**Exhibit4.4**

 

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

 

ThisWarrant Agreement certifies that Gunnar Engstrom (the “Holder”), is the ownerof 100,000 warrants (subject to adjustment as provided herein), each of whichrepresent the right to subscribe for and purchase from A.C.T.Holdings, Inc., a Nevada corporation (the “Company”), one share of theCompany’s common stock, $.001 par value, (such common stock, including anystock into which it may be changed, reclassified or converted, is hereinreferred to as the “Common Stock”) (“Warrants”) at the purchase price of $0.25per share (subject to adjustment as provided herein) (the “Exercise Price”).

 

**THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT BEENREGISTERED PURSUANT TO THE PROVISIONS OF THE SECURITIES ACT OF 1933 FROMREGISTRATION AS AMENDED (“ACT”), AND HAVE BEEN ISSUED IN RELIANCE UPON THEEXEMPTION, SPECIFIED IN SECTION 4(2) OF THE ACT AND RULE 506 OFREGULATION D PROMULGATED PURSUANT THERETO. WITHOUT SUCH REGISTRATION, SUCH SECURITIESMAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISEDISPOSED OF, EXCEPT UPON DELIVERY TO THE COMPANY AND ITS TRANSFER AGENT OF ANOPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT THAT SUCHREGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER; OR THE SUBMISSION TO THECOMPANY OR ITS TRANSFER AGENT OF SUCH OTHER EVIDENCE AS MAY BESATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT TO THE EFFECT THAT ANY SUCHTRANSFER SHALL NOT BE IN VIOLATION OF THE ACT, APPLICABLE STATE SECURITIES LAWSOR ANY RULE OR REGULATION PROMULGATED PURSUANT THERETO.**

 

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

 

**1**. **EXERCISE OF WARRANTS**

 

**Exercise****of Warrants.** TheWarrants may be exercised by the Holder, in whole or in part (but not as to afractional share of Common Stock), by surrender of this Warrant Agreement atthe principal office of the Company located at 381 Plantation Street,Worcester, MA 01605 (or such other office or agency of the Company as may bedesignated by notice in writing to the Holder at the address of such Holderappearing on the books and records of the Company), with the appropriate formattached hereto duly exercised, at any time within the period of April 1,2005 through April 1, 2010 (the “Exercise Period”) and by payment to theCompany by certified check or bank draft of the purchase price for such sharesof the Common Stock or an election to exercise the warrants on a cashlessbasis. The Company agrees that the shares of Common Stock so purchased shall bedeemed to be issued to the Holder as the record owner of such shares of CommonStock as of the close of business on the date on which the Warrant Agreementshall have been surrendered and payment made for such shares of Common Stock orthe cashless exercise option is duly exercised. Certificates representing theshares of Common Stock so purchased shall be delivered to the Holder promptlyand in no event later than ten(10) days after the Warrants shall have beenso exercised. The Company shall be responsible for any damages caused as adirect result of a failure to deliver certificates on a timely basis.

 

----

 

ThisWarrant Agreement is entered into pursuant to that certain Settlement Agreementdated as of January 28, 2005, by and among the Company and the Holder, andis subject to the provisions thereof.

 

**2. ADJUSTMENTS AND NOTICES**

 

**A. Adjustments.**The Exercise Price and the number of shares of Common Stock issuable uponexercise of each Warrant shall be subject to adjustment from time to time, asfollows:

 

**(1) Stock Dividends; Stock Splits; Reverse Stock Splits; andReclassifications.** In theevent 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 upon exerciseof each Warrant immediately prior to the record date for such Adjustment Eventshall be adjusted so that the Holder shall thereafter be entitled to receivethe number of shares of Common Stock or other securities of the Company (suchother securities thereafter enjoying the rights of shares of Common Stockpursuant to this Warrant Agreement) that such Holder would have owned or havebeen entitled to receive after the happening of such Adjustment Event, had suchWarrant been exercised immediately prior to the happening of such AdjustmentEvent or any record date with respect thereto. An adjustment made pursuant tothis Section 2A(1) shall become effective immediately after theeffective 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 CommonStock purchasable 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 ordecease of at least one percent (1%) in the number of shares of Common Stockpurchasable upon an exercise of each Warrant; provided, however, that anyadjustments which by reason of this Section 2A(3) are not required tobe made shall be carried forward and taken into account in any subsequentadjustment. All calculations shall be made to the nearest full share.

