EXHIBIT 10.2




 





STOCK PURCHASE
AGREEMENT


BETWEEN


INTERLEUKIN
GENETICS, INC.


AND


PYXIS INNOVATIONS
INC.


Dated as of August
17, 2006




 


















 


TABLE OF CONTENTS


	
  ARTICLE 1. DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2. PURCHASE AND SALE; CLOSING

  	
  2

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Authorization

  	
  2

  
	
  2.2

  	
  Sale

  	
  2

  
	
  2.3

  	
  Closing

  	
  2

  
	
  2.4

  	
  Registration Rights

  	
  2

  
	
  2.5

  	
  Working Capital Loans

  	
  3

  
	
   

  	
  2.5.1     Strategic
  Relationships

  	
  3

  
	
   

  	
  2.5.2     Note Purchase
  Agreement

  	
  3

  
	
  2.5.3

  	
  Reductions in Available
  Credit

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF THE
  COMPANY

  	
  3

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Organization, Good Standing
  and Qualification

  	
  3

  
	
  3.2

  	
  Authorization;
  Enforceability

  	
  3

  
	
  3.3

  	
  Capitalization

  	
  4

  
	
  3.4

  	
  Consents

  	
  4

  
	
  3.5

  	
  Delivery of SEC Filings;
  Business

  	
  4

  
	
  3.6

  	
  No Material Adverse Change

  	
  5

  
	
  3.7

  	
  SEC Filings; Private Placements

  	
  5

  
	
   

  	
  3.7.1     1934 Act Filings

  	
  5

  
	
   

  	
  3.7.2     1933 Act Filings

  	
  5

  
	
   

  	
  3.7.3     Sarbanes-Oxley

  	
  5

  
	
   

  	
  3.7.4     Private
  Placements

  	
  6

  
	
  3.8.

  	
  No Conflict, Breach,
  Violation or Default

  	
  6

  
	
  3.9.

  	
  Tax Matters

  	
  6

  
	
  3.10

  	
  Title to Properties

  	
  6

  
	
  3.11

  	
  Certificates, Authorities
  and Permits

  	
  6

  
	
  3.12

  	
  No Labor Disputes

  	
  6

  
	
  3.13

  	
  Environmental Matters

  	
  6

  
	
  3.14

  	
  Litigation

  	
  7

  
	
  3.15

  	
  Financial Statements

  	
  7

  
	
  3.16

  	
  Insurance Coverage

  	
  7

  
	
  3.17

  	
  Brokers and Finders

  	
  7

  
	
  3.18

  	
  Exemption

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF
  INVESTOR

  	
  7

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Organization and Existence

  	
  7

  
	
  4.2

  	
  Authorization

  	
  8

  
	
  4.3

  	
  Purchase Entirely for Own
  Account

  	
  8

  
	
  4.4

  	
  Investment Experience

  	
  8

  
	
  4.5

  	
  Disclosure of Information

  	
  8

  
	
  4.6

  	
  Restricted Securities

  	
  8

  
	
  4.7

  	
  Legends

  	
  8

  
	
  4.8

  	
  Regulation D

  	
  9

  
	
  4.9

  	
  Brokers and Finders

  	
  9

  



 



 i
 






 



 


	
  ARTICLE 5. COVENANTS

  	
  9

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Restrictions on Transfer

  	
  9

  
	
  5.2

  	
  Fiduciary Duties

  	
  9

  
	
  5.3

  	
  Expenses

  	
  9

  
	
  5.4

  	
  Press Releases

  	
  9

  
	
  5.5

  	
  No Conflicting Agreements

  	
  9

  
	
  5.6

  	
  Closing Conditions

  	
  9

  
	
  5.7

  	
  Stock Purchase Agreement
  Amendment

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6. CLOSING CONDITIONS

  	
  10

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Company Conditions

  	
  10

  
	
   

  	
  6.1.1     Agreements

  	
  10

  
	
   

  	
  6.1.2     Opinion of
  Company Counsel

  	
  10

  
	
   

  	
  6.1.3     Secretary
  Certificate

  	
  10

  
	
   

  	
  6.1.4     Corporate
  Proceedings

  	
  10

  
	
   

  	
  6.1.5     Other Documents

  	
  10

  
	
   

  	
  6.1.6     Due Diligence
  Investigation of Alan James Group LLC

  	
  10

  
	
   

  	
  6.1.7     Acquisition of
  the Assets of Alan James Group LLC

  	
  10

  
	
  6.2

  	
  Investor Conditions

  	
  11

  
	
   

  	
  6.2.1     Agreements

  	
  11

  
	
   

  	
  6.2.2     Payment

  	
  11

  
	
   

  	
  6.2.3     Pyxis Secretary Certificates

  	
  11

  
	
   

  	
  6.2.4     Other Documents

  	
  11

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7. GENERAL

  	
  11

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Survival

  	
  11

  
	
  7.2

  	
  Successors and Assigns

  	
  11

  
	
  7.3

  	
  Counterparts

  	
  12

  
	
  7.4

  	
  Notices

  	
  12

  
	
