Document:

Exhibit 10.12

 

NONEXCLUSIVE
SUBLICENSE AGREEMENT

between

ADVANCED CELL TECHNOLOGY, INC.

and

INFIGEN, INC.

 

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

 

RECITALS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

1.6                            “Infigen Field” means:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

1.11                           “Territory” means the world.

 

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

 

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

 

1.14.                        “University” means the University of Massachusetts.

 

1.15                           “Valid Claim” means a claim of an issued or pending patent
which has not lapsed or become abandoned or declared invalid or unenforceable
by a court of competent jurisdiction or an administrative agency from which no
appeal can be or has been taken within the time allowed for that appeal.

 

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

 

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2.                                      THE FINAL SETTLEMENT AGREEMENT.

 

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

 

3.                                      GRANT
OF RIGHTS.

 

3.1                                 License Grants from
ACT to Infigen.

 

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

 

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

 

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

 

3.2                                 License Grant from
Infigen to ACT.

 

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

 

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

 

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

 

3.3                                 Disclosure of Licensed Patents and Patent
Applications.

 

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

 

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

 

4.                                      OBLIGATIONS
RELATING TO COMMERCIALIZATION.

 

4.1                                 Diligence Requirements.

 

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

 

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

 

6

 

4.2                                 Summary Reports by Infigen.

 

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

 

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

 

4.3                                 Failure to Fulfill
Obligations.

 

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

 

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

 

5.                                      TERM
AND TERMINATION.

 

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

 

7

 

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

 

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

 

5.3                                 Effect of Termination.  The
rights and obligations of the parties under Sections 7.4, 8.l,
8,2.10.1,10.2,10.3, and 11 shall survive termination of this Agreement and
continue in force.  Upon the termination
of this Agreement, each party and its respective Sublicensees (i.e., ACT
Sublicensee or Infigen Sublicensee) may complete and sell any work-in-progress
and inventory of ACT Products or Infigen Products and perform any ACT Services
or Infigen Services which they are obligated to perform under contracts with
third parties, as applicable, that exist as of the effective date of
termination, provided that (i) ACT and/or Infigen, as applicable, is
current in payment of all amounts due to the other party under this Agreement, (ii) ACT
or Infigen, as applicable, pays the other party the applicable royalty on such
sales of ACT Products or Services or Infigen Products or Services, as
applicable, in accordance with the terms of this Agreement, and (iii) ACT
and/or Infigen and its respective Sublicensees (i.e., ACT Sublicensee or
Infigen Sublicensee), as applicable, shall complete and sell all
work-in-progress and inventory of such ACT Products or Infigen Products and
complete its obligations to perform any ACT Services or Infigen Services, as
applicable, within six (6) months after the effective date of termination.
 Upon any termination of this Agreement,
each party shall promptly return to the other party all written Confidential
Information, and all copies thereof, to the other party.

 

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

 

6.                                      CONSIDERATION.

 

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

 

6.2                                 License Fees.

 

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

 

8

 

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

 

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

 

6.3                                 Royalties, Reports and Records.

 

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

 

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

 

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

 

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

 

6.4                                 Sublicense Income.

 

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

 

9

 

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

 

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

 

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

 

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

 

6.6                                 Audit Rights

 

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

 

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

 

10

 

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

 

7.                                      PROPRIETARY RIGHTS.

 

7.1                                 Ownership.

 

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

 

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

 

7.2                                 ACT Patent Rights.

 

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

 

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

 

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

 

11

 

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

 

7.3                                 Infigen Patent Rights

 

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

 

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

 

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

 

12

 

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

 

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

 

8.                                      CONFIDENTIAL
INFORMATION.

 

8.1.                              Confidential Information; Non-Disclosure.  Except
to the extent expressly authorized by this Agreement or by other prior written
consent by the disclosing party, each party shall during the term of this
Agreement and for a period of five (5) years thereafter: (i) treat as
confidential all Confidential Information of the disclosing party; (ii) not
use such Confidential Information except as authorized herein or otherwise authorized
in writing, (iii) implement reasonable procedures to prohibit the
disclosure, unauthorized duplication, misuse or removal of the disclosing party’s
Confidential Information; (iv) except as set forth in (v) below, not
disclose such Confidential Information to any third party, and (v) only
disclose the Confidential Information to those of its employees, sublicensees,
customers and third party contractors who have need to know such Confidential
Information.  Without limiting the
foregoing, each of the parties shall protect the Confidential Information using
at least the same procedures and degree of care that it uses to prevent the
disclosure of its own confidential information of like importance, but in no
event less than reasonable care.

 

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

 

13

 

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

 

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

 

9.                                      REPRESENTATIONS
AND WARRANTIES.

 

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

 

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

 

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

 

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

 

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

 

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

 

14

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

9.4                                 Disclaimer.

 

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

 

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

 

10.                               INDEMNIFICATION.

 

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

 

15

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

16

 

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

 

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

 

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

 

13.                               MISCELLANEOUS.

 

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

 

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

 

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

 

17

 

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

 

	
   

  	
  Infigen

  
	
   

  	
  1825 Infinity Drive

  
	
   

  	
   

  
	
   

  	
  De Forest, WI, 53532

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attn: Walter Simson, CEO 

  
	
   

  	
   

  	
  Fax:

  	
  608 846-0520

  
					

 

With a copy
to Roberta Howell, Esq.

 

Foley and
Lardner

 

Verex Plaza

 

150 East
Gilman Street

 

Madison, WI

 

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

 

Advanced
Cell Technology, Inc.

One
Innovation Drive

Worcester,
Massachusetts 01605

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

Fax:    508-756-0931

 

with a copy
to:

 

Pierce
Atwood

One Monument
Square

Portland,
Maine 04101

Attn:  William
L. Worden, Esq.

Fax:  207-791-1350

 

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

 

18

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

19

 

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

 

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

 

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

 

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

 

13.13                     Publicity.  Neither party, nor any of its
Affiliates, shall originate any publicity, news release or other public
announcement (“Announcements”), written or oral, relating to this Agreement or
the existence of an arrangement between the parties, without the prior written approval
of the other party, which approval shall not be unreasonably withheld, except
as otherwise required by law.  Any
references to the University in such Announcements shall be subject to the
approval of the University.  The
foregoing notwithstanding, ACT and Infigen shall have the right to make such
Announcements without the consent of the other party or the University, as
applicable, in any prospectus, offering memorandum, or other document or filing
required by securities laws or other applicable law or regulation, and to
potential business partners under an industry-standard confidentiality
agreement, provided that such party shall have given the other party or the
University, as applicable, at least ten (10) days’ prior written notice of
the proposed text for the purpose of giving the other party or the University,
as applicable, the opportunity to comment on such text.

 

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

 

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

 

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

 

20

 

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

 

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

 

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

 

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

 

21

 

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

 

	
  ADVANCED CELL TECHNOLOGY, INC.

  	
  INFIGEN, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Michael West

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Signature

  	
   

  	
   

  	
  Signature

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MICHAEL WEST

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Printed
  Name

  	
   

  	
   

  	
  Printed
  Name

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PRESIDENT

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  	
   

  	
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  8-5-03

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Date

  	
   

  	
   

  	
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22

 

SCHEDULE C

to

Nonexclusive Sublicense Agreement

 

 

August 1, 2003

 

 

Advanced Cell Technology, Inc.

One Innovation Drive

Worcester, MA 01605

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

University of Massachusetts

Office of the General Counsel

One Beacon Street, 26th Floor

Boston, MA 02108

 

Infigen, Inc.

1825 Infinity Drive

DeForest, Wisconsin 53532

Attention:

 

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

 

Reference is made to the License Agreement
identified above.

 

ACT, the University of Massachusetts (the “University”)
and LICENSEE agree that, in the event the UMASS LICENSE (as defined in the
License Agreement) expires or is terminated for any reason pursuant to the
provisions of the UMASS LICENSE or otherwise, (i) LICENSEE will thereafter
pay directly to the University any payments due to ACT under the License
Agreement which are reasonably attributable to the University technology or
subject matter of the UMASS LICENSE, and (ii) promptly following such
termination, the University and LICENSEE will enter into a direct license
agreement reflecting the applicable terms of the License Agreement and the
UMASS LICENSE. For the avoidance of doubt, the references to “Sublicensees” in Section 8.5
of the UMASS LICENSE shall not apply to LICENSEE and shall not be construed as
vitiating the provisions of Section 5.3 of the License Agreement.  ACT and the University agree that the
provisions of Section 2.2 of the UMASS LICENSE providing for the automatic
assignment to the University of sublicenses granted by ACT under said Section 2.2
shall not apply to the sublicense by ACT to LICENSEE under the License
Agreement, and that the provisions of Section 5.3 of the License Agreement
shall govern in the event that the UMASS LICENSE is terminated. ACT and the
University agree that LICENSEE will not be bound by any amendment to the UMASS
LICENSE that affects LICENSEE’s rights under the License Agreement in any
material respects, unless LICENSEE agrees in writing to such amendment. Neither
ACT nor the University will make any change or addition to, or otherwise amend,
theExhibit
10.13

 

EXCLUSIVE LICENSE AGREEMENT

 

This Exclusive License Agreement (“Agreement”) is made and
entered into as of October 22nd, 2003 (the “Effective
Date”), by and between Advanced Cell Technology, Inc., a Delaware
corporation with offices located at One Innovation Drive, Worcester,
Massachusetts 01605 (“ACT”), and Exeter Life Sciences, Inc., an
Arizona corporation with offices located at 4455 Camelback Road, Phoenix,
Arizona 85018 (“Licensee” or “EXETER”) (ACT and Licensee
sometimes hereinafter referred to as the “parties”, or individually as a
“party”).

