Exhibit 10.39
 
 
LOAN AND SECURITY AGREEMENT
 
THIS LOAN AND SECURITY AGREEMENT is made and dated as of September 29, 2014 and
is entered into by and between CHROMADEX CORPORATION, a Delaware corporation,
and each of its subsidiaries (hereinafter collectively referred to as the
“Borrower”), the several banks and other financial institutions or entities that
are initially Affiliates of the Agent and, subject to Section 11.7 of this
Agreement, from time to time parties to this Agreement (collectively, referred
to as “Lender”) and HERCULES TECHNOLOGY GROWTH CAPITAL, INC., a Maryland
corporation, in its capacity as administrative agent for itself and the Lender
(in such capacity, the “Agent”).
 
RECITALS
 
A.           Borrower has requested Lender to make available to Borrower a loan
in an aggregate principal amount of up to Five Million Dollars ($5,000,000.00)
(the "Term Loan"); and
 
B.           Lender is willing to make the Term Loan on the terms and conditions
set forth in this Agreement.
 
AGREEMENT
 
NOW, THEREFORE, Borrower, Agent and Lender agree as follows:
 
SECTION 1. DEFINITIONS AND RULES OF CONSTRUCTION
 
1.1 Unless otherwise defined herein, the following capitalized terms shall have
the following meanings:
 
“Account Control Agreement(s)” means any agreement entered into by and among the
Agent, Borrower and a third party Bank or other institution (including a
Securities Intermediary) in which Borrower maintains a Deposit Account or an
account holding Investment Property and which grants Agent a perfected first
priority security interest in the subject account or accounts.
 
“ACH Authorization” means the ACH Debit Authorization Agreement in substantially
the form of Exhibit H.
 
“Advance(s)” means a Term Loan Advance.
 
“Advance Date” means the funding date of any Advance.
 
“Advance Request” means a request for an Advance submitted by Borrower to Agent
in substantially the form of Exhibit A.
 
“Affiliate” means (a) any Person that directly or indirectly controls, is
controlled by, or is under common control with the Person in question, (b) any
Person directly or indirectly owning, controlling or holding with power to vote
ten percent (10%) or more of the outstanding voting securities of another
Person, (c) any Person ten percent (10%) or more of whose outstanding voting
securities are directly or indirectly owned, controlled or held by another
Person with power to vote such securities, or (d) any Person related by blood or
marriage to any Person described in subsection (a), (b) or (c) of this
paragraph.  As used in the definition of “Affiliate,” the term “control” means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.
 
“Agent” has the meaning given to it in the preamble to this Agreement.
 
“Agreement” means this Loan and Security Agreement, as amended from time to
time.
 
“Amortization Date” means November 1, 2015.
 
“Assignee” has the meaning given to it in Section 11.13.
 
“Borrower Products” means all products, software, service offerings, technical
data or technology currently being designed, manufactured or sold by Borrower or
which Borrower intends to sell, license, or distribute in the future including
any products or service offerings under development, collectively, together with
all products, software, service offerings, technical data or technology that
have been sold, licensed or distributed by Borrower since its incorporation.
 
“Borrower’s Principal Market” shall mean the following exchanges or markets on
which the Common Stock of the Borrower is then listed or quoted for trading on
the date in question: the NASDAQ Global Select Market, the NASDAQ Global Market,
the NASDAQ Capital Market, the New York Stock Exchange or the NYSE MKT, LLC.,
the OTC Bulletin Board, or the OTCQB published by OTC Market Group, LLC (or any
similar organization or agency succeeding to its functions of reporting prices).
 
 
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“Business Day” means any day other than Saturday, Sunday and any other day on
which banking institutions in the State of California are closed for business.
 
“Cash” means all cash and liquid funds.
 
“Change in Control” means any (i) reorganization, recapitalization,
consolidation or merger (or similar transaction or series of related
transactions) of Borrower or any Subsidiary, sale or exchange of outstanding
shares (or similar transaction or series of related transactions) of Borrower or
any Subsidiary in which the holders of Borrower or Subsidiary’s outstanding
shares immediately before consummation of such transaction or series of related
transactions do not, immediately after consummation of such transaction or
series of related transactions, retain shares representing more than fifty
percent (50%) of the voting power of the surviving entity of such transaction or
series of related transactions (or the parent of such surviving entity if such
surviving entity is wholly owned by such parent), in each case without regard to
whether Borrower or Subsidiary is the surviving entity, or (ii)sale or issuance
by Borrower of new shares of Preferred Stock of Borrower to investors, none of
whom are current investors in Borrower, and such new shares of Preferred Stock
are senior to all existing Preferred Stock and Common Stock with respect to
liquidation preferences, and the aggregate liquidation preference of the new
shares of Preferred Stock is more than fifty percent (50%) of the aggregate
liquidation preference of all shares of Preferred Stock of Borrower; provided,
however, a Registered Public Offering or private placement in connection with
any bona fide equity raise shall not constitute a Change in Control.
 
“Claims” has the meaning given to it in Section 11.10.
 
“Closing Date” means the date of this Agreement.
 
“Collateral” means the property described in Section 3.
 
“Commitment Fee” means $20,000, which fee has been received by Lender, and shall
be deemed fully earned on such date regardless of the early termination of this
Agreement.
 
“Common Stock” means the Common Stock, $0.001 par value per share, of the
Company.
 
“Confidential Information” has the meaning given to it in Section 11.12.
 
“Contingent Obligation” means, as applied to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to (i) any
Indebtedness, lease, dividend, letter of credit or other obligation of another,
including any such obligation directly or indirectly guaranteed, endorsed,
co-made or discounted or sold with recourse by that Person, or in respect of
which that Person is otherwise directly or indirectly liable; (ii) any
obligations with respect to undrawn letters of credit, corporate credit cards or
merchant services issued for the account of that Person; and (iii) all
obligations arising under any interest rate, currency or commodity swap
agreement, interest rate cap agreement, interest rate collar agreement, or other
agreement or arrangement designated to protect a Person against fluctuation in
interest rates, currency exchange rates or commodity prices; provided, however,
that the term “Contingent Obligation” shall not include endorsements for
collection or deposit in the ordinary course of business.  The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determined amount of the primary obligation in respect of which such Contingent
Obligation is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by such Person in good
faith; provided, however, that such amount shall not in any event exceed the
maximum amount of the obligations under the guarantee or other support
arrangement.
 
“Copyright License” means any written agreement granting any right to use any
Copyright or Copyright registration, now owned or hereafter acquired by Borrower
or in which Borrower now holds or hereafter acquires any interest.
 
“Copyrights” means all copyrights, whether registered or unregistered, held
pursuant to the laws of the United States, any State thereof, or of any other
country.
 
“Deposit Accounts” means any “deposit accounts,” as such term is defined in the
UCC, and includes any checking account, savings account, or certificate of
deposit.
 
“Domestic Subsidiary” means any Subsidiary that is not a Foreign Subsidiary.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the regulations promulgated thereunder.
 
“Event of Default” has the meaning given to it in Section 9.
 
“Facility Charge” means $50,000, representing one percent (1.0%) of Maximum Term
Loan Amount.
 
“Financial Statements” has the meaning given to it in Section 7.1.
 
 
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“Foreign Subsidiary” means any Subsidiary other than a Subsidiary organized
under the laws of any state within the United States.
 
“GAAP” means generally accepted accounting principles in the United States of
America, as in effect from time to time.
 
“Indebtedness” means indebtedness of any kind, including (a) all indebtedness
for borrowed money or the deferred purchase price of property or services
(excluding trade credit entered into in the ordinary course of business due
within sixty (60) days), including reimbursement and other obligations with
respect to surety bonds and letters of credit, (b) all obligations evidenced by
notes, bonds, debentures or similar instruments, (c) all capital lease
obligations, and (d) all Contingent Obligations.
 
“Insolvency Proceeding” is any proceeding by or against any Person under the
United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other similar relief.
 
“Intellectual Property” means all of Borrower’s Copyrights; Trademarks; Patents;
Licenses; trade secrets and inventions; mask works; Borrower’s applications
therefor and reissues, extensions, or renewals thereof; and Borrower’s goodwill
associated with any of the foregoing, together with Borrower’s rights to sue for
past, present and future infringement of Intellectual Property and the goodwill
associated therewith.
 
“Interest-Only Period” means the period beginning on the Closing Date and
expiring on October 31, 2015.
 
“Investment” means any beneficial ownership (including stock, partnership or
limited liability company interests) of or in any Person, or any loan, advance
or capital contribution to any Person or the acquisition of all, or
substantially all, of the assets of another Person.
 
“Joinder Agreements” means for each Subsidiary other than a Foreign Subsidiary
and ChromaSolar, Inc. (to the extent it is exempt pursuant to Section 7.13), a
completed and executed Joinder Agreement in substantially the form attached
hereto as Exhibit G.
 
“Lender” has the meaning given to it in the preamble to this Agreement.
 
“License” means any Copyright License, Patent License, Trademark License or
other license of rights or interests.
 
“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment for
security, security interest, encumbrance, levy, lien or charge of any kind,
whether voluntarily incurred or arising by operation of law or otherwise,
against any property, any conditional sale or other title retention agreement,
and any lease in the nature of a security interest.
 
“Loan” means the Advances made under this Agreement.
 
“Loan Documents” means this Agreement, the Notes (if any), the ACH
Authorization, the Account Control Agreements, the Joinder Agreements, all UCC
Financing Statements, the Warrant, the Subordination Agreement (if any)[, the
Guaranty,] and any other documents executed in connection with the Secured
Obligations or the transactions contemplated hereby, as the same may from time
to time be amended, modified, supplemented or restated.
 
“Material Adverse Effect” means a material adverse effect upon: (i) the
business, operations, properties, assets, prospects or condition (financial or
otherwise) of Borrower, taken as a whole; or (ii) the ability of Borrower to
perform the Secured Obligations in accordance with the terms of the Loan
Documents, or the ability of Agent or Lender to enforce any of its rights or
remedies with respect to the Secured Obligations; or (iii) the Collateral or
Agent’s Liens on the Collateral or the priority of such Liens.
 
“Maximum Term Loan Amount” means Five Million and No/100 Dollars ($5,000,000).
 
“Maximum Rate” shall have the meaning assigned to such term in Section 2.3.
 
“Note(s)” means a Term Note.
 
“Patent License” means any written agreement granting any right with respect to
any invention on which a Patent is in existence or a Patent application is
pending, in which agreement Borrower now holds or hereafter acquires any
interest.
 
“Patents” means all letters patent of, or rights corresponding thereto, in the
United States or in any other country, all registrations and recordings thereof,
and all applications for letters patent of, or rights corresponding thereto, in
the United States or any other country.
 
“Permitted Indebtedness” means: (i) Indebtedness of Borrower in favor of Lender
or Agent arising under this Agreement or any other Loan Document; (ii)
Indebtedness existing on the Closing Date which is disclosed in Schedule 1A;
(iii) Indebtedness of up to $500,000 outstanding at any time secured by a Lien
described in clause (vii) of the defined term “Permitted Liens,” provided such
Indebtedness does not exceed the lesser of the cost or fair market value of the
Equipment financed with such Indebtedness; (iv) Indebtedness to trade creditors
(including suppliers) incurred in the ordinary course of business, including
Indebtedness incurred in the ordinary course of business with corporate credit
cards; (v) Indebtedness that also constitutes a Permitted Investment; (vi)
Subordinated Indebtedness; (vii) reimbursement obligations in connection with
letters of credit that are secured by cash or cash equivalents and issued on
behalf of the Borrower or a Subsidiary thereof in an amount not to exceed
$250,000 at any time outstanding, (viii) other Indebtedness in an amount not to
exceed $250,000 at any time outstanding, and (ix) extensions, refinancings and
renewals of any items of Permitted Indebtedness, provided that the principal
amount is not increased or the terms modified to impose materially more
burdensome terms upon Borrower or its Subsidiary, as the case may be.
 
 
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“Permitted Investment” means: (i) Investments existing on the Closing Date which
are disclosed in Schedule 1B; (ii) (a) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency or any
State thereof maturing within one year from the date of acquisition thereof, (b)
commercial paper maturing no more than one year from the date of creation
thereof and currently having a rating of at least A-2 or P-2 from either
Standard & Poor’s Corporation or Moody’s Investors Service, (c) certificates of
deposit issued by any bank with assets of at least $500,000,000 maturing no more
than one year from the date of investment therein, and (d) money market
accounts; (iii) repurchases of stock from former employees, directors, or
consultants of Borrower under the terms of applicable repurchase agreements at
the original issuance price of such securities in an aggregate amount not to
exceed $250,000 in any fiscal year, provided that no Event of Default has
occurred, is continuing or would exist after giving effect to the repurchases;
(iv) Investments accepted in connection with Permitted Transfers; (v)
Investments (including debt obligations) received in connection with the
bankruptcy or reorganization of customers or suppliers and in settlement of
delinquent obligations of, and other disputes with, customers or suppliers
arising in the ordinary course of Borrower’s business; (vi) Investments
consisting of notes receivable of, or prepaid royalties and other credit
extensions, to customers and suppliers who are not Affiliates of Borrower, in
the ordinary course of business, provided that this subparagraph (vi) shall not
apply to Investments of Borrower in any Subsidiary; (vii) Investments consisting
of loans not involving the net transfer on a substantially contemporaneous basis
of cash proceeds to employees, officers or directors relating to the purchase of
capital stock of Borrower pursuant to employee stock purchase plans or other
similar agreements approved by Borrower’s Board of Directors; (viii) Investments
consisting of travel advances in the ordinary course of business; (ix)
Investments in newly-formed Domestic Subsidiaries, provided that each such
Domestic Subsidiary enters into a Joinder Agreement promptly after its formation
by Borrower and execute such other documents as shall be reasonably requested by
Agent; (x) Investments in Foreign Subsidiaries other than Foreign Subsidiaries
in existence on the date hereof approved in advance in writing by Agent (such
approval not to be unreasonably withheld or delayed); (xi) Investments
consisting of in-kind contributions in Foreign Subsidiaries in existence on the
date hereof; (xii) joint ventures or strategic alliances in the ordinary course
of Borrower’s business consisting of the nonexclusive licensing of technology,
the development of technology or the providing of technical support, provided
that any cash Investments by Borrower do not exceed $250,000 in the aggregate in
any fiscal year; (xiii) cash Investments in Foreign Subsidiaries and
ChromaSolar, Inc. not to exceed $25,000 in the aggregate; (xiv) additional
Investments that do not exceed $250,000 in the aggregate; and (xv) Indebtedness
to advisory board members, consultants, officers and directors as disclosed in
Schedule 1A.
 
“Permitted Liens” means any and all of the following: (i) Liens in favor of
Agent or Lender; (ii) Liens existing on the Closing Date which are disclosed in
Schedule 1C; (iii) Liens for taxes, fees, assessments or other governmental
charges or levies, either not delinquent or being contested in good faith by
appropriate proceedings; provided, that Borrower maintains adequate reserves
therefor in accordance with GAAP; (iv) Liens securing claims or demands of
materialmen, artisans, mechanics, carriers, warehousemen, landlords and other
like Persons arising in the ordinary course of Borrower’s business and imposed
without action of such parties; provided, that the payment thereof is not yet
required; (v) Liens arising from judgments, decrees or attachments in
circumstances which do not constitute an Event of Default hereunder; (vi) the
following deposits, to the extent made in the ordinary course of
business:  deposits under worker’s compensation, unemployment insurance, social
security and other similar laws, or to secure the performance of bids, tenders
or contracts (other than for the repayment of borrowed money) or to secure
indemnity, performance or other similar bonds for the performance of bids,
tenders or contracts (other than for the repayment of borrowed money) or to
secure statutory obligations (other than Liens arising under ERISA or
environmental Liens) or surety or appeal bonds, or to secure indemnity,
performance or other similar bonds; (vii) Liens on Equipment or software or
other intellectual property constituting purchase money Liens and Liens in
connection with capital leases securing Indebtedness permitted in clause (iii)
of “Permitted Indebtedness”;  (viii) Liens incurred in connection with
Subordinated Indebtedness; (ix) leasehold interests in leases or subleases and
licenses granted in the ordinary course of business and not interfering in any
material respect with the business of the licensor; (x) Liens in favor of
customs and revenue authorities arising as a matter of law to secure payment of
custom duties that are promptly paid on or before the date they become due; (xi)
Liens on insurance proceeds securing the payment of financed insurance premiums
that are promptly paid on or before the date they become due (provided that such
Liens extend only to such insurance proceeds and not to any other property or
assets); (xii) statutory and common law rights of set-off and other similar
rights as to deposits of cash and securities in favor of banks, other depository
institutions and brokerage firms; (xiii) easements, zoning restrictions,
rights-of-way and similar encumbrances on real property imposed by law or
arising in the ordinary course of business so long as they do not materially
impair the value or marketability of the related property; (xiv) Liens on cash
or cash equivalents securing obligations permitted under clause (vii) of the
definition of Permitted Indebtedness; and (xv) Liens incurred in connection with
the extension, renewal or refinancing of the Indebtedness secured by Liens of
the type described in clauses (i) through (xi) above; provided, that any
extension, renewal or replacement Lien shall be limited to the property
encumbered by the existing Lien and the principal amount of the Indebtedness
being extended, renewed or refinanced (as may have been reduced by any payment
thereon) does not increase.
 
“Permitted Transfers” means (i) sales of Inventory in the ordinary course of
business, (ii) exclusive and non-exclusive licenses and similar arrangements for
the use of Intellectual Property in the ordinary course of business and licenses
that could not result in a legal transfer of title of the licensed property but
that may be exclusive in respects other than territory and that may be exclusive
as to territory only as to discreet geographical areas outside of the United
States in the ordinary course of business, or (iii) dispositions of worn-out,
obsolete or surplus Equipment at fair market value in the ordinary course of
business, (iv) sales, transfers and assignments of the Investments set forth on
Schedule 1B, and (v) other Transfers of assets having a fair market value of not
more than $250,000 in the aggregate in any fiscal year.
 
“Person” means any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated organization, association, corporation, limited liability
company, institution, other entity or government.
 
 
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“Preferred Stock” means at any given time any equity security issued by Borrower
that has any rights, preferences or privileges senior to Borrower’s common
stock.
 
“Prepayment Charge” shall have the meaning assigned to such term in Section 2.5.
 
“Receivables” means (i) all of Borrower’s Accounts, Instruments, Documents,
Chattel Paper, Supporting Obligations, letters of credit, proceeds of any letter
of credit, and Letter of Credit Rights, and (ii) all customer lists, software,
and business records related thereto.
 
“Required Lenders” means at any time, the holders of more than 50% of the
aggregate unpaid principal amount of the Term Loans then outstanding.
 
“Registered Public Offering” means an offering of Borrower’s common stock
pursuant to a registration statement under the Securities Act of 1933 filed with
and declared effective by the Securities and Exchange Commission.
 
        “SBA” shall have the meaning assigned to such term in Section 7.15.
 
“SBIC” shall have the meaning assigned to such term in Section 7.15.
 
“SBIC Act” shall have the meaning assigned to such term in Section 7.15.
 
“SEC Filings” means all of the Borrower’s Quarterly Reports on Form 10-Q, annual
Reports on Form 10-K and Current Reports on Form 8-K and registration statements
filed by the Borrower with the Securities and Exchange Commission since January
1, 2012 and made available to the public through the EDGAR System.
 
 
“Secured Obligations” means Borrower’s obligations under this Agreement and any
Loan Document, including any obligation to pay any amount now owing or later
arising.
 
“Subordinated Indebtedness” means Indebtedness subordinated to the Secured
Obligations in amounts and on terms and conditions satisfactory to Agent in its
sole discretion.
 
“Subordination Agreement” means any written subordination agreement among
Borrower, Agent and the subordinating creditor thereunder regarding specific
Subordinated Indebtedness, as applicable.
 
“Subsidiary” means an entity, whether corporate, partnership, limited liability
company, joint venture or otherwise, in which Borrower owns or controls 50% or
more of the outstanding voting securities, including each entity listed on
Schedule 1 hereto.
 
“Term Commitment” means as to any Lender, the obligation of such Lender, if any,
to make a Term Loan Advance to the Borrower in a principal amount not to exceed
the amount set forth under the heading “Term Commitment” opposite such Lender’s
name on Schedule 1.1.
 
“Term Loan Advance” means any Term Loan funds advanced under this Agreement.
 
“Term Loan Interest Rate” means for any day a floating per annum rate of
interest equal to the greater of either (i) 9.35% plus the prime rate as
reported in The Wall Street Journal minus 3.25%, and (ii) 9.35%.
 
“Term Loan Maturity Date” means April 1, 2018.
 
“Term Note” means a Promissory Note in substantially the form of Exhibit B.
 
“Trademark License” means any written agreement granting any right to use any
Trademark or Trademark registration, now owned or hereafter acquired by Borrower
or in which Borrower now holds or hereafter acquires any interest.
 
“Trademarks” means all trademarks (registered, common law or otherwise) and any
applications in connection therewith, including registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or any other country or
any political subdivision thereof.
 
“UCC” means the Uniform Commercial Code as the same is, from time to time, in
effect in the State of California; provided, that in the event that, by reason
of mandatory provisions of law, any or all of the attachment, perfection or
priority of, or remedies with respect to, Agent’s Lien on any Collateral is
governed by the Uniform Commercial Code as the same is, from time to time, in
effect in a jurisdiction other than the State of California, then the term “UCC”
shall mean the Uniform Commercial Code as in effect, from time to time, in such
other jurisdiction solely for purposes of the provisions thereof relating to
such attachment, perfection, priority or remedies and for purposes of
definitions related to such provisions.
 
“Warrant Agreement” means a completed and executed Warrant Agreement in
substantially the form attached hereto as Exhibit J.
 
Unless otherwise specified, all references in this Agreement or any Annex or
Schedule hereto to a “Section,” “subsection,” “Exhibit,” “Annex,” or “Schedule”
shall refer to the corresponding Section, subsection, Exhibit, Annex, or
Schedule in or to this Agreement.  Unless otherwise specifically provided
herein, any accounting term used in this Agreement or the other Loan Documents
shall have the meaning customarily given such term in accordance with GAAP, and
all financial computations hereunder shall be computed in accordance with GAAP,
consistently applied. Unless otherwise defined herein or in the other Loan
Documents, terms that are used herein or in the other Loan Documents and defined
in the UCC shall have the meanings given to them in the UCC.
 
 
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SECTION 2. THE LOAN
 
2.1 [Intentionally Omitted.]
 
