INTELLECTUAL
PROPERTY SECURITY AGREEMENT

    


    INTELLECTUAL
PROPERTY 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 Notes 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.           Defined Terms. Unless
otherwise defined herein, terms which are defined in the
Subscription Agreement and used herein are so used as so defined; and the
following telins shall have the following meanings:

    


    “Software Intellectual
Property” shall mean:

    


    (a)           all
software programs (including all source code, object code and all related
applications and data files), whether now owned, upgraded, enhanced, licensed or
leased or hereafter acquired by each Issuer, above;

    


    (b)          all
computers and electronic data processing hardware and firmware associated
therewith;

    


    (c)           all
documentation (including flow charts, logic diagrams, manuals, guides and
specifications) with respect to such software, hardware and firmware described
in the preceding clauses (a) and (b); and

    


    (d)          all
rights with respect to all of the foregoing, including, without limitation, any
and all upgrades, modifications, copyrights, licenses, options, warranties,
service contracts, program services, test rights, maintenance rights, support
rights, improvement rights, renewal rights and indemnifications and
substitutions, replacements, additions, or model conversions of any of the
foregoing.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Copyrights” shall
mean (a) all copyrights, registrations and applications for registration, issued
or filed, including any reissues, extensions or renewals thereof, by or with the
United States Copyright Office or any similar office or agency of the United
States, any state thereof, or any other country or political subdivision
thereof, or otherwise, including, all rights in and to the material constituting
the subject matter thereof, including, without limitation, any referred to in
Schedule B
hereto, and (b) any rights in any material which is copyrightable or which is
protected by common law, United States copyright laws or similar laws or any law
of any State, including, without limitation, any thereof referred to in Schedule B
hereto.

    


    “Copyright License”
shall mean any agreement, written or oral, providing for a grant by the Issuers
of any right in any Copyright, including, without limitation, any thereof
referred to in Schedule B
hereto.

    


    “Intellectual
Property” shall means, collectively, the Software Intellectual Property,
Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark
Licenses and Trade Secrets.

    


    “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.

    “Patents” shall mean
(a) all letters patent of the United States or any other country or any
political subdivision thereof, and all reissues and extensions thereof,
including, without limitation, any thereof referred to in Schedule B hereto, and
(b) all applications for letters patent of the United States and all divisions,
continuations and continuations-in-part thereof or any other country or any
political subdivision, including, without limitation, any thereof referred to in
Schedule B hereto.

    


    “Patent License” shall
mean all agreements, whether written or oral, providing for the grant by the
Issuers of any right to manufacture, use or sell any invention covered by a
Patent, including, without limitation, any thereof referred to in Schedule B
hereto.

    


    “Security Agreement”
shall mean the Security Agreement, dated the date hereof between the Issuers and
the Secured Party.

    


    “Trademarks” shall
mean (a) all trademarks, trade names, corporate names, company names, business
names, fictitious business names, trade styles, service marks, logos and other
source or business identifiers, and the goodwill associated therewith, now
existing or hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, whether in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any state thereof or any other country or any political
subdivision thereof, or otherwise, including, without limitation, any thereof
referred to in Schedule B hereto, and (b) all reissues, extensions or renewals
thereof.

    


    “Trademark License”
shall mean any agreement, written or oral, providing for the grant by the
Issuers of any right to use any Trademark, including, without limitation, any
thereof referred to in Schedule B hereto.

    


    
      
        
        

      

      
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    “Trade Secrets” shall
mean common law and statutory trade secrets and all other confidential or
proprietary or useful information and all know-how obtained by or used in or
contemplated at any time for use in the business of the Issuers (all of the
foregoing being collectively called a “Trade Secret”),
whether or not such Trade Secret has been reduced to a writing or other tangible
form, including all documents and things embodying, incorporating or referring
in any way to such Trade Secret, all Trade Secret licenses, including each Trade
Secret license referred to in Schedule B hereto,
and including the right to sue for and to enjoin and to collect damages for the
actual or threatened misappropriation of any Trade Secret and for the breach or
enforcement of any such Trade Secret license.

    


    2.           Grant of Security
Interest. In accordance with Section 3(m) of the Security Agreement, 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, pledges, grants and hypothecates 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 Intellectual Property
(the “Security
Interest”).

    


    3.           Representations and
Warranties. Each Issuer hereby represents and warrants, and covenants and
agrees with, the Secured Party as follows:

    


    (a)           Issuer
has the requisite limited liability power and authority to enter into this
Agreement and otherwise to carry out its obligations thereunder. The execution,
delivery and perfolluance 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.

