Document:

Exhibit 10.8

 

LICENSE AGREEMENT (“Agreement”), effective
as of February 25, 2008 (the “Effective Date”)

 

BETWEEN

 

Advanced
Cell Technology, Inc., a Delaware corporation with offices located at 381
Plantation Street, Worcester, Massachusetts 01605, the United States of
America, lawfully represented by its director William M. Caldwell, IV (“ACT” or “Licensor”)

 

and

 

Pharming
Technologies B.V., a private limited
liability company incorporated and existing under the laws of
the Netherlands, having its registered office at Darwinweg 24, 2333 CR Leiden, the Netherlands, lawfully represented by its directors Dr. R. Strijker and Dr. B. M.
Giannetti  (“Pharming” or  “Licensee”)

 

(Pharming and ACT
sometimes hereinafter referred to individually as a “Party” and collectively as
the “Parties”).

 

WHEREAS:

 

1.                                       Pharming and Infigen, Inc. (“Infigen”)
previously entered into a License and Settlement Agreement that was executed by
Pharming and Infigen on July 9, 2004 and July 13, 2004, respectively”),
a copy of which is attached hereto as Exhibit A (the “Original
Agreement”).

 

2.                                       Under the Original Agreement, Pharming
obtained certain exclusive and nonexclusive rights to patents owned by Infigen.

 

3.                                       Infigen ceased conducting its business, and
certain of the patents previously owned by Infigen were acquired by ACT
pursuant to a Patent Assignment Agreement (the “Assignment Agreement”) dated February 2,
2007 between ACT and Infigen.

 

4.                                       Under the Assignment Agreement, ACT agreed to
honor the Original Agreement with respect to the Infigen Patents (as defined
herein) and subject to the terms and conditions of the Assignment Agreement;
and

 

5.                                       Pharming and ACT have agreed that the
Original Agreement should be restated to clarify the Parties’ respective rights
and to reflect certain agreements reached by Pharming and ACT concerning the
patent rights previously licensed to Pharming under the Original Agreement.

 

 

DECLARE THAT THEY HAVE ENTERED INTO AGREEMENT AS FOLLOWS:

 

ARTICLE
1 - DEFINITIONS

 

For
the purposes of this Agreement, the following words and phrases shall have the
following meanings:

 

1.1                               “Infigen Patents” means the patents
and patent applications listed in Exhibit B attached hereto.  The Parties acknowledge and agree that Exhibit B
shall be updated by ACT on a yearly basis to reflect the actual status of the
Infigen Patents.

 

1.2                               “Pharming
Field” means all uses and applications in or related to non-human animals.

 

1.3                               “ACT Field” means all uses and
applications in or related to humans.

 

1.4                               “Territory” means the world.

 

1.5                               “Improvements”  means all improvements or modifications or
adaptations to or, any new application of Infigen Patents or any parts thereof
which may be made or acquired by either Party during this Agreement.

 

For
purposes of this Agreement, except as otherwise expressly provided herein or
unless the context otherwise requires:  (a) the
use herein of the plural shall include the single and vice versa
and the use of the masculine shall include the feminine; (b) unless
otherwise set forth herein, the use of the term “including” or “includes” means
“including [includes] but [is] not limited to”; and (c) the words “herein,”
“hereof,” “hereunder” and other words of similar import refer to this Agreement
as a whole and not to any particular provision. 
Additional terms may be defined throughout this Agreement.

 

ARTICLE 2 – TERMINATION OF THE ORIGINAL AGREEMENT

 

The Original Agreement is hereby terminated by mutual agreement of the
Parties and all of its provisions are hereby superseded in their entirety and
replaced by the provisions of this Agreement, including its Exhibits, provided,
however, that ACT and Pharming acknowledge, understand and agree that the
Original Agreement shall remain in force as between Pharming and Infigen with
respect to all rights, licenses (including the non-exclusive license rights of
Pharming under the Original Agreement not covered by Exhibit B and its
provisions in relation to these non-exclusive license rights) and obligations
relating to any Infigen intellectual property, including without limitation,
any patents and patent applications other than the Infigen Patents (licensed
hereunder) included in the Original Agreement. 
Nothing in this Agreement is intended to terminate or adversely affect
any rights obtained by Pharming from Infigen under the Original Agreement
except to the extent the Original Agreement is terminated by this Agreement.

 

2

 

ARTICLE 3 - 
LICENSE GRANTS AND RETAINED RIGHTS

 

3.1                               License Grant.  ACT
hereby grants to Pharming an exclusive (even excluding ACT),
sublicenseable, world-wide, royalty-free, non-terminable (by ACT) and
irrevocable license under the Infigen Patents, including Improvements, and
including any foreign counterpart applications, together with any and all
patents that have issued or in the case of applications heretofore filed, in
the future issue therefrom or whose priority date is based thereon; and all
related divisionals, continuations, national stage applications or patents
filed under the Patent Cooperation Treaty of 1978, reissues or renewals, of the
foregoing, in the Pharming Field in the Territory, to make, have made, use,
have used, sell, have sold, offer for sale, and import all products covered by
this Agreement and to use and have used the technology covered by the Infigen
Patents.

