Document:

Exhibit 10.9

 

AGREEMENT

 

This
Agreement (“Agreement”) is made as of September 15, 2005, by and among the
following parties (collectively, the “Parties”):

 

PARTIES

 

A.                                   A.C.T.
Group, Inc., a Delaware corporation with a principal place of business in
Worcester, Massachusetts (“Group”);

 

B.                                     Advanced
Cell Technology, Inc., a Nevada corporation, with a principal place of
business in Los Angeles, California (“ACTC”).

 

C.                                     Advanced
Cell, Inc., a Delaware corporation and a wholly-owned subsidiary of ACTC,
with a principal place of business in Worcester, Massachusetts (“ACT”); and

 

RECITALS

 

1.                                       Group
issued a series of sixteen (16) separate promissory notes over the period
beginning December 23, 1999 and ending April 30, 2002, totaling
$3,975,000 in aggregate principal amount (the “Bridge Notes”) to certain
noteholders (the “Noteholders”), including Gary Aronson (“Aronson”) and John
Gorton (“Gorton”).  The transactions
resulting in the issuance of certain of the Bridge Notes involved the issuance
of warrants to purchase shares of Group.  
Group is currently in default on all Bridge Notes.  Group currently has no cash to extinguish or
reduce the amounts due under (i) the Bridge Notes, or (ii) any other
indebtedness of Group, including the indebtedness owed to Aronson and Gorton.

 

2.                                       Aronson
and Gorton have initiated lawsuits against Group, and certain other parties,
seeking to collect amounts due under their Bridge Notes and seeking other

 

 

remedies related thereto, all as
more specifically set forth in the lawsuit listed below:

 

•                  Gary D. Aronson and John Gorton v. A.C.T. Group, Inc., Advanced
Cell Technology, Inc, Michael D. West and Gunnar L. Engstrom, Worcester, Massachusetts Superior Court, No. 2004-CV-00523

 

The
foregoing actions are hereinafter collectively referred to as the “Bridge Note
Litigation” and the underlying claims and causes of action in such actions are
referred to as the ”Aronson/Gorton Claims.” 
Aronson and Gorton have received a judgment in their favor against Group
in connection with the Bridge Note Litigation.

 

3.                                       The existence of
the Bridge Note Litigation, the status of the Bridge Notes held by Aronson and
Gorton and the uncertainty surrounding the judgment of the Bridge Note
Litigation continue to have an adverse effect upon the stability of ACTC and
its financing activities.

 

4.                                       Therefore,
pursuant to the terms of that certain Settlement Agreement by and between
Aronson, Gorton, ACT, ACTC and the other parties thereto (the “Aronson/Gorton
Settlement Agreement”), ACTC has agreed to settle the Bridge Note Litigation by
Aronson and Gorton assigning their respective Bridge Notes and the
Aronson/Gorton Claims to ACTC in exchange for the issuance by ACTC of ACTC
cash, notes and warrants (collectively, the “Settlement Payments”) to Aronson
and Gorton, as more fully described in the Aronson/Gorton Settlement Agreement.

 

5.                                       As
of the date of this agreement, ACTC has a net liability to Group in the amount
of $599,581 (“ACTC Obligations”), consisting of a Note Payable of $1,000,000,
and related accrued interest of $381,877, owed to Group by ACTC, offset by an
Intercompany Receivable due to ACTC from Group in the amount of $782,295.  Additionally, as more fully described above,
ACTC has agreed to (i) extinguish in full

 

2

 

Group’s obligations of indebtedness to Aronson and Gorton, and (ii) make
the Settlement Payments to Aronson and Gorton of $332,524 cash and $600,000 in
Notes Payable.  In addition, as part of
the settlement, ACTC has issued a Warrant to purchase 422,727 shares of ACTC
Common Stock at $2.20 per share, resulting in a Black Scholes charge to ACTC of
$469,966.  The aggregate amount related
to Settlement Payments, including cash, notes and Black Scholes value of
warrants issued (“Group Obligations”) is $1,402,490. As summarized in Exhibit A
to this agreement, there is an existing intercompany debt owed to ACTC by Group
of $802,909, comprised of the difference between the Group Obligations and the
ACT Obligations (such difference hereinafter referred to as the “Inter-Company
Balance”), and, each Party desires to settle the Inter-Company Balance in
conjunction with the settlement of the Bridge Note Litigation.

