EXHIBIT 10.2
SECURITY AGREEMENT
     This SECURITY AGREEMENT (this “Agreement”), dated as of October 2, 2009,
among the Grantors listed on the signature pages hereof and those additional
entities that hereafter become parties hereto by executing the form of Joinder
attached hereto as Annex 1 (collectively, jointly and severally, the “Grantors”
and each, individually, a “Grantor”), and WELLS FARGO FOOTHILL, LLC, a Delaware
limited liability company (“WFF”), in its capacity as agent for the Lender Group
and the Bank Product Providers (in such capacity, together with its successors
and assigns in such capacity, “Agent”).
W I T N E S S E T H:
     WHEREAS, pursuant to that certain Credit Agreement of even date herewith
(as amended, restated, supplemented, or otherwise modified from time to time,
the “Credit Agreement”) by and among Finisar Corporation, a Delaware corporation
(“Parent”), Optium Corporation, a Delaware corporation (“Optium” and Parent
each, individually, as a “Borrower”, and individually and collectively, jointly
and severally, as the “Borrowers”), the lenders party thereto as “Lenders” (such
Lenders, together with their respective successors and assigns in such capacity,
each, individually, a “Lender” and, collectively, the “Lenders”), and Agent, the
Lender Group has agreed to make certain financial accommodations available to
Borrowers from time to time pursuant to the terms and conditions thereof; and
     WHEREAS, Agent has agreed to act as agent for the benefit of the Lender
Group and the Bank Product Providers in connection with the transactions
contemplated by the Credit Agreement and this Agreement; and
     WHEREAS, in order to induce the Lender Group to enter into the Credit
Agreement and the other Loan Documents and to induce the Lender Group to make
financial accommodations to Borrowers as provided for in the Credit Agreement,
Grantors have agreed to grant a continuing security interest in and to the
Collateral in order to secure the prompt and complete payment, observance and
performance of, among other things, the Secured Obligations.
     NOW, THEREFORE, for and in consideration of the recitals made above and
other good and valuable consideration, the receipt, sufficiency and adequacy of
which are hereby acknowledged, the parties hereto agree as follows:
     1. Defined Terms. All initially capitalized terms used herein (including in
the preamble and recitals hereof) without definition shall have the meanings
ascribed thereto in the Credit Agreement. Any terms (whether capitalized or
lower case) used in this Agreement that are defined in the Code shall be
construed and defined as set forth in the Code unless otherwise defined herein
or in the Credit Agreement; provided, however, that to the extent that the Code
is used to define any term used herein and if such term is defined differently
in different Divisions of the Code, the definition of such term contained in
Division 9 of the Code shall govern. In addition to those terms defined
elsewhere in this Agreement, as used in this Agreement, the following terms
shall have the following meanings:
          (a) “Account” means an account (as that term is defined in Division9
of the Code).
          (b) “Account Debtor” means an account debtor (as that term is defined
in the Code).
          (c) “Agent” has the meaning specified therefor in the preamble to this
Agreement.
          (d) “Agent’s Lien” has the meaning specified therefor in the Credit
Agreement.

 

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          (e) “Agreement” has the meaning specified therefor in the preamble to
this Agreement.
          (f) “Bank Product Obligations” has the meaning specified therefor in
the Credit Agreement.
          (g) “Bank Product Provider” has the meaning specified therefor in the
Credit Agreement.
          (h) “Books” means books and records (including each Grantor’s Records
indicating, summarizing, or evidencing such Grantor’s assets (including the
Collateral) or liabilities, each Grantor’s Records relating to such Grantor’s
business operations or financial condition, and each Grantor’s goods or General
Intangibles related to such information).
          (i) “Borrower” and “Borrowers” have the meanings specified therefor in
the recitals to this Agreement.
          (j) “Cash Equivalents” has the meaning specified therefor in the
Credit Agreement.
          (k) “Chattel Paper” means chattel paper (as that term is defined in
the Code), and includes tangible chattel paper and electronic chattel paper.
          (l) “Code” means the California Uniform Commercial Code, as in effect
from time to time; provided, however, that in the event that, by reason of
mandatory provisions of law, any or all of the attachment, perfection, priority,
or remedies with respect to Agent’s Lien on any Collateral is governed by the
Uniform Commercial Code as enacted and in effect in a jurisdiction other than
the State of California, the term “Code” shall mean the Uniform Commercial Code
as enacted and in effect in such other jurisdiction solely for purposes of the
provisions thereof relating to such attachment, perfection, priority, or
remedies.
          (m) “Collateral” has the meaning specified therefor in Section 2.
          (n) “Collections” has the meaning specified therefor in the Credit
Agreement.
          (o) “Commercial Tort Claims” means commercial tort claims (as that
term is defined in the Code), and includes those commercial tort claims listed
on Schedule 1.
          (p) “Controlled Account” has the meaning specified therefor in Section
6(k).
          (q) “Controlled Account Agreements” means those certain cash
management agreements, in form and substance reasonably satisfactory to Agent,
each of which is executed and delivered by a Grantor, Agent, and one of the
Controlled Account Banks.
          (r) “Controlled Account Bank” has the meaning specified therefor in
Section 6(k).
          (s) “Copyrights” means any and all rights in any works of authorship,
including (i) copyrights and moral rights, (ii) copyright registrations and
recordings thereof and all applications in connection therewith including those
listed on Schedule 2, (iii) income, license fees, royalties, damages, and
payments now and hereafter due or payable under and with respect thereto,
including payments under all licenses entered into in connection therewith and
damages and payments for past, present, or future infringements thereof,
(iv) the right to sue for past, present, and future infringements thereof, and
(v) all of each Grantor’s rights corresponding thereto throughout the world.
          (t) “Copyright Security Agreement” means each Copyright Security
Agreement executed and delivered by Grantors, or any of them, and Agent, in
substantially the form of Exhibit A.

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          (u) “Credit Agreement” has the meaning specified therefor in the
recitals to this Agreement.
          (v) “Deposit Account” means a deposit account (as that term is defined
in the Code).
          (w) “Equipment” means equipment (as that term is defined in the Code).
          (x) “Event of Default” has the meaning specified therefor in the
Credit Agreement.
          (y) “Fixtures” means fixtures (as that term is defined in the Code).
          (z) “General Intangibles” means general intangibles (as that term is
defined in the Code), and includes payment intangibles, contract rights, rights
to payment, rights arising under common law, statutes, or regulations, choses or
things in action, goodwill, Intellectual Property, Intellectual Property
Licenses, purchase orders, customer lists, monies due or recoverable from
pension funds, route lists, rights to payment and other rights under any royalty
or licensing agreements, including Intellectual Property Licenses, infringement
claims, pension plan refunds, pension plan refund claims, insurance premium
rebates, tax refunds, and tax refund claims, interests in a partnership or
limited liability company which do not constitute a security under Division 8 of
the Code, and any other personal property other than Commercial Tort Claims,
money, Accounts, Chattel Paper, Deposit Accounts, goods, Investment Related
Property, Negotiable Collateral, and oil, gas, or other minerals before
extraction.
          (aa) “Grantor” and “Grantors” have the respective meanings specified
therefor in the preamble to this Agreement.
          (bb) “Guaranty” has the meaning specified therefor in the Credit
Agreement.
          (cc) “Insolvency Proceeding” has the meaning specified therefor in the
Credit Agreement.
          (dd) “Intellectual Property” means any and all Patents, Copyrights,
Trademarks, trade secrets, know-how, inventions (whether or not patentable),
algorithms, software programs (including source code and object code),
processes, product designs, industrial designs, blueprints, drawings, data,
customer lists, URLs and domain names, specifications, documentations, reports,
catalogs, literature, and any other forms of technology or proprietary
information of any kind, including all rights therein and all applications for
registration or registrations thereof.
          (ee) “Intellectual Property Licenses” means, with respect to any
Person (the “Specified Party”), (i) any licenses or other similar rights
provided to the Specified Party in or with respect to Intellectual Property
owned or controlled by any other Person, and (ii) any licenses or other similar
rights provided to any other Person in or with respect to Intellectual Property
owned or controlled by the Specified Party, in each case, including (A) any
software license agreements (other than license agreements for commercially
available off-the-shelf software that is generally available to the public which
have been licensed to a Grantor pursuant to end-user licenses), (B) the license
agreements listed on Schedule 3, and (C) the right to use any of the foregoing
in connection with the enforcement of the Lender Group’s rights under the Loan
Documents, including the right to prepare for sale and sell any and all
Inventory and Equipment now or hereafter owned by any Grantor and now or
hereafter covered by such licenses.
          (ff) “Inventory” means inventory (as that term is defined in the
Code).
          (gg) “Investment Related Property” means (i) any and all investment
property (as that term is defined in the Code), and (ii) any and all of the
following (regardless of whether classified as investment property under the
Code): all Pledged Interests, Pledged Operating Agreements, and Pledged
Partnership Agreements.

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          (hh) “Joinder” means each Joinder to this Agreement executed and
delivered by Agent and each of the other parties listed on the signature pages
thereto, in substantially the form of Annex 1.
          (ii) “Lender Group” has the meaning specified therefor in the Credit
Agreement.
          (jj) “Lender” and “Lenders” have the respective meanings specified
therefor in the recitals to this Agreement.
          (kk) “Loan Document” has the meaning specified therefor in the Credit
Agreement.
          (ll) “Material Patents” means all Patents of each Grantor that such
Grantor has determined are material to its business in its reasonable business
judgment.
          (mm) “Negotiable Collateral” means letters of credit, letter-of-credit
rights, instruments, promissory notes, drafts and documents (as each such term
is defined in the Code).
          (nn) “Obligations” has the meaning specified therefor in the Credit
Agreement.
          (oo) “Optium” has the meaning specified therefor in the recitals to
this Agreement.
          (pp) “Parent” has the meaning specified therefor in the recitals to
this Agreement.
          (qq) “Patents” means patents and patent applications, including
(i) the patents and patent applications listed on Schedule 4, (ii) all
continuations, divisionals, continuations-in-part, re-examinations, reissues,
and renewals thereof and improvements thereon, (iii) all income, royalties,
damages and payments now and hereafter due or payable under and with respect
thereto, including payments under all licenses entered into in connection
therewith and damages and payments for past, present, or future infringements
thereof, (iv) the right to sue for past, present, and future infringements
thereof, and (v) all of each Grantor’s rights corresponding thereto throughout
the world.
          (rr) “Patent Security Agreement” means each Patent Security Agreement
executed and delivered by Grantors, or any of them, and Agent, in substantially
the form of Exhibit B.
          (ss) “Permitted Liens” has the meaning specified therefor in the
Credit Agreement.
          (tt) “Person” has the meaning specified therefor in the Credit
Agreement.
          (uu) “Pledged Companies” means each Person listed on Schedule 6 as a
“Pledged Company”, together with each other Person (including a CFC, subject to
the pledge limits set forth in the Credit Agreement), all or a portion of whose
Stock is acquired or otherwise owned by a Grantor after the Closing Date.
          (vv) “Pledged Interests” means all of each Grantor’s right, title and
interest in and to all of the Stock now owned or hereafter acquired by such
Grantor, regardless of class or designation, including in each of the Pledged
Companies (subject to the limits on the pledge of Stock issued by CFCs, as set
forth in the Credit Agreement), and all substitutions therefor and replacements
thereof, all proceeds thereof and all rights relating thereto, also including
any certificates representing the Stock, the right to receive any certificates
representing any of the Stock, all warrants, options, share appreciation rights
and other rights, contractual or otherwise, in respect thereof and the right to
receive all dividends, distributions of income, profits, surplus, or other
compensation by way of income or liquidating distributions, in cash or in kind,
and all cash, instruments, and other property from time to time received,
receivable, or otherwise distributed in respect of or in addition to, in
substitution of, on account of, or in exchange for any or all of the foregoing.

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          (ww) “Pledged Interests Addendum” means a Pledged Interests Addendum
substantially in the form of Exhibit C.
          (xx) “Pledged Operating Agreements” means all of each Grantor’s
rights, powers, and remedies under the limited liability company operating
agreements of each of the Pledged Companies that are limited liability
companies.
          (yy) “Pledged Partnership Agreements” means all of each Grantor’s
rights, powers, and remedies under the partnership agreements of each of the
Pledged Companies that are partnerships.
          (zz) “Proceeds” has the meaning specified therefor in Section 2.
          (aaa) “PTO” means the United States Patent and Trademark Office.
          (bbb) “Real Property” means any estates or interests in real property
now owned or hereafter acquired by any Grantor or any Subsidiary of any Grantor
and the improvements thereto.
          (ccc) “Records” means information that is inscribed on a tangible
medium or which is stored in an electronic or other medium and is retrievable in
perceivable form.
          (ddd) “Secured Obligations” means each and all of the following:
(a) all of the present and future obligations of each of the Grantors arising
from, or owing under or pursuant to, this Agreement, the Credit Agreement, or
any of the other Loan Documents (including any Guaranty), (b) all Bank Product
Obligations, and (c) all Obligations of Borrowers (including, in the case of
each of clauses (a), (b) and (c), reasonable attorneys fees and expenses and any
interest, fees, or expenses that accrue after the filing of an Insolvency
Proceeding, regardless of whether allowed or allowable in whole or in part as a
claim in any Insolvency Proceeding).
          (eee) “Securities Account” means a securities account (as that term is
defined in the Code).
          (fff) “Security Interest” has the meaning specified therefor in
Section 2.
          (ggg) “Stock” has the meaning specified therefor in the Credit
Agreement.
          (hhh) “Supporting Obligations” means supporting obligations (as such
term is defined in the Code), and includes letters of credit and guaranties
issued in support of Accounts, Chattel Paper, documents, General Intangibles,
instruments or Investment Related Property.
          (iii) “Trademarks” means any and all trademarks, trade names,
registered trademarks, trademark applications, service marks, registered service
marks and service mark applications, including (i) the trade names, registered
trademarks, trademark applications, registered service marks and service mark
applications listed on Schedule 5, (ii) all renewals thereof, (iii) all income,
royalties, damages and payments now and hereafter due or payable under and with
respect thereto, including payments under all licenses entered into in
connection therewith and damages and payments for past or future infringements
or dilutions thereof, (iv) the right to sue for past, present and future
infringements and dilutions thereof, (v) the goodwill of each Grantor’s business
symbolized by the foregoing or connected therewith, and (vi) all of each
Grantor’s rights corresponding thereto throughout the world.
          (jjj) “Trademark Security Agreement” means each Trademark Security
Agreement executed and delivered by Grantors, or any of them, and Agent, in
substantially the form of Exhibit D.
          (kkk) “URL” means “uniform resource locator,” an internet web address.

