Document:

Exhibit 10.19

 

EXCLUSIVE LICENSE AGREEMENT (Infigen IP)

 

This
Exclusive License Agreement (“Agreement”) is made and entered into this 14th
day of May, 2004 (the “Effective Date”), by and between Advanced Cell
Technology, Inc., a Delaware corporation with offices located at One Innovation
Drive, Worcester, Massachusetts 01605 (“LICENSOR”), and PacGen Cellco, LLC, a
California limited liability company with offices located at 157 Surfview
Drive, Pacific Palisades, CA 90272 (“LICENSEE”) (LICENSOR and LICENSEE sometimes
hereinafter referred to individually as a “Party” and collectively as the “Parties”).

 

WITNESSETH

 

WHEREAS,
LICENSOR has licensed with sublicenseable interest the PATENT RIGHTS (as
defined below) and KNOW-HOW (as defined below); and

 

WHEREAS,
LICENSEE desires to obtain an exclusive worldwide license under LICENSOR’s
rights in such technology in the FIELD; and

 

WHEREAS,
LICENSOR is willing to grant such a license to LICENSEE upon the terms and
conditions set forth below; and

 

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

 

ARTICLE 1- DEFINITIONS

 

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

 

1.1                  “AFFILIATE” shall
mean, with respect to any PERSON, any other PERSON which directly or indirectly
controls, is controlled by, or is under common control with, such PERSON.  A PERSON shall be regarded as in control of
another PERSON if it owns, or directly or indirectly controls, at least fifty
percent (50%) of the voting stock or other ownership interest of the other
PERSON, or if it directly or indirectly possesses the power to direct or cause
the direction of the management and policies of the other PERSON by any means whatsoever.

 

1.2                  “FIELD” shall
mean the research, development, manufacture and selling of human cells for cell
therapy in the treatment of human (a) diabetes and (b) liver diseases; but
FIELD shall exclude applications involving the use of cells in the treatment of
tumors where the primary use of the cells is the destruction or reduction of
tumors and does not involve regeneration of tissue or organ function.

 

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1.3                  “KNOW-HOW” means
all compositions of matter, techniques and data and other know-how and
technical information including inventions (whether or not patentable),
improvements and developments, practices, methods, concepts, trade secrets,
documents, computer data, computer code, apparatus, clinical and regulatory
strategies, test data, analytical and quality control data, formulation,
manufacturing, patent data or descriptions, development information, drawings,
specifications, designs, plans, proposals and technical data and manuals and
all other proprietary information that is owned or controlled by LICENSOR as of
the Effective Date that relates to cloning technology or to any of the subject
matter described in or claimed by the PATENT RIGHTS and is relevant to the
FIELD.  By way of illustration, but not
in limitation, KNOW-HOW shall include commercial rights to any existing
potential research products, including reagents, developed by LICENSOR in the
course of its in-house research.  An
example of this is the proprietary culture medium developed by LICENSOR in the
course of the development of LICENSOR’s proprietary ooplasmic transfer
technology.

 

1.4                  “LICENSED
PROCESS” means any process or method, the research, development, use, practice,
sale, offer for sale, import or export of which cannot be performed without (i)
infringing, in whole or in part, one or more VALID CLAIMS of the PATENT RIGHTS,
or (ii) using or incorporating some portion of the LICENSED TECHNOLOGY.

 

1.5                  “LICENSED
PRODUCT” means any product that cannot be developed, manufactured, used, imported,
exported, or sold without (i) infringing, in whole or in part, one or more
VALID CLAIMS of the PATENT RIGHTS, or (ii) using or incorporating some portion
of the LICENSED TECHNOLOGY.

 

1.6      “LICENSED SERVICES” means any service, the
developing, using, performing, selling, offering for sale, importing or
exporting of which by LICENSEE would, but for the licenses granted to LICENSEE
in Article 2 of this Agreement, infringe a VALID CLAIM of the
PATENT RIGHTS in the country in which any such service is so developed, used,
performed, sold, offered for sale, imported or exported by LICENSEE.

 

1.7                  “LICENSED
TECHNOLOGY” shall mean, collectively, the licensed PATENT RIGHTS and licensed
KNOW-HOW.

 

1.8                  “NET SALES”
shall mean the amount billed or invoiced by LICENSEE for the sale or provision
of LICENSED PRODUCTS or LICENSED PROCESSES or LICENSED SERVICES less:

 

a)              discounts,
credits, allowances and rebates allowed;

 

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

 

c)              special
packaging, transportation and insurance costs incurred and directly related to
the sale of LICENSED PRODUCTS;

 

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d)             amounts
allowed or credited on returns; and

 

e)              uncollected
accounts.

 

1.9                  “NEURONAL &
HEART FIELD OPTION” means an option described in Section 15.18
hereof for LICENSEE to negotiate terms for license to the LICENSED TECHNOLOGY
for the field of diseases related to heart or neurodegenerative diseases

 

1.10            “PATENT RIGHTS” means
(a) the patent applications and patents identified on Exhibit A attached
hereto and any patents that issue on said applications and (b) any divisions,
continuations, extensions, reissues or reexaminations of any of the patents
identified in the foregoing clause (a).  The
Parties agree that Exhibit A may be revised from time to time after the
Effective Date to reflect changes thereto that result from the course of patent
prosecution.

 

1.11            “PERSON” shall mean an
individual, corporation, partnership, limited liability company, trust,
business trust, association, joint stock company, joint venture, pool,
syndicate, sole proprietorship, unincorporated organization, governmental
authority or any other form of entity not specifically listed herein.

 

1.12            “TERM” has the meaning
set forth in Section 9.1.

 

1.13            “TERRITORY” means the
entire world.

 

1.14            “VALID CLAIM” means a
claim of any issued and unexpired patent within the PATENT RIGHTS which has not
lapsed, become abandoned or been held permanently revoked, invalid, or
unenforceable by a decision of a court or administrative or government
authority or agency of competent jurisdiction from which no appeal can be or
has been taken within the time allowed for such appeal, or a claim of a pending
patent application included within the Licensed PATENT RIGHTS, which claim was
filed in good faith and has not been abandoned or finally disallowed without
the possibility of appeal or refiling of such application.

 

Additional
terms may be defined throughout this Agreement.

 

ARTICLE 2 - GRANT

 

2.1                  LICENSOR hereby
grants to LICENSEE, and LICENSEE hereby accepts, subject to the terms and
conditions hereof, a royalty bearing, exclusive, as to LICENSOR’S rights,
license in the TERRITORY in the FIELD and under the LICENSED TECHNOLOGY to (a)
research, develop, make, have made, use, sell, offer for sale, import and
export LICENSED PRODUCTS, (b) research, develop, use, practice, sell, offer for
sale, import and export LICENSED PROCESSES and (c) develop, use, perform, sell,
offer for sale, import and export LICENSED SERVICES.  By way of example, but not in limitation,
LICENSEE shall have the right to use LICENSED TECHNOLOGY within the FIELD for
the following purpose: to

 

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produce human
embryonic stem (ES) cells and to produce from those mammalian embryonic cells,
differentiated cells for human cell therapy within the FIELD, and to produce
pluripotent cells including ES cells, differentiated human cells for cell
therapy within the FIELD.

 

2.2                  LICENSEE shall
have the right to contract with third parties to (a) provide LICENSED PRODUCT
marketing and distribution services to LICENSEE on behalf of LICENSEE, (b)
provide LICENSED SERVICES marketing services to LICENSEE on behalf of LICENSEE
or (c) manufacture for LICENSEE LICENSED PRODUCTS for sale by LICENSEE or a
third party pursuant to the foregoing clause (a).

 

2.3                  LICENSEE shall
not have the right to grant sublicenses.

 

2.4                  Within thirty
(30) business days of the Effective Date, LICENSOR shall provide and transfer
to LICENSEE, in writing where practicable, all information and data relating to
the LICENSED TECHNOLOGY as may be reasonably necessary and requested to allow
LICENSEE to exploit the licenses granted hereunder.  LICENSOR shall work with LICENSEE in good
faith to provide the necessary training for up to a total of 60 days, at
LICENSOR’S facilities, necessary to allow LICENSEE to utilize the LICENSED
TECHNOLOGY.  LICENSEE shall pay to
LICENSOR all reasonable and customary expenses other than normal operating
expenses incurred by LICENSOR in providing such training and technology
transfer, including but not limited to fees incurred to request documents from
patent counsel or the United States Patent and Trademark Office.

 

2.5                  Notwithstanding
anything stated herein, nothing in this Agreement shall be construed as
preventing LICENSOR from practicing the LICENSED TECHNOLOGY within the FIELD
for non-commercial in-house research purposes.

 

2.6                  Notwithstanding
anything stated herein, nothing in this Agreement shall be construed as
preventing LICENSOR from practicing the LICENSED TECHNOLOGY within the FIELD
for non-commercial in-house research purposes. 
In the event that LICENSOR requests that LICENSEE deliver to LICENSOR
the LICENSED TECHNOLOGY or LICENSED PRODUCTS in the FIELD for research
purposes, LICENSEE shall make the LICENSED TECHNOLOGY or LICENSED PRODUCTS
available to LICENSOR on commercially reasonable terms.  In the event LICENSOR requires the use of
collaborators in its research, LICENSEE shall also make such LICENSED
TECHNOLOGY OR LICENSED PRODUCTS available to such collaborator if LICENSEE, in
its sole but reasonable discretion is satisfied that providing such items to a
collaborator will not endanger its exclusive commercial control of such items
or result in their use by a competitor.

 

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ARTICLE 3 - LICENSEE OBLIGATIONS

RELATING TO COMMERCIALIZATION

 

3.1                  LICENSEE shall
use its commercially reasonable and diligent efforts to bring one or more
LICENSED PRODUCTS, LICENSED PROCESSES or LICENSED SERVICES to market through an
active and diligent program for exploitation of the PATENT RIGHTS and to
continue active, diligent marketing efforts for one or more LICENSED PRODUCTS,
LICENSED PROCESSES or LICENSED SERVICES throughout the TERM of this Agreement.

 

3.2                  LICENSEE shall
maintain minimum R&D requirements to maintain exclusivity under this
Agreement.  Commencing 30 months
following the Effective Date hereof and until the launch of the first human
cell-based therapeutic product, LICENSEE shall be required to invest a minimum
of $400,000 per year in research and development of the FIELD covered by this
Agreement or other agreements with LICENSOR affecting the FIELD in order to
maintain the exclusive license rights granted hereunder.  In the event LICENSEE fails to perform this
minimum expenditure in R&D in the FIELD during the course of a calendar
year during the        above-mentioned period,
the license under this Agreement shall become nonexclusive and such minimum
expenditure for research and development shall be reduced to $200,000 per year.

 

3.3                  LICENSEE shall
maintain complete and accurate records of LICENSED PRODUCTS, LICENSED PROCESSES
and LICENSED SERVICES that are made, used, sold or performed by LICENSEE under
this Agreement.  Not later than April 1st
of each year following the Effective Date, LICENSEE shall furnish LICENSOR with
a summary report on the progress of its efforts during the prior year to
develop and commercialize LICENSED PRODUCTS, LICENSED PROCESSES or LICENSED
SERVICES, including without limitation research and development efforts,
efforts to obtain regulatory approval, marketing efforts (including LICENSED
PRODUCTS, LICENSED PROCESSES and LICENSED SERVICES made, used, sold or
performed) and sales figures, provided that such reports shall be deemed
Confidential Information (as defined in Section 10.1 herein)
subject to the provisions of Article 10 of this Agreement.

 

3.4                  In the event
that LICENSOR determines that LICENSEE has not fulfilled its obligations under
this Article 3, LICENSOR shall furnish LICENSEE with written notice
of such determination.  Within thirty
(30) days after receipt of such notice, LICENSEE shall (i) fulfill the relevant
obligation, (ii) negotiate with LICENSOR a mutually acceptable schedule of
revised obligations, or (3) if LICENSEE disputes the alleged failure to fulfill
its obligations, it shall promptly seek appropriate judicial determination of
the matter and diligently pursue such action to a final determination with all
appropriate speed; failing which, LICENSOR shall have the right, immediately
upon written notice to LICENSEE, to terminate this Agreement as provided in Section 9.2
hereof.

 

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ARTICLE 4 - CONSIDERATION

 

4.1                                 Initial
Payment.  In partial consideration of
the license granted to LICENSEE from LICENSOR in Article 2 of this
Agreement, LICENSEE agrees to pay a “License Fee” to LICENSOR $25,000 in a
convertible promissory note in the form attached hereto as Exhibit C.

 

4.2                                 Royalties.

 

a)              In
partial consideration of the license in the FIELD granted by LICENSOR to
LICENSEE in Article 2 of this Agreement, LICENSEE agrees to pay to
LICENSOR an earned royalty equal to six percent (6%) of the NET SALES in the
FIELD made, used, sold, imported, exported or performed by LICENSEE in the
TERRITORY.

 

b)             No
multiple royalties shall be payable because any LICENSED PRODUCT, LICENSED
PROCESS or LICENSED SERVICE in the FIELD, its manufacture, use, lease, sale or
performance are or shall be covered by more than one patent or patent
application within the PATENT RIGHTS.

 

c)              The
obligation of LICENSEE to pay royalties hereunder shall terminate for each
country in the TERRITORY concurrently with the expiration or termination of the
last applicable VALID CLAIM within the PATENT RIGHTS in such country in which
the LICENSED PRODUCT, LICENSED PROCESS or LICENSED SERVICE is, (as applicable),
used, practiced, performed, sold, offered for sale, imported, exported or
manufactured.

 

4.3                                 Minimum
Royalties.  Within 2 business days
from the Effective Date hereof, LICENSEE shall pay to LICENSOR a minimum
royalty fee of $25,000 in cash or by wire transfer.  In addition, commencing 12 months following
the Effective Date, LICENSEE shall pay to LICENSOR additional minimum royalty
fees equal to the difference between total Royalties actually paid in the
preceding 12 months and the following minimum amounts:

 

At 12 months, $5,000

At 24 months, $5,000

At 36 months, $5,000

Annually thereafter, $10,000.

 

4.4                                 Stacking
Royalties.  With the exception of
minimum royalties due to LICENSOR, if LICENSEE or its Affiliates are required
to pay royalties relating to any additional intellectual property from LICENSOR
in order to exercise its rights hereunder to make, have made, use or sell any
Product, then LICENSEE shall have the right to credit a pro-rated portion of
such royalty payments against the royalties owing to LICENSOR under Section 4.2
of this Agreement with respect to sales of such Product such that in no event
shall the total of royalty payments that are

 

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due to LICENSOR in
such royalty period exceed the payments payable under Section 4.2
above.  Prorations shall be made in the same
manner as specified for combination products under Section 4.7
below.

 

4.5                                 Milestone
Payments.  Upon the launch of a
commercial therapeutic product based on the LICENSED TECHNOLOGY, LICENSEE shall
pay additional Milestone Payments totaling $1,750,000 on the following
schedule:

 

$250,000
within 30 days following the launch of the first commercial Product;

$500,000
upon reaching $5,000,000 in sales;

$1,000,000
upon reaching $10,000,000 in sales.

