Document:

Exhibit
4.04

 

SNAP APPLIANCE, INC.

 

2002 STOCK OPTION AND RESTRICTED STOCK PURCHASE PLAN

 

1.             PURPOSE.
The Snap Appliance, Inc. 2002 Stock Option and Restricted Stock Purchase Plan
(the “Plan”) is intended to provide incentive to key employees, members of the
Board of Directors (the “Board”) and consultants of Snap Appliance, Inc. a
Delaware corporation (the “Company”), to encourage proprietary interest in the
Company, to encourage such key employees and members of the Board to remain in
the employ of the Company or such key consultants to remain in the service of
the Company, and to attract new employees, managers and consultants with
outstanding qualifications.

 

2.             DEFINITIONS. Unless otherwise defined herein
or the context otherwise requires, the capitalized terms used herein shall have
the following meanings:

 

a.             “Administrator” shall mean the Board
or the Committee, whichever shall be administering the Plan from time to time
in the discretion of the Board, as described in Section 4 of the Plan.

 

b.             “Board” shall mean the Board of
Directors of the Company.

 

c.             “Cause” shall mean, as used in the
context of termination of employment, that the Company (or its successor) (the
“Employer”) has exercised its right to terminate an individual’s employment
with the Employer for one or more of the following reasons: (1) engaging in any
fraudulent act that is harmful to the Employer; (2) engaging in gross, willful
or intentional misconduct that is harmful to the Employer; (3) willful failure
to perform his/her duties; (4) habitual drunkenness at the office; (5)
narcotics drug addiction, (6) any conviction of or a plea of “guilty” or “no
contest” to a felony that is harmful to the Employer or (7) gross neglect of
his/her duties.

 

d.             “Code” shall mean the Internal Revenue
Code of 1986, as amended from time to time.

 

e.             “Commission” shall mean the Securities
and Exchange Commission.

 

f.              “Committee” shall mean the committee,
if any, appointed by the Board in accordance with Section 4 of the Plan.

 

g.             “Company” shall mean Snap Appliance,
Inc., a Delaware corporation.

 

 

h.             “Corporate Transaction” shall mean a
sale of all or substantially all of the Company’s assets, a merger into,
consolidation with or any other reorganization in which the Company is not the
surviving entity, or if the Company is the surviving entity, a change in the
ultimate ownership of the outstanding equity securities of the Company
following the transaction by fifty percent (50%) or more as a result of such
transaction.

 

i.              “Disability” shall mean a medically
determinable physical or mental impairment which has made an individual
incapable of performing his or her duties, as determined in good faith by the
Administrator. A condition shall be considered a Disability if (i) it can be
expected to result in death or has lasted or can be expected to last for a
continuous period of not less than twelve (12) months, and (ii) the
Administrator, based upon medical evidence, has expressly determined that a
Disability exists.

 

j.              “Employee” shall mean an individual who
is employed (within the meaning of Section 3401 of the Code and the regulations
thereunder) by the Company.

 

k.             “Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended from time to time.

 

l.              “Exercise Price” shall mean the price
per Share, as determined by the Administrator, at which an Option may be
exercised.

 

m.            “Fair Market Value” shall mean the
value of one (1) Share, determined as follows:

 

(i)            If the Shares are (A) listed on an exchange,
the closing price as reported for composite transactions on the business day
immediately prior to the date of valuation or, if no sale occurred on that
date, then the mean between the closing bid and asked prices on such exchange
on such date, or (B) traded over-the-counter on the National Market System (the
“NMS”) of the National Association of Securities Dealers, Inc. Automated
Quotation System (“NASDAQ”), the last sale price on the business day
immediately prior to the date of valuation or, if no sale occurred on such
date, then the mean between the highest bid and lowest asked prices as of the
close of business on the business day immediately prior to the date of
valuation, as reported in NASDAQ;

 

(ii)           If the Shares are not traded on an exchange or the NMS but are
otherwise traded over-the-counter, the mean between the highest bid and lowest
asked prices quoted in NASDAQ as of the close of business on the business day
immediately prior to the date of valuation or, if on such day such Shares are
not quoted in NASDAQ, the mean between the representative bid and asked prices
on such date in the

 

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domestic over-the-counter market as reported by the
National Quotation Bureau, Inc., or any similar successor organization; or

 

(iii)          If neither clause (i) nor (ii) above applies, the fair market value as
determined by the Administrator in good faith. Such determination shall be
conclusive and binding on all persons.

 

n.             “Incentive Option” shall mean any
Option which is intended to qualify under Section 422 of the Code as an
“incentive stock option.”

 

o.             “Incentive Option Agreement” shall
mean a written option agreement evidencing a grant of an Incentive Option.

 

p.             “Nonstatutory Option” shall mean any
Option which is not intended to qualify under Section 422 of the Code as an
“incentive stock option.”

 

q.             “Nonstatutory Option Agreement” shall
mean a written option agreement evidencing a grant of a Nonstatutory Option.