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     2. Grant of Security. Each Grantor hereby unconditionally grants, assigns,
and pledges to Agent, for the benefit of each member of the Lender Group and
each of the Bank Product Providers, to secure the Secured Obligations, a
continuing security interest (hereinafter referred to as the “Security
Interest”) in all of such Grantor’s right, title, and interest in and to the
following, whether now owned or hereafter acquired or arising and wherever
located (collectively, the “Collateral”):
          (a) all of such Grantor’s Accounts;
          (b) all of such Grantor’s Books;
          (c) all of such Grantor’s Chattel Paper;
          (d) all of such Grantor’s Deposit Accounts;
          (e) all of such Grantor’s Equipment and Fixtures (other than Equipment
listed on Schedule 9);
          (f) all of such Grantor’s General Intangibles;
          (g) all of such Grantor’s Inventory;
          (h) all of such Grantor’s Investment Related Property;
          (i) all of such Grantor’s Negotiable Collateral;
          (j) all of such Grantor’s Supporting Obligations;
          (k) all of such Grantor’s Commercial Tort Claims;
          (l) all of such Grantor’s money, Cash Equivalents, or other assets of
such Grantor that now or hereafter come into the possession, custody, or control
of Agent (or its agent or designee) or any other member of the Lender Group; and
          (m) all of the proceeds (as such term is defined in the Code) and
products, whether tangible or intangible, of any of the foregoing, including
proceeds of insurance or Commercial Tort Claims covering or relating to any or
all of the foregoing, and any and all Accounts, Books, Chattel Paper, Deposit
Accounts, Equipment, Fixtures, General Intangibles, Inventory, Investment
Related Property, Negotiable Collateral, Supporting Obligations, money, or other
tangible or intangible property resulting from the sale, lease, license,
exchange, collection, or other disposition of any of the foregoing, the proceeds
of any award in condemnation with respect to any of the foregoing, any rebates
or refunds, whether for taxes or otherwise, and all proceeds of any such
proceeds, or any portion thereof or interest therein, and the proceeds thereof,
and all proceeds of any loss of, damage to, or destruction of the above, whether
insured or not insured, and, to the extent not otherwise included, any
indemnity, warranty, or guaranty payable by reason of loss or damage to, or
otherwise with respect to any of the foregoing (the “Proceeds”). Without
limiting the generality of the foregoing, the term “Proceeds” includes whatever
is receivable or received when Investment Related Property or proceeds are sold,
exchanged, collected, or otherwise disposed of, whether such disposition is
voluntary or involuntary, and includes proceeds of any indemnity or guaranty
payable to any Grantor or Agent from time to time with respect to any of the
Investment Related Property.
     Notwithstanding anything contained in this Agreement to the contrary, the
term “Collateral” shall not include: (i) voting Stock of any CFC, solely to the
extent that (y) such Stock represents more than 65% of the outstanding voting
Stock of such CFC, and (z) pledging or hypothecating more than 65% of the total
outstanding voting Stock of such CFC would result in material adverse tax
consequences; or (ii) any rights or

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interest in any contract, lease, permit, license, or license agreement covering
real or personal property of any Grantor if under the terms of such contract,
lease, permit, license, or license agreement, or applicable law with respect
thereto, the grant of a security interest or lien therein is prohibited as a
matter of law or under the terms of such contract, lease, permit, license, or
license agreement and such prohibition or restriction has not been waived or the
consent of the other party to such contract, lease, permit, license, or license
agreement has not been obtained (provided, that, (A) the foregoing exclusions of
this clause (ii) shall in no way be construed (1) to apply to the extent that
any described prohibition or restriction is unenforceable under Section 9406,
9407, 9408, or 9409 of the Code or other applicable law, or (2) to apply to the
extent that any consent or waiver has been obtained that would permit Agent’s
Security Interest or Lien notwithstanding the prohibition or restriction on the
pledge of such contract, lease, permit, license, or license agreement and
(B) the foregoing exclusions of clauses (i) and (ii) shall in no way be
construed to limit, impair, or otherwise affect any of Agent’s, any other member
of the Lender Group’s or any Bank Product Provider’s continuing Security
Interests in and liens upon any rights or interests of any Grantor in or to
(1) monies due or to become due under or in connection with any described
contract, lease, permit, license, license agreement, or Stock (including any
Accounts or Stock), or (2) any Proceeds from the sale, license, lease, or other
dispositions of any such contract, lease, permit, license, license agreement, or
Stock); or (iii) any United States intent-to-use trademark applications to the
extent that, and solely during the period in which, the grant of a security
interest therein would impair the validity or enforceability of such
intent-to-use trademark applications under applicable federal law, provided that
upon submission and acceptance by the PTO of an amendment to allege use pursuant
to 15 U.S.C. Section 1060(a) (or any successor provision), such intent-to-use
trademark application shall be considered Collateral.
     3. Security for Secured Obligations. The Security Interest created hereby
secures the payment and performance of the Secured Obligations, whether now
existing or arising hereafter. Without limiting the generality of the foregoing,
this Agreement secures the payment of all amounts which constitute part of the
Secured Obligations and would be owed by Grantors, or any of them, to Agent, the
Lender Group, the Bank Product Providers or any of them, but for the fact that
they are unenforceable or not allowable (in whole or in part) as a claim in an
Insolvency Proceeding involving any Grantor due to the existence of such
Insolvency Proceeding.
     4. Grantors Remain Liable. Anything herein to the contrary notwithstanding,
(a) each of the Grantors shall remain liable under the contracts and agreements
included in the Collateral, including the Pledged Operating Agreements and the
Pledged Partnership Agreements, to perform all of the duties and obligations
thereunder to the same extent as if this Agreement had not been executed,
(b) the exercise by Agent or any other member of the Lender Group of any of the
rights hereunder shall not release any Grantor from any of its duties or
obligations under such contracts and agreements included in the Collateral, and
(c) none of the members of the Lender Group shall have any obligation or
liability under such contracts and agreements included in the Collateral by
reason of this Agreement, nor shall any of the members of the Lender Group be
obligated to perform any of the obligations or duties of any Grantors thereunder
or to take any action to collect or enforce any claim for payment assigned
hereunder. Until an Event of Default shall occur and be continuing, except as
otherwise provided in this Agreement, the Credit Agreement, or any other Loan
Document, Grantors shall have the right to possession and enjoyment of the
Collateral for the purpose of conducting the ordinary course of their respective
businesses, subject to and upon the terms hereof and of the Credit Agreement and
the other Loan Documents. Without limiting the generality of the foregoing, it
is the intention of the parties hereto that record and beneficial ownership of
the Pledged Interests, including all voting, consensual, dividend, and
distribution rights, shall, subject to any restrictions contained in the Credit
Agreement, remain in the applicable Grantor until (i) the occurrence and
continuance of an Event of Default and (ii) Agent has notified the applicable
Grantor of Agent’s election to exercise such rights with respect to the Pledged
Interests pursuant to Section 15.
     5. Representations and Warranties. Each Grantor hereby represents and
warrants to Agent, for the benefit of the Lender Group and the Bank Product
Providers, which representations and warranties shall be true, correct, and
complete, in all material respects (except that such materiality qualifier shall
not be

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applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof), as of the Closing Date, and shall
be true, correct, and complete, in all material respects (except that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof), as of the date of the making of each Advance (or other extension of
credit) made thereafter, as though made on and as of the date of such Advance
(or other extension of credit) (except to the extent that such representations
and warranties relate solely to an earlier date, in which case such
representations and warranties shall be true, correct and complete in all
material respects as of such earlier date) and such representations and
warranties shall survive the execution and delivery of this Agreement:
          (a) The exact legal name of each of the Grantors is set forth on the
signature pages of this Agreement or a written notice provided to Agent pursuant
to Section 6.5 of the Credit Agreement.
          (b) Schedule 7 sets forth all Real Property owned by any of the
Grantors as of the Closing Date.
          (c) As of the Closing Date: (i) Schedule 2 provides a complete and
correct list of all registered Copyrights owned by any Grantor, all applications
for registration of Copyrights owned by any Grantor, and all other Copyrights
owned by any Grantor and material to the conduct of the business of any Grantor;
(ii) Schedule 3 provides a complete and correct list of all Intellectual
Property Licenses entered into by any Grantor pursuant to which (A) any Grantor
has provided any license or other rights in Intellectual Property owned or
controlled by such Grantor to any other Person other than non-exclusive software
licenses granted in the ordinary course of business or (B) any Person has
granted to any Grantor any license or other rights in Intellectual Property
owned or controlled by such Person that is material to the business of such
Grantor, including any Intellectual Property that is incorporated in any
Inventory, software, or other product marketed, sold, licensed, or distributed
by such Grantor; (iii) Schedule 4 provides a complete and correct list of all
Patents owned by any Grantor and all applications for Patents owned by any
Grantor; and (iv) Schedule 5 provides a complete and correct list of all
registered Trademarks owned by any Grantor, all applications for registration of
Trademarks owned by any Grantor, and all other Trademarks owned by any Grantor
and material to the conduct of the business of any Grantor.
          (d) (i) (A) each Grantor owns exclusively or holds licenses in all
Intellectual Property that is necessary to the material conduct of its business,
and (B) all employees and contractors of each Grantor who were involved in the
creation or development of any Intellectual Property for such Grantor that is
necessary to the business of such Grantor have signed agreements containing
assignment of Intellectual Property rights to such Grantor and obligations of
confidentiality;
               (ii) To each Grantor’s knowledge, no Person has infringed or
misappropriated or is currently infringing or misappropriating any Intellectual
Property rights owned by such Grantor, in each case, that either individually or
in the aggregate could reasonably be expected to result in a Material Adverse
Change;
               (iii) Except as set forth on Schedule 5(d)(iii), (A) to each
Grantor’s knowledge, (1) such Grantor has never infringed or misappropriated and
is not currently infringing or misappropriating any Intellectual Property rights
of any Person, and (2) no product manufactured, used, distributed, licensed, or
sold by or service provided by such Grantor has ever infringed or
misappropriated or is currently infringing or misappropriating any Intellectual
Property rights of any Person, in each case, except where such infringement or
misappropriation either individually or in the aggregate could not reasonably be
expected to result in a Material Adverse Change, and (B) there are no pending,
or to any Grantor’s knowledge, threatened infringement or misappropriation
claims or proceedings pending against any Grantor, and no Grantor has received
any notice or other communication of any actual or alleged infringement or
misappropriation of any Intellectual Property rights of any Person, in each
case, except where such infringement either individually or in the aggregate
could not reasonably be expected to result in a Material Adverse Change;

