**Exhibit 4.2**

 

**ADVANCED CELL TECHNOLOGY, INC.WARRANT AGREEMENT**

 

ThisWarrant Agreement, dated as of                                     (the “Effective Date”), certifies that                              (the“Holder”), is the owner of                    warrants(subject to adjustment as provided herein), each of which represent the rightto subscribe for and purchase from Advanced Cell Technology, Inc., aDelaware corporation (the “Company”), one share of the Company’s common stock, $.001par value, (such common stock, including any stock into which it may bechanged, reclassified or converted, is herein referred to as the “CommonStock”) (“Warrants”) at the purchase price of $0.05 per share (subject toadjustment as provided herein) (the “Exercise Price”), which have been issuedby the Company in exchange for the Holder’s                                                          .

 

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

 

TheWarrants are subject to the following provisions, terms and conditions:

 

**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), bysurrender of this Warrant Agreement at the principal office of the Companylocated at One Innovation Drive, Worcester, MA 01605 (or such other office oragency of the Company as may be designated by notice in writing to the Holderat the address of such Holder appearing on the books and records of theCompany), with the appropriate form attached hereto duly exercised, at any timewithin the period beginning on the Effective Date and ending on that dateexactly twenty-four (24) months from the Effective Date (the “Exercise Period”)and by payment to the Company by (1) certified check or bank draft of thepurchase price for such shares of the Common Stock or (2) an election toexercise the Warrants on a cashless basis. The Company agrees that the sharesof Common Stock so purchased shall be deemed to be issued to the Holder as therecord owner of such shares of Common Stock as of the close of business on thedate on which the Warrant Agreement shall have been surrendered and paymentmade for such shares of Common Stock. Certificates representing the shares ofCommon Stock so

 

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purchased shall be deliveredto the Holder promptly and in no event later than thirty (30) days after theWarrants shall have been so exercised.

 

**2. ADJUSTMENTS AND NOTICES**

 

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

 

**(1) Stock Dividends; Stock Splits; Reverse Stock Splits; andReclassifications.**Inthe event that the Company shall (a) pay a dividend with respect to itscapital stock in shares of Common Stock, (b) subdivide its issued andoutstanding shares of Common Stock, (c) combine its issued and outstandingshares of common stock into a smaller number of shares of any class of CommonStock or (d) issue any shares of its capital stock in a reclassificationof the Common Stock (including any such reclassification in connection with amerger, consolidation or other business combination in which the Company is thecontinuing corporation) (any one of which actions is herein referred to as an“Adjustment Event”), the number of shares of Common Stock purchasable uponexercise of each Warrant immediately prior to the record date for suchAdjustment Event shall be adjusted so that the Holder shall thereafter beentitled to receive the number of shares of Common Stock or other securities ofthe Company (such other securities thereafter enjoying the rights of shares ofCommon Stock pursuant to this Warrant Agreement) that such Holder would haveowned or have been entitled to receive after the happening of such AdjustmentEvent, had such Warrant been exercised immediately prior to the happening ofsuch Adjustment Event or any record date with respect thereto. An adjustmentmade pursuant to this Section 2A(1) shall become effective immediatelyafter the effective date of such Adjustment Event retroactive to the recorddate, if any, for such Adjustment Event.

 

**(2) Adjustment of Exercise Price.**Whenever the number of shares of Common Stockpurchasable upon the exercise of each Warrant is adjusted pursuant toSection 2A(1) of this Warrant Agreement, the Exercise Price for eachshare of Common Stock payable upon exercise of each Warrant shall be adjustedby multiplying such Exercise Price immediately prior to such adjustment by afraction, the numerator of which shall be the number of shares of Common Stockpurchasable upon the exercise of each Warrant immediately prior to suchadjustment, and the denominator of which shall be the number of shares ofCommon Stock so purchasable immediately thereafter.

