Document:

Exhibit 10.4

 

EXCLUSIVE LICENSE AGREEMENT

 

This AGREEMENT, effective as of February 1, 2002 (the “Effective
Date”), is between the University of Massachusetts (“University”), a public
institution of higher education of the Commonwealth of Massachusetts as represented
by its Amherst campus, and Advanced Cell Technology, Inc. (“Company”), a
Delaware corporation.

 

R E C I T A L S

 

WHEREAS, the
University owns certain intellectual property, including patent rights,
relating to the cloning of non-human animals;

 

WHEREAS, Company is
interested in obtaining a license to develop and commercialize that
intellectual property;

 

WHEREAS, the University is interested in granting a license to Company
for the development and commercialization of that intellectual property; and

 

WHEREAS, a license to the intellectual property to Company would
support the goals of the University as a publicly supported research
institution.

 

THEREFORE,
University and Company agree as follows:

 

1. Definitions.

 

1.1. “Combination
Product” means a product that contains a Licensed Product component and at
least one other essential functional component.

 

1.2. “Confidential
Information” means any confidential or proprietary information furnished by
one party (the “Disclosing Party”) to the other party (the “Receiving Party”)
in connection with this Agreement that is specifically designated as
confidential.  Confidential Information
includes, without limitation, any diligence reports furnished to University
under Section 3.1. and royalty reports furnished to University under Section 5.2.

 

1.3. “Field”
means non-human animals for agriculture, companion animals, research and diagnostic
products, non-human and human therapeutics, and nutriceuticals, except
production of immunoglobulin in the blood of Bos
taurus and Bos indicus.

 

1.4. “Licensed
Product” means any product that cannot be developed, manufactured, used, or
sold without infringing one or more claims under the Patent Rights.

 

1.5. “Licensed
Service” means any service that cannot be developed or performed without using
at least one process that infringes one or more claims under the Patent Rights.

 

1.6. “Net Sales”
means the gross amount billed or invoiced on sales by Company and its Sublicensees
of Licensed Products and Licensed Services, less the following: (a) customary trade,
quantity, or cash discounts to non-affiliated brokers or agents to the extent
actually allowed and taken; (b) amounts repaid or credited by reason of
rejection or return; (c) to the extent

 

 

separately stated on
purchase orders, invoices, or other documents of sale, any taxes or other
governmental charges levied on the production, sale, transportation, delivery,
or use of a Licensed Product or Licensed Service which is paid by or on behalf
of Company; and (d) outbound transportation costs prepaid or allowed and costs
of insurance in transit.

 

In any transfers
of Licensed Products between Company and a Sublicensee,
Net Sales are calculated based on the final sale of the Licensed Product to an
independent third party.  If Company or a
Sublicensee receives non-monetary consideration for any Licensed Products or Licensed
Services, Net Sales are calculated based on the fair market value of that
consideration.  If Company or its
Sublicensees use or dispose of a Licensed Product in the provision of a
commercial service other than a Licensed Service, the Licensed Product is sold
and the Net Sales are calculated based on the sales price of the Licensed
Product to an independent third party during the same Royalty Period or, in the
absence of sales, on the fair market value of the Licensed Product as
determined by the parties in good faith.

 

In the case of
Combination Products, Net Sales means the gross amount billed or invoiced on
sales of the Combination Product less 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 Royalty Period, the proration factor
shall be determined by the formula [A / (A+B)], where A is the aggregate gross
sales price of all Licensed Product components during such period when sold
separately from the other essential functional components, and B is the
aggregate gross sales price of the other essential functional components during
such period when sold separately from the Licensed Product Components; or

 

(ii) If all components of the Combination Product were not sold
separately during the same or immediately preceding Royalty Period, the
proration factor shall be determined by the formula [C / (C+D)], where C is the
aggregate fully absorbed cost of the Licensed Product components during the
prior Royally Period and D is the aggregate fully absorbed cost of the other
essential functional components during the prior Royalty Period, with such
costs being determined in accordance with generally accepted accounting
principles.

 

1.7. “Patent
Rights” means (a) the invention disclosures listed on Exhibit A and (i) any
United States patent applications filed for those invention disclosures, (ii)
any divisional or continuation application of those applications, (iii) any
continuation-in-part application to the extent the claims are directed to
subject matter specifically described in those applications, (iv) any patents
issued on those applications, (v) any reissues or reexaminations of those
patents, and (vi) any foreign counterparts to those patent applications and
patents and (b) the United States patent applications listed on Exhibit A and
(i) any divisional or continuation application of those applications, (ii) any
continuation-in-part applications to the extent the claims are directed to
subject matter specifically described in those applications, (iii) any patents
issued on these patent applications, (iv) any reissues or reexaminations of
those patents, and (v) any foreign counterparts to those patents and patent
applications.  Exhibit A shall be
periodically amended to include any additional Patent Rights that may arise.

 

2

 

1.8. “Prior
License Agreement” means the Exclusive License Agreement between Company
and the University dated April 16,1996, as amended by the Amendment to
Exclusive License Agreement dated September 1, 1997, the Second Amendment
to Exclusive License Agreement dated May 31, 2000, and the Third Amendment to
Exclusive License Agreement dated September 19, 2002.

 

1.9. “Related
Technology” means know-how, technical information, research and development
information, test results, and data necessary for the effective exercise of the
Patent Rights which have been developed by the University inventors as of the
Effective Date and which are owned by University.

 

1.10. “Royalty
Period” means the partial calendar quarter commencing on the date on which
the first Licensed Product is sold or used or the first Licensed Service is
performed and every complete or partial calendar quarter thereafter during
which either (a) this Agreement remains in effect or (b) Company has the right
to complete and sell work-in-progress and inventory of Licensed Products
pursuant to Section 8.5.

 

1.11. “Sublicense
Income” means consideration that Company receives for the transfer or use
of rights that are granted to Company under Section 2.1., including
without limitation license fees, milestone payments, royalties, equity
payments, up front fees, success fees, and license maintenance fees, but
excluding the following payments: (a) payments made in consideration for the
issuance of equity or debt securities of Company at fair market value, and (b)
payments specifically committed to the development of Licensed Products or
Licensed Services.

 

1.12. “Sublicensee”
means any permitted sublicensee of the rights granted Company under this
Agreement, as further described in Section 2.2.

 

2. Grant of Rights.

 

2.1. License Grants.

 

(a) Exclusive
Rights.  University grants to Company
an exclusive, worldwide, royalty-bearing license (with the right to sublicense)
under its commercial rights in the Patent Rights to develop, make, have made,
use, sell, offer to sell, import, and export Licensed Products in the Field and
to develop and perform Licensed Services in the Field, except for Licensed Products
and Licensed Services involving production of immunoglobulin in the blood of Leporidae.

 

(b) Non-exclusive
Rights.  University grants to Company
a non-exclusive, worldwide, royalty-bearing license (with the right to grant
sublicenses) under its commercial rights in the Patent Rights to develop, make,
have made, use, and sell Licensed Products consisting of immunoglobulin
produced in the blood Leporidae and
to develop and perform Licensed Services relating to immunoglobulin produced in
the blood of Leporidae.

 

2.2. Sublicenses.
 Company may grant sublicenses of its
rights under Section 2.1 only in accordance with the following
requirements:

 

(a) Company shall
provide a draft copy of any sublicense agreement to the University at least
thirty (30) days before execution to allow the University to comment on the
terms of the sublicense.

 

3

 

(b) Company shall
provide a fully executed copy of all sublicense agreements within thirty (30)
days after execution.

 

(c) Company shall
report to University annually regarding the progress of Sublicensees in
developing Licensed Products.

 

(d) Company shall
manage Sublicensees’ development efforts under the sublicenses to ensure
reasonable and continuous progress in developing Licensed Products to commercial
application.

 

(e) All sublicense
agreements shall expressly bind Sublicensees to the terms of the License
Agreement.

 

(f) Company
remains primarily accountable for performance of all sublicense agreements and
for termination of Sublicensees that fail to make diligent progress in
achieving commercial application of Licensed Products.

