Document:

EXHIBIT 10.38

 

CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.  ASTERISKS DENOTE OMISSIONS.

 

RESEARCH AGREEMENT

 

This RESEARCH AGREEMENT (this “Agreement”) is entered into as of March 5,
2005 (the “Effective Date”) by and between Interleukin Genetics, Inc., a
Delaware corporation having its principal office at 135 Beaver Street, Waltham,
MA 02452 (“IG”) and Access Business Group LLC, having its principal office at
7575 Fulton Street, East, Ada, Michigan 49355-0001 (“Access”).  Each of IG and Access is sometimes referred
to individually herein as a “Party” and collectively as the “Parties.”

 

WHEREAS, Access, together with its Affiliates, has expertise and
experience in the development, commercialization and marketing of nutritional
supplements and skin care products and IG has expertise and experience in
analyzing the effect of variations in genes related to inflammation, including
the effect of such variations on the risk for [   *   ] and [   
*     *    ], and
determining, through genetic profiling, individuals who may benefit from
specific interventions to promote health;

 

WHEREAS, Access and IG entered into a Research Agreement, having an
effective date of March 5, 2003, providing for IG to perform certain research
during a term two years from such effective date;

 

WHEREAS, Access desires that IG perform additional research on the
terms and subject to the conditions set forth in this Agreement and the Parties
desire to obtain certain rights to inventions arising out of such research; and

 

WHEREAS, IG is willing to perform such additional research and the
Parties are willing to grant each other such rights as described herein.

 

NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the Parties hereby agree
as follows:

 

1.                                      DEFINITIONS

 

Whenever used in this Agreement with an initial capital letter, the
terms defined in this Section 1 shall have the meanings specified.

 

1.1.                              “Affiliate” means any corporation, firm,
partnership or other entity that directly or indirectly controls or is
controlled by or is under common control with a Party to this Agreement.  For purposes of this definition, “control”
means ownership, directly or through one or more Affiliates, of fifty percent
(50%) or more of the shares of stock entitled to vote for the election of
directors, in the case of a corporation, fifty percent (50%) or more of the
equity interests in the case of any other type of legal entity, status as a general
partner in any partnership, or any other arrangement whereby a Party controls
or has the right to control the Board of Directors or equivalent governing body
of a corporation or other entity.  For
purposes of this Agreement, Access, Alticor Inc. and subsidiaries of Alticor
Inc., on the one hand, and IG, on the other hand, will not be deemed to be
Affiliates of each other.

 

 

1.2.                              “Access Patent Rights” means any Patent Rights with
respect to Access Technology.

 

1.3.                              “Access Proprietary Materials” means any Proprietary
Materials of Access that are used by Access, or provided by Access for use, in
the Research Program.

 

1.4.                              “Access Technology” means any Technology
Controlled by Access as of the Effective Date and during the Term that is used
by Access, or provided by Access for use, in the Research Program.

 

1.5.                              “[    *    ] Test”
means an analytic test performed on a [  
*    *  ] or [  
*  ] to [   *      
*      *      *  
] to the use of a Program Consumable.

 

1.6.                              “Confidential Information” means, as regards a Party (the
“Receiving Party”), (i) all information produced or discovered by either Party
under the Research Program (including without limitation, compilations, data,
formulae, models, patent disclosures, procedures, processes, projections, protocols,
results of experimentation and testing, specifications, strategies and
techniques), and all tangible and intangible embodiments thereof of any kind
whatsoever (including, without limitation, apparatus, biological or chemical
materials, animals, cells, compositions, documents, drawings, machinery, patent
applications, records and reports) and (ii) all other information (including
but not limited to information about any element of Technology or a Party’s
business) which is disclosed, whether in writing and marked as confidential at
the time of disclosure to the Receiving Party or customarily considered to be
confidential information or by oral disclosure reduced to a writing, by the
other Party (the “Disclosing Party”) to the Receiving Party or to any of its
employees, consultants, Affiliates, licensees and sublicensees hereunder except
to the extent that the information described in this subsection (ii) (a)
as of the date of disclosure is demonstrably known to, or in the possession of,
the Receiving Party or its Affiliates, as shown by written documentation, other
than by virtue of a prior confidential disclosure by the Disclosing Party or
its Affiliates; (b) as of the date of disclosure is in, or subsequently enters,
the public domain, through no fault or omission of the Receiving Party or its
Affiliates; (c) as of the date of disclosure or thereafter is obtained by the
Receiving Party or its Affiliates from a Third Party free from any obligation
of confidentiality to the Disclosing Party and rightfully in possession of such
information or (d) is independently developed by or for the Receiving Party or
its Affiliates without reference to or in reliance upon any of the foregoing
information as demonstrated by competent written records.

 

1.7.                              “Control” or “Controlled”
means (a) with respect to Technology (other than Proprietary Materials) and/or
Patent Rights, the possession by a party of the ability to grant a license or
sublicense of such Technology and/or Patent Rights as provided herein without
violating the terms of any agreement or arrangement between such party and any
Third Party and (b) with respect to Proprietary Materials, the possession by a
party of the ability to supply such Proprietary Materials to the other party as
provided herein without violating the terms of any agreement or arrangement
between such party and any Third Party.

 

1.8.                              “IG Patent Rights” means any Patent Rights with
respect to IG Technology.

 

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1.9.                              “IG Technology” means any Technology
Controlled by IG as of the Effective Date and during the Term that is used by
IG, or provided by IG, or provided by IG for use, in the Research Program.

 

1.10.                        “Joint Science Committee” or “JSC” shall have the meaning set
forth in Section 5.1 hereof.

 

1.11.                        “License Agreement” means the License Agreement dated March 5,
2003, between the Parties, as the same may be amended, restated or supplemented
from time to time.

 

1.12.                        “Patent Rights” means the rights and interests
in and to issued patents and pending patent applications in any country,
including all substitutions, continuations, continuations-in-part, divisionals,
supplementary protection certificates, renewals, all letters patent granted
thereon, and all reissues, reexaminations, extensions, confirmations,
revalidations, registrations and patents of addition thereof.

 

1.13.                        “Party” or “Parties”
has the meaning set forth in the first paragraph of this Agreement.

 

1.14.                        “Program Consumable”
means any nutritional supplement, nutraceutical compound, skin care product, or
delivery system for a nutritional supplement, nutraceutical compound, or skin
care product, [     *      *     
*      *      *     
*      *      *  
] designed to produce a positive health benefit and/or a positive
appearance of skin (i) the manufacture, use or sale of which would, absent the
license or ownership rights granted to ABG hereunder and under the License
Agreement, infringe any claim included in the Program Patent Rights or the IG
Patent Rights, or (ii) which makes a claim or claims of efficacy or utility
based upon the research conducted hereunder or upon the use or results of a
Program Test.

 

1.15.                        “Program Invention” means any Technology, whether
or not patentable, which is conceived and/or first reduced to practice by
employees of, or consultants to, either Party, or jointly by both Parties, in
the conduct of the Research Program.

 

1.16.                        “Program Patent Rights” means all Patent Rights
claiming any Program Invention.

 

1.17.                        “Program Product” means
a Program Consumable or a Program Test.

 

1.18.                        “Program Test” means
any nucleic acid test used to determine appropriate recipients of a Program
Consumable (i) the manufacture, use or sale of which would, absent the license
or ownership rights granted to ABG hereunder and under the License Agreement,
infringe any claim included in the Program Patent Rights or the IG Patent
Rights, or (ii) which was developed, modified or improved hereunder.

 

1.19.                        “Proprietary Materials” means any tangible chemical,
biological or physical research materials, including but not limited to gene
sequences, gene fragment sequences, primers, probes, nucleic acids and nucleic
acid libraries, plasmids, vectors, expression systems, cells, cell lines,
organisms, antibodies, biological substances (and any constituents, progeny,

 

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mutants, derivatives or replications thereof
or therefrom), reagents or chemical compounds that are furnished by or on
behalf of one Party to the other Party, in connection with this Agreement or
the License Agreement, that are proprietary to the transferring Party through
patent protection, trade secret, or other method of intellectual property
protection, regardless of whether such materials are specifically designated as
proprietary by the transferring Party.