 

**B. Notice of Adjustment.** Whenever the number of shares of Common Stock purchasable upon theexercise of each Warrant or the Exercise Price is adjusted, as herein

 

2

----

 

provided,the Company shall promptly notify the Holder in writing (such writing referredto as an “Adjustment Notice”) of such adjustment or adjustments and shalldeliver to the Holder a certificate of a firm of independent public accountantsselected by the Board of Directors of the Company (who may be the regular accountantsemployed by the Company) or of the Independent Financial Expert, if any, whichmakes a determination of Current Market Value with respect to any suchadjustment setting forth the number of shares of Common Stock purchasable uponthe exercise of each Warrant and the Exercise Price after such adjustment,setting forth a brief statement of the facts requiring such adjustment andsetting forth the computation by which such adjustment 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, Liquidation or WindingUp.**The Company shallcause to be mailed (by first class mail, postage prepaid) to the Holder noticeof the record date for any dividend, distribution or payment, in cash or inkind (including, without limitation, evidence of indebtedness and assets), withrespect to shares of Common Stock at least twenty (20) calendar days before anysuch date. In the event that at any time after the date hereof, there shall bea voluntary or involuntary dissolution, liquidation or winding up of theCompany, 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 ofthe Company, at the earliest practicable time (and, in any event, not less thantwenty (20) calendar days before any date set for definitive action), notice ofthe 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 dateas of which the holders of the shares of Common Stock of record or othersecurities underlying the Warrants shall be entitled to receive such dividend,money or the property deliverable upon such dissolution, liquidation or windingup, as the case may be (the “Entitlement Date”). In the case of a distributionof evidence of indebtedness or assets (other than in dissolution, liquidationor winding up), if the Holder elects to exercise the Warrants in accordancewith Section 1 of this Warrant Agreement and become a holder of the CommonStock on the Entitlement Date, the Holder shall thereafter receive the evidenceof 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 CommonStock on the exercise of the Warrants. If more than one Warrant shall bepresented for exercise in full at the same time by the same holder, the numberof full shares of Common Stock which shall be issuable upon such exercise shallbe computed on the basis of the aggregate number of whole shares of CommonStock purchasable on exercise of the Warrants so presented. If any fraction ofa share of Common Stock would, except for the provisions of thisSection 2E be issuable on the exercise of the Warrants (or specifiedproportion thereof), the Company shall pay an amount in cash calculated by itto be equal to the then fair value of one share of Common Stock, based upon theaverage closing price of the Common Stock on the OTC Bulletin Board (or otherexchange if the Common Stock

 

3

----

 

becomeslisted on an exchange) for the thirty (30) days preceding the date ofdetermination, multiplied by such fraction computed to the nearest whole cent.

 

**3. RESERVATION AND AUTHORIZATION OF COMMON STOCK**

 

TheCompany covenants and agrees (a) that all shares of Common Stock which maybe issued upon the exercise of the Warrants will, upon issuance, be validlyissued, fully paid and nonassessable and free of all insurance or transfertaxes, liens and charges with respect to the issue thereof; (b) thatduring the Exercise Period, the Company will at all times have authorized, andreserved 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 toensure that the shares of Common Stock issuable upon the exercise of theWarrants may be so issued without violation of any applicable law orregulation, or any requirements of any domestic securities exchange upon whichany capital stock of the Company may be listed; provided, however, that nothingcontained herein shall impose upon the Company any obligation to register theWarrants or the Common Stock pursuant applicable securities laws. In the eventthat any securities of the Company, other than the Common Stock, are issuableupon exercise of the Warrants, the Company will take or refrain from taking anyaction referred to in clauses (a) through (c) of this Section 3as though such clauses applied, mutatis mutandis, to such other securities thenissuable upon the exercise the Warrants.

** **

**4. NO VOTING RIGHTS**

 

ThisWarrant Agreement shall not entitle the Holder to any voting rights or otherrights as a stockholder of the Company.

 

**5. CALL OF WARRANTS BY THE COMPANY**

 

TheCompany shall have the right to force the purchase, at the Exercise Price, ofany or all Warrants on or after the date (the “Call Date”) on which: (i) theprice (“price” shall be determined by taking the average between the bid andask prices over the preceding 30 day period) of the Company’s common stock asreported on the Over the Counter Bulletin Board, or other nationally recognizedexchange, as the case may be, equals or exceeds $3.17 per share; and(ii) the average trading volume of the Company’s common stock on the Overthe Counter Bulletin Board or other nationally recognized exchange, as the casemay be, equals or exceeds 20,000 shares per day over the previous 30 dayperiod, (collectively, the “Conditions to Call”). Should the Company determinethat the Conditions to Call have been satisfied, the Company shall provide theHolder with written notice of its intent to call the warrants. The Holder shallhave ten (10) days from the date appearing on such notice to exercise theWarrants as specified herein and tender the Exercise Price to the Company. Ifthe Holder fails to exercise the warrants within the specified period, allWarrants issued in the name of Holder shall, without any other action by theCompany, terminate.