 

WITNESSETH

 

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

 

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

 

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

 

WHEREAS, such license is subject to the terms and conditions of the UMASS
License (as defined below) applicable to sublicensees, as incorporated herein;

 

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 Technology” means know-how,
technical information, research and development information, test results,
knowledge, inventions, discoveries, developments, methods, techniques,
improvements, designs, drawings, specifications, schematics, software programs
(including, without limitation, source and object codes), manuals and other documentation,
data, databases, processes, methods of production and other information and materials,
whether tangible or intangible, owned or controlled by or licensed to ACT or
its Affiliates during the term of this Agreement relating to the Patent Rights.
 For the avoidance of doubt, it is the
parties’ intention that ACT Technology covers unpatented items of the type articulated
above, and that in appropriate circumstances, certain ACT Technology may in the
future become included within the Patent Rights (as defined below).

 

1.2         “Affiliate” means a corporation,
partnership or other entity that is controlled by a

 

 

 

 

party,
but only so long as such control continues to exist.  For purposes of this Section 1.2, “control”
means ownership, directly or indirectly, of at least fifty percent (50%) of the
voting rights in such entity (or, in the case of a noncorporate entity,
equivalent rights).

 

1.3          “Combination Product” means a product
that contains a Licensed Product component and at least one other component
that could reasonably be sold separately and has economic value on its own.

 

1.4          “Cyagra Agreement” means the Exclusive
Sublicense Agreement between ACT and A.C.T. Group, Inc., on the one hand,
and Cyagra, Inc., on the other, signed on June 28, 2002, in the form
originally executed.

 

1.5          “Field of Use” means non-human animals
for agriculture, endangered animals and companion animals; excluding production of such animals for
the primary purpose of producing human and non-human animal therapeutics and
human healthcare products, including without limitation the production of
biopharmaceutical agents in milk, including, but not limited to, proteins,
peptides and polypeptides for pharmaceutical, nutraceutical or other use, and excluding the production of
immunoglobulin in the blood of Bos taurus and
Bos indicus.  Without limiting the generality of
the foregoing, and by way of illustration but not limitation, each subfield
within the “Field of Use” includes:

 

(a) the cloning,
development, making, using, selling, offering to sell, importing or exporting
of cloned non-human animals, including without limitation, bovine, hircine,
ovine, porcine, equine animals and ungulates (as well as any transgenic
variants or enhancements thereto) or products that are composed of, made in or
derived, extracted or isolated from cells or tissues of such animals for the
production of food or fiber, and the rendering of services or uses that relate
to the production of such products (“Agricultural Animals Subfield”);

 

(b) the cloning,
development, making, using, selling, offering to sell, importing or exporting
of “Endangered Species” for purposes of researching, aiding, reproducing or
assisting in the reproduction of such Endangered Species (“Endangered
Species Subfield”).  “Endangered Species”
includes without limitation any species that is or has ever been (i) extinct
or (ii) classified as threatened, vulnerable or in danger of extinction
throughout all or a significant portion of its range by any governmental or
international authority, treaty, law or regulation or (iii) classified
under the guidelines of the Convention of International Trade of Endangered Species
of Wild Fauna and Flora;

 

(c) the cloning,
development, making, using, selling, offering to sell, importing or exporting
of hircine, ovine, feline, canine and equine animals (as well as any transgenic
variants or enhancements thereto) for personal, business or commercial
purposes, specifically excluding the sale of these animals as scientific
research laboratory subjects (“Companion Animals Subfield”); and

 

(d) the cloning,
development, making, using, selling, offering to sell, importing or exporting
of cloned equine animals (as well as any transgenic variants or enhancements
thereto)

 

2

 

or products
that are composed of, made in or derived, extracted or isolated from cells or
tissues of such animals for nontherapeutic purposes, including but not limited
to, for use in agriculture, for use as food, for use as companion, service,
work or recreational animals, or for use as racing or other equine event
animals, and the rendering of services or uses that relate to the production of
such products (“Equine Subfield”).

 

1.6          “Improvement Patents” means any inventions, invention disclosures,
patents and patent applications (other than the Patent Rights) (a) issued
or licensed to, or made, filed, owned or controlled by, ACT or its Affiliates
(including its and their employees and agents) or licensed to ACT or its
Affiliates from the University of Massachusetts (the “University”) and (b) (i)
relating to the specification or claims of the Patent Rights, or (ii) useful,
necessary or required to develop or manufacture cloned and/or transgenic
non-human animals and cloned and/or transgenic cells and tissues from non-human
animals within the Field of Use (including, without limitation, (x)
improvements relating to the Patent Rights in Exhibit A and (y) any
rights obtained directly or indirectly from AUROX LLC, Hematech LLC or
Nucleotech LLC (each with offices at 33 Riverside Ave., 2nd Floor, Westport, CT
06880) relating to the Patent Rights); together in each case with all related
continuation, continuation-in-part, divisional, reissue, revision, extension,
substitution and reexamination patents and patent applications, and all corresponding
foreign patents and patent applications and other counterparts of the patents described
herein.  Notwithstanding the foregoing, “Improvement
Patents” does not include any Robl Patents (including UMass Robl Rights) or any
rights or benefits obtained by Licensee pursuant to Section 7.6 (Patent
Interference Proceeding), which Robl Patents and rights and benefits shall be
licensed and provided to Licensee in accordance with Section 1.10 (and Section 7.4)
and Section 7.6, respectively, at no charge to Licensee.

 

1.7          “Licensee” means Exeter Life Sciences, Inc., an Arizona
corporation with offices located at 4455 Camelback Road, Phoenix, Arizona
85018.

 

1.8          “Licensed Product” means any product:

 

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

 

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

 

Without limiting the generality of the foregoing, and by way of
illustration but not limitation, Licensed Products may include cloned and/or
transgenic non-human animals (and any transgenic variants or enhancements
thereto) in the Agricultural Animals Subfield; cloned cats, dogs and horses
(and any transgenic variants or enhancements thereto) in the Companion Animals
Subfield; and the progeny of all such animals and semen, ova and embryos
obtained from such animals.

 

1.9         “Licensed Service” means any service
that would infringe one or more Valid

 

3

 

Claims under the Patent
Rights, but for the licenses granted hereunder.

 

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

 

(a)               discounts allowed;

 

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

 

(c)               packaging, transportation and insurance prepaid or
allowed; and

 

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

 

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

 

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

 

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

 

1.11        “Patent Rights” means (a) the
inventions, invention disclosures, patent applications and patents listed in Exhibit A
(“Inventions”); (b) any patents or patent applications claiming
inventions disclosed in the Inventions; (c) any continuations,
continuations-in-parts, or divisionals of, or other patent applications
claiming priority to, patent applications identified in the preceding
subsections (a) or (b) and patents issuing therefrom; (d) any
extension, renewal, reexamination, substitution, or reissue of a patent
identified in subsections (a), (b), or (c); and (e) all foreign equivalents of
subsections (a), (b), (c) and (d). Any Robl Patents (including UMass Robl
Rights) directly or indirectly owned or controlled by or licensed to the University
or ACT or its Affiliates during the term of this Agreement shall be deemed
Patent Rights.

 

1.12        “Robl Patents” means any and all of (a) the
patent applications and patents issued on or claiming priority from the U.S.
provisional patent applications 60/258,152 or 60/258,151 or

 

4

 

the U.S.
patent applications 10/015,824 or 10/032,191 or the PCT applications
PCT/US01/47882 or PCT/US01/50406, (b) any other patent applications filed
on inventions that James Robl participated in the development, description
and/or conception of related to inventions disclosed in the patent applications
identified in (a), and any other rights, licenses, immunities or interests that
ACT or the University acquires or obtains in connection with resolving
ownership issues relating to the items in (a); (c) any continuations,
continuations-in-parts, or divisionals of, or other patent applications
claiming priority to, patent applications identified in the preceding subsection (a) or
(b) and patents issuing therefrom; (d) any extension, renewal,
reexamination, substitution, or reissue of a patent identified in subsections
(a), (b) or (c); and (e) all foreign equivalents of subsections (a),
(b), (c), and (d).

 

1.13         “Sublicense Income” means consideration that Licensee receives for
granting a sublicense pursuant to Section 2.2 of this Agreement to any
third party not an Affiliate of Licensee, by way of sublicense or other form of
agreement, including without limitation license fees, royalties, milestone
payments, equity, up-front fees, success fees and license maintenance fees, but
excluding payments specifically committed to the development of Licensed
Products or Licensed Services.  For the
avoidance of doubt, “Sublicense Income” excludes payments made in consideration
for the issuance of equity or debt securities of Licensee up to fair market
value.

 

1.14         “Territory” means the world.

 

1.15         “UMASS License” means the Exclusive License Agreement between ACT
and the University, effective as of April 1, 2003, a copy of which is
attached hereto as Exhibit C, as it may be amended from time to
time after the Effective Date (but excluding any amendments or portions thereof
to the extent not consented to by Licensee).