 

(g) Company may
not transfer the right to grant further sublicenses in sublicense agreements,
unless the sublicense agreement grants the exclusive right to practice the
technology in a limited field.  Company
may not grant Sublicensees the right to transfer sublicensing rights to their
Sublicensees. By way of illustration, Company may transfer the right to grant sublicenses
to X Corporation in a limited field of use. X Corporation may grant a
sublicense to Y Corporation, but Y Corporation may not under any circumstances
grant a sublicense to any other entity without the prior written consent of
Company and the University, which consent may be granted in the Company’s and
the University’s discretion.

 

(h) Company shall
require in every sublicense agreement the express, written and discretionary
consent of Company for any assignment of the sublicense to a different entity.

 

(i) Company shall
require in every sublicense agreement the receipt of fair value (which may be
in the form of royalties, lump sum payments, or equity) in exchange for the
sublicense.

 

2.3. Retained
Rights.

 

(a) University.
 University retains the right to make and
use the Patent Rights for academic research, teaching, and non-commercial
patient care, without payment of compensation to Company.  University may license its retained rights
under this Section to research collaborators of University faculty
members, post-doctoral fellows, and students.

 

(b) Federal
Government.  To the extent chat any
invention claimed in the Patent Rights has been funded by the federal
government, this Agreement and the grant of any rights in Patent Rights are
subject to and governed by federal law as set forth in 35 U.S.C. §§ 201-211,
and the regulations promulgated thereunder, as amended, or any successor
statutes or regulations.  Company
acknowledges that these statutes and regulations reserve to the federal
government a royalty-free, non-exclusive, non-transferrable license to practice
any government-funded invention claimed in the Patent Rights. If any term of
this Agreement fails to conform with those

 

4

 

laws and regulations, the
relevant term is an invalid provision and shall be modified by the parties
pursuant to Section 10.11.

 

(c) Other
Organizations.  To the extent that
any invention claimed in the Patent Rights has been funded by a non-profit
organization or state or local agency, this Agreement and the grant of any
rights in Patent Rights are subject to and governed by the terms of the
applicable research grant.  If any term
of this Agreement fails to conform with those terms, the relevant term is an
invalid provision and shall be modified by the parties pursuant to Section 10.11.

 

2.4 Technology
Transfer.  Promptly after the
Effective Date, the University shall provide Company with Related Technology in
its possession.

 

3. Company Obligations
Relating to Commercialization.

 

3.1. Diligence
Requirements.  Company shall use
diligent efforts, or shall cause its Sublicensees to use diligent efforts, to
develop Licensed Products or Licensed Services and to introduce Licensed
Products or Licensed Services into the commercial market.  Thereafter, Company or its Sublicensees shall
make Licensed Products or Licensed Services reasonably available to the public.
 Specifically, Company shall fulfill the
following obligations:

 

(a) Within sixty
(60) days after April 16 of each year, Company shall furnish University
with a written report on the progress of its efforts during the prior year to
develop and commercialize Licensed Products or Licensed Services, including
without limitation research and development efforts, efforts to obtain
regulatory approval, marketing efforts, and sales figures.  The report shall also contain a discussion of
intended efforts and sales projections for the current year.

 

(b) Company shall
support filing, prosecution, and maintenance of the Patent Rights in the United
States, Japan, Canada, Europe, Australia, and New Zealand.  The University will consider in good faith
whether to waive this requirement with respect to one or more Patent Rights in
one or more countries, if Company shows that there is inadequate economic justification
for fulfilling the requirement.

 

(c) Company shall
spend at least Two Hundred Thousand Dollars ($200,000) per year for the first
three years of the term of this Agreement on research and development at Company
directed to the commercialization of the Patent Rights.

 

(d) For each
Licensed Product or Licensed Service that requires United States Food and Drug
Administration (FDA) approval, Company shall use diligent efforts in filing the
appropriate application.

 

(e) Within three
(3) months after the issuance of United States government regulations on
cell-based human therapeutic products, Company and University shall determine in
good faith diligence requirements for Licensed Products and Licensed Services
that demonstrate reasonable and continuous development and progress toward
commercialization.  If the United States
government has not issued regulations on cell-based human therapeutic products
before two (2) years after the Effective Date, Company and University shall
determine in good faith diligence requirements based on the reasonable business
plans of the Company.

 

5

 

The diligence
requirements shall include specific dates that correspond to selected milestone
events described in Section 4.3. At least two (2) times per year, Company
shall notify the University of the status of United States government
regulations on cell-based human therapeutic products.

 

If University determines
that Company has not fulfilled its obligations under this Section 3.1.,
University shall furnish Company with written notice of the determination.  Within sixty (60) days after receipt of the
notice, Company shall either (i) fulfill the relevant obligation or (ii)
negotiate with University a mutually acceptable schedule of revised
diligence obligations, failing which University may, immediately upon written
notice to Company, terminate this Agreement or convert the exclusive license
into a non-exclusive license and grant additional licenses to third parties to
the Patent Rights in the Field.

 

3.2. Indemnification.

 

(a) Indemnity.
 Company shall indemnify, defend, and
hold harmless University and its trustees, officers, faculty, students,
employees, and agents and their respective successors, heirs and assigns (the “Indemnitees”),
against any liability, damage, loss, or expense (including reasonable attorneys
fees and expenses of litigation) incurred by or imposed upon any of the Indemnitees
in connection with any claims,
suits, actions, demands or judgments arising out of any theory of liability
(including without limitation actions in the form of tort, warranty, or strict liability
and regardless of whether the action has any factual basis) concerning any
product, process, or service that is made, used, or sold pursuant to any right
or license granted under this Agreement.  However, indemnification does not apply to any
liability, damage, loss, or expense to the extent directly attributable to (i)
the negligent activities or intentional misconduct of the Indemnitees or (ii)
the settlement of a claim, suit, action, or demand by Indemnitees without the prior
written approval of Company.

 

(b) Procedures.
 The Indemnitees agree to provide Company
with prompt written notice of any claim, suit, action, demand, or judgment for
which indemnification is sought under this Agreement.  Company agrees, at its own expense, to provide
attorneys reasonably acceptable to University to defend against any claim.  The Indemnitees shall cooperate fully with
Company in the defense and will permit Company to conduct and control the
defense and the disposition of the claim, suit, or action (including all
decisions relative to litigation, appeal, and settlement).  However, any Indemnitee may retain its own
counsel, at the expense of Company, if representation of the Indemnitee by the
counsel retained by Company would be inappropriate because of actual or
potential differences in the interests of the Indemnitee and any other party represented
by that counsel.  Company agrees to keep
University informed of the progress in the defense and disposition of the claim
and to consult with University regarding any proposed settlement.

 

(c) Insurance.
 Company shall maintain insurance or
self-insurance that is reasonably adequate to fulfill any potential obligation
to the Indemnitees, but not less than one million dollars ($1,000,000) for
injuries to any one person arising out of a single occurrence and five million
dollars ($5,000,000) for injuries to all persons arising out of a single
occurrence.  Company shall provide
University, upon request, with written evidence of insurance or self-insurance.
 Company shall continue to maintain such
insurance or self-insurance after the expiration or termination of this
Agreement during any period in which Company or Sublicensee

 

6

 

continues (a) to make,
use, or sell a product that was a Licensed Product under this Agreement or (b)
to perform a service that was a Licensed Service under this Agreement, and
thereafter for a period of five (5) years.

 

3.3. Use of
University Name.  In accordance with Section 7.3.,
Company and its Sublicensees may not use the name “University of Massachusetts”
or any variation of that name in connection with the marketing or sale of any
Licensed Products or Licensed Services.

 

3.4. Marking
of Licensed Products.  To the extent
commercially feasible and consistent with prevailing business practices,
Company shall mark and shall cause its Sublicensees to mark all Licensed
Products that are manufactured or sold under this Agreement with the number of each
issued patent under the Patent Rights that applies to a Licensed Product.

