**Exhibit 10.30.3**

 

**EXECUTIONCOPY**

 

**SEPARATIONAGREEMENT**

 

**among**

 

**A.C.T.GROUP, INC.,**

 

**ADVANCEDCELL TECHNOLOGY, INC.,**

 

**CYAGRA INC.**

 

**and**

 

**GOYAIKES.A.**

 

**dated asof July 1, 2002**

 

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**TABLE OFCONTENTS**

 
| ARTICLE I  DEFINITIONS                                                                                  |
|--------------------------------------------------------------------------------------------------------------|
|                                                                                                         |   |   |   |
| SECTION 1.01.  Certain  Defined Terms                                                              |   |
|                                                                                                         |   |
| ARTICLE II  SEPARATION DATE; PAYMENT                                                                    |
|                                                                                                         |   |   |   |
| SECTION 2.01.  Separation Date                                                                     |   |
|                                                                                                         |   |   |   |
| SECTION 2.02.  Payment                                                                             |   |
|                                                                                                         |   |   |   |
| ARTICLE III  TRANSFER OF CERTAIN ASSETS, ASSUMPTION OF CERTAIN LIABILITIES; CERTAIN  OTHER ARRANGEMENTS |
|                                                                                                         |   |   |   |
| SECTION 3.01.  Transfer of  Assets                                                                 |   |
|                                                                                                         |   |   |   |
| SECTION 3.02.  Assumption  of Liabilities                                                          |   |
|                                                                                                         |   |   |   |
| SECTION 3.03.  Settlement  of Intercompany Accounts                                                |   |
|                                                                                                         |   |   |   |
| SECTION 3.04.  Settlement  of Trans Ova Genetics, Inc. Accounts                                    |   |
|                                                                                                         |   |   |   |
| SECTION 3.05.  Transactions  Related to the GSC License Agreement                                  |   |
|                                                                                                         |   |   |   |
| SECTION 3.06.  Research  Payments to Tufts University and Cornell University                       |   |
|                                                                                                         |   |   |   |
| SECTION 3.07.  Governmental  Approvals and Consents                                                |   |
|                                                                                                         |   |   |   |
| SECTION 3.08.  Research  Payments to Tufts University and Cornell University                       |   |
|                                                                                                         |   |   |   |
| SECTION 3.09.  Governmental  Approvals and Consents                                                |   |
|                                                                                                         |   |   |   |
| ARTICLE IV  ALLOCATION OF THE PREMISES                                                                  |
|                                                                                                         |   |   |   |
| SECTION 4.01.  Sublease  Agreement                                                                 |   |
|                                                                                                         |   |   |   |
| SECTION 4.02.  Division  of the Premises                                                           |   |
|                                                                                                         |   |   |   |
| ARTICLE V  MUTUAL COVENANTS                                                                             |

 

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| SECTION 5.01.  Governmental  Approvals and Consents               |   |
|-----------------------------------------------------------------------------|--------|
|                                                                        |   |   |   |
| SECTION 5.02.  Transfer  Documents                                |   |
|                                                                        |   |   |   |
| SECTION 5.03.  Additional  Agreements                             |   |
|                                                                        |   |   |   |
| SECTION 5.04.  Termination  of Certain Agreements                 |   |
|                                                                        |   |   |   |
| SECTION 5.05.  Implementation  of Computer and Accounting Systems |   |
|                                                                        |   |   |   |
| SECTION 5.06.  Efforts  to Fulfill Conditions                     |   |
|                                                                        |   |
| SECTION 5.07.  Agreement  for Exchange of Information             |   |
|                                                                        |   |   |   |
| SECTION 5.08.  Conflict  with Third-Party Agreements              |   |
|                                                                        |   |   |   |
| SECTION 5.09.  Consistency  with Past Practices                   |   |
|                                                                        |   |   |   |
| ARTICLE VI  CONDITIONS TO THE SEPARATION                               |
|                                                                        |   |   |   |
| SECTION 6.01.  Conditions  to Obligations of Group and ACT        |   |
|                                                                        |   |   |   |
| SECTION 6.02.  Conditions  to Obligations of Cyagra               |   |
|                                                                        |   |   |   |
| SECTION 6.03.  Conditions  to Obligations of Goyaike              |   |
|                                                                        |   |   |   |
| ARTICLE VII  TRANSITION SERVICES AND SHARED ASSETS                     |
|                                                                        |   |   |   |
| SECTION 7.01.  Transition  Services                               |   |
|                                                                        |   |   |   |
| SECTION 7.02.  Shared Assets                                      |   |
|                                                                        |   |   |   |
| ARTICLE VIII  INDEMNIFICATION                                          |
|                                                                        |   |   |   |
| SECTION 8.01.  Indemnification  by Group and ACT                  |   |
|                                                                        |   |   |   |
| SECTION 8.02.  Indemnification  by Cyagra                         |   |
|                                                                        |   |   |   |
| SECTION 8.03.  Insurance  Proceeds                                |   |
|                                                                        |   |   |   |
| SECTION 8.04.  Procedure  for Indemnification                     |   |

 

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| SECTION 8.05.  Remedies  Cumulative                            |   |
|--------------------------------------------------------------------------|--------|
|                                                                     |   |   |   |
| SECTION 8.06.  Survival of  Indemnities                        |   |
|                                                                     |   |   |   |
| ARTICLE X  MISCELLANEOUS                                            |
|                                                                     |   |   |   |
| SECTION 9.01.  Entire  Agreement; No Third Party Beneficiaries |   |
|                                                                     |   |   |   |
| SECTION 9.02.  Expenses                                        |   |
|                                                                     |   |   |   |
| SECTION 9.03.  Governing  Law; Submission to Jurisdiction      |   |
|                                                                     |   |   |   |
| SECTION 9.04.  Notices                                         |   |
|                                                                     |   |   |   |
| SECTION 9.05.  Amendments                                      |   |
|                                                                     |   |   |   |
| SECTION 9.06.  Assignments                                     |   |
|                                                                     |   |   |   |
| SECTION 9.07.  Termination                                     |   |
|                                                                     |   |   |   |
| SECTION 9.08.  Specific  Performance                           |   |
|                                                                     |   |   |   |
| SECTION 9.09.  Headings;  References                           |   |
|                                                                     |   |   |   |
| SECTION 9.10.  Counterparts                                    |   |
|                                                                     |   |   |   |
| SECTION 9.11.  Severability;  Enforcement                      |   |
|                                                                     |   |   |   |
| SECTION 9.12.  Approvals,  Consent and Waivers                 |   |

 

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**SEPARATIONAGREEMENT**

 

This Separation Agreement(this “Agreement”) is entered into as of July 1, 2002, among A.C.T. Group, Inc., a Delaware corporation(“Group”), Advanced Cell Technology, Inc., a Delaware corporationand wholly owned subsidiary of Group (“ACT”), Cyagra Inc., a Delawarecorporation (“Cyagra”) and Goyaike S.A., a company incorporated underthe laws of the Republic of Argentina (“Goyaike”).

 

WHEREAS,pursuant to a Securities Purchase Agreement, dated July 1, 2002, amongGroup, ACT and Goyaike (the “Securities Purchase Agreement”), Goyaikehas agreed to purchase 8,171,000 shares of Cyagra’s common stock, par value$0.001 per share (“Common Stock”), from ACT;

 

WHEREAS,as a condition to closing the transactions contemplated by the SecuritiesPurchase Agreement, on or before the Closing Date (as defined in the SecuritiesPurchase Agreement), Group, ACT, Cyagra and Goyaike shall enter into anagreement pursuant to which they will take actions to establish separatebusiness operations for ACT and Cyagra;

 

WHEREAS,the parties intend in this Agreement, including the Exhibits and Scheduleshereto, to set forth the principal arrangements between them regarding theSeparation (as defined below).

 

NOW,THEREFORE, in consideration of the foregoing and the covenants and agreementsset forth below, the parties hereto agree as follows:

 

ARTICLE IDEFINITIONS

 

Forthe purpose of this Agreement the following terms shall have the followingmeanings:

 

SECTION 1.01. Certain Defined Terms.  Forpurposes of this Agreement:

 

“ACT”has the meaning specified in the preamble to this Agreement.

 

“ACTAssets” means:

 

(i)                                     Any and all Assets that are expresslycontemplated by this Agreement as Assets to be transferred to ACT, includingthose Assets listed in Exhibit 1.01(A) hereto;

 

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(ii)                                  Any Assets reflected in the Group BalanceSheet as Assets of Group and its Subsidiaries not relating to the CyagraBusiness, subject to any dispositions of such Assets subsequent to the date ofthe Group Balance Sheet;

 

(iii)                               Any and all Assets owned or held immediatelyprior to the Separation Date by Group or any of its Subsidiaries that are notused in the Cyagra Business; and

 

(iv)                              Any and all Assets owned or held immediatelyprior to the Separation Date by Cyagra that are used primarily in the ACTBusiness.

 

“ACT Business” means the business ofresearching, developing and commercializing nuclear transfer technology, stemcell technology and cellular cloning technology for all applications of anynature whatsoever, including without limiting the generality of the foregoing,all human applications, other than those applications specified as within thedefinition of “Cyagra Business” set forth below, and manufacturing and sellingproducts and providing services related thereto.

 

“ACT Indemnities” has the meaningspecified in Section 9.02.

 

“Action” means any claim, action,suit, arbitration, inquiry, proceeding or investigation by or before anyGovernmental Authority.

 

“ACT Liabilities” means:

 

(i)                                     any and all Liabilities that are expresslycontemplated by this Agreement as Liabilities to be assumed by ACT, includingthose Liabilities listed in Exhibit 1.01(C) hereto;

 

(ii)                                  all Liabilities, including anyemployee-related Liabilities and environmental Liabilities, relating to,arising out of or resulting from:

 

(A)                              the operation of the ACT Business, asconducted at any time prior to, on or after the Separation Date (including anyLiability relating to, arising out of or resulting from (i) the optionsgranted to Cyagra employees pursuant to the ACT 1997 Stock Option Plan and the Group2000 Stock Option Plan or (ii) any act or failure to act by any director,officer, employee, agent or representative (whether or not such act or failureto act is or was within such Person’s authority));

 

(B)                                any ACT Assets (including any contracts andany real property and leasehold interests);

 

in any such case whether arising before, on or after the SeparationDate;

 

(iii)                               all Liabilities relating to, arising out ofor resulting from any of the terminated, divested or discontinued businessesand operations of the ACT Business; and

 

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(iv)                              all Liabilities reflected as liabilities or obligations not relating primarily to the CyagraBusiness in the Group Balance Sheet, subject to any discharge of suchLiabilities subsequent to the date of the Group Balance Sheet.

