Exhibit 10.32
BETWEEN
UNIVERSITY OF EDINBURGH
(“the Licensor”)
- and -
STEM CELL SCIENCES LIMITED
(formerly known as STEM CELL SCIENCES PTY LTD)
ACN 063 293 130
(“the Licensee”)
AGREEMENT

 

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TABLE OF CONTENTS

                                      Page   1.     DEFINITIONS AND
INTERPRETATIONS     1          
1.1
  Definitions     1          
1.2
  Interpretation     5     2.     GRANT OF LICENCE     5          
2.1
  Exclusive Licence to Licensee     5          
2.2
  Notification and Copies of Sub-licences     5          
2.3
  Contents of Sub-licences     6          
2.4
  Exploitation of Licence     6          
2.5
  Licensor’s Acknowledgement     6     3.     ROYALTY     6          
3.1
  Royalty     6          
3.2
  Royalty Stacking     6          
3.3
  Time of Computing Royalty     8          
3.4
  Payment of Royalty     8          
3.5
  Currency and Exchange Rate     8          
3.6
  Taxation on Royalties     8          
3.7
  Statements with Royalties     8          
3.8
  Auditing of Statements     9          
3.9
  Records     9          
3.10
  Auditing of Records     9          
3.11
  Auditing of Sub-licences Records     9          
3.12
  Use of Royalties by Licensor     9          
3.13
  [****]     10          
3.14
  Licensee’s Warranty     10     4.     MINIMUM PERFORMANCE REQUIREMENTS     10
         
4.1
  Royalty Guarantee     10     5.     PATENT APPLICATIONS     11          
5.1
  Patent Prosecution     11  

i

[****] Certain information has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

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                                      Page        
5.2
  Patents in name of Licensor     11          
5.3
  Due Diligence in Prosecuting Applications     11          
5.4
  Costs of Patent Prosecution     11          
5.5
  Parties to Assist In Prosecution     11     6.     REGISTRATION     12        
 
6.1
  Registration of Licensee     12          
6.2
  Cost of Registration     12     7.     CONSULTATION AND CO-OPERATION     12  
       
7.1
  Project consultation     12          
7.2
  Co-operation generally     12     8.     ADDITIONAL LICENCES     12          
8.1
  Licensee’s Enhancements Property of Licensee     12          
8.2
  Non- Exclusive Licenses to Licensor     13          
8.3
  Revenues from third parties     13     9.     STANDARDS OF MANUFACTURE AND
LABELLING     13          
9.1
  Compliance with Standards     13          
9.2
  Indemnity     13          
9.3
  Insurance     13     10.     SECRECY OBLIGATIONS     13          
10.1
  Confidentiality     13          
10.2
  Exceptions     14     11.     LICENSOR’S WARRANTIES     14          
11.1
  Warranties     14          
11.2
  Indemnity     15     12.     FAILURE TO GRANT OR SUBSEQUENT REVOCATION OF
PATENT     15          
12.1
  Royalties to be Reduced     15          
12.2
  Reduction of Royalty Guarantee     15     13.     PATENT INFRINGEMENT     16  
       
13.1
  Licensee to take Infringement Action     16          
13.2
  Licensee to Notify Licensor     16  

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                                      Page        
13.3
  Licensor to Assist Licensee     16          
13.4
  Licensee to Indemnify Licensor     16          
13.5
  Proceeds     16     14.     TERMINATION     17          
14.1
  Termination by Licensor     17          
14.2
  Termination by Licensee     17     15.     EFFECTS OF TERMINATION     18      
   
15.1
  Effects of Termination     18          
15.2
  Accrued Rights     18     16.     GENERAL     18          
16.1
  Waiver     18          
16.2
  Entire Agreement     18          
16.3
  Assignment     19          
16.4
  Applicable Law     19          
16.5
  Amendments     19          
16.6
  Severability     19          
16.7
  Notices     19          
16.8
  Further Agreements     20          
16.9
  Changes     20  

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THIS AGREEMENT is made on the 31st day of January 2006.

     
BETWEEN:
  UNIVERSITY OF EDINBURGH operating through its INSTITUTE FOR STEM CELL RESEARCH
(formerly the CENTRE FOR GENOME RESEARCH), of The Roger Land Building, King’s
Building’s, West Mains Road, Edinburgh EH9 3JQ, United Kingdom (the “Licensor”)
of the first part
 
   
AND:
  STEM CELL SCIENCES LIMITED (formerly known as STEM CELL SCIENCES PTY LTD) ACN
063 293 130 of 1st Floor, 28 Riddell Parade, Elsternwick, 3185, Australia (the
“Licensee”) of the second part.

BACKGROUND

(A)   Under the Option Agreement, the Licensor granted to Dr. Peter Scott
Mountford an option for a licence under the Original Patent Applications.   (B)
  Dr. Peter Scott Mountford, with the consent of the Licensor, assigned his
rights and benefits under the Option Agreement to the Licensee in accordance
with the terms of the Option Agreement.   (C)   The Licensee then validly
exercised the option granted pursuant to the Option Agreement and assigned to it
and accordingly, on 31 March 1994, the Licensor and the Licensee entered into
the 1994 Agreement.   (D)   The Licensor and the Licensee have agreed to vary
the terms of the 1994 Agreement in certain respects, including by the grant of a
licence to use certain additional rights to the License. Accordingly, the
parties have agreed to vary the terms of the 1994 Agreement in accordance with
this Agreement, it being the intent of the parties that this Agreement will be
effective to replace the terms of the 1994 Agreement with effect from the Agreed
Date, as identified above.

