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DISTRIBUTION AGREEMENT

Distribution Agreement

DISTRIBUTION AGREEMENT | Document Parties: INTERLEUKIN GENETICS INC | ACCESS BUSINESS GROUP INTERNATIONAL LLC You are currently viewing:
This Distribution Agreement involves

INTERLEUKIN GENETICS INC | ACCESS BUSINESS GROUP INTERNATIONAL LLC

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Title: DISTRIBUTION AGREEMENT
Governing Law: Michigan     Date: 3/29/2004
Industry: Healthcare Facilities     Sector: Healthcare

DISTRIBUTION AGREEMENT, Parties: interleukin genetics inc , access business group international llc
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EXHIBIT 10.45

 

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

 

 

DISTRIBUTION AGREEMENT

 

THIS DISTRIBUTION AGREEMENT (this “Agreement”) is made as of February 26, 2004 (the “Effective Date”), between ACCESS BUSINESS GROUP INTERNATIONAL LLC (“Access”), a Michigan limited liability company with its principal place of business at 7575 East Fulton Road, Ada, Michigan 49355, United States; and INTERLEUKIN GENETICS INC. (“Seller”) a Delaware corporation with its principal place of business at 135 Beaver Street, Waltham, Massachusetts 02452.

 

WHEREAS, Access and Seller have entered into an Exclusive License Agreement dated as of March 5, 2003 (the “License Agreement”) pursuant to which Seller has licensed certain technology to Access for use within certain fields including, without limitation the Nutrigenomics Field (as defined in the License Agreement);

 

WHEREAS, the parties wish to enter into this agreement to describe the terms pursuant to which Seller will provide Genetic Tests (as defined below) to Access for resale to third parties; and

 

WHEREAS, Quixtar Inc. (“Quixtar”), an affiliate of Access, shall sell Genetic Test Kits (as defined below) to its Independent Business Owners (“IBOs”).

 

The parties agree as follows:

 

1.                                        Purchase .  Subject to the terms of this Agreement, during the Term (as defined below), Access shall purchase from Seller, and Seller shall provide to Access, *** Genetic Tests.  Such purchases shall be made at any time during the period commencing on the Effective Date and continuing until the first anniversary of the date on which Seller first obtains the Required Certifications (the “Term”).  Except as otherwise provided in this Agreement, such purchases shall be made via purchase orders under Access’ standard terms and conditions of purchase, a copy of which is attached hereto as Exhibit A.  If there is any conflict between such terms and conditions and of this Agreement, then the terms of this Agreement shall prevail.  As used in this Agreement, (a) a “Genetic Test” means a genomic test used to determine appropriate recipients of a Nutrigenomics Consumable (as such term is defined in the License Agreement) which shall include a report prepared by Seller in accordance with CLIA requirements (a “Report”) a sample copy of which is attached hereto as Exhibit B and (b) a “Genetic Test Kit” means the product to be provided by Quixtar to IBOs that is used for the collection of genetic materials from end-users.  During the Term of this Agreement, Access will provide Seller with a rolling non-binding forecast of projected purchases of Genetic Tests for each ensuing 12-month period, which forecast shall be updated each month during the Term of this Agreement. In connection therewith (a) Access shall use reasonable efforts to distribute its purchase of Genetic Tests from Seller as evenly as possible over the Term and (b) Seller shall not be obligated to provide more Genetic Tests in any single calendar month than it can reasonably perform, provided, however, that Seller agrees that it has the capacity to provide  *** Genetic Tests per month.

 

2.                                        Conditions to Purchase .  The obligations of Access under Section 1 shall be subject to the receipt by Access of evidence to its reasonable satisfaction that (a) the Genetic Tests will be performed in a clinical laboratory that has obtained all certifications required (the “Required Certifications”) under the Clinical Laboratory Improvement Act of 1988, as amended

(“CLIA”), (b)

 



 

Seller, such laboratory, and the Genetic Tests to be provided by Seller in such laboratory are each in full compliance with all applicable industry standards and applicable laws, regulations, and standards and (c) the distribution of Genetic Tests by Access or its affiliates shall not, in Access’ reasonable determination, subject Access to a material risk with respect to product liability.  Access agrees and acknowledges that, at certain volumes, Seller may subcontract the Genetic Tests to other laboratories (“Reference Labs”), provided that any such Reference Lab meet the Required Certifications under CLIA, and Seller provides such documentation to Access at least thirty (30) days prior to the effectiveness of any subcontract.

