Exhibit 10.3


[Confidential treatment has been requested with
respect to the omitted portions of this exhibit. This copy omits information
subject to a confidentiality request filed with the Securities and Exchange
Commission. Omissions are designated with the characters [***]. A complete
version of this exhibit has been filed separately with the Securities and
Exchange Commission along with the request for confidential treatment.]


PURCHASE AGREEMENT



by and among



KIRIN SD, INC. 



and



ADVANCED CELL TECHNOLOGY, INC. 



As of May 9, 2006


 















 


Table of Contents


	
  

  	
   

  	
   

  	
   

  	
  Page

  	
   

  
	
  ARTICLE 1

  	
   

  	
  PURCHASE AND PAYMENT

  	
   

  	
  1

  	
   

  
	
  1.1

  	
   

  	
  Purchase

  	
   

  	
  1

  	
   

  
	
  1.2

  	
   

  	
  Purchase Price

  	
   

  	
  1

  	
   

  
	
  ARTICLE 2

  	
   

  	
  REPRESENTATIONS AND WARRANTIES OF ACT

  	
   

  	
  2

  	
   

  
	
  2.1

  	
   

  	
  Organization and Standing

  	
   

  	
  2

  	
   

  
	
  2.2

  	
   

  	
  Power and Authority

  	
   

  	
  2

  	
   

  
	
  2.3

  	
   

  	
  Conflicts; Consents and Approvals

  	
   

  	
  2

  	
   

  
	
  2.4

  	
   

  	
  Litigation

  	
   

  	
  3

  	
   

  
	
  2.5

  	
   

  	
  Brokers

  	
   

  	
  3

  	
   

  
	
  2.6

  	
   

  	
  Ownership

  	
   

  	
  3

  	
   

  
	
  ARTICLE 3

  	
   

  	
  REPRESENTATIONS AND WARRANTIES OF PURCHASER

  	
   

  	
  3

  	
   

  
	
  3.1

  	
   

  	
  Organization and Standing

  	
   

  	
  3

  	
   

  
	
  3.2

  	
   

  	
  Authority

  	
   

  	
  4

  	
   

  
	
  3.3

  	
   

  	
  Conflicts; Consents and Approvals

  	
   

  	
  4

  	
   

  
	
  3.4

  	
   

  	
  Litigation

  	
   

  	
  5

  	
   

  
	
  3.5

  	
   

  	
  Brokers

  	
   

  	
  5

  	
   

  
	
  ARTICLE 4

  	
   

  	
  CONDITIONS TO CLOSING

  	
   

  	
  5

  	
   

  
	
  4.1

  	
   

  	
  Mutual Conditions

  	
   

  	
  5

  	
   

  
	
  4.2

  	
   

  	
  Conditions to Purchaser’s Obligations

  	
   

  	
  5

  	
   

  
	
  4.3

  	
   

  	
  Conditions to ACT’s Obligations

  	
   

  	
  6

  	
   

  
	
  ARTICLE 5

  	
   

  	
  SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
  INDEMNIFICATION

  	
   

  	
  6

  	
   

  
	
  5.1

  	
   

  	
  Survival of Representations and Warranties

  	
   

  	
  6

  	
   

  
	
  5.2

  	
   

  	
  Indemnification by ACT

  	
   

  	
  7

  	
   

  
	
  5.3

  	
   

  	
  Indemnification by Purchaser

  	
   

  	
  7

  	
   

  
	
  5.4

  	
   

  	
  Definition of Damages

  	
   

  	
  7

  	
   

  
	
  5.5

  	
   

  	
  Procedures for Indemnification

  	
   

  	
  7

  	
   

  
	
  ARTICLE 6

  	
   

  	
  POST-CLOSING COVENANTS

  	
   

  	
  8

  	
   

  
	
  6.1

  	
   

  	
  [Reserved]

  	
   

  	
  8

  	
   

  
	
  ARTICLE 7

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  8

  	
   

  
	
  7.1

  	
   

  	
  Notices

  	
   

  	
  8

  	
   

  



 



 i
 






 



Table of Contents

(continued)


	
  

  	
   

  	
   

  	
   

  	
  Page

  	
   

  
	
  7.2

  	
   

  	
  Expenses

  	
   

  	
  9

  	
   

  
	
  7.3

  	
   

  	
  Governing Law

  	
   

  	
  9

  	
   

  
	
  7.4

  	
   

  	
  Dispute Resolution

  	
   

  	
  9

  	
   

  
	
  7.5

  	
   

  	
  Assignment; Successors and Assigns; No Third Party
  Rights

  	
   

  	
  11

  	
   

  
	
  7.6

  	
   

  	
  Counterparts

  	
   

  	
  11

  	
   

  
	
  7.7

  	
   

  	
  Titles and Headings

  	
   

  	
  11

  	
   

  
	
  7.8

  	
   

  	
  Entire Agreement

  	
   

  	
  11

  	
   

  
	
  7.9

  	
   

  	
  Amendment and Modification

  	
   

  	
  11

  	
   

  
	
  7.10

  	
   

  	
  Publicity; Public Announcements

  	
   

  	
  11

  	
   

  
	
  7.11

  	
   

  	
  Waiver

  	
   

  	
  12

  	
   

  
	
  7.12

  	
   

  	
  Severability

  	
   

  	
  12

  	
   

  
	
  7.13

  	
   

  	
  No Strict Construction

  	
   

  	
  12

  	
   

  
	
  7.14

  	
   

  	
  Specific Performance

  	
   

  	
  12

  	
   

  
	
  7.15

  	
   

  	
  Further
  Assurances

  	
   

  	
  12

  	
   

  



 



 ii















PURCHASE AGREEMENT


This PURCHASE AGREEMENT, dated as of May 9, 2006
(together with the exhibits attached hereto, this “Agreement”),
is entered into by and between Kirin SD, Inc., a Delaware corporation (the
“Purchaser”), and  Advanced Cell Technology, Inc., a
Delaware corporation (“ACT”). Certain
capitalized terms used in this Agreement are defined on Exhibit A
attached hereto.