    


    (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 the Intellectual
Property is stored or located, except as set forth on Schedule A attached
hereto;

    


    (c)           Issuer
is the sole owner of the Intellectual Property (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 Intellectual
Property. 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 Intellectual Property. 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).

    


    
      
        
        

      

      
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    (d)           Issuer
shall at all times maintain its books of account and records relating to the
Intellectual Property at its principal place of business and its Intellectual
Property at the locations set forth on Schedule A attached
hereto and may not relocate such books of account and records 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 the 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 Intellectual Property to the extent they can be perfected
through such filings.

    


    (e)           This
Agreement creates in favor of the Secured Party a valid security interest in the
Intellectual Property securing the payment and performance of the Obligations
and, upon making the filings required hereunder, a perfected first priority
security interest in such Intellectual Property to the extent that it can be
perfected through such filings.

    


    (f)           Upon
request of the Secured Party, Issuer shall execute and deliver any and all
agreements, instruments, documents, and papers as the Secured Party may request
to evidence the Secured Party’s security interest in the Intellectual Property
and the goodwill and general intangibles of Issuer relating thereto or
represented thereby, and Issuer hereby appoints the Secured Party its
attorney-in-fact to execute and file all such writings for the foregoing
purposes, all acts of such attorney being hereby ratified and confirmed; such
power being coupled with an interest is irrevocable until the Obligations have
been fully satisfied and are paid in full.

    


    (g)           The
execution, delivery and performance 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.

    


    (h)          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 Intellectual Property to the extent they can be perfected by filing 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 Intellectual
Property for the account of the Secured Party. Without limiting the generality
of the foregoing, Issuer shall pay all fees, taxes and other amounts necessary
to maintain the Intellectual Property 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.

    


    (i)           Issuer
will not transfer, pledge, hypothecate, encumber, license (except for
non-exclusive licenses granted by Issuer in the ordinary course of business),
sell or otherwise dispose of any of the Intellectual Property without the prior
written consent of the Secured Party, which consent will not be unreasonably
withheld.

    


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

    


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

    


    
      
        
        

      

      
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    (l)           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 Intellectual Property.

    


    (m)         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 Intellectual Property and of any other information received by Issuer that
may materially affect the value of the Intellectual Property, the Security
Interest or the rights and remedies of the Secured Party hereunder.

    


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

    


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

    


    (p)          Schedule B attached
hereto includes all Licenses, and all Patents and Patent Licenses, if any, owned
by Issuer in its own name as of the date hereof. Schedule B hereto
includes all Trademarks and Trademark Licenses, if any, owned by Issuer in its
own name as of the date hereof. Schedule B hereto
includes all Copyrights and Copyright Licenses, if any, owned by Issuer in its
own name as of the date hereof. Schedule B hereto
includes all Trade Secrets and Trade Secret Licenses, if any, owned by Issuer as
of the date hereof. Each License, Patent, Trademark, Copyright and Trade Secret
is valid, subsisting, unexpired, enforceable and has not been abandoned. Except
as set forth in Schedule B, none of
such Licenses, Patents, Trademarks, Copyrights and Trade Secrets is the subject
of any licensing or franchise agreement. No holding, decision or judgment has
been rendered by any Governmental Body which would limit, cancel or question the
validity of any License, Patent, Trademark, Copyright and Trade Secrets Except
as set forth in Schedule B, no action
or proceeding is pending (i) seeking to limit, cancel or question the validity
of any License, Patent, Trademark, Copyright or Trade Secret, or (ii) which, if
adversely determined, would have a material adverse effect on the value of any
License, Patent, Trademark, Copyright or Trade Secret. Issuer has used and will
continue to use for the duration of this Agreement, proper statutory notice in
connection with its use of the Patents, Trademarks and Copyrights and consistent
standards of quality in products leased or sold under the Patents, Trademarks
and Copyrights.

