**Exhibit 10.32**

 

SUBLEASE AGREEMENT

 

This Sublease Agreement (this “Sublease”), made as ofthe          day of November,2004, by and between BioReliance Corp, a Delaware corporation, having an officeat 14920 Broschart Road, Rockville, Maryland 20850 (hereinafter referred to as “Sublandlord”),and ADVANCED CELL TECHNOLOGY, a Delaware Corporation, having an office at                                             (hereinafter referred to as “Subtenant”);

 

WITNESSETH:

 

WHEREAS, pursuant to that certain Lease dated December 27, 1999(the “Overlease”), ARE-Five Biotech LLC, predecessor landlord toAlexandria Real Estate Entities (hereinafter referred to as “Overlandlord”),leased to Q-One Biotech, Inc., predecessor tenant to Sublandlord, aslessee, approximately 13,900 square feet of rentable area (the “Premises”)of the building located at Five Biotech, 381 Plantation Street, Worcester, MA(hereinafter referred to as the “Building”), upon and subject to theterms and conditions set forth in the Overlease; and

 

WHEREAS, Subtenant desires to sublet the Premises from Sublandlord uponthe terms and conditions hereinafter set forth.

 

NOW, THEREFORE, the parties hereto, for themselves, their successorsand assigns, mutually covenant and agree as follows:

 

1.             CapitalizedTerms.  Any capitalized terms nototherwise defined in this Sublease shall have the meanings ascribed thereto inthe Overlease.

 

2.             Demise.  Sublandlord does hereby sublease to Subtenant,and Subtenant does hereby sublease from Sublandlord, for the term and upon theconditions hereinafter provided, the entire Premises as more particularlydelineated on Exhibit A attached hereto and made part hereof,together with the right to use the common areas and facilities as contemplatedby Article 1 of the Overlease.

 

3.             Condition of thePremises.  Subtenant represents thatit has thoroughly examined the Building and the Premises and that the same areaccepted by Subtenant in their “as is”, “where is” condition existing on thedate of this Sublease.  The Premisesshall be delivered to Subtenant free of occupants and personal property, andotherwise in broom clean condition.

 

4.             Term.  The term of this Sublease shall commence on November 20,2004 or such later date as of which the Overlandlord has consented to thisSublease, as required by the Overlease (the “Term Commencement Date”),and shall end on April 30, 2010, or on such earlier date upon which saidterm may expire or be terminated pursuant to any of the conditions orlimitations or other provisions of this Sublease or pursuant to law (which datefor the termination of the term hereof shall hereafter be called the “TerminationDate”).

 

----

 

5              Yearly FixedRent.  Subtenant shall pay toSublandlord from and after December 20, 2004 (the “Rent Commencement Date”)to Sublandlord, as Yearly Fixed Rent, the amounts set forth below:

 
| **Rental Period** | ** ** | **Yearly Fixed Rent Per  Square Foot** | ** ** | **Yearly Fixed Rent** | ** ** | **Monthly Fixed Rent** | ** ** |
|-------------------|------------|----------------------------------------|------------|-----------------------|------------|------------------------|------------|
| 12/20/04-7/31/05  |       | $                                      | 15.50      |                  | $          | 161,588                |       | $ | 17,954.16 |   |
| 8/l/05-7/31/06    |       | $                                      | 16.00      |                  | $          | 222,400                |       | $ | 18,533.33 |   |
| 8/1/06-7/31/07    |       | $                                      | 16.50      |                  | $          | 229,350                |       | $ | 19,112.50 |   |
| 8/1/07-7/31/08    |       | $                                      | 17.00      |                  | $          | 236,300                |       | $ | 19,691.66 |   |
| 8/1/08-7/31/09    |       | $                                      | 17.50      |                  | $          | 243,250                |       | $ | 20,270.83 |   |
| 8/1/09-4/30/10    |       | $                                      | 18.00      |                  | $          | 187,650                |       | $ | 20,850.00 |   |

 

YearlyFixed Rent shall be paid to Sublandlord on the 30th day of each month during the term, commencing on the Rent CommencementDate, in advance, in equal monthly installments, without notice, offset,deduction (except as otherwise provided in this Sublease) or demand.  Yearly Fixed Rent for any partial month duringthe term shall be pro rated on a per diem basis.