RECITALS


WHEREAS, on July 18, 2005, the Purchaser
purchased all of the issued and outstanding limited liability company interests
or units of Aurox, LLC, a Delaware limited liability company (“Aurox”), and substantially all of the limited liability
company interests or units of Hematech, LLC, a Delaware limited liability
company (“Hematech”); and


WHEREAS, ACT owns the remaining limited liability
company interests or units of Hematech (the “ACT
Interests”); and


WHEREAS, the Purchaser wishes to purchase, and ACT
wishes to sell, the ACT Interests in accordance with the terms and subject to
the conditions of this Agreement; and


WHEREAS, Kirin Beer Kabushiki Kaisha (“Kirin”) and ACT desire to enter into that
certain Exclusive License Agreement and certain Non-Exclusive License Agreement
substantially in the forms attached hereto as Exhibit D and Exhibit E
(the “License Agreements”) concurrent with
and as a condition to the closing of the transactions contemplated by this
Agreement.


NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants, agreements, representations and warranties contained in
this Agreement, the parties agree as follows:


ARTICLE 1


PURCHASE AND
PAYMENT


1.1           Purchase. Upon the terms and
subject to the conditions of this Agreement, ACT hereby sells, conveys,
assigns, transfers and delivers to the Purchaser, and the Purchaser hereby
purchases, acquires and accepts from ACT, all of ACT’s right, title and
interest in and to the ACT Interests free and clear of all Encumbrances.


1.2           Purchase Price. In
consideration for the purchase by the Purchaser of the ACT Interests, the
Purchaser hereby pays to ACT [***] U.S. Dollars ($[***]) (the “Purchase Price”) by wire transfer to the account designated
by ACT.









 



ARTICLE
2


REPRESENTATIONS
AND WARRANTIES OF ACT


ACT hereby represents and warrants to the Purchaser as
of the date hereof (or, if made as of a specified date, as of such specified
dated) as follows:


2.1           Organization and Standing. ACT
is a corporation, duly organized, validly existing and in good standing under
the Laws of the state or jurisdiction of its organization and has all requisite
power and authority (corporate, partnership or otherwise) to own, lease, use
and operate its properties and to conduct its business.


2.2           Power and Authority.


(a)           ACT has all requisite power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. ACT has all power and authority to execute
and deliver the other agreements, documents and instruments to be executed and
delivered by it in connection with this Agreement and to consummate the transactions
contemplated thereby.


(b)           The execution, delivery and
performance of this Agreement by ACT and the consummation by ACT of the
transactions to be consummated by ACT hereby, and the execution, delivery and
performance of the other agreements, documents and instruments to be executed
and delivered in connection with this Agreement by ACT and the consummation of
the transactions contemplated thereby, have been duly authorized by all
necessary action or proceeding on the part of ACT.


(c)           This Agreement and the other
agreements, documents and instruments executed and delivered in connection with
this Agreement, have been duly executed and delivered by ACT and constitute the
legal, valid and binding obligation of ACT enforceable against ACT in
accordance with their respective terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar Laws now or
hereafter in effect relating to or affecting creditors’ rights generally,
including the effect of statutory and other Laws regarding fraudulent
conveyances and preferential transfers and subject to the limitations imposed
by general equitable principles (regardless of whether such enforceability is
considered in a proceeding at law or in equity).


2.3           Conflicts; Consents and Approvals.
Neither the execution and delivery by ACT of this Agreement and the other
agreements, documents and instruments to be executed and delivered by ACT in
connection with this Agreement nor the consummation of the transactions
contemplated hereby or thereby, does:


(a)           conflict with, or result in a breach
of any provision of, the organizational documents of ACT, if applicable;


(b)           violate, or conflict with, or result
in a breach of any provision of, or constitute a default (or an event that,
with the giving of notice, the passage of time or otherwise, would constitute a
default) under, or entitle any Person (with the giving of notice, the passage
of 



 2
 






 



time or otherwise) to terminate, accelerate, modify or
call a default under, or give rise to any obligation to make a payment under,
or to any increased, additional or guaranteed rights of any Person under, or
result in the creation of any Encumbrance upon any of the properties or assets
of ACT under any of the terms, conditions or provisions of (i) any
material Contract to which ACT is a party or to which any of their properties
or assets are bound or (ii) any permit, registration, approval, license or
other authorization or filing to which ACT is subject or to which any of its
properties or assets is subject, that would, individually or in the aggregate,
be reasonably likely to prevent or materially impede or delay the consummation
by ACT, of the transactions contemplated by this Agreement;


(c)           require any action, consent or
approval of any non-governmental third party other than any such action,
consent or approval the failure to obtain which would not, individually or in
the aggregate, be reasonably likely to prevent or materially impede or delay
the consummation by ACT of the transactions contemplated by this Agreement;


(d)           violate any material order, writ, or
injunction, decree or Law applicable to ACT; or


(e)           require any material action, consent
or approval of, or review by, or registration or filing by ACT with, any
Governmental Authority.


2.4           Litigation. There is no Action
pending or threatened in writing, or, to ACT’s knowledge, otherwise threatened,
against ACT that seeks, or would be reasonably likely, to prohibit or
materially restrain the ability of ACT to enter into this Agreement or prevent
or materially impede or delay the consummation by ACT of any of the
transactions contemplated hereby.


