f8k1209ex10iv_yesdtc.htm


    Exhibit 10.4

     

    SECURITY
AGREEMENT

    


    1.           Identification.

    


    This
Security Agreement (the “Agreement”), dated as of December 11, 2009, is entered
into by and between YesDTC, Inc., a Delaware corporation (“Debtor”), the lenders
set forth on Schedule
I hereto (the “Lenders”).

    


    2.           Recitals.

    


    2.1           At
or about the date hereof, the Lenders are making loans (the “Loan”) to Debtor.
It is beneficial to Debtor that the Loan is made.

     

    2.2           The
Loan will be evidenced by promissory notes (“Notes”) issued by Debtor on or
about the date of this Agreement pursuant to subscription agreement (the
“Subscription Agreement”) to which Debtor and Lenders are
parties.  The Notes are in the principal amount of $200,000 and were
or will be executed by Debtor as “Borrower” or “Debtor” for the benefit of each
Lender as the “Holder” or “Lender” thereof.

    


    2.3           In
consideration of the Loan made and to be made by Lenders to Debtor and for other
good and valuable consideration, and as security for the performance by Debtor
of its obligations under the Notes, and as security for the repayment of the
Loan and all other sums due from Debtor to Lenders arising under the Transaction
Documents (as defined in the Subscription Agreement) and any other agreement
between or among them (collectively, the “Obligations”), Debtor, for good and
valuable consideration, receipt of which is acknowledged, has agreed to grant to
the Lenders a security interest in the Collateral (as such term is hereinafter
defined), on the terms and conditions hereinafter set
forth.  Obligations include all future advances and loans by Lenders
to Debtor that may be made pursuant to the Subscription Agreement or any other
agreements.

    


    2.4           The
following defined terms which are defined in the Uniform Commercial Code in
effect in the State of New York on the date hereof are used herein as so
defined:  Accounts, Chattel Paper, Documents, Equipment, General
Intangibles, Instruments, Inventory and Proceeds.  Other capitalized
terms employed herein shall have the meanings attributed to them in the
Subscription Agreement.

    


    3.           Grant of General Security
Interest in Collateral.

    


    3.1   As
security for the Obligations of Debtor, Debtor hereby grants the Lenders, a
security interest in the Collateral.

    


    3.2   “Collateral”
shall mean all of the following property of Debtor:

    


    (A)           All
now owned and hereafter acquired right, title and interest of Debtor in, to and
in respect of all Accounts, Goods, real or personal property, all present and
future books and records relating to the foregoing and all products and Proceeds
of the foregoing, and as set forth below:

    


    (i)           All
now owned and hereafter acquired right, title and interest of Debtor in, to and
in respect of all: Accounts, interests in goods represented by Accounts,
returned, reclaimed or repossessed goods with respect thereto and rights as an
unpaid vendor; contract rights; Chattel Paper; investment property; General
Intangibles (including but not limited to, tax and duty claims and refunds,
registered and unregistered patents, trademarks, service marks, certificates,
copyrights trade names, applications for the foregoing, trade secrets, goodwill,
processes, drawings, blueprints, customer lists, licenses, whether as licensor
or licensee, choses in action and other claims, and existing and future
leasehold interests and claims in and to equipment, real estate and fixtures);
Documents; Instruments; letters of credit, bankers’ acceptances or guaranties;
cash moneys, deposits; securities, bank accounts, deposit accounts, credits and
other property now or hereafter owned or held in any capacity by Debtor, as well
as agreements or property securing or relating to any of the items referred to
above;

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    
 

                                                
   (ii)           Goods:  All
now owned and hereafter acquired right, title and interest of Debtor in, to and
in respect of goods, including, but not limited to:

    


    (a)           All
Inventory, wherever located, whether now owned or hereafter acquired, of
whatever kind, nature or description, including all raw materials,
work-in-process, finished goods, and materials to be used or consumed in
Debtor’s business; finished goods, timber cut or to be cut, oil, gas,
hydrocarbons, and minerals extracted or to be extracted, and all names or marks
affixed to or to be affixed thereto for purposes of selling same by the seller,
manufacturer, lessor or licensor thereof and all Inventory which may be returned
to Debtor by its customers or repossessed by Debtor and all of Debtors’ right,
title and interest in and to the foregoing (including all of Debtor’s rights as
a seller of goods);

