-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SD6XqebsHrQIejWuxb7xFuh6MjikXJWM+cDhmA3bzoXQGuPj5fnq9bMaiiCHkutV lLoC6yn7m0Vus/yrD/EdDw== 0000950135-03-001706.txt : 20030311 0000950135-03-001706.hdr.sgml : 20030311 20030311170830 ACCESSION NUMBER: 0000950135-03-001706 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030305 ITEM INFORMATION: Changes in control of registrant ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030311 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERLEUKIN GENETICS INC CENTRAL INDEX KEY: 0001037649 STANDARD INDUSTRIAL CLASSIFICATION: IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES [2835] IRS NUMBER: 943123681 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-23413 FILM NUMBER: 03599815 BUSINESS ADDRESS: STREET 1: 135 BEAVER ST CITY: WATHAM STATE: MA ZIP: 02452 BUSINESS PHONE: 1-781-398-0700 MAIL ADDRESS: STREET 1: 135 BEAVER ST CITY: WATHAM STATE: MA ZIP: 02452 FORMER COMPANY: FORMER CONFORMED NAME: MEDICAL SCIENCE SYSTEMS INC DATE OF NAME CHANGE: 19971003 8-K/A 1 b45847kae8vkza.txt INTERLEUKIN GENETICS, INC. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------- Amendment No. 1 on FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 -------------- Date of Report (Date of earliest event reported): MARCH 5, 2003 INTERLEUKIN GENETICS, INC. -------------------------- (Exact name of registrant as specified in its charter) DELAWARE 000-23413 94-3123681 - --------------- ------------ ------------------- (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) 94-3123681 135 BEAVER STREET, WALTHAM, MA 02452 ------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (781) 398-0700 Not Applicable ------------------------------------------------------------- (Former name or former address, if changed since last report) 1 The purpose of this amendment to our Current Report on Form 8-K filed with the Securities Exchange Commission on March 5, 2003, is (i) to change the number of shares of Common Stock into which the Amended and Restated Notes are convertible, as reported under the captions "General" and "Refinancing of Prior Debt/Promissory Notes," from 4,169,652 shares to 4,075,811 shares; and (ii) to correct the schedule to Exhibit 10.13, which omitted one of the Director appointees who signed a Director Indemnity Agreement with us. ITEM 1. CHANGES IN CONTROL OF REGISTRANT. We have entered into financing and related transactions that constitute a change of control. The following summaries of our Series A Preferred Stock and agreements that we have entered into are summaries and are qualified in their entirety by references to the agreements and Certificate of Designations of the Series A Preferred Stock that we are filing as exhibits with this Current Report on Form 8-K and are incorporated herein by reference. You are urged to review the full text of those documents that define the rights of the new investors. GENERAL In a private placement on March 5, 2003, we entered into a Stock Purchase Agreement (the "Purchase Agreement") with Pyxis Innovations Inc., a Delaware corporation and a subsidiary of Alticor Inc. ("Pyxis"), pursuant to which Pyxis purchased from us 5,000,000 newly-issued shares of our Series A Preferred Stock, par value $.001 per share (the "Series A Preferred Stock"), for $7,000,000 in cash and $2,000,000 in cash to be paid, if at all, upon our reaching a milestone pursuant to the terms of the Purchase Agreement. The offering was made to Pyxis by way of a private placement exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"). We have been advised by Pyxis that the source of the cash paid and to be paid was and will be capital contributions from its sole shareholder, Alticor Inc. The Series A Preferred Stock issued in the private placement is initially convertible into 28,157,683 shares of our Common Stock reflecting a conversion price of $.2486 per share (or $.3196 per share if the milestone payment is received), subject to weighted average antidilution adjustments. Assuming the conversion of all shares of Series A Preferred Stock, such shares would represent 54.9% of the outstanding shares of our Common Stock. Pursuant to the terms of the Purchase Agreement, Pyxis has agreed to refinance certain of our indebtedness in the form of previously issued promissory notes that are held by Pyxis and certain individuals. Convertible promissory notes in the original aggregate principal amount of $2,000,000 issued to Pyxis are convertible into shares of Common Stock at any time at a conversion price equal to two times the conversion price of the Series A Preferred Stock in effect at that time. As of March 5, 2003, the principal and accrued interest under these convertible promissory notes was convertible into 4,075,811 shares of Common Stock. Concurrent with the closing of the Purchase Agreement, we entered into a Research Agreement with an affiliate of Pyxis, governing the terms of developing and validating nutrigenomic and dermagenomic tests and products. We also entered into a License Agreement with another affiliate of Pyxis, granting an exclusive license of all of our current and future intellectual property, limited to the field of nutrigenomics and dermagenomics. Pursuant to the terms of the Purchase Agreement, we agreed to reduce the number of directors on our Board of Directors from six to five and granted Pyxis, as the sole holder of shares of our Series A Preferred Stock, the right to appoint four out of five members of our new Board of Directors. The election of these Series A Directors is intended to be effective ten (10) 2 days after the date on which an Information Statement is filed with the SEC and mailed to all holders of record of our Common Stock as required by Rule 14f-1 of the Exchange Act. We