Exhibit 10.43
 

LOAN AND SECURITY AGREEMENT
("Agreement")
 
 
THIS LOAN AND SECURITY AGREEMENT AMENDS AND RESTATES HAT CERTAIN FACTORING
AGREEMENT DATED FEBRUARY 12, 2010, AS AMENDED FROM TIME TO TIME, BETWEEN
RESTMARK BANK, A MICHIGAN BANKING CORPORATION ("CRESTMARK") AND CLR ROASTERS,
LLC, A FLORIDA LIMITED LIABILITY COMPANY ("BORROWER") AND ALL LIENS AND SECURITY
INTERESTS GRANTED TO CRESTMARK BY BORROWER SHALL CONTINUE IN FULL FORCE AND
EFFECT WITHOUT ANY INTERRUPTION.
 
This Agreement dated 11-16, 2017, is an agreement between CRESTMARK BANK, a
Michigan banking corporation ("Crestmark"), and CLR ROASTERS, LLC, a Florida
limited liability company ("Borrower"). In this Agreement, Crestmark and
Borrower are collectively the "Parties". Any person who guarantees the
obligations of Borrower (each a "Guarantor") is required to sign this Agreement.
The Parties have the addresses shown on the schedule ("Schedule") which is
attached to this Agreement and is a part of this Agreement. These are the
addresses of the Parties for all purposes and may be changed by one party giving
notice to the other party in writing of the new address.
 
1. PURPOSE. The purpose of this Agreement, including the Schedule, is to set
forth the terms and conditions of the loan from Crestmark to Borrower ("Loan")
and the obligations of Borrower. The Schedule is part of this Agreement. The
promissory note ("Note") to be signed by Borrower, any guaranty(s), and any
other documents now or hereafter signed by any of the Parties in connection with
this Agreement, the Loan or any document issued by Crestmark or the bank holding
the lockbox ("Lockbox Bank"), including subordination agreements or
intercreditor agreements, are also all part of this Agreement. All of the
documents together are referred to collectively as the "Loan Documents".
 
2.            
LOAN; LOAN ADVANCES.
 
A. Any disbursement of money or advance of credit y Crestmark, including but not
limited to amounts advanced for the payment of interest, fees, expenses and
amounts necessary to protect, maintain and preserve Crestmark's Collateral under
the Loan Documents ("Protective Disbursements"), is referred to collectively as
an "Advance". Whether Crestmark makes an Advance is in Crestmark's sole
discretion. If an Advance is made, it will be made in accordance with the
advance formula set forth in the Schedule ("Advance Formula"); but not at any
time to exceed the maximum amount set forth on the Schedule ("Maximum Amount").
Crestmark may choose to make Protective Disbursements in excess of the Maximum
Amount or Advance Formula in its sole discretion. Each time Crestmark makes an
Advance, including a Protective Disbursement, the Advance will be debited
against an account in Borrower's name on Crestmark's books ("Loan Account"), and
each payment will be credited against the Loan Account in the manner described
in this Agreement.
 
B. The total amount Borrower owes to Crestmark will be the aggregate of the
Advances made by Crestmark, the expenses and fees set forth in the Schedule and
any and all costs incurred by Crestmark (including reasonable attorney's fees),
and interest at the rate set forth in the Note on all amounts advanced (together
with all other obligations of Borrower under the Loan Documents, the
"Obligations" or "Indebtedness").

 
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C. Borrower must repay all Advances with respect to the Loan with interest,
which is due monthly as specified in the Note, along with all other fees and
expenses of Crestmark set forth herein or in the Schedule. Crestmark may in its
sole discretion collect any Obligations due Crestmark by (i) directly applying
any funds in the Lockbox Account, as defined in paragraph 5 below, to the
Obligations (ii) directly applying funds from any reserve to the Obligations,
(iii) collecting the Obligations directly from Borrower; or (iv) otherwise
collecting the Obligations. Borrower understands that all the Obligations are
repayable at any time in full or in part upon demand by Crestmark. Crestmark may
make demand for partial payments and such demand will not preclude Crestmark
from demanding payment in full at any time.
 
D. Borrower must comply with its representations, promises, covenants and
reporting requirements set forth in this Agreement, in the Schedule and in the
other Loan Documents. Borrower's failure to do any of the foregoing is a default
("Default"). The demand nature of the Obligations is not modified by reference
to a Default in this Agreement or the other Loan Documents and any reference to
a Default is for the purpose of permitting Crestmark to exercise its remedies
for Default, including charging interest at the Extra Rate provided in the Note.
 
E. The aggregate amount of all Advances, plus the expenses and fees set forth in
the Schedule, any and all costs incurred by Crestmark (including reasonable
attorney's fees), and interest at the rate set forth in the Note on all amounts
advanced (the "Loan Amount"), may not, at any time, exceed the Maximum Amount or
the Advance Formula, and Borrower understands that if at any time it should owe
more to Crestmark than the lesser of the Maximum Amount or the Advance Formula
(the "Overformula") it must repay that amount immediately, whether or not demand
to repay the whole of the Obligations has been made. Protective Disbursements
must be immediately repaid whether or not an Overformula exists.
 
3.  RESERVES. If Crestmark believes in its sole discretion that the prospect for
repayment of the Obligations is impaired or that its Collateral margin is
insufficient, Crestmark may establish cash reserves and credit balances to
protect its interests and the repayment of the Obligations. The reserve may be
established by reducing the Advance Formula to achieve the target reserve level,
withholding monies due Borrower from any payments Crestmark receives, from a
cash payment from Borrower or any other method Crestmark chooses. Any money in a
reserve account, whether or not it is a cash reserve, will not earn interest for
Borrower, and Crestmark may apply the funds in the reserve account to reduce the
Obligations at any time Crestmark elects.
 
4. FEES AND EXPENSES. In connection with the Loan there are several types of
fees that may be charged and Borrower may be required to maintain a minimum Loan
balance. Such fees and requirements are set forth in the Schedule. In addition,
all expenses of every kind incurred by Crestmark in connection with the Loan,
any Advance, collection of the Obligations, inspection, and examination are to
be paid by Borrower.
 
5. LOCKBOX. Borrower must immediately notify all persons who are obligated on
accounts ("Account Debtors") to direct all Account Debtors and any other person
or party that is liable to Borrower (collectively a "Debtor") to remit all
payments due Borrower to the lock box address or pursuant to the wire transfer
or ACH instructions set forth in the Schedule (the "Lockbox Account"). The remit
to address on all documents related to the accounts, including invoices,
purchase orders, or contracts ("Documents") must be the Lockbox Account. At
Crestmark's request, all Documents must be marked by Borrower to show assignment
to Crestmark, and Borrower must notify each Account Debtor by mail that the
Account has been assigned to Crestmark and that all payments on the Account,
whether made by mail or electronically or otherwise must be made payable to
Borrower or Crestmark, at Crestmark's sole discretion, to the Lockbox Account or
other address provided by Crestmark in writing. The language used in such
notices shall be approved by Crestmark in writing. Crestmark may at any time and
from time to time, and at its sole discretion, notify any Debtor or third-party
payee to make payments payable directly to Crestmark or to notify Debtor of the
assignment to Crestmark. All expenses for notification of each Account Debtor
will be paid by Borrower.
 
 
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If notwithstanding the notice to Debtors, Borrower receives any funds from a
Debtor, including any cash, checks, drafts or wire transfers from the
collection, enforcement, sale or other disposition of the Collateral (defined
below), whether derived in the ordinary course of business or not, or if
Borrower receives any proceeds of insurance, tax refunds or any and all other
funds of any kind, Borrower shall hold such funds in trust for Crestmark, shall
not mix such funds received with any other funds, and shall immediately deposit
such funds in the Lockbox Account in the form received. That means if the funds
are received by mail, the Debtor checks will be sent to the Lockbox Account
uncashed, and if the funds are received electronically, the funds will be
transferred immediately to the Lockbox Account electronically. Crestmark will
have sole possession and control over the Lockbox Account. The Lockbox Bank will
process all deposits and Borrower has no right to the Lockbox Account, it
belongs to Crestmark. Crestmark is the owner of all deposits in the Lockbox
Account, and has no duty as to collection or protection of funds as long as it
is not grossly negligent or commits actual fraud. All expenses plus any
applicable administration and servicing fees of the Lockbox Account will be paid
by Borrower.
 
6. LOAN ACCOUNT. All of the Obligations which are owed by Borrower will be shown
in the Loan Account and Borrower will receive a monthly statement either by
mail, electronically or via access to the Crestmark online system at Crestmark's
sole discretion. The statement is binding on Borrower unless Borrower provides a
written objection to Crestmark that is actually received by Crestmark within
fifteen (15) business days of the time the statement is provided or made
available to Borrower.
 
7. PAYMENTS. Should a check or other credit instrument not be collected after
Borrower has been given credit for such payment, then the credit will be
reversed and a fee charged at Crestmark's then standard rate. Crestmark, at its
sole discretion, may establish reserves as set forth above or not apply a
payment that it reasonably believes may be returned unpaid for any reason or
disgorged due to a preference claim or garnishment, and in such event the
Maintenance Fee (as defined in the Schedule) will still be payable. In the event
that any payment received by Crestmark is sought to be recovered by or on behalf
of the payer (including a trustee in bankruptcy or assignee for the benefit of
creditors), then Borrower agrees to immediately reimburse Crestmark on demand
for any amount so recovered and all of Crestmark's expenses in connection with
any such proceeding, including reasonable attorneys' fees. This provision shall
survive termination of this Agreement. Any payments received by Crestmark shall
be applied to the Obligations in whatever order Crestmark determines in its
reasonable discretion.
 
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8.            
SECURITYINTEREST.
 
