SECURITY
AGREEMENT

    


    SECURITY
AGREEMENT (this “Agreement”), dated as
of March 23, 2010, by and among Phreadz USA, LLC, a Nevada limited liability
company (“Phreadz”), Universal
Database of Music USA, LLC, a Nevada limited liability company (“UDM”, together with
Phreadz, the “Issuers”), and the
secured parties signatory hereto and their respective endorsees, transferees
(collectively, the “Secured
Party”).

    


    WITNESSETH:

    


    WHEREAS,
pursuant to a Subscription Agreement (the “Subscription
Agreement”), dated the date hereof, between Issuer and Professional
Capital Partners, Ltd., a British Virgin Islands company (“PCP”), the Issuers
agreed to issue to PCP and PCP has agreed to purchase from Issuers an 8% Secured
Promissory Note, due on the earlier to occur of (A) the initial closing of a
Subsequent Equity Financing (as defined in the Subscription Agreement or (B)
June 30, 2010 (the “Note”);

    


    WHEREAS,
the Issuers have previously issued promissory notes in the aggregate principal
amount of $875,000 (the “Prior Notes”,
together with the Note, the “Notes”) to the
signatories hereto other than PCP (the “Other
Noteholders”);

    


    WHEREAS,
in order to induce the PCP to purchase the Note and procure consent of the Other
Noteholders to allow for such issuance (which consent is deemed hereby granted
by their signature hereto), the Issuers have agreed to execute and deliver to
the Secured Party this Agreement for the benefit of the Secured Party and to
grant to it a first priority security interest in certain Intellectual Property
(defined below) of the Issuers to secure the prompt payment, performance and
discharge in full of all of the Issuers’ obligations under the Note and the
Subscription Agreement.

    


    NOW,
THEREFORE, in consideration of the agreements herein contained and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:

    


    1.           Certain Definitions.
As used in this Agreement, the following terms shall have the meanings set forth
in this Section 1. Terms used but not otherwise defined in this Agreement that
are defined in Article 9 of the UCC (such as “general intangibles”
and “proceeds”)
shall have the respective meanings given such terms in Article 9 of the
UCC.

    


    (a)           “Collateral” means the
collateral in which the Secured Party is granted a security interest by this
Agreement and which shall include the following, whether presently owned or
existing or hereafter acquired or coming into existence, and all additions and
accessions thereto and all substitutions and replacements thereof, and all
proceeds, products and accounts thereof, including, without limitation, all
proceeds from the sale or transfer of the Collateral and of insurance covering
the same and of any tort claims in connection therewith:

    


    (i)           All
Goods of the Issuers, including, without limitations, all machinery, equipment,
computers, motor vehicles, trucks, tanks, boats, ships, appliances, furniture,
special and general tools, fixtures, test and quality control devices and other
equipment of every kind and nature and wherever situated, together with all
documents of title and documents representing the same, all additions and
accessions thereto, replacements therefor, all parts therefor, and all
substitutes for any of the foregoing and all other items used and useful in
connection with the Issuers’ businesses and all improvements thereto
(collectively, the “Equipment”);
and


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    (ii)           All
Inventory of the Issuers; and

    


    (iii)           All
of the Issuers’ contract rights and general intangibles, including, without
limitation, all partnership interests, stock or other securities, licenses,
distribution and other agreements, computer software development rights, leases,
franchises, customer lists, quality control procedures, grants and rights,
goodwill, trademarks, service marks, trade styles, trade names, patents, patent
applications, copyrights, deposit accounts, and income tax refunds
(collectively, the “General
Intangibles”); and

    


    (iv)           All
Receivables of the Issuers including all insurance proceeds, and rights to
refunds or indemnification whatsoever owing, together with all instruments, all
documents of title representing any of the foregoing, all rights in any
merchandising, goods, equipment, motor vehicles and trucks which any of the same
may represent, and all right, title, security and guaranties with respect to
each Receivable, including any right of stoppage in transit; and

    


    (v)           All
of the Issuers’ documents, instruments and chattel paper, files, records, books
of account, business papers, computer programs and the products and proceeds of
all of the foregoing Collateral set forth in clauses (i)-(iv)
above.

