exv10w13



 




Exhibit 10.13




EXCLUSIVE LICENSE AGREEMENT (ACT IP)




This Exclusive License Agreement (“Agreement”) is made and entered into this 14th
day of May, 2004 (the “Effective Date”), by and between Advanced Cell Technology, Inc., a Delaware
corporation with offices located at One Innovation Drive, Worcester, Massachusetts 01605
(“LICENSOR”), and PacGen Cellco, LLC, a California limited liability company with offices located
at 157 Surfview Drive, Pacific Palisades, CA 90272 (“LICENSEE”) (LICENSOR and LICENSEE sometimes
hereinafter referred to individually as a “Party” and collectively as the “Parties”).



WITNESSETH




WHEREAS, LICENSOR owns or has licensed with sublicenseable interest the PATENT RIGHTS (as
defined below) and KNOW-HOW (as defined below); and



WHEREAS, LICENSEE desires to obtain an exclusive worldwide license under LICENSOR’s rights in
such technology in the FIELD; and



WHEREAS, LICENSOR is willing to grant such a license to LICENSEE upon the terms and conditions
set forth below; and



NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein,
the Parties hereto agree as follows:



ARTICLE 1 — DEFINITIONS




For the purposes of this Agreement, the following words and phrases shall have the following
meanings:



1.1 “AFFILIATE” shall mean, with respect to any PERSON, any other PERSON which directly or
indirectly controls, is controlled by, or is under common control with, such PERSON. A PERSON
shall be regarded as in control of another PERSON if it owns, or directly or indirectly controls,
at least fifty percent (50%) of the voting stock or other ownership interest of the other PERSON,
or if it directly or indirectly possesses the power to direct or cause the direction of the
management and policies of the other PERSON by any means whatsoever.



1.2 “FIELD” shall mean (1) the research, development, manufacture and selling of human and
non-human animal cells for commercial research use, including small molecule and other drug testing
and basic research and (2) the manufacture and selling of human cells for therapeutic and
diagnostic use in the treatment of human (a) diabetes and (b) liver diseases; but FIELD shall
exclude applications involving the use of cells in the treatment of tumors where the primary use of
the cells is the destruction or reduction of tumors and does not involve regeneration of tissue or
organ function.


 


 









 





1.3 “KNOW-HOW” means all compositions of matter, techniques and data and other
know-how and technical information including inventions (whether or not patentable),
improvements and developments, practices, methods, concepts, trade secrets, documents, computer
data, computer code, apparatus, clinical and regulatory strategies, test data, analytical and
quality control data, formulation, manufacturing, patent data or descriptions, development
information, drawings, specifications, designs, plans, proposals and technical data and manuals and
all other proprietary information that is owned or controlled by LICENSOR as of the Effective Date
that relates to cloning technology or to any of the subject matter described in or claimed by the
PATENT RIGHTS and is relevant to the FIELD. By way of illustration, but not in limitation, KNOW-HOW
shall include commercial rights to any existing potential research products, including reagents,
developed by LICENSOR in the course of its in-house research. An example of this is the
proprietary culture medium developed by LICENSOR in the course of the development of LICENSOR’s
proprietary ooplasmic transfer technology.



1.4 “LICENSED PROCESS” means any process or method, the research, development, use, practice,
sale, offer for sale, import or export of which cannot be performed without (i) infringing, in
whole or in part, one or more VALID CLAIMS of the PATENT RIGHTS, or (ii) using or incorporating
some portion of the LICENSED TECHNOLOGY.



1.5 “LICENSED PRODUCT” means any product that cannot be developed, manufactured, used,
imported, exported, or sold without (i) infringing, in whole or in part, one or more VALID CLAIMS
of the PATENT RIGHTS, or (ii) using or incorporating some portion of the LICENSED TECHNOLOGY.



1.6 “LICENSED SERVICES” means any service, the developing, using, performing, selling,
offering for sale, importing or exporting of which by LICENSEE would, but for the licenses granted
to LICENSEE in Article 2 of this Agreement, infringe a VALID CLAIM of the PATENT RIGHTS in
the country in which any such service is so developed, used, performed, sold, offered for sale,
imported or exported by LICENSEE.



1.7 “LICENSED TECHNOLOGY” shall mean, collectively, the licensed PATENT RIGHTS and licensed
KNOW-HOW.



1.8 “NET SALES” shall mean the amount billed or invoiced by LICENSEE for the sale or provision
of LICENSED PRODUCTS or LICENSED PROCESSES or LICENSED SERVICES less:




	 	a)	 	discounts, credits, allowances and rebates allowed;
	 
	 	b)	 	sales, tariff duties, use and other taxes or governmental
charges directly imposed with reference to particular sales;
	 
	 	c)	 	special packaging, transportation and insurance costs incurred
and directly related to the sale of LICENSED PRODUCTS;
	 
	 	d)	 	amounts allowed or credited on returns; and
	 
	 	e)	 	uncollected accounts.




 


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1.9 “NEURONAL & HEART FIELD OPTION” means an option described in Section 15.18 hereof
for LICENSEE to negotiate terms for license to the LICENSED TECHNOLOGY for the field of diseases
related to heart or neurodegenerative diseases



1.10 “PATENT RIGHTS” means (a) the patent applications and patents identified on Exhibit
A attached hereto and any patents that issue on said applications and (b) any divisions,
continuations, extensions, reissues or reexaminations of any of the patents identified in the
foregoing clause (a). The Parties agree that Exhibit A may be revised from time to time
after the Effective Date to reflect changes thereto that result from the course of patent
prosecution.



1.11 “PERSON” shall mean an individual, corporation, partnership, limited liability company,
trust, business trust, association, joint stock company, joint venture, pool, syndicate, sole
proprietorship, unincorporated organization, governmental authority or any other form of entity not
specifically listed herein.




1.12 “TERM” has the meaning set forth in Section 9.1.




1.13 “TERRITORY” means the entire world.



1.14 “VALID CLAIM” means a claim of any issued and unexpired patent within the PATENT RIGHTS
which has not lapsed, become abandoned or been held permanently revoked, invalid, or unenforceable
by a decision of a court or administrative or government authority or agency of competent
jurisdiction from which no appeal can be or has been taken within the time allowed for such appeal,
or a claim of a pending patent application included within the Licensed PATENT RIGHTS, which claim
was filed in good faith and has not been abandoned or finally disallowed without the possibility of
appeal or refiling of such application.




Additional terms may be defined throughout this Agreement.



ARTICLE 2 — GRANT




2.1 LICENSOR hereby grants to LICENSEE, and LICENSEE hereby accepts, subject to the terms and
conditions hereof, a royalty bearing, exclusive license in the TERRITORY in the FIELD and under the
LICENSED TECHNOLOGY to (a) research, develop, make, have made, use, sell, offer for sale, import
and export LICENSED PRODUCTS, (b) research, develop, use, practice, sell, offer for sale, import
and export LICENSED PROCESSES and (c) develop, use, perform, sell, offer for sale, import and
export LICENSED SERVICES. By way of example, but not in limitation, LICENSEE shall have the right
to use LICENSED TECHNOLOGY within the FIELD to produce mammalian embryonic stem (ES) cells and to
produce from those mammalian embryonic cells, differentiated cells for human therapeutic purposes
or for commercial research purposes, including drug screening assays, and to produce
pluripotent cells including ES cells, differentiated human cells for human diagnostic and
therapeutic purposes and/or for commercial research purposes, including drug screening assays.


 


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2.2 LICENSEE shall have the right to sublicense the rights granted in Section 2.1 to
third parties in connection with contracting with such third parties to (a) provide LICENSED
PRODUCT marketing and distribution services to LICENSEE on behalf of LICENSEE, (b) provide LICENSED
SERVICES marketing services to LICENSEE on behalf of LICENSEE or (c) manufacture for LICENSEE
LICENSED PRODUCTS for sale by LICENSEE or a third party pursuant to the foregoing clause (a).



2.3 LICENSEE shall have the right to grant sublicenses beyond the scope of those described in
Subsections 2.2 (a), (b), and (c) without the express prior written approval of LICENSOR,
however, LICENSOR shall be given at least 30 days prior written notice of an intent to sublicense
and at least 30 days to comment on the text of the proposed sublicense agreement. In any case,
such sublicenses shall meet the following conditions:




	 	a)	 	the sublicensee shall not have the right to grant further
sublicenses;
	 
	 	b)	 	the sublicense shall not be assignable without prior written
approval by LICENSEE and LICENSOR; and
	 
	 	c)	 	the sublicense shall include fair consideration.





2.4 Within thirty (30) business days of the Effective Date, LICENSOR shall provide and
transfer to LICENSEE, in writing where practicable, all information and data relating to the
LICENSED TECHNOLOGY as may be reasonably necessary and requested to allow LICENSEE to exploit the
licenses granted hereunder. LICENSOR shall work with LICENSEE in good faith to provide the
necessary training for up to a total of 60 days, at LICENSOR’s facilities, necessary to allow
LICENSEE to utilize the LICENSED TECHNOLOGY. LICENSEE shall pay to LICENSOR all reasonable and
customary expenses other than normal operating expenses incurred by LICENSOR in providing such
training and technology transfer, including but not limited to fees incurred to request documents
from patent counsel or the United States Patent and Trademark Office.



2.5 Notwithstanding anything stated herein, nothing in this Agreement shall be construed as
preventing LICENSOR from practicing the LICENSED TECHNOLOGY within the FIELD for non-commercial
in-house research purposes.



2.6 Notwithstanding anything stated herein, nothing in this Agreement shall be construed as
preventing LICENSOR from practicing the LICENSED TECHNOLOGY within the FIELD for non-commercial
in-house research purposes. In the event that LICENSOR requests that LICENSEE deliver to LICENSOR
the LICENSED TECHNOLOGY or LICENSED PRODUCTS in the FIELD for research purposes, LICENSEE shall
make the LICENSED TECHNOLOGY or LICENSED PRODUCTS available to LICENSOR on commercially reasonable
terms. In the event LICENSOR requires the use of collaborators in its research,
LICENSEE shall also make such LICENSED TECHNOLOGY OR LICENSED PRODUCTS available to such
collaborator if LICENSEE, in its sole but reasonable discretion is satisfied that providing such
items to a collaborator will not endanger its exclusive commercial control of such items or result
in their use by a competitor.


 


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ARTICLE 3 — LICENSEE OBLIGATIONS

RELATING TO COMMERCIALIZATION




3.1 LICENSEE shall use its commercially reasonable and diligent efforts to bring one or more
LICENSED PRODUCTS, LICENSED PROCESSES or LICENSED SERVICES to market through an active and diligent
program for exploitation of the PATENT RIGHTS and to continue active, diligent marketing efforts
for one or more LICENSED PRODUCTS, LICENSED PROCESSES or LICENSED SERVICES throughout the TERM of
this Agreement.



3.2 LICENSEE shall maintain minimum R&D requirements to maintain exclusivity under this
Agreement. Commencing 30 months following the Effective Date hereof and until the launch of the
first human cell-based therapeutic product, LICENSEE shall be required to invest a minimum of
$400,000 per year in research and development of the FIELD covered by this Agreement or other
agreements with LICENSOR affecting the FIELD in order to maintain the exclusive license rights
granted hereunder. In the event LICENSEE fails to perform this minimum expenditure in R&D in the
FIELD during the course of a calendar year during the above-mentioned period, the license under
this Agreement shall become nonexclusive and such minimum expenditure for research and development
shall be reduced to $200,000 per year.