 

3.5. Compliance
with Law.  Company shall comply with,
and shall ensure that its Sublicensees comply with, all local, state, federal,
and international laws and regulations relating to the development,
manufacture, use, and sale of Licensed Products. Company expressly agrees to
comply with the following:

 

(a) Company or its
Sublicensees shall obtain all necessary approvals from the United States Food
& Drug Administration and any similar governmental authorities of any foreign
jurisdiction in which Company or Sublicensee intends to make, use, or sell
Licensed Products or to perform Licensed Services.

 

(b) Company and
its Sublicensees shall comply with all United States laws and regulations controlling
the export of commodities and technical data, including without limitation all
Export Administration Regulations of the United States Department of Commerce.  Among other things, these laws and
regulations prohibit or require a license for the export of certain types of
commodities and technical data to specified countries.  Company hereby gives written assurance that it
will comply with and will cause its Sublicensees to comply with all United
States export control laws and regulations, that it bears sole responsibility
for any violation of those laws and regulations by itself or its Sublicensees,
and that it will indemnify, defend, and hold University harmless (in accordance
with Section 3.2.) for the consequences of any violation.

 

(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, Company agrees that any Licensed Products used or sold in
the United States will be manufactured substantially in the United States or
its territories.  Current law provides
that if domestic manufacture is not commercially feasible under the
circumstances, University may seek a waiver of this requirement from the
relevant federal agency on behalf of Company.

 

4. Consideration for
Grant of Rights.

 

4.1. License
Fee.  In partial consideration of the
rights granted Company under this Agreement, Company shall pay to University on
the Effective Date a license fee of Fifteen Thousand Dollars ($15,000). The
license fee payment is nonrefundable and is not creditable against any other
payments due to University under this Agreement.

 

7

 

4.2. Equity.
 In partial consideration of the rights
granted Company under this Agreement, Company shall issue to University
Seventy-Three Thousand Two Hundred Sixty-Three (73,263) shares of common stock
of Company (the “Shares”), which represents the equivalent of five percent (5%)
of Company’s holdings of the issued and outstanding common stock of Cyagra,
Inc.  Any error in calculation of the
number of shares shall be corrected to equal five percent (5%) of Company’s
holdings in Cyagra, Inc.  Within thirty
(30) days after the Effective Date of this Agreement, Company shall deliver to
the University one or more Stock certificates representing the Shares, such
stock certificate(s) to be issued in the name of the University.  In connection with the equity consideration
described above, the University represents, warrants, and covenants as set
forth in Exhibit B attached hereto.

 

4.3. Milestone
Payments.  Company shall pay
University the following milestone payments within thirty (30) days after the
occurrence of each event:

 

	
  Event

  	
   

  	
  Amount

  	
   

  
	
  Completion
  of Each Phase I Clinical Trial in the Field of Human Therapeutics

  	
   

  	
  $

  	
  100,000.00

  	
   

  
	
  Completion
  of Each Phase II Clinical Trial in the Field of Human Therapeutics

  	
   

  	
  $

  	
  200,000.00

  	
   

  
	
  Completion
  of Each Phase III Clinical Trial in the Field of Human Therapeutics

  	
   

  	
  $

  	
  300,000,00

  	
   

  
	
  Introduction
  to Market of Each Licensed Product in the Field of Human Therapeutics

  	
   

  	
  $

  	
  1,000,000.00

  	
   

  
	
  Introduction
  to Market of First Licensed Product in a Non-Human Therapeutic Field of Use

  	
   

  	
  $

  	
  30,000.00

  	
   

  

 

These milestone payments
are nonrefundable and are not creditable against any other payments due to
University under this Agreement.

 

4.4. Royalties.

 

(a) Base
Royalty.  In partial consideration of
the rights granted Company under this Agreement, Company shall pay to
University the following royalty rates on Net Sales of Licensed Products and
Licensed Services, including products that are composed of, made in, derived
from, extracted from, or isolated from cells or tissues of Licensed Products by
Company (but not by Sublicensees):

 

i.                                          1.5%
for use primarily in agriculture (e.g., pigs, poultry, cattle);

ii.                                       1.5%
for use primarily in companion animals (e.g., dogs, cats, horses);

iii.                                    1.5%
for use primarily in research and diagnostic products;

iv.                                   2.0%
for use primarily in human therapeutics;

v.                                      1.5%
for use primarily in fields not specified above.

 

8

 

(b) Multiple
Royalty.  Company is required to pay
only one royalty with respect to a Licensed Product or Licensed Service
regardless of the number of patents or patent applications included within the
Patent Rights whose claims cover that Licensed Product or Licensed Service.

 

(c) Multiple
Royalty – Prior License Agreement.  If a Licensed Product or Licensed Service
includes patent rights as defined in the Prior License Agreement, Company is
required to pay the royalties that are required under this Agreement in
addition to the royalties that are required under the Prior License Agreement.
However, notwithstanding the previous sentence, for Licensed Products or
Licensed Services for use primarily in human therapeutics, the maximum total
royalty due is six percent (6%).

 

(d) Royalty
Reduction.  If University grants
additional licenses to third parties pursuant to Section 3.1., the royalty
rates set forth in Subsection 4.4.(a) shall be adjusted, if necessary, so
as not to exceed the royalty rates charged any other licensee of the Patent
Rights during the term of the non-exclusive license.

 

4.5. Minimum
Royalty.  In each year during the
term of this Agreement, Company shall pay to the University the following
minimum royalty payments:

 

	
  Date
  Due

  	
   

  	
  Amount

  	
   

  
	
  First
  Anniversary

  	
   

  	
  $

  	
  15,000.00

  	
   

  
	
  Second
  Anniversary

  	
   

  	
  $

  	
  15,000.00

  	
   

  
	
  Third
  Anniversary

  	
   

  	
  $

  	
  20,000.00

  	
   

  
	
  Fourth
  Anniversary

  	
   

  	
  $

  	
  25,000.00

  	
   

  
	
  Fifth
  Anniversary and thereafter

  	
   

  	
  $

  	
  45,000.00

  	
   

  

 

Company shall pay the
minimum royalty payments to the University within sixty (60) days after the
applicable anniversary of the Effective Date.  If the actual royalty payments to University
in any year are less than the minimum royalty payment required for that year,
Company may pay University the difference between the actual royalty payment
and the minimum royalty payment in full satisfaction of its obligations under
this Section, provided the minimum payment is made to University within sixty (60) days after the applicable
anniversary of the Effective Date. Waiver of any minimum royalty payment by
University is not a waiver of any subsequent minimum royalty payment.  If Company fails to make any minimum royalty
payment within the sixty-day period, that failure is a material breach of its
obligations under this Agreement, and University may terminate this Agreement
in accordance with Section 8.3.

 

4.6. Sublicense
Income.  Company shall pay University
a total of eighteen percent (18%) of all Sublicense Income.  Sublicense Income is due and payable within
sixty (60) days after Company receives the relevant payment from the
Sublicensee.

 

4.7. Third-Party
Royalties.  So long as Company
remains the only licensee of the Patent Rights in the Field, in the event that
Company is legally required to make royalty payments to

 

9

 

one or more third parties
in order to make, use, or sell Licensed Products or to perform Licensed
Services, Company may offset a total of fifty percent (50%) of third-party
payments against any royalty payments that are due to University in the same
Royalty Period.  However, the royalty
payments under Section 4.4, may never be reduced by more than fifty
percent (50%) in any Royalty Period.  However, in no event may the royalty payments
under Section 4.4, when aggregated with any other offsets and credits
allowed under this Agreement, be reduced below the greater of (a) fifty percent
(50%) of the royalty rate set forth in Section 4.4(a) or (b) a royalty
rate of two percent (2%) of Net Sales. Company may carry forward any unused
credits or offsets for use in subsequent Royalty Periods during the term of
this Agreement.

 

5. Royalty Reports;
Payments; Records.

 

5.1. First Sale.
 Company shall report to University the
date of first commercial sale of each Licensed Product and the date of first
commercial performance of each Licensed Service within thirty (30) days after
occurrence in each country.