  7.5

  	
  Amendments and Waivers

  	
  12

  
	
  7.6

  	
  Severability

  	
  12

  
	
  7.7

  	
  Entire Agreement

  	
  12

  
	
  7.8

  	
  Further Assurances

  	
  13

  
	
  7.9

  	
  Applicable Law

  	
  13

  



 


Exhibits


A             -               Amendment No. 5 to Note Purchase Agreement


B             -               Form of Promissory Notes


C             -               Opinion of Counsel to the Company


Disclosure
Schedules



 ii














 


STOCK PURCHASE AGREEMENT


THIS STOCK PURCHASE AGREEMENT (“Agreement”) is made as of the 17th day of August, 2006 by
and between INTERLEUKIN GENETICS, INC., a Delaware corporation (the “Company”), and Pyxis Innovations Inc., a Delaware
corporation (“Investor”).


RECITALS


A.            The Company wishes to raise an aggregate of
approximately $30,000,000 from the issuance of equity securities, debt
securities or a combination of the foregoing in order to provide working
capital for the Company (the “Proposed Financing”);


B.            Investor has a right to participate pro rata in the Proposed Financing (subject to certain
limitations) under the Stock Purchase Agreement dated March 5, 2003 between the
Company and Investor (the “2003 Purchase Agreement”);


C.            Investor desires to purchase, and the Company
wishes to sell and issue to Investor, upon the terms and conditions stated in
this Agreement, the Common Shares (as defined below), representing Investor’s pro rata potion of the Proposed Financing;


D.            As a condition to Investor’s willingness to
enter into the transactions contemplated hereby, Investor requires, and the
Company desires, that the Company offer to its existing stockholders (other
than Investor) the opportunity to acquire shares of Common Stock pursuant to a “rights
offering” at the same price per share that Investor is acquiring the Common
Shares (the “Rights Offering”);


E.             Investor desires to extend certain credit
facilities to the Company to provide the balance of the Proposed Financing
subject to reduction by the amount raised in the Rights Offering; and


F.             The Company and Investor are executing and
delivering this Agreement in reliance upon the exemption from securities
registration afforded by Section 4(2) of the 1933 Act (as defined below).


The parties agree as follows:


ARTICLE 1.  DEFINITIONS


In addition to those terms defined above and elsewhere in this
Agreement, for the purposes of this Agreement, the following terms shall have
the meanings here set forth:


1.1           “Acquisition” means the Company’s acquisition of all or
substantially all of the assets of Alan James Group LLC and its affiliates.


1.2           “Affiliate”
means, with respect to any Person, any other Person that directly or indirectly
Controls, is Controlled by, or is under common Control with, such Person.


1.3           “Agreements”
means this Agreement and Amendment No. 5.


1.4           “Amendment No. 5”
means Amendment No. 5 to the Note Purchase Agreement in the form attached as Exhibit A.



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1.5           “Contemplated Transactions”
means those transactions and actions contemplated by the Agreements, including
the issuance of the Common Shares and the Conversion Shares.


1.6           “Common Stock”
means the Company’s common stock, $0.001 par value per share.


1.7           “Control” means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.


1.8           “Conversion Shares”
means Common Stock of the Company to be issued upon conversion of any notes
issued under Section 2.5 of this Agreement.


1.9           “Material Adverse Effect”
means a material adverse effect on the condition (financial or otherwise),
business, assets, prospects, or results of operations of the Company as a
whole.


1.10         “Note Purchase Agreement”
means the Note Purchase Agreement, dated October 23, 2002, between the Company
and Investor, as amended.


1.11         “Notes” means
any promissory notes issued evidencing loans made under the Loan Commitment.


1.12         “Person” means
an individual, corporation, partnership, trust, business trust, association,
joint stock company, joint venture, pool, syndicate, sole proprietorship,
unincorporated organization, governmental authority or any other form of entity
not specifically listed herein.


1.13         “Securities”
means the Common Shares, the Notes, and the Conversion Shares.


1.14         “1933 Act” means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.


1.15         “1934 Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.


ARTICLE 2.  PURCHASE AND SALE; CLOSING


2.1           Authorization.  The
Company has authorized the sale and issuance to the Investor of the Common
Shares.


2.2           Sale. 
Subject to the terms and conditions of this Agreement, Investor agrees
to purchase at the Closing, and the Company agrees to sell and issue to
Investor at the Closing, 2,750,037 shares of Common Stock (the “Common Shares”) for the aggregate purchase price of
$15,615,537 ($5.6783 per share) (the “Purchase Price”).


2.3           Closing.  The
purchase and sale of the Common Shares (the “Closing”)
shall take place at the same place and time as the closing of the Acquisition,
or at such other time and place as the Company and Investor mutually agree (the
“Closing Date”).  The Closing shall be conditioned on and
concurrent with the closing of the Acquisition. 
At the Closing, the Company shall deliver to Investor a certificate
representing the Common Shares against payment of the Purchase Price by wire
transfer.