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               (iv) to each Grantor’s knowledge, all registered Copyrights,
registered Trademarks, and issued Patents that are owned by such Grantor and
necessary in to the conduct of its business are valid, subsisting and
enforceable and in compliance with all legal requirements, filings, and payments
and other actions that are required to maintain such Intellectual Property in
full force and effect, and
               (v) each Grantor has taken reasonable steps to maintain the
confidentiality of and otherwise protect and enforce its rights in all trade
secrets owned by such Grantor that are necessary in the business of such
Grantor.
          (e) This Agreement creates a valid security interest in the Collateral
of each Grantor, to the extent a security interest therein can be created under
the Code, securing the payment of the Secured Obligations. Except to the extent
a security interest in the Collateral cannot be perfected by the filing of a
financing statement under the Code, all filings and other actions necessary or
desirable to perfect and protect such security interest have been duly taken or
will have been taken upon the filing of financing statements listing each
applicable Grantor, as a debtor, and Agent, as secured party, in the
jurisdictions listed next to such Grantor’s name on Schedule 8. Upon the making
of such filings, Agent shall have a first priority perfected security interest
in the Collateral of each Grantor to the extent such security interest can be
perfected by the filing of a financing statement. Upon filing of the Copyright
Security Agreement with the United States Copyright Office, filing of the Patent
Security Agreement and the Trademark Security Agreement with the PTO, and the
filing of appropriate financing statements in the jurisdictions listed on
Schedule 8, all action necessary or desirable to protect and perfect the
Security Interest in and to on each Grantor’s Material Patents, Trademarks, or
Copyrights has been taken and such perfected Security Interest is enforceable as
such as against any and all creditors of and purchasers from any Grantor. All
action by any Grantor necessary to protect and perfect such security interest on
each item of Collateral has been duly taken.
          (f) (i) Except for the Security Interest created hereby, each Grantor
is and will at all times be the sole holder of record and the legal and
beneficial owner, free and clear of all Liens other than Permitted Liens, of the
Pledged Interests indicated on Schedule 6 as being owned by such Grantor and,
when acquired by such Grantor, any Pledged Interests acquired after the Closing
Date; (ii) all of the Pledged Interests are duly authorized, validly issued,
fully paid and nonassessable and the Pledged Interests constitute or will
constitute the percentage of the issued and outstanding Stock of the Pledged
Companies of such Grantor identified on Schedule 6 as supplemented or modified
by any Pledged Interests Addendum or any Joinder to this Agreement; (iii) such
Grantor has the right and requisite authority to pledge, the Investment Related
Property pledged by such Grantor to Agent as provided herein; (iv) all actions
necessary or desirable to perfect and establish the first priority of, or
otherwise protect, Agent’s Liens in the Investment Related Property, and the
proceeds thereof, have been duly taken, upon (A) the execution and delivery of
this Agreement; (B) the taking of possession by Agent (or its agent or designee)
of any certificates representing the Pledged Interests, together with undated
powers (or other documents of transfer acceptable to Agent) endorsed in blank by
the applicable Grantor; (C) the filing of financing statements in the applicable
jurisdiction set forth on Schedule 8 for such Grantor with respect to the
Pledged Interests of such Grantor that are not represented by certificates, and
(D) with respect to any Securities Accounts, the delivery of Control Agreements
with respect thereto; and (v) each Grantor has delivered to and deposited with
Agent all certificates representing the Pledged Interests owned by such Grantor
to the extent such Pledged Interests are represented by certificates, and
undated powers (or other documents of transfer acceptable to Agent) endorsed in
blank with respect to such certificates. None of the Pledged Interests owned or
held by such Grantor has been issued or transferred in violation of any
securities registration, securities disclosure, or similar laws of any
jurisdiction to which such issuance or transfer may be subject.
          (g) No consent, approval, authorization, or other order or other
action by, and no notice to or filing with, any Governmental Authority or any
other Person is required (i) for the grant of a Security Interest by such
Grantor in and to the Collateral pursuant to this Agreement or for the
execution, delivery, or performance of this Agreement by such Grantor, or
(ii) for the exercise by Agent of the voting or other rights provided for in
this Agreement with respect to the Investment Related Property or the remedies
in respect of

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the Collateral pursuant to this Agreement, except as may be required in
connection with such disposition of Investment Related Property by laws
affecting the offering and sale of securities generally. No Intellectual
Property License of any Grantor that is necessary to the conduct of such
Grantor’s business requires any consent of any other Person in order for such
Grantor to grant the Security Interest granted hereunder in such Grantor’s
right, title or interest in or to such Intellectual Property License.
          (h) Intentionally Omitted.
          (i) As to all limited liability company or partnership interests,
issued under any Pledged Operating Agreement or Pledged Partnership Agreement,
each Grantor hereby represents and warrants that the Pledged Interests issued
pursuant to such agreement (A) are not dealt in or traded on securities
exchanges or in securities markets, (B) do not constitute investment company
securities, and (C) are not held by such Grantor in a securities account. In
addition, none of the Pledged Operating Agreements, the Pledged Partnership
Agreements, or any other agreements governing any of the Pledged Interests
issued under any Pledged Operating Agreement or Pledged Partnership Agreement,
provide that such Pledged Interests are securities governed by Division 8 of the
Uniform Commercial Code as in effect in any relevant jurisdiction.
     6. Covenants. Each Grantor, jointly and severally, covenants and agrees
with Agent that from and after the date of this Agreement and until the date of
termination of this Agreement in accordance with Section 22:
          (a) Possession of Collateral. In the event that any Collateral,
including Proceeds, is evidenced by or consists of Negotiable Collateral,
Investment Related Property, or Chattel Paper, in each case, having an aggregate
value or face amount of $100,000 or more for all such Negotiable Collateral,
Investment Related Property, or Chattel Paper, the Grantors shall promptly (and
in any event within two (2) Business Days after receipt thereof), notify Agent
thereof, and if and to the extent that perfection or priority of Agent’s
Security Interest is dependent on or enhanced by possession, the applicable
Grantor, promptly (and in any event within two (2) Business Days) after request
by Agent, shall execute such other documents and instruments as shall be
requested by Agent or, if applicable, endorse and deliver physical possession of
such Negotiable Collateral, Investment Related Property, or Chattel Paper to
Agent, together with such undated powers (or other relevant document of transfer
acceptable to Agent) endorsed in blank as shall be requested by Agent, and shall
do such other acts or things deemed necessary or desirable by Agent to protect
Agent’s Security Interest therein;
          (b) Chattel Paper.
               (i) Promptly (and in any event within two (2) Business Days)
after request by Agent, each Grantor shall take all steps reasonably necessary
to grant Agent control of all electronic Chattel Paper in accordance with the
Code and all “transferable records” as that term is defined in Section 16 of the
Uniform Electronic Transaction Act and Section 201 of the federal Electronic
Signatures in Global and National Commerce Act as in effect in any relevant
jurisdiction, to the extent that the aggregate value or face amount of such
electronic Chattel Paper equals or exceeds $100,000;
               (ii) If any Grantor retains possession of any Chattel Paper or
instruments (which retention of possession shall be subject to the extent
permitted hereby and by the Credit Agreement), promptly upon the request of
Agent, such Chattel Paper and instruments shall be marked with the following
legend: “This writing and the obligations evidenced or secured hereby are
subject to the Security Interest of Wells Fargo Foothill, LLC, as Agent for the
benefit of the Lender Group and the Bank Product Providers”;

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          (c) Control Agreements.
               (i) Except to the extent otherwise excused by the Credit
Agreement, each Grantor shall obtain an authenticated Control Agreement (which
may include a Controlled Account Agreement), from each bank maintaining a
Deposit Account for such Grantor;
               (ii) Except to the extent otherwise excused by the Credit
Agreement, each Grantor shall obtain an authenticated Control Agreement, from
each issuer of uncertificated securities, securities intermediary, or
commodities intermediary issuing or holding any financial assets or commodities
to or for any Grantor;
               (iii) Except to the extent otherwise excused by the Credit
Agreement, each Grantor shall obtain an authenticated Control Agreement with
respect to all of such Grantor’s investment property;
          (d) Letter-of-Credit Rights. If the Grantors (or any of them) are or
become the beneficiary of letters of credit having a face amount or value of
$100,000 or more in the aggregate, then the applicable Grantor or Grantors shall
promptly (and in any event within two (2) Business Days after becoming a
beneficiary), notify Agent thereof in writing and, promptly (and in any event
within two (2) Business Days) after request by Agent, enter into a tri-party
agreement with Agent and the issuer or confirming bank with respect to
letter-of-credit rights assigning such letter-of-credit rights to Agent and
directing all payments thereunder to Agent’s Account, all in form and substance
satisfactory to Agent;
          (e) Commercial Tort Claims. If the Grantors (or any of them) obtain
Commercial Tort Claims having a value, or involving an asserted claim, in the
amount of $100,000 or more in the aggregate for all Commercial Tort Claims, then
the applicable Grantor or Grantors shall promptly (and in any event within two
(2) Business Days of obtaining such Commercial Tort Claim), notify Agent upon
incurring or otherwise obtaining such Commercial Tort Claims and, promptly (and
in any event within two (2) Business Days) after request by Agent, amend
Schedule 1 to describe such Commercial Tort Claims in a manner that reasonably
identifies such Commercial Tort Claims and which is otherwise reasonably
satisfactory to Agent, and hereby authorizes the filing of additional financing
statements or amendments to existing financing statements describing such
Commercial Tort Claims, and agrees to do such other acts or things deemed
necessary or desirable by Agent to give Agent a first priority, perfected
Security Interest in any such Commercial Tort Claim;
          (f) Government Contracts. Other than Accounts and Chattel Paper the
aggregate value of which does not at any one time exceed $100,000, if any
Account or Chattel Paper arises out of a contract or contracts with the United
States of America or any department, agency, or instrumentality thereof,
Grantors shall promptly (and in any event within two (2) Business Days of the
creation thereof) notify Agent thereof and, promptly (and in any event within
two (2) Business Days) after request by Agent, execute any instruments or take
any steps reasonably required by Agent in order that all moneys due or to become
due under such contract or contracts shall be assigned to Agent, for the benefit
of the Lender Group and the Bank Product Providers, and shall provide written
notice thereof under the Assignment of Claims Act or other applicable law;
          (g) Intellectual Property.
               (i) Upon the request of Agent, in order to facilitate filings
with the United States Patent and Trademark Office and the United States
Copyright Office, each Grantor shall execute and deliver to Agent one or more
Copyright Security Agreements, Trademark Security Agreements, or Patent Security
Agreements to further evidence Agent’s Lien on such Grantor’s Material Patents,
Trademarks, or Copyrights, and the General Intangibles of such Grantor relating
thereto or represented thereby;

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               (ii) Each Grantor shall have the duty, with respect to
Intellectual Property that is necessary in the conduct of such Grantor’s
business, to protect and diligently enforce and defend at such Grantor’s expense
its Intellectual Property, including (A) to diligently enforce and defend,
including promptly suing for infringement, misappropriation, or dilution and to
recover any and all damages for such infringement, misappropriation, or
dilution, and filing for opposition, interference, and cancellation against
conflicting Intellectual Property rights of any Person, (B) to prosecute
diligently any trademark application or service mark application that is part of
the Trademarks pending as of the date hereof or hereafter until the termination
of this Agreement, (C) to prosecute diligently any patent application that is
part of the Patents pending as of the date hereof or hereafter until the
termination of this Agreement, (D) to take all reasonable and necessary action
to preserve and maintain all of such Grantor’s Trademarks, Patents, Copyrights,
Intellectual Property Licenses, and its rights therein, including paying all
maintenance fees and filing of applications for renewal, affidavits of use, and
affidavits of noncontestability, and (E) to require all employees, consultants,
and contractors of each Grantor who were involved in the creation or development
of such Intellectual Property to sign agreements containing assignment of
Intellectual Property rights and obligations of confidentiality. Each Grantor
further agrees not to abandon any Intellectual Property or Intellectual Property
License that is necessary in the conduct of such Grantor’s business. Each
Grantor hereby agrees to take the steps described in this Section 6(g)(ii) with
respect to all new or acquired Intellectual Property to which it or any of its
Subsidiaries is now or later becomes entitled that is necessary in the conduct
of such Grantor’s business;
               (iii) Grantors acknowledge and agree that the Lender Group shall
have no duties with respect to any Intellectual Property or Intellectual
Property Licenses of any Grantor. Without limiting the generality of this
Section 6(g)(iii), Grantors acknowledge and agree that no member of the Lender
Group shall be under any obligation to take any steps necessary to preserve
rights in the Collateral consisting of Intellectual Property or Intellectual
Property Licenses against any other Person, but any member of the Lender Group
may do so at its option from and after the occurrence and during the continuance
of an Event of Default, and all expenses incurred in connection therewith
(including reasonable fees and expenses of attorneys and other professionals)
shall be for the sole account of Borrowers and shall be chargeable to the Loan
Account;
               (iv) Each Grantor shall promptly file an application with the
United States Copyright Office for any Copyright that has not been registered
with the United States Copyright Office if such Copyright is necessary in
connection with the conduct of such Grantor’s business. Any expenses incurred in
connection with the foregoing shall be borne by the Grantors;
               (v) On each date on which a Compliance Certificate is delivered
by Administrative Borrower pursuant to Section 5.1 of the Credit Agreement, each
Grantor shall provide Agent with a written report of all new Patents or
Trademarks that are registered or the subject of pending applications for
registrations, and of all Intellectual Property License Agreements that are
material to the conduct of such Grantor’s business, in each case, which were
acquired, registered, or for which applications for registration were filed by
any Grantor during the prior period and any statement of use or amendment to
allege use with respect to intent-to-use trademark applications. In the case of
such registrations or applications therefor, which were acquired by any Grantor,
each such Grantor shall file the necessary documents with the appropriate
Governmental Authority identifying the applicable Grantor as the owner (or as a
co-owner thereof, if such is the case) of such Intellectual Property. In each of
the foregoing cases, the applicable Grantor shall promptly cause to be prepared,
executed, and delivered to Agent supplemental schedules to the applicable Loan
Documents to identify such Patent and Trademark registrations and applications
therefor (with the exception of Trademark applications filed on an intent-to-use
basis for which no statement of use or amendment to allege use has been filed)
and Intellectual Property Licenses as being subject to the security interests
created thereunder;
               (vi) Anything to the contrary in this Agreement notwithstanding,
in no event shall any Grantor, either itself or through any agent, employee,
licensee, or designee, file an application for the registration of any Copyright
with the United States Copyright Office or any similar office or agency in
another country without giving Agent written notice thereof at least three
(3) Business Days prior to such filing