 

6.                                       Therefore,
the Parties desire to provide for the extinguishment of the Inter-Company Balance
in accordance with the terms of this Agreement.

 

AGREEMENT

 

In
consideration of the foregoing, and the mutual agreements set forth herein, the
parties agree as follows:

 

1.                                       Definitions.  All terms defined in the sections of this
Agreement entitled “Parties” and “Recitals” shall have the meanings set forth
therein.  In addition to any definitions
set forth therein, the following terms shall be defined as set forth below.

 

“Affiliate”
or “Affiliates” means any person or entity controlling, controlled by, or under
common control with another such person or entity.  “Control” as used herein shall mean any one
or more of: (i) the possession, direct or indirect, of the power to direct
or cause the direction, of the management and policies of such controlled person
or

 

3

 

entity; (ii) the ownership, directly or indirectly, of a
sufficient amount of the voting securities of, or possession of the right to
vote in, the ordinary direction of an entity’s affairs, and (iii) in the
case of a partnership, limited liability company or similar entity, the term
Affiliate shall also include any person or entity controlling or controlled by
or under common control with any general partner, manager or person with
similar status in the partnership, limited liability company or similar entity.

 

“Effective
Date” means and refers to the later of (i) the date of this Agreement, or (ii) the
full and final settlement of the Bridge Note Litigation related to the Bridge
Notes held Gary D. Aronson and John Gorton, or any assignees thereof.

 

“Plaintiffs”
means the plaintiffs and all Affiliates thereof in the Bridge Note Litigation
as of the Release Date.

 

“Release
Date” is defined in Section 3 hereof.

 

2.                                       Offset
Computation between Group, ACTC and ACT.

 

(a)                                  Transfer
of ACTC Shares by Group.  In order to
settle and extinguish the Inter-Company Balance, Group hereby agrees that, in
connection with the effectuation of its proposed liquidation, Group will
transfer to ACTC 352,153 shares of common stock, par value $0.001 per share
(“Common Stock”), of ACTC.  Attached
hereto and incorporated herein by reference is Exhibit A, which
sets forth the schedule (the “Offset Schedule”) identifying the ACT
Obligations, the Group Obligations, and the agreed-upon method by which the
parties computed the Inter-Company Balance and determined the number of shares
of Common Stock to be issued by Group to ACTC hereunder.  The Offset Schedule also provides all of
the relevant financial and related information concerning the Inter-Company
Balance.

 

4

 

(b)                                 Representations
Regarding Offset Schedule.  Group,
ACTC and ACT each hereby represents that it has carefully reviewed the Offset Schedule and
agrees that (i) the Offset Schedule accurately reflects the status of
the Inter-Company Balance on the date hereof, (ii) accurately and
completely summarizes Settlement Payments related to the Aronson and Gorton
Settlement, including Black Scholes value of Warrants issued by ACTC and (iii) other
than as set forth on the Offset Schedule, there is no additional indebtedness
between (A) Group and (B) ACTC and/or ACT.

 

(c)                                  Post-Closing
Reconciliation.  The Intercompany
Receivable includes an estimate of additional costs in the amount of approximately
$83,000 that may be incurred by ACTC in connection with finalizing the various
transactions related to this Agreement and the Bridge Note Litigation (the
“Expense Withhold”).   Accordingly,
ninety (90) days following the date of this Agreement, the Parties agree to
reconcile the Expense Withhold and in the event ACTC has not incurred the full
amount of the Expense Withhold, ACTC shall remit (by ACTC check) the difference
between the Expense Withhold and the actual expense incurred by ACTC.

 

3.                                       Releases.  In consideration of this Agreement, the
following releases shall immediately and without further action on the part of
any party become fully effective.