    


    (b)           “Issuers” shall mean,
collectively, the Issuers and all of the subsidiaries of Issuers, a list of
which is contained in Schedule A, attached hereto.

    


    (c)           “Obligations” means
all of the Issuers’ obligations under this Agreement, the Notes and the
Subscription Agreement in each case, whether now or hereafter existing,
voluntary or involuntary, direct or indirect, absolute or contingent, liquidated
or unliquidated, whether or not jointly owed with others, and whether or not
from time to time decreased or extinguished and later decreased, created or
incurred, and all or any portion of such obligations or liabilities that are
paid, to the extent all or any part of such payment is avoided or recovered
directly or indirectly from the Secured Party as a preference, fraudulent
transfer or otherwise as such obligations may be amended, supplemented,
converted, extended or modified from time to time.

    


    (d)           “UCC” means the
Uniform Commercial Code, as currently in effect in the State of New
York.

    


    2.           Grant of Security
Interest. As an inducement for PCP to purchase the Note and procure
consent of the Other Noteholders to allow for such issuance and to secure the
complete and timely payment, performance and discharge in full, as the case may
be, of all of the Obligations, the Issuers hereby, unconditionally and
irrevocably, pledge, grant and hypothecate to the Secured Party, a continuing
security interest in, a continuing first lien upon, an unqualified right to
possession and disposition of and a right of set-off against, in each case to
the fullest extent permitted by law, all of the Issuers’ right, title and
interest of whatsoever kind and nature in and to the Collateral (the “Security
Interest”).

    


    3.           Representations, Warranties,
Covenants and Agreements of the Issuers. Each Issuer represents and
warrants to, and covenants and agrees with, the Secured Party as
follows:

    


    (a)           Issuer
has the requisite limited liability company power and authority to enter into
this Agreement and otherwise to carry out its obligations thereunder. The
execution, delivery and perfounance by Issuer of this Agreement and the filings
contemplated therein have been duly authorized by all necessary action on the
part of Issuer and no further action is required by Issuer. This Agreement
constitutes a legal, valid and binding obligation of Issuer enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditor’s rights generally.


    
      
         


      

      
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    (b)           Issuer
represents and warrants that it has no place of business or offices where its
respective books of account and records are kept (other than temporarily at the
offices of its attorneys or accountants) or places where Collateral is stored or
located, except as set forth on Schedule A attached
hereto;

    


    (c)           Issuer
is the sole owner of the Collateral (except for non-exclusive licenses granted
by Issuer in the ordinary course of business), free and clear of any liens,
security interests, encumbrances, rights or claims, and is fully authorized to
grant the Security Interest in and to pledge the Collateral. There is not on
file in any governmental or regulatory authority, agency or recording office an
effective financing statement, security agreement, license or transfer or any
notice of any of the foregoing (other than those that have been filed in favor
of the Secured Party pursuant to this Agreement) covering or affecting any of
the Collateral. So long as this Agreement shall be in effect, Issuer shall not
execute and shall not knowingly permit to be on file in any such office or
agency any such financing statement or other document or instrument (except to
the extent filed or recorded in favor of the Secured Party pursuant to the terms
of this Agreement).

    


    (d)           No
part of the Collateral has been judged invalid or unenforceable. No written
claim has been received that any Collateral or Issuer’s use of any Collateral
violates the rights of any third party. There has been no adverse decision to
Issuer’s claim of ownership rights in or exclusive rights to use the Collateral
in any jurisdiction or to Issuer’s right to keep and maintain such Collateral in
full force and effect, and there is no proceeding involving said rights pending
or, to the best knowledge of Issuer, threatened before any court, judicial body,
administrative or regulatory agency, arbitrator or other governmental
authority.