 

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

 

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

 

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

 

5

 

Additional
terms may be defined throughout this Agreement.

 

ARTICLE 2 - GRANT

 

2.1           (a)           License
Grant.  Subject to the terms and conditions of this
Agreement, ACT hereby grants to Licensee a royalty-bearing, exclusive (even as
to ACT), transferable (in accordance with Section 12.1), sublicensable
license, under its rights in the Patent Rights and ACT Technology, to develop,
make, have made, use, sell, have sold, offer to sell, import, export,
reproduce, distribute, make derivative works based on, perform and display, and
otherwise dispose of Licensed Products, to develop and perform Licensed
Services, and to use and practice any process; art or method, and to use and
incorporate the ACT Technology in products and services, in the Territory in
the Field of Use; provided, however, that the exclusive nature of the license
granted herein shall be subject to the rights of the licensee(s) identified in
the license agreement(s) described in Exhibit B attached hereto
(the “Pre-Existing License”). Licensee acknowledges that the
Pre-Existing License shall remain in effect in accordance with the terms of
said agreement(s) without modification.  This Agreement is subject to the relevant
terms of the UMASS License applicable to sublicensees as such terms have been
incorporated herein, as the UMASS License may be amended from time to time, provided
that (i) as provided in Section 2.1(b) below, the UMASS
License may not be amended in a manner that materially and adversely affects
the rights and benefits extended to Licensee hereunder without the prior
written consent of Licensee, and (ii) in the event of any inconsistency
between the UMASS License and Section 2.1(b) hereof, Section 2.1(b) hereof
shall govern.  ACT agrees to provide
Licensee with prior written notice of any amendments to the UMASS License and
provide Licensee with the opportunity to consent to such amendments, in whole
or part, in which case this Agreement will be subject to such amendments to the
extent consented to by Licensee.

 

(b)           The UMASS License.  Licensee acknowledges that the UMASS Patent
Rights licensed to Licensee hereunder are owned by the University and are
licensed to ACT under the UMASS License.  ACT, the University and Licensee agree that,
in the event the UMASS License is terminated for any reason (or this Agreement
is rejected by ACT in bankruptcy or terminated by Licensee pursuant to Section 8.2
or 8.7), (i) promptly following such termination (or rejection) of the
UMASS License, the University shall directly license the UMASS Rights to
Licensee in a license agreement with the terms of such license agreement no
less favorable than the UMASS License and Licensee will thereafter make any
payments due to ACT directly to the University during the term of this
Agreement; and (ii) Licensee shall not be liable for any payments that may
be due and payable to the University by ACT.  ACT AND THE UNIVERSITY ACKNOWLEDGE AND AGREE
THAT LICENSEE SHALL BE ENTITLED TO SPECIFIC PERFORMANCE OF THE UNIVERSITY’S
OBLIGATIONS UNDER THIS SECTION 2.1(b). 
ACT acknowledges and agrees that any payments so made by Licensee to the
University shall be credited against any payments due and payable to ACT
hereunder.  For the avoidance of doubt,
ACT and the University agree that Section 8.5 of the UMASS License shall
not apply to Licensee on any expiration or termination of the UMASS License and
shall not be construed as vitiating the provisions of this Agreement (including
Sections 2.1(a) and this Section 2.1(b)).  ACT and the University agree that the
provisions of this Section 2.1(b) shall govern in the event that the

 

6

 

UMASS
License is terminated.  ACT and the
University agree that Licensee will not be bound by any amendment to the UMASS
License that adversely affects Licensee’s rights or obligations under this
Agreement in any material respect, unless Licensee agrees in writing to such
amendment.  For the avoidance of doubt,
ACT and the University agree that Licensee has no obligations to the University
under the UMASS License, including without limitation any obligation to make
any payments to the University thereunder.

 

2.2           Sublicenses to Patent Rights.  Licensee
shall have the right to grant further sublicenses to or under the Patent
Rights. Licensee shall make reasonable commercial efforts to provide ACT with a
copy of all sublicense agreements of the Patent Rights prior to execution, which
shall be deemed Licensee’s Confidential Information subject to the provisions
of Article 9 of this Agreement, provided that failure to provide a copy
prior to execution shall not be deemed a material breach of this Agreement.  Licensee shall report to ACT annually
regarding the progress of its sublicensees in developing Licensed Products.  Licensee shall include in its sublicense
agreements the right to terminate sublicenses of the Patent Rights where its sublicensees
fail to make reasonable progress toward commercial application of Licensed Products.
 Licensee may not transfer the rights to
grant further sublicenses of the Patent Rights in sublicense agreements, unless
the sublicense agreement grants the exclusive right to practice technology in a
limited field.  Licensee may not grant its
sublicensees of the Patent Rights the right to transfer sublicensing rights to
their sublicensees.  Licensee shall
require in every sublicense agreement of the Patent Rights the receipt of fair
value (which may be the form of royalties, lump sum payments, or equity) in
exchange for the sublicense, which assessment of fair value may be made by
Licensee in its sole discretion.

 

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

 

2.4           Right of First Negotiation.  Notwithstanding
anything to the contrary in this Agreement, in the event that ACT acquires,
licenses, controls or otherwise comes to have rights in or to any Improvement
Patents, Licensee shall have a right of first negotiation to obtain an exclusive
or, at Licensee’s option, non-exclusive right and license to such Improvement
Patents and all related intellectual property rights in the Field of Use to the
maximum extent of ACT’s rights to grant such a license.  ACT shall promptly notify Licensee upon
obtaining any such rights and shall, prior to any discussion with any third
party, present to Licensee, a proposal of terms and conditions both to obtain
an (x) exclusive or (y) nonexclusive right and license to such Improvement
Patents and all related intellectual property rights in the Field of Use.  In the event that Licensee and ACT have not
agreed upon the terms and conditions pursuant to which Licensee would receive
such a right and license within 120 days after Licensee’s receipt of ACT’s
proposal, ACT shall be free to discuss terms and conditions for granting of
rights and

 

7

 

license with
respect to such specific Improvement Patent(s) with any third party without
further obligation to Licensee; provided, however, that no right or license
with respect to any such Improvement Patent will be granted to a third party
within 12 months of the later of (i) termination of negotiations between
Licensee and ACT, or (ii) the expiration of the above mentioned 120 days,
under terms and conditions more favorable to the third party than the terms and
conditions last discussed with Licensee without first offering such more
favorable terms and conditions to Licensee for Licensee’s consideration and
possible acceptance.  Notwithstanding the
foregoing, to the extent that any Improvement Patent is subject to Cyagra, Inc.’s
right of first offer/negotiation as set forth in Section 2.3 of the Cyagra
Agreement, ACT’s obligation to present a proposal to Licensee and to negotiate
with Licensee in good faith shall be suspended (but only if an Improvement
Patent constitutes a Cyagra Development and only to the extent of Cyagra’s
specified fields of use) until the Option Period or, if applicable, the
Negotiation Period expires.  If ACT and
Cyagra, Inc. have executed a written license agreement to such Improvement
Patent within the scope of Cyagra’s option rights in Section 2.3 of the
Cyagra Agreement prior to such expiration, ACT’s obligations under this Section 2.4
shall not apply to those rights to the Improvement Patent thereby licensed to
Cyagra.  (Capitalized terms in the
preceding two sentences shall have the meanings ascribed to them in the Cyagra
Agreement, unless otherwise defined herein.)

 

ARTICLE 3 - LICENSEE OBLIGATIONS

RELATING TO COMMERCIALIZATION

 

3.1           Licensee shall use commercially reasonable
and diligent efforts to develop Licensed Products or Licensed Services and to
introduce Licensed Products or Licensed Services into the commercial market.  Licensee shall spend at least Two Hundred
Thousand Dollars ($200,000) per year for the first two (2) years and One
Hundred Thousand Dollars for the following six (6) months of the term of
this Agreement on research and development and other activities directed to the
commercialization of the Patent Rights and other University technology related
to the cloning of animals.

 

3.2           Licensee shall maintain complete and accurate
records of Licensed Products that are made or sold and Licensed Services that
are sold by Licensee under this Agreement. 
Not later than May 1st of each year following the
Effective Date, Licensee shall furnish ACT with an executive summary report on
the progress of its efforts during the prior year to develop and commercialize
Licensed Products or Licensed Services, including without limitation research
and development efforts, efforts to obtain regulatory approval (if applicable),
marketing efforts (including Licensed Products made or sold and Licensed
Services sold or performed) and sales figures, provided that such reports shall
be deemed Licensee’s Confidential Information subject to the provisions of Article 9
of this Agreement.

 

ARTICLE 4
- CONSIDERATION

 

4.1           Initial Payment.  In
partial consideration of the rights and licenses granted to Licensee by ACT in
this Agreement, Licensee agrees to pay to ACT an initial license fee of ONE
MILLION DOLLARS ($1,000,000.00) (the “License Fee”),

 

 

8

 

 

payable as follows: FIVE HUNDRED
THOUSAND DOLLARS ($500,000) due five (5) business days after the Effective
Date; and five (5) additional payments of ONE HUNDRED THOUSAND DOLLARS
($l00,000) each (“Installments”), with one Installment due at each of the five (5) successive
one-month intervals after the Effective Date (i.e. one Installment due on the
one-month, two-month, three-month, four-month and five-month anniversary of the
Effective Date).  One hundred percent
(100%) of the License Fee shall be deemed earned (subject to Section 7.4).  The License Fee is not refundable and is not
creditable against other payments due to ACT under this Agreement except as set
forth in Section 7.4 (Sufficiency of Rights).