    


    (b)           All
Equipment and fixtures, wherever located, whether now owned or hereafter
acquired, including, without limitation, all machinery, furniture and fixtures,
and any and all additions, substitutions, replacements (including spare parts),
and accessions thereof and thereto (including, but not limited to Debtor’s
rights to acquire any of the foregoing, whether by exercise of a purchase option
or otherwise);

    


    (iii)           Property:  All
now owned and hereafter acquired right, title and interests of Debtor in, to and
in respect of any other personal property in or upon which Debtor has or may
hereafter have a security interest, lien or right of setoff;

    


                                
   (iv)           Books and
Records:  All present and future books and records relating to
any of the above including, without limitation, all computer programs, printed
output and computer readable data in the possession or control of the Debtor,
any computer service bureau or other third party; and

    


                              
     (v)           Products and
Proceeds:  All products and Proceeds of the foregoing in
whatever form and wherever located, including, without limitation, all insurance
proceeds and all claims against third parties for loss or destruction of or
damage to any of the foregoing.

    


    (B)           All
now owned and hereafter acquired right, title and interest of Debtor in, to and
in respect of the following:

    


    (i)           all
shares of stock, partnership interests, member interests or other equity
interests from time to time acquired by Debtor, in any current Subsidiary or any
Subsidiary that is not a Subsidiary of the Debtor on the date hereof (“Future
Subsidiaries”), the certificates representing such shares, and other rights,
contractual or otherwise, in respect thereof and all dividends, distributions,
cash, instruments, investment property and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of such shares, interests or equity; and

    


    (ii)           all
security entitlements of Debtor in, and all Proceeds of any and all of the
foregoing in each case, whether now owned or hereafter acquired by Debtor and
howsoever its interest therein may arise or appear (whether by ownership,
security interest, lien, claim or otherwise).

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    3.3           The
Lenders are hereby specifically authorized, after the Maturity Date (defined in
the Notes) accelerated or otherwise, and after the occurrence of an Event of
Default (as defined herein) and the expiration of any applicable cure period, to
transfer any Collateral into the name of the Lenders and to take any and all
action deemed advisable to the Lenders to remove any transfer restrictions
affecting the Collateral.

    


    4.           Perfection of Security
Interest.

    


    4.1           Debtor
shall prepare, execute and deliver to the Lenders UCC-1 Financing
Statements.  The Lenders are instructed to prepare and file at
Debtor’s cost and expense, financing statements in such jurisdictions deemed
advisable to Lenders, including but not limited to the State of
Delaware.

    


    4.2           All
other certificates and instruments constituting Collateral from time to time
required to be pledged to Lenders pursuant to the terms hereof (the “Additional
Collateral”) shall be delivered to Lenders promptly upon receipt thereof by or
on behalf of Debtor.  All such certificates and instruments shall be
held by or on behalf of Lenders pursuant hereto and shall be delivered in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment or undated stock powers executed in blank,
all in form and substance satisfactory to Lenders.  If any Collateral
consists of uncertificated securities, unless the immediately following sentence
is applicable thereto, Debtor shall cause Lenders (or its custodian, nominee or
other designee) to become the registered holder thereof, or cause each issuer of
such securities to agree that it will comply with instructions originated by
Lenders with respect to such securities without further consent by
Debtor.  If any Collateral consists of security entitlements, Debtor
shall transfer such security entitlements to Lenders (or its custodian, nominee
or other designee) or cause the applicable securities intermediary to agree that
it will comply with entitlement orders by Lenders without further consent by
Debtor.

    


    4.3           If
Debtor shall receive, by virtue of Debtor being or having been an owner of any
Collateral, any (i) stock certificate (including, without limitation, any
certificate representing a stock dividend or distribution in connection with any
increase or reduction of capital, reclassification, merger, consolidation, sale
of assets, combination of shares, stock split, spin-off or split-off),
promissory note or other instrument, (ii) option or right, whether as an
addition to, substitution for, or in exchange for, any Collateral, or otherwise,
(iii) dividends payable in cash (except such dividends permitted to be retained
by Debtor pursuant to Section 5.2 hereof) or in securities or other property or
(iv) dividends or other distributions in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital, capital
surplus or paid-in surplus, Debtor shall receive such stock certificate,
promissory note, instrument, option, right, payment or distribution in trust for
the benefit of Lenders, shall segregate it from Debtor’s other property and
shall deliver it forthwith to Lenders, in the exact form received, with any
necessary endorsement and/or appropriate stock powers duly executed in blank, to
be held by Lenders as Collateral and as further collateral security for the
Obligations.

