AMENDED AND RESTATED SECURITY AGREEMENT

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                                                                  EXECUTION COPY

Exhibit 10.7

                     AMENDED AND RESTATED SECURITY AGREEMENT

         AMENDED AND RESTATED SECURITY AGREEMENT, dated as of July 28, 2008 (as
amended, restated, supplemented or otherwise modified, this "AGREEMENT") made by
RAPTOR NETWORKS TECHNOLOGY, INC., a Colorado corporation (the "COMPANY"), and
the undersigned subsidiaries of the Company (each a "GRANTOR" and collectively
and together with the Company, the "GRANTORS"), in favor of CASTLERIGG MASTER
INVESTMENTS LTD., a company organized under the laws of the British Virgin
Islands, in its capacity as collateral agent (in such capacity, the "COLLATERAL
AGENT") party to the Securities Purchase Agreements referred to below.

                              W I T N E S S E T H:
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         WHEREAS, the Company and each party listed as a "Buyer" on the Schedule
of Buyers attached to the 2006 SPA referred to below (collectively, the "2006
BUYERS") are parties to a Securities Purchase Agreement, dated as of July 30,
2006 (as amended, restated, supplemented or otherwise modified from time to
time, the "2006 SPA") pursuant to which the Company has sold, and the 2006
Buyers have purchased, the notes issued pursuant thereto (as such notes may be
amended, restated, replaced or otherwise modified from time to time in
accordance with the terms thereof, collectively, the "2006 NOTES");

         WHEREAS, the Company and each party listed as a "Buyer" on the Schedule
of Buyers attached to the 2007 SPA referred to below (collectively, the "2007
BUYERS") are parties to a Securities Purchase Agreement, dated as of July 31,
2007 (as amended, restated, supplemented or otherwise modified from time to
time, the "2007 SPA") pursuant to which the Company has sold, and the 2007
Buyers have purchased, the notes issued pursuant thereto (as such notes may be
amended, restated, replaced or otherwise modified from time to time in
accordance with the terms thereof, collectively, the "2007 NOTES");

         WHEREAS, the Company and each party listed as a "Buyer" on the Schedule
of Buyers attached to the March 2008 SPA referred to below (collectively, the
"MARCH 2008 BUYERS") are parties to the Securities Purchase Agreement, dated as
of March 31, 2008 (as amended, restated, supplemented or otherwise modified from
time to time, the "MARCH 2008 SPA"), pursuant to which the Company has sold, and
the March 2008 Buyers have purchased, the notes issued pursuant thereto (as such
notes may be amended, restated, replaced or otherwise modified from time to time
in accordance with the terms thereof, collectively, the "MARCH 2008 NOTES");

         WHEREAS, in connection with the March 2008 SPA and the 2007 SPA and to
secure the 2007 Notes and the March 2008 Notes issued thereunder, (a) each
Grantor (other than the Company) has executed and delivered the Guaranty, dated
as of March 31, 2008 (the "ORIGINAL GUARANTY"), pursuant to which such Grantor
has guaranteed all of the obligations (collectively, the "ORIGINAL SECURED
OBLIGATIONS") of the Company under the 2007 SPA and the March 2008 SPA and the
other "Transaction Documents" (as such term is defined in each of the 2007 SPA
and the March 2008 SPA; such Transaction Documents as amended, restated,



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supplemented or otherwise modified, are hereinafter referred to as the "ORIGINAL
SECURED TRANSACTION DOCUMENTS"), (b) each Grantor has executed and delivered the
Pledge Agreement, dated as of March 31, 2008 (the "ORIGINAL PLEDGE AGREEMENT"),
pursuant to which such Grantor has granted to the Collateral Agent, for the
benefit of the 2007 Buyers and the March 2008 Buyers, a perfected first priority
security interest in and a lien on the Collateral described in the Original
Pledge Agreement and (c) each Grantor has executed and delivered the Security
Agreement, dated as of March 31, 2008 (the "ORIGINAL SECURITY AGREEMENT" and,
together with the Original Guaranty and the Original Pledge Agreement,
collectively, the "ORIGINAL SECURITY DOCUMENTS"), pursuant to which such Grantor
has granted to the Collateral Agent, for the benefit of the 2007 Buyers and the
March 2008 Buyers, a perfected first priority security interest in and a lien on
the Collateral described in the Original Security Agreement;