 

3.                                        Payment Terms .  The price for each Genetic Test is ***.  Such price is inclusive of the testing services and analysis contemplated by the Genetic Test, and the Reports to end-users without further charge, but exclusive of value-added, sales or other applicable taxes, transportation costs and substantial modifications to the Reports. Access shall pay for development costs in the event of substantial modifications to the Report, as requested by Access. If substantial modifications to the Reports are required pursuant to applicable law, Seller shall bear the cost thereof. Access shall provide written notice to Seller within ten (10) days of the sale by Quixtar of each Genetic Test Kit to an IBO.  Seller shall invoice Access within 30 days of its delivery of a Report to the end user or other party, pursuant to applicable law.  Payment is due within thirty (30) days of receipt of such invoice.  Overdue payments shall bear interest at the rate of one percent (1%) per month until paid in full.

 

4.                                        Warranties .  Seller represents and warrants to Access that (a) except for sales of Genetic Tests to Access prior to the receipt by Seller of the Required Certifications as described in Section 1 of this Agreement, prior to the sale of any Genetic Test under this Agreement, it shall have necessary qualifications, expertise, authority, registrations, licenses, and permits to enable it to perform its obligations under and contemplated by this Agreement; (b) the services and reports included in connection with each Genetic Test shall be performed in a professional manner in accordance with industry standards, free from material faults and defects; (c) the Genetic Tests shall conform in all material respects to all  specifications and performance criteria standards or other requirements that are agreed upon by Seller and Access and included to in the packaging of the Genetic Test; (d) except for sales of Genetic Test prior to the receipt by Seller of the Required Certifications as described in Section 1 of this Agreement, the Genetic Tests and the services associated therewith shall comply with all applicable federal, state and local laws and regulations; (e) to the knowledge of Seller, (i) Seller is the owner of all right, title and interest in and to, or otherwise holds a license under, the intellectual property associated with the  Genetic Tests and (ii) its performance of the Genetic Tests contemplated by this Agreement does not infringe the patent rights of any third party; and (f) Seller shall supervise the Reference Labs to the extent necessary to provide quality assurance of the Genetic Tests  at the same level as provided at Seller’s own facility.  Seller has and follows, and will continue to have and follow, adequate quality and security procedures that will assure that the Genetic Tests will comply with the foregoing representations and warranties.  Upon written request, Seller shall give Access certificates of compliance with respect to applicable laws and regulations.  Access’ approval of any specification or other standards shall not relieve Seller of any of its warranties under this Section.  Seller’s warranties extend to future performance of the services and survive inspection, tests, acceptance and payment.  Seller shall extend to all end-users to which it provides Genetic Tests the warranty set forth on Schedule A attached hereto and incorporated herein by reference (the “End-User Warranty”).

 

5.                                        Term; Termination .   This Agreement shall commence on the Effective Date and shall continue until expiration of the Term.  Either party may terminate this Agreement by written notice to the other party if the other party is in material default in the performance of any of its obligations hereunder  and fails to remedy such default within 30 days after receiving written notice of such default.  In addition, either party may immediately terminate this Agreement by written notice to the other:  (a) if the other party has ceased its business activities or has otherwise begun winding up its business affairs; (b) if bankruptcy, reorganization, arrangement or insolvency proceedings, or other proceedings for relief under

 

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any bankruptcy or similar law or laws for the relief of debtors, are instituted by or against the other party and are consented to or are not dismissed within 60 days after such institution; (c) if a custodian, liquidator, receiver or trustee is appointed for the other party or the major part of its property and is not discharged within 60 days after such appointment; (d) if the other party becomes insolvent or bankrupt, is generally not paying its debts as they become due, makes any assignment for the benefit of its creditors or makes any comparable arrangement with its creditors; (e) upon the occurrence of any Force Majeure Event (defined below) that delays performance of the other party of this Agreement for more than 30 days; or (f) if the conditions set forth in Section 2 are not satisfied in the first quarter of 2005.  The termination of this Agreement shall not affect any of the provisions of this Agreement that by their nature are intended to continue after termination, including but not limited to Section 4 (Warranties), this Section, Section 7 (Indemnification), and Section 17 (Confidentiality).

 

6.                                        Exclusivity .  Seller agrees that Access shall be the exclusive worldwide distributor of the Genetic Tests for use in the Nutrigenomics Field (as defined in the License Agreement).

 

7.                                        Indemnification.

 

(a)                                   Indemnification by Seller.   Seller shall defend, indemnify and hold Access (including its affiliates members, managers, directors, officers, employees, agents, IBOs, customers, and end-users) harmless from and against any damages, claims, costs and expenses (including actual attorneys’ fees and recall costs and expenses) arising from or relating to (i) any breach or misrepresentation by Seller under this Agreement and (ii) any claim by an end-user of the Genetic Test.