    


    5.           Distribution.

    


    5.1           So
long as an Event of Default does not exist, Debtor shall be entitled to exercise
all voting power pertaining to any of the Collateral, provided such exercise is
not contrary to the interests of the Lenders and does not impair the
Collateral.

    


    5.2.          At
any time an Event of Default exists or has occurred and is continuing, all
rights of Debtor, upon notice given by Lenders, to exercise the voting power and
receive payments, which it would otherwise be entitled to pursuant to Section
5.1, shall cease and all such rights shall thereupon become vested in Lenders,
which shall thereupon have the sole right to exercise such voting power and
receive such payments.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
 

    5.3           All
dividends, distributions, interest and other payments which are received by
Debtor contrary to the provisions of Section 5.2 shall be received in trust for
the benefit of Lenders as security and Collateral for payment of the Obligation,
shall be segregated from other funds of Debtor, and shall be forthwith paid over
to Lenders as Collateral in the exact form received with any necessary
endorsement and/or appropriate stock powers duly executed in blank, to be held
by Lenders as Collateral and as further collateral security for the
Obligations.

    


    6.           Further Action By Debtor;
Covenants and Warranties.

    


    6.1           Subject
to the terms of this Agreement, Lenders at all times shall have a perfected
security interest in the Collateral. Debtor represents that, other than the
security interests described on Schedule 6.1, it has and will
continue to have full title to the Collateral free from any liens, leases,
encumbrances, judgments or other claims.  The Lenders’ security
interest in the Collateral constitutes and will continue to constitute a first,
prior and indefeasible security interest in favor of Lenders, subject only to
the security interests described on Schedule
6.1.  Debtor will do all acts and things, and will execute and
file all instruments (including, but not limited to, security agreements,
financing statements, continuation statements, etc.) reasonably requested by
Lenders to establish, maintain and continue the perfected security interest of
Lenders in the perfected Collateral, and will promptly on demand, pay all costs
and expenses of filing and recording, including the costs of any searches
reasonably deemed necessary by Lenders from time to time to establish and
determine the validity and the continuing priority of the security interest of
Lenders, and also pay all other claims and charges that, in the opinion of
Lenders are reasonably likely to materially prejudice, imperil or otherwise
affect the Collateral or Lenders’ security interests therein.

    


    6.2           Except
(i) in connection with sales of Collateral, in the ordinary course of business,
for fair value and in cash, and (ii) Collateral which is substituted by assets
of identical or greater value (subject to the consent of the Lenders) or which
is inconsequential in value, Debtor will not sell, transfer, assign or pledge
those items of Collateral (or allow any such items to be sold, transferred,
assigned or pledged), without the prior written consent of Lenders other than a
transfer of the Collateral to a wholly-owned United States formed and located
subsidiary on prior notice to Lenders, and provided the Collateral remains
subject to the security interest herein described.  Although Proceeds
of Collateral are covered by this Agreement, this shall not be construed to mean
that Lenders consent to any sale of the Collateral, except as provided
herein.  Sales of Collateral in the ordinary course of business and as
described above shall be free of the security interest of Lenders and Lenders
shall promptly execute such documents (including without limitation releases and
termination statements) as may be required by Debtor to evidence or effectuate
the same.

    


    6.3           Debtor
will, at all reasonable times during regular business hours and upon reasonable
notice, allow Lenders or their representatives free and complete access to the
Collateral and all of Debtor’s records that in any way relate to the Collateral,
for such inspection and examination as Lenders reasonably deem
necessary.

    


    6.4           Debtor,
at its sole cost and expense, will protect and defend this Security Agreement,
all of the rights of Lenders hereunder, and the Collateral against the claims
and demands of all other persons.

