Document:

Exhibit
10.21

 

EXCLUSIVE LICENSE
AGREEMENT (ACT IP)

 

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

 

WITNESSETH

 

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

 

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

 

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

 

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

 

ARTICLE 1
- DEFINITIONS

 

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

 

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

 

1.2           “FIELD” shall mean (1) the research,
development, manufacture and selling of human and non-human animal cells for
commercial research use, including small molecule and other drug testing and
basic research and (2) the manufacture and selling of human cells for
therapeutic and diagnostic use in the treatment of human (a) diabetes and (b) liver
diseases; but FIELD shall exclude applications involving the use of cells in
the treatment of tumors where the primary use of the cells is the destruction
or reduction of tumors and does not involve regeneration of tissue or organ
function.

 

 

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

 

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

 

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

 

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

 

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

 

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

 

a)             discounts, credits, allowances and rebates
allowed;

 

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

 

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

 

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d)            amounts allowed or credited on returns; and

 

e)             uncollected accounts.

 

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

 

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

 

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

 

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

 

1.13         “TERRITORY” means the entire world.

 

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

 

Additional
terms may be defined throughout this Agreement.

 

ARTICLE 2 - GRANT

 

2.1           LICENSOR hereby grants to LICENSEE, and
LICENSEE hereby accepts, subject to the terms and conditions hereof, a royalty
bearing, exclusive license in the TERRITORY in the FIELD and under the LICENSED
TECHNOLOGY to (a) research, develop, make, have made, use, sell, offer for
sale, import and export LICENSED PRODUCTS, (b) research, develop, use,
practice, sell, offer for sale, import and export LICENSED PROCESSES and (c) develop,
use, perform, sell, offer for sale, import and export LICENSED SERVICES.  By way of example, but not in limitation,
LICENSEE shall have the right to use LICENSED TECHNOLOGY within the FIELD to
produce mammalian embryonic stem (ES) cells and to produce from those mammalian

 

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embryonic cells, differentiated cells for human therapeutic purposes or
for commercial research purposes, including drug screening assays, and to
produce pluripotent cells including ES cells, differentiated human cells for
human diagnostic and therapeutic purposes and/or for commercial research
purposes, including drug screening assays.

 

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

 

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

 

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

 

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

 

c)             the sublicense shall include fair
consideration.

 

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

 

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

 

2.6           Notwithstanding anything stated herein,
nothing in this Agreement shall be construed as preventing LICENSOR from
practicing the LICENSED TECHNOLOGY within the FIELD for non-commercial in-house
research purposes.  In the event that
LICENSOR requests that LICENSEE deliver to LICENSOR the LICENSED TECHNOLOGY or
LICENSED PRODUCTS in the FIELD for research purposes, LICENSEE shall make the
LICENSED

 

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TECHNOLOGY or LICENSED PRODUCTS available to LICENSOR on commercially
reasonable terms.  In the event LICENSOR
requires the use of collaborators in its research, LICENSEE shall also make such
LICENSED TECHNOLOGY OR LICENSED PRODUCTS available to such collaborator if
LICENSEE, in its sole but
reasonable discretion is satisfied that providing such items to a collaborator
will not endanger its exclusive commercial control of such items or result in
their use by a competitor.

 

ARTICLE 3 - LICENSEE
OBLIGATIONS RELATING TO COMMERCIALIZATION

 

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

 

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

 

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

 

3.4           In the event that LICENSOR determines that
LICENSEE has not fulfilled its obligations under this Article 3,
LICENSOR shall furnish LICENSEE with written notice of such determination.  Within thirty (30) days after receipt of such
notice, LICENSEE shall (i) fulfill the relevant obligation, (ii) negotiate
with LICENSOR a mutually acceptable schedule of revised

 

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obligations, or (3) if LICENSEE disputes the alleged failure to
fulfill its obligations, it shall promptly seek appropriate judicial
determination of the matter and diligently pursue such action to a final
determination with all appropriate speed; failing which, LICENSOR shall have
the right, immediately upon written notice to LICENSEE, to terminate this
Agreement as provided in Section 9.2 hereof.

 

ARTICLE 4 - CONSIDERATION

 

4.1           Initial Payment.  In
partial consideration of the license granted to LICENSEE from LICENSOR in Article 2
of this Agreement, LICENSEE agrees to pay as a “License Fee” to LICENSOR
$225,000 in a convertible promissory note in the form attached hereto as Exhibit B.