         WHEREAS, it being the intention of the parties hereto that (a) the
Original Secured Obligations outstanding as of the date hereof shall continue
and remain in effect pursuant to the Original Secured Transaction Documents (as
amended hereby) and (b) the Notes (as defined below) will rank senior to all
outstanding and future indebtedness of the Grantors;

         WHEREAS, the Company and each party listed as a "Buyer" on the Schedule
of Buyers attached to the July 2008 SPA referred to below (collectively, the
"JULY 2008 BUYERS" and, together with the 2006 Buyers, the 2007 Buyers and the
March 2008 Buyers, each a "BUYER" and collectively, the "BUYERS") intend to
enter into that certain Securities Purchase Agreement, dated as of July __, 2008
(as amended, restated, supplemented or otherwise modified from time to time, the
"JULY 2008 SPA" and, together with the 2006 SPA, the 2007 SPA and the March 2008
SPA, each a "PURCHASE AGREEMENT", and collectively the "PURCHASE AGREEMENTS"),
pursuant to which the Company will sell, and the 2008 Buyers will purchase, the
notes issued pursuant thereto (as such notes may be amended, restated, replaced
or otherwise modified from time to time in accordance with the terms thereof,
collectively, the "JULY 2008 NOTES" and, together with the 2006 Notes, the 2007
Notes and the March 2008 Notes, each a "NOTE" and collectively, the "NOTES");

         WHEREAS, it is a condition precedent to the July 2008 Buyers purchasing
the July 2008 Notes that (a) each Original Security Document shall have been
amended and restated in its entirety to secure the Original Secured Obligations
as well as all of the Company's obligations under the 2006 SPA, the 2006 Notes,
the July 2008 SPA, the July 2008 Notes and the other "Transaction Documents" (as
defined in the July 2008 SPA, such Transaction Documents, as amended, restated,
supplemented or otherwise modified, together with the Original Secured
Transaction Documents, collectively the "TRANSACTION DOCUMENTS") and (b) each of
the Grantors and, with respect to the Security Agreement and the Pledge
Agreement referred to below, the Company shall have executed and delivered to
the Collateral Agent for the benefit of itself and the Buyers (i) this
Agreement, which amends and restates the Original Security Agreement, granting
the Collateral Agent a perfected first priority security interest in, and a lien
on, such Grantor's interest in the Collateral (as defined below), (ii) the
Amended and Restated Guaranty, dated as of the date hereof (as amended,
restated, supplemented or otherwise modified, the "GUARANTY"), amending and


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restating the Original Guaranty and guaranteeing all present and future
obligations of the Company under the Purchase Agreements, the Notes and the
other Transaction Documents and (iii) the Amended and Restated Pledge Agreement,
dated as of the date hereof (as amended, restated, supplemented or otherwise
modified, the "PLEDGE AGREEMENT"), amending and restating the Original Pledge
Agreement and granting the Collateral Agent a perfected first priority security
interest in, and a lien on, such Grantor's personal property described in the
Pledge Agreement;

         WHEREAS, the Grantors are mutually dependent on each other in the
conduct of their respective businesses as an integrated operation, with the
credit needed from time to time by each Grantor often being provided through
financing obtained by the other Grantors and the ability to obtain such
financing being dependent on the successful operations of all of the Grantors as
a whole; and

         WHEREAS, each Grantor has determined that the execution, delivery and
performance of this Agreement directly benefits, and is in the best interest of,
such Grantor.

         NOW, THEREFORE, in consideration of the premises and the agreements
herein and in order to induce the Buyers to perform under the Purchase
Agreements, each Grantor agrees with the Collateral Agent, for the benefit of
the Buyers, as follows:

         SECTION 1. DEFINITIONS.

