Exhibit 10.5
 
[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION
 
SUPPLY AGREEMENT
 
THIS SUPPLY AGREEMENT (the “Agreement”), is made and entered into as of August
28, 2015 (the “Effective Date”) by and between Nectar7, LLC, a Delaware limited
liability company with principal offices located at 12526 High Bluff Dr., Suite
210, San Diego, California 92130 (“Buyer”), and ChromaDex, Inc., a California
corporation with principal offices located at 10005 Muirlands Blvd., Suite G,
Irvine, California 92618 (“Seller”).  Seller and Buyer are sometimes referred to
herein collectively as the “Parties” and individually as a “Party”.
 
W I T N E S S E T H
 
WHEREAS, Seller has developed a novel and proprietary ingredient, Nicotinamide
Riboside, with the trade name NIAGEN® (the “Product”).
 
WHEREAS, Buyer desires to purchase the Product from Seller, and Seller desires
to sell the Product to Buyer subject to the terms and conditions hereinafter
described.
 
NOW, THEREFORE, in consideration of the mutual premises and agreements contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as
follows.
 
1.           Definitions.
 
The following terms have the meanings specified below:
 
“Affiliate” shall mean, with respect to a Party, any person or entity that
controls, is controlled by, or is under common control with such Party.  An
entity or person shall be deemed to be in control of another entity (a
“Controlled Entity”) if the former owns, directly or indirectly, at least fifty
percent (50%) of the outstanding voting equity of the Controlled Entity (or
other majority equity, voting or ownership interest, in the event that such
Controlled Entity is an entity other than a corporation).
 
“Excluded Field” shall mean the Doctor Channel, the Multi-Level Marketing
Channel, and the Direct Response Channel.  The “Doctor Channel” is defined
herein as the sale of nutritional supplements through licensed healthcare
practitioners.  The “Multi-Level Marketing Channel” is defined herein as the
sale of the Finished Products through a network of independent marketing
representatives.  The “Direct Response Channel” is defined herein as the
marketing and advertising of the Finished Product through direct response
television and radio advertisements of any length or format intended to reach
one or more potential consumers asking such consumers to purchase from or
respond directly to Buyer or Buyer’s agents via a website, telephone number or
other medium to purchase the Finished Products.  Additional channels may be
added to this definition of “Excluded Field” at any time by Seller, in its sole
discretion, upon thirty (30) days’ prior written notice to Buyer.
 
“Excluded Products” means topical skincare or cosmetic products and any and all
dietary supplements in the form of an energy shot, a melt (melting or
dissolvable tablet or delivery system) or combination of NIAGEN® with Choline
and/or Betaine and/or DMG (all forms).  Seller may add additional products to
this definition of “Excluded Products”, in its sole discretion, upon written
notice to Buyer; provided, that, such added products do not impair the rights of
Buyer to purchase the Product for the applications set forth on Exhibit B.

 
 

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“Exclusivity Rights” shall mean those exclusive rights to sell the products
applications in the geographic areas set forth on Exhibit B.
 
“Finished Products” shall mean Buyer’s finished product applications containing
or using the Product.
 
“Good Manufacturing Practices” shall mean current and any future good
manufacturing practices and quality system regulations set forth by any
governmental or regulatory authority of a country in which the Finished Products
shall be manufactured or sold, and if the Finished Products are manufactured
outside of the applicable Territory (defined below), the current and any future
good manufacturing practices and quality system regulations in the country in
which the Finished Product is manufactured.
 
“Specification” shall mean the description of the Product set forth on Exhibit
A.
 
“Territory” shall mean the geographic areas listed on Exhibit B hereto under the
column entitled “Exclusivity Area/Region.”
 
2.           Right to Sell; Non-circumvention.
 
2.1     Right to Sell. Seller hereby grants to Buyer a non-exclusive right to
sell and distribute the Products in Finished Products (subject to Section 6.2 of
this Agreement), and Seller hereby further grants to Buyer the exclusive right
to sell and distribute the Product in Finished Products for the applications and
time periods, and in the geographic areas, set forth on Exhibit B. The Parties
acknowledge that Buyer’s ongoing rights to exclusivity as to any application set
forth on Exhibit B shall be conditioned on Buyer receiving the Minimum Revenues
set forth on Exhibit B for that application. For applications in which Minimum
Revenues are not yet specified on Exhibit B, Buyer and Seller shall work in good
faith to establish commercially reasonable minimum revenue targets for the given
applications, time periods and geographic reas consistent with (i) Seller’s
ability to produce and deliver the Product in commercially reasonable quantities
for the specified applications, (ii) the market size for such applications,
(iii) the existence of competing products for the specified applications, and
(iv) such other factors as are commercially material. Buyer shall not sell the
Finished Products in the Excluded Field and shall not sell Excluded Products.
   