 

6.             Additional Rent. In addition to Yearly Fixed Rent,Subtenant shall pay to Sublandlord, from and after the Rent Commencement Date,all other payments due and payable under the Overlease.  Subtenant shall make such payments toSublandlord on account of additional rent as aforesaid at the same time(subject to paragraph 12 of this Sublease below), and in the same manner, asrequired by the Overlease.

 

7.             Utilities.  Utilities for the Premises shall be paid foras Additional Rent by Subtenant as provided in the Overlease.

 

8.             TerminationRight.  Subtenant shall have theone-time right, by notice given to Sublandlord on or before July 31, 2007accompanied by payment of Three Hundred Forty Five Thousand Eight HundredNinety Three and 00/100 Dollars ($345,893.00), to accelerate the expirationdate of this Sublease to July 31, 2008.

 

9.             Security Deposit. On January 15th, 2005, Subtenant shall deposit with Sublandlord security for performanceof all of its obligations under this Sublease in an amount equal to SeventeenThousand Nine Hundred Fifty Four and 16/100 Dollars ($17,954.16) in cash, and**within thirty days thereafter, Subtenantshall deposit with Sublandlord as security an additional Seventeen ThousandNine Hundred Fifty Four and 16/100 Dollars ($17,954.16), resulting in anaggregate security deposit held by Sublandlord of Thirty Five Thousand NineHundred Eight and 32/100 Dollars (notwithstanding anything in the Overlease incorporated,herein to the contrary), which may be commingled by Sublandlord, and may, atSublandlord’s election, be used by Sublandlord, in whole or in part, to fundSublandlord’s security deposit obligations under the Overlease.  If Tenant fails to deliver to

 

2

----

 

Landlordthe second installment of the security deposit as specified above: (i) suchfailure shall be deemed a default pursuant to the terms of this SubleaseAgreement and the Overlease; and (ii) the aggregate security deposit dueunder this Section 9 shall immediately be increased to an amount equal toFifty Three Thousand Eight Hundred Sixty Two and 50/100 Dollars ($53,862.50).

 

10.           Insurance.  Subtenant shall obtain and maintain allinsurance types and coverage as specified in the Overlease to be obtained andmaintained by Sublandlord, as lessee, in amounts not less than those specifiedin the Overlease.  All such policies ofinsurance shall name Overlandlord and Sublandlord as additional insuredsthereunder.  Subtenant’s insurance shallbe primary over Overlandlord’s and Sublandlord’s insurance.

 

11.           Indemnificationof the Overlandlord and the Sublandlord.  Notwithstanding any other provision of thisSublease or the Overlease to the contrary, Subtenant will save Overlandlord andSublandlord harmless, and will exonerate and indemnify Overlandlord andSublandlord, from and against any and all claims, liabilities or penaltiesasserted by or on behalf of any person, firm, corporation or public authority:

 

(a)           On account of or based upon any injury to person, or lossof or damage to property sustained or occurring on the Premises on account ofor based upon the act, omission, fault, negligence or misconduct of any personwhomsoever (other than Overlandlord and Sublandlord or their respective agents,contractors or employees);

 

(b)           On account of or based upon any injury to person or lossof or damage to property, sustained or occurring elsewhere (other than on thePremises) in or about the Building (and, in particular, without limiting thegenerality of the foregoing on or about the elevators, stairways, publiccorridors, sidewalks, concourses, arcades, malls, galleries, vehicular tunnels,approaches, areaways, roof, or other appurtenances and facilities used inconnection with the Building or the Premises) arising out of the negligent actor omission or willful misconduct of Subtenant, its agents, employees orinvitees; and

 

(c)           On account of or based upon (including monies due onaccount of) any work or thing whatsoever done (other than by Overlandlord orSublandlord or their respective contractors, agents or employees of either) onthe Premises during the term of this Sublease and during the period of time, ifany, prior to the Term Commencement Date that Subtenant may have been givenaccess to the Premises.