         (a) Reference is hereby made to the Purchase Agreements and the Notes
for a statement of the terms thereof. All capitalized terms used in this
Agreement and the recitals hereto which are defined in the Purchase Agreements,
the Notes or in Articles 8 or 9 of the Uniform Commercial Code as in effect from
time to time in the State of New York (the "CODE"), and which are not otherwise
defined herein shall have the same meanings herein as set forth therein;
PROVIDED that terms used herein which are defined in the Code as in effect in
the State of New York on the date hereof shall continue to have the same meaning
notwithstanding any replacement or amendment of such statute.

         (b) The following terms shall have the respective meanings provided for
in the Code: "Accounts", "Cash Proceeds", "Chattel Paper", "Commercial Tort
Claim", "Commodity Account", "Commodity Contracts", "Deposit Account",
"Documents", "Equipment", "Fixtures", "General Intangibles", "Goods",
"Instruments", "Inventory", "Investment Property", "Letter-of-Credit Rights",
"Noncash Proceeds", "Payment Intangibles", "Proceeds", "Promissory Notes",
"Security", "Record", "Security Account", "Software", and "Supporting
Obligations".

         (c) As used in this Agreement, the following terms shall have the
respective meanings indicated below, such meanings to be applicable equally to
both the singular and plural forms of such terms:

         "CAPITAL STOCK" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, and (ii) with
respect to any Person that is not a corporation, any and all partnership,
membership or other equity interests of such Person.

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         "COPYRIGHT LICENSES" means all licenses, contracts or other agreements,
whether written or oral, naming any Grantor as licensee or licensor and
providing for the grant of any right to use or sell any works covered by any
Copyright (including, without limitation, all Copyright Licenses set forth in
SCHEDULE II hereto).

         "COPYRIGHTS" means all domestic and foreign copyrights, whether
registered or not, including, without limitation, all copyright rights
throughout the universe (whether now or hereafter arising) in any and all media
(whether now or hereafter developed), in and to all original works of authorship
fixed in any tangible medium of expression, acquired or used by any Grantor
(including, without limitation, all copyrights described in SCHEDULE II hereto),
all applications, registrations and recordings thereof (including, without
limitation, applications, registrations and recordings in the United States
Copyright Office or in any similar office or agency of the United States or any
other country or any political subdivision thereof), and all reissues,
divisions, continuations, continuations in part and extensions or renewals
thereof.

         "EVENT OF DEFAULT" shall have the meaning set forth in the Notes.

         "GOVERNMENTAL AUTHORITY" means any nation or government, any Federal,
state, city, town, municipality, county, local or other political subdivision
thereof or thereto and any department, commission, board, bureau,
instrumentality, agency or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.

         "INSOLVENCY PROCEEDING" means any proceeding commenced by or against
any Person under any provision of the Bankruptcy Code (Chapter 11 of Title 11 of
the United States Code) or under any other bankruptcy or insolvency law,
assignments for the benefit of creditors, formal or informal moratoria,
compositions, or extensions generally with creditors, or proceedings seeking
reorganization, arrangement, or other similar relief.

         "INTELLECTUAL PROPERTY" means the Copyrights, Trademarks and Patents.

         "LICENSES" means the Copyright Licenses, the Trademark Licenses and the
Patent Licenses.

         "LIEN" means any mortgage, lien, pledge, charge, security interest or
other encumbrance upon or in any Collateral (including accounts and contract
rights).

         "PATENT LICENSES" means all licenses, contracts or other agreements,
whether written or oral, naming any Grantor as licensee or licensor and
providing for the grant of any right to manufacture, use or sell any invention
covered by any Patent (including, without limitation, all Patent Licenses set
forth in SCHEDULE II hereto).

