Document:

Exhibit 10.5

 

Exhibit 10.5
  

 

SECURITY AGREEMENT

 

 

THIS SECURITY AGREEMENT (this
“Agreement”) is made as of December 13, 2018 by Stephan
Wallach and Michelle Wallach (individually, a “Pledgor”
and collectively the “Pledgors”), in favor of Carl
Grover (the “Secured Party”) pursuant to the terms of
that certain Credit Agreement, dated December 13, 2018 (the
“Credit Agreement”) between the Secured Party and CLR
Roasters, LLC, a Florida limited liability company (the
“Company” or as sometimes referred to herein, as the
“Borrower”).

 

 

RECITALS

 

A. The
Secured Party and Borrower entered into the Credit
Agreement.

 

B. On the Funding
Date, the Secured Party has purchased a Credit Note (as defined in
the Credit Agreement) and may purchase additional Credit Notes (the
“Credit Notes”) in an amount of up to $5,000,000 from
the Company (the “Loan”).

 

C.           As
collateral to secure payment and performance of the Obligations set
forth in the Credit Agreement, and the Credit Note, the Pledgors
have entered into this Agreement and granted to the Secured Party a
Lien and security interest in and to all of the Collateral (as
defined below).

 

D.           Unless
otherwise expressly defined in this Agreement, all capitalized
terms when used herein, shall have the same meanings defined in the
Credit Agreement.

 

E.           The
Recitals shall be deemed to be an integral part of this Agreement
as though more fully set forth at length in the body of this
Agreement.

 

 

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as
follows:

 

1. Grant of Security Interest. To
secure the full and timely performance of all of Borrower’s
Obligations and liabilities to the Secured Party pursuant to Credit
Agreement and Credit Note, Pledgors hereby unconditionally and
irrevocably pledge, grant and hypothecate to the Secured Party a
continuing Lien and security interest (the “Security
Interest”) in and to 1,500,000 shares of common stock, par
value $.001 per share, of Youngevity International, Inc. held by
them (the “Collateral”). The Secured Party and Pledgors
each acknowledge and agree that upon the occurrence and
continuation of an Event of Default under the Credit Agreement, the
Credit Notes or any of the Loan Documents or hereunder, the Secured
Party may exercise any of its rights and remedies with respect to
the Collateral owned by Pledgors or the Security Interest granted
by Pledgor hereunder, all as provided in this
Agreement.

 

 

 

 

 

-1-

 

 

2. Representations and
Covenants.

 

(a) Other Liens. Pledgors own all
rights, title and interest in the Collateral and will not permit
its Collateral to be subject to any adverse lien, security interest
or encumbrance. Pledgors will defend its Collateral against the
claims and demands of all persons at any time claiming the same or
any interest therein. Pledgors acknowledge and agree that a stop
order has been placed by Pacific Stock Transfer Company against
1,500,000 shares of Youngevity International, Inc. common stock
representing the Collateral, with instructions not to lift the stop
order until the Loan has been repaid.

 

(b) Valid Security Interest. The
Pledgors hereby, jointly and severally, represent and warrant that:
(i) this Agreement creates in favor of the Secured Party a valid
security interest in the Collateral securing the payment and
performance of the Obligations, (ii) no consent of any third
parties and no authorization, approval or other action by, and no
notice to or filing with, any governmental authority or regulatory
body is required for: (A) the execution, delivery and performance
of this Agreement; (B) the creation or perfection of the Security
Interests in the United States created hereunder in the Collateral;
or (C) the enforcement of the rights of the Secured Party
hereunder.

 

(c) Indemnification. Pledgors agree
to defend, indemnify and hold harmless Secured Party against any
and all liabilities, costs and expenses (including, without
limitation, all reasonable legal fees and expenses): (i) with
respect to, or resulting from, any delay in paying any and all
excise, sales or other taxes which may be payable or are determined
to be payable with respect to any of the Collateral; (ii) with
respect to, or resulting from, any breach of any law, rule,
regulation or order of any governmental authority applicable to any
of the Collateral; or (iii) in connection with a breach of any of
the transactions contemplated by this Agreement; provided, however, that this
indemnification shall not extend to any damages caused by the gross
negligence or willful misconduct of the Secured Party.

