AMENDED AND RESTATD BYLAWS
OF
CHROMADEX CORPORATION
(hereinafter called the “Corporation”)
ARTICLE I.
OFFICES
Section 1.Registered Office. The registered office of the Corporation in the State of Delaware shall be in the Corporation Trust Center, 1209 Orange Street, in the ‘City of Wilmington, County of New Castle, Delaware, 19801 and the name of the registered agent of the Corporation in the State of Delaware at such address is The Corporation Trust Company.
Section 2.Other Offices. The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine.
ARTICLE II.
MEETINGS OF STOCKHOLDERS
Section 1.Place of Meetings. Meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, either within or without the State of Delaware as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof. The Board of Directors may, in its sole discretion, determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication as provided under the Delaware General Corporation Law of the State of Delaware (“DGCL”).
Section 2.Annual Meetings.
2.1The Annual Meetings of Stockholders shall be held on such date and at such time as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting, at which meetings the stockholders shall elect by a plurality vote a Board of Directors, and transact such other business as may properly be brought before the meeting. The Corporation may postpone, reschedule or cancel any annual meeting of stockholders previously scheduled by the Board of Directors. At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be: (A) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (B) otherwise properly brought before the meeting by or at the direction of the Board of Directors or a duly authorized committee thereof, or (C) otherwise properly brought before the meeting by a stockholder. For business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation.
2.2To be timely, a stockholder’s notice must be delivered to or mailed and received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the sixtieth (60th) day nor earlier than the close of business on the ninetieth (90th) day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that no annual meeting was held in the previous year or the date of the annual meeting has been changed by more than thirty (30) days from the date contemplated at the time of the previous year’s proxy statement, notice by the stockholder to be timely must be so received not earlier than the close of business on the ninetieth (90th) day prior to such annual meeting and not later than the close of business on the later of the sixtieth (60th) day prior to
such annual meeting or, in the event public announcement of the date of such annual meeting is first made by the Corporation fewer than seventy (70) days prior to the date of such annual meeting, the close of business on the tenth (10th) day following the day on which public announcement of the date of such meeting is first made by the Corporation. In no event shall an adjournment or postponement of an annual meeting for which notice has been given, or the public announcement thereof has been made, commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
2.3A stockholder’s notice to the Secretary shall set forth as to each matter the stockholder and the beneficial owner, if any, on whose behalf the notice is give (each a “Proponent” and collectively, the “Proponents”), proposes to bring before the annual meeting: (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and address, of each Proponent, including, if applicable, such name and address as they appear on the Corporation’s books, (iii) the class and number of shares of the Corporation which are beneficially owned (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “1934 Act”) by the stockholder (provided, that for purposes of this Article II, Section 2.3(iii), such Proponent shall in all events be deemed to beneficially own all shares of any class of capital stock of the Corporation as to which such Proponent has a right to acquire beneficial ownership at any time in the future), (iv) any material interest of the Proponent in such business, (v) any other information that is required to be provided by the Proponent pursuant to Regulation 14A of the 1934 Act, in his or her capacity as a proponent to a stockholder proposal. Notwithstanding the foregoing, in order to include information with respect to a stockholder proposal in the proxy statement and form of proxy for a stockholder’s meeting, stockholders must provide notice as required by the regulations promulgated under the 1934 Act. Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted at any annual meeting except in accordance with the procedures set forth in this Article II, Section 2. The chairperson of the annual meeting shall, if the facts warrant, determine and declare at the meeting that business was not properly brought before the meeting and in accordance with the provisions of this Article II, Section 2, and, if he or she should so determine, he or she shall so declare at the meeting that any such business not properly brought before the meeting shall not be transacted. Only persons who are confirmed in accordance with the procedures set forth in this Article II, Section 2 shall be eligible for election as directors.
2.4Nominations of persons for election to the Board of Directors of the Corporation may be made at a meeting of stockholders by or at the direction of the Board of Directors or by any stockholder of the Corporation entitled to vote in the election of directors at the meeting who complies with the notice procedures set forth in this Article II, Section 2.4. Such nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary of the Corporation in accordance with the provisions of Article II, Section 2. Such stockholder’s notice shall set forth (i) as to each person, if any, whom the stockholder proposes to nominate for election or re-election as a director: (A) the name, age, business address and residence address of such person, (B) the principal occupation or employment of such person, (C) the class and number of shares of the Corporation which are beneficially owned (within the meaning of Rule 13d-3 of the 1934 Act) by such person, (D) a description of all arrangements or understandings (whether oral or in writing) between the Proponent and each nominee and any other person or persons (naming such person or persons) pursuant to which the nominations are to be made by the Proponent, and (E) any other information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the 1934 Act (including without limitation such person’s written consent to being named in the proxy statement, if any, as a nominee and to serving as a director if elected); and (ii) as to such stockholder giving notice, the information required to be provided pursuant to Article II, Section 2.3 above. At the request of the Board of Directors, any person nominated by a
stockholder for election as a director shall furnish to the Secretary of the Corporation that information required to be set forth in the stockholder’s notice of nomination which pertains to the nominee. No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Article II, Section 2.4. The chairperson of the meeting shall, if the facts warrant, determine and declare at the meeting that a nomination was not made in accordance with the procedures prescribed by these Bylaws, and if he should so determine, he shall so declare at the meeting, and the defective nomination shall be disregarded.
2.5A stockholder providing the written notice required by Article II, Section 2.3 and 2.4 shall update and supplement such notice in writing, if necessary, so that the information provided or required to be provided in such notice is true and correct in all material respects as of (i) the record date for the determination of stockholders entitled to notice of the meeting and (ii) the date that is five Business Days (as defined below) prior to the meeting and, in the event of any adjournment or postponement thereof, five Business Days prior to such adjourned or postponed meeting. In the case of an update and supplement pursuant to clause (i) of this Article II, Section 2.5, such update and supplement shall be received by the Secretary at the principal executive offices of the Corporation no later than five Business Days after the later of the record date for the determination of stockholders entitled to notice of the meeting or the public announcement of such record date. In the case of an update and supplement pursuant to clause (ii) of this Article II, Section 2.5, such update and supplement shall be received by the Secretary at the principal executive offices of the Corporation not later than two Business Days prior to the date for the meeting, and, in the event of any adjournment or postponement thereof, two Business Days prior to such adjourned or postponed meeting.
2.6Notwithstanding the foregoing provisions of this Article II, Section 2, unless otherwise required by law, if the stockholder (or the qualified representative of the stockholder) does not appear at the annual meeting of stockholders of the Corporation to present a nomination or proposed business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 2, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or any electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.
2.7For purposes of this Article II, Section 2: (i) “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the 1934 Act or by such other means reasonably designed to inform the public or security holders in general of such information, including, without limitation posting on the Corporation’s investor relations website, (ii) “Business Day” means any day other than Saturday, Sunday or a day on which banks are closed in New York City, New York, and (iii) “close of business” means 6:00 p.m. local time at the principal executive offices of the Corporation on any calendar day, whether or not the day is a Business Day.
Section 3.Special Meetings.
3.1Special meetings of the stockholders of the Corporation may be called, for any purpose or purposes, by (i) the Chairperson of the Board of Directors, (ii) the Chief Executive Officer, or (iii) the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time any such resolution is presented to the Board of Directors for adoption), and shall be held at such place, on such date, and at such time, as the Board of Directors shall determine. If a special meeting is called by any person or persons other than the Board of Directors, the request shall be in writing, specifying the general nature of the business proposed to be transacted, and shall be delivered personally or sent by registered mail or by telegraphic or other facsimile transmission to the Chairperson of the Board of Directors, the Chief Executive Officer, or the Secretary of the Corporation. No business may be transacted at such special meeting otherwise than specified in such notice. The Corporation may postpone, reschedule or cancel any special meeting of stockholders previously scheduled by the Board of Directors.
3.2The Board of Directors shall determine the time and place of such special meeting, which shall be held not less than thirty-five (35) nor more than one hundred twenty (120) days after the date of the receipt of the request. Upon determination of the time and place of the meeting, the officer receiving the request shall cause notice to be given to the stockholders entitled to vote, in accordance with the provisions of Article II, Section 4 of these Bylaws. If the notice is not given within sixty (60) days after the receipt of the request, the person or persons requesting the meeting may set the time and place of the meeting and give the notice. Nothing contained in this Article II, Section 3 shall be construed as limiting, fixing, or affecting the time when a meeting of stockholders called by action of the Board of Directors may be held.
Section 4.Notice of Meetings.
4.1Except as otherwise provided by law or the Certificate of Incorporation, written notice of each meeting of stockholders shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting, such notice to specify the place, date and hour and purpose or purposes of the meeting and the means of remote communications, if any, by which stockholders may be deemed to be present in person and vote. Notice of the time, place and purpose of any meeting of stockholders may be waived in writing, signed by the person entitled to notice thereof, or by electronic transmission, either before or after such meeting, and will be waived by any stockholder by his or her attendance thereat in person, by remote communication, if applicable, or by proxy, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Any stockholder so waiving notice of such meeting shall be bound by the proceedings of any such meeting in all respects as if due notice thereof had been given.
4.2If mailed, notice is given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the Corporation. If delivered by courier service, the notice is given on the earlier of when the notice is received or left at the stockholder’s address. If sent via electronic mail, notice is given when directed to such stockholder’s electronic mail address in accordance with applicable law unless (a) the stockholder has notified the Corporation in writing or by electronic transmission of any objection to receiving notice by electronic mail or (b) electronic transmission of such notice is prohibited by applicable law.
Section 5.Quorum. Except as otherwise provided by law or by the Certificate of Incorporation, the holders of a majority of the capital stock issued and outstanding and entitled to vote thereat, present in person, by remote communication, if applicable, or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the Chairperson of the meeting, or stockholders holding the majority of the voting power of the shares entitled to vote thereat, present in person, remote communication, if applicable, or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder entitled to vote at the meeting.
Section 6.Voting. Unless otherwise required by law, the Certificate of Incorporation or these Bylaws, any question brought before any meeting of stockholders (other than the election of directors) shall be decided by the vote of the holders of a majority of the stock represented and entitled to vote thereat. Except as otherwise required by the Certificate of Incorporation, each stockholder represented at a meeting of stockholders shall be entitled to cast one vote for each share of the capital stock entitled to vote thereat held by such stockholder. Such votes may be cast in person or by proxy but no proxy shall be voted on or after three years from its date, unless such proxy provides for a longer period. The Board of Directors, in its discretion, or the officer of the Corporation presiding at a meeting of stockholders, in his or her discretion, may require that any votes cast at such meeting shall be cast by written ballot.
Section 7.Consent of Stockholders in Lieu of Meeting.
7.1Unless otherwise provided in the Certificate of Incorporation, any action required or permitted to be taken at any Annual or Special Meeting of Stockholders of the Corporation, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing or by electronic transmission and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of stockholders were delivered to the Corporation as provided in Section 228(c) of the DGCL.
7.2To the extent permitted by applicable law, electronic transmission of a consent to an action to be taken and transmitted by a stockholder or proxyholder, or by a person or persons authorized to act for a stockholder or proxyholder, shall be deemed to be written and signed for the purpose of this section, provided that any such electronic transmission sets forth or is delivered with information from which the Corporation can determine (i) that the electronic transmission was transmitted by the stockholder or proxyholder or by a person or persons authorized to act for the stockholder or proxyholder and (ii) the date on which such stockholder or proxyholder or authorized person or persons transmitted such electronic transmission. A consent given by electronic transmission is delivered to the Corporation upon the earliest of: (1) when the consent enters an information processing system (e.g., electronic mail, DocuSign, Adobe Sign or other similar system), if any, designated by the Corporation for receiving consents, so long as the electronic transmission is in a form capable of being processed by that system and the Corporation is able to retrieve that electronic transmission (2) when a paper
reproduction of the consent is delivered to the Corporation’s principal place of business or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded; (3) when a paper reproduction of the consent is delivered to the Corporation’s registered office in the State of Delaware by hand or by certified or registered mail, return receipt requested; (4) when delivered in such other manner, if any, provided by resolution of the Board of Directors; or (5) when delivered in such other manner that complies with the DGCL. A consent given by electronic mail, facsimile or other electronic transmission is delivered under the Section 7 even if no person is aware of its receipt. Receipt of an electronic acknowledgement from an information processing system establishes that a consent given by electronic transmission was received but, by itself, does not establish that the consent sent corresponds to the content received. Any copy or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy or other reproduction shall be in a complete reproduction of the entire original in writing.
Section 8.Joint Owners of Stock. If shares or other securities having voting power stand of record in the names of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety, or otherwise, or if two or more persons have the same fiduciary relationship respecting the same shares, unless the Secretary is given written notice to the contrary and is furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, their acts with respect to voting shall have the following effect: (a) if only one votes, his or her act binds all; (b) if more than one votes, the act of the majority so voting binds all; (c) if more than one votes, but the vote is evenly split on any particular matter, each faction may vote the securities in question proportionally, or may apply to the Delaware Court of Chancery for relief as provided in Section 217(b) of the DGCL. If the instrument filed with the Secretary shows that any such tenancy is held in unequal interests, a majority or even-split for the purpose of subsection (c) shall be a majority or even-split in interest.
Section 9.List of Stockholders ‘Entitled to Vote. The officer of the Corporation who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder of the Corporation who is present.
Section 10.Stock Ledger. The stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by Section 9 of this Article II or the books of the Corporation, or to vote in person or by proxy at any meeting of stockholders.
ARTICLE III.
DIRECTORS
Section 1.Number and Election of Directors. The Board of Directors shall consist of not less than one nor more than 13 members, the exact number of which shall initially be fixed by the Incorporator and thereafter from time to time by the Board of Directors provided that no decrease in the number of directors shall shorten the term of a director. Except as provided in Section 3 of this Article, directors shall be elected by a plurality of the votes cast at Annual Meetings of Stockholders, and each director so elected shall hold office until the next Annual Meeting and until his or her successor is duly elected and qualified, or until his or her earlier resignation or removal. Any director may resign at any time upon notice to the Corporation. Directors need not be stockholders. If for any cause, the directors shall not have been elected at an annual meeting, they may be elected as soon thereafter as convenient at a special meeting of the stockholders called for that purpose in the manner provided in these Bylaws.
Section 2.Removal. Any director may be removed at any time with or without cause by an affirmative vote of the holders of a majority of the outstanding shares of the Corporation then entitled to vote. If a director is elected by a voting group of stockholders, only the stockholders of that voting group may participate in the vote to remove such director. A director may not be removed by the stockholders at a meeting unless the notice of the meeting states that the purpose, or one of the purposes, of the meeting is removal of the director. If any directors are so removed, new directors may be elected at the same meeting.
Section 3.Vacancies. Unless otherwise provided in the Certificate of Incorporation, any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other causes and any newly created directorships resulting from any increase in the number of directors, shall unless the Board of Directors determines by resolution that any such vacancies or newly created directorships shall be filled by stockholder vote, be filled only by the affirmative vote of a majority of the directors then in office, even though less than a quorum of the Board of Directors. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the fill term of the director for which the vacancy was created or occurred and until such director’s successor shall have been elected and qualified. A vacancy in the Board of Directors shall be deemed to exist under this Bylaw in the case of the death, removal or resignation of any director.
Section 4.Duties and Powers. The business of the Corporation shall be managed by or under the direction of the Board of Directors which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these Bylaws directed or required to be exercised or done by the stockholders.
Section 5.Meetings.
5.1Annual Meetings. The annual meeting of the Board of Directors shall be held immediately after the annual meeting of stockholders and at the place where such meeting is held. No notice of an annual meeting of the Board of Directors shall be necessary and such meeting shall be held for the purpose of electing officers and transacting such other business as may lawfully come before it.
5.2Regular Meetings. Unless otherwise restricted by the Certificate of Incorporation, regular meetings of the Board of Directors may be held at any place within or without the state of Delaware which has been designated by resolution of the Board of Directors or the written consent of all directors.
5.3Special Meetings. Unless otherwise restricted by the Certificate of Incorporation, special meetings of the Board of Directors may be held at any time and place within or without the State of Delaware whenever called by the Chairperson of the Board, the President or any two of the directors.
5.4Meetings by Electronic Communications Equipment. Any member of the Board of Directors, or of any committee thereof, may participate in a meeting by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.
5.5Notice of Meetings. Notice of the time and place of all special meetings of the Board of Directors shall be orally or in writing, by telephone, facsimile, telegraph, telex or electronic transmission during normal business hours, at least twenty-four (24) hours before the date and time of the meeting, or sent in writing to each director by first class mail, charges prepaid, at least three (3) days before the date of the meeting. Notice of any meeting may be waived in writing, or by electronic transmission, at any time before or after the meeting and will be waived by any director by attendance thereat, except when the director attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.
5.6Waiver of Notice. The transaction of all business at any meeting of the Board of Directors, or any committee thereof, however called or noticed, or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present and if, either before or after the meeting, each of the directors not present shall sign a written waiver of notice or shall waive notice by electronic transmission. All such waivers shall be filed with the corporate records or made a part of the minutes of the meeting.
Section 6.Quorum. Unless the Certificate of Incorporation requires a greater number and except with respect to indemnification questions arising under Article IX hereof, for which a quorum shall be one-third of the exact number of directors fixed from time to time in accordance with the Certificate of Incorporation, a quorum of the Board of Directors shall consist of a majority of the exact number of directors fixed from time to time by the Board of Directors in accordance with the Certificate of Incorporation provided, however, at any meeting whether a quorum be present or otherwise, a majority of the directors present may adjourn from time to time until the time fixed for the next regular meeting of the Board of Directors, without notice other than by announcement at the meeting. At each meeting of the Board of Directors at which a quorum is present, all questions and business shall be determined by the affirmative vote of a majority of the directors present, unless a different vote be required by law, the Certificate of Incorporation or these Bylaws.
Section 7.Actions of Board. Unless otherwise provided by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all the members of the Board of Directors or committee, as the case may be, consent thereto in writing, or electronic transmission and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or committee. Such filings shall be in paper form if the minutes are maintained in paper form and in electronic form if the minutes are maintained in electronic form.
Section 8.Committees.
8.1Executive Committee. The Board of Directors may by resolution passed by a majority of the whole Board of Directors appoint an Executive Committee to consist of one (1) or more members of the Board of Directors. The Executive Committee, to the extent permitted by law and provided in the resolution of the Board of Directors shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation; but no such committee shall have the power or authority in reference to (i) approving or adopting, or recommending to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the DGCL to be submitted to stockholders for approval, or (ii) adopting, amending or repealing any Bylaw of the Corporation.
8.2Other Committees. The Board of Directors may, by resolution passed by a majority of the whole Board of Directors, from time to time appoint such other committees as may be permitted by law. Such other committees appointed by the Board of Directors shall consist of one (1) or more members of the Board of Directors and shall have such powers and perform such duties as may be prescribed by the resolution or resolutions creating such committees, but in no event shall any such committee have the powers denied to the Executive Committee in these Bylaws.
8.3Term. . The Board of Directors, subject to the provisions of Article III Subsections 8.1 and 8.2 of this Bylaw may at any time increase or decrease the number of members of a committee or terminate the existence of a committee. The membership of a committee member shall terminate on the date of his or her death or voluntary resignation from the committee or from the Board of Directors. The Board of Directors may at any time for any reason remove any individual committee member and the Board of Directors may fill any committee vacancy created by death, resignation, removal or increase in the number of members of the committee. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee, and, in addition, in the absence or disqualification of any member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.
8.4Meetings. Unless the Board of Directors shall otherwise provide, regular meetings of the Executive Committee or any other committee appointed pursuant to this Article III, Section 8 shall be held at such times and places as are determined by the Board of Directors, or by any such committee, and when notice thereof has been given to each member of such committee, no further notice of such regular meetings need be given thereafter. Special meetings of any such committee may be held at any place which has been determined from time to time by such committee, and may be called by any director who is a member of such committee, upon written notice or notice by electronic transmission to the members of such committee of the time and place of such special meeting given in the manner provided for the giving of written notice or notice by electronic transmission to members of the Board of Directors of the time and place of special meetings of the Board of Directors. Notice of any special meeting of any committee may be waived in writing or by electronic transmission at any time before or after the meeting and will be waived by any director by attendance thereat, except when the director attends such special meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. A majority of the authorized number of members of any such committee shall constitute a quorum for the transaction of business, and the act of a majority of those present at any meeting at which a quorum is present shall be the act of such committee.
Section 9.Compensation. The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.
Section 10.Interested Directors. No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association, or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because his, her or their votes are counted for such purpose if (i) the material facts as to his, her or their relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (ii) the material facts as to his, her or their relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (iii) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.
ARTICLE IV.
OFFICERS
Section 1.General. The officers of the Corporation shall include, if and when designated by the Board of Directors, the Chairperson of the Board of Directors, the Chief Executive Officer, the President, one or more Vice Presidents, the Secretary, the Chief Financial Officer, the Treasurer, and the Controller, all of whom shall be elected at the annual organizational meeting of the Board of Directors. The Board of Directors may also appoint one or more Assistant Secretaries, Assistant Treasurers, Assistant Controllers and such other officers and agents with such powers and duties as it shall deem necessary. The Board of Directors may assign such additional titles to one or more of the officers as it shall deem appropriate. Any one person may hold any number of offices of the Corporation at any one time unless specifically prohibited therefrom by law. The salaries and other compensation of the officers of the Corporation shall be fixed by or in the manner designated by the Board of Directors or by a Committee thereof to which the Board of Directors has delegated such responsibility.
Section 2.Election. The Board of Directors at its first meeting held after each Annual Meeting of Stockholders shall elect the officers of the Corporation who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors; and all officers of the Corporation shall hold office until their successors are chosen and qualified, or until their earlier resignation or removal. Any officer elected by the Board of Directors may be removed at any time by the affirmative vote of a majority of the Board of Directors. Any vacancy occurring in any office of the Corporation shall be filled by the Board of Directors. The salaries of all officers of the Corporation shall be fixed by the Board of Directors or by a Committee thereof to which the Board of Directors has delegated such responsibility.
Section 3.Resignation and Removal. Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by the Board of Directors, at any regular or special meeting thereof, or, except in case of an officer chosen by the Board of Directors, by any officer upon whom such power of removal may be conferred by the Board of Directors.
Any officer may resign at any time by giving written notice to the Corporation. Any such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Any such resignation is without prejudice to the rights, if any, of the Corporation under any contract to which the officer is a party.
Section 4.Voting Securities Owned by the Corporation. Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the President or any Vice President and any such officer may, in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons.
Section 5.Chairperson of the Board of Directors. The Chairperson of the Board of Directors, when present, shall preside at all meetings of the stockholders and the Board of Directors. The Chairperson of the Board of Directors shall perform other duties commonly incident to his or her office and shall also perform such other duties and have such other powers as the Board of Directors shall designate from time to time. If there is no President, then the Chairperson of the Board of Directors shall also serve as the Chief Executive Officer of the Corporation and shall have the powers and duties prescribed in Section 7 of this Article IV.
Section 6.President. The President shall preside at all meetings of the stockholders and at all meetings of the Board of Directors, unless the Chairperson of the Board of Directors has been appointed and is present. Unless some other officer has been elected Chief Executive Officer of the Corporation, the President shall be the Chief Executive Officer of the Corporation and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and officers of the Corporation. The President shall perform other duties commonly incident to his or her office and shall also perform such other duties and have such other powers as the Board of Directors shall designate from time to time.
Section 7.Chief Executive Officer. The Chief Executive Officer of the Corporation shall have overall executive responsibility and authority for management of the business, affairs, and operations of the Corporation (subject to the authority of the Board of Directors), and, in general, shall perform all duties incident to the office of a chief executive officer of a Corporation, including those duties customarily performed by persons holding such office, and shall perform such other duties as, from time to time, may be assigned to him or her by the Board of Directors.
Section 8.Chief Financial Officer. The Chief Financial Officer shall keep or cause to be kept the books of account of the Corporation in a thorough and proper manner and shall render statements of the financial affairs of the Corporation in such form and as often as required by the Board of Directors or the President. The Chief Financial Officer, subject to the order of the Board of Directors, shall have the custody of all funds and securities of the Corporation. The Chief Financial Officer shall perform other duties commonly incident to his or
her office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time. The President may direct the Treasurer or any Assistant Treasurer, or the Controller or any Assistant Controller to assume and perform the duties of the Chief Financial Officer in the absence or disability of the Chief Financial Officer, and each Treasurer and Assistant Treasurer and each Controller and Assistant Controller shall perform other duties commonly incident to his or her office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time.
Section 9.Vice Presidents. The Vice Presidents shall perform such duties commonly incident to their office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time.
Section 10.Secretary. The Secretary shall attend all meetings of the stockholders and of the Board of Directors and shall record all acts and proceedings thereof in the minute book of the Corporation. The Secretary shall give notice in conformity with these Bylaws of all meetings of the stockholders and of all meetings of the Board of Directors and any committee thereof requiring notice. The Secretary shall perform all other duties given him in these Bylaws and other duties commonly incident to his or her office and shall also perform such other duties and have such other powers as the Board of Directors shall designate from time to time. The President may direct any Assistant Secretary to assume and perform the duties of the Secretary in the absence or disability of the Secretary, and each Assistant Secretary shall perform other duties commonly incident to his or her office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time.
Section 11.Treasurer. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his or her transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his or her office and for the restoration to the Corporation, in case of his or her death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his or her possession or under his or her control belonging to the Corporation.
Section 12.Assistant Secretaries. Except as may be otherwise provided in these Bylaws, Assistant Secretaries, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the President, any Vice President, if there be one, or the Secretary, and in the absence of the Secretary or in the event of his or her disability or refusal to act, shall perform the duties of the Secretary, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Secretary.
Section 13.Assistant Treasurers. Assistant Treasurers, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the President, any Vice President, if there be one, or the Treasurer, and in the absence of the Treasurer or in the event of his or her disability or refusal to act, shall perform the duties of the Treasurer, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Treasurer. If required by the Board of Directors, an Assistant Treasurer shall
give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his or her office and for the restoration to the Corporation, in case of his or her death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his or her possession or under his or her control belonging to the Corporation.
Section 14.Other Officers. Such other officers as the Board of Directors may choose shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors. The Board of Directors may delegate to any other officer of the Corporation the power to choose such other officers and to prescribe their respective duties and powers.
ARTICLE V.
EXECUTION OF CORPORATE INSTRUMENTS AND VOTING
OF SECURITIES OWNED BY THE CORPORATION
Section 1.Execution of Corporate Instrument. The Board of Directors may, in its discretion, determine the method and designate the signatory officer or officers, or other person or persons, to execute on behalf of the Corporation any corporate instrument or document, or to sign on behalf of the Corporation the corporate name without limitation, or to enter into contracts on behalf of the Corporation, except where otherwise provided by law or these Bylaws, and such execution or signature shall be binding upon the Corporation.
Unless otherwise specifically determined by the Board of Directors or otherwise required by law, promissory notes, deeds of trust, mortgages and other evidences of indebtedness of the Corporation, and other corporate instruments or documents requiring the corporate seal, and certificates of shares of stock owned by the Corporation, shall be executed, signed or endorsed by the Chairperson of the Board of Directors, or the President or any Vice President, and by the Secretary or Treasurer or any Assistant Secretary or Assistant Treasurer. All other instruments and documents requiring the corporate signature, but not requiring the corporate seal, may be executed as aforesaid or in such other manner as may be directed by the Board of Directors.
All checks and drafts drawn on banks or other depositaries on funds to the credit of the Corporation or in special accounts of the Corporation shall be signed by such person or persons as the Board of Directors shall authorize so to do.
Unless otherwise specifically determined by the Board of Directors or otherwise required by applicable law, the execution, signing or endorsement of any corporate instrument or document by or on behalf of the Corporation may be effected manually, by facsimile or (to the extent permitted by applicable law and subject to such policies and procedures as the corporation may have in effect from time to time) by electronic signature.
Unless authorized or ratified by the Board of Directors or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.
Section 2.Voting of Securities Owned by the Corporation. All stock and other securities of other Corporations owned or held by the Corporation for itself, or for other parties in any capacity, shall be voted, and all proxies with respect thereto shall be executed, by the person authorized so to do by resolution of the Board of Directors, or, in the absence of such authorization, by the Chairperson of the Board of Directors, the Chief Executive Officer or the President.
Section 3.Execution of Other Securities. All bonds, debentures and other corporate securities of the Corporation, other than stock certificates, may be signed by the Chairperson of the Board of Directors, the President, the Chief Executive Officer, the Chief Financial Officer, or such other person as may be authorized by the Board of Directors; provided, however, that where any such bond, debenture or other corporate security shall be authenticated by the manual signature, or where permissible facsimile signature, of a trustee under an indenture pursuant to which such bond, debenture or other corporate security shall be issued, the signatures of the persons signing and attesting the corporate seal on such bond, debenture or other corporate security may be the imprinted facsimile of the signatures of such persons. Interest coupons appertaining to any such bond, debenture or other corporate security, authenticated by a trustee as aforesaid, shall be signed by the Treasurer or an Assistant Treasurer of the Corporation or such other person as may be authorized by the Board of Directors, or bear imprinted thereon the facsimile signature of such person. In case any officer who shall have signed or attested any bond, debenture or other corporate security, or whose facsimile signature shall appear thereon or on any such interest coupon, shall have ceased to be such officer before the bond, debenture or other corporate security so signed or attested shall have been delivered, such bond, debenture or other corporate security nevertheless may be adopted by the corporation and issued and delivered as though the person who signed the same or whose facsimile signature shall have been used thereon had not ceased to be such officer of the Corporation.
ARTICLE VI.
STOCK
Section 1.Form of Certificates. The shares of the Corporation shall be represented by certificates, or shall be uncertificated if so provided by resolution or resolutions of the Board of Directors. Certificates for the shares of stock, if any, shall be in such form as is consistent with the Certificate of Incorporation and applicable law. Every holder of stock in the Corporation shall be entitled to have a certificate signed, in the name of the Corporation (i) by the Chairperson of the Board of Directors, the President or a Vice President and (ii) by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by him or her in the Corporation.
Section 2.Signatures. Where a certificate is countersigned by (i) a transfer agent other than the Corporation or its employee, or (ii) a registrar other than the Corporation or its employee, any other signature on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.
Section 3.Lost Certificates. The Board of Directors may direct a new certificate to be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or his or her legal representative, to advertise the same in such manner as the Board of Directors shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed.
Section 4.Transfers. Stock of the Corporation shall be transferable in the manner prescribed by law and in these Bylaws. Transfers of stock shall be made on the books of the Corporation only by the person named in the certificate or by his or her attorney lawfully constituted in writing and upon the surrender of the certificate therefor, which shall be canceled before a new certificate shall be issued. The Corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the Corporation to restrict the transfer of shares of stock of the Corporation of any one or more classes owned by such stockholders in any manner not prohibited by the DGCL.
Section 5.Record Date.
5.1In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty days nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. If the Board of Directors so fixes a record date for determining the stockholders entitled to notice of any meeting of stockholders, such date shall also be the record date for determining the stockholders entitled to vote at such meeting, unless the Board of Directors determines, at the time it fixes the record date for determining the stockholders entitled to notice of such meeting, that a later date on or before the date of the meeting shall be the record date for determining the stockholders entitled to vote at such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day immediately preceding the day on which notice is given, or if notice is waived, at the close of business on the day immediately preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.
5.2In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
Section 6.Beneficial Owners. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of stock to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such stock or stocks on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by law.
Section 7.Notwithstanding any other provision in these Bylaws, the Corporation may adopt a system of issuance, recordation and transfer of its shares by electronic or other means not involving any issuance of certificates, including provisions for notice to purchasers in substitution for any required statements on certificates, and as may be required by applicable corporate securities laws, which system has been approved by the United States
Securities and Exchange Commission. Any system so adopted shall not become effective as to issued and outstanding certificated securities until the certificates therefore have been surrendered to the Corporation.
ARTICLE VII.
NOTICES
Section 1.Notices.
1.1Whenever, under any provisions of these Bylaws, notice is required to be given to any stockholder, it shall be given in writing, timely and duly deposited in the United States mail, postage prepaid, and addressed to his or her last known post office address as shown by the stock record of the Corporation or its transfer agent. Any notice required to be given to any director may be given by such method, or by facsimile, telex, telegram, or other electronic transmission, except that such notice other than one which is delivered personally shall be sent to such address as such director shall have filed in writing with the Secretary, or, in the absence of such filing, to the last known post office address of such director.
1.2An affidavit of mailing, executed by a duly authorized and competent employee of the Corporation or its transfer agent appointed with respect to the class of stock affected, specifying the name and address or the names and addresses of the stockholder or stockholders, or director or directors, to whom any such notice or notices was or were given, and the time and method of giving the same, shall in the absence of fraud, be prima facie evidence of the facts therein contained. All notices given by mail, as above provided, shall be deemed to have been given as at the time of mailing, and all notices given by facsimile, telex, telegram, or other electronic transmission shall be deemed to have been given as of the sending time recorded at time of transmission. In addition, without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders may be given by electronic transmission in the manner provided in Section 232 of the DGCL.
1.3It shall not be necessary that the same method of giving notice be employed in respect of all directors, but one permissible method may be employed in respect of any one or more, and any other permissible method or methods may be employed in respect of any other or others. The period or limitation of time within which any stockholder may exercise any option or right, or enjoy any privilege or benefit, or be required to act, or within which any director may exercise any power or right, or enjoy any privilege, pursuant to any notice sent him in the manner above provided, shall not be affected or extended in any manner by the failure of such stockholder or such director to receive such notice.
