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

            


    

     

    i

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              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

            
	 	 	 


    

     

    ii

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              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

            	
              66

            
	 	 	 
	
              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

              


      

    

     

    iv

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    This
      SECURITY AGREEMENT (as amended from time to time as permitted hereby, this
      “Security
      Agreement”)
      is
      dated as of March
      12,
      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.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    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. 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (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-Issuers 

     

    (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.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    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.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    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.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    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. 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    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.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    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:
                ]

            


    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    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.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    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.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    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.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    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. 

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    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;

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (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.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    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;

            


    

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (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;

            


    

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (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;

            


    

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (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.


     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    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

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    (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.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    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 respect
      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;

            


    

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (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.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    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:

       

    

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (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.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    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.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    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.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    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 Event
      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.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    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.

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    (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.

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    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.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    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
Agreement
      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.

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    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.

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    (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.

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    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.

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      XII.

     

    REPRESENTATIONS,
      WARRANTIES AND COVENANTS

     

    Section
      12.1 Payment
      of Principal and Interest

     

    The
      Issuer and each Co-Issuer shall duly and punctually pay the principal of and
      interest on their respective Notes, subject to and in accordance with the terms
      of their respective Notes and this Security Agreement.

     

    Section
      12.2 Continued
      Existence; Observance of Organizational Documents

     

    The
      Issuer and each Co-Issuer shall keep in full effect its existence, rights and
      franchises as an entity under the laws of the state of its formation or
      incorporation, as the case may be, shall operate in accordance with, and subject
      to the limitations set forth in, its Organizational Documents and shall obtain
      and preserve its qualification to do business as a foreign corporation in each
      jurisdiction in which the failure to be so qualified shall have a material
      adverse effect on the validity and enforceability of any Transaction Document
      or
      its respective Note. The Issuer is duly organized in, and qualified to do
      business only in, the State of Delaware.

     

    Section
      12.3 Protection
      of Collateral

     

    (a) The
      Issuer and each Co-Issuer (with respect to the portion of the Collateral pledged
      by it hereunder) covenants to file or cause to be filed all UCC Financing
      Statements and any related forms necessary or desirable to be filed with respect
      to the Collateral in the United States Patent and Trademark Office within ten
      (10) Business Days after the applicable Funding Date.

     

    (b) The
      Issuer and each Co-Issuer (with respect to the portion of the Collateral pledged
      by it hereunder) shall, from time to time, execute and deliver to the Agent,
      as
      the Agent may reasonably request, all such supplements and amendments hereto
      and
      all such financing statements, continuation statements, instruments of further
      assurance and other instruments, and shall take such other action as the Agent
      reasonably deems necessary or advisable to:

     

    
      	 	
              (i)

            	
              ensure
                a first priority, perfected security interest in all or any portion
                of the
                Collateral;

            


    

     

    
      	 	
              (ii)

            	
              maintain
                or preserve the lien of this Security Agreement or carry out the
                purposes
                hereof;

            


    

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (iii)

            	
              protect
                the validity of any Grant made pursuant to this Security
                Agreement;

            


    

     

    
      	 	
              (iv)

            	
              enforce
                any of the Collateral or, where appropriate, any security interest
                in the
                Collateral and the proceeds thereof;


            


    

     

    
      	 	
              (v)

            	
              preserve
                and defend the Issuer’s and the Co-Issuers’ respective title to the
                Collateral and the rights of the Noteholders therein against the
                claims of
                all persons and parties subject to the rights of licensees under
                the
                Licenses; or

            


    

     

    
      	 	
              (vi)

            	
              record
                or register the Issuer’s and the Co-Issuers' respective ownership of all
                of the Trademarks of record in the related
                Territory;

            


    

     

    but
      in
      the foregoing cases of items (i) through (v), prior to the existence of an
      Event
      of Default, only to the extent the same can be achieved under the laws of the
      First Stage Covered Jurisdictions, and in the foregoing case of item (vi),
      prior
      to the existence of an Event of Default, only to the extent the same can be
      achieved under the laws of the Territory.

     

    (c) For
      the
      avoidance of doubt, the Agent and the Noteholders acknowledge that any Co-Issuer
      may own items of intellectual property that are registered under the laws of
      foreign jurisdictions ("Foreign
      IP Assets").
      Except as provided in paragraph (b) above, the applicable Co-Issuer is not
      required to perfect the security interest of such Foreign IP Assets under such
      foreign laws, provided that,
      following the occurrence of an Event of Default, the Noteholder shall be
      entitled to require that all actions be taken as necessary to cause the
      perfection of the Foreign IP Assets in such foreign jurisdictions, at the
      expense of the applicable Co-Issuer, but only in those jurisdictions in which
      the aggregate Value of all Foreign IP Assets in such jurisdiction (including
      for
      this purpose both Trademarks registered in such jurisdiction and Licenses
      payable by Obligors located in or governed by the laws of such jurisdictions)
      is
      equal to, or greater than, $50,000.00.

     

    Section
      12.4 Negative
      Covenants

     

    (a) Each
      Co-Issuer shall not:

     

    
      	 	
              (i)

            	
              sell,
                lease or otherwise transfer any of the Collateral other than pursuant
                to
                Licenses in the ordinary course of business and as otherwise permitted
                under the Transaction Documents; or

            


    

     

    
      	 	
              (ii)

            	
              distribute
                dividends to a party other than the Issuer or its parent Co-Issuer;
                or

            


    

     

    
      	 	
              (iii)

            	
              (i) voluntarily
                institute, or consent to the institution of, bankruptcy or insolvency
                proceedings, or file a petition seeking or consenting to reorganization
                or
                relief under any applicable federal or state law relating to bankruptcy,
                or seek or consent to the appointment of a receiver, liquidator,
                assignee,
                trustee, sequestrator (or other similar official) of such Co-Issuer,
                or
                any substantial part of its assets, or make any assignment for the
                benefit
                of creditors, or admit in writing its inability to pay its debts
                generally
                as they become due, or take any corporate action in furtherance of
                any
                such action; or (ii) consolidate, merge, dissolve or liquidate, in
                whole or in part; or

            


    

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (iv)

            	
              commingle
                its funds or assets with those of any other Person;
                or

            


    

     

    
      	 	
              (v)

            	
              except
                for indebtedness and Obligor Rebate Amounts and Franchise Fee Refunds
                as
                may be expressly permitted under this Security Agreement, incur,
                assume or
                guaranty any indebtedness or Obligor Rebate Amounts except for such
                indebtedness and Obligor Rebate Amounts and Franchise Fee Refunds
                as has
                been approved by the Agent; or

            


    

     

    
      	 	
              (vi)

            	
              make
                any capital expenditures except in the ordinary course of business;
                or

            


    

     

    
      	 	
              (vii)

            	
              create
                any subsidiaries that do not become Co-Issuers hereunder other than
                any
                Support Fund; or

            


    

     

    
      	 	
              (viii)

            	
              (a)
                with respect to the portion of the Collateral pledged by it, permit
                the
                validity or effectiveness of this Security Agreement to be impaired,
                or
                permit this Security Agreement to be amended, hypothecated, subordinated,
                terminated or discharged, or permit any Person to be released from
                any
                covenants or obligations with respect to the Collateral except in
                the
                ordinary course of business or as otherwise may be expressly permitted
                hereby, provided, however, such release shall not result in a material
                adverse change to such Co-Issuer's financial condition or (b) permit
                any
                lien, charge, security interest, mortgage or other encumbrances,
                other
                than the Lien of this Security Agreement and Licenses, to be created
                on or
                extended to or otherwise arise upon or burden such portion of the
                Collateral or any part thereof or any interest therein or the proceeds
                thereof; or

            


    

     

    
      	 	
              (ix)

            	
              claim
                any credit on, or make any deduction from, the principal or interest
                payable in respect of its Note by reason of the payment of any taxes
                levied or assessed upon the portion of the Collateral pledged by
                it;
                or

            


    

     

    
      	 	
              (x)

            	
              amend
                (a) any provisions of the Organization Documents or (b) any
                Transaction Document without receiving prior written approval thereof
                by
                the Agent (which may not be unreasonably withheld);
                or

            


    

     

    
      	 	
              (xi)

            	
              own
                any property, including an interest in real estate, or assets other
                than
                its portion of the Assets; or

            


    

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (xii)

            	
              change
                the state of its organization without thirty days’ prior written notice to
                the Agent, accompanied by such evidence of actions to be taken as
                shall be
                necessary to continue the perfection of the lien on the portion of
                the
                Collateral pledged by it to the extent the same can be achieved under
                the
                laws of the First Stage Covered Jurisdictions, as applicable;
                or

            


    

     

    
      	 	
              (xiii)

            	
              issue
                any bonds, notes or other obligations other than the
                Notes.

            


    

     

    
      	 	
              (xiv)

            	
              enter
                into or be a party to any agreement or instrument without the written
                consent of the Agent; provided, however, that such consent of the
                Agent
                shall not be required for any Co-Issuer to enter into any Licenses
                and
                preferred vendor agreements (so long as such preferred vendor agreements
                impose no obligations whatsoever on such Co-Issuer), in each case,
                entered
                into in accordance with the normal policies and procedures of such
                Co-Issuer; or

            


    

     

    
      	 	
              (xv)

            	
              have
                any employees. None of the Co-Issuers shall establish, sponsor, maintain,
                contribute to or incur any obligation to fund or contribute to any
                NexCen
                Entity Plan. Within five (5) days of becoming aware of the occurrence
                of
                an ERISA Event, the applicable Co-Issuer shall provide the Agent
                with
                written notice of the same.

            


    

     

    (b) The
      Issuer shall not:

     

    
      	 	
              (i)

            	
              sell,
                lease or otherwise transfer any of the Collateral other than pursuant
                to
                Licenses in the ordinary course of business and as otherwise permitted
                under the Transaction Documents; or


            


    

     

    
      	 	
              (ii)

            	
              use
                any dividends received from any Co-Issuer or any other amounts from
                any
                sources other than, prior to a Default or an Event of Default, dividending
                funds to its parent for the purpose of acquiring IP Businesses. Upon
                the
                occurrence and continuance of an Event of Default, such disbursements
                shall be made only as consented to in writing by the Agent;
                or

            


    

     

    
      	 	
              (iii)

            	
              (a)
                voluntarily institute, or consent to the institution of, bankruptcy
                or
                insolvency proceedings, or file a petition seeking or consenting
                to
                reorganization or relief under any applicable federal or state law
                relating to bankruptcy, or seek or consent to the appointment of
                a
                receiver, liquidator, assignee, trustee, sequestrator (or other similar
                official) of the Issuer, or any substantial part of its assets, or
                make
                any assignment for the benefit of creditors, or admit in writing
                its
                inability to pay its debts generally as they become due, or take
                any
                corporate action in furtherance of any such action; or (b) consolidate,
                merge, dissolve or liquidate, in whole or in part;
                or

            


    

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (iv)

            	
              commingle
                its funds or assets with those of any other Person;
                or

            


    

     

    
      	 	
              (v)

            	
              except
                for indebtedness and Obligor Rebate Amounts and Franchise Fee Refunds
                as
                may be expressly permitted under this Security Agreement, incur,
                assume or
                guaranty any indebtedness or Obligor Rebate Amounts except for such
                indebtedness and Obligor Rebate Amounts and Franchise Fee Refunds
                as has
                been approved by the Agent; or

            


    

     

    
      	 	
              (vi)

            	
              make
                any capital expenditures except in the ordinary course of business;
                or

            


    

     

    
      	 	
              (vii)

            	
              create
                any subsidiaries that do not become Co-Issuers hereunder other than
                any
                Support Fund; or

            


    

     

    
      	 	
              (viii)

            	
              (a)
                with respect to the portion of the Collateral pledged by it, permit
                the
                validity or effectiveness of this Security Agreement to be impaired,
                or
                permit this Security Agreement to be amended, hypothecated, subordinated,
                terminated or discharged, or permit any Person to be released from
                any
                covenants or obligations with respect to the Collateral except in
                the
                ordinary course of business or as otherwise may be expressly permitted
                hereby, provided, however, such release shall not result in a material
                adverse change to the Issuer's financial condition, ot (b) permit
                any
                lien, charge, security interest, mortgage or other encumbrances,
                other
                than the Lien of this Security Agreement and Licenses, to be created
                on or
                extended to or otherwise arise upon or burden such portion of the
                Collateral or any part thereof or any interest therein or the proceeds
                thereof; or

            


    

     

    
      	 	
              (ix)

            	
              claim
                any credit on, or make any deduction from, the principal or interest
                payable in respect of its Note by reason of the payment of any taxes
                levied or assessed upon the portion of the Collateral pledged by
                it;
                or

            


    

     

    
      	 	
              (x)

            	
              amend
                (a) any provisions of the Organization Documents or (b) any Transaction
                Document without receiving approval thereof by the Agent (which may
                not be
                unreasonably withheld); or

            


    

     

    
      	 	
              (xi)

            	
              own
                any assets or property, including any interest in real estate, other
                than
                equity interests in the Co-Issuers, and equity interests in any Support
                Funds; or

            


    

     

    
      	 	
              (xii)

            	
              change
                the state of its organization without thirty days’ prior written notice to
                the Agent, accompanied by such evidence of actions to be taken as
                shall be
                necessary to continue the perfection of the lien on the portion of
                the
                Collateral pledged by it to the extent the same can be achieved by
                filing
                under the laws of the Covered Jurisdictions, as applicable;
                or

            


    

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (xiii)

            	
              issue
                any bonds, notes or other obligations other than the Notes;
                or

            


    

     

    
      	 	
              (xiv)

            	
              by
                party to or otherwise incur liability in respect of any sale agreements
                or
                similar arrangements, other than with respect to The Athlete's Foot;
                or

            


    

     

    
      	 	
              (xv)

            	
              enter
                into or be a party to (or permit any Support Fund to enter into or
                be a
                party to) any agreement or instrument without the written consent
                of the
                Agent; provided, however, that such consent of the Agent shall not
                be
                required for the Support Fund to enter into any agreements entered
                into in
                accordance with the normal policies and procedures of the Support
                Fund;
                or

            


    

     

    
      	 	
              (xvi)

            	
              have
                any employees. The Issuer shall not establish, sponsor, maintain,
                contribute to or incur any obligation to fund or contribute to any
                NexCen
                Entity Plan. Within five (5) days of becoming aware of the occurrence
                of
                an ERISA Event, the Issuer shall provide the Agent with written notice
                of
                the same.

            


    

     

    Section
      12.5 Inspection
      and Audits

     

    (a) At
      any
      time and from time to time, upon five (5) Business Days prior written notice,
      the Issuer and each Co-Issuer shall permit the Agent, or its agents or
      representatives, during regular business hours and without charge: (i) to
      examine and make copies of and abstracts from the books and records (financial
      and corporate) of the Issuer and each Co-Issuer, and (ii) to visit the offices
      and properties of the Issuer and each Co-Issuer for the purpose of reviewing
      and
      examining such books and records and discussing matters relating thereto and
      to
      the performance of the Issuer and such Co-Issuer under this Security Agreement
      with any of the officers of the Issuer having knowledge of such matters or
      with
      the Issuer's and such Co-Issuer's outside auditors.

     

    (b) The
      Agent
      shall have the right to audit the Issuer's and any Co-Issuer's operations
      semi-annually at the Agent’s expense. If an Event of Default is occurring and
      continuing, audits are permitted to be performed at the discretion of the Agent
      and at the expense of the Issuer and/or the applicable Co-Issuers.

     

    Section
      12.6 Limited
      Purpose

     

    Neither
      the Issuer nor any Co-Issuer shall engage, and have not engaged (with respect
      to
      any Co-Issuer, to the best of the Issuer's, or any of its Managers', knowledge),
      in any business other than the transactions permitted by its Organizational
      Documents (as in effect from time to time).

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    Section
      12.7 Co-Issuers
      Ownership

     

    Each
      Co-Issuer agrees that its books and records will reflect its ownership of the
      portion of the Collateral pledged by it, subject to Licenses and the Lien
      created by this Security Agreement.

     

    Section
      12.8 Enforcement
      of Transaction Documents

     

    The
      Issuer and each Co-Issuer shall take all actions necessary, and diligently
      pursue all remedies available to it, to enforce the obligations of each other
      party to a Transaction Document to secure its and the Agent’s rights
      thereunder.

     

    Section
      12.9 Representations
      and Warranties

     

    Each
      Co-Issuer, as of its applicable Funding Date, and, to the extent applicable,
      the
      Issuer as of each Funding Date, hereby represents and warrants the following:
      

     

    (a) Except
      for any interests created by Licenses, the applicable Co-Issuer is the owner
      of,
      and has good title to, its portion all of the Collateral, free of Liens, the
      applicable Co-Issuer has not assigned any interest or participation in any
      Collateral, and the applicable Co-Issuer has full right to Grant such Collateral
      to the Agent for the benefit of the Holder of the Notes, any counterparty under
      a Hedge Agreement approved by the Agent and each Indemnified Party.

     

    (b) Each
      Co-Issuer, by executing and delivering to the Agent a Security Agreement
      Supplement, will be deemed to have Granted a security interest in all of its
      right, title, and interest in its assets to the Agent for the benefit of the
      Holder of the Notes, any counterparty under a Hedge Agreement approved by the
      Agent and each Indemnified Party.

     

    (c) The
      Notes
      have not been registered under the Securities Act nor pursuant to the securities
      or blue sky laws of any State. 

     

    (d) Each
      Co-Issuer and the Issuer is not, and has never been (with respect to any
      Co-Issuer, to the best of the Issuer's, or any of its Managers', knowledge),
      an
      "investment company" within the meaning of the Investment Company
      Act.

     

    (e) Each
      Co-Issuer and the Issuer is not, and has never been (with respect to any
      Co-Issuer, to the best of the Issuer's, or any of its Managers', knowledge),
      a
      debtor in a bankruptcy case.

     

    (f) Each
      Co-Issuer has timely filed all tax returns (federal, state and local) which
      are
      required to be filed and has paid all taxes related thereto. There has been
      no
      waiver of any statutes of limitation in respect of taxes or agreement to any
      extension of time with respect to a tax assessment or deficiency of either
      the
      Issuer, each of the Co-Issuers or any Support Fund; there is no, and has never
      been any (with respect to any Co-Issuer or any Support Fund, to the best of
      the
      Issuer's, or any of its Managers', knowledge), claim, audit, action, suit or
      proceeding against or with respect to either the Issuer, each of the Co-Issuers
      or the Support Fund in respect of any tax; neither the Issuer, any Co-Issuer
      nor
      Support Fund has received from any taxing authority any formal or informal
      (x)
      notice indicating an intent to open an audit or other review, (y) request for
      information related to tax matters or (z) notice of deficiency or proposed
      adjustment for any amount of tax proposed, asserted, or assessed by any taxing
      authority against any of the Issuer, any of the Co-Issuers or any Support
      Fund.

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

     

    (g) The
      Agent
      will, upon proper filing and/or recording of UCC financing statements, and
      trademark or other documents, as applicable, in the Covered Jurisdictions by
      the
      applicable Co-Issuer, have a perfected first priority security interest in
      each
      item of Collateral, free from any lien, security interest encumbrance or other
      right, title or interest of any Person, except for any Lien created by this
      Security Agreement and the Licenses.

     

    (h) The
      Issuer has its chief executive office at 1330 Avenue of the Americas, New York,
      N.Y. 10019 and each Co-Issuer has its chief executive office as provided in
      the
      related Security Agreement Supplement.

