Document:

Blueprint

 

 

Exhibit 10.44

  

 

 

AMENDMENT NO. 1

 

TO

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT AND
SCHEDULE

 

 

 

This Amendment No. 1 to
Amended and Restated Loan and Security Agreement and Schedule is made this 29th day of
December 2017, by and between CRESTMARK BANK, a  Michigan
banking corporation, whose address is 5480 Corporate Drive, Suite
350, Troy,

 

Michigan 48098 ("Crestmark"), CLR ROASTERS, LLC,
a Florida limited liability company,
whose chief executive office is located at 2131 N.W. 72nd Avenue,
Miami, FL 33122 ("Borrower"), and YOUNGEVITY INTERNATIONAL,
INC. a Delaware corporation,
whose address is 2400 Boswell Rd., Chula Vista, CA 91914,
STEPHAN
R.
WALLACH,
an individual with an address at 12
Spinnaker Way, Coronado, CA 92118 and DAVID BRISKIE,
an individual with an address at 415
Hendricks Isle, Fort Lauderdale, FL 33301 (collectively
"Guarantor"). This Amendment No. 1 amends that certain Amended and
Restated Loan and Security Agreement and Schedule to Loan and
Security Agreement executed November 16, 2017, as amended from time
to time (as amended, collectively the "Loan
Agreement").

 

BACKGROUND:

 

The
parties have executed the Loan Agreement and Collateral Documents;
and

 

The
Borrower and Guarantor are indebted and/or obligated to Crestmark
without offset or deduction pursuant to the Loan Agreement and the
Collateral Documents all of which are in full force and
effect;

 

Borrower,
Crestmark, and Guarantor, desire to modify and amend certain terms,
conditions, covenants and obligations contained in the Loan
Agreement and the Collateral Documents, including, but not limited
to, increasing the Maximum Amount.

 

Accordingly,
the parties agree as follows:

 

1. INCORPORATION BY REFERENCE:

 

All
definitions and terms used in the Loan Agreement and the Collateral
Documents are hereby incorporated in this Amendment No.
1.

 

2. AMENDMENT AND
MODIFICATION TO LOAN AGREEMENT:

 

A.
Section 2 of the Schedule to Loan and Security Agreement
("Schedule") is hereby deleted in its entirety, and in lieu
thereof, the following is inserted:

 

"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:

 

-1-

 

 

 

(a)            

Six
Million Two Hundred Fifty Thousand and 00/100 Dollars

($6,250,000.00)
("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, excluding Espresso Inventory,
as defined below, or fifty percent (50%) of (i) above;

 

(iii)            

the
lesser of Two Hundred Fifty Thousand and 00/100

Dollars
($250,000.00) or seventy-five percent (75%) of Eligible
Espresso Inventory.

 

(subparagraphs
(i) - (iii) are collectively the "Advance Formula").

 

Crestmark
inits 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: (a) H&H Coffee
Export

Group
Corp. ("H&H"), which shall contain payment terms of not greater
than one hundred twenty (120) days from the date of invoice, and
(b) Rothfos Corporation ("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: (a) H&H, which shall be not older than one
hundred thirty five (135) days from the date of invoice, and (b)
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

 

-2-

 

 

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;

0)            

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, provided, however, that
Accounts due from H&H shall not exceed (i) $3,700,000.00 for
the period from December 29, 2017 through January 24, 2018;
(ii)

$3,000,000.00
for the period from January 25, 2018 through March

 

24, 2018, and (iii) $2,500,000.00
thereafter;(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;

 

 

-3-

 

 

(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.

 

Espresso Inventory means the inventory of new and unused espresso
machines and equipment on hand in the Borrower's possession and
control beginning on December 29, 2017.

 

Eligible
Espresso Inventory
means Espresso Inventory which meets
the criteria for Eligible Inventory, and is valued at
cost.

 

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 Advance. All requests for funding will be
subject to Crestmark's then
standard fees for electronic funds transfer, wire transfers and
check services.