 

4.2           Royalties.

 

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

 

(i)            6% on therapeutics,

(ii)           3% on diagnostics, and

(iii)          10% on commercial research use.

 

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

 

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

 

4.3           Minimum Royalties.  Within
2 business days from the Effective Date hereof, LICENSEE shall pay to LICENSOR
a minimum royalty fee of $175,000 in cash or by wire transfer.  In addition, commencing 12 months following
the Effective Date, LICENSEE shall pay to LICENSOR additional minimum royalty
fees equal to the difference between total Royalties actually paid in the
preceding 12 months and the following minimum amounts:

 

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At
12 months, $10,000

At
24 months, $25,000

At
36 months, $40,000

Annually
thereafter, $50,000.

 

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

 

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

 

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

 

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

 

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

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

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

 

4.8           Stacking Milestone Payments.  The
milestone payments shall be in addition to any royalties specified elsewhere in
this Article 4, but shall not apply to diagnostic, commercial research,
or any other non-therapeutic uses.  If
LICENSEE is obligated to pay or has paid to LICENSOR similar Milestone Payments
under another license agreement with respect to the

 

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FIELD, then LICENSEE shall have the right to pro-rate such Milestone
Payments against the Milestone Payments owing to LICENSOR under this Agreement
such that in no event shall the total of all Milestone Payments due from
LICENSEE to LICENSOR exceed the amounts stated in Section 4.7.  Pro-rating of payments shall be made in the
ratio of the minimum royalties payable under this Agreement to the minimum
royalties payable under any other agreement covered hereby under which
Milestone Payments are owed.

 

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

 

4.10         Payments in U.S. Currency.  All
payments due under this Agreement shall be paid in cash to LICENSOR and all
payments shall be made in United States currency.  Conversion of foreign currency to U.S. dollars
shall be made at the conversion rate reported in The Wall Street Journal
on the last working day of the calendar quarter to which the payment relates.

 

4.11         Taxes.  Subject to the limits of Section 1.8
hereof, all payments due hereunder shall be paid in full without deduction of
taxes or other fees which may be imposed by any government and which shall be
paid by LICENSEE; provided, however, that any withholding tax required to be
withheld by LICENSEE on royalty payments under the laws of any country in the TERRITORY
on behalf of LICENSOR will be timely paid by LICENSEE to the appropriate governmental
authority, and LICENSEE will furnish LICENSOR with proof of payment of such tax.
 Any such tax actually withheld may be
deducted from royalty payments due to LICENSOR under this Agreement.  If at any time legal restrictions prevent the
prompt remittance of part or all of any payments owed by LICENSEE to LICENSOR
hereunder with respect to any country in the TERRITORY, payment shall be made
through any lawful means or methods that may be available, and as LICENSEE
shall reasonably determine is appropriate.

 

4.12         Overdue Payments.  Any
payments to be made by LICENSEE hereunder that are not paid on or before the
date such payments are due under this Agreement shall bear interest, to the
extent permitted by law, at two percentage points above the Prime Rate of
interest as reported in The Wall Street Journal on the date payment is
due, with interest calculated based on the number of days that payment is
delinquent.

 

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ARTICLE 5 - REPORTS AND
RECORDS

 

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

 

5.2           After the first commercial sale of a LICENSED
PRODUCT, LICENSED PROCESS, 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 LICENSOR a true and accurate report, giving such
particulars of the business conducted by LICENSEE and its permitted sublicensees
during the preceding three-month period under this Agreement as shall be pertinent
to a royalty and Sublicense Income accounting hereunder.  Without limiting the generality of the
foregoing, these reports shall include at least the following:

 

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

 

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

 

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

 

d)            the deductions applicable as provided in Section 1.8;
and

 

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

 

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

 

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

 

ARTICLE 6 - PATENT
PROSECUTION

 

6.1           LICENSOR shall be solely responsible for the
continued prosecution of pending patent applications included in the PATENT
RIGHTS and the issuance of such applications after allowance.  The prosecution, filing and maintenance of all
patents and applications shall be the primary responsibility of LICENSOR.  LICENSEE agrees to cooperate fully with
LICENSOR, as requested by LICENSOR and at LICENSOR’s expense, in the
preparation, filing, prosecution, and maintenance of the patent applications
and patents included in the PATENT RIGHTS.  With respect to Australia, Canada, Europe,
Mexico, Japan and Israel, LICENSEE shall pay to LICENSOR on or before the due
date one half (1/2) of any future annuity and maintenance fees with respect to
filings stemming from applications 10/227,282, PCT/US02/26945 and 60/539,796,
provided LICENSOR notifies LICENSEE of the amount of such payments due at least
30 days prior to their due date.