2.2      [*]. [*] acknowledges that [*] will [*] toward the [*] and [*] of [*]
(defined below), any of whom may [*] the [*] and [*] of the [*]. Accordingly,
[*] agrees that during the Term, as it applies to any given product application,
and for a period of one (1) year following the expiration of such Term for such
product application, [*] shall not, and shall not allow any of its Affiliates,
or any employee, agent or representative of [*] or any such Affiliate, to,
directly or indirectly, for the [*], [*], or [*], or [*] to a [*] from, any [*]
or any [*] who [*] reasonably believes, or should reasonably believe, to be [*]
or the [*], unless [*] specifically consents to such [*] in writing, on a
case-by-case basis, which consent may be withheld in [*]’s sole discretion.  As
used herein, the term “[*]” shall mean [*], before or during the Term, for the
purposes of [*] and [*], in writing at the time of termination.  
 
3.           Equity Participation.  Buyer anticipates that, with respect to each
of the product applications described on Exhibit B hereto, Buyer will create a
subsidiary entity for the purpose of commercializing such product application
(the “Application Subsidiary”). Buyer and Seller agree that, upon formation of
any such entity, Buyer and Seller shall enter into good faith negotiations for
the sale by Buyer of up to five percent (5%) of the voting ownership interests
of such entity to Seller at a valuation and on such other terms as may be
mutually agreeable. Neither Buyer nor Seller shall have any obligation to
consummate the purchase or sale of such equity securities.
 
4.           Ordering, Purchase Price and Payment. 
 
4.1           Purchase Orders.  Buyer shall periodically submit to Seller
purchase orders for the Product, which purchase orders shall set forth specific
quantities, delivery date and shipping instructions.  Purchase orders shall be
submitted to Seller at least thirty (30) days before the delivery date specified
therein.  The minimum purchase order quantity and minimum pack size shall be
twenty (20) kilograms.

 
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4.2           Fulfillment.  Seller does not guarantee fulfillment of any
purchase orders submitted on less than thirty (30) days’ prior notice; provided,
however, that Seller will use its commercially reasonable efforts to fulfill any
such purchase orders received on less than thirty (30) days’ prior notice.
 
4.3           Purchase Price; Payment.  The purchase price for the Product shall
be [*] United States Dollars ($[*]) per kilogram of the Product (the “Price”).
Payment shall be made in cash, via wire transfer, to Seller within thirty (30)
days of the invoice date set forth in an applicable purchase order. Seller shall
provide wire transfer instructions to Buyer concurrently with any such invoice.
Subject to Buyer’s right to cure as provided in Section 10.2 of this Agreement,
Buyer’s failure to make prompt and full payment of an invoice shall constitute a
material breach of this Agreement.  The Price shall also be subject to volume
discounts.
 
4.4           Taxes and Import Duties.  The Price does not include federal,
state or local sales taxes, use taxes, occupational taxes or import
duties.  Unless prohibited by law, Buyer is responsible for and shall pay all
applicable sales, use, occupational, excise, value-added or other similar taxes
or import duties applicable to the manufacture, sale, pricing, delivery or use
of the Products provided by Seller, or in lieu thereof, Buyer shall provide
Seller with a tax-exemption certificate acceptable to and considered valid by
the applicable taxing authorities.
 
5.           Royalties.
 
5.1           For purposes of this Agreement, “Net Sales” shall mean, with
respect to any Finished Products, the gross revenues received by Buyer from the
sale of such Finished Product, less any (a) trade, quantity and cash discounts
on Finished Product actually provided to third parties in connection with
arms-length transactions, (b) credits, allowances or refunds, not to exceed the
original invoice amount, for actual claims, damaged goods, rejections or returns
of Finished Product, (c) actual freight and insurance costs incurred in
transporting such Finished Product to such customers, and (d) excise, sale, use,
value added or other taxes, other than income taxes paid by Buyer due to the
sale of Finished Product.
 