 

r.              “Option” shall mean any Incentive
Option or Nonstatutory Option granted pursuant to the Plan. An Option shall be
granted as of the date the Administrator takes the necessary action to approve
the grant. However, if the minutes or appropriate resolutions of the
Administrator provide that an Option is to be granted as of a date in the
future, the date of grant shall be that future date.

 

s.             “Option Agreement” shall mean an
Incentive Option Agreement or Nonstatutory Option Agreement.

 

t.              “Option Purchase Price” shall mean the
Exercise Price multiplied by the number of Shares with respect to which an
Option is exercised.

 

u.             “Optionee” shall mean a Participant
who has received an Option.

 

v.             “Participant” shall have the meaning
assigned to it in Section 5(a) hereof.

 

w.            “Parent” shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with the
Company, provided each corporation in the unbroken chain (other than the
Company) owns, at the time of the determination, stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of stock in one
of the other corporations in such chain.

 

x.             “Plan” shall mean this Snap Appliance,
Inc. 2002 Stock Option and Restricted Stock Purchase Plan,
as it may be amended from time to time.

 

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y.             “Restricted Shares” shall mean
restricted Shares purchased under and having the terms and conditions set forth
in the Plan.

 

z.             “Restricted Share Purchase Price”
shall mean the purchase price per Restricted Share to be issued under the Plan,
subject to adjustment for stock splits, stock combinations and the like.

 

aa.           “Restricted Stock Agreement” shall
mean a written restricted stock agreement evidencing the purchase of Restricted
Shares.

 

bb.          “Retirement” shall mean the voluntary
cessation of employment by an Employee upon the attainment of age sixty-five
(65) or thereafter and the completion of not less than three (3) years of
service with the Company.

 

cc.           “Securities Act” shall mean the Securities Act of 1933, as
amended from time to time.

 

dd.          “Shares” shall mean shares of common stock, par value $.001 per
share, of the Company.

 

ee.           “Subsidiary” shall mean any
corporation (other than the Company) in an unbroken chain of corporations
beginning with the Company, provided each corporation (other than the last corporation)
in the unbroken chain owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.

 

ff.            “10% Shareholder” shall mean the owner
of stock (as determined under Code Section 424(d)) possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company (or any Parent or Subsidiary).

 

3.             EFFECTIVE DATE. The Plan was adopted by the
Board effective November 14, 2002 (the “Effective Date”).

 

4.             ADMINISTRATION.

 

a.             Administrator. The Plan shall be administered, in the
discretion of the Board from time to time, by the Board or a Committee which
shall be appointed by the Board. The Board may from time to time remove members
from, or add members to, the Committee. Vacancies on the Committee, however
caused, shall be filled by the persons already serving as members of the Board.
The Board shall appoint one of the members of the Committee as Chairman. The
Administrator shall hold meetings at such times and places as it may determine.
Acts of a majority of the Administrator at which a quorum is present, or acts
reduced to or approved in writing by

 

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the unanimous consent of the members of the
Administrator, shall be the valid acts of the Administrator.

 

b.             Powers of Administrator. The Administrator shall from time to time
at its discretion select the Employees, members of the Board and consultants
who are to be granted Options or issued Restricted Shares and determine the
number of Shares to be subject to Options to be granted to each Optionee or the
number of Restricted Shares to be received. A Committee or Board member shall
in no event participate in any determination relating to Options held by or to
be granted, or Restricted Shares to be issued, to such Committee or Board
member. The interpretation and construction by the Administrator of any
provision of the Plan or of any Option Agreement or Restricted Stock Agreement
shall be final. No member of the Administrator shall be liable for any action
or determination made in good faith with respect to the Plan or any Options or
Restricted Shares granted or issued thereunder.

 

5.             PARTICIPATION.

 

a.             Eligibility. The persons eligible to receive Options or purchase Restricted Shares
shall be such persons (collectively, “Participants”; individually, a
“Participant”) as the Administrator may select from among the following classes
of persons, subject to the terms and conditions of Section 7 below:

 

(i)            in the case of Nonstatutory Options and
Restricted Shares, all officers (including officers who are members of the
Board), other Employees, non-Employee directors and non-Employee consultants
(including non-Employee consultants who are members of the Board) of the
Company or any of its Subsidiaries or Parents; and

 

(ii)           in the case of Incentive Options, all officers (including officers who
are members of the Board) and other Employees of the Company or any of its
Subsidiaries or Parents.

 

b.             10% Shareholders. To the extent required by the Code, a 10%
Shareholder shall not be eligible to receive an Incentive Option unless (i) the
Option Exercise Price of the shares subject to such Incentive Option is at least
one hundred ten percent (110%) of the Fair Market Value on the date of grant,
and (ii) such Incentive Option by its terms is not exercisable after the
expiration of five (5) years from the date of grant.