 

(d) Authority. Pledgors have all
requisite power and
authority to execute this Agreement and to perform all of their
obligations hereunder, and this Agreement has been duly executed
and delivered by Pledgors and constitutes the legal, valid and
binding obligation of Pledgors, enforceable in accordance with its
terms. The execution, delivery and performance by Pledgors of this
Agreement have been duly authorized by all necessary corporate
action and do not (i) require any authorization, consent or
approval by any governmental department, commission, board, bureau,
agency or instrumentality or domestic; (ii) violate any
provision of any law, rule or regulation or of any order, writ,
injunction or decree presently in effect, having applicability to
Pledgors; or (iii) result in a breach of or constitute a
default under any material indenture, Loan or credit agreement or
any other agreement, lease or instrument to which Pledgors are a
party.

 

3. Secured Party’s Appointment as
Attorney-in-Fact.

 

(a) Powers. Pledgors and Secured
Party hereby appoint the officers or agents of Secured Party (each
an “Agent”) to act on behalf of Secured Party, with
full power of substitution, as its attorney-in-fact with full
irrevocable power and authority in the place of Pledgors and in the
name of Pledgors or in its own name, so long as an Event of Default
has occurred and is continuing, for the purpose of carrying out the
terms of this Agreement, to take any and all appropriate action and
to execute any instrument which may be necessary or desirable to
accomplish the purposes of this Agreement. Without limiting the
foregoing, so long as an Event of Default has occurred and is
continuing, Secured Party, in its discretion, will have the right,
without notice to, or the consent of Pledgors, to do any of the
following on behalf of Pledgors:

 

(i) to
pay or discharge any obligations in connection with the Collateral,
including license fees and taxes or liens levied or placed on or
threatened against the Collateral;

 

 

 

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(ii) to
direct any party liable for any payment under any of the Collateral
to make payment of any and all amounts due or to become due
thereunder directly to Secured Party or as Secured Party
directs;

 

(iii) to
ask for or demand, collect and receive payment of and receipt for
any payments due or to become due at any time in respect of or
arising out of any Collateral;

 

(iv) to
commence and prosecute any suits, actions or proceedings at law or
in equity in any court of competent jurisdiction to enforce any
right in respect of any Collateral;

 

(v) to
defend any suit, action or proceeding brought against any Pledgors
with respect to any Collateral;

 

(vi) to
settle, compromise or adjust any suit, action or proceeding
described in subsection (v) above and, to give such discharges or
releases in connection therewith as Secured Party may deem
appropriate;

 

(vii) to
assign any license or patent right included in the Collateral of a
Pledgor (along with the goodwill of the business to which any such
license or patent right pertains), throughout the world for such
term or terms, on such conditions and in such manner as Secured
Party in their sole discretion determine;

 

(viii) to
sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral and to take, at Secured
Party’s option and Pledgors’ expense, any actions which
Secured Party deem necessary to protect, preserve or realize upon
the Collateral and Secured Party’s liens on the Collateral
and to carry out the intent of this Agreement, in each case to the
same extent as if Secured Party were the absolute owners of the
Collateral for all purposes;

 

(ix) to
exercise the voting and other consensual rights which it would
otherwise be entitled to exercise and all rights of Pledgors to
receive the dividends and interests which it would otherwise be
authorized to receive and retain, shall cease. Upon such notice,
Agent shall have the right to receive, for the benefit of the
Secured Party, any interest, cash dividends or other payments on
the Collateral and, at the option of Agent, to exercise in such
Agent’s discretion all voting rights pertaining thereto.
Without limiting the generality of the foregoing, Agent shall have
the right (but not the obligation) to exercise all rights with
respect to the Collateral as it were the sole and absolute owner
thereof, including, without limitation, to vote and/or to exchange,
at its sole discretion, any or all of the Collateral in connection
with a merger, reorganization, consolidation, recapitalization or
other readjustment concerning or involving the Collateral of
Pledgors or any of its direct or indirect
subsidiaries;