3.3 LICENSEE shall maintain complete and accurate records of LICENSED PRODUCTS, LICENSED
PROCESSES and LICENSED SERVICES that are made, used, sold or performed by LICENSEE under this
Agreement. Not later than April 1st of each year following the Effective Date, LICENSEE
shall furnish LICENSOR with a summary report on the progress of its efforts during the prior year
to develop and commercialize LICENSED PRODUCTS, LICENSED PROCESSES or LICENSED SERVICES, including
without limitation research and development efforts, efforts to obtain regulatory approval,
marketing efforts (including LICENSED PRODUCTS, LICENSED PROCESSES and LICENSED SERVICES made,
used, sold or performed) and sales figures, provided that such reports shall be deemed Confidential
Information (as defined in Section 10.1 herein) subject to the provisions of Article
10 of this Agreement.



3.4 In the event that LICENSOR determines that LICENSEE has not fulfilled its obligations
under this Article 3, LICENSOR shall furnish LICENSEE with written notice of such
determination. Within thirty (30) days after receipt of such notice, LICENSEE shall (i) fulfill
the relevant obligation, (ii) negotiate with LICENSOR a mutually acceptable schedule of revised
obligations, or (3) if LICENSEE disputes the alleged failure to fulfill its obligations, it
shall promptly seek appropriate judicial determination of the matter and diligently pursue such
action to a final determination with all appropriate speed; failing which, LICENSOR shall have the
right, immediately upon written notice to LICENSEE, to terminate this Agreement as provided in
Section 9.2 hereof.


 


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ARTICLE 4 — CONSIDERATION




4.1 Initial Payment. In partial consideration of the license granted to LICENSEE from
LICENSOR in Article 2 of this Agreement, LICENSEE agrees to pay as a “License Fee” to
LICENSOR $225,000 in a convertible promissory note in the form attached hereto as Exhibit
B.



4.2 Royalties.




	 	a)	 	In partial consideration of the license in the FIELD granted by
LICENSOR to LICENSEE in Article 2 of this Agreement, LICENSEE agrees to
pay to LICENSOR an earned royalty equal to the following percentages of the NET
SALES in the FIELD made, used, sold, imported, exported or performed by
LICENSEE in the TERRITORY.






(i) 6% on therapeutics,

(ii) 3% on diagnostics, and

(iii) 10% on commercial research use.




	 	b)	 	No multiple royalties shall be payable because any LICENSED
PRODUCT, LICENSED PROCESS or LICENSED SERVICE in the FIELD, its manufacture,
use, lease, sale or performance are or shall be covered by more than one patent
or patent application within the PATENT RIGHTS.
	 
	 	c)	 	The obligation of LICENSEE to pay royalties or Sublicense
Income (as defined in Section 4.5 herein) hereunder shall terminate for
each country in the TERRITORY concurrently with the expiration or termination
of the last applicable VALID CLAIM within the PATENT RIGHTS in such country in
which the LICENSED PRODUCT, LICENSED PROCESS or LICENSED SERVICE is, (as
applicable), used, practiced, performed, sold, offered for sale, imported,
exported or manufactured.





4.3 Minimum Royalties. Within 2 business days from the Effective Date hereof,
LICENSEE shall pay to LICENSOR a minimum royalty fee of $175,000 in cash or by wire transfer. In
addition, commencing 12 months following the Effective Date, LICENSEE shall pay to LICENSOR
additional minimum royalty fees equal to the difference between total Royalties actually paid in
the preceding 12 months and the following minimum amounts:




At 12 months, $10,000

At 24 months, $25,000

At 36 months, $40,000

Annually thereafter, $50,000.


 


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4.4 Stacking Royalties. With the exception of minimum royalties due to LICENSOR, if
LICENSEE, its Affiliates or sublicensees are required to pay royalties relating to any additional
intellectual property from LICENSOR in order to exercise its rights hereunder to make, have made,
use or sell any Product, then LICENSEE shall have the right to credit a pro-rated portion of such
royalty payments against the royalties owing to LICENSOR under Section 4.2 of this
Agreement with respect to sales of such Product such that in no event shall the total of royalty
payments that are due to LICENSOR in such royalty period exceed the payments payable under
Subsection 4.2(a) above. Prorations shall be made in the same manner as specified for combination
products under Section 4.9 below.



4.5 Sublicense Income. LICENSEE shall pay to LICENSOR a total of Thirty Three percent
(33%) of all Sublicense Income. “Sublicense Income” means consideration that LICENSEE receives for
the sublicense of rights that are granted LICENSEE under Article 2, including without
limitation license fees, milestone payments, equity payments, up front fees, success fees, and
license maintenance fees.



4.6 Stacking Sublicense Income. The fees payable on Sublicense Income under
Section 4.5 above shall be in addition to any royalties specified elsewhere in this
Article 4, but if LICENSEE is obligated to pay or has paid to LICENSOR similar fees on
Sublicense Income under another license agreement with respect to the FIELD, then LICENSEE shall
have the right to pro-rate such fees against the fees owing to LICENSOR under this Agreement such
that in no event shall the total of fees due from LICENSEE, as a result of Sublicense Income, to
LICENSOR exceed the payments payable under Section 4.5. Pro-rating of payments shall be
made in the ratio of the minimum royalties payable under this Agreement to the minimum royalties
payable under any other agreement covered hereby under which fees on Sublicense Income are owed.



4.7 Milestone Payments. Upon the launch of a commercial therapeutic product based on
the LICENSED TECHNOLOGY, LICENSEE shall pay additional Milestone Payments totaling $1,750,000 on
the following schedule:




$250,000 within 30 days following the launch of the first commercial Product;

$500,000 upon reaching $5,000,000 in sales from one or both Product Fields;

$1,000,000 upon reaching $10,000,000 in sales from one or both Product Fields.



4.8 Stacking Milestone Payments. The milestone payments shall be in addition to any
royalties specified elsewhere in this Article 4, but shall not apply to diagnostic,
commercial research, or any other non-therapeutic uses. If LICENSEE is obligated to pay or has
paid to LICENSOR similar Milestone Payments under another license agreement with respect to the
FIELD, then LICENSEE shall have the right to pro-rate such Milestone Payments against the



 


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Milestone Payments owing to LICENSOR under this Agreement such that in no event shall the
total of all Milestone Payments due from LICENSEE to LICENSOR exceed the amounts stated in
Section 4.7. Pro-rating of payments shall be made in the ratio of the minimum royalties
payable under this Agreement to the minimum royalties payable under any other agreement covered
hereby under which Milestone Payments are owed.



4.9 Combination Product. In the event a Product is sold in a combination product with
other devices or biologically active components, NET SALES, for purposes of royalty payments on
the combination product, shall be calculated by multiplying the NET SALES of that combination by
the fraction A/B, where A is the gross selling price of the Product sold separately and B is the
gross selling price of the combination product. In the event that no such separate sales are made
by LICENSEE, its Affiliates or permitted sublicensees, NET SALES for royalty determination shall be
calculated by multiplying NET SALES of the combination by the fraction C/(C+D), where C is the
fully allocated cost of the Product and D is the fully allocated cost of such other biologically
active components.



4.10 Payments in U.S. Currency. All payments due under this Agreement shall be paid
in cash to LICENSOR and all payments shall be made in United States currency. Conversion of
foreign currency to U.S. dollars shall be made at the conversion rate reported in The Wall
Street Journal on the last working day of the calendar quarter to which the payment relates.



4.11 Taxes. Subject to the limits of Section 1.8 hereof, all payments due
hereunder shall be paid in full without deduction of taxes or other fees which may be imposed by
any government and which shall be paid by LICENSEE; provided, however, that any withholding tax
required to be withheld by LICENSEE on royalty payments under the laws of any country in the
TERRITORY on behalf of LICENSOR will be timely paid by LICENSEE to the appropriate governmental
authority, and LICENSEE will furnish LICENSOR with proof of payment of such tax. Any such tax
actually withheld may be deducted from royalty payments due to LICENSOR under this Agreement. If
at any time legal restrictions prevent the prompt remittance of part or all of any payments owed by
LICENSEE to LICENSOR hereunder with respect to any country in the TERRITORY, payment shall be made
through any lawful means or methods that may be available, and as LICENSEE shall reasonably
determine is appropriate.



4.12 Overdue Payments. Any payments to be made by LICENSEE hereunder that are not
paid on or before the date such payments are due under this Agreement shall bear interest, to the
extent permitted by law, at two percentage points above the Prime Rate of interest as reported in
The Wall Street Journal on the date payment is due, with interest calculated based on the
number of days that payment is delinquent.


 


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ARTICLE 5 — REPORTS AND RECORDS




5.1 LICENSEE shall keep full, true and accurate books of account containing all particulars
that may be necessary for the purpose of showing the amounts payable to LICENSOR hereunder and to
enable the reports provided under Section 5.2 to be verified. Said books of account shall
be kept at LICENSEE’s principal place of business. Said books and the supporting data shall be
open upon reasonable advance notice (but not less than five (5) business days notice and no more
frequently than once per calendar year) for three (3) years following the end of the calendar year
to which they pertain, to the inspection of LICENSOR or its agents for the purpose of verifying
LICENSEE’s royalty and Sublicense Income statement or compliance in other respects with this
Agreement. If any such audit determines an error in any royalty or Sublicense Income payment,
LICENSEE shall pay to LICENSOR, within thirty (30) days of the discovery of the error, (a) all
deficiencies in royalty or Sublicense Income payments, (b) interest on such deficiencies from the
date such royalty or Sublicense Income payment was due until the date paid at the rate set forth in
Section 4.10 above, and (c) if such error is in excess of five percent (5%) of any royalty
or Sublicense Income payment, the cost of the audit. In all other cases, the costs of the audit
shall be paid for by LICENSOR. All information disclosed pursuant to an audit shall be treated as
Confidential Information (as defined in Section 10.1 herein) and shall not be disclosed to
any third party or used for any purpose other than to determine the correctness of LICENSEE’s
royalty and Sublicense Income statement or compliance in other respects with this Agreement.



5.2 After the first commercial sale of a LICENSED PRODUCT, LICENSED PROCESS, or LICENSED
SERVICE, LICENSEE, within forty-five (45) days after March 31, June 30, September 30 and December
31 of each year, shall deliver to LICENSOR a true and accurate report, giving such particulars of
the business conducted by LICENSEE and its permitted sublicensees during the preceding three-month
period under this Agreement as shall be pertinent to a royalty and Sublicense Income accounting
hereunder. Without limiting the generality of the foregoing, these reports shall include at least
the following:




	 	a)	 	the number of LICENSED PRODUCTS manufactured and sold by
LICENSEE and all sublicensees;
	 
	 	b)	 	total billings and the amounts actually received for LICENSED
PRODUCTS sold by LICENSEE and all sublicensees;
	 
	 	c)	 	an accounting for all LICENSED PROCESSES or LICENSED SERVICES
used in the provision of services to others or sold by LICENSEE;
	 
	 	d)	 	the deductions applicable as provided in Section 1.8;
and
	 
	 	e)	 	the names and addresses of all parties making LICENSED PRODUCTS
on behalf of LICENSEE.