 

“Affiliate” means, with respect to any specified Person, anyother Person that directly, or indirectly through one or more intermediaries,controls, is controlled by, or is under common control with, such specifiedPerson.

 

“Agreement” means this Separation Agreement, including all ofthe Schedules and Exhibits hereto.

 

“Ancillary Agreements” means the Securities Purchase Agreement,the New Securityholders’ Agreement and the Sublicense Agreement.

 

“Assets” means assets, properties and rights (includinggoodwill), wherever located (including in the possession of vendors or otherthird parties or elsewhere), whether real, personal or mixed, tangible,intangible or contingent, in each case whether or not recorded or reflected orrequired to be recorded or reflected on the books and records or financialstatements of any Person, including the following:

 

(a)                                  all accounting and other books, records andfiles whether in paper, microfilm, microfiche, computer tape or disc, magnetictape or any other form;

 

(b)                                 all apparatus, computers and other electronicdata processing equipment, fixtures, machinery, equipment, furniture, officeequipment, automobiles, trucks, aircraft rolling stock, vessels, motor vehiclesand other transportation equipment, special and general tools, test devices,prototypes and models and other tangible personal property;

 

(c)                                  all inventories of material, parts, rawmaterials, supplies, work-in-process and finished goods and products;

 

(d)                                 all interests in real property of whatevernature, including easements, whether as owner, mortgagee or holder of asecurity interest in real property, lessor, sublessor, lessee, sublesee orotherwise;

 

(e)                                  all interests in any capital stock or otherequity interests of any Subsidiary or any other Person, all bonds, notes,debentures or other securities issued by any Subsidiary or any other Person,all loans, advances or other extensions of credit or capital contributions toany Subsidiary or any other Person and all other investments in securities ofany Person;

 

(f)                                    all license agreements, leases of personalproperty, open purchase orders for raw materials, supplies, parts or services,unfilled orders for the manufacture and sale of products and other contracts,agreements or commitments;

 

(g)                                 all deposits, letters of credit andperformance and surety bonds;

 

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(h)                                 all written technical information, data,specifications, research and development information, engineering drawings,operating and maintenance manuals, and materials and analyses prepared byconsultants and other third parties;

 

(i)                                     all domestic and foreign intellectual,intangible and industrial property of any type, including, without limitation,patents, copyrights, trade names, trademarks, service marks and registrationsand applications for any of the foregoing trade secrets, inventions, otherproprietary information and licenses from third Persons granting the right touse any of the foregoing;

 

(j)                                     all computer applications, programs and othersoftware, including operating software, network software, firmware, middleware,design software, design tools, systems documentation and instructions;

 

(k)                                  all cost information, sales and pricing data,customer prospect lists, supplier records, customer and supplier lists,customer and vendor data, correspondence and lists, product literature,artwork, design, development and manufacturing files, vendor and customerdrawings, formulations and specifications, quality records and reports and otherbooks, records, studies, surveys, reports, plans and documents;

 

(l)                                     all prepaid expenses, trade accounts andother accounts and notes receivables;

 

(m)                               all rights under contracts or agreements, allclaims or rights against any Person arising from the ownership of any Asset,all rights in connection with any bids or offers and all claims, choses inaction or similar rights, whether accrued or contingent;

 

(n)                                 all rights under insurance policies and allrights in the nature of insurance, indemnification or contribution;

 

(o)                                 all licenses, permits, approvals andauthorizations which have been issued by any Governmental Authority;

 

(p)                                 cash or cash equivalents, bank accounts, lockboxes and other deposit arrangements; and

 

(q)                                 interest rate, currency, commodity or otherswap, collar, cap or other hedging or similar agreements or arrangements.

 

“Business Day” means any day that is not a Saturday, a Sunday orother day on which banks are required or authorized by Law to be closed in TheCity of New York, U.S.A. or The City of Buenos Aires, Argentina.

 

“Consents” means any consents, waivers or approvals from, ornotification requirements to, any third parties.

 

“Cyagra” has the meaning specified in the preamble to thisAgreement.

 

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“Cyagra Assets” means:

 

(i)                                     Any and all Assets that are expresslycontemplated by this Agreement as Assets to be transferred to Cyagra, includingthose Assets listed in Exhibit 1.01(B) hereto;

 

(ii)                                  Any Assets reflected in the Group BalanceSheet as Assets of Cyagra or Assets relating to the Cyagra Business, subject toany dispositions of such Assets in the ordinary course subsequent to the dateof the Group Balance Sheet;

 

(iii)                               Any and all Assets owned or held immediately prior to the Separation Dateby Cyagra that are used in the Cyagra Business; and

 

(iv)                              Any and all Assets owned or held immediatelyprior to the Separation Date by Group or any of its Subsidiaries that are usedin the Cyagra Business;

 

provided, however,that the Shared Assets (as defined below) listed in Exhibit 8.02(A) shallnot constitute “Cyagra Assets” and shall be owned and administered in themanner specified in Section 8.02 hereof.

 

“Cyagra Business” means the business of researching anddeveloping technology related to the manufacture and sale of products and theprovision of services in the Fields of Use.

 

“Cyagra Indemnities” has the meaning specified in Section 9.01.

 

“Cyagra Liabilities” means:

 

(i)                                     any and all Liabilities that are expresslycontemplated by this Agreement as Liabilities to be assumed by Cyagra,including those Liabilities listed in Exhibit 1.01(D) hereto;

 

(ii)                                  all Liabilities, including anyemployee-related Liabilities and environmental Liabilities, primarily relatingto, arising out of or resulting from:

 

(A)                              the operation of the Cyagra Business, asconducted at any time prior to, on or after the Separation Date (including anyLiability relating to, arising out of or resulting from any act or failure toact by any director, officer, employee, agent or representative (whether or notsuch act or failure to act is or was within such Person’s authority));

 

(B)                                any Cyagra Assets (including any contractsand any real property and leasehold interests);

 

in any such case whether arising before, on or after the SeparationDate;

 

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(iii)                               all Liabilities relating to, arising out ofor resulting from any of the terminated, divested or discontinued businessesand operations of the Cyagra Business; and

 

(iv)                              all Liabilities reflected as liabilities orobligations relating primarily to the Cyagra Business in the Group BalanceSheet, subject to any discharge of such Liabilities subsequent to the date ofthe Group Balance Sheet.

 

Cyagra Liabilities shall not include (i) anyobligation to pay severance amounts to any Person who provided any Servicespursuant to the Management Agreement and (ii) any Liability relating to,arising out of or resulting from the options granted to Cyagra employeespursuant to the ACT 1997 Stock Option Plan and the Group 2000 Stock Option Plan.

 

“Encumbrance” means any security interest,pledge, bailment (in the nature of a pledge or for purposes of security),mortgage, deed of trust, the grant of a power to confess judgment, conditionalsale or title retention agreement (including any lease in the nature thereof),lien (including, without limitation, environmental and tax liens), charge,encumbrance, easement, reservation, restriction, closed, adverse claim, rightof first refusal or first offer, option or other similar arrangement orinterest in real or personal property.

 

“Equine Field” means the cloning, development, making, using,selling, offering to sell, importing or exporting of cloned equine animals (aswell as any transgenic variants or enhancements thereto) or products that arecomposed of, made in or derived, extracted or isolated from cells or tissues ofsuch animals for nonthereapeutic purposes, including but not limited to, foruse in agriculture, for use as companion or service animals, or for use asracing or other equine event animals, and the rendering of services or usesthat relate to the production of such products.  Specifically excluded from the Equine Field isthe cloning of such animals, and/or the development, making, using, selling,offering to sell, importing or exporting of products that are composed of, madein or derived, extracted or isolated from cells or tissues of such animals, forall purposes related to veterinary or medical therapies, including, but not limitedto, the production of biopharmaceutical agents, proteins, peptides andpolypeptides in milk for pharmaceutical, neutraceutical or other use; provided,however, that the aforementioned exclusion shall not apply to the makingof transgenic cloned equine animals whereby gene therapy has been employed tocorrect a particular medical or health defect in that animal.

 

“Existing Technology” means the “ACT Licensed Property” asdefined in the Sublicense Agreement.

 

“Field of Agriculture” means the cloning, development, making,using, selling, offering to sell, importing or exporting of cloned non-humananimals, excluding avian (as well as any transgenic variants or enhancementsthereto) or products that are composed of, made in or derived, extracted orisolated from cells or tissues of such animals for the production of food or fiber,and the rendering of services or uses that relate to the production of suchproducts.  Specifically excluded from theField of Agriculture is the cloning of such animals for all purposes related toveterinary or medical therapies, including, but not limited to, the productionof biopharmaceutical agents, proteins, peptides and polypeptides in milk forpharmaceutical,

 

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neutraceuticalor other use; provided, however, that the aforementionedexclusion shall not apply to the making of transgenic cloned animals wherebygene therapy has been employed to correct a particular medical or health defectin that animal.

 

“Fields of Use” means the Field of Agriculture and the EquineField.

 

“Future Technology” means “Cyagra Developments” as defined inthe Goyaike Sublicense Agreement.

 

“Governmental Approvals” means any notices, report or otherfilings to be made, or any consents, registrations, approvals, permits orauthorizations to be obtained from, any Governmental Authority.

 

“Governmental Authority” means any United States federal, stateor local or any non-United States government, governmental, regulatory oradministrative authority, agency or commission or any court, tribunal orjudicial or arbitral body.

 

“Governmental Order” means any order, writ, judgment,injunction, decree, stipulation, determination or award entered by or with anyGovernmental Authority.

 

“Goyaike” has the meaning specified in the preamble to thisAgreement

 

“Goyaike Sublicense Agreement” means the Nonexclusive SublicenseAgreement, dated November 20, 2001, among Cyagra, ACT, Group and Goyaike.

 

“Group Balance Sheet” means the unaudited combined balance sheetof Group and Group’s Subsidiaries, including the notes thereto, as of March 31,2002.

