Document:

Exhibit
10.6

 

THESE SECURITIES HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY
STATE, AND ARE BEING OFFERED AND SOLD IN RELIANCE ON REGISTRATION EXEMPTIONS
AVAILABLE THEREUNDER. AS SUCH THE HOLDER MAY NOT BE ABLE TO RESELL THE
SECURITIES UNLESS PURSUANT TO REGISTRATION UNDER FEDERAL AND STATE SECURITIES
LAWS OR UNLESS A RESALE EXEMPTION UNDER SUCH LAWS EXISTS.

 

ADVANCED
CELL TECHNOLOGY, INC.

 

CONVERTIBLE
NOTE

 

	
  Up to $60,000.00

  	
   

  	
  Alameda,
  California

  
	
   

  	
   

  	
  March 17th,
  2008

  

 

1.                                       Promise to Pay.  FOR VALUE RECEIVED, the undersigned, ADVANCED CELL TECHNOLOGY, INC., a Delaware corporation
(referred to alternatively as the “Maker” or
the “Company”), promises to pay to the
PDPI, LLC, a Delaware limited liability company, or its assigns (the “Noteholder”), at such place as the
Noteholder hereof shall notify the Maker in writing the principal amount of up
to

 

Sixty
Thousand Dollars ($60,000)

 

or so much of that sum as
may be advanced and outstanding under this Convertible Promissory Note (this “Note”). This Note evidences a loan
(the “Loan”) from the Noteholder to the
Maker. Advances under this Note shall be added to the principal amount of the
Loan, as and when made, as reflected in the Advance Schedule attached hereto as
Exhibit A. Each payment under this Note shall first be credited against
accrued and unpaid interest, and the remainder shall be credited against
principal. All amounts payable under this Note shall be paid in lawful money of
the United States of America during normal business hours on a business day, in
immediately available funds. A Member of the Noteholder on behalf of the
Noteholder shall advance the Maker the sum of Sixty Thousand Dollars
($60,000.00) upon execution of this Note.

 

2.                                       Principal.  All outstanding principal and all accrued and
unpaid interest and all other amounts owed hereunder (the “Outstanding
Balance”), unless earlier converted pursuant to the terms
described herein, shall be due and payable in one lump sum on April 30th,
2008 (the “Maturity Date”) unless the
Note has earlier been converted.

 

3.                                       Permitted Uses..  The proceeds of the Loan may be used only for
payment of Permitted Expenses, as defined herein. As used herein, the term
Permitted Expenses means reasonable and customary operating expenses and
capital expenditures related to the ongoing operation of the Maker.

 

4.                                       Interest.  (a) The principal sum outstanding from
time to time under this Note shall bear interest at a rate equal to NINE
percent (9%) per annum. If default is made in any payment due under this Note,
interest shall thereafter accrue on the entire unpaid principal 

 

 

balance hereunder at a per annum rate equal to EIGHTEEN percent (18%)
(the “Default Rate”), from the date such
payment became due until the Maker pays in full all amounts due and payable
hereunder. From and after the maturity of this Note, whether by acceleration or
otherwise, all sums then due and payable under this Note, including all
principal and all accrued and unpaid interest, shall bear interest until paid in
full at the Default Rate. Interest shall be payable in arrears on the last day
of each month. Interest shall be calculated on the basis of a 360-day year and
actual days elapsed, which results in more interest than if a 365-day year were
used.

 

