Exhibit 10.13

SECURITY AGREEMENT
 
THIS SECURITY AGREEMENT (this "Security Agreement"), is dated as of September
18, 2006, between QUINTESSENCE PHOTONICS CORPORATION, a Delaware corporation
(the "Company") and FINISAR CORPORATION ("Secured Party").

WITNESSETH
 
A. WHEREAS,the Company is the maker of that certain Secured Promissory Note in
favor of the Secured Party dated as of even date herewith in the original
principal amount of $6,000,000 (the "Note," and, together with this Security
Agreement, the "Transaction Documents").
 
B. WHEREAS, in order to secure the Company's prompt payment on the Note, and to
secure performance of all of the Company's obligations under the Transaction
Documents (collectively, the "Obligations"), the Company has agreed to execute
and deliver this Security Agreement.
 
NOW, THEREFORE, in consideration of the premises and covenants contained herein,
and for other good and valuable consideration, the sufficiency of which is
hereby acknowledged and received, the parties hereto agree as follows:
AGREEMENT
 
1. Defined Terms. All terms not otherwise defined herein shall have the meanings
provided for by the Uniform Commercial Code as enacted and in effect in the
State of California (the "UCC"). As used herein:
 
1.1 "Collateral" means all accounts, chattel paper, commercial tort claims,
deposit accounts, documents, equipment (including all fixtures), general
intangibles (including Intellectual Property owned or licensed by the Company),
instruments, inventory, investment property, letter-of-credit rights, money and
all products, proceeds and supporting obligations of any and all of the
foregoing.
 
Anything contained in this Security Agreement to the contrary notwithstanding,
the term "Collateral" shall not include any equipment that is now or hereafter
held by the Company as lessee, licensee, or debtor under purchase money secured
financing, in the event that: (a) as a result of the grant of a security
interest therein, the Company's rights in or with respect to such asset would be
forfeited or the Company would be deemed to have breached or defaulted under the
applicable lease, license, or other agreement that governs such asset pursuant
to restrictions contained in the applicable lease, license or other agreement;
and (b) any such restriction is effective and enforceable under applicable law;
provided, however, that the term "Collateral" shall include, at any time that
the restrictions in the lease, license, or other agreement are no longer
effective and enforceable (including as a result of the exercise of an option to
purchase or the repayment of the secured financing) or at any time that the
applicable lessor, licensor or other applicable party's consent is obtained to
the grant of a security interest in and to such asset in favor of the Secured
Party, (1) any and all proceeds of such assets, and (2) such assets.
 
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1.2 "Copyrights" means 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.
 
1.3 "Intellectual Property" means all of the Company's right, title, and
interest in and to the following;
 
(a) Copyrights, Trademarks and Patents;
 
(b) Any and all Trade Secrets, inventions, mask works, programs, works of
authorship, know-how, discoveries, developments, designs, design rights and
techniques 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 claims for damages by way of past, present and future
infringement of any of the rights included in (a) or (b) above, with the right,
but not the obligation, to sue for and collect such damages for such use or for
infringement of such rights;
 
(d) 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;
 
(e) All amendments, renewals and extensions of any of the Copyrights, Trademarks
or Patents;
 
(f) All documents, models, samples, specimens, reports, drawings, research
materials, notes and other materials in connection with or which in any way
embody or relate to any Patent or patentable matter and the right to pursue,
prepare, file and prosecute any Patent application(s) in connection therewith;
 
(g) All other rights and interests of the Licensor as described in the License
Agreement; and
 
(h) 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.
 
1.4 "Intercreditor Agreement" means that certain Intercreditor Agreement dated
as of even date herewith by and among the Secured Party, the Company and the
Senior Creditor.
 
1.5 "License Agreement" means that certain License Agreement dated as of
September 18, 2003 by and between Licensor and Licensee.
 
1.6 "Lien" means any lien, security interest, pledge, assignment, encumbrance or
other interest in property.
 
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1.7 "Other Collateral" means all Collateral other than the Company's
Intellectual Property.
 
