Document:

Exhibit
10.6

 

NON-EXCLUSIVE
LICENSE AGREEMENT

 

This Agreement is made and entered into this
lst day of January, 2001 (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
PPL Therapeutics (Scotland) Limited, a company incorporated under the laws of
Scotland, registered number 99179; whose registered office is at Roslin,
Midlothian, EH 25 9PP, Scotland, UK (“PPL”) (ACT and PPL sometimes hereinafter
referred to as the “parties”).  As set
forth below, the University of Massachusetts, a public institution of higher
education of the Commonwealth of Massachusetts (the “University”), has agreed
to certain provisions of this Agreement.

 

WITNESSETH

 

WHEREAS, ACT owns or has licensed with a
sublicensable interest the PATENT RIGHTS (as defined below); and

 

WHEREAS, PPL desires to obtain a nonexclusive
license from ACT under the PATENT RIGHTS upon the terms and conditions
hereinafter set forth; and

 

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

 

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           “PERMITTED TRANSFEREE”
means a single legal entity (such as a corporation, partnership, limited
liability company or joint venture) in which PPL is a shareholder and has a
right to appoint a director to whom this Agreement and the xenotransplantation
business of PPL to which this Agreement relates will be transferred.

 

1.2           “PATENT RIGHTS” means
the patents and patent applications identified on Exhibit A attached
hereto, all divisionals, continuations and continuations-in-part that derive
from the identified patent applications (including from the patent applications
for the identified patents), foreign filings related to the foregoing patents and
patent applications, and any patents issuing on said applications together with
all reissues, reexaminations, extensions and substitutions (or the equivalent)
thereof.  The parties agree that Appendix
A may be revised from time to time after the EFFECTIVE DATE to reflect
changes thereto.

 

1.3           A “LICENSED PRODUCT”
shall mean any product, or part thereof or derived therefrom, the development,
manufacture, sale, lease, use or import of which is covered in whole

 

 

or in part by a VALID CLAIM of the PATENT RIGHTS in the country in
which any such product or part thereof is developed, made, used, sold or
imported by PPL (or by any third party on PPL’s behalf).  By way of illustration but not limitation, the
parties agree that Licensed Products include cloned swine, the progeny of such
swine, and organs obtained or derived from cloned swine and the progeny of such
cloned swine.

 

1.4           “NET SALES” shall mean
the gross amount of any and all cash payments, royalties, milestone payments,
success fees, equity payments and any other consideration of any kind
whatsoever which, directly or Indirectly is received by or inures to the
benefit of PPL (or by any third party on PPL’s behalf) from any person or
entity for the development, manufacture, sale, lease, use or import of LICENSED
PRODUCTS less, to the extent applicable, the following:

 

(a)           discounts allowed;

 

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

 

(c)           amounts allowed or
credited on returns.

 

Any such allowed deductions shall be listed on the invoice for the
applicable LICENSED PRODUCT.

 

1.5           “FIELD OF USE” shall
mean the cloning of swine for the sole purpose of developing, producing and
selling swine and/or swine-derived organs (including organs from the progeny of
such swine) (but excluding cells (other than associated immune cells required
to induce tolerance of the organs) and tissues) for transplantation of such
organs in humans.

 

1.6           “VALID CLAIM” means a
claim of any unexpired United States or foreign patent or patent application
within the PATENT RIGHTS which shall not have been withdrawn, cancelled or
disclaimed, nor held invalid by a court of competent jurisdiction.

 

1.7           “UMASS LICENSE” means
the Exclusive License Agreement between ACT and the University, dated April 16,1996,
as amended by Amendment to Exclusive License Agreement dated September 1,1997
and Second Amendment to Exclusive License Agreement dated May 31,2000.

 

1.8           “UMASS PATENT RIGHTS”
means PATENT RIGHTS licensed by ACT from the University under the UMASS LICENSE.

 

1.9           “CONFIDENTIAL
INFORMATION” means confidential or proprietary information of ACT or PPL
relating to the PATENT RIGHTS or LICENSED PRODUCTS.  CONFIDENTIAL INFORMATION may be in written,
graphic, oral or physical form and may include scientific knowledge, know-how,
processes, inventions, techniques, formulae, products,

 

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business operations, customer requirements, designs, sketches,
photographs, drawings, specifications, reports, studies, findings, data, plans
or other records, biological materials, and/or software.  CONFIDENTIAL INFORMATION shall not include:

 

(a)           information which is,
or later becomes, generally available to the public through no fault of the
recipient;

 

(b)           information
which is provided to the recipient by an independent third party having no
obligation to keep the information secret;

 

(c)           information which the
recipient can establish by written documentation was previously known to it; or

 

(d)           information
which the recipient can establish by written documentation was independently
developed by it without reference to the CONFIDENTIAL INFORMATION.

 

The parties agree that the specific terms (but not the overall
existence) of this Agreement shall be considered CONFIDENTIAL INFORMATION;
provided, however, that the parties may disclose the terms of this Agreement to
investors or potential investors and in any prospectus, offering, memorandum,
or other document or filing required by applicable security laws or other
applicable law or regulation.  The
parties may also disclose CONFIDENTIAL INFORMATION that is required to be
disclosed to comply with applicable law or court order, provided that the
recipient gives reasonable prior written notice of the required disclosure to
the discloser and reasonably cooperates with the discloser’s efforts to prevent
such disclosure.

 

ARTICLE 2
– LICENSE GRANT

 

2.1           ACT hereby grants to
PPL, and PPL accepts, subject to the terms and conditions hereof, a worldwide,
nonexclusive license in the FIELD OF USE to use the PATENT RIGHTS to make, have
made, use, sell, lease and import LICENSED PRODUCTS.  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.

 

2.2           Notwithstanding the
provisions of Section 13.11, PPL shall have the right to assign this
Agreement in its entirety to a PERMITTED TRANSFEREE, provided that in any such
assignment:

 

(a)            the
assignment shall expressly prohibit any further assignment or transfer of this
Agreement or the rights granted hereunder (including without limitation by
sublicense) by the PERMITTED TRANSFEREE under the terms of this Section 2.2
and the assignment agreement shall be subject to the consent of the University,
which consent shall be granted or denied in the sole discretion of the
University.

 

(b)           PPL
shall consult with ACT and the University, and shall furnish ACT and

 

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the University with any proposed assignment agreement with the
PERMITTED TRANSFEREE, to permit ACT and the University to engage in discussions
with PPL (and the PERMITTED TRANSFEREE if appropriate) regarding the form and
substance of the assignment agreement.  Upon execution of the assignment agreement,
PPL shall promptly provide ACT and the University with a fully executed copy of
the agreement, which shall be deemed CONFIDENTIAL INFORMATION subject to the
provisions of Article 10 of this Agreement.

 

(c)           Upon
such assignment, PPL’s rights and obligations under this Agreement shall cease,
and the PERMITTED TRANSFEREE shall be substituted for PPL in all respects under
the terms of this Agreement.

 

2.3           The license “to have
made” granted in Section 2.1 means only that PPL may contract with a third
party or parties to develop, manufacture or sell LICENSED PRODUCTS on behalf of
PPL.

 

2.4           Promptly following
execution of this Agreement, ACT shall provide PPL with all information and
data relating to the PATENT RIGHTS and as may be reasonably necessary to allow
PPL to exploit the license granted hereunder.

