TECHNOLOGY LICENSE AGREEMENT

Technology License Assignment Agreement

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Title: TECHNOLOGY LICENSE AGREEMENT
Governing Law: New York Date: 8/12/2008

Search Technology License Assignment Agreement by:

Exhibit 10.1

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

TECHNOLOGY LICENSE AGREEMENT
between
THE RESEARCH FOUNDATION OF STATE UNIVERSITY OF NEW YORK
and
ChromaDex, Inc.

This Technology License Agreement (“Agreement”) is effective as of June 30, 2008 (“Effective Date”) by and between The Research Foundation of State University of New York, on behalf of University at Buffalo, a non-profit corporation organized and existing under the laws of the State of New York (“Foundation”) and ChromaDex Inc., a California corporation, with an address at 10005 Muirlands Boulevard, Suite G, Irvine, California 92618 (“Licensee”).

WHEREAS, Foundation and Licensee wish to enter into an exclusive license agreement to facilitate the development and commercialization of certain technology developed at the University at Buffalo so that this technology may be utilized to the fullest extent for the benefit of Licensee, Foundation, the inventor(s) and the public;

NOW, THEREFORE, in consideration of the terms and considerations hereinafter set forth, the parties agree as follows:

1.		DEFINITIONS

		All capitalized terms used in this Agreement will have the meanings stated below or defined elsewhere in the Agreement.

1.1.

“ Affiliate ” means every corporation or entity which, directly or indirectly, or through one or more intermediaries, controls, is controlled by, or is under common control with Licensee.

1.2.

“ Cosmetic Application ” means the applications where products incorporating leucoanthocyanidins, anthocyanidins and anthocyanins are used for cosmetic purposes, including but not limited to applications where the product is rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body for cleansing, beautifying, promoting attractiveness, or altering the appearance including, but not limited to, skin moisturizers, perfumes, lipsticks, fingernail polishes, eye and facial makeup preparations, shampoos, permanent waves, hair colors, toothpastes, and deodorants. This application also includes the use of any leucoanthocyanidins, anthocyanidins and anthocyanins intended for use as a component of a cosmetic product.

1.3.

“ Field ” means the field of microbial production of leucoanthocyanidins, anthocyanidins and anthocyanins.

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

1.4.

“ Fine Chemical Product Application ” means applications, other than Cosmetic Application, Food Additive Application, Nutraceutical Application, Research Field Application or Pharmaceutical Application, that use a purified leucoanthocyanidin, anthocyanidin or anthocyanin.

	1.5.		“ Food Additive Application ” means applications where any leucoanthocyanidins, anthocyanidins and anthocyanins are used, the intended use of which results or may reasonably be expected to result, directly or indirectly, in its becoming a component or otherwise affecting the characteristics of any food, including but not limited to colorants, flavors, and fragrances.

	1.6.		“Inventors” means Mattheos Koffas, Effendi Leonard, Yajun Yan and Joseph Chemler.

	1.7.		“Know-How and Material Rights ” means confidential and/or proprietary information or materials, whether or not patented or patentable, in which Foundation has a legal interest and is free to disclose to Licensee, as set forth in Exhibit B attached hereto which is specific to the design, development, manufacture and marketing of Technology and products, and which was developed prior to the Effective Date by the Inventors at the University at Buffalo.

	1.8.		“ Licensed Product ” means all Patent Products and Technology Products as defined herein.

	1.9.		“ Licensed Service ” means all Patent Services and Technology Services as defined herein.

1.10.

“ Net Sales of Licensed Product or Licensed Service ” means the gross revenues actually received by Licensee, Affiliates and Sublicensees from the manufacture, use, sale, lease or other transfer of Licensed Product or Licensed Service, less sales and/or use taxes actually paid, import and/or export duties actually paid, outbound transportation paid, prepaid or allowed, and amounts allowed or credited due to returns (not to exceed the original billing or invoice amount). In this context, gross revenues will also include the fair market value of any non-cash consideration actually received by Licensee, Affiliates and Sublicensees for the manufacture, use, sale, lease, or other transfer of Licensed Product. Net Sales does not include Sublicensing Revenue.