2.5           Brokers. No Person has acted
directly or indirectly as a broker, finder or financial advisor for ACT in
connection with the negotiations relating to or the transactions contemplated
by this Agreement, and no Person is entitled to any fee or commission or like
payment in respect thereof based in any way on any agreement, arrangement or
understanding made by or on behalf of ACT.


2.6           Ownership. ACT is the lawful
owner beneficially and of record of the ACT Interests, free and clear of all
Encumbrances. As of the date hereof, Purchaser shall acquire good and
marketable title to the ACT Interests, free and clear of all Encumbrances.


ARTICLE 3


REPRESENTATIONS
AND WARRANTIES OF PURCHASER


Purchaser hereby represents and warrants to ACT, as of
the date hereof (or, if made as of a specified date, as of such specified
date), as follows:


3.1           Organization and Standing. The
Purchaser is a corporation duly organized, validly existing and in good
standing under the Laws of the jurisdiction of its organization.



 3
 






 



3.2           Authority.


(a)           The Purchaser has all requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. Purchaser has all requisite
corporate power and authority to execute and deliver the other agreements,
documents and instruments to be executed and delivered by it in connection with
this Agreement and to consummate the transactions contemplated thereby.


(b)           The execution, delivery and
performance of this Agreement by the Purchaser and the consummation by the
Purchaser of the transactions contemplated to be consummated by the Purchaser
hereby, and the execution, delivery and performance of the other agreements,
documents and instruments to be executed and delivered in connection with this
Agreement by the Purchaser and the consummation of the transactions
contemplated thereby, have been duly authorized by all necessary action or
proceeding on the part of the Purchaser.


(c)           This Agreement and the other
agreements, documents and instruments executed and delivered in connection with
this Agreement have been duly executed and delivered by the Purchaser and
constitute the legal, valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its respective terms,
except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar Laws now or hereafter in effect relating to or
affecting creditors’ rights generally, including the effect of statutory and
other Laws regarding fraudulent conveyances and preferential transfers and
subject to the limitations imposed by general equitable principles (regardless
of whether such enforceability is considered in a proceeding at law or in
equity).


3.3           Conflicts; Consents and Approvals.
Neither the execution and delivery by the Purchaser of this Agreement and the
other agreements, documents and instruments to be executed and delivered by either
of them in connection with this Agreement, nor the consummation of the
transactions contemplated hereby or thereby, does:


(a)           conflict with, or result in a breach
of any provision of, the organizational documents of the Purchaser;


(b)           violate, or conflict with, or result
in a breach of any provision of, or constitute a default (or an event that,
with the giving of notice, the passage of time or otherwise, would constitute a
default) under, or entitle any Person (with the giving of notice, the passage of
time or otherwise) to terminate, accelerate, modify or call a default under, or
give rise to any obligation to make a payment under, or to any increased,
additional or guaranteed rights of any Person under, or result in the creation
of any Encumbrance upon any of the properties or assets of the Purchaser under
any of the terms, conditions or provisions of (i) any Contract to which
the Purchaser is a party or to which any of its properties or assets are bound
or (ii) any permit, registration, approval, license or other authorization
or filing to which the Purchaser is subject or to which any of its properties
or assets is subject, that would, individually or in the aggregate, be
reasonably likely to prevent or materially impede or delay the consummation by the
Purchaser, of the transactions contemplated by this Agreement;



 4
 






 



(c)           require any action, consent or
approval of any non-governmental third party other than any such action,
consent or approval the failure to obtain which would not, individually or in
the aggregate, be reasonably likely to prevent or materially impede or delay
the consummation by the Purchaser of the transactions contemplated by this
Agreement;


(d)           violate any material order, writ, or
injunction, decree or Law applicable to the Purchaser; or


(e)           require any material action, consent
or approval of, or review by, or registration or filing by the Purchaser with,
any Governmental Authority, except possible actions in connection with U.S.
export control laws.


3.4           Litigation. There is no Action
pending or threatened in writing, or, to Purchaser’s knowledge, otherwise
threatened, against the Purchaser that seeks, or would be reasonably likely, to
prohibit or materially restrain the ability of the Purchaser to enter into this
Agreement or prevent or materially impede or delay the consummation by the
Purchaser of any of the transactions contemplated hereby.


3.5           Brokers. No Person has acted
directly or indirectly as a broker, finder or financial advisor for the
Purchaser in connection with the negotiations relating to or the transactions
contemplated by this Agreement, and no Person is entitled to any fee or
commission or like payment in respect thereof based in any way on any
agreement, arrangement or understanding made by or on behalf of the Purchaser.


ARTICLE 4


CONDITIONS TO
CLOSING


4.1           Mutual Conditions. The
respective obligations of each party hereto to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment or, if
legally permitted, waiver by all parties hereto at or prior to the execution of
this Agreement of the following conditions:


(a)           There shall not be in effect any
Order issued by any Governmental Authority preventing the consummation of the
transactions contemplated herein, seeking any material damages as a result of
the transactions contemplated herein, or otherwise materially affecting the
right or ability of the Purchaser to own the ACT Interests, nor shall any
Action be pending that seeks any of the foregoing.


(b)           There shall not be any Law prohibiting
ACT from selling the ACT Interests or the Purchaser from owning the ACT
Interests or that makes this Agreement or the consummation of the transactions
contemplated herein illegal.


4.2           Conditions to Purchaser’s
Obligations. The obligations of the Purchaser to consummate the
transactions contemplated by this Agreement shall be subject to the fulfillment
or waiver by the Purchaser prior to or at the Closing of each of the following
conditions:



 5
 






 



(a)           ACT shall have executed and delivered
to the Purchaser an Instrument of Transfer and Receipt.