The reports shall provide the above-identified information by product, process, or service
type.


 


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5.3 With each such report submitted, LICENSEE shall pay to LICENSOR the royalties and
Sublicense Income due and payable for such three-month period. If no royalties or Sublicense
Income shall be due, LICENSEE shall so report.



ARTICLE 6 — PATENT PROSECUTION




6.1 LICENSOR shall be solely responsible for the continued prosecution of pending patent
applications included in the PATENT RIGHTS and the issuance of such applications after allowance.
The prosecution, filing and maintenance of all patents and applications shall be the primary
responsibility of LICENSOR. LICENSEE agrees to cooperate fully with LICENSOR, as requested by
LICENSOR and at LICENSOR’s expense, in the preparation, filing, prosecution, and maintenance of the
patent applications and patents included in the PATENT RIGHTS. With respect to Australia, Canada,
Europe, Mexico, Japan and Israel, LICENSEE shall pay to LICENSOR on or before the due date one half
(1/2) of any future annuity and maintenance fees with respect to filings stemming from applications
10/227,282, PCT/US02/26945 and 60/539,796, provided LICENSOR notifies LICENSEE of the amount of
such payments due at least 30 days prior to their due date.



ARTICLE 7 — PROSECUTION OF INFRINGERS

AND DEFENSE OF PATENT RIGHTS




The Parties agree to notify each other in writing of any actual or threatened infringement by
a third party of the PATENT RIGHTS or of any claim of invalidity, unenforceability, or
non-infringement of the PATENT RIGHTS. LICENSOR shall have the sole responsibility to prosecute or
defend such claims, as applicable. LICENSEE shall, if requested, provide reasonable assistance to
LICENSOR in connection with the prosecution or defense of such claims.



ARTICLE 8 — INDEMNIFICATION




8.1 Indemnification of the LICENSOR. LICENSEE shall be responsible for and shall
indemnify, defend, and hold harmless LICENSOR, its agents, attorneys, representatives, third party
beneficiaries and their respective heirs, executors, successors and assigns (collectively, the
“LICENSOR Indemnitees”) from and against all liabilities of any kind whatsoever, including legal
expenses and reasonable attorneys’ fees, incurred or imposed upon any of the LICENSOR Indemnitees
in connection with or as a consequence of any claims (including third party claims), suits,
actions, demands or judgments arising out of the death of or injury to any person or persons or out
of any damage to property resulting from the development, production, manufacture, sale, use,
performance, rendering, consumption or advertisement of the



 


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LICENSED PRODUCT(s), LICENSED PROCESS(es), and/or LICENSED SERVICE(s), or arising from any
obligation, act or omission performed or failed to be performed hereunder, or from a breach of any
representation or warranty of LICENSEE hereunder unless and to the extent that such liability
arises solely from any action of LICENSOR or any of its Affiliates. If the exercise of LICENSEE’s
rights under this Agreement in any country in the TERRITORY is the subject of a bona fide claim by
a third party, filed in a court of competent jurisdiction after the date hereof, that the exercise
of such rights infringes or conflicts with any intellectual property rights of such third party (a
“Third Party Infringement Claim”), then LICENSEE shall not have any of the rights granted herein in
such country and shall have no obligation to pay LICENSOR any further payments under Article
4 of this Agreement with respect to any country of the TERRITORY until such claim is resolved
by proper adjudication or settlement permitting LICENSEE to exercise LICENSEE’s rights under this
Agreement in the applicable country of the TERRITORY. Notwithstanding anything herein to the
contrary, LICENSOR covenants that it will not (a) assert or bring any suit, action, claim or other
proceeding against LICENSEE based on, in whole or in part, LICENSEE’s exercise of LICENSEE’s
rights, in accordance with the terms and conditions of this Agreement, with respect to the LICENSED
TECHNOLOGY and/or (b) join in any third party suit, action, claim or other proceeding against
LICENSEE based on, in whole or in part, any intellectual property rights (including without
limitation, patent rights and/or know how) owned by the applicable third party, so long as LICENSEE
is not in violation of this Agreement.



8.2 Indemnification of the LICENSEE. LICENSOR shall be responsible for and shall
indemnify, defend, and hold harmless LICENSEE and the officers, directors, shareholders, employees,
agents, attorneys, representatives, and Affiliates, and their respective heirs, executors,
successors and assigns. (the “LICENSEE Indemnitees”) from and against all liabilities of any kind
whatsoever, including legal expenses and reasonable attorneys’ fees, incurred or imposed upon any
of the LICENSEE Indemnitees in connection with or as a consequence of any claims (including third
party claims), suits, actions, demands or judgments arising out of, directly or indirectly, or in
any way relating to: (a) any breach by LICENSOR of any representation, warranty, covenant or
obligation set forth in this Agreement; or (b) arising from LICENSOR’s ownership, management,
control, use or disposition of the LICENSED TECHNOLOGY unless and to the extent that such liability
arises solely from any action of LICENSEE or any of its Affiliates after the Effective Date.



8.3 Demands for Third Party Claims. Each indemnified Party hereunder (an “Indemnified
Party”) agrees that promptly upon its discovery of facts giving rise to a claim for indemnity under
this Agreement, including the receipt of any demand, assertion, claim, action or proceeding,
judicial or otherwise, by any third party (being referred to herein as a “Claim”), with respect to
any matter as to which it claims to be entitled to indemnity under the provisions of this
Agreement, it will give prompt notice thereof in writing to the Indemnifying Party (the
“Indemnifying Party”), together with a statement of such information respecting any of the
foregoing as it shall have. Such notice shall include a formal demand for indemnification under
this Agreement.


 


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8.4 Right to Contest and Defend. The Indemnifying Party shall contest and defend, at
its sole cost and expense, by all appropriate legal proceedings any Claim with respect to which it
is called upon to indemnify the Indemnified Party under the provisions of this Agreement; provided,
that notice of the intention to so contest shall be delivered by the Indemnifying Party to the
Indemnified Party as soon as reasonably possible after (but no later than twenty [20] days from)
the date of receipt by the Indemnifying Party of notice by the Indemnified Party of the assertion
of the Claim. Any such contest may be conducted in the name and on behalf of the Indemnifying Party
or the Indemnified Party as may be appropriate. Such contest shall be conducted by reputable
counsel employed by the Indemnifying Party, but the Indemnified Party shall have the right but not
the obligation to participate in such proceedings and to be represented by counsel of its own
choosing at its sole cost and expense. The Indemnifying Party shall have full authority to
determine all action to be taken with respect thereto; provided, however, that the Indemnifying
Party will not have the authority to subject the Indemnified Party to any obligation whatsoever
(whether financial or the imposition of equitable or injunctive relief), other than the performance
of purely ministerial tasks or obligations not involving material expense (for which the
Indemnified Party shall be reimbursed). If the Indemnifying Party does not elect to contest any
such Claim, the Indemnifying Party shall be bound by the result obtained with respect thereto by
the Indemnified Party.



8.5 Cooperation. If requested by the Indemnifying Party, the Indemnified Party agrees
to cooperate with the Indemnifying Party and its counsel in contesting any Claim that the
Indemnifying Party elects to contest or, if appropriate, in making any counterclaim against the
PERSON asserting the Claim, or any cross-complaint against any PERSON, and the Indemnifying Party
will reimburse the Indemnified Party for any expenses incurred by it in so cooperating.



8.6 Right to Participate. The Indemnified Party agrees to afford the Indemnifying
Party and its counsel the opportunity to be present at, and to participate in, conferences with any
PERSON, including governmental authorities, asserting any Claim against the Indemnified Party or
conferences with representatives of or counsel for such PERSON.



8.7 Payment of Damages. The Indemnifying Party shall pay to the Indemnified Party in
immediately available funds any amounts to which the Indemnified Party may become entitled by
reason of the provisions of this Agreement, such payment to be made within five (5) days after any
such amounts are finally determined either by mutual agreement of the Parties hereto or pursuant to
the final non-appealable judgment of a court of competent jurisdiction.



8.8 Independent Indemnities. The Parties acknowledge and agree that each of the
indemnities under Sections 8.1 and 8.2 may be relied upon independently.



8.9 Insurance. LICENSEE and LICENSOR mutually agree to maintain insurance or
self-insurance that is reasonably adequate to fulfill any potential obligation to the Indemnified
Parties. LICENSEE and LICENSOR shall continue to maintain such insurance or self-insurance
during the term of this Agreement and after the expiration or termination of this Agreement
for a period of five (5) years. Each Party shall provide to the other Party, upon request, proof
of any such insurance policy maintained by such Party.


 


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ARTICLE 9 — TERMINATION




9.1 The term of this Agreement (“TERM”) shall commence on the Effective Date and continue
until the expiration of the last VALID CLAIM within the PATENT RIGHTS to expire , unless sooner
terminated as provided in this Article 9; provided that LICENSEE’s obligation to pay
royalties or Sublicense Income on NET SALES in any country will terminate pursuant to
Subsection 4.2(c) (subject to LICENSEE’s obligations under Section 9.4 herein).



9.2 If either Party commits a material breach of a material term of this Agreement (including
any failure to make any payment due under this Agreement), the non-breaching Party shall have the
right to terminate this Agreement effective on thirty (30) days prior written notice to the Party
in breach, unless such breach is cured prior to the expiration of such thirty (30) day period.



9.3 LICENSEE shall have the right to terminate this Agreement at any time on thirty (30) days
prior notice to LICENSOR, and upon payment of all amounts due LICENSOR through the effective date
of the termination.



9.4. Notwithstanding anything herein to the contrary, in the event that this Agreement is
terminated by LICENSOR pursuant to Section 9.2 or by LICENSEE pursuant to Sections 9.2
or 9.3, LICENSEE shall retain a license to rights granted in Article 2 to the extent
reasonably necessary to sell any LICENSED PRODUCTS existing or under production and to perform
LICENSED PROCESSES or LICENSED SERVICES related to such LICENSED PRODUCTS or that are in process,
subject to the terms of this Agreement (including without limitation the obligation to pay
royalties under Article 4), provided that LICENSEE shall complete and sell all such
work-in-progress and inventory within six (6) months after the effective date of termination.



9.5 Upon the expiration of the TERM of this Agreement LICENSEE shall have a fully paid-up,
non-exclusive, irrevocable, royalty free license under the rights granted in Article 2.



9.6 Nothing herein shall be construed to release either Party from any obligation that accrued
prior to expiration or any termination of this Agreement. The following provisions shall survive
any termination or any expiration of the TERM of this Agreement: this Section 9.6 and
Articles/Sections 1, 4, 5, 8, 9.4, 10, 11, 12, 13, 15.1, 15.2, 15.5, 15.6, 15.7, 15.8, 15.10, 15.15
and 15.16, and any other provision which by its nature is intended to survive any such
termination.


