Exhibit 10.3


EXCLUSIVE
SUBLICENSE AGREEMENT


This
Exclusive Sublicense Agreement (“Agreement”) is made and entered into as of March 29,
2006 (the “Effective Date”), by and between TranXenoGen, Inc., a Delaware
corporation with offices located at 800 Boston Turnpike Rd, Shrewsbury,
Massachusetts 01545 (“TXG”), and Advanced Cell Technology, Inc., a
Delaware corporation with offices located at 1201 Harbor Bay Parkway, Suite 120,
Alameda, California 94502 (“Licensee” or “ACT”) (TXG and Licensee sometimes
hereinafter referred to as the “parties”, or individually as a “party”). As set
forth below, Brandeis University (the “University”) agrees to be bound by
certain provisions of this Agreement.


WITNESSETH


WHEREAS,
TXG owns, or has licensed with a sublicensable interest, the Patent Rights (as
defined below); and


WHEREAS,
TXG is in a business synergistic with the business of ACT; and


WHEREAS,
the Patent Rights are of strategic importance to the business of ACT; and


WHEREAS,
TXG and ACT previously entered into an Option Agreement, dated May 3,
2005, pursuant to which TXG granted to ACT an option to acquire an exclusive
license to the Patent Rights; and


WHEREAS,
ACT desires to obtain an exclusive sublicense from TXG under the Patent Rights
upon the terms and conditions hereinafter set forth below; and


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


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


ARTICLE
1 - DEFINITIONS


For
the purposes of this Agreement, the following words and phrases shall have the
following meanings:


1.1           “Affiliate” means any
corporation, partnership or other legal entity other than a party, in whatever
country organized, controlling, controlled by or under common control with a
party, but only so long as such control continues to exist. For purposes of
this Section 1.1, “control” (a) means possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of an entity, whether through ownership of voting securities, by
contract or otherwise and (b) “control” shall be assumed if a party owns,
directly or indirectly










 



through one or more Affiliates, of fifty percent (50%)
or more of the shares of stock entitled to vote for the election of directors,
in the case of a corporation, or fifty percent (50%) or more of the equity
interests in the case of any other type of legal entity.


1.2           “Brandeis License” means the
License Agreement between TXG and the University, effective as of November 24,
1998, as it may be amended from time to time after the Effective Date.


1.3           “Brandeis Patent Rights” means
Patent Rights licensed by TXG from the University under the Brandeis License.


1.4           Collective Terms. For purposes
of this Agreement, except as otherwise expressly provided herein or unless the
context otherwise requires:  (a) the
use herein of the plural shall include the single and vice versa
and the use of the masculine shall include the feminine; (b) unless
otherwise set forth herein, the use of the term “including” or “includes” means
“including [includes] but [is] not limited to”; and (c) the words “herein,”
“hereof,” “hereunder” and other words of similar import refer to this Agreement
as a whole and not to any particular provision. Additional terms may be defined
throughout this Agreement.


1.5           “Combination Product” means a
product that contains a Licensed Product component and at least one other
component that has independent therapeutic or diagnostic utility, could
reasonably be sold separately and has economic value on its own.


1.6           “Control” or “Controlled”
means, with respect to any Patent Rights, TXG Technology or Confidential
Information of TXG, the possession by TXG of the ability to grant a license or
sublicense of such Patent Rights or TXG Technology or disclose such
Confidential Information as provided for herein without the payment of
additional consideration to, and without violating the terms of any agreement
or arrangement with, any Third Party.


1.7           “Field of Use” means


(a)           non-human cells,
embryos, organs, organisms;


(b)           any of (a) above
as cloned, transgenic, or cloned transgenic forms;


(c)           any protein products
and other biological molecules produced by, or prepared from, (a) and (b) above;


(d)           any methods,
technologies, or processes for the creation of (a) through (c) above;


(e)           therapeutic and
diagnostics (including products, devices, or processes) of (a) through (d) above;


(f)            cloned, transgenic,
or cloned transgenic human cells, tissues and organs





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not derived by Human
Cloning (as defined below).


The Field of Use shall under no circumstances include


(i)            the use of Human Reproductive Cells
(“Human Reproductive Cells” are defined herein as human meiotic or post-meiotic
germ cells, human gametes, human fertilized eggs, or human pre-implantation
embryos) for any purpose;


(ii)           Human Cloning (wherein “Human Cloning”
is defined as any action combining a human egg or any part thereof, with the
nucleus or any nuclear material from any human cell);


(iii)          human embryos, cloned embryos, human
tissue derived by Human Cloning; or


(iv)          transgenic human embryos, transgenic
cloned human embryos, transgenic human cells, or transgenic human tissues
derived by Human Cloning.


1.8           “Improvement Patents” means
any inventions, invention disclosures, patents and patent applications (other
than the Patent Rights) (a) Controlled by, TXG, and (b) (i) relating
to the specification or claims of the Patent Rights, or (ii) useful,
necessary or required to develop or manufacture Licensed Products or to provide
Licensed Services within the Field of Use (including, without limitation,
improvements relating to the Patent Rights in Exhibit A), together
in each case with all related continuation, continuation-in-part, divisional,
reissue, revision, extension, substitution and reexamination patents and patent
applications, and all corresponding foreign patents and patent applications and
other counterparts of the patents described herein.


1.9           “Licensed Product” means any
product:


(a)           the
manufacture, use, selling or offering for sale of which would infringe one or
more Valid Claims of the Patent Rights, but for the licenses granted herein; or


(b)           which
is developed through the use of, or manufactured by using, a process or method
that would infringe one or more Valid Claims of the Patent Rights, but for the
licenses granted herein.


Without limiting the
generality of the foregoing, and by way of illustration but not limitation,
Licensed Products may include any organism that is described by clause (a) or
(b) above or that was made by a process that is described by clause (a) or
(b) above, as well as any product (e.g., a protein, cell, tissue or organ)
described by clause (a) or (b) above that is produced by or obtained
from such an organism.


1.10         “Licensed Service” means any
service the performance of which would infringe one or more Valid Claims under
the Patent Rights, but for the licenses granted hereunder.



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1.11         “Licensee” means Advanced Cell
Technology, Inc., a Delaware corporation with offices located at
1201 Harbor Bay Parkway, Suite 120, Alameda, California 94502.


1.12         “Net Sales” means the invoiced
amount earned on sales by Licensee or its Affiliates of Licensed Products and
Licensed Services to any third person or entity (except for an Affiliate of
Licensee), less, to the extent applicable, the following:


(a)           discounts
actually allowed and taken;


(b)           sales,
tariff and import duties, use and other taxes or governmental charges directly
imposed with reference to particular sales;


(c)           packaging,
transportation and insurance prepaid or allowed to the extent included in the
gross invoiced sales price; and


(d)           amounts
repaid, allowed or credited on returns or rejection.


In the case of
Combination Products, Net Sales means the total invoice amount earned on sales
by Licensee or its Affiliates of Combination Products to any third person or
entity (except for an Affiliate of Licensee), less, to the extent applicable,
the deductions set forth above, multiplied by a proration factor that is
determined as follows:


(i)            If all components of the Combination
Product were sold separately during the same or immediately preceding calendar
quarter, the proration factor shall be determined by the formula [A/(A+B)],
where A is the average invoice amount earned on the Licensed Product during
such period when sold separately in finished form, and B is the average invoice
amount earned on all other active components of the Combination Product during
such period when sold separately in finished form; or


(ii)           if all components of the Combination
Product were not sold separately during the same or immediately preceding
calendar quarter, the proration factor shall be determined by the formula
[C/(C+D)], where C is the average fully absorbed cost of the Licensed Product
component during the prior quarter and D is the average fully absorbed cost of
all other active components of the Combination Product during the prior
quarter.


1.13         “Patent Rights” means (a) the
inventions, invention disclosures, patent applications and patents listed in Exhibit A
(“Inventions”); (b) any patents or patent applications claiming inventions
disclosed in the Inventions; (c) any continuations,
continuations-in-parts, or divisionals of, or other patent applications claiming
priority to, patent applications identified in the preceding subsections (a) or
(b) and patents issuing therefrom; (d) any extension, renewal,
reexamination, substitution, or reissue of a patent identified in subsections
(a), (b), or (c); and (e) all foreign equivalents of subsections (a), (b),
(c) and (d).


1.14         “Sublicense Income” means all
consideration that Licensee receives for granting a sublicense pursuant to Section 2.2
of this Agreement to any third party that is not an Affiliate of



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Licensee, including
without limitation license fees, royalties, milestone payments, equity,
up-front fees, success fees and license maintenance fees, but excluding
payments specifically committed to the development of Licensed Products or
Licensed Services to be undertaken by Licensee based on full-time equivalent or
other cost-accounting methodologies that are consistent with then current
industry practices. For the avoidance of doubt, “Sublicense Income” excludes
payments made in consideration for the issuance of equity or debt securities of
Licensee up to fair market value.


1.15         “Territory” means the world.


1.16         “TXG Technology” means know-how,
technical information, research and development information, research data,
test results, knowledge, inventions, discoveries, developments, methods,
formulas, techniques, improvements, process information, designs, drawings,
specifications, schematics and other documentation, data, databases, processes,
methods of production and other information and materials, whether tangible or
intangible, that (a) is Controlled by TXG during the term of this
Agreement, (b) relates to the Patent Rights, and (c) is necessary or
useful for Licensee to practice the license granted to it hereunder. For the
avoidance of doubt, it is the parties’ intention that TXG Technology covers
unpatented items of the type articulated above, and that in appropriate
circumstances, certain TXG Technology may in the future become included within
the Patent Rights (as defined below).