 

4.2           Royalties.

 

(a)           In partial consideration of the license rights and
licenses granted by ACT to Licensee in this Agreement, Licensee agrees to pay
to ACT an earned royalty equal to five percent (5%) of the Net Sales of all
Licensed Products and Licensed Services sold by Licensee in each country where
such sales would infringe a Valid Claim in such country but for the licenses granted
herein; provided, however, that where the Licensed Products sold are the
progeny of cloned animals that are Licensed Products (or products obtained from
such progeny (such as semen or ova)) (“Progeny Products”), the royalty shall be
only three percent (3%) of the Net Sales of such Progeny Products. For the
avoidance of doubt, no multiple royalties shall be payable because any Licensed
Product or Licensed Service is covered by more than one patent or patent
application within the Patent Rights.

 

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

 

4.3           License Maintenance
Fee.

 

(a)           Subject to the terms and conditions of this
Agreement (including without limitation subsections (b) and (c) of
this Section 4.3), commencing on October 1, 2005, Licensee shall,
thereafter during the term of this Agreement, pay an annual maintenance fee for
each twelve-month period beginning on October 1 and ending on September 30
of the following year (the “Maintenance Fee Period”).  The amount of the maintenance fee shall be
ONE HUNDRED THOUSAND DOLLARS ($100,000.00) for the Maintenance Fee Period
beginning on October 1, 2005 and shall thereafter increase by FIFTY
THOUSAND DOLLARS ($50,000.00) for each successive Maintenance Fee Period
thereafter until such time that the maintenance fee equals FIVE HUNDRED
THOUSAND DOLLARS ($500,000.00) at which time the maintenance fee shall remain
at FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) for the remaining term of the
Agreement (as illustrated in the chart below); provided however that for any

 

 

9

 

Maintenance Fee Period during
which at least one Valid Claim does not exist and remain enforceable throughout
the Maintenance Fee Period, the maintenance fee shall be Fifteen Thousand
Dollars ($15,000).  Subject to the terms
and conditions of this Agreement, the first annual maintenance fee is due on October 1,
2005 and subsequent maintenance fee payments are due on October 1 of each
subsequent year.

 

	
  Maintenance Fee Period

  	
   

  	
  Maintenance Fee

  	
   

  
	
  October 1, 2005-September 30,
  2006

  	
   

  	
  $

  	
   

  	
  100,000.00

  	
   

  
	
  October 1, 2006-September 30,
  2007

  	
   

  	
  $

  	
   

  	
  150,000.00

  	
   

  
	
  October 1, 2007-September 30,
  2008

  	
   

  	
  $

  	
   

  	
  200,000.00

  	
   

  
	
  October 1, 2008-September 30,
  2009

  	
   

  	
  $

  	
   

  	
  250,000.00

  	
   

  
	
  October 1, 2009-September 30,
  2010

  	
   

  	
  $

  	
   

  	
  300,000.00

  	
   

  
	
  October 1, 2010-September 30,
  2011

  	
   

  	
  $

  	
   

  	
  350,000.00

  	
   

  
	
  October 1, 2011-September 30,
  2012

  	
   

  	
  $

  	
   

  	
  400,000.00

  	
   

  
	
  October 1, 2012-September 30,
  2013

  	
   

  	
  $

  	
   

  	
  450,000.00

  	
   

  
	
  October 1, 2013-September 30,
  2014

  	
   

  	
  $

  	
   

  	
  500,000.00

  	
   

  
	
  October 1, 2014-September 30,
  2015

  	
   

  	
  $

  	
   

  	
  500,000.00

  	
   

  
	
  October 1, 2015-September 30,
  2016

  	
   

  	
  $

  	
   

  	
  500,000.00

  	
   

  
	
  Each annual 12-month period
  starting from October 1, 2016 and thereafter

  	
   

  	
  $

  	
   

  	
  500,000.00

  	
   

  

 

(b)           The maintenance fee payments shall be considered an advance against royalties
and Sublicense Income payable to ACT hereunder and shall be fully creditable
against any royalties and Sublicense
Income payable to ACT hereunder.  Accordingly,
Licensee shall not be obligated to pay ACT any royalties or Sublicense Income
otherwise payable hereunder to the extent that the total accrued royalties and
Sublicense Income to date do not exceed the total maintenance fees paid to such
date.  Waiver of any payment of the
annual maintenance fee by ACT shall not be construed as a waiver of any
subsequent payment of the annual maintenance fee.

 

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

 

4.4           Third Party Royalties.  In
the event that Licensee is required to make royalty payments to one or more
third parties for licensed intellectual property in order to develop, make,
have made, use, import, export, sell, offer for sale or otherwise exploit
Licensed Products or to perform Licensed Services, Licensee may offset such
third-party payments against any royalty payments that are due to ACT in the
same royalty period, provided, however, that in no event shall the royalty
payments that are due to ACT in such royalty period be reduced below three
percent (3%) of Net Sales by such third-party royalty payments.

 

10

 

4.5           Other ACT Royalties.  In
the event that (i) Licensee and/or any of its Affiliates is required to
pay any royalties to ACT and/or its Affiliates under any other agreement(s) (“ACT
Agreements”) during the term hereof in connection with developing, making,
having made, using, importing, exporting, selling, offering for sale or
otherwise exploiting Licensed Products or performing Licensed Services and (ii) on
a product-by-product or service-by-service basis Licensee and/or its Affiliates
are obligated (under such ACT Agreements and this Agreement) to pay aggregate
royalties of greater than six percent (6%) of Net Sales to ACT and its
Affiliates, Licensee may offset royalty payments due under the ACT Agreements
against any royalty payments that are due to ACT hereunder on the sale of each
Licensed Product or Licensed Service such that the total aggregate royalty,
excluding (i.e. without taking into account) maintenance fees and/or minimum
royalty obligations, due by Licensee does not exceed six percent (6%) of Net Sales of such Licensed Products or
Licensed Services.

 

4.6           Sublicense Income.  Licensee
shall pay to ACT a total of twenty-five percent (25%) of all Sublicense Income,
except that for Sublicense Income comprising equity, Licensee shall have the
option of (a) transferring (or otherwise arranging issuance) to ACT
twenty-five percent (25%) of the shares (or other form of equity interest) or (b) paying
to ACT an amount equal to ten percent (10%) of the fair market value of such
shares (or other form of equity interest) as determined by the board of
directors of the issuing entity at the time of issuance to Licensee (or if not
so determined, as determined by the most recent per-share price at which such same
class of shares (or other equity) were sold to unaffiliated third parties by
the issuing entity on comparable terms).

 

4.7           Payment Method.  All payments
due under this Agreement shall be paid to ACT in Worcester, Massachusetts,
U.S.A., and shall be made in United States currency without deduction for
taxes, assessments, exchanges, collection or other charges of any kind;
provided, however, that any withholding tax required to be withheld by Licensee
on royalty or Sublicense Income payments under the laws of any country in the
Territory for the account of ACT will be promptly paid by Licensee for and on
behalf of ACT to the appropriate governmental authority, and Licensee will
furnish ACT with proof of payment of such tax.  Any such tax actually paid on behalf of ACT
may be deducted from royalty payments or Sublicense Income due ACT.  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.

 

4.8           Late Fee.  Licensee shall pay ACT interest
on any overdue amounts at the rate of ten percent (10%) per annum, from the date
when such payment should have been made pursuant to Section 4.1, 4.2, 4.3
and/or 4.6, as applicable.

 

ARTICLE 5 - REPORTS AND RECORDS

 

5.1           Audit Right.  Licensee shall keep full, true
and accurate books of account containing all particulars necessary for the
purpose of showing the amounts payable to ACT hereunder.  Said books of account shall be kept at
Licensee’s principal place of business for three and one half (3-1/2) years
following the end of the calendar year to which they pertain.  Said

 

11

 

books and the supporting
data shall be open upon reasonable advance notice during Licensee’s normal
business hours (and no more frequently than once per calendar year) for three
and one half (3-1/2) years following the end of the calendar year to which they
pertain, to the inspection of an independent auditor reasonably acceptable to
Licensee for the purpose of verifying Licensee’s royalty statement or
compliance with payment obligations under this Agreement.  If any such audit determines that the
reported payments to ACT were less than ninety five percent (95%) of the actual
amount due to ACT for the calendar year in question, Licensee shall bear the
reasonable cost of such auditor’s inspection and pay any undisputed deficit
amounts within 30 days.  In all other
cases, ACT shall pay the costs of the audit.  All information disclosed pursuant to an audit
shall be treated as Licensee’s Confidential Information and, other than the
amount of any shortfall, which may be disclosed to ACT, shall not be disclosed
to any third party (including ACT) or used for any purpose other than to
determine the correctness of Licensee’s royalty statement or payment
obligations under this Agreement.

