UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): August 31,
2018
YOUNGEVITY INTERNATIONAL, INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
|
000-54900
|
|
90-0890517
|
|
(State
or other jurisdiction of incorporation)
|
|
(Commission
File No.)
|
|
(IRS
Employer Identification No.)
|
2400 Boswell Road, Chula Vista, CA 91914
(Address
of principal executive offices) (Zip Code)
Registrant’s
telephone number, including area code: (619) 934-3980
N/A
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐
Written communications pursuant to Rule 425 under
the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under
the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate
by check mark whether the registrant is an emerging growth company
as defined in in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this
chapter).
Emerging growth
company
☑
If an
emerging growth company, indicate by checkmark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act.
☐
Item 1.01. Entry into a Material Definitive
Agreement.
Offering
On
August 31, 2018, Youngevity International, Inc. (the
“Company”) closed a private offering (the
“Offering”) of its common stock, par value $0.001 per
share (the “Common Stock”), and entered into a
Securities Purchase Agreement (the “Purchase
Agreement”) with an existing accredited investor (the
“Initial Investor”) pursuant to which the Company sold
105,263 shares of its Common Stock at an offering price of $4.75
per share and the Initial Investor agreed to purchase 105,263
shares of Common Stock at an offering price of $4.75 per share on
or before the date (the “Second Closing Date”) that is
three days from the effectiveness of the registration statement to
be filed by the Company with the Securities Exchange Commission
relating to the Offering (the “Registration
Statement”).
Pursuant
to the Purchase Agreement, the Company issued the Initial Investor
a three-year warrant (the “Warrant”) to purchase
210,526 shares of Common Stock at an exercise price of $4.75, of
which 105,263 shares are exercisable upon issuance and the
remaining 105,263 shares are exercisable ant time after the Second
Closing Date. The Warrant contains certain anti-dilution provisions
that apply in connection with a sale of Common Stock by the Company
at a price of below $4.75 per share, stock split, stock dividend,
stock combination, recapitalization of the Company. Pursuant to the
Purchase Agreement, the Company also agreed to issue to the Initial
Investor 75,000 shares of its Common Stock as an advisory fee, of
which 37,500 shares have been issued and 37,500 shares are to be
issued at the Second Closing.
The
Purchase Agreement provides that in the event that the average of
the 15 lowest closing prices for the Company’s Common Stock
during the period beginning on August 31, 2018 (the
“Effective Date”) and ending on the date 90 days from
the effective date of the Registration Statement (the
“Subsequent Pricing Period”) is less than $4.75 per
share, then the Company will issue to the Initial Investor
additional shares of its Common Stock (the “True-up
Shares”) within three days from the expiration of the
Subsequent Pricing Period, according to the following formula: X=
[Purchase Price Paid- (A*B)]/B, where:
X=
number of True-up Shares to be issued
A= the
number of purchased shares acquired by Investor
B= the
True-up Price
Notwithstanding
the foregoing, in no event may the aggregate number of shares
issued by the Company, including shares of common stock issued,
shares of common stock underlying the Warrant, the shares of common
stock issued as advisory shares and True-up Shares exceed 2.9% of
the Company’s issued and outstanding Common Stock as of the
Effective Date for each $1,000,000 invested in the
Company.
The
cash proceeds received by the Company from the closing of the
Offering was $500,000, less $7,500 as an allowance for the Initial
Investors’ legal fees. No commissions or other offering
expenses were paid.
Pursuant
to the terms of a Registration Rights Agreement, the Company has
agreed to file a registration statement with the Securities and
Exchange Commission to register the shares of Common Stock issued
at the closings of the Offering and the shares of Common Stock
issuable at the Second Closing, as well as the True-up Shares and
shares to be issued upon exercise of the Warrant.
The
foregoing description of the terms of the Warrant, Purchase
Agreement and Registration Rights Agreement do not purport to be
complete and is subject to, and are qualified in their entirety by
reference to the provisions of such agreements, the forms of which
are filed as Exhibits 4.1, 10.1. and 10.2, respectively, to this
Current Report on Form 8-K and are incorporated herein by
reference. The provisions of the Purchase Agreement, including the
representations and warranties contained therein, are not for the
benefit of any party other than the parties to such agreement and
are not intended as a document for investors and the public to
obtain factual information about the current state of affairs of
the parties to that document. Rather, investors and the public
should look to other disclosures contained in the Company’s
filings with the Securities and Exchange Commission.
Item 3.02.
Unregistered Sales of Equity Securities.
The information regarding the shares of Company and the warrants
set forth under Item 1.01 of this Form 8-K is incorporated by
reference in this Item 3.02. The Company issued to the shares of
the Company’s common stock and the Warrants in reliance on
the exemption from registration provided for under
Section 4(a)(2) of the Securities Act of 1933, as amended (the
“Securities Act”). The Company relied on this exemption
from registration for private placements based in part on the
representations made by the Investors, including the
representations with respect to Investor’s status as an
accredited investor, as such term is defined in Rule 501(a) of the
Securities Act, and Investor’s investment intent.
Item 9.01 Financial Statements and
Exhibits.
(d)
Exhibits.
The
following exhibits are filed with this Current Report on Form
8-K:
|
Exhibit
Number
|
|
Description
|
|
|
|
|
|
|
|
Form of
Warrant Agreement
|
|
|
|
|
|
|
|
Form of
Securities Purchase Agreement between Youngevity International,
Inc. and Investor
|
|
|
|
|
|
|
|
Form of
Registration Rights Agreement between Youngevity International,
Inc. and Investor
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
|
|
YOUNGEVITY
INTERNATIONAL, INC.
|
|
|
|
|
Date:
September 7, 2018
|
By:
/s/ David Briskie
|
|
|
Name:
David Briskie
|
|
|
Title:
President and Chief Financial Officer
|
EXHIBIT INDEX
|
Exhibit
Number
|
|
Description
|
|
|
|
|
|
|
|
Form of
Warrant Agreement
|
|
|
|
|
|
|
|
Form of
Securities Purchase Agreement between Youngevity International,
Inc. and Investor
|
|
|
|
|
|
|
|
Form of
Registration Rights Agreement between Youngevity International,
Inc. and Investor
|
Exhibit 4.1
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN
OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER
AND REASONABLY APPROVED BY THE COMPANY), IN A GENERALLY ACCEPTABLE
FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II)
UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
---------------------------------------
COMMON STOCK PURCHASE WARRANT
|
Number
of shares:
|
Holder:
|
|
|
|
|
Exercise
Price per Share:
$4.75
|
Warrant
No.
|
|
|
|
|
Expiration
Date:
, 2021
|
Issue
Date:
,2018
|
FOR VALUE RECEIVED,
Youngevity International, Inc., a
Delaware corporation (the “
Company
”), hereby
certifies that_____________, or its designated assigns (the
“
Warrant
Holder
”), is entitled to purchase the securities set
forth below.
This
Warrant entitles the Warrant Holder to purchase from the Company
(i) at any time after the Issue Date and before the Expiration
Date, __________ (______) shares (the “Initial
Warrant Shares
”) of
common stock (the “
Common Stock
”) of the
Company and (ii) any time after the Second Closing (as defined in
the Securities Purchase Agreement dated as of the date hereof by
and between the Company and the Warrant Holder) and before the
Expiration Date ______ (____) shares (the “Second
Warrant Shares, the
Initial Warrant Shares and the Second Warrant Shares, collectively,
the “Warrant Shares
”), at an exercise price of
$4.75 per share
(as adjusted
from time to time as provided in Section 7 hereof, the
“
Exercise
Price
”),.
This
Warrant is being issued pursuant to that certain Securities
Purchase Agreement, dated as of the date hereof by and between the
Company and the Warrant Holder, (the “Purchase
Agreement”). Capitalized terms used herein but not otherwise
defined herein, shall have the meanings given to them in the
Purchase Agreement.
This
Warrant is subject to the following terms and
conditions:
1.
Registration of Warrant
.
Subject to the terms of that certain Registration Rights Agreement
dated as of _____, 2018 by and between the Company and the Warrant
Holder, the Company shall register this Warrant upon records to be
maintained by the Company for that purpose (the “
Warrant Register
”), in
the name of the record Warrant Holder hereof from time to time. The
Company may deem and treat the registered Warrant Holder of this
Warrant as the absolute owner hereof for the purpose of any
exercise hereof or any distribution to the Warrant Holder, and for
all other purposes, unless provided notice to the contrary in
accordance herewith.
2.
Investment Representation
. The
Warrant Holder by accepting this Warrant represents that the
Warrant Holder is acquiring this Warrant for its own account or the
account of an affiliate for investment purposes and not with the
view to any offering or distribution and that the Warrant Holder
will not sell or otherwise dispose of this Warrant or the
underlying Warrant Shares in violation of applicable securities
laws. The Warrant Holder acknowledges that the certificates
representing any Warrant Shares will bear a legend indicating that
they have not been registered under the United States Securities
Act of 1933, as amended (the “
1933 Act
”) and may not be
sold by the Warrant Holder except pursuant to an effective
registration statement or pursuant to an exemption from
registration requirements of the 1933 Act and in accordance with
federal and state securities laws. If this Warrant was acquired by
the Warrant Holder pursuant to the exemption from the registration
requirements of the 1933 Act afforded by Regulation S thereunder,
the Warrant Holder acknowledges and covenants that this Warrant may
not be exercised by or on behalf of a Person during the one year
distribution compliance period (as defined in Regulation S)
following the date hereof. “
Person
” means an
individual, partnership, firm, limited liability company, trust,
joint venture, association, corporation, or any other legal
entity.