1.8 "Patents" means all patents, patent applications, all types of exclusionary
or protective rights granted (or applications therefor) or inventions and like
protections (including without limitation improvements, divisions,
patents-of-addition, continuations, renewals, reissues, extensions and
continuations-in-part of the same) and any and all patentable subject matter
(including, without limitation, methods of doing business, machines, articles of
manufacture, processes, compositions of matter and new uses or improvements of
any of the foregoing).
 
1.9 "Permitted Dispositions" means any disposition of Collateral that is either
(i) in the ordinary course of the business of the Company, or (ii) to a third
party for reasonably equivalent value as deemed appropriate by the Company in
its reasonable business judgment, and that, in either case, that does not
result, in a single transaction or a series of related transactions, in the
disposition or sale of all or substantially all of the assets of the Company.
 
1.10 "Permitted Liens" means (a) Liens in favor of the Secured Party, (b) Liens
for unpaid taxes that either (i) are not yet delinquent, or (ii) do not
constitute an Event of Default hereunder and are the subject of Permitted
Protests, (c) Liens set forth on Schedule A, (d) the interests of lessors or
sublessors under operating leases, (e) purchase money Liens or the interests of
lessors under capital leases so long as such Lien attaches only to the asset
purchased or acquired and the proceeds thereof, (f) Liens arising by operation
of law in favor of warehousemen, landlords, carriers, mechanics, materialmen,
laborers, or suppliers, incurred in the ordinary course of the Company's
business and not in connection with the borrowing of money, and which Liens
either (i) are for sums not yet delinquent, or (ii) are the subject of Permitted
Protests, (g) Liens or deposits to secure performance of bids, tenders, or
leases incurred in the ordinary course of business and not in connection with
the borrowing of money, (h) Liens granted as security for surety or appeal bonds
in connection with obtaining such bonds in the ordinary course of business, (i)
Liens resulting from any judgment or award that is not an Event of Default
hereunder, (j) any interest or title of a licensee or licensor under any license
agreement permitted by this Security Agreement, (k) Liens that arise in the
ordinary course of business and do not in any material respect affect the
Collateral, (1) Liens which are subject of a Permitted Protest, (in) Liens on
patents, trademarks, trade names, service marks, copyrights, trade secrets or
other intellectual property to the extent such Liens arise solely from the
granting of licenses composing Permitted Dispositions thereto or from any Person
in the ordinary course of business consistent with past practice, and (n) Liens
in favor of the Senior Creditor to secure the Senior Credit Obligations.
 
1.11 "Permitted Protest" means the right to protest any Lien (other than any
such Lien that secures the Obligations), taxes (other than payroll taxes or
taxes that are the subject of a United States federal tax lien), or rental
payment, provided that (a) any such protest is instituted promptly and
prosecuted diligently by the applicable Person in good faith, and (b) while any
such protest is pending, there will be no impairment of the enforceability,
validity, or priority of any of the Secured Party's Liens.
 
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1.12 "Person" means natural persons, corporations, limited liability companies,
limited partnerships, general partnerships, limited liability partnerships,
joint ventures, trusts, land trusts, business trusts, or other organizations,
irrespective of whether they are legal entities, and governments and agencies
and political subdivisions thereof.
 
1.13 "Senior Creditor" means (i) each of the holders of promissory notes (as
amended from time to time, the "Senior Notes") issued pursuant to that certain
Loan Agreement dated as of May 21, 2004 (as amended from time to time) by and
among the Maker and the persons and entities named therein as "Lenders" (the
"Loan Agreement") and (ii) M.U.S.A. Inc., doing business as DBA Money USA, in
its capacity as collateral agent for the Lenders (the "Senior Collateral
Agent").
 
1.14 "Senior Credit Documents" means the Loan Agreement, the Senior Notes and
the Senior Security Agreement dated as of May 21, 2004 between the Maker and the
Senior Collateral Agent, all as may be from time to time amended.
 
1.15 "Senior Credit Obligations" means the obligations owed to the Senior
Creditor pursuant to the Senior Credit Documents.
 