         "PATENTS" means all domestic and foreign letters patent, design
patents, utility patents, industrial designs, inventions, trade secrets, ideas,
concepts, methods, techniques, processes, proprietary information, technology,
know-how, formulae, rights of publicity and other general intangibles of like
nature, now existing or hereafter acquired (including, without limitation, all
domestic and foreign letters patent, design patents, utility patents, industrial
designs, inventions, trade secrets, ideas, concepts, methods, techniques,
processes, proprietary information, technology, know-how and formulae described
in SCHEDULE II hereto), all applications, registrations and recordings thereof
(including, without limitation, applications, registrations and recordings in
the United States Patent and Trademark Office, or in any similar office or
agency of the United States or any other country or any political subdivision
thereof), and all reissues, divisions, continuations, continuations in part and
extensions or renewals thereof.

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         "PERSON" means an individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or other enterprise or entity or Governmental
Authority.

         "SATISFACTION IN FULL OF THE OBLIGATIONS" means the satisfaction in
full of all indebtedness and other obligations owed by the Company to the Buyers
under the Notes and the other Transaction Documents (including, without
limitation, all principal, interest (including, without limitation, all interest
that accrues after the commencement of any Insolvency Proceeding of any Grantor,
whether or not the payment of such interest is unenforceable or is not allowable
due to the existence of such Insolvency Proceeding), and fees, but excluding
obligations under the Transaction Documents (other than the Notes) that may
arise after the payment or satisfaction in full of the Notes) by means of cash
payment, conversion into equity securities of the Company, waiver of obligations
by the Buyers, proceeds from Collateral paid to or retained by Buyers in
accordance with the Transaction Documents, and/or such other satisfaction as may
be contemplated by the Notes or the other Transaction Documents or as otherwise
agreed to by the Buyers, or any combination of the foregoing, in each case in
accordance with the Notes or the applicable Transaction Documents.

         "TRADEMARK LICENSES" means all licenses, contracts or other agreements,
whether written or oral, naming any Grantor as licensor or licensee and
providing for the grant of any right concerning any Trademark, together with any
goodwill connected with and symbolized by any such trademark licenses, contracts
or agreements and the right to prepare for sale or lease and sell or lease any
and all Inventory now or hereafter owned by any Grantor and now or hereafter
covered by such licenses (including, without limitation, all Trademark Licenses
described in SCHEDULE II hereto).

         "TRADEMARKS" means all domestic and foreign trademarks, service marks,
collective marks, certification marks, trade names, business names, d/b/a's,
Internet domain names, trade styles, designs, logos and other source or business
identifiers and all general intangibles of like nature, now or hereafter owned,
adopted, acquired or used by any Grantor (including, without limitation, all
domestic and foreign trademarks, service marks, collective marks, certification
marks, trade names, business names, d/b/a's, Internet domain names, trade
styles, designs, logos and other source or business identifiers described in
SCHEDULE II hereto), all applications, registrations and recordings thereof
(including, without limitation, applications, registrations and recordings in
the United States Patent and Trademark Office or in any similar office or agency
of the United States, any state thereof or any other country or any political
subdivision thereof), and all reissues, extensions or renewals thereof, together
with all goodwill of the business symbolized by such marks and all customer
lists, formulae and other Records of any Grantor relating to the distribution of
products and services in connection with which any of such marks are used.

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         SECTION 2. GRANT OF SECURITY INTEREST. As collateral security for all
of the "Obligations" (as defined in SECTION 3 hereof), each Grantor hereby
pledges and assigns to the Collateral Agent for the benefit of the Buyers, and
grants to the Collateral Agent for the benefit of the Buyers a continuing
security interest in, all personal property of each Grantor, wherever located
and whether now or hereafter existing and whether now owned or hereafter
acquired, of every kind and description, tangible or intangible (collectively,
the "COLLATERAL"), including, without limitation, the following:

         (a) all Accounts;

         (b) all Chattel Paper (whether tangible or electronic);

         (c) the Commercial Tort Claims specified on Schedule VI hereto;

         (d) all Deposit Accounts, all cash and other property from time to time
deposited therein and the monies and property in the possession or under the
control of the Collateral Agent or any Buyer or any affiliate, representative,
agent or correspondent of the Collateral Agent or such Buyer;