3.
Validity of Warrant and Issue of
Shares
. The Company represents and warrants that this
Warrant has been duly authorized and validly issued and warrants
and agrees that all of Warrant Shares that may be issued upon the
due exercise of the rights represented by this Warrant will, when
issued upon such exercise, be duly authorized, validly issued,
fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issue thereof. The Company further
warrants and agrees that during the period within which the rights
represented by this Warrant may be exercised, the Company will at
all times have authorized and reserved a sufficient number of
shares of Common Stock to provide for the exercise of the rights
represented by this Warrant.
4.
Registration of Transfers
and Exchange of Warrants
.
a.
Subject to compliance with the legend set forth on the face of this
Warrant, the Company shall register the transfer of this Warrant,
or any portion of this Warrant, in the Warrant Register, upon
delivery by the Warrant Holder to the Company, pursuant to Section
10 of (i) this Warrant, and (ii) a duly completed and executed
written assignment. Upon any such registration or transfer, a new
warrant to purchase Common Stock, in substantially the form of this
Warrant (any such new warrant, a “
New Warrant
”), evidencing
the portion of this Warrant so transferred shall be issued to the
transferee and a New Warrant evidencing the remaining portion of
this Warrant not so transferred, if any, shall be issued to the
transferring Warrant Holder. The acceptance of the New Warrant by
the transferee thereof shall be deemed the acceptance of such
transferee of all of the rights and obligations of a Warrant Holder
of a Warrant.
b. This
Warrant is exchangeable, upon the surrender hereof by the Warrant
Holder to the office of the Company specified in or pursuant to
Section 10 for one or more New Warrants, evidencing in the
aggregate the right to purchase the number of Warrant Shares which
may then be purchased hereunder. Any such New Warrant will be dated
the date of such exchange, and will have the same Expiration Date
as the original Warrant for which the New Warrant was
exchanged.
5.
Exercise of
Warrants
.
a.
Exercise of this Warrant shall be made upon delivery to the Company
pursuant to Section 10, of (i) this Warrant; (ii) a duly completed
and executed election notice, in the form attached hereto (the
“Election Notice”) and (iii) payment of the Exercise
Price. Payment of the Exercise Price may be made at the option of
the Warrant Holder either (a) in cash, wire transfer or by
certified or official bank check payable to the order of the
Company equal to Exercise Price per share in effect at the time of
exercise multiplied by the number of Warrant Shares specified in
the Election Notice, or (b) if a registration statement registering
the Warrant Shares is not effective at the time of exercise then
the Warrant may only be exercised through a cashless exercise
provided in Section 5(b) below. The Company shall promptly (but in
no event later than three (3) business days after the “Date
of Exercise,” as defined herein) issue and deliver to the
Warrant Holder in such name or names as the Warrant Holder may
designate in the Election
Notice,
a certificate for the Warrant Shares issuable upon such exercise,
with such restrictive legend as required by the 1933 Act, as
applicable. Any person so designated by the Warrant Holder to
receive Warrant Shares shall be deemed to have become holder of
record of such Warrant Shares as of the Date of Exercise of this
Warrant. All Warrant Shares delivered to the Warrant Holder the
Company covenants, shall upon due exercise of this Warrant, be duly
authorized, validly issued, fully paid and
non-assessable.
b. If
the closing price per share of the Common Stock (as quoted by
NASDAQ or other principal trading market, if applicable) reported
on the day immediately preceding the Date of Exercise (the
“
Fair Market
Value
”) of one share of Common Stock is greater than
the Exercise Price of one Warrant Share (at the date of calculation
as set forth below), in lieu of exercising this Warrant for cash,
if a registration statement registering the Warrant Shares is not
effective at the time of exercise then the Warrant may only be
exercised by the Warrant Holder electing to receive that number of
Warrant Shares computed using the following formula:
X=
Y (A-B)
A
Where
X= the number of shares of Common Stock to be issued to the Warrant
Holder
Y=
the number of
shares of Warrant Shares purchasable under this Warrant or, if only
a portion of this Warrant is being exercised, the portion of this
Warrant being exercised (at the date of such
calculation)
B=
Exercise Price (as
adjusted to the date of such calculation)
For
purposes of Rule 144 promulgated under the 1933 Act, it is
intended, understood and acknowledged that the Warrant Shares
issued in a cashless exercise transaction in the manner described
above shall be deemed to have been acquired by the Warrant Holder,
and the holding period for the Warrant Shares shall be deemed to
have commenced, on the date this Warrant was originally
issued.
c. A
“
Date of
Exercise
” means the date on which the Company shall
have received (i) this Warrant (or any New Warrant, as applicable),
(ii) the Election Notice (or attached to such New Warrant)
appropriately completed and duly signed, and (iii) payment of the
Exercise Price (if this Warrant is exercised on a cash basis) for
the number of Warrant Shares so indicated by the Warrant Holder to
be purchased.
d. This
Warrant shall be exercisable at any time and from time to time for
such number of Warrant Shares as is indicated in the attached Form
of Election to Purchase. If less than all of the Warrant Shares
which may be purchased under this Warrant are exercised at any
time, the Company shall issue or cause to be issued, at its
expense, a New Warrant evidencing the right to purchase the
remaining number of Warrant Shares for which no exercise has been
evidenced by this Warrant.
e.
Notwithstanding any other provision of this Warrant, the Warrant
Holder may not exercise this Warrant if such exercise would cause
Warrant Holder’s beneficial ownership (as defined by Section
13(d) of the Securities Exchange Act of 1934, as amended) of the
Common Stock of the Company to exceed 4.9% of its total issued and
outstanding Common Stock or voting shares. Upon not less than
sixty-one (61) days advance written notice, at any time or from
time to time, the Warrant Holder at its sole discretion, may waive
this provision of this Warrant.
f.
Notwithstanding any other provision of this Warrant, the Warrant
Holder may not exercise this Warrant if such exercise would cause
Warrant Holder’s beneficial ownership (as defined by Section
13(d) of the Securities Exchange Act of 1934, as amended) of the
Common Stock of the Company to exceed 9.9% of its total issued and
outstanding Common Stock or voting shares. Any common shares
exercised under this Warrant need to be delivered to the Warrant
Holder within three (3) business days of the receipt of Exercise
Notice.
6.
Common Share Issuance.
Upon
receipt by the Company of a written request from Warrant Holder to
exercise any portion of any Warrant, subject to any limitations on
exercise contained in any Warrant, the Company shall have three (3)
business days (“Delivery Date”) to issue the shares of
Common Stock rightfully listed in such request. If the Company
fails to timely issue instructions to its transfer agent to issue
the shares or fails to deliver the shares through willful failure
or deliberate hindrance, the Company shall pay to Warrant Holder in
immediately available funds $500.00 per day past the Delivery Date
that the shares are actually issued. Any amounts due under this
Section shall be paid by the fifth (5th) day of the month following
the month in which they accrued. The Company agrees that the right
to exercise its Warrants is a valuable right to Warrant Holder and
a material consideration of it entering this Agreement. The parties
agree that it would be impracticable and extremely difficult to
ascertain the amount of actual damages caused by a failure of the
Company to timely deliver shares as required hereby. Therefore, the
parties agree that the foregoing liquidated damages provision
represents reasonable compensation for the loss which would be
incurred by the Warrant Holder due to any such breach. The parties
agree that this Section is not intended to in any way limit Warrant
Holder’s right to pursue other remedies, including actual
damages and/or equitable relief.
7.
Adjustment of Exercise Price and
Number of Shares
. The character of the shares of stock or
other securities at the time issuable upon exercise of this Warrant
and the Exercise Price therefor, are subject to adjustment upon the
occurrence of the following events:
a.
Adjustment for
Reorganization, Consolidation, Merger, Etc.
In case of any
consolidation or merger of the Company with or into any other
corporation, entity or person, or any other corporate
reorganization, in which the Company shall not be the continuing or
surviving entity of such consolidation, merger or reorganization
(any such transaction being hereinafter referred to as a
“
Reorganization
”), then,
in each case, the Holder of this Warrant, on exercise hereof at any
time after the consummation or effective date of such
Reorganization (the “
Effective Date
”), shall
receive, in lieu of the shares of stock or other securities at any
time issuable upon the exercise of the Warrant issuable on such
exercise prior to the Effective Date, the stock and other
securities and property (including cash) to which such Holder would
have been entitled upon the Effective Date if such holder had
exercised this Warrant immediately prior thereto (all subject to
further adjustment as provided in this Warrant). The Company shall
ensure that the surviving entity in any Reorganization specifically
assumes the Company’s obligations under this
Warrant.
b.
Exercise Price
Adjustment
. If at any time the Company grants, issues or
sells any Common Stock, options to purchase Common Stock,
securities convertible into Common Stock or rights relating to
Common Stock (the “Purchase Rights”) to any person,
entity, association, or other organization other than the Holder
and other than an Excluded Issuance, at a price per share less than
the Exercise Price, then the Exercise Price hereof shall be
proportionately reduced to match the price per share of the
Purchase Rights. For purposes of clarification, if the exercise
price of the Warrant Shares is $4.75, and if the Company sells
Common Stock at $3.00 per share at any time after the date hereof,
then the Exercise Price of Holder’s Warrant Shares would be
adjusted to $3.00. Notwithstanding, the Exercise Price may not
exceed $4.75 per share in any case.