will file and mail the Information Statement as soon as reasonably practicable from the date hereof. SERIES A PREFERRED STOCK The Series A Preferred Stock was issued in return for a capital contribution of $7,000,000 and is convertible into shares of Common Stock at a initial conversion price of $.2486 per share. If we achieve the milestone of entering into a genetics testing agreement with one or more customers with a projected internal rate of return of at least twenty percent (20%) and a payback period of three (3) years or less, Pyxis will make an additional capital contribution of $2,000,000. This subsequent milestone payment will increase the effective conversion price per Common Stock equivalent share to $.3196 per share. The Series A Preferred Stock accrues dividends at the rate of 8% of the original purchase price per year, payable only when, as and if declared by the Board of Directors and are non-cumulative. If we declare a distribution, with certain exceptions, payable in securities of other persons, evidences of indebtedness issued by us or other persons, assets (excluding cash dividends) or options or rights to purchase any such securities or evidences of indebtedness, then, in each such case the holders of the Series A Preferred Stock shall be entitled to a proportionate share of any such distribution as though the holders of the Series A Preferred Stock were the holders of the number of shares of our Common Stock into which their respective shares of Series A Preferred Stock are convertible as of the record date fixed for the determination of the holders of our Common Stock entitled to receive such distribution. In the event of any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the holders of the Series A Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of our assets or surplus funds to the holders of our Common Stock by reason of their ownership thereof, the amount of two times the then-effective purchase price per share, as adjusted for any stock dividends, combinations or splits with respect to such shares, plus all declared but unpaid dividends on such share for each share of Series A Preferred Stock then held by them. After receiving this amount, the holders of the Series A Preferred Stock shall participate on an as-converted basis with the holders of Common Stock in any of our remaining assets. Each share of Series A Preferred Stock is convertible at any time at the option of the holder into a number of shares of our Common Stock determined by dividing the then-effective purchase price (originally $1.40, or $1.80 if the milestone payment is received, and subject to further adjustment) by the conversion price in effect on the date the certificate is surrendered for conversion. The initial conversion price is $.2486 per share (or $.3196 per share if the milestone payment is received), subject to weighted average antidilution adjustment. Pyxis has agreed that it will not sell or otherwise transfer its Series A Preferred Stock (or shares of our Common Stock converted therefrom) to any unrelated third-party until after March 5, 2005. 3 Each holder of Series A Preferred Stock is entitled to vote its shares of Series A Preferred Stock on an as-converted basis with the holders of Common Stock as a single class on all matters submitted to a vote of the stockholders, except as otherwise required by applicable law or the Certificate of Designations. This means that each share of Series A Preferred Stock will be entitled to a number of votes equal to the number of shares of Common Stock into which it is convertible on the applicable record date. We have reserved all authorized but otherwise unissued or unreserved shares of Common Stock for the conversion of the Series A Preferred Stock. We currently do not have sufficient shares of Common Stock authorized under our Certificate of Incorporation to cover all shares of Common Stock that we may be required to issue upon conversion of the Series A Preferred Stock or any of the shares that we may be required to issue upon the conversion of the promissory notes described below. We have agreed to take all such corporate actions as may be necessary to increase the number of authorized but unissued shares of Common Stock, including engaging in our best efforts to obtain stockholder approval of an amendment of our certificate of incorporation. REFINANCING OF PRIOR DEBTS/PROMISSORY NOTES Pursuant to the terms of the Purchase Agreement, Pyxis has agreed to refinance certain of our indebtedness held by Pyxis and others in the form of previously issued promissory notes. Upon the closing of the Purchase Agreement, we amended and restated promissory notes previously issued to Pyxis, in aggregate principal amount of $2,000,000, with a variable interest rate equal to one percent above the "prime rate," payable on a quarterly basis in cash. These amended and restated notes have a maturity date of December 31, 2007 and are convertible at the option of Pyxis into shares of our Common Stock at a conversion price of two times the then applicable conversion price of the Series A Preferred Stock. As of March 5, 2003, outstanding principal and interest under these notes would be convertible into 4,075,811 shares of Common Stock. As previously reported, the terms of the original notes include that they are secured by all of our intellectual property except intellectual property relating to periodontal disease and sepsis. In connection with issuing the amended and restated notes, we further amended the Note Purchase Agreement and the Security Agreement relating thereto to reflect the above described terms. In addition, pursuant to the terms of the Purchase Agreement, Pyxis agreed to advance to us prior to August 9, 2003, cash required to repay principal and interest due under promissory notes previously issued in the original aggregate principal amount of $525,000, that accrue interest at an annual rate of 15% and are due on August 9, 2003. We are permitted to repay these notes at any time. At such time as Pyxis advances us an amount equal to principal and interest due under these notes, we will use the proceeds to repay the outstanding notes and will issue to Pyxis a promissory note with the same material terms as the amended and restated notes described above. 