**Exhibit 10.12**

 

**NONEXCLUSIVESUBLICENSE AGREEMENTbetweenADVANCED CELL TECHNOLOGY, INC.****andINFIGEN, INC.**

 

ThisNonexclusive Sublicense Agreement (the “Agreement”) is made and entered into asof this 1st day of August, 2003 (the “Effective Date”) by and between ADVANCEDCELL TECHNOLOGY, INC., a Delaware corporation with a place of business at OneInnovation Drive, Worcester, Massachusetts 01605 *(“ACT”)*and INFIGEN, INC., a Delaware corporation with aplace of business at 1825 Infinity Drive; DeForest, Wisconsin 53532 (“Infigen,”and together with ACT, the “Parties”).

 

**RECITALS**

 

WHEREAS, ACTand Infigen have previously entered into a certain “Final Settlement Agreement”dated August 6, 1999 pursuantto which, among other things, Infigen licensed to ACT certain patents andpatent applications; and

 

WHEREAS, ACTand Infigen are parties to litigation currently pending in MassachusettsSuperior Court entitled *Advanced CellTechnology, Inc. v. Infigen, Inc.,*Civil Action No, 01-0376C(“the Massachusetts litigation”); and

 

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

 

WHEREAS,post judgment motions and other issues remain pending in the Massachusettslitigation; and

 

WHEREAS, ACTand Infigen desire to settle the Massachusetts litigation and to replace thelicense contained in the Final Settlement Agreement and court orders includedin the Final Settlement Agreement with a more definitive and comprehensivelicense agreement; and

 

WHEREAS, ACTowns or has a license or licenses granting ACT the ability to grant asublicense the ACT Patent Rights (as defined below), which includes certainscientific methods and techniques for cloning animals that may be valuable inthe Infigen Field (as defined below); and

 

WHEREAS,Infigen desires to obtain a non-exclusive sublicense from ACT under the ACTPatents Rights to use the ACT Patent Rights for the purpose of developing andselling products and performing services in the Infigen Field; and

 

WHEREAS,Infigen owns or has a license or licenses granting Infigen the ability tosublicense the Infigen Patent Rights (as defined below), which includes certainscientific

 

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methods and techniques for cloning animalsthat may be valuable in the ACT Field (as defined below); and

 

WHEREAS, ACTdesires to obtain a non-exclusive sublicense from Infigen under the InfigenPatents Rights to use the Infigen Patent Rights for the purpose of developingand selling products and performing services in the ACT Field; and

 

WHEREAS, ACTis willing to grant such a sublicense to Infigen, and Infigen is willing togrant such a sublicense to ACT, upon the terms and conditions set forth below;and

 

WHEREAS, ACTand Infigen have agreed that this Agreement will supercede any and all previousagreements, orders, and injunctions;

 

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

 

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

 

1.1                                 *“ACT Cell Therapy Field”*means the development, making, using,selling, offering to sell, or importing of therapeutic products that arecomposed of a) human cells for human cell therapy, or a formulation includingsuch cells (with or without genetic modification), and the rendering ofservices that relate to the production of such products, or b) non-human animalcells for veterinary cell therapy, or a formulation including such cells (withor without genetic modification) and the rendering of services that relate tothe production of such products.. For purposes of this Agreement, the term “humanor non-human animal cells” includes any and all cells, the nuclear genome ofwhich is substantially (i.e. greater than 99%) derived from a human ornon-human genome, as the case may be.  TheACT Cell Therapy Field does not include xenotransplantation of nonhuman cells(i.e. cells containing 1% or more of a nonhuman genome) into humans, or humanreproductive cloning.  For the purposesof this Agreement, “Formulation” means a delivery mechanism comprised ofingredients for the stable delivery of cells to the therapeutic need.

 

1.2                                 *“ACT Patent Rights”*means the patents identified on Schedule Aattached hereto, all divisionals, continuations, and continuations-in-part thatderive from the identified patent applications and any patents issuing on saidapplications together with all reissues, reexaminations, extensions andsubstitutions thereof.  ACT Patent Rightsas they exist as of the Effective Date are set forth on Schedule A. The Parties agree that Schedule Amay from time to time be amended upon the mutual agreement of the Parties afterthe Effective Date to reflect changes thereto.

 

1.3                                 *“ACT Product”*means any product that cannot be developed,manufactured, used, or sold without infringing one or more Valid Claims underthe ACT Patent Rights.

 

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1.4                                 *“ACT Service”*means any service that cannot be developed orperformed without using at least one process that infringes one or more ValidClaims under the ACT Patent Rights.

 

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

 

1.6                            *“Infigen Field”*means:

 

(a)                                  The research and discovery of genes orproteins or other molecules that play a role in the reprogramming (i.e., therestoration in whole or in part of pluripotency and/or totipotencey) of cells.  Any inventions or products resulting from suchresearch and which would not infringe the ACT Patent Rights will be theproperty of Infigen.

 

(b)                                 The development, making, using, selling,offering to sell, or importing of products that are composed of non-human cellsor tissues or a formulation including such cells or tissues, for the purpose ofxenotransplantation of such cells, tissues or organs for therapy in humans

 

(c)                                  The development, making, using, selling, orimporting of proteins (excluding all Immunoglobulin which is not sheepimmunoglobulin) produced in the blood of cloned animals;

 

(d)                                 The development, making, using, selling, oroffering to sell genetically modified or non genetically modified ovine, bovineand porcine animals as models of human disease.

 

For purposesof this Agreement, “xenotransplantation of cells” includes any and all cells,the nuclear genome of which is substantially (i.e. greater than 99%) derivedfrom a non-human genome.

 

1.7                                 *“Infigen Patent Rights” *means the patents and patent applications identified on Schedule Battached hereto, all divisionals, continuations, and continuations-in-part thatderive from the identified patent applications and any patents issuing on saidapplications together with

 

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all reissues, reexaminations, extensions andsubstitutions thereof.  The InfigenPatent Rights as they exist as of the Effective Date are set forth on Schedule B. The Parties agree that Schedule Bmay from time to time be amended upon the mutual agreement of the Partiesafter the Effective Date to reflect changes thereto.