    


    6.5           Debtor
will promptly notify Lenders of any levy, distraint or other seizure by legal
process or otherwise of any part of the Collateral, and of any threatened or
filed claims or proceedings that are reasonably likely to affect or impair any
of the rights of Lenders under this Security Agreement in any material
respect.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    6.6           Debtor,
at its own expense, will obtain and maintain in force insurance policies
covering losses or damage to those items of Collateral which constitute physical
personal property, which insurance shall be of the types customarily insured
against by companies in the same or similar business, similarly situated, in
such amounts (with such deductible amounts) as is customary for such companies
under the same or similar circumstances, similarly situated.  Debtor
shall make the Lenders loss payee thereon to the extent of its interest in the
Collateral. Lenders are hereby irrevocably (until the Obligations are
indefeasibly paid in full) appointed Debtor’s attorney-in-fact to endorse any
check or draft that may be payable to Debtor so that Lenders may collect the
proceeds payable for any loss under such insurance.  The proceeds of
such insurance, less any costs and expenses incurred or paid by Lenders in the
collection thereof, shall be applied either toward the cost of the repair or
replacement of the items damaged or destroyed, or on account of any sums secured
hereby, whether or not then due or payable.

    


    6.7           In
order to protect the Collateral and Lenders’ interest therein, Lenders may, at
Lenders’ option, and without any obligation to do so, pay, perform and discharge
any and all amounts, costs, expenses and liabilities herein agreed to be paid or
performed by Debtor upon Debtor’s
failure to do so.  All amounts expended by Lenders in so doing shall
become part of the Obligations secured hereby, and shall be immediately due and
payable by Debtor to Lenders upon demand and shall bear interest at the lesser
of 15% per annum or the highest legal amount allowed from the dates of such
expenditures until paid.

    


    6.8           Upon
the request of Lenders, Debtor will furnish to Lenders within five (5) business
days thereafter, or to any proposed assignee of this Security Agreement, a
written statement in form reasonably satisfactory to Lenders, duly acknowledged,
certifying the amount of the principal and interest and any other sum then owing
under the Obligations, whether to its knowledge any claims, offsets or defenses
exist against the Obligations or against this Security Agreement, or any of the
terms and provisions of any other agreement of Debtor securing the
Obligations.  In connection with any assignment by Lenders of this
Security Agreement, Debtor hereby agrees to cause the insurance policies
required hereby to be carried by Debtor, if any, to be endorsed in form
satisfactory to Lenders or to such assignee, with loss payable clauses in favor
of such assignee, and to cause such endorsements to be delivered to Lenders
within ten (10) calendar days after request therefor by Lenders.

    


    6.9           Debtor
will, at its own expense, make, execute, endorse, acknowledge, file and/or
deliver to the Lenders from time to time such vouchers, invoices, schedules,
confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, reports and other reasonable
assurances or instruments and take further steps relating to the Collateral and
other property or rights covered by the security interest hereby granted, as the
Lenders may reasonably require to perfect their security interest
hereunder.

    


    6.10         Debtor
represents and warrants that they are the true and lawful exclusive owners of
the Collateral, free and clear of any liens, encumbrances and claims other than
those listed on Schedule
6.1.

    


    6.11         Debtor
hereby agrees not to divest itself of any right under the Collateral except as
permitted herein absent prior written approval of the Lenders, except to a
subsidiary organized and located in the United States on prior notice to Lenders
provided the Collateral remains subject to the security interest herein
described.

               

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    6.12         Debtor
shall cause each Subsidiary of Debtor in existence on the date hereof and each
Future Subsidiary to execute and deliver to Lenders promptly and in any event
within ten (10) days after the formation, acquisition or change in status
thereof (A) if requested by Lenders, a security and pledge agreement
substantially in the form of this Agreement together with (x) certificates
evidencing all of the capital stock of each Subsidiary of and any entity owned
by such Subsidiary, (y) undated stock powers executed in blank with signatures
guaranteed, and (z) such opinion of counsel and such approving certificate of
such Subsidiary as Lenders may reasonably request in respect of complying with
any legend on any such certificate or any other matter relating to such shares
and (B) such other agreements, instruments, approvals, legal opinions or other
documents reasonably requested by Lenders in order to create, perfect, establish
the first priority of or otherwise protect any lien purported to be covered by
any such pledge and security agreement or otherwise to effect the intent that
all property and assets of such Subsidiary shall become Collateral for the
Obligations.  For purposes of this Agreement, “Subsidiary” means,
with respect to any entity at any date, any corporation, limited or general
partnership, limited liability company, trust, estate, association, joint
venture or other business entity, of which more than 30% of (A) the
outstanding capital stock having (in the absence of contingencies) ordinary
voting power to elect a majority of the board of directors or other managing
body of such entity, (B) in the case of a partnership or limited liability
company, the interest in the capital or profits of such partnership or limited
liability company or (C) in the case of a trust, estate, association, joint
venture or other entity, the beneficial interest in such trust, estate,
association or other entity is, at the time of determination, owned or
controlled directly or indirectly through one or more intermediaries, by such
entity.  Schedule
6.12 annexed hereto
contains a list of all Subsidiaries of the Debtor as of the date of this
Agreement.

