July 31, 2018 CONFIDENTIAL Dave Briskie Youngevity International, Inc. Chula Vista, CA 91914 Dear Mr. Briskie:
Exhibit
10.1
July
31, 2018
CONFIDENTIAL
Xxxx
Xxxxxxx
0000
Xxxxxxx Xxxx
Chula
Vista, CA 91914
Dear
Xx. Xxxxxxx:
This letter (the "Agreement") confirms Corinthian
Partners, LLC ("CP") engagement as an exclusive placement agent for
Youngevity International, Inc. (“Youngevity”), a
Delaware corporation, in connection with the proposed Capital Raise
(the ''Offering") of
up to Three Million
dollars ($3,000,000), or more as agreed, of the Company's
securities (the "Securities") as outlined in the Convertible
Preferred Stock Term Sheet, Share Purchase Agreement, and
associated documents dated on or about August 1, 2018 (the "Term
Sheet"). It is anticipated that the Securities will be sold only to
"accredited investors" (the "Investors"), as such term is defined
in Rule 501(a) of Regulation D, promulgated under the United States
Securities Act of 1933, as amended, pursuant to an exemption from
registration under Rule 506 of Regulation D.
Subject
to the terms and conditions of this Agreement, the Company hereby
appoints CP to act on a best efforts basis as its exclusive
placement agent to privately place the Securities in an amount and
on terms and conditions satisfactory to the Company. CP hereby
accepts such engagement and agrees to use its best efforts to
privately place the Securities with potential Investors. The
Company shall promptly refer to CP all offers, inquiries and
proposals relating to any placement of the Securities made at any
time during the Term (as defined below).
1. Services to
be Rendered. In connection with
the Offering, as requested, CP will assist the Company in
structuring the proposed Offering, identifying, contacting and
evaluating potential purchasers, preparing executive summaries or
business plans, facilitating potential
purchasers due
diligence investigations, analyzing and advising on the financial
implications of offers, preparing and making presentations to the
Company's Board of Directors, formulating negotiation strategies
and conducting negotiations, as appropriate, and in such other
matters as may be agreed upon from time to time by CP and the
Company (the ''Services").
In connection with this Agreement, the Company
agrees to keep CP up to date and apprised of all material business,
market and current legal practices and developments related to the
Company and its operations and management. CP shall devote such
time and effort, as it deems commercially reasonable under the
circumstances in rendering the Services. CP cannot guarantee
results on behalf of the Company, but shall use its best efforts to
pursue all avenues that it deems reasonable through its network of
contacts. CP will post the Offering on its web portal,
xxxxx://xxxxxxxxxxxxxxx.xxx/.
2. Compensation.
For CP's services hereunder, the
Company agrees to pay CP the fees outlined below upon closing of a
sale of any of the Securities (in each instance, a
"Closing"):
(a) a
placement fee equal to five percent (5.0%)
of the gross purchase price paid for the Securities,
payable in full, in cash, at a Closing for the sale of any of the
Securities, and a non-accountable expense allowance equal to two
percent (2.00%) of the gross proceeds of the
Offering.
(b) the
Company shall issue to CP, or its permitted assigns, warrants (the
"PA Warrants") of the Company equal to ten percent (10%) of the
warrants issued to investors pursuant to the Offering, if and when
the warrants are issued to the investors. The PA Warrants shall be
transferable by CP to its permitted assigns, representatives and
agents.
(c) Notwithstanding
anything to the contrary contained herein no placement fee or PA
Warrants shall be paid or issued to CP with respect to any
Securities sold to the Company’s officers, directors,
shareholders who not are already existing clients of CP, or any of
the individuals or entities set forth on Exhibit B hereto. An
Escrow Account (the "Escrow Account") with a third-party agent
approved by the parties hereto will be used for each closing during
the Term. All consideration due CP shall be paid to CP directly
from such escrow. Any fee charged by the escrow agent in the
performance of its duties as escrow agent shall be borne by the
Company.