 

6.             SHARES. The Shares subject to Options and
Restricted Shares purchased under the Plan shall be the Company’s unissued or
reacquired Shares. The aggregate number of Shares which may be issued under the
Plan shall not exceed

 

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9,533,005(1) Shares. The number of Shares subject to Options and
available for purchase as Restricted Shares outstanding at any time shall not
exceed the number of Shares remaining available for issuance under the Plan.
Notwithstanding the foregoing, at no time shall the total number of Shares
issuable upon exercise of all outstanding Options and the total number of
Shares provided for under any stock bonus or similar plan of the Company exceed
a number of Shares equal to thirty percent (30%) of the then outstanding Shares
(including Shares issuable upon the conversion of the Company’s convertible
preferred stock), based on the shares which are outstanding at the time the
calculation is made, unless approved by at least two-thirds of the outstanding
shares of the Company entitled to vote. In the event any outstanding Option
under the Plan for any reason expires or is canceled or terminated, or in the
event that any Restricted Shares purchased under the Plan for any reason are
reacquired by the Company, the Shares allocable to the unexercised portion of
such Option, or the Restricted Shares so reacquired, may again be subjected to
grant or issuance under the Plan. The Shares shall be subject to adjustment in
the manner provided in Section 9 hereof upon the occurrence of an event specified
in Section 9.

 

7.             TERMS AND CONDITIONS OF OPTIONS AND
RESTRICTED SHARES.

 

a.             Options. Options granted under the Plan may be (i) Incentive Options, (ii)
Nonstatutory Options, and (iii) combinations of the foregoing.

 

b.             Option Agreements; Restricted Stock
Agreements. Each Option and
purchase of Restricted Shares shall be evidenced by a written Incentive Option
Agreement, Nonstatutory Option Agreement or Restricted Stock Agreement, as the
case may be, substantially in the form of Annex A, Annex B and Annex C,
respectively, to this Plan, or in such other form as the Administrator shall
from time to time determine. Such agreements need not be identical but shall
comply with and be subject to the terms and conditions set forth in this
Section 7.

 

c.             Number of Shares. Each Option Agreement and Restricted Stock
Agreement shall state the number of Shares or Restricted Shares, respectively,
to which it pertains and shall provide that the adjustment thereof shall be
subject to the provisions of Section 9 hereof.

 

d.             Vesting of Options. Each Option shall become exercisable in one
or more installments at such time or times and subject to such conditions,
including, without limitation, the achievement of specified performance goals
or objectives, as shall be determined by the Administrator and set forth in the
applicable Incentive Option Agreement or Nonstatutory Option Agreement, as the
case may be.

 

(1) Number of shares
approved by Board of Directors and stockholders in June, 2003.

 

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Notwithstanding the foregoing, any Options granted under the Plan shall
become exercisable at a minimum of twenty percent (20%) per year, unless
earlier terminated.

 

e.             Annual Limit on Incentive Options. To the extent required for “incentive stock
option” treatment under Section 422 of the Code, the aggregate Fair Market
Value (determined as of the date of grant) of the common stock, with respect to
which Incentive Options granted under this Plan become exercisable for the
first time by an Optionee during any calendar year, shall not exceed $100,000.

 

f.              Option Exercise Price. Each Option shall state the Option Exercise
Price. In the case of a Nonstatutory Option, the Option Exercise Price shall
not be less than eighty-five percent (85%) of the Fair Market Value on the date
of grant. In the case of an Incentive Option, the Option Exercise Price shall
not be less than the Fair Market Value on the date of grant. Notwithstanding
the foregoing, the Option Exercise Price of any Incentive Option or
Nonstatutory Option shall not be less than one hundred ten percent (110%) of
the Fair Market Value if the Optionee is a 10% Shareholder.

 

g.             Restricted Share Purchase Price. Each Restricted Stock Agreement shall state
the Restricted Share Purchase Price. The Restricted Share Purchase Price shall
not be less than eighty-five percent (85%) of the Fair Market Value, calculated
on the date of purchase of the Restricted Shares; provided, however, that the
Restricted Share Purchase Price shall not be less than one hundred ten percent
(110%) of the Fair Market Value if the Participant is a 10% Shareholder.

 

h.             Medium and Time of Payment; Notice. Upon the exercise of the Option or the
issuance of Restricted Shares, the Option Purchase Price and the Restricted
Share Purchase Price, as the case may be, shall be payable in full in United
States dollars or, if permitted by the Administrator, by the issuance of a
promissory note in a form acceptable to the Administrator.

 

In
the event the Company determines that it is required to withhold state or
Federal income tax as a result of the exercise of an Option or issuance of
Restricted Shares, as a condition to the exercise or issuance thereof, a
Participant must make arrangements satisfactory to the Company to enable it to
satisfy such withholding requirements before the Participant shall be permitted
to exercise the Option or purchase the Restricted Shares, as the case may be.

 

The
Optionee shall exercise an Option by completing and delivering to the Company,
concurrently with the payment of the Option Purchase Price in the manner
described above, an exercise notice in such other form as the Administrator
shall from time to time determine.

 

i.              Term and Non-Transferability of Options. Subject to the acceleration provisions set
forth in Section 9 or elsewhere in this Plan or in the applicable Option
Agreement, each Option shall state the time or times when all or part thereof

 

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becomes exercisable. No Option shall be exercisable
after the expiration of ten (10) years from the date it was granted; provided,
however, to the extent required by the Code, no Incentive Option granted to a
10% Shareholder shall be exercisable after the expiration of five (5) years
from the date it was granted. During the lifetime of the Optionee, the Option
shall be exercisable only by the Optionee or the Optionee’s guardian or legal
representative and shall not be assignable or transferable except by will or by
the laws of descent and distribution. Any other attempted alienation,
assignment, pledge, hypothecation, attachment, execution or similar process,
whether voluntary or involuntary, with respect to all or any part of any Option
or right thereunder, shall be null and void and, at the Company’s option, shall
cause all of the Optionee’s rights under the Option to terminate.