 

4.6                                 Stacking
Milestone Payments.  The milestone
payments shall be in addition to any royalties specified elsewhere in this Article 4.
 If LICENSEE is obligated to pay or has
paid to LICENSOR similar Milestone Payments under another license agreement
with respect to the FIELD, then LICENSEE shall have the right to pro-rate such
Milestone Payments against the Milestone Payments owing to LICENSOR under this
Agreement such that in no event shall the total of all Milestone Payments due
from LICENSEE to LICENSOR exceed the payments payable under Section 4.5.  Pro-rating of payments shall be made in the
ratio of the minimum royalties payable under this Agreement to the minimum
royalties payable under any other agreement covered hereby under which
Milestone Payments are owed.

 

4.7                                 Combination
Product.  In the event a Product is
sold in a combination product with other devices or biologically active
components, NET SALES, for purposes of royalty payments on the combination
product, shall be calculated by multiplying the NET SALES of that combination
by the fraction A/B, where A is the gross selling price of the Product sold
separately and B is the gross selling price of the combination product.  In the event that no such separate sales are
made by LICENSEE or its Affiliates, NET SALES for royalty determination shall
be calculated by multiplying NET SALES of the combination by the fraction
C/(C+D), where C is the fully allocated cost of the Product and D is the fully
allocated cost of such other biologically active components.

 

4.8                                 Payments
in U.S. Currency.  All payments due under
this Agreement shall be paid in cash to LICENSOR and all payments shall be made
in United States currency.  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.

 

4.9                                 Taxes.
 Subject to the limits of Section 1.8
hereof, all payments due hereunder shall be paid in full without deduction of
taxes or other fees which may be imposed by any government and which shall be
paid by LICENSEE; provided, however, that any withholding tax required to be
withheld by LICENSEE on royalty payments under the laws of any country in the
TERRITORY on behalf of LICENSOR will be timely paid by LICENSEE to the
appropriate governmental authority, and LICENSEE will furnish LICENSOR with
proof of payment of such

 

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tax.  Any such tax actually withheld may be deducted
from royalty payments due to LICENSOR under this Agreement.  If at any time legal restrictions prevent the
prompt remittance of part or all of any payments owed by LICENSEE to LICENSOR
hereunder with respect to any country in the TERRITORY, payment shall be made
through any lawful means or methods that may be available, and as LICENSEE
shall reasonably determine is appropriate.

 

4.10                           Overdue
Payments.  Any payments to be made by
LICENSEE hereunder that are not paid on or before the date such payments are
due under this Agreement shall 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.

 

ARTICLE 5 - REPORTS AND RECORDS

 

5.1                                 LICENSEE
shall keep full, true and accurate books of account containing all particulars
that may be necessary for the purpose of showing the amounts payable to
LICENSOR hereunder and to enable the reports provided under Section 5.2
to be verified.  Said books of account
shall be kept at LICENSEE’S principal place of business.  Said books and the supporting data shall be
open upon reasonable advance notice (but not less than five (5) business days
notice and no more frequently than once per calendar year) for three (3) years
following the end of the calendar year to which they pertain, to the inspection
of LICENSOR or its agents for the purpose of verifying LICENSEE’S royalty
statement or compliance in other respects with this Agreement.  If any such audit determines an error in any
royalty payment, LICENSEE shall pay to LICENSOR, within thirty (30) days of the
discovery of the error, (a) all deficiencies in royalty payments, (b) interest
on such deficiencies from the date such royalty was due until the date paid at
the rate set forth in Section 4.10 above, and (c) if such error is
in excess of five percent (5%) of any royalty payment, the cost of the audit.  In all other cases, the costs of the audit
shall be paid for by LICENSOR.  All
information disclosed pursuant to an audit shall be treated as Confidential
Information (as defined in Section 10.1 herein) and shall not be
disclosed to any third party or used for any purpose other than to determine
the correctness of LICENSEE’s royalty statement or compliance in other respects
with this Agreement.

 

5.2                                 After
the first commercial sale of a LICENSED PRODUCT or LICENSED PROCESS, LICENSED
SERVICE, LICENSEE, within forty-five (45) days after March 31, June 30,
September 30 and December 31 of each year, shall deliver to LICENSOR
a true and accurate report, giving such particulars of the business conducted
by LICENSEE during the preceding       three-month
period under this Agreement as shall be pertinent to a royalty accounting
hereunder.  Without limiting the
generality of the foregoing, these reports shall include at least the
following;

 

a)              the
number of LICENSED PRODUCTS manufactured and sold by LICENSEE;

 

b)             total
billings and the amounts actually received for LICENSED PRODUCTS

 

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sold
by LICENSEE;

 

c)              an
accounting for all LICENSED PROCESSES or LICENSED SERVICES used in the
provision of services to others or sold by LICENSEE;

 

d)             the
deductions applicable as provided in Section 1.9; and

 

e)              the
names and addresses of all parties making LICENSED PRODUCTS on behalf of
LICENSEE.

 

The
reports shall provide the above-identified information by product, process, or
service type.

 

5.3                                 With
each such report submitted, LICENSEE shall pay to LICENSOR the royalties due
and payable for such three-month period.  If no royalties shall be due, LICENSEE shall
so report.

 

ARTICLE 6 - PATENT PROSECUTION

 

LICENSOR
shall be solely responsible for the continued prosecution of pending patent
applications included in the PATENT RIGHTS and the issuance of such
applications after allowance, to the extent that it has such prosecution
rights.  The prosecution, filing and
maintenance of all patents and applications shall be the primary responsibility
of LICENSOR, to the extent that it has such prosecution rights.  LICENSEE agrees to cooperate fully with
LICENSOR, as requested by LICENSOR and at LICENSOR’s expense, in the
preparation, filing, prosecution, and maintenance of the patent applications
and patents included in the PATENT RIGHTS.

 

ARTICLE 7 - PROSECUTION OF INFRINGERS AND DEFENSE
OF PATENT RIGHTS

 

The
Parties agree to notify each other in writing of any actual or threatened
infringement by a third party of the PATENT RIGHTS or of any claim of
invalidity, unenforceability, or non-infringement of the PATENT RIGHTS.  LICENSOR shall have the sole responsibility to
prosecute or defend such claims, as applicable.  LICENSEE shall, if requested, provide
reasonable assistance to LICENSOR in connection with the prosecution or defense
of such claims.

 

ARTICLE 8 - INDEMNIFICATION

 

8.1                                 Indemnification
of the LICENSOR.  LICENSEE shall be
responsible for and shall indemnify, defend, and hold harmless LICENSOR, its
agents, attorneys, representatives, third

 

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party beneficiaries and
their respective heirs, executors, successors and assigns (collectively, the “LICENSOR
Indemnitees”) from and against all liabilities of any kind whatsoever,
including legal expenses and reasonable attorneys’ fees, incurred or imposed
upon any of the LICENSOR Indemnitees in connection with or as a consequence of
any claims (including third party claims), suits, actions, demands or judgments
arising out of the death of or injury to any person or persons or out of any
damage to property resulting from the development, production, manufacture,
sale, use, performance, rendering, consumption or advertisement of the LICENSED
PRODUCT(s) and/or LICENSED PROCESS(es), LICENSED SERVICE(s), or arising from
any obligation, act or omission performed or failed to be performed hereunder,
or from a breach of any representation or warranty of LICENSEE hereunder unless
and to the extent that such liability arises solely from any action of LICENSOR
or any of its Affiliates.  If the
exercise of LICENSEE’s rights under this Agreement in any country in the
TERRITORY is the subject of a bona fide claim by a third party, filed in a
court of competent jurisdiction after the date hereof, that the exercise of
such rights infringes or conflicts with any intellectual property rights of
such third party (a “Third Party Infringement Claim”), then LICENSEE shall not
have any of the rights granted herein in such country and shall have no
obligation to pay LICENSOR any further payments under Article 4 of
this Agreement with respect to any country of the TERRITORY until such claim is
resolved by proper adjudication or settlement permitting LICENSEE to exercise
LICENSEE’s rights under this Agreement in the applicable country of the
TERRITORY.  Notwithstanding anything
herein to the contrary, LICENSOR covenants that it will not (a) assert or bring
any suit, action, claim or other proceeding against LICENSEE based on, in whole
or in part, LICENSEE’s exercise of LICENSEE’s rights, in accordance with the
terms and conditions of this Agreement, with respect to the LICENSED TECHNOLOGY
and/or (b) join in any third party suit, action, claim or other proceeding
against LICENSEE based on, in whole or in part, any intellectual property
rights (including without limitation, patent rights and/or know how) owned by
the applicable third party, so long as LICENSEE is not in violation of this
Agreement.

 

8.2                  Indemnification
of the LICENSEE.  LICENSOR shall be
responsible for and shall indemnify, defend, and hold harmless LICENSEE and the
officers, directors, shareholders, employees, agents, attorneys,
representatives, and Affiliates, and their respective heirs, executors,
successors and assigns.  (the “LICENSEE
Indemnitees”) from and against all liabilities of any kind whatsoever,
including legal expenses and reasonable attorneys’ fees, incurred or imposed
upon any of the LICENSEE Indemnitees in connection with or as a consequence of
any claims (including third party claims), suits, actions, demands or judgments
arising out of, directly or indirectly, or in any way relating to: (a) any
breach by LICENSOR of any representation, warranty, covenant or obligation set
forth in this Agreement; or (b) arising from LICENSOR’s ownership, management,
control, use or disposition of the LICENSED TECHNOLOGY unless and to the extent
that such liability arises solely from any action of LICENSEE or any of its
Affiliates after the Effective Date.

 

8.3                                 Demands
for Third Party Claims.  Each
indemnified Party hereunder (an “Indemnified Party”) agrees that promptly upon
its discovery of facts giving rise to a claim for

 

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indemnity under this
Agreement, including the receipt of any demand, assertion, claim, action or
proceeding, judicial or otherwise, by any third party (being referred to herein
as a “Claim”), with respect to any matter as to which it claims to be entitled
to indemnity under the provisions of this Agreement, it will give prompt notice
thereof in writing to the Indemnifying Party (the “Indemnifying Party”),
together with a statement of such information respecting any of the foregoing
as it shall have.  Such notice shall
include a formal demand for indemnification under this Agreement.

 

8.4                                 Right
to Contest and Defend.  The
Indemnifying Party shall contest and defend, at its sole cost and expense, by
all appropriate legal proceedings any Claim with respect to which it is called
upon to indemnify the Indemnified Party under the provisions of this Agreement;
provided, that notice of the intention to so contest shall be delivered by the
Indemnifying Party to the Indemnified Party as soon as reasonably possible
after (but no later than twenty [20] days from) the date of receipt by the
Indemnifying Party of notice by the Indemnified Party of the assertion of the
Claim.  Any such contest may be conducted
in the name and on behalf of the Indemnifying Party or the Indemnified Party as
may be appropriate.  Such contest shall
be conducted by reputable counsel employed by the Indemnifying Party, but the
Indemnified Party shall have the right but not the obligation to participate in
such proceedings and to be represented by counsel of its own choosing at its
sole cost and expense.  The Indemnifying
Party shall have full authority to determine all action to be taken with
respect thereto; provided, however, that the Indemnifying Party will not have
the authority to subject the Indemnified Party to any obligation whatsoever
(whether financial or the imposition of equitable or injunctive relief), other
than the performance of purely ministerial tasks or obligations not involving
material expense (for which the Indemnified Party shall be reimbursed).  If the Indemnifying Party does not elect to
contest any such Claim, the Indemnifying Party shall be bound by the result
obtained with respect thereto by the Indemnified Party.

 

8.5                                 Cooperation.
 If requested by the Indemnifying Party,
the Indemnified Party agrees to cooperate with the Indemnifying Party and its
counsel in contesting any Claim that the Indemnifying Party elects to contest
or, if appropriate, in making any counterclaim against the PERSON asserting the
Claim, or any cross-complaint against any PERSON, and the Indemnifying Party
will reimburse the Indemnified Party for any expenses incurred by it in so
cooperating.

 

8.6                                 Right
to Participate.  The Indemnified
Party agrees to afford the Indemnifying Party and its counsel the opportunity
to be present at, and to participate in, conferences with any PERSON, including
governmental authorities, asserting any Claim against the Indemnified Party or
conferences with representatives of or counsel for such PERSON.

 

8.7                                 Payment
of Damages.  The Indemnifying Party
shall pay to the Indemnified Party in immediately available funds any amounts
to which the Indemnified Party may become entitled by reason of the provisions
of this Agreement, such payment to be made within five (5) days after

 

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any such amounts are
finally determined either by mutual agreement of the Parties hereto or pursuant
to the final non-appealable judgment of a court of competent jurisdiction.

 

8.8                                 Independent
Indemnities.  The Parties acknowledge
and agree that each of the indemnities under Sections 8.1 and 8.2 may be
relied upon independently.

 

8.9                                 Insurance.
 LICENSEE and LICENSOR mutually agree to
maintain insurance or self-insurance that is reasonably adequate to fulfill any
potential obligation to the Indemnified Parties.  LICENSEE and LICENSOR shall continue to
maintain such insurance or self-insurance during the term of this Agreement and
after the expiration or termination of this Agreement for a period of five (5)
years.  Each Party shall provide to the
other Patty, upon request, proof of any such insurance policy maintained by
such Party.

 

ARTICLE 9 - TERMINATION

 

9.1                                 The
term of this Agreement (“TERM”) shall commence on the Effective Date and continue
until the expiration of the last VALID CLAIM within the PATENT RIGHTS to
expire, unless sooner terminated as provided in this Article 9;
provided that LICENSEE’s obligation to pay royalties on NET SALES in any
country will terminate pursuant to Subsection 4.2(c) (subject to
LICENSEE’s obligations under Section 9.4 herein).

 

9.2                                 If
either Party commits a material breach of a material term of this Agreement
(including any failure to make any payment due under this Agreement), the
non-breaching Party shall have the right to terminate this Agreement effective
on thirty (30) days prior written notice to the Party in breach, unless such
breach is cured prior to the expiration of such thirty (30) day period.

 

9.3                                 LICENSEE
shall have the right to terminate this Agreement at any time on thirty (30)
days prior notice to LICENSOR, and upon payment of all amounts due LICENSOR
through the effective date of the termination.

 

9.4.                              Notwithstanding
anything herein to the contrary, in the event that this Agreement is terminated
by LICENSOR pursuant to Section 9.2 or by LICENSEE pursuant to Sections
9.2 or 9.3, LICENSEE shall retain a license to rights granted in Article 2
to the extent reasonably necessary to sell any LICENSED PRODUCTS existing or
under production and to perform LICENSED PROCESSES or LICENSED SERVICES related
to such LICENSED PRODUCTS or that are in process, subject to the terms of this
Agreement (including without limitation the obligation to pay royalties under Article 4),
provided that LICENSEE shall complete and sell all such work-in-progress and
inventory within six (6) months after the effective date of termination.

 

9.5                                 Upon
the expiration of the TERM of this Agreement LICENSEE shall have a fully
paid-up, non-exclusive, irrevocable, royalty free license under the rights
granted in Article 2.

 

12

 

9.6                                 Nothing
herein shall be construed to release either Party from any obligation that
accrued prior to expiration or any termination of this Agreement.  The following provisions shall survive any
termination or any expiration of the TERM of this Agreement: this Section 9.6
and Articles/Sections 1, 4, 5, 8 9.4, 10, 11, 12, 13, 15.1, 15.2, 15.5, 15.6,
15.7, 15.8, 15.10, 15.15 and 15.16, and any other provision which by its
nature is intended to survive any such termination.