 

1.20.                        “Protocol” means the written protocol
describing the activities to be carried out under the Research Program pursuant
to this Agreement to be agreed upon by the JSC based on the outline attached
hereto as Appendix A.

 

1.21.                        “Research Program” means the program to be
conducted by the Parties as described in this Agreement and in the Protocol to
develop [   *     *   
*    *   ] which will be Program Products.

 

1.22.                        “Technology” means and includes all
inventions, discoveries, know-how, trade secrets, improvements and Proprietary
Materials, whether or not patentable, including but not limited to, structural
and functional information and other data, formulations and techniques.

 

1.23.                        “Term” has the meaning set forth in Section 7.1.

 

1.24.                        “Territory” means worldwide.

 

1.25.                        “Third Party” means any entity other than
IG, Access or their respective Affiliates.

 

2.                                      RESEARCH PROGRAM

 

2.1.                              Implementation of Research
Program.  The Research Program shall be conducted by
the Parties in accordance with the Protocol and in compliance with all
applicable laws and regulations.  The
parties shall use commercially reasonable efforts to perform the activities to
be performed by them under the Research Program, as described more fully in the
Protocol and in the timeline (the “Timeline”) which the JSC shall agree upon in
writing, based upon the outline attached hereto as Appendix A, as
promptly as practicable following the execution hereof.  The Protocol and/or the Timeline may be
modified from time to time after the Effective Date by the JSC pursuant to Section 5.1
hereof.

 

2.2.                              Supply of Proprietary Materials. 
From
time to time during the Term of this Agreement, one Party may supply the other
Party with its Proprietary Materials for use in the Research Program.  In connection therewith, the recipient Party
hereby agrees that (a) it shall not use Proprietary Materials for any purpose
other than exercising any rights granted to it or reserved by it hereunder; (b)
it shall use the Proprietary Materials only in compliance with all applicable
federal, state, and local laws and regulations; (c) it shall not transfer any
Proprietary Materials to any Third Party without the prior written consent of
the transferor, except as expressly permitted hereby; (d) the transferring
Party shall retain full ownership of all such Proprietary Materials; and (e)
upon the expiration or termination of this Agreement, the recipient Party shall
at the instruction of the transferring Party either destroy or return any
unused Proprietary Materials which are not the subject of the grant of a
continuing license hereunder.

 

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2.3.                              Consideration.  In consideration of IG conducting the
Research Program described herein, Access shall pay to IG as follows:

 

2.3.1.                     Access shall pay to IG an
aggregate sum of Two Million Seven Hundred Sixteen Thousand One Hundred
Fifty-One Dollars ($2,716,151) payable as follows:

 

	
  Payment Date

  	
   

  	
  Payment Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  April 15,
  2005

  	
   

  	
  $

  	
  564,534

  	
   

  
	
  July 5,
  2005

  	
   

  	
  558,234

  	
   

  
	
  October 5,
  2005

  	
   

  	
  516,642

  	
   

  
	
  January 5,
  2006

  	
   

  	
  337,059

  	
   

  
	
  April 5,
  2006

  	
   

  	
  337,059

  	
   

  
	
  July 5,
  2006

  	
   

  	
  215,123

  	
   

  
	
  October 5,
  2006

  	
   

  	
  143,750

  	
   

  
	
  January 5,
  2007

  	
   

  	
  43,750

  	
   

  
					

 

Such payments shall cover all work to be
performed by IG management, research staff and other employees under this
Agreement, and all expenses incurred by IG in connection therewith, including
travel, equipment and supplies, subject, however, to the following paragraph
with respect to Third Party Services as defined below.

 

2.3.2.                     Access shall pay, or shall
reimburse IG for, all expenses incurred in obtaining from Third Parties the
additional services described on Appendix B hereto (“Third Party
Services”), on the following terms and conditions:

 

(a)                                  The
payments specified in Section 2.3.1 above include amounts estimated by the
Parties as the costs to be incurred by IG for Third Party Services, plus an
amount equal to 15% of such estimated costs, according to the budget set forth
on Appendix B.

 

(b)                                 IG
agrees that it shall not incur costs for any Third Party Service in excess of
105% of the amount set forth on Appendix B for the specified Third Party
Service (excluding the 15% markup), without the prior written approval of the
JSC.

 

(c)                                  Within
30 days after March 31 of each year, IG shall submit to Access an itemized
accounting, together with supporting documentation in reasonable detail, of the
aggregate actual costs incurred by IG for Third Party Services during the
12-month period ending on March 31 (excluding any markup).  If such aggregate actual costs exceed the
aggregate amount budgeted for such costs for such 12-month period as set forth
on Appendix B (excluding the 15% markup), Access shall pay to IG,
within 30 days after Access receives such accounting and supporting documentation,
an amount equal to 115% of such excess.

 

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(d)                                 If
the aggregate documented, actual costs incurred by IG for Third Party Services
during any 12-month period ending on March 31 are less than the aggregate
amount budgeted for such costs for 12-month period as set forth on Appendix
B (including the 15% markup), then 57.5% of such difference shall be
applied as a credit against the payment obligations of Access under Section 2.3.1
above for the following 12-month period. 
If any such credit balance in favor of Access shall remain outstanding
at the expiration or other termination of this Agreement, IG shall promptly
refund to Access an amount equal to such outstanding credit balance.

 

2.4.                              Supporting Documentation.  Upon request by Access, IG agrees to provide
Access with supporting documentation in reasonable detail of the actual costs
incurred by IG for Third Party Services.

 

3.                                      RESEARCH LICENSES

 

3.1.                              License to IG.  Subject to the terms and conditions of this
Agreement, Access hereby grants to IG a non-exclusive, worldwide, royalty-free
license, under the Access Technology, Access Patent Rights, Program Inventions
and Program Patent Rights for the sole purpose of performing the Research
Program.

 

3.2.                              License to Access.  Subject to the terms and conditions of this
Agreement and the License Agreement, IG hereby grants to Access a
non-exclusive, worldwide, royalty-free license, under the IG Technology, IG
Patent Rights, Program Inventions and Program Patent Rights for the sole
purpose of performing the Research Program.

 

4.                                      TREATMENT OF CONFIDENTIAL INFORMATION; PUBLICITY

 

4.1.                              Confidentiality.

 

4.1.1.                     Confidentiality Obligations.  Access and IG each recognize that the
Confidential Information of the other Party constitutes highly valuable and
proprietary confidential information. 
Access and IG each agrees that during the Term and for five (5) years
thereafter, it will keep confidential, and will cause its employees,
consultants, Affiliates and sublicensees to keep confidential, all of the
Confidential Information of the other Party. 
Neither Access nor IG nor any of their respective employees,
consultants, Affiliates and sublicensees shall use the Confidential Information
of the other Party for any purpose except as expressly permitted in this
Agreement.

 

4.1.2.                     Limited Disclosure of
Confidential Information.  Access and IG each agree that any disclosure
of the Confidential Information to any of its employees, consultants,
Affiliates or sublicensees shall be made only if and to the extent necessary to
carry out its rights and responsibilities under this Agreement, shall be
limited to the maximum extent possible consistent with such rights and
responsibilities and shall only be made to persons who are bound by written
confidentiality obligations to maintain the confidentiality thereof and not to
use such Confidential Information except as expressly permitted by this
Agreement.  Access and IG each agree not
to disclose the Confidential Information to any Third Party under any
circumstance

 

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without prior written approval from the other
Party, except as otherwise required by law, and except as otherwise expressly
permitted by this Agreement.  Each Party
shall take such action, and shall cause its Affiliates and sublicensees to take
such action, to preserve the confidentiality of the Confidential Information as
it would customarily take to preserve the confidentiality of its own
confidential materials, which shall not, in any event, be less than reasonable
care.  Each Party, upon the other’s
request, will return all the Confidential Information disclosed to it by the
other Party pursuant to this Agreement, including all copies and extracts of
documents, within sixty (60) days of the request following the termination of
this Agreement; provided, that, a Party may retain Confidential Information of
the other Party relating to any license or right to use Technology which
survives such termination and one copy of all other Confidential Information
may be retained in inactive archives solely for the purpose of establishing the
contents thereof.