A. Borrower grants to Crestmark a security interest in all of its assets, now
existing or hereafter arising, wherever located including all Accounts, Goods,
Inventory, Equipment, Chattel Paper, Instruments, Investment Property,
specifically identified Commercial Tort Claims, Documents, Deposit Accounts,
Letter of Credit Rights, General Intangibles, Contract Rights, customer lists,
furniture and fixtures, books and records and supporting obligations for any of
the foregoing, and all Proceeds of the foregoing (the "Collateral"), to secure
repayment of the Obligations ("Security Interest"). The Collateral also includes
all monies on deposit with Crestmark, or on deposit in the Lockbox Account. All
capitalized terms used in this Section SA., which are not otherwise defined
shall have the meanings assigned to them in the Uniform Commercial Code as
adopted in the State of Michigan the "UCC"). Without limiting the forgoing,
"Accounts" will also mean and include any and all other forms of obligations now
owed or hereafter arising or acquired by the Borrower evidencing any obligation
for payment for goods of any kind, nature, or description sold or leased or
services rendered, and all proceeds of any of the foregoing.
 
B. Borrower gives Crestmark all of the rights of a secured party under the UCC.
Borrower grants Crestmark the authority to file all appropriate documentation
for Crestmark to perfect its security interest in the Collateral, including a
UCC-1 financing statement listing the Collateral as "All assets of the Debtor,
now existing and hereafter arising, wherever located," or similar terms, as well
as UCC-3 amendments as may be required from time to time. All expenses of
Crestmark relating to searching, filing or protecting the Security Interest are
part of the Obligations.
 
C. The Security Interest gives Crestmark rights with respect to the Collateral
and the Security Interest and this Agreement imposes duties upon Borrower which
relate to the Collateral. Some of the rights and duties are: (i) the right of
Crestmark at any time to notify any persons who may hold any part of the
Collateral, such as Account Debtors and other debtors, of Crestmark's Security
Interest. Borrower understands that Crestmark may verify Accounts with the
Account Debtors; (ii) Borrower must cooperate with Crestmark in obtaining
control of any Collateral in the possession of third persons, particularly
Collateral consisting of deposit accounts, investment property, letter of credit
rights or other Collateral which is evidenced by electronic entries; (iii)
except for the right of Borrower to sell its inventory in the ordinary course of
business, Borrower shall not sell or transfer any of the Collateral or grant any
other security interest in the Collateral, except as Crestmark may specifically
agree to in writing. Borrower remains liable to perform all of its obligations
with respect to the Collateral such as the recognition of any warranties in
inventory sold and Crestmark is under no responsibility to perform any of the
obligations of Borrower; and (iv) Borrower must notify Crestmark immediately if
it knows that any Account Debtor disputes an Account whether or not such
disputes are deemed valid by Borrower.
 
9. POWER OF ATTORNEY. Borrower irrevocably appoints Crestmark, or any person(s)
designated by Crestmark, as its attorney-in-fact, which appointment is coupled
with an interest and shall remain in full force and effect until all Obligations
of Borrower to Crestmark have been fully satisfied and discharged, with full
power, at Borrower's sole expense, to exercise at any time in Crestmark's
reasonable discretion all or any of the following powers:
 
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A. Receive, take, endorse, assign, deliver, accept and deposit, in the name of
Crestmark or Borrower, any and all cash, checks, commercial paper, drafts,
remittances and other instruments and documents relating to the Collateral or
the proceeds thereof.
 
B. Change Borrower's address on all invoices and statements of Account mailed or
to be mailed to Borrower's customers and to substitute thereon the address
designated by Crestmark, to place legends on all invoices and statements of
Account mailed or to be mailed to Borrower's customers, and to receive and open
all mail addressed to Borrower, or to Borrower's trade name at Crestmark's
address, or any other designated address.
 
C. Upon and after the occurrence of a Default, to change the address for
delivery of Borrower's mail to Crestmark's or an address designated by
Crestmark. Borrower specifically authorizes Crestmark to sign any forms on
behalf of Borrower to affect this change with the United States Postal Service
or any third party and requests such change to be accepted.
 
D. Upon and after the occurrence of a Default, to take or bring, in the name of
Crestmark or Borrower, all steps, actions, suits or proceedings deemed by
Crestmark necessary or desirable to effect collection of or other realization
upon any Collateral.
 
E. Execute on behalf of Borrower any UCC-1 and/or UCC-3 Financing Statement(s)
and/or any notices or other documents necessary or desirable to carry out the
purpose and intent of this Agreement, and to do any and all things reasonably
necessary and proper to carry out the purpose and intent of this Agreement.
 
F. To transfer any lockboxes belonging to Borrower to Crestmark at Crestmark's
sole discretion.
 
G.            
To initiate ACH transfers from Borrower's depository accounts.
 
H. To endorse and take any action with respect to bills of lading covering any
inventory.
 
I. Upon and after a Default, or at any time in the event that Borrower fails to
do so within a reasonable time, execute, file and serve, in its own name or in
the name of Borrower, mechanics lien or similar notices, or claims under any
payment or performance bond for the benefit of Borrower.
 
J. Upon and after a Default, or at any time in the event that Borrower fails to
do so within a reasonable time, pay any sums necessary to discharge any lien or
encumbrance on the Collateral, which sums shall be included as Obligations
hereunder, and which sums shall accrue interest at the Extra Rate until paid in
full.
 
10. REPRESENTATIONS. Borrower makes the following representations and warranties
to Crestmark and such representations and warranties must be true at all times
until the Obligations are paid in full. If Borrower learns that a representation
and warranty once made is no longer true, it has the duty to immediately notify
Crestmark in writing:
 
A. Borrower is in good standing under the laws of the state of its organization
and is authorized to conduct business in any state that it conducts business.
Borrower has the power
 

 
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and authority to enter into this Agreement, and the persons signing this
Agreement and all persons who sign any documents with Crestmark have the
appropriate authority. Borrower's organization identification number, state of
organization, and addresses where it conducts business are as shown on the
Schedule.
 
B.            
Borrower's entry into the Loan Documents do not violate any agreement which
 
Borrower has or which binds Borrower.
 
C.            
The Loan Documents are fully enforceable against Borrower and the Collateral.
D.There are no litigation or criminal charges pending or threatened against
Borrower or Guarantor and neither Borrower nor Guarantor are in default of any
order or
 
judgment of any court or any governmental agency of any kind. There are no
unsatisfied liens or judgments pending against Borrower in any jurisdiction
except as shown on the Schedule.
 
E. The financial information furnished by Borrower and Guarantor to Crestmark
has been prepared in accordance with generally accepted accounting principles,
all financial statements are true and correct, and any projections of the
business operations of Borrower that have been given or will be given to
Crestmark in the future will be based upon Borrower's reasonable assumptions and
estimates.
 
F. Borrower is the owner of all of the Collateral and there are no other liens
or claims against the Collateral, except the Security Interest of Crestmark or
as shown on the Schedule.
 
G. All of the Collateral is personal property and none of the Collateral will be
permanently affixed to real estate.
 
H. Borrower has filed and will file all federal, state, local and foreign tax
returns that it is required to file and has paid and will pay all taxes and all
other governmental charges as they become due.
 
I. Borrower is able to pay its debts as they become due and has sufficient
capital to carry on its business. Borrower's obligations under this Agreement
and the Loan Documents, including the obligation to repay the Loan and the grant
of the Security Interest, do not render Borrower insolvent.
 
J. Borrower only uses the fictitious names, d/b/a's, tradenames and tradestyles
set forth on the Schedule (collectively the "Tradenames"), and Borrower
certifies that all sales and any and all business done in the name of the
Tradenames are the sales and business of Borrower. Any and all checks,
remittances or other payments received in the name of any of the Tradenames are
Borrower's sole and exclusive property, and are subject to Crestmark's security
interest hereunder. Any and all authority given to Crestmark by Borrower in this
Agreement or elsewhere to endorse Borrower's name on any checks, negotiable
instruments or other remittances extends with equal and full force and effect to
any checks, negotiable instruments, and other remittances received in the name
of any Tradename.
 
K. All Accounts assigned to Crestmark by Borrower are and will at all times be
bonafide accounts arising from the sale of inventory or providing services, and
are not subject

 
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to discounts, deductions, allowances, contra items, offset or counterclaim and
are free and clear of all encumbrances of any kind whatsoever, except as
disclosed to Crestmark in writing and approved by Crestmark in writing.
 
L. Borrower's assignment of any Accounts to Crestmark pursuant to this Agreement
will not at any time violate any federal, state and/or local law, rule or
regulation, court or other governmental order or decree or terms of any contract
relating to such Accounts.
 
M. Borrower possesses all necessary trademarks, trade names, copyrights,
patents, patent rights and licenses to conduct its business as now operated,
without any known conflict with any trademarks, trade names, copyrights, patents
and license rights of any other person or entity.
 
N. Borrower's legal name as of the date hereof as it appears in its official
filing with its state of organization is as set forth in the opening paragraph
of this Agreement. Borrower has not organized another entity or Tradename using
Borrower's name or Tradename as set forth herein in any other jurisdiction.
 
O.            
As to all of Borrower's Inventory and Equipment:
 
i. The Inventory and Equipment are currently located only at the locations
identified on the Schedule, or such other locations as consented to by Crestmark
in writing;
 
ii. All Inventory is now and at all times hereafter shall be of good and
merchantable quality, free from defects, except as disclosed to Crestmark in
writing;
 
111. The Inventory and Equipment are and shall remain free from all liens,
claims, encumbrances, and security interests (except as held by Crestmark, and
except as identified on the Schedule).
 
iv. The Inventory is not now stored with a bailee, warehouseman or similar party
provided however, at Crestmark's sole discretion, such Inventory may be deemed
eligible upon such party entering into a waiver letter in form satisfactory to
Crestmark.
 
11.            
BORROWER'S
PROMISES.                                                                
Borrower makes the following promises to
 
Crestmark and these promises are effective until the Obligations are fully paid:
 
 
A. To pay all Obligations when due and perform all terms, conditions and
obligations of the Loan Documents.
 
B. To permit Crestmark, or its representatives, access to the Collateral on
Borrower's premises or wherever collateral is located and to Borrower's computer
systems, books of account and financial records. Borrower will pay the cost of
Field Examinations as specified in the Schedule.
 
C. To notify Crestmark promptly of any litigation, administrative or tax
proceeding or other action threatened or instituted against Borrower or
Guarantor or its property, or of any other material matter which may adversely
affect Borrower's financial condition. The amount

 
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of claims as to which Borrower must notify Crestmark is specified in the
Schedule as the
 
"Borrower Claims Threshold".
 