 

ARTICLE 7 - PROSECUTION OF INFRINGERS

AND DEFENSE OF PATENT RIGHTS

 

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

 

ARTICLE 8 -
INDEMNIFICATION

 

8.1           Indemnification of the LICENSOR.  LICENSEE
shall be responsible for and shall indemnify, defend, and hold harmless
LICENSOR, its agents, attorneys, representatives, third party beneficiaries and
their respective heirs, executors, successors and assigns (collectively, the “LICENSOR
Indemnitees”) from and against all liabilities of any kind whatsoever,
including legal expenses and reasonable attorneys’ fees, incurred or imposed
upon any of the LICENSOR Indemnitees in connection with or as a consequence of
any claims (including third party claims), suits, actions, demands or judgments
arising out of the death of or injury to any person or persons or out of any
damage to property resulting from the development, production, manufacture,
sale, use, performance, rendering, consumption or advertisement of the LICENSED
PRODUCT(s), LICENSED PROCESS(es), and/or LICENSED SERVICE(s), or arising from
any obligation, act

 

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or omission performed or failed to be performed hereunder, or from a
breach of any representation or warranty of LICENSEE hereunder unless and to
the extent that such liability arises solely from any action of LICENSOR or any
of its Affiliates.  If the exercise of
LICENSEE’s rights under this Agreement in any country in the TERRITORY is the
subject of a bona fide claim by a third party, filed in a court of competent
jurisdiction after the date hereof, that the exercise of such rights infringes
or conflicts with any intellectual property rights of such third party (a “Third
Party Infringement Claim”), then LICENSEE shall not have any of the rights
granted herein in such country and shall have no obligation to pay LICENSOR any
further payments under Article 4 of this Agreement with respect to
any country of the TERRITORY until such claim is resolved by proper
adjudication or settlement permitting LICENSEE to exercise LICENSEE’s rights
under this Agreement in the applicable country of the TERRITORY.  Notwithstanding anything herein to the
contrary, LICENSOR covenants that it will not (a) assert or bring any
suit, action, claim or other proceeding against LICENSEE based on, in whole or
in part, LICENSEE’s exercise of LICENSEE’s rights, in accordance with the terms
and conditions of this Agreement, with respect to the LICENSED TECHNOLOGY
and/or (b) join in any third party suit, action, claim or other proceeding
against LICENSEE based on, in whole or in part, any intellectual property
rights (including without limitation, patent rights and/or know how) owned by
the applicable third party, so long as LICENSEE is not in violation of this
Agreement.

 

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

 

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

 

11

 

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

 

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

 

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

 

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

 

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

 

8.9           Insurance.  LICENSEE and LICENSOR mutually
agree to maintain insurance or self-insurance that is reasonably adequate to
fulfill any potential obligation to the Indemnified Parties.  LICENSEE and LICENSOR shall continue to
maintain such insurance or self-insurance

 

12

 

during the term of this Agreement and after the expiration or
termination of this Agreement for a period of five (5) years.  Each Party shall provide to the other Party,
upon request, proof of any such insurance policy maintained by such Party.

 

ARTICLE 9 – TERMINATION

 

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

 

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

 

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

 

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

 

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

 

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

 

13

 

ARTICLE 10 – CONFIDENTIALITY
AND NON-DISCLOSURE

 

