Unassociated Document


    SECURITY
      AGREEMENT

    


    This
      SECURITY AGREEMENT (the “Agreement”)
      is
      entered into as of July 7, 2008 by and among Driftwood Ventures, Inc., a
      Delaware corporation (the “Company”),
      and
      the persons and entities named on the Schedule of Purchasers attached hereto
      (each individually a
      “Purchaser”
      and
      collectively, the “Purchasers”).
      

    


    WHEREAS,
      on or about the date hereof the Purchasers have purchased from the Company
      certain convertible secured term promissory notes issued by the Company
      (together with any replacements thereof or substitutions therefor, the
“Notes”);
      and

    


    WHEREAS,
      it is a condition to the obligation of the Purchasers to purchase the Notes
      that
      the Company shall have executed and delivered this Agreement to the
      Purchasers.

    


    NOW,
      THEREFORE, in consideration of the premises and to induce the Purchasers to
      purchase the Notes and for other good and valuable consideration, the Company
      hereby agrees with the Purchasers as follows:

    


    1. Defined
      Terms.
      The
      following terms shall have the following meanings:

    


    “Accounts”,
      “Chattel Paper”, “Documents”, “Equipment”, “Fixtures”, “General Intangibles”,
“Goods”, “Instruments”, “Inventory”, “Proceeds” and
“Securities”
      shall
      have the respective meanings as defined in the Code.

    


    “Code”
      shall
      mean the Uniform Commercial Code as from time to time in effect in the State
      of
      New York.

    


    “Collateral”
      shall
      have the meaning assigned to such term in Section 2(a) of this
      Agreement.

    


    “Copyrights”
mean
      all copyrights (registered or otherwise) and registrations and applications
      for
      registration thereof, and all rights therein provided by multinational treaties
      or conventions.

    


    “Event
      of Default”
      shall
      mean the Company’s failure to pay or discharge the Obligations in full in
      accordance with the terms of the Notes and this Agreement, the occurrence of
      an
      Event of Default (as defined in the Notes) or the Company’s breach of any
      provision of this Agreement.

    


    “Intellectual
      Property”
      shall
      mean, without limitation, any
      and
      all Patents,
      trade
      secrets, confidential business information, formula, Copyrights, mask works,
      claims of infringement against third parties, licenses, permits, license rights
      to or of technologies, contract rights with employees, consultants or third
      parties, Trademarks, databases, computer programs and other computer software
      interfaces, know-how, customer lists, inventions and discoveries, and other
      such
      rights generally classified as intangible, intellectual property assets in
      accordance with GAAP possessed or owned by Company, or which the Company now
      or
      hereafter has a right to use or in which the Company now or hereafter has an
      interest.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Patents”
mean
      all national (including the United States) and multinational statutory invention
      registrations, patents, patent registrations and patent applications, including
      all reissues, divisions, continuations, continuations-in-part, extensions and
      reexaminations, and all rights therein provided by multinational treaties or
      conventions and all improvements to the inventions disclosed in each such
      registration, patent or application.

    


    “Requisite
      Holders”
      shall
      mean the holders of Notes representing at least seventy-five percent (75%)
      of
      the outstanding principal amount of all Notes then outstanding.

    


    “Obligations”
      shall
      mean the unpaid principal amount of, and interest on, the Notes.

    


    “Ratably”
      shall
      mean in the ratio that the outstanding principal amount of the Note held by
      each
      Purchaser bears to the aggregate outstanding principal of all Notes held by
      all
      Purchasers.

    


    “Trademarks”
mean
      all trademarks, service marks, trade dress, logos, trade names and corporate
      names, whether or not registered, including all common law rights, and
      registrations and applications for registration thereof, including, but not
      limited to, all marks registered in the United States Patent and Trademark
      Office, the Trademark Offices of the States and Territories of the United States
      of America, and the Trademark Offices of other nations throughout the world,
      and
      all rights therein provided by multinational treaties or
      conventions.