 

4.2.                              Publicity.  Neither Party may publicly disclose the terms
of this Agreement or the status or content of the Research Program without the
prior written consent of the other Party; provided, however, that either Party
may make such a disclosure (a) to the extent required by law or by the
requirements of any nationally recognized securities exchange, quotation system
or over-the-counter market on which such Party has its securities listed or
traded or (b) to any actual or prospective acquirors, real estate or equipment
lessors, investors, lenders and other potential financing sources who are
obligated to keep such information confidential.  In the event that such disclosure is required
by the foregoing clause (a), the disclosing Party shall make reasonable efforts
to provide the other Party with notice beforehand and to coordinate with the
other Party to the maximum extent possible with respect to the wording and
timing of any such disclosure.  The
Parties shall mutually agree on a press release announcing the execution of
this Agreement to be issued immediately following the execution hereof.  If either Party wishes to issue any further
press release regarding the Research Program, it shall furnish a copy to the
other Party, which shall review such press release and provide any comments
within two (2) business days.  Once any
written statement is approved for public disclosure by both Parties, either
Party may make subsequent public disclosure of the contents of such statement
without the further approval of the other Party.

 

5.                                      JOINT SCIENCE COMMITTEE

 

5.1.                              Formation.  The Joint Science Committee (the “JSC”)
established by IG and Access pursuant to the Research Agreement, dated
effective as of March 5, 2003, shall oversee and coordinate the Parties’
conduct of the Research Program.  During
the Term, the JSC will exchange information in anticipation of developing
mutually beneficial business opportunities pursuant to the subject matter
hereof.  The JSC shall keep written
minutes of its meetings and all actions taken or approved by the JSC.  The members of the JSC designated by each
Party shall be responsible for keeping that Party informed as to the progress
of the Research Program.  The JSC shall
recommend to the Parties amendments and/or modifications to the Protocol and
Timeline and the scope of the Research Program and make recommendations to the
Parties as to the mutually beneficial prosecution of IG Patent Rights and
Program Patent Rights.  The JSC shall
have no power to amend, modify or waive compliance with this Agreement and
shall have only such powers as are specifically delegated to it hereunder.

 

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5.2.                              JSC Governance.

 

5.2.1.                     Membership.  The JSC is composed of two representatives of
IG and two representatives of Access. 
These representatives are as follows:

 

IG Representatives:

 

Kenneth Kornman, DDS, Ph.D.

Philip R. Reilly, M.D., J.D.

 

Access Representatives:

 

Robin Dykhouse

Daniel Beio

 

Either Party
may designate substitutes for its JSC representatives to participate if one or
more of such Party’s designated representatives is unable to be present at a
meeting.  A Party may replace its
representatives serving on the JSC from time to time by written notice to the
other Party specifying the prior representative(s) to be replaced and the
replacement(s) therefor.

 

6.                                      INTELLECTUAL PROPERTY RIGHTS

 

6.1.                              Ownership.

 

6.1.1.                     Access Intellectual Property
Rights.  Subject to IG’s rights as described in Section 3
of this Agreement, Access shall have sole and exclusive ownership of all right,
title and interest [     *     *    
*     *   ] in and to all Access Technology and Access
Patent Rights, and all Program Inventions and Program Patent Rights relating to
Program Consumables, with full rights to license or sublicense; provided,
however, that in consideration of the performance of the Research Program by
IG, the manufacture, use or sale of all Program Consumables shall be subject to
the payment of royalties by Access to IG in accordance with the License
Agreement.

 

6.1.2.                     IG Intellectual Property Rights.  Subject to Access’s rights as described in Section 3
of this Agreement and subject to the terms of the License Agreement, IG shall
have sole and exclusive ownership of all right, title and interest  [    
*     *     *    
*   ] in and to all IG Technology,
IG Patent Rights and all Program Inventions and Program Patent Rights relating
to Program Tests, with full rights to license or sublicense.

 

6.1.3.                     Intellectual Property Rights for
[     *     ] Tests.  Subject to the
rights of the Parties described in Section 3 of this Agreement, Access and
IG shall have equal joint ownership of all right, title and interest  [    
*     *     *    
*   ] in and to all Program
Inventions and Program Patent Rights not covered by Sections 6.1.1 or 6.1.2
above, including all Program Inventions and Program Patent Rights relating to
[    *   
] Tests; provided, however, that Access shall have the exclusive right
to sell and grant licenses for  [    *   
] Tests covered by such Program Inventions and Program Patent Rights in
the channels of distribution utilized by Access and its Affiliates (the “Access
Channels”) and IG shall have the exclusive right to sell and grant licenses
for  [   
*    ] Tests covered by such
Program Inventions and Program Patent Rights outside the Access Channels.

 

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6.2.                              Patent Filing,
Prosecution and Maintenance.  During the Term
with respect to any Patent Rights arising hereunder:

 

6.2.1.                     Program Consumables.  Access shall bear the cost associated with
the filing, prosecution, issuance and maintenance of all Program Patent Rights
relating to Program Consumables and shall control prosecution of all such
Program Patent Rights, including, but not limited to, having the right to
choose the patent attorney(s) or agent(s) who will prosecute the applications,
having the right to inspect, review and provide substantive comments to all
correspondence with any patent office or patent agent, and having the right to
select the countries in which or treaties under which the patent applications
will be filed.

 

6.2.2.                     Program Tests.  IG shall bear the cost associated with the
filing, prosecution, issuance and maintenance of all Program Patent Rights
relating to Program Tests and shall control prosecution of all such Program
Patent Rights, including, but not limited to, having the right to choose the patent
attorney(s) or agent(s) who will prosecute the applications, having the right
to inspect, review and provide substantive comments to all correspondence with
any patent office or patent agent, and having the right to select the countries
in which or treaties under which the patent applications will be filed.

 

6.2.3.                     [    *   
] Tests.  The Parties shall jointly bear the cost
associated with the filing, prosecution, issuance and maintenance of all other
Program Patent Rights (including Program Patent Rights relating to [     *   
] Tests) and shall jointly control prosecution of all such Program
Patent Rights, including, but not limited to, having the right to choose the
patent attorney(s) or agent(s) who will prosecute the applications, having the
right to inspect, review and provide substantive comments to all correspondence
with any patent office or patent agent, and having the right to select the
countries in which or treaties under which the patent applications will be
filed.  In the event that the parties
cannot agree on the filing and/or maintenance of Program Patent Rights
hereunder, then each Party shall have the right to proceed at its own costs
with such filing and/or maintenance.  If
one Party proceeds in filing and/or maintaining Program Patent Rights
hereunder, then the other Party agrees to assign or otherwise take any action
necessary to assist the cost-bearing Party in achieving the filing or
maintenance of such Program Patent Rights.

 

6.2.4.                     Provisions with Respect to 11
U.S.C. § 365(n).  With respect to each license granted by
either Party to the other Party hereunder, the Parties agree that, for purposes
of 11 U.S.C. § 365(n), this Agreement shall be deemed to be an executory
contract under which the Party granting such license is a “licensor” and the
Party to whom such license is granted is the “licensee”.  With respect to all other provisions of this
Agreement, the Parties agree that, for purposes of 11 U.S.C. § 365(n),
this Agreement shall be deemed to be an agreement supplementary to such
executory contract.

 

7.                                      TERM; TERMINATION

 

7.1.                              Term.  This Agreement shall commence on the
Effective Date and continue for a period of two (2) years, unless extended or
sooner terminated as set forth in this Section 7 (the “Term”).  At least six (6) months prior to the end of
the initial Term and any extension thereof,

 

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the JSC shall advise the Parties as to
whether the JSC believes that the Research Program should be extended or
expanded, but any extension or expansion shall require the agreement of the
parties.