10.1         Confidential Information; Non-Disclosure.  “Confidential
Information” shall mean any technical, business, financial, customer or other
information disclosed by one Party (the “Disclosing Party”) to the other Party
(the “Receiving Party”) pursuant to this Agreement which is marked “Confidential”
or “Proprietary,” or which, under all of the given circumstances, ought
reasonably to be treated as confidential information of the Disclosing Party.  Such information may be disclosed in oral,
visual or written form (including magnetic, optical or other media).  Except as expressly provided in Section 10.2
below, each Party’s Confidential Information specifically includes without
limitation the respective Party’s business plans and business practices, the terms
of this Agreement, scientific knowledge, research and development or know-how,
processes, inventions, techniques, formulae, products and product plans,
business operations, customer requirements, designs, sketches, photographs,
drawings, specifications, reports, studies, findings, data, plans or other
records, biological materials, software, margins, payment terms and sales
forecasts, volumes and activities, designs, computer code, technical information,
costs, pricing, financing, business opportunities, personnel, and information
of LICENSOR or LICENSEE relating to the LICENSED PROCESSES, LICENSED PRODUCTS or
LICENSED SERVICES whether or not such information is marked or identified
provided that the Disclosing Party provides notice in writing reasonably
identifying such Confidential Information within 30 days of disclosure.  Except to the extent expressly authorized by
this Agreement or by other prior written consent by the Disclosing Party, the
Receiving Party, during the term of this Agreement, and thereafter, shall: (i) treat
as confidential all Confidential Information of the other Party; (ii) use
Confidential Information only for exercising the rights and fulfilling the
obligations set forth in this Agreement, (iii) implement reasonable
procedures to prohibit the disclosure, unauthorized duplication, misuse or
removal of the Disclosing Party’s Confidential Information; (iv) not
disclose Confidential Information to any third party, and (v) only disclose the
Confidential Information to (a) those of its employees who have a need to
know Confidential Information in order to exercise the rights and fulfill the
obligations set forth in this Agreement and (b) legal and professional
advisors and existing and potential investors and their legal and professional
advisors, each of which is bound by a written agreement (or in the case of attorneys
or other professional advisors, formal ethical duties) requiring such advisors
and investors to treat, hold and maintain such Confidential Information in
accordance with the terms and conditions of this Agreement, or (c) recipients
of offering documents in connection with any offering of securities where such
disclosure is, in the opinion of counsel for the Disclosing Party, reasonably
required to comply with the investment disclosure laws of any applicable
jurisdiction.  Without limiting the
foregoing, the Receiving Party shall protect the Disclosing Party’s Confidential
Information using at least the same procedures and degree of care that it uses
to prevent the disclosure of its own confidential information of like
importance, but in no event less than reasonable care.

 

10.2         Exceptions.  The Receiving Party shall have
no obligation or liability to the Disclosing Party with regard to any
Confidential Information of the Disclosing Party: (i) that was publicly
known and available at the time it was disclosed or becomes publicly known and

 

14

 

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

 

10.3         Injunctive Relief.  LICENSOR
and LICENSEE acknowledge and agree that any breach of the confidentiality
obligations imposed by this Article 10 will constitute immediate
and irreparable harm to the Disclosing Party and/or its successors and assigns,
which cannot adequately and fully be compensated by money damages and will
warrant, in addition to all other rights and remedies afforded by law,
injunctive relief, specific performance, and/or other equitable relief.  The Disclosing Party’s rights and remedies
hereunder are cumulative and not exclusive.  The Disclosing Party shall also be entitled to
receive from the Receiving Party the costs of enforcing this Article 10,
including reasonable attorneys’ fees and expenses of litigation.

 

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

 

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

 

ARTICLE 11 - PAYMENTS,
NOTICES, AND OTHER COMMUNICATIONS

 

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

 

15

 

Such notices, payments, or other communications shall be effective upon
receipt.

 

	
  In the case of LICENSOR:

  
	
   

  	
  Advanced Cell
  Technology, Inc.

  
	
   

  	
  One
  Innovation Drive

  
	
   

  	
  Worcester,
  MA 01605

  
	
   

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

  
	
   

  	
   

  
	
  With a copy to:

  
	
   

  	
  Pierce Atwood

  
	
   

  	
  One Monument Square

  
	
   

  	
  Portland,
  ME 04101

  
	
   

  	
  Attention: William L.
  Worden, Esq.

  
	
   

  	
   

  
	
  In the case of LICENSEE:

  
	
   

  	
  PacGen Cellco, LLC.