 

2.5           To the extent the
University, the federal government or any other parties have rights in the
PATENT RIGHTS pursuant to Article 2 of the UMASS LICENSE, the License granted
hereunder is subject to such rights.

 

2.6           PPL acknowledges that a
portion of the PATENT RIGHTS licensed to PPL hereunder is owned by the
University and is licensed to ACT under the UMASS LICENSE.  PPL acknowledges, understands and agrees that
in the event the UMASS LICENSE is terminated for any reason pursuant to the
provisions of the UMASS LICENSE, this Agreement shall automatically be assigned
to the University and PPL will thereafter make any payments due to ACT under
this Agreement directly to the University.  Further, promptly following such termination,
PPL and the University will enter into a direct license agreement reflecting
the applicable terms of this Agreement and the UMASS LICENSE.

 

ARTICLE 3
- DUE DILIGENCE

 

3.1           PPL shall use
commercially reasonable and diligent efforts to bring one or more LICENSED
PRODUCTS 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 throughout the life of this Agreement.  Without limiting the generality of the
foregoing, PPL shall, at its expense and for a period of two years from the
date hereof, undertake product development and other activities intended to
enhance and further commercialize the PATENT RIGHTS in the FIELD OF USE.

 

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3.2           PPL shall maintain
complete and accurate records of LICENSED PRODUCTS that are made, used, sold,
leased or imported by PPL (or by any third party on behalf of PPL) under this
Agreement.  Not later than May lst
of each year following the year concluding on the first anniversary of the
EFFECTIVE DATE, PPL shall furnish ACT with a summary report on the progress of
its efforts during the prior year to develop and commercialize LICENSED
PRODUCTS, including without limitation research and development efforts,
efforts to obtain regulatory approval, marketing efforts (including LICENSED
PRODUCTS made, used, sold or imported) and sales figures, provided that such
reports shall be deemed confidential information subject to the provisions of Article 10
of this Agreement.

 

ARTICLE 4
- CONSIDERATION

 

4.1           Initial Payment.
PPL shall pay to ACT an initial License Fee of FIFTY THOUSAND DOLLARS
($50,000), one hundred percent (100%) of which payment shall be deemed earned
and shall be due and payable on or before January 21, 2002. Except as
provided in Section 9.3, the License Fee is not refundable and is not
creditable against other payments due to ACT under this Agreement.

 

4.2           Milestone Payments.
PPL shall pay ACT a milestone payment of $1,000,000 upon the first market
approval by the U.S. Food and Drug Administration (or foreign equivalent) of a
LICENSED PRODUCT in the FIELD OF USE.  The
milestone payment is nonrefundable and is not creditable against any other
payments due to ACT under this Agreement.  The milestone payment shall be due and payable
within thirty (30) days after the issuance or grant of the market approval
described above.

 

4.3           Royalties and other
Consideration. (a) In partial consideration of the license granted to
PPL from ACT in Article 2 of this Agreement, PPL shall pay to ACT a
royalty equal to 2% of the Net Sales of all LICENSED PRODUCTS developed, made,
used, sold, leased or imported by PPL (or by any third party on PPL’s behalf)
or any customer of PPL, provided, however, that in the event that PPL is
legally required to make royalty payments to one or more third parties (other
than to an affiliated or related company) in order to make, use, sell, lease or
import LICENSED PRODUCTS, the royalty payment shall be decreased by one-quarter
of one percent (0.25%) for each one percent (1%) of actual royalty payments
made to third parties under such required licenses, but in no event shall such
royalty payment due to ACT be reduced below 1.5%.  (b) No multiple royalties shall be
payable because any LICENSED PRODUCT, its manufacture, use, sale, lease or
import are or shall be covered by more than one patent or patent application
within the PATENT RIGHTS. (c) The obligation of PPL to pay royalties on
sales of LICENSED PRODUCTS 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 which the LICENSED PRODUCT is manufactured, used, sold, leased, used
or imported.

 

4.4           Assignment Proceeds.
PPL shall pay to ACT three percent (3%) of the the gross amount of any and all
consideration of any kind whatsoever, including, without limitation, cash or
equity payments (the “Assignment Proceeds”) which, directly or indirectly, is
received by or

 

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inures to the benefit of PPL in connection with the assignment of this
Agreement to a PERMITTED TRANSFEREE; provided, however, that if said assignment
is to a PERMITTED TRANSFEREE that is controlled by PPL, PPL shall have no
obligation to pay to ACT any of the ASSIGNMENT PROCEEDS.  For purposes of this paragraph, the term “control”
means (a) in the case of corporate entities, direct or indirect ownership
of more than fifty percent (50%) of the stock or shares entitled to vote for
the election of directors; and (b) in the case of non-corporate entities,
direct or indirect ownership of more than fifty percent (50%) of the equity
interest with the power to direct the management and policies of such
non-corporate entities.

 

4.5           All payments due
hereunder shall be paid in fall without deduction of (i.e., net of) any
VAT or other taxes or other fees which may be imposed by any government and
which shall be paid by PPL.

 

4.6           All payments due
hereunder shall be paid by PPL to ACT in United States dollars.  If any currency conversion shall be required
in connection with the payment of royalties or other amounts due hereunder,
such conversion shall be at the rate of conversion reported in the Wall Street
Journal on the last working day of the calendar quarter to which the payment
relates.

 

4.7           PPL shall pay ACT
interest on any overdue amounts at the rate of eighteen percent (18%) per
annum, or the maximum rate allowed under applicable law, whichever is higher,
from the date when such payment should have been made pursuant to Section 4.1,
4.2, 4.3, 4.4 or 5.3, as applicable.

 

ARTICLE 5
- REPORTS AND RECORDS

 

5.1           PPL 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 ACT hereunder.  Said books of account shall be kept at PPL’s
principal place of business or at such other location as may be agreed upon by
the parties.  Said books and the
supporting data shall be open upon reasonable advance 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 ACT or its agents
for the purpose of verifying PPL’s royalty statement or compliance in other
respects with this Agreement.  If any
such audit discloses an error in any payment to ACT, PPL shall (without limiting
ACT’s other remedies with respect thereto) pay to ACT, within thirty (30) days
of the discovery of the error, (a) all deficiencies in such payments, (b) interest
on such deficiencies from the date such payment was due until the date paid at
the rate equal to one and one-half percent (11/2%) per
month, and (c) if such error is in excess of ten percent (10%) of any
payment, the cost of the audit.  In all
other cases, the costs of the audit shall be paid for by ACT.

 

5.2           After the first
commercial sale of a LICENSED PRODUCT by PPL (or by any third party on PPL’s
behalf), PPL, within sixty (60) 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 PPL during the
preceding three-month period under this Agreement as shall be pertinent to a
royalty accounting hereunder.  Each such
report shall include at least the following:

 

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(a)           number(s)
and type(s) of LICENSED PRODUCTS manufactured, sold, leased, used or imported
by PPL (or by third parties on PPL’s behalf);

 

(b)           total
billings and consideration received for LICENSED PRODUCTS developed,
manufactured, sold, leased, used or imported by PPL (or by third parties on PPL’s
behalf);

 

(c)           deductions
applicable as provided in Paragraph 1.4;

 

(d)           names
and addresses of third party subcontractors of PPL.

 

5.3           With each such report
submitted, PPL shall pay to ACT the royalties and other payments due and
payable under this Agreement.  If no
royalties or other payments shall be due, PPL shall so report.

