**Exhibit10.63**INTELLECTUAL PROPERTY SECURITY AGREEMENT     INTELLECTUAL PROPERTY SECURITY AGREEMENT (this “**Agreement**”) dated as of June 26, 2006 by andbetween **REDENVELOPE, INC.**, a Delaware corporation (the “**Grantor**”) with its principal executiveoffices at 149 Montgomery Street, San Francisco California 94105, and **WELLS FARGO RETAIL FINANCE,LLC**, a Delaware limited liability company (the “**Lender**”) with offices at One Boston Place —19th Floor, Boston, Massachusetts, in consideration of the mutual covenants containedherein and benefits to be derived herefrom.WITNESSETH:     Reference is made to the Loan and Security Agreement dated of even date herewith (as amended,modified, supplemented or restated hereafter, the “**Loan Agreement**”) by and between the Grantor andthe Lender. Capitalized terms used herein and not defined herein shall have the meanings assignedto such terms in the Loan Agreement.     The Lender has agreed, among other things, to make Revolving Credit Loans to the Grantorpursuant to, and upon the terms and subject to the conditions specified in, the Loan Agreement.The obligations of the Lender to make Revolving Credit Loans are each conditioned upon, among otherthings, the execution and delivery by the Grantor of an agreement in the form hereof to secure theLiabilities.     Accordingly, the Grantor and the Lender (and each of their respective successors or assigns),hereby agree as follows:     1.**Definitions**: As used herein, the following terms shall have the followingmeanings:     “Copyrights” shall mean all copyrights and like protections in each work of authorshipor derivative work thereof of the Grantor, whether registered or unregistered and whether publishedor unpublished, including, without limitation, the copyrights listed on **EXHIBIT A**annexed heretoand made a part hereof, together with all registrations and recordings thereof, all applications inconnection therewith, and any goodwill of the business connected with, and symbolized by, any ofthe foregoing.     “Copyright Licenses” shall mean all written agreements providing for the grant by orto Grantor of any right to use any Copyright, including, without limitation, the agreements listedon **EXHIBIT A**annexed hereto and made a part hereof.     “Copyright Office” shall mean the United States Copyright Office or any other federalgovernmental agency which may hereafter perform its functions.     “Intellectual Property” shall have the meaning assigned to such term in Section 3hereof.     “IP Collateral” shall have the meaning assigned to such term in Section 2 hereof.     “Licenses” shall mean, collectively, the Copyright Licenses, Patent Licenses andTrademark Licenses.
 

 
     “Patents” shall mean all letters patent and applications for letters patent of theGrantor, and the inventions and improvements therein disclosed, and any and all divisions, reissuesand continuations of said letters patent including, without limitation the patents listed on**EXHIBIT B**annexed hereto and made a part hereof.     “Patent Licenses” shall mean all written agreements providing for the grant by or toGrantor of any right to manufacture, use or sell any invention covered by a Patent, including,without limitation, the agreements listed on **EXHIBIT B**annexed hereto and made a part hereof.     “PTO” shall mean the United States Patent and Trademark Office or any other federalgovernmental agency which may hereafter perform its functions.     “Trademarks” shall mean all trademarks, trade names, corporate names, company names,business names, fictitious business names, trade dress, trade styles, service marks, designs, logosand other source or business identifiers of the Grantor, whether registered or unregistered,including, without limitation, the trademarks listed on **EXHIBIT C**annexed hereto and made a parthereof, together with all registrations and recordings thereof, all applications in connectiontherewith, and any goodwill of the business connected with, and symbolized by, any of theforegoing.     “Trademark Licenses” shall mean all written agreements providing for the grant by orto Grantor of any right to use any Trademark, including, without limitation, the agreements listedon **EXHIBIT C**annexed hereto and made a part hereof.     2.**Grant of Security Interest**: In furtherance and as confirmation of thesecurity interest granted by the Grantor to the Lender under the Loan Agreement, and as furthersecurity for the payment or performance, as the case may be, in full of the Liabilities, Grantorhereby ratifies such security interest and grants to the Lender a continuing security interest,with a power of sale (which power of sale shall be exercisable only following the occurrence of anEvent of Default), in all of the present and future right, title and interest of the Grantor in andto the following property, and each item thereof, whether now owned or existing or hereafteracquired or arising, together with all products, proceeds, substitutions, and accessions of or toany of the following property (collectively, the “IP Collateral”): (a) All Copyrights and Copyright Licenses.  (b) All Patents and Patent Licenses.  (c) All Trademarks and Trademark Licenses.  (d) All renewals of any of the foregoing.  (e) All General Intangibles connected with the use of, or related to, any and allIntellectual Property (including, without limitation, all goodwill of the Grantor andits business, products and services appurtenant to, associated with, or symbolized by,any and all Intellectual Property and the use thereof).  (f) All income, royalties, damages and payments now and hereafter due and/orpayable under and with respect to any of the foregoing, including, without
 