1.11.

“ Net Sales of Technology Product or Technology Service ” means the gross revenues actually received by Licensee, Affiliates and Sublicensees from the manufacture, use, sale, lease or other transfer of Technology Product or Technology Service, less sales and/or use taxes actually paid, import and/or export duties actually paid, outbound transportation paid, prepaid or allowed, and amounts allowed or credited due to returns (not to exceed the original billing or invoice amount). In this context, gross revenues will also include the fair market value of any non-cash consideration actually received by Licensee, Affiliates and Sublicensees for the manufacture, use, sale, lease, or other transfer of Technology Product or Technology Service. Net Sales does not include Sublicensing Revenue.

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

1.12.

“ Nutraceutical Application ” means applications using leucoanthocyanidins, anthocyanidins and anthocyanins as dietary supplements or food supplements thought to have a beneficial effect on human or animal health.

1.13.

“ Patent Costs ” means all reasonable costs incident to filing, prosecuting and maintaining the patents associated with the Patent Rights in the United States and elected foreign countries, and any and all reasonable costs incurred in filing continuations, divisional applications or related applications thereon and any re-examinations or reissue proceedings thereof.

1.14.

“ Patent Product ” means any product that if made, used, offered for sale, sold, imported, leased or otherwise transferred in the United States or any other country would, but for the license granted herein, infringe one or more Valid Claims.

1.15.

“Patent Rights ” means Foundation’s patent rights to any subject matter claimed in or covered by (a) any pending or issued United States or foreign patent or any patent application listed in Exhibit A attached hereto, including any reissues or reexaminations thereof; (b) any continuation or divisional applications of the patents and patent applications listed in Exhibit A; and (c) any patents issued on continuation or divisional applications, including reissues and reexaminations, of the patents and patent applications listed in Exhibit A.

1.16.

“ Patent Service ” means any method, process, procedure or service that would, but for the license granted herein, infringe one or more Valid Claims.

1.17.

“Pharmaceutical Application ” means applications where devices, kits, or medications incorporating leucoanthocyanidins, anthocyanidins and anthocyanins are used (a) in the diagnosis, cure, mitigation, treatment, or prevention of disease (b) in or as articles (other than food) intended to affect the structure or any function of the body of man or other animals

1.18.

“ Research Field Application ” means applications where devices, kits, or leucoanthocyanidins, anthocyanidins and anthocyanins are used for research purposes only.

1.19.

“ Sublicensing Revenue ” means any payments that Licensee or an Affiliate receives from a Sublicensee in consideration of the sublicense of the rights granted Licensee under this Agreement, including without limitation, license fees, milestone payments, license maintenance fees and other payments. Sublicensing Revenue does not include royalties received by Licensee from Sublicensees.

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

1.20.

“ Sublicensee ” means any non-Affiliate third party to whom Licensee grants a sublicense of any or all of the rights granted Licensee under this Agreement.

1.21.

“ Technology” means technology developed by Inventors at the University at Buffalo on or before the Effective Date and which Foundation is free to disclose to Licensee, including (a) confidential and/or proprietary information and materials in which Foundation has a legal interest and as described in Foundation Docket Nos. [*] and [*] titled [*], (b) Know-How and Material Rights.

1.22.

“ Technology Products ” means any products that incorporate, utilize, or are made with the use of the Technology, or part thereof, but that are not Patent Products.

1.23.

“ Technology Services ” means any method, process, procedure or service that incorporates, utilizes, or make use of the Technology, or part thereof, but that are not Patent Services.

1.24.

“ Term ” means the period of time beginning on the Effective Date and ending on the later of (i) the expiration date of the last to expire Patent Right, or (ii) ten (10) years from the date of the first sale of a Licensed Product.

1.25. “ Territory ” means worldwide.

1.26.

“Valid Claim” means an unexpired claim in an issued unexpired patent or a claim of a pending patent application or supplementary protection certificate within the Patent Rights that has not been revoked, abandoned, disclaimed or withdrawn, or held unenforceable, unpatentable or invalid by a court of competent jurisdiction in a final judgment that has not been appealed within the time allowed by law or from which there is no further appeal.