1.16 "Trademarks" means trademarks, service marks, trade names, designs, logos,
slogans, and general intangibles of like nature, together with all goodwill,
registrations and applications related to any of the foregoing.
 
1.17"Trade Fixtures" means any equipment or machinery which may be removed from
the Company's premises without doing material damage to the premises.
 
1.18 "Trade Secrets" means trade secrets and other proprietary or confidential
information, know-how, technology, processes, formulae, algorithms, models and
methodologies in any format and whether tangible or not.
 
2. Security Interest and Subordination.
 
2.1 Grant of Security Interest. To secure the prompt and complete payment,
performance and observance of the Obligations, and to induce the Secured Party
to enter into the Transaction Documents, to make the loan in accordance with the
terms thereof, the Company hereby grants, conveys, mortgages, pledges,
hypothecates and transfers to the Secured Party, a security interest in all of
the Company's right, title and interest in, to and under the Collateral.
 
2.2 Security Interest Absolute. Except as required by applicable law, all rights
of the Secured Party hereunder, the security interest granted hereby, and all
obligations of the Company hereunder, shall be absolute and unconditional
irrespective of (a) any agreement with respect to any of the Obligations or any
other agreement or instrument relating to any of the foregoing, (b) any change
in the time, manner or place of payment of, or in any other term of, all or any
of the Obligations, or any other amendment or waiver of or any other agreement
or instrument, (c) any exchange, release or non-perfection of any other
Collateral, or any release, amendment or waiver of, or consent to or departure
from, any guaranty for all or any of the Obligations, or (d) any other
circumstance which might otherwise constitute a defense available to, or a
discharge of, the Company in respect of the Obligations or in respect of this
Security Agreement.
 
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2.3 Set-Off Rights. The Company hereby grants to the Secured Party a right of
set-off against the property of the Company held by the Secured Party,
consisting of any Collateral now or hereafter in the possession or custody of or
in transit to or from the Secured Party, for any purpose, including safekeeping,
collection or pledge, for the account of the Company, or as to which the Company
may have any right or power.
 
2.4 Limitation on Obligations. It is expressly agreed by the Company that,
anything herein to the contrary notwithstanding, the Company shall remain liable
under each of its agreements that are included in the Collateral to observe and
perform all the conditions and obligations to be observed and performed by it
thereunder and the Company shall comply and perform with or pursuant to the
terms and provisions of each such agreement. The Secured Party shall not have
any obligation or liability under any agreement included in the Collateral by
reason of or arising out of any Transaction Document, or the granting of the
security interest herein or the receipt by the Secured Party of any payment
relating to any agreement included in the Collateral pursuant hereto, nor shall
Secured Party be required or obligated in any manner to perform or fulfill any
of the obligations of the Company under or pursuant to any agreement included in
the Collateral, or to make any payment, or to make any inquiry as to the nature
or the sufficiency of any payment received by it or the sufficiency of any
performance by any party under any agreement included in the Collateral, or to
present or file any claim, or to take any action to collect or enforce any
performance or the payment of any amounts which may have been assigned to it or
to which it may be entitled at any time or times.
 
2.5 Filing Authorization. The Company authorizes the Secured Party to file
financing statements and other filing or recording documents with respect to the
Collateral (including any amendments thereto, or continuation or termination
statements thereof), without the signature or other additional authorization of
the Company, in such form and in such offices as the Secured Party reasonably
determines appropriate to perfect or maintain the perfection of the security
interest of the Secured Party hereunder. Other than in connection with Permitted
Liens, the Company acknowledges and agrees that it is not authorized to, and
will not, file financing statements or other filing or recording documents with
respect to the Collateral (including any amendments thereto, or continuation or
termination statements thereof), without the express prior written approval by
the Secured Party, consenting to the form and substance of such filing or
recording document. The Company approves, authorizes and ratifies any filings or
recordings made by or on behalf of the Secured Party in connection with the
perfection of the security interest in favor of the Secured Party. The Company
agrees that upon request of the Secured Party, the Company will promptly execute
all such documents as may be reasonably necessary or appropriate to effect the
foregoing.
 