    


    2. Grant
      of Security Interest; Action by Requisite Holders.

    


    (a) To
      secure
      the Company’s prompt, punctual, and faithful performance of all and each of the
      Obligations (whether at the stated maturity, by acceleration or otherwise),
      the
      Company hereby grants to the Purchasers a continuing security interest in and
      to
      and assigns to the Purchasers all of the Company’s right, title and interest in
      and to all of the Company’s property, assets and rights of every kind and
      nature, wherever located and whether now owned or hereafter acquired or arising,
      including, without limitation the following, and all products, Proceeds,
      substitutions, and accessions of or to the same, (collectively, the “Collateral”):

    


    (1) All
      Accounts and accounts receivable;

    


    (2) All
      Inventory;

    


    (3) All
      contract rights;

    


    (4) All
      General Intangibles;

    


    
      
        
        

      

      
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    (5) All
      Goods;

    


    (6) All
      Chattel Paper;

    


    (7) All
      Fixtures;

    


    (8) All
      Intellectual Property;

    


    (9) All
      Equipment;

    


    (10) All
      books, records, and information relating to the Collateral and/or to the
      operation of the Company’s business, and all rights of access to such books,
      records, and information, and all property in which such books, records, and
      information are stored, recorded, and maintained;

    


    (11) All
      Instruments, documents of title, Documents, policies and certificates of
      insurance, Securities, deposits, deposit accounts, money, cash, or other
      property;

    


    (12) All
      federal, state and local tax refunds and/or abatements to which the Company
      is,
      or becomes entitled, no matter how or when arising, including, but not limited
      to any loss carry back tax refund;

    


    (13) All
      insurance proceeds, refunds, and premium rebates, including, without limitation,
      proceeds of fire and credit insurance, whether any of such proceeds, refunds
      and
      premium rebates arise out of any of the foregoing, or otherwise;

    


    (14) All
      liens, guaranties, rights, remedies, and privileges pertaining to any of the
      foregoing, including the right of stoppage in transit; and

    


    (15) All
      other
      assets of every nature and description, whether they be now existing or
      hereafter arising and whether now or hereafter belonging to the
      Company.

    


    (b) Notwithstanding
      anything to the contrary contained elsewhere in this Agreement or the Notes,
      each Purchaser by its execution and delivery of this Agreement hereby: (i)
      irrevocably authorizes and appoints each other Purchaser, acting with the
      consent or authorization of the Requisite Holders, to take on behalf of all
      Purchasers, any and all actions required or permitted to be taken by the
      Purchasers under this Agreement and (ii) agrees with each other Purchaser that
      any and all actions required or permitted to be taken by the Purchasers or
      any
      of them under this Agreement may be taken only upon the written consent or
      authorization of the Requisite Holders and that such Purchaser will not take
      any
      action required or permitted to be taken by the Purchasers under this Agreement,
      or otherwise take any action to enforce any of the terms of this Agreement,
      in
      the absence of such written consent or authorization. The Company may rely
      on
      any such written consent or authorization given to it and signed by the
      Requisite Holders until such consent or authorization is withdrawn or replaced
      by another such consent or authorization signed by the Requisite
      Holders.

     

    
      
        
        

      

      
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    (c) Notwithstanding
      anything to the contrary contained elsewhere in this Agreement, the Purchasers
      shall share Ratably all proceeds from or distributions of or with respect to
      the
      Collateral.

    


    Notwithstanding
      the foregoing provisions of this Section 2, the grant, assignment and transfer
      of a security interest as provided herein shall not extend to, and the term
      “Collateral” shall not include any Contract, Instrument or Chattel Paper in
      which the Company has any right, title or interest if and to the extent such
      Contract, Instrument or Chattel Paper includes a provision containing a
      restriction on assignment such that the creation of a security interest in
      the
      right, title or interest of the Company therein would be prohibited and would,
      in and of itself, cause or result in a default thereunder enabling another
      person party to such Contract, Instrument or Chattel Paper to enforce any remedy
      with respect thereto; provided that the foregoing exclusion shall not apply
      if
      (i) such prohibition has been waived or such other person has otherwise
      consented to the creation hereunder of a security interest in such Contract,
      Instrument or Chattel Paper or (ii) such prohibition would be rendered
      ineffective pursuant to Sections 9-408(a) or 9-409(a) of the Code, as applicable
      and as then in effect in any relevant jurisdiction, or any other applicable
      law
      (including the Bankruptcy Code) or principles of equity); provided further
      that
      immediately upon the ineffectiveness, lapse or termination of any such
      provision, the Collateral shall include, and the Company shall be deemed to
      have
      granted a security interest in, all its rights, title and interests in and
      to
      such Contract, Instrument or Chattel Paper as if such provision had never been
      in effect; and provided further that the foregoing exclusion shall in no way
      be
      construed so as to limit, impair or otherwise affect any Purchasers
      unconditional continuing security interest in and to all rights, title and
      interests of the Company in or to any payment obligations or other rights to
      receive monies due or to become due under any such Contract, Instrument or
      Chattel Paper and in any such monies and other proceeds of such Contract,
      Instrument or Chattel Paper.