NOW THE PARTIES AGREE AS follows:

1.   DEFINITIONS AND INTERPRETATIONS   1.1   Definitions       In this Agreement
and in the Background unless the context otherwise requires, the following words
and expressions have the following meanings:       “1994 Agreement” means the
agreement entered into between the Licensor and the Licensee, dated 31
March 1994, following the Licensee’s valid exercise of the option granted
pursuant to the Option Agreement, and pursuant to the terms of which the
licensor licensed certain rights to the Licensee.

 

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    “Affiliate” means an entity that directly or indirectly controls or is
controlled by or is under common control with the Licensee (and for this purpose
“control” shall mean (i) holding a fifty per cent (50%) voting interest in the
voting shares or capital stock of the relevant entity (or such lesser percentage
which is the maximum allowed to be owned by a foreign corporation in a
particular jurisdiction); or (ii) that the affairs of the relevant entity are
conducted in accordance with the wishes of the other entity as a result of the
holding of voting shares or capital stock, voting partnership shares or other
similar ownership medium or by virtue of powers conferred by the articles of
association, by-laws, constitution or any other document or agreement regulating
the affairs of the relevant entity), and in the case of the Licensee shall
include Stem Cell Sciences KK and any Former Affiliate.       “Agreed Date”
means 31 January 2006.       “Centre” means the Institute for Stern Cell
Research (formerly the Centre for Genome Research) of the University of
Edinburgh and includes any person who becomes, in whole or in part, its
successors, substitute or assignee (which includes a person taking by way of
novation).       “Confidential Information” means all information, material and
technology provided in any form by either Party to the other under this
Agreement and includes all drafts, copies, exempts, notes and summaries thereof.
      “Cross Licensed Rights” means any intellectual property rights granted to
the Licensee or an Affiliate of the Licensee by a sub-licensee in consideration
of the grant of a Sub- licence of the Licensed Rights.       “Existing Rights”
means:

  (a)   the Patent Applications;     (b)   the Patents; and     (c)  
Improvements, Inventions, Information and Know-how now possessed or invented,
developed or acquired by the Centre prior to Agreed Date.

    “Field” means the isolation and propagation of human and large animal stem
cells including the objectives of and the subject matter in or relating to the
patent specifications disclosed its the Original Patent Applications.      
“Former Affiliate” means any entity which ceases to be an Affiliate.      
“Information” means all secret processes, formulas and technical information
relating to the Field but not included in the patent specifications of the
Patents.       “Inventions” means and includes all patentable and unpatentable
inventions relating to the Field other than the inventions included in the
patent specifications of the Patents or the Patent Applications.

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    “Improvements” means any enhancement, modification, development, alteration
or technical advance in, of, or relating to any Patent, Patent Application,
Invention, Information or Know-how relating to the Field.       “Know-how” means
all the expertise, practice, experience, skill and technical knowledge relating
to the Field.       “Licensed Rights” means the Existing Rights and the Project
Results;       “Net Sales Price” means the arms length net selling price of
gross invoiced sales of the Products less all discounts, allowances,
transportation charges, packaging costs, insurance and taxes directly based on
sale and/or time of payment.       “Option Agreement” means the option agreement
dated 24 February 1994 between the Licensor and Dr. Peter Mountford.      
“Original Patent Applications” means (i) Patent Application GB 9308271.7
relating to the invention of Peter Mountford and Austin Smith, Expression
Vectors for In Vitro Derivation of Stem Cells, and (ii) Patent Application GB
9401011.3 relating to the invention of Peter Mountford, Austin Smith and Richard
Lathe, Expression of Heterogonous Genes.       “Parties” means each of the
University of Edinburgh and Stem Cell Sciences Limited and “Party” means either
of the University of Edinburgh and Stem Cell Sciences Limited.       “Patent
Applications” means the patent applications, short particulars of which are
given in Schedule 1 and any divisions, continuation, continuation in part,
supplemental disclosure and reissues of any of them.       “Patent Rights” means
patent applications and patents and any divisions, continuation, continuation in
part, supplemental disclosure and reissues of any of them.       “Patents” means
the granted patents, short particulars of which are given in Schedule 1, all
present and future patents issued in respect of any Patent Application and any
divisions, continuation, continuation in part, supplemental disclosure and
reissues of any of them.       “Product” means any product or process sold by or
on behalf of the Licensee, by any Affiliate of the Licensee under a Sub-licence,
which is an application of or incorporates;

  (a)   one or more claims of a Patent, Patent Application, Project Patent or
Project Application; and/or     (b)   any Cross Licensed Rights.

