**Exhibit 10.5**

 

**NONEXCLUSIVE SUBLICENSE AGREEMENTbetweenADVANCED CELL TECHNOLOGY, INC.andINFIGEN, INC.**

 

This Nonexclusive Sublicense Agreement (the “Agreement”) is made andentered into as of this 1st day of August, 2003 (the “Effective Date”) by andbetween ADVANCED CELL TECHNOLOGY, INC., a Delaware corporation with a place ofbusiness at One Innovation Drive, Worcester, Massachusetts 01605 (“ACT”) andINFIGEN, INC., a Delaware corporation with a place of business at 1825 InfinityDrive, DeForest, Wisconsin 53532 (“Infigen,” and together with ACT, the “Parties”).

 

**RECITALS**

 

WHEREAS, ACT and Infigen have previously entered into a certain “FinalSettlement Agreement” dated August 6, 1999 pursuant to which, among otherthings, Infigen licensed to ACT certain patents and patent applications; and

 

WHEREAS, ACT and Infigen are parties to litigation currently pending inMassachusetts Superior Court entitled *Advanced Cell Technology,Inc. v. Infigen, Inc.,* Civil Action No. 01-0376C (“the Massachusettslitigation”); and

 

WHEREAS, the court in the Massachusetts litigation entered on June 25,2002 Findings of Fact, Rulings of Law and an Order for Judgment; and

 

WHEREAS, post judgment motions and other issues remain pending in theMassachusetts litigation; and

 

WHEREAS, ACT and Infigen desire to settle the Massachusetts litigationand to replace the license contained in the Final Settlement Agreement andcourt orders included in the Final Settlement Agreement with a more definitiveand comprehensive license agreement; and

 

WHEREAS, ACT owns or has a license or licenses granting ACT the abilityto grant a sublicense the ACT Patent Rights (as defined below), which includescertain scientific methods and techniques for cloning animals that may bevaluable in the Infigen Field (as defined below); and

 

WHEREAS, Infigen desires to obtain a non-exclusive sublicense from ACTunder the ACT Patents Rights to use the ACT Patent Rights for the purpose ofdeveloping and selling products and performing services in the Infigen Field;and

 

WHEREAS, Infigen owns or has a license or licenses granting Infigen theability to sublicense the Infigen Patent Rights (as defined below), whichincludes certain scientific

 

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methods and techniques for cloning animals that may be valuable in the ACTField (as defined below); and

 

WHEREAS, ACT desires to obtain a non-exclusive sublicense from Infigenunder the Infigen Patents Rights to use the Infigen Patent Rights for thepurpose of developing and selling products and performing services in the ACTField; and

 

WHEREAS, ACT is willing to grant such a sublicense to Infigen, andInfigen is willing to grant such a sublicense to ACT, upon the terms andconditions set forth below; and

 

WHEREAS, ACT and Infigen have agreed that this Agreement will supercedeany and all previous agreements, orders, and injunctions;

 

NOW THEREFORE, in consideration of the mutual covenants, agreements,representations, and warranties contained in this Agreement, and other good andvaluable consideration, the adequacy and receipt of which is herebyacknowledged, ACT and Infigen agree as follows:

 

**1.****             DEFINITIONS**. Asused in this Agreement, the following terms shall have the meanings set forthbelow.

 

1.1           *“ACT CellTherapy Field”* means the development, making, using, selling, offeringto sell, or importing of therapeutic products that are composed of a) humancells for human cell therapy, or a formulation including such cells (with orwithout genetic modification), and the rendering of services that relate to theproduction of such products, or b) non-human animal cells for veterinary celltherapy, or a formulation including such cells (with or without geneticmodification) and the rendering of services that relate to the production ofsuch products.  For purposes of thisAgreement, the term “human or non-human animal cells” includes any and allcells, the nuclear genome of which is substantially (i.e. greater than 99%)derived from a human or non-human genome, as the case may be.  The ACT Cell Therapy Field does not includexenotransplantation of nonhuman cells (i.e. cells containing 1% or more of anonhuman genome) into humans, or human reproductive cloning.  For the purposes of this Agreement, “Formulation”means a delivery mechanism comprised of ingredients for the stable delivery ofcells to the therapeutic need.

 

1.2           *“ACT PatentRights”* means the patents identified on Schedule A attached hereto,all divisionals, continuations, and continuations-in-part that derive from theidentified patent applications and any patents issuing on said applicationstogether with all reissues, reexaminations, extensions and substitutionsthereof.  ACT Patent Rights as they existas of the Effective Date are set forth on Schedule A.  The Parties agree that Schedule A mayfrom time to time be amended upon the mutual agreement of the Parties after theEffective Date to reflect changes thereto.

 

1.3           *“ACT Product”*means any product that cannot be developed, manufactured, used, or sold withoutinfringing one or more Valid Claims under the ACT Patent Rights.

 

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1.4           *“ACT Service”*means any service that cannot be developed or performed without using at leastone process that infringes one or more Valid Claims under the ACT PatentRights.

 

1.5           *“ConfidentialInformation”* includes, without limitation, any scientific,technical, financial, customer, trade business or other information disclosedby one party to the other, which is specifically designated by the disclosingparty as confidential or proprietary, or if disclosed orally is summarized andconfirmed in writing as confidential within thirty (30) days after the date oforal disclosure.  Each party’sConfidential Information specifically includes without limitation therespective party’s information relating to the patent applications included inthe ACT Patent Rights and the Infigen Patent Rights, the ACT Products or ACTServices, or the Infigen Products or Infigen Services, as applicable.  Confidential Information does not includeinformation which (a) was known to the receiving party at the time it wasdisclosed, other than by previous disclosure by the disclosing party, asevidenced by the written records of the receiving party at the time ofdisclosure; (b) is at the time of disclosure or later becomes publicly knownother than through a breach of this Agreement; (c) is lawfully and in goodfaith made available to the receiving party by a third party who, to thereceiving party’s knowledge after inquiry, did not derive it from thedisclosing party and who imposed no obligation of confidence on the receivingparty; or (d) is developed by the receiving party independent of any disclosureby the disclosing party, as evidenced by the written records of the receivingparty.

 

1.6           *“InfigenField”* means:

 

(a)           Theresearch and discovery of genes or proteins or other molecules that play a rolein the reprogramming (i.e., the restoration in whole or in part of pluripotencyand/or totipotency) of cells.  Anyinventions or products resulting from such research and which would notinfringe the ACT Patent Rights will be the property of Infigen.

 

(b)           Thedevelopment, making, using, selling, offering to sell, or importing of productsthat are composed of non-human cells or tissues or a formulation including suchcells or tissues, for the purpose of xenotransplantation of such cells, tissuesor organs for therapy in humans

(c)           Thedevelopment, making, using, selling, or importing of proteins (excluding allImmunoglobulin which is not sheep immunoglobulin) produced in the blood ofcloned animals;

(d)           Thedevelopment, making, using, selling, or offering to sell genetically modifiedor non genetically modified ovine, bovine and porcine animals as models ofhuman disease.

 

For purposes of this Agreement, “xenotransplantation of cells” includesany and all cells, the nuclear genome of which is substantially (i.e. greaterthan 99%) derived from a non-human genome.