 

5.2. Reports
and Payments.  Within sixty (60) days
after the conclusion of each Royalty Period, Company shall deliver to
University a report containing the following information:

 

(a) the number of
Licensed Products sold to independent third parties in each country and the
number of Licensed Products used by Company in the provision of Licensed Services
and other services in each country;

 

(b) the number of
Licensed Services provided by Company in each country;

 

(c) the gross
sales price for each Licensed Product and the gross charge for each Licensed
Service by Company during the applicable Royalty Period in each country;

 

(d) calculation of
Net Sales for the applicable Royalty Period in each country, including a
listing of applicable deductions;

 

(e) total royalty
payable on Net Sales in United States dollars, together with the exchange rates
used for conversion; and

 

(f) Sublicense
Income due to University for the applicable Royalty Period from each
Sublicensee.

 

If no royalties are due
to University for any Royalty Period, the report shall so state. Concurrent
with this report, Company shall remit to University any payment due for the
applicable Royalty Period.  Payments
should be sent to the following address:

 

University of
Massachusetts

Office of
Commercial Ventures and Intellectual Property

One Beacon Street,
26th Floor

Boston,
Massachusetts 02108

 

Attention: William
Rosenberg, Executive Director

 

10

 

5.3. Payments
in United States Dollars.  All
payments due under this Agreement are payable in United States dollars.  Conversion of foreign currency to United
States dollars shall be made at the conversion rate existing in the United
States (as reported in the Wall Street
Journal) on the last working day of the calendar quarter preceding
the applicable Royalty Period.  Payments
shall be without deduction of exchange, collection, or other charges.

 

5.4. Payments
in Other Currencies.  If by law,
regulation, or fiscal policy of a particular country, conversion into United
States dollars or transfer of funds of a convertible currency to the United
States is restricted or forbidden, Company shall give University prompt written
notice of the restriction, within the sixty-day payment deadline described in Section 5.2.
Company shall pay any amounts due University through whatever lawful methods
University reasonably designates.  However,
if University fails to designate a payment method within thirty (30) days after
University is notified of the restriction, Company may deposit payment in local
currency to the credit of University in a recognized
banking institution selected by Company and identified by written notice to
University, and that deposit fulfills all obligations of Company to University with
respect to that payment.

 

5.5. Records.
 Company shall maintain and shall cause
its Sublicensees to maintain complete and accurate records of Licensed Products
and Licensed Services that are made, used, sold, or performed under this
Agreement and any amounts payable to University in relation to Licensed
Products and Licensed Services, which records shall contain sufficient information
to permit University to confirm the accuracy of any reports delivered to
University under Section 5.2. The relevant party shall retain records
relating to a given Royalty Period for at least three (3) years after the
conclusion of that Royalty Period, during which time University shall have the right,
at its expense, to cause its internal accountants or an independent, certified
public accountant to inspect records during normal business hours for the sole
purpose of verifying any reports and payments delivered under this Agreement.  The accountant may not disclose to University
any information other than information relating to accuracy of reports and
payments delivered under this Agreement, The parties shall reconcile any
underpayment or overpayment within thirty (30) days after the accountant
delivers the results of the audit.  If
any audit performed under this Section reveals an underpayment in excess
of ten percent (10%) in any Royalty Period, Company shall bear the full cost of
the audit.  University may exercise its
rights under this Section only once every year and only with reasonable
prior notice to Company.

 

5.6. Late
Payments.  Any payments by Company
that are not paid on or before the date payments are due under this Agreement
bear interest to the extent permitted by law at two percentage points above the
Prime Rate of interest as reported in the Wall
Street Journal on the date payment is due, with interest calculated
based on the number of days that payment is delinquent.

 

5.7. Method of
Payment.  All payments under this
Agreement should be made to the “University of Massachusetts” and sent to the
address identified below.  Each payment
should reference this Agreement and identify the obligation under this
Agreement that the payment satisfies.

 

5.8. Withholding
and Similar Taxes.  Royalty payments
and other payments due to University under this Agreement may not be reduced by
reason of any withholding or similar taxes applicable to payments to
University.

 

11

 

6. Patents and
Infringement.

 

6.1. Responsibility
for Patent Rights.  Company has
primary responsibility at its own expense for the preparation, filing,
prosecution, and maintenance of all Patent Rights, using patent counsel
reasonably acceptable to the University. 
Company shall consult with University as to the preparation, filing,
prosecution, and maintenance of all Patent Rights reasonably prior to any
deadline or action with the United States Patent & Trademark Office or any
foreign patent office and shall furnish University with copies of relevant
documents reasonably in advance of consultation.

 

6.2. Abandonment.
 If Company desires to abandon any patent
or patent application included in the Patent Rights, or if Company declines to
assume responsibility for obtaining patent protection for any invention
described in Exhibit A, Company shall provide University with reasonable prior
written notice of the intended abandonment or declination of responsibility.  In that case, Company loses all rights under
this Agreement with respect to those Patent Right(s), and the University may
pursue patenting at its own expense and dispose of the Patent Right(s) as it
sees fit.

 

6.2. Cooperation.
 University and Company shall cooperate
fully in the preparation, filing, prosecution, and maintenance of all Patent
Rights.  Cooperation includes, without
limitation, (a) promptly executing all papers and instruments or requiring
employees of University or Company to execute papers and instruments as reasonable
and appropriate to enable Company or University to file, prosecute, and
maintain Patent Rights in any country; and (b) promptly informing Company or
the University of matters that may affect the 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).

 

6.3. Infringement.

 

(a) Notification
of Infringement.  Each party agrees
to provide written notice to the other party promptly after becoming aware of
any infringement of the Patent Rights.

 

(b) Company
Right to Prosecute.  So long as
Company remains the only licensee of the Patent Rights in the Field, Company
may, under its own control and at its own expense, prosecute any third party infringement
of the Patent Rights in the Field or, together with licensees of the Patent
Rights in other fields (if any), defend the Patent Rights in any declaratory
judgment action brought by a third party which alleges invalidity,
unenforceability, or infringement of the Patent Rights.  Prior to commencing any action, Company shall
consult with University and shall consider the views of University regarding
the advisability of the proposed action and its effect on the public interest.  Company may not enter into any settlement,
consent judgment, or other voluntary final disposition of any infringement
action under this Subsection without the prior written consent of
University, which consent may not be unreasonably withheld or delayed.  Any recovery obtained in an action under this
Subsection shall be distributed as follows: (i) each party shall be
reimbursed for any expenses incurred in the action (including the amount of any
royalty payments withheld from University as described below); (ii) as to
ordinary damages, Company shall receive an amount equal to its lost profits or a reasonable royalty on the infringing
sales (whichever measure of damages the court applied), less a reasonable
approximation of the royalties that Company would have paid to University if
Company had sold the infringing

 

12

 

products and services
rather than the infringer; and (iii) as to special or punitive damages, the
parties shall share equally in any award. Company may offset a total of fifty
percent (50%) of any expenses incurred under this Subsection against any
royalty payments due to University under this Agreement.  However, royalty payments under Section 4.4.,
may never be reduced by more than fifty percent (50%) in any Royalty Period.

 

(c) University
as Indispensable Party.  University
shall permit any action under this Section to be brought in its name if
required by law, provided that Company shall hold University harmless from, and
if necessary indemnify University against, any costs, expenses, or liability
that University may incur in connection with the action.

 

(d) University
Right to Prosecute.  If Company fails
to initiate an infringement action within a reasonable time after it first
becomes aware of the basis for the action, or to answer a declaratory judgment
action within a reasonable time after the action is filed, University may
prosecute the infringement or answer the declaratory judgment action under its
sole control and at its sole expense, and any recovery obtained shall be given
to University.

 

(e) Cooperation.
 Both parties shall cooperate fully in
any action under this Section 6.4. which is controlled by the other party,
provided that the controlling party reimburses the cooperating party promptly
for any costs and expenses incurred by the cooperating party in connection with
providing assistance.

