SECURITY AGREEMENT
Exhibit
10.2
THIS
SECURITY AGREEMENT (this
“Agreement”) is
made as of __, 2019, (the “Funding Date”) by and between
YOUNGEVITY INTERNATIONAL, INC., a Delaware corporation
(“Pledgor”) in
favor of the individuals listed on Schedule A annexed hereto
(herein, each a “Secured
Creditor” and together the “Secured Creditors”).
WHEREAS, in order to induce the Secured
Creditors to extend the loans evidenced by certain 6% secured
promissory notes (the “Notes”), the Pledgor has agreed to
execute and deliver to the Secured Creditors a pledge and security
agreement providing for the pledge and grant to the Secured
Creditors of a security interest in the Pledgor’s interest in
the collateral identified and defined below.
NOW, THEREFORE, in consideration of the
premises and the agreements herein and in order to induce the
Secured Creditors to make the loans evidenced by the Notes, the
Pledgor hereby agrees with the Secured Creditors as
follows:
AGREEMENT
NOW,
THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as
follows:
1. Grant of Security Interest. To
secure the prompt payment by the Pledgor, as and when due and
payable, of all amounts owing by it in respect of the Notes and the
full and timely performance of all of Pledgor’s obligations
hereunder, Pledgor hereby unconditionally and irrevocably pledges,
grants and hypothecates to the Secured Creditors a continuing Lien
and security interest (the “Security Interest”) in and to the
collateral identified on Exhibit A hereto and the
proceeds thereof (the “Collateral”).
2. Priority of Security Interest.
The Secured Creditors and Pledgor each acknowledge and agree
that:
(a) the Security
Interest granted by Pledgor in the Collateral owned by Pledgor
pursuant to this Agreement is subject and subordinated to the
rights in the Collateral held by Crestmark Bank under its Amended
and Restated Loan and Security Agreement, dated November 16, 2017,
as amended on December 29, 2017 (the “First Lien”) and is pari passu to the rights in the
Collateral held by the holders of the 2014 Secured Notes issued by
Youngevity International, Inc.; and
(b) upon the occurrence
and continuation of either (i) an Event of Default under the Notes
or hereunder, or (ii) an event of default in respect of the First
Lien or the 2014 Secured Notes, the Secured Creditors may exercise
any of its rights and remedies with respect to the Collateral owned
by Pledgor or the Security Interest granted by Pledgor hereunder,
all as provided in this Agreement.
3. Representations and
Covenants.
(a) Other Liens. Pledgor owns all
rights, title and interest in the respective Collateral (or has
appropriate rights to use in the case of property subject to
leases, licenses or similar arrangements in which Pledgor is the
licensee or lessee) and, except for the First Lien other Permitted
Liens as defined below, Pledgor will not permit its Collateral to
be subject to any adverse lien, security interest or encumbrance
(other than Permitted Liens), and Pledgor will defend its
Collateral against the claims and demands of all persons at any
time claiming the same or any interest therein. Except as disclosed
to the Secured Creditors, no financing statements covering any
Collateral or any proceeds thereof are on file in any public
office. Permitted Liens shall include (i) purchase money liens, and
liens incurred in the ordinary course of business, (ii) liens for
taxes not yet delinquent or which are being contested in good
faith, (iii) any lien on any real or personal property at the time
it is acquired and any lien renewing any of the foregoing, (iv)
Liens as do not materially affect the value of such property and do
not materially interfere with the use made and proposed to be made
of such property by the Pledgor.
-1-
(b) This Agreement
creates in favor of the Secured Creditors a valid security interest
in the Collateral, subject only to the First Lien and Permitted
Liens (as defined) securing the payment and performance of the
Obligations. Upon making the filings described in the immediately
following paragraph, all security interests created hereunder in
any Collateral, which may be perfected by filing Uniform Commercial
Code (“UCC”)
financing statements and other filings, if any, as may be required
under the laws of the United States (together with the UCC, the
“Required
Filings”) in order to perfect a Security Interest,
shall have been duly perfected. Without limiting the generality of
the foregoing, except for the Required Filings and subject to the
requirements of the laws of Nicaragua, no consent of any third
parties and no authorization, approval or other action by, and no
notice to or filing with, any governmental authority or regulatory
body is required for: (i) the execution, delivery and performance
of this Agreement; (ii) the creation or perfection of the Security
Interests in the United States created hereunder in the Collateral;
or (iii) the enforcement of the rights of the Secured Creditors
hereunder.