    


    3. Rights
      of Purchasers; Limitations on Purchasers’ Obligations.

    


    (a) Company
      Remains Liable under Accounts.
      Anything herein to the contrary notwithstanding, the Company shall remain liable
      under each of the Accounts to observe and perform all the conditions and
      obligations to be observed and performed by it thereunder, all in accordance
      with the terms of any agreement giving rise to each such Account. The Purchasers
      shall not have any obligations or liability under any Account (or any agreement
      giving rise thereto) by reason of or arising out of this Agreement or the
      receipt by the Purchasers of any payment relating to such Account pursuant
      hereto, nor shall the Purchasers be obligated in any manner to perform any
      of
      the obligations of the Company under or pursuant to any Account (or any
      agreement giving rise thereto), to make any payment, to make any inquiry as
      to
      the nature or the sufficiency of any payment received by them or as to
      sufficiency of any performance by any party under any Account (or any agreement
      giving rise thereto), to present or file any claim, to take any action to
      enforce any performance or to collect the payment of any amounts which may
      have
      been assigned to them or to which they may be entitled at any time or
      times.

     

    
      
        
        

      

      
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    (b) Notice
      to Account Debtors.
      Upon
      the request of the Purchasers at any time after the occurrence and during the
      continuance of an Event of Default, the Company shall notify account debtors
      on
      the Accounts that the Accounts have been assigned to the Purchasers and that
      payments in respect thereof shall be made directly to the Purchasers. The
      Purchasers may in their own name or in the name of others communicate with
      account debtors on the Accounts to verify with them to their satisfaction the
      existence, amount and terms of any Accounts.

    


    (c) Collection
      on Accounts.
      The
      Purchasers hereby authorize the Company to collect the Accounts, subject to
      the
      Purchasers’ rights to curtail or terminate said authority at any time after the
      occurrence and during the continuance of an Event of Default.

    


    4. Covenants
      of the Company.
      The
      Company covenants and agrees with the Purchasers that from and after the date
      of
      this Agreement until the Obligations are paid or otherwise discharged in
      full:

    


    (a) Location
      of Collateral; Other Liens.
      The
      Company will notify the Purchasers, at least twenty (20) days prior to any
      such
      event, of any change in the Company’s exact legal name, any change in its place
      of business or location of the Collateral or its establishment of any new place
      of business or location of Collateral or office where its records concerning
      Accounts and other assets are kept. The Company is the owner of the Collateral
      and will be the owner of the Collateral hereafter acquired free from any adverse
      lien, security interest or encumbrance (other than is permitted pursuant to
      Section 4(f) hereof), and the Company will defend the Collateral against the
      claims and demands of all persons at any time claiming the same or any interest
      therein. Except those in respect of Senior Indebtedness, no financing statements
      covering any Collateral or any proceeds thereof are on file in any public
      office.

    


    (b) Further
      Documentation; Pledge of Instruments and Chattel Paper.
      At any
      time and from time to time, upon the written request of the Purchasers, and
      at
      the sole expense of the Company, the Company will promptly and duly execute
      and
      deliver such further instruments and documents and take such further action
      as
      the Purchasers may reasonably request for the purpose of obtaining or preserving
      the full benefits of this Agreement and of the rights and powers herein granted,
      including, without limitation, the filing of any financing or continuation
      statements under the Code in effect in any jurisdiction with respect to the
      liens created hereby. The Company also hereby authorizes the Purchasers to
      file
      any such financing or continuation statement without the signature of the
      Company to the extent permitted by applicable law. A carbon, photographic or
      other reproduction of this Agreement shall be sufficient as a financing
      statement for filing in any jurisdiction if so permitted by applicable law.
      If
      any amount payable under or in connection with any of the Collateral shall
      be or
      become evidenced by any Instrument or Chattel Paper, such Instruments or Chattel
      Paper shall be immediately delivered to the Purchasers or their duly appointed
      agent, duly endorsed in a manner satisfactory to the Purchasers, to be held
      as
      Collateral pursuant to this Agreement.