Exercise Price Adjustment set forth in this
Paragraph 7(b) will expire on August 29, 2020 and thereafter be of
no force or effect
. “
Excluded Issuances
” means any
issuance or sale (or deemed issuance or sale in accordance with
Section 7(b) hereof) by the Company after the original issue date
of: (the “Original Issue Date”)(a) shares of Common
Stock issued upon the exercise of this Warrant, (b) shares of
Common Stock (as such number of shares is equitably adjusted for
subsequent stock splits, stock combinations, stock dividends and
recapitalizations) issued directly or upon the exercise of Options
or Options issued to directors, officers, employees, or consultants
of the Company in connection with their service as directors of the
Company, their employment by the Company or their retention as
consultants by the Company, in each case authorized by the Board of
Directors and issued in accordance with the Stock Plan as in effect
on the Original Issue Date, a copy of which has been delivered to
Holder, (c) shares of Common Stock issued upon the exercise of
warrants, preferred stock outstanding on the Original Issue Date,
(d) securities issued in lieu of cash pursuant to merger,
consolidation, acquisition or strategic transactions approved by a
majority of the disinterested directors of the Company but shall
not include a transaction in which the Company is issuing
securities primarily for the purpose of raising capital or to an
entity whose primary business is investing in securities and/or
being issued to affiliates, employees and/or related persons of the
Company and/or any of its affiliates, (e) securities issued
pursuant to any equipment loan or leasing arrangement, real
property leasing arrangement or debt financing having such terms
and on such terms and conditions and from a bank or similar
financial institution chartered by the Office of the Comptroller of
the Currency,
Federal Deposit
Insurance Corporation
,
Federal Reserve
Board
or
National Credit Union
Administration
, all as approved by a majority of the
disinterested directors of the Company, (f) securities to an entity
as a component of any business relationship with such entity
primarily for the purpose of a joint venture or licensing activity
or another arrangement involving a corporate partner primarily for
purposes other than raising capital, but shall not include a
transaction in which the Company is issuing securities primarily
for the purpose of raising capital or to an entity whose primary
business is investing in securities and/or being issued to
affiliates, employees and/or related persons of the Company and/or
any of its affiliates, and (g) issuance of securities pursuant to a
stock dividend or stock split.
c.
True-up
Adjustments
. In the event that the average of the 15 lowest
closing prices for the Company’s common stock on NASDAQ or
other primary trading market for the Company’s common stock
(the average of such lowest closing prices being herein referred
to, the “True-up Price”) during the period beginning on
the Issue Date and ending on the date 90 days from the effective
date of the “Registration Statement,” as defined in the
Securities Purchase Agreement, then the Exercise Price will be
reduced to equal the greater of the True-up Price or
$3.00.
d.
Adjustments
for Stock Dividends; Combinations, Etc
. In case the Company
shall do any of the following (an
“Event”):
(i)
declare a dividend
or other distribution on its Common Stock payable in Common Stock
of the Company,
(ii)
subdivide
the outstanding Common Stock pursuant to a stock split or
otherwise, or
(iii)
reclassify
its Common Stock,
then
the number of shares of Common Stock or other securities at the
time issuable upon exercise of this Warrant shall be appropriately
adjusted to reflect any such Event; however, there shall be no
adjustment to the Exercise Price or issuable Warrant Shares in the
event of a reverse stock split or other reduction in the authorized
Common Stock of the Company.
e.
Certificate
as to Adjustments
. In case of any adjustment or readjustment
in the price or kind of securities issuable on the exercise of this
Warrant, the Company will promptly give written notice thereof to
the holder of this Warrant in the form of a certificate, certified
and confirmed by the Board of Directors of the Company, setting
forth such adjustment or readjustment and showing in reasonable
detail the facts upon which such adjustment or readjustment is
based.
8.
Registration Rights
. This
Warrant will have registration rights pursuant to the Registration
Rights Agreement between the Company and Holder. To the extent that
there is a conflict between any condition, term or provision of
this Warrant and the Registration Rights Agreement, the conditions,
terms, and provisions set forth in the Registration Rights
Agreement shall specifically supersede the conflicting conditions,
provisions and/or terms in this Warrant.
9.
Fractional Shares
. The Company
shall not be required to issue or cause to be issued fractional
Warrant Shares on the exercise of this Warrant. The number of full
Warrant Shares that shall be issuable upon the exercise of this
Warrant shall be computed on the basis of the aggregate number of
Warrants Shares purchasable on exercise of this Warrant so
presented. If any fraction of a Warrant Share would, except for the
provisions of this Section 9, be issuable on the exercise of this
Warrant, the Company shall, at its option, (i) pay an amount in
cash equal to the Exercise Price multiplied by such fraction or
(ii) round the number of Warrant Shares issuable, up to the next
whole number.
10.
Notice
. All notices and other
communications hereunder shall be in writing and shall be deemed to
have been given (i) on the date they are (a) delivered if delivered
in person or (b) sent, if sent by email; (ii) on the date initially
received if delivered by facsimile transmission followed by
registered or certified mail confirmation; (iii) on the date
delivered by an overnight courier service; or (iv) on the third
business day after it is mailed by registered or certified mail,
return receipt requested with postage and other fees prepaid as
follows:
If to
the Company:
Youngevity
International, Inc.
2400
Boswell Road
Chula
Vista, CA 91914
Attn:
Stephan Wallach
If to
the Warrant Holder:
a. This
Warrant is being granted pursuant to the Purchase Agreement. To the
extent that there is a conflict between any condition, term or
provision of this Warrant and the Purchase Agreement, the
conditions, terms, and provisions set forth herein shall
specifically supersede the conflicting conditions, provisions
and/or terms in the Purchase Agreement.
b. This
Warrant shall be binding on and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. This
Warrant may be amended only in writing and signed by the Company
and the Warrant Holder. Warrant Holder may assign this Warrant
without consent from the Company but in accordance with the
restrictions herein.
c.
Nothing in this Warrant shall be construed to give to any person or
corporation other than the Company and the Warrant Holder any legal
or equitable right, remedy or cause of action under this Warrant;
this Warrant shall be for the sole and exclusive benefit of the
Company and the Warrant Holder.
d. This
Warrant shall be governed by and construed in accordance with the
laws of the State of Florida, without regard to conflict of laws
provisions. All disputes arising out of or in connection with this
Warrant, or in respect of any legal relationship associated with or
derived from this Warrant, shall only be heard in any competent
court residing in Broward County, Florida. The Company agrees 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 manner provided by law. The Company further
waives any objection to venue in any such action or proceeding on
the basis of inconvenient forum. The Company agrees that any action
on or proceeding brought against the Warrant Holder shall only be
brought in such courts.
e. In
the event the Warrant Holder hereof shall refer this Warrant
Agreement to an attorney to enforce the terms hereof, the Company
agrees to pay all the costs and expenses incurred in attempting or
effecting the enforcement of the Warrant Holder's rights, including
reasonable attorney's fees, if a suit is instituted and Warrant
Holder is the prevailing party.
f. The
headings herein are for convenience only, do not constitute a part
of this Warrant and shall not be deemed to limit or affect any of
the provisions hereof.
g. In
case any one or more of the provisions of this Warrant shall be
invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this
Warrant shall not in any way be affected or impaired thereby and
the parties will attempt in good faith to agree upon a valid and
enforceable provision which shall be a commercially reasonably
substitute therefore, and upon so agreeing, shall incorporate such
substitute provision in this Warrant.
h. The
Warrant Holder shall not, by virtue hereof, be entitled to any
voting or other rights of a shareholder of the Company, either at
law or equity, and the rights of the Warrant Holder are limited to
those expressed in this Warrant.
IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by the authorized officer as of the date first above
stated.
Youngevity
International, Inc.
Name:
Stephan Wallach
Title:
Chief Executive Officer
FORM OF ELECTION TO PURCHASE
(To be
executed by the Warrant Holder to exercise the right to purchase
shares of Common Stock under the foregoing Warrant)
To:
Youngevity International,
Inc.
The
undersigned, pursuant to the provisions set forth in the attached
Warrant, hereby irrevocably elects to purchase (check applicable
box):
☐
________ shares of
the Common Stock covered by such Warrant; or
☐
t
he
maximum
number of shares of Common Stock covered by such Warrant pursuant
to the cashless exercise procedure set forth therein.
The undersigned
herewith makes payment of the full purchase price for such shares
at the price per share provided for in such Warrant, which is
$___________. Such payment takes the form of (check applicable box
or boxes):
☐
$__________ in
lawful money of the United States; and/or
☐
the
cancellation of
such portion of the attached Warrant as is exercisable for a total
of _______ shares of Common Stock (using a Fair Market Value of
$_______ per share for purposes of this calculation);
and/or
☐
the
cancellation of
such number of shares of Common Stock as is necessary, in
accordance with the formula set forth in Section 5 of the Warrant,
to exercise this Warrant with respect to the maximum number of
shares of Common Stock purchasable pursuant to the cashless
exercise procedure set forth in Section 5.