    


    6.13         Debtor
will notify Lenders within ten days of the occurrence of any change of Debtor’s
name, domicile, address or jurisdiction of incorporation.  The timely
giving of this notice is a material obligation of Debtor.

    


    7.           Power of
Attorney.

    


    At any
time an Event of Default has occurred, and only after the applicable cure period
as set forth in this Agreement and the other Transaction Documents, and is
continuing, Debtor hereby irrevocably constitutes and appoints Lenders as the
true and lawful attorney of Debtor, with full power of substitution, in the
place and stead of Debtor and in the name of Debtor or otherwise, at any time or
times, in the discretion of the Lenders, to take any action and to execute any
instrument or document which the Lenders may deem necessary or advisable to
accomplish the purposes of this Agreement.  This power of attorney is
coupled with an interest and is irrevocable until the Obligations are
satisfied.

    


    8.           Performance By The
Lenders.

    


    If Debtor
fails to perform any material covenant, agreement, duty or obligation of Debtor
under this Agreement, Lenders may, after any applicable cure period, at any time
or times in its discretion, take action to effect performance of such
obligation.  All reasonable expenses of the Lenders incurred in
connection with the foregoing authorization shall be payable by Debtor as
provided in Paragraph
12.1 hereof.  No discretionary right, remedy or power granted
to the Lenders under any part of this Agreement shall be deemed to impose any
obligation whatsoever on the Lenders with respect thereto, such rights, remedies
and powers being solely for the protection of the Lenders.

    


    9.           Event of
Default.

    


    An event
of default (“Event of Default”) shall be deemed to have occurred hereunder upon
the occurrence of any event of default as defined and described in this
Agreement, in the Notes, the Subscription Agreement, Transaction Documents (as
defined in the Subscription Agreement), and any other agreement to which Debtor
and Lenders are parties.   Upon and after any Event of Default,
after the applicable cure period, if any, any or all of the Obligations shall
become immediately due and payable at the option of the Lenders, and the Lenders
may dispose of Collateral as provided below.  A default by Debtor of
any of its material obligations pursuant to this Agreement and any of the
Transaction Documents shall be an Event of Default hereunder and an “Event of
Default” as defined in the Notes, and Subscription Agreement.

    
 

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    10.           Disposition of
Collateral.

    


    Upon and
after any Event of Default which is then continuing,

    


    10.1         The
Lenders may exercise their rights with respect to each and every component of
the Collateral, without regard to the existence of any other security or source
of payment for, in order to satisfy the Obligations.  In addition to
other rights and remedies provided for herein or otherwise available to it, the
Lenders shall have all of the rights and remedies of a lender on default under
the Uniform Commercial Code then in effect in the State of New
York.

    


    10.2         If
any notice to Debtor of the sale or other disposition of Collateral is required
by then applicable law, five (5) business days prior written notice (which
Debtor agrees is reasonable notice within the meaning of Section 9.612(a) of the
Uniform Commercial Code) shall be given to Debtor of the time and place of any
sale of Collateral which Debtor hereby agrees may be by private
sale.  The rights granted in this Section are in addition to any and
all rights available to Lenders under the Uniform Commercial Code.

    


    10.3         The
Lenders are authorized, at any such sale, if the Lenders deem it advisable to do
so, in order to comply with any applicable securities laws, to restrict the
prospective bidders or purchasers to persons who will represent and agree, among
other things, that they are purchasing the Collateral for their own account for
investment, and not with a view to the distribution or resale thereof, or
otherwise to restrict such sale in such other manner as the Lenders deem
advisable to ensure such compliance.  Sales made subject to such
restrictions shall be deemed to have been made in a commercially reasonable
manner.