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and complying with Section 6(g)(i). Upon receipt from the United States
Copyright Office of notice of registration of any Copyright, each Grantor shall
promptly (but in no event later than three (3) Business Days following such
receipt) notify Agent of such registration by delivering, or causing to be
delivered, to Agent, documentation sufficient for Agent to perfect Agent’s Liens
on such Copyright. If any Grantor acquires from any Person any Copyright
registered with the United States Copyright Office or an application to register
any Copyright with the United States Copyright Office, such Grantor shall
promptly (but in no event later than three (3) Business Days following such
acquisition) notify Agent of such acquisition and deliver, or cause to be
delivered, to Agent, documentation sufficient for Agent to perfect Agent’s Liens
on such Copyright. In the case of such Copyright registrations or applications
therefor which were acquired by any Grantor, each such Grantor shall promptly
(but in no event later than three (3) Business Days following such acquisition)
file the necessary documents with the appropriate Governmental Authority
identifying the applicable Grantor as the owner (or as a co-owner thereof, if
such is the case) of such Copyrights;
               (vii) Each Grantor shall take reasonable steps to maintain the
confidentiality of, and otherwise protect and enforce its rights in, the
Intellectual Property that is necessary in the conduct of such Grantor’s
business, including, as applicable (A) protecting the secrecy and
confidentiality of its confidential information and trade secrets by having and
enforcing a policy requiring all current employees, consultants, licensees,
vendors and contractors with access to such information to execute appropriate
confidentiality agreements; (B) taking actions reasonably necessary to ensure
that no trade secret falls into the public domain; and (C) protecting the
secrecy and confidentiality of the source code of all software programs and
applications of which it is the owner or licensee by having and enforcing a
policy requiring any licensees (or sublicensees) of such source code to enter
into license agreements with commercially reasonable use and non-disclosure
restrictions; and
               (viii) No Grantor shall enter into any Intellectual Property
License to receive any license or rights in any Intellectual Property of any
other Person unless such Grantor has used commercially reasonable efforts to
permit the assignment of or grant of a security interest in such Intellectual
Property License (and all rights of Grantor thereunder) to the (and any
transferees of Agent).
          (h) Investment Related Property.
               (i) If any Grantor shall acquire, obtain, receive or become
entitled to receive any Pledged Interests after the Closing Date, it shall
promptly (and in any event within two (2) Business Days of acquiring or
obtaining such Collateral) deliver to Agent a duly executed Pledged Interests
Addendum identifying such Pledged Interests;
               (ii) Upon the occurrence and during the continuance of an Event
of Default, following the request of Agent, all sums of money and property paid
or distributed in respect of the Investment Related Property that are received
by any Grantor shall be held by the Grantors in trust for the benefit of Agent
segregated from such Grantor’s other property, and such Grantor shall deliver it
forthwith to Agent in the exact form received;
               (iii) Each Grantor shall promptly deliver to Agent a copy of each
material notice or other material communication received by it in respect of any
Pledged Interests;
               (iv) No Grantor shall make or consent to any amendment or other
modification or waiver with respect to any Pledged Interests, Pledged Operating
Agreement, or Pledged Partnership Agreement to the extent that such amendment,
other modification or waiver could reasonably be expected to materially
adversely affect the interests of Agent or any member of the Lender Group, or
enter into any agreement or permit to exist any restriction with respect to any
Pledged Interests if the same is prohibited pursuant to the Loan Documents;

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               (v) Each Grantor agrees that it will cooperate with Agent in
obtaining all necessary approvals and making all necessary filings under
federal, state, local, or foreign law to effect the perfection of the Security
Interest on the Investment Related Property or to effect any sale or transfer
thereof;
               (vi) As to all limited liability company or partnership
interests, issued under any Pledged Operating Agreement or Pledged Partnership
Agreement, each Grantor hereby covenants that the Pledged Interests issued
pursuant to such agreement (A) are not and shall not be dealt in or traded on
securities exchanges or in securities markets, (B) do not and will not
constitute investment company securities, and (C) are not and will not be held
by such Grantor in a securities account. In addition, none of the Pledged
Operating Agreements, the Pledged Partnership Agreements, or any other
agreements governing any of the Pledged Interests issued under any Pledged
Operating Agreement or Pledged Partnership Agreement, provide or shall provide
that such Pledged Interests are securities governed by Division 8 of the Uniform
Commercial Code as in effect in any relevant jurisdiction.
          (i) Real Property; Fixtures. Each Grantor covenants and agrees that
upon the acquisition of any fee interest in Real Property it will promptly (and
in any event within two (2) Business Days of acquisition) notify Agent in
writing of the acquisition of such Real Property and will grant to Agent, for
the benefit of the Lender Group and the Bank Product Providers, a first priority
Mortgage on each fee interest in Real Property now or hereafter owned by such
Grantor and shall deliver such other documentation and opinions, in form and
substance satisfactory to Agent, in connection with the grant of such Mortgage
as Agent shall request in its Permitted Discretion, including title insurance
policies, financing statements, fixture filings and environmental audits and
such Grantor shall pay all recording costs, intangible taxes and other fees and
costs (including reasonable attorneys fees and expenses) incurred in connection
therewith. Each Grantor acknowledges and agrees that, to the extent permitted by
applicable law, all of the Collateral shall remain personal property regardless
of the manner of its attachment or affixation to real property;
          (j) Transfers and Other Liens. Grantors shall not (i) sell, assign (by
operation of law or otherwise) or otherwise dispose of, or grant any option with
respect to, any of the Collateral, except as expressly permitted by the Credit
Agreement, or (ii) create or permit to exist any Lien upon or with respect to
any of the Collateral of any Grantor, except for Permitted Liens. The inclusion
of Proceeds in the Collateral shall not be deemed to constitute Agent’s consent
to any sale or other disposition of any of the Collateral except as expressly
permitted in this Agreement or the other Loan Documents;
          (k) Controlled Accounts.
               (i) Each Grantor shall (A) establish and maintain cash management
services of a type and on terms reasonably satisfactory to Agent at one or more
of the banks set forth on Schedule 6(k) (each a “Controlled Account Bank”), and
shall take reasonable steps to ensure that all of its and its Non-CFC
Subsidiaries’ Account Debtors forward payment of the amounts owed by them
directly to such Controlled Account Bank, and (B) deposit or cause to be
deposited promptly, and in any event no later than the first Business Day after
the date of receipt thereof, all of their Collections (including those sent
directly by their Account Debtors to a Grantor) into a bank account of such
Grantor (each, a “Controlled Account”) at one of the Controlled Account Banks;
               (ii) Each Grantor shall establish and maintain Controlled Account
Agreements with Agent and the applicable Controlled Account Bank, in form and
substance reasonably acceptable to Agent. Each such Controlled Account Agreement
shall provide, among other things, that (A) the Controlled Account Bank will
comply with any instructions originated by Agent directing the disposition of
the funds in such Controlled Account without further consent by the applicable
Grantor, (B) the Controlled Account Bank waives, subordinates, or agrees not to
exercise any rights of setoff or recoupment or any other claim against the
applicable Controlled Account other than for payment of its service fees and
other charges directly related to the administration of such Controlled Account
and for returned checks or other items of payment, and (C) the

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Controlled Account Bank will forward by daily sweep all amounts in the
applicable Controlled Account to the Agent’s Account; and
               (iii) So long as no Default or Event of Default has occurred and
is continuing, Borrowers may amend Schedule 6(k) to add or replace a Controlled
Account Bank or Controlled Account; provided, however, that (A) such prospective
Controlled Account Bank shall be reasonably satisfactory to Agent, and (B) prior
to the time of the opening of such Controlled Account, the applicable Grantor
and such prospective Controlled Account Bank shall have executed and delivered
to Agent a Controlled Account Agreement. Each Grantor shall close any of its
Controlled Accounts (and establish replacement Controlled Account accounts in
accordance with the foregoing sentence) as promptly as practicable and in any
event within forty-five (45) days of notice from Agent that the operating
performance, funds transfer, or availability procedures or performance of the
Controlled Account Bank with respect to Controlled Account Accounts or Agent’s
liability under any Controlled Account Agreement with such Controlled Account
Bank is no longer acceptable in Agent’s reasonable judgment;
     7. Relation to Other Security Documents. The provisions of this Agreement
shall be read and construed with the other Loan Documents referred to below in
the manner so indicated.
          (a) Credit Agreement. In the event of any conflict between any
provision in this Agreement and a provision in the Credit Agreement, such
provision of the Credit Agreement shall control.
          (b) Patent, Trademark, Copyright Security Agreements. The provisions
of the Copyright Security Agreements, Trademark Security Agreements, and Patent
Security Agreements are supplemental to the provisions of this Agreement, and
nothing contained in the Copyright Security Agreements, Trademark Security
Agreements, or the Patent Security Agreements shall limit any of the rights or
remedies of Agent hereunder. In the event of any conflict between any provision
in this Agreement and a provision in a Copyright Security Agreement, Trademark
Security Agreement or Patent Security Agreement, such provision of this
Agreement shall control.
     8. Further Assurances.
          (a) Each Grantor agrees that from time to time, at its own expense,
such Grantor will promptly execute and deliver all further instruments and
documents, and take all further action, that Agent may reasonably request, in
order to perfect and protect the Security Interest granted hereby, to create,
perfect or protect the Security Interest purported to be granted hereby or to
enable Agent to exercise and enforce its rights and remedies hereunder with
respect to any of the Collateral.
          (b) Each Grantor authorizes the filing by Agent of financing or
continuation statements, or amendments thereto, and such Grantor will execute
and deliver to Agent such other instruments or notices, as Agent may reasonably
request, in order to perfect and preserve the Security Interest granted or
purported to be granted hereby.
          (c) Each Grantor authorizes Agent at any time and from time to time to
file, transmit, or communicate, as applicable, financing statements and
amendments (i) describing the Collateral as “all personal property of debtor” or
“all assets of debtor” or words of similar effect, (ii) describing the
Collateral as being of equal or lesser scope or with greater detail, or
(iii) that contain any information required by part 5 of Division 9 of the Code
for the sufficiency or filing office acceptance. Each Grantor also hereby
ratifies any and all financing statements or amendments previously filed by
Agent in any jurisdiction.
          (d) Each Grantor acknowledges that it is not authorized to file any
financing statement or amendment or termination statement with respect to any
financing statement filed in connection with this Agreement without the prior
written consent of Agent, subject to such Grantor’s rights under
Section 9509(d)(2) of the Code.

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     9. Agent’s Right to Perform Contracts, Exercise Rights, etc. Upon the
occurrence and during the continuance of an Event of Default, Agent (or its
designee) (a) may proceed to perform any and all of the obligations of any
Grantor contained in any contract, lease, or other agreement and exercise any
and all rights of any Grantor therein contained as fully as such Grantor itself
could, (b) shall have the right to use any Grantor’s rights under Intellectual
Property Licenses in connection with the enforcement of Agent’s rights
hereunder, including the right to prepare for sale and sell any and all
Inventory and Equipment now or hereafter owned by any Grantor and now or
hereafter covered by such licenses, and (c) shall have the right to request that
any Stock that is pledged hereunder be registered in the name of Agent or any of
its nominees.
     10. Agent Appointed Attorney-in-Fact. Each Grantor hereby irrevocably
appoints Agent its attorney-in-fact, with full authority in the place and stead
of such Grantor and in the name of such Grantor or otherwise, at such time as an
Event of Default has occurred and is continuing under the Credit Agreement, to
take any action and to execute any instrument which Agent may reasonably deem
necessary or advisable to accomplish the purposes of this Agreement, including:
          (a) to ask, demand, collect, sue for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
connection with the Accounts or any other Collateral of such Grantor;
          (b) to receive and open all mail addressed to such Grantor and to
notify postal authorities to change the address for the delivery of mail to such
Grantor to that of Agent (provided that, upon removing Collateral or information
regarding Collateral from such mail, Agent shall forward such mail to Grantor);
          (c) to receive, indorse, and collect any drafts or other instruments,
documents, Negotiable Collateral or Chattel Paper;
          (d) to file any claims or take any action or institute any proceedings
which Agent may deem necessary or desirable for the collection of any of the
Collateral of such Grantor or otherwise to enforce the rights of Agent with
respect to any of the Collateral;
          (e) to repair, alter, or supply goods, if any, necessary to fulfill in
whole or in part the purchase order of any Person obligated to such Grantor in
respect of any Account of such Grantor;
          (f) to use any Intellectual Property or Intellectual Property Licenses
of such Grantor, including but not limited to any labels, Patents, Trademarks,
trade names, URLs, domain names, industrial designs, Copyrights, or advertising
matter, in preparing for sale, advertising for sale, or selling Inventory or
other Collateral and to collect any amounts due under Accounts, contracts or
Negotiable Collateral of such Grantor; and
          (g) Agent, on behalf of the Lender Group or the Bank Product
Providers, shall have the right, but shall not be obligated, to bring suit in
its own name to enforce the Intellectual Property and Intellectual Property
Licenses and, if Agent shall commence any such suit, the appropriate Grantor
shall, at the request of Agent, do any and all lawful acts and execute any and
all proper documents reasonably required by Agent in aid of such enforcement.
     To the extent permitted by law, each Grantor hereby ratifies all that such
attorney-in-fact shall lawfully do or cause to be done by virtue hereof. This
power of attorney is coupled with an interest and shall be irrevocable until
this Agreement is terminated.
     11. Agent May Perform. If any Grantor fails to perform any agreement
contained herein, Agent may itself perform, or cause performance of, such
agreement, and the reasonable expenses of Agent incurred in connection therewith
shall be payable, jointly and severally, by Grantors.