 

(a)                                  Group’s
Release.  Group does for itself, and
its shareholders, directors, officers, agents, employees, managers, Affiliates,
owners, members and other persons with any direct or indirect ownership
interests in, Group, and their respective predecessors, successors, assigns and
Affiliates (collectively, the “Group Parties”), hereby release, acquit and
forever discharge ACTC and ACT, and all of their respective past, current and
future shareholders, directors, officers, agents, employees, managers,

 

5

 

Affiliates, owners, members and other persons with direct or indirect
ownership interests in such Parties and the respective successors, assigns and
Affiliates of such persons (collectively, the “Group Releasees”), of and from
any and all debts (including without limitation any intercompany debts described
in this Agreement or in Exhibit A), demands, damages, liabilities,
claims or causes of action of any kind or nature, whether legal or equitable,
direct or indirect, known or unknown, including without limitation third-party
claims for indemnity, contribution, and any other action or cause of action,
that any of the Group Parties now has or ever may have against any of the Group
Releasees, on any legal or equitable theory of any nature whatsoever, including
breach or violation of contract, tort, breach of fiduciary duty, breach of
statutory obligations, breach of directors’ duties, violation of law, rule or
regulation, failure to act in good faith or any other cause of action in law or
equity; provided, however, that such release shall not apply to any breach of
the terms of this Agreement by any of the Group Releasees.

 

 (b)                              ACTC’s
and ACT’s Release.  Upon receipt of
the shares of Common Stock by ACTC in accordance with Section 2(a) above,
each of ACTC and ACT does for itself, and its shareholders, directors,
officers, agents, employees, managers, Affiliates, owners, members and other
persons with any direct or indirect ownership interests in, ACTC and ACT, and
their respective predecessors, successors, assigns and Affiliates
(collectively, the “ACT Parties”), hereby release, acquit and forever discharge
Group, and all of its respective past, current and future shareholders,
directors, officers, agents, employees, managers, Affiliates, owners, members
and other persons with direct or indirect ownership interests in Group and its
respective successors, assigns and Affiliates of such persons (collectively,
the “ACT Releasees”), of and from any and all debts

 

6

 

(including without limitation any intercompany debts described in this
Agreement or in Exhibit A), demands, damages, liabilities, claims
or causes of action of any kind or nature, whether legal or equitable, direct
or indirect, known or unknown, including without limitation third-party claims
for indemnity, contribution, and any other action or cause of action, that any
of the ACT Parties now has or ever may have against any of the ACT Releasees,
on any legal or equitable theory of any nature whatsoever, including breach or
violation of contract, tort, breach of fiduciary duty, breach of statutory
obligations, breach of directors’ duties, violation of law, rule or
regulation, failure to act in good faith or any other cause of action in law or
equity; provided, however, that such release shall not apply to any breach of
the terms of this Agreement by any of the ACT Releasees.

 

4.                                       Miscellaneous.

 

(a)                                  Integration.
This Agreement and its exhibits and attachments constitute the entire agreement
among the Parties and no representations, warranties or inducements have been
made to any Party concerning this Agreement or its exhibits and attachments
other than the representations, warranties and covenants contained and
memorialized in such documents.

 

(b)                                 Drafting.
The Parties agree that no single party shall be deemed to have drafted this
Agreement, or any portion thereof, for purpose of the invocation of contra
proferentum. This Agreement is a collaborative effort of the Parties and shall
be construed as such.

 

(c)                                  Successors.
This Agreement shall be binding upon and inure to the benefit of the heirs,
successors and assigns of the Parties thereto.

 

7

 

(d)                                 Interpretation
and Governing Law. All terms and conditions of this Agreement and the
exhibits and attachments shall be governed by and interpreted according to the
laws of the State of Delaware, without reference to its conflict of law
provisions.

 

(f)                                    Fair &
Reasonable. The Parties believe this Agreement is fair and reasonable, in
the best interest of all Parties, and have arrived at this Agreement as a
result of extensive arms-length negotiations.

 

(g)                                 Counterparts.
This Agreement may be executed in one or more counterparts.  All executed counterparts and each of them
shall be deemed to be one and the same instrument provided that counsel for the
Parties to this Agreement shall exchange among themselves original signed
counterparts.  This Agreement shall be
effective upon execution and delivery by Group, ACTC or ACT.

 

(h)                                 Independent
Counsel.  Each Party to this
Agreement represents that it has been represented by independent counsel in the
negotiation and execution of this Agreement and has performed all desired and
necessary due diligence prior to the execution of this Agreement.  The individuals executing this Agreement
represent that they have full power and authority to execute this document on
behalf of such Party.