    


    10.4         All
proceeds received by the Lenders in respect of any sale, collection or other
enforcement or disposition of Collateral, shall be applied (after deduction of
any amounts payable to the Lenders pursuant to Paragraph 12.1
hereof) against the Obligations.   Upon payment in full of all
Obligations, Debtor shall be entitled to the return of all Collateral, including
cash, which has not been used or applied toward the payment of Obligations or
used or applied to any and all costs or expenses of the Lenders incurred in
connection with the liquidation of the Collateral (unless another person is
legally entitled thereto).  Any assignment of Collateral by the
Lenders to Debtor shall be without representation or warranty of any nature
whatsoever and wholly without recourse.  To the extent allowed by law,
Lenders may purchase the Collateral and pay for such purchase by offsetting the
purchase price with sums owed to Lenders by Debtor arising under the Obligations
or any other source.

    


    10.5         Rights of Lenders to Appoint
Receiver.   Without limiting, and in addition to, any
other rights, options and remedies Lenders have under the Transaction Documents,
the UCC, at law or in equity, or otherwise, upon the occurrence and continuation
of an Event of Default, Lenders shall have the right to apply for and have a
receiver appointed by a court of competent jurisdiction.  Debtor
expressly agrees that such a receiver will be able to manage, protect and
preserve the Collateral and continue the operation of the business of Debtor to
the extent necessary to collect all revenues and profits thereof and to apply
the same to the payment of all expenses and other charges of such receivership,
including the compensation of the receiver, until a sale or other disposition of
such Collateral shall be finally made and consummated.  Debtor waives
any right to require a bond to be posted by or on behalf of any such
receiver.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    11.           Waiver of Automatic
Stay.   Debtor acknowledges and agrees that should a
proceeding under any bankruptcy or insolvency law be commenced by or against
Debtor, or if any of the Collateral should become the subject of any bankruptcy
or insolvency proceeding, then the Lenders should be entitled to, among other
relief to which the Lenders may be entitled under the Notes, Subscription
Agreement, Transaction Documents, and any other agreement to which the Debtor
and Lenders are parties (collectively “Loan Documents”) and/or applicable law,
an order from the court granting immediate relief from the automatic stay
pursuant to 11 U.S.C. Section 362 to permit the Lenders to exercise all of their
rights and remedies pursuant to the Loan Documents and/or applicable
law.  DEBTOR EXPRESSLY WAIVES THE BENEFIT OF THE AUTOMATIC STAY
IMPOSED BY 11 U.S.C. SECTION 362.  FURTHERMORE, DEBTOR EXPRESSLY
ACKNOWLEDGES AND AGREES THAT NEITHER 11 U.S.C. SECTION 362 NOR ANY OTHER SECTION
OF THE BANKRUPTCY CODE OR OTHER STATUTE OR RULE (INCLUDING, WITHOUT LIMITATION,
11 U.S.C. SECTION 105) SHALL STAY, INTERDICT, CONDITION, REDUCE OR INHIBIT IN
ANY WAY THE ABILITY OF THE LENDERS TO ENFORCE ANY OF ITS RIGHTS AND REMEDIES
UNDER THE LOAN DOCUMENTS AND/OR APPLICABLE LAW.   Debtor
hereby consents to any motion for relief from stay which may be filed by the
Lenders in any bankruptcy or insolvency proceeding initiated by or against
Debtor, and further agrees not to file any opposition to any motion for relief
from stay filed by the Lenders.  Debtor represents, acknowledges and
agrees that this provision is a specific and material aspect of this Agreement,
and that the Lenders would not agree to the terms of this Agreement if this
waiver were not a part of this Agreement.  Debtor further represents,
acknowledges and agrees that this waiver is knowingly, intelligently and
voluntarily made, that neither the Lenders nor any person acting on behalf of
the Lenders has made any representations to induce this waiver, that Debtor has
been represented (or has had the opportunity to be represented) in the signing
of this Agreement and in the making of this waiver by independent legal counsel
selected by Debtor and that Debtor has had the opportunity to discuss this
waiver with counsel.   Debtor further agrees that any bankruptcy
or insolvency proceeding initiated by Debtor will only be brought in the Federal
Court within the Southern District of New York.