2.4           Registration Rights.  The
Company and the Investor agree that the Common Shares and any Conversion Shares
shall be additional “Registrable Securities” subject to the Registration Rights



 2
 






 



Agreement dated March 5, 2003 between the Company and
Investor (the “Registration Rights Agreement”),
pursuant to which the Company has agreed to provide certain registration rights
under the 1933 Act and applicable state securities laws; provided,
however, that Investor agrees that the
Company shall have no obligation to register any of the Common Shares or
Conversion Shares under the Registration Rights Agreement for a period of one
year following the Closing.


2.5           Credit Facility.


2.5.1        Available Financing.  At
any time prior to the second anniversary of the date of this Agreement, upon
the request of the Company, Investor shall loan to the Company up to
$14,384,463 (in the aggregate), subject to adjustment under Section 2.5.3 (the “Loan Commitment”). 
Loan requests shall be made in increments of not less than $1,000,000.


2.5.2        Note Purchase Agreement.  Any
loan made pursuant to Section 2.5 of this Agreement shall be made as an
additional loan under, and subject to the terms and conditions, including
interest rate and maturity, of, the Note Purchase Agreement, as amended.  Accordingly, at the Closing, each party will
execute and deliver Amendment No. 5 to the Note Purchase Agreement in the form
attached as Exhibit A.


2.5.3        Reductions in Available Credit.  The
aggregate amount of the credit available under Section 2.5.1 of this Agreement
shall be reduced dollar-for-dollar by the sum of:


(a)                                  The proceeds of the sale of shares by the
Company in the Rights Offering; and


(b)                                 The dollar amount of any loans previously
made by Investor under the Loan Commitment.


ARTICLE 3.  REPRESENTATIONS AND
WARRANTIES OF THE COMPANY


The Company hereby represents and warrants to Investor that, except as
set forth on the Disclosure Schedules to this Agreement:


3.1           Organization, Good Standing and
Qualification.  Each of the Company and its subsidiaries is a
corporation duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has all requisite corporate
power and authority to carry on its business as now conducted and own its
properties.  Each of the Company and its
subsidiaries is duly qualified to do business as a foreign corporation and is
in good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property makes such qualification or licensing
necessary unless the failure to so qualify could not reasonably be expected to
have a Material Adverse Effect on the Company. 
The Company’s subsidiaries, all of which are wholly owned, are reflected
on Schedule 3.1.  Except as set forth on Schedule 3.1,
the Company does not own or control, directly or indirectly, any equity
interest in any other Person.


3.2           Authorization; Enforceability.  The
Company has full power and authority and has taken all requisite action on the
part of the Company, its officers, directors and stockholders necessary for (a)
the authorization, execution and delivery of the Agreements, (b) authorization
of the performance of all obligations of the Company under the Agreements, and
(c) the authorization, issuance, and delivery of the Common Shares and
Conversion Shares.  On or before the date
of this Agreement, the Company’s board of directors, at a meeting duly called
and held, has (a) determined that the Agreements and the Contemplated
Transactions are fair to, advisable and in the best interests of the Company
and the



 3
 






 



stockholders of the Company, (b) approved the
Agreements and Contemplated Transactions, and (c) acted with due care and
satisfied its fiduciary duties to the Company. 
Section 203 of the Delaware General Corporate Law does not apply to this
Agreement or the Contemplated Transactions. No other state takeover,
antitakeover, moratorium, fair price, interested stockholder, business
combination or similar statute or rule is applicable to the Contemplated
Transactions.  The Agreements constitute
the legal, valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms. 
The Company has duly and validly authorized and reserved
2,533,234Conversion Shares for issuance upon conversion of the Notes, which
number is sufficient to permit the conversion of all of such Notes, and such
shares will, upon such conversion and issuance, be validly issued, fully paid
and non-assessable.


3.3           Capitalization.  Set
forth on Schedule 3.3 is (a) the amount of the
authorized capital stock of the Company; (b) the number of shares of capital
stock issued and outstanding; (c) the number of shares of capital stock
issuable pursuant to the Company’s stock plans; (d) the number of shares of
capital stock issuable and reserved for issuance pursuant to securities
exercisable for, or convertible into or exchangeable for any shares of
Preferred Stock, Common Stock, Notes, or other securities; and (e) the name of
each holder of options and warrants for capital stock, the term of such
agreement or instrument, the number of shares for which such options and
warrants are exercisable with respect to each holder, along with the applicable
vesting schedule, if any, and the exercise price.  All of the issued and outstanding shares of
the Company’s capital stock have been duly authorized and validly issued and
are fully paid, nonassessable and free of preemptive rights.  There are no contractual or statutory
preemptive rights, rights of first refusal, put or call rights or obligations
or anti-dilution rights with respect to the issuance, sale or redemption of the
Company’s capital stock, other than rights set forth herein or in the
Registration Rights Agreement or the 2003 Purchase Agreement.  The Company has no obligation to purchase,
redeem, or otherwise acquire any of its capital stock or any interests therein.  Except as set forth on Schedule 3.3 or as contemplated by this Agreement,
there are no outstanding warrants, options, convertible securities or other
rights, agreements or arrangements of any character under which the Company or
any of its subsidiaries is or may be obligated to issue any equity securities
of any kind and except as contemplated by this Agreement, neither the Company
nor any of its subsidiaries is currently in negotiations for the issuance of
any equity securities of any kind. 
Except as set forth on Schedule 3.3,
the Company has no knowledge of any voting agreements, buy-sell agreements,
option or right of first purchase agreements or other agreements of any kind
among any of the security holders of the Company relating to the securities of
the Company held by them.  Except as set
forth on Schedule 3.3 (which Schedule shall set
forth the holders and number of shares for which the Company remains obligated
to such registration rights), the Company has not granted any Person other than
Investor the right to require the Company to register any securities of the
Company under the 1933 Act, whether on a demand basis or in connection with the
registration of securities of the Company for its own account or for the
account of any other Person.


