Exhibit 10.7
 
FOURTH BUSINESS FINANCING MODIFICATION AGREEMENT
 
This Fourth Business Financing Modification Agreement (this “Agreement”) is
entered into as of July 13, 2017, by and among CHROMADEX CORPORATION, a Delaware
corporation, CHROMADEX, INC., a California corporation, CHROMADEX ANALYTICS,
INC., a Nevada corporation and HEALTHSPAN RESEARCH LLC, a Delaware limited
liability company (each, a “Borrower” and collectively, “Borrowers”), and
WESTERN ALLIANCE BANK, an Arizona corporation (“Lender”).
 
1.             DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness
which may be owing by Borrowers to Lender, Borrowers are indebted to Lender
pursuant to, among other documents, a Business Financing Agreement, dated
November 4, 2016, by and among Borrowers and Lender, as may be amended from time
to time, including, without limitation, by that certain First Business Financing
Modification Agreement dated as of February 16, 2017, and that certain Second
Business Financing Modification Agreement dated as of March 12, 2017 and that
certain Third Business Financing Modification Agreement dated as of April 19,
2017 (the “Business Financing Agreement”). Capitalized terms used without
definition herein shall have the meanings assigned to them in the Business
Financing Agreement.
 
Hereinafter, all indebtedness owing by Borrowers to Lender under the Existing
Documents (defined herein) shall be referred to as the “Obligations” and the
Business Financing Agreement and any and all other Loan Documents executed by
Borrowers in favor of Lender in connection therewith shall be referred to as the
“Existing Documents.”
 
2.             DESCRIPTION OF CHANGE IN TERMS.
 
A.           Modifications to Business Financing Agreement and all Existing
Documents:
 
(i) Section 4.13 of the Business Financing Agreement hereby is amended and
restated in its entirety and replaced with the following:
 
“4.13 Not make or contract to make, without Lender’s prior written consent,
capital expenditures, including leasehold improvements, in any fiscal year in
excess of $750,000 or incur liability for rentals of personal property (but
excluding real property leases) in an amount which, together with capital
expenditures, shall in any fiscal year exceed such sum.”
 
(ii) Section 12.1 of the Business Financing Agreement hereby is amended by
amending and restating clause (c) of the definition of “Permitted Indebtedness”
in its entirety to read as follows:
 
“(c) Purchase money indebtedness (including capital leases) incurred to acquire
capital assets in ordinary course of business and not exceeding $750,000”
 
3.             CONSISTENT CHANGES. The Existing Documents are each hereby
amended wherever necessary to reflect the changes described above.
 
4.             PAYMENT OF DOCUMENTATION FEE. Borrowers shall pay Lender all
out-of-pocket expenses (including but not limited to reasonable legal fees and
due diligence fees (if any)) incurred by Lender in connection with the execution
of this Agreement.
 
5.             NO DEFENSES OF BORROWERS/GENERAL RELEASE. Each Borrower agrees
that, as of this date, it has no defenses against the obligations to pay any
amounts presently due under the Obligations. Each Borrower (each, a “Releasing
Party”) acknowledges that Lender would not enter into this Agreement without
Releasing Party’s assurance that it has no claims against Lender or any of
Lender’s officers, directors, employees or agents. Except for the obligations
arising hereafter under this Agreement, each Releasing Party releases Lender,
and each of Lender’s and entity’s officers, directors and employees from any
known or unknown claims that Releasing Party now has against Lender of any
nature, including any claims that Releasing Party, its successors, counsel, and
advisors may in the future discover they would have now had if they had known
facts not now known to them, whether founded in contract, in tort or pursuant to
any other theory of liability, including but not limited to any claims arising
out of or related to the Agreement or the transactions contemplated thereby.
Releasing Party waives the provisions of California Civil Code section 1542,
which states:
 
 
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A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.
 
The provisions, waivers and releases set forth in this section are binding upon
each Releasing Party and its shareholders, agents, employees, assigns and
successors in interest. The provisions, waivers and releases of this section
shall inure to the benefit of Lender and its agents, employees, officers,
directors, assigns and successors in interest. The provisions of this section
shall survive payment in full of the Obligations, full performance of all the
terms of this Agreement and the Business Financing Agreement, and/or Lender’s
actions to exercise any remedy available under the Business Financing Agreement
or otherwise.
 