 

(b)                                  Indemnification by Access.   Access shall defend, indemnify and hold Seller (including its members, managers, directors, officers, employees, agents, customers, and end-users) harmless from and against any damages, claims, costs and expenses (including actual attorneys’ fees and recall costs and expenses) arising from or relating to (a) any breach or misrepresentation by Access under this Agreement, (b) the manufacture, use or sale by Access, or the use by any end-user, of any Genetic Test Kits.

 

(c)                                   Procedures.   If any action, suit, proceeding or claim shall be commenced in respect of which a party may demand indemnification, the indemnified party shall notify the indemnifying party to that effect with reasonable promptness.  The indemnifying party shall have the opportunity to defend against such action, suit, proceeding or claim.  The indemnified party shall have the right to employ its own counsel and participate in the defense of any matter at its own expense.  If the indemnifying party fails to defend as required hereunder, the indemnified party may defend itself at the indemnifying party’s expense.  Each party shall render to the other assistance as may be reasonably required in connection with the defense of any such matter.

 

(d)                                  Product Recall.   If the Genetic Tests Kits constitute a health or safety hazard or risk, or if the Genetic Test Kits or their distribution becomes the subject of heightened governmental regulation, then Access shall have the right to recall such Genetic Test Kits at its sole expense; provided, that, if the reason for the recall is the Genetic Test, then Seller shall pay the reasonable costs of such recall.

 

8.                                        Insurance .  Seller shall maintain insurance coverage that will fully protect both Seller and Access from any and all claims and liabilities of any kind or nature for property damage, personal injury, death and economic damage, to any person, that arises from the performance of the Genetic Tests or any activities connected with the Genetic Tests, including the following:

 

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Product Liability

 

U.S.

$  1,000,000 (per occurrence)

 

General Liability

 

U.S.

$  1,000,000 (per occurrence)

 

Workers’ Compensation

 

Statutorily Required Coverage

 

Excess Liability (Umbrella Form)

 

U.S.

$  3,000,000

 

 

Seller further agrees to furnish to Access, upon written request on and after the Effective Date, insurance certificates which will confirm its insurance coverage in the amounts referenced above, to arrange for its liability insurance carriers to include Access as an additional insured under its standard vendor’s product liability insurance policy and to arrange for its insurance carriers to include as part of all such certificates the requirement to furnish 30 days advance written notice to Access of any material change in, or cancellation or termination of, such insurance policies.

 

9.                                        Force Majeure.   Subject to the other provisions of this Agreement, in the event that either party is unable to perform any of its obligations under this Agreement because of natural disaster, actions or decrees of governmental bodies that would require licensure, certifications, or similar qualifications, or events or causes beyond the control of the affected party (a “Force Majeure Event”) all obligations of the affected party under this Agreement shall be immediately suspended, provided that such affected party promptly gives the other party notice of the occurrence of the Force Majeure Event.  The affected party shall use commercially reasonable efforts to eliminate the obstacles preventing its performance and to resume its performance under the Agreement as soon as possible.

 

10.                                  Assignment; No Third-Party Beneficiaries.   Neither party shall assign, transfer or subcontract this Agreement or any part of this Agreement, directly or indirectly, without the other party’s prior written consent; provided, however, that either party may, without the written consent of the other, assign this Agreement and its rights and delegate its obligations hereunder to its affiliates, or in connection with the transfer or sale of all or substantially all of such party’s assets or business related to this Agreement, or in the event of its merger, consolidation, change in control or similar transaction.  This Agreement shall be binding upon, inure to the benefit of, and be enforceable by and against the respective successors and permitted assigns of each of the parties to this Agreement.  Nothing expressed or implied in this Agreement will be construed to give any person or entity other than the parties to this Agreement any legal or equitable right, remedy, claim under or with respect to this Agreement or any provision of this Agreement.

 

11.                                  Notices.   All notices and other communications under this Agreement shall be in the English language, in writing and shall be deemed to have been duly given when either personally delivered, or sent by facsimile or sent by express delivery service with charges prepaid and receipt requested, or, if those services are not available, when mailed (postage prepaid) by certified mail with return receipt requested, to the parties at their respective addresses set forth below.  Any party may change its address by written notice to the other party.

 

Interleukin Genetics Inc.

135 Beaver Street – 2 nd Floor

Waltham, Massachusetts 02452

Attn:  Fenel Eloi

 

Access Business Group International LLC

7575 Fulton Street East

Ada, Michigan 49355

Attn:  Director-Strategic Procurement

 

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12.                                  Entire Agreement; Amendments .  This Agreement contains the entire agreement of the parties (except as it may be supplemented by a purchase order) and replaces all prior agreements and understandings.  This Agreement may be amended, modified, superseded, or canceled and any of the terms or conditions in this Agreement may be waived, only by a wri


 
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