to use its trademarks,
service marks and logos. However, these licenses are granted in connection with
the resale or marketing of Grantor's products and Grantor does not generate any
revenue from the license itself.
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