(b)           ACT shall have executed and delivered
to the Purchaser a covenant not to sue substantially in the form of Exhibit B
attached hereto.


(c)           ACT shall have executed and delivered
to the Purchaser a release, substantially in the form of Exhibit C
attached hereto.


(d)           ACT shall have executed and delivered
to Kirin the Exclusive License Agreement and Non-Exclusive License Agreement
substantially in the form of Exhibit D and Exhibit E
attached hereto.


(e)           ACT shall have delivered to the
Purchaser certified copies of the resolutions, duly adopted by the Board of
Directors of ACT, which shall be in full force and effect on the date hereof,
authorizing the execution and delivery and performance by ACT of this Agreement
and the consummation of the transactions contemplated hereby.


(f)            No Action shall have been commenced
or threatened against the Purchaser or against any Representative (as
hereinafter defined) of Purchaser (i) involving any challenge to, or
seeking Damages (as hereinafter defined) or other relief in connection with,
the transactions contemplated herein; or (ii) that may have the effect of
preventing, delaying, making illegal, imposing limitations or conditions on or
otherwise interfering with the transactions contemplated herein.


4.3           Conditions to ACT’s Obligations.
The obligations of ACT to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment or waiver by ACT at or prior to
the Closing of each of the following conditions:


(a)           Kirin shall have executed and
delivered to ACT the Exclusive License Agreement and Non-Exclusive License
Agreement substantially in the form of Exhibit D and Exhibit E
attached hereto.


(b)           No Action shall have been commenced
or threatened against ACT (i) involving any challenge to, or seeking
Damages or other relief in connection with, the transactions contemplated
herein; or (ii) that may have the effect of preventing, delaying, making
illegal, imposing limitations or conditions on or otherwise interfering with
the transactions contemplated herein.


(c)           Purchaser shall deliver or cause to
be delivered to ACT the Purchase Price.



 6
 






 



ARTICLE
5


SURVIVAL
OF REPRESENTATIONS AND 

WARRANTIES; INDEMNIFICATION


5.1           Survival of Representations and
Warranties. All of the representations and warranties provided for in this
Agreement shall survive the closing of the transactions contemplated herein
until December 31, 2006; provided that the representations and warranties
set forth in Sections 2.1, 2.2, 2.6, 3.1 and 3.2 shall survive indefinitely;
provided further that any representations and warranties shall survive with
respect to, and to the extent of, any claim for indemnification in accordance
with this Article V prior to the applicable termination date until final
resolution of such claim. The representations and warranties contained in this
Agreement (and any right to indemnification for breach thereof) shall not be
affected by any investigation, verification or examination by any party hereto
or by any Representative (as defined below) of any such party or by any such
party’s knowledge of any facts with respect to the accuracy of any such
representation or warranty.


5.2           Indemnification by ACT. ACT,
jointly and severally, shall indemnify, defend and hold harmless the Purchaser
and its Affiliates, and their respective officers, directors, employees, agents
and representatives, and each of their heirs, executors, successors and assigns
(collectively, the “Representatives”),
against and in respect of any and all Damages to the extent arising out of or
resulting from any breach of a representation or warranty made by ACT in this
Agreement.


5.3           Indemnification by Purchaser. Purchaser
shall indemnify, defend and hold harmless ACT and its Representatives, against
and in respect of any and all Damages to the extent arising out of or resulting
from any breach of a representation or warranty made by the Purchaser in this
Agreement.


5.4           Definition of Damages. “Damages” shall mean and include, collectively, any and all
damages, injuries, claims, demands, settlements, judgments, awards, fines,
penalties, Taxes, losses, Liabilities, together with all out-of-pocket costs
and expenses, including reasonable fees and disbursements of counsel,
accountants, consultants or experts and expenses of investigation incurred by a
party entitled to indemnification hereunder as a result of a matter giving rise
to a claim for indemnification hereunder.


5.5           Procedures for Indemnification.


(a)           A party entitled to be indemnified
pursuant to Section 5.2 or 5.3 (the “Indemnified Party”)
shall promptly notify the party liable for such indemnification (the “Indemnifying Party”) in writing, of any claim or demand with
reasonable specificity, under which the Indemnified Party has determined has
given or is reasonably likely to give rise to a right of indemnification under
this Agreement within 45 days of such determination; provided, however,
that a failure to provide such notice shall not relieve any Indemnifying Party
of its obligations hereunder except to the extent that it has been materially
prejudiced by such failure.



 7
 






 



(b)           If the Indemnified Party shall notify
the Indemnifying Party of any claim or demand pursuant to Section 5.5(a),
and if such claim or demand relates to a claim or demand asserted by a third
party against the Indemnified Party that the Indemnifying Party acknowledges is
a claim or demand for which it must indemnify or hold harmless the Indemnified
Party under Section 5.2 or 5.3, the Indemnifying Party shall have the
right to employ counsel of its choice to defend any such claim or demand
asserted against the Indemnified Party. The Indemnified Party shall have the
right to participate in the defense of any such claim or demand at its own
expense. The Indemnifying Party shall notify the Indemnified Party in writing,
as promptly as possible (but in any case before the due date for the answer or
response to a claim) after the date of the notice of claim given by the
Indemnified Party to the Indemnifying Party under Section 5.5(a), of its
election to defend in good faith any such third party claim or demand. So long
as the Indemnifying Party is defending in good faith any such claim or demand
asserted by a third party against the Indemnified Party, the Indemnified Party
shall not settle or compromise such claim or demand. The Indemnified Party
shall make available to the Indemnifying Party or its agents, at the
Indemnifying Party’s cost, all records and other material in the Indemnified
Party’s possession reasonably required by it for its use in contesting any
third party claim or demand. Neither the Indemnifying Party nor the Indemnified
Party shall settle or compromise any such claim or demand unless the
Indemnifying Party or the Indemnified Party, as the case may be, is given a
full and complete release of any and all liability by all relevant parties
relating thereto. If notice is given to an Indemnifying Party of the
commencement of any action and it does not, within 15 days after the
Indemnified Party’s notice is given, give notice to the Indemnified Party of
its election to assume the defense thereof, the Indemnifying Party shall be
bound by any determination made in such action or any compromise or settlement
thereof effected by the Indemnified Party. Notwithstanding the foregoing, if an
Indemnified Party determines in good faith that there is a reasonable
probability that an action may adversely affect it or its Affiliates other than
a result of monetary damages, such Indemnified Party may, by notice to the
Indemnifying Party, assume the exclusive right to defend, compromise or settle
such action, but the Indemnifying Party shall not be bound any determination of
an action so defended or any compromise or settlement thereof effected without
its consent (which shall not be unreasonably withheld, conditioned or delayed).