 

If either of Overlandlord or Sublandlord shall, without fault on itspart, be made a party to any litigation commenced against Subtenant orcommenced by Subtenant against a party other than Overlandlord or Sublandlord,then Subtenant shall protect, indemnify and hold Overlandlord or Sublandlordharmless and shall pay all costs, expenses and reasonable legal fees incurredor paid by Overlandlord or Sublandlord in connection with such litigation.  Subtenant shall also pay all costs, expensesand reasonable third-party legal fees that may be incurred or paid byOverlandlord or Sublandlord in successfully enforcing the terms, covenants andconditions in this Sublease.  Sublandlordshall pay all costs, expenses and reasonable legal fees

 

3

----

 

thatmay be incurred or paid by Subtenant in successfully enforcing the terms,covenants and conditions in this Sublease against Sublandlord.

 

Subtenant shall neither do not permit anything to be done which wouldcause a default under the Overlease, or termination or forfeiture by reason ofany right of termination or forfeiture, reserved or vested in the Overlandlordunder the Overlease, and Subtenant shall indemnify and hold Sublandlordharmless from and against all claims of any kind whatsoever by reason of thetermination or forfeiture of Sublandlord’s interest under the Overlease causedby such breach or default on the part of Subtenant.

 

12.           Terms ofOverlease.  Except as expresslyotherwise provided in this paragraph 12 and in paragraphs 13, 14 and 15, asbetween the parties hereto, all of the terms, provisions, covenants andconditions of the Overlease are incorporated herein by reference and herebymade a part of this Sublease.  However,for purposes of such incorporation by reference, all references to Landlord andTenant shall be deemed references to Sublandlord and Subtenant, respectively,all references to the Premises or the Demised Premises shall be deemed referencesto the Premises and all references to the term of the Overlease shall be deemedreferences to the term of this Sublease.  Subtenant shall be entitled to the same noticeand cure periods, less three (3) business days, as Sublandlord is affordedpursuant to Article 19 of the Overlease.  Sublandlord shall have all of the rights ofthe Overlandlord under the Overlease as against Subtenant and, as between theparties hereto, Subtenant agrees to observe and perform all of the terms,covenants and conditions on Sublandlord’s part to be observed and performedunder the Overlease.

 

13.           Overlandlord’sServices and Obligations under the Overlease.  Notwithstanding anything in this Sublease tothe contrary, including without limitation paragraph 12 hereof, Subtenant agreesthat Sublandlord shall not be obligated to furnish for Subtenant any servicesof any nature whatsoever, including, without limitation, climate control,elevator service, cleaning services, security, electrical energy andmiscellaneous power services, water and other public utilities and constructionof any improvements at the Premises, or to perform any of Overlandlord’sobligations under the Overlease. Sublandlord shall, upon written request ofSubtenant, make reasonable efforts (at no cost or expense to Sublandlord unlessSubtenant first agrees to reimburse Sublandlord in full for all such reasonablecosts and expenses) to enforce the obligations of Overlandlord under theOverlease.  In enforcing performance ofsuch obligations of Overlandlord, Sublandlord shall upon Subtenant’s reasonablewritten request, promptly notify Overlandlord of its nonperformance under theOverlease and request that Overlandlord perform its obligations under theOverlease.  If, within ten (10) businessdays after receipt of written request from Subtenant, Sublandlord shall fail orrefuse to take necessary action to enforce Sublandlord’s rights againstOverlandlord with respect to the Premises, Subtenant shall have the right totake such action in its own name, and for that purpose and only to such extent,all of the rights of Sublandlord as “Tenant” with respect to the Premises underthe Overlease hereby are conferred upon and assigned to Subtenant, andSubtenant hereby is subrogated to such rights to the extent that the same shallapply to the Premises.

 

14.           Sublandlord’sApproval of the Subtenant’s Alterations and Improvements.  Notwithstanding anything to the contrary setforth in Article 11 of the Overlease as incorporated herein by reference,Subtenant shall first obtain the written consent of Sublandlord with respect

 

4

----

 

toany proposed alterations, installments, removals, additions or improvements toany part of the Premises, which consent shall not be unreasonably withheld,conditioned or delayed.  Sublandlordshall be deemed reasonable in refusing its consent if Overlandlord has refusedto grant consent.  Nothing in thisSublease shall be construed as an agreement that Sublandlord has any obligationto perform any alterations, installments, removals, additions or improvementsfor Subtenant whatsoever.