In
the event there are multiple partial closings prior to the final
closing of the Transaction, the Company shall pay CP a pro-rata
portion of the cash portion of the Transaction Fee and shall issue
to CP, or its designees, a pro-rata portion of the PA Warrants as
soon as is practicable when earned.
-1-
3. RESERVED
4. Information.
The Company will furnish CP such
information with respect to the Company and access to such Company
personnel and representatives, including the Company's auditors and
counsel, as CP may request in order to permit CP to advise the
Company and to assist the Company in preparing offering materials
for use in connection with the Offering (including, but not limited
to: a business plan; executive summary; three (3) year historical
income statement, statement of cash flows, and balance. sheet;; use
of proceeds statement; investor presentation; valuation analysis)
(collectively, the "Offering Materials"). The Company will be
solely responsible for the contents of the Offering Materials and
other information provided to investors in connection with the
Offering. The Company represents and warrants to CP that the
Offering Materials will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading. The Company agrees to advise CP
promptly upon the Company becoming aware of the occurrence of any
event or change in circumstance that results or might reasonably be
expected to result in the Offering Materials containing any untrue
statement of a material fact or omitting to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
Company authorizes CP to provide the Offering Materials to
investors in connection with the Offering. The Company and CP shall
have the right to approve every form of letter, circular, notice,
memorandum or other written communication from the Company or any
person acting on its behalf in connection with the
Offering.
5. Termination
and Survival. The term of our engagement hereunder shall be for
a period commencing on the date hereof and expiring on the earlier
of the final closing of a Transaction, unless sooner terminated or
extended pursuant to the following sentences (the "Term"). This
Agreement may be terminated prior to expiration of the Term, by CP
or Youngevity for any reason at any time upon fifteen (15) days
prior written notice. Notwithstanding the foregoing, it is
understood that the provisions of paragraphs 2 (to the extent fees
are payable prior to termination}, Paragraph 2(c) (to the extent
fees are payable after termination), 3 (to the extent expenses have
been incurred prior to termination), and sections 6 through 18
of this Agreement shall remain operative and in full
force and effect regardless of any termination or expiration of
this Agreement. In the event of termination, CP shall be
immediately paid in full on all items of compensation and expenses
payable to CP pursuant hereto, as of the date of
termination.
7. Confidentiality
of Advice. Except as otherwise provided in this paragraph,
any written or other advice rendered by CP pursuant to its
engagement hereunder are solely for the use and benefit of the
Company's executive management team and Board of Directors and
shall not be publicly disclosed in whole or in part, in any manner
or summarized, excerpted from or otherwise publicly referred to or
made available to third parties, other than representatives and
agents of the Company's executive management team and Board of
Directors who also shall not disclose such information, in each
case, without CPs prior approval,. unless in the opinion of counsel
..and after consultation with CP, such disclosure is required by
law. In addition, other than in connection with discussions with
potential Investors with respect to potential sales of Securities
or as required by law, CP may not be otherwise publicly referred to
without its prior written consent. The Company acknowledges that CP
and its affiliates are in the business of providing financial
services and consulting advice to others. Nothing herein contained
shall be construed to limit or restrict CP in conducting such
business with respect to others, or in rendering such advice to
others, except as such advice may relate to matters relating to the
Company's business and properties and that might compromise
confidential information delivered by the Company to CP. CP agrees
to maintain the confidentiality of all non-public information
provided to it by the Company and not to use such information for
any purpose other than in accordance with disclosures approved by
the Company.
8. Obligations
Limited. CP shall have no obligation to make any
independent appraisals of assets or liabilities or any independent
verification of the accuracy or completeness of any information
provided it in the course of this engagement and shall have no
liability in regard thereto.
9. Third Party
Beneficiaries. This Agreement is made solely for the benefit of
the Board of Directors of the Company, CP and other Indemnified
Persons (as defined herein), and their respective successors,
assigns, heirs and personal representatives, and no other person
shall acquire or have any right under or by virtue of this
Agreement.
-2-
10. Representations
and Warranties. The Company
represents and warrants that this Agreement has been duly
authorized, executed and delivered by the Company and constitutes a
legal valid and binding obligation of the
Company.