     

    
      
        
        

      

      
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    (c) Maintenance
      of Records; Inspection of Collateral.
      The
      Company will keep and maintain at its own cost and expense satisfactory and
      complete records of the Collateral, including without limitation, a record
      of
      all payments received and all credits granted with respect to the Accounts.
      The
      Company will permit the Purchasers to inspect the Collateral at any reasonable
      time.

    


    (d) Compliance
      with Laws, Etc.
      The
      Company will comply in all material respects with all laws, rules, regulations
      and orders of any governmental authority applicable to the Collateral or any
      part thereof, provided, however, that the Company may contest any such law,
      rule, regulation or order in any reasonable manner which shall not, in the
      reasonable opinion of the Purchasers, adversely affect the Purchasers’ rights or
      the priority of their liens on the Collateral.

    


    (e) Payment
      of Obligations.
      The
      Company will pay promptly when due all taxes, assessments and governmental
      charges or levies imposed upon the Collateral or in respect of its income or
      profits therefrom as well as all claims of any kind (including, without
      limitation, claims for labor, materials and supplies) against or with respect
      to
      the Collateral, except that no such charge need be paid if (i) the validity
      thereof is being contested in good faith by appropriate proceedings, (ii) such
      proceedings do not involve any material danger of the sale, forfeiture or loss
      of any of the Collateral or any interest therein and (iii) such charge is
      adequately reserved against on the Company’s books in accordance with generally
      accepted accounting principles.

    


    (f) Limitation
      on Liens on Collateral.
      The
      Company will not create, incur or permit to exist, will defend the Collateral
      against, and will take such other action as is necessary to remove, any lien
      or
      claim on or to the Collateral, except for (i) those liens, if any, existing
      on
      the date hereof as set out in Schedule
      A
      hereto;
      (ii) liens to secure taxes, assessments and other governmental charges in
      respect of obligations not overdue or liens on properties to secure claims
      for
      labor, material or supplies in respect of obligations not overdue; (iii)
      deposits or pledges made in connection with, or to secure payment of, workmen’s
      compensation, unemployment insurance, old age pensions or other social security
      obligations; (iv) liens in respect of judgments or awards that have been in
      force for less than the applicable period for taking an appeal so long as
      execution is not levied thereunder or in respect of which the Company shall
      at
      the time in good faith be prosecuting an appeal or proceedings for review and
      in
      respect of which a stay of execution shall have been obtained pending such
      appeal or review; (v) liens of carriers, warehousemen, mechanics and materialmen
      or other like liens arising in the ordinary course of business which secure
      amounts not overdue for a period of more than sixty (60) days or which are
      being
      contested in good faith by appropriate proceedings; (vi) purchase money security
      interests in, or lease obligations incurred to finance the acquisition of,
      property acquired after the date hereof, which security interests or lease
      obligations cover only the property so acquired; (vii) liens that are
      subordinate to the security interest granted in the Collateral pursuant to
      this
      Agreement; (viii) liens to Trinad Management, LLC in connection with the
      $750,000 debt owed to Trinad Management, LLC that will be pari
      passu
      with the
      liens granted to the Purchasers hereunder (as Trinad Management, LLC will be
      signatory hereto through the execution of a joinder signature page attached
      hereto) and (ix) extensions, refinancings, modifications, amendments and
      restatements of items (i), (vi) and (vii) above, provided that the principal
      amount of any obligation secured by such lien is not increased or the terms
      thereof are not modified to impose more burdensome terms upon the Company and
      no
      other material term or provision is materially modified, and will defend the
      right, title and interest of the Purchasers in and to any of the Collateral
      against the claims and demands of all persons whomsoever.

     

    
      
        
        

      

      
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    (g) Limitations
      on Dispositions of Collateral.
      The
      Company will not sell, transfer, lease or otherwise dispose of any of the
      Collateral, or attempt, offer or contract to do so, except in the ordinary
      course of business and except for the loan to Green Screen Interactive Software,
      Inc. as contemplated under the use of proceeds in Section 8(e) of the Note
      Purchase Agreement, by and among the Company and the Purchasers named on the
      Schedule of Purchasers attached thereto, dated July 7, 2008. 