D. To pay when due all taxes, assessments and governmental charges, provided
that Borrower has the right to contest the same as long as it has a cash reserve
with Crestmark in an amount as determined by Crestmark in its sole discretion.
 
E. To comply with the Financial Covenants described in the Schedule (if
applicable).
 
F. To maintain insurance on its business activities in such amount and in such
form as Crestmark may from time to time require, and with respect to such
insurance if so designated, Crestmark shall be named as "Lender Loss Payee"
under the policy and receive evidence of the insurance. All insurance which
protects Crestmark shall have at least a 30-day notice to Crestmark prior to any
cancellation. With respect to the insurance, Borrower appoints Crestmark as its
attorney-in-fact to negotiate any and all claims under all insurance policies
and Crestmark also has the power to negotiate any payments on the insurance
policies. Required insurance is listed on the Schedule.
 
G. To comply with all laws, ordinances and regulations or other requirements of
any governmental authority or agency applicable to Borrower's business.
 
H. To maintain and preserve all Collateral in good repair, working order and
condition, and with respect to accounts, pursue collections thereof.
 
I. To provide Crestmark with evidence of ownership of any Collateral upon the
request of Crestmark.
 
J.            
To maintain a Loan Amount balance which shall not exceed the sum of Eligible
 
Collateral times the corresponding Advance Rate.
 
12.           NEGATIVE COVENANTS. Borrower agrees until the Obligations are paid
in full, it will not without prior written consent of Crestmark:
 
A. Change its state of organization or its name, or move its executive office or
at any time adopt any assumed name without giving Crestmark at least 30 days
prior written notice.
 
B. Declare or pay any dividend or make any other distribution with regard to its
equity or purchase or retire any of its equity without Crestmark's prior written
consent, provided if it is taxed as an S Corporation or other "pass through"
entity, Borrower may prior to a Default distribute profits to its equity holders
in an amount necessary to enable such holders to pay personal, state and federal
taxes directly attributable to the profits earned by Borrower for such year.
 
C. Obtain any loan or guaranty or assume any obligation or liability, whether as
borrower, guarantor, surety, indemnitor or otherwise (a "Borrower Obligation")
(i) that would result in or create a Default, or (ii) that together with all
other existing Borrower Obligations would exceed the "Borrower Obligation
Threshold" set forth in the Schedule, without
 

 
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Crestmark's prior written consent, provided, however, that Borrower may be the
borrower under the loans described in those Subordination Agreement(s) that may
be entered into in favor of Crestmark, upon terms and conditions acceptable to
Crestmark, and the Borrower may make such payments, if any, as permitted under
the terms and conditions of such Subordination Agreements.
 
D. Enter into any transaction with its equity holders or any affiliates of
Borrower except on terms at least as favorable as would be usual and customary
in similar transactions if the person with whom the transaction is entered into
was not related to Borrower.
 
E. Release, redeem, purchase, or acquire any of its equity interests without the
prior written consent of Crestmark.
 
F.            
Default in the payment of any debt to any other person.
 
G. Suffer or permit any judgment, decree or order not fully covered by insurance
to be entered against Borrower or a Guarantor in an aggregate amount in excess
of the "Claims Threshold" set forth in the Schedule, or permit or suffer any
warrant or attachment to be filed against Borrower, any Guarantor, or against
any property or asset of Borrower or Guarantor.
 
H. Transfer the ownership of any interest in Borrower without the prior written
consent of Crestmark which shall not be unreasonably withheld.
 
I. Sell any of the Collateral outside the normal course of its business without
the prior written consent of Crestmark.
 
J. Purchase the stock or assets of any other entity without the prior written
consent of Crestmark.
 
K. Make any loans, advances, intercompany transfers or cash flow between the
Borrower and any officer, director, employee, shareholder, subsidiary, related
entity or affiliate of the Borrower or with any company that has common
shareholders, officers or directors with the Borrower.
 
13. FINANCIAL REPORTS. Borrower promises that until the Obligations are fully
paid and this Agreement is terminated, it will keep its books and records in a
manner satisfactory to Crestmark and Crestmark will have the right at any time
to verify any of the Collateral, documentation or books and records of Borrower
in whatever manner and as often as Crestmark deems necessary. Borrower will
permit Crestmark, or its representatives, access to the Collateral and
Borrower's premises and to Borrower's computer systems, books of account and
financial records. Borrower will furnish to Crestmark the financial reports
identified on the Schedule, certified to by the president or chief financial
officer of Borrower and Borrower's certified public accountant, if applicable.
All financial reports will be prepared in accordance with generally acceptable
accounting principles and will be true and accurate.
 
14. CRESTMARK'S REMEDIES. Crestmark has all the remedies available at law or in
equity (including those under the UCC) in the event of a Default or if Borrower
fails to pay the Obligations on demand, including but not limited to the
following: to charge the Extra Rate;to notify Account Debtors to make the
payments directly to Crestmark; to settle or compromise

 
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any disputed Account, sue on any Account and make any agreement to deal with the
Accounts as if it were the owner; to offset any of Borrower's or Guarantor's
funds under the control of Crestmark against the Obligations; and to require
Borrower to gather up the Collateral and make it available to Crestmark for
Crestmark to conduct public or private UCC foreclosure sales. Borrower grants to
Crestmark a license or other right to use, without charge, Borrower's labels,
patents, copyrights, trademarks, rights of use of any name, trade secrets,
tradenames and advertising materials, or any property of a similar nature, as it
pertains to the Collateral, in completing production of, advertising for sale
and selling any Collateral, and Borrower's rights under all licenses and
franchise agreements shall inure to Crestmark's benefit. If Crestmark should
proceed against the Collateral and sell any of the Collateral on credit,
Borrower will be credited on the Obligations only with the amount actually
received by Crestmark and Borrower waives any and all provisions as to notice or
a particular method of sale of any of the Collateral. Borrower will pay all
expenses in connection with the assembly or sale of the Collateral. Crestmark
does not have to incur its own expenses in realizing upon the Collateral, but
all the expenses are for the account of Borrower. Borrower recognizes that at no
time is Crestmark its agent in dealing with the Collateral, but Crestmark acts
only in its own interest.
 
15. CUMULATIVE RIGHTS. Crestmark's rights and remedies under this Agreementand
all other agreements shall be cumulative. Crestmark shall have all other rights
and remedies not inconsistent herewith as provided under the UCC, by law, or in
equity. No exercise by Crestmark of one right or remedy shall be deemed an
election, and no waiver by Crestmark of any Default on Borrower's part shall be
deemed a continuing waiver. No delay by Crestmark shall constitute a waiver,
election or acquiescence by it.
 
16. LENDER ACTIONS. To the extent applicable law may impose duties on Crestmark
to exercise remedies in a commercially reasonable manner, Borrower agrees that
it is not commercially unreasonable for Crestmark: to fail to exercise remedies
against any Collateral or any particular Account Debtor; to proceed against
Account Debtors either directly or through collection agencies; to advertise
disposition of Collateral through publications or media of general circulation;
to hire professional auctioneers to dispose of Collateral; to dispose of
Collateral in wholesale or retail markets; to disclaim warranties with respect
to Collateral; or to obtain services of attorneys or other professionals. The
foregoing is not an exhaustive list and nothing contained in the foregoing shall
be construed to grant any rights to Borrower or to impose any duties on
Crestmark that would not have been granted or imposed by this Agreement or by
applicable law in the absence of this Section 1 6. Borrower agrees that under no
circumstances is Crestmark the agent or representative of Borrower.
 
17. APPLICATION OF PROCEEDS. Once collection efforts are commenced by Crestmark,
any proceeds of sale or disposition of Collateral may be applied by Crestmark
first to expenses authorized by this Agreement, including Crestmark's reasonable
attorneys' fees, which Borrower must pay, and the balance to payment of the
Obligations in such manner as Crestmark may elect. Borrower and Guarantor remain
liable for any deficiency.
 
18. NOTICES. Any notice is effective by either party if sent in writing or
facsimile with confirmation of receipt or by certified mail or personal delivery
or expedited mail services to the addresses shown on the Schedule. In addition,
the Borrower consents to Crestmark sending the Borrower other communications via
electronic mail and/or facsimile.

 
-10-

 
 
19.            
MISCELLANEOUS PROVISIONS.
 
A. This Agreement is binding upon and is for the benefit of Borrower and
Crestmark, and their respective successors and assigns. However, under no
circumstances may Borrower assign this Agreement or its rights and duties
hereunder. Crestmark may assign this Agreement and its rights under the Loan
Documents and Borrower will make payments to any such assignee if so directed.
 
B. Crestmark has the right at any time to assign, transfer, negotiate or sell
participations in this Agreement or the Obligations or the rights of Crestmark
hereunder. In connection with any assignment, Borrower consents to disclosure of
any and all books, records, files, Loan Documents and all other documents in the
possession or under the control of Crestmark.
 
C. No delay or failure of Crestmark in exercising any right or remedy will
affect such right or remedy. No delay or failure of Crestmark to demand strict
adherence to the terms of this Agreement will be deemed to waive Crestmark's
rights to demand such adherence at any time in the future.
 
D. The term "including" means "including, without limitation", and the term
"includes" means "includes, without limitation". The word "will" shall be
construed to have the same meaning and effect as the word "shall." The
definitions of terms in this Agreement shall apply equally to the singular and
plural forms of the terms defined.
 
E. This Agreement and the other Loan Documents will be interpreted and
determined under the laws of the State of Michigan without any regard to any
conflict of laws provisions.
 
F. Borrower, at Crestmark's request, will make, execute and acknowledge any and
all further instruments or agreements necessary to carry out the intent of this
Agreement and the other Loan Documents.
 
G. This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if all signatures were upon the
same instrument. Delivery of an executed counterpart of the signature page to
this Agreement by facsimile or electronic mail shall be effective as delivery of
a manually executed counterpart of this Agreement, and any party delivering such
an executed counterpart of the signature page to this Agreement by facsimile or
electronic mail to any other party shall thereafter also promptly deliver a
manually executed counterpart of this Agreement to such other party, provided
that the failure to deliver such manually executed counterpart shall not affect
the validity, enforceability, or binding effect of this Agreement.
 