1.17         “Valid Claim” means (a) a
claim of any issued and unexpired United States or foreign patent within the
Patent Rights which has not lapsed or become abandoned or been declared invalid
or unenforceable by a court of competent jurisdiction or an administrative
agency from which no appeal can be or has been taken within the time allowed
for such appeal and which has not been disclaimed or admitted to be invalid or
unenforceable through reissue, disclaimer or otherwise, or (b) to the
extent rights are granted by a governmental patent authority thereunder (i.e.,
to the extent that the owner would be able to enforce a right to a patent
royalty thereunder under applicable patent law), a claim of a pending patent
application within the Patent Rights.


ARTICLE 2 - GRANT


2.1           (a)           Sublicense
Grant. Subject to the terms and conditions of this Agreement, TXG hereby
grants to Licensee and its Affiliates a royalty-bearing, exclusive (even as to
TXG, except for the retained rights described in Section 2.1(b) below),
transferable (solely in accordance with Section 11.1), sublicensable
(solely in accordance with Section 2.2) license or sublicense, as the case
may be, under its rights in the Patent Rights and TXG Technology, to develop,
make, have made, use, sell, have sold, offer to sell, import, export,
reproduce, distribute, perform and display, and otherwise dispose of Licensed
Products, and to develop and perform Licensed Services, and to use and practice
in products and services any process, art or method, included in the TXG
Technology, in the Territory in the Field of Use. This Agreement is subject to
the relevant terms of the Brandeis License applicable to sublicensees as such
terms have been incorporated herein, as the Brandeis License may be amended
from time to time, provided, that (i) as provided in Section 2.1(c) below,
the Brandeis License may not be amended in a manner



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that materially and
adversely affects the rights and benefits extended to Licensee hereunder
without the prior written consent of Licensee, and (ii) in the event of
any inconsistency between the Brandeis License and Section 2.1(c) hereof,
Section 2.1(c) hereof shall govern. TXG agrees to provide Licensee
with prior written notice of any amendments to the Brandeis License and provide
Licensee with the opportunity to consent to such amendments, in whole or part,
in which case this Agreement will be subject to such amendments to the extent
consented to by Licensee.


(b)           Retained
Rights of TXG. Subject to the other terms of this Agreement, TXG hereby
retains the right to use and practice the Patent Rights and TXG Technology to
develop, make, have made, use, sell, have sold, offer to sell, import, export,
reproduce, distribute, perform and display, and otherwise dispose of products,
and to develop and perform services, for the development of laboratory animal
models, specifically limited to models based on rats, rabbits, and guinea pigs,
for use in the study of human disease and testing of pharmaceuticals.


(c)           The Brandeis License. Licensee
acknowledges that the Brandeis Patent Rights licensed to Licensee hereunder are
owned by the University and are licensed to TXG under the Brandeis License. TXG,
the University and Licensee agree that, in the event the Brandeis License is
terminated prior to its natural date of expiration for any reason (or this
Agreement is rejected by TXG in bankruptcy or terminated by Licensee pursuant
to Section 7.2 or 7.7), (i) promptly following such termination (or
rejection) of the Brandeis License, the University shall, if Licensee is a
sublicensee in good standing and there are no outstanding legal claims asserted
by TXG against Licensee relative to the terms of this Agreement, directly
license the Brandeis Patent Rights to Licensee in a mutually-agreeable license
agreement with the terms of such license agreement no less favorable than the
Brandeis License and Licensee will thereafter make any payments due to TXG
directly to the University during the term of this Agreement; and (ii) Licensee
shall not be liable for any payments that may be due and payable to the
University by TXG. TXG AND THE UNIVERSITY ACKNOWLEDGE AND AGREE THAT LICENSEE
SHALL BE ENTITLED TO SPECIFIC PERFORMANCE OF THE UNIVERSITY’S OBLIGATIONS UNDER
THIS SECTION 2.1(c) to the extent not inconsistent with
then-prevailing laws and regulations to which the University may be subject. For
the avoidance of doubt, TXG and the University agree that Section 9.4 of
the Brandeis License shall not apply to Licensee on any expiration or
termination of the Brandeis License and shall not be construed as vitiating the
provisions of this Agreement (including Sections 2.1(a) and this Section 2.1(c)).
However, nothing in this Section 2.1(c) shall be construed as
prohibiting the subsequent negotiation between University and Licensee of any
of the terms contained in Section 9.4 of the Brandeis License. TXG and the
University agree that the provisions of this Section 2.1(b) shall
govern in the event that the Brandeis License is terminated. TXG and the
University agree that Licensee will not be bound by any amendment to the
Brandeis License that adversely affects Licensee’s rights or obligations under
this Agreement in any material respect, unless Licensee agrees in writing to
such amendment. For the avoidance of doubt, TXG and the University agree that
Licensee has no obligations to the University under the Brandeis License,
including without limitation any obligation to make any payments to the
University thereunder.


(d)           Diligence. Licensee will
exercise commercially reasonable efforts and diligence in developing and commercializing
Licensed Products and Licensed Services in the Field of Use,



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such reasonable efforts
and diligence to be in accordance with the efforts and resources Licensee would
use for a product candidate owned by it or to which it has rights, which is of
similar market potential as the applicable Licensed Product or Licensed
Service, taking into account the competitiveness of the marketplace, the
proprietary position of the Licensed Product or Licensed Service, the relative
potential safety and efficacy of the Licensed Product or Licensed Service and
the cost of goods and availability of capacity to manufacture and supply the
Licensed Product or Licensed Service at commercial scale.


2.2           Sublicenses to Patent Rights. Licensee
shall have the right to grant further sublicenses to or under the Patent Rights.
Licensee shall provide TXG with a copy of all sublicense agreements of the
Patent Rights prior to execution, which shall be deemed Licensee’s
Confidential Information subject to the provisions of Article 8 of this
Agreement.


2.3           Technology Transfer. Promptly
upon execution of this Agreement TXG shall provide Licensee with all existing
TXG Technology (including without limitation Confidential Information and
materials Controlled by TXG as may be reasonably necessary to allow Licensee to
fully exploit the licenses granted hereunder, including any such Confidential
Information obtained from the University). From time to time thereafter during
the term of the Agreement, TXG shall provide Licensee with any additional TXG
Technology and such technical assistance as Licensee reasonably shall request,
provided that such requests do not unreasonably interfere with the regular
business operations of TXG.


2.4           Right of First Negotiation. Notwithstanding
anything to the contrary in this Agreement, in the event that TXG Controls any
Improvement Patents during the term of this Agreement, Licensee shall have a
right of first negotiation to obtain an exclusive or, at Licensee’s option,
non-exclusive right and license to such Improvement Patents and all related
intellectual property rights in the Field of Use to the maximum extent of TXG’s
rights to grant such a license. TXG shall promptly notify Licensee upon
Controlling any such rights and shall, prior to any discussion with any third
party, present to Licensee, a proposal of terms and conditions both to obtain
an (x) exclusive or (y) nonexclusive right and license to such
Improvement Patents and all related intellectual property rights in the Field
of Use. In the event that Licensee and TXG have not agreed upon the terms and
conditions pursuant to which Licensee would receive such a right and license
within 120 days after Licensee’s receipt of TXG’s proposal, TXG shall be free
to discuss terms and conditions for granting of rights and license with respect
to such specific Improvement Patent(s) with any third party without
further obligation to Licensee; provided, however, that no right or license
with respect to any such Improvement Patent will be granted to a third party in
the Field of Use within 12 months of the later of (i) termination of
negotiations between Licensee and TXG, or (ii) the expiration of the above
mentioned 120 days, under terms and conditions more favorable to the third
party than the terms and conditions last discussed with Licensee without first
offering such more favorable terms and conditions to Licensee for Licensee’s
consideration and possible acceptance.


ARTICLE 3 - CONSIDERATION


3.1           Initial Payment. In partial
consideration of the rights and licenses granted to



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Licensee by TXG in this
Agreement, Licensee agrees to pay to TXG a license fee (the “License Fee”)
equal to $400,000 on the Effective Date, payable through the payment of
$150,000 in cash and the issuance of shares of common stock of Licensee within
a fair market value on the Effective Date of $250,000, pursuant to the terms
of, and subject to the conditions set forth in, the Subscription Agreement to
be executed by the parties substantially in the form attached hereto as Exhibit B.


The License Fee is not
refundable and is not creditable against other payments due to TXG under this
Agreement.


3.2           Royalties.


(a)           In
partial consideration of the license rights and licenses granted by TXG to
Licensee in this Agreement, Licensee agrees to pay to TXG the following
royalties:


(1) 
three percent (3%) of the Net Sales of all Licensed Products and Licensed
Services that are Cell-Based Applications;


(2) 
two percent (2%) of the Net Sales of all Licensed Products and Licensed
Services that are Animal Applications; and


(3) 
two percent (2%) of the Net Sales of all Licensed Products not covered by (1) and
(2) above.


For the avoidance of
doubt, no multiple royalties shall be payable because any Licensed Product or
Licensed Service is covered by more than one patent or patent application
within the Patent Rights. For purposes of this Section 3.2, Cell-Based
Applications shall mean Licensed Products or Licensed Services that are
principally based on cloned, transgenic, or cloned transgenic human cells,
tissues and organs not derived by Human Cloning (as defined above), and Animal
Applications shall mean all other Licensed Products or Licensed Services (i.e.,
Licensed Products or Licensed Services not principally based cloned,
transgenic, or cloned transgenic human cells, tissues and organs not derived by
Human Cloning (as defined above).