 

j.              Vesting and Non-Transferability of Restricted
Shares. Subject to the
acceleration provisions set forth in Section 9 or elsewhere in this Plan or in
the applicable Restricted Stock Agreement, each Restricted Stock Agreement
shall state the time or times of vesting of Restricted Shares purchased
thereunder. Until they become vested pursuant to the terms of the applicable
Restricted Stock Agreement, a Participant shall not sell, transfer (including a
transfer by operation of law), assign or pledge any or all of the Restricted
Shares, and any sale, transfer, assignment or pledge of the Restricted Shares
shall be void without the prior written consent of the Company, which may be
withheld in the Company’s sole and absolute discretion. The Company shall not
(A) transfer on its books any Restricted Shares which shall have been sold,
transferred, assigned or pledged in violation of any of the provisions of this
Agreement, or (B) treat as owner of such Restricted Shares or to accord the
right to vote as such owner any transferee to whom such Restricted Shares shall
have been so sold, transferred, assigned or pledged in violation of this
Agreement. No Restricted Stock Agreement shall be assignable or transferable by
the person receiving same except by will or the laws of descent and
distribution. Any other attempted alienation, assignment, pledge,
hypothecation, attachment, execution or similar process, whether voluntary or
involuntary, with respect to all or any rights thereunder, shall be null and
void and, at the Company’s option, shall cause all of the Participant’s rights
thereunder to terminate.

 

k.             Cessation of Employment (Except by Death,
Disability or Retirement).
If an Optionee ceases to be an Employee for any reason other than his or her
death, Disability or Retirement, such Optionee shall have the right, subject to
the restrictions referred to in Sections 7(d) and 7(i) above, to exercise its
Option at any time within three (3) months after cessation of employment, but,
except as otherwise provided in the applicable Option Agreement or in Sections
9 or 13 of this Plan, only to the extent that, at the date of cessation of
employment, the Optionee’s right to exercise such Option had accrued pursuant
to the terms of the applicable Option Agreement and/or this Plan and had not
previously been exercised.

 

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For
purposes of this Section 7(k), the employment relationship shall be treated as
continuing intact while the Participant is on military leave, sick leave or
other bona fide leave of absence (to be determined in the sole discretion of
the Administrator).

 

l.              Death of Optionee. If an Optionee dies while a Participant, or
after ceasing to be a Participant but during the period in which he or she
could have exercised the Option under this Section 7, and has not fully
exercised the Option, then the Option may be exercised in full, subject to the
restrictions referred to in Sections 7(d) and 7(i) above, at any time within
twelve (12) months after the Optionee’s death by the executor or administrator
of his or her estate or by any person or persons who have acquired the Option
directly from the Optionee by bequest or inheritance, but, except as otherwise
provided in the applicable Option Agreement, only to the extent that, at the
date of death, the Optionee’s right to exercise such Option had accrued and had
not been forfeited pursuant to the terms of the applicable Option Agreement and
had not previously been exercised.

 

m.            Disability of Optionee. If an Optionee ceases to be an Employee by
reason of Disability, such Optionee shall have the right, subject to the
restrictions referred to in Sections 7(d) and 7(i) above, to exercise the
Option at any time within twelve (12) months after such cessation of
employment, but, except as provided in the applicable Option Agreement, only to
the extent that, at the date of such cessation of employment, the Optionee’s
right to exercise such Option had accrued pursuant to the terms of the
applicable Option Agreement and had not previously been exercised.

 

n.             Retirement of Optionee. If an Optionee ceases to be an Employee by
reason of Retirement, such Optionee shall have the right, subject to the
restrictions referred to in Sections 7(d) and 7(i) above, to exercise the
Option at any time within three (3) months after such cessation of employment,
but only to the extent that, at the date of such cessation of employment, the
Optionee’s right to exercise such Option had accrued pursuant to the terms of
the applicable Option Agreement and had not previously been exercised.

 

o.             Rights as a Shareholder. No one shall have rights as a shareholder
of the Company with respect to any Shares or Restricted Shares until the date of
the issuance of a share certificate for such Shares or Restricted Shares. No
adjustment shall be made for distributions (ordinary or extraordinary, whether
in cash, securities or other property) or other rights for which the record
date is prior to the date such certificate is issued, except as expressly
provided in Section 9 hereof.

 

p.             Other Provisions. An Option Agreement or Restricted Stock
Agreement authorized under the Plan may contain such other provisions not
inconsistent with the terms of the Plan (including, without limitation,
restrictions upon the exercise of the Option and vesting of Restricted Shares)
as the Administrator shall deem advisable.