     

    (i) The
      Issuer and each Co-Issuer, (i) is, and since its formation has been (with
      respect to any Co-Issuer, to the best of the Issuer's, or any of its Managers',
      knowledge), an entity, duly organized, validly existing in good standing under
      the laws of its formation or incorporation, as the case may be, (ii) has, and
      since its formation has had (with respect to any Co-Issuer, to the best of
      the
      Issuer's, or any of its Managers', knowledge), requisite power and authority
      and
      all licenses and permits to own and operate its properties to carry on its
      business as now conducted, and, as applicable, to enter into and perform its
      obligations under each Transaction Document to which it is a party and the
      transactions contemplated thereby, including, the issuance and sale by the
      Co-Issuer of its Note and the performance of its obligations thereunder; and
      (iii) has been duly qualified and is authorized to do business and, if
      applicable, is in good standing as a foreign corporation (or is exempt from
      such
      requirements) and has obtained all necessary licenses and approvals in each
      jurisdiction where the failure to be so qualified would have a material adverse
      effect on its ability to conduct its business. Set forth on Schedule VII to
      each
      Security Agreement Supplement is a list of each state which the applicable
      Co-Issuer is organized under and qualified to do business in.

     

    (j) Neither
      the Issuer, any Co-Issuer or any Support Fund has any liabilities, obligations
      or indebtedness of any nature (other than any deferred income in accordance
      with
      GAAP), whether liquidated, unliquidated, accrued, absolute, contingent or
      otherwise, except for those that are set forth in Schedule VII with respect
      to
      the Issuer and the applicable schedule to the Security Agreement Supplement
      with
      respect to each Co-Issuer and the related Support Fund, if any. 

     

    (k) Neither
      the Issuer, any Co-Issuer nor any Support Fund has, or has ever had, any
      employees.

     

    (l) ERISA.
      No
      Benefit Plan maintained by the Issuer, any Co-Issuer, any Support Fund or any
      of
      its ERISA Affiliates has any “accumulated funding deficiency” (within the
      meaning of Section 302 of ERISA or Section 412 of the Code), whether or not
      waived. The Issuer, each Co-Issuer, each Support Fund and each of its ERISA
      Affiliates is in material compliance with all legal requirements under ERISA
      or
      other Laws relating to Benefit Plans to the extent applicable, and no event
      under any such Benefit Plan has occurred that could reasonably be expected
      to
      result, directly or indirectly, in any Lien being imposed on the property of
      the
      Issuer, any Co-Issuer, or any Support Fund, or any of the Collateral, or the
      payment of any material amount to avoid such Lien.

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

     

    (m) Solvency.
      Neither
      as a result of the transactions contemplated by this Security Agreement or
      any
      other Transaction Document, nor immediately before or after such transactions,
      will the Issuer or any Co-Issuer be insolvent or have unreasonably small capital
      with which to conduct its business. None of the transactions contemplated by
      this Security Agreement or other Transaction Documents are being undertaken
      with
      the intention to delay, hinder or defraud any of the Issuer’s or any Co-Issuer’s
      known or anticipated creditors.

     

    (n) Organizational
      Records.
      The
      books of account, minute books and other records of the Issuer, each Co-Issuer
      and each Support Fund heretofore made available to the Agent show all corporate
      action, as applicable, taken by the directors, managers, members and
      shareholders, as applicable, of the Issuer, each Co-Issuer and each Support
      Fund
      (including action taken by consent without a meeting), and no such meeting
      has
      been held or corporate action has been taken for which minutes or other
      appropriate record have not been prepared and are not contained in such minute
      books.

     

    (o) Each
      Transaction Document (other than the Notes) to which the Issuer or any Co-Issuer
      is a party and the transactions contemplated thereby have been duly authorized
      and, when executed and delivered by the Issuer or such Co-Issuer, as applicable,
      will constitute valid, binding and enforceable obligations of the Issuer and
      such Co-Issuer, as applicable, in accordance with its terms, subject, as to
      the
      enforcement of remedies, to bankruptcy, insolvency, reorganization, moratorium
      and other similar laws affecting the enforceability of creditors’ rights
      generally applicable in the event of the bankruptcy, insolvency or
      reorganization of the Issuer or any Co-Issuer and to general principles of
      equity.

     

    (p) No
      event
      has occurred and is continuing that constitutes a Default or an Event of Default
      or a Funding Termination Event or Deal Rapid Amortization Event under, and
      as
      defined in, this Security Agreement or any other Transaction Document. Neither
      the execution and delivery of any Transaction Document by the Issuer or any
      Co-Issuer, the consummation of the transactions contemplated thereby nor the
      satisfaction of the terms and conditions of the Transaction Documents (i)
      conflicts with or results in any breach or violation of any provision of the
      Organizational Documents of the Issuer or any Co-Issuer, or any law, rule,
      regulation, order, writ, judgment, injunction, decree, determination or award
      currently in effect having applicability to the Issuer or any Co-Issuer, or
      any
      of their respective properties, including regulations issued by an
      administrative agency or other governmental authority having supervisory powers
      over the Issuer or any Co-Issuer; or (ii) constitutes a default by the Issuer
      or
      any Co-Issuer under or a breach
      of
      any contract, agreement, mortgage or other instrument to which it is a party
      or
      by which it or any of its properties are or may be bound or affected or (iii)
      results in the creation or imposition of any lien upon any of the properties
      or
      assets of the Issuer or any Co-Issuer pursuant to the terms of any mortgage,
      deed of trust, contract, agreement, charter instrument, by-law or other
      instrument, other than that created pursuant to this Security
      Agreement.

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

     

    (q) Each
      Note
      has been duly and validly authorized by the Issuer and the related Note
      Co-Issuers and, when duly and validly executed in accordance with this Security
      Agreement, will be validly issued and outstanding and entitled to the benefits
      of this Security Agreement and will constitute a valid and legally binding
      obligation of the related Note Co-Issuers, enforceable against the related
      Note
      Co-Issuers in accordance with its terms, subject, as to the enforcement of
      remedies, to bankruptcy, insolvency, reorganization, moratorium and other
      similar laws affecting the enforceability of creditors’ rights generally
      applicable in the event of the bankruptcy, insolvency or reorganization of
      the
      related Note Co-Issuers and to general principles of equity. 

     

    (r) Each
      Co-Issuer had at all relevant times and now has full power and authority to
      own,
      and has full power and authority to Grant, the Collateral and has duly
      authorized such Grant by all necessary action, and does not require any member
      approval, or approval or consent of any trustee or holders of any indebtedness
      or obligations of the applicable Co-Issuer other than such as have been
      obtained.

     

    (s) There
      is
      no, and has never been (with
      respect to any Co-Issuer or any Support Fund, to the best of the Issuer's,
      or
      any of its Managers', knowledge),
      pending
      action, suit, proceeding or investigation, including, but not limited to, any
      such proceeding or investigation resulting from the ownership or use of any
      of
      the Collateral, against or affecting the Issuer or any Co-Issuer or the Support
      Fund before any administrative agency, arbitrator or governmental body or,
      to
      the best knowledge of the Issuer or any Co-Issuer or the Support Fund, any
      threatened action or proceeding, including, but not limited to, to any such
      proceeding or investigation resulting from the ownership or use of any of the
      Collateral, against or affecting the Issuer or any Co-Issuer or the Support
      Fund
      before any of the foregoing which, if decided adversely to the Issuer or any
      Co-Issuer or the Support Fund, would materially affect (i) the condition
      (financial or otherwise), business, properties, prospects, profits or operations
      of the Issuer or any Co-Issuer or the Support Fund (ii) the ability of the
      Issuer or any Co-Issuer to perform its obligations under, or the validity or
      enforceability of, any Transaction Document to which it is a party or (iii)
      the
      Agent’s ability to foreclose or otherwise enforce its interest in the Collateral
      as contemplated under this Security Agreement, except, in each case, as set
      forth in Schedule V hereto with respect to the Issuer and Schedule V to each
      Security Agreement Supplement with respect to a Co-Issuer or any Support Fund.
      Neither the Issuer nor any Co-Issuer nor the Support Fund is subject to, and
      has
      never been subject to (with respect to any Co-Issuer or any Support Fund, to
      the
      best of the Issuer's, or any of its Managers', knowledge), any order of any
      court, governmental authority or agency or arbitration board of
      tribunal.

     

    (t) No
      consent, approval, authorization, order of, or filing, registration, application
      with any court or other governmental authority in respect of the Issuer
      or
      any Co-Issuer
      is
      necessary or required under the law of the United States or any state within
      the
      United States (or other Covered Jurisdictions in the case of filings to perfect
      the Lien of the Security Agreement) in connection with the authorization,
      execution, delivery or performance by the Issuer or any Co-Issuer of this
      Security Agreement or any other Transaction Document to which it is a party
      or
      any of the other documents or transactions contemplated thereby, including
      without limitation, the pledge of the Collateral to the Agent, the servicing
      of
      the Collateral, or the offer, issue, sale, delivery or performance of the Notes,
      other than that consent, approval, authorization, order, filing, registration
      or
      qualification which has been, or will be promptly, made or obtained in the
      United States (or the other Covered Jurisdictions in the case of filings to
      perfect the Lien of the Security Agreement); provided
      that no
      representation is made with respect to filings of qualifications under the
“Blue
      Sky” laws of the various states within the United States.

     

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

     

    (u) None
      of
      the transactions contemplated herein (including the use of the proceeds from
      the
      sale of the Notes) will result in a violation of Section 7 of the Securities
      Exchange Act, or any regulations thereto, including, without limitation,
      Regulations T, U and X of the Board of Governors of the Federal Reserve System,
      12 C.F.R., Chapter II. Neither the Issuer nor any Co-Issuer owns or intends
      to
      carry or purchase, and no proceeds from the sale of the Notes will be used
      by
      the Issuer or any Co-Issuer to purchase, any “margin stock” within the meaning
      of said Regulation U.

     

    (v) Payments
      after the Closing Date.
      Other
      than the Obligor Rebate Amounts, no monies or other contingent compensation
      shall be payable by any of the Issuer or any Co-Issuer to any person, firm
      or
      corporation with respect to any exploitation of the Collateral which occurred
      prior to the date of this representation.

     

    (w) Advances.
      No
      advances or other charges received by any of the Issuer, any Co-Issuer or any
      Support Fund in connection with the Collateral remain recoupable at any time
      from and after the date hereof from any Collections earned at any time either
      before or after the date of this Security Agreement, other than Obligor Rebate
      Amounts and Franchise Fee Refunds.

     

    (x) Each
      Co-Issuer covenants and agrees that all Collections which it is entitled to
      receive shall be paid directly by the applicable Obligor to the appropriate
      Co-Issuer Collection Account or Co-Issuer Lockbox Account.

     

    (y) Neither
      the Issuer nor any Co-Issuer is a party to any contract or agreement, or subject
      to any charter or other legal restriction, which materially and adversely
      affects its business as contemplated in the Transaction Documents. No Co-Issuer
      has agreed to cause or permit in the future (upon the happening of a contingency
      or otherwise) any of its properties or any of the Collateral, other than as
      otherwise set forth in this Security Agreement, whether now owned or hereafter
      acquired, to be subject to a lien not permitted by this Security
      Agreement.

     

    (z) No
      Co-Issuer intends to treat the Notes and related transactions as being a
“reportable transaction” (within the meaning of Treasury Regulation Section
      1.6011-4). In the event the any Co-Issuer determines to take any action
      inconsistent with such intention, it will promptly notify the Noteholders
      hereof. If any Co-Issuer so notifies the Noteholders, such Co-Issuer
      acknowledges that one or more of the Noteholders may treat its Notes as part
      of
      a transaction that is subject to Treasury Regulations 301.6112-1, and that
      such
      Noteholder or Noteholders, as applicable, will maintain the lists and other
      records required by such Treasury Regulation.

     

    (aa) Neither
      the Issuer nor any Co-Issuer is (i) a country, territory, organization, person
      or entity name on an OFAC list; (ii) a Person that resides or has a place of
      business in a country or territory named on such lists or which is designated
      as
      a Non-Cooperative Jurisdiction by the Financial Action Task Force on Money
      Laundering (“FATF”),
      or
      whose subscription funds are transferred from or through such a jurisdiction;
      (iii) a “Foreign Shell Lender” within the meaning of the USA PATRIOT Act, i.e.,
      a foreign bank that does not have a physical presence in any country and that
      is
      not affiliated with a bank that has a physical presence and an acceptable level
      of regulation and supervision; or (iv) a person or entity that resides in or
      is
      organized under the laws of a jurisdiction designated by the United States
      Secretary of Treasury under Section 311 or 312 of the USA PATRIOT Act as
      warranting special measures due to money laundering.

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

     

    (bb) Corporate
      Structure.
      The
      Issuer is a wholly owned subsidiary of NexCen Brands, and each Co-Issuer and
      Support Fund is a wholly owned subsidiary of the Issuer. There are no
      corporations, partnerships, limited liability companies, joint ventures or
      other
      business entities in which the Issuer, any Co-Issuer or any Support Fund owns,
      of record or beneficially, a direct of indirect equity interest or any right,
      contingent or otherwise, to acquire the same.

     

    (cc) Subject
      to information contained in the financial statements delivered to the Agent,
      since the date of such delivery, there has not been any change, development,
      circumstance or effect that, individually or in the aggregate, has had, is
      having or could reasonably be expected to have (with the lapse of time, giving
      of notice or otherwise) a material adverse effect on the business, condition
      (financial or otherwise), liabilities, assets, operations or results of
      operations of the Issuer or any Co-Issuer or any Support Fund, individually
      or
      taken as a whole (“Material
      Adverse Effect”);
      provided,
      however,
      that
      for purposes of determining whether a Material Adverse Effect has occurred,
      any
      adverse change, development, circumstance or effect arising out of or relating
      to (i) any changes in general business or economic conditions or (ii) changes
      in
      the industry in which the Issuer or any Co-Issuer or any Support Fund operates
      which do not disproportionately impact the Issuer or any Co-Issuer or any
      Support Fund, will not be considered.

     

    (dd) The
      Issuer, each Co-Issuer and any Support Fund, as applicable, have good and
      marketable title to, or in the case of leased assets, valid leasehold interest
      in their respective items included in the Assets and all other tangible and
      intangible assets, used or that may be useful in, or otherwise relating to,
      the
      business of each Issuer, Co-Issuer or Support Fund, as applicable, free and
      clear of any Encumbrances.

     

    (ee) None
      of
      the Issuer, any Co-Issuer or any Support Fund owns any interest in real
      property.

     

    (ff) None
      of
      the Issuer, each of the Co-Issuers or any Support Fund, as applicable, is,
      and
      has never been (with respect to any Co-Issuer or any Support Fund, to the best
      of the Issuer's, or any of its Managers', knowledge), in violation of, any
      Law,
      regulation or order or any other requirement of any Governmental Authority
      applicable to such entity, to any of its respective assets or properties, or
      to
      the conduct of its respective business including any franchise or similar laws;
      and to the Issuer's, each of the Co-Issuers' or the Support Fund's, knowledge,
      as applicable, none of the Issuer, Co-Issuers or a Support Fund is, or has
      ever
      been (with respect to any Co-Issuer or any Support Fund, to the best of the
      Issuer's, or any of its Managers', knowledge), under investigation with respect
      to any violation of any Applicable Law, regulation, order or requirement
      relating to any of the foregoing in connection with its respective
      business.

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

     

    (gg) There
      does not currently exist, nor has there existed at any time since its respective
      formation (with respect to any Co-Issuer or any Support Fund, to the best of
      the
      Issuer's, or any of its Managers', knowledge), any threatened or actual dispute
      between the Issuer, each of the Co-Issuers and any Support Fund, as applicable,
      and any of its outside accountants, auditors or other financial
      advisors.

     

    (hh) None
      of
      the Issuer, nor, to the best of the Issuer's, or any of its Managers',
      knowledge, any of the Co-Issuers or any Support Fund, as applicable, or any
      of
      the officers, agents and Affiliates of the Issuer, any of the Co-Issuers or
      any
      Support Fund, as applicable, nor any Person acting on behalf of any of them,
      have made and illegal or improper payment to, or provided any illegal or
      improper benefit or inducement for, any governmental official, union official,
      supplier, customer, union or other Person, in an attempt to influence any such
      Person to take or to refrain from taking any action relating to the Issuer,
      any
      of the Co-Issuers or any Support Fund, as applicable, or the business of the
      Issuer, any of the Co-Issuers or any Support Fund, as applicable, or to engage
      in any action by or on behalf of any of them in any way or paid any bribe,
      payoff, influence payment, kickback or other unlawful payment. Neither the
      Issuer, any of the Co-Issuers nor any Support Fund, as applicable, or any of
      the
      officers, agents and Affiliates of the Issuer, and of the Co-Issuers or any
      Support Fund, as applicable, or any Person acting on behalf of any of them,
      have
      taken any action that violates the Foreign Corrupt Practices Act. The Issuer,
      each of the Co-Issuers or any Support Fund, as applicable, has at all times
      been
      in compliance with all Applicable Laws. To the Issuer’s knowledge, and to the
      best of the Issuer's, or any of its Managers', knowledge with respect to any
      of
      the Co-Issuers' or any Support Fund's knowledge, as applicable, none of them
      has, directly or indirectly, sold products to or performed any services on
      behalf of any country where such sale of products or provision of services
      is
      prohibited by OFCA, the Department of Treasury or other U.S. governmental
      authority.

     

    (ii) Attached
      hereto as Schedule
      II is
      a true
      and complete list of the name of each bank, savings and loan, or other financial
      institution in which the Issuer has an account, and the account numbers and
      names of all persons authorized to draw thereon or having access
      thereto.

     

    (jj) Set
      forth
      on Schedule III is a description of each of the contracts to which the Issuer
      is
      a party (the "Issuer's
      Material Contracts").
      The
      Issuer, each Co-Issuer and any Support Fund have made available to the Agent
      copies of each of the Material Contracts and all amendments thereto. No
      condition exists or has occurred which, with the giving of notice or the lapse
      of time, or both, would constitute a default or breach by (i) the Issuer, any
      Co-Issuer or any Support Fund, and (ii) to the Issuer's, any Co-Issuers' or
      any
      Support Fund’s knowledge, any counterparty to the Material Contracts. Each
      Material Contract is a valid and binding legal obligation of the Issuer,
      Co-Issuer or Support Fund, as applicable, in accordance with their terms, except
      that the enforceability of such contracts and agreements may be limited by
      (A)
      applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
      affecting creditors’ rights generally and (B) equitable principles which may
      limit the availability of certain equitable remedies (such as specific
      performance).

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        

      

    

     

    (kk) As
      of the
      applicable Funding Date, the Issuer, each of the Co-Issuers and any Support
      Fund, as applicable, has taken, or caused to be taken, all appropriate actions
      in accordance with all applicable requirements of Law with respect to the
      Licenses, and in accordance with the terms of the Licenses to ensure (i)
      ownership of the Licenses by the applicable Co-Issuer and (ii) that the
      consummation of the transactions contemplated hereby will not alter or impair
      any of the Licenses or the ability of each of the Co-Issuers and any Support
      Fund, as applicable, to continue to do business in the same way as prior to
      the
      Closing Date and the applicable Funding Date. Each of the Licenses are, and
      will
      remain, valid, legal and binding, and in full force and effect, following
      consummation of the transactions contemplated hereby.