 

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

 

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

 

(b)           number of Licensed Products sold by Licensee;

 

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

 

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

 

(e)           deductions applicable as provided in Section 1.8;
and

 

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

 

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

 

ARTICLE 6
- PATENT RIGHTS

 

6.1           Responsibility for
the Patent Rights.  ACT shall be solely responsible
for the preparation, filing, prosecution and maintenance of the Patent Rights.  The costs of such filing, prosecution and
maintenance (including without limitation the payment of all government fees in
any given country required to maintain the Patent Rights) shall be borne by
ACT.

 

12

 

6.2           Licensee’s Participation.  Licensee’s
patent counsel shall be given a reasonable opportunity to comment, at Licensee’s
expense, on all proposed patent filings (“Filings”) and responses (“Responses”)
to patent office actions or other patent office communications that may affect
the Patent Rights or Licensee’s rights and obligations hereunder either
directly or in combination with any response thereto (collectively, “Office
Communications”) with respect to the Patent Rights.  In the case of Filings, and in the case of
Office Communications to which ACT must respond in a period of time equal to or
exceeding sixty (60) days (excluding extensions), ACT shall deliver copies of
its proposed Filings or Response to Licensee not later than fifteen (15) business
days prior to the patent office deadline (excluding extensions) for such Response.
 ACT will not unreasonably refuse to
accept any suggestions of Licensee’s patent counsel regarding such Filing or
Response, provided that Licensee’s patent counsel provides such comments to ACT’s
patent counsel not less than five (5) days prior to the patent office deadline
(excluding extensions) for such Filing or Response.  In the case of Office Communications to which
ACT must respond in less than sixty (60) days (including any extensions), ACT
shall deliver copies of its proposed Response to Licensee not later than ten
(10) days prior to the patent office deadline, and ACT will not unreasonably
refuse to accept any suggestions of Licensee’s patent counsel regarding such
Response, provided that Licensee’s patent counsel provides such comments to ACT’s
patent counsel not less than five (5) days prior to the final patent
office deadline for such Response.  In
any event, ACT will provide Licensee with copies of all Office Communications
relating to the Patent Rights reasonably promptly after ACT’s receipt thereof,
but in any event within five (5) business days of receipt.  Where ACT fails to forward Office
Communications within the time frame indicated, ACT shall use its best efforts and
own expense to obtain an extension of time to file the Office Communication so
as to provide Licensee fifteen (15) business days to review and comment on such
Office Communication prior to filing.  ACT
agrees to make best efforts to secure and perfect valid U.S. patents covering
the inventions of invention disclosures UMA 01-02 and UMA 99-19 and, if Licensee
requests, to consult closely with Licensee’s patent counsel in these efforts.

 

6.3           Abandonment.  ACT will not allow any patent or
patent application within the Patent Rights to become expired or abandoned, or
fail to diligently pursue patent protection for any invention within the Patent
Rights, without giving (a) prior written notice to Licensee of such expiration
or abandonment or failure to pursue patent protection, and (b) Licensee
the right to assume responsibility for such patent or patent application,
subject to the priority right of Goyaike, S.A., to assume such responsibility
in South America pursuant to the Pre-existing License.  If Licensee so elects, (i) ACT will
execute a power of attorney to assign all its rights to, including the right to
prosecute, such patent or patent application in the applicable jurisdiction(s) to
Licensee and will otherwise perform all acts and make all filings necessary to
permit Licensee’s designees to prosecute and maintain such patent or
application in such jurisdiction(s) and transact all matters connected
therewith (including, as necessary, appointing Licensee as ACT’s delegatee or
agent for the purpose of continuing to exercise ACT’s prosecution and maintenance
rights under the UMass License, appointing Licensee’s patent counsel as
associate attorneys of record, and changing address of the patent attorney of
record with the appropriate patent authorities), (ii) Licensee will
thereafter assume control thereof and all expenses (arising thereafter) for
such prosecution and maintenance by Licensee, (iii) Licensee’s license and
rights

 

13

 

to such
Patent Rights shall be irrevocable and royalty-free for so long as Licensee
prosecutes or maintains such patent or patent application and meets the
commercialization standards in Section 3.1 with respect to such patent,
and (iv) notwithstanding Section 4, the maintenance fees (and, until
the UMass Robl Rights are included within the Patent Rights licensed to
Licensee hereunder and licensed to Licensee under the full scope of the
licenses granted hereunder, any other amounts) due by Licensee hereunder shall
be reduced by Licensee’s expenses incurred in such prosecution and maintenance,
up to a maximum of the average annual prosecution and maintenance costs
(regardless of who incurred such costs) for the otherwise abandoned or
unpursued claims incurred in the preceding three calendar years in a particular
country or jurisdiction where they would have been abandoned or unpursued,
provided, however, that Licensee may deduct all
costs incurred by Licensee from maintenance fees (and, until the
UMass Robl Rights are included within the Patent Rights licensed to Licensee
hereunder and licensed to Licensee under the full scope of the licenses granted
hereunder, any other amounts) otherwise due hereunder (x) for any patents and
patent applications within the Robl Patents that are licensed to Licensee
hereunder and/or (y) for the following countries: United States, Canada,
Europe, Australia, New Zealand and Japan.  At Licensee’s request, ACT shall provide
Licensee with its costs of prosecution and maintenance for any Patent Rights in
sufficient detail for purposes of the foregoing calculation.  Licensee’s rights under this Section 6.3
shall be subject to the rights of the University under the UMASS License (i.e. Section 6
thereof), provided that the University agrees to, and ACT shall cause the
University to, permit Licensee to assume control and responsibility for
prosecution and maintenance in accordance with this Section 6.3 provided
Licensee also complies with the obligations of Sections 6.1, 6.2, and 6.3 (mistakenly renumbered as a second section ”6.2”)
of the UMASS License with respect to any patent or patent application for which
Licensee has assumed responsibility under this Section 6.3. Licensee may
elect to return control to ACT of prosecution and maintenance of any patent or
patent application in any jurisdiction at any time by providing notice to ACT
thereof, in which event Licensee will have no further obligation to pay any
expenses arising thereafter for prosecution and maintenance of such patent or
patent application, Licensee’s license to such patent or patent application in
such jurisdiction will, as of the notice date, become royalty-bearing, as
applicable, and Licensee will cooperate in transferring control back to ACT.

 

6.4           Cooperation.  If Licensee elects to assume
responsibility for any Patent Rights in accordance with Section 6.3, ACT
will cooperate fully with Licensee in the preparation, filing, prosecution, and
maintenance of all Patent Rights.  Cooperation
includes, without limitation, (a) promptly executing all papers and instruments
or requiring employees of ACT to execute papers and instruments as reasonably
appropriate to enable Licensee to file, prosecute, and maintain Patent Rights
in any country; and (b) promptly informing Licensee of matters that may
affect preparation, filing, prosecution, or maintenance of Patent Rights (such
as becoming aware of an additional inventor who is not listed as an inventor in
a patent application). In addition, ACT agrees to keep Licensee informed of the
status of its and the University’s activities regarding the Robl Patents,
reporting no less frequently than semimonthly to Licensee and promptly
providing Licensee with copies of all Filings and Responses by ACT or the
University relating thereto.

 

6.5           Enforcement of the Patent Rights.  The
parties agree to notify each other in writing of any actual or threatened
infringement by a third party of the Patent Rights or of any

 

14

 

third-party
claim of invalidity or unenforceability of the Patent Rights.  ACT shall have the first right to prosecute
and defend such claims under its sole control and at its sole expense.  If ACT does proceed with such prosecution or
defense, Licensee shall provide reasonable assistance to ACT at ACT’s request,
provided ACT pays Licensee for the reasonable out-of-pockets costs incurred by
Licensee in such assistance.  Any
recovery obtained in an action under this Section 6.5 shall be distributed
as follows, in this order: (i) each party shall be reimbursed for any expenses
incurred in the action; (ii) as to ordinary damages, Licensee shall receive
an amount equal to lost profits or a reasonable royalty on the infringing sales
(whichever measure the court applied), less a reasonable approximation of the
royalties that Licensee would have paid to ACT if Licensee had received such
amount as Net Sales of Licensed Products sold by Licensee; and (iii) as to
any additional damages, the parties shall share equally in any award.

 

6.6           Licensee Rights to Enforce.  In
the event that ACT fails to initiate an infringement action within a reasonable
time (but no more than one hundred eighty (180) days) after ACT becomes aware
of the basis for such action (e.g., the actual or threatened infringement) or
fails to answer a declaratory judgment action within a reasonable time (but no
more than ninety (90) days) after ACT receives or becomes aware of such
infringement or action, Licensee shall have the right, after notifying ACT in
writing, to prosecute such infringement or answer such declaratory judgment
action, under its sole control and at its sole expense.  If Licensee does proceed with such prosecution
or defense, ACT shall provide reasonable assistance to Licensee at Licensee’s
request, provided Licensee pays ACT for its reasonable out-of-pockets costs
incurred in such assistance.  In the
event either party exercises its rights hereunder to proceed with any such
prosecution or defense, such party shall consult with the other party regarding
the course of such proceedings and shall not enter into any settlement, consent
judgment, or other voluntary final disposition of any infringement action that
admits the invalidity or unenforceability of any Patent Rights or that would
adversely affect the rights of the other party without the prior written
consent of the other party, which consent may not be unreasonably withheld,
conditioned or delayed.  Licensee’s
rights under this Section 6.6 shall be subject to the rights of the
University under the UMASS License (i.e. Section 6.3(d) thereof),
provided that the University agrees to, and ACT shall cause the University to,
permit Licensee to assume control of and responsibility for such infringement
action or defense in accordance with this Section 6.6 provided Licensee
consults and cooperates with the University in accordance with Section 6.3(b) and
(e) of the UMASS License.  ACT will
otherwise perform all acts and effect all filings necessary to permit Licensee
to exercise its rights under this Section 6.6.  Any recovery obtained in an action under this
Section 6.6 shall be distributed as follows, in this order: (i) Licensee
shall be reimbursed for any expenses incurred in the action; (ii) Licensee
shall receive the remaining recovery, less a reasonable approximation of the
royalties that Licensee would have paid to ACT if Licensee had received the
amount awarded as ordinary damages as Net Sales of Licensed Products sold by
Licensee.  Licensee may offset 100% of
any unreimbursed expenses incurred under this Section 6.6 (including those
incurred in connection with any patents and patent applications within the Robl
Patents licensed to Licensee hereunder) against any royalty, maintenance fee or
other payments due to ACT under this Agreement.