2.2 Term Loan.
 
(a) Advances.  Subject to the terms and conditions of this Agreement, Lender
will severally (and not jointly) make in an amount not to exceed its respective
Term Commitment, and Borrower agrees to draw, a Term Loan Advance of $2,500,000
on the Closing Date.  Beginning after the Closing Date, and continuing until
July 31, 2015, Borrower may request an additional Term Loan Advance in an
aggregate amount of up to $2,500,000 (the “Second Advance”).  In the event that
Borrower shall request the Second Advance then Lender will severally (and not
jointly) make the Second Advance in an amount not to exceed its respective
additional Term Commitment. The aggregate outstanding Term Loan Advances may be
up to the Maximum Term Loan Amount.
 
(b) Advance Request.  To obtain a Term Loan Advance, Borrower shall complete,
sign and deliver an Advance Request (at least five (5) Business Days before the
Advance Date) to Agent.  Lender shall fund the Term Loan Advance in the manner
requested by the Advance Request provided that each of the applicable conditions
precedent to such Term Loan Advance (Section 4.1 and Section 4.3 with respect to
an initial Advance Request and Section 4.2 and Section 4.3 with respect to any
subsequent Advance Request) is satisfied as of the requested Advance Date.
 
(c) Interest.  The principal balance of each Term Loan Advance shall bear
interest thereon from such Advance Date at the Term Loan Interest Rate based on
a year consisting of 360 days, with interest computed daily based on the actual
number of days elapsed.  The Term Loan Interest Rate will float and change on
the day the Prime Rate changes from time to time.
 
(d) Payment.  Borrower will pay interest on each Term Loan Advance on the first
day of each month, beginning the month after the Advance Date and continuing
during the Interest-Only Period.  Borrower shall repay the aggregate Term Loan
principal balance that is outstanding on the day immediately preceding the
Amortization Date, in equal monthly installments of principal and interest
(mortgage style) beginning on the Amortization Date and continuing on the first
Business Day of each month thereafter until the Secured Obligations are
repaid.  The entire Term Loan principal balance and all accrued but unpaid
interest hereunder, shall be due and payable on Term Loan Maturity
Date.  Borrower shall make all payments under this Agreement without setoff,
recoupment or deduction and regardless of any counterclaim or defense. Lender
will initiate debit entries to the Borrower’s account as authorized on the ACH
Authorization on each payment date of all periodic obligations payable to Lender
under each Term Advance.
 
(e) Optional Payment in Cash or Conversion to Common Stock of Monthly Amount or
Prepayment Principal Amount.
 
(i) Borrower Election for Payment in Cash or Conversion to Common
Stock.  Subject to satisfaction of the Conversion Conditions and compliance with
the other terms and conditions of this Section 2.2(e), Borrower may elect to
pay, in whole or in part, any regularly scheduled installment of principal (a
“Principal Installment Payment”) up to an aggregate maximum amount of $500,000
by converting a portion of the principal of the Term Loan into shares of Common
Stock in lieu of payment in cash (such option, the “Conversion Option”).  In
order to validly exercise a Conversion Option, Borrower (A) must deliver written
notice thereof, in the form attached hereto as Exhibit I-1, to Agent (a
“Borrower Conversion Election Notice”) five (5) days prior to the applicable due
date of the Principal Installment Payment (the “Principal Installment Due Date”)
and (B) shall notify the Borrower’s transfer agent of the number of shares of
Common Stock to be registered in the name of each Lender by no later than the
first trading day following the applicable Principal Installment Due Date (such
date, the “Delivery Date”) such aggregate number of shares of Common Stock to
 
(ii) be issued to Lender with respect to such Borrower Conversion Election
Notice, as determined in accordance with this Section 2.2(e) (which shares shall
be free of any restrictions on transfer), by no later than the first trading day
following the applicable Delivery Date.  All payments in respect of a Principal
Installment Payment shall be made in cash, unless (i) Borrower timely delivers a
Borrower Conversion Election Notice in accordance with the immediately preceding
sentence, (ii) Borrower timely credits the shares of Common Stock to each
Lender, free of restrictive legends, in accordance with this Section 2.2(e) and
(iii) the Conversion Conditions are satisfied in respect of such payment.  A
Borrower Conversion Election Notice, once delivered by Borrower, shall be
irrevocable unless otherwise agreed, in writing, by each Lender.  If Borrower
elects to make a Principal Installment Payment, in whole or in part, through
conversion of such amount into shares of Common Stock, the number of such shares
of Common Stock to be issued in respect of such Principal Installment Payment
shall be equal to the number determined by dividing (x) the principal amount to
be paid in shares of Common Stock by (y) the Fixed Conversion Price.  For
purposes hereof, the “Fixed Conversion Price” shall be $1.293; provided,
however, that upon the occurrence of any stock split, stock dividend,
combination of shares or reverse stock split pertaining to the Common Stock, the
Fixed Conversion Price shall be proportionately increased or decreased as
necessary to reflect the proportionate change in the shares of Common Stock
issued and outstanding as a result of such stock split, stock dividend,
combination of shares or reverse stock split.  Any shares of Common Stock issued
pursuant to a Borrower Conversion Election Notice shall be deemed to be issued
upon a partial conversion of the principal of the Note.
 
 
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(iii) Conversion Conditions.  Notwithstanding the foregoing, Borrower’s right to
deliver, and Lender’s obligation to accept, shares of Common Stock in lieu of
payment in cash of a Principal Installment Payment is conditioned on the
satisfaction of each of the following conditions (the “Conversion Conditions”)
as of such Delivery Date: (A) the closing price of the shares of Common Stock as
reported by Bloomberg, L.P. on the  Borrower’s Principal Market for each of the
seven (7) consecutive trading days immediately preceding the Delivery Date shall
be greater than or equal to the Fixed Conversion Price; (B) the Common Stock
issued in connection with any such payment does not exceed 15% of the total
trading volume of the Common Stock for the twenty-two (22) consecutive trading
days immediately prior to and including such Delivery Date; (C) only one
Borrower Conversion Election Notice may be given in any calendar month during
the amortization period; (D) the aggregate principal amount to be paid in shares
of Common Stock pursuant to Section 2.2(e)(i) of this Agreement shall not exceed
Five Hundred Thousand Dollars ($500,000); (E) the Common Stock is (and was on
each of the twenty-two (22) consecutive trading days immediately preceding such
Delivery Date) quoted or listed on the Borrower’s Principal Market  or other
national securities exchange; (F) a registration statement is effective and
available for the resale of all of the shares of Common Stock to be delivered on
such Delivery Date, or such shares of Common Stock are eligible for resale to
the public pursuant to Rule 144 without any limitation; (G) after giving effect
to the issuance of such shares of Common Stock to Lender, Lender would not (1)
beneficially own, together with its Affiliates, Common Stock in excess of the
limitations specified in subsection (d) below and (2) have been issued shares of
Common Stock pursuant to all Borrower Conversion Election Notices in
 
(iv) an aggregate amount in excess of the Cap, as defined in subsection
2.2(e)(iv) below; (H) as of such Delivery Date, there is no outstanding Event of
Default and there is no breach or default that, if left uncured, would result in
an Event of Default; and (I) Borrower shall have sufficient authorized but
unissued shares of Common Stock to provide for the issuance of the shares of
Common Stock pursuant to the Borrower Conversion Election Notice.  If any of the
Conversion Conditions are not satisfied as of a Delivery Date, Borrower shall
not be permitted to pay, and Lender shall not be obligated to accept, the
Principal Installment Payment in shares of Common Stock, and Borrower shall
instead pay such principal amount in cash; provided, however, that the
Conversion Conditions above may be waived by a writing executed by both Borrower
and the Agent.  In the event Borrower is relying upon an effective registration
statement to satisfy clause (F) of the Conversion Conditions, each of Borrower
and Lender shall provide customary indemnification to one another with respect
to such registration statement in a form acceptable to Borrower and Lender.  By
no later than the third trading day following the Delivery Date, Borrower shall
(provided that Borrower’s transfer agent is participating in the Fast Automated
Securities Transfer Program of the Depository Trust Company) credit to Lender
the shares of Common Stock to be delivered by Borrower with respect to the
portion of the Principal Installment Payment being paid in shares of Common
Stock.  Notwithstanding any other provision of this Agreement, Borrower and
Lender agree that no exercise of any Conversion Option by Borrower or Lender and
no issuance of any shares of Common Stock pursuant to this Section 2.2(e) shall
take place, during any period in which Borrower’s counsel has advised Borrower
that sales of Common Stock should not be made under applicable law or regulation
of any federal or state governmental authority or regulatory body.
 
(v) Lender Election for Payment in Cash or Conversion to Common Stock.  Subject
to satisfaction of the Conversion Conditions and compliance with the other terms
and conditions of this Section 2.2(e), with respect to any Principal Installment
Payment scheduled from Borrower, a Lender may elect to receive such payment in
Common Stock by requiring Borrower to effect a Conversion Option.  In order to
effect such a Conversion Option, the Lender shall deliver a conversion election
notice in the form attached hereto as Exhibit I-2 (a “Lender Conversion Election
Notice”) to Borrower five (5) days prior to the applicable Principal Installment
Due Date.  Borrower shall notify Borrower’s transfer agent of the number of
shares of Common Stock to be registered in the name of each Lender by no later
than the first trading day following the applicable Delivery Date, with respect
to such Lender Conversion Election Notice, as determined in accordance with this
Section 2.2(e) (which to the extent Lender has held the applicable Note for at
least six (6) months and the other requirements of Rule 144 (or its successor
rule) under the Securities Act of 1933, as amended, are otherwise also satisfied
at the time of the applicable conversion, such shares shall be free of any
restrictions on transfer), by no later than the first trading day following the
applicable Delivery Date.  A Lender Conversion Election Notice, once delivered
by a Lender, shall be irrevocable unless otherwise agreed, in writing, by
Borrower.  If Lender elects to receive a Principal Installment Payment in whole
or in part, through conversion of such amount into shares of Common Stock, the
number of such shares of Common Stock to be

(vi) issued in respect of such Principal Installment Payment shall be equal to
the number determined by dividing (x) the principal amount to be paid in shares
of Common Stock by (y) the Fixed Conversion Price; provided, however, that upon
the occurrence of any stock split, stock dividend, combination of shares or
reverse stock split pertaining to the Common Stock, the Fixed Conversion Price
shall be proportionately increased or decreased as necessary to reflect the
proportionate change in the shares of Common Stock issued and outstanding as a
result of such stock split, stock dividend, combination of shares or reverse
stock split.  Any shares of Common Stock issued pursuant to a Lender Conversion
Election Notice shall be deemed to be issued upon partial conversion of the
principal of the Note. Notwithstanding the foregoing, Lender’s right to receive,
and Borrower’s obligation to issue, shares of Common Stock in lieu of payment in
cash of a Principal Installment Payment is conditioned on the satisfaction of
each of the Conversion Conditions (other than 2.2(e)(ii)(C)) and each of the
following additional conditions as of such Delivery Date: (A) only one Lender
Conversion Election Notice may be given in any calendar month during the
amortization period; and (B) the aggregate principal amount to be paid in shares
of Common Stock pursuant to Section 2.2(e)(iii) of this Agreement shall not
exceed Five Hundred Thousand Dollars ($500,000).
 
(vii) Beneficial Ownership Limitation.  Notwithstanding any provision herein to
the contrary, Lender, together with its Affiliates, shall not be permitted to
beneficially own a number of shares of Common Stock (other than shares that may
be deemed beneficially owned except for being subject to a limitation analogous
to the limitation contained in this Section 2.2(e)(iv) in excess of 9.99% of the
number of shares of Common Stock then issued and outstanding, it being the
intent of Borrower and Lender that Lender, together with its Affiliates, not be
deemed at any time to have the power to vote or dispose of greater than 9.99% of
the number of shares of Common Stock issued and outstanding at any time;
provided, however, that Lender shall have the right, upon 61 days’ prior written
notice to Borrower, to waive the 9.99% limitation of this
subsection.  Notwithstanding anything contained herein to the contrary, Borrower
shall not be required to issue or permitted to issue to Lender, and Lender shall
not be required or permitted to accept, shares of Common Stock pursuant to a
Conversion Election Notice if and to the extent such issuance, when taking
together with all other issuances pursuant to prior Conversion Election Notices,
would result in (A) the issuance of more than 19.99% of the Common Stock
outstanding as of the date of this Agreement or (B) Lender, together with its
Affiliates, beneficially owning in excess of 19.99% of the outstanding Common
Stock (each of clauses (A) and (B) are referred to herein as the “Cap”). As used
herein, beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended (the “1934 Act”).  For
any reason at any time, upon written or oral request of Lender, Borrower shall
within two business days confirm orally and in writing to Lender the number of
shares of Common Stock then issued and outstanding as of any given date.
 
 
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(viii) Rule 144. With a view to making available to Lender the benefits of Rule
144 (or its successor rule) and any other rule or regulation of the Securities
and Exchange Commission (the “SEC”) that may at any time permit Lender to sell
shares of Common Stock issued pursuant to Section 2.2(e) of this Agreement to
the public without registration, Borrower covenants and agrees to:  (i) make and
keep public information available, as those terms are understood and defined in
Rule 144, until six (6) months after such date as all of the shares of Common
Stock issued pursuant to Section 2.2(e) of this Agreement may be sold without
restriction by Lender pursuant to Rule 144 or any other rule of similar effect;
(ii) file with the SEC in a timely manner (or obtain extensions in respect
thereof and file within the applicable grace period) all reports and other
documents required of Borrower under the 1934 Act; and (iii) furnish to Lender
upon request, as long as Lender owns any shares of Common Stock issued pursuant
to Section 2.2(e) of this Agreement, such information as may be reasonably
requested in order to avail Lender of any rule or regulation of the SEC that
permits the selling of any such shares of Common Stock without registration.
 
(ix) Stock Reservation.  Borrower covenants and agrees to reserve from its duly
authorized capital stock not less than the number of shares of Common Stock that
may be issuable upon payment of any Principal Installment Payment pursuant to
Section 2.2(e) of this Agreement.  Borrower further represents, warrants and
covenants that, upon issuance of any shares of Common Stock pursuant to Section
2.2(e) of this Agreement, such shares of Common Stock shall be validly issued,
fully paid and non-assessable and free from all preemptive or similar rights,
taxes, liens and charges with respect to the issue thereof.
 
(x) Authorization.  For so long as Lender holds any shares of Common Stock
issued pursuant to Section 2.2(e) of this Agreement, Borrower shall maintain the
Common Stock’s authorization for listing on the Borrower’s Principal Market and
Borrower shall not take any action which would reasonably be expected to result
in the delisting or suspension of the Common Stock on the Borrower’s Principal
Market .
 
2.3 Maximum Interest.  Notwithstanding any provision in this Agreement or any
other Loan Document, it is the parties’ intent not to contract for, charge or
receive interest at a rate that is greater than the maximum rate permissible by
law that a court of competent jurisdiction shall deem applicable hereto (which
under the laws of the State of California shall be deemed to be the laws
relating to permissible rates of interest on commercial loans) (the “Maximum
Rate”).  If a court of competent jurisdiction shall finally determine that
Borrower has actually paid to Lender an amount of interest in excess of the
amount that would have been payable if all of the Secured Obligations had at all
times borne interest at the Maximum Rate, then such excess interest actually
paid by Borrower shall be applied as follows:  first, to the payment of the
Secured Obligations consisting of the outstanding principal; second, after all
principal is repaid, to the payment of Lender’s accrued interest, costs,
expenses, professional fees and any other Secured Obligations; and third, after
all Secured Obligations are repaid, the excess (if any) shall be refunded to
Borrower.
 
2.4 Default Interest.  In the event any payment is not paid on the scheduled
payment date, an amount equal to four percent (4%) of the past due amount shall
be payable on demand. In addition, upon the occurrence and during the
continuation of an Event of Default hereunder, all Secured Obligations,
including principal, interest, compounded interest, and professional fees, shall
bear interest at a rate per annum equal to the rate set forth in 2.2(c), plus
four percent (4%) per annum.  In the event any interest is not paid when due
hereunder, delinquent interest shall be added to principal and shall bear
interest on interest, compounded at the rate set forth in Section 2.2(c) or
Section 2.4, as applicable.
 
2.5 Prepayment.  At its option upon at least seven (7) Business Days prior
notice to Agent, Borrower may prepay all, but not less than all, of the
outstanding Advances by paying the entire principal balance, all accrued and
unpaid interest thereon, together with a prepayment charge equal to the
following percentage of the Advance amount being prepaid: if such Advance
amounts are prepaid in any of the first twelve (12) months following the Closing
Date, 3.0%; after twelve (12) months but prior to twenty four (24) months, 2.0%;
and thereafter, 1.0% (each, a “Prepayment Charge”).  Borrower agrees that the
Prepayment Charge is a reasonable calculation of Lender’s lost profits in view
of the difficulties and impracticality of determining actual damages resulting
from an early repayment of the Advances.  Borrower shall prepay the outstanding
amount of all principal and accrued interest through the prepayment date and the
Prepayment Charge upon a Change in Control.
 
2.6 End of Term Charge.  On the earliest to occur of (i) the Term Loan Maturity
Date, (ii) the date that Borrower prepays the outstanding Secured Obligations,
or (iii) the date that the Secured Obligations become due and payable, Borrower
shall pay Lender a charge of 3.75% of all amounts drawn under the Term
Loan.  Notwithstanding the required payment date of such charge, it shall be
deemed earned by Lender as of the Closing Date.
 
2.7 Notes.  If so requested by Lender by written notice to Borrower, then
Borrower shall execute and deliver to Lender (and/or, if applicable and if so
specified in such notice, to any Person who is an assignee of Lender pursuant to
Section 11.13) (promptly after the Borrower’s receipt of such notice) a Note or
Notes to evidence Lender’s Loans.
 
2.8 Pro Rata Treatment.  Each payment (including prepayment) on account of any
fee and any reduction of the Term Loans shall be made pro rata according to the
Term Commitments of the relevant Lender.
 
 
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SECTION 3. SECURITY INTEREST
 
3.1 As security for the prompt, complete and indefeasible payment when due
(whether on the payment dates or otherwise) of all the Secured Obligations,
Borrower grants to Agent a security interest in all of Borrower’s right, title,
and interest in and to the following personal property whether now owned or
hereafter acquired (collectively, the “Collateral”):  (a) Receivables; (b)
Equipment; (c) Fixtures; (d) General Intangibles (other than Intellectual
Property); (e) Inventory; (f) Investment Property (but excluding thirty-five
percent (35%) of the capital stock of any foreign Subsidiary that constitutes a
Permitted Investment); (g) Deposit Accounts; (h) Cash; (i) Goods; and all other
tangible and intangible personal property of Borrower whether now or hereafter
owned or existing, leased, consigned by or to, or acquired by, Borrower and
wherever located, and any of Borrower’s property in the possession or under the
control of Agent; and, to the extent not otherwise included, all Proceeds of
each of the foregoing and all accessions to, substitutions and replacements for,
and rents, profits and products of each of the foregoing; provided,
however, that the Collateral shall include all Accounts and General Intangibles
that consist of rights to payment and proceeds from the sale, licensing
or disposition of all or any part, or rights in, the Intellectual Property (the
“Rights to Payment”).  Notwithstanding the foregoing, if a judicial authority
(including a U.S. Bankruptcy Court) holds that a security interest in the
underlying Intellectual Property to the extent Borrower has rights there in is
necessary to have a security interest in the Rights to Payment, then the
Collateral shall automatically, and effective as of the date of this Agreement,
include such Intellectual Property to the extent necessary to permit perfection
of Agent’s security interest in the Rights to Payment.
 
3.2 Notwithstanding the broad grant of the security interest set forth in
Section 3.1, above, the Collateral shall not include more than 65% of the
presently existing and hereafter arising issued and outstanding shares of
capital stock owned by Borrower of any Foreign Subsidiary which shares entitle
the holder thereof to vote for directors or any other matter.
 
SECTION 4. CONDITIONS PRECEDENT TO LOAN
 
The obligations of Lender to make the Loan hereunder are subject to the
satisfaction by Borrower of the following conditions:
 
4.1 Initial Advance.  On or prior to the Closing Date, Borrower shall have
delivered to Agent the following:
 
(a) executed originals of the Loan Documents, Account Control Agreements, and
all other documents and instruments reasonably required by Agent to effectuate
the transactions contemplated hereby or to create and perfect the Liens of Agent
with respect to all Collateral, in all cases in form and substance reasonably
acceptable to Agent;
 
(b) certified copy of resolutions of Borrower’s board of directors evidencing
approval of (i) the Loan and other transactions evidenced by the Loan Documents;
and (ii) the Warrant Agreement and transactions evidenced thereby;
 
(c) certified copies of the Certificate of Incorporation and the Bylaws, as
amended through the Closing Date, of Borrower;

 
(d) a certificate of good standing for Borrower from its state of incorporation
and similar certificates from all other jurisdictions in which it does business
and where the failure to be qualified would have a Material Adverse Effect;
 
(e) payment of the Facility Charge and reimbursement of Agent’s and Lender’s
current reasonable and documented expenses reimbursable pursuant to this
Agreement, which amounts may be deducted from the initial Advance;
 
(f) evidence of insurance contemplated pursuant to Section 6.1 and 6.2; and
 
(g) such other documents as Agent may reasonably request.
 
4.2 Second Advance.  On or before the Advance Date of the Second Advance, Agent
shall have conducted an inspection/field examination of the Collateral, the
results of which shall be reasonably satisfactory to Agent.  Agent shall
schedule such inspection promptly after Borrower’s request, it being the
expectation of Borrower and Lender to have the inspection results finalized
before March 31, 2015.
 
4.3 All Advances.  On each Advance Date:
 
(a) Agent shall have received (i) an Advance Request for the relevant Advance as
required by 2.2(b), each duly executed by Borrower’s Chief Executive Officer or
Chief Financial Officer, and (ii) any other documents Agent may reasonably
request.
 
(b) The representations and warranties set forth in this Agreement and in
Section 5 and in the Warrant shall be true and correct in all material respects
on and as of the Advance Date with the same effect as though made on and as of
such date, except to the extent such representations and warranties expressly
relate to an earlier date.
 
(c) Borrower shall be in compliance in all material respects with all the terms
and provisions set forth herein and in each other Loan Document on its part to
be observed or performed, and at the time of and immediately after such Advance
no Event of Default shall have occurred and be continuing.
 
(d) Each Advance Request shall be deemed to constitute a representation and
warranty by Borrower on the relevant Advance Date as to the matters specified in
paragraphs (b) and (c) of this Section 4.3 and as to the matters set forth in
the Advance Request.