     

    (ll) The
      factual assumptions identified in the opinion letter delivered by Baker &
McKenzie LLP on any Funding Date with respect to certain bankruptcy matters
      are
      true and accurate as of such date with respect to the Issuer and the Co-Issuer
      identified therein.

     

    (mm) The
      representations, warranties and statements of fact contained in this Security
      Agreement and the other Transaction Documents and each report, statement or
      other written information furnished by or on behalf of the Issuer, any Co-Issuer
      or any Support Fund, as applicable, to the Agent are true and correct in all
      material respects on or before the related Funding Date. To the Issuer's, any
      of
      the Co-Issuers' and any Support Fund's knowledge, as applicable, there is no
      fact that has specific application to any of them (other than general economic
      or industry conditions) and that could have a Material Adverse Effect on the
      business, assets, properties, liabilities, condition (financial or otherwise),
      operating results, operations or business prospects of the Issuer, any of the
      Co-Issuers or any Support Fund, as applicable, that has not been set forth
      in
      this Security Agreement or the Transaction Documents. This representation shall
      not be affected by any investigation made by or on behalf of the
      Agent.

     

    Section
      12.10 Certain
      Covenants

     

    (a) The
      Issuer and each Co-Issuer agree that any Person, designated in writing by the
      Agent may, upon reasonable prior written notice, consult with proper officials
      of the Issuer or such Co-Issuer at such times during normal business hours
      and
      as often as such Person may reasonably request regarding the performance of
      the
      Issuer’s and such Co-Issuer's covenants and agreements contained in this
      Security Agreement or any of the Transaction Documents to which they are a
      party.

     

    (b) The
      Issuer and each Co-Issuer will, and the Issuer shall cause each Co-Issuer and
      Support Fund to, comply in all material respects with all requirements of Law
      applicable to the Issuer, such Co-Issuer and Support Fund.

     

    (c) The
      Issuer agrees to furnish the Noteholders copies of each of the Transaction
      Documents and any documents to be furnished pursuant to the terms of the
      Transaction Documents and such other information and documents relating to
      the
      Notes and the Collateral as the Agent may reasonably request.

     

    (d) The
      Issuer and each Co-Issuer will pay or cause to be paid all present and future
      recording and filing fees, and all legal, financial and miscellaneous
      out-of-pocket expenses and costs incurred by the Issuer or such Co-Issuers,
      as
      the case may be, in connection with the negotiation of and consummation of
      the
      transactions contemplated by this Security Agreement and the issuance and sale
      of its Note. The Issuer and such Co-Issuers further agree that they will pay
      or
      cause to be paid, promptly upon demand,
      any
      reasonable out of pocket expense incurred by the Agent in connection with the
      making of amendment to, or the giving of any release, consent or waiver in
      respect of, this Security Agreement and any document executed pursuant hereto
      or
      thereto affecting its Note, including the reasonable fees and disbursements
      of
      counsel for the Noteholders in connection therewith. The obligations of the
      Issuer and such Co-Issuers under the preceding sentences shall be subject to
      the
      priority of distributions set forth in Section 14.1 hereof and shall survive
      the
      termination of this Security Agreement, the transfer of any Note or portion
      thereof or interest therein by a Noteholder and the payment of such
      Note.

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

     

    (e) Each
      Co-Issuer will promptly add to the Schedule of Assets attached as Schedule
      II to
      the related Security Agreement Supplement, a description of and required
      information pertaining to each separate and identifiable Asset in which such
      Co-Issuer has ownership rights but which was not listed thereon at a Funding
      Date (whether or not it was in existence on a Funding Date).

     

    (f) Each
      Co-Issuer will promptly following the acquisition of an Asset (or Release of
      an
      Asset) or upon the loss or sale of an Asset by such Co-Issuer, update the
      schedules and exhibits attached to the Transaction Documents, with copies to
      the
      Agent.

     

    (g) The
      Issuer, each Co-Issuer and each Support Fund will comply with the terms and
      provisions of its respective Organizational Documents and will not take any
      action which it is prohibited from taking under its respective Organizational
      Documents.

     

    (h) The
      Issuer and each Co-Issuer will maintain, or be a subject insured party under,
      insurance of the type that is customarily maintained by business entities of
      the
      same type and scale as the Issuer or such Co-Issuer, as the case may be. All
      such insurance is primary coverage and all premiums therefore due have been
      paid
      in full. Schedule
      I
      sets
      forth an accurate and complete list of all certificates of insurance, binders
      for insurance policies and insurance maintained by the Issuer or under which
      the
      Issuer is the beneficiary of coverage. The Issuer and each Co-Issuer shall
      (and
      shall cause each Support Fund to) maintain, or cause the Manager to maintain,
      with financially sound insurers with an S&P Credit Rating of not less than
“BBB-" and with a claims-paying ability rated not less than “A:VIII” by A.M.
      Best's Key Rating Guide, insurance coverages customary for business operations
      of the type conducted in respect to the transactions contemplated by the
      Transaction Documents and the Assets held or maintained by it. The Issuer and
      each Co-Issuer shall annually provide to the Agent evidence reasonably
      satisfactory to the Agent (which may be by covernote) that the insurance
      required to be maintained by each such Co-Issuer, the Issuer and each Support
      Fund hereunder is in full force and effect, by not later than December 31 of
      each calendar year. Each Co-Issuer and the Issuer shall notify provide written
      notice to the Agent within 5 Business Days of knowledge thereof, of any default,
      breach or condition which with the giving of notice or lapse of time, would
      constitute a default or breach, of any insurance policy.

     

    (i) For
      so
      long as any of the Notes remain Outstanding, neither the Issuer nor any
      Co-Issuer will (x) merge or consolidate with or into any other entity or engage
      in any other business combination with any other entity or (y) sell or transfer
      all or substantially all of its assets other than in conformity with the
      Transaction Documents.

     

    
      
        
        

      

      
        50

        
          

        

      

      
        
        

      

    

     

    (j) The
      Issuer and each Co-Issuer shall notify the Agent of any litigation in which
      the
      Issuer, such Co-Issuer or any Support Fund, as the case may be, is a party,
      promptly, but in any event no later than 3 Business Days, upon the Issuer’s or
      such Co-Issuer's receipt of notice of the filing of such litigation, in writing
      by delivery by a reputable courier service or by registered mail (return receipt
      requested), all charges prepaid.

     

    (k) The
      Issuer and each Co-Issuer shall execute and deliver to the Agent all such
      documents and instruments and do all such other acts and things as may be
      necessary or reasonably required by the Agent to enable the Agent to exercise
      and enforce their respective rights under the Transaction Documents, and record
      and file and rerecord and refile all such documents and instruments, at such
      time or times, in such manner and at such place or places, all as may be
      necessary or required by the Agent to validate, preserve, perfect and protect
      the position of the Agent under the Security Agreement provided no such action
      shall be inconsistent with the Security Agreement or contrary to instructions
      of
      the Agent.

     

    (l) The
      Issuer shall cause to be delivered to the Agent (i) within 45 days following
      the
      end of each fiscal quarter of the Issuer both (a) quarterly reports including
      a
      cash flow report of the Issuer, a certification of the Issuer that the Issuer
      and each Co-Issuer has complied with each covenant under this Agreement, as
      applicable, or approved by, the Agent, and (b) quarterly unaudited balance
      sheets, statements of income, retained earnings and a cash flow report of
      Issuer; (ii) within 90 days following the end of each fiscal year of the Issuer,
      annual audited consolidated balance sheets, statements of income, retained
      earnings and a cash flow report of the Issuer; (iii) annual confirmations of
      renewal of insurance policies and (iv) such other information regarding the
      Collateral and the Issuer or any Co-Issuer as the Agent may reasonably request.
      All financial reports required pursuant to this paragraph shall contain a
      schedule allocating by Co-Issuer the consolidated information of the
      Issuer.

     

    (m) The
      Support Fund shall continue to maintain, in accordance with sound business
      practices, books of account, minute books and other records of such entity
      which
      books shall reflect all limited liability company action taken by the directors,
      managers and members, of the Support Fund (including any action taken by consent
      without a meeting); and no such meeting, or limited liability company or
      corporate action will be taken for which such minutes or other appropriate
      record are not prepared and maintained in such minute books.

     

    (n) Each
      Co-Issuer shall, or shall cause the Manager to, notify the Agent in writing
      within thirty (30) Business Days if it knows that any material application
      or
      registration relating to any Asset (now or hereafter existing) has become
      abandoned, dedicated to the public domain, invalid or unenforceable, or of
      any
      adverse determination or development (including the institution of, or any
      such
      final determination or development in, any proceeding in the United States
      Patent and Trademark Office, the United States Copyright Office, similar offices
      or agencies in any foreign countries in which Assets are located or any court
      but excluding any non-final determinations of the United States Patent and
      Trademark Office or any similar office or agency in any such foreign country)
      regarding any Co-Issuer’s or any Support Fund’s ownership of any Assets, its
      right to register the same, or to keep and maintain the same.

     

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

     

    (o) If
      any
      Co-Issuer, or the Manager, either itself or through any agent, employee,
      licensee or designee, shall file an application for the registration of any
      Asset with the United States Patent and Trademark Office, the United States
      Copyright Office or any similar office or agency in any foreign country in
      which
      Assets are located, such Co-Issuer or Manager shall, by the end of the fiscal
      quarter in which such filing occurred, (i) give the Agent written notice thereof
      and (ii) upon request of the Agent, shall execute and deliver all instruments
      and documents, and take all further action, that the Agent may reasonably
      request in order to continue, perfect or protect the security interest granted
      hereunder in the United States or any foreign country.

     

    (p) In
      the
      event that any Asset is infringed upon, misappropriated or diluted by a third
      party in any material respect, the Co-Issuer shall present cause these findings
      to be presented in the Manager Report. The applicable Co-Issuer shall take
      all
      reasonable and appropriate actions, at its reasonable expense, to protect or
      enforce such Asset, including suing for infringement, misappropriation or
      dilution and for an injunction against such infringement, misappropriation
      or
      dilution; provided that the applicable Co-Issuer shall deliver written notice
      to
      the Agent of such determination and upon the Agent’s written request shall
      promptly provide, in reasonable detail, the basis for such
      determination.

     

    (q) The
      Issuer, each Co-Issuer and each Support Fund, as applicable, will, promptly
      following the acquisition of an Asset, terminate any existing management
      agreement, effective as of the applicable Funding Date, and shall enter into
      a
      new Management Agreement.

     

    (r) Each
      Co-Issuer shall take all appropriate actions in accordance with all applicable
      requirements of Law with respect to the Licenses, and in accordance with the
      terms of the Licenses, to ensure (i) the ownership of the Licenses by the
      applicable Co-Issuer and (ii) that the consummation of the transactions
      contemplated hereby will not alter or impair any of the Licenses or the ability
      of any Co-Issuers to continue to do business in the same way as prior to the
      applicable Funding Date.

     

    (s) Each
      of
      the Co-Issuers agrees that they shall (and shall cause the Manager to) (w)
      maintain their rights in and to the Assets, including all applicable
      registrations and applications, in all material respects, (w) with respect
      to
      application or registration and shall, to the extent required by applicable
      law,
      diligently prosecute each application for trademark registration and maintain
      registrations of such Trademarks, including, to the extent required by
      applicable law, timely paying necessary examination, maintenance and renewal
      fees, (x) use, and ensure that all licensed users of the Assets use, proper
      statutory notice in connection with its use of each item of Intellectual
      Property of its portion of the Assets, including maintaining the quality of
      any
      and all products or services used or provided in connection with any of the
      Trademarks included in the Assets, consistent with the quality of the products
      and services as the applicable Funding Date, and taking all steps necessary
      to
      ensure that all licensed users of any of such Trademarks use such consistent
      standards of quality and (z) not do any act, or omit to do any act, whereby
      any
      portion of the Assets may expire prematurely or become abandoned or
      invalid.

     

    (t) Neither
      the Issuer nor the applicable Co-Issuer shall take any action which shall cause
      the factual assumptions identified in the opinion letter delivered by Baker
      & McKenzie on any Funding Date with respect to certain bankruptcy matters to
      no longer be true and accurate with respect to the Issuer and the Co-Issuer
      identified therein.

     

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

     

    Section
      12.11 Submission
      to Jurisdiction

     

    THE
      VENUE FOR ANY AMOUNT, SUIT OR PROCEEDING ARISING FROM OR BASED UPON THIS
      SECURITY AGREEMENT SHALL BE THE APPROPRIATE STATE AND FEDERAL COURTS LOCATED
      IN
      THE COUNTY OF NEW YORK IN THE STATE OF NEW YORK. ACCORDINGLY, THE ISSUER AND
      EACH CO-ISSUER AGREE THAT ANY ACTION, SUIT OR PROCEEDING ARISING FROM OR BASED
      ON THIS SECURITY AGREEMENT SHALL BE COMMENCED IN AND DETERMINED BY THOSE
      APPROPRIATE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK IN THE
      STATE OF NEW YORK; THE PARTIES HEREBY WAIVE ANY OBJECTION TO THE PROPRIETY
      OR
      CONVENIENCE OF VENUE IN SUCH COURTS OR TO THE JURISDICTION OF THE COURTS OVER
      ANY PARTY AND AGREE THAT ANY JUDGMENT ENTERED THEREIN MAY BE ENFORCED WITH
      NO
      FURTHER DEFENSE OR OFFSET IN ANY JURISDICTION IN WHICH THE DEFENDANT IS A
      CITIZEN, RESIDES OR OWNS PROPERTY.

     

    Section
      12.12 Representations
      with Respect to Assets. 

     

    On
      and as
      of each date on which an Asset becomes subject to the Lien of this Security
      Agreement, the applicable Co-Issuer represents with respect to such Asset which
      such Co-Issuer pledges to the Agent hereunder, that:

     

    (a) No
      Defaults.
      The
      execution and implementation of this Security Agreement shall not result in
      the
      breach of any conditions or constitute a default (with or without notice or
      the
      lapse of time, or both) under any license or agreement constituting a portion
      of
      the Assets pledged hereunder or to which any of the Assets pledged hereunder
      is
      subject. Neither the applicable Co-Issuer nor, to its knowledge, any person,
      firm or corporation associated with or deriving rights through or from such
      Co-Issuer, is in breach or is in default of any applicable agreement
      constituting a portion of the Assets which such Co-Issuer pledges to the Agent
      or to which any of such Assets are subject on the applicable Funding
      Date.

     

    (b) Non-Contravention.
      Neither
      the applicable Co-Issuer’s exercise of any of the rights, licenses, privileges
      and properties regarding the Assets pledged hereunder nor such Co-Issuer’s
      right, title and interest in and to the Assets pledged by it hereunder will
      violate or infringe on any common law or statutory rights of any person, firm
      or
      corporation, except such violations or infringements outside the First Stage
      Covered Jurisdictions as would not have a material adverse effect on the
      business of such Co-Issuer.

     

    (c) Exhibits
      and Schedules Accurate.
      All of
      the information set forth in the exhibits and schedules attached to the
      applicable Security Agreement Supplement and the Standard Definitions is
      complete and accurate in all material respects. The information supplied in
      writing by, or on behalf of, the Issuer or the applicable Co-Issuer in
      connection with the transactions contemplated by this Security Agreement, in
      each case as of each Funding Date or on a future date on which an Asset becomes
      subject to the Lien of this Security Agreement, as the case may be, are true
      and
      correct.

     

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

     

    (d) Ownership
      of the Assets.
      

     

    
      	 	
              (i)

            	
              Schedule
                II to
                each Security Agreement Supplement contains a true and complete list
                of
                all Trademarks, Other Intellectual Property and registrations and
                pending
                applications for the Trademarks in the First Stage Covered Jurisdictions
                owned by the applicable Co-Issuer, with the exception of intent-to-use
                applications filed within the United States, all of which registrations
                exist, are subsisting and are validly registered except as provided
                therein and all of which applications are validly pending. Schedule
                II
                to
                each Security Agreement Supplement contains a true and complete list
                of
                all registrations and pending applications in the Second Stage Covered
                Jurisdictions. All of the Trademarks set forth in Schedule
                II
                to
                each Security Agreement Supplement, except to the extent otherwise
                provided therein, are currently in use on the goods set forth in
                the
                registrations for Trademarks in the First Stage Covered
                Jurisdictions.

            


    

     

    
      	 	
              (ii)

            	
              Notwithstanding
                anything contained in Schedule
                II
                to
                each Security Agreement Supplement, (i) the applicable Co-Issuer
                owns all
                right, title and interest in and to the Trademarks for use in the
                First
                Stage Covered Jurisdictions and Second Stage Jurisdictions; (ii)
                the
                applicable Co-Issuer has the full and exclusive right, subject to
                the
                related Licenses, to use and to license the use of the Trademarks
                in the
                First Stage Covered Jurisdictions and Second Stage Jurisdictions;
                and
                (iii) the consummation of the transactions contemplated by the Transaction
                Documents will not alter or impair any of the foregoing such rights.
                The
                use by the applicable Co-Issuer in the First Stage Covered Jurisdictions
                and Second Stage Jurisdictions of the Trademarks will not infringe
                on the
                rights of any Person, except such infringements outside the First
                Stage
                Covered Jurisdictions and Second Stage Jurisdictions as would not
                have a
                material adverse effect on the business of the applicable Co-Issuer.
                

            


    

     

    
      	 	
              (iii)

            	
              Except
                as provided in Schedule
                II,
                no claim has been asserted against the applicable Co-Issuer or any
                Affiliate thereof by any Person to the use of, and the applicable
                Co-Issuer has no knowledge of the use by any person (other than the
                licensees under the Licenses) of, any of the Trademarks in the First
                Stage
                Covered Jurisdictions and Second Stage Jurisdictions, and there is
                no
                valid basis for such claim with respect to the Trademarks or for
                any
                person (other than the licensees under the Licenses) to use any of
                the
                Trademarks in the First Stage Covered Jurisdictions and Second Stage
                Jurisdictions, except such claims or uses outside the First Stage
                Covered
                Jurisdictions and Second Stage Jurisdictions as would not have a
                material
                adverse effect on the business of the applicable Co-Issuer.
                

            


    

     

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (iv)

            	
              Each
                of the Trademarks is valid, subsisting and enforceable in the First
                Stage
                Covered Jurisdictions and Second Stage Jurisdictions, with the exception
                of such Trademarks the lack of enforceability of which outside the
                First
                Stage Covered Jurisdictions and Second Stage Jurisdictions would
                not have
                a material adverse effect on the business of the applicable Co-Issuer.
                There is vested in the applicable Co-Issuer title to the Trademarks
                and
                related Trademarks for use in the First Stage Covered Jurisdictions
                and
                Second Stage Jurisdictions, free and clear of all Liens (other than
                such
                Liens with respect to the Licenses and the Lien created
                hereby.

            


    

     

    
      	 	
              (v)

            	
              The
                trademarks set forth in Schedule
                II
                to
                each Security Agreement Supplement constitute all of the trademark
                rights
                necessary for the applicable Co-Issuer to conduct its business as
                currently and as proposed to be
                conducted.

            


    

     

    
      	 	
              (vi)

            	
              All
                required consents, assignment and/or assumption agreements or notices,
                if
                any, have been obtained or delivered in the manner required by each
                Trademark. 

            


    

     

    (e) Additional
      Representations with Respect to the Licenses.
      

