Exhibit 
10.01


 


THE
SECURITIES REPRESENTED BY THIS AGREEMENT ARE OFFERED FOR INVESTMENT ONLY AND
HAVE NOT BEEN REGISTERED PURSUANT TO THE PROVISIONS OF THE SECURITIES ACT OF
1933 FROM REGISTRATION AS AMENDED (“SECURITIES ACT”), AND HAVE BEEN OFFERED AND
SOLD IN RELIANCE UPON THE EXEMPTION, SPECIFIED IN SECTION 4(2) OF THE
SECURITIES ACT AND RULE 506 OF REGULATION D PROMULGATED PURSUANT THERETO.  WITHOUT SUCH REGISTRATION, SUCH SECURITIES
MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF, EXCEPT UPON DELIVERY TO THE COMPANY AND ITS TRANSFER AGENT OF AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT THAT SUCH
REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER; OR THE SUBMISSION TO THE
COMPANY OR ITS TRANSFER AGENT OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO
THE COMPANY AND ITS TRANSFER AGENT TO THE EFFECT THAT ANY SUCH TRANSFER SHALL
NOT BE IN VIOLATION OF THE SECURITIES ACT, APPLICABLE STATE SECURITIES LAWS OR
ANY RULE OR REGULATION PROMULGATED PURSUANT THERETO.


 




	
  No.
  WC-1-2004

  	
   

  	
  1,100,000 Warrants

  






 


WARRANTS TO PURCHASE


1,100,000 SHARES OF


A.C.T. HOLDINGS, INC.


COMMON STOCK


WARRANT CERTIFICATE


 


Date of Issuance:  December 30,
2004


 


WARRANT AGREEMENT


 


This Warrant Certificate certifies that Quantum Merchant
Bankers, LLC, or registered assigns, in consideration of $3,520.08
received, is the registered holder of Warrants (the “Warrants”) to purchase
initially, at any time from December 30, 2005 (the “Effective Date”) until 5:30
p.m. Los Angeles time, on December 30, 2014 (“Expiration Date”), up to the
number of fully paid and nonassessable shares of common stock (“Common Stock”)
of A.C.T. Holdings, Inc., a Nevada corporation (the “Company”) set forth above,
at the initial exercise price, subject to adjustment in certain events, of $0.85 per share (the “Exercise Price”) of Common Stock upon
surrender of this Warrant Certificate and payment of the Exercise Price at an
office or agency of the Company, but subject to the conditions set forth
herein.


 


The
Warrants are subject to the following provisions, terms and conditions:


 


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1.
EXERCISE OF WARRANTS


 


Exercise of Warrants.
The Warrants may be exercised by the Holder, in whole or in part (but not as to
a fractional share of Common Stock), by surrender of this Warrant Agreement at
the principal office of the Company located at 38 Plantation Street, Worcester,
MA 01605 (or such other office or agency of the Company as may be designated by
notice in writing to the Holder at the address of such Holder appearing on the
books and records of the Company), with the appropriate form attached hereto
duly exercised, at any time within the period beginning on the date of this
Warrant Agreement, which is specified above and ending on that date exactly ten
(10) years from the Effective Date (the “Exercise Period”) and (i) by certified
or official bank check or (ii) by surrender to the Company for cancellation of
a portion of these Warrants representing that number of unissued shares of  Common Stock underlying these Warrants which
is equal to the quotient obtained by dividing (A) the product obtained by
multiplying the Exercise Price by the number of shares of such Common  Stock being purchased upon such exercise by
(B) the difference obtained by subtracting the Exercise Price from the average
of the bid and asked prices on the date of exercise (the “Per Share Market
Value”) as of the date of such exercise. In any case where the consideration
payable upon such exercise is being paid in whole or in part pursuant to the
provisions of clause (ii) of this subsection (b), such exercise shall be
accompanied by written notice from the Holder of these Warrants specifying the
manner of payment thereof and containing a calculation showing the number of
such shares of Common Stock with respect to which rights are being surrendered
thereunder and the net number of shares to be issued after giving effect to
such surrender.  The Company agrees that
the shares of Common Stock so purchased shall be deemed to be issued to the
Holder as the record owner of such shares of Common Stock as of the close of
business on the date on which the Warrant Agreement shall have been surrendered
and payment made for such shares of Common Stock. Certificates representing the
shares of Common Stock so purchased shall be delivered to the Holder promptly
and in no event later than thirty (30) days after the Warrants shall have been
so exercised.