(c) Filing Authorization. Pledgor
hereby authorizes the Secured Creditors, as the agent and
attorney-in-fact for Pledgor to file one or more financing
statements under the UCC and all other Required Filings, with
respect to the Security Interests, with the proper filing and
recording agencies in any jurisdiction deemed proper by
it.
(d) Further Documentation. At any
time and from time to time, at the sole expense of Pledgor, Pledgor
will promptly and duly execute and deliver such further instruments
and documents and take such further action as the Secured Creditors
may reasonably request for the purpose of obtaining or preserving
the full benefits of this Agreement and of the rights and powers
herein granted. The undersigned Pledgor hereby authorizes Secured
Creditors to file with the appropriate filing office, now or
hereafter from time to time, financing statements, continuation
statements and amendments thereto, naming the undersigned as
Pledgor and covering all of the Collateral of Pledgor, including
but not limited to any specific listing, identification or type of
all or any portion of the assets of the undersigned. The
Secured Creditors shall provide Pledgor with a copy of any such
filing. The undersigned acknowledges and agrees, by evidence of its
signature below, that this authorization is sufficient to satisfy
the requirements of Revised Article 9 of the Uniform Commercial
Code and the laws of all other jurisdictions in which Required
Filings are to be made.
(e) Indemnification. Pledgor agrees
to defend, indemnify and hold harmless Secured Creditors against
any and all liabilities, costs and expenses (including, without
limitation, all reasonable legal fees and expenses): (i) with
respect to, or resulting from, any delay in paying any and all
excise, sales or other taxes which may be payable or are determined
to be payable with respect to any of the Collateral; (ii) with
respect to, or resulting from, any breach of any law, rule,
regulation or order of any governmental authority applicable to any
of the Collateral; or (iii) in connection with a breach of any of
the transactions contemplated by this Agreement; provided, however, that this
indemnification shall not extend to any damages caused by the gross
negligence or willful misconduct of the Secured
Creditors.
(f) Change of Jurisdiction of
Organization; Relocation of Business or Collateral. Pledgor
shall not change its jurisdiction of organization, relocate its
chief executive office, principal place of business or its records
or allow the relocation of any Collateral (unless such relocation
is in the ordinary course of business) without thirty (30) days
prior written notice to the Secured Creditors.
(g)
Limitations on
Modifications of Accounts, Etc. Upon the occurrence and
during the continuation of any Event of Default (as defined in the
Credit Agreement or Credit Notes), Pledgor shall not, without the
Secured Creditors’ prior written consent, grant any extension
of the time of payment of any of the accounts, chattel paper,
instruments or amounts due under any contract or document,
compromise, compound or settle the same for less than the full
amount thereof, release, wholly or partly, any person liable for
the payment thereof, or allow any credit or discount whatsoever
thereon other than trade discounts and rebates or payment
extensions granted in the ordinary course of Pledgor’s
business.
-2-
(h) Insurance. Pledgor shall
maintain insurance policies insuring the Collateral against loss or
damage from such risks and in such amounts and forms and with such
companies as are customarily maintained by businesses of similar
type and size to Pledgor.
(i) Authority. Pledgor has all
requisite corporate or other
powers and authority to execute this Agreement and to perform all
of its obligations hereunder, and this Agreement has been duly
executed and delivered by Pledgor and constitutes the legal, valid
and binding obligation of Pledgor, enforceable in accordance with
its terms. The execution, delivery and performance by Pledgor of
this Agreement have been duly authorized by all necessary corporate
action and do not (i) require any authorization, consent or
approval by any governmental department, commission, board, bureau,
agency or instrumentality or domestic; (ii) violate any
provision of any law, rule or regulation or of any order, writ,
injunction or decree presently in effect, having applicability to
Pledgor or the articles of incorporation or by-laws of Pledgor; or
(iii) result in a breach of or constitute a default under any
material indenture, Loan or credit agreement or any other
agreement, lease or instrument to which Pledgor is a party or by
which it or its properties may be bound or affected.