 

ARTICLE 6
- PATENT PROSECUTION

 

ACT 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.  Additionally, ACT shall pay all government
Fees in any given country required to maintain the PATENT RIGHTS, and shall
submit evidence to PPL upon request that such fees have been timely paid.  The prosecution, filing and maintenance of all
patents and applications included in the PATENT RIGHTS shall be the sole
responsibility of ACT.

 

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 PATENT RIGHTS or of any claim of
invalidity, unenforceability, or non-infringement of the PATENT RIGHTS.  ACT shall have the sole responsibility to
prosecute or defend such claims, as applicable.  PPL shall if requested provide reasonable
assistance to ACT, at ACT’s expense, in connection with the prosecution or
defense of such claims; provided, however, that PPL shall have no obligation to
provide such assistance if it providing such assistance would breach the
enforceable terms of the June 2, 1998 License Agreement between PPL and
the Roslin Institute.

 

ARTICLE 8
- INDEMNIFICATION,

 LIMITATION OF LIABILITY AND INSURANCE

 

8.1           PPL shall at all times
during the term of this Agreement and thereafter, indemnify, defend and hold
harmless ACT and the University and their trustees, directors, officers,
employees and affiliates against all liabilities of any kind whatsoever,
including legal expenses and reasonable attorneys’ fees, arising out of the
death of or injury to any person or persons or out of any damage to property
resulting from the development, import, production, manufacture,

 

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sale,
use, lease, performance, consumption or advertisement of the LICENSED PRODUCT(s)
or arising from any obligation, act or omission, or from a breach of any
representation or warranty of PPL hereunder, excepting only claims that the
PATENT RIGHTS infringe third party intellectual property rights or claims that
result from any material breach by ACT of this Agreement.  Any indemnification obligations set forth in
this Agreement shall be subject to the following conditions: (i) the
indemnified party shall notify the indemnifying party in writing promptly upon
learning of any claim or suit for which indemnification is sought; (ii) the
indemnifying party shall have control of the defense or settlement, provided
that the indemnified party shall have the right (but not the obligation) to
participate in such defense or settlement with counsel at its selection and at
its sole expense; and (iii) the indemnified party shall reasonably
cooperate with the defense, at the indemnifying party’s expense.

 

8.2           EXCEPT AS OTHERWISE
EXPRESSLY SET FORTH IN THIS AGREEMENT, ACT, ITS TRUSTEES, DIRECTORS, OFFICERS,
EMPLOYEES, AND AFILIATES 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
CLAIMS, 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 ACT
THAT THE PRACTICE BY PPL OF THE LICENSE GRANTED HEREUNDER SHALL NOT INFRINGE
THE PATENT RIGHTS OF ANY THIRD PARTY.  IN
NO EVENT SHALL ACT, ITS TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES AND AFFILIATES
BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING
ECONOMIC DAMAGE OR INJURY TO PROPERTY AND LOST PROFITS, REGARDLESS OF WHETHER
ACT SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT SHALL KNOW OF
THE POSSIBILITY OF SUCH DAMAGES.

 

8.3           PPL agrees to maintain insurance or
self-insurance that is reasonably adequate to fulfill any potential obligation
to the indemnified parties.  PPL shall
continue to maintain such insurance or self-insurance during the term of this
Agreement and after the expiration or termination of this Agreement for a
period of five (5) years.

 

ARTICLE 9 – TERMINATION

 

9.1           This Agreement shall be effective on the
EFFECTIVE DATE and shall extend ten (10) years or until the expiration of
the last to expire of the PATENT RIGHTS, whichever is later, unless sooner
terminated as provided in this Article 9.

 

9.2           ACT may terminate this
Agreement and the rights, privileges and license granted hereunder by written
notice upon a breach or default of this Agreement by PPL, as follows:

 

(i)            non-payment
of any amounts due which is not cured within ten (10) days of receipt of
written notice of such non-payment; or

 

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(ii)           breach
of any obligation which is not cured within thirty (30) days
of a written request to remedy such breach, or if the breach cannot be cured
within said thirty (30) day period, failure of PPL within said thirty (30) day
period to proceed with reasonable promptness thereafter to cure the breach; or

 

(iii)          bankruptcy,
appointment of a receiver, or involvement in any other insolvency proceeding.

 

Such termination shall become automatically effective unless PPL shall
have cured any such material breach or default prior to the expiration of the
applicable cure period.

 

9.3           PPL shall have the
right to terminate this Agreement immediately by written notice to ACT in the
event that the University denies PPL’s request for the University’s consent to
the transfer or assignment of this Agreement to a PERMITTED TRANSFEREE pursuant
to Section 2.2 hereof.  Upon
termination of this Agreement by PPL pursuant to this Section 9.3, ACT
shall refund to PPL, within thirty (30) days of ACT’s receipt of said notice of
termination, the initial License Fee of FIFTY THOUSAND DOLLARS ($50,000) paid
to ACT by PPL pursuant to Section 4.1 hereof.

 

9.4           PPL shall have the
right to terminate this Agreement at any time on six (6) months’ prior notice
to ACT, and upon payment of all amounts due ACT through the effective date of
the termination.

 

9.5           Upon termination of
this Agreement for any reason, nothing herein shall be construed to release
either party from any obligation that matured prior to the effective date of such
termination; and Articles/Sections 1, 5.1, 8, 9.4, 10 and 12, and any other
Sections or provisions which by their nature are intended to survive
termination, shall survive any such termination.

 

ARTICLE 10
- CONFIDENTIALITY

 

During the course of this Agreement, ACT and
PPL may provide each other with CONFIDENTIAL INFORMATION.  CONFIDENTIAL INFORMATION may be disclosed in
oral, visual or written form, and includes such information that is designated
in writing as such by the discloser at the time of disclosure, orally disclosed
information that is designated in writing as confidential within 30 days after
such oral disclosure, or information which, under all of the given
circumstances ought reasonably be treated as CONFIDENTIAL INFORMATION of the
disclosing party.  ACT and PPL each
intend to maintain the confidential or trade secret status of their
CONFIDENTIAL INFORMATION.  Each shall
exercise reasonable care to protect the CONFIDENTIAL INFORMATION of the other
from disclosure to third parties; no such disclosure shall be made without the
other’s written permission.  Upon
termination or expiration of this Agreement, ACT and/or PPL shall comply with
the other’s written request to return all CONFIDENTIAL INFORMATION that is in
written or tangible form.  Except as
expressly provided herein, neither ACT nor PPL is granted any license to use
the other’s CONFIDENTIAL

 

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INFORMATION.  The obligations of
ACT and PPL 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
required or otherwise given pursuant to this Agreement shall be in writing and
sent by certified first class mail, return receipt requested, postage prepaid,
or by nationally recognized overnight carrier addressed to the parties at the
following addresses or such other addresses as such party furnishes to the
other party in accordance with this paragraph.  Such notices, payments or other communications
shall be effective upon receipt.