 


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ARTICLE 10 — CONFIDENTIALITY AND NON-DISCLOSURE




10.1 Confidential Information; Non-Disclosure. “Confidential Information” shall mean
any technical, business, financial, customer or other information disclosed by one Party (the
“Disclosing Party”) to the other Party (the “Receiving Party”) pursuant to this Agreement which is
marked “Confidential” or “Proprietary,” or which, under all of the given circumstances, ought
reasonably to be treated as confidential information of the Disclosing Party. Such information may
be disclosed in oral, visual or written form (including magnetic, optical or other media). Except
as expressly provided in Section 10.2 below, each Party’s Confidential Information
specifically includes without limitation the respective Party’s business plans and business
practices, the terms of this Agreement, scientific knowledge, research and development or know-how,
processes, inventions, techniques, formulae, products and product plans, business operations,
customer requirements, designs, sketches, photographs, drawings, specifications, reports, studies,
findings, data, plans or other records, biological materials, software, margins, payment terms and
sales forecasts, volumes and activities, designs, computer code, technical information, costs,
pricing, financing, business opportunities, personnel, and information of LICENSOR or LICENSEE
relating to the LICENSED PROCESSES, LICENSED PRODUCTS or LICENSED SERVICES whether or not such
information is marked or identified provided that the Disclosing Party provides notice in writing
reasonably identifying such Confidential Information within 30 days of disclosure. Except to the
extent expressly authorized by this Agreement or by other prior written consent by the Disclosing
Party, the Receiving Party, during the term of this Agreement, and thereafter, shall: (i) treat as
confidential all Confidential Information of the other Party; (ii) use Confidential Information
only for exercising the rights and fulfilling the obligations set forth in this Agreement, (iii)
implement reasonable procedures to prohibit the disclosure, unauthorized duplication, misuse or
removal of the Disclosing Party’s Confidential Information; (iv) not disclose Confidential
Information to any third party, and (v) only disclose the Confidential Information to (a) those of
its employees who have a need to know Confidential Information in order to exercise the rights and
fulfill the obligations set forth in this Agreement and (b) legal and professional advisors and
existing and potential investors and their legal and professional advisors, each of which is bound
by a written agreement (or in the case of attorneys or other professional advisors, formal ethical
duties) requiring such advisors and investors to treat, hold and maintain such Confidential
Information in accordance with the terms and conditions of this Agreement, or (c) recipients of
offering documents in connection with any offering of securities where such disclosure is, in the
opinion of counsel for the Disclosing Party, reasonably required to comply with the investment
disclosure laws of any applicable jurisdiction. Without limiting the foregoing, the Receiving Party
shall protect the Disclosing Party’s Confidential Information using at least the same procedures
and degree of care that it uses to prevent the disclosure of its own confidential information of
like importance, but in no event less than reasonable care.


 


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10.2 Exceptions. The Receiving Party shall have no obligation or liability to the
Disclosing Party with regard to any Confidential Information of the Disclosing Party: (i) that was
publicly known and available at the time it was disclosed or becomes publicly known and
available through no fault, action, or inaction of the Receiving Party; (ii) was known to the
Receiving Party, without restriction, at the time of disclosure as shown by the files of the
Receiving Party in existence at the time of disclosure; (iii) is disclosed with the prior written
approval of the Disclosing Party; (iv) was independently developed by the Receiving Party without
any use of the disclosing party’s Confidential Information, provided, that the Receiving Party can
demonstrate such independent development by documented evidence prepared contemporaneously with
such independent development; (v) is disclosed pursuant to the order or requirement of a court,
administrative agency, or other governmental body, provided that the Receiving Party shall provide
prompt notice thereof and reasonable assistance to the Disclosing Party to enable the Disclosing
Party to seek a protective order or otherwise prevent such disclosure, and provided further that
such disclosure is limited to the extent necessary to comply with such order and the information
shall otherwise be treated as Confidential Information; or (vi) that is provided to the Receiving
Party by an independent third party without violating any confidentiality obligation to the
Disclosing Party.



10.3 Injunctive Relief. LICENSOR and LICENSEE acknowledge and agree that any breach
of the confidentiality obligations imposed by this Article 10 will constitute immediate and
irreparable harm to the Disclosing Party and/or its successors and assigns, which cannot adequately
and fully be compensated by money damages and will warrant, in addition to all other rights and
remedies afforded by law, injunctive relief, specific performance, and/or other equitable relief.
The Disclosing Party’s rights and remedies hereunder are cumulative and not exclusive. The
Disclosing Party shall also be entitled to receive from the Receiving Party the costs of enforcing
this Article 10, including reasonable attorneys’ fees and expenses of litigation.



10.4 Termination. Upon termination or expiration of this Agreement, or upon the
request of the Disclosing Party at any time, the Receiving Party shall promptly return to the
Disclosing Party, at its request, all copies of Confidential Information received from the
Disclosing Party, and shall return or destroy, and document the destruction of, all summaries,
abstracts, extracts, or other documents which contain any Confidential Information of the
Disclosing Party in any form. Notwithstanding the foregoing to the contrary, LICENSEE shall have
no obligation (even upon a request by LICENSOR) to return or destroy any KNOW-HOW (including
tangible embodiments of KNOW-HOW) during the TERM of this Agreement.



10.5 Survival. The obligations of LICENSOR and LICENSEE under this Article 10
shall survive any expiration or termination of this Agreement.



ARTICLE 11 — PAYMENTS, NOTICES, AND OTHER COMMUNICATIONS




Any payment, notice or other communication pursuant to this Agreement shall be in writing and
sent by certified first class mail, postage prepaid, return receipt requested, or by nationally
recognized overnight carrier addressed to the Parties at the following addresses or such other
addresses as such Party furnishes to the other Party in accordance with this paragraph.
Such notices, payments, or other communications shall be effective upon receipt.


 


15









 







In the case of LICENSOR:




Advanced Cell Technology, Inc.

One Innovation Drive

Worcester, MA 01605

Attention: Michael D. West, Ph.D., President




With a copy to:




Pierce Atwood

One Monument Square

Portland, ME 04101

Attention: William L. Worden, Esq.




In the case of LICENSEE:




PacGen Cellco, LLC.

157 Surfview Drive

Pacific Palisades, CA 90272

Attention: Kenneth Aldrich




With a copy to:




Gray Cary Ware & Freidenrich

4365 Executive Drive, Suite 1100

San Diego, CA 92121-2133

Attention: Lisa Haile



ARTICLE 12 — RESPRESENTATIONS AND WARRANTIES OF LICENSOR




As an inducement to LICENSEE to enter into and perform this Agreement, LICENSOR represents and
warrants to LICENSEE as follows:



12.1 Title to LICENSED TECHNOLOGY; Encumbrances. LICENSOR has good and valid title or
valid licenses (with the right of sublicense) to the LICENSED TECHNOLOGY.



12.2 No Violations. The execution, delivery and performance of this Agreement by
LICENSOR and the consummation by LICENSOR of the transactions contemplated hereby does not,: (a)
violate any statute, ordinance, rule or regulation applicable to LICENSOR or by which any of the
LICENSED TECHNOLOGY may be bound; (b) violate any order, judgment or decree of any court or of any
Governmental Authority or regulatory body, agency or authority applicable to LICENSOR or by which
any of the LICENSED TECHNOLOGY may be bound; (c) require any filing by LICENSOR with, or require
LICENSOR to obtain any permit, consent or approval of, or require LICENSOR to give any notice to,
any Governmental Authority or regulatory body, agency or authority; or (d) result in a violation or
breach by LICENSOR of,
conflict with, constitute a default by LICENSOR (or give rise to any right of termination,
cancellation, payment or acceleration) under or result in the creation of any Encumbrance upon any
of the LICENSED TECHNOLOGY.


 


16









 





12.3 Litigation. Except as set forth in Exhibit C, there is no action, suit,
proceeding at law or in equity, arbitration or administrative or other proceeding by or before (or
any investigation by) any governmental or other instrumentality or agency, pending, or threatened,
against or affecting the LICENSED TECHNOLOGY, and LICENSOR does not know of any valid basis for any
such action, proceeding or investigation. To the knowledge of LICENSOR, there are no such suits,
actions, claims, proceedings or investigations pending or threatened, seeking to prevent or
challenge the transactions contemplated by this Agreement.



12.4 Disclosure. Neither these representations and warranties made by LICENSOR
pursuant to this Agreement nor any of the exhibits, schedules or certificates attached hereto or
delivered in accordance with the terms hereof knowingly contains any misstatement of fact or omits
any statement of fact necessary in order to make the statements contained herein and therein not
misleading in light of the circumstances under which they were made.



12.5 Copies of Documents. LICENSOR has caused to be made available for inspection and
copying by LICENSEE and its advisers, true, complete and correct copies of all documents in
LICENSOR’s possession referred to in any schedule attached hereto.



12.6 Broker’s or Finder’s Fees. No agent, broker, person or firm acting on behalf of
LICENSOR is, or will be, entitled to any fee, commission or broker’s or finder’s fees for which the
LICENSEE may be liable in connection with this Agreement or any of the transactions contemplated
hereby.




12.7 LICENSED TECHNOLOGY.




	 	(a)	 	Except as set forth on Exhibit D, LICENSOR, LICENSOR is not
aware of any interference, infringement, misappropriation, or other conflict
with any intellectual property rights of third parties, and LICENSOR has never
received any charge, complaint, claim, demand, or notice alleging any such
interference, infringement, misappropriation, or violation (including any claim
that LICENSOR must license or refrain from using any intellectual property
rights of any third party). To the knowledge of LICENSOR, no third party has
interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any of the LICENSED TECHNOLOGY.
	 
	 	(b)	 	Exhibit A identifies each patent or registration which has been
issued to LICENSOR with respect to any of the LICENSED TECHNOLOGY and
identifies each pending patent application or application for registration
which LICENSOR has made with respect to any of the LICENSED




 


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	 	 	 	TECHNOLOGY. LICENSOR has made available to LICENSEE correct and complete copies
of all such patents, registrations and applications (as amended to-date) in
LICENSOR’s possession and has made available to LICENSEE correct and complete
copies of all other written documentation in LICENSOR’s possession evidencing
ownership and prosecution (if applicable) of each such item.






	 	(c)	 	Exhibit A identifies each item of LICENSED TECHNOLOGY that is
assigned to LICENSOR or that LICENSOR uses pursuant to license, sublicense,
agreement, or permission. LICENSOR has made available to LICENSEE correct and
complete copies of all such licenses, sublicenses, agreements, patent
prosecution files and permissions (as amended to-date) in LICENSOR’s
possession. With respect to each item of LICENSED TECHNOLOGY required to be
identified in Exhibit A and to the knowledge of LICENSOR: (i) the license,
sublicense, agreement, or permission covering the item is legal, valid,
binding, enforceable, and in full force and effect; (ii) the license,
sublicense, agreement, or permission will continue to be legal, valid,
binding, enforceable, and in full force and effect on identical terms
following the consummation of the transactions contemplated hereby; (iii) no
Party to the license, sublicense, agreement, or permission is in breach or
default, and no event has occurred which with notice or lapse of time would
constitute a breach or default or permit termination, modification, or
acceleration thereunder; (iv) no party to the license, sublicense, agreement,
or permission has repudiated any provision thereof; (v) the underlying item of
LICENSED TECHNOLOGY is not subject to any outstanding lien or encumbrance,
injunction, judgment, order, decree, ruling, or charge; (vi) no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand is
pending or is threatened which challenges the legality, validity, or
enforceability of the underlying item of LICENSED TECHNOLOGY; and (vii)
LICENSOR has not granted any sublicense or similar right to the LICENSED
TECHNOLOGY within the FIELD.