    


    (h) Further
      Identification of Collateral.
      The
      Company will furnish to the Purchasers from time to time statements and
      schedules further identifying and describing the Collateral and such other
      reports in connection with the Collateral as the Purchasers may reasonably
      request, all in reasonable detail.

    


    5. Purchasers’
      Appointment as Attorney-in-Fact.

    


    (a) Powers.
      The
      Company hereby appoints the Purchasers and any officer or agent thereof, with
      full power of substitution, as its true and lawful attorney-in-fact with full
      power and authority in the place and stead of the Company and in the name of
      the
      Company or in its own name, from time to time in the discretion of the
      Purchasers so long as an Event of Default has occurred and is continuing, for
      the purpose of carrying out the terms of this Agreement, to take any and all
      appropriate action and to execute any and all instruments which may be necessary
      or desirable to accomplish the purposes of this Agreement, and, without limiting
      the generality of the foregoing, the Company shall grant the Purchasers the
      power and right, on behalf of the Company, without notice to or assent by the
      Company, to do the following:

    


    (i) In
      the
      name of the Company or its own name, or otherwise, to take physical possession
      of the Collateral and to maintain such possession on the Company’s premises or
      to remove the Collateral or any part thereof to such other places as the
      Purchasers may desire;

    


    (ii) In
      the
      name of the Company or its own name, or otherwise, to endorse and collect any
      checks, drafts, notes, acceptances or other instruments for the payment of
      moneys due under any Account, Instrument, General Intangible or with respect
      to
      any other action or proceeding in any court of law or equity or otherwise deemed
      appropriate by the Purchasers for the purpose of collecting any and all such
      moneys due under any Account, Instrument, General Intangible or with respect
      to
      any other Collateral whenever payable;

     

    
      
        
        

      

      
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    (iii) To
      pay or
      discharge taxes and liens levied or placed on or threatened against the
      Collateral;

    


    (iv) To
      direct
      any party liable for any payment under any of the Collateral to make payment
      of
      any and all moneys due or to become due thereunder directly to the Purchasers
      or
      as the Purchasers shall direct;

    


    (v) To
      ask or
      demand for, collect, receive payment of and receipt for, any and all moneys,
      claims and other amounts due or to become due at any time in respect of or
      arising out of any Collateral;

    


    (vi) To
      sign
      and endorse any invoices, freight or express bill, bills of lading, storage
      or
      warehouse receipts, drafts against debtors, assignments, verifications, notices
      and other documents in connection with any of the Collateral;

    


    (vii) To
      open
      mail addressed to the Company and to change the Post Office Box or mailing
      address of the Company and use the Company’s stationery and billing forms or
      facsimiles thereof, for the purpose of collecting Accounts and realizing upon
      the Collateral;

    


    (viii) To
      commence and prosecute any suits, actions or proceedings at law or in equity
      in
      any court of competent jurisdiction to collect the Collateral or any part
      thereof and to enforce any other right in respect of any
      Collateral;

    


    (ix) To
      defend
      any suit, action or proceeding brought against the Company with respect to
      any
      Collateral;

    


    (x) To
      settle, compromise or adjust any suit, action or proceeding described in
      Subsection (ix) above and, in connection therewith, to give such discharges
      or
      releases as the Purchasers may deem appropriate;

    


    (xi) To
      assign
      any patent or trademark of the Company (along with the goodwill of the business
      to which any such patent or trademark pertains), throughout the world for such
      term or terms, on such conditions, and in such manner, as the Purchasers shall
      in their sole discretion determine; and

    


    (xii) Generally,
      to sell, transfer, pledge and make any agreement with respect to or otherwise
      deal with any of the Collateral as fully and completely as though the Purchasers
      were the absolute owners thereof for all purposes, and to do, at the Purchasers’
option and the Company’s expense, at any time, or from time to time, all acts
      and things which the Purchasers deem necessary to protect, preserve or realize
      upon the Collateral and the Purchasers’ liens thereon and to effect the intent
      of this Agreement, all as fully and effectively as the Company might
      do.

     

    
      
        
        

      

      
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    The
      Company hereby ratifies all that said attorneys shall lawfully do or cause
      to be
      done by virtue hereof. This power of attorney shall be a power coupled with
      an
      interest and shall be irrevocable.