6.             CONTINUING VALIDITY. Borrowers understand and agree that in
modifying the existing Business Financing Agreement, Lender is relying upon
Borrowers’ representations, warranties, and agreements, as set forth in the
Existing Documents. Except as expressly modified pursuant to this Agreement, the
terms of the Existing Documents remain unchanged and in full force and effect.
Lender’s agreement to modifications to the existing Business Financing Agreement
pursuant to this Agreement in no way shall obligate Lender to make any future
modifications to the Business Financing Agreement. Nothing in this Agreement
shall constitute a satisfaction of the Obligations. It is the intention of
Lender and Borrowers to retain as liable parties all makers and endorsers of
Existing Documents, unless the party is expressly released by Lender in writing.
No maker, endorser, or guarantor will be released by virtue of this Agreement
except in accordance with the terms of this Agreement. The terms of this
paragraph apply not only to this Agreement, but also to any subsequent Business
Financing modification agreements.
 
7.             REFERENCE PROVISION.
 
A.           In the event the Jury Trial waiver is not enforceable, the parties
elect to proceed under this Judicial Reference Provision.
 
B.           With the exception of the items specified in Section 8(c) below,
any controversy, dispute or claim (each, a “Claim”) between the parties arising
out of or relating to this Agreement or any other document, instrument or
agreement between the undersigned parties (collectively in this Section, the
“Loan Documents”), will be resolved by a reference proceeding in California in
accordance with the provisions of Sections 638 et seq. of the California Code of
Civil Procedure (“CCP”), or their successor sections, which shall constitute the
exclusive remedy for the resolution of any Claim, including whether the Claim is
subject to the reference proceeding. Except as otherwise provided in the Loan
Documents, venue for the reference proceeding will be in the state or federal
court in the county or district where the real property involved in the action,
if any, is located or in the state or federal court in the county or district
where venue is otherwise appropriate under applicable law (the “Court”).
 
C.           The matters that shall not be subject to a reference are the
following: (i) nonjudicial foreclosure of any security interests in real or
personal property, (ii) exercise of self-help remedies (including, without
limitation, set-off), (iii) appointment of a receiver and (iv) temporary,
provisional or ancillary remedies (including, without limitation, writs of
attachment, writs of possession, temporary restraining orders or preliminary
injunctions). This reference provision does not limit the right of any party to
exercise or oppose any of the rights and remedies described in clauses (i) and
(ii) or to seek or oppose from a court of competent jurisdiction any of the
items described in clauses (iii) and (iv). The exercise of, or opposition to,
any of those items does not waive the right of any party to a reference pursuant
to this reference provision as provided herein.
 
D.           The referee shall be a retired judge or justice selected by mutual
written agreement of the parties. If the parties do not agree within ten (10)
days of a written request to do so by any party, then, upon request of any
party, the referee shall be selected by the Presiding Judge of the Court (or his
or her representative). A request for appointment of a referee may be heard on
an ex parte or expedited basis, and the parties agree that irreparable harm
would result if ex parte relief is not granted. Pursuant to CCP Sec. 170.6, each
party shall have one peremptory challenge to the referee selected by the
Presiding Judge of the Court (or his or her representative).
 
 
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E.           The parties agree that time is of the essence in conducting the
reference proceedings. Accordingly, the referee shall be requested, subject to
change in the time periods specified herein for good cause shown, to (i) set the
matter for a status and trial-setting conference within fifteen (15) days after
the date of selection of the referee, (ii) if practicable, try all issues of law
or fact within one hundred twenty (120) days after the date of the conference
and (iii) report a statement of decision within twenty (20) days after the
matter has been submitted for decision.
 
F.           The referee will have power to expand or limit the amount and
duration of discovery. The referee may set or extend discovery deadlines or
cutoffs for good cause, including a party’s failure to provide requested
discovery for any reason whatsoever. Unless otherwise ordered based upon good
cause shown, no party shall be entitled to “priority” in conducting discovery,
depositions may be taken by either party upon seven (7) days written notice, and
all other discovery shall be responded to within fifteen (15) days after
service. All disputes relating to discovery which cannot be resolved by the
parties shall be submitted to the referee whose decision shall be final and
binding.
 
G.           Except as expressly set forth herein, the referee shall determine
the manner in which the reference proceeding is conducted including the time and
place of hearings, the order of presentation of evidence, and all other
questions that arise with respect to the course of the reference proceeding. All
proceedings and hearings conducted before the referee, except for trial, shall
be conducted without a court reporter, except that when any party so requests, a
court reporter will be used at any hearing conducted before the referee, and the
referee will be provided a courtesy copy of the transcript. The party making
such a request shall have the obligation to arrange for and pay the court
reporter. Subject to the referee’s power to award costs to the prevailing party,
the parties will equally share the cost of the referee and the court reporter at
trial.
 