(b)                                 Notwithstanding
anything to the contrary contained in this Note, in no event shall the Maker be
required to pay interest on the principal amount outstanding under this Note at
a rate in excess of the maximum nonusurious interest rate, if any, that at any
time or from time to time may be contracted for, taken, reserved, charged or
received on the outstanding principal balance under this Note under the laws of
the State of California (the “Maximum Lawful Rate”),
and if the effective rate of interest which would otherwise be payable under
this Note - would exceed the Maximum Lawful Rate, or if the Noteholder shall
receive monies that are deemed to constitute interest which would increase the
effective rate of interest payable under this Note to a rate in excess of the
Maximum Lawful Rate, then: (i) the amount of interest which would
otherwise be payable under this Note shall be reduced to the Maximum Lawful
Rate, and (ii) any interest paid by the Maker in excess of the Maximum
Lawful Rate shall, at the option of the Noteholder, be either refunded to the
Maker or credited against the principal of this Note. It is further agreed
that, without limitation of the foregoing, all calculations of the rate of
interest contracted for, charged or received by the Noteholder that are made
for the purpose of determining whether such rate exceeds the Maximum Lawful
Rate shall be made, to the extent permitted by the applicable law (now or
hereafter enacted), by amortizing, prorating and spreading in equal parts
during the period of the full stated term of the Loan all interest at any time
contracted for, charged or received by the Noteholder. If at any time and from
time to time: (x) the amount of the interest payable to the Noteholder on
any date shall be limited to the Maximum Lawful Rate pursuant to the provisions
hereof, and (y) in respect of any subsequent interest computation period
the amount of any interest otherwise payable to the Noteholder would be less
than the amount of interest payable to the Noteholder computed at the Maximum
Lawful Rate, then the amount of interest payable to the Noteholder in respect
of such subsequent interest computation period shall continue to be computed at
the Maximum Lawful Rate until the total amount of interest payable to the
Noteholder shall equal the total amount of interest which would have been
payable to the Noteholder if the total amount of interest had been computed
without giving effect to the limitations set forth in this Section 4.

 

5.                                       Conversion.

 

(a)                                  Definitions.                                The following definitions
shall apply for all purposes of this Note:

 

“Change
of Control” means (a) any sale or exchange of the
common stock of the Maker in one transaction or series of related transactions
where more than 50% of the outstanding voting power of the Maker is acquired by
a person or entity or group of related persons or entities; (b) a
reorganization or merger of the Maker with or into any other corporation or
entity, in which transaction the holders of Maker’s outstanding common stock 

 

2

 

immediately prior to such
transaction own immediately after such transaction less than 50% of the equity
securities of the surviving corporation (or its parent); or (c) the
consummation of any transaction or series of related transactions that results
in the sale of all or substantially all of the assets of the Maker.

 

“Common
Stock” means the Common Stock, par value $0.001 per
share, of the Company and stock of any other class of securities into which
such securities may hereafter be reclassified or otherwise changed or
converted.

 

“Common
Stock Equivalents” means any debentures, preferred stock,
options, warrants or other securities that are convertible or exchangeable into
Common Stock.

 

“Conversion
Price” means an amount equal to the average per unit
selling price of investment units (whether debt, preferred stock, common stock,
warrants, or any combination thereof, or other forms of securities) issued in
the Next Financing. The Conversion Price is subject to adjustment as provided
herein.

 

“Conversion
Securities” means the investment units (whether debt,
preferred stock, common stock, warrants, or any combination thereof, or other
forms of securities) sold by the Company in the Next Financing. The number and
character of units of Conversion Securities are subject to adjustment as
provided herein and the term “Conversion Securities” shall include investment
units and other securities and property at any time receivable or issuable upon
conversion of this Note in accordance with its terms.

 

“Next
Financing” means the Maker’s next sale of any investment
units (whether debt, preferred stock, common stock, warrants, or any
combination thereof, or other forms of securities) in one transaction or a
series of related transactions occurring on or before the Maturity Date for an
aggregate purchase price paid to the Maker of at least $5 million, including
the principal amount of and accrued interest or any other amounts owing on this
Note converted into Conversion Securities and issued therein.

 

(b)                                  Conversion.

 

(1)                                  Conversion in Next Financing. Prior
to the Maturity Date and prior to a Change of Control, in the event the Maker
does not pay the full principal amount of and accrued interest on this Note
before the Next Financing, then at the closing of the Next Financing (or the
first closing in a series of closings) (the “Closing”,
all principal and accrued interest on this Note shall automatically be
converted into units of Conversion Securities at the Conversion Price on a
dollar for dollar basis. The Noteholder whose Note is so converted will deliver
the original Note to the Maker and will execute and deliver to the Maker at the
Closing such purchase agreement and/or other agreements as are entered into by
the investors in the Next Financing generally. Upon
Conversion of the Note, the Noteholder will become a Purchaser of the Next
Financing and will have fulfilled any obligation however defined of purchasing
the Purchaser’s Pro Rata Share in the Next Financing. The Noteholder will be
entitled to all rights and privileges given to any other Purchaser in the Next
Financing including the exercise of anti-dilution protection and 

 

3

 

reset of any conversion price of
any existing debentures and warrants owned by the Noteholder at the date of the
closing of the Next Financing