    


    (e)           Issuer
shall at all times maintain its books of account and records relating to the
Collateral at its principal place of business and its Collateral at the
locations set forth on Schedule A attached hereto and may not relocate such
books of account and records or tangible Collateral unless it delivers to the
Secured Party at least 30 days prior to such relocation (i) written notice of
such relocation and the new location thereof (which must be within the United
States) and (ii) evidence that appropriate financing statements and other
necessary documents have been filed and recorded and other steps have been taken
to perfect the Security Interest to create in favor of the Secured Party valid,
perfected and continuing first priority liens in the Collateral.

    


    (f)           This
Agreement creates in favor of the Secured Party a valid security interest in the
Collateral securing the payment and performance of the Obligations and, upon
making the filings described in the immediately following sentence, a perfected
first priority security interest in such Collateral. Except for the filing of
financing statements on Form-1 under the UCC with the jurisdictions indicated on
Schedule B, attached hereto, no authorization or approval of or filing with or
notice to any governmental authority or regulatory body is required either (i)
for the grant by Issuer of, or the effectiveness of, the Security Interest
granted hereby or for the execution, delivery and performance of this Agreement
by Issuer or (ii) for the perfection of or exercise by the Secured Party of its
rights and remedies hereunder.

    


    (g)           On
the date of execution of this Agreement, Issuer will deliver to the Secured
Party one or more executed UCC financing statements on Form-1 with respect to
the Security Interest for filing with the jurisdictions indicated on Schedule B,
attached hereto and in such other jurisdictions as may be requested by the
Secured Party.


    
      
         


      

      
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    (h)           The
execution, delivery and perfoiinance of this Agreement does not conflict with or
cause a breach or default, or an event that with or without the passage of time
or notice, shall constitute a breach or default, under any agreement to which
Issuer is a party or by which Issuer is bound. No consent (including, without
limitation, from members or creditors of Issuer) is required for Issuer to enter
into and perform its obligations hereunder.

    


    (i)           Issuer
shall at all times maintain the liens and Security Interest provided for
hereunder as valid and perfected first priority liens and security interests in
the Collateral in favor of the Secured Party until this Agreement and the
Security Interest hereunder shall terminate pursuant to Section 11. Issuer
hereby agrees to defend the same against any and all persons. Issuer shall
safeguard and protect all Collateral for the account of the Secured Party. At
the request of the Secured Party, Issuer will sign and deliver to the Secured
Party at any time or from time to time one or more financing statements pursuant
to the UCC (or any other applicable statute) in form reasonably satisfactory to
the Secured Party and will pay the cost of filing the same in all public offices
wherever filing is, or is deemed by the Secured Party to be, necessary or
desirable to effect the rights and obligations provided for herein. Without
limiting the generality of the foregoing, Issuer shall pay all fees, taxes and
other amounts necessary to maintain the Collateral and the Security Interest
hereunder, and Issuer shall obtain and furnish to the Secured Party from time to
time, upon demand, such releases and/or subordinations of claims and liens which
may be required to maintain the priority of the Security Interest
hereunder.

    


    (j)           Issuer
will not transfer, pledge, hypothecate, encumber, license (except for
non-exclusive licenses granted and sales made by issuer in the ordinary course
of business), sell or otherwise dispose of any of the Collateral without the
prior written consent of the Secured Party.

    


    (k)           Issuer
shall keep and preserve its Equipment, Inventory and other tangible Collateral
in good condition, repair and order and shall not operate or locate any such
Collateral (or cause to be operated or located) in any area excluded from
insurance coverage.

    


    (l)           Issuer
shall, within ten (10) days of obtaining knowledge thereof, advise the Secured
Party promptly, in sufficient detail, of any substantial change in the
Collateral, and of the occurrence of any event which would have a material
adverse effect on the value of the Collateral or on the Secured Party’s security
interest therein.

    


    (m)           Issuer
shall promptly execute and deliver to the Secured Party such further deeds,
mortgages, assignments, security agreements, financing statements or other
instruments, documents, certificates and assurances and take such further action
as the Secured Party may from time to time request and may in its sole
discretion deem necessary to perfect, protect or enforce its security interest
in the Collateral including, without limitation, the execution and delivery of a
separate security agreement with respect to Issuer’s intellectual property
(“Intellectual
Property Security Agreement”) in which the Secured Party has been granted
a security interest hereunder, substantially in a form acceptable to the Secured
Party, which Intellectual Property Security Agreement, other than as stated
therein, shall be subject to all of the terms and conditions
hereof.

