Document:

Exhibit 10.2

ZENDESK, INC. 

2014 EMPLOYEE STOCK PURCHASE PLAN 

The purpose of the Zendesk, Inc. 2014 Employee Stock Purchase Plan (the “Plan”) is to provide eligible employees of Zendesk, Inc. (the “Company”) and each Designated Company (as defined in Section 11) with opportunities to purchase shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”). 3,625,000 shares of Common Stock in the aggregate have been approved and reserved for this purpose, plus on January 1, 2015 and each January 1 thereafter, the number of shares of Common Stock reserved and available for issuance under the Plan shall be cumulatively increased by the lesser of 1,500,000 shares, one percent of the number of shares of Common Stock issued and outstanding on the immediately preceding December 31, and such lesser number of shares of common stock determined by the Administrator. 

The Plan includes two components: a Code Section 423 Component (the “423 Component”) and a non-Code Section 423 Component (the “Non-423 Component”). It is intended for the 423 Component to constitute an “employee stock purchase plan” within the meaning of Section 423(b) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) and the 423 Component shall be interpreted in accordance with that intent (although the Company makes no undertaking or representation to maintain such qualification). In addition, this Plan authorizes the grant of options under the Non-423 Component that does not qualify as an “employee stock purchase plan” under Section 423 of the Code because of deviations necessary to permit participation in the Plan by employees who are foreign nationals or employed outside of the United States while complying with applicable foreign laws. Except as otherwise provided herein, the Non-423 Component will operate and be administered in the same manner as the 423 Component. 

 

1. Administration. The Plan will be administered by the Compensation Committee of the Board of Directors and/or such other person or persons (the “Administrator”) appointed by the Company’s Board of Directors (the “Board”) for such purpose. The Administrator has authority at any time to: (i) adopt, alter and repeal such rules, guidelines and practices for the administration and operation of the Plan and for its own acts and proceedings as it shall deem advisable, including to accommodate the specific requirements of local laws and procedures for jurisdictions outside of the United States. (ii) interpret the terms and provisions of the Plan; (iii) make all determinations it deems advisable for the administration of the Plan; (iv) decide all disputes arising in connection with the Plan; and (v) otherwise supervise the administration of the Plan. All interpretations and decisions of the Administrator shall be binding on all persons, including the Company and the Participants. No member of the Board or individual exercising administrative authority with respect to the Plan shall be liable for any action or determination made in good faith with respect to the Plan or any option granted hereunder. 

2. Offerings. The Company will make one or more offerings to eligible employees to purchase Common Stock under the Plan (“Offerings”) consisting of one or more Purchase Periods. Unless otherwise determined by the Administrator, the initial Offering will begin on the Registration Date and will end on the date that is eighteen months following the Registration Date (“the Initial Offering”). Unless otherwise determined by the Administrator, subsequent Offerings will be eighteen months long and begin every six months on dates determined by the Administrator. The Administrator may, in its discretion, designate a different period for any Offering, provided that no Offering shall exceed 27 months in duration. Unless the Administrator otherwise determines, each Offering will be divided into three equal Purchase Periods. 

3. Eligibility. All individuals classified as employees on the payroll records of the Company and each Designated Company are eligible to participate in any one or more of the Offerings under the Plan, provided that as of the first day of the applicable Offering (the “Offering Date”) they have completed at least 30 days of employment, unless the exclusion of employees who do not meet this requirement is not permissible under applicable law. Notwithstanding any other provision herein, individuals who are not contemporaneously classified as employees of the Company or a Designated Company for purposes of the Company’s or applicable Designated Company’s payroll system are not considered to be eligible employees of the Company or any Designated Company and shall not be eligible to participate in the Plan. In the event any such individuals are reclassified as employees of the Company or a Designated Company for any purpose, including, without limitation, common law or statutory employees, by any action of any third party, including, without limitation, any government agency, or as a result of any private lawsuit, action or administrative proceeding, such individuals shall, notwithstanding such reclassification, remain ineligible for participation. Notwithstanding the foregoing, the exclusive means for individuals who are not contemporaneously classified as employees of the Company or a Designated Company on the Company’s or Designated Company’s payroll system to become eligible to participate in this Plan is through an amendment to this Plan, duly executed by the Company, which specifically renders such individuals eligible to participate herein. 