 

3.2                               Sublicenses.  Pharming shall have the right
to grant further sublicenses to or under the Infigen Patents in the Pharming
Field.

 

3.3                               Retained Rights. 
Pharming acknowledges and agrees that ACT shall retain all rights to
exploit the Infigen Patents in the ACT Field.

 

3.4                               Term of License.  The
license granted under Section 3.1 shall endure until the expiry of the
last of the Infigen Patents.

 

ARTICLE
4 - CONSIDERATION

 

4.1                                     License Fee.  Upon
execution of this Agreement, Pharming shall pay to ACT a one-time payment of
USD $260,000.00 (TWO HUNDRED SIXTY THOUSAND DOLLARS) (the “License Fee”).  The License Fee shall be via wire transfer to
ACT in accordance with the wire instructions set forth in Exhibit C
attached hereto.

 

4.2                               No Additional
Compensation.  ACT is not entitled to any
renumeration, royalty or other compensation other than as provided in Section 4.1.

 

ARTICLE 5 – PAYMENTS AND RECORDS

 

[Intentionally Omitted]

 

ARTICLE 6 - REPRESENTATIONS AND WARRANTIES

 

6.1                               ACT represents and
warrants that from the effective date of the Assignment Agreement it is the
owner of the Infigen Patents and all registration and renewal 

 

3

 

fees with regard to the Infigen Patents have been
paid and will be paid during the duration of this Agreement.

 

6.2                               ACT represents and warrants that from the effective date of the Assignment
Agreement no other patents have been transferred by Infigen to ACT than
the patents listed in Exhibit B of this Agreement.

 

6.3                               ACT represents and
warrants that except as set forth in the disclosure schedule set forth in Exhibit D
attached hereto there exist no any other licenses to use the Infigen
Patents.  ACT further represents and
warrants that it will not grant any further licenses to use Infigen Patents to
any third party

 

6.4                               ACT represents and
warrants that the execution,
delivery and performance of this Agreement by ACT (i) are within its
corporate powers, and (ii) have been duly authorized by all necessary
corporate action on ACT’s part.

 

6.5                               ACT represents to
the best of its knowledge:

 

(a)                                that the Infigen
Patents are valid or remain valid;

 

(b)                               that the practice
of the inventions disclosed in the Infigen Patents do not violate patent or
other rights of third parties;

 

(c)                                that the Infigen
Patents are not subject to any legal proceedings, litigation or interference;

 

(d)                               that since the
acquisition of the Infigen Patents by ACT the Infigen Patents have been
properly maintained and all fees due have been paid.

 

6.6                               Pharming represents
and warrants that the execution,
delivery and performance of this Agreement by Pharming (i) are within its
corporate powers, and (ii) have been duly authorized by all necessary
corporate action on Pharming’s part.

 

6.7                               Pharming hereby represents, warrants and
covenants that it shall comply in all material respects with all local, state,
federal and international laws and regulations relating to the exploitation of
the Infigen Patents, including in connection with the development, manufacture,
use, provision, and sale of products and services covered by the Infigen
Patents.

 

ARTICLE
7:  INTELLECTUAL PROPERTY RIGHTS

 

7.1                               ACT shall take all necessary actions,
including payment of registration and renewal fees, to maintain the patents
licensed hereunder and to obtain patents from pending and future
applications.  ACT shall not abandon any
such patent or allow it to expire without Pharming’s written consent.  If ACT is unable or unwilling to maintain any
patent or 

 

4

 

prosecute
a pending application which is the subject of this Agreement and Pharming does
not consent to any such patent or application being abandoned, ACT will
transfer the patent or patent application in question to Pharming free of
charge.

 

7.2                               The Parties agree to use their best efforts
to notify each other in writing without delay, and provide all relevant
information, of any infringement by a third party of the Infigen Patents or any
third party claim of invalidity or unenforceability of the Infigen
Patents.  Pharming shall have the sole
right, at its discretion and without obligation, to prosecute and defend such
claims in the Pharming Field, under its primary control and it sole expense,
employing counsel of its own choosing. 
ACT shall have the sole right, at its discretion and without obligation,
to prosecute and defend such claims in the ACT Field, under its sole primary
control and it sole expense, employing counsel of its own choosing.  ACT will permit any action or defense
hereunder to be brought in its name if required by law.