After
application of the cashless exercise feature as described above,
_____________ shares of Common Stock are required to be delivered
pursuant to the instructions below.
The
undersigned represents and warrants that all offers and sales by
the undersigned of the securities issuable upon exercise of the
within Warrant shall be made pursuant to registration of the Common
Stock under the Securities Act of 1933, as amended (the
“Securities Act”), or pursuant to an exemption from
registration under the Securities Act.
|
|
|
Name of
Warrant Holder:
(Print)__________________________________
(By:)___________________________________
(Name:)_________________________________
(Title:)__________________________________
Signatures
must conform in all respects to the name of the Warrant Holder on
the face of the Warrant.
|
Exhibit 10.1
SECURITIES PURCHASE AGREEMENT
This
Securities Purchase Agreement (“Agreement”) is made and
entered into in this ___ day of ______2018 (“Effective
Date”), by and between Youngevity International, Inc., a
Delaware corporation, its successors and assigns (the
“Company”), and _________
(“Investor”).
RECITALS
WHEREAS, the
Company is in need of capital and is seeking to raise up to
$3,000,000 in a limited private offering
of
common stock of the Company, par value
$0.001 per share (the “Common Stock”), to certain
existing shareholders of the Company (the “Offering”);
and
WHEREAS, Investor
has agreed to purchase securities of the Company for
______
(all
securities to be purchased hereunder, including the Purchased
Shares, Warrants, Warrant Shares, Advisory Shares and True-Up
Shares, being referred to herein as, “Securities”),
subject to the terms and conditions hereof.
AGREEMENT
NOW,
THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the
sufficiency of which is acknowledged by Investor and Company (each
“party” and, collectively, “parties”), the
parties hereby agree as follows:
1.
PURCHASE AND SALE
OF SECURITIES
. Upon the terms and subject to the conditions
set forth in this Agreement, and in reliance on the representations
and warranties of the Investor and Company contained herein, the
Company agrees to sell to the Investor, and the Investor agrees to
purchase from the Company, ____ shares of the Company’s
Common Stock (the “Purchased Shares”), free and clear
of any and all liens, claims, options, charges, pledges, security
interests, deeds of trust, voting agreements, shareholder
agreements, voting trusts, encumbrances, or rights, for $4.75 per
share (“Purchase Price”) or $______ total. The Shares
will be purchased in two equal tranches of ______ Shares for $_____
each, according to the terms hereof. The closing of the first
tranche (“First Closing”) will occur within three days
from the Effective Date; the closing of the second tranche
(“Second Closing”) will occur within three days from
the effectiveness of the Company’s Registration Statement
(defined below) with the United States Securities Exchange
Commission (“SEC”). Investor’s obligation, to
purchase the second tranche of Shares pursuant to the terms of this
Agreement at the Second Closing is irrevocable.
2.
WARRANTS
.
Upon the First Closing, the Company shall issue to Investor a
warrant, substantially in the form attached hereto as Exhibit A
(the “Warrant”), to purchase _____ shares of the
Company’s common stock (the “Warrant Shares”) at
an exercise price of $4.75 per share, adjusted to the True-up Price
(defined below) in accordance with the terms of the Warrant. The
Warrant shall be exercisable for a period of three years from the
grant date and include a cashless exercise feature and
ant-dilution, full ratchet terms for two years.
3.
ADVISORY
FEE
.
The Company
agrees to issue Investor _____ shares of its common stock as an
advisory fee (the “Advisory Shares”); payable in equal
tranches of _____ shares upon both the First Closing and the Second
Closing.
4.
TRUE-UP
SHARES
.
In the
event that the average of the 15 lowest closing prices for the
Company’s common stock on NASDAQ or other primary trading
market for the Company’s common stock (the average of such
lowest closing prices being herein referred to, the “True-up
Price”) during the period beginning on the Effective Date and
ending on the date 90 days from the effective date of the
Registration Statement (the “Subsequent Pricing
Period”) is less than $4.75 per share, then the Company will
issue the Investor additional shares of the Company’s common
stock (the “True-up Shares”) within three days from the
expiration of the Subsequent Pricing Period, according to the
following formula: X= [$_______- (A*B)]/B, where:
X=
number of True-up Shares to be issued
A= the
number of Purchased Shares acquired by Investor
B= the
True-up Price
Notwithstanding the foregoing, in no event may the total number of
shares issued under this Agreement, including the Purchased Shares,
Warrant Shares, Advisory Shares and True-up Shares issued by the
Company exceed ___%
(1)
of the
Company’s issued and outstanding common stock as of the
Effective Date, as listed below in Section 9(k).
5.
ALLOWANCE FOR LEGAL
FEE
.
A $____
allowance for Investor’s legal fees shall be paid by the
Company and deducted from Investor’s first $_____
payment.
6.
PAYMENT
TERMS
.
a. The
Investor will pay the Company the Purchase Price of $_____
($____-$_____) upon the First Closing.
b. The
Investor will pay the Company the Purchase Price of $_______ upon
the Second Closing.
7.
REGISTRATION
RIGHTS
. The Company shall prepare and file with the SEC a
registration statement on Form S-3 or S-1 (the “Registration
Statement”) to cover Investor’s resale of the Purchased
Shares, Warrant Shares, Advisory Shares and True-up Shares pursuant
to the Registration Rights Agreement in Exhibit B hereto
(“Registration Rights Agreement”). Investor
acknowledges and agrees that the rights afforded to investors in
the Offering who are a party to the Registration Rights Agreement
shall be applied in all cases on a
pro rata
basis among
the investors in the Offering, including, without limitation, the
Investor.
8.
CLOSING
.
The
Company will deliver to Investor the following on or before the
First Closing:
a.
this Agreement
executed by the Company;
b.
the Warrants duly
executed and issued by the Company;
c.
certificate(s)
representing the first tranche of Advisory Shares and Purchased
Shares;
d.
a duly executed
copy of the Registration Rights Agreement;
e.
confirmation of an
effective irrevocable letter agreement with the Company’s
transfer agent, in the form included herewith as Exhibit C (the
“Letter Agreement”), directing the transfer to reserve
and issue to Investor Securities pursuant to the terms of this
Agreement; and
f.
an
officer’s certificate certifying that the Company’s
representations in Section 9 are true and correct.
1.
Calculated based on 2.9% for every $1,000,000
invested.
Investor will
deliver to the Company the following on or before the First
Closing:
a. this
Agreement executed by the Investor;
b. a
duly executed copy of the Registration Rights
Agreement;
c. the
Purchase Price for the first tranche of Purchased
Shares.
The
Company will deliver to Investor the following on or before the
Second Closing:
a. certificate(s)
representing the second tranche of Advisory Shares and Purchased
Shares; and
b.
an officer’s certificate certifying that the Company’s
representations in Section 9 are true and correct.
Investor will
deliver to the Company the following on or before the Second
Closing:
a. the
Purchase Price for the second tranche of Purchased
Shares.
9.
REPRESENTATIONS AND
WARRANTIES BY THE COMPANY
. In order to induce Investor to
enter into this Agreement and to purchase the Securities provided
for herein, Company represents and warrants to Investor as follows,
which representations and warranties shall also be true and correct
as of the First Closing and Second Closing:
a.
Organization,
Good Standing and Power.
The Company is a corporation duly
incorporated, validly existing and in good standing under the laws
of the State of Delaware and has the requisite corporate power to
own, lease and operate its properties and assets and to conduct its
business as it is now being conducted.
b.
Non-Shell
Status.
The Company is not now nor has ever been a
“shell company” as that term is defined in Rule 405 of
the Securities Act.
c.
Authorization;
Enforcement.
The Company has the requisite corporate power
and authority to enter into and perform this Agreement, the
Warrant, the Registration Rights Agreement and the Letter Agreement
(all such documents together with all amendments, schedules,
exhibits, annexes, supplements and related items, to each such
document shall hereinafter be collectively referred to as, the
“Transaction Documents”). The execution, delivery and
performance of the Transaction Documents by the Company, and the
consummation by it of the transactions contemplated in, have been
duly and validly authorized by all necessary corporate action. The
Transaction Documents, when executed and delivered, will constitute
valid and binding obligations of the Company enforceable against
the Company in accordance with their terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship,
receivership or similar laws relating to, or affecting generally
the enforcement of, creditor's rights and remedies or by other
equitable principles of general application.
d.
Disclosure.
None of the Transaction Documents nor any other document,
certificate or instrument furnished to the Investor by or on behalf
of the Company in connection with the transactions contemplated by
the Transaction Documents contains any untrue statement of a
material fact or omits to state a material fact necessary in order
to make the statements made herein or therein, in the light of the
circumstances under which they were made herein or therein, not
misleading.
e.
Adequate
Shares.
The Company will at all times have authorized and
reserved a sufficient number of shares of Common Stock to provide
for the exercise of the rights represented by this Agreement and
the respective Warrants Agreement. The initial reserve will be set
at 543,859 shares of common stock. Additional reserves shall be
reserved according to the Letter Agreement with the Company’s
transfer agent.
f.
Periodic
Filings.
The Company at all times will remain current in its
reporting requirements with the SEC under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) including
maintaining XBRL financial information on the Company’s
corporate website. All information contained in the Company’s
period filings with the SEC is true and correct to the best of the
Company’s knowledge.
g.
