ex10128.htm


    Exhibit
10.128

     

    NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.

     

     

    Advanced Cell Technology, Inc.

     

    Warrant
To Purchase Common Stock

     

    
      	
              Warrant 
      No.: 2009-1

            	
                                                                                                      
      Issuance Date:  November 2,
2009

            


    

    


    Number of
Warrant Shares: 119,469,027

    


    Initial
Exercise Price:  $0.113 per share

    


    Advanced Cell Technology, Inc., a Delaware corporation (“Company”), hereby
certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Optimus CG II, Ltd., a Cayman Islands exempted
company, the holder hereof, or its designees or assigns (“Holder”), is
entitled, subject to the terms set forth below, to purchase from the Company, at
the Exercise Price (as defined below) then in effect, upon surrender of this
Warrant to Purchase Common Stock (including any Warrants to Purchase Common
Stock issued in exchange, transfer or replacement hereof, the “Warrant”), at any
time or times after issuance and until 11:59 p.m. Eastern time on the fifth
anniversary of the Issuance Date subject to acceleration pursuant to Section 3.2 hereof,
that number of duly authorized, validly issued, fully paid and non-assessable
shares of Common Stock set forth above and as adjusted herein (the “Warrant
Shares”).  This Warrant may only be exercised for that number
of shares of Common Stock equal to 135% of the cumulative amount of Tranche
Purchase Prices under Tranche Exercise Notices delivered prior to the date of
exercise.  Except as otherwise defined herein, capitalized terms in
this Warrant shall have the meanings set forth in ARTICLE 13
hereof.

     

    
      
         

      

      
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    ARTICLE 1

    EXERCISE OF
WARRANT.

     

    1.1 Mechanics
of Exercise.

     

    1.1.1 Subject
to the terms and conditions hereof, this Warrant may be exercised by the Holder
on any day on or after the Issuance Date, in whole or in part, by (i) delivery
of a written notice to the Company, in the form attached hereto as Appendix 1 (the
“Exercise
Notice”), of the Holder’s election to exercise this Warrant, and (ii)
payment to the Company of an amount equal to the applicable Exercise Price
multiplied by the number of Warrant Shares as to which this Warrant is being
exercised (the “Aggregate Exercise
Price”), with such payment made, at Investor’s option, (x) in cash or by
wire transfer of immediately available funds, (y) by the issuance and delivery
of a recourse promissory note substantially in the form attached hereto as Appendix 2 (each, a
“Recourse
Note”), or (z) if applicable, by cashless exercise pursuant to Section
1.3.

     

    1.1.2 The
Holder shall not be required to deliver the original Warrant in order to effect
an exercise hereunder.  Execution and delivery of the Exercise Notice
with respect to less than all of the Warrant Shares shall have the same effect
as cancellation of the original Warrant and issuance of a new Warrant evidencing
the right to purchase the remaining number of Warrant Shares.

     

    1.1.3 On the
Trading Day on which the Company has received each of the Exercise Notice and
the Aggregate Exercise Price (the “Exercise Delivery
Documents”) from the Holder by 6:30 p.m. Eastern time, or on the next
Trading Day if the Exercise Delivery Documents are received after 6:30 p.m.
Eastern time or on a non-Trading Day (the “Share Delivery
Date”), the Company shall transmit by facsimile an acknowledgment of
confirmation of receipt of the Exercise Delivery Documents to the Holder and an
electronic copy of its share issuance instructions to the Holder and to the
Company’s transfer agent (the “Transfer Agent”),
with such electronic transmissions to comply with the notice provisions
contained in Section
6.2 of the Purchase Agreement, and shall instruct and authorize the
Transfer Agent to credit such aggregate number of freely-tradable Warrant Shares
to which the Holder is entitled pursuant to such exercise to the Holder’s or its
designee’s balance account with The Depository Trust Company (DTC) through the
Fast Automated Securities Transfer (FAST) Program through its Deposit Withdrawal
Agent Commission (DWAC) system, with such credit to occur no later than 12:00
p.m. Eastern Time on third Trading Day following the Share Delivery Date, time
being of the essence; provided, however, that if the
Warrant Shares are not credited as DWAC Shares by 12:00 p.m. Eastern Time on the
Trading Day following the Share Delivery Date, then the Tranche Closing Date
applicable to the Exercise Notice shall be extended by one Trading Day for each
Trading Day that credit of DWAC Shares is not made.

     

    1.1.4 Upon
delivery of the Exercise Delivery Documents, the Holder shall be deemed for all
corporate purposes to have become the holder of record of the Warrant Shares
with respect to which this Warrant has been exercised, irrespective of the date
such Warrant Shares are credited to the Holder’s DTC account.  Any
Warrant delivered in connection with a Tranche Notice and exercised by Holder
shall be deemed exercised (i) on the Tranche Notice Date, if exercised by 6:30
p.m. Eastern time on the Tranche Notice Date, or (ii) on the next Trading Day,
to the extent exercised by Investor after 6:30 p.m. Eastern Time on the Tranche
Notice Date or on any other date, in each case with Holder deemed to be a holder
of record as of such date.

     

    
      
         

      

      
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    1.1.5 If this
Warrant is submitted in connection with any exercise pursuant to this Section 1.1 and the
number of Warrant Shares represented by this Warrant submitted for exercise is
greater than the number of Warrant Shares being acquired upon an exercise, then
the Company shall as soon as practicable and in no event later than three
Business Days after any exercise and at its own expense issue a new Warrant (in
accordance with Section 6.4)
representing the right to purchase the number of Warrant Shares purchasable
immediately prior to such exercise under this Warrant, less the number of
Warrant Shares with respect to which this Warrant is exercised.  No
fractional shares of Common Stock are to be issued upon the exercise of this
Warrant, but rather the number of shares of Common Stock to be issued shall be
rounded up to the nearest whole number.  The Company shall pay any and
all taxes which may be payable with respect to the issuance and delivery of
Warrant Shares upon exercise of this Warrant.

     

    1.2 Adjustments
to Exercise Price and Number of Shares.  In addition to other
adjustments specified herein, the Exercise Price of this Warrant and the number
of shares of Common Stock issuable upon exercise shall be adjusted as
follows:

     

    1.2.1 Exercise
Price.  The “Exercise Price” per share of Common Stock
underlying this Warrant, subject to further adjustment as provided herein, shall
be as follows:

     

    (i) with
respect to the portion of this Warrant issued on the Effective Date, the amount
per Warrant Share set forth on the face of this Warrant, which is equal to
Closing Bid Price for the Common Stock on the Trading Day prior to the Effective
Date, and (ii) with respect to the portion of this Warrant issued on any Tranche
Notice Date including the first Tranche Notice Date, an amount per Warrant Share
equal to the Closing Bid Price of a share of Common Stock on such Tranche Notice
Date.