 

(x) to
assign, sell, lease or otherwise dispose of and deliver all or any
part of the Collateral, at public or private sale or otherwise,
either with or without special conditions or stipulations, for cash
or on credit or for future delivery, in such parcel or parcels and
at such time or times and at such place or places, and upon such
terms and conditions as the Agent may deem commercially reasonable,
all without (except as shall be required by applicable statute and
cannot be waived) advertisement or demand upon or notice to
Pledgors or right of redemption of a Pledgor, which are hereby
expressly waived. Upon each such sale, lease, assignment or other
transfer of Collateral, the Secured Party, may, unless prohibited
by applicable law which cannot be waived, purchase all or any part
of the Collateral being sold, free from and discharged of all
trusts, claims, right of redemption and equities of any Pledgor,
which are hereby waived and released; and

 

 

 

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(xi) to
sign and endorse any drafts, assignments, proxies, stock powers,
verifications, notices and other documents relating to the
Collateral.

 

Pledgors
hereby ratify whatever actions Secured Party lawfully does or
causes to be done in accordance with this Section 3. This power of
attorney will be a power coupled with an interest and will be
irrevocable.

 

(b) No Duty on Secured Party’s
Part. The powers conferred on Secured Party by this
Section 4 are solely to protect Secured Party’s interest
in the Collateral and do not impose any duty upon it to exercise
any such powers. Secured Party will be accountable only for amounts
that it actually receives as a result of the exercise of such
powers, and neither Secured Party nor any of their officers,
directors, employees or agents will, in the absence of willful
misconduct or gross negligence, be responsible to Pledgor for any
act or failure to act pursuant to this Section 3.

 

(c) Application
of Proceeds. The proceeds of
any sale, lease or other disposition of the Collateral hereunder or
from payments made on account of any insurance policy insuring any
portion of the Collateral shall be applied: (i) first, to the
expenses of retaking, holding, storing, processing and preparing
for sale, selling, and the like (including, without limitation, any
taxes, fees and other costs incurred in connection therewith) of
the Collateral, to the reasonable attorneys’ fees and
expenses incurred by the Agent in enforcing the Secured
Party’ rights hereunder and in connection with collecting,
storing and disposing of the Collateral; and (ii) then to
satisfaction of the Obligations, and to the payment of any other
amounts required by applicable law, after which the Secured Party
shall pay to Pledgor any surplus proceeds.

 

(d) No
Liability for Deficiency. Upon the sale, license or other
disposition of the Collateral, if the proceeds thereof are
insufficient to pay all amounts to which the Secured Party are
legally entitled, Pledgors will not be liable for the deficiency.
To the extent permitted by applicable law, Pledgors waive all
claims, damages and demands against the Secured Party arising out
of the repossession, removal, retention or sale of the Collateral,
unless due solely to the gross negligence or willful misconduct of
the Secured Party as determined by a final judgment (not subject to
further appeal) of a court of competent jurisdiction.

 

4. Duty
To Hold In Trust. Upon the
occurrence of any Event of Default and at any time thereafter,
Pledgors shall, upon receipt of any revenue,
income, dividend,
interest
or other sums subject to the Security
Interests, whether payable pursuant to the Notes or otherwise, or
of any check, draft, note, trade acceptance or other instrument
evidencing an obligation to pay any such sum, hold the same in
trust for the Secured Party and shall forthwith endorse and
transfer any such sums or instruments, or both, in accordance with
the provisions of Section 3(c) above and if any amounts are
remaining to the Secured Party, pro rata in proportion to their respective then-currently
outstanding principal amount of Note for application to the
satisfaction of the Obligations.