3. Representations and Warranties. The Company makes the following
representations and warranties to the Secured Party:
 
3.1 Collateral. The Company has good and marketable title to the Collateral,
free and clear of any lien, security interest, pledge, assignment, encumbrance
or other interest of any third party, other than Permitted Liens. The Company
has all requisite power and authority to pledge and grant a security interest in
the Collateral as contemplated in this Security Agreement and to create a lien
on the Collateral in favor of the Secured Party. Subject in priority only to
Permitted Liens, this Security Agreement, together with any filings required to
be made, shall create a valid first priority lien upon and perfected first
priority security interest in the Collateral to the extent such lien and
security interest can be perfected by the filing of a UCC-1 financing statement.
This Security Agreement, when executed, has been duly and validly executed and
is the legal, valid and binding obligation of the Company and is enforceable
against the Company by the Secured Party in accordance with its terms, except
(i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium,
and other laws of general application affecting enforcement of creditors' rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies and (iii) as limited
by applicable federal or state securities laws. To the Company's knowledge, no
third party is infringing or violating the Company's rights in or to any of the
Company's Intellectual Property in any material respect, or exceeding the scope
of authorization or license corresponding thereto in any material respect.
 
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3.2 Claims. The Collateral is not the subject of any present or threatened
material suit, action, arbitration, administrative or other material proceeding,
and the Company is not aware of the institution of any such proceedings. No
authorization, approval or other action by, and no notice to or filing (other
than the filing of a financing statement) with, any governmental authority or
regulatory body which has not already been obtained is required either (i) for
the pledge by the Company of the Collateral pursuant to this Security Agreement,
(ii) for the execution, delivery or performance of this Security Agreement by
the Company or (iii) for the exercise by the Secured Party of any remedies with
respect to the Collateral (excluding any exercise of remedies against the
Company's investment property which may be subject to applicable securities
laws).
 
3.3 Noncontravention. The execution and delivery by the Company of this Security
Agreement will not (a) conflict with or violate any provision of the charter or
by-laws of the Company, (b) require on the part of the Company any notice to or
filing with, or any permit, authorization, consent or approval of, any
governmental entity (other than the filing of UCC financing statements pursuant
hereto), (c) conflict with, result in a breach of, constitute (with or without
due notice or lapse of time or both) a default under, result in the acceleration
of obligations under, create in any party the right to terminate, modify or
cancel, or require any notice, consent or waiver under, any contract or
instrument to which the Company is a party or by which the Company is bound or
to which any of its assets is subject, (d) result in the imposition of any
security interest upon any assets of the Company, except for the lien to be
granted under this Security Agreement or (e) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Company or any
of its properties or assets.
 
4. Covenants. The Company hereby covenants to and agrees with the Secured Party
that, from the date hereof and thereafter until this Security Agreement is
terminated:
 
4.1 Corporate Changes. The Company shall not change its corporate form or
jurisdiction of organization or relocate its chief executive officer or chief
financial officer without giving Secured Party fifteen (15) days prior written
notice thereof. The Company shall preserve and keep in full force and effect its
valid existence and all rights and franchises material to the Company,
 
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4.2 Payments and Insurance. The Company shall pay and discharge all material
taxes, assessments and charges or levies against the Company or the Collateral
prior to delinquency thereof. The Company, at its own expense, shall have and
maintain insurance at all times with respect to all Collateral against such
risks and liabilities, with such carrier and in such amounts as are maintained
as of the date hereof. The Secured Party shall be an additional insured with
respect to all risk and liability insurance. All other insurance shall provide
that the Secured Party and the Company are joint loss payees as their interests
may appear and shall not be subject to cancellation or reduction in coverage
without thirty (30) days' prior written notice to the Secured Party. The Company
shall supply certificates of such insurance to the Secured Party upon the
reasonable request therefore by the Secured Party.
 