(b)           The
obligation of Licensee to pay royalties on sales of Licensed Products or
Licensed Services covered by a Valid Claim of the Patent Rights shall terminate
on a country-by-country basis concurrently with the expiration or termination
of the last applicable Valid Claim within the Patent Rights in the country in
the Territory in which the Licensed Product or Licensed Service is sold.




3.3           License Maintenance Fee.


(a)           Subject
to the terms and conditions of this Agreement (including without limitation
subsections (b) and (c) of this Section 3.3), on January 1,
2007, and on each January 1 thereafter during the term of this Agreement,
Licensee shall pay TXG an annual maintenance fee of $25,000 (the “Maintenance
Fee Period”).



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(b)           The
maintenance fee payments shall be considered an advance against royalties and
Sublicense Income payable to TXG hereunder and shall be fully creditable
against any royalties and Sublicense Income payable to TXG hereunder in the
same twelve (12) month period in which such maintenance fee is paid.
Accordingly, Licensee shall not be obligated to pay TXG any royalties or
Sublicense Income otherwise payable hereunder to the extent that the total
accrued royalties and Sublicense Income otherwise payable in the same twelve
(12) month period in which such maintenance fee is paid do not exceed the
maintenance fee paid at the beginning of such twelve (12) month period. Waiver
of any payment of the annual maintenance fee by TXG shall not be construed as a
waiver of any subsequent payment of the annual maintenance fee.


(c)           The
obligation of Licensee to pay maintenance fees shall terminate concurrently
with the expiration or termination of the last applicable Valid Claim within
the Patent Rights in the Territory.


(d)           TXG
acknowledges the receipt of $20,000 paid by Licensee as an option fee. TXG
agrees that Licensee may credit $10,000 of the $20,000 option fee against the
initial payment made under Section 3.1 of this Agreement.


3.4           Third Party Royalties. In the
event that Licensee is required to make and actually does make royalty payments
to one or more third parties for a license to an issued patent or patents (“Third
Party Payments”) in order to develop, make, have made, use, import, export,
sell, offer for sale or otherwise exploit Licensed Products or to perform
Licensed Services for a Cell-Based Application, in the absence of which such
Licensed Product or Licensed Service could not legally be used or sold or
performed in such country, then, Licensee may offset the royalties otherwise
due pursuant to Section 3.2(a) above for such Licensed Product or
Licensed Service in the same royalty period by fifty percent (50%) of such
Third Party Payments. However, the royalty payments under Section 3.2 may
never be reduced by more than fifty percent (50%) in any royalty period.


3.5           Milestone Payment. Licensee
shall pay TXG a milestone payment of $100,000 within thirty (30) days after the
issuance of claims in a U.S. Patent substantially similar to those set forth in
the Preliminary Amendment submitted on March 10, 2004 in U.S. Patent
Application No. 10/798,061.


3.6           Sublicense Income. Licensee
shall pay to TXG a total of ten percent (10%) of all Sublicense Income for
Cell-Based Applications, and fifty percent (50%) of all Sublicense Income for
Animal Applications. For Sublicense Income comprising equity, Licensee shall
have the option, upon not less than ten (10) days’ written notice to TXG,
of (a) transferring (or otherwise arranging the issuance) to TXG up to ten
percent (10%) and/or fifty percent (50%) of the shares of capital stock (or
other form of equity interest) received by Licensee as Sublicense Income for
Cell-Based Applications, or Animal Applications, as applicable, provided such
shares (or other equity interest) are valued at their applicable fair market
value as determined by the board of directors of the issuing entity in good
faith at the time of issuance to Licensee (or if not so determined, as
determined by the most recent per-share price at which such same class of
shares



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(or other equity) were
sold to unaffiliated third parties by the issuing entity on comparable terms)
or (b) paying TXG cash in an amount equal to the fair market value of such
shares (or other forms of equity interest), determined as provided in
subsection (a) of this Section 3.6.


3.7           Payment Method. All payments
due under this Agreement shall be paid to TXG in Grafton, Massachusetts,
U.S.A., and shall be made in United States currency without deduction for
taxes, assessments, exchanges, collection or other charges of any kind;
provided, however, that any withholding tax required to be withheld by Licensee
on royalty or Sublicense Income payments under the laws of any country in the
Territory for the account of TXG will be promptly paid by Licensee for and on
behalf of TXG to the appropriate governmental authority, and Licensee will
furnish TXG with proof of payment of such tax. Any such tax actually paid on
behalf of TXG may be deducted from royalty payments or Sublicense Income due
TXG. Conversion of foreign currency to U.S. dollars shall be made at the
conversion rate reported in The Wall Street Journal on the last working day of
the calendar quarter to which the payment relates.


3.8           Late Fee. Licensee shall pay
TXG interest on any overdue amounts at the rate of one percent (1%) per month
and twelve percent (12%) per annum, from the date when such payment should have
been made pursuant to Section 3.1, 3.2, 3.3 and/or 3.6, as applicable.


ARTICLE 4 - REPORTS AND RECORDS


4.1           TXG Audit Rights.
Licensee shall keep full, true and accurate books of account containing all
particulars necessary for the purpose of showing the amounts payable to TXG
hereunder. Said books of account shall be kept at Licensee’s principal place of
business for three (3) years following the end of the calendar year to
which they pertain. Said books and the supporting data shall be open upon
reasonable advance notice during Licensee’s normal business hours (and no more
frequently than once per calendar year) for three (3) years following the
end of the calendar year to which they pertain, to the inspection of an
independent auditor reasonably acceptable to Licensee for the purpose of
verifying Licensee’s royalty statement or compliance with payment obligations
under this Agreement. If any such audit determines that the reported payments
to TXG were less than ninety five percent (95%) of the actual amount due to TXG
for the calendar year in question, Licensee shall bear the reasonable cost of such
auditor’s inspection and pay any undisputed deficit amounts within 30 days. In
all other cases, TXG shall pay the costs of the audit. All information
disclosed pursuant to an audit shall be treated as Licensee’s Confidential
Information and, other than the amount of any shortfall, which may be disclosed
to TXG, shall not be disclosed to any third party or used for any purpose other
than to determine the correctness of Licensee’s royalty statement or payment
obligations under this Agreement.


4.2           Licensee Reports. After the
first commercial sale of a Licensed Product or Licensed Service, Licensee,
within forty-five (45) days after June 30 and December 31, of each
year, shall deliver to TXG a true and accurate report, giving such particulars
of the business conducted by Licensee during the preceding six-month
period under this Agreement necessary for the purpose of accounting hereunder. Without
limiting the generality of the foregoing, these reports shall include the
following:



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(a)           number
of Licensed Products manufactured by Licensee and its Affiliates or by any
third party on Licensee’s behalf;


(b)           number
of Licensed Products sold by Licensee and its Affiliates;


(c)           total
receipts for Licensed Products sold by Licensee and its Affiliates;


(d)           total
receipts for all Licensed Services sold by Licensee and its Affiliates;


(e)           deductions
applicable as provided in Section 1.11; and


(f)                                    the
amount of Sublicense Income due to TXG for the applicable royalty period from
each sublicensee.


4.3           Royalty Report. With each such
report submitted, Licensee shall pay to TXG the royalties due and payable under
this Agreement. If no royalties shall be due, Licensee shall so report. All
information disclosed in such report shall be Licensee’s Confidential
Information.


4.4           TXG Reports. Within
sixty (60) days after each anniversary of the Effective Date of this Agreement,
TXG shall furnish Licensee with a written report on its use of the Patent
Rights and the TXG Technology with the retained rights described in Section 2.1(b) above,
including without limitation a description of research and development efforts,
efforts to obtain regulatory approval, marketing efforts, and products and
services offered for sale. All information disclosed pursuant to such reports
shall be treated as TXG’s Confidential Information.


ARTICLE 5 - PATENT RIGHTS


5.1           Responsibility for the Patent
Rights. Subject to the terms of this Agreement, TXG shall be solely
responsible for the preparation, filing, prosecution and maintenance of the
Patent Right listed on Exhibit A. The costs of such filing,
prosecution and maintenance (including without limitation the payment of all
government fees in any given country required to maintain the Patent Rights)
shall be borne by TXG, but Licensee will reimburse TXG for one hundred percent
(100%) of all such costs incurred by TXG that are attributable to maintenance,
annuity fees and translation and grant validation costs incurred by TXG with
respect to such Patent Rights. Either Party may, at its sole expense, prepare,
file, prosecute and maintain any Patent Rights not listed on Exhibit A;
provided, that, (a) such Party provides the non-filing Party with written
notice and an opportunity to comment on all Filings and Responses (as defined
in Section 5.2) with respect thereto and (b) the non-filing Party
provides the filing Party with such reasonable assistance as may be requested
by the filing Party in connection with such Filings and Responses, at the
filing Party’s sole expense.


