Exhibit
10.1


 


December 31,
2006


 


Re:                               Letter
Agreement Regarding Warrant Agreement (the “Letter Agreement”)


 


To Advanced Cell Technology:


 


Reference is made to the Warrant Agreement,
dated November 26, 2004 (the “Warrant Agreement”), among Advanced Cell
Technology, Inc. (the “Company”) and the undersigned (the “Holder”).


 


1.           Amendment to Warrant Agreement. The
Company and the Holder hereby agree that, upon execution of this Letter
Agreement, the Warrant Agreement will be deemed amended in accordance with the
following:


 


(a)           Extension
of Exercise Period. The period during which the Holder is entitled to
exercise its Warrant Agreement shall be extended until December 31, 2010.


 


(b)           Adjustment
of Exercise Price Upon Change of Control. In the event of a Change of
Control (as defined in the Company’s stock incentive plan) following the date
hereof but prior to February 1, 2009 (the “Lock-Up Expiration Date”),
the Exercise Price of the Warrant Agreement shall be adjusted to $.25.


 


2.           Lock-Up. In order to induce the Company
to extend the period during which the Holder is entitled to exercise its
Warrant Agreement and for other good and valuable consideration, from the date
hereof until the Lock-Up Expiration Date, the Holder will not (i) exercise or
attempt to exercise, in whole or in part, the Warrant Agreement, or (ii) offer,
transfer, sell, contract to sell, pledge or otherwise dispose of, (or enter
into any transaction which is designed to, or might reasonably be expected to,
result in the disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Holder or any affiliate
of the Holder or any person in privity with the Holder or any affiliate of the Holder),
directly or indirectly. In order to enforce this covenant, the Company will
impose irrevocable stop-transfer instructions preventing the transfer agent
from effecting any actions in violation of this agreement.


 


Notwithstanding any other provision in the
Warrant Agreement or this Letter Agreement, in the event of a Change of Control
(as that term is defined in the Company’s stock incentive plan), following the date
and during the term of this Letter Agreement, the Company and the Holder hereby
agree that the lock up provisions contained in this Section 2 will be suspended
and, in accordance with Section 1(b) above, the Holder shall be entitled to
exercise the Warrant Agreement at an Exercise Price of $0.25.


 


3.           Miscellaneous.


 


(a)           The
Holder acknowledges that the execution, delivery and performance of this Letter
Agreement is a material inducement to the Company to approve of the extension
of 


 

















 


the period during which the Holder is
entitled to exercise its Warrant Agreement, and the Company shall be entitled
to specific performance of my obligations hereunder. The Holder hereby
represents that the Holder has the power and authority to execute, deliver and
perform this Letter Agreement, that the Holder has received adequate
consideration therefor.


 


(b)          This
Letter Agreement may not be amended or otherwise modified in any respect
without the written consent of each of the Company and the Holder. This Letter
Agreement shall be construed and enforced in accordance with the laws of the
State of California, without regard to the principles of conflicts of laws.


 


(c)           The
agreements set forth herein shall be effective with respect to (i) the Warrant
Agreement and (ii) all outstanding warrants of the same class having a maturity
date between September 1, 2006, and December 31, 2006, provided that the holder
of such other warrants executes an agreement substantially in the form of this
Letter Agreement.


 

















 


This Letter
Agreement may be executed in two or more counterparts, all of which when taken
together may be considered one and the same agreement.


 


HOLDER


 


ANDWELL, LLC


 


	
  /s/ William M. Caldwell, IV

  	
   

  
	
  William M. Caldwell, IV

  



 


 


By signing below, the Company agrees to enforce the restrictions on
transfer set forth in this Letter Agreement.


 


ADVANCED CELL TECHNOLOGY, INC.


 


	
   

  	
  By: 

  	
  /s/ Ivan Wolkind

  	
   

  	 

	
   

  	
  Name: Ivan Wolkind

  	 

	 
	
   

  	
  Title: Vice President
  & Chief Accounting Officer