1.4Whenever notice is required to be given, under any provision of law or of the Certificate of Incorporation or Bylaws of the Corporation, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting which shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that the action taken by the Corporation is such as to require the filing of a certificate under any provision of the DGCL, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.
1.5Whenever notice is required to be given, under any provision of law or the Certificate of Incorporation or Bylaws of the Corporation, to any stockholder to whom (i) notice of two consecutive annual meetings, and all notices of meetings or of the taking of action by written consent without a meeting to such person during the period between such two
consecutive annual meetings, or (ii) all, and at least two, payments (if sent by first class mail) of dividends or interest on securities during a twelve-month period, have been, mailed addressed to such person at his or her address as shown on the records of the Corporation and have been returned undeliverable, the giving of such notice to such person shall not be required. Any action or meeting which shall be taken or held without notice to such person shall have the same force and effect as if such notice had been duly given. If any such person shall deliver to the Corporation a written notice setting forth his or her then current address, the requirement that notice be given to such person shall be reinstated. In the event that the action taken by the Corporation is such as to require the filing of a certificate under any provision of the DGCL, the certificate need not state that notice was not given to persons to whom notice was not required to be given pursuant to this paragraph.
1.6Except as otherwise prohibited under the DGCL, any notice given under the provisions of the DGCL, the Certificate of Incorporation or these Bylaws shall be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. Such consent shall have been deemed to have been given if such stockholder fails to object in writing to the Corporation within 60 days of having been given notice by the Corporation of its intention to send the single notice. Any consent shall be revocable by the stockholder by written notice to the Corporation.
Section 2.Waivers of Notice. Whenever any notice is required by law, the Certificate of Incorporation or these Bylaws, to be given to any director, member of a committee or stockholder, a waiver thereof in writing, signed, by the person or persons entitled to said notice, or waiver by electronic transmission by such person whether before or after the time stated therein, shall be deemed equivalent thereto.
ARTICLE VIII.
GENERAL PROVISIONS
Section 1.Dividends. Dividends upon the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting, and may be paid in cash, in property, or in shares of the capital stock. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, deems proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for any proper purpose, and the Board of Directors may modify or abolish any such reserve.
Section 2.Disbursements. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.
Section 3.Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.
Section 4.Corporate Seal. The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the word “Delaware”. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
ARTICLE IX.
INDEMNIFICATION
Section 1.Directors and Officers. The Corporation shall indemnify its directors and officers to the fullest extent not prohibited by the DGCL; provided, however, that the Corporation may modify the extent of such indemnification by individual contracts with its directors and officers; and, provided, further, that the Corporation shall not be required to indemnify any director or officer in connection with any proceeding (or part thereof) initiated by such person unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board of Directors of the Corporation, (iii) such indemnification is provided by the Corporation, in its sole discretion, pursuant to the powers vested in the Corporation under the DGCL or (iv) such indemnification is required to be made under Section 4 of this Article.
Section 2.Employees and Other Agents. The Corporation shall have power to indemnify its employees and other agents’ as set forth in the DGCL.
Section 3.Expense. The Corporation shall advance to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director or officer, of the Corporation, or is or was serving at the request of the Corporation as a director or executive officer of another corporation, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request therefor, all expenses incurred by any director or officer in connection with such proceeding upon receipt of an undertaking by or on behalf of such person to repay said amounts if it should be determined ultimately that such person is not entitled to be indemnified under this Bylaw or otherwise.
Notwithstanding the foregoing, unless otherwise determined pursuant to Section 5 of this Article, no advance shall be made by the Corporation to an officer of the Corporation (except by reason of the fact that such officer is or was a director of the Corporation in which event this paragraph shall not apply) in any action, suit or proceeding, whether civil, criminal, administrative or investigative, if a determination is reasonably and promptly made (i) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to the proceeding, or (ii) if such quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, that the facts known to the decision-making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the Corporation.
Section 4.Enforcement. Without the necessity of entering into an express contract, all rights to indemnification and advances to directors and officers under this Bylaw shall be deemed to be contractual rights and be effective to the same extent and as if provided for in a contract between the Corporation and the director or officer. Any right to indemnification or advances granted by this Bylaw to a director or officer shall be enforceable by or on behalf of the person holding such right in any court of competent jurisdiction if (i) the claim for indemnification or advances is denied, in whole or in part, or (ii) no disposition of such claim is made within ninety (90) days of request therefore. The claimant in such enforcement action, if successful in whole or in part, shall be entitled to be paid also the expense of prosecuting his claim. In connection with any claim for indemnification, the Corporation shall be entitled to raise as a defense to any such action that the claimant has not met the standard of conduct that make it permissible under the DGCL for the Corporation to indemnify the claimant for the amount claimed. In connection with any claim by an officer of the Corporation (except in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that
such officer is or was a director of the Corporation) for advances, the Corporation shall be entitled to raise a defense as to any such action clear and convincing evidence that such person acted, in bad faith or in a manner that such person did not believe to be in or not opposed in the best interests of the Corporation, or with respect to any criminal action or proceeding that such person acted without reasonable cause to believe that his conduct was lawful. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that claimant has not met the applicable standard of conduct. In any suit brought by a director or officer to enforce a right to indemnification or to an advancement of expenses hereunder, the burden of proving that the director or officer is not entitled to be indemnified, or to such advancement of expenses, under this Article IX or otherwise shall be on the Corporation.
Section 5.Non-Exclusivity of Rights. The rights conferred on any person by this Bylaw shall not be exclusive of any other right which such person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding office. The Corporation is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not prohibited by the DGCL.
Section 6.Survival of Rights. The rights conferred on any person by this Bylaw shall continue as to a person who has ceased to be a director, officer, employee or other agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
Section 7.Insurance. To the fullest extent permitted by the DGCL, the Corporation, upon approval by the Board of Directors, may purchase insurance on behalf of any person required or permitted to be indemnified pursuant to this Bylaw.
Section 8.Amendments. Any repeal or modification of this Bylaw shall only be prospective and shall not affect the rights under this Bylaw in effect at the time of the alleged occurrence of any action or omission to act that is the cause of any proceeding against any agent of the Corporation.
Section 9.Saving Clause. If this Bylaw or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director and officer to the fullest extent not prohibited by any applicable portion of this Bylaw that shall not have been invalidated, or by any other applicable law.
Section 10.Certain Definitions. For the purposes of this Bylaw, the following definitions shall apply:
10.1The term “proceeding” shall be broadly construed and shall include, without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative.
10.2The term “expenses” shall be broadly construed and shall include, without limitation, court costs, attorneys’ fees, witness fees, fines, amounts paid in settlement or
judgment and any other costs and expenses of any nature or kind incurred in connection with any proceeding.
10.3The term the “corporation” shall have the meaning set forth in Section 145(h) of the DGCL.
10.4References to a “director,” “executive officer,” “officer,” “employee,” or “agent” of the Corporation shall include, without limitation, situations where such person is serving at the request of the Corporation as, respectively, a director, executive officer, officer, employee, trustee or agent of another corporation, partnership, joint venture, trust or other enterprise.
10.5References to “other enterprises” shall have the meaning set forth in Section 145(i) of the DGCL.
ARTICLE X.
AMENDMENTS
Section 1.Amendment. These Bylaws may be altered, amended or repealed, in whole or in part, or new Bylaws may be adopted by the stockholders or by the Board of Directors, provided, however, that notice of such alteration, amendment, repeal or adoption of new Bylaws be contained in the notice of such meeting of stockholders or Board of Directors as the case may be. All such amendments must be approved by either the holders of a majority of the outstanding capital stock entitled to vote thereon or by a majority of the entire Board of Directors then in office.
Section 2.Entire Board of Directors. As used in this Article X and in these Bylaws generally, the term “entire Board of Directors” means the total number of directors which the Corporation would have if there were no vacancies.
ARTICLE XI.
FORUM FOR ADJUDICATION OF DISPUTES
Section 1.Forum for Adjudication of Disputes. Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Corporation, (b) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (c) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, the certificate of incorporation or the bylaws of the Corporation, or (d) any action asserting a claim governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the corporation shall be deemed to have notice of and consented to the provisions of this Article XI, Section 1.
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.
SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT (the "Agreement") is made and entered into as of the 19th of December, 2018 (the “Effective Date”) by and between NESTEC Ltd., a Swiss private limited company, with principal offices located at Avenue Nestle 55, 1800 Vevey, Switzerland ("Buyer" or “NHSc”) and ChromaDex Inc., a California corporation with principal offices located at 10005 Muirlands, Blvd, Suite G, Irvine, CA 92618, USA (“Seller” or “ChromaDex”). Buyer and Seller are individually referred to herein as a “Party” and collectively as the “Parties.”
R E C I T A L S
WHEREAS, Seller is the owner or exclusive licensee of certain intellectual property rights related to the composition and use of the compound Nicotinamide Riboside (“NR”) and NR Product (defined below) that is currently sold under the ChromaDex Trademarks (defined below); and
WHEREAS, NR is supplied by Seller to third parties for the commercialization of NR Product under the ChromaDex Trademarks (or other tradenames) as dietary supplements on a global basis; and
WHEREAS, NR and NR Product is marketed, commercialized and sold by Seller to consumers in its pure form and in combination with other active ingredients on a global basis under the ChromaDex Trademarks (or other tradenames) subject to the terms and conditions of this Agreement; and
WHEREAS, Buyer now desires to purchase the NR Product to develop, market, promote, sell, and distribute the Approved Products (defined below) subject to the terms and conditions hereinafter described.
NOW, THEREFORE, in consideration of the mutual promises and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows.
1.Definitions.
The following terms have the meanings specified below:
“Active Nutrition” means product offerings that are formulated and marketed to consumers of all ages for the purpose of living a healthy lifestyle with integrated physical activity. Active Nutrition does not include Sports Nutrition.
“Affiliate” shall mean, with respect to a Party, any person or entity that controls, is controlled by, or is under common control with such Party. An entity or person shall be deemed to be in control of another entity (“Controlled Entity”) if the former owns directly or indirectly at least fifty percent (50%) of the outstanding voting equity of the Controlled Entity (or some other majority equity or ownership interest exits, in the event that such Controlled Entity is other than a corporation).
“Allowable Deductions” shall mean,
(a) sales returns and allowances actually paid, granted or accrued, including trade, quantity and cash discounts and any other adjustments, including those granted on account of price adjustments or billing errors, rejected goods, damaged or defective goods, recalls, returns;
(b) rebates, chargeback rebates, compulsory rebates, reimbursements or similar payments granted or given to wholesalers or other distributors, buying groups, health care insurance carriers or other institutions and compulsory payments to governmental authorities and any other governmental charges imposed upon the sale of such Approved Product to third parties;
(c) adjustments arising from consumer discount programs or other similar programs;
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(d) customs or excise duties, sales tax, consumption tax, value added tax, and other taxes (except income taxes); and
(e) charges for packing, freight, shipping and insurance (to the extent that Buyer or its Affiliates bear such cost).
Allowable Deductions shall be calculated by Buyer consistent with its ordinary practice and in accordance with International Financial Reporting Standards, and Buyer shall not calculate Allowable Deductions in any manner that has the primary purpose of avoiding or reducing the Sales Fees payable hereunder.
“Approved Products” shall mean any Medical Nutrition (as defined herein) or Functional Food and Beverages (as defined herein) product which contains a minimum of [***]mg of the NR Product per serving unless Buyer and Seller agree otherwise in advance in writing. Buyer does not require any consent from Seller to launch new products in Medical Nutrition or Functional Food and Beverages provided that they comply with the requirements set forth in this Agreement. For the sake of clarity, the Approved Products will include NR Product in combination with proteins or other active ingredients as Functional Food and Beverages or as Medical Nutrition products of NHSc.
“Approved Product Category(ies)” shall mean Medical Nutrition and/or Functional Food and Beverages.
“Buyer” shall include NESTEC Ltd. and its U.S. Affiliate, Nestlé HealthCare Nutrition, Inc. and their respective successors and assigns; provided, however, that the Parties acknowledge and agree that Buyer or any of its Affiliates may purchase the NR Product and market, sell and distribute the Approved Products pursuant to the terms and conditions of this Agreement.
“Buyer’s Technical Feasibility” shall mean when Buyer, in its reasonable judgment, determines that the NR Product would be stable in a ready to drink format.
“Change of Control” shall mean any person or entities having acquired, in any single transaction or series of related transactions, whether by way of merger, consolidation, purchase, or in any other manner, (i) securities of Seller or its Controlling Affiliate(s) representing [***] percent ([***]%) or more of either the combined voting power or ownership interest thereof, (ii) [***] percent ([***]%) or more of the profit/loss participation in Seller or its Controlling Affiliate(s), or (iii) Control in Seller or its Controlling Affiliate(s).
“ChromaDex Brand Usage Guidelines” are attached hereto as Exhibit A – ChromaDex Brand Usage Guidelines (Exhibit A is hereby incorporated herein in full by this reference) and, subject to the terms and conditions in Section 11, sets forth the rules and guidelines pertaining to the proper use of the ChromaDex Trademarks which rules and guidelines may be amended by ChromaDex, at any time, in ChromaDex’s sole discretion. If the ChromaDex Brand Usage Guidelines are supplemented or amended, a supplemented or amended version shall be promptly provided to Buyer, and Buyer has the obligation to ensure that Buyer is in compliance with ChromaDex’s current ChromaDex Brand Usage Guidelines after a reasonable transition period.
“ChromaDex Trademarks” shall mean the trademarks and logos owned by ChromaDex incorporating the name, mark, and/or brand of the NR Product as shown in the ChromaDex Brand Usage Guidelines.
“Control” shall mean (including the term “Controlling”) possession, directly or indirectly, through one (1) or more intermediaries, of the power to direct or cause the direction of management and policies of Seller, whether through ownership of voting securities or otherwise.
“Dollerup” shall mean the following study: Dollerup, O.L., et al., A randomized placebo-controlled clinical trial of nicotinamide riboside in obese men: safety, insulin-sensitivity, and lipid-mobilizing effects. Am J Clin Nutr, 2018.
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“Field” shall mean human use.
“Functional Food and Beverages” shall mean a Protein Based (defined below) functional food or beverage (meaning consumer healthcare sold under “Nutrition Facts” labeling regulations in the US or similar labeling or definitional regulations globally; i.e. not sold under dietary supplement regulations) product containing NR Product in ready to drink and loose powder format currently sold under the NHSc Brands (defined below), which may include Active Nutrition products. Functional Food and Beverages do not include Sports Nutrition. “NHSc Brands” shall mean the existing brands of Buyer or its affiliates set forth in Exhibit B – NHSc Brands (Exhibit B is hereby incorporated herein in full by this reference) as well as (i) any other existing brands acquired by Buyer during the Term within the Approved Product Categories and (ii) any new brands created by Buyer within the Approved Product Categories, subject to the approval of Seller, such approval not to be unreasonably withheld or delayed.
“Functional Food and Beverages Extensions” shall mean a Protein Based product containing NR Product sold under the NHSc Brands that is in a format other than ready to drink or loose powder.
“Good Manufacturing Practices” shall mean current and any future good manufacturing practices and quality system regulations set forth by the United States Food and Drug Administration (“USFDA”), and if the Approved Product is manufactured or sold outside of the Unites States, the current and any future good manufacturing practices and quality system regulations set forth by the USFDA or higher standards if and as applicable in the country in which the Approved Product is manufactured or sold.
“Gross Sales Price” shall mean all invoiced sales of Approved Products without offset, deduction, or allowances.
“Licensed Materials” shall mean any advertising, marketing, promotional, and/or merchandising materials and artwork prepared by ChromaDex and provided to Buyer. There is no obligation for ChromaDex to create or provide Licensed Materials. Licensed Materials may or may not display ChromaDex Trademarks and may or may not be provided to Buyer by ChromaDex, in ChromaDex’s sole discretion.
“Launch” shall mean first bona fide commercial sale of an Approved Product in a country in the respective Sub-Territory.
“Martens” shall mean the following study: Martens, C.R., Denman, B.A., Mazzo, M.r., Armstrong, M.L., Reisdorph, N., McQueen, M.B., Chonchol, M.B., Seals, D.R., Chronic nicotinamide riboside supplementation is well-tolerated and effectively elevates NAD+ in healthy middle-aged and older adults. 2018, University of Colorado Boulder.
“Medical Nutrition” shall mean (a) a specialized nutrition product that serves as a nutritional solution for the dietary management of a specific health condition to be used under medical supervision; (b) a “medical food,” as defined in Section 5(b) of the Orphan Drug Act (21 U.S.C. 360ee(b)(3)) and 21 CFR 101.9(j)(8); or (c) a “dietary food for special medical purposes” as defined in Directive 1999/21/EC of the European Parliament and of the Council; or (d) any food product substantially equivalent to the preceding clause (a), (b) or (c) under any applicable laws and regulations in any other jurisdiction to be used under medical supervision.
“Net Sales” shall mean the Gross Sales Price invoiced by Buyer or its Affiliates to third parties, less only (a) any taxes included in the Gross Sales Price, if any, and (b) Allowable Deductions.
“NR Product” means NR and any future revisions in salts, formulations, or other forms.
“Protein Based” means any functional food or beverages (not a supplement) that lists protein as a primary nutrient in the ingredient list under labeling regulations in the US or similar labeling or definitional regulations globally and contains at least 5 grams of protein per serving for ready to drink products and 2 grams of protein per serving in sachets.
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"Reporting Period" shall begin on the first day of each calendar quarter and end on the last day of such calendar quarter.
“Seller” shall include ChromaDex, Inc., its Affiliates and their respective successors and assigns.
“Seller’s Technical Feasibility” shall mean when Seller, in its reasonable judgment, determines that the NR Product would be stable in a ready to drink format. Buyer’s Technical Feasibility and Seller’s Technical Feasibility may sometimes be referred to collectively as “Technical Feasibility”.
“Specification” shall mean the description of the NR Product set forth on Exhibit C – Product Specifications (Exhibit C is hereby incorporated herein in full by this reference). The Specifications may be amended from time to time by ChromaDex upon [***] prior written notice thereof to Buyer. Any material modifications to the Specifications that may impact commercialization, manufacturing, and indications for use or taste of an Approved Product shall require the advance written approval of Buyer, such approval not to be unreasonably withheld or delayed.
“Sports Nutrition” means product offerings formulated for and marketed to athletes to support sports and athletic training to optimize sports and athletic performance.
Sub-Territories” shall mean each of (i) North America; (ii) Europe; (iii) Latin America (including Central America and South America; and (iv) Asia Pacific Exceptions (as defined below)).
“Sub-Territory Reversion” is defined in Paragraph 3.6.2.
“Supplier Code of Conduct” shall mean Buyer’s Responsible Sourcing Standard as published on https://www.nestle.com/aboutus/suppliers (or any successor URL of which Seller is advised in advance in writing). Seller shall be advised of and agree to any revisions to the version at such URL as of the Effective Date hereof.
“Term” shall mean the term of this Agreement, which shall commence on the Effective Date and shall remain in effect until the expiration or abandonment of all applicable issued patents and applicable filed patent applications for the NR Product, unless earlier terminated in accordance with the provisions of this Agreement.
“Territory” shall mean the combination of North America, Europe, Latin America (including Central America and South America), but excluding Asia Pacific except for the following territories that shall be included in the Territory: Australia, New Zealand, and Japan only (collectively the “Asia Pacific Exceptions”). The Territory shall be subject to the Sub-Territory Reversion pursuant to the terms hereof.
“Washington Heart Study” shall mean ClinicalTrials.gov Identifier: NCT03423342, which can be found at https://www.clinicaltrials.gov/ct2/show/NCT03423342?term=nicotinamide+riboside&rank=3.
2.Conditions Precedent to Grant of Rights and Execution of This Agreement.
2.1 Execution of this Agreement is conditioned upon:
(i)Completion of due diligence satisfactory to both ChromaDex and Buyer; and
(ii)Receipt of the internal approvals reasonably required by both ChromaDex and Buyer.
2.2 By execution of this Agreement by both Parties, both Seller and Buyer are representing that the foregoing conditions have been satisfied.
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3.Supply and Exclusivity.
3.1Supply. Throughout the Term, Buyer shall exclusively purchase from Seller and Seller shall supply to Buyer the NR Product in accordance with the specific terms and conditions contained herein. In the event Seller fails to timely fulfill a Purchase Order (defined below), Buyer will provide Seller written notice thereof and Seller shall have [***] to cure by fulfilling the Purchase Order. If Seller repeatedly (at least [***] times in any rolling [***] period) and materially fails to timely fulfill Purchase Orders, Buyer shall not be obligated to purchase NR Product solely from Seller.
3.2Approved Products. Seller hereby agrees that Buyer shall be entitled to develop, manufacture, sell, promote, import, and distribute the Approved Products using NR Product in the Field in the Territory during the Term.
3.3Exclusivity. Provided that Seller has not terminated exclusivity as permitted by this Agreement (including Seller’s rights to Reversion), Seller agrees that it shall not sell NR Product to any third party for use in Medical Nutrition in the Field in the Territory during the Term. In addition, Seller shall not sell Medical Nutrition products containing NR Product in the Field in the Territory during the Term.
3.4Co-Exclusivity. Provided that Seller has not terminated exclusivity as permitted by this Agreement (including Seller’s rights to Reversion), Seller agrees that it shall not sell NR Product to any third party for use in the manufacture of any third party product sold under a third party brand in Functional Food and Beverages in the Field in the Territory during the Term (“Buyer’s Co-Exclusivity”).
3.4.1In order to maintain Buyer’s Co-Exclusivity:
3.4.1.1Buyer and Seller shall meet at the beginning of each quarter during calendar year 2019 to communicate regarding Buyer’s progress towards commercialization.
3.4.1.2Buyer shall conduct Technical Feasibility product testing (including sensory panel testing) by [***] on a Functional Food and Beverages Approved Product (the “Consumer Product Test Target”). If Buyer fails to achieve Buyer’s Technical Feasibility by the Consumer Product Test Target, Buyer shall notify Seller in writing no later than [***]. If Seller provides Buyer written notice no later than [***] that Seller has achieved Seller’s Technical Feasibility after Buyer notifies Seller that Buyer failed to achieve Buyer’s Technical Feasibility, then Seller shall have the option to terminate Buyer’s Co-Exclusivity upon [***] written notice (“Seller’s Feasibility Failure Option”).
3.4.1.3Buyer must Launch the Approved Products in accordance with Section 3.6. If Buyer fails to comply with the Launch requirements and deadlines, Seller shall have the option to exercise any of its rights to reversion and terminate Buyer’s Co-Exclusivity in accordance with the terms of this Agreement.
3.4.1.4Buyer’s Co-Exclusivity shall cease without notice when Buyer is no longer required to remit Sales Fees pursuant to Section 4.3.3.2, at which time (i) there shall be no limitation on Seller’s ability to sell the NR Product and (ii) Buyer will no longer be subject to the Annual Minimum Royalty requirements set forth in Section 4.3.3.4 of this Agreement.
3.4.2Buyer’s Co-Exclusivity does not prohibit Seller from selling products containing NR Product to consumers at any time and Buyer acknowledges that Seller will maintain all rights to sell products containing NR Product to consumers in Functional Food and Beverages without limitation.
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3.4.3Buyer’s Co-Exclusivity shall not include Functional Food and Beverages Extensions. As long as Buyer has the right to purchase NR Product for use in Buyer’s development, manufacture, sale, promotion, importation, and distribution of Functional Food and Beverages in a Sub-Territory, Buyer shall have the right (although not co-exclusive) to purchase NR Product for use in Buyer’s development, manufacture, sale, promotion, importation, and distribution of Functional Food and Beverages Extensions in the same Sub-Territory. The Parties hereby acknowledge that Seller is not prohibited from developing, manufacturing, or selling Functional Food and Beverages Extensions equivalent products containing NR Product.
3.5Prior Existing Obligations. Notwithstanding Section 3.3 (Exclusivity) and Section 3.4 (Co-Exclusivity), prior to the Effective Date, Seller entered into certain agreements to supply the NR Product or products containing NR Product to certain third parties (“Prior Existing Obligations”). A list of such Prior Existing Obligations are attached hereto as Exhibit D - Prior Existing Obligations (Exhibit D is hereby incorporated herein in full by this reference). Buyer agrees that Seller’s continued performance under the Prior Existing Obligations is not a breach of this Agreement, provided however that Seller shall use commercially reasonable efforts to terminate such Prior Existing Obligations as soon as legally possible.
3.6Regulatory Activities; Sub-Territory Reversion.
3.6.1Seller’s Regulatory Activities. Buyer and Seller acknowledge and agree that Seller is principally responsible for performing certain regulatory activities relating to the NR Product as set forth in this Section 3.6 and Seller agrees to proceed diligently, in good faith, and without delay (“Seller’s Regulatory Activities”). To the extent that any of Seller’s Regulatory Activities are required by applicable governmental regulators “Applicable Regulators”) in order for Buyer to launch an Approved Product in a specific Sub-Territory, Seller’s Regulatory Activities shall be conditions to Buyer’s launch (and any related payment) obligations for such Approved Products (on a product by product basis in each Approved Product Category). If Seller is unable to obtain regulatory approval from the Applicable Regulators of any specific Approved Product as directed and recommended by Buyer, including dosage and regulatory categories set by Buyer, Buyer has the option to accept the Applicable Regulators’ decision and/or guidance or, within [***] of Buyer’s receipt of Applicable Regulators’ final decision and/or guidance with respect to a particular Approved Product in a Sub-Territory, reject it in writing. If Buyer accepts such final decision or guidance, Seller’s Regulatory Activities shall be deemed satisfied for the applicable Approved Product in the applicable Sub-Territory. If Buyer rejects Applicable Regulators’ final decision and/or guidance with respect to a particular Approved Product in a Sub-Territory, Seller has the right to terminate all of Buyer’s rights to sell the applicable Approved Products in the applicable Sub-Territory.
3.6.1.1Functional Food and Beverages in United States. Buyer and Seller acknowledge that Seller has already obtained GRAS certification self-determination with successful FDA notification for certain Functional Food and Beverages, including vitamin waters, protein shakes, nutrition bars, gum, chews, and powdered beverages at a maximum level of 0.0057% by weight as consumed. Seller has successfully completed a New Dietary Ingredient Notification for nutritional drinks and meals to include NR use up to 300mg/day. Within [***] of the execution of this Agreement, Seller will endeavor to obtain a GRAS self-determination without notice status for certain mutually agreed Functional Food and Beverages to include NR use up to 500mg/day; provided however that Buyer and Seller shall consider the daily allowable dosage in light of intake products Buyer intends to Launch, it being acknowledged by Buyer that the more opportunities to intake NR Product, the lower the daily allowable usage may result.
3.6.1.2Medical Nutrition in United States. Within [***] after the execution of this Agreement, Seller will use commercially reasonable efforts to obtain a GRAS self-determination without notification status at 1,000mg/day based on the Martens and Dollerup studies. Within [***] after the publication of the Washington Heart Study, anticipated to be completed by the end of [***], Seller will use commercially reasonable efforts to obtain a GRAS self-determination without notice status at 2,000mg/day.
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3.6.1.3Outside United States. Buyer and Seller shall meet within [***] of the Effective Date and periodically thereafter to arrive at a mutually agreed upon schedule of Sub-Territories outside the United States for which Seller will submit regulatory approval dossiers (the “Schedule of International Markets”). Buyer and Seller acknowledge that Brazil, Canada, Europe and Australia are the initial Sub-Territories on the Schedule of International Markets. Buyer and Seller shall exchange information as appropriate to facilitate the parties’ efforts to obtain regulatory approvals, which might include scientific information to help accelerate the process.
3.6.2Sub-Territory Reversion.
3.6.2.1North America.
3.6.2.1.1Functional Food and Beverages. If Buyer fails to Launch a Functional Food and Beverages Approved Product in North America within [***] of the Effective Date (the “NA Functional Food and Beverages Reversion Period”), all co-exclusivity rights of Buyer with respect to North America for such Approved Product Category shall terminate and there shall be no limitation on Seller’s ability to sell NR Product in North America in such Approved Product Category after such termination (the “NA Functional Food and Beverages Reversion”).
3.6.2.1.1.1Reversion; Termination. Buyer can avoid the NA Functional Food and Beverages Reversion and extend its co-exclusivity rights for [***] (the “NA FF&B Co-Exclusivity Extension”) if Buyer pays to Seller the equivalent of the Approved Product Launch Fee for Functional Food and Beverages for North America for such [***] (the “NA FF&B Reversion Fee”). The NA FF&B Reversion Fee must be received by Seller prior to the expiration of the NA Functional Food and Beverages Reversion Period in order for Buyer to exercise the NA FF&B Co-Exclusivity Extension. The NA FF&B Exclusivity Extension may be exercised only once. If Buyer elects not to remit such NA FF&B Reversion Fee, Buyer’s co-exclusivity for Functional Food and Beverages in North America shall terminate and Seller shall have the option to terminate all of Buyer’s rights to sell Functional Food and Beverages Approved Products containing the NR Product within North America (the “NA FF&B Termination”) as its sole and exclusive remedy. Seller shall have [***] after Buyer’s failure to pay the NA FF&B Reversion Fee to determine whether Seller is exercising the NA FF&B Termination. Seller shall provide the NA FF&B Termination notice in writing.
3.6.2.1.2Medical Nutrition. If Buyer does not Launch a Medical Nutrition Approved Product in North America within [***] of the Effective Date (the “NA Medical Nutrition Reversion Period”), all exclusivity rights of Buyer with respect to North America for such Approved Product shall terminate and there shall be no limitation on Seller’s ability to sell NR Product into Medical Nutrition in North America after such termination (the “NA Medical Nutrition Reversion”).
3.6.2.1.2.1Reversion; Termination. Buyer can avoid the NA Medical Nutrition Reversion and extend its exclusivity rights for [***] (the “NA MN Exclusivity Extension”) if Buyer pays to Seller the equivalent of the Approved Product Launch Fee for Medical Nutrition for North America for such [***] (the “NA MN Reversion Fee”). The NA MN Reversion Fee must be received by Seller prior to the expiration of the NA Medical Nutrition Reversion Period in order for Buyer to exercise the NA MN
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Exclusivity Extension. The NA MN Exclusivity Extension may be exercised only once. If Buyer elects not to remit such NA MN Reversion Fee, Buyer’s exclusivity for Medical Nutrition in North America shall terminate and Seller shall have the option to terminate all of Buyer’s rights to sell Medical Nutrition Approved Products containing the NR Product within North America (the “NA MN Termination”) as its sole and exclusive remedy. Seller shall have [***] after Buyer’s failure to pay the NA MN Reversion Fee to determine whether Seller is exercising the NA MN Termination. Seller shall provide the NA MN Termination notice in writing.
3.6.2.1.3The NA Functional Food and Beverages Reversion Period and the NA Medical Nutrition Reversion Period shall be collectively referred to herein as the “NA Reversion Period” and the NA Functional Food and Beverages Reversion and the NA Medical Nutrition Reversion shall be collectively referred to herein as the “NA Reversion”.
3.6.2.2International. If Buyer does not Launch an Approved Product in an Approved Product Category in Europe, Latin America and/or Asia Pacific within [***] of the Effective Date (the “Sub-Territory Reversion Period”), all co-exclusivity rights in Functional Food and Beverages and all exclusivity rights in Medical Nutrition with respect to the relevant Sub-Territory shall terminate and there shall be no limitation on Seller’s ability to sell NR Product in the relevant Sub-Territory in such Approved Product Category after such termination (the “Sub-Territory Reversion”).
3.6.2.2.1.1Reversion; Termination. Buyer can avoid the Sub-Territory Reversion and extend its co-exclusivity or exclusivity rights, as applicable, for [***] (the “Sub-Territory Extension”) if Buyer pays to Seller the equivalent of the Approved Product Launch Fee per Approved Product Category for the relevant Sub-Territory for such [***] (the “Sub-Territory Reversion Fee”). The Sub-Territory Reversion Fee must be received by Seller prior to the expiration of the Sub-Territory Reversion Period in order for Buyer to exercise the Sub-Territory Extension. The Sub-Territory Extension may be exercised only once. If Buyer elects not to remit such Sub-Territory Reversion Fee, Buyer’s co-exclusivity rights for Functional Food and Beverages and its exclusivity rights for Medical Nutrition shall terminate in the relevant Sub-Territory and Seller shall have the option to terminate all of Buyer’s rights to sell the Approved Products containing the NR Product within the relevant Category and Sub-Territory (the “Sub-Territory Termination”) as its sole and exclusive remedy. Seller shall have [***] after Buyer’s failure to pay the Sub-Territory Reversion Fee to determine whether Seller is exercising the Sub-Territory Termination. Seller shall provide the Sub-Territory Termination notice in writing.
3.6.2.3The NA Reversion and Sub-Territory Reversion shall collectively be referred to herein as the “Reversions.” The NA FF&B Reversion Fee, NA MN Reversion Fee and Sub-Territory Reversion Fee shall collectively be referred to herein as the “Reversion Fees”.
3.7Reservation of Rights. Other than the specifically enumerated, limited exclusivity and co-exclusivity rights sets forth in this Agreement, Seller is entitled to develop, manufacture, sell, promote, import, and distribute any items, products, materials, and rights in its sole discretion. Any rights not specifically granted to Buyer are hereby reserved to Seller.