 

15

 

ARTICLE 7
– INDEMNIFICATION; LIMITATION OF LIABILITY

 

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

 

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

 

(b) arising out of any third party claim
asserted against an Indemnified Party based on the alleged infringement,
violation or misappropriation of a patent or other protected intellectual
property right which arises from the practice of the Patent Rights;

 

(c) arising out of any consequences of any
patent interference proceedings or opposition proceedings before the U.S.
Patent and Trademark Office or similar authorities in the Territory involving
the Patent Rights;

 

(d) arising out of any third party claim
asserted against an Indemnified Party that the use of the ACT Technology
infringes, violates or misappropriates the intellectual property or other
rights (excluding patent rights) of such third party;

 

(e) arising out of failure by the University
or ACT to permit Licensee to assume (i) control of prosecution and
maintenance of any patent or patent application in accordance with Section 6.3
or (ii) control of prosecution of infringement or declaratory judgment
actions in accordance with Section 6.6; including Losses arising from
removal of any rights from the UMass License (and thus this Agreement)
resulting from such failure and loss of any recovery otherwise distributable to
Licensee under Section 6.6; or

 

(f) arising out of any claim by the University (or its trustees,
agents, directors, officers, shareholders, partners or employees or their
successors or assigns) (i) asserted against Licensee or its Affiliates or
sublicensees seeking performance under or direct compliance with the UMass
License or (ii) asserting that Licensee may not assign this Agreement in
accordance with Section 12.1 or that assignment of this Agreement by
Licensee in accordance with Section 12.1 is void or ineffective.

 

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

 

16

 

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

 

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

 

7.3           Indemnification Claims.  Each
party shall give the other party prompt notice of any claim for which
indemnification under this Section 7 is or may be applicable and will cooperate
with the indemnifying party in the defense or settlement of such claim at the indemnifying
party’s expense.  The indemnifying party
shall be required to provide and be entitled to control the defense of any
claim covered hereunder (including the right to control settlement discussions)
with counsel reasonably satisfactory to the other party, which other party may,
at its own expense, participate in the defense of any claim after the
indemnifying party assumes control of the defense thereof.  No claim that is subject to indemnification under this Article 7
shall be settled or otherwise compromised other than by the party defending
such claim, and then only with the prior written consent of the other party,
which shall not be unreasonably withheld or delayed; it shall not be
unreasonable to withhold consent if the settlement or compromise either (a) imposes
on the indemnified party any liability or obligation which cannot be assumed
and performed in full by the indemnifying party, or (b) materially
adversely affects the indemnified party or its rights hereunder.  The failure of the indemnified party to
deliver notice to the indemnifying party promptly after the commencement of any
such action shall not release the indemnifying party from any liability to the
indemnified party under this Section 7 other than any liabilities directly
attributable to such failure.  Any
amounts for which ACT is liable under Section 7.1 or Section 7.4 may
be offset by Licensee against any payments required hereunder.

 

7.4           Sufficiency of Rights.  (a) ACT
and the University agree and acknowledge that the Robl Patents are intended to
be included in the licenses granted to Licensee hereunder and that such
inclusion is an essential basis of the bargain between ACT and Licensee.  Accordingly, any rights, licenses, immunities
or interests that ACT or the University acquires or obtains in connection with
resolving ownership issues relating to the Robl Patents described in Section 1.12(a) (whether
through assignment, license, settlement, interference proceeding or otherwise) shall
be deemed automatically licensed by the University to ACT pursuant to the UMASS
License and thus automatically licensed by ACT to Licensee under this Agreement
(or in the case of immunities,
the benefits shall be extended to Licensee and its Affiliates and
sublicensees).

 

(b) Notwithstanding any other provision of this Agreement, in the
event that, by October 1, 2005, the UMass Robl Rights (as defined below)
are not included within the Patent Rights licensed to Licensee hereunder and
licensed to Licensee under the full scope of the licenses granted hereunder,
then the following provisions shall take effect:

 

(i) Licensee’s obligations
to pay (A) the maintenance fee otherwise due on such date for the first
Maintenance Fee Period and (B) the maintenance fee otherwise due for any
subsequent Maintenance Fee Period during which entire period the UMass Robl
Rights are not included within the Patent Rights and licensed to Licensee under
the full scope of the licenses

 

17

 

granted
hereunder, shall be suspended and such fees shall not be due or payable unless
and until the UMass Robl Rights become licensed by ACT to Licensee as Patent
Rights under the full scope of the licenses granted hereunder (in which case,
ACT shall provide notice and adequate written evidence of such license to Licensee,
and Licensee shall have thirty (30) days from such notice to pay all
maintenance fees accrued and otherwise payable through such notice date).  For the avoidance of doubt, such fees shall
accrue but shall not be earned, due, or payable unless and until the preceding
conditions are met.

 

(ii) ACT shall (A) refund to Licensee the amount of Five
Hundred Thousand Dollars ($500,000) within thirty (30) days of receipt of
notice from Licensee requesting such refund and (B) at the sole option of
Licensee, either issue equity in ACT to Licensee or grant a license of
intellectual property useful to Licensee (as determined by Licensee in its sole
discretion), in either case having a fair market value of Five Hundred Thousand
Dollars ($500,000) and on terms no less favorable than offered to any third
party (or to Licensee under this Agreement or any other equity agreement with
ACT), within ninety (90) days of receipt of notice from Licensee, provided that  if the parties are
unable to reach agreement on the terms of any such equity issuance, license
agreement, or other substitute consideration within ninety (90) days of ACT’s
receipt of such notice, or if ACT is no longer conducting business operations
in the ordinary course or is unable to license sufficient intellectual property
useful to Licensee (as determined by Licensee in its sole discretion), then ACT
shall, within thirty (30) days of Licensee’s written request, pay Licensee the
amount of Four Hundred Thousand Fifty Dollars ($450,000) in lieu of equity or a
license (the foregoing subsections (A) and (B), “Refund Rights”); provided further, however, that  if the
University and/or ACT has commenced a suit against James Robl within ninety
(90) days of the Effective Date seeking return of the UMass Robl Rights to the
University, such suit is being actively pursued in good faith by the University
and/or ACT, and such suit has not resulted in any court decision, judgment or
ruling, or other settlement or compromise, detrimental to the University’s
claim to ownership of the UMass Robl Rights or detrimental to the University’s
and ACT’s right to license such rights to ACT and Licensee, respectively, then
Licensee’s Refund Rights shall be suspended until (x) any such detrimental
decision, judgment or ruling, or other settlement or compromise, (y) the suit
is otherwise abandoned, dismissed or terminated, or (z) both the University and
ACT cease to actively pursue the suit in good faith.  Upon any final, enforceable court decision,
judgment or ruling or other settlement or compromise, in each case which is not
subject to further appeal, as a result of which the UMass Robl Rights may be
included within the Patent Rights licensed to Licensee hereunder, and are licensed to Licensee under the full
scope of the licenses granted hereunder, Licensee’s Refund Rights shall
terminate.

 

(c) As used herein, “UMass Robl Rights” shall mean the
inventions and invention disclosures that James Robl participated in the
development, description and/or conception of prior to terminating employment
with the University and that are disclosed in or related to the Robl Patents
described in Section 1.12(a), including without limitation all inventions
disclosed in or encompassed by invention disclosures UMA 99-19 and UMA 01-02;
and any patent applications and patents to the extent claiming such inventions.

 

18

 

(d)           The parties acknowledge that the provisions
of Section 7.4(b) and (e) are intended to reflect fairly the
costs to Licensee of failing to obtain any material benefit for its license fee
hereunder and are not a penalty.

 

(e)           Notwithstanding any other provision of this
Agreement, as between ACT and Licensee, all fees, costs, expenses, royalties,
and other payments incurred in connection with obtaining or reclaiming the
UMass Robl Rights and/or contesting the ownership or validity of the UMass Robl
Rights or any underlying patent(s) or patent applications, whether incurred by Licensee,
ACT or otherwise (including any fees, costs, expenses, royalties or other
payments required to paid under or in connection with any agreement concerning
the UMass Robl Rights) (collectively, the “Robl Costs”) shall be borne,
as between ACT and Licensee, by ACT alone, and notwithstanding any other
provision of this Agreement, Licensee shall not be required to reimburse ACT
for, or otherwise pay, and ACT shall indemnify Licensee and hold Licensee harmless
from and against any such Robl Costs.  ACT
shall indemnify Licensee, its Affiliates and its sublicensees and hold them
harmless from and against any Losses (as defined in Section 7.1) arising
out of or relating to any claim or allegation that Licensee or any of its
Affiliates or sublicensees, or their successors or assigns, have infringed any
UMass Robl Rights.