3.4           Consents.  The
execution, delivery and performance by the Company of the Agreements and the
offer, issuance and sale of the Common Shares and the Conversion Shares require
no consent of, action by or in respect of, or filing with, any Person,
governmental body, agency, or official other than filings that have been made
pursuant to applicable state securities laws and post-sale filings pursuant to
applicable state and federal securities laws, which the Company undertakes to
file within the applicable time periods.


3.5           Delivery of SEC Filings; Business.  The
Company has provided Investor with copies of the Company’s most recent Annual
Report on Form 10-K for the fiscal year ended December 31, 2005, and all other
reports filed by the Company pursuant to the 1934 Act since the filing of the
Annual Report on Form 10-K and prior to the date hereof (collectively, the “SEC Filings”); which are all of the filings required of the
Company pursuant to the 1934 Act for such period.  The Company is engaged only in the



 4
 






 



business described in the SEC Filings and the SEC
Filings contain a complete and accurate description of the business of the
Company.


3.6           No Material Adverse Change. 
Since the filing of the Company’s most recent Annual Report on Form 10-K
or as otherwise identified and described in subsequent reports filed by the
Company pursuant to the 1934 Act there has not been:  (a) any change in the consolidated assets,
liabilities, financial condition or operating results of the Company from that
reflected in the financial statements included in the Company’s most recent
Quarterly Report on Form 10-Q, except changes in the ordinary course of
business which have not had, in the aggregate, a Material Adverse Effect; (b)
any declaration or payment of any dividend, or any authorization or payment of
any distribution, on any of the capital stock of the Company, or any redemption
or repurchase of any securities of the Company; (c) any material damage,
destruction or loss, whether or not covered by insurance to any assets or
properties of the Company; (d) any waiver by the Company of a valuable right or
of a material debt owed to it not in the ordinary course of business; (e) any
satisfaction or discharge of any lien, claim or encumbrance or payment of any
obligation by the Company, except in the ordinary course of business and which
is not material to the assets, properties, financial condition, prospects,
operating results or business of the Company taken as a whole (as such business
is presently conducted and as it is proposed to be conducted); (f) any material
change or amendment to a material contract or arrangement by which the Company
or any of its assets or properties is bound or subject; (g) any material labor
difficulties or labor union organizing activities with respect to employees of
the Company; (h) any transaction entered into by the Company other than in the
ordinary course of business; or (i) any other event or condition of any
character that might have a Material Adverse Effect.


3.7           SEC Filings; Private Placements.


3.7.1        1934 Act Filings.  As
of their respective dates, the SEC Filings complied as to form in all material
respects with the requirements of the 1934 Act and did not contain at the time
they were filed any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.


3.7.2        1933 Act Filings. 
During the preceding one year, each registration statement and any
amendment thereto filed by the Company pursuant to the 1933 Act and the rules
and regulations thereunder, as of the date such statement or amendment became
effective, complied as to form in all material respects with the 1933 Act and
did not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading; and each prospectus filed pursuant to Rule 424(b) under
the 1933 Act, as of its issue date and as of the closing of any sale of
securities pursuant thereto did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.


3.7.3        Sarbanes-Oxley.  The
Chief Executive Officer and the Chief Accounting Officer of the Company have
signed, and the Company has furnished to the SEC, all certifications required
by the Sarbanes-Oxley Act of 2002; such certifications contain no
qualifications or exceptions to the matters certified therein, except as to
knowledge, and have not been modified or withdrawn; and neither the Company nor
any of it officers has received notice from any governmental entity questioning
or challenging the accuracy, completeness, content, form or manner of filing or
submission of such certifications.



 5
 






 



3.7.4        Private Placements. 
During the preceding one year, the Company has not furnished any private
placement memorandum or similar offering document to offerees of the Company’s
securities.


3.8           No Conflict, Breach, Violation or
Default.  The execution, delivery and performance of
the Agreements by the Company and the issuance and sale of the Common Shares
and Conversion Shares will not conflict with or result in a breach or violation
of, or trigger the vesting or acceleration of, any of the terms and provisions
of, or constitute a default under:  (a)
the Company’s Certificate of Incorporation or the Company’s Bylaws, both as in
effect on the date hereof, (b) any statute, rule, regulation or order of any
governmental agency or body or any court, domestic or foreign, having
jurisdiction over the Company or any of its properties, or (c) any material
agreement or instrument to which the Company is a party or by which the Company
is bound or to which any of the properties of the Company is subject.