    “Project Application” means all present and future patent applications and
any divisions, continuation, continuation in part, supplemental disclosure and
reissues of any of them, in respect of Project Results filed in any part of the
Territory;

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    “Project Patents” all present and future patents issued in respect of any
Project Applications and any divisions, continuation, continuation in part,
supplemental disclosure and reissues of any of them.       “Project Results”
means (i) patentable or unpatentable inventions, secret processes, formulae and
technical information, expertise, practice, skill, technical knowledge, (ii)
Project Applications, or (iii) Project Patents invented or developed by the
Centre, in the conduct of the Projects (or any of them) which the University is
not prevented by a Third Party from making available to the Licensee under this
Agreement by virtue of the terms and conditions of funding imposed by the Third
Party funding the relevant Project.       “Projects” means the programmes of
scientific research listed in Schedule 2 (or any part thereof) but only for so
long as and to the extent that any programme (or any part thereof) is being
carried out by the Centre, together with such additional projects as the parties
may mutually agree in writing from time to time.       “Royalty” means the
payments to be paid by the Licensee to the Licensor pursuant to Clause 3.1(a)(i)
and 3.1(a)(ii).       “Royalty Period” means each period of one (1) year
commencing on the date of this Agreement or the anniversary of the date of this
Agreement as the case may be or, if this Agreement is terminated for any reason,
the period commencing on the most recent anniversary of the date of this
Agreement and ending on the date of termination.       “Royalty Report” means
the royalty examination report undertaken by PricewaterhouseCoopers LLP dated 18
January 2006 (a copy of which has been provided to the Licensor and receipt of
which is hereby acknowledged by the Licensee).       “Sub-licence” means:

  (a)   any sub-licence of the Licensed Rights granted by the Licensee, or
granted by sub-licensee of the Licensee under a Sub-licence, pursuant to Clause
2.1(b); and     (b)   any sub-license of Cross Licensed Rights granted by the
Licensee or an Affiliate of the Licensee (which sub-license may also comprise
the grant of a sub-licence of the Licensed Rights).

    “Term” means the period commencing on 31 March, 1994 and concluding on the
earlier of the date on which the last of the Patents expires or the date on
which this Agreement is terminated pursuant to Clause 14, whichever is earlier.
      “Territory” means all the countries of the world and includes any one or
more of any part of those countries.       “Third Party” means any entity or
person other than the Licensor and the Licensee.

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1.2   Interpretation       In this Agreement, unless the contrary intention
appears:

  (a)   a reference to person will include a natural person, corporation,
incorporated association, statutory corporation, the Crown and any other type of
legal entity; words including singular number will include a plural number and
vice versa; words including a gender will include all other genders;     (b)   a
reference in this Agreement to a statute or a section of a statute includes all
amendments to that statute or section passed in substitution for the statute or
section referred to or incorporating any of its provisions;     (c)   Clause
headings have been inserted for the purpose of guidance only, and will not be
part of this Agreement;     (d)   a reference to a Clause, Recital or paragraph
is a reference to a clause, recital or paragraph of this Agreement;     (e)   a
reference to a person includes that person’s personal representatives,
successors and permitted assigns; and     (f)   “Agreement” means this licence
agreement.

2.   GRANT OF LICENCE   2.1   Exclusive Licence to Licensee       In
consideration of the payment of the Royalty the Licensor hereby grants to the
Licensee the following:

  (a)   an exclusive licence in the Territory for the Term to enjoy,
commercialise and exploit the Licensed Rights and to manufacture, have
manufactured, use, market, sell and have sold the Products; and     (b)   the
right to grant sub-licences of any of the rights (including the right to
sub-licence) referred to in paragraph (a) of this Clause 2.1, provided that any
such sub-licence is on terms not inconsistent with the Licensor’s rights under
this Agreement.

2.2   Notification and Copies of Sub-licences       The Licensee will notify the
Licensor of the name and address of the sub-licensee promptly upon the Licensee
entering into a Sub-licence and provide to the Licensor a copy of that
Sublicence within thirty (30) days of receiving a copy of that Sub-licence from
the relevant sub-licensee.

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2.3   Contents of Sub-licences       The Licensee will ensure that:

  (a)   provisions with the effect of Clauses 3.7(a), 3.9, 3.10, 9 and 15.1; and
    (b)   the provisions of Clause 10 with the necessary changes being made, are
incorporated in each Sub-licence.

2.4   Exploitation of Licence       The Licensee at its expense will use its
best endeavours to commercialise and exploit the Licensed Rights and to
manufacture, have manufactured, use, market and sell the Products or to appoint
sub-licensees for the purpose of such commercialisation and exploitation.   2.5
  Licensor’s Acknowledgement       Notwithstanding Clause 2.4, the Licensor
acknowledges that not all of the Licensed Rights are as at the date of this
Agreement at a stage which are capable of commercialisation or exploitation. The
Licensor further acknowledges that it may be necessary for the Licensee to
conduct research in relation to some of the Licensed Rights before the Licensee
can fulfil its obligations under Clause 2.4.   3.   ROYALTY   3.1   Royalty

  (a)   In consideration of the licences granted in Clause 2, but subject always
to Clauses 3.2 and 4, the Licensee must pay to the Licensor:

  (i)   an amount equal to [****] of the Net Sales Price of any Product sold by
the Licensee or any Affiliate under a Sub-licence on or after the Agreed Date;
and     (ii)   an amount equal to [****].