 

7.5           LIMITATION OF LIABILITY.  EXCEPT
WITH RESPECT TO (I) LIABILITY THAT RESULTS FROM EITHER PARTY’S MATERIAL BREACH
OF SECTION 9 (CONFIDENTIALITY), (II) LIABILITY ARISING UNDER SECTIONS 7.1
OR 7.2 (INDEMNIFICATION) OR 7.4 (SUFFICIENCY OF RIGHTS), OR (III) CLAIMS BASED
ON FRAUD BY THE OTHER PARTY, IN NO EVENT SHALL EITHER PARTY (OR ITS DIRECTORS,
OFFICERS, EMPLOYEES, OR AGENTS) BE LIABLE FOR ANY SPECIAL, INDIRECT,
INCIDENTAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATED TO
THIS AGREEMENT, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES, REGARDLESS OF THE THEORY OF LIABILITY.

 

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

 

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

 

19

 

ARTICLE 8
– TERMINATION

 

8.1           Term.  The term of this Agreement shall
commence on the Effective Date and shall remain in effect unless sooner
terminated as provided herein.

 

8.2           Termination for Cause.  If
either party materially breaches any material provision of this Agreement and
if such breach is not cured within ninety (90) days (the “Cure Period”)
after receiving written notice from the other party specifying such breach in
reasonable detail, the non-breaching party shall have the right to terminate
this Agreement by giving written notice thereof to the party in breach, which
termination shall go into effect immediately on receipt unless the allegedly
breaching party delivers a Resolution Notice (pursuant to Section 12.8;
provided that the Negotiation Period shall be reduced to ten (10) business
days) to the other party within five (5) days of such second notice (in
which event, such termination shall not be effective unless and until there has
been a final mutually agreed resolution by the parties to terminate or a final
decision of the arbitrator that the allegedly breaching party has materially
breached a material provision hereof and that the Agreement should be
terminated as a result thereof).

 

8.3           Termination for Convenience.  Licensee shall have the right to terminate
this Agreement at any time without cause on sixty (60) days’ prior notice to
ACT.

 

8.4           Existing Stock.  In
the event that this Agreement terminates or expires, Licensee and its
sublicensees hereunder shall retain limited rights to sell any Licensed
Products existing or under production (e.g., a cloned animal in utero or a
cloned embryo) and to perform Licensed Services related to such Licensed
Products, subject to the terms of this Agreement (including without limitation
the obligation to pay royalties under Article 4 to the extent not
creditable or offsetable against maintenance fees), but Licensee shall have no
obligation to pay any annual maintenance fees or portion thereof, except for
any such payment due and payable prior to the effective termination date.

 

8.5           Survival.  Upon
any termination or expiration of this Agreement: nothing herein shall be
construed to release either party from any obligation incurred prior to the
effective date of such termination (except as set forth below);
Articles/Sections 1,7, 8, 9,11,12.1,12.7 through 12.13, and (only with respect
to any patent or patent application for which Licensee has assumed
responsibility) 6.3 (iii), and (only with respect to any action already
commenced as of the date of termination notice) the provisions allocating
recoveries in 6.3 and 6.6, shall survive and continue in full force and effect;
as of the date of termination notice, Licensee shall have no further obligation
with respect to any maintenance fee amounts accrued but not due under Section 7.4(b);
Licensee may exercise its Refund Rights under Section 7.4(b), if not
previously exercised; if termination notice is provided by Licensee after the
fourth anniversary date of the Effective Date and its Refund Rights are then
suspended pursuant to Section 7.4(b), Licensee may nevertheless exercise
the Refund Rights; any sublicensee shall have the option to retain its license
rights in accordance with the terms of its sublicense granted by Licensee prior
to the effective termination date of this Agreement, provided such sublicensee
agrees to remit to ACT all amounts owing thereunder after the effective
termination date that are attributable to its sublicense of the Patent Rights.  Upon any termination or expiration of this
Agreement, each

 

20

 

party shall promptly
return to the other party, or destroy, all written Confidential Information of
the other party, and all copies, notes or extracts thereof (except to the
extent reasonably necessary to exercise the license in the following sentence,
if applicable).  Upon the expiration,
determination, disclaimer or admission of invalidity or unenforceability of the
last Valid Claim within the Licensed Patents, the license to ACT Technology
granted under Section 2.1 shall become irrevocable, non-exclusive, fully
paid up and

royalty-free.  Upon any rejection of this
Agreement by ACT in bankruptcy or termination of this Agreement by Licensee
pursuant to Section 8.2 or 8.7, Section 2.1(b) shall survive and
continue in full force and effect.

 

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

 

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

 

ARTICLE 9
– CONFIDENTIALITY AND NON-DISCLOSURE

 

9.1           Confidential
Information: Non-Disclosure.  “Confidential
Information” shall mean any technical, business, financial, customer or
other information disclosed by one party (“Disclosing Party”) to the other
party (“Receiving Party”) pursuant to this Agreement which, if disclosed in
written form, is marked “Confidential” or “Proprietary” or by a similar legend
or which, if disclosed orally or visually, is identified as confidential
information at the time of disclosure and confirmed by written outline mailed
to the other party within thirty (30) days of the original disclosure.  Licensee’s Confidential Information
specifically includes the terms of this Agreement and any sublicense agreements
and all information, data, reports and statements relating to Licensed Products
and Licensed Services.  Except to the
extent authorized by this Agreement or by other prior written consent by the
Disclosing Party, each party shall during the term of this Agreement and for
five (5) years after its termination: (i) not use Confidential
Information of the Disclosing Party except for the purposes of fulfilling its
obligations or exercising or enforcing its rights under this Agreement, or as
otherwise authorized herein or in writing by the Disclosing Party, (ii) disclose
the Confidential Information of the Disclosing Party only to those of its
employees, directors, and consultants who have need to know or use such
Confidential Information for the foregoing purposes or as authorized by the
Disclosing Party, provided that the Receiving Party will ensure such disclosees
are bound by obligations of confidentiality at least as restrictive as those
set forth in this Section 9.1. In addition, Licensee may disclose
Confidential Information of ACT to its Affiliates (and their employees,
directors and consultants) or permitted sublicensees or distributors for the
foregoing purposes or as authorized by ACT, provided such disclosees are bound
by obligations of confidentiality at least as restrictive as those set forth in
this Section 9.1.  Each of the
parties shall protect the Confidential Information of the Disclosing Party
using at least the same procedures and degree of care that it uses to prevent
the disclosure of its own confidential information of like importance, but in
no event less than reasonable care.  Except
as expressly provided in this Agreement, no

 

21

 

ownership right is granted
in any Confidential Information.

 

9.2           Exclusions.  Notwithstanding
Section 9.1, Confidential Information excludes information that: (i) was
publicly known or available at the time it was disclosed or becomes publicly
known or available through no fault, action, or inaction of the Receiving
Party; (ii) was known to the Receiving Party at the time of disclosure; (iii) is
disclosed with the prior written approval of the Disclosing Party; (iv) was
independently developed by the Receiving Party without any use of the
Confidential Information; or (v) is provided to the recipient by an independent
third party having no fiduciary relationship with the Disclosing Party and
having no obligation to keep the information secret.

 

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

 

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

 

9.5           Injunctive Relief.  ACT
and Licensee acknowledge and agree that any breach of the confidentiality
obligations imposed by this Section 9 may constitute immediate and irreparable
harm to the party disclosing the Confidential Information and/or its successors
and assigns, which cannot adequately and fully be compensated by money damages
and may warrant, in addition to all other rights and remedies afforded by law,
injunctive relief, specific performance, and/or other equitable relief.

 

9.6           Survival.  The
obligations of ACT and Licensee under this Article 9 shall survive for
five (5) years after the expiration or termination of this Agreement.

 

ARTICLE 10
- 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

 

22

 

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 ACT:

  	
   

  	
  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:

  	
   

  	
  Exeter Life Sciences, Inc.

  
	
   

  	
   

  	
  4455 Camelback Road

  
	
   

  	
   

  	
  Phoenix, AZ 85018

  
	
   

  	
   

  	
  Attention: Jonathan Thatcher, President

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  ViaGen, Inc.