3.9           Tax Matters.  The
Company has timely prepared and filed all tax returns required to have been
filed by the Company with all appropriate governmental agencies and timely paid
all taxes owed by it.  The charges,
accruals and reserves on the books of the Company in respect of taxes for all
fiscal periods are adequate in all material respects, and there are no material
unpaid assessments against the Company nor, to the knowledge of the Company,
any basis for the assessment of any additional taxes, penalties or interest for
any fiscal period or audits by any federal, state or local taxing authority
except such as which are not material. 
All material taxes and other assessments and levies that the Company is
required to withhold or to collect for payment have been duly withheld and
collected and paid to the proper governmental entity or third party when
due.  There are no tax liens or claims
pending or threatened against the Company or any of its respective assets or
property.  There are no outstanding tax
sharing agreements or other such arrangements between the Company and any other
Person.


3.10         Title to Properties. 
Except with respect to Investor, the Company has good and marketable
title to all real properties and all other properties and assets owned by it,
in each case free from liens, encumbrances and defects that would materially
affect the value thereof or materially interfere with the use made or currently
planned to be made thereof by them; and the Company holds any leased real or
personal property under valid and enforceable leases with no exceptions that
would materially interfere with the use made or currently planned to be made
thereof by them.


3.11         Certificates, Authorities and
Permits.  The Company possesses adequate certificates,
authorities or permits issued by appropriate governmental agencies or bodies
necessary to conduct the business now operated by it and has not received any
notice of proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the Company,
would individually or in the aggregate have a Material Adverse Effect.


3.12         No Labor Disputes.  No
material labor dispute with the employees of the Company exists or, to the
knowledge of the Company, is imminent.


3.13         Environmental Matters.  The
Company is not in violation of any statute, rule, regulation, decision or order
of any governmental agency or body or any court, domestic or foreign, relating
to the use, disposal or release of hazardous or toxic substances or relating to
the protection or restoration of the environment or human exposure to hazardous
or toxic substances (collectively, “Environmental Laws”),
does not own or operate any real property contaminated with any substance that
is subject to any Environmental Laws, is not liable for any off-site disposal
or contamination pursuant to any Environmental Laws, and is not subject to any
claim relating to any Environmental Laws, which violation, contamination,
liability or claim would individually or in the aggregate have a Material
Adverse Effect; and the Company is not aware of any pending investigation that
might lead to such a claim.  For the
purposes of this Section, the “Company” includes the Company and its
subsidiaries.



 6














 


3.14         Litigation.  Schedule 3.15 sets forth a list of all litigation involving
or (to the Company’s knowledge) threatened by or against the Company in the
past five years, along with the resolution of such matter.  There are no pending actions, suits or proceedings
against or affecting the Company, its subsidiaries or any of its or their
properties and to the Company’s knowledge, no such actions, suits or
proceedings are threatened or contemplated.


3.15         Financial Statements.  The
financial statements and related notes included in each SEC Filing present
fairly and accurately in all material respects the consolidated financial
position of the Company as of the dates shown and its consolidated results of
operations and cash flows for the periods shown, and such financial statements
have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis, except (i) that the unaudited interim financial
statements were or are subject to normal and recurring year-end audit adjustments,
(ii) as may be otherwise indicated in the notes to the financial statements or
(iii) in the case of the unaudited statements as may be permitted by the SEC on
Form 10-Q under the Exchange Act.  Except
(a) as set forth in the financial statements of the Company included in the SEC
Filings, and (b) for liabilities and obligations (absolute, accrued, contingent
or otherwise) incurred in the ordinary course of business and consistent with
past practice since the date of such SEC Filing, the Company does not have any
material liability or obligation of any nature, whether or not accrued,
contingent or otherwise that would be required by GAAP to be disclosed on a
balance sheet of the Company or in the notes thereto. The Company has not
created any entities or entered into any transactions or created any
liabilities or obligations of any nature, whether or not accrued, contingent or
otherwise, for the purpose of avoiding disclosure required by GAAP.


3.16         Insurance Coverage.  The
Company maintains in full force and effect insurance coverage that is customary
for comparably situated companies for the business being conducted and
properties owned or leased by the Company, and the Company reasonably believes
such insurance coverage to be adequate against all liabilities, claims and
risks against which it is customary for comparably situated companies to
insure.


3.17         Brokers and Finders.  The
Company has no commitment or agreement for payment of any commissions,  finders’ fees, or other similar fees to any
Person in connection with the Contemplated Transactions.


3.18         Exemption. The offer, issuance, sale and delivery of
the Common Shares is, and the issuance of the Conversion Shares in accordance
with the terms of the Notes contemplated in Amendment No. 5 will be, exempt
from the registration requirements of the 1933 Act and the qualification or
registration provisions of applicable state securities laws.  Neither the Company nor its authorized agents
have taken or will take any action that would cause the loss of such
exemption.  Neither the Company nor any
of its Affiliates, nor any Person acting on its or their behalf has, directly
or indirectly, made any offers or sales of any security or solicited any offers
to buy any security, under circumstances that would adversely affect reliance
by the Company on Section 4(2) for the exemption from registration for the
Contemplated Transactions or would require registration of the Common Shares or
the Conversion Shares under the 1933 Act.