 

	
  In the case of 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 PPL:

  	
   

  
	
   

  	
   

  
	
   

  	
  PPL
  Therapeutics (Scotland) Limited

  
	
   

  	
  Roslin

  
	
   

  	
  Midlothian

  
	
   

  	
  EH 25 9PP

  
	
   

  	
  Scotland, UK

  

 

ARTICLE 12
- REPRESENTATIONS AND WARRANTIES

 

12.1         ACT represents and
Warrants that it owns or has licensed with a sublicensable interest the PATENT
RIGHTS, that it has the full legal right and power to grant the licenses granted
hereunder, that this Agreement constitutes the binding legal obligation of ACT,
enforceable in accordance with its terms, and that the execution and
performance of this Agreement by ACT will not violate, contravene or conflict
with any other agreement to which ACT is a party or by which it is bound or
with any law, rule or regulation applicable to ACT.

 

12.2         PPL represents and
warrants that it has full corporate power and authority to enter into this
Agreement, that this Agreement constitutes the binding legal obligation of PPL,
enforceable in accordance with its terms, and that the execution and
performance of this

 

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Agreement
by PPL will not violate, contravene or conflict with any other agreement to which PPL is a party or by which it
is bound or with any law, rule or regulation applicable to PPL, and that
any permits, consents or approvals necessary or appropriate for PPL to enter
into this Agreement have been obtained.

 

12.3         This Section 12 shall survive expiration
or termination of this Agreement.

 

ARTICLE 13
- MISCELLANEOUS PROVISIONS

 

13.1         PPL shall comply with all local, state,
federal and international laws and regulations relating to the development,
manufacture, use, sale, lease and import of LICENSED PRODUCTS.  Without limiting the generality of the
foregoing, PPL agrees to comply with the following:

 

(a)           PPL shall obtain all necessary approvals from
the FDA and any similar governmental authorities of any foreign jurisdiction in
which PPL intends to make, use, sell, lease or import LICENSED PRODUCTS.

 

(b)           PPL shall comply with any and all applicable
local, state, federal and international laws and regulations relating to the
LICENSED PRODUCTS and the PATENT RIGHTS, 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 and any technology relating thereto
(including all United States laws and regulations controlling the export of certain
commodities and technical data, including without limitation all Export
Administration Regulations of the United States Department of Commerce.  Among other things, these laws and regulations
prohibit, or require a license for, the export of certain types of commodities
and technical data to specified countries).  PPL hereby gives written assurance that it
will comply will all such laws and regulations, that it bears sole
responsibility for any violation of such laws and regulations, and that it will
indemnify, defend, and hold ACT and the University harmless (in accordance with
Section 8.1 of Article 8 hereof) 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, PPL agrees
that any LICENSED PRODUCTS used or sold in the United States will be
manufactured substantially in the United States or its territories.  Current law provides that if domestic manufacturer
is not commercially feasible under the circumstances, ACT and/or the University
may seek a waiver of this requirement from the relevant federal agency on
behalf of PPL and, upon PPL’S request, shall cooperate with PPL in seeking such
a waiver.

 

13.2         PPL shall not create or incur or cause to be
incurred or to exist any lien.

 

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13.9         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.

 

13.10       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.

 

13.11       This Agreement may not be
assigned by either party without the prior written consent of the other party,
except that either party may assign this Agreement to an affiliate or to a
successor in connection with a merger or consolidation, or the sale of all or
substantially all of its assets or that portion of its business to which this
Agreement relates; provided, however, that any assignment by PPL pursuant to
this Section 13.11 shall be subject to the consent of the University,
which consent shall be granted or denied at the sole discretion of the
University.

 

IN WITNESS
WHEREOF, the parties have duly executed this Agreement as of the EFFECTIVE DATE
set forth above.

 

	
  ADVANCED CELL TECHNOLOGY, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jose Cibelli

  	
   

  
	
  Printed Name:

  	
  Jose Cibelli

  	
   

  
	
  Title:

  	
  VP - RESEARCH

  	
   

  
	
   

  	
   

  
	
  PPL THERAPEUTICS (SCOTLAND) LIMITED

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Alan Colman

  	
   

  
	
  Printed Name:

  	
  ALAN COLMAN

  	
   

  
	
  Title:

  	
  RESEARCH DIRECTOR

  	
   

  
							

 

12

 

CONSENT AND AGREEMENT

 

For value received, the University hereby consents to the sublicense by
ACT to PPL of the UMASS PATENT RIGHTS in accordance with the terms of this
Agreement.

 

 

	
  THE UNIVERSITY OF MASSACHUSETTS

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Thomas Chmura

  	
   

  
	
  Printed Name:

  	
  Thomas Chmura

  	
   

  
	
  Title:

  	
  Vice President, Economic Development

  	
   

  
	
  Date:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Joseph F.X. McGuirl

  	
   

  
	
  Printed Name:

  	
  Joseph F.X. McGuirl

  	
   

  	
   

  
	
  Title:

  	
  Executive Director, Office

  	
   

  
	
   

  	
  of Commercial Ventures

  	
   

  
	
   

  	
  and Intellectual Property

  	
   

  
	
  Date:

  	
   

  	
   

  
								

 

13Exhibit
10.7

 

NONEXCLUSIVE LICENSE
AGREEMENT

 

This
Nonexclusive License Agreement (“Agreement”) is made and entered into this 1st
day of May, 2001 (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 Immerge BioTherapeutics,
Inc., a Delaware corporation with offices located at Building 75, Third Avenue,
Charlestown, MA 02129 (“LICENSEE”) (ACT and LICENSEE sometimes hereinafter referred
to as the “parties”).  As set forth
below, the University of Massachusetts, a public institution of higher
education of the Commonwealth of Massachusetts (the “University”), has agreed
to certain provisions of this Agreement.

 

WITNESSETH

 

WHEREAS, ACT
owns or has licensed with a sublicensable interest the PATENT RIGHTS (as
defined below); and

 

WHEREAS,
LICENSEE desires to obtain a nonexclusive license from ACT to the PATENT
RIGHTS; and

 

WHEREAS, ACT
is willing to grant such a license to LICENSEE; and

 

WHEREAS, the
parties have previously agreed, pursuant to a term sheet stylized as “Terms for
Nonexclusive License” dated December 23, 2000 (the “Term Sheet”), to the
principal terms of the license.

 

WHEREAS, the
parties agree to enter into a formal and definitive license upon the terms and
condition set forth below;

 

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                                 “LICENSEE”
shall mean Immerge BioTherapeutics, Inc, a Delaware corporation with offices
located at Building 75, Third Avenue, Charlestown, MA 02129.

 

1.2                                 “PATENT
RIGHTS” means the patents and patent applications identified on Exhibit A
attached hereto, all divisionals, continuations, and continuations-in-part that
derive from the identified patent applications (including from the patent
applications for the identified patents), foreign filings related to the
foregoing patents and patent applications, and any patents issuing on said
applications together with all reissues, reexaminations, extensions and
substitutions thereof.  The parties agree
that Exhibit A may from time to time be amended after

 

 

the Effective
Date to reflect changes thereto.

 

1.3                                 A “LICENSED PRODUCT”
shall mean any product or part thereof, the development, manufacture, sale or
use of which is covered by a VALID CLAIM of the PATENT RIGHTS in the country in
which any such product or part thereof is made, used or sold by LICENSEE or a
product or part thereof directly or indirectly derived from a founder swine,
the production or sale of such founder swine being covered by a VALID CLAIM of
the PATENT RIGHTS in the country in which any such founder swine is produced.