     

    
      	 	
              (i)

            	
              Schedule
                II
                to
                each Security Agreement Supplement lists all Licenses and other agreements
                relating to the use of any of the Trademarks, respectively, in the
                Territory. All of the Licenses are payable in U.S. Dollars and valid
                and
                in full force and effect, except as set forth in Schedule
                II
                to
                each Security Agreement Supplement, and, to the best knowledge of
                the
                applicable Co-Issuer, there are no existing defaults (or events that,
                with
                notice or lapse of time or both, would constitute a default) by any
                party
                thereunder. No claim has been asserted by any Person challenging
                or
                questioning the validity or effectiveness of any of the Licenses
                and, to
                the best knowledge of the applicable Co-Issuer, there is no valid
                basis
                for any such claim. The applicable Co-Issuer has not, other than
                pursuant
                to the Licenses, licensed or authorized any other Person to use the
                Trademarks, or granted to any other Person any other right with respect
                thereto. Except for the Licenses, no agreement to which the applicable
                Co-Issuer is a party or by which its assets are bound restricts or
                in any
                way affects the Trademarks or the right to use thereof. There is
                vested in
                the applicable Co-Issuer title to all of the Licenses free and clear
                of
                all Liens (other than such liens with respect to the Licenses and
                such
                Liens as may arise from actions or inactions of the applicable
                Co-Issuer).

            


    

     

    
      
        
        

      

      
        55

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (ii)

            	
              All
                required consents, assignment and/or assumption agreements or notices,
                if
                any, have been obtained or delivered in the manner required by each
                License. 

            


    

     

    Section
      12.13 Indemnity

     

    Without
      limiting any other rights which any such Person may have hereunder or under
      applicable Law, the Issuer and each Co-Issuer hereby agrees to indemnify and
      hold harmless each Indemnified Party forthwith on not less than ten (10)
      Business Days prior written notice, from and against any and all damages,
      losses, claims, liabilities and related costs and expenses, including attorneys’
fees and disbursements (all of the foregoing being collectively referred to
      as
“Indemnified
      Amounts”)
      arising out of, relating to or in connection with the Transaction Documents,
      the
      transactions contemplated thereby, or the ownership, maintenance or funding,
      directly or indirectly, of the Collateral (or any part thereof) or otherwise
      in
      respect of or related to any Collateral, the security interest or other interest
      therein created by this Security Agreement, or otherwise arising out of or
      relating to the actions or failure to act of the Issuer, any Co-Issuer, any
      Support Fund or any Manager, excluding,
      however,
      notwithstanding anything to the contrary in this Section 12.13, Indemnified
      Amounts to the extent determined by a court of competent jurisdiction to have
      resulted solely from the gross negligence or willful misconduct on the part
      of
      such Indemnified Party. Without limiting the foregoing, the Issuer and each
      Co-Issuer, shall indemnify each Indemnified Party for any and all Indemnified
      Amounts arising out of or relating to:

     

    
      	 	
              (i)

            	
              the
                transfer by the Issuer or any Co-issuer of any interest in any Collateral
                other than pursuant to this
                Agreement;

            


    

     

    
      	 	
              (ii)

            	
              any
                representation or warranty made by the Issuer or any Co-Issuer which
                shall
                have been false, incorrect or materially misleading when made or
                deemed
                made;

            


    

     

    
      	 	
              (iii)

            	
              the
                failure of the Issuer or any Co-Issuer to comply with the terms of
                any
                Transaction Document to which they are parties or any Law (including
                with
                respect to any Collateral);

            


    

     

    
      	 	
              (iv)

            	
              the
                lack of an enforceable ownership interest, or a first priority perfected
                Lien in agreed upon jurisdictions, in the Collateral in favor of
                the
                Secured Party against all other Persons (including any U.S. bankruptcy
                trustee or similar Person);

            


    

     

    
      	 	
              (v)

            	
              the
                failure to file, or any delay in filing, of financing statements
                or other
                similar instruments or documents under the UCC of any applicable
                jurisdiction or under any other applicable Law with respect to any
                Collateral, whether at the time of any purchase or at any time
                thereafter;

            


    

     

    
      
        
        

      

      
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              (vi)

            	
              any
                commingling of any Collections by the Issuer, any Co-Issuer or any
                Manager
                relating to the Collateral with any of their funds or the funds of
                any
                other Person;

            


    

     

    
      	 	
              (vii)

            	
              any
                failure by the Issuer or any Co-Issuer to perform its duties or
                obligations in accordance with the provisions of the Transaction
                Documents.

            


    

     

    Section
      12.14 Yield
      Protection

     

    (a) If
      any
      Regulatory Change enacted after the date hereof:

     

    
      	 	
              (i)

            	
              shall
                subject an Indemnified Party to any tax, duty or other charge with
                respect
                to any Asset or Collateral funded by it (or its participation in
                any of
                the foregoing), or right to fund Borrowings or to provide funding
                or
                maintenance therefor (or its participation in any of the foregoing),
                or
                shall change the basis of taxation of payments to the Indemnified
                Party,
                owed to, funded or maintained in whole or in part by it (or its
                participation in any of the foregoing) or any other amounts due under
                this
                Agreement or the other Transaction Documents in respect of the Asset
                interest owned, maintained or funded by it or its obligations or
                rights,
                if any to fund or participate in Borrowings or to provide funding
                therefor
                or the maintenance thereof, in each case, other than Excluded
                Taxes;

            


    

     

    
      	 	
              (ii)

            	
              shall
                impose, modify or deem applicable any reserve, special deposit or
                similar
                requirement against assets of any Indemnified Party or with or for
                the
                account of any Affiliate (or entity deemed by the Federal Reserve
                Board or
                other Governmental Authority to be an affiliate) of any Indemnified
                Party,
                or credit extended by any Indemnified Party to the Issuer or any
                Co-Issuer;

            


    

     

    
      	 	
              (iii)

            	
              shall
                impose any other condition affecting any Asset or Collateral funded
                (or
                participated in) in whole or in part by any Indemnified Party, or
                its
                rights, if any, to fund (or participate in) Borrowings or to provide
                (or
                to participate in) funding therefor or the maintenance thereof;
                or

            


    

     

    
      	 	
              (iv)

            	
              shall
                change the rate for, or the manner in which the Federal Deposit Insurance
                Corporation (or a successor thereto) or similar Person assesses deposit
                insurance premiums or similar
                charges;

            


    

     

    and
      the
      result of any of the foregoing is or would be, in each case, as determined
      by
      Agent or the applicable Indemnified Party:

     

    
      	 	
              (A)

            	
              to
                increase the cost to (or impose a cost on) (1) an Indemnified Party
                funding or maintaining any Borrowings hereunder or any purchases,
                reinvestments or loans or other extensions of credit under any Liquidity
                Agreement, any Enhancement Agreement or any commitment hereunder
                (or under
                any Liquidity Agreement or any Enhancement Agreement) in connection
                with
                Borrowings hereunder of such Indemnified Party with respect to any
                of the
                foregoing, or (2) the Program Administrator or the Agent for continuing
                its relationship with the Lender,

            


    

     

    
      
        
        

      

      
        57

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (B)

            	
              to
                reduce the amount of any sum received or receivable by an Indemnified
                Party under this Agreement, any Liquidity Agreement or any Enhancement
                Agreement (or its participation in any such Liquidity Agreement or
                Enhancement Agreement) with respect hereto,
                or

            


    

     

    
      	 	
              (C)

            	
              to
                reduce the rate of return on the capital of such Indemnified Party
                as a
                consequence of its obligations hereunder, under any Liquidity Agreement
                or
                under any Enhancement Agreement (or its participation in any such
                Liquidity Agreement or Enhancement Agreement related hereto), including
                its funding or maintenance of a Borrowing, or arising in connection
                herewith (or therewith) to a level below that which such Indemnified
                Party
                could otherwise have achieved hereunder or
                thereunder,

            


    

     

    then,
      subject to the provisions of paragraph (b) below, the Issuer and each Co-Issuer
      shall pay directly to such Indemnified Party such additional amount or amounts
      as will compensate such Indemnified Party for such additional or increased
      cost
      or such reduction.

     

    (b) Each
      Indemnified Party, as applicable, shall promptly (and in any event by the later
      of (i) 30 Business Days before the commencement of accrual of any amounts to
      be
      paid by the Issuer or any Co-Issuer under this Section or Section
      12.16
      and (ii)
      the date on which an officer responsible for the transaction hereunder of the
      Agent or the requesting Indemnified Party has actual knowledge of an increased
      cost resulting from such Regulatory Change or Imposition (as defined in
Section
      12.16
      herein))
      notify the Issuer and Agent of any event of which it has knowledge which will
      entitle such Indemnified Party to compensation pursuant to this Section
      12.14
      or
      pursuant to Section
      12.16,
      provided
      that no
      failure to give or delay in giving such notification shall adversely affect
      the
      rights of any Indemnified Party to such compensation, except to the extent
      such
      delay in giving notice has resulted in an increase in the amount of compensation
      which would otherwise have been payable had timely notice been
      delivered.

     

    (c) In
      determining any amount provided for or referred to in this Section
      12.14,
      an
      Indemnified Party may use any reasonable averaging and attribution methods
      that
      it shall deem applicable. Any Indemnified Party when making a claim under this
      Section
      12.14
      shall
      submit to the Issuer a statement as to such increased cost or reduced return
      in
      reasonable detail, which statement shall in the absence of manifest error,
      be
      conclusive and binding upon the Issuer and each Co-Issuer.

     

    
      
        
        

      

      
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    Section
      12.15 Funding
      Losses.

     

    If
      any
      Indemnified Party incurs any loss or expense (including any loss or expense
      incurred by reason of the liquidation or reemployment of deposits or other
      funds
      acquired by such Indemnified Party), at any time, as a result of any repayment
      of any Note on a date other than on a Payment Date then, upon written notice
      from the Agent to the Issuer setting forth in reasonable detail the amount
      of,
      and reason for, such loss or expense, the Issuer shall pay to the Agent for
      the
      account of the applicable Indemnified Parties, on the next Payment Date (or
      during the existence of any Funding Termination Event or upon the occurrence
      of
      a Manager Qualification Event, within ten (10) Business Days), the amount of
      such loss or expense. Such written notice shall, in the absence of manifest
      error, be conclusive and binding upon the Issuer and each Co-Issuer. If an
      Indemnified Party incurs any loss or expense incurred by reason of the
      liquidation or reemployment of deposits or other funds acquired by such
      Indemnified Party), at any time, and is not entitled to reimbursement for such
      loss or expense in the manner set forth above, such Indemnified Party shall
      individually bear such loss or expense without recourse to, or payment from,
      any
      other Indemnified Party.

     

    Section
      12.16 Taxes.

     

    All
      payments and distributions made hereunder by the Issuer or any Co-Issuer (each,
      a “payor”)
      to the
      Lender, any Noteholder, the Agent or another Indemnified Party (each, a
“recipient”)
      shall
      be made free and clear of any without deduction for any present or future
      income, excise, stamp or franchise taxes and any other taxes, fees, duties,
      withholdings or other charges of any nature whatsoever imposed by any taxing
      authority on any recipient (or to an assignee of such parties) (“Impositions”),
      but
      excluding franchise taxes and taxes imposed on or measured by the recipient’s
      net income or gross receipts (“Excluded
      Taxes”
and
      Impositions exclusive of Excluded Taxes, “Taxes”).
      The
      Lender, each Noteholder (upon becoming a Noteholder) the Agent, each Indemnified
      Party and the assignee(s), immediately after becoming an Indemnified Party
      hereunder, of any of such parties are hereby deemed to represent that no such
      Taxes would be payable under this Security Agreement immediately after the
      Closing Date or immediately after the related assignment, as applicable. In
      the
      event that any withholding or deduction from any payment made by the payor
      hereunder is required in respect of any Taxes, then such payor shall and shall
      pay directly to the relevant authority the full amount required to be so
      withheld or deducted, and shall

     

    (a) promptly
      forward to the Agent an official receipt or other documentation reasonably
      satisfactory to the Agent evidencing such payment to such authority;
      or

     

    (b) pay
      to
      the recipient such additional amount or amounts as is necessary to ensure that
      the net amount actually received by the recipient will equal the full amount
      such recipient would have received had no such withholding or deduction been
      required.

     

    Moreover,
      if any Taxes are directly asserted against any recipient with respect to any
      payment received by such recipient hereunder, the recipient may pay such Taxes
      and the payor will promptly pay such additional amounts as shall be necessary
      in
      order that the net amount received by the recipient after the payment of such
      Taxes (including any Taxes on such additional amount) shall equal the amount
      such recipient would have received had such Taxes not been
      asserted.

     

    
      
        
        

      

      
        59

        
          

        

      

      
        
        

      

    

     

    If
      the
      payor fails to pay any Taxes when due to the appropriate taxing authority after
      having received not less than ten (10) Business Days prior written notice from
      the recipient of the levy of such Taxes, the payor shall indemnify the recipient
      for any incremental Taxes, interest, or penalties that may become payable by
      any
      recipient as a result of any such failure.

     

    ARTICLE
      XIII.

     

    ACCOUNTS,
      ACCOUNTINGS AND RELEASES

     

    Section
      13.1 Collection
      of Money

     

    Each
      Co-Issuer shall direct that all Collections (other than amounts to be deposited
      to a related Co-Issuer Prepaid Royalty Account or a related Co-Issuer Priority
      and Non-Distributable Amounts Account) deposited into such Co-Issuer Collection
      Accounts are withdrawn on a daily basis and are paid directly to the Issuer
      Collection Account. The Issuer shall deposit all other revenue it may receive
      into the Issuer Collection Account within two (2) Business Days after the
      receipt of such funds. Pending deposit of such funds into the Issuer Collection
      Account, such funds will be deemed to be held in trust by the Issuer for the
      benefit of the Agent.

     

    Section
      13.2 Issuer
      Collection Account

     

    The
      Issuer shall establish with Wilmington Trust Company and Wilmington Trust
      Company shall maintain a segregated trust account (the “Issuer
      Collection Account”)
      which
      shall be in the name of the Issuer and be subject to a blocked account agreement
      in favor of the Agent “as secured party on behalf of the Holders of the NexCen
      Acquisition Notes,” and which shall be in an Eligible Financial Institution, for
      the receipt of, and there shall be deposited into the Issuer Collection Account,
      payments to be deposited therein as provided herein. If the bank with which
      the
      Issuer Collection Account is maintained ceases to be an Eligible Financial
      Institution, the Issuer shall transfer the Issuer Collection Account to an
      account maintained with an Eligible Financial Institution selected by the Issuer
      and approved by the Agent (unless an Event of Default shall have occurred and
      not been waived, in which case, such Eligible Financial Institution shall be
      selected by the Agent). The Issuer Collection Account shall relate solely to
      the
      transactions contemplated in this Security Agreement, and funds in such account
      shall not be commingled with any other monies. Funds on deposit in the Issuer
      Collection Account shall be invested in Eligible Investments at the written
      direction of the Issuer. The maximum permissible maturity or, if applicable,
      the
      latest redemption date of any Eligible Investments made with amounts on deposit
      in the Issuer Collection Account shall be not later than the Business Day
      preceding the next succeeding Payment Date or a Redemption Date, as applicable.
      All monies deposited from time to time in the Issuer Collection Account pursuant
      to this Security Agreement shall be part of the related Collateral as herein
      provided, and shall include all fees received by the Issuer under the Advisory
      Agreement and all moneys transferred from each Co-Issuer Collection Account
      pursuant to Section 3.1.1 of each Security Agreement Supplement. Monies in
      the
      Issuer Collection Account shall be subject to withdrawals pursuant to this
      Security Agreement, including Section 14.1 and Section 11.3 of this Security
      Agreement.

     

    
      
        
        

      

      
        60

        
          

        

      

      
        
        

      

    

     

    Unless
      a
      Default or an Event of Default has occurred and is continuing, the Agent shall
      not send any notice to Wilmington Trust Company which, under the terms of the
      related blocked account agreement, shall give the Agent exclusive control over
      the related accounts. 

     

    Section
      13.3 Release
      of Assets

     

    (a) If
      at any
      time the Issuer, any Co-Issuer, the Manager or the Agent has actual knowledge
      that a Release Event with respect to any particular Asset has occurred, the
      party discovering such event shall notify the other parties.

     

    (b) Upon
      receipt of notification or upon actual knowledge of a Release Event described
      in
      clause (a) of this Section 13.3, and if the Asset DSCR Test is not
      met, the applicable Co-Issuer shall exercise commercially reasonable efforts
      to
      eliminate or otherwise cure such Release Event. If the Asset DSCR Test would
      be
      met, then the Asset with respect to which a Release Event has occurred may
      be
      released from the Lien of this Security Agreement at any time upon request
      of
      the applicable Co-Issuer upon payment by the related Co-Issuers of the Release
      Price; provided that, immediately after such release, such Asset shall be
      disposed of by the applicable Co-Issuer to an entity other than the Issuer,
      any
      Manager or any other Co-Issuer.

     

    (c) If
      such
      Co-Issuer fails or is unable to eliminate or cure the Release Event within
      fifteen (15) days after the earlier of the date on which such Co-Issuer has
      actual knowledge of such event or the date on which written notice, specifying
      in reasonable detail, such event and requiring it to be remedied shall have
      been
      given to such Co-Issuer; provided that such Co-Issuer shall have an additional
      45 days if such event is susceptible of being cured, then such Co-Issuer shall
      pay the Release Price of the affected Asset on the Business Day next preceding
      the Redemption Date next following the expiration of such 60 day period. The
      Release Price for the release of the affected Asset shall be deposited in the
      Issuer Collection Account and shall be applied to the redemption of its Note
      on
      such Redemption Date in accordance with Section 11.1 of this Security Agreement.
      The applicable Co-Issuer's obligation to pay any Release Price shall be limited
      to funds available therefor under this Security Agreement.

     

    (d) So
      long
      as no Funding Termination Event would be triggered thereby, the applicable
      Co-Issuer may, at its option, obtain a release of its Asset(s) from the Lien
      of
      this Security Agreement by providing at least 30 days’ prior written notice (the
“Co-Issuer’s
      Notice”)
      to the
      Agent setting forth (i) the Asset(s) to be released, (ii) the Redemption Date
      on
      which such Asset(s) will be released and (iii) an estimate of the Release Price
      to be deposited on the Redemption Date specified in such notice. Upon payment
      to
      the Issuer Collection Account of the Release Price of such Asset(s) (which
      shall
      also be the Redemption Price for the Notes) and completion of the related
      redemption, the Asset(s) specified in the Co-Issuer’s Notice shall be released
      from the Lien of this Security Agreement if the Asset DSCR Test is met, provided
      that immediately after such release, such Asset(s) shall be disposed of by
      the
      applicable Co-Issuer to an entity other than the Issuer, any Manager or any
      other Co-Issuer. The Release Price for the release of such Asset(s) shall be
      applied to the redemption of such Co-Issuer’s Note on such Redemption Date in
      accordance with Section 11.1 of this Security Agreement.

     

    
      
        
        

      

      
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    Section
      13.4 Release
      of Collateral

     

    (a) The
      Agent
      may, and when required by the provisions of Articles XI and XIII of this
      Security Agreement shall, at the expense of the Issuers, execute instruments
      supplied to it by the Issuers, to release property from the Lien of this
      Security Agreement, or convey the Agent’s interest in the same, in a manner and
      under circumstances which are not in violation of the provisions of this
      Security Agreement. No party relying upon an instrument executed by the Agent
      as
      provided in this Article XII 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.