     

    1.2.2 Number of
Shares.  The number of shares of Common Stock underlying this
Warrant, subject to further adjustment as provided herein, shall be as follows:
(i) with respect to the portion of this Warrant issued on the Effective Date,
the number of shares set forth on the face of this Warrant, which is that number
of shares of Common Stock equal to the Maximum Placement multiplied by 135%,
with the resulting sum divided by the Closing Bid Price of a share of Common
Stock on the Trading Day prior to the Effective Date, and (ii) with respect to
the portion of this Warrant issued on any Tranche Notice Date including the
first Tranche Notice Date, a number of shares equal to the Tranche Purchase
Price multiplied by 135%, with the resulting sum divided by the Closing Bid
Price of a share of Common Stock on the Tranche Notice Date.  For
example, if the Tranche Purchase Price is $1,000,000 and the Closing Bid Price
is $0.50, then the number of shares of Common Stock underlying the portion of
the Warrant issued in connection with such Tranche shall be $1,000,000 x 135% =
$1,350,000 divided by $0.50 = 2,700,000 shares of Common Stock.  On
each Tranche Notice Date, that number of shares of Common Stock issuable upon
exercise of the portion of the Warrant issued in connection with such Tranche
shall vest and become exercisable, and the aggregate number of shares of Common
Stock underlying this Warrant shall automatically adjust up or down to account
for the change in the number of shares of Common Stock issuable in that Tranche
and for any shares issued upon any prior or simultaneous exercise of the
Warrant.

     

    
      
         

      

      
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    1.3 Cashless
Exercise.  Notwithstanding anything contained herein to the
contrary, if at any time there is not a current, valid and effective
registration statement covering the Warrant Shares that are the subject of the
Exercise Notice (the “Unavailable Warrant
Shares”), the Holder may, in its sole discretion, exercise this Warrant
in whole or in part and, in lieu of making the cash payment otherwise
contemplated to be made to the Company upon such exercise in payment of the
Aggregate Exercise Price, elect instead to receive upon such exercise the “Net Number” of shares
of Common Stock determined according to the following formula (a “Cashless
Exercise”):

     

    Net
Number =         (B-C) x
A

            B

    


    For
purposes of the foregoing formula:

    


    A = the
total number of shares with respect to which this Warrant is then being
exercised.

    


    B = the
average of the Closing Sale Prices of the shares of Common Stock (as reported by
Bloomberg) for the five (5) consecutive Trading Days ending on the date
immediately preceding the date of the Exercise Notice.

    


    C = the
Exercise Price then in effect for the applicable Warrant Shares at the time of
such exercise.

     

    1.4 Company’s
Failure to Timely Deliver Securities.  If the Company
shall fail for any reason or for no reason to credit, by 12:00 p.m. Eastern
time, to the Holder’s balance account with DTC on the Trading Day of receipt of
the Exercise Delivery Documents (i.e. the Tranche Notice Date) the number of
shares of Common Stock to which the Holder is entitled upon the Holder’s
exercise of this Warrant, then, in addition to all other remedies available to
the Holder, the Company shall pay in cash to the Holder on each day after such
Trading Day that the issuance of such shares of Common Stock is not timely
effected an amount equal to 1.5% of the product of (A) the sum of the number of
shares of Common Stock not issued to the Holder on a timely basis and to which
the Holder is entitled and (B) the Closing Sale Price of the shares of Common
Stock on the Trading Day immediately preceding the last possible date which the
Company could have issued such shares of Common Stock to the Holder without
violating Section
1.1; provided, however, that solely
for purposes of this Section 1.4, the
Tranche Notice Date shall be deemed to be the Trading Day upon which Holder
receives, as DWAC Shares, such shares of Common Stock to which the Holder is
entitled upon the Holder’s exercise of this Warrant.  In addition to
the foregoing, if on the Trading Day of the Company’s receipt of the facsimile
copy of an Exercise Notice the Company shall fail to credit the Holder’s balance
account with DTC for the number of shares of Common Stock to which the Holder is
entitled upon the Holder’s exercise hereunder, and if after such Trading Day the
Holder purchases (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by the Holder of shares of Common
Stock issuable upon such exercise that the Holder anticipated receiving from the
Company, then the Company shall, within one Trading Day after the Holder’s
request and in the Holder’s discretion, either (i) pay cash to the Holder in an
amount equal to the Holder’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at
which point the Company’s obligation to credit such Holder’s balance account
with DTC for the number of Warrant Shares to which the Holder is entitled upon
the Holder’s exercise hereunder and to issue such Warrant Shares shall
terminate, or (ii) promptly honor its obligation to credit such Holder’s balance
account with DTC for the number of Warrant Shares to which the Holder is
entitled upon the Holder’s exercise hereunder and pay cash to the Holder in an
amount equal to the excess (if any) of the Buy-In Price over the product of (A)
such number of shares of Common Stock sold by Holder in satisfaction of its
obligations, times (B) the Closing Bid Price on the date of
exercise.

     

    
      
         

      

      
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    1.5 Exercise
Limitation.  Notwithstanding
any other provision, at no time may the Holder (a) exercise this Warrant such
that the number of Warrant Shares to be received pursuant to such exercise
exceeds 135.0% of the aggregate of all Tranche Purchase Prices under and in
connection with all Tranche Exercise Notices delivered pursuant to the Purchase
Agreement prior to the date of exercise; or (b) exercise this Warrant such that
the number of Warrant Shares to be received pursuant to such exercise,
aggregated with all other shares of Common Stock then owned by the Holder
beneficially or deemed beneficially owned by the Holder, would result in the
Holder owning more than 4.99% of all of such Common Stock as would be
outstanding on the date of exercise, as determined in accordance with Section
13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
 In addition, as of any date, the aggregate number of shares of Common
Stock into which this Warrant is exercisable within 61 days, together with all
other shares of Common Stock then beneficially owned (as such term is defined in
Rule 13(d) under the Exchange Act) by Holder and its affiliates, shall not
exceed 9.99% of the total outstanding shares of Common Stock as of such
date.

