exv10w2






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.






 









 







          (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




9












 





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”;



10









 





          (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;



11









 





               (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



12









 





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;



13









 





               (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



14









 





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.



15









 





     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.



16









 





     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:



17









 





          (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




18












 





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.



19









 





     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





20









 








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.





21









 








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]



22









 








     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]







 









 








	 	 	 	 	 
	 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]



 











 





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




 









 







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









 




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









 




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 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]





 











 





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



 









 





     (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]





 











 





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



 









 




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]




3









 





     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]




 















 





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




 









 








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



3









 





“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



4









 





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 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]