 

 

4. Participation. 

(a) Participants on Effective Date. Each eligible employee as of the Registration Date shall be deemed to be a Participant at such time. If an eligible employee is deemed to be a Participant pursuant to this Section 4(a), such individual shall be deemed not to have authorized payroll deductions or other contributions and shall not purchase any Common Stock hereunder unless he or she thereafter authorizes payroll deductions or other contributions by submitting an enrollment form (in the manner described in Section 4(c)) within 90 days after the commencement of the Initial Offering. If such a Participant does not authorize payroll deductions or other contributions by submitting an enrollment form by such deadline (or such other deadline as determined by the Administrator), that Participant will be deemed to have withdrawn from the Plan. 

(b) Participants in Subsequent Offerings. An eligible employee who is not a Participant on any Offering Date may participate in such Offering by submitting an enrollment form in a manner determined by the Company at least 15 business days before the Offering Date (or by such other deadline as shall be established by the Administrator for the Offering). 

(c) Enrollment. The enrollment form will (a) state a whole percentage (unless the Administrator determines in advance of an Offering to require that a fixed amount be specified in lieu of a percentage) to be contributed from an eligible employee’s Compensation (as defined in Section 11) per pay period, (b) authorize the purchase of Common Stock in each Offering in accordance with the terms of the Plan and (c) specify the exact name or names in which shares of Common Stock purchased for such individual are to be issued pursuant to Section 10. An employee who does not enroll in accordance with these procedures will be deemed to have waived the right to participate. Unless a Participant files a new enrollment form or withdraws from the Plan, such Participant’s contributions and purchases will continue at the same percentage of Compensation for future Offerings, provided he or she remains eligible.

(d) Notwithstanding the foregoing, participation in the Plan will neither be permitted nor be denied contrary to the requirements of the Code and any applicable law. 

5. Employee Contributions. Each eligible employee may authorize payroll deductions at a minimum of 1 percent up to a maximum of 15 percent of such employee’s Compensation for each pay period; provided, however, that if payroll deductions are not permitted or problematic under applicable law or for administrative reasons, the Company, in its discretion, may allow eligible employees to contribute to the Plan by other means. The Company will maintain book accounts showing the amount of payroll deductions or other contributions made by each Participant for each Purchase Period. No interest will accrue or be paid on payroll deductions or other contributions, unless required under applicable law. 

6. Contribution Changes. Except in the event of a Participant increasing his or her contributions from 0 percent during the Initial Offering as specified in Section 4(a) or as may be determined by the Administrator in advance of an Offering, a Participant may not increase or decrease his or her contributions during any Offering, but may increase or decrease his or her contributions with respect to the next Offering (subject to the limitations of Section 5) by filing a new enrollment form at least 15 business days before the next Offering Date (or by such other deadline as shall be established by the Administrator for the Offering). The Administrator may, in advance of any Offering, establish rules permitting a Participant to increase, decrease or terminate his or her contributions during an Offering. 

7. Withdrawal. A Participant may withdraw from participation in the Plan by delivering a written notice of withdrawal in a manner determined by the Administrator. The Participant’s withdrawal will be effective as of the next business day. Following a Participant’s withdrawal, the Company will promptly refund such individual’s entire account balance under the Plan to him or her (after payment for any Common Stock purchased before the effective date of withdrawal). Partial withdrawals are not permitted. Such an employee may not begin participation again during the remainder of the Offering, but may enroll in a subsequent Offering in accordance with Section 4.

8. Grant of Options. On each Offering Date, the Company will grant to each eligible employee who is then a Participant in the Plan an option (“Option”) to purchase on the last day of a Purchase Period (an “Exercise Date”), at the Option Price hereinafter provided for, the lowest of (a) a number of shares of Common Stock determined by dividing such Participant’s accumulated contributions on such Exercise Date by the lower of (i) 85 percent of the Fair Market Value of the Common Stock on the Offering Date, or (ii) 85 percent of the Fair Market Value of the Common Stock on the Exercise Date, (b) 3,000 shares; or (c) such other lesser maximum number of shares as shall have been established by the Administrator in advance of the Offering; provided, however, that such Option shall be subject to the limitations set forth in the Plan. Each Participant’s Option shall be exercisable only to the extent of such Participant’s accumulated payroll deductions on the Exercise Date. The purchase price for each share purchased under each Option (the “Option Price”) will be 85 percent of the Fair Market Value of the Common Stock on the Offering Date or the Exercise Date, whichever is less. 