5.2           Royalty Rate.  Buyer shall pay to Seller a [*] percent ([*]%)
royalty on all Net Sales of Finished Products by Buyer that are either retail
sales or direct sales to consumers and a [*] percent ([*]%) royalty on all Net
Sales of Finished Products by Buyer that are wholesale sales. With respect to
Net Sales for any application set forth on Exhibit B, for one (1) year from the
Effective Date or until [*] of Royalties have accrued from the sale of Finished
Products with respect to such application, whichever is later (the later of such
dates being referred to as the “Conversion Date”), Seller has the right to
convert accrued Royalties to equity in the Application Subsidiary relating to
that application at a rate mutually agreed upon by both parties in good
faith.  The Seller shall notify Buyer of its decision to convert, or not to
convert, Royalties to equity in the Application Subsidiary in writing within 30
days after the Conversion Date. If Seller fails to notify Buyer within such
30-day period, Seller shall be deemed to have decided not to convert Royalty
payments into equity of the Application Subsidiary. If Seller elects to receive
Royalty payments in lieu of equity in the Application Subsidiary, Buyer shall
have twelve (12) months from the date of notice from Seller to pay all accrued
Royalties. In either case after the decision is made, royalties shall revert to
[*] percent ([*]%) royalty rate on all Net Sales of Finished Products by Buyer
that are either retail sales or direct to consumer sales and a [*] percent
([*]%) royalty rate on all Net Sales of Finished Products by Buyer that are
wholesale sales.
 
5.3           Royalty Payments and Accounting.  During the Term, Buyer shall
furnish to Seller a quarterly written report showing in reasonably specific
detail the calculation of royalties owing for the reporting period (“Royalty
Report”) broken down by application.  Buyer shall keep complete and accurate
records in sufficient detail to enable the Royalties payable hereunder to be
determined.

 
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5.4           Audits.  Upon the written request of Seller and not more than once
in each calendar year, Buyer shall permit an independent certified public
accounting firm of nationally recognized standing selected by Seller and
reasonably acceptable to Buyer, at Seller’s expense, to have access during
normal business hours to such of the records of Seller as may be reasonably
necessary to verify the accuracy of the royalty reports for any year ending not
more than twenty-four (24) months prior to the date of such request.  The
accounting firm shall disclose to Seller only whether or not the reports are
correct and the amount of any discrepancies.  No other information shall be
shared.  If such accounting firm concludes that additional royalties were owed
during such period, Buyer shall pay the additional royalties within thirty (30)
days of the date Seller delivers to Buyer such accounting firm’s written report
so concluding.  The fees charged by such accounting firm shall be paid by
Seller; provided, however, if the audit correctly discloses an under reporting
and underpayment in excess of five percent (5%) for any twelve-month (12-month)
period are owed by Buyer for the audited period, then Buyer shall pay the
reasonable fees and expenses charged by such accounting firm.
 
6.           Obligations.
 
6.1           Restrictions. Seller shall supply the Product to Buyer pursuant to
valid purchase orders, and Buyer shall purchase the Product exclusively from
Seller.
 
6.2           Sales in Bulk. Buyer may not re-sell or re-ship the Product in
bulk raw material form, unless expressly authorized to do so in writing by
Seller.
 
6.3           Labeling. For U.S. distribution, on or in labels, packaging,
advertising, promotional materials or Internet communications for the Finished
Product, Buyer will only make claims that are substantiated by competent and
reliable scientific evidence and are in compliance with all applicable laws,
rules and regulations. Buyer may not use, in labeling, advertising, promotion or
otherwise: (a) any statements or quotations made by or attributed to any
investigator who has conducted clinical studies on the Product; or (b) any
photographs or other images of such investigators, without (i) the prior written
consent of such investigators and the institutions at which such studies were
conducted, and (ii) twenty (20) days’ notification to Seller of such written
consent prior to any such use. Buyer will not misrepresent on product labels the
amount, quantity or level of the Product contained in the Finished Product.
Buyer hereby guarantees compliance with the requirements of this Section 6.4,
specifically including compliance with current Good Manufacturing Practices as
set forth in 21 C.F.R. § 111 (2015), as it may be amended from time to time, and
other relevant rules, regulations, statutes and laws.  In the event that current
labeling, packaging or formulations of the Finished Product do not comply with
the requirements of this Section 6.4, Buyer will immediately rectify all
nonconforming Finished Product in a manner acceptable to Seller, or Seller
reserves the right to immediately terminate this Agreement.

 
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6.4           Patent Marking.  During the Term, Buyer will ensure proper patent
marking on all Finished Product.  All Finished Product shall be marked as
follows:
 
“Patent: See www.ChromaDexPatents.com”
 
7.           Delivery and Risk of Loss.  All sales are FOB\FCA Seller’s U.S.
dock. Risk of loss and destruction of, or damage to, the Product shall be
Seller’s until delivery of the Product to a common carrier at Seller’s U.S.
dock. Thereafter, title shall pass to Buyer, and Buyer shall be fully
responsible, and shall hold Seller harmless, for and assume all risk of loss and
destruction of, or damage to, the Product. Loss or damage to the Product after
risk of loss has passed to Buyer will not release or excuse Buyer from its
obligations to Seller under this Agreement, including the obligation to make
full payment of the purchase price. Seller reserves the right to pack or ship
orders of the Product in the most economical manner; provided, however, that the
use of such right does not result in increased risk of loss of the
Product.  However, where Buyer requests special packaging or shipping, any
additional cost will be billed to and be the responsibility of Buyer. Buyer
acknowledges that Seller cannot accept returns, unless the Product to be
returned does not meet the Specification or are otherwise defective.
 