H. Neither Crestmark nor its affiliates, directors, officers, agents, attorneys
or employees are liable to Borrower or Guarantor or affiliates for any action
taken or omitted by it or any of them under the Loan Documents except for such
liability as may be imposed by law for gross negligence or actual fraud, and no
claim shall be made by Borrower or Guarantor or any of Borrower's affiliates,
directors, officers, agents, or employees for any special or consequential
damages or punitive damages arising out of, or related to the Loan Documents or
the transactions between the Parties.

 
-11-

 
 
I. This Agreement and the other Loan Documents represent the complete Agreement
between the parties with respect to the subject matter of this Agreement, and
there are no promises, undertakings, representations or warranties by Crestmark
relative to the subject matter of this Agreement not expressly set forth in this
Agreement or the other Loan Documents. This Agreement and the other Loan
Documents may be amended only in writing.
 
J. If any provision of this Agreement is in conflict with any law or statute or
is otherwise unenforceable, then the provision will be deemed null and void only
to the extent of such provision and the provision will be deemed severable and
the remainder of this Agreement shall be in full force and effect.
 
K. Any payment made to Crestmark by either Borrower or Guarantor which is
subsequently invalidated, declared fraudulent or preferential or otherwise set
aside under any bankruptcy, state, federal or equitablelaw, then to the extent
of such invalidity such payment will be deemed not to have been made and the
obligation will continue in full force and effect. This provision shall survive
termination of this Agreement.
 
L. No Lien Termination Without Release - In recognition of among other things,
Borrower's indemnification obligations and Crestmark's right to have its
attorneys' fees and other expenses incurred in connection with this Agreement
secured by the Collateral, notwithstanding payment in full of all Obligations by
Borrower, Crestmark shall not be required to record any terminations or
satisfactions of any of its liens on the Collateral unless and until Borrower
and all guarantors of its obligations have executed and delivered to Crestmark a
general release in a form acceptable to Crestmarkin its sole discretion.
Borrower understands that this provision constitutes a waiver of its rights
Borrower may have under §9-513 of the UCC.
 
M. Small Business Jobs Act Certification - Pursuant to Section 4107(d)(2) (the
"Section") of the Small Business Jobs Act of 2010, certification is required
from any business receiving a loan using funds received by the institution under
the Small Business Lending Act. As required by the Section, the Borrower hereby
certifies to Crestmark that the principals of Borrower and its affiliates have
not been convicted of, or pleaded nolo contendre to, a sex offense against a
minor (as such terms are defined in section 111 of the Sex Offender Registration
and Notification Act (42 U.S.C. 16911)).
 
The term "principals" is defined as follows: if a sole proprietorship, the
proprietor; if a partnership, each managing partner and each partner who is a
natural person and holds a 20% or more ownership interest in the partnership;
and if a corporation, limited liability company, association or a development
company, each director, each of the five most highly compensated executives or
officers of the entity, and each natural person who is a direct or indirect
holder of
20% or more of the ownership stock or stock equivalent of the entity.
 
N.            
USA Patriot Act Notification - The following notification is provided to
 
Borrower pursuant to Section 3265 ofthe USA Patriot Act of2001, 31 U.S.C.
Section 5318:
 
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the
government fight the funding of terrorism and money laundering activities,
Federal law requires all financial institutions to obtain, verify, and record
information that identifies each person or entity that

 
-12-

 
 
opens an account, including any deposit account, treasurymanagement account,
loan or other extension of credit. Crestmark may ask for the name, address, date
of birth, and other information that will allow us to identify all Borrowers,
principals and owners. Crestmark may also ask to see your driver's license or
other identifying documents.
 
20. RIGHT OF FIRST REFUSAL. Inconsideration of Crestmark entering into this
Agreement and making advances to Borrower, Borrower hereby agrees that it will,
within five (5) days of receipt, provide a copy of any proposal Jetter, term
sheet, letter of intent or commitment letter from any lender offering to
Borrower a refinance of the Obligations. Crestmark shall have the right of first
refusal to match the offer(s) of such other lender(s), and if Crestmark advises
Borrowerthat it intends to meet the financial and operational terms set forth in
such offers (but continuing to require that the loan be repayable on Demand) ,
Borrower will be obligated to enter into an amendment to this Agreement
extending the terms of this Agreement for at least the term proposed in such
other offer(s), and amending the financial and operational terms as set forth in
this Agreement. Notwithstanding the foregoing, Borrower recognizes that this
Agreement can only be terminated as provided herein. Failure of Crestmark to
meet the terms set forth in such letter of interest or commitment letter does
not relieve the Borrower from its obligations hereunder.
 
21. INDEMNIFICATION. Borrower hereby agrees to indemnify, defend and hold
Crestmark and its executive committees, parent affiliates, subsidiaries, agents,
directors, officers, participants, employees, agents and their successors and
assigns (collectively "Indemnified Parties") harmless against any and all
liabilities of any kind, nature or description and damages whether they are
direct, indirect or consequential, including attorney's fees and other
professionals and experts incurred or suffered directly or indirectly by
Indemnified Parties or asserted against Indemnified Parties by anyone whosoever,
including Borrower or Guarantor, which arise out of the Loan Documents or the
relationship and transaction between the Parties. This provision shall survive
the termination of this Agreement.
 
22. JOINT AND SEVERAL OBLIGATIONS. If more than one person or entity is named as
Borrower in this Agreement, all Obligations, representations, warranties,
covenants and indemnities of Borrower set forth herein and in the other Loan
Documents shall be the joint and several obligations of such persons and/or
entities.
 
23. JURISDICTION. BORROWER AND GUARANTOR AGREE THAT ANY ACTION TO ENFORCE
BORROWER'S OR GUARANTOR'S OBLIGATIONS TO CRESTMARK SHALL BE PROSECUTED EITHER IN
THE CIRCUIT COURT OF OAKLAND COUNTY MICHIGAN OR THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MICHIGAN (UNLESS CRESTMARK, IN ITS SOLE DISCRETION,
ELECTS SOME OTHER JURISDICTION), AND BORROWER AND GUARANTOR SUBMIT TO THE
JURISDICTION OF ANY SUCH COURT SELECTED BY CRESTMARK. BORROWER AND GUARANTOR
WAIVE ANY AND ALL RIGHTS TO CONTEST THE JURISDICTION AND VENUE OF ANY ACTION
BROUGHT IN THIS MATTER AND BORROWER AND GUARANTOR MAY BRING ANY ACTION AGAINST
CRESTMARK ONLY IN THE CIRCUIT COURT FOR THE COUNTY OF OAKLAND OR THE FEDERAL
COURT OR THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN.

 
-13-

 
 
24. WAIVER. ALL PARTIES, INCLUDING BORROWER AND GUARANTOR EACH KNOWINGLY AND
VOLUNTARILY WAIVE ANY CONSTITUTIONAL RIGHT TO A TRIAL BY JURY WITH RESPECT TO
ANY CLAIM, DISPUTE OR CONFLICT BETWEEN THE PARTIES OR UNDER THE LOAN DOCUMENTS
AND AGREE THAT ANY LITIGATION SHALL BE HEARD BY A COURT OF COMPETENT
JURISDICTION SITTING WITHOUT A JURY. BORROWER AND GUARANTOR ACKNOWLEDGE THAT
THEY HAVE HAD THE OPPORTUNITY TO REVIEW THE EFFECT OF THIS PROVISION WITH
COUNSEL OF THEIR CHOICE.
 
25. RELEASE. BORROWER AND GUARANTOR RELEASE AND FOREVER DISCHARGE CRESTMARK, ITS
AFFILIATES, OFFICERS, AGENTS, EMPLOYEES AND DIRECTORS FROM ANY AND ALL CLAIMS OF
ANY KIND WHATSOEVER FROM THE BEGINNING OF TIME TO DATE OF THIS AGREEMENT.
 
 
The parties have executed this Agreement as of the date and year first written
above.
 
 
 
 
 
 
 
 
 
 
(Signatures on next page)
 

 
 
-14-

 
 
 
 
CRESTMARK:
 
CRESTMARK BANK
a Michigan banking corporation
 

 
 
 
 
 
 
By:  
/s/  Gayle S. Finge
 
 
 
Gayle S. Finge
 
 
 
1st VP

 

 
 
 
BORROWER:
 
CLR ROASTERS, LLC
 a Florida limited liability company 

 
 
 
 
 
 
By:  
/s/  David Briskie
 
 
 
David Briskie
 
 
 
Manager
 

 
 
 
 
 
 
 
 
 
By:  
/s/ Ernesto G. Aguila
 
 
 
Ernesto G. Aguila
 
 
 
Manager
 

 
The undersigned Guarantor by signing this Agreement agrees it has been read and
understands the Agreement and Guarantor agrees to all of its terms.
 
 
 
GUARANTOR:
 
 YOUNGEVITY INTERNATIONAL, INC.
a Delaware corporation
 
 
 
 
 
 
By:  
/s/  Stephan R. Wallach
 
 
 
Stephan R. Wallach
 
 
 
CEO
 

 

 
 
 
GUARANTOR pursuant to the Personal Guaranty of even date:
 
 
 
 
 
 
By:  
/s/  Stephan R. Wallach
 
 
 
Stephan R. Wallach, individually
 
 
 

 

 
 
GUARANTOR pursuant to the Guaranty of Validity of even date:
Validity of even date:
 
 
 

GUARANTOR pursuant to the Guaranty of Validity of even date:   
 
 
 
 
 
 
By:  
/s/  NA
 
 
 
David Briskie, Individually
 
 
 
 
 

 
 
 

 
 
-15-

 

 
 
 
 
CRESTMARK:
 
CRESTMARK BANK
a Michigan banking corporation
 

 
 
 
 
 
Date
By:  
/s/ 
 
 
 

 
 
 

 

 
 
 
BORROWER:
 
CLR ROASTERS, LLC
 
The undersigned Guarantor by signing this Agreement agrees it has been read and
understands the Agreement and Guarantor agrees to all of its terms. 