 

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q.             Certain Terminations of Employment, Hardship
and Approved Leaves of Absence.
Notwithstanding any other provision of this Plan to the contrary, in the event
of termination of employment by reason of death, disability, normal retirement,
early retirement with the consent of the Company, termination of employment to
enter public service with the consent of the Company, termination without cause
or leave of absence approved by the Company, or in the event of hardship or
other special circumstances, of an officer, manager or consultant of the
Company who holds an Option that is not immediately and fully exercisable or
unvested Restricted Shares, the Administrator may in its sole discretion take
any action that it deems to be equitable under the circumstances or in the best
interests of the Company, including without limitation, waiving or modifying
any limitation or requirement, including accelerating the right to exercise,
with respect to such Options, and accelerating the vesting with respect to such
Restricted Shares, issued under this Plan.

 

8.             TERM OF PLAN. The Plan shall be effective on
the Effective Date and, unless earlier terminated in accordance with the terms
hereof, shall terminate on November 14, 2012.

 

9.             EFFECT OF CERTAIN EVENTS.

 

a.             Reclassification of Shares. Except as set forth in Section 9(b) below,
in the event that the outstanding Shares are hereafter increased or decreased
or changed into or exchanged for a different number or kind of Shares or other
securities of the Company by reason of merger, consolidation or reorganization
in which the Company is the surviving entity or of a recapitalization, stock
split, stock combination, reclassification, reincorporation, stock dividend or
other change in the corporate structure of the Company (including, without
limitation, the incorporation of the Company), appropriate adjustments shall be
made by the Administrator in the aggregate number and kind of Shares subject to
this Plan, and the number and kind of Shares and the price per share subject to
outstanding Option and Restricted Stock Agreements in order to preserve, but
not to increase, the benefits to persons then holding the Options and/or
Restricted Shares.

 

b.             Corporate Transaction. In the event of a Corporate Transaction,
the following shall occur:

 

(i)            Assumed/Substituted Plan. In the event of a Corporate Transaction, the
surviving entity may elect to (x) continue the Plan, Options and unvested
Restricted Shares or (y) substitute for the Options and unvested Restricted
Shares new options and unvested securities, with appropriate adjustments as to
the number and purchase price of such securities in order to preserve, but not
to increase, the benefits to persons then holding the Options and/or Restricted
Shares; provided, however, that the accrual of exercisability and/or vesting,
as the case may be, shall continue in the manner set forth herein and/or in the
applicable original Option Agreement or Restricted Stock Agreement except to
the extent that such exercisability and/or vesting has been

 

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accelerated by the Administrator pursuant to this
Section 9(b). Notwithstanding the foregoing, the Administrator, in such
Administrator’s sole and absolute discretion, shall have the right to provide
that the exercisability of any or all Options or vesting of any or all
Restricted Shares shall be accelerated to accrue and/or vest upon the effective
date of such Corporate Transaction. In any event, any continued Plan, Options
and unvested Restricted Shares, or any substituted options or unvested securities,
shall provide for full acceleration of vesting in the manner set forth below in
Section 9(b)(iii) in the event that, on or after the occurrence of such
Corporate Transaction, the Company (or its successor) (A) terminates the
employment of the Participant without Cause, or (B) substantially and without
the Participant’s consent, reduces the base cash compensation received by the
Participant in the course of such employment (unless all similarly situated
employees are treated in the like manner).

 

(ii)           Plan Not Assumed or Substituted. If provision is not made in a Corporate
Transaction for the continuance of the Plan and the assumption of Options and
Restricted Shares, or the substitution for such Options and Restricted Shares
of new options and equity securities of a successor entity, then the Plan and
each Option outstanding under the Plan at the time of the Corporate Transaction
shall terminate and cease to be outstanding; provided, however, that
immediately prior to the consummation of such Corporate Transaction, the
exercisability of all Options and vesting of all Restricted Shares shall be
accelerated in full and each person holding Options and Restricted Shares shall
have the right to exercise all or any portion of their Options at such time
and/or shall hold entirely vested Restricted Shares. Upon the closing of such a
Corporate Transaction, any unexercised Options shall expire.

 

(iii)          Termination Without
Cause. Notwithstanding
anything to the contrary contained in this Plan and/or in the applicable Option
Agreement or Restricted Stock Agreement, in the event that a Participant is
terminated without Cause by the Employer on or after a Corporate Transaction,
the exercisability and/or vesting of all such Participant’s Options and/or
Restricted Shares shall be accelerated to accrue and/or vest, as applicable, in
full immediately upon such date of termination without any additional action
required on the part of the Administrator or the Employer.

 

c.             Adjustment Determination. To the extent that the foregoing
adjustments relate to securities of the Company, such adjustments shall be made
by the Administrator, whose determination shall be conclusive and binding on
all persons.

 

d.             Limitation on Rights. Except as expressly provided in this Section 9, the Participant shall have no rights to the payment
of any distribution in the form of Shares or any other increase or decrease in
the number of Shares of any class or by reason of any dissolution, liquidation,
merger or consolidation or spinoff of assets or stock of the Company. No
adjustment by reason of any of the foregoing shall be made with respect to the
number or Exercise Price of Shares subject to an Option Agreement or

 

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the number or Restricted Share Purchase Price of
Restricted Shares subject to a Restricted Stock Agreement. The grant of an
Option or issuance of Restricted Shares pursuant to the Plan shall not affect
in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure, to merge or consolidate or to dissolve, liquidate, sell or transfer
all or any part of its business or assets.