 

7.3                               If a Party elects not to exercise its right
to prosecute or take other appropriate action in connection with an
infringement or misappropriation, or elects not to defend any third party claim
of invalidity or unenforceability of, the Infigen Patents, including an
election to abandon any action or defense previously begun, or fails to take
any such action or defense within sixty (60) days of first receiving
notification of such infringement, misappropriation or claim of invalidity or
unenforceability, the other Party may do so at its own expense. In case ACT
shall be the abandoning Party, ACT will transfer the Infigen Patents in
question to Pharming free of charge.

 

7.4.                            In the event of any infringement or
misappropriation suit against a third party brought by either Party pursuant to
this Article, or the defense of any third-party claim of invalidity or
unenforceability, the Party so proceeding shall pay to the other Party all of
its reasonable costs and expenses (but not attorney’s fees) in connection with
such action and such other Party shall join in and reasonably cooperate with
respect to such action to the extent necessary to initiate and maintain it
(e.g., by providing relevant documents, witnesses and testimony, etc.).

 

7.5                               If either Party brings an action or defense
under this Article, any damages or other monetary awards recovered by that
Party shall be applied proportionately first to defray the unreimbursed costs
and expenses (including reasonable attorneys’ fees) incurred by both Parties in
the action or defense.  Any remaining
balance shall be the property of the Party bringing the action or defense.

 

7.6                               No settlement, consent judgment or other
voluntary final disposition of a suit being prosecuted by a Party under this Article may
be entered into without the consent of the other Party if such settlement,
consent judgment or other voluntary final disposition would alter, derogate or
diminish such other Party’s rights under this Agreement or otherwise materially
adversely affect such other Party, which consent shall not be unreasonably
withheld or delayed.

 

5

 

7.7                               Except as set forth in this Article, ACT will
not undertake any action that would adversely affect Pharming’s rights under
the Infigen Patents and/or under Pharming’s intellectual property rights in the
area of generation and use of transgenic cattle without the prior written
consent of Pharming, which consent shall not be unreasonably withheld.  It will not be considered a breach of this Article if
ACT gives truthful information or testimony to a third party reasonably
entitled to request and/or receive such information including, but not limited
to, testimony given in response to a lawful subpoena, requests for information
by a regulatory body, or the like.

 

7.8                               ACT shall, to the extent permitted by the
national law of relevant country(ies) register and record the license granted
hereunder in the official register of the relevant national Patent Office or
the approved authority.

 

ARTICLE
8 - CONFIDENTIALITY

 

8.1                               The Parties shall maintain the
confidentiality in respect of each others confidential information and
confidential information of third parties that is provided by each to the
other, unless the information was in the public domain at the time at which it
was provided or the information was provided to the recipient by a third party
without that third party violating a duty of confidentiality or is known to the
recipient Party and is at its free disposal prior to its receipt from the other
provided that such prior knowledge can be demonstrated by written evidence.

 

8.2                               The
obligations of confidentiality in this Article shall not prevent either
Party disclosing information to the extent required by law, regulatory
purposes, or the requirements of any Stock Exchange, provided prior written
notice is given to the other Party of such disclosure.

 

8.3                               The duty of confidentiality provided for in Section 8.1
of this Agreement shall remain in force following termination of this Agreement
for a period of five (5) years.

 

8.4                               The Parties agree that there is no necessity
to announce the signing of this Agreement in a press release, except in case Section 8.2
of this Agreement shall apply.

 

ARTICLE
9 -  TERMINATION

 

9.1                               Without prejudice to all rights and
obligations, Pharming shall be entitled to terminate this Agreement with
immediate effect by registered letter and without legal intervention if:

 

a)                                      ACT is a debtor in bankruptcy or is or will
be granted suspension of  payment; or

 

6

 

(b)                                 ACT ceases or will cease to exist or is or
will be dissolved.

 

ACT shall notify Pharming in writing promptly after:  (i) the filing by or against ACT of any
petition in bankruptcy or similar filing seeking relief from creditors; (ii) receipt
by ACT of any notice of foreclosure and/or default that could reasonably be
foreseen to have the effect of preventing Pharming from practicing the licenses
granted to it hereunder.

 

In
case Pharming shall elect not to terminate this Agreement for the reasons
mentioned in this Section 9.1 of this Agreement, ACT will transfer the
Infigen Patents to Pharming free of charge.

 

9.2                                 Without prejudice to all rights and obligations,
ACT shall be entitled to terminate this Agreement with immediate effect by
registered letter and without legal intervention if:

 

a)                                      Pharming is a debtor in bankruptcy or is or
will be granted suspension of payment; or

 

(b)                                 Pharming eases or will cease to exist or is
or will be dissolved, except in case Section 11.2 of this Agreement shall
apply.

 

Pharming shall notify ACT in writing promptly after:  (i) the filing by or against Pharming of
any petition in bankruptcy or similar filing seeking relief from creditors; (ii) receipt
by Pharming of any notice of foreclosure and/or default that could reasonably
be foreseen to have the effect of preventing Pharming from practicing the
licenses granted to it.