ARTICLE 6


POST-CLOSING
COVENANTS


6.1           [Reserved]


ARTICLE 7


MISCELLANEOUS


7.1           Notices. All notices or other
communications required or permitted hereunder shall be in writing and shall be
delivered personally, by facsimile or electronic mail (with confirming copy
sent by one of the other delivery methods specified herein) or by overnight
courier or sent by certified, registered or express air mail, postage prepaid,
and shall be deemed given when so delivered personally, or when so received by
facsimile or electronic mail or courier, or, if mailed, five calendar days
after the date of mailing, as follows:



 8
 






 



If to ACT:


Advanced Cell Technology, Inc.

11100 Santa Monica Blvd.

Suite 850

Los Angeles, CA  90025

Facsimile:  310.481.0833

Attention:        Jon Atzen, Senior Vice
President and General Counsel

                           jatzen@advancedcell.com


If to Purchaser:


Kirin SD, Inc.

Hamlet Professional Building

4001 Valhalla Boulevard

Suite 103

Sioux Falls, SD  57106

Facsimile: 605.361.9702

Attention:        Dr. Toshifumi
Mikayama
                           Chief Executive
Officer


and with a copy to:


Morrison &
Foerster LLP

1290 Avenue of the Americas

New York, NY  10104

Facsimile:         (212) 468-7900

Attention:        Rory J. Radding, Esq.

                           rradding@mofo.com


or to such
other address and with such other copies as any party hereto shall notify the
other parties hereto (as provided above) from time to time.


7.2           Expenses. Regardless of
whether the transactions provided for in this Agreement are consummated, ACT on
the one hand and the Purchaser on the other hereto shall pay its own expenses
incident to this Agreement and the transactions contemplated hereby and thereby
(including legal fees, accounting fees, investment banking fees and filing
fees).


7.3           Governing Law. This Agreement
shall be governed by, and construed in accordance with, the internal Laws of
the State of New York, without reference to the choice of law principles
thereof.


7.4           Dispute Resolution.


(a)           The parties hereto intend that all
disputes between the parties, directly or indirectly, arising out of, under or in
connection with or relating to, this Agreement or the consummation of the
transactions contemplated hereby shall be settled by the parties amicably
through good faith discussions upon the written request of any party.



 9
 






 



(b)           Prior to filing suit, instituting an
action or seeking arbitration pursuant to Section 7.4(d) in
connection with any dispute between the Purchaser on the one hand and ACT on
the other (each, for purposes of this Section 7.4, a “Dispute
Party” and, collectively, the “Dispute Parties”)
or any of their respective Affiliates or Subsidiaries, directly or indirectly,
arising out of, under or in connection with or relating to, this Agreement or
any of the transactions contemplated hereby, the Dispute Parties will attempt
to resolve such dispute by good faith negotiations. Such negotiations shall
proceed as follows:


(i)            Either Dispute Party may send a
written notice to the other Dispute Party requesting such negotiations. Promptly
following receipt of such notice by the other Dispute Party, each Dispute Party
shall cause the individual designated by it as having general responsibility
for the affected Agreement or transaction to meet with the individual so
designated by the other Dispute Party to discuss the dispute.


(ii)           If the dispute is not resolved within
30 days after the first meeting between the individuals designated in clause (i) (or
if earlier, within 45 days of the notice referred to in clause (i) above),
then, upon the written request of either Dispute Party, each Dispute Party
shall cause the individual designated by it as having general responsibility
for the overall relationship defined by this Agreement to meet with the
individual so designated by the other Dispute Party to discuss the dispute.


(iii)          If the dispute is not resolved within
15 days after the first meeting between the individuals designated in clause (ii) (or
if earlier within 30 days of the notice referred to in clause (ii) above),
then, upon the written request of either Dispute Party, Dr. Michael West
or William Caldwell, IV on behalf of ACT, on the one hand, and Dr. Toshifumi
Mikayama on behalf of the Purchaser, on the other hand, shall meet and attempt
in good faith to negotiate a resolution to the dispute.


Except and
only to the limited extent provided in Section 7.4(c), neither Dispute
Party shall, and shall cause their respective Affiliates not to, file suit,
institute an action or seek arbitration pursuant to Section 7.4(d) with
respect to the dispute until at least 30 days after the first meeting between
the corporate officers described in clause (iii) above (or, if earlier, 45
days after the notice referred to in such clause (iii)).


