SECURITY AGREEMENT

Security Agreement

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BTMU CAPITAL CORPORATION | NEXCEN ACQUISITION CORP | Note Co

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Title: SECURITY AGREEMENT
Governing Law: New York Date: 3/16/2007
Law Firm: Baker McKenzie

Execution Copy

NEXCEN ACQUISITION CORP.,

as Issuer,

THE SUBSIDIARY BORROWERS PARTIES HERETO,

collectively, as Co-Issuers

and

BTMU CAPITAL CORPORATION,

as Agent

SECURITY AGREEMENT

Dated as of March 12, 2007

ARTICLE I.	DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION	3

Section 1.1	Definitions	3

Section 1.2	Acts of Noteholders	3

Section 1.3	Notices, etc. to the Agent, the Issuer and the Co-Issuers	4

Section 1.4	Notices to Noteholders; Waiver	4

Section 1.5	Effect of Headings and Table of Contents	5

Section 1.6	Successors and Assigns	5

Section 1.7	Severability	5

Section 1.8	Benefits of Security Agreement	5

Section 1.9	Governing Law	5

Section 1.10	Counterparts	5

Section 1.11	Effective Date	5

ARTICLE II.	NOTE FORM	6

Section 2.1	Form Generally	6

Section 2.2	Form of Note	6

ARTICLE III.	THE NOTES	10

Section 3.1	Designation of Notes; Certain Related Provisions	10

Section 3.2	Denominations	10

Section 3.3	Execution, Authentication, Delivery and Dating	10

Section 3.4	Registration, Registration of Transfer and Exchange	11

Section 3.5	Limitation on Transfer and Exchange	11

Section 3.6	Mutilated, Destroyed, Lost or Stolen Notes	12

Section 3.7	Payment of Principal and Interest	13

Section 3.8	Persons Deemed Owners	13

Section 3.9	Cancellation	14

ARTICLE IV.	SECURITY AGREEMENT SUPPLEMENTS; DELIVERY OF THE NOTES	14

Section 4.1	Security Agreement Supplements	14

Section 4.2	Effect of Security Agreement Supplements	14

Section 4.3	Reference in Notes to Security Agreement Supplement	14

Section 4.4	Delivery Requirements	14

ARTICLE V.	SATISFACTION AND DISCHARGE	15

Section 5.1	Satisfaction and Discharge of Security Agreement	15

Section 5.2	Application of Trust Money	16

Section 5.3	Discharge of Security Interest	16

ARTICLE VI.	EVENTS OF DEFAULT AND REMEDIES	16

Section 6.1	Events of Default	16

Section 6.2	Acceleration of Maturity, Rescission and Annulment	19

Section 6.3	Remedies	20

Section 6.4	Agent May File Claim	21

Section 6.5	Agent May Enforce Claims Without Possession of Notes	22

Section 6.6	Allocation of Money Collected	22

Section 6.7	Limitation on Suits	23

Section 6.8	Unconditional Right of Noteholders to Receive Principal and Interest	24

Section 6.9	Restoration of Rights and Remedies	24

Section 6.10	Rights and Remedies Cumulative	24

Section 6.11	Delay or Omission Not Waiver	24

Section 6.12	Control by Noteholders	24

Section 6.13	Waiver of Past Defaults	25

Section 6.14	Undertaking for Costs	25

Section 6.15	Waiver of Stay or Extension Laws	25

Section 6.16	Sale of Collateral Upon Event of Default	26

Section 6.17	Action on Notes	26

ARTICLE VII.	THE AGENT	27

Section 7.1	Appointment; Nature of Relationship	27

Section 7.2	Powers	27

Section 7.3	Limited Liability	27

Section 7.4	No Responsibility for Advances, Creditworthiness, Collateral, Recitals, Etc	28

Section 7.5	Notice of Default, Cure or Waiver	28

Section 7.6	Action on Instructions of Noteholders	29

Section 7.7	Delegation of Duties	29

Section 7.8	Reliance on Documents; Counsel	29

Section 7.9	BTM Trust Company and Affiliates	30

Section 7.10	Successor Agent	30

Section 7.11	Maintenance of Office or Agency	31

ARTICLE VIII.	REIMBURSEMENT AND INDEMNIFICATION OF THE AGENT	31

Section 8.1	The Agent's Reimbursement and Indemnification	31

Section 8.2	Indemnification by Noteholders	31

ARTICLE IX.	CONSOLIDATION AND MERGER	31

ARTICLE X.	SECURITY AGREEMENT AMENDMENTS	32

Section 10.1	Security Agreement Amendments Only with Consent	32

ARTICLE XI.	REDEMPTION AND DISPOSITION	32

Section 11.1	Redemption at the Option of a Co-Issuer	33

Section 11.2	Mandatory Redemption	33

Section 11.3	Notice of Redemption by the Issuer	34

Section 11.4	Deposit of the Redemption Price	35

Section 11.5	Notes Payable on Redemption Date	35

Section 11.6	Voluntary Disposition of Collateral	35

ARTICLE XII.	REPRESENTATIONS, WARRANTIES AND COVENANTS	36

Section 12.1	Payment of Principal and Interest	36

Section 12.2	Continued Existence; Observance of Organizational Documents	36

Section 12.3	Protection of Collateral	36

Section 12.4	Negative Covenants	37

Section 12.5	Inspection and Audits	41

Section 12.6	Limited Purpose	41

Section 12.7	Co-Issuers Ownership	42

Section 12.8	Enforcement of Transaction Documents	42

Section 12.9	Representations and Warranties	42

Section 12.10	Certain Covenants	49

Section 12.11	Submission to Jurisdiction	53

Section 12.12	Representations with Respect to Assets	53

Section 12.13	Indemnity	56

Section 12.14	Yield Protection	57

Section 12.15	Funding Losses	59

Section 12.16	Taxes	59

iii

ARTICLE XIII.	ACCOUNTS, ACCOUNTINGS AND RELEASES	60

Section 13.1	Collection of Money	60

Section 13.2	Issuer Collection Account	60

Section 13.3	Release of Assets	61

Section 13.4	Release of Collateral	62

ARTICLE XIV.	APPLICATION OF MONIES	62

Section 14.1	Disbursements of Monies out of the Issuer Collection Account	62

Section 14.2	Eligible Investments	66

ARTICLE XV.	ASSIGNMENTS AND PARTICIPATIONS	66

Section 15.1	Assignments and Participations	6 6

APPENDIX A	Standard Definitions

SCHEDULE I	Insurance

SCHEDULE II	Bank Accounts

SCHEDULE III	Issuer’s Material Contracts

SCHEDULE IV	[OMITTED]

SCHEDULE V	Litigation

SCHEDULE VI	Issuer Subsidiaries

SCHEDULE VII	Issuer Liabilities

EXHIBIT A	Form of Assignment of Note

EXHIBIT B	Form of Investment Letter

EXHIBIT C	Substitute Form W-9

EXHIBIT D	Form of Security Agreement Supplement

This SECURITY AGREEMENT (as amended from time to time as permitted hereby, this “ Security Agreement ”) is dated as of March 1 2, 2007, is by and among NEXCEN ACQUISITION CORP., a Delaware corporation, (the “ Issuer ”), the Subsidiary Borrowers from time to time parties hereto (each, a “ Co-Issuer ” and collectively, the “ Co-Issuers ” and together with the Issuer, the “ Issuers ”), and BTMU CAPITAL CORPORATION, a Delaware corporation (the “ Agent ”).

PRELIMINARY STATEMENT

The Issuer has duly authorized the execution and delivery of this Security Agreement to provide for the issuance of a single class of notes to be issued by it and its wholly-owned Subsidiary Borrowers, from time to time pursuant to Security Agreement Supplements as hereinafter provided (the “ Notes ”). Each of the Issuers will be jointly and severally liable for payments required under the Note of each of the other Issuers and for all the Secured Obligations and each Note will be cross-collateralized with every other Note.

GRANTING CLAUSES

A. Each Co-Issuer, by executing and delivering to the Agent a Security Agreement Supplement will be deemed to have Granted to the Agent for the exclusive benefit of the Holders of the Notes, any counterparty under a Hedge Agreement approved by the Agent and each Indemnified Party a Lien upon and a security interest in all of each Co-Issuer’s right, title and interest, whether now owned or hereafter acquired (but none of the obligations), in and to the following (collectively, the “ Co-Issuers’ Collateral ”), subject, however, in each case, to Permitted Encumbrances:

(a) the Assets;

(b) all cash, securities, instruments and other property held from time to time in the Co-Issuer Collection Account, the Co-Issuer Lockbox Account, and the Co-Issuer Prepaid Royalty Account or otherwise transferred to the Agent hereunder;

(c) all rights under the Transaction Documents (other than this Security Agreement), in each case as the same may be modified, amended, supplemented or restated from time to time, including all rights to receive and collect monies thereunder, and to prosecute and enforce the terms thereof ;

(d) all books and records concerning the foregoing property (including all tapes, disks and related items containing any such information);

(e) all other property of the Co-Issuer, including all proceeds of insurance policies, Stock Rights and including all after acquired property of the Co-Issuer;

(f) any other items specified in the applicable Security Agreement Supplement; and

(g) all proceeds of the foregoing of any nature whatsoever, including proceeds from the conversion, voluntary or involuntary, of any thereof.

B. The Issuer, by executing and delivering to the Agent this Security Agreement, hereby grants to the Agent for the exclusive benefit of the Holders of the Notes, any counterparty under a Hedge Agreement approved by the Agent and each Indemnified Party a Lien upon and security interest in (i) all Stock Rights, including all equity interests in all subsidiaries of the Issuer, including the Support Fund, whether or not such subsidiary is a Subsidiary Borrower or Co-Issuer hereunder, and whether such equity interest is now owned or hereafter acquired (ii) all cash, securities, instruments and other property held from time to time in the Issuer Collection Account and all other property of the Issuer including all after acquired property of the Issuer, (iii) all rights under the Transaction Documents (other than this Security Agreement), in each case as the same may be modified, amended, supplemented or restated from time to time, including all rights to receive and collect monies thereunder, and to prosecute and enforce the terms thereof and (iv) all proceeds of the foregoing of any nature whatsoever, including proceeds from the conversion, voluntary or involuntary, of any thereof (the “ Issuer’s Collateral ” and together with the Co-Issuers’ Collateral, the “ Collateral ”).