    


    (b) No
      Duty on Part of the Purchasers.
      The
      powers conferred on the Purchasers hereunder are solely to protect the
      Purchasers’ interests in the Collateral and shall not impose any duty upon them
      to exercise any such powers. The Purchasers shall be accountable only for
      amounts that they actually receive as a result of the exercise of such powers,
      and neither they nor any of their officers, directors, employees or agents
      shall
      be responsible to the Company for any act or failure to act hereunder, except
      for gross negligence or willful misconduct.

    


    6. Performance
      by Purchasers of the Company’s Obligations.
      If the
      Company fails to perform or comply with any of its agreements contained herein
      and the Purchasers, as provided for by the terms of this Agreement, shall
      perform or comply, or otherwise cause performance or compliance, with such
      agreement, the expenses of the Purchasers incurred in connection with such
      performance or compliance shall be payable by the Company to the Purchasers
      on
      demand and shall constitute Obligations secured hereby.

    


    7. Remedies.
      If an
      Event of Default shall occur and be continuing, the Purchasers may exercise,
      in
      addition to all other rights and remedies granted to them in this Agreement
      and
      in any other instrument or agreement securing, evidencing or relating to the
      Obligations, all rights and remedies of a secured party under the Code. Without
      limiting the generality of the foregoing, the Purchasers, without demand of
      performance or other demand, presentment, protest, advertisement or notice
      of
      any kind (except any notice required by law referred to below) to or upon the
      Company or any other person (all and each of which demands, defenses,
      advertisements and notices are hereby waived), may in such circumstances
      forthwith sell, lease, assign, give option or options to purchase, or otherwise
      dispose of and deliver the Collateral or any part thereof (or contract to do
      any
      of the foregoing), in one or more parcels at public or private sale or sales,
      at
      any exchange, broker’s board or office of the Purchasers or elsewhere upon such
      terms and conditions as they may deem advisable and at such prices as they
      may
      deem best, for cash or on credit or for future delivery without assumption
      of
      any credit risk. The Purchasers shall have the right upon any such public sale
      or sales, and, to the extent permitted by law, upon any such private sale or
      sales, to purchase the whole or any part of the Collateral so sold, free of
      any
      right or equity of redemption in the Company, which right or equity is hereby
      waived or released. The Company further agrees, at the Purchasers’ request, to
      assemble the Collateral and make it available to the Purchasers at places that
      the Purchasers shall reasonably select, whether at the Company’s premises or
      elsewhere. The Purchasers shall apply the net proceeds of any such collection,
      recovery, receipt, appropriation, realization or sale, after deducting all
      reasonable costs and expenses of every kind incurred therein or incidental
      to
      the care or safekeeping of any of the Collateral or in any way relating to
      the
      Collateral or the rights of the Purchasers hereunder, including, without
      limitation, reasonable attorney’s fees and disbursements, to the payment in
      whole or in part of the Obligations, in such order as the Purchasers may elect,
      and only after such application and after the payment by the Purchasers of
      any
      other amount required by any provision of law, need the Purchasers account
      for
      the surplus, if any, to the Company. To the extent permitted by applicable
      law,
      the Company waives all claims, damages and demands it may acquire against the
      Purchasers arising out of the exercise by the Purchasers of any of their rights
      hereunder. If any notice of a proposed sale or other disposition of Collateral
      shall be required by law, such notice shall be deemed reasonable and proper
      if
      given at least five (5) days before such sale or other disposition. The Company
      shall remain liable for any deficiency if the proceeds of any sale or other
      disposition of the Collateral are insufficient to pay the Obligations and the
      fees and disbursements of any attorneys employed by the Purchasers to collect
      such deficiency.

     

    
      
        
        

      

      
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    8. Term
      of Agreement.
      This
      Agreement and the security interest in the Collateral granted by the Company
      to
      the Purchasers hereunder shall terminate on the date on which all payments
      under
      the Notes have been made in full or otherwise converted pursuant to the terms
      thereof and all other Obligations have been paid or discharged in full. Promptly
      following such termination, the Purchasers will join in executing any
      termination statement and other filings with respect to any financing statement
      executed and filed pursuant to this Agreement or required for evidencing
      termination of this Agreement or the Purchasers’ security interest in the
      Collateral and file any such termination statements or other filings with the
      appropriate agencies.