GRANT OF RIGHTS AND RETAINED RIGHTS

2.1.

Exclusive License. Subject to the terms of this Agreement, Foundation grants to Licensee an exclusive license under the Patent Rights and Know-How and Material Rights to make, have made, use, sell and offer for sale Licensed Products and Licensed Services in the Field for Nutraceutical Application, Food Additive Application, Fine Chemical Product Application, Research Field Application and Cosmetic Application and Territory and during the Term. The license granted is subject to the overriding obligations to the U.S. Government set forth in 35 USC 200-212 and applicable governmental implementing regulations. The license granted is subject to the provisions of Article 4 entitled “DUE DILIGENCE AND MARKETING OBLIGATIONS”.

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

2.2.

Non-Exclusive License. Subject to the terms of this Agreement, Foundation grants to Licensee a non-exclusive license under the Patent Rights and Know-How and Material Rights to make, have made, use, sell and offer for sale Licensed Products and Licensed Services in the Field for Pharmaceutical Application and Territory and during the Term. The license granted is subject to the overriding obligations to the U.S. Government set forth in 35 USC 200-212 and applicable governmental implementing regulations. The license granted is subject to the provisions of Article 4 entitled “DUE DILIGENCE AND MARKETING OBLIGATIONS”.

	2.3.		First Look Right. Subject to any existing or hereafter incurred obligations to the United States government or agency thereof arising out of the use of government funds or to any third party arising out of the use of third party’s sponsored research funds, Foundation grants Licensee an exclusive right (“First Look Right”) to negotiate in good faith a definitive license agreement for an exclusive (or non-exclusive, at Licensee’s option), royalty bearing, worldwide license with right to sublicense to use and otherwise exploit each improvement to the Technology, Licensed Products and Licensed Services within the Field developed by the Inventors while employed at the University at Buffalo during the Term and owned or controlled by Foundation (“Improvements”).

			The First Look Right will commence on the date that Foundation discloses the Improvement to Licensee (“Improvement Disclosure”). Foundation’s Improvement Disclosure will include sufficient information to allow the Licensee to evaluate such Improvement and its potential for development as or in connection with a Licensed Product or Licensed Service. Licensee will have [*] days (“Notice Period”) from the date of receipt of Foundation’s disclosure to (a) evaluate the Improvement and (b) provide written notice (“First Look Notice”) to Foundation of its interest in entering into negotiations for a license under the Improvement to make, have made, use, sublicense, sell, offer for sale, have sold, import and export products or services that incorporate, utilize or are made with the use of such Improvements. If and when Foundation receives the First Look Notice, the parties will promptly and in good faith commence license negotiations. Licensee will provide a commercialization plan for the Improvement at the onset of license negotiations.

			The First Look Right will terminate (i) at the end of the Notice Period if Licensee fails to provide First Look Notice, (ii) immediately upon notice that Licensee is not interested in entering into negotiations for a license to such Improvement, or (iii) one hundred eighty (180) days after Foundation receives the First Look Notice if the parties have not yet finalized a definitive license agreement. Upon termination or expiration of the First Look Right, Foundation will be free to present and license such Improvement to third parties without restriction.

2.4.

Retained Rights. Foundation retains the right to use the Technology, Know-How and Material Rights and Patent Rights for educational purposes and internal research and development.

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

COMPENSATION AND PAYMENT TERMS

3.1.

Research Funding. Licensee will provide Foundation with unrestricted research funds, within thirty (30) days of the Effective Date, of [*]. The research funded by these funds does not need to relate to the Technology Rights, and may be used by the Inventors for the research projects of their choosing.

3.2.

Royalties on Net Sales. Licensee will pay to Foundation an earned royalty of [*] of Net Sales of Patent Product or Patent Service. Licensee will pay to Foundation an earned royalty of [*] of Net Sales of Technology Product and [*] of Net Sales of Technology Services.

	3.3.		Annual Minimum Royalties on Net Sales. Licensee will pay Foundation Annual Minimum Royalty payments of $5,000 on or before the first day of the calendar year 2010 and each following year for the Term of the Agreement.