Such Grants of the Collateral are only made, however, solely to secure (i) the Notes of all Co-Issuers, equally and ratably, except as otherwise may be provided in this Security Agreement, without prejudice, priority or distinction among the Notes by reason of differences in time of issuance and delivery or otherwise, (ii) the payment of all other Secured Obligations under this Security Agreement, and (iii) compliance with the provisions of this Security Agreement, all as provided in this Security Agreement. For the avoidance of doubt, all Collateral pledged under each Note shall be deemed to secure the obligations of the Issuer and all Co-Issuers under all of the Notes and all other Secured Obligations.

It is expressly agreed that anything herein contained to the contrary notwithstanding, neither the Issuer nor any Co-Issuer shall, other than as required by Applicable Law, be released from any of its obligations under any of its Collateral, and the Agent and the Holders shall have no obligation or liability under any Collateral by reason of or arising out of the pledge hereunder, nor shall the Agent and the Holders be required or obligated in any manner to perform or fulfill any obligations of the Issuer or any of the Co-Issuers under or pursuant to any of the Collateral or such other documents or to make any payment, subject, however, to any applicable Liens, or to make any inquiry as to the nature or sufficiency of any payment received by them, or present or file any claim, or take any action to collect or enforce the payment of any amounts which may have been assigned to them or to which they may be entitled at any time or times.

The Issuer and each Co-Issuer does hereby warrant and represent that it has not permitted and hereby covenants that it will not permit, the creation of any Lien other than the Lien of this Security Agreement with respect to any part of its Collateral, so long as this Security Agreement shall remain in effect, to anyone other than the Agent, and the representations and warranties of the Issuer and each Co-Issuer contained in this Security Agreement are true and correct.

The Agent acknowledges such Grant, accepts the role as Agent hereunder in accordance with the provisions of this Security Agreement and agrees to perform the duties herein required. So long as any Note remains Outstanding, the Agent shall act for the benefit of the Noteholders, any counterparty to a Hedge Agreement approved by the Agent and each Indemnified Party as their interests may appear to the extent provided herein.

The Agent agrees to maintain in its possession each item of Collateral constituting a contract or chattel paper under the UCC delivered to it by the Manager unless and until such item of Collateral is released from the lien hereof pursuant to Article V or Section 13.4 hereof.

All things necessary to make this Security Agreement a valid agreement of the Issuers in accordance with its terms have been done.

ARTICLE I.

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 1.1 Definitions

(a) Capitalized terms used in this Security Agreement shall have the respective meanings specified in the Standard Definitions set forth as Appendix A hereto, which is incorporated herein by reference. The definitions of such terms are equally applicable both to the singular and plural forms of such terms.

(b) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto.

(c) All references in this instrument to designated “Articles,” “Sections,” “Subsections” and other subdivisions are to the designated Articles, Sections, Subsections and other subdivisions of this instrument as originally executed or if amended or supplemented, as so amended and supplemented. The words “herein,” “hereof,” “hereunder” and other words of similar import refer to this Security Agreement as a whole and not to any particular Article, Section, Subsection or other subdivision. The words “including” and “include” shall be deemed to be followed by the words “without limitation”.

Section 1.2 Acts of Noteholders

(a) If, at any time, there is more than one Holder of the Notes, any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Security Agreement to be given or taken by the Noteholders shall, unless otherwise expressly provided herein, be taken by the Holders of 51% of the aggregate Note Principal Balance of the Notes Outstanding (the “ Majority Holders ”) and, whether to be taken by all or less than all of the Holders, may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Noteholders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Agent, and, where it is herein expressly required, to the Issuer. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “ Act ” of the Noteholders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Security Agreement and (subject to Article VII) conclusive in favor of the Agent, the Issuer and the Co-Issuers, if made in the manner provided in this Section 1.2.

(b) The fact and date of the execution by any Person of any such instrument or writing may be proved in any manner which the Agent reasonably deems sufficient.

(c) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Note shall bind the Holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Agent, the Issuer or the Co-Issuers in reliance thereon, whether or not notation of such action is made upon such Note.

Section 1.3 Notices, etc. to the Agent, the Issuer and the Co-Issu ers

(a) Except as otherwise provided, any request, demand, authorization, direction, notice, consent, waiver or Act of Noteholders or other document provided or permitted by this Security Agreement to be made upon, given or furnished to, or filed with

(1)

the Agent by any Noteholder, the Issuer or a Co-Issuer shall be sufficient for every purpose hereunder if in writing and mailed, registered mail return receipt requested or by overnight courier or hand delivery, or by email transmission to the Agent at its address at BTMU Capital Corporation, 111 Huntington Avenue, Suite 400, Boston, MA 02199-9000 ; or

(2)

the Issuer or a Co-Issuer by the Agent or any Noteholder shall be sufficient for every purpose hereunder if in writing and mailed, registered mail return receipt requested or by overnight courier or hand delivery or by email transmission, to the Issuer or a Co-Issuer addressed to it at the address set forth in the related Security Agreement Supplement or at any other address more recently furnished in writing to the Agent by the Issuer or such Co-Issuer.

(b) Without duplication, a party to this Security Agreement sending or delivering a notice of any kind hereunder shall also provide a copy of the notice in any manner authorized herein to each Noteholder upon receiving the address of such Noteholder from the Agent or the Noteholder.

Section 1.4 Notices to Noteholders; Waiver

Where this Security Agreement provides for notice to Noteholders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed by registered mail return receipt requested or by overnight courier, email transmission or hand delivery, to each Noteholder not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. Any notice which is mailed in the manner herein provided shall be deemed effective upon receipt or refusal.

Where this Security Agreement provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by the Noteholders shall be filed with the Agent, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

In case, by reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity, it shall be impractical to mail notice of any event to the Noteholders when such notice is required to be given pursuant to any provision of this Security Agreement, then any manner of giving such notice as shall be reasonably satisfactory to the Agent shall be deemed to be a sufficient giving of such notice.

Section 1.5 Effect of Headings and Table of Contents

The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

Section 1.6 Successors and Assigns

All covenants and agreements in this Security Agreement by the Issuer and a Co-Issuer shall bind its respective successors and assigns, whether so expressed or not.

Section 1.7 Severability

In case any provision in this Security Agreement or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 1.8 Benefits of Security Agreement

Nothing in this Security Agreement or in the Notes, expressed or implied, shall give to any Person, other than the parties hereto, each Hedge Counterparty approved by the Agent and each Indemnified Party and any of their successors hereunder and the Noteholders, any benefit or any legal or equitable right, remedy or claim under this Security Agreement.

Section 1.9 Governing Law

This Security Agreement and each Note shall be construed in accordance with and governed by the laws of the State of New York applicable to agreements made and to be performed therein without giving effect to principles of conflicts of law other than Sections 5-1401 and 5-1402 of the General Obligations Law of the State of New York.

Section 1.10 Counterparts

This Security Agreement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

Section 1.11 Effective Date

This Security Agreement shall not be effective until the Closing Date.

ARTICLE II.

NOTE FORM

Section 2.1 Form Generally

The Notes shall be in substantially the form set forth in Section 2.2 with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Security Agreement, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon, as may be required to comply with the rules of any securities exchange on which the Notes may be listed, or as may, consistently herewith, be determined by the officers executing such Notes, as evidenced by their execution of the Notes. Any portion of the text of any Note may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Note.

Section 2.2 Form of Note

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES LAWS AND THE ISSUERS HAVE NOT BEEN REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”), AND THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE OR OTHERWISE TRANSFERRED WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS EXCEPT IN A TRANSACTION THAT IS EXEMPTED UNDER THE SECURITIES ACT (INCLUDING A TRANSFER MADE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”)) AND APPLICABLE STATE SECURITIES LAWS.

EACH HOLDER OF THIS NOTE MUST BE, AND BY VIRTUE OF HOLDING THIS NOTE SHALL BE DEEMED TO HAVE REPRESENTED THAT IT IS, AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) AND (7) UNDER THE SECURITIES ACT AND THAT IT WAS NOT FORMED TO PURCHASE THESE NOTES.

THE PRINCIPAL OF THIS NOTE IS PAYABLE ON THE PAYMENT DATES AND IN THE AMOUNTS DESCRIBED HEREIN AND IN THE SECURITY AGREEMENT. ACCORDINGLY, THE OUTSTANDING NOTE BALANCE OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF AND MAY BE ASCERTAINED ONLY BY OBTAINING A CONFIRMATION THEREOF FROM THE AGENT NAMED HEREIN.

The Notes may not be acquired or transferred to an employee benefit plan subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), a plan described in Section 4975(e)(1) of the Code, or any entity deemed to hold plan assets of a benefit plan or plan unless the acquiror or the transferee represents that its acquisition and holding of the Notes will at all times be exempt from the prohibited transaction provisions of ERISA and Section 4975 of the Code under PTE 84-14, PTE 90-1, PTE 91-38, PTE 95-60 or PTE 96-23 or a similar exemption.

The Agent shall not permit a transfer of a Note if such transfer would result in the Issuer having more than nine (9) registered Noteholders excluding the initial Noteholder.

NEXCEN ACQUISITION NOTES

ISSUE DATE: ________, 2007

MATURITY DATE: ______________

NEXCEN ACQUISITION CORP., a corporation duly incorporated and existing under the laws of the State of Delaware (the “Issuer”), [SUBSIDIARY BORROWER], a [ ] duly organized and existing under the laws of the State of [ ] and [SUBSIDIARY BORROWER], a [ ] duly organized and existing under the laws of the State of [ ] (together, the “Note Co-Issuers”, and together with the Issuer the “Note Issuers”) , for value received, hereby jointly and severally promise to pay to [PAYEE], or registered assigns (the “Payee”), the principal sum of [ Dollars ($ )] payable on each Payment Date in distributions of principal and interest as set forth in the Security Agreement, but in no event less than the amounts set forth in the amortization schedule attached hereto on each Payment Date (as such schedule may be amended and restated with the prior written approval of the Agent, including in the event of a partial redemption hereof under the terms of the Security Agreement); provided , however , that the Note Issuers shall be required to make principal payments in accordance with the provisions of Section 14.1(d) of the Security Agreement (defined below) upon the occurrence of a Deal Rapid Amortization Event and redemption payments in accordance with Article XI of the Security Agreement. This Note shall bear interest on the outstanding unpaid principal balance at a rate equal to the Note Interest Rate; provided , however , that interest on any amount of principal or interest that is not timely paid when due shall accrue interest until paid at a rate per annum equal to the Base Rate plus 4.50% per annum, to the extent allowed by law (the “Default Rate”); and, provided , further , that if an Event of Default shall have occurred under, and as defined in, the Security Agreement, interest shall accrue from that time forward at the Default Rate, to the extent allowed by law, until such Event of Default is waived. All unpaid principal of and accrued interest on this Note shall be due and payable on [DATE] (the “Maturity Date”);. All terms used in this Note which are defined in the Security Agreement shall have the meanings assigned to them in the Security Agreement. Certain provisions of the Security Agreement are described in this Note.