 

5. Expenses Incurred by Secured
Party. If Pledgors fail to perform or comply with any of
their agreements or covenants contained in this Agreement, and
Secured Party performs or complies, or otherwise causes performance
or compliance, with such agreement or covenant in accordance with
the terms of this Agreement, then the reasonable expenses of
Secured Party incurred in connection with such performance or
compliance will be payable by Pledgor to the Secured Parties on
demand and will constitute Obligations secured by this
Agreement.

 

 

 

-4-

 

 

6. Remedies. If an Event of
Default has occurred and is continuing, Secured Party may exercise,
in addition to all other rights and remedies granted to it in this
Agreement and in any other instrument or agreement relating to the
Obligations, all rights and remedies of a Secured Party under the
Delaware Uniform Commercial Code, as amended from time to time (the
“Code”). Without limiting the foregoing, in such
circumstances, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except
any notice required by law) to or upon Pledgors or any other person
(all of which demands, defenses, advertisements and notices are
hereby waived), Secured Party may collect, receive, appropriate and
realize upon any or all of the Collateral and/or may sell, lease,
assign, give an option or options to purchase or otherwise dispose
of and deliver any or all of the Collateral (or contract to do any
of the foregoing), in one or more parcels at public or private sale
or sales, at any exchange, broker’s board or office of
Secured Party or elsewhere upon such terms and conditions as
Secured Party may deem advisable, for cash or on credit or for
future delivery without assumption of any credit risk. Secured
Party will have the right upon any such public sale or sales and,
to the extent permitted by law, upon any such private sale or
sales, to purchase all or any part of the Collateral so sold, free
of any right or equity of redemption in Pledgors, which right or
equity is hereby waived or released. Subject to the provisions of
Section 4(c), Secured Party will apply the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale,
after deducting all reasonable expenses incurred therein or in
connection with the care or safekeeping of any of the Collateral or
in any way relating to the Collateral or the rights of Secured
Party under this Agreement (including, without limitation,
reasonable attorneys’ fees and expenses) to the payment in
whole or in part of the Obligations, in such order as Secured Party
may elect, and only after such application and after the payment by
Secured Party of any other amount required by any provision of law,
need Secured Party account for the surplus, if any, to Pledgors. To
the extent permitted by applicable law, Pledgors waive all claims,
damage and demands it may acquire against Secured Party arising out
of the exercise by Secured Party of any of its rights hereunder. If
any notice of a proposed sale or other disposition of Collateral is
required by law, such notice will be deemed reasonable and proper
if given at least ten (10) days before such sale or other
disposition.

 

7. Limitation on Duties Regarding
Preservation of Collateral. The sole duty of Secured Party
with respect to the custody, safekeeping and preservation of the
Collateral, under the appropriate Code section or otherwise, will
be to deal with it in the same manner as Secured Party deals with
similar property for its own account. Neither Secured Party nor any
of its employees, affiliates or agents will be liable for failure
to demand, collect or realize upon all or any part of the
Collateral or for any delay in doing so or will be under any
obligation to sell or otherwise dispose of any Collateral upon the
request of Pledgors or otherwise.

 

8. Powers Coupled with an
Interest. All authorizations and agencies contained in this
Agreement with respect the Collateral are irrevocable and powers
coupled with an interest.

 

9. No Waiver; Cumulative Remedies.
Secured Party will not by any act (except by a written instrument
pursuant to Section 11(a) hereof) of delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Event of Default under the
Note or in any breach of any of the terms and conditions of this
Agreement. No failure to exercise, nor any delay in exercising, on
the part of Secured Party, any right, power or privilege hereunder
will operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder will preclude any other or
further exercise thereof or the exercise of any other right, power
or privilege. A waiver by Secured Party of any right or remedy
under this Agreement on any one occasion will not be construed as a
bar to any right or remedy that Secured Party would otherwise have
on any subsequent occasion. The rights and remedies provided in
this Agreement are cumulative, may be exercised singly or
concurrently and are not exclusive of any rights or remedies
provided by law.