ARTICLE 4.  REPRESENTATIONS AND WARRANTIES OF INVESTOR


Investor hereby represents
and warrants to the Company that:


4.1           Organization and Existence. 
Investor is a validly existing corporation and has all requisite
corporate power and authority to invest in the Securities pursuant to this
Agreement and any Affiliate of Investor signing one or more of the Agreements
(each an “Affiliate Party”) is a validly



 7
 






 



existing corporation and has all requisite corporate
power and authority to execute and perform the agreement that it is signing.


4.2           Authorization.  The
execution, delivery and performance by Investor and each Affiliate Party of the
Agreements have been duly authorized and the Agreements each constitute the
valid and legally binding obligation of Investor and each Affiliate Party,
enforceable against Investor and each Affiliate Party in accordance with their
terms.


4.3           Purchase Entirely for Own Account.  The
Securities to be received by Investor hereunder will be acquired for Investor’s
own account, not as nominee or agent, and not with a view to the resale or
distribution of any part thereof, and Investor has no present intention of
selling, granting any participation in, or otherwise distributing the
same.  The Investor is not a registered
broker dealer or an entity engaged in the business of being a broker dealer.


4.4           Investment Experience. 
Investor acknowledges that it can bear the economic risk and complete
loss of its investment in the Securities and has such knowledge and experience
in financial or business matters that it is capable of evaluating the merits
and risks of the investment contemplated hereby.


4.5           Disclosure of Information. 
Investor has had an opportunity to receive documents related to the
Company and to ask questions of and receive answers from the Company regarding
the Company, its business and the terms and conditions of the offering of the
Securities.  Investor acknowledges
receipt of the SEC Filings and any other filings which it requested be made by
the Company with the SEC.  Neither such
inquiries nor any other due diligence investigation conducted by Investor shall
modify, amend or affect Investor’s right to rely on the Company’s
representations and warranties contained in this Agreement.


4.6           Restricted Securities. 
Investor understands that the Securities are characterized as “restricted
securities” under the U.S.  federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may not be resold without registration
under the 1933 Act except in certain limited circumstances.


4.7           Legends.  It
is understood that, until any sale of Common Shares or Conversion Shares
pursuant to an effective registration statement under the 1933 Act, or such
time as such shares become eligible for resale under Rule 144(k), certificates
evidencing the Common Shares and Conversion Shares, as the case may be, will
bear one or more restrictive legends, substantially as follows:


“The shares represented by
this certificate have not been registered under the Securities Act of 1933, as
amended (the “Securities Act”) and may not be transferred (i) without the
opinion of counsel satisfactory to the corporation that such transfer may
lawfully be made without registration under the Securities Act or (ii) pursuant
to an effective registration statement under the Securities Act, in each case
in accordance with applicable securities laws of any state of the United
States.”


“The Corporation is authorized to issue more than one
class or series of stock.  The
Corporation will furnish without charge to each stockholder who so requests the
powers, designations, preferences and relative, participating, optional, or
other special rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.”



 8
 






 



“The shares represented by this Certificate are
subject to restrictions on transfer as set forth in the Stock Purchase
Agreement dated as of August 17, 2006 by and between the Corporation and Pyxis
Innovations Inc.  A copy of such Stock
Purchase Agreement is available for inspection at the offices of the
Corporation and will be provided to the holder upon request.”


If
required by the authorities of any state in connection with the issuance or
sale of the Common Shares and Conversion Shares, then the certificate(s)
representing such shares shall bear the legend required by such state
authority.  Upon resale pursuant to the
Registration Rights Agreement or upon Rule 144(k) becoming available, the
Company shall promptly cause certificates evidencing the Common Shares and
Conversion Shares, as the case may be, to be replaced with certificates that do
not bear such restrictive legends.


4.8           Regulation D. 
Investor is an accredited investor as defined in Rule 501(a) of
Regulation D, as amended, under the 1933 Act. 
Investor did not learn of the investment in the Securities as a result
of any public advertising or general solicitation.


4.9           Brokers and Finders. 
Investor has made no commitment for payment of any commissions or
finders’ fees to any third party in connection with the Contemplated
Transactions.


ARTICLE 5.  COVENANTS


5.1           Restrictions on Transfer.  In
addition to restrictions imposed upon Investor under the Registration Rights
Agreement, for a period of two years following the date of the Closing,
Investor will not sell or otherwise transfer its Common Shares or any
Conversion Shares to any Person who is not an Affiliate of Investor.  In addition, Investor will not sell or
otherwise transfer any shares of the Company’s Series A Preferred Stock or any
shares of Common Stock issued or issuable upon conversion thereof to any Person
who is not an Affiliate of Investor prior to March 5, 2009.