 

1.8                                 *“Infigen Product”*means any product that cannot be developed,manufactured, used, or sold without infringing one or more Valid Claims underthe Infigen Patent Rights

 

1.9                                 *“Infigen Service”*means any service that cannot be developed,manufactured, used, or sold without infringing one or more Valid Claims underthe Infigen Patent Rights

 

1.10                           *“Net Commercial Sales”*means the total invoice price charged on allsales by ACT or Infigen , as applicable (or by any ACT or Infigen sublicenseeor by any third party on behalf of ACT or Infigen) of ACT Products and ACTServices, or Infigen Products and Infigen Services, as applicable, in anycountry after deducting, to the extent not already deducted, normal andcustomary trade, dealer, quantity, and cash discounts actually allowed;allowances for credits granted on account of rejections, returns, or pricereductions; governmental sales taxes and other charges imposed on such sales;and freight, insurance, customs, duties, and other landing charges.  In the event any product is sold as acomponent of a combination of functional elements, net sales price for purposesof determining royalty payments on such combination shall be calculated bymultiplying the average per unit net sales price of the ACT Product or Infigen Productportion, as applicable, of the combination when sold separately in theapplicable country during the year in which the sale was made by the number ofunits of product sold as part of such combination product.

 

1.11                           *“Territory”*means the world.

 

1.12                           *“UMASS License”*means the Exclusive License Agreement betweenACT and the University dated April 16, 1996, as amended by the Amendmentto Exclusive License Agreement dated September 1, 1999, the SecondAmendment to Exclusive License Agreement dated May 31, 2000 and the ThirdAmendment to Exclusive License Agreement dated September 19, 2002.

 

1.13                           *“UMASS Patent Rights”*means ACT Patent Rights licensed by ACT fromthe University under the UMASS License.

 

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

 

1.15                           *“Valid Claim”*means a claim of an issued or pending patentwhich has not lapsed or become abandoned or declared invalid or unenforceableby a court of competent jurisdiction or an administrative agency from which noappeal can be or has been taken within the time allowed for that appeal.

 

The useherein of the plural shall include the singular and *vice versa*and the use of themasculine shall include the feminine.  Additionalterms may be defined throughout this Agreement.

 

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**2.****                                     ****THE FINAL****SETTLEMENT AGREEMENT.**

 

The Partiesagree that the applicable provisions of the Final Settlement Agreement arehereby superceded by this Agreement.

 

**3.****                                      GRANTOF RIGHTS.**

 

3.1                                 License Grants fromACT to Infigen.

 

(a)                                  Subject to theterms of this Agreement, ACT hereby grants to Infigen a nonexclusive,royalty-bearing, worldwide license, with a limited right to sublicense, in theACT Patent Rights to develop, make, have made, import, use, sell and have soldACT Products in the Territory in the Infigen Field and to develop and performACT Services in the Territory in the Infigen Field.  ACT acknowledges, understands and agrees thatunder the licenses granted herein to Infigen, Infigen has the right to utilizethe ACT Patent Rights in the conduct of research, preclinical studies or otherwork related to the Infigen Fields or directed to the ultimate development andmanufacture of ACT Products and/or ACT Services.  To the extent this grant includes a sublicenseof any UMASS Patent Rights, such sublicense is subject to the relevant terms ofthe UMASS License as it may be amended from time to time, provided that in theevent of any inconsistency between the UMASS License and Section 3.1(c) hereof,Section 3.1(c) hereof shall govern.  The parties acknowledge, understand and agreethat the license granted herein includes only a limited right to grant furthersublicenses to or under the ACT Patent Rights under Section 3.1(b). Thelicense “to have made” and “to have sold” granted herein means only thatInfigen may, without ACT’s consent, contract with a third party or parties to develop,manufacture or sell ACT Products on behalf of Infigen.

 

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

 

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

 

3.2                                 License Grant fromInfigen to ACT.

 

(a)                                  Subject to theterms of this Agreement, Infigen hereby grants to ACT a nonexclusive,royalty-bearing, worldwide license, with a limited right to sublicense, in theInfigen Patent Rights to develop, make, have made, import, use, sell and have soldInfigen

 

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Products in the Territory in the ACT CellTherapy Fields and to develop and perform Infigen Services in the Territory inthe ACT Cell Therapy Field.  Infigenacknowledges, understands and agrees that under the licenses granted herein toACT, ACT has the right to utilize the Infigen Patent Rights in the conduct ofresearch, preclinical studies or other work related to the ACT Fields ordirected to the ultimate development and manufacture of Infigen Products and/orInfigen Services.  The partiesacknowledge, understand and agree that the licenses granted herein include onlya limited right to grant further sublicenses to or under the Infigen PatentRights under Section 3.2(b). The license “to have made” and “to have sold”granted herein means only that ACT may, without Infigen’s consent, contractwith a third party or parties to develop, manufacture or sell Infigen Productson behalf of ACT.

 

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

 

3.3                                 Disclosure of Licensed Patents and PatentApplications.

 

(a)                                  On the Effective Date, Infigen shall discloseto ACT all patents and patent applications included in the Infigen PatentRights in existence.  After the EffectiveDate, Infigen shall disclose to ACT within 30 days of acquisition or filing, asapplicable, any patents or patent applications included in the Infigen PatentRights.  ACT shall treat the informationdisclosed by Infigen pursuant to this paragraph in accordance with theconfidentiality obligations set forth in Article 8 below.

 

(b)                                 On the Effective Date ACT shall disclose to Infigen all patents andpatent applications included in the ACT Patent Rights in existence.  After the Effective Date, ACT shall discloseto Infigen within 30 days of acquisition or filing, as applicable, any patentsor patent applications included in the ACT Patent Rights.  Infigen shall treat the information disclosedby ACT pursuant to this paragraph in accordance with the confidentialityobligations set forth in Article 8 below.

 

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

 

4.1                                 Diligence Requirements.

 

(a)                                  Infigen Diligence Requirements.  Infigenshall use diligent efforts to develop ACT Products or ACT Services and tointroduce ACT Products or ACT Services into the commercial market; thereafter,Infigen shall make ACT Products or ACT Services reasonably available to thepublic.

 

(b)                                 ACT Diligence Requirements.  ACTshall use diligent efforts to develop Infigen Products or Infigen Services andto introduce Infigen Products or Infigen Services into the commercial market;thereafter, ACT shall make Infigen Products or Infigen Services reasonablyavailable to the public.