 

1.7           *“InfigenPatent Rights”* means the patents and patent applications identifiedon Schedule B attached hereto, all divisionals, continuations, andcontinuations-in-part that derive from the identified patent applications andany patents issuing on said applications together with

 

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all reissues, reexaminations, extensions and substitutions thereof.  The Infigen Patent Rights as they exist as ofthe Effective Date are set forth on Schedule B.  The Parties agree that Schedule B mayfrom time to time be amended upon the mutual agreement of the Parties after theEffective Date to reflect changes thereto.

 

1.8           *“InfigenProduct”* means any product that cannot be developed, manufactured, used,or sold without infringing one or more Valid Claims under the Infigen PatentRights

 

1.9           *“InfigenService”* means any service that cannot be developed, manufactured, used,or sold without infringing one or more Valid Claims under the Infigen PatentRights

 

1.10         *“NetCommercial Sales”* means the total invoice price charged on all salesby ACT or Infigen, as applicable (or by any ACT or Infigen sublicensee or byany third party on behalf of ACT or Infigen) of ACT Products and ACT Services,or Infigen Products and Infigen Services, as applicable, in any country afterdeducting, to the extent not already deducted, normal and customary trade,dealer, quantity, and cash discounts actually allowed; allowances for credits grantedon account of rejections, returns, or price reductions; governmental salestaxes and other charges imposed on such sales; and freight, insurance, customs,duties, and other landing charges.  Inthe event any product is sold as a component of a combination of functional elements,net sales price for purposes of determining royalty payments on suchcombination shall be calculated by multiplying the average per unit net salesprice of the ACT Product or Infigen Product portion, as applicable, of thecombination when sold separately in the applicable country during the year inwhich the sale was made by the number of units of product sold as part of such combinationproduct.

 

1.11         *“Territory”*  means the world.

 

1.12         *“UMASSLicense”* means the Exclusive License Agreement between ACT and theUniversity dated April 16, 1996, as amended by the Amendment to ExclusiveLicense Agreement dated September 1,1999, the Second Amendment to ExclusiveLicense Agreement dated May 31, 2000 and the Third Amendment to ExclusiveLicense Agreement dated September 19, 2002.

 

1.13         *“UMASSPatent Rights”* means ACT Patent Rights licensed by ACT from the Universityunder the UMASS License.

 

1.14         *“University”*means the University of Massachusetts.

 

1.15         *“Valid Claim”*means a claim of an issued or pending patent which has not lapsed or becomeabandoned or declared invalid or unenforceable by a court of competentjurisdiction or an administrative agency from which no appeal can be or hasbeen taken within the time allowed for that appeal.

 

The use herein of the plural shall include the singular and *vice versa* and the use of the masculine shall include thefeminine.  Additional terms may bedefined throughout this Agreement.

 

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**2.****             THE FINAL SETTLEMENTAGREEMENT.**

 

The Parties agree that the applicable provisions of the FinalSettlement Agreement are hereby superceded by this Agreement.

 

**3.****             GRANT OF RIGHTS.**

 

3.1           License Grants fromACT to Infigen.

 

(a)           Subject to the terms ofthis Agreement, ACT hereby grants to Infigen a nonexclusive, royalty-bearing,worldwide license, with a limited right to sublicense, in the ACT Patent Rightsto develop, make, have made, import, use, sell and have sold ACT Products inthe Territory in the Infigen Field and to develop and perform ACT Services inthe Territory in the Infigen Field.  ACTacknowledges, understands and agrees that under the licenses granted herein toInfigen, Infigen has the right to utilize the ACT Patent Rights in the conductof research, preclinical studies or other work related to the Infigen Fields ordirected to the ultimate development and manufacture of ACT Products and/or ACTServices.  To the extent this grant includesa sublicense of any UMASS Patent Rights, such sublicense is subject to therelevant terms of the UMASS License as it may be amended from time to time,provided that in the event of any inconsistency between the UMASS License andSection 3.l(c) hereof, Section 3.l(c) hereof shall govern.  The parties acknowledge, understand and agreethat the license granted herein includes only a limited right to grant furthersublicenses to or under the ACT Patent Rights under Section 3.1(b).  The license “to have made” and “to have sold”granted herein means only that Infigen may, without ACT’s consent, contractwith a third party or parties to develop, manufacture or sell ACT Products onbehalf of Infigen.

 

(b)           Sublicenses.Except as expressly provided in Section 3.1 (a), Infigen shall have the rightto grant sublicenses under the ACT Patent Rights, subject to the approval ofACT, which approval shall be granted or denied in ACT’s sole discretion (asapproved by ACT, an “Infigen Sublicensee”).

 

(c)           The UMASS License.INIFIGEN acknowledges that a portion of the ACT Patent Rights licensed toInfigen hereunder is owned by the University and is licensed to ACT under theUMASS License.  In the event the UMASSLicense expires or is terminated for any reason pursuant to the provisions ofthe UMASS License or otherwise, the terms of the letter agreement between ACT,Infigen and the University attached hereto on Schedule C shall apply tothis Agreement (d) ACT acknowledges that Infigen has a desire to license therights to produce Immunoglobulin in the blood of cloned animals and agrees tonotify Infigen pursuant to section 13.3 of this Agreement if and when itacquires such rights with a right to sublicense, within 30 days of obtainingsuch rights

 

3.2           License Grant fromInfigen to ACT.

 

(a)           Subject to the terms ofthis Agreement, Infigen hereby grants to ACT a nonexclusive, royalty-bearing,worldwide license, with a limited right to sublicense, in the Infigen PatentRights to develop, make, have made, import, use, sell and have sold Infigen

 

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Products in the Territory in the ACT Cell Therapy Fields and to developand perform Infigen Services in the Territory in the ACT Cell Therapy Field.  Infigen acknowledges, understands and agreesthat under the licenses granted herein to ACT, ACT has the right to utilize theInfigen Patent Rights in the conduct of research, preclinical studies or otherwork related to the ACT Fields or directed to the ultimate development andmanufacture of Infigen Products and/or Infigen Services.  The parties acknowledge, understand and agreethat the licenses granted herein include only a limited right to grant furthersublicenses to or under the Infigen Patent Rights under Section 3.2(b).  The license “to have made” and “to have sold”granted herein means only that ACT may, without Infigen’s consent, contractwith a third party or parties to develop, manufacture or sell Infigen Productson behalf of ACT.

 

(b)           Sublicenses.Except as expressly provided in Section 3.2 (a), ACT shall have the right togrant sublicense under the Infigen Patent Rights, subject to the approval ofInfigen, which approval shall be granted or denied in Infigen’s sole discretion(as approved by Infigen, an “ACT Sublicensee”).

 

3.3           Disclosure of LicensedPatents and Patent Applications.

 

(a)           On the Effective Date,Infigen shall disclose to ACT all patents and patent applications included inthe Infigen Patent Rights in existence.  Afterthe Effective Date, Infigen shall disclose to ACT within 30 days of acquisitionor filing, as applicable, any patents or patent applications included in theInfigen Patent Rights.  ACT shall treatthe information disclosed by Infigen pursuant to this paragraph in accordancewith the confidentiality obligations set forth in Article 8 below.