 

[SIGNATURE PAGE FOLLOWS]

 

8

 

IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their duly authorized representatives as of
the day and year first above written.

 

 

	
  WITNESS:

  	
  A.C.T. GROUP,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bernard Fung

  	
   

  
	
   

  	
  Its: 

  	
  Director

  	
   

  
	
   

  	
   

  	
  Bernard Fung

  	
   

  
	
   

  	
   

  
	
   

  	
  ADVANCED CELL,
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William M. Caldwell, IV

  	
   

  
	
   

  	
  Its:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ADVANCED CELL
  TECHNOLOGY, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William M. Caldwell, IV

  	
   

  
	
   

  	
  Its:EXHIBIT 4.9

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
     REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933
     ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR
     ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR
     OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT
     THERETO IS EFFECTIVE UNDER THE 1933 ACT AND ANY APPLICABLE STATE
     SECURITIES LAWS, OR (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION
     UNDER THE 1933 ACT.

     IN ADDITION, A COMMON STOCK PURCHASE AGREEMENT DATED AS OF MAY 12,
     2005 (THE "PURCHASE AGREEMENT"), A COPY OF WHICH MAY BE OBTAINED FROM
     THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICE, CONTAINS CERTAIN
     ADDITIONAL AGREEMENTS BETWEEN THE PARTIES WITH RESPECT TO THIS
     WARRANT.

                     ---------------------------------------

                                 eNucleus, Inc.
                          COMMON STOCK PURCHASE WARRANT

Number of Shares:  2,000,000                 Holder: Barron Partners LP
                                                c/o  Barron Capital Advisors LLC

Original Issue Date:  May 12, 2005            Managing Partner
                                                Attn: Andrew Barron Worden
                                                      30 Fifth Avenue, 9th Floor
Expiration Date: May 12, 2010                 New York NY 10019
                                                      tel 212-659-7790
Exercise Price per Share: $.35                     fax 646-607-2223

eNucleus, Inc, a company organized and existing under the laws of the State of
Delaware (the "Company"), hereby certifies that, for value received, BARRON
PARTNERS LP, or its registered assigns (the "Warrant Holder"), is entitled,
subject to the terms set forth below, to purchase from the Company up to
2,000,000 shares (as adjusted from time to time as provided in Section 7, the
"Warrant Shares") of common stock, $.001 par value (the "Common Stock"), of the
Company at a price of $.35 per Warrant Share (as adjusted from time to time as
provided in Section 7, the "Exercise Price"), at any time and from time to time
from and after the date thereof and through and including 5:00 p.m. New York
City time on May 12, 2010 (or eighteen months of effectiveness of a Registration
Statement subsequent to the issuance hereof (the "Expiration Date"), and subject
to the following terms and conditions:

     1. Registration of Warrant. The Company shall register this Warrant upon
records to be maintained by the Company for that purpose (the "Warrant
Register"), in the name of the record Warrant Holder hereof from time to time.
The Company may deem and treat the registered Warrant Holder of this Warrant as
the absolute owner hereof for the purpose of any exercise hereof or any
distribution to the Warrant Holder, and for all other purposes, and the Company
shall not be affected by notice to the contrary.

     2. Investment Representation. The Warrant Holder by accepting this Warrant
represents that the Warrant Holder is acquiring this Warrant for its own account
or the account of an affiliate for investment purposes and not with the view to
any offering or distribution and that the Warrant Holder will not sell or
otherwise dispose of this Warrant or the underlying Warrant Shares in violation
of applicable securities laws. The Warrant Holder acknowledges that the

<PAGE>

certificates representing any Warrant Shares will bear a legend indicating that
they have not been registered under the United States Securities Act of 1933, as
amended (the "1933 Act") and may not be sold by the Warrant Holder except
pursuant to an effective registration statement or pursuant to an exemption from
registration requirements of the 1933 Act and in accordance with federal and
state securities laws. If this Warrant was acquired by the Warrant Holder
pursuant to the exemption from the registration requirements of the 1933 Act
afforded by Regulation S thereunder, the Warrant Holder acknowledges and
covenants that this Warrant may not be exercised by or on behalf of a Person
during the one year distribution compliance period (as defined in Regulation S)
following the date hereof. "Person" means an individual, partnership, firm,
limited liability company, trust, joint venture, association, corporation, or
any other legal entity.