     

    1.6 Activity
Restrictions.  For so long as
Holder or any of its affiliates holds this Warrant or any Warrant Shares,
neither Holder nor any affiliate will:  (i) vote any shares of Common
Stock owned or controlled by it, solicit any proxies, or seek to advise or
influence any Person with respect to any voting securities of the Company; (ii)
engage or participate in any actions, plans or proposals which relate to or
would result in (a) acquiring additional securities of the Company, alone or
together with any other Person, which would result in beneficially owning or
controlling more than 9.99% of the total outstanding Common Stock or other
voting securities of the Company, (b) an extraordinary corporate transaction,
such as a merger, reorganization or liquidation, involving Company or any of its
subsidiaries, (c) a sale or transfer of a material amount of assets of the
Company or any of its subsidiaries, (d) any change in the present board of
directors or management of the Company, including any plans or proposals to
change the number or term of directors or to fill any existing vacancies on the
board, (e) any material change in the present capitalization or dividend policy
of the Company, (f) any other material change in the Company’s business or
corporate structure, including but not limited to, if the Company is a
registered closed-end investment company, any plans or proposals to make any
changes in its investment policy for which a vote is required by Section 13 of
the Investment Company Act of 1940, (g) changes in the Company’s charter, bylaws
or instruments corresponding thereto or other actions which may impede the
acquisition of control of the Company by any Person, (h) causing a class of
securities of the Company to be delisted from a national securities exchange or
to cease to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association, (i) a class of equity securities of
the Company becoming eligible for termination of registration
pursuant  to Section 12(g)(4) of the Act, or (j) any action,
intention, plan or arrangement similar to any of those enumerated above; or
(iii) request the Company or its directors, officers, employees, agents or
representatives to amend or waive any provision of this Section
1.6.

     

    
      
         

      

      
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    1.7 Disputes.  In the case of a
dispute as to the determination of the Exercise Price or the arithmetic
calculation of the Warrant Shares, the Company shall promptly issue to the
Holder the number of Warrant Shares that are not disputed and resolve such
dispute in accordance with Section
12.

     

    1.8 Insufficient
Authorized Shares.  If at any time
while any of the Warrants remain outstanding the Company does not have a
sufficient number of authorized and unreserved shares of Common Stock to satisfy
its obligation to reserve for issuance upon exercise of the Warrants at least a
number of shares of Common Stock equal to 110% of the number of shares of Common
Stock as shall from time to time be necessary to effect the exercise of all of
the Warrants then outstanding (the “Required Reserve
Amount”) (an “Authorized Share
Failure”), then the Company shall immediately take all action necessary
to increase the Company’s authorized shares of Common Stock to an amount
sufficient to allow the Company to reserve the Required Reserve Amount for the
Warrants then outstanding.  Without limiting the generality of the
foregoing sentence, as soon as practicable after the date of the occurrence of
an Authorized Share Failure, but in no event later than 90 days after the
occurrence of such Authorized Share Failure, the Company shall hold a meeting of
its stockholders for the approval of an increase in the number of authorized
shares of Common Stock.  In connection with such meeting, the Company
shall provide each stockholder with a proxy statement and shall use its best
efforts to solicit its stockholders’ approval of such increase in authorized
shares of Common Stock and to cause its board of directors to recommend to the
stockholders that they approve such proposal.

     

    ARTICLE 2

    ADJUSTMENT UPON SUBDIVISION
OR COMBINATION OF COMMON STOCK

     

    If the
Company at any time on or after the Issuance Date subdivides (by any stock
split, stock dividend, recapitalization or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares, the Exercise
Price in effect immediately prior to such subdivision will be proportionately
reduced and the number of Warrant Shares will be proportionately
increased.  If the Company at any time on or after the Issuance Date
combines (by combination, reverse stock split or otherwise) one or more classes
of its outstanding shares of Common Stock into a smaller number of shares, the
Exercise Price in effect immediately prior to such combination will be
proportionately increased and the number of Warrant Shares will be
proportionately decreased.  Any adjustment under this ARTICLE 2 shall
become effective at the close of business on the date the subdivision or
combination becomes effective.

     

    
      
         

      

      
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    ARTICLE 3

    PURCHASE RIGHTS; FUNDAMENTAL
TRANSACTIONS

     

    3.1 Purchase
Rights.  In addition to
any adjustments pursuant to ARTICLE 2 above, if
at any time the Company intends to or does grant, issue or sell any Options,
Convertible Securities or rights to purchase stock, warrants, securities or
other property pro rata to the record holders of any class of shares of Common
Stock (the “Purchase
Rights”), then the Holder will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which the
Holder could have acquired if the Holder had held the number of shares of Common
Stock acquirable upon complete exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) immediately before the date on
which a record is taken for the grant, issuance or sale of such Purchase Rights,
or, if no such record is taken, the date as of which the record holders of
shares of Common Stock are to be determined for the grant, issue or sale of such
Purchase Rights.

     

    3.2 Fundamental
Transactions.  The
Company shall not enter into or be party to a Fundamental Transaction unless the
Successor Entity assumes in writing all of the obligations of the Company under
this Warrant in accordance with the provisions of this Section 3.2 pursuant to written agreements in form
and substance satisfactory to the Required Holders and approved by the Required
Holders prior to such Fundamental Transaction, including agreements to deliver
to each holder of Warrants in exchange for such Warrants a security of the
Successor Entity evidenced by a written instrument substantially similar in form
and substance to this Warrant, including, without limitation, an adjusted
exercise price equal to the value for the shares of Common Stock reflected by
the terms of such Fundamental Transaction, and exercisable for a corresponding
number of shares of capital stock equivalent to the shares of Common Stock
acquirable and receivable upon exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) prior to such Fundamental
Transaction, and satisfactory to the Required Holders.  Upon the
occurrence of any Fundamental Transaction, the Successor Entity shall succeed
to, and be substituted for (so that from and after the date of such Fundamental
Transaction, the provisions of this Warrant referring to the “Company” shall
refer instead to the Successor Entity), and may exercise every right and power
of the Company and shall assume all of the obligations of the Company under this
Warrant with the same effect as if such Successor Entity had been named as the
Company herein.  Upon consummation of the Fundamental Transaction, the
Successor Entity shall deliver to the Holder confirmation that there shall be
issued upon exercise of this Warrant at any time after the consummation of the
Fundamental Transaction, in lieu of the shares of the Common Stock (or other
securities, cash, assets or other property) purchasable upon the exercise of
this Warrant prior to such Fundamental Transaction, such shares of stock,
securities, cash, assets or any other property whatsoever (including warrants or
other purchase or subscription rights) which the Holder would have been entitled
to receive upon the happening of such Fundamental Transaction had this Warrant
been converted immediately prior to such Fundamental Transaction, as adjusted in
accordance with the provisions of this Warrant.  In addition to and
not in substitution for any other rights hereunder, prior to the consummation of
any Fundamental Transaction pursuant to which holders of shares of Common Stock
are entitled to receive securities or other assets with respect to or in
exchange for shares of Common Stock (a “Corporate Event”),
the Company shall make appropriate provision to insure that the Holder will
thereafter have the right to receive upon an exercise of this Warrant at any
time after the consummation of the Fundamental Transaction, in lieu of the
shares of the Common Stock (or other securities, cash, assets or other property)
purchasable upon the exercise of this Warrant prior to such Fundamental
Transaction, such shares of stock, securities, cash, assets or any other
property whatsoever (including warrants or other purchase or subscription
rights) which the Holder would have been entitled to receive upon the happening
of such Fundamental Transaction had this Warrant been exercised immediately
prior to such Fundamental Transaction; provided, however, that in the
event the Fundamental Transaction involves the issuance of cash or freely
tradable securities by an issuer listed on the New York Stock Exchange or the
Nasdaq Stock Market, then the ability to exercise this Warrant shall expire on
the consummation of that Fundamental Transaction.  Provision made
pursuant to the preceding sentence shall be in a form and substance reasonably
satisfactory to the Required Holders.  The provisions of this Section 3.2  shall apply similarly and
equally to successive Fundamental Transactions and Corporate Events and shall be
applied without regard to any limitations on the exercise of this
Warrant.