 

 

 

-5-

 

 

10. Miscellaneous.

 

(a) Amendments and Waivers. Any
term of this Agreement may only be amended by prior written consent
of Pledgors and the Secured Party. Any amendment or waiver effected
in accordance with this Section 10(a) will be binding upon all of
the parties hereto and their respective successors and
assigns.

 

(b) Transfer; Successors and
Assigns. This Agreement will be binding upon and inure to
the benefit of Pledgors and Secured Party, and their respective
successors or assigns. Pledgors may not assign any of their rights
or delegate any of their duties under this Agreement.

 

(c) Governing Law. This Agreement
will be governed by and construed in accordance with the laws of
the State of Delaware without regard to the laws that might be
applicable under conflicts of laws principles. Any action or
proceeding seeking to enforce any provision of, or based on any
right arising out of, any of this Agreement must be brought against
any of the parties in the courts of the State of Delaware, Kent
County, or, if it has or can acquire jurisdiction, in the United
States District Court for the District of Delaware, and each of the
parties consents to the jurisdiction of those courts (and of the
appropriate appellate courts) in any such action or proceeding and
waives any objection to venue laid therein. Nothing in this Section
11(c), however, affects the right of any party to serve legal
process in any other manner permitted by law.

 

(d) Counterparts. This Agreement
may be executed in any number of counterparts (including by
facsimile), each of which will be an original, but all of which
together will constitute one instrument.

 

(e) Titles and Subtitles. The
titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or
interpreting this Agreement.

 

(f) Notices. All notices, requests
and demands to or upon the Secured Party or Pledgors hereunder
shall be effected in the manner provided for in the Credit
Agreement.

 

(g) Term. This Agreement shall terminate on the date on
which all payments under the Notes have been indefeasibly satisfied
in full and all other Obligations have been satisfied in full or
discharged (through cash payment or conversion);
provided,
however,
that all indemnities of the Notes contained in this Agreement shall
survive and remain operative and in full force and effect
regardless of the termination of this
Agreement.

 

(h) Severability. In the event that
any one or more of the provisions contained in this Agreement shall
for any reason be held to be invalid, illegal or unenforceable in
any respect, such provision(s) shall be ineffective only to the
extent of such invalidity, illegality or unenforceability without
invalidating the remainder of such provision or the remaining
provisions of this Agreement and such invalidity, illegality or
unenforceability shall not affect any other provision of this
Agreement, which shall remain in full force and
effect.

 

(i) Entire Agreement. This
Agreement and the other documents evidencing, securing, or relating
to the Credit Agreement constitute the entire understanding and
agreement between the parties with regard to the subjects hereof
and thereof and supersede all prior agreements, representations and
undertakings of the parties, whether oral or written, with respect
to such subject matter.

 

(j) Independent Legal Counsel.
Ascendant Alternative Strategies, LLC (the “Placement Agent”) has
retained its own legal counsel in connection with the transactions
contemplated by this Agreement and the other Loan Documents (the
“Placement Agent’s Counsel”). The Placement
Agent’s counsel has not and will not represent the Lender in
connection with the Lender’s investment in the Company as
contemplated under the terms of this Agreement and the Loan
Documents. The Lender acknowledges that (i) no attorney-client
relationship exists between the Lender and Placement Agent’s
counsel, and (ii) the Lender should seek his own advisors
(including, without limitation, legal advisors) for advice and due
diligence with respect to an investment in the Company, including
with respect to a review of this Agreement and the Loan Documents
and perfection of any security interest granted in favor of Lender
under the terms of this Agreement and the Loan
Documents.

 

[Signature
page follows]

 

 

 

 

 

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IN
WITNESS WHEREOF, Pledgors and Secured Party have caused this
Agreement to be duly executed and delivered as of the date first
above written.