     3. Validity of Warrant and Issue of Shares. The Company represents and
warrants that this Warrant has been duly authorized and validly issued and
warrants and agrees that all of Common Stock that may be issued upon the
exercise of the rights represented by this Warrant will, when issued upon such
exercise, be duly authorized, validly issued, fully paid and nonassessable and
free from all taxes, liens and charges with respect to the issue thereof. The
Company further warrants and agrees that during the period within which the
rights represented by this Warrant may be exercised, the Company will at all
times have authorized and reserved a sufficient number of Common Stock to
provide for the exercise of the rights represented by this Warrant.

     4. Registration of Transfers and Exchange of Warrants.

        a. Subject to compliance with the legend set forth on the face of this
Warrant, the Company shall register the transfer of any portion of this Warrant
in the Warrant Register, upon surrender of this Warrant with the Form of
Assignment attached hereto duly completed and signed, to the Company at the
office specified in or pursuant to Section 9. Upon any such registration or
transfer, a new warrant to purchase Common Stock, in substantially the form of
this Warrant (any such new warrant, a "New Warrant"), evidencing the portion of
this Warrant so transferred shall be issued to the transferee and a New Warrant
evidencing the remaining portion of this Warrant not so transferred, if any,
shall be issued to the transferring Warrant Holder. The acceptance of the New
Warrant by the transferee thereof shall be deemed the acceptance of such
transferee of all of the rights and obligations of a Warrant Holder of a
Warrant.

        b. This Warrant is exchangeable, upon the surrender hereof by the
Warrant Holder to the office of the Company specified in or pursuant to Section
9 for one or more New Warrants, evidencing in the aggregate the right to
purchase the number of Warrant Shares which may then be purchased hereunder. Any
such New Warrant will be dated the date of such exchange.

     5. Exercise of Warrants.

        a. Upon surrender of this Warrant with the Form of Election to Purchase
attached hereto duly completed and signed to the Company, at its address set
forth in Section 9, and upon payment and delivery of the Exercise Price per
Warrant Share multiplied by the number of Warrant Shares that the Warrant Holder
intends to purchase hereunder, in lawful money of the United States of America,
in cash or by certified or official bank check or checks, to the Company, all as
specified by the Warrant Holder in the Form of Election to Purchase, the Company
shall promptly (but in no event later than 7 business days after the Date of
Exercise (as defined herein)) issue or cause to be issued and cause to be
delivered to or upon the written order of the Warrant Holder and in such name or

<PAGE>

names as the Warrant Holder may designate (subject to the restrictions on
transfer described in the legend set forth on the face of this Warrant), a
certificate for the Warrant Shares issuable upon such exercise, with such
restrictive legend as required by the 1933 Act. Any person so designated by the
Warrant Holder to receive Warrant Shares shall be deemed to have become holder
of record of such Warrant Shares as of the Date of Exercise of this Warrant.

        b. A "Date of Exercise" means the date on which the Company shall have
received (i) this Warrant (or any New Warrant, as applicable), with the Form of
Election to Purchase attached hereto (or attached to such New Warrant)
appropriately completed and duly signed, and (ii) payment of the Exercise Price
for the number of Warrant Shares so indicated by the Warrant Holder to be
purchased.

        c. This Warrant shall be exercisable at any time and from time to time
for such number of Warrant Shares as is indicated in the attached Form of
Election To Purchase. If less than all of the Warrant Shares which may be
purchased under this Warrant are exercised at any time, the Company shall issue
or cause to be issued, at its expense, a New Warrant evidencing the right to
purchase the remaining number of Warrant Shares for which no exercise has been
evidenced by this Warrant.

        d. (i) Notwithstanding anything contained herein to the contrary, the
holder of this Warrant may, at its election exercised 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 = (A x (B - C))/B

        (ii) For purposes of the foregoing formula:

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

                           B= the last reported sale price (as reported by
                           Bloomberg) of the Common Stock on the trading day
                           immediately preceding the date of the Exercise
                           Notice.

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

        e. The holder of this Warrant agrees not to elect a Cashless Exercise
for a period of one year. The holder of this Warrant also agrees not to elect a
Cashless Exercise so long as there is an effective registration statement for
the Warrant Shares.