 

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4.2                                 Summary Reports by Infigen.

 

(a)                                  Summary Reports by Infigen.  Infigen shall maintain complete and accuraterecords of ACT Products and ACT Services that are made, used, sold or performedby Infigen (or by any Infigen Sublicensee or by any third party on behalf ofInfigen) under this Agreement, Not later than May 1st of eachyear following the Effective Date, Infigen shall furnish ACT with an executivesummary report on the progress of its efforts during the prior year to developand commercialize ACT Products or ACT Services, including without limitation researchand development efforts, efforts to obtain regulatory approval, marketingefforts (including ACT Products and ACT Services made, used, sold or performed)and sales figures, provided that such reports shall be deemed ConfidentialInformation subject to the provisions of Article 8 of this Agreement.

 

(b)                                 Summary Reports byACT. ACT shall maintain complete and accuraterecords of Infigen Products and Infigen Services that are made, used, sold orperformed by ACT (or by any ACT Sublicensee or by any third party on behalf ofACT) under this Agreement.  Not laterthan May 1st of each year following the Effective Date, ACTshall furnish Infigen with an executive summary report on the progress of itsefforts during the prior year to develop and commercialize Infigen Products orInfigen Services, including without limitation research arid developmentefforts, efforts to obtain regulatory approval, marketing efforts (includingInfigen Products and Infigen Services made, used, sold or performed) and salesfigures, provided that such reports shall be deemed Confidential Informationsubject to the provisions of Article 8 of this Agreement.

 

4.3                                 Failure to FulfillObligations.

 

(a)                                  Failure of Infigento Fulfill Obligations.  In theevent that ACT determines that Infigen has not fulfilled its obligations underthis Article 4, ACT shall furnish Infigen with written notice of suchdetermination.  Within sixty (60) daysafter receipt of such notice, Infigen shall either (i) fulfill therelevant obligation or (ii) negotiate with ACT a mutually acceptable schedule ofrevised obligations, failing which ACT shall have the right immediately uponwritten notice to Infigen to terminate Infigen’s rights as granted under thissublicense with respect to the Infigen Field and the ACT Patent Rights.

 

(b)                                 Failure of ACT toFulfill Obligations.  In theevent that Infigen determines that ACT has not fulfilled its obligations underthis Article 4, Infigen shall furnish ACT with written notice of suchdetermination.  Within sixty (60) days afterreceipt of such notice, ACT shall either (i) fulfill the relevantobligation or (ii) negotiate with Infigen a mutually acceptable schedule ofrevised obligations, failing which Infigen shall have the right immediatelyupon written notice to ACT to terminate a) ACT’s rights as granted under thissublicense with respect to the ACT Cell Therapy Field and the Infigen PatentRights and b) the representations and recitals regarding previous agreements,orders and injunctions.

 

**5.****                                      TERMAND TERMINATION.**

 

5.1                                 General.  The license granted by ACT toInfigen under Section 3.1 (a), and the license granted by Infigen to ACTunder Section 3. l(b), will commence on the Effective Date,

 

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and, unless sooner terminated as providedherein, continue until the expiration of all ACT Patent Rights or InfigenPatent Rights, as applicable, whereupon the license hereunder to Infigen orACT, as applicable, shall become paid-up and royalty free.

 

5.2                                 Termination for Cause.  ThisAgreement may be terminated by either Party for failure by the other Party to (a) makeany payment due to the other Party; (b) make any report due to the otherparty; (c) to cure any breach of Section 3.1 or Section 3.2 asthe case may be; (d) to keep any representations, warranty or statement offact included in Section 9; (e) failure to keep its corporate form orto petition for a relief from creditors for the purposes of liquidation or topetition for relief under any provisions of the Federal Bankruptcy Code (any ofthese provisions in 5.2 (a) through (e) shall constitute a “materialbreach”). If a Party is given written notice by the other party of a materialbreach, this Agreement may be terminated by the non-breaching party by givingthirty (30) days written notice to the other party specifying the cause of thetermination; provided, however, that if the breach is cured within the thirty(30) day period, the notice shall be withdrawn and shall be of no effect.

 

5.3                                 Effect of Termination.  Therights and obligations of the parties under Sections 7.4, 8.l,8,2.10.1,10.2,10.3, and 11 shall survive termination of this Agreement andcontinue in force.  Upon the terminationof this Agreement, each party and its respective Sublicensees (i.e., ACTSublicensee or Infigen Sublicensee) may complete and sell any work-in-progressand inventory of ACT Products or Infigen Products and perform any ACT Servicesor Infigen Services which they are obligated to perform under contracts withthird parties, as applicable, that exist as of the effective date oftermination, provided that (i) ACT and/or Infigen, as applicable, iscurrent in payment of all amounts due to the other party under this Agreement, (ii) ACTor Infigen, as applicable, pays the other party the applicable royalty on suchsales of ACT Products or Services or Infigen Products or Services, asapplicable, in accordance with the terms of this Agreement, and (iii) ACTand/or Infigen and its respective Sublicensees (i.e., ACT Sublicensee orInfigen Sublicensee), as applicable, shall complete and sell allwork-in-progress and inventory of such ACT Products or Infigen Products andcomplete its obligations to perform any ACT Services or Infigen Services, asapplicable, within six (6) months after the effective date of termination. Upon any termination of this Agreement,each party shall promptly return to the other party all written ConfidentialInformation, and all copies thereof, to the other party.

 

5.4                                 Additional Termination Provisions.  Theforegoing termination rights are in addition to any termination rights that maybe provided elsewhere in this Agreement.

 

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

 

6.1                                 Settlement Agreement and Mutual Release.  Inpartial consideration of the licenses granted herein and in consideration ofthe mutual promises set forth in this Agreement, the parties agree to enterinto the Settlement Agreement and General Release attached hereto as Schedule D.