 

10.           SECURITIES LAW REQUIREMENTS.

 

a.             Legality of Issuance. No Shares or Restricted Shares shall be
issued under the Plan unless and until the Company has determined that:

 

(i)            it and the Participant, as the case may be, have taken all actions
required to register the offer and sale of the Shares or Restricted Shares
under the Securities Act, or to perfect an exemption from the registration
requirements thereof;

 

(ii)           any applicable listing requirement of any stock exchange on which the
Shares are listed has been satisfied; and

 

(iii)          any other applicable provision of state or Federal law has been satisfied.

 

b.             Restrictions on Transfer; Representations of
Participant; Legends.
Regardless of whether the offering and sale of Shares or Restricted Shares
under the Plan has been registered under the Securities Act or has been
registered or qualified under the securities laws of any state, the Company may
impose restrictions upon the sale, pledge or other transfer of such Shares or
Restricted Shares (including the placement of appropriate legends on
certificates) if, in the judgment of the Company and its counsel, such
restrictions are necessary or desirable in order to achieve compliance with the
provisions of the Securities Act, the securities laws of any state or any other
law. In the event that the issuance of Shares or Restricted Shares under the
Plan is not registered under the Securities Act but an exemption is available
which requires an investment representation or other representation, each
Participant shall be required to represent that such Shares or Restricted
Shares, as the case may be, are being acquired for investment, and not with a
view to the sale or distribution thereof, and to make such other
representations as are deemed necessary or appropriate by the Company and its
counsel. Certificates evidencing Shares or Restricted Shares granted or
acquired under the Plan pursuant to an unregistered transaction shall bear the
following restrictive legend and such other restrictive legends as are required
or deemed advisable under the provisions of any applicable law or agreement:

 

THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), OR REGISTERED OR QUALIFIED UNDER ANY STATE

 

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SECURITIES
LAW. ACCORDINGLY,
THESE SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, OR OTHERWISE
TRANSFERRED UNLESS THEY HAVE FIRST BEEN REGISTERED UNDER THE SECURITIES ACT AND
REGISTERED OR QUALIFIED UNDER ANY APPLICABLE STATE SECURITIES LAW OR UNLESS THE
ISSUER, AFTER CONSULTATION WITH ITS COUNSEL, APPROVES SUCH TRANSACTION ON THE
GROUNDS THAT REGISTRATION UNDER THE SECURITIES ACT AND REGISTRATION OR
QUALIFICATION UNDER ANY APPLICABLE STATE SECURITIES LAW IS NOT REQUIRED. THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF THE COMPANY’S 2002 STOCK OPTION AND RESTRICTED STOCK PURCHASE
PLAN, DATED MARCH 9, 2002, COPIES OF WHICH ARE ON FILE WITH THE COMPANY.

 

c.             Interpretation. Any determination by the Company and its counsel in connection with any of the matters set forth in
this Section 10 shall be conclusive and binding on all persons.

 

d.             Registration or Qualification of Securities. The Company may, but shall not be obligated to, register or qualify
the sale of Shares or Restricted Shares under the Securities Act or any other
applicable law. The Company shall not be obligated to take any affirmative
action in order to cause the issuance of Shares or Restricted Shares under the
Plan to comply with any law.

 

e.             Exchange of Certificates. If, in the opinion of the Company and its
counsel, any legend placed on a certificate representing Shares or Restricted
Shares issued under the Plan is no longer required, the holder of such
certificate shall be entitled to exchange such certificate for a certificate
representing the same number of Shares or Restricted Shares but without such
legend.

 

11.           APPROVAL OF SHAREHOLDERS. The Plan must be approved on or before the
one year anniversary of the Effective Date by the affirmative vote of the
holders of a majority of the total combined voting power of all classes of
stock of the Company. If such shareholder approval is not so obtained, (i) any
Option exercised and any Restricted Shares purchased before such shareholder
approval is obtained automatically shall be rescinded, and (ii) the Plan and
all Options granted thereunder automatically shall be terminated.

 

12.           FINANCIAL STATEMENTS. The Company shall provide Optionees and holders
of Restricted Shares with financial statements, which may or may not be
audited, at least annually.

 

13.           REPURCHASE OPTION.

 

a.             If the Participant’s service with the Company
ceases due to a voluntary termination by Participant or termination by the
Company for Cause, the

 

13

 

Company shall have the
unconditional right and option (the “Company Repurchase Option”) to repurchase
all or any portion of the Shares and/or Restricted Shares acquired by the
Participant under the Plan at a purchase price equal to (i) with respect to all
Shares acquired upon the exercise of the Options and all vested Restricted
Shares, the higher of (a) the purchase price paid by the Participant for such
Shares or Restricted Shares or (b) the Fair Market Value, as of the date of
such determination, of the Shares or Restricted shares, as the case may be, and
(ii) with respect to all unvested Restricted Shares, at the applicable
Restricted Shares Purchase Price (each, the “Repurchase Price”), which
Repurchase Price shall be binding upon the Participant. The Company Repurchase
Option must be exercised, if at all, (x) with respect to all Shares acquired on
or before the date of such cessation upon the exercise of the Options and all
Restricted Shares, within sixty (60) days after the date of such termination,
and (y) with respect to all Shares acquired after the date of such cessation
upon the exercise of the Options, within sixty (60) days after such exercise.