12.8 Survival of Representations and Warranties.




	 	(a)	 	Except as otherwise provided herein, notwithstanding any
investigation at any time made by or on behalf of any Party hereto, the
representations and warranties set forth herein and in any certificate
delivered in connection herewith with respect to any of those representations
and warranties will survive the Effective Date until the longer to occur of:
(i) two (2) years or (ii) the expiration of the applicable statutes of
limitation, including all periods of extension and tolling whereupon they will
terminate and expire.




 


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	 	(b)	 	After a representation and warranty has expired, as provided in
Subsection 12.8(a), no claim for claims or costs may be made or
prosecuted by any Person who would have been entitled to claims or costs on the
basis of that representation and warranty prior to its termination and
expiration, provided that no claim presented in writing for claims or costs to
the Person or Persons from which or whom those damages are sought on the basis
of that representation and warranty prior to its termination and expiration
will be affected in any way by that termination and expiration.





12.9 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, LICENSOR, ITS DIRECTORS,
OFFICERS, EMPLOYEES, AND AFFILIATES MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY KIND,
EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR
A PARTICULAR PURPOSE, VALIDITY OF PATENT RIGHTS, ISSUED OR PENDING, AND THE ABSENCE OF LATENT OR
OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE. NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A
REPRESENTATION MADE OR WARRANTY GIVEN BY LICENSOR THAT THE PRACTICE BY LICENSEE OF THE LICENSE
GRANTED HEREUNDER SHALL NOT INFRINGE THE PATENT RIGHTS OF ANY THIRD PARTY.



ARTICLE 13—REPRESENTATIONS AND WARRANTIES OF LICENSEE.





LICENSEE represents and warrants to LICENSOR as follows:



13.1 Existence and Good Standing: Power and Authority. LICENSEE is a limited liability
company duly organized, validly existing and in good standing under the laws of the state of
California. LICENSEE has full corporate power and authority to make, execute, deliver and perform
this Agreement, to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement by LICENSEE and the
consummation by it of the transactions contemplated hereby, have been duly authorized and approved
by all required corporate action of LICENSEE and no other action on the part of LICENSEE is
necessary to authorize the execution, delivery and performance of this Agreement by LICENSEE and
the consummation of the transaction contemplated hereby. This Agreement has been duly executed and
delivered by LICENSEE and is a valid and binding obligation of LICENSEE enforceable against it in
accordance with its terms, except to the extent that its enforceability may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles.



13.2 Authorization and Validity of Agreement. LICENSEE has full power and authority,
including full corporate power and authority, to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.



 


19









 






Without limiting the foregoing, the execution, delivery and performance of this Agreement by
LICENSEE and the consummation by it of the transactions contemplated hereby, have been duly
authorized and approved by the members and managers of LICENSEE, and no other action on the part of
LICENSEE or its officers, directors or shareholder is necessary to authorize the execution,
delivery and performance of this Agreement by LICENSEE and the consummation of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by LICENSEE and is a
valid and binding obligation of LICENSEE enforceable against it in accordance with its terms,
except to the extent that its enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of creditors’ rights
generally and by general equitable principles.



13.3 Consents and Approvals; No Violations. The execution, delivery and performance of
this Agreement by LICENSEE and the consummation by LICENSEE of the transactions contemplated hereby
will not, with or without the giving of notice or the lapse of time or both: (a) violate, conflict
with, or result in a breach or default under any provision of the organizational documents of
LICENSEE; (b) violate any statute, ordinance, rule or regulation applicable to LICENSEE, (c)
violate any order, judgment or decree of any court or of any governmental or regulatory body,
agency or authority applicable to LICENSEE or by which any of the LICENSED TECHNOLOGY may be bound;
or (d) require any filing by LICENSEE with, or require LICENSEE to obtain any permit, consent or
approval of, or require LICENSEE to give any notice to, any governmental or regulatory body, agency
or authority, except filings, if any, which may be required under the “Blue Sky” laws of
Massachusetts or as may be required in the future to comply with governmental regulations governing
the production and sale of products by LICENSEE as it conducts its business.




13.4 Survival of Representations and Warranties.




	 	(a)	 	Except as otherwise provided herein, notwithstanding any
investigation at any time made by or on behalf of any Party hereto, the
representations and warranties set forth herein and in any certificate
delivered in connection herewith with respect to any of those representations
and warranties will survive the Effective Date until the longer to occur of:
(i) two (2) years or (ii) the expiration of the applicable statutes of
limitation, including all periods of extension and tolling whereupon they will
terminate and expire.
	 
	 	(b)	 	After a representation and warranty has expired, as provided in
Subsection 13.4(a), no claim for claims or costs may be made or
prosecuted by any Person who would have been entitled to claims or costs on the
basis of that representation and warranty prior to its termination and
expiration, provided that no claim presented in writing for claims or costs to
the Person or Persons from which or whom those damages are sought on the basis
of that representation and warranty prior to its termination and expiration
will be affected in any way by that termination and expiration.




 


20









 





ARTICLE 14 — LIMITATION OF LIABILITY




EXCEPT FOR ANY LIABILITY TO ANY THIRD PARTIES PURSUANT TO ARTICLE 8 OR TO A PARTY PURSUANT TO
ARTICLES 12 AND 13 OF THIS AGREEMENT, IN NO EVENT SHALL LICENSOR OR LICENSEE OR THEIR, ITS
DIRECTORS, OFFICERS, EMPLOYEES OR AFFILIATES BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF
ANY KIND, INCLUDING ECONOMIC DAMAGE OR INJURY TO PROPERTY AND LOST PROFITS, REGARDLESS OF WHETHER
LICENSOR OR LICENSEE SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT SHALL KNOW OF
THE POSSIBILITY OF SUCH DAMAGES.



ARTICLE 15 — MISCELLANEOUS PROVISIONS




15.1 CORPORATE PARTNERSHIPS. In the event LICENSEE enters into a corporate partnership for
the joint development of any of the LICENSED TECHNOLOGY, and LICENSEE sublicenses the LICENSED
TECHNOLOGY to a third party, then payments required hereunder shall not include funds provided for
sponsored research or equity investments by any third party so long as such payments do not
constitute a majority of funds transferred by such third party. However if the sponsored research
involves fees in excess of industry standard reimbursement for FTEs or any equity investment in
excess of fair market value, LICENSEE shall pay to LICENSOR a royalty on such excess fees
calculated at the rates specified herein.



15.2 LICENSEE “REVERSE LICENSE” TO LICENSOR. LICENSEE agrees to license to LICENSOR on a
non-exclusive basis for therapeutic uses in the treatment of blood and cardiovascular diseases the
rights to any technology it currently owns or has licensed or develops or licenses in the future
that is applicable to such diseases (excluding however the use of proprietary techniques now or
hereafter developed by LICENSEE for the enhanced vascularization of transplanted cells or tissues).
Such license shall provide for royalty payments at the same rate as LICENSEE’S royalty payments to
LICENSOR hereunder as provided in Section 4.2(a). Such license will be sublicensable only once in
a given field of use; or for the purpose of having products produced, made, or distributed; or in
connection with a merger or consolidation of LICENSOR into another company or a sale of all or
substantially all of the assets of LICENSOR. LICENSEE shall also have no obligations hereunder with
respect to technology licenses it has or may acquire if such licenses restrict sublicensing in a
manner inconsistent with this subparagraph. Such “Reverse License shall not apply to any rights
acquired by LICENSEE under Section 15.18 hereof.


 


21









 





15.3 FUTURE TECHNOLOGY LICENSES. LICENSOR acknowledges that it is continuing to develop
cell-based technology, the existence or significance of which it may not
have disclosed to LICENSEE. Therefore, LICENSOR further agrees that in the event any of its
technology now perfected or pending as of the date of this agreement but not specifically
enumerated herein would inhibit or adversely affect the commercial use by LICENSEE of the PATENT
RIGHTS in the field, LICENSOR shall waive any claim of infringement to the extent necessary to
permit LICENSEE to continue the use of the PATENT RIGHTS under this Agreement. In addition,
LICENSOR agrees to license to LICENSEE on a non-exclusive basis for uses in the FIELDS, including
any rights acquired under Section 15.18 hereof, the rights to any technology it currently owns or
has licensed or develops or licenses in the future that is applicable to such FIELDS (but
specifically excluding applications involving the use of cells in the treatment of tumors where the
primary use of the cells is the destruction or reduction of tumors and does not involve
regeneration of tissue or organ function). Such license shall provide for royalty payments at the
same rate as LICENSEE’S royalty to LICENSOR hereunder as provided in Section 4.2(a). Such license
will be sublicensable only once in a given field of use; or for the purpose of having products
produced, made, or distributed; or in connection with a merger or consolidation of LICENSEE into
another company or a sale of all or substantially all of the assets of LICENSEE. LICENSOR shall
also have no obligations hereunder with respect to technology licenses it has or may acquire if
such licenses restrict sublicensing in a manner inconsistent with this subparagraph.



15.4 LICENSEE shall comply with all local, state, federal and international laws and
regulations relating to the development, manufacture, use, provision, and sale of LICENSED
PRODUCTS, LICENSED PROCESSES and LICENSED SERVICES. Without limiting the generality of the
foregoing, LICENSEE agrees to comply with the following:




	 	a)	 	LICENSEE shall obtain all necessary approvals from the FDA,
USDA, or any similar governmental authorities of any foreign jurisdiction in
which LICENSEE intends to make, use, or sell LICENSED PRODUCTS or to perform
LICENSED PROCESSES or LICENSED SERVICES.
	 
	 	b)	 	LICENSEE shall comply fully with any and all applicable local,
state, federal and international laws and regulations relating to the LICENSED
PRODUCTS, LICENSED PROCESSES and LICENSED SERVICES, and the PATENT RIGHTS, in
the TERRITORY, including without limitation all export or import regulations
and rules now in effect or as may be issued from time to time by any
governmental authority which has jurisdiction relating to the export of
LICENSED PRODUCTS, LICENSED PROCESSES or LICENSED SERVICES and any technology
relating thereto. LICENSEE hereby gives written assurance that it will comply
with all such import or export laws and regulations (including without
limitation all Export Administration Regulations of the United States
Department of Commerce), that it bears sole responsibility for any violation of
such laws and regulations, and that it will indemnify, defend, and hold
LICENSOR harmless (in accordance with Article 8) for the consequences
of any such violation.




 


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	 	c)	 	To the extent that any invention claimed in the PATENT RIGHTS
has been partially funded by the United States Government, and only to the
extent required by applicable laws and regulations, LICENSEE agrees that any
LICENSED PRODUCTS used or sold in the United States will be manufactured
substantially in the United States or its territories. Current law provides
that if a domestic manufacturer is not commercially feasible under the
circumstances, LICENSOR may seek a waiver of this requirement from the relevant
federal agency on behalf of LICENSEE and, upon LICENSEE’S request, shall
cooperate with LICENSEE in seeking such a waiver.





15.5 LICENSEE shall not create or incur or cause to be incurred or to exist any lien,
encumbrance, pledge, charge, restriction or other security interest of any kind upon the PATENT
RIGHTS, but may cause to be incurred or to exist a lien, encumbrance, pledge, charge, restriction
or other security interest on its rights to the LICENSED TECHNOLOGY hereunder, provided such
security interest does not affect LICENSOR’s rights to the LICENSED TECHNOLOGY, or any of
LICENSOR’s rights under this Agreement.



15.6 Neither Party shall originate any publicity, news release or other public announcement
(“Announcements”), written or oral, relating to this Agreement or the existence of an arrangement
between the Parties, without the prior written approval of the other Party, which approval shall
not be unreasonably withheld or delayed, except as otherwise required by law. The foregoing
notwithstanding, LICENSOR and LICENSEE shall have the right to make such Announcements without the
consent of the other Party in any prospectus, offering memorandum, or other document or filing
required by applicable securities laws or other applicable law or regulation, provided that such
Party shall have given the other Party at least ten (10) days prior written notice of the proposed
text for the purpose of giving the other Party the opportunity to comment on such text.



15.7 No implied licenses are granted pursuant to the terms of this Agreement. No licensed
rights shall be created by implication or estoppel.



15.8 Nothing herein shall be deemed to constitute either Party as the agent or representative
of the Party, or both parties as joint venturers or partners for any purpose. Each Party shall be
an independent contractor, not an employee or partner of the other Party, and the manner in which
each Party renders its services under this Agreement shall be within its sole discretion. Neither
Party shall be responsible for the acts or omissions of the other Party, nor shall either Party
have authority to speak for, represent or obligate the other Party in any way without prior written
authority from the other Party.



15.9 To the extent commercially feasible, and consistent with prevailing business practices
and applicable law, all LICENSED PRODUCTS sold pursuant to this Agreement will be marked with the
number of each issued patent that applies to such LICENSED PRODUCTS.


 


23









 





15.10 This Agreement shall be construed, governed, interpreted and applied in accordance with
the laws of the State of California, U.S.A. without regard to principles of conflicts of law
thereof, except that questions affecting the construction and effect of any patent shall be
determined by the law of the country in which the patent was granted.



15.11 The Parties hereto acknowledge that this Agreement sets forth the entire Agreement and
understanding of the Parties hereto as to the subject matter hereof, and shall not be subject to
any change or modification except by the execution of a written instrument signed by the Parties
hereto.



15.12 The provisions of this Agreement are severable, and in the event that any provision of
this Agreement shall be determined to be invalid or unenforceable under any controlling body of the
law, such invalidity or unenforceability shall not in any way affect the validity or enforceability
of the remaining provisions hereof.



15.13 The failure of either Party to assert a right hereunder or to insist upon compliance
with any term or condition of this Agreement shall not constitute a waiver of that right or excuse
a similar subsequent failure to perform any such term or condition by the other Party.



15.14 This Agreement may not be assigned by LICENSEE without the prior written consent of
LICENSOR, which consent shall be granted or denied in LICENSOR’s sole discretion. LICENSOR may not
assign this Agreement without the consent of LICENSEE, which consent shall not be unreasonably
withheld or delayed, except that LICENSOR may assign this Agreement to an affiliate or to a
successor in connection with the merger, consolidation, or sale of all or substantially all of its
assets or that portion of its business to which this Agreement relates. Notwithstanding the
foregoing to the contrary, this restriction on the assignment by LICENSEE of this Agreement shall
not prevent the assignment of this Agreement in connection with a merger or consolidation of
LICENSEE into another company or a sale of all or substantially all of the assets of LICENSEE, so
long as the purchaser of the assets agrees to assume to any and all outstanding liabilities to
LICENSOR under this Agreement, including but not limited to any outstanding amounts under the
promissory note referred to in Section 4.1.



15.15 This Agreement has been prepared jointly and no rule of strict construction shall be
applied against either Party. In this Agreement, the singular shall include the plural and vice
versa and the word “including” shall be deemed to be followed by the phrase “without limitation.”
The section headings contained in this Agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of this Agreement.



15.16 This Agreement may be executed in counterparts, each of which together shall constitute
one and the same Agreement.


 


24









 





15.17 All rights and licenses granted under or pursuant to this Agreement by LICENSOR to
LICENSEE are, and shall otherwise be deemed to be, for purposes of Paragraph
365(n) of the U.S. Bankruptcy Code (the “Code”), licenses to rights in “intellectual property”
as defined in the Code. The Parties hereto agree that LICENSEE, as a LICENSEE of such rights under
this Agreement, shall retain and may fully exercise all of its rights and elections under the Code.
The Parties hereto further agree that, in the event of the commencement of a bankruptcy proceeding
by or against LICENSOR including a proceeding under the Code, LICENSEE shall be entitled to a
complete duplicate of (or complete access to, as appropriate) any such intellectual property and
all embodiments of such intellectual property, including the PATENT RIGHTS and KNOW-HOW, and the
same, if not already in LICENSEE’s possession, shall be promptly delivered to LICENSEE upon any
such commencement of a bankruptcy proceeding upon written request therefore by LICENSEE.



15.18 In addition to the other rights granted herein, LICENSOR hereby grants to LICENSEE a 90
day right of negotiation with respect to any technology that would constitute LICENSED TECHNOLOGY
if the FIELD included diseases related either to the heart or to neuro degenerative diseases (the
“Added Fields”) prior to LICENSOR entering into any license relating to either of such Added
Fields) with a third party. Such a 90 day period shall commence on the earlier of the 12 month
anniversary of the Effective Date, or such date when LICENSOR notifies LICENSEE that it has opened
negotiations with a third party or that a third party has made inquiry about such a license. If
following the expiration of any such 90-day negotiation period LICENSEE and LICENSOR have not
entered into a license for an Added Field, LICENSOR shall be free to enter into an exclusive or
non-exclusive license for such Added Field with any third party. If LICENSOR enters into a
non-exclusive license for an Added Field with a third party following the 90-day negotiating period
hereunder, LICENSOR shall offer a non-exclusive license to LICENSEE on comparable terms as those
entered into with such third party. LICENSEE shall then have 30 days to enter into such a
nonexclusive license. If LICENSEE does not enter into such a license within said 30-day period,
LICENSOR shall have no further obligations relating to the Added Field.



[Remainder of this page intentionally left blank]



 


25









 






IN WITNESS WHEREOF, the Parties have duly executed this Agreement on the EFFECTIVE DATE.



ADVANCED CELL TECHNOLOGY, INC.



	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	Printed Name: Michael D. West, Ph.D.	 	 
	Title: President & Chief Executive Officer	 	 






PACGEN CELLCO, LLC




	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	Printed Name: Kenneth Aldrich	 	 
	Title: Managing Member	 	 





 


 









 





EXHIBIT A

PATENT RIGHTS

(Reference Section 1.10)




	 	 	 	 	 	 	 	 	 
	Serial No.	 	 	 	Filing Date	 	 	 	 
	Patent No.	 	CO	 	Issue Date	 	Title	 	Assignee
	60/382,616

	 	US
	 	2002-05-24
	 	A Bank of Nuclear
Transfer-Generated Stem Cells
for Transplantation Having
Homozygous MHC Alleles, and
Methods for Making and Using
Such a Stem Cell Bank
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	10/445,195

	 	US
	 	2003-05-27
	 	A Bank of Nuclear
Transfer-Generated Stem Cells
for Transplantation Having
Homozygous MHC Alleles, and
Methods for Making and Using
Such a Stem Cell Bank
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	PCT/US03/16626

	 	WO
	 	2003-05-27
	 	A Bank of Nuclear
Transfer-Generated Stem Cells
for Transplantation Having
Homozygous MHC Alleles, and
Methods for Making and Using
Such a Stem Cell Bank
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	PCT/US00/18063

	 	WO
	 	2000-06-30
	 	Cytoplasmic Transfer to
De-Differentiate Recipient
Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	60/141,250

	 	US
	 	1999-06-30
	 	Cytoplasmic Transfer to
De-Differentiate Recipient
Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	09/736,268

	 	US
	 	2000-12-15
	 	Cytoplasmic Transfer to
De-Differentiate Recipient
Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	516236

	 	NZ
	 	2000-06-30
	 	Cytoplasmic Transfer to
De-Differentiate Recipient
Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	2000000507057

	 	JP
	 	2000-06-30
	 	Cytoplasmic Transfer to
De-Differentiate Recipient
Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	147179

	 	IL
	 	2000-06-30
	 	Cytoplasmic Transfer to
De-Differentiate Recipient
Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	2000000008098

	 	CN
	 	2000-06-30
	 	Cytoplasmic Transfer to
De-Differentiate Recipient
Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	2,377,515

	 	CA
	 	2000-06-30
	 	Cytoplasmic Transfer to
De-Differentiate Recipient
Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	PI0012099-5

	 	BR
	 	2000-06-30
	 	Cytoplasmic Transfer to
De-Differentiate Recipient
Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	2000000059028

	 	AU
	 	2000-06-30
	 	Cytoplasmic Transfer to
De-Differentiate Recipient
Cells
	 	ACT, Inc.






 


2









 





	 	 	 	 	 	 	 	 	 
	Serial No.	 	 	 	Filing Date	 	 	 	 
	Patent No.	 	CO	 	Issue Date	 	Title	 	Assignee
	PCT/US02/26798

	 	WO
	 	2002-08-27
	 	Dedifferentiation and
Re-Differentiation of Somatic
Cells and Production of Cells
for Cell Therapies
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	10/228,316

	 	US
	 	2002-08-27
	 	Dedifferentiation and
Re-Differentiation of Somatic
Cells and Production of Cells
for Cell Therapies
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	60/314,657

	 	US
	 	2001-08-27
	 	Dedifferentiation of Somatic
Cells and Use for Cell
Therapies
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	60/382,386

	 	US
	 	2002-05-23
	 	Generation of Histocompatible
Tissues Using Nuclear
Transplantation
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	PCT/US03/16424

	 	US
	 	2003-05-23
	 	Generation of Histocompatible
Tissues Using Nuclear
Transplantation
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	60/342,358

	 	US
	 	2001-12-27
	 	Generation of Human Stem
Cells Via Cross Species
Nuclear Transfer
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	PCT/US02/41572

	 	WO
	 	2002-12-27
	 	Embryonic or Stem-Like Cell
Lines Produced by Cross
Species Nuclear
Transplantation and Method
for Enhancing Embryonic
Development by Genetic
Alteration of Donor Cells or
by Tissue Culture Conditions
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	60/332,510

	 	US
	 	2001-11-26
	 	Human Nuclear Transfer
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	PCT/US02/37899

	 	WO
	 	2002-11-26
	 	Methods for Making and Using
Reprogrammed Human Somatic
Cell Nuclei and Autologous
and Isogenic Human Stem Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	10/304,020

	 	US
	 	2002-11-26
	 	Methods for Making and Using
Reprogrammed Human Somatic
Cell Nuclei and Autologous
and Isogenic Human Stem Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	10/484,398

	 	US
	 	2002-07-18
	 	Improved Methods and
Compositions for Cell Therapy
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	02322522

	 	AU
	 	2002-07-18
	 	Improved Methods and
Compositions for Cell Therapy
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	PCT/US02/22857

	 	WO
	 	2002-07-18
	 	Improved Methods and
Compositions for Cell Therapy
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	60/305,904

	 	US
	 	2001-07-18
	 	Improved Methods and
Compositions for Cell Therapy
	 	ACT, Inc.






 


3









 





	 	 	 	 	 	 	 	 	 
	Serial No.	 	 	 	Filing Date	 	 	 	 
	Patent No.	 	CO	 	Issue Date	 	Title	 	Assignee
	60/280,138

	 	US
	 	2001-04-02
	 	Method for Facilitating the
Production of Differentiated
Cell Types and Tissues from
Embryonic and Adult
Pluripotent and Multipotent
Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	10/112,939

	 	US
	 	2002-04-02
	 	Method for Facilitating the
Production of Differentiated
Cell Types and Tissues from
Embryonic and Adult
Pluripotent and Multipotent
Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	PCT/US00/24398

	 	WO
	 	2000-09-06
	 	Method for Generating
Immune-Compatible Cells and
Tissues Using Nuclear
Transfer Techniques
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	09/655,815

	 	US
	 	2000-09-06
	 	Method for Generating
Immune-Compatible Cells and
Tissues Using Nuclear
Transfer Techniques
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	60/152,354

	 	US
	 	1999-09-07
	 	Method for Generating
Immune-Compatible Cells and
Tissues Using Nuclear
Transfer Techniques
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	60/155,107

	 	US
	 	1999-09-22
	 	Method for Generating
Immune-Compatible Cells and
Tissues Using Nuclear
Transfer Techniques
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	09/797,684

	 	US
	 	2001-03-05
	 	Method for Generating
Immune-Compatible Cells and
Tissues Using Nuclear
Transfer Technique
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	PA/a/2002/002444

	 	MX
	 	2000-09-06
	 	Method for Generating
Immune-Compatible Cells and
Tissues Using Nuclear
Transfer Techniques
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	2001-522404

	 	JP
	 	2000-09-06
	 	Method for Generating
Immune-Compatible Cells and
Tissues Using Nuclear
Transfer Techniques
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	148418

	 	IL
	 	2000-09-06
	 	Method for Generating
Immune-Compatible Cells and
Tissues Using Nuclear
Transfer Techniques
	 	ACT, Inc.






 


4









 





	 	 	 	 	 	 	 	 	 
	Serial No.	 	 	 	Filing Date	 	 	 	 
	Patent No.	 	CO	 	Issue Date	 	Title	 	Assignee
	00964946.8

	 	EP
	 	2000-09-06
	 	Method for Generating
Immune-Compatible Cells and
Tissues Using Nuclear
Transfer Techniques
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	CN 00813394.8

	 	CN
	 	2000-09-06
	 	Method for Generating
Immune-Compatible Cells and
Tissues Using Nuclear
Transfer Techniques
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	2,383,776

	 	CA
	 	2000-09-06
	 	Method for Generating
Immune-Compatible Cells and
Tissues Using Nuclear
Transfer Techniques
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	PI0011905-9

	 	BR
	 	2000-09-06
	 	Method for Generating
Immune-Compatible Cells and
Tissues Using Nuclear
Transfer Techniques
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	2000000075755

	 	AU
	 	2000-09-06
	 	Method for Generating
Immune-Compatible Cells and
Tissues Using Nuclear
Transfer Techniques
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	PCT/US00/28285

	 	WO
	 	2000-10-13
	 	Method of Differentiation of
Morula or Inner Cell Mass
Cells and Method of Making
Lineage-Defective Embryonic
Stem Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	60/159,550

	 	US
	 	1999-10-15
	 	Method of Differentiation of
Morula or Inner Cell Mass
Cells and Method of Making
Lineage-Defective Embryonic
Stem Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	09/689,743

	 	US
	 	2000-10-13
	 	Method of Differentiation of
Morula or Inner Cell Mass
Cells and Method of Making
Lineage-Defective Embryonic
Stem Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	518191

	 	NZ
	 	2000-10-13
	 	Method of Differentiation of
Morula or Inner Cell Mass
Cells and Method of Making
Lineage-Defective Embryonic
Stem Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	PA/a/2002/003733

	 	MX
	 	2000-10-13
	 	Method of Differentiation of
Morula or Inner Cell Mass
Cells and Method of Making
Lineage-Defective Embryonic
Stem Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	2001-532190

	 	JP
	 	2000-10-13
	 	Method of Differentiation of
Morula or Inner Cell Mass
Cells and Method of Making
Lineage-Defective Embryonic
Stem Cells
	 	ACT, Inc.






 


5









 





	 	 	 	 	 	 	 	 	 
	Serial No.	 	 	 	Filing Date	 	 	 	 
	Patent No.	 	CO	 	Issue Date	 	Title	 	Assignee
	149043

	 	IL
	 	2000-10-13
	 	Method of Differentiation of
Morula or Inner Cell Mass
Cells and Method of Making
Lineage-Defective Embryonic
Stem Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	2000000973497

	 	EP
	 	2000-10-13
	 	Method of Differentiation of
Morula or Inner Cell Mass
Cells and Method of Making
Lineage-Defective Embryonic
Stem Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	00817477.6

	 	CN
	 	2000-10-13
	 	Method of Differentiation of
Morula or Inner Cell Mass
Cells and Method of Making
Lineage-Defective Embryonic
Stem Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	PI0014864-4

	 	BR
	 	2000-10-13
	 	Method of Differentiation of
Morula or Inner Cell Mass
Cells and Method of Making
Lineage-Defective Embryonic
Stem Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	60/152,340

	 	US
	 	1999-09-07
	 	Methods of Making and
Rejuvenating Primary Cells
Using Nuclear Transfer
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	60/153,233

	 	US
	 	1999-09-13
	 	Methods of Making and
Rejuvenating Primary Cells
Using Nuclear Transfer
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	2,388,497

	 	CA
	 	2000-10-13
	 	Methods of Producing
Differentiated Progenitor
Cells and Lineage-Defective
Embryonic Stem Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	09/520,879

	 	US
	 	2000-04-05
	 	Methods of Repairing Tandemly
Repeated DNA Sequences and
Extending Cell Lifespan Using
Nuclear Transfer
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	60/539,796

	 	US
	 	2004-01-28
	 	Novel Culture Systems for Ex

Vivo Development
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	09/656,173

	 	US
	 	2000-09-06
	 	Telomere Restoration and
Extension of Cell Lifespan in
Animals Cloned from Senescent
Somatic Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	09/527,026

	 	US
	 	2000-03-16
	 	Telomere Restoration and
Extension of Cell Lifespan in
Animals Cloned from Senescent
Somatic Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	PCT/US01/12265

	 	WO
	 	2001-04-16
	 	Pluripotent Cells Comprising
Allogenic Nucleus and
Mitochrondria
	 	ACT, Inc.






 


6









 





	 	 	 	 	 	 	 	 	 
	Serial No.	 	 	 	Filing Date	 	 	 	 
	Patent No.	 	CO	 	Issue Date	 	Title	 	Assignee
	PCT/US03/04868

	 	WO
	 	2003-02-21
	 	Pluripotent Cells Comprising
Allogenic Nucleus and
Mitochrondria
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	60/197,407

	 	US
	 	2000-04-14
	 	Pluripotent Cells Comprising
Allogenic Nucleus and
Mitochrondria
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	60/357,854

	 	US
	 	2002-02-21
	 	Pluripotent Cells Comprising
Allogenic Nucleus and
Mitochrondria
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	NZ 521711

	 	NZ
	 	2001-04-16
	 	Pluripotent Cells Comprising
Allogenic Nucleus and
Mitochrondria
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	PA/a/2002/010075

	 	MX
	 	2001-04-16
	 	Pluripotent Cells Comprising
Allogenic Nucleus and
Mitochrondria
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	2001-577429

	 	JP
	 	2001-04-16
	 	Pluripotent Cells Comprising
Allogenic Nucleus and
Mitochrondria
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	152064

	 	IL
	 	2001-04-16
	 	Pluripotent Cells Comprising
Allogenic Nucleus and
Mitochrondria
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	EP 00930525

	 	EP
	 	2001-04-16
	 	Pluripotent Cells Comprising
Allogenic Nucleus and
Mitochrondria
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	CN 01808875.9

	 	CN
	 	2001-04-16
	 	Pluripotent Cells Comprising
Allogenic Nucleus and
Mitochrondria
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	2,405,555

	 	CA
	 	2001-04-16
	 	Pluripotent Cells Comprising
Allogenic Nucleus and
Mitochrondria
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	PI0110072-6

	 	BR
	 	2001-04-16
	 	Pluripotent Cells Comprising
Allogenic Nucleus and
Mitochrondria
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	2001257053

	 	AU
	 	2001-04-16
	 	Pluripotent Cells Comprising
Allogenic Nucleus and
Mitochrondria
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	PCT/US02/26945

	 	WO
	 	2002-08-26
	 	Screening Assays for
Identifying Differentiation
and Antitumor Agents
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	60/314,316

	 	US
	 	2001-08-24
	 	Screening Assays for
Identifying Differentiation
and Antitumor Agents
	 	ACT, Inc.






 


7









 





	 	 	 	 	 	 	 	 	 
	Serial No.	 	 	 	Filing Date	 	 	 	 
	Patent No.	 	CO	 	Issue Date	 	Title	 	Assignee
	10/227,282

	 	US
	 	2002-08-26
	 	Screening Assays for
Identifying
Differentiation-Inducing
Agents and Production of
Differentiated Cells for Cell
Therapy
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	PCT/US00/24393

	 	WO
	 	2000-09-06
	 	Telomere Restoration and
Extension of Cell Lifespan in
Animals Cloned from Senescent
Somatic Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	60/179,486

	 	US
	 	2000-02-01
	 	Telomere Restoration and
Extension of Cell Lifespan in
Animals Cloned from Senescent
Somatic Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	517577

	 	NZ
	 	2000-09-06
	 	Telomere Restoration and
Extension of Cell Lifespan in
Animals Cloned from Senescent
Somatic Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	PA/a/2002/002443

	 	MX
	 	2000-09-06
	 	Telomere Restoration and
Extension of Cell Lifespan in
Animals Cloned from Senescent
Somatic Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	2001-521771

	 	JP
	 	2000-09-06
	 	Telomere Restoration and
Extension of Cell Lifespan in
Animals Cloned from Senescent
Somatic Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	148457

	 	IL
	 	2000-09-06
	 	Telomere Restoration and
Extension of Cell Lifespan in
Animals Cloned from Senescent
Somatic Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	00961569.1

	 	EP
	 	2000-09-09
	 	Telomere Restoration and
Extension of Cell Lifespan in
Animals Cloned from Senescent
Somatic Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	CN 00813712.9

	 	CN
	 	2000-09-06
	 	Telomere Restoration and
Extension of Cell Lifespan in
Animals Cloned from Senescent
Somatic Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	2,383,790

	 	CA
	 	2000-09-06
	 	Telomere Restoration and
Extension of Cell Lifespan in
Animals Cloned from Senescent
Somatic Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	PI0013844-4

	 	BR
	 	2000-09-06
	 	Telomere Restoration and
Extension of Cell Lifespan in
Animals Cloned from Senescent
Somatic Cells
	 	ACT, Inc.






 


8









 





	 	 	 	 	 	 	 	 	 
	Serial No.	 	 	 	Filing Date	 	 	 	 
	Patent No.	 	CO	 	Issue Date	 	Title	 	Assignee
	73508/00

	 	AU
	 	2000-09-06
	 	Telomere Restoration and
Extension of Cell Lifespan in
Animals Cloned from Senescent
Somatic Cells
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	PCT/US02/27137

	 	WO
	 	2001-08-27
	 	Transdifferentiation and
Re-Differentiation of Somatic
Cells and Production of Cells
for Cell Therapies
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	10/228,296

	 	US
	 	2002-08-27
	 	Transdifferentiation and
Re-Differentiation of Somatic
Cells and Production of Cells
for Cell Therapies
	 	ACT, Inc.
	 
	 	 	 	 	 	 	 	 
	60/314,654

	 	US
	 	2001-08-27
	 	Trans-differentiation of Cells
	 	ACT, Inc.





 


9









 





EXHIBIT B




THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF APPLICABLE
STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.



FORM OF

CONVERTIBLE PROMISSORY NOTE

OF 

PACGEN CELLCO LLC




 



			
	$225,000.00
	 	Made as of May 14, 2004






For value received, PacGen CellCo LLC, a California limited liability company (the “Company”),
with principal offices at 157 Surfview Drive, Pacific Palisades, CA 90272, hereby promise to pay to
Advanced Cell Technology, Inc., a Delaware corporation (“Holder”), or its registered assigns, the
principal sum of Two Hundred Twenty Five Thousand Dollars ($225,000) (the “Principal Amount”).



Unless earlier paid or converted, the unpaid Principal Amount shall be due and payable on June
1, 2007 (the “Maturity Date”). On the Maturity Date, the principal shall be (i) repaid by the
Company in cash to the Holder or (ii) at the Holder’s election, converted into shares of
Common Stock (as defined below) at the conversion rate set forth in Subsection 2(a) below
based on a determination of the Conversion Price as of the Maturity Date made not later than 60
days following the Maturity Date by the Company’s Board of Managers, acting in good faith.



This Note is issued pursuant to that certain Exclusive License Agreement dated as of May 14,
2004 (the “License Agreement”), by and among the Company and Holder, and is subject to the
provisions thereof.



The following is a statement of the rights of Holder and the conditions to which this Note is
subject, and to which Holder hereof, by the acceptance of this Note, agrees:




	 	1.	 	Definitions. The following definitions shall apply for all purposes of this
Note:




 


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“Common Stock” means shares of or units of or other interests (as the case may be)
of common equity of the Company or its successors or assigns




“Company” means the “Company” as defined above and includes any corporation, which
shall succeed to or assume the obligations of the Company under this Note.




“Conversion Price” means (i) in the case of a First Equity Financing, the price paid
per share for the equity securities issued in such First Equity Financing; or (ii)
in the case of an Acquisition Event (as defined below) the value of one share or
unit of Common Stock based upon the portion of the aggregate sale price or merger or
consolidation consideration which is available to the Company’s common equity
holders in connection with such Acquisition Event; or (iii) on the Maturity, the
value of one share or unit of Common Stock as determined in good faith by the Board
of Managers.




“First Equity Financing” means a sale or series thereof, subsequent to the date of
this Note, by the Company of equity securities in which the Company receives
aggregate cash proceeds of at least $5,000,000 (not including conversion of the this
Note) as result of investments made by one or more bona fide third party
institutional or strategic investors in exchange for the sale of shares of capital
stock of the Company.




“Holder” means any person who shall at the time be the registered holder of this
Note.




“Maturity Date” means the date on which this Note is either repaid or converted in
whole in accordance with the terms hereunder.




“Note” means this Secured Convertible Promissory Note.




“Series A Preferred Stock” means the class of equity securities issued by the
Company in the First Equity Financing.




2. Interest.



The principal sum outstanding under this Note shall bear no interest unless not repaid at the
Maturity Date, in which event it shall thereafter bear interest at a rate equal to the lesser of
(a) ten percent (10%) per annum, or (b) the maximum non-usurious rate allowed under the laws of the
State of California.


 


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3. Conversion.



a) Automatic Conversions. This Note shall be automatically converted into that number of
shares of Series A Preferred Stock equal to the quotient of (a) the aggregate principal amount of
this Note then outstanding divided by (b) the Conversion Price, under the following conditions:



i) Upon the consummation of the First Equity
Financing;



ii) Immediately prior to the closing of any merger, sale or other consolidation of the Company
or of any sale of all or substantially all assets of the Company which occurs prior to the First
Equity Financing (an “Acquisition Event”). Notwithstanding the above, and only in the event that a
conversion resulting from such Acquisition Event would result in a security not traded on a
national stock exchange (including NASDAQ and NASDAQ small cap), upon written notice to the Company
not later than 5 days after the consummation of the Acquisition Event and notice of the Acquisition
Event to the Holder of the Note, the Holder may elect to receive payment in cash of the entire
outstanding principal of this Note.



b. Conversion Mechanics. Upon the effective date of any elective or automatic
conversion of this Note, the outstanding principal of this Note shall be deemed converted into
shares of Series A Preferred Stock or Common Stock automatically as of such effective date without
any further action by the Holder and whether or not the Note is surrendered to the Company or its
transfer agent. However, the Company shall not be obligated to issue certificates evidencing the
shares of the Series A Preferred Stock or Stock issuable upon such elective or automatic conversion
unless such Note is either delivered to the Company or its transfer agent, or the Holder notifies
the Company or its transfer agent that such Note has been lost, stolen or destroyed and executes an
agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in
connection with such Note.



4. Reservation of Stock. If at any time the number of shares of Common Stock or other
securities issuable upon conversion of this Note shall not be sufficient to effect the conversion
of this Note, the Company will take such corporate action as may be necessary to increase its
authorized but unissued shares of Common Stock or other securities issuable upon conversion of this
Note (and any securities of the Company that the Common Stock may convert into) as shall be
sufficient for such purpose.



5. Covenants of the Company. The Company covenants to, and agrees with the Holder that prior
to the Maturity Date, so long as the Notes are outstanding, with the following:



a) Organization, Standing Power. The Company is a limited liability company duly organized,
validly existing and in good standing under the California Limited Liability Company Act (the
“CLLCA”). The Company has all requisite power and authority to conduct its business as now being
conducted under the CLLCA.


 


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b) Authority; Enforceability; No Conflict. The Company has all requisite power and
authority under the CLLCA to issue this Note and to carry out its obligations
hereunder. The issuance of this Note by the Company has been duly and validly authorized by
all requisite proceedings on the part of the Company. This Note when executed and delivered by the
Company is a valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except that (i) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium, rehabilitation, liquidation, conservatorship, receivership
or other similar laws now or hereafter in effect relating to creditors’ rights generally and (ii)
the remedy of specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which any proceeding
therefor may be brought. The execution and delivery of this Note by the Company does not, and the
consummation by the Company of the transaction contemplated hereby and thereby will not result in
or constitute: (i) a default, breach or violation of or under the limited liability agreement of
the Company, (ii) the California Limited Liability Company Act or any applicable law or (iii) any
material agreement to which the Company is a party.



6. No Rights or Liabilities as Shareholder. This Note does not by itself entitle the Holder
to any voting rights or other rights as a shareholder of the Company. In the absence of conversion
of this Note, no provisions of this Note, and no enumeration herein of the rights or privileges of
the Holder, shall cause the Holder to be a shareholder of the Company for any purpose.



7. No Impairment. The Company will not, by amendment of its limited liability agreement, or
through reorganization, consolidation, merger, dissolution, issue or sale of securities, sale of
assets or any other voluntary action, willfully avoid or seek to avoid the observance or
performance of any of the terms of this Note, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder under this Note against wrongful
impairment. Without limiting the generality of the foregoing, the Company will take all such action
as may be necessary or appropriate in order that the Company may duly and validly issue fully paid
and nonassessable shares of Common Stock upon the conversion of this Note.



8. Prepayment. The Company may at any time, without penalty, prepay in whole or in part the
unpaid balance of this Note. All payments will first be applied to the repayment of accrued fees
and expenses, if any, then to accrued interest, if any, until all then outstanding accrued interest
has been paid, and then shall be applied to the repayment of principal.



9. Notice. The Company shall give the Holder of this Note at least ten (10) days notice of
any Acquisition Event.



10. Waiver and Amendment. Any provision of this Note may be amended, waived or modified only
upon written consent of the Company and the Holder of the Note.



11. Waiver of Notice and Fees. The Company and all endorsers of this Note hereby waive
notice, presentment, protest and notice of dishonor.


 


13









 





12. Transfer. This Note and any rights hereunder may not be assigned, conveyed or
transferred, in whole or in part, without the Company’s prior written consent, which consent shall
not be unreasonably withheld. The rights and obligations of the Company and the Holder under this
Note and the License Agreement shall be binding upon and benefit their respective permitted
successors, assigns, heirs, administrators and transferees. However, this Note and the loans
evidenced hereby may be transferred in whole or in part only by registration of such transfer on
the register maintained for such purpose by or on behalf of the Company.



13. Governing Law. This Note shall be governed by and construed under the internal laws of
the State of Delaware, without reference to principles of conflict of laws or choice of laws.



14. Securities Law Representations. This Note is issued to the Holder in reliance upon the
Holder’s representation to the Company, which by such Holder’s execution of this Note Holder hereby
confirms, that the Note will be acquired for investment for such Holder’s own account, not as a
nominee or agent, and not with a view to the sale or distribution of any part thereof, and that
such Holder has no present intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Note, such Holder further represents that such Holder has
no contract, undertaking, agreement or arrangement with any person to sell, transfer, of grant
participations to such person or to any third person, with respect to this Note.



15. Headings. The headings and captions used in this Note are used only for convenience and
are not to be considered in construing or interpreting this Note. All references in this Note to
sections and exhibits shall, unless otherwise provided, refer to sections hereof and exhibits
attached hereto, all of which exhibits are incorporated herein by this reference.



16. Severability. If one or more provisions of this Note are held to be unenforceable under
applicable law, such provision(s) shall be excluded from this Note and the balance of the Note
shall be interpreted as if such provision(s) were so excluded and shall be enforceable in
accordance with its terms.



17. Entire Agreement; Successors and Assigns. This Note constitutes the entire contract
between the Company and the Holder relative to the subject matter hereof. Any previous agreement
between the Company and the Holder is superseded by this Agreement. Subject to the exceptions
specifically set forth in this Note, the terms and conditions of this Note shall inure to the
benefit of and be binding upon the respective executors, administrators, heirs, successors and
assigns of the Parties.



[Remainder of this page intentionally left blank]



 


14









 





IN WITNESS WHEREOF, the Company has caused this Note to be signed in its name as of the date
first above written.



PACGEN CELLCO LLC




	 	 	 	 	 
	By:

	 	/S/ KENNETH ALDRICH
 

Name:
	 	 
	 

	 	Title:	 	 






ACCEPTED AND AGREED TO:



ADVANCED CELL TECHNOLOGY, INC.



	 	 	 	 	 
	By:

	 	/S/ MICHAEL D. WEST
 

Name:
	 	 
	 

	 	Title:	 	 





 


 









 





EXHIBIT C

(Reference Section 12.3)




None


 


2









 





EXHIBIT D

(Reference Section 12.7)




None




 


3