5.2           Fiduciary Duties.  The
Directors of the Company have executed and will execute their fiduciary duties
to the Company in good faith in the negotiation, deliberation, and consummation
of this Agreement and the Contemplated Transactions, regardless of any
affiliation with Investor.  No Director
of the Company is under a contractual obligation to vote in favor of or
otherwise effectuate any of the Contemplated Transactions.


5.3           Expenses.  The
Company shall pay the reasonable fees, disbursements, and expenses of counsel
to Investor and any other reasonable out-of-pocket expenses of Investor in
connection with the Contemplated Transactions (except for the Purchase Price).


5.4           Press Releases.  Any
press release concerning this Agreement shall be submitted to Investor for
comment at least two business days prior to issuance, unless the release is
required to be issued within a shorter period of time by law or pursuant to the
rules of a national securities exchange.


5.5           No Conflicting Agreements.  The
Company will not take any action, enter into any agreement or make any
commitment that would conflict or interfere in any material respect with the
obligations to Investor under the Agreements.


5.6           Closing Conditions.  The
Company will use its best efforts to cause the conditions in Article 6 to be
satisfied.



 9
 






 



5.7           Stock Purchase Agreement Amendment.  The Stock Purchase Agreement
dated March 5, 2003 between the parties to this Agreement is amended to provide
in Section 6.7:


“6.7
        Advisors.  All selections of legal counsel, accountants,
investment bankers and other professional advisors to the Company shall be
subject to approval of the Board of Directors or a duly authorized Committee of
the Board of Directors.  The Board of
Directors may delegate to the officers of the Company authority to select and
engage advisors within parameters specified by the Board of Directors.  In addition, the Series A Directors shall be
entitled to retain, at the cost and expense of the Company, the services of an
investment banking firm of national reputation of their choice and one law firm
of their choice to advise them in their capacity as directors with respect to
any matter on which the directors, as a group, are required or permitted to act
hereunder.


ARTICLE 6.  CLOSING CONDITIONS


6.1   Company Conditions.  The obligations of Investor to the Company
under this Agreement are subject to the fulfillment, on or before the Closing,
of each of the following conditions, unless otherwise waived:


6.1.1        Agreements.  The
Company and Investor shall have entered into the Agreements.


6.1.2        Opinion of Company Counsel.  The
Investors shall have received from counsel for the Company, an opinion, dated
as of the Closing, in form and substance reasonably acceptable to Investor,
generally to the effect provided in Exhibit C.


6.1.3        Secretary Certificate.  The Company shall have delivered a certificate
of its Secretary certifying as to (i) the actions of the Board of Directors to
approve the Agreements and the transactions contemplated thereby; (ii) the
Bylaws of the Company, in effect as of the Closing Date; (iii) the Certificate
of Incorporation of the Company, issued by the State of Delaware; and (iv) the
incumbency of all officers authorized to execute the Agreements and the
promissory notes on behalf of the Company.


6.1.4        Corporate Proceedings.  The
Company shall have provided to Investor copies of resolutions of its Board of
Directors, or committees thereof, authorizing the execution, delivery, and
performance of the Agreements and any other documents provided for in or
contemplated by this Agreement.


6.1.5        Other Documents.  The
Company shall have delivered to Investor such other documents as reasonably
requested by Investor to carry out and effectuate the intent and purposes of
this Agreement.


6.1.6        Due Diligence Investigation of
Alan James Group LLC.  No later than five days prior to the Closing,
the Company shall have presented to Investor the due diligence investigation
report of Grant Thornton LLP regarding Alan James Group LLC and its affiliates,
and Investor shall be reasonably satisfied with the report and its contents.


6.1.7        Acquisition of the Assets of Alan
James Group LLC.  Concurrently with the execution of this
Agreement, the Company shall have consummated the acquisition of all or
substantially all of the assets of the Alan James Group LLC and its affiliates.



 10
 






 



6.2           Investor Conditions.  The obligations of the Company to Investor
under this Agreement are subject to the fulfillment, on or before the Closing,
of each of the following conditions, unless otherwise waived:


6.2.1        Agreements.  The Company and Investor shall have entered
into the Agreements.


6.2.2        Payment.  Investor shall have made full payment to the
Company of the purchase price for the Common Shares by wire transfer of
$15,615,537 in immediately available funds.


6.2.3        Pyxis Secretary Certificates.  Investor shall have delivered a certificate
of its Secretary certifying as to (i) the actions of its Board of Directors to
approve the Agreements and the transactions contemplated thereby; (ii) the
Bylaws of the Investor in effect as of the Closing Date; (iii) the Certificate
of Incorporation of the Investor issued by its state of domicile; and (iv) the
incumbency of all officers authorized to execute the Agreements on behalf of
the Investor.


6.2.4        Other Documents.  Investor shall have delivered to Company such
other documents as reasonably requested by the Company to carry out and
effectuate the intent and purposes of this Agreement.