 

 

 

SECURED
PARTY:

 

 

 

   /s/ Carl
Grover                    

Carl
Grover

 

 

PLEDGORS:

 

 

 

    /s Stephan
Wallach         

Stephan
Wallach

 

 

 

    /s/ Michelle
Wallach        

Michelle
Wallach

 

 

 

Pacific
Stock Transfer Company hereby acknowledges that a stop order has
been placed in its books against 1,500,000 shares of Youngevity
common stock representing the Collateral subject to this Security
Agreement and agrees not to lift the stop order until it receives
evidence, in form and substance satisfactory to it, that the Loan
has been repaid.

 

PACIFIC STOCK TRANSFER COMPANY

 

 

 

By:     /s/
Joslyn G.
Claiborne     

Name:
Joslyn G. Claiborne

Title:
Director, Global Operations

 

 

 

-7-Exhibit 10.6

 

 

Exhibit 10.6
 

 

WARRANT PURCHASE AGREEMENT

 

THIS WARRANT PURCHASE AGREEMENT, dated
as of the date of acceptance set forth below (this
“Agreement”), is entered into by and between Youngevity
International, Inc., a Delaware corporation, with headquarters
located at 2400 Boswell Road, Chula Vista, California 91914 (the
“Company”), and Carl Grover, having an address at 1010
South Ocean Blvd, Apt. 107, Pompano Beach, Florida 33062
(“Grover”).

 

W I T N E S S E T H:

 

WHEREAS, Grover has agreed to enter into
a Credit Agreement with CLR Roasters, LLC and the Silas Family
Plantation Group S.A. (the “Credit Agreement”) to
provide up to $5 million in secured credit loans
thereunder;

 

WHEREAS, in order to induce Grover to
enter into the Credit Agreement the Company desires to issue to
Grover a warrant to purchase 100,000 shares of its common stock,
par value $.001 per share, in the form attached hereto as
Exhibit A (the
“Warrant”) and a second warrant to purchase 100,000
shares of its common stock, par value $.001 per share, in the form
attached hereto as Exhibit
B (the “Second Warrant”; and together with the
Warrants, the “Warrants”);

 

WHEREAS, the Company and Grover are
executing and delivering this Agreement in accordance with and in
reliance upon the exemption from securities registration afforded,
inter alia, by Regulation 506 under
Regulation D (“Regulation D”) as promulgated by the
United States Securities and Exchange Commission (the
“SEC”) under the Securities Act of 1933, as amended
(the “1933 Act”), and/or Section 4(a)(2) of the 1933
Act.

 

NOW THEREFORE, in consideration of the
premises and the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:

 

1. AGREEMENT
TO PURCHASE; PURCHASE PRICE.

 

In
consideration of Grover’s entry into the Credit Agreement,
the Company hereby agrees to issue the Warrants to
Grover.

 

2. BUYER
REPRESENTATIONS, WARRANTIES, ETC.; ACCESS TO INFORMATION;
INDEPENDENT INVESTIGATION.

 

Grover
represents and warrants to, and covenants and agrees with, the
Company as follows:

 

a. Grover
is acquiring the Warrant and any underlying common stock issued in
connection therewith for its own account for investment only and
not with a view towards the public sale or distribution thereof and
not with a view to or for sale in connection with any distribution
thereof;

 

 

 

 

 

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b. Grover
is (i) an “accredited investor” as that term is defined
in Rule 501 of the General Rules and Regulations under the 1933 Act
by reason of Rule 501(a)(5), and (ii) experienced in making
investments of the kind described in this Agreement and the related
documents, (iii) able, by reason of the business and financial
experience of its officers (if an entity) and professional advisors
(who are not affiliated with or compensated in any way by the
Company or any of its affiliates or selling agents), to protect its
own interests in connection with the transactions described in this
Agreement, and the related documents, and (iv) able to afford the
entire loss of its investment in the Note;