 

(2)                                  Conversion Upon Change of Control.  If there occurs a Change of Control prior to
the Maturity Date, the Noteholder may, in its sole discretion, either (i) irrevocably
elect by written notice to the Maker to receive from the Maker prepayment of
the then outstanding accrued interest and principal under the Note
contemporaneously with the closing of the Change of Control; provided, however,
that such written notice must be provided to the Maker at least ten (10) days
prior to the closing of the Change of Control or (ii) prior to the
repayment of the outstanding balance under the Note by the Maker, irrevocably
elect by written notice to the Maker to convert such outstanding balance of
this Note into Common Stock at a price per share equal to the average closing
price on the OTC Bulletin Board for the five days immediately preceding the
public announcement of the Change in Control. Conversion under this Section 5
shall occur upon surrender of this Note for conversion at the principal offices
of the Maker, accompanied by irrevocable written notice of election to convert
delivered to the Maker at least ten (10) days prior to the closing of the
Change of Control and execution and delivery of such investment representation
letter and related documents as are generally entered into by investors in the
Maker.

 

(c)                                  Issuance of Conversion Securities.
As soon as practicable after conversion of this Note, but no later than 15 days
following conversion of this Note, the Maker at its expense will cause to be
issued in the name of and delivered to the Noteholder, a certificate or
certificates, or other instruments, for the number or amount, as applicable, of
Conversion Securities to which the Noteholder shall be entitled upon such
conversion (bearing such legends as may be required by applicable state and
federal securities laws in the opinion of legal counsel of the Maker, by the
Maker’s Certificate of Incorporation or Bylaws, or by any agreement between the
Maker and the Noteholder), together with any other securities and property to
which the Noteholder is entitled upon such conversion under the terms of this
Note. Such conversion shall be deemed to have been made, (a) if made under
Section 5 (b)(l) above, on the date of the Closing of the Next
Financing, and (b) if made under Section 5 (b)(2) above,
immediately prior to the close of business on the date that this Note shall
have been surrendered for conversion, accompanied by written notice of election
to convert. No fractional units will be issued upon conversion of this Note. If
upon any conversion of this Note (and all other Notes held by the same
Noteholder, after aggregating all such conversions), a fraction of a unit would
otherwise result, then in lieu of such fractional unit the Maker will pay the
cash value of that fractional unit, calculated on the basis of the applicable
Conversion Price.

 

(d)                                  Adjustment
Provisions. The number and character of shares of Conversion Securities
issuable upon conversion of this Note (or any shares of stock or other
securities or property at the time receivable or issuable upon conversion of
this Note) and the Conversion Price therefor, are subject to adjustment upon
occurrence of the following events between the date this Note is issued and the
date it is converted:

 

(1)                                  Adjustment for Stock Splits, Stock Dividends,
Recapitalizations, etc. The number or amount, as applicable, of
Conversion Securities issuable upon conversion of this 

 

4

 

Note (or any shares of
stock or other securities at the time issuable upon conversion of this Note)
shall each be proportionally adjusted to reflect any stock dividend, stock
split, reverse stock split, reclassification, recapitalization or other similar
event affecting the number or amount of outstanding shares of Common Stock, or
Common Stock Equivalents unless the conversion ratio of such Conversion
Securities already reflects such event.

 

(2)                                  Adjustment for Other Dividends and Distributions.
In case the Maker shall make or issue, or shall fix a record date for the
determination of eligible Noteholders entitled to receive, a dividend or other
distribution payable with respect to the capital stock that is payable in (a) securities
of the Maker (other than issuances with respect to which adjustment is made
under Section 5 (d)(l)), or (b) assets (other than cash dividends
paid or payable solely out of retained earnings), then, and in each such case,
the Noteholder, upon conversion of this Note at any time after the
consummation, effective date or record date of such event, shall receive, in
addition to the shares of Conversion Securities issuable upon such exercise
prior to such date, the securities or such other assets of the Maker to which
the Noteholder would have been entitled upon such date if the Noteholder had
converted this Note immediately prior thereto (all subject to further
adjustment as provided in this Note).