 

“Group Subsidiaries” means Advanced Cell Technology, Inc., CIMABiotechnology Inc. and Cyagra, Inc.

 

“GSC Sublicense Agreement” means the Non-Exclusive LicenseAgreement, dated January 4, 2002, between ACT and Genetic Savings &Clone.

 

“Indemnifiable Losses” has the meaning specified in Section 9.01.

 

“Indemnified Person” has the meaning specified in Section 9.03.

 

“Indemnifying Party” has the meaning specified in Section 9.03.

 

“Information” means information, whether or not patentable orcopyrightable, in written, oral, electronic or other tangible or intangibleforms, stored in any medium, including studies, reports, organizationaldocuments, minutes and stock record books, other books and records, corporateseals, contracts, instruments, surveys, discoveries, ideas, concepts, know-how,techniques, designs, specifications, drawings, blueprints, diagrams, models,prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes,computer programs or other software, marketing plans, customer names,communications by or to attorneys (includingattorney-client privileged communication), memos and other materials preparedby attorneys or under their

 

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direction(including attorney work product), and other technical, financial, employee orbusiness information or data.

 

“Insurance Proceeds” means those moneys (i) received by aninsured from an insurance carrier or (ii) paid by an insurance carrier onbehalf of the insured, in either case net of any applicable premium adjustment,retrospectively rated premium, deductible, retention, cost or reserve paid orheld by or for the benefit of such insured.

 

“Law” means any constitution, law, statute, treaty, rule,directive, requirement or regulation or Governmental Order.

 

“Liabilities” means any and all debts, liabilities andobligations, whether accrued or fixed, absolute or contingent, matured orunmatured or determined or determinable, including, without limitation, thosearising under any Law, Action or Governmental Order and those arising under anycontract, agreement, arrangement, commitment or undertaking.

 

“Liu Agreement” means the “Terms for Exclusive License Agreement”,dated December 20, 2000, between Group and Dr. Chengyu Liu.

 

“Management Agreement” means the Management Services andIntellectual Property Agreement, dated November 20, 2001, among Group, Actand Cyagra.

 

“Material Adverse Effect” means any circumstance, change in oreffect on a Person that, individually or in the aggregate with all othercircumstances, changes in or effects on such Person, is or could reasonably beexpected to be materially adverse to the business, operations, properties,results of operations or condition (financial or otherwise) of such Person,except for any changes in or effects on such Person principally arising from orprincipally relating to (i) the United States or the global economy or thesecurities markets generally or (ii) the biomedical industry in general; provided,however, that in the case of each of clause (i) and (ii) suchPerson is not disproportionately affected by such changes or effects comparedto other Persons engaged in similarly situated businesses within the biomedicalindustry.

 

“New Securityholders’ Agreement” means the securityholders’agreement, dated July 1, 2002, among Group, ACT, Cyagra and Goyaike.

 

“Person” means any individual, partnership, firm, corporation,association, trust, unincorporated organization or other entity, as well as anysyndicate or group that would be deemed to be a person under Section 13(d)(3) ofthe Securities Exchange Act of 1934, as amended.

 

“Premises” means the offices leased by ACT in the building at100 Innovation Drive, Worcheseter, Massachusetts 01605.

 

“Separation” means (i) the transfer of Cyagra Assets toCyagra and the assumption by Cyagra of the Cyagra Liabilities and the transferof ACT Assets to ACT and the assumption of the ACT Liabilities by ACT, (ii) theallocation of employees between ACT and Cyagra, and (iii) the allocationof the Premises between ACT and Cyagra, all as more fully described in thisAgreement and the Ancillary Agreements.

 

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“Shared Assets” means those ACT Assets listed on Exhibit 8.02hereto, which Cyagra may continue to use pursuant to the terms set forth in Article VIIIof this Agreement.

 

“Sublicense Agreement” means the sublicense agreement, dated July 1,2002, among Group, ACT and Cyagra

 

“Subsidiary” of any Person means any corporation or otherorganization whether incorporated or unincorporated of which at least amajority of the securities or interests having by the terms thereof ordinaryvoting power to elect at least a majority of the board of directors or othersperforming similar functions with respect to such corporation or otherorganization is directly or indirectly owned or controlled by such Person or byany one or more of its Subsidiaries, or by such Person and one or more of itsSubsidiaries; provided, however that no Person that is notdirectly or indirectly wholly owned by any other Person shall be a Subsidiaryof such other Person unless such other Person controls, or has the rights,power or ability to control, that Person.

 

“Third Party Claim” has the meaning set forth in Section 9.04(a).

 

“US GAAP” means United States generally accepted accountingprinciples.

 

ARTICLE IISEPARATION DATE; PAYMENT

 

SECTION 2.01.  SeparationDate.  Except as specifically provided to thecontrary in this Agreement, or as otherwise mutually agreed to in writing amongthe parties, the effective time and date of the Separation shall be 11:59 p.m.Eastern Standard Time, September 1, 2002 (the “Separation Date”).

 

SECTION 2.02. Payment.  Subjectto the terms and conditions of this Agreement, and in accordance with Goyaike’sobligations under Section 2.0l(b) of the Securities PurchaseAgreement, on the fifth Business Day following satisfaction of Group’s and ACT’sobligations hereunder, as reasonably determined by ACT and Goyaike, or on suchother date as the parties hereto may mutually agree upon in writing, Goyaikeshall deliver to ACT, by wire transfer in immediately available funds, to anaccount designated by ACT, an amount equal to US$1,500,000.

 

ARTICLE IIITRANSFER OF CERTAIN ASSETS, ASSUMPTION OF CERTAIN LIABILITIES; CERTAINOTHER ARRANGEMENTS

 

SECTION 3.01.  Transferof Assets.  Subject to Article VII:

 

(a)                                  On or before the Separation Date, Group andACT each agree to assign, transfer, convey and deliver to Cyagra, and Cyagraagrees to accept from Group

 

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and ACT and their respective applicable Affiliates all of Group’s, ACT’sand such Affiliates respective rights, titles and interests in and to theCyagra Assets free of any Encumbrances.

 

(b)                                 On or before the Separation Date, Cyagraagrees to assign, transfer, convey and deliver to ACT, and ACT agrees to acceptfrom Cyagra and its applicable Affiliates all of Cyagra’s and such Affiliatesrespective rights, titles and interests in and to the ACT Assets free of anyEncumbrances.

 

(c)                                  On or before the Separation Date, Group, ACTand Cyagra will, and will cause their respective applicable Affiliates to,execute and deliver such deeds, bill of sale, subleases, assignments and otherdocuments, and will do such other things, as are necessary or appropriate tocarry out the assignment and transfer of Assets described in this Section 3.01.

 

(d)                                 In the event that at any time or from time totime any party hereto shall receive or otherwise possess any Asset that shouldhave been allocated to any other Person pursuant to this Agreement, such partyshall promptly transfer, or cause to be transferred, such Asset to the Personso entitled thereto.  Prior to any suchtransfer, the Person receiving or possessing such Asset shall hold such Assetin trust for the benefit of any such other Person.

 

SECTION 3.02.  Assumptionof Liabilities.  Subject to Article VII:

 

(a)                                  From and after the Separation Date, ACTagrees to accept, assume and faithfully to pay, perform, discharge and fulfillall ACT Liabilities, in accordance with their respective terms.  ACT shall be responsible for all ACTLiabilities, regardless of when or where such Liabilities arose or arise, orwhether the facts on which they are based occurred prior to or subsequent tothe Separation Date, regardless of where or against whom such Liabilities are assertedor determined (including any ACT Liabilities arising out of claims made by ACT’sor Cyagra’s respective directors, officers, employees, agents, Subsidiaries orAffiliates against ACT orCyagra) or whether asserted or determined prior to the Separation Date.

 

(b)                                 From and after the Separation Date, Cyagraagrees to accept, assume and faithfully to pay, perform, discharge and fulfillall Cyagra Liabilities, in accordance with their respective terms.  Cyagra shall be responsible for all CyagraLiabilities, regardless of when or where such Liabilities arose or arise, orwhether the facts on which they are based occurred prior to or subsequent tothe Separation Date, regardless of where or against whom such Liabilities are assertedor determined (including any Cyagra Liabilities arising out of claims made byACT’s or Cyagra’s respective directors, officers, employees, agents,Subsidiaries or Affiliates against ACT or Cyagra) or whether asserted ordetermined prior to the Separation Date.

 

(c)                                  As soon as practicable after the date hereof,and in any event before the Separation Date, Group shall deliver to Cyagra andGoyaike true and complete copies of (i) the audited balance sheet ofCyagra as of March 31, 2002 and the related statement of income of Cyagra,together with all related notes and any related schedules thereto, accompaniedby the report thereon of Cyagra’s accountants (the “Cyagra FinancialStatements”) and (ii) the audited

 

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balancesheet of ACT as of December 31, 2001 and the related statement of incomeof ACT, together with all related notes and any related schedules thereto,accompanied by the report thereon of ACT’s accountants (the “ACT FinancialStatements”).  Group and ACT jointlyand severally represent and warrant that the Cyagra Financial Statements andthe ACT Financial Statements (i) were prepared in accordance with thebooks of account and other financial records of Cyagra or ACT, as applicable, (ii) presentfairly the financial condition and results of the operations of Cyagra or ACT,as applicable, as of the dates thereof and for the periods covered thereby, (iii) havebeen prepared in accordance with US GAAP applied on a basis consistent with thepast practices of Cyagra or ACT, as applicable, and (iv) include alladjustments (consisting only of normal recurring accruals) that are necessaryfor a fair presentation of the financial condition of Cyagra or ACT, asapplicable, and the results of operations of Cyagra or ACT, as applicable, asof the dates thereof and for the periods covered thereby.

 

SECTION 3.03.  Settlementof Intercompany Accounts.  All intercompany receivables,payables and loans between Group and/or ACT, on the one hand, and Cyagra, onthe other hand, shall, on or prior to the Separation Date, be paid in full anddeemed settled and discharged.

 

SECTION 3.04.  Settlementof Trans Ova Genetics, Inc. Accounts.  Onor prior to the Separation Date, ACT shall (i) pay Trans Ova Genetics, Inc.(“Trans Ova”) the amount, in full, that ACT owes to Trans Ova and (ii) takeall actions necessary and appropriate to cause Trans Ova to pay, in full, theamount Trans Ova owes to Cyagra prior to the Separation Date.

