Document:

SEC Connect

 

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]

 

 

 

-5-

 

 

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]

 

 

-6-SEC Connect

 

Exhibit 10.8

 

ChromaDex Corporation

Amended and Restated Non-Employee Director Compensation
Policy

Adopted: November 8, 2016

Amended and Restated: November 16, 2016

Amended and Restated: April 6, 2017

Effective Date: July 3, 2016

 

 

Each
member of the Board of Directors (the “Board”) who is
a member as of November 8, 2016 or thereafter and who is not also
serving as an employee of ChromaDex Corporation
(“ChromaDex”)
or any of its subsidiaries (each such member, an
“Eligible
Director”) will receive the compensation described in
this Amended and Restated Non-Employee Director Compensation Policy
(the “Director Compensation
Policy”) for his or her Board service.

 

The
Director Compensation Policy may be amended at any time in the sole
discretion of the Board or the Compensation Committee of the
Board.

Annual Cash Compensation

 

Effective
July 3, 2016, the annual cash compensation amount set forth below
is payable in equal quarterly installments, payable in arrears in
the week following the last day of each fiscal quarter in which the
service occurred. If an Eligible Director joins the Board or a
committee of the Board (“Committee”) at
a time other than effective as of the first day of a fiscal
quarter, each annual retainer set forth below will be pro-rated
based on days served in the applicable fiscal year, with the
pro-rated amount paid for the first fiscal quarter in which the
Eligible Director provides the service, and regular full quarterly
payments thereafter. All annual cash retainer fees are vested upon
payment.

 

1.
          Annual Board Service
Retainer:

             
a.
Eligible Directors other than the Chairman: $30,000

             
b.
Chairman: $60,000

 

2.
          Annual Committee Chair Service
Retainer:

             
a.
Chairman of the Audit Committee: $20,000

             
b.
Chairman of the Compensation Committee: $15,000

             
c.
Chairman of the Nominating & Corporate Governance Committee:
$10,000

 

3.
          Annual Committee Member Service
Retainer:

             
a.
Non-Chairman Member of the Audit Committee: $10,000

             
b.
Non-Chairman Member of the Compensation Committee:
$7,500

             
c.
Non-Chairman Member of the Nominating & Corporate Governance
Committee: $5,000

 

 

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Equity Compensation

 

The
equity compensation set forth below will be granted under
ChromaDex’s 2017 Equity Incentive Plan (the
“Plan”), and
will be documented on the applicable form of equity award agreement
most recently approved for use by the Board (or a duly authorized
committee thereof) for Eligible Directors. All stock options
granted under the Director Compensation Policy will be nonstatutory
stock options, with an exercise price per share equal to 100% of
the Fair Market Value (as defined in the Plan) of the underlying
Common Stock on the date of grant, and a term of ten years from the
date of grant (subject to earlier termination in connection with a
termination of service as provided in the Plan).

 

1.
     Initial Option Grant: Unless
otherwise determined by the Board, on the date of the Eligible
Director’s initial election or appointment to the Board (or,
if such date is not a market trading day, the first market trading
day thereafter), the Eligible Director automatically will be
granted, without further action by the Board or Compensation
Committee of the Board, a stock option to purchase 40,000 shares of
Common Stock (subject to Section [9(a)] of the Plan relating to
Capitalization Adjustments (as defined in the Plan) after the
adoption date of the Director Compensation Policy) (the
“Initial
Option Grant”). The Initial Option Grant will vest in
a series of three substantially equal annual installments after the
date of grant, such that the Initial Option Grant will be fully
vested on the third anniversary of the date of grant, subject to
the Eligible Director’s Continuous Service (as defined in the
Plan) on each applicable vesting date.

 

2.     
Annual Option
Grant: Unless otherwise determined by the Board, on the date
of each ChromaDex annual stockholder meeting, each Eligible
Director automatically, and without further action by the Board or
Compensation Committee of the Board, will be granted a stock option
to purchase 20,000 shares of Common Stock (subject to Section
[9(a)] of the Plan relating to Capitalization Adjustments after the
adoption date of the Director Compensation Policy) (the
“Annual
Option Grant”). The Annual Option Grant will become
fully vested on the first anniversary of the date of grant, subject
to the Eligible Director’s Continuous Service (as defined in
the Plan) on that vesting date. For fiscal year 2016, the Annual
Option Grant will be granted on November 16, 2016 to each Eligible
Director that has provided Continuous Service (as defined in the
Plan) since July 3, 2016.

 

Expenses

 

The
Company will reimburse Eligible Directors for ordinary, necessary
and reasonable out-of-pocket travel expenses to cover in-person
attendance at and participation in Board and/or Committee meetings;
provided, that Eligible
Directors timely submit to the Company appropriate documentation
substantiating such expenses in accordance with the Company’s
travel and expense policy, as in effect from time to
time.

 

 

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