         (e) all Documents;

         (f) all Equipment;

         (g) all Fixtures;

         (h) all General Intangibles (including, without limitation, all Payment
Intangibles);

         (i) all Goods

         (j) all Instruments (including, without limitation, Promissory Notes
and each certificated Security);

         (k) all Inventory;

         (l) all Investment Property;

         (m) all Copyrights, Patents and Trademarks, and all Licenses;

         (n) all Letter-of-Credit Rights;

         (o) all Supporting Obligations;

         (p) all other tangible and intangible personal property of each Grantor
(whether or not subject to the Code), including, without limitation, all bank
and other accounts and all cash and all investments therein, all proceeds,
products, offspring, accessions, rents, profits, income, benefits, substitutions
and replacements of and to any of the property of any Grantor described in the
preceding clauses of this Section 2 (including, without limitation, any proceeds


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of insurance thereon and all causes of action, claims and warranties now or
hereafter held by each Grantor in respect of any of the items listed above), and
all books, correspondence, files and other Records, including, without
limitation, all tapes, desks, cards, Software, data and computer programs in the
possession or under the control of any Grantor or any other Person from time to
time acting for any Grantor, in each case, to the extent of such Grantors rights
therein, that at any time evidence or contain information relating to any of the
property described in the preceding clauses of this Section 2 or are otherwise
necessary or helpful in the collection or realization thereof; and

         (q) all Proceeds, including all Cash Proceeds and Noncash Proceeds, and
products of any and all of the foregoing Collateral;

in each case howsoever any Grantor's interest therein may arise or appear
(whether by ownership, security interest, claim or otherwise).

Notwithstanding anything herein to the contrary, the term "COLLATERAL" shall not
include, in the case of a Subsidiary (as defined in the Purchase Agreements) of
such Grantor organized under the laws of a jurisdiction other than the United
States, any of the states thereof or the District of Columbia (a "FOREIGN
SUBSIDIARY"), more than 65% (or such greater percentage that, due to a change in
applicable law after the date hereof, (i) would not reasonably be expected to
cause the undistributed earnings of such Foreign Subsidiary as determined for
United States federal income tax purposes to be treated as a deemed dividend to
such Foreign Subsidiary's United States parent and (ii) would not reasonably be
expected to cause any material adverse tax consequences) of the issued and
outstanding shares of Capital Stock entitled to vote (within the meaning of
Treas. Reg. Section 1.956-2(c)(2)) (it being understood and agreed that the
Collateral shall include 100% of the issued and outstanding shares of Capital
Stock not entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) or other equity interest of such Foreign Subsidiary).

The Grantors agree that the pledge of the shares of Capital Stock acquired by a
Grantor of any and all Persons now or hereafter existing who is a Foreign
Subsidiary may be supplemented by one or more separate pledge agreements, deeds
of pledge, share charges, or other similar agreements or instruments, executed
and delivered by the relevant Grantors in favor of the Collateral Agent, which
pledge agreements will provide for the pledge of such shares of Capital Stock in
accordance with the laws of the applicable foreign jurisdiction. With respect to
such shares of Capital Stock, the Collateral Agent may, at any time and from
time to time, in its sole discretion, take actions in such foreign jurisdictions
that will result in the perfection of the Lien created in such shares of Capital
Stock.