CP
represents that it is a FINRA licensed broker-dealer in good
standing with the SEC and each state securities authority in which
it offers or sells securities and has an anti-money laundering
program in place reasonably designed to comply with Section 352 of
the USA Patriot Act, NASO Rule 3011, and NYSE Rule 445. CP's
anti-money laundering program includes: (i) Anti-Money
Laundering/"Know Your Customer" policies and procedures (ii) the
designation of an Anti-Money Laundering Compliance Officer; (iii}
recording-keeping and reporting practices in accordance with
applicable law; (iv) reporting of suspicious. activity to
government authorities in accordance with applicable law; (v)
anti-money laundering training; and (vi) independent testing for
compliance. CP will provide such periodic reports or certifications
to the Company regarding this program as the Company may reasonably
request. CP’s web
portal, xxxxx://xxxxxxxxxxxxxxx.xxx/,
complies in all respects with applicable law. Insofar as the
offering shall be made pursuant to Rule 506(c), CP shall have
verified that each investor in the Offering is an accredited
investor under Rule 506 (c) of the Securities Act of 1933, and
shall have taken the following action to satisfy the requirements
of Rule 506(c): (i) reviewed an IRS form provided by the investor
that reports such investor’s income for the two most recent
years as meeting an accredited investor status and received a
written representation from the investor that it reasonably expects
to reach the income level required to qualify as an accredited
investor in the current year; (ii) reviewed one or more documents
dated within the past three months to confirm assets as well as a
report from a national consumer reporting agency to confirm
liabilities of the investor and received a written representation
from the investor that it has disclosed all liabilities necessary
to make a net worth determination; and (iii) obtained a
written representation from a regsitered broker-dealer, registered
investment advisor, licensed attorney or certified public
accountant that has been verified to be an independent third party
that has determined that the purchaser is an accredited
investor.
12.
Indemnification. In
connection with and as part of the engagement contemplated herein,
each party agrees to indemnify, defend and hold the other party
harmless in accordance with the indemnification rider attached
hereto as Exhibit
A.
13. Non-Circumvention.
The Company agrees not to circumvent,
avoid, bypass, or obviate directly or indirectly, the intent of
this Agreement, including that the Company shall not permit its
subsidiaries and its other affiliated entities to sell securities
with the effect of avoiding payment of fees under this Agreement.
The Company agrees that during the term of this Agreement and for a
period of six (6) months after the termination of this Agreement
not to accept any financing upon the terms set forth in the Term
Sheet from any third party whom CP first introduces to the
Company via
an in person, a telephonic meeting or through CP’s
web portal, xxxxx://xxxxxxxxxxxxxxx.xxx/,
or who is a current client of CP and otherwise becomes an investor
in the Company by reason of CP’s investment advice (which
would exclude by definition, and require more than, an “email
blast” by CP to its clients), without the consent of CP,
unless for each business opportunity accepted by the Company from a
third party introduced by CP or otherwise, the Company remits a
term sheet providing for compensation to CP in accordance herewith,
or which otherwise provides for compensation structure agreeable to CP, in its
sole discretion.
14. Governing
Law; Jurisdiction; Jury Trial. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be
governed by the internal laws of the State of New York, without
giving effect to any choice of law or conflict of law provision or
rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions
other than the State of New York. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal
courts sitting in New York, New York, for the adjudication of any
dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in
an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served in
any such suit, action or proceeding by mailing a copy thereof to
such party at the address for such notices to it under this
Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY RIGHT TO A JURY TRIAL, AND AGREES NOTTO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.
15. Legal Fees
and Costs. If a legal action is initiated by any party to
this Agreement against another; arising out of or relating to the
alleged performance or non performance of any right or obligation
established hereunder, or any dispute concerning the same, any and
all fees, costs and expenses reasonably incurred by each successful
party or his, her or its legal counsel in investigating, preparing
for, prosecuting, defending against, or providing evidence and
producing documents or taking any other action in respect of such
action shall be the joint and several obligation of the
unsuccessful party(ies) and shall be paid or reimbursed by the
unsuccessful party(ies).