     

    
      
         

      

      
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    3.3 Notwithstanding
the foregoing, in the event of a Fundamental Transaction other than one in which
the Successor Entity is a Public Successor Entity that assumes this Warrant such
that this Warrant shall be exercisable for the publicly traded common stock of
such Public Successor Entity, at the request of the Holder delivered before the
90th day after the effective date of such Fundamental Transaction, the Company
(or the Successor Entity) shall purchase this Warrant from the Holder by paying
to the Holder, within five (5) Trading Days after such request (or, if later, on
the effective date of the Fundamental Transaction), cash in an amount equal to
the value of the remaining unexercised portion of this Warrant on the date of
such consummation, which value shall be determined by use of the Black Scholes
Option Pricing Model using a volatility equal to the 100 day average historical
price volatility prior to the date of the public announcement of such
Fundamental Transaction.

     

    ARTICLE 4

    NONCIRCUMVENTION

     

    The
Company hereby covenants and agrees that the Company will not, by amendment of
its Certificate of Incorporation, Bylaws or through any reorganization, transfer
of assets, consolidation, merger, scheme of arrangement, dissolution, issue or
sale of securities, or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, and will at all
times in good faith carry out all the provisions of this Warrant and take all
action as may be required to protect the rights of the
Holder.  Without limiting the generality of the foregoing, the Company
(i) shall not increase the par value of any shares of Common Stock receivable
upon the exercise of this Warrant above the Exercise Price then in effect, (ii)
shall take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant, and (iii) shall, so long as any
of the Warrants are outstanding, take all action necessary to reserve and keep
available out of its authorized and unissued shares of Common Stock, solely for
the purpose of effecting the exercise of the Warrants, 110% of the number of
shares of Common Stock as shall from time to time be necessary to effect the
exercise of the Warrants then outstanding (without regard to any limitations on
exercise).

     

    
      
         

      

      
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    ARTICLE 5

    WARRANT HOLDER NOT DEEMED A
STOCKHOLDER

     

    Except as
otherwise specifically provided herein, the Holder, solely in such Person’s
capacity as a holder of this Warrant, shall not be entitled to vote or receive
dividends or be deemed the holder of share capital of the Company for any
purpose, nor shall anything contained in this Warrant be construed to confer
upon the Holder, solely in such Person’s capacity as the Holder of this Warrant,
any of the rights of a stockholder of the Company or any right to vote, give or
withhold consent to any corporate action (whether any reorganization, issue of
stock, reclassification of stock, consolidation, merger, conveyance or
otherwise), receive notice of meetings, receive dividends or subscription
rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares
which such Person is then entitled to receive upon the due exercise of this
Warrant.  In addition, nothing contained in this Warrant shall be
construed as imposing any liabilities on the Holder to purchase any securities
(upon exercise of this Warrant or otherwise) or as a stockholder of the Company,
whether such liabilities are asserted by the Company or by creditors of the
Company.  Notwithstanding this ARTICLE 5,
the Company shall provide the Holder with copies of the same notices and other
information given to the stockholders of the Company generally,
contemporaneously with the giving thereof to the stockholders.

     

    ARTICLE 6

    REISSUANCE OF
WARRANTS

     

    6.1 Transfer
of Warrant.  If this Warrant
is to be transferred, the Holder shall surrender this Warrant to the Company,
whereupon the Company will forthwith issue and deliver upon the order of the
Holder a new Warrant, registered as the Holder may request, representing the
right to purchase the number of Warrant Shares being transferred by the Holder
and, if less then the total number of Warrant Shares then underlying this
Warrant is being transferred, a new Warrant to the Holder representing the right
to purchase the number of Warrant Shares not being transferred.

     

    6.2 Lost,
Stolen or Mutilated Warrant.  Upon receipt by
the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant, and, in the case of loss,
theft or destruction, of any indemnification undertaking by the Holder to the
Company in customary form and, in the case of mutilation, upon surrender and
cancellation of this Warrant, the Company shall execute and deliver to the
Holder a new Warrant representing the right to purchase the Warrant Shares then
underlying this Warrant.

     

    
      
         

      

      
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    6.3 Exchangeable
for Multiple Warrants.  This Warrant is
exchangeable, upon the surrender hereof by the Holder at the principal office of
the Company, for a new Warrant or Warrants representing in the aggregate the
right to purchase the number of Warrant Shares then underlying this Warrant, and
each such new Warrant will represent the right to purchase such portion of such
Warrant Shares as is designated by the Holder at the time of such surrender;
provided, however, that no Warrants for fractional shares of Common Stock shall
be given.

     

    6.4 Issuance
of New Warrants.  Whenever the
Company is required to issue a new Warrant pursuant to the terms of this
Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii)
shall represent, as indicated on the face of such new Warrant, the right to
purchase the Warrant Shares then underlying this Warrant (or in the case of a
new Warrant being issued pursuant to Section 6.1 or Section 6.3, the Warrant Shares designated by the Holder
which, when added to the number of shares of Common Stock underlying the other
new Warrants issued in connection with such issuance, does not exceed the number
of Warrant Shares then underlying this Warrant), (iii) shall have an issuance
date, as indicated on the face of such new Warrant which is the same as the
Issuance Date, and (iv) shall have the same rights and conditions as this
Warrant.