 

SECTION 3.05.  TransactionsRelated to the GSC License Agreement.  (a) Onor prior to the Separation Date, ACT shall pay Cyagra US$50,000, which shallrepresent fifty (50%) percent of the License Fee (as defined in the GSC LicenseAgreement) paid by Genetic Savings & Clone to ACT.  ACT shall, and Group shall cause ACT to,deliver to Cyagra, within five (5) Business Days of ACT’s receipt of anyroyalty payments related to any Licensed Product (as defined in the GSC LicenseAgreement) or Licensed Process (as defined in the GSC License Agreement) thatpertain to the Equine Field or the Field of Agriculture that ACT receives, atany time on or after the date of this Agreement, pursuant to Article IV ofthe GSC License Agreement until such time as the GSC License Agreement isamended as set forth in Section 3.05(b) below.

 

(b)                                 As soon as practicable after the SeparationDate, ACT shall use its reasonable best efforts to (i) amend the GSCLicense Agreement such that the GSC Agreement shall no longer cover the EquineField and the Field of Agriculture and (ii) cause Genetic Savings &Clone to enter into a new non-exclusive sublicense agreement with Cyagra, onterms no less favorable to Cyagra than the terms of the GSC License Agreementapplicable to ACT, with respect to the Equine Field and the Field ofAgriculture; provided that Cyagra shall be responsible for any and allcosts and expenses, including out-of-pocket expenses but excluding any costsand expenses associated with the time and effort expended by any employees ofGroup or ACT, in pursuing the foregoing; providedfurther, however,that before ACT incurs any fee or expense in connection with this Section 3.05(b) thatcould reasonably be expected to exceed US$5,000, ACT shall obtain the priorwritten consent of Cyagra; and providedfurther that if ACT failsto obtain the prior written consent of Cyagra before incurring any fee orexpense

 

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greaterthan US$5,000, ACT shall be solely responsible for the amount of the fee orexpense incurred that exceeds US$5,000.

 

SECTION 3.06. Transactions Related to the GoyaikeSublicense Agreement. (a) Notwithstanding anything to thecontrary in the Goyaike Sublicense Agreement, Goyaike shall pay directly toCyagra all amounts Goyaike is required to pay pursuant to Section 5.2 ofthe Goyaike Sublicense Agreement resulting from Net Sales (as defined in theGoyaike Sublicense Agreement) of Licensed Products or Licensed Services (eachas defined in the Goyaike Sublicense Agreement) derived from ExistingTechnology.  Within five (5) BusinessDays of Cyagra’s receipt of any payments pursuant to this Section 3.06(a),Cyagra shall deliver to ACT any sublicense fees required to be paid pursuant tothe Sublicense Agreement.

 

(b)                                Notwithstanding anything to the contrary inthe Goyaike Sublicense Agreement, Goyaike shall pay directly to ACT all amountsGoyaike is required to pay pursuant to Section 5.2 of the GoyaikeSublicense Agreement, resulting from Net Sales of any Licensed Products orLicensed Services derived from Future Technology.

 

(c)                                 Notwithstanding anything to the contrary inthe Goyaike Sublicense Agreement, fifty percent (50%) of the minimum royalty tobe paid by Goyaike per calendar year (the “Minimum Royalty”) pursuant toSection 5.3 of the Goyaike Sublicense Agreement shall be allocated toLicensed Products and Licensed Services derived from Existing Technology andthe remaining fifty percent (50%) of the Minimum Royalty shall be allocated toLicensed Products and Licensed Services derived from Future Technology.  Notwithstanding anything to the contrarycontained in the Goyaike Sublicense Agreement, Goyaike shall not be obligatedto pay any Minimum Royalty related to Future Technology; provided thatif Goyaike fails to pay any Minimum Royalty related to Future Technology,Goyaike shall lose its license to use Future Technology.

 

SECTION 3.07. Liu Agreement.  (a) Priorto the Separation Date, Group shall use its reasonable best efforts to obtain Dr. ChengyuLiu’s written consent to the Sublicense Agreement.

 

(b)                                 If, prior to the Separation Date, Group isunable to obtain Dr. Liu’s written consent to the Sublicense Agreement,then on the Separation Date, Group shall (i) consent in writing that Dr. Liumay negotiate and enter into a license agreement with Cyagra relating to theLicensed Property (as defined in the Liu Agreement) and (ii) deliver suchexecuted consent to Cyagra and Dr. Liu.

 

SECTION 3.08.  ResearchPayments to Tufts University and Cornell University.  (a) Onor prior to the Separation Date, ACT shall reimburse Cyagra in an amount equalto thirty percent (30%) of all payments Cyagra made to Tufts University (“Tufts”)and Cornell University (“Cornell”) with respect to research conducted byTufts and Cornell (the “Research”).

 

(b)                                 After the Separation Date, ACT shall, andGroup shall cause ACT to, pay directly to Tufts and Cornell, as applicable,thirty percent (30%) of all fees charged by Tufts and Cornell for the Researchand Cyagra shall pay seventy percent (70%) of all such fees.

 

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SECTION 3.09.  GovernmentalApprovals and Consents.  (a) If and to the extentthat the valid, complete and perfected transfer or assignment to ACT or Cyagraof any Assets or Liabilities would be a violation of applicable laws or requireany Consent or Governmental Approval in connection with the Separation, then, unless ACT or Cyagra, as applicable, shall otherwise determine,such transfer or assignment, as the case may be, of such Assets or Liabilitiesshall be automatically deemed deferred and any such purported transfer orassignment shall be null and void until such time as all legal impediments areremoved and/or such Consents or Governmental Approvals have been obtained.

 

(b)                                 If and when the Consents and/or GovernmentalApprovals, the absence of which caused the deferral of transfer of any Asset orLiability pursuant to Section 3.01 are obtained, the transferof the applicable Asset or Liability shall be effected in accordance with the termsof this Agreement and/or the applicable Ancillary Agreement.

 

(c)                                  The Person retaining an Asset dueto the deferral of the transfer of such Asset shall not be obligated, inconnection with the foregoing, to expend any money in connection with themaintenance of such Asset unless the necessary funds are advanced by the Personentitled to the Asset, other than reasonable out-of-pocket expenses, attorneys’fees and recording or similar fees, all of which shall be promptly reimbursedby the Person entitled to such Asset.

 

ARTICLE IVALLOCATION OF THE PREMISES

 

SECTION 4.01.  SubleaseAgreement.  (a) On or prior to the Separation Date,Group, ACT and Cyagra shall execute and deliver a sublease agreement (the “Sublease”),with a term beginning on the Separation Date and ending March 31, 2003 andother terms mutually agreeable to Group, ACT and Cyagra, pursuant to whichCyagra will sublet from ACT that portion of the Premises described in Exhibit 4.01(A),which shall not be less than 7,000 square feet, and will continue to haveaccess to and use of the laboratory located on the Premises, and for thatpurpose, to enter and pass through any other necessary portion of the Premises,in accordance with the economic terms and conditions specified in Exhibit 4.01(B) andotherwise upon terms consistent with ACT’s lease of the Premises.

 

(b)                                 Notwithstanding anything in this Agreement tothe contrary, prior to the execution and delivery of the Sublease, Cyagra willcontinue to have access to and use of that portion of the Premises described inExhibit 4.01(A) and the laboratory located on the Premises, and forthat purpose, to enter and pass through any other necessary portion of thePremises.

 

(c)                                  Each of Group, ACT, Cyagra and Goyaikeacknowledge that the provisions of Section 5.07(g) of this Agreementshall apply to all information gained by each of Group, ACT, Cyagra or Goyaike,as the case may be, relating to the other parties hereto as a result of such partiessharing the Premises and the laboratory located on the Premises.

 

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SECTION 4.02.  Divisionof the Premises.  (a) On or prior to the Separation Date,Group, ACT and Cyagra shall take all actions necessary and appropriate tophysically divide and segregate Cyagra’s portion of the Premises from the restof the Premises (the “Division”).

 

(b)                                 All fees and expenses incurred in connectionwith the Division pursuant to this Section 4.02 shall be shared equally byACT and Cyagra; provided that before any party incurs any fee or expensein connection with the Division that could reasonably be expected to exceedUS$5,000, such party shall obtain the prior written consent of ACT or Cyagra,as applicable; and provided, further, that if any such partyfails to obtain the prior written consent of ACT or Cyagra, as applicable,before incurring any fee or expense greater than US$5,000, such party shall besolely responsible for the amount of the fee or expense incurred that exceedsUS$5,000.

 

ARTICLE VMUTUAL COVENANTS

 

SECTION 5.01.  GovernmentalApprovals and Consents.  To the extent that theSeparation requires any Governmental Approvals or Consents, the parties willuse their reasonable best efforts to obtain any such Governmental Approvals andConsents.

 

SECTION 5.02.  TransferDocuments.  On or prior to the Separation Date, Group, ACTand Cyagra each shall execute and deliver, and shall cause their applicableSubsidiaries to execute and deliver, any documents which may reasonably berequested by the other of them in order to perfect the transfers of Assets,assumption of Liabilities and any other transactions contemplated by thisAgreement.

 

SECTION 5.03 Additional Agreements.  Inaddition to the specific agreements, documents and instruments referenced in orannexed to this Agreement, each of Group, ACT, Cyagra and Goyaike agree toexecute or cause to be executed by the appropriate parties and deliver, asappropriate, such other agreements, instruments and other documents as may benecessary or desirable in order to effect the purpose of this Agreement and theAncillary Agreement.

 

SECTION 5.04.  Terminationof Certain Agreements.  (a) Group, ACT and Cyagrashall take all actions necessary to ensure that on the Separation Date, theManagement Agreement is terminated without any cost, expense, liability orrecourse to the parties thereto, whether direct or indirect, solely as a resultof the termination of such agreement.