 

 

-4-

 

 

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."

 

3.            

REAFFIRMATION OF GUARANTY:

 

As a specific inducement to Crestmark, and in
consideration of Crestmark's reliance hereon, the Guarantor
Youngevity International, Inc., a Delaware corporation has executed
the Corporate Guaranty dated November 16, 2017, the Guarantor
Stephan R.
Wallach has executed the Personal
Guaranty dated November 16, 2017 and the Guarantor David Briskie
has executed the Guaranty of Validity dated November 16, 2017, as
any of the above has been amended from time (collectively, the
"Guaranty"). Guarantor hereby acknowledges and agrees to the
amendments and modifications set forth above and reaffirms the
Guaranty with respect to all liabilities, obligations and the
Indebtedness therein guaranteed as herein amended and modified.
Guarantor further acknowledges that Guarantor remains liable in
accordance with the terms of the Guaranty without offset or
counterclaim. Guarantor also acknowledges and agrees that
Guarantor's liability under the Guaranty is unlimited, and
Youngevity International, Inc., a Delaware corporation, confirms
that its Corporate Guaranty is secured by a security interest in
all of its assets, and that such security interest is in full force
and effect.

 

4.            

REAFFIRMATION OF SUBORDINATION AGREEMENT:

 

As
a specific inducement to Crestmark, and in consideration of
Crestmark's reliance hereon, the Subordinating Creditor, Youngevity
International, Inc., a Delaware corporation has executed the
Subordination Agreement dated November 16, 2017, as may been
amended from time (the "Subordination Agreement"). Subordinating
Creditor hereby acknowledges and agrees to- the amendments and
modifications set forth above and reaffirms the Subordination
Agreement. Subordinating Creditor further acknowledges that the
Subordination Agreement remains in full force and effect without
offset or counterclaim.

 

5.            

EXPENSES:

 

In
consideration of the increase in the amount of the loan and the
execution of this Amendment
No. 1, Borrower will pay Crestmark a fee of $17,500.00, which fee
is fully earned

 

-5-

 

 

as
of the date hereof, and non-refundable. Borrower will promptly pay
all expenses, fees and costs incurred by Crestmark with respect to
the preparation, execution, and delivery of this Amendment No. 1,
and all other documents contemplated herewith, including reasonable
attorneys' fees.

 

6. NO WAIVER:

 

Borrower
acknowledges that the execution of this Amendment No. 1 does not
constitute a waiver or cure of any Default, whether matured or
otherwise, if any, that previously existed or now exists under the
Loan Agreement or any Collateral Document. By execution of this
Agreement, Crestmark will not be deemed to have waived any of its
rights or remedies under the Loan Agreement or any Collateral
Document.

 

7. SURVIVAL,
REAFFIRMATION, AND NO DEFENSES:

 

Each
undersigned Borrower and Guarantor agrees, in all capacities in
which the signatory has executed the Loan Agreement or any of the
Collateral Documents, as follows:

 

A.
That, except as herein expressly modified or amended, all terms,
conditions, covenants, representations and warranties contained in
the Loan Agreement and the Collateral Documents are true and
correct, continue to be satisfied in all respects and are legal,
valid and binding obligations. The undersigned hereby ratify, agree
to and confirm the Loan Agreement and the Collateral Documents and
consent to and acknowledge the foregoing Amendment No.
1.

 

B.
That payment of the Indebtedness is the valid obligation of
Borrower and Guarantor and, as of the date hereof, Borrower and
Guarantor have absolutely no defenses, claims, rights of set-off or
counterclaims against Crestmark or the payment of the Indebtedness.
This Amendment No. 1 shall not impair the rights, remedies and
Collateral given in the Loan Agreement and the Collateral
Documents.

 

C.            

That
the liability of the undersigned howsoever arising or provided for
in the Loan

 

Agreement
and the Collateral Documents is hereby reaffirmed.