 
4.4 No Default.  As of the Closing Date and each Advance Date, (i) no fact or
condition exists that would (or would, with the passage of time, the giving of
notice, or both) constitute an Event of Default and (ii) no event that has had
or could reasonably be expected to have a Material Adverse Effect has occurred
and is continuing.
 
 
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SECTION 5. REPRESENTATIONS AND WARRANTIES OF BORROWER
 
Borrower represents and warrants that:
 
5.1 Corporate Status.  Borrower is a corporation duly organized, legally
existing and in good standing under the laws of the State of Delaware, and is
duly qualified as a foreign corporation in all jurisdictions in which the nature
of its business or location of its properties require such qualifications and
where the failure to be qualified could reasonably be expected to have a
Material Adverse Effect.  Borrower’s present name, former names (if any),
locations, place of formation, tax identification number, organizational
identification number and other information are correctly set forth in Exhibit
C, as may be updated by Borrower in a written notice (including any Compliance
Certificate) provided to Agent after the Closing Date.
 
5.2 Collateral.  Borrower owns the Collateral and the Intellectual Property,
free of all Liens, except for Permitted Liens.  Borrower has the power and
authority to grant to Agent a Lien in the Collateral as security for the Secured
Obligations .
 
5.3 Consents.  Borrower’s execution, delivery and performance of this Agreement
and all other Loan Documents, and Borrower’s execution of the Warrant, (i) have
been duly authorized by all necessary corporate action of Borrower, (ii) will
not result in the creation or imposition of any Lien upon the Collateral, other
than Permitted Liens and the Liens created by this Agreement and the other Loan
Documents, (iii) do not violate any provisions of Borrower’s Certificate or
Articles of Incorporation (as applicable), bylaws, or to the knowledge of the
Borrower, any, law, regulation, order, injunction, judgment, decree or writ to
which Borrower is subject and (iv) except as described on Schedule 5.3, do not
violate any material contract or agreement that has been filed with the SEC as
an exhibit to any SEC Filing or require the consent or approval of any other
Person which has not already been obtained.  The individual or individuals
executing the Loan Documents and the Warrant Agreement on behalf of the Borrower
are duly authorized to do so.
 
5.4 Material Adverse Effect.  No event that has had or could reasonably be
expected to have a Material Adverse Effect has occurred and is continuing.
Borrower is not aware of any event likely to occur that is reasonably expected
to result in a Material Adverse Effect.
 
5.5 Actions Before Governmental Authorities.  Except as described on Schedule
5.5, there are no actions, suits or proceedings at law or in equity or by or
before any governmental authority now pending or, to the knowledge of Borrower,
threatened against or affecting Borrower or its property.
 
5.6 Laws. To the knowledge of the Borrower, Borrower is not in violation of any
law, rule or regulation, or in default with respect to any judgment, writ,
injunction or decree of any governmental authority, where such violation or
default is reasonably expected to result in a Material Adverse Effect.  Borrower
is not in default in any material respect under any provision of any material
agreement or instrument, in each instance that is attached as an exhibit to an
SEC Filing evidencing Indebtedness, or any other material agreement to which it
is a party or by which it is bound.
 
5.7 Information Correct and Current.  No information, report, Advance Request,
financial statement, exhibit or schedule furnished, by or on behalf of Borrower
to Agent in connection with any Loan Document or included therein or delivered
pursuant thereto contained, contains or will contain any material misstatement
of fact or omitted, omits or will omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were, are or will be made, not misleading at the time such statement was made or
deemed made. Additionally, any and all financial or business projections
provided by Borrower to Agent, whether prior to or after the Closing Date, shall
be (i) provided in good faith and based on the most current data and information
available to Borrower, and (ii) the most current of such projections provided to
Borrower’s Board of Directors.
 
5.8 Tax Matters.  Except as described on Schedule 5.8, (a) Borrower has filed
all federal, state and local tax returns that it is required to file, (b)
Borrower has duly paid or fully reserved for all taxes or installments thereof
(including any interest or penalties) as and when due, which have or may become
due pursuant to such returns, and (c) Borrower has paid or fully reserved for
any tax assessment received by Borrower for the three (3) years preceding the
Closing Date, if any (including any taxes being contested in good faith and by
appropriate proceedings).
 
5.9 Intellectual Property Claims.  Except as disclosed in Schedule 5.9, Borrower
is the sole owner of, or otherwise has the right to use, the Intellectual
Property.  Except as described on Schedule 5.9, (i) each of the material
Copyrights, Trademarks and Patents is valid and enforceable, (ii) no material
part of the Intellectual Property has been judged invalid or unenforceable, in
whole or in part, and (iii) no claim has been made to Borrower that any material
part of the Intellectual Property violates the rights of any third party.
Exhibit D is a true, correct and complete list of each of Borrower’s Patents,
registered Trademarks, registered Copyrights, and material agreements filed as
an Exhibit to an SEC Filing under which Borrower licenses Intellectual Property
from third parties (other than shrink-wrap software licenses), together with
application or registration numbers, as applicable, owned by Borrower or any
Subsidiary, in each case as of the Closing Date. Borrower is not in material
breach of, nor has Borrower failed to perform any material obligations under,
any of the foregoing contracts, licenses or agreements and, to Borrower’s
knowledge, no third party to any such contract, license or agreement is in
material breach thereof or has failed to perform any material obligations
thereunder.
 
5.10 Intellectual Property.  Except as described on Schedule 5.10, Borrower has,
or in the case of any proposed business, will have, all material rights with
respect to Intellectual Property necessary in the operation or conduct of
Borrower’s business as currently conducted and proposed to be conducted by
Borrower.  Without limiting the generality of the foregoing, and in the case of
Licenses, except for restrictions that are unenforceable under Division 9 of the
UCC.  Borrower owns or has the right to use, pursuant to valid licenses, all
software development tools, library functions, compilers and all other
third-party software and other items that are used in the design, development,
promotion, sale, license, manufacture, import, export, use or distribution of
Borrower Products.
 
 
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5.11 Borrower Products.  Except as described on Schedule 5.11, no Intellectual
Property owned by Borrower or Borrower Product has been or is subject to any
actual or, to the knowledge of Borrower, threatened litigation, proceeding
(including any proceeding in the United States Patent and Trademark Office or
any corresponding foreign office or agency) or outstanding decree, order,
judgment, settlement agreement or stipulation that restricts in any manner
Borrower’s use, transfer or licensing thereof or that may affect the validity,
use or enforceability thereof. There is no decree, order, judgment, agreement,
stipulation, arbitral award or other provision entered into in connection with
any litigation or proceeding that obligates Borrower to grant licenses or
ownership interest in any future Intellectual Property related to the operation
or conduct of the business of Borrower or Borrower Products.  Borrower has not
received any written notice or claim, or, to the knowledge of Borrower, oral
notice or claim, challenging or questioning Borrower’s ownership in any
Intellectual Property (or written notice of any claim challenging or questioning
the ownership in any licensed Intellectual Property of the owner thereof) or
suggesting that any third party has any claim of legal or beneficial ownership
with respect thereto nor, to Borrower’s knowledge, is there a reasonable basis
for any such claim.  To the best of Borrower’s knowledge, neither Borrower’s use
of its Intellectual Property nor the production and sale of Borrower Products
infringes the Intellectual Property or other rights of others.
 
5.12 Financial Accounts. Exhibit E, as may be updated by the Borrower in a
written notice provided to Agent after the Closing Date is a true, correct and
complete list of (a) all banks and other financial institutions at which
Borrower or any Subsidiary maintains Deposit Accounts and (b) all institutions
at which Borrower or any Subsidiary maintains an account holding Investment
Property, and such exhibit correctly identifies the name, address and telephone
number of each bank or other institution, the name in which the account is held,
a description of the purpose of the account, and the complete account number
therefor.
 
5.13 Employee Loans.  Borrower has no outstanding loans to any employee, officer
or director of the Borrower nor has Borrower guaranteed the payment of any loan
made to an employee, officer or director of the Borrower by a third party.
 
5.14 Capitalization and Subsidiaries.  Borrower’s capitalization as of the
Closing Date is set forth on Schedule 5.14 annexed hereto.  Borrower does not
own any stock, partnership interest or other securities of any Person, except
for Permitted Investments.  Attached as Schedule 5.14, as may be updated by
Borrower in a written notice provided after the Closing Date, is a true, correct
and complete list of each Subsidiary.
 
SECTION 6. INSURANCE; INDEMNIFICATION
 
6.1 Coverage.  For so long as any Indebtedness the Secured Obligations pursuant
to any of the Loan Documents remain outstanding, Borrower shall cause to be
carried and maintained commercial general liability insurance, on a claims-made
form, against risks customarily insured against in Borrower’s line of
business.  Such risks shall include the risks of bodily injury, including death,
property damage, personal injury, advertising injury, and contractual liability
per the terms of the indemnification agreement found in Section 6.3.  Borrower
must maintain a minimum of $2,000,000 of commercial general liability insurance
for each occurrence.  Borrower has and agrees to maintain a minimum of
$2,000,000 of directors’ and officers’ insurance for each occurrence and
$5,000,000 in the aggregate.  Borrower has and agrees to maintain a minimum of
$2,000,000 of errors and omissions insurance in connection with its professional
and consulting activities for each occurrence and $2,000,000 in the
aggregate.  So long as there are any Secured Obligations outstanding, Borrower
shall also maintain a key man life insurance policy for the Chief Executive
Officer/president in form and substance reasonably satisfactory to Agent, naming
Agent as designated payee.  So long as there are any Secured Obligations
outstanding, Borrower shall also cause to be carried and maintained insurance
upon the Collateral, insuring against all risks of physical loss or damage
howsoever caused, in an amount not less than the full replacement cost of the
Collateral, provided that such insurance may be subject to standard exceptions
and deductibles.
 
6.2 Certificates.  Borrower shall deliver to Agent certificates of insurance
that evidence Borrower’s compliance with its insurance obligations in
Section 6.1 and the obligations contained in this Section 6.2.  Borrower’s
insurance certificate shall state Agent is an additional insured for commercial
general liability, a designated payee for the key man life insurance policy, a
loss payee for all risk property damage insurance, subject to the insurer’s
approval, and a loss payee for property insurance and additional insured for
liability insurance for any future insurance that Borrower may acquire from such
insurer.  Attached to the certificates of insurance will be additional insured
endorsements for liability and lender’s loss payable endorsements in form and
substance reasonably acceptable to the Agent for all risk property damage
insurance.  All certificates of insurance will provide for a minimum of ten (10)
days advance written notice to Agent of cancellation or due to a non-payment of
premium.
 
6.3 Indemnity.  Borrower agrees to indemnify and hold Agent, Lender and their
officers, directors, employees, agents, in-house attorneys, representatives and
shareholders (each, an “Indemnified Person”) harmless from and against any and
all claims, costs, expenses, damages and liabilities (including such claims,
costs, expenses, damages and liabilities based on liability in tort, including
strict liability in tort), including reasonable attorneys’ fees and
disbursements and other costs of investigation or defense (including those
incurred upon any appeal) (collectively, “Liabilities”), that may be instituted
or asserted against or incurred by such Indemnified Person as the result of
credit having been extended, suspended or terminated under this Agreement and
the other Loan Documents or the administration of such credit, or in connection
with or arising out of the transactions contemplated hereunder and thereunder,
or any actions or failures to act in connection therewith, or arising out of the
disposition or utilization of the Collateral, excluding in all cases Liabilities
to the extent resulting  primarily from any Indemnified Person’s gross
negligence or willful misconduct. Borrower agrees to pay, and to save Agent and
Lender harmless from, any and all liabilities with respect to, or resulting from
any delay in paying, any and all excise, sales or other similar taxes (excluding
taxes imposed on or measured by the net income of Agent or Lender) that may be
payable or determined to be payable with respect to any of the Collateral or
this Agreement.  In no event shall any Indemnified Person be liable on any
theory of liability for any special, indirect, consequential or punitive damages
(including any loss of profits, business or anticipated savings).
 
 
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SECTION 7. COVENANTS OF BORROWER
 
Borrower agrees as follows:
 
7.1 Financial Reports.  Borrower shall furnish to Agent unless otherwise made
available in a filing with the Securities and Exchange Commission on the EDGAR
System with a link to the applicable filing emailed to Agent at the addresses
set forth below, the financial statements and reports listed hereinafter (the
“Financial Statements”):
 
(a) as soon as practicable (and in any event within 30 days) after the end of
each month, unaudited interim and year-to-date financial statements as of the
end of such month (prepared on a consolidated and consolidating basis, if
applicable), including balance sheet and related statements of income and cash
flows accompanied by a report detailing any material contingencies (including
the commencement of any material litigation by or, to the knowledge of the
Borrower, against Borrower) or any other occurrence that would reasonably be
expected to have a Material Adverse Effect, all certified by Borrower’s Chief
Executive Officer or Chief Financial Officer to the effect that they have been
prepared in accordance with GAAP, except (i) for the absence of footnotes, (ii)
that they are subject to normal year end adjustments, and (iii) they do not
contain certain non-cash items that are customarily included in quarterly and
annual financial statements;
 
(b) as soon as practicable (and in any event within 45 days) after the end of
each calendar quarter, unaudited interim and year-to-date financial statements
as of the end of such calendar quarter (prepared on a consolidated and
consolidating basis, if applicable), including balance sheet and related
statements of income and cash flows accompanied by a report detailing any
material contingencies (including the commencement of any material litigation by
or against Borrower) or any other occurrence that would reasonably be expected
to have a Material Adverse Effect,  certified by Borrower’s Chief Executive
Officer or Chief Financial Officer to the effect that they have been prepared in
accordance with GAAP, except (i) for the absence of footnotes, and (ii) that
they are subject to normal year end adjustments; as well as the most recent
capitalization table for Borrower, including the weighted average exercise price
of employee stock options;
 
(c) as soon as practicable (and in any event within one hundred fifty (150)
days) after the end of each fiscal year, unqualified audited financial
statements as of the end of such year (prepared on a consolidated and
consolidating basis, if applicable), including balance sheet and related
statements of income and cash flows, and setting forth in comparative form the
corresponding figures for the preceding fiscal year, certified by the Borrower’s
current independent auditors or by a firm of independent certified public
accountants selected by Borrower and reasonably acceptable to Agent, accompanied
by any management report from such accountants;
 
(d)  as soon as practicable (and in any event within 30 days) after the end of
each month, a Compliance Certificate in the form of Exhibit F;
 
(e) as soon as practicable (and in any event within 15 days) after the end of
each month, a report showing agings of accounts receivable and accounts payable;
 
(f) promptly after the sending or filing thereof, as the case may be, copies of
any proxy statements, financial statements or reports that Borrower has made
available to holders of its Preferred Stock (as applicable) and copies of any
regular, periodic and special reports or registration statements that Borrower
files with the Securities and Exchange Commission or any governmental authority
that may be substituted therefor, or any national securities exchange;
 
(g) at the same time and in the same manner as it gives to its directors, copies
of all notices, minutes, consents and other materials that Borrower provides to
its directors in connection with meetings of the Board of Directors, and within
30 days after each such meeting, minutes of such meeting, provided that in all
cases Borrower may exclude confidential compensation information and all
information pertaining to executive sessions and corporate financings.
 
(h) financial and business projections promptly following their approval by
Borrower’s Board of Directors, and in any event, within 45 days following the
end of Borrower’s fiscal year, as well as budgets, operating plans and other
financial information reasonably requested by Agent.
 
 
Borrower shall not (without the consent of Agent, such consent not to be
unreasonably withheld or delayed), make any change in its (a) accounting
policies or reporting practices, except as required by GAAP or (b) fiscal years
or fiscal quarters. The fiscal year of Borrower shall end on the last Saturday
of the calendar year.

 
 
The executed Compliance Certificate may be sent via facsimile to Agent at (650)
473-9194 or via e-mail to cnorman@herculestech.com.  All Financial Statements
required to be delivered pursuant to clauses (a), (b) and (c) shall be sent via
e-mail to financialstatements@herculestech.com with a copy to
cnornman@herculestech.com provided, that if e-mail is not available or sending
such Financial Statements via e-mail is not possible, they shall be sent via
facsimile to Agent at: (866) 468-8916, attention Chief Credit Officer.

 
7.2 Management Rights.  Borrower shall permit any representative that Agent or
Lender authorizes, including its attorneys and accountants, to inspect the
Collateral and examine and make copies and abstracts of the books of account and
records of Borrower at reasonable times and upon reasonable notice during normal
business hours.  Such inspections shall be conducted no more often than once
every six months unless an Event of Default has occurred and is continuing, in
which case such inspections shall occur as often as Lender shall determine is
appropriate. In addition, any such representative shall have the right to meet
with management and officers of Borrower to discuss such books of account and
records.  In addition, Agent or Lender shall be entitled at reasonable times and
intervals to consult with and advise the management and officers of Borrower
concerning significant business issues affecting Borrower.  Such consultations
shall not unreasonably interfere with Borrower’s business operations.  The
parties intend that the rights granted Agent and Lender shall constitute
“management rights” within the meaning of 29 C.F.R Section 2510.3-101(d)(3)(ii),
but that any advice, recommendations or participation by Agent or Lender with
respect to any business issues shall not be deemed to give Agent or Lender, nor
be deemed an exercise by Agent or Lender of, control over Borrower’s management
or policies.
 
 
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7.3 Further Assurances.  Borrower shall from time to time execute, deliver and
file, alone or with Agent, any financing statements, security agreements,
collateral assignments, notices, control agreements, or other documents
reasonably requested by Agent to perfect or give the highest priority to Agent’s
Lien on the Collateral.  Borrower shall from time to time procure any
instruments or documents as may be requested by Agent, and take all further
action that may be necessary or desirable, or that Agent may reasonably request,
to perfect and protect the Liens granted hereby and thereby.  In addition, and
for such purposes only, Borrower hereby authorizes Agent to execute and deliver
on behalf of Borrower and to file such financing statements, collateral
assignments, notices, control agreements, security agreements and other
documents without the signature of Borrower either in Agent’s name or in the
name of Agent as agent and attorney-in-fact for Borrower.  Borrower shall
protect and defend Borrower’s title to the Collateral and Agent’s Lien thereon
against all Persons claiming any interest adverse to Borrower or Agent other
than Permitted Liens.
 
7.4 Indebtedness.  Borrower shall not create, incur, assume, guarantee or be or
remain liable with respect to any Indebtedness, or permit any Subsidiary so to
do, other than Permitted Indebtedness, or prepay any Indebtedness or take any
actions which impose on Borrower an obligation to prepay any Indebtedness,
except for the conversion of Indebtedness into equity securities and the payment
of cash in lieu of fractional shares in connection with such conversion.
 
7.5 Collateral.  Borrower shall at all times keep the Collateral, the
Intellectual Property and all other property and assets used in Borrower’s
business or in which Borrower now or hereafter holds any interest free and clear
from any legal process or Liens whatsoever (except for Permitted Liens), and
shall give Agent prompt written notice of any legal process affecting the
Collateral, the Intellectual Property, such other property and assets, or any
Liens thereon, provided however, that the Collateral and such other property and
assets may be subject to Permitted Liens except that there shall be no Liens
whatsoever on Intellectual Property.  Borrower shall cause its Subsidiaries to
protect and defend such Subsidiary’s title to its assets from and against all
Persons claiming any interest adverse to such Subsidiary, and Borrower shall
cause its Subsidiaries at all times to keep such Subsidiary’s property and
assets free and clear from any legal process or Liens whatsoever (except for
Permitted Liens, provided however, that there shall be no Liens whatsoever on
Intellectual Property), and shall give Agent prompt written notice of any legal
process affecting such Subsidiary’s assets. Borrower shall not agree with any
Person other than Agent or Lender not to encumber its property.
 
7.6 Investments.  Borrower shall not directly or indirectly acquire or own, or
make any Investment in or to any Person, or permit any of its Subsidiaries so to
do, other than Permitted Investments.
 
7.7 Distributions.  Borrower shall not, and shall not allow any Subsidiary to,
(a) repurchase or redeem any class of stock or other equity interest other than
pursuant to employee, director or consultant repurchase plans or other similar
agreements, provided, however, in each case the repurchase or redemption price
does not exceed the original consideration paid for such stock or equity
interest, or (b) declare or pay any cash dividend or make a cash distribution on
any class of stock or other equity interest, except that a Subsidiary may pay
dividends or make distributions to Borrower, or (c) lend money to any employees,
officers or directors or guarantee the payment of any such loans granted by a
third party in excess of $100,000 in the aggregate or (d) waive, release or
forgive any Indebtedness owed by any employees, officers or directors in excess
of $100,000 in the aggregate.
 
7.8 Transfers.  Except for Permitted Transfers, Borrower shall not voluntarily
or involuntarily transfer, sell, lease, license, lend or in any other manner
convey any equitable, beneficial or legal interest in any material portion of
its assets.
 
7.9 Mergers or Acquisitions.  Borrower shall not merge or consolidate, or permit
any of its Subsidiaries to merge or consolidate, with or into any other business
organization (other than mergers or consolidations of (a) a Subsidiary which is
not a Borrower into another Subsidiary or into Borrower or (b) a Borrower into
another Borrower), or acquire, or permit any of its Subsidiaries to acquire, all
or substantially all of the capital stock or property of another Person.
 
7.10 Taxes.  Borrower and its Subsidiaries shall pay when due all taxes, fees or
other charges of any nature whatsoever (together with any related interest or
penalties) now or hereafter imposed or assessed against Borrower, Agent, Lender
or the Collateral or upon Borrower’s ownership, possession, use, operation or
disposition thereof or upon Borrower’s rents, receipts or earnings arising
therefrom.  Borrower shall file on or before the due date therefor all personal
property tax returns in respect of the Collateral.  Notwithstanding the
foregoing, Borrower may contest, in good faith and by appropriate proceedings,
taxes for which Borrower maintains adequate reserves therefor in accordance with
GAAP.
 
7.11 Corporate Changes.  Neither Borrower nor any Subsidiary shall change its
corporate name, legal form or jurisdiction of formation without twenty (20)
days’ prior written notice to Agent.  Neither Borrower nor any Subsidiary shall
suffer a Change in Control. Neither Borrower nor any Subsidiary shall relocate
its chief executive office or its principal place of business unless: (i) it has
provided prior written notice to Agent; and (ii) such relocation shall be within
the continental United States.  Neither Borrower nor any Subsidiary shall
relocate any item of Collateral (other than (x) sales of Inventory in the
ordinary course of business, (y) relocations of Equipment having an aggregate
value of up to $150,000 in any fiscal year, and (z) relocations of Collateral
from a location described on Exhibit C to another location described on Exhibit
C) unless (i) it has provided prompt written notice to Agent, (ii) such
relocation is within the continental United States and, (iii) if such relocation
is to a third party bailee, it has delivered a bailee agreement in form and
substance reasonably acceptable to Agent.
 