(c)           Notwithstanding the provisions of Section 7.4(b),
either Dispute Party may institute an action seeking a preliminary injunction,
temporary restraining order, or other equitable relief, if necessary in the
reasonable opinion of that Dispute Party to avoid material harm to its
property, rights or other interests, before commencing, or at any time during
the course of, the dispute procedure described in Section 7.4(b). In
addition, either Dispute Party may file an action prior to the commencement of
or at any time during or after the dispute resolution procedures in Section 7.4(b) if
in the sole opinion of that Dispute Party it is necessary to prevent the
expiration of a statute of limitations or filing period or the loss of any
other substantive or procedural right.


(d)           In the event of any dispute,
controversy, or claim arising out of or relating to any provision of this
Agreement or the interpretation, enforceability, performance, breach,
termination, or validity hereof (including, without limitation, this Section 7.4)
which cannot be 



 10
 






 



resolved pursuant to Sections 7.4(a) and (b),
such matter shall be solely and finally settled pursuant to arbitration
conducted in accordance with the Rules of
Arbitration of the International Chamber of Commerce (the “Rules”). Such arbitration shall be
conducted by three arbitrators to be appointed in accordance with the then
existing Rules as modified by this Section 7.4. Of the three
arbitrators, ACT shall nominate one arbitrator, the Purchaser shall nominate
one arbitrator, and the third arbitrator, who will act as chairman, will be
nominated by the other two appointed arbitrators or, failing agreement between
them within 30 days of their appointment, by the International Court of
Arbitration of the International Chamber of Commerce, pursuant to the Rules. If
the chairman nominated by the other two appointed arbitrators does not agree to
act, or is unable to act, as chairman, the chairman shall be appointed pursuant
to the Rules. The place of arbitration shall be in New York, New York, U.S.A.,
and the arbitration shall be conducted in English. The arbitration panel shall
decide the dispute applying the substantive laws of the State of New York. Judgment
of the arbitration panel shall be final and binding and may be entered in, and
shall be fully enforceable by, a court of competent jurisdiction. The parties
hereby agree that the state and federal courts located in New York, New York
are courts of competent jurisdiction and the parties hereby submit to the
jurisdiction of such courts waiving any objection each may now have or
hereafter have to jurisdiction, venue or convenience of forum. The parties
agree that any party may file a copy of this provision with any court as
written evidence of the parties’ voluntary agreement to waive any objections to
jurisdiction.


7.5           Assignment; Successors and
Assigns; No Third Party Rights. This Agreement may not be assigned by any
party hereto or thereto without the prior written consent of the other parties
hereto or thereto, and any attempted assignment shall be null and void;
provided, however, this Agreement may be assigned or transferred by the
Purchaser upon notice but without the prior written consent of the other
parties hereto to an Affiliate of the Purchaser and nothing in this Agreement
shall prevent the consolidation, merger or sale of the Purchaser to an
Affiliate of the Purchaser. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns. Except as provided in Sections 5.2 and 5.3, this Agreement shall be
for the sole benefit of the parties hereto, and their respective successors and
permitted assigns and is not intended, nor shall be construed, to give any
Person, other than the parties hereto and their respective successors and
permitted assigns any legal or equitable right, benefit, remedy or claim
hereunder.


7.6           Counterparts. This Agreement
may be executed in counterparts, each of which shall be deemed an original
agreement, but all of which together shall constitute one and the same
instrument.


7.7           Titles and Headings. The
headings and table of contents in this Agreement are for reference purposes
only, and shall not in any way affect the meaning or interpretation of this
Agreement.


7.8           Entire Agreement. This
Agreement constitutes the entire agreement among the parties hereto with
respect to the matters covered hereby and thereby, and supersede all previous
written, oral or implied understandings among them with respect to such
matters.


7.9           Amendment and Modification. This
Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.



 11














 


7.10         Publicity; Public Announcements.
Unless otherwise required by applicable Laws or the requirements of any
national securities exchange (and, in that event, only if time does not
permit), ACT and the Purchaser shall consult with each other before issuing,
and give each other a reasonable opportunity to review and comment upon, any
press release with respect to the transactions contemplated hereby and shall
not issue any such press release without each other’s consent, which consent
shall not be unreasonably withheld or delayed. The parties agree that the
initial press release to be issued with respect to this Agreement and the
transactions contemplated by this Agreement shall be in the form heretofore
agreed to by the parties. The parties agree that this Agreement and the other
agreements related to this Agreement may be disclosed pursuant to all
applicable Laws including, without limitation, state and federal securities
laws and regulations.


7.11         Waiver. Any of the terms or
conditions of this Agreement may be waived at any time by the party or parties
hereto entitled to the benefit thereof, but only by a writing signed by the
party or parties waiving such terms or conditions.


7.12         Severability. If any term,
provisions, covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination, the parties shall negotiate in
good faith to modify this Agreement so as to affect the original intent of the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the fullest extent possible.


7.13         No Strict Construction. Each of
the parties hereto acknowledges that this Agreement has been prepared jointly
by the parties hereto and shall not be strictly construed against any party
hereto.


7.14         Specific Performance. The
parties agree that if any of the provisions of this Agreement were not
performed in accordance with its specific terms or were otherwise breached,
irreparable damage would occur, no adequate remedy at law would exist and
damages would be difficult to determine; accordingly, the parties shall be entitled
to specific performance of the terms hereof or injunctive relief, in addition
to any other remedy at law or in equity.


7.15         Further Assurances. Each party
agrees to (a) furnish upon request to each other party such further
information, (b) to execute and deliver to each other party such other
documents and (c) to do such other acts and things, all as another party
may reasonably request for the purpose of carrying out the intent of this
Agreement and the transactions contemplated herein.


[signature
pages follow]



 12
 






 



IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.