 

6.2                                 License Fees.

 

(a)                                  Payment of License Fee by Infigen.  Infigenshall pay to ACT an initial

 

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

 

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

 

6.3                                 Royalties, Reports and Records.

 

(a)                                  Infigen Royalty Obligations.  Foreach ACT Product or ACT Service sold or performed by Infigen (or any thirdparty on behalf of Infigen), Infigen shall pay to ACT, on a quarterly basis, aroyalty of one and one-half percent (1.5 %) of the Net Commercial Sales by Infigenof ACT Products or ACT Services sold by Infigen (or any third party on behalfof Infigen) so long as the ACT Product or ACT Service, where sold would, butfor this Agreement, infringe a Valid Claim of any ACT Patent Right which islicensed to Infigen in such country.

 

(b)                                 ACT Royalty Obligations.  Foreach Infigen Product or Infigen Service sold or performed by ACT (or any thirdparty on behalf of ACT) in the ACT Cell Therapy Field, ACT shall pay toInfigen, on a quarterly basis, a royalty of one and one-half percent (1.5 %) ofthe Net Commercial Sales by ACT of Infigen Products or Infigen Services sold byACT (or any third party on behalf of ACT) so long as the Infigen Product orInfigen Service, where sold would, but for this Agreement, infringe a ValidClaim of any Infigen Patent Rights which is licensed to ACT in such country.

 

(c)                                  The obligation of Infigen to pay royaltiespursuant to Section 6.4(a) on sales of ACT Products and ACT Servicesshall terminate on a country-by-country basis concurrently with the expirationor termination of the last applicable patent within the ACT Patent Rights inthe country in which the ACT Product or ACT Services is manufactured, sold or performed.

 

(d)                                 The obligation of ACT to pay royaltiespursuant to Section 6.4(b) on sales of Infigen Products and InfigenServices shall terminate on a country-by-country basis concurrently with theexpiration or termination of the last applicable patent within the Infigen PatentRights in the country in which the Infigen Product or Infigen Services ismanufactured, sold or performed.

 

6.4                                 Sublicense Income.

 

(a)                                  Infigen agrees to pay ACT ten percent (10%)of any and all license fees and up-front fees (whether paid in cash, equity ofthe sublicensee or other consideration), royalties, milestone payments based onthe sublicensee’s performance, and premiums over market value paid to Infigenfor equity investments in Infigen by the sublicensee, received in considerationof the grant of a sublicenses of the ACT Patent Rights, however suchsublicenses

 

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may be characterized, but excluding equityinvestments in Infigen at market value (“Infigen Sublicense Revenues”). In theevent a third party desires to pay a non-monetary, or not-easily monetized,consideration in connection with such sublicensing of the ACT Patent Rights, afair market value must be established for the license by agreement of theparties before rights may be granted.

 

(b)                                 ACT agrees to payInfigen ten percent (10%) of any and all license fees and up-front fees(whether paid in cash, equity of the sublicensee or other consideration), royalties,milestone payments based on the sublicensee’s performance, and premiums over marketvalue paid to ACT for equity investments in ACT by the sublicensee, received inconsideration of the grant of sublicenses of Infigen Patent Rights, howeversuch sublicenses may be characterized, but excluding equity investments in ACTat market value (“ACT Sublicense Revenues”). In the event a third party desiresto pay a non-monetary, or net-easily monetized, consideration in connectionwith such sublicensing of the Infigen Patent Rights, a fair market value mustbe established for the license by agreement of the parties before rights may begranted.

 

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

 

6.5                                 Payments in U.S.Dollars.  All payments due under thisAgreement shall be payable in United States currency without deduction fortaxes, assessments, exchanges, collection or other charges of any kind.  Conversion of foreign currency to U.S. dollarsshall be made at the conversion rate reported in The Wall Street Journal on thelast working day of the calendar quarter to which the payment relates.

 

6.6                                 Audit Rights

 

(a)                                  Each party shallsubmit a report to the other party quarterly within 45 days after the end ofeach calendar quarter during the term of this Agreement during which a partyhas sold ACT Products or ACT Services, or Infigen Products or Infigen Services,as applicable, or received ACT Sublicense Revenues or Infigen SublicenseRevenues, as applicable, stating in each such report the aggregate sales andpayments with respect to ACT Products and Services, or Infigen Products andServices, as applicable, during the preceding calendar quarter and the royaltyand sublicense revenue as provided herein.  Such reports shall also include a statement ofany credits claimed during the preceding calendar quarter.  The payment of royalty and sublicense revenueamounts shall be made concurrently with such reports.

 

(b)                                 Each party shallkeep full, complete, true and accurate books of account containing allparticulars relating to the manufacture and sales with respect to ACT Productsand Services, or Infigen Products and Services, as applicable, and any allowedcredits, which may be necessary to ascertain and verify the royalties andsublicense revenue payable to the other party.  Said books and accounts shall be kept at therespective party’s principal place of business.

 

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(c)                                  At the request of a party, but not more thanonce in each calendar year, the other party shall permit an independentcertified public accountant selected by the requesting party, to have access,during regular business hours of the audited party, to such records todetermine, for any calendar quarter commencing not more than three years priorto the date of such request, the completeness and accuracy of such books andrecords, and the accuracy of reports submitted to the other party and/orpayments made to the other party.  If anysuch inspection discloses an error in any royalty or sublicense revenuepayment, the audited party shall pay to the other party, within thirty (30)days of the discovery of the error, (a) all deficiencies in royalty orsublicense revenue payments, (b) interest on such deficiencies from thedate such royalty or sublicense revenue payment was due until the date paid atthe rate equal to one and one half percent (1.5%) per month, and (c) ifsuch error is in excess of ten percent (10%) of any royalty or sublicenserevenue payment, the cost of the audit.  Inall other cases, the costs of the audit shall be paid for by the partyconducting the audit.  All informationdisclosed pursuant to an audit shall be deemed Confidential Information subjectto the provisions of Section 8 hereof.

 

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

 

7.1                                 Ownership.

 

(a)                                  ACT.  ACT shall own the ACT PatentRights.

 

(b)                                 Infigen.  Infigen shall own the InfigenPatent Rights.

 

7.2                                 ACT Patent Rights.

 

(a)                                  Responsibility; Costs.  ACTwill retain primary responsibility for filing, prosecution and maintenance ofthe ACT Patent Rights in all countries.  Thecosts of such filing, prosecution and maintenance shall be borne by ACT.  ACT and Infigen will pay the fees and expensesof their respective outside patent counsel for the activities described in thisSection 7.2.