3.8Recall and Termination Under A Recall. If any Approved Products are at any point during the Term subject to a Class I product recall and are likely to cause serious health problems or death requiring notification by the USFDA, ChromaDex has the right to direct Buyer to refrain from selling or distributing the affected Approved Products until the situation is resolved to ChromaDex’s reasonable satisfaction, and without liability to NHSc therefor.
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4.Ordering, Purchase Price and Payment.
4.1Forecasts. Buyer shall provide to Seller a good faith projection or estimate of the quantity of NR Products that Buyer may order each month for a [***] period (the “Forecast”). The first [***] of the Forecast shall be binding (the “Binding Forecast”) and reflected in the Purchase Order (defined below) with the remaining [***] constituting a rolling Forecast which shall be an estimate only of Buyer’s production requirements and not a firm order for the NR Products. Seller will maintain sufficient inventory and manufacturing capacity to produce up to [***] percent ([***]%) of Buyer’s estimated purchases for the Forecast period.
4.2Purchase Orders. Buyer agrees to submit to Seller a binding purchase order, which will specify, among other things, (i) the quantity of NR Product ordered and (ii) the delivery date (the “Purchase Order”) at least [***] in advance of any required NR Product delivery date. All NR Product will be made available for pick up at Seller’s designated facility (“Seller’s Facility”). Each Purchase Order will not vary by more than [***] percent ([***]%) from the applicable Binding Forecast. Any terms contained in any Purchase Order which are inconsistent with the terms of this Agreement, shall be excluded and are of no force and effect. In the event of a conflict between the terms of this Agreement and a Purchase Order, the terms of this Agreement shall prevail. Seller shall confirm to Buyer the receipt of each Purchase Order within [***] after receipt and provide to Buyer the dates by which Seller will deliver the NR Products to Seller’s Facility. Legally binding obligations for the purchase of NR Products will be created when Buyer submits the Binding Forecast. Seller will fulfill Purchase Orders within the requested timeframe (barring any Force Majeure Events). The minimum purchase order quantity shall be [***]kg and minimum pack size shall be [***]kg. The NR Product shall have a minimum remaining shelf life of [***] upon availability at Seller’s Facility.
4.3Purchase Price. Buyer shall pay to Seller the following Fees:
4.3.1Exclusivity Fee. In exchange for the exclusivity and co-exclusivity set forth in this Agreement, Buyer shall pay to Seller within [***] of the Effective Date a one-time, non-refundable payment of Four Million United States Dollars (US$4,000,000.00) (the “Exclusivity Fee”).
4.3.2Approved Product Launch Fees. Following the Launch of the first Approved Product in the respective Approved Product Category in a country in the respective Sub-Territory, Buyer shall pay to Seller within [***] following the relevant Launch a one-time, non-refundable payment in the amounts set forth below (“Approved Product Launch Fees”):
| | | | | | | | | | | | | | |
Approved Product | North America | Europe | Latin America | Asia Pacific |
Functional Food and Beverages | US$[***] | US$[***] | US$[***] | US$[***] |
Medical Nutrition | US$[***] | US$[***] | US$[***] | US$[***] |
For the avoidance of doubt, Approved Product Launch Fees are only payable once per Approved Product Category and Sub-Territory, i.e. the maximum Approved Product Launch Fees under this Agreement in the event the Buyer launches one or several Approved Medical Nutrition product and one or several Approved Functional Foods and Beverages product in each Sub-Territory is maximum US$6,000,000.00.
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4.3.2.1The Reversion Fees are separate and apart from the Approved Product Launch Fees and payment of a Reversion Fee, if any, shall not be applicable against the Approved Product Launch Fees. The Approved Product Launch Fees shall not be applicable against the Exclusivity Fee, any Sales Fees (defined below), or any Annual Minimum Royalty.
4.3.3NR Product Fees. The purchase price of the NR Product purchased by Buyer from Seller pursuant to the Purchase Orders shall be calculated as follows:
4.3.3.1[***] United States Dollars per kilogram (US$[***]/kg) for purchase orders placed in 2018 and 2019 (the “KG Price”). The KG Price for future years will be mutually determined by the Parties and agreed to in advance in writing by both parties; plus
4.3.3.2A percent of the Net Sales of Approved Products sold by Buyer as set forth below (the “Sales Fees”) (for purposes of clarification, this is for all Approved Products and not per Approved Product Category) :
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Cumulative worldwide Annual Net Sales: | Sales Fee: |
[***] | [***] Percent ([***]%) |
[***] | [***] Percent ([***]%) |
[***] | [***] Percent ([***]%) |
[***] | [***] Percent ([***]%) |
[***] | [***] Percent ([***]%) |
[***] | [***] Percent ([***]%) |
4.3.3.3The Sales Fees will be calculated based on cumulative worldwide gross Net Sales per each calendar year. The first calendar year of the Agreement shall be deemed to be the Effective Date through December 31, 2019. Thereafter, each calendar year shall commence on January 1st and end on December 31st.
4.3.3.4Commencing twenty four (24) months after Buyer has Launched an Approved Product in the relevant category (“Royalty Year 1”), Buyer will pay Seller the following minimum royalties on an annual basis for such Approved Product Category as indicated below (the "Annual Minimum Royalty"):
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Royalty Year* | Functional Food and Beverages Category: Annual Minimum Royalty | Medical Nutrition Category: Annual Minimum Royalty |
[***] | [***] | [***] |
[…***… ] | [***] | [***] |
* The Annual Minimum Royalty shall be prorated for any partial calendar year.
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4.3.3.5Sales Fees shall be due quarterly and shall be payable within [***] of Buyer’s receipt of an invoice from Seller reflecting the Sales Fee amount set forth in the sales report for such period submitted by Buyer pursuant to Section 5.2 of this Agreement.
4.3.3.6Sales Fees payable on Net Sales of Approved Products will be applicable against and offset only against the Annual Minimum Royalty. If the total Sales Fees for any calendar year exceed the combined Annual Minimum Royalty due for all Approved Product Categories in which an Approved Product has been launched, no additional Annual Minimum Royalty shall be due for that calendar year.
4.3.3.7In the event that the Sales Fees are less than the Annual Minimum Royalties, Buyer shall pay the difference between the total Annual Minimum Royalty in all Approved Product Categories in which an Approved Product has been launched combined less the amount of Sales Fees received by Seller for the relevant calendar year (the “Sales Fee True Up”). The Sales Fee True Up shall be paid within [***] of the end of relevant calendar year. In the event that Buyer does not pay Seller the Annual Minimum Royalty in a particular calendar year, Buyer will lose all exclusivity and co-exclusivity rights with respect to NR Product, products containing NR Product, and uses thereof and Seller shall have the option to terminate all of Buyer’s rights to sell the Approved Products in the Sub-Territory for which the Annual Minimum Royalty was not paid (“Annual Minimum Royalty Termination”).
4.3.3.8The Sales Fees set forth in clause 4.3.3.2 above will be reduced by an amount equal to [***] percent ([***]%) of such Sales Fees with respect to an Approved Product in each country in the Territory if for the applicable calendar quarter there is a product that (a) contains NR and (b) is either (i) a Functional Food or (ii) a Medical Nutrition product, has been approved by the applicable regulatory authority and is being sold in such country by a Third Party (a “Competing Product”). Notwithstanding the foregoing, such [***] percent ([***]%) reduction to the Sales Fees will not apply if and for so long as unit sales of Competing Products in such country are lower than (i) [***] percent ([***]%) of the units of Buyer’s sales in the corresponding period in such country or (ii) [***] percent ([***]%) of the units of Buyer’s sales in the corresponding period in such country if Seller has brought an action in a court of competent jurisdiction challenging such Competing Product. No Annual Minimum Royalties or Sales Fees on the Net Sales of Approved Products sold by Seller to Buyer are due with respect to any given Sub-Territory after the expiration, final invalidation or abandonment of all of Seller’s applicable issued patents and applicable filed patent applications for the NR Product in such Sub-Territory, or when Seller no longer has the right to sell the NR Product in such Sub-Territory.
4.3.3.9The KG Price shall be due [***] after the date of shipment of NR Product based on each Purchase Order (and corresponding with Seller’s invoice date). The Sales Fees shall be due within [***] after the last day of each calendar quarter. In the event that, after first sale of an Approved Product, there are no sales made during a given calendar quarter, Buyer shall provide ChromaDex with a statement within [***] after the last day of such quarter reporting that no sales were made during such quarter.
4.3.3.10 In the event Buyer, via benchmarking, can demonstrate a gap between the price being
charged by Seller and the competition or market price, or the price movement and the market price movement, for NR Products in comparable quality and quantity, Buyer and Seller will meet to discuss ways to remedy the situation. Further the Seller agrees not to sell or supply NR Products to any third party at a price lower than the applicable price charged to Buyer for the same volume of NR Products.
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4.4Payments.
4.4.1Late Payments. Failure to make prompt and full payment of undisputed amounts hereunder constitutes a material breach of this Agreement and to take the measures as set forth in Section 15.2 of this Agreement. Buyer has no right of setoff. If full payment is not made when due, Seller shall be entitled to interest on any amount unpaid at the rate of [***] percent ([***]%) per [***] or the maximum rate permissible by applicable law until Seller receives payment in full. In addition, if any amount payable to Seller is not received by Seller within [***] of the due date, Buyer agrees to reimburse Seller for any and all commercially reasonable out-of-pocket expenses Seller may incur, including reasonable attorneys' fees, in taking any action to obtain such overdue payments contemplated by this Section.
4.4.2Method of Payment. All payments under this Agreement should be made payable to "ChromaDex, Inc." and sent via wire transfer as indicated below. Each payment should reference this Agreement and identify the obligation under this Agreement that the payment satisfies. Buyer shall remit payment to the following account (or such other accounts(s) as ChromaDex may specify in writing):
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ChromaDex, Inc. Attention: [***] Account # [***] ABA#: [***] Bank: [***] Address: [***] Address: [***]
Remittance detail for wire transfers must also be sent either by fax or e-mail to: Fax: [***], Attention: [***] E-mail: [***] |
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4.4.3Payments in U.S. Dollars. All payments due under this Agreement shall be drawn on a United States bank and shall be payable in United States dollars. Conversion of foreign currency to U.S. dollars shall be made at the conversion rate existing in the United States (as reported in the Wall Street Journal) on the last working day of the calendar quarter of the applicable Reporting Period. Such payments shall be without deduction of exchange, collection, or other charges, and, specifically, without deduction of withholding or similar taxes or other government imposed fees or taxes, except as permitted in the definition of Net Selling Price.
5.REPORTS AND RECORDS.
5.1 Progress Reports.
5.1.1Within [***] after the Effective Date (and an updated version [***] thereafter), Buyer shall furnish ChromaDex with a high level research and development plan describing the major tasks to be achieved in order to bring to market an Approved Product (including updates and progress and regulatory milestones achieved for the prior report). Such plans can be written or consist of conversations between NHSc and ChromaDex’s scientific and project management representatives.
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5.1.2Before First Commercial Sale. Prior to the first Launch of the first Approved Product, Buyer shall deliver reports to ChromaDex [***], within [***] of the end of each [***], containing reasonably detailed high level information concerning the immediately preceding [***], regarding Buyer’s progress towards commercialization including, but not limited to, progress towards regulatory approvals. In addition, Seller will provide Buyer with [***] updates on status and progress of the Seller Regulatory Obligations and any related regulatory approvals that Seller is undertaking that may impact Buyer’s launch plans for each territory.
5.1.3 Upon First Commercial Sale of an Approved Product. Buyer shall report to ChromaDex the date of first commercial sale of each Approved Product in each Sub-Territory within [***] of occurrence.
5.2Sales Reports.
5.2.1After the first commercial sale of each Approved Product, Buyer shall deliver reports to ChromaDex within [***] of the end of each Reporting Period, containing information concerning the immediately preceding Reporting Period.
5.2.2Each report delivered by Buyer to ChromaDex shall contain sufficient detail to permit confirmation of the accuracy of the Sales Fee for such period, including the following information for the immediately preceding Reporting Period only to the extent that such information may be applicable to such Reporting Period and shall be in a form as mutually agreed by the parties:
(i)the number of Approved Products sold by Buyer and its Affiliates to independent third parties in each Sub-Territory of the Territory;
(ii)the Gross Sales Price charged by Buyer and its Affiliates for each Approved Product in each Sub-Territory of the Territory (for the total Gross Sales Price of each Approved Product sold by Buyer);
(iii)calculation of Net Sales for each Approved Product for the applicable Reporting Period in each Sub-Territory of the Territory, including a listing of Allowable Deductions and allowed taxes; and
(iv)total Sales Fee due in U.S. dollars, together with the exchange rates used for conversion.
5.3Records, Audit, and Payment. Buyer shall maintain, and shall cause its Affiliates if and as applicable, to maintain, complete and accurate records relating to the rights and obligations under this Agreement and any amounts payable to ChromaDex in relation to this Agreement, which records shall contain sufficiently clear and detailed information to permit ChromaDex to confirm the accuracy of any reports delivered to ChromaDex and compliance in all other respects with this Agreement. The relevant party shall retain such records for at least [***] following the end of the calendar year to which they pertain, during which time ChromaDex, or ChromaDex's appointed agents, shall have the right, at ChromaDex's expense, to inspect such records during normal business hours to verify any reports and payments made or compliance in all other respects under this Agreement. Requests for an audit shall be made in writing. The audit shall occur within [***] after receipt of such written request. In the event that any audit performed under this Section reveals an underpayment in excess of [***] Dollars ($[***]), Buyer shall bear the full reasonable cost of such audit and shall correct any errors and omissions disclosed by such audit and remit any amounts due to ChromaDex within [***] of receiving notice thereof from ChromaDex.
6.Taxes and Import Duties. The KG Price does not include federal taxes, state or local sales taxes, use taxes, occupational taxes or import duties, all of which are the obligation of Buyer. Unless prohibited by law, Buyer is responsible for and shall pay all applicable sales, use, occupational, excise, value added or other similar taxes or import duties applicable to the manufacture, sale, price, delivery or use of the NR Product provided by Seller, or in lieu thereof, Buyer shall provide Seller with a tax-exemption certificate acceptable to and considered valid by the applicable taxing authorities.
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7.Delivery and Risk of Loss. Shipping terms for the Products are FOB Seller’s Facility. Seller shall bear all risk of loss or damage to NR Products until the NR Products are tendered to Buyer or its carrier for shipment at Seller’s Facility. Seller shall also assume full responsibility for any loss or damage to NR Products in the care, custody, or control of Seller until such time as title to the NR Product passes. Title shall pass at the time the NR Products are tendered to Buyer or its carrier for shipment at Seller’s Facility. At such time as title passes Buyer shall be fully responsible and shall hold Seller harmless for and assume all risk for any loss, destruction, or damage to the NR Product. Seller reserves the right to pack orders in the most economical manner, provided that this does not result in increased risk of loss of the NR Product. However, where Buyer requests special packaging or shipping, any additional cost will be billed to and be the responsibility of Buyer. Buyer acknowledges that, subject to Section 9 of this Agreement, Seller cannot accept returns, unless they do not meet the applicable Specifications or are otherwise defective and Seller is notified in writing within [***] of the delivery date of such defect or failure to meet applicable Specifications.
8.Delivery Delays. Seller shall use commercially reasonable efforts to make the NR Products available to Buyer on or before the delivery date set forth in the relevant Purchase Order. Delivery dates and estimates are, however, subject to Force Majeure Events. Once the NR Products are available for Buyer’s pick up, Buyer shall pick up and remove the NR Products promptly from Seller’s Facility, however in no event shall Buyer delay or defer pick up for more than [***].
9.Rejection and Revocation of Acceptance. Any rejection or revocation of acceptance of NR Product by Buyer that is based on initial inspection of the NR Product must be made within [***] of delivery of NR Product to Buyer. All shipments of NR Product shall be tested and inspected by Buyer during such [***] period. Rejection or revocation of acceptance of NR Product by Buyer shall be based the failure of NR Product to conform to the Specifications or any other representation, warranty or obligation set forth in this Agreement (including the exhibits hereto) in any material respect. Any attempted rejection or revocation of acceptance of such NR Product made thereafter shall be null and void except for any latent defects that Buyer did not detect after a reasonable initial inspection and acceptance. Each shipment hereunder is to be regarded as a separate and independent sale.
10.Obligations.
10.1The identities of Seller’s suppliers are a proprietary trade secret of Seller. All information regarding Seller’s suppliers and their quality standards released to Buyer shall be kept strictly confidential in accordance with the requirements herein. Buyer acknowledges and agrees that Buyer will not contact ChromaDex's supplier(s) in connection with the manufacture, distribution, purchase, pricing, or sale of NR, NR Product, or any other NR or NR Product precursor or otherwise as indicated in further detail in the Non-Solicitation, Non-Competition, and Non-Circumvention provision herein.
10.2Buyer shall not sell Approved Product other than in the Field in the Territory
10.3Approved Product must contain a minimum of [***]mg of NR Product per serving (unless Buyer and Seller agree otherwise in advance in writing) and comply with the New Dietary Ingredient (NDI) Notifications submitted by Seller to the FDA on August 20, 2015 and filed by the FDA on November 3, 2015 and submitted by Seller to the FDA on December 27, 2017 and filed by the FDA on March 7, 2018.
10.4Buyer may not re-sell or re-ship the NR Product to a third party (other than an Affiliate or a co-manufacturer appointed by Buyer) in bulk raw material form, unless expressly authorized to do so in advance in writing by Seller.
10.5For U.S. distribution, on or in labels, packaging, advertising, promotional materials or Internet communications for Buyer’s Approved Product, Buyer will only make claims that in Buyer’s commercially reasonable assessment are substantiated by competent and reliable scientific evidence, and are in compliance with all applicable laws, rules, statutes, and regulations. Buyer will not misrepresent on product labels the amount, quantity or level of the NR Product contained in the Approved Product. Buyer hereby guarantees compliance with the requirements of this Section 10, specifically including compliance with current Good Manufacturing Practices as set forth in 21 CFR Section 111 and other relevant rules, regulations, statutes, and laws. In the event that current labeling, packaging or formulations of the Approved Product do not comply with the requirements of this Section 10, Buyer will
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promptly rectify all nonconforming Approved Product in a manner reasonably acceptable to Seller and at Buyer’s sole cost and expense.
10.6Patent Marking. During the Term, Buyer will ensure proper patent marking on all Approved Product. All Approved Product shall be marked as negotiated and agreed upon by the parties in good faith.
10.7Trademark Marking. During the Term, Buyer will ensure proper trademark marking on all Approved Product that includes a ChromaDex Trademark as set forth in this Agreement.
11.ChromaDex Trademarks. Provided that Buyer is not in material breach of this Agreement, ChromaDex hereby grants Buyer a fully paid-up, royalty-free, non-exclusive, non-sublicensable (other than to its Affiliates) right and license to use the ChromaDex Trademarks only as provided below:
11.1Buyer agrees to use the ChromaDex Trademarks in accordance with this Section, and in accordance with ChromaDex’s Brand Usage Guidelines. The parties shall negotiate and agree upon in good faith the display (prominence and location) of the ChromaDex Trademarks on Approved Product labels and marketing materials.
11.2For the avoidance of doubt, ChromaDex rights in accordance with this Section are limited to solely the right to review if the ChromaDex Trademarks are being used by Buyer in accordance with this Agreement. ChromaDex has no right to control the content of any promotional material.
11.3Buyer agrees to include the ChromaDex Trademark “TRU NIAGEN® on the product packaging (with the exception of small product formats like sachets). Any use of the ChromaDex Trademarks and other proprietary markings and notices of ChromaDex by Buyer shall be consistent with ChromaDex’s Brand Usage Guidelines.
11.4All use of ChromaDex Trademarks and any related goodwill will all inure to ChromaDex’s benefit.
11.5Any use of the ChromaDex Trademarks by Buyer outside the scope of ChromaDex’s Brand Usage Guidelines or any use of the ChromaDex Trademarks that are not used for labeling, packaging, marketing and advertising of the Approved Products in the ordinary course (e.g. press releases) require the prior written approval of Seller.
11.6Subject to the limitations set forth above, Buyer agrees to abide by ChromaDex’s reasonable written ChromaDex Brand Usage Guidelines as issued and provided to Buyer from time to time. In any case where the ChromaDex Trademarks are not used in compliance with ChromaDex’s trademark policies, Buyer will as soon as reasonably commercially practical correct the non-compliance and submit samples of compliant use to ChromaDex for prior written approval.
11.7The Approved Products will be marketed by Buyer under a trade name or trademark to be determined by Buyer in its sole discretion, subject to the obligation that Buyer will not use confusingly similar marks or trade dress as compared to the ChromaDex Trademarks (and ChromaDex also agrees not to use confusingly similar marks or trade dress as compared to Buyer trademarks or trade dress).
11.8ChromaDex has the right to supervise the Buyer’s use of the ChromaDex Trademarks with respect to the nature and quality of the Approved Products to ensure that any such trademarks are used by Buyer pursuant to this Agreement. During the Term, without limitation, Buyer agrees to use the ChromaDex Trademarks on and only in connection with the Approved Products in strict accordance with this Agreement.
11.9Buyer agrees to always use a ChromaDex Trademark accompanied by an appropriate noun as shown in ChromaDex’s Brand Usage Guidelines. Buyer further agrees that Buyer shall not use any ChromaDex Trademarks as a noun and that Buyer shall not pluralize, make possessive, abbreviate, or join any ChromaDex Trademark to other words, symbols, or numbers, either as one word or with a hyphen.
11.10Buyer shall always use the proper spelling and the proper trademark symbol for the ChromaDex Trademarks in accordance with ChromaDex’s Brand Usage Guidelines.
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11.11Buyer shall attribute ownership of all ChromaDex Trademarks to ChromaDex by using the TM, SM, or ® symbol (as indicated in ChromaDex’s Brand Usage Guidelines) and by using the trademark attribution on all marketing and collateral materials for the Approved Product as indicated in ChromaDex’s Brand Usage Guidelines or as otherwise mutually agreed in writing by the Parties. For the trademark symbol, the superscript or subscript mode is preferred, but if it is not available, use parentheses: (TM), (SM) or (R).
11.12Buyer may not incorporate Buyer’s and/or any other third party mark into any ChromaDex Trademark nor may Buyer integrate any ChromaDex Trademark into any of Buyer’s own trademarks, logos, or designs. Buyer shall not alter, make puns on, or modify the ChromaDex Trademarks in any way, nor may Buyer use and/or adopt any marks or logos that are confusingly similar to or that dilute any ChromaDex Trademarks.
11.13Buyer shall not use any ChromaDex Trademark in any manner that creates confusion as to the source, sponsorship, or association of Buyer’s products and/or site or facility with ChromaDex or, that in any way indicates to the public that Buyer is a division or Affiliate, or franchisee of ChromaDex or otherwise related to ChromaDex. Buyer may not use or display any ChromaDex Trademarks on Buyer’s invoices, bills, shipping memos, and/or letterhead, and Buyer may not incorporate any ChromaDex Trademarks into any company name or product name.
11.14Buyer shall not re-use, copy, modify, and/or counterfeit packaging associated with any ChromaDex product. To do so will constitute a material breach of this Agreement and ChromaDex shall have the right to terminate this Agreement. ChromaDex further reserves all rights to pursue any and all remedies available to it as a result of Buyer’s selling and/or manufacturing any remarked, counterfeited, copied, re-used, modified ChromaDex Trademark, ChromaDex product, and/or ChromaDex product packaging.
11.15Buyer shall not use any ChromaDex Trademarks on any promotional material created by Buyer in close proximity to non- Approved Products unless it is completely clear that the ChromaDex Trademark is being used and associated solely with the appropriate Approved Product. Buyer agrees to take all steps necessary to avoid creating the false impression that ChromaDex is in any way the source, sponsor, or licensor of any product that is not an Approved Product.
11.16Buyer shall not use or display any ChromaDex Trademarks in any manner that may disparage ChromaDex, its products or services, or for promotional goods or for products which, in ChromaDex’s sole discretion may diminish or otherwise damage ChromaDex’s goodwill in any ChromaDex Trademarks, including but not limited to, uses which could be deemed to be obscene, pornographic, excessively violent, or otherwise in poor taste or unlawful, or which purpose is to encourage unlawful activities.
11.17Notwithstanding any of the foregoing, Buyer is not prohibited from making textual, non-logo use in advertising, promotional materials, and invoices of ChromaDex product names to refer to ChromaDex products that Buyer is selling, so long as such product names are used properly as trademarks with the appropriate trademark symbol and attribution legend as required by ChromaDex’s Brand Usage Guidelines.
11.18All Approved Product shall conform with the requirements herein, including, but not limited to, ChromaDex’s Brand Usage Guidelines. Approved Product labels must be submitted to Seller prior to launch and approved by Seller in advance in writing as to the use of ChromaDex’s Trademarks. Seller will not unreasonably withhold approval. If Seller does not reject a submitted label within [***], such label is deemed accepted. Seller shall indicate to Buyer Seller’s reasons for withholding approval which must be consistent with the requirements set forth in this Agreement. Buyer at Buyer’s sole cost and expense shall ensure all Approved Product labels meet all applicable laws, rules, statutes, and regulations and all of Seller’s requirements for approval set forth in this Agreement.
12.Buyer Diligence Obligations. Buyer shall use commercially reasonable diligent efforts, or shall cause its Affiliates to use commercially reasonable diligent efforts, to develop Approved Products and to introduce Approved Products into the commercial market; thereafter, Buyer or its Affiliates shall make Approved Products reasonably available to the public.
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13.NR Trade Secret Use. In connection with the rights granted herein, Buyer needs access to certain clinical and non-clinical data, agreements, and know-how with respect to NR, NR Product, and uses thereof (collectively the “NR Trade Secrets”). Buyer acknowledges that as between Buyer and Seller, Seller owns all right, title and interest in and to the NR Trade Secrets. Neither Buyer nor any of its Affiliates will contest Seller’s sole ownership and control over the NR Trade Secrets. Seller hereby agrees to make certain current and future NR Trade Secrets, in Seller’s sole discretion, available to Buyer solely for Buyer’s use to develop, manufacture and sell the Approved Products (the “Disclosure Purpose”). Except for the Disclosure Purpose, Buyer hereby agrees that Buyer shall not use or disclose the NR Trade Secrets. Buyer shall be entitled to share portions of the NR Trade Secrets with its Affiliates on a need to know basis provided that such Affiliates sign a confidentiality and non-disclosure agreement at least as restrictive as this Agreement. Upon expiration or earlier termination of this Agreement for any reason, Buyer and its Affiliates shall immediately cease use of all NR Trade Secrets and shall return all copies in any form (digital or otherwise) of the NR Trade Secrets to Seller within [***] of Seller’s request, and neither Buyer nor its Affiliates shall maintain any copies of any NR Trade Secrets.
14.Right of First Negotiation. In the event that ChromaDex, in its sole discretion, decides to exclusively license or sell substantially all assets related to the NR Product in the dietary supplement category (the “Divesting Assets”), ChromaDex shall advise Buyer and Buyer shall have a right of first negotiation for a period of [***] to acquire the Divesting Assets under terms and conditions to be negotiated in good faith by the Parties. If after [***] the Parties are unable to reach mutually agreeable terms and conditions, ChromaDex shall have the ability to sell or license the Divesting Assets in its sole discretion to a third party.
15.Term and Termination.
15.1Term. This Agreement shall commence on the Effective Date and, unless earlier terminated in accordance herewith, shall remain in full force and effect (the “Term”). For purposes of clarification, the Sales Fee and exclusivity and Buyer’s Co-Exclusivity (unless such exclusivity and/or Buyer’s Co-Exclusivity have been previously terminated pursuant to the terms hereof) shall terminate upon the expiration of the last relevant claim of ChromaDex’s applicable issued patents and applicable filed patents for the NR Product. Such applicable issued patents and applicable filed patents for the NR Product are as indicated on Exhibit F – Applicable Issued Patents and Applicable Filed Patents for the NR Product (as may be amended by ChromaDex from time to time) (Exhibit F is hereby incorporated herein in full by this reference)
15.2Termination. This Agreement may be terminated by: (i) a Party for cause if the other Party commits a material breach of this Agreement and does not cure such breach within thirty (30) days following such Party’s receipt of written notice reasonably detailing such breach from the non-breaching Party; (ii) a Party immediately upon the giving of written notice if the other Party files a petition for bankruptcy, is adjudicated bankrupt, takes advantage of the insolvency laws of any state, territory or country, or has a receiver, trustee, or other court officer appointed for its property; or, (iii) a Party if a Force Majeure Event (as described in Section 20 of this Agreement) with respect to the other Party shall have continued for ninety (90) days or is reasonably expected to continue for more than one hundred eighty (180) days.
15.3Buyer’s Further Termination Rights. Buyer shall have the right to terminate this Agreement under the following circumstance:
15.3.1Buyer may terminate this Agreement if Buyer’s Technical Feasibility in desired food forms is not achieved by December 31, 2019 by providing Seller sixty (60) days advanced written notice;
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15.3.2After the first anniversary of this Agreement until the twenty-fourth (24th) month after the Launch of the first Approved Product in each Product Category, Buyer may terminate this Agreement as to one or both Product Categories upon the payment of the Termination Fee for the terminated Product Category, which shall be paid promptly following Seller’s receipt of the termination notice;After the twenty-fifth (25th) month of the Launch of the first Approved Product, Buyer may terminate this Agreement with twelve (12) months advance written notice. No Termination Fee shall be due.
15.3.3The “Termination Fee” shall be Five Hundred Thousand Dollars (US$500,000) for each Product Category terminated, with a cap of One Million Dollars (US$1,000,000).
15.3.4ChromaDex will receive monthly updates on Buyer’s Technical Feasibility progress and other technical data from Buyer as further detailed in the Reports and Records Section herein and will offer reasonable assistance to Buyer in solving technical development issues as they arise. Seller shall have no obligation to reimburse Buyer any amounts already due and owing and/or paid under this Agreement in the event of a termination by Buyer pursuant to Section 15.3 of this Agreement.
15.4Effect of Termination.
15.4.1Survival. Any payment obligation of Buyer, Buyer’s obligations under Sections 13, 16.2, 17, 18, 21, and 22-37, and any other term of this Agreement that by their nature are meant to survive the termination of this Agreement, including all provisions that contemplate continuing effectiveness, including, without limitation, any term regarding warranty disclaimer, limitations of liability, indemnification, intellectual property rights, governing law/venue/prevailing party and general terms, shall so survive any termination of this Agreement.
15.4.2Inventory. Upon the early termination of this Agreement, Buyer and its Affiliates may complete and sell any work-in-progress and inventory of Approved Products that exist as of the effective date of termination (unless termination is based on cause or a breach by Buyer of ChromaDex’s intellectual property rights or Buyer’s confidentiality rights herein), provided that (i) Buyer pays Seller the applicable royalty on the Net Sales or other amounts due on such sales of Approved Products in accordance with the terms and conditions of this Agreement, and (ii) Buyer and its Affiliates shall complete and sell all work-in-progress and inventory of Approved Products within [***] after the effective date of termination.
15.4.3Pre-termination Obligations. In no event shall termination of this Agreement release Buyer or its Affiliates from the obligation to pay any amounts that became due on or before the effective date of termination.
15.4.4Buyer’s Post-Termination Obligations. After the termination hereof and Buyer’s exercise of the rights granted herein in the Inventory Section above, Buyer shall have no further rights to use the NR Product, sell Approved Product, or use any of the other rights granted to Buyer herein (including, but not limited to rights to the ChromaDex Trademarks and ChromaDex Trade Secrets). Buyer shall further return to ChromaDex all of ChromaDex’s Confidential Information (as defined herein).
16.Representations And Warranties.
16.1Seller’s Representations and Warranties.
Seller expressly represents and warrants that:
(a) It has all necessary legal capacity, right, power, and authority to enter into, execute, deliver, and be bound by this Agreement and that the execution and delivery of this Agreement and the performance by Seller of Seller’s obligations under this Agreement, do not breach, and shall not result in a breach or violation of, any agreement to which Seller is a party or by which Seller is bound.
(b) Seller is the owner of all or has the right to (i) license Buyer the rights to use the ChromaDex Trademarks and NR Trade Secrets as specifically set forth in this Agreement, and (ii) grant Buyer the rights to develop, manufacture, and sell the Approved Products using the patents listed in Exhibit F on the terms set forth in this Agreement;
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(c) All patents that are necessary for Buyer to use the NR Product to be supplied to Buyer in the development, manufacture, promotion, importation, marketing, distribution and sale of Approved Products are set forth in Exhibit F;
(d) Seller has not received any notice regarding the NR Product, including written notice, alleging any infringement by Seller of any intellectual property rights of a third party;
(e) To the best of Seller’s knowledge after due diligence and reasonable investigation, neither Seller, its Affiliates or any person employed thereby directly in the performance of Seller’s obligations under this Agreement has been debarred under Section 306(a) or (b) of the Federal Food, Drug and Cosmetic Act, and no debarred person will in the future by employed by Seller. If, at any time after execution of this Agreement, Seller becomes aware that Seller, any of its Affiliates or any person employed thereby is, or is in the process of being, debarred, Seller will so notify NHSc immediately.
(f) No NR Product at the time of shipment by Seller will be adulterated or misbranded within the meaning of the Federal Food, Drug and Cosmetic Act, as amended from time to time, or regulations promulgated thereunder, as such law or regulation is constituted and in effect at the time of any such shipment and no NR Product at the time of shipment will be considered to be an article that may not, under the provisions of §§ 404, 505 or 512 of the Federal Food, Drug and Cosmetic Act, be introduced into interstate commerce.