 

(b)           On the Effective DateACT shall disclose to Infigen all patents and patent applications included inthe ACT Patent Rights in existence.  Afterthe Effective Date, ACT shall disclose to Infigen within 30 days of acquisitionor filing, as applicable, any patents or patent applications included in theACT Patent Rights.  Infigen shall treatthe information disclosed by ACT pursuant to this paragraph in accordance withthe confidentiality obligations set forth in Article 8 below.

 

**4.**             **OBLIGATIONSRELATING TO COMMERCIALIZATION.**

 

4.1           DiligenceRequirements.

 

(a)           Infigen DiligenceRequirements. Infigen shall use diligent efforts to develop ACT Products orACT Services and to introduce ACT Products or ACT Services into the commercialmarket; thereafter, Infigen shall make ACT Products or ACT Services reasonablyavailable to the public.

 

(b)           ACT DiligenceRequirements. ACT shall use diligent efforts to develop Infigen Products orInfigen Services and to introduce Infigen Products or Infigen Services into thecommercial market; thereafter, ACT shall make Infigen Products or InfigenServices reasonably available to the public.

 

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4.2           SummaryReports by Infigen.

 

(a)           Summary Reports byInfigen. Infigen shall maintain complete and accurate records of ACTProducts and ACT Services that are made, used, sold or performed by Infigen (orby any Infigen Sublicensee or by any third party on behalf of Infigen) underthis Agreement.  Not later than May 1st of each year following theEffective Date, Infigen shall furnish ACT with an executive summary report onthe progress of its efforts during the prior year to develop and commercializeACT Products or ACT Services, including without limitation research and developmentefforts, efforts to obtain regulatory approval, marketing efforts (includingACT Products and ACT Services made, used, sold or performed) and sales figures,provided that such reports shall be deemed Confidential Information subject tothe provisions of Article 8 of this Agreement.

 

(b)           Summary Reports byACT. ACT shall maintain complete and accurate records of Infigen Productsand Infigen Services that are made, used, sold or performed by ACT (or by anyACT Sublicensee or by any third party on behalf of ACT) under this Agreement,Not later than May 1st of each year following the Effective Date, ACT shallfurnish Infigen with an executive summary report on the progress of its effortsduring the prior year to develop and commercialize Infigen Products or InfigenServices, Including without limitation research and development efforts,efforts to obtain regulatory approval, marketing efforts (including Infigen Productsand Infigen Services made, used, sold or performed) and sales figures, providedthat such reports shall be deemed Confidential Information subject to theprovisions of Article 8 of this Agreement.

 

4.3           Failure to FulfillObligations.

 

(a)           Failure of Infigento Fulfill Obligations. In the event that ACT determines that Infigen hasnot fulfilled its obligations under this Article 4, ACT shall furnish Infigenwith written notice of such determination.  Within sixty (60) days after receipt of suchnotice, Infigen shall either (i) fulfill the relevant obligation or (ii)negotiate with ACT a mutually acceptable schedule of revised obligations,failing which ACT shall have the right immediately upon written notice toInfigen to terminate Infigen’s rights as granted under this sublicense withrespect to the Infigen Field and the ACT Patent Rights.

 

(b)           Failure of ACT toFulfill Obligations. In the event that Infigen determines that ACT has notfulfilled its obligations under this Article 4, Infigen shall furnish ACT with writtennotice of such determination.  Withinsixty (60) days after receipt of such notice, ACT shall either (i) fulfill therelevant obligation or (ii) negotiate with Infigen a mutually acceptable scheduleof revised obligations, failing which Infigen shall have the right immediatelyupon written notice to ACT to terminate a) ACT’s rights as granted under thissublicense with respect to the ACT Cell Therapy Field and the Infigen PatentRights and b) the representations and recitals regarding previous agreements,orders and injunctions.

 

**5. TERM AND TERMINATION.**

 

5.1           General. The licensegranted by ACT to Infigen under Section 3.1(a), and the license granted byInfigen to ACT under Section 3.1(b), will commence on the Effective Date,

 

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and, unless sooner terminated as provided herein, continue until theexpiration of all ACT Patent Rights or Infigen Patent Rights, as applicable,whereupon the license hereunder to Infigen or ACT, as applicable, shall becomepaid-up and royalty free.

 

5.2           Termination forCause. This Agreement may be terminated by either Party for failure by theother Party to (a) make any payment due to the other Party; (b) make any reportdue to the other party; (c) to cure any breach of Section 3.1 or Section 3.2 asthe case may be; (d) to keep any representations, warranty or statement of factincluded in Section 9; (e) failure to keep its corporate form or to petitionfor a relief from creditors for the purposes of liquidation or to petition forrelief under any provisions of the Federal Bankruptcy Code (any of these provisionsin 5.2 (a) through (e) shall constitute a “material breach”).  If a Party is given written notice by theother party of a material breach, this Agreement may be terminated by thenon-breaching party by giving thirty (30) days written notice to the otherparty specifying the cause of the termination; provided, however, that if thebreach is cured within the thirty (30) day period, the notice shall bewithdrawn and shall be of no effect.

 

5.3           Effect ofTermination. The rights and obligations of the parties under Sections 7.4,8.1, 8.2, 10.1, 10.2, 10.3, and 11 shall survive termination of this Agreementand continue in force.  Upon thetermination of this Agreement, each party and its respective Sublicensees (i.e.,ACT Sublicensee or Infigen Sublicensee) may complete and sell any work-in-progressand inventory of ACT Products or Infigen Products and perform any ACT Servicesor Infigen Services which they are obligated to perform under contracts withthird parties, as applicable, that exist as of the effective date oftermination, provided that (i) ACT and/or Infigen, as applicable, is current inpayment of all amounts due to the other party under this Agreement, (ii) ACT orInfigen, as applicable, pays the other party the applicable royalty on such salesof ACT Products or Services or Infigen Products or Services, as applicable, in accordancewith the terms of this Agreement, and (iii) ACT and/or Infigen and itsrespective Sublicensees (i.e., ACT Sublicensee or Infigen Sublicensee),as applicable, shall complete and sell all work-in-progress and inventory ofsuch ACT Products or Infigen Products and complete its obligations to performany ACT Services or Infigen Services, as applicable, within six (6) monthsafter the effective date of termination.  Upon any termination of this Agreement, each partyshall promptly return to the other party all written Confidential Information,and all copies thereof, to the other party.

 

5.4           AdditionalTermination Provisions. The foregoing termination rights are in addition toany termination rights that may be provided elsewhere in this Agreement.

 

**6.****             CONSIDERATION.**

 

6.1           Settlement Agreementand Mutual Release. In partial consideration of the licenses granted hereinand in consideration of the mutual promises set forth in this Agreement, theparties agree to enter into the Settlement Agreement and General Releaseattached hereto as Schedule D.

 

6.2           License Fees.

 

(a)           Payment of LicenseFee by Infigen. Infigen shall pay to ACT an initial

 

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license fee of TEN THOUSAND DOLLARS ($10,000.00), one hundred percent(100%) of which payment shall be deemed earned and shall be due and payable toACT on the Effective Date (the “Infigen Licensee Fee”).  The Infigen License Fee is not refundable andis not creditable against other payments due to ACT under this Agreement.