8.           Delivery Delays.  Seller shall use its commercially reasonable
efforts to make prompt deliveries in a commercially reasonable manner. Delivery
dates and estimates are, however, not guaranteed. Seller disclaims any liability
or responsibility, and Buyer shall hold Seller harmless, for the late or
non-delivery of the Product. Buyer has no right to delay or defer delivery or
acceptance.
 
9.           Rejection and Revocation of Acceptance.  Any rejection or
revocation of acceptance of the Product by Buyer must be made within thirty (30)
days of delivery of the Product and any attempted rejection or revocation of
acceptance of such Product made after the expiration of such thirty (30) day
period shall be null and void unless agreed to in writing by Seller. Failure to
make a claim within such thirty (30) day period shall be conclusive evidence
that the Product was satisfactory in all respects and supplied in accordance
with the Specification.  Each shipment hereunder is to be regarded as a separate
and independent sale. Seller’s weights and analysis shall govern and control.
 
10.           Term and Termination.
 
10.1           Term.  This Agreement shall commence on the Effective Date and,
as to the product applications set forth on Exhibit B, shall remain in full
force and effect for a term (the “Term”) equal to the period of time set forth
opposite such application under the column entitled “Term” and automatically
renew for successive five (5) year terms so long as Buyer is meeting Minimum
Revenues.  The Parties recognize that this Agreement may terminate as to some
product applications and yet remain in full force and effect with respect to
other product applications depending on the applicable “Term” for such product
application.
 
10.2           Termination.  Notwithstanding the foregoing, this Agreement may
be terminated, in whole or in part, by:  (i) a Party in the event of a breach by
the other Party of its covenants or obligations hereunder, which breach remains
uncured for a period of thirty (30) days after written notice of such breach is
provided by the non-breaching Party to the breaching Party; (ii) a Party
immediately upon the giving of notice if the other Party files a petition for
bankruptcy, is adjudicated bankrupt, takes advantage of the insolvency laws of
any state, territory or country, or has a receiver, trustee, or other court
officer appointed for its property; or (iii) a Party, if an event of Force
Majeure (as described in Section 14 of this Agreement) with respect to the other
Party shall have continued for ninety (90) days or is reasonably expected to
continue for more than one hundred eighty (180) days; or (iv) by Seller in any
product application upon 30 days prior written notice if Buyer’s Exclusivity in
that particular product application is terminated in accordance with Section
10.1.

 
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11.           LIMITED WARRANTY AND DISCLAIMER OF ALL OTHER WARRANTIES.
 
(A) SELLER WARRANTS THAT THE PRODUCT SOLD HEREUNDER CONFORMS TO THE
SPECIFICATION; (B) EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION 11(A), SELLER
HEREBY EXPRESSLY DISCLAIMS ANY AND ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
WITH RESPECT TO THE PRODUCT, INCLUDING, BUT NOT LIMITED TO, THE WARRANTY OF
FITNESS FOR A PARTICULAR PURPOSE. SELLER HAS NOT MADE ANY RECOMMENDATION TO
BUYER REGARDING THE USE OR SUBSEQUENT SALE OF THE PRODUCT. BUYER HAS SATISFIED
ITSELF THAT THE PRODUCT AND THE PURPOSE FOR WHICH IT WILL BE USED AND/OR SOLD IS
IN COMPLIANCE WITH THE LAWS OF THE RELEVANT COUNTRIES; (C) BUYER’S EXCLUSIVE
REMEDY AND SELLER’S EXCLUSIVE LIABILITY FOR SHIPMENT OF NON-CONFORMING PRODUCT
SHALL BE LIMITED TO, AT SELLER’S SOLE OPTION, EITHER REPLACEMENT OF THE
NON-CONFORMING PRODUCT OR A REFUND OF THE PURCHASE PRICE PAID FOR SUCH
NON-CONFORMING PRODUCT. ALL CLAIMS MADE WITH RESPECT TO THE PRODUCT SHALL BE
DEEMED WAIVED BY BUYER UNLESS MADE IN WRITING AND RECEIVED BY SELLER WITHIN
THIRTY (30) DAYS OF DELIVERY OF SUCH PRODUCT. BUYER MUST MAKE ANY CLAIM FOR
NON-COMFORMING PRODUCT, BREACH OF WARRANTY WITH RESPECT TO THE PRODUCT SOLD, OR
ANY CLAIM OF ANY NATURE WHATSOEVER WITH RESPECT TO THE PRODUCT SOLD HEREUNDER IN
WRITING WITHIN THIRTY (30) DAYS AFTER BUYER’S RECEIPT OF THE PRODUCT. BUYER
IRREVOCABLY WAIVES AND RELEASES ALL CLAIMS THAT ARE NOT PROPERLY MADE WITHIN
SAID THIRTY (30) DAY PERIOD.
 