 

7. Confidential
Information; Publications; Publicity.

 

7.1. Confidential
Information.

 

(a) Designation.
 Confidential Information that is
disclosed in writing shall be marked with a legend indicating its confidential
status (such as, “Confidential” or “Proprietary”). Confidential Information
that is disclosed orally or visually shall be documented in a written notice
prepared by the Disclosing Party and delivered to the Receiving Party within
thirty (30) days of the date of disclosure. 
The notice shall summarize the Confidential Information disclosed to the
Receiving Party and reference the time and place of disclosure.

 

(b) Obligations.
 For a period of five (5) years after
disclosure of any portion of Confidential Information, the Receiving Party
shall (i) maintain Confidential Information in confidence, except that the
Receiving Party may disclose or permit the disclosure of any Confidential
Information to its trustees or directors, officers, employees, consultants, and
advisors who are obligated to maintain the confidential nature of Confidential
Information and who need to know Confidential Information for the purposes of
this Agreement; (ii) use Confidential Information solely for the purposes of
this Agreement; and (iii) allow its trustees or directors, officers, employees,
consultants, and advisors to reproduce the Confidential Information only to the
extent necessary for the purposes of this Agreement, with all reproductions
being Confidential Information.

 

(c) Exceptions.
 The obligations of the Receiving Party
under Subsection 7.l.(b) above do not apply to the extent that the
Receiving Party can demonstrate that Confidential Information (i) was in the
public domain prior to the time of its disclosure under this Agreement; (ii)
entered the public domain after the time of its disclosure under this Agreement
through

 

13

 

means other than an
unauthorized disclosure resulting from an act or omission by the Receiving Party;
(iii) was independently developed or discovered by the Receiving Party without
use of the Confidential Information; (iv) is or was disclosed to the Receiving
Party at any time, whether prior to or after the time of its disclosure under
this Agreement, by a third party having no fiduciary relationship with the
Disclosing Party and having no obligation of confidentiality with respect to
the Confidential Information; or (v) is required to be disclosed to comply with
applicable laws or regulations or with a court or administrative order,
provided that the Disclosing Party receives reasonable prior written notice of
the disclosure.

 

(d) Ownership
and Return.  The Receiving Party
acknowledges that the Disclosing Party (or a third party entrusting its own
information to the Disclosing Party) owns the Confidential Information in the
possession of the Receiving Party.  Upon
expiration or termination of this Agreement, or at the request of the
Disclosing Party, the Receiving Party shall return to the Disclosing Party all
originals, copies, and summaries of documents, materials, and other tangible
manifestations of Confidential Information in the possession or control of the
Receiving Party, except that the Receiving Party may retain one copy of the
Confidential Information in the possession of its legal counsel solely for the
purpose of monitoring its obligations under this Agreement.

 

7.2. Publications.
 University and its employees are free to
disclose publicly (through journals, lectures, or otherwise) the results of any
research relating to the Field or the subject matter of the Patent Rights,
except as otherwise provided by written agreement between University and
Company (e.g., a sponsored research agreement).

 

7.3. Publicity
Restrictions.  Company may not use
the name of University or any of its trustees, officers, faculty, students,
employees, or agents, or any adaptation of their names, or any terms of this
Agreement in any promotional material or other public announcement or
disclosure without the prior written consent of University.  The foregoing notwithstanding, Company may disclose
that information without the consent of University in any prospectus, offering memorandum,
or other document or filing required by applicable securities laws or other applicable
law or regulation, provided that Company provides University at least ten (10)
days prior written notice of the proposed text for the purpose of giving
University the opportunity to comment on the text.

 

8. Term and
Termination.

 

8.1. Term.  This Agreement commences on the Effective Date
and remains in effect until (a) the expiration of all issued patents within the
Patent Rights or (b) for a period of ten (10) years after the Effective Date if
no patents have issued within the Patent Rights within that ten-year period,
unless earlier terminated in accordance with the provisions of this Agreement.

 

8.2. Voluntary
Termination by Company.  Company may
terminate this Agreement for any reason upon ninety (90) days prior written
notice to University.

 

8.3. Termination
for Default.  If either party commits
a material breach of its obligations under this Agreement and fails to cure
that breach within sixty (60) days after receiving written notice of the
breach, the other party may terminate this Agreement immediately upon written notice
to the party in breach.

 

14

 

8.4. Force
Majeure.  Neither party is
responsible for delays resulting from causes beyond its reasonable control,
including without limitation fire, explosion, flood, war, strike, or riot, provided
that the nonperfoming party uses commercially reasonable efforts to avoid or
remove those causes of nonperformance and continues performance under this
Agreement with reasonable dispatch whenever the causes are removed.

 

8.5. Effect of
Termination.  The following
provisions survive the expiration or termination of this Agreement: Articles 1
and 9; Sections 3.2., 3.5., 5.2. (obligation to provide final report and payment), 5.5., 6.4., 7.1., 7.3.,
8.5., and 10.9. Upon the early termination of this Agreement, Company may
complete and sell any work-in-progress and inventory of Licensed Products that
exist as of the effective date of termination, provided that (a) Company is
current in payment of all amounts due University under this Agreement, (b)
Company pays University the applicable royalty on sales of Licensed Products in
accordance with the terms of this Agreement, and (c) Company complete and sell
all work-in-progress and inventory of Licensed Products within six (6) months
after the effective date of termination.

 

9. Dispute Resolution.

 

9.1. Procedures
Mandatory.  The parties agree that
any dispute arising out of or relating to this Agreement will be resolved
solely by means of the procedures set forth in this Article, and that these
procedures constitute legally binding obligations that are an essential
provision of this Agreement.  However,
all procedures and deadlines specified in this Article may be modified by written
agreement of the parties.  If either
party fails to observe the procedures of this Article, as modified by their
written agreement, the other party may bring an action for specific performance
in any court of competent jurisdiction.

 

9.2. Dispute
Resolution Procedures.

 

(a) Negotiation.
 In the event of any dispute arising out
of or relating to this Agreement, the affected party shall notify the other
party, and the parties shall attempt in good faith to resolve the matter within
ten (10) days after the date of notice (the “Notice Date”). Any disputes not
resolved by good faith discussions shall be referred to senior executives of
each party, who shall meet at a mutually acceptable time and location within
thirty (30) days after the Notice Date and attempt to negotiate a settlement.

 

(b) Mediation.
 If the matter remains unresolved within
sixty (60) days after the Notice Date, or if the senior executives fail to meet
within thirty (30) days after the Notice Date, either party may initiate
mediation upon written notice to the other party, whereupon both parties shall
to engage in a mediation proceeding under the then current CPR Institute for
Dispute Resolution (“CPR”) Model Procedure for Mediation of Business Disputes,
except that specific provisions of this Section override inconsistent
provisions of the CPR Model Procedure.  The
mediator will be selected from the CPR Panels of Neutrals. If the parties
cannot agree upon the selection of a mediator within ninety (90) days after the
Notice Date, then upon the request of either party, the CPR shall appoint the
mediator.  The parties shall attempt to
resolve the dispute through mediation until one of the following occurs: (i)
the parties reach a written settlement; (ii) the mediator notifies the parties
in writing that they have reached an impasse; (iii) the parties agree in
writing that they have reached an impasse; or (iv) the parties have not reached
a settlement within one hundred twenty (120) days after the Notice Date.

 

15

 

(c) Trial
Without Jury.  If the parties fail to
resolve the dispute through mediation, or if neither party elects to initiate
mediation, each party may pursue any other remedies legally available to
resolve the dispute.  However, the parties
expressly waive the right to a jury trial in the legal proceeding under this
Section.

 

9.3. Preservation of Rights Pending Resolution.

 

(a) Performance
to Continue.  Each party shall
continue to perform its obligations under this Agreement pending final
resolution of any dispute arising out of or relating to this Agreement.  However, a party may suspend performance of
its obligations during any period in which the other party fails or refuses to
perform its obligations.