 

b.             If the Company waives or fails to exercise
the Company Repurchase Option with respect to any of the Shares and/or
Restricted Shares acquired under the Plan within the period specified in
subsection (a) of this Section 13, the Company Repurchase Option shall expire
with respect to such Shares and/or Restricted Shares.

 

c.             The Company Repurchase Option shall be exercised
by giving written notice signed by an officer of the Company to the Participant
in accordance with the provisions for giving notices in the applicable Option
Agreement or Restricted Stock Agreement. Amounts due to the Participant from
the Company as a result of the exercise of the Company Repurchase Option shall
be payable, in the discretion of the Company, by cancellation of all or a
portion of any outstanding purchase money indebtedness of the Participant to
the Company or by check.

 

d.             Nothing in this Section 13 or anything else
in the Plan shall affect in any manner whatsoever the right or power of the
Company (or a parent or subsidiary of the Company), which the Participant
acknowledges is absolute and unconditional, to terminate the Participant’s service
with the Company for any reason or no reason, with or without cause or prior
notice.

 

e.             Any other provision of this Section 13
notwithstanding, in the event that the Shares and/or Restricted Shares shall
become listed on an established stock exchange or quoted on NASDAQ, the Company
Repurchase Option shall terminate and no longer be in effect.

 

f.              Notwithstanding the foregoing and provided
that the Participant has remained in the Company’s service, (i) the Repurchase
Option shall immediately terminate, and the Option shall accelerate and be
immediately exercisable in full and the Restricted Shares shall immediately
vest in full, immediately prior to the closing of a Corporate Transaction,
unless (i) surviving entity desires that the Participant

 

14

 

remain in the surviving
entity’s service after the Corporate Transaction and (ii) the surviving entity
continues the Plan and the Participant’s vesting and/or exercisability schedule
thereunder or exchanges the Participant’s Options and unvested Restricted
Shares for comparable options or unvested equity securities in the surviving
entity’s stock option/restricted stock plan. To the extent the Repurchase
Option remains in effect following a Corporate Transaction, such right shall
apply to any new securities or other property (including any cash payments)
received in exchange for the Shares in consummation of the Corporate
Transaction. Appropriate adjustments shall be made to the price per share
payable upon exercise of the Repurchase Option to reflect the effect of the
Corporate Transaction upon the Company’s capital structure; provided, however,
that the aggregate purchase price shall remain the same.

 

14.           AMENDMENT AND TERMINATION OF THE PLAN. The Administrator may alter,
amend, suspend or terminate the Plan in such respects as it deems advisable;
provided, however, that no such alteration, amendment, suspension, or
termination shall be made without the consent of the Participant if it
substantially impairs any rights or obligations under any applicable Option
Agreement or Restricted Stock Agreement.

 

15.           GOVERNING LAW. This Plan, the Option Agreements and the Restricted
Stock Agreements shall be governed by, and enforced and construed in accordance
with the internal substantive laws (and not the laws of conflicts of laws) of
the State of California.

 

	
   

  	
  SNAP APPLIANCE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric Kelly

  	
   

  
	
   

  	
  Name: Eric Kelly

  
	
   

  	
  Title: President & CEO

  

 

15Exhibit 10.1

 

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
June 17, 2004 (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 gene variations on weight management conditions, and
determining, through genetic profiling, individuals who may benefit from
specific interventions to promote health;

 

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

 

WHEREAS, IG is willing to perform the Research Program 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 [  *  
*   *   *  ]
to monitor an individual’s response to the use of a Dermagenomics Consumable or
a Nutrigenomics 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                                                 “Dermagenomics Consumable” means any
nutritional supplement or skin care product or topical delivery system which
would be [        *        
*         *         *      
*              ] designed to
produce a positive health benefit with respect to weight management (i) the
manufacture, use or sale of which would, absent the license or ownership rights
granted to Access hereunder 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 Dermagenomics Test.

 

2

 

1.9                                                 “Dermagenomics Test” means any genomic
test used to determine appropriate recipients of a Dermagenomics Consumable (i)
the manufacture, use or sale of which would, absent the license or ownership
rights granted to Access hereunder, infringe any claim included in the Program
Patent Rights or the IG Patent Rights, or (ii) which was developed, modified or
improved hereunder.

 

1.10                                           “Dermagenomics Product” means a
Dermagenomics Consumable or a Dermagenomics Test.

 

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

 

1.12                                           “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.

 

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

 

1.14                                           “Licensed Product” means any
Dermagenomics Product or Nutrigenomics Product.