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Notwithstanding the foregoing, no Participant may be granted an option hereunder if such Participant, immediately after the option was granted, would be treated as owning stock possessing 5 percent or more of the total combined voting power or value of all classes of stock of the Company or any Parent or Subsidiary (as defined in Section 11). For purposes of the preceding sentence, the attribution rules of Section 424(d) of the Code shall apply in determining the stock ownership of a Participant, and all stock which the Participant has a contractual right to purchase shall be treated as stock owned by the Participant. In addition, no Participant may be granted an Option which permits his or her rights to purchase stock under the Plan, and any other employee stock purchase plan of the Company and its Parents and Subsidiaries, to accrue at a rate which exceeds $25,000 of the fair market value of such stock (determined on the option grant date or dates) for each calendar year in which the Option is outstanding at any time. The purpose of the limitation in the preceding sentence is to comply with Section 423(b)(8) of the Code and shall be applied taking Options into account in the order in which they were granted.

9. Exercise of Option and Purchase of Shares. Each employee who continues to be a Participant in the Plan on an Exercise Date shall be deemed to have exercised his or her Option on such date and shall acquire from the Company such number of whole shares of Common Stock reserved for the purpose of the Plan as his or her accumulated contributions on such date will purchase at the Option Price, subject to any other limitations contained in the Plan; provided that, with respect to the Initial Offering, the exercise of each Option shall be conditioned on the closing of the Company’s Initial Public Offering on or before the first Exercise Date. Any amount remaining in a Participant’s account after the purchase of shares on an Exercise Date of an Offering solely by reason of the inability to purchase a fractional share will be carried forward to the next Purchase Period and, if such Exercise Date is the final Exercise Date of an Offering, will be carried forward to the next Offering; any other balance remaining in a Participant’s account at the end of an Offering will be refunded to the Participant promptly. 

If a Participant has more than one Option outstanding under the Plan, unless he or she otherwise indicates in agreements or notices delivered hereunder: (i) each agreement or notice delivered by that Participant shall be deemed to apply to all of his or her Options under the Plan, and (ii) an Option with a lower Option Price (or an earlier granted Option, if different Options have identical Option Prices) shall be exercised to the fullest possible extent before an Option with a higher Option Price (or a later granted Option if different Options have identical Option Prices) shall be exercised.

10. Issuance of Certificates. Certificates, or book entries for uncertificated shares, representing shares of Common Stock purchased under the Plan may be issued only in the name of the employee or, if permitted by the Administrator, in the name of the employee and another person of legal age as joint tenants with rights of survivorship, or in the name of a broker authorized by the employee to be his, her or their, nominee for such purpose. 

11. Definitions. The term “Affiliate” means any entity that is directly or indirectly controlled by the Company which does not meet the definition of a Subsidiary below, as determined by the Administrator, whether now or hereafter existing. 

The term “Compensation” means the amount of total cash compensation, prior to salary reduction pursuant to Sections 125, 132(f) or 401(k) of the Code, including base pay, overtime, commissions, and incentive or bonus awards, but excluding allowances and reimbursements for expenses such as relocation allowances or travel expenses, income or gains on the exercise of Company stock options, and similar items. The Administrator shall have the discretion to determine the application of this definition to Participants outside the United States. 

The term “Designated Company” means any present or future Affiliate or Subsidiary (as defined below) that has been designated by the Board to participate in the Plan. The Board may so designate any Affiliate or Subsidiary, or revoke any such designation, at any time and from time to time, either before or after the Plan is approved by the stockholders and may further designate such companies as participating in the 423 Component or the Non-423 Component. For purposes of the 423 Component, only Subsidiaries may be Designated Companies.

The term “Fair Market Value of the Common Stock” on any given date means the fair market value of the Common Stock determined in good faith by the Administrator; provided, however, that if the Common Stock is admitted to quotation on the National Association of Securities Dealers Automated Quotation System (“NASDAQ”), NASDAQ Global Market or another national securities exchange, the determination shall be made by reference to the closing price on such date. If there is no closing price for such date, the determination shall be made by reference to the last date preceding such date for which there is a closing price. Notwithstanding the foregoing, if the date for which Fair Market Value of the Common Stock is determined is the first day when trading prices for the Common Stock are reported on NASDAQ or another national securities exchange, the Fair Market Value of the Common Stock shall be the “Price to the Public” (or equivalent) set forth on the cover page for the final prospectus relating to the Company’s Initial Public Offering. 

The term “Initial Public Offering” means the the first offer and sale by the Company of its Common Stock in an underwritten, firm-commitment public offering. 

The term “Parent” means a “parent corporation” with respect to the Company, as defined in Section 424(e) of the Code. 

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The term “Participant” means an individual who is eligible as determined in Section 3 and who has complied with the provisions of Section 4. 

The term “Purchase Period” means a period of time specified within an Offering beginning on the Offering Date or on the next day following an Exercise Date within an Offering and ending on an Exercise Date. An Offering may consist of one or more Purchase Periods. 