 

(b) Provisional
Remedies.  Although the procedures
specified in this Article are the exclusive procedures for resolution of
disputes arising out of or relating to this Agreement, either party may seek a
preliminary injunction or other provisional equitable relief if, in its
reasonable judgment, that action is necessary to avoid irreparable harm to
itself or to preserve its rights under this Agreement.

 

(c) Statute of
Limitations.  The parties agree that
all applicable statutes of limitation and time-based defenses (such as,
estoppel and laches) are tolled while the procedures set forth in Subsections 9.2.(a)
and 9.2(b) are pending.  The parties
shall take any actions necessary to effectuate this result.

 

10. Miscellaneous.

 

10.1. Representations
and Warranties.  University
represents that its employees have assigned to University their entire right,
title, and interest in the Patent Rights and that it has authority to grant the
rights and licenses set forth in this Agreement. UNIVERSITY MAKES NO OTHER
WARRANTIES CONCERNING THE PATENT RIGHTS AND RELATED TECHNOLOGY, INCLUDING
WITHOUT LIMITATION ANY EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.  Specifically,
University makes no warranty or representation (a) regarding the validity or
scope of the Patent Rights, (b) that the exploitation of the Patent Rights or
any Licensed Product or Licensed Service will not infringe any patents or other
intellectual property rights of a third party, and (c) that any third party is
not currently infringing or will not infringe the Patent Rights.

 

10.2. Compliance
with Law and Policies.  Company
agrees to comply with applicable law and the policies of University in the area
of technology transfer and shall promptly notify University of any violation
that Company knows or has reason to believe has occurred or is likely to occur.
 The University policies currently in
effect at the Amherst campus are the Intellectual Property Policy. Policy on
Conflicts of Interest Relating to Intellectual Property and Commercial Ventures,
and Policy on Faculty Consulting and Outside Activities, current copies of
which the University has provided to Company.

 

10.3. Tax-Exempt
Status.  Company acknowledges that
University, as a public institution of the Commonwealth of Massachusetts, is an
exempt organization under the United States Internal Revenue Code of 1986, as
amended.  Company also acknowledges that
certain facilities in which the licensed inventions were developed may have
been financed through offerings of

 

16

 

tax-exempt bonds.  If the Internal Revenue Service determines, or
if counsel to University reasonably determines, that any term of this Agreement
jeopardizes the tax-exempt status of University or the bonds used to finance
University facilities, the relevant term is invalid and shall be modified in
accordance with Section 10.11.

 

10.4. Counterparts.
 This Agreement may be executed in one or
more counterparts, each of which is an original, and all of which together are
one instrument.

 

10.5. Headings.
 All headings are for convenience only
and do not affect the meaning of any provision of this Agreement.

 

10.6. Binding
Effect.  This Agreement is binding
upon and inures to the benefit of the parties and their respective permitted
successors and assigns.

 

10.7. Assignment.
 This Agreement may not be assigned by
either party without the prior written consent of the other party.

 

10.8. Amendment
and Waiver.  This Agreement may be
amended, supplemented, or otherwise modified only by means of a written
instrument signed by both parties.  Any
waiver of any rights or failure to act in a specific instance relates only to
that instance and is not an agreement to waive any rights or fail to act in any
other instance.

 

10.9. Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts irrespective of any conflicts of law principles.

 

10.10. Notice.
 Any notices required or permitted under
this Agreement shall be in writing, shall specifically refer to this Agreement,
and shall be sent by recognized national overnight courier, or registered or
certified mail, postage prepaid, return receipt requested, to the following
addresses:

 

	
  If to University:

  	
  If to Company:

  
	
   

  	
   

  
	
  Office of Commercial Ventures
  and

  Intellectual Property

  University of Massachusetts Amherst

  Goodell Building, Room 512

  Amherst, MA 01003-3290

  	
  Advanced Cell
  Technology, Inc.

  One Innovation Drive

  Worcester, MA 01605

  
	
   

  	
   

  
	
  Attention:

  	
  E. Bradley Moynahan

  	
  Attention:

  	
  Michael D. West, Ph.D.

  
	
   

  	
  Director

  	
   

  	
  President & CEO

  

 

notices under this
Agreement are effective upon receipt.  A
party may change its contact information immediately upon written notice to the
other party in the manner provided in this Section.

 

10.11. Severability.
 If any provision of this Agreement is
held invalid or unenforceable for any reason, the invalidity or
unenforceability does not affect any other provision of this

 

17

 

Agreement, and the
parties shall negotiate in good faith to modify the Agreement to preserve (to
the extent possible) their original intent.  If the parties fail to reach a modified
agreement within sixty (60) days after the relevant provision is held invalid
or unenforceable, then the dispute shall be resolved in accordance with the
procedures set forth in Article 9. While the dispute is pending
resolution, this Agreement shall be construed as if the provision were deleted
by agreement of the parties.

 

10.12. Entire
Agreement.  This Agreement constitutes
the entire agreement between the parties with respect to its subject matter and
supersedes all prior agreements or understandings between the parties relating
to its subject matter.

 

The parties have
caused this Agreement to be executed by their duly authorized representatives
as of the Effective Date.

 

	
  UNIVERSITY OF
  MASSACHUSETTS

  	
  ADVANCED CELL
  TECHNOLOGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ William S.
  Rosenberg

  	
   

  	
  By:

  	
  /s/ Michael West

  	
   

  
	
   

  	
  William S. Rosenberg

  	
   

  	
  Michael West

  
	
   

  	
   

  	
  President and CEO

  
	
   

  	
  Executive Director,
  Office of

  Commercial Ventures and Intellectual

  Property

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
       3/27/03

  	
   

  	
  Date:

  	
       3-31-03

  	
   

  
										

 

18Exhibit 10.5

 

NONEXCLUSIVE SUBLICENSE AGREEMENT

between

ADVANCED CELL TECHNOLOGY, INC.

and

INFIGEN, INC.

 

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

 

RECITALS

 

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

 

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

 

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

 

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

 

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

 

WHEREAS, ACT owns or has a license or licenses granting ACT the ability
to grant a sublicense the ACT Patent Rights (as defined below), which includes
certain scientific methods and techniques for cloning animals that may be
valuable in the Infigen Field (as defined below); and

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

1.             DEFINITIONS. As
used in this Agreement, the following terms shall have the meanings set forth
below.

 

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

 

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

 

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

 

2

 

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

 

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

 

1.6           “Infigen
Field” means:

 

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

 

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

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

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

 

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

 

1.7           “Infigen
Patent Rights” means the patents and patent applications identified
on Schedule B attached hereto, all divisionals, continuations, and
continuations-in-part that derive from the identified patent applications and
any patents issuing on said applications together with

 

3

 

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

 

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

 

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

 

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

 

1.11         “Territory”  means the world.

 

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

 

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

 

1.14         “University”
means the University of Massachusetts.

 

1.15         “Valid Claim”
means a claim of an issued or pending patent which has not lapsed or become
abandoned or 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 that appeal.

 

The use herein of the plural shall include the singular and vice versa and the use of the masculine shall include the
feminine.  Additional terms may be
defined throughout this Agreement.

 

4

 

2.             THE FINAL SETTLEMENT
AGREEMENT.

 

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

 

3.             GRANT OF RIGHTS.

 

3.1           License Grants from
ACT to Infigen.

 

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

 

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

 

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

 

3.2           License Grant from
Infigen to ACT.

 

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

 

5

 

Products in the Territory in the ACT Cell Therapy Fields and to develop
and perform Infigen Services in the Territory in the ACT Cell Therapy Field.  Infigen acknowledges, understands and agrees
that under the licenses granted herein to ACT, ACT has the right to utilize the
Infigen Patent Rights in the conduct of research, preclinical studies or other
work related to the ACT Fields or directed to the ultimate development and
manufacture of Infigen Products and/or Infigen Services.  The parties acknowledge, understand and agree
that the licenses granted herein include only a limited right to grant further
sublicenses to or under the Infigen Patent Rights under Section 3.2(b).  The license “to have made” and “to have sold”
granted herein means only that ACT may, without Infigen’s consent, contract
with a third party or parties to develop, manufacture or sell Infigen Products
on behalf of ACT.