 

1.15                                           “Nutrigenomics Consumable” means any
nutritional supplement, nutraceutical compound or delivery system for a
nutritional supplement or nutraceutical compound that would be [         *         *         *         *         *         ] designed to produce a positive
health benefit with respect to weight management (i) the manufacture, use or
sale of which would, absent the license or ownership rights granted to Access
hereunder, 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
Nutrigenomics Test.

 

1.16                                           “Nutrigenomics Test” means any genomic
test used to determine appropriate recipients of a Nutrigenomics Consumable (i)
the manufacture, use or sale of which would, absent the license or ownership
rights granted to Access hereunder, infringe any claim included in the Program
Patent Rights or the IG Patent Rights, or (ii) which was developed, modified or
improved hereunder.

 

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

 

1.18                                           “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
patents granted thereon, and all reissues, reexaminations, extensions,
confirmations, revalidations, registrations and patents of addition thereof.

 

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

 

3

 

1.20                                           “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.

 

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

 

1.22                                           “Proprietary Materials” means any
tangible chemical, biological or physical research materials, including but not
limited to gene sequences, gene fragment sequences, primers, probes, DNA, RNA,
cDNA 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.

 

1.23                                           “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.

 

1.24                                           “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 Nutrigenomics Products
and Dermagenomics Products.

 

1.25                                           “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.

 

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

 

1.27                                           “Territory” means worldwide.

 

1.28                                           “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.  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 proposed 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 5.2 hereof.

 

4

 

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 supplying Party, except as expressly permitted hereby; (d) the supplying
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 IG the
following amounts:

 

2.3.1. 
Installment Payments Following Effective Date.  $1,080,000 shall be payable in six monthly
installments of $180,000 beginning July 1, 2004 and on the first business
day of each month thereafter through December 2004; and

 

2.3.2   Installment Payments Following
Second Milestone.  Eight Hundred Twenty
Thousand Dollars ($820,000.00) payable in five (5) monthly installments of One
Hundred Thirty Six Thousand, Six Hundred Sixty Seven Dollars ($136,667.00)
beginning January 1, 2005 and on the first business day of each month
thereafter through May 2005, and one (1) payment of One Hundred Thirty Six
Thousand, Six Hundred Sixty Five Dollars ($136,665.00) on June 1, 2005, if
Access determines, in its sole discretion, that it has a reasonable likelihood
of commercializing a weight management Nutrigenomics Consumable and/or a weight
management Dermagenomics Consumable (the “Second Milestone”).

 

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 its obligations
under 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 its obligations under 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. 
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.

 

4.2                                                 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

 

6

 

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                                                 Functions and Powers of the Joint Science Committee.  The Joint Science Committee (“JSC”)
established by IG and Access pursuant to the Research Agreement dated
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 (2)
representatives of IG and two (2) representatives of Access.  These representatives are h as follows:

 

IG Representatives:

 

Kenneth Kornman, DDS, Ph.D.

Philip R. Reilly, MD, JD

 

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.

 

7

 

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 Nutrigenomics Consumables and Dermagenomics
Consumables, with full rights to license or sublicense.

 

6.1.2.           IG Intellectual Property Rights.  Subject to Access’s rights as described in
Section 3 of this 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
Nutrigenomics Tests and Dermagenomics 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 Related Companies (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.

 

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

 

6.2.1              Access
shall bear the cost associated with the filing, prosecution, issuance and maintenance
of all Program Patent Rights relating to Nutrigenomics Consumables and
Dermagenomics 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              IG
shall bear the cost associated with the filing, prosecution, issuance and
maintenance of all Program Patent Rights relating to Nutrigenomics Tests and
Dermagenomics 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

 

8

 

having
the right to select the countries in which or treaties under which the patent
applications will be filed.

 

6.2.3              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.

 

 

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 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 may terminate this
Agreement effective immediately upon written notice to such Party.

 

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

 

9

 

terms of this
Agreement, including without limitation, the rights and obligations of the
Parties provided in Sections 4, 6, 7.3, 8.2, 8.3 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 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

 

10

 

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

  Waltham, MA 02452

  Attention:  Chief Executive Officer

  	
   

  	
  7575 Fulton St. East

  Ada, MI  49355-0001

  Attention:  George Calvert

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Mintz, Levin, Cohn, Ferris,

    Glovsky and Popeo, P.C.

  One Financial Center

  Boston, MA 02111

  Attention:  Jeffrey M. Wiesen, Esquire

  	
   

  	
  7575 Fulton St. East.

  Ada, MI  49355-0001

  Attention:  Thomas R. Curran

  Chief Legal Officer

  

 

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.

 

11

 

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 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 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.  If any provision of this Agreement is or
becomes

 

12

 

invalid or is
ruled invalid by any court of competent jurisdiction or is deemed
unenforceable, it is the intention of the Parties that the remainder of the
Agreement shall not be affected.

 

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

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ACCESS BUSINESS GROUP LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ George D. Calvert

  	
   

  
	
   

  	
   

  	
  George Calvert

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President - Research & Development

  

 

13

 

APPENDIX A

 

OUTLINE OF RESEARCH AGREEMENT DELIVERABLES

 

 

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

 

14

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