 

ARTICLE
10 – LIABILITY AND INDEMNITY

 

10.1                                                                          ACT shall
indemnify and hold Pharming and its affiliates harmless against all claims
which are made or brought against or incurred or suffered by Pharming arising
out of or as a result of a breach by ACT of any representation or warranty of
ACT under this Agreement, or any of ACT’s obligations under this Agreement, or
arising out of the negligence or willful misconduct of ACT.

 

10.2                                                                          Pharming shall indemnify and hold ACT and its
affiliates harmless against all claims which are made or brought against or
incurred or suffered by ACT arising from a breach by Pharming of any of its
obligations set forth in this Agreement or arising out of the death or injury
to any person or persons or out of any damage to tangible property resulting
from, or otherwise attributable to, the making, using, development, and/or sale
by Pharming of any products under this Agreement.

 

7

 

10.3                                                                         THIRD PARTY CLAIMS. Each Party shall give the
other Party prompt notice of any claim for which indemnification under this Article 10
is or may be applicable and will cooperate with the indemnifying Party in the
defense or settlement of such claim at the indemnifying Party’s expense.  The indemnifying Party shall be required to
provide and be entitled to control the defense of any claim covered hereunder
(including the right to control settlement discussions) with counsel reasonably
satisfactory to the other Party, which other Party may, at its own expense,
participate in the defense of any claim after the indemnifying Party assumes
control of the defense thereof.  No claim
that is subject to indemnification under this Article 10 shall be settled
or otherwise compromised other than by the Party defending such claim, and then
only with the prior written consent of the other party, which shall not be
unreasonably withheld or delayed; it shall not be unreasonable to withhold
consent if the settlement or compromise either (a) imposes on the
indemnified Party any liability or obligation which cannot be assumed and performed
in full by the indemnifying Party, or (b) materially adversely affects the
indemnified party or its rights hereunder. 
The failure of the indemnified Party to deliver notice to the
indemnifying Party promptly after the commencement of any such action shall not
release the indemnifying Party from any liability to the indemnified Party
under this Article 10 other than any liabilities directly attributable to
such failure.

 

10.4                                                                         LIMITATION
OF LIABILITY.  In no event shall either
Party be liable to the other for any indirect or consequential loss or damages
howsoever caused arising out of or as a result of this Agreement, howsoever the
liability  arises including (but not
limited to) breach of contract, negligence or tort or breach of any statutory
duty.

 

ARTICLE
11 -  MISCELLANEOUS

 

11.1                         Without prior written permission of Pharming
which cannot be unreasonably withheld, ACT is not entitled to transfer all (or
a part) of the rights and obligations arising from this Agreement to third
parties.

 

11.2                         Pharming  is entitled to transfer all (or a part) of the
rights and obligations arising from this Agreement to a company belonging to
the Pharming group and/or to third parties, without the permission of ACT.

 

11.3                         Pharming shall comply in all material
respects with all local, state, federal and international laws and regulations
relating to the development, manufacture, use, provision, and sale of products
under this Agreement.

 

11.4                         If any term or provision of this Agreement is
declared invalid or unenforceable for any reason, such invalidity or
unenforceability shall not affect any other provision of this Agreement, and
the Parties shall negotiate in good faith to modify the Agreement to preserve
(to the extent possible) their original intent. If the Parties fail to reach a
modified agreement within sixty (60) days after the relevant provision is held
invalid or unenforceable, then the court shall be 

 

8

 

authorized
to modify the invalid provision to the extent and in the manner necessary to
render it enforceable.

 

11.5                         This Agreement may be amended, supplemented,
or otherwise modified only by means of a written instrument signed by both
Parties.  The failure of either Party to
assert a right hereunder or to insist upon compliance with any term or
condition of this Agreement shall not constitute a waiver of that right or
excuse a similar subsequent failure to perform any such term or condition by
the other Party.

 

11.6                         This Agreement shall be governed and construed in accordance with the
laws of the Netherlands. Any dispute concerning this Agreement shall be
exclusively judged by the competent court of the city of the Hague, the
Netherlands.

 

11.7                         The licenses granted hereunder are effective
and fully compliant with 11 USC Section 365(n) and 11 USC Section 362
of the United States Bankruptcy code such that Pharming can fully exploit such
the licenses.

 

11.8                         This Agreement is binding upon and shall
inure to the benefit of the respective successors and/or assigns of the Parties
hereto.

 

[The next page is the signature page]

 

9

 

In
witness whereof, drawn up in duplicate and signed by both parties, as of the
Effective Date first mentioned above.

 

 

	
  PHARMING
  TECHNOLOGIES B.V.