    


    (n)           Issuer
shall permit the Secured Party and its representatives and agents to inspect the
Collateral at any time, and to make copies of records pertaining to the
Collateral as may be requested by the Secured Party from time to
time.

    


    (o)           Issuer
will take all steps reasonably necessary to diligently pursue and seek to
preserve, enforce and collect any rights, claims, causes of action and accounts
receivable in respect of the Collateral.


    
      
         


      

      
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    (p)           Issuer
shall promptly notify the Secured Party in sufficient detail upon becoming aware
of any attachment, garnishment, execution or other legal process levied against
any Collateral and of any other information received by Issuer that may
materially affect the value of the Collateral, the Security Interest or the
rights and remedies of the Secured Party hereunder.

    


    (q)           All
information heretofore, herein or hereafter supplied to the Secured Party by or
on behalf of Issuer with respect to the Collateral is accurate and complete in
all material respects as of the date furnished.

    


    (r)           Schedule A attached
hereto contains a list of all of the subsidiaries of Issuer.

    


    4.           Defaults.  The
following events shall be “Events of
Default”:

    


    (a)           The
occurrence of an Event of Default (as defined in the Notes) under the
Note;

    


    (b)           Any
representation or warranty of Issuers in this Agreement or in the Intellectual
Property Security Agreement shall prove to have been incorrect in any material
respect when made;

    


    (c)           The
failure by Issuers to observe or perform any of its obligations hereunder or in
the Intellectual Property Security Agreement for ten (10) days after receipt by
Issuers of notice of such failure from the Secured Party.

    


    5.           Duty To Hold In
Trust. Upon the occurrence of any Event of Default and at any time
thereafter, Issuers shall, upon receipt by it of any revenue, income or other
sums subject to the Security Interest, whether payable pursuant to the Note or
otherwise, or of any check, draft, note, trade acceptance or other instrument
evidencing an obligation to pay any such sum, hold the same in trust for the
Secured Party and shall forthwith endorse and transfer any such sums or
instruments, or both, to the Secured Party for application to the satisfaction
of the Obligations.

    


    6.           Rights and Remedies Upon
Default. Upon occurrence of any Event of Default and at any time
thereafter, the Secured Party shall have the right to exercise all of the
remedies conferred hereunder and under the Note, and the Secured Party shall
have all the rights and remedies of a secured party under the UCC and/or any
other applicable law (including the Uniform Commercial Code of any jurisdiction
in which any Collateral is then located). Without limitation, the Secured Party
shall have the following rights and powers:

    


    (a)           The
Secured Party shall have the right to take possession of the Collateral and, for
that purpose, enter, with the aid and assistance of any person, any premises
where the Collateral, or any part thereof, is or may be placed and remove the
same, and Issuers shall assemble the Collateral and make it available to the
Secured Party at places which the Secured Party shall reasonably select, whether
at the Issuers’ premises or elsewhere, and make available to the Secured Party,
without rent, all of the Issuers’ respective premises and facilities for the
purpose of the Secured Party taking possession of, removing or putting the
Collateral in saleable or disposable form.

    


    (b)           The
Secured Party shall have the right to operate the business of the Issuers using
the Collateral and shall have the right to assign, sell, lease or otherwise
dispose of and deliver all or any part of the Collateral, at public or private
sale or otherwise, either with or without special conditions or stipulations,
for cash or on credit or for future delivery, in such parcel or parcels and at
such time or times and at such place or places, and upon such terms and
conditions as the Secured Party may deem commercially reasonable, all without
(except as shall be required by applicable statute and cannot be waived)
advertisement or demand upon or notice to the Issuers or right of redemption of
the Issuers, which are hereby expressly waived. Upon each such sale, lease,
assignment or other transfer of Collateral, the Secured Party may, unless
prohibited by applicable law which cannot be waived, purchase all or any part of
the Collateral being sold, free from and discharged of all trusts, claims, right
of redemption and equities of the Issuers, which are hereby waived and
released.