 

(b)           Payment of LicenseFee by ACT. ACT shall pay to Infigen an initial license fee of TEN THOUSANDDOLLARS ($10,000.00), one hundred percent (100%) of which payment shall bedeemed earned and shall be due and payable to ACT on the Effective Date (the “ACTLicense Fee”).  The ACT License Fee isnot refundable and is not creditable against other payments due to Infigenunder this Agreement.

 

6.3           Royalties, Reportsand Records.

 

(a)           Infigen RoyaltyObligations. For each ACT Product or ACT Service sold or performed byInfigen (or any third party on behalf of Infigen), Infigen shall pay to ACT, ona quarterly basis, a royalty of one and one-half percent (1.5 %) of the NetCommercial Sales by Infigen of ACT Products or ACT Services sold by Infigen (orany third party on behalf of Infigen) so long as the ACT Product or ACTService, where sold would, but for this Agreement, infringe a Valid Claim ofany ACT Patent Right which is licensed to Infigen in such country.

 

(b)           ACT RoyaltyObligations. For each Infigen Product or Infigen Service sold or performedby ACT (or any third party on behalf of ACT) in the ACT Cell Therapy Field, ACTshall pay to Infigen, on a quarterly basis, a royalty of one and one-halfpercent (1.5 %) of the Net Commercial Sales by ACT of Infigen Products orInfigen Services sold by ACT (or any third party on behalf of ACT) so long asthe Infigen Product or Infigen Service, where sold would, but for this Agreement,infringe a Valid Claim of any Infigen Patent Rights which is licensed to ACT insuch country.

 

(c)           The obligation ofInfigen to pay royalties pursuant to Section 6.4(a) on sales of ACT Productsand ACT Services shall terminate on a country-by-country basis concurrentlywith the expiration or termination of the last applicable patent within the ACTPatent Rights in the country in which the ACT Product or ACT Services ismanufactured, sold or performed.

 

(d)           The obligation of ACTto pay royalties pursuant to Section 6.4(b) on sales of Infigen Products andInfigen Services shall terminate on a country-by-country basis concurrentlywith the expiration or termination of the last applicable patent within theInfigen Patent Rights in the country in which the Infigen Product or InfigenServices is manufactured, sold or performed.

 

6.4           Sublicense Income.

 

(a)           Infigen agrees to payACT ten percent (10%) of any and all license fees and up-front fees (whetherpaid in cash, equity of the sublicensee or other consideration), royalties,milestone payments based on the sublicensee’s performance, and premiums overmarket value paid to Infigen for equity investments in Infigen by thesublicensee, received in consideration of the grant of a sublicenses of the ACTPatent Rights, however such sublicenses

 

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may be characterized, but excluding equity investments in Infigen atmarket value (“Infigen Sublicense Revenues”).  In the event a third party desires to pay anon-monetary, or not-easily monetized, consideration in connection with suchsublicensing of the ACT Patent Rights, a fair market value must be establishedfor the license by agreement of the parties before rights may be granted.

 

(b)           ACT agrees to payInfigen ten percent (10%) of any and all license fees and up-front fees(whether paid in cash, equity of the sublicensee or other consideration), royalties,milestone payments based on the sublicensee’s performance, and premiums over marketvalue paid to ACT for equity investments in ACT by the sublicensee, received inconsideration of the grant of sublicenses of Infigen Patent Rights, howeversuch sublicenses may be characterized, but excluding equity investments in ACTat market value (“ACT Sublicense Revenues”).  In the event a third party desires to pay anon-monetary, or not-easily monetized, consideration in connection with suchsublicensing of the Infigen Patent Rights, a fair market value must beestablished for the license by agreement of the parties before rights may be granted.

 

(c)           Each party agrees toprovide to the other, within ten (10) days of the effective date of thisAgreement, a complete list of each sublicensee with which it currently has a sublicenseagreement, along with a copy of each such sublicense agreement.  The parties agree that neither with interferein the contractual relationships between the other and the other’s Sublicensees.

 

6.5           Payments in U.S.Dollars. All payments due under this Agreement shall be payable in UnitedStates currency without deduction for taxes, assessments, exchanges, collectionor other charges of any kind.  Conversionof foreign currency to U.S. dollars shall be made at the conversion ratereported in The Wall Street Journal on the last working day of the calendarquarter to which the payment relates.

 

6.6           Audit Rights

 

(a)           Each party shall submita report to the other party quarterly within 45 days after the end of eachcalendar quarter during the term of this Agreement during which a party has soldACT Products or ACT Services, or Infigen Products or Infigen Services, asapplicable, or received ACT Sublicense Revenues or Infigen Sublicense Revenues,as applicable, stating in each such report the aggregate sales and paymentswith respect to ACT Products and Services, or Infigen Products and Services, asapplicable, during the preceding calendar quarter and the royalty andsublicense revenue as provided herein.  Suchreports shall also include a statement of any credits claimed during thepreceding calendar quarter.  The paymentof royalty and sublicense revenue amounts shall be made concurrently with suchreports.

 

(b)           Each party shall keepfull, complete, true and accurate books of account containing all particularsrelating to the manufacture and sales with respect to ACT Products and Services,or Infigen Products and Services, as applicable, and any allowed credits, whichmay be necessary to ascertain and verify the royalties and sublicense revenuepayable to the other party.  Said booksand accounts shall be kept at the respective party’s principal place ofbusiness.

 

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(c)           At the request of aparty, but not more than once in each calendar year, the other party shallpermit an independent certified public accountant selected by the requestingparty, to have access, during regular business hours of the audited party, tosuch records to determine, for any calendar quarter commencing not more thanthree years prior to the date of such request, the completeness and accuracy ofsuch books and records, and the accuracy of reports submitted to the otherparty and/or payments made to the other party.  If any such inspection discloses an error inany royalty or sublicense revenue payment, the audited party shall pay to theother party, within thirty (30) days of the discovery of the error, (a) alldeficiencies in royalty or sublicense revenue payments, (b) interest on suchdeficiencies from the date such royalty or sublicense revenue payment was dueuntil the date paid at the rate equal to one and one half percent (1.5%) permonth, and (c) if such error is in excess of ten percent (10%) of any royaltyor sublicense revenue payment, the cost of the audit.  In all other cases, the costs of the auditshall be paid for by the party conducting the audit.  All information disclosed pursuant to an auditshall be deemed Confidential Information subject to the provisions of Section 8hereof.

 

**7.****             PROPRIETARY RIGHTS.**

 

7.1           Ownership.

 

(a)           ACT. ACT shallown the ACT Patent Rights.

 

(b)           Infigen. Infigenshall own the Infigen Patent Rights.

 

7.2           ACT Patent Rights.

 

(a)           Responsibility;Costs. ACT will retain primary responsibility for filing, prosecution andmaintenance of the ACT Patent Rights in all countries.  The costs of such filing, prosecution and maintenanceshall be borne by ACT.  ACT and Infigenwill pay the fees and expenses of their respective outside patent counsel forthe activities described in this Section 7.2.

