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
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U.S.
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$ 1,000,000 (per
occurrence)
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General Liability
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U.S.
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$ 1,000,000 (per
occurrence)
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Workers’ Compensation
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Statutorily Required Coverage
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Excess Liability (Umbrella Form)
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U.S.
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$ 3,000,000
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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.
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Interleukin Genetics Inc.
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135 Beaver Street – 2 nd
Floor
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Waltham, Massachusetts 02452
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Attn: Fenel Eloi
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Access Business Group International
LLC
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7575 Fulton Street East
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Ada, Michigan 49355
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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