Valid
Issuance
. All Securities to be issued pursuant to this
Agreement, when issued, shall be duly and validly issued, fully
paid, and nonassessable, and will be transferred free of liens,
encumbrances and restrictions on transfer other than
(a) restrictions on transfer under this Agreement and under
applicable state and federal securities laws, and
(b) restrictions on transfer under the Company’s
governing documents.
h.
Legal
Proceedings
. There is no action, suit, proceeding,
arbitration, claim, investigation or inquiry pending or, to the
Company’s knowledge, threatened by or before any governmental
body against the Company which, individually or in the aggregate,
would reasonably be expected to have a material adverse effect on
the Company, nor are there any orders, writs, injunctions,
judgments or decrees outstanding of any court or government agency
or instrumentality and binding upon the Company or its affiliates
that would reasonably be expected to have a similar material
adverse effect on the Company or its operations.
i.
No
Conflicts
. Neither the execution and delivery of this
Agreement nor the fulfillment of or compliance with the terms and
provisions hereof, nor the issuance of the Securities, will
conflict with, or result in a breach or violation of any of the
terms, conditions or provisions of, or constitute a default under,
any contract, agreement, mortgage, indenture, lease, instrument,
order, judgment, statute, law, rule or regulation to which the
Company is subject.
j.
Non-public
Information
. The Company has not disclosed, and will not
disclose while Investor owns any Securities, to Investor any
material, non-public information of the Company.
k.
Capitalization
.
The Company currently has 50,000,000 common and 5,000,000 preferred
shares of stock authorized; and 21,561,217 common shares and
545,522 preferred shares (161,135 Series A Preferred, 315,967
Series B Preferred and 68,420 Series C Preferred) are issued and
outstanding as of the date hereof. All of such outstanding shares
of capital stock are, or upon issuance will be, duly authorized,
validly issued, fully paid and non-assessable. No shares of capital
stock of the Company are subject to preemptive rights or any other
similar rights of the shareholders of the Company or any liens or
encumbrances imposed through the actions or failure to act of the
Company. As of the effective date of this Agreement, except as
disclosed to Investor by the Company in Schedule 9(k)(i), there are
no outstanding options, warrants, scrip, rights to subscribe for,
puts, calls, rights of first refusal, agreements, understandings,
claims or other commitments or rights of any character whatsoever
relating to, or securities or rights convertible into or
exchangeable for any shares of capital stock of the Company or any
of its Subsidiaries, or arrangements by which the Company or any of
its Subsidiaries is or may become bound to issue additional shares
of capital stock of the Company or any of its Subsidiaries, (ii)
there are no agreements or arrangements under which the Company or
any of its Subsidiaries is obligated to register the sale of any of
its or their securities under the 1933 Act, and (iii) there are no
anti-dilution or price adjustment provisions contained in any
security issued by the Company (or in any agreement providing
rights to security holders) that will be triggered by the issuance
of the Securities. The Company has provided Investor with true and
correct copies of the Company’s Certificate of Incorporation
as in effect on the date hereof (“Certificate of
Incorporation”) and the Company’s By-laws, as in effect
on the date hereof (the “By-laws”).
l.
Acknowledgment of
Dilution
. The Company understands and acknowledges the
potentially dilutive effect to its common stock upon the issuance
of the True-up Shares and Warrant Shares. The Company further
acknowledges that its obligation to issue True-up Shares and
Warrant Shares in accordance with this Agreement, is absolute and
unconditional regardless of the dilutive effect that such issuance
may have on the ownership interests of other shareholders of the
Company.
m.
Absence of Certain
Changes
. Since its last periodic report filed with the SEC,
there has been no material adverse change and no material adverse
development in the assets, liabilities, business, properties,
operations, financial condition, results of operations or prospects
of the Company or any of its subsidiaries.
n.
Patents, Copyrights,
etc
. The Company and each of its subsidiaries owns or
possesses the requisite licenses or rights to use all patents,
patent applications, patent rights, inventions, know-how, trade
secrets, trademarks, trademark applications, service marks, service
names, trade names and copyrights (“Intellectual
Property”) necessary to enable it to conduct its business as
now operated (and, as presently contemplated to be operated in the
future). There is no claim or action by any person pertaining to,
or proceeding pending, or to the Company’s knowledge
threatened, which challenges the right of the Company or of a
Subsidiary with respect to any Intellectual Property necessary to
enable it to conduct its business as now operated (and, as
presently contemplated to be operated in the future); to the best
of the Company’s knowledge, the Company’s or its
subsidiaries’ current and intended products, services and
processes do not infringe on any Intellectual Property or other
rights held by any person; and the Company is unaware of any facts
or circumstances which might give rise to any of the foregoing. The
Company and each of its subsidiaries have taken reasonable security
measures to protect the secrecy, confidentiality and value of their
Intellectual Property.
o.
Tax Status
. The
Company and each of its subsidiaries has made or filed all federal,
state and foreign income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject
(unless and only to the extent that the Company and each of its
Subsidiaries has set aside on its books provisions reasonably
adequate for the payment of all unpaid and unreported taxes) and
has paid all taxes and other governmental assessments and charges
that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in
good faith and has set aside on its books provisions reasonably
adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There
are no unpaid taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim. The Company has not
executed a waiver with respect to the statute of limitations
relating to the assessment or collection of any foreign, federal,
state or local tax. None of the Company’s tax returns is
presently being audited by any taxing authority.
p.
No Brokers
. The
Company hereby represents and warrants that it has not hired,
retained or dealt with any broker, finder, consultant, person, firm
or corporation in connection with the negotiation, execution or
delivery of this Agreement or the transactions contemplated
hereunder.
q.
Permits;
Compliance
. The Company and each of its subsidiaries is in
possession of all franchises, grants, authorizations, licenses,
permits, easements, variances, exemptions, consents, certificates,
approvals and orders necessary to own, lease and operate its
properties and to carry on its business as it is now being
conducted (collectively, the “Company Permits”), and
there is no action pending or, to the knowledge of the Company,
threatened regarding suspension or cancellation of any of the
Company Permits. Neither the Company nor any of its Subsidiaries is
in conflict with, or in default or violation of, any of the Company
Permits, except for any such conflicts, defaults or violations
which, individually or in the aggregate, would not reasonably be
expected to have a material adverse effect on the
Company.
r.
Title to Property
.
The Company and its subsidiaries have good and marketable title in
fee simple to all real property and good and marketable title to
all personal property owned by them which is material to the
business of the Company and its subsidiaries, in each case free and
clear of all liens, encumbrances and defects. Any real property and
facilities held under lease by the Company and its subsidiaries are
held by them under valid, subsisting and enforceable
leases.
s.
Internal Accounting
Controls
. The Company and each of its subsidiaries maintain
a system of internal accounting controls sufficient, in the
judgment of the Company’s board of directors, to provide
reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in
accordance with management’s general or specific
authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any
differences.
t.
Foreign Corrupt
Practices
. Neither the Company, nor any of its subsidiaries,
nor any director, officer, agent, employee or other person acting
on behalf of the Company or any Subsidiary has, in the course of
his actions for, or on behalf of, the Company, used any corporate
funds for any unlawful contribution, gift, entertainment or other
unlawful expenses relating to political activity; made any direct
or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; violated or is in
violation of any provision of the U.S. Foreign Corrupt Practices
Act of 1977, as amended, or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment to any
foreign or domestic government official or employee.
u.
Insurance
. The
Company and each of its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be
prudent and customary in the businesses in which the Company and
its Subsidiaries are engaged. Neither the Company nor any such
subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business at a cost that would not have
a material adverse effect on the Company. Upon written request the
Company will provide to the Investor true and correct copies of all
policies relating to directors’ and officers’ liability
coverage, errors and omissions coverage, and commercial general
liability coverage.
v.
Use
of Proceeds
. The Company covenants and warrants that it will
use the Purchase Price received from Investor as working capital
and as collateral to hedge its coffee inventory
acquisitions.
10.
REPRESENTATIONS AND
WARRANTIES BY INVESTOR
. Investor, by its acceptance of this
Agreement, represents and warrants to Company as
follows:
a.
Investor
is acquiring the Securities for its own account and not with a view
towards distribution.
b.
Investor
is an “accredited investor” within the definition
contained in Rule 501(a) under the Securities Act of 1933, as
amended (the “Securities Act”). Investor has adequate
net worth and means of providing for its current needs and
contingencies and is able to sustain a complete loss of the
investment in the Securities purchase, and has no need for
liquidity in such investment. Investor, itself or through its
officers, employees or agents, has sufficient knowledge and
experience in financial and business matters to be capable of
evaluating the merits and risks of an investment such as an
investment in the Securities, and Investor, either alone or through
its officers, employees or agents, has evaluated the merits and
risks of the investment in the Securities.
c.
Investor
acknowledges and agrees that it is purchasing the Securities
hereunder based upon its own inspection, examination and
determination with respect thereto as to all matters, and without
reliance upon any express or implied representations or warranties
of any nature, whether in writing, orally or otherwise, made by or
on behalf of or imputed to the Company.
d.
Investor has no
contract, arrangement or understanding with any broker, finder,
investment bank, financial intermediary or similar agent with
respect to any of the transactions contemplated by this
Agreement.
e.