     

    ARTICLE 7

    NOTICES

     

    Whenever
notice is required to be given under this Warrant, unless otherwise provided
herein, such notice shall be given in accordance with Section 6.2 of the
Purchase Agreement.  The Company shall provide the Holder with prompt
written notice of all actions taken pursuant to this Warrant, including in
reasonable detail a description of such action and the reason
therefore.  Without limiting the generality of the foregoing, the
Company will give written notice to the Holder (i) immediately upon any
adjustment of the Exercise Price, setting forth in reasonable detail, and
certifying, the calculation of such adjustment and (ii) at least fifteen days
prior to the date on which the Company closes its books or takes a record (A)
with respect to any dividend or distribution upon the shares of Common Stock,
(B) with respect to any grants, issuances or sales of any Options, Convertible
Securities or rights to purchase stock, warrants, securities or other property
to holders of shares of Common Stock as such or (C) for determining rights to
vote with respect to any Fundamental Transaction, dissolution or liquidation,
provided in each case that such information shall be made known to the public
prior to or in conjunction with such notice being provided to the
Holder.

     

    ARTICLE 8

    AMENDMENT AND
WAIVER

     

    Except as
otherwise provided herein, the provisions of this Warrant may be amended and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company has obtained the written
consent of the Required Holders; provided that except
as set forth in this Warrant no such action may increase the exercise price of
any Warrant or decrease the number of shares or class of stock obtainable upon
exercise of any Warrant without the written consent of the Holder.  No
such amendment shall be effective to the extent that it applies to less than all
of the holders of the Warrants then outstanding.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    ARTICLE 9

    GOVERNING
LAW

     

    This
Warrant shall be governed by and construed and enforced in accordance with, and
all questions concerning the construction, validity, interpretation and
performance of this Warrant shall be governed by, the internal laws of the State
of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of New York.

     

    ARTICLE 10

    CONSTRUCTION;
HEADINGS

     

    This
Warrant shall be deemed to be jointly drafted by the Company and the Holder and
shall not be construed against any person as the drafter hereof.  The
headings of this Warrant are for convenience of reference and shall not form
part of, or affect the interpretation of, this Warrant.

     

    ARTICLE 11

    DISPUTE
RESOLUTION

     

    In the
case of a dispute as to the determination of the Exercise Price or the
arithmetic calculation of the Warrant Shares, the Company shall submit the
disputed determinations or arithmetic calculations via facsimile within 2
Trading Days of receipt of the Exercise Notice giving rise to such dispute, as
the case may be, to the Holder.  If the Holder and the Company are
unable to agree upon such determination or calculation of the Exercise Price or
the Warrant Shares within three Trading Days of such disputed determination or
arithmetic calculation being submitted to the Holder, then the Company shall,
within 2 Trading Days submit via facsimile (a) the
disputed determination of the Exercise Price or arithmetic calculation to an
independent, reputable investment bank or independent registered public
accounting firm selected by Holder subject to Company’s approval, which may not
be unreasonably withheld or delayed, or (b) the disputed arithmetic calculation
of the Warrant Shares to the Company’s independent registered public accounting
firm.  The Company shall cause at its expense the investment bank or
the accountant, as the case may be, to perform the determinations or
calculations and notify the Company and the Holder of the results no later than
3 Trading Days from the time it receives the disputed determinations or
calculations.  Such investment bank’s or accountant’s determination or
calculation, as the case may be, shall be binding upon all parties absent
demonstrable error.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    ARTICLE 12

    REMEDIES, OTHER OBLIGATIONS,
BREACHES AND INJUNCTIVE RELIEF

     

    The
remedies provided in this Warrant shall be cumulative and in addition to all
other remedies available under this Warrant, at law or in equity (including a
decree of specific performance and/or other injunctive relief), and nothing
herein shall limit the right of the Holder right to pursue actual damages for
any failure by the Company to comply with the terms of this
Warrant.  The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Holder and that the
remedy at law for any such breach may be inadequate.  The Company
therefore agrees that, in the event of any such breach or threatened breach, the
holder of this Warrant shall be entitled, in addition to all other available
remedies, to an injunction restraining any breach, without the necessity of
showing economic loss and without any bond or other security being
required.

     

    ARTICLE 13

    DEFINITIONS

     

    For
purposes of this Warrant, in addition to the terms defined elsewhere herein, the
following terms shall have the following meanings:

     

    13.1 “Bloomberg” means
Bloomberg Financial Markets.

     

    13.2 “Closing Bid Price”
and “Closing Sale
Price” means, for any security as of any date, the last closing bid price
and last closing trade price, respectively, for such security on the Trading
Market, as reported by Bloomberg, or, if the Trading Market begins to operate on
an extended hours basis and does not designate the closing bid price or the
closing trade price, as the case may be, then the last bid price or last trade
price, respectively, of such security prior to 4:00 p.m., Eastern time, as
reported by Bloomberg, or, if the Trading Market is not the principal securities
exchange or trading market for such security, the last closing bid price or last
trade price, respectively, of such security on the principal securities exchange
or trading market where such security is listed or traded as reported by
Bloomberg, or if the foregoing do not apply, the last closing bid price or last
trade price, respectively, of such security in the over-the-counter market on
the electronic bulletin board for such security as reported by Bloomberg, or, if
no closing bid price or last trade price, respectively, is reported for such
security by Bloomberg, the average of the bid prices, or the ask prices,
respectively, of any market makers for such security as reported in the “pink
sheets” by Pink Sheets LLC (formerly the National Quotation Bureau,
Inc.).  If the Closing Bid Price or the Closing Sale Price cannot be
calculated for a security on a particular date on any of the foregoing bases,
the Closing Bid Price or the Closing Sale Price, as the case may be, of such
security on such date shall be the fair market value as mutually determined by
the Company and Holder.  If the Company and Holder are unable to agree
upon the fair market value of such security, then such dispute shall be resolved
pursuant to ARTICLE
11.  All such determinations to be appropriately adjusted for
any stock dividend, stock split, stock combination or other similar transaction
during the applicable calculation period.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

     

    13.3 “Common Stock” means
(i) the Company’s shares of Common Stock, par value $0.001 per share, and (ii)
any share capital into which such Common Stock shall have been changed or any
share capital resulting from a reclassification of such Common
Stock.

     

    13.4 “Common Stock Deemed
Outstanding” means, at any given time, the number of shares of Common
Stock actually outstanding at such time, plus the number of shares of Common
Stock deemed to be outstanding pursuant to Section 3.1 hereof regardless of
whether the Options or Convertible Securities are actually exercisable at such
time, but excluding any shares of Common Stock owned or held by or for the
account of the Company or issuable upon exercise of the Warrants.