4.3 No Disposition of Collateral. Other than Permitted Dispositions, the Company
shall not sell, convey, assign (by operation of law or otherwise), exchange or
otherwise voluntarily or involuntarily transfer or dispose of any interest in
the Collateral or any portion thereof or encumber, or hypothecate or pledge, or
create, incur or permit to exist any Lien or adverse claim upon or other
interest in or with respect to any of the Collateral except for Permitted Liens.
 
4.4 Records and Reports. The Company will maintain books and records with
respect to the Collateral, and furnish to the Secured Party such reports
relating to the Collateral as the Secured Party shall from time to time
reasonably request.
 
4.5 Further Assurances. The Company will execute and deliver to the Secured
Party all financing statements, amendments thereto and other documents, and will
perform such other actions, as are from time to time reasonably requested by the
Secured Party in order to perfect, maintain and protect the validity,
enforceability and perfected status of the security interest in the Collateral
or to enable the Secured Party to exercise and enforce its rights and remedies
hereunder with respect to the Collateral; provided that, prior to the occurrence
and continuance of an Event of Default, the Secured Party agrees that the
Company shall not have to deliver any documents or enter into any agreements in
order to achieve the perfection of the Secured Party's security interest in the
Collateral except for the delivery of a UCC-1 financing statement in favor of
the Secured Party, the execution and delivery of this Security Agreement and the
Intercreditor Agreement, and the delivery of such documents and agreements
reasonable requested by Secured Party from time to time in order to perfect its
security interest in the Intellectual Property.
 
4.6 Intellectual Property Covenants. The Company shall:
 
(a) consistent with commercially reasonable practices, prosecute diligently, as
the Company's Board of Directors may reasonably determine, airy necessary and
material Patent, Trademark or Copyright application which is pending as of the
date of this Security Agreement or hereafter and otherwise maintain all material
rights in and to the Intellectual Property necessary for the Company's business,
including making all necessary filings and recordings and paying all required
fees and taxes to record and maintain its registration and ownership of all such
material Intellectual Property included in the Collateral;
 
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(b) not materially impair any of the Secured Party's rights of action described
herein without the written consent of the Secured Party;
 
(c) (i) protect, defend and maintain, in all material respects, the validity and
enforceability of the material Trademarks, Patents and Copyrights, (ii) detect
material infringements of the material Trademarks, Patents and Copyrights and
promptly advise the Secured Party in writing of material infringements detected
and (iii) not allow any material Trademarks, Patents or Copyrights to be
abandoned, forfeited or dedicated to the public without the prior written
consent of the Secured Party; and
 
(d) promptly notify the Secured Party in writing of any applications or
registrations that the Company makes or files in respect of any Patents,
Copyrights or Trademarks as well as any material change in the Intellectual
Property.
 
4.7 Inspection and Verification. The Secured Party shall have the right, upon
reasonable advance notice and at such times as may be reasonably requested, to
visit and inspect any of the properties of the Company for the purpose of
inspecting the same, and shall be provided reasonable access to the books,
records, officers and accountants of the Company; provided, however, that the
Company shall not be obligated to provide any information that it considers in
good faith to be a trade secret or to contain confidential or classified
information.
 
4.8 Maintenance of Collateral. The Company shall maintain and preserve, in all
material respects, all of its properties which are necessary or useful in the
proper conduct of its business in good working order and condition, ordinary
wear and tear excepted, and comply at all times with the provisions of all
leases to which it is a party as lessee so as to prevent any loss or forfeiture
thereof or thereunder.
 
5. Events Of Default. Any one or more of the following events (each an "Event
of Default") shall constitute a default by the Company under this Security
Agreement:
 
5.1 The occurrence of an Event of Default as defined in the Note; or
 
5.2 The Company's breach of any representation or warranty in any material
respect, or violation or failure to perform any of the covenants or agreements
in this Security Agreement and such breach, violation or failure remains
unremedied (to the extent capable of being remedied) for a period of thirty (30)
days after the Secured Party provides the Company with written notice of such
breach, violation or failure.
 