The term “Registration Date” means the date the registration statement on Form S-1 that is filed by the Company with respect to the Initial Public Offering is declared effective by the Securities and Exchange Commission. 

The term “Subsidiary” means a “subsidiary corporation” with respect to the Company, as defined in Section 424(f) of the Code. 

12. Rights on Termination of Employment. Unless otherwise required by applicable law, if a Participant’s employment terminates for any reason before the Exercise Date for any Offering, no contributions will be taken from any pay due and owing to the Participant and the balance in the Participant’s account will be paid to such Participant or, in the case of such Participant’s death, if permitted by the Administrator, to his or her designated beneficiary as if such Participant had withdrawn from the Plan under Section 7. An employee will be deemed to have terminated employment, for this purpose, if the corporation that employs him or her, having been a Designated Company, ceases to be an Affiliate or Subsidiary, as applicable, or if the employee is transferred to any corporation other than the Company or a Designated Company. An employee will not be deemed to have terminated employment for this purpose, if the employee is on an approved leave of absence for military service or sickness or for any other purpose approved by the Company, if the employee’s right to reemployment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence was granted or if the Administrator otherwise provides in writing. 

13. Optionees Not Stockholders. Neither the granting of an Option to a Participant nor the deductions from his or her pay or other contributions shall deem such Participant to be a holder of the shares of Common Stock covered by an Option under the Plan until such shares have been purchased by and issued to him or her. 

14. Rights Not Transferable. Rights under the Plan are not transferable by a Participant other than by will or the laws of descent and distribution, and are exercisable during the Participant’s lifetime only by the Participant. 

15. Application of Funds. All funds received or held by the Company under the Plan may be combined with other corporate funds and may be used for any corporate purpose, unless otherwise required under applicable law. 

16. Adjustment in Case of Changes Affecting Common Stock. In the event of a subdivision of outstanding shares of Common Stock, the payment of a dividend in Common Stock or any other change affecting the Common Stock, the number of shares approved for the Plan and the share limitation set forth in Section 8 shall be equitably or proportionately adjusted to give proper effect to such event. 

17. Amendment of the Plan. The Board may at any time and from time to time amend the Plan in any respect, except that without the approval within 12 months of such Board action by the stockholders, no amendment shall be made increasing the number of shares approved for the Plan or making any other change that would require stockholder approval in order for the 423 Component of the Plan, as amended, to qualify as an “employee stock purchase plan” under Section 423(b) of the Code. 

18. Insufficient Shares. If the total number of shares of Common Stock that would otherwise be purchased on any Exercise Date plus the number of shares purchased under previous Offerings under the Plan exceeds the maximum number of shares issuable under the Plan, the shares then available shall be apportioned among Participants in proportion to the amount of payroll deductions accumulated on behalf of each Participant that would otherwise be used to purchase Common Stock on such Exercise Date.

19. Termination of the Plan. The Plan may be terminated at any time by the Board. Upon termination of the Plan, all amounts in the accounts of Participants shall be promptly refunded. The Plan shall automatically terminate on the ten year anniversary of the Registration Date. 

20. Governmental Regulations. The Company’s obligation to sell and deliver Common Stock under the Plan is subject to obtaining all governmental approvals required in connection with the authorization, issuance, or sale of such stock. 

21. Governing Law. This Plan and all Options and actions taken thereunder shall be governed by, and construed in accordance with, the laws of the State of Delaware, applied without regard to conflict of law principles. 

22. Issuance of Shares. Shares may be issued upon exercise of an Option from authorized but unissued Common Stock, from shares held in the treasury of the Company, or from any other proper source. 

23. Tax Withholding. Participation in the Plan is subject to any minimum required tax withholding on income of the Participant in connection with the Plan. Each Participant agrees, by entering the Plan, that the Company and its Affiliates and Subsidiaries shall have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant, including shares issuable under the Plan. 

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24. Notification Upon Sale of Shares. Each Participant who is subject to tax in the United States with respect to his or her participation in the Plan agrees, by entering the Plan, to give the Company prompt notice of any disposition of shares purchased under the Plan where such disposition occurs within two years after the date of grant of the Option pursuant to which such shares were purchased. 

25. Effective Date and Approval of Shareholders. The Plan shall take effect on the Registration Date, subject to approval by the holders of a majority of the votes cast at a meeting of stockholders at which a quorum is present or by written consent of the stockholders. 

5ex10-1.htm

Exhibit 10.1

 

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION

 

FIRST AMENDMENT TO THE LICENSE AGREEMENT BETWEEN THE REGENTS OF THE UNIVERSITY OF CALIFORNIA AND CHROMADEX INC.