(j) Defense of Intellectual
Property. Pledgor shall (i) use commercially reasonable
efforts to protect, defend and maintain the validity and
enforceability of its material copyrights, patents, trademarks and
trade secrets; (ii) use commercially reasonable efforts to
detect infringements of its copyrights, patents, trademarks and
trade secrets and promptly advise Secured Creditors in writing of
material infringements detected; and (iii) not allow any
copyrights, patents, trademarks or trade secrets material to
Pledgor’s businesses to be abandoned, forfeited or dedicated
to the public domain without the written consent of Secured
Creditors.
(k) Maintenance of Records. Pledgor
will keep and maintain at its own cost and expense satisfactory and
complete records of the Collateral and
may not relocate such books of account and records or tangible
Collateral unless it delivers to the Secured Creditors at least
thirty (30) days prior to such relocation (i) written notice of
such relocation and the new location thereof; and (ii) evidence
that appropriate financing statements under the UCC and other
Required Filings have been filed and recorded and other steps have
been taken to create in favor of the Secured Creditors, a valid,
perfected and continuing perfected first priority lien in the
Collateral.
(l) Inspection Rights. Secured
Creditors will have full access during normal business hours, and
upon reasonable prior notice, to all of the books, correspondence
and other records of Pledgor relating to the Collateral, and
Secured Creditors or their representatives may examine such records
and make photocopies or otherwise take extracts from such records,
subject to Pledgor’s reasonable confidentiality requirements.
Pledgor agrees to render to Secured Creditors, at the expense of
Pledgor, such clerical and other assistance as may be reasonably
requested with regard to the exercise of its rights pursuant to
this paragraph.
(m) Compliance with Laws, Etc.
Pledgor shall comply in all material respects with all laws, rules,
regulations and orders of any governmental authority applicable to
any part of the Collateral or to the operation of Pledgor’s
businesses; provided, however, that Pledgor may
contest any such law, rule, regulation or order in any reasonable
manner which does not, in the reasonable opinion of Pledgor,
adversely affect Secured Creditors’ rights or the priority of
its liens on the Collateral.
(n) Payment of Obligations. Pledgor
shall pay before delinquency all obligations associated with the
Collateral, including license fees, taxes, assessments and
governmental charges or levies imposed upon the Collateral or with
respect to any of its income or profits derived from the
Collateral; as well as all claims of any kind (including, without
limitation, claims for labor, materials and supplies) against or
with respect to the Collateral, except that no such charge need be
paid if (i) the validity or amount of such charge is being
contested in good faith by appropriate proceedings; (ii) such
proceedings do not involve any material danger of the sale,
forfeiture or loss of any of the Collateral or any interest in the
Collateral; and (iii) such charge is adequately reserved
against on the books of Pledgor in accordance with generally
accepted accounting principles. The obligation of the Company to
repay the Loan evidenced by the Note, together with all interest
accrued thereon, is absolute and unconditional, and there exists no
right of set off or recoupment, counterclaim or defense of any
nature whatsoever to payment of the Loan.
-3-
(o) Limitations on Liens on
Collateral. Except for the First Lien and Permitted Liens,
Pledgor shall not create, incur or permit to exist, any liens on
the Collateral outside the scope of this Agreement other than
purchase money liens, liens incurred in the ordinary course of
business, liens for taxes not yet delinquent or which are being
contested in good faith , any lien on any real or personal property
at the time it is acquired, any lien renewing any of the foregoing,
and shall defend the Collateral against, and shall take such other
action as is necessary to remove, any lien or claim on or to the
Collateral, and shall defend the rights, title and interest of
Secured Creditors in and to any of the Collateral against the
claims and demands of all other persons.
(p) Limitations on Dispositions of
Collateral. Pledgor shall not sell, transfer, lease or
otherwise dispose of a material portion of the Collateral, or offer
or contract to do so without the written consent of a majority in
interest of the Secured Creditors; provided, however, that Pledgor will be
allowed to (i) sell its inventories in the ordinary course of
business; (ii) sell and grant non-exclusive licenses to its
products, intellectual property and related documentation in the
ordinary course of business; and (iii) dispose of obsolete or worn
out inventory.