 

c. All
subsequent offers and sales of the Warrants or the common stock
underlying the Warrants by Grover shall be made pursuant to
registration under the 1933 Act or pursuant to an exemption from
registration;

 

d. Grover
understands that the Warrants are being offered and sold to him in
reliance on specific exemptions from the registration requirements
of United States federal and state securities laws and that the
Company is relying upon the truth and accuracy of, and
Grover’s compliance with, the representations, warranties,
agreements, acknowledgements and understandings of Grover set forth
herein in order to determine the availability of such exemptions
and the eligibility of Grover to acquire the Warrants;

 

e. Grover
and his advisors, if any, have read the Company’s filings
with the Securities and Exchange Commission and have been furnished
with all materials relating to the business, finances and
operations of the Company and materials relating to the offer and
sale of the Warrants which have been requested by Grover. Grover
and his advisors, if any, have been afforded the opportunity to ask
questions of the Company and have received complete and
satisfactory answers to any such inquiries;

 

f. Grover
understands that an investment in the Warrants and the common stock
underlying the Warrants involves a high degree of
risk;

 

g. Grover
understands that no United States federal or state agency or any
other government or governmental agency has passed on or made any
recommendation or endorsement of the Warrants; and

 

h. This
Agreement has been duly and validly authorized, executed and
delivered on behalf of Grover and is a valid and binding agreement
of Grover enforceable in accordance with its terms, subject as to
enforceability to general principles of equity and to bankruptcy,
insolvency, moratorium and other similar laws affecting the
enforcement of creditors’ rights generally

 

3. COMPANY
REPRESENTATIONS, ETC.

 

The
Company represents and warrants to Grover that:

 

a. Reporting
Company Status. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware, and has the requisite corporate power to own its
properties and to carry on its business as now being conducted. The
Company is duly qualified as a foreign corporation to do business
and is in good standing in each jurisdiction where the nature of
the business conducted or property owned by it makes such
qualification necessary other than those jurisdictions in which the
failure to so qualify would not have a material and adverse effect
on the business, operations, properties, prospects or condition
(financial or otherwise) of the Company. The Company has registered
its Common Stock pursuant to Section 12 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and the
Common Stock is listed and traded on the Nasdaq Stock
Market.

 

 

-2-

 

 

 

b. Authorized
Shares. The Company has authorized and reserved for
issuance, free from preemptive rights, shares of its common stock
equal to the number of shares issuable upon and exercise of the
Warrants (the “Warrant Shares”). The Warrant Shares
have been duly authorized, and when issued, will be duly and
validly issued, fully paid and non-assessable and will not subject
the holder thereof to personal liability by reason of being such
holder.

 

c. Securities
Purchase Agreement. The Warrants, this Agreement and the
transactions contemplated hereby have been duly and validly
authorized by the Company, the Warrants and this Agreement have
been duly executed and delivered by the Company and, when executed
and delivered by the Company, will each be, a valid and binding
agreement of the Company enforceable in accordance with their
terms, subject as to enforceability to general principles of equity
and to bankruptcy, insolvency, moratorium, and other similar laws
affecting the enforcement of creditors’ rights
generally.

 

d. Non-contravention.
The execution and delivery of this Agreement by the Company, the
issuance of the Warrants, and the consummation by the Company of
the other transactions contemplated by this Agreement do not and
will not conflict with or result in a breach by the Company of any
of the terms or provisions of, or constitute a default under (i)
the articles of incorporation or by-laws of the Company, (ii) any
indenture, mortgage, deed of trust, or other material agreement or
instrument to which the Company is a party or by which it or any of
its properties or assets are bound, (iii) to its knowledge, any
existing applicable law, rule, or regulation or any applicable
decree, judgment, or (iv) to its knowledge, order of any court,
United States federal or state regulatory body, administrative
agency, or other governmental body having jurisdiction over the
Company or any of its properties or assets, except such conflict,
breach or default which would not have a material adverse effect on
the transactions contemplated herein. The Company is not in
violation of any material laws, governmental orders, rules,
regulations or ordinances to which its property, real, personal,
mixed, tangible or intangible, or its businesses related to such
properties, are subject.