(g) All NR Product at the time furnished to Buyer and for the full period of the expected shelf life of such products will be in full compliance with the Specifications, the quality standards set forth in Exhibit G – Quality Standards (the “Quality Standards”) (Exhibit G is hereby incorporated herein in full by this reference), applicable Law and other requirements of this Agreement as long as Buyer’s errors, acts, omissions, or other conduct do not cause directly or indirectly the NR Product to become out of compliance with the Specifications, fail to meet the Quality Standards or violate applicable law and other requirements of this Agreement.
(h) Seller’s manufacturing, laboratory, and packaging facilities are and will at all times remain in material compliance with Good Manufacturing Practices, including but not limited to those set forth in 21 C.F.R. § 110 et seq., to the extent applicable to the manufacture and packaging of the NR Product, and all NR Product furnished to Buyer will be manufactured in accordance with Good Manufacturing Practices.
(i) All NR Product at the time furnished to Buyer will not have been damaged during storage and handling and will otherwise be wholesome, fit for human consumption, and in first-class merchantable condition.
(j) Seller has and will maintain during the Term the necessary expertise, equipment, personnel, facilities, equipment and inventory of raw materials and finished product to supply the NR Products as agreed upon in all Purchase Orders accepted by Seller (unless Seller is unable to due to a Force Majeure Event).
(k) Except as otherwise advised by Seller in writing to Buyer on or prior to the Effective Date, there is no demand, claim, suit, action, arbitration, and/or other proceeding, whether pending or threatened (and for which any basis exists), that jeopardizes (or could jeopardize) Seller’s ability to enter into this Agreement or perform any of its obligations hereunder.
(l) It will at all times during the Term comply with all applicable laws, rules, orders, guidelines and regulations, including the ones regarding the following matters: anticorruption, immigration, antidiscrimination, tax, environment, data protection, food safety and quality, and export control, import, customs and economic sanctions.
(m) Have a quality management system in accordance with Nestlé’s reasonable requirements of which Seller is advised of and agrees to in advance in writing.
16.2LIMITED WARRANTY AND DISCLAIMER OF ALL OTHER WARRANTIES.
(i)SELLER WARRANTS THAT THE NR PRODUCT SOLD HEREUNDER, AS DELIVERED TO BUYER, CONFORMS, TO ITS SPECIFICATIONS; (a) EXCEPT FOR THE SPECIFIC WARRANTIES CONTAINED IN THIS PARAGRAPH AND ELSEWHERE IN THE AGREEMENT, SELLER HEREBY EXPRESSLY DISCLAIMS ANY AND ALL OTHER WARRANTIES, EXPRESS OR IMPLIED OR STATUTORY, WITH RESPECT TO THE NR PRODUCT OR OTHERWISE UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED
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TO, THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. SELLER HAS NOT MADE ANY RECOMMENDATION TO BUYER REGARDING THE USE OR SUBSEQUENT SALE OF THE NR PRODUCT. EXCEPT FOR ANY LIABILITIES RELATING TO NEGLIGENCE, RECKLESSNESS, WILLFUL MISCONDUCT, OR BREACH OF THIS AGREEMENT BY SELLER (OR ITS AFFILIATES OR CONTRACTORS) BUYER ASSUMES ALL OTHER RISKS AND LIABILITIES FOR ANY LOSS, DAMAGE OR INJURY TO PERSONS OR PROPERTY RESULTING FROM THE USE OR SUBSEQUENT SALE OF THE NR PRODUCT, EITHER ALONE OR IN COMBINATION WITH OTHER INGREDIENTS; AND (b) BUYER WARRANTS TO SELLER THAT BUYER HAS SATISFIED ITSELF THAT THE NR PRODUCT AND THE PURPOSE FOR WHICH IT WILL BE USED AND/OR SOLD IS IN COMPLIANCE WITH THE APPLICABLE LAWS AND REGULATORY REQUIREMENTS OF THE RELEVANT COUNTRIES.
(ii)ALL CLAIMS MADE WITH RESPECT TO THE NR PRODUCT SHALL BE DEEMED WAIVED BY BUYER UNLESS MADE IN WRITING.
16.3Buyer’s Representations and Warranties. Buyer expressly warrants that it has all necessary legal capacity, right, power, and authority to enter into, execute, deliver, and be bound by this Agreement and that the execution and delivery of this Agreement and the performance by Buyer of Buyer’s obligations under this Agreement, do not breach, and shall not result in a breach or violation of, any agreement to which Buyer is a party or by which Buyer is bound. Except as otherwise advised by Buyer in writing to ChromaDex on or prior to the Effective Date, there is no demand, claim, suit, action, arbitration, and/or other proceeding, whether pending or threatened (and for which any basis exists), that jeopardizes (or could jeopardize) Buyer’s ability to enter into this Agreement or perform any of its obligations hereunder. Buyer further represents and warrants that Buyer and its Affiliates, shall assume full responsibility for all acts, errors, omissions, misrepresentations, and negligence by Buyer arising out of or relating to: (i) any and all uses of the rights granted herein, (subject to any ChromaDex liability specifically set forth in this Agreement or subject to Seller’s breach of this Agreement, gross negligence or willful misconduct); and (ii) the development, manufacture, distribution, sale and advertisement of the Approved Products. Without in any way limiting the foregoing, Buyer represents and warrants that: (i) Buyer will obtain all regulatory compliance required by its actions under this Agreement; (ii) Buyer will conduct all actions under this Agreement in compliance with all applicable laws, rules, statutes, and regulations; and (iii) Buyer will ensure that none of the Approved Products violate any intellectual property or any other right of a third party.
17.LIMITATION OF LIABILITY.
EXCEPT FOR LIABILITY RESULTING FROM A PARTY’S INDEMNIFICATION OR CONFIDENTIALITY OBLIGATIONS OR MISAPPROPRIATION OF THE OTHER PARTY’S TRADE SECRETS AS SET FORTH IN SECTIONS 13 AND 26 OR INFRINGEMENT OF A PARTY’S INTELLECTUAL PROPERTY, IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY LOST REVENUE OR LOST PROFITS OR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES ARISING UNDER THIS AGREEMENT OR OTHERWISE INCLUDING, WITHOUT LIMITATION, ANY BUSINESS INTERRUPTION OR DAMAGE TO BUSINESS REPUTATION, REGARDLESS OF THE THEORY UPON WHICH ANY CLAIM MAY BE BASED, INCLUDING ANY TORT OR STATUTORY CAUSES OF ACTION. EXCEPT FOR LIABILITY RESULTING FROM INDEMNIFICATION OR CONFIDENTIALITY OBLIGATIONS OR WILLFUL MISCONDUCT OR GROSS NEGLIGENCE, IN NO EVENT, SHALL SELLER’S AGGREGATE LIABILITY UNDER THIS AGREEMENT EXCEED THE AMOUNT OF TWO (2) TIMES THE SALES FEES PAYABLE TO SELLER BY BUYER HEREUNDER IN THE TWELVE (12) MONTH PERIOD IMMEDIATELY PRECEDING THE EVENT GIVING RISE TO SELLER’S LIABILITY. THE FOREGOING LIMITATIONS OF LIABILITY SHALL BE ENFORCED TO THE MAXIMUM EXTENT PERMITTED UNDER APPLICABLE LAW. BOTH PARTIES UNDERSTAND AND AGREE THAT THIS LIMITATION OF LIABILITY ALLOCATES RISK OF NONCONFORMING GOODS BETWEEN THE PARTIES AS AUTHORIZED BY THE UNIFORM COMMERCIAL CODE AND OTHER APPLICABLE LAW. THE PRICES SET FORTH HEREIN
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REFLECT THIS ALLOCATION OF RISK AND THE LIMITATIONS OF LIABILITY, INCLUDING THE EXCLUSION OF SPECIAL, INDIRECT, CONSEQUENTIAL AND INCIDENTAL DAMAGES, IN THIS AGREEMENT.
18.Intellectual Property Rights.
18.1Rights Retained by Seller. Except as otherwise explicitly set forth in this Agreement, the sale of NR Product covered by this Agreement shall not confer upon Buyer any license or right under any patents, copyrights, trade secrets or other proprietary information owned or controlled by Seller, or the right to otherwise utilize such proprietary information unless in strict accordance with all of the terms hereof, it being specifically understood and agreed that all such rights, including, without limitation, all intellectual property rights contained therein and pertaining thereto, are reserved exclusively to Seller. Seller hereby grants Buyer a fully paid-up, royalty-free, exclusive or co-exclusive (in accordance with Sections 3.3 and 3.4 of this Agreement), non-sublicensable (other than to its Affiliates) right and license to use all current and future intellectual property rights, clinical and non-clinical data, records, formulations, data on new therapeutic uses and know-how, in respect of NR Product (the “NR Product IP Rights”).
(i)Patent Filing and Prosecution. From time to time throughout the Term, the Parties will regularly confer and review their solely and jointly owned and licensed existing, now pending, and being developed during the Term intellectual property rights that claim NR Product, products containing NR Product, or any uses thereof and together consider strategies that would enhance the value of those rights in the context of NR Product, products containing NR Product, or uses thereof.
(ii)Seller’s New Intellectual Property Rights. Any new intellectual property rights created solely by ChromaDex during the Term hereof, will as between the Parties be owned solely and exclusively by ChromaDex. Any such new intellectual property rights and any new intellectual property rights licensed to ChromaDex during the Term, to the extent that they are directed to Medical Nutrition or Functional Food and Beverages products containing NR Product or uses thereof shall not, however, be used adversely against Buyer by ChromaDex in contradiction to the terms and conditions detailed herein.
(iii)Ownership of New Jointly Created Intellectual Property Rights. Any new intellectual property rights jointly created by ChromaDex and Buyer during the Term shall be jointly and equally owned by ChromaDex and Buyer (subject to the clarification in Section 18.1 (iv) below).
(iv)Buyer’s New Intellectual Property Rights. Any new intellectual property rights created during the Term solely by Buyer shall be owned solely and exclusively by Buyer, including, for purposes of clarification, any new intellectual property rights in respect of NR Product in combination with other active ingredients or uses thereof and improved NR formulations (the “New IP”). Buyer agrees that it will not enforce its intellectual property rights in a legal proceeding against Seller for New IP pertaining or relating to the use or inclusion of NR in Functional Food and Beverages or Medical Nutrition that is necessary by Seller in order for Seller to achieve Technical Feasibility for a commercial launch of a Functional Food and Beverage or Medical Nutrition product, subject to Seller’s compliance with the exclusivity and co-exclusivity rights granted to Buyer under this Agreement.
(v)No Right By Buyer to Challenge ChromaDex’s Intellectual Property Rights. Buyer hereby acknowledges and agrees that Buyer will not subvert, diminish, in any way challenge in any forum, including, but not limited to, administrative proceedings, or assert any rights in the ChromaDex Trademarks, ChromaDex Trade Secrets, NR, NR Product, products containing NR Product, or uses thereof, or any other NR intellectual property, including ChromaDex owned or licensed patents or patent applications. If Buyer violates or otherwise breaches this non-challenge clause, Seller shall have the right to terminate Buyer’s rights under this Agreement, provided however, in no event shall such termination diminish Seller’s rights under this Section 18.1.
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19.Waiver and Severability. No claim or right arising out of a breach of this Agreement can be discharged in whole or in part by a waiver or renunciation of the claim or right unless the waiver or renunciation is in writing signed by the aggrieved Party. If any term, covenant, warranty, remedy or condition of this Agreement, or the application thereof to any person or circumstance shall, to any extent, be held or deemed invalid, illegal or unenforceable, such term, covenant, warranty, remedy, or condition shall be conformed to a valid, legal, and enforceable provision that best accomplishes the original intent of the Parties, and the remainder of this Agreement or the application of such term, covenant or provision, to persons or circumstances other than those to which it is held invalid, illegal or unenforceable, shall not be affected thereby, and each remaining term, covenant or provision of this Agreement shall be deemed valid, legal and shall be enforced to the fullest extent permitted by law.
20.Force Majeure. A Party shall have no liability or obligation to the other party of any kind, including, but not limited to, any obligation to deliver NR Product or to make payment or accept delivery of NR Product, arising from any delay or failure to perform all or any part of this Agreement as a result of causes, conduct or occurrences beyond such Party’s reasonable control, including, but not limited to, fire, flood, earthquake, lightning, storm, accidents, act of war, terrorism, civil disorder or disobedience, act of public enemies, , acts or failure to act of any state, federal or foreign governmental or regulatory authorities, labor disputes or strikes, (each a “Force Majeure Event”). During a Force Majeure Event Seller may allocate its available supply among its customers in a manner determined by Seller to be fair and reasonable.
21.Indemnification and Insurance.
21.1To the fullest extent permitted by law, Buyer shall defend, indemnify and hold Seller and its affiliates, successors, heirs, and assigns and its and their respective officers, directors, employees, and agents (the "Seller Indemnitees"), harmless from any and all claims, damages, demands, suits, causes of action, controversy, judgements, liabilities, fines, regulatory actions, seizures of NR Product, losses, costs and expenses (including, but not limited to attorneys’ fees, expert witness expenses and litigation expenses) (hereinafter “Claim”), arising from or in connection with any Claim asserted by a third party against Seller (i) for any damage, environmental liability, patent or intellectual property infringement caused by Buyer’s use, modification or alteration of the NR Product, or any combination of the NR Product in connection with Buyer’s product or any third party’s product, or (ii) any injury, death, loss, property damage, delay or failure in delivery of Seller’s NR Product or any other Claim for injuries or damage to the general public who consumed the Approved Product (unless due solely and exclusively to a Claim arising from the NR Product), or (iii) any alleged or actual act, error, omission, or negligence by Buyer or Buyer’s Affiliates’ agents, employees, or representatives in connection with the NR Product, Approved Products, or this Agreement, whether in tort, contract, breach of warranty or otherwise, relating to this Agreement, the business relationship between the Parties, Buyer’s development, manufacture, distribution, promotion, and sale of the Approved Products, or Buyer’s breach of this Agreement (including breach of Buyer’s representations and warranties). Notwithstanding the foregoing, Buyer has no indemnity obligation to Seller to the extent that any Claims result directly from the negligence or willful misconduct of Seller or a material breach of this Agreement by Seller.
21.2To the fullest extent permitted by law, Seller shall defend, indemnify and hold Buyer and its affiliates, successors, heirs, and assigns and its and their respective officers, directors, employees, and agents (the "Buyer Indemnitees") harmless from any and all Claims, arising from or in connection with any Claim asserted by a third party against Buyer for (i) any patent or other intellectual property right infringement in connection with the NR Product (provided that such alleged infringement does not arise from (A) the combination of the NR Product with other ingredients or (B) Buyer’s intellectual property, including New IP), or (ii) any alleged or actual act, error, omission, or negligence by Seller or Seller’s Affiliates’ agents, employees, or representatives in connection with this Agreement whether in tort, contract, breach of warranty or otherwise, relating to this Agreement, the business relationship between the Parties, the NR Product provided hereunder, or Seller’s breach of this Agreement, or (iii) any use of the ChromaDex
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Trademarks. Notwithstanding the foregoing, Seller has no indemnity obligation to Buyer to the extent that any Claims result directly from the negligence or willful misconduct of Buyer or if such claims stem from Buyer’s acts or use which is not in accordance with the rights and requirements of Buyer herein.
21.3Indemnification Procedures. Each Party agrees to provide the other Party with prompt written notice of any claim, suit, action, demand, or judgment for which indemnification is sought under this Agreement. The indemnifying Party agrees, at its own expense, to provide attorneys reasonably acceptable to the indemnified Party to defend against any such claim. The indemnified Party shall cooperate fully with the indemnifying Party in such defense and will permit the indemnifying Party to conduct and control such defense and the disposition of such claim, suit, or action (including all decisions relative to litigation, appeal, and settlement); provided, however, that the indemnified Party shall have the right to retain its own counsel, at the expense of such indemnifying Party, if representation of such the indemnified Party by the counsel retained by the indemnifying Party would be inappropriate because of actual or potential differences in the interests of such indemnified Party and any other party represented by such counsel. The indemnifying Party agrees to keep the indemnified Party informed of the progress in the defense and disposition of such claim and to consult with the indemnified Party with regard to any proposed settlement.
21.4Insurance. The Parties agree, for the Term of this Agreement, to maintain a program of insurance or self-insurance at levels sufficient to satisfy its obligations as set forth in this Agreement, which shall include commercial general liability insurance with limits of at least $[***] per occurrence and product liability insurance with an aggregate limit of at least $[***], and that such insurance coverage lists the other party hereto as additional insureds. Each party shall continue to maintain such insurance or self-insurance after the expiration or termination of this Agreement during any period in which Buyer or any Affiliate continues (i) to make, use, or sell an Approved Product under the terms of this Agreement and thereafter for a period of [***].
22.Relationship of the Parties. The relationship between Seller and Buyer shall be solely that of independent contractors and neither Party, its agents and employees, shall under no circumstances be deemed the employees, partners, joint venturers, franchisees, agents or representatives of the other Party. Neither Party shall represent itself as the agent or legal representative of the other Party for any purpose whatsoever or hold itself out contrary to the terms of this Section, and neither Party shall have the right to create or assume any obligation of any kind, express or implied, for or on behalf of the other Party in any way whatsoever.
23.Assignment and Modification. The rights and obligations of Buyer under this Agreement shall not be assignable or delegable without the prior written consent of Seller except in the event of assignment to an Affiliate of Buyer (which does not require consent of the Seller, but does require reasonable advance written notification). Any attempted assignment or delegation in violation of the foregoing shall be void. Seller may assign this Agreement, or delegate its duties hereunder, in whole or in part, without the written consent of the Buyer (but with advance written notification) (a “Transfer”) to an Affiliate (other than in connection with a Change of Control). In addition, Seller may also Transfer this Agreement to an Affiliate or a third party in connection with a Change of Control (a “Transfer Event”), subject to the requirements set forth herein. If Seller is contemplating entering into a Transfer Event with a company that sells products to consumers directly competitive with the Approved Products in the then existing exclusive and co-exclusive Territories or any other then existing NHSc brands (a “Restricted Transferee”), Seller shall notify Buyer in advance in writing and Buyer shall have a [***] right of first negotiation from the date of such notification to negotiate in good faith terms by which Seller would complete a Transfer Event with Buyer. If after such [***] of good faith negotiations, no agreement is reached, Seller shall be entitled to Transfer this Agreement to a Restricted Transferee upon at least [***] written notice thereof to Buyer; provided that in such event Buyer shall have the right in its sole discretion to terminate this Agreement without penalty or liability. All other assignments or delegations by Seller require the advance written consent of Buyer, such consent not to be unreasonably withheld, conditioned, or delayed. This Agreement shall not be modified, altered or amended in any respect except by a writing signed by the Parties. Any variation, modification or addition to the terms set forth in this Agreement shall be considered a material modification and shall not be considered part of this Agreement unless it is amended in accordance with the foregoing.
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24.Governing Law; Venue; Attorneys’ Fees. This Agreement and all claims and causes of action shall be governed by and subject to the internal laws (exclusive of the conflicts of law provisions) and decisions of the courts of the State of Delaware. The sole and exclusive venue for all claims and causes of action between the Parties shall be the state or federal court located in the State of Delaware, provided that either Party may, at any time, seek injunctive or other equitable relief from any court of competent jurisdiction. The prevailing Party in any legal action shall be entitled to recover its reasonable attorneys’ fees, in addition to any other remedies available to such Party at law or in equity.
25.Foreign Corrupt Practices Act. Each of the Parties (including its officers, directors, employees and agents) shall not pay, offer, promise or authorize the payment, directly or indirectly, of any monies or anything of value to any official or employee of any foreign government, including, without limitation, any government-owned or controlled entity, or of a public international organization, or any political party, party official, or candidate for political office, for the purpose of improperly inducing or rewarding favorable treatment or advantage in connection with this Agreement.
26.Confidentiality and Publicity. This Confidentiality and Publicity provision shall supersede in its entirety the Mutual Non-Disclosure Agreement between the Parties dated April 7, 2017. The Parties will be making certain general business information and know-how that is not generally known by the public available to the other Party, or a Party may have access to Confidential Information of the other Party orally and/or in writing. “Confidential Information” shall include, without limitation, any intellectual property, trade secrets, technical information, training materials, control documents, workflows and relevant documentation, materials, data, any other secret, sensitive or confidential material related to the business generally, business technology, business strategies, accounting, financial information, contracts, agreements, files, records, documents, techniques, expertise, marketing concepts, diagrams or concepts relating to product plans or designs, products, product specifications, systems, software code, formulae, practices, processes, customers, projects or information of any type whatsoever, in whatever form or media, whether or not marked as “confidential” or “proprietary,” of a Party that is disclosed to or becomes known by the other Party, including all the records of the disclosing Party created, accessed, viewed, learned or obtained by the receiving Party pursuant to this Agreement and the transactions contemplated hereby and which is not generally known to the public or throughout the trade, or which could reasonably be expected to be valuable to the disclosing Party or its Affiliates or a competitor of any of the disclosing Party or its Affiliates. Confidential Information shall also include the terms of this Agreement. For purposes of clarification only and in no way intending to limit or otherwise revise the obligations in this Section, these obligations apply to Confidential Information disclosed to the other Party pursuant to this Agreement and the transactions contemplated hereby prior to the Effective Date. The Parties agree to refrain at all times from disclosing the other Party’s Confidential Information to others or from using any such Confidential Information except for the benefit of the disclosing Party. The Parties further agree to refrain from any other acts that could tend to destroy the value of the Confidential Information to the disclosing Party.
Without in any way intending to limit the forgoing the Parties shall:
(a)not access or use Confidential Information other than as necessary to exercise its rights or perform its obligations under and in accordance with this Agreement;
(b)not disclose or permit access to Confidential Information;
(c)safeguard the Confidential Information from unauthorized use, access or disclosure using at least the degree of care it uses to protect its most/similarly sensitive information and in no event less than a reasonable degree of care;
(d)promptly notify the other Party in writing of any unauthorized use or disclosure of Confidential Information and use its best efforts and cooperate with such disclosing Party to prevent further unauthorized use or disclosure; and
(e)ensure its representatives’ compliance with, and be responsible and liable for any of its representatives’ non-compliance with, the terms of this Section.
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Neither NHSc nor ChromaDex will, without the prior written consent of the other Party, issue any statement or communication to the public, to the press or any third party regarding the transactions detailed herein, or otherwise disclose to any third party the existence of this Agreement or any other communication between the parties with respect to the transactions detailed herein.
This Section shall survive expiration or termination of this Agreement.
27.Dispute Resolution.
27.1Mandatory Procedures. The Parties agree that any dispute arising out of or relating to this Agreement shall be resolved solely by means of the procedures set forth in this Section, and that such procedures constitute legally binding obligations that are an essential provision of this Agreement. If either Party fails to observe the procedures of this Section, as may be modified by their prior written agreement, the other Party may bring an action for specific performance of these procedures in any court of competent jurisdiction.
27.2Equitable Remedies. Although the procedures specified in this Section are the sole and exclusive procedures for the resolution of disputes arising out of or relating to this Agreement, either Party may seek a preliminary injunction or other provisional equitable relief pursuant to Section 30 if, in its reasonable judgment, such action is necessary to avoid irreparable harm to itself or to preserve its rights under this Agreement.
27.3Dispute Resolution Procedures.
27.3.1Exclusive Procedures. Any controversy, claim, or dispute arising out of or relating to this Agreement including, without limitation, the interpretation, performance, formation, validity, breach (including, without limitation, alleged violations of state or federal statutory or common law rights or duties) or enforcement of this Agreement, and further including any such controversy, claim, or dispute against or involving any officer, director, agent, employee, affiliate, successor, predecessor or assign of a party to this Agreement (collectively, a “Dispute”) shall be resolved according to the procedures set forth in this Section which shall constitute the sole and exclusive Dispute resolution mechanism to resolve all Disputes and no other procedure may be used with the sole exception that a party need not comply with the terms herein before filing a claim for equitable relief. Each Party's promise to resolve all Disputes as set forth herein is given in consideration for the other Party's like promise.
27.3.2Confidentiality. Without limiting the confidentiality obligations referred to elsewhere in this Agreement, the details and/or existence of any Dispute, any informal meetings, and any proceedings conducted hereunder, including without limitation any discovery taken in connection therewith, shall be kept strictly confidential and shall not be disclosed or discussed with any third party (excluding a party's attorneys, accountants, and other agents and representatives, as reasonably required in connection with any Dispute resolution procedure hereunder and provided that they sign a confidentiality agreement at least as restrictive as this Section if they are not attorneys), except as otherwise required by laws or rule of any securities exchange on which such party's securities are traded. All offers, promises, conduct, and statements, whether oral or written, made in the course of the resolution of any Dispute by the parties, their agents, employees, experts, and attorneys, shall be confidential, privileged, and inadmissible for any purpose, including impeachment, in any litigation, arbitration, or other proceeding, except that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use by either Party.
27.3.3Good Faith. With regard to any Disputes between ChromaDex and Buyer, the Parties agree to work together in good faith to resolve all disputes promptly.
27.3.4Informal Dispute Resolution. Either Party may demand, in writing, that each Party’s management representatives meet within [***] at such place as ChromaDex may reasonably designate to resolve the Dispute. No third party shall have authority to consider or resolve any Dispute that is not first the subject of informal Dispute resolution pursuant to this Section. The Parties or their representatives with full authority to settle the Disputes at issue shall attend all meetings.
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27.3.5Mediation. If the Parties do not resolve the Dispute within [***] of the date of the first meeting between management representatives (the “Informal Dispute Resolution Deadline”), ChromaDex and NHSc agree to mediate the Dispute within [***] of the Informal Dispute Resolution Deadline and at such place in the State of Delaware as ChromaDex may designate with a mutually agreed upon mediator. If the Parties cannot agree upon the selection of a mediator, the mediator will be chosen from the list of certified mediators maintained by a court having jurisdiction over this Agreement within [***] of receiving such list. The Parties agree to continue to work in good faith to resolve the Dispute prior to the date upon which the mediation is scheduled to take place. If the Parties agree on a resolution for the Dispute prior to the scheduled mediation date, the mediation shall be cancelled. The Parties agree to share the cost of any independent mediator engaged to assist the Parties in resolving their differences. The mediator shall be a person familiar with complex business transactions and litigation in the nutraceutical industry, unless the Parties agree otherwise in writing. If either Party fails to mediate the Dispute within [***] of the Informal Dispute Resolution Deadline, such Party shall be deemed to have waived its right to demand mediation and the other Party may, in its sole discretion, proceed directly to arbitration.
27.3.6Arbitration. In the event the Dispute is not resolved through mediation, then the Dispute shall be fully and finally adjudicated by binding arbitration to the fullest extent allowed by law, but only if the arbitration is properly commenced within the time allowed for similar legal action to be commenced in accordance with the applicable statute of limitations; otherwise, the Dispute is waived. Except as provided herein or by agreement of all parties, the arbitration shall be administered by JAMS or its successors (“JAMS”) and shall be conducted according to the JAMS Comprehensive Arbitration Rules and Procedures in effect at the time the arbitration is initiated or, if JAMS is no longer in existence, then the arbitration shall be administered by the American Arbitration Association or its successor (the “AAA”) and conducted in accordance with the AAA Commercial Arbitration Rules in effect at that time (the “Rules”). The arbitration shall be conducted as expeditiously and economically as reasonably practicable.
27.3.7The arbitration shall be conducted by one arbitrator (the “Arbitrator”). Unless all parties to the arbitration agree, the Arbitrator shall be a lawyer admitted to practice in at least one (1) State of the United States and need not be on the roster of JAMS or the AAA. The Arbitrator shall be selected as follows: If all parties to the Dispute do not agree upon the Arbitrator within [***] after commencement of the arbitration, then any party may initiate the following selection process by written notice to each other party. Within [***] after such written notice, each side to the Dispute shall simultaneously transmit to each other side a list of four (4) persons qualified to serve as the Arbitrator (the “Candidates”). No party shall nominate a Candidate whom that party knows or reasonably believes to have a conflict of interest rendering the Candidate unable to serve as the Arbitrator. If any single Candidate appears on the list of each side then that person shall be appointed as the Arbitrator. If more than one Candidate appears on the list of each side, then one of those Candidates shall be selected randomly and that person shall be appointed as the Arbitrator. If no Candidate appears on the list of each side then, within [***] after the initial exchange of lists, each side may strike one Candidate from the list of each other side and rank all remaining Candidates in order of preference (with “1” being the most preferable Candidate), and the ranked lists shall be simultaneously exchanged. The Candidate with the lowest total number of points shall be appointed as the Arbitrator. In the event of a tie, one of the Candidates with the lowest total number of points shall be selected randomly and that person shall be appointed as the Arbitrator. If the person selected as the Arbitrator declines to serve or becomes unwilling or unable to serve after selection or appointment, or the administrator declines to appoint that person as the Arbitrator, then the Candidate with the next lowest total of points shall be appointed as the Arbitrator. If any party to the arbitration fails to timely participate in the foregoing selection process then the administrator shall select and appoint the Arbitrator pursuant to the Rules, except that each recalcitrant party shall be excluded from that selection process.
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27.3.8The Arbitrator shall entertain any demurrer, motion to strike, motion for judgment on the pleadings, motion for complete or partial summary judgment, motion for summary adjudication, or any other dispositive motion consistent with Delaware or United States federal rules of procedure, as applicable.
27.3.9The exchange of information in the arbitration shall be governed by the Rules except as follows: (a) no side shall take the deposition of more than [***] individuals (including the use of corporate, “persons most knowledgeable,” F.R.C.P. 30(b)(6), or similar deposition notices or devices) unless, upon a showing of extraordinary cause, the Arbitrator permits that side to take a limited number of additional depositions; (b) each side shall be entitled to the limited discovery of documents (including electronically stored information) which are directly relevant and material to the Dispute and are produced in response to a request that is narrowly tailored to minimize both the burden and expense of the responding person and the disclosure of confidential, sensitive or financial information; (c) no party shall propound interrogatories or requests for admission unless permitted by the Arbitrator upon a showing of extraordinary cause; and (d) upon the request of any party, the Arbitrator shall weigh the anticipated burden or expense of any requested discovery against its likely benefit, and shall impose any reasonable conditions on that discovery, including, without limitation, allocation of the expense of the discovery to the party seeking it.
27.3.10The Arbitrator shall issue a written award supported by a statement of decision setting forth the Arbitrator’s complete determination of the Dispute and the factual findings and legal conclusions relevant to it (the “Award”). The Award shall be final and binding on the Parties and, if the Award is not fully satisfied within [***] after its issuance, then judgment upon the Award may be entered by any court having jurisdiction thereof or having jurisdiction over the relevant Party or its assets. Each Party to this Agreement irrevocably submits to the personal jurisdiction and venue of a state or federal court of competent jurisdiction in Delaware for any purpose permitted herein.
27.3.11The administrative costs of the arbitration, including fees of the Arbitrator, initially shall be split equally between the sides; provided, however, that the Arbitrator may, in his or her discretion, allocate such costs in favor of any prevailing party.
27.3.12If all or any portion of a Dispute is held to be non-arbitrable then that Dispute (or portion thereof) shall be adjudicated by a single referee appointed by a state or federal court of competent jurisdiction in Delaware.
27.3.13Notwithstanding any other provision of this Agreement including, without limitation, any other provision of this Section 27, the Parties may bring suit in any court of competent jurisdiction to enjoin any actual or threatened infringement of any intellectual property rights or any actual or threatened violation of any confidentiality or non-compete, non-solicitation, non-circumvention provisions of this Agreement.
27.4Performance to Continue. Each Party shall continue to perform its undisputed obligations under this Agreement pending final resolution of any dispute arising out of or relating to this Agreement; provided, however, that a Party may suspend performance of its undisputed obligations during any period in which the other Party fails or refuses to perform its undisputed obligations. Nothing in this Section is intended to relieve Buyer from its obligation to make undisputed payments pursuant to the requirements of this Agreement.
27.5Statute of Limitations. The Parties agree that all applicable statutes of limitation and time-based defenses (such as estoppel and laches) shall be tolled while the procedures set forth in Sections are pending. The Parties shall cooperate in taking any actions necessary to achieve this result.
28.Non-Solicitation, Non-Competition, and Non-Circumvention.
28.1 Upon a Triggering Event (defined below), during the Term and for a period of [***] after the Triggering Event, neither Buyer nor any of Buyer’s subsidiaries, Affiliates, principals, agents, representatives, or employees (the “Buyer Parties”) shall without the prior express written consent of ChromaDex directly or indirectly develop, manufacture, market, promote, sell or distribute Functional Food and Beverages or Medical Nutrition product using any NR, or NR Product. For purposes of this Agreement, a “Triggering Event” shall have occurred if (a) Seller terminates this Agreement for any reason permitted under this Agreement; (b) Buyer
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terminates this Agreement pursuant to Section 15.3.1 or 15.3.2; or (c) Seller terminates any of Buyer’s rights pursuant to the NA FF&B Termination, NA MN Termination, Annual Minimum Royalty Termination, or a Sub-Territory Termination, provided however in such event, Buyer’s obligations contained in this paragraph shall only apply to the terminated Sub-Territory or Approved Product Category.