(q) Good
Standing. Commencing on a date
which shall be not more than thirty (30) days from the date of this
Agreement, Pledgor shall be and at all times preserve and keep in
full force and effect its valid existence and good standing and any
rights and franchises material to its business.
(r) Offices.
Pledgor may not relocate its chief
executive office to a new location without providing thirty (30)
days prior written notification thereof to the Secured Creditors
and so long as, at the time of such written notification, Pledgor
provides any financing statements or fixture filings necessary to
perfect and continue the perfection of the Security Interests
granted and evidenced by this Agreement.
(s) Certificates. At any time and from time to time that any
Collateral consists of instruments, certificated securities or
other items that require or permit possession by the Secured
Creditors to perfect the security interest created hereby, Pledgor
shall deliver such Collateral to the Agent.
(t) Tangible
Chattel. Pledgor shall cause
all tangible chattel paper constituting Collateral to be delivered
to the Secured Creditors, or, if such delivery is not possible,
then to cause such tangible chattel paper to contain a legend
noting that it is subject to the security interest created by this
Agreement. To the extent that any Collateral consists of electronic
chattel paper, Pledgor shall cause the underlying chattel paper to
be “marked” within the meaning of Section 9-105 of the
UCC (or successor section thereto).
(u) Third Party. To the extent that any Collateral is in the
possession of any third party, Pledgor shall join with the Secured
Creditors in notifying such third party of the Secured
Creditors’ security interest in such Collateral and shall use
its best efforts to obtain an acknowledgement and agreement from
such third party with respect to the Collateral, in form and
substance reasonably satisfactory to the Secured
Creditors.
(v) Further Identification of
Collateral. Pledgor have full rights, title and interest in
and to all identified Collateral. Pledgor shall furnish to Secured
Creditors from time to time statements and schedules further
identifying and describing the Collateral and such other reports in
connection with the Collateral as the Secured Creditors may
reasonably request, all in reasonable detail.
-4-
4. Secured Creditors’ Appointment
as Attorney-in-Fact.
(a) Powers. Pledgor and Secured
Creditors hereby appoint the officers or agents of ___________
(each an “Agent”) to act on behalf of
Secured Creditors, with full power of substitution, as its
attorney-in-fact with full irrevocable power and authority in the
place of Pledgor and in the name of Pledgor or in its own name, so
long as an Event of Default has occurred and is continuing, for the
purpose of carrying out the terms of this Agreement, to take any
and all appropriate action and to execute any instrument which may
be necessary or desirable to accomplish the purposes of this
Agreement. Without limiting the foregoing, so long as an Event of
Default has occurred and is continuing, Secured Creditors, in their
discretion, will have the right, without notice to, or the consent
of Pledgor, to do any of the following on behalf of
Pledgor:
(i) to
pay or discharge any obligations in connection with the Collateral,
including license fees and taxes or liens levied or placed on or
threatened against the Collateral;
(ii) to
direct any party liable for any payment under any of the Collateral
to make payment of any and all amounts due or to become due
thereunder directly to Secured Creditors or as Secured Creditors
directs;
(iii) to
ask for or demand, collect and receive payment of and receipt for
any payments due or to become due at any time in respect of or
arising out of any Collateral;
(iv) to
commence and prosecute any suits, actions or proceedings at law or
in equity in any court of competent jurisdiction to enforce any
right in respect of any Collateral;
(v) to
defend any suit, action or proceeding brought against any Pledgor
with respect to any Collateral;
(vi) to
settle, compromise or adjust any suit, action or proceeding
described in subsection (v) above and, to give such discharges or
releases in connection therewith as Secured Creditors may deem
appropriate;
(vii) to
assign any license or patent right included in the Collateral of a
Pledgor (along with the goodwill of the business to which any such
license or patent right pertains), throughout the world for such
term or terms, on such conditions and in such manner as Secured
Creditors in their sole discretion determine;
(viii) to
sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral and to take, at Secured
Creditors’ option and Pledgor’s expense, any actions
which Secured Creditors deem necessary to protect, preserve or
realize upon the Collateral and Secured Creditors’ liens on
the Collateral and to carry out the intent of this Agreement, in
each case to the same extent as if Secured Creditors were the
absolute owners of the Collateral for all purposes;
(ix) to
exercise the voting and other consensual rights which it would
otherwise be entitled to exercise and all rights of Pledgor to
receive the dividends and interests which it would otherwise be
authorized to receive and retain, shall cease. Upon such notice,
Agent shall have the right to receive, for the benefit of the
Secured Creditors, any interest, cash dividends or other payments
on the Collateral and, at the option of Agent, to exercise in such
Agent’s discretion all voting rights pertaining thereto.