6. Remedies Upon Default.
 
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6.1 Remedies Upon Default. Upon the occurrence and during the continuance of an
Event of Default, the Secured Party, at its option and in its sole and absolute
discretion, and without notice or demand, may exercise and shall have any and
all rights and remedies accorded to the Secured Party under this Security
Agreement or otherwise by the UCC and/or any other governing law, including,
without limitation, the right of the Secured Parties to retain the Collateral in
satisfaction of the obligation or sell the Collateral at public or private sale
in accordance with the UCC or any other applicable statute. Notwithstanding
anything to the contrary in this Security Agreement, if the Secured Party elects
to exercise its remedies as provided above, upon the occurrence and during the
continuance of an Event of Default, the Secured Party shall first dispose of or
sell all Other Collateral (unless by court order such Other Collateral may not
be disposed of or sold). In the event the disposition or sale of the Other
Collateral is insufficient to satisfy the Obligations, the Secured Party, upon
ninety (90) days' prior written notice to the Company, shall have the right to
dispose of or sell the portion of the Collateral consisting of the Company's
Intellectual Property. If any notification of disposition of all or any portion
of the Collateral is required by law, such notification shall be deemed
reasonably and properly given if mailed at least ten (10) days prior to such
disposition, postage prepaid to the Company at its last address appearing on the
records of the Secured Party by registered or certified mail, return receipt
requested.
 
6.2 The Company's Obligations Upon Event of Default. Upon the request of the
Secured Party after the occurrence and during the continuance of an Event of
Default, the Company will promptly:
 
(a) Assemble and make available to the Secured Party the Collateral and all
records relating thereto at the Company's principal place of business.
 
(b) Permit the Secured Party, or the Secured Party's representatives, with or
without judicial process or the aid or assistance of others, to enter any
premises where all or any part of the Collateral, or the books and records
relating thereto, or both, are located, to take possession of all or any part of
the Collateral and to remove all or any part of the Collateral, to complete the
provision of any services giving rise to any Collateral or take actions as the
Secured Party shall deem necessary to preserve and protect any Collateral.
 
6.3 Substitute Performance. Upon the occurrence and during the continuance of an
Event of Default or an event which, upon the lapse of time or the giving of
notice, or both, would constitute an Event of Default, without having any
obligation to do so, the Secured Party may, upon notice to the Company, perform
or pay any obligation which the Company has agreed to perform or pay in this
Security Agreement but has not performed or paid and the Company shall reimburse
the Secured Party for any amounts paid or incurred pursuant to such performance
or payment.
 
6.4 Application of Funds Received. Subject to the terms of the Intercreditor
Agreement, the proceeds of Collateral received by the Secured Party shall be
applied as follows:
 
(a) First, for the payment of all reasonable costs, expenses, attorneys'
paralegals' and other professionals' fees, taxes and charges incurred by the
Secured Party in connection with the collection of any sum and foreclosure on
Collateral, whether accruing before or after such Event of Default, to the
extent payment is required pursuant to Section 9.3 of this Security Agreement;
 
(b) Second, ratably, for the payment of all other Obligations under the
Transaction Documents; and
 
(c) Third, to the Company.
 
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7. General Provisions.
 
7.1 Waivers, Amendments and Remedies. No delay or omission of the Secured Party
to exercise any right, power or remedy granted under this Security Agreement
shall impair such right, power or remedy or be construed to be a waiver of any
Event of Default or an acquiescence therein, and any single or partial exercise
of any such right, power or remedy shall not preclude other or further exercise
thereof or the exercise of any other right, power or remedy, and no waiver,
amendment or other variation of the terms, conditions or provisions of this
Security Agreement whatsoever shall be valid unless signed by each of the
parties hereto, and then only to the extent specifically set forth in such
writing.
 