 

1.4                                 “NET SALES” shall mean
the amount billed or invoiced by LICENSEE or any third party that sells the
LICENSED PRODUCTS on behalf of LICENSEE for the sale of LICENSED PRODUCTS less:

 

(a)                                  discounts allowed;

 

(b)                                 sales tax, tariff
duties, use and other taxes directly imposed with reference to particular
sales;

 

(c)                                  amounts repaid or
credited by reason of rejection, return of goods, retroactive price reduction
or bad debt;

 

(d)                                 freight, postage and
insurance invoiced to customer;

 

(e)                                  third party rebates
to the extent actually allowed; and

 

(f)                                    liability incurred
resulting from any governmental (or agency thereof) mandated rebate program,
whether federal, state, municipal or local.

 

1.5                                 “FIELD OF USE” shall
mean the cloning of swine for the sole purpose of developing, producing and
selling swine-derived organs (but excluding cells (other than associated immune
cells required to induce tolerance of the organs) and tissues) for transplantation
of such organs in humans.

 

1.6                                 “AFFILIATED COMPANY”
or “AFFILIATED COMPANIES” means any corporation, company, partnership, joint
venture and/or firm that controls, is controlled by or is under common control
with one of the parties to this Agreement, as applicable.  For purposes of this definition, “control”
means (a) in the case of corporate entities, direct or indirect ownership of
more than fifty percent (50%) of the stock or shares entitled to vote for the
election of directors; and (b) in the case of non-corporate entities, direct or
indirect ownership of more than fifty percent (50%) of the equity interest with
the power to direct the management and policies of such noncorporate entities,
but in any country where the local law does not permit foreign equity participation
of at least fifty percent (50%), then an “Affiliated Company” includes any
company in which either party owns or controls or is owned or controlled by,
directly or indirectly, the maximum percentage of outstanding stock or voting
rights permitted by local law.

 

2

 

1.7                                 “VALID
CLAIM” means a claim of any unexpired United States or foreign patent or patent
application within the PATENT RIGHTS which shall not have been withdrawn, cancelled
or disclaimed, nor held invalid by a court of competent jurisdiction.

 

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

 

1.9                                 “UMASS PATENT RIGHTS”
means PATENT RIGHTS licensed by ACT from the University under the UMASS
LICENSE.

 

1.10                           “CONFIDENTIAL INFORMATION”
means confidential or proprietary information of ACT relating to the PATENT
RIGHTS and confidential or proprietary information of LICENSEE relating to the
PATENT RIGHTS, LICENSED PRODUCTS or LICENSED PROCESSES.  CONFIDENTIAL INFORMATION may be in written,
graphic, oral or physical form and may include scientific knowledge, know-how,
processes, inventions, techniques, formulae, products, business operations,
customer requirements, designs, sketches, photographs, drawings,
specifications, reports, studies, findings, data, plans or other records, biological
materials, and/or software.  CONFIDENTIAL
INFORMATION shall not include:

 

(a)                                  information which is
or later becomes, generally available to the public through no fault of the
recipient;

 

(b)                                 information which is
provided to the recipient by an independent third party having no obligation to
keep the information secret;

 

(c)                                  information which the
recipient can establish by written documentation was previously known to it; or

 

(d)                                 information which the
recipient can establish by written documentation was independently developed by
or on behalf of recipient by persons who have not received CONFIDENTIAL
INFORMATION.

 

The parties
mutually agree that the specific terms (but not the overall existence) of this
Agreement shall be considered CONFIDENTIAL INFORMATION and both parties shall
be subject to the provisions of Article 11 of this Agreement with respect
thereto.  Notwithstanding the foregoing,
the parties may disclose the terms of this Agreement to investors or potential
investors who are bound by terms of confidentiality and non-use at least as
stringent as those which ACT is bound by herein, and the parties may disclose
CONFIDENTIAL INFORMATION in accordance with Section 14.3 hereof.  The parties may also disclose CONFIDENTIAL
INFORMATION required to be disclosed to comply with applicable law or court
order, provided that the recipient gives prior written notice of the required
disclosure to the discloser.

 

3

 

ARTICLE 2
- LICENSE GRANT & RIGHTS OF FIRST NEGOTIATION

 

2.1                                 ACT
hereby grants to LICENSEE and LICENSEE accepts, subject to the terms and
conditions hereof, a worldwide, nonexclusive, royalty-bearing license in the
FIELD OF USE under the PATENT RIGHTS to develop, make, have made, use, sell and
have sold LICENSED PRODUCTS.  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.

 

2.2                                 The license “to have
made” and “to have sold” granted in Paragraph 2.1 means that LICENSEE may
contract with a third party or parties, or with any of its AFFILIATED COMPANIES,
to develop, manufacture or sell LICENSED PRODUCTS on behalf of LICENSEE.

 

2.3                                 Immediately upon
execution of this Agreement ACT shall provide LICENSEE with all information and
data relating to the PATENT RIGHTS as may be reasonably necessary to allow
LICENSEE to exploit the license granted hereunder.

 

2.4                                 To the extent the
University, the federal government or any other parties have rights in the
Patent Rights pursuant to Article 2 of the UMASS LICENSE, the License
granted hereunder is subject to such rights.

 

2.5                                 LICENSEE
acknowledges that a portion of the Patent Rights licensed to LICENSEE hereunder
is owned by the University and exclusively licensed to ACT under the UMASS
LICENSE.  LICENSEE acknowledges,
understands and agrees that in the event the UMASS LICENSE is terminated for
any reason pursuant to the provisions of the UMASS LICENSE, this Agreement
shall automatically be assigned to the University and LICENSEE will thereafter
make any payments due to ACT under this Agreement directly to the University.  Further, promptly following such termination,
LICENSEE and the University will enter into a direct license agreement
reflecting the applicable terms of this Agreement and the UMASS LICENSE.  ACT agrees to use commercially reasonable
efforts to maintain its rights to the UMASS PATENT RIGHTS, including (i)
complying with all material terms and obligations of the UMASS LICENSE and (ii)
diligently prosecuting the PATENT RIGHTS to the extent that ACT has control
over such prosecution.

 

2.6                                 ACT hereby grants to
LICENSEE a right of first negotiation to acquire a non-exclusive license to any
future patents owned by or licensed to ACT that are necessary to produce LICENSED
PRODUCTS in the FIELD OF USE.  In the
event ACT acquires any such patents, ACT shall notify LICENSEE in writing of
its acquisition of such patent rights.  LICENSEE
shall then have a period of thirty (30) days to notify ACT in writing of its
desire to acquire a non-exclusive license to use such patent rights to develop,
manufacture, use and sell LICENSED PRODUCTS in the FIELD OF USE.  If LICENSEE so notifies ACT, then LICENSEE and
ACT shall negotiate in good faith for not more than sixty (60) days to reach
agreement on the terms of such license.  If,
by the end of such sixty (60) day period LICENSEE and ACT have not reached agreement,
ACT shall be free to enter into non-exclusive licenses with third parties with
respect to such patent rights for the FIELD OF USE, provided that if ACT enters
into such a non-exclusive

 

4

 

license with a third party, ACT agrees that
it will offer LICENSEE a similar non-exclusive license with financial terms no
less favorable to LICENSEE than those set forth in the agreement entered into
between ACT and such other third party.