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     12. Agent’s Duties. The powers conferred on Agent hereunder are solely to
protect Agent’s interest in the Collateral, for the benefit of the Lender Group
and the Bank Product Providers, and shall not impose any duty upon Agent to
exercise any such powers. Except for the safe custody of any Collateral in its
actual possession and the accounting for moneys actually received by it
hereunder, Agent shall have no duty as to any Collateral or as to the taking of
any necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral. Agent shall be deemed to have exercised reasonable
care in the custody and preservation of any Collateral in its actual possession
if such Collateral is accorded treatment substantially equal to that which Agent
accords its own property.
     13. Collection of Accounts, General Intangibles and Negotiable Collateral.
At any time upon the occurrence and during the continuance of an Event of
Default, Agent or Agent’s designee may (a) notify Account Debtors of any Grantor
that the Accounts, General Intangibles, Chattel Paper or Negotiable Collateral
of such Grantor have been assigned to Agent, for the benefit of the Lender Group
and the Bank Product Providers, or that Agent has a security interest therein,
and (b) collect the Accounts, General Intangibles and Negotiable Collateral of
any Grantor directly, and any collection costs and expenses shall constitute
part of such Grantor’s Secured Obligations under the Loan Documents.
     14. Disposition of Pledged Interests by Agent. None of the Pledged
Interests existing as of the date of this Agreement are, and none of the Pledged
Interests hereafter acquired on the date of acquisition thereof will be,
registered or qualified under the various federal or state securities laws of
the United States and disposition thereof after an Event of Default may be
restricted to one or more private (instead of public) sales in view of the lack
of such registration. Each Grantor understands that in connection with such
disposition, Agent may approach only a restricted number of potential purchasers
and further understands that a sale under such circumstances may yield a lower
price for the Pledged Interests than if the Pledged Interests were registered
and qualified pursuant to federal and state securities laws and sold on the open
market. Each Grantor, therefore, agrees that: (a) if Agent shall, pursuant to
the terms of this Agreement, sell or cause the Pledged Interests or any portion
thereof to be sold at a private sale, Agent shall have the right to rely upon
the advice and opinion of any nationally recognized brokerage or investment firm
(but shall not be obligated to seek such advice and the failure to do so shall
not be considered in determining the commercial reasonableness of such action)
as to the best manner in which to offer the Pledged Interest or any portion
thereof for sale and as to the best price reasonably obtainable at the private
sale thereof; and (b) such reliance shall be conclusive evidence that Agent has
handled the disposition in a commercially reasonable manner.
     15. Voting and Other Rights in Respect of Pledged Interests.
          (a) Upon the occurrence and during the continuation of an Event of
Default, (i) Agent may, at its option, and with two (2) Business Days prior
notice to any Grantor, and in addition to all rights and remedies available to
Agent under any other agreement, at law, in equity, or otherwise, exercise all
voting rights, or any other ownership or consensual rights (including any
dividend or distribution rights) in respect of the Pledged Interests owned by
such Grantor, but under no circumstances is Agent obligated by the terms of this
Agreement to exercise such rights, and (ii) if Agent duly exercises its right to
vote any of such Pledged Interests, each Grantor hereby appoints Agent, such
Grantor’s true and lawful attorney-in-fact and IRREVOCABLE PROXY to vote such
Pledged Interests in any manner Agent deems advisable for or against all matters
submitted or which may be submitted to a vote of shareholders, partners or
members, as the case may be. The power-of-attorney and proxy granted hereby is
coupled with an interest and shall be irrevocable.
          (b) For so long as any Grantor shall have the right to vote the
Pledged Interests owned by it, such Grantor covenants and agrees that it will
not, without the prior written consent of Agent, vote or take any consensual
action with respect to such Pledged Interests which would materially adversely
affect the rights of Agent, the other members of the Lender Group, or the Bank
Product Providers, or the value of the Pledged Interests.
     16. Remedies. Upon the occurrence and during the continuance of an Event of
Default:

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          (a) Agent may, and, at the instruction of the Required Lenders, shall
exercise in respect of the Collateral, in addition to other rights and remedies
provided for herein, in the other Loan Documents, or otherwise available to it,
all the rights and remedies of a secured party on default under the Code or any
other applicable law. Without limiting the generality of the foregoing, each
Grantor expressly agrees that, in any such event, Agent without demand of
performance or other demand, advertisement or notice of any kind (except a
notice specified below of time and place of public or private sale) to or upon
any Grantor or any other Person (all and each of which demands, advertisements
and notices are hereby expressly waived to the maximum extent permitted by the
Code or any other applicable law), may take immediate possession of all or any
portion of the Collateral and (i) require Grantors to, and each Grantor hereby
agrees that it will at its own expense and upon request of Agent forthwith,
assemble all or part of the Collateral as directed by Agent and make it
available to Agent at one or more locations where such Grantor regularly
maintains Inventory, and (ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of Agent’s offices or elsewhere, for cash, on credit, and upon such other
terms as Agent may deem commercially reasonable. Each Grantor agrees that, to
the extent notice of sale shall be required by law, at least ten (10) days
notice to the applicable Grantor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notification and specifically such notice shall constitute a reasonable
“authenticated notification of disposition” within the meaning of Section 9611
of the Code. Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. Each Grantor agrees that the internet shall
constitute a “place” for purposes of Section 9610(b) of the Code. Each Grantor
agrees that any sale of Collateral to a licensor pursuant to the terms of a
license agreement between such licensor and a Grantor is sufficient to
constitute a commercially reasonable sale (including as to method, terms,
manner, and time) within the meaning of Section 9610 of the Code.
          (b) Agent is hereby granted a license or other right to use, without
liability for royalties or any other charge, each Grantor’s Intellectual
Property, including but not limited to, any labels, Patents, Trademarks, trade
names, URLs, domain names, industrial designs, Copyrights, and advertising
matter, whether owned by any Grantor or with respect to which any Grantor has
rights under license, sublicense, or other agreements (including any
Intellectual Property License), as it pertains to the Collateral, in preparing
for sale, advertising for sale and selling any Collateral, and each Grantor’s
rights under all licenses and all franchise agreements shall inure to the
benefit of Agent.
          (c) Agent may, in addition to other rights and remedies provided for
herein, in the other Loan Documents, or otherwise available to it under
applicable law and without the requirement of notice to or upon any Grantor or
any other Person (which notice is hereby expressly waived to the maximum extent
permitted by the Code or any other applicable law), (i) with respect to any
Grantor’s Deposit Accounts in which Agent’s Liens are perfected by control under
Section 9104 of the Code, instruct the bank maintaining such Deposit Account for
the applicable Grantor to pay the balance of such Deposit Account to or for the
benefit of Agent, and (ii) with respect to any Grantor’s Securities Accounts in
which Agent’s Liens are perfected by control under Section 9106 of the Code,
instruct the securities intermediary maintaining such Securities Account for the
applicable Grantor to (A) transfer any cash in such Securities Account to or for
the benefit of Agent, or (B) liquidate any financial assets in such Securities
Account that are customarily sold on a recognized market and transfer the cash
proceeds thereof to or for the benefit of Agent.
          (d) Any cash held by Agent as Collateral and all cash proceeds
received by Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied against the
Secured Obligations in the order set forth in the Credit Agreement. In the event
the proceeds of Collateral are insufficient to satisfy all of the Secured
Obligations in full, each Grantor shall remain jointly and severally liable for
any such deficiency.
          (e) Each Grantor hereby acknowledges that the Secured Obligations
arise out of a commercial transaction, and agrees that if an Event of Default
shall occur and be continuing Agent shall have

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the right to an immediate writ of possession without notice of a hearing. Agent
shall have the right to the appointment of a receiver for the properties and
assets of each Grantor, and each Grantor hereby consents to such rights and such
appointment and hereby waives any objection such Grantor may have thereto or the
right to have a bond or other security posted by Agent.
     17. Remedies Cumulative. Each right, power, and remedy of Agent as provided
for in this Agreement or in the other Loan Documents or now or hereafter
existing at law or in equity or by statute or otherwise shall be cumulative and
concurrent and shall be in addition to every other right, power, or remedy
provided for in this Agreement or in the other Loan Documents or now or
hereafter existing at law or in equity or by statute or otherwise, and the
exercise or beginning of the exercise by Agent, of any one or more of such
rights, powers, or remedies shall not preclude the simultaneous or later
exercise by Agent of any or all such other rights, powers, or remedies.
     18. Marshaling. Agent shall not be required to marshal any present or
future collateral security (including but not limited to the Collateral) for, or
other assurances of payment of, the Secured Obligations or any of them or to
resort to such collateral security or other assurances of payment in any
particular order, and all of its rights and remedies hereunder and in respect of
such collateral security and other assurances of payment shall be cumulative and
in addition to all other rights and remedies, however existing or arising. To
the extent that it lawfully may, each Grantor hereby agrees that it will not
invoke any law relating to the marshaling of collateral which might cause delay
in or impede the enforcement of Agent’s rights and remedies under this Agreement
or under any other instrument creating or evidencing any of the Secured
Obligations or under which any of the Secured Obligations is outstanding or by
which any of the Secured Obligations is secured or payment thereof is otherwise
assured, and, to the extent that it lawfully may, each Grantor hereby
irrevocably waives the benefits of all such laws.
     19. Indemnity and Expenses.
          (a) Each Grantor agrees to indemnify Agent and the other members of
the Lender Group from and against all claims, lawsuits and liabilities
(including reasonable attorneys fees) growing out of or resulting from this
Agreement (including enforcement of this Agreement) or any other Loan Document
to which such Grantor is a party, except claims, losses or liabilities resulting
from the gross negligence or willful misconduct of the party seeking
indemnification as determined by a final non-appealable order of a court of
competent jurisdiction. This provision shall survive the termination of this
Agreement and the Credit Agreement and the repayment of the Secured Obligations.
          (b) Grantors, jointly and severally, shall, upon demand, pay to Agent
(or Agent, may charge to the Loan Account) all the Lender Group Expenses which
Agent may incur in connection with (i) the administration of this Agreement,
(ii) the custody, preservation, use or operation of, or, upon an Event of
Default, the sale of, collection from, or other realization upon, any of the
Collateral in accordance with this Agreement and the other Loan Documents,
(iii) the exercise or enforcement of any of the rights of Agent hereunder or
(iv) the failure by any Grantor to perform or observe any of the provisions
hereof.
     20. Merger, Amendments; Etc. THIS AGREEMENT, TOGETHER WITH THE OTHER LOAN
DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES. No waiver
of any provision of this Agreement, and no consent to any departure by any
Grantor herefrom, shall in any event be effective unless the same shall be in
writing and signed by Agent, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given. No
amendment of any provision of this Agreement shall be effective unless the same
shall be in writing and signed by Agent and each Grantor to which such amendment
applies.

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     21. Addresses for Notices. All notices and other communications provided
for hereunder shall be given in the form and manner and delivered to Agent at
its address specified in the Credit Agreement, and to any of the Grantors at
their respective addresses specified in the Credit Agreement or Guaranty, as
applicable, or, as to any party, at such other address as shall be designated by
such party in a written notice to the other party.
     22. Continuing Security Interest: Assignments under Credit Agreement. This
Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until the Obligations have been paid
in full in accordance with the provisions of the Credit Agreement and the
Commitments have expired or have been terminated, (b) be binding upon each
Grantor, and their respective successors and assigns, and (c) inure to the
benefit of, and be enforceable by, Agent, and its successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), any Lender
may, in accordance with the provisions of the Credit Agreement, assign or
otherwise transfer all or any portion of its rights and obligations under the
Credit Agreement to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to such Lender
herein or otherwise. Upon payment in full of the Secured Obligations in
accordance with the provisions of the Credit Agreement and the expiration or
termination of the Commitments, the Security Interest granted hereby shall
terminate and all rights to the Collateral shall revert to Grantors or any other
Person entitled thereto. At such time, Agent will authorize the filing of
appropriate termination statements to terminate such Security Interests. No
transfer or renewal, extension, assignment, or termination of this Agreement or
of the Credit Agreement, any other Loan Document, or any other instrument or
document executed and delivered by any Grantor to Agent nor any additional
Advances or other loans made by any Lender to Borrowers, nor the taking of
further security, nor the retaking or re-delivery of the Collateral to Grantors,
or any of them, by Agent, nor any other act of the Lender Group or the Bank
Product Providers, or any of them, shall release any Grantor from any
obligation, except a release or discharge executed in writing by Agent in
accordance with the provisions of the Credit Agreement. Agent shall not by any
act, delay, omission or otherwise, be deemed to have waived any of its rights or
remedies hereunder, unless such waiver is in writing and signed by Agent and
then only to the extent therein set forth. A waiver by Agent of any right or
remedy on any occasion shall not be construed as a bar to the exercise of any
such right or remedy which Agent would otherwise have had on any other occasion.
     23. Governing Law.
          (a) THE VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION,
AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL
MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.
          (b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE
AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS, LOCATED IN THE
COUNTY OF LOS ANGELES, STATE OF CALIFORNIA; PROVIDED, HOWEVER, THAT ANY SUIT
SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING
SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. AGENT AND
EACH GRANTOR WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH
MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENSOR TO OBJECT TO VENUE TO
THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 23(b).
          (c) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AGENT AND EACH
GRANTOR HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY

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TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. AGENT AND EACH GRANTOR REPRESENT THAT EACH HAS REVIEWED THIS
WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
          (d) IF ANY ACTION OR PROCEEDING IS FILED IN A COURT OF THE STATE OF
CALIFORNIA BY OR AGAINST ANY PARTY HERETO IN CONNECTION WITH ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO AND
EACH PARTY HERETO OR THERETO (OTHER THAN A MEMBER OF THE LENDER GROUP) DOES NOT
SUBSEQUENTLY WAIVE IN AN EFFECTIVE MANNER UNDER CALIFORNIA LAW ITS RIGHT TO A
TRIAL BY JURY, (a) THE COURT SHALL, AND IS HEREBY DIRECTED TO, MAKE A GENERAL
REFERENCE PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638 TO A
REFEREE OR REFEREES TO HEAR AND DETERMINE ALL OF THE ISSUES IN SUCH ACTION OR
PROCEEDING (WHETHER OF FACT OR OF LAW) AND TO REPORT A STATEMENT OF DECISION,
PROVIDED THAT ANY SUCH ISSUES PERTAINING TO A “PROVISIONAL REMEDY” AS DEFINED IN
CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1281.8 SHALL BE HEARD AND DETERMINED
BY THE COURT, AND (b) GRANTORS SHALL BE SOLELY RESPONSIBLE TO PAY ALL FEES AND
EXPENSES OF ANY REFEREE APPOINTED IN SUCH ACTION OR PROCEEDING.
     24. New Subsidiaries. Pursuant to Section 5.11 of the Credit Agreement,
certain Subsidiaries (whether by acquisition or creation) of any Grantor are
required to enter into this Agreement by executing and delivering in favor of
Agent a Joinder to this Agreement in substantially the form of Annex 1. Upon the
execution and delivery of Annex 1 by any such new Subsidiary, such Subsidiary
shall become a Grantor hereunder with the same force and effect as if originally
named as a Grantor herein. The execution and delivery of any instrument adding
an additional Grantor as a party to this Agreement shall not require the consent
of any Grantor hereunder. The rights and obligations of each Grantor hereunder
shall remain in full force and effect notwithstanding the addition of any new
Grantor hereunder.
     25. Agent. Each reference herein to any right granted to, benefit conferred
upon or power exercisable by the “Agent” shall be a reference to Agent, for the
benefit of each member of the Lender Group and each of the Bank Product
Providers.
     26. Miscellaneous.
          (a) This Agreement is a Loan Document. This Agreement may be executed
in any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by telefacsimile or
other electronic method of transmission also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document mutatis
mutandis.
          (b) Any provision of this Agreement which is prohibited or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof in that
jurisdiction or affecting the validity or enforceability of such provision in
any other jurisdiction.

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Each provision of this Agreement shall be severable from every other provision
of this Agreement for the purpose of determining the legal enforceability of any
specific provision.
          (c) Headings and numbers have been set forth herein for convenience
only. Unless the contrary is compelled by the context, everything contained in
each Section applies equally to this entire Agreement.
          (d) Neither this Agreement nor any uncertainty or ambiguity herein
shall be construed against any member of the Lender Group or any Grantor,
whether under any rule of construction or otherwise. This Agreement has been
reviewed by all parties and shall be construed and interpreted according to the
ordinary meaning of the words used so as to accomplish fairly the purposes and
intentions of all parties hereto.
          (e) The pronouns used herein shall include, when appropriate, either
gender and both singular and plural, and the grammatical construction of
sentences shall conform thereto.
          (f) Unless the context of this Agreement clearly requires otherwise,
references to the plural include the singular, references to the singular
include the plural, the terms “includes” and “including” are not limiting, and
the term “or” has, except where otherwise indicated, the inclusive meaning
represented by the phrase “and/or”. The words “hereof”, “herein”, “hereby”,
“hereunder”, and similar terms in this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement. Section,
subsection, clause, schedule, and exhibit references herein are to this
Agreement unless otherwise specified. Any reference in this Agreement to any
agreement, instrument, or document shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements, thereto and thereof, as applicable (subject to any
restrictions on such alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements
set forth herein). The words “asset” and “property” shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts, and contract
rights. Any reference herein to the satisfaction, repayment, or payment in full
of the Secured Obligations shall mean the repayment in full in cash (or, in the
case of Letters of Credit or Bank Products, providing Letter of Credit
Collateralization or Bank Product Collateralization, as applicable) of all
Secured Obligations other than unasserted contingent indemnification Secured
Obligations and other than any Bank Product Obligations that, at such time, are
allowed by the applicable Bank Product Provider to remain outstanding and that
are not required by the provisions of the Credit Agreement to be repaid or cash
collateralized. Any reference herein to any Person shall be construed to include
such Person’s successors and assigns. Any requirement of a writing contained
herein shall be satisfied by the transmission of a Record.
          (g) All of the annexes, schedules and exhibits attached to this
Agreement shall be deemed incorporated herein by reference.
[signature pages follow]

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     IN WITNESS WHEREOF, the undersigned parties hereto have caused this
Agreement to be executed and delivered as of the day and year first above
written.

          GRANTORS:   FINISAR CORPORATION.
a Delaware corporation
      By:   /s/ S.K. Workman         Name:   S.K. Workman        Title:   CFO   
 

            OPTIUM CORPORATION,
a Delaware corporation
      By:   /s/ S.K. Workman         Name:   S.K. Workman        Title:   CFO   
 

            AZNA LLC,
a Delaware limited liability company
      By:   /s/ S.K. Workman         Name:   S.K. Workman        Title:   CFO   
 

           
FINISAR SALES, INC.,
a Delaware corporation
      By:   /s/ S.K. Workman         Name:   S.K. Workman        Title:   CFO   
 

           
KAILIGHT PHOTONICS, INC.,
a Delaware corporation
      By:   /s/ S.K. Workman         Name:   S.K. Workman        Title:   CFO   
 

[SIGNATURE PAGE TO SECURITY AGREEMENT]

 

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          AGENT:   WELLS FARGO FOOTHILL, LLC, a Delaware limited
liability company
      By:   /s/ David R. Klages         Name:   David R. Klages        Title:  
Vice President     

[SIGNATURE PAGE TO SECURITY AGREEMENT]

 

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EXHIBIT A

COPYRIGHT SECURITY AGREEMENT
     This COPYRIGHT SECURITY AGREEMENT (this “Copyright Security Agreement”) is
made this ______day of ___, 20___, by and among Grantors listed on the signature
pages hereof (collectively, jointly and severally, “Grantors” and each
individually “Grantor”), and WELLS FARGO FOOTHILL, LLC, a Delaware limited
liability company (“WFF”), in its capacity as agent for the Lender Group and the
Bank Product Providers (in such capacity, together with its successors and
assigns in such capacity, “Agent”).
W I T N E S S E T H:
     WHEREAS, pursuant to that certain Credit Agreement of even date herewith
(as amended, restated, supplemented, or otherwise modified from time to time,
the “Credit Agreement”) by and among Finisar Corporation, a Delaware corporation
(“Parent”), Optium Corporation, a Delaware corporation (“Optium” and Parent each
individually as a “Borrower”, and individually and collectively, jointly and
severally, as the “Borrowers”), the lenders party thereto as “Lenders” (such
Lenders, together with their respective successors and assigns in such capacity,
each, individually, a “Lender” and, collectively, the “Lenders”), and Agent, the
Lender Group has agreed to make certain financial accommodations available to
Borrowers from time to time pursuant to the terms and conditions thereof; and
     WHEREAS, the members of the Lender Group are willing to make the financial
accommodations to Borrowers as provided for in the Credit Agreement, but only
upon the condition, among others, that Grantors shall have executed and
delivered to Agent, for the benefit of the Lender Group and the Bank Product
Providers, that certain Security Agreement, dated as of October 2, 2009
(including all annexes, exhibits or schedules thereto, as from time to time
amended, restated, supplemented or otherwise modified, the “Security
Agreement”); and
     WHEREAS, pursuant to the Security Agreement, Grantors are required to
execute and deliver to Agent, for the benefit of the Lender Group and the Bank
Product Providers, this Copyright Security Agreement;
     NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantors hereby agree as follows:
     1. DEFINED TERMS. All initially capitalized terms used but not otherwise
defined herein have the meanings given to them in the Security Agreement or, if
not defined therein, in the Credit Agreement.
     2. GRANT OF SECURITY INTEREST IN COPYRIGHT COLLATERAL. Each Grantor hereby
unconditionally grants, assigns, and pledges to Agent, for the benefit each
member of the Lender Group and each of the Bank Product Providers, to secure the
Secured Obligations, a continuing security interest (referred to in this
Copyright Security Agreement as the “Security Interest”) in all of such
Grantor’s right, title and interest in and to the following, whether now owned
or hereafter acquired or arising (collectively, the “Copyright Collateral”):
          (a) all of such Grantor’s Copyrights and Copyright Intellectual
Property Licenses to which it is a party including those referred to on
Schedule I;
          (b) all renewals or extensions of the foregoing; and
          (c) all products and proceeds of the foregoing, including any claim by
such Grantor against third parties for past, present or future infringement of
any Copyright or any Copyright exclusively

 

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licensed under any Intellectual Property License, including the right to receive
damages, or the right to receive license fees, royalties, and other compensation
under any Copyright Intellectual Property License.
     3. SECURITY FOR SECURED OBLIGATIONS. This Copyright Security Agreement and
the Security Interest created hereby secures the payment and performance of the
Secured Obligations, whether now existing or arising hereafter. Without limiting
the generality of the foregoing, this Copyright Security Agreement secures the
payment of all amounts which constitute part of the Secured Obligations and
would be owed by Grantors, or any of them, to Agent, the Lender Group, the Bank
Product Providers or any of them, whether or not they are unenforceable or not
allowable due to the existence of an Insolvency Proceeding involving any
Grantor.
     4. SECURITY AGREEMENT. The Security Interest granted pursuant to this
Copyright Security Agreement is granted in conjunction with the security
interests granted to Agent, for the benefit of the Lender Group and the Bank
Product Providers, pursuant to the Security Agreement. Each Grantor hereby
acknowledges and affirms that the rights and remedies of Agent with respect to
the Security Interest in the Copyright Collateral made and granted hereby are
more fully set forth in the Security Agreement, the terms and provisions of
which are incorporated by reference herein as if fully set forth herein. To the
extent there is any inconsistency between this Copyright Security Agreement and
the Security Agreement, the Security Agreement shall control.
     5. AUTHORIZATION TO SUPPLEMENT. Grantors shall give Agent prior written
notice of no less than three (3) Business Days before filing any additional
application for registration of any Copyright and prompt notice in writing of
any additional copyright registrations granted therefor after the date hereof.
Without limiting Grantors’ obligations under this Section, Grantors hereby
authorize Agent unilaterally to modify this Copyright Security Agreement by
amending Schedule I to include any future United States registered copyrights or
applications therefor of each Grantor. Notwithstanding the foregoing, no failure
to so modify this Copyright Security Agreement or amend Schedule I shall in any
way affect, invalidate or detract from Agent’s continuing security interest in
all Collateral, whether or not listed on Schedule I.
     6. COUNTERPARTS. This Copyright Security Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same
Copyright Security Agreement. Delivery of an executed counterpart of this
Copyright Security Agreement by telefacsimile or other electronic method of
transmission shall be equally as effective as delivery of an original executed
counterpart of this Copyright Security Agreement. Any party delivering an
executed counterpart of this Copyright Security Agreement by telefacsimile or
other electronic method of transmission also shall deliver an original executed
counterpart of this Copyright Security Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Copyright Security Agreement.
     7. CONSTRUCTION. This Copyright Security Agreement is a Loan Document.
Unless the context of this Copyright Security Agreement clearly requires
otherwise, references to the plural include the singular, references to the
singular include the plural, the terms “includes” and “including” are not
limiting, and the term “or” has, except where otherwise indicated, the inclusive
meaning represented by the phrase “and/or”. The words “hereof”, “herein”,
“hereby”, “hereunder”, and similar terms in this Copyright Security Agreement
refer to this Copyright Security Agreement as a whole and not to any particular
provision of this Copyright Security Agreement. Section, subsection, clause,
schedule, and exhibit references herein are to this Copyright Security Agreement
unless otherwise specified. Any reference in this Copyright Security Agreement
to any agreement, instrument, or document shall include all alterations,
amendments, changes, extensions, modifications, renewals, replacements,
substitutions, joinders, and supplements, thereto and thereof, as applicable
(subject to any restrictions on such alterations, amendments, changes,
extensions, modifications, renewals, replacements, substitutions, joinders, and
supplements set forth herein). The words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any and all