    


    12.           Miscellaneous.

    


    12.1         Expenses.  Debtor
shall pay to the Lenders, on demand, the amount of any and all reasonable
expenses, including, without limitation, attorneys’ fees, legal expenses and
brokers’ fees, which the Lenders may incur in connection with (a) sale,
collection or other enforcement or disposition of Collateral; (b) exercise or
enforcement of any the rights, remedies or powers of the Lenders hereunder or
with respect to any or all of the Obligations upon breach or threatened breach;
or (c) failure by Debtor to perform and observe any agreements of Debtor
contained herein which are performed by Lenders.

    


    12.2         Waivers, Amendment and
Remedies.  No course of dealing by the Lenders and no failure
by the Lenders to exercise, or delay by the Lenders in exercising, any right,
remedy or power hereunder shall operate as a waiver thereof, and no single or
partial exercise thereof shall preclude any other or further exercise thereof or
the exercise of any other right, remedy or power of the Lenders.  No
amendment, modification or waiver of any provision of this Agreement and no
consent to any departure by Debtor therefrom shall, in any event, be effective
unless contained in a writing signed by the Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. The rights, remedies and powers of the Lenders, not
only hereunder, but also under any instruments and agreements evidencing or
securing the Obligations and under applicable law are cumulative, and may be
exercised by the Lenders from time to time in such order as the Lenders may
elect.

    


    12.3         Notices.  All
notices or other communications given or made hereunder shall be in writing and
shall be personally delivered or deemed delivered the first business day after
being faxed (provided that a copy is delivered by first class mail) to the party
to receive the same at its address set forth below or to such other address as
either party shall hereafter give to the other by notice duly made under this
Section:

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    
 

    To
Debtor:                                            
1155C Arnold Drive

    Suite 168, Martinez, CA
94553

    Attn: Joe Noel, CEO

    Fax: 925-922-2560)

    


    With a copy by fax only
to:               Harvey
Kesner

    Sichenzia Ross Friedman Ference
LLP

    61 Broadway, 32nd
Floor

    New York, NY 10006

    Fax: (212) 930-9725

    


    To
Lender:                                           
To the addresses set forth on Schedule I

    


    Any party
may change its address by written notice in accordance with this
paragraph.

    


    12.4         Term; Binding
Effect.  This Agreement shall (a) remain in full force and
effect until payment and satisfaction in full of all of the Obligations; (b) be
binding upon Debtor, and its successors and permitted assigns; and (c) inure to
the benefit of the Lenders and its successors and assigns.

    


    12.5         Captions.  The
captions of Paragraphs, Articles and Sections in this Agreement have been
included for convenience of reference only, and shall not define or limit the
provisions of this agreement and have no legal or other significance
whatsoever.

    


    12.6         Governing Law; Venue;
Severability.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard to
conflicts of laws principles that would result in the application of the substantive
laws of another jurisdiction, except to the extent that the perfection of
the security interest granted hereby in respect of any item of Collateral may be
governed by the law of another jurisdiction.  Any legal action or
proceeding against Debtor with respect to this Agreement must be brought only in
the courts in the State of New York or of the United States for the Southern
District of New York, and, by execution and delivery of this Agreement, Debtor
hereby irrevocably accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts. Debtor hereby
irrevocably waives any objection which they may now or hereafter have to the
laying of venue of any of the aforesaid actions or proceedings arising out of or
in connection with this Agreement brought in the aforesaid courts and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been brought in
an inconvenient forum.  If any provision of this Agreement, or the
application thereof to any person or circumstance, is held invalid, such
invalidity shall not affect any other provisions which can be given effect
without the invalid provision or application, and to this end the provisions
hereof shall be severable and the remaining, valid provisions shall remain of
full force and effect.

    


    12.7         Entire
Agreement.  This Agreement contains the entire agreement of the
parties and supersedes all other agreements and understandings, oral or written,
with respect to the matters contained herein.

    


    12.8         Counterparts/Execution.  This
Agreement may be executed in any number of counterparts and by the different
signatories hereto on separate counterparts, each of which, when so executed,
shall be deemed an original, but all such counterparts shall constitute but one
and the same instrument.  This Agreement may be executed by facsimile
signature and delivered by electronic transmission.