 

7.2.                              Termination.

 

7.2.1.                     Termination for Breach.  In the event that either Party defaults or
breaches any material term of this Agreement on its part to be performed or
observed, the other Party shall have the right to terminate this Agreement (a)
by giving thirty (30) days’ written notice to the defaulting Party in the case
of a breach of any payment term of this Agreement and (b) by giving sixty (60)
days’ written notice to the defaulting Party in the case of any other breach;
provided, however, that in the case of a default or breach capable of being
cured, if the said defaulting Party shall cure the said default or breach
within such notice period after the said notice shall have been given, then the
said notice shall not be effective.

 

7.2.2.                     Termination for Bankruptcy.  In the event that either Party files for
protection under bankruptcy laws, makes an assignment for the benefit of
creditors, appoints or suffers appointment of a receiver or trustee over its
property, files a petition under any bankruptcy or insolvency act or has any
such petition filed against it which is not discharged within sixty (60) days
of the filing thereof, then the other Party shall have the right, but not the
obligation, to terminate this Agreement effective immediately upon written
notice to such Party.

 

7.2.3.                     Termination by Access Without
Cause.  Access shall have the right to terminate this
Agreement and the Research Program, without cause, on not less than three months’
written notice to IG.  In the event that
Access terminates this Agreement and the Research Program without cause under
this paragraph, Access shall pay to IG (i) all installment payments due under Section 2.3.1
above through the effective date of such termination, with the final
installment pro-rated from the previous payment to the date of termination; and
(ii) all fixed, non-cancelable costs or expenses actually incurred by IG as
required to perform the Research Program.

 

7.3.                              Surviving Provisions.  Termination of this Agreement for any reason
shall be without prejudice to rights which expressly survive termination in
accordance with the terms of this Agreement, including without limitation, the
rights and obligations of the Parties provided in Sections 3, 4, 6, 7.2.3, 7.3,
8 and 9, all of which shall survive such termination.

 

8.                                      REPRESENTATIONS AND WARRANTIES

 

8.1.                              Mutual Representations.  Access and IG each represents and warrants to
the other Party as follows:

 

8.1.1.                     Organization.  It is a corporation duly organized, validly
existing and is in good standing under the laws of the jurisdiction of
organization, is qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which the performance of its obligations
hereunder requires such qualification.

 

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8.1.2.                     Authorization.  The execution, delivery and performance by it
of this Agreement have been duly authorized by all necessary corporate action
and do not and will not violate any provision of any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award presently in
effect having applicability to it or any provision of its charter documents.

 

8.1.3.                     Binding Agreement.  This Agreement is a legal, valid and binding
obligation of it enforceable against it in accordance with its terms and
conditions.

 

8.1.4.                     No Inconsistent Obligation.  It is not under any obligation to any person,
or entity, contractual or otherwise, that is conflicting or inconsistent in any
respect with the terms of this Agreement or that would impede the diligent and
complete fulfillment of its obligations.

 

8.2.                              Warranty Disclaimer.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY WITH RESPECT TO ANY
TECHNOLOGY, GOODS, SERVICES, RIGHTS OR OTHER SUBJECT MATTER OF THIS AGREEMENT
AND HEREBY DISCLAIMS WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE AND NONINFRINGEMENT WITH RESPECT TO ANY AND ALL OF THE FOREGOING.

 

8.3.                              Limited Liability.  NOTWITHSTANDING ANYTHING ELSE IN THIS
AGREEMENT OR OTHERWISE, NEITHER ACCESS NOR IG WILL BE LIABLE WITH RESPECT TO
ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT
LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR (I) ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES OR LOST PROFITS OR (II) COST OF PROCUREMENT
OF SUBSTITUTE GOODS OR TECHNOLOGY.

 

9.                                      MISCELLANEOUS

 

9.1.                              Dispute Resolution.  The Parties recognize that disputes may from
time to time arise between the Parties during the term of this Agreement.  It is the objective of the Parties to
establish procedures to facilitate the resolution of disputes arising under
this Agreement, including, without limitation, disputes concerning the definitions
of terms used in this Agreement, in an expedient manner by mutual cooperation
and without resort to litigation.  To
accomplish this objective, the Parties agree to follow the procedures set forth
in this Section 9.1 to resolve any dispute arising under this
Agreement.  In the event of such a
dispute between the Parties, either Party, by written notice to the other
Party, shall have such dispute referred to the Parties’ respective executive
officers designated below or their successors, for attempted resolution by good
faith negotiations within thirty (30) days after such notice is received.  Said designated officers are as follows:

 

	
  For IG:

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
  For Access:

  	
   

  	
  Vice
  President, Research & Development

  

 

11

 

In the event
the designated executive officers are not able to resolve such dispute after
such thirty (30) day period, then the Parties shall resolve such dispute by
arbitration under the Commercial Rules of the American Arbitration Association
(the “AAA”).  Three arbitrators shall be
selected.  IG and Access shall each
select one arbitrator and the two chosen arbitrators shall select the third
arbitrator, or failing agreement on the selection of the third arbitrator, the
AAA shall select the third arbitrator. 
Unless otherwise agreed by IG and Access, arbitration will take place in
Boston, Massachusetts.

 

9.2.                              Notices.  All notices shall be in writing mailed via
certified mail, return receipt requested or courier providing evidence of
delivery, addressed as follows, or to such other address as may be designated
from time to time:

 

	
  If to IG:

  	
   

  	
  If to Access:

  
	
   

  	
   

  	
   

  
	
  135 Beaver Street

  	
   

  	
  7575 Fulton St. East

  
	
  Waltham, MA 02452

  	
   

  	
  Ada, MI 49355-0001

  
	
  Attention: Chief Executive Officer

  	
   

  	
  Attention: George Calvert

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Mintz, Levin, Cohn, Ferris,

  	
   

  	
  7575 Fulton St. East.

  
	
  Glovsky and
  Popeo, P.C.

  	
   

  	
  Ada, MI 49355-0001

  
	
  One Financial Center

  	
   

  	
  Attention: Thomas R. Curran

  
	
  Boston, MA 02111

  	
   

  	
  Chief Legal Officer

  
	
  Attention: Ford Goldman, Esquire

  	
   

  	
   

  

 

9.3.                              Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Michigan, without regard
to the application of principles of conflicts of law.

 

9.4.                              Binding Effect.  This Agreement shall be binding upon and
inure to the benefit of the Parties and their respective legal representatives,
successors and permitted assigns.

 

9.5.                              Headings.  Section and subsection headings are
inserted for convenience of reference only and do not form a part of this Agreement.

 

9.6.                              Counterparts.  This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original.

 

9.7.                              Amendment; Waiver.  This Agreement may be amended, modified,
superseded or canceled, and any of the terms may be waived, only by a written
instrument executed by each Party or, in the case of waiver, by the Party or
Parties waiving compliance, provided, that in the case of IG, such amendment
must be approved by a majority of the members of IG’s Board of Directors who
are not selected by or affiliated with Access. 
The delay or failure of any Party at any time or times to require
performance of any provisions shall in no manner affect the rights at a later
time to enforce the same.  No waiver by
any Party of any condition or of the breach of any

 

12

 

term contained in this Agreement, whether by
conduct, or otherwise, in any one or more instances, shall be deemed to be, or
considered as, a further or continuing waiver of any such condition or of the
breach of such term or any other term of this Agreement.

 

9.8.                              No Agency or Partnership.  Nothing contained in this Agreement shall
give either Party the right to bind the other, or be deemed to constitute the
Parties as agents for the other or as partners with each other or any Third
Party.

 

9.9.                              Assignment and Successors.  This Agreement may not be assigned by either
Party without the written consent of the other which shall not be unreasonably
withheld, except that each Party may assign this Agreement and the rights,
obligations and interests of such Party to any purchaser of all or
substantially all of its assets to which this Agreement relates or to any
successor corporation resulting from any merger or consolidation of such Party
with or into such corporation.

 

9.10.                        Force Majeure.  Neither IG nor Access shall be liable for
failure of or delay in performing obligations set forth in this Agreement, and
neither shall be deemed in breach of its obligations, if such failure or delay
is due to natural disasters or any causes beyond the reasonable control of IG
or Access.  In event of such force
majeure, the Party affected thereby shall use reasonable efforts to cure or
overcome the same and resume performance of its obligations hereunder.