Without limiting the generality of the foregoing, Agent shall have
the right (but not the obligation) to exercise all rights with
respect to the Collateral as it were the sole and absolute owner
thereof, including, without limitation, to vote and/or to exchange,
at its sole discretion, any or all of the Collateral in connection
with a merger, reorganization, consolidation, recapitalization or
other readjustment concerning or involving the Collateral of
Pledgor or any of its direct or indirect subsidiaries;
-5-
(x) to
operate the Business of Pledgor using the Collateral, and shall
have the right to assign, sell, lease or otherwise dispose of and
deliver all or any part of the Collateral, at public or private
sale or otherwise, either with or without special conditions or
stipulations, for cash or on credit or for future delivery, in such
parcel or parcels and at such time or times and at such place or
places, and upon such terms and conditions as the Agent may deem
commercially reasonable, all without (except as shall be required
by applicable statute and cannot be waived) advertisement or demand
upon or notice to Pledgor or right of redemption of a Pledgor,
which are hereby expressly waived. Upon each such sale, lease,
assignment or other transfer of Collateral, the Secured Creditors,
may, unless prohibited by applicable law which cannot be waived,
purchase all or any part of the Collateral being sold, free from
and discharged of all trusts, claims, right of redemption and
equities of any Pledgor, which are hereby waived and
released;
(xi) to
sign and endorse any drafts, assignments, proxies, stock powers,
verifications, notices and other documents relating to the
Collateral; and
(xii) to
notify Pledgor and any obligors under instruments or accounts to
make payments directly to the Agent, on behalf of the Secured
Creditors, and to enforce Pledgor’s rights against such
account Pledgor and obligors.
Pledgor
hereby ratifies whatever actions the Secured Creditors lawfully
does or causes to be done in accordance with this Section 3. This
power of attorney will be a power coupled with an interest and will
be irrevocable.
(b) No Duty on Secured Creditors’
Part. The powers conferred on Secured Creditors by this
Section 4 are solely to protect Secured Creditors’
interest in the Collateral and do not impose any duty upon it to
exercise any such powers. Secured Creditors will be accountable
only for amounts that it actually receives as a result of the
exercise of such powers, and neither Secured Creditors nor any of
their officers, directors, employees or agents will, in the absence
of willful misconduct or gross negligence, be responsible to
Pledgor for any act or failure to act pursuant to this Section
4.
(c) Application
of Proceeds. The proceeds of
any sale, lease or other disposition of the Collateral hereunder or
from payments made on account of any insurance policy insuring any
portion of the Collateral shall be applied: (i) first, to the
expenses of retaking, holding, storing, processing and preparing
for sale, selling, and the like (including, without limitation, any
taxes, fees and other costs incurred in connection therewith) of
the Collateral, to the reasonable attorneys’ fees and
expenses incurred by the Agent in enforcing the Secured
Creditors’ rights hereunder and in connection with
collecting, storing and disposing of the Collateral; and (ii) then
to satisfaction of the Obligations, and to the payment of any other
amounts required by applicable law, after which the Secured
Creditors shall pay to Pledgor any surplus
proceeds.
(d) Liability
for Deficiency. Upon the sale, license or other disposition
of the Collateral, the proceeds thereof are insufficient to pay all
amounts to which the Secured Creditors are legally entitled,
Pledgor will be liable for the deficiency, together with interest
thereon, at the Default Rate set forth in the Credit Notes or the
lesser amount permitted by applicable law (the “Default Rate”), and the reasonable
fees of any attorneys employed by the Secured Creditors to collect
such deficiency. To the extent permitted by applicable law, Pledgor
waives all claims, damages and demands against the Secured
Creditors arising out of the repossession, removal, retention or
sale of the Collateral, unless due solely to the gross negligence
or willful misconduct of the Secured Creditors as determined by a
final judgment (not subject to further appeal) of a court of
competent jurisdiction.