 

**6. EXERCISE OR TRANSFER OF WARRANTS OR COMMON STOCK**

 

TheHolder agrees to be obligated by any and all provisions with respect to any andall limitations, including limitations imposed by the Securities Act of 1933,as amended, regarding the Warrants and the shares of Common Stock or othersecurities issuable upon

 

4

----

 

exercise of the Warrants. The**Holderacknowledges and agrees that he or she is aware that there are substantialrestrictions on the transferability of the Warrants and the shares of CommonStock or other securities issuable upon exercise of the Warrants. Theundersigned also acknowledges and 5 agrees that he or she shall be responsiblefor compliance with all conditions on transfer imposed by a SecuritiesAdministrator of any state, province or territory and for any expenses incurredby the Company for legal and accounting services in connection with reviewingsuch a proposed transfer and issuing opinions in connection therewith.

 

**7. PIGGY-BACK REGISTRATION RIGHTS**

 

Subjectto the exceptions specified in this Section 7, in the event that theCompany decides to file a registration statement with the Securities andExchange Commission (“Commission”) pursuant to the 1933 Act, the Company shalluse its best efforts to include in that registration statement, forregistration, all or any portion of the common stock issuable upon exercise ofthese Warrants. The Company agrees to use its best efforts to prepare and filewith the Commission such amendments and supplements to the registrationstatement and the prospectus used in connection with such registrationstatement necessary to comply with the provisions of the 1933 Act and to causesuch registration statement to become effective. The Company shall pay allexpenses and fees incurred by Holder in registering all or any portion of theshares issuable upon exercise of these Warrants. The exceptions to the piggy-backregistration rights granted herein (i.e., Holder will not have the right torequest that the Company register the common stock underlying the Warrants) areas follows: (i) the registration statement filed by the Company is relatedor a condition to a secondary offering conducted by the Company; or(ii) the registration statement filed by the Company seeks to registerstock whose aggregate value (exclusive of the common stock issuable uponexercise of the Warrants) is less than Ten Million Dollars ($10,000,000).Provided, however, that the foregoing exceptions shall not apply in the eventany shares of common stock (or shares of common stock underlying warrants oroptions issued by the Company) held by directors, officers or reporting personsunder Section 16 of the Securities Exchange Act of 1934, as amended, areregistered in any such offering.

 

**8. MERGERS, CONSOLIDATIONS, ETC.**

 

Exceptas may otherwise be provided, if the Company shall merge or consolidate withanother corporation, the Holder shall thereafter have the right, upon exerciseof the rights specified in this Warrant Agreement 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 by a holder of the number of shares of CommonStock for which this Warrant Agreement might have been exercised immediatelyprior to such merger or consolidation (assuming, if applicable, that the holderof such Common Stock failed to exercise its rights of election, if any, as tothe kind or amount of shares of stock, other securities, property or cash orcombination thereof receivable upon such merger or consolidation). B. In caseof any reclassification or change of the shares of Common Stock issuable uponexercise of (other than elimination or par value, a change in par value, orfrom par value to no par value, or as the result of a subdivision orcombination of shares (which is provided for elsewhere herein), but includingany

 

5

----

 

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), but includingany reclassification of the shares of Common Stock, the Holder Shall thereafterhave the right, upon exercise hereof and payment of the Exercise Price, toreceive solely the kind and amount of shares of stock (including, ifapplicable, Common Stock), other**securities,property or cash or any combination thereof receivable upon suchreclassification, change, merger or consolidation by a**holder of thenumber of shares of Common Stock for which the rights specified in this WarrantAgreement might have been exercised immediately prior to such reclassification,change, merger or consolidation (assuming, if applicable, that the holder ofsuch Common Stock failed to exercise its rights of election, if any, as to thekind or amount of shares of stock, other securities, property or cash orcombination thereof receivable upon such reclassification, change, merger orconsolidation).

 

**10. RIGHTS****AND OBLIGATIONS****SURVIVE EXERCISE OF WARRANTS**

 

Therights and obligations of the Company, of the Holder, and of the holders ofshares of Common Stock or other securities issued upon exercise of theWarrants, specified in this Warrant Agreement shall survive the exercise of theWarrants.

 

Dated:November 30, 2004

 
|   | COMPANY                                      |
|--------|----------------------------------------------|
|   |                                         |
|   | A.C.T. HOLDINGS, INC., a  Nevada corporation |
|   |                                         |
|   | By:                                          | /s/ William M. Caldwell,  IV |   |
|   | William M. Caldwell, IV                      |   |
|   | Its Chief Executive  Officer                 |   |
|   |                                         |   |
|   | HOLDER                                       |   |
|   |                                         |   |
|   |                                         |   |
|   | /s/ Gunnar Engstrom                          |   |
|   | Gunnar Engstrom                              |

 

6

----