  
	
   

  	
  157 Surfview Drive

  
	
   

  	
  Pacific Palisades, CA
  90272

  
	
   

  	
  Attention: Kenneth Aldrich

  
	
   

  	
   

  
	
  With a copy to:

  
	
   

  	
  Gray Cary Ware &
  Freidenrich

  
	
   

  	
  4365 Executive Drive,
  Suite 1100

  
	
   

  	
  San Diego, CA 92121-2133

  
	
   

  	
  Attention: Lisa Haile

  

 

ARTICLE 12 -
RESPRESENTATIONS AND WARRANTIES OF LICENSOR

 

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

 

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

 

12.2         No Violations.  The
execution, delivery and performance of this Agreement by LICENSOR and the
consummation by LICENSOR of the transactions contemplated hereby does not,: (a) violate
any statute, ordinance, rule or regulation applicable to LICENSOR or by
which any of the LICENSED TECHNOLOGY may be bound; (b) violate any order,
judgment or decree of any court or of any Governmental Authority or regulatory
body, agency or authority applicable to LICENSOR or by which any of the
LICENSED TECHNOLOGY may be bound; (c) require any filing by LICENSOR with,
or require LICENSOR to obtain any permit, consent or approval of, or require
LICENSOR to give any notice to, any Governmental Authority or regulatory body,

 

16

 

agency or authority; or (d) result in a violation or breach by
LICENSOR of, conflict with, constitute a default by LICENSOR (or give rise to
any right of termination, cancellation, payment or acceleration) under or
result in the creation of any Encumbrance upon any of the LICENSED TECHNOLOGY.

 

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

 

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

 

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

 

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

 

12.7         LICENSED TECHNOLOGY.

 

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

 

(b)           Exhibit A identifies each patent or
registration which has been issued to LICENSOR with respect to any of the
LICENSED TECHNOLOGY and identifies each pending patent application or
application for registration which

 

17

 

LICENSOR
has made with respect to any of the LICENSED TECHNOLOGY.  LICENSOR has made available to LICENSEE
correct and complete copies of all such patents, registrations and applications
(as amended to-date) in LICENSOR’s possession and has made available to
LICENSEE correct and complete copies of all other written documentation in LICENSOR’s
possession evidencing ownership and prosecution (if applicable) of each such
item.

 

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

 

12.8         Survival of Representations and Warranties.

 

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

 

18

 

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

 

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

 

ARTICLE 13—REPRESENTATIONS
AND WARRANTIES OF LICENSEE.

 

LICENSEE
represents and warrants to LICENSOR as follows:

 

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

 

13.2         Authorization and Validity of Agreement.  LICENSEE
has full power and authority, including full corporate power and authority, to
execute and deliver this Agreement, to

 

19

 

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

 

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

 

13.4         Survival of Representations and Warranties.

 

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

 

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

 

20

 

representation and warranty prior to its
termination and expiration will be affected in any way by that termination and
expiration.

 

ARTICLE 14 – LIMITATION
OF LIABILITY

 

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

 

ARTICLE 15 -
MISCELLANEOUS PROVISIONS

 

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

 

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

 

21

 

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

 

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

 

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

 

b)            LICENSEE shall comply fully with any and all
applicable local, state, federal and international laws and regulations
relating to the LICENSED PRODUCTS, LICENSED PROCESSES and LICENSED SERVICES,
and the PATENT RIGHTS, in the TERRITORY, including without limitation all export
or import regulations and rules now in effect or as may be issued from time
to time by any governmental authority which has jurisdiction relating to the
export of LICENSED PRODUCTS, LICENSED PROCESSES or LICENSED SERVICES and any
technology relating thereto.  LICENSEE hereby
gives written assurance that it will comply with all such import or export laws
and regulations (including without limitation all Export Administration
Regulations of the United States Department of Commerce), that it bears sole
responsibility for any violation of such laws and regulations,

 

22

 

and that it will indemnify, defend, and hold
LICENSOR harmless (in accordance with Article 8) for the
consequences of any such violation.

 

c)             To the extent that any invention claimed in
the PATENT RIGHTS has been partially funded by the United States Government,
and only to the extent required by applicable laws and regulations, LICENSEE
agrees that any LICENSED PRODUCTS used or sold in the United States will be
manufactured substantially in the United States or its territories.  Current law provides that if a domestic
manufacturer is not commercially feasible under the circumstances, LICENSOR may
seek a waiver of this requirement from the relevant federal agency on behalf of
LICENSEE and, upon LICENSEE’S request, shall cooperate with LICENSEE in seeking
such a waiver.