    
      
         


      

      
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    7.           Applications of
Proceeds. The proceeds of any such sale, lease or other disposition of
the Collateral hereunder shall be applied first, to the expenses of retaking,
holding, storing, processing and preparing for sale, selling, and the like
(including, without limitation, any taxes, fees and other costs incurred in
connection therewith) of the Collateral, to the reasonable attorneys’ fees and
expenses incurred by the Secured Party in enforcing its rights hereunder and in
connection with collecting, storing and disposing of the Collateral, and then to
satisfaction of the Obligations, and to the payment of any other amounts
required by applicable law, after which the Secured Party shall pay to the
Issuers any surplus proceeds. If, upon the sale, license or other disposition of
the Collateral, the proceeds thereof are insufficient to pay all amounts to
which the Secured Party is legally entitled, the Issuers will be liable for the
deficiency, together with interest thereon, at the rate of 15% per annum (the
“Default
Rate”), and the reasonable fees of any attorneys employed by the Secured
Party to collect such deficiency. To the extent permitted by applicable law, the
Issuers waive all claims, damages and demands against the Secured Party arising
out of the repossession, removal, retention or sale of the Collateral, unless
due to the gross negligence or willful misconduct of the Secured
Party.

    


    8.           Costs and Expenses.
The Issuers agree to pay all out-of-pocket fees, costs and expenses incurred in
connection with any filing required hereunder, including without limitation, any
financing statements, continuation statements, partial releases and/or
termination statements related thereto or any expenses of any searches
reasonably required by the Secured Party. The Issuers shall also pay all other
claims and charges which in the reasonable opinion of the Secured Party might
prejudice, imperil or otherwise affect the Collateral or the Security Interest
therein. The Issuers will also, upon demand, pay to the Secured Party the amount
of any and all reasonable expenses, including the reasonable fees and expenses
of its counsel and of any experts and agents, which the Secured Party may incur
in connection with (i) the enforcement of this Agreement, (ii) the custody or
preservation of, or the sale of, collection from, or other realization upon, any
of the Collateral, or (iii) the exercise or enforcement of any of the rights of
the Secured Party under the Note. Until so paid, any fees payable hereunder
shall be added to the principal amount of the Note and shall bear interest at
the Default Rate.

    


    9.           Responsibility for
Collateral. The Issuers assume all liabilities and responsibility in
connection with all Collateral, and the obligations of the Issuers hereunder or
under the Note and the Transaction Documents shall in no way be affected or
diminished by reason of the loss, destruction, damage or theft of any of the
Collateral or its unavailability for any reason.

     

    
      
         


      

      
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    10.           Security Interest
Absolute. All rights of the Secured Party and all Obligations of the
Issuers hereunder, shall be absolute and unconditional, irrespective of (a) any
lack of validity or enforceability of this Agreement, the Note, the Subscription
Agreement or any agreement entered into in connection with the foregoing, or any
portion hereof or thereof; (b) any change in the time, manner or place of
payment or performance of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from the Note, the Subscription Agreement or any other agreement entered into in
connection with the foregoing; (c) any exchange, release or nonperfection of any
of the Collateral, or any release or amendment or waiver of or consent to
departure from any other collateral for, or any guaranty, or any other security,
for all or any of the Obligations; (d) any action by the Secured Party to
obtain, adjust, settle and cancel in its sole discretion any insurance claims or
matters made or arising in connection with the Collateral; or (e) any other
circumstance which might otherwise constitute any legal or equitable defense
available to the Issuers, or a discharge of all or any part of the Security
Interest granted hereby. Until the Obligations shall have been paid and
performed in full, the rights of the Secured Party shall continue even if the
Obligations are barred for any reason, including, without limitation, the
running of the statute of limitations or bankruptcy. The Issuers expressly waive
presentment, protest, notice of protest, demand, notice of nonpayment and demand
for performance. In the event that at any time any transfer of any Collateral or
any payment received by the Secured Party hereunder shall be deemed by final
order of a court of competent jurisdiction to have been a voidable preference or
fraudulent conveyance under the bankruptcy or insolvency laws of the United
States, or shall be deemed to be otherwise due to any party other than the
Secured Party, then, in any such event, the Issuers’ obligations hereunder shall
survive cancellation of this Agreement, and shall not be discharged or satisfied
by any prior payment thereof and/or cancellation of this Agreement, but shall
remain a valid and binding obligation enforceable in accordance with the terms
and provisions hereof. The Issuers waive all right to require the Secured Party
to proceed against any other person or to apply any Collateral which the Secured
Party may hold at any time, or to marshal assets, or to pursue any other remedy.
The Issuers waive any defense arising by reason of the application of the
statute of limitations to any obligation secured hereby.