28.2 During the Term and for a period of [***] after the termination of this Agreement, neither Buyer nor any of the Buyer Parties shall, without the prior express written consent of the ChromaDex, directly or indirectly:
(a) Solicit or induce or attempt to solicit or induce any vendor, employee, sales representative, agent, or consultant of ChromaDex to terminate or adversely alter their relationship, engagement, employment, representation, or other association with ChromaDex; or
(b) Contract with, or otherwise become involved in any transaction with ChromaDex’s manufacturers, without ChromaDex’s explicit advance written permission (unless Buyer has a pre-existing relationship with such manufacturer prior to the Effective Date or wishes to enter into a relationship with such manufacturer for other products unrelated to the Approved Products, in which case the restrictions set forth herein shall not be applicable).
These obligations in this Section are in no way intended to revise or otherwise limit the other restrictions and obligations of Buyer herein, including, but not limited to, those regarding termination.
28.3 During the Term and for a period of [***] after the termination of this Agreement, ChromaDex shall not, without the prior express written consent of the Buyer, directly or indirectly solicit or induce or attempt to solicit (other than general solicitations for hire) or induce any vendor, employee, sales representative, agent, or consultant of Buyer to terminate or adversely alter their relationship, engagement, employment, representation, or other association with Buyer.
29.Notices. Any demand upon or notice to a Party hereunder shall be effective when delivered by hand or when properly deposited in the mails postage prepaid, or sent by electronic facsimile or electronic mail transmission with receipt acknowledged, or delivered to an overnight courier, in each case addressed to the Party at the address shown below or such other address as the Parties may advise in advance in writing.
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If to Seller: ChromaDex, Inc. 10005 Muirlands Blvd., Suite G Irvine, CA 92618 Attention: Legal Department Fax: 949-419-0294
With a Copy to: ChromaDex Corporation 10900 Wilshire Blvd., Suite 650 Los Angeles, CA 90024 Fax: 949-600-8923 |
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Attn: General Counsel
With Another Copy to: Nolan Heimann 16133 Ventura Blvd., Suite 820 Encino, California 91436 Fax: 818-574-5689 Attn: ChromaDex
If to Buyer: Avenue Nestle 55 1800 Vevey Switzerland Email: [***] Attn: General Counsel, Nestlé Health Science |
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30.Injunctive Relief. In addition to all other remedies that ChromaDex may have hereunder, including, without limitation, a claim of money damages, Buyer acknowledges that (a) its failure (except as otherwise provided herein) to cease the manufacture, sale, distribution, advertising, or promotion of the Approved Products covered by this Agreement or any class or category thereof at the termination or expiration of this Agreement; (b) its threatened or actual unauthorized use of the rights granted hereunder, whether in whole or in part; (c) its threatened or actual breach of the confidentiality provisions in the ChromaDex and NHSc NDA referred to herein; or (d) its threatened or actual breach of any other material term of this Agreement may result in immediate and irreparable damage to ChromaDex and to the rights of any subsequent licensee. Buyer acknowledges and admits that there is no adequate remedy at law for such failures listed in this Section and that in the event of such threatened or actual failure, ChromaDex shall be entitled to equitable relief by way of temporary and permanent injunctions and such other and further relief as any court of competent jurisdiction may deem just and proper.
In addition to all other remedies that Buyer may have hereunder, including, without limitation, a claim of money damages, Seller acknowledges that; (a) its threatened or actual breach of the confidentiality provisions contained in Section 26 herein; or (b) its violation of Buyer’s exclusivity or Buyer’s Co-Exclusivity (as set forth in Sections 3.3 and 3.4, respectively) still in effect, may result in immediate and irreparable damage to Buyer. Seller acknowledges and admits that there is no adequate remedy at law for the violations set forth in the preceding sentence and that in the event of such violation, Buyer shall be entitled to seek equitable relief by way of temporary and permanent injunctions and such other and further relief as any court of competent jurisdiction may deem just and proper.
31.Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective permitted successors and assigns.
32.Section and Other Headings; Number; Construction of Language. The section and other headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Words used in this Agreement in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise. The language in all parts of this Agreement is intended by the parties to be interpreted simply, according to its fair meaning, and not strictly for or against ChromaDex or Buyer regardless of which party drafted this Agreement. The parties hereby agree and acknowledge that this Agreement is a document negotiated by the parties, which are sophisticated entities and fully understand the meaning of the terms and conditions of this Agreement.
33.Attorney Representation. In the negotiation, preparation and execution of this Agreement, each Party has been represented by, or has been afforded the opportunity to consult with an attorney of such Party’s own choosing prior to the execution of this Agreement and has been advised that it is in such Party’s best interest to do so. The Parties have read this Agreement in its entirety and fully understand its terms and provisions. The Parties have executed this Agreement freely, voluntarily and without any coercion whatsoever, they accept all terms, conditions and provisions hereof. The Parties further agree that any rule or construction to the effect that ambiguities are to be resolved against the drafting Party shall not apply in the interpretation of this Agreement or any amendments.
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34.Entire Agreement. This Agreement and any documents referred to herein and any exhibits attached hereto contain and constitute the complete agreement between the Parties with respect to the subject matter hereof. All previous or contemporaneous agreements, representations, warranties, promises and conditions relating to the subject matter of this Agreement are superseded by this Agreement.
35.Expenses. Except as otherwise expressly provided in this Agreement, whether or not the transactions contemplated hereby are consummated, each Party shall pay its own costs and expenses incurred in connection with the negotiation, execution and closing of this Agreement and the transactions contemplated herein.
36.Survival. All obligations that by their nature should survive the termination of this Agreement shall so survive.
37.Counterparts. This Agreement may be executed in counterparts, each of shall constitute an original, whether actual original or a copy, and all of which shall constitute one and the same instrument.
[THE REMAINDER OF THIS PAGE HAS BEEN
LEFT BLANK INTENTIONALLY –
SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Parties have caused this Supply Agreement to be executed by their duly authorized representatives.
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Buyer
NESTEC Ltd. | Seller
ChromaDex, Inc. |
Signature: /s/ Claudio Kuoni
Name: Claudio Kuoni
Title General Counsel
Date: 19 December 2018
|
Signature: /s/ Robert Fried
Name: Robert Fried
Title: President & CEO
Date: December 19, 2018 |
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Exhibit A – ChromaDex Brand Usage Guidelines
[***]
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Exhibit B - NHSc Brands
[***]
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Exhibit C – NR Product Specification
[***]
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Exhibit D – Prior Existing Obligations
[***]
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Exhibit E – Intentionally Left Blank
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Exhibit F – Applicable Issued Patents and Applicable Filed Patents for the NR Product
[***]
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Exhibit G - Quality Standards
[***]
38 Buyer’s and Seller’s Initials /s/ CK /s/ RF
***Confidential Treatment Requested
197763379 v4
OFFICE LEASE AGREEMENT CALIFORNIA
FLIGHT AT TUSTIN LEGACY TUSTIN, CA
THIS OFFICE LEASE AGREEMENT (the "Lease") is made and entered into as of the 24th day of November, 2021, by and between FLIGHT PHASE I OWNER, LLC, a Delaware limited liability company ("Landlord") and CHROMADEX CORPORATION, a Delaware corporation ("Tenant"). Pursuant to the terms of this Lease, Landlord agrees to lease the Premises (hereinafter defined) to Tenant and Tenant agrees to lease the Premises from Landlord. The Lease includes the following exhibits and attachments: Exhibit A (Outline and Location of Premises), Exhibit B (Expenses and Taxes), Exhibit C (Work Letter), Exhibit D (Building Rules and Regulations), Exhibit E (Additional Provisions), Exhibit F (Intentionally Omitted), Exhibit G (Statement of Tenant Regarding Lease Commencement), Rider No. 1 (Extension Option Rider), Rider No. 2 (Fair Market Rental Rate), and Rider No. 3 (Options in General).
1.Basic Lease Information.
1.01"Building" shall mean the building located at 1735 Flight Way, Tustin, California, which Building is included within the multi-building office and retail project commonly known as FLIGHT at Tustin Legacy (the "Project"). As used herein, "Rentable Square Footage of the Building" is deemed to be 93,256 rentable square feet. "Property" shall mean the Building and the parcel(s) of land on which it is located. "Common Areas" shall mean the portion of the Building and Property that are designated by Landlord for the common use of tenants as further described in Section 2.01.
1.02"Premises" shall mean the area shown on Exhibit A to this Lease. The Premises are located on the second (2nd) floor of the Building and known as Suite 200. The "Rentable Square Footage of the Premises" is deemed to be 7,799 square feet.
1.03"Base Rent":
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Period or Months of Term | Annual Base Rent | Monthly Base Rent | Monthly Base Rent per Rentable Square Foot of the Premises |
1-12 | $308,840.40 | $25,736.70* | $3.30 |
13-24 | $318,199.20 | $26,516.60* | $3.40 |
25-36 | $327,558.00 | $27,296.50 | $3.50 |
37-48 | $337,852.68 | $28,154.39 | $3.61 |
49-60 | $347,211.48 | $28,934.29 | $3.71 |
61-72 | $358,442.04 | $29,870.17 | $3.83 |
*Subject to abatement as set forth in Exhibit E of the Lease. |
1.04"Tenant's Pro Rata Share": 8.36% of the Building (7,799 square feet within the Premises / 93,256 square feet within the Building) and 1.71% of the Project (7,799 square feet within the Premises / 456,740 modified Project square feet excluding the "Food Hall" and Project conference center). Tenant shall pay Tenant's Pro Rata Share of Taxes and Expenses in accordance with Exhibit B of this Lease.
1.05Intentionally Omitted.
1.06"Term": A period of seventy-two (72) full calendar months. The Term shall commence on July 1, 2022 (the "Commencement Date") and shall expire on June 30, 2028 (the "Expiration Date"), subject to earlier termination, if applicable, in accordance with the terms of this Lease. Tenant shall have one (1) option to extend the Term for an additional period of sixty (60) months, pursuant to and in accordance with the terms and conditions of Rider No. 1, Rider No. 2 and Rider No. 3 attached hereto.
1.07"Security Deposit": $41,114.38.
1.08"Brokers": CBRE on behalf of Landlord and Cushman & Wakefield on behalf of Tenant.
1.09"Permitted Use": General and administrative office purposes, subject to the terms and conditions contained in that certain Quitclaim Deed for Tustin Legacy Cornerstone I – Phase I and Covenants, Conditions and Restrictions Including Environmental Restriction Pursuant to Civil Code Section 1471 dated as of June 29, 2017, that certain Declaration of Special Restrictions for Cornerstone I (Phase 1 Parcel) dated as of June 29, 2017 and that certain Declaration of Covenants, Conditions, Restrictions and Establishment of Easements for The Flight at Tustin Legacy dated as of June 29, 2017, recorded against the Property, as the same may be amended from time to time (collectively, the "Governing Documents").
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1.10"Notice Addresses":
Landlord: Tenant:
FLIGHT PHASE I OWNER, LLC
c/o LPC West, Inc.
19600 Fairchild Road, Suite 100
Irvine, CA 92612
Attention: Property Manager, FLIGHT With a copy to:
FLIGHT PHASE I OWNER, LLC
c/o Alcion Ventures L.P. 53 State Street, 37th Floor Suite 3702
Boston, Massachusetts 02109 Attn: Eugene F. DelFavero
CHROMADEX CORPORATION
10900 Wilshire Boulevard, Suite 600 Los Angeles, CA 90024
With a copy to:
Address for payment of Rent:
FLIGHT PHASE I OWNER, LLC
c/o LPC West, Inc.
19600 Fairchild Road, Suite 100
Irvine, CA 92612
Attention: Property Manager, FLIGHT
1.11"Landlord Work" means the work that Landlord is obligated to perform in the Premises pursuant to the separate work letter agreement (the "Work Letter") attached to this Lease as Exhibit C.
1.12"Parking": Tenant shall purchase a total of thirty-one (31) parking passes for unreserved parking spaces. The monthly cost during the Term for parking shall be as follows (collectively, the "Parking Fee"): (a) for unreserved spaces, (i) $0.00 for the first thirty-six (36) months of the initial Term; and (ii) $50.00 per unreserved parking space per month thereafter; and (b) for reserved spaces rented by Tenant as provided in this Section 1.12 below, $100.00 per reserved parking space per month. Such parking spaces shall also be subject to the payment of Expenses attributable to the parking areas and to the provisions set forth in Section 29. During the Term of this Lease, Tenant shall have the right to permanently convert on a one-to-one basis up to three (3) of its unreserved spaces to reserved spaces at the rate provided above for reserved spaces in a location mutually agreed upon in good faith by Landlord and Tenant. Tenant agrees to pay for such parking passes as Additional Rent (defined in Section 3) under this Lease. Except as set forth in this Section 1.12 and Section 29 herein, the purchase of such parking passes shall be subject to the Rules and Regulations as set forth in Exhibit D to the Lease.
1.13"Guarantor": None.
2.Commencement Date; Possession.
2.01Landlord hereby leases the Premises to Tenant, and Tenant hereby leases the Premises from Landlord, upon all the terms, covenants and conditions contained in the Lease. Tenant acknowledges that Landlord has not made any representation or warranty with respect to the condition of the Premises, the Building or the Project with respect to the suitability or fitness of any of the same for the conduct of Tenant's Permitted Use, its business or for any other purpose. The "Rentable Area" or "rentable square feet" and "Usable Area" or "usable square feet" shall be calculated by Landlord provided, however, that in any case the Rentable Area of the Building (and the applicable buildings of the Project) shall include all of, and, with respect to the Building, the Rentable Area of the Premises shall include a portion of, the square footage of the ground floor common areas located within the Building and the other applicable building(s) of the Project, respectively, and the common area and occupied space of the portion of the Project dedicated to the service of the Building or such other building(s) of the Project, as the case may be. "Common Areas" shall mean the lobby, plaza and sidewalk areas, accessways, Parking Facilities, and the area on individual floors in the Building or other building(s) of the Project, as applicable, whether indoor or outdoor, devoted to corridors, fire vestibules, elevators, foyers, lobbies, electric and telephone closets, restrooms, mechanical rooms, janitor's closets, and other similar facilities for the benefit of all tenants and invitees and shall also mean those areas of the Building or other building(s) of the Project, as applicable, devoted to mechanical and service rooms servicing the Building or other building(s) of the Project, as applicable. Tenant acknowledges that it has reviewed the detail of the Rentable Area and Usable Area of the Premises prior to execution of this Lease and understands and agrees to the methodology. The Common Areas shall be subject to the exclusive management and control of Landlord, and Tenant shall comply with all Rules and Regulations pertaining to the Common Areas. Landlord shall have the right from time to time to designate, and in its reasonable discretion, relocate and limit the use of particular areas or portions of the Common Areas; provided Landlord shall use commercially reasonable efforts to notify Tenant at least five (5) calendar days in advance of any such material relocation or limitation. Landlord shall also have the right, in its reasonable discretion, to close all or any portion of the Common Areas as may, in the reasonable discretion of Landlord, be necessary to prevent a dedication thereof or the accrual of any rights in any person, provided Landlord shall use commercially reasonable efforts to notify Tenant at least five (5) calendar days in advance of any such material closure. Notwithstanding anything to the contrary in this Section 2.01, any such relocation or limitation of use of any Common Areas shall not: (a) have a material adverse effect upon the access to and/or use by Tenant, or Tenant’s suppliers, employees, agents and customers (collectively, “Tenant’s Invitees”) of the Premises or vehicular and/or pedestrian access to the Premises, (b) be materially inconsistent with the rights and obligations of Landlord and Tenant under this Lease; and/or (c) materially increase Tenant’s cost of operating its business in the Premises.
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2.02Subject to Landlord performing any required Landlord Work, the Premises are accepted by Tenant in "AS IS" condition and configuration without any representations or warranties by Landlord.
2.03Within 30 calendar days after the Commencement Date, Tenant shall return an executed Statement of Tenant Regarding Lease Commencement in the form attached hereto as Exhibit G. The Statement of Tenant Regarding Lease Commencement shall be binding upon Tenant unless Tenant objects thereto in writing within such 30 day period.
3.Rent. Upon execution of this Lease, Tenant shall pay to Landlord the sum of $33,243.24 constituting Base Rent and the estimated Tenant’s Pro Rata Share of Taxes and Expenses due and payable by Tenant for the first full calendar month of the Term for which Rent is payable hereunder. Except as otherwise set forth in this Lease, Tenant shall pay Landlord, without any setoff or deduction all Base Rent and Additional Rent for the Term (collectively referred to as "Rent") when due. "Additional Rent" means all sums (exclusive of Base Rent) that Tenant is required to pay Landlord under this Lease, including, without limitation, payments for insurance, repairs and parking and Tenant's Pro Rata Share of Taxes and Expenses. Tenant shall pay and be liable for all rental, sales and use taxes (but excluding income taxes), if any, imposed upon or measured by Rent. Base Rent and recurring monthly charges of Additional Rent shall be due and payable in advance on the first day of each calendar month without notice or demand. All other items of Rent shall be due and payable by Tenant on or before 30 calendar days after billing by Landlord. All Rent payable by Tenant hereunder shall be paid to Landlord in lawful money of the United States of America, by check made payable to the entity constituting Landlord hereunder and sent to the address designated in Section 1.10 of the Basic Lease Information, or to such other location or address as Landlord may designate from time to time. Tenant shall pay Landlord a one time administration fee equal to 5% of any Rent that is past due Rent. In addition, Rent that is five (5) calendar days past due shall accrue interest until paid at 12% per annum (or the maximum rate legally permissible, whichever is less). Notwithstanding the foregoing, Tenant shall be entitled to notice and the expiration of a five (5) day cure period prior to imposition of any late charge or interest charge under this Section 3 one (1) time per calendar year; after such written notice has been provided to Tenant in a calendar year, Tenant shall not be entitled to any further notice prior to imposition of a late charge or interest under this Section 3 in such calendar year. Rent for any partial month during the Term shall be prorated. No endorsement or statement on a check or letter accompanying payment shall be considered an accord and satisfaction. Tenant's covenant to pay Rent is independent of every other covenant in this Lease. Further, in the event any check submitted by Tenant is returned by reason of "non sufficient funds", Tenant shall pay to Landlord an "NSF Fee" at Landlord's standard rate then in effect.
4.Compliance with Laws; Use. The Premises shall be used for the Permitted Use and for no other use whatsoever. In no event shall the Premises be used as a co-working center, executive office suites or a flexible workplace center. Tenant shall comply with all statutes, codes, ordinances, orders, rules and regulations of any municipal or governmental entity (collectively, "Laws"), regarding the operation of Tenant's business and the use, condition, configuration and occupancy of the Premises. Pursuant to Section 1938 of the California Civil Code, Landlord hereby advises Tenant that the Premises has not undergone an inspection by a certified access specialist (a “CASp”) and no representations are made with respect to compliance with accessibility standards. Further, pursuant to Section 1938 of the California Civil Code, Landlord notifies Tenant of the following: “A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.” Therefore and notwithstanding anything to the contrary contained in this Lease, Landlord and Tenant agree that (a) Tenant may, at its option and at its sole cost, cause a CASp to inspect the Premises and determine whether the Premises complies with all of the applicable construction-related accessibility standards under state law, (b) the parties shall mutually coordinate and reasonably approve of the timing of any such CASp inspection so that Landlord may, at its option, have a representative present during such inspection, and (c) Tenant shall be solely responsible for the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the Premises. Tenant shall comply with the Rules and Regulations of the Building attached as Exhibit D and such other commercially reasonable rules and regulations adopted by Landlord from time to time upon at least thirty (30) calendar days prior written notice to Tenant. Landlord shall modify and enforce the Rules and Regulations in a uniform and non-discriminatory manner with respect to all tenants and occupants of the Project, and further provided any modification of the Rules and Regulations shall not materially increase Tenant’s obligations or be materially inconsistent with Tenant’s rights under this Lease.
5.Security Deposit. The Security Deposit shall be delivered to Landlord upon the execution of this Lease by Tenant and held by Landlord without liability for interest (unless required by Laws) as security for the performance of Tenant's obligations. The Security Deposit is not an advance payment of Rent or a measure of damages. Landlord may use all or a portion of the Security Deposit to satisfy past due Rent, to cure any Default (defined in Section 18) by Tenant, or to compensate Landlord for any other loss or damage Landlord may suffer by reason of Tenant's Default. If Landlord uses any portion of the Security Deposit, Tenant shall on demand restore the Security Deposit to its original amount, and Tenant's failure to do so shall be a Default under this Lease. Landlord shall return any unapplied portion of the Security Deposit to Tenant within 45 calendar days after the latest to occur of: (a) payment of the final Rent due from Tenant; or (b) the Expiration Date; or (c) the date Tenant surrenders the Premises to Landlord in compliance with Section 27. Landlord shall not be required to keep the Security Deposit separate from its other accounts. Tenant hereby waives the provisions of Section 1950.7 of the California Civil Code, or any successor Laws now or hereafter in effect.
6.Building Services. Landlord shall furnish Tenant with the following services: (a) water service for use in the base building lavatories; (b) customary heat and air conditioning ("HVAC") in season from 8:00 A.M. to 6:00 P.M., Monday through Friday and upon request by Tenant given prior to 4:00 P.M. on Friday from 8:00 A.M. to 12:00 P.M. Saturday (excepting nationally recognized holidays, which currently include New Year's Day, President's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day) (collectively, the "Building Service Hours"), and Tenant shall have the right to receive HVAC service during hours other than the Building Service Hours by paying Landlord's charge for additional HVAC service, which charge shall be equal to Landlord's actual costs for utilities consumed plus a
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standard administrative and depreciation charge with a two (2) hour minimum and providing such reasonable prior notice as is specified by Landlord; (c) standard janitor service;(d) passenger elevator service; and (e) Building standard electricity for general office purposes, not to exceed five (5) watts connected load per rentable square foot of the Premises calculated on a monthly basis for Building Service Hours. Electricity used by Tenant in the Premises shall, at Landlord's option, be paid for by Tenant either: (i) through inclusion in Expenses (except as provided for excess usage); (ii) by a separate charge payable by Tenant to Landlord; or (iii) by separate charge billed by the applicable utility company. Landlord's failure to furnish, or any interruption, diminishment or termination of, services due to the application of Laws, the failure of any equipment, the performance of repairs, improvements or alterations, utility interruptions or the occurrence of an event of Force Majeure (defined in Section 28.02) shall not render Landlord liable to Tenant, constitute a constructive eviction of Tenant, give rise to an abatement of Rent, nor relieve Tenant from the obligation to fulfill any covenant or agreement.
If Tenant uses water, electricity, heat or air conditioning in excess of the Building standard level of services supplied by Landlord pursuant to the terms hereof, or if Tenant's consumption of electricity shall exceed Building standard electrical consumption as referenced in subsection 6(e) above, Tenant shall pay to Landlord, upon actual billing, the cost incurred for such excess consumption, the cost of the installation, operation, and maintenance of equipment which is installed in order to supply such excess consumption, and the cost of the increased wear and tear on existing equipment caused by such excess consumption. In order to measure the amount of electricity provided to the Premises, Landlord may, at its sole discretion and at Landlord's sole cost and expense, install devices to separately meter Tenant's electrical consumption. Further, Tenant shall not install any supplemental or stand alone HVAC or cooling equipment or systems without Landlord's prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, Landlord may condition such consent upon the installation of separate meters to measure any related consumption of chilled water or electricity and compliance with Landlord's design criteria so as not to affect base Building systems or equipment. Tenant's use of electricity shall never exceed the capacity of the feeders to the Property or the risers or wiring installation, and Tenant shall not install or use or permit the installation or use of any computer or electronic data processing equipment in the Premises that will result in excess utilities consumption, without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed. If Tenant desires to use heat, ventilation or air conditioning during hours other than those for which Landlord is obligated to supply such utilities pursuant to the terms of this Section 6, Tenant shall give Landlord such prior notice, if any, as Landlord shall from time to time establish as appropriate, of Tenant's desired use in order to supply such utilities, and Landlord shall supply such utilities to Tenant at such hourly cost to Tenant (which shall be treated as Additional Rent) as Landlord shall from time to time establish. The current hourly cost, which is subject to increase in Landlord's reasonable discretion, is Sixty-Five Dollars ($65.00) per hour per zone within the Premises.
During the Term of this Lease, or any extensions thereof, as a benefit to the tenants of the Property, Landlord may elect to provide certain amenities at the Project for use by tenants and their employees (with any such offerings collectively being referred to as the “Amenities”). For example, Amenities may include a conference center (the “Conference Center”), a fitness center (the “Fitness Center”) and food service. Landlord shall have the right (a) to determine and/or alter the size and location of such Amenities and the type of equipment provided, (b) to include in Expenses all management, operation, maintenance, repair and equipment replacement costs related to the Amenities (including, without limitation, a market rent amount for the rentable square footage of the Amenities), and (c) to include the rentable square footage of the Amenities in the common area “add on” factor for all measurement purposes for the Project. Tenant shall pay Landlord’s regular charge for use of the Conference Center and for the cost of any special services related to Tenant’s use of the Amenities, e.g., long-distance phone calls, catering, set up or take down and cleaning costs, after-hours HVAC service (with a two (2) hour minimum), personal training services, etc. (“Special Amenity Services”). Tenant must schedule use of the Conference Center with Landlord in advance, and Tenant’s use thereof shall be subject to availability and governed by Landlord’s commercially reasonable rules and regulations for the Conference Center that are then in effect. Costs to maintain and operate the Amenities shall be included in Expenses. Tenant acknowledges and agrees that Tenant’s and any Tenant Related Party’s use of the Amenities is voluntary and, in consideration of the use of the Amenities, shall be undertaken by Tenant and such Tenant Related Party at its sole risk. Neither Landlord nor Landlord’s officers, directors, managers, servants, agents and/or employees (collectively, the “Released Parties”) shall be liable for any claims, demands, injuries, damages, actions or causes of action whatsoever arising out of or connected with Tenant’s and any Tenant Related Party’s use of the Amenities and their facilities and services. TO THE EXTENT PERMITTED BY APPLICABLE LAWS, TENANT DOES HEREBY EXPRESSLY FOREVER WAIVE, RELEASE AND DISCHARGE THE RELEASED PARTIES FROM ANY AND ALL LIABILITY ARISING FROM ALL SUCH CLAIMS, DEMANDS, INJURIES, DAMAGES, ACTIONS AND/OR CAUSES OF ACTION, INCLUDING LIABILITY FROM ALL ACTS OF ACTIVE OR PASSIVE NEGLIGENCE, INCLUDING SOLE OR GROSS NEGLIGENCE, ON THE PART OF THE RELEASED PARTIES.
Further, as a condition to each person’s use of any Fitness Center, Tenant shall cause each person using the Fitness Center to execute a release on Landlord’s standard form prior to such party’s use of the Fitness Center. The waivers contained in this paragraph shall survive the expiration or earlier termination of this Lease.
7.Landlord's Reservation of Rights. Provided the rights and obligations of Landlord and Tenant under this Lease are not materially adversely affected, Tenant’s cost of operating its business in the Premises is not materially increased, and Tenant's and Tenant’s Invitees use of vehicular and pedestrian access to the Premises and parking spaces to be provided to Tenant under this Lease are not materially adversely affected, Landlord reserves for itself and for all other owner(s) and operator(s) of the Common Areas and the balance of the Property and/or the Project, the right from time to time to: (i) install, use, maintain, repair, replace and relocate pipes, ducts, conduits, wires and appurtenant meters and equipment above the ceiling surfaces, below the floor surfaces, within the walls and in the central core areas of the Building; (ii) make changes to the design and layout of the Project, including, without limitation, changes to buildings, driveways, entrances, loading and unloading areas, direction of traffic, landscaped areas and walkways, and, subject to the parking provisions contained in Section 29 and Exhibit D, parking spaces and parking areas; and (iii) use or close temporarily the Common Areas and/or other portions of the Property and the Project while engaged in making improvements, repairs or alterations to the Building, the Property, the Project or any portion thereof, and further provided Landlord shall in each instance use commercially reasonable efforts to minimize any interference with Tenant’s and Tenant’s Invitees use and occupancy of the Premises.
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8.Leasehold Improvements. All improvements in and to the Premises, including any Alterations (defined below) (collectively, "Leasehold Improvements") shall remain upon the Premises at the end of the Term without compensation to Tenant. Landlord, however, by written notice to Tenant at least sixty (60) calendar days prior to the Expiration Date, may require Tenant, at its expense, to remove any electronic, phone and data cabling and related equipment (collectively, "Cable") installed by or for the benefit of Tenant and/or any Landlord Work or Alterations that, in Landlord's reasonable judgment, are not standard office improvements and are of a nature that would require material removal and repair costs (collectively referred to as "Required Removables").
9.Repairs and Alterations.
9.01Tenant shall reasonably and periodically inspect the Premises to identify any conditions that are dangerous or in need of maintenance or repair and shall promptly provide Landlord with notice of any such conditions. Tenant shall, at its sole cost and expense, promptly perform all maintenance and repairs to the Premises that are not Landlord's express responsibility under this Lease, and shall keep the Premises in good condition and repair, reasonable wear and tear and casualty excepted. If Tenant fails to make any repairs to the Premises for more than 15 calendar days after notice from Landlord, or such additional time as reasonably necessary if such repair cannot reasonably be completed within 15 calendar days (although notice shall not be required in an emergency), Landlord upon at least 10 calendar days prior written notice to Tenant may make the repairs, and Tenant shall pay the reasonable cost of the repairs, together with an administrative charge in an amount equal to 10% of the cost of the repairs. Landlord shall perform all maintenance and repairs upon the: (a) structural elements of the Building;
(b) mechanical, electrical, plumbing and fire/life safety systems serving the Building in general; (c) Common Areas;
(d) roof of the Building; (e) exterior windows of the Building; (f) elevators serving the Building; and (g) the Premises' HVAC system and units; provided, however, the repair of any and all structural defects in the Building's base, shell and core including the structural elements of the roof and floor and the repair of any latent defects in such base, shell and core shall be at Landlord's sole cost and expense and not included in Expenses. Tenant hereby waives any and all rights under and benefits of subsection 1 of Section 1932, and Sections 1941 and 1942 of the California Civil Code, or any similar or successor Laws now or hereinafter in effect.
9.02Tenant shall not make alterations, repairs, additions or improvements or install any cable (collectively referred to as "Alterations") without first obtaining the written consent of Landlord in each instance, which consent Landlord shall not unreasonably withhold, condition or delay. In order to obtain such approvals, Tenant shall furnish Landlord with plans and specifications; names of contractors acceptable to Landlord; required permits and approvals; and evidence of contractor's and subcontractor's insurance in amounts reasonably required by Landlord and naming Landlord as an additional insured. Tenant shall reimburse Landlord for any sums paid by Landlord for third party examination of Tenant's plans for Alterations. In addition, Tenant shall pay Landlord a fee for Landlord's oversight and coordination of any Alterations equal to 5% of the cost of the Alterations. Upon completion, Tenant shall furnish "as-built" plans for Alterations, completion affidavits and full and final waivers of lien. The construction of the initial Tenant Improvements shall be governed by Exhibit C attached hereto and not this Section 9. Notwithstanding anything to the contrary contained herein, Tenant may make strictly cosmetic changes to the finish work in the Premises (the "Cosmetic Alterations"), without Landlord's consent, provided that the aggregate cost of any such alterations does not exceed $100,000.00 in any twelve (12) month period, and further provided that such Cosmetic Alterations do not (a) require any structural or other substantial modifications to the Premises, (b) require any changes to, nor adversely affect, the systems and equipment of the Building (including, without limitation, the sprinkler system), (c) require any permits, or (d) affect the exterior appearance of the Building. Tenant shall give Landlord at least ten (10) business days prior notice of such Cosmetic Alterations, which notice shall be accompanied by reasonably adequate evidence that such changes meet the criteria contained in this Section 9.02 for Cosmetic Alterations.
10.Entry by Landlord. Landlord may enter the Premises to inspect the Premises, to clean and make repairs, alterations or additions and to perform or facilitate maintenance, repairs, alterations or additions to any portion of the Building, to show the Premises to prospective lenders, investors and buyers, and during the last twelve (12) months of the Term or any extension term to show the Premises to prospective tenants. Except in emergencies or to provide Building services, Landlord shall provide Tenant with at least twenty-four (24) hours prior written notice of entry. Entry by Landlord shall not constitute a constructive eviction or entitle Tenant to an abatement or reduction of Rent. Landlord agrees and understands that any and all observations, understandings, trade secrets, knowledge, or materials and communications which it receives or develops in connection with its obligations under this Lease which upon a reasonable inspection shall appear confidential, shall constitute confidential information (“Tenant Confidential Information”). To the extent permitted by law, Landlord shall not disclose or share Tenant Confidential Information with any third party without the prior, written consent of the Tenant. For the avoidance of doubt, in the event Landlord discovers Tenant Confidential Information in the course of exercising its rights under this Section, Landlord shall not use, disseminate, or otherwise disclose the Tenant Confidential Information to any third party without the express, written consent of the Tenant.