The principal of and interest on this Note are payable solely by wire transfer to the Holder of this Note in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

This Note is one of a duly authorized issue of Notes designated as the NexCen Acquisition Notes (the “Notes”) issued under an Security Agreement, dated as of March 12, 2007 (herein, called the “Security Agreement”), by and between the Note Issuers, certain Subsidiary Borrowers parties thereto, and BTMU Capital Corporation, in its capacity as agent and secured party (the “Agent”), to which Security Agreement reference is hereby made for a statement of the respective rights thereunder of the Note Issuers, the Agent and the Holders of the Notes, and the terms upon which the Notes are, and are to be, delivered.

As provided in the Security Agreement, this Note is equally and ratably secured by and payable solely from the Collateral pledged therefor by the Issuers (as defined in the Security Agreement) to the extent provided in the Security Agreement. Further, the Collateral pledged by the Note Issuers in connection with this Note equally and ratably secures all of the Notes issued under the Security Agreement. The Issuers are jointly and severally liable for the payments on all of the Notes.

As provided in the Security Agreement and subject to certain limitations therein set forth, the transfer of this Note may be registered on the note register of the Note Issuers, upon surrender of this Note for registration of transfer at the office or agency of the Agent in the United States of America, duly endorsed by, or accompanied by a written instrument of transfer in form and content satisfactory to the Note Issuers and the Agent duly executed by, the Holder hereof or its attorney duly authorized in writing, and thereupon one or more new Notes, of authorized denominations and for the same aggregate Note Principal Balance, shall be issued to the designated transferee or transferees.

Prior to due presentment for registration of transfer of this Note, the Note Issuers, the Agent and any agent of the Note Issuers or the Agent may treat the Person in whose name this Note is registered as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes whether or not this Note be overdue, and neither the Note Issuers, the Agent, nor any such agent shall be affected by notice to the contrary.

The Security Agreement permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Note Issuers and the rights of the Holders of this Note under the Security Agreement at any time by the Note Issuers subject to procedures and approvals set forth in the Security Agreement. The Security Agreement also contains provisions permitting the Noteholders to waive compliance by the Note Issuers with certain provisions of the Security Agreement and certain past defaults and their consequences under the Security Agreement. Any such consent or waiver shall be conclusive and binding upon the Noteholder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Note.

The Notes are issuable only in registered form without coupons in such authorized denominations as provided in Section 3.2 of the Security Agreement and subject to certain limitations therein set forth. The Notes are exchangeable for one or more Notes of a like aggregate Note Principal Balance, as requested by the Holder surrendering the same.

This Note and the Security Agreement shall be governed by and construed in accordance with the laws of the State of New York without giving effect to principles of conflicts of law other than Section 5-1401 and 5-1402 of the General Obligations Law of the State of New York.

No reference herein to the Security Agreement and no provision of this Note or of the Security Agreement shall alter or impair the obligations of the Issuer and the Note Co-Issuers, which are absolute and unconditional, to pay the principal of and interest on this Note in accordance with the Security Agreement at the times, place and rate, and in the coin or currency, herein prescribed.

IN WITNESS WHEREOF, the Issuer and the Note Co-Issuers have caused this instrument to be signed, manually or in facsimile, by Authorized Signatories.


	NEXCEN ACQUISITION CORPORATION, as Issuer

	By:	[ · ]

	By:
		Name:
		Title:


	[NOTE CO-ISSUER]

	By:	[ · ]

	By:
		Name:
		Title:


	[NOTE CO-ISSUER]

	By:	[ · ]

	By:
		Name:
		Title: ]

ARTICLE III.

THE NOTES

Section 3.1 Designation of Notes; Certain Related Provisions

The Notes shall be designated generally as the “NexCen Acquisition Notes” of the Issuer and the related Note Co-Issuers.

The Notes and all accrued interest thereon shall be due and payable on the applicable Maturity Date to the extent not paid before such date.

All calculations of interest on the Notes are to be calculated by the Agent as set forth in the definition of the Note Interest Rate.

The aggregate Outstanding Note Balance of all the Notes that may be delivered hereunder and outstanding at any time is limited to $150,000,000.

Section 3.2 Denominations

The Notes are available in a minimum denomination of $1,000,000 and integral multiples of $1,000 in excess thereof.

Section 3.3 Execution, Authentication, Delivery and Dating

The Notes shall be executed on behalf of the Issuer and the related Note Co-Issuers by their respective Authorized Signatories which may be in facsimile form or otherwise reproduced thereon. The signature of any of these officers on the Notes may be manual or facsimile. The Notes may be printed, lithographed, typewritten, mimeographed or otherwise produced. The Notes need not be sealed.

Any Note bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Issuer or the related Note Co-Issuers shall bind the Issuer or such Note Co-Issuers, as the case may be, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the delivery of such Notes or did not hold such offices at the date of delivery of such Notes.

At any time and from time to time after the execution and delivery of this Security Agreement, the Issuer and the related Note Co-Issuers may deliver Notes executed by the Issuer and the related Note Co-Issuers having an aggregate Outstanding Note Balance not in excess of the amount stated in Section 3.1, and not otherwise.

Each Note shall bear on its face its Issue Date and its Maturity Date and be dated as of its Issue Date.

Section 3.4 Registration, Registration of Transfer and Exchange

Upon surrender for registration of transfer of any Note at the office or agency of the Agent to be maintained as provided in Section 7.11, the Issuer and the related Note Co-Issuers shall execute, and the Agent shall deliver, in the name of the designated transferee or transferees, one or more new Notes of any authorized denominations and of a like aggregate Note Principal Balance.

At the option of the Holder, Notes may be exchanged for other Notes of any authorized denominations and of a like aggregate Note Principal Balance, upon surrender of the Notes to be exchanged at such office or agency. Whenever any Notes are so surrendered for exchange, the Issuer and the related Note Co-Issuers shall execute and the Agent shall deliver the Notes which the Noteholder making the exchange is entitled to receive.

Each Note issued upon any registration of transfer or exchange of a Note shall be the valid obligations of the Issuer and the related Note Co-Issuers, evidencing the same debt, entitled to the same benefits and subject to all the terms and conditions of this Security Agreement, as the Note surrendered upon such registration of such transfer or exchange.

Every Note presented or surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in form and content satisfactory to the Issuer and the related Note Co-Issuers and the Agent duly executed, by the Holder thereof or his attorney duly authorized in writing. The form of assignment set forth at Exhibit A hereof shall be deemed to be satisfactory for purposes of the preceding sentence. Concurrently with any transfer, the transferring Holder shall provide the Issuer and the related Note Co-Issuers the mailing address of such transferee for service of any notices to be delivered pursuant to this Security Agreement and the payment of amounts due to such transferee.

No service charge shall be made to a Holder for any registration of transfer or exchange of Notes, but the Issuer and the related Note Co-Issuers may require payment of a sum sufficient to cover any expense, tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Notes, other than exchanges not involving any registration of transfer.

Prior to any sale or other disposition of any Note, the Holder transferring such Note will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Issuer and the related Note Co-Issuers in exchange for a new Note or Notes pursuant to this Section.

Section 3.5 Limitation on Transfer and Exchange

The Notes have not been registered or qualified under the Securities Act or the securities laws of any state. No transfer of any Note shall be made unless such transfer is made pursuant to an effective registration statement under the Securities Act and registration or qualification under applicable state securities laws or is exempt from such registration or qualification. In the event that a transfer is to be made in reliance upon an exemption from the Securities Act and applicable state securities laws, the Issuer and each Co-Issuer shall require, in order to assure compliance with the Securities Act, that the prospective transferee certify to the Issuer and the related Note Co-Issuers and the Agent in writing the facts surrounding the transfer in the form of the investment letter described in Exhibit B hereto or such other form as the Issuer and the related Note Co-Issuers may agree to accept, in its sole discretion (each such letter, an “ Investment Letter ”); provided that a transfer to any Program Support Provider may be made free of the requirement for such certification or consent by the related Note Co-Issuers. Neither the Issuer nor the related Note Co-Issuers nor the Agent is obligated to register or qualify any of the Notes (or any offering or sale thereof) under the Securities Act or any other securities law.

While not conceding that the Issuer or any Co-Issuer is an investment company within the meaning of the Investment Company Act, in no event shall the transfer of a Note be permitted if the transfer would cause the loss of the Issuer or of any Co-Issuer of a necessary exemption under the Investment Company Act of 1940, as amended.

The Notes may not be acquired or transferred to an employee benefit plan subject to the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”), a plan described in Section 4975(e)(1) of the Code, or any entity deemed to hold plan assets of a benefit plan or plan unless the acquiror or the transferee represents that the plan is not a participant-directed defined contribution plan and its acquisition and holding of the Notes will at all times be exempt from the prohibited transaction provisions of ERISA and Section 4975 of the Code under PTE 84-14, PTE 90-1, PTE 91-38, PTE 95-60 or PTE 96-23 or a similar exemption.

The Agent shall not permit a transfer of a Note if such transfer would result in the Issuers having more than nine (9) registered Noteholders excluding the initial Noteholder.

The Issuer, the Co-Issuers and the Agent shall have no liability to the Noteholders or otherwise arising from a transfer of any Note in reliance upon the Investment Letter delivered in connection therewith.