 

ARTICLE 10 - CONFIDENTIALITY AND NON-DISCLOSURE

 

10.1                           Confidential
Information; Non-Disclosure.  “Confidential
Information” shall mean any technical, business, financial, customer or other
information disclosed by one Party (the “Disclosing Party”) to the other Party
(the “Receiving Party”) pursuant to this Agreement which is marked “Confidential”
or “Proprietary,” or which, under all of the given circumstances, ought
reasonably to be treated as confidential information of the Disclosing Party.  Such information may be disclosed in oral,
visual or written form (including magnetic, optical or other media).  Except as expressly provided in Section 10.2
below, each Party’s Confidential Information specifically includes without
limitation the respective Party’s business plans and business practices, the
terms of this Agreement, scientific knowledge, research and development or know-how,
processes, inventions, techniques, formulae, products and product plans,
business operations, customer requirements, designs, sketches, photographs,
drawings, specifications, reports, studies, findings, data, plans or other
records, biological materials, software, margins, payment terms and sales
forecasts, volumes and activities, designs, computer code, technical
information, costs, pricing, financing, business opportunities, personnel, and
information of LICENSOR or LICENSEE relating to the LICENSED PROCESSES,
LICENSED PRODUCTS or LICENSED SERVICES whether or not such information is
marked or identified provided that the Disclosing Party provides notice in
writing reasonably identifying such Confidential Information within 30 days of
disclosure.  Except to the extent
expressly authorized by this Agreement or by other prior written consent by the
Disclosing Party, the Receiving Party, during the term of this Agreement, and
thereafter, shall: (i) treat as confidential all Confidential Information of
the other Party, (ii) use Confidential Information only for exercising the
rights and fulfilling the obligations set forth in this Agreement, (iii)
implement reasonable procedures to prohibit the disclosure, unauthorized
duplication, misuse or removal of the Disclosing Party’s Confidential
Information; (iv) not disclose Confidential Information to any third party, and
(v) only disclose the Confidential Information to (a) those of its employees
who have a need to know Confidential Information in order to exercise the
rights and fulfill the obligations set forth in this Agreement and (b) legal
and professional advisors and existing and potential investors and their legal
and professional advisors, each of which is bound by a written agreement (or in
the case of attorneys or other professional advisors, formal ethical duties)
requiring such advisors and investors to treat, hold and maintain such
Confidential Information in accordance with the terms and conditions of this
Agreement, or (c) recipients of offering documents in connection with any
offering of securities where such disclosure is, in the opinion of counsel for
the Disclosing Party, reasonably required to comply with the investment
disclosure laws of any applicable jurisdiction.

 

13

 

Without limiting the
foregoing, the Receiving Party shall protect the Disclosing Party’s
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.

 

10.2                           Exceptions.
 The Receiving Party shall have no
obligation or liability to the Disclosing Party with regard to any Confidential
Information of the Disclosing Party: (i) that was publicly known and available
at the time it was disclosed or becomes publicly known and available through no
fault, action, or inaction of the Receiving Party; (ii) was known to the
Receiving Party, without restriction, at the time of disclosure as shown by the
files of the Receiving Party in existence 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
disclosing party’s Confidential Information, provided, that the Receiving Party
can demonstrate such independent development by documented evidence prepared
contemporaneously with such independent development; (v) is disclosed pursuant
to the order or requirement of a court, administrative agency, or other
governmental body, provided that the Receiving Party shall provide prompt
notice thereof and reasonable assistance to the Disclosing Party to enable the
Disclosing Party to seek a protective order or otherwise prevent such disclosure,
and provided further that such disclosure is limited to the extent necessary to
comply with such order and the information shall otherwise be treated as
Confidential Information; or (vi) that is provided to the Receiving Party by an
independent third party without violating any confidentiality obligation to the
Disclosing Party.

 

10.3                           Injunctive
Relief.  LICENSOR and LICENSEE
acknowledge and agree that any breach of the confidentiality obligations
imposed by this Article 10 will constitute immediate and irreparable harm
to the Disclosing Party and/or its 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.  The Disclosing Party shall also be entitled to
receive from the Receiving Party the costs of enforcing this Article 10,
including reasonable attorneys’ fees and expenses of litigation.

 

10.4                           Termination.
 Upon termination or expiration of this
Agreement, or upon the request of the Disclosing Party at any time, the
Receiving Party shall promptly return to the Disclosing Party, at its request,
all copies of Confidential Information received from the Disclosing 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 Disclosing Party in any form.  Notwithstanding the foregoing to the contrary,
LICENSEE shall have no obligation (even upon a request by LICENSOR) to return
or destroy any KNOW-HOW (including tangible embodiments of KNOW-HOW) during the
TERM of this Agreement.

 

10.5                           Survival.
 The obligations of LICENSOR and LICENSEE
under this Article 10 shall survive any expiration or termination
of this Agreement.

 

14

 

ARTICLE 11 - PAYMENTS,
NOTICES, AND OTHER COMMUNICATIONS

 

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

 

In
the case of LICENSOR:

Advanced
Cell Technology, Inc.

One
Innovation Drive

Worcester,
MA 01605

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

 

With
a copy to:

Pierce
Atwood

One
Monument Square

Portland,
ME 04101

Attention:
William L. Worden, Esq.

 

In
the case of LICENSEE:

PacGen
Cellco, LLC.

157
Surfview Drive

Pacific
Palisades, CA 90272

Attention:
Kenneth Aldrich

 

With
a copy to:

Gray
Cary Ware & Freidenrich

4365
Executive Drive, Suite 1100

San
Diego, CA 92121-2133

Attention:
Lisa Haile

 

ARTICLE 12 - RESPRESENTATIONS AND WARRANTIES OF
LICENSOR

 

As an
inducement to LICENSEE to enter into and perform this Agreement, LICENSOR
represents and warrants to LICENSEE as follows:

 

12.1                           Title
to LICENSED TECHNOLOGY; Encumbrances.  LICENSOR has good and valid title or valid
licenses (with the right of sublicense) to the LICENSED TECHNOLOGY.

 

12.2                           No
Violations.  The execution, delivery
and performance of this Agreement by LICENSOR and the consummation by LICENSOR
of the transactions contemplated hereby does

 

15

 

not,: (a) violate any
statute, ordinance, rule or regulation applicable to LICENSOR or by which any
of the LICENSED TECHNOLOGY may be bound; (b) violate any order, judgment or
decree of any court or of any Governmental Authority or regulatory body, agency
or authority applicable to LICENSOR or by which any of the LICENSED TECHNOLOGY
may be bound; (c) require any filing by LICENSOR with, or require LICENSOR to
obtain any permit, consent or approval of, or require LICENSOR to give any
notice to, any Governmental Authority or regulatory body, agency or authority;
or (d) result in a violation or breach by LICENSOR of, conflict with,
constitute a default by LICENSOR (or give rise to any right of termination,
cancellation, payment or acceleration) under or result in the creation of any
Encumbrance upon any of the LICENSED TECHNOLOGY.

 

12.3          Litigation.
 Except as set forth in Exhibit C,
there is no action, suit, proceeding at law or in equity, arbitration or
administrative or other proceeding by or before (or any investigation by) any
governmental or other instrumentality or agency, pending, or threatened,
against or affecting the LICENSED TECHNOLOGY, and LICENSOR does not know of any
valid basis for any such action, proceeding or investigation.  To the knowledge of LICENSOR, there are no
such suits, actions, claims, proceedings or investigations pending or
threatened, seeking to prevent or challenge the transactions contemplated by
this Agreement.

 

12.4            Disclosure.  Neither these representations and warranties
made by LICENSOR pursuant to this Agreement nor any of the exhibits, schedules
or certificates attached hereto or delivered in accordance with the terms
hereof knowingly contains any misstatement of fact or omits any statement of
fact necessary in order to make the statements contained herein and therein not
misleading in light of the circumstances under which they were made.

 

12.5            Copies of Documents.
 LICENSOR has caused to be made available
for inspection and copying by LICENSEE and its advisers, true, complete and correct
copies of all documents in LICENSOR’s possession referred to in any schedule attached
hereto.

 

12.6            Broker’s or Finder’s
Fees.  No agent, broker, person or
firm acting on behalf of LICENSOR is, or will be, entitled to any fee,
commission or broker’s or finder’s fees for which the LICENSEE may be liable in
connection with this Agreement or any of the transactions contemplated hereby.

 

12.7            LICENSED TECHNOLOGY.

 

(a)              Except
as set forth on Exhibit D, LICENSOR, LICENSOR is not aware of any
interference, infringement, misappropriation, or other conflict with any
intellectual property rights of third parties, and LICENSOR has never received
any charge, complaint, claim, demand, or notice alleging any such interference,
infringement, misappropriation, or violation (including any claim that LICENSOR
must license or refrain from using any intellectual property rights of any
third party).  To the knowledge of
LICENSOR, no third party has

 

16

 

interfered
with, infringed upon, misappropriated, or otherwise come into conflict with any
of the LICENSED TECHNOLOGY.

 

(b)             Exhibit
A identifies each patent or registration which has been issued to LICENSOR
with respect to any of the LICENSED TECHNOLOGY and identifies each pending
patent application or application for registration which LICENSOR has made with
respect to any of the LICENSED TECHNOLOGY.  LICENSOR has made available to LICENSEE
correct and complete copies of all such patents, registrations and applications
(as amended to-date) in LICENSOR’s possession and has made available to
LICENSEE correct and complete copies of all other written documentation in
LICENSOR’s possession evidencing ownership and prosecution (if applicable) of
each such item.

 

(c)              Exhibit
A identifies each item of LICENSED TECHNOLOGY that LICENSOR uses pursuant
to license, sublicense, agreement, or permission.  LICENSOR has made available to LICENSEE
correct and complete copies of all such licenses, sublicenses, agreements,
patent prosecution files and permissions (as amended to-date) in LICENSOR’s
possession.  With respect to each item of
LICENSED TECHNOLOGY required to be identified in Exhibit A and to the
knowledge of LICENSOR: (i) the license, sublicense, agreement, or permission
covering the item is legal, valid, binding, enforceable, and in full force and
effect; (ii) the license, sublicense, agreement, or permission will continue to
be legal, valid, binding, enforceable, and in full force and effect on
identical terms following the consummation of the transactions contemplated
hereby; (iii) no Party to the license, sublicense, agreement, or permission is
in breach or default, and no event has occurred which with notice or lapse of
time would constitute a breach or default or permit termination, modification,
or acceleration thereunder; (iv) no party to the license, sublicense,
agreement, or permission has repudiated any provision thereof; (v) the
underlying item of LICENSED TECHNOLOGY is not subject to any outstanding lien
or encumbrance, injunction, judgment, order, decree, ruling, or charge; (vi) no
action, suit, proceeding, hearing, investigation, charge, complaint, claim, or
demand is pending or is threatened which challenges the legality, validity, or
enforceability of the underlying item of LICENSED TECHNOLOGY; and (vii)
LICENSOR has not granted any sublicense or similar right to the LICENSED
TECHNOLOGY within the FIELD.

 

12.8            Survival of
Representations and Warranties.

 

(a)              Except
as otherwise provided herein, notwithstanding any investigation at any time
made by or on behalf of any Party hereto, the representations and warranties
set forth herein and in any certificate delivered in connection

 

17

 

herewith
with respect to any of those representations and warranties will survive the
Effective Date until the longer to occur of: (i) two (2) years or (ii) the
expiration of the applicable statutes of limitation, including all periods of
extension and tolling whereupon they will terminate and expire.

 

(b)             After
a representation and warranty has expired, as provided in Subsection 12.8(a),
no claim for claims or costs may be made or prosecuted by any Person who would
have been entitled to claims or costs on the basis of that representation and
warranty prior to its termination and expiration, provided that no claim
presented in writing for claims or costs to the Person or Persons from which or
whom those damages are sought on the basis of that representation and warranty
prior to its termination and expiration will be affected in any way by that
termination and expiration.

 

12.9            EXCEPT AS OTHERWISE
EXPRESSLY SET FORTH IN THIS AGREEMENT, LICENSOR, ITS DIRECTORS, OFFICERS,
EMPLOYEES, AND AFFILIATES MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OF
ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF PATENT RIGHTS,
ISSUED OR PENDING, AND THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT
DISCOVERABLE.  NOTHING IN THIS AGREEMENT
SHALL BE CONSTRUED AS A REPRESENTATION MADE OR WARRANTY GIVEN BY LICENSOR THAT
THE PRACTICE BY LICENSEE OF THE LICENSE GRANTED HEREUNDER SHALL NOT INFRINGE
THE PATENT RIGHTS OF ANY THIRD PARTY.

 

ARTICLE 13—REPRESENTATIONS AND WARRANTIES OF
LICENSEE.

 

LICENSEE
represents and warrants to LICENSOR as follows:

 

13.1            Existence and Good
Standing: Power and Authority. 
LICENSEE is a limited liability company duly organized, validly existing
and in good standing under the laws of the state of California.  LICENSEE has full corporate power and
authority to make, execute, deliver and perform this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.  The execution, delivery and performance of
this Agreement by LICENSEE and the consummation by it of the transactions
contemplated hereby, have been duly authorized and approved by all required
corporate action of LICENSEE and no other action on the part of LICENSEE is
necessary to authorize the execution, delivery and performance of this
Agreement by LICENSEE and the consummation of the transaction contemplated
hereby.  This Agreement has been duly
executed and delivered by LICENSEE and is a valid and binding obligation of
LICENSEE enforceable against it in accordance with its terms, except to the
extent that its enforceability may be subject to applicable bankruptcy,
insolvency, reorganization,

 

18

 

moratorium and
similar laws affecting the enforcement of creditors’ rights generally and by
general equitable principles.

 

13.2            Authorization and
Validity of Agreement.  LICENSEE has
full power and authority, including full corporate power and authority, to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby.  Without limiting the foregoing, the execution,
delivery and performance of this Agreement by LICENSEE and the consummation by
it of the transactions contemplated hereby, have been duly authorized and
approved by the members and managers of LICENSEE, and no other action on the
part of LICENSEE or its officers, directors or shareholder is necessary to
authorize the execution, delivery and performance of this Agreement by LICENSEE
and the consummation of the transactions contemplated hereby.  This Agreement has been duly executed and
delivered by LICENSEE and is a valid and binding obligation of LICENSEE
enforceable against it in accordance with its terms, except to the extent that
its enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles.

 

13.3            Consents and
Approvals: No Violations.  The
execution, delivery and performance of this Agreement by LICENSEE and the
consummation by LICENSEE of the transactions contemplated hereby will not, with
or without the giving of notice or the lapse of time or both: (a) violate,
conflict with, or result in a breach or default under any provision of the
organizational documents of LICENSEE; (b) violate any statute, ordinance, rule
or regulation applicable to LICENSEE, (c) violate any order, judgment or decree
of any court or of any governmental or regulatory body, agency or authority
applicable to LICENSEE or by which any of the LICENSED TECHNOLOGY may be bound;
or (d) require any filing by LICENSEE with, or require LICENSEE to obtain any
permit, consent or approval of, or require LICENSEE to give any notice to, any
governmental or regulatory body, agency or authority, except filings, if any,
which may be required under the “Blue Sky” laws of Massachusetts or as may be
required in the future to comply with governmental regulations governing the
production and sale of products by LICENSEE as it conducts its business.