 
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7.12 Deposit Accounts.  Neither Borrower nor any Subsidiary shall maintain any
Deposit Accounts, or accounts holding Investment Property, except with respect
to which Agent has an Account Control Agreement.
 
7.13 Borrower shall notify Agent of each Subsidiary formed subsequent to the
Closing Date and, within 15 days of formation, shall cause any such Domestic
Subsidiary to execute and deliver to Agent a Joinder Agreement.  Notwithstanding
the above, ChromaSolar, Inc. shall be exempt from the requirement to execute and
deliver a Joinder Agreement until such time as its aggregate assets including
revenues exceed $25,000.
 
7.14 Notification of Event of Default.  Borrower shall notify Agent immediately
of the occurrence of any Event of Default, such notice to be sent via facsimile
to Agent.
 
7.15 Agent and Lender have received a license from the U.S. Small Business
Administration (“SBA”) to extend loans as a small business investment company
(“SBIC”) pursuant to the Small Business Investment Act of 1958, as amended, and
the associated regulations (collectively, the “SBIC Act”).  Portions of the loan
to Borrower will be made under the SBA license and the SBIC Act.  Addendum 1 to
this Agreement outlines various responsibilities of Agent, Lender and Borrower
associated with an SBA loan, and such Addendum 1 is hereby incorporated in this
Agreement.
 
7.16 Post-Closing Items.  Borrower shall use its commercially reasonable efforts
to deliver or cause to be delivered the documents listed on Schedule 7.16 on or
before the corresponding dates set forth on Schedule 7.16.
 
SECTION 8. [RESERVED.]
 
SECTION 9. EVENTS OF DEFAULT
 
The occurrence of any one or more of the following events shall be an Event of
Default:
 
9.1 Payments.  Borrower fails to pay any amount due under this Agreement or any
of the other Loan Documents on the due date, provided, however, that an Event of
Default shall not occur on account of a failure to pay due solely to an
administrative or operational error of Agent in auto-debiting Borrower’s
account, or of any depositary institution that is crediting by ACH or wiring
such payment if Borrower had the funds to make the payment when due and makes
the payment within three (3) days following Borrower’s knowledge of such failure
to pay; or
 
9.2 Covenants.  Borrower breaches or defaults in the performance of any covenant
or Secured Obligation under this Agreement, or any of the other Loan Documents
or any other agreement among Borrower, Agent and Lender, and (a) with respect to
a default under any covenant under this Agreement (other than under Sections 6,
7.4, 7.5, 7.6, 7.7, 7.8, 7.9, 7.14, 7.15 and 7.16), any other Loan Document or
any other agreement among Borrower, Agent and Lender, such default continues for
more than fifteen (15) days after the earlier of the date on which (i) Agent or
Lender has given notice of such default to Borrower and (ii) Borrower has actual
knowledge of such default or (b) with respect to a default under any of Sections
6, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9, 7.14, 7.15 and 7.16, the occurrence of such
default; or

 
9.3 Material Adverse Effect.  A circumstance has occurred that results in a
Material Adverse Effect; or
 
9.4 Representations.  Any representation or warranty made by Borrower in any
Loan Document or in the Warrant shall have been false or misleading in any
material respect; or
 
9.5 Insolvency.  Borrower (A) (i) shall make an assignment for the benefit of
creditors; or (ii) shall be unable to pay its debts as they become due, or be
unable to pay or perform under the Loan Documents, or shall become insolvent; or
(iii) shall file a voluntary petition in bankruptcy; or (iv) shall file any
petition, answer, or document seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future statute, law or regulation pertinent to such
circumstances; or (v) shall seek or consent to or acquiesce in the appointment
of any trustee, receiver, or liquidator of Borrower or of all or any substantial
part (i.e., 33-1/3% or more) of the assets or property of Borrower; or
(vi) shall cease operations of its business as its business has normally been
conducted, or terminate substantially all of its employees; or (vii) Borrower or
its directors or majority shareholders shall take any action initiating any of
the foregoing actions described in clauses (i) through (vi); or (B) either
(i) thirty (30) days shall have expired after the commencement of an involuntary
action against Borrower seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future statute, law or regulation, without such action being dismissed or all
orders or proceedings thereunder affecting the operations or the business of
Borrower being stayed; or (ii) a stay of any such order or proceedings shall
thereafter be set aside and the action setting it aside shall not be timely
appealed; or (iii) Borrower shall file any answer admitting or not contesting
the material allegations of a petition filed against Borrower in any such
proceedings; or (iv) the court in which such proceedings are pending shall enter
a decree or order granting the relief sought in any such proceedings; or (v)
thirty (30) days shall have expired after the appointment, without the consent
or acquiescence of Borrower, of any trustee, receiver or liquidator of Borrower
or of all or any substantial part of the properties of Borrower without such
appointment being vacated; or
 
9.6 Attachments; Judgments.  Any portion of Borrower’s assets is attached or
seized, or a levy is filed against any such assets, or a judgment or judgments
is/are entered for the payment of money, individually or in the aggregate, of at
least $100,000, or Borrower is enjoined or in any way prevented by court order
from conducting any part of its business;
 
 
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9.7 Other Obligations.  The occurrence of any default under any agreement or
obligation of Borrower involving any Indebtedness in excess of $50,000, or the
occurrence of any default under any agreement or obligation of Borrower that
could reasonably be expected to have a Material Adverse Effect;
 
9.8 Enforcement Actions.  The pursuit by the SEC of criminal and/or civil
charges against Borrower and/or any of its current or former officers and
directors in connection with the Bluescience asset sale and any transactions
related thereto, including without limitation the accounting treatment of any
equity or convertible note or notes; or
 
9.9 Notwithstanding any contrary provision of this Agreement, in the event that
the Company shall fail to comply with Section 2.2(e) of this Agreement for any
reason, such failure by the Company to deliver shares of its Common Stock to the
Lender shall not constitute an Event of Default if the Borrower shall make the
applicable Payment (including (a) the principal amount of the applicable
Principal Installment Payment, and (b) the aggregate amount of any increase in
the fair market value of the shares of Common Stock that were to have been
delivered on the payment date from the fair market value of such shares on the
date the Borrower actually makes the applicable payment in Cash) in Cash in lieu
of issuing the Lender the Common Stock contemplated in Section 2.2(e).
 
SECTION 10. REMEDIES
 
10.1 General.  Upon and during the continuance of any one or more Events of
Default, (i) Agent may, at its option, accelerate and demand payment of all or
any part of the Secured Obligations together with a Prepayment Charge and
declare them to be immediately due and payable (provided, that upon the
occurrence of an Event of Default of the type described in Section 9.5, all of
the Secured Obligations shall automatically be accelerated and made due and
payable, in each case without any further notice or act), (ii) Agent may, at its
option, sign and file in Borrower’s name any and all collateral assignments,
notices, control agreements, security agreements and other documents it deems
necessary or appropriate to perfect or protect the repayment of the Secured
Obligations, and in furtherance thereof, Borrower hereby grants Agent an
irrevocable power of attorney coupled with an interest, and (iii) Agent may
notify any of Borrower’s account debtors to make payment directly to Agent,
compromise the amount of any such account on Borrower’s behalf and endorse
Agent’s name without recourse on any such payment for deposit directly to
Agent’s account.  Agent may exercise all rights and remedies with respect to the
Collateral under the Loan Documents or otherwise available to it under the UCC
and other applicable law, including the right to release, hold, sell, lease,
liquidate, collect, realize upon, or otherwise dispose of all or any part of the
Collateral and the right to occupy, utilize, process and commingle the
Collateral.  All Agent’s rights and remedies shall be cumulative and not
exclusive.
 
10.2 Collection; Foreclosure.  Upon the occurrence and during the continuance of
any Event of Default, Agent may, at any time or from time to time, apply,
collect, liquidate, sell in one or more sales, lease or otherwise dispose of,
any or all of the Collateral, in its then condition or following any
commercially reasonable preparation or processing, in such order as Agent may
elect.  Any such sale may be made either at public or private sale at its place
of business or elsewhere.  Borrower agrees that any such public or private sale
may occur upon ten (10) calendar days’ prior written notice to Borrower.  Agent
may require Borrower to assemble the Collateral and make it available to Agent
at a place designated by Agent that is reasonably convenient to Agent and
Borrower.  The proceeds of any sale, disposition or other realization upon all
or any part of the Collateral shall be applied by Agent in the following order
of priorities:
 
 
First, to Agent and Lender in an amount sufficient to pay in full Agent’s and
Lender’s costs and professionals’ and advisors’ reasonable fees and expenses as
described in Section 11.11;

 
 
Second, to Lender in an amount equal to the then unpaid amount of the Secured
Obligations (including principal, interest, and the Default Rate interest), in
such order and priority as Agent may choose in its sole discretion; and

 
 
Finally, after the full, final, and indefeasible payment in Cash of all of the
Secured Obligations, to any creditor holding a junior Lien on the Collateral, or
to Borrower or its representatives or as a court of competent jurisdiction may
direct.

 
 
Agent shall be deemed to have acted reasonably in the custody, preservation and
disposition of any of the Collateral if it complies with the obligations of a
secured party under the UCC.

 
10.3 No Waiver.  Agent shall be under no obligation to marshal any of the
Collateral for the benefit of Borrower or any other Person, and Borrower
expressly waives all rights, if any, to require Agent to marshal any Collateral.
 
10.4 Cumulative Remedies.  The rights, powers and remedies of Agent hereunder
shall be in addition to all rights, powers and remedies given by statute or rule
of law and are cumulative.  The exercise of any one or more of the rights,
powers and remedies provided herein shall not be construed as a waiver of or
election of remedies with respect to any other rights, powers and remedies of
Agent.

 
 
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SECTION 11. MISCELLANEOUS
 
11.1 Severability.  Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
such law, such provision shall be ineffective only to the extent and duration of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
 
11.2 Notice.  Except as otherwise provided herein, any notice, demand, request,
consent, approval, declaration, service of process or other communication
(including the delivery of Financial Statements) that is required, contemplated,
or permitted under the Loan Documents or with respect to the subject matter
hereof shall be in writing, and shall be deemed to have been validly served,
given, delivered, and received upon the earlier of: (i) the day of transmission
by facsimile or hand delivery or delivery by an overnight express service or
overnight mail delivery service; or (ii) the third calendar day after deposit in
the United States mails, with proper first class postage prepaid, in each case
addressed to the party to be notified as follows:
 
(a) If to Agent:
 
HERCULES TECHNOLOGY GROWTH CAPITAL, INC.
 
Legal Department
Attention:  Chief Legal Officer and Chad Norman
400 Hamilton Avenue, Suite 310
Palo Alto, CA  94301
Facsimile:  650-473-9194
Telephone:  650-289-3060
 
(b) If to Lender:
 
HERCULES TECHNOLOGY II, L.P.
Legal Department
Attention:  Chief Legal Officer and Chad Norman
400 Hamilton Avenue, Suite 310
Palo Alto, CA  94301
Facsimile:  650-473-9194
Telephone:  650-289-3060
 
(c) If to Borrower:
 
CHROMADEX CORPORATION
Attention:  Frank Jaksch, Chief Executive Officer
10005 Muirlands Blvd., Suite G
Irvine, CA 92618
Facsimile:  949-356-1601
Telephone:  949-419-0288
 
With a copy to:

Sichenzia Ross Friedman Ference LLP
61 Broadway, 32nd Floor
New York, NY 10006
Attn: Harvey J. Kesner, Esq.
         Edward H. Schauder, Esq.
Facsimile: 212-930-9725
Telephone: 212-930-9700

 
or to such other address as each party may designate for itself by like notice.
 
 
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11.3 Entire Agreement; Amendments.
 
(a) This Agreement and the other Loan Documents constitute the entire agreement
and understanding of the parties hereto in respect of the subject matter hereof
and thereof, and supersede and replace in their entirety any prior proposals,
term sheets, non-disclosure or confidentiality agreements, letters, negotiations
or other documents or agreements, whether written or oral, with respect to the
subject matter hereof or thereof (including Agent’s revised proposal letter
dated August 6, 2014 and accepted by Borrower on August 13, 2014).
 
(b) Neither this Agreement, any other Loan Document, nor any terms hereof or
thereof may be amended, supplemented or modified except in accordance with the
provisions of this Section 11.3(b).  The Required Lenders and Borrower party to
the relevant Loan Document may, or, with the written consent of the Required
Lenders, the Agent and the Borrower party to the relevant Loan Document may,
from time to time, (i) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of the Borrower hereunder or thereunder or
(ii) waive, on such terms and conditions as the Required Lenders or the Agent,
as the case may be, may specify in such instrument, any of the requirements of
this Agreement or the other Loan Documents or any default or Event of Default
and its consequences; provided, however, that no such waiver and no such
amendment, supplement or modification shall (A) forgive the principal amount or
extend the final scheduled date of maturity of any Loan, extend the scheduled
date of any amortization payment in respect of any Term Loan, reduce the stated
rate of any interest or fee payable hereunder) or extend the scheduled date of
any payment thereof, in each case without the written consent of each Lender
directly affected thereby; (B) eliminate or reduce the voting rights of any
Lender under this Section 11.3(b) without the written consent of such Lender;
(C) reduce any percentage specified in the definition of Required Lenders,
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement and the other Loan Documents, release all or
substantially all of the Collateral or release a Borrower from its obligations
under the Loan Documents, in each case without the written consent of all
Lenders; or (D) amend, modify or waive any provision of Section 11.17 without
the written consent of the Agent.  Any such waiver and any such amendment,
supplement or modification shall apply equally to each Lender and shall be
binding upon Borrower, the Lender, the Agent and all future holders of the
Loans.
 
11.4 negotiation and drafting of this Agreement.  In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement.
 
11.5 No Waiver.  The powers conferred upon Agent and Lender by this Agreement
are solely to protect its rights hereunder and under the other Loan Documents
and its interest in the Collateral and shall not impose any duty upon Agent or
Lender to exercise any such powers.  No omission or delay by Agent or Lender at
any time to enforce any right or remedy reserved to it, or to require
performance of any of the terms, covenants or provisions hereof by Borrower at
any time designated, shall be a waiver of any such right or remedy to which
Agent or Lender is entitled, nor shall it in any way affect the right of Agent
or Lender to enforce such provisions thereafter.
 
11.6 Survival.  All agreements, representations and warranties contained in this
Agreement and the other Loan Documents or in any document delivered pursuant
hereto or thereto shall be for the benefit of Agent and Lender and shall survive
the execution and delivery of this Agreement and the expiration or other
termination of this Agreement.
 
11.7 Successors and Assigns.  The provisions of this Agreement and the other
Loan Documents shall inure to the benefit of and be binding on Borrower and its
permitted assigns (if any).  Borrower shall not assign its obligations under
this Agreement or any of the other Loan Documents without Agent’s express prior
written consent, and any such attempted assignment shall be void and of no
effect.  Agent and Lender may assign, transfer, or endorse its rights hereunder
and under the other Loan Documents without prior notice to Borrower, and all of
such rights shall inure to the benefit of Agent’s and Lender’s successors and
assigns; provided, that, prior to the occurrence and the continuance of any
Event of Default, neither Agent nor Lender shall assign, transfer, or endorse
its rights hereunder and under the other Loan Documents to any party other than
an Affiliate of Agent or Lender without Borrower’s prior written consent which
shall not be unreasonably withheld or delayed.
 
11.8 Governing Law.  This Agreement and the other Loan Documents have been
negotiated and delivered to Agent and Lender in the State of California, and
shall have been accepted by Agent and Lender in the State of
California.  Payment to Agent and Lender by Borrower of the Secured Obligations
is due in the State of California.  This Agreement and the other Loan Documents
shall be governed by, and construed and enforced in accordance with, the laws of
the State of California, excluding conflict of laws principles that would cause
the application of laws of any other jurisdiction.
 
11.9 Consent to Jurisdiction and Venue.  All judicial proceedings (to the extent
that the reference requirement of Section 11.10 is not applicable) arising in or
under or related to this Agreement or any of the other Loan Documents may be
brought in any state or federal court located in the State of California.  By
execution and delivery of this Agreement, each party hereto generally and
unconditionally: (a) consents to nonexclusive personal jurisdiction in Santa
Clara County, State of California; (b) waives any objection as to jurisdiction
or venue in Santa Clara County, State of California; (c) agrees not to assert
any defense based on lack of jurisdiction or venue in the aforesaid courts; and
(d) irrevocably agrees to be bound by any judgment rendered thereby in
connection with this Agreement or the other Loan Documents.  Service of process
on any party hereto in any action arising out of or relating to this Agreement
shall be effective if given in accordance with the requirements for notice set
forth in Section 11.2, and shall be deemed effective and received as set forth
in Section 11.2.  Nothing herein shall affect the right to serve process in any
other manner permitted by law or shall limit the right of either party to bring
proceedings in the courts of any other jurisdiction.
 
 
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11.10 Mutual Waiver of Jury Trial / Judicial Reference.
 
(a) Because disputes arising in connection with complex financial transactions
are most quickly and economically resolved by an experienced and expert Person
and the parties wish applicable state and federal laws to apply (rather than
arbitration rules), the parties desire that their disputes be resolved by a
judge applying such applicable laws.  EACH OF BORROWER, AGENT AND LENDER
SPECIFICALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY OF ANY CAUSE OF
ACTION, CLAIM, CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM OR ANY OTHER CLAIM
(COLLECTIVELY, “CLAIMS”) ASSERTED BY BORROWER AGAINST AGENT, LENDER OR THEIR
RESPECTIVE ASSIGNEE OR BY AGENT, LENDER OR THEIR RESPECTIVE ASSIGNEE AGAINST
BORROWER.  This waiver extends to all such Claims, including Claims that involve
Persons other than Agent, Borrower and Lender; Claims that arise out of or are
in any way connected to the relationship among Borrower, Agent and Lender; and
any Claims for damages, breach of contract, tort, specific performance, or any
equitable or legal relief of any kind, arising out of this Agreement, any other
Loan Document.
 
(b) If the waiver of jury trial set forth in Section 11.10(a) is ineffective or
unenforceable, the parties agree that all Claims shall be resolved by reference
to a private judge sitting without a jury, pursuant to Code of Civil Procedure
Section 638, before a mutually acceptable referee or, if the parties cannot
agree, a referee selected by the Presiding Judge of the Santa Clara County,
California.  Such proceeding shall be conducted in Santa Clara County,
California, with California rules of evidence and discovery applicable to such
proceeding.
 
(c) In the event Claims are to be resolved by judicial reference, either party
may seek from a court identified in Section 11.9, any prejudgment order, writ or
other relief and have such prejudgment order, writ or other relief enforced to
the fullest extent permitted by law notwithstanding that all Claims are
otherwise subject to resolution by judicial reference.
 
11.11 Professional Fees.  Borrower promises to pay Agent’s and Lender’s
reasonable fees and expenses necessary to finalize the loan documentation,
including but not limited to reasonable attorneys fees (not estimated to exceed
$15,000), UCC searches, filing costs, and other miscellaneous expenses. In
addition, Borrower promises to pay any and all reasonable attorneys’ and other
professionals’ fees and expenses incurred by Agent and Lender after the Closing
Date in connection with or related to:  (a) the Loan; (b) the administration,
collection, or enforcement of the Loan; (c) the amendment or modification of the
Loan Documents; (d) any waiver, consent, release, or termination under the Loan
Documents; (e) the protection, preservation, audit, field exam, sale, lease,
liquidation, or disposition of Collateral or the exercise of remedies with
respect to the Collateral; (f) any legal, litigation, administrative,
arbitration, or out of court proceeding in connection with or related to
Borrower or the Collateral, and any appeal or review thereof; and (g) any
bankruptcy, restructuring, reorganization, assignment for the benefit of
creditors, workout, foreclosure, or other action related to Borrower, the
Collateral, the Loan Documents, including representing Agent or Lender in any
adversary proceeding or contested matter commenced or continued by or on behalf
of Borrower’s estate, and any appeal or review thereof.
 
11.12 Confidentiality.
 
(a)              Agent and Lender acknowledge that certain items of Collateral
and information provided to Agent and Lender by Borrower are confidential and
proprietary information of Borrower, if and to the extent such information
either (i) is marked as confidential by Borrower at the time of disclosure, or
(ii) should reasonably be understood to be confidential (the “Confidential
Information”).  Accordingly, Agent and Lender agree that any Confidential
Information it may obtain in the course of acquiring, administering, or
perfecting  Agent’s security interest in the Collateral shall not be disclosed
to any other Person or entity in any manner whatsoever, in whole or in part,
without the prior written consent of Borrower, except that Agent and Lender may
disclose any such information:  (i) to its own directors, officers, employees,
accountants, counsel and other professionaladvisors and to its Affiliates if
Agent or Lender in their sole discretion determines that any such party should
have access to such information in connection with such party’s responsibilities
in connection with the Loan or this Agreement and, provided that such recipient
of such Confidential Information either (x) agrees to be bound by the
confidentiality provisions of this paragraph or (y) is otherwise subject to
confidentiality restrictions that reasonably protect against the disclosure of
Confidential Information; (ii) if such information is generally available to the
public; (iii) if required or appropriate in any report, statement or testimony
submitted to any governmental authority having or claiming to have jurisdiction
over Agent or Lender; (iv) if required or appropriate in response to any summons
or subpoena or in connection with any litigation, to the extent permitted or
deemed advisable by Agent’s or Lender’s counsel; (v) to comply with any legal
requirement or law applicable to Agent or Lender; (vi) to the extent reasonably
necessary in connection with the exercise of any right or remedy under any Loan
Document, including Agent’s sale, lease, or other disposition of Collateral
after default; (vii) to any participant or assignee of Agent or Lender or any
prospective participant or assignee; provided, that such participant or assignee
or prospective participant or assignee agrees in writing to be bound by this
Section prior to disclosure; or (viii) otherwise with the prior consent of
Borrower; provided, that any disclosure made in violation of this Agreement
shall not affect the obligations of Borrower or any of its Affiliates or any
guarantor under this Agreement or the other Loan Documents and provided further
that with respect to the disclosure of Confidential Information pursuant to
clauses (iii) through (viii) of this Section 11.12(a), Agent and Lender agree to
give the Borrower prompt notice thereof (to the extent reasonably practicable
and legally permissible) so that the Borrower may seek a protective order or
other appropriate remedy prior to such disclosure.
 
(b)              Agent and Lender further acknowledge that the Borrower is a
publicly traded company.  As such, Agent and Lender agree not to use any
material non-public Confidential Information in connection with the purchase or
sale of the securities of the Borrower.  Lender and Agent further acknowledge
that such use may constitute a violation of securities laws.
 