 

15.           Certain OverleaseProvisions Not Incorporated.  Thefollowing provisions of the Overlease are expressly not incorporatedinto this Sublease: Articles 2[except for the entire third paragraph thereof,but for the reference to Landlord’s Work, of which there is none], 3(a) [exceptfor the first, fourth and fifth sentences thereof], 37 and 39(a), as well asthe entirety of Exhibit C thereof.  Subtenantacknowledges that, except for the redacted portions thereof, it has reviewedthe Overlease attached hereto and made a part hereof as Exhibit B,and that it is familiar with the contents thereof.

 

16.           Assigning andSubletting.  Notwithstanding anythingto the contrary in Article 21 of the Overlease as incorporated herein byreference, Subtenant covenants and agrees that neither this Sublease nor theterm hereof and leasehold hereby granted, nor any interest herein or therein,will be assigned, mortgaged, pledged, encumbered or otherwise transferred,voluntarily, by operation of law or otherwise, and that neither the Premises,nor any part thereof will be encumbered in any manner by reason of any act oromission on the part of Subtenant, or used or occupied, or permitted to be usedor occupied, by anyone other than Subtenant, or for any use or purposes otherthan as permitted hereunder, or be sublet or offered or advertised forsubletting without the prior written consent of Overlandlord in accordance withthe provisions of the Overlease and the prior written consent of Sublandlord,which consent may be withheld in Sublandlord’s sole discretion.

 

17.           Notice.  Any and all communications delivered hereundershall be in writing and shall be given by hand delivery or by certified mail,return receipt requested, addressed as follows: if to Overlandlord:                                                                                ,

ifto Sublandlord: BioReliance Corp, 14920 Broschart, Rd., Rockville, MD 20850Attention: Mr. Paul Nevins; with a copy to Goodwin Procter LLP, ExchangePlace, Boston, Massachusetts 02109, Attention: Michael J. Litchman, Esq.;and if to Subtenant:                                                                     ,Attention:                                           ,or to such other address and attention as any of the above shall notify theothers in writing.

 

18.           Successors andAssigns.  This Sublease andeverything herein contained shall extend to and bind and inure to the benefitof Sublandlord and its successors and assigns and Subtenant and its heirs,executors, administrators and permitted successors and assigns.  No rights shall inure to the benefit of anyassignee, subtenant or occupant unless the provisions of Article 21 of theOverlease and paragraph 16 of this Sublease are complied with.

 

19.           Miscellaneous.  NeitherSublandlord nor any agent or representative of Sublandlord has made or ismaking, and Subtenant in executing and delivering this Sublease is not relyingupon, any warranties, representations, promises or statements whatsoever,except to

 

5

----

 

theextent expressly set forth in this Sublease.  All understandings and agreements, if any,heretofore had between the parties are merged into this Sublease, which alonefully and completely expresses the agreement of the parties.  No surrender of possession of the Premises orof any part thereof or of any remainder of the term of this Sublease shallrelease Subtenant from any of its obligations hereunder unless accepted bySublandlord in writing.  The receipt andretention by Sublandlord of Yearly Fixed Rent from anyone other than Subtenantshall not be deemed a waiver of the breach by Subtenant of any covenant,agreement, term or provision of this Sublease, or as the acceptance of suchother person as a tenant, or as a release of Subtenant from the covenants,agreements, terms, provisions and conditions herein contained.  The receipt and retention by Sublandlord ofYearly Fixed Rent or Additional Rent with knowledge of the breach of anycovenant, agreement, term, provision or condition herein contained shall not bedeemed a waiver of such breach.  ThisSublease shall be governed by, and construed in accordance with the laws of TheCommonwealth of Massachusetts.  Neitherthis Sublease nor any provision hereof may be modified, amended, discharged orterminated, except by an instrument in writing signed by both parties.  This Sublease constitutes the entire agreementof the parties hereto with respect to****thePremises.  If any term or provision ofthis Sublease or the application thereof to any person or circumstance shall toany extent be held invalid or unenforceable, the remainder of this Sublease orthe application of such term or provision to other persons or circumstancesshall not be affected thereby, and each term and provision of this Subleaseshall be valid and enforceable to the fullest extent permitted by law.