 

e. Approvals.
No authorization, approval or consent of any court, governmental
body, regulatory agency, self-regulatory organization, or stock
exchange or market is required to be obtained by the Company for
the issuance and sale of the Warrants to Grover as contemplated by
this Agreement, except such authorizations, approvals and consents
that have been obtained.

 

f. SEC
Documents, Financial Statements. The Company has filed all
reports, schedules, forms, statements and other documents required
to be filed by it with the SEC pursuant to the reporting
requirements of the Exchange Act, including material filed pursuant
to Section 13(a) or 15(d). The Company has not provided to Grover
any information which, according to applicable law, rule or
regulation, should have been disclosed publicly by the Company but
which has not been so disclosed, other than with respect to the
transactions contemplated by this Agreement.

 

4. CERTAIN
COVENANTS AND ACKNOWLEDGMENTS.

 

a. Restrictive
Legend. Grover acknowledges and agrees that the Warrants and
the Warrant Shares shall bear a restrictive legend in substantially
the following form (and a stop-transfer order may be placed against
transfer thereof):

 

[THIS
WARRANT][THESE SHARES] [HAS][HAVE] NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
SOLD OR OFFERED FOR SALE, IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT OR AN OPINION OF COUNSEL OR OTHER EVIDENCE
ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED.]

 

 

-3-

 

 

 

b. Transfer
Restrictions. Grover acknowledges that (1) neither the
Warrants nor the Warrant Shares have been registered under the
provisions of the 1933 Act and may not be transferred unless (A)
subsequently registered thereunder, or (B) Grover shall have
delivered to the Company an opinion of counsel, reasonably
satisfactory in form, scope and substance to the Company, to the
effect that the securities to be sold or transferred may be sold or
transferred pursuant to an exemption from such registration; and
(2) any sale of any such securities made in reliance on Rule 144
promulgated under the 1933 Act may be made only in accordance with
the terms of said Rule and further, if said Rule is not applicable,
any resale of the securities under circumstances in which the
seller, or the person through whom the sale is made, may be deemed
to be an underwriter, as that term is used in the 1933 Act, may
require compliance with some other exemption under the 1933 Act or
the rules and regulations of the SEC thereunder.

 

c. Filings.
The Company undertakes and agrees to make all necessary filings in
connection with the issuance of the Warrants to Grover under any
United States laws and regulations, or by any domestic securities
exchange or trading market, and to provide a copy thereof to Grover
promptly after such filing.

 

5. GOVERNING
LAW: MISCELLANEOUS. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Delaware. A
facsimile transmission of this signed Agreement shall be legal and
binding on all parties hereto. This Agreement may be signed in one
or more counterparts, each of which shall be deemed an original.
The headings of this Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, this
Agreement. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of
the remainder of this Agreement or the validity or enforceability
of this Agreement in any other jurisdiction. This Agreement may be
amended only by an instrument in writing signed by the party to be
charged with enforcement. This Agreement supersedes all prior
agreements and understandings among the parties hereto with respect
to the subject matter hereof.

 

6. SUCCESSORS
AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
successors and permitted assigns.

 

7. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of
which shall constitute an original, but all of which, taken
together, shall constitute one and the same instrument. Conveyance
of an electronic copy of the signed document will constitute
execution and delivery.

 

 

 

 

[Signature Page Follows]

 

 

-4-

 

 

IN WITNESS WHEREOF, the parties have
executed this Agreement intending to be bound.

 

 

 

YOUNGEVITY
INTERNATIONAL, INC.

 

 

 

By:
__/s/ Dave
Briskie__________________ 

Name: David
Briskie

Title:
President and Chief Financial Officer

 

 

 

 

 

/s/ Carl
Grover______________________

Carl
Grover

 

 

 

-5-

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