     6. Maximum Exercise. The Warrant Holder shall not be entitled to exercise
this Warrant on a Date of Exercise in connection with that number of shares of
Common Stock which would be in excess of the sum of (i) the number of shares of
Common Stock beneficially owned by the Warrant Holder and its affiliates on an
exercise date, and (ii) the number of shares of Common Stock issuable upon the
exercise of this Warrant with respect to which the determination of this
limitation is being made on an exercise date, which would result in beneficial

<PAGE>

ownership by the Warrant Holder and its affiliates of more than 4.99% of the
outstanding shares of Common Stock on such date. For the purposes of the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation 13d-3 thereunder. Subject to the foregoing, the Warrant
Holder shall not be limited to aggregate exercises which would result in the
issuance of more than 4.99%. The restriction described in this paragraph may be
revoked upon sixty-one (61) days prior notice from the Warrant Holder to the
Company. The Warrant Holder may allocate which of the equity of the Company
deemed beneficially owned by the Warrant Holder shall be included in the 4.99%
amount described above and which shall be allocated to the excess above 4.99%.

     7. Adjustment of Exercise Price and Number of Shares. The character of the
shares of stock or other securities at the time issuable upon exercise of this
Warrant and the Exercise Price therefore, are subject to adjustment upon the
occurrence of the following events, and all such adjustments shall be
cumulative:

        a. Adjustment for Stock Splits, Stock Dividends, Recapitalizations, Etc.
The Exercise Price of this Warrant and the number of shares of Common Stock or
other securities at the time issuable upon exercise of this Warrant shall be
appropriately adjusted to reflect any stock dividend, stock split, combination
of shares, reclassification, recapitalization or other similar event affecting
the number of outstanding shares of stock or securities.

        b. Adjustment for Reorganization, Consolidation, Merger, Etc. In case of
any consolidation or merger of the Company with or into any other corporation,
entity or person, or any other corporate reorganization, in which the Company
shall not be the continuing or surviving entity of such consolidation, merger or
reorganization (any such transaction being hereinafter referred to as a
"Reorganization"), then, in each case, the holder of this Warrant, on exercise
hereof at any time after the consummation or effective date of such
Reorganization (the "Effective Date"), shall receive, in lieu of the shares of
stock or other securities at any time issuable upon the exercise of the Warrant
issuable on such exercise prior to the Effective Date, the stock and other
securities and property (including cash) to which such holder would have been
entitled upon the Effective Date if such holder had exercised this Warrant
immediately prior thereto (all subject to further adjustment as provided in this
Warrant).

        c. Certificate as to Adjustments. In case of any adjustment or
readjustment in the price or kind of securities issuable on the exercise of this
Warrant, the Company will promptly give written notice thereof to the holder of
this Warrant in the form of a certificate, certified and confirmed by the Board
of Directors of the Company, setting forth such adjustment or readjustment and
showing in reasonable detail the facts upon which such adjustment or
readjustment is based.

     8. Fractional Shares. The Company shall not be required to issue or cause
to be issued fractional Warrant Shares on the exercise of this Warrant. The
number of full Warrant Shares that shall be issuable upon the exercise of this
Warrant shall be computed on the basis of the aggregate number of Warrants
Shares purchasable on exercise of this Warrant so presented. If any fraction of
a Warrant Share would, except for the provisions of this Section 8, be issuable
on the exercise of this Warrant, the Company shall, at its option, (i) pay an
amount in cash equal to the Exercise Price multiplied by such fraction or (ii)
round the number of Warrant Shares issuable, up to the next whole number.

<PAGE>

     9. Sale or Merger of the Company. In the event of a sale of all or
substantially all of the assets of the Company or the merger or consolidation of
the Company in a transaction in which the Company is not the surviving entity,
the 4.99% restriction will immediately be released and the Warrant Holder will
have the right to exercise the warrants concurrent with the sale.