 

This first amendment (the “First Amendment”), dated Sept 5th, 2014 (the “Effective Date”), is made by and between The Regents of the University of California (“The Regents”), a California corporation having its statewide administrative offices at 1111 Franklin Street, 12th Floor, Oakland, California 94607-5200, acting through the offices of The University of California, Irvine located at 5171 California Ave, Suite 150 CA 92697-7700 and ChromaDex Inc. (“Licensee”) having a principal place of business at 10005 Muirlands Blvd, Suite G, Irvine, CA 92618 and amends the license agreement with Licensee, dated September 8, 2011 with UC Agreement Control Number 2012-04-0120 (the “License Agreement”).

RECITALS

WHEREAS, the parties desire to add UC Case 2014-036: “Prevention of UV-induced hyperplasia and DNA Damage in skin by Pterostilbene”, and UC Case 2014-037: “Prevention of UV-induced loss of barrier function in skin by Pterostilbene” to the License Agreement;

NOW THEREFORE, in consideration of the foregoing premises and the mutual promises, covenants, and agreements hereinafter set forth, and notwithstanding any previous provisions in the License Agreement, all parties to this First Amendment mutually agree to amend the License Agreement as follows:

	
1.  

	
Amend the BACKGROUND of the License Agreement as follows:

	
  

	
1.1. Replace Paragraph A in its entirety with the following:

“A. Certain inventions, generally characterized as disclosed in:

	 	
·

	
UC Case No. 2011-432 “Method for Inducing UDP-Glucuronosyltransferase Activity Using Pterostilnene” (“Joint Invention”),

	 	
·

	
UC Case No. 2014-036 “Prevention of UV-induced hyperplasia and DNA damage in skin by Pterostilbene” (also a “Regents’ Invention”); and

	 	
·

	
UC Case 2014-037 “Prevention of UV-induced loss of barrier function in skin by Pterostilbene” (also a “Regents’ Invention”)

(collectively "Invention(s)"), were, made in the course of research at the University of California, Irvine by Drs. Frank Meyskens and Ryan Dellinger, and, in the case of the Joint Invention, by Dr. Jeremy Bartos of ChromaDex Inc.  All such Inventions are claimed in Patent Rights as defined below.”

	
2.  

	
Replace the definition of Net Sale in the License Agreement with the following definition to simplify the calculation of Net Sales of Combination Products:

	
  

	
“1.12 “Net Sale” means:

	
  

	
1.12.1

	
the Net Invoice Price, except in the instances described in Paragraphs 1.12.2 and 1.12.3 of this Agreement;

	
  

	
1.12.2  for any Relationship-Influenced Sale of a Licensed Product, Net Sales shall be based only on the Net Invoice Price at which the Relationship-Influenced Sale Purchaser re-Sells such Licensed Product to a Third Party (and the Relationship-Influenced Sale itself shall not be deemed a Sale); and

	
  

	
1.12.3 in those instances where Licensed Product is not Sold, but is otherwise commercially exploited by the Licensee, an Affiliate of the Licensee, or a Sublicensee, the Net Sales for such Licensed Product shall be the Net Invoice Price of such Licensed Product Sold to Third Parties in similar quantities by the Licensee, an Affiliate of the Licensee or a Sublicensee, as applicable.

  

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[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION

 

For a Combination Product, Net Sales of the Combination Product will be multiplied by the proration factor A/(A+B), where “A” is the total of Net Sales of each Licensed Product or Licensed Method contained within or used in the Combination Product when sold separately in the applicable country during the applicable time period, and “B” is the total of Net Sales of each Non-Licensed Product Component contained within or used in the Combination Product when sold separately in the applicable country during the applicable time period.

If A or B cannot be determined because Net Sales for the Licensed Product or the Non-Licensed Product Component sold alone are not available in a particular country, then Net Sales for purposes of determining royalty payments shall be agreed by the parties in good faith based on the relative value contributed by each component.

In no event will the value of A/(A+B) be less than one half (0.5).”

	
3.  

	
Update the definition of Patent Rights in the License Agreement by replacing it in its entirety with the following:

“1.15 “Patent Rights” means The Regents’ rights in the patents and patent applications listed in Exhibit A, including the United States provisional application(s) to be filed, covering the inventions disclosed in UC Cases 2014-036 and 2014-037.  Patent Rights shall further include the foreign patent applications thereof (including PCT applications), and any divisional, continuation, continuation-in-part (put only to the extent the claims thereof are entirely supported in the specification and entitled to the priority date of the parent application), or reexamination application, and each patent that issues or reissues from any of these patent applications.  The definition of Patent Rights excludes any rights in and to New Developments.”[Use the table format when working with two or more applications/patents, adjusting to your specifications.  Otherwise delete table and list “patent rights” as you usually would.]