 

2.7                                 ACT
hereby grants to LICENSEE a right of first negotiation to acquire a non-exclusive
or exclusive license under the PATENT RIGHTS to develop, manufacture, use and
sell products in the field of the cloning of swine for the sole purposes of
developing, producing and selling swine-derived tissues or cells for
transplantation of such tissues or cells in humans as follows: ACT shall notify
LICENSEE in writing of its intention to enter into negotiations for such a
license with a third party.  LICENSEE
shall then have a period of thirty (30) days to notify ACT in writing of its
willingness to enter into such a non-exclusive or exclusive license.  If LICENSEE so notifies ACT, then LICENSEE and
ACT shall negotiate in good faith for not more than sixty (60) days to reach
agreement on the terms of the license.  If,
by the end of such sixty (60) day period, LICENSEE and ACT have not reached
agreement, (1) ACT shall be free to enter such an exclusive license with a
third party but only on terms more favorable to ACT than those terms firmly
offered by LICENSEE, and (2) ACT shall be free to enter into such non-exclusive
licenses with third parties, provided that if ACT enters into such a non-exclusive
license with a third party, ACT agrees that it will offer LICENSEE a similar
non-exclusive license with financial terms no worse than those set forth in the
agreement entered into between ACT and such other third party.

 

ARTICLE 3
- DUE DILIGENCE

 

3.1                                 LICENSEE shall use its
commercially reasonable and diligent efforts to bring one or more LICENSED
PRODUCTS to market.

 

3.2                                 LICENSEE shall
maintain complete and accurate records of LICENSED PRODUCTS that are developed,
made, used or sold by or on behalf of LICENSEE under this Agreement.  Not later than May 1st of each year
following the Effective Date, LICENSEE shall furnish ACT with a summary report
on the progress of its efforts during the prior year to develop and
commercialize LICENSED PRODUCTS, including without limitation research and development
efforts, efforts to obtain regulatory approval, marketing efforts (including LICENSED
PRODUCTS developed, made, used or sold) and sales figures, provided that such reports
shall be deemed CONFIDENTIAL INFORMATION of LICENSEE subject to the provisions
of Article 11 of this Agreement.

 

ARTICLE 4
- CONSIDERATION

 

4.1                                 Initial
Payment. LICENSEE shall pay to ACT an initial License Fee of FIVE HUNDRED
THOUSAND DOLLARS ($500,000), due and payable as follows: (1) To the extent not
previously paid to ACT in accordance with the terms of the Term Sheet LICENSEE
shall pay to ACT $250,000 on the EFFECTIVE DATE of this Agreement; and (2)
LICENSEE shall pay to ACT $250,000 on or before the first anniversary of the
Effective Date, provided that if the NIST grant described in Exhibit B attached
hereto (the “NIST Grant”) has not been awarded to LICENSEE or its Affiliated
Companies or assignees on or before the first anniversary of the

 

5

 

EFFECTIVE DATE
LICENSEE shall thereafter pay to ACT said $250,000 within thirty (30) days of
the award of the NIST Grant to LICENSEE or its AFFILIATED COMPANIES or
assignee, and provided further that if the NIST Grant is not awarded to
LICENSEE or its AFFILIATED COMPANIES or assignee, said second $250,000 fee will
not be due.  LICENSEE’s obligation to pay
the $250,000 fee required under clause (2) of the preceding sentence shall
survive the termination of this Agreement, unless the Agreement is terminated
due to the material breach or default of the Agreement by ACT.

 

The License
Fee is not refundable and is not creditable against other payments due to ACT
under this Agreement.

 

4.2                                 Royalties.

 

(a)                                  In partial
consideration of the license granted to LICENSEE from ACT in Article 2 of
this Agreement, LICENSEE shall pay to ACT an earned royalty equal to 3% of the
NET SALES of all LICENSED PRODUCTS sold by or on behalf of LICENSEE; provided,
however, that in the event that LICENSEE is legally required to make royalty
payments to one or more third parties (other than AFFILIATED COMPANIES) in
order to make, use or sell LICENSED PRODUCTS, LICENSEE’s royalty payment shall
be decreased by one-half of one percent (0.5%) for each one percent (1%) of
actual royalty payments made to third parties under such required licenses;
provided, however, that in no event shall such royalty payment be reduced below
1%.

 

(b)                                 No multiple royalties
shall be payable because any LICENSED PRODUCT, its development, manufacture,
use or sale 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 on sales of LICENSED PRODUCTS, the development,
manufacture, use or sale of which is 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 which the LICENSED PRODUCT or LICENSED PROCESS is
manufactured, sold or performed.

 

4.3                                 Except as otherwise
allowed under this Agreement, 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 ACT shall pay all income
taxes and taxes in lieu of income taxes attributable to ACT on account of the
payments made by LICENSEE to ACT hereunder.

 

4.4                                 All payments due
hereunder shall be paid in United States dollars.  If any currency conversion shall be required
in connection with the payment of royalties hereunder, such conversion shall be
made pursuant to the method for currency conversion generally practiced by 

 

6

 

LICENSEE in the conduct of its regular business operations.

 

4.5                                 LICENSEE shall pay ACT
interest on any overdue amounts at the rate of four percent (4%) per annum from
the date when such payment should have been made pursuant to Paragraph 4.1, 4.2
or 5.3, as applicable.

 

4.6                                 If LICENSEE fails to
timely make any payments to ACT as provided in this Agreement, such failure
shall constitute a material breach of LICENSEE’s obligations under this Agreement,
and ACT shall have the right to terminate this Agreement in accordance with Article 10.

 

ARTICLE 5
- REPORTS AND RECORDS

 

5.1                                 LICENSEE shall keep
full, complete, true and accurate books of account containing all particulars
relating to the manufacture and sales with respect to LICENSED PRODUCTS, and
any allowed credits, which may be necessary to ascertain and verify the royalties
payable to ACT.  Said books and accounts
shall be kept at LICENSEE’s principal place of business.  At the request of ACT, but not more than once
in each calendar year and provided ACT provides LICENSEE with at least ten (10)
days prior written notice, LICENSEE shall permit an independent certified
public accountant, selected by ACT, to have access, during regular business
hours of LICENSEE, to such records to determine, for any calendar quarter commencing
not more than two years prior to the date of such request, the completeness and
accuracy of such books and records, and the accuracy of reports submitted to
ACT and/or payments made to ACT.  If any
such inspection discloses an error in any royalty payment, LICENSEE shall pay
to ACT, within thirty (30) days of the discovery of the error, (a) all deficiencies
in royalty payments, (b) interest on such deficiencies from the date such
royalty payment was due until the date paid at the rate equal to one and
one-half percent (11⁄2%) per month, and (c) if such error is in excess of ten
percent (10%) of any royalty payment, the cost of the audit.  In all other cases, the costs of the audit
shall be paid for by ACT.  All
information disclosed pursuant to an audit shall be treated as CONFIDENTIAL
INFORMATION of LICENSEE and shall not be disclosed to any third party or used
for any purpose other than to determine the correctness of the payment.

 

5.2                                 After the first
commercial sale of a LICENSED PRODUCT, 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 or on behalf of LICENSEE during the
preceding three-month period under this Agreement as shall be pertinent to a
royalty accounting hereunder.  Without
limiting the generality of the foregoing, these reports shall include at least
the following:

 

(a)                                  number of LICENSED
PRODUCTS manufactured and sold by or on behalf of LICENSEE;

 

(b)                                 total billings for
LICENSED PRODUCTS sold by or on behalf of LICENSEE;

 

7

 

(c)                                  deductions applicable
as provided in Paragraph 1.4; and

 

(d)                                 the names and
addresses of all parties making or selling LICENSED PRODUCTS on behalf of
LICENSEE.