 

8. RELEASE:

 

In
consideration of Crestmark executing this Amendment No. 1, Borrower
and Guarantor do each hereby release and discharge Crestmark of and
from any and all claims, harm, causes of action, liabilities,
injuries, expenses (including attorneys' fees) and damages of any
and every kind, known or unknown, legal or equitable, which
Borrower or Guarantor have against Crestmark from the date of
Borrower's and Guarantor's first contact with Crestmark up to the
date of this Agreement. Borrower and Guarantor confirm to Crestmark
that they have reviewed the effect of this release with legal
counsel of their choice, or have been afforded the
opportunity 
to do so, prior to the
execution of this Amendment No. 1 and each acknowledges and
agrees  that Crestmark is relying upon this release in
executing this Amendment No. 1.

 

9. CONFIRMATION OF LIEN UPON COLLATERAL:

 

The
Borrower acknowledges and agrees that pursuant to the terms of the
Loan Agreement, the obligations of the Borrower and the
Indebtedness are secured by a first priority lien and security
interest in the Collateral (as defined in the Loan Agreement). The
Collateral is

 

-6-

 

 

and
shall remain subject to and encumbered by the lien, charge, and
encumbrance of the Loan Agreement, and nothing contained herein
shall affect or be construed to affect the lien or encumbrance
created by the Loan Agreement or the priority thereof.

 

10. NO ORAL
MODIFICATION:

 

This Amendment No. 1 may only be altered or
modified by written instrument duly executed by Borrower and
Crestmark.

 

The
parties hereto have executed this Agreement the day and year first
appearing above.

 

 

	

 

	

"CRESTMARK"

Crestmark
Bank,

 a
Michigan banking corporation 

	

 

	

 

	

 

	

 

	

 

	
 

	
By:  

	
/s/ 

	

 

	

 

	

 

	

	

 

	

 

	

 

	

	

 

 

	

 

	

  "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

	

 

 

 

 

-7-

 

 

 

 

	

 

	
"GUARANTOR"

	

 

	

 

	

 

YOUNGEVITY
INTERNATIONAL, INC.

a Delaware
corporation  

 
 

 
 

	

 

	
 

	
By:  

	
/s/ 
Stephan
R. Wallach

	

 

	

 

	

 

	
Stephan R.
Wallach

	

 

	

 

	

 

	

CEO

	

 

 

	

 

	
 

	

 

	

 

	

 

	

 

	

 

	
 

	
By:  

	
/s/ 
Stephan
R. Wallach

	

 

	

 

	

 

	
Stephan R. Wallach,
individually

	

 

	

 

	

 

	

	

 

 

	

 

	
 

	

 

	

 

	

 

	

 

	

 

	
 

	
By:  

	
/s/ 
David
Briskie

	

 

	

 

	

 

	
David Briskie,
individually

	

 

	

 

	

 

	

	

 

 

 

 

 

 

 

 

	

 

-8-Exhibit

Exhibit 10.1
EXECUTION VERSION

NEITHER THIS WARRANT, AS AMENDED, NOR THE SECURITIES FOR WHICH THIS WARRANT, AS AMENDED, IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES OR BLUE SKY LAWS. NOTWITHSTANDING THE FOREGOING, THIS WARRANT, AS AMENDED, AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT, AS AMENDED, MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THIS WARRANT, AS AMENDED, AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT, AS AMENDED.

RADISYS CORP.
AMENDMENT NO. 1 TO 
WARRANT
Warrant No. 1     Issuance Date:  January 3, 2018
Amendment Date: March 30, 2018
RADISYS CORP, an Oregon corporation (the “Company”), and HCP-FVG, LLC (the “Holder”), hereby agree to amend the above-referenced Warrant as follows:   
1.    General.  Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the original Warrant.
2.        Amendment to Section 9(b) of the Original Warrant.  Pursuant to Section 17(a) of the original Warrant, Section 9(b) to the original Warrant is hereby amended and restated in its entirety as follows:
(b)    Pro Rata Distributions.  During such time as any obligations under the Note Purchase Agreement, or the promissory note or notes issued thereunder, remain outstanding or have not been irrevocably paid in full, the Company shall not make any distributions of Distributed Property (as defined below) to holders of Common Stock or set a record date for any such distribution.  If the Company, at any time while this Warrant is outstanding, distributes to holders of Common Stock (and not to all Holders of Warrants in respect of their ownership thereof) (i) evidences of its indebtedness, (ii) any security (other than a distribution of Common Stock covered by the preceding paragraph), (iii) rights or warrants to 