     

    13.5 “Convertible
Securities” means any stock or securities (other than Options) directly
or indirectly convertible into or exercisable or exchangeable for shares of
Common Stock.

     

    13.6 “DWAC Shares” means
all Warrant Shares issued or issuable to Holder or any Affiliate, successor or
assign of Holder pursuant to this Warrant, all of which shall be (a) issued in
electronic form, (b) freely tradable and without restriction on resale, and (c)
timely credited by Company to the specified Deposit/Withdrawal at Custodian
(DWAC) account with DTC under its Fast Automated Securities Transfer (FAST)
Program or any similar program hereafter adopted by DTC performing substantially
the same function, in accordance with instructions issued to and countersigned
by the Transfer Agent of the Company.

     

    13.7 “Eligible Market”
means the Trading Market, The New York Stock Exchange, Inc., The NASDAQ Global
Select Market, The NASDAQ Global Market, The NASDAQ Capital Market, the NYSE
Amex or the OTC Bulletin Board, but does not include the Pink
Sheets.

     

    13.8 “Fundamental
Transaction” means and shall be deemed to have occurred at such time upon
any of the following events:  (i) a consolidation, merger or other
business combination or event or transaction following which the holders of
Common Stock immediately preceding such consolidation, merger, combination or
event either (a) no longer hold a majority of the shares of Common Stock or (b)
no longer have the ability to elect a majority of the board of directors of the
Company; (ii) the sale or transfer (other than to a majority or wholly owned
subsidiary of the Company) of all or substantially all of the Company’s assets,
other than in the ordinary course of business; or (iii) a purchase, tender or
exchange offer made to the holders of the outstanding shares of Common Stock
(other than pursuant to an “option repricing” or similar event for compensation
purposes).

     

    13.9 “Maximum Placement”
has the meaning set forth in the Purchase Agreement.

     

    13.10 “Options” means any
rights, warrants or options to subscribe for or purchase shares of Common Stock
or Convertible Securities.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    13.11 “Parent Entity” of a
Person means an entity that, directly or indirectly, controls the applicable
Person and whose common stock or equivalent equity security is quoted or listed
on an Eligible Market, or, if there is more than one such Person or Parent
Entity, the Person or Parent Entity with the largest public market
capitalization as of the date of consummation of the Fundamental
Transaction.

     

    13.12 “Person” means an
individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization, any other entity and a
government or any department or agency thereof.

     

    13.13 “Public Successor
Entity” means a Successor Entity that is a publicly traded corporation
whose stock is quoted or listed for trading on an Eligible Market.

     

    13.14 “Purchase Agreement”
means the Preferred Stock Purchase Agreement dated November 2, 2009, by and
among the Company and the investor referred to therein.

     

    13.15 “Required Holders”
means the Holders of the Warrants representing at least a majority of shares of
Common Stock underlying the Warrants then outstanding.

     

    13.16 “Successor Entity”
means the Person (or, if so elected by the Required Holders, the Parent Entity)
formed by, resulting from or surviving any Fundamental Transaction or the Person
(or, if so elected by the Required Holders, the Parent Entity) with which such
Fundamental Transaction shall have been entered into.

     

    13.17 “Trading Day” means
any day on which the Common Stock is traded on an Eligible Market; provided that
it shall not include any day on which the Common Stock (a) is suspended from
trading, or (b) is scheduled to trade on such exchange or market for less than 5
hours.

     

    13.18 “Trading Market” means
the OTC Bulletin Board, the NASDAQ Capital Market, the NASDAQ Global Market, the
NASDAQ Global Select Market, the NYSE Amex, or the New York Stock Exchange,
whichever is at the time the principal trading exchange or market for the Common
Stock, but does not include the Pink Sheets inter-dealer electronic quotation
and trading system.

     

    13.19 “Tranche Closing Date”
has the meaning set forth in the Purchase Agreement.

     

    13.20 “Tranche Notice” has
the meaning set forth in the Purchase Agreement.

     

    13.21 “Tranche Purchase
Price” has the meaning set forth in the Purchase Agreement.

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    


     

    


     

    IN
WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to
be duly executed as of the Issuance Date set out above.

     

    ADVANCED CELL TECHNOLOGY, INC.

    


    


    By:_________________________________________                                                        

    Name:______________________________________

    Title:_______________________________________

    


    By:________________________________________

    Name:______________________________________

    Title:_______________________________________

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    
       

      APPENDIX 1

    

    EXERCISE
NOTICE

     

    


     

    ADVANCED CELL TECHNOLOGY, INC.

     

    The
undersigned hereby exercises the right to purchase ________________ shares of
Common Stock (“Warrant
Shares”) of Advanced Cell Technology, Inc., a Delaware corporation (“Company”), evidenced
by the attached Warrant to Purchase Common Stock (“Warrant”).  Capitalized
terms used herein and not otherwise defined shall have the respective meanings
set forth in the Warrant.  The Holder intends that payment of the
Exercise Price shall be made as:

     

    
      	
            	
              ___

            	Cash Exercise with respect to ____________ Warrant
Shares


    

     

    
      	
            	
              ___

            	Cashless Exercise with respect to ____________ Warrant
  Shares


    

     

    
      	
            	
              ___

            	Recourse Note Exercise with respect to ____________ Warrant
  Shares


    

    


               Please
issue:

     

    
      	
            	
              ___

            	A certificate or certificates representing said shares of Common Stock
      in the namespecified
    below


                                                 


    

    
      	
               
      

            	
              ___

            	
              Said
      shares in electronic form to the Deposit/Withdrawal at Custodian (DWAC)
      account with Depository Trust Company (DTC) specified
    below.

            


    

                                               
___________________________________

    Holder
Name

    


    


    By:__________________________________                     

    Name:________________________________             

    Title:_________________________________

     

    
 

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    


    ACKNOWLEDGMENT

     

    The Company hereby acknowledges
the foregoing Exercise Notice and hereby directs [_______________________________]
to issue the above indicated number of shares of Common Stock as specified
above, in accordance with the Transfer Agent Instructions dated [___________]
from the Company, and acknowledged and agreed to by the transfer
agent.

     

    ADVANCED CELL TECHNOLOGY, INC.