(c)              Agent and Lender acknowledge and agree that in the event they
fail to comply with their obligations hereunder, Borrower shall, in addition to
any other remedies available to it at law or in equity, be entitled to seek
specific performance to enforce the terms of this Section 11.12.
 
 
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11.13  Assignment of Rights.  Borrower acknowledges and understands that Agent
or Lender may sell and assign all or part of its interest hereunder and under
the Loan Documents to any Person or entity (an “Assignee”), provided, that,
prior to the occurrence and the continuance of any Event of Default, neither
Agent nor Lender shall assign, transfer, or endorse its rights hereunder and
under the other Loan Documents to any party other than an Affiliate of Agent or
Lender without Borrower’s prior written consent which shall not be unreasonably
withheld or delayed.  After any such assignment the term “Agent” or “Lender” as
used in the Loan Documents shall mean and include such Assignee, and such
Assignee shall be vested with all rights, powers and remedies of Agent and
Lender hereunder with respect to the interest so assigned; but with respect to
any such interest not so transferred, Agent and Lender shall retain all rights,
powers and remedies hereby given.  No such assignment by Agent or Lender shall
relieve Borrower of any of its obligations hereunder.  Lender agrees that in the
event of any transfer by it of the Note(s)(if any), it will endorse thereon a
notation as to the portion of the principal of the Note(s), which shall have
been paid at the time of such transfer and as to the date to which interest
shall have been last paid thereon.
 
11.14 Revival of Secured Obligations.  This Agreement and the Loan Documents
shall remain in full force and effect and continue to be effective if any
petition is filed by or against Borrower for liquidation or reorganization, if
Borrower becomes insolvent or makes an assignment for the benefit of creditors,
if a receiver or trustee is appointed for all or any significant part of
Borrower’s assets, or if any payment or transfer of Collateral is recovered from
Agent or Lender.  The Loan Documents and the Secured Obligations and Collateral
security shall continue to be effective, or shall be revived or reinstated, as
the case may be, if at any time payment and performance of the Secured
Obligations or any transfer of Collateral to Agent, or any part thereof is
rescinded, avoided or avoidable, reduced in amount, or must otherwise be
restored or returned by, or is recovered from, Agent, Lender or by any obligee
of the Secured Obligations, whether as a “voidable preference,” “fraudulent
conveyance,” or otherwise, all as though such payment, performance, or transfer
of Collateral had not been made.  In the event that any payment, or any part
thereof, is rescinded, reduced, avoided, avoidable, restored, returned, or
recovered, the Loan Documents and the Secured Obligations shall be deemed,
without any further action or documentation, to have been revived and reinstated
except to the extent of the full, final, and indefeasible payment to Agent or
Lender in Cash.
 
11.15 Counterparts.  This Agreement and any amendments, waivers, consents or
supplements hereto may be executed in any number of counterparts, and by
different parties hereto in separate counterparts, each of which when so
delivered shall be deemed an original, but all of which counterparts shall
constitute but one and the same instrument.
 
11.16 No Third Party Beneficiaries.  No provisions of the Loan Documents are
intended, nor will be interpreted, to provide or create any third-party
beneficiary rights or any other rights of any kind in any Person other than
Agent, Lender and Borrower unless specifically provided otherwise herein, and,
except as otherwise so provided, all provisions of the Loan Documents will be
personal and solely among Agent, the Lender and the Borrower.
 
11.17 Agency.
 
(a) Lender hereby irrevocably appoints Hercules Technology Growth Capital, Inc.
to act on its behalf as the Agent hereunder and under the other Loan Documents
and authorizes the Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Agent by the terms hereof or thereof, together
with such actions and powers as are reasonably incidental thereto.
 
(b) Lender  agrees to indemnify the Agent in its capacity as such (to the extent
not reimbursed by Borrower and without limiting the obligation of Borrower to do
so), according to its respective Term Commitment percentages (based upon the
total outstanding Term Loan Commitments) in effect on the date on which
indemnification is sought under this Section 11.7, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever that may at any time be
imposed on, incurred by or asserted against the Agent in any way relating to or
arising out of, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent under
or in connection with any of the foregoing; The agreements in this Section shall
survive the payment of the Loans and all other amounts payable hereunder.
 
(c) Agent in Its Individual Capacity.  The Person serving as the Agent hereunder
shall have the same rights and powers in its capacity as a Lender as any other
Lender and may exercise the same as though it were not the Agent and the term
“Lender” shall, unless otherwise expressly indicated or unless the context
otherwise requires, include each such Person serving as Agent hereunder in its
individual capacity.
 
(d) Exculpatory Provisions.  The Agent shall have no duties or obligations
except those expressly set forth herein and in the other Loan
Documents.  Without limiting the generality of the foregoing, the Agent shall
not:
 
(i)  
be subject to any fiduciary or other implied duties, regardless of whether any
default or any Event of Default has occurred and is continuing;

 
(ii)  
have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or
by the other Loan Documents that the Agent is required to exercise as directed
in writing by the Lender, provided that the Agent shall not be required to take
any action that, in its opinion or the opinion of its counsel, may expose the
Agent to liability or that is contrary to any Loan Document or applicable law;
and

 
(iii)  
except as expressly set forth herein and in the other Loan Documents, have any
duty to disclose, and the Agent shall not be liable for the failure to disclose,
any information relating to the Borrower or any of its Affiliates that is
communicated to or obtained by any Person serving as the Agent or any of its
Affiliates in any capacity.

 
 
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(e) The Agent shall not be liable for any action taken or not taken by it (i)
with the consent or at the request of the Lender or as the Agent shall believe
in good faith shall be necessary, under the circumstances or (ii) in the absence
of its own gross negligence or willful misconduct.
 
(f) The Agent shall not be responsible for or have any duty to ascertain or
inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement or any other Loan Document, (ii) the contents of
any certificate, report or other document delivered hereunder or thereunder or
in connection herewith or therewith, (iii) the performance or observance of any
of the covenants, agreements or other terms or conditions set forth herein or
therein or the occurrence of any default or Event of Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Section 4 or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the Agent.
 
(g) Reliance by Agent.  Agent may rely, and shall be fully protected in acting,
or refraining to act, upon, any resolution, statement, certificate, instrument,
opinion, report, notice, request, consent, order, bond or other paper or
document that it has no reason to believe to be other than genuine and to have
been signed or presented by the proper party or parties or, in the case of
cables, telecopies and telexes, to have been sent by the proper party or
parties.  In the absence of its gross negligence or willful misconduct, Agent
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished to
Agent and conforming to the requirements of the Loan Agreement or any of the
other Loan Documents.  Agent may consult with counsel, and any opinion or legal
advice of such counsel shall be full and complete authorization and protection
in respect of any action taken, not taken or suffered by Agent hereunder or
under any Loan Documents in accordance therewith.  Agent shall have the right at
any time to seek instructions concerning the administration of the Collateral
from any court of competent jurisdiction.  Agent shall not be under any
obligation to exercise any of the rights or powers granted to Agent by this
Agreement, the Loan Agreement and the other Loan Documents at the request or
direction of Lenders unless Agent shall have been provided by Lender with
adequate security and indemnity against the costs, expenses and liabilities that
may be incurred by it in compliance with such request or direction.
 
 
11.18 Publicity.  (a)  Borrower consents to the publication and use by Agent or
Lender and any of its member businesses and Affiliates of (i) Borrower's name
(including a brief description of the relationship among Borrower, Agent and
Lender) and logo and a hyperlink to Borrower’s web site, separately or together,
in Agent or Lender’s written and oral presentations, advertising, promotional
and marketing materials, client lists, public relations materials or on its web
site (together, the "Lender Publicity Materials"); (ii) the names of officers of
Borrower in the Lender Publicity Materials; and (iii) Borrower’s name,
trademarks or servicemarks in any news release concerning Agent or Lender.  Any
such publicity contemplated pursuant to this Section 11.18 shall be sent to
Borrower for its prior written approval, such approval not to be unreasonably
withheld or delayed.
 
(b)  Except as required to be disclosed by law, legal or judicial process or by
any governmental or regulatory body, neither Borrower nor any of its member
businesses and Affiliates shall, without Agent’s consent, publicize or use (i)
Agent’s or Lender's name (including a brief description of the relationship
among Borrower, Agent and Lender), logo or hyperlink to Agent’s or Lender’s web
site, separately or together, in written and oral presentations, advertising,
promotional and marketing materials, client lists, public relations materials or
on its web site (together, the "Borrower Publicity Materials"); (ii) the names
of officers of Agent or Lender in the Borrower Publicity Materials; and (iii)
Agent’s or Lender’s name, trademarks, servicemarks in any news release
concerning Borrower.  To the extent reasonably practicable in compliance with
the Borrower's regulatory requirements, the Borrower shall provide Agent with a
draft of its Current Report on Form 8-K (the "Required 8-K") in connection with
its disclosure requirements of the transactions contemplated by this Agreement
and the Loan Documents for their review and comment.  Agent shall use its
commercially reasonable efforts to provide any comments to the Borrower within
one business day. Notwithstanding the foregoing, the Borrower shall be entitled
to file the Required 8-K with the SEC within four (4) business days after the
execution and delivery of this Agreement.
 
 
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(SIGNATURES TO FOLLOW)
 

IN WITNESS WHEREOF, Borrower, Agent and Lender have duly executed and delivered
this Loan and Security Agreement as of the day and year first above written.
 
BORROWER:
 
 
CHROMADEX CORPORATION
 
Signature:    /s/ Thomas C. Varvaro
Print Name:  Thomas C. Varvaro
Title:             CFO
 
CHROMADEX, INC.
 
Signature:     /s/ Thomas C. Varvaro
Print Name:   Thomas C. Varvaro
Title:              CFO
 
CHROMADEX ANALYTICS, INC.
 
Signature:    /s/ Thomas C. Varvaro
Print Name:  Thomas C. Varvaro
Title:             CFO
 
SPHERIX CONSULTING, INC.
 
Signature:     /s/ Thomas C. Varvaro
Print Name:   Thomas C. Varvaro
Title:              CFO
 
   

Accepted in Palo Alto, California:
 
AGENT:
 
HERCULES TECHNOLOGY GROWTH CAPITAL, INC.
 
By:   /s/ Ben Bang
         Ben Bang, Associate General Counsel
 
LENDER:
HERCULES TECHNOLOGY II, L.P.,
a Delaware limited partnership
 
By:   Hercules Technology SBIC Management, LLC, its General Partner
By:   Hercules Technology Growth Capital, Inc., its Manager
By:   /s/ Ben Bang
          Ben Bang, Associate General Counsel

 
 
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Table of Addenda, Exhibits and Schedules
 
Addendum 1:    
SBA Provisions

 
Exhibit A:
Advance Request

    
                
Attachment to Advance Request

 
Exhibit B:
Term Note

 
Exhibit C:
Name, Locations, and Other Information for Borrower

 
Exhibit D:
Borrower’s Patents, Trademarks, Copyrights and Licenses

 
Exhibit E:
Borrower’s Deposit Accounts and Investment Accounts

 
Exhibit F:
Compliance Certificate

 
Exhibit G:
Joinder Agreement

 
Exhibit H:
ACH Debit Authorization Agreement

 
Exhibit I-1:
Borrower Conversion Election Notice

 
Exhibit I-2:
Lender Conversion Election Notice

 
Exhibit J:
Warrant Agreement

 
Schedule 1
Subsidiaries

Schedule 1.1
Commitments

Schedule 1A
Existing Permitted Indebtedness

Schedule 1B
Existing Permitted Investments

Schedule 1C
Existing Permitted Liens

Schedule 5.5
Actions Before Governmental Authorities

Schedule 5.10
Intellectual Property

Schedule 5.14
Capitalization

Schedule 7.16
Post-Closing Items

 
 
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ADDENDUM 1 to LOAN AND SECURITY AGREEMENT
 
(a) Borrower’s Business.  For purposes of this Addendum 1, Borrower shall be
deemed to include its “affiliates” as defined in Title 13 Code of Federal
Regulations Section 121.103.  Borrower represents and warrants to Agent and
Lender as of the Closing Date and covenants to Agent and Lender for a period of
one year after the Closing Date with respect to subsections 2, 3, 4, 5, 6 and 7
below, as follows:
 
1.  
Size Status.  Borrower does not have tangible net worth in excess of $18 million
or average net income after Federal income taxes (excluding any carry-over
losses) for the preceding two completed fiscal years in excess of $6 million;

 
2.  
No Relender.  Borrower’s primary business activity does not involve, directly or
indirectly, providing funds to others, purchasing debt obligations, factoring,
or long-term leasing of equipment with no provision for maintenance or repair;

 
3.  
No Passive Business.  Borrower is engaged in a regular and continuous business
operation (excluding the mere receipt of payments such as dividends, rents,
lease payments, or royalties).  Borrower’s employees are carrying on the
majority of day to day operations.  Borrower will not pass through substantially
all of the proceeds of the Loan to another entity;

 
4.  
No Real Estate Business.  Borrower is not classified under Major Group 65 (Real
Estate) or Industry No. 1531 (Operative Builders) of the SIC Manual.  The
proceeds of the Loan will not be used to acquire or refinance real property
unless Borrower (x) is acquiring an existing property and will use at least 51
percent of the usable square footage for its business purposes; (y) is building
or renovating a building and will use at least 67 percent of the usable square
footage for its business purposes; or (z) occupies the subject property and uses
at least 67 percent of the usable square footage for its business purposes.

 
5.  
No Project Finance.  Borrower’s assets are not intended to be reduced or
consumed, generally without replacement, as the life of its business progresses,
and the nature of Borrower’s business does not require that a stream of cash
payments be made to the business's financing sources, on a basis associated with
the continuing sale of assets (e.g., real estate development projects and oil
and gas wells).  The primary purpose of the Loan is not to fund production of a
single item or defined limited number of items, generally over a defined
production period, where such production will constitute the majority of the
activities of Borrower (e.g., motion pictures and electric generating plants).

 
6.  
No Farm Land Purchases.  Borrower will not use the proceeds of the Loan to
acquire farm land which is or is intended to be used for agricultural or
forestry purposes, such as the production of food, fiber, or wood, or is so
taxed or zoned.

 
7.  
No Foreign Investment.  The proceeds of the Loan will not be used substantially
for a foreign operation.  At the time of the Loan, Borrower will not have more
than 49 percent of its employees or tangible assets located outside the United
States.  The representation in this subsection (7) is made only as of the date
hereof and shall not continue for one year as contemplated in the first sentence
of this Section 1.

 
(b) Small Business Administration Documentation.  Agent and Lender acknowledge
that Borrower completed, executed and delivered to Agent SBA Forms 480, 652 and
1031 (Parts A and B) together with a business plan showing Borrower’s financial
projections (including balance sheets and income and cash flows statements) for
the period described therein and a written statement (whether included in the
purchase agreement or pursuant to a separate statement) from Agent regarding its
intended use of proceeds from the sale of securities to Lender (the “Use of
Proceeds Statement”).  Borrower represents and warrants to Agent and Lender that
the information regarding Borrower and its affiliates set forth in the SBA
Form 480, Form 652 and Form 1031 and the Use of Proceeds Statement delivered as
of the Closing Date is accurate and complete.
 
(c) Inspection.  The following covenants contained in this Section (c) are
intended to supplement and not to restrict the related provisions of the Loan
Documents.  Subject to the preceding sentence, Borrower will permit, for so long
as Lender holds any debt or equity securities of Borrower, Agent, Lender or
their representative, at Agent’s or Lender’ expense, and examiners of the SBA to
visit and inspect the properties and assets of Borrower, to examine its books of
account and records, and to discuss Borrower’s affairs, finances and accounts
with Borrower’s officers, senior management and accountants, all at such
reasonable times as may be requested by Agent or Lender or the SBA.
 
(d) Annual Assessment.  Promptly after the end of each calendar year (but in any
event prior to February 28 of each year) and at such other times as may be
reasonably requested by Agent or Lender, Borrower will deliver to Agent a
written assessment of the economic impact of Lender’s investment in Borrower,
specifying the full-time equivalent jobs created or retained in connection with
the investment, the impact of the investment on the businesses of Borrower in
terms of expanded revenue and taxes, other economic benefits resulting from the
investment (such as technology development or commercialization, minority
business development, or expansion of exports) and such other information as may
be required regarding Borrower in connection with the filing of Lender’s SBA
Form 468.   Lender will assist Borrower with preparing such assessment.  In
addition to any other rights granted hereunder, Borrower will grant Agent and
Lender and the SBA access to Borrower’s books and records for the purpose of
verifying the use of such proceeds.  Borrower also will furnish or cause to be
furnished to Agent and Lender such other information regarding the business,
affairs and condition of Borrower as Agent or Lender may from time to time
reasonably request.
 
 
-23-

--------------------------------------------------------------------------------

 
 
(e) Use of Proceeds.  Borrower will use the proceeds from the Loan only for
purposes set forth in Section 7.15.  Borrower will deliver to Agent from time to
time promptly following Agent’s request, a written report, certified as correct
by Borrower's Chief Financial Officer, verifying the purposes and amounts for
which proceeds from the Loan have been disbursed.  Borrower will supply to Agent
such additional information and documents as Agent reasonably requests with
respect to its use of proceeds and will permit Agent and Lender and the SBA to
have access to any and all Borrower records and information and personnel as
Agent deems necessary to verify how such proceeds have been or are being used,
and to assure that the proceeds have been used for the purposes specified in
Section 7.15.
 
(f) Activities and Proceeds.  Neither Borrower nor any of its affiliates (if
any) will engage in any activities or use directly or indirectly the proceeds
from the Loan for any purpose for which a small business investment company is
prohibited from providing funds by the SBIC Act, including 13 C.F.R. §107.720. 
Without obtaining the prior written approval of Agent, Borrower will not change
within 1 year of the date hereof, Borrower’s current business activity to a
business activity which a licensee under the SBIC Act is prohibited from
providing funds by the SBIC Act.
 
(g) Redemption Provisions.  Notwithstanding any provision to the contrary
contained in the Certificate of Incorporation of Borrower, as amended from time
to time (the “Charter”), if, pursuant to the redemption provisions contained in
the Charter, Lender is entitled to a redemption of its warrant pursuant to the
Warrant Agreement, such redemption (in the case of Lender) will be at a price
equal to the redemption price set forth in the Charter (the “Existing Redemption
Price”).  If, however, Lender delivers written notice to Borrower that the then
current regulations promulgated under the SBIC Act prohibit payment of the
Existing Redemption Price in the case of an SBIC (or, if applied, the Existing
Redemption Price would cause the common stock to lose its classification as an
“equity security” and Lender has determined that such classification is
unadvisable), the amount Lender will be entitled to receive shall be the greater
of (i) fair market value of the securities being redeemed taking into account
the rights and preferences of such securities plus any costs and expenses of the
Lender incurred in making or maintaining such warrant, and (ii) the Existing
Redemption Price where the amount of accrued but unpaid dividends payable to the
Lender is limited to Borrower's earnings plus any costs and expenses of the
Lender incurred in making or maintaining such warrant; provided, however, the
amount calculated in subsections (i) or (ii) above shall not exceed the Existing
Redemption Price.
 
(h) Compliance and Resolution.   Borrower agrees that a failure to comply with
Borrower’s obligations under this Addendum, or any other set of facts or
circumstances where it has been asserted by any governmental regulatory agency
(or Agent or Lender believes that there is a substantial risk of such assertion)
that Agent, Lender and their affiliates are not entitled to hold, or exercise
any significant right with respect to, any securities issued to Lender by
Borrower, will constitute a breach of the obligations of Borrower under the
financing agreements among Borrower, Agent and Lender.  In the event of (i) a
failure to comply with Borrower’s obligations under this Addendum; or (ii) an
assertion by any governmental regulatory agency (or Agent or Lender believes
that there is a substantial risk of such assertion) of a failure to comply with
Borrower’s obligations under this Addendum, then (i) Agent, Lender and Borrower
will meet and resolve any such issue in good faith to the satisfaction of
Borrower, Agent, Lender, and any governmental regulatory agency, and (ii) upon
request of Lender or Agent, Borrower will cooperate and assist with any
assignment of the financing agreements among Hercules Technology II, L.P., and
Hercules Technology Growth Capital, Inc.
 
 
-24-

--------------------------------------------------------------------------------

 

EXHIBIT A
 
ADVANCE REQUEST
 
To:           Agent:                                                                           Date:                      __________,
20__
 
Hercules Technology Growth Capital, Inc. (the “Agent”)
 
400 Hamilton Avenue, Suite 310
Palo Alto, CA 94301
Facsimile:  650-473-9194
Attn:
 
ChromaDex Corporation (“Borrower”) hereby requests from Hercules Technology
Growth Capital, Inc. (“Agent”), as agent for Hercules Technology II, L.P.
(“Lender”) an Advance in the amount of _____________________ Dollars
($________________) on ______________, _____ (the “Advance Date”) pursuant to
the Loan and Security Agreement among Borrower, Agent and Lender (the
“Agreement”). Capitalized words and other terms used but not otherwise defined
herein are used with the same meanings as defined in the Agreement.
 
Please:
 
(a)           Issue a check payable to
Borrower                                                                ________
 
or
 
(b)           Wire Funds to Borrower’s
account                                                                ________
 
Bank:                        _____________________________
Address:                    _____________________________
                                  _____________________________
 
ABA Number:          _____________________________
Account Number:     _____________________________
Account Name:        _____________________________
 
Borrower represents that the conditions precedent to the Advance set forth in
the Agreement are satisfied and shall be satisfied upon the making of such
Advance, including but not limited to:  (i) that no event that has had or could
reasonably be expected to have a Material Adverse Effect has occurred and is
continuing; (ii) that the representations and warranties set forth in the
Agreement and in the Warrant are and shall be true and correct in all material
respects on and as of the Advance Date with the same effect as though made on
and as of such date, except to the extent such representations and warranties
expressly relate to an earlier date; (iii) that Borrower is in compliance with
all the terms and provisions set forth in each Loan Document on its part to be
observed or performed; and (iv) that as of the Advance Date, no fact or
condition exists that would (or would, with the passage of time, the giving of
notice, or both) constitute an Event of Default under the Loan Documents.
 
Borrower hereby represents that Borrower’s corporate status and locations have
not changed since the date of the Agreement or, if the Attachment to this
Advance Request is completed, are as set forth in the Attachment to this Advance
Request.
 
Borrower agrees to notify Agent promptly before the funding of the Loan if any
of the matters which have been represented above shall not be true and correct
on the Borrowing Date and if Agent has received no such notice before the
Advance Date then the statements set forth above shall be deemed to have been
made and shall be deemed to be true and correct as of the Advance Date.
 