 

(b)                                 Consultation; Abandonment.  ACTwill not allow any patent or patent application within the ACT Patent Rights tobecome expired or abandoned without giving Infigen the right to assumeresponsibility for such patent or patent application, and if Infigen so elects,ACT will assign such patent or patent application to Infigen, and Infigen willthereafter assume control thereof and all expenses related thereto.  Infigen’s rights under this Section 7.2(b) shallbe subject to the rights of the University under the UMASS license (including Article 6thereof. Infigen shall make its election under this paragraph within 30 daysfrom the date ACT notifies Infigen that ACT intends to allow a patent or patentapplication to expire.  ACT shall have 30days from the date of Infigen’s election to assign the patent or patent applicationto Infigen.

 

(c)                                  Notice; Enforcement of ACT Patent Rights.  Eachparty shall promptly notify the other in writing of any alleged infringement ormisappropriation by third parties of any ACT Patent Rights and provide anyinformation available to that party relating to such alleged infringement ormisappropriation.  ACT shall have theprimary right, but not the obligation, to take action in its own name to securethe cessation of any infringement or misappropriation of the ACT Patent Rightsor to enter suit against the infringer.  Anysuch action will be at ACT’s expense, employing counsel of its own choosing.  If ACT elects not to exercise its right to

 

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prosecute or take other appropriate action inconnection with an infringement or misappropriation of the ACT Patent Rights inthe Infigen Fields or fails to take any such action within sixty (60) days offirst receiving notice of such infringement or misappropriation, Infigen may doso at its own expense, controlling such action. (ACT will permit any suchaction under this Section to be brought in its name if required by law.)In the event of any infringement or misappropriation suit against a third partybrought by either party pursuant to this Section, the party so proceeding shallpay to the other party all of its costs and expenses (but not attorneys’ fees)in connection with such action and such other party shall join in andreasonably cooperate with respect to such action to the extent necessary toinitiate and maintain it (e.g., by providing relevant documents, witnesses andtestimony, etc.). Infigen’s rights under this Section 7.2(c) shall besubject to the rights of the University under the UMASS license (including Article 6thereof).

 

7.3                                 Infigen Patent Rights

 

(a)                                  Responsibility; Costs.  Infigenwill retain primary responsibility for filing, prosecution and maintenance ofthe Infigen Patent Rights in all countries.  The costs of such filing, prosecution andmaintenance shall be borne by Infigen. Infigen and ACT will pay the fees andexpenses of their respective outside patent counsel for the activitiesdescribed in this Section 7.3

 

(b)                                 Consultation; Abandonment.  Infigenwill not allow any patent or patent application within the Infigen PatentRights to become expired or abandoned without giving ACT the right to assumeresponsibility for such patent or patent application, and if ACT so elects,Infigen will assign such patent or patent application to ACT, and ACT willthereafter assume control thereof and all expenses related thereto.  ACT shall make its election under this paragraphwithin 30 days from the date Infigen notifies ACT that Infigen intends to allowa patent or patent application to expire.  Infigen shall have 30 days from the date of ACT’selection to assign the patent or patent application to ACT.

 

(c)                                  Notice; Enforcement of Infigen Patent Rights.  Eachparty shall promptly notify the other in writing of any alleged infringement ormisappropriation by third parties of any Infigen Patent Rights and provide anyinformation available to that party relating to such alleged infringement ormisappropriation.  Infigen shall have theprimary right, but not the obligation, to take action in its own name to securethe cessation of any infringement or misappropriation of the Infigen PatentRights or to enter suit against the infringer.  Any such action will be at Infigen’s expense,employing counsel of its own choosing.  IfInfigen elects not to exercise its right to prosecute or take other appropriateaction in connection with an infringement or misappropriation of the InfigenPatent Rights in the ACT Fields or fails to take any such action within sixty(60) days of first receiving of such infringement or misappropriation, ACT maydo so at its own expense, controlling such action. (Infigen will permit anysuch action under this Section to be brought in its name if required bylaw.) In the event of any infringement or misappropriation suit against a thirdparty brought by either party pursuant to this Section, the party so proceedingshall pay to the other party all of its costs and expenses (but not attorneys’ fees)in connection with such action and such other party shall join in andreasonably cooperate with respect to such action to the extent necessary toinitiate and maintain it (e.g., by providing relevant documents, witnesses andtestimony, etc.).

 

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7.4                                 Allocation of Damages or Other MonetaryAwards.  If either party brings an action under this Article 7,any damages or other monetary awards recovered by that party shall be appliedproportionately first to defray the unreimbursed costs and expenses (including reasonableattorneys’ fees) incurred by either or both parties in the action.  Any remaining balance shall be the property ofthe party bringing the action.

 

7.5                                 Settlement Procedures.  Nosettlement, consent judgment or other voluntary final disposition of a suitbeing prosecuted by a party under this Article 7 may be entered intowithout the consent of the other party if such settlement, consent judgment orother voluntary final disposition would alter, derogate or diminish such otherparty’s rights under the Agreement or otherwise materially adversely affectsuch other party, which consent shall not be unreasonably withheld or delayed.

 

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

 

8.1.                              Confidential Information; Non-Disclosure.  Exceptto the extent expressly authorized by this Agreement or by other prior writtenconsent by the disclosing party, each party shall during the term of thisAgreement and for a period of five (5) years thereafter: (i) treat asconfidential all Confidential Information of the disclosing party; (ii) notuse such Confidential Information except as authorized herein or otherwise authorizedin writing, (iii) implement reasonable procedures to prohibit thedisclosure, unauthorized duplication, misuse or removal of the disclosing party’sConfidential Information; (iv) except as set forth in (v) below, notdisclose such Confidential Information to any third party, and (v) onlydisclose the Confidential Information to those of its employees, sublicensees,customers and third party contractors who have need to know such ConfidentialInformation.  Without limiting theforegoing, each of the parties shall protect the Confidential Information usingat least the same procedures and degree of care that it uses to prevent thedisclosure of its own confidential information of like importance, but in noevent less than reasonable care.