  (b)   The Licensee will use all reasonable endeavours to ensure that Products
are sold, leased, hired or otherwise disposed of at normal commercial rates.

3.2   Royalty Stacking

  (a)   Where in order to manufacture, use, market or sell Products it is
legally necessary for the Licensee to also have a licence from a Third Party
(other than an Affiliate) under any Patent Rights and by reason of an agreement
with such Third Party a royalty on the Net Sales Price (or similarly defined
amount) is payable to such Third Party, [****]:

  (i)   [****]

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  (ii)   the Licensee shall make available to the Licensor appropriate
documentary and other evidence to verify the amount of royalties being paid
under the licences giving rise to a reduction of the Royalty payable to the
Licensor under Clause 3.1(a)(i);     (iii)   the foregoing shall apply only if
any Third Party from whom it is legally necessary for the Licensee to obtain a
licence in order to manufacture, sell, use or otherwise dispose of the Products
and with whom the licensee enters into an agreement following the Agreed Date
agrees that the provisions of equivalent effect to this Clause 3.2(a) apply in
respect of the sums payable to such Third Party; and     (iv)   in calculating
whether the Total Royalty exceeds the Royalty Cap for the purposes of this
Clause 3.2(a), any royalties payable to sub-licensees in respect of the
manufacture, use, marketing or sale of Products containing Cross Licensed Rights
are to be disregarded.

  (b)   Where the Licensed Rights and/or Cross Licensed Rights are sub-licensed
by the Licensee (or any Affiliate under a Sub-licence) together with other
patents, patent applications, know-how, technology, material and/or resources
owned by or under the control of the Licensee (the “Other Technology”) and the
relevant Sub-licence does not apportion the amounts to be paid under that
Sub-licence between the Licensed Rights and/or the Cross Licensed Rights (on the
one hand) and the Other Technology being licensed or sub-licensed to the
sub-licensee (on the other hand), the amount received from the sub-licensee
under the relevant Sub-licence in respect of exploitation of the Licensed Rights
and/or the Cross Licensed Rights shall for the purposes of calculating the
amounts payable to the Licensor under Clause 3.1(a)(ii) be deemed to be such
proportion of the total consideration payable thereunder as the parties shall
agree is fair and reasonable taking into account the relative values of the
licensed Rights and/or the Cross Licensed Rights (on the one hand) and the Other
Technology being sub-licensed or licensed to the relevant sublicence (on the
other hand). If at any time a dispute arises under this Clause 3.2(b) (including
without limitation a failure to reach agreement in relation to the relative
values of the Licensed Rights and/or the Cross Licensed Rights (on the one hand)
and the Other Technology being sub-licensed or licensed to the relevant
sub-licensee (on the other hand)) and the parties are not able to resolve such
dispute within thirty (30) days of the dispute first arising, either party may
elect by serving a written notice on the other party to refer such dispute for
determination to the Principal of the Licensor and the Chief Executive Officer
of the Licensee.     (c)   The Licensee will use all reasonable endeavours to
ensure that the Licensed Rights and the Cross Licensed Rights are sub-licensed
by the Licensee (or any Affiliate under a Sub-licence) at normal commercial
rates.

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3.3   Time of Computing Royalty       The Royalty for each year will be computed
at the end of each Royalty Period.   3.4   Payment of Royalty       Subject to
Clause 3.5, the Licensee will pay the Royalty for each Royalty Period free of
all taxes or charges within thirty (30) days of the end of the Royalty Period.  
3.5   Currency and Exchange Rate       Each payment provided for in Clause 3.1
shall be paid in pounds sterling and the rate of exchange will be that
prevailing between the Australian dollar and the pound sterling published in the
Australian Financial Review on the last day of the relevant Royalty Period.  
3.6   Taxation on Royalties

  (a)   All income taxes levied in accordance with the tax laws in specific
countries within the Territory on the Royalty payments to be made by the
Licensee under this Agreement shall be borne by the Licensor.     (b)   The
Licensee will pay such taxes to the competent taxation office on the Licensor’s
behalf, it being agreed and understood that the Licensor authorises the Licensee
to withhold such taxes from Royalty payments.     (c)   The Licensee will
furnish the Licensor with tax receipts or other certificates issued by the
competent taxation office showing the payment of the income taxes.

3.7   Statements with Royalties       The Licensee will:

  (a)   with each Royalty payment under Clause 3.1(a)(i) and Clause 4.1 provide
the Licensor with a statement including the following information:

  (i)   the number of Products manufactured and/or sold during the Royalty
Period;     (ii)   the Net Sales Price of each of the Products sold during the
Royalty Period;     (iii)   the manner in which the Net Sales Price is
calculated including discounts, transportation charges, purchasing costs,
insurance and taxes; and     (iv)   if Clause 3.2(a) applies, all papers,
documents, information and other evidence reasonably requested by the Licensor
to verify the reduced Royalty payable; and

  (b)   with each Royalty payment under Clause 3.1(a)(ii) provide to the
Licensor:

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  (i)   copies of all statements delivered to the Licensee by its sub-licensees
in respect of royalty payments made to the Licensee under any Sub-licence; and  
  (ii)   if Clause 3.2(b) applies, all papers, documents, information and other
evidence reasonably requested by the Licensor to verify the reduced Royalty
payable.