Executed as of [              ], 20[   ].
 
BORROWER: CHROMADEX CORPORATION
 
SIGNATURE:________________________
 
TITLE:_____________________________
 
PRINT NAME:______________________
 
 
-25-

--------------------------------------------------------------------------------

 

ATTACHMENT TO ADVANCE REQUEST
 
Dated: _______________________
 
Borrower hereby represents and warrants to Agent that Borrower’s current name
and organizational status is as follows:
 
 
Name:
ChromaDex Corporation

 
 
Type of organization:
Corporation

 
 
State of organization:
Delaware

 
 
Organization file number:

 
Borrower hereby represents and warrants to Agent that the street addresses,
cities, states and postal codes of its current locations are as follows:
 
 
-26-

--------------------------------------------------------------------------------

 

EXHIBIT B
 
SECURED TERM PROMISSORY NOTE
 
$[  ],000,000
Advance Date:  ___ __, 20[  ]
 
Maturity Date:  _____ ___, 20[ ]

FOR VALUE RECEIVED, ChromaDex Corporation, a Delaware corporation, for itself
and each of its Subsidiaries (the “Borrower”) hereby promises to pay to the
order of Hercules Technology II, L.P., a Delaware limited partnership or the
holder of this Note (the “Lender”) at 400 Hamilton Avenue, Suite 310, Palo Alto,
CA 94301 or such other place of payment as the holder of this Secured Term
Promissory Note (this “Promissory Note”) may specify from time to time in
writing, in lawful money of the United States of America, the principal amount
of [  ] Million Dollars ($[  ],000,000) or such other principal amount as Lender
has advanced to Borrower, together with interest at the Term Loan Interest Rate
as such term is defined in that that certain Loan and Security Agreement dated
September 29, 2014, by and among Borrower, Hercules Technology Growth Capital,
Inc., a Maryland corporation (the “Agent”) and the several banks and other
financial institutions or entities from time to time party thereto as lender (as
the same may from time to time be amended, modified or supplemented in
accordance with its terms, the “Loan Agreement”).
 
This Promissory Note is the Term Note referred to in, and is executed and
delivered in connection with, the Loan Agreement, and is entitled to the benefit
and security of the Loan Agreement and the other Loan Documents (as defined in
the Loan Agreement), to which reference is made for a statement of all of the
terms and conditions thereof.  All payments shall be made in accordance with the
Loan Agreement.  All terms defined in the Loan Agreement shall have the same
definitions when used herein, unless otherwise defined herein.  An Event of
Default under the Loan Agreement shall constitute a default under this
Promissory Note.
 
Borrower waives presentment and demand for payment, notice of dishonor, protest
and notice of protest under the UCC or any applicable law.   Borrower agrees to
make all payments under this Promissory Note without setoff, recoupment or
deduction and regardless of any counterclaim or defense.  This Promissory Note
has been negotiated and delivered to Lender and is payable in the State of
California.  This Promissory Note shall be governed by and construed and
enforced in accordance with, the laws of the State of California, excluding any
conflicts of law rules or principles that would cause the application of the
laws of any other jurisdiction.
 

 BORROWER FOR ITSELF AND      ON BEHALF OF ITS SUBSIDIARIES:    CHROMADEX
CORPORATION      By:      Title:

 
 
-27-

--------------------------------------------------------------------------------

 
 
EXHIBIT C
 
NAME, LOCATIONS, AND OTHER INFORMATION FOR BORROWER
 
1.  Borrower represents and warrants to Agent that Borrower’s current name and
organizational status as of the Closing Date is as follows:
 
Name:
ChromaDex Corporation

 
 
Type of organization:
Corporation

 
 
State of organization:
Delaware

 
 
 
Organization file number:

 
2.  Borrower represents and warrants to Agent that for five (5) years prior to
the Closing Date, Borrower did not do business under any other name or
organization or form except the following:
 
Name:
 
Used during dates of:
 
Type of Organization:
 
State of organization:
 
Organization file Number:
 
Borrower’s fiscal year ends on December 31
 
Borrower’s federal employer tax identification number is: 33-0880006
 
          3.   Borrower represents and warrants to Agent that its chief
executive office is located at 10005 Muirlands Blvd., Suite G, Irvine, CA 92618.

 
-28-

--------------------------------------------------------------------------------

 

EXHIBIT D
 
BORROWER’S PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES
 
Patents and Patent Applications
 
PATENT APP. NUMBER
PATENT NUMBER
TITLE OF PATENT
ISSUE DATE
APP DATE
ASSIGNEE
US
61/535143
 
PTEROSTILBENE AND STATIN COMBINATION FOR TREATMENT OF METABOLIC DISEASE,
CARDIOVASCULAR DISEASE, AND INFLAMMATION
 
9/15/2011
CHROMADEX, INC.
US
PCT/US2013/039105
 
PTEROSTILBENE AND CURCUMIN COMBINATION FOR TREATMENT OF OXIDATIVE STRESS AND
INFLAMMATION
 
5/1/2013
CHROMADEX, INC.
US
61/484977
 
METHOD FOR INDUCING UDP-GLUCURONOSYLTRANSFERASE ACTIVITY USING PTEROSTILBENE
 
5/11/2011
CO-INVENTOR WITH UNIVERSITY OF CALIFORNIA
 
US
6852342
COMPOUNDS FOR ALTERING FOOD INTAKE IN HUMANS
2/8/2005
 
CO-INVENTOR WITH AVOCA, INC.

 
 
Trademarks and Trademark Applications
 
·  Trademarks registered or trademark applications submitted by ChromaDex, Inc.
 
o  US:         ChromaDex®, Puenergy®, pTeroPure®, ProC3G®, anthopure®, NIAGENTM,
NUTRAGAC®, pTeroBerry®, ,

o  MEXICO: pTeroPure

Copyrights
 
None.

Licenses to Use Trademarks, Patents and Copyrights of Others
 
Geography
Patent App #
Patent #
Title of Patent
Patent Issue Date
Patent Application Date
Assignee
US
 
8106184
Nicotinoyl riboside compositions and methods of use
1/31/2012
 
Cornell
US
 
8114626
Yeast strain and method for using the same to produce nicotinamide riboside
2/14/2012
 
Dartmouth
US
 
8197807
Nicotinamide riboside kinase compositions and methods for using the same
6/12/2012
 
Dartmouth
US
 
8383086
Nicotinamide riboside kinase compositions and methodsfor using the same
2/26/2013
 
Dartmouth
US
 
7776326
Methods and compositions for treating neuropathies
8/17/2010
 
Washington University
US
11/542832
 
Yeast strain and method for using the same
to produce nicotinamide riboside
 
3/18/2010
Dartmouth
US
13/260392
 
Yeast strain and method for using the same
to produce nicotinamide riboside
 
3/18/2010
Dartmouth
US
20120164270 (A1)
 
Yeast strain and method for using the
same to produce nicotinamide riboside
 
6/28/2012
Dartmouth
PCT
US2010/027792
 
Yeast strain and method for using the
same to produce nicotinamide riboside
 
3/18/2010
Dartmouth

 
 
-29-

--------------------------------------------------------------------------------

 
 
WO
2010111111 A1
 
Yeast strain and method for using the
same to produce nicotinamide riboside
 
3/18/2010
Dartmouth
US
60/886854
 
Methods and compositions for treating neuropathies
 
1/28/2008
Washington University
US
12/524718
 
Methods and compositions for treating neuropathies
 
1/28/2008
Washington University
US
20100047177 A1
 
Methods and compositions for treating neuropathies
 
2/25/2010
Washington University
PCT
2008/001085
 
Methods and compositions for treating neuropathies
 
1/28/2008
Washington University
WO
2008091710 A2
 
Methods and compositions for treating neuropathies
 
1/28/2008
Washington University
CA
2676609
 
Methods and compositions for treating neuropathies
 
1/28/2008
Washington University
MX
20090008022
 
Methods and compositions for treating neuropathies
   
Washington University
US
2012172584 A1
 
Nicotinoyl riboside compositions and methods of use
 
1/17/2012
Cornell
IN
4525Delnp/2008
 
Nicotinoyl riboside compositions and methods of use
 
11/17/2006
Cornell
EP
1957086 A2
 
Nicotinoyl riboside compositions and methods of use
 
11/17/2006
Cornell
CN
101360421 A
 
Nicotinoyl riboside compositions and methods of use
 
11/17/2006
Cornell
AU
2006238858 A2
 
Nicotinamide riboside kinase compositions
and methods for using the same
3/14/2013
 
Dartmouth
CA
2609633
 
Nicotinamide riboside kinase compositions
and methods for using the same
 
4/20/2006
Dartmouth
US
60/577233
 
Methods and compositions for treating neuropathies
 
6/4/2004
Washington University
US
60/641330
 
Methods and compositions for treating neuropathies
 
1/4/2005
Washington University
PCT
2005/019524
 
Methods and compositions for treating neuropathies
 
6/3/2005
Washington University
WO
2006001982 A2
 
Methods and compositions for treating neuropathies
 
6/3/2005
Washington University
ZL
200580018114.8
 
Methods and compositions for treating neuropathies
   
Washington University
CN
1964627
 
Methods and compositions for treating neuropathies
10/19/2011
 
Washington University
US
11/144358
 
Methods and compositions for treating neuropathies
 
6/3/2005
Washington University
US
12/790722
 
Methods and compositions for treating neuropathies
 
6/3/2005
Washington University
US
20100272702 A1
 
Methods and compositions for treating neuropathies
 
6/3/2005
Washington University
EP
20050790283
 
Methods and compositions for treating neuropathies
 
    6/3/2005
Washington University
EP
1755391 A2
 
Methods and compositions for treating neuropathies
 
6/3/2005
Washington University
US
 
8133917
Pterostilbene as an agonist for the peroxisome proliferator-activated receptor
alpha isoform
3/13/2012
 
University of Mississippi and U.S. Depart of Agriculture
US
 
8252845
Pterostilbene as an agonist for the peroxisome proliferator-activated receptor
alpha isoform
2/26/2013
 
University of Mississippi and U.S. Depart of Agriculture
US
12/136341
 
Method to Ameliorate Oxidative Stress and Improve Working Memory via
Pterostilbene Administration
 
8/8/2011
University of Mississippi and U.S. Depart of Agriculture

 
 
-30-

--------------------------------------------------------------------------------

 
 
US
13/105470
 
Anxiolytic Effects of Pterostilbene
 
5/11/2011
University of Mississippi and U.S. Depart of Agriculture
KOR
10-2012-7013257
 
Use of pterostilbene as medicament for prevention and/or treatment of skin
diseases, damages or injuries or as cosmetic
 
2012
Green Molecular S.L
MX
2012/005013
 
Use of pterostilbene as medicament for prevention and/or treatment of skin
diseases, damages or injuries or as cosmetic
 
2012
Green Molecular S.L.
RUS
2012122241
 
Use of pterostilbene as medicament for prevention and/or treatment of skin
diseases, damages or injuries or as cosmetic
 
2012
Green Molecular S.L
US
13/504056
 
Use of pterostilbene as medicament for prevention and/or treatment of skin
diseases, damages or injuries or as cosmetic
 
10/29/2010
Green Molecular S.L.
US
 
8227510
Combine use of pterostilbene and quercetin for the production of cancer
treatment medicaments
7/24/2012
 
Green Molecular S.L.
EU
 
5774387.4
Combine use of pterostilbene and quercetin for the production of cancer
treatment medicaments
3/18/2009
 
Green Molecular S.L.
EU
 
10775793.2
Use of pterostilbene as medicament for prevention and/or treatment of skin
diseases, damages or injuries or as cosmetic
7/24/2013
 
Green Molecular S.L.
CA
2778151
 
Use of pterostilbene as medicament for prevention and/or treatment of skin
diseases, damages or injuries or as cosmeting
 
10/29/2010
Green Molecular S.L.
CHN
201080048865.5
 
Use of pterostilbene as medicament for prevention and/or treatment of skin
diseases, damages or injuries or as cosmetic
   
Green Molecular S.L.
ISRL
219318
 
Use of pterostilbene as medicament for prevention and/or treatment of skin
diseases, damages or injuries or as cosmetic
   
Green Molecular S.L.
JPN
2012-535862
 
Use of pterostilbene as medicament for prevention and/or treatment of skin
diseases, damages or injuries or as cosmetic
 
2012
Green Molecular S.L.
US
61/484977
 
Method for Inducing UDP-lucuronosyltrasferase Activity Using Pterostilbene
 
5/11/2011
UC Regents
US
13/466,827
 
Method for Inducing UDP-lucuronosyltrasferase Activity Using Pterostilbene
 
5/8/2012
UC Regents
PCT
US2012/064993
 
Method for Inducing UDP-lucuronosyltrasferase Activity Using Pterostilbene
 
11/14/2012
UC Regents
US
62/046,065
 
Prevention of UV-induced hyperplasia and
DNA damage in skin by Pterostilbene
 
9/4/2014
UC Regents
US
62/046,068
 
Prevention of UV-induced loss of barrier
function in skin by Pterostilbene
 
9/4/2014
UC Regents
US
61/249188
 
Use of Polyphenols in the Treatment of Cancer
 
10/6/2009
Green Molecular S.L.
US
 
 
7338791
Production of Flavonoids by Recombinant
Microorganisms
3/4/2008
 
State Univ of New York

 
 
-31-

--------------------------------------------------------------------------------

 
 
EXHIBIT E
 
BORROWER’S DEPOSIT ACCOUNTS AND INVESTMENT ACCOUNTS
 
Deposit Accounts
 
Institution Name and Address
Account Number
Average Balance in Account
Name of Account Owner
     Wells Fargo N.A.
 
     $900,000
ChromaDex, Inc.
     Wells Fargo N.A.
 
     $0 (Zero Balance Account)
ChromaDex Analytics, Inc.
     Wells Fargo N.A.
 
     $150,000
Spherix Consulting, Inc.

 
Investment Accounts
 
None.

 
-32-

--------------------------------------------------------------------------------

 

EXHIBIT F
 
COMPLIANCE CERTIFICATE
 
Hercules Technology Growth Capital, Inc. (as “Agent”)
 
400 Hamilton Avenue, Suite 310
 
Palo Alto, CA 94301
 
Reference is made to that certain Loan and Security Agreement dated September
29, 2014 and all ancillary documents entered into in connection with such Loan
and Security Agreement all as may be amended from time to time, (hereinafter
referred to collectively as the “Loan Agreement”) by and among Hercules
Technology Growth Capital, Inc. (the “Agent”), the several banks and other
financial institutions or entities from time to time party thereto
(collectively, the “Lender”) and Hercules Technology Growth Capital, Inc., as
agent for the Lender (the “Agent”) and ChromaDex Corporation (the “Company”) as
Borrower. All capitalized terms not defined herein shall have the same meaning
as defined in the Loan Agreement.
 
The undersigned is an Officer of the Company, knowledgeable of all Company
financial matters, and is authorized to provide certification of information
regarding the Company; hereby certifies that [no Event of Default exists and
there exists no fact or condition that would, with the passage of time, the
giving of notice, or both, constitute an Event of Default] [or if any Event of
Default exists or there exists any fact or condition that would, with the
passage of time, the giving of notice, or both, constitute an Event of Default
under the Loan Documents, describe the same].  The undersigned further certifies
that the attached Financial Statements are prepared in accordance with GAAP
(except for the absence of footnotes with respect to unaudited financial
statement and subject to normal year end adjustments) and are consistent from
one period to the next except as explained below.
 
REPORTING REQUIREMENT
REQUIRED
CHECK IF ATTACHED
Interim Financial Statements
Monthly within 30 days
 
Interim Financial Statements
Quarterly within 45 days
 
Audited Financial Statements
FYE within 150 days
 

Very Truly Yours,
 
 
CHROMADEX CORPORATION

 

  By:
____________________________
  Name:   _____________________________   Its:
____________________________

 
 
-33-

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EXHIBIT G
 
FORM OF JOINDER AGREEMENT
 
This Joinder Agreement (the “Joinder Agreement”) is made and dated as of
[          ], 20[  ], and is entered into by and between__________________., a
___________ corporation (“Subsidiary”), and HERCULES TECHNOLOGY GROWTH CAPITAL,
INC., a Maryland corporation (as “Agent”).
 
RECITALS
 
A.  Subsidiary’s Affiliate, ChromaDex Corporation (“Company”) has entered into
that certain Loan and Security Agreement dated September 29, 2014, with the
several banks and other financial institutions or entities from time to time
party thereto as lender (collectively, the “Lender”) and the Agent, as such
agreement may be amended (the “Loan Agreement”), together with the other
agreements executed and delivered in connection therewith;
 
B.  Subsidiary acknowledges and agrees that it will benefit both directly and
indirectly from Company’s execution of the Loan Agreement and the other
agreements executed and delivered in connection therewith;
 
AGREEMENT
 
NOW THEREFORE, Subsidiary and Agent agree as follows:
 
1.  
The recitals set forth above are incorporated into and made part of this Joinder
Agreement.  Capitalized terms not defined herein shall have the meaning provided
in the Loan Agreement.

 
2.  
 By signing this Joinder Agreement, Subsidiary shall be bound by the terms and
conditions of the Loan Agreement the same as if it were the Borrower (as defined
in the Loan Agreement) under the Loan Agreement, mutatis mutandis, provided
however, that (a) with respect to (i) Section 5.1 of the Loan Agreement,
Subsidiary represents that it is an entity duly organized, legally existing and
in good standing under the laws of [        ], (b) neither Agent nor Lender
shall have any duties, responsibilities or obligations to Subsidiary arising
under or related to the Loan Agreement or the other agreements executed and
delivered in connection therewith, (c) that if Subsidiary is covered by
Company’s insurance, Subsidiary shall not be required to maintain separate
insurance or comply with the provisions of Sections 6.1 and 6.2 of the Loan
Agreement, and (d) that as long as Company satisfies the requirements of Section
7.1 of the Loan Agreement, Subsidiary shall not have to provide Agent separate
Financial Statements.  To the extent that Agent or Lender has any duties,
responsibilities or obligations arising under or related to the Loan Agreement
or the other agreements executed and delivered in connection therewith, those
duties, responsibilities or obligations shall flow only to Company and not to
Subsidiary or any other Person or entity.  By way of example (and not an
exclusive list): (i) Agent’s providing notice to Company in accordance with the
Loan Agreement or as otherwise agreed among Company, Agent and Lender shall be
deemed provided to Subsidiary; (ii) a Lender’s providing an Advance to Company
shall be deemed an Advance to Subsidiary; and (iii) Subsidiary shall have no
right to request an Advance or make any other demand on Lender.

 
3.  
Subsidiary agrees not to certificate its equity securities without Agent’s prior
written consent, which consent may be conditioned on the delivery of such equity
securities to Agent in order to perfect Agent’s security interest in such equity
securities.

 
4.  
Subsidiary acknowledges that it benefits, both directly and indirectly, from the
Loan Agreement, and hereby waives, for itself and on behalf on any and all
successors in interest (including without limitation any assignee for the
benefit of creditors, receiver, bankruptcy trustee or itself as
debtor-in-possession under any bankruptcy proceeding) to the fullest extent
provided by law, any and all claims, rights or defenses to the enforcement of
this Joinder Agreement on the basis that (a) it failed to receive adequate
consideration for the execution and delivery of this Joinder Agreement or (b)
its obligations under this Joinder Agreement are avoidable as a fraudulent
conveyance.

 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 
-34-

--------------------------------------------------------------------------------

 
 
[SIGNATURE PAGE TO JOINDER AGREEMENT]
 
 
SUBSIDIARY:

 
 
_________________________________.

 
 
By:

 
Name:

 
Title:

 
 
Address:

 
 
Telephone: ___________

 
Facsimile: ____________

 
 
AGENT:

 
 
HERCULES TECHNOLOGY GROWTH CAPITAL, INC.

 
 
 
By:____________________________________

 
 
Name:__________________________________

 
 
Title: ___________________________________

 
 
 
Address:

 
 
400 Hamilton Ave., Suite 310

 
 
Palo Alto, CA 94301

 
 
Facsimile:  650-473-9194

 
 
Telephone:  650-289-3060

 
 
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EXHIBIT H
 
ACH DEBIT AUTHORIZATION AGREEMENT
 
Hercules Technology Growth Capital, Inc.
Hercules Technology II, L.P.
 
400 Hamilton Avenue, Suite 310
 
Palo Alto, CA  94301
 
Re:  Loan and Security Agreement dated September 29, 2014 between ChromaDex
Corporation (“Borrower”), Hercules Technology II, as Lender, and Hercules
Technology Growth Capital, Inc., as Agent (“Company”) (the “Agreement”)
 
In connection with the above referenced Agreement, the Borrower hereby
authorizes the Company to initiate debit entries for the periodic payments due
under the Agreement to the Borrower’s account indicated below.  The Borrower
authorizes the depository institution named below to debit to such account.
 
DEPOSITORY NAME
BRANCH
CITY
STATE AND ZIP CODE
TRANSIT/ABA NUMBER
ACCOUNT NUMBER

 
This authority will remain in full force and effect so long as any amounts are
due under the Agreement.
 
CHROMADEX CORPORATION
 
By: _________________________________________
 
Date: ________________________________________

 
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EXHIBIT I-1
 
BORROWER CONVERSION ELECTION NOTICE
 
[INSERT DATE]
 
Hercules Technology Growth Capital, Inc. and Hercules Technology II, L.P.
400 Hamilton Avenue, Suite 310
Palo Alto, CA 94301
 
Reference is made to that certain Loan and Security Agreement dated September
29, 2014 and all ancillary documents entered into in connection with such Loan
and Security Agreement all as may be amended from time to time, (hereinafter
referred to collectively as the “Loan Agreement”) between Hercules Technology
Growth Capital, Inc., as Agent [and a Lender] and Hercules Technology II, L.P.,
as a Lender, and ChromaDex Corporation (the “Company”) as Borrower. All
capitalized terms not defined herein shall have the same meaning as defined in
the Loan Agreement.
 
Borrower hereby irrevocably elects to make the Principal Installment Payment in
the amount of $_________ due on [________] (the “Delivery Date”) in shares of
Common Stock in accordance with Section 2.2(e) of the Loan Agreement.1  The
number of shares of Common Stock to be delivered to Lender, on or prior to the
Delivery Date, is [_____________], which amount was determined in accordance
with Section 2.2(e) of the Loan Agreement.  The stock certificates shall be
delivered free and clear of any restrictive legends.
 