Section 3.6 Mutilated, Destroyed, Lost or Stolen Notes

If (i) any mutilated Note is surrendered to the Issuer and related Note Co-Issuers, or the Issuer and the related Note Co-Issuers receive evidence to their satisfaction of the destruction, loss or theft of any Note, and (ii) there is delivered to the Issuer and the related Note Co-Issuers such security or indemnity as may be required by the Issuer and the related Note Co-Issuers to indemnify and hold the Issuer and the related Note Co-Issuers harmless (which in the case of any Holder that is, or is a subsidiary of, a bank or other institutional buyer with a net worth of at least $50,000,000, and whose claims paying ability or long-term debt is rated at least investment grade or better by a Rating Agency, need only be such bank’s or institutional buyer’s unsecured written promise of indemnity), then, in the absence of notice to the Issuer and the related Note Co-Issuers that such Note has been acquired by a bona fide purchaser, the Issuer and the related Note Co-Issuers shall execute and upon its request the Agent shall deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a new Note of the same tenor and Note Principal Balance, bearing a number not contemporaneously outstanding; provided , however , that if any such mutilated, destroyed, lost or stolen Note shall have become or shall be about to become due and payable to Issuer and the related Note Co-Issuers in their discretion may, instead of issuing a new Note, pay such Note.

Upon the issuance of any new Note under this Section, the Issuer and the related Note Co-Issuers may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto, but no service charge may be imposed in connection therewith.

Every new Note issued pursuant to this Section in lieu of any destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Issuer and the related Note Co-Issuers, whether or not the destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Security Agreement equally and proportionately with any and all other Notes duly issued hereunder.

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.

Section 3.7 Payment of Principal and Interest

The principal of and interest on the Notes are payable by wire transfer in immediately available funds to the account specified in directions delivered at least five (5) Business Days prior to such Payment Date by a Holder to the Holder of such Note. Such payment shall be in such coin or currency of the United States of America as at the time of tender is legal tender for the payment of public and private debts. Payments pursuant to Section 14.1 shall be made to each Noteholder on a pro rata basis. Upon the final payment in full of any Note, the Holder shall promptly surrender such Note to the Issuer and the related Note Co-Issuers.

To prevent backup withholding on payments made with respect to the Notes, each Noteholder is required to provide the related Note Co-Issuers with (i) the Noteholder’s correct TIN by completing the form at Exhibit C (Substitute Form W-9), certifying that the TIN provided on the Substitute Form W-9 is correct (or that such Noteholder is awaiting a TIN) and that (A) such Noteholder is exempt from backup withholding, (B) the Noteholder has not been notified by the IRS that the Noteholder is subject to backup withholding as a result of failure to report all interest or dividends or (C) the IRS has notified the Noteholder that the Noteholder is no longer subject to backup withholding, or (ii) if applicable, an adequate basis for exemption. A Foreign Person may qualify as an exempt recipient by submitting to the Issuer and the related Note Co-Issuers a properly completed IRS Form W-8BEN or W-8ECI, as applicable, signed under penalties of perjury, attesting to that Noteholder’s exempt status.

Section 3.8 Persons Deemed Owners

Prior to due presentment for registration of transfer of any Note, the Issuer and the related Note Co-Issuers, the Agent and any agent of the Issuer, the related Note Co-Issuers or the Agent may treat the Person in whose name any Note is registered as the owner of such Note for the purpose of receiving payments of principal of and interest on such Note (subject to Section 3.7) and for all other purposes whatsoever, whether or not such Note be overdue, and none of the Issuer, the related Note Co-Issuers, the Agent nor any agent of the Issuer, the related Note Co-Issuers or the Agent shall be affected by notice to the contrary.

Section 3.9 Cancellation

All Notes surrendered to the Issuer and the related Note Co-Issuers following payment or for registration of transfer or exchange (including Notes surrendered to any Person other than the Issuer and the related Note Co-Issuers which shall be delivered to the Issuer and the related Note Co-Issuers) shall be promptly canceled and destroyed by the Issuer and the related Note Co-Issuers in accordance with their customary procedures.

ARTICLE IV.

SECURITY AGREEMENT SUPPLEMENTS; DELIVERY OF THE NOTES

Section 4.1 Security Agreement Supplements

Any Subsidiary Borrower, if not already a party hereto, may from time to time, with the consent of the Issuer and the Agent, become a party to this Agreement as a Co-Issuer party, jointly and severally liable for all of the Notes issued under this Security Agreement, by entering into an agreement substantially in the form attached as Exhibit D hereto (a “ Security Agreement Supplement ”), with the Issuer, such Subsidiary Borrower and the Agent.

Section 4.2 Effect of Security Agreement Supplements

Upon the execution of any Security Agreement Supplement under this Article, this Security Agreement shall be modified in accordance therewith, and such Security Agreement Supplement shall form a part of this Security Agreement for all purposes; and every Co-Issuer and Holder of Notes theretofore or thereafter delivered hereunder shall be bound thereby.

Section 4.3 Reference in Notes to Security Agreement Supplement

Notes issued and delivered after the execution of any Security Agreement Supplement pursuant to this Article may, and if required by the Issuer shall, bear a notation in form approved by the Agent as to any matter provided for in such Security Agreement Supplement. If the Issuer shall so determine, new Notes so modified as to conform, in the opinion of the Issuer, to any such Security Agreement Supplement may be prepared and executed by the Issuer and the related Note Co-Issuers and delivered to the Agent in exchange for Outstanding Notes.

Section 4.4 Delivery Requirements . The Notes shall be executed by the Issuer and the related Note Co-Issuers and delivered to the Agent with delivery to the Agent of the following:

(a) a certificate, certified by the Issuer and the related Note Co-Issuers, authorizing the execution and delivery of the Security Agreement Supplement and the related Note;

(b) either (i) a certificate or other official document evidencing the due authorization, approval or consent of any government body or bodies, at the time having jurisdiction in the premises, and that the authorization, approval or consent of no other governmental body is required for valid issuance of the related Note, or (ii) an Opinion of Counsel that no such authorization, approval or consent of any governmental body is required;

(c) an Officer’s Certificate from the related Note Co-Issuers stating that each related Note Co-Issuer is not, as of the Issue Date, in Default under this Security Agreement and that the issuance of its Note will not result in any breach of any of the terms, conditions or provisions of, or constitute a default under, either the related Note Co-Issuers' organizational documents or any security agreement, mortgage, deed of trust or other agreement or instrument to which either of the related Note Co-Issuer is a party or by which it is bound, or any order of any court or administrative agency entered in any proceeding to which either of the related Note Co-Issuer is a party or by which it may be bound or to which it may be subject; and that all conditions precedent provided in this Security Agreement and the Note Funding Agreement relating to the delivery of its Note have been complied with;

(d) an Officer’s Certificate from the Issuer stating that the Issuer is not, as of the Issue Date, in Default under this Security Agreement and that the issuance of the applicable Note will not result in any breach of any of the terms, conditions or provisions of, or constitute a default under, either the Issuer’s organization documents or any security agreement, mortgage, deed of trust or other agreement or instrument to which the Issuer is a party or by which it is bound, or any order of any court or administrative agency entered in any proceeding to which the Issuer is a party or by which it may be bound or to which it may be subject; and that all conditions precedent provided in this Security Agreement and the Note Funding Agreement relating to the delivery of the applicable Note have been complied with;

(e) duly executed copies of all Transaction Documents; and

(f) such other documents as the Agent may reasonably require.

ARTICLE V.

SATISFACTION AND DISCHARGE

Section 5.1 Satisfaction and Discharge of Security Agreement

(a) This Security Agreement shall cease to be of further effect (except as to any rights expressly stated hereunder to survive), if the last Note or Notes Outstanding under this Security Agreement have become due and payable and the Issuer and the related Note Co-Issuers have irrevocably deposited or caused to be deposited in the Issuer Collection Account an amount sufficient to pay and discharge the entire indebtedness on such Note or Notes together with all accrued interest thereon and such amounts have been distributed to the Lender in redemption of such Note or Notes in full cash;

(b) the Issuer and the related Note Co-Issuers have paid or caused to be paid to the Indemnified Parties and each counterparty to a Hedge Agreement (with Agent's approval) and each Holder of a Note all other Secured Obligations in full in cash; and

(c) Issuer and the related Note Co-Issuers have delivered to the Agent an Officer’s Certificate stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Security Agreement with respect to all remaining Collateral have been complied with.

Section 5.2 Application of Trust Money

All monies deposited into the Issuer Collection Account pursuant to Section 13.1 shall be applied in accordance with the provisions of the Notes and this Security Agreement, to the payment to the Persons entitled thereto, of the principal and interest for whose payment such money has been deposited into the Issuer Collection Account and such money shall be segregated from all other funds as required herein or required by law.

Section 5.3 Discharge of Security Interest

Upon satisfaction and discharge of the indebtedness secured hereby as specified in Section 5.1(a), the Agent shall execute a release of the Collateral provided by, and at the expense of the Issuer, and the related Note Co-Issuers. Further, on demand of and at the expense of the Issuer and the related Note Co-Issuers and upon being supplied with instruments appropriate for the purpose, the Agent shall execute and the related Note Co-Issuers shall file all documents (including UCC Form 3) necessary to discharge all liens, mortgages, chattel mortgages and other security interests filed with any governmental board or body with respect to the Collateral, and the Agent shall otherwise cooperate, at the expense of the Issuer and the related Note Co-Issuers, in any way reasonably necessary to restore full unencumbered title in the Collateral to the Issuer and the related Note Co-Issuers or their designees, as applicable.

ARTICLE VI.