 

5.3                                 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.

 

ARTICLE 6
- MOST FAVORED LICENSOR

 

If LICENSEE
shall hereafter enter into any license or other agreement with Infigen, Inc. (“Infigen”)
or any corporation, company, partnership, joint venture and/or firm that
controls, is controlled by or is under common control with Infigen (“INFIGEN
AFFILIATED COMPANIES”) (where “control” shall have the meaning set forth in Section 1.6)
that grants LICENSEE rights under the current patents or proprietary technology
of Infigen or any INFIGEN AFFILIATED COMPANIES that is directed to nuclear
transfer to manufacture or sell organs derived from nuclear transfer produced
swine for transplantation in humans on terms that are more favorable on the
whole to Infigen or any INFIGEN AFFILIATED COMPANIES than the terms set forth
in this Agreement, then LICENSEE will (a) promptly notify ACT of such license,
and (b) extend to ACT the terms of the noticed license, effective as of the
date (or dates) on which they became effective in respect to the noticed
license.  Such extension of the terms of
the noticed license shall be effective, however, only if ACT shall, within
sixty (60) days of receipt of such notice, advise LICENSEE that it accepts all
terms of the noticed license.

 

ARTICLE 7
- PATENT PROSECUTION

 

ACT shall be
solely responsible for the continued prosecution of pending patent applications
included in the PATENT RIGHTS and the issuance of such applications included in
the PATENT RIGHTS after allowance.  The
prosecution, filing and maintenance of all patents and applications included in
the PATENT RIGHTS shall be the primary responsibility of ACT. Additionally, ACT
shall pay all government fees in any given country required to maintain the
PATENT RIGHTS; and shall submit evidence to LICENSEE upon request that such
fees have been timely paid.  ACT agrees
to keep LICENSEE informed on a regular basis of the status of the PATENT
RIGHTS.

 

ARTICLE 8
- 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.  ACT shall have the sole responsibility to
prosecute or defend such claims, as applicable.  LICENSEE shall if requested provide reasonable
assistance to ACT, at ACT’s expense, in connection with the prosecution or
defense of such claims; provided, however, that nothing contained herein shall
require LICENSEE to disclose to or otherwise provide ACT with copies of
documents or other written information obtained from a third party

 

8

 

under a
confidentiality obligation, unless such disclosure would be responsive to a
discovery request by ACT to LICENSEE made in connection with a dispute.

 

ARTICLE 9
- INDEMNIFICATION,

LIMITATION OF LIABILITY AND INSURANCE

 

9.1                                 LICENSEE shall at all
times during the term of this Agreement and thereafter, indemnify, defend and
hold harmless ACT and the University and their trustees, directors, officers,
employees and Affiliated Companies (individually an “indemnified party” or collectively
the “indemnified parties”) against all third party liabilities of any kind
whatsoever, including legal expenses and reasonable attorneys’ fees, arising
out of the death of or injury to any person or persons or out of any damage to
property resulting from the development, manufacture, sale, use, consumption or
advertisement of the LICENSED PRODUCT(s) or arising from any obligation, act or
omission, or from a breach of any representation or warranty of LICENSEE hereunder,
excepting only claims that the use of the PATENT RIGHTS infringe third party
intellectual property, claims to the extent resulting from any breach by ACT of
this Agreement, or claims to the extent resulting from the negligence or
willful misconduct of ACT or its trustees, directors, officers or employees.  Any indemnification obligations set forth in
this Agreement shall be subject to the following conditions: (i) the
indemnified party shall notify the indemnifying party in writing promptly upon
learning of any claim or suit for which indemnification is sought; (ii) the
indemnifying party shall have control of the defense or settlement, provided
that the indemnified party shall have the right (but not the obligation) to
participate in such defense or settlement with counsel at its selection and at
its sole expense; and (iii) the indemnified party shall reasonably cooperate
with the defense, at the indemnifying party’s expense.

 

9.2                                 EXCEPT AS OTHERWISE
EXPRESSLY SET FORTH IN THIS AGREEMENT, ACT, ITS TRUSTEES, 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
CLAIMS, 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 ACT
THAT THE PRACTICE BY LICENSEE OF THE LICENSE GRANTED HEREUNDER SHALL NOT
INFRINGE THE PATENT RIGHTS OF ANY THIRD PARTY.  IN NO EVENT SHALL EITHER PARTY, ITS TRUSTEES,
DIRECTORS, OFFICERS, EMPLOYEES AND AFFILIATES BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL
DAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGE OR INJURY TO PROPERTY AND LOST
PROFITS, REGARDLESS OF WHETHER SUCH PARTY SHALL BE ADVISED, SHALL HAVE OTHER
REASON TO KNOW, OR IN FACT SHALL KNOW OF THE POSSIBILITY UNLESS DUE TO THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH PARTY.

 

9

 

9.3                                 LICENSEE
agrees to maintain insurance or self-insurance that is reasonably adequate to
fulfill any potential obligation to the indemnified parties, but not less than
One Million Dollars ($1,000,000) for injuries to any one person arising out of
a single occurrence and One Million Dollars ($1,000,000) for injuries to all
persons arising out of a single occurrence.  Before the beginning of any clinical trials
using LICENSED PRODUCTS, LICENSEE shall increase insurance coverage for
injuries to all persons arising out of a single occurrence to at least Five
Million Dollars ($5,000,000).  LICENSEE
shall provide ACT, upon request, with written evidence of insurance or
self-insurance.  LICENSEE shall continue
to maintain such insurance or self-insurance during the term of this Agreement
and after the expiration or termination of this Agreement for a period of five
(5) years.

 

ARTICLE 10
- TERMINATION

 

10.1                           This Agreement is effective
when signed by all parties and shall extend until the expiration of the last to
expire patent issued under PATENT RIGHTS, unless sooner terminated as provided
in this Article 10.

 

10.2                           Upon any material breach or
default of this Agreement by LICENSEE (including, but not limited to, breach or
default under Article 4), ACT shall have the right to terminate this Agreement
and the rights, privileges and license granted hereunder effective on sixty
(60) days’ notice to LICENSEE.  Such
termination shall become automatically effective unless LICENSEE shall have cured
any such material breach or default prior to the expiration of the sixty (60)
day period.

 

10.3                           Upon any material breach or
default of this Agreement by ACT, LICENSEE shall have the right to terminate
this Agreement and the rights granted hereunder effective on sixty (60) days’
notice to ACT.  Such termination shall
become automatically effective unless ACT shall have cured any such material
breach or default prior to the expiration of the sixty (60) day period.

 

10.4                           LICENSEE shall have the
right to terminate this Agreement at any time for any reason on sixty (60) days’
prior written notice to ACT; provided, however, that in the event LICENSEE so
terminates this Agreement, LICENSEE shall, despite such termination pay to ACT
the fee set forth in clause (2) of Paragraph 4.1 of Article 4 in
accordance with the terms set forth in said Paragraph 4.1.

 

10.5                           Upon termination of this
Agreement for any reason, nothing herein shall be construed to release either
party from any obligation that matured prior to the effective date of such
termination; and Articles 1, 5, 9, 10.4, 10.5, 11, 13 and 14 shall survive any
such termination; provided, however, that no such termination shall modify or
impair LICENSEE’s obligation to pay royalties for LICENSED PRODUCTS sold prior
to such termination.