    


    11.           Term of Agreement.
This Agreement and the Security Interest shall terminate on the date
on which all payments under the Note has been made in full and all other
Obligations have been paid or discharged. Upon such termination, the Secured
Party, at the request and at the expense of the Issuers, will join in executing
any termination statement with respect to any financing statement executed and
filed pursuant to this Agreement.

    


    12.           Power of Attorney; Further
Assurances.

    


    (a)           Each
Issuer authorizes the Secured Party, and does hereby make, constitute and
appoint it, and its respective officers, agents, successors or assigns with full
power of substitution, as such Issuer’s true and lawful attorney-in-fact, with
power, in its own name or in the name of such Issuer, to, after the occurrence
and during the continuance of an Event of Default, (i) endorse any notes,
checks, drafts, money orders, or other instruments of payment (including
payments payable under or in respect of any policy of insurance) in respect of
the Collateral that may come into possession of the Secured Party; (ii) to sign
and endorse any UCC financing statement or any invoice, freight or express bill,
bill of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with accounts, and other
documents relating to the Collateral; (iii) to pay or discharge taxes, liens,
security interests or other encumbrances at any time levied or placed on or
threatened against the Collateral; (iv) to demand, collect, receipt for,
compromise, settle and sue for monies due in respect of the Collateral; and (v)
generally, to do, at the option of the Secured Party, and at such Issuer’s
expense, at any time, or from time to time, all acts and things which the
Secured Party deems necessary to protect, preserve and realize upon the
Collateral and the Security Interest granted therein in order to effect the
intent of this Agreement, the Note and the Subscription Agreement, all as fully
and effectually as such Issuer might or could do; and such Issuer hereby
ratifies all that said attorney shall lawfully do or cause to be done by virtue
hereof. This power of attorney is coupled with an interest and shall be
irrevocable for the term of this Agreement and thereafter as long as any of the
Obligations shall be outstanding.

    


    (b)           On
a continuing basis, the Issuers will make, execute, acknowledge, deliver, file
and record, as the case may be, in the proper filing and recording places in any
jurisdiction, including, without limitation, the jurisdictions indicated on
Schedule B, attached hereto, all such instruments, and take all such action as
may reasonably be deemed necessary or advisable, or as reasonably requested by
the Secured Party, to perfect the Security Interest granted hereunder and
otherwise to carry out the intent and purposes of this Agreement, or for
assuring and confirming to the Secured Party the grant or perfection of a
security interest in all the Collateral.

     

    
      
         


      

      
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    (c)           Each
Issuer hereby irrevocably appoints the Secured Party as the Issuer’s
attorney-in-fact, with full authority in the place and stead of such Issuer and
in the name of such Issuer, from time to time in the Secured Party’s discretion,
to take any action and to execute any instrument which the Secured Party may
deem necessary or advisable to accomplish the purposes of this Agreement,
including the filing, in its sole discretion, of one or more financing or
continuation statements and amendments thereto, relative to any of the
Collateral without the signature of such Issuer where permitted by
law.