	
4.  

	
Update Exhibit A (Patent Rights) of the License Agreement by replacing it in its entirety with the following:

	
UC Case Number

	
Application Number

	
Filing Date

	
2011-432

	
61/484977

	
5/11/2011

	
2011-432

	
13/466,827

	
5/8/2012

	
2011-432

	
PCT/US2012/064993

	
11/14/2012

	
2014-036

	
62/046,065

	
9/4/2014

	
2014-037

	
62/046,068

	
9/4/2014

	
5.  

	
Add a definition for the term “Non-Pharmaceutical Licensed Product” with new paragraph 1.26 as follows:

“1.26 “Non-Pharmaceutical Licensed Product” means a Licensed Product that will be purchased by the end user without the requirement of a prescription by the FDA.”

	
6.  

	
Amend Paragraph 2.8 of the License Agreement reflect The Regent’s policies and licensing practices by replacing it in its entirety with the following:

“2.8 If at any time after the Effective Date, until the expiration or abandon of all Patent Rights covering the Joint Invention, The Regents, through the Licensing Officer of the Office of Technology Alliances responsible for the administration of this Agreement, learn that The Regents own or control any potentially patentable inventions that (i) are New Developments, (ii) pertain or relate to the Compounds, (iii) would block the use by the Licensee of Patent Rights covering the Joint Invention, (iv) were developed at the University of California, Irvine in collaboration with or by Frank Meyskens at the University of California, Irvine, and (v) are not covered by any obligations to Third Parties (“Covered Inventions”), then subject to The Regents’ legal ability to do so, and written approval of the inventors, The Regents will promptly notify the Licensee in writing of the existence and nature of such Covered Invention in reasonable detail (an “Option Notice”) and, to the extent permitted by law, the Licensee shall thereafter have an exclusive option to negotiate an exclusive license under The Regents’ rights to such Covered Invention within the Field of Use, which option the Licensee may exercise by providing written notice to The Regents (the “Exercise Notice”) within ninety (90) days after its receipt of the Option Notice.  If the Licensee provides The Regents with an Exercise Notice within such ninety (90) day period, then the Licensee and The Regents shall thereafter exercise commercially reasonable efforts to negotiate and enter into an exclusive license agreement to such Covered Invention within ninety (90) days following The Regents receipt of the Exercise Notice (“Negotiation Period”), such Negotiation Period may be extended with the mutual consent of the parties.  Such license agreement will contain reasonable economic terms reflecting the market value of such Covered Invention.  If Licensee fails to contact The Regents within 90 days after receipt of the Election Notice, or if the parties do not enter into an agreement during the Negotiation Period, the rights to such Covered Invention shall be disposed of in accordance with The Regents’ policies, with no further obligation to the Licensee.”

  

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[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION

 

	
7.  

	
Delete Paragraph 2.9 of the License Agreement to reflect The Regent’s policies and licensing practices.

	
8.  

	
Delete Paragraph 4.7 of the License Agreement regarding Earned Royalties for Sales to the US Government to reflect The Regents’ current understanding of The Regents’ obligations.

	
9.  

	
Amend  Article 6 of the License Agreement to reflect the value of additional Patent Rights added to the License Agreement by replacing this article in its entirety with the following:

“6. LICENSE MANTENANCE FEE AND MILESTONE FEES

6.1  The Licensee will also pay to The Regents a License Maintenance Fee as follows:

	
i.  

	
[*] Dollars ($[*]) on the 2nd anniversary date of the Effective Date

	
ii.  

	
[*] Dollars ($[*]) on the 3rd anniversary of the Effective Date

	
iii.  

	
[*] Dollars ($[*]) on the 4th anniversary of the Effective Date

	
iv.  

	
[*] Dollars ($[*]) on the 5th anniversary of the Effective Date and each anniversary thereafter.

The License Maintenance Fee is not due on any anniversary of the Effective Date if on that date the Licensee is Selling or otherwise exploiting Licensed Products and is paying an Earned Royalty to The Regents on the Net Sales of such Licensed Product.  The License Maintenance Fee is non-refundable and is not an advance or otherwise creditable against any royalties or other payments required to be paid under the terms of this Agreement.