    


    (q)          With
respect to any Intellectual Property:

    


    
      	
               
      

            	
              (i)

            	
              such
      Intellectual Property is subsisting and has not been adjudged invalid or
      unenforceable, in whole or in part;

            


    

    


    
      	
               
      

            	
              (ii)

            	
              such
      Intellectual Property is valid and
enforceable;

            


    

    


    
      	
               
      

            	
              (iii)

            	
              Issuer
      has made all necessary filings and recordations to protect its interest in
      such Intellectual Property, including, without limitation, recordations of
      all of its interests in the Patents, Patent Licenses, Trademarks and
      Trademark Licenses in the United States Patent and Trademark Office and in
      corresponding offices throughout the world and its claims to the
      Copyrights and Copyright Licenses in the United States Copyright Office
      and in corresponding offices throughout the
  world;

            


    

     

    
      
        
        

      

      
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              (iv)

            	
              other
      than as set forth in Schedule B,
      Issuer is the exclusive owner of the entire and unencumbered right, title
      and interest in and to such Intellectual Property and no claim has been
      made that the use of such Intellectual Property infringes on the asserted
      rights of any third party; and

            


    

     

    
      	
               
      

            	
              (v)

            	
              Issuer
      has performed and will continue to perform all acts and has paid all
      required fees and taxes to maintain each and every item of Intellectual
      Property in full force and effect throughout the world, as
      applicable.

            


    

    


    (r)           Except
with respect to any Trademark or Copyright that Issuer shall reasonably
determine is of negligible economic value to Issuer, Issuer shall:

    


    (i)           maintain
each Trademark and Copyright in full force free from any claim of abandonment
for non-use, maintain as in the past the quality of products and services
offered under such Trademark or Copyright; employ such Trademark or Copyright
with the appropriate notice of registration; not adopt or use any mark which is
confusingly similar or a colorable imitation of such Trademark or Copyright
unless the Secured Party shall obtain a perfected security interest in such mark
pursuant to this Agreement; and not (and not permit any licensee or sublicensee
thereof to) do any act or knowingly omit to do any act whereby any Trademark or
Copyright may become invalidated;

    


    (ii)           not,
except with respect to any Patent that it shall reasonably determine is of
negligible economic value to it, do any act, or omit to do any act, whereby any
Patent may become abandoned or dedicated; and

    


    (iii)           notify
the Secured Party immediately if it knows, or has reason to know, that any
application or registration relating to any Patent, Trademark or Copyright may
become abandoned or dedicated, or of any adverse determination or development
(including, without limitation, the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark Office,
United States Copyright Office or any court or tribunal in any country)
regarding its ownership of any Patent, Trademark or Copyright or its right to
register the same or to keep and maintain the same.

    


    (s)           Whenever
Issuer, either by itself or through any agent, employee, licensee or designee,
shall file an application for the registration of any Patent, Trademark or
Copyright with the United States Patent and Trademark Office, United States
Copyright Office or any similar office or agency in any other country or any
political subdivision thereof or acquire rights to any new Patent, Trademark or
Copyright whether or not registered, report such filing to the Secured Party
within five business days after the last day of the fiscal quarter in which such
filing occurs.

    


    (t)           Issuer
shall take all reasonable and necessary steps, including, without limitation, in
any proceeding before the United States Patent and Trademark Office, United
States Copyright Office or any similar office or agency in any other country or
any political subdivision thereof, to maintain and pursue each application (and
to obtain the relevant registration) and to maintain each registration of the
Patents, Trademarks and Copyrights, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of
incontestability.

    


    
      
        
        

      

      
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    (u)           In
the event that any Patent, Trademark or Copyright included in the Intellectual
Property is infringed, misappropriated or diluted by a third party, promptly
notify the Secured Party after it learns thereof and shall, unless it shall
reasonably determine that such Patent, Trademark or Copyright is of negligible
economic value to it, which determination it shall promptly report to the
Secured Party, promptly sue for infringement, misappropriation or dilution, to
seek injunctive relief where appropriate and to recover any and all damages for
such infringement, misappropriation or dilution, or take such other actions as
it shall reasonably deem appropriate under the circumstances to protect such
Patent, Trademark or Copyright. If an Issuer lacks the financial resources to
comply with this Section 3(t), such Issuer shall so notify the Secured Party and
shall cooperate fully with any enforcement action undertaken by the Secured
Party on behalf 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
Notes;

    


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

    


    (c)           The
failure by an Issuer to observe or perform any of its obligations hereunder or
in the Security Agreement for ten (10) days after receipt by Issuer 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 Intellectual Property 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 Intellectual
Property and, for that purpose, enter, with the aid and assistance of any
person, any premises where the Intellectual Property, or any part thereof, is or
may be placed and remove the same, and the Issuers shall assemble the
Intellectual Property and make it available to the Secured Party at places which
the Secured Party shall reasonably select, whether at the Issuer’s premises or
elsewhere, and make available to the Secured Party, without rent, all of the
Issuer’s respective premises and facilities for the purpose of the Secured Party
taking possession of, removing or putting the Intellectual Property in saleable
or disposable form.