 

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

 

3.3           Disclosure of Licensed
Patents and Patent Applications.

 

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

 

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

 

4.             OBLIGATIONS
RELATING TO COMMERCIALIZATION.

 

4.1           Diligence
Requirements.

 

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

 

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

 

6

 

4.2           Summary
Reports by Infigen.

 

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

 

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

 

4.3           Failure to Fulfill
Obligations.

 

(a)           Failure of Infigen
to Fulfill Obligations. In the event that ACT determines that Infigen has
not fulfilled its obligations under this Article 4, ACT shall furnish Infigen
with written notice of such determination.  Within sixty (60) days after receipt of such
notice, Infigen shall either (i) fulfill the relevant obligation or (ii)
negotiate with ACT a mutually acceptable schedule of revised obligations,
failing which ACT shall have the right immediately upon written notice to
Infigen to terminate Infigen’s rights as granted under this sublicense with
respect to the Infigen Field and the ACT Patent Rights.

 

(b)           Failure of ACT to
Fulfill Obligations. In the event that Infigen determines that ACT has not
fulfilled its obligations under this Article 4, Infigen shall furnish ACT with written
notice of such determination.  Within
sixty (60) days after receipt of such notice, ACT shall either (i) fulfill the
relevant obligation or (ii) negotiate with Infigen a mutually acceptable schedule
of revised obligations, failing which Infigen shall have the right immediately
upon written notice to ACT to terminate a) ACT’s rights as granted under this
sublicense with respect to the ACT Cell Therapy Field and the Infigen Patent
Rights and b) the representations and recitals regarding previous agreements,
orders and injunctions.

 

5. TERM AND TERMINATION.

 

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

 

7

 

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

 

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

 

5.3           Effect of
Termination. The rights and obligations of the parties under Sections 7.4,
8.1, 8.2, 10.1, 10.2, 10.3, and 11 shall survive termination of this Agreement
and continue in force.  Upon the
termination of this Agreement, each party and its respective Sublicensees (i.e.,
ACT Sublicensee or Infigen Sublicensee) may complete and sell any work-in-progress
and inventory of ACT Products or Infigen Products and perform any ACT Services
or Infigen Services which they are obligated to perform under contracts with
third parties, as applicable, that exist as of the effective date of
termination, provided that (i) ACT and/or Infigen, as applicable, is current in
payment of all amounts due to the other party under this Agreement, (ii) ACT or
Infigen, as applicable, pays the other party the applicable royalty on such sales
of ACT Products or Services or Infigen Products or Services, as applicable, in accordance
with the terms of this Agreement, and (iii) ACT and/or Infigen and its
respective Sublicensees (i.e., ACT Sublicensee or Infigen Sublicensee),
as applicable, shall complete and sell all work-in-progress and inventory of
such ACT Products or Infigen Products and complete its obligations to perform
any ACT Services or Infigen Services, as applicable, within six (6) months
after the effective date of termination.  Upon any termination of this Agreement, each party
shall promptly return to the other party all written Confidential Information,
and all copies thereof, to the other party.

 

5.4           Additional
Termination Provisions. The foregoing termination rights are in addition to
any termination rights that may be provided elsewhere in this Agreement.

 

6.             CONSIDERATION.

 

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

 

6.2           License Fees.

 

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

 

8

 

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

 

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

 

6.3           Royalties, Reports
and Records.

 

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

 

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

 

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

 

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

 

6.4           Sublicense Income.

 

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

 

9

 

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

 

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

 

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

 

6.5           Payments in U.S.
Dollars. All payments due under this Agreement shall be payable in United
States currency without deduction for taxes, assessments, exchanges, collection
or other charges of any kind.  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.

 

6.6           Audit Rights

 

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

 

(b)           Each party shall keep
full, complete, true and accurate books of account containing all particulars
relating to the manufacture and sales with respect to ACT Products and Services,
or Infigen Products and Services, as applicable, and any allowed credits, which
may be necessary to ascertain and verify the royalties and sublicense revenue
payable to the other party.  Said books
and accounts shall be kept at the respective party’s principal place of
business.

 

10

 

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

 

7.             PROPRIETARY RIGHTS.

 

7.1           Ownership.

 

(a)           ACT. ACT shall
own the ACT Patent Rights.

 

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

 

7.2           ACT Patent Rights.

 

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

 

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

 

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

 

11

 

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

 

7.3           Infigen
Patent Rights

 

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

 

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

 

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

 

12

 

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

 

7.5           Settlement
Procedures. No settlement, consent judgment or other voluntary final disposition
of a suit being prosecuted by a party under this Article 7 may be entered into
without the consent of the other party if such settlement, consent judgment or
other voluntary final disposition would alter, derogate or diminish such other
party’s rights under the Agreement or otherwise materially adversely affect
such other party, which consent shall not be unreasonably withheld or delayed.

 

8.             CONFIDENTIAL
INFORMATION.

 

8.1.          Confidential
Information; Non-Disclosure. Except to the extent expressly 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 a period of five (5)
years thereafter: (i) treat as confidential all Confidential Information of the
disclosing party; (ii) not use such Confidential Information except as
authorized herein or otherwise authorized in writing, (iii) implement
reasonable procedures to prohibit the disclosure, unauthorized duplication,
misuse or removal of the disclosing party’s Confidential Information; (iv)
except as set forth in (v) below, not disclose such Confidential Information to
any third party, and (v) only disclose the Confidential Information to those of
its employees, sublicensees, customers and third party contractors who have
need to know such Confidential Information.  Without limiting the foregoing, each of the
parties shall protect the Confidential Information 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.

 

8.2           Exceptions.
Neither party shall have any obligation or liability to the other with regard
to any Confidential Information of the other: (i) that was publicly known at
the time it was disclosed or becomes publicly known through no fault, action,
or inaction of the receiving party; (ii) was known to the receiving party,
without restriction, at the time of disclosure; (iii) is disclosed with the
prior written approval of the disclosing party; (iv) was independently
developed by the receiving party without any use of the Confidential Information;
(v) is disclosed pursuant to an order or requirement of a court, administrative
agency, or other governmental body, provided that the receiving party shall
provide prompt advanced notice thereof to enable the disclosing party to seek a
protective order or otherwise take steps necessary to maintain the
confidentiality of the Confidential Information; (vi) is disclosed in
connection with securing regulatory approval or otherwise as may be necessary
to comply with any regulation or request of any governmental or other
regulatory authority, provided that the disclosing party shall take all
reasonable steps to limit disclosure of the Confidential Information and to
otherwise maintain the confidentiality of the Confidential Information; or
(vii) that is provided to the recipient by a third party having no obligation
to keep the information secret.

 

13

 

8.3           Injunctive
Relief. ACT and Infigen acknowledge and agree that any breach of the
confidentiality obligations imposed by this Article 8 will constitute immediate
and irreparable harm to the party disclosing the Confidential Information
and/or its permitted successors and assigns, which cannot adequately and fully
be compensated by money damages and will warrant, in addition to all other
rights and remedies afforded by law, injunctive relief, specific performance,
and/or other equitable relief.  The
disclosing party’s rights and remedies hereunder are cumulative and not
exclusive.

 

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

 

9.             REPRESENTATIONS AND
WARRANTIES.

 

9.1           No
Conflict. Each party warrants and represents to the other that it has the
legal rights and power to enter into this Agreement and to extend the rights
and licenses granted to the other in this Agreement, that this Agreement
constitutes the binding legal obligation of each party, enforceable in
accordance with its terms, that the execution of, and performance of the
efforts contemplated by, this Agreement will not conflict with or result in any
breach of any of the terms, conditions, or provisions of, or constitute a
default under, any agreement to which it is a party or by which it is bound or
with any applicable law, rule or regulation, and that any necessary or
appropriate permits, consents or approvals have been obtained.  Each party further represents to the other
that it is not aware of any legal obstacles, including patent rights of others,
which could prevent either party from carrying out the provisions of this
Agreement.  During the term of this
Agreement, ACT and Infigen shall not enter into any collaboration or other
agreement, take any action, or fail to take any action that would cause those
representations and warranties to be breached.