4 RESEARCH AND LICENSE AGREEMENTS Concurrent with the closing of the Purchase Agreement, we entered into a License Agreement with an affiliate of Pyxis, granting an exclusive, license of all of our current and future intellectual property, limited to the field of nutrigenomics and dermagenomics. Outside the field of nutrigenomics and dermagenomics, we granted a right of first negotiation for the commercialization of all of our current and future intellectual property into products/services. We also entered into a Research Agreement with another affiliate of Pyxis, governing the terms of developing and validating nutrigenomic and dermagenomic tests and products. The resulting intellectual property relating to nutrigenomic and dermagenomic products would be owned by the affiliate of Pyxis and we would retain the ownership of its underlying intellectual property and resulting intellectual property relating to dermagenomic tests. In addition, we agreed with Pyxis to establish a "science committee" with equal representation from each party to exchange non-confidential information in anticipation of developing mutually beneficial opportunities. REGISTRATION RIGHTS We have entered into a Registration Rights Agreement with Pyxis. Under this agreement, we are obligated to register for resale the Common Stock issuable upon the conversion of the Series A Preferred Stock upon demand by Pyxis at any time following the second anniversary of the closing of the Purchase Agreement. Upon such demand, we are obligated to use our reasonable best efforts to have the registration statement registering such securities declared effective within one hundred and twenty (120) days of filing it with the SEC. In addition, we have agreed to grant Pyxis unlimited "piggyback" registration rights following the second anniversary of the closing of the Purchase Agreement along with priority for such registration in certain circumstances. CHANGES TO THE BOARD OF DIRECTORS Pursuant to the terms of the Purchase Agreement, we agreed to reduce the number of directors on our Board of Directors from six to five and granted Pyxis, as the sole holder of Series A Preferred Stock, the right to appoint four out of five members of our new Board of Directors. Effective immediately prior to the closing under the Purchase Agreement, Edward M. Blair, Jr., Gary L. Crocker, John Garofalo and Thomas A. Moore, each resigned from the Board of Directors. These resignations were a condition to Pyxis entering into the Purchase Agreement and the related transactions. Kenneth S. Kornman also resigned, effective ten (10) days after the date on which the information statement is filed with the SEC and mailed to all holders of record of our Common Stock as required by Rule 14f-1 of the Exchange Act. Bert Crandell, George D. Calvert, Beto Guajardo and Thomas R. Curran, Jr. have been elected to our Board of Directors as Series A Directors effective ten (10) days after the date on which such information statement is filed with the SEC and mailed to all holders of record of our Common Stock. Philip Reilly, our Chief Executive Officer, will continue to serve as a Director. 5 AGREEMENT REGARDING CORPORATE OPPORTUNITY We have agreed to certain terms for allocating opportunities as permitted under Section 122(17) of the Delaware General Corporation Law. This agreement, as set forth in the Purchase Agreement, regulates and defines the conduct of certain of our affairs as they may involve Pyxis as our majority stockholder and its affiliates, and the powers, rights, duties and liabilities of us and our officers and directors in connection with corporate opportunities. Except under certain circumstances, Pyxis and its affiliates have the right to engage in the same or similar activities or lines of business or have an interest in the same classes or categories of corporate opportunities as we do. If Pyxis or one of our directors appointed by Pyxis, and its affiliates acquire knowledge of a potential transaction or matter that may be a corporate opportunity for both Pyxis and its affiliates and us, to the fullest extent permitted by law, Pyxis and its affiliates will not have a duty to inform us about the corporate opportunity or be liable to us or to you for breach of any fiduciary duty as a stockholder of ours for not informing us of the corporate opportunity, keeping it for its own account, or referring it to a another person. Additionally, except under limited circumstances, if an officer or employee of Pyxis who is also one of our directors is offered a corporate opportunity, such opportunity shall not belong to us. In addition, we agreed that such director will have satisfied his duties to us and not be liable to us or to you in connection with such opportunity. The terms of this agreement will terminate on the date that no person who is a director, officer or employee of ours is also a director, officer, or employee of Pyxis. SAFE HARBOR This Current Report on Form 8-K contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding our ability to combine our intellectual property and expertise with Alticor's manufacturing and distribution capabilities, the development and validation of nutrigenomic and dermagenomic tests and products, the marketing of products and milestone payments that we may receive. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, our ability to develop diagnostic products for nutrigenomic and dermagenomic care uses, Pyxis and its affiliates' ability to market nutritional and skin care products used in conjunction with our diagnostic tests, our ability to achieve the milestone that would result in an additional $2.0 million payment from Alticor, our ability to complete clinical research and data analysis, meeting our clinical studies' endpoints, risk of market acceptance of our products, risk of technology and products obsolescence, delays in development of products, reliance on partners, competitive risks 6 and those risks and uncertainties described in our Form 10-Q for the quarter ended September 30, 2002, as filed on November 7, 2002, and in other filings made by us with the Securities and Exchange Commission. We disclaim any obligation to update these forward-looking statements, unless required by law. ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE. On March 5, 2003, we publicly disseminated a press release announcing that the we entered into the above described transaction with Pyxis. The information contained in the press release is incorporated herein by reference and filed as Exhibit 99.1 hereto. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. 3.1* Certificate of Designations, Preferences, and Rights of Series A Preferred Stock 10.1* Stock Purchase Agreement between Interleukin Genetics, Inc. and Pyxis Innovations Inc., dated as of March 5, 2003 10.2* Amendment No. 3 to Note Purchase Agreement, dated as of March 5, 2003 10.3* Amendment No. 2 to Security Agreement, dated as of March 5, 2003 10.4* Form of Amended and Restated Secured Promissory Note to Pyxis Innovations Inc. 10.5* Amendment No. 2 to Note Purchase Agreement, dated as of January 28, 2003 10.6+* Research Agreement, by and between Interleukin Genetics, Inc. and Access Business Group International LLC, dated as of March 5, 2003 10.7+* Exclusive License Agreement, by and between Interleukin Genetics, Inc. and Access Business Group International LLC, dated as of March 5, 2003 10.8* Registration Rights Agreement by and between Interleukin Genetics, Inc. and Pyxis Innovations Inc., dated as of March 5, 2003 10.9* Amendment No. 1 to Employment Agreement, by and between Interleukin Genetics, Inc. and Phillip R. Reilly, dated as of March 5, 2003 10.10* Amendment to Employment Agreement, by and between Interleukin Genetics, Inc. and Fenel Eloi, dated as of March 5, 2003 10.11* Amendment to Employment Agreement, by and between Interleukin Genetics, Inc. and Kenneth S. Kornman, dated as of March 5, 2003 7 10.12* Amendment to Employment Agreement, by and between Interleukin Genetics, Inc. and Paul Martha, M.D., dated as of March 5, 2003 10.13 Form of Director Indemnity Agreement, dated as of March 5, 2003 10.14* Letter of Guaranty from Alticor Inc., dated March 5, 2003 99.1* Press Release, dated March 5, 2003 - ---------------------------- + Confidential treatment has been requested with respect to certain portions of this exhibit. Omitted portions have been filed separately with the Securities and Exchange Commission. * Previously filed as the same exhibit number to our Current Report on Form 8-K, filed with the Securities Exchange Commission on March 5, 2003. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Interleukin Genetics, Inc. -------------------------- (Registrant) Date: March 11, 2003 /s/ Philip R. Reilly --------------------------------- PHILIP R. REILLY CHIEF EXECUTIVE OFFICER 8 EXHIBIT INDEX Exhibit Number Description 3.1* Certificate of Designations, Preferences, and Rights of Series A Preferred Stock 10.1* Stock Purchase Agreement between Interleukin Genetics, Inc. and Pyxis Innovations Inc., dated as of March 5, 2003 10.2* Amendment No. 3 to Note Purchase Agreement, dated as of March 5, 2003 10.3* Amendment No. 2 to Security Agreement, dated as of March 5, 2003 10.4* Form of Amended and Restated Secured Promissory Note to Pyxis Innovations Inc. 10.5* Amendment No. 2 to Note Purchase Agreement, dated as of January 28, 2003 10.6+* Research Agreement, by and between Interleukin Genetics, Inc. and Access Business Group International LLC, dated as of March 5, 2003 10.7+* Exclusive License Agreement, by and between Interleukin Genetics, Inc. and Access Business Group International LLC, dated as of March 5, 2003 10.8* Registration Rights Agreement by and between Interleukin Genetics, Inc. and Pyxis Innovations Inc., dated as of March 5, 2003 10.9* Amendment No. 1 to Employment Agreement, by and between Interleukin Genetics, Inc. and Phillip R. Reilly, dated as of March 5, 2003 10.10* Amendment to Employment Agreement, by and between Interleukin Genetics, Inc. and Fenel Eloi, dated as of March 5, 2003 10.11* Amendment to Employment Agreement, by and between Interleukin Genetics, Inc. and Kenneth S. Kornman, dated as of March 5, 2003 10.12* Amendment to Employment Agreement, by and between Interleukin Genetics, Inc. and Paul Martha, M.D., dated as of March 5, 2003 10.13* Form of Director Indemnity Agreement, dated as of March 5, 2003 10.14* Letter of Guaranty from Alticor Inc., dated March 5, 2003 99.1* Press Release, dated March 5, 2003 - ---------------------------- 9 + Confidential treatment has been requested with respect to certain portions of this exhibit. Omitted portions have been filed separately with the Securities and Exchange Commission. * Previously filed as the same exhibit number to our Current Report on Form 8-K, filed with the Securities Exchange Commission on March 5, 2003. 