Authorization
. This Agreement
has been duly and validly authorized. This Agreement has been duly
executed and delivered on behalf of the Investor, and this
Agreement constitutes a valid and binding agreement of the Investor
enforceable in accordance with its terms.
f.
Organization, Good Standing and
Power
. The Investor is a corporation duly incorporated,
validly existing and in good standing under the laws of the State
of Florida and has the requisite corporate power to own, lease and
operate its properties and assets and to conduct its business as it
is now being conducted.
g.
No Conflicts
. Neither the
execution and delivery of this Agreement nor the fulfillment of or
compliance with the terms and provisions hereof, nor the purchase
of the Securities, will conflict with, or result in a breach or
violation of any of the terms, conditions or provisions of, or
constitute a default under, any contract, agreement, mortgage,
indenture, lease, instrument, order, judgment, statute, law, rule
or regulation to which the Investor is subject.
11.
LIQUIDATED
DAMAGES
.
a.
If (i) the
Registration Statement is not filed with the SEC on or prior to the
date 45 days from the Effective Date, (ii) the Registration
Statement has not been declared effective by the SEC on or prior to
the date 75 days from the Effective Date, or (iii) any
registration statement required by this Agreement is filed and
declared effective by the Commission but shall thereafter cease to
be effective or fail to be usable for its intended purpose (each
such event referred to as a “Registration Default”),
the Company hereby agrees to pay liquidated damages
(“Liquidated Damages”) to Investor in an amount equal
to 1% of the Purchase Price per month, which Liquidated Damages
shall be increased to 5% of the Purchase Price per month if the
Registration Statement is not effective within 150 days from the
Effective Date. Following the cure of all Registration
Defaults relating to any particular registrable Securities,
Liquidated Damages shall cease to
accrue; provided, however, that, if after Liquidated
Damages have ceased to accrue, a different Registration Default
occurs, Liquidated Damages shall again accrue pursuant to the
foregoing provisions. Any amounts due under this Section shall be
paid by the fifth (5
th
) day of the month
following the month in which they accrued.
b.
If the Company
fails to deliver any Securities due Investor hereunder on the date
dictated by this Agreement (each a, “Delivery Date”),
the Company shall pay to Investor in immediately available funds
$500.00 per day past the Delivery Date that the Securities are
actually issued. Any amounts due under this Section shall be paid
by the fifth (5
th
) day of the month
following the month in which they accrued. The Company agrees that
the right to receive Securities is a valuable right to Investor and
a material consideration of it entering this Agreement. The parties
agree that it would be impracticable and extremely difficult to
ascertain the amount of actual damages caused by a failure of the
Company to timely deliver shares as required hereby. Therefore, the
parties agree that the foregoing liquidated damages provision
represents reasonable compensation for the loss which would be
incurred by the Investor due to any such breach. The parties agree
that this Section is not intended to in any way limit
Investor’s right to pursue other remedies, including actual
damages and/or equitable relief.
c.
The Company and
Investor hereto acknowledge and agree that the sums payable as
Liquidated Damages under subsection 11(a) and 11(b) above shall
constitute liquidated damages and not penalties and are in addition
to all other rights of the Holders, including the right to call a
default under the Securities Purchase Agreement. The
parties further acknowledge that (i) the amount of loss or damages
likely to be incurred is incapable or is difficult to precisely
estimate, (ii) the amounts specified in such subsections bear a
reasonable relationship to, and are not plainly or grossly
disproportionate to, the probable loss likely to be incurred in
connection with any failure by the Company to obtain or maintain
the effectiveness of a registration statement, (iii) one of the
reasons for the Company and the Investor reaching an agreement as
to such amounts was the uncertainty and cost of litigation
regarding the question of actual damages, and (iv) the Company and
the Investor are sophisticated business parties and have been
represented by sophisticated and able legal counsel and negotiated
this Agreement at arm’s length.
12.
EVENTS OF
DEFAULT
. An event of default will occur if any of the
following circumstances occur (each an “Event of
Default”):
a.
Any representation
or warranty made by Company in this Agreement or in connection with
any Transaction Documents, or in any financial statement, or any
other statement furnished by Company to Investor is untrue in any
material respect at the time when made or becomes
untrue.
b.
Default by Company
in the observance or performance of any other material covenant or
agreement contained in this Agreement or Transaction
Documents.
c.
Filing by Company
of a voluntary petition in bankruptcy seeking reorganization,
arrangement or readjustment of debts, or any other relief under the
Bankruptcy Code as amended or under any other insolvency act or
law, state or federal, now or hereafter existing.
d.
Filing of an
involuntary petition against Company in bankruptcy seeking
reorganization, arrangement or readjustment of debts, or any other
relief under the Bankruptcy Code as amended, or under any other
insolvency act or law, state or federal, now or hereafter existing,
and the continuance thereof for sixty (60) days undismissed,
unbonded or undischarged.
e.
Company liquidates,
transfers, sells or assigns substantially its assets or elects to
wind down its operations or dissolve.
f.
The Company fails
to stay current in its SEC reporting obligations, including
maintaining XBRL financial information on the Company’s
corporate website.
g.
The Company fails
to maintain irrevocable TA instruction on file with the
Company’s transfer agent.
h.
The Company fails
to deliver the Investor the Securities by the Delivery
Date.
13.
REMEDIES
.
(i) There will be no cure period available for the Event of Default
as defined in Section 12(c) and 12(d); (ii) upon the occurrence of
an Event of Default as defined above, and provided such Event of
Default as defined in Section 12(a) and 12(b), and Section 12(e)
through 12(h), has not been cured by the Company within three (3)
business days after the occurrence of such Event of Default
Investor shall have all of the rights
and remedies provided by applicable law and equity.
To the
extent permitted by law, Company waives any rights to presentment,
demand, protest, or notice of any kind in connection with this
Agreement, and/or any Warrants. No failure or delay on the part of
Investor in exercising any right, power, or privilege hereunder or
thereunder will preclude any other or further exercise thereof or
the exercise of any other right, power, or privilege. The rights
and remedies provided herein are cumulative and not exclusive of
any other rights or remedies provided at law or in equity. In the
event Investor shall refer this Agreement and/or the Warrants
Agreement to an attorney to enforce the terms hereof, the Company
agrees to pay all the costs and expenses incurred in attempting or
effecting the enforcement of the Investor’s rights, including
reasonable attorney's fees, whether or not suit is
instituted.
14.
NOTICE
. Any
and all notices, demands, advance requests or other communications
required or desired to be given hereunder by any party shall be in
writing and shall be validly given or made to another party if (i)
personally served, (ii) sent by email on the date such email is
sent (provided confirmation of such email being sent is provided
upon request) (iii) deposited in the United States mail, postage
prepaid, return receipt requested, or (iv) by facsimile with
confirmation receipt. Notice hereunder is to be given as
follows:
If to
the Company:
Youngevity
International, Inc.
2400
Boswell Road
Chula
Vista, CA 91914
Attn:
Stephan Wallach
with a
copy to:
Gracin
& Marlow, LLP
The
Chrysler Building
405
Lexington Avenue, 26th Floor
New
York, New York 10174
Attn:
Leslie Marlow, Esq.
If to
the Investor:
with a
copy to:
15.
GENERAL
PROVISIONS
. All representations and warranties made in the
Transaction Documents shall survive the execution and delivery of
this Agreement and the acquisition of Securities for a period of
two years. This Agreement will be binding upon and inure to the
benefit of Company and Investor, their respective successors and
assigns.
16.
ENTIRE
AGREEMENT
. The Transaction Documents contain the entire
agreement of the parties and supersede and replace all prior
discussions, negotiations and representations of the parties. No
party shall rely upon any oral representations in entering into
this Agreement, such oral representations, if any, being expressly
denied by the party to whom they are attributed and it being the
intention of the parties to limit the terms of this Agreement to
those matters contained herein in writing.
17.
BINDING
EFFECT
. This Agreement is binding upon and inures to the
benefit of the parties hereto, their heirs, personal
representatives, successors and assigns. Investor may assign its
rights hereunder without prior permission from the
Company.
18.
GOVERNING LAW AND
CONSENT TO JURISDICTION.
This Agreement shall be governed by
and construed in accordance with the laws of the State of Florida,
without regard to conflict of law provisions. All disputes arising
out of or in connection with this Agreement, or in respect of any
legal relationship associated with or derived from this Agreement,
shall only be heard in any competent court residing in Broward
County, Florida. The Company agrees 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 manner
provided by law. The Company further waives any objection to venue
in any such action or proceeding on the basis of inconvenient
forum. The Company agrees that any action on or proceeding brought
against the Investor shall only be brought in such
courts.
19.
ATTORNEYS
FEES.
In the event the Investor hereof shall refer the
Transaction Agreements to an attorney to enforce the terms thereof,
the Company agrees to pay all the costs and expenses incurred in
attempting or effecting the enforcement of the Investor's rights,
including reasonable attorney's fees, if a suit is instituted and
Investor is the prevailing party.
20.
AMENDMENT
.
The terms of this Agreement may not be amended, modified, or
eliminated without written consent of the parties.
21.
SEVERABILITY
.
Every provision of this Agreement is intended to be severable. If
any term or provision thereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the
validity or legality of the remainder of this
Agreement.
22.
CONSTRUCTION
.