Borrower hereby represents, warrants and certifies to Lender that, as of the
date hereof, all of the Conversion Conditions have been satisfied.  Borrower
acknowledges and agrees that its right to pay the Principal Installment Payment
in Common Stock in accordance with this Conversion Election Notice is subject to
the satisfaction of all of the Conversion Conditions on the Delivery Date and,
to the extent any of the Conversion Conditions are not satisfied on the Delivery
Date, Borrower shall pay the Principal Installment Payment in cash.
 
                                                                Sincerely,
 
           CHROMADEX CORPORATION
 
 
By:
____________________________

 
 
Name:
____________________________

 
 
Its:
____________________________

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1 Note: In accordance with Section 2.2(e) of the Loan Agreement, the Delivery
Date must be at least 10 days following the date of delivery of this Conversion
Election Notice.
 
 
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EXHIBIT I-2
 
LENDER CONVERSION ELECTION NOTICE
 
[INSERT DATE]
 
 
ChromaDex Corporation

 
10005 Muirlands Blvd., Suite G

 
Irvine, CA 92618

 
Attention:  Frank Jaksch, Chief Executive Officer

 
Reference is made to that certain Loan and Security Agreement dated September
29, 2014 and all ancillary documents entered into in connection with such Loan
and Security Agreement all as may be amended from time to time, (hereinafter
referred to collectively as the “Loan Agreement”) between Hercules Technology
Growth Capital, Inc., as Agent and Hercules Technology II, L.P., as a Lender,
and ChromaDex Corporation (the “Company”) as Borrower. All capitalized terms not
defined herein shall have the same meaning as defined in the Loan Agreement.
 
Lender hereby irrevocably elects to accept the Principal Installment Payment in
the amount of $_________ due on [________] (the “Delivery Date”) in shares of
Common Stock in accordance with Section 2.2(e) of the Loan Agreement.2   The
number of shares of Common Stock to be delivered to Lender, on or prior to the
Delivery Date, is [_____________], which amount was determined in accordance
with Section 2.2(e) of the Loan Agreement.  The stock certificates shall be
delivered free and clear of any restrictive legends.
 
Lender hereby represents, warrants and certifies to Borrower that, as of the
date hereof, all of the Conversion Conditions have been satisfied.  Lender
acknowledges and agrees that its right to receive the Principal Installment
Payment in Common Stock in accordance with this Conversion Election Notice is
subject to the satisfaction of all of the Conversion Conditions on the Delivery
Date and, to the extent any of the Conversion Conditions are not satisfied on
the Delivery Date, Lender shall accept the Principal Installment Payment in
cash.
 
Sincerely,
 
LENDER AND AGENT:
         
HERCULES TECHNOLOGY GROWTH CAPITAL, INC., as Agent
 
HERCULES TECHNOLOGY II, L.P.,
as a Lender
 
   
By:Hercules Technology SBIC Management, LLC, its General Partner
     
By:                                                               
 
By:Hercules Technology Growth Capital, Inc., its Manager
Name:                                                               
   
Title:                                                               
 
By:                                                               
   
Name:                                                               
   
Title:                                                               

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2 Note: In accordance with Section 2.2(e) of the Loan Agreement, the Delivery
Date must be at least 10 days following the date of delivery of this Conversion
Election Notice.
 
 
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EXHBIT J
 
THIS WARRANT, AND THE SECURITIES ISSUABLE UPON THE EXERCISE OF THIS WARRANT,
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), OR ANY STATE SECURITIES LAWS.  THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL (WHICH MAY BE COMPANY COUNSEL)
REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER THE ACT, OR ANY APPLICABLE STATE SECURITIES LAWS.
 
WARRANT AGREEMENT
 
To Purchase Shares of Stock of
 
CHROMADEX CORPORATION
 
Dated as of September 29, 2014 (the “Effective Date”)
 
WHEREAS, ChromaDex Corporation, a Delaware corporation, has entered into a Loan
and Security Agreement of even date herewith (the “Loan Agreement”) with
Hercules Technology Growth Capital, Inc., a Maryland corporation, in its
capacity as administrative agent, and Hercules Technology II, L.P., a Delaware
limited partnership, as a lender (the “Warrantholder”) and the other lender
parties thereto;
 
WHEREAS, the Company (as defined below) desires to grant to Warrantholder, in
consideration for, among other things, the financial accommodations provided for
in the Loan Agreement, the right to purchase shares of Stock (as defined below)
pursuant to this Warrant Agreement (the “Agreement”);
 
NOW, THEREFORE, in consideration of the Warrantholder executing and delivering
the Loan Agreement and providing the financial accommodations contemplated
therein, and in consideration of the mutual covenants and agreements contained
herein, the Company and Warrantholder agree as follows:
 
SECTION 1. GRANT OF THE RIGHT TO PURCHASE COMMON STOCK.
 
For value received, the Company hereby grants to the Warrantholder, and the
Warrantholder is entitled, upon the terms and subject to the conditions
hereinafter set forth, to subscribe for and purchase, from the Company, an
aggregate number of fully paid and non-assessable shares of the Common Stock
equal to the quotient derived by dividing (a) the Warrant Coverage (as defined
below) by (b) the Exercise Price (defined below). The Exercise Price of such
shares is subject to adjustment as provided in Section 8.  As used herein, the
following terms shall have the following meanings:
 
“Act” means the Securities Act of 1933, as amended.
 
“Company” means ChromaDex Corporation, a Delaware corporation, and any successor
or surviving entity that assumes the obligations of the Company under this
Agreement pursuant to Section 8(a).
 
“Charter” means the Company’s Articles of Incorporation, Certificate of
Incorporation or other constitutional document, as may be amended from time to
time.
 
“Common Stock” means the Company’s common stock, $0.001 par value per share;
 
“Exercise Price” means $1.062 per share, subject to adjustment pursuant to
Section 8;

“Merger Event” means any sale, lease or other transfer of all or substantially
all assets of the Company or any merger or consolidation involving the Company
in which the Company is not the surviving entity, or in which the outstanding
shares of the Company’s capital stock are otherwise converted into or exchanged
for shares of preferred stock or other securities or property of another entity;
 
“Purchase Price” means, with respect to any exercise of this Agreement, an
amount equal to the Exercise Price as of the relevant time multiplied by the
number of shares of Common Stock.
 
“SEC” means the U.S. Securities and Exchange Commission.
 
“Warrant Coverage” means $445,000.
 
 
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SECTION 2. TERM OF THE AGREEMENT.
 
Except as otherwise provided for herein, the term of this Agreement and the
right to purchase Common Stock as granted herein (the “Warrant) shall commence
on the Effective Date and shall be exercisable for a period ending five (5)
years from the Effective Date.
 
SECTION 3. EXERCISE OF THE PURCHASE RIGHTS.
 
(a) Exercise.  The purchase rights set forth in this Agreement are exercisable
by the Warrantholder, in whole or in part, at any time, or from time to time,
prior to the expiration of the term set forth in Section 2, by tendering to the
Company at its principal office a notice of exercise in the form attached hereto
as Exhibit I (the “Notice of Exercise”), duly completed and executed.  Promptly
upon receipt of the Notice of Exercise and the payment of the Purchase Price in
accordance with the terms set forth below, and in no event later than three (3)
days thereafter, the Company shall issue to the Warrantholder a certificate for
the number of shares of Common Stock purchased and shall execute the
acknowledgment of exercise in the form attached hereto as Exhibit II (the
“Acknowledgment of Exercise”) indicating the number of shares which remain
subject to future purchases, if any.
 
The Purchase Price may be paid at the Warrantholder’s election either (i) by
cash or check, or (ii) by surrender of all or a portion of the Warrant for
shares of Common Stock to be exercised under this Agreement and, if applicable,
an amended Agreement representing the remaining number of shares purchasable
hereunder, as determined below (“Net Issuance”).  If the Warrantholder elects
the Net Issuance method, the Company will issue Common Stock in accordance with
the following formula:
 
X =     Y(A-B)
A
 
Where:
X =
the number of shares of Common Stock to be issued to the Warrantholder.

 
 
Y =
the number of shares Common Stock requested to be exercised under this
Agreement.

 
 
A =
the fair market value of one (1) share of Common Stock at the time of issuance
of such shares of Common Stock.

 
 
B =
the Exercise Price.

 
For purposes of the above calculation, current fair market value of Common Stock
shall mean with respect to each share of Common Stock:

 
(i) if the Common Stock is traded on a securities exchange, the fair market
value shall be deemed to be the product of (x) the prior day closing price
before the day the current fair market value of the securities is being
determined and (y) the number of shares of Common Stock into which each share of
Common Stock is convertible (as applicable) at the time of such exercise; or
 
(ii) if the Common Stock is traded over-the-counter, the fair market value shall
be deemed to be the product of (x) the prior day closing bid and asked price
quoted on the NASDAQ system (or similar system) before the day the current fair
market value of the securities is being determined and (y) the number of shares
of Common Stock into which each share of Common Stock is convertible (as
applicable) at the time of such exercise;
 
(iii) if at any time the Common Stock is not listed on any securities exchange
or quoted in the NASDAQ National Market or the over-the-counter market, the
current fair market value of Common Stock shall be the product of (x) the
highest price per share which the Company could obtain from a willing buyer (not
a current employee or director) for shares of Common Stock sold by the Company,
from authorized but unissued shares, as determined in good faith by its Board of
Directors and (y) the number of shares of Common Stock into which each share of
Common Stock is convertible (as applicable) at the time of such exercise, unless
the Company shall become subject to a Merger Event, in which case the fair
market value of Common Stock shall be deemed to be the per share value received
by the holders of the Company’s Common Stock on a common equivalent basis
pursuant to such Merger Event.
 
Upon partial exercise by either cash or Net Issuance, the Company shall promptly
issue an amended Agreement representing the remaining number of shares
purchasable hereunder. All other terms and conditions of such amended Agreement
shall be identical to those contained herein, including, but not limited to the
Effective Date hereof.
 
 
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(b) Exercise Prior to Expiration.  To the extent this Agreement is not
previously exercised as to all Common Stock subject hereto, and if the fair
market value of one share of the Common Stock is greater than the Exercise Price
then in effect, this Agreement shall be deemed automatically exercised pursuant
to Section 3(a) (even if not surrendered) immediately before its
expiration.  For purposes of such automatic exercise, the fair market value of
one share of the Common Stock upon such expiration shall be determined pursuant
to Section 3(a).  To the extent this Agreement or any portion thereof is deemed
automatically exercised pursuant to this Section 3(b), the Company agrees to
promptly notify the Warrantholder of the number of shares of Common Stock, if
any, the Warrantholder is to receive by reason of such automatic exercise.
 
SECTION 4. RESERVATION OF SHARES.
 
During the term of this Agreement, the Company will at all times have authorized
and reserved a sufficient number of shares of its Common Stock to provide for
the exercise of the rights to purchase Common Stock as provided for herein, and
shall have authorized and reserved a sufficient number of shares of its Common
Stock to provide for the conversion of the shares of Common Stock issuable
hereunder.
 
SECTION 5. NO FRACTIONAL SHARES OR SCRIP.
 
No fractional shares or scrip representing fractional shares shall be issued
upon the exercise of this Agreement, but in lieu of such fractional shares the
Company shall make a cash payment therefor upon the basis of the then fair
market value of one share of Common Stock.
 
SECTION 6. NO RIGHTS AS STOCKHOLDER.
 
This Agreement does not entitle the Warrantholder to any voting rights or other
rights as a stockholder of the Company prior to the exercise of this Agreement.
 
SECTION 7. WARRANTHOLDER REGISTRY.
 
The Company shall maintain a registry showing the name and address of the
registered holder of this Agreement.  Warrantholder’s initial address, for
purposes of such registry, is set forth below Warrantholder’s signature on this
Agreement.  Warrantholder may change such address by giving written notice of
such changed address to the Company.
 
SECTION 8. ADJUSTMENT RIGHTS.
 
The Exercise Price and the number of shares of Common Stock purchasable
hereunder are subject to adjustment, as follows:
 
(a) Merger Event.  If at any time there shall be Merger Event, then, as a part
of such Merger Event, lawful provision shall be made so that the Warrantholder
shall thereafter be entitled to receive, upon exercise of this Agreement, the
number of shares of Common Stock or other securities or property (collectively,
“Reference Property”) that the Warrantholder would have received in connection
with such Merger Event if Warrantholder had exercised this Agreement immediately
prior to the Merger Event.  In any such case, appropriate adjustment (as
determined in good faith by the Company’s Board of Directors) shall be made in
the application of the provisions of this Agreement with respect to the rights
and interests of the Warrantholder after the Merger Event to the end that the
provisions of this Agreement (including adjustments of the Exercise Price
and  adjustments to ensure that the provisions of this Section 8 shall
thereafter be applicable, as nearly as possible, to the purchase rights under
this Agreement in relation to any Reference Property thereafter acquirable upon
exercise of such purchase rights) shall continue to be applicable in their
entirety, and to the greatest extent possible.  Without limiting the foregoing,
in connection with any Merger Event, upon the closing thereof, the successor or
surviving entity shall assume the obligations of this Agreement; provided that
the foregoing assumption requirement shall not apply if (i) the consideration to
be paid for or in respect of the outstanding shares of Common Stock in such
Merger Event consists solely of cash and/or readily marketable securities, and
(ii) the value of such consideration (as determined at closing in accordance
with the definitive executed transaction documents) to be paid for or in respect
of each outstanding share of Common Stock is at least three (3) times the
Exercise Price in effect as of immediately prior to the closing of such Merger
Event.  In connection with a Merger Event and upon Warrantholder’s written
election to the Company, the Company shall cause this Warrant Agreement to be
exchanged for the consideration that Warrantholder would have received if
Warrantholder had chosen to exercise its right to have shares issued pursuant to
the Net Issuance provisions of this Warrant Agreement without actually
exercising such right, acquiring such shares and exchanging such shares for such
consideration. The provisions of this Section 8(a) shall similarly apply to
successive Merger Events.
 
(b) Reclassification of Shares.  Except for Merger Events subject to Section
8(a), and subject to Section 8(f), if the Company at any time shall, by
combination, reclassification, exchange or subdivision of securities or
otherwise, change any of the securities as to which purchase rights under this
Agreement exist into the same or a different number of securities of any other
class or classes, this Agreement shall thereafter represent the right to acquire
such number and kind of securities as would have been issuable as the result of
such change with respect to the securities which were subject to the purchase
rights under this Agreement immediately prior to such combination,
reclassification, exchange, subdivision or other change. The provisions of this
Section 8(b) shall similarly apply to successive combination, reclassification,
exchange, subdivision or other change.
 
 
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(c) Subdivision or Combination of Shares.  If the Company at any time shall
combine or subdivide its Common Stock, (i) in the case of a subdivision, the
Exercise Price shall be proportionately decreased and the number of shares of
Common Stock issuable hereunder shall be proportionately increased, or (ii) in
the case of a combination, the Exercise Price shall be proportionately increased
and the number of shares of Common Stock issuable hereunder shall be
proportionately decreased.
 
(d) Stock Dividends.  If the Company at any time while this Agreement is
outstanding and unexpired shall:
 
(i) pay a dividend with respect to the Common Stock payable in Common Stock,
then the Exercise Price shall be adjusted, from and after the date of
determination of stockholders entitled to receive such dividend or distribution,
to that price determined by multiplying the Exercise Price in effect immediately
prior to such date of determination by a fraction (A) the numerator of which
shall be the total number of shares of Common Stock outstanding immediately
prior to such dividend or distribution, and (B) the denominator of which shall
be the total number of shares of Common Stock outstanding immediately after such
dividend or distribution; or
 
(ii) make any other distribution with respect to Common Stock (or stock into
which the Common Stock is convertible, as applicable), except any distribution
specifically provided for in any other clause of this Section 8, then, in each
such case, provision shall be made by the Company such that the Warrantholder
shall receive upon exercise or conversion of this Warrant a proportionate share
of any such distribution as though it were the holder of the Common Stock (or
other stock for which the Common Stock is convertible, as applicable) as of the
record date fixed for the determination of the stockholders of the Company
entitled to receive such distribution.
 
(e) [Intentionally Omitted.]
 
(f) Notice of Adjustments.  If: (i) the Company shall declare any dividend or
distribution upon its stock, whether in stock, cash, property or other
securities; (ii) there shall be any Merger Event; (iii) the Company shall sell,
lease, license or otherwise transfer all or substantially all of its assets; or
(iv) there shall be any voluntary dissolution, liquidation or winding up of the
Company; then, in connection with each such event, the Company shall send to the
Warrantholder:  (A) at least thirty (30) days’ prior written notice of the date
on which the books of the Company shall close or a record shall be taken for
such dividend, distribution, subscription rights (specifying the date on which
the holders of Common Stock shall be entitled thereto) or for determining rights
to vote in respect of such Merger Event, dissolution, liquidation or winding up;
and (B) in the case of any such Merger Event, sale, lease, license or other
transfer of all or substantially all assets, dissolution, liquidation or winding
up, at least thirty (30) days’ prior written notice of the date when the same
shall take place (and specifying the date on which the holders of Common Stock
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such Merger Event, dissolution, liquidation or winding
up).
 
Each such written notice shall set forth, in reasonable detail, (i) the event
requiring the notice, and (ii) if any adjustment is required to be made, (A) the
amount of such adjustment, (B) the method by which such adjustment was
calculated, (C) the adjusted Exercise Price (if the Exercise Price has been
adjusted), and (D) the number of shares subject to purchase hereunder after
giving effect to such adjustment, and shall be given in accordance with Section
12(g) below.
 
(g) Reserved.
 
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.
 
(a) Reservation of Common Stock.  The Common Stock issuable upon exercise of the
Warrantholder’s rights has been duly and validly reserved and, when issued in
accordance with the provisions of this Agreement, will be validly issued, fully
paid and non-assessable, and will be free of any taxes, liens, charges or
encumbrances of any nature whatsoever; provided, that the Common Stock issuable
pursuant to this Agreement may be subject to restrictions on transfer under
state and/or federal securities laws.  The Company has made available to the
Warrantholder true, correct and complete copies of its Charter and current
bylaws. The issuance of certificates for shares of Common Stock upon exercise of
this Agreement shall be made without charge to the Warrantholder for any
issuance tax in respect thereof.  The Company shall not be required to pay any
tax which may be payable in respect of any transfer and the issuance and
delivery of any certificate in a name other than that of the Warrantholder.
 
(b) Due Authority.  The execution and delivery by the Company of this Agreement
and the performance of all obligations of the Company hereunder, including the
issuance to Warrantholder of the right to acquire the shares of Common Stock and
the Common Stock into which it may be converted, have been duly authorized by
all necessary corporate action on the part of the Company.  This Agreement: (1)
does not violate the Company’s Charter or current bylaws; (2) does not
contravene any law or governmental rule, regulation or order applicable to it;
and (3) does not and will not contravene any provision of, or constitute a
default under, any indenture, mortgage, contract or other instrument to which it
is a party or by which it is bound.  This Agreement constitutes a legal, valid
and binding agreement of the Company, enforceable in accordance with its terms.
 
(c) Consents and Approvals.  No consent or approval of, giving of notice to,
registration with, or taking of any other action in respect of any state,
federal or other governmental authority or agency is required with respect to
the execution, delivery and performance by the Company of its obligations under
this Agreement, except for the filing of notices pursuant to Regulation D under
the Act and any filing required by applicable state securities law, which
filings will be effective by the time required thereby.
 
 
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(d) Issued Securities.  All issued and outstanding shares of Common Stock or any
other securities of the Company have been duly authorized and validly issued and
are fully paid and nonassessable.  All outstanding shares of Common Stock,
Common Stock and any other securities were issued in full compliance with all
federal and state securities laws.  In addition, as of the date immediately
preceding the date of this Agreement:
 
(i) The authorized capital of the Company consists of (A) 150,000,000 shares of
Common Stock, of which 106,913,985 shares are issued and outstanding, and (B) 0
shares of Preferred Stock.
 
(ii) The Company has reserved 18,626,802 shares of Common Stock for issuance
under its Equity Incentive Plan(s), under which 13,852,830 options are
outstanding. There are no other options, warrants, conversion privileges or
other rights presently outstanding to purchase or otherwise acquire any
authorized but unissued shares of the Company’s capital stock or other
securities of the Company.  The Company has no outstanding loans to any
employee, officer or director of the Company, and the Company agrees not to
enter into any such loan or otherwise guarantee the payment of any loan made to
an employee, officer or director by a third party.
 
(iii) In accordance with the Company’s Charter, no stockholder of the Company
has preemptive rights to purchase new issuances of the Company’s capital stock.
 
(e) Registration Rights. The Company agrees that the shares of Common Stock
issued and issuable upon exercise of this Warrant, shall have the “Piggyback,”
and S-3 registration rights, or S-1 registration rights in the event that the
Company is not S-3 eligible, pursuant to and as set forth in the Company’s
investor rights agreement or similar agreement (the “Investor Rights
Agreement”), as applicable, on a pari passu basis with the holders of
outstanding shares of Common Stock who are parties thereto. The provisions set
forth in the Company’s Investor Rights Agreement or similar agreement relating
to such registration rights in effect as of the Effective Date may not be
amended, modified or waived without the prior written consent of the
Warrantholder unless such amendment, modification or waiver affects the rights
associated with the shares of Common Stock issued and issuable upon exercise
hereof in the same manner as such amendment, modification, or waiver affects the
rights associated with all outstanding shares of Common Stock whose holders are
parties thereto.  If at any time the Company shall determine to file with the
SEC a registration statement relating to an offering for the account of others
under the Act of any of its equity securities (other than on Form S-4, Form S-8
or their then equivalents relating to equity securities to be issued solely in
connection with any acquisition of any entity or business, or equity securities
issuable in connection with stock option or other bona fide, employee benefit
plans) the Company shall use its best efforts to include in such registration
statement all of the shares of Common Stock issued and issuable upon exercise of
this Warrant.  Notwithstanding the contrary in this Section 9(e), the Company
shall not be obligated to register such shares of Common Stock if at such time
such shares may be sold without restriction pursuant to Rule 144.
 
(f) Other Commitments to Register Securities.  Except as set forth in this
Agreement, the Company is not, pursuant to the terms of any other agreement
currently in existence, under any obligation to register under the Act any of
its presently outstanding securities or any of its securities which may
hereafter be issued.
 
(g) Exempt Transaction.  Subject to the accuracy of the Warrantholder’s
representations in Section 10, the issuance of the Common Stock upon exercise of
this Agreement, and the issuance of the Common Stock upon conversion of the
Common Stock, will each constitute a transaction exempt from (i) the
registration requirements of Section 5 of the Act, in reliance upon Section 4(2)
thereof, and (ii) the qualification requirements of the applicable state
securities laws.
 