5.2           Licensee’s Participation. Licensee’s
patent counsel shall be given a reasonable opportunity to comment, at Licensee’s
expense, on all proposed patent filings (“Filings”) and responses (“Responses”)
to patent office actions or other patent office communications that may



 11
 






 



affect the Patent Rights
or Licensee’s rights and obligations hereunder either directly or in
combination with any response thereto (collectively, “Office Communications”)
with respect to the Patent Rights. In the case of Filings, and in the case of
Office Communications to which TXG must respond in a period of time equal to or
exceeding sixty (60) days (excluding extensions), TXG shall deliver copies of
its proposed Filings or Response to Licensee not later than fifteen (15)
business days prior to the patent office deadline (excluding extensions) for
such Filing or Response. TXG will not unreasonably refuse to accept any
suggestions of Licensee’s patent counsel regarding such Filing or Response,
provided that Licensee’s patent counsel provides such comments to TXG’s patent
counsel not less than five (5) days prior to the patent office deadline
(excluding extensions) for such Filing or Response; provided, however,
that TXG will have the final decision on the incorporation of any comments in
such Filing or Response. In the case of Office Communications to which TXG must
respond in less than sixty (60) days (including any extensions), TXG shall
deliver copies of its proposed Response to Licensee not later than ten (10) days
prior to the patent office deadline, and TXG will not unreasonably refuse to
accept any suggestions of Licensee’s patent counsel regarding such Response,
provided that Licensee’s patent counsel provides such comments to TXG’s patent
counsel not less than five (5) days prior to the final patent office
deadline for such Response. In any event, TXG will provide Licensee with copies
of all Office Communications relating to the Patent Rights reasonably promptly
after TXG’s receipt thereof, but in any event within five (5) business
days of receipt. Where TXG fails to forward Office Communications within the
time frame indicated, TXG shall use reasonable commercial best efforts and own
expense to obtain an extension of time to file the Office Communication so as
to provide Licensee fifteen (15) business days to review and comment on such
Office Communication prior to filing. TXG agrees to use reasonable commercial
efforts to prosecute U.S. patents covering the inventions disclosed in
10/798,061 and 10/969,646 and, if Licensee requests, to consult closely with
Licensee’s patent counsel in these efforts.


5.3           Abandonment. TXG will not
allow any patent or patent application within the Patent Rights to become
expired or abandoned, or fail to diligently pursue patent protection for any
invention within the Patent Rights, without giving (a) written notice to
Licensee and the University at least thirty (30) business days prior to the
next due date for any required communication, response to office action,
filing, or payment, failure to meet which would result in expiration or
abandonment, including but not limited to provisional abandonment, of the
patent or patent application, and (b) Licensee or the University the right
to assume responsibility for such patent or patent application. If Licensee or
the University so elects, (i) TXG will execute such documents and
otherwise perform such acts and make all filings as may be reasonably required
to permit Licensee’s or the University’s designees to prosecute and maintain
such patent or application in such jurisdiction(s) and transact all matters
connected therewith (including, as necessary, appointing Licensee or the
University as TXG’s delegatee or agent, as applicable, for the purpose of
continuing to exercise Licensee’s prosecution and maintenance rights under the
Brandeis License, appointing Licensee’s or the University’s patent counsel as
associate attorneys of record, and changing address of the patent attorney of
record with the appropriate patent authorities), and (ii) Licensee or the
University will thereafter assume control thereof and all expenses (arising
thereafter) for such prosecution and maintenance by Licensee or the University.



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5.4           Enforcement of the Patent Rights.
The parties agree to notify each other in writing of any actual or threatened
infringement by a third party of the Patent Rights or of any third-party claim
of invalidity or unenforceability of the Patent Rights. Licensee shall have the
first right to prosecute and defend such claims under its sole control and at
its sole expense. If Licensee does proceed with such prosecution or defense,
TXG shall provide reasonable assistance to Licensee at Licensee’s request,
provided Licensee pays TXG for the reasonable out-of-pockets costs incurred by
TXG in such assistance. Any recovery obtained in an action under this Section 5.4
shall be distributed as follows, in this order: (i) Licensee shall be
reimbursed for any expenses incurred in the action; and (ii) Licensee
shall receive the remaining recovery, less a reasonable approximation of the
royalties that Licensee would have paid to TXG if Licensee had received the
amount awarded as ordinary damages as Net Sales of Licensed Products sold by
Licensee. Licensee may, after written notice to TXG, offset 100% of any
unreimbursed expenses incurred by it in prosecuting or defending claims under
this Section 5.4 against any royalty or maintenance fee due to TXG under
this Agreement; provided, that, such offset shall in no event
reduce the royalty or maintenance fee otherwise due to TXG in any calendar
quarter by more than twenty-five percent (25%). Licensee’s rights under this Section 5.4
shall be subject to the rights of the University under the Brandeis License
(i.e. Section 7 thereof), provided that the University agrees to permit
Licensee to assume control of and responsibility for such infringement action
or defense in accordance with this Section 5.4 provided Licensee consults
and cooperates with the University in accordance with Section 7 of the
Brandeis License. TXG will otherwise perform all acts and effect all filings
reasonably necessary to permit Licensee to exercise its rights under this Section 5.4
at Licensee’s sole expense.


5.5           TXG Rights to Enforce. In the
event that Licensee fails to initiate an infringement action within a
reasonable time (but no more than one hundred eighty (180) days) after Licensee
becomes aware of the basis for such action (e.g., the actual or threatened
infringement) or fails to answer a declaratory judgment action within a
reasonable time (but no more than ninety (90) days) after Licensee receives or
becomes aware of such infringement or action, TXG shall have the right, after
notifying Licensee and the University in writing, to prosecute such
infringement or answer such declaratory judgment action, under its sole control
and at its sole expense. If TXG does proceed with such prosecution or defense,
Licensee shall provide reasonable assistance to TXG at TXG’s request, provided
TXG pays Licensee for its reasonable out-of-pockets costs incurred in such
assistance. Any recovery obtained in an action under this Section 5.5
shall be distributed as follows, in this order: (i) TXG shall be
reimbursed for any expenses incurred in the action; (ii) as to ordinary
damages, Licensee shall receive an amount equal to lost profits or a reasonable
royalty on the infringing sales (whichever measure the court applied), less a
reasonable approximation of the royalties that Licensee would have paid to TXG
if Licensee had received such amount as Net Sales of Licensed Products sold by
Licensee; and (iii) as to any additional damages, 100% to TXG, unless
Licensee joins TXG in the prosecution at its own expense at which point the
parties will share equally in any award. TXG’s rights under this Section 5.5
shall be subject to the rights of the University under the Brandeis License
(i.e. Section 7 thereof), provided that the University agrees to permit
TXG to assume control of and responsibility for such infringement action or
defense in accordance with this Section 5.5 provided TXG consults and
cooperates with the University in accordance with Section 7 of the
Brandeis License.



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5.6.          Cooperation.
TXG and Licensee agree to reasonably cooperate in connection with the
preparation, filing, prosecution, and maintenance of the Patent Rights. Cooperation
includes, without limitation, (a) promptly executing all papers and
instruments or requiring employees of the University or TXG to execute papers
and instruments as reasonably appropriate to enable Licensee to file,
prosecute, and maintain Patent Rights in any country; and (b) promptly informing
Licensee of matters that may affect preparation, filing, prosecution, or
maintenance of Patent Rights (such as becoming aware of an additional inventor
who is not listed as an inventor in a patent application). Additionally, in the
event either party exercises its rights hereunder to proceed with any
prosecution of infringement or defense of the Patent Rights, such party shall
consult with the other party regarding the course of such proceedings and shall
not enter into any settlement, consent judgment, or other voluntary final
disposition of any infringement action that admits the invalidity or
unenforceability of any Patent Rights or that would adversely affect the rights
of the other party without the prior written consent of the other party, which
consent may not be unreasonably withheld, conditioned or delayed.


ARTICLE 6 — INDEMNIFICATION; LIMITATION OF
LIABILITY


6.1           Indemnification by TXG. TXG
shall defend, indemnify and hold harmless Licensee, the University, and their
Affiliates, sublicensees, successors and assigns, and their respective
trustees, agents, directors, officers, shareholders, partners and employees
(each, an “Indemnified Party”), at TXG’s cost and expense, from and against any
and all losses, costs, liabilities, licensing fees, damages, fees and expenses,
including reasonable attorneys’ fees and expenses (“Losses”) incurred or
imposed upon any of the indemnified parties in connection with any claims
(including third party claims), suits, actions, demands or judgments (“Claims”):


(a) arising out of any breach by TXG of any representation or
warranty of TXG hereunder; or


(b) arising out of the negligence or willful misconduct of TXG.


6.2           Indemnification by Licensee. Licensee
shall defend, indemnify and hold harmless TXG, the University and their
Affiliates, successors and assigns, and their respective trustees, agents,
directors, officers, shareholders, partners and employees, at Licensee’s cost
and expense, from and against any and all losses, costs, liabilities, damages,
fees and expenses, including reasonable attorneys’ fees and expenses incurred
or imposed upon any of the indemnified parties in connection with any claims
(including third party claims), suits, actions, demands or judgments:


(a)           arising out of any breach by Licensee
of any representation or warranty of Licensee hereunder, or


(b)           arising out of the death or injury to
any person or persons or out of any damage to tangible property resulting from,
or otherwise attributable to, the making, using, development, and/or sale by
Licensee of any Licensed Products or Licensed Services under this Agreement.