 

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

 

**B. Notice of Adjustment.**Whenever the number of shares of Common Stockpurchasable upon the exercise of each Warrant or the Exercise Price isadjusted, as herein provided, the Company shall promptly notify the Holder inwriting (such writing referred to as an “Adjustment Notice”) of such adjustmentor adjustments and shall deliver to the Holder

 

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a certificate of a firm ofindependent public accountants selected by the Board of Directors of theCompany (who may be the regular accountants employed by the Company) or of theIndependent Financial Expert, if any, which makes a determination of CurrentMarket Value with respect to any such adjustment setting forth the number ofshares of Common Stock purchasable upon the exercise of each Warrant and theExercise Price after such adjustment, setting forth a brief statement of thefacts requiring such adjustment and setting forth the computation by which suchadjustment was made.

 

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

 

**D. Notice to Holder of Record Date, Dissolution, Liquidationor Winding Up.**TheCompany shall cause to be mailed (by first class mail, postage prepaid) to theHolder notice of the record date for any dividend, distribution or payment, incash or in kind (including, without limitation, evidence of indebtedness andassets), with respect to shares of Common Stock at least twenty (20) calendardays 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 windingup of the Company, then the Company shall cause to be mailed (by first classmail, postage prepaid) to the Holder at the Holder’s address as shown on thebooks of the Company, at the earliest practicable time (and, in any event, notless than twenty (20) calendar days before any date set for definitive action),notice of the date on which such dissolution, liquidation or winding up shalltake place, as the case may be. The notices referred to above shall alsospecify the date as of which the holders of the shares of Common Stock ofrecord or other securities underlying the Warrants shall be entitled to receivesuch dividend, money or the property deliverable upon such dissolution,liquidation or winding up, as the case may be (the “Entitlement Date”). In thecase of a distribution of evidence of indebtedness or assets (other than indissolution, liquidation or winding up), if the Holder elects to exercise theWarrants in accordance with Section 1 of this Warrant Agreement and becomea holder of the Common Stock on the Entitlement Date, the Holder shallthereafter receive the evidence of indebtedness or assets distributed inrespect of shares of Common Stock.

 

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

 

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**3. RESERVATION AND AUTHORIZATION OF COMMON STOCK**The Company covenants and agrees (a) thatall shares of Common Stock which may be issued upon the exercise of theWarrants will, upon issuance, be validly issued, fully paid and nonassessableand free of all insurance or transfer taxes, liens and charges with respect tothe issue thereof; (b) that during the Exercise Period, the Company willat all times have authorized, and reserved for the purpose of issue or transferupon exercise of the Warrants, sufficient shares of Common Stock to provide forthe exercise of the Warrants, and (c) that the Company will take all suchaction as may be necessary to ensure that the shares of Common Stock issuableupon the exercise of the Warrants may be so issued without violation of anyapplicable law or regulation, or any requirements of any domestic securitiesexchange upon which any capital stock of the Company may be listed; provided,however, that nothing contained herein shall impose upon the Company anyobligation to register the Warrants or the Common Stock pursuant applicablesecurities laws. In the event that any securities of the Company, other thanthe Common Stock, are issuable upon exercise of the Warrants, the Company willtake or refrain from taking any action referred to in clauses (a) through(c) of this Section 3 as though such clauses applied, mutatismutandis, 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 votingrights or other rights as a stockholder of the Company.

 

**5. EXERCISE OR TRANSFER OF WARRANTS OR COMMON STOCK**The Holder agrees to be obligated by any andall provisions with respect to any and all limitations, including limitationsimposed by the Securities Act of 1933, as amended, regarding the Warrants andthe shares of Common Stock or other securities issuable upon exercise of theWarrants. The Holder acknowledges and agrees that he or she is aware that thereare substantial restrictions on the transferability of the Warrants and theshares of Common Stock or other securities issuable upon exercise of theWarrants. The undersigned also acknowledges and 5 agrees that he or she shallbe responsible for compliance with all conditions on transfer imposed by aSecurities Administrator of any state, province or territory and for anyexpenses incurred by the Company for legal and accounting services in connectionwith reviewing such a proposed transfer and issuing opinions in connectiontherewith.