 

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

 

15.6         Neither Party shall originate any publicity,
news release or other public announcement (“Announcements”), written or oral,
relating to this Agreement or the existence of an arrangement between the
Parties, without the prior written approval of the other Party, which approval
shall not be unreasonably withheld or delayed, except as otherwise required by
law.  The foregoing notwithstanding,
LICENSOR and LICENSEE shall have the right to make such Announcements without
the consent of the other Party in any prospectus, offering memorandum, or other
document or filing required by applicable securities laws or other applicable
law or regulation, provided that such Party shall have given the other Party at
least ten (10) days prior written notice of the proposed text for the
purpose of giving the other Party the opportunity to comment on such text.

 

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

 

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

 

15.9         To the extent commercially feasible, and
consistent with prevailing business

 

23

 

practices and applicable law, all LICENSED PRODUCTS sold pursuant to
this Agreement will be marked with the number of each issued patent that
applies to such LICENSED PRODUCTS.

 

15.10       This Agreement shall be construed, governed,
interpreted and applied in accordance with the laws of the
State of California, U.S.A. without regard to principles of conflicts of law
thereof, except that questions affecting the construction and effect of any
patent shall be determined by the law of the country in which the patent was
granted.

 

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

 

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

 

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

 

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

 

15.15       This Agreement has been prepared jointly and
no rule of strict construction shall be applied against either Party. In
this Agreement, the singular shall include the plural and vice versa and the
word “including” shall be deemed to be followed by the phrase “without limitation.”  The section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.

 

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

 

24

 

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

 

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

 

[Remainder
of this page intentionally left blank]

 

25

 

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

 

 

	
  ADVANCED
  CELL TECHNOLOGY, INC.

  
	
   

  
	
   

  
	
  By:

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

  	
   

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

  
	
  Title:  President & Chief Executive Officer

  

 

 

	
  PACGEN CELLCO, LLC

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Kenneth Aldrich                                  5-14-04

  	
   

  
	
  Printed Name: Kenneth Aldrich

  
	
  Title: Managing MemberExhibit 10.22

 

AGREEMENT TO AMEND ACT/CELLCO LICENSE
AGREEMENTS

 

The following provisions are intended as an amendment to each of the
existing license agreements between PacGen Cellco, LLC (“Celco”) and Advanced
Cell Technology, Inc. (“ACT”) commonly known as the “ACT License”, the “U
Mass License” and the “Infigen License”, all dated as of the 14th day of May,
2004.  Accordingly, each of those
licenses shall be deemed amended as set forth herein and the Parties hereto
shall promptly execute such additional and more formal amendments as may be
deemed necessary and appropriate by counsel for the Parties.  Unless otherwise agreed in writing, such
amendments shall be executed prior to the Second Payment referred to paragraph
2(b) below.

 

1)             New
Field - All retinal and other cell types related to the diagnosis and treatment
of retinal disease or the slowing or stopping the progression of retinal
degenerative diseases.  But such license
shall not apply to the use of non-retinal cells for use in the treatment of non-retinal
diseases or conditions.

 

2)             Added
Initial Fees (to be allocated among three licenses at the same ratio as the previous
license but with 5% more of such Fees being allocated to the ACT license in consideration
of the retinal patent application being added to the list of licensed patents):

 

	
  a)

  	
  Down Payment (to be wired
  upon signing hereof or, if that is not feasible, on the first business day
  thereafter.)

  	
   

  	
  $

  	
  50,000

  	
   

  
	
  b)

  	
  Second Payment (w/in 15
  days of signing)

  	
   

  	
  100,000

  	
   

  

 

3)             Added
Minimum Fees:  (to be allocated among three licenses as ACT desires)

 

	
  a)

  	
  12 months

  	
   

  	
  $

  	
  12,500

  	
   

  
	
  b)

  	
  24 months

  	
   

  	
  25,000

  	
   

  
	
  c)

  	
  36 months

  	
   

  	
  37,500

  	
   

  
	
  d)

  	
  Thereafter
  (annually)

  	
   

  	
  50,000

  	
   

  

 

4)             Milestone
and Royalty Payments:  Same as existing contracting, including
non-stacking provisions, i.e.