  	
   

  	
  ADVANCED
  CELL TECHNOLOGY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Dr. R. Strijker

  	
   

  	
  /s/
  William M. Caldwell, IV

  
	
  Dr. R.
  Strijker

  	
   

  	
  Mr. William M. Caldwell, IV

  
	
  Chief
  Commercial Officer

  	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Dr. B.M. Giannetti

  	
   

  	
   

  
	
  Dr. B.M.
  Giannetti

  	
   

  	
   

  
	
  Chief
  Operations Officer

  	
   

  	
   

  

 

10Exhibit
10.9

 

CONVERTIBLE
PROMISSORY NOTE

$600,000
PLUS INTEREST DUE & PAYABLE

DOCUMENT
A-02152008

 

THIS NOTE AND THE SHARES
ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.  THIS
NOTE AND THE SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT OR APPLICABLE EXEMPTION OR SAFE HARBOR PROVISION.

 

FOR VALUE RECEIVED, on
the Effective Date, as defined below, Advanced Cell Technology
Inc. as Obligor (“Borrower,” or “Obligor”), hereby promises to pay
to the Lender (“Lender” or “ Holder”), as defined below, the Principal Sum, as
defined below, along with the Interest Rate, as defined below, according to the
terms herein.

 

	
  The “Effective Date”
  shall be:

  	
   

  	
  February 15, 2008

  
	
   

  	
   

  	
   

  
	
  The “Lender” shall be:

  	
   

  	
  JMJ Financial / Its
  Principal, or Its Assignees

  
	
   

  	
   

  	
   

  
	
  The “Principal Sum”
  shall be:

  	
   

  	
  $600,000 (six hundred
  thousand US Dollars); Subject to the following: accrued, unpaid interest
  shall be added to the Principal Sum.

  
	
   

  	
   

  	
   

  
	
  The “Consideration”
  shall be:

  	
   

  	
  $500,000 (five hundred
  thousand) dollars in the form of cashier’s check.

  
	
   

  	
   

  	
   

  
	
  The “Interest Rate”
  shall be:

  	
   

  	
  12% one-time interest
  charge on the Principal Sum. No interest or principal payments are required
  until the Maturity Date, but both principal and interest may be included in
  conversion prior to maturity date.

  
	
   

  	
   

  	
   

  
	
  The “Conversion Price”
  shall be the following price:

  	
   

  	
  As applied to the
  Conversion Formula set forth in 2.2, the lesser of (a) $0.38 or
  (b) 80% (eighty percent) of the average of the 3 (three) lowest trade
  prices in the 20 trading days previous to the conversion; as applies to
  Advanced Cell Technology Inc. voting common stock.

  
	
   

  	
   

  	
   

  
	
  The “Prepayment Terms”
  shall be:

  	
   

  	
  Prepayment is not
  permitted, unless approved by Holder in writing.

  

 

 

	
  The “Maturity Date” is
  the date upon which the Principal Sum of this Note, as well as any unpaid
  interest shall be due and payable, and that date shall be:

  	
   

  	
  February 15, 2010

  

 

ARTICLE 1 PAYMENT-RELATED
PROVISIONS

 

1.1  Demand. 
Upon notice by holder, this Note is payable on Demand at any time from
and after 180 days from the Effective Date.

 

1.2  Interest Rate. 
Subject to the Holder’s right to convert, interest payable on this Note
will accrue interest at the Interest Rate and shall be applied to the Principal
Sum.

 

ARTICLE 2 CONVERSION RIGHTS

 

The Holder will have the
right to convert the Principal Sum and accrued interest under this Note into
Shares of the Borrower’s Common Stock as set forth below.

 

2.1  Conversion Rights and Cashless Exercise.  The Holder will have the right at its
election from and after 180 days from the Effective Date, and then at any time,
to convert all or part of the outstanding and unpaid Principal Sum and accrued
interest into shares of fully paid and nonassessable shares of common stock of
Advanced Cell Technology Inc. (as such stock exists on the date of issuance of
this Note, or any shares of capital stock of Advanced Cell Technology Inc. into
which such stock is hereafter changed or reclassified, the “Common Stock”) as
per the Conversion Formula set forth in Section 2.2.  Any such conversion shall be cashless, and
shall not require further payment from Holder. 
Unless otherwise agreed in writing by both the Borrower and the Holder,
at no time will the Holder convert any amount of the Note into common stock
that would result in the Holder owning more than 4.99% of the common stock
outstanding of Advanced Cell Technology Inc.  Shares from any such conversion will be
delivered to Holder within 2 (two) business days of conversion notice delivery
(see 3.1) via 10:30 am priority overnight delivery service (see Section 2.6).

 

2.2  Conversion Formula.  The number of shares issued through conversion
is the conversion amount divided by the conversion price.