12.           LIMITATION OF LIABILITY.
 
TO THE FULLEST EXTENT PERMITTED BY LAW, THE PARTIES WAIVE AND RELINQUISH ANY
CLAIMS, DEMANDS, AND CAUSES OF ACTION OR RECOVERIES FOR PUNITIVE DAMAGES,
EXEMPLARY DAMAGES, OR STATUTORY DAMAGES.  IN NO EVENT WILL EITHER PARTY BE
LIABLE FOR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING UNDER
THIS AGREEMENT OR OTHERWISE WITH RESPECT TO THE SALE OF THE PRODUCT, INCLUDING
ANY LOST REVENUES OR PROFITS, CONSEQUENTIAL AND/OR INCIDENTAL DAMAGES, BUSINESS
INTERRUPTION OR DAMAGE TO BUSINESS REPUTATION, REGARDLESS OF THE THEORY UPON
WHICH ANY CLAIM MAY BE BASED, INCLUDING ANY TORT OR STATUTORY CAUSES OF ACTION.
BOTH PARTIES UNDERSTAND AND AGREE THAT THIS LIMITATION OF LIABILITY ALLOCATES
RISK OF NONCONFORMING GOODS BETWEEN THE PARTIES AS AUTHORIZED BY THE UNIFORM
COMMERCIAL CODE AND OTHER APPLICABLE LAW.  THE PRICES SET FORTH HEREIN REFLECT
THIS ALLOCATION OF RISK AND THE LIMITATIONS OF LIABILITY, INCLUDING THE
EXCLUSION OF SPECIAL, INDIRECT, CONSEQUENTIAL AND INCIDENTAL DAMAGES, IN THIS
AGREEMENT.
 
13.           Intellectual Property Rights.  The sale of the Product to Buyer
shall not confer upon Buyer any license or right under any patents, trade
secrets or other proprietary information owned or controlled by Seller, or the
right to otherwise utilize such proprietary information, it being specifically
understood and agreed that all such rights are reserved to Seller.  Buyer shall
use the Product trademark NIAGEN®, and agrees to do so in accordance with that
certain Trademark License Agreement to be executed by the Parties prior to the
sale or marketing of the Finished Product.

 
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14.           Waiver and Severability.  No claim or right arising out of a
breach of this Agreement can be discharged in whole or in part by a waiver or
renunciation of the claim or right unless the waiver or renunciation is
supported by consideration and is in writing signed by the aggrieved Party. If
any term, covenant, warranty, remedy or condition of this Agreement, or the
application thereof to any person or circumstance shall, to any extent, be held
or deemed invalid or unenforceable, the remainder of this Agreement or the
application of such term, covenant or provision, to persons or circumstances
other than those to which it is held invalid or unenforceable, shall not be
affected thereby, and each remaining term, covenant or provision of this
Agreement shall be deemed valid and enforced to the fullest extent permitted by
law.
 
15.           Force Majeure.  A Party shall have no liability or obligation to
the other Party of any kind, including, but not limited to, any obligation to
deliver the Product or to make payment or accept delivery of the Product,
arising from any delay or failure to perform all or any part of this Agreement
as a result of causes, conduct or occurrences beyond such Party’s reasonable
control, including, but not limited to, commercial impracticability, fire,
flood, earthquake, lightning, storm, accidents, act of war, terrorism, civil
disorder or disobedience, act of public enemies, problems associated with
transportation (including car or truck shortages), shortages of energy or raw
materials, acts or failure to act of any state, federal or foreign governmental
or regulatory authorities, labor disputes, strikes, or failure of suppliers to
make timely deliveries of materials, goods or services to Seller.  Seller may
allocate its available supply among its customers in a manner determined by
Seller to be fair and reasonable.
 