 

(b)                                 Group and ACT, on the one hand, and Cyagra,on the other hand, hereby terminate any and all other agreements, arrangements,commitments or understandings, whether or not in writing, between or amongGroup and/or ACT, on the one hand, and Cyagra, on the other hand, effective asof the Separation Date.  No suchterminated agreement, arrangement, commitment or understanding (including anyprovision thereof which purports to survive termination) shall be of anyfurther force or effect after the Separation Date.  Each party shall, at

 

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thereasonable request of any other party, take, or cause to be taken, such otheractions as may be necessary to effect the foregoing.

 

(c)                                  The provisions of Section 5.04(b) shallnot apply to any of the following agreements, arrangements, commitments orunderstandings (or to any of the provisions thereof): (i) this Agreementor any of the Ancillary Agreements (and each other agreement or instrumentexpressly contemplated by this Agreement or any Ancillary Agreement to beentered into by any of the parties hereto); (ii) any agreements,arrangements, commitments or understandings listed or described on Exhibit 5.04(C)(ii) hereto;(iii) any agreements, arrangements, commitments or understandings to whichany Person other than the parties hereto and their respective Affiliates is aparty; and (iv) any other agreements, arrangements, commitments orunderstandings that this Agreement or any of the Ancillary Agreements expresslycontemplates will survive the Separation Date.

 

SECTION 5.05.  Implementationof Computer and Accounting Systems.  (a) Onor prior to the Separation Date, ACT shall, and Group shall cause ACT to, atCyagra’s sole cost (i) establish a separate computer server (the “CyagraServer”) for Cyagra’s computer system operations, including, but notlimited to, Cyagra’s use of the computer to provide to the Cyagra Business (A) accountingservices, including without limitation, cash management, bank relations,investor relations, financial record-keeping and reporting and credit andcollection services (collectively, the “Accounting Services”) and (B) taxservices, including without limitation, the preparation and filing of allrequired corporate tax returns and other federal, state and local tax-relatedreports (collectively, the “Tax Services”); (ii) load the computersoftware used in the ACT Business as of the date of this Agreement, including,but not limited to, QuickBooks and the software related to Cyagra’s bovinecloning service agreements, on to the Cyagra Server; and (iii) transferall information related to the Cyagra Business into the Cyagra Server’sQuickBooks application as necessary for Cyagra to perform its AccountingServices and Tax Services; provided that before ACT incurs any fee orexpense in connection with this Section 5.05(a) that could reasonablybe expected to exceed US$10,000, ACT shall obtain the prior written consent ofCyagra; and providedfurther, that if ACT fails to obtain theprior written consent of Cyagra before incurring any fee or expense greaterthan US$10,000, ACT shall be solely responsible for the amount of the fee orexpense incurred that exceeds US$10,000.

 

(b)                                 On or prior to the Separation Date, ACTshall, for Cyagra’s benefit and subject to Cyagra’s approval, hire anaccounting manager for Cyagra, at Cyagra’s expense.  For the avoidance of doubt, such accountingmanager shall be a Cyagra Employee.

 

SECTION 5.06.  Efforts toFulfill Conditions. Each of Group, ACT, Cyagra and Goyaikeshall use its reasonable best efforts to cause all the conditions in Article VIto be fulfilled on or before the Separation Date.

 

SECTION 5.07.  AgreementFor Exchange of Information.  (a) Subject to clause (g) ofthis Section 5.07, each of Group and ACT agrees to provide, or cause to beprovided, to Cyagra, on or before the Separation Date, all Information in thepossession of Group, ACT and/or their respective Affiliates relating to theCyagra Business.  Subject to clause (g) ofthis Section 5.07, each of Group, ACT and Cyagra agrees to provide, or causeto be provided, to each

 

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other, at any time after the date hereof and until one year after theSeparation Date, as soon as reasonably practicable after written requesttherefore, any additional Information in the possession or under the control ofsuch party therefore, any additional Information in the possession or under thecontrol of such party that the requesting party reasonably needs (i) tocomply with reporting, disclosure, filing or other requirements imposed on therequesting party (including under applicable securities laws) by a GovernmentalAuthority having jurisdiction over the requesting party, (ii) for use inany other judicial, regulatory, administrative or other proceeding or in orderto satisfy audit, accounting, claims, regulatory, litigation or other similarrequirements, (iii) to comply with its obligations under this Agreement orany Ancillary Agreement or (iv) in connection with the ongoing businessesof ACT or Cyagra, as the case may be; provided, however, that in the event thatany party determines that any such provision of Information could becommercially detrimental, violate any law or agreement, or waive anyattorney-client privilege, the parties shall take all reasonable measures topermit the compliance with such obligations in a manner that avoids any suchharm or consequence.

 

(b) * Internal Accounting Controls; FinancialInformation.  *After theSeparation Date, (i) each party shall maintain in effect at its own costand expense adequate systems and controls for its business to the extentnecessary to enable the other parties to satisfy their respective reporting,accounting, audit and other obligations, and (ii) each party shallprovide, or cause to be provided, to the other parties and their respectiveSubsidiaries in such form as such requesting party shall request, at no chargeto the requesting party, all financial and other data and information as therequesting party reasonably determines necessary or advisable in order to prepareits financial statements and reports or filings with any GovernmentalAuthority.

 

(c) * Ownership of Information.  *Any information owned by a partythat is provided to a requesting party pursuant to this Section 5.07 shallbe deemed to remain the property of the providing party.  Unless specifically set forth herein, nothingcontained in this Agreement shall be construed as granting or conferring rightsof license or otherwise in any such Information.

 

(d) * Record Retention.  *To facilitate the possible exchangeof Information pursuant to this Section 5.07 and other provisions of thisAgreement after the Separation Date, each party agrees to use its reasonablecommercial efforts to retain all Information in their respective possession orcontrol on the Separation Date substantially in accordance with the policies ofGroup and ACT as in effect on the Separation Date.  However, at any time within one year after theSeparation Date, each party may amend their respective record retentionpolicies at such party’s discretion; provided, however, that if a party desiresto effect the amendment within three (3) years after the Separation Date,the amending party must give thirty (30) days prior written notice of suchchange in the policy to each party to this Agreement.  In addition, no party will destroy, or permitany of its Subsidiaries to destroy, any Information that exists on theSeparation Date (other than Information that is permitted to be destroyed underthe current record retention policy of such party) without first using itsreasonable commercial efforts to notify the other party of the proposeddestruction and giving the other party the opportunity to take possession of suchInformation prior to such destruction.

 

(e) * Limitation of Liability.  *No party shall have any liabilityto any other party in the event that any Information exchanged or providedpursuant to this Section is found to be

 

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inaccurate,in the absence of willful misconduct by the party providing such Information.  No party shall have any liability to any otherparty if any Information is destroyed or lost after reasonable commercialefforts by such party to comply with the provisions of Section 5.07(c).

 

(f)  *OtherAgreements Providing For Exchange of Information.  *The rights and obligations grantedunder this Section 5.07 are subject to any specific limitations,qualifications or additional provisions on the sharing, exchange orconfidential treatment of Information set forth in this Agreement and anyAncillary Agreement.

 

(g) * Confidentiality. *(i) The confidentialinformation provided by Group or ACT, on the one hand, to Cyagra or Goyaike, onthe other hand, and by Cyagra or Goyaike, on the one hand, to Group or ACT, onthe other hand, relating to the matters set forth in this Agreement and theAncillary Agreements and the transactions contemplated thereby (such party whendisclosing such information being the “Disclosing Party”, and such partywhen receiving such information being the “Receiving Party”) shall beconsidered confidential information.  TheReceiving Party agrees that it shall treat and hold as confidential all suchinformation and shall not disclose to any third party other than aRepresentative any such confidential information provided to it by the DisclosingParty; provided, however, that the Receiving Party agrees tocause any of its Representatives who receive such confidential information toobserve the requirements with respect to confidentiality contained herein.  Neither the Receiving Party nor any of its Representativesshall use such confidential information provided by the Disclosing Party forany other purpose than provided under this Agreement or the AncillaryAgreements and the transactions contemplated hereby or thereby and regulatoryand internal compliance purposes.  TheReceiving Party shall be responsible for any failure by any of itsRepresentatives to observe the requirements with respect to confidentialitycontained herein.

 

(ii)                                  The obligation to hold in confidence and notto disclose confidential information pursuant to this Section 5.07(g) shallnot apply to any such information that (a) is or becomes generallyavailable to the public other than as a result of a direct or indirectdisclosure by the Receiving Party or any of its Representatives, (b) isdisclosed to the Receiving Party or any of its Representatives on anon-confidential basis by a third-party; provided, however, thatsuch third party is not, to the knowledge of the Receiving Party or any of itsRepresentatives, bound by a confidentiality agreement with the DisclosingParty, (c) is independently discovered, derived or developed by theReceiving Party or any of its Representatives without access to theconfidential information or (d) is requested or required to be disclosedby oral questions, interrogatories, requests for information or documents,subpoena, civil investigative demand or similar process or, upon the advice ofthe Receiving Party’s counsel, is required to be disclosed by applicable law orregulation, regulatory body, stock exchange, court or administrative order, orany listing or trading agreement with such regulatory body or stock exchange.  In the event that the Receiving Party isrequested or required to disclose any confidential information pursuant to thisSection 5.07(g)(ii), the Receiving Party will provide the Disclosing Partywith prompt notice of each such request or requirement so that the DisclosingParty may seek an appropriate protective order, request for confidentialtreatment and/or waive compliance with the requirements with respect toconfidentiality contained herein.

 

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For purposes of this Section 5.07(g), “Representative” means, asto any Person, such Person’s Affiliates, directors, officers, employees, agentsand advisors (including, without limitation, financial and investment advisors,attorneys and accountants).

 

(iii)                          In the event that any party either determineson the advice of its counsel that it is required to disclose any Informationpursuant to applicable Law or receives any demand under lawful process or fromany Governmental Authority to disclose or provide Information of any otherparty that is subject to the confidentiality provisions hereof, such partyshall notify the other party prior to disclosing or providing such Informationand shall cooperate at the expense of the requesting party in seeking anyreasonable protective arrangements requested by such other party.  Subject to the foregoing, the Person thatreceived such request may thereafter disclose or provide Information to theextent required by such Law (as so advised by counsel) or by lawful process orsuch Governmental Authority.