11.Assignment and Subletting. Tenant shall not assign, sublease, transfer or encumber any interest in this Lease or allow any third party to use any portion of the Premises (collectively or individually, a "Transfer") without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed. It is further understood that any renewal, extension or modification of an existing sublease shall also require Landlord's prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. Any attempted Transfer in violation of this Section shall, at Landlord's option, be void. Within 15 calendar days after receipt of executed copies of the transfer documentation and such other information as Landlord may reasonably request, Landlord shall either: (a) consent to the Transfer by execution of a consent agreement in a form reasonably designated by Landlord; (b) refuse to consent to the Transfer; or (c) recapture the portion of the Premises that Tenant is proposing to Transfer. If Landlord exercises its right to recapture, the Lease shall automatically be amended to delete the applicable portion of the Premises effective on the proposed effective date of the Transfer. Upon Landlord's consent to any Transfer, Tenant shall pay and continue to pay Landlord fifty percent (50%) of any net "Transfer Premium" (defined below), received by Tenant from the transferee. "Transfer Premium" shall mean all rent, Additional Rent or other consideration payable by a Transferee in connection with a Transfer in excess of the Base Rent, Taxes and Expenses payable by Tenant under this Lease during the term of the Transfer and if such Transfer is for less than all of the Premises, the Transfer Premium shall be calculated on a rentable square foot basis less any out-of-pocket concessions such as
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free rent, moving or tenant improvement allowances, legal fees including Landlord’s review fee and attorney’s fees as described below paid by Landlord, brokerage commissions, space planning fees and lease assumption costs. Tenant hereby waives the provisions of Section 1995.310 of the California Civil Code, or any similar or successor Laws, now or hereinafter in effect, and all other remedies, including, without limitation, any right at law or equity to terminate this Lease, on its own behalf and, to the extent permitted under all applicable Laws, on behalf of the proposed transferee. In no event shall any Transfer release or relieve Tenant from any obligation under this Lease. Tenant shall pay Landlord a review fee of $1,500.00 for Landlord's review of any requested Transfer. Additionally, Tenant shall reimburse Landlord for all reasonable attorneys' fees and costs incurred by Landlord with respect to any Transfer not to exceed $2,000.00 per proposed Transfer, whether consented to or not. If Tenant is in Default (as defined below), Landlord may require that all sublease payments be made directly to Landlord, in which case Tenant shall receive a credit against Rent in the amount of Tenant's share of payments received by Landlord.
Notwithstanding anything in this Section 11 to the contrary, without the consent of Landlord, this Lease may be assigned to ("Successor Entity") (i) an entity created by merger, reorganization or recapitalization of or with Tenant or (ii) a purchaser of all or substantially all of Tenant’s assets; provided, in the case of both clause (i) and clause (ii), that (A) Landlord shall have received a notice of such assignment from Tenant at least ten (10) calendar days prior to the effective date of the applicable transaction, (B) the assignee assumes by written instrument satisfactory to Landlord all of Tenant’s obligations under this Lease, (C) such assignment is for a valid business purpose and not to avoid any obligations under this Lease, (D) the assignee is a reputable entity of good character and shall have, immediately after giving effect to such assignment, an aggregate net worth (“Net Worth”), ignoring goodwill as an asset, computed in accordance with generally accepted accounting principles (“GAAP”) at least equal to the aggregate Net Worth (as so computed) of Tenant immediately prior to such assignment or on the date of this Lease, whichever is greater, and (E) the Premises shall continue to be used for the Permitted Use. Further, Tenant may assign this Lease or sublet all or any part of the Premises to an Affiliate of Tenant; provided, that (1) Landlord shall have received a notice of such assignment or sublease from Tenant at least ten (10) calendar days prior to the effective date of the applicable transaction; and (2) in the case of any such assignment, (a) the assignment is for a valid business purpose and not to avoid any obligations under this Lease, (b) the assignee assumes by written instrument satisfactory to Landlord all of Tenant’s obligations under this Lease, and (c) the Premises shall be used for the Permitted Use. “Affiliate” means, as to any designated person or entity, any other person or entity which controls, is controlled by, or is under common control with, such designated person or entity. “Control” (and with correlative meaning, “controlled by” and “under common control with”) means ownership or voting control, directly or indirectly, of more than fifty percent (50%) of the voting stock, partnership interests or other beneficial ownership interests of the entity in question. An Affiliate or Successor Entity that is assigned Tenant’s entire interest in this Lease in accordance with this paragraph may be referred to herein as an “Affiliated Assignee.”
12.Liens. Tenant shall not permit mechanic's or other liens to be placed upon the Property or Premises in connection with any work purportedly done by or for the benefit of Tenant or its transferees. Tenant shall, within 10 calendar days of notice from Landlord, fully discharge any lien by settlement, by bonding or by insuring over the lien in the manner prescribed by Laws. If Tenant fails to do so, Landlord may bond, insure over or otherwise discharge the lien, and Tenant shall reimburse Landlord for any amount actually incurred and paid by Landlord in connection therewith.
13.Indemnity and Waiver of Claims. Except to the extent caused by the gross negligence or willful misconduct of Landlord or any Landlord Related Parties, Tenant hereby waives all claims against and releases Landlord, the Additional Insureds, and each of their trustees, members, principals, beneficiaries, partners, officers, directors, employees, Mortgagees (as defined herein) and agents (the "Landlord Related Parties") from all claims for any injury to or death of persons, damage to property or business loss in any manner related to (a) acts of God, (b) acts of third parties, (c) the bursting or leaking of any tank, water closet, drain or other pipe; (d) the inadequacy or failure of any security services, personnel or equipment, or (e) any matter outside of the reasonable control of Landlord. Except to the extent caused by the gross negligence or willful misconduct of Landlord or any Landlord Related Parties, Tenant shall indemnify, defend and hold Landlord and Landlord Related Parties harmless against and from all liabilities, obligations, suits, damages, penalties, claims, actions, losses, costs, charges and expenses (collectively, “Claims”), including, without limitation, reasonable attorneys' fees and other professional fees (if and to the extent permitted by Laws), which may be imposed upon, incurred by or asserted against Landlord or any of the Landlord Related Parties by any third party and arising out of or in connection with any damage or injury occurring in, on or about the Premises or any acts or omissions (including without limitation violations of Laws and/or CC&Rs) of Tenant and its trustees, members, principals, beneficiaries, partners, officers, directors, employees, Mortgagees and agents (the "Tenant Related Parties") or any of Tenant's transferees, contractors or licensees.
14.Insurance.
14.01Tenant shall obtain and maintain throughout the Term, at Tenant’s sole cost and expense, the following insurance ("Tenant's Insurance"). Additionally, the Tenant shall maintain the Tenant’s Insurance for a period of four (4) years following the latter expiration or termination of the Term, with terms and coverage no less favorable than those contained in this Section 14.
(a)Provided Tenant is reasonably unable to obtain occurrence basis insurance, Tenant shall maintain Commercial General Liability Insurance, on a claims-made basis, insuring coverage for bodily injury (including death and mental anguish) and property damage (including loss of use), and including the following divisions and extensions of coverage: Premises and Operations; Owners and Contractors protective; Insured Contracts as defined by the most recently filed ISO CG 00 01 form (including coverage for Tenant's indemnity obligations under this Lease); liquor liability, if applicable; and Products and Completed Operations. Such insurance must have the following minimum limits of liability: $1,000,000 Per Occurrence, $2,000,000 General Aggregate, $1,000,000 Personal and Advertising Injury – Per Occurrence, $2,000,000 Products and Completed Operations Aggregate. The policy shall be endorsed to ensure the general aggregate limit shall apply separately and in total to this location only (designated location general aggregate limit). The policy shall name the Additional Insureds as additional insureds on a primary and non-contributory basis;
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(b)Property Insurance, written on an "All Risk" or Special Form ISO CP 10 30 or its equivalent, including (without limitation) coverage for fire, explosion, riot, riot attending a strike, civil commotion, aircraft, vehicle, smoke damage, vandalism, malicious mischief, sprinkler leakage, earthquake sprinkler leakage, water damage from any cause whatsoever (including but not limited to sprinkler leakage, bursting, leaking, or stoppage of any pipes, explosion, and backup or overflow from sewers or drains), earthquake, hail, windstorm, cyclone, tornado, flood, acts of terrorism, equipment breakdown, and pollution coverage for damage caused by heat, smoke or fumes from a hostile fire, at full replacement cost value (without deduction for depreciation) and with a replacement cost endorsement covering all of Tenant's business and trade fixtures, equipment, movable partitions, furniture, merchandise and other personal property within the Premises ("Tenant's Property") and any Leasehold Improvements performed by or for the benefit of Tenant;
(c)Extra Expense, Loss of Income or Property/Business Interruption Insurance, written on an ISO CP 00 30 form or its equivalent, in such amounts as will reimburse Tenant for direct or indirect loss of earnings attributable to all perils included within "All Risk" coverage or otherwise commonly insured against by prudent tenants or attributable to prevention of access to the Premises, Tenant's parking areas or to the Building as a result of such perils, with such coverage to extend to actual loss sustained subject to a minimum of one year loss of Rental Value, including Extra Expense as needed to reduce the period of restoration after the loss;
(d)Workers' Compensation Insurance as required by Laws and in amounts as may be required by applicable statute and Employers Liability Coverage of at least $1,000,000 bodily injury (each accident),
$1,000,000 bodily injury by disease (each employee), and $1,000,000 bodily injury by disease (policy limit), and containing a waiver of subrogation endorsement in favor of Landlord;
(e)Commercial Automobile Liability insuring bodily injury and property damage arising from any auto (including all owned, non-owned, leased and hired vehicles), with minimum combined single limit of liability of
$1,000,000 per accident;
(f)If the Tenant is in the business of manufacturing, distributing, selling, serving or furnishing alcohol, on or from the Premises, Liquor Liability Insurance holding harmless and protecting Landlord and the Additional Insureds from and against any and all Claims arising under any present or future law, statute, or ordinance of the State of California, or other governmental authority having jurisdiction over the Premises, by reason of any storage, sale, use or giving away of alcoholic beverages on or from the Premises and issued on a form as otherwise acceptable to Landlord. Such policy shall have a minimum limit of liability of $5,000,000 per occurrence and in the aggregate for bodily injury (fatal or nonfatal) and property damage;
(g)Umbrella/Excess Liability on a follow form basis sitting excess of and not more restrictive than the underlying Employers Liability, Liquor Liability (if applicable), Commercial Automobile Liability, and Commercial General Liability policies, with minimum limits of liability of $5,000,000 Per Occurrence and $5,000,000 Aggregate. Such Umbrella/Excess Liability policy must be endorsed to provide that this insurance is primary to, and non-contributory with, any other insurance on which any of the Additional Insureds are an insured, whether such other insurance is primary, excess, contingent, self-insurance, or insurance on any other basis. This endorsement must cause the Umbrella/Excess coverage to be vertically exhausted, whereby such coverage is not subject to any “Other Insurance” clause under this Umbrella and/or Excess Liability policy;
(h)With respect to improvements or alterations performed by Tenant within the Premises, Tenant shall carry or cause its general contractor to carry Builder's Risk insurance (or an Installation Floater) written on an “All Risk” or Special Form basis, in the amount of the costs of such improvements or alterations, on a replacement cost basis. Tenant shall also cause its general contractor to carry Commercial General Liability, Workers Compensation Insurance, Commercial Automobile Liability, and Umbrella/Excess Liability insurance with terms and specifications mirroring those required in this Section 14, including but not limited to each term of Section 14.02 below. Tenant shall also require its general contractor to require each of its subcontractors to maintain insurance coverages equivalent to those standard in the industry but in no event less than the Commercial General Liability and Workers’ Compensation limits required above, and such insurance shall include terms and specifications mirroring those required in the below Section 14.02; and
(i)Such other insurance that are then customarily maintained by similar tenants in the region and as Landlord (or Landlord’s lender) may require.
14.02Any company writing Tenant's Insurance shall have an A.M. Best rating of not less than A:X and shall be licensed to issue insurance coverage in the State of California. All policies shall contain deductibles not greater than $50,000 unless otherwise approved by Landlord in writing. Landlord shall not be responsible for any deductibles or self-insured retentions. All liability insurance policies (except for Workers’ Compensation) shall (i) name Landlord (or its successors and assignees), Flight Venture LLC, Alcion Flight Investors LLC, Alcion Flight Strategic LLC, Alcion Real Estate Partners Master Fund, L.P., Alcion Real Estate Partners Strategic Parallel Fund III, L.P., Alcion Capital Master Fund GP III, LLC, Alcion Capital Strategic III, LLC, LO Flight LLC, Lincoln Property Company Commercial, Inc., LPC West, Inc. the managing agent for the Building (or any successor), and their respective members, principals, beneficiaries, partners, officers, directors, employees, lenders, and agents, and other designees of Landlord and its successors as the interest of such designees shall appear, as additional insureds (collectively, the “Additional Insureds”) (in the case of General Liability and Umbrella/Excess Liability following form thereof, for both ongoing and completed operations utilizing endorsement ISO Form CG 2011 11/85 or a combination of ISO Form CG 20 37 10 01 and ISO CG 20 10 10 01 or other equivalent(s) approved by Landlord), (ii) must contain an endorsement stating "such insurance as is afforded by this policy for the benefit of Landlord and any other additional insured(s) designated by Landlord, shall be primary as respects any liability or claims arising out of the occupancy of the Premises by Tenant or Tenant's operations, and any insurance carried by Landlord or any other additional insured(s) shall be non-contributory" provision that the insurance afforded by such policy is primary insurance, and (iii) contain a cross-liability endorsement or separation of insureds/severability of interests clause. All policies of Tenant's Insurance shall (x) contain an
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unqualified thirty (30) calendar days' advance written notice of any cancellation, termination, material change or lapse of insurance and (y) contain an endorsement that the insurer waives its rights to subrogation against Landlord and the Additional Insureds as described in Section 15 below. No policy required hereunder shall contain a co-insurance clause and all policy deductibles shall be acceptable to Landlord. Tenant shall provide Landlord with duly executed certificates of insurance on ACORD 25 and ACORD 28 forms, endorsements, and, upon Landlord’s request, copies of the policies, evidencing all insurance required to be carried by Tenant hereunder (including but not limited to the additional insured coverage as noted above) at least fifteen (15) calendar days prior to the earlier to occur of the Commencement Date or the date Tenant is provided with possession of the Premises, and thereafter as necessary to assure that Landlord always has current certificates evidencing Tenant's Insurance. In no event shall the limits of any insurance policy obtained by a Tenant be considered to limit the liability of Tenant under this Lease. Further, and without limitation of Section 28.06 herein, all obligations placed on Tenant in this Section 14 and the below Section 15 (including, but without limitation and purely for the avoidance of doubt, maintenance of products-completed operations coverage, additional insured status for completed operations, primary and non-contributory coverage, and waiver of subrogation) shall survive the termination or expiration of this Lease.
15.Subrogation. Notwithstanding anything to the contrary in this Lease, Landlord and Tenant hereby waive and shall cause their respective insurance carriers to waive any and all rights of recovery, claims, actions or causes of action against the other for any loss or damage to person with respect to Tenant's Property, Leasehold Improvements, the Building, the Premises, or any contents thereof, including rights, claims, actions and causes of action based on negligence, which loss, damage or injury is (or would have been, had the insurance required by this Lease been carried) covered by insurance. As noted above, Tenant also waives subrogation with respect to losses or claims covered by any liability and worker's compensation insurance.
16.Casualty Damage. Landlord, by notice to Tenant within 60 calendar days of the date of the fire or other casualty (a "Casualty"), shall have the right to terminate this Lease if all or any part of the Premises is damaged to the extent that it cannot reasonably be repaired within 120 calendar days after the date of the Casualty. If this Lease is not terminated, Landlord shall promptly and diligently, restore the Premises and all Leasehold Improvements existing within the Premises prior to the Casualty. Such restoration shall be to substantially the same condition that existed prior to the Casualty, except for modifications required by Laws. Upon notice from Landlord, Tenant shall assign to Landlord (or to any party designated by Landlord) all property insurance proceeds payable to Tenant under Tenant's Insurance with respect to any Leasehold Improvements performed by or for the benefit of Tenant; provided if the estimated cost to repair such Leasehold Improvements exceeds the amount of insurance proceeds received by Landlord from Tenant's insurance carrier, the excess cost of such repairs shall be paid by Tenant to Landlord prior to Landlord's commencement of repairs. Within 30 calendar days of demand, Tenant shall also pay Landlord for any additional excess costs that are determined during the performance of the repairs. Landlord shall not be liable for any inconvenience to Tenant, or injury to Tenant's business resulting in any way from the Casualty or the repair thereof. During any period of time that all or any portion of the Premises is rendered untenantable as a result of a Casualty, the Rent shall abate for the portion of the Premises that is untenantable or unusable by Tenant for its ordinary business operations and not used by Tenant for the period from the date of the Casualty to the date such portion of the Premises is made tenantable. Notwithstanding the foregoing, and without limiting Tenant's obligations, to pay to Landlord any cost of restoration in excess of the proceeds of Tenant's Insurance, in the event that Landlord does not receive sufficient insurance proceeds to complete all required restoration work, whether due to an uninsured Casualty, requirements of a Mortgagee, or otherwise, then Landlord shall have the right to terminate this Lease by written notice to Tenant. The provisions of this Lease, including this Section 16, constitute an express agreement between Landlord and Tenant with respect to any and all damage to, or destruction of, all or any part of the Premises, the Building, the Property or the Project, and any Laws, including, without limitation, Sections 1932(2) and 1933(4) of the California Civil Code, with respect to any rights or obligations concerning damage or destruction in the absence of an express agreement between the parties, and any similar or successor Laws now or hereinafter in effect, shall have no application to this Lease or any damage or destruction to all or any part of the Premises, the Building or the Property.
Within sixty (60) calendar days after the date Landlord learns of the necessity for repairs as a result of Casualty damage to the Premises, Landlord shall notify Tenant ("Damage Repair Estimate") of Landlord's estimated assessment of the period of time in which the repairs will be completed to the Premises. If the Damage Repair Estimate indicates that repairs cannot be completed to the Premises within one hundred eighty (180) calendar days after being commenced and if such damage is not the result of the gross negligence or willful misconduct of Tenant or Tenant's Invitees, Tenant may elect, not later than thirty (30) calendar days after Tenant's receipt of the Damage Repair Estimate, to terminate this Lease by written notice to Landlord effective thirty (30) calendar days following delivery of Tenant's notice.
17.Condemnation. Either party may terminate this Lease if any material part of the Premises is taken or condemned for any public or quasi-public use under Laws, by eminent domain or private purchase in lieu thereof (a "Taking"). Landlord shall also have the right to terminate this Lease if there is a Taking of any portion of the Building or Property which would have a material adverse effect on Landlord's ability to profitably operate the remainder of the Building. The terminating party shall provide written notice of termination to the other party within forty-five
(45) calendar days after it first receives notice of the Taking. The termination shall be effective on the date the physical taking occurs. All compensation awarded for a Taking, or sale proceeds, shall be the property of Landlord. Tenant hereby waives any and all rights it might otherwise have pursuant to Section 1265.130 of the California Code of Civil Procedure, or any similar or successor Laws.
18.Events of Default. Each of the following occurrences shall be considered to be a "Default": (a) Tenant's failure to pay any portion of Rent when due, if the failure continues for 5 calendar days after written notice to Tenant that the same is past due, which notice shall be in satisfaction of, and not in addition to, notice required by Laws ("Monetary Default"); (b) Tenant’s failure to comply with the time deadline for Landlord’s request for a subordination agreement, estoppel certificate or financial statements from Tenant pursuant to Sections 24 or 25 below (as applicable) if the failure is not cured within 10 calendar days after written notice to Tenant that the same is past due; or (c) Tenant's failure (other than a Monetary Default and other than as provided in clause (b) above) to comply with any term, provision, condition or covenant of this Lease, if the failure is not cured within 30 calendar days after written notice to Tenant; provided, however, if Tenant's failure to comply cannot reasonably be cured within 30 calendar days, Tenant shall be allowed additional time (not to exceed 60 calendar days)
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as is reasonably necessary to cure the failure so long as Tenant commences to cure within 30 calendar days and Tenant diligently pursues the cure to completion. Any notice provided under this Section 18 shall be in satisfaction of, and not in addition to, any notice required by Laws (including, without limitation, Section 1161 of the California Code of Civil Procedure).
19.Remedies.
19.01Upon the occurrence of any Default under this Lease, whether enumerated in Section 18 or not, Landlord shall have the option to pursue any one or more of the following remedies without any notice (except as expressly prescribed herein) or demand whatsoever (and without limiting the generality of the foregoing, Tenant hereby specifically waives notice and demand for payment of Rent or other obligations, except for those notices specifically required pursuant to the terms of Section 18 or this Section 19, and waives any and all other notices or demand requirements imposed by applicable law):
(a)Terminate this Lease and Tenant's right to possession of the Premises and recover from Tenant an award of damages equal to the sum of the following:
(i)The Worth at the Time of Award (as defined below) of the unpaid Rent which had been earned at the time of termination;
(ii)The Worth at the Time of Award of the amount by which the unpaid Rent which would have been earned after termination until the time of award exceeds the amount of such Rent loss that Tenant affirmatively proves could have been reasonably avoided;
(iii)The Worth at the Time of Award of the amount by which the unpaid Rent for the balance of the Term after the time of award exceeds the amount of such Rent loss that Tenant affirmatively proves could be reasonably avoided;
(iv)Any other amount reasonably necessary to compensate Landlord for all the detriment either proximately caused by Tenant's failure to perform Tenant's obligations under this Lease or which in the ordinary course of things would be likely to result therefrom; and
(v)All such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time under applicable law.
The "Worth at the Time of Award" of the amounts referred to in parts (i) and (ii) above, shall be computed by allowing interest at the lesser of a per annum rate equal to: (A) the greatest per annum rate of interest permitted from time to time under applicable law, or (B) the Prime Rate (defined below) plus 5%. For purposes hereof, the "Prime Rate" shall be the per annum interest rate publicly announced as its prime or base rate by a federally insured bank selected by Landlord in the State of California. The "Worth at the Time of Award" of the amount referred to in part (iii), above, shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus 1%;
(b)Employ the remedy described in California Civil Code §1951.4 (Landlord may continue this Lease in effect after Tenant's breach and abandonment and recover Rent as it becomes due, if Tenant has the right to sublet or assign, subject only to reasonable limitations); or
(c)Notwithstanding Landlord's exercise of the remedy described in California Civil Code
§1951.4 in respect of an event or events of Default, at such time thereafter as Landlord may elect in writing, to terminate this Lease and Tenant's right to possession of the Premises and recover an award of damages as provided above in Section 19.01(a).
19.02The subsequent acceptance of Rent hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any term, covenant or condition of this Lease, other than the failure of Tenant to pay the particular Rent so accepted, regardless of Landlord's knowledge of such preceding breach at the time of acceptance of such Rent. No waiver by Landlord of any breach hereof shall be effective unless such waiver is in writing and signed by Landlord.
19.03TENANT HEREBY WAIVES ANY AND ALL RIGHTS CONFERRED BY SECTION 3275 OF THE CIVIL CODE OF CALIFORNIA AND BY SECTIONS 1174 (c) AND 1179 OF THE CODE OF CIVIL PROCEDURE OF CALIFORNIA AND ANY AND ALL OTHER LAWS AND RULES OF LAW FROM TIME TO TIME IN EFFECT DURING THE LEASE TERM PROVIDING THAT TENANT SHALL HAVE ANY RIGHT TO REDEEM, REINSTATE OR RESTORE THIS LEASE FOLLOWING ITS TERMINATION BY REASON OF TENANT'S BREACH. TENANT ALSO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF OR RELATING TO THIS LEASE.
19.04No right or remedy herein conferred upon or reserved to Landlord is intended to be exclusive of any other right or remedy, and each and every right and remedy shall be cumulative and in addition to any other right or remedy given hereunder or now or hereafter existing by agreement, applicable law or in equity. In addition to other remedies provided in this Lease, Landlord shall be entitled, to the extent permitted by applicable law, to injunctive relief, or to a decree compelling performance of any of the covenants, agreements, conditions or provisions of this Lease, or to any other remedy allowed to Landlord at law or in equity. Forbearance by Landlord to enforce one or more of the remedies herein provided upon an event of Default shall not be deemed or construed to constitute a waiver of such Default. In no event shall Tenant be liable for Landlord’s lost profits, damage to or loss of business or any form of special, indirect or consequential damages except in connection with a Tenant holdover as provided in Section 22 below.
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19.05If Tenant is in Default of any of its non-monetary obligations under this Lease, Landlord shall have the right upon at least ten (10) calendar days prior written notice to Tenant to perform such obligations. Tenant shall reimburse Landlord for the cost of such performance upon demand together with an administrative charge equal to 5% of the cost of the work performed by Landlord.
19.06This Section 19 shall be enforceable to the maximum extent such enforcement is not prohibited by applicable law, and the unenforceability of any portion thereof shall not thereby render unenforceable any other portion.
19.07Notwithstanding anything to the contrary set forth in this Lease, Landlord shall be in default in the performance of any obligation required to be performed by Landlord pursuant to this Lease if Landlord fails to perform such obligation within thirty (30) calendar days after the receipt of notice from Tenant specifying in detail Landlord's failure to perform; provided, however, if the nature of Landlord's obligation is such that more than thirty (30) calendar days are required for its performance, then Landlord shall not be in default under this Lease if it shall commence such performance within such thirty (30) calendar day period and thereafter diligently pursue the same to completion. Upon any such default by Landlord under this Lease, Tenant may, except as otherwise specifically provided in this Lease to the contrary, exercise any of its rights provided at law or in equity or set forth in this Lease.
20.Limitation of Liability.
THE LIABILITY OF LANDLORD (AND OF ANY SUCCESSOR LANDLORD) SHALL BE LIMITED TO THE LESSER OF (A) THE INTEREST OF LANDLORD IN THE PROPERTY, OR (B) THE EQUITY INTEREST LANDLORD WOULD HAVE IN THE PROPERTY IF THE PROPERTY WERE ENCUMBERED BY THIRD PARTY DEBT IN AN AMOUNT EQUAL TO 70% OF THE VALUE OF THE PROPERTY. TENANT SHALL LOOK SOLELY TO LANDLORD'S INTEREST IN THE PROPERTY AND ANY INSURANCE OR CONDEMNATION PROCEEDS FROM THE PROPERTY FOR THE RECOVERY OF ANY JUDGMENT OR AWARD AGAINST LANDLORD OR ANY LANDLORD RELATED PARTY. NEITHER LANDLORD NOR ANY LANDLORD RELATED PARTY SHALL BE PERSONALLY LIABLE FOR ANY JUDGMENT OR DEFICIENCY AND IN NO EVENT SHALL LANDLORD OR ANY LANDLORD RELATED PARTY BE LIABLE TO TENANT FOR ANY LOST PROFIT, DAMAGE TO OR LOSS OF BUSINESS OR ANY FORM OF SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGE. BEFORE FILING SUIT FOR AN ALLEGED DEFAULT BY LANDLORD, TENANT SHALL GIVE LANDLORD AND THE MORTGAGEE(S) (DEFINED IN SECTION 24 BELOW) WHOM TENANT HAS BEEN NOTIFIED HOLD MORTGAGES (DEFINED IN SECTION 24 BELOW), NOTICE AND REASONABLE TIME TO CURE THE ALLEGED DEFAULT.
21.Relocation. Landlord, at its expense, at any one time during the Term, may one-time relocate Tenant from the Premises to second (2nd) floor or higher space of reasonably comparable size, view, layout and utility ("Relocation Space") within the Building or other buildings within the Project upon at least 90 calendar days' prior written notice to Tenant. Expenses to be paid by Landlord, within thirty (30) days following delivery of an invoice by Tenant to Landlord, are Tenant's reasonable and actual expenses resulting from the physical relocation of Tenant's furniture, fixtures, cabling and equipment to the Relocation Space. Landlord, at its sole expense, shall provide Tenant with tenant improvements in the Relocation Space at least equal in quality to those in the Premises, which tenant improvements shall be substantially completed prior to the date Tenant has to vacate and surrender possession of the original Premises to Landlord. Tenant shall have no obligation to remove any tenant improvements, Alterations or cabling from the original Premises if Landlord relocates Tenant from the original Premises to the Relocation Space pursuant to this Section 21. From and after the date of the relocation, "Premises" shall refer to the Relocation Space into which Tenant has been moved and the Base Rent and Tenant's Pro Rata Share shall be adjusted based on the rentable square footage of the Relocation Space; provided, however, if (a) the Relocation Space contains fewer rentable square feet than the original Premises, then Tenant’s Base Rent obligation and Tenant’s Pro Rata Share shall be proportionately reduced or (b) the Relocation Space contains more rentable square feet than the original Premises, then Tenant’s Base Rent obligation and Tenant’s Pro Rata Share shall not increase as a result of such relocation.
22.Holding Over. If Tenant remains in possession of the Premises after expiration or termination of the Term, or after the date in any notice given by Landlord to Tenant terminating this Lease, such possession by Tenant shall be deemed to be a month-to-month tenancy terminable on written thirty (30) day notice at any time, by either party. Tenant's occupancy shall be subject to all the terms and provisions of this Lease and Tenant shall pay an amount (on a per month basis without reduction for partial months during the holdover) equal to 150% of the fair market gross rental for the Premises as reasonably determined by Landlord (which in no event shall be less than 150% of the sum of the Base Rent and Additional Rent due for the period immediately preceding the holdover). No holdover by Tenant or payment by Tenant after the termination of this Lease shall be construed to extend the Term or prevent Landlord from immediate recovery of possession of the Premises by summary proceedings or otherwise. Further, there shall be no reconciliation or refund of amounts paid by Tenant during any period of holdover. If Landlord provides Tenant with at least thirty (30) calendar days prior written notice that Landlord has a signed proposal or lease from a succeeding tenant to lease the Premises, and if Tenant fails to surrender the Premises upon the later of (the “Consequential Damages Date”) (i) the date of expiration of such thirty (30) day period or (ii) the date of termination or expiration of this Lease, in addition to any other liabilities to Landlord accruing therefrom, Tenant shall protect, defend, indemnify and hold Landlord harmless from all loss, costs (including reasonable attorneys' fees) and liability resulting from such failure to surrender possession of the Premises to Landlord on or before the Consequential Damages Date, including any claims made by any succeeding tenant founded upon such failure to surrender, and any lost profits to Landlord resulting therefrom.
23.CC&Rs. Tenant shall comply with all recorded covenants, conditions, and restrictions currently affecting the Building and/or Project (the "Current CC&Rs"), including without limitation, the Governing Documents. Additionally, Tenant acknowledges that the Building may be subject to any future covenants, conditions, and restrictions and/or amendments to the Current CC&Rs (in any such event, the "Future CC&Rs") which Landlord, in Landlord's discretion, deems reasonably necessary or desirable and Tenant agrees that this Lease shall be subject and subordinate to the Current CC&Rs and such Future CC&Rs (collectively, the "CC&Rs"), provided any such Future CC&Rs shall not:
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(a) have a material adverse effect upon the access to and/or use by Tenant, or Tenant’s Invitees, of the Premises or vehicular and/or pedestrian access to the Premises or throughout the Project, (b) be materially inconsistent with the rights and obligations of Landlord and Tenant under this Lease; or (c) materially increase Tenant’s cost of operating its business in the Premises.
24.Subordination to Mortgages; Estoppel Certificate. Tenant accepts this Lease subject and subordinate to any mortgage(s), deed(s) of trust, ground lease(s) or other lien(s) now or subsequently arising upon the Premises, the Building or the Property, and to renewals, modifications, refinancings and extensions thereof (collectively referred to as a "Mortgage"); provided, however, that a condition precedent to such subordination as to any future Mortgages shall be that Landlord obtains from the lender or other party in question a commercially reasonable subordination, non-disturbance and attornment agreement in favor of Tenant. This clause shall be self-operative, but upon request from the holder of a Mortgage (a "Mortgagee"), Tenant shall execute a commercially reasonable subordination, non- disturbance and attornment agreement within 10 calendar days after receipt of a written request from Landlord. As an alternative, a Mortgagee shall have the right at any time to subordinate its Mortgage to this Lease. Upon request, Tenant shall, without charge, attorn to any successor to Landlord's interest in this Lease. Tenant shall, within 10 calendar days after receipt of a written request from Landlord, execute and deliver a commercially reasonable estoppel certificate to those parties as are reasonably requested by Landlord.
25.Financial Statements. Prior to the execution of this Lease by Landlord and at any time during the Term of this Lease (except in the event of sale or refinance of the Project, no more frequently than once each calendar year) upon ten (10) calendar days prior written notice from Landlord, Tenant agrees to provide Landlord with a current financial statement for Tenant and any guarantors of Tenant and financial statements for the two (2) years prior to the current financial statement year for Tenant and any guarantors of Tenant. Such statements are to be prepared in accordance with generally accepted accounting principles.
26.Notice. All demands, approvals, consents or notices shall be in writing and delivered by hand or sent by registered or certified mail with return receipt requested, or sent by overnight or same day courier service at the party's respective Notice Address(es) set forth in Section 1. Each notice shall be deemed to have been received on the earlier to occur of actual delivery or the date on which delivery is refused, or, if Tenant has vacated the Premises or any other Notice Address without providing a new Notice Address, 3 days after notice is deposited in the U.S. mail or with a courier service in the manner described above. Either party may, at any time, change its Notice Address (other than to a post office box address) by giving the other party written notice of the new address.