 


2.
ADJUSTMENTS AND NOTICES


 


A.  Adjustments.
The Exercise Price and the number of shares of Common Stock issuable upon
exercise of each Warrant shall be subject to adjustment from time to time, as
follows:


 


(1)                                 Stock
Dividends; Stock Splits; Reverse Stock Splits; and Reclassifications. In
the event that the Company shall (a) pay a dividend with respect to its capital
stock in shares of Common Stock, (b) subdivide its issued and outstanding
shares of Common Stock, (c) combine its issued and outstanding shares of common
stock into a smaller number of shares of any class of Common Stock or (d) issue
any shares of its capital stock in a reclassification of the Common Stock
(including any such reclassification in connection with a merger, consolidation
or other business combination in which the Company is the continuing


 


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                                                corporation)
(any one of which actions is herein referred to as an “Adjustment Event”), the
number of shares of Common Stock purchasable upon exercise of each Warrant
immediately prior to the record date for such Adjustment Event shall be
adjusted so that the Holder shall thereafter be entitled to receive the number
of shares of Common Stock or other securities of the Company (such other
securities thereafter enjoying the rights of shares of Common Stock pursuant to
this Warrant Agreement) that such Holder would have owned or have been entitled
to receive after the happening of such Adjustment Event, had such Warrant been
exercised immediately prior to the happening of such Adjustment Event or any
record date with respect thereto. An adjustment made pursuant to this Section
2A(1) shall become effective immediately after the effective date of such
Adjustment Event retroactive to the record date, if any, for such Adjustment
Event.


 


(2)                                 Adjustment
of Exercise Price. Whenever the number of shares of Common Stock
purchasable upon the exercise of each Warrant is adjusted pursuant to Section
2A(1) of this Warrant Agreement, the Exercise Price for each share of Common
Stock payable upon exercise of each Warrant shall be adjusted by multiplying
such Exercise Price immediately prior to such adjustment by a fraction, the
numerator of which shall be the number of shares of Common Stock purchasable
upon the exercise of each Warrant immediately prior to such adjustment, and the
denominator of which shall be the number of shares of Common Stock so
purchasable immediately thereafter.


 


(3)                                 De
Minimis Adjustments. No adjustment in the number of shares of Common Stock
purchasable pursuant to this Warrant Agreement shall be required, unless such
adjustment would require an increase or decease of at least one percent (1%) in
the number of shares of Common Stock purchasable upon an exercise of each
Warrant; provided, however, that any adjustments which by reason of this
Section 2A(3) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations shall be made to
the nearest full share.


 


B.  Notice of Adjustment. Whenever
the number of shares of Common Stock purchasable upon the exercise of each
Warrant or the Exercise Price is adjusted, as herein provided, the Company
shall promptly notify the Holder in writing (such writing referred to as an “Adjustment
Notice”) of such adjustment or adjustments and shall deliver to the Holder a
certificate of a firm of independent public accountants selected by the Board
of Directors of the Company (who may be the regular accountants employed by the
Company) or of the Independent Financial Expert, if any, which makes a
determination of Current Market Value with respect to any such adjustment
setting forth the number of shares of Common Stock purchasable upon the
exercise of each Warrant and the Exercise Price after such adjustment, setting
forth a brief statement of the facts requiring such adjustment and setting
forth the computation by which such adjustment was made.


 


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C.   Amendment of Warrant Agreement. This Warrant Agreement may not be changed
because of any change in the Exercise Price or in the number of shares of
Common Stock purchasable upon the exercise of a Warrant. The Company may at the
time in the Company’s sole discretion make any change in the form of a warrant
agreement that the Company may deem appropriate and that does not affect the
substance thereof and any warrant agreement thereafter issued, whether in
exchange or substitution for any outstanding warrant agreement or otherwise,
may be in the form so changed.


 


D.   Notice to Holder of Record Date,
Dissolution, Liquidation or Winding Up. The Company shall cause to be mailed (by
first class mail, postage prepaid) to the Holder notice of the record date for
any dividend, distribution or payment, in cash or in kind (including, without
limitation, evidence of indebtedness and assets), with respect to shares of
Common Stock at least twenty (20) calendar days before any such date. In the
event that at any time after the date hereof, there shall be a voluntary or
involuntary dissolution, liquidation or winding up of the Company, then the
Company shall cause to be mailed (by first class mail, postage prepaid) to the
Holder at the Holder’s address as shown on the books of the Company, at the
earliest practicable time (and, in any event, not less than twenty (20)
calendar days before any date set for definitive action), notice of the date on
which such dissolution, liquidation or winding up shall take place, as the case
may be. The notices referred to above shall also specify the date as of which
the holders of the shares of Common Stock of record or other securities
underlying the Warrants shall be entitled to receive such dividend, money or
the property deliverable upon such dissolution, liquidation or winding up, as
the case may be (the “Entitlement Date”). In the case of a distribution of
evidence of indebtedness or assets (other than in dissolution, liquidation or
winding up), if the Holder elects to exercise the Warrants in accordance with
Section 1 of this Warrant Agreement and become a holder of the Common Stock on
the Entitlement Date, the Holder shall thereafter receive the evidence of
indebtedness or assets distributed in respect of shares of Common Stock.