 
 
 
 
 
 
By:  
/s/  David Briskie
 
 
 
David Briskie
 
 
 
Manager
 

 
 
 
 
 
 
 
 
 
By:  
/s/  Ernesto G. Aguila
 
 
 
Ernesto G. Aguila
 
 
 
Manager
 

 
 
 
The undersigned Guarantor by signing this Agreement agrees it has been read and
understands the Agreement and Guarantor agrees to all of its terms.
 
 
GUARANTOR:
 
YOUNGEVITY INTERNATIONAL, INC.
a Delaware corporation

 
 
 
 
 
 
By:  
/s/  Stephan R. Wallach
 
 
 
Stephan R. Wallach
 
 
 
CEO
 

 

 
 
GUARANTOR pursuant to the Personal Guaranty of even date:
 
 
 
 
 
 
By:  
/s/  Stephan R. Wallach
 
 
 
Stephan R. Wallach, individually
 
 
 

 

 
 
 
GUARANTOR pursuant to the Guaranty of
Validity of even date:
 

 
 
 
 
 
 
By:  
/s/  David Briskie
 
 
 
David Briskie, Individually
 
 
 

 

 
 
 
-16-

 
 
SCHEDULE TO LOAN AND SECURITY AGREEMENT
 
DATED:                               

11-16                           
, 2017
 
 
This Schedule is part of the Agreement between:
 
 
CRESTMARK BANK ("CRESTMARK")
 
5480 CORPORATE DRIVE, SUITE 350
 
TROY, MICHIGAN 48098
 
 
AND
 
 
CLR ROASTERS, LLC ("BORROWER")
 
2131 N.W. 72nd AVENUE MIAMI, FL 33122
 
 
The following paragraph numbers correspond to paragraph numbers contained in the
Agreement.
 
 
2.            
LOAN; .LOAN ADVANCES.
 
 
Advance Formula: Advances of the Loan may be measured against a percentage of
 
Eligible Accounts.
The Loan Amount may not exceed an amount which is the lesser of:
 
(a)           Four Million Five Hundred Thousand and 00/100 Dollars
($4,500,000.00) ("Maximum Amount"); or
 
(b)            
the sum of:
 
 
(i)            
up to eighty-five percent (85%) of Eligible Accounts; plus
 
(ii) 
the lesser of One Million and 00/100 Dollars ($1,000,000.00) or fifty percent
(50%) of Eligible Inventory or fifty percent (50%) of (i) above.
 
(subparagraphs (i)- (ii) are collectively the "Advance Formula"). Crestmark in
its sole discretion may raise or lower any percentage advance rate with
respect to the Advance Formula.
 
 
"Eligible Accounts" means and includes those Accounts, unless otherwise approved
by
 
Crestmark which:
 
 
(i)            
have been validly assigned to Crestmark;
 
(ii)            
strictly comply with all of Borrower's promises, warranties and representations
to
 
Crestmark;
 
(iii) contain payment terms of not greater than sixty (60) days from the date of
invoice, with the exception of: 1) H&H Coffee Export Group, which shall contain
payment terms of not greater than one hundred twenty (120) days from the date of
 

 
 
-17-

 
 
 
 
invoice, and 2) Rothfos, which shall contain payment terms of not greater than
ninety (90) days from the date of invoice;
(iv)            
are not older than ninety (90) days from the date of invoice, with the exception
of:
 
1) H&H Coffee Export Group, which shall be not older than one hundred thirty
five (135) days from the date of invoice, and 2) Rothfos, which shall be not
older than one hundred five (105) days from the date of invoice ("Past Due
Days"); and
(v)           are invoiced no later than ten (10) days from the last date of
service or sale. Eligible Accounts shall not include the following:
 
(a) Accounts with respect to which the Account Debtor is an officer, employee or
agent of Borrower;
 
(b) Accounts with respect to which services or goods are placed on consignment,
guaranteed sale, or other terms by reason of which the payment by the Account
Debtor may be conditional;
(c)            
Accounts with respect to which the Account Debtor is not a resident of the
United
 
States or Canada; provided, however, all Accounts originating from the Province
of Quebec shall be deemed ineligible;
(d) Accounts with respect to which the Account Debtor is the United States or
any department, agency or instrumentality of the United States;provided,
however, that an Account shall not be deemed ineligible by reason of this clause
(d) if the Borrower has completed all of the steps necessary, in the sole
opinion of Crestmark, to comply with the Federal Assignment of Claims Act of
1940 (31
U.S.C. Section 3727) with respect to such Account;
 
(e) Accounts with respect to which the Account Debtor is any state of the United
States or any city, town, municipality, county or division thereof, provided,
however, that an Account shall not be deemed ineligible by reason of this clause
(e) if the aggregate amount of such Accounts does not exceed five percent (5%)
of the total of Borrower's Accounts outstanding;
(f)            
Accounts with respect to which the Account Debtor is a subsidiary of, related
to,
 
affiliated with, or has common shareholders, officers or directors with
Borrower;(g) Accounts with respect to which Borrower is or becomes liable to the
Account
Debtor for goods sold or services rendered by the Account Debtor to Borrower;
 
(h) those Accounts where Crestmark has notified Borrower that, in Crestmark's
sole discretion, the Account or Account Debtor is not acceptable to Crestmark;
(i)            
all of the Accounts owed by an Account Debtor who is the subject of a
 
bankruptcy, receivership or similar proceeding;
 
(j) all of the Accounts owed by an Account Debtor where twenty percent (20%) or
more of all of the Accounts owed by that Account Debtor are greater than the
Past Due Days;
 
(k) Accounts for which the services have not yet been rendered to the Account
Debtor or the goods sold have not yet been delivered to the Account Debtor
(commonly referred to as "pre-billed accounts");
(I)            
Accounts not previously approved by Crestmark where the expected dollar value
 
for such Account Debtors is greater than ten percent (10%) of Borrower's
existing
 
Accounts;

 

 
-18-

 
 
(m)            
COD and cash sales;
 
(n)            
Accounts which are disputed.
 
 
"Eligible Inventory" means and includes that Inventory (other than packaging
materials, chemicals, additives, promotional items, labels and supplies) which
Crestmark, in its sole credit judgment, deems to be Eligible Inventory. Without
limiting the generality of the forgoing, no Inventory shall be Eligible
Inventory unless:
 
 
(i)            
it is finished goods or raw materials;
 
(ii) at all times it strictly complies with all of Borrower's promises,
warranties and representations to Crestmark;
 
(iii)            
it is in good, new and salable condition;
 
(iv) it is not slow moving, obsolete or unmerchantable, in Crestmark's sole and
absolute discretion;
(v)            
it meets all standards imposed by any governmental agency or authority or any
 
insurer;
 
(vi) it is at all times subject to Crestmark's duly perfected, first priority
security interest and there exists no other lien or encumbrance other than as
permitted hereunder; and
(vii)                     
it is in Borrower's possession and control situated at a location in compliance
 
with this Agreement.
 
Eligible Inventory shall not include Inventory that:
 
(a) is in the hands of any third party, including a warehouseman, finisher,
consignee, etc., unless Crestmark shall have received a warehouseman's waiver or
a third party processor's waiver from such warehouseman, finisher, consignee,
etc.;
 
(b)            
is subject to any license or other agreement that limits, conditions, or
restricts
 
Borrower's or Crestmark's right to sell or otherwise dispose of such Inventory;
 
(c) is not of a type that Crestmark, in its commercially reasonable discretion,
has determined is not Eligible Inventory; or
(d)            
is not in Borrower's possession based upon consignment, guaranteed sale, or
 
other terms by reason of which the payment by Borrower may be conditional.
 
Crestmark will determine in its sole discretion whether any Collateral is
eligible for an Advance, but no Collateral will be considered eligible unless
the requirements set forth above are met. Regardless of whether any Collateral
is eligible, it is still part of the Collateral securing the Obligations.
 
Prior to any request for an Advance, Borrower must furnish to Crestmark
invoices, credit memos, purchase orders, evidence of delivery, proof of
shipment, timesheets or any other documents Crestmark requests, in its sole
discretion, with respect to the Accounts that Borrower is tendering to Crestmark
to support the Advance ("Account Documents"). Crestmark will endeavor to provide
the requested Advance by the end of the next business day following the date it
receives the request as long as the complete package of information for the
request has been received by Crestmark by 10:30 a.m. Eastern Time on the date of
the request for the

 
-19-

 
 
 
Advance.                               
All requests for funding will be subject to Crestmark's then standard fees for
electronic funds transfer, wire transfers and check services.
 
Each time an Advance is made, the amount of the Obligations will be increased by
the amount of the Advance. Five (5) business days ("Clearance Days") after
checks, ACH or wire transfers or other credit instruments are applied to a
specific invoice, Crestmark will credit the Loan Account with the net amount
actually received. On the date a collection is applied to a specific invoice,
Borrower will receive immediate credit on such funds in determining availability
for Advances.
 
When Crestmark receives a payment from an Account Debtor, it will attempt to
apply it against the appropriate Account Debtor and invoice according to the
Account Debtor's remittance advice. If it is not clear which Account Debtor or
invoice the payment is to be applied against, Crestmark may contact Borrower or
the payor for assistance. Unless there is clear error, the application of
payments by Crestmark is final.
 
4.            
FEES AND EXPENSES. The following fees will be paid by Borrower:
 
Loan Fee: At closing of the Loan and on each one year anniversary of the date of
the Agreement, Borrower will pay Crestmark a loan fee of one percent (1.00%) of
the Maximum Amount. The Loan Fee for the initial Term shall be fully earned by
Crestmark on the date of this Agreement and is not refundable in any event. The
Loan Fee for each renewal Term will be fully earned as of the date of the
renewal of the Agreement and not refundable in any event.
 
Late Reportin g Fee: Borrower will pay Crestmark a Late Reporting Fee in an
amount equal to One Hundred Fifty and 00/100 Dollars ($150.00) per document per
business day for any day in which any report, financial statement or schedule
required by the Agreement is delivered late.
 
Lockbox Fee: Each month Borrower will pay all costs in connection with the
Lockbox and the Lockbox Account, as determined by Crestmark from time to time.
 