16. Severability. If
one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith. In the event that the
parties cannot reach a mutually agreeable and enforceable
replacement for such provision, then (a) such provision shall be
excluded from this Agreement, (b) the balance of the Agreement
shall be interpreted as if such provision were so excluded and (c)
the balance of the Agreement shall be enforceable in accordance
with its terms.
-3-
17. Future
Advertisements. The Company
agrees that CP has the right to place advertisements describing its
services to the Company under this Agreement in its own marketing
materials as well as financial and other newspapers and journals at
its own expense following the final closing of the
Offering.
18. Miscellaneous. (a)
This Agreement and the documents referred to herein constitute the
entire agreement between the parties hereto pertaining to the
subject matter hereof, and any and all other written or oral
agreements existing between the parties hereto are expressly
cancelled; (b) Only an instrument in writing executed by the
parties hereto may amend this Agreement; (c) The failure of any
party to insist upon strict performance of any of the provisions of
this Agreement shall not be construed as a waiver
of any subsequent default of the same or similar
nature, or any other nature; (d) This Agreement may be executed in
two (2) or more counterparts, each of which shall be deemed an
original and all of which together shall: constitute one (1)
instrument; (e) This Agreement shall be binding on and inure to the
benefit of the parties hereto and their respective successors and
permitted assigns. The rights and obligations of the parties under
this Agreement may not be assigned or delegated without the prior
written consent of both parties, and any purported assignment
without such written consent shall be null and
void.
[The
remainder of this page is intentionally left blank.]
-4-
If the
foregoing correctly sets forth the understanding between CP and the
Company, please so indicate in the space provided below for that
purpose within five business (5) days of the date hereof or this
Agreement shall be withdrawn and become null and void. The
undersigned parties hereto have caused this Agreement to be duly
executed by their authorized representatives, pursuant to corporate
board approval and intend to be legally bound.
Corinthian Partners, LLC
By:
Date:
Name:
Principal
Youngevity Corporation
By:
Date:
Xxxx
Xxxxxxx
President
and CFO
-5-
EXHIBIT
A
INDEMNIFICATION AND
CONTRIBUTION
For
purposes of this Exhibit
A unless the context otherwise requires, "CP" shall include
CP, any affiliated entity, and each of their respective officers,
directors, employees, partners and controlling persons within the
meaning of the federal securities laws and the successors, assigns,
heirs and personal representatives of the foregoing persons and the
“Company shall include the Company, any affiliated entity,
and each of their respective officers, directors, employees,
partners and controlling persons within the meaning of the federal
securities laws and the successors, assigns, heirs and personal
representatives of the foregoing persons . Any capitalized terms
used and not otherwise defined in this Exhibit A shall have the
meanings ascribed to such capitalized terms in the agreement (the
“Agreement”) to which this Exhibit A is
attached.
The
Company shall indemnify, defend and hold CP harmless against any
losses, claims, damages, liabilities, costs and expenses
(including, without limitation, any legal or other expenses
incurred in connection with investigating, preparing to defend or
defending against any action, claim, suit or proceeding, whether
commenced or threatened (collectively, “Claims”) and
whether or not CP is a party thereto, or in appearing or preparing
for appearance as a witness, based upon, relating to or arising out
of or in connection with advice or services rendered or to be
rendered pursuant to the Agreement, the transaction contemplated
thereby or CP's actions or inactions in connection with any such
advice, services or transaction (including, but not limited to, any
liability arising out of (i) any misstatement or alleged
misstatement of a material fact in any offering materials and (ii)
any omission or alleged omission from any offering materials,
including, without limitation of a ,material fact necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading}, except to the extent that any such
loss, claim, damage, liability, cost or expense results solely from
the gross negligence or bad
faith of CP in performing the services which are the subject of the
Agreement. If for any reason the foregoing indemnification is
unavailable to CP or insufficient to hold it harmless, then the
Company shall contribute to the amount paid or payable by CP as a
result of suct1 loss, claim, damage or liability in such proportion
as is appropriate to reflect the relative benefits received by the
Company and its stockholders on the one hand and CP on the other
hand, or, if such allocation is not permitted by applicable law,
not only such relative benefits but also the relative fault of the
Company and CP, as well as any relevant equitable considerations;
provided, however, that, to the extent permitted by applicable law,
CP shall not be responsible for amounts which in the aggregate are
in excess of the amount of all fees actually received from the
Company in connection with the engagement. No person guilty of
fraudulent misrepresentation (as such term has been interpreted
under Section 11(f) of the Securities Act of 1933) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Relative benefits to CP, on the one
hand, and the Company and its stockholders, on the other hand, with
respect to the engagement shall be deemed to be in the same
proportion as (i) the total value paid or proposed to be paid or
received or proposed to be received by the Company or its
stockholders, as the case may be, pursuant to the potential
transaction., whether or not consummated, contemplated by the
engagement bears to (ii) all fees paid to CP by the Company in
connection with the engagement. CP shall not have any liability to
the Company in connection with the engagement, except to the extent
of its gross negligence or willful misconduct.