 

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

 

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8.3                                 Injunctive Relief.  ACTand Infigen acknowledge and agree that any breach of the confidentialityobligations imposed by this Article 8 will constitute immediate andirreparable harm to the party disclosing the Confidential Information and/orits permitted successors and assigns, which cannot adequately and fully becompensated by money damages and will warrant, in addition to all other rightsand remedies afforded by law, injunctive relief, specific performance, and/orother equitable relief.  The disclosingparty’s rights and remedies hereunder are cumulative and not exclusive.

 

8.4                                 Termination.  Upon termination (but notexpiration) of this Agreement, and/or upon the request of the disclosing partyat any time, the receiving party shall promptly return to the disclosing party,all copies of Confidential Information received from such party, and shallreturn or destroy, and document the destruction of, all summaries, abstracts,extracts, or other documents which contain any Confidential Information of theother party in any form, except that Infigen or ACT, as applicable, shall bepermitted to retain a copy (or copies, as necessary) of such ConfidentialInformation for archival purposes or as required by any law or regulation.

 

**9.****                                      REPRESENTATIONSAND WARRANTIES.**

 

9.1                                 No Conflict.  Each party warrants andrepresents to the other that it has the legal rights and power to enter intothis Agreement and to extend the rights and licenses granted to the other inthis Agreement, that this Agreement constitutes the binding legal obligation ofeach party, enforceable in accordance with its terms, that the execution of,and performance of the efforts contemplated by, this Agreement will notconflict with or result in any breach of any of the terms, conditions, orprovisions of, or constitute a default under, any agreement to which it is aparty or by which it is bound or with any applicable law, rule orregulation, and that any necessary or appropriate permits, consents orapprovals have been obtained.  Each partyfurther represents to the other that it is not aware of any legal obstacles,including patent rights of others, which could prevent either party fromcarrying out the provisions of this Agreement.  During the term of this Agreement, ACT andInfigen shall not enter into any collaboration or other agreement, take anyaction, or fail to take any action that would cause those representations andwarranties to be breached.

 

9.2                                 Representations and Warranties by ACT.  ACTrepresents and warrants to Infigen that:

 

(a)                                  ACT owns or has the right to grant a licenseto the ACT Patent Rights and has the right to grant to Infigen the license setforth above;

 

(b)                                 ACT has provided Infigen with a copy of theUMASS License, as amended, with certain terms redacted, and ACT represents andwarrants that the said copy is a true and complete (except as redacted) copy ofthe UMASS License as of the Effective Date;

 

(c)                                  ACT has no outstanding encumbrances oragreements including any agreement with academic institutions, universities, orthird parties, whether written, oral or implied, which could be inconsistentwith the license granted herein;

 

(d)                                 ACT is unaware of any information that wouldraise a substantial question

 

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as to the validity of any of the ACT PatentRights, other than the ongoing interference claim with Geron Corporation;

 

(e)                                  To the best of ACT’s knowledge there is nopatent issued to a third party as of the Effective Date that would be infringedby the development, manufacture, use or sale of an ACT Product or by theperformance of rendering of an ACT Service; and

 

9.3                                 Representation and Warranty by Infigen.  Infigenrepresents and warrants to ACT that:

 

(a)                                  Infigen owns or has the right to grant alicense to the Infigen Patent Rights and has the right to grant to ACT thelicense set forth above;

 

(b)                                 Infigen has no outstanding agreementsincluding any agreement with academic institutions, universities, or thirdparties, whether written, oral or implied, which could be inconsistent with thelicense granted herein;

 

(c)                                  Infigen is unaware of any information thatwould raise a substantial question as to the validity of any of the InfigenPatent Rights, other than the ongoing interference claim with GeronCorporation;

 

(d)                                 To the best of Infigen’s knowledge there isno patent issued to a third party as of the Effective Date that would beinfringed by the development, manufacture, use or sale of an Infigen Product orby the performance of rendering of an Infigen Service; and

 

9.4                                 Disclaimer.

 

(a)                                  Except as expressly provided herein, Infigendoes not make any representation or warranty as to the validity or scope of theInfigen Patent Rights, nor does Infigen make any representation or warrantythat the exercise of the rights granted to ACT with respect to the InfigenPatent Rights will not infringe the patent or other intellectual property rightsof any third party.

 

(b)                                 Except as expressly provided herein, ACT doesnot make any representation or warranty as to the validity or scope of the ACTPatent Rights, nor does ACT make any representation or warranty that theexercise of the rights granted to Infigen with respect to the ACT Patent Rightswill not infringe the patent or other intellectual property rights of any thirdparty.

 

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

 

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

 

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consequential damages suffered or incurred bythird parties who are, in turn, seeking the same from the Infigen IndemnifiedParties, which shall be covered by the indemnity set forth herein)), incurredor imposed upon any of the Infigen Indemnified Parties in connection with anyclaims (including third party claims), suits, actions, demands or judgments:

 

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

 

(b)                                 arising out of the death or injury to anyperson or persons or out of any damage to property resulting from or otherwiseattributable to the making, using, development, testing, registration,distribution and/or sale by or through ACT of any Infigen Products or InfigenServices under this Agreement, but excepting any claims that the Infigen PatentRights infringe the patents or other intellectual property rights of any thirdparty.

 

10.2                           Indemnification by Infigen.  Infigenagrees to defend, indemnify and hold harmless ACT and the University, and theiraffiliates, trustees, agents, directors, officers and employees (the “ACTIndemnified Parties”), at Infigen’s cost and expense, from and against any andall losses, costs, liabilities, damages, fees and expenses, includingreasonable attorneys’ fees and expenses (excluding, pursuant to Article 11hereof, any special, indirect, reliance, incidental, exemplary, cover orconsequential damages suffered or incurred by any of the ACT Indemnified Partiesdirectly (as opposed to any special, indirect, reliance, incidental, exemplary,cover or consequential damages suffered or incurred by third parties who are,in turn, seeking the same from the ACT Indemnified Parties, which shall becovered by the indemnity set forth herein)), incurred or imposed upon any ofthe ACT Indemnified Parties in connection with any claims (including thirdparty claims), suits, actions, demands or judgments:

 

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

 

(b)                                 arising out of the death or injury to anyperson or persons or out of any damage to property resulting from or otherwiseattributable to the making, using, development, testing, registration,distribution and/or sale by or through Infigen of any ACT Products or ACT Servicesunder this Agreement, but excepting any claims that the ACT Patent Rightsinfringe the patents or other intellectual property rights of any third party.