Documentation Fee: In consideration of the extension of the Loan and the
execution of this Agreement, Borrower will pay Crestmark a documentation fee of
Seven Hundred Fifty and
00/100 Dollars ($750.00), which fee is fully earned as of the date hereof and is
non-refundable.
 
Overformula Fee: In the event of the occurrence of an Overformula, Borrower will
pay to Crestmark an Overformula Fee of the greater of (i) 0.04937% per day on
the amount of such Overformula, or (ii) Two Hundred Fifty and 00/100 Dollars
($250.00) per day. Further, such Overformula Fee shall not constitute a waiver
of any rights Crestmark may have as a result of an Overformula.
 
Misdirection Fee: In the event that the Borrower fails to immediately deposit
funds in the Lockbox Account or the Lockbox in the form received as provided in
Section 5 of the Agreement, in addition to all other remedies of Crestmark
hereunder, Borrower shall pay a Misdirection Fee. The Misdirection Fee is equal
to five percent (5.00%) of the amount of the funds which Borrower deposits in
any bank account other than the Lockbox Account or the
 

 

 
-20-

 
 
Lockbox, or are otherwise not remitted to Crestmark as required in the
Agreement. Nothing provided herein shall in any manner authorize the Borrower to
misdirect funds as prohibited by the Agreement. Crestmark is the owner of all
deposits in the Lockbox and the Lockbox Account, and has no duty as to
collection or protection of funds as long as it is not grossly negligent or
commits actual fraud.
 
Missing Notation Fee: Borrower will pay to Crestmark a Missing Notation Fee of
five percent (5.00%) of the face amount of each invoice on any invoice that is
sent by Borrower to an Account Debtor that does not contain the notice as
required by Section 5 of the Agreement hereof.
 
Maintenance Fee: Borrower will pay Crestmark a monthly Maintenance Fee of
one-half of one percent (0.50%) of the higher of the monthly average outstanding
principal balance of the Loan for the preceding month or the Minimum Loan
Balance, due and payable on the first day of the following month.
 
Term: This Agreement shall continue in full force and effect, but if not sooner
demanded, for three (3) years from the date hereof ("Term"), and for additional
one (1) year terms unless written notice of termination from the Borrower is
received by Crestmark not less than thirty (30) days and not more than ninety
(90) days prior to the end of the initial Term or any renewal Term. In the event
of termination by Borrower of this Agreement or repayment in full of the
Obligations prior to the expiration of the Term or any renewal Term, Borrower
shall pay to Crestmark, as an early termination fee (the "Exit Fee"), as
liquidated damages and not as a penalty, an amount equal to: (i) if prior to the
one year anniversary date of the Agreement, the Exit Fee will be three percent
(3.00%) of the Maximum Amount plus any unpaid Loan Fees, Maintenance Fees and
other fees which are chargeable to the Borrower hereunder through the end of the
initial Term or renewal Term, (ii) if on and after the one year anniversary date
of the Agreement, but prior to the two year anniversary date of the Agreement,
the Exit Fee will be two percent (2.00%) of the Maximum Amount plus any unpaid
Loan Fees, Maintenance Fees and other fees which are chargeable to the Borrower
hereunder through the end of the initial Term or renewal Term, and (iii) if on
and after the two year anniversary date of the Agreement and thereafter, the
Exit Fee will be one percent (1.00%) of the Maximum Amount plus any unpaid Loan
Fees, Maintenance Fees and other fees which are chargeable to the Borrower
hereunder through the end of the initial Term or renewal Term. In the event that
payment of the Obligations shall be accelerated for any reason whatsoever by
Crestmark, the Exit Fee in effect as of the date of such acceleration shall be
paid and such Exit Fee shall also be added to the outstanding balance of the
Obligations in determining the debt for the purposes of any judgment of
foreclosure of any loan documents given to secure the Obligations.
 
Minimum Loan Balance: Borrower shall maintain an average outstanding principal
balance of the Loan for each month in the amount of Two Million and 00/100
Dollars ($2,000,000.00) ("Minimum Loan Balance"). If the actual average
outstanding principal balance of the Loan in any month is less than the Minimum
Loan Balance, Borrower must pay interest and Maintenance Fees (as defined in the
Schedule) for such month calculated on the Minimum Loan Balance.
 

 

 
-21-

 
 
5.            
LOCKBOX.
 
The Lockbox Account means: Drawer #2289
PO Box 5935
 
Troy, MI 48007-5935
 
(or) if by wire transfer or ACH transfer, according to the following
instructions: Crestmark Bank
 
Troy, MI
 
ABA: 072413764
 
For Account of: CLR Roasters LLC Account Number: 3055910040
 
 
10.            
REPRESENTATIONS.
 
 
(A)           Borrower's state of
organization                                                                        is
Florida                        and           its state organizational
identification number is L07000102507.
 
 
(D) 
List pending and threatened litigation and unsatisfied judgments: NONE
 
(F)            
List Security Interests in the Collateral held by creditors other than Crestmark
as
 
Permitted Encumbrances:
 
 
The following financing statements as reflected in the Florida Secured
Transaction Registry as of
 
November 3, 2017, without increase, amendment, modification, extension or
refinancing.
 
 
●       
UCC-1 financing statement bearing file number 201504326650 filed 07/07/2015 by
 
Secured Party, TCF Equipment Finance, a Division ofTCF National Bank.
 
●       
UCC-1 financing statement bearing file number 201609227733 filed 10/24/2016 by
 
Secured Party, VFI KR SPE I LLC.
 
● 
UCC-1 financing statement bearing file number 201700236200 filed 02/08/2017 by
Secured Party, Growthfunding Equipment Finance, A Division of
People'sIntermountain Bank.
 
● 
UCC-1 financing statement bearing file number 201701244150 filed 05/17/2017 by
Secured Party, Growthfunding Equipment Finance, A Division of
People'sIntermountain Bank.
 
● 
UCC-1 financing statement bearing file number 201701660464 filed 06/28/2017 by
Secured Party, Growthfunding Equipment Finance, A Division of People's
Intermountain Bank.
 

 

 
-22-

 
 
 
● 
UCC-1 financing statement bearing file number 201701660480 filed 06/28/2017 by
Secured Party, Growthfunding Equipment Finance, A Division of
People'sIntermountain Bank.
 
●       
UCC-1 financing statement bearing file number 20170229822X filed 08/28/2017 by
 
Secured Party, TCF Equipment Finance, A Division of TCF National Bank.
 
●       
UCC-1 financing statement bearing file number 20170295187X filed 10/13/2017 by
 
Secured Party, TFG-Fiorida, L.P.
 
NOTE: As to the interests listed above, the listing thereof in this Loan and
Security Agreement shall not, in any manner whatsoever, be deemed to be an
acknowledgement by Crestmark Bank as to the perfection, priority, validity or
enforceability thereof.
 
(J) 
List Borrower's Tradenames: NONE
 
11. BORROWER'S PROMISES:
 
 
C.            
BORROWER CLAIMS THRESHOLD: Two Thousand Five Hundred Dollars
 
($2,500.00).
 
E.            
FINANCIAL
COVENANTS:                                                                
Borrower will maintain the following Financial
 
Covenants, which will be tested on a quarterly basis:
 
I. A minimum Tangible Net Worth at all times of at least negative Twenty One
Million Five Hundred Thousand and 00/100 Dollars (-$21,500,000.00). "Tangible
Net Worth" means, as of the date of determination, total assets less total
liabilities less the sum of (i) the aggregate amount of non-trade Accounts
Receivable, including Accounts Receivable from affiliated or related Persons;
(ii) prepaid expenses; (iii) deposits; (iv) net leasehold improvements; (v)
goodwill; and (vi) any other asset which would be treated as an intangible asset
under GAAP, plus Subordinated Debt. "Subordinated Debt" means any and all
indebtedness presently or in the future incurred by Borrower to any creditor of
Borrower entering into a written subordination agreement with Crestmark.
 
In addition, at no time shall Borrower make any loans, advances, intercompany
transfers or cash flow between Borrower and any subsidiary, related entity or
affiliate of Borrower or with any company that has common shareholders, officers
or directors with Borrower.
 
All of the financial covenants in this Agreement shall be determined in
accordance with GAAP, unless otherwise provided.
 
"GAAP" means generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial
 

 

 
-23-

 
 
Accounting Standards Board that are applicable to the circumstances as of the
date of determination and applied on a consistent basis.
 
F.            
REQUIRED INSURANCE
 
Without limiting Crestmark's requirements for insurance coverage, which may
change from time to time, the following is/are the minimum insurance
requirement(s):
 
PROPERTY DAMAGE- Crestmark named Lender Loss Payee in an amount not less than
the advances made on inventory plus the greater of book or market value of
machinery and equipment and furniture and fixtures.
 
GENERAL AND PROFESSIONAL LIABILITY-Crestmark named as Additional Insured for an
amount not less than the smallest amount required under any contract with any
Account Debtor.
 
12.            
NEGATIVE COVENANTS.
 
 
C.            
BORROWER OBLIGATION THRESHOLD: Twenty Five Thousand Dollars
 
($25,000).
 
G.            
CLAIMS THRESHOLD: Two Thousand Five Hundred Dollars ($2,500.00).
 
13.           
FINANCIAL REPORTS.
 
Management Prepared li'inancial Statements: Borrower will deliver to Crestmark
quarterly management prepared financial statements, balance sheets, and profit
and loss statements for quarter then ended, certified to by the president or
chief financial officer of Borrower. Such reports will set forth the financial
affairs and true condition of Borrower for such time period and will be
delivered to Crestmark no later than forty-five days after the end of each
quarter.
 
Guarantors' Personal Financial Statements. Upon Crestmark's request, Guarantors
will provide Crestmark with annual personal financial statements on forms
supplied by Crestmark. Such reports will set forth with detail Guarantors'
financial affairs and the true financial condition of Guarantors, as of the end
of each calendar year and shall be delivered to Crestmark on the earlier of
April 30th or 120 days after the end of each calendar year.
 