-6-
5. Duty To Hold In Trust.
Upon the occurrence of any Event of
Default and at any time thereafter, Pledgor shall, upon receipt of
any revenue, income, dividend,
interest
or other sums subject to the Security
Interests, whether payable pursuant to the Notes or otherwise, or
of any check, draft, note, trade acceptance or other instrument
evidencing an obligation to pay any such sum, hold the same in
trust for the Secured Creditors and shall forthwith endorse and
transfer any such sums or instruments, or both, in accordance with
the provisions of Section 4(c) above and if any amounts are
remaining to the Secured Creditors, pro rata in proportion to their respective then-currently
outstanding principal amount of Note for application to the
satisfaction of the Obligations.
6. Expenses Incurred by Secured
Creditors. If Pledgor fail to perform or comply with any of
its agreements or covenants contained in this Agreement, and
Secured Creditors performs or complies, or otherwise causes
performance or compliance, with such agreement or covenant in
accordance with the terms of this Agreement, then the reasonable
expenses of Secured Creditors incurred in connection with such
performance or compliance will be payable by Pledgor to the Secured
Creditors on demand and will constitute Obligations secured by this
Agreement.
7. Remedies. If an Event of
Default has occurred and is continuing, Secured Creditors may
exercise, in addition to all other rights and remedies granted to
it in this Agreement and in any other instrument or agreement
relating to the Obligations, all rights and remedies of a Secured
Creditors under the New York Uniform Commercial Code, as amended
from time to time (the “Code”). Without limiting
the foregoing, in such circumstances, without demand of performance
or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law) to or upon Pledgor or
any other person (all of which demands, defenses, advertisements
and notices are hereby waived), Secured Creditors may collect,
receive, appropriate and realize upon any or all of the Collateral
and/or may sell, lease, assign, give an option or options to
purchase or otherwise dispose of and deliver any or all of the
Collateral (or contract to do any of the foregoing), in one or more
parcels at public or private sale or sales, at any exchange,
broker’s board or office of Secured Creditors or elsewhere
upon such terms and conditions as Secured Creditors may deem
advisable, for cash or on credit or for future delivery without
assumption of any credit risk. Secured Creditors will have the
right upon any such public sale or sales and, to the extent
permitted by law, upon any such private sale or sales, to purchase
all or any part of the Collateral so sold, free of any right or
equity of redemption in Pledgor, which right or equity is hereby
waived or released. Subject to the provisions of Section 4(c),
Secured Creditors will apply the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale,
after deducting all reasonable expenses incurred therein or in
connection with the care or safekeeping of any of the Collateral or
in any way relating to the Collateral or the rights of a Secured
Creditors under this Agreement (including, without limitation,
reasonable attorneys’ fees and expenses) to the payment in
whole or in part of the Obligations, in such order as Secured
Creditors may elect, and only after such application and after the
payment by Secured Creditors of any other amount required by any
provision of law, need Secured Creditors account for the surplus,
if any, to Pledgor. To the extent permitted by applicable law,
Pledgor waives all claims, damage and demands it may acquire
against Secured Creditors arising out of the exercise by Secured
Creditors of any of its rights hereunder. If any notice of a
proposed sale or other disposition of Collateral is required by
law, such notice will be deemed reasonable and proper if given at
least ten (10) days before such sale or other disposition. Pledgor
will remain liable for any deficiency of Pledgor if the proceeds of
any sale or other disposition of the Collateral are insufficient to
pay the Obligations and the reasonable fees and disbursements of
any attorneys employed by Secured Creditors to collect such
deficiency.
-7-
8. Limitation on Duties Regarding
Preservation of Collateral. The sole duty of Secured
Creditors with respect to the custody, safekeeping and preservation
of the Collateral, under the appropriate Code section or otherwise,
will be to deal with it in the same manner as Secured Creditors
deals with similar property for its own account. Neither Secured
Creditors nor any of its employees, affiliates or agents will be
liable for failure to demand, collect or realize upon all or any
part of the Collateral or for any delay in doing so or will be
under any obligation to sell or otherwise dispose of any Collateral
upon the request of Pledgor or otherwise.