 

ARTICLE 11
- CONFIDENTIALITY

 

During the course of this Agreement, ACT and
LICENSEE may provide each other with

 

10

 

CONFIDENTIAL INFORMATION.  All CONFIDENTIAL INFORMATION shall be designated
in writing as such by the discloser at the time of disclosure or, if disclosed
orally, shall be designated in writing as CONFIDENTIAL INFORMATION within
thirty (30) days after such oral disclosure.  ACT and LICENSEE each intend to maintain the
confidential or trade secret status of their CONFIDENTIAL INFORMATION.  Each shall exercise reasonable care to protect
the CONFIDENTIAL INFORMATION of the other from disclosure to third parties; no
such disclosure shall be made without the other’s written permission.  Upon termination or expiration of this
Agreement, ACT and/or LICENSEE shall comply with the other’s written request to
return all CONFIDENTIAL INFORMATION.  Except
as expressly provided herein, neither ACT nor LICENSEE is granted any license
to use the other’s CONFIDENTIAL INFORMATION.  The obligations of ACT and LICENSEE under this
Article 11 shall survive any expiration or termination of this Agreement.

 

ARTICLE 12 - 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, return receipt requested, postage
prepaid, or by nationally recognized overnight carrier addressed to the parties
at the following addresses or such other addresses as such party furnishes to
the other party in accordance with this paragraph.  Such notices, payments or other communications
shall be effective upon receipt.

 

In the case of
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:

 

Immerge
BioTherapeutics, Inc.      

Building 75

Third Avenue

Charlestown,
MA 02129

Attention:
Julia Greenstein, Ph.D.

 

With a copy
to:                                     Hale
& Dorr, L.L.P.

60 State
Street

Boston, MA

Attention:
Steven Singer, Esq.

 

11

 

ARTICLE 13
- REPRESENTATIONS AND WARRANTIES

 

13.1                           ACT represents and warrants
that it owns or has licensed with a sublicensable interest the PATENT RIGHTS,
that it has the full legal right and power to grant the licenses granted
hereunder, that this Agreement constitutes the binding legal obligation of ACT,
enforceable in accordance with its terms and that the execution and performance
of this Agreement by ACT will not violate, contravene or conflict with any
other agreement to which ACT is a party or by which it is bound or with any
law, rule or regulation applicable to ACT.

 

13.2                           LICENSEE represents and
warrants that it and its AFFILIATED COMPANIES have not entered into any license
or other agreement with Infigen or any INFIGEN AFFILIATED COMPANIES, and will
not, during the term of this Agreement enter into any license or other agreement
with Infigen or any INFIGEN AFFILIATED COMPANIES that grants LICENSEE rights
under the current patent or proprietary technology of Infigen directed to
nuclear transfer to manufacture or sell organs derived from nuclear transfer
produced swine for transplantation in humans on terms that are more favorable
on the whole to Infigen or any INFIGEN AFFILIATED COMPANIES than the terms set
forth in this Agreement.  LICENSEE
further represents and warrants that it has full corporate power and authority
to enter into this Agreement, that this Agreement constitutes the binding legal
obligation of LICENSEE and that execution and performance of this Agreement by
LICENSEE will not violate, contravene or conflict with any other agreement to
which LICENSEE is a party or by which it is bound or with any law, rule or regulation
applicable to LICENSEE.

 

ARTICLE 14
- MISCELLANEOUS PROVISIONS

 

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

 

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

 

(b)                                 LICENSEE shall use
diligent efforts to comply with all United States laws and regulations
controlling the export of certain commodities and technical data, including
without limitation all Export Administration Regulations of the United States
Department of Commerce.  Among other
things, these laws and regulations prohibit, or require a license for, the
export of certain types of commodities and technical data to specified
countries.  LICENSEE agrees that it will
bear sole responsibility for any violation of such laws and regulations, and it
will indemnify, defend, and hold ACT harmless (in accordance with Paragraph 9.1
of Article 9 hereof) for the consequences of any such violation.

 

(c)                                  To the extent that
any invention claimed in the PATENT RIGHTS has

 

12

 

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 domestic
manufacturer is not commercially feasible under the circumstances, ACT and/or
the University may seek a waiver of this requirement from the relevant federal
agency on behalf of LICENSEE and, upon LICENSEE’S request, shall cooperate with
LICENSEE in seeking such a waiver.

 

14.2                           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
without the prior written consent of ACT and the University.

 

14.3                       Either party may originate
publicity, news releases or other public announcements, written or oral (“Announcements”),
relating to the existence, but not the financial and monetary terms, of this
Agreement, without the prior written approval of the other party, provided that
such party shall have given the other party at least ten (10) days prior
written notice of the proposed text of the Announcement for the purpose of
giving the other party the opportunity to comment on the text of such
Announcement, such comments to be reasonably incorporated and provided further
that such Announcements will be prepared in a manner consistent with the
highest standards of professionalism.  Any
references to the University in Announcements shall be subject to the approval
of the University, which approval shall not be unreasonably withheld.  The foregoing notwithstanding, the parties
shall have the right to make Announcements (including Announcements including
reference to the financial and monetary terms of this Agreement) 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.

 

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

 

14.5                           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.

 

14.6                           To the extent commercially
feasible, and consistent with prevailing business practices, all LICENSED
PRODUCTS manufactured or sold under this Agreement will be marked with the
number of each issued patent included in the PATENT RIGHTS that applies to

 

13

 

such product.

 

14.7                           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 shall be determined by the law of the country in which the
patent was granted.

 

14.8                           The parties hereto
acknowledge that this Agreement supersedes the Term Sheet (and any and all
other prior oral or written agreements, understandings, or expressions with respect
to the subject matter hereof) and 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 subscribed to by the parties hereto.

 

14.9                           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.

 

14.10                     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.

 

14.11                     This Agreement may not be assigned
by either party without the prior written consent of the other party and the
University, which consent shall not be unreasonably withheld or delayed.

 

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

 

	
  ADVANCED CELL TECHNOLOGY, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/ Michael D. West

  	
   

  	
   

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

  	
   

  
	
  Its: President & CEO

  	
   

  
	
   

  	
   

  
	
  IMMERGE BIOTHERAPEUTICS, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/ Julia L. Greenstein

  	
   

  	
   

  
	
  Printed Name: Julia L. Greenstein, Ph.D.

  	
   

  
	
  Its: President & CEO

  	
   

  

 

14

 

CONSENT AND AGREEMENT

 

For value received, the
University hereby consents to the sublicense by ACT to LICENSEE of the UMASS
PATENT RIGHTS as set forth under this Agreement.

 

	
  THE UNIVERSITY OF MASSACHUSETTS

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Thomas Chmura

  	
   

  	
   

  
	
  Printed Name:

  	
    Thomas Chmura

  	
   

  	
   

  
	
  Its:

  	
    Vice President, Economic Development

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  BY:

  	
  /s/ Joseph F. X. McGuirl

  	
   

  	
   

  
	
  Printed Name: 

  	
  Joseph F. X. McGuirl

  	
   

  	
   

  
	
  Title: 

  	
  Executive Director, Office

  	
   

  	
   

  
	
   

  	
  of Commerical Ventures

  	
   

  	
   

  
	
   

  	
  and Intellectual Property

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
										

 

15

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