 

(b)           Consultation;Abandonment. ACT will not allow any patent or patent application within theACT Patent Rights to become expired or abandoned without giving Infigen theright to assume responsibility for such patent or patent application, and ifInfigen so elects, ACT will assign such patent or patent application toInfigen, and Infigen will thereafter assume control thereof and all expensesrelated thereto.  Infigen’s rights underthis Section 7.2(b) shall be subject to the rights of the University under theUMASS license (including Article 6 thereof.  Infigen shall make its election under thisparagraph within 30 days from the date ACT notifies Infigen that ACT intends toallow a patent or patent application to expire.  ACT shall have 30 days from the date ofInfigen’s election to assign the patent or patent application to Infigen.

 

(c)           Notice; Enforcementof ACT Patent Rights. Each party shall promptly notify the other in writingof any alleged infringement or misappropriation by third parties of any ACT PatentRights and provide any information available to that party relating to suchalleged infringement or misappropriation.  ACT shall have the primary right, but not theobligation, to take action in its own name to secure the cessation of anyinfringement or misappropriation of the ACT Patent Rights or to enter suitagainst the infringer.  Any such actionwill be at ACT’s expense, employing counsel of its own choosing.  If ACT elects not to exercise its right to

 

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prosecute or take other appropriate action in connection with an infringementor misappropriation of the ACT Patent Rights in the Infigen Fields or fails totake any such action within sixty (60) days of first receiving notice of suchinfringement or misappropriation, Infigen may do so at its own expense,controlling such action. (ACT will permit any such action under this Section tobe brought in its name if required by law.) In the event of any infringement ormisappropriation suit against a third party brought by either party pursuant tothis Section, the party so proceeding shall pay to the other party all of itscosts and expenses (but not attorneys’ fees) in connection with such action andsuch other party shall join in and reasonably cooperate with respect to suchaction to the extent necessary to initiate and maintain it (e.g., by providingrelevant documents, witnesses and testimony, etc.).  Infigen’s rights under this Section 7.2(c)shall be subject to the rights of the University under the UMASS license(including Article 6 thereof).

 

7.3           InfigenPatent Rights

 

(a)           Responsibility;Costs. Infigen will retain primary responsibility for filing, prosecutionand maintenance of the Infigen Patent Rights in all countries.  The costs of such filing, prosecution andmaintenance shall be borne by Infigen.  Infigenand ACT will pay the fees and expenses of their respective outside patentcounsel for the activities described in this Section 7.3

 

(b)           Consultation;Abandonment. Infigen will not allow any patent or patent application withinthe Infigen Patent Rights to become expired or abandoned without giving ACT theright to assume responsibility for such patent or patent application, and ifACT so elects, Infigen will assign such patent or patent application to ACT,and ACT will thereafter assume control thereof and all expenses relatedthereto.  ACT shall make its electionunder this paragraph within 30 days from the date Infigen notifies ACT thatInfigen intends to allow a patent or patent application to expire.  Infigen shall have 30 days from the date of ACT’selection to assign the patent or patent application to ACT.

 

(c)           Notice; Enforcementof Infigen Patent Rights. Each party shall promptly notify the other inwriting of any alleged infringement or misappropriation by third parties of anyInfigen Patent Rights and provide any information available to that partyrelating to such alleged infringement or misappropriation.  Infigen shall have the primary right, but notthe obligation, to take action in its own name to secure the cessation of anyinfringement or misappropriation of the Infigen Patent Rights or to enter suitagainst the infringer.  Any such actionwill be at Infigen’s expense, employing counsel of its own choosing.  If Infigen elects not to exercise its right toprosecute or take other appropriate action in connection with an infringementor misappropriation of the Infigen Patent Rights in the ACT Fields or fails totake any such action within sixty (60) days of first receiving of suchinfringement or misappropriation, ACT may do so at its own expense, controllingsuch action. (Infigen will permit any such action under this Section to bebrought in its name if required by law.) In the event of any infringement or misappropriationsuit against a third party brought by either party pursuant to this Section,the party so proceeding shall pay to the other party all of its costs andexpenses (but not attorneys’ fees) in connection with such action and suchother party shall join in and reasonably cooperate with respect to such actionto the extent necessary to initiate and maintain it (e.g., by providing relevantdocuments, witnesses and testimony, etc.).

 

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7.4           Allocationof Damages or Other Monetary Awards. If either party brings an action underthis Article 7, any damages or other monetary awards recovered by that partyshall be applied proportionately first to defray the unreimbursed costs andexpenses (including reasonable attorneys’ fees) incurred by either or bothparties in the action.  Any remaining balanceshall be the property of the party bringing the action.

 

7.5           SettlementProcedures. No settlement, consent judgment or other voluntary final dispositionof a suit being prosecuted by a party under this Article 7 may be entered intowithout the consent of the other party if such settlement, consent judgment orother voluntary final disposition would alter, derogate or diminish such otherparty’s rights under the Agreement or otherwise materially adversely affectsuch other party, which consent shall not be unreasonably withheld or delayed.

 

**8.****             CONFIDENTIALINFORMATION.**

 

8.1.          ConfidentialInformation; Non-Disclosure. Except to the extent expressly authorized bythis Agreement or by other prior written consent by the disclosing party, eachparty shall during the term of this Agreement and for a period of five (5)years thereafter: (i) treat as confidential all Confidential Information of thedisclosing party; (ii) not use such Confidential Information except asauthorized herein or otherwise authorized in writing, (iii) implementreasonable procedures to prohibit the disclosure, unauthorized duplication,misuse or removal of the disclosing party’s Confidential Information; (iv)except as set forth in (v) below, not disclose such Confidential Information toany third party, and (v) only disclose the Confidential Information to those ofits employees, sublicensees, customers and third party contractors who haveneed to know such Confidential Information.  Without limiting the foregoing, each of theparties shall protect the Confidential Information using at least the sameprocedures and degree of care that it uses to prevent the disclosure of its ownconfidential information of like importance, but in no event less thanreasonable care.

 

8.2           Exceptions.Neither party shall have any obligation or liability to the other with regardto any Confidential Information of the other: (i) that was publicly known atthe time it was disclosed or becomes publicly known through no fault, action,or inaction of the receiving party; (ii) was known to the receiving party,without restriction, at the time of disclosure; (iii) is disclosed with theprior written approval of the disclosing party; (iv) was independentlydeveloped by the receiving party without any use of the Confidential Information;(v) is disclosed pursuant to an order or requirement of a court, administrativeagency, or other governmental body, provided that the receiving party shallprovide prompt advanced notice thereof to enable the disclosing party to seek aprotective order or otherwise take steps necessary to maintain theconfidentiality of the Confidential Information; (vi) is disclosed inconnection with securing regulatory approval or otherwise as may be necessaryto comply with any regulation or request of any governmental or otherregulatory authority, provided that the disclosing party shall take allreasonable steps to limit disclosure of the Confidential Information and tootherwise maintain the confidentiality of the Confidential Information; or(vii) that is provided to the recipient by a third party having no obligationto keep the information secret.

 

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8.3           InjunctiveRelief. ACT and Infigen acknowledge and agree that any breach of theconfidentiality obligations imposed by this Article 8 will constitute immediateand irreparable harm to the party disclosing the Confidential Informationand/or its permitted successors and assigns, which cannot adequately and fullybe compensated by money damages and will warrant, in addition to all otherrights and remedies afforded by law, injunctive relief, specific performance,and/or other equitable relief.  Thedisclosing party’s rights and remedies hereunder are cumulative and notexclusive.