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6.3           Indemnification Claims. Each
party shall give the other party prompt notice of any claim for which
indemnification under this Section 6 is or may be applicable and will cooperate
with the indemnifying party in the defense or settlement of such claim at the
indemnifying party’s expense. The indemnifying party shall be required to
provide and be entitled to control the defense of any claim covered hereunder
(including the right to control settlement discussions) with counsel reasonably
satisfactory to the other party, which other party may, at its own expense,
participate in the defense of any claim after the indemnifying party assumes
control of the defense thereof. No claim that is subject to indemnification
under this Article 6 shall be settled or otherwise compromised other than
by the party defending such claim, and then only with the prior written consent
of the other party, which shall not be unreasonably withheld or delayed; it
shall not be unreasonable to withhold consent if the settlement or compromise
either (a) imposes on the indemnified party any liability or obligation
which cannot be assumed and performed in full by the indemnifying party, or (b) materially
adversely affects the indemnified party or its rights hereunder. The failure of
the indemnified party to deliver notice to the indemnifying party promptly
after the commencement of any such action shall not release the indemnifying
party from any liability to the indemnified party under this Section 6
other than any liabilities directly attributable to such failure. Any amounts
for which TXG is liable under Section 6.1 may be offset by Licensee
against any payments required hereunder.


6.4           LIMITATION
OF LIABILITY. EXCEPT WITH RESPECT TO LIABILITY ARISING AS A RESULT OF A
THIRD PARTY CLAIM REFERRED TO IN AND COVERED BY SECTIONS 6.1 OR 6.2
(INDEMNIFICATION), IN NO EVENT SHALL EITHER PARTY (OR ITS DIRECTORS, OFFICERS,
EMPLOYEES, OR AGENTS) BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL,
EXEMPLARY, OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATED TO THIS
AGREEMENT, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES, REGARDLESS OF THE THEORY OF LIABILITY.


6.5           Insurance. Each party shall
obtain and maintain, at all times during the term of this Agreement, general
liability insurance with appropriate bodily injury, death and property damage
limits. Upon request, a party shall furnish a certificate of insurance signed
by an authorized representative of its insurance underwriter evidencing such
coverage and providing for at least thirty (30) days’ prior written notice of
any cancellation, termination or reduction of coverage.


6.6           Patent Interference Proceeding.
In the event that TXG or any of its Affiliates or the University enters into
any settlement agreements, consent orders or compromises arising out of any
patent interference or opposition proceedings pending before the U.S. Patent
and Trademark Office or similar authorities in the Territory or any court of
competent jurisdiction involving the Patent Rights, TXG and the University
shall ensure that Licensee and its Affiliates and sublicensees will obtain the
benefits of such settlements, orders or compromises. Any out-of-pocket expenses
incurred by Licensee in assisting with or participating in any such proceedings
at the request of TXG may be deducted from any amounts owed by Licensee to TXG
under this Agreement.



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ARTICLE 7 —
TERMINATION


7.1           Term. The term of this
Agreement shall commence on the Effective Date and shall remain in effect until
the expiration of the last Valid Claim under the Patent Rights unless sooner
terminated as provided herein.


7.2           Termination for Cause. If
either party materially breaches any material provision of this Agreement and
if such breach is not cured within ninety (90) days (the “Cure Period”) after
receiving written notice from the other party specifying such breach in
reasonable detail, the non-breaching party shall have the right to terminate
this Agreement by giving written notice thereof to the party in breach, which
termination shall go into effect immediately on receipt unless the allegedly
breaching party delivers a Resolution Notice (pursuant to Section 11.8;
provided that the Negotiation Period shall be reduced to ten (10) business
days) to the other party within five (5) days of such second notice (in
which event, such termination shall not be effective unless and until there has
been a final mutually agreed resolution by the parties to terminate or a final
decision of the arbitrator that the allegedly breaching party has materially
breached a material provision hereof and that the Agreement should be
terminated as a result thereof).


7.3           Termination for Convenience.
Licensee shall have the right to terminate this Agreement at any time without
cause on ninety (90) days’ prior notice to TXG.


7.4           Existing Stock. In the event
that this Agreement terminates or expires, Licensee and its sublicensees
hereunder shall retain limited rights to sell any Licensed Products existing or
under production (e.g., a cloned animal in utero or a cloned embryo) and to
perform Licensed Services related to such Licensed Products, subject to the
terms of this Agreement (including without limitation the obligation to pay
royalties under Article 3 to the extent not creditable or offsetable
against maintenance fees), but Licensee shall have no obligation to pay any
annual maintenance fees or portion thereof, except for any such payment due and
payable prior to the effective termination date.


7.5           Survival. Upon any termination
or expiration of this Agreement:  nothing
herein shall be construed to release either party from any obligation incurred
prior to the effective date of such termination (except as set forth below);
Articles/Sections 1, 6, 7, 8, 10, 11.7 through 11.13, and (only with respect to
any action already commenced as of the date of termination notice) the
provisions allocating recoveries in 5.4 and 5.5, shall survive and continue in
full force and effect; any sublicensee shall have the option to retain its
license rights in accordance with the terms of its sublicense granted by
Licensee prior to the effective termination date of this Agreement, provided
such sublicensee agrees to remit to TXG all amounts owing thereunder after the effective
termination date that are attributable to its sublicense of the Patent Rights. Upon
any termination or expiration of this Agreement, each party shall promptly
return to the other party, or destroy, all written Confidential Information of
the other party, and all copies, notes or extracts thereof (except to the
extent reasonably necessary to exercise the license in the following sentence,
if applicable). Upon the expiration, determination, disclaimer or admission of
invalidity or unenforceability of the last Valid Claim within the Licensed
Patents, the license to TXG Technology granted under Section 2.1 shall
become irrevocable, non-exclusive, fully



 16
 






 



 


paid up and royalty-free.
Upon any rejection of this Agreement by TXG in bankruptcy or termination of
this Agreement by Licensee pursuant to Section 7.2 or 7.7, Section 2.1(b) shall
survive and continue in full force and effect.


7.6           Termination for Change in Law.
Licensee may immediately terminate this Agreement on written notice to TXG in
the event that there are any changes in law that may have material adverse
effect on Licensee’s right to develop, make, have made, import, export, use,
sell or otherwise exploit or perform Licensed Products or Licensed Services.


7.7           Termination of Brandeis License.
Licensee may immediately terminate this Agreement effective on written notice
to TXG in the event that the Brandeis License terminates or expires for any
reason.


ARTICLE 8 — CONFIDENTIALITY AND NON-DISCLOSURE


8.1           Confidential
Information; Non-Disclosure. “Confidential Information” shall mean any
technical, business, financial, customer or other information disclosed by one
party (“Disclosing Party”) to the other party (“Receiving Party”) pursuant to
this Agreement which, if disclosed in written form, is marked “Confidential” or
“Proprietary” or by a similar legend or which, if disclosed orally or visually,
is identified as confidential information at the time of disclosure and
confirmed by written outline mailed to the other party within thirty (30) days
of the original disclosure. Licensee’s Confidential Information specifically
includes the terms of this Agreement and any sublicense agreements and all
information, data, reports and statements relating to Licensed Products and
Licensed Services. Except to the extent authorized by this Agreement or by
other prior written consent by the Disclosing Party, each party shall during
the term of this Agreement and for five (5) years after its termination: (i) not
use Confidential Information of the Disclosing Party except for the purposes of
fulfilling its obligations or exercising or enforcing its rights under this
Agreement, or as otherwise authorized herein or in writing by the Disclosing
Party, (ii) disclose the Confidential Information of the Disclosing Party
only to those of its employees, directors, and consultants who have need to
know or use such Confidential Information for the foregoing purposes or as
authorized by the Disclosing Party, provided that the Receiving Party will
ensure such disclosees are bound by obligations of confidentiality at least as
restrictive as those set forth in this Section 8.1. In addition, Licensee
may disclose Confidential Information of TXG to its Affiliates (and their
employees, directors and consultants) or permitted sublicensees or distributors
for the foregoing purposes or as authorized by TXG, provided such disclosees
are bound by obligations of confidentiality at least as restrictive as those
set forth in this Section 8.1. Each of the parties shall protect the
Confidential Information of the Disclosing Party using at least the same
procedures and degree of care that it uses to prevent the disclosure of its own
confidential information of like importance, but in no event less than
reasonable care. Except as expressly provided in this Agreement, no ownership
right is granted in any Confidential Information.


8.2           Exclusions. Notwithstanding Section 8.1,
Confidential Information excludes information that: (i) was publicly known
or available at the time it was disclosed or becomes publicly known or
available through no fault, action, or inaction of the Receiving Party; (ii) was



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known to the Receiving
Party at the time of disclosure; (iii) is disclosed with the prior
written approval of the Disclosing Party; (iv) was independently developed
by the Receiving Party without any use of the Confidential Information; or (v) is
provided to the recipient by an independent third party having no fiduciary
relationship with the Disclosing Party and having no obligation to keep the
information secret.


8.3           Permitted
Disclosures. Notwithstanding any other provision of this Agreement, each
party may disclose Confidential Information of the other party: (i) to the
extent and to the persons and entities required to comply with an applicable
governmental law, rule or regulation or court or administrative order;
provided, however, that the party required to disclose Confidential Information
shall first have given prompt notice to the other party hereto to enable it to
seek any available exemptions from or limitations on such disclosure
requirement and shall reasonably cooperate in such efforts by the other party;
or (ii) as necessary to file or prosecute patent applications, enforce
patents, prosecute or defend litigation, or otherwise establish or enforce rights
or obligations under this Agreement, but only to the extent that any such
disclosure is reasonably necessary.


8.4           Financial
Disclosure. The parties agree not to disclose the economic terms of this
Agreement to any third party other than their Affiliates without the prior
written consent of the other party hereto except (a) as required by
applicable securities laws or the requirements of any applicable stock
exchange, including, without limitation, requirements to file a copy of this
Agreement (redacted to the extent reasonably permitted by applicable law); (b) in
confidence, to legal counsel; (c) in confidence, to accountants, banks,
and financing sources and their advisors; and (d) to the extent necessary
to enforce this Agreement or any rights or obligations hereunder.