EVENTS OF DEFAULT AND REMEDIES

Section 6.1 Events of Default

“ Event of Default ” wherever used herein means any one of the following events (whatever the reason for such Event of Default and without regard to whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(1)

default in (a) the payment of any interest or principal on the Notes as and when due pursuant to the terms and provisions of the Notes and this Security Agreement or (b) the payment on the Maturity Date of the then unpaid principal balance of any Note and continuance of either default for a period of 2 Business Days;

(2)

any Note remains Outstanding following the Payment Date on which the Issuers' aggregate DSCR falls below 1.10:1.00;

(3)

default in the payment of any other amounts due and owing under the Transaction Documents and continuance of such default for a period of 2 Business Days;

(4)

failure on the part of the Issuer or any Co-Issuer to remit any cash receipt or deposit required hereunder to the Issuer Collection Account and continuance of such failure for a period of 2 Business Days;

(5)

failure on the part of the Issuer or any Co-Issuer to (i) cause the Manager to submit the Manager Report when due and such failure continues unremedied for two (2) Business Days after such due date or (ii) submit any other report required under the Transaction Documents and continuance of such default or breach under this clause (ii) for a period of fifteen (15) days after the earlier of the date on which the Issuer, any Co-Issuer or the Manager has actual knowledge of such default or breach or the date on which written notice, specifying in reasonable detail, such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder shall have been given to the Issuer and such Co-Issuer; provided that the Issuer or such Co-Issuer, as applicable, shall have an additional 45 days under this clause (ii) so long as the Issuer or such Co-Issuer, as applicable, is diligently pursuing a cure;

(6)

default in the performance by, or breach of any covenant of, the Issuer or any Co-Issuer in any Transaction Document to which it is a party (not referenced in clause (1), (2), (3), (4) or (5) above) and continuance of such default or breach for a period of fifteen (15) days after the earlier of the date on which the Issuer, any Co-Issuer or the Manager has actual knowledge of such default or breach or the date on which written notice, specifying in reasonable detail, such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder shall have been given to the Issuer and such Co-Issuer; provided that the Issuer or such Co-Issuer, as applicable, shall have an additional 45 days if such default is susceptible of being cured and so long as the Issuer or any Co-Issuer, as applicable, is diligently pursuing a cure;

(7)

a failure of any representation or warranty of the Issuer or any Co-Issuer in this Security Agreement to be true and correct as and when made, for a period of fifteen (15) days after the earlier of the date on which the Issuer, any Co-Issuer or the Manager has actual knowledge of such default or breach or the date on which written notice, specifying in reasonable detail, such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder shall have been given to the Issuer and such Co-Issuer; provided that the Issuer or such Co-Issuer, as applicable, shall have an additional 45 days if such default is susceptible of being cured and so long as the Issuer or such Co-Issuer, as applicable, are diligently pursuing a cure; provided , however , any such failure of a representation or warranty as to an Asset that is set forth in Section 12.12 hereof shall not result in an Event of Default unless the cure or payment of the Release Price for such Asset by the related Co-Issuers is required in accordance with Section 13.3 of this Security Agreement and is not achieved or paid as and when required;

(8)

the entry of a decree or order for relief by a court having jurisdiction in respect of the Issuer or any Co-Issuer or NexCen Brands in an involuntary case under the federal bankruptcy laws, as now or hereafter in effect, or any other present or future federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or any Co-Issuer or NexCen Brands or of any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer or any Co-Issuer or NexCen Brands and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days;

(9)

the commencement by the Issuer or any Co-Issuer or NexCen Brands of a voluntary case under the federal bankruptcy laws, as now or hereafter in effect, or any other present or future federal or state bankruptcy, insolvency or similar law, or the consent by the Issuer or any Co-Issuer or NexCen Brands to the appointment of or taking possession by a receiver, liquidator, assignee, secured party, custodian, sequestrator or other similar official of the Issuer or any Co-Issuer or NexCen Brands or any substantial part of its property or the making by the Issuer or any Co-Issuer or NexCen Brands of an assignment for the benefit of creditors or the failure by the Issuer or any Co-Issuer or NexCen Brands generally to pay its debts as such debts become due or the taking of partnership action by the Issuer in furtherance of any of the foregoing;

(10)

failure of the Issuer or any Co-Issuer to have clear, unrestricted title to any material items of its property included in the Collateral subject to Permitted Encumbrances and continuance of such failure for a period of fifteen (15) days after the earlier of the date on which the Issuer, any Co-Issuer or the Manager has actual knowledge of such failure or the date on which written notice, specifying in reasonable detail, such failure and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder shall have been given to the Issuer and such Co-Issuer; provided that the Issuer or such Co-Issuer, as applicable, shall have an additional 45 days so long as the Issuer or such Co-Issuer, as applicable, is diligently pursuing a cure (for the avoidance of doubt, a payment of the Release Price with respect to such items of its property in compliance with the provisions of Section 13.3(b) and Section 11.2(a) within such 45-day period shall constitute a cure of this Default);

(11)

any final judgment against the Issuer or any Co-Issuer that shall remain in force, undischarged, unsatisfied and unstayed, for more than 60 consecutive days, and that, with other outstanding final judgments, undischarged, against the Issuer or any Co-Issuer exceed in the aggregate $250,000;

(12)

the Issuer or any Co-Issuer shall cease to carry on, or be enjoined, restrained or in any way prevented by the order of any Governmental Authority from conducting, any material part of the business of the Issuer or such Co-Issuer and such order shall continue in effect for more than 90 days;

(13)

any Co-Issuer or Support Fund shall cease to be a wholly-owned subsidiary of the Issuer or another Co-Issuer or the Issuer shall cease to be a wholly-owned subsidiary of NexCen Brands;

(14)

failure of the Agent to have a first priority perfected security interest in any item of Collateral in the First Stage Covered Jurisdictions and continuance of such failure for a period of fifteen (15) days after the earlier of the date on which the Issuer, any Co-Issuer or the Manager has actual knowledge of such failure or the date on which written notice, specifying in reasonable detail, such failure and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder shall have been given to the Issuer and such Co-Issuer; provided that the Issuer or such Co-Issuer, as applicable, shall have an additional 45 days so long as the Issuer or such Co-Issuer, as applicable, is diligently pursuing a cure (for the avoidance of doubt, either (i) a payment of the Release Price with respect to such item of Collateral in compliance with the provisions of Section 13.3(b) and Section 11.2(a) , or (ii) the perfection of the security interest created hereby senior to all other Liens except Permitted Encumbrances in other jurisdictions, or (iii) any combination of the actions described in clause (i) and clause (ii) above within the 45-day period shall constitute a cure of this Default);

(15)

a Manager Termination Event shall have occurred and is continuing and the related Co-Issuer shall not have replaced the applicable Manager with a successor manager, approved by the Agent in writing, within 30 Business Days;

(16)

failure of NexCen Brands to operate as its primary business of owning and operating IP Businesses; or

(17)

the Issuer or any Co-Issuer shall be required to register as an investment company within the meaning of the Investment Company Act of 1940, as amended.

For the avoidance of doubt, a Default or Event of Default under any Note shall constitute a Default or Event of Default under all of the Notes.

Section 6.2 Acceleration of Maturity, Rescission and Annulment

If an Event of Default of the kind specified in clauses (8) or (9) of Section 6.1 occurs, the unpaid principal amount of all of the Notes shall automatically become immediately due and payable without notice, presentment or demand of any kind. If an Event of Default (other than an Event of Default of the kind specified in clauses (8) and (9) of Section 6.1) occurs and is continuing, then, and in every such case the Agent or Majority Holders pursuant to an Act may declare the principal of all of the Notes to be immediately due and payable, by a notice in writing to the Issuer and upon any such declaration (in accordance with this sentence or the preceding sentence), the Notes shall become immediately due and payable together with accrued and unpaid interest.

At any time after such a declaration of acceleration has been made, but before any Sale of the Collateral has been made or a judgment or decree for payment of the money due has been obtained by the Agent as hereinafter in this Article provided, the Majority Holders by an Act and evidenced by a written notice delivered to the Issuer and the Agent, may rescind and annul such declaration and its consequence if:

(i)

an amount has been paid or deposited with the Agent sufficient to pay:

(1)

all overdue installments of interest on all Notes, including interest at the Default Rate (to the extent permitted by Applicable Law);

(2)

to the extent that payment of such interest is lawful, interest upon overdue installments of interest on the Notes at the rate specified therefor in the Notes;

(3)

in connection with the preservation of the Collateral and enforcement of its rights all sums paid or advanced by the Noteholders hereunder and the reasonable compensation, expenses, disbursements and advances of the Agent, its agents and counsel; and

(ii)

all Events of Default, other than the nonpayment of the principal of the Notes which have become due solely by such acceleration, have been waived as provided in Section 6.13.

No such rescission shall affect any subsequent default or impair any right consequent thereon.

Section 6.3 Remedies

If an Event of Default shall have occurred and be continuing the Agent may, and by an Act of the Majority Holders and subject to Article VII herein pursuant to specific instruction shall, do one or more of the following:

(a) declare all Notes immediately due and payable pursuant to Section 6.2;

(b) institute Proceedings for the collection of all amounts then payable on the Notes or under this Security Agreement, whether by declaration or otherwise, enforce any judgment obtained, and collect from the Collateral securing the Notes (including any amounts in each Co-Issuer Prepaid Royalty Account) the monies due;

(c) sell the Collateral or any portion thereof or rights or interest therein, at one or more Sales called and conducted in any manner permitted by law; and

(d) exercise any remedies of a secured party under the Uniform Commercial Code or other Applicable Law and take any other appropriate action to protect and enforce the rights and remedies of the Agent or the Holders of the Notes hereunder in all jurisdictions (including jurisdictions that are not First Stage Covered Jurisdictions).

In the event that the Agent does not sell or otherwise liquidate the Collateral, it shall continue to hold such Collateral and make distributions therefrom pursuant to Article XIV hereof.

Section 6.4 Agent May File Claim

In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial Proceeding, relating to the Issuer or any Co-Issuer or any other obligor upon the Notes or the property of the Issuer or any Co-Issuer or of such other obligor or their creditors, the Agent (irrespective of whether the principal of the Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Agent shall have made any demand on the Issuer or any Co-Issuer for the payment of overdue principal or interest) shall be entitled and empowered, to intervene in such proceeding or otherwise:

(i)

to file and prove a claim for all amounts owing and unpaid in respect of the Notes and to file such other papers or documents and take such other action including participating as a member, voting or otherwise, in any committee of creditors appointed in the matter, as may be necessary or advisable in order to have the claims of the Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Agent, its agents and counsel) and of the Noteholders allowed in such judicial Proceeding;

(ii)

to petition for lifting of the automatic stay and thereupon to foreclose upon the Collateral as elsewhere provided herein; and

(iii)

to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any receiver, assignee, trustee, liquidator, or sequestrator (or other similar official) in any such judicial Proceeding is hereby authorized by each Noteholder to make such payments to the Agent, and in the event that the Agent shall consent to the making of such payments directly to the Noteholders, to pay to the Agent any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Agent, its agents and counsel.

Nothing herein contained shall be deemed to authorize the Agent to authorize or consent to or accept or adopt on behalf of any Noteholder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof, or to authorize the Agent to vote in respect of the claim of any Noteholder in any such Proceeding.