 

SECTION 5.08.  Conflictwith Third-Party Agreements.  Nothing in Section 5.07shall require Group, ACT, Cyagra or Goyaike to violate any agreement with anythird parties regarding the confidentiality of confidential and proprietaryinformation relating to that third party or its business; provided, however,that in the event that Group, ACT, Cyagra or Goyaike is required under Section 5.07to disclose any such information, Group, ACT, Cyagra or Goyaike, as applicable,shall use all commercially reasonable efforts to seek to obtain such customer’sconsent to the disclosure of such information.

 

SECTION 5.09.  Consistencywith Past Practices.  Except as otherwise expressly permittedby the terms of this Agreement, from the date hereof through the SeparationDate, Group, ACT and Cyagra shall, and ACT shall cause Cyagra to, conduct theirrespective businesses in the ordinary course consistent with past practice, andGroup, ACT and Cyagra shall not do any of the following without the priorwritten consent of Goyaike:

 

(i)                                     permit or allow any of the Cyagra Assets tobe subjected to any material Encumbrance;

 

(ii)                                  incur any Indebtedness on behalf of Cyagra;

 

(iii)                               make any capital expenditure or commitment for any capital expendituresrelated to the Cyagra Business in excess of US$35,000, individually, or US$100,000,in the aggregate;

 

(iv)                              sell, transfer, lease, sublease, license or otherwise dispose of anyCyagra Assets, other than in the ordinary course of business consistent withpast practice;

 

(v)                                 (A) grant any increase, or announce anyincrease, in the wages, salaries, compensation, bonuses, incentives, retention,severance, pension or other benefits payable by Cyagra to any of its directors,officers or employees, consultants or independent contractors, including,without limitation, any increase or change pursuant to any Plan (as defined inthe Securities Purchase Agreement) or (B) establish or increase or promiseto increase any benefits under any Plan, in either case except as required byLaw or any collective bargaining agreement and involving ordinary increasesconsistent with the past practice of Cyagra;

 

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(vi)                              amend, terminate, cancel or compromise any material claims of Cyagra orwaived any other rights of substantial value to Cyagra;

 

(vii)                           make any change in any accounting policy of Cyagra, other than thoserequired by US GAAP;

 

(viii)                        adopt, amend or consent to the termination of any material contractrelated to the Cyagra Business or Cyagra’s rights thereunder, except asrequired by applicable Law;

 

(ix)                                disclose any secret or confidential Intellectual Property (except byway of issuance of a patent) or permit to lapse or abandon any IntellectualProperty (or any registration or grant thereof or any application relatingthereto) to which, or under which, Cyagra has any right, title, interest orlicense;

 

(x)                                   settle any Action if such settlement wouldresult in the payment by Cyagra of more than US$50,000 or material injunctiveor other equitable relief; or

 

(xi)                                agree, whether in writing or otherwise, to do any of the foregoing.

 

ARTICLE VI

 

CONDITIONS TO THESEPARATION

 

SECTION 6.01. Conditions to Obligations of Groupand ACT.  The obligations of Group and ACT to consummatethe transactions contemplated by this Agreement shall be subject to the fulfillment,at or prior to the Separation Date, of each of the following conditions:

 

(a)                                  All required Governmental Approvals of theSeparation, if any, will have been obtained, other than Governmental Approvalsthe lack of which would not have a Material Adverse Effect on either Group orACT, as applicable.

 

(b)                                 No order of a court enjoining or otherwiserestraining the Separation will be in effect and no governmental proceedingregarding the Separation will be pending which is reasonably likely to resultin the imposition of penalties against Group or ACT which would be material toeither Group or ACT.

 

(c)                                  (i) The covenants contained in thisAgreement and the Ancillary Agreements to be complied with by Cyagra andGoyaike on or before the Separation Date shall have been complied with in allmaterial respects and (ii) Group and ACT shall have received certificatesfrom Goyaike and Cyagra to such effect signed by a duly authorized officerthereof.

 

(d)                                 Group and ACT shall have received a true andcomplete copy, certified by the Secretary or an Assistant Secretary of Cyagraand Goyaike, as applicable, of the resolutions duly and validly adopted by theBoard of Directors of each of Cyagra and Goyaike, in each case

 

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evidencingits authorization of the execution and delivery of this Agreement and theAncillary Agreements and the consummation of the transactions contemplatedhereby and thereby.

 

SECTION 6.02.  Conditionsto Obligations of Cyagra.  The obligations of Cyagra toconsummate the transactions contemplated by this Agreement shall be subject tothe fulfillment, at or prior to the Separation Date, of each of the followingconditions:

 

(a)                                  All required Governmental Approvals of theSeparation, if any, will have been obtained, other than Governmental Approvalsthe lack of which would not have a Material Adverse Effect on Cyagra.

 

(b)                                 No order of a court enjoining or otherwiserestraining the Separation will be in effect and no governmental proceeding regarding the Separation will be pending which is reasonably likely toresult in the imposition of penalties against Cyagra which would be material toCyagra.

 

(c)                                  (i) The covenants contained in thisAgreement and the Ancillary Agreements to be complied with by Group, ACT andGoyaike on or before the Separation Date shall have been complied with in allmaterial respects and (ii) Group and ACT shall have received certificatesfrom Goyaike and Cyagra to such effect signed by a duly authorized officer thereof.

 

(d)                                 Cyagra shall have received a true andcomplete copy, certified by the Secretary or an Assistant Secretary of Group,ACT and Goyaike, as applicable, of the resolutions duly and validly adopted bythe Board of Directors of each of Group, ACT and Goyaike, in each caseevidencing its authorization of the execution and delivery of this Agreementand the Ancillary Agreements and the consummation of the transactionscontemplated hereby and thereby.

 

SECTION 6.03.  Conditionsto Obligations of Goyaike.  The obligations of Goyaike toconsummate the transactions contemplated by this Agreement shall be subject tothe fulfillment, at or prior to the Separation Date, of each of the followingconditions:

 

(a)                                 All required Governmental Approvals of theSeparation, if any, will have been obtained, other than Governmental Approvalsthe lack of which would not have a Material Adverse Effect on Goyaike.

 

(b)                                No order of a court enjoining or otherwiserestraining the Separation will be in effect and no governmental proceedingregarding the Separation will be pending which is reasonably likely to resultin the imposition of penalties against Goyaike which would be material toGoyaike.

 

(c)                                  (i) The covenants contained in thisAgreement and the Ancillary Agreements to be complied with by Group and ACT onor before the Separation Date shall have been complied with in all materialrespects and (ii) Goyaike shall have received certificates from Group andACT to such effect signed by a duly authorized officer thereof.

 

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(d)                                 Goyaike shall have received a true andcomplete copy, certified by the Secretary or an Assistant Secretary of Groupand ACT of the resolutions duly and validly adopted by the Board of Directorsof each of Group and ACT, in each case evidencing its authorization of theexecution and delivery of this Agreement and the Ancillary Agreements and theconsummation of the transactions contemplated hereby and thereby.

 

ARTICLE VIITRANSITION SERVICES AND SHARED ASSETS

 

SECTION 7.01.  TransitionServices.  (a) From the date hereof until theSeparation Date, ACT shall continue to, and Group shall cause ACT to continueto, provide Cyagra with the Services (as defined in the Management Agreement)pursuant to the terms of the Management Agreement.

 

(b)                                 On or prior to the Separation Date, ACT shalldeliver to Cyagra and Goyaike true and complete copies of (i) Cyagra’sunaudited balance sheet as of the last day of the month preceding theSeparation Date and the related statement of income, together with any relatedschedules thereto, (ii) all tax returns and other federal, state and localtax-related reports prepared by ACT or prepared under ACT’s supervision inconnection with ACT’s provision of Tax Services pursuant to this Section 7.01(a);and (iii) all other reports and other Information produced by ACT or under itssupervision in connection with its provision of the Services pursuant to Section 7.01(a).

 

SECTION 7.02. Shared Assets.  (a) Asand to the extent required in the Cyagra Business, Group and ACT shall provideCyagra the use of the Shared Assets identified in Exhibit 7.02(A) hereto. Unless a specific Shared Assetidentified in Exhibit 7.02(A) is designated therein as beingexclusive to Cyagra, the Shared Assets will be available for use by Group, ACTand Cyagra on an as-needed basis.  In theevent Cyagra determines that it requires any additional equipment, Cyagra shallacquire such equipment at its own expense and solely for its own use, unlessotherwise mutually agreed in writing by ACT and Cyagra.

 

(b)                                 Group or ACT, as applicable, shall remain theowner or lessee, as applicable of each of the Shared Assets and shall be solelyresponsible for maintaining the Shared Assets with all costs associated withsuch maintenance to be shared by ACT and Cyagra in proportion to their use ofeach Shared Asset.  Cyagra shall exercisereasonable care to avoid any damage to the Shared Assets.

 

(c)                                  In consideration for the continuedavailability to Cyagra of the Shared Assets and the Laboratory, Cyagra shallpay ACT a monthly fee of US$1,000 (pro rated for any partial month) commencingon the Separation Date and thereafter payable on the first day of each monthuntil the earlier of March 31, 2003 or the termination of the Sublease; providedthat if prior to the earlier of March 31, 2002 or the termination of theSublease, ACT decides to vacate the Premises, ACT shall give Cyagra writtennotice of its decision to vacate the Premises at least 60 days prior tovacating, and once ACT has vacated the Premises, neither party shall any

 

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longer be obligated underthis Section 7.02(c).  On or priorto the Separation Date, ACT shall, and Group shall cause ACT to, deliver toCyagra copies of the invoices relating to the acquisition of each Shared Asset. If an invoice indicates that Cyagra,rather than Group or ACT, paid for any Shared Asset, such asset will be deemedto be a Cyagra Asset, rather than a Shared Asset, and the monthly fee payableby Cyagra pursuant to this Section 7.02(c) shall be reduced by anamount mutually agreed upon in writing by ACT and Cyagra.

 

(d)                                 Each of Group, ACT, Cyagra and Goyaikeacknowledge that the provisions of Section 5.07(g) of this Agreementshall apply to all information gained by each of Group, ACT, Cyagra or Goyaike,as the case may be, relating to the other parties hereto as a result of suchparties using the Shared Assets.