 

	
  # Shares = 

  	
  Conversion Amount

  
	
   

  	
  Conversion Price

  

 

2.3  This section 2.3 intentionally left blank.

 

2.4  Adjustment Upon Dilutive Offers, Agreements,
or Sales.  If the Borrower, at any time
while this Note is outstanding, enters into an agreement under which it issues
or agrees to issue either its common stock, options, or warrants to purchase or
convert to its common stock at a price or exercise price or conversion price (a
“Subsequent Share Price”), as the case may be, 

 

 

that is less than the
conversion price or subsequent conversion formula result set forth in Section 2.2,
then the conversion price set forth in Section 2.2. shall be automatically
adjusted to equal the Subsequent Share Price.  Circumstances that are exempt from adjustment
as set forth in this Section 2.4 include:

 

(a) options to
employees, officers, directors or consultants pursuant to any stock or option
plan currently in effect or hereafter duly adopted by a majority of the non-
employee members of the board of directors of the Borrower or a majority of the
members of a committee of non-employee directors established for such purpose,
provided that the exercise price of such options shall not be less than the
Conversion Price on the trading day immediately prior to the grant of such
option,

 

(b) securities
issued upon the exercise or conversion of any securities, convertible
securities, options or warrants issued and outstanding on the date of this
Note, or any agreements to issue the same in existence as of the date of this
Note, and

 

(c) securities
issued pursuant to acquisitions or strategic transactions, provided any such
issuance shall only be made in connection with a transaction involving a person
or entity which is, itself or through its subsidiaries, an operating company in
a business synergistic with the business of the Borrower and in which the
Borrower receives benefits in addition to the investment of funds, but shall
not include a transaction in which the Borrower is issuing securities primarily
for the purpose of raising capital or to an entity whose primary business is
investing in securities.

 

2.5  Reservation of Shares.  As of the issuance date of this Note and for
the remaining period during which the conversion right exists, the Borrower
will reserve from its authorized and unissued Common Stock a sufficient number
of shares to provide for the issuance of Common Stock upon the full conversion
of this Note.  The Borrower represents
that upon issuance, such shares will be duly and validly issued, fully paid and
non-assessable.  The Borrower agrees that
its issuance of this Note constitutes full authority to its officers, agents
and transfer agents who are charged with the duty of executing and issuing
stock certificates to execute and issue the necessary certificates for shares
of Common Stock upon the conversion of this Note.

 

2.6  Delivery of Conversion Shares.  Shares from any such conversion will be
delivered to Holder within 2 (two) business days of conversion notice delivery
(see 3.1) via 10:30 am priority overnight delivery service (see “Share Delivery”
attachment).  If those shares are not
delivered in accordance with this timeframe stated in this Section 2.6, at
any time for any reason prior to offering those shares for sale in a private
transaction or in the public market through its broker, Holder may rescind that
particular conversion to have the conversion amount returned to the note
balance with the conversion shares returned to the Borrower.

 

 

ARTICLE 3 MISCELLANEOUS

 

3.1  Notices. 
Any notice required or permitted hereunder must be in writing and either
personally served, sent by facsimile or email transmission, or sent by
overnight courier.  Notices will be
deemed effectively delivered at the time of transmission if by facsimile or
email, and if by overnight courier the business day after such notice is
deposited with the courier service for delivery.

 

3.2  Amendment Provision.  The term “Note” and all reference thereto, as
used throughout this instrument, means this instrument as originally executed,
or if later amended or supplemented, then as so amended or supplemented.

 

3.3  Assignability.  This Note will be binding upon the Borrower
and its successors and permitted assigns, and will inure to the benefit of the
Holder and its successors and permitted assigns, and may be assigned by the
Holder.

 

3.4  Governing Law.  This Note will be governed by, and construed
and enforced in accordance, with the laws of the State of Florida, without
regard to the conflict of laws principles thereof.

 

3.5  Maximum Payments.  Nothing contained herein may be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law.  In the event that the rate of interest
required to be paid or other charges hereunder exceed the maximum permitted by
such law, any payments in excess of such maximum will be credited against
amounts owed by the Borrower to the Holder and thus refunded to the Borrower.

 

3.6  Attorney Fees.  In the event any attorney is employed by
either party to this Note with regard to any legal or equitable action,
arbitration or other proceeding brought by such party for the enforcement of
this Note or because of an alleged dispute, breach, default or
misrepresentation in connection with any of the provisions of this Note, the
prevailing party in such proceeding will be entitled to recover from the other
party reasonable attorneys’ fees and other costs and expenses incurred, in
addition to any other relief to which the prevailing party may be entitled.

 

3.7  Change of Officer, Change of Control.  In the event that William Caldwell is
replaced as Chairman & CEO of Advanced Cell Technology Inc., or in the
event that Advanced Cell Technology Inc. undergoes a change in majority
control, the Holder has the right to make this Note payable on demand as set
forth in Section 1 .l.