Section and paragraph headings are for convenience only and do not
affect the meaning or interpretation of this Agreement. No rule of
construction or interpretation that disfavors the party drafting
this Agreement or any of its provisions will apply to the
interpretation of this Agreement. Instead, this Agreement will be
interpreted according to the fair meaning of its
terms.
23.
FURTHER
ASSURANCES
. Each party hereto agrees to do all things,
including execute, acknowledge and/or deliver any documents which
may be reasonably necessary, appropriate or desirable to effectuate
the transactions contemplated herein pursuant to terms and
conditions of this Agreement.
24.
COUNTERPARTS
.
The parties agree that this Agreement
may be executed in one or more counterparts, each of which shall be
an original, and all of which, taken together, shall constitute one
and the same instrument. The parties further agree that this
Agreement may be executed by telecopy or fax of the signature page,
which countersigned faxed signature will for all purposes be deemed
an execution.
IN
WITNESS WHEREOF, the parties hereto enter into this Securities
Agreement which is effective as of the date first above
written.
|
COMPANY:
Youngevity
International, Inc.
By:
___________________________________
Name:
Stephan Wallach
Title:
Chief Executive Officer
|
INVESTOR:
By:
Name:
Title:
|
EXHIBIT A
WARRANT
FORM
EXHIBIT B
REGISTRATION
RIGHTS AGREEMENT
EXHIBIT C
TRANSFER
AGENT LETTER AGREEMENT
Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
This
Registration Rights Agreement (this “Agreement”) is
made and entered into as of _________________ (“Effective
Date”), by and among Youngevity International, Inc., a
Delaware corporation, its successors and assigns (the
“Company”), and _______________(the
“Investor”).
R E C I T A L S
WHEREAS, Investor
and the Company have entered into a Securities Purchase Agreement
(the “Agreement”), dated ________, pursuant to which
Investor has agreed to purchase _____ shares of common stock of the
Company at a price of $4.75 per share in two tranches, or ______
shares for a payment of ______ each (“Purchased
Shares”);
WHEREAS, the
Company has agreed to issue Investor additional shares of common
stock (“True-up Shares”) of the Company in the event
that the average of the 15 lowest closing prices for the
Company’s common stock on NASDAQ or other primary trading
market for the Company’s common stock (the average of such
lowest closing prices being herein referred to, the “True-up
Price”) during the period beginning on the Effective Date and
ending on the date 90 days from the effective date of the
Registration Statement (the “Subsequent Pricing
Period”) is less than $4.75 per share;
WHEREAS, the
Company has agreed to issue Investor a banking advisory fee of
_____ shares of common stock of the Company upon each closed
tranche, or _____ shares in total (“Advisory
Shares”);
WHEREAS, the
Company has issued to the Investor a Warrant, _______8, exercisable
for ____ shares of common stock of the Company (“Warrant
Exercise Shares”);
WHEREAS, as a
material consideration for the Investor’s execution of the
Agreement, the Company has agreed to register Purchased Shares,
True-up Shares, Advisory Shares and Warrant Exercise Shares,
subject to the terms and conditions of this Agreement.
NOW,
THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the parties hereby agree as
follows:
1.
Certain
Definitions
.
In
addition to those terms defined within this Agreement, as used in
this Agreement, the following terms shall have the following
respective meanings:
“
Commission
”
means the Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act.
“
Exchange
Act
” means the Securities Exchange Act of 1934, as
amended, or any similar federal rule or statute and the rules and
regulations of the Commission thereunder, all as the same shall be
in effect at the time.
“
Holder
”
and “
Holders
” means
(i) the Investor and (ii) any person holding Registrable
Securities to whom the registration rights have been validly
transferred.
“
Registrable
Securities
” shall mean (i) the shares of the
Company’s common stock that are issuable pursuant to the
Securities Purchase Agreement; (ii) the True-up Shares; (iii)
the Advisory Shares, (iv) the Warrant Exercise Shares, and
(v) any common stock of the Company issued or issuable in
respect of the foregoing shares of the Company’s common stock
upon any stock split, stock dividend, recapitalization, or similar
event; provided, however, that securities shall only be treated as
Registrable Securities if and so long as they have not been
registered or sold to or through a broker or dealer or underwriter
in a public distribution or a public securities
transaction.
The
terms “
register
,”
“
registered
” and
“
registration
” refer to a
registration effected by preparing and filing a registration
statement in compliance with the Securities Act, and the
declaration or ordering of the effectiveness of such registration
statement by the Commission.
“
Registration
Expenses
” shall mean all expenses incurred by the
Company in complying with Section 2.1, including without
limitation, all registration, qualification and filing fees,
printing expenses, fees and disbursements of counsel for the
Company, blue sky fees and expenses, the expense of any special
audits incident to or required by any such registration (but
excluding the compensation of regular employees of the Company
which shall be paid in any event by the Company).
“
Rule
144
” and “
Rule 145
” shall mean
Rules 144 and 145, respectively, promulgated under the
Securities Act, or any similar federal rules thereunder, all as the
same shall be in effect at the time.
“
Securities
Act
” shall mean the Securities Act of 1933, as
amended, or any similar federal rule or statute and the rules and
regulations of the Commission thereunder, all as the same shall be
in effect at the time.
“
Selling
Expenses
” shall mean all underwriting discounts and
selling commissions applicable to the securities registered by the
Holders.
2.
Registration
2.1
Registration
Filing.
(a)
Filing for
Registrable Securities
. The Company shall file with the
Commission, within forty five (45) days from the date of this
Agreement, a registration statement on Form S-3 or S-1 for the
resale of all of the Registrable Securities (“Registration
Statement”). The Registration Statement will include 618,860
Registrable Securities for resale by Holder (subject to Section
2.3(b) below). The Registration Statement must be declared
effective by the Commission within seventy five (75) days from the
date of this Agreement. Notwithstanding the foregoing, the Company
will use best efforts to file the Registration Statement within
thirty (30) days and to have the Registration Statement declared
effective by the Commission within sixty (60) days from the date of
this Agreement.
(b)
Inclusion
of Other Shares
. The Company may, at its option, include
shares held by other stockholders of the Company in any such
registration statement filed under this
Section 2.1.
2.2
Expenses of
Registration
. All Registration Expenses incurred in
connection with a registration pursuant to Section 2.1 shall
be borne by the Company;
provided
,
however
, that the Company shall
have no obligation to pay or otherwise bear (i) any portion of
the fees or disbursements of counsel for the Holders in connection
with the registration of their Registrable Securities,
(ii) any portion of any underwriter’s commissions or
discounts, expense allowance or fees or stock transfer taxes
attributable to the Registrable Securities being offered and sold
by the Holders of Registrable Securities, or (iii) any of such
expenses if the payment of such expenses by the Company is
prohibited by the laws of a state in which such offering is
qualified and only to the extent so prohibited. Unless otherwise
stated, all Selling Expenses relating to be borne by the Holders
will be divided pro rata on the basis of the number of shares so
registered or proposed to be so registered.
2.3
Registration
Procedures
. In the case of the registration effected by the
Company pursuant to this Agreement, the Company will keep each
Holder advised in writing as to the initiation of such registration
and as to the completion thereof. The Company will:
(a)
Prepare and file with the Commission a registration
statement and such amendments and supplements as may be necessary
and use its best efforts to cause such registration statement to
become and remain effective until (i) the second anniversary
following the date the registration statement is declared
effective, (ii) all of the Registrable Securities included in
the registration statement have been sold, or (iii) all of the
Registrable Securities may be sold under Rule 144 without any
volume limitation and Holders have given written consent to remove
the Registerable Securities from the Registration Statement,
whichever comes first, except that the Company shall be permitted
to suspend the use of the registration statement during certain
periods as set forth below in this Section 2.3;
and
(b)
Furnish to the Holders participating in such
registration and to the underwriters of the securities being
registered such reasonable number of copies of the registration
statement, preliminary prospectus, final prospectus and such other
documents as such underwriters may reasonably request in order to
facilitate the public offering of such securities.
Notwithstanding
the foregoing, the Company shall notify each Holder whose
securities are included in a registration of the happening of any
event which makes any statement made in the registration statement
or related prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or
which requires the making of any changes in the registration
statement or prospectus so that, in the case of the registration
statement, it will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, and
that in the case of the prospectus, it will not contain an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. In
such event, the Company may suspend use of the prospectus on
written notice to each participating Holder, in which case each
participating Holder shall not dispose of Registrable Securities
covered by the registration statement or prospectus until copies of
a supplemented or amended prospectus are distributed to the
participating Holders or until the participating Holders are
advised in writing by the Company that the use of the applicable
prospectus may be resumed (the period of such suspension shall be a
“
Blackout
Period
”). The Company shall ensure that the use of the
prospectus may be resumed as soon as is reasonably practicable. The
Company shall, upon the occurrence of any event contemplated by
this paragraph, prepare a supplement or post-effective amendment to
the registration statement or a supplement to the related
prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Securities being sold
thereunder, such prospectus will not contain an untrue statement of
a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading. In the event that the Company
declares one or more Blackout Periods, the two-year anniversary
period set forth in Section 2.3(a) shall be extended by the
number of days that constitute any such Blackout
Periods.