     

    (b) At
      the
      written request and expense of the Issuer and the applicable Co-Issuers and
      upon
      being supplied by the Issuer and such Co-Issuers with appropriate forms
      therefor, the Agent shall, at such time as all amounts due under this Security
      Agreement in connection with a full or partial redemption of such Note
      Co-Issuers’ Note pursuant to Section 11.1, 11.2 or 13.3 of this Security
      Agreement have been paid and if such Co-Issuers are entitled to have the Lien
      of
      this Security Agreement discharged as to such Co-Issuers’ Assets in accordance
      with said sections, (i) release the Assets or applicable portion thereof of
      such
      Co-Issuers from the Lien of this Security Agreement and promptly deliver all
      Assets or applicable portion thereof of such Co-Issuers held by it to such
      Co-Issuers; provided that immediately after such release, such Asset(s) shall
      be
      disposed of by the applicable Co-Issuer to an entity other than the Issuer,
      any
      Manager or any other Co-Issuer, and (ii) in the case of a redemption in full
      of
      such Co-Issuers' Note, release the Lien of this Security Agreement in the equity
      interests in such Co-Issuers pledged by the Issuer hereunder and the equity
      interest in any related entity with a purpose substantially similar to the
      Support Fund; provided that immediately after such release, such Asset(s) shall
      be disposed of by the applicable Co-Issuer to an entity other than the Issuer,
      any Manager or any other Co-Issuer; and provided further, that the total Value
      of the remaining Assets exceeds the Borrowing Base.

     

    ARTICLE
      XIV.


     

    APPLICATION
      OF MONIES

     

    Section
      14.1 Disbursements
      of Monies out of the Issuer Collection Account

     

    (a) On
      each
      Payment Date, prior to a Deal Rapid Amortization Event, Wilmington Trust
      Company, shall, pursuant to the Manager Report (or if one is not timely
      provided, then at the direction of the Agent), withdraw funds from the Issuer
      Collection Account, and pay the following amounts from such funds in the
      following order of priority, in all cases to the extent of the Distributable
      Cash in the Issuer Collection Account on such Payment Date:

     

    
      	 	
              (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;

            


    

     

    
      
        
        

      

      
        62

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (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 for distribution to the Noteholders, payment of all indemnity
                payments and reasonable out-of-pocket 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 Agent for distribution 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 Note Interest
                Rate, but only to the extent that payment of such interest on interest
                shall be legally enforceable;

            


    

     

    
      	 	
              (v)

            	
              to
                the Agent for distribution to the Noteholders, the Note Principal
                Payment
                for such Payment Date in reduction of the Note Principal Balance
                of the
                Notes; provided that,
                if
                a Note Co-Issuer Rapid Amortization Event has occurred, all remaining
                Distributable Cash allocable to such Note Co-Issuer shall be distributed
                to the Noteholders until the Outstanding Note Balance of such Note
                Co-Issuer's Note has been paid in
                full;

            


    

     

    
      	 	
              (vi)

            	
              to
                the Issuer, payment of all reasonable costs and expenses incurred
                by any
                Co-Issuer, including legal expenses in connection with the enforcement
                of
                its rights directly incurred by any such
                Co-Issuer;

            


    

     

    
      	 	
              (vii)

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

            


    

     

    
      	 	
              (viii)

            	
              to
                each Indemnified Party, pro rata, any Secured Obligations (not otherwise
                provided for specifically above) owed to
                it;

            


    

     

    
      	 	
              (ix)

            	
              to
                the Issuer, the fee due it pursuant to the Advisory
                Agreement;

            


    

     

    
      	 	
              (x)

            	
              to
                the Manager, the Incentive Manager Fee in an amount equal to the
                sum of
                (1) 50% of the first $500,000 and (2) 75% of each $1.00 above $500,000
                of
                Distributable Cash available after the distributions are made pursuant
                to
                clauses (i)-(ix) above, plus any amount to which the Manager is entitled
                pursuant to the provisions of Section
                2.2
                of
                the applicable Management Agreement;


            


    

     

    
      
        
        

      

      
        63

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (xi)

            	
              to
                the Manager, an amount sufficient to reimburse the Manager for any
                advertising expenses incurred by it on behalf of a Co-Issuer and
                not
                previously reimbursed hereunder; 

            


    

     

    
      	 	
              (xii)

            	
              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

            


    

     

    
      	 	
              (xiii)

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

            


    

     

    (b) On
      each
      Redemption Date, prior to a Deal Rapid Amortization Event, Wilmington Trust
      Company shall withdraw from the Issuer Collection Account an amount equal to
      the
      Redemption Price and pay such amount to the Agent for distribution to the
      Noteholders.

     

    (c) The
      foregoing provisions of this Section 14.1 notwithstanding, any monies deposited
      in the Issuer Collection Account for purposes of redeeming Notes pursuant to
      Article XI shall, subject to Section 12.1, remain in the Issuer Collection
      Account until paid for the purpose of such redemption.

     

    (d) On
      each
      Payment Date, subsequent to a Deal Rapid Amortization Event, Wilmington Trust
      Company, shall, upon direction of the Agent withdraw funds from the Issuer
      Collection Account and pay the following amounts from such funds in the
      following order of priority in all cases to the extent of the remaining
      Distributable Cash in the Issuer Collection Account on such Payment
      Date:

     

    
      	 	
              (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 for distribution to 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 Agent for distribution 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 Note Interest
                Rate, but only to the extent that payment of such interest on interest
                shall be legally enforceable;

            


    

     

    
      
        
        

      

      
        64

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (v)

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

            


    

     

    
      	 	
              (vi)

            	
              to
                the Agent for distribution to the Noteholders, all remaining Distributable
                Cash until the Outstanding Note Balance has 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 (not otherwise
                provided for specifically above) owed to
                it;

            


    

     

    
      	 	
              (ix)

            	
              to
                the Issuer, payment of all reasonable costs and expenses incurred
                by any
                Co-Issuer relating to legal expenses in connection with the enforcement
                of
                its rights directly incurred by such
                Co-Issuer;

            


    

     

    
      	 	
              (x)

            	
              to
                the Issuer, the fee due it pursuant to the Advisory
                Agreement;

            


    

     

    
      	 	
              (xi)

            	
              to
                the Manager, the Incentive Manager Fee in an amount equal to the
                sum of
                (1) 50% of the first $500,000 and (2) 75% of each $1.00 above $500,000
                of
                Distributable Cash available after the distributions are made pursuant
                to
                clauses (i)-(x) above, plus any amount to which the Manager is entitled
                pursuant to the provisions of Section
                2.2
                of
                the applicable Management
                Agreement;

            


    

     

    
      	 	
              (xii)

            	
              to
                the Manager, an amount sufficient to reimburse the Manager for any
                advertising expenses incurred by it on behalf of a Co-Issuer and
                not
                previously reimbursed hereunder;
                and

            


    

     

    
      	 	
              (xiii)

            	
              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

            


    

     

    
      	 	
              (xiv)

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

            


    

     

    Section
      14.2 Eligible
      Investments

     

    Upon
      an
      Issuer Order, the Manager shall cause Wilmington Trust Company to invest the
      funds in the Issuer Collection Account, in Eligible Investments. In the event,
      at the close of each Business Day, the Agent has not received an Issuer Order,
      or is not in possession of a standing Issuer Order, the Agent may cause
      investment of such funds in the type of Eligible Investment specified in
      clause (i) or clause (v) of the definition of Eligible Investments. No
      Eligible Investment shall mature later than the Business Day preceding the
      next
      following Payment Date.

     

    
      
        
        

      

      
        65

        
          

        

      

      
        
        

      

    

     

    The
      Agent
      shall not be liable for any loss incurred on any funds invested in Eligible
      Investments pursuant to the provisions of this Section 14.2.

     

    ARTICLE
      XV.

     

    ASSIGNMENTS
      AND PARTICIPATIONS

     

    Section
      15.1 Assignments
      and Participations.

     

    (a) The
      Lender, in its capacity as Noteholder under the Security Agreement, hereby
      covenants and agrees that it will not sell, assign or convey any interest in
      any
      of the Notes (except as provided in paragraph (b) below) without the prior
      written approval of the Issuer not to be unreasonably withheld; provided that,
      no
      approval is necessary in the event that a Funding Termination Event has occurred
      and is continuing.

     

    (b) The
      Lender may, at any time, without consent of the Issuer, sell or assign to one
      or
      more Eligible Transferees (a “Participant”) participating interests in the
      commitment of the Lender to advance a Borrowing (or any portion thereof), and
      the other rights and interests of the Lender hereunder and under the other
      Transaction Documents. All other participations (i.e.
      other
      than to an Eligible Transferee) shall require the written consent of the Issuer
      and shall be subject to the following: (i) the Lender shall remain the
      Lender and sole Noteholder for all purposes of this Agreement and the other
      Transaction Documents and the Participant receiving the participating interest
      and the other rights and interests of the Lender hereunder shall not constitute
      a “Lender” or “Noteholder” hereunder or under the other Transaction Documents
      and the Lender’s obligations under this Agreement shall remain unchanged,
      (ii) the Lender shall remain solely responsible for the performance of such
      obligations, (iii) the Issuer and the Agent shall continue to deal solely
      and directly with the Lender in connection with the Lender’s rights and
      obligations under this Agreement and the other Transaction Documents,
      (iv) the Lender shall not transfer or grant any participating interest
      under which the Participant has the right to approve any amendment to, or any
      consent or waiver with respect to, this Agreement or any other Transaction
      Document, and (v) all amounts payable by the Issuers hereunder shall be
      determined as if the Lender had not sold such participation. The rights of
      any
      Participant only shall be derivative through the Lender and no Participant
      shall
      have any rights under this Agreement or the other Transaction Documents or
      any
      direct rights as to the Issuers, the Agent or the Collateral. The Participant
      shall have the right to participate directly in the making of decisions by
      the
      Lender and the other Participants among themselves.

     

    
      
        
        

      

      
        66

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the Issuer and the Agent have caused this Security Agreement
      to
      be duly executed by their respective officers thereunto duly authorized and
      their respective seals, duly attested, to be hereunto affixed, all as of the
      day
      and year first above written.

     

    
      	 	 	 
	 	
              NEXCEN
                ACQUISITION CORP., as Issuer

            
	 
 	 
 	 
 
	 	By:  	/s/ 
	 	
              

              Name:
                

            
	 	Title:


    

     

    
      	 	 	 
	 	BTMU
              CAPITAL
              CORPORATION, as Agent
	 
 	 
 	 
 
	Date: 	By:  	/s/ 
	 	
              

              Name:

            
	 	Title: 


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    APPENDIX
      A

    


    STANDARD
      DEFINITIONS

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    
      STANDARD
        DEFINITIONS

       

      Accounting
        terms used and not otherwise defined herein or in the Transaction Documents
        shall be interpreted in accordance with GAAP in effect in the United States
        from
        time to time. References to any agreement include such agreement as it may
        be
        amended, modified, supplemented or restated from time to time pursuant to
        its
        terms.

       

      “Act”
or
        “Act
        of
        Noteholders”:
        The
        meaning ascribed thereto in Section 1.2 of the Security Agreement.

       

      “Adverse
        Claim”:
        Any
        Lien other than the interests created under the Security Agreement or any
        other
        Transaction Document in favor of the Agent.

       

      “Advisory
        Agreement”:
        That
        certain agreement between NexCen Acquisition Co. and NexCen Brands pursuant
        to
        which NexCen Acquisition Co. provides certain advisory services to NexCen
        Brands. 

       

      “Affiliate”:
        With
        respect to any specified Person, any other Person controlling or controlled
        by
        or under common control with such specified Person. For the purposes of this
        definition, “control” when used with respect to any specified Person means the
        power to direct the management and policies of such Person, directly or
        indirectly, whether through the ownership of voting securities, by contract
        or
        otherwise and the terms “controlling” and “controlled” have meanings correlative
        to the foregoing.

       

      “Agent”:
        BTMU
        Capital Corporation.

       

      “Applicable
        Law”:
        In
        respect of any Person, all provisions of constitutions, statutes, rules,
        regulations and orders of Governmental Authorities applicable to such Person,
        and all orders and decrees of all courts and arbitrators in proceedings or
        actions to which the Person in question is a party.

       

      “Asset
        DSCR Test”:
        With
        respect to any Asset that is the subject of a Release Event, the conclusion
        that
        the DSCR as of the most recent Payment Date calculated by the Manager without
        regard to such Asset is equal to or greater than 1.15:1.00 as confirmed in
        the
        most recent Manager Report and accepted by the Agent.

       

      “Asset
        Purchase Agreement”:
        That
        certain Equity Interest and Asset Purchase Agreement, dated as of August
        21,
        2006 by and among NexCen Brands, NexCen Acquisition Co., NexCen Franchise
        Management, Inc., Athlete's Foot Marketing Associates, LLC, Athlete's Foot
        Brands, LLC, Support Fund, Robert J. Corliss, Donald Camacho, Timothy Brannon,
        and Martin Amschler 

       

      “Assets”:
        All of
        the following:

       

      (i) all
        Trademarks;

       

      (ii) all
        Licenses; 

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      (iii) all
        Other
        Intellectual Property; 

       

      (iv) all
        Related Rights; 

       

      (v) all
        royalties, license fees, franchise payments and all other rights to the payment
        of money under the Licenses;

       

      (vi) all
        equity interests in any Co-Issuer;

       

      (vii) all
        other
        revenues collected with respect to the IP Businesses of the Co-Issuers;
        and

       

      (viii) any
        of
        the foregoing acquired by any Co-Issuer after a Funding Date; 

       

      provided,
        however
        that any
        Priority and Non-Distributable Amounts shall not be an "Asset". 

       

      “Authorized
        Signatory”:
        With
        respect to the Issuer or any Co-Issuer, any one of the President, the Vice
        President, the Treasurer, any Assistant Treasurer, the Secretary or any
        Assistant Secretary.

       

      “Available
        Borrowing Amount”:
        As of
        any date of determination, the Maximum Facility Balance minus
        the
        Outstanding Note Balance on such date.

       

      “Bankruptcy
        Code”:
        Title
        11, United States Code, as amended from time to time, and any successor statute
        thereto.

       

      “Base
        Rate”:
        LIBOR.

       

      “Benefit
        Plan”:
        An
“employee benefit plan” as defined in Section 3(3) of ERISA, or any other “plan”
as defined in Section 4975(e)(1) of the Code, that is subject to the prohibited
        transaction rules of ERISA or of Section 4975 of the Code or any plan that
        is
        subject to any substantially similar provision of federal, state or local
        law.

       

      “Board
        of Directors”:
        The
        board of directors of a Person or any duly authorized committee of that
        Board.

       

      “Board
        Resolution”:
        A copy
        of a resolution certified by the Secretary or an Assistant Secretary of the
        Issuer or a Co-Issuer to have been duly adopted by its Board of Directors
        and to
        be in full force and effect on the date of such certification.

       

      “Borrowing”:
        An
        advance made to a Co-Issuer pursuant to the terms and conditions of the Security
        Agreement, the related Security Agreement Supplement, the Note Funding Agreement
        and the related Joinder Supplement. 

       

      “Borrowing
        Base”:
        On any
        date of determination, an amount equal to the product of the Borrowing Base
        Percentage and the Value of the Assets pledged and to be pledged under the
        Security Agreement pursuant to a Security Agreement Supplement, but in no
        event
        shall the Borrowing Base exceed $150,000,000.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      “Borrowing
        Base Percentage”:
        60%.


       

      “Borrowing
        Notice”:
        The
        meaning specified in Section 2.1(c) of the Note Funding Agreement.

       

      “Brand
        Manager”:
        The
        wholly-owned subsidiary of NexCen Brands that manages the assets of the Brand
        Subsidiary Borrowers pursuant to Brand Management Agreements.

       

      “Brand
        Management Agreements”:
        Those
        certain management agreements between the Brand Manager and the Brand Subsidiary
        Borrowers, satisfactory to the Agent.

       

      “Brand
        Management Fee”:
        With
        respect to each Payment Date and each applicable Co-Issuer, and subject to
        the
        provisions of Section 2.2 of the applicable Management Agreement, an amount
        not
        to exceed the lesser of the sum for each Co-Issuer of (a) the actual Manager
        Costs incurred by the Brand Manager for such Co-Issuer for the immediately
        preceding Collection Period and (b) the revenues received from such Co-Issuer
        during such Collection Period and deposited to the Issuer Collection Account
        pursuant to Section 3.1.1 of the applicable Security Agreement Supplement
        multiplied by that Management Fee Percentage for such Co-Issuer as specified
        in
        Section 2.1 of the relevant Security Agreement Supplement; provided,
        however,
        that
        prior to the occurrence of a Manager Event of Default or a Manager Qualification
        Event (or an event which but for the giving of notice and/or lapse of time
        would
        result in a Manager Event of Default or Manager Qualification Event) with
        respect to any applicable Co-Issuer, the revenues received from such Co-Issuer
        during such Collection Period and deposited to the Issuer Collection Account
        pursuant to Section 3.1.1 of the applicable Security Agreement Supplement
        multiplied by that Management Fee Percentage for such Co-Issuer as specified
        in
        Section 2.1 of the relevant Security Agreement Supplement shall be the amount
        paid to the Brand Manager as its Brand Management Fee, subject to adjustment
        as
        necessary to result in the proper Brand Management Fee ultimately being paid
        in
        accordance with Section 2.2 of the applicable Management Agreement.


       

      “Brand
        Subsidiary Borrower”:
        An
        Eligible Borrower which has as its primary business purpose the licensing
        of
        branded consumer products.

       

      “BTM
        Trust Company”:
        Bank
        of Tokyo-Mitsubishi Trust Company.

       

      “Business
        Day”:
        Any
        day that is not (i) a Saturday, or Sunday or (ii) any other day on
        which commercial banking institutions in the State of New York or the State
        of
        Delaware are authorized or obligated by law or executive order to be
        closed.

       

      “Change
        of Control”:
        Any
        Person or group of Persons acting in concert acquires more than 50% of the
        voting rights of a Person’s share capital or holds the power to control the
        appointment of removal of the majority of directors of the Person.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      “Change
        of Management Event”:
        An
        event or series of events by which Robert D'Loren is no longer (i) either
        President and Chief Executive Officer or Chairman of NexCen Brands and (ii)
        a
        Director of NexCen Brands, and a replacement satisfactory to the Agent has
        not
        been named within 120 days of such event.

       

      “Closing
        Date”:
        March
        12, 2007.

       

      “Code”:
        The
        Internal Revenue Code of 1986, as amended.

       

      “Co-Issuers”:
        All
        Subsidiary Borrowers that become parties to the Security Agreement by entering
        into a Security Agreement Supplement and to the Note Funding Agreement by
        entering into a Joinder Supplement.

       

      “Co-Issuer
        Collection Accounts”:
        The
        trust account or accounts established and maintained by a Co-Issuer as such
        pursuant to the related Security Agreement Supplement.

       

      “Co-Issuer
        Lockbox Accounts”:
        The
        trust account or accounts established and maintained by a Co-Issuer as such
        pursuant to the related Security Agreement Supplement.

       

      “Co-Issuer's
        Notice”:
        Shall
        have the meaning given to such term in Section 13.3(d) of the Security
        Agreement.