27.Surrender of Premises. At the termination of this Lease or Tenant's right of possession, Tenant shall remove Tenant's Property and any designated Required Removables from the Premises, and quit and surrender the Premises to Landlord, broom clean, and in good order, condition and repair, ordinary wear and tear and damage which Landlord is obligated to repair hereunder excepted. If Tenant fails to remove any of Tenant's Property within five (5) calendar days after termination, Landlord, at Tenant's sole cost and expense, shall be entitled to remove and store Tenant's Property. Landlord shall not be responsible for the value, preservation or safekeeping of Tenant's Property. Tenant shall pay Landlord, upon demand, the expenses and storage charges incurred. If Tenant fails to remove Tenant's Property from the Premises or storage within thirty (30) calendar days after notice, Landlord may deem all or any part of Tenant's Property to be abandoned and title to Tenant's Property shall vest in Landlord. If Tenant fails to remove any of the designated Required Removables by the Expiration Date or perform related repairs in a timely manner, Landlord may perform such work at Tenant's expense.
28.Miscellaneous.
28.01Costs and Expenses; No Waiver. If either party institutes a suit against the other for violation of or to enforce any covenant, term or condition of this Lease, the prevailing party shall be entitled to all of its costs and expenses, including, without limitation, reasonable attorneys' fees. Landlord and Tenant hereby waive any right to trial by jury in any proceeding based upon a breach of this Lease. Either party's failure to declare a default immediately upon its occurrence, or delay in taking action for a default shall not constitute a waiver of the default, nor shall it constitute an estoppel.
28.02Force Majeure. Whenever a period of time is prescribed for the taking of an action by Landlord or Tenant (other than the payment of the Security Deposit or Rent), the period of time for the performance of such action shall be extended by the number of calendar days that the performance is actually delayed due to strikes, acts of God, epidemic, pandemic or disease outbreak (including, without limitation, the COVID-19 virus), shortages of labor or materials, war, actions of government, terrorist acts, civil disturbances and other causes beyond the reasonable control of the performing party ("Force Majeure"). Force Majeure shall not include financial difficulties of the party required to perform.
28.03Transfer By Landlord. Landlord shall have the right to transfer and assign, in whole or in part, all of its ownership interest, rights and obligations in the Building, Project, Property or Lease, including the Security Deposit, and upon transfer Landlord shall be released from any further obligations hereunder, and Tenant agrees to look solely to the successor in interest of Landlord for the performance of obligations accruing subsequent to such transfer and the return of any Security Deposit.
28.04Renovation of the Project. Tenant acknowledges that portions of the Project may be under construction following Tenant's occupancy of the Premises, and that such construction may result in levels of noise, dust, obstruction of access, etc. which are in excess of that present in a fully constructed project. Tenant acknowledges and agrees that Landlord may alter, remodel, improve and/or renovate (collectively, the "Renovation Work") the Building, Premises, and/or the Project, and in connection with any Renovation Work, Landlord may, among other things, erect scaffolding or other necessary structures in the Building, or the Project, restrict access to portions of the Project, including portions of the Common Areas, or perform work in the Building and/or the Project. Landlord agrees to use commercially reasonable efforts to minimize any disruption or interference with Tenant's business operations during the course of any such Renovation Work. Tenant hereby agrees that such Renovation Work and Landlord's actions in connection with such Renovation Work shall in no way constitute a constructive eviction of Tenant nor entitle Tenant to any abatement of Rent. Landlord shall have no responsibility or liability to Tenant for any injury to or interference with Tenant's business arising from any such Renovation Work, and Tenant shall not be entitled to any damages from Landlord for loss of use of the Premises, in whole or in part, or for loss of Tenant's personal
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property or improvements, resulting from the Renovation Work or Landlord's actions in connection therewith or for any inconvenience occasioned by such Renovation Work or Landlord's actions in connection therewith.
28.05Submission of Lease; Claims By Brokers. Submission of this instrument for examination or signature by Tenant does not constitute a reservation of or an option for lease, and it is not effective as a lease or otherwise until execution and delivery by both Landlord and Tenant, and Landlord's lender holding a lien with respect to the Building has approved this Lease and the terms and conditions hereof. Tenant represents that it has dealt directly with and only with the Broker as a broker in connection with this Lease. Tenant shall indemnify and hold Landlord and the Landlord Related Parties harmless from all claims of any other brokers claiming to have represented Tenant in connection with this Lease. Landlord shall be solely responsible for the payment of any commissions due the Brokers in connection with this Lease pursuant to separate agreements between Landlord and Brokers.
28.06Survival of Obligations. The expiration of the Term, whether by lapse of time, termination or otherwise, shall not relieve either party of any obligations which accrued prior to or which may continue to accrue after the expiration or termination of this Lease.
28.07Quiet Enjoyment; Binding Covenants. Tenant shall, and may peacefully have, hold and enjoy the Premises, subject to the terms of this Lease, provided Tenant pays the Rent and fully performs all of its covenants and agreements. This covenant and all other covenants of Landlord shall be binding upon Landlord and its successors only during its or their respective periods of ownership of the Building.
28.08Entire Agreement. This Lease constitutes the entire agreement between the parties and supersedes all prior agreements and understandings related to the Premises. This Lease may be modified only by a written agreement signed by Landlord and Tenant. This Lease shall be interpreted and enforced in accordance with the Laws of the state or commonwealth in which the Building is located.
28.09Authority; PATRIOT Act; OFAC. Tenant represents and warrants to Landlord that each individual executing this Lease on behalf of Tenant is authorized to do so on behalf of Tenant and that Tenant is not, and the entities or individuals constituting Tenant or which may own or control Tenant or which may be owned or controlled by Tenant are not, among the individuals or entities identified on any list compiled pursuant to Executive Order 13224 for the purpose of identifying suspected terrorists. Tenant represents and warrants that neither Tenant nor any of its affiliates, nor any of their respective partners, members, shareholders or other equity owners, and none of their respective employees, officers, directors, representatives or agents, is a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of the Office of Foreign Asset Control ("OFAC") of the Department of the Treasury (including those named on OFAC's Specially Designated and Blocked Persons List) or under any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action.
28.10 Confidentiality. Landlord and Tenant acknowledge that the content of this Lease and any related documents, negotiations, and conversations are confidential information ("Confidential Information"). To the extent permitted by law, each party shall keep such Confidential Information strictly confidential and shall not disclose such Confidential Information to any person or entity other than their financial, legal, brokerage and space planning consultants, provided, however, that such recipients are bound by written duties of confidentiality with terms no less restrictive than those contained in this Lease. At the earlier expiration or termination of this Lease, each party shall, at the disclosing party’s election, destroy or return any Confidential Information in its possession or control, and shall provide a written certification confirming same. In the event either party is required to disclose Confidential Information pursuant to subpoena or other judicial process, the party so obligated shall notify the owner of the Confidential Information without delay so the owner of the Confidential Information may seek a protective order or other legal remedy to limit or prevent the disclosure of such Confidential Information. To the extent permitted by law, the party obligated to disclose the Confidential Information shall limit its disclosure of Confidential Information solely to the extent necessary to comply with its obligations as required by law.
29.Parking.
29.01Tenant's Parking Passes. During the Term of this Lease, Tenant shall purchase from Landlord, the number of parking passes specified in the Basic Lease Information hereof for use by Tenant's employees in the common parking areas for the Building within the Project, as designated by Landlord from time to time. Landlord shall at all times have the right to establish and modify the nature and extent of the parking areas for the Building and Project (including whether such areas shall be surface, underground and/or other structures) as long as Tenant is provided the number of parking passes designated in the Basic Lease Information. In addition, Landlord may, in its sole discretion, assign any unreserved and unassigned parking spaces, and/or make all or a portion of such spaces reserved.
29.02Visitor Parking Charges. In addition to such parking passes for use by Tenant's employees, Landlord shall permit access to the parking areas for Tenant's visitors, subject to availability of spaces and payment (by validation charges or otherwise) of commercially reasonable daily visitor parking charges therefor as may be established and adjusted by Landlord from time to time.
29.03Parking Rules. The use of the parking areas shall be subject to any commercially reasonable, uniform, and non-discriminatory rules and regulations adopted by Landlord and/or Landlord's parking operators from time to time, including any system for controlled ingress and egress and charging visitors and invitees, with appropriate provision for validation of such charges. Tenant shall not use more parking spaces than its allotment and shall not use any parking spaces specifically assigned by Landlord to other tenants of the Building or Project or for such other uses as visitor parking. Tenant's parking passes shall be used only for parking by vehicles no larger than normally sized passenger automobiles or pick-up trucks. Tenant shall not permit or allow any vehicles that belong to or are controlled by Tenant or Tenant's employees, suppliers, shippers, customers or invitees to be loaded, unloaded, or parked in areas other than those designated by Landlord for such activities. If Tenant permits or allows any of the prohibited activities described herein, including, without limitation, parking in spaces
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designated as reserved spaces, illegal parking, and any non-compliance with posted signage, then Landlord shall have the right, without notice, in addition to such other rights and remedies that it may have, to remove or tow away the vehicle involved and charge the cost thereof to Tenant, which cost shall be payable by Tenant within 30 calendar days of demand by Landlord.
30.Joint and Several Obligations. If more than 1 person executes this Lease as Tenant, their execution of this Lease will constitute their covenant and agreement that (i) each of them is jointly and severally liable for the keeping, observing and performing of all of the terms, covenants, conditions, provisions and agreements of this Lease to be kept, observed and performed by Tenant, and (ii) the term "Tenant" as used in this Lease means and includes each of them jointly and severally. The act of or notice from, or notice or refund to, or the signature of any 1 or more of them, with respect to the tenancy of this Lease, including, but not limited to, any renewal, extension, expiration, termination or modification of this Lease, will be binding upon each and all of the persons executing this Lease as Tenant with the same force and effect as if each and all of them had so acted or so given or received such notice or refund or so signed.
31.Counterparts; Electronic Delivery; Electronic Signatures. This Lease may be executed in one or more counterparts, each of which shall constitute an original and all of which shall be one and the same agreement. The parties may exchange counterpart signatures by facsimile or electronic transmission and the same shall constitute delivery of this Lease with respect to the delivering party. If a variation or discrepancy among counterparts occurs, the copy of this Lease in Landlord's possession shall control. The parties shall have the right to insert the name of the people executing this Lease using an electronic signature (an "Electronic Signature"), and an Electronic Signature shall be binding on such party as if this Lease had been originally executed by an ink signature.
32.Hazardous Substance Disclosure. California law requires landlords to disclose to tenants the existence of certain Hazardous Materials (hereinafter defined). As used herein, "Hazardous Materials" means any chemical, substance, material, controlled substance, object, condition, waste, living organism or combination thereof, whether solid, semi-solid, liquid or gaseous, which is or may be hazardous to human health or safety or to the environment due to its radioactivity, ignitability, corrosivity, reactivity, explosivity, toxicity, carcinogenicity, mutagenicity, phytotoxicity, infectiousness or other harmful or potentially harmful properties or effects, including, without limitation, tobacco smoke, petroleum and petroleum products, asbestos, radon, polychlorinated biphenyls (PCBs), refrigerants (including those substances defined in the Environmental Protection Agency's "Refrigerant Recycling Rule", as amended from time to time) and all of those chemicals, substances, materials, controlled substances, objects, conditions, wastes, living organisms or combinations thereof which are now or become in the future listed, defined or regulated in any manner by any Laws, rules or regulations governing Hazardous Materials based upon, directly or indirectly, such properties or effects. Accordingly, the existence of gasoline and other automotive fluids, asbestos containing materials, maintenance fluids, copying fluids and other office supplies and equipment, certain construction and finish materials, tobacco smoke, cosmetics and other personal items must be disclosed. Gasoline and other automotive fluids are found in the parking areas of the Project. Cleaning, lubricating and hydraulic fluids used in the operation and maintenance of the Building are found in the utility areas of the Building not generally accessible to Building occupants or the public. Many Building occupants use copy machines and printers with associated fluids and toners, and pens, markers, inks, and office equipment that may contain Hazardous Materials. Certain adhesives, paints and other construction materials and finishes used in portions of the Building may contain Hazardous Materials. The Building may from time to time be exposed to tobacco smoke. Building occupants and other persons entering the Building from time to time may use or carry prescription and non-prescription drugs, perfumes, cosmetics and other toiletries, and foods and beverages, some of which may contain Hazardous Materials. By its execution of this Lease, Tenant acknowledges that the notice set forth hereinabove shall constitute the notice required under California Health and Safety Code Section 25915.5.
[SIGNATURES ON NEXT PAGE]
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Landlord and Tenant have executed this Lease as of the day and year first above written.
LANDLORD:
FLIGHT PHASE I OWNER, LLC,
a Delaware limited liability company
By: /s/ Mark Potter , Mark Potter
Authorized Signatory
TENANT:
CHROMADEX CORPORATION,
a Delaware corporation
By: /s/ Kevin Farr
Kevin Farr
Name:
Title: Chief Executive Officer
By: /s/ Frank Jaksch
Frank Jaksch
Name:
Title: Chairman of the Board
26-2940963
Tenant's Tax ID Number (FEIN)
This Lease must be signed by two (2) officers of Tenant: one being the chairman of the board, the president or a vice president, and the other being the secretary, an assistant secretary, the chief financial officer or an assistant treasurer. If one (1) individual is signing in two (2) of the foregoing capacities, that individual must sign twice; once as one officer and again as the other officer.
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EXHIBIT A
OUTLINE AND LOCATION OF PREMISES
Exhibit A is intended only to show the general layout of the space plan as of the beginning of the Term of this Lease. It does not in any way supersede any of Landlord's rights with respect to arrangements and/or locations of public parts of the Building and changes in such arrangements and/or locations. It is not to scale; any measurements or distances shown should be taken as approximate.
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EXHIBIT B
EXPENSES AND TAXES
This Exhibit is attached to and made a part of the Lease by and between FLIGHT PHASE I OWNER, LLC, a Delaware limited liability company ("Landlord") and CHROMADEX CORPORATION., a Delaware corporation ("Tenant") for space in the Building located at 1735 Flight Way, Tustin, California.
1.Payments.
1.01Tenant shall pay Tenant's Pro Rata Share of Expenses (defined below) for each calendar year during the Term and also Tenant’s Pro Rata Share of Taxes (defined below) for each calendar year during the Term. Landlord shall provide Tenant with a good faith estimate of the Expenses and Taxes for each calendar year during the Term. On or before the first day of each month, Tenant shall pay to Landlord a monthly installment equal to one- twelfth of Tenant's Pro Rata Share of Landlord's estimate of Expenses and Taxes. After its receipt of the revised estimate, Tenant's monthly payments shall be based upon the revised estimate. If Landlord does not provide Tenant with an estimate of the Expenses or the Taxes by January 1 of a calendar year, Tenant shall continue to pay monthly installments based on the previous year's estimate(s) until Landlord provides Tenant with the new estimate. The failure of Landlord to timely furnish any such statement for any year shall not preclude Landlord from enforcing its rights to collect any Expenses or Taxes under this Exhibit B.
1.02As soon as is practical following the end of each calendar year, but no later than May 1st of each calendar year, Landlord shall furnish Tenant with a statement of the actual Expenses and the actual Taxes for the prior calendar year. If the estimated Expenses or estimated Taxes for the prior calendar year is more than the actual Expenses or actual Taxes, as the case may be, for the prior calendar year, Landlord shall either provide Tenant with a refund or apply any overpayment by Tenant against Additional Rent due or next becoming due, provided if the Term expires before the determination of the overpayment, Landlord shall refund any overpayment to Tenant after first deducting the amount of Rent due. If the estimated Expenses or estimated Taxes for the prior calendar year is less than the actual Expenses or actual Taxes, as the case may be, for such prior year, Tenant shall pay Landlord, within 30 calendar days after its receipt of the statement of Expenses or Taxes, any underpayment for the prior calendar year. Notwithstanding the foregoing to the contrary, Tenant shall not be responsible for any Expenses or Taxes which were first billed to Tenant more than eighteen (18) months after the expiration of the applicable calendar year for which such charges were incurred.
2.Expenses.
2.01"Expenses" shall mean all costs, fees, amounts, disbursements and expenses of every kind and nature paid or incurred by or on behalf of Landlord with respect to any calendar year in connection with the operation, ownership, maintenance, insurance, restoration, management, replacement or repair of the Project, and the common area servicing the Project, or any portion thereof, in a first class manner, including, without limitation, any amounts paid or incurred with respect to: (a) all labor and labor related costs, including wages, salaries, bonuses, taxes, insurance, uniforms, training, retirement plans, pension plans and other employee benefits; provided, however, if personnel employed by Landlord provides services to the Project and/or other buildings owned by Landlord or other Landlord affiliates, the labor and labor related costs of such personnel shall be equitably prorated; (b) a commercially reasonable property management fee; (c) the cost of equipping, staffing and operating an on-site and/or off-site management office for the Project, provided if the management office services one or more other buildings or properties, the shared costs and expenses of equipping, staffing and operating such management office(s) shall be equitably prorated and apportioned between the Building and/or the other buildings or properties within or outside the Project, as applicable; (d) accounting costs; (e) the cost of services including but not limited to cleaning services (including without limitation, janitorial services, window cleaning, and garbage and refuse removal) and landscaping and hardscape expenses; (f) rental and purchase cost of parts, supplies, tools and equipment; (g) insurance premiums for property, casualty, liability, rent interruption, earthquake, flood or other types of insurance carried by Landlord from time to time, and any deductibles thereunder actually paid by Landlord with respect to the Project;
(h) electricity, water, gas and any and all other utility costs to the extent same are not paid directly by, or Landlord is not reimbursed from, any tenant outside of Expenses; (i) a commercially reasonable administration and overhead fee (“Admin Fee”), (j) the costs (including market rent, staffing and all operating expenses) of any on-site amenity (e.g. including but not limited to a conference center, fitness center, etc.), to the extent that the revenue generated by the use of the amenity does not cover the expense of operating the same, (k) payments under any CC&Rs pertaining to the Project or any easement, license, parking or operating agreement or similar instrument which affects the Project;
(l) the costs of repairing, restoring and maintaining the Parking Facilities of the Project, including, without limitation, the resurfacing, restriping and cleaning of such facilities; (m) any costs, fees, amounts, disbursements and expenses which are generally included in Expenses under institutional owner practices; and (n) the amortized cost of capital improvements (as distinguished from replacement parts or components installed in the ordinary course of business). The cost of capital improvements shall be amortized by Landlord over the lesser of the Payback Period (defined below) or the useful life of the capital improvement as reasonably determined by Landlord. The amortized cost of capital improvements may, at Landlord's option, include actual or imputed interest at the rate that Landlord would reasonably be required to pay to finance the cost of the capital improvement. "Payback Period" means the reasonably estimated period of time that it takes for the cost savings resulting from a capital improvement to equal the total cost of the capital improvement. Landlord, by itself or through an affiliate, shall have the right to directly perform, provide and be compensated for any services under this Lease. If Landlord incurs Expenses for the Building, the Project or the Property together with 1 or more other buildings or properties, whether pursuant to a reciprocal easement agreement, common area agreement or otherwise, the shared costs and expenses shall be equitably prorated and apportioned between the Building, the Project and the Property, and the other buildings or properties.
2.02Expenses shall not include the exclusions set forth in Schedule 1 to Exhibit B.
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2.03If at any time during a calendar year the Project is not at least 95% occupied or Landlord is not supplying services to at least 95% of the total Rentable Square Footage of the Project, variable Expenses shall, at Landlord's option, be determined as if the Project had been 95% occupied and Landlord had been supplying services to 95% of the Rentable Square Footage of the Project.
3."Taxes" shall mean: (a) all real property taxes and other assessments on the Building, the Project and/or Property, including, but not limited to, gross receipts taxes, assessments for special improvement districts and building improvement districts, governmental charges, fees and assessments for police, fire, traffic mitigation or other governmental service of purported benefit to the Property, taxes and assessments levied in substitution or supplementation in whole or in part of any such taxes and assessments and the Property's share of any real estate taxes and assessments under any reciprocal easement agreement, common area agreement or similar agreement as to the Property and/or the Project; (b) all personal property taxes for property that is owned by Landlord and used in connection with the operation, maintenance and repair of the Property; and (c) all costs and fees incurred in connection with seeking reductions in any tax liabilities described in (a) and (b), including, without limitation, any costs incurred by Landlord for compliance, review and appeal of tax liabilities. Without limitation, Taxes shall not include any income, capital levy, capital stock, gift, estate or inheritance tax.
4.Audit Right. Within one hundred fifty (150) calendar days ("Review Period") after Tenant's receipt of an annual statement of actual Expenses and the actual Taxes (the "Statement"), if Tenant disputes the amount set forth in the Statement, Tenant's employees or an independent certified public accountant (which accountant is a member of a nationally or regionally recognized accounting firm and is not retained on a contingency fee basis) designated by Tenant, may, after reasonable notice to Landlord ("Review Notice") and at reasonable times, inspect Landlord's records at Landlord's offices, provided that Tenant is not then in default after expiration of all applicable notice and cure periods. Tenant and such accountant or representative shall cause their respective agents and employees to maintain all information contained in Landlord's records in strict confidence. Notwithstanding the foregoing, Tenant shall only have the right to review Landlord's records one (1) time during any twelve (12) month period. If after such inspection, but within thirty (30) calendar days after the Review Period, Tenant notifies Landlord in writing ("Dispute Notice") that Tenant still disputes such amounts, a certification as to the proper amount shall be made in accordance with Landlord's standard accounting practices, at Tenant's expense, by an independent certified public accountant selected by Landlord and reasonably approved by Tenant and who is a member of a nationally or regionally recognized accounting firm. Tenant's failure to deliver the Review Notice within the Review Period or to deliver the Dispute Notice within thirty (30) calendar days after the Review Period shall be deemed to constitute Tenant's approval of such Statement and Tenant, thereafter, waives the right or ability to dispute the amounts set forth in such Statement. If Tenant timely delivers the Review Notice and the Dispute Notice, Landlord shall cooperate in good faith with Tenant and the accountant to show Tenant and the accountant the information upon which the certification is to be based. However, if such certification by the accountant proves that the Expenses and Taxes set forth in the Statement were overstated by more than five percent (5%), then the cost of the accountant and the cost of such certification shall be paid for by Landlord. Promptly following the parties' receipt of such certification, the parties shall make such appropriate payments or reimbursements, as the case may be, to each other, as are determined to be owing pursuant to such certification. Tenant agrees that this section shall be the sole method to be used by Tenant to dispute the amount of any Expenses or Taxes payable by Tenant pursuant to the terms of this Lease, and Tenant hereby waives any other rights at law or in equity relating thereto.
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SCHEDULE 1 TO EXHIBIT B
EXCLUSIONS FROM EXPENSES
(i)Franchise taxes or taxes imposed upon or measured by the income or profits of Landlord;
(ii)Any administrative wages and salaries for employees above the level of general manager or any other general and administrative overhead (excluding the Admin Fee) of Landlord, including, but not limited to, renting commissions but excluding management fees;
(iii)The cost of any special work or special service performed for any tenant (including Tenant) whether or not at the cost of such tenant;
(iv)Amortization of any debt and other non-cash expenses except as provided for herein;
(v)The cost of alterations to tenant spaces and any fit-out in advance of and in expectation of a tenant, leasehold alterations, additions, changes, replacements, improvements and decorations made for tenants or occupants of the Building or cash allowances in lieu thereof;
(vi)Any expenses incurred in connection with any mortgage or other financing securing the land comprising the Project or the Building or interests in Landlord including, without limitation, mortgage interest or amortization, or in connection with any refinancing thereof, including, without limitation, legal, accounting, consultant, mortgage, brokerage or other expenses related thereto;
(vii)Costs covered by enforceable warranties and guaranties but only to the extent Landlord is actually reimbursed under such warranties and guaranties;
(viii)Personnel benefits, expenses and salaries of the type set forth in Section 2.01 of Exhibit B for employees above the level of general manager;
(ix)Any overhead and/or profit increment paid to Landlord or to subsidiaries or affiliates or Landlord for services in the Project to the extent the same exceed the amount which would generally be expected to be the cost of such services rendered by comparably qualified unaffiliated third parties;
(x)Any cost or expense which would otherwise be included in Expenses to the extent that Landlord is actually reimbursed from a source outside of Expenses;
(xi)Advertising, entertaining and promotional expenditures;
(xii)The cost of repairs or replacements incurred by reason of fire or other casualty or condemnation, to the extent Landlord is compensated therefor during the year to which an Expense statement relates (or would have been compensated therefor if Landlord had carried the insurance coverage required of Landlord hereunder);
(xiii)The portion of any fee or expenditure (other than a management fee) paid to Landlord or any other Landlord affiliate that is in excess of the amount which would be paid if such fee or expenditure were competitively bid;
(xiv)Costs and expenses, including, without limitation legal fees, incurred in connection with the enforcement of leases and occupancy agreements, and/or suits brought by tenants with respect to their leases or occupancy agreements, including, without limitation, disbursements in connection with any summary proceeding to dispossess any tenant or occupant;
(xv)Attorneys’ fees and disbursements, costs and expenses incurred in connection with preparing and negotiating leases, amendments and modifications thereto, consents to sublease, assignments, take over or assumption fees, or any form leases with respect to the operation of the Project and disputes with tenants or occupants in the Building or Project (it being agreed that reasonable attorneys’ and accountants’ fees and disbursements incurred directly in connection with the operation of the Building shall be included in Expenses);
(xvi)Legal, accounting and auditing fees, other than (A) accounting and auditing fees reasonably incurred in connection with the preparation of statements required pursuant to Additional Rent or rent escalation provisions, (B) reasonable legal, accounting, consulting and appraisal fees incurred in protesting (or seeking a refund or reduction of) Taxes to the extent such protests result in a savings to Tenant in Taxes that Tenant would have otherwise paid to Landlord and provided that the amount thereof is not reimbursed to Landlord, and (C) legal, accounting and consulting fees incurred in defending a non-criminal audit relating to the operation of the Project or Building (for purposes of illustration only a sales tax audit or utility audit) conducted by a governmental entity (whether or not Landlord prevails in such audit).
(xvii)Costs relating to withdrawal liability or unfunded pension liability under the Multi-Employer Pension Plan Act or similar law;
(xviii)All costs and expenses resulting from the negligence or willful misconduct of Landlord, its employees, agents or contractors and any damages and attorneys’ fees and disbursements and other costs in connection with any judgment, settlement or arbitration award resulting from any tort liability of Landlord, its employees, agents or contractors;
(xix)Any amount resulting from Landlord’s failure to meet its legal or contractual obligations (e.g., failure to pay taxes, defaults under leases or agreements, etc.);
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(xx)Any lease payments for equipment which, if purchased, would be specifically excluded as a capital improvement;
(xxi)Dues to lobbying associations (BOMA fees excepted) or contributions to political or charitable organizations;
(xxii)Costs incurred in connection with the acquisition, sale, financing or other disposition of air rights, transferable development rights, easements or other real property interests;
(xxiii)The cost of overtime heating, air-conditioning and ventilation (including costs related to chilled water) for any tenants of the Building;
(xxiv)Costs and expenses incurred by Landlord in connection with any obligation of Landlord to indemnify any tenant (including Tenant) of the Building pursuant to its lease or otherwise;
(xxv)Any bad debt loss, rent loss or reserves for bad debts or rent loss;
(xxvi)Expenditures for repairing and/or replacing any defect in the initial design or construction of the Building;
(xxvii)Costs incurred by Landlord which result from Landlord’s or any other tenant’s breach of a lease or Landlord’s tortuous or negligent conduct;
(xxviii)Expenses of relocating or moving any tenant(s) of the Building; and
(xxix)Costs and expenses incurred in curing any violation of any Laws existing as of the Commencement Date or compliance with any Laws existing as of the Commencement Date, with respect to a condition existing as of the Commencement Date, unless caused by an act or omission of Tenant or any person claiming by, through or under Tenant.
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EXHIBIT C
WORK LETTER
TURN KEY (NO CAP)
This Exhibit is attached to and made a part of the Lease by and between FLIGHT PHASE I OWNER, LLC, a Delaware limited liability company ("Landlord") and CHROMADEX CORPORATION, a Delaware corporation ("Tenant") for space in the Building located at 1735 Flight Way, Tustin, California.
1.Tenant shall, subject to the express provisions of this Work Letter, accept the Premises in its then condition on the delivery date, "AS-IS," "WITH ALL FAULTS" and Landlord shall have no duty or obligation to improve, or pay for any improvement for, the Premises or any portion thereof (or correct any violation of any statutes, law, ordinance, code or regulation applicable thereto).
2.Landlord, at its sole cost and expense (subject to the terms and provisions of Section 3 below) shall perform improvements to the Premises in accordance with the space plan attached hereto as Schedule 1 (the "Space Plan") using Building standard methods, materials and finishes that are consistent with the materials and finishes used by Landlord in the spec suite in Building A Suite 125. The improvements to be performed in accordance with the Space Plan are hereinafter referred to as the "Landlord Work". Landlord shall enter into a direct contract for the Landlord Work with a general contractor selected by Landlord. In addition, Landlord shall have the right to select and/or approve of any subcontractors used in connection with the Landlord Work. Landlord Work shall include any and all architectural fees, engineering fees, and city permits.
3.All other work and upgrades, subject to Landlord's approval, shall be at Tenant's sole cost and expense, plus any applicable state sales or use tax thereon, payable upon demand as Additional Rent and a construction management fee payable to Landlord equivalent to five percent (5%) of the cost of such work and upgrades (collectively, "Tenant Excess Costs"); provided, however, Tenant may use any available General Use Allowance (as defined in Exhibit E attached to the Lease) to fund the Tenant Excess Costs. Tenant shall be responsible for any Tenant Delay in completion of the Premises resulting from any such other work and upgrades requested or performed by Tenant.
4.Landlord's supervision or performance of any work for or on behalf of Tenant shall not be deemed to be a representation by Landlord that such work complies with applicable insurance requirements, building codes, ordinances, Laws or regulations or that the improvements constructed will be adequate for Tenant's use.
5.Landlord and Tenant agree to cooperate with each other in order to enable the Landlord Work to be performed in a timely manner and with as little inconvenience to the operation of Tenant's business as is reasonably possible. Notwithstanding anything herein to the contrary, any delay in the completion of the Landlord Work or inconvenience suffered by Tenant during the performance of the Landlord Work shall not delay the Commencement Date nor shall it subject Landlord to any liability for any loss or damage resulting therefrom or entitle Tenant to any credit, abatement or adjustment of Rent or other sums payable under the Lease.
6.The Landlord Work shall not include any of Tenant’s trade fixtures, equipment, furniture, furnishings, telephone and data equipment, or other personal property. Tenant shall assume full responsibility to ensure that all items associated with the Landlord Work are adequate to fully meet the requirements of Tenant’s intended use of the Premises.
7.For purposes of this Lease, including for purposes of determining the Commencement Date (pursuant to Section 2 of the Lease), the Landlord Work shall be "Substantially Complete" upon the completion of the Landlord Work in the Premises pursuant to the Space Plan, with the exception of any punch list items that do not materially and adversely affect Tenant’s use and occupancy of the Premises and any tenant fixtures, work-stations, built-in furniture, or equipment to be installed by or on behalf of Tenant in accordance with the terms of this Work Letter.
8.This Exhibit shall not be deemed applicable to any additional space added to the Premises at any time or from time to time, whether by any options under the Lease or otherwise, or to any portion of the original Premises or any additions to the Premises in the event of a renewal or extension of the original Term of the Lease, whether by any options under the Lease or otherwise, unless expressly so provided in the Lease or any amendment or supplement to the Lease.
9.Tenant's and Landlord's Representatives. Tenant has designated David Kroes, Senior Vice President, People Matter(s) as its sole representative with respect to the matters set forth in this Work Letter, who, until further notice to Landlord, shall have full authority and responsibility to act on behalf of the Tenant as required in this Work Letter. Landlord has designated Megan Crabtree as its sole representative with respect to the matters set forth in this Work Letter who, until further notice to Tenant, shall have full authority and responsibility to act on behalf of the Landlord as required in this Work Letter.
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SCHEDULE 1 TO EXHIBIT C
SPACE PLAN
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EXHIBIT D
BUILDING RULES AND REGULATIONS
The following rules and regulations shall apply, where applicable, to the Premises, the Building, the parking areas/garage, the Property and the appurtenances. In the event of a conflict between the following rules and regulations and the remainder of the terms of the Lease, the remainder of the terms of the Lease shall control. Capitalized terms have the same meaning as defined in the Lease. Landlord shall enforce the Rules and Regulations in a uniform and non-discriminatory manner.
1.Sidewalks, doorways, vestibules, halls, stairways and other similar areas shall not be obstructed by Tenant or used by Tenant for any purpose other than ingress and egress to and from the Premises. No rubbish, litter, trash, or material shall be placed, emptied, or thrown in those areas. At no time shall Tenant permit Tenant's employees to loiter in Common Areas or elsewhere about the Building or Property.
2.Plumbing fixtures and appliances shall be used only for the purposes for which designed, and no sweepings, rubbish, rags or other unsuitable material shall be thrown or placed in the fixtures or appliances. Damage resulting to fixtures or appliances by Tenant, its agents, employees or invitees, shall be paid for by Tenant, and Landlord shall not be responsible for the damage.
3.No signs, advertisements or notices shall be painted or affixed to windows, doors or other parts of the Building, except those of such color, size, style and in such places as are first approved in writing by Landlord. All tenant identification and suite numbers at the entrance to the Premises shall be installed by Landlord, at Tenant's cost and expense, using the standard graphics for the Building. Except in connection with the hanging of lightweight pictures and wall decorations, no nails, hooks or screws shall be inserted into any part of the Premises or Building except by the Building maintenance personnel without Landlord's prior approval, which approval shall not be unreasonably withheld.