	
   

  	
   

  	
   

  
	
  

  	
   

  	
  KIRIN SD, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ TOSHIFUMI
  MIKAYAMA

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Toshifumi Mikayama

  
	
   

  	
   

  	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ADVANCED CELL TECHNOLOGY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ William Caldwell, IV

  
	
   

  	
   

  	
   

  	
   

  	
  Name: William Caldwell, IV

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Chief Executive Officer

  



 



 13














 


Exhibit A


Definitions


“Action” means any
administrative, regulatory, judicial or other proceeding, inquiry or
investigation by or before any Governmental Authority or arbitrator.


“Affiliate” means, with respect
to any Person, any other Person that, directly or indirectly, through one or
more intermediaries, controls, is controlled by, or is under common control
with, such Person. The term “control” means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise, including the ability
to elect the majority of members of the board of directors or other governing
body of a Person, and the terms “controlled”
and “controlling” have correlative
meanings.


“Claims” means any and all (i) claims,
(ii) demands, (iii) disputes, or (iv) causes of action, relating
to or resulting from an Action.


“Contract” means any legally
binding contract, agreement, indenture, deed of trust, license, note, bond,
loan instrument, mortgage, lease, purchase or sales order, guarantee and any
similar undertaking, commitment, understanding or arrangement, whether written
or oral.


“Encumbrances” means security
interests, liens (statutory or otherwise), Claims, charges, title defects,
mortgages, pledges, easements, encroachments, restrictions on use,
rights-of-way, rights of first refusal, conditional sales or other title
retention agreements, covenants, conditions or other similar restrictions (including
restrictions on transfer) or other encumbrances of any nature whatsoever.


“GAAP” means United States
generally accepted accounting principles.


“Governmental Authority” means
any supranational, national, federal, state or local government, foreign or domestic,
or the government of any political subdivision of any of the foregoing, or any
entity, authority, agency, commission, court, ministry or other similar body
exercising executive, legislative, judicial, regulatory or administrative
authority or functions of or pertaining to government, including any authority
or other quasi-Governmental Authority or self-regulatory body or stock exchange
established by a Governmental Authority to perform any of such functions.


“Laws” means all national,
federal, state or local laws (including common law), constitutions, statutes,
codes, rules, regulations, ordinances, directives, concessions, executive
Orders or decrees of a Governmental Authority.


“Liabilities” means any and all
debts, liabilities, commitments and obligations, whether or not fixed,
contingent or absolute, matured or unmatured, direct or indirect, liquidated or
unliquidated, accrued or unaccrued, known or unknown, whether or not required
by GAAP to be reflected in financial statements or disclosed in the notes
thereto.



 A-1
 






 



“Orders” means any order,
judgment, injunction, decree or award or writ of any court, tribunal,
arbitrator, Governmental Authority or other Person having jurisdiction.


“Person” means an individual,
general or limited partnership, corporation, limited liability company, joint
stock company, unincorporated organization or association, trust, estate, joint
venture, firm, branch, registered office, Governmental Authority or any other
entity.


“Subsidiary” of any entity
means, at any date, any Person of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary
voting power or, in the case of a partnership, more than 50% of the general
partnership interests or more than 50% of the profits or losses of which are,
as of such date, owned, controlled or held by the applicable entity or one or
more subsidiaries of such entity.


“Tax” or “Taxes”
means any national, federal, state or local taxes, including but not limited to
any income, gross receipts, payroll, employment, excise, customs duties,
severance, stamp, business, premium, windfall profits, environmental,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, service, service use,
occupation, lease, lease use, transfer, registration, value added, workers’
compensation, employee withholding tax, or similar tax, any alternative or
add-on minimum tax, and any estimated tax, in each case, including any interest,
penalty, or addition thereto, whether disputed or not.



 A-2














 


Exhibit B


Covenant Not To Sue


As a material consideration and inducement to Kirin SD, Inc.
(“Purchaser”) to execute the Purchase Agreement dated as of May      ,
2006 (the “Purchase Agreement”) by and between Advanced Cell Technology, Inc.
(“ACT”) and Purchaser, ACT and all of its respective past, present and future
parents, subsidiaries, and affiliates, and each of their past, present and
future constituent members, partners, officers, shareholders, directors,
agents, employees, contractors or consultants and each of their respective
successors and assigns, and any other person or entity now, previously or
hereafter affiliated in any manner with any of them (collectively with ACT, the
“Seller Parties”) hereby unconditionally covenant and agree that each of them
shall, except as otherwise expressly provided herein, forever refrain from (i) initiating,
filing, instituting, maintaining, or proceeding upon, or encouraging, advising,
or voluntarily assisting any other person or entity to initiate, institute,
maintain, or proceed upon any claim, demand, cause of action or right of any
nature whatsoever, against any of Purchaser and its past, present and future
parents, subsidiaries, and affiliates, and each of their past, present and
future constituent members, partners, officers, shareholders, directors, agents
and employees, and each of their respective successors and assigns, and any
other person or entity now, previously or hereafter affiliated in any manner
with any of them (collectively with Purchaser, the “Purchaser Parties”),
arising from or related to, whether directly or indirectly, the infringement or
violation of any patent, or other intellectual property rights, arising out of
or related to the subject matter of the UMASS Litigation (as defined below), of
any Seller Parties, or (ii) assigning or otherwise transferring any such
claim, demand, cause of action or right against any Purchaser Parties to any
person or entity. The Seller Parties, collectively and each of them
individually, represent and warrant that as of this date there are no claims,
demands, or causes of action against any Purchaser Parties of any nature known
to any of the Seller Parties. The Seller Parties, collectively and each of them
individually, acknowledge and agree that the covenants and obligations set
forth in this Covenant may be pleaded as a full and complete defense to, and
may be used as the basis for an injunction against, any claim, demand, action,
suit or other proceeding which may be instituted, prosecuted or attempted in breach
of this Covenant. Notwithstanding the foregoing, the aforementioned covenant
and agreement by the Seller Parties shall not apply to any claims or causes of
action that the Seller Parties may have against any of the Purchaser Parties
arising out of or relating to (1) a breach by any of the Purchaser Parties
of the Exclusive License Agreement or Non-Exclusive License Agreement between
certain of the Purchaser Parties and ACT (the “License Agreements”) or the
inaccuracy of any of the representations and warranties made by any of the
Purchaser Parties in the Purchase Agreement or the License Agreements, or (2) the
infringement or violation by any of the Purchaser Parties of any ACT Owning and
Controlling Technologies (as defined below). For purposes of this Covenant Not
To Sue, the term “UMASS Litigation” means the lawsuit filed by the University
of Massachusetts against Drs. Philippe Collas and James Robl (styled as University of Massachusetts v. Robl & Collas,
No. 03-0445 BLS2 (Mass. Super. Ct., Suffolk County)) with respect to
certain intellectual property that Drs. Collas and Robl have assigned to
Aurox, LLC; and the term “ACT Owning and Controlling Technologies” means any
technology, including patent rights or other intellectual property rights,
owned by or licensed to the Seller Parties 