1

subscribe for or purchase any security, or (iv) cash or any other asset (in each case, “Distributed Property”), then in each such case the Exercise Price in effect immediately prior to the record date fixed for determination of stockholders entitled to receive such distribution shall be adjusted (effective on such record date) to equal the product of such Exercise Price times a fraction of which the denominator shall be the average of the Closing Prices for the five (5) Trading Days immediately prior to (but not including) such record date and of which the numerator shall be such average less the then fair market value of the Distributed Property distributed in respect of one (1) outstanding share of Common Stock, as determined by the Company’s independent certified public accountants that regularly examine the financial statements of the Company (an “Appraiser”).  In such event, the Holder, after receipt of the determination by the Appraiser, shall have the right to select an additional appraiser (which shall be a nationally recognized accounting firm), in which case such fair market value shall be deemed to equal the average of the values determined by each of the Appraiser and such appraiser.  From and after the date that all obligations under the Note Purchase Agreement, and the promissory note or notes issued thereunder, have been irrevocably paid in full, as an alternative to the foregoing adjustment to the Exercise Price, at the request of the Holder delivered before the 90th day after such record date, the Company will deliver to such Holder, within five (5) Trading Days after such request (or, if later, on the effective date of such distribution), the Distributed Property that such Holder would have been entitled to receive in respect of the Warrant Shares for which this Warrant could have been exercised immediately prior to such record date.  If such Distributed Property is not delivered to a Holder pursuant to the preceding sentence, then upon expiration of or any exercise of the Warrant that occurs after such record date, such Holder shall remain entitled to receive, in addition to the Warrant Shares otherwise issuable upon such exercise (if applicable), such Distributed Property.

3.        Miscellaneous.
(a)       References to Warrant and Effect of this Amendment No. 1.  References in the original Warrant to “this Warrant” (and indirect references such as “hereunder”, “hereby”, “herein”, and “hereof” and like expressions) shall be deemed to be references to the Warrant as modified by this Amendment No. 1.  Except as specifically amended above, the Warrant shall continue to be in full force and effect and is hereby in all respects ratified and confirmed.
(b)       Counterparts; Facsimile.  This Amendment No. 1 to the original Warrant may be executed in counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument. Facsimile and pdf signatures of the parties on this Amendment No. 1 to the original Warrant shall be deemed original signatures, and each party shall forward the original signed version of such document promptly following electronic transmission.
(c)       GOVERNING LAW; VENUE; WAIVER OF JURY TRIAL.  ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND 

2

INTERPRETATION OF THIS AMENDMENT NO. 1 TO THE ORIGINAL WARRANT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (EXCEPT FOR MATTERS GOVERNED BY CORPORATE LAW IN THE STATE OF OREGON).  
 

3

IN WITNESS WHEREOF, the Company has caused this Amendment No. 1 to Warrant to be duly executed by its authorized officer as of the date first indicated above.
	
	
	 

	RADISYS CORP.

	 

	 

	By: /s/ Jonathan Wilson   

	   Jonathan Wilson

	Chief Financial Officer, Vice President of  
Finance and Corporate Secretary

    
    
    

Amendment No. 1 to Warrant Accepted and Agreed:
	
			
	 
	 

	HCP-FVG, LLC
	 

	 
	 

	 
	 

	By: /s/ Martin M. Hale Jr.   
	 

	 
	Martin M. Hale Jr.

	 
	Authorized Signatory

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