    


    13.          Notices. All notices,
requests, demands and other communications hereunder shall be in writing, with
copies to all the other parties hereto, and shall be deemed to have been duly
given when (i) if delivered by hand, upon receipt, (ii) if sent by facsimile,
upon receipt of proof of sending thereof, (iii) if sent by nationally recognized
overnight delivery service (receipt requested), the next business day or (iv) if
mailed by first-class registered or certified mail, return receipt requested,
postage prepaid, four days after posting in the U.S. mails, in each case if
delivered to the following addresses:

    


    
      	
              If
      to the Issuers:

            	
              Phreadz
      USA, LLC

            


    

    Universal
Database of Music, LLC

    63 Main
Street

    Flemington,
NJ 08822

    Attention:
Nicholas Thompson Telephone: (908) 796-0258

    Facsimile:
(619) 934-9253

     

    
      	
              If
      to the Secured Party:

            	
              to
      the address set forth under their name on the signature pages
      hereto

            


    

     

    
      	
              With
      a copy to:

            	
              Indeglia
      & Carney, P.C.

            


    

    1900 Main
Street, Suite 300

    Irvine,
CA 92614

    Attention:
Marc A. Indeglia, Esq.

    Telephone:
(949) 861-3321

    Facsimile:
(949) 861-3324

    


    14.          Other Security. To
the extent that the Obligations are now or hereafter secured by property other
than the Collateral or by the guarantee, endorsement or property of any other
person, firm, corporation or other entity, then the Secured Party shall have the
right, in its sole discretion, to pursue, relinquish, subordinate, modify or
take any other action with respect thereto, without in any way modifying or
affecting any of the Secured Party’s rights and remedies hereunder.

    


    15.          Miscellaneous.

    


    (a)           No
course of dealing between the Issuers and the Secured Party, nor any failure to
exercise, nor any delay in exercising, on the part of the Secured Party, any
right, power or privilege hereunder or under the Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or thereunder preclude any other or further exercise thereof
or the exercise of any other right, power or privilege.

    


    (b)           All
of the rights and remedies of the Secured Party with respect to the Collateral,
whether established hereby or by the Note or by any other agreements,
instruments or documents or by law shall be cumulative and may be exercised
singly or concurrently.

     

    
      
         


      

      
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    (c)           This
Agreement constitutes the entire agreement of the parties with respect to the
subject matter hereof and is intended to supersede all prior negotiations,
understandings and agreements with respect thereto. Except as specifically set
forth in this Agreement, no provision of this Agreement may be modified or
amended except by a written agreement specifically referring to this Agreement
and signed by the parties hereto.

    


    (d)           In
the event that any provision of this Agreement is held to be invalid, prohibited
or unenforceable in any jurisdiction for any reason, unless such provision is
narrowed by judicial construction, this Agreement shall, as to such
jurisdiction, be construed as if such invalid, prohibited or unenforceable
provision had been more narrowly drawn so as not to be invalid, prohibited or
unenforceable. If, notwithstanding the foregoing, any provision of this
Agreement is held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision, as to such jurisdiction, shall be ineffective to
the extent of such invalidity, prohibition or unenforceability without
invalidating the remaining portion of such provision or the other provisions of
this Agreement and without affecting the validity or enforceability of such
provision or the other provisions of this Agreement in any other
jurisdiction.

    


    (e)           No
waiver of any breach or default or any right under this Agreement shall be
considered valid unless in writing and signed by the party giving such waiver,
and no such waiver shall be deemed a waiver of any subsequent breach or default
or right, whether of the same or similar nature or otherwise.

    


    (f)           This
Agreement shall be binding upon and inure to the benefit of each party hereto
and its successors and assigns.

    


    (g)           Each
party shall take such further action and execute and deliver such further
documents as may be necessary or appropriate in order to carry out the
provisions and purposes of this Agreement.

    


    (h)           This
Agreement shall be construed in accordance with the laws of the State of New
York, except to the extent the validity, perfection or enforcement of a security
interest hereunder in respect of any particular Collateral which are governed by
a jurisdiction other than the State of New York in which case such law shall
govern. Each of the parties hereto irrevocably submit to the exclusive
jurisdiction of any New York State or United States Federal court sitting in
Manhattan county over any action or proceeding arising out of or relating to
this Agreement, and the parties hereto hereby irrevocably agree that all claims
in respect of such action or proceeding may be heard and determined in such New
York State or Federal court. The parties hereto agree that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
The parties hereto further waive any objection to venue in the State of New York
and any objection to an action or proceeding in the State of New York on the
basis of forum non conveniens.