 B-1
 






 



that the Seller Parties have not authorized the
Purchaser Parties to use, either pursuant to a license agreement or otherwise.


IN WITNESS WHEREOF, the parties hereto have caused
this Covenant-Not-to-Sue to be duly executed as of the day and year first above
written.


ADVANCED CELL TECHNOLOGY,
INC.


	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
   

  



 


 



 B-2














 


Exhibit C


Release


FOR AND IN CONSIDERATION of the purchase by Kirin SD, Inc.,
a Delaware corporation (“Buyer”),
of all the issued and outstanding limited liability company interests
(collectively, the “Interests”) of
Hematech, LLC, a Delaware limited liability company (“Hematech”), held by Advanced Cell
Technology, Inc., a Delaware corporation (the “Member”), pursuant to a Purchase Agreement (as defined
herein), the undersigned, hereby, unconditionally and irrevocably releases and
forever discharges, Hematech, Hematech-GAC Venture, LLC, a Delaware limited
liability company, Buyer, and Kirin Brewery Company, Limited, a Japanese
corporation, and their respective Affiliates, officers, directors, employees,
stockholders, members, agents, legal representatives and other advisers,
successors and assigns and the respective officers, directors, employees,
stockholders, members, agents, legal representatives and other advisers,
successors and assigns of such Affiliates (hereinafter collectively referred to
as the “Released Parties”),
absolutely and forever, of and from any and all direct or indirect liabilities,
claims, losses, damages, costs, expenses, deficiencies, obligations,
commitments, disputes, responsibilities, demands, benefits, accounts, liens,
rights of action, claims for relief and causes of action, of every nature and
kind whatsoever, in law or in equity, known or unknown, fixed or unfixed,
choate or inchoate, liquidated or unliquidated, secured or unsecured, accrued,
absolute, contingent or otherwise, including without limitation, any rights to
reimbursement or indemnification from the Hematech under the Hematech’s
organizational documents, their operating agreements or otherwise (“Claims”), which the undersigned and its
respective affiliates, representatives, agents, attorneys, heirs, executors,
administrators, successors and assigns had, have or may have against any
Released Party for, upon or by reason of any matter, cause or thing whatsoever
from the beginning of the world to the Closing Date, except for any Claims
arising out of or related to the Agreement


Capitalized terms used in this Release without
definition have the respective meanings given to them in the Purchase Agreement
dated as of May     , 2006, by and among Buyer
and Advanced Cell Technology, Inc. (the “Agreement”).


The foregoing Release includes all claims, actions,
and demands that now exist or may hereafter accrue based on matters now unknown
as well as known and matters unanticipated as well as anticipated, resulting or
to result from the status of the undersigned as a Member or otherwise.


The undersigned hereby represents that it has not
heretofore transferred, conveyed, or assigned any Claim or any portion thereof
or interest therein. The undersigned further represents that in executing this
Release it has not relied upon any representation or statement made by any
Released Party or any of the representatives with regard to the subject matter,
basis, or effect of this Release, except such representations as are set forth
in the Agreement.


This Release may not be changed except in a writing
signed by each of the undersigned and Buyer (or any of their respective
successors). This Release shall be binding upon the undersigned and its
respective heirs, executors, administrators, successors and assigns and shall 



 C-1
 






 



inure to the benefit of the Released Parties and their
respective heirs, executors, administrators, successors and assigns. This
Release is made and entered into in the State of New York and shall be in all
respects interpreted, enforced and governed under the laws of said State. The
provisions of this Release shall be construed broadly so as to effectuate the
intent of the parties, but not so broadly as to require that any provision must
be declared or be determined by any court to be illegal or invalid. If any
provision is declared or determined to be illegal or invalid, the validity of
the remaining provisions shall not be affected hereby and said illegal or
invalid provision shall not be deemed to be a part of this Release.


IN WITNESS WHEREOF, the undersigned has caused this
Release to be executed as of the        
day of May, 2006.


	
  

  	
   

  	
  ADVANCED CELL TECHNOLOGY, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  



 



 C-2














 


Exhibit D


Exclusive
License Agreement


See Exhibit 10.2
to this Quarterly Report on Form 10-QSB



 D-1














 


 


Exhibit E


Non-Exclusive
License Agreement


See Exhibit 10.1
to this Quarterly Report on Form 10-QSB



 E-1