 

ARTICLE VIIIINDEMNIFICATION

 

SECTION 8.01.  Indemnificationby Group and ACT. Except as otherwise expressly set forthin Section 8.03, Group and ACT shall indemnify, defend and hold harmlessCyagra and its past or present directors, officers, employees, agents andAffiliates (other than ACT) and each of the heirs, executors, successors andassigns of any of the foregoing (the “Cyagra Indemnitees”) from andagainst any and all Liabilities, losses, damages, claims, costs and expenses,interest, awards, judgments and penalties (including, without limitation,attorneys’ and consultants’ fees and expenses) actually suffered or incurred bythem (including, without limitation, any Action brought or otherwise initiatedby any of them) (collectively, “Indemnifiable Losses” and individually,an “Indemnifiable Loss”), arising act of or resulting from:

 

(i)                                     the failure or alleged failure of Group, ACTor any of their respective Affiliates (other than Cyagra) to pay, perform orotherwise discharge in due course any of the ACT Liabilities, including anybreach of any provision of this Agreement by Group, ACT or any of theirrespective Affiliates (other than Cyagra);

 

(ii)                                  Group’s or ACT’s use of the Cyagra Assetsprior to or on the Separation Date;

 

(iii)                               the conduct and operation of the ACT Business by Group, ACT, theirrespective Subsidiaries (other than Cyagra), Affiliates, or predecessors on orat any time prior to or following the Separation Date;

 

(iv)                              the ACT Assets and any other Assets owned by Group and/or ACT, otherthan the Cyagra Assets;

 

(v)                                  the breach by Group or ACT of anyrepresentation, covenant or agreement set forth in this Agreement or anyAncillary Agreement; and

 

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(vi)                              any act or omission occasioned by the negligence or misconduct ofGroup, ACT, their respective Affiliates (other than Cyagra), agents, officers,directors, employees or consultants in connection with the performance of theServices pursuant to Section 8.01 (regardless of whether such act oromission constitutes a breach of this Agreement).

 

To the extent that Group’sand ACT’s undertakings set forth in this Section 9.01 may beunenforceable, Group and ACT shall each contribute the maximum amount that itis permitted to contribute under applicable Law to the payment and satisfactionof all Indemnifiable Losses incurred by the Cyagra Indemnitees.

 

SECTION 8.02.  Indemnificationby Cyagra.  Except as otherwise expressly set forth in Section 8.03,Cyagra shall indemnify, defend and hold harmless Group, ACT and each of itsrespective past or present directors, officers, employees, agents and Affiliates(other than Cyagra) and each of the heirs, executors, successors and assigns ofany of the foregoing (the “ACT Indemnitees”) from and against anyand all Indemnifiable Losses arising out of or resulting from:

 

(i)                                     failure or alleged failure of Cyagra or anyof its Affiliates (other than Group and ACT) to pay, perform or otherwisedischarge in due course any of the Cyagra Liabilities, including any breach ofany provision of this Agreement by Cyagra or any of its Affiliates (other thanGroup and ACT);

 

(ii)                                  Cyagra’s use of the ACT Assets prior to or onthe Separation Date;

 

(iii)                               the conduct and operation of the Cyagra Business by Cyagra or itsAffiliates on or at any time prior to or following the Separation Date;

 

(iv)                              the Cyagra Assets and any other Assets owned by Cyagra, other than theACT Assets; and

 

(v)                                 the breach by Cyagra of any representation,covenant or agreement set forth in this Agreement or any Ancillary Agreement.

 

To the extent that Cyagra’sundertakings set forth in this Section 8.02 may be unenforceable, Cyagrashall contribute the maximum amount that it is permitted to contribute underapplicable Law to the payment and satisfaction of all Indemnifiable Lossesincurred by the ACT Indemnitees.

 

SECTION 8.03.  InsuranceProceeds.  The amount which any party (an “IndemnifyingParty”) is or may be required to pay to or on behalf of any other Person(an “Indemnified Person”) pursuant to Section 8.01 or Section 8.02shall be reduced (including, without limitation, retroactively) by any insuranceproceeds or other amounts actually recovered by or on behalf of suchIndemnified Person in reduction of the related Indemnifiable Loss.  If an Indemnified Person shall have receivedthe payment required by this Agreement from an Indemnifying Party in respect ofan Indemnifiable Loss and shall subsequently actually receive

 

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insurance proceeds, orother amounts in respect of such Indemnifiable Loss as specified above, thensuch Indemnified Person shall pay to such Indemnifying Party a sum equal to theamount of such insurance proceeds or other amounts actually received.

 

SECTION 8.04. Procedure for Indemnification.  (a) Ifan Indemnified Person shall receive written notice of the assertion by a Person(including, without limitation, any Governmental Authority) who is not a partyto this Agreement of any claim or of the commencement by any such Person of anyAction with respect to which an Indemnifying Party may be obligated to provideindemnification pursuant to this Agreement (a “Third-Party Claim”), suchIndemnified Person shall give the Indemnifying Party written notice thereofpromptly after becoming aware of such Third-Party Claim; provided thatthe failure of any Indemnified Person to give notice as required by this Section 8.04shall not relieve the Indemnifying Party of its obligations under this Article VIII,except to the extent that such Indemnifying Party is materially prejudiced bysuch failure to give notice.  Such noticeshall describe the Third-Party Claim in reasonable detail, and shall indicatethe amount (estimated if necessary) of the Indemnifiable Loss that has beenclaimed against or may be sustained by such Indemnified Person.

 

(b)                                 Subject to Section 8.04(e) hereof,an Indemnifying Party may elect to defend or to seek to settle or compromise,at such Indemnifying Party’s own expense and by counsel reasonably satisfactoryto the Indemnified Person, any Third-Party Claim, provided that (i) theIndemnifying Party must confirm in writing that it agrees that the IndemnifiedPerson is entitled to indemnification hereunder in respect of such Third-PartyClaim and (ii) no compromise or settlement shall be made without the priorwritten consent of the Indemnified Person, which consent shall not beunreasonably withheld.  Within 15 days ofthe receipt of notice from an Indemnified Person in accordance with Section 8.04(a) (orsooner, if the nature of such Third-Party Claim so requires), the IndemnifyingParty shall notify the Indemnified Person of its election whether to assumeresponsibility for such Third-Party Claim (provided that if the IndemnifyingParty does not so notify the Indemnified Person of its election within 15 daysafter receipt of such notice from the Indemnified Person, the IndemnifyingParty shall be deemed to have elected not to assume responsibility for suchThird-Party Claim).

 

(c)                                  In the event that the Indemnifying Partyelects to assume responsibility for the Third-Party Claim, pursuant to Section 8.04(b) above,(i) the Indemnified Person shall cooperate in the defense or settlement orcompromise of such Third-Party Claim, including making available to theIndemnifying Party any personnel and any books, records or other documentswithin the Indemnified Person’s control or which it otherwise has the abilityto make available that are necessary or appropriate for the defense of theThird-Party Claim, (ii) the Indemnifying Party shall keep the IndemnifiedPerson reasonably informed regarding the strategy, status and progress of thedefense of the Third-Party Claim, and (iii) the Indemnifying Party shallconsider, in good faith, the opinions and suggestions of the Indemnified Personwith respect to the Third-Party Claim.  Afternotice from an Indemnifying Party to an Indemnified Person of its election toassume responsibility for a Third-Party Claim, such Indemnifying Party shallnot be liable to such Indemnified Person under this Article VIII for anylegal or other costs or expenses (except costs or expenses approved in advanceby the Indemnifying Party) subsequently incurred by such Indemnified Person inconnection with the defense thereof; provided, that if the defendants inany such claim include both the Indemnifying Party and one or

 

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more Indemnified Personsand in such Indemnified Persons’ reasonable judgment a conflict of interestbetween such Indemnified Persons and such Indemnifying Party exists in respectof such claim, such Indemnified Persons shall have the right to employ separatecounsel and in that event the reasonable fees, costs and expenses of suchseparate counsel (but not more than one separate counsel reasonablysatisfactory to the Indemnifying Party) shall be paid by such IndemnifyingParty.

 

(d)                                 If an Indemnifying Party elects not to assumeresponsibility for a Third-Party Claim, the Indemnified Person may defend or(subject to the following sentence) seek to compromise or settle suchThird-Party Claim.  Notwithstanding theforegoing, an Indemnified Person may not settle or compromise any claim withoutprior written notice to the Indemnifying Party, which shall have the optionwithin ten days following the receipt of such notice (i) to disapprove thesettlement and to then assume all past and future responsibility for the claim,including immediately reimbursing the Indemnified Person for prior expendituresin connection with the claim, (ii) to disapprove the settlement andcontinue to refrain from participation in the defense of the claim, in whichevent the Indemnified Person may, in its sole discretion, proceed with thesettlement and the Indemnifying Party shall have no further right to contestthe amount or reasonableness of the settlement, (iii) to approve and pay theamount of the settlement, reserving the Indemnifying Party’s right to contestthe Indemnified Person’s right to indemnity, or (iv) to approve and paythe settlement.  In the event theIndemnifying Party makes no response to such written notice, the IndemnifyingParty shall be deemed to have elected option (ii).  When the Indemnifying Party chooses, or isdeemed to have chosen, option (ii) or (iii), prior to the bringing of anyAction to determine the issue of whether the Indemnified Person has a right toindemnity under this Article VIII, the parties shall comply withprovisions of Section 9.12 hereof.

 

(e)                                  Notwithstanding the foregoing, if anIndemnified Person reasonably and in good faith determines that (i) theIndemnifying Party is not financially capable to defend a Third-Party Claim andto provide full indemnification with respect to any settlement thereof or (ii) theIndemnifying Party or such Indemnifying Party’s attorney is not adequatelyrepresenting the Indemnified Person’s interests with respect to suchThird-Party Claim, the Indemnified Person may, by notice to the IndemnifyingParty, assume the exclusive right to defend, compromise or settle suchThird-Party Claim and the Indemnifying Party shall remain responsible for, andbe bound by the resolution of, such Third-Party Claim.

 

(f)                                    Any claim on account of an Indemnifiable Losswhich does not result from a Third-Party Claim shall be asserted by writtennotice given by the Indemnified Person to the applicable Indemnifying Party.  Such Indemnifying Party shall have a period of15 days after the receipt of such notice within which to respond thereto.  If such Indemnifying Party does not respondwithin such 15-day period, such Indemnifying Party shall be deemed to haverefused to accept responsibility to make payment.  If such Indemnifying Party does not respondwithin such 15-day period or rejects such claim in whole or in part, suchIndemnified Person shall be free to pursue such remedies as may be available tosuch party under applicable law or under this Agreement.