8.5           Injunctive Relief. TXG and
Licensee acknowledge and agree that any breach of the confidentiality
obligations imposed by this Section 8 may constitute immediate and
irreparable harm to the party disclosing the Confidential Information and/or
its successors and assigns, which cannot adequately and fully be compensated by
money damages and may warrant, in addition to all other rights and remedies
afforded by law, injunctive relief, specific performance, and/or other
equitable relief.


8.6           Survival. The obligations of
TXG and Licensee under this Article 8 shall survive for five (5) years
after the expiration or termination of this Agreement.


ARTICLE 9 - PAYMENTS, NOTICES, AND OTHER
COMMUNICATIONS


Any
payment, notice or other communication pursuant to this Agreement shall be in
writing and sent by certified first class mail, postage prepaid, return receipt
requested, or by nationally recognized overnight carrier addressed to the
parties at the following addresses or such other addresses as such party
furnishes to the other party in accordance with this paragraph. Such notices,
payments, or other communications shall be effective upon receipt.



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  In the case of Licensee:

  	
  Advanced Cell Technology, Inc.

  
	
   

  	
  1201 Harbor Bay Parkway, Suite 120

  
	
   

  	
  Alameda, CA 94502

  
	
   

  	
  Attention: Jonathan Atzen,

  
	
   

  	
                  
  Senior Vice President and General Counsel

  
	
   

  	
   

  
	
  With a copy to:

  	
  Pierce Atwood

  
	
   

  	
  One Monument Square

  
	
   

  	
  Portland, ME 04101

  
	
   

  	
  Attention: William L. Worden, Esq.

  
	
   

  	
   

  
	
  In the case of
  TXG:

  	
  TranXenoGen, Inc.

  
	
   

  	
  800 Boston Turnpike Road

  
	
   

  	
  Shrewsbury, MA 01545

  
	
   

  	
  Attention: Paul DiTullio, President

  
	
   

  	
   

  
	
  With a copy to:

  	
  Mintz, Levin, Cohen, Ferris, Glovsky, and Popeo PC

  
	
   

  	
  One Financial Center

  
	
   

  	
  Boston, MA 02111

  
	
   

  	
  Attention: Ingrid Beattie

  



 


ARTICLE 10 - REPRESENTATIONS AND WARRANTIES


10.1         Representations and Warranties by
TXG. TXG represents and warrants that:


(a)           TXG has the full
legal right and power to grant to Licensee the licenses granted herein;


(b)           the execution,
delivery and performance of this Agreement by TXG (i) are within its
corporate powers, (ii) have been duly authorized by all necessary
corporate action on TXG’s part, and (iii) have been approved by the TXG
Board of Directors;


(c)           the execution,
delivery and performance of this Agreement by TXG, including the grant of
rights and licenses herein, do not and will not contravene, conflict,
constitute or result in a default under or breach of, and are not and will not
be inconsistent with, any law or regulation, any judgment, decree or order, or
any term, condition or provision of any contract, agreement (including without
limitation the Brandeis License) or other undertaking applicable to TXG or the
Patent Rights or the TXG Technology and the intellectual property rights
thereto;


(d)           TXG has obtained all
necessary consents to grant to Licensee the rights and licenses granted herein;



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(e)           TXG has provided to
Licensee a copy of the Brandeis License in effect as of the Effective Date, and
TXG represents and warrants that said copy is a true and complete copy of the
Brandeis License (including without limitation any amendments, schedules,
exhibits, or addenda thereto) as of the Effective Date;


(f)            Neither TXG nor any
of its Affiliates is a party of any agreement with the University governing the
license of, or option to license, any intellectual property rights other than
the Brandeis License;


(g)           to the best
knowledge of TXG, the exercise of the rights and licenses granted to Licensee
under this Agreement, including the development, manufacture, use or sale of
the Licensed Products or Licensed Services, shall not infringe or
misappropriate the intellectual property or other rights (excluding patent
rights) of any third party;


(h)           To the best
knowledge of TXG, TXG’s rights and interests in the Patent Rights are free and
clear of all liens, encumbrances and security interests of every kind;


(i)            TXG has received no
written communication claiming (or threatening to claim), and to the best
knowledge of TXG there is no pending claim, that the practice of the inventions
described in the Patent Rights or any use of the TXG Technology infringes any
patents or patent applications or other rights of any third party, and, to the
knowledge of TXG, there is no basis for any such claim, and no other party has
any rights with respect to any inventions or discoveries described in the
Patent Rights or in the TXG Technology, other than TXG and the University;


(j)            the practice of the
inventions described in the Patent Rights does not infringe, violate or misappropriate,
and will not require any payment to TXG or any of its Affiliates (other than
the payments set forth in this Agreement and/or in the Brandeis License) with
respect to any other technology, intellectual property rights, or patents owned
or Controlled by TXG or any of its Affiliates as of the Effective Date, or
claims of patent applications that TXG or its Affiliates have made or
contemplate making (collectively, “Other Rights”). To the extent, if any, there
is a breach of the representations and warranties set forth in this Section 10.2(k),
and, as a result of such breach, Licensee or an Affiliate, in practicing an
invention described in the Patent Rights, infringes any Other Rights, Licensee
and its Affiliates (and the users and purchasers of products and services
infringing such Other Rights made or sold by Licensee and its Affiliates and
sublicensees) shall be immunized and indemnified by TXG from liability, suit or
other claims (by TXG, the University, and any of their licensees, successors
and assignees) under such Other Rights;


(k)           (i) the
Brandeis License is valid, binding and enforceable, and to the best knowledge
of TXG, neither TXG nor the University is in default in complying with any
provision thereof and no condition or event or facts exist which, with notice
or lapse of time or both, would constitute a default thereunder; (ii) TXG
will comply with all terms of the Brandeis License, and will be responsible for
making all payments due under the Brandeis License; (iii) TXG will notify
Licensee promptly if TXG receives any notice or written communication



 20
 






 



 


threatening or stating
that the University intends to terminate the Brandeis License or modify, assign
or amend such agreement in any way that adversely affects this Agreement or
Licensee’s rights hereunder; (iv) TXG will provide Licensee with copies of
all communications regarding any alleged or actual breach of the Brandeis
License; and


(l)            TXG has disclosed
to Licensee all inventions, disclosures, patent applications and patents owned
or Controlled by TXG, that are relevant to the Field of Use.


10.2         Representations and Warranties by
Licensee. Licensee represents and warrants that:


(a)           the execution, delivery and
performance of this Agreement by Licensee (i) are within its corporate
powers, and (ii) have been duly authorized by all necessary corporate
action on Licensee’s part; and


(b)           the execution, delivery and
performance of this Agreement by Licensee do not and will not contravene,
conflict, constitute or result in a default under or breach of, and are not and
will not be inconsistent with, any judgment, decree or order, or any term,
condition or provision of any contract, agreement or other undertaking
applicable to Licensee.


10.3         Disclaimer. EXCEPT AS OTHERWISE
SET FORTH IN SECTION 10 OF THIS AGREEMENT, NEITHER TXG NOR LICENSEE, NOR
THEIR DIRECTORS, OFFICERS, EMPLOYEES, AND AFFILIATES, MAKE ANY REPRESENTATIONS
OR EXTEND ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT
NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
AND VALIDITY OF THE PATENT RIGHTS CLAIMS, ISSUED OR PENDING.


ARTICLE 11 - MISCELLANEOUS PROVISIONS


11.1         Assignment. This Agreement, and
the rights and obligations hereunder, may not be assigned or transferred, in
whole or in part, voluntarily, by operation of law or otherwise, by either
party without the prior written approval of the other party; provided that, TXG
hereby provides such prior written approval in advance to any such assignment
or transfer by Licensee in the following circumstances:  (a) to an Affiliate of Licensee, (b) to
any entity established to serve as a holding company for cloning patent rights,
or (c) to any third party that acquires all or substantially all of the
assets of Licensee or its animal cloning business, or that is the surviving
person in a merger or consolidation with Licensee, provided that such assignee
agrees to accept and assume any and all obligations and liabilities of the
assignee arising thereafter under this Agreement. Any assignment or transfer in
violation of this Section 11.1 shall be null and void.



 21
 






 



 


11.2         Compliance with Law. Licensee
shall comply in all material respects with all local, state, federal and
international laws and regulations relating to the development, manufacture,
use, provision, and sale of Licensed Products and Licensed Services. Without
limiting the generality of the foregoing, Licensee agrees to comply with the
following:


(a)           Licensee shall obtain all necessary
approvals from the US Department of Agriculture (USDA) and any similar
governmental authorities of any foreign jurisdiction in the Territory in which
Licensee intends to make, use, or sell Licensed Products or to perform Licensed
Services.


(b)           Licensee shall comply in all material
respects with any and all material applicable local, state, federal and
international laws and regulations relating to the Licensed Products and
Licensed Services, and the Patent Rights, in the Territory, including without
limitation all material export or import regulations and rules now in
effect or as may be issued from time to time by any governmental authority
which has jurisdiction relating to the export of Licensed Products or Licensed
Services and any technology relating thereto.