 

8.4           Termination.Upon termination (but not expiration) of this Agreement, and/or upon therequest of the disclosing party at any time, the receiving party shall promptlyreturn to the disclosing party, all copies of Confidential Information receivedfrom such party, and shall return or destroy, and document the destruction of,all summaries, abstracts, extracts, or other documents which contain anyConfidential Information of the other party in any form, except that Infigen orACT, as applicable, shall be permitted to retain a copy (or copies, asnecessary) of such Confidential Information for archival purposes or asrequired by any law or regulation.

 

**9.****             REPRESENTATIONS ANDWARRANTIES.**

 

9.1           NoConflict. Each party warrants and represents to the other that it has thelegal rights and power to enter into this Agreement and to extend the rightsand licenses granted to the other in this Agreement, that this Agreementconstitutes the binding legal obligation of each party, enforceable inaccordance with its terms, that the execution of, and performance of theefforts contemplated by, this Agreement will not conflict with or result in anybreach of any of the terms, conditions, or provisions of, or constitute adefault under, any agreement to which it is a party or by which it is bound orwith any applicable law, rule or regulation, and that any necessary orappropriate permits, consents or approvals have been obtained.  Each party further represents to the otherthat it is not aware of any legal obstacles, including patent rights of others,which could prevent either party from carrying out the provisions of thisAgreement.  During the term of thisAgreement, ACT and Infigen shall not enter into any collaboration or otheragreement, take any action, or fail to take any action that would cause thoserepresentations and warranties to be breached.

 

9.2           Representationsand Warranties by ACT. ACT represents and warrants to Infigen that:

 

(a)           ACT owns or has theright to grant a license to the ACT Patent Rights and has the right to grant toInfigen the license set forth above;

 

(b)           ACT has providedInfigen with a copy of the UMASS License, as amended, with certain termsredacted, and ACT represents and warrants that the said copy is a true andcomplete (except as redacted) copy of the UMASS License as of the EffectiveDate;

 

(c)           ACT has no outstandingencumbrances or agreements including any agreement with academic institutions,universities, or third parties, whether written, oral or implied, which couldbe inconsistent with the license granted herein;

 

(d)           ACT is unaware of anyinformation that would raise a substantial question

 

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as to the validity of any of the ACT Patent Rights, other than theongoing interference claim with Geron Corporation;

 

(e)           To the best of ACT’sknowledge there is no patent issued to a third party as of the Effective Datethat would be infringed by the development, manufacture, use or sale of an ACTProduct or by the performance of rendering of an ACT Service; and

 

9.3           Representationand Warranty by Infigen. Infigen represents and warrants to ACT that:

 

(a)           Infigen owns or has theright to grant a license to the Infigen Patent Rights and has the right togrant to ACT the license set forth above;

 

(b)           Infigen has nooutstanding agreements including any agreement with academic institutions,universities, or third parties, whether written, oral or implied, which could beinconsistent with the license granted herein;

 

(c)           Infigen is unaware ofany information that would raise a substantial question as to the validity ofany of the Infigen Patent Rights, other than the ongoing interference claimwith Geron Corporation;

 

(d)           To the best of Infigen’sknowledge there is no patent issued to a third party as of the Effective Datethat would be infringed by the development, manufacture, use or sale of anInfigen Product or by the performance of rendering of an Infigen Service; and

 

9.4           Disclaimer.

 

(a)           Except as expresslyprovided herein, Infigen does not make any representation or warranty as to thevalidity or scope of the Infigen Patent Rights, nor does Infigen make anyrepresentation or warranty that the exercise of the rights granted to ACT withrespect to the Infigen Patent Rights will not infringe the patent or otherintellectual property rights of any third party.

 

(b)           Except as expresslyprovided herein, ACT does not make any representation or warranty as to thevalidity or scope of the ACT Patent Rights, nor does ACT make anyrepresentation or warranty that the exercise of the rights granted to Infigenwith respect to the ACT Patent Rights will not infringe the patent or otherintellectual property rights of any third party.

 

**10.****          INDEMNIFICATION.**

 

10.1         Indemnificationby ACT. ACT agrees to defend, indemnify and hold harmless Infigen and its affiliates,trustees, agents, directors, officers and employees (the “Infigen IndemnifiedParties”), at ACT’s cost and expense, from and against any and all losses,costs, liabilities, damages, fees and expenses, including reasonable attorneys’fees and expenses (excluding, pursuant to Article 11 hereof, any special,indirect, reliance, incidental, exemplary, cover or consequential damagessuffered or incurred by any of the Infigen Indemnified Parties directly (asopposed to any special, indirect, reliance, incidental, exemplary, cover or

 

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consequential damages suffered or incurred by third parties who are, inturn, seeking the same from the Infigen Indemnified Parties, which shall becovered by the indemnity set forth herein)), incurred or imposed upon any ofthe Infigen Indemnified Parties in connection with any claims (including thirdparty claims), suits, actions, demands or judgments:

 

(a)           arising out of anybreach by ACT of any representation or warranty contained in Article 9 hereof;or

 

(b)           arising out of thedeath or injury to any person or persons or out of any damage to propertyresulting from or otherwise attributable to the making, using, development, testing,registration, distribution and/or sale by or through ACT of any InfigenProducts or Infigen Services under this Agreement, but excepting any claimsthat the Infigen Patent Rights infringe the patents or other intellectualproperty rights of any third party.

 

10.2         Indemnificationby Infigen. Infigen agrees to defend, indemnify and hold harmless ACT andthe University, and their affiliates, trustees, agents, directors, officers andemployees (the “ACT Indemnified Parties”), at Infigen’s cost and expense, fromand against any and all losses, costs, liabilities, damages, fees and expenses,including reasonable attorneys’ fees and expenses (excluding, pursuant toArticle 11 hereof, any special, indirect, reliance, incidental, exemplary,cover or consequential damages suffered or incurred by any of the ACTIndemnified Parties directly (as opposed to any special, indirect, reliance,incidental, exemplary, cover or consequential damages suffered or incurred bythird patties who are, in turn, seeking the same from the ACT IndemnifiedParties, which shall be covered by the indemnity set forth herein)), incurredor imposed upon any of the ACT Indemnified Parties in connection with anyclaims (including third party claims), suits, actions, demands or judgments:

 

(a)           arising out of anybreach by Infigen of any representation or warranty contained in Article 9hereof; or

 

(b)           arising out of thedeath or injury to any person or persons or out of any damage to propertyresulting from or otherwise attributable to the making, using, development, testing,registration, distribution and/or sale by or through Infigen of any ACTProducts or ACT Services under this Agreement, but excepting any claims thatthe ACT Patent Rights infringe the patents or other intellectual propertyrights of any third party.