    


    9. Limitation
      on Duties Regarding Preservation of Collateral.
      The
      Purchasers’ sole duty with respect to the custody, safekeeping and physical
      preservation of the Collateral in its possession, under Section 9-207 of the
      Code or otherwise, shall be to deal with it in the same manner as the Purchasers
      deal with similar property for their own account. Neither the Purchasers nor
      any
      of their directors, officers, employees or agents shall be liable for failure
      to
      demand, collect or realize upon all or any part of the Collateral or for any
      delay in doing so or shall be under any obligation to sell or otherwise dispose
      of any Collateral upon the request of the Company or otherwise.

    


    10. Powers
      Coupled with an Interest.
      All
      authorizations and agencies herein contained with respect to the Collateral
      are
      irrevocable and powers coupled with an interest.

    


    11. Severability.
      Any
      provision of this Agreement which is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining
      provisions hereof, and any such prohibition or unenforceability in any
      jurisdiction shall not invalidate or render unenforceable such provision in
      any
      other jurisdiction.

    


    12. Headings.
      The
      headings used in this Agreement are for convenience of reference only and are
      not to affect the construction hereof or be taken into consideration in the
      interpretation hereof.

    


    13. No
      Waiver; Cumulative Remedies.
      The
      Purchasers shall not by act (except by a written instrument pursuant to Section
      14 hereof), delay, indulgence, omission or otherwise be deemed to have waived
      any right or remedy hereunder or to have acquiesced in any default or Event
      of
      Default or in any breach of any of the terms and conditions hereof. No failure
      to exercise, nor any delay in exercising, on the part of the Purchasers, any
      right, power or privilege hereunder shall operate as a waiver thereof. No single
      or partial exercise of any right, power or privilege hereunder shall preclude
      any other or further exercise thereof or the exercise of any other right, power
      or privilege. A waiver by the Purchasers of any right or remedy hereunder on
      any
      one occasion shall not be construed as a bar to any right or remedy that the
      Purchasers would otherwise have on any future occasion. The rights and remedies
      herein provided are cumulative, may be exercised singly or concurrently and
      are
      not exclusive of any rights or remedies provided by law.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    14. Waivers
      and Amendments; Successors and Assigns.
      None of
      the terms or provisions of this Agreement may be waived, amended, supplemented
      or otherwise modified except by a written instrument executed by the Company
      and
      the Requisite Holders; provided,
      however,
      that no
      provision of this Agreement may be waived, amended, supplemented or otherwise
      modified without the consent of any Purchaser if such waiver, amendment,
      supplement or other modification would materially adversely affect the rights
      of
      such Purchaser in a manner different than it affects the rights of the Requisite
      Holders. This Agreement shall be binding upon the successors and assigns of
      the
      Company and shall inure to the benefit of the Purchasers and their respective
      successors and permitted assigns, provided that this Agreement may not be
      assigned by a Purchaser without the prior written consent of the
      Company.

    


    15. Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the law of
      the
      State of New York without giving effect to the conflicts of laws principles
      thereof.

    


    16. Termination.
      The
      security interest granted hereunder shall continue and remain in full force
      and
      effect until the payment or other discharge in full of all
      Obligations.

    


    17. Counterparts.
      This
      Agreement may be executed in multiple counterparts and by the various parties
      hereto on separate counterparts, each of which when so executed and delivered
      shall be an original, but all of which shall together constitute one and the
      same agreement.

    


    18. Notices.
      All
      notices, requests, consents and other communications required or permitted
      to be
      given under this Agreement shall be in writing and shall be deemed to be duly
      given if (a) personally delivered or (b) if sent by facsimile, registered or
      certified mail (return receipt requested) postage prepaid or by reputable
      overnight courier and designated for next day delivery, addressed to such party
      at the address set forth below or such other address as may hereafter be
      designated by a party to all other parties to this Agreement by proper notice
      in
      accordance with this Section 18:

     

    
      
        	
                If
                  to the
                  Company:         

              	Driftwood
                Ventures, Inc.
	 	2121 Avenue of the
                Stars
	 	Suite 2550
	 	
                Los
                  Angeles, CA 90067

              


      

    

    


    If
      to any
      Purchaser:  at
      its
      address shown on the Schedule of Purchasers attached hereto.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    All
      such
      notices, requests, consents and other communications shall be deemed delivered
      and received (a) in the case of personal delivery or facsimile transmission,
      when received as evidenced by an acknowledgment of receipt thereof, (b) if
      sent
      by registered or certified mail, three (3) Business Days after mailing and
      (b)
      if sent by courier, one (1) Business Day after delivery to the courier. For
      purposes hereof, a “Business
      Day”
      is any
      day other than a Saturday, Sunday or other day on which commercial banks are
      authorized or required by law to close in New York City.