       

      “Co-Issuer
        Prepaid Royalty Accounts”:
        The
        trust account or accounts established and maintained by a Co-Issuer as such
        pursuant to Article III of the related Security Agreement
        Supplement.

       

      “Co-Issuer
        Priority and Non-Distributable Amounts Accounts”:
        The
        trust account or accounts established and maintained by a Co-Issuer as such
        pursuant to the related Security Agreement Supplement.

       

      “Collateral”:
        The
        meaning ascribed thereto in granting clauses of the Security
        Agreement.

       

      “Collection
        Period”:
        With
        respect to any Payment Date, the three calendar months preceding such Payment
        Date; provided,
        that
        with respect to the first Payment Date following a Funding Date for a Note,
        the
        Collection Period will be the period from and including the Funding Date
        for
        such Note to and including the date specified in the related Security Agreement
        Supplement.

       

      “Collection
        Period Revenues”:
        With
        respect to any Payment Date and the prior Collection Period, an amount equal
        to
        the Distributable Cash less the amount referred to in clause (i) of the
        definition of such term.

       

      “Collections”:
        All
        amounts received in connection with the Assets.

       

      “Contract”:
        Any
        contract, indenture, security agreement, mortgage, deed of trust, note,
        instrument, lease, license, arrangement or other agreement, whether oral
        or
        written, to which the Issuer or any Co-Issuer may become a party or by which
        the
        Issuer or any Co-Issuer or any of their assets or properties may be bound,
        including the Licenses, as the same may have been amended, modified, replaced
        and/or supplemented from time to time.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      “Contribution
        Agreement”:
        That
        certain contribution agreement by and between NexCen Acquisition Co. and
        NexCen
        Brands dated as of March 12, 2007, and relating to the acquisition of Athlete's
        Foot Brands, LLC. 

       

      “Copyrights”:
        The
        meaning given to such term in Section 1.6 of the Security Agreement Supplement.
        

       

      “Covered
        Jurisdictions”:
        Collectively, the United States of America, Canada and any other jurisdiction
        needed to meet the proviso hereof (the “First
        Stage Covered Jurisdictions”);
        provided,
        however,
        that in
        no event shall the First Stage Covered Jurisdictions be less in the aggregate
        than 85% of the Value of Assets pledged hereunder by the Co-Issuers (the
        Territory other than the First Stage Covered Jurisdictions being the
“Second
        Stage Covered Jurisdictions”).
        

       

      “Deal
        Rapid Amortization Event”:
        The
        occurrence of any of the following: (i) the Issuers Minimum DSCR Test is
        not
        satisfied; (ii) a Manager Qualification Event; (iii) a Change of Management
        Event; or (iv) an Event of Default, provided,
        that
        with
        respect to clause (i), a Deal Rapid Amortization Event shall cease to exist
        if
        the Issuers Minimum DSCR Test is subsequently satisfied for two consecutive
        Payment Dates.

       

      “Debt
        Service Amount”:
        With
        respect to any Payment Date, the aggregate amount payable pursuant to Sections
        14.1(a)(iv) and (v) of the Security Agreement on such Payment Date whether
        or
        not Distributable Cash is sufficient to make such distribution; provided however,
        that
        for any Note of a Co-Issuer in respect of which the first four payments have
        not
        yet been made, the amount payable for purposes of this definition shall be
        the
        amount due on the fifth Payment Date after the date of issuance of such
        Note.

       

      “Default”:
        Any
        occurrence which is, or with notice or the lapse of time or both would become,
        an Event of Default.

       

      “Default
        Rate”:
        The
        Base Rate plus 4.5% (to the extent allowed by law).

       

      “Determination
        Date”:
        The
        tenth day after the end of each Collection Period.

       

      “Distributable
        Cash”:
        With
        respect to any Collection Period, the sum of (i) the balance, if any, in
        the
        Issuer Collection Account at the beginning of the applicable Collection Period,
        (ii) all deposits (excluding any Priority and Non-Distributable Amounts)
        to the
        Issuer Collection Account during the applicable Collection Period (other
        than
        amounts specifically deposited for purposes of effecting a full or partial
        redemption of one or more Notes), (iii) any interest earned on balances in
        the
        Issuer Collection Account during the applicable Collection Period, and (iv)
        revenues received during such Collection Period by the Issuer pursuant to
        the
        Advisory Agreement with NexCen Brands.

       

      “Dollars”
or
        “$”:
        Lawful
        currency of the United States of America.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      “DSCR”:
        With
        respect to any Payment Date, the ratio of the Rolling 6 Month Revenue to
        the
        Debt Service Amounts for such Payment Date and the most recently preceding
        Payment Date. 

       

      “Eligible
        Borrower”:
        Any
        entity that (i) is a wholly-owned subsidiary of the Issuer or a Co-Issuer;
        (ii)
        is a bankruptcy remote, special purpose entity; and (iii) has duly executed
        a
        Security Agreement Supplement.

       

      “Eligible
        Financial Institution”:
        A
        depository institution that (a) has a combined capital and surplus of at
        least $100,000,000, (b) is subject to supervision or examination by Federal
        or state banking authority and subject to regulations substantially similar
        to
        12 C.F.R. Section 9.10(b), (c) has an office within the United
        States of America, (d) is not affiliated (as such term is defined in
        Rule 405 under the 1933 Act) with the Issuer or any Co-Issuer or with any
        Person involved in the organization or operation of the Issuer or any Co-Issuer
        and (e) has a short-term rating of P-1 from
        Moody’s Investors Service, Inc. (“Moody's”)
        or an
        equivalent rating from a Rating Agency or if no short-term rating exists,
        has
        long-term debt with at least an “A2” rating from Moody’s or an equivalent rating
        from a Rating Agency or otherwise acceptable to the Noteholders and the deposits
        of which are insured to the full extent permitted by law by the FDIC and
        which
        has trust power and is organized under the laws of the United States of America
        or any state thereof. If such Person publishes reports of condition at least
        annually, pursuant to law or to the requirements of the aforesaid supervising
        or
        examining authority, then for the purposes of this definition, the combined
        capital and surplus of such Person shall be deemed to be its combined capital
        and surplus as set forth in its most recent report of condition so
        published.

       

      “Eligible
        Investments”:
        Any
        and all of the following:

       

      (i) obligations
        of, or guaranteed as to principal and interest by, the United States or any
        agency or instrumentality thereof which are backed by the full faith and
        credit
        of the United States;

       

      (ii) certificates
        of deposit and time and demand deposits and bankers acceptances having original
        maturities of no more than 365 days of any bank or trust company incorporated
        under the laws of the United States or any state, provided that the long
        term
        debt obligations of such bank or trust company (or parent holding company
        thereof), at the date of acquisition thereof have received a credit rating
        in
        one of the two highest rating categories of a Rating Agency;

       

      (iii) commercial
        paper of any Person incorporated under the laws of the United States or any
        state thereof having original maturities of not more than 180 days which
        on the
        date of acquisition has a credit rating in the highest rating category for
        commercial paper of a Rating Agency;

       

      (iv) money
        market mutual funds registered under the Investment Company Act of 1940,
        as
        amended, having a credit rating, at the time of such investment in the highest
        rating category of a Rating Agency; and

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      (v) bonds
        or
        other obligations having a short term unsecured debt rating in one of the
        two
        the highest rating categories of a Rating Agency and having a long term debt
        rating in the highest rating category of a Rating Agency issued by, or by
        authority of, any state of the United States, any territory or possession
        of the
        United States, including the Commonwealth of Puerto Rico and agencies thereof,
        or any political subdivision of any of the foregoing.

       

      “Eligible
        Transferee”:
         Any
        Indemnified Party, any Noteholder and any commercial paper issuer administered
        or sponsored by the Agent or any of its Affiliates.

       

      “Enhancement
        Agreement”:
        Any
        agreement between the Lender and any other Person(s), entered into to provide
        credit enhancement to the Lender’s commercial paper facility. 

       

      “Enhancement
        Provider”:
        Any
        Person providing credit support to the Lender under an Enhancement Agreement,
        including pursuant to an unfunded commitment, or any similar entity with
        respect
        to any permitted assignee of the Lender.

       

      “ERISA”:
        The
        Employee Retirement Income Security Act of 1974, as amended.

       

      “ERISA
        Affiliate”:
        Any
        NexCen Entity or any other Person that, together with the NexCen Entity,
        would
        be treated as a single employer under Section 414 of the Code. 

       

      “ERISA
        Event”:
        With
        respect to any NexCen Entity Plan: (a) a “reportable event” within the meaning
        of Section 4043 of ERISA and the regulations issued thereunder (other than
        an
        event as to which the 30-day notice period is waived by regulation); (b)
        the
        failure to satisfy the minimum funding standard of Section 412 of the Code
        or
        Section 302 of ERISA, whether or not waived; (c) the failure to make by its
        due
        date a required contribution under Section 412(m) of the Code (or Section
        430(j)
        of the Code, as amended by the Pension Protection Act of 2006); (d) the failure
        to make any required contribution to a Multiemployer Plan; (e) the filing
        pursuant to Section 412 of the Code of an application for a waiver of the
        minimum funding standard; (f) the provision by the administrator of any NexCen
        Entity Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent
        to
        terminate such NexCen Entity Plan in a standard termination described in
        Section
        4041(b) of ERISA or a distress termination described in Section 4041(c) of
        ERISA; (d) the complete or partial withdrawal by the Issuer, any Co-Issuer
        or
        any Support Fund, or any ERISA Affiliate, from any NexCen Entity Plan with
        two
        or more contributing sponsors or the termination of any such NexCen Entity
        Plan,
        in each case, which results in liability pursuant to Section 4063 or 4064
        of
        ERISA; (e) formal written notice from the PBGC of its intent to commence
        proceedings to terminate any NexCen Entity Plan; (f) the imposition of liability
        on the Issuer, any Co-Issuer or any Support Fund or any ERISA Affiliate,
        pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application
        of
        Section 4212(c) of ERISA; (g) the assertion of a material claim (other than
        routine claims for benefits ) against such NexCen Entity Plan or the assets
        thereof, or against the Issuer, any Co-Issuer or any Support Fund or any
        ERISA
        Affiliate, in connection with such NexCen Entity Plan; (h) with respect to
        any
        NexCen Entity Plan that is intended to be qualified under Section 401(a)
        of the
        Code, the receipt from the Internal Revenue Service of notice of the failure
        of
        such NexCen Entity Plan to qualify under Section 401(a) of the Code or the
        failure of any trust forming part of such NexCen Entity Plan to qualify for
        exemption from taxation under Section 501(a) of the Code; (i) the imposition
        of
        a lien in favor of the PBGC, or a NexCen Entity Plan pursuant to Section
        401(a)(29) or Section 412(n) of the Code or pursuant to ERISA; or (j) the
        complete or partial withdrawal by the Issuer, any Co-Issuer any Support Fund
        or
        any ERISA Affiliate from any Multiemployer Plan that has resulted or could
        reasonably be expected to result in material liability under ERISA.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      “Event
        of Default”:
        When
        used in connection with the Security Agreement, an Event of Default described
        in
        Section 6.1 thereof.

       

      “Extraordinary
        Optional Redemption”:
        A
        redemption of all Outstanding Notes at the option of the Issuer on the
        Redemption Date referred to in Section 11.1(2) of the Security
        Agreement.

       

      “Excluded
        Taxes”:
        The
        meaning given to such term in Section 12.16 of the Security
        Agreement.

       

      “Facility
        Termination Date”:
        The
        date on which the Lender shall make no further advances to any Co-Issuer
        pursuant to Section 2.3 of the Note Funding Agreement.

       

      “FATF”:
        The
        meaning given to such term in Section 12.9(aa) of the Security
        Agreement.

       

      “FDIC”:
        The
        Federal Deposit Insurance Corporation, or any successor thereof.

       

      “Federal
        Bankruptcy Code”:
        The
        U.S. Bankruptcy Code of 1978, as amended.

       

      “First
        Stage Covered Jurisdictions”:
        The
        meaning given to that term in the definition of Covered
        Jurisdictions.

       

      “Foreign
        IP Assets”:
        The
        meaning given to that term in Section 12.3(c) of the Security
        Agreement.

       

      “Foreign
        Person”:
        A
        Person not organized under the laws of the United States or any state thereof.
        

       

      “Franchise
        Fee Refunds”:
        Franchise fees previously received by a Co-Issuer and returned to the applicable
        franchisee in the event that such franchisee is entitled to a refund of the
        same
        under the provisions of such franchisee's applicable license
        agreement.

       

      “Franchise
        Management Agreements”:
        Those
        certain management agreements, entered into by and between the Franchise
        Manager
        and the Franchise Subsidiary Borrowers, satisfactory to the Agent.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      “Franchise
        Management Fee”:
        With
        respect to each Payment Date and each applicable Co-Issuer, and subject to
        the
        provisions of Section 2.2 of the applicable Management Agreement, an amount
        not
        to exceed the lesser of the sum for each Co-Issuer of (a) the actual Manager
        Costs incurred by the Franchise Manager for such Co-Issuer for the immediately
        preceding Collection Period and (b) the revenues received from such Co-Issuer
        during such Collection Period and deposited to the Issuer Collection Account
        pursuant to Section 3.1.1 of the applicable Security Agreement Supplement
        multiplied by that Management Fee Percentage for such Co-Issuer as specified
        in
        Section 2.1 of the relevant Security Agreement Supplement; provided,
        however,
        that
        prior to the occurrence of a Manager Event of Default or a Manager Qualification
        Event (or an event which but for the giving of notice and/or lapse of time
        would
        result in a Manager Event of Default or Manager Qualification Event) with
        respect to any applicable Co-Issuer, the revenues received from such Co-Issuer
        during such Collection Period and deposited to the Issuer Collection Account
        pursuant to Section 3.1.1 of the applicable Security Agreement Supplement
        multiplied by that Management Fee Percentage for such Co-Issuer as specified
        in
        Section 2.1 of the relevant Security Agreement Supplement shall be the amount
        paid to the Franchise Manager as its Franchise Management Fee, subject to
        adjustment as necessary to result in the proper Franchise Management Fee
        ultimately being paid in accordance with Section 2.2 of the applicable
        Management Agreement. 

       

      “Franchise
        Manager”:
        The
        wholly-owned subsidiary of NexCen Brands that manages the assets of the
        Franchise Subsidiary Borrowers pursuant to management agreements satisfactory
        to
        the Agent.

       

      “Franchise
        Subsidiary Borrower”:
        An
        Eligible Borrower which has as its primary business purpose the franchising
        of
        consumer goods and/or services to others engaged in retail sales of such
        goods
        and/or services.

       

      “Funding
        Date”:
        Each
        date on which a Co-Issuer shall make a Borrowing pursuant to the Security
        Agreement, the related Security Agreement Supplement, the Note Funding Agreement
        and the Joinder Supplement.

       

      “Funding
        Termination Event”:
        The
        earlier to occur of an Event of Default and a Deal Rapid Amortization
        Event.

       

      “GAAP”:
        Generally accepted accounting principles in the United States of America
        in
        effect from time to time.

       

      “Governmental
        Authority”:
        Any
        nation or government, any state or other political subdivision thereof and
        any
        entity exercising executive, legislative, judicial, regulatory or administrative
        functions of or pertaining to government.

       

      “Government
        Securities”:
        The
        securities described in clause (i) of the definition of the term “Eligible
        Investments”.

       

      “Grant”:
        To
        grant, bargain, sell, warrant, alienate, remise, release, convey, assign,
        transfer, mortgage, pledge, create and grant a security interest in and right
        of
        set-off against, deposit, set over and confirm. A Grant of a License or of
        any
        other instrument shall include all rights, powers and options (but none of
        the
        obligations) of the Granting party thereunder, including, without limitation,
        the immediate and continuing right to claim, collect, receive and receipt
        for
        payments in respect of a License or any other payment due thereunder, to
        give
        and receive notices and other communications, to make waivers or other
        agreements, to exercise all rights and options, to bring proceedings in the
        name
        of the Granting party or otherwise, and generally to do and receive anything
        which the Granting party is or may be entitled to do or receive thereunder
        or
        with respect thereto.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      “Hedge
        Agreement”:
        The
        interest rate cap agreement(s) entered into by the Issuers on each Funding
        Date
        in accordance with Section 6.14 of the Note Funding Agreement.

       

      “Incentive
        Management Fee”:
        The
        amount described in Section 14.1(a)(x) or Section 14.1(d)(xi) of the Security
        Agreement, as applicable. 

       

      “Indebtedness”:
        Of any
        Person, without duplication, (a) any obligation for borrowed money, including,
        (i) any obligation incurred through the issuance and sale of bonds, debentures,
        notes or other similar debt instruments and (ii) any obligation for borrowed
        money which is non-recourse to the credit of the Person but which is secured
        by
        any assets of such Person, (b) any obligation of such Person on account of
        deposits or advances with the exception of the Obligor Rebate Amount and
        Franchise Fee Refunds, (c) any obligation of such Person for the deferred
        purchase price of any property or services, except accounts payable arising
        in
        the ordinary course of such Person's business, (d) any obligation of such
        Person
        as lessee under a capital lease, other than capital leases and real property
        leases entered into in the ordinary course of business, (e) any obligation
        of
        such Person or of another secured by a lien on any asset of such Person,
        whether
        or not such obligation is assumed by such Person, (f) any obligation in respect
        of interest rate or foreign exchange hedging agreement and (g) guarantees
        of any
        of the above by any Person.

       

      “Indemnified
        Amounts”:
        The
        meaning given to such term in Section 12.13 of the Security
        Agreement.

       

      “Indemnified
        Party”:
        The
        Lender, Program Administrator, any Enhancement Provider and any Liquidity
        Provider.

       

      “Indemnity
        Agreement”:
        That
        certain indemnity agreement by and between NexCen Brands and Athlete's Foot
        Brands, LLC.

       

      “Independent”:
        When
        used with respect to any specified Person, means another Person who (1) is
        in
        fact independent of the Issuer, any Co-Issuer or any Affiliate of the Issuer
        or
        any Co-Issuer, (2) does not have any direct financial interest or any material
        indirect financial interest in the Issuer, any Co-Issuer or in any Affiliate
        of
        the Issuer or any Co-Issuer and (3) is not connected with the Issuer or any
        Co-Issuer as an officer, employee, shareholder, debt-holder, promoter,
        underwriter, trustee, partner, director or person performing similar
        functions.

       

      “Independent
        Director”:
        A
        natural person who, for the five-year period prior to his or her appointment
        as
        Independent Director has not been, and during the continuation of his or
        her
        service as Independent Director is not: (i) an employee, director, stockholder,
        member, manager, partner or officer of the Issuer or any Co-Issuer or any
        of its
        Affiliates (other than his or her service as an Independent Director of the
        Issuer or any Co-Issuer); (ii) a customer or supplier of the Issuer or any
        Co-Issuer or any of its Affiliates (other than his or her service as an
        Independent Director of the Issuer or any Co-Issuer); or (iii) any member
        of the
        immediate family of a person described in (i)
        or
(ii).
        

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      “Individual
        Asset”:
        With
        respect to the Assets of a Co-Issuer, a contract category that is separately
        identified on Schedule III to the related Security Agreement
        Supplement.

       

      “Initial
        Asset Value”:
        With
        respect to the Assets of a Co-Issuer, for each Individual Asset, the Value
        of
        the Asset as of the applicable Funding Date, as determined by the Manager,
        satisfactory to the Agent, as set forth opposite such Asset on Schedule III
        to
        the related Security Agreement Supplement.