 

10.3         IndemnificationClaims. Each party shall give the other party prompt notice of any claimfor which indemnification under this Article 10 is or may be applicable andwill cooperate with the indemnifying party in the defense or settlement of suchclaim at the indemnifying party’s expense.  The indemnifying party shall be required toprovide and be entitled to control the defense of any claim covered hereunder(including the right to settle it at the sole discretion of the indemnifyingparty) with counsel reasonably satisfactory to the other party which may, atits own expense, participate in the defense of any claim after the indemnifyingparty assumes control of the defense thereof.  The indemnification obligations in thisSection 10 shall not apply to amounts paid in settlement of such claim if suchsettlement is effected without the consent of the indemnifying party, whichconsent shall not be unreasonably withheld or delayed.  The failure of the indemnified party todeliver notice to the indemnifying party promptly after the commencement of anysuch action, if prejudicial to the indemnifying

 

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party’s ability to defend such action, shall relieve the indemnifyingparty of any liability to the indemnified party under this Section 10, butthe failure to promptly deliver notice to the indemnifying party will notrelieve it of any liability that it may have to the indemnified party otherthan under this Section 10.

 

**11.****          LIMITATION OF LIABILITY.**EXCEPT FOR ANY LIABILITY TO ANY THIRD PARTIES PURSUANT TO ARTICLE 10 OF THISAGREEMENT, IN NO EVENT SHALL EITHER PARTY (OR ITS AFFILIATES, SHAREHOLDERS,DIRECTORS, OFFICERS, EMPLOYEES, OR AGENTS) BE LIABLE FOR ANY SPECIAL, INDIRECT,RELIANCE, INCIDENTAL, EXEMPLARY, COVER, OR CONSEQUENTIAL DAMAGES, INCLUDINGLOSS OF PROFITS AND GOODWILL, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THEPOSSIBILITY OF SUCH DAMAGES, REGARDLESS OF THE THEORY OF LIABILITY.

 

**12.****          INSURANCE.** Eachparty shall obtain and maintain, at all times during the term of this Agreement,general liability insurance with appropriate bodily injury, death and propertydamage limits.  Upon request, a partyshall furnish a certificate of insurance signed by an authorized representativeof its insurance underwriter evidencing such coverage and providing for atleast thirty (30) days’ prior written notice of any cancellation, terminationor reduction of coverage.

 

**13.****          MISCELLANEOUS.**

 

13.1         ForceMajeure. Neither party to this Agreement will be liable for failure to performany of its obligations hereunder during any period in which such performance isdelayed by fire, flood, war, riot, embargo, organized labor stoppage,earthquake, acts of civil and military authorities, or any other acts beyondits reasonable control; provided, however, that the party suffering such delayimmediately notifies the other party of the delay; provided that the nonperformingparty uses commercially reasonable efforts to avoid or remove those causes of nonperformanceunder this Agreement with reasonable dispatch; and provided, further, that eitherparty shall have the right to terminate this Agreement upon thirty (30) daysprior written notice if the delay of the other party due to any of theabove-mentioned causes continues for a period of thirty (30) days.

 

13.2         Assignment.This Agreement, and the rights and obligations thereunder, may not be assignedor transferred, in whole or in part, by either party without the prior writtenconsent of the other party except in the case of merger or acquisitioninvolving the majority of the assets of either party.

 

13.3         Notices.Any payment, notice or other communication required or otherwise given pursuantto this Agreement shall be in writing and delivered by internationallyrecognized overnight delivery service, or by facsimile confirmed by prepaidcertified air mail, and shall be deemed to have been properly served to theaddressee upon receipt of such written communication.

 

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Addresses: In the case of Infigen, the proper address forcommunications shall be:

 
|                                                                                      |            | Infigen                                 |
|-------------------------------------------------------------------------------------------|-----------------|-----------------------------------------|
|                                                                                      |            | 1825 Infinity Drive                     |
|                                                                                      |            |                                    |
|                                                                                      |            | De Forest, WI,53532                     |
|                                                                                      |            |                                    |   |   |
|                                                                                      |            |                                    | Attn: Walter Simson, CEO |
|                                                                                      |            |                                    | Fax: 608 846-0520 |
|                                                                                      |            |                                    |
|                                                                                      |            |                                    |
|                                                                                      |            | With a copy to Roberta Howell, Esq.     |
|                                                                                      |            |                                    |
|                                                                                      |            | Foley and Lardner                       |
|                                                                                      |            |                                    |
|                                                                                      |            | Verex Plaza                             |
|                                                                                      |            |                                    |
|                                                                                      |            | 150 East Gilman Street                  |
|                                                                                      |            |                                    |
|                                                                                      |            | Madison, WI                             |
|                                                                                      |
|                                                                                      |
| and in the case of ACT, the proper address for communications and all  payments shall be: |
|                                                                                      |
|                                                                                      |            | Advanced Cell Technology, Inc.          |
|                                                                                      |            | One Innovation Drive                    |
|                                                                                      |            | Worcester, Massachusetts 01605          |
|                                                                                      |            | Attn: Michael D. West, Ph.D., President |
|                                                                                      |            | Fax: 508-756-0931                       |
|                                                                                      |            |                                    |
|                                                                                      | with a copy to: |
|                                                                                      |            |                                    |
|                                                                                      |            | Pierce Atwood                           |
|                                                                                      |            | One Monument Square                     |
|                                                                                      |            | Portland, Maine 04101                   |
|                                                                                      |            | Attn: William L, Worden, Esq,           |
|                                                                                      |            | Fax: 207-791-1350                       |
|                                                                                           |                 |                                         |  |  |  |

 

13.4         Choiceof Law; Dispute Resolution: Submission to Jurisdiction. This Agreement issubject to and governed by the laws of the State of Delaware, without regard toprinciples of conflicts of law thereof, except that questions affecting theconstruction and effect of any patent shall “be determined by the law of thecountry in which the patent was granted.  Any dispute arising under this Agreement whichis not promptly settled by the parties shall be referred to the Chief ExecutiveOfficers of the parties.  The ChiefExecutive Officers will meet for negotiations

 

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within fifteen (15) days of such referral.  If the dispute has not been resolved withinthirty (30) days (which period may be extended by mutual agreement), subject toany rights to injunctive relief and unless otherwise specifically provided forherein, any dispute will be submitted to binding arbitration.  The arbitration shall be conducted before asingle arbitrator in accordance with the Commercial Arbitration Rules of theAmerican Arbitration Association (AAA), which shall administer the arbitrationand act as appointing authority.  Thearbitration shall take place in the jurisdiction of the defending party, whichshall be the exclusive forum for resolving such dispute, controversy or claim.  The decision of the arbitrator shall be finaland binding upon the parties.  Notwithstandinganything contained above to the contrary, each party shall have the right toinstitute judicial proceedings against the other party in order to enforce theinstituting party’s rights hereunder through specific performance, injunctionor similar equitable relief.  Any suchjudicial proceeding shall be instituted in any state or federal courts locatedin the Commonwealth of Massachusetts or the State of Wisconsin.  ACT and Infigen agree to and hereby do submitto the jurisdiction of such courts, and ACT and Infigen further agree thatvenue is proper in such courts in any such legal action or proceeding.

 

13.5         Compliancewith Law. ACT and Infigen shall comply with all local, state, federal andinternational laws and regulations relating to the development, manufacture,use, and sale of ACT Products and ACT Services, or Infigen Products and InfigenServices, as applicable, in the Territory.  Infigen and ACT shall comply with thefollowing:

 

(a)           Each party shall obtainall necessary approvals from any governmental authorities of any foreignjurisdiction in which it intends to make, use, or sell ACT Products or InfigenProducts or to perform ACT Services or Infigen Services, as applicable, in theTerritory.