Section 6.5 Agent May Enforce Claims Without Possession of Notes

All rights of actions and claims under this Security Agreement or the Notes may be prosecuted and enforced by the Agent without the possession of any of the Notes or the production thereof in any Proceeding relating thereto, and any such Proceedings instituted by the Agent shall be brought in its own name as Agent, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Agent, its agents and counsel, be for the benefit of the Holders of the Notes in respect of which such judgment has been recovered applied to payments on the Notes in the order set forth in Section 6.6.

Section 6.6 Allocation of Money Collected

If the Notes have been declared due and payable following an Event of Default and such declaration and its consequences have not been rescinded and annulled, any money collected by the Agent with re s pect to the Notes pursuant to this Article (and any funds then held or thereafter deposited into the Issuer Collection Account) shall be applied in the following order:

(i)

to the appropriate financial institutions, all fees and expenses charged in connection with its maintenance of the Issuer Collection Account, all Co-Issuer Collection Accounts and any other accounts provided for under the Transaction Documents not to exceed $20,000.00 per annum;

(ii)

to the Manager, the Management Fee and, to the extent not previously distributed, the Management Fee due on each prior Payment Date;

(iii)

to the Agent and the Noteholders, payment of all indemnity payments and reasonable costs and expenses incurred in connection with the enforcement of its rights hereunder or under the Notes, ratably, without preference or priority of any kind;

(iv)

to the Noteholders, interest accrued on the Notes for the related Interest Period plus any accrued interest thereon remaining unpaid from any previous Interest Period, and interest on such overdue interest to the date such payment is made, at the Default Rate, but only to the extent that payment of such interest on interest shall be legally enforceable;

(v)

to the Noteholders, the Note Principal Payment for such Payment Date in reduction of the Note Principal Balance of the Notes;

(vi)

to the Noteholders, all remaining Distributable Cash until the Outstanding Note Balance and any other Secured Obligations due the Noteholders pursuant to this Security Agreement have been paid in full;

(vii)

to any Hedge Counterparty, all amounts due pursuant to the related Hedge Agreement;

(viii)

to each Indemnified Party, pro rata, any Secured Obligations owed to it;

(ix)

to the Manager, the Issuer Management Fee and, to the extent not previously distributed, the Issuer Management Fee due on each prior Payment Date; and

(x)

to the Issuer or such party as the Issuer may direct, all remaining Distributable Cash.

Section 6.7 Limitation on Suits

No Holder shall have any right to institute any Proceeding, judicial or otherwise, with respect to this Security Agreement, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

(1)

such Holder has previously given written notice to the Agent and the Issuer of a continuing Event of Default;

(2)

the Holders of 25% or more of the aggregate Note Principal Balance of the Outstanding Notes shall have made written request to the Agent to institute Proceedings in respect of such Event of Default in its own name as Agent hereunder;

(3)

such Holder or Holders have offered to the Agent indemnity satisfactory to it (which, in the case of a holder that is, or is a subsidiary of, a bank or other institutional buyer with a net worth of at least $50,000,000 and whose claims paying ability or long-term debt is rated at least investment grade or better by a Rating Agency need only be such bank’s or institutional buyer’s unsecured written promise of indemnity) against the costs, expenses and liabilities to be incurred in compliance with such request;

(4)

the Agent for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such Proceeding; and

(5)

no direction inconsistent with such written request has been given to the Agent during such 60 day period by the Majority Holders;

it being understood and intended that no one or more Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Security Agreement to affect, disturb or prejudice the rights of any other Holders or to enforce any right under this Security Agreement, except in the manner herein provided.

Section 6.8 Unconditional Right of Noteholders to Receive Principal and Interest

Notwithstanding any other provision in this Security Agreement, the Holder of any Note shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest on such Note as such principal and interest becomes due and payable and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder; provided , however , that neither the Holder of any Note nor the Agent shall, if requested by the Noteholders, petition or otherwise invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Issuer or any Co-Issuer under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or any Co-Issuer or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer or any Co-Issuer.

Section 6.9 Restoration of Rights and Remedies

If the Agent or any Noteholder has instituted any Proceeding to enforce any right or remedy under this Security Agreement and such Proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Person who instituted the Proceeding, then and in every such case the Issuer, the Co-Issuers, the Agent and the Noteholders shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Agent and the Noteholders shall continue as though no such Proceeding has been instituted.

Section 6.10 Rights and Remedies Cumulative

No right or remedy herein conferred upon or reserved to the Agent or to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 6.11 Delay or Omission Not Waiver

No delay or omission of the Agent or of any Noteholder to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Agent or to the Noteholders, or any of them, may be exercised from time to time, and as often as may be deemed expedient, by the Agent or by the Noteholder, as the case may be.

Section 6.12 Control by Noteholders

The Majority Holders shall have the right to direct the decision whether to conduct, and the time, method and place of conducting, any Proceeding for any remedy available to the Agent with respect to the Notes or exercising any trust or power conferred on the Agent with respect to the Notes; provided that:

(1)

such direction shall not be in conflict with any rule of law or with this Security Agreement; and

(2)

the Agent may take any other action deemed proper by the Agent which is not inconsistent with such direction; provided , however , that the Agent need not take any action which it determines might involve it in liability or be unjustly prejudicial to the Noteholders not consenting.

Section 6.13 Waiver of Past Defaults

The Noteholders may waive any past Default with respect to the Notes hereunder and its consequences, except a Default

(1)

described in Sections 6.1(8) or (9), or

(2)

in respect of a covenant or provision hereof which under Article X cannot be modified or amended without the consent of the Holder of each Outstanding Note affected thereby.

Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been waived for every purpose of this Security Agreement. Upon receipt of notice of such waiver, the Agent shall transmit by mail to the Issuer notice of such waiver specifying the date on which the Default was waived promptly after the occurrence of such waiver.

Section 6.14 Undertaking for Costs

All parties to the Security Agreement and each Noteholder by its acceptance of a Note shall be deemed to have agreed that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Security Agreement, or in any suit against the Agent for any action taken, suffered or omitted by it as Agent, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorney’s fees against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 6.14 shall not apply to any suit instituted by the Agent, to any suit instituted by any Noteholder, or the Majority Holders or to any suit instituted by any Noteholder for the enforcement of the payment of principal of or interest on any Notes on or after the applicable Maturity Date (or, in the case of redemption of Notes, on or after the applicable Redemption Date).

Section 6.15 Waiver of Stay or Extension Laws

The Issuer and each Co-Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance by the Issuer and any Co-Issuer under this Security Agreement; and the Issuer and each Co-Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Agent, but will suffer and permit the execution of every such power as though no such law had been enacted.

Section 6.16 Sale of Collateral Upon Event of Default

(a) The power to effect any sale (a “ Sale ”) of any portion of the Collateral pursuant to Section 6.3 shall not be exhausted by any one or more Sales as to any portion of the Collateral remaining unsold, but shall continue unimpaired until the entire Collateral securing the Notes shall have been sold or all amounts payable under this Security Agreement with respect thereto shall have been paid. Any Sale conducted hereunder shall be completed in accordance with the applicable terms and provisions of the New York State Uniform Commercial Code. The Agent may from time to time postpone any Sale by public announcement made at the time and place of such Sale. It is hereby expressly agreed that the Agent is not limited to any amount fixed by law as compensation for any Sale, so long as the same shall be reasonable.

(b) Any Noteholder may bid for and acquire any portion of the Collateral securing the Notes in connection with any Sale thereof. In lieu of paying cash for the entire purchase price therefor, such Noteholder, after deducting the costs, charges and expenses (including reasonable attorney’s fees and expenses) incurred by the Agent in connection with such Sale may make settlement for any portion of the purchase price remaining by crediting against amounts owing on the Notes held by it or other amounts owing to such Noteholder secured by this Security Agreement, the portion of the net proceeds of such Sale to which such Noteholder would be entitled hereunder.

(c) Each of the Issuer and each Co-Issuer covenants and agrees ten (10) Business Days prior notice of a Sale of the entirety of the Collateral by a public Sale is a commercially reasonable notice.

(d) The Agent shall execute and deliver an appropriate instrument of conveyance transferring its interest in any portion of the Collateral in connection with a Sale thereof by the Agent, which Sale shall be at the expense of the Issuer and the related Note Co-Issuers. In addition, the Agent is hereby irrevocably appointed the agent and attorney-in-fact of the Issuer and the related Note Co-Issuers to cause the transfer and conveyance of the Issuer’s or the related Note Co-Issuers' interest in any portion of the Collateral in connection with a Sale thereof pursuant to the terms of this Security Agreement, and to take all action necessary to effect such Sale. No purchaser or transferee at such a sale shall be bound to ascertain the Agent’s authority, inquire into the satisfaction of any conditions precedent or see to the application of any monies.

(e) Any amounts received by the Noteholders in connection with a public or private sale pursuant this Section shall be deemed to be conclusive and binding upon the parties hereto and the Noteholders shall have no liability in respect hereto.

Section 6.17 Action on Notes

The Noteholder’s right to seek and recover judgment on the Notes or under this Security Agreement shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Security Agreement. Neither the lien of this Security Agreement nor any rights or remedies of the Noteholders shall be impaired by the recovery of any judgment by the Noteholders against the Issuers or by the levy of any execution under such judgment upon any portion of the Collateral or upon any of the assets of the Issuers.

ARTICLE VII.

THE AGENT

Section 7.1 Appointment; Nature of Relationship

BTMU Capital Corporation is appointed by the Noteholders as the Agent hereunder and under each other Transaction Document, and each of the Noteholders irrevocably authorizes the Agent to act as the contractual representative of such Noteholder with the rights and duties expressly set forth herein and in the other Transaction Documents. The Agent agrees to act as such contractual representative upon the express conditions contained in this Article VII. Notwithstanding the use of the defined term “Agent,” it is expressly understood and agreed that the Agent shall not have any fiduciary responsibilities to any Noteholder by reason of this Agreement and that the Agent is merely acting as the representative of the Noteholders with only those duties as are expressly set forth in this Agreement and the other Transaction Documents. In its capacity as the Noteholders' contractual representative, the Agent (i) does not assume any fiduciary duties to any of the Noteholders, (ii) is a “representative” of the Noteholders within the meaning of Section 9-102 of the UCC and (iii) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Agreement and the other Transaction Documents. Each of the Noteholders agrees to assert no claim against the Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Noteholder waives.