3

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tangible and intangible assets and properties, including cash, securities,
accounts, and contract rights. Any reference herein to the satisfaction,
repayment, or payment in full of the Secured Obligations shall mean the
repayment in full in cash (or, in the case of Letters of Credit or Bank
Products, providing Letter of Credit Collateralization or Bank Product
Collateralization, as applicable) of all Secured Obligations other than
unasserted contingent indemnification Secured Obligations and other than any
Bank Product Obligations that, at such time, are allowed by the applicable Bank
Product Provider to remain outstanding and that are not required by the
provisions of the Credit Agreement to be repaid or cash collateralized. Any
reference herein to any Person shall be construed to include such Person’s
successors and assigns. Any requirement of a writing contained herein shall be
satisfied by the transmission of a Record.
     8. THE VALIDITY OF THIS COPYRIGHT SECURITY AGREEMENT, THE CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO
WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE
DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF CALIFORNIA.
     9. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION
WITH THIS COPYRIGHT SECURITY AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE
STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN
THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA; PROVIDED, HOWEVER, THAT ANY SUIT
SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING
SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. AGENT AND
EACH GRANTOR WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH
MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO
THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 9.
     10. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AGENT AND EACH
GRANTOR HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS COPYRIGHT SECURITY AGREEMENT
OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.
AGENT AND EACH GRANTOR REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS COPYRIGHT
SECURITY AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
     11. IF ANY ACTION OR PROCEEDING IS FILED IN A COURT OF THE STATE OF
CALIFORNIA BY OR AGAINST ANY PARTY HERETO IN CONNECTION WITH ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS COPYRIGHT SECURITY AGREEMENT OR ANY DOCUMENT
RELATED HERETO AND EACH PARTY HERETO OR THERETO DOES NOT SUBSEQUENTLY WAIVE IN
AN EFFECTIVE MANNER UNDER CALIFORNIA LAW ITS RIGHT TO A TRIAL BY JURY, (a) THE
COURT SHALL, AND IS HEREBY DIRECTED TO, MAKE A GENERAL REFERENCE PURSUANT TO
CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638 TO A REFEREE OR REFEREES TO HEAR
AND DETERMINE ALL OF THE ISSUES IN SUCH ACTION OR PROCEEDING (WHETHER OF FACT OR
OF LAW) AND TO REPORT A STATEMENT OF DECISION, PROVIDED THAT ANY SUCH ISSUES
PERTAINING TO A “PROVISIONAL REMEDY” AS DEFINED IN CALIFORNIA CODE OF CIVIL
PROCEDURE SECTION 1281.8 SHALL BE HEARD AND DETERMINED BY THE COURT, AND
(b) GRANTORS

4

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SHALL BE SOLELY RESPONSIBLE TO PAY ALL FEES AND EXPENSES OF ANY REFEREE
APPOINTED IN SUCH ACTION OR PROCEEDING.
[signature page follows]

5

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     IN WITNESS WHEREOF, the parties hereto have caused this Copyright Security
Agreement to be executed and delivered as of the day and year first above
written.
        .

          GRANTORS:

 
            By:           Name:           Title:            
    By:           Name:           Title:         AGENT:   ACCEPTED AND
ACKNOWLEDGED BY:

WELLS FARGO FOOTHILL, LLC, a
Delaware limited liability company
      By:           Name:           Title:        

[SIGNATURE PAGE TO COPYRIGHT SECURITY AGREEMENT]

 

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EXHIBIT B
PATENT SECURITY AGREEMENT
     This PATENT SECURITY AGREEMENT (this “Patent Security Agreement”) is made
this            day of                  , 20        , by and among the Grantors
listed on the signature pages hereof (collectively, jointly and severally,
“Grantors” and each individually “Grantor”), and WELLS FARGO FOOTHILL, LLC, a
Delaware limited liability company (“WFF”), in its capacity as agent for the
Lender Group and the Bank Product Providers (in such capacity, together with its
successors and assigns in such capacity, “Agent”).
W I T N E S S E T H:
     WHEREAS, pursuant to that certain Credit Agreement of even date herewith
(as amended, restated, supplemented, or otherwise modified from time to time,
the “Credit Agreement”) by and among Finisar Corporation, a Delaware corporation
(“Parent”), Optium Corporation, a Delaware corporation (“Optium” and Parent each
individually as a “Borrower”, and individually and collectively, jointly and
severally, as the “Borrowers”), the lenders party thereto as “Lenders” (such
Lenders, together with their respective successors and assigns in such capacity,
each, individually, a “Lender” and, collectively, the “Lenders”), and Agent, the
Lender Group has agreed to make certain financial accommodations available to
Borrowers from time to time pursuant to the terms and conditions thereof; and
     WHEREAS, the members of Lender Group are willing to make the financial
accommodations to Borrowers as provided for in the Credit Agreement, but only
upon the condition, among others, that the Grantors shall have executed and
delivered to Agent, for the benefit of the Lender Group and the Bank Product
Providers, that certain Security Agreement, dated as of October 2, 2009
(including all annexes, exhibits or schedules thereto, as from time to time
amended, restated, supplemented or otherwise modified, the “Security
Agreement”); and
     WHEREAS, pursuant to the Security Agreement, Grantors are required to
execute and deliver to Agent, for the benefit of the Lender Group and the Bank
Product Providers, this Patent Security Agreement;
     NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor hereby agrees as
follows:
     1. DEFINED TERMS. All initially capitalized terms used but not otherwise
defined herein have the meanings given to them in the Security Agreement or, if
not defined therein, in the Credit Agreement.
     2. GRANT OF SECURITY INTEREST IN PATENT COLLATERAL. Each Grantor hereby
unconditionally grants, assigns, and pledges to Agent, for the benefit each
member of the Lender Group and each of the Bank Product Providers, to secure the
Secured Obligations, a continuing security interest (referred to in this Patent
Security Agreement as the “Security Interest”) in all of such Grantor’s right,
title and interest in and to the following, whether now owned or hereafter
acquired or arising (collectively, the “Patent Collateral”):
     (a) all of its Patents and Patent Intellectual Property Licenses to which
it is a party including those referred to on Schedule I;
     (b) all divisionals, continuations, continuations-in-part, reissues,
reexaminations, or extensions of the foregoing; and

 

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     (c) all products and proceeds of the foregoing, including any claim by such
Grantor against third parties for past, present or future infringement of any
Patent or any Patent exclusively licensed under any Intellectual Property
License, including the right to receive damages, or right to receive license
fees, royalties, and other compensation under any Patent Intellectual Property
License.
     3. SECURITY FOR SECURED OBLIGATIONS. This Patent Security Agreement and the
Security Interest created hereby secures the payment and performance of the
Secured Obligations, whether now existing or arising hereafter. Without limiting
the generality of the foregoing, this Patent Security Agreement secures the
payment of all amounts which constitute part of the Secured Obligations and
would be owed by Grantors, or any of them, to Agent, the Lender Group, the Bank
Product Providers or any of them, whether or not they are unenforceable or not
allowable due to the existence of an Insolvency Proceeding involving any
Grantor.
     4. SECURITY AGREEMENT. The Security Interest granted pursuant to this
Patent Security Agreement is granted in conjunction with the security interests
granted to Agent, for the benefit of the Lender Group and the Bank Product
Providers, pursuant to the Security Agreement. Each Grantor hereby acknowledges
and affirms that the rights and remedies of Agent with respect to the Security
Interest in the Patent Collateral made and granted hereby are more fully set
forth in the Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein. To the extent
there is any inconsistency between this Patent Security Agreement and the
Security Agreement, the Security Agreement shall control.
     5. AUTHORIZATION TO SUPPLEMENT. If any Grantor shall obtain rights to any
new patent application or issued Patent or become entitled to the benefit of any
patent application or Patent for any divisional, continuation,
continuation-in-part, reissue, or reexamination of any existing Patent or patent
application, the provisions of this Patent Security Agreement shall
automatically apply thereto. Grantors shall give prompt notice in writing to
Agent with respect to any such new patent rights. Without limiting Grantors’
obligations under this Section, Grantors hereby authorize Agent unilaterally to
modify this Patent Security Agreement by amending Schedule I to include any such
new patent rights of each Grantor. Notwithstanding the foregoing, no failure to
so modify this Patent Security Agreement or amend Schedule I shall in any way
affect, invalidate or detract from Agent’s continuing security interest in all
Collateral, whether or not listed on Schedule I.
     6. COUNTERPARTS. This Patent Security Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same Patent
Security Agreement. Delivery of an executed counterpart of this Patent Security
Agreement by telefacsimile or other electronic method of transmission shall be
equally as effective as delivery of an original executed counterpart of this
Patent Security Agreement. Any party delivering an executed counterpart of this
Patent Security Agreement by telefacsimile or other electronic method of
transmission also shall deliver an original executed counterpart of this Patent
Security Agreement but the failure to deliver an original executed counterpart
shall not affect the validity, enforceability, and binding effect of this Patent
Security Agreement.
     7. CONSTRUCTION. This Patent Security Agreement is a Loan Document. Unless
the context of this Patent Security Agreement clearly requires otherwise,
references to the plural include the singular, references to the singular
include the plural, the terms “includes” and “including” are not limiting, and
the term “or” has, except where otherwise indicated, the inclusive meaning
represented by the phrase “and/or”. The words “hereof”, “herein”, “hereby”,
“hereunder”, and similar terms in this Patent Security Agreement refer to this
Patent Security Agreement as a whole and not to any particular provision of this
Patent Security Agreement. Section, subsection, clause, schedule, and exhibit
references herein are to this Patent Security Agreement unless otherwise
specified. Any reference in this Patent Security Agreement to any agreement,
instrument, or document shall include all alterations, amendments, changes,
extensions, modifications, renewals, replacements, substitutions, joinders, and
supplements, thereto and thereof, as

3

--------------------------------------------------------------------------------

 

applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein). The words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties, including cash, securities,
accounts, and contract rights. Any reference herein to the satisfaction,
repayment, or payment in full of the Secured Obligations shall mean the
repayment in full in cash (or, in the case of Letters of Credit or Bank
Products, providing Letter of Credit Collateralization or Bank Product
Collateralization, as applicable) of all Secured Obligations other than
unasserted contingent indemnification Secured Obligations and other than any
Bank Product Obligations that, at such time, are allowed by the applicable Bank
Product Provider to remain outstanding and that are not required by the
provisions of this Patent Security Agreement to be repaid or cash
collateralized. Any reference herein to any Person shall be construed to include
such Person’s successors and assigns. Any requirement of a writing contained
herein shall be satisfied by the transmission of a Record.
     8. THE VALIDITY OF THIS PATENT SECURITY AGREEMENT, THE CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO
WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE
DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF CALIFORNIA.
     9. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION
WITH THIS PATENT SECURITY AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE
STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN
THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA; PROVIDED, HOWEVER, THAT ANY SUIT
SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING
SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. AGENT AND
EACH GRANTOR WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH
MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO
THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 9.
     10. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AGENT AND EACH
GRANTOR HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS PATENT SECURITY AGREEMENT OR
ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.
AGENT AND EACH GRANTOR REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS PATENT SECURITY
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
     11. IF ANY ACTION OR PROCEEDING IS FILED IN A COURT OF THE STATE OF
CALIFORNIA BY OR AGAINST ANY PARTY HERETO IN CONNECTION WITH ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS PATENT SECURITY AGREEMENT OR ANY DOCUMENT
RELATED HERETO AND EACH PARTY HERETO OR THERETO DOES NOT SUBSEQUENTLY WAIVE IN
AN EFFECTIVE MANNER UNDER CALIFORNIA LAW ITS RIGHT TO A TRIAL BY JURY, (a) THE
COURT SHALL, AND IS HEREBY DIRECTED TO, MAKE A GENERAL REFERENCE PURSUANT TO
CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638 TO A REFEREE OR REFEREES TO HEAR
AND DETERMINE ALL OF THE ISSUES IN SUCH ACTION OR PROCEEDING (WHETHER OF FACT OR
OF LAW) AND TO REPORT A STATEMENT OF DECISION, PROVIDED THAT ANY SUCH ISSUES
PERTAINING

4

--------------------------------------------------------------------------------

 

TO A “PROVISIONAL REMEDY” AS DEFINED IN CALIFORNIA CODE OF CIVIL PROCEDURE
SECTION 1281.8 SHALL BE HEARD AND DETERMINED BY THE COURT, AND (b) GRANTORS
SHALL BE SOLELY RESPONSIBLE TO PAY ALL FEES AND EXPENSES OF ANY REFEREE
APPOINTED IN SUCH ACTION OR PROCEEDING.
[Signature page follows]

5

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the parties hereto have caused this Patent Security
Agreement to be executed and delivered as of the day and year first above
written.