 

9.11.                        Interpretation.  The Parties hereto acknowledge and agree
that: (i) each Party and its counsel reviewed and negotiated the terms and
provisions of this Agreement and have contributed to its revision; (ii) the
rule of construction to the effect that any ambiguities are resolved against
the drafting Party shall not be employed in the interpretation of this
Agreement; and (iii) the terms and provisions of this Agreement shall be
construed fairly as to all Parties hereto and not in a favor of or against any
Party, regardless of which Party was generally responsible for the preparation
of this Agreement.

 

9.12.                        Integration; Severability.  This Agreement, together with the License
Agreement, is the sole agreement with respect to the subject matter hereof and
supersedes all other agreements and understandings between the Parties with
respect to same.  The provisions of this
Agreement shall be interpreted, if possible, so as to be valid, legal and enforceable.  In the event that any provision of this
Agreement conflicts with the law under which this Agreement is to be construed
or is otherwise held to be invalid, illegal or unenforceable by a court or
arbitration panel with jurisdiction over the parties to this Agreement, such
provision shall be deemed to be restated to reflect as nearly as possible the
original intentions of the parties in accordance with applicable law, and the
remainder of this Agreement shall remain in full force and effect.

 

13

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized representatives.

 

 

	
   

  	
  INTERLEUKIN
  GENETICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Philip R. Reilly

  	
   

  
	
   

  	
   

  	
  Philip R. Reilly

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ACCESS
  BUSINESS GROUP LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ George Calvert

  	
   

  
	
   

  	
   

  	
  George Calvert

  
	
   

  	
   

  	
  Vice President –Research & Development

  

 

14

 

APPENDIX A

 

DESCRIPTION OF RESEARCH PROGRAM AND
DELIVERABLES

 

[ *  *  *
Appendix A contains confidential material and has been omitted in its
entirety.   *   *   *]

 

15

 

APPENDIX B

 

AGGREGATE
BUDGET FOR THIRD-PARTY SERVICES

(includes
15% markup)

 

$898,500

 

16EXHIBIT 10.39

 

CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.  ASTERISKS DENOTE OMISSIONS.

 

RESEARCH
AGREEMENT

 

This RESEARCH AGREEMENT (this “Agreement”) is entered into as of March 5,
2005 (the “Effective Date”) by and between Interleukin Genetics, Inc., a
Delaware corporation having its principal office at 135 Beaver Street, Waltham,
MA 02452 (“IG”) and Access Business Group LLC, having its principal office at
7575 Fulton Street, East, Ada, Michigan 49355-0001 (“Access”).  Each of IG and Access is sometimes referred
to individually herein as a “Party” and collectively as the “Parties.”

 

WHEREAS, Access, together with its Affiliates, has expertise and
experience in the development, commercialization and marketing of nutritional
supplements and personal care products and IG has expertise and experience in
seeking and analyzing scientific opportunities that would support development
of nutritional supplements and personal care products and determining the credibility
of such opportunities;

 

WHEREAS, Access desires that IG perform research on the terms and
subject to the conditions set forth in this Agreement and the Parties desire to
obtain certain rights to inventions arising out of such research;

 

WHEREAS, IG is willing to perform such research and the Parties are
willing to grant each other such rights as described herein;

 

NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the Parties hereby agree
as follows:

 

1.                                      DEFINITIONS

 

Whenever used in this Agreement with an initial capital letter, the
terms defined in this Section 1 shall have the meanings specified.

 

1.1.                              “Affiliate” means any corporation, firm,
partnership or other entity that directly or indirectly controls or is
controlled by or is under common control with a Party to this Agreement.  For purposes of this definition, “control”
means ownership, directly or through one or more Affiliates, of fifty percent
(50%) or more of the shares of stock entitled to vote for the election of
directors, in the case of a corporation, fifty percent (50%) or more of the
equity interests in the case of any other type of legal entity, status as a
general partner in any partnership, or any other arrangement whereby a Party
controls or has the right to control the Board of Directors or equivalent
governing body of a corporation or other entity.  For purposes of this Agreement, Access,
Alticor Inc. and subsidiaries of Alticor Inc., on the one hand, and IG, on the
other hand, will not be deemed to be Affiliates of each other.

 

1.2.                              “Access Patent Rights” means any Patent Rights with
respect to Access Technology.

 

1.3.                              “Access Proprietary Materials” means any Proprietary
Materials of Access that are used by Access, or provided by Access for use, in
the Research Program.

 

 

1.4.                              “Access Technology” means any Technology
Controlled by Access as of the Effective Date and during the Term that is used
by Access, or provided by Access for use, in the Research Program.

 

1.5.                              “Confidential Information” means, as regards a Party (the
“Receiving Party”), (i) all information produced or discovered by either Party
under the Research Program (including without limitation, compilations, data,
formulae, models, patent disclosures, procedures, processes, projections,
protocols, results of experimentation and testing, specifications, strategies
and techniques), and all tangible and intangible embodiments thereof of any
kind whatsoever (including, without limitation, apparatus, biological or
chemical materials, animals, cells, compositions, documents, drawings,
machinery, patent applications, records and reports) and (ii) all other
information (including but not limited to information about any element of
Technology or a Party’s business) which is disclosed, whether in writing and
marked as confidential at the time of disclosure to the Receiving Party or
customarily considered to be confidential information or by oral disclosure
reduced to a writing, by the other Party (the “Disclosing Party”) to the
Receiving Party or to any of its employees, consultants, Affiliates, licensees
and sublicensees hereunder except to the extent that the information described
in this subsection (ii) (a) as of the date of disclosure is demonstrably
known to, or in the possession of, the Receiving Party or its Affiliates, as
shown by written documentation, other than by virtue of a prior confidential
disclosure by the Disclosing Party or its Affiliates; (b) as of the date of
disclosure is in, or subsequently enters, the public domain, through no fault
or omission of the Receiving Party or its Affiliates; (c) as of the date of
disclosure or thereafter is obtained by the Receiving Party or its Affiliates
from a Third Party free from any obligation of confidentiality to the
Disclosing Party and rightfully in possession of such information or (d) is
independently developed by or for the Receiving Party or its Affiliates without
reference to or in reliance upon any of the foregoing information as
demonstrated by competent written records.

 

1.6.                              “Control” or “Controlled”
means (a) with respect to Technology (other than Proprietary Materials) and/or
Patent Rights, the possession by a party of the ability to grant a license or
sublicense of such Technology and/or Patent Rights as provided herein without
violating the terms of any agreement or arrangement between such party and any
Third Party and (b) with respect to Proprietary Materials, the possession by a
party of the ability to supply such Proprietary Materials to the other party as
provided herein without violating the terms of any agreement or arrangement
between such party and any Third Party.

 

1.7.                              “IG Patent Rights” means any Patent Rights with
respect to IG Technology.

 

1.8.                              “IG Technology” means any Technology
Controlled by IG as of the Effective Date and during the Term that is used by
IG, or provided by IG, or provided by IG for use, in the Research Program.

 

1.9.                              “Joint Science Committee” or “JSC” shall have the meaning set
forth in Section 5.1 hereof.

 

1.10.                        “Patent Rights” means the rights and interests
in and to issued patents and pending patent applications in any country,
including all substitutions, continuations,

 

2

 

continuations-in-part, divisionals,
supplementary protection certificates, renewals, all letters patent granted
thereon, and all reissues, reexaminations, extensions, confirmations,
revalidations, registrations and patents of addition thereof.

 

1.11.                        “Party” or “Parties”
has the meaning set forth in the first paragraph of this Agreement.

 

1.12.                        “Program Invention” means any Technology, whether
or not patentable, which is conceived and/or first reduced to practice by
employees of, or consultants to, either Party, or jointly by both Parties, in
the conduct of the Research Program.

 

1.13.                        “Program Patent Rights” means all Patent Rights
claiming any Program Invention.