16.           Indemnification and Insurance. To the fullest extent permitted by
law, Buyer shall defend, indemnify and hold Seller harmless from any and all
claims, demands, causes of action, controversy, liabilities, fines, regulatory
actions, seizures of the Product, losses, costs and expenses (including, but not
limited to, attorneys’ fees, expert witness expenses and litigation expenses)
(hereinafter “Claim”), arising from or in connection with any Claim asserted by
a third party against Seller for any damage, environmental liability, patent or
intellectual property infringement caused by Buyer’s use, modification or
alteration of the Product, injury, death, loss, property damage, delay or
failure in delivery of Seller’s Product or any other Claim, whether in tort,
contract, breach of warranty or otherwise, relating to this Agreement, the
business relationship between the Parties, the Product  provided hereunder, or
Buyer’s breach of this Agreement. Notwithstanding the foregoing, Buyer has no
indemnity obligation to Seller to the extent that any Claims result from the
willful misconduct or gross negligence of Seller.
 
To the fullest extent permitted by law, Seller shall defend, indemnify and hold
Buyer harmless from any and all Claims, arising from or in connection with any
Claim asserted by a third party against Buyer for any patent or intellectual
property infringement in connection with the Product (provided, that, such
alleged infringement does not arise from the combination of the Product with
other ingredients), injury, death, loss, property damage or any other Claim,
whether in tort, contract, breach of warranty or otherwise, relating directly to
the Product (except if such injury, death, loss, property damage or other Claim
arises from the combination of the Product with other ingredients or from the
packaging, delivery or subsequent handling by Buyer), or Seller’s breach of this
Agreement. Notwithstanding the foregoing, Seller has no indemnity obligation to
Buyer to the extent that any Claims result from the willful misconduct or gross
negligence of Buyer.
 
The Parties agree, for the Term, to maintain a program of insurance or
self-insurance at levels sufficient to satisfy their respective obligations as
set forth in this Agreement.  Upon request by either Party, the other Party
shall promptly disclose to the other Party, the insurance maintained by such
disclosing Party in reasonable detail.

 
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17.           Relationship.  The relationship between Seller and Buyer shall be
that of independent contractors, and neither Party, its agents and employees,
shall under any circumstances be deemed the employees, distributors,
franchisees, agents or representatives of the other Party.
 
18.           Assignment and Modification.  The rights and obligations of Buyer
under this Agreement shall not be assignable without the prior written consent
of Seller, except that Buyer may assign its rights hereunder, in whole or in
part, to an Affiliate of Buyer.  This Agreement shall not be modified, altered
or amended in any respect except by a writing signed by the Parties. Any
variation, modification or addition to the terms set forth in this Agreement
shall be considered a material modification and shall not be considered part of
this Agreement unless evidenced by a writing signed by the Parties.
 
19.           Governing Law. This Agreement and all claims and causes of action
shall be governed by and subject to the internal laws (exclusive of the
conflicts of law provisions) and decisions of the courts of the State of
California.  The sole and exclusive venue for all claims and causes of action
between the Parties shall be the state or federal court located in Orange
County, California.
 
20.           Notices.  Any demand upon or notice to a Party hereunder shall be
effective when delivered by hand or when properly deposited in the mails postage
prepaid, or sent by e-mail or electronic facsimile transmission with receipt
acknowledged, or delivered to an overnight courier, in each case addressed to
the Party at the address shown below or such other address as the Parties may
advise in writing.
 
If to Seller:
 
ChromaDex, Inc.
10005 Muirlands Blvd., Suite G
Irvine, California 92618
Attention: Tom Varvaro
Fax: 949-419-0294
Email: tom.varvaro@chromadex.com
If to Buyer:
 
Nectar 7, LLC
12526 High Bluff Dr., Suite 210
San Diego, California 92130
Attention:  David J. D’Arcangelo
Fax: 858-638-7226
Email: david@financialdestinyblog.com  or
david@nectar7.com

 
21.           Entire Agreement.  This Agreement, the exhibits hereto and any
documents referred to herein contain the complete agreement between the Parties
with respect to the subject matter hereof.  All previous agreements,
representations, warranties, promises and conditions relating to the subject
matter of this Agreement are superseded by this Agreement.
 
22.           Counterparts.  This Agreement may be executed and delivered in one
or more counterparts, each of which when executed and delivered shall be an
original, and all of which when executed shall constitute one and the same
instrument.  The exchange of copies of this Agreement and of signature pages by
facsimile or other electronic transmission shall constitute effective execution
and delivery of this Agreement as to the Parties and may be used in lieu of the
original Agreement for all purposes.  Signatures of the Parties transmitted by
facsimile or other electronic means shall be deemed to be their original
signatures for all purposes.
 