3.8   Auditing of Statements       Any statement provided under Clause 3.7 will,
if required by the Licensor, be certified as correct by the auditor of the
Licensee, or if the Licensee does not have an auditor, by a person approved by
the Licensor for this purpose.   3.9   Records       The Licensee shall maintain
for a period of seven (7) years in a manner approved by the Licensor separate
and accurate records and accounts of the manufacture and sale of the Products,
the Net Sales Price at which the Products are sold and any other information
reasonably required by the Licensor relevant to the Products manufactured and
sold and the determination of Net Sales Price and, if applicable, the reduced
Royalty payable pursuant to Clause 3.2. Such separate and accurate records and
accounts shall be in sufficient detail so that the Licensor need not refer to
the other records and accounts of the Licensee.   3.10   Auditing of Records    
  The Licensee will upon reasonable notice and during ordinary business hours,
permit and give all reasonable assistance to an accountant or auditor of the
Licensor to inspect, audit and copy on a confidential basis all or any records
required to be maintained by the Licensee under this Clause.   3.11   Auditing
of Sub-licences Records       The Licensee will, if requested by the Licensor,
inspect, audit and copy records kept by any sub-licensee pursuant to any
Sub-licence for the purpose of verifying Royalty payments and, if applicable,
the reduced Royalty payable pursuant to Clause 3.2.   3.12   Use of Royalties by
Licensor       The Licensee acknowledges that the licensor shall be free to
implement any policies it may have for an equitable sharing of any Royalties
paid to it with those inventors responsible for generating the intellectual
property which lead to the Royalty being paid. The balance of any such Royalties
not so distributed shall be applied by the Licensor to further its aims and
objectives.

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3.13   [****]   3.14   Licensee’s Warranty       The Licensee hereby represents,
warrants and undertakes to the Licensor that:

  (a)   it has not knowingly withheld any papers, documents, information and/or
other evidence relevant to the undertaking of the Royalty Report; and     (b)  
the papers, documents, information and other materials provided by the Licensee
to PricewaterhouseCoopers LLP in connection with its preparation of the Royalty
Report relating to Products sold by the Licensee (including information about
the Net Sales Prices of Products sold by the Licensee) and Sub-licences entered
into by the Licensee (including information provided by the Licensee about
royalties, sub-licensing fees and other payments paid to the Licensee pursuant
to such Sub-licences) are to the best of the knowledge and belief of the
Licensee true, accurate, reliable and complete in all material respects.

4.   MINIMUM PERFORMANCE REQUIREMENTS   4.1   Royalty Guarantee       If for any
Royalty Period the amount of Royalties paid to the Licensor under this Agreement
is:

  (i)   less than [****]; or     (ii)   if the Royalty Period is less than one
year, less than the proportion [****] which reflects the ratio of that royalty
Period to one year,

    the Licensee will, within thirty (30) days of the end of the relevant
Royalty Period, pay to the Licensor the difference between the amount set down
in paragraph (i) or (ii) of this Clause 4.1 (as the case may be) and the amount
of Royalties actually paid to the Licensor in that Royalty Period.

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5.   PATENT APPLICATIONS   5.1   Patent Prosecution       For so long as the
Licensee claims the exclusive license granted under Clause 2.1, the Licensor and
the Licensee will consult together on action to be taken with regard to filing
and the prosecution of Patent Applications and Project Applications in the
Territory. The Parties will decide between them which Party will be responsible
for conducting the prosecution of Patent Applications and Project Applications
in each country within the Territory in which Patent Applications and Project
Applications have been or may be made.   5.2   Patents in name of Licensor      
Unless otherwise agreed between the Parties or unless otherwise required by the
legislation of a particular country in which a Patent Application or Project
Applications may be made, all patents will, unless otherwise agreed in writing
between the parties, be prosecuted in the name of the Licensor and the Parties
will make all reasonable efforts to ensure that all documents and things are
executed and done by the Parties or their employees, agents or representatives
to secure the grant of patent in the name of the Licensor.   5.3   Due Diligence
in Prosecuting Applications       Each Party will use all reasonable efforts and
exercise due diligence in prosecuting any Patent Application and Project
Application for which it may have responsibility under Clause 5.1 in full
accordance with all the relevant laws and requirements of the country concerned
and each will keep the other informed of all official actions and responses
arising out of the prosecution of that Patent Application and Project
Application.   5.4   Costs of Patent Prosecution       For so long as the
Licensee retains the exclusive licence granted under Clause 2.1, the Licensor
will have the right to reimbursement of all expenses it may incur after the date
of this Agreement in connection with the prosecution of ally Patent Application,
Patent, Project Application and Project Patent in the Territory, unless
otherwise agreed by the parties in writing or the Licensee has previously
notified the Licensor of the Licensee’s objection to a course of action to which
such expenditure may relate.   5.5   Parties to Assist In Prosecution       The
Licensor and Licensee each agree to give the other all reasonable assistance in
prosecuting Patent Applications and Project Applications for which the other may
be responsible.