    


    (i)           EACH
PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. THE SCOPE
OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATER OF THIS AGREEMENT,
INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS
AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES
THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT EACH PARTY HAS ALREADY RELIED ON THIS WAIVER IN
ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY ON THIS
WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHTS TO A JURY TRIAL
FOLLOWING SUCH CONSULTATION. THIS WAIVER IS IRREVOCABLE, MEANING THAT,
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS AND SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF A
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.


    
      
         


      

      
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    (j)           This
Agreement may be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
were the original thereof.

    


    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

     

    
      
         


      

      
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    IN
WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be
duly executed on the day and year first above written.

     

    
      
        
          	 
      	
                  ISSUERS:

                
	 
      	 
      
	 
      	
                  PHREADZ
      USA, LLC

                
	 	 
	 
      	
                  By:

                	
                    

                
	 
      	
                  Name:

                
	 
      	
                  Title:

                
	 
      	 
      
	 
      	
                  UNIVERSAL
      DATABASE OF MUSIC USA, LLC

                
	 
      	 
      
	 
      	
                  By:

                	
                    

                
	 
      	
                  Name:

                
	 
      	
                  Title:

                
	 
      	 
      
	 
      	
                  SECURED
      PARTY

                
	 
      	 
      
	 
      	
                  PROFESSIONAL
      CAPITAL PARTNERS, LTD.

                  By:
      PCPM GP, LLC, its general partner

                
	 
      	 
      
	 
      	
                  By:

                	
                    

                
	 
      	
                  Name:

                
	 
      	
                  Title:

                
	 
      	 
      
	 
      	
                  Address:
      1400 Old Country Road, Westbury NY 11590 Facsimile:
      516-228-8083

                
	 
      	 
      
	 
      	
                    

                
	 
      	
                  Cecil
      Bernard

                
	 
      	 
      
	 
      	
                  Address:
      53 Danson Road, Bexleyheath, Kent, DA6 8HP

                
	 
      	
                  England

                
	 
      	
                  Facsimile:

                
	 
      	 
      
	 
      	
                    

                
	 
      	
                  Mary
      Goldberg

                
	 
      	
                  Address:

                
	 
      	
                  Facsimile:

                
	 
      	 
      
	 
      	
                    

                
	 
      	
                  Mercado
      De Expect

                
	 
      	 
      
	 
      	
                  Address:

                
	 
      	
                  Facsimile:

                


        

      

    

     

    
      
         


      

      
        11

        
          

        

      

      
         


      

    


    
      
        	 
      	
                  

              
	 
      	
                Ingrid
      Coffin

              
	 
      	 
      
	 
      	
                Address:

              
	 
      	
                Facsimile:

              
	 
      	 
      
	 
      	
                  

              
	 
      	
                Louis
      J. Macaluso

              
	 
      	 
      
	 
      	
                Address:
      757 Norman Place, Westfield, NJ 07090

              
	 
      	
                Facsimile:

              
	 
      	 
      
	 
      	
                  

              
	 
      	
                Dennis
      Josifovich

              
	 
      	 
      
	 
      	
                Address:
      7 Rhone Court, Grand Junction, CO 81507

              
	 
      	
                Facsimile:

              
	 
      	 
      
	 
      	
                  

              
	 
      	
                David
      Kelley

              
	 
      	 
      
	 
      	
                Address:

              
	 
      	
                Facsimile:

              


      

    

     

    
      
         


      

      
        12

        
          

        

      

      
         


      

    


    SCHEDULE
A

    Principal Place of Business
of the Issuers:

     

    Locations Where Collateral
is Located or Stored:

     

    List of Subsidiaries of the
Issuers:


    
      
         


      

      
        13

        
          

        

      

      
         


      

    


    SCHEDULE
B

     

    Jurisdictions:

     

    
      
         


      

      
        14