 

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

 

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

 

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

 

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

 

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

 

14

 

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

 

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

 

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

 

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

 

(b)           Infigen has no
outstanding agreements including any agreement with academic institutions,
universities, or third parties, whether written, oral or implied, which could be
inconsistent with the license granted herein;

 

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

 

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

 

9.4           Disclaimer.

 

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

 

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

 

10.          INDEMNIFICATION.

 

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

 

15

 

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

 

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

 

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

 

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

 

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

 

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

 

10.3         Indemnification
Claims. Each party shall give the other party prompt notice of any claim
for which indemnification under this Article 10 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 settle it at the sole discretion of the indemnifying
party) with counsel reasonably satisfactory to the other party which may, at
its own expense, participate in the defense of any claim after the indemnifying
party assumes control of the defense thereof.  The indemnification obligations in this
Section 10 shall not apply to amounts paid in settlement of such claim if such
settlement is effected without the consent of the indemnifying party, which
consent shall not be unreasonably withheld or delayed.  The failure of the indemnified party to
deliver notice to the indemnifying party promptly after the commencement of any
such action, if prejudicial to the indemnifying

 

16

 

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

 

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

 

12.          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.

 

13.          MISCELLANEOUS.

 

13.1         Force
Majeure. Neither party to this Agreement will be liable for failure to perform
any of its obligations hereunder during any period in which such performance is
delayed by fire, flood, war, riot, embargo, organized labor stoppage,
earthquake, acts of civil and military authorities, or any other acts beyond
its reasonable control; provided, however, that the party suffering such delay
immediately notifies the other party of the delay; provided that the nonperforming
party uses commercially reasonable efforts to avoid or remove those causes of nonperformance
under this Agreement with reasonable dispatch; and provided, further, that either
party shall have the right to terminate this Agreement upon thirty (30) days
prior written notice if the delay of the other party due to any of the
above-mentioned causes continues for a period of thirty (30) days.

 

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

 

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

 

17

 

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

 

	
   

  	
   

  	
  Infigen

  
	
   

  	
   

  	
  1825 Infinity Drive

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  De Forest, WI,53532

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Attn: Walter Simson, CEO

  
	
   

  	
   

  	
   

  	
  Fax: 608 846-0520

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With a copy to Roberta Howell, Esq.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Foley and Lardner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Verex Plaza

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  150 East Gilman Street

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Madison, WI

  
	
   

  
	
   

  
	
  and in the case of ACT, the proper address for communications and all
  payments shall be:

  
	
   

  
	
   

  	
   

  	
  Advanced Cell Technology, Inc.

  
	
   

  	
   

  	
  One Innovation Drive

  
	
   

  	
   

  	
  Worcester, Massachusetts 01605

  
	
   

  	
   

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

  
	
   

  	
   

  	
  Fax: 508-756-0931

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Pierce Atwood

  
	
   

  	
   

  	
  One Monument Square

  
	
   

  	
   

  	
  Portland, Maine 04101

  
	
   

  	
   

  	
  Attn: William L, Worden, Esq,

  
	
   

  	
   

  	
  Fax: 207-791-1350

  
						

 

13.4         Choice
of Law; Dispute Resolution: Submission to Jurisdiction. This Agreement is
subject to and governed by the laws of the State of Delaware, without regard to
principles of conflicts of law thereof, except that questions affecting the
construction and effect of any patent shall “be determined by the law of the
country in which the patent was granted.  Any dispute arising under this Agreement which
is not promptly settled by the parties shall be referred to the Chief Executive
Officers of the parties.  The Chief
Executive Officers will meet for negotiations

 

18

 

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

 

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

 

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

 

(b)           Each party shall comply
fully with any and all applicable local, state, federal and international laws
and regulations relating to the ACT Products or Infigen Products or to perform
ACT Services or Infigen Services, as applicable, including without limitation
all 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 ACT Products or Infigen Products or to perform ACT Services or
Infigen Services, as applicable, and any technology relating thereto.  Each party hereby gives written assurance to
the other that it will comply with all such import or export laws and
regulations, that it bears sole responsibility for any violation of such laws
and regulations, and that it will indemnify, defend, and hold the other party harmless
(in accordance with Article 10) for the consequences of any such violation.

 

13.6         No
Encumbrances. Neither party will create or incur or cause to be incurred or
to exist any lien, encumbrance, mortgage, pledge, charge, restriction or other
security interest of any kind upon the ACT Patent Rights or the Infigen Patent
Rights, as applicable, without the prior written consent of the other party.

 

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

 

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

 

19

 

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

 

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

 

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

 

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

 

13.13       Publicity.
Neither party, nor any of its Affiliates, shall originate 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 the approval of the University.  The foregoing notwithstanding, ACT and Infigen
shall have the right to make such Announcements without the consent of the
other party or the University, as applicable, in any prospectus, offering memorandum,
or other document or filing required by securities laws or other applicable law
or regulation, and to potential business partners under an industry-standard
confidentiality agreement, provided that such party shall have given the other
party or the University, as applicable, at least ten (10) days’ prior written
notice of the proposed text for the purpose of giving the other party or the
University, as applicable, the opportunity to comment on such text.

 

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

 

13.15       No
Agency. Nothing herein shall be deemed to constitute either party as the agent
or representative of the other party, or both parties as joint venturers or
partners for any purpose.  Each party
shall be an independent contractor, not an employee or partner of the other party,
and the manner in which 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, and
neither party will have authority to speak for, represent or obligate the other
party in any way without prior written authority from the other party.

 

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

 

20

 

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

 

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

 

13.18       Bankruptcy.
All rights and licenses granted under or pursuant to this Agreement are, and
shall otherwise be deemed to be, for purposes of Paragraph 365(n) of the U.S. Bankruptcy
Code, licenses of rights to “intellectual property” as defined under Paragraph 101(35A)
of the U.S. Bankruptcy Code.  The parties
agree that ACT or Infigen, as applicable, as a licensee of such rights under
this Agreement, shall retain and may fully exercise all of its rights and
elections under the U.S. Bankruptcy Code.  The parties agree that, in the event of the commencement
of a bankruptcy proceeding by or against ACT including under the U.S. Bankruptcy
Code, Infigen 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 the ACT Patent Rights, and the same, if not
already in Infigen’s possession, shall be promptly delivered to Infigen upon
any such commencement of a bankruptcy proceeding upon written request therefore
by Infigen. The parties further agree that, in the event of the commencement of
a bankruptcy proceeding by or against Infigen including under the U.S. Bankruptcy
Code, ACT 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 the Infigen Patent Rights, and the same, if
not already in ACT’s possession, shall be promptly delivered to ACT upon any
such commencement of a bankruptcy proceeding upon written request therefore by
ACT.

 

13.19       Joint
Preparation. This Agreement has been prepared jointly and no rule of strict
construction shall be applied against either party.  In this Agreement, the singular shall include the
plural and vice versa and the word “including” shall be deemed to be followed
by the phrase “without limitation.”

 

21

 

IN WITNESS WHEREOF, the parties hereto and the
University have caused this Agreement to be executed the day and year first
written above.  The persons signing below
warrant their authority to sign the Agreement.

 

	
  ADVANCED CELL TECHNOLOGY, INC.

  	
  INFIGEN, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Michael West

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  Signature

  	
   

  	
   

  	
   

  	
  Signature

  
	
   

  	
  MICHAEL WEST

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Printed Name

  	
   

  	
   

  	
   

  	
  Printed Name

  
	
   

  	
  PRESIDENT

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  	
   

  	
   

  	
  Title

  
	
   

  	
  8-5-03

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Date

  	
   

  	
   

  	
   

  	
  Date

  

 

22

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