 
   limitation, payments under all Licenses entered into in connection therewith anddamages and payments for past or future infringements or dilutions thereof.  (g) The right to sue for past, present and future infringements and dilutions ofany of the foregoing.  (h) All of the Grantor’s rights corresponding to any of the foregoing throughoutthe world.     3.**Protection of Intellectual Property By Grantors**: Except as set forthbelow in this Section 3, the Grantor shall undertake the following with respect to each of theitems respectively described in Sections 2(a), (b), (c), (d) and (e) (collectively, the“Intellectual Property”): (a) Pay all renewal fees and other reasonable fees and costs associated withmaintaining the Intellectual Property and with the processing of the IntellectualProperty and take all other reasonable and necessary steps to maintain eachregistration of the Intellectual Property.  (b) Take all actions reasonably necessary to prevent any of the IntellectualProperty from becoming forfeited, abandoned, dedicated to the public, invalidated orimpaired in any way.  (c) At the Grantor’s sole cost, expense, and risk, pursue the reasonably prompt,diligent processing of each application for registration which is the subject of thesecurity interest created herein and not abandon or delay any such efforts.  (d) At the Grantor’s sole cost, expense, and risk, take any and all action whichthe Grantor reasonably deems appropriate under the circumstances to protect theIntellectual Property from infringement, misappropriation or dilution, including,without limitation, the prosecution and defense of infringement actions.Notwithstanding the foregoing, so long as no Event of Default has occurred and is continuing, andno Material Adverse Change would result therefrom, Grantor shall not have an obligation to use orto maintain any Intellectual Property (i) that relates solely to any product that has beendiscontinued, abandoned or terminated, (ii) that is not necessary, in the reasonable businessjudgment of the Grantor, for the conduct of the business of the Grantor from time to time or (iii)that has been replaced with Intellectual Property substantially similar to the IntellectualProperty that may be abandoned or otherwise become invalid, so long as the failure to use ormaintain such Intellectual Property does not materially adversely affect the validity of suchreplacement Intellectual Property and so long as such replacement Intellectual Property is subjectto the lien created by this Agreement.     4.**Grantor’s Representations and Warranties**: The Grantor represents andwarrants that, except as disclosed in or pursuant to the Loan Agreement: (a) **EXHIBIT A**is a true, correct and complete list of all Copyrights and CopyrightLicenses owned by the Grantor as of the date hereof.
 