			Each Annual Minimum Royalty payment will be credited against any earned royalties due for the applicable calendar year.

	3.4.		Sublicensing Fees. Licensee will pay Foundation [*] of Sublicensing Revenue.

3.5.

Milestone Payments. Licensee will pay Foundation milestone payments according to the following schedule of events:


MILESTONE	MILESTONE PAYMENT

Sale of first Licensed Product, Licensed Service or Sublicense Fee payment received.		[*]

3.6.

Payment Terms: All dollar amounts referenced herein will refer to U.S. Dollars. Payments with designated payment dates are due and payable on or before those dates. Earned royalty payments will be made within [*] days after the end of each calendar quarter for the calendar quarter. All invoiced payments will be paid within [*] days of Licensee’s receipt of invoice. When Licensed Products or Licensed Services are sold for currencies other than U.S. Dollars, earned royalties will first be determined in the foreign currency of the country in which the Licensed Products or Licensed Services were sold and then converted into equivalent U.S. Dollars. The exchange rate is that rate quoted in the Wall Street Journal on the last business day of the reporting period and is quoted as local currency per U.S. Dollar.

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

3.7.

Payment Address. All payments will be made payable to “The Research Foundation of State University of New York” and will be sent to the below address:

UB Office of Science, Technology Transfer & Economic Outreach
UB Technology Incubator
Baird Research Park
Suite 111
1576 Sweet Home Road
Amherst, NY 14228
Attn: Licensing Specialist

3.8.

Late Payment. In the event that payments are not received by Foundation when due, Licensee will pay to Foundation interest charges at a rate of [*] per annum. Interest will be calculated from the date payment was due until actually received by Foundation.

3.9.

Foreign Charges . Royalties due on sales that occur in any country outside the United States may not be reduced by any deduction of withholding, value-added taxes, fees, or other charges imposed by the government of such country, except as permitted in the definition of Net Sales. Licensee is responsible for all bank transfer charges.

DUE DILIGENCE AND MARKETING OBLIGATIONS

	4.1.		Licensee will use commercially reasonable efforts to commercialize and market Licensed Products and Licensed Services as soon as practicable and in accordance with the milestone events set forth herein.

	4.2.		Licensee will complete the following milestones by the timeframes set forth below:


MILESTONE	COMPLETION DATE

Commercialization development plan submitted to Foundation.		[*]
Commercial availability of a Licensed Product or Licensed Service.		[*]
Annual sales revenues of [*].		[*]
Annual sales revenues of [*].		[*]

4.3.

In the event that Licensee fails to meet either the third or fourth milestone set forth in Section 4.2 above by the date set forth therein notwithstanding Licensee’s reasonable efforts to meet same, then Foundation’s sole remedy for same will be to render the exclusive licenses set forth in Section 2.1 of this Agreement as nonexclusive, upon written notice from Foundation to Licensee.

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

4.4.

Notwithstanding the above, in the event that prior to the milestone dates set forth in Section 4.2 above, there is a Change in Law that materially and adversely impacts Licensee’s ability to achieve the milestone by the applicable milestone date, Foundation and Licensee agree to meet and negotiate in good faith reasonable extensions to the milestone dates given the impact of the Change in Law. “Change in Law” means amendments, modifications or changes in existing Applicable Law, including changes in the enforcement or application of Applicable Law, or the enactment of any new Applicable Law. “Applicable Law” means any federal, state or local law, ordinance, rule, regulation, permit and order of any governmental authority, including the judicial or administrative interpretation thereof, which is applicable to Licensee’s use of the Patent Rights and Know How and Material Rights to make, have made, use sell and offer for sale the Licensed Products and Licensed Services as permitted under this Agreement.

SUBLICENSING

5.1.

The license granted in this Agreement includes the right of Licensee to grant sublicenses to third parties during the Term. With respect to sublicense granted pursuant to Article 5, Licensee will:

(a)

not receive, or agree to receive, anything of value in lieu of cash as considerations from a third party under a sublicense granted pursuant to Article 5 without the express written consent of Foundation;

(b)

to the extent applicable, include all of the rights of and obligations due to Foundation and