    


    (b)           The
Secured Party shall have the right to operate the business of the Issuers using
the Intellectual Property and shall have the right to assign, sell, lease or
otherwise dispose of and deliver all or any part of the Intellectual Property,
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 Intellectual Property, the Secured
Party may, unless prohibited by applicable law which cannot be waived, purchase
all or any part of the Intellectual Property 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 Intellectual Property 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 Intellectual Property, 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
Intellectual Property, 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 Intellectual Property, the proceeds thereof are
insufficient to pay all amounts to which the Secured Party is legally entitled,
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, Issuers waive all
claims, damages and demands against the Secured Party arising out of the
repossession, removal, retention or sale of the Intellectual Property, unless
due to the gross negligence or willful misconduct of the Secured
Party.

    


    8.           Costs and Expenses.
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 Intellectual Property 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 Intellectual Property, 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
Intellectual Property. The Issuers assumes all liabilities and
responsibility in connection with all Intellectual Property, 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 Intellectual Property 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 Intellectual Property, or any release or amendment or waiver of or
consent to departure from any other Intellectual Property 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 Intellectual
Property; 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 Intellectual Property 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 Intellectual Property 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 have 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 Intellectual Property 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 Intellectual Property; (iii) to pay or discharge
taxes, liens, security interests or other encumbrances at any time levied or
placed on or threatened against the Intellectual Property; (iv) to demand,
collect, receipt for, compromise, settle and sue for monies due in respect of
the Intellectual Property; and (v) generally, to do, at the option of the
Secured Party, and at the Issuers’ 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 Intellectual Property and the Security Interest granted
therein in order to effect the intent of this Agreement, the Note, the
Subscription Agreement, all as fully and effectually as the Issuers might or
could do; and each 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  C, 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 Intellectual Property.

    


    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (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
Intellectual Property 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 Issuer:

              	
                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 Intellectual Property 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 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.

    


    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (b)           All
of the rights and remedies of the Secured Party with respect to the Intellectual
Property, 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.

    


    (c)           This
Agreement and the Security Agreement constitute 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 Intellectual Property 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.

    


    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (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.

    


    (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]

    


    
      
        
           


        

        
          12

          
            

          

        

        
           


        

      

    

    


    IN
WITNESS WHEREOF, the parties hereto have caused this 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 SHP 
England

                                                  
	 
      	
                                                    Facsimile:

                                                  
	 
      	 
      	 
      
	 
      	 
      
	 
      	
                                                    Mary
      Goldberg

                                                  
	 
      	 
      	 
      
	 
      	
                                                    Address:

                                                  
	 
      	
                                                    Facsimile:

                                                  


                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	 	 	 	 
	 
      	 
      	
                                        Mercado
      De Expect

                                      	 
      
	 	 	 	 
	 
      	 
      	
                                        Address:

                                        Facsimile:

                                      	 
      
	 	 	 	 
	 	 	 	 
	 
      	 
      	
                                        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:

                                      	 
      


                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
A

    


    Principal Place of Business
of the Issuers:

    
 

    Locations Where Intellectual
Property is Located or Stored:

    
 

    List of Subsidiaries of the
Issuers:

    


    
      
        
           


        

        
          15

          
            

          

        

        
           


        

      

    

     

    SCHEDULE
B

     

    
      	
              A.

            	
              Licenses, Patents and
      Patent Licenses

            


    

    


    
      
        	
                Patent

              	
                Application or Registration
    No.

              	
                Country

              	
                Registration
      or

                Filing
      Date

              


      

    

    


    
      	
              B.

            	
              Trademarks and
      Trademark Licenses

            


    

    


    
      
        	
                Patent

              	
                Application or Registration
    No.

              	
                Country

              	
                Registration
      or

                Filing
Date

              


      

    

    


    
      	
              C.

            	
              Copyrights and
      Copyright Licenses

            


    

    


    
      
        	
                Patent

              	
                Application or Registration
    No.

              	
                Country

              	
                Registration
      or

                Filing
Date

              


      

    

    


    
      	
              D.

            	
              Trade Secrets and
      Trade Secret Licenses

            


    

    


    
      
        	
                Patent

              	
                Application or Registration
    No.

              	
                Country

              	
                Registration
      or

                Filing
Date

              


      

    

    


    
      
        
           


        

        
          16

          
            

          

        

        
           


        

      

    

    


    SCHEDULE
C

    


    Jurisdictions:

    


    
      
        
           


        

        
          17