(c) The
Holder agrees to furnish to the Company a completed Selling
Shareholder Questionnaire in the form attached to this Agreement as
Annex A
or in a
form mutually agreeable between the parties. At least five trading
days prior to the first anticipated filing date of a Registration
Statement for any registration under this Agreement, the Company
will notify the Holder of the information the Company requires from
that Holder other than the information contained in the Selling
Shareholder Questionnaire, if any, which shall be completed and
delivered to the Company promptly upon request and, in any event,
within three Trading Days prior to the applicable anticipated
filing date. Each Holder further agrees that it shall not be
entitled to be named as a Selling Shareholder in the Registration
Statement or use the Prospectus for offers and resales of
Registrable Securities at any time and the Company shall have nor
registration obligations under this Section 2.3 , unless the Holder
has returned to the Company a completed and signed Selling
Shareholder Questionnaire and a response to any reasonable requests
for further information as described in the previous sentence. If
the Holder of Registrable Securities returns a Selling Shareholder
Questionnaire or a request for further information, in either case,
after its respective deadline, the Company shall use its
commercially reasonable efforts to take such actions as are
required to name the Holder as a selling security holder in the
Registration Statement or any pre-effective or post-effective
amendment thereto and to include (to the extent not theretofore
included) in the Registration Statement the Registrable Securities
identified in such late Selling Shareholder Questionnaire or
request for further information. The Holder acknowledges and agrees
that the information in the Selling Shareholder Questionnaire or
request for further information as described in this Section 2.3(c)
will be used by the Company in the preparation of the Registration
Statement and hereby consents to the inclusion of such information
in the Registration Statement. Holder acknowledges that it may be
listed as an “underwriter” in the Registration
Statement.
2.4
Indemnification
(a)
The Company will indemnify each Holder, each of its
officers and directors and partners, and each person controlling
such Holder within the meaning of Section 15 of the Securities
Act, with respect to which registration has been effected pursuant
to this Agreement, against all expenses, claims, losses, damages
and liabilities (or actions in respect thereof), including any of
the foregoing incurred in settlement of any litigation, commenced
or threatened, arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other
document, or any amendment or supplement thereto, incident to any
such registration, or based on any omission (or alleged omission)
to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or any
violation by the Company of the Securities Act, the Exchange Act,
state securities laws or any rule or regulation promulgated under
such laws applicable to the Company in connection with any such
registration, and the Company will reimburse each such Holder, each
of its officers and directors, and each person controlling such
Holder, for any legal and any other expenses reasonably incurred,
as such expenses are incurred, in connection with investigating,
preparing or defending any such claim, loss, damage, liability or
action, provided that the Company will not be liable in any such
case to the extent that any such claim, loss, damage, liability or
expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in reliance
upon and in conformity with written information furnished to the
Company by or on behalf of such Holder for use
therein.
(b)
Each party entitled to indemnification under this
Section 2.4 (the “
Indemnified Party
”) shall
give notice to the party required to provide indemnification (the
“
Indemnifying
Party
”) promptly after such Indemnified Party has
actual knowledge of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of
any such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party, who shall conduct the defense
of such claim or litigation, shall be approved by the Indemnified
Party (whose approval shall not unreasonably be withheld), and the
Indemnified Party may participate in such defense at such
party’s expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this
Agreement unless the failure to give such notice is materially
prejudicial to an Indemnifying Party’s ability to defend such
action and provided further, that the Indemnifying Party shall not
assume the defense for matters as to which there is a conflict of
interest or there are separate and different defenses. No
Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party (whose
consent shall not be unreasonably withheld), consent to entry of
any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation.
2.5
Liquidated
Damages
(a)
If (i) the registration statement is not filed with the
Commission on or prior to the date forty five (45) days from the
date of this Agreement, (ii) the registration statement has
not been declared effective by the Commission on or prior to the
date seventy five (75) days from the date of this Agreement, or
(iii) any registration statement required by this Agreement
is filed and declared effective by the Commission but shall
thereafter cease to be effective or fail to be usable for its
intended purpose (each such event referred to as a
“Registration Default”), the Company hereby agrees to
pay liquidated damages (“Liquidated Damages”) to each
Holder of the Registrable Securities in an amount equal to 1% of
the Purchase Price, as defined in the Securities Purchase
Agreement, per month which Liquidated Damages shall be increased to
5% of the Purchase Price per month if the Registration Statement is
not effective within 150 days from the Effective Date.
Following the cure of all Registration Defaults relating to any
particular Registrable Securities, Liquidated Damages shall cease
to accrue; provided, however, that, if after Liquidated
Damages have ceased to accrue, a different Registration Default
occurs, Liquidated Damages shall again accrue pursuant to the
foregoing provisions. All accrued Liquidated Damages shall be
paid in the manner set forth in the Securities Purchase
Agreement.
(b) The
Company and Investor hereto acknowledge and agree that the sums
payable as Liquidated Damages under subsection 2.5(a) above shall
constitute liquidated damages and not penalties and are in addition
to all other rights of the Holders, including the right to call a
default under the Securities Purchase Agreement. The
parties further acknowledge that (i) the amount of loss or damages
likely to be incurred is incapable or is difficult to precisely
estimate, (ii) the amounts specified in such subsections bear a
reasonable relationship to, and are not plainly or grossly
disproportionate to, the probable loss likely to be incurred in
connection with any failure by the Company to obtain or maintain
the effectiveness of a registration statement, (iii) one of the
reasons for the Company and the Investor reaching an agreement as
to such amounts was the uncertainty and cost of litigation
regarding the question of actual damages, and (iv) the Company and
the Investor are sophisticated business parties and have been
represented by sophisticated and able legal counsel and negotiated
this Agreement at arm’s length.
3.
Transfer of
Rights
.
The
rights granted under Section 2 of this Agreement may be
assigned to any transferee or assignee in connection with any
transfer or assignment by the Holder of such Holder’s
Warrant, Securities Purchase Agreement, True-up Shares and Advisory
Shares or Registrable Securities, provided that: (i) such
transfer is otherwise effected in accordance with applicable
securities laws and the terms of this Agreement; (ii) written
notice is promptly given to the Company; and (iii) such
transferee or assignee agrees in writing to be bound by the
provisions of this Agreement and by any other agreement reasonably
necessary to ensure compliance with federal, state, and foreign
securities laws.
4.
Miscellaneous
.
4.1
Consent to
Jurisdiction
. The Company and the Holders (i) hereby
irrevocably submit to the exclusive jurisdiction of the United
States District Court and the courts of the State of Florida
located in Broward County, Florida, for the purposes of any suit,
action or proceeding arising out of or relating to this Agreement,
and (ii) hereby waive, and agree not to assert in any such
suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of
the suit, action or proceeding is improper. The Company and each
Holder consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address
in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of
process and notice thereof. Nothing in this Section 4.1 shall
affect or limit any right to serve process in any other manner
permitted by law.
4.2
Amendments and
Waivers
. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the
same shall be in writing and signed by the Company and Investor or,
if investor does not own Registerable Securities, a majority in
interest of the Holders.
4.3
Notices
. Any
and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earlier of (i) the date of
transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified for notice
prior to 5:00 p.m., Eastern Standard Time, on a business day,
(ii) the first business day after the date of transmission, if
such notice or communication is delivered via facsimile at the
facsimile telephone number specified for notice later than
5:00 p.m., Eastern Standard Time, on any date and earlier than
11:59 p.m., Eastern Standard Time, on such date,
(iii) the business day following the date of mailing, if sent
by nationally recognized overnight courier service, or
(iv) actual receipt by the party to whom such notice is
required to be given.
If to
the Company:
Youngevity
International, Inc.
2400
Boswell Road
Chula
Vista, CA 91914
Attn:
Stephan Wallach
with a
copy to:
Gracin
& Marlow, LLP
The
Chrysler Building
405
Lexington Avenue, 26th Floor
New
York, New York 10174
Attn:
Leslie Marlow, Esq.
If to
the Investor:
_
with a
copy to:
4.4
Successors and
Assigns
. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted
assigns.
4.5
Counterparts
.
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.
4.6
Governing
Law
. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, without regard to
principles of conflicts of law thereof. This Agreement shall not be
interpreted or construed with any presumption against the party
causing this Agreement to be drafted.
4.7
Attorneys
Fees
. In the event the Holder hereof shall refer this
Agreement to an attorney to enforce the terms hereof, the Company
agrees to pay all the costs and expenses incurred in attempting or
effecting the enforcement of the Holder's rights, including
reasonable attorney's fees, if a suit is instituted and Holder is
the prevailing party.
4.8
Severability
.
If any term, provision, covenant or restriction of this Agreement
is held to be invalid, illegal, void or unenforceable in any
respect, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect
and shall in no way be affected, impaired or invalidated, and the
parties hereto shall use their reasonable efforts to find and
employ an alternative means to achieve the same or substantially
the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid,
illegal, void or unenforceable.
4.9
Headings
.
The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
4.10
Time is of the
Essence
. Time is of the essence in regards to every
provision of this Agreement.
4.11
Conflicts
.
In the event this Agreement conflicts with any provision of any
other agreement between the Company and Investor, this Agreement
will control.
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first set forth above.
|
|
|
|
|
Youngevity International, Inc.
By:
___________________________________
Name:
Stephan Wallach
Title:
Chief Executive Officer
|
Investor
By:
___________________________________
Name: