**Exhibit10.7**

 

NONEXCLUSIVE LICENSEAGREEMENT

 

ThisNonexclusive License Agreement (“Agreement”) is made and entered into this 1stday of May, 2001 (the “EFFECTIVE DATE”), by and between Advanced CellTechnology, Inc., a Delaware corporation with offices located at One InnovationDrive, Worcester, Massachusetts 01605 (“ACT”), and Immerge BioTherapeutics,Inc., a Delaware corporation with offices located at Building 75, Third Avenue,Charlestown, MA 02129 (“LICENSEE”) (ACT and LICENSEE sometimes hereinafter referredto as the “parties”).  As set forthbelow, the University of Massachusetts, a public institution of highereducation of the Commonwealth of Massachusetts (the “University”), has agreedto certain provisions of this Agreement.

 

WITNESSETH

 

WHEREAS, ACTowns or has licensed with a sublicensable interest the PATENT RIGHTS (asdefined below); and

 

WHEREAS,LICENSEE desires to obtain a nonexclusive license from ACT to the PATENTRIGHTS; and

 

WHEREAS, ACTis willing to grant such a license to LICENSEE; and

 

WHEREAS, theparties have previously agreed, pursuant to a term sheet stylized as “Terms forNonexclusive License” dated December 23, 2000 (the “Term Sheet”), to theprincipal terms of the license.

 

WHEREAS, theparties agree to enter into a formal and definitive license upon the terms andcondition set forth below;

 

NOW,THEREFORE, in consideration of the premises and the mutual covenants containedherein, the parties hereto agree as follows:

 

ARTICLE 1- DEFINITIONS

 

For thepurposes of this Agreement, the following words and phrases shall have the followingmeanings:

 

1.1                                 “LICENSEE”shall mean Immerge BioTherapeutics, Inc, a Delaware corporation with officeslocated at Building 75, Third Avenue, Charlestown, MA 02129.

 

1.2                                 “PATENTRIGHTS” means the patents and patent applications identified on Exhibit Aattached hereto, all divisionals, continuations, and continuations-in-part thatderive from the identified patent applications (including from the patentapplications for the identified patents), foreign filings related to theforegoing patents and patent applications, and any patents issuing on saidapplications together with all reissues, reexaminations, extensions andsubstitutions thereof.  The parties agreethat Exhibit A may from time to time be amended after

 

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the EffectiveDate to reflect changes thereto.

 

1.3                                 A “LICENSED PRODUCT”shall mean any product or part thereof, the development, manufacture, sale oruse of which is covered by a VALID CLAIM of the PATENT RIGHTS in the country inwhich any such product or part thereof is made, used or sold by LICENSEE or aproduct or part thereof directly or indirectly derived from a founder swine,the production or sale of such founder swine being covered by a VALID CLAIM ofthe PATENT RIGHTS in the country in which any such founder swine is produced.

 

1.4                                 “NET SALES” shall meanthe amount billed or invoiced by LICENSEE or any third party that sells theLICENSED PRODUCTS on behalf of LICENSEE for the sale of LICENSED PRODUCTS less:

 

(a)                                  discounts allowed;

 

(b)                                 sales tax, tariffduties, use and other taxes directly imposed with reference to particularsales;

 

(c)                                  amounts repaid orcredited by reason of rejection, return of goods, retroactive price reductionor bad debt;

 

(d)                                 freight, postage andinsurance invoiced to customer;

 

(e)                                  third party rebatesto the extent actually allowed; and

 

(f)                                    liability incurredresulting from any governmental (or agency thereof) mandated rebate program,whether federal, state, municipal or local.

 

1.5                                 “FIELD OF USE” shallmean the cloning of swine for the sole purpose of developing, producing andselling swine-derived organs (but excluding cells (other than associated immunecells required to induce tolerance of the organs) and tissues) for transplantationof such organs in humans.

 

1.6                                 “AFFILIATED COMPANY”or “AFFILIATED COMPANIES” means any corporation, company, partnership, jointventure and/or firm that controls, is controlled by or is under common controlwith one of the parties to this Agreement, as applicable.  For purposes of this definition, “control”means (a) in the case of corporate entities, direct or indirect ownership ofmore than fifty percent (50%) of the stock or shares entitled to vote for theelection of directors; and (b) in the case of non-corporate entities, direct orindirect ownership of more than fifty percent (50%) of the equity interest withthe power to direct the management and policies of such noncorporate entities,but in any country where the local law does not permit foreign equity participationof at least fifty percent (50%), then an “Affiliated Company” includes anycompany in which either party owns or controls or is owned or controlled by,directly or indirectly, the maximum percentage of outstanding stock or votingrights permitted by local law.

 

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1.7                                 “VALIDCLAIM” means a claim of any unexpired United States or foreign patent or patentapplication within the PATENT RIGHTS which shall not have been withdrawn, cancelledor disclaimed, nor held invalid by a court of competent jurisdiction.

 

1.8                                 “UMASS LICENSE” meansthe Exclusive License Agreement between ACT and the University, dated April 16,1996, as amended by Amendment to Exclusive License Agreement dated September 1,1999 and Second Amendment to Exclusive License Agreement dated May 31, 2000.

 

1.9                                 “UMASS PATENT RIGHTS”means PATENT RIGHTS licensed by ACT from the University under the UMASSLICENSE.

 

1.10                           “CONFIDENTIAL INFORMATION”means confidential or proprietary information of ACT relating to the PATENTRIGHTS and confidential or proprietary information of LICENSEE relating to thePATENT RIGHTS, LICENSED PRODUCTS or LICENSED PROCESSES.  CONFIDENTIAL INFORMATION may be in written,graphic, oral or physical form and may include scientific knowledge, know-how,processes, inventions, techniques, formulae, products, business operations,customer requirements, designs, sketches, photographs, drawings,specifications, reports, studies, findings, data, plans or other records, biologicalmaterials, and/or software.  CONFIDENTIALINFORMATION shall not include:

 

(a)                                  information which isor later becomes, generally available to the public through no fault of therecipient;

 

(b)                                 information which isprovided to the recipient by an independent third party having no obligation tokeep the information secret;

 

(c)                                  information which therecipient can establish by written documentation was previously known to it; or

 

(d)                                 information which therecipient can establish by written documentation was independently developed byor on behalf of recipient by persons who have not received CONFIDENTIALINFORMATION.

 

The partiesmutually agree that the specific terms (but not the overall existence) of thisAgreement shall be considered CONFIDENTIAL INFORMATION and both parties shallbe subject to the provisions of Article 11 of this Agreement with respectthereto.  Notwithstanding the foregoing,the parties may disclose the terms of this Agreement to investors or potentialinvestors who are bound by terms of confidentiality and non-use at least asstringent as those which ACT is bound by herein, and the parties may discloseCONFIDENTIAL INFORMATION in accordance with Section 14.3 hereof.  The parties may also disclose CONFIDENTIALINFORMATION required to be disclosed to comply with applicable law or courtorder, provided that the recipient gives prior written notice of the requireddisclosure to the discloser.

 

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ARTICLE 2- LICENSE GRANT & RIGHTS OF FIRST NEGOTIATION

 

2.1                                 ACThereby grants to LICENSEE and LICENSEE accepts, subject to the terms andconditions hereof, a worldwide, nonexclusive, royalty-bearing license in theFIELD OF USE under the PATENT RIGHTS to develop, make, have made, use, sell andhave sold LICENSED PRODUCTS.  To theextent this grant includes a sublicense of any UMASS PATENT RIGHTS, suchsublicense is subject to the relevant terms of the UMASS LICENSE.

 

2.2                                 The license “to havemade” and “to have sold” granted in Paragraph 2.1 means that LICENSEE maycontract with a third party or parties, or with any of its AFFILIATED COMPANIES,to develop, manufacture or sell LICENSED PRODUCTS on behalf of LICENSEE.

 

2.3                                 Immediately uponexecution of this Agreement ACT shall provide LICENSEE with all information anddata relating to the PATENT RIGHTS as may be reasonably necessary to allowLICENSEE to exploit the license granted hereunder.

 

2.4                                 To the extent theUniversity, the federal government or any other parties have rights in thePatent Rights pursuant to Article 2 of the UMASS LICENSE, the Licensegranted hereunder is subject to such rights.

 

2.5                                 LICENSEEacknowledges that a portion of the Patent Rights licensed to LICENSEE hereunderis owned by the University and exclusively licensed to ACT under the UMASSLICENSE.  LICENSEE acknowledges,understands and agrees that in the event the UMASS LICENSE is terminated forany reason pursuant to the provisions of the UMASS LICENSE, this Agreementshall automatically be assigned to the University and LICENSEE will thereaftermake any payments due to ACT under this Agreement directly to the University.  Further, promptly following such termination,LICENSEE and the University will enter into a direct license agreementreflecting the applicable terms of this Agreement and the UMASS LICENSE.  ACT agrees to use commercially reasonableefforts to maintain its rights to the UMASS PATENT RIGHTS, including (i)complying with all material terms and obligations of the UMASS LICENSE and (ii)diligently prosecuting the PATENT RIGHTS to the extent that ACT has controlover such prosecution.

 

2.6                                 ACT hereby grants toLICENSEE a right of first negotiation to acquire a non-exclusive license to anyfuture patents owned by or licensed to ACT that are necessary to produce LICENSEDPRODUCTS in the FIELD OF USE.  In theevent ACT acquires any such patents, ACT shall notify LICENSEE in writing ofits acquisition of such patent rights.  LICENSEEshall then have a period of thirty (30) days to notify ACT in writing of itsdesire to acquire a non-exclusive license to use such patent rights to develop,manufacture, use and sell LICENSED PRODUCTS in the FIELD OF USE.  If LICENSEE so notifies ACT, then LICENSEE andACT shall negotiate in good faith for not more than sixty (60) days to reachagreement on the terms of such license.  If,by the end of such sixty (60) day period LICENSEE and ACT have not reached agreement,ACT shall be free to enter into non-exclusive licenses with third parties withrespect to such patent rights for the FIELD OF USE, provided that if ACT entersinto such a non-exclusive

 

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license with a third party, ACT agrees thatit will offer LICENSEE a similar non-exclusive license with financial terms noless favorable to LICENSEE than those set forth in the agreement entered intobetween ACT and such other third party.

 

2.7                                 ACThereby grants to LICENSEE a right of first negotiation to acquire a non-exclusiveor exclusive license under the PATENT RIGHTS to develop, manufacture, use andsell products in the field of the cloning of swine for the sole purposes ofdeveloping, producing and selling swine-derived tissues or cells fortransplantation of such tissues or cells in humans as follows: ACT shall notifyLICENSEE in writing of its intention to enter into negotiations for such alicense with a third party.  LICENSEEshall then have a period of thirty (30) days to notify ACT in writing of itswillingness to enter into such a non-exclusive or exclusive license.  If LICENSEE so notifies ACT, then LICENSEE andACT shall negotiate in good faith for not more than sixty (60) days to reachagreement on the terms of the license.  If,by the end of such sixty (60) day period, LICENSEE and ACT have not reachedagreement, (1) ACT shall be free to enter such an exclusive license with athird party but only on terms more favorable to ACT than those terms firmlyoffered by LICENSEE, and (2) ACT shall be free to enter into such non-exclusivelicenses with third parties, provided that if ACT enters into such a non-exclusivelicense with a third party, ACT agrees that it will offer LICENSEE a similarnon-exclusive license with financial terms no worse than those set forth in theagreement entered into between ACT and such other third party.

 

ARTICLE 3- DUE DILIGENCE

 

3.1                                 LICENSEE shall use itscommercially reasonable and diligent efforts to bring one or more LICENSEDPRODUCTS to market.

 

3.2                                 LICENSEE shallmaintain complete and accurate records of LICENSED PRODUCTS that are developed,made, used or sold by or on behalf of LICENSEE under this Agreement.  Not later than May 1st of each yearfollowing the Effective Date, LICENSEE shall furnish ACT with a summary reporton the progress of its efforts during the prior year to develop andcommercialize LICENSED PRODUCTS, including without limitation research and developmentefforts, efforts to obtain regulatory approval, marketing efforts (including LICENSEDPRODUCTS developed, made, used or sold) and sales figures, provided that such reportsshall be deemed CONFIDENTIAL INFORMATION of LICENSEE subject to the provisionsof Article 11 of this Agreement.

 

ARTICLE 4- CONSIDERATION

 

4.1                                 InitialPayment. LICENSEE shall pay to ACT an initial License Fee of FIVE HUNDREDTHOUSAND DOLLARS ($500,000), due and payable as follows: (1) To the extent notpreviously paid to ACT in accordance with the terms of the Term Sheet LICENSEEshall pay to ACT $250,000 on the EFFECTIVE DATE of this Agreement; and (2)LICENSEE shall pay to ACT $250,000 on or before the first anniversary of theEffective Date, provided that if the NIST grant described in Exhibit B attachedhereto (the “NIST Grant”) has not been awarded to LICENSEE or its AffiliatedCompanies or assignees on or before the first anniversary of the

 

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EFFECTIVE DATELICENSEE shall thereafter pay to ACT said $250,000 within thirty (30) days ofthe award of the NIST Grant to LICENSEE or its AFFILIATED COMPANIES orassignee, and provided further that if the NIST Grant is not awarded toLICENSEE or its AFFILIATED COMPANIES or assignee, said second $250,000 fee willnot be due.  LICENSEE’s obligation to paythe $250,000 fee required under clause (2) of the preceding sentence shallsurvive the termination of this Agreement, unless the Agreement is terminateddue to the material breach or default of the Agreement by ACT.

 

The LicenseFee is not refundable and is not creditable against other payments due to ACTunder this Agreement.

 

4.2                                 Royalties.

 

(a)                                  In partialconsideration of the license granted to LICENSEE from ACT in Article 2 ofthis Agreement, LICENSEE shall pay to ACT an earned royalty equal to 3% of theNET SALES of all LICENSED PRODUCTS sold by or on behalf of LICENSEE; provided,however, that in the event that LICENSEE is legally required to make royaltypayments to one or more third parties (other than AFFILIATED COMPANIES) inorder to make, use or sell LICENSED PRODUCTS, LICENSEE’s royalty payment shallbe decreased by one-half of one percent (0.5%) for each one percent (1%) ofactual royalty payments made to third parties under such required licenses;provided, however, that in no event shall such royalty payment be reduced below1%.

 

(b)                                 No multiple royaltiesshall be payable because any LICENSED PRODUCT, its development, manufacture,use or sale are or shall be covered by more than one patent or patentapplication within the PATENT RIGHTS.

 

(c)                                  The obligation ofLICENSEE to pay royalties on sales of LICENSED PRODUCTS, the development,manufacture, use or sale of which is covered by a VALID CLAIM of the PATENTRIGHTS, shall terminate on a country-by-country basis concurrently with theexpiration or termination of the last applicable VALID CLAIM within the PATENTRIGHTS in the country in which the LICENSED PRODUCT or LICENSED PROCESS ismanufactured, sold or performed.

 

4.3                                 Except as otherwiseallowed under this Agreement, all payments due hereunder shall be paid in fullwithout deduction of taxes or other fees which may be imposed by any governmentand which shall be paid by LICENSEE; provided, however, that ACT shall pay all incometaxes and taxes in lieu of income taxes attributable to ACT on account of thepayments made by LICENSEE to ACT hereunder.

 

4.4                                 All payments duehereunder shall be paid in United States dollars.  If any currency conversion shall be requiredin connection with the payment of royalties hereunder, such conversion shall bemade pursuant to the method for currency conversion generally practiced by 

 

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LICENSEE in the conduct of its regular business operations.

 

4.5                                 LICENSEE shall pay ACTinterest on any overdue amounts at the rate of four percent (4%) per annum fromthe date when such payment should have been made pursuant to Paragraph 4.1, 4.2or 5.3, as applicable.

 

4.6                                 If LICENSEE fails totimely make any payments to ACT as provided in this Agreement, such failureshall constitute a material breach of LICENSEE’s obligations under this Agreement,and ACT shall have the right to terminate this Agreement in accordance with Article 10.

 

ARTICLE 5- REPORTS AND RECORDS

 

5.1                                 LICENSEE shall keepfull, complete, true and accurate books of account containing all particularsrelating to the manufacture and sales with respect to LICENSED PRODUCTS, andany allowed credits, which may be necessary to ascertain and verify the royaltiespayable to ACT.  Said books and accountsshall be kept at LICENSEE’s principal place of business.  At the request of ACT, but not more than oncein each calendar year and provided ACT provides LICENSEE with at least ten (10)days prior written notice, LICENSEE shall permit an independent certifiedpublic accountant, selected by ACT, to have access, during regular businesshours of LICENSEE, to such records to determine, for any calendar quarter commencingnot more than two years prior to the date of such request, the completeness andaccuracy of such books and records, and the accuracy of reports submitted toACT and/or payments made to ACT.  If anysuch inspection discloses an error in any royalty payment, LICENSEE shall payto ACT, within thirty (30) days of the discovery of the error, (a) all deficienciesin royalty payments, (b) interest on such deficiencies from the date suchroyalty payment was due until the date paid at the rate equal to one andone-half percent (11⁄2%) per month, and (c) if such error is in excess of tenpercent (10%) of any royalty payment, the cost of the audit.  In all other cases, the costs of the auditshall be paid for by ACT.  Allinformation disclosed pursuant to an audit shall be treated as CONFIDENTIALINFORMATION of LICENSEE and shall not be disclosed to any third party or usedfor any purpose other than to determine the correctness of the payment.

 

5.2                                 After the firstcommercial sale of a LICENSED PRODUCT, LICENSEE, within forty-five (45) daysafter March 31, June 30, September 30 and December 31, ofeach year, shall deliver to ACT a true and accurate report, giving suchparticulars of the business conducted by or on behalf of LICENSEE during thepreceding three-month period under this Agreement as shall be pertinent to aroyalty accounting hereunder.  Withoutlimiting the generality of the foregoing, these reports shall include at leastthe following:

 

(a)                                  number of LICENSEDPRODUCTS manufactured and sold by or on behalf of LICENSEE;

 

(b)                                 total billings forLICENSED PRODUCTS sold by or on behalf of LICENSEE;

 

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(c)                                  deductions applicableas provided in Paragraph 1.4; and

 

(d)                                 the names andaddresses of all parties making or selling LICENSED PRODUCTS on behalf ofLICENSEE.

 

5.3                                 Witheach such report submitted, LICENSEE shall pay to ACT the royalties due andpayable under this Agreement.  If noroyalties shall be due, LICENSEE shall so report.

 

ARTICLE 6*-*MOST FAVORED LICENSOR

 

If LICENSEEshall hereafter enter into any license or other agreement with Infigen, Inc. (“Infigen”)or any corporation, company, partnership, joint venture and/or firm thatcontrols, is controlled by or is under common control with Infigen (“INFIGENAFFILIATED COMPANIES”) (where “control” shall have the meaning set forth in Section 1.6)that grants LICENSEE rights under the current patents or proprietary technologyof Infigen or any INFIGEN AFFILIATED COMPANIES that is directed to nucleartransfer to manufacture or sell organs derived from nuclear transfer producedswine for transplantation in humans on terms that are more favorable on thewhole to Infigen or any INFIGEN AFFILIATED COMPANIES than the terms set forthin this Agreement, then LICENSEE will (a) promptly notify ACT of such license,and (b) extend to ACT the terms of the noticed license, effective as of thedate (or dates) on which they became effective in respect to the noticedlicense.  Such extension of the terms ofthe noticed license shall be effective, however, only if ACT shall, withinsixty (60) days of receipt of such notice, advise LICENSEE that it accepts allterms of the noticed license.

 

ARTICLE 7- PATENT PROSECUTION

 

ACT shall besolely responsible for the continued prosecution of pending patent applicationsincluded in the PATENT RIGHTS and the issuance of such applications included inthe PATENT RIGHTS after allowance.  Theprosecution, filing and maintenance of all patents and applications included inthe PATENT RIGHTS shall be the primary responsibility of ACT. Additionally, ACTshall pay all government fees in any given country required to maintain thePATENT RIGHTS; and shall submit evidence to LICENSEE upon request that suchfees have been timely paid.  ACT agreesto keep LICENSEE informed on a regular basis of the status of the PATENTRIGHTS.

 

ARTICLE 8- PROSECUTION OF INFRINGERSAND DEFENSE OF PATENT RIGHTS

 

The partiesagree to notify each other in writing of any actual or threatened infringementby a third party of the PATENT RIGHTS or of any claim of invalidity,unenforceability, or non-infringement of the PATENT RIGHTS.  ACT shall have the sole responsibility toprosecute or defend such claims, as applicable.  LICENSEE shall if requested provide reasonableassistance to ACT, at ACT’s expense, in connection with the prosecution ordefense of such claims; provided, however, that nothing contained herein shallrequire LICENSEE to disclose to or otherwise provide ACT with copies ofdocuments or other written information obtained from a third party

 

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under aconfidentiality obligation, unless such disclosure would be responsive to adiscovery request by ACT to LICENSEE made in connection with a dispute.

 

ARTICLE 9- INDEMNIFICATION,LIMITATION OF LIABILITY AND INSURANCE

 

9.1                                 LICENSEE shall at alltimes during the term of this Agreement and thereafter, indemnify, defend andhold harmless ACT and the University and their trustees, directors, officers,employees and Affiliated Companies (individually an “indemnified party” or collectivelythe “indemnified parties”) against all third party liabilities of any kindwhatsoever, including legal expenses and reasonable attorneys’ fees, arisingout of the death of or injury to any person or persons or out of any damage toproperty resulting from the development, manufacture, sale, use, consumption oradvertisement of the LICENSED PRODUCT(s) or arising from any obligation, act oromission, or from a breach of any representation or warranty of LICENSEE hereunder,excepting only claims that the use of the PATENT RIGHTS infringe third partyintellectual property, claims to the extent resulting from any breach by ACT ofthis Agreement, or claims to the extent resulting from the negligence orwillful misconduct of ACT or its trustees, directors, officers or employees.  Any indemnification obligations set forth inthis Agreement shall be subject to the following conditions: (i) theindemnified party shall notify the indemnifying party in writing promptly uponlearning of any claim or suit for which indemnification is sought; (ii) theindemnifying party shall have control of the defense or settlement, providedthat the indemnified party shall have the right (but not the obligation) toparticipate in such defense or settlement with counsel at its selection and atits sole expense; and (iii) the indemnified party shall reasonably cooperatewith the defense, at the indemnifying party’s expense.

 

9.2                                 EXCEPT AS OTHERWISEEXPRESSLY SET FORTH IN THIS AGREEMENT, ACT, ITS TRUSTEES, DIRECTORS, OFFICERS,EMPLOYEES, AND AFFILIATES MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OFANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OFMERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF PATENT RIGHTSCLAIMS, ISSUED OR PENDING, AND THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHEROR NOT DISCOVERABLE.  NOTHING IN THISAGREEMENT SHALL BE CONSTRUED AS A REPRESENTATION MADE OR WARRANTY GIVEN BY ACTTHAT THE PRACTICE BY LICENSEE OF THE LICENSE GRANTED HEREUNDER SHALL NOTINFRINGE THE PATENT RIGHTS OF ANY THIRD PARTY.  IN NO EVENT SHALL EITHER PARTY, ITS TRUSTEES,DIRECTORS, OFFICERS, EMPLOYEES AND AFFILIATES BE LIABLE FOR INCIDENTAL OR CONSEQUENTIALDAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGE OR INJURY TO PROPERTY AND LOSTPROFITS, REGARDLESS OF WHETHER SUCH PARTY SHALL BE ADVISED, SHALL HAVE OTHERREASON TO KNOW, OR IN FACT SHALL KNOW OF THE POSSIBILITY UNLESS DUE TO THEGROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH PARTY.

 

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9.3                                 LICENSEEagrees to maintain insurance or self-insurance that is reasonably adequate tofulfill any potential obligation to the indemnified parties, but not less thanOne Million Dollars ($1,000,000) for injuries to any one person arising out ofa single occurrence and One Million Dollars ($1,000,000) for injuries to allpersons arising out of a single occurrence.  Before the beginning of any clinical trialsusing LICENSED PRODUCTS, LICENSEE shall increase insurance coverage forinjuries to all persons arising out of a single occurrence to at least FiveMillion Dollars ($5,000,000).  LICENSEEshall provide ACT, upon request, with written evidence of insurance orself-insurance.  LICENSEE shall continueto maintain such insurance or self-insurance during the term of this Agreementand after the expiration or termination of this Agreement for a period of five(5) years.

 

ARTICLE 10- TERMINATION

 

10.1                           This Agreement is effectivewhen signed by all parties and shall extend until the expiration of the last toexpire patent issued under PATENT RIGHTS, unless sooner terminated as providedin this Article 10.

 

10.2                           Upon any material breach ordefault of this Agreement by LICENSEE (including, but not limited to, breach ordefault under Article 4), ACT shall have the right to terminate this Agreementand the rights, privileges and license granted hereunder effective on sixty(60) days’ notice to LICENSEE.  Suchtermination shall become automatically effective unless LICENSEE shall have curedany such material breach or default prior to the expiration of the sixty (60)day period.

 

10.3                           Upon any material breach ordefault of this Agreement by ACT, LICENSEE shall have the right to terminatethis Agreement and the rights granted hereunder effective on sixty (60) days’notice to ACT.  Such termination shallbecome automatically effective unless ACT shall have cured any such materialbreach or default prior to the expiration of the sixty (60) day period.

 

10.4                           LICENSEE shall have theright to terminate this Agreement at any time for any reason on sixty (60) days’prior written notice to ACT; provided, however, that in the event LICENSEE soterminates this Agreement, LICENSEE shall, despite such termination pay to ACTthe fee set forth in clause (2) of Paragraph 4.1 of Article 4 inaccordance with the terms set forth in said Paragraph 4.1.

 

10.5                           Upon termination of thisAgreement for any reason, nothing herein shall be construed to release eitherparty from any obligation that matured prior to the effective date of suchtermination; and Articles 1, 5, 9, 10.4, 10.5, 11, 13 and 14 shall survive anysuch termination; provided, however, that no such termination shall modify orimpair LICENSEE’s obligation to pay royalties for LICENSED PRODUCTS sold priorto such termination.

 

ARTICLE 11- CONFIDENTIALITY

 

During the course of this Agreement, ACT andLICENSEE may provide each other with

 

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CONFIDENTIAL INFORMATION.  All CONFIDENTIAL INFORMATION shall be designatedin writing as such by the discloser at the time of disclosure or, if disclosedorally, shall be designated in writing as CONFIDENTIAL INFORMATION withinthirty (30) days after such oral disclosure.  ACT and LICENSEE each intend to maintain theconfidential or trade secret status of their CONFIDENTIAL INFORMATION.  Each shall exercise reasonable care to protectthe CONFIDENTIAL INFORMATION of the other from disclosure to third parties; nosuch disclosure shall be made without the other’s written permission.  Upon termination or expiration of thisAgreement, ACT and/or LICENSEE shall comply with the other’s written request toreturn all CONFIDENTIAL INFORMATION.  Exceptas expressly provided herein, neither ACT nor LICENSEE is granted any licenseto use the other’s CONFIDENTIAL INFORMATION.  The obligations of ACT and LICENSEE under thisArticle 11 shall survive any expiration or termination of this Agreement.

 

ARTICLE 12 - PAYMENTS, NOTICES, AND OTHER COMMUNICATIONS

 

Any payment,notice or other communication pursuant to this Agreement shall be in writingand sent by certified first class mail, return receipt requested, postageprepaid, or by nationally recognized overnight carrier addressed to the partiesat the following addresses or such other addresses as such party furnishes tothe other party in accordance with this paragraph.  Such notices, payments or other communicationsshall be effective upon receipt.

 

In the case ofACT:

Advanced CellTechnology, Inc.

One InnovationDrive

Worcester, MA01605

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

 

With a copyto:

Pierce Atwood

One MonumentSquare

Portland, ME04101

Attention:William L. Worden, Esq.

 

In the case ofLICENSEE:

 

ImmergeBioTherapeutics, Inc.      

Building 75

Third Avenue

Charlestown,MA 02129

Attention:Julia Greenstein, Ph.D.

 

With a copyto:                                     Hale& Dorr, L.L.P.

60 StateStreet

Boston, MA

Attention:Steven Singer, Esq.

 

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ARTICLE 13- REPRESENTATIONS AND WARRANTIES

 

13.1                           ACT represents and warrantsthat it owns or has licensed with a sublicensable interest the PATENT RIGHTS,that it has the full legal right and power to grant the licenses grantedhereunder, that this Agreement constitutes the binding legal obligation of ACT,enforceable in accordance with its terms and that the execution and performanceof this Agreement by ACT will not violate, contravene or conflict with anyother agreement to which ACT is a party or by which it is bound or with anylaw, rule or regulation applicable to ACT.

 

13.2                           LICENSEE represents andwarrants that it and its AFFILIATED COMPANIES have not entered into any licenseor other agreement with Infigen or any INFIGEN AFFILIATED COMPANIES, and willnot, during the term of this Agreement enter into any license or other agreementwith Infigen or any INFIGEN AFFILIATED COMPANIES that grants LICENSEE rightsunder the current patent or proprietary technology of Infigen directed tonuclear transfer to manufacture or sell organs derived from nuclear transferproduced swine for transplantation in humans on terms that are more favorableon the whole to Infigen or any INFIGEN AFFILIATED COMPANIES than the terms setforth in this Agreement.  LICENSEEfurther represents and warrants that it has full corporate power and authorityto enter into this Agreement, that this Agreement constitutes the binding legalobligation of LICENSEE and that execution and performance of this Agreement byLICENSEE will not violate, contravene or conflict with any other agreement towhich LICENSEE is a party or by which it is bound or with any law, rule or regulationapplicable to LICENSEE.

 

ARTICLE 14- MISCELLANEOUS PROVISIONS

 

14.1                           LICENSEEshall comply with all local, state, federal and international laws andregulations relating to the development, manufacture, use and sale of LICENSEDPRODUCTS.  Without limiting thegenerality of the foregoing.  LICENSEEagrees to comply with the following:

 

(a)                                  LICENSEE shall obtainall necessary approvals from the FDA and any similar governmental authoritiesof any foreign jurisdiction in which LICENSEE intends to make, use, or sellLICENSED PRODUCTS.

 

(b)                                 LICENSEE shall usediligent efforts to comply with all United States laws and regulationscontrolling the export of certain commodities and technical data, includingwithout limitation all Export Administration Regulations of the United StatesDepartment of Commerce.  Among otherthings, these laws and regulations prohibit, or require a license for, theexport of certain types of commodities and technical data to specifiedcountries.  LICENSEE agrees that it willbear sole responsibility for any violation of such laws and regulations, and itwill indemnify, defend, and hold ACT harmless (in accordance with Paragraph 9.1of Article 9 hereof) for the consequences of any such violation.

 

(c)                                  To the extent thatany invention claimed in the PATENT RIGHTS has

 

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been partially funded by the United StatesGovernment, and only to the extent required by applicable laws and regulations,LICENSEE agrees that any LICENSED PRODUCTS used or sold in the United Stateswill be manufactured substantially in the United States or its territories.  Current law provides that if domesticmanufacturer is not commercially feasible under the circumstances, ACT and/orthe University may seek a waiver of this requirement from the relevant federalagency on behalf of LICENSEE and, upon LICENSEE’S request, shall cooperate withLICENSEE in seeking such a waiver.

 

14.2                           LICENSEE shall not create orincur or cause to be incurred or to exist any lien, encumbrance, pledge,charge, restriction or other security interest of any kind upon the PATENT RIGHTSwithout the prior written consent of ACT and the University.

 

14.3                       Either party may originatepublicity, news releases or other public announcements, written or oral (“Announcements”),relating to the existence, but not the financial and monetary terms, of thisAgreement, without the prior written approval of the other party, provided thatsuch party shall have given the other party at least ten (10) days priorwritten notice of the proposed text of the Announcement for the purpose ofgiving the other party the opportunity to comment on the text of suchAnnouncement, such comments to be reasonably incorporated and provided furtherthat such Announcements will be prepared in a manner consistent with thehighest standards of professionalism.  Anyreferences to the University in Announcements shall be subject to the approvalof the University, which approval shall not be unreasonably withheld.  The foregoing notwithstanding, the partiesshall have the right to make Announcements (including Announcements includingreference to the financial and monetary terms of this Agreement) without theconsent of the other party or the University, as applicable, in any prospectus,offering memorandum, or other document or filing required by applicable securitieslaws or other applicable law or regulation, provided that such party shall havegiven the other party or the University, as applicable, at least ten (10) daysprior written notice of the proposed text for the purpose of giving the otherparty or the University, as applicable, the opportunity to comment on suchtext.

 

14.4                           No implied licenses aregranted pursuant to the terms of this Agreement.  No licensed rights shall be created byimplication or estoppel.

 

14.5                           Nothing herein shall bedeemed 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 eachparty renders its services under this Agreement shall be within its sole discretion. Neither party shall be responsible for theacts or omissions of the other party, nor shall either party have authority tospeak for, represent or obligate the other party in any way without priorwritten authority from the other party.

 

14.6                           To the extent commerciallyfeasible, and consistent with prevailing business practices, all LICENSEDPRODUCTS manufactured or sold under this Agreement will be marked with thenumber of each issued patent included in the PATENT RIGHTS that applies to

 

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such product.

 

14.7                           This Agreement shall beconstrued, governed, interpreted and applied in accordance with the laws of theCommonwealth of Massachusetts, U.S.A., without regard to principles ofconflicts of law thereof, except that questions affecting the construction andeffect of any patent shall be determined by the law of the country in which thepatent was granted.

 

14.8                           The parties heretoacknowledge that this Agreement supersedes the Term Sheet (and any and allother prior oral or written agreements, understandings, or expressions with respectto the subject matter hereof) and sets forth the entire Agreement andunderstanding of the parties hereto as to the subject matter hereof, and shallnot be subject to any change or modification except by the execution of awritten instrument subscribed to by the parties hereto.

 

14.9                           The provisions of thisAgreement are severable, and in the event that any provisions of this Agreementshall be determined to be invalid or unenforceable under any controlling bodyof the law, such invalidity or unenforceability shall not in any way affect thevalidity or enforceability of the remaining provisions hereof.

 

14.10                     The failure of either party toassert a right hereunder or to insist upon compliance with any term orcondition of this Agreement shall not constitute a waiver of that right orexcuse a similar subsequent failure to perform any such term or condition bythe other party.

 

14.11                     This Agreement may not be assignedby either party without the prior written consent of the other party and theUniversity, which consent shall not be unreasonably withheld or delayed.

 

IN WITNESSWHEREOF, the parties have duly executed this Agreement the day arid year firstset forth above.

 
| ADVANCED CELL TECHNOLOGY, INC.           |                                |
|------------------------------------------|-------------------------------------|
|                                     |                                |
|                                     |                                |
| By:                                      |   /s/ Michael D. West     |   |   |
| Printed Name: Michael D. West, Ph.D.     |                                |
| Its: President & CEO                 |                                |
|                                     |                                |
| IMMERGE BIOTHERAPEUTICS, INC.            |                                |
|                                     |                                |
|                                     |                                |
| By:                                      |   /s/ Julia L. Greenstein |   |   |
| Printed Name: Julia L. Greenstein, Ph.D. |                                |
| Its: President & CEO                 |                                |

 

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CONSENT AND AGREEMENT

 

For value received, theUniversity hereby consents to the sublicense by ACT to LICENSEE of the UMASSPATENT RIGHTS as set forth under this Agreement.

 
| THE UNIVERSITY OF MASSACHUSETTS |                                             |
|---------------------------------|--------------------------------------------------|
|                            |                                             |
|                            |                                             |
| By:                             | /s/ Thomas Chmura                                |   |   |
| Printed Name:                   |   Thomas Chmura                        |   |   |
| Its:                            |   Vice President, Economic Development |   |   |
| Date:                           |                                             |   |   |
|                            |                                             |
|                            |                                             |
| BY:                             | /s/ Joseph F. X. McGuirl                         |   |   |
| Printed Name:                   | Joseph F. X. McGuirl                             |   |   |
| Title:                          | Executive Director, Office                       |   |   |
|                            | of Commerical Ventures                           |   |   |
|                            | and Intellectual Property                        |   |   |
| Date:                           |                                             |   |   |
|                                 |                                                  |  |  |  |  |  |  |  |  |

 

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