Section 7.2 Powers

The Agent shall have and may exercise such powers under the Transaction Documents as are specifically delegated to the Agent by the terms of each thereof, together with such powers as are reasonably incidental thereto. The Agent shall have no implied duties or fiduciary duties to the Noteholders, or any obligation to the Noteholders to take any action hereunder or under any of the other Transaction Documents except any action specifically provided by the Transaction Documents required to be taken by the Agent.

Section 7.3 Limited Liability

The obligations of Agent, Program Administrator, Lender, Enhancement Provider, Liquidity Provider and each agent for Lender under the Transaction Documents are solely the corporate obligations of such Person. Except with respect to any claim arising out of the willful misconduct or gross negligence of Program Administrator, Agent, Lender, Enhancement Provider, Liquidity Provider, any agent for Lender or J.H. Management Corporation (or any successor manager for the Lender), no claim may be made by the Issuer, any Co-Issuer, the Manager, NexCen Brands or any other Person against Program Administrator, Agent, Lender, Enhancement Provider, Liquidity Provider or any agent for Lender or their respective Affiliates, directors, members, managers, officers, employees, attorneys or agents, including J.H. Management Corporation, BTM Trust Company and the Program Administrator, for any special, indirect, consequential or punitive damages in respect of any claim for breach of contract or any other theory of liability arising out of or related to the transactions contemplated by this Security Agreement or any other Transaction Document, or any act, omission or event occurring in connection therewith; and each of the Issuer, any Co-Issuer, the Manager and NexCen Brands hereby waives, releases, and agrees not to sue upon any clam for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor. The parties agree that Deutsche Bank Trust Company Americas shall have no obligation, in its capacity as Program Administrator for Lender or otherwise to take any actions under the Transaction Documents (other than these actions, the requirement for which arose prior to its withdrawal) if Deutsche Bank Trust Company Americas is relieved of its obligations as Program Administrator. Notwithstanding any provision of this Security Agreement or any other Transaction Document to the contrary: (i) in no event shall the Agent ever be required to take any action which exposes it to personal liability or which is contrary to the provision of any Transaction Document or applicable law and (ii) the Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any party hereto or any other Person, and no implied covenants, functions, responsibilities, duties, obligations or liabilities on the part of the Agent shall be read into this Security Agreement or the other Transaction Documents or otherwise exist against the Agent. In performing its functions and duties hereunder, the Agent shall act solely as the agent of the Noteholders and does not assume nor shall be deemed to have assumed any obligation or relationship of trust or agency with or for the Issuer, any of the Co-Issuers, the Manager, NexCen Brands or any of their successors and assigns or any other Person.

Section 7.4 No Responsibility for Advances, Creditworthiness, Collateral, Recitals, Etc.

Neither the Agent nor any of its directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into, or verify (i) any statement, warranty or representation made in connection with any Transaction Document; (ii) the existence or possible existence of any E vent of Default or Deal Rapid Amortization Event or (iii) the validity, effectiveness or genuineness of any Transaction Document or any other instrument or writing furnished in connection therewith. The Agent shall not be responsible to any Noteholder for any recitals, statements, representations or warranties herein or in any of the other Transaction Documents, for the perfection or priority of any of the Liens on any of the Collateral, or for the execution, effectiveness, genuineness, validity, legality, enforceability, collectibility, or sufficiency of this Agreement or any of the other Transaction Documents or the transactions contemplated thereby, or for the financial condition of the Issuer or any Co-Issuer.

Section 7.5 Notice of Default

Promptly after the occurrence of any Default actually known to a Responsible Officer of the Agent, the Agent shall transmit to all Holders notice of such Default hereunder known to the Agent.

Section 7.6 Action on Instructions of Noteholders

The Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under any other Transaction Document in accordance with written instructions signed by the Noteholders, and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Noteholders. The Agent shall be fully justified in failing or refusing to take any action hereunder and under any other Transaction Document unless it shall first be indemnified to its satisfaction by the Noteholders pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action.

Section 7.7 Delegation of Duties

The Agent may execute any of its duties through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties, provided that such agents or attorneys agree in writing to be bound by the confidentiality provisions of Section 6.15 of the Note Funding Agreement. The Agent shall not be responsible to the Noteholders for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.

Section 7.8 Reliance on Documents; Counsel

(a) The Agent shall be entitled to rely upon any Note, notice, consent, certificate, affidavit, letter, telegram, statement, paper or document believed by it in good faith to be genuine and correct and to have been signed or sent by the proper Person or Persons, and, in respect to legal matters, upon the opinion of counsel selected by the Agent, which counsel may be employees of the Agent.

(b) Without limiting the generality of Section 7.3 , Agent, Program Administrator, Enhancement Provider and Liquidity Provider each: (a) may consult with legal counsel (including counsel for Issuer and any Co-Issuer), independent certified public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (b) makes no warranty or representation to Lender or any other holder of any interest in Collateral and shall not be responsible to Lender or any such other holder for any statements, warranties or representations made by other Persons in or in connection with any Transaction Document; (c) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of any Transaction Document on the part of Issuer or any Co-Issuer or to inspect the property (including the books and records) of Issuer or any Co-Issuer; (d) shall not be responsible to Lender or any other holder of any interest in Collateral for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of any Transaction Document; and (e) shall incur no liability under or in respect of this Security Agreement or any other Transaction Document by acting upon any notice (including notice by telephone), consent, certificate or other instrument or writing (which may be by facsimile or telex) believed by it to be genuine and signed or sent by the proper party or parties. For the avoidance of doubt, the provisions of this paragraph impose no obligation of any kind on the part of the Issuer or any Co-Issuer.

(c) With regard to Lender and any agent for Lender, the Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Security Agreement in accordance with a request of the Lender or any agent for Lender, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the other parties hereto.

(d) Unless otherwise advised in writing by an agent for Lender or by Lender on whose behalf such agent is purportedly acting, each party to this Security Agreement may assume that (a) such agent is acting for the benefit of Lender for which such agent is identified herein as being the agent for Lender, as well as for the benefit of each assignee or other transferee from any such Person, and (b) each action taken by such agent has been duly authorized and approved by all necessary action on the part of the parties on whose behalf it is purportedly acting. Each agent for Lender and Lender shall agree amongst themselves as to the circumstances and procedures for removal, resignation and replacement of such agent.

Section 7.9 BTM Trust Company and Affiliates

BTM Trust Company, BTMU Capital Corporation, Deutsche Bank Trust Company Americas and any of their respective Affiliates may generally engage in any kind of business with the Issuer, any Co-Issuer, the Manager, NexCen Brands, any of their respective Affiliates and any Person who may do business with or own securities of the Issuer, any Co-Issuer, the Manager, NexCen Brands or any of their respective Affiliates, all as if Deutsche Bank Trust Company Americas were not Program Administrator and BTMU Capital Corporation were not Agent, respectively, and without any duty to account therefor to any Noteholder.

Section 7.10 Successor Agent

The Agent may resign at any time by giving written notice thereof to the Issuer; provided, however, that such resignation shall not become effective until a successor agent is appointed and acting hereunder. Upon any such resignation or removal, the Noteholders shall have the right to appoint, on behalf of the Issuer and each Co-Issuer, a successor Agent. If no successor Agent shall have been so appointed by the Noteholders and shall have accepted such appointment within 30 days after the retiring Agent’s giving notice of resignation, then the retiring Agent may appoint, on behalf of the Issuer, the Co-Issuers and the Noteholders, a successor Agent. Notwithstanding anything herein to the contrary, so long as no Event of Default has occurred and is continuing, each such successor Agent shall be subject to approval by the Issuer and the Co-Issuers, which approval shall not be unreasonably withheld. Such successor Agent shall be a commercial bank or other type of institution acceptable to the Noteholders having capital and retained earnings of at least $50,000,000. Upon the acceptance of any appointment as the Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations hereunder and under the other Transaction Documents (other than duties or obligations which by their terms survive the termination of this Agreement or otherwise relate to its actions or omissions in its capacity as Agent). After any retiring Agent’s resignation hereunder as Agent, the provisions of this Article VII (and any indemnification provisions in the Transaction Documents) shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Agent hereunder and under the other Transaction Documents.

Section 7.11 Maintenance of Office or Agency

The Agent shall maintain an office or agency within the United States of America where Notes may be presented or surrendered for payment, where Notes may be surrendered for registration of transfer or exchange and where notices in respect of the Notes and this Security Agreement may be served. The Agent shall give prompt written notice to the Issuer and the Noteholder of the location, and of any change in the location, of any such office or agency.

ARTICLE VIII.

REIMBURSEMENT AND INDEMNIFICATION OF THE AGENT

Section 8.1 The Agent's Reimbursement and Indemnification

The Issuer and each Co-Issuer agrees that except as otherwise expressly provided herein, to reimburse the Agent upon its written request for all reasonable out-of-pocket expenses, disbursements and advances incurred or made by the Agent in accordance with any provision of this Security Agreement or any Transaction Documents (including the reasonable out-of-pocket expenses and disbursements of the Agent’s agents and counsel), except any such expense, disbursement or advance as may be attributable to its gross negligence or bad faith.

Section 8.2 Indemnification by Noteholders

Each Noteholder shall indemnify and hold harmless the Agent (but solely in its capacity as Agent) and its officers, directors, employees, representatives and agents (to the extent not reimbursed by the Issuer, any Co-Issuer or the Manager and without limiting the obligation, if any, of the Issuer, any Co-Issuer or the Manager to do so), ratably against any and all liabilities, obligations, losses, damages, penalties, judgments, settlements, costs, expenses and disbursements of any kind whatsoever (including in connection with any investigative or threatened proceeding, whether or not the Agent or such Person shall be designated a party thereto) that may at any time be imposed on, incurred by or asserted against the Agent or such Person as a result of, or related to, any of the transactions contemplated by the Transaction Documents or the execution, delivery or performance of the Transaction Documents or any other document furnished in connection therewith (but excluding any such liabilities, obligations, losses, damages, penalties, judgments, settlements, costs, expenses or disbursements resulting solely from the gross negligence or willful misconduct of the Agent or such Person as finally determined by a court of competent jurisdiction); provided, that such indemnity shall be provided solely to the extent of amounts received by such Noteholder under this Security Agreement which exceed the amounts required to repay such Noteholder’s outstanding commercial paper notes.

ARTICLE IX.