 

20.           Quiet Enjoyment. So long as Subtenant is not in default(beyond any applicable notice and cure period) under this Sublease, its quietenjoyment of the Premises shall not be disturbed or interfered with bySublandlord or anyone claiming by, through or under Sublandlord.

 

21.           Overlandlord’sConsent.  This Sublease shall not beeffective unless and until Overlandlord’s written consent hereto, in form andcontent reasonably acceptable to Subtenant, has been delivered to Subtenant.  Sublandlord shall make diligent efforts toobtain such consent from Overlandlord, and if Sublandlord has not deliveredsuch consent to Subtenant within fifteen business days of the date on whichSubtenant delivers executed counterparts of this Sublease to Sublandlord,either party shall have the right to cancel this Sublease upon written noticeto the other.  It is hereby acknowledgedby Sublandlord and Subtenant that Overlandlord’s consent to this Sublease shallnot create any contractual liability or duty on the part of Overlandlord or itsagent to the Subtenant, and shall not in any manner increase, decrease orotherwise affect the rights and obligations of Overlandlord and Sublandlord, asthe lessee under the Overlease, with respect to the Premises.

 

22.           Sublandlord’sConsent.  Whenever Sublandlord’sconsent is required under this Sublease, Sublandlord’s rejection of a requestmade by Subtenant shall not deemed unreasonable, in any case, if such rejectionis based on Overlandlord’s rejection of such request.

 

23.           Brokers.  Sublandlord and Subtenant each herebyrepresent and warrant that it has not dealt with any broker other than Cushman &Wakefield in connection with this Sublease for the Premises, and thatSublandlord shall pay any brokerage fees which shall be due in connection

 

6

----

 

therewith. Each party shall indemnify the otheragainst any cost or liability resulting from the indemnifying party’s breach ofthe foregoing representation and warranty.

 

24.           Place forPayments.  All payments required tobe made by the Subtenant herein shall be made to Sublandlord, at Sublandlord’soffice specified in paragraph 16,****Attention: Accounts Payabledepartment or to such agent or agents of Sublandlord or at such other place asSublandlord shall hereafter from time to time direct in writing.

 

25.           Termination ofOverlease.  In the event of a defaultunder the Overlease that results in the termination of the Overlease, Subtenantshall, at the option of Overlandlord, attorn and recognize Overlandlord asSublandlord hereunder and shall, promptly upon Overlandlord’s request, executeand deliver all instruments necessary or appropriate to confirm such attornmentand recognition; provided that Sublandlord’s default was not directly caused bya default by Subtenant under the Overlease.

 

26.           Sublandlord’sObligations.  Sublandlord herebyagrees to make all payments of rent and other amounts required to be paid toOverlandlord under the Overlease, to perform all other obligations imposed uponit by the Overlease which are not assumed by Subtenant hereunder, and toindemnify Subtenant against and hold it harmless from all reasonable costs andexpenses incurred by Subtenant or asserted against it as a result of thefailure of Sublandlord to perform its obligations hereunder, provided suchfailure is not a result of the action or inaction of Subtenant or its agents,employees or contractors.

 

27.           Parking.  Subtenant shall have all rights to the parkingspaces provided to Sublandlord under the Overlease.

 

(The remainder of this page isintentionally left blank.)

 

7

----

 

IN WITNESS WHEREOF, Sublandlord and Subtenant have duly executed thisSublease, as an instrument under seal, as of the day and year first abovewritten.

 

 
|   | SUBLANDLORD                |
|--------|----------------------------|
|   |                       |
|   | BioReliance Corp           |
|   |                       |
|   | By:                        | /s/ John M. Green |   |
|   |                       | Name: | JOHN M. GREEN |   |
|   |                       | Title: | VP & CFO - BIORELIANCE |   |
|   |                       |
|   |                       |
|   | SUBTENANT:                 |
|   |                       |
|   | ADVANCED CELL TECHNOLOGIES |
|   |                       |
|   | By:                        |   |   |
|   |                       | Name: |   |   |
|   |                       | Title: |   |   |
|   |                       |
|   |                       |
|   | By:                        |   |   |
|   |                       | Name: |   |   |
|   |                       | Title: |   |   |
|        |                            |  |  |  |  |  |  |

 

8

----