    


    13.           Termination;
Release.  When the Obligations have been indefeasibly paid and
performed in full or all outstanding Notes have been converted to common stock
pursuant to the terms of the Notes and the Subscription Agreements, this
Agreement shall be terminated, and the Lenders, at the request and sole expense
of the Debtor, will execute and deliver to the Debtor the proper instruments
(including UCC termination statements) acknowledging the termination of the
Security Agreement, and duly assign, transfer and deliver to the Debtor, without
recourse, representation or warranty of any kind whatsoever, such of the
Collateral,  as may be in the possession of the Lenders.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    14.           Lenders
Powers.

    


    14.1         Lenders
Powers.  The powers conferred on the Lenders hereunder are
solely to protect Lenders’ interest in the Collateral and shall not impose any
duty on it to exercise any such powers.

    


    14.2         Reasonable
Care.  The Lenders are required to exercise reasonable care in
the custody and preservation of any Collateral in its possession; provided,
however, that the Lenders shall be deemed to have exercised reasonable care in
the custody and preservation of any of the Collateral if it takes such action
for that purposes as any owner thereof reasonably requests in writing at times
other than upon the occurrence and during the continuance of any Event of
Default, but failure of the Lenders to comply with any such request at any time
shall not in itself be deemed a failure to exercise reasonable
care.

    


    14.3         Majority in
Interest.   The rights of the Lenders hereunder, except as
otherwise set forth herein shall be exercised upon the approval of Lenders
holding 70% of the outstanding Obligations (“Majority in Interest”) at the time
such approval is sought or given.  Possession of any tangible or
physical Collateral shall be held by any Lender pursuant to this Agreement and
on behalf of all Lenders as to their respective rights.  The
Collateral, to the extent it may be transferred to Lenders, may be held in the
name of Lender or in “street name”.  Unless agreed to otherwise by a
Majority in Interest, Lender is authorized to act on behalf of all the Lenders
in connection with the Lenders rights under this Agreement.

    


    


    [THIS
SPACE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    
 

    IN WITNESS WHEREOF, the
undersigned have executed and delivered this Security Agreement, as of the date
first written above.

    


    “DEBTOR”

    YESDTC,
INC.

    a
Delaware corporation

    


    


    By: /s/ Joe
Noel

    


    Its:
Chief Executive
Officer

    


    


    


    “LENDERS”

    


    


    


    


    _________________________________________

    


    


    /s/
Barry Honig

    _______________________________________

    GRQ
Consultants 401k Roth IRA fbo Barry Honig

    


    /s/
Peter Benz

    _________________________________________

    PETER
BENZ

    


    /s/
Harvey Kesner

    _________________________________________

    PARADOX
CAPITAL PARTNERS, LLC

    


    /s/
Arie Rabinowitz

    _________________________________________

    MOMONA
CAPITAL

    


    /s/
Andy Graves

    _________________________________________

    ANDY
GRAVES

    


    


    


    


    


    


    


    This
Security Agreement may be signed by facsimile signature and

    delivered
by confirmed facsimile transmission.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    Schedule
I

    


    


    


    
      	
              SUBSCRIBER
      AND ADDRESS

            	
              PURCHASE
      PRICE

            	
              NOTE
      PRINCIPAL

            	
              WARRANT
      SHARES

            
	
              JOSEPH
      NOEL, OR DESIGNEE

            	
              $60,000.00

            	
              $60,000.00

            	
              15,000,000

            
	
              GRQ
      Consultants Inc 401K Roth FBO Barry Honig

              595
      S. Federal Highway, Suite 600

              Boca
      Raton, FL 33432

            	
              $88,000.00

            	
              $88,000.00

            	
              22,000,000

            
	
              PETER
      BENZ

            	
              $20,000.00

            	
              $20,000.00

            	
              5,000,000

            
	
              PARADOX
      CAPITAL PARTNERS, LLC

              65
      Mayhew Drive

              South
      Orange, NJ 07079

            	
              $16,000.00

            	
              $16,000.00

            	
              4,000,000

            
	
              MOMONA
      CAPITAL

            	
              $4,000.00

            	
              $4,000.00

            	
              1,000,000

            
	
              ANDY
      GRAVES

            	
              $12,000.00

            	
              $12,000.00

            	
              3,000,000

            


    

    


    


    12