[Signatures to Follow]

 
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized representatives as of the Effective Date.

BUYER:
 
Nectar7, LLC
Seller:
 
ChromaDex, Inc.
 
/s/ David J. D’Arcangelo
Name: David J. D’Arcangelo
Title: Manager
Date: August 28, 2015
 
/s/ Troy Rhonemus
Name: Troy Rhonemus
Title: Chief Operating Officer
Date: August 28, 2015

 
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EXHIBIT A
Product Specification
 
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EXHIBIT B
Exclusivity Rights

The following table specifies the time periods (the “Exclusivity Term”) and
geographic areas (the “Exclusivity Area/Region”) in which Buyer will have the
exclusive right to sell in any non-Excluded Field the indicated products, with
the exception of the Excluded Products, for the applications described below:

 
·
Seller shall have the right to terminate Buyer’s exclusivity as to any product
application if Buyer’s aggregate revenues from the sale of products for such
application shall not exceed the minimum levels set forth under the column
“Minimum Revenues” for the periods indicated in such column.  In instances where
Buyer and Seller are to determine or establish minimum revenue targets after the
date of this Agreement, Buyer and Seller shall work in good faith to establish
commercially reasonable targets, taking into account the proposed product
application, the anticipated market size and other relevant factors.

 
·
All dollar amounts below refer to United States (US) dollars.

 
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Product
 
 
Product Application
 
 
 
Term
 
 
Exclusivity Area/Region
 
 
Minimum Revenues/Obligations
“Minimum Revenues”
 
                 
NIAGEN®
 
Oral consumption as a vitamin or nutraceutical supplement.
 
Five (5) years.
 
The Middle East (i.e. the countries or territories of Turkey, Cyprus, Syria,
Lebanon, Iraq, Iran, Israel, the West Bank, the Gaza Strip, Jordan, Egypt,
Sudan, Libya and the various states and territories of Arabia proper (Saudi
Arabia, Kuwait, Yemen, Oman, Bahrain, Qatar and the United Arab Emirates) to the
extent Product shall be lawfully sold.
 
For 6 months from Effective Date, Minimum Revenues are waived but Buyer must
launch at least one Finished Product containing the Product;
 
$[*] for Year 1 (Year 1 begins 6 months after the Effective Date)
 
[*] for Year 2
 
[*] for Year 3
 
$[*] for Year 4
 
$[*] for any single 12-month period between the Effective Date and _____ 2020.
 
After reaching the $[*] milestone for any single 12-month period, $[*] for each
subsequent twelve (12) month period thereafter.
 
                 
NIAGEN®
 
Finished Products for wound healing,  including prevention and treatment, with
the exception of cosmetics, prescription drugs and Over-the-Counter (OTC)
therapeutic category subtopics: Acne; Dandruff; Seborrheic Dermatitis;
Psoriasis; Skin Protectant; Sunscreen.
 
 
 
 
five (5) years.
 
The world.
 
$[*] for the 12-month period ending December 31, 2016.
 
$[*] for 12-month period ending December 31, 2017
 
$[*] for the 12-month period ending December 31, 2018
 
$[*] for any single 12-month period ending _____ 2019.
 
After reaching the $[*] milestone for any single 12-month period, $[*] for each
subsequent 12-month period thereafter.
 
NIAGEN®
 
Nutritional and medicinal products for  livestock (cattle, goats, sheep and
pigs), horses and poultry.
 
Five (5) years; provided, that, within 24 months of the Effective Date, Buyer
has entered into an agreement to sell products for this application.
 
 
The world.
 
$[*] for YEAR 3 (beginning 24 months from Effective Date) and increasing [*]%
every year thereafter until reach $[*]
 
 

 
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Nano NIAGEN®
 
Nano NIAGEN® shall mean smaller particles of NIAGEN® for delivery in liquid or
other forms (“Liquid NIAGEN®”) utilizing strips, liquid pump spray or  liquid
drops from containers containing two (2) ounces or less, or other delivery
systems for Liquid NIAGEN, whether or not such product must be refrigerated to
preserve its efficacy.
 
 
 
5 years from the date that Liquid NIAGEN® is ready for commercialization without
the use of refrigeration; provided, that, within 12 months of the date which
Liquid Niagen is ready for commercialization without refrigeration, Buyer has
launched a consumer Liquid NIAGEN product on its website.
 
 
The world.
 