 

a)        6%
Therapeutics

b)       3%
Diagnostics

c)       10%
Commercial Research

 

5)             Rights:  Same
Rights (clinical use, manufacture and research) as with previous license
arrangements, including rights to any cells, cell lines or cell strains
developed, or any processes for creating such cells, cell lines or strains,
that have been FDA- certified, are in the process of being certified by the
FDA, or are in the process of development, for clinical or research use in the “Field”
as described in paragraph (1) above.

 

6)             In
kind assistance by ACT:  ACT shall provide as needed the services of Dr. Lanza,
his assistants and the use of such lab space and equipment as they may need
that ACT can reasonable supply, understanding that Dr. Lanza, his
assistants are the full-time

 

 

employees of ACT
and the equipment will be primarily used for ACT research.  Such assistance will be for a period of one
year or until:

a)             The
completion of preliminary animal studies to assess safety and efficacy of applying
cells for the treatment of retinitis pigmentosa and/or macular degeneration
(including any contracts or rights already established for initial animal
studies);

b)            Completion
and submission of a scientific paper to a peer-reviewed journal co-authored by
ACT and Cellco scientists presenting animal data and analysis (subject to the
pre-approval of both parties prior to publication);

c)             Completion
of consultations with the FDA to assess the suitability of animal data gathered
to initiate the paperwork for early stage human clinical trials;

d)            Initiation
of process of filing the paperwork for early stage human trials.

 

If ACT is unable or unwilling to carry forward the clinical or
pre-clinical work related to these tasks as outlined in this paragraph 6,
Cellco shall have the right to manage and carry the work forward so long as
Cellco provides funding for the project, in which case any intellectual
property that is developed under Cellco’s management and funding shall accrue
to Cellco, and the costs thereof shall be treated as prepayment of future
licensing requirements under the Cellco/Act License agreements.

 

7)             In
kind assistance by Cellco:  Cellco shall as much as possible within
the constraints of time and resources, produce necessary media and reagents and
provide cell expansion services to ACT for this project.

 

8)             Collaboration
with FDA:  Cellco and ACT shall jointly work with the FDA as
required.

 

9)             Current
Intellectual Property:  All intellectual property previously licensed
by Cellco from ACT and all provisions of existing licenses from ACT shall apply
to the Field covered by this term, including provisions governing future IP
discoveries.

 

10)           Other
Changes:  No other changes in existing Licenses except procedural
ones needed to implement these amendments.

 

11)           Option
re Neuron Field:  Upon payment of the final Initial Fee as provided
above, Cellco shall have a six month option to license the additional field of
Neurons for an initial Fee of $1.2 million, payable in two installments six
months apart, with other terms to be the same as under this agreement except
for paragraph 6 and mutually-agreeable diligence provisions.

 

Although not a condition precedent to this Amendment to License, Cellco
and ACT have agreed to use best efforts to obtain a minimum of $3,000,000 of
equity financing for ACT and, if feasible, create and finance a merger or joint
venture between the two companies.  In
furtherance of this goal, Cellco agrees to use its best effort to provide to
ACT prior to September 15, 2004 a loan of $150,000.  ACT shall not be obligated to accept such
loan, but agrees that if is does accept the loan, it will grant as partial
consideration for such loan a 30 day option to acquire 51% of ACT for a total
consideration of $3,000,000, which shall

 

 

include the $150,000 loan.  Should Cellco not tender the remaining
$2,850,000 within 30 days of funding the loan, then the option shall expire and
the $150,000 plus 10% ($165,000) shall be deemed as a prepayment of future
royalty obligations from Cellco to ACT.  ACT
shall, however, cooperate fully and use all reasonable efforts to assist Cellco
in conducting such due diligence as it may require during the option period.

 

Notwithstanding any such option, however, ACT may at any time prior to
tender of the balance of the option price elect not enter into a third party
agreement to finance ACT independently of Cellco.  If ACT so elects, it shall
repay the loan from Cellco on or before the end of the option period.

 

In Witness Whereof, the Parties hereto have executed this Agreement to
Amend ACT/Cellco License Agreements.

 

The Date of this Agreement is September 7, 2004.

 

	
  PacGen Cellco, LLC

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Ted Aldeich

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Advanced Cell Technology, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

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