9. Powers Coupled with an
Interest. All authorizations and agencies contained in this
Agreement with respect the Collateral are irrevocable and powers
coupled with an interest.
10. No Waiver; Cumulative Remedies.
Secured Creditors will not by any act (except by a written
instrument pursuant to Section 11(a) hereof) of delay,
indulgence, omission or otherwise be deemed to have waived any
right or remedy hereunder or to have acquiesced in any Event of
Default under the Note or in any breach of any of the terms and
conditions of this Agreement. No failure to exercise, nor any delay
in exercising, on the part of Secured Creditors, any right, power
or privilege hereunder will operate as a waiver thereof. No single
or partial exercise of any right, power or privilege hereunder will
preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. A waiver by Secured Creditors
of any right or remedy under this Agreement on any one occasion
will not be construed as a bar to any right or remedy that Secured
Creditors would otherwise have on any subsequent occasion. The
rights and remedies provided in this Agreement are cumulative, may
be exercised singly or concurrently and are not exclusive of any
rights or remedies provided by law.
11. Miscellaneous.
(a) Amendments and Waivers. Any
term of this Agreement may only be amended by prior written consent
of Pledgor and a majority in interest of the Secured Creditors. Any
amendment or waiver effected in accordance with this Section 11(a)
will be binding upon all of the parties hereto and their respective
successors and assigns.
(b) Transfer; Successors and
Assigns. This Agreement will be binding upon and inure to
the benefit of Pledgor and Secured Creditors, and their respective
successors or assigns. Pledgor may not assign any of its/his rights
or delegate any of its/his duties under this
Agreement.
(c) Governing Law. This Agreement
will be governed by and construed in accordance with the laws of
the State of Delaware without regard to the laws that might be
applicable under conflicts of laws principles. Any action or
proceeding seeking to enforce any provision of, or based on any
right arising out of, any of this Agreement must be brought against
any of the parties in the courts of the State of Delaware, Kent
County, or, if it has or can acquire jurisdiction, in the United
States District Court for the District of Delaware, and each of the
parties consents to the jurisdiction of those courts (and of the
appropriate appellate courts) in any such action or proceeding and
waives any objection to venue laid therein. Nothing in this Section
11(c), however, affects the right of any party to serve legal
process in any other manner permitted by law.
(d) Counterparts. This Agreement
may be executed in any number of counterparts (including by
facsimile), each of which will be an original, but all of which
together will constitute one instrument.
(e) Titles and Subtitles. The
titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or
interpreting this Agreement.
-8-
(f) Notices. All notices, requests
and demands to or upon the Secured Creditors or Pledgor hereunder
shall be effected in the manner provided for in the Purchase
Agreement.
(g) Term. This Agreement shall terminate on the date on
which all payments under the Notes have been indefeasibly satisfied
in full and all other Obligations have been satisfied in full or
discharged (through cash payment or conversion);
provided,
however,
that all indemnities of the Notes contained in this Agreement shall
survive and remain operative and in full force and effect
regardless of the termination of this
Agreement.
(h) Severability. In the event that
any one or more of the provisions contained in this Agreement shall
for any reason be held to be invalid, illegal or unenforceable in
any respect, such provision(s) shall be ineffective only to the
extent of such invalidity, illegality or unenforceability without
invalidating the remainder of such provision or the remaining
provisions of this Agreement and such invalidity, illegality or
unenforceability shall not affect any other provision of this
Agreement, which shall remain in full force and
effect.
(i) Entire Agreement. This
Agreement and the other documents evidencing, securing, or relating
to the Notes constitute the entire understanding and agreement
between the parties with regard to the subjects hereof and thereof
and supersede all prior agreements, representations and
undertakings of the parties, whether oral or written, with respect
to such subject matter.
[Signature
pages follows]
-9-
IN WITNESS WHEREOF, Pledgor and Secured
Creditors have caused this Agreement to be duly executed and
delivered as of the date first above written.
SECURED
CREDITORS:
By:
___________________
Name:
Title:
-10-
SCHEDULE A
Secured Creditors
-11-
EXHIBIT A
Pledged Collateral
All of
the equity in Khrysos Industries, Inc., which is a wholly owned
subsidiary of Youngevity International, Inc.
A-1