 

10.3                           Indemnification Claims.  Eachparty shall give the other party prompt notice of any claim for whichindemnification under this Article 10 is or may be applicable and will cooperatewith the indemnifying party in the defense or settlement of such claim at the indemnifyingparty’s expense.  The indemnifying partyshall be required to provide and be entitled to control the defense of anyclaim covered hereunder (including the right to settle it at the solediscretion of the indemnifying party) with counsel reasonably satisfactory tothe other party which may, at its own expense, participate in the defense ofany claim after the indemnifying party assumes control of the defense thereof.  The indemnification obligations in this Section 10shall not apply to amounts paid in settlement of such claim if such settlementis effected without the consent of the indemnifying party, which consent shallnot be unreasonably withheld or delayed.  The failure of the indemnified party todeliver notice to the indemnifying party promptly after the commencement of anysuch action, if prejudicial to the indemnifying

 

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party’s ability to defend such action, shallrelieve the indemnifying party of any liability to the indemnified party underthis Section 10, but the failure to promptly deliver notice to theindemnifying party will not relieve it of any liability that it may have to theindemnified party other than under this Section 10.

 

**11.****                               LIMITATIONOF LIABILITY**.  EXCEPT FOR ANY LIABILITY TO ANY THIRD PARTIESPURSUANT TO ARTICLE 10 OF THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY(OR ITS AFFILIATES, SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES, OR AGENTS) BELIABLE FOR ANY SPECIAL, INDIRECT, RELIANCE, INCIDENTAL, EXEMPLARY, COVER, ORCONSEQUENTIAL DAMAGES, INCLUDING LOSS OF PROFITS AND GOODWILL, EVEN IF SUCHPARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, REGARDLESS OF THETHEORY OF LIABILITY.

 

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

 

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

 

13.1                           Force Majeure.  Neitherparty to this Agreement will be liable for failure to perform any of itsobligations hereunder during any period in which such performance is delayed byfire, flood, war, riot, embargo, organized labor stoppage, earthquake, acts ofcivil and military authorities, or any other acts beyond its reasonablecontrol; provided, however, that the party suffering such delay immediatelynotifies the other party of the delay; provided that the nonperforming partyuses commercially reasonable efforts to avoid or remove those causes of nonperformanceunder this Agreement with reasonable dispatch; and provided, further, that eitherparty shall have the right to terminate this Agreement upon thirty (30) daysprior written notice if the delay of the other party due to any of theabove-mentioned causes continues for a period of thirty (30) days.

 

13.2                           Assignment.  This Agreement, and the rightsand obligations thereunder, may not be assigned or transferred, in whole or inpart, by either party without the prior written consent of the other partyexcept in the case of merger or acquisition involving the majority of theassets of either party.

 

13.3                           Notices.  Any payment, notice or othercommunication required or otherwise given pursuant to this Agreement shall bein writing and delivered by internationally recognized overnight deliveryservice, or by facsimile confirmed by prepaid certified air mail, and shall be deemedto have been properly served to the addressee upon receipt of such written communication.

 

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Addresses: In the case of Infigen, the properaddress for communications shall be:

 
|   | Infigen              |
|--------|----------------------|
|   | 1825 Infinity Drive  |
|   |                 |
|   | De Forest, WI, 53532 |
|   |                 |
|   |                 |   |   |
|   |                 | Attn: Walter Simson, CEO |
|   |                 | Fax: | 608 846-0520 |
|        |                      |  |  |  |

 

With a copyto Roberta Howell, Esq.

 

Foley andLardner

 

Verex Plaza

 

150 EastGilman Street

 

Madison, WI

 

and in the case of ACT, theproper address for communications andall payments shall be:

 

AdvancedCell Technology, Inc.

OneInnovation Drive

Worcester,Massachusetts 01605

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

Fax:    508-756-0931

 

with a copyto:

 

PierceAtwood

One MonumentSquare

Portland,Maine 04101

Attn:  WilliamL. Worden, Esq.

Fax:  207-791-1350

 

13.4                           Choice of Law;Dispute Resolution; Submission to Jurisdiction.  This Agreement is subject to and governed bythe laws of the State of Delaware, without regard to principles of conflicts oflaw thereof, except that questions affecting the construction and effect of anypatent shall be determined by the law of the country in which the patent wasgranted.  Any dispute arising under thisAgreement which is not promptly settled by the parties shall be referred to theChief Executive Officers of the parties.  The Chief Executive Officers will meet fornegotiations

 

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

 

13.5                           Compliance with Law.  ACTand Infigen shall comply with all local, state, federal and international lawsand regulations relating to the development, manufacture, use, and sale of ACTProducts and ACT Services, or Infigen Products and Infigen Services, asapplicable, in the Territory.  Infigenand ACT shall comply with the following:

 

(a)                                  Each party shall obtain all necessaryapprovals from any governmental authorities of any foreign jurisdiction inwhich it intends to make, use, or sell ACT Products or Infigen Products or toperform ACT Services or Infigen Services, as applicable, in the Territory.

 

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

 

13.6                           No Encumbrances.  Neitherparty will create or incur or cause to be incurred or to exist any lien,encumbrance, mortgage, pledge, charge, restriction or other security interestof any kind upon the ACT Patent Rights or the Infigen Patent Rights, asapplicable, without the prior written consent of the other party.

 

13.7                           Counterparts.  ThisAgreement may be executed in any number of counterparts, each of which shall bedeemed an original but all of which together shall constitute one and the sameinstrument.

 

13.8                           Headings.  All headings contained in thisAgreement are for convenience of reference only and shall not be considered inconstruing this Agreement.

 

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13.9                           Binding Effect.  ThisAgreement shall be binding upon and inure to the benefit of the parties andtheir respective permitted successors and assigns.

 

13.10                     Amendment and Waiver.  ThisAgreement may be amended, supplemented, or otherwise modified only by means ofa written instrument signed by both parties.  Any waiver of any rights or failure to act ina specific instance shall relate only to such instance and shall not be construedas an agreement to waive any rights or fail to act in any other instance,whether or not similar.