 
 (b) **EXHIBIT B**is a true, correct and complete list of all Patents and PatentLicenses owned by the Grantor as of the date hereof.  (c) **EXHIBIT C**is a true, correct and complete list of all Trademarks and TrademarkLicenses owned by the Grantor as of the date hereof.  (d) Except as set forth in **EXHIBITS A, B and C**, none of the Intellectual Propertyis the subject of any licensing or franchise agreement pursuant to which Grantor is thelicensor or franchisor.  (e) All IP Collateral is, and shall remain, free and clear of all liens,Encumbrances, or security interests in favor of any Person, other than PermittedEncumbrances and liens in favor of the Lender.  (f) No material claim has been asserted and is pending by any Person challenging orquestioning the use by Grantor of any of its Intellectual Property or the validity oreffectiveness of any of its Intellectual Property, nor does Grantor know of any validbasis for any such claim, except as otherwise set forth in the Loan Agreement. Noholding, decision or judgment has been rendered by any governmental authority whichwould limit, cancel or question the validity of Grantor’s rights in, any IntellectualProperty in any respect that could reasonably be expected to result in a MaterialAdverse Change on the business or the property of Grantor.  (g) The Grantor shall give the Lender written notice (with reasonable detail)within ten (10) days following the occurrence of any of the following: (i) The Grantor’s obtaining rights to, and filing applications forregistration of, any new Intellectual Property, or otherwise acquiringownership of any newly registered Intellectual Property (other than theGrantor’s right to sell products containing the trademarks of others in theordinary course of the Grantor’s business).  (ii) The Grantor’s becoming entitled to the benefit of anyregistered Intellectual Property whether as licensee or licensor (other thanthe Grantor’s right to sell products containing the trademarks of others in theordinary course of the Grantor’s business).  (iii) The Grantor’s entering into any new outbound Licenses or anymaterial inbound Licenses other than Licenses for the use of tradenames ortrademarks in connection with selling goods or otherwise in the ordinary courseof Grantor’s business.  (iv) The Grantor’s knowing that any application or registrationrelating to any Intellectual Property may become forfeited, abandoned ordedicated to the public, or of any adverse determination or development(including, without limitation, the institution of, or any such determinationor development in, any proceeding in the PTO, the Copyright Office or any courtor tribunal) regarding the Grantor’s ownership of, or the validity of,
 

 
   any Intellectual Property or the Grantor’s right to register the same or toown and maintain the same. 5. **Agreement Applies to Future Intellectual Property**:  (a) The provisions of this Agreement shall automatically apply to any suchadditional property or rights described in subsections (i), (ii) and (iii) of Section4(g), 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 the Lender, the Grantor shall execute anddeliver, and have recorded, any and all agreements, instruments, documents and papersas the Lender may request to evidence the Lender’s security interest in any Copyright,Patent or Trademark and the goodwill and General Intangibles of the Grantor relatingthereto or represented thereby (including, without limitation, filings with the PTO,the Copyright Office or any similar office), and the Grantor hereby constitutes theLender as its attorney-in-fact to execute and file all such writings for the foregoingpurposes, all acts of such attorney being hereby ratified and confirmed; *provided,however*, the Lender’s taking of such action shall not be a condition to the creation orperfection of the security interest created hereby.     6.**Grantor’s Rights To Enforce Intellectual Property:** Prior to the Lender’sgiving of notice to the Grantor following the occurrence of an Event of Default, the Grantor shallhave the exclusive right to sue for past, present and future infringement of the IntellectualProperty including the right to seek injunctions and/or money damages, in an effort by theBorrowers to protect the Intellectual Property against encroachment by third parties, *provided,however*: (a) The Grantor provide the Lender with written notice of any such suit forenforcement of any Intellectual Property.  (b) Following the occurrence and during the continuance of any Event of Default,the Lender, by notice to the Grantor may terminate or limit the Grantor’s rights underthis Section 6.  7. **Lender’s Actions To Protect Intellectual Property**: In the event of:  (a) the Grantor’s failure, within five (5) days of written notice from the Lender,to cure any failure by the Grantor to observe or perform any of the Grantor’s materialcovenants, agreements or other obligations hereunder; and/or  (b) the occurrence and continuance of any Event of Default,the Lender, acting in its own name or in that of the Grantor, may (but shall not be required to)act in the Grantor’s place and stead and/or in the Lender’s own right in connection therewith.     8.**Rights Upon Default**: Upon the occurrence of any Event of Default, theLender may exercise all rights and remedies of a secured party upon default under the UniformCommercial Code as adopted in the Commonwealth of Massachusetts, with respect to the
 