       

      “Initial
        Interest Period”:
        With
        respect to any Note and the applicable Initial Payment Date, the period
        commencing on and including the related Funding Date to and including the
        day
        immediately preceding the applicable Initial Payment Date.

       

      “Initial
        Note Principal Balance”:
        With
        respect to each Note, the initial principal balance of such Note, which equals
        the amount of the related Borrowing.

       

      “Initial
        Payment Date”:
        With
        respect to any Note, the date specified in the related Security Agreement
        Supplement.

       

      “Intellectual
        Property”:
        The
        meaning given to such term in Section 1.6 of the Security Agreement Supplement.
        

       

      “Interest
        Distribution Amount”:
        With
        respect to any Payment Date, the sum of (i) interest accrued on the Notes
        during
        the related Interest Period at the Note Interest Rate and (ii) the amount
        of
        unpaid Interest Distribution Amounts from prior Payment Dates for the Notes,
        plus, to the extent permitted by Applicable Law, interest on such unpaid
        amount
        at the Note Interest Rate. The Interest Distribution Amount shall be calculated
        on an actual/360 basis.

       

      “Interest
        Period”:
        With
        respect to any Note and as to any Payment Date, the period from and including
        the immediately preceding Payment Date (or, in the case of the applicable
        first
        Payment Date, from and including the Funding Date) to and including the day
        immediately preceding such Payment Date.

       

      “Investment
        Company Act”:
        The
        Investment Company Act of 1940, as amended.

       

      “IP
        Businesses”:
        Intellectual property-centric businesses, including consumer branded products
        and franchise businesses.

       

      “Issue
        Date”:
        With
        respect to any Note, the issue date indicated on such Note.

       

      “Issuer”:
        NexCen
        Acquisition Corp., its permitted successors and permitted assigns.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      “Issuer
        Collection Account”:
        The
        trust account or accounts established and maintained by the Issuer for the
        benefit of the Agent as such pursuant to Section 13.2 of the Security
        Agreement.

       

      “Issuer
        Management Agreement”:
        That
        certain management agreement, dated as of March 12, 2007, by and between
        the
        Issuer and the Manager.

       

      “Issuer
        Management Fee”:
        Shall
        have the meaning given to such term in Section 2.2 of the Issuer Management
        Agreement. 

       

      “Issuer
        Manager”:
        The
        wholly-owned subsidiary of NexCen Brands that manages the assets of the Issuer
        pursuant to the Issuer Management Agreement. 

       

      “Issuer
        Order”:
        A
        written order or request signed in the name of the Issuer or a Co-Issuer
        by any
        two of its Authorized Signatories and delivered to the Agent.

       

      “Issuers”:
        The
        Issuer and Co-Issuers, collectively.

       

      “Issuers
        Combined DSCR Test”:
        In
        respect of all Issuers, a test that is satisfied if the DSCR is at least
        1.25:1.00. 

       

      “Issuers
        Minimum DSCR Test”:
        In
        respect of all Issuers, a test that is satisfied if the DSCR is at least
        1.15:1.00 

       

      “Joinder
        Supplement”:
        Shall
        have the meaning given to such term in Section 2.4 of the Note Funding
        Agreement. 

       

      “Law”:
        Any
        law (including common law), constitution, statute, treaty, regulation, rule,
        ordinance, order, injunction, writ, decree, judgment, award or similar item
        of
        or by a Governmental Authority or any interpretation, implementation or
        application thereof.

       

      “Lender”:
        Victory Receivables Corporation.

       

      “LIBOR”:
        A rate
        to be determined for any Payment Date on the second business day prior to
        commencement of the related Interest Period (each such date, an “Interest
        Determination Date”)
        in
        accordance with the following terms. The
        Agent
        will determine LIBOR for such Interest Period on the basis of the offered
        rates
        of the Reference Banks for three-month U.S. dollar deposits, as such rates
        appear on the Telerate Page 3750, as of 11:00 a.m. (London time) on such
        Interest Determination Date. 

       

      As
        used
        in this definition of LIBOR: “business
        day”
means
        a
        day on which banks are open for dealing in foreign currency and exchange
        in
        London and New York City; “Telerate
        Page 3750”
means
        the display page currently so designated on the Dow Jones Telerate Service
        (or
        such other page as may replace the Telerate Page 3750 page on that service
        for
        the purpose of displaying London interbank offered rates of major bank(s);
        and
“Reference
        Banks” means
        leading banks selected by the Agent and engaged in transactions in Eurodollar
        deposits in the international Eurocurrency market (i) with an established
        place
        of business in London, (ii) whose quotations appear on the Telerate Page
        3750 on
        the Interest Determination Date in question, and (iii) which have been
        designated as such by the Agent.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      On
        each
        Interest Determination Date, LIBOR for the applicable Interest Period will
        be
        established by the Agent as follows:

       

      (a) If,
        on
        such Interest Determination Date, two or more Reference Banks provide such
        offered quotations, LIBOR for the related Interest Period shall be the
        arithmetic mean of such offered quotations (rounded upwards, if necessary,
        to
        the nearest whole multiple of 0.0001%).

       

      (b) If,
        on
        such Interest Determination Date, fewer than two Reference Banks provide
        such
        offered quotations, LIBOR for the related Interest Period shall be the higher
        of
        (x) LIBOR as determined on the previous Interest Determination Date and (y)
        the
        arithmetic mean (rounded upwards if necessary to the nearest whole multiple
        of
        0.0001%) of the three-month U.S. dollar lending rates that three New York
        City
        banks selected by the Agent are quoting at approximately 11:00 a.m. (New
        York
        City time) on the relevant Interest Determination Date to leading European
        banks.

       

      The
        establishment of LIBOR on each Interest Determination Date by the Agent and
        the
        Agent’s calculation of the rate of interest applicable to the Notes for the
        related Interest Period shall (in the absence of manifest error) be final
        and
        binding.

       

      “License
        Income”:
        Any
        and all forms of income, proceeds or compensation, exclusive of any Priority
        and
        Non-Distributable Amounts, whether cash or other, paid on account of or in
        respect of any of the Licenses, provided,
        however,
        that
        any compensation received in any form other than cash or negotiable instruments
        shall not be deemed received until the same has been converted to
        cash.

       

      “Licenses”:
        At any
        time and from time to time, the licenses, franchise agreements, area development
        agreements, operating agreements, or other agreements for the exploitation
        of
        the Trademarks identified on Schedule II to each Security Agreement Supplement
        and any other licenses of trademarks to which the related Co-Issuer shall
        be a
        party as licensor, together with any extension, modification, renewal or
        replacement of any such agreement.

       

      “Lien”:
        Any
        interest in property securing an obligation owed to, or a claim by, any Person
        other than the owner of the property, whether such interest shall be based
        on
        the common law, statute or contract, whether or not such interest shall be
        recorded or perfected and whether or not such interest shall be contingent
        upon
        the occurrence of some future event or events or the existence of some future
        circumstance or circumstances, and including the lien or security interest
        arising from a mortgage, encumbrance, pledge, adverse claim or charge,
        conditional sale or trust receipt, or from a lease, consignment or bailment
        for
        security purposes.

       

      “Liquidation
        Proceeds”:
        The
        proceeds received by the Agent upon and in connection with the enforcement
        of
        any element of the Collateral as to which a default or breach has occurred,
        all
        in accordance with the Security Agreement.

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      “Liquidity
        Agreement”:
        Any
        agreement entered into, directly or indirectly, in connection with or related
        to, the Security Agreement pursuant to which any Person agrees to make loans
        or
        advances to, or purchase from, the Lender in order to provide liquidity for
        the
        Lender’s commercial paper notes or other senior.

       

      “Liquidity
        Provider”:
        The
        Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch and any other lender
        or
        liquidity provider that is at any time party to a Liquidity Agreement or
        any
        successor or assign of such lender or liquidity provider or any similar entity
        with respect to any permitted assignee of the Lender.

       

      “Majority
        Holders”:
        The
        meaning described thereto in Section 1.2(a) of the Security
        Agreement.

       

      “Manage”:
        With
        respect to any specified property, to lease, license, renew, extend, advertise,
        exploit, promote, market, publicize, maintain quality control, settle,
        compromise, collect, enforce or otherwise deal with such property.

       

      “Management
        Agreement”:
        The
        Issuer Management Agreement, Brand Management Agreement and/or the Franchise
        Management Agreement, as the context may require.

       

      “Management
        Fee”:
        Either
        Brand Management Fee or the Franchise Management Fee, as
        applicable.

       

      “Management
        Services”:
        The
        meaning ascribed to such term in Section 2.1(a) of any Management
        Agreement.

       

      “Manager”:
        The
        Franchise Manager, the Brand Manager and/or the Issuer Manager, as the case may
        be. 

       

      “Manager
        Advances”:
        Advances made by the applicable Manager on behalf of any Co-Issuer in respect
        of
        Obligor Rebate Amounts or Franchise Fee Refunds.

       

      “Manager
        Costs”:
        All
        expenses incurred by the Brands Manager or the Franchise Manager (other than
        Manager Expenses) to enhance the value of the Assets, to market, develop
        and
        exploit the Trademarks, to develop and enter into new Licenses and service
        and
        collect all Licenses and other similar activities, including collection,
        accounting and tax services whether performed directly or by third parties,
        all
        as specified in reasonable detail in the applicable Manager's financial
        statements delivered pursuant to Section 6.1(a) of the Management
        Agreement.

       

      “Manager
        Event of Default”:
        The
        meaning ascribed to such term in Section 7.1 of any Management
        Agreement.

       

      “Manager
        Expenses”:
        All
        out-of-pocket expenditures of the Manager, (other than Manager Costs), incurred
        by the Manager in protecting the Equity Interests, Trademarks and the Licenses
        in litigation or other adversarial proceedings relating to the Equity Interests,
        Trademarks or related Licenses, all as specified in reasonable detail in
        the
        applicable Manager Report.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      “Manager
        Qualification Event”:
        The
        meaning ascribed to such term in Section 7.2 of any Management
        Agreement.

       

      “Manager
        Report”:
        The
        meaning ascribed to such term in Section 6.1(h) of any Management
        Agreement.

       

      “Manager
        Termination Event”:
        The
        meaning ascribed to such term in Section 7.2 of any Management
        Agreement.

       

      “Manager
        Termination Notice”:
        The
        meaning ascribed to such term in Section 7.2 of any Management
        Agreement.

       

      “Material
        Adverse Effect”:
        The
        meaning ascribed to such term in Section 12.9(cc) of the Security
        Agreement.

       

      “Material
        License Agreement”:
        Those
        Licenses identified in a schedule to a Security Agreement
        Supplement.

       

      “Maturity
        Date”:
        With
        respect to any Note, the date specified in related Security Agreement
        Supplement.

       

      “Maximum
        Facility Balance”:
        $150,000,000. 

       

      “Minimum
        Annual Advisory Fee”:
        Shall
        equal $1,000,000.00. 

       

      “Multiemployer
        Plan”:
        Shall
        have the meaning as such term is defined in Section 3(37)(A) of
        ERISA

       

      “Net
        Cash Flow”:
        With
        respect to each Borrowing, either the trailing twelve month earnings before
        interest, taxes, depreciation and amortization, in accordance with GAAP
        ("EBITDA"),
        or
        the pro forma EBITDA of the Assets related to such Borrowing as mutually
        agreed
        upon by the Agent and the Manager.

       

      “Net
        Disposition Proceeds”:
        With
        respect to a sale or disposition of Assets in accordance with Section 11.6
        of the Security Agreement, Net Disposition Proceeds shall equal the Outstanding
        Note Balance of all Notes of the Issuers on the date of redemption referred
        to
        in Section 11.2(b) of the Security Agreement multiplied by a fraction that
        is
        equal to the greater of: 

       

      (i) the
        ratio
        of (a) the Value of those Assets disposed of as of the related Funding Date
        and
        (b) the Value of all Assets as of their related Funding Date; and

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      (ii) the
        ratio
        of (a) the then current Value of those Assets disposed of on the date of
        disposition and (b) the then current Value of all Assets on the date of
        disposition.

       

      “Net
        Worth”:
        With
        respect to the Manager, as of any date of determination and as calculated
        on an
        unconsolidated basis (excluding any equity interest), the sum of (i) the
        value
        of all of its assets as determined in accordance with GAAP minus the sum
        of all
        of its liabilities as determined in accordance with GAAP, plus (ii) Obligor
        Rebate Amounts.

       

      “NexCen
        Acquisition Co.”:
        NexCen
        Acquisition Corp., a wholly-owned subsidiary of NexCen Brands.

       

      “NexCen
        Brands”:
        NexCen
        Brands, Inc., a Delaware corporation, the parent entity of NexCen Acquisition
        Corp.

       

      “NexCen
        Entity”:
        NexCen
        Brands, Inc. or any of its subsidiaries or Affiliates.

       

      “NexCen
        Entity Plan”:
        Any
“employee benefit plan” (as defined in Section 3(3) of ERISA) for the benefit of
        any ERISA Affiliate, or with respect to which the NexCen Entity or ERISA
        Affiliate has or may have any liability, including any “employee welfare benefit
        plan” (as defined in Section 3(1) of ERISA), any Pension Plan, any Title IV
        Plan, any Multiemployer Plan and any other written or oral plan, contract
        or
        arrangement involving direct or indirect compensation or benefits, including
        insurance coverage, severance or other termination pay or benefits, change
        in
        control, retention, performance, holiday pay, vacation pay, fringe benefits,
        disability benefits, pension, retirement plans, profit sharing, deferred
        compensation, bonuses, stock options, stock purchase, restricted stock or
        stock
        units, phantom stock, stock appreciation or other forms of incentive
        compensation or post-retirement compensation, maintained or contributed to
        by
        any NexCen Entity or ERISA Affiliate (or that has been maintained or contributed
        to in the last six years by any NexCen Entity or ERISA Affiliate) for the
        benefit of any current or former director, officer, employee or consultant
        of
        any NexCen Entity or ERISA Affiliate, or with respect to which any NexCen
        Entity
        or ERISA Affiliate has or may have any liability.

       

      “Non-Cooperative
        Jurisdiction”:
        A
        country or territory designated as a non-cooperative jurisdiction by
        FATF.

       

      “Nonrecurring
        Fee”:
        Any
        upfront licensing fee, license key money fee, or other similar nonrecurring
        fee
        received by a Co-Issuer from a licensee pursuant to a License, which fee
        is not
        less than $150,000.

       

      “Nonrecurring
        Release Amount”:
        With
        respect to each Payment Date, an amount determined by dividing the amount
        of a
        Nonrecurring Fee by the number of Payment Dates remaining during the period
        beginning at the end of the Collection Period during which such Nonrecurring
        Fee
        is deposited to a Co-Issuer Prepaid Royalty Account and the date of expiration
        of the License for which such Nonrecurring Fee was paid; provided, however,
        that
        any franchise territory purchase fee or license key money fee shall be released
        in four equal installments over the succeeding four Payment Dates.

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      “Note”
or
        “Notes”:
        The
        securities authorized and issued under the Security Agreement by the Issuer
        and
        a Co-Issuer.

       

      “Note
        Issuers”:
        The
        Issuer and the related Co-Issuers of a specific Note.

       

      “Note
        Co-Issuers”:
        The
        Co-Issuers of a specific Note.

       

      “Note
        Co-Issuer DSCR”:
        With
        respect to any Payment Date and any Co-Issuer, the ratio of the Rolling 6
        Month
        Revenues (not on an aggregate basis but solely with respect to the revenues
        of
        such Note Co-Issuer) to the Debt Service Amounts (not on an aggregate basis
        but
        solely with respect to such Co-Issuer's allocable portion of the amounts
        payable
        pursuant to Sections 14.1(iv) and (v) of the Security Agreement on such Payment
        Date) for such Payment Date and the most recently preceding Payment
        Date.

       

      “Note
        Co-Issuer DSCR Test”:
        With
        respect to any Co-Issuer, a test that is satisfied if (1) with respect to
        a Note
        Co-Issuer that is a Franchise Subsidiary Borrower, the Note Co-Issuer DSCR
        is at
        least 1.15:1.00 and (2) with respect to a Note Co-Issuer that is a Brand
        Subsidiary Borrower, the Note Co-Issuer DSCR is at least 1.20:1.00.

       

      “Note
        Co-Issuer Rapid Amortization Event”:
        Shall
        occur at such time as, with respect to a Co-Issuer, both the Note Co-Issuer
        DSCR
        Test and the Issuers Combined DSCR Test are not satisfied; provided,
        that
        a Note
        Co-Issuer Rapid Amortization Event shall cease to exist if either the Issuers
        Combined DSCR Test or the Note Co-Issuer DSCR Test is subsequently satisfied
        for
        two consecutive Payment Dates.

       

      “Noteholder”
or
        “Holder”:
        Subject to the provisions of Section 15.1(a) of the Security Agreement, each
        holder, from time to time, of an interest in a Note.

       

      “Note
        Funding Agreement”:
        That
        certain Note Funding Agreement, dated as of March 12, 2007, by and among
        the
        Issuers, the Agent and the Lender.

       

      “Note
        Interest Rate”:
        With
        respect each Note, on any Determination Date thereof, the Base Rate plus
        the
        Note Interest Rate Margin. 

       

      “Note
        Interest Rate Margin”:
        With
        respect to any Note, prior to an Event of Default, if the Total Debt Leverage
        Ratio is i) greater than or equal to 5.00:1.00, 3.00% per annum; ii) less
        than
        5.00:1.00 and greater than or equal to 4.50:1.00, 2.65% per annum; iii) less
        than 4.50:1.00 and greater than or equal to 3.50:1.00, 2.40% per annum; iv)
        less
        than 3.50:1.00 and greater than or equal to 2.50:1.00, 2.15% per annum; v)
        less
        than 2.50:1.00 and greater than or equal to 2.00:1.00, 1.75% per annum; and
        vi)
        less than 2.00:1.00, 1.50% per annum. For three months following the initial
        Funding Date, the Note Interest Rate Margin shall equal 2.65% per annum.
        Following an Event of Default, the Note Interest Rate Margin shall equal
        4.50%
        per annum.

       

      “Note
        Principal Balance”:
        With
        respect to each Note, on any date of determination thereof, an amount equal
        to
        (i) the Initial Note Principal Balance, less (ii) the aggregate principal
        payments previously made with respect to the Note.

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      “Note
        Principal Payment”:
        With
        respect to each Payment Date and each Note, the amount of principal then
        due as
        set forth under the heading “Principal” on a Schedule to such Note, plus all
        amounts remaining in the Issuer Collection Account after the distributions
        described in clauses (i)-(v) of Section 14.1(a) of the Security Agreement
        have
        been made with respect to any Receivables deposited to the Issuer Collection
        Account in the related Collection Period derived from a Material License
        Agreement securing such Note as to which a Renewal Trigger Event has
        occurred.

       

      “Obligor”:
        A
        Person obligated to pay a Receivable.

       

      “Obligor
        Rebate Amounts”:
        The
        obligor rebate amounts due to a licensee pursuant to the terms of the related
        Contract, as set forth in Schedule
        XI
        to the
        Security Agreement Supplement.

       

      “OFAC”:
        The
        Office of Foreign Assets Control.