Annual Financial Statements: Each year Borrower will deliver to Crestmark annual
audited financial statements, cash flow statements, balance sheets, and profit
and loss statements prepared by a certified public accountant acceptable to
Crestmark, all without exceptions. Such reports will set forth in detail
Borrower's true condition as of the end of Borrower's fiscal year. Borrower
shall deliver annual financial statements no later than one hundred twenty (120)
days after the end of Borrower's fiscal years.
 
All financial statements are and will be prepared in accordance with GAAP on an
accrual basis applied on a consistent basis.
 

 

 
-24-

 
 
Accounts Receivable Aging, Accounts Payable Aging and Inventory Reports:
Borrower will furnish to Crestmark the following certified to by the president
or chief financial officer of Borrower within the time periods set forth:
 
(a)            
Accounts Receivable
Reports:                                                                
Monthly detailed Accounts Receivable Aging
 
Reports no later than fifteen (15) days after the end of each month; and
 
(b) Accounts Payable Reports: Monthly summary Accounts Payable Aging Reports no
later than fifteen (15) days after the end of each month; and
 
(c) Inventory Reports: Monthly Inventory certification reports no later than
fifteen (15) days after the end of each month. The certification must list
Inventory by category and location as of month end; and
 
Tax Returns: Upon Crestmark's request, Guarantor and Borrower will each provide
Crestmark with current annual tax returns each year no later than fifteen (15)
days after filing or if an extension is filed, at the earlier of (a) filing, or
(b) the extension deadline.
 
Field Examinations: Borrower will reimburse Crestmark for the costs to perform
field examinations of Borrower's books and records, assets and liabilities, to
be performed by Crestmark's inspector, whether a Crestmark officer or an
independent party, with all expenses (whether for a Crestmark employee or
otherwise, at the rate of the greater of current market rate per examiner, per
day or $900.00 per examiner, per day, for each day of the field examination
including preparation of the field examination report, together with all out of
pocket expenses including, but not limited to, transportation, hotel, parking,
and meals) paid by Borrower. Field examinations are performed for Crestmark's
internal use and Crestmark has no obligation to provide Borrower or Guarantor
with the results of the examination or copies of any reports or work papers in
whole or in part.
 
Tax Deposit Evidence: Submit payroll summaries and evidence of tax payments
together with copies of bank statements from which the funds are impounded, as
well as, Federal Forms
940 and 941 to Crestmark upon Crestmark's request.
 
Customer Lists: Upon Crestmark's request, Borrower will deliver to Crestmark
detailed customer lists showing the customer's name, address, phone number and
any other information Crestmark reasonably requests.
 
Projections: Upon Crestmark's request, Borrower shall deliver to Crestmark,
within sixty (60) days prior to each year-end, an annual financial projection
including balance sheet, income statements, and statement of cash flows together
with assumptions for the following year, broken down monthly.
 
Other Information: Borrower and Guarantor will also deliver to Crestmark such
other financial statements, financial reports, projections, documentation, tax
returns and other information as Crestmark requests from time to time.
 

 

 
-25-

 
 
 
18.           
NOTICES.                                
Addresses for Notices are as set forth at the beginning of this Schedule.
 
 
 
 
 
BORROWER:
CLR ROASTERS, LLC
a Florida limited liability company
 
 
 
 
 
 
By:  
/s/  David Briskie
 
 
 
David Briskie
 
 
 
Manager

 

 

 
 
 
 
 
 
 
 
By:  
/s/  Ernesto G. Aguila
 
 
 
Ernesto G. Aguila
 
 
 
Manager

 

 
The undersigned Guarantor by signing this Agreement agrees it has been read and
understands the Agreement and Guarantor agrees to all of its terms.
 
 
 
 
GUARANTOR:
 
 
YOUNGEVITY INTERNATIONAL, INC. a Delaware corporation
 

 
 
 
 
 
 
By:  
/s/  Stephan R. Wallach
 
 
 
Stephan R. Wallach
 
 
 
CEO
 

 
 
 
 
GUARANTOR pursuant to the Personal
 
Guaranty of even date:

 
 
 
 
 
 
 
By:  
/s/  Stephan R. Wallach
 
 
 
Stephan R. Wallach,
Individually
 
 
 

 

 

 
GUARANTOR pursuant to the Guaranty of Validity of even date:
 

 
 
 
 
 
 
By:  
/s/  David Briskie
 
 
 
David Briskie
 
 
 

 

 
 
 
 
 
 
 
 

 
 
-26-

 
 
 
 
 
CRESTMARK:
 
 
CRESTMARK BANK
 
a Michigan banking corporation
 

 
 
 
 
 
 
By:  
/s/  Gayle S. Finger
 
 
 
Gayle S. Finger
 
 
 
1st VP
 

 
 
 
 
 
-27-

 
 
 
CORPORATE GUARANTY
 
 
 
This Corporate Guaranty ("Guaranty") is made
on                                                                                                                 11-16 ,
2017 by Youngevity International, Inc., a Delaware corporation ("Guarantor"), in
favor of Crestmark Bank (''Crestmark") to induce Crestmark to make a loan and/or
extend or continue credit to CLR Roasters, LLC, a Florida limited liability
company ("Borrower") and because Guarantor, whose economic success is vitally
linked to Borrower's success, has determined that executing and delivering this
Guaranty is in Guarantor's interest and to Guarantor's financial benefit.
 
1. Guaranty. Guarantor hereby absolutely, irrevocably and unconditionally
guarantees to Crestmark: (a) the full, prompt and unconditional payment when due
of the Indebtedness (as defined in the Loan and Security Agreement between
Crestmark and Borrower (the "Loan Agreement")), including, but not limited to,
principal and interest on that certain $4,500,000.00 Promissory Note (Line of
Credit), (the "Note"), as each may be amended or restated and whether on demand,
at maturity, pursuant to mandatory or optional prepayments, by acceleration or
otherwise; and (b) the punctual and faithful performance and observation by
Borrower of all duties, agreements, covenants, representations and obligations
of Borrower contained in the Loan Documents (as defined in  Section 3).
 
2.  Absolute, Unconditional and Continuing Obligation. This Guaranty is an
absolute, continuing, unconditional, unlimited and irrevocable guaranty.
Guarantor will not be relieved from any obligations under this Guaranty until
this Guaranty is terminated in accordance with Section 14. The obligations and
liabilities of Guarantor will continue, notwithstanding any defect in the
genuineness, validity or enforceability of the Indebtedness or the Loan
Documents, or any other circumstances which might otherwise constitute a legal
or equitable discharge or defense of the liabilities of a surety or guarantor or
which might otherwise limit recourse against Guarantor. This is a guarantee of
payment and not of collection.
 
3. The Loan Documents. The Loan Agreement, the Note, and all other related
documents now existing or hereafter arising and executed in connection with the
Loan, including all amendments and restatements thereto (collectively the "Loan
Documents"), are incorporated into and made a part of this Guaranty by
reference.
 
4. Continuation of Liability. The liability and obligations of Guarantor will in
no way be affected, impaired, diminished or released by any action or inaction
whatsoever other than the indefeasible payment in full and in cash of the
Indebtedness.
 
5. Unconditional Waiver of all Defenses. Guarantor unconditionally, absolutely
and irrevocably waives each and every defense, which under principles of
guaranty or suretyship law would otherwise operate to impair or diminish the
liability of Guarantor forthe Indebtedness.
 
6. Immediate Recourse/Exercise of Rights by Crestmark. At any time when the
Indebtedness, or any portion thereof, has not been paid when due (whether by
acceleration or otherwise), Crestmark can require that Guarantor pay Crestmark
the amounts owing on this Guaranty immediately. Crestmark is not required to
collect first from Borrower, any collateral, any other guarantor, or any other
person. No delay or stay in any acceleration of the Indebtedness, as against the
Borrower, due to the application of any bankruptcy, insolvency or other law or
proceeding will be effective under this Guaranty, and Guarantor agrees to
immediately pay the amount of the Indebtedness that would be due and payable but
for such delay or stay. All rights, powers, and remedies of Crestmark hereunder
and under the Loan Documents are cumulative and not alternative and shall be in
addition to all rights, powers, and remedies given to Crestmark by law and by
agreement.
 
7. Subordination/Subrogation. In the event that Guarantor becomes obligated to
pay any sums to Borrower, or in the event that Borrower or any subsequent owner
of any Collateral is now or hereafter becomes indebted to Guarantor, the amount
of such indebtedness will at all times be subordinate as to lien, time of
payment and all other respects, to the amounts owing to Crestmark by Borrower.
Furthermore, until the Indebtedness is indefeasibly paid in full and in cash,
Guarantor hereby absolutely, irrevocably and unconditionally waives all rights
Guarantor may have, at law or in equity to seek or claim subrogation. Crestmark
has no duty to enforce or protect any rights, which the undersigned may have
against Borrower or any other Person and Guarantor assumes full responsibility
for enforcing and protecting these rights.
 
8. Representations and Warranties. Guarantor represents, warrants and covenants
to Crestmark that: (a) it is a corporation duly organized, in good standing, and
that the execution and delivery of this Guaranty and the performance of the
obligations under this Guaranty are within Guarantor's Corporate powers, have
been duly authorized by all necessary actions, including by its board of
directors, and do not contravene its articles or by-laws; (b) it is a
shareholder of Borrower; (c) Guarantor has completely read and understands the
Loan Documents and agrees to all those portions which apply to Guarantor; (d)
Guarantor was provided an opportunity to review the Loan Documents with its
legal counsel; (e) any financial statements of Guarantor furnished Crestmark are
true and correct and include all contingent liabilities of Guarantor; (f) since
the date of any financial statements furnished to Crestmark, no material adverse
change has occurred in the financial condition of Guarantor; (g) there are no
pending or threatened legal proceedings or judgments against Guarantor, and no
federal or state tax liens have been filed or threatened against Guarantor; and
(h) Guarantor is not in default or claimed default under any agreement for
borrowed money. Guarantor agrees to immediately give Crestmark written notice of
any material adverse change in its financial condition.
 
9. Expenses. Guarantor agrees to pay all expenses (including attorneys' fees)
incurred by Crestmark in connection with the enforcement of Crestmark's rights
under the Loan Documents, this Guaranty, and the collection of the Indebtedness.
 