 


E.   Fractional Interest.
The Company shall not be required to issue fractional shares of Common Stock on
the exercise of the Warrants. If more than one Warrant shall be presented for
exercise in full at the same time by the same holder, the number of full shares
of Common Stock which shall be issuable upon such exercise shall be computed on
the basis of the aggregate number of whole shares of Common Stock purchasable
on exercise of the Warrants so presented. If any fraction of a share of Common
Stock would, except for the provisions of this Section 2E be issuable on the
exercise of the Warrants (or specified proportion thereof), the Company shall pay
an amount in cash calculated by it to be equal to the then fair value of one
share of Common Stock, as determined by the Board of Directors of the Company
in good faith, multiplied by such fraction computed to the nearest whole cent.


 


3.
RESERVATION AND AUTHORIZATION OF COMMON STOCK


 


The
Company covenants and agrees (a) that all shares of Common Stock which may be
issued upon the exercise of the Warrants will, upon issuance, be validly
issued, fully paid


 


4





















 


and
nonassessable and free of all insurance or transfer taxes, liens and charges
with respect to the issue thereof; (b) that during the Exercise Period, the
Company will at all times have authorized, and reserved for the purpose of
issue or transfer upon exercise of the Warrants, sufficient shares of Common
Stock to provide for the exercise of the Warrants, and (c) that the Company
will take all such action as may be necessary to ensure that the shares of
Common Stock issuable upon the exercise of the Warrants may be so issued
without violation of any applicable law or regulation, or any requirements of
any domestic securities exchange upon which any capital stock of the Company
may be listed; provided, however, that nothing contained herein shall impose upon
the Company any obligation to register the Warrants or the Common Stock
pursuant to applicable securities laws. In the event that any securities of the
Company, other than the Common Stock, are issuable upon exercise of the
Warrants, the Company will take or refrain from taking any action referred to
in clauses (a) through (c) of this Section 3 as though such clauses applied,
mutatis mutandis, to such other securities then issuable upon the exercise the
Warrants.


 


4. NO
VOTING RIGHTS


 


This
Warrant Agreement shall not entitle the Holder to any voting rights or other
rights as a stockholder of the Company.


 


5.  CALL OF WARRANTS BY THE COMPANY.


 


The
Company shall have the right to force the purchase, at the Exercise Price, of
any or all Warrants on or after the date (the “Call Date”) on which: (i) the
price (“price” shall be determined by taking the average between the bid and
ask prices over the preceding five (5) day period) of the Company’s common
stock as reported on the Over the Counter Bulletin Board, or other nationally
recognized exchange, as the case may be, equals or exceeds 150% of the Exercise
Price; and (ii) the average trading volume of the Company’s common stock on the
Over the Counter Bulletin Board or other nationally recognized exchange, as the
case may be, equals or exceeds 20,000 shares per day over the previous thirty
(30) day period (collectively, the “Conditions to Call”). Should the Company
determine that the Conditions to Call have been satisfied, the Company shall
provide the Holder with written notice of its intent to call the Warrants. The
Holder shall have ten (10) days from the date appearing on such notice to
exercise the Warrants as specified herein and tender the Exercise Price to the
Company. If the Holder fails to exercise the warrants within the specified
period, all Warrants issued in the name of Holder shall, without any other
action by the Company, terminate.


 


6.  EXERCISE OR TRANSFER OF WARRANTS OR COMMON
STOCK


 


The
Holder agrees to be obligated by any and all provisions with respect to any and
all limitations, including limitations imposed by the Securities Act of 1933,
as amended, regarding the Warrants and the shares of Common Stock or other
securities issuable upon exercise of the Warrants. The Holder acknowledges and
agrees that he or she is aware that there are substantial restrictions on the
transferability of the Warrants and the shares


 


5





















 


of
Common Stock or other securities issuable upon exercise of the Warrants. The undersigned
also acknowledges and agrees that he or she shall be responsible for compliance
with all conditions on transfer imposed by a Securities Administrator of any
state, province or territory and for any expenses incurred by the Company for
legal and accounting services in connection with reviewing such a proposed
transfer and issuing opinions in connection therewith.