  
	
   

  	
   

  	
  12357A Riata Trace Pkwy, Suite 100

  
	
   

  	
   

  	
  Austin, Texas 78727

  
	
   

  	
   

  	
  Attention: President

  

 

ARTICLE 11 - REPRESENTATIONS AND
WARRANTIES

 

11.1         Representations and
Warranties by ACT.  ACT represents and warrants
that:

 

(a)           ACT has licensed the UMass Patent Rights
with a sublicensable interest, owns the remaining Patent Rights, and has
the full legal right and power to grant to Licensee the licenses of the scope
and on the terms granted herein;

 

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

 

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

 

23

 

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

 

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

 

(f)            Neither ACT nor any of its Affiliates is a
party of any agreement with the University governing the license of, or option
to license, any intellectual property rights other than those agreements listed
in Exhibit D;

 

(g)           ACT has taken and hereby covenants that it will continue to take all appropriate
actions pursuant to applicable law to perfect, protect its interest in, and
enforce the UMass Patent Rights to the extent permitted by the UMASS License
and the remaining Patent Rights, including without limitation, using diligence
to file and prosecute applications relating to the UMA 99-19 invention disclosure
and UMA 01-02 invention disclosure having claims that are as broad as can be
obtained as well as claims of intermediate breadth, in at least the United States,
Canada, Europe, Australia, New Zealand and Japan;

 

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

 

(i)            ACT’s rights and interests in the Patent
Rights are free and clear of all liens, encumbrances and security interests of
every kind;

 

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

 

24

 

(k)           in combination with the rights granted by ACT under the Nonexclusive
License Agreement between ACT and Genetic Savings & Clone dated January 2,
2002, which is being assigned to an Affiliate of Licensee as of the Effective
Date hereof (“GSC License”), the practice of the inventions described in
the Patent Rights does not infringe, violate or misappropriate, and will not
require any payment to ACT or any of its Affiliates (other than the payments
set forth in this Agreement and/or in the GSC License) with respect to any
other technology, intellectual property rights, or patents owned or controlled
by or licensed to ACT or any of its Affiliates, or claims of patent
applications that ACT or its Affiliates have made or contemplate making
(collectively, “Other Rights”). To the extent, if any, there is a breach
of the representations and warranties set forth in this Section 11.2(k),
and, as a result of such breach, Licensee or an Affiliate, in practicing an
invention described in the Patent Rights, infringes any Other Rights, Licensee
and its Affiliates (and the users and purchasers of products and services
infringing such Other Rights made or sold by Licensee and its Affiliates and
sublicensees) shall be immunized and indemnified by ACT from liability, suit or
other claims (by ACT, the University, and any of their licensees, successors
and assignees) under such Other Rights.

 

(1)           (i) the UMASS License is valid, binding and enforceable, and to the
best of ACT’s knowledge, neither ACT nor the University is in default in
complying with any provision thereof and no condition or event or facts exist
which, with notice or lapse of time or both, would constitute a default
thereunder; (ii) ACT will comply with all terms of the UMASS License, and
will be responsible for making all payments due under the UMASS License; (iii) ACT
will notify Licensee promptly if ACT receives any notice or written
communication threatening or stating that the University intends to terminate
the UMASS License or modify, assign or amend such agreement in any way that
adversely affects this Agreement or Licensee’s rights hereunder; (iv) ACT
will not terminate, amend or assign, nor by act or omission permit the
termination, amendment or assignment of, the UMASS License without the prior
written consent of Licensee in the event such termination, amendment or
assignment would adversely affect Licensee’s rights hereunder; and (v) ACT
will provide Licensee with copies of all communications regarding any alleged
or actual breach of the UMASS License;

 

(m)          ACT has provided to Licensee a copy of the Cyagra Agreement, and ACT
represents and warrants that said copy is a true and complete copy of the
Cyagra Agreement (including without limitation any amendments, schedules,
exhibits, or addenda thereto) as of the Effective Date; and

 

(n)           ACT shall work diligently, using its commercially reasonable best
efforts, with, the University to perfect and reclaim the ownership of any and
all rights and interests of the University in and to the Robl Patents and to
acquire a sublicensable (to Licensee under this Agreement) interest therein.

 

25

 

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

 

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

 

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

 

11.3         Disclaimer.  EXCEPT AS OTHERWISE SET FORTH IN
SECTION 11 OF THIS AGREEMENT, NEITHER ACT NOR LICENSEE, NOR THEIR
DIRECTORS, OFFICERS, EMPLOYEES, AND AFFILIATES, MAKE ANY REPRESENTATIONS OR EXTEND
ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT
LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND
VALIDITY OF THE PATENT RIGHTS CLAIMS, ISSUED OR PENDING.

 

ARTICLE 12 - MISCELLANEOUS PROVISIONS

 

12.1         Assignment.  This Agreement, and the rights
and obligations hereunder, may not be assigned or transferred, in whole or in
part, voluntarily, by operation of law or otherwise, by either party without
the prior written approval of the other party; provided that, ACT hereby provides
such prior written approval in advance to any such assignment or transfer by
Licensee in the following circumstances: (a) to an Affiliate of EXETER, (b) to
any entity established to serve as a holding company for cloning patent rights,
or (c) to any third party that acquires all or substantially all of the
assets of Licensee or its animal cloning business, or that is the surviving person
in a merger or consolidation with Licensee, provided that such assignee agrees
to accept and assume any and all obligations and liabilities of the assignee
arising thereafter under this Agreement.  Any assignment or transfer in violation of this
Section 12.1 shall be null and void.

 

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

 

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

 

(b)           Licensee shall comply in all material respects with
any and all material

 

26

 

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

 

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

 

12.3         Encumbrances.  ACT
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 without the prior written consent of Licensee and the
University.

 

12.4         Publicity.  Neither party shall originate or
issue any publicity, news release or other public announcement (“Announcements
“), written or oral, relating to this Agreement or the existence of an
arrangement between the parties, without the prior written approval of the
other party, which approval shall not be unreasonably withheld, except as
otherwise required by law.  Any
references to the University in such Announcements shall be subject to the
approval of the University.  The
foregoing and Section 9.1 notwithstanding, ACT 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 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.

 

12.5         No Implied Licenses.  No
implied licenses are granted pursuant to the terms of this Agreement.

 

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

 

27

 

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

 

12.8         Dispute Resolution.

 

(a)           Informal Resolution.  The parties agree to follow the procedures set
forth in this Section 12.8 to resolve any dispute, controversy or claim arising out of or relating to this Agreement or the
breach, termination or invalidity thereof (each, a “Dispute”).  Prior to engaging in any formal dispute resolution
with respect to any Dispute, the president or CEO of each party, or their
respective designees, shall, if either party provides written notice to the
other party requesting resolution of such Dispute (“Resolution Notice”),
attempt to resolve such Dispute through good faith negotiations.  If any Dispute cannot be settled by agreement
of the parties pursuant to the preceding sentence within sixty (60) days of
receipt of the Resolution Notice (“Negotiation Period”), then either
party may, by written notice to the other requesting resolution by arbitration
(“Arbitration Notice”), invoke the dispute resolution provisions of Section 12.8(b).

 

(b)           Arbitration.  In
the event that the dispute resolution provisions of Section 12.8(a) do
not result in a mutually agreed resolution of the Dispute, then the parties agree to submit to
confidential arbitration, which shall be commenced as soon as
practicable following the receipt by one party of the other party’s Arbitration
Notice.  Any arbitration proceeding relating to the
Agreement shall be presided over by a single independent arbitrator experienced
in the biopharmaceutical industry and having relevant and significant
experience relating to the subject matter of the dispute, who shall be agreed
to by the parties, provided that
if the parties are unable to agree on an arbitrator, then each party shall name
one (1) such arbitrator (whose sole role shall be to select an impartial
arbitrator) and the two (2) arbitrators will together designate an
impartial, independent arbitrator experienced in the biopharmaceutical industry
to preside over the arbitration proceeding.  Each of the parties agrees to use its
reasonable best efforts to cause the arbitrator to be selected by the thirtieth
(30th) day after the receipt of the Arbitration Notice.  The arbitration shall be held in the City of
San Francisco in the State of California in accordance with the rules of
the American Arbitration Association then in force (as modified herein), and
shall be held on an expedited basis and in confidence.  The arbitrator shall not have the power to
award exemplary or punitive damages.  Each
party agrees that the final determination/decision of the arbitrator presiding
over the proceeding shall be binding on it.  Notwithstanding the foregoing or anything in
this Section 12.8, the parties may apply to any court of competent
jurisdiction for preliminary or interim equitable relief, including such relief
for compelling the commencement of the dispute resolution provisions in
accordance with Section 12.8, without breach of

 

28

 

this arbitration provision.  The prevailing party in any dispute related
hereto, whether in a court of law or in arbitration, shall have its reasonable
costs and expenses related to such dispute reimbursed by the non-prevailing
party; provided, however, that if
the arbitrator rules in favor of one party on some issues and the other
party on other issues, the arbitrator shall allocate such costs and expenses
between the parties in a manner that bears a reasonable relationship to the
outcome of the arbitration.  The rulings
of the arbitrator and the allocation of fees and expenses shall be binding,
non-reviewable, and non-appealable, except as permitted by law, and may be
entered as a final judgment in any court having jurisdiction.

 

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

 

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

 

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

 

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

 

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

 

29

 

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

 

[REST OF PAGE LEFT INTENTIONALLY BLANK]

 

30

 

Signature
Page to Exclusive License Agreement

 

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

 

 

	
  ADVANCED CELL TECHNOLOGY, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Michael D. West

  	
   

  	
   

  
	
  Name: Michael D. West, Ph.D.

  	
   

  
	
  Title:   President & Chief Executive
  Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  EXETER LIFE SCIENCES, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jonathan Thatcher

  	
   

  	
   

  
	
  Name: Jonathan Thatcher

  	
   

  
	
  Title:   President

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