     

    


    By:______________________________________                                                         

    Name:____________________________________    

    Title:_____________________________________

    


     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    APPENDIX
2

     

     

     

     

     

    FORM OF
NOTE

     

     

     

     

     

     

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    SECURED
PROMISSORY NOTE

    


    


    $[_____________]                                                                                                           Date:           [________],
20[__]

     

    FOR VALUE
RECEIVED, [_____________]
(“Borrower”)
promises to pay to the order of Advanced
Cell Technology, Inc. (“Lender”),
at [________],
or at such other place as Lender may from time to time designate in writing, the
principal sum of $[________],
with interest, as follows:

    


    1. Interest.  The
principal balance outstanding from time to time under this Secured Promissory
Note (this “Note”), shall bear
interest from and after the date hereof at the rate of 2.0% per
year.  Interest shall be calculated on a simple interest basis and the
number of days elapsed during the period for which interest is being
calculated.  Payments of interest will be due on each annual
anniversary of the date of this Note; provided that
Borrower will not be in default hereunder for failure to make any annual
interest payment when due (other than on the Maturity Date) and the amount of
interest not paid when due shall be added to the principal balance of this Note
and such amount will thereafter accrue interest at the rate set forth
above.

     

    2. Payments.  If
not sooner paid, the entire unpaid principal balance, interest thereon and any
other charges due and payable under this Note shall be due and payable on the
fourth anniversary of the date of this Note (“Maturity
Date”); provided, however, that no
payments on this Note will be due or payable so long as either (a) Lender is in
default under any preferred stock purchase agreement for Series B Preferred
Stock with Borrower or any Warrant issued pursuant thereto, any loan agreement
or other material agreement entered into with Borrower, or (b) there are any
shares of Series B Preferred Stock of Lender issued or outstanding (each, a “Non-Payment
Event”).  Upon
the termination or cure of any Non-Payment Event, Borrower’s obligation to pay
amounts outstanding on this Note will immediately be
reinstated.  Borrower shall have the right to prepay all or any part
of the principal balance of this Note at any time without penalty or
premium.  In the event that Lender
redeems all or a portion of any shares of Series B Preferred Stock then held by
Borrower, the proceeds of any such redemption will be applied by Borrower to pay
down the accrued interest and outstanding principal of this Note and Lender will be permitted to offset the full
amount of such proceeds against amounts outstanding under this
Note.  All payments on this Note shall be first applied to
interest, then to reduce the outstanding principal balance hereof.

     

    3. Full Recourse
Note.  THIS IS A FULL RECOURSE PROMISSORY
NOTE.  Accordingly, notwithstanding that Borrower’s obligations under
this Note are secured by the Collateral, in the event of a material default
hereunder, Lender shall have full recourse to all the other assets of
Borrower.  Moreover, Lender shall not be required to proceed against
or exhaust any Collateral, or to pursue any Collateral in any particular order,
before Lender pursues any other remedies against Borrower or against any of
Borrower’s assets.

     

    4. Security

     

    a. Pledge.  As
security for the due and prompt payment and performance of all payment
obligations under this Note and any modifications, replacements and extensions
hereof (collectively, “Secured
Obligations”), Borrower hereby pledges and grants a security interest to
Lender in all of Borrower’s right, title, and interest in and to all of the
following, now owned or hereafter acquired or arising, with the value of
securities securing the Note on the date of issuance to be at least equal to the
amount of the Note (together the “Collateral”):

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    i. Freely
tradable shares of common stock, preferred stock, bonds, notes and/or debentures
(collectively, “Pledged Securities”)
with a fair market value on the date hereof at least equal to the principal
amount of this Note, based upon the trading price of such securities on the OTC
Bulletin Board, NASDAQ Capital Market, NASDAQ Global Market, NASDAQ Global Select Market, NYSE Amex, or
New York Stock Exchange;

     

    ii. all
rights of Borrower with respect to or arising out of the Pledged Securities,
including voting rights, and all equity and debt securities and other property
distributed or distributable with respect thereto as a result of merger,
consolidation, dissolution, reorganization, recapitalization, stock split, stock
dividend, reclassification, exchange, redemption, or other change in capital
structure; and

     

    iii. all
proceeds, replacements, substitutions, accessions and increases in any of the
Collateral.

     

    b. Replacement
Securities.  So long as any Secured Obligations remain
outstanding, in the event that Borrower sells or disposes of any Pledged
Securities, Borrower shall promptly provide replacement securities of equal or
greater value to such Pledged Securities.

     

    c. Rights With Respect to
Distributions.  So long as no default shall have occurred and
be continuing under this Note, Borrower shall be entitled to receive any and all
dividends and distributions made with respect to the Pledged Securities and any
other Collateral.  However, upon the occurrence and during the
continuance of any default, Lender shall have the sole right (unless otherwise
agreed by Lender) to receive and retain dividends and distributions and apply
them to the outstanding balance of this Note or hold them as Collateral, at
Lender’s election.

     

    d. Voting
Rights.  So long as no default shall have occurred and be
continuing under this Note, Borrower shall be entitled to exercise all voting
rights pertaining to the Pledged Securities and any other
Collateral.  However, upon the occurrence and during the continuance
of any default, all rights of Borrower to exercise the voting rights that
Borrower would otherwise be entitled to exercise with respect to the Collateral
shall cease and (unless otherwise agreed by Lender) all such rights shall
thereupon become vested in Lender, which shall thereupon have the sole right to
exercise such rights.

     

    e. Financing Statement; Further
Assurances.  Borrower agrees, concurrently with executing this
Note, that Lender may file a UCC-1 financing statement relating to the
Collateral in favor of Lender, and any similar financing statements in any
jurisdiction in which Lender reasonably determines such filing to be
necessary.  Borrower further agrees that at any time and from time to
time Borrower shall promptly execute and deliver all further instruments and
documents that Lender may request in order to perfect and protect the security
interest granted hereby, or to enable Lender to exercise and enforce its rights
and remedies with respect to any Collateral following an event of
default.  In addition, following an event of default, Borrower shall
deliver the Collateral, including original
certificates or other instruments representing the Pledged Securities, to Lender to hold as secured party, and Borrower
shall, if requested by Lender, execute a securities account control
agreement.