 
Intellectual Property, in addition to which, in connection with the exercise of any suchrights and remedies, the Lender may sell, license, assign, transfer, or otherwise dispose of theIntellectual Property. The Lender shall give the Grantor at least ten (10) days’ prior writtennotice, by authenticated record, of any such intended disposition of the Intellectual Property.Any person may conclusively rely upon an affidavit of an officer of the Lender that an Event ofDefault has occurred and that the Lender is authorized to exercise such rights and remedies. 9. **Lender As Attorney In Fact**:  (a) The Grantor hereby irrevocably constitutes and designates the Lender as and forthe Grantor’s attorney in fact, effective following the occurrence and during thecontinuance of any Event of Default: (i) To supplement and amend from time to time **EXHIBITS A, B and C**of this Agreement to include any new or additional Intellectual Property of theGrantor.  (ii) To exercise any of the rights and powers referenced herein.  (iii) To execute all such instruments, documents, and papers as theLender determines to be appropriate in connection with the exercise of suchrights and remedies and to cause the sale, license, assignment, transfer, orother disposition of the Intellectual Property. (b) The within grant of a power of attorney, being coupled with an interest, shallbe irrevocable until this Agreement is terminated in accordance with the Loan Agreementby a duly authorized officer of the Lender.  (c) The Lender shall not be obligated to do any of the acts or to exercise any ofthe powers authorized by Section 9(a), but if the Lender elects to do any such act orto exercise any of such powers, it shall not be accountable for more than it actuallyreceives as a result of such exercise of power, and shall not be responsible to Grantorfor any act or omission to act except for any act or omission to act as to which thereis a final determination made in a judicial proceeding (in which proceeding the Lenderhas had an opportunity to be heard) which determination includes a specific findingthat the subject act or omission to act had been grossly negligent or in actual badfaith. 10. **Lender’s Rights**:  (a) Any use by the Lender of the Intellectual Property, as authorized hereunder inconnection with the exercise of the Lender’s rights and remedies under this Agreementand under the Loan Agreement shall be coextensive with the Grantor’s rights thereunderand with respect thereto and without any liability for royalties or other relatedcharges.  (b) None of this Agreement, the Loan Agreement, or any act, omission, orcircumstance taken or arising hereunder may be construed as directly or
 

 
   indirectly conveying to the Lender any rights in and to the Intellectual Property,which rights are effective only following the occurrence of any Event of Default.     11.**Intent**: This Agreement is being executed and delivered by the Grantorfor the purpose of registering and confirming the grant of the security interest of the Lender inthe IP Collateral with the PTO and the Copyright Office. It is intended that the security interestgranted pursuant to this Agreement is granted as a supplement to, and not in limitation of, thesecurity interest granted to the Lender under the Loan Agreement. All provisions of the LoanAgreement shall apply to the IP Collateral. The Lender shall have the same rights, remedies,powers, privileges and discretions with respect to the security interests created in the IPCollateral as in all other Collateral. In the event of a conflict between this Agreement and theLoan Agreement, the terms of this Agreement shall control with respect to the IP Collateral and theLoan Agreement with respect to all other Collateral.     12.**Choice of Laws**: It is intended that this Agreement take effect as asealed instrument and that all rights and obligations hereunder, including matters ofconstruction, validity, and performance, shall be governed by the laws of the Commonwealth ofMassachusetts.[**SIGNATURE PAGES FOLLOW**]
 

 
     IN WITNESS WHEREOF, the Grantor and the Lender respectively have caused this Agreement to beexecuted by their respective duly authorized officers as of the date first above written.       **GRANTOR**: REDENVELOPE, INC.           By:   /s/ Polly Boe           Name:      Polly Boe    Title:      Chief Financial Officer         **LENDER**: WELLS FARGO RETAIL FINANCE, LLC           By:   /s/ David Molinario           Name:      David Molinario    Title:      Vice President  SignaturePage to the Intellectual Property Security Agreement
 

 
**EXHIBIT A**List of Copyrights and Copyright Licenses**Copyright Registrations and Applications**       Title Serial No. Registration No. Registration Date None      **Copyright Licenses**None
 

 
**EXHIBIT B**List of Patents and Patent Licenses**Patents and Patent Applications**         Title Serial No. Patent No. Date of Filing Date of Issuance None        **Patent Licenses**None
 

 
**EXHIBIT C**List of Trademarks and Trademark Licenses**Trademark Registrations and Applications**           Trademark Serial No. Registration No. Registration DateFlap Design (Red) Trade Dress