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6.   REGISTRATION   6.1   Registration of Licensee       The Licensee may at any
time during the currency of this Agreement request the Licensor to grant or
procure the registered patentee to grant to the Licensee formal licences in
respect of any of the Patents and Project Patents in a form that complies with
the requirements of law and public authorities in each part of the Territory to
enable the Licensee at its expense, to become duly registered as the Licensee
under the Patents and Project Patents.   6.2   Cost of Registration       The
Licensee hereby undertakes to bear all costs and expenses incurred in the grant
and registration of formal licences in respect of the Patents and Project
Patents to the Licensee pursuant to Clause 6.1.   7.   CONSULTATION AND
CO-OPERATION   7.1   Project consultation       On and from the Agreed Date and
during the conduct of the Projects the Parties will meet on a regular basis (at
least twice yearly), at a time and place to be mutually agreed between the
parties, to discuss progress with respect to the Projects. During the period
intervening between such meetings of the Parties in relation to the Projects,
each Party will use its reasonable endeavours to keep the other Party informed
of any arising Project Results as soon as reasonably practicable following the
invention or discovery of any Project Results relevant to any Project.   7.2  
Co-operation generally       On and from the Agreed Date, the parties will
co-operate in good faith with a view to developing a mutually beneficial
relationship between the parties on an ongoing basis.   8.   ADDITIONAL LICENCES
  8.1   Licensee’s Enhancements Property of Licensee       All enhancements and
improvements to the Licensed Rights originated, developed or invented by the
Licensee, and all unpatentable and patentable inventions, secret processes,
formulae, technical information, expertise, practice, experience, skill and
technical knowledge relating to the Field which is originated, developed or
invented by the Licensee and which the Licensee is entitled to own (the
“Licensee’s technology”) will vest in and be the property of the Licensee.

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8.2   Non- Exclusive Licenses to Licensor

  (a)   In consideration of the agreements of the Licensor in this Agreement,
the Licensee by this Agreement hereby grants to the Licensor, with effect from
31 March 1994 and for the duration of the Term: [****].

8.3   Revenues from third parties       In the event that Licensor receives a
request from a commercial entity regarding use of the Licensed Rights, the
Licensor shall make them aware of the nature of the terms of this Agreement in
advance of any research being conducted. In the event that such commercial
entity requires a licence to the Licensed Rights, the Licensor shall promptly
advise the relevant third party to contact Hugh Ilyine (or such replacement
Chief Operating Officer of the Licensee as may be notified to the Licensor in
writing from time to time), of the Licensee.   9.   STANDARDS OF MANUFACTURE AND
LABELLING   9.1   Compliance with Standards       The Licensee will manufacture
the Products so that each one meets the requirements and specifications of any
applicable standards set forth by the country and the part of the Territory
where the particular Product is to be sold and the Licensee shall not sell any
Products that do not meet such specifications and requirements.   9.2  
Indemnity       The Licensee will keep the Licensor indemnified against all
damages, costs or expenses, including legal costs, in respect of all claims,
demands, actions, proceedings or prosecutions which may be brought, commenced or
prosecuted against the Licensor in consequence or relating to or arising out of
the manufacture, sale or commercial utilisation of the Products.   9.3  
Insurance       In the event that such insurance is available at commercially
reasonable rates, the Licensee will at all times following first commercial sale
of Product maintain and keep current in respect of its manufacture and sale of
the Products, product liability insurance obtained from a reputable insurer and
shall make available to the Licensor such policy for inspection upon request by
the Licensor.   10.   SECRECY OBLIGATIONS   10.1   Confidentiality       Subject
to Clause 10.2 each Party undertakes to the other Party to maintain in
confidence all Confidential Information received from the other and to ensure
that its employees,

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    agents, contractors, sub-contractors, solicitors and other advisers keep
such Confidential Information confidential.   10.2   Exceptions       A Party
(the “recipient”) may reveal Confidential Information of the other Party (the
“provider”) which the recipient establishes:

  (a)   if required by law to be revealed, provided that the recipient
immediately provides the provider of the requirement and takes lawful steps and
permits the provider to oppose or restrict such disclosure to preserve as far as
possible the confidentiality of the Confidential Information;     (b)   which is
in or enters the public domain other than through a breach of this Agreement; or
    (c)   is revealed to a sub-licensee under a Sub-licence which complies in
all respects with the provisions of this Agreement including, without
limitation, the provisions of Clause 2.3; and     (d)   was known to the
recipient before its disclosure by the provider; or     (e)   is furnished to
the recipient by a Third Party legally entitled to furnish such information and
not under an obligation of confidentiality to the provider.