 

13.4            Survival of
Representations and Warranties.

 

(a)              Except
as otherwise provided herein, notwithstanding any investigation at any time
made by or on behalf of any Party hereto, the representations and warranties
set forth herein and in any certificate delivered in connection herewith with
respect to any of those representations and warranties will survive the
Effective Date until the longer to occur of: (i) two (2) years or (ii) the
expiration of the applicable statutes of limitation, including all periods of
extension and tolling whereupon they will terminate and expire.

 

(b)             After
a representation and warranty has expired, as provided in Subsection 13.4(a),
no claim for claims or costs may be made or prosecuted by

 

19

 

any
Person who would have been entitled to claims or costs on the basis of that
representation and warranty prior to its termination and expiration, provided
that no claim presented in writing for claims or costs to the Person or Persons
from which or whom those damages are sought on the basis of that representation
and warranty prior to its termination and expiration will be affected in any
way by that termination and expiration.

 

ARTICLE 14 – LIMITATION OF LIABILITY

 

EXCEPT
FOR ANY LIABILITY TO ANY THIRD PARTIES PURSUANT TO ARTICLE 8 OR TO A PARTY
PURSUANT TO ARTICLES 12 AND 13 OF THIS AGREEMENT, IN NO EVENT SHALL LICENSOR OR
LICENSEE OR THEIR, ITS DIRECTORS, OFFICERS, EMPLOYEES OR AFFILIATES BE LIABLE
FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGE
OR INJURY TO PROPERTY AND LOST PROFITS, REGARDLESS OF WHETHER LICENSOR OR
LICENSEE SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT SHALL
KNOW OF THE POSSIBILITY OF SUCH DAMAGES.

 

ARTICLE 15 - MISCELLANEOUS PROVISIONS

 

15.1            CORPORATE
PARTNERSHIPS.  In the event LICENSEE
enters into a corporate partnership for the joint development of any of the
LICENSED TECHNOLOGY, then payments required hereunder shall not include funds
provided for sponsored research or equity investments by any third party so
long as such payments do not constitute a majority of funds transferred by such
third party.  However if the sponsored
research involves fees in excess of industry standard reimbursement for FTEs or
any equity investment in excess of fair market value, LICENSEE shall pay to
LICENSOR a royalty on such excess fees calculated at the rates specified
herein.

 

15.2            LICENSEE “REVERSE
LICENSE” TO LICENSOR.  LICENSEE agrees to
license to LICENSOR on a non-exclusive basis for therapeutic uses in the
treatment of blood and cardiovascular diseases the rights to any technology it
currently owns or has licensed or develops or licenses in the future that is
applicable to such diseases (excluding however the use of proprietary
techniques now or hereafter developed by LICENSEE for the enhanced
vascularization of transplanted cells or tissues).  Such license shall provide for royalty
payments at the same rate as LICENSEE’S royalty payments to LICENSOR hereunder
as provided in Section 4.2(a).  Such
license will be sublicensable only once in a given field of use; or for the
purpose of having products produced, made, or distributed; or in connection
with a merger or consolidation of LICENSOR into another company or a sale of
all or substantially all of the assets of LICENSOR.  LICENSEE shall also have no obligations
hereunder with respect to technology licenses it has or may acquire if such
licenses restrict sublicensing in a manner inconsistent with this subparagraph.  Such “Reverse License shall not apply to any
rights acquired

 

20

 

by LICENSEE under Section 15.18
hereof.

 

15.3            FUTURE TECHNOLOGY
LICENSES.  LICENSOR acknowledges that it
is continuing to develop cell-based technology, the existence or significance
of which it may not have disclosed to LICENSEE. 
Therefore, LICENSOR further agrees that in the event any of its
technology now perfected or pending as of the date of this agreement but not specifically
enumerated herein would inhibit or adversely affect the commercial use by
LICENSEE of the PATENT RIGHTS in the field, LICENSOR shall waive any claim of
infringement to the extent necessary to permit LICENSEE to continue the use of
the PATENT RIGHTS under this Agreement.  In addition, LICENSOR agrees to license to
LICENSEE on a non-exclusive basis for uses in the FIELDS, including any rights
acquired under Section 15.18 hereof, the rights to any technology it
currently owns or has licensed or develops or licenses in the future that is
applicable to such FIELDS (but specifically excluding applications involving
the use of cells in the treatment of tumors where the primary use of the cells
is the destruction or reduction of tumors and does not involve regeneration of
tissue or organ function). Such license shall provide for royalty payments at
the same rate as LICENSEE’S royalty to LICENSOR hereunder as provided in Section 4.2(a).  Such license will be sublicensable only once
in a given field of use; or for the purpose of having products produced, made,
or distributed; or in connection with a merger or consolidation of LICENSEE
into another company or a sale of all or substantially all of the assets of
LICENSEE.  LICENSOR shall also have no
obligations hereunder with respect to technology licenses it has or may acquire
if such licenses restrict sublicensing in a manner inconsistent with this
subparagraph.

 

15.4            LICENSEE shall comply
with all local, state, federal and international laws and regulations relating
to the development, manufacture, use, provision, and sale of LICENSED PRODUCTS,
LICENSED PROCESSES and LICENSED SERVICES.  Without limiting the generality of the
foregoing, LICENSEE agrees to comply with the following:

 

a)                  LICENSEE
shall obtain all necessary approvals from the FDA, USDA, or any similar
governmental authorities of any foreign jurisdiction in which LICENSEE intends
to make, use, or sell LICENSED PRODUCTS or to perform LICENSED PROCESSES or
LICENSED SERVICES.

 

b)                 LICENSEE
shall comply fully with any and all applicable local, state, federal and
international laws and regulations relating to the LICENSED PRODUCTS, LICENSED
PROCESSES, and LICENSED SERVICES, and the PATENT RIGHTS, in the TERRITORY,
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 LICENSED PRODUCTS, LICENSED
PROCESSES, or LICENSED SERVICES and any technology relating thereto.  LICENSEE hereby gives written assurance that
it will comply with all such import or export laws and regulations (including
without limitation all Export

 

21

 

Administration
Regulations of the United States Department of Commerce), that it bears sole
responsibility for any violation of such laws and regulations, and that it will
indemnify, defend, and hold LICENSOR harmless (in accordance with Article 8)
for the consequences of any such 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, LICENSEE 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 a domestic manufacturer is not commercially feasible under
the circumstances, LICENSOR may seek a waiver of this requirement from the
relevant federal agency on behalf of LICENSEE and, upon LICENSEE’S request,
shall cooperate with LICENSEE in seeking such a waiver.

 

15.5            LICENSEE shall not
create or incur or cause to be incurred or to exist any lien, encumbrance,
pledge, charge, restriction or other security interest of any kind upon the
PATENT RIGHTS, but may cause to be incurred or to exist a lien, encumbrance,
pledge, charge, restriction or other security interest on its rights to the
LICENSED TECHNOLOGY hereunder, provided such security interest does not affect
LICENSOR’s rights to the LICENSED TECHNOLOGY, or any of LICENSOR’s rights under
this Agreement.

 

15.6            Neither Party 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 or delayed, except as
otherwise required by law.  The foregoing
notwithstanding, LICENSOR and LICENSEE shall have the right to make such
Announcements without the consent of the other Party in any prospectus,
offering memorandum, or other document or filing required by applicable
securities laws or other applicable law or regulation, provided that such Party
shall have given the other Party at least ten (10) days prior written notice of
the proposed text for the purpose of giving the other Party the opportunity to
comment on such text.

 

15.7            No implied licenses
are granted pursuant to the terms of this Agreement.  No licensed rights shall be created by
implication or estoppel.

 

15.8            Nothing herein shall
be deemed to constitute either Party as the agent or representative of the
Party, or both parties as joint venturers or partners for any purpose.  Each Party shall be an independent contractor,
not an employee or partner of the other Party, and the manner in which each
Party renders its services under this Agreement shall be within its sole
discretion.  Neither Party shall be
responsible for the acts or omissions of the other Party, nor shall either
Party have authority to speak for, represent or obligate the other Party in any
way without prior written authority from the other Party.

 

22

 

15.9                          To
the extent commercially feasible, and consistent with prevailing business
practices and applicable law, all LICENSED PRODUCTS sold pursuant to this
Agreement will be marked with the number of each issued patent that applies to
such LICENSED PRODUCTS.

 

15.10                    This
Agreement shall be construed, governed, interpreted and applied in accordance
with the laws of the State of California, U.S.A. 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.

 

15.11                    The
Parties hereto acknowledge that this Agreement sets forth the entire Agreement
and understanding of the Parties hereto as to the subject matter hereof, and
shall not be subject to any change or modification except by the execution of a
written instrument signed by the Parties hereto.

 

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

 

15.13                    The
failure of either Party to assert a right hereunder or to insist upon
compliance with any term or condition of this Agreement shall not constitute a
waiver of that right or excuse a similar subsequent failure to perform any such
term or condition by the other Party.

 

15.14                    This
Agreement may not be assigned by LICENSEE without the prior written consent of
LICENSOR, which consent shall be granted or denied in LICENSOR’s sole
discretion.  LICENSOR may not assign this
Agreement without the consent of LICENSEE, which consent shall not be unreasonably
withheld or delayed, except that LICENSOR may assign this Agreement to an
affiliate or to a successor in connection with the merger, consolidation, or
sale of all or substantially all of its assets or that portion of its business
to which this Agreement relates.  Notwithstanding
the foregoing to the contrary, this restriction on the assignment by LICENSEE
of this Agreement shall not prevent the assignment of this Agreement in
connection with a sale of all or substantially all of the assets of LICENSEE, so
long as the purchaser of the assets agrees to assume to any and all outstanding
liabilities to LICENSOR under this Agreement, including but not limited to any
outstanding amounts under the promissory note referred to in Section 4.1.

 

15.15                    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.”  The section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.

 

23

 

15.16                    This
Agreement may be executed in counterparts, each of which together shall
constitute one and the same Agreement.

 

15.17                    All
rights and licenses granted under or pursuant to this Agreement by LICENSOR to
LICENSEE are, and shall otherwise be deemed to be, for purposes of Paragraph
365(n) of the U.S.  Bankruptcy Code (the “Code”),
licenses to rights in “intellectual property” as defined in the Code.  The Parties hereto agree that LICENSEE, as a
LICENSEE of such rights under this Agreement, shall retain and may fully
exercise all of its rights and elections under the Code.  The Parties hereto further agree that, in the
event of the commencement of a bankruptcy proceeding by or against LICENSOR
including a proceeding under the Code, LICENSEE shall be entitled to a complete
duplicate of (or complete access to, as appropriate) any such intellectual
property and all embodiments of such intellectual property, including the
PATENT RIGHTS and KNOW-HOW, and the same, if not already in LICENSEE’s
possession, shall be promptly delivered to LICENSEE upon any such commencement
of a bankruptcy proceeding upon written request therefore by LICENSEE.

 

15.18                    In
addition to the other rights granted herein, LICENSOR hereby grants to LICENSEE
a 90 day right of negotiation with respect to any technology that would
constitute LICENSED TECHNOLOGY if the FIELD included diseases related either to
the heart or to neuro degenerative diseases (the “Added Fields”) prior to
LICENSOR entering into any license relating to either of such Added Fields)
with a third party.  Such a 90 day period
shall commence on the earlier of the 12 month anniversary of the Effective
Date, or such date when LICENSOR notifies LICENSEE that it has opened
negotiations with a third party or that a third party has made inquiry about
such a license.  If following the
expiration of any such 90-day negotiation period LICENSEE and LICENSOR have not
entered into a license for an Added Field, LICENSOR shall be free to enter into
an exclusive or non-exclusive license for such Added Field with any third
party.  If LICENSOR enters into a
non-exclusive license for an Added Field with a third party following the
90-day negotiating period hereunder, LICENSOR shall offer a non exclusive
license to LICENSEE on comparable terms as those entered into with such third
party.  LICENSEE shall then have 30 days
to enter into such a nonexclusive license.  If LICENSEE does not enter into such a license
within said 30-day period, LICENSOR shall have no further obligations relating
to the Added Field.

 

[Reminder of this page intentionally left blank]

 

24

 

IN
WITNESS WHEREOF, the Parties have duly executed this Agreement on the EFFECTIVE
DATE.

 

ADVANCED CELL TECHNOLOGY.
INC.

 

 

	
  By:

  	
  /s/ Michael D.
  West                                                      5-14-04

  	
   

  
	
  Printed Name:  Michael D. West, Ph.D.

  	
   

  
	
  Title:  President & Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  PACGEN CELLCO LLC

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Kenneth
  Aldrich                                                      5-14-04

  	
   

  
	
  Printed Name: Kenneth
  Aldrich

  	
   

  
	
  Title:  Managing Member

  	
   

  

 

25Exhibit 10.20

 

EXCLUSIVE LICENSE AGREEMENT (UMass IP)

 

This Exclusive License Agreement (“Agreement”) is made and entered into
this 14th day of May, 2004 (the “Effective Date”), by and between
Advanced Cell Technology, Inc., a Delaware corporation with offices located at
One Innovation Drive, Worcester, Massachusetts 01605 (“LICENSOR”), and PacGen
Cellco, LLC, a California limited liability company with offices located at 157
Surfview Drive, Pacific Palisades, CA 90272 (“LICENSEE”) (LICENSOR and LICENSEE
sometimes hereinafter referred to individually as a “Party” and collectively as
the “Parties”).

 

WITNESSETH

 

WHEREAS, LICENSOR owns or has licensed with sublicenseable interest the
PATENT RIGHTS (as defined below) and KNOW-HOW (as defined below); and

 

WHEREAS, LICENSEE desires to obtain an exclusive worldwide license
under LICENSOR’s rights in such technology in the FIELD; and

 

WHEREAS, LICENSOR is willing to grant such a license to LICENSEE upon
the terms and conditions set forth below; and

 

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

 

ARTICLE 1 - DEFINITIONS

 

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

 

1.1           “ACT ANIMAL CELL
LINES” shall mean cell lines of non-human animal origin developed by ACT.  These cell lines shall include but not be
limited to murine and primate embryonic stem cells derived through
parthenogenesis, nuclear transfer or otherwise isolated from fertilized
blastocysts including the relevant information LICENSOR possesses associated
with these cells, including but not limited to information on the cell’s
karyotype, gene expression and growth characteristics.

 

1.2           “AFFILIATE” shall
mean, with respect to any PERSON, any other PERSON which directly or indirectly
controls, is controlled by, or is under common control with, such PERSON.  A PERSON shall be regarded as in control of
another PERSON if it owns, or directly or indirectly controls, at least fifty
percent (50%) of the voting stock or other ownership interest of the other
PERSON, or if it directly or indirectly possesses the power to direct or cause
the direction of the management and policies of the other PERSON by any means
whatsoever.

 

1

 

1.3           “FIELD” shall mean
(1) the research, development, manufacture and selling of human and non-human
animal cells and ACT ANIMAL CELL LINES for commercial research use, including
small molecule and other drug testing and basic research, (2) the manufacture
and selling of human cells for therapeutic and diagnostic use in the treatment
of human (a) diabetes and (b) liver diseases, and (3) the use of ACT ANIMAL
CELL LINES in the process of manufacturing and selling human cells for
therapeutic and diagnostic use in the treatment of human (a) diabetes and (b)
liver diseases but where the final marketed product does not include ACT ANIMAL
CELL LINES (i.e. does not include the field of xenotransplantation); but FIELD
shall exclude applications involving the use of cells in the treatment of
tumors where the primary use of the cells is the destruction or reduction of
tumors and does not involve regeneration of tissue or organ function.