         SECTION 3. SECURITY FOR OBLIGATIONS. The security interest created
hereby in the Collateral constitutes continuing collateral security for all of
the following obligations, whether now existing or hereafter incurred
(collectively, the "OBLIGATIONS"):

         (a) Until the Satisfaction in Full of the Obligations, (i) the payment
by the Company, as and when due and payable (by scheduled maturity, required
prepayment, acceleration, demand or otherwise in accordance with the terms of
the Notes), of all amounts from time to time owing by it in respect of the
Purchase Agreements, the Notes and the other Transaction Documents, and (ii) in
the case of any Guarantors, the payment by such Grantors, as and when due and
payable of all "Guaranteed Obligations" under (and as defined in) the Guaranty,
including, without limitation, in both cases, (A) all principal of and interest


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on the Notes (including, without limitation, all interest that accrues after the
commencement of any Insolvency Proceeding of any Grantor, whether or not the
payment of such interest is unenforceable or is not allowable due to the
existence of such Insolvency Proceeding), and (B) all fees, commissions, expense
reimbursements, indemnifications and all other amounts due or to become due
under any of the Transaction Documents; and

         (b) Until the Satisfaction in Full of the Obligations, the due
performance and observance by each Grantor of all of its other obligations from
time to time existing in respect of any of the Transaction Documents, including
without limitation, with respect to any conversion or redemption rights of the
Buyers under the Notes.

         SECTION 4. REPRESENTATIONS AND WARRANTIES. Each Grantor represents and
warrants as of the date of this Agreement as follows:

         (a) Each Grantor (i) is a corporation, limited liability company or
limited partnership duly organized, validly existing and in good standing under
the laws of the state or jurisdiction of its organization, and (ii) has all
corporate, limited liability company or limited partnership power and authority
to execute, deliver and perform this Agreement.

         (b) The execution, delivery and performance by each Grantor of this
Agreement (i) have been duly authorized by all necessary corporate, limited
liability company or limited partnership action, (ii) do not and will not
contravene its charter or bylaws, its limited liability company or operating
agreement or its certificate of partnership or partnership agreement, as
applicable, or any applicable law or any contractual restriction binding on or
affecting it or any of its properties, and (iii) do not and will not result in
or require the creation of any Lien upon or with respect to any of its
properties other than pursuant to this Agreement or the other Transaction
Documents.

         (c) SCHEDULE I hereto sets forth (i) the exact legal name of each
Grantor, and (ii) the state of incorporation, organization or formation and the
organizational identification number of each Grantor in such state.

         (d) There is no pending or written notice threatening any action, suit,
proceeding or claim affecting any Guarantor before any Governmental Authority or
any arbitrator, or any order, judgment or award issued by any Governmental
Authority or arbitrator, in each case, that may adversely affect the grant by
any Grantor, or the perfection, of the security interest purported to be created
hereby in the Collateral, or the exercise by the Collateral Agent of any of its
rights or remedies hereunder.

         (e) All Federal, state and local tax returns and other reports required
by applicable law to be filed by any Grantor have been filed, or extensions have
been obtained, and all taxes, assessments and other governmental charges imposed
upon any Grantor or any property of any Grantor (including, without limitation,
all federal income and social security taxes on employees' wages) and which have
become due and payable on or prior to the date hereof have been paid, except to
the extent contested in good faith by proper proceedings which stay the
imposition of any penalty, fine or Lien resulting from the non-payment thereof
and with respect to which adequate reserves have been set aside for the payment
thereof in accordance with generally accepted accounting principles consistently
applied ("GAAP").

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         (f) All Equipment, Fixtures, Goods and Inventory of each Grantor now
existing are, and, unless otherwise permitted by this Agreement, all Equipment,
Fixtures, Goods and Inventory of each Grantor hereafter existing will be,
located and/or based at the addresses specified therefor in Schedule III hereto.
Each Grantor's chief place of business and chief executive office, the place
where each Grantor keeps its Records concerning Accounts and all originals of
all Chattel Paper are located at the addresses specified therefor in Schedule
III hereto. None of the Accounts is evidenced by Promissory Notes or other
Instruments. Set forth in Schedule IV hereto is a complete and accurate list, as
of the date of this Agreement, of (i) each Promissory Note, Security and other
Instrument owned by each Grantor and (ii) each Deposit Account, Securities
Account and Commodities Account of each Grantor, together with the name and
address of each institution at which each such account is maintained, the
account number for each such account and a description of the purpose of each
such account. Set forth in Schedule II hereto is a complete and correct list of
each trade name used by each Grantor.