11.   LICENSOR’S WARRANTIES   11.1   Warranties       The Licensor hereby
represents, warrants and undertakes to the Licensee that:

  (a)   neither the execution of this Agreement, nor the performance by the
Licensor of its obligations will cause it to be in breach of any agreement to
which it is a party or is subject;     (b)   except as may otherwise be
expressly notified to the Licensee in writing, the Licensor has and for the
duration of this Agreement will continue to have full right and title to the
Existing Rights;     (c)   the Licensor is entitled to make all Patent
Applications which it has made, and the Licensor has not made knowing use of any
intellectual property or other rights of any Third Party in the making of the
Patent Applications;     (d)   all Patent Applications filed by the Licensor at
the date of this Agreement have to the best of the knowledge of the Licensor
been made in the prescribed form and in the prescribed manner;

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  (e)   the Existing Rights include or will include all technology owned by or
registered in the name of the Licensor or to which the Licensor is beneficially
entitled in or relating to the Field and possessed, invented, developed or
acquired by or for the Centre; and     (f)   all Inventions, Information,
Know-how and Improvements comprised in the Existing Rights and supplied to the
Licensee by the Licensor will be to the best of the knowledge and belief of the
Licensor true, accurate, reliable and up-to-date.

11.2   Indemnity       The Licensor will indemnify the Licensee (including its
employees, agents and representatives) throughout the Term against all legal
liability, and against the costs of any claims or actions arising under this
Agreement to the extent that that liability is directly caused by negligent acts
or by omissions of the Licensor in the carrying out of its obligations under
this Agreement or is caused by a breach of any warranty or representation given
by the Licensor under this Agreement.   12.   FAILURE TO GRANT OR SUBSEQUENT
REVOCATION OF PATENT   12.1   Royalties to be Reduced       If as a result of
the refusal to grant any Patent Application or the subsequent invalidity,
revocation or expiration of any Patent in any part of the Territory, the
profitability of the Licensee or any of the Licensee’s sub-licensees in that
part of the Territory is significantly and materially adversely affected with
regard to the manufacture, use and sale of Product: [****].

12.2   Reduction of Royalty Guarantee       If the Royalty is reduced under
Clause 12.1, there will be a corresponding reduction in the amount required to
be paid by the Licensee to the Licensor under Clause 4.1 and Clause 4.1 will be
read accordingly.

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13.   PATENT INFRINGEMENT   13.1   Licensee to take Infringement Action      
The Licensor appoints and constitutes the Licensee its agent and attorney during
the Term, to assert from time to time in the name of and for the account of the
Licensor but for the benefit of and at the expense of the Licensee whatever
claims and rights the Licensor may have arising from any actual or apparent
infringement of any Patent, Patent Application, Project Patent, Project
Application or unauthorised use of any Project Results or Invention,
Information, Know-how or Improvement, and the Licensee will promptly assert and
enforce all such claims and rights and institute and prosecute an action against
such infringement.   13.2   Licensee to Notify Licensor       In the event the
Licensee asserts a claim or institutes an action as a result of an actual or
apparent infringement of any Patent, Patent Application, Project Patent, Project
Application or unauthorised use of any Project Results, Invention, Information,
Know-how or Improvement, the Licensee will immediately notify the Licensor.  
13.3   Licensor to Assist Licensee       The Licensor will, if required by the
Licensee and if necessary for the purposes of Clause 13.1, lend its name and
will otherwise do all acts and things the Licensee may reasonably require to
assist the Licensee in performing its obligations under Clause 13.1. Without
limiting the preceding sentence, the Licensor will execute all documents and do
all things reasonably necessary to aid and co-operate in the prosecution of any
action brought by the Licensee pursuant to Clause 13.1.   13.4   Licensee to
Indemnify Licensor       The Licensee will keep the Licensor indemnified from
and against all loss costs and damage suffered or incurred by the Licensor
arising out of the Licensee exercising its powers and performing its obligations
under this Clause 13.   13.5   Proceeds       The proceeds from any judgement or
settlement made by the Licensee in any action brought by it pursuant to Clause
13.1 will be used first to reimburse the Licensee’s costs and expenses incurred
in the action, second, to reimburse the Licensor for all expenses incurred by it
in assisting the Licensee in prosecuting such action and the remainder shall be
the Licensee’s.

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14.   TERMINATION   14.1   Termination by Licensor       The Licensor may at any
time, immediately terminate this Agreement upon the happening of any of the
following events:

  (a)   If an order is made or a resolution passed for the winding up or the
dissolution without winding up of the Licensee, provided always that default
shall not be deemed to have occurred where the winding up is for the purpose of
reconstruction or amalgamation and the scheme for reconstruction or amalgamation
has the Licensor’s prior written consent (which consent shall not be
unreasonably withheld);     (b)   If without the Licensor’s prior written
consent the Licensee enters into an arrangement reconstruction or composition
with its creditors or any of them;     (c)   if a receiver is appointed to the
Licensee;     (d)   if pursuant to the provisions of the Corporations Law the
Licensee is placed under voluntary administration, official management or an
inspector is appointed to investigate the affairs of the Licensee;     (e)   if
without the Licensor’s prior written consent (which consent shall not be
unreasonably withheld) the Licensee assigns, transfers or parts with possession
of any material undertaking or assets to a person who is not an Affiliate of the
Licensee, otherwise than in the ordinary course of business of the Licensee;    
(f)   if default is made by the Licensee in payment of a Royalty, and such
default is not remedied within thirty (30) days after notice specifying such
default and requiring the Licensee to remedy the same has been given by the
Licensor to the Licensee; or     (g)   if default is made by the Licensee in
performance or observance of any material provision of this Agreement other than
a default referred to in paragraph (f) of this Clause 14.1 and where such
default is capable of remedy such default is not remedied within thirty
(30) days after notice specifying such default and requiring the Licensee to
remedy the same has been given by the Licensor or the Licensee.