 

1.4           “KNOW-HOW” means all
compositions of matter, techniques and data and other know-how and technical
information including inventions (whether or not patentable), improvements and
developments, practices, methods, concepts, trade secrets, documents, computer
data, computer code, apparatus, clinical and regulatory strategies, test data,
analytical and quality control data, formulation, manufacturing, patent data or
descriptions, development information, drawings, specifications, designs,
plans, proposals and technical data and manuals and all other proprietary
information that is owned or controlled by LICENSOR as of the Effective Date
that relates to cloning technology or to any of the subject matter described in
or claimed by the PATENT RIGHTS and is relevant to the FIELD.  By way of illustration, but not in limitation,
KNOW-HOW shall include commercial rights to any existing potential research
products, including reagents, developed by LICENSOR in the course of its
in-house research.  An example of this is
the proprietary culture medium developed by LICENSOR in the course of the
development of LICENSOR’s proprietary ooplasmic transfer technology.

 

1.5           “LICENSED PROCESS”
means any process or method, the research, development, use, practice, sale,
offer for sale, import or export of which cannot be performed without (i)
infringing, in whole or in part, one or more VALID CLAIMS of the PATENT RIGHTS,
or (ii) using or incorporating some portion of the LICENSED TECHNOLOGY.

 

1.6           “LICENSED PRODUCT”
means any product that cannot be developed, manufactured, used, imported,
exported, or sold without (i) infringing, in whole or in part, one or more
VALID CLAIMS of the PATENT RIGHTS, or (ii) using or incorporating some portion
of the LICENSED TECHNOLOGY.

 

1.7           “LICENSED SERVICES”
means any service, the developing, using, performing, selling, offering for
sale, importing or exporting of which by LICENSEE would, but for the licenses
granted to LICENSEE in Article 2 of this Agreement, infringe a VALID
CLAIM of the PATENT RIGHTS in the country in which any such service is so
developed, used, performed, sold, offered for sale, imported or exported by
LICENSEE.

 

2

 

1.8          “LICENSED TECHNOLOGY”
shall mean, collectively, the licensed PATENT RIGHTS and licensed KNOW-HOW.

 

1.9          “NET
SALES” shall mean the amount billed or invoiced by LICENSEE for the sale or
provision of LICENSED PRODUCTS or LICENSED PROCESSES or LICENSED SERVICES less:

 

a)             discounts, credits, allowances and rebates
allowed;

 

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

 

c)             special packaging, transportation and
insurance costs incurred and directly related to the sale of LICENSED PRODUCTS;

 

d)            amounts allowed or credited on returns; and

 

e)             uncollected accounts.

 

1.10         “NEURONAL & HEART
FIELD OPTION” means an option described in Section 15.18 hereof for
LICENSEE to negotiate terms for license to the LICENSED TECHNOLOGY for the
field of diseases related to heart or neurodegenerative diseases

 

1.11         “PATENT RIGHTS” means
(a) the patent applications and patents identified on Exhibit A attached
hereto and any patents that issue on said applications and (b) any divisions,
continuations, extensions, reissues or reexaminations of any of the patents
identified in the foregoing clause (a).  The
Parties agree that Exhibit A may be revised from time to time after the
Effective Date to reflect changes thereto that result from the course of patent
prosecution.

 

1.12         “PERSON” shall mean
an individual, corporation, partnership, limited liability company, trust,
business trust, association, joint stock company, joint venture, pool,
syndicate, sole proprietorship, unincorporated organization, governmental
authority or any other form of entity not specifically listed herein.

 

1.13         “TERM” has the
meaning set forth in Section 9.1.

 

1.14         “TERRITORY” means the
entire world.

 

1.15         “1996 UMASS LICENSE”
means the Exclusive License Agreement between LICENSOR and the University of
Massachusetts (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.

 

3

 

1.16         “2003 UMASS LICENSE”
means the Exclusive License Agreement between LICENSOR and the University dated
April 1, 2003.

 

1.17         “UMASS LICENSES”
means the 1996 UMASS LICENSE and the 2003 UMASS LICENSE.

 

1.18         “VALID CLAIM” means a
claim of any issued and unexpired patent within the PATENT RIGHTS which has not
lapsed, become abandoned or been held permanently revoked, invalid, or
unenforceable by a decision of a court or administrative or government
authority or agency of competent jurisdiction from which no appeal can be or
has been taken within the time allowed for such appeal, or a claim of a pending
patent application included within the Licensed PATENT RIGHTS, which claim was
filed in good faith and has not been abandoned or finally disallowed without
the possibility of appeal or refiling of such application.

 

Additional terms may be defined throughout this Agreement.

 

ARTICLE 2 - GRANT

 

2.1           LICENSOR hereby
grants to LICENSEE, and LICENSEE hereby accepts, subject to the terms and
conditions hereof:

 

a)             A royalty bearing, exclusive license in
the TERRITORY in the FIELD and under the LICENSED TECHNOLOGY to (a) research,
develop, make, have made, use, sell, offer for sale, import and export LICENSED
PRODUCTS, (b) research, develop, use, practice, sell, offer for sale, import
and export LICENSED PROCESSES and (c) develop, use, perform, sell, offer for
sale, import and export LICENSED SERVICES.  By way of example, but not in limitation,
LICENSEE shall have the right to use LICENSED TECHNOLOGY within the FIELD for
the following purposes: to produce mammalian embryonic stem (ES) cells and to
produce from those mammalian embryonic cells, differentiated cells for human
therapeutic purposes or for commercial research purposes, including drug
screening assays, and to produce pluripotent cells including ES cells,
differentiated human cells for human diagnostic and therapeutic purposes and/or
for commercial research purposes, including drug screening assays.

 

b)            A royalty bearing, twelve (12) month
exclusive license in the TERRITORY in the FIELD to expand in culture, prepare
for sale, sell, offer for sale, import and export ACT ANIMAL CELL LINES.  The twelve-month term of exclusivity granted
to LICENSEE shall begin upon the date of the first sale of the ACT ANIMAL CELL
LINES.  LICENSOR and LICENSEE agree that
after the twelve-month period of exclusivity has passed, LICENSOR AND

 

4

 

LICENSEE shall negotiate in good faith to establish reasonable minimum
sales goals over reasonable evaluation periods in order to maintain LICENSEE’S
exclusive rights hereunder.  If LICENSOR
fails to meet the minimum sales goals then LICENSEE’s exclusive rights shall
revert to nonexclusive rights.

 

2.2           LICENSEE shall have
the right to sublicense the rights granted in Section 2.1 to third
parties in connection with contracting with such third parties to (a) provide
LICENSED PRODUCT marketing and distribution services to LICENSEE on behalf of
LICENSEE, (b) provide LICENSED SERVICES marketing services to LICENSEE on
behalf of LICENSEE or (c) manufacture for LICENSEE LICENSED PRODUCTS for sale
by LICENSEE or a third party pursuant to the foregoing clause (a).

 

2.3           LICENSEE shall have
the right to grant sublicenses beyond the scope of those described in Section
2.2 (a), (b), and (c) without the express prior written approval of
LICENSOR, however, LICENSOR shall be given at least 30 days prior written
notice of an intent to sublicense and at least 30 days to comment on the text
of the proposed sublicense agreement.  In
any case, such sublicenses shall meet the following conditions:

 

a)             the sublicensee shall not have the right
to grant further sublicenses;

 

b)            the sublicense shall not be assignable
without prior written approval by LICENSEE and LICENSOR; and

 

c)             the sublicense shall include fair
consideration consistent with industry norms for upfront fees and royalties.

 

2.4           Within thirty (30)
business days of the Effective Date, LICENSOR shall provide and transfer to LICENSEE,
in writing where practicable, all information and data relating to the LICENSED
TECHNOLOGY and the ACT ANIMAL CELL LINES as may be reasonably necessary and
requested to allow LICENSEE to exploit the licenses granted hereunder.  LICENSOR shall work with LICENSEE in good
faith to provide the necessary training for up to a total of 60 days, at
LICENSOR’s facilities, necessary to allow LICENSEE to utilize the LICENSED
TECHNOLOGY and expand the ACT ANIMAL CELL LINES.  LICENSEE shall pay to LICENSOR all reasonable
and customary expenses other than normal operating expenses incurred by
LICENSOR in providing such training and technology transfer, including but not
limited to fees incurred to request documents from patent counsel or the United
States Patent and Trademark Office.

 

2.5           LICENSEE
acknowledges that a portion of the PATENT RIGHTS licensed to LICENSEE hereunder
is owned by the University and is licensed to LICENSOR under the UMASS
LICENSES.  In the event the UMASS
LICENSES expire or are terminated for any reason pursuant to the provisions of
the UMASS LICENSES or otherwise, the terms of the letter agreement attached
hereto as Exhibit B between LICENSOR, LICENSEE and the University shall
apply to this Agreement.

 

5

 

2.6           Notwithstanding
anything stated herein, nothing in this Agreement shall be construed as
preventing LICENSOR from practicing the LICENSED TECHNOLOGY within the FIELD
for non-commercial in-house research purposes.  In the event that LICENSOR requests that
LICENSEE deliver to LICENSOR the LICENSED TECHNOLOGY or LICENSED PRODUCTS in
the FIELD for research purposes, LICENSEE shall make the LICENSED TECHNOLOGY or
LICENSED PRODUCTS available to LICENSOR on commercially reasonable terms.  In the event LICENSOR requires the use of
collaborators in its research, LICENSEE shall also make such LICENSED
TECHNOLOGY OR LICENSED PRODUCTS available to such collaborator if LICENSEE, in
its sole but reasonable discretion is satisfied that providing such items to a
collaborator will not endanger its exclusive commercial control of such items
or result in their use by a competitor.

 

ARTICLE 3 - LICENSEE OBLIGATIONS

RELATING TO COMMERCIALIZATION

 

3.1           LICENSEE shall use
its commercially reasonable and diligent efforts to bring one or more LICENSED
PRODUCTS, LICENSED PROCESSES or LICENSED SERVICES to market through an active
and diligent program for exploitation of the PATENT RIGHTS and to continue
active, diligent marketing efforts for one or more LICENSED PRODUCTS, LICENSED
PROCESSES or LICENSED SERVICES throughout the TERM of this Agreement.

 

3.2           LICENSEE shall
maintain minimum R&D requirements to maintain exclusivity under this
Agreement.  Commencing 30 months
following the Effective Date hereof and until the launch of the first human
cell-based therapeutic product, LICENSEE shall be required to invest a minimum
of $400,000 per year in research and development of the FIELD covered by this
Agreement or other agreements with LICENSOR affecting the FIELD in order to maintain
the exclusive license rights granted hereunder. 
In the event LICENSEE fails to perform this minimum expenditure in
R&D in the FIELD during the course of a calendar year during the
above-mentioned period, the license under this Agreement shall become
nonexclusive and such minimum expenditure for research and development shall be
reduced to $200,000 per year.

 

3.3           LICENSEE shall
maintain complete and accurate records of LICENSED PRODUCTS, LICENSED
PROCESSES, LICENSED SERVICES and ACT ANIMAL CELL LINES that are made, used,
sold or performed by LICENSEE under this Agreement.  Not later than April 1st of each year
following the Effective Date, LICENSEE shall furnish LICENSOR with a summary
report on the progress of its efforts during the prior year to develop and
commercialize LICENSED PRODUCTS, LICENSED PROCESSES, LICENSED SERVICES or ACT
ANIMAL CELL LINES, including without limitation research and development
efforts, efforts to obtain regulatory approval, marketing efforts (including
LICENSED PRODUCTS, LICENSED PROCESSES, LICENSED SERVICES and ACT ANIMAL CELL
LINES made, used, sold or performed) and sales figures, provided that such
reports shall be deemed Confidential Information (as defined in Section 10.1
herein) subject to the provisions of Article 10

 

6

 

of this
Agreement.

 

3.4           In the event that
LICENSOR determines that LICENSEE has not fulfilled its obligations under this Article
3, LICENSOR shall furnish LICENSEE with written notice of such determination.
 Within thirty (30) days after receipt of
such notice, LICENSEE shall (i) fulfill the relevant obligation, (ii) negotiate
with LICENSOR a mutually acceptable schedule of revised obligations, or (3) if
LICENSEE disputes the alleged failure to fulfill its obligations, it shall
promptly seek appropriate judicial determination of the matter and diligently
pursue such action to a final determination with all appropriate speed; failing
which, LICENSOR shall have the right, immediately upon written notice to
LICENSEE, to terminate this Agreement as provided in Section 9.2 hereof.

 

ARTICLE 4 - CONSIDERATION

 

4.1           Initial Payment.
 In partial consideration of the license
granted to LICENSEE from LICENSOR in Article 2 of this Agreement,
LICENSEE agrees to pay as a “License Fee” to LICENSOR $150,000 in a convertible
promissory note in the form attached hereto as Exhibit C.

 

4.2           Royalties.

 

a)              In partial consideration of the license
in the FIELD granted by LICENSOR to LICENSEE in Article 2 of this
Agreement, LICENSEE agrees to pay to LICENSOR an earned royalty equal to the
following percentages of the NET SALES in the FIELD made, used, sold, imported,
exported or performed by LICENSEE in the TERRITORY.

 

(i)            6%
on therapeutics,

(ii)           3%
on diagnostics, and

(iii)                               10% on commercial
research use of LICENSED TECHNOLOGY in all FIELDS except (iv) below and

(iv)                              12% on ACT ANIMAL CELL
LINES

 

b)             No multiple royalties shall be payable
because any LICENSED PRODUCT, LICENSED PROCESS or LICENSED SERVICE in the
FIELD, its manufacture, use, lease, sale or performance are or shall be covered
by more than one patent or patent application within the PATENT RIGHTS.

 

c)              The obligation of LICENSEE to pay
royalties or Sublicense Income (as defined in Section 4.5 herein)
hereunder shall terminate for each country in the TERRITORY concurrently with
the expiration or termination of the last applicable VALID CLAIM within the
PATENT RIGHTS in such country in which the LICENSED PRODUCT, LICENSED PROCESS
or LICENSED SERVICE is, (as applicable), used, practiced,

 

7

 

performed, sold, offered for sale, imported, exported or manufactured.

 

4.3           Minimum Royalties.
 Within 2 business days from the
Effective Date hereof, LICENSEE shall pay to LICENSOR a minimum royalty fee of
$100,000 in cash or by wire transfer.  In
addition, commencing 12 months following the Effective Date, LICENSEE shall pay
to LICENSOR additional minimum royalty fees equal to the difference between
total Royalties actually paid in the preceding 12 months and the following
minimum amounts:

 

(i)                                     At 12 months,
$10,000

(ii)                                  At 24 months, $20,000

(iii)                               At 36 months, $30,000

(iv)                              Annually thereafter,
$40,000.

 

4.4           Stacking
Royalties.  With the exception of
minimum royalties due to LICENSOR, if LICENSEE, its Affiliates or sublicensees
are required to pay royalties relating to any additional intellectual property
from LICENSOR in order to exercise its rights hereunder to make, have made, use
or sell any Product, then LICENSEE shall have the right to credit a pro-rated
portion of such royalty payments against the royalties owing to LICENSOR under Section
4.2 of this Agreement with respect to sales of such Product such that in no
event shall the total of royalty payments that are due to LICENSOR in such
royalty period exceed the royalty payments payable under Subsection 4.2(a)
above.  Prorations shall be made in the
same manner as specified for combination products under Section 4.9
below.