         (g) Each Grantor has delivered to the Collateral Agent complete and
correct copies of each License described in Schedule II hereto, including all
schedules and exhibits thereto, which represents all of the Licenses existing on
the date of this Agreement. Each such License sets forth the entire agreement
and understanding of the parties thereto relating to the subject matter thereof,
and there are no other agreements, arrangements or understandings, written or
oral, relating to the matters covered thereby or the rights of such Grantor or
any of its affiliates in respect thereof. Each material License now existing is,
and any material License entered into in the future will be, the legal, valid
and binding obligation of the parties thereto, enforceable against such parties
in accordance with its terms. No default under any material License by any such
party has occurred, nor does any defense, offset, deduction or counterclaim
exist thereunder in favor of any such party.

         (h) Each Grantor owns and controls, or otherwise possesses adequate
rights to use, all Trademarks, Patents and Copyrights, which are the only
trademarks, patents, copyrights, inventions, trade secrets, proprietary
information and technology, know-how, formulae, rights of publicity necessary to
conduct its business in substantially the same manner as conducted as of the
date hereof. Schedule II hereto sets forth a true and complete list of all
registered copyrights, issued Patents, Trademarks, and Licenses owned or used by
each Grantor as of the date hereof. To the best knowledge of each Grantor, all
such Intellectual Property of each Grantor is subsisting and in full force and
effect, has not been adjudged invalid or unenforceable, is valid and enforceable
and has not been abandoned in whole or in part. Except as set forth in Schedule
II, no such Intellectual Property is the subject of any licensing or franchising
agreement. No Grantor has any knowledge of any conflict with the rights of
others to any such Intellectual Property and, to the best knowledge of each
Grantor, each Grantor is not now infringing or in conflict with any such rights
of others in any material respect, and to the best knowledge of each Grantor, no
other Person is now infringing or in conflict in any material respect with any
such properties, assets and rights owned or used by each Grantor. No Grantor has
received any notice that it is violating or has violated the trademarks,
patents, copyrights, inventions, trade secrets, proprietary information and
technology, know-how, formulae, rights of publicity or other intellectual
property rights of any third party.

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         (i) Each Grantor is the sole and exclusive owner of, or otherwise has
and will have adequate rights in, the Collateral free and clear of any Liens. No
effective financing statement or other instrument similar in effect covering all
or any part of the Collateral is on file in any recording or filing office
except such as (i) may have been filed in favor of the Collateral Agent and/or
the Buyers relating to this Agreement or the other Transaction Documents or (ii)
are described on SCHEDULE 4(i) hereto.

         (j) The exercise by the Collateral Agent of any of its rights and
remedies hereunder will not contravene any law or any contractual restriction
binding on or otherwise affecting each Grantor or any of its properties and will
not result in or require the creation of any Lien, upon or with respect to any
of its properties, other than Liens created by this Agreement or the other
Transaction Documents.

         (k) No authorization or approval or other action by, and no notice to
or filing with, any Governmental Authority, is required for (i) the grant by
each Grantor, or the perfection, of the security interest purported to be
created hereby in the Collateral, or (ii) the exercise by the Collateral Agent
of any of its rights and remedies hereunder, except for the filing under the
Uniform Commercial Code as in effect in the applicable jurisdiction of the
financing statements described in SCHEDULE V hereto (or a new SCHEDULE V
delivered by the Grantors to the Collateral Agent from time to time).