 

(g)                                 In addition to any adjustments requiredpursuant to Section 8.03, if the amount of any Indemnifiable Loss shall,at any time subsequent to the payment required by this

 

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Agreement, be reduced by recovery, settlement or otherwise, the amountof such reduction, less any expenses incurred in connection therewith, shallpromptly be repaid by the Indemnified Person to the Indemnifying Party.

 

(h)                                 In the event of payment by an IndemnifyingParty to any Indemnified Person in connection with any Third-Party Claim, suchIndemnifying Party shall be subrogated to and shall stand in the place of suchIndemnified Person as to any events or circumstances in respect of which suchIndemnified Person may have any right or claim relating to such Third-PartyClaim against any claimant or plaintiff asserting such Third-Party Claim oragainst any other party that may be liable.  Such Indemnified Person shall cooperate withsuch Indemnifying Party in a reasonable manner, and at the cost and expense ofsuch Indemnifying Party, in prosecuting any subrogated right or claim.

 

SECTION 8.05*.  *Remedies Cumulative. The remedies provided in this Article VIII shall be cumulative andshall not preclude assertion by any Indemnified Person of any other rights orthe seeking of any and all other remedies against any Indemnifying Party.

 

SECTION 8.06.  Survivalof Indemnities.  The obligations of each of Group, ACT andCyagra under this Article VIII shall survive the sale or other transfer byit of any Assets or businesses or the assignment by it of any Liabilities, withrespect to any Indemnifiable Loss of the other related to such Assets,businesses or Liabilities.

 

SECTION 8.07.  Limitationon Damages.  In no event shall any party be liable forspecial, incidental, indirect or consequential damages, whether or not causedby or resulting from the negligence of such party.

 

ARTICLE IXMISCELLANEOUS

 

SECTION 9.01.  Entire Agreement; No Third PartyBeneficiaries.  ThisAgreement and all documents and instruments referred to herein constitute theentire agreement and supersede all prior agreements and understandings, bothwritten and oral, among the parties with respect to the subject matter hereof,and are not intended to confer upon any Person other than the parties heretoany rights or remedies hereunder.

 

SECTION 9.02.  Expenses.  Exceptas specifically provided in this Agreement, all fees and expenses incurred inconnection with this Agreement and the consummation of the transactionscontemplated hereby shall be paid by the party incurring such expenses.

 

SECTION 9.03. Governing Law; Submission toJurisdiction.  This Agreement shall be governed and construedin accordance with the laws of the State of Massachusetts, without regard toany applicable conflicts of laws.  Allactions and proceedings arising out of or relating to this Agreement shall be heard and determined in any Massachusettsstate or federal court sitting in The City of Boston.  The parties hereby (a) submit to theexclusive jurisdiction of any state or federal court sitting in The City ofBoston for the purpose of any Action arising out

 

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ofor relating to this Agreement brought by any party and (b) irrevocablywaive, and agree not to assert by way of motion, defense, or otherwise in anysuch Action, any claim that it is not subject personally to the jurisdiction ofthe above-named courts, that its property is exempt or immune from attachmentor execution, that the Action is brought in an inconvenient forum, that thevenue of the Action is improper, or that this Agreement may not be enforced inor by any of the above-named courts.

 

SECTION 9.04. Notices.  Allnotices and other communications hereunder shall be in writing and shall bedeemed given if delivered personally, telecopied (which is confirmed) or mailedby registered or certified mail (return receipt requested) to the parties atthe following addresses (or at such other address for a party as shall bespecified by like notice):

 

(a)                                  if to Group or ACT:

 

Advanced Cell Technology, Inc.,

One Innovation Drive

Worcester, Massachusetts 01605

 

Telecopy: (508) 756-0931

Attention: Dr. Michael D. West, President

 

With a copy to:

 

Pierce Atwood

One Monument Square

Portland, Maine 04101

 

Telecopy: (207) 791-1350

Attention: William L. Worden, Esq.

 

(b)                                 if to Cyagra:

 

Cyagra, Inc.

One Innovation Drive

Worcester, Massachusetts 01605

Telecopy: (508) 756-0931

Attention: Dr. Michael D. West, President

 

With a copy to:

 

Pierce Atwood

One Monument Square

Portland, Maine 04101

 

Telecopy: (207) 791-1350

Attention: William L. Worden, Esq.

 

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(c)                                  If to Goyaike:

 

Goyaike S.A.

Av, do Mayo 701, Piso 16

Buenos Aires, Argentina

 

Telecopy: (54) 3488-436300

Attention: Mr. Ricardo Hosel

 

With a copy to:

Shearman & Sterling

599 Lexington Avenue

New York, NY 10022

 

Telecopy: (212) 848-7179

Attention: Alfred J. Ross, Esq.

 

SECTION 9.05. Amendments.  ThisAgreement may not be amended except by an instrument in writing signed on behalfof each of the parties hereto.

 

SECTION 9.06. Assignments.  Neitherthis Agreement nor any of the rights, interests or obligations hereunder shallbe assigned by the parties hereto (whether by operation of law or otherwise)without the prior written consent of the other party.  Subject to the preceding sentence, thisAgreement will be binding upon, inure to the benefit of and be enforceable bythe parties and their respective successors and assigns.

 

SECTION 9.07. Termination.  ThisAgreement may be terminated upon the mutual written agreement of Group, ACT,Cyagra and Goyaike:

 

(i)                                     by Group or ACT if Cyagra or Goyaike is indefault or material breach of any provision of this Agreement by giving ten (10) daysprior written notice to the other parties specifying the cause of thetermination; provided, however, that if the breach is curedwithin the ten (10) day period, the notice shall be withdrawn and shall beof no effect; and provided further, however that Group or ACTshall not have caused Cyagra to default or breach any material provisions ofthis Agreement;

 

(ii)                                  by Cyagra if Group, ACT or Goyaike is indefault or material breach of any provision of this Agreement by giving ten (10) daysprior written notice to the other parties specifying the cause of thetermination; provided, however, that if the breach is curedwithin the ten (10) day period, the notice shall be withdrawn and shall beof no effect; or

 

(iii)                               by Goyaike if Group, ACT or Cyagra is in default or material breach ofany provision of this Agreement by giving ten (10) days prior writtennotice to the other parties specifying the cause of the termination; provided,however, that if the breach is cured within the ten (10) dayperiod, the notice shall be withdrawn and shall be of no effect.

 

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SECTION 9.08.  SpecificPerformance.  The parties hereto agree that the remedy atlaw for any breach of this Agreement will be inadequate and that any party bywhom this Agreement is enforceable shall be entitled to specific performance inaddition to any other appropriate relief or remedy.  Such party may, in its sole discretion, applyto a court of competent jurisdiction for specific performance or injunctive orsuch other relief as such court may deem just and proper in order to enforcethis Agreement or prevent any violation hereof and, to the extent permitted byapplicable laws, each party waives any objection to the imposition of suchrelief.

 

SECTION 9.09.  Headings;References.  The article, section and paragraphheadings contained in this Agreement are for reference purposes only and shallnot affect in any way the meaning or interpretation of this Agreement.  All references herein to “Article,” “Sections”or “Exhibits” shall be deemed to be references to Articles or Sections hereofor Exhibits hereto unless otherwise indicated.

 

SECTION 9.10. Counterparts.  ThisAgreement may be executed in two or more counterparts, all of which shall beconsidered one and the same agreement and shall become effective when two ormore counterparts have been signed by each of the parties and delivered to theother parties, it being understood that all parties need not sign the samecounterpart.

 

SECTION 9.11.  Severability;Enforcement.  The invalidity of any portion hereof shall notaffect the validity, force or effect of the remaining portions hereof.  If it is ever held that any covenant hereunderis too broad to permit enforcement of such covenant to its fullest extent, eachparty agrees that a court of competent jurisdiction may enforce such covenantto the maximum extent permitted by law, and each party hereby consents andagrees that such scope may be judicially modified accordingly in any proceedingbrought to enforce such covenant.

 

SECTION 9.12.  Approvals,Consent and Waivers.  Any approval, consent or waiver requiredor authorized by any provision of this Agreement to be given or made by any ofthe parties hereto shall only be valid to the extent such approval, consent orwaiver is in writing and signed by the Chief Executive Officer, the ChiefFinancial Officer, the General Counsel, the Treasurer or the Controller of theparty to be bound by such approval, consent or waiver.

 

[Signature Page toFollow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to beduly executed by their respective authorized officers as of the date firstwritten above.

 
|   | A.C.T. GROUP, INC.             |                     |
|--------|--------------------------------|--------------------------|
|   |                           |                     |   |
|   |                           |                     |   |
|   | By:                            | /s/ Michael West         |   |
|   |                           | Name:                    | MICHAEL WEST |   |
|   |                           | Title:                   | PRESIDENT |   |
|   |                           |                     |   |
|   |                           |                     |   |
|   | ADVANCED CELL TECHNOLOGY, INC, |
|   |                           |                     |   |
|   |                           |                     |   |
|   | By:                            | /s/ Michael West         |   |
|   |                           | Name:                    | MICHAEL WEST |   |
|   |                           | Title:                   | PRESIDENT |   |
|   |                           |                     |   |
|   |                           |                     |   |
|   | CYAGRA, INC.                   |                     |
|   |                           |                     |   |
|   |                           |                     |   |
|   | By:                            | /s/ Michael West         |   |
|   |                           | Name:                    | MICHAEL WEST |   |
|   |                           | Title:                   | PRESIDENT |   |
|   |                           |                     |   |
|   |                           |                     |   |
|   | GOYAIKE S.A.                   |                     |
|   |                           |                     |   |
|   |                           |                     |   |
|   | By:                            | /s/ Ricardo Hosel        |   |
|   |                           | Name:                    | Ricardo Hosel |   |
|   |                           | Title:                   | Attorney in Fact |   |
|   |                           |                     |   |
|   |                           |                     |   |
|   | By:                            | /s/ Alejandro Cantarelli |   |
|   |                           | Name:                    | Alejandro Cantarelli |   |
|   |                           | Title:                   | Attorney in Fact |   |
|        |                                |                          |  |  |  |

 

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