     

    


    [Remainder
      of Page Intentionally Left Blank]

    


    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF,
      each
      Purchaser and the Company have caused this Security Agreement to be executed
      as
      an instrument under seal by their authorized representatives as of the date
      first written above.

     

     

    
      	 	
              COMPANY:

               

            
	 	
              DRIFTWOOD
                VENTURES, INC.

               

               

              By:/s/
                Charles Bentz

              Name:
                Charles
                Bentz

              Title:
                Chief
                Financial Officer

            


    

     

     

    [Additional
      Signature Page Follows]

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    


    IN
      WITNESS WHEREOF,
      each
      Purchaser and the Company have caused their respective signature page to this
      Security Agreement to be duly executed as of the date first written
      above.

     

     

    
      	 	
              PURCHASERS:

               

            
	 	
              TRINAD
                CAPITAL MASTER FUND, LTD.

               

               

              By: /s/
                Jay Wolf

              Name:
                Jay Wolf

              Title:
                Managing
                Director of Trinad Management, LLC, its Manager

            
	 	
               

               

              BACK
                BAY LLC

               

               

              By: /s/
                Howard Smuckler 

              Name:
                Howard Smuckler

              Title:
                Chief Financial Officer of Roxbury LLC, its
                Manager

            


    

    


    [Additional
      Signature Page Follows]

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    Counterpart
      Signature Page 

    to

    SECURITY
      AGREEMENT

    


    


    By
      execution and delivery of this Counterpart Signature Page, the undersigned
      does
      hereby become a party to that certain Security Agreement by and among Driftwood
      Ventures, Inc., a Delaware corporation (the “Company”), the Agent (as defined
      therein) and the Purchasers (as defined therein) dated as of July 7, 2008 (the
      “Security Agreement”), as a Purchaser, and is entitled to all of the benefits
      under and is subject to all of the obligations, restrictions and limitations
      set
      forth in the Security Agreement that are applicable to the Purchasers. This
      Counterpart Signature Page shall take effect and shall become a part of said
      Security Agreement immediately upon execution.

    


    
      	 	
              PURCHASER:

               

              CIPHER
                06 LLC

            
	 	
               

               

              By:
                /s/
                Jason Adelman

              Name:
                Jason Adelman

              Title:
                Managing Member

            


    

     

    [Additional
      Signature Page Follows]

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    JOINDER

    to

    SECURITY
      AGREEMENT

    


    


    By
      execution and delivery of this Joinder, the undersigned does hereby become
      a
      party to that certain Security Agreement by and among Driftwood Ventures, Inc.,
      a Delaware corporation (the “Company”), the Agent (as defined therein) and the
      Purchasers (as defined therein) dated as of July 7, 2008 (the “Security
      Agreement”), as a Purchaser, and is entitled to all of the benefits under and is
      subject to all of the obligations, restrictions and limitations set forth in
      the
      Security Agreement that are applicable to the Purchasers. This Joinder shall
      take effect and shall become a part of said Security Agreement immediately
      upon
      execution.

    


    
      	 	
              TRINAD
                MANAGEMENT, LLC

               

               

              By: /s/
                Jay Wolf

              Name:
                Jay Wolf

              Title:
                Managing Director

            


    

    


    


    [Additional
      Signature Page Follows]

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      OF PURCHASERS

    


    


    
      	
              Name
                and Address

            	
              Loan
                Amount

            
	
              Trinad
                Capital Master Fund, Ltd.

              2121
                Avenue of the Stars

              Suite
                1650

              Los
                Angeles, CA 90067

               

            	
              $2,500,000

            
	
              Back
                Bay LLC

              c/o
                Roxbury LLC

              6355
                Topanga Canyon Boulevard

              Suite
                335 

              Woodland
                Hills, CA 61367

               

            	
              $2,000,000

            
	
              Cipher
                06 LLC 

              590
                Madison Ave - Fifth Floor

              New
                York, NY 10022

               

            	
              $150,000

            


    

    



    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    


    Schedule
      A

    


    Existing
      Liens

     

    
      
        
        

      

      
        18