4.Landlord may provide and maintain in the first floor (main lobby) of the Building an alphabetical directory board or other directory device listing tenants, and no other directory shall be permitted unless previously consented to by Landlord in writing.
5.Tenant shall not place any lock(s) on any door, or install any security system (including, without limitation, card key systems, alarms or security cameras), in the Premises or Building without Landlord's prior written consent, which consent shall not be unreasonably withheld, and Landlord shall have the right to retain at all times and to use keys or other access codes or devices to all locks and/or security system within and into the Premises. A reasonable number of keys to the locks on the entry doors in the Premises shall be furnished by Landlord to Tenant at Landlord's initial cost, and Tenant shall not make any duplicate keys. All keys shall be returned to Landlord at the expiration or early termination of this Lease. Further, if and to the extent Tenant re-keys, re-programs or otherwise changes any locks at the Project, Tenant shall be obligated to restore all such locks and key systems to be consistent with the master lock and key system at the Building, all at Tenant's sole cost and expense.
6.All contractors, contractor's representatives and installation technicians performing work in the Building shall be subject to Landlord's prior approval, which approval shall not be unreasonably withheld, and shall be required to comply with Landlord's standard rules, regulations, policies and procedures, which may be revised from time to time.
7.Movement in or out of the Building of furniture or office equipment, or dispatch or receipt by Tenant of merchandise or materials requiring the use of elevators, stairways, lobby areas or loading dock areas, shall be restricted to hours reasonably designated by Landlord; provided, however, the delivery of normal and customary business supplies shall not be restricted to such hours. Tenant shall obtain Landlord's prior approval by providing a detailed listing of the activity. If approved by Landlord, the activity shall be under the supervision of Landlord and performed in the manner required by Landlord. Tenant shall assume all risk for damage to articles moved and injury to any persons resulting from the activity. If equipment, property, or personnel of Landlord or of any other party is damaged or injured as a result of or in connection with the activity, Tenant shall be solely liable for any resulting damage or loss.
8.Landlord shall have the right to approve the weight, size, or location of heavy equipment or articles in and about the Premises, which approval shall not be unreasonably withheld. Damage to the Building by the installation, maintenance, operation, existence or removal of Tenant's Property shall be repaired at Tenant's sole expense.
9.Corridor doors, when not in use, shall be kept closed.
10.Tenant shall not: (i) make or permit any improper, objectionable or unpleasant noises or odors in the Building, or otherwise unreasonably interfere in any way with other tenants or persons having business with them;
(ii) solicit business or distribute, or cause to be distributed, in any portion of the Building, handbills, promotional materials or other advertising; or (iii) conduct or permit other activities in the Building that might, in Landlord's sole opinion, constitute a nuisance.
11.No animals, except those assisting handicapped persons, shall be brought into the Building or kept in or about the Premises provided that Tenant’s employees’ dogs may be brought onto the Project subject to compliance with the Dog Visitation Policy set forth below as part of this Exhibit D.
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12.No inflammable, explosive or dangerous fluids or substances shall be used or kept by Tenant in the Premises, Building or about the Property, except for those substances as are typically found in similar premises used for general office purposes and are being used by Tenant in a safe manner and in accordance with all applicable Laws, rules and regulations. Tenant shall not, without Landlord's prior written consent, use, store, install, spill, remove, release or dispose of, within or about the Premises or any other portion of the Property, any asbestos-containing materials or any solid, liquid or gaseous material now or subsequently considered toxic or hazardous under the provisions of 42 U.S.C. Section 9601 et seq. or any other applicable environmental Laws which may now or later be in effect. Tenant shall comply with all Laws pertaining to and governing the use of these materials by Tenant, and shall remain solely liable for the costs of abatement and removal.
13.Tenant shall not use or occupy the Premises in any manner or for any purpose which might injure the reputation or impair the present or future value of the Premises or the Building. Tenant shall not use, or permit any part of the Premises to be used, for lodging, sleeping or for any illegal purpose.
14.Tenant shall not take any action which would violate Landlord's labor contracts or which would cause a work stoppage, picketing, labor disruption or dispute, or interfere with Landlord's or any other tenant's or occupant's business or with the rights and privileges of any person lawfully in the Building ("Labor Disruption"). Tenant shall take the actions necessary to resolve the Labor Disruption, and shall have pickets removed and, at the request of Landlord, immediately terminate any work in the Premises that gave rise to the Labor Disruption, until Landlord gives its written consent for the work to resume. Tenant shall have no claim for damages against Landlord or any of the Landlord Related Parties, nor shall the Commencement Date of the Term be extended as a result of the above actions.
15.Tenant shall not install, operate or maintain in the Premises or in any other area of the Building, electrical equipment that would overload the electrical system beyond its capacity for proper, efficient and safe operation as determined solely by Landlord. Tenant shall not furnish cooling or heating to the Premises, including, without limitation, the use of electronic or gas heating devices, portable coolers (such as "move 'n cools") or space heaters, without Landlord's prior written consent. Tenant shall not use more than its proportionate share of telephone lines and other telecommunication facilities available to service the Building.
16.Tenant shall not operate or permit to be operated a coin or token operated vending machine or similar device (including, without limitation, telephones, lockers, toilets, scales, amusement devices and machines for sale of beverages, foods, candy, cigarettes and other goods), except for machines for the exclusive use of Tenant's employees and invitees.
17.Bicycles and other vehicles are not permitted inside the Building or on the walkways outside the Building, except in areas designated by Landlord.
18.Landlord may from time to time adopt systems and procedures for the security and safety of the Building, its occupants, entry, use and contents. Tenant, its agents, employees, contractors, guests and invitees shall comply with Landlord's systems and procedures.
19.Landlord shall have the right to prohibit the use of the name of the Building or any other publicity by Tenant that in Landlord's reasonable opinion may impair the reputation of the Building or its desirability. Upon written notice from Landlord, Tenant shall refrain from and discontinue such publicity immediately.
20.Neither Tenant nor its agents, employees, contractors, guests or invitees shall smoke or permit smoking in the Common Areas, unless the Common Areas have been declared a designated smoking area by Landlord, nor shall the above parties allow smoke from the Premises to emanate into the Common Areas or any other part of the Building. Landlord shall have the right to designate the Building (including the Premises) as a non-smoking building.
21.Landlord shall have the right to designate and approve standard window coverings for the Premises and to establish rules to assure that the Building presents a uniform exterior appearance. Tenant shall ensure, to the extent reasonably practicable, that window coverings are closed on windows in the Premises while they are exposed to the direct rays of the sun.
22.Deliveries to and from the Premises shall be made only at the times, in the areas and through the entrances and exits reasonably designated by Landlord. Tenant shall not make deliveries to or from the Premises in a manner that might interfere with the use by any other tenant of its premises or of the Common Areas, any pedestrian use, or any use which is inconsistent with good business practice.
23.The work of cleaning personnel shall not be hindered by Tenant after 5:30 P.M., and cleaning work may be done at any time when the offices are vacant. Windows, doors and fixtures may be cleaned at any time. Tenant shall provide adequate waste and rubbish receptacles to prevent unreasonable hardship to the cleaning service.
24.Tenant shall at all times reasonably comply with, and shall cause its employee, agents and invitees to comply with such governmental and regulatory orders, laws, programs, procedures and protocols as may be implemented from time to time at or with respect to the Building in order to address any events or circumstances that may pose danger or risk to persons or property relating to community health emergencies, including epidemic, quarantine, or any infectious disease-related outbreak. Such cooperation and compliance may include compliance with reasonable Building shutdown orders and reduced access to use of Common Areas, parking facilities, elevators and other Building systems and amenities, and may also include voluntary participation in screening programs intended to identify those persons who may present risk of contagion of infectious diseases and conditions. Tenant shall also immediately notify Landlord or Landlord’s property manager of any persons entering the Building that have a contagious condition related to a pandemic or other health emergency. In the event Tenant becomes aware that an employee or agent of
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Tenant that entered the Building or Tenant’s Premises had contracted a contagious condition related to a pandemic or other health emergency, Tenant shall immediately notify Landlord and the Building’s Property Manager, and in such an event the Premises, Common Areas on the Tenant’s floor, and affected elevators cabs will be thoroughly cleaned and disinfected at Tenant’s expense based upon Landlord's out-of-pocket cost. Landlord will not include in Tenant’s Expenses Common Area disinfecting that is for the exclusive benefit of one tenant, or that is paid for or the responsibility of another tenant of the Building. Tenant shall also follow (and shall cause its employees and invitees to follow) County Health and CDC Guidelines with regard to quarantine and isolation of all persons coming into contact with the infected person(s). Notwithstanding the foregoing, Landlord acknowledges if there is governmental restriction(s) imposed related to limiting access to the Building, Landlord shall reasonably cooperate with Tenant to provide Tenant with the ability to access its servers and equipment if necessary.
PARKING RULES AND REGULATIONS
(i)Landlord reserves the right to establish and reasonably change the hours for the parking areas, on a uniform and non-discriminatory basis, from time to time. Tenant shall not store or permit its employees to store any automobiles in the parking areas without the prior written consent of the operator. Except for emergency repairs, Tenant and its employees shall not perform any work on any automobiles while located in the parking areas, or on the Property or the Project. If it is necessary for Tenant or its employees to leave an automobile in the Parking Facility overnight, Tenant shall provide the operator with prior notice thereof designating the license plate number and model of such automobile.
(ii)Cars must be parked entirely within the stall lines painted on the floor, and only small cars may be parked in areas reserved for small cars.
(iii)All directional signs and arrows must be observed.
(iv)The speed limit shall be 5 miles per hour.
(v)Parking spaces reserved for handicapped persons must be used only by vehicles properly designated.
(vi)Parking is prohibited in all areas not expressly designated for parking, including without limitation:
(a)areas not striped for parking
(b)aisles
(c)where "no parking" signs are posted
(d)ramps
(e)loading zones
(vii)Parking stickers, key cards or any other devices or forms of identification or entry supplied by the operator shall remain the property of the operator. Such device must be displayed as requested and may not be mutilated in any manner. The serial number of the parking identification device may not be obliterated. Parking passes and devices are not transferable and any pass or device in the possession of an unauthorized holder will be void.
(viii)Parking areas managers or attendants are not authorized to make or allow any exceptions to these Rules.
(ix)Every parker is required to park and lock his/her own car.
(x)Loss or theft of parking pass, identification, key cards or other such devices must be reported to Landlord and to the parking areas manager immediately. Any parking devices reported lost or stolen found on any authorized car will be confiscated and the illegal holder will be subject to prosecution. Lost or stolen passes and devices found by Tenant or its employees must be reported to the office of the parking areas immediately.
(xi)Washing, waxing, cleaning or servicing of any vehicle by the customer and/or his agents is prohibited. Parking spaces may be used only for parking automobiles.
(xii)Tenant agrees to acquaint all persons to whom Tenant assigns a parking space with these Rules.
A.TENANT ACKNOWLEDGES AND AGREES THAT, TO THE FULLEST EXTENT PERMITTED BY LAW, EXCEPT AS TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF LANDLORD OR LANDLORD’S AGENTS AND EMPLOYEES, LANDLORD SHALL NOT BE RESPONSIBLE FOR ANY LOSS OR DAMAGE TO TENANT OR TENANT'S PROPERTY (INCLUDING, WITHOUT LIMITATIONS, ANY LOSS OR DAMAGE TO TENANT'S AUTOMOBILE OR THE CONTENTS THEREOF DUE TO THEFT, VANDALISM OR ACCIDENT) ARISING FROM OR RELATED TO TENANT'S USE OF THE PARKING AREAS OR EXERCISE OF ANY RIGHTS UNDER THIS PARKING AGREEMENT. THE LIMITATION ON LANDLORD'S LIABILITY UNDER THE PRECEDING SENTENCE SHALL NOT APPLY HOWEVER TO LOSS OR DAMAGE ARISING DIRECTLY FROM LANDLORD'S WILLFUL MISCONDUCT.
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B.Without limiting the provisions of Paragraph A above, Tenant hereby voluntarily releases, discharges, waives and relinquishes any and all actions or causes of action for personal injury or property damage occurring to Tenant arising as a result of parking in the parking areas or any activities incidental thereto, wherever or however the same may occur, and further agrees that Tenant will not prosecute any claim for personal injury or property damage against Landlord or any of its officers, agents, servants or employees for any said causes of action. It is the intention of Tenant by this instrument, to exempt and relieve Landlord from liability for personal injury or property damage caused by negligence. If Tenant fails to comply with the parking rules and regulations set forth herein, Landlord shall have the right to take such action as may be necessary to enforcement thereof, which may include the towing of vehicles, attachment of wheel immobilizer units (boots) and the like.
C.The provisions of Section 29 of the Lease are hereby incorporated by reference as if fully recited.
By executing the Lease to which this Exhibit D is attached, Tenant acknowledges that it has read and agreed to be bound by the forgoing Building Rules and Regulations. Tenant further confirms that it has been fully and completely advised of the potential dangers incidental to parking in the parking areas and the terms and conditions set forth above.
DOG VISITATION POLICY
Dog Visitation Policy
Bringing a dog to work is a privilege and requires complete responsibility on the part of the person bringing the dog to work (each, an "Owner"). Owners must recognize that (1) not all employees and/or visitors and/or other occupants of the Project appreciate dogs in the office, and (2) certain employees and/or visitors and/or other occupants of the Project may have intolerance to dogs, such as allergy, fear of, or phobia. This policy does not apply to the use of service animals at work, and appropriate arrangements will be determined in such cases. Owners are required to follow these rules when bringing a dog to the Project and such other rules as may be implemented by Landlord and/or Tenant from time to time.
Prerequisites for a Dog to be at the Project
•Properly licensed and vaccinated with proof of such license and vaccination available upon request.
•Free from contagious illness and internal and external parasites including fleas.
•Exhibits appropriate office behavior: Walks beside you on a leash; reliably housebroken; remains calm when left alone; well socialized to people, places, sounds, and objects; enjoys being around people.
•Does not exhibit inappropriate office behavior (including but not limited to): aggression, growling, barking, chasing, biting, nipping, over-exuberance, dominance, territorialism, running away, having accidents (i.e., urinating indoors), chewing or damaging office furniture or equipment, whining, howling, or otherwise interfering with an employee's ability to do their work. Inappropriate office behavior by a dog will result in the animal no longer being allowed in the Building as reasonably determined by Landlord.
•Dogs must be washed regularly.
Dog Boundaries at Work
•Dogs must be on a leash or confined to a crate while entering and leaving the Project and may not be left alone in any Common Area.
•Dogs must not be in or near any cafeteria, break rooms, bathrooms, or conference rooms.
•Dogs must be taken to relieve themselves in the designated area only and shall not relieve themselves in any other area in the Project. If a dog relieves itself in any other areas in the Project other than the area designated by Landlord, then Tenant shall immediately notify property management in order for property management to clean the areas affected. In such case, Tenant shall pay all charges associated with cleaning and removing any waste generated by such dogs.
•In no event shall Tenant or its employees collectively bring more than five (5) dogs at any one time to the Project. Any dogs that are brought to the Project must first be registered with the property manager and, in connection with such registration, the dog owner shall provide evidence of liability insurance for the dog, vaccination records and any other information reasonably requested by Landlord.
Expectations of Dog Owners
•Owners must supervise their dogs at all times, or appoint a willing and able watcher.
•Owners must clean up after their dogs and bring supplies such as pet waste bags.
•Owners should maintain adequate liability insurance coverage against dog mishaps and take full responsibility.
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EXHIBIT E
ADDITIONAL PROVISIONS
This Exhibit is attached to and made a part of the Lease by and between FLIGHT PHASE I OWNER, LLC, a Delaware limited liability company ("Landlord") and CHROMADEX CORPORATION, a Delaware corporation ("Tenant") for space in the Building located at 1735 Flight Way, Tustin, CA.
1.Abatement of Rent. Provided that Tenant faithfully performs all of the terms and conditions of this Lease, Landlord hereby agrees to abate (a) Tenant's obligation to pay Base Rent for the second (2nd) through the thirteenth (13th) full calendar months of the initial Term and (b) Tenant's obligation to pay Tenant's Pro Rata Share of Taxes and Expenses for the second (2nd) through the seventh (7th) full calendar months of the initial Term. During such abatement period, Tenant shall still be responsible for the payment of all of its other monetary obligations under this Lease including, without limitation, the payment of Tenant's Pro Rata Share of Taxes and Expenses for the eighth (8th) through the thirteenth (13th) full calendar months of the initial Term. In the event of a Default by Tenant under the terms of this Lease that results in early termination pursuant to the provisions of Section 19 of this Lease, then as a part of the recovery set forth in Section 19 of this Lease, Landlord shall be entitled to recover the Base Rent and Tenant's Pro Rata Share of Taxes and Expenses that were abated under the provisions of this Section 1.
2.Beneficial Occupancy Period. Notwithstanding anything to the contrary contained herein, Tenant shall have the right to commence business from the Premises and install furniture, fixtures and equipment in the Premises during the period (the "Beneficial Occupancy Period") from the date of Substantial Completion of the Landlord Work through the day prior to the Commencement Date, provided that (a) a certificate of occupancy (or its equivalent) shall have been issued by the appropriate governmental authorities for the Premises, and (b) all of the terms and conditions of this Lease shall apply during the Beneficial Occupancy Period (if any), except that Tenant's obligation to pay Base Rent and Tenant's Pro Rata Share of Expenses and Taxes shall not apply during the Beneficial Occupancy Period. Prior to Tenant's entry into the Premises as permitted by the terms of this Section 2, Tenant shall submit certificates of insurance reasonably acceptable to Landlord.
3.General Use Allowance. Landlord hereby agrees to reimburse Tenant for costs (collectively, "FF&E Costs") up to $77,990.00 (the "General Use Allowance") that Tenant actually incurs in purchasing and installing furniture, fixtures and equipment in the Premises, moving into the Premises and for any Tenant Excess Costs (as defined in Exhibit C attached to the Lease). Landlord shall reimburse Tenant for FF&E Costs actually incurred by Tenant, up to the General Use Allowance, within thirty (30) calendar days after Landlord's receipt of invoices evidencing Tenant's FF&E Costs. Any portion of the General Use Allowance that is not so requested by Tenant on or before February 29, 2024 (“Allowance Deadline”) shall revert to Landlord. If Tenant uses less than the General Use Allowance for FF&E Costs, Tenant may request in a written notice (“Rent Credit Notice”) delivered to Landlord on or before Allowance Deadline, that any unused portion of the General Use Allowance be applied as a credit against Tenant’s Base Rent obligations. If Tenant timely and properly delivers the Rent Credit Notice to Landlord, the credit against Base Rent shall commence following the later of (a) the first day of the calendar month following the delivery of the Rent Credit Notice to Landlord or (b) August 1, 2023. Any portion of the General Use Allowance that is not so requested by Tenant on or before the Allowance Deadline shall revert to Landlord.
4.Identity Signage. Landlord shall provide Tenant with, at Tenant's expense, (a) one Building standard Premises suite identification signage and (b) Building-standard inclusion on any Building directory board signage.
5.Conference Center Usage. Subject to availability and payment by Tenant for any Tenant requested special services and the standard take down and cleaning costs charge, during the Term of the Lease, Landlord shall provide Tenant with use of a single room within the Conference Center at no charge on one (1) day per calendar month on a non-cumulative basis (i.e. Tenant may not carry any unused free conference room usage forward for use in future calendar months).
6.Building Systems Condition. Landlord represents and warrants to Tenant that on the date of delivery of the Premises to Tenant (the “General Warranty Date”), the base shell and core of the Building and the building systems serving the Premises installed as part of Landlord's base building work (including, without limitation, the roof and floor slabs, fire/life safety system, the lighting and heating, ventilation and air conditioning) shall be in good working order in effect as of the General Warranty Date (collectively, the “Landlord Warranty”). In the event that it is determined that the Landlord Warranty was untrue at any time on or before the General Warranty Date, Landlord shall not be in default under this Lease if after Landlord receives written notice of the Landlord Warranty that is untrue, Landlord shall promptly take all actions necessary to correct the untrue Landlord Warranty at Landlord's sole cost and expense. If the Landlord Warranty is untrue (an “Untrue Landlord Warranty”), Tenant shall, as Tenant's sole and exclusive remedy, notify Landlord in writing (the “Warranty Notice”) within thirty (30) days after the later of the General Warranty Date, time being of the essence (the “Warranty Notice Date”), of the details pertaining to each Untrue Landlord Warranty. The Warranty Notice shall state the specific way in which the Landlord Warranty is untrue. Landlord shall have no responsibility to correct any Untrue Landlord Warranty unless Tenant notifies Landlord on or before the Warranty Notice Date in a Warranty Notice of the Untrue Landlord Warranty, and if Tenant notifies Landlord of the Untrue Landlord Warranty after the Warranty Notice Date, Landlord shall have no obligation pursuant to this Section 6 to correct the Untrue Landlord Warranty. Notwithstanding the foregoing, Landlord shall have no obligation pursuant to this Section 6 to correct an Untrue Landlord Warranty if the repair is necessitated by the negligence or misuse of Tenant or its agents, employees or contractors.
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EXHIBIT F
INTENTIONALLY OMITTED
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EXHIBIT G
STATEMENT OF TENANT REGARDING LEASE COMMENCEMENT
The undersigned as Tenant under that certain Office Lease Agreement made and entered into by and between FLIGHT PHASE I OWNER, LLC, a Delaware limited liability company, as Landlord, and the undersigned, as Tenant (the "Lease"), hereby certifies that:
1)The undersigned has entered into occupancy of the Premises described in said Lease on
, 20 .
2)All conditions under said Lease to be performed by Landlord have been satisfied, and on this date there are not existing defenses or offsets which the undersigned has against the enforcement of said Lease by Landlord.
3)The Term of the Lease commenced, or will commence, as of , 20 , which date shall be the "Commencement Date" under the terms of the Lease.
4)The "Expiration Date" of the Lease is , 20 , subject to extension or earlier termination in accordance with the terms and conditions of the Lease.
5)Tenant accepts the Premises in its "As-Is" condition as of the date of Tenant's possession thereof.
6)Tenant's obligation to pay Base Rent will commence on , 20 . The Abatement Period (as defined in Exhibit E of the Lease) will commence on , and end on , 20 .
7)Tenant's obligation to pay Tenant's Pro Rata Share of Expenses and Taxes will commence on
, 20 .
Yours very truly,
, a
By:
Name:
Its:
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RIDER NO. 1 TO OFFICE LEASE
EXTENSION OPTION RIDER
This Rider No. 1 is made and entered into by and between FLIGHT PHASE I OWNER, LLC, a Delaware limited liability company ("Landlord"), and CHROMADEX CORPORATION, a Delaware corporation ("Tenant"), as of the day and year of the Lease between Landlord and Tenant to which this Rider No. 1 is attached. Landlord and Tenant hereby agree that, notwithstanding anything contained in the Lease to the contrary, the provisions set forth below shall be deemed to be part of the Lease and shall supersede any inconsistent provisions of the Lease. All references in the Lease and in this Rider No. 1 to the "Lease" shall be construed to mean the Lease (and all exhibits and Riders attached thereto), as amended and supplemented by this Rider No. 1. All capitalized terms not defined in this Rider No. 1 shall have the same meaning as set forth in the Lease.
1.Landlord hereby grants to Tenant one (1) option (the "Extension Option") to extend the Term of the Lease for an additional period of five (5) years (the "Option Term"), on the same terms, covenants and conditions as provided for in the Lease during the initial Term, except for the Monthly Base Rent, which shall equal the greater of (a) the Monthly Base Rent payable by Tenant during the last month of the then current Term immediately preceding the Option Term or (b) the "fair market rental rate" for the Premises for the Option Term as defined and determined in accordance with the provisions of Section 3 below.
2.The Extension Option must be exercised, if at all, by an irrevocable written exercise notice ("Extension Notice") delivered by Tenant to Landlord no sooner than that date which is eighteen (18) months and no later than that date which is twelve (12)months prior to the expiration of the then current term of the Lease. The Extension Option shall, at Landlord's sole option, not be deemed to be properly exercised if, at the time the Extension Option is exercised or on the scheduled commencement date for the Option Term, (a) Tenant has failed to cure a Default pursuant to Section 18 of the Lease, or (b) Tenant has assigned all or any portion of the Lease or its interest therein to other than an Affiliated Assignee or sublet all or any portion of the Premises to other than an Affiliate. Provided Tenant has properly and timely exercised the Extension Option, the then current term of the Lease shall be extended by the Option Term, and all terms, covenants and conditions of the Lease shall remain unmodified and in full force and effect, except that the Monthly Base Rent shall be as set forth above.
3.If Landlord determines that the Monthly Base Rent for the Option Term shall be the Monthly Base Rent payable by Tenant during the last month of the then current Term pursuant to Section 1(a) above, such determination shall be conclusive, Tenant shall have no right to object thereto, and the following provisions regarding the determination of the fair market rental rate shall not apply. If, however, Landlord determines that the Monthly Base Rent for the applicable Option Term shall be the fair market rental rate pursuant to Section 1(b) above, then such fair market rental rate shall be determined in accordance with the Fair Market Rental Rate Rider attached to the Lease as Rider No. 2. The Monthly Base Rent for the Option Term shall include the periodic rental increases that would be included for space leased for the period of the Option Term.
4.Notwithstanding the fair market rental rate determined pursuant to Section 3 above, in no event shall the Monthly Base Rent payable during the Option Term be less than the Monthly Base Rent payable during the last month of the immediately preceding Term.
5.Tenant's Extension Option is further subject to the terms and conditions of Rider No. 3 attached
hereto.
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RIDER NO. 2 TO OFFICE LEASE
FAIR MARKET RENTAL RATE
This Rider No. 2 is made and entered into by and between FLIGHT PHASE I OWNER, LLC, a Delaware limited liability company ("Landlord"), and CHROMADEX CORPORATION, a Delaware corporation ("Tenant"), as of the day and year of the Lease between Landlord and Tenant to which this Rider No. 2 is attached. Landlord and Tenant hereby agree that, notwithstanding anything contained in the Lease to the contrary, the provisions set forth below shall be deemed to be part of the Lease and shall supersede any inconsistent provisions of the Lease. All references in the Lease and in this Rider No. 2 to the "Lease" shall be construed to mean the Lease (and all exhibits and Riders attached thereto), as amended and supplemented by this Rider No. 2. All capitalized terms not defined in this Rider No. 2 shall have the same meaning as set forth in the Lease.
1.The term "fair market rental rate" as used in the Lease and any Rider attached thereto shall mean the annual amount per square foot, projected during the Option Term that a willing, non-equity renewal tenant (excluding sublease and assignment transactions) would pay, and a willing, institutional landlord of a comparable Class "A" office building located in the John Wayne Airport market area (the "Comparison Area") would accept, in an arm's length transaction (what Landlord is accepting in then current transactions for the buildings located in the Project may be used for purposes of projecting rent for the Option Term), for space of comparable size, quality and floor height as the Premises, taking into account the age, quality and layout of the existing improvements in the Premises, and taking into account items that professional real estate brokers or professional real estate appraisers customarily consider, including, but not limited to, rental rates, space availability, tenant size, tenant improvement allowances, project amenities, parking charges and any other lease considerations, if any, then being charged or granted by Landlord or the lessors of such similar office buildings. All economic terms other than Monthly Base Rent, such as tenant improvement allowance amounts, if any, operating expense allowances, parking charges, etc., will be established by Landlord and will be factored into the determination of the fair market rental rate for the Option Term. Accordingly, the fair market rental rate will be an effective rate, not specifically including, but accounting for, the appropriate economic considerations described above. The fair market rental rate shall include the periodic rental increases that would be included for space leased for the period of the Option Term.
2.In the event the determination of fair market rental rate is required under the Lease (as set forth in Rider No. 1 above), Landlord shall provide written notice of Landlord's determination of the fair market rental rate (“Landlord Rent Notice”) not later than the date that is eleven (11) months prior to the expiration of the initial Term of the Lease. Tenant shall have ten (10) calendar days after receipt of Landlord's notice of the fair market rental rate within which to accept or reject such fair market rental rate by delivering written notice ("Tenant Rent Response Notice") thereof to Landlord. For purposes of this Rider No. 2, the last day of such 10-calendar day period shall be referred herein as the "Objection Date". Tenant's failure to deliver the Tenant Rent Response Notice on or before the Objection Date shall be deemed to constitute Tenant's acceptance of the fair market rental rate set forth in the Landlord Rent Notice. If Tenant timely objected in the Tenant Rent Response Notice to Landlord’s fair market rental rate, the parties shall follow the procedure and the fair market rental rate shall be determined as set forth in Section 3 below.
3.If Tenant timely and appropriately objects to Landlord's determination of the fair market rental rate in the Tenant Rent Response Notice, Landlord and Tenant shall attempt to agree upon the fair market rental rate using their best good-faith efforts. If Landlord and Tenant fail to reach agreement within twenty-one (21) calendar days following the delivery of the Tenant Rent Response Notice ("Outside Agreement Date"), then each party shall make a separate determination of the fair market rental rate which shall be submitted to each other and to arbitration in accordance with the following items (i) through (vii):
(i)Landlord and Tenant shall each appoint, within ten (10) calendar days of the Outside Agreement Date, one arbitrator who shall by profession be a current real estate broker or appraiser of comparable commercial properties in the Comparison Area, and who has been active in such field over the last ten (10) years. The determination of the arbitrators shall be limited solely to the issue of whether Landlord's or Tenant's submitted fair market rental rate is the closest to the actual fair market rental rate as determined by the arbitrators, taking into account the requirements of Section 1 above (i.e., the arbitrators may only select Landlord's or Tenant's determination of the fair market rental rate and shall not be entitled to make a compromise determination).
(ii)The two (2) arbitrators so appointed shall within five (5) business days of the date of the appointment of the last appointed arbitrator agree upon and appoint a third (3rd) arbitrator who shall be qualified under the same criteria set forth hereinabove for qualification of the initial two (2) arbitrators.
(iii)The three (3) arbitrators shall within fifteen (15) calendar days of the appointment of the third (3rd) arbitrator reach a decision as to whether the parties shall use Landlord's or Tenant's submitted fair market rental rate, and shall notify Landlord and Tenant thereof.
(iv)The decision of the majority of the three (3) arbitrators shall be binding upon Landlord and
Tenant.
(v)If either Landlord or Tenant fails to appoint an arbitrator within ten (10) calendar days after the applicable Outside Agreement Date, the arbitrator appointed by one (1) of them shall reach a decision, notify Landlord and Tenant thereof, and such arbitrator's decision shall be binding upon Landlord and Tenant.
(vi)If the two (2) arbitrators fail to agree upon and appoint a third (3rd) arbitrator, or both parties fail to appoint an arbitrator, then the appointment of the third (3rd) arbitrator or any arbitrator shall be dismissed and the matter to be decided shall be forthwith submitted to arbitration under the provisions of the American Arbitration Association, but subject to the instruction set forth in this Section 3.
(vii)The cost of arbitration shall be paid by Landlord and Tenant equally.
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RIDER NO. 3 TO OFFICE LEASE
OPTIONS IN GENERAL
This Rider No. 3 is made and entered into by and between FLIGHT PHASE I OWNER, LLC, a Delaware limited liability company ("Landlord"), and CHROMADEX CORPORATION, a Delaware corporation ("Tenant"), as of the day and year of the Lease between Landlord and Tenant to which this Rider No. 3 is attached. Landlord and Tenant hereby agree that, notwithstanding anything contained in the Lease to the contrary, the provisions set forth below shall be deemed to be part of the Lease and shall supersede any inconsistent provisions of the Lease. All references in the Lease and in this Rider No. 3 to the "Lease" shall be construed to mean the Lease (and all exhibits and Riders attached thereto), as amended and supplemented by this Rider No. 3. All capitalized terms not defined in this Rider No. 3 shall have the same meaning as set forth in the Lease.
(a)Definition. As used in this Lease and any Rider or Exhibit attached hereto, the word "Option" shall mean all options granted to Tenant under the Lease, including the Extension Option pursuant to Rider No. 1 attached hereto.
(b)Option Personal. The Option granted to Tenant is personal to the original Tenant executing this Lease (the "Original Tenant") and any Affiliated Assignee and may be exercised only by the Original Tenant or an Affiliated Assignee while occupying the entire Premises (including any space occupied by an Affiliate pursuant to any then existing sublease(s)) and may not be exercised or be assigned, voluntarily or involuntarily, by any person or entity other than the Original Tenant or an Affiliated Assignee. The Option granted to Tenant under this Lease is not assignable separate and apart from this Lease, nor may the Option be separated from this Lease in any manner, either by reservation or otherwise.
(c)Effect of Default on Options. Tenant will have no right to exercise any Option, notwithstanding any provision of the grant of option to the contrary, and Tenant's exercise of any Option may be nullified by Landlord and deemed of no further force or effect, if (i) Tenant is in Default of any monetary obligation or material non-monetary obligation under the terms of this Lease as of Tenant's exercise of the Option in question or at any time after the exercise of any such Option and prior to the commencement of the Option event, or (ii) Tenant has been in uncured Monetary Default under the Lease more than twice prior to the date of delivery of the Extension Notice.
(d)Option as Economic Term. The Option is hereby deemed an economic term which Landlord, in its sole and absolute discretion, may or may not offer in conjunction with any future extensions of the Term.
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4823-6605-5163.8 | RIDER NO. 3 -1- | FLIGHT AT TUSTIN LEGACY ChromaDex |