H.           The referee shall be required to determine all issues in accordance
with existing case law and the statutory laws of the State of California. The
rules of evidence applicable to proceedings at law in the State of California
will be applicable to the reference proceeding. The referee shall be empowered
to enter equitable as well as legal relief, enter equitable orders that will be
binding on the parties and rule on any motion which would be authorized in a
court proceeding, including without limitation motions for summary judgment or
summary adjudication. The referee shall issue a decision at the close of the
reference proceeding which disposes of all claims of the parties that are the
subject of the reference. Pursuant to CCP Sec. 644, such decision shall be
entered by the Court as a judgment or an order in the same manner as if the
action had been tried by the Court and any such decision will be final, binding
and conclusive. The parties reserve the right to appeal from the final judgment
or order or from any appealable decision or order entered by the referee. The
parties reserve the right to findings of fact, conclusions of laws, a written
statement of decision, and the right to move for a new trial or a different
judgment, which new trial, if granted, is also to be a reference proceeding
under this provision.
 
I.           If the enabling legislation which provides for appointment of a
referee is repealed (and no successor statute is enacted), any dispute between
the parties that would otherwise be determined by reference procedure will be
resolved and determined by arbitration. The arbitration will be conducted by a
retired judge or justice, in accordance with the California Arbitration Act
Sec.1280 through Sec.1294.2 of the CCP as amended from time to time. The
limitations with respect to discovery set forth above shall apply to any such
arbitration proceeding.
 
J.           THE PARTIES RECOGNIZE AND AGREE THAT ALL CONTROVERSIES, DISPUTES
AND CLAIMS RESOLVED UNDER THIS REFERENCE PROVISION WILL BE DECIDED BY A REFEREE
AND NOT BY A JURY. AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT)
WITH COUNSEL OF ITS, HIS OR HER OWN CHOICE, EACH PARTY KNOWINGLY AND
VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, AGREES THAT THIS
REFERENCE PROVISION WILL APPLY TO ANY CONTROVERSY, DISPUTE OR CLAIM BETWEEN OR
AMONG THEM ARISING OUT OF OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS.
 
8.             CONDITIONS. The effectiveness of this Agreement is conditioned
upon Lender’s receipt of the following, in form and substance satisfactory to
Lender:
 
(a)           this Agreement, duly executed by Borrowers;
 
 
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(b)           payment of all reasonable expenses incurred by Lender in
connection with the execution hereof, which may be debited from any of
Borrowers' accounts; and
 
(c)           such other documents, and completion of such other matters, as
Lender may reasonably deem necessary or appropriate.
 
9.             NOTICE OF FINAL AGREEMENT. BY SIGNING THIS DOCUMENT EACH PARTY
REPRESENTS AND AGREES THAT: (A) THIS WRITTEN AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES, (B) THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES, AND (C) THIS WRITTEN AGREEMENT MAY NOT BE CONTRADICTED BY
EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR
UNDERSTANDINGS OF THE PARTIES.
 
10.             COUNTERSIGNATURE. This Agreement shall become effective only
when executed by Lender and Borrowers.
 
 
 
[Balance of Page Intentionally Left Blank]
 
 

 
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IN WITNESS WHEREOF, Borrowers and Lender have executed this Agreement on the
date and year above written.
 
 
BORROWERS:
 
 
 
 
 
 
CHROMADEX CORPORATION,
a Delaware corporation
 
 
 
 
 
 
 
 
By: /s/ Thomas C. Varvaro
 
 
Name: Thomas C. Varvaro
 
 
Title: CFO
 
 
 
 
 
 
CHROMADEX, INC.,
a California corporation
 
 
 
 
 
 
 
 
By: /s/ Thomas C. Varvaro
 
 
Name: Thomas C. Varvaro
 
 
Title: CFO
 
 

 
 
CHROMADEX ANALYTICS, INC.,
a Nevada corporation
 
 
 
 
 
 
 
 
By: /s/ Thomas C. Varvaro
 
 
Name: Thomas C. Varvaro
 
 
Title: CFO
 
 
 
 
 
 
 
 
HEALTHSPAN RESEARCH LLC,
a Delaware limited liability company
 
 
 
 
 
 
 
 
By: /s/ Thomas C. Varvaro
 
 
Name: Thomas C. Varvaro
 
 
Title: CFO
 
 
 
 
 

 
[Signature Page to Fourth Business Financing Modification Agreement]
 
[Signatures continued on the next page]
 
 
 
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IN WITNESS WHEREOF, Borrowers and Lender have executed this Agreement on the
date and year above written.
 
LENDER:
 
 
WESTERN ALLIANCE BANK,
an Arizona corporation
 
 
By: /s/ Grant Simon
Name: Grant Simon
Title: AVP

 
 
 
[Signature Page to Fourth Business Financing Modification Agreement]
 
 
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