(c)           To the extent that any invention
claimed in the Patent Rights has been partially funded by the United States
Government, and only to the extent required by applicable laws and regulations,
Licensee agrees that any Licensed Products used or sold in the United States
will be manufactured substantially in the United States or its territories,
unless a waiver is obtained in accordance with applicable law. Current law
provides that if domestic manufacture is not commercially feasible under the
circumstances, a waiver of this requirement may be sought from the relevant
federal agency; upon Licensee’s request, TXG and the University shall cooperate
in all respects with Licensee in seeking such a waiver and TXG shall use its
best efforts to obtain the University’s cooperation.


11.3         Encumbrances. TXG shall not
create or incur or cause to be incurred or to exist any lien, encumbrance,
pledge, charge, restriction or other security interest of any kind directly
upon the Patent Rights without the prior written consent of Licensee.


11.4         Publicity. Neither party shall
originate or issue any publicity, news release or other public announcement (“Announcements”),
written or oral, relating to this Agreement or the existence of an arrangement
between the parties, without the prior written approval of the other party,
which approval shall not be unreasonably withheld, except as otherwise required
by law. Any references to the University in such Announcements shall be subject
to section 10.6 of the Brandeis License. The foregoing and Section 8.1
notwithstanding, TXG and Licensee shall have the right to make such
Announcements without the consent of the other party in any prospectus,
offering memorandum, or other document or filing required by applicable
securities laws or other applicable law or regulation, provided that such party
shall have given the other party at least ten (10) days prior written
notice of the proposed text for the purpose of giving the other party the
opportunity to comment on such text.


11.5         No Implied Licenses. No implied
licenses are granted pursuant to the terms of



 22
 






 



this Agreement.


11.6         No Agency. Nothing herein shall
be deemed to constitute either party as the agent or representative of the
party, or both parties as joint venturers or partners for any purpose. Each
party shall be an independent contractor, not an employee or partner of the
other party, and the manner in which each party renders its services under this
Agreement shall be within its sole discretion. Neither party shall be
responsible for the acts or omissions of the other party, nor shall either
party have authority to speak for, represent or obligate the other party in any
way without prior written authority from the other party.


11.7         Choice of Law; Submission to
Jurisdiction. This Agreement shall be construed, governed, interpreted and applied
in accordance with the laws of the Commonwealth of Massachusetts, U.S.A.
without regard to principles of conflicts of law thereof, except that questions
affecting the construction and effect of any patent included in the Patent
Rights shall be determined by the law of the country in which the patent was
granted.


11.8         Dispute Resolution.


(a)           Informal Resolution. The
parties agree to follow the procedures set forth in this Section 11.8 to
resolve any dispute, controversy or claim arising out of or relating to this
Agreement or the breach, termination or invalidity thereof (each, a “Dispute”).
Prior to engaging in any formal dispute resolution with respect to any Dispute,
the president or CEO of each party, or their respective designees, shall, if
either party provides written notice to the other party requesting resolution
of such Dispute (“Resolution Notice”), attempt to resolve such Dispute through
good faith negotiations. If any Dispute cannot be settled by agreement of the
parties pursuant to the preceding sentence within sixty (60) days of receipt of
the Resolution Notice (“Negotiation Period”), then either party may, by written
notice to the other requesting resolution by arbitration (“Arbitration Notice”),
invoke the dispute resolution provisions of Section 11.8(b).


(b)           Arbitration. In the event that
the dispute resolution provisions of Section 11.8(a) do not result in
a mutually agreed resolution of the Dispute, then the parties agree to submit
to confidential arbitration, which shall be commenced as soon as practicable
following the receipt by one party of the other party’s Arbitration Notice. Any
arbitration proceeding relating to the Agreement shall be presided over by a
single independent arbitrator experienced in the biopharmaceutical industry and
having relevant and significant experience relating to the subject matter of
the dispute, who shall be agreed to by the parties, provided, that,
if the parties are unable to agree on an arbitrator, then each party shall name
one (1) such arbitrator (whose sole role shall be to select an
impartial arbitrator) and the two (2) arbitrators will together
designate an impartial, independent arbitrator experienced in the
biopharmaceutical industry to preside over the arbitration proceeding. Each of
the parties agrees to use its reasonable best efforts to cause the arbitrator
to be selected by the thirtieth (30th) day after the receipt of the
Arbitration Notice. The arbitration shall be held in the City of Boston,
Massachusetts in accordance with the rules of the American Arbitration
Association then in force (as modified herein), and shall be held on an
expedited basis and in confidence. The arbitrator shall not have the power to
award exemplary or punitive damages. Each party agrees that the final
determination/decision of the arbitrator presiding over the proceeding shall be
binding on it.



 23
 






 



 


Notwithstanding the
foregoing or anything in this Section 11.8, the parties may apply to any
court of competent jurisdiction for preliminary or interim equitable relief, including such
relief for compelling the commencement of the dispute resolution provisions in
accordance with Section 11.8, without breach of this arbitration
provision. The prevailing party in any dispute related hereto, whether in a
court of law or in arbitration, shall have its reasonable costs and expenses
related to such dispute reimbursed by the non-prevailing party; provided, however, that if the arbitrator rules in
favor of one party on some issues and the other party on other issues, the
arbitrator shall allocate such costs and expenses between the parties in a
manner that bears a reasonable relationship to the outcome of the arbitration. The
rulings of the arbitrator and the allocation of fees and expenses shall be
binding, non-reviewable, and non-appealable, except as permitted by law, and
may be entered as a final judgment in any court having jurisdiction.


11.9         Binding Effect. This Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and permitted assigns.


11.10       Entire Agreement. The parties
hereto acknowledge that this Agreement sets forth the entire Agreement and
understanding of the parties hereto as to the subject matter hereof.


11.11       Severability. The provisions of
this Agreement are severable, and in the event that any provisions of this
Agreement shall be determined to be invalid or unenforceable under any
controlling body of the law, such invalidity or unenforceability shall not in
any way affect the validity or enforceability of the remaining provisions
hereof.


11.12       Amendment and Waiver. This
Agreement may be amended, supplemented, or otherwise modified only by means of
a written instrument signed by both parties. The failure of either party to
assert a right hereunder or to insist upon compliance with any term or
condition of this Agreement shall not constitute a waiver of that right or
excuse a similar subsequent failure to perform any such term or condition by
the other party.


11.13       Effect of Bankruptcy Filing. The
parties agree and acknowledge that this Agreement is a contract under which TXG
is a licensor to Licensee of rights with respect to intellectual property
(including without limitation, “intellectual property” within the meaning of Section 101
of the Bankruptcy Code of the United States (“Bankruptcy Code”)). All rights,
licenses, immunities and other rights granted under or pursuant to or otherwise
described in this Agreement are, and shall be deemed to be, for purposes of Section 365(n) of
the Bankruptcy Code, licenses of rights to “intellectual property” within the
meaning of Section 101 of the Bankruptcy Code. The parties agree that
Licensee and its sublicensees, as licensees of such rights under this
Agreement, shall retain and may fully exercise all of their rights and elections
under the Bankruptcy Code. The parties further agree that, in the event of the
commencement of a bankruptcy proceeding by or against TXG including under the
Bankruptcy Code, Licensee shall be entitled to a complete duplicate of (or
complete access to, as appropriate) any such intellectual property and all
embodiments of such intellectual property, including without limitation copies
of invention disclosures and filings and communications relating to the Patent
Rights, and the same, if not already in Licensee’s possession, shall be
promptly delivered to Licensee upon any such commencement of a bankruptcy
proceeding upon written request by Licensee.



 24
 






 



 


11.14       Immunity. The rights and license
granted to Licensee pursuant to Section 2.1 shall inure to the benefit of,
and include an immunity from suit against, any direct or indirect distributor,
reseller, customer or other user of Licensed Products and Licensed Services
sold by or for Licensee, any Affiliate and/or any sublicense of Licensee under
this Agreement, whether such Licensed Products or Licensed Services (or results
thereof) are used, imported, sold, offered for sale, leased or otherwise
disposed of alone or in combination with other products or services, although
such immunity will not extend to any such combinations.


[Remainder
of page intentionally left blank.]



 25
 






 



 


IN
WITNESS WHEREOF, the parties have duly executed this Agreement the day and year
first set forth above.


	
  ADVANCED CELL TECHNOLOGY,
  INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   /s/ James G. Stewart

  	
   

  
	
  Name: James G.
  Stewart

  	
   

  
	
  Title: CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  TRANXENOGEN,
  INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   /s/ Paul A. DiTullis

  	
   

  
	
  Name: Paul A.
  DiTullis

  	
   

  
	
  Title: President
  and CEO

  	
   

  



 


CONSENT
AND AGREEMENT


For value
received, Brandeis University hereby (a) consents to the sublicense by
TranXenoGen to Advanced Cell, Inc. of the Brandeis Patent Rights under
this Agreement, and (b) agrees to be bound by the applicable provisions
hereof.


BRANDEIS UNIVERSITY


	
  By:

  	
   /s/ Larry R. Steranka

  	
   

  	
   

  
	
  Name: Larry R.
  Steranka

  	
   

  	
   

  
	
  Title: Executive
  Director, OTL

  	
   

  	
   

  



 



 26














 


EXHIBIT A


Patent
Rights


U.S.
Patents


5,480,772

5,651,992

5,773,217

6,245,567

6,753,457

6,878,546


U.S.
Patent Applications


10/798,061

10/969,646


Foreign Patent Applications


WO9418344

EP154931

EP0686202

CA2155309



 A-1














 


EXHIBIT B


SUBSCRIPTION
AGREEMENT


This
Subscription Agreement has been executed by the undersigned in connection with
the issuance to the undersigned’s of 163,339 shares of common stock of Advanced
Cell Technology, Inc., a Delaware corporation (the “Company”) (“Common
Stock”) pursuant to that certain Exclusive License Agreement dated March 29,
2006 by and between the Company and TranXenoGen, Inc. (the “License
Agreement”). The undersigned (sometimes herein referred to as the “Investor”)
hereby represents and warrants to, and agrees with, the Company as follows:


1.             Agreement
to Subscribe; Payment; Subscription Irrevocable.


The undersigned
hereby agrees, subject to and in accordance with the terms, provisions and
conditions set forth herein, to acquire an aggregate of
[         ] shares (the “Shares”)
of Common Stock pursuant to the terms and conditions of the License Agreement.