          GRANTORS:                By:           Name:           Title:        
            By:           Name:           Title:         AGENT: ACCEPTED AND
ACKNOWLEDGED BY:
WELLS FARGO FOOTHILL, LLC,
a Delaware limited liability company
      By:           Name:           Title:        

[SIGNATURE PAGE TO PATENT SECURITY AGREEMENT]

 

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EXHIBIT C
PLEDGED INTERESTS ADDENDUM
     This Pledged Interests Addendum, dated as of                      ___,
20___(this “Pledged Interests Addendum”), is delivered pursuant to Section 6 of
the Security Agreement referred to below. The undersigned hereby agrees that
this Pledged Interests Addendum may be attached to that certain Security
Agreement, dated as of                      , 20___, (as amended, restated,
supplemented, or otherwise modified from time to time, the “Security
Agreement”), made by the undersigned, together with the other Grantors named
therein, to WELLS FARGO FOOTHILL, LLC, a Delaware limited liability company, as
Agent. Initially capitalized terms used but not defined herein shall have the
meaning ascribed to such terms in the Security Agreement or, if not defined
therein, in the Credit Agreement. The undersigned hereby agrees that the
additional interests listed on Schedule I shall be and become part of the
Pledged Interests pledged by the undersigned to Agent in the Security Agreement
and any pledged company set forth on Schedule I shall be and become a “Pledged
Company” under the Security Agreement, each with the same force and effect as if
originally named therein.
     This Pledged Interests Addendum is a Loan Document. Delivery of an executed
counterpart of this Pledged Interests Addendum by telefacsimile or other
electronic method of transmission shall be equally as effective as delivery of
an original executed counterpart of this Pledged Interests Addendum. If the
undersigned delivers an executed counterpart of this Pledged Interests Addendum
by telefacsimile or other electronic method of transmission, the undersigned
shall also deliver an original executed counterpart of this Pledged Interests
Addendum but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Pledged
Interests Addendum.
     The undersigned hereby certifies that the representations and warranties
set forth in Section 5 of the Security Agreement of the undersigned are true and
correct as to the Pledged Interests listed herein on and as of the date hereof.
     THE VALIDITY OF THIS PLEDGED INTERESTS ADDENDUM, THE CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO
WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE
DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF CALIFORNIA.
     THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION
WITH THIS PLEDGED INTERESTS ADDENDUM SHALL BE TRIED AND LITIGATED ONLY IN THE
STATE, AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN
THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA; PROVIDED, HOWEVER, THAT ANY SUIT
SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING
SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. AGENT AND
EACH GRANTOR WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH
MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO
THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS PARAGRAPH.
     TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AGENT AND EACH GRANTOR
HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS PLEDGED INTERESTS ADDENDUM OR ANY OF
THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY

 

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CLAIMS. AGENT AND EACH GRANTOR REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND
EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS
PLEDGED INTERESTS ADDENDUM MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
     IF ANY ACTION OR PROCEEDING IS FILED IN A COURT OF THE STATE OF CALIFORNIA
BY OR AGAINST ANY PARTY HERETO IN CONNECTION WITH ANY OF THE TRANSACTIONS
CONTEMPLATED BY THIS PLEDGED INTERESTS ADDENDUM OR ANY DOCUMENT RELATED HERETO
AND EACH PARTY HERETO OR THERETO DOES NOT SUBSEQUENTLY WAIVE IN AN EFFECTIVE
MANNER UNDER CALIFORNIA LAW ITS RIGHT TO A TRIAL BY JURY, (a) THE COURT SHALL,
AND IS HEREBY DIRECTED TO, MAKE A GENERAL REFERENCE PURSUANT TO CALIFORNIA CODE
OF CIVIL PROCEDURE SECTION 638 TO A REFEREE OR REFEREES TO HEAR AND DETERMINE
ALL OF THE ISSUES IN SUCH ACTION OR PROCEEDING (WHETHER OF FACT OR OF LAW) AND
TO REPORT A STATEMENT OF DECISION, PROVIDED THAT ANY SUCH ISSUES PERTAINING TO A
“PROVISIONAL REMEDY” AS DEFINED IN CALIFORNIA CODE OF CIVIL PROCEDURE SECTION
1281.8 SHALL BE HEARD AND DETERMINED BY THE COURT, AND (b) GRANTORS SHALL BE
SOLELY RESPONSIBLE TO PAY ALL FEES AND EXPENSES OF ANY REFEREE APPOINTED IN SUCH
ACTION OR PROCEEDING.
[signature page follows]

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     IN WITNESS WHEREOF, the undersigned has caused this Pledged Interests
Addendum to be executed and delivered as of the day and year first above
written.

            [________________________]
      By:           Name:           Title:        

[SIGNATURE PAGE TO PLEDGED INTERESTS ADDENDUM]

 

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EXHIBIT D

TRADEMARK SECURITY AGREEMENT
     This TRADEMARK SECURITY AGREEMENT (this “Trademark Security Agreement”) is
made this                 day of                             , 20             ,
by and among Grantors listed on the signature pages hereof (collectively,
jointly and severally, “Grantors” and each individually “Grantor”), and WELLS
FARGO FOOTHILL, LLC, a Delaware limited liability company (“WFF”), in its
capacity as agent for the Lender Group and the Bank Product Providers (in such
capacity, together with its successors and assigns in such capacity, “Agent”).
W I T N E S S E T H:
     WHEREAS, pursuant to that certain Credit Agreement of even date herewith
(as amended, restated, supplemented, or otherwise modified from time to time,
the “Credit Agreement”) by and among Finisar Corporation, a Delaware corporation
(“Parent”), Optium Corporation, a Delaware corporation (“Optium” and Parent each
individually as a “Borrower”, and individually and collectively, jointly and
severally, as the “Borrowers”), the lenders party thereto as “Lenders” (such
Lenders, together with their respective successors and assigns in such capacity,
each, individually, a “Lender” and, collectively, the “Lenders”), and Agent, the
Lender Group has agreed to make certain financial accommodations available to
Borrowers from time to time pursuant to the terms and conditions thereof; and
     WHEREAS, the members of the Lender Group are willing to make the financial
accommodations to Borrowers as provided for in the Credit Agreement, but only
upon the condition, among others, that Grantors shall have executed and
delivered to Agent, for the benefit of Lender Group and the Bank Product
Providers, that certain Security Agreement, dated as of October 2, 2009
(including all annexes, exhibits or schedules thereto, as from time to time
amended, restated, supplemented or otherwise modified, the “Security
Agreement”); and
     WHEREAS, pursuant to the Security Agreement, Grantors are required to
execute and deliver to Agent, for the benefit of Lender Group and the Bank
Product Providers, this Trademark Security Agreement;
     NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor hereby agrees as
follows:
     1. DEFINED TERMS. All initially capitalized terms used but not otherwise
defined herein have the meanings given to them in the Security Agreement or, if
not defined therein, in the Credit Agreement.
     2. GRANT OF SECURITY INTEREST IN TRADEMARK COLLATERAL. Each Grantor hereby
unconditionally grants, assigns, and pledges to Agent, for the benefit each
member of the Lender Group and each of the Bank Product Providers, to secure the
Secured Obligations, a continuing security interest (referred to in this
Trademark Security Agreement as the “Security Interest”) in all of such
Grantor’s right, title and interest in and to the following, whether now owned
or hereafter acquired or arising (collectively, the “Trademark Collateral”):
          (a) all of its Trademarks and Trademark Intellectual Property Licenses
to which it is a party including those referred to on Schedule I;
          (b) all goodwill of the business connected with the use of, and
symbolized by, each Trademark and each Trademark Intellectual Property License;
and
          (c) all products and proceeds (as that term is defined in the Code) of
the foregoing, including any claim by such Grantor against third parties for
past, present or future (i) infringement or dilution

 

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of any Trademark or any Trademarks exclusively licensed under any Intellectual
Property License, including right to receive any damages, (ii) injury to the
goodwill associated with any Trademark, or (iii) right to receive license fees,
royalties, and other compensation under any Trademark Intellectual Property
License.
     3. SECURITY FOR SECURED OBLIGATIONS. This Trademark Security Agreement and
the Security Interest created hereby secures the payment and performance of the
Secured Obligations, whether now existing or arising hereafter. Without limiting
the generality of the foregoing, this Trademark Security Agreement secures the
payment of all amounts which constitute part of the Secured Obligations and
would be owed by Grantors, or any of them, to Agent, the Lender Group, the Bank
Product Providers or any of them, whether or not they are unenforceable or not
allowable due to the existence of an Insolvency Proceeding involving any
Grantor.
     4. SECURITY AGREEMENT. The Security Interest granted pursuant to this
Trademark Security Agreement is granted in conjunction with the security
interests granted to Agent, for the benefit of the Lender Group and the Bank
Product Providers, pursuant to the Security Agreement. Each Grantor hereby
acknowledges and affirms that the rights and remedies of Agent with respect to
the Security Interest in the Trademark Collateral made and granted hereby are
more fully set forth in the Security Agreement, the terms and provisions of
which are incorporated by reference herein as if fully set forth herein. To the
extent there is any inconsistency between this Trademark Security Agreement and
the Security Agreement, the Security Agreement shall control.
     5. AUTHORIZATION TO SUPPLEMENT. If any Grantor shall obtain rights to any
new trademarks, the provisions of this Trademark Security Agreement shall
automatically apply thereto. Grantors shall give prompt notice in writing to
Agent with respect to any such new trademarks or renewal or extension of any
trademark registration. Without limiting Grantors’ obligations under this
Section, Grantors hereby authorize Agent unilaterally to modify this Trademark
Security Agreement by amending Schedule I to include any such new trademark
rights of each Grantor. Notwithstanding the foregoing, no failure to so modify
this Trademark Security Agreement or amend Schedule I shall in any way affect,
invalidate or detract from Agent’s continuing security interest in all
Collateral, whether or not listed on Schedule I.
     6. COUNTERPARTS. This Trademark Security Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same
Trademark Security Agreement. Delivery of an executed counterpart of this
Trademark Security Agreement by telefacsimile or other electronic method of
transmission shall be equally as effective as delivery of an original executed
counterpart of this Trademark Security Agreement. Any party delivering an
executed counterpart of this Trademark Security Agreement by telefacsimile or
other electronic method of transmission also shall deliver an original executed
counterpart of this Trademark Security Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Trademark Security Agreement.
     7. CONSTRUCTION. This Copyright Security Agreement is a Loan Document.
Unless the context of this Trademark Security Agreement clearly requires
otherwise, references to the plural include the singular, references to the
singular include the plural, the terms “includes” and “including” are not
limiting, and the term “or” has, except where otherwise indicated, the inclusive
meaning represented by the phrase “and/or”. The words “hereof”, “herein”,
“hereby”, “hereunder”, and similar terms in this Trademark Security Agreement
refer to this Trademark Security Agreement as a whole and not to any particular
provision of this Trademark Security Agreement. Section, subsection, clause,
schedule, and exhibit references herein are to this Agreement unless otherwise
specified. Any reference in this Trademark Security Agreement to any agreement,
instrument, or document shall include all alterations, amendments, changes,
extensions, modifications, renewals, replacements, substitutions, joinders, and
supplements, thereto and thereof, as applicable (subject to any restrictions on
such alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein). The
words “asset” and

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“property” shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash,
securities, accounts, and contract rights. Any reference herein to the
satisfaction, repayment, or payment in full of the Secured Obligations shall
mean the repayment in full in cash (or, in the case of Letters of Credit or Bank
Products, providing Letter of Credit Collateralization or Bank Product
Collateralization, as applicable) of all Secured Obligations other than
unasserted contingent indemnification Secured Obligations and other than any
Bank Product Obligations that, at such time, are allowed by the applicable Bank
Product Provider to remain outstanding and that are not required by the
provisions of this Trademark Security Agreement to be repaid or cash
collateralized. Any reference herein to any Person shall be construed to include
such Person’s successors and assigns. Any requirement of a writing contained
herein or in any other Loan Document shall be satisfied by the transmission of a
Record.
     8. THE VALIDITY OF THIS TRADEMARK SECURITY AGREEMENT, THE CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO
WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE
DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF CALIFORNIA.
     9. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION
WITH THIS TRADEMARK SECURITY AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE
STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN
THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA; PROVIDED, HOWEVER, THAT ANY SUIT
SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING
SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. AGENT AND
EACH GRANTOR WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH
MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO
THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 9.
     10. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AGENT AND EACH
GRANTOR HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS TRADEMARK SECURITY AGREEMENT
OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.
AGENT AND EACH GRANTOR REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS TRADEMARK
SECURITY AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
     11. IF ANY ACTION OR PROCEEDING IS FILED IN A COURT OF THE STATE OF
CALIFORNIA BY OR AGAINST ANY PARTY HERETO IN CONNECTION WITH ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS TRADEMARK SECURITY AGREEMENT OR ANY DOCUMENT
RELATED HERETO AND EACH PARTY HERETO OR THERETO DOES NOT SUBSEQUENTLY WAIVE IN
AN EFFECTIVE MANNER UNDER CALIFORNIA LAW ITS RIGHT TO A TRIAL BY JURY, (a) THE
COURT SHALL, AND IS HEREBY DIRECTED TO, MAKE A GENERAL REFERENCE PURSUANT TO
CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638 TO A REFEREE OR REFEREES TO HEAR
AND DETERMINE ALL OF THE ISSUES IN SUCH ACTION OR PROCEEDING (WHETHER OF FACT OR
OF LAW) AND TO REPORT A STATEMENT OF DECISION, PROVIDED THAT ANY SUCH ISSUES
PERTAINING TO A “PROVISIONAL REMEDY” AS DEFINED IN CALIFORNIA CODE OF CIVIL
PROCEDURE

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SECTION 1281.8 SHALL BE HEARD AND DETERMINED BY THE COURT, AND (b) GRANTORS
SHALL BE SOLELY RESPONSIBLE TO PAY ALL FEES AND EXPENSES OF ANY REFEREE
APPOINTED IN SUCH ACTION OR PROCEEDING.
[signature page follows]

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     IN WITNESS WHEREOF, the parties hereto have caused this Trademark Security
Agreement to be executed and delivered as of the day and year first above
written.

       
GRANTORS:
 
 
 

                  By:           Name:           Title:        

       
 
 
 

                  By:           Name:           Title:        

     
AGENT:
  ACCEPTED AND ACKNOWLEDGED BY:

            WELLS FARGO FOOTHILL, LLC, a
Delaware limited liability company
      By:           Name:           Title:        

[SIGNATURE PAGE TO TRADEMARK SECURITY AGREEMENT]