 

1.14.                        “Proprietary Materials” means any tangible chemical,
biological or physical research materials, including but not limited to gene
sequences, gene fragment sequences, primers, probes, nucleic acids and nucleic
acid libraries, plasmids, vectors, expression systems, cells, cell lines,
organisms, antibodies, biological substances (and any constituents, progeny,
mutants, derivatives or replications thereof or therefrom), reagents or
chemical compounds that are furnished by or on behalf of one Party to the other
Party, in connection with this Agreement, that are proprietary to the
transferring Party through patent protection, trade secret, or other method of
intellectual property protection, regardless of whether such materials are
specifically designated as proprietary by the transferring Party.

 

1.15.                        “Protocol” means the written protocol
describing the activities to be carried out under the Research Program pursuant
to this Agreement to be agreed upon by the JSC based on the outline attached
hereto as Appendix A.

 

1.16.                        “Research Program” means the program to be conducted by IG
with respect to seeking, identifying and analyzing scientific opportunities for
Access, as more fully described in Appendix A hereto.

 

1.17.                        “Technology” means and includes all
inventions, discoveries, know-how, trade secrets, improvements and Proprietary
Materials, whether or not patentable, including but not limited to, structural
and functional information and other data, formulations and techniques.

 

1.18.                        “Term” has the meaning set forth in Section 7.1.

 

1.19.                        “Territory” means worldwide.

 

1.20.                        “Third Party” means any entity other than
IG, Access or their respective Affiliates.

 

2.                                      RESEARCH PROGRAM

 

2.1.                              Implementation of Research
Program.  The Research Program shall be conducted by
the Parties in accordance with the Protocol and in compliance with all
applicable

 

3

 

laws and regulations.  IG shall use commercially reasonable efforts
to perform the activities to be performed by it under the Research Program, as
described more fully in the Protocol and in the timeline (the “Timeline”) which
the JSC shall agree upon in writing, based upon the outline attached hereto as Appendix
A, as promptly as practicable following the execution hereof.  The Protocol and/or the Timeline may be
modified from time to time after the Effective Date by the JSC pursuant to Section 5.1
hereof.

 

2.2.                              Supply of Proprietary Materials. 
From
time to time during the Term of this Agreement, one Party may supply the other
Party with its Proprietary Materials for use in the Research Program.  In connection therewith, the recipient Party
hereby agrees that (a) it shall not use Proprietary Materials for any purpose
other than exercising any rights granted to it or reserved by it hereunder; (b)
it shall use the Proprietary Materials only in compliance with all applicable
federal, state, and local laws and regulations; (c) it shall not transfer any
Proprietary Materials to any Third Party without the prior written consent of
the transferor, except as expressly permitted hereby; (d) the transferring
Party shall retain full ownership of all such Proprietary Materials; and (e)
upon the expiration or termination of this Agreement, the recipient Party shall
at the instruction of the transferring Party either destroy or return any
unused Proprietary Materials which are not the subject of the grant of a continuing
license hereunder.

 

2.3.                              Consideration. 
In
consideration of IG conducting the Research Program described herein, Access
shall pay to IG as follows:

 

2.3.1.                     Access shall pay to IG an
aggregate sum of Two Million Three Hundred Forty-One Thousand Five Hundred
Dollars ($2,341,500) payable in eight (8) equal quarterly installments of Two
Hundred Ninety-Two Thousand Six Hundred Eighty-Eight Hundred Dollars ($292,688)
each.  The first such installment shall
be due and payable on April 1, 2005 and each of the remaining seven (7)
installments shall be due and payable on the first business day of each
calendar quarter thereafter.  Such
payments shall cover all work to be performed by IG management, research staff
and other employees under this Agreement, and all expenses incurred by IG in
connection therewith, including travel, equipment and supplies, subject,
however, to the following paragraph with respect to Third Party Services.

 

2.3.2.                     Access shall pay, or shall
reimburse IG for, all expenses incurred in obtaining from Third Parties the
additional services described on Appendix B hereto (“Third Party
Services”), on the following terms and conditions:

 

(a)                                  The
payments specified in Section 2.3.1 above include amounts estimated by the
Parties as the costs to be incurred by IG for Third Party Services, plus an
amount equal to 15% of such estimated costs, according to the budget set forth
on Appendix B.

 

(b)                                 IG
agrees that it shall not incur costs for any Third Party Service in excess of
105% of the amount set forth on Appendix B for the specified Third Party
Service (excluding the 15% markup), without the prior written approval of the
JSC.

 

4

 

(c)                                  Within
30 days after March 31 of each year, IG shall submit to Access an itemized
accounting, together with supporting documentation in reasonable detail, of the
aggregate actual costs incurred by IG for Third Party Services during the
12-month period ending on March 31 (excluding any markup).  If such aggregate actual costs exceed the
aggregate amount budgeted for such costs for such 12-month period as set forth
on Appendix B (excluding the 15% markup), Access shall pay to IG,
within 30 days after Access receives such accounting and supporting
documentation, an amount equal to 115% of such excess.

 

(d)                                 If
the aggregate documented, actual costs incurred by IG for Third Party Services
during any 12-month period ending on March 31 are less than the aggregate
amount budgeted for such costs for 12-month period as set forth on Appendix
B (including the 15% markup), then 57.5% of such difference shall be
applied as a credit against the payment obligations of Access under Section 2.3.1
above for the following 12-month period. 
If any such credit balance in favor of Access shall remain outstanding
at the expiration or other termination of this Agreement, IG shall promptly
refund to Access an amount equal to such outstanding credit balance.

 

2.4.                              Supporting
Documentation.  Upon request by Access, IG agrees to provide
Access with supporting documentation in reasonable detail of the actual costs
incurred by IG for Third Party Services.

 

2.5.                              No Broker’s
Commission or Finder’s Fee.  IG agrees that the
consideration expressly provided herein is the sole and exclusive consideration
to which IG shall be entitled for carrying out the Research Program, and that
Access shall have no obligation to pay any amount to IG or any of its
Affiliates, in the nature of a broker’s commission, finder’s fee, or other
amount for acting as the agent or representative of Access, or of any other
Third Party, in connection with any product development opportunity identified
by IG hereunder or for any other transaction contemplated by this Agreement.

 

3.                                      RESEARCH LICENSES

 

3.1.                              License to IG.  Subject to the terms and conditions of this
Agreement, Access hereby grants to IG a non-exclusive, worldwide, royalty-free
license, under the Access Technology, Access Patent Rights, Program Inventions
and Program Patent Rights for the sole purpose of performing the Research
Program.

 

3.2.                              License to Access.  Subject to the terms and conditions of this
Agreement and the License Agreement, IG hereby grants to Access a
non-exclusive, worldwide, royalty-free license, under the IG Technology, IG
Patent Rights, Program Inventions and Program Patent Rights for the sole
purpose of performing the Research Program.

 

5

 

4.                                      TREATMENT OF CONFIDENTIAL INFORMATION; PUBLICITY

 

4.1.                              Confidentiality.

 

4.1.1.                     Confidentiality Obligations.  Access and IG each recognize that the
Confidential Information of the other Party constitutes highly valuable and
proprietary confidential information. 
Access and IG each agrees that during the Term and for five (5) years thereafter,
it will keep confidential, and will cause its employees, consultants,
Affiliates and sublicensees to keep confidential, all of the Confidential
Information of the other Party.  Neither
Access nor IG nor any of their respective employees, consultants, Affiliates
and sublicensees shall use the Confidential Information of the other Party for
any purpose except as expressly permitted in this Agreement.