 

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

 

13.12                     Entire Agreement.  ThisAgreement constitutes the entire agreement of the parties with regard to itssubject matter, and supersedes all previous written or oral representations, agreements(including the Final Settlement Agreement) and understandings between theparties.

 

13.13                     Publicity.  Neither party, nor any of itsAffiliates, shall originate any publicity, news release or other publicannouncement (“Announcements”), written or oral, relating to this Agreement orthe existence of an arrangement between the parties, without the prior written approvalof the other party, which approval shall not be unreasonably withheld, exceptas otherwise required by law.  Anyreferences to the University in such Announcements shall be subject to theapproval of the University.  Theforegoing notwithstanding, ACT and Infigen shall have the right to make suchAnnouncements without the consent of the other party or the University, asapplicable, in any prospectus, offering memorandum, or other document or filingrequired by securities laws or other applicable law or regulation, and topotential business partners under an industry-standard confidentialityagreement, provided that such party shall have given the other party or theUniversity, as applicable, at least ten (10) days’ prior written notice ofthe proposed text for the purpose of giving the other party or the University,as applicable, the opportunity to comment on such text.

 

13.14                     No Implied Licenses.  Noimplied licenses are granted pursuant to the terms of this Agreement.  No license rights shall be created byimplication or estoppel.

 

13.15                     No Agency.  Nothing herein shall be deemedto constitute either party as the agent or representative of the other party,or both parties as joint venturers or partners for any purpose.  Each party shall be an independent contractor,not an employee or partner of the other party, and the manner in which eachparty renders its services under this Agreement shall be within its solediscretion.  Neither party shall beresponsible for the acts or omissions of the other party, and neither partywill have authority to speak for, represent or obligate the other party in anyway without prior written authority from the other party.

 

13.16                     Non-Solicitation.  During the term of this Agreement and for aperiod of one (l)

 

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year thereafter, neither party may solicitany person who is employed by or a consultant to the other party to terminatesuch person’s employment by or consultancy to such party.  As used herein, the term “solicit” shallinclude, without limitation, requesting, encouraging, assisting or causing,directly or indirectly, any such employee or consultant to terminate suchperson’s employment with or consultancy to such party.

 

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

 

13.18                     Bankruptcy.  All rights and licenses grantedunder or pursuant to this Agreement are, and shall otherwise be deemed to be,for purposes of Paragraph 365(n) of the U.S.  Bankruptcy Code, licenses of rights to “intellectualproperty” as defined under Paragraph 101(35A) of the U.S. Bankruptcy Code.  The parties agree that ACT or Infigen, asapplicable, as a licensee of such rights under this Agreement, shall retain andmay fully exercise all of its rights and elections under the U.S. BankruptcyCode.  The parties agree that, in theevent of the commencement of a bankruptcy proceeding by or against ACTincluding under the U.S. Bankruptcy Code, Infigen shall be entitled to acomplete duplicate of (or complete access to, as appropriate) any suchintellectual property and all embodiments of such intellectual property, includingthe ACT Patent Rights, and the same, if not already in Infigen’s possession,shall be promptly delivered to Infigen upon any such commencement of abankruptcy proceeding upon written request therefore by Infigen.  The parties further agree that, in the eventof the commencement of a bankruptcy proceeding by or against Infigen includingunder the U.S. Bankruptcy Code, ACT shall be entitled to a complete duplicateof (or complete access to, as appropriate) any such intellectual property andall embodiments of such intellectual property, including the Infigen PatentRights, and the same, if not already in ACT’s possession, shall be promptlydelivered to ACT upon any such commencement of a bankruptcy proceeding upon writtenrequest therefore by ACT.

 

13.19                     Joint Preparation.  ThisAgreement has been prepared jointly and no rule of strict constructionshall be applied against either party.  Inthis Agreement, the singular shall include the plural and vice versa and theword “including” shall be deemed to be followed by the phrase “withoutlimitation.”

 

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**IN WITNESS****WHEREOF**, theparties hereto and the University have caused this Agreement to be executed theday and year first written above.  Thepersons signing below warrant their authority to sign the Agreement.

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

 

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**SCHEDULE CtoNonexclusive Sublicense Agreement**

 

 

August 1, 2003

 

 

Advanced Cell Technology, Inc.One Innovation DriveWorcester, MA 01605Attention: Michael D. West, Ph.D., President

University of MassachusettsOffice of the General CounselOne Beacon Street, 26th Floor

Boston, MA 02108

 

Infigen, Inc.1825 Infinity DriveDeForest, Wisconsin 53532Attention:

 

Re:                               Non-Exclusive License Agreement dated August 1, 2003 between Advanced Cell Technology, Inc. (“ACT”) and Infigen, Inc.(“LICENSEE”) (the “License Agreement”)

 

Reference is made to the License Agreementidentified above.

 

ACT, the University of Massachusetts (the “University”)and LICENSEE agree that, in the event the UMASS LICENSE (as defined in theLicense Agreement) expires or is terminated for any reason pursuant to theprovisions of the UMASS LICENSE or otherwise, (i) LICENSEE will thereafterpay directly to the University any payments due to ACT under the LicenseAgreement which are reasonably attributable to the University technology orsubject matter of the UMASS LICENSE, and (ii) promptly following suchtermination, the University and LICENSEE will enter into a direct licenseagreement reflecting the applicable terms of the License Agreement and theUMASS LICENSE. For the avoidance of doubt, the references to “Sublicensees” in Section 8.5of the UMASS LICENSE shall not apply to LICENSEE and shall not be construed asvitiating the provisions of Section 5.3 of the License Agreement.  ACT and the University agree that theprovisions of Section 2.2 of the UMASS LICENSE providing for the automaticassignment to the University of sublicenses granted by ACT under said Section 2.2shall not apply to the sublicense by ACT to LICENSEE under the LicenseAgreement, and that the provisions of Section 5.3 of the License Agreementshall govern in the event that the UMASS LICENSE is terminated. ACT and theUniversity agree that LICENSEE will not be bound by any amendment to the UMASSLICENSE that affects LICENSEE’s rights under the License Agreement in anymaterial respects, unless LICENSEE agrees in writing to such amendment. NeitherACT nor the University will make any change or addition to, or otherwise amend,the

 

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