CONSOLIDATION AND MERGER

Neither the Issuer nor any Co-Issuer shall consolidate or merge with or into any other Person or convey or transfer its properties and assets substantially as an entirety to any Person, except as permitted in this Security Agreement.

ARTICLE X.

SECURITY AGREEMENT AMENDMENTS

Section 10.1 Security Agreement Amendments Only with Consent

With the written consent of the Agent, the Issuer and each Co-Issuer, delivered to the Issuer and each Co-Issuer, the Agent may enter into one or more Security A greement amendments for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Security Agreement or modifying in any manner the rights of the Holders of the Notes under this Security Agreement; provided , however , no such Security Agreement amendments shall, without the consent of all of the Noteholders:

(1)

reduce the Note Principal Balance of any Note or the Note Interest Rate thereon or change the amount or priority or time of any payment on any Note or any place of payment where, or the coin or currency in which, any Note or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment; or

(2)

modify or release any material portion of the Collateral except as otherwise permitted herein; or

(3)

modify or alter the definition of the term “Outstanding”; or

(4)

modify any of the provisions of this Section 10.1, except to increase any such percentage or to provide that certain other provisions of this Security Agreement cannot be modified or waived without the consent of the Holder of each Outstanding Note; or

(5)

permit the creation of any Lien ranking prior to or on a parity with the Lien of this Security Agreement with respect to any part of the Collateral.

Promptly after the execution by the Issuer, each Co-Issuer and the Agent of any Security Agreement amendment pursuant to this Section, the Issuer shall, if requested by the Agent, mail to the each of the Holders of the Notes, a notice setting forth in general terms the substance of such Security Agreement amendment together with a copy of such Security Agreement amendment. Any failure of the Issuer to mail such notice and copy, or any defect therein, shall not, however, in any way impair or affect the validity of any such Security Agreement amendment.

ARTICLE XI.

REDEMPTION AND DISPOSITION

Section 11.1 Redemption at the Option of a Co-Issuer

Each Note is redeemable (1) at the option of the related Note Co-Issuers in whole, or in part on any Payment Date, during the term hereof, or (2) pursuant to the provisions of Section 13.3(d), at the Redemption Price on any Redemption Date, in each case subject to payment of any amounts due under Section 12.15, if any, and such redemption, unless deemed exercised hereunder, shall be exercised by delivery of an Issuer Order to the Agent; provided , that (i) no Event of Default or Deal Rapid Amortization Event has occurred and remains unwaived and (ii) except in the case of an Extraordinary Optional Redemption, the Redemption Date must be the first available Redemption Date for which the Agent can give a proper Redemption Notice after receipt of such Issuer Order by the Agent; provided , further , that any redemption in part pursuant to clause (1) above shall be applied pro rata to the remaining principal payments of such Note.

Section 11.2 Mandatory Redemption

(a) In the event that there is to be a payment of the Release Price for an Asset as described in Section 13.3(b) or Section 13.3(c) of this Security Agreement, upon (i) such payment in cash, (ii) completion of the redemption of the applicable Note Co-Issuers' Note as referred to below, (iii) disposition of such Asset to an entity other than the Manager, the Issuer or any other Co-Issuer and (iv) provided no Default (unless such redemption will effect a cure of such Default) or Event of Default or Deal Rapid Amortization Event has occurred which has not been waived, the affected Asset shall be released from the Lien of this Security Agreement. The Release Price of the affected Asset shall be deposited in the related Co-Issuer Collection Account by the Agent upon receipt, and shall be applied to the redemption of such Note Co-Issuers' Note on the next ensuing Redemption Date for which a proper Redemption Notice can be given, in a principal amount equal to the Release Price; provided , that any redemption pursuant to this clause shall be applied pro rata to the remaining principal payments of such Note. Deposit of such Release Price in the related Co-Issuer Collection Account shall be deemed to be an exercise of the option to redeem the Note on such Redemption Date in such principal amount and at the Redemption Price with the completion of such redemption occurring on the related Redemption Date.

(b) In the event that there is to be a payment of the Net Disposition Proceeds for any Asset as described in Section 11.6 of this Security Agreement, upon (i) such payment in cash, (ii) completion of the redemption of the applicable Note Co-Issuers' Note as referred to below, (iii) disposition of such Asset to an entity other than the Manager, the Issuer or any other Co-Issuer and (iv) provided no Default (unless such redemption will effect a cure of such Default) or Event of Default or Deal Rapid Amortization Event has occurred which has not been waived, the affected Asset shall be released from the Lien of this Security Agreement. The Net Disposition Proceeds of the affected Asset shall be deposited in the related Co-Issuer Collection Account by the Agent upon receipt and shall be applied to the redemption of such Note Co-Issuers' Note on the next ensuing Redemption Date for which a proper Redemption Notice can be given in a principal amount equal to the Net Disposition Proceeds; provided , that any redemption pursuant to this clause shall be applied pro rata to the remaining principal payments of such Note. Deposit of such Net Disposition Proceeds in the related Co-Issuer Collection Account shall be deemed to be an exercise of the option to redeem the Note on such Redemption Date in such principal amount and at the Redemption Price.

(c) A Note shall be redeemed in full upon the occurrence of (i) a Change of Control of either of the related Note Co-Issuers, or (ii) the sale of the equity interest of either related Note Co-Issuer by the Issuer to an entity other than another Co-Issuer as contemplated in Section 11.6(b), in each case at the Redemption Price.

Section 11.3 Notice of Redemption by the Issuer

Notice of redemption pursuant to Section 11.1 or Section 11.2, if not waived in writing by a Noteholder, shall be given by the Issuer to the Agent by U.S. registered mail, return receipt requested, or by nationally recognized overnight private mail delivery service, postage prepaid, mailed not less than 15 days or more than 30 days prior to the applicable Redemption Date to each Holder of Notes whose Notes are to be redeemed (except that no more than 2 Business Days prior notice will be required in the case of a redemption necessary to avoid an Event of Default described in Section 6.1(2) or in the case of a redemption arising in connection with the payment requirements in Section 12.14 or Section 12.16). It shall be assumed for purposes of this Security Agreement that the Agent can and will mail a notice of redemption 5 days after receipt of an Issuer Order to redeem Notes or a deemed election by the related Note Co-Issuers to redeem their Notes.

All notices of redemption shall state:

(1)

the Redemption Date;

(2)

the principal amount of the Note or Notes to be redeemed and the allocation of such principal amount to the remaining principal payments of the Note or the Notes;

(3)

a pro forma Redemption Price for each Note redeemed, calculated as of the date of the Redemption Notice;

(4)

that on the Redemption Date, the Redemption Price shall become due and payable upon each Note called for redemption, and that interest thereon shall cease to accrue on such date; and

(5)

the place where such Note or Notes to be redeemed are to be surrendered on the Redemption Date, which shall be the office or agency of the Agent to be maintained at the address provided in Section 1.3.

Notice of redemption of Notes shall be given by the related Note Co-Issuers or, at the related Note Co-Issuers’ request, by the Agent in the name and at the expense of the related Note Co-Issuers. Failure to give notice of redemption, or any defect therein, to any Holder of any Note selected for redemption shall not impair or affect the validity of the redemption of any other Note.

Section 11.4 Deposit of the Redemption Price

On or before 1:00 P.M. (New York City time) on the Business Day immediately preceding any Redemption Date, the related Note Co-Issuers shall deposit into the related Co-Issuer Collection Account an amount of monies sufficient to pay the Redemption Price of their Note which is to be redeemed on such Redemption Date.

Section 11.5 Notes Payable on Redemption Date

(a) Notice of redemption having been given as provided in Section 11.3, the Notes to be redeemed shall, on the applicable Redemption Date, become due and payable at the Redemption Price and on such Redemption Date such Notes shall cease to bear interest on the portion of the Notes actually redeemed. On the Redemption Date, the Holders of such Notes shall be paid the Redemption Price pursuant to Section 11.4 or otherwise; provided , however , that installments of principal and interest which are due on or prior to the Redemption Date shall be payable to the Holders of such Notes according to their terms and the provisions of Section 3.7.

(b) Installments of interest and principal due on or prior to a Redemption Date shall continue to be payable to the Holders of Notes called for redemption according to their terms and the provisions of Section 3.7. Except as otherwise specifically provided herein, the election of the related Note Co-Issuers to redeem their Note pursuant to this Section shall be evidenced by an Issuer Order authorizing payment of the Redemption Price on the Note to be redeemed from monies deposited into the related Co-Issuer Collection Account pursuant to Section 11.4 or otherwise available in accordance with this Security Agreement for the purpose of redeeming Notes.

Section 11.6 Voluntary Disposition of Collateral

(a) Prior to the Deal Rapid Amortization Date, any Co-Issuer may at any time sell or otherwise dispose of any of its Assets as provided in this Section 11.6. Upon closing of any such voluntary sale or disposition, the Issuer and the related Note Co-Issuers shall pay to the Agent the Net Disposition Proceeds of any Asset thereby sold for the purpose of effecting full or partial redemption of their Note, as the case may be, pursuant to Section 11.2(b) hereof; provided , that any redemption pursuant to this clause shall be applied pro rata to the remaining principal payments of such Note. It shall be a condition of each such sale that the Pro Forma DSCR (as calculated by the Manager and reported in sufficient detail in writing to the Agent and subject to the Agent’s satisfaction) shall not be less than 1.15:1.00; and that such Net Disposition Proceeds at least equals the Note Principal Balance of all Notes of the related Co-Issuers issued to fund or maintain such Assets together with all accrued interest thereon through the applicable Redemption Date.

(b) Prior to the Deal Rapid Amortization Date, the Issuer may at any time sell or otherwise dispose of its equity interest in any Co-Issuer as provided in this Section 11.6. Concurrently with the completion of any such voluntary sale or disposition, the Issuer shall pay to the Agent a sum sufficient to redeem each Note of such Co-Issuer (and any related Co-Issuer) in full, pursuant to Section 11.2(b) hereof. It shall be a condition of each such sale that the Pro Forma DSCR, (as calculated by the Manager and reported in sufficient detail in writing to the Agent and subject to the Agent’s satisfaction) shall not be less than 1.15:1.00; and that such Net Disposition Proceeds at least equals the Note Principal Balance of all Notes of the related Co-Issuers together with all accrued interest thereon through the applicable Redemption Date.

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