 

3.8  No Public Announcement.  Except as required by applicable securities
laws, no public announcement may be made regarding this Note, payments, or
conversions without written permission by both Borrower and Holder.

 

3.9  Opinion of Counsel.  In the event that an opinion of counsel is
needed for any matter related to this Note, Holder has the right to have any
such opinion provided by its counsel.  Holder
also has the right to have any such opinion provided by Borrower’s counsel.

 

 

3.10  Additional Financing.  The Holder, at its option, may invest up to
an additional $500,000 (five hundred thousand dollars), in part, whole, and/or
multiple transactions, in Advanced Cell Technology Inc. on the same or better
terms as set forth in this agreement for a period of 150 days from the
Effective Date.  The 150 day window may
be extended at the option of the Borrower. 
In the event that Holder wishes to exercise this right, the Borrower
will be notified by the Notice of Additional Financing Form, and any additional
financing will be memorialized by an additional Convertible Promissory Note(s).

 

3.11  Effective Date.  This Note will become effective only upon
occurrence of the three following events: the Effective Date of February 15,
2008 has been reached, execution by both parties, and delivery of valid payment
by the Lender.

 

3.12  Director’s Resolution.  Once effective, Borrower will execute and
deliver to Holder a copy of a Board of Director’s resolution resolving that
this note is validly issued, paid, and effective.

 

3.13  Use of Proceeds.  As further described, promised, and agreed in
the attached Use of Proceeds Agreement, Borrower promises that use of the funds
will not go towards stem cell research or development related to embryonic stem
cells in any manner, and that 100% of the use of proceeds is to go the company’s
adult stem cell research and development of the Mytogen program.  Borrower understands that Holder has entered
into this transaction in reliance upon that promise, understanding, and use of
proceeds as memorialized in the attached Use of Proceeds Agreement.

 

3.14  Adjustment of Conversion Price.  In the event that Borrower enters into an
additional financing agreement with another investor subsequent to the closing
of this transaction, Borrower may adjust the Conversion Price percentage set
forth herein as to satisfy the terms of any future financing transaction.  In the event of such adjustment, as shown in
the Adjustment of Conversion Price Example attachment, Borrower will make a
one-time cash payment to Holder at the time of adjustment for the dollar
difference that would result in the Conversion Price percentage adjustment.  In the event that Holder invests additional
funds as set forth in Section 3.10, this Section 3.14 will apply to
future financing whether the additional funds are invested before or after any
such adjustment.

 

	
  BORROWER[S]:

  	
   

  	
  LENDER/HOLDER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ William M.
  Caldwell, IV

  	
   

  	
  /s/ Justin Keener

  
	
  William Caldwell

  	
   

  	
  JMJ Financial / Its
  Principal

  
	
  President &
  CEO

  	
   

  	
   

  
	
  Advanced Cell
  Technology, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  Dated:

  	
  2/14/08

  
					

 

 

USE OF PROCEEDS AGREEMENT

 

Mr. Bill
Caldwell, President & CEO

Mr. Ivan
Wolkind, SVP of Finance & CAO

 

Dear
Bill and Ivan,

 

Through
the course of our discussions leading up to this financing, you have been very
helpful for my understanding of stem cell research and development,
particularly with the differences between embryonic stem cell research and
adult stem cell research.

 

Because
embryonic stem cell research has underlying ethical issues that I would need
months to research and consider before drawing a conclusion as to whether I
support it or discourage it, we felt it was best to fund the company solely for
adult stem cell research.  This is a
critical ethical concern to me of highest importance, and you have agreed,
pledged, and promised to segregate the funds as follows.

 

As
summarized in Section 3.13 above, you hereby represent, for me to rely on
as an investor and also as a party to this agreement, that you agree, pledge,
and promise that these funds will not be used in any way, shape, form,
spillover, or connection to embryonic stem cell research.  You have represented to me that Mytogen
research and development is dedicated solely to adult stem cell research and
that Mytogen has no connection to embryonic stem cell research whatsoever.  The funds will be used solely in this manner
as provided by you:

 

·                  Mytogen facilities costs that are not and
will never be connected to, related to, or shared with embryonic stem cell
research during the use of proceeds.

 

·                  Mytogen salaries that are not and wilt never
be connected to, related to, or shared with embryonic stem cell research during
the use of proceeds.

 

·                  Mytogen fixed assets that are not and will
never be connected to, related to, or shared with embryonic stem cell research.

 

·                  Mytogen accounts payable that are not and
will never be connected to, related to, or shared with embryonic stem cell
research.

 

You
also agree that upon my request, at any time upon reasonable notice, you will
provide me with the actual use of proceeds of these funds.  Further, you promise and agree that these
funds will not be loaned, pledged, used as collateral, or otherwise
hypothecated in any way, shape, form, spillover, or connection to embryonic
stem cell research.