          (l) This Agreement creates in favor of the Collateral Agent a legal,
valid and enforceable security interest in the Collateral, as security for the
Obligations. The filings described in clause (k) above result in the perfection
of such security interests. Such security interests are, or in the case of
Collateral in which each Grantor obtains rights after the date hereof, will be,
perfected, first priority security interests, subject only to (A) the filing
under the Uniform Commercial Code described in clause (k) above, (B) with
respect to Deposit Accounts, and all cash and other property from time to time
deposited therein, for the execution of a control agreement with the depository
institution with which such account is maintained, as provided in SECTION 5(i),
(C) with respect to Commodity Contracts, for the execution of a control
agreement with the commodity intermediary with which such commodity contract is
carried, as provided in SECTION 5(i), (D) with respect to the perfection of the
security interest created hereby in the United States Intellectual Property and
Licenses, for the recording of the appropriate Assignment for Security,
substantially in the form of EXHIBIT A hereto in the United States Patent and
Trademark Office or the United States Copyright Office, as applicable, (E) with
respect to the perfection of the security interest created hereby in foreign
Intellectual Property and Licenses, for registrations and filings in
jurisdictions located outside of the United States and covering rights in such
jurisdictions relating to such foreign Intellectual Property and Licenses, (F)
with respect to the perfection of the security interest created hereby in Titled
Collateral, for the submission of an appropriate application requesting that the
Lien of the Collateral Agent be noted on the Certificate of Title or certificate
of ownership, completed and authenticated by the applicable Grantor, together
with the Certificate of Title or certificate of ownership, with respect to such
Titled Collateral, to the appropriate Governmental Authority, (G) with respect
to the perfection of the security interest created hereby in any


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Letter-of-Credit Rights, for the consent of the issuer of the applicable letter
of credit to the assignment of proceeds as provided in the Uniform Commercial
Code as in effect in the applicable jurisdiction, (H) with respect to any action
that may be necessary to obtain control of Collateral constituting Deposit
Accounts, Commodity Contracts, Electronic Chattel Paper, Investment Property or
Letter-of-Credit Rights, the taking of such actions, and (I) the Collateral
Agent having possession of all Documents, Chattel Paper, Instruments and cash
constituting Collateral (subclauses (A), (B), (C), (D), (E), (F), G), (H) and
(I), each a "PERFECTION REQUIREMENT" and collectively, the "PERFECTION
REQUIREMENTS"). Such recordings and filings and all other action necessary to
perfect and protect such security interest have been duly taken or will be taken
pursuant to Section 5(m), and, in the case of Collateral in which each Grantor
obtains rights after the date hereof, will be duly taken, except for the
Collateral Agent's having possession of all Documents, Chattel Paper,
Instruments and cash constituting Collateral after the date hereof and the other
actions, filings and recordations described above, including the Perfection
Requirements.

         (m) As of the date hereof, no Grantor holds any Commercial Tort Claims
or has knowledge of any pending Commercial Tort Claims, except for such
Commercial Tort Claims described in SCHEDULE VI.

         SECTION 5. COVENANTS AS TO THE COLLATERAL. Until the Satisfaction in
Full of the Obligations, unless the Collateral Agent shall otherwise consent in
writing:

         (a) FURTHER ASSURANCES. Each Grantor will at its expense, at any time
and from time to time, promptly execute and deliver all further instruments and
documents and take all further action that the Collateral Agent may reasonably
request in order to: (i) perfect and protect the security interest purported to
be created hereby; (ii) enable the Collateral Agent to exercise and enforce its
rights and remedies hereunder in respect of the Collateral; or (iii) otherwise
effect the purposes of this Agreement, including, without limitation: (A)
marking conspicuously all Chattel Paper and each License and, at the request of
the Collateral Agent, each of its Records pertaining to the Collateral with a
legend, in form and substance satisfactory to the Collateral Agent, indicating
that such Chattel Paper, License or Collateral is subject to the security
interest created hereby, (B) delivering and pledging to the Collateral Agent
each Promissory Note, Security, Chattel Paper or other Instrument, now or
hereafter owned by any Grantor, duly endorsed and accompanied by executed
instruments of transfer or assignment, all in form and substance reasonably
satisfactory to the Collateral Agent, (C) executing and filing (to the extent,
if any, that any Grantor's signature is required thereon) or authenticating the
filing of, such financing or continuation statements, or amendments thereto, as
may be necessary or that the Collateral Agent may reasonably request in order to
perfect and preserve the security interest purported to be created hereby, (D)
furnishing to the Collateral Agent from time t