EXCLUSIVE LICENSE AGREEMENT (ACT IP)

Exhibit 10.13

EXCLUSIVE LICENSE AGREEMENT (ACT IP)

This Exclusive License Agreement ("Agreement") is made and entered into this 14 ^th 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:

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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 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.

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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:

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

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

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

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ARTICLE 3 — LICENSEE OBLIGATIONS
RELATING TO COMMERCIALIZATION

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

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

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

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

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ARTICLE 4 — CONSIDERATION

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

4.2 Royalties .

(i) 6% on therapeutics,
(ii) 3% on diagnostics, and
(iii) 10% on commercial research use.

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:

At 12 months, $10,000
At 24 months, $25,000
At 36 months, $40,000
Annually thereafter, $50,000.

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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 FIELD, then LICENSEE shall have the right to pro-rate such Milestone Payments against the

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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:

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

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

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

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

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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 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.

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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.

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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 d