2.             Qualifications
of Investor.


(a)           The undersigned hereby represents and
warrants to the Company that the Investor is an “accredited investor” as
defined in Section 501 of Regulation D of the Securities Act of 1933.


(b)           The undersigned further hereby
represents and warrants to the Company that the Investor (1) has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of an investment in the Company; and (2) can
afford to bear the economic risk of this investment for an indefinite period of
time and has no need for liquidity in this investment.


(c)           The undersigned further hereby
represents and warrants to the Company that the Investor (1) is acquiring
the Shares for his or her own account, for investment, and not with a view to
resale or distribution; and (2) is aware that the right to transfer the
Shares is restricted by the Securities Act of 1933 and applicable state
securities laws, and that there is no market for the Shares.


(d)           The undersigned is an “accredited
investor” as such term is defined in Rule 501 of Regulation D on the basis
of the following facts (please
check at least one):


	
  

  	
  o

  	
  (i)   If the Undersigned is a natural person,
  his/her net worth (jointly with a spouse, if any), including homes, home
  furnishings and automobiles, exceeds $1,000,000 (valuing assets on the basis
  of their current fair market value).

  
	
   

  	
   

  	
   

  
	
   

  	
  o

  	
  (ii)   If the undersigned is a natural person,
  his/her individual income for each of

  



 



 B-1
 






 



 


	
  

  	
   

  	
  the years 2003 and 2004, and his/her anticipated
  individual income for 2005,
  exceeds $200,000

  
	
   

  	
   

  	
   

  
	
   

  	
  o

  	
  (iii)   If the undersigned is a natural person,
  his/her joint income with a spouse for each of the years 2003 and 2004, and
  the undersigned’s anticipated joint income with his/her spouse for 2005,
  exceeds $300,000.

  
	
   

  	
   

  	
   

  
	
   

  	
  o

  	
  (iv)   If the undersigned is a corporation, an
  organization described in Section 501(c)(3) of the Internal Revenue
  Code, a Massachusetts or similar business trust, a partnership or limited
  liability company, it was not formed for the specific purpose of acquiring
  the Shares offered and its total assets exceed $5,000,000.

  
	
   

  	
   

  	
   

  
	
   

  	
  o

  	
  (v)   If the Undersigned is an employee benefit
  plan, within the meaning of the Employee Retirement Income Security Act of
  1974 (“ERISA”), (i) its investment decisions are made by a bank, savings
  and loan association, insurance company or registered investment advisor
  acting as a plan fiduciary, as defined in Section 3(21) of ERISA,
  (ii) its total plan assets exceed $5,000,000, or (iii) if a self-directed
  plan, its investment decisions are made solely by persons that are
  “accredited investors” as described in this Paragraph 3(i).

  
	
   

  	
   

  	
   

  
	
   

  	
  o

  	
  (vi)   If the undersigned is a trust other than
  a trust described in Paragraph 3(i)(iv) above, it has total assets that
  exceed $5,000,000 and was not formed for the specific purpose of acquiring
  the Shares offered, and its purchase was directed by a sophisticated person
  as defined in the Regulations.

  
	
   

  	
   

  	
   

  
	
   

  	
  o

  	
  (vii)   If the undersigned is an entity, each
  equity owner is an “accredited investor” as described in this Paragraph 3(i).

  



 


In furtherance of
the foregoing (and not in limitation thereof), the undersigned has answered the
following questions regarding the undersigned’s net worth and net income and
acknowledges that the Company may rely on such responses.


3.             Access
to Information; Independent Investigation.


(a)           The undersigned, in making the
decision to purchase the Shares subscribed for, has relied upon independent
investigations made by it, and the undersigned has conducted its own due
diligence investigation and  been given
access and the opportunity review all information it deemed relevant to its
investment decision in connection with the commercial transaction of which this
investment is a part, as well as an opportunity to ask questions of, and to
receive answers from, the Company or any person acting on behalf of it
concerning the terms and conditions of this investment. The undersigned and the
undersigned’s advisors, if any, have been furnished with all materials relating
to the business, finances, operations and prospects of the Company and
materials relating to the offer and sale of the Shares that have been
requested. The undersigned and the undersigned’s advisors, if any, have
received complete and satisfactory answers to any such inquiries.


(b)           No Other Representations.
Except as otherwise specifically provided in this Agreement, no representations
have been made to the undersigned or such purchaser representative,



 B-2
 






 



 


if any, concerning the
Shares, the business or prospects of the Company or other matters.


(c)           Adequacy of Investigation. The
undersigned acknowledges that the undersigned is subscribing for the Shares
after what the undersigned deems to be adequate investigation of the business,
finances and prospects of the Company by the undersigned and the undersigned’s
advisors, if any.


(d)           No Governmental Recommendation or
Approval. The undersigned understands that no federal or state agency has
passed on or made any recommendation or endorsement of the Shares.


4.             Investment
Representations.


(a)           Shares Not Registered; Indefinite
Holding. The undersigned has been advised by the Company, and understands, that
the undersigned must bear the economic risk of an investment in the Shares for
an indefinite period of time because the Shares have not been registered under
the Securities Act of 1933, as amended (the “Securities Act”), and the Company
is under no obligation to register the Shares. Therefore, the Shares must be
held by the undersigned unless they are subsequently registered under the
Securities Act or an exemption from such registration is available for the
transfer of the Shares. The undersigned acknowledges that there is no market
presently available on which the Shares may be sold, and that no such market is
expected to develop.


(b)           No Disposition of Shares Without
Securities Law Compliance. The undersigned agrees not to subdivide the
Shares or to offer, sell, pledge, hypothecate or otherwise transfer or dispose
of any of the Shares in the absence of an effective registration statement
under the Securities Act covering such disposition, or an opinion of counsel,
satisfactory to the Company and its counsel, to the effect that registration
under the Securities Act is not required in respect of such transfer or
disposition.


(c)           “Private Offering” Exemption;
Reliance on Representations. The undersigned understands that the offer and
sale of the Shares are not being registered under the Securities Act in
reliance on (i) Securities and Exchange Commission Rule 506 of
Regulation D; and (ii) the “private offering” exemption provided by Section 4(2) of
the Securities Act of 1933 and/or Regulation D promulgated pursuant to the
Securities Act of 1933, and that the Company is basing its reliance on the
exemption in part on the representations, warranties, statements and agreements
contained herein and those of other investors contained in similar subscription
agreements.


The
undersigned further understands that other investors are making their
investment in reliance on the representations, warranties, statements and
agreements contained herein (as the undersigned is making this investment in
reliance on theirs) and the undersigned invites both the Company and other
investors so to rely.


5.             Indemnity.


The
undersigned shall indemnify and hold harmless the Company and any of its
directors, officers, employees, and representatives who is, has been, or
becomes a party or is threatened to be made a party to any threatened, pending,
or contemplated action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of or arising from any actual or
alleged



 B-3
 






 



 


misrepresentation or
misstatement of facts or omission to represent or state facts made by the
Investor to the Company, in connection with the sale of the Shares.


6.             Confidentiality.


The
undersigned acknowledges that the information provided by the Company to the
Investor is confidential and non-public and agrees that all such information
shall be kept in confidence and not disclosed to any third party for any
reason; provided, that this obligation shall not apply to any such information
that (i) is part of the public knowledge or literature and readily
accessible at the date hereof; (ii) becomes part of the public knowledge
or literature and readily accessible by the public (except as a result of a
breach of these provisions); or (iii) is received from third parties
(except third parties who disclose such information in violation of any
confidentiality agreements, including without limitation, any subscription
agreement they may have with the Company).


7.             Closing.


The
date of the closing of the sale of the Shares (the “Closing”) shall be the date
hereof.


8.             Governing
Law.


This
Agreement shall be governed by and interpreted in accordance with the laws of
the state of California, without giving effect to its conflicts of laws
principles.


[signature page to follow]



 B-4
 






 



 


IN
WITNESS WHEREOF, this Subscription Agreement was duly executed on the 29th day
of March, 2006.


WITNESS:


	
  

  	
  TRANXENOGEN, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Larry R.
  Steranka

  	
   

  	
  By:

  	
  /s/ Paul A. DiTullis

  	
   

  
	
  Larry R. Steranka

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  President and CEO

  	
   

  



 



 B-5
 






 



 


ACCEPTANCE


The
foregoing Subscription Agreement is hereby accepted to the extent of 163,339
shares of common stock of Advanced Cell Technology, Inc., a Delaware
corporation (the “Company”), this 29th day of March, 2006. The subscription
represented by this Agreement will not be deemed accepted by the Company until
and unless signed on its behalf by its duly authorized officer. Upon acceptance
of this subscription by the Company, the Company shall be deemed to have agreed
to perform all of its obligations herein set forth.


	
  

  	
  Advanced Cell
  Technology, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James G. Stewart

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Chief Financial Officer

  



 


 



 B-6