7.2 General Authorizations.
 
(a) Subject to the terms of Section 7.2(b) below, the Company irrevocably
authorizes the Secured Party at any time and from time to time in the sole
discretion of the Secured Party, and irrevocably appoints the Secured Party as
its attorney-in-fact to act on behalf of the Company, in the name of the Company
or otherwise, from time to time in the Secured Party's discretion, to take any
action and to execute any instrument which is reasonably necessary or advisable
to accomplish the purposes of this Security Agreement, including without
limitation (a) to file financing statements necessary or desirable in the
Secured Party's sole discretion to perfect and to maintain the perfection and
priority of the Secured Party's security interest in the Collateral; (b) to file
a carbon, photographic or other reproduction of this Security Agreement or any
financing statement with respect to the Collateral as a financing statement in
such offices as the Secured Party in its sole discretion deems necessary or
desirable to perfect and to maintain the perfection and priority of the Secured
Party's security interest in the Collateral; (c) to cause the proceeds of any
Collateral received by the Secured Party to be applied to the Obligations; and
(d) to do all things necessary to carry out this Security Agreement.
 
(b) Subject at all times to the second sentence of Section 6.1 hereof, upon the
occurrence and during the continuance of any Event of Default, the Company
irrevocably authorizes the Secured Party at any time and from time to time in
the sole discretion of the Secured Party, and irrevocably appoints the Secured
Party as its attorney-in-fact to act on behalf of the Company, in the name of
the Company or otherwise, from time to time in the Secured Party's discretion,
to take any of the following actions: (a) to sign the Company's name on any
invoice relating to any Collateral, including any schedules and assignments of
such Collateral, on notices of assignment, financing statements and other public
records, on verifications of accounts and on notices to licensees; (b) to grant
or issue any exclusive or nonexclusive license under the Collateral to any
person, to the extent consistent with the terms of any license agreements, (c)
to assign, pledge, convey or otherwise transfer title in or to or dispose of the
Collateral to any party, including without limitation, to make assignments,
recordings, registrations and applications therefor in the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency of the United States, any State thereof or any other country or
political subdivision thereof, and to execute and deliver any and all
agreements, documents, instruments of assignment or other papers necessary or
advisable to effect any of the foregoing or the recordation, registration,
filing or perfection thereof, or (d) to send requests for verification of any
Collateral or any proceeds therefrom.
 
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(c) The Secured Party will not be liable for any acts or omissions except those
determined pursuant to a final, non-appealable order of a court of competent
jurisdiction to have resulted solely from the Secured Party's gross negligence
or willful misconduct. The power conferred on the Secured Party hereunder is
solely to protect its interests in the Collateral and shall not impose any duty
upon the Secured Party to exercise such power. This power, being coupled with an
interest, is irrevocable.
 
7.3 Expenses. The Company agrees to pay upon demand to the Secured Party the
amount of all reasonable expenses, including the reasonable fees and expenses of
its counsel and of any experts of the Secured Party, which the Secured Party may
incur in connection with (a) the.custody or preservation of, or the sale of,
collection from, or other realization upon, any of the Collateral, (b) the
administration of this Security Agreement or any Transaction Document, (c) the
exercise or enforcement of any of the rights of the Secured Party hereunder or
thereunder, or (d) the failure by the Company to perform or observe any of the
provisions hereof or thereof.
 
7.4 Indemnification.
 
(a) The Company agrees to indemnify the Secured Party, and its respective
partners, employees, officers, directors and agents against, and defend and hold
them harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable attorneys', paralegals' and other professional
fees, disbursements and other similar charges, incurred by or asserted against
any of them arising out of, in any way connected with, or as a result of, the
execution, delivery or performance of this Security Agreement or any claim,
litigation, investigation or proceeding relating hereto or to the Collateral,
whether or not the Secured Party is a party thereto; provided that such
indemnity shall not be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of competent
jurisdiction by final and non-appealable judgment to have resulted from the
gross negligence or willful misconduct of the Secured Party.
 
(b) The provisions of this Section 7.4 shall remain operative and in fullforce
and effect regardless of the termination of this Security Agreement or any
Transaction Document, the consummation of the transactions contemplated hereby
and thereby, the invalidity or unenforceability of any term or provision of this
Security Agreement or any Transaction Document, or any investigation made by or
on behalf of the Secured Party.
 
(c) Any such amounts payable as provided hereunder shall be additional
Obligations secured by this Security Agreement, and all amounts due under this
Section 7.4 shall be payable on written demand therefor and shall bear interest
at the rate of 10% per annum (or the highest amount permitted by law) from the
date incurred by the Secured Party until paid in full.
 