 

4.1.2.                     Limited Disclosure of
Confidential Information.  Subject to Section 4.1.3 below, Access
and IG each agree that any disclosure of the Confidential Information to any of
its employees, consultants, Affiliates or sublicensees shall be made only if
and to the extent necessary to carry out its rights and responsibilities under
this Agreement, shall be limited to the maximum extent possible consistent with
such rights and responsibilities and shall only be made to persons who are
bound by written confidentiality obligations to maintain the confidentiality
thereof and not to use such Confidential Information except as expressly
permitted by this Agreement.  Access and
IG each agree not to disclose the Confidential Information to any Third Party
under any circumstance without prior written approval from the other Party,
except as otherwise required by law, and except as otherwise expressly permitted
by this Agreement.  Each Party shall take
such action, and shall cause its Affiliates and sublicensees to take such
action, to preserve the confidentiality of the Confidential Information as it
would customarily take to preserve the confidentiality of its own confidential
materials, which shall not, in any event, be less than reasonable care.  Each Party, upon the other’s request, will
return all the Confidential Information disclosed to it by the other Party
pursuant to this Agreement, including all copies and extracts of documents,
within sixty (60) days of the request following the termination of this
Agreement; provided, that, a Party may retain Confidential Information of the
other Party relating to any license or right to use Technology which survives
such termination and one copy of all other Confidential Information may be
retained in inactive archives solely for the purpose of establishing the
contents thereof.

 

4.1.3.                     Identification of Access.  In carrying out the Research Program as
described in Appendix A, including without limitation the New Technology
Opportunities program described therein, IG agrees that, prior to disclosing to
any Third Party that a technology may be considered by Access for product
development, IG will obtain the prior written consent of Access in each
case.  Access may make such approval
contingent upon the satisfaction of specified conditions, including without
limitation the execution of written confidentiality obligations to maintain the
confidentiality of such disclosure and to restrict the use thereof.

 

4.2.                              Publicity.  Neither Party may publicly disclose the terms
of this Agreement or the status or content of the Research Program without the
prior written consent of the other Party; provided, however, that either Party
may make such a disclosure (a) to the extent required by law

 

6

 

or by the requirements of any nationally
recognized securities exchange, quotation system or over-the-counter market on
which such Party has its securities listed or traded or (b) to any actual or
prospective acquirors, real estate or equipment lessors, investors, lenders and
other potential financing sources who are obligated to keep such information
confidential.  In the event that such disclosure
is required by the foregoing clause (a), the disclosing Party shall make
reasonable efforts to provide the other Party with notice beforehand and to
coordinate with the other Party to the maximum extent possible with respect to
the wording and timing of any such disclosure. 
The Parties shall mutually agree on a press release announcing the
execution of this Agreement to be issued immediately following the execution
hereof.  If either Party wishes to issue
any further press release regarding the Research Program, it shall furnish a
copy to the other Party, which shall review such press release and provide any
comments within two (2) business days. 
Once any written statement is approved for public disclosure by both
Parties, either Party may make subsequent public disclosure of the contents of
such statement without the further approval of the other Party.

 

5.                                      JOINT SCIENCE COMMITTEE

 

5.1.                              Formation.  The Joint Science Committee (the “JSC”)
established by IG and Access pursuant to the Research Agreement, dated
effective as of March 5, 2003, shall oversee and coordinate the Parties’
conduct of the Research Program.  During
the Term, the JSC will exchange information in anticipation of developing
mutually beneficial business opportunities pursuant to the subject matter
hereof.  The JSC shall keep written
minutes of its meetings and all actions taken or approved by the JSC.  The members of the JSC designated by each
Party shall be responsible for keeping that Party informed as to the progress
of the Research Program.  The JSC shall
recommend to the Parties amendments and/or modifications to the Protocol and
Timeline and the scope of the Research Program and make recommendations to the
Parties as to the mutually beneficial prosecution of IG Patent Rights and
Program Patent Rights.  The JSC shall
have no power to amend, modify or waive compliance with this Agreement and
shall have only such powers as are specifically delegated to it hereunder.

 

5.2.                              JSC Governance.

 

5.2.1.                     Membership.  The JSC is composed of two representatives of
IG and two representatives of Access. 
These representatives are as follows:

 

IG Representatives:

 

Kenneth Kornman, DDS, Ph.D.

Philip R. Reilly, M.D., J.D.

 

Access Representatives:

 

Robin Dykhouse

Daniel Beio

 

7

 

Either Party
may designate substitutes for its JSC representatives to participate if one or
more of such Party’s designated representatives is unable to be present at a
meeting.  A Party may replace its
representatives serving on the JSC from time to time by written notice to the
other Party specifying the prior representative(s) to be replaced and the
replacement(s) therefor.

 

6.                                      INTELLECTUAL PROPERTY RIGHTS

 

6.1.                              Access
Intellectual Property Rights.  Subject to IG’s rights as described in Section 3
of this Agreement, Access shall have sole and exclusive ownership of all right,
title and interest on a worldwide basis in and to all Access Technology and
Access Patent Rights, and all Program Inventions and Program Patent Rights, with
full rights to license or sublicense.

 

6.2.                              IG Intellectual
Property Rights.  Subject to Access’s rights as described in Section 3
of this Agreement and subject to the terms of the License Agreement, IG shall
have sole and exclusive ownership of all right, title and interest on a
worldwide basis in and to all IG Technology and IG Patent Rights.

 

6.3.                              Provisions with
Respect to 11 U.S.C. § 365(n).  With respect to
each license granted by either Party to the other Party hereunder, the Parties
agree that, for purposes of 11 U.S.C. § 365(n), this Agreement shall be
deemed to be an executory contract under which the Party granting such license
is a “licensor” and the Party to whom such license is granted is the “licensee”.  With respect to all other provisions of this
Agreement, the Parties agree that, for purposes of 11 U.S.C. § 365(n),
this Agreement shall be deemed to be an agreement supplementary to such
executory contract.

 

7.                                      TERM; TERMINATION

 

7.1.                              Term.  This Agreement shall commence on the
Effective Date and continue for a period of two (2) years, unless extended or
sooner terminated as set forth in this Section 7 (the “Term”).  At least six (6) months prior to the end of
the initial Term and any extension thereof, the JSC shall advise the Parties as
to whether the JSC believes that the Research Program should be extended or
expanded, but any extension or expansion shall require the agreement of the
parties.

 

7.2.                              Termination.

 

7.2.1.                     Termination for Breach.  In the event that either Party defaults or breaches
any material term of this Agreement on its part to be performed or observed,
the other Party shall have the right to terminate this Agreement (a) by giving
thirty (30) days’ written notice to the defaulting Party in the case of a
breach of any payment term of this Agreement and (b) by giving sixty (60) days’
written notice to the defaulting Party in the case of any other breach;
provided, however, that in the case of a default or breach capable of being
cured, if the said defaulting Party shall cure the said default or breach
within such notice period after the said notice shall have been given, then the
said notice shall not be effective.

 

7.2.2.                     Termination for Bankruptcy.  In the event that either Party files for
protection under bankruptcy laws, makes an assignment for the benefit of
creditors, appoints or

 

8

 

suffers appointment of a receiver or trustee
over its property, files a petition under any bankruptcy or insolvency act or
has any such petition filed against it which is not discharged within sixty
(60) days of the filing thereof, then the other Party shall have the right, but
not the obligation, to terminate this Agreement effective immediately upon
written notice to such Party.

 

7.2.3.                     Termination by Access Without
Cause.  Access shall have the right to terminate this
Agreement and the Research Program, without cause, on not less than three
months’ written notice to IG.  In the
event that Access terminates this Agreement and the Research Program without
cause under this paragraph, Access shall pay to IG (i) all installment payments
due under Section 2.3.1 above through the effective date of such
termination, with the final installment pro-rated from the previous payment to
the date of termination; and (ii) all fixed, non-cancelable costs or expenses
actually incurred by IG as required to perform the Research Program.

 

7.3.                              Surviving Provisions.  Termination of this Agreement for any reason
shall be without prejudice to rights which expressly survive termination in
accordance with the terms of this Agreement, including without limitation, the
rights and obligations of the Parties provided in Sections 3, 4, 6, 7.2.3, 7.3,
8 and 9, all of which shall survive such termination.

 

8.                                      REPRESENTATIONS AND WARRANTIES

 

8.1.                              Mutual Representations.  Access and IG each represents and warrants to
the other Party as follows:

 

8.1.1.                     Organization.  It is a corporation duly organized, validly
existing and is in good standing under the laws of the jurisdiction of organization,
is qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which the performance of its obligations hereunder
requires such qualification.