14.2   Termination by Licensee       The Licensee may at any time terminate this
Agreement by notice if material default is made by the Licensor in the
performance or observance of any provision of this Agreement, and where such
default is capable of remedy such default is not remedied within thirty
(30) days after notice specifying such default and requiring the Licensor to
remedy the same has been given by the Licensee to the Licensor.

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15.   EFFECTS OF TERMINATION   15.1   Effects of Termination       Upon
termination of this Agreement for any reason whatsoever:

  (a)   each Party will return to the other Party all of the second mentioned
Party’s Confidential Information in the possession or under the control, or in
the possession or under the control of the servants or agents of the first
mentioned Party;     (b)   subject to paragraph (c) of this Clause 15.1 neither
Party will have any further rights in relation to the other Party’s Confidential
Information whether under common or other law, statute or otherwise and, each
Party will at its own expense execute and deliver to the other Party such
instructions and take all other action as the other Party deems reasonably
necessary to ensure the termination of any such rights, and to vest every
interest in the Confidential Information in the Party owning that Confidential
Information;     (c)   any Sub-license will remain in full force and effect
provided the sub-licensee is not in breach of the sub-license and performs all
actions required by the Licensor to effect a novation of the Sub-license to the
Licensor;     (d)   Clauses 3.8, 9.2, 10, 15.2 and this Clause 15.1 will
continue to bind the Parties;     (e)   Clause 3 will continue to bind the
Parties until the Licensor is satisfied that all Royalties payable under this
Agreement are paid.

15.2   Accrued Rights       The termination of this Agreement will not affect
any right of action which may have accrued to either Party in respect of any
breach prior to the date of such termination.   16.   GENERAL   16.1   Waiver  
    Any waiver or other indulgence by either Party in respect of any obligation
of the other Party under this Agreement will operate only if in writing and will
apply only to the specified instance, and will not constitute a waiver of or an
indulgence in respect of any other right or obligation under this Agreement.  
16.2   Entire Agreement       This Agreement constitutes the whole and entire
agreement between the Parties and replaces all previous representations,
understandings or arrangements given or made by the Parties, whether oral or in
writing.

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16.3   Assignment

  (a)   Subject to Clauses 16.3(b) and 16.3(c), neither Party will assign all or
any of its rights under this Agreement without the prior written consent of the
other Party, which consent must not he unreasonably withheld.     (b)   The
Licensee may assign all or any of its rights and obligations under this
Agreement to an Affiliate (other than SCS KK) without the prior consent of the
Licensor.     (c)   The Licensee may assign all or any of its rights and
obligations under this Agreement to SCS KK with the prior written consent of the
Licensor which consent must not be unreasonably withheld.

16.4   Applicable Law       This Agreement is governed by and to be construed
according to the laws of the State of Victoria, Australia and the Parties submit
to the jurisdiction of that State.   16.5   Amendments       This Agreement may
not be varied except in writing signed by the Parties.   16.6   Severability    
  If any provision of this Agreement is held by a court to be unlawful, invalid,
unenforceable or in conflict with any rule of law, statute, ordinance or
regulation, the validity and enforceability of the remaining provisions will not
be thereby affected.   16.7   Notices       Any notice or other communication to
be given under this Agreement:

  (a)   will be in writing;     (b)   may be given by hand, mail or facsimile;  
  (c)   will be given to the address of the recipient which is set out below
unless the recipient notifies the sender of another address to which notices or
communications are to be given:

     
Licensor:
  Edinburgh Research and Innovation Limited
University of Edinburgh
 
   
Address:
  1-7 Roxburgh Street
Edinburgh EH8 9TA
United Kingdom
 
   
Facsimile:
  (31) 651 4020

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Licensee:
  Stem Cell Sciences Limited
 
   
Address:
  1st Floor
Riddel Parade
Elsternwick
Victoria 3185
Australia
 
   
Facsimile:
  (03) 347 3804

  (d)   if given by hand, will be deemed to have been given on the day it was so
delivered;     (e)   if given by mail, will be deemed to have been given seven
clear business days after being sent by pre-paid mail; and     (f)   if given by
facsimile, will be deemed to have been given on the day on which the facsimile
is sent and the sender’s machine records that the transmission has been received
by the recipient’s facsimile machine and, if a hard copy of the relevant notice
is sent to the recipient by pre-paid mail within 24 hours of a successful
transmission report by the sender’s facsimile machine.

16.8   Further Agreements       Each Party shall execute such agreements, deeds
and documents and do or cause to be executed or done all such acts and things as
than be necessary to give effect to this Agreement.   16.9   Changes       All
stamp duties and governmental charges arising out of or incidental to this
Agreement shall be the responsibility of and payable by the Licensee.

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