	
6.2  

	
For each Non-Pharmaceutical Licensed Product reaching the milestones indicated below, Licensee must make the following milestone payments to The Regents within Thirty (30) days of reaching such milestone.  Milestone payments are due from Licensee irrespective of whether the milestone listed below was reached by the Licensee itself, a third party acting on Licensee’s behalf, or by a Sublicensee or Affiliate.

	
i.  

	
[*] Dollars ($[*]) due upon completion of safety studies

	
ii.  

	
[*] Dollars ($[*]) due upon completion of efficacy studies

	
iii.  

	
[*] Dollars ($[*]) due upon completion of stability studies

	
iv.  

	
[*] Dollars ($[*]) due upon the first commercial sale

	
10.  

	
Add the following Paragraph 7.2 to the License Agreement to cover Sublicense Fees for the sales of Non-Pharmaceutical Licensed Products:

“7.2 Notwithstanding Paragraph 7.1, the Licensee will pay to The Regents the following non-refundable and non-creditable sublicense fees related to Non-Pharmaceutical Products (also “Sublicense Fees”):

	
10.2.1  

	
[*] percent ([*]%) of Attributed Income from Sublicense Agreements related to Non-Pharmaceutical Licensed Products; and

 

 

	
10.2.2  

	
[*] of consideration due to the Licensee from the Sale of Non-Pharmaceutical Licensed Products by each Sublicensee, provided that such amount is not less than [*]% of Net Sales of Non-Pharmaceutical Licensed Products Sold by such Sublicensee.”

	
11.  

	
Amend Paragraph 8.2 of the License Agreement to include the sublicensee royalty payments resulting from the Net Sales of Non-Pharmaceutical Licensed Products Sold by a Sublicensee in the royalty stacking section by replacing this paragraph in its entirety with the following:

“8.2 In the event it becomes necessary for the Licensee or a Sublicensee to license patent rights owned by a Third Party to make, use or Sell a Licensed Product, then the Licensee or Sublicensee shall have the right to obtain a license from such Third Party and the Licensee shall have the right to credit [*] percent ([*]%) of any payment made to such Third Party under such license against up to [*] percent ([*]%) of the amounts payable to The Regents for such Licensed Product under Paragraphs 7.1.2, 7.2.2, or 8.1 above on a going-forward basis.  Any credit pursuant to this Paragraph shall be available to the Licensee with respect to the full royalty payable for such Licensed Product pursuant to Paragraphs 7.1.2, 7.2.2, and 8.1, but no credit shall be available with respect to any Combination Product (i) if such Third Party license is necessary solely because of a Combination Product Component that is not a Licensed Product or (ii) if Licensee or Sublicensee has already reduced the royalty payment due to The Regents for such Licensed Product by [*] Percent ([*]%) under Paragraph 1.12.  In no event shall the royalty due to The Regents for a given Licensed Product be reduced by more than [*] Percent ([*]%) regardless of credits or reductions available to Licensee or Sublicensee under this Paragraph 8.2 or Paragraph 1.12.

  

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[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION

 

	
12.  

	
Amend Paragraph 8.3 of the License Agreement to reflect the value of additional Patent Rights added to the License Agreement by replacing this paragraph in its entirety with the following:

“8.3 The Licensee will also pay to The Regents a minimum annual royalty of [*] Dollars ($[*]) until the expiration or abandonment of the last Valid Claim within the Patent Rights, beginning with the year of the first Sale of Licensed Product.  The minimum annual royalty will be paid to The Regents by February 28 of each year and will be credited against the Earned Royalty due for the calendar year in which the minimum payment was made.”

	
13.  

	
Add Paragraph 10.7 to the License Agreement to add additional diligence items reflecting the additional Patent Rights added to this Agreement as follows:

	
  

	
“10.7

	
The Licensee, its Affiliates or Sublicensees will, or will cause a Third Party to develop a Non-Pharmaceutical Licensed Product according to the following development schedule:

10.7.1 Complete safety studies by [*];

10.7.2 Complete efficacy studies no later than [*];

10.7.3  Complete stability studies no later than [*]; and

10.7.4  Complete a first commercial sale by [*].

	
  

	
The rights of The Regents detailed in Paragraph 10.4 and the rights of the Licensee in Paragraph 10.5 of this Agreement also apply to the diligence items in this Paragraph 10.7.”

	
14.  

	
Amend Article 19 (PATENT PROSECUTION AND MAINTENANCE) of the License Agreement to reflect how patent prosecution is being managed by the parties by deleting Paragraphs 19.1,19.2,19.5, and 19.7-19.9 in their entirety and replacing them with the following paragraphs 19.1 and 19.2:

“19.1 Patent Rights Covering Joint Invention.