 


7.
LOCK-UP PROVISION


 


In
the event that the Board of Directors of the Company determines, in its sole
and absolute discretion, that it is in the best interests of the Company and
its shareholders to cause Holder to execute a lockup/leak-out agreement related
to the common stock underlying the Warrants (whether such underlying common
stock is registered or not), Holder specifically agrees to execute such an
agreement as presented by the Company. 
The terms and conditions of such lockup/leak-out agreement, if
necessary, shall be set by the Company, in its sole and absolute discretion,
and will include, but not be limited to, at least a twelve (12) month
lockup/leak-out provision. In the event that Holder refuses to execute the
lockup/leak-out agreement (which may be a condition precedent to the issuance
of the stock underlying the Warrants), the Holder herewith specifically agrees
that the Company may refuse to issue the common stock issuable upon exercise of
the Warrants.


 


8.  PIGGY-BACK REGISTRATION RIGHTS


 


Subject
to the exceptions specified in this Section 8, in the event that the Company
decides to file a registration statement with the Securities and Exchange
Commission  pursuant to the Securities
Act, the Company shall provide Holder with written notice of its intent to file
a registration statement. Holder will then have fifteen (15) days from the date
appearing on the notice to request, in writing, that the Company use its best
efforts to include in that registration statement, for registration, all or any
portion of the common stock issuable upon exercise of these Warrants. If Holder
does not provide the Company with written notice within fifteen (15) days,
Holder loses Holder’s right to request registration of the shares issuable upon
the exercise of these Warrants. If proper notice is given, the Company agrees
to use its best efforts to prepare and file with the Securities and Exchange
Commission such amendments and supplements to the registration statement and
the prospectus used in connection with such registration statement necessary to
comply with the provisions of the Securities Act and to cause such registration
statement to become effective. The Company shall pay all expenses and fees
incurred by Holder in registering all or any portion of the shares issuable
upon exercise of these Warrants. The exceptions to the piggy-back registration
rights granted herein (i.e., Holder will not have the right to request that the
Company register the common stock underlying the Warrants) are as follows: (i)
the registration statement filed by the Company is related or a condition to a
secondary offering conducted by the Company; or (ii) the registration statement
filed by the Company seeks to register stock whose aggregate value (exclusive
of the common stock issuable upon exercise of the Warrants) is less than Ten
Million Dollars ($10,000,000).


 


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9.
MERGERS, CONSOLIDATIONS, ETC.


 


A.
Except as may otherwise be provided, if the Company shall merge or consolidate
with another corporation, the Holder shall thereafter have the right, upon
exercise of the rights specified in this Warrant Agreement and payment of the
Exercise Price, to receive solely the kind and amount of shares of stock
(including, if applicable, Common Stock), other securities, property or cash or
any combination thereof receivable by a holder of the number of shares of
Common Stock for which this Warrant Agreement might have been exercised
immediately prior to such merger or consolidation (assuming, if applicable,
that the holder of such Common Stock failed to exercise its rights of election,
if any, as to the kind or amount of shares of stock, other securities, property
or cash or combination thereof receivable upon such merger or consolidation).


 


B. In case of any
reclassification or change of the shares of Common Stock issuable upon exercise
of (other than elimination or par value, a change in par value, or from par
value to no par value, or as the result of a subdivision or combination of
shares (which is provided for elsewhere herein), but including any
reclassification of the shares of Common stock into two (2) or more classes or series
of shares) or in case of any merger or consolidation of another corporation
into the Company in which the Company is the surviving corporation and in which
there is a reclassification or change of the shares of Common Stock (other than
a change in par value, or from par value to no par value, or as a result of a
subdivision or combination (which is provided for elsewhere herein), but
including any reclassification of the shares of Common Stock, the Holder shall
thereafter have the right, upon exercise hereof and payment of the Exercise
Price, to receive solely the kind and amount of shares of stock (including, if
applicable, Common Stock), other securities, property or cash or any
combination thereof receivable upon such reclassification, change, merger or
consolidation by a holder of the number of shares of Common Stock for which the
rights specified in this Warrant Agreement might have been exercised
immediately prior to such reclassification, change, merger or consolidation
(assuming, if applicable, that the holder of such Common Stock failed to
exercise its rights of election, if any, as to the kind or amount of shares of
stock, other securities, property or cash or combination thereof receivable
upon such reclassification, change, merger or consolidation).


 


10.
RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF WARRANTS


 


The
rights and obligations of the Company, of the Holder, and of the holders of
shares of Common Stock or other securities issued upon exercise of the
Warrants, specified in this Warrant Agreement shall survive the exercise of the
Warrants.


 


Dated:
December 30, 2004


 


COMPANY


 


A.C.T.
HOLDINGS, INC.,


 


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A
Nevada corporation


 


 


	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  David
  C. Merrell

  	
   

  
	
  Its:

  	
  President

  	
   

  
	
   

  	
   

  
	
  HOLDER

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Signature
  of Holder)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Print
  Name of Holder)

  	
   

  
					



 


8