(h) Compliance with Rule 144. If the Warrantholder proposes to sell Common Stock
issuable upon the exercise of this Agreement, or the Common Stock into which it
is convertible,  in compliance with Rule 144 promulgated by the SEC, then, upon
Warrantholder’s written request to the Company, the Company shall furnish to the
Warrantholder, within ten days after receipt of such request, a written
statement confirming the Company’s compliance with the filing requirements of
the SEC as set forth in such Rule, as such Rule may be amended from time to
time.
 
(i) Information Rights.  During the term of this Warrant, Warrantholder shall be
entitled to the information rights contained in Section 7.1 of the Loan
Agreement, and Section 7.1 of the Loan Agreement is hereby incorporated into
this Agreement by this reference as though fully set forth herein, provided,
however, that the Company shall not be required to deliver a Compliance
Certificate once all Indebtedness (as defined in the Loan Agreement) owed by the
Company to Warrantholder has been repaid.
 
SECTION 10. REPRESENTATIONS AND COVENANTS OF THE WARRANTHOLDER.
 
This Agreement has been entered into by the Company in reliance upon the
following representations and covenants of the Warrantholder:
 
(a) Investment Purpose.  The right to acquire Common Stock is being acquired for
investment and not with a view to the sale or distribution of any part thereof,
and the Warrantholder has no present intention of selling or engaging in any
public distribution of such rights or the Common Stock except pursuant to an
effective registration statement or an exemption from the registration
requirements of the Act.
 
 
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(b) Private Issue.  The Warrantholder understands (i) that the Common Stock
issuable upon exercise of this Agreement is not registered under the Act or
qualified under applicable state securities laws on the ground that the issuance
contemplated by this Agreement will be exempt from the registration and
qualifications requirements thereof, and (ii) that the Company’s reliance on
such exemption is predicated on the representations set forth in this Section
10.
 
(c) Financial Risk.  The Warrantholder has such knowledge and experi­ence in
financial and business matters as to be capable of evaluating the merits and
risks of its investment, and has the ability to bear the economic risks of its
investment.
 
(d) Risk of No Registration.  The Warrantholder understands that if the Company
does not register with the SEC pursuant to Section 12 of the Securities Exchange
Act of 1934 (the “1934 Act”), or file reports pursuant to Section 15(d) of the
1934 Act, or if a registration statement covering the securities under the Act
is not in effect when it desires to sell (i) the rights to purchase Common Stock
pursuant to this Agreement or (ii) the Common Stock issuable upon exercise of
the right to purchase, it may be required to hold such securities for an
indefinite period.  The Warrantholder also understands that any sale of (A) its
rights hereunder to purchase Common Stock or (B) Common Stock issued or issuable
hereunder which might be made by it in reliance upon Rule 144 under the Act may
be made only in accordance with the terms and conditions of that Rule.
 
(e) Accredited Investor.  Warrantholder is an “accredited investor” within the
meaning of the Securities and Exchange Rule 501 of Regulation D, as presently in
effect.
 
(f) Short Sales.  Warrantholder warrants that it is has not previously engaged
in short sales of the Common Stock, and Warrantholder covenants that it will not
engage in short sales of the Common Stock.
 
Subject to compliance with applicable federal and state securities laws, this
Agreement and all rights hereunder are transferable, in whole or in part, with
the Company’s prior written consent (provided that no consent shall be required
for transfers to affiliates of Warrantholder or if the Company is in default
under the Loan Agreement) and without charge to the holder hereof (except for
transfer taxes) upon surrender of this Agreement properly endorsed.  Each taker
and holder of this Agreement, by taking or holding the same, consents and agrees
that this Agreement, when endorsed in blank, shall be deemed negotiable, and
that the holder hereof, when this Agreement shall have been so endorsed and its
transfer recorded on the Company’s books, shall be treated by the Company and
all other persons dealing with this Agreement as the absolute owner hereof for
any purpose and as the person entitled to exercise the rights represented by
this Agreement.  The transfer of this Agreement shall be recorded on the books
of the Company upon receipt by the Company of a notice of transfer in the form
attached hereto as Exhibit III (the “Transfer Notice”), at its principal offices
and the payment to the Company of all transfer taxes and other governmental
charges imposed on such transfer.  Until the Company receives such Transfer
Notice, the Company may treat the registered owner hereof as the owner for all
purposes.
 
SECTION 11. MISCELLANEOUS.
 
(a) Effective Date.  The provisions of this Agreement shall be construed and
shall be given effect in all respects as if it had been executed and delivered
by the Company on the date hereof.  This Agreement shall be binding upon any
successors or assigns of the Company.
 
(b) Remedies.  In the event of any default hereunder, the non-defaulting party
may proceed to protect and enforce its rights either by suit in equity and/or by
action at law, including but not limited to an action for damages as a result of
any such default, and/or an action for specific performance for any default
where Warrantholder will not have an adequate remedy at law and where damages
will not be readily ascertainable. The Company expressly agrees that it shall
not oppose an application by the Warrantholder or any other person entitled to
the benefit of this Agreement requiring specific performance of any or all
provisions hereof or enjoining the Company from continuing to commit any such
breach of this Agreement.
 
(c) No Impairment of Rights.  The Company will not, by amendment of its Charter
or through any other means, avoid or seek to avoid the observance or performance
of any of the terms of this Agreement, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of all such
actions as may be necessary or appropriate in order to protect the rights of the
Warrantholder against impairment.
 
(d) Additional Documents.  The Company, upon execution of this Agreement, shall
provide the Warrantholder with certified resolutions with respect to the
representations, warranties and covenants set forth in Sections 9(a) through
9(d), 9(f) and 9(g). The Company shall also supply documentation reasonably
necessary to evaluate whether to exercise (in cash or a net issuance basis) this
Warrant, including without limitation, (i) any merger/purchase/asset sale
agreement and related documents and estimated payout allocations to each of the
respective stockholders, warrant and option holders in connection with a Merger
Event, (ii) the most recent capitalization tables, 409A valuations (if any), and
board determination of share value (including any waterfall or per share
allocations provided to the share/unitholders), and (iii) most recent articles
of incorporation or organization (as applicable).
 
(e) Attorney’s Fees.  In any litigation, arbitration or court proceeding between
the Company and the Warrantholder relating hereto, the prevailing party shall be
entitled to attorneys’ fees and expenses and all costs of proceedings incurred
in enforcing this Agreement.  For the purposes of this Section 12(e), attorneys’
fees shall include without limitation fees incurred in connection with the
following: (i) contempt proceedings; (ii) discovery; (iii) any motion,
proceeding or other activity of any kind in connection with an insolvency
proceeding; (iv) garnishment, levy, and debtor and third party examinations; and
(v) post-judgment motions and proceedings of any kind, including without
limitation any activity taken to collect or enforce any judgment.
 
 
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(f) Severability.  In the event any one or more of the provisions of this
Agreement shall for any reason be held invalid, illegal or unenforceable, the
remaining provisions of this Agreement shall be unimpaired, and the invalid,
illegal or unenforceable provision shall be replaced by a mutually acceptable
valid, legal and enforceable provision, which comes closest to the intention of
the parties underlying the invalid, illegal or unenforceable provision.
 
(g) Notices.  Except as otherwise provided herein, any notice, demand, request,
consent, approval, declaration, service of process or other communication that
is required, contemplated, or permitted under this Agreement or with respect to
the subject matter hereof shall be in writing, and shall be deemed to have been
validly served, given, delivered, and received upon the earlier of: (i) the day
of transmission by facsimile or hand delivery if transmission or delivery occurs
on a business day at or before 5:00 pm in the time zone of the recipient, or, if
transmission or delivery occurs on a non-business day or after such time, the
first business day thereafter, or the first business day after deposit with an
overnight express service or overnight mail delivery service; or (ii) the third
calendar day after deposit in the United States mails, with proper first class
postage prepaid, and shall be addressed to the party to be notified as follows:
 
If to Warrantholder:
 
HERCULES TECHNOLOGY II, L.P.
Legal Department
Attention:  Chief Legal Officer
400 Hamilton Avenue, Suite 310
Palo Alto, CA 94301
Facsimile:  650-473-9194
Telephone:  650-289-3060
 
(i)           If to the Company:
 
CHROMADEX CORPORATION
Attention:  Chief Executive Officer
10005 Muirlands Blvd., Suite G
Irvine, CA 92618
Facsimile:  949-356-1601
Telephone:  949-419-0288

or to such other address as each party may designate for itself by like notice.
 
(h) Entire Agreement; Amendments.  This Agreement constitute the entire
agreement and understanding of the parties hereto in respect of the subject
matter hereof, and supersede and replace in their entirety any prior proposals,
term sheets, letters, negotiations or other documents or agreements, whether
written or oral, with respect to the subject matter hereof (including
Warrantholder’s proposal letter dated August 6, 2014 and accepted by the Company
on August 13, 2014).  None of the terms of this Agreement may be amended except
by an instrument executed by each of the parties hereto.
 
(i) Headings.  The various headings in this Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
Agreement or any provisions hereof.
 
(j) No Strict Construction.  The parties hereto have participated jointly in the
negotiation and drafting of this Agreement.  In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement.
 
(k) No Waiver.  No omission or delay by Warrantholder at any time to enforce any
right or remedy reserved to it, or to require performance of any of the terms,
covenants or provisions hereof by the Company at any time designated, shall be a
waiver of any such right or remedy to which Warrantholder is entitled, nor shall
it in any way affect the right of Warrantholder to enforce such provisions
thereafter.
 
(l) Survival.  All agreements, representations and warranties contained in this
Agreement or in any document delivered pursuant hereto shall be for the benefit
of Warrantholder and shall survive the execution and delivery of this Agreement
and the expiration or other termination of this Agreement.
 
(m) Governing Law.  This Agreement have been negotiated and delivered to
Warrantholder in the State of California, and shall have been accepted by
Warrantholder in the State of California.  Delivery of Common Stock to
Warrantholder by the Company under this Agreement is due in the State of
California.  This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of California, excluding conflict of laws
principles that would cause the application of laws of any other jurisdiction.
 
 
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(n) Consent to Jurisdiction and Venue.  All judicial proceedings arising in or
under or related to this Agreement may be brought in any state or federal court
of competent jurisdiction located in the State of California.  By execution and
delivery of this Agreement, each party hereto generally and unconditionally: (a)
consents to personal jurisdiction in Santa Clara County, State of California;
(b) waives any objection as to jurisdiction or venue in Santa Clara County,
State of California; (c) agrees not to assert any defense based on lack of
jurisdiction or venue in the aforesaid courts; and (d) irrevocably agrees to be
bound by any judgment rendered thereby in connection with this
Agreement.  Service of process on any party hereto in any action arising out of
or relating to this Agreement shall be effective if given in accordance with the
requirements for notice set forth in Section 12(g), and shall be deemed
effective and received as set forth in Section 12(g).  Nothing herein shall
affect the right to serve process in any other manner permitted by law or shall
limit the right of either party to bring proceedings in the courts of any other
jurisdiction.
 
(o) Mutual Waiver of Jury Trial.  Because disputes arising in connection with
complex financial transactions are most quickly and economically resolved by an
experienced and expert person and the parties wish applicable state and federal
laws to apply (rather than arbitration rules), the parties desire that their
disputes be resolved by a judge applying such applicable laws.  EACH OF THE
COMPANY AND WARRANTHOLDER SPECIFICALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY
JURY OF ANY CAUSE OF ACTION, CLAIM, CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM
OR ANY OTHER CLAIM (COLLECTIVELY, “CLAIMS”) ASSERTED BY THE COMPANY AGAINST
WARRANTHOLDER OR ITS ASSIGNEE OR BY WARRANTHOLDER OR ITS ASSIGNEE AGAINST THE
COMPANY.  This waiver extends to all such Claims, including Claims that involve
Persons other than Company and Warrantholder; Claims that arise out of or are in
any way connected to the relationship between the Company and Warrantholder; and
any Claims for damages, breach of contract, specific performance, or any
equitable or legal relief of any kind, arising out of this Agreement.
 
(p) Judicial Reference.  If the waiver of jury trial set forth above is
ineffective or unenforceable, the parties agree that all Claims shall be
resolved by reference to a private judge sitting without a jury, pursuant to
Code of Civil Procedure Section 638, before a mutually acceptable referee or, if
the parties cannot agree, a referee selected by the Presiding Judge of Santa
Clara County, California.  Such proceeding shall be conducted in Santa Clara
County, California, with California rules of evidence and discovery applicable
to such proceeding.
 
(q) Prejudgment Relief.  In the event Claims are to be resolved by arbitration,
either party may seek from a court of competent jurisdiction identified in
Section 12(n), any prejudgment order, writ or other relief and have such
prejudgment order, writ or other relief enforced to the fullest extent permitted
by law notwithstanding that all Claims are otherwise subject to resolution by
judicial reference.
 
(r) Counterparts.  This Agreement and any amendments, waivers, consents or
supplements hereto may be executed in any number of counterparts, and by
different parties hereto in separate counterparts, each of which when so
delivered shall be deemed an original, but all of which counterparts shall
constitute but one and the same instrument.
 
[Remainder of Page Intentionally Left Blank]
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by its officers thereunto duly authorized as of the Effective Date.
 
COMPANY:

 
CHROMADEX CORPORATION
 
By:
Name:
Title:
 
   
WARRANT HOLDER:                              
 
HERCULES TECHNOLOGY II, L.P.,
a Delaware limited partnership
 
 
By:Hercules Technology SBIC Management, LLC,
its General Partner
 
By:Hercules Technology Growth Capital, Inc.,
 
its Manager

 
By:
 

Name: Ben Bang
Title: Associate General Counsel
 
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EXHIBIT I
 
NOTICE OF EXERCISE
 
To:           CHROMADEX CORPORATION
 
(1)
The undersigned Warrantholder hereby elects to purchase [_______] shares of the
Common Stock of ChromaDex Corporation, pursuant to the terms of the Agreement
dated the 29th day of September, 2014 (the “Agreement”) between ChromaDex
Corporation and the Warrantholder, and [CASH PAYMENT: tenders herewith payment
of the Purchase Price in full, together with all applicable transfer taxes, if
any.] [NET ISSUANCE: elects pursuant to Section 3(a) of the Agreement to effect
a Net Issuance.]

 
(2)
Please issue a certificate or certificates representing said shares of Common
Stock in the name of the undersigned or in such other name as is specified
below.

 
(Name)
 
(Address)
 

WARRANT HOLDER:
HERCULES TECHNOLOGY II, L.P.,

 
a Delaware limited partnership
 
By:  Hercules Technology SBIC Management, LLC,
its General Partner
 
By:  Hercules Technology Growth Capital, Inc.,
its Manager
 

  By:     Title:     Name:  

 
 
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EXHIBIT II
 
ACKNOWLEDGMENT OF EXERCISE

The undersigned [____________________________________], hereby acknowledge
receipt of the “Notice of Exercise” from Hercules Technology L.P. II, a Delaware
limited partnership to purchase [____] shares of the Common Stock of ChromaDex
Corporation pursuant to the terms of the Agreement, and further acknowledges
that [______] shares remain subject to purchase under the terms of the
Agreement.
 

COMPANY CHROMADEX CORPORATION     By:        Title:        Date:    

                          
 
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EXHIBIT III
 
TRANSFER NOTICE
 
(To transfer or assign the foregoing Agreement execute this form and supply
required information.  Do not use this form to purchase shares.)
 
FOR VALUE RECEIVED, the foregoing Agreement and all rights evidenced thereby are
hereby transferred and assigned to
 
(Please Print)
 
whose address
is                                                                                               

 
Dated:                                                                           
 
Holder’s
Signature:                                                                           
 
Holder’s
Address:                                                                           
 
Signature
Guaranteed:                                                                                                  
 
NOTE:  The signature to this Transfer Notice must correspond with the name as it
appears on the face of the Agreement, without alteration or enlargement or any
change whatever. Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Agreement.
 
Acknowledged and accepted:
 
CHROMADEX CORPORATION
 
By:
 
Title:
 
Date:
 
 
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  SCHEDULE 1
 
  SUBSIDIARIES
 
Name
Jurisdiction
Date of Formation
     ChromaDex Inc.
     California, USA
     February 22, 2000
     ChromaDex Analytics, Inc.
     Nevada, USA
     February 5, 2003
     Spherix Consulting, Inc.
     Delaware, USA
     April 11, 2008
ChromaDex UK Limited
Northern Irelend, UK
August 4, 2014
ChromaSolar, Inc.
Nevada, USA
     February 14, 2011

 
[flowchart.jpg]
 
 
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  SCHEDULE 1.1
 
  COMMITMENTS
 
LENDER
TERM COMMITMENT
HERCULES TECHNOLOGY II, L.P.
$5,000,000
TOTAL COMMITMENTS
$5,000,000

 
 
SCHEDULE 1A

 
 
PERMITTED INDEBTEDNESS

 
Debt Provider
 
Start Date
End Date
Estimated Payments Remaining
(Including Interest)*
Equipment Leased with Lien
GE Capital Solutions
Mar, 2010
Feb, 2015
$29,184
Laboratory Equipment
Quantum Analytics
Nov, 2011
Oct, 2016
$19,685
Laboratory Equipment
CIT Financial Services
Jan, 2012
Dec, 2016
$28,366
Phone System
Thermo Fisher Finance
Dec, 2012
Nov, 2017
$14,008
Laboratory Equipment
US Bank
Jan, 2013
Dec, 2017
$65,392
Laboratory Equipment
US Bank
July, 2013
June, 2018
$51,438
Laboratory Equipment
Susquehanna Commercial
Oct, 2013
Sep, 2018
$51,624
Laboratory Equipment
M2 Lease Fund
Oct, 2013
Sep, 2018
$76,419
Laboratory Equipment
Quantum Analytics
Apr, 2014
Mar, 2019
$244,294
Laboratory Equipment
Quantum Analytics
Sep, 2014
Aug, 2019
$121,867
Laboratory Equipment

 
 
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  SCHEDULE 1B
 
  PERMITTED INVESTMENTS
 
1.          Leases of equipment, security agreements naming the Company or its
subsidiaries as secured party
 
·  
Bruker FTNIR Lab Equipment loaned to our customer “Beehive Botanicals” located
at 16297 W. Nursery Road, Hayward, WI  54843.

 
·  
Bruker FTNIR Lab Equipment loaned to our customer “Soft Gel Technologies, Inc.”
located at 6982 Bandini Blvd., Los Angeles, CA  90040.

 
2.          670,658 shares of Series I Preferred Shares of NeutriSci
International Inc. (“NeutriSci”), an Alberta corporation located in Canada.  Of
this amount, a number of shares having a value of $500,000 will be transferred
to Alpha Capital Anstalt, a Lichtenstein anstalt upon the earlier of (a)
December 31, 2014; or (b) the consummation by NeutriSci of any action resulting
in the shares of its common stock being listed on an exchange.  In addition, a
number of shares having a value of $50,000 will be transferred to Palladium
Capital Advisors, LLC upon the consummation by NeutriSci of any action resulting
in the shares of its common stock being listed on an exchange.

 
  SCHEDULE 1C
 
  PERMITTED LIENS
 
The Company currently has following capital leases, which there are liens on the
equipment we are leasing.
 
Lease Provider
(Lien Holder)
Start Date
End Date
Estimated Payments Remaining
(Including Interest)*
Equipment Leased with Lien
GE Capital Solutions
Mar, 2010
Feb, 2015
$29,184
Laboratory Equipment
Quantum Analytics
Nov, 2011
Oct, 2016
$19,685
Laboratory Equipment
CIT Financial Services
Jan, 2012
Dec, 2016
$28,366
Phone System
Thermo Fisher Finance
Dec, 2012
Nov, 2017
$14,008
Laboratory Equipment
US Bank
Jan, 2013
Dec, 2017
$65,392
Laboratory Equipment
US Bank
July, 2013
June, 2018
$51,438
Laboratory Equipment
Susquehanna Commercial
Oct, 2013
Sep, 2018
$51,624
Laboratory Equipment
M2 Lease Fund
Oct, 2013
Sep, 2018
$76,419
Laboratory Equipment
Quantum Analytics
Apr, 2014
Mar, 2019
$244,294
Laboratory Equipment
Quantum Analytics
Sep, 2014
Aug, 2019
$121,867
Laboratory Equipment

* The remaining payment amount is as of end of September 30, 2014.
 
SCHEDULE 5.5
 
ACTIONS BEFORE GOVERNMENTAL AUTHORITIES
 
An inquiry by Securities Commission Exchange related to our restatements of
financials during fiscal year 2013 and our internal controls for the fiscal year
2012 and 2013.
 
SCHEDULE 5.10
 
INTELLECTUAL PROPERTY
 
Behind in payments on the following license, but neither a material breach nor
failure to perform material obligation because still within cure period:
 
 
License Agreement between ChromaDex, Inc. and Green Molecular, SL,

dated August 1, 2013Schedule 5.11  Borrower Products
 
 
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SCHEDULE 5.10
 
CAPITALIZATION
 
 (As of September 30, 2014)
 
ChromaDex Corporation
Authorized / Reserved
(Shares)
Issued and
Outstanding
(Shares)
Common Stock
150,000,000
105,239,985
Unvested Restricted Stock
-
    1,674,000
Total Common Stock, Including Unvested Restricted Stock
150,000,000
106,913,985
     
Stock Options
  18,626,802
  14,022,830

 
SCHEDULE 7.16
 
  POST-CLOSING ITEMS
 
Borrower shall deliver or cause to be delivered to Agent:
 
1.           On or before October 31, 2014, a Consent of Landlord in form
reasonably satisfactory to Agent with the landlord of the premises leased by
Borrower at 10005 Muirlands Blvd. Suite G, Irvine, CA  92618.
 
2.           On or before October 31, 2014, a Consent of Landlord in form
reasonably satisfactory to Agent with the landlord of the premises leased by
Borrower at 11900 Parklawn Drive, Suite 200, Rockville, MD  20852.
 
3.           On or before November 7, 2014, a Consent of Landlord in form
reasonably satisfactory to Agent with the landlord of the premises leased by
ChromaDex Analytics, Inc. at 2830 Wilderness Place, Boulder, CO 80301.
 
4.           On or before October 31, 2014, a Bailee Acknowledgment in form
reasonably satisfactory to Agent from Westset Distribution, Inc., the bailee in
possession of Borrower’s inventory located at 14041 Rosecrans Ave., La Mirada,
CA 90638.
 
5.           On or before October 31, 2014, the Bylaws of Spherix Consulting,
Inc.
 
6.           On or before October 5, 2014, the Articles of Incorporation, Bylaws
and Good Standing Certificates of ChromaDex, Inc.