 

4.5           Sublicense Income.
 LICENSEE shall pay to LICENSOR a total of
Thirty Three percent (33%) of all Sublicense Income.  “Sublicense Income” means consideration that
LICENSEE receives for the sublicense of rights that are granted LICENSEE under Article
2, including without limitation license fees, milestone payments, equity
payments, up front fees, success fees, and license maintenance fees.

 

4.6           Stacking
Sublicense Income.  The fees payable
on Sublicense Income under Section 4.5 above shall be in addition to any
royalties specified elsewhere in this Article 4, but if LICENSEE is
obligated to pay or has paid to LICENSOR similar fees on Sublicense Income
under another license agreement with respect to the FIELD, then LICENSEE shall
have the right to pro-rate such fees against the fees owing to LICENSOR under
this Agreement such that in no event shall the total of fees due from LICENSEE,
as a result of Sublicense Income, to LICENSOR exceed the payments payable under
Section 4.5.  Pro-rating of
payments shall be made in the ratio of the minimum royalties payable under this
Agreement to the minimum royalties payable under any other agreement covered
hereby under which fees on Sublicense Income are owed.

 

4.7           Milestone
Payments.  Upon the launch of a
commercial therapeutic product based on the LICENSED TECHNOLOGY, LICENSEE shall
pay additional Milestone Payments totaling $1,750,000 on the following
schedule:

 

8

 

$250,000 within 30 days following the launch of the first commercial
Product;

$500,000 upon reaching $5,000,000 in sales from one or both Product
Fields;

$1,000,000 upon reaching $10,000,000 in sales from one or both Product
Fields.

 

4.8           Stacking
Milestone Payments.  The milestone
payments shall be in addition to any royalties specified elsewhere in this Article
4, but shall not apply to diagnostic, commercial research, or any other
non-therapeutic uses.  If LICENSEE is
obligated to pay or has paid to LICENSOR similar Milestone Payments under
another license agreement with respect to the FIELD, then LICENSEE shall have
the right to pro-rate such Milestone Payments against the Milestone Payments
owing to LICENSOR under this Agreement such that in no event shall the total of
all Milestone Payments due from LICENSEE to LICENSOR exceed the amounts stated
in Section 4.7.  Pro-rating of
payments shall be made in the ratio of the minimum royalties payable under this
Agreement to the minimum royalties payable under any other agreement covered
hereby under which Milestone Payments are owed.

 

4.9           Combination
Product.  In the event a Product is
sold in a combination product with other devices or biologically active
components, NET SALES, for purposes of royalty payments on the combination
product, shall be calculated by multiplying the NET SALES of that combination
by the fraction A/B, where A is the gross selling price of the Product sold
separately and B is the gross selling price of the combination product.  In the event that no such separate sales are
made by LICENSEE, its Affiliates or permitted sublicensees, NET SALES for
royalty determination shall be calculated by multiplying NET SALES of the
combination by the fraction C/(C+D), where C is the fully allocated cost of the
Product and D is the fully allocated cost of such other biologically active
components.

 

4.10         Payments in U.S. Currency.
 All payments due under this Agreement
shall be paid in cash to LICENSOR and all payments shall be made in United
States currency.  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.

 

4.11         Taxes.  Subject to the limits of Section 1.9
hereof, all payments due hereunder shall be paid in full without deduction of
taxes or other fees which may be imposed by any government and which shall be
paid by LICENSEE; provided, however, that any withholding tax required to be
withheld by LICENSEE on royalty payments under the laws of any country in the
TERRITORY on behalf of LICENSOR will be timely paid by LICENSEE to the
appropriate governmental authority, and LICENSEE will furnish LICENSOR with
proof of payment of such tax.  Any such
tax actually withheld may be deducted from royalty payments due to LICENSOR
under this Agreement.  If at any time
legal restrictions prevent the prompt remittance of part or all of any payments
owed by LICENSEE to LICENSOR hereunder with respect to any country in the
TERRITORY, payment shall be made through any lawful means or methods that may
be available, and as LICENSEE shall reasonably determine is appropriate.

 

9

 

4.12         Overdue Payments.
 Any payments to be made by LICENSEE
hereunder that are not paid on or before the date such payments are due under
this Agreement shall 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.

 

ARTICLE 5 - REPORTS AND RECORDS

 

5.1           LICENSEE shall keep
full, true and accurate books of account containing all particulars that may be
necessary for the purpose of showing the amounts payable to LICENSOR hereunder
and to enable the reports provided under Section 5.2 to be verified.  Said books of account shall be kept at
LICENSEE’s principal place of business.  Said
books and the supporting data shall be open upon reasonable advance notice (but
not less than five (5) business days notice and no more frequently than once
per calendar year) for three (3) years following the end of the calendar year
to which they pertain, to the inspection of LICENSOR or its agents for the
purpose of verifying LICENSEE’s royalty and Sublicense Income statement or
compliance in other respects with this Agreement.  If any such audit determines an error in any
royalty or Sublicense Income payment, LICENSEE shall pay to LICENSOR, within
thirty (30) days of the discovery of the error, (a) all deficiencies in royalty
or Sublicense Income payments, (b) interest on such deficiencies from the date
such royalty or Sublicense Income payment was due until the date paid at the
rate set forth in Section 4.12 above, and (c) if such error is in excess
of five percent (5%) of any royalty or Sublicense Income payment, the cost of
the audit.  In all other cases, the costs
of the audit shall be paid for by LICENSOR.  All information disclosed pursuant to an audit
shall be treated as Confidential Information (as defined in Section 10.1
herein) and shall not be disclosed to any third party or used for any purpose
other than to determine the correctness of LICENSEE’s royalty and Sublicense
Income statement or compliance in other respects with this Agreement.

 

5.2           After the first
commercial sale of a LICENSED PRODUCT, LICENSED PROCESS, LICENSED SERVICES, or
ACT ANIMAL CELL LINES, LICENSEE, within forty-five (45) days after March 31, June 30, September 30 and December 31 of
each year, shall deliver to LICENSOR a true
and accurate report, giving such particulars of the business conducted
by LICENSEE and its permitted sublicensees during the preceding three-month
period under this Agreement as shall be pertinent to a royalty and Sublicense
Income accounting hereunder.  Without
limiting the generality of the foregoing, these reports shall include at least
the following:

 

a)              the number of LICENSED PRODUCTS and ACT
ANIMAL CELL LINES manufactured and sold by LICENSEE and all sublicensees;

 

b)             total billings and the amounts actually
received for LICENSED PRODUCTS and ACT ANIMAL CELL LINES sold by LICENSEE and
all sublicensees;

 

c)              an accounting for all LICENSED PROCESSES
or LICENSED SERVICES used in the provision of services to others or sold by
LICENSEE;

 

10

 

d)             the deductions applicable as provided in Section 1.9;
and

 

e)              the names and addresses of all parties
making LICENSED PRODUCTS on behalf of LICENSEE.

 

The reports shall provide the above-identified information by product,
process, or service type.

 

5.3           With each such
report submitted, LICENSEE shall pay to LICENSOR the royalties and Sublicense
Income due and payable for such three-month period.  If no royalties or Sublicense Income shall be
due, LICENSEE shall so report.

 

ARTICLE 6 - PATENT PROSECUTION

 

6.1           LICENSOR shall be
solely responsible for the continued prosecution of pending patent applications
included in the PATENT RIGHTS and the issuance of such applications after
allowance.  The prosecution, filing and
maintenance of all patents and applications shall be the primary responsibility
of LICENSOR.  LICENSEE agrees to
cooperate fully with LICENSOR, as requested by LICENSOR and at LICENSOR’s
expense, in the preparation, filing, prosecution, and maintenance of the patent
applications and patents included in the PATENT RIGHTS.  With respect to Australia, Canada, Europe,
Mexico, Japan and Israel, LICENSEE shall pay to LICENSOR on or before the due
date one half (1/2) of any future annuity and maintenance fees with respect to
UMA 99-19, provided LICENSOR notifies LICENSEE of the amount of such payments
due at least 30 days prior to their due date.

 

6.2           Licensors will not
allow any patent or patent application within the PATENT RIGHTS to become
expired or abandoned without giving (a) prior written notice to LICENSOR of
such expiration or abandonment, and (b) LICENSOR the right to assume
responsibility for such patent or patent application subject to the rights of
the University under the UMASS LICENSES and the rights of pre-existing
licensees under their respective licenses.  LICENSOR will then assign such patent or
patent application to LICENSEE and LICENSEE will thereafter assume control
thereof and all expenses related thereto.

 

ARTICLE 7 - PROSECUTION OF INFRINGERS

AND DEFENSE OF PATENT RIGHTS

 

The Parties agree to notify each other in writing of any actual or
threatened infringement by a third party of the PATENT RIGHTS or of any claim
of invalidity, unenforceability, or non-infringement of the PATENT RIGHTS.  LICENSOR shall have the sole responsibility to
prosecute or defend such claims, as applicable. 
LICENSEE shall, if requested, provide reasonable assistance to LICENSOR
in connection with the prosecution or defense of such claims.

 

11

 

ARTICLE 8 - INDEMNIFICATION

 

8.1           Indemnification
of the LICENSOR and the University.  LICENSEE
shall be responsible for and shall indemnify, defend, and hold harmless
LICENSOR and the University, and their agents, attorneys, representatives,
third party beneficiaries and their respective heirs, executors, successors and
assigns (collectively, the “LICENSOR Indemnitees”) from and against all
liabilities of any kind whatsoever, including legal expenses and reasonable
attorneys’ fees, incurred or imposed upon any of the LICENSOR Indemnitees in
connection with or as a consequence of any claims (including third party
claims), suits, actions, demands or judgments arising out of the death of or
injury to any person or persons or out of any damage to property resulting from
the development, production, manufacture, sale, use, performance, rendering,
consumption or advertisement of the LICENSED PRODUCT(s) and/or LICENSED
PROCESS(es), LICENSED SERVICE(s), and/or ACT ANIMAL CELL LINES or arising from
any obligation, act or omission performed or failed to be performed hereunder,
or from a breach of any representation or warranty of LICENSEE hereunder unless
and to the extent that such liability arises solely from any action of LICENSOR
or any of its Affiliates.  If the
exercise of LICENSEE’s rights under this Agreement in any country in the
TERRITORY is the subject of a bona fide claim by a third party, filed in a
court of competent jurisdiction after the date hereof, that the exercise of
such rights infringes or conflicts with any intellectual property rights of
such third party (a “Third Party Infringement Claim”), then LICENSEE shall not
have any of the rights granted herein in such country and shall have no
obligation to pay LICENSOR any further payments under Article 4 of this
Agreement with respect to any country of the TERRITORY until such claim is
resolved by proper adjudication or settlement permitting LICENSEE to exercise
LICENSEE’s rights under this Agreement in the applicable country of the
TERRITORY.  Notwithstanding anything
herein to the contrary, LICENSOR covenants that it will not (a) assert or bring
any suit, action, claim or other proceeding against LICENSEE based on, in whole
or in part, LICENSEE’s exercise of LICENSEE’s rights, in accordance with the
terms and conditions of this Agreement, with respect to the LICENSED TECHNOLOGY
and/or (b) join in any third party suit, action, claim or other proceeding
against LICENSEE based on, in whole or in part, any intellectual property
rights (including without limitation, patent rights and/or know how) owned by the
applicable third party, so long as LICENSEE is not in violation of this
Agreement.

 

8.2           Indemnification
of the LICENSEE.  LICENSOR shall be
responsible for and shall indemnify, defend, and hold harmless LICENSEE and the
officers, directors, shareholders, employees, agents, attorneys,
representatives, and Affiliates, and their respective heirs, executors,
successors and assigns, (the “LICENSEE Indemnitees”) from and against all
liabilities of any kind whatsoever, including legal expenses and reasonable attorneys’
fees, incurred or imposed upon any of the LICENSEE Indemnitees in connection
with or as a consequence of any claims (including third party claims), suits,
actions, demands or judgments arising out of, directly or indirectly, or in any
way relating to: (a) any breach by LICENSOR of any representation, warranty,
covenant or obligation set forth in this Agreement; or (b) arising from
LICENSOR’s ownership, management, control, use or disposition of the LICENSED
TECHNOLOGY or ACT

 

12

 

ANIMAL CELL
LINES unless and to the extent that such liability arises solely from any
action of LICENSEE or any of its Affiliates after the Effective Date.

 

8.3           Demands for Third
Party Claims.  Each indemnified Party
hereunder (an “Indemnified Party”) agrees that promptly upon its discovery of
facts giving rise to a claim for indemnity under this Agreement, including the
receipt of any demand, assertion, claim, action or proceeding, judicial or
otherwise, by any third party (being referred to herein as a “Claim”), with
respect to any matter as to which it claims to be entitled to indemnity under
the provisions of this Agreement, it will give prompt notice thereof in writing
to the Indemnifying Party (the “Indemnifying Party”), together with a statement
of such information respecting any of the foregoing as it shall have.  Such notice shall include a formal demand for
indemnification under this Agreement.

 

8.4           Right to Contest
and Defend.  The Indemnifying Party
shall contest and defend, at its sole cost and expense, by all appropriate
legal proceedings any Claim with respect to which it is called upon to
indemnify the Indemnified Party under the provisions of this Agreement;
provided, that notice of the intention to so contest shall be delivered by the
Indemnifying Party to the Indemnified Party as soon as reasonably possible
after (but no later than twenty 20 days from) the date of receipt by the
Indemnifying Party of notice by the Indemnified Party of the assertion of the
Claim.  Any such contest may be conducted
in the name and on behalf of the Indemnifying Party or the Indemnified Party as
may be appropriate.  Such contest shall
be conducted by reputable counsel employed by the Indemnifying Party, but the
Indemnified Party shall have the right but not the obligation to participate in
such proceedings and to be represented by counsel of its own choosing at its
sole cost and expense.  The Indemnifying
Party shall have full authority to determine all action to be taken with
respect thereto; provided, however, that the Indemnifying Party will not have
the authority to subject the Indemnified Party to any obligation whatsoever
(whether financial or the imposition of equitable or injunctive relief), other
than the performance of purely ministerial tasks or obligations not involving
material expense (for which the Indemnified Party shall be reimbursed).  If the Indemnifying Party does not elect to
contest any such Claim, the Indemnifying Party shall be bound by the result
obtained with respect thereto by the Indemnified Party.

 

8.5           Cooperation.  If requested by the Indemnifying Party, the
Indemnified Party agrees to cooperate with the Indemnifying Party and its
counsel in contesting any Claim that the Indemnifying Party elects to contest or,
if appropriate, in making any counterclaim against the PERSON asserting the
Claim, or any cross-complaint against any PERSON, and the Indemnifying Party
will reimburse the Indemnified Party for any expenses incurred by it in so
cooperating.

 

8.6           Right to
Participate.  The Indemnified Party
agrees to afford the Indemnifying Party and its counsel the opportunity to be
present at, and to participate in, conferences with any PERSON, including
governmental authorities, asserting any Claim against the Indemnified Party or
conferences with representatives of or counsel for such PERSON.

 

13

 

8.7           Payment of
Damages.  The Indemnifying Party
shall pay to the Indemnified Party in immediately available funds any amounts to
which the Indemnified Party may become entitled by reason of the provisions of
this Agreement, such payment to be made within five (5) days after any such
amounts are finally determined either by mutual agreement of the Parties hereto
or pursuant to the final non-appealable judgment of a court of competent
jurisdiction.