 

(b)           Each party shall complyfully with any and all applicable local, state, federal and international lawsand regulations relating to the ACT Products or Infigen Products or to performACT Services or Infigen Services, as applicable, including without limitationall export or import regulations and rules now in effect or as may be issuedfrom time to time by any governmental authority which has jurisdiction relatingto the export of ACT Products or Infigen Products or to perform ACT Services orInfigen Services, as applicable, and any technology relating thereto.  Each party hereby gives written assurance tothe other that it will comply with all such import or export laws andregulations, that it bears sole responsibility for any violation of such lawsand regulations, and that it will indemnify, defend, and hold the other party harmless(in accordance with Article 10) for the consequences of any such violation.

 

13.6         NoEncumbrances. Neither party will create or incur or cause to be incurred orto exist any lien, encumbrance, mortgage, pledge, charge, restriction or othersecurity interest of any kind upon the ACT Patent Rights or the Infigen PatentRights, as applicable, without the prior written consent of the other party.

 

13.7         Counterparts.This Agreement may be executed in any number of counterparts, each of whichshall be deemed an original but all of which together shall constitute one andthe same instrument.

 

13.8         Headings.All headings contained in this Agreement are for convenience of reference onlyand shall not be considered in construing this Agreement.

 

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13.9         BindingEffect. This Agreement shall be binding upon and inure to the benefit ofthe parties and their respective permitted successors and assigns.

 

13.10       Amendmentand Waiver. This Agreement may be amended, supplemented, or otherwisemodified only by means of a written instrument signed by both parties.  Any waiver of any rights or failure to act ina specific instance shall relate only to such instance and shall not beconstrued as an agreement to waive any rights or fail to act in any otherinstance, whether or not similar.

 

13.11       Severability.In the event that any one or more of the provisions contained in this Agreementshall, for any reason, be held to be invalid, illegal or unenforceable in anyrespect, such invalidity, illegality or unenforceability shall not affect anyother provision of this Agreement, and all other provisions shall remain infull force and effect.  If any of theprovisions of this Agreement is held to be excessively broad or invalid,illegal or unenforceable in any jurisdiction, it shall be reformed andconstrued by limiting and reducing it so as to be enforceable to the maximumextent permitted by law in conformance with its original intent.

 

13.12       EntireAgreement. This Agreement constitutes the entire agreement of the partieswith regard to its subject matter, and supersedes all previous written or oralrepresentations, agreements (including the Final Settlement Agreement) andunderstandings between the parties.

 

13.13       Publicity.Neither party, nor any of its Affiliates, shall originate any publicity, newsrelease or other public announcement (“Announcements”), written or oral,relating to this Agreement or the existence of an arrangement between theparties, without the prior written approval of the other party, which approvalshall not be unreasonably withheld, except as otherwise required by law.  Any references to the University in suchAnnouncements shall be subject to the approval of the University.  The foregoing notwithstanding, ACT and Infigenshall have the right to make such Announcements without the consent of theother party or the University, as applicable, in any prospectus, offering memorandum,or other document or filing required by securities laws or other applicable lawor regulation, and to potential business partners under an industry-standardconfidentiality agreement, provided that such party shall have given the otherparty or the University, as applicable, at least ten (10) days’ prior writtennotice of the proposed text for the purpose of giving the other party or theUniversity, as applicable, the opportunity to comment on such text.

 

13.14       NoImplied Licenses. No implied licenses are granted pursuant to the terms of thisAgreement.  No license rights shall becreated by implication or estoppel.

 

13.15       NoAgency. Nothing herein shall be deemed to constitute either party as the agentor representative of the other party, or both parties as joint venturers orpartners for any purpose.  Each partyshall 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 Agreementshall be within its sole discretion.  Neitherparty shall be responsible for the acts or omissions of the other party, andneither party will have authority to speak for, represent or obligate the otherparty in any way without prior written authority from the other party.

 

13.16       Non-Solicitation.During the term of this Agreement and for a period of one (1)

 

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year thereafter, neither party may solicit any person who is employedby or a consultant to the other party to terminate such person’s employment byor consultancy to such party.  As usedherein, the term “solicit” shall include, without limitation, requesting,encouraging, assisting or causing, directly or indirectly, any such employee orconsultant to terminate such person’s employment with or consultancy to suchparty.

 

13.17       ProductMarking. To the extent commercially feasible and permitted by law, and consistentwith prevailing business practices, all ACT Products and Infigen Products, as applicable(or the packaging or product label of such Product(s)), manufactured or soldunder this Agreement will be marked with the number of each issued patent thatapplies to such product.

 

13.18       Bankruptcy.All rights and licenses granted under or pursuant to this Agreement are, andshall otherwise be deemed to be, for purposes of Paragraph 365(n) of the U.S. BankruptcyCode, licenses of rights to “intellectual property” as defined under Paragraph 101(35A)of the U.S. Bankruptcy Code.  The partiesagree that ACT or Infigen, as applicable, as a licensee of such rights underthis Agreement, shall retain and may fully exercise all of its rights andelections under the U.S. Bankruptcy Code.  The parties agree that, in the event of the commencementof a bankruptcy proceeding by or against ACT including under the U.S. BankruptcyCode, Infigen shall be entitled to a complete duplicate of (or complete accessto, as appropriate) any such intellectual property and all embodiments of suchintellectual property, including the ACT Patent Rights, and the same, if notalready in Infigen’s possession, shall be promptly delivered to Infigen uponany such commencement of a bankruptcy proceeding upon written request thereforeby Infigen. The parties further agree that, in the event of the commencement ofa bankruptcy proceeding by or against Infigen including under the U.S. BankruptcyCode, ACT shall be entitled to a complete duplicate of (or complete access to,as appropriate) any such intellectual property and all embodiments of suchintellectual property, including the Infigen Patent Rights, and the same, ifnot already in ACT’s possession, shall be promptly delivered to ACT upon anysuch commencement of a bankruptcy proceeding upon written request therefore byACT.

 

13.19       JointPreparation. This Agreement has been prepared jointly and no rule of strictconstruction shall be applied against either party.  In this Agreement, the singular shall include theplural and vice versa and the word “including” shall be deemed to be followedby the phrase “without limitation.”

 

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**IN WITNESS WHEREOF,** the parties hereto and theUniversity have caused this Agreement to be executed the day and year firstwritten above.  The persons signing belowwarrant their authority to sign the Agreement.

 
| ADVANCED CELL TECHNOLOGY, INC. | INFIGEN, INC.    |
|--------------------------------|------------------|
|                           |             |   |
|                           |             |   |
| By:                            | /s/ Michael West |   |   | By: |   |
| * *                       | *Signature*      | * * | * * | * * | *Signature* |
|                           | MICHAEL WEST     |   |   |   |   |
| * *                       | *Printed Name*   | * * | * * | * * | *Printed Name* |
|                           | PRESIDENT        |   |   |   |   |
| * *                       | *Title*          | * * | * * | * * | *Title* |
|                           | 8-5-03           |   |   |   |   |
| * *                       | *Date*           | * * | * * | * * | *Date* |

 

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