Blueprint





 







Exhibit 10.1

 



THIRD BUSINESS FINANCING MODIFICATION AGREEMENT

 


This
Third Business Financing Modification Agreement (this
“Agreement”) is entered into as of April 19, 2017, by
and among CHROMADEX CORPORATION, a Delaware corporation, CHROMADEX,
INC., a California corporation, CHROMADEX ANALYTICS, INC., a Nevada
corporation (“Existing Borrowers”) and HEALTHSPAN
RESEARCH LLC, a Delaware limited liability company (“New
Borrower”, and together with Existing Borrowers, 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, Existing Borrowers are indebted to Lender
pursuant to, among other documents, a Business Financing Agreement,
dated November 4, 2016, by and among Existing 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 (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.
ACKNOWLEDGMENT OF
DEFAULTS. Borrowers hereby acknowledge that they are
currently in default under the Business Financing Agreement due to
(i) Borrowers’ failure to maintain the minimum Quick Ratio as
required by Section 4.12(a) of the Business Financing Agreement (as
in effect prior to the date hereof) for the measuring periods ended
January 31, 2017, and February 28, 2017 and (ii) Borrowers’
failure to make New Borrower a Borrower under the Business
Financing Agreement on or prior to April 11, 2017 as required by
the Second Business Financing Modification Agreement (collectively,
the “Existing Defaults”).

 


3.
WAIVER OF EXISTING
DEFAULTS. On the date of this Agreement, Lender hereby
waives the Existing Defaults. Nothing contained herein shall
constitute or effect a continuing waiver or a course of conduct
waiving these or any other provision of the Business Financing
Agreement.

 


4.
NEW BORROWER
JOINDER. From and after the date hereof, New Borrower hereby
absolutely and unconditionally: (i) joins as and becomes a party to
the Business Financing Agreement as a Borrower thereunder, (ii)
assumes all of the obligations, liabilities and indemnities of a
Borrower under the Business Financing Agreement and all other Loan
Documents, and (iii) covenants and agrees to be bound by and adhere
to all of the terms, covenants, waivers, releases, agreements and
conditions of or respecting the Borrowers with respect to the
Business Financing Agreement and the other Loan Documents and all
of the representations and warranties contained in the Business
Financing Agreement and the other Loan Documents with respect to
the Borrowers; and (iv) hereby grants to Lender a continuing
security interest in all of such New Borrower’s now owned and
existing and hereafter acquired and arising Collateral, as
collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by
acceleration or otherwise under the Loan Documents) of all of the
Obligations. New Borrower hereby authorizes Lender to file at any
time uniform commercial code financing statements in such
jurisdictions and offices as Lender deems reasonably necessary in
connection with the perfection of a security interest in all of
such New Borrower’s now owned or hereafter arising or
acquired Collateral. New Borrower has read the Business Financing
Agreement and affirmatively grants to Lender a security interest in
New Borrower’s Collateral as set forth in said Business
Financing Agreement and the Loan Documents.

 



 

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5.
DESCRIPTION OF CHANGE IN
TERMS.

 


A.
Modifications to Business
Financing Agreement and all Existing Documents:

 


(i)
Section 4.12(a) of the Business Financing Agreement hereby is
amended and restated in its entirety and replaced with the
following:

 


“(a) Quick
Ratio, at all times when any Advances are outstanding, but tested
at each Month End (when Advances are outstanding during such month
of measurement at any time), not less than 0.8 to
1.0.”

 


(ii)
The third sentence of Section 1.1 of the Business Financing
Agreement hereby is amended and restated in its entirety and
replaced with the following:

 


“It shall be
a condition to each Advance that (a) an Advance Request acceptable
to Lender has been received by Lender, (b) all of the
representations and warranties set forth in Section 3 are true and
correct in all material respects on the date of such Advance as
though made at and as of each such date, (c) Borrowers shall
deliver to Lender evidence, in form and substance satisfactory to
Lender in its good faith business discretion, that Borrowers have
maintained a Quick Ratio of not less than 0.8 to 1.0 for each of
the three (3) months immediately preceding the date of such request
for an Advance, and (d) no Default has occurred and is continuing,
or would result from such Advance.”

 


6.
CONSISTENT CHANGES.
The Existing Documents are each hereby amended wherever necessary
to reflect the changes described above.

 


7.
PAYMENT OF MODIFICATION
FEE AND DOCUMENTATION FEE. Borrowers shall pay Lender (i) a
modification fee in the amount of $7,500 plus (ii) 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.

 


8.
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:

 


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.


 



 

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9.
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.


 


10.
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).

 


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.


 




 

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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.

 


11.
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;

 


(b) a
certificate of each Borrower with respect to incumbency and
resolutions authorizing the execution and delivery of this
Agreement;

 


(c) an
Intellectual Property Security Agreement, duly executed by New
Borrower;

 


(d)
payment of a modification fee in the amount of Seven Thousand Five
Hundred Dollars ($7,500), which may be debited from any of
Borrowers' accounts,

 


(e)
payment of all reasonable expenses incurred by Lender in connection
with the execution hereof, which may be debited from any of
Borrowers' accounts; and

 


(f)
such other documents, and completion of such other matters, as
Lender may reasonably deem necessary or appropriate.

 


12.
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.

 


13.
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 Third 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/ Justin
Vogel


	

Name:
Justin Vogel


	

Title:
Vice President







 


 


[Signature
Page to Third Business Financing Modification
Agreement]


 




 

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