10 EX-10.13 3 b45847kaexv10w13.txt FORM OF DIRECTOR INDEMNITY AGREEMENT - 03/05/2003 EXHIBIT 10.13 FORM OF DIRECTOR INDEMNITY AGREEMENT THIS DIRECTOR INDEMNITY AGREEMENT ("AGREEMENT") is made as of March 5, 2003, by and between INTERLEUKIN GENETICS, INC., a Delaware corporation (the "CORPORATION"), and the undersigned director of the Corporation ("INDEMNITEE"). It is essential to the Corporation to attract and retain as directors the most capable persons available. The substantial increase in corporate litigation subjects directors and officers to expensive litigation risks at the same time that the availability of economical directors' and officers' liability insurance has been severely limited. In furtherance of the express policy of the Corporation to indemnify its directors so as to provide them with the maximum possible protection permitted by law, and in consideration of Indemnitee's agreement to serve as a director of the Corporation, the parties are entering into this Agreement. ACCORDINGLY, the parties agree as follows: SECTION 1. DEFINITIONS. As used in this Agreement: (a) "CHANGE IN CONTROL" shall mean a change in control of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14a promulgated under the Exchange Act, provided that, without limitation, such a change in control shall be deemed to have occurred if: (1) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Corporation and any new director whose election by the Board of Directors or nomination for election by the Corporation' stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; (2) the stockholders of the Corporation approve a merger or consolidation of the Corporation with any other corporation, other than a merger or consolidation which would result in the voting securities of the Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 60% of the total voting power represented by the voting securities of the Corporation or such surviving entity outstanding immediately after such merger or consolidation; or (iii) the stockholders of the Corporation approve a plan of complete liquidation of the Corporation or an agreement for the sale or disposition by the Corporation of all or substantially all of the Corporation' assets. Notwithstanding the foregoing, the "Contemplated Transactions," as defined in the Stock Purchase Agreement, dated as of the date of this Agreement, between the Corporation and Pyxis Innovations Inc., a Delaware corporation, shall not constitute of Change of Control for the purposes of this Agreement. (b) "EXPENSES" means all costs, expenses and obligations paid or incurred in connection with investigating, litigating, being a witness in, defending or participating in, or preparing to litigate, defend, be a witness in or participate in any matter that is the subject of a Proceeding (as defined below), including attorneys' and accountants' fees and court costs. (c) "PROCEEDING" means any threatened, pending or completed action, suit or proceeding, or any inquiry or investigation, whether brought by or in the right of the Corporation or otherwise and whether of a civil, criminal, administrative or investigative nature, in which Indemnitee may be or may have been involved as a party or otherwise by reason of the fact that Indemnitee is or was a director, officer, employee, agent or fiduciary of the Corporation, or by reason of any action taken by Indemnitee or any inaction on Indemnitee's part while acting as a director, officer, employee, agent or fiduciary of the Corporation, or by reason of the fact that Indemnitee is or was serving at the request of the Corporation as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other enterprise. The term "Proceeding" also includes a proceeding in which Indemnitee successfully enforces the terms of this Agreement against the Corporation. (d) "RESOLUTION COSTS" includes any amount paid in connection with a Proceeding and in satisfaction of a judgment, fine, penalty or any amount paid in settlement. SECTION 2. AGREEMENT TO SERVE. Indemnitee agrees to serve as a director of the Corporation for so long as Indemnitee is duly elected or until the tender of Indemnitee's written resignation. If, as of the date of this Agreement, Indemnitee has not yet been elected/appointed to serve as a director of the Corporation, then this Agreement shall not become effective until Indemnitee is elected/appointed as a director. SECTION 3. INDEMNIFICATION. The indemnification provided under this Agreement shall be as follows: (a) The Corporation shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee in connection with any Proceeding. Additionally, in any Proceeding other than a Proceeding by or in the right of the Corporation, the Corporation shall indemnify Indemnitee against all Resolution Costs actually and reasonably incurred by Indemnitee in connection with the Proceeding. No indemnification shall be made under this subsection: (i) with respect to remuneration paid to Indemnitee if it is determined by a final judgment or other final adjudication that the remuneration was in violation of law or is required by law to be returned to the Corporation; (ii) on account of any suit in which judgment is rendered against Indemnitee for an accounting of profits made from the purchase or sale by Indemnitee of securities of the Corporation pursuant to the provisions of Section 16 of the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), or similar provisions of any federal, state or local law; (iii) on account of Indemnitee's conduct that is determined by a final judgment or other final adjudication to have been knowingly fraudulent, deliberately dishonest or willful misconduct; (iv) on account of Indemnitee's conduct that a final judgment or other final adjudication is determined to have been in bad faith, in opposition to best interests of the Corporation or produced