10. Transfer of Assets. Guarantor further agrees that until the Indebtedness is
indefeasibly paid in full, and in cash, Guarantor will not, without Crestmark's
prior written consent: (i) make any voluntary transfer of any of Guarantor's
assets which would have the effect of materially diminishing Guarantor's present
net worth or (ii) guaranty the debts or obligations of any other person or
entity.
 
-28-

 
 
11. Reinstatement. This Guaranty will continue to be effective or will be
automatically reinstated, as the case may be, if at any time payment of all or
part of the Indebtedness is rescinded or must otherwise be restored or returned
by Crestmark, including in connection with Borrower's bankruptcy or insolvency.
 
12. Joint and Several Liability. The term "Guarantor" shall mean each person
executing this Guaranty, each individually and together collectively, and the
obligations of Guarantor and any other guarantor executing a guaranty, including
in connection with the Loan will be joint and several.
 
13. Assignability/Binding Effect. This Guaranty shall be assignable by Crestmark
without notice to Guarantor and shall inure to the benefit of Crestmark and to
any subsequent successors and assigns.
 
14. Termination. Notwithstanding anything contained herein to the contrary, the
liability of Guarantor will be terminated only in the event that (i) Borrower or
Guarantor has indefeasibly paid Crestmark in cash and in full the Indebtedness
and (ii) the Loan Agreement is terminated.
 
15. Severability. If any provision of this Guaranty is in conflict with any
statute or rule of law or is otherwise unenforceable for any reason, then that
provision will be deemed null and void to the extent of the conflict or
unenforceability and will be deemed severable, but it will not invalidate any
other provision of this Guaranty.
 
16. Complete Agreement. This Guaranty is the final, complete and exclusive
expression of the agreement between Guarantor and Crestmark with respect to the
subject matter of this Guaranty. This Guaranty cannot be modified or amended
except in a writing signed by both Guarantor and Crestmark.
 
The Guarantor executes this Guaranty as of the day and year first above written.
 
 
WITNESSES:   
 GUARANTOR:
 
 
 
 
 
/s/ David S. Briskie
:  
/s/  Stephan R. Wallach
 
  David S. Briskie
 
Stephan R. Wallach
 
 
 
CEO
 

 

 
 
-29-

 
 
 
PERSONAL GUARANTY
 
 
This Personal Guaranty ("Guaranty") is made on 11-16 , 2017 by Stephan R.
Wallach ("Guarantor") in favor of Crestmark Bank ("Crestmark") to induce
Crestmark to make a loan and/or extend or continue credit to CLR Roasters, LLC,
a Florida limited liability company ("Borrower") and because Guarantor has
determined that executing and delivering this Guaranty is in Guarantor's
interest and to Guarantor's financial benefit. Any capitalized terms used in
this Guaranty, if not specifically defined in this Guaranty, will have the
meanings set forth in the Loan Documents (as defined in Section 3 below).
 
1. Guaranty. Guarantor hereby absolutely, irrevocably and unconditionally
guarantees to Crestmark: (a) the full, prompt and unconditional payment when due
of all existing and future obligations and indebtednessof the Borrower to
Crestmark, including but not limited to the Indebtedness as defined in the Loan
and Security Agreement ("Agreement") between Crestmark and Borrower (as may be
amended) and all principal, interest and fees under any and all related notes,
as they may be amended or restated and whether on demand, at maturity, pursuant
to mandatory or optional prepayments, by accelerationor otherwise; and (b) the
punctual and faithful performance and observation by Borrower of all duties,
agreements, covenants, representations and obligations of Borrower contained in
the Loan Documents (as defined in Section 3).
 
2. Absolute, Unconditional and Continuing Obligation. This Guaranty is an
absolute, continuing, unconditional, unlimited and irrevocable guaranty.
Guarantor will not be relieved from any obligations under this Guaranty until
this Guaranty is terminated in accordance with Section 1 4. The obligations and
liabilities of Guarantor will continue notwithstanding any defect in the
genuineness, validity or enforceability of the Indebtedness or the Loan
Documents, or any other circumstances which might otherwise constitute a legal
or equitable discharge or defense of the liabilities of a surety or guarantor or
which might otherwise limit recourse against Guarantor. This is a guarantee of
payment and not of collection.
 
3. The Loan Documents. The Agreement, all related notes, and all other related
documents now existing or hereafter arising and executed in connection with the
loan, including all amendments and restatements thereto (collectively, "Loa n
Documents"), are incorporated into and made a part of this Guaranty by
reference.
 
4. Continuation of Liability. The liability and obligations of Guarantor will in
no way be affected,impaired, diminished or released by any action or inaction
whatsoever other than the indefeasible payment in full and in cash of the
Indebtedness.
 
5. Unconditional Waiver of all Defenses. Guarantor unconditionally, absolutely
and irrevocably waives each and every defense that under principles of guaranty
or suretyship law would otherwise operate to impair or diminish the liability of
Guarantor for the Indebtedness.
 
6. Immediate Recourse/Exercise of Rights by Crestmark. At any time when the
Indebtedness, or any portion thereof, has not been paid when due (whether by
acceleration or otherwise), Crestmark can require that Guarantor pay Crestmark
the amounts owing on this Guaranty immediately. Crestmark is not required to
collect first from Borrower, any collateral, any other guarantor or any other
person. No delay or stay in any acceleration of the Indebtedness,
 
-30-

 
 
as against the Borrower, due to the application of any bankruptcy, insolvency or
other law or proceeding will be effective under this Guaranty, and Guarantor
agrees to immediately pay the amount of the Indebtedness that would be due and
payable but for such delay or stay. All rights, powers and remedies of Crestmark
hereunder and under the Loan Documents are cumulative and not alternative and
shall be in addition to all rights, powers and remedies given to Crestmark by
law and by agreement.
 
7. Subordination /Subrogation. In the event that Guarantor becomes obligated to
pay any sums to Borrower, or in the event that Borrower or any subsequent owner
of any Collateral is now or hereafter becomes indebted to Guarantor other than
for customary salary and bonuses (collectively, "Debt"), the Debt will at all
times be subordinate as to lien, payment and all other respects, to the
Indebtedness, and Guarantor will not, among other things, accept any payment
from Borrower with respect to the Debt without Crestmark's prior written
consent. Furthermore, until the Indebtedness is indefeasibly paid in full and in
cash, and the Agreement is terminated, Guarantor hereby absolutely, irrevocably
and unconditionally waives all rights Guarantor may have, at law or in equity,
to seek or claim subrogation. Crestmark has no duty to enforce or protect any
rights which the Guarantor may have against Borrower or any other person, and
Guarantor assumes full responsibility for enforcing and protecting such rights.
 
8. Representations and Warranties. Guarantor represents, warrants and covenants
to Crestmark that: (a) Guarantor has completely read and understands the Loan
Documents and agrees to all those portions which apply to Guarantor; (b)
Guarantor was provided an opportunity to review the Loan Documents with its
legal counsel; (c) any financial statements of Guarantor furnished to Crestmark
are true and correct and include all contingent liabilities of Guarantor; (d)
since the date of any financial statements furnished to Crestmark, no material
adverse change has occurred in the financial condition of Guarantor; (e) there
are no pending or threatened legal proceedings or judgments against Guarantor,
and no federal or state tax liens have been filed or threatened against
Guarantor; and (f) Guarantor is not in default or claimed default under any
agreement for borrowed money. Guarantor agrees to immediately give Crestmark
written notice of any material adverse change in its financial condition.
 
9.  Expenses. Guarantor agrees to pay all expenses (including attorneys' fees)
incurred by Crestmark in connection with the enforcement of Crestmark's rights
under the Loan Documents, this Guaranty, and the collection of the Indebtedness.
 
10. Transfer of Assets. Guarantor further agrees that until the Indebtedness is
indefeasibly paid in full, and in cash, and the Agreement is terminated,
Guarantor will not, without Crestmark's prior written consent: (i) make any
voluntary transfer of any of Guarantor's assets which would have the effect of
materially diminishing Guarantor's present net worth or (ii) guaranty the debts
or obligations of any other person or entity.
 
11. Reinstatement. This Guaranty will continue to be effective or will be
automatically reinstated, as the case may be, if at any time payment of all or
part of the Indebtedness is rescinded or must otherwise be restored or returned
by Crestmark, including in connection with Borrower's bankruptcy or insolvency.
 
12. Joint and Several Liability. The term "Guarantor" shall mean each person
executing this Guaranty, each individually and together collectively, and the
obligations of
 
-31-

 
 
Guarantor and any other guarantor executing a guaranty of all or any portion of
the Indebtedness will be joint and several.
 
13.  Assignability/Binding Effect. This Guaranty shall be assignable by
Crestmark without notice to Guarantor and shall inure to the benefit of
Crestmark and to any subsequent successors and assigns. In the event of the
death of Guarantor, this Guaranty shall continue in effect against the estate of
Guarantor.
 
14. Termination. Notwithstanding anything contained herein to the contrary, the
liability of Guarantor will be terminated only in the event that (i) Borrower or
Guarantor has indefeasibly paid Crestmark in cash and in full the Indebtedness
and (ii) the Agreement is terminated.
 
15. Severability. If any provision of this Guaranty is in conflict with any
statute or rule of law or is otherwise unenforceable for any reason, then that
provision will be deemed null and void to the extent of the conflict or
unenforceability and will be deemed severable, but it will not invalidate any
other provision of this Guaranty.
 
 
16. Complete Agreement. This Guaranty is the final, complete and exclusive
expression of the agreement between Guarantor and Crestmark with respect to the
subject matter of this Guaranty. This Guaranty cannot be modified or amended
except in a writing signed by both Guarantor and Crestmark. This Guaranty is in
addition to and not in substitution of any other guarantees from Guarantor in
favor of Crestmark.
 
 
 
The Guarantor executes this Guaranty as of the day and year first above written.
 
 
WITNESSES:   
 GUARANTOR:
 
 
 
 
 
/s/ David S. Briskie
:  
/s/  Stephan R. Wallach
 
  David S. Briskie
 
Stephan R. Wallach
 
 
 
Stephan R. Wallach, individually 

 

 
 

 
-32-