     

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

     

    f. Powers of
Lender.  Borrower hereby appoints Lender as Borrower’s true and
lawful attorney-in-fact to perform any and all of the following acts, which
power is coupled with an interest, is irrevocable until the Secured Obligations
are paid and performed in full, and may be exercised from time to time by Lender
in its discretion:  To take any action and to execute any instrument
which Lender may deem reasonably necessary or desirable to accomplish the
purposes of this Section 4(f) and,
more broadly, this Note including, without limitation:  (i) to
exercise voting and consent rights with respect to Collateral in accordance with
this Note, (ii) during the continuance of any default hereunder, to receive,
endorse and collect all instruments or other forms
of payment made payable to Borrower representing any dividend,
interest payment or other distribution in respect
of the Collateral or any part thereof and to give full discharge for the same,
when and to the extent permitted by this Note, (iii) to perform or cause the
performance of any obligation of Borrower hereunder in Borrower’s name or
otherwise, (iv) during the continuance of any default hereunder, to liquidate
any Collateral pledged to Lender hereunder and to apply proceeds thereof to the
payment of the Secured Obligations or to place such proceeds into a cash
collateral account or to transfer the
Collateral into the name of Lender, all at Lender’s sole discretion,
(v)  to enter into any extension, reorganization or other agreement
relating to or affecting the Collateral, and, in connection therewith, to
deposit or surrender control of the Collateral, (vi) to accept other property in
exchange for the Collateral, (vii) to make any compromise or settlement Lender
deems desirable or proper, and (viii) to execute on Borrower’s behalf and in
Borrower’s name any documents required in order to give Lender a continuing
first lien upon the Collateral or any part thereof.

     

    5. Additional
Terms

     

    a. No
Waiver.  The acceptance by Lender of payment of a portion of
any installment when due or an entire installment but after it is due shall
neither cure nor excuse the default caused by the failure of Borrower timely to
pay the whole of such installment and shall not constitute a waiver of Lender’s
right to require full payment when due of any future or succeeding
installments.

     

    b. Default.  Any
one or more of the following shall constitute a “default” under this
Note:  (i) a default in the payment when due of any amount hereunder,
(ii) Borrower’s refusal to perform any material term, provision or covenant
under this Note, (iii) the commencement of any liquidation, receivership,
bankruptcy, assignment for the benefit of creditors or other debtor-relief
proceeding by or against Borrower, (iv) the transfer by Borrower of any Pledged
Securities without being replaced by Pledged Securities in accordance with Section 4(b), and
(iv) the levying of any attachment, execution or other process against Borrower,
the Collateral or any material portion thereof.

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    c. Default
Rights

     

    i. Upon the
occurrence of any payment default Lender may, at its election, declare the
entire balance of principal and interest under this Note immediately due and
payable.  A delay by Lender in exercising any right of acceleration
after a default shall not constitute a waiver of the default or the right of
acceleration or any other right or remedy for such default.  The
failure by Lender to exercise any right of acceleration as a result of a default
shall not constitute a waiver of the right of acceleration or any other right or
remedy with respect to any other default, whenever
occurring.  

     

    ii. Further,
upon the occurrence of any material
non-monetary default, following 30 days notice from Lender to Borrower specifying the default and
demanded manner of cure for any non-monetary default, Lender shall thereupon and
thereafter have any and all of the rights and remedies to which a secured party
is entitled after a default under the applicable Uniform Commercial Code, as
then in effect.  In addition to Lender’s other rights and remedies,
Borrower agrees that, upon the occurrence of default, Lender may in its sole
discretion do or cause to be done any one or more of the following:

     

    (a) Proceed
to realize upon the Collateral or any portion thereof as provided by law, and
without liability for any diminution in price which may have occurred, sell the
Collateral or any part thereof, in such manner, whether at any public or private
sale, and whether in one lot as an entirety, or in separate portions, and for
such price and other terms and conditions as is commercially reasonable given
the nature of the Collateral.

     

    (b) If notice
to Borrower is required, give written notice to Borrower at least ten days
before the date of sale of the Collateral or any portion thereof.

     

    (c) Transfer
all or any part of the Collateral into Lender’s
name or in the name of its nominee or nominees.

     

    (d) Vote all
or any part of the Collateral (whether or not transferred into the name of
Lender ) and give all consents, waivers and ratifications in respect of the
Collateral and otherwise act with respect thereto, as though Lender were the
outright owner thereof.

     

    iii. Borrower
acknowledges that all or part of foreclosure of the Collateral may be restricted
by state or federal securities laws, Lender may be unable to effect a public
sale of all or part of the Collateral, that a public sale is or may be
impractical and inappropriate and that, in the event of such restrictions,
Lender thus may be compelled to resort to one or more private sales to a
restricted group of purchasers who will be obliged to agree, among other things,
to acquire the Collateral for their own account, for investment and not with a
view to its distribution or resale.  Borrower agrees that if
reasonably necessary Lender may resort to one or more sales to a single
purchaser or a restricted or limited group of purchasers.  Lender
shall not be obligated to make any sale or other disposition, unless the terms
thereof shall be satisfactory to it.

     

    iv. If, in
the opinion of Lender based upon written advice of counsel, any consent,
approval or authorization of any federal, state or other governmental agency or
authority should be necessary to effectuate any sale or other disposition of any
Collateral, Borrower shall execute all such applications and other instruments
as may reasonably be required in connection with securing any such consent,
approval or authorization, and will otherwise use its commercially reasonable
best efforts to secure the same.

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

     

    v. The
rights, privileges, powers and remedies of Lender shall be cumulative, and no
single or partial exercise of any of them shall preclude the further or other
exercise of any of them.  Any waiver, permit, consent or approval of
any kind by Lender of any default hereunder, or any such waiver of any
provisions or conditions hereof, must be in writing and shall be effective only
to the extent set forth in writing.  Any proceeds of any disposition
of the Collateral, or any part thereof, may be applied by Lender to the payment
of expenses incurred by Lender in connection with the foregoing, and the balance
of such proceeds shall be applied by Lender toward the payment of the Secured
Obligations.

     

    d. No Oral Waivers or
Modifications.  No provision of this Note may be waived or
modified orally, but only in a writing signed by Lender and
Borrower.

     

    e. Attorney
Fees.  The prevailing party in any action by Lender to collect
any amounts due under this Note shall be entitled to recover its reasonable
attorneys fees and costs.

     

    f. Governing
Law.  This Note has been executed and delivered in, and is to
be construed, enforced, and governed according to the internal laws of, the
State of New York without regard to its principles of conflict of laws that
would require or permit the application of the laws of any other
jurisdiction.

     

    g. Severability.  Whenever
possible, each provision of this Note shall be interpreted in such manner as to
be effective and valid under applicable law.  However, if any
provision of this Note shall be held to be prohibited by or invalid under
applicable law, it shall be ineffective only to the extent of such prohibition
or invalidity without invalidating the remainder of that provision or the other
provisions of this Note.

     

    h. Entire
Agreement.  This Note contains the entire understanding of the
parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, oral or written, with respect to such
matters.

     

     

    


    By:_________________________________                                       

    Name:_______________________________                     

    Title:________________________________

     

     

     

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