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7.5 Insolvency. Notwithstanding anything to the contrary contained in this
Security Agreement, until this Security Agreement is terminated pursuant to
Section 8.6 hereof, this Security Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
the Company for liquidation or reorganization, should the Company become
insolvent or make an assignment for any benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of the
Company's assets, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the obligations, or any
part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by any obligee of the obligations,
whether as a "voidable preference," "fraudulent conveyance" or otherwise, all as
though such payment, or any part thereof, is rescinded, reduced, restored or
returned.
 
8. Miscellaneous.
 
8.1 Binding Agreement; Assignments. This Security Agreement, and the terms,
covenants and conditions hereof, shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns. The
rights and obligations under this Security Agreement may not be assigned or
transferred, nor may any duties and obligations hereunder be delegated, without
the prior written consent of the other party. Notwithstanding the foregoing, the
Secured Party may assign its rights under his Security Agreement to a third
party as part of a sale of all or substantially all of the assets or stock of
Secured Party to that third party, or a sale of the relevant business line.
 
8.2 GOVERNING LAW AND CONSENT TO JURISDICTION. THE VALIDITY, CONSTRUCTION AND
EFFECT OF THIS SECURITY AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
CALIFORNIA.
 
ANY ACTION OF ANY TYPE OR NATURE WHATSOEVER WITH RESPECT TO THIS SECURITY
AGREEMENT, WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE, SHALL BE BROUGHT IN A
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE CITY OF LOS ANGELES,
STATE OF CALIFORNIA, AND THE COMPANY ACCEPTS FOR ITSELF AND ITS ASSETS AND
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS.
 
THE COMPANY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY SUCH ACTION IN ANY SUCH JURISDICTION.
 
8.3 Notices. All communications and notices hereunder shall be in writing and
given as provided in the Note.
 
8.4 Severability. In case any one or more of the provisions contained in this
Security Agreement should be invalid, illegal or unenforceable in any respect,
no party hereto shall be required to comply with such provision for so long as
such provision is held to be invalid, illegal or unenforceable and the validity,
legality and enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal and unenforceable provisions with
valid provisions, the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
 
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8.5 Counterparts. This Security Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument.
 
8.6 Termination. This Security Agreement and the security interest granted in
the Collateral hereby shall terminate after and only after all the Obligations
have been paid in full (other than Obligations constituting contingent
indemnification obligations). The Secured Party, at the expense of the Company,
shall authorize the Company to file UCC termination statements and execute and
deliver similar documents prepared by the Company which the Company shall
reasonably request to evidence any such termination of interest in the
Collateral.
 
8.7 Modification. Any term of this Security Agreement may be amended and the
observance of any term of the Security Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), with the
written consent of the Company and the Secured Party.
 
8.8 Intererceditor Agreement. The Company and the Secured Party acknowledge and
agree that certain rights and priorities between the Secured Party and the
Senior Creditor with respect to certain of the Collateral shall be set forth in
the Intercreditor Agreement.
 
IN WITNESS WHEREOF, each party hereto has caused this Security Agreement to be
executed as of the date first set forth above.
 

      Company:      
QUINTESSENCE PHOTONICS CORPORATION
 
   
   
    By:  
/s/ George Lintz           
  Name: George Lintz  
Title: CFO

 

        Secured Party:      
FINISAR CORPORATION
 
   
   
    By:  
/s/ S.K. Workman       
  Name: S.K. Workman    Title: CFO

 
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SCHEDULE A
EXISTING LIENS
 
1) Liens created by that certain Security Agreement dated August 1, 2005 by and
among the Company and M.U.S.A. Inc., in its capacity as collateral agent for
certain lenders named therein (the "Subordinated Security Agreement"), which
liens secure obligations under those certain Notes and that certain Loan
Agreement entered into by the Company and such lenders concurrently therewith.
Pursuant to the terms of the Subordinated Security Agreement, such liens are
subordinate to the liens created by this Security Agreement.
 
A-1

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