     10. Notice of Intent to Sell or Merge the Company. The Company will give
Warrant Holder seventy (70) days notice before the event of a sale of all or
substantially all of the assets of the Company or the merger or consolidation of
the Company in a transaction in which the Company is not the surviving entity

     11. Issuance of Substitute Warrant. In the event of a merger,
consolidation, recapitalization or reorganization of the Company or a
reclassification of Company shares of stock, which results in an adjustment to
the number of shares subject to this Warrant and/or the Exercise Price
hereunder, the Company agrees to issue to the Warrant Holder a substitute
Warrant reflecting the adjusted number of shares and/or Exercise Price upon the
surrender of this Warrant to the Company.

     12. Notice. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given (i) on the date they are
delivered if delivered in person; (ii) on the date initially received if
delivered by facsimile transmission followed by registered or certified mail
confirmation; (iii) on the date delivered by an overnight courier service; or
(iv) on the third business day after it is mailed by registered or certified
mail, return receipt requested with postage and other fees prepaid as follows:

                        If to the Company:
                        ------------------

                        eNucleus, Inc.
                        4000 Main Street
                        Suite 214
                        Bay Harbor, MI 49770
                        tel 231-439-2705

                        If to the Warrant Holder:
                        -------------------------

                        Barron Partners LP
                        Barron Capital Advisors LLC,
                        Managing Partner
                        Attn: Andrew Barron Worden
                        730 Fifth Avenue, 9th Floor
                        New York NY 10019
                        tel 212-659-7790

<PAGE>

     13. Miscellaneous.

         a. This Warrant shall be binding on and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. This
Warrant may be amended only by a writing signed by the Company and the Warrant
Holder.

         b. Nothing in this Warrant shall be construed to give to any person or
corporation other than the Company and the Warrant Holder any legal or equitable
right, remedy or cause of action under this Warrant; this Warrant shall be for
the sole and exclusive benefit of the Company and the Warrant Holder.

         c. This Warrant shall be governed by, construed and enforced in
accordance with the internal laws of the State of Delaware without regard to the
principles of conflicts of law thereof.

         d. The headings herein are for convenience only, do not constitute a
part of this Warrant and shall not be deemed to limit or affect any of the
provisions hereof.

         e. In case any one or more of the provisions of this Warrant shall be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Warrant shall not in any way be affected
or impaired thereby and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonably
substitute therefore, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.

         f. The Warrant Holder shall not, by virtue hereof, be entitled to any
voting or other rights of a shareholder of the Company, either at law or equity,
and the rights of the Warrant Holder are limited to those expressed in this
Warrant.

     IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
by the authorized officer as of the date first above stated.

ENUCLEUS INC., a Delaware corporation

By:
     -----------------------------
Name:  John Paulsen
Its:   Chief Executive Officer

<PAGE>

                          FORM OF ELECTION TO PURCHASE

(To be executed by the Warrant Holder to exercise the right to purchase shares
of Common Stock under the foregoing Warrant)

To:  eNucleus, Inc.:

In accordance with the Warrant enclosed with this Form of Election to Purchase,
the undersigned hereby irrevocably elects to purchase ______________ shares of
Common Stock ("Common Stock"), $.001 par value, of eNucleus, Inc and encloses
the warrant and $____ for each Warrant Share being purchased or an aggregate of
$________________ in cash or certified or official bank check or checks, which
sum represents the aggregate Exercise Price (as defined in the Warrant) together
with any applicable taxes payable by the undersigned pursuant to the Warrant.

The undersigned requests that certificates for the shares of Common Stock
issuable upon this exercise be issued in the name of:

_______________________________________

_______________________________________

_______________________________________

(Please print name and address)

 ______________________________________
(Please insert Social Security or Tax Identification Number)

If the number of shares of Common Stock issuable upon this exercise shall not be
all of the shares of Common Stock which the undersigned is entitled to purchase
in accordance with the enclosed Warrant, the undersigned requests that a New
Warrant (as defined in the Warrant) evidencing the right to purchase the shares
of Common Stock not issuable pursuant to the exercise evidenced hereby be issued
in the name of and delivered to:

_______________________________________

_______________________________________

_______________________________________
(Please print name and address)

Dated:________________            Name of Warrant Holder:

                                       (Print)_________________________________

                                       (By:) __________________________________

                                       (Name:)_________________________________

                                       (Title:)________________________________

                                       Signature must conform in all respects
                                       to name of Warrant Holder as specified
                                       on the face of the Warrant

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