 

8.1.2.                     Authorization.  The execution, delivery and performance by it
of this Agreement have been duly authorized by all necessary corporate action
and do not and will not violate any provision of any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award presently in
effect having applicability to it or any provision of its charter documents.

 

8.1.3.                     Binding Agreement.  This Agreement is a legal, valid and binding
obligation of it enforceable against it in accordance with its terms and
conditions.

 

8.1.4.                     No Inconsistent Obligation.  It is not under any obligation to any person,
or entity, contractual or otherwise, that is conflicting or inconsistent in any
respect with the terms of this Agreement or that would impede the diligent and
complete fulfillment of its obligations.

 

8.2.                              Warranty Disclaimer.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY WITH RESPECT TO ANY
TECHNOLOGY, GOODS, SERVICES, RIGHTS OR OTHER SUBJECT MATTER OF THIS AGREEMENT
AND HEREBY DISCLAIMS WARRANTIES OF

 

9

 

MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE AND NONINFRINGEMENT WITH RESPECT TO ANY AND ALL OF THE FOREGOING.

 

8.3.                              Limited Liability.  NOTWITHSTANDING ANYTHING ELSE IN THIS
AGREEMENT OR OTHERWISE, NEITHER ACCESS NOR IG WILL BE LIABLE WITH RESPECT TO
ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT
LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR (I) ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES OR LOST PROFITS OR (II) COST OF PROCUREMENT
OF SUBSTITUTE GOODS OR TECHNOLOGY.

 

9.                                      MISCELLANEOUS

 

9.1.                              Dispute Resolution.  The Parties recognize that disputes may from
time to time arise between the Parties during the term of this Agreement.  It is the objective of the Parties to establish
procedures to facilitate the resolution of disputes arising under this
Agreement, including, without limitation, disputes concerning the definitions
of terms used in this Agreement, in an expedient manner by mutual cooperation
and without resort to litigation.  To
accomplish this objective, the Parties agree to follow the procedures set forth
in this Section 9.1 to resolve any dispute arising under this
Agreement.  In the event of such a
dispute between the Parties, either Party, by written notice to the other
Party, shall have such dispute referred to the Parties’ respective executive
officers designated below or their successors, for attempted resolution by good
faith negotiations within thirty (30) days after such notice is received.  Said designated officers are as follows:

 

	
  For IG:

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
  For Access:

  	
   

  	
  Vice
  President, Research & Development

  

 

In the event
the designated executive officers are not able to resolve such dispute after
such thirty (30) day period, then the Parties shall resolve such dispute by
arbitration under the Commercial Rules of the American Arbitration Association
(the “AAA”).  Three arbitrators shall be
selected.  IG and Access shall each
select one arbitrator and the two chosen arbitrators shall select the third
arbitrator, or failing agreement on the selection of the third arbitrator, the
AAA shall select the third arbitrator. 
Unless otherwise agreed by IG and Access, arbitration will take place in
Boston, Massachusetts.

 

9.2.                              Notices.  All notices shall be in writing mailed via
certified mail, return receipt requested or courier providing evidence of
delivery, addressed as follows, or to such other address as may be designated
from time to time:

 

	
  If to IG:

  	
   

  	
  If to Access:

  
	
   

  	
   

  	
   

  
	
  135 Beaver Street

  	
   

  	
  7575 Fulton St. East

  
	
  Waltham, MA 02452

  	
   

  	
  Ada, MI 49355-0001

  
	
  Attention: Chief Executive Officer

  	
   

  	
  Attention: George Calvert

  

 

10

 

	
  With a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Mintz, Levin, Cohn, Ferris,

  	
   

  	
  7575 Fulton St. East

  
	
  Glovsky and
  Popeo, P.C.

  	
   

  	
  Ada, MI 49355-0001

  
	
  One Financial Center

  	
   

  	
  Attention: Thomas R. Curran

  
	
  Boston, MA 02111

  	
   

  	
  Chief Legal Officer

  
	
  Attention: Ford Goldman, Esquire

  	
   

  	
   

  

 

9.3.                              Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Michigan, without regard
to the application of principles of conflicts of law.

 

9.4.                              Binding Effect.  This Agreement shall be binding upon and
inure to the benefit of the Parties and their respective legal representatives,
successors and permitted assigns.

 

9.5.                              Headings.  Section and subsection headings are
inserted for convenience of reference only and do not form a part of this
Agreement.

 

9.6.                              Counterparts.  This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original.

 

9.7.                              Amendment; Waiver.  This Agreement may be amended, modified,
superseded or canceled, and any of the terms may be waived, only by a written
instrument executed by each Party or, in the case of waiver, by the Party or
Parties waiving compliance, provided, that in the case of IG, such amendment
must be approved by a majority of the members of IG’s Board of Directors who
are not selected by or affiliated with Access. 
The delay or failure of any Party at any time or times to require
performance of any provisions shall in no manner affect the rights at a later
time to enforce the same.  No waiver by
any Party of any condition or of the breach of any term contained in this
Agreement, whether by conduct, or otherwise, in any one or more instances,
shall be deemed to be, or considered as, a further or continuing waiver of any
such condition or of the breach of such term or any other term of this
Agreement.

 

9.8.                              No Agency or Partnership.  Nothing contained in this Agreement shall
give either Party the right to bind the other, or be deemed to constitute the
Parties as agents for the other or as partners with each other or any Third
Party.

 

9.9.                              Assignment and Successors.  This Agreement may not be assigned by either
Party without the written consent of the other which shall not be unreasonably
withheld, except that each Party may assign this Agreement and the rights,
obligations and interests of such Party to any purchaser of all or
substantially all of its assets to which this Agreement relates or to any
successor corporation resulting from any merger or consolidation of such Party
with or into such corporation.

 

9.10.                        Force Majeure.  Neither IG nor Access shall be liable for
failure of or delay in performing obligations set forth in this Agreement, and
neither shall be deemed in breach of its obligations, if such failure or delay
is due to natural disasters or any causes beyond the

 

11

 

reasonable control of IG or Access.  In event of such force majeure, the Party
affected thereby shall use reasonable efforts to cure or overcome the same and
resume performance of its obligations hereunder.

 

9.11.                        Interpretation.  The Parties hereto acknowledge and agree
that: (i) each Party and its counsel reviewed and negotiated the terms and
provisions of this Agreement and have contributed to its revision; (ii) the
rule of construction to the effect that any ambiguities are resolved against
the drafting Party shall not be employed in the interpretation of this
Agreement; and (iii) the terms and provisions of this Agreement shall be
construed fairly as to all Parties hereto and not in a favor of or against any
Party, regardless of which Party was generally responsible for the preparation
of this Agreement.

 

9.12.                        Integration; Severability.  This Agreement, together with the License
Agreement, is the sole agreement with respect to the subject matter hereof and
supersedes all other agreements and understandings between the Parties with
respect to same.  The provisions of this
Agreement shall be interpreted, if possible, so as to be valid, legal and
enforceable.  In the event that any
provision of this Agreement conflicts with the law under which this Agreement
is to be construed or is otherwise held to be invalid, illegal or unenforceable
by a court or arbitration panel with jurisdiction over the parties to this
Agreement, such provision shall be deemed to be restated to reflect as nearly
as possible the original intentions of the parties in accordance with
applicable law, and the remainder of this Agreement shall remain in full force
and effect.

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized representatives.

 

 

	
   

  	
  INTERLEUKIN
  GENETICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Philip R. Reilly

  	
   

  
	
   

  	
   

  	
  Philip R. Reilly

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ACCESS
  BUSINESS GROUP LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ George Calvert

  	
   

  
	
   

  	
   

  	
  George Calvert

  
	
   

  	
   

  	
  Vice President—Research & Development

  

 

12

 

APPENDIX A

 

DESCRIPTION OF RESEARCH PROGRAM AND
DELIVERABLES

 

[ *  *  *
Appendix A contains confidential material and has been omitted in its
entirety.   *   *   *]

 

13

 

APPENDIX B

 

AGGREGATE
BUDGET FOR THIRD-PARTY SERVICES

(includes
15% markup)

 

$801,500

 

14

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