an unlawful personal benefit; (v) with respect to a criminal proceeding if Indemnitee knew or reasonably should have known that Indemnitee's conduct was illegal; (vi) if a final decision by a court having jurisdiction in the matter determines that indemnification under this Agreement is not lawful; and (vii) on account of any suit in which judgment is rendered against Indemnitee for an accounting of profits made from the purchase or sale by Indemnitee of securities of the Corporation pursuant to the provisions of Section 306(a) of the Sarbanes-Oxley Act of 2002. (b) In addition to any indemnification provided under Subsection 3(a) above, the Corporation shall indemnify Indemnitee against any Expenses or Resolution Costs incurred by Indemnitee, regardless of the nature of the Proceeding in which Expenses and/or Resolution Costs were incurred, if the Expenses -2- or Resolution Costs are or would have been covered under any directors' and officers' liability insurance policies in effect on the effective date of this Agreement or that become effective on any later date. (c) In addition to any indemnification provided under Subsections 3(a) and 3(b) above, the Corporation shall provide Indemnitee, to the fullest extent allowed by law as now or later enacted or interpreted, with indemnification against any Expenses and/or Resolution Costs incurred by Indemnitee in connection with any Proceeding. To the extent a change in the laws governing this Agreement (whether by statute or judicial decision) permits greater indemnification, either by agreement or otherwise, than presently provided by law or this Agreement, it is the intent of the parties that Indemnitee shall enjoy by this Agreement the greater benefits afforded by the change. (d) Without limiting Indemnitee's right to indemnification under any other provision of this Agreement, the Corporation shall indemnify Indemnitee in accordance with the provisions of this subsection if Indemnitee is a party to or threatened to be made a party to or otherwise involved in any Proceeding by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that Indemnitee was or is a director and/or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against all Expenses actually and reasonably incurred by Indemnitee and any amounts paid by Indemnitee in settlement of the Proceeding, but only if Indemnitee acted in good faith in a manner that Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation, except that no indemnification shall be made under this subsection in respect of any claim, issue or matter as to which Indemnitee shall have been adjudged to be liable to the Corporation in the performance of his duty to the Corporation, unless and only to the extent that any court in which the Proceeding was brought determines upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity, in which event indemnification shall be limited to expenses actually and reasonably incurred. (e) Notwithstanding anything in this Agreement to the contrary, prior to a Change in Control, Indemnitee shall not be entitled to indemnification pursuant to this Agreement in connection with any Proceeding initiated by Indemnitee against the Corporation or any director, officer, employee, agent or fiduciary of the Corporation (in such capacity) unless the Corporation has joined in or consented to the initiation of the Proceeding or such Proceeding relates to the enforcement by Indemnity of Indemnitee's rights under this Agreement. SECTION 4. PAYMENT OF INDEMNIFICATION. (a) Expenses incurred by Indemnitee and subject to indemnification under Section 3 above shall be paid directly by the Corporation or reimbursed to Indemnitee within ten days after the receipt of a written request of Indemnitee providing that Indemnitee undertakes to repay any amount paid or advanced under this Section if and to the extent that it is ultimately determined that Indemnitee is not entitled to indemnification under Section 3. (b) Except as otherwise provided in Section 4(a) above, any indemnification under Section 3 above shall be made no later than 30 days after receipt by the Corporation of the written request of Indemnitee, unless within that 30-day period the Board of Directors, by a majority vote of a quorum consisting of directors who are not parties to the Proceeding, determines that Indemnitee is not entitled to the indemnification set forth in Section 3 or unless the Board of Directors refers Indemnitee's indemnification request to independent legal counsel. In cases where there are no directors who are not parties to the Proceeding, the indemnification request shall be referred to independent legal counsel. If the indemnification request is referred to independent legal counsel, then Indemnitee shall be paid no later than 45 days after Indemnitee's initial request to the Corporation unless within that time independent legal -3- counsel presents to the Board of Directors a written opinion that indemnification is not allowed under Section 3 of this Agreement. If a Change in Control occurs and results in individuals who were directors prior to the circumstances giving rise to the Change in Control ceasing for any reason to constitute a majority of the Board of Directors, the above determination, if any, shall be made by independent legal counsel and not the Board of Directors. The Corporation agrees to pay the reasonable fees of the independent legal counsel and to fully indemnify that counsel against any and all expenses (including attorneys' fees), claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant to this Agreement. If there has not been a Change in Control, independent legal counsel shall be selected by the Board or Directors or the executive committee of the board, and if there has been a Change in Control, the independent legal counsel shall be selected by Indemnitee. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee's entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or expenses (including reasonable attorneys' fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee's entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom. The person, persons or entity making the determination with respect to Indemnitee's entitlement to indemnification shall notify Indemnitee of such determination no later than two (2) business days after the determination is made. (c) The right to indemnification payments as provided by this Agreement shall be enforceable by Indemnitee in any court of competent jurisdiction. The burden of proving that indemnification is not permitted by this Agreement or by law shall be on the Corporation or on the person challenging the indemnification. Neither the failure of the Corporation, including its Board of Directors, to have made a determination prior to the commencement of any Proceeding that indemnification is proper, nor an actual determination by the Corporation, including its Board of Directors or independent legal counsel, that indemnification is not proper, shall bar an action by Indemnitee to enforce this Agreement or create a presumption that Indemnitee is not entitled to indemnification under this Agreement. If the Board of Directors or independent legal counsel determines in accordance with Section 4(b) that Indemnitee would not be permitted to be indemnified in whole or in part, Indemnitee shall have the right to commence litigation in any court in the State of Delaware having subject matter jurisdiction and in which venue is proper seeking an independent determination by the court or challenging the determination by the Board of Directors or independent legal counsel, and the Corporation hereby consents to service of process and to appear in that Proceeding. Expenses incurred by Indemnitee in connection with successfully establishing Indemnitee's right to indemnification, in whole or in part, shall also be reimbursed by the Corporation. SECTION 5. DEFENSE OF CLAIM. Prior to a Change in Control: (a) The Corporation, jointly with any other indemnifying party, shall be entitled to assume the defense of any Proceeding as to which Indemnitee requests indemnification. After notice from the Corporation to Indemnitee of its election to assume the defense of a Proceeding, the Corporation shall not be liable to Indemnitee under this Agreement for any legal or other Expenses subsequently incurred by Indemnitee in connection with the defense of such matter other than reasonable costs of investigation or as otherwise provided in subsection (c) below. (b) Except as provided in Section 5(c), the Corporation need not, in any action or actions, employ or approve the employment of more than one counsel to represent Indemnitee and any other -4- officer or other party entitled to indemnification pursuant to an agreement similar to this Agreement or otherwise. (c) Indemnitee may employ his own counsel in a Proceeding and be indemnified therefor if (i) the Corporation approves, in writing, the employment of such counsel, or (ii) either (A) Indemnitee has reasonably concluded that there are conflicts of interest between the Corporation and Indemnitee or between Indemnitee and other parties represented by counsel employed by the Corporation to represent Indemnitee in the Proceeding, or (B) the Corporation has not employed counsel to assume the defense of the Proceeding. SECTION 6. PARTIAL INDEMNIFICATION; SUCCESSFUL DEFENSE. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Corporation for some or a portion of the Expenses or Resolution Costs actually and reasonably incurred by Indemnitee but not, however, for the total amount, the Corporation shall nevertheless indemnify Indemnitee for the portion of the Expenses or Resolution Costs to which Indemnitee is entitled. Moreover, notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise in defense of any or all claims relating in whole or in part to a Proceeding or in defense of any issue or matter in a Proceeding, including dismissal without prejudice, Indemnitee shall be indemnified against all Expenses incurred in connection with that Proceeding. SECTION 7. CONSENT. Unless and until a Change in Control has occurred, the Corporation shall not be liable to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding made without the Corporation's written consent. The Corporation shall not settle any Proceeding in any manner that would impose any penalty or limitation on Indemnitee without Indemnitee's written consent. Neither the Corporation nor Indemnitee shall unreasonably withhold their consent to any proposed settlement. SECTION 8. SEVERABILITY. If this Agreement or any portion of this Agreement (including any provision within a single section, subsection or sentence) shall be held to be invalid, void or otherwise unenforceable on any ground by any court of competent jurisdiction, the Corporation shall nevertheless indemnify Indemnitee as to any Expenses or Resolution Costs with respect to any Proceeding to the full extent permitted by law or any applicable portion of this Agreement that shall not have been invalidated, declared void or otherwise held to be unenforceable. SECTION 9. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE. The indemnification provided by this Agreement shall be in addition to any other rights that Indemnitee may be entitled to under the Certificate of Incorporation, the Bylaws, any agreement or any vote of stockholders or disinterested directors of the Corporation; the Delaware General Corporation Law; or otherwise, both as to actions in Indemnitee's official capacity and as to actions in another capacity while holding office. SECTION 10. NO PRESUMPTION. For purposes of this Agreement, the termination of any claim, action, suit or proceeding, by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law. SECTION 11. SUBROGATION. In the event of payment under this Agreement, the Corporation shall be subrogated to the extent of the payment to all of the rights of recovery of Indemnitee, who shall execute all documents required and shall do everything that may be necessary to secure those rights, including the execution of all documents necessary to enable the Corporation to effectively bring suit to enforce those rights. -5- SECTION 12. NO DUPLICATION OF PAYMENTS. The Corporation shall not be liable under this Agreement to make any payment to the extent Indemnitee has otherwise actually received payment (under any insurance policy, Bylaw or otherwise) of the amounts otherwise indemnifiable under this Agreement. SECTION 13. NOTICE. Indemnitee shall, as a condition precedent to his right to be indemnified under this Agreement, give to the Corporation notice in writing as soon as practicable of any claim for which indemnity will or could be sought under this Agreement. Notice to the Corporation shall be directed to Interleukin Genetics, Inc., 135 Beaver Street, Waltham, MA 02452 Attention: Chief Executive Officer (or to any other individual or address that the Corporation designates in writing to Indemnitee). Notice shall be deemed received three days after the date postmarked if sent by prepaid mail properly addressed. In addition, Indemnitee shall give the Corporation any information and cooperation that it may reasonably require and is within Indemnitee's power to give. SECTION 14. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall constitute an original, and all of which taken together shall constitute a single document. SECTION 15. CONTINUATION OF INDEMNIFICATION. The indemnification rights provided to Indemnitee under this Agreement, including the right provided under Subsection 4(a) above, shall continue after Indemnitee has ceased to be a director, officer, employee, agent or fiduciary of the Corporation or any other corporation, partnership, joint venture, trust or other enterprise that Indemnitee served in any of those capacities at the request of the Corporation. SECTION 16. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of the Corporation and Indemnitee and their respective successors and assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Corporation, spouses, heirs, and personal and legal representatives. SECTION 17. APPLICABLE LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to contracts made and to be performed in that State without giving effects to the principles of conflicts of laws. SECTION 18. LIABILITY INSURANCE. To the extent the Corporation maintains an insurance policy or policies providing directors' and officers' liability insurance, Indemnitee, whether or not then serving as a director and/or officer of the Corporation, shall be covered by the policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any officer, employee, agent or fiduciary of the Corporation. SECTION 19. PERIOD OF LIMITATIONS. No legal action shall be brought and no cause of action shall be asserted by or on behalf of the Corporation or any affiliate of the Corporation against Indemnitee, Indemnitee's spouse, heirs, executors or personal or legal representatives after the expiration of two years from the date of accrual of such cause of action, and any claim or cause of action of the Corporation or its affiliate shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such two year period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action such shorter period shall govern. -6- SECTION 20. AMENDMENTS; WAIVER. No supplement, modification, amendment, or waiver of this Agreement or any of its terms shall be binding unless executed in writing by all of the parties to this Agreement or, in the case of waiver, by the party against whom the waiver is asserted. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement (whether or not similar) nor shall any waiver constitute a continuing waiver. SECTION 21. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and understanding of the Corporation and Indemnitee in respect of the subject matter hereof and supersedes all prior agreements, arrangements and understandings relating to the subject matter hereof, including any previous indemnity agreements between the Corporation and Indemnitee. * * * -7- The parties have executed this Director Indemnity Agreement as of the date stated in the first paragraph of this Agreement. INTERLEUKIN GENETICS, INC. By ----------------------------------- Its -------------------------------- INDEMNITEE ------------------------------------- -8- SCHEDULE TO FORM OF DIRECTOR INDEMNITY AGREEMENT Pursuant to Instruction 2 of Item 601 of Regulation S-K, we state that the Form of Director Indemnity Agreement filed as Exhibit 10.13 to our Current Report on Form 8-K dated March 5, 2003, is identical in all material respects with Director Indemnity Agreements we entered with our Directors and Director appointees, other than with respect only to the Director parties to each agreement, which are as follows: Parties to Director Indemnity Agreements Edward M. Blair, Jr. George Calvert Bert Crandell Gary L. Crocker Thomas Moore Phillip R. Reilly John M. Garofalo Kenneth Kornman Beto Guajardo Thomas R. Curran, Jr. - ------------------ We hereby undertake to file copies of any or all of such Director Indemnity Agreements pursuant to an amendment to our Current Report on Form 8-K date March 5, 2003 upon the request of the Commission. -----END PRIVACY-ENHANCED MESSAGE-----