       

      “Officer's
        Certificate”:
        With
        respect to the Issuer or a Co-Issuer, a certificate signed by any duly
        authorized officer, including any vice president, assistant vice president,
        or
        any officer or assistant officer of the Issuer or a Co-Issuer, as applicable,
        customarily performing functions similar to those performed by any of the
        above-designated officers.

       

      “Opinion
        of Counsel”:
        A
        written opinion of counsel who may, except as otherwise expressly provided
        in
        the Security Agreement, be in-house counsel employed full-time by the Person
        (or
        an Affiliate of such Person) required to deliver the opinion. 

       

      “Organizational
        Documents”:
        With
        respect to any Person, the formation, incorporation or charter documents
        of such
        Person.

       

      “Original
        Seller”:
        The
        meaning given to such term in a Security Agreement Supplement. 

       

      “Other
        Intellectual Property”:
        The
        following property:

       

      (i) The
        Copyrights, and all Copyright applications and registrations therefor, to
        which
        a Co-Issuer owns rights as more fully set forth on Schedule II to each Security
        Agreement Supplement;

       

      (ii) The
        Patents and all Patent applications to which the to which a Co-Issuer owns
        rights as more fully set forth on Schedule II to each Security Agreement
        Supplement; 

       

      (iii) The
        trade
        secrets, inventions, methodology, processes, technology, technical information
        and know-how and other proprietary intellectual property rights and information
        (collectively, the “Technology”)
        related to the manufacture, marketing, distribution or sale by a Co-Issuer
        of
        any products in connection with which such Co-Issuer has or may subsequently
        obtain the right to use the Trademarks; 

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

      (iv) design
        patents and registrations, Trade Dress described in Schedule II to each Security
        Agreement Supplement and product configuration, advertising, photographs,
        layouts, promotional materials and manuals that are used in connection with
        or
        of any products or applications, whatsoever; and

       

      (v) the
        domain names to which a Co-Issuer owns rights as more fully set forth in
        Schedule I to each Security Agreement Supplement.

       

      “Outstanding”:
        With
        respect to the Notes and Borrowings evidenced thereby, as of the date of
        determination, all Notes theretofore delivered under the Security Agreement
        except:

       

      (i) Notes
        theretofore canceled by the Note Registrar or delivered to the Note Registrar
        for cancellation;

       

      (ii) Notes
        or
        portions thereof for whose payment money in the necessary amount has been
        theretofore irrevocably deposited with the Agent in trust for the Holders
        of
        such Notes or previously paid; 

       

      (iii) Notes
        in
        exchange for or in lieu of which other Notes have been delivered pursuant
        to the
        Security Agreement; and

       

      (iv) For
        purposes of voting and consent matters only, any Notes owned by NexCen Brands
        or
        any Affiliate thereof.

       

      “Outstanding
        Note Balance”:
        As of
        any date of determination, the aggregate amount of the Note Principal Balance
        in
        respect of the Outstanding Notes. 

       

      “Patents”:
        The
        meaning given to such term in Section 1.6 of the Security Agreement Supplement.
        

       

      “Payment
        Date”:
        For
        each Note, the 17th day after the end of each Collection Period commencing
        on
        the Initial Payment Date and ending on the related Maturity Date (provided,
        that
        if any such date is not a Business Day, the Payment Date shall be the next
        ensuing Business Day).

       

      “PBGC”:
        The
        Pension Benefit Guaranty Corporation, or any Governmental Authority succeeding
        to any of its principal functions under ERISA.

       

      “Pension
        Plan”:
        Shall
        have the meaning as such term is defined in Section 3(3) of ERISA.

       

      “Permitted
        Encumbrances”:
        Shall
        mean (a) with respect to the Trademarks, any related License; and (b) with
        respect the Receivables, Obligor Rebate Amounts, if any, and the Priority
        and
        Non-Distributable Amounts. 

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      “Person”:
        Any
        individual, corporation, partnership, limited liability company, joint venture,
        joint-stock company, trust (including any beneficiary thereof), unincorporated
        association or government or any agency or political subdivision thereof
        or
        other entity.

       

      “Prepaid
        Release Amount”:
        With
        respect to each Prepaid Royalty Amount and each Payment Date, an amount equal
        to
        the sum of (i) such Prepaid Royalty Amount divided by the number of Payment
        Dates included in the time period beginning on at the end of the Collection
        Period during which such Prepaid Royalty Amount is deposited to a Co-Issuer
        Prepaid Royalty Account and ending on such Prepaid Royalty Amount’s contractual
        due date, plus (ii) any earnings on amounts then held in such Co-Issuer Prepaid
        Royalty Account, provided, however, for the avoidance of doubt, that any
        franchise territory purchase fee or license key money fee shall be released
        in
        four equal installments over the succeeding four Payment Dates.

       

      “Prepaid
        Royalty Amount”:
        An
        amount equal to any royalties received by a Co-Issuer from a licensee pursuant
        to a License in advance of their contractual due date (including without
        limitation, prepaid royalties, early termination payments and liquidated
        damages
        payments) or which would otherwise relate to the use of a trademark for a
        period
        in excess of twelve months.

       

      “Priority
        and Non-Distributable Amounts”:
        Amounts, in which no Co-Issuer or any Manager has any right, title or interest
        whatsoever, deposited into a Co-Issuer Collection Account that consist of
        (a)
        payments made by Licensees, which pursuant to the terms of the related License,
        are required to be used only to fund advertising, marketing and other similar
        costs for the benefit of the Licensees, (b) Obligor Rebate Amounts and (c)
        amounts owed in the nature of commissions and the like pursuant to existing
        contractual arrangements, which amounts are set forth on a schedule on the
        Funding Date of the related Security Agreement Supplement and/or are amounts
        to
        be paid in connection with future such arrangements that may be approved
        by the
        Agent from time to time. 

       

      “Pro
        Forma DSCR”:
        As of
        any date of determination (1) in the case of disposition of an Asset pursuant
        to
        Section 11.6(a) of the Security Agreement, the ratio of (i) the Rolling 6
        Month
        Revenue for such date of determination, but only taking into account for
        purposes of determining the Rolling 6 Month Revenue, the revenue generated
        by
        those Assets constituting the Collateral exclusive of those Assets disposed
        of
        as referred to below, to (ii) the aggregate amount of principal and interest
        payable for the next two succeeding Payment Dates commencing at least 90
        days
        after such redemption on all of the Notes Outstanding after taking into account
        the effect of the related partial redemption of the related Co-Issuer’s Note
        pursuant to Section 11.2(b) of the Security Agreement and (2) in the case
        of
        disposition of its equity interest in a Co-Issuer by the Issuer pursuant
        to
        Section 11.6(b) of the Security Agreement, the ratio of (i) the Rolling 6
        Month
        Revenue for such date of determination, but only taking into account for
        purposes of determining the Rolling 6 Month Revenue, the revenue generated
        by
        those Assets constituting the Collateral exclusive of any Assets owned by
        the
        Co-Issuer, the equity interest in which was disposed of by the Issuer as
        referred to above to (ii) the aggregate amount of principal and interest
        payable
        for next two succeeding Payment Dates commencing at least 90 days after such
        redemption on all of the Notes Outstanding after taking into account the
        related
        redemption in full of the related Co-Issuer’s Note pursuant to Section 11.2(c)
        of the Security Agreement.

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

      “Proceeding”:
        Any
        suit in equity, action at law or other judicial or administrative
        proceeding.

       

      “Proceeds”:
        All
        proceeds of, and all other profits, rentals or receipts, in whatever form,
        arising from the collection, sale, lease, exchange, assignment, licensing
        or
        other disposition of, or realization upon, Collateral, including, without
        limitation, all claims of the Issuer or any Co-Issuer against third parties
        for
        loss of, damage to or destruction of, or for proceeds payable under, or unearned
        premiums with respect to, policies of insurance in respect of, any Collateral,
        and any condemnation or requisition payments with respect to any Collateral,
        in
        each case whether now existing or hereafter arising.

       

      “Program
        Administration Agreement”:
        That
        certain administration agreement between the Lender and the Program
        Administrator governing certain aspects of the administration of the Lender's
        commercial paper facility or any other agreement having similar purposes,
        as in
        effect from time to time.

       

      “Program
        Administrator”:
        Deutsche
        Bank Trust Company Americas,
        or any
        other administrator for the Lender and its successors appointed as such under
        the Program Administration Agreement.

       

      “Program
        Information”:
        Shall
        have the meaning as set forth in Section 6.15 of the Note Funding
        Agreement.

       

      “Program
        Support Providers”:
        Liquidity Providers and Enhancement Providers.

       

      “Qualified
        Hedge Counterparty”:
        (a)
        BTMU Capital Corporation or an Affiliate thereof or (b) any financial
        institution with a short term rating of at least “A-1+” from Standard &
Poor’s, a division of The McGraw-Hill Companies, Inc., (or “A-1” if such
        institution has a long term credit rating of “AA” or higher) and “P-1” from
        Moody’s Investors Service, Inc.

       

      “Rating
        Agency”:
        Shall
        mean any nationally recognized securities rating agency.

       

      “Receivables”:
        Amounts payable under or in respect of any of the Assets.

       

      “Redemption
        Date”:
        Any
        Business Day specified for redemption in accordance with Article XI of the
        Security Agreement.

       

      “Redemption
        Notice”:
        The
        notice of redemption described in Section 11.3 of the Security
        Agreement.

       

      “Redemption
        Price”:
        With
        respect to Outstanding Notes to be redeemed, an amount equal to the principal
        amount of such Notes to be redeemed and accrued interest thereon to the
        Redemption Date as calculated by the Issuer and approved by the
        Agent.

       

      “Regulatory
        Change”:
        means,
        relative to any Indemnified Party:

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

       

      (a) any
        change in (or the adoption, implementation, change in phase-in or
        interpretations or commencement of effectiveness of) any:

       

      (i) Law
        applicable to such Indemnified Party;

       

      (ii) regulation,
        interpretation, directive, requirement or request (whether or not having
        the
        force of Law) applicable to such Indemnified Party of (A) any Governmental
        Authority charged with the interpretation or administration of any Law referred
        to in clause
        (a)(i)
        or of
        (B) any fiscal, monetary or other authority having jurisdiction over such
        Indemnified Party; or

       

      (iii) generally
        accepted accounting principles or regulatory accounting principles applicable
        to
        such Indemnified Party and affecting the application to such Indemnified
        Party
        of any Law, regulation, interpretation, directive, requirement or request
        referred to in clause
        (a)(i)
        or
(a)(ii)
        above;
        or

       

      (b) any
        change in the application to such Indemnified Party of any existing Law,
        regulation, interpretation, directive, requirement, request or accounting
        principles referred to in clause
        (a)(i),
        (a)(ii)
        or
(a)(iii)
        above.

       

      “Related
        Rights”:
        

       

      (i) The
        sole
        and exclusive right to receive and collect any and all License Income regardless
        of when earned and payable and accruing under the Licenses whether before
        or
        after the related Funding Date;

       

      (ii) The
        sole
        and exclusive right to possess, retain and exploit, in perpetuity, in any
        manner
        or media, the Trademarks and Other Intellectual Property and any and all
        other
        rights (including merchandising rights) now or hereafter existing in any
        Asset;


       

      (iii) The
        sole
        and exclusive right to prosecute and defend all claims or causes of action
        arising out of or related to past, present or future infringement or
        misappropriation of any Asset;

       

      (iv) The
        sole
        and exclusive right to amend, modify, extend, renew, terminate, replace or
        sell
        any Assets in the related Co-Issuer's own name; and

       

      (v) All
        proceeds of the foregoing.

       

      “Release
        Date”:
        The
        date on which Assets are released from the Lien of the Security
        Agreement.

       

      “Release
        Event”:
        With
        respect to any particular Asset, any representation as to such Asset in
        Section 12.12 of the Security Agreement shall prove to have been incorrect
        as of the time made and, as a result thereof, the interests of the Agent
        shall
        be adversely affected as determined by the Agent in its reasonable
        discretion.

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

       

      “Release
        Price”:
        With
        respect to Assets being released from the Lien of the Security Agreement
        in
        accordance with Section 13.3 of the Security Agreement on any Release Date,
        and calculated as of the related Release Date by the Manager (subject to
        the
        Agent's approval), the sum of: 

       

       

      (i) the
        product of (X) the greater of (a) the Value for the Asset to be released
        from
        the Lien of the Security Agreement, divided by the Value of all Assets subject
        to the Lien of the Security Agreement and (b) the Initial Asset Value of
        such
        Asset, divided by the total Initial Asset Values of all Assets and (Y) the
        Outstanding Note Principal Balance of the Notes on such Release Date;
        and

       

       

      (ii) accrued
        but unpaid interest, and interest that is scheduled to accrue, on the
        Outstanding Notes to be redeemed from the Release Date to the ensuing Redemption
        Date for the required redemption of such Notes.

       

      “Relevant
        Entity”:
        The
        meaning given to that term in Section 1.6 of the Security Agreement Supplement.
        

       

      “Renewal
        Trigger Event”:
        Shall
        occur upon a Co-Issuer's failure, prior to the renewal date of a Material
        License Agreement, to extend such agreement or substitute a new agreement
        in
        form with similar terms, or terms more favorable to such Co-Issuer, as the
        prior
        contract or otherwise is acceptable to the Agent.

       

      “Requirement
        of Law”:
        As to
        any Person, the certificate of incorporation and by-laws or other organizational
        or governing documents of such Person, and any law, treaty, rule or regulation,
        determination or order of an arbitrator or a court or other Governmental
        Authority, in each case applicable to or binding upon such Person or any
        of its
        property or to which such Person or any of its property is subject.

       

      “Responsible
        Officer”:
        With
        respect to a particular matter, any officer, to whom such matter is referred
        because of such officer’s knowledge of and familiarity with the particular
        subject.

       

      “Rolling
        6 Month Revenue”:
        With
        respect to any Payment Date or other date of determination, and without
        duplication, the sum of the Collection Period Revenues for the two most recently
        ending Collection Periods as of such date, less
        the sum
        of the aggregate amounts payable pursuant to Sections 14.1(a)(i) and (ii)
        of the
        Security Agreement on such Payment Date and the immediately prior Payment
        Date.

       

      “Rule
        144A”:
        The
        rule of the United States Securities and Exchange Commission so
        named.

       

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

       

      “Sale”:
        The
        meaning ascribed thereto in Section 6.16 of the Security Agreement.

       

      “Schedule
        of Assets”:
        The
        list of Assets set forth as Schedule II to each Security Agreement Supplement,
        as amended from time to time.

       

      “Second
        Stage Covered Jurisdictions”:
        The
        meaning given to that term in the definition of Covered
        Jurisdictions.

       

      “Secured
        Obligations”:
        The
        principal and interest due on the Notes, all Indemnified Amounts, obligations
        of
        the Issuers arising under the Hedge Agreements and all other amounts owed
        to any
        Indemnified Parties under any of the Transaction Documents.

       

      “Securities
        Act”:
        The
        Securities Act of 1933, as amended.

       

      “Security
        Agreement”:
        That
        certain Security Agreement, dated as of March 12, 2007, by and among the
        Issuers
        and the Agent.

       

      “Security
        Agreement Supplement”:
        Any
        agreement, substantially in the form of Exhibit D to the Security Agreement,
        by
        and among the Issuer, a Subsidiary Borrower and the Agent which provides
        for the
        addition of such Subsidiary Borrower to the Security Agreement as a Co-Issuer
        party thereto and, among other things, sets forth certain terms of the related
        Borrowing.

       

      “Stock
        Rights”:
        Any
        securities, dividends or other distributions and any other right or property
        which the Issuer or any Co-Issuer shall receive or shall become entitled
        to
        receive for any reason whatsoever with respect to, in substitution for or
        in
        exchange for any securities or other ownership interests in a Person and
        any
        securities, any right to receive securities and any right to vote or receive
        earnings, in which the Issuer or any Co-Issuer now has or hereafter acquires
        any
        rights, issued by an issuer of such securities. 

       

      “Subsidiary
        Borrower”:
        A
        Brand Subsidiary Borrower or a Franchise Subsidiary Borrower that is an Eligible
        Borrower. 

       

      “Support
        Fund”:
        Athlete's Foot Marketing Support Fund, LLC, a Delaware limited liability
        company. 

       

      “Taxes”:
        The
        meaning given to such term in Section 12.14 of the Security
        Agreement.

       

      “Territory”:
        Shall
        have the meaning as set forth in each Security Agreement Supplement.


       

      “Title
        IV Plan”:
        A
        Pension Plan subject to Title IV of ERISA.

       

      “Total
        Debt Leverage Ratio”:
        For
        any six-month period ending on the last day of any Collection Period, the
        ratio
        of: a) the aggregate Outstanding Note Balance on such date to b) Collection
        Period Revenues for such Collection Period minus any Management Fees and
        any
        Manager Expenses (other than expenditures for advertising purposes paid pursuant
        to Section 14.1(a)(xi) of the Security Agreement) for such Collection Period
        multiplied by two; provided however, that if Total Debt Leverage Ratio is
        determined in any Collection Period after the redemption of any Note (in
        whole
        or in part) has been consummated in such Collection Period and prior to the
        next
        Payment Date, the weighted average aggregate Outstanding Note Balance for
        such
        six month period shall be used. 

       

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

       

      “Trade
        Dress”:
        The
        meaning given to such term in Section 1.6 of the Security Agreement Supplement.
        

       

      “Trademarks”:
        (i)
        The names, marks and/or designations, and all applications and registrations
        therefor that are set forth on Schedule II to each Security Agreement
        Supplement; (ii) all logos, designs and product configuration, packaging
        or
        other distinctive configurations used in connection therewith; and (iii)
        all
        other rights, whether now known or created in the future, relating to any
        of the
        foregoing. 

       

      “Transaction
        Documents”:
        The
        collective reference to the Note Funding Agreement, Security Agreement, the
        Notes, the Management Agreements, Hedge Agreements, Master License Agreement,
        Indemnity Agreement, Contribution Agreement, Advisory Agreement, any blocked
        account agreement and other facility documents to which the Issuer, any
        Co-Issuer, NexCen Brands or Manager is a party.

       

      “UCC”:
        The
        Uniform Commercial Code as in effect from time to time in the State of New
        York;
provided,
        that if
        by reason of mandatory provisions of law, the perfection or the effect of
        non-perfection of any Liens on any Collateral is governed by the Uniform
        Commercial Code as in effect in a jurisdiction other than New York, “UCC” means
        the Uniform Commercial Code as in effect in such other jurisdiction for purposes
        of the provisions hereof relating to such perfection or effect of perfection
        or
        non-perfection.

       

      “Unregistered
        Marks”:
        The
        meaning given to that term in Section 1.6 of the Security Agreement Supplement.
        

       

      “USA
        PATRIOT Act”:
        The
        Uniting and Strengthening America by Providing Appropriate Tools Required
        to
        Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56 (2001),
        as
        amended.

       

      “Value”:
        The
        lower of the acquisition price paid by a Co-Issuer for its Assets and the
        valuation, if any, of such Assets as determined by a valuation specialist
        approved by the Agent; provided, however, that unless otherwise agreed by
        the
        Issuer and the Agent, patents and copyrights held by a Co-Issuer shall have
        a
        value of zero; provided however,
        in the
        case of existing Assets, either (i) the valuation as calculated by the Manager
        and approved by the Agent or (ii) the valuation of such existing Assets as
        determined by a valuation specialist approved by the Agent at the expense
        of the
        Issuer.

       

      
        
          
          

        

        
          25