CP
shall indemnify, defend and hold the Company harmless against any
Claims and whether or not the Company is a party thereto, or in
appearing or preparing for appearance as a witness, based upon,
relating to or arising out of or in connection with a breach of the
terms of the Agreement by CP or CP’s gross negligence or
willful misconduct. If for any reason the foregoing indemnification
is unavailable to the Company or insufficient to hold it harmless,
then CP shall contribute to the amount paid or payable by the
Company as a result of such loss, claim, damage or liability in
such proportion as is appropriate to reflect the relative benefits
received by the Company and its stockholders on the one hand and CP
on the other hand, or, if such allocation is not permitted by
applicable law, not only such relative benefits but also the
relative fault of the Company and CP, as well as any relevant
equitable considerations; provided, however, that, to the extent
permitted by applicable law, the Company shall not be responsible
for amounts which in the aggregate are in excess of the amount of
all fees actually paid by the Company in connection with the
engagement. No person guilty of fraudulent misrepresentation (as
such term has been interpreted under Section 11(f) of the
Securities Act of 1933) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
Relative benefits to CP, on the one hand, and the Company and its
stockholders, on the other hand, with respect to the engagement
shall be deemed to be in the same proportion as (i) the total value
paid or proposed to be paid or received or proposed to be received
by the Company or its stockholders, as the case may be, pursuant to
the potential transaction., whether or not consummated,
contemplated by the engagement bears to (ii) all fees paid to CP by
the Company in connection with the engagement. CP shall not have
any liability to the Company in connection with the engagement,
except to the extent of its gross negligence or willful
misconduct.
The
indemnifying party also agrees to promptly upon demand reimburse
the indemnified party for its reasonable legal and other expenses
reasonably incurred by it for one legal counsel in connection with
investigating, preparing to defend, or defending any lawsuits,
investigations, claims or other proceedings in connection with any
matter referred to in or otherwise contemplated by the Agreement;
provided, however, that in the event a final judicial determination
is made to the effect that the indemnified party is not entitled to
indemnification hereunder, the indemnified party will remit to the
indemnifying party any amounts that have been so
reimbursed.
No
party shall not be liable for any settlement of any action, claim,
suit or proceeding (or for any related losses, damages,
liabilities, costs or expenses) if such settlement is effectuated
without its written consent, which shall not be unreasonably
withheld. Each party further agrees that it will not settle or
compromise or consent to the entry of any judgment in any pending
or threatened action, claim, suit or proceeding in respect of which
Indemnification or contribution may be sought hereunder (whether or
not it is a party therein) unless the other party has obtained an
unconditional release of such party, from all liability arising
therefrom. The reimbursement, indemnity and contribution
obligations of the parties set forth in this Agreement shall be in
addition to a:ny liability which such party may otherwise have to
the other party.
Any
Indemnified Persons that are not signatories to this Agreement
shall be deemed to be third party beneficiaries of this
Agreement.
-6-