 

8.8           Independent
Indemnities.  The Parties acknowledge
and agree that each of the indemnities under Sections 8.1 and 8.2 may be
relied upon independently.

 

8.9           Insurance.  LICENSEE and LICENSOR mutually agree to
maintain insurance or self-insurance that is reasonably adequate to fulfill any
potential obligation to the Indemnified Parties.  LICENSEE and LICENSOR shall continue to
maintain such insurance or self-insurance during the term of this Agreement and
after the expiration or termination of this Agreement for a period of five (5)
years.  Each Party shall provide to the
other Party, upon request, proof of any such insurance policy maintained by
such Party.

 

ARTICLE 9 – TERMINATION

 

9.1           The term of this
Agreement (“TERM”) shall commence on the Effective Date and continue until the
expiration of the last VALID CLAIM within the PATENT RIGHTS to expire, unless
sooner terminated as provided in this Article 9; provided that LICENSEE’s obligation to pay royalties or
Sublicense Income on NET SALES in any country will terminate pursuant to Subsection
4.2(c) (subject to LICENSEE’s
obligations under Section 9.4 herein).

 

9.2           If either Party
commits a material breach of a material term of this Agreement (including any
failure to make any payment due under this Agreement), the non-breaching Party
shall have the right to terminate this Agreement effective on thirty (30) days
prior written notice to the Party in breach, unless such breach is cured prior to
the expiration of such thirty (30) day period.

 

9.3           LICENSEE shall have
the right to terminate this Agreement at any time on thirty (30) days prior
notice to LICENSOR, and upon payment of all amounts due LICENSOR through the
effective date of the termination.

 

9.4.          Notwithstanding
anything herein to the contrary, in the event that this Agreement is terminated
by LICENSOR pursuant to Section 9.2 or by LICENSEE pursuant to Sections
9.2 or 9.3, LICENSEE shall retain a license to rights granted in Article
2 to the extent reasonably necessary to sell any LICENSED PRODUCTS existing
or under production and to perform LICENSED PROCESSES or LICENSED SERVICES
related to such LICENSED PRODUCTS or that are in process, subject to the terms
of this Agreement (including without limitation the obligation to pay royalties
under Article 4), provided that LICENSEE shall complete and sell all
such work-in-progress and inventory within six (6) months after the effective
date of termination.

 

14

 

9.5           Upon the expiration
of the TERM of this Agreement LICENSEE shall have a fully paid-up,
non-exclusive, irrevocable, royalty free license under the rights granted in Article
2.

 

9.6           Nothing herein shall
be construed to release either Party from any obligation that accrued prior to
expiration or any termination of this Agreement.  The following provisions shall survive any
termination or any expiration of the TERM of this Agreement: this Section
9.6 and Articles/Sections 1, 4, 5, 8, 9.4, 10, 11, 12, 13, 15.1, 15.2, 15.5,
15.6, 15.7, 15.8, 15.10, 15.15 and 15.16, and any other provision which by its
nature is intended to survive any such termination.

 

ARTICLE 10 – CONFIDENTIALITY AND
NON-DISCLOSURE

 

10.1         Confidential
Information; Non-Disclosure.  “Confidential
Information” shall mean any technical, business, financial, customer or other
information disclosed by one Party (the “Disclosing Party”) to the other Party
(the “Receiving Party”) pursuant to this Agreement which is marked “Confidential”
or “Proprietary,” or which, under all of the given circumstances, ought
reasonably to be treated as confidential information of the Disclosing Party.  Such information may be disclosed in oral,
visual or written form (including magnetic, optical or other media).  Except as expressly provided in Section
10.2 below, each Party’s Confidential Information specifically includes
without limitation the respective Party’s business plans and business
practices, the terms of this Agreement, scientific knowledge, research and
development or know-how, processes, inventions, techniques, formulae, products
and product plans, business operations, customer requirements, designs,
sketches, photographs, drawings, specifications, reports, studies, findings,
data, plans or other records, biological materials, software, margins, payment
terms and sales forecasts, volumes and activities, designs, computer code,
technical information, costs, pricing, financing, business opportunities,
personnel, and information of LICENSOR or LICENSEE relating to the LICENSED
PROCESSES, LICENSED PRODUCTS or LICENSED SERVICES whether or not such
information is marked or identified provided that the Disclosing Party provides
notice in writing reasonably identifying such Confidential Information within
30 days of disclosure.  Except to the
extent expressly authorized by this Agreement or by other prior written consent
by the Disclosing Party, the Receiving Party, during the term of this
Agreement, and thereafter, shall: (i) treat as confidential all Confidential
Information of the other Party; (ii) use Confidential Information only for
exercising the rights and fulfilling the obligations set forth in this
Agreement, (iii) implement reasonable procedures to prohibit the disclosure,
unauthorized duplication, misuse or removal of the Disclosing Party’s
Confidential Information; (iv) not disclose Confidential Information to any
third party, and (v) only disclose the Confidential Information to (a) those of
its employees who have a need to know Confidential Information in order to
exercise the rights and fulfill the obligations set forth in this Agreement and
(b) legal and professional advisors and existing and potential investors and
their legal and professional advisors, each of which is bound by a written
agreement (or in the case of attorneys or other professional advisors, formal
ethical duties) requiring such advisors and investors to treat, hold and
maintain such Confidential Information in accordance with the terms

 

15

 

and conditions
of this Agreement, or (c) recipients of offering documents in connection with
any offering of securities where such disclosure is, in the opinion of counsel
for the Disclosing Party, reasonably required to comply with the investment
disclosure laws of any applicable jurisdiction.  Without limiting the foregoing, the Receiving
Party shall protect the Disclosing Party’s 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.

 

10.2         Exceptions.  The Receiving Party shall have no obligation
or liability to the Disclosing Party with regard to any Confidential
Information of the Disclosing Party: (i) that was publicly known and available
at the time it was disclosed or becomes publicly known and available through no
fault, action, or inaction of the Receiving Party; (ii) was known to the
Receiving Party, without restriction, at the time of disclosure as shown by the
files of the Receiving Party in existence 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
disclosing party’s Confidential Information, provided, that the Receiving Party
can demonstrate such independent development by documented evidence prepared
contemporaneously with such independent development; (v) is disclosed pursuant
to the order or requirement of a court, administrative agency, or other
governmental body, provided that the Receiving Party shall provide prompt
notice thereof and reasonable assistance to the Disclosing Party to enable the
Disclosing Party to seek a protective order or otherwise prevent such
disclosure, and provided further that such disclosure is limited to the extent
necessary to comply with such order and the information shall otherwise be
treated as Confidential Information; or (vi) that is provided to the Receiving
Party by an independent third party without violating any confidentiality
obligation to the Disclosing Party.

 

10.3         Injunctive Relief.
 LICENSOR and LICENSEE acknowledge and
agree that any breach of the confidentiality obligations imposed by this Article
10 will constitute immediate and irreparable harm to the Disclosing Party
and/or its 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.  The Disclosing Party shall also be entitled to
receive from the Receiving Party the costs of enforcing this Article 10,
including reasonable attorneys’ fees and expenses of litigation.

 

10.4        Termination.  Upon termination or expiration of this
Agreement, or upon the request of the Disclosing Party at any time, the
Receiving Party shall promptly return to the Disclosing Party, at its request,
all copies of Confidential Information received from the Disclosing 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 Disclosing Party in any form.  Notwithstanding the foregoing to the contrary,
LICENSEE shall have no obligation (even upon a request by LICENSOR) to return
or destroy any KNOW-HOW (including tangible embodiments of KNOW-HOW) during the
TERM of this Agreement.

 

16

 

10.5         Survival.  The obligations of LICENSOR and LICENSEE under
this Article 10 shall survive any expiration or termination of this
Agreement.

 

ARTICLE 11 - PAYMENTS, NOTICES, AND OTHER
COMMUNICATIONS

 

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

 

In the case of LICENSOR:

Advanced Cell Technology, Inc.

One Innovation Drive

Worcester, MA 01605

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

 

With a copy to:

Pierce Atwood

One Monument Square

Portland, ME 04101

Attention: William L. Worden, Esq.

 

In the case of LICENSEE:

PacGen Cellco, LLC.

157 Surfview Drive

Pacific Palisades, CA 90272

Attention: Kenneth Aldrich

 

With a copy to:

Gray Cary Ware & Freidenrich

4365 Executive Drive, Suite 1100

San Diego, CA 92121-2133

Attention: Lisa Haile

 

17

 

ARTICLE 12 - RESPRESENTATIONS AND WARRANTIES
OF LICENSOR

 

As an inducement to LICENSEE to enter into and perform this Agreement,
LICENSOR represents and warrants to LICENSEE as follows:

 

12.1         Title to LICENSED
TECHNOLOGY; Encumbrances.  LICENSOR
has good and valid title or valid licenses (with the right of sublicense) to
the LICENSED TECHNOLOGY.

 

12.2         No Violations.
 The execution, delivery and performance
of this Agreement by LICENSOR and the consummation by LICENSOR of the
transactions contemplated hereby does not,: (a) violate any statute, ordinance,
rule or regulation applicable to LICENSOR or by which any of the LICENSED
TECHNOLOGY may be bound; (b) violate any order, judgment or decree of any court
or of any Governmental Authority or regulatory body, agency or authority
applicable to LICENSOR or by which any of the LICENSED TECHNOLOGY may be bound;
(c) require any filing by LICENSOR with, or require LICENSOR to obtain any
permit, consent or approval of, or require LICENSOR to give any notice to, any
Governmental Authority or regulatory body, agency or authority; or (d) result
in a violation or breach by LICENSOR of, conflict with, constitute a default by
LICENSOR (or give rise to any right of termination, cancellation, payment or
acceleration) under or result in the creation of any Encumbrance upon any of
the LICENSED TECHNOLOGY.

 

12.3         Litigation.  Except as set forth in Exhibits D and E,
there is no action, suit, proceeding at law or in equity, arbitration or
administrative or other proceeding by or before (or any investigation by) any
governmental or other instrumentality or agency, pending, or threatened,
against or affecting the LICENSED TECHNOLOGY, and LICENSOR does not know of any
valid basis for any such action, proceeding or investigation.  To the knowledge of LICENSOR, there are no
such suits, actions, claims, proceedings or investigations pending or
threatened, seeking to prevent or challenge the transactions contemplated by
this Agreement.

 

12.4         Disclosure.-Neither
these representations and warranties made by LICENSOR pursuant to this
Agreement nor any of the exhibits, schedules or certificates attached hereto or
delivered in accordance with the terms hereof knowingly contains any
misstatement of fact or omits any statement of fact necessary in order to make
the statements contained herein and therein not misleading in light of the
circumstances under which they were made.

 

12.5         Copies of
Documents.  LICENSOR has caused to be
made available for inspection and copying by LICENSEE and its advisers, true,
complete and correct copies of all documents in LICENSOR’s possession referred
to in any schedule attached hereto.

 

12.6         Broker’s or Finder’s
Fees.  No agent, broker, person or
firm acting on behalf of LICENSOR is, or will be, entitled to any fee,
commission or broker’s or finder’s fees for which the LICENSEE may be liable in
connection with this Agreement or any of the transactions contemplated hereby.

 

18

 

12.7                           LICENSED TECHNOLOGY.

 

(a)          Except as set forth on Exhibit D and E,
LICENSOR, is not aware of any interference, infringement, misappropriation, or
other conflict with any intellectual property rights of third parties, and
LICENSOR has never received any charge, complaint, claim, demand, or notice
alleging any such interference, infringement, misappropriation, or violation
(including any claim that LICENSOR must license or refrain from using any
intellectual property rights of any third party).  To the knowledge of LICENSOR, no third party
has interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any of the LICENSED TECHNOLOGY.

 

(b)         Exhibit A identifies each patent or
registration which has been issued or licensed to LICENSOR with respect to any
of the LICENSED TECHNOLOGY and identifies each pending patent application or
application for registration which LICENSOR has made with respect to any of the
LICENSED TECHNOLOGY.  LICENSOR has made
available to LICENSEE correct and complete copies of all such patents,
registrations and applications (as amended to-date) in LICENSOR’s possession
and has made available to LICENSEE correct and complete copies of all other
written documentation in LICENSOR’s possession evidencing ownership and
prosecution (if applicable) of each such item.

 

(c)          Exhibit A identifies each item of
LICENSED TECHNOLOGY that is assigned to the University and that LICENSOR uses
pursuant to license, sublicense, agreement, or permission.  LICENSOR has made available to LICENSEE
correct and complete copies of all such licenses, sublicenses, agreements,
patent prosecution files and permissions (as amended to-date) in LICENSOR’s
possession.  With respect to each item of
LICENSED TECHNOLOGY required to be identified in Exhibit A and to the
knowledge of LICENSOR: (i) the license, sublicense, agreement, or permission
covering the item is legal, valid, binding, enforceable, and in full force and
effect; (ii) the license, sublicense, agreement, or permission will continue to
be legal, valid, binding, enforceable, and in full force and effect on
identical terms following the consummation of the transactions contemplated
hereby; (iii) no Party to the license, sublicense, agreement, or permission is
in breach or default, and no event has occurred which with notice or lapse of
time would constitute a breach or default or permit termination, modification,
or acceleration thereunder; (iv) no party to the license, sublicense,
agreement, or permission has repudiated any provision thereof; (v) the
underlying item of LICENSED TECHNOLOGY is not subject to any outstanding lien
or encumbrance, injunction, judgment, order, decree, ruling, or charge other
than that disclosed in Exhibits D and E; (vi) no action, suit, proceeding,
hearing,

 

19

 

investigation, charge, complaint, claim, or demand is pending or is
threatened which challenges the legality, validity, or enforceability of the
underlying item of LICENSED TECHNOLOGY other than that disclosed in Exhibits D
and E; and (vii) LICENSOR has not granted any sublicense or similar right to
the LICENSED TECHNOLOGY within the FIELD.

 

12.8            Survival of Representations and
Warranties.

 

(a)          Except as otherwise provided herein,
notwithstanding any investigation at any time made by or on behalf of any Party
hereto, the representations and warranties set forth herein and in any
certificate delivered in connection herewith with respect to any of those
representations and warranties will survive the Effective Date until the longer
to occur of: (i) two (2) years or (ii) the expiration of the applicable
statutes of limitation, including all periods of extension and tolling
whereupon they will terminate and expire.

 

(b)         After a representation and warranty has
expired, as provided in Subsection 12.8(a), no claim for claims or costs
may be made or prosecuted by any Person who would have been entitled to claims
or costs on the basis of that representation and warranty prior to its
termination and expiration, provided that no claim presented in writing for
claims or costs to the Person or Persons from which or whom those damages are
sought on the basis of that representation and warranty prior to its
termination and expiration will be affected in any way by that termination and
expiration.

 

12.9          EXCEPT
AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, LICENSOR, ITS DIRECTORS,
OFFICERS, EMPLOYEES, AND AFFILIATES MAKE NO REPRESENTATIONS AND EXTEND NO
WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF
PATENT RIGHTS, ISSUED OR PENDING, AND THE ABSENCE OF LATENT OR OTHER DEFECTS,
WHETHER OR NOT DISCOVERABLE.  NOTHING IN
THIS AGREEMENT SHALL BE CONSTRUED AS A REPRESENTATION MADE OR WARRANTY GIVEN BY
LICENSOR THAT THE PRACTICE BY LICENSEE OF THE LICENSE GRANTED HEREUNDER SHALL
NOT INFRINGE THE PATENT RIGHTS OF ANY THIRD PARTY.