ARTICLE 7.  GENERAL


7.1           Survival.  All
representations, warranties, covenants and agreements contained in this
Agreement shall be deemed to be representations, warranties, covenants and
agreements as of the date hereof and shall survive the execution and delivery
of this Agreement and the Closing provided that all representations and
warranties shall terminate two years following the Closing.  No investigation by or knowledge of a party
or its representatives, before or after the date of this Agreement, will affect
in any manner the representations, warranties, covenants or agreements of
another party set forth in this Agreement (or in any document to be delivered
in connection with the consummation of the transactions contemplated by this
Agreement) or the rights to rely thereon, and such representations, warranties,
covenants and agreements will survive any such investigation.


7.2           Successors and Assigns.  This
Agreement may not be assigned by a party hereto without the prior written
consent of the other party hereto, except that without the consent of the
Company, but after notice duly given, Investor may assign its rights and
delegate its duties hereunder to an Affiliate of the Investor or, after the
second anniversary of the Closing of this Agreement, to a third party acquiring
some portion or all of the Common Shares or Conversion Shares in a private
transaction, provided that in each case the Affiliate or third party agrees in
writing to be bound by the terms of this Agreement, and without the prior
written consent of Investor, but after notice duly given and in compliance with
this Agreement, the Company may assign its rights and delegate its duties
hereunder to any successor-in-interest corporation in the event of a merger or
consolidation of the Company with or into another corporation, or any merger or
consolidation of another corporation with or into the Company that results
directly or indirectly in an aggregate change in the ownership or control of
more than 50% of the voting rights of the equity securities of the Company, or
the sale of all or substantially all of the Company’s assets.  The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective permitted
successors and assigns of the parties. 
Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.



 11
 






 



7.3           Counterparts.  This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.


7.4           Notices. 
Unless otherwise provided, any notice required or permitted under this
Agreement shall be given in writing and shall be deemed effectively given only
upon delivery to each party to be notified by (i) personal delivery, (ii)
electronic mail or telecopier, upon receipt of confirmation of complete
transmittal, or (iii) an internationally recognized overnight air courier,
addressed to the party to be notified at the address as follows, or at such
other address as such party may designate by ten days’ advance written notice
to the other party:


	
  If to the Company:

  	
  Interleukin Genetics, Inc.

  
	
   

  	
  135 Beaver
  Street, 2nd Floor

  
	
   

  	
  Waltham, MA
  02452

  
	
   

  	
  Attn: Chief
  Executive Officer

  
	
   

  	
  Fax:
  781/398-0720

  
	
   

  	
   

  
	
  with a copy to:

  	
  Mintz Levin Cohn Ferris Glovsky Popeo PC

  
	
   

  	
  One Financial
  Center

  
	
   

  	
  Boston, MA 02111

  
	
   

  	
  Attn:

  	
  Daniel H. Follansbee

  
	
   

  	
  Fax:

  	
  617/542-2241

  
	
   

  	
   

  	
   

  
	
  If to Investor:

  	
  Pyxis Innovations, Inc.

  
	
   

  	
  7575 Fulton
  Street East

  
	
   

  	
  Ada, Michigan
  49355-0001

  
	
   

  	
  Attn:

  	
  Thomas R. Curran, Jr.

  
	
   

  	
  Fax:

  	
  616/787-7813

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
  Warner Norcross & Judd LLP

  
	
   

  	
  900 Fifth Third
  Center

  
	
   

  	
  111 Lyon Street
  NW

  
	
   

  	
  Grand Rapids, Michigan 49503-2487

  
	
   

  	
  Attn:

  	
  Gordon R. Lewis

  
	
   

  	
  Fax:

  	
  616/752-2500

  



 


7.5           Amendments and Waivers.  Any
term of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and Investor.  Any amendment or waiver
effected in accordance with this paragraph shall be binding upon Investor, each
future holder of all the Common Shares or Conversion Shares, and the Company.


7.6           Severability.  If
one or more provisions of this Agreement are held to be unenforceable under
applicable law, such provision shall be excluded from this Agreement and the
balance of this Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.


7.7           Entire Agreement.  This
Agreement, including the Exhibits and Schedules hereto, and the Agreements
constitute the entire agreement among the parties hereof with respect to the
subject matter hereof and thereof and supersede all prior agreements and
understandings, both oral and written, between the parties with respect to the
subject matter hereof and thereof.  The
Note Purchase Agreement shall continue in full force and effect, except as
amended as part of the Contemplated Transactions.



 12
 






 



7.8           Further Assurances.  The
parties shall execute and deliver all such further instruments and documents
and take all such other actions as may reasonably be required to carry out the
transactions contemplated hereby and to evidence the fulfillment of the
agreements herein contained.


7.9           Applicable Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to principles of conflicts of laws.


IN WITNESS WHEREOF, the
parties have executed this Stock Purchase Agreement as of the date first above
written.


	
  The Company:

  	
  INTERLEUKIN GENETICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Kenneth S. Kornman

  	
   

  
	
   

  	
   

  	
  Name: Kenneth S.
  Kornman

  
	
   

  	
   

  	
  Title: Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  Investor:

  	
  PYXIS INNOVATIONS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Kim S. Mitchell

  	
   

  
	
   

  	
   

  	
  Name: Kim S.
  Mitchell

  
	
   

  	
   

  	
  Title: Assistant
  Secretary

  



 



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