 

If
we are all in understanding, and if you agree to uphold these promises and
agree to these representations for me to rely upon as an investor and as a
party to this agreement, please indicate by signing below.

 

	
  /s/ Justin Keener

  	
   

  	
  /s/
  William M. Caldwell, IV

  
	
  JMJ
  Financial / Its Principal

  	
   

  	
  William
  Caldwell

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Ivan
  Wolkind

  

 

 

NOTICE OF ADDITIONAL FINANCING FORM

 

(To
be executed by Holder when intending to invest additional funds)

 

This
Form is notification that I intend to invest additional funds into
Advanced Cell Technology Inc. as set forth in Section 3.10 of the
Convertible Promissory Note dated February 15, 2008,

 

Intended
Amount: $

 

Intended
Execution Date of Documentation:

 

Intended
Delivery Date of Payment:

 

 

	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  

 

 

SAMPLE

 

NOTICE OF CONVERSION

 

(To
be executed by the Holder in order to convert the Note)

 

The
undersigned hereby elects to convert a portion of the Note issued by Advanced
Cell Technology Inc. on February 15, 2008 into Shares of Common Stock of
Advanced Cell Technology Inc. according to the conditions set forth in such
Note, as of the date written below.

 

	
  Date
  of Conversion:

  	
   

  	
   

  
	
   

  	
   

  
	
  Conversion
  Amount:

  	
   

  	
   

  
	
   

  	
   

  
	
  Conversion
  Price:

  	
   

  	
   

  
	
   

  	
   

  
	
  Shares
  To Be Delivered:

  	
   

  	
   

  
	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  
	
  Print
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
									

 

 

 

Shares must be delivered to Holder within 2 (two) business
days of conversion notice via 10:30am priority overnight delivery service in
accordance with Section 2.6.

 

 

OTHER NOTE/DEBENTURE HOLDERS’ RACHET PROVISIONS

 

Borrower
is aware that as set forth in the Conversion Price and Section 2, that the
market price of the stock may be at a level such that the Holder’s conversion
takes place at a price per share that is lower than $0.38.

 

In
the event that any or all conversions take place under $0.38, Borrower will
bear any consequences from any past or future financing agreements; and that
under no circumstances will any past or future financing agreements prevent
Borrower from honoring the conversion terms and all other terms as set forth in
this agreement.

 

 

	
   

  	
   

  
	
  William
  Caldwell

  
	
  President &
  CEO

  
	
  Advanced
  Cell Technology Inc.

  

 

 

	
  Dated:

  	
   

  	
   

  

 

 

SHARE DELIVERY ATTACHMENT

 

EXAMPLE

 

2.6.
Delivery of Conversion Shares. Shares from any such conversion will be
delivered to Holder within 2 (two) business days of conversion notice delivery
(see 3.1) via 10:30am priority overnight delivery service. If those shares are
not delivered in accordance with this timeframe stated in this Section 2.6,
at any time for any reason prior to offering those shares for sale in a private
transaction or in the public market through its broker, Holder may rescind that
particular conversion to have the conversion amount returned to the note
balance with the conversion shares returned to the Borrower.

 

Example:

 

Holder
delivers conversion notice to Borrower at 4:45pm eastern time on Monday January 1st.

 

Borrower’s
transfer agent must send shares to Holder via 10:30am overnight delivery no
later than Tuesday January 2nd.

 

Holder
must have received the shares or received delivery attempt no later than
10:30am eastern time on Wednesday January 3rd.

 

 

ADJUSTMENT OF CONVERSION PRICE EXAMPLE

 

3.14.
Adjustment of Conversion Price.  In the
event that Borrower enters into an additional financing agreement with another
investor subsequent to the closing of this transaction, Borrower may adjust the
Conversion Price percentage set forth herein as to satisfy the terms of any
future financing transaction. In the event of such adjustment, as shown in the
Adjustment of Conversion Price Example attachment, Borrower will make a
one-time cash payment to Holder at the time of adjustment for the dollar
difference that would result in the Conversion Price percentage adjustment. In
the event that Holder invests additional funds as set forth in Section 3.10,
this Section 3.14 will apply to future financing whether the additional
funds are invested before or after any such adjustment.

 

Example:

 

Current 80%

 

$600,000
principal amount x 1.12 one-time interest charge = $672,000 total principal
balance

 

$672,000
/ .80 conversion price percentage = $840,000 total paper value

 

For
this example, assume the Borrower adjusted the conversion price percentage
upwards to 90%

 

Adjusted 90%

 

$600,000
principal amount x 1.12 one-time interest charge = $672,000 total principal
balance

 

$672,000
/ .90 conversion price percentage = $746,666 total paper value

 

Cash
Payment Required by Borrower to Holder equals $93,333

 

Original
paper value at 80% = $840,000

-
Adjusted paper value at 90% = $746,666

Cash
payment required for adjustment $93,333

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