$[*]  for YEAR 3 (beginning 24 months from Effective Date) and increasing [*]%
every year thereafter until the minimum revenue target has reached $[*]
 
NIAGEN®
 
Dietary Supplement in the form of a tablet or capsule
 
Seller launches product within 1 year of Effective Date in each country or loses
exclusivity for that specific country
 
Philippines, Taiwan, Hong Kong (not all of China), Singapore
 
For 6 months from Effective Date, Minimum Revenues are waived but Buyer must
launch at least one Finished Product containing the Product:
 
$[*] for Year 1 (Year 1 begins 6 month after the Effective Date)
 
$[*] for Year 2
 
$[*] for Year 3
 
$[*] for Year 4
 
$[*] for any single twelve (12) month period between the Effective Date and
_____ 2020.
 
 NIAGEN®
 
 
Sports hydration beverages with a Nutrition Facts label and a net quantity
contents greater than 2oz
 
 1 Year
 
 
United States
 
 
Meet with 1 potential customer and have made meaningful progress toward deal to
the reasonable  satisfaction of Seller within 90 days of Effective Date;
 
For every 90 days thereafter, Buyer shall have made meaningful progress toward
closing a deal to the reasonable satisfaction of Seller.
 
 

 
 
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FIRST ADDENDUM TO THE NIAGEN® SUPPLY AGREEMENT BETWEEN
NECTAR7 LLC AND CHROMADEX, INC.

This First Addendum (the “Addendum”) dated September 30, 2015 (“Addendum
Effective Date”), is attached to and forms part of the SUPPLY AGREEMENT (the
“Agreement”) dated August 28, 2015 made by and between ChromaDex, Inc., a
California corporation, having a principal place of business at 10005 Muirlands
Blvd, Suite G, Irvine, CA 92618 (“Seller”) and Nectar7 LLC, a Delaware limited
liability company, with principal offices located at 12526 High Bluff Drive,
Suite 210, San Diego, CA 92130 (“Buyer”).  To the extent that any of the terms
or conditions contained in this Addendum may contradict or conflict with any of
the terms or conditions of the Agreement, it is expressly understood and agreed
that the terms of this Addendum shall take precedence and supersede the
Agreement.

RECITALS

WHEREAS, the parties desire to amend the Agreement as provided herein;

NOW THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:

1.
Amend Exhibit B - Exclusivity Rights to add and include the following additional
rights:

 
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EXHIBIT B
Exclusivity Rights

Product
 
 
Product Application
 
 
 
Term
 
 
Exclusivity Area/Region
 
 
Minimum
Purchase Requirements/Obligations
“Minimum Revenues”
                 
NIAGEN®
 
Dietary Supplement in the form of a tablet, capsule, powder, liquid, or spray
containing a combination of NIAGEN® and collagen
 
Five (5) years
 
United States
 
For rights to sell the Product Application in the Area/Region, Buyer agrees to
meet the following take or pay requirements.  For the exclusive rights for the
Product Application in the Area/Region, Buyer shall also meet the following
Minimum Revenue requirements for Product used in this Product Application
(Dietary Supplement in the form of a tablet, capsule, powder, or a single
serving ready to drink shot containing a combination of NIAGEN® and collagen):
2016:
Take or pay an aggregate of $[*] of Product for use in any Product Application,
in quarterly payments of the following:
Q1 = $[*]
Q2 = $[*]
Q3 = $[*]
Q4 = $[*]
 
Any shortfalls in quarterly payments shall be cured the quarter immediately
following the shortfall.
Minimum Revenue: $[*]
2017: Take or pay $[*] of Product for use in any Product Application, with
quarterly payments of $[*] and
Minimum Revenue of $[*]
2018: Take or pay $[*] of Product for use in any Product Application, with
quarterly payments of $[*] and
Minimum Revenue of $[*]
 
Every year thereafter shall be negotiated in good faith, but shall not be less
than $[*] take or pay per year.
 
Buyer may cancel above take or pay obligation upon 90 days written notice
resulting in the simultaneous termination of exclusivity.

 
2.
All other terms and conditions of the SUPPLY AGREEMENT remain the same.

 
3.
This Addendum may be executed in two or more counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the
same instrument.  Facsimile, Portable Document Format (PDF) or photocopied
signatures of the Parties will have the same legal validity as original
signatures.

IN WITNESS WHEREOF, the parties have executed this Addendum by their duly
authorized representatives for good and valuable consideration.

 

CHROMADEX, INC.      NECTAR7 LLC
 
 
By:
/s/ Troy Rhonemus   By: /s/ David D’Arcangelo   Name: Troy Rhonemus   Name:
David D’Arcangelo   Title: COO   Title: Member Date: 10/1/2015   Date: 9/30/2015

 
                                                       
 
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