(A) Licensee will diligently prosecute and maintain the United States and foreign patents and patent applications comprising Patent Rights covering the Joint Invention.  Licensee will use counsel of its choice not unacceptable to The Regents.  Licensee or its counsel will provide The Regents with copies of all relevant documentation and correspondence, or drafts thereof, pertaining to the filing, prosecution, or maintenance of all such Patent Rights.  Licensee will make best efforts to provide any draft responses or draft applications to be filed with the patent office by its council sufficiently prior to its filing, to allow for review and comment by The Regents.  If The Regents has not commented upon such documentation in a reasonable time for the Licensee to sufficiently consider The Regents’ comments prior to a deadline with the relevant government patent office, or if Licensee must act to preserve such Patent Rights, Licensee will be free to respond without consideration of The Regents’ comments, if any.

(B) Licensee will not abandon any patent application or issued patent covering the Joint Invention (except for purposes of filing continuation applications) without sixty (60) days prior written notice to The Regents.  In such event, The Regents may assume the responsibility of maintaining such patent or application and such patent applications or patents shall no longer be subject to this Agreement.

  

-4-

  

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION

 

19.2 Patent Rights Covering Regents’ Inventions.

(A) As long as the Licensee has paid Patent Prosecution Costs as provided for in this Article 19 (Patent Prosecution and Maintenance), The Regents will diligently prosecute and maintain the United States and foreign patents comprising the Patent Rights covering Regents’ Inventions.  Such Patent Rights will be held in the name of The Regents using counsel of its choice, and The Regents will be the client of record for such counsel.  The Regents or its counsel will provide Licensee with copies of all relevant documentation and correspondence, or drafts thereof, pertaining to the filing, prosecution, or maintenance of all such Patent Rights.  The Regents will make best efforts to provide any draft responses or draft applications to be filed with the patent office by its council sufficiently prior to its filing, to allow for review and comment by Licensee.  If Licensee has not commented upon such documentation in a reasonable time for The Regents to sufficiently consider Licensee’s comments prior to a deadline with the relevant government patent office, or if The Regents must act to preserve such Patent Rights, The Regents will be free to respond without consideration of Licensee’s comments, if any.  The Regents will use reasonable efforts not to allow any such Patent Rights to lapse without Licensee’s written authorization under this Article 19, except for the filing of continuations, divisionals or the like that substitute for the lapsed applications.  The Regents shall have no obligation to file, prosecute or maintain Patent Rights if Licensee is not current with its Patent Prosecution Cost obligations set forth in this Article 19.

(B)  The Regents shall use reasonable efforts to amend any patent application covering Regents’ Inventions to include claims reasonably requested by the Licensee to protect the products and services contemplated to be Sold, or the Licensed Method to be practices, under this Agreement.

(C) The Licensee may request patent filings covering Regents’ Inventions, including national phase filings, via a written request to The Regents not less than ninety (90) days prior to the deadline for such filing or action to be taken in connection therewith (“Patent Prosecution Request”).  If the deadline is a national phase deadline, such request concerning a Patent Action must identify the countries desired.  The absence of a Patent Prosecution Request from the Licensee to The Regents will (i) be considered an election not to obtain or maintain patent rights associated with the specific phase of patent prosecution in such territory, (ii) give The Regents the right to file patent applications at its own expense in any territory which Licensee has not identified pursuant to this Paragraph 19.1(B), and (iii) result in such patent application(s) and patent(s) being excluded from Patent Rights and therefore not subject to this Agreement, and Licensee will have no further rights or license to them.”

 

	
15.  

	
All other terms and conditions of the License Agreement remain the same.

 

In Consideration for this First Amendment, Licensee agrees to pay to The Regents [*] Dollars ($[*]).  If Licensee fails to make such payment within thirty (30) days of the Effective Date, The Regents shall have the right, but not the obligation, to terminate this Agreement in its entirety by providing written notice to Licensee.  All other terms and conditions of the License Agreement remain the same.

This First Amendment 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 First Amendment by their duly authorized representatives for good and valuable consideration.

 

	CHROMADEX, INC.	 	THE REGENTS OF THE UNIVERSITY OF CALIFORNIA
	 	 	 
	By:  /s/ Troy Rhonemus	 	By:  /s/ Ronnie Hanecak 
	Name:  Troy Rhonemus	 	Name:  Ronnie Hanecak, PhD
	Title:  COO	 	Title:  Assistant Vice Chancellor 
	Date:  September 19, 2014 	 	Date:  September 5, 2014

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