 

ARTICLE 13—REPRESENTATIONS AND WARRANTIES OF
LICENSEE.

 

LICENSEE represents and warrants to LICENSOR as follows:

 

20

 

13.1         Existence and Good
Standing: Power and Authority.  LICENSEE
is a limited liability company duly organized, validly existing and in good
standing under the laws of the state of California.  LICENSEE has full corporate power and
authority to make, execute, deliver and perform this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.  The execution, delivery and performance of
this Agreement by LICENSEE and the consummation by it of the transactions
contemplated hereby, have been duly authorized and approved by all required
corporate action of LICENSEE and no other action on the part of LICENSEE is
necessary to authorize the execution, delivery and performance of this Agreement
by LICENSEE and the consummation of the transaction contemplated hereby.  This Agreement has been duly executed and
delivered by LICENSEE and is a valid and binding obligation of LICENSEE
enforceable against it in accordance with its terms, except to the extent that
its enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles.

 

13.2         Authorization and
Validity of Agreement.  LICENSEE has
full power and authority, including full corporate power and authority, to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby.  Without limiting the foregoing, the execution,
delivery and performance of this Agreement by LICENSEE and the consummation by
it of the transactions contemplated hereby, have been duly authorized and
approved by the members and managers of LICENSEE, and no other action on the part
of LICENSEE or its officers, directors or shareholder is necessary to authorize
the execution, delivery and performance of this Agreement by LICENSEE and the
consummation of the transactions contemplated hereby.  This Agreement has been duly executed and
delivered by LICENSEE and is a valid and binding obligation of LICENSEE
enforceable against it in accordance with its terms, except to the extent that
its enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles.

 

13.3         Consents and
Approvals; No Violations.  The
execution, delivery and performance of this Agreement by LICENSEE and the
consummation by LICENSEE of the transactions contemplated hereby will not, with
or without the giving of notice or the lapse of time or both: (a) violate,
conflict with, or result in a breach or default under any provision of the
organizational documents of LICENSEE; (b) violate any statute, ordinance, rule
or regulation applicable to LICENSEE, (c) violate any order, judgment or decree
of any court or of any governmental or regulatory body, agency or authority
applicable to LICENSEE or by which any of the LICENSED TECHNOLOGY may be bound;
or (d) require any filing by LICENSEE with, or require LICENSEE to obtain any
permit, consent or approval of, or require LICENSEE to give any notice to, any
governmental or regulatory body, agency or authority, except filings, if any,
which may be required under the “Blue Sky” laws of Massachusetts or as may be
required in the future to comply with governmental regulations governing the
production and sale of products by LICENSEE as it conducts its business.

 

21

 

13.4         Survival of
Representations and Warranties.

 

(a)           Except as otherwise
provided herein, notwithstanding any investigation at any time made by or on
behalf of any Party hereto, the representations and warranties set forth herein
and in any certificate delivered in connection herewith with respect to any of
those representations and warranties will survive the Effective Date until the
longer to occur of: (i) two (2) years or (ii) the expiration of the applicable
statutes of limitation, including all periods of extension and tolling
whereupon they will terminate and expire.

 

(b)           After a
representation and warranty has expired, as provided in Subsection 13.4(a),
no claim for claims or costs may be made or prosecuted by any Person who would
have been entitled to claims or costs on the basis of that representation and
warranty prior to its termination and expiration, provided that no claim
presented in writing for claims or costs to the Person or Persons from which or
whom those damages are sought on the basis of that representation and warranty
prior to its termination and expiration will be affected in any way by that
termination and expiration.

 

ARTICLE 14 – LIMITATION OF LIABILITY

 

EXCEPT FOR ANY LIABILITY TO ANY THIRD PARTIES PURSUANT TO ARTICLE 8 OR
TO A PARTY PURSUANT TO ARTICLES 12 AND 13 OF THIS AGREEMENT, IN NO EVENT SHALL
LICENSOR OR LICENSEE OR THEIR, ITS DIRECTORS, OFFICERS, EMPLOYEES OR AFFILIATES
BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING
ECONOMIC DAMAGE OR INJURY TO PROPERTY AND LOST PROFITS, REGARDLESS OF WHETHER
LICENSOR OR LICENSEE SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN
FACT SHALL KNOW OF THE POSSIBILITY OF SUCH DAMAGES.

 

ARTICLE 15 - MISCELLANEOUS PROVISIONS

 

15.1         CORPORATE PARTNERSHIPS.
 In the event LICENSEE enters into a
corporate partnership for the joint development of any of the LICENSED
TECHNOLOGY, and LICENSEE sublicenses the LICENSED TECHNOLOGY to a third party,
then payments required hereunder shall not include funds provided for sponsored
research or equity investments by any third party so long as such payments do
not constitute a majority of funds transferred by such third party.  However if the sponsored research involves
fees in excess of industry standard reimbursement for FTEs or equity investment
in excess of fair market value, LICENSEE shall pay to LICENSOR a royalty on
such excess fees calculated at the rates specified herein.

 

15.2         LICENSEE “REVERSE
LICENSE” TO LICENSOR.  LICENSEE agrees to
license to LICENSOR on a non-exclusive basis for therapeutic uses in the
treatment of blood and

 

22

 

cardiovascular
diseases the rights to any technology it currently owns or has licensed or
develops or licenses in the future that is applicable to such diseases
(excluding however the use of proprietary techniques now or hereafter developed
by LICENSEE for the enhanced vascularization of transplanted cells or tissues).
 Such license shall provide for royalty
payments at the same rate as LICENSEE’S royalty payments to LICENSOR hereunder
as provided in Section 4.2(a).  Such
license will be sublicensable only once in a given field of use; or for the
purpose of having products produced, made, or distributed; or in connection
with a merger or consolidation of LICENSOR into another company or a sale of
all or substantially all of the assets of LICENSOR.  LICENSEE shall also have no obligations
hereunder with respect to technology licenses it has or may acquire if such
licenses restrict sublicensing in a manner inconsistent with this subparagraph.
 Such “Reverse License shall not apply to
any rights acquired by LICENSEE under Section 15.18 hereof.

 

15.3         FUTURE TECHNOLOGY
LICENSES.  LICENSOR acknowledges that it
is continuing to develop cell-based technology, the existence or significance
of which it may not have disclosed to LICENSEE.  Therefore, LICENSOR further agrees that in the
event any of its technology now perfected or pending as of the date of this
agreement but not specifically enumerated herein would inhibit or adversely
affect the commercial use by LICENSEE of the PATENT RIGHTS in the field,
LICENSOR shall waive any claim of infringement to the extent necessary to
permit LICENSEE to continue the use of the PATENT RIGHTS under this Agreement.  In addition, LICENSOR agrees to license to
LICENSEE on a non-exclusive basis for uses in the FIELDS, including any rights
acquired under Section 15.18 hereof, the rights to any technology it currently
owns or has licensed or develops or licenses in the future that is applicable
to such FIELDS (but specifically excluding applications involving the use of
cells in the treatment of tumors where the primary use of the cells is the
destruction or reduction of tumors and does not involve regeneration of tissue
or organ function).  Such license shall
provide for royalty payments at the same rate as LICENSEE’S royalty to LICENSOR
hereunder as provided in Section 4.2(a).  Such license will be sublicensable only once
in a given field of use; or for the purpose of having products produced, made,
or distributed; or in connection with a merger or consolidation of LICENSEE
into another company or a sale of all or substantially all of the assets of
LICENSEE.  LICENSOR shall also have no
obligations hereunder with respect to technology licenses it has or may acquire
if such licenses restrict sublicensing in a manner inconsistent with this
subparagraph.

 

15.4         LICENSEE shall comply
with all local, state, federal and international laws and regulations relating
to the development, manufacture, use, provision, and sale of LICENSED PRODUCTS,
LICENSED PROCESSES and LICENSED SERVICES.  Without limiting the generality of the
foregoing, LICENSEE agrees to comply with the following:

 

a)              LICENSEE shall obtain all necessary
approvals from the FDA, USDA, or any similar governmental authorities of any
foreign jurisdiction in which LICENSEE intends to make, use, or sell LICENSED
PRODUCTS or to perform LICENSED PROCESSES or LICENSED SERVICES.

 

23

 

b)             LICENSEE shall comply fully with any and
all applicable local, state, federal and international laws and regulations
relating to the LICENSED PRODUCTS, LICENSED PROCESSES and LICENSED SERVICES,
and the PATENT RIGHTS, in the TERRITORY, 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 LICENSED PRODUCTS, LICENSED PROCESSES or LICENSED SERVICES and any
technology relating thereto.  LICENSEE
hereby gives written assurance that it will comply with all such import or
export laws and regulations (including without limitation all Export
Administration Regulations of the United States Department of Commerce), that
it bears sole responsibility for any violation of such laws and regulations,
and that it will indemnify, defend, and hold LICENSOR and the University
harmless (in accordance with Article 8) for the consequences of any such
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, LICENSEE
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 a domestic
manufacturer is not commercially feasible under the circumstances, LICENSOR
and/or the University may seek a waiver of this requirement from the relevant
federal agency on behalf of LICENSEE and, upon LICENSEE’S request, shall
cooperate with LICENSEE in seeking such a waiver.

 

15.5         LICENSEE shall not
create or incur or cause to be incurred or to exist any lien, encumbrance,
pledge, charge, restriction or other security interest of any kind upon the
PATENT RIGHTS, but may cause to be incurred or to exist a lien, encumbrance,
pledge, charge, restriction or other security interest on its rights to the
LICENSED TECHNOLOGY hereunder, provided such security interest does not affect
LICENSOR’s rights to the LICENSED TECHNOLOGY, or any of LICENSOR’s rights under
this Agreement.

 

15.6         Neither Party 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 or delayed, 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, LICENSOR and LICENSEE 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 applicable securities laws or other applicable law or regulation,
provided that such Party shall

 

24

 

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.

 

15.7         No implied licenses
are granted pursuant to the terms of this Agreement.  No licensed rights shall be created by
implication or estoppel.

 

15.8         Nothing herein shall
be deemed to constitute either Party as the agent or representative of the
Party, or both parties as joint venturers or partners for any purpose.  Each Party shall be an independent contractor,
not an employee or partner of the other Party, and the manner in which each
Party renders its services under this Agreement shall be within its sole
discretion.  Neither Party shall be
responsible for the acts or omissions of the other Party, nor shall either
Party have authority to speak for, represent or obligate the other Party in any
way without prior written authority from the other Party.

 

15.9         To the extent
commercially feasible, and consistent with prevailing business practices and
applicable law, all LICENSED PRODUCTS sold pursuant to this Agreement will be
marked with the number of each issued patent that applies to such LICENSED
PRODUCTS.

 

15.10       This Agreement shall be
construed, governed, interpreted and applied in accordance with the laws of the
State of California, U.S.A. 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.

 

15.11       The Parties hereto
acknowledge that this Agreement sets forth the entire Agreement and
understanding of the Parties hereto as to the subject matter hereof, and shall
not be subject to any change or modification except by the execution of a
written instrument signed by the Parties hereto.

 

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

 

15.13       The failure of either
Party to assert a right hereunder or to insist upon compliance with any term or
condition of this Agreement shall not constitute a waiver of that right or
excuse a similar subsequent failure to perform any such term or condition by
the other Party.

 

15.14       This Agreement may not
be assigned by LICENSEE without the prior written consent of LICENSOR, which
consent shall be granted or denied in LICENSOR’s sole discretion.  LICENSOR may not assign this Agreement without
the consent of LICENSEE, which consent shall not be unreasonably withheld or
delayed, except that LICENSOR may assign this Agreement to an affiliate or to a
successor in connection with the merger, consolidation, or

 

25

 

sale of all or
substantially all of its assets or that portion of its business to which this
Agreement relates.  Notwithstanding the
foregoing to the contrary, this restriction on the assignment by LICENSEE of
this Agreement shall not prevent the assignment of this Agreement in connection
with a merger or consolidation of LICENSEE into another company or a sale of
all or substantially all of the assets of LICENSEE, so long as the purchaser of
the assets agrees to assume to any and all outstanding liabilities to LICENSOR
under this Agreement, including but not limited to any outstanding amounts
under the promissory note referred to in Section 4.1.

 

15.15       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.”  The section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.

 

15.16       This Agreement may be
executed in counterparts, each of which together shall constitute one and the
same Agreement.

 

15.17       All rights and
licenses granted under or pursuant to this Agreement by LICENSOR to LICENSEE
are, and shall otherwise be deemed to be, for purposes of Paragraph 365(n) of
the U.S. Bankruptcy Code (the “Code”), licenses to rights in “intellectual
property” as defined in the Code.  The
Parties hereto agree that LICENSEE, as a LICENSEE of such rights under this
Agreement, shall retain and may fully exercise all of its rights and elections
under the Code.  The Parties hereto
further agree that, in the event of the commencement of a bankruptcy proceeding
by or against LICENSOR including a proceeding under the Code, LICENSEE shall be
entitled to a complete duplicate of (or complete access to, as appropriate) any
such intellectual property and all embodiments of such intellectual property,
including the PATENT RIGHTS and KNOW-HOW, and the same, if not already in
LICENSEE’s possession, shall be promptly delivered to LICENSEE upon any such
commencement of a bankruptcy proceeding upon written request therefore by
LICENSEE.

 

15.18       In addition to the
other rights granted herein, LICENSOR hereby grants to LICENSEE a 90 day right
of negotiation with respect to any technology that would constitute LICENSED
TECHNOLOGY if the FIELD included diseases related either to the heart or to
neuro degenerative diseases (the “Added Fields”) prior to LICENSOR entering
into any license relating to either of such Added Fields) with a third party.  Such a 90 day period shall commence on the
earlier of the 12 month anniversary of the Effective Date, or such date when
LICENSOR notifies LICENSEE that it has opened negotiations with a third party
or that a third party has made inquiry about such a license.  If following the expiration of any such 90-day
negotiation period LICENSEE and LICENSOR have not entered into a license for an
Added Field, LICENSOR shall be free to enter into an exclusive or non-exclusive
license for such Added Field with any third party.  If LICENSOR enters into a non-exclusive
license for an Added Field with a third party following the 90-day negotiating
period hereunder, LICENSOR shall offer a non-exclusive license to LICENSEE on
comparable terms as those entered into with such third party.

 

26

 

LICENSEE shall
then have 30 days to enter into such a nonexclusive license.  If LICENSEE does not enter into such a license
within said 30-day period, LICENSOR shall have no further obligations relating
to the Added Field.

 

15.19       LICENSEE shall
acknowledge LICENSOR as [co-marketer] through equal size lettering on the packaging
of ACT ANIMAL CELLINES.

 

IN WITNESS WHEREOF, the Parties have duly executed this Agreement on
the EFFECTIVE DATE.

 

ADVANCED CELL TECHNOLOGY, INC.

 

 

	
  By:

  	
  /s/ Michael D.
  West                                                    5-14-04

  	
   

  
	
  Printed Name:  Michael D. West,
  Ph.D.

  	
   

  
	
  Title:  President & Chief
  Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  PACGEN CELLCO, LLC

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Kenneth
  Aldrich                                                   5-14-04

  	
   

  
	
  Printed Name: Kenneth Aldrich

  	
   

  
	
  Title:  Managing Member

  	
   

  

 

27

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