 

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

 

**7. PIGGY-BACK REGISTRATION RIGHTS**Subject to the exceptions specified in thisSection 7, in the event that the Company decides to file a registrationstatement with

 

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the Securities and ExchangeCommission (“Commission”) pursuant to the 1933 Act, the Company shall provideHolder with written notice of its intent to file a registration statement.Holder will then have fifteen (15) days from the date appearing on the noticeto request, in writing, that the Company use its best efforts to include inthat registration statement, for registration, all or any portion of the commonstock issuable upon exercise of these Warrants. If Holder does not provide theCompany with written notice within fifteen (15) days, Holder loses Holder’sright to request registration of the shares issuable upon the exercise of theseWarrants. If proper notice is given, the Company agrees to use its best effsortsto prepare and file with the Commission such amendments and supplements to theregistration statement and the prospectus used in connection with suchregistration statement necessary to comply with the provisions of the 1933 Actand to cause such registration statement to become effective. The Company shallpay all expenses and fees incurred by Holder in registering all or any portionof the shares issuable upon exercise of these Warrants. The exceptions to thepiggy-back registration rights granted herein (i.e., Holder will not have theright to request that the Company register the common stock underlying theWarrants) are as follows: (i) the registration statement filed by theCompany is related or a condition to a secondary offering conducted by theCompany; or (ii) the registration statement filed by the Company seeks toregister stock whose aggregate value (exclusive of the common stock issuableupon exercise of the Warrants) is less than Ten Million Dollars ($10,000,000).

 

**8. MERGERS, CONSOLIDATIONS, ETC.**A. Except as may otherwise be provided, ifthe Company shall merge or consolidate with another corporation, the Holdershall thereafter have the right, upon exercise of the rights specified in thisWarrant Agreement and payment of the Exercise Price, to receive solely the kindand amount of shares of stock (including, if applicable, Common Stock), othersecurities, property or cash or any combination thereof receivable by a holderof the number of shares of Common Stock for which this Warrant Agreement mighthave been exercised immediately prior 6 to such merger or consolidation(assuming, if applicable, that the holder of such Common Stock failed toexercise its rights of election, if any, as to the kind or amount of shares ofstock, other securities, property or cash or combination thereof receivableupon such merger or consolidation). B. In case of any reclassification orchange of the shares of Common Stock issuable upon exercise of (other thanelimination or par value, a change in par value, or from par value to no parvalue, or as the result of a subdivision or combination of shares (which isprovided for elsewhere herein), but including any reclassification of theshares 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 theCompany in which the Company is the surviving corporation and in which there isa reclassification or change of the shares of Common Stock (other than a changein par value, or from par value to no par value, or as a result of asubdivision or combination (which is provided for elsewhere herein), butincluding any reclassification of the shares of Common Stock, the Holder shallthereafter have the right, upon exercise hereof and payment of the ExercisePrice, to receive solely the kind and amount of shares of stock (including, ifapplicable, Common Stock), other securities, property or cash or anycombination thereof receivable upon such reclassification, change, merger orconsolidation by a holder of the number of shares of Common Stock for which therights specified in this Warrant Agreement might have been exercisedimmediately prior to such reclassification, change, merger or consolidation(assuming, if applicable, that the holder of such Common Stock failed toexercise its rights of election, if any, as to the kind or

 

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amount of shares of stock,other securities, property or cash or combination thereof receivable upon suchreclassification, change, merger or consolidation).

 

**9. RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF WARRANTS** The****rights and obligations of the Company, of the Holder, and of theholders of shares of Common Stock or other securities issued upon exercise ofthe Warrants, specified in this Warrant Agreement shall survive the exercise ofthe Warrants.

 

 

ADVANCEDCELL TECHNOLOGY, INC.,

a Delaware corporation

 
| By:             |   |   |
|-----------------|--------|--------|
| Michael D. West |
| Its President   |

 

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