 

(3)                                  Conversion of Stock. In case all
the authorized Conversion Securities of the Maker is converted, pursuant to the
Maker’s Certificate of Incorporation, into Common Stock or other securities or
property, or the Conversion Securities otherwise ceases to exist, then, in such
case, the Noteholder, upon conversion of this Note at any time after the date
on which the Conversion Securities is so converted or ceases to exist (the “Termination Date”), shall receive,
in lieu of the number of shares of Conversion Securities that would have been
issuable upon such exercise immediately prior to the Termination Date (the “Former Number of Shares of Conversion Securities”),
the stock and other securities and property which the Noteholder would have
been entitled to receive upon the Termination Date if the Noteholder had
converted this Note with respect to the Former Number of Shares of Conversion
Securities immediately prior to the Termination Date (all subject to further
adjustment as provided in this Note).

 

(4)                                  Notice of Adjustments. The Maker
shall promptly give written notice of each adjustment or readjustment of the
Conversion Price or the number of shares of Conversion Securities or other
securities issuable upon conversion of this Note. The notice shall describe the
adjustment or readjustment and show in reasonable detail the facts on which the
adjustment or readjustment is based.

 

(5)                                  No Change Necessary. The form of
this Note need not be changed because of any adjustment in the Conversion Price
or in the number of shares of Conversion Securities issuable upon its
conversion.

 

6.                                       Representations and Warranties. As
an inducement to the Noteholder to make the Loan, the Maker represents and
warrants to the Noteholder that:

 

(a)                                  The
Maker is duly organized, validly existing and in good standing as a corporation
under the laws of the State of Delaware. The Maker (i) has the corporate
power and 

 

5

 

authority and the legal
right to own and operate its property and to conduct business in the manner in
which it does and proposes so to do, and (ii) is in compliance in all
material respects with all requirements of law and contractual obligations.

 

(b)                                 The
Maker has the corporate power and authority and the legal right to execute,
deliver and perform this Note and has taken all necessary corporate action to
authorize the execution, delivery and performance of this Note. This Note has
been duly executed and delivered on behalf of the Maker and constitutes the
legal, valid and binding obligation of the Maker enforceable against the Maker
in accordance with its terms, subject to the effect of applicable bankruptcy
and other similar laws affecting the rights of creditors generally and the
effect of equitable principles whether applied in an action at law or a suit in
equity.

 

(c)                                  The
execution, delivery and performance of this Note, the borrowing hereunder and
the use of the proceeds hereof, will not violate any provision of Maker’s
Certificate of Incorporation, Bylaws or requirement of law or any contractual
obligations of the Maker or create or result in the creation of any lien on any
assets of the Maker.

 

7.                                       Affirmative Covenants; Noteholder Acknowledgement;
Noteholder Representation. The Maker agrees to provide the
Noteholder with prompt notice of any written commitments entered into which, if
closed, would constitute the Next Financing, and to provide the Noteholder with
at least ten days’ prior notice of the closing of the Next Financing. The
Noteholder (and each of its respective members), hereby acknowledge and
understand that the Loan transaction requires the unanimous consent of the
holders of certain senior convertible debenture previously issued by the Maker.
In the event Noteholder does not receive unanimous consent, the Maker will be
subject to a default under the senior debenture facility unless cured within
the applicable period. The Noteholder hereby represents and warrants to the
Maker that the Noteholder, is an ‘accredited investor’ as that term is defined
in Rule 501 (a) of Regulation D promulgated under the Securities Act.

 

8.                                       Negative Covenants. The Maker agrees
that, as long as any obligations under this Note remain unpaid, it shall not,
directly or indirectly without the prior written consent of Noteholder:

 

(a)                                  liquidate
or dissolve or enter into any sale, consolidation, merger, partnership, joint
venture, syndicate or other combination, unless the Maker is the surviving
entity;

 

(b)                                 sell,
lease, assign, transfer or otherwise dispose of all or substantially all of
Maker’s assets; provided that the Maker may sell, lease, assign or transfer any
portion of its real or personal property; and

 

(c)                                  engage
in any business activities substantially different from the Maker’s business as
described in its current business plan delivered to Noteholder
contemporaneously herewith.

 

6

 

9.                                       Events of Default. Upon the
occurrence of any of the following events (each, an “Event of
Default”):

 

(a)                                  The
Maker shall fail to pay any amount due under this Note within five (5) days
of the due date; or

 

(b)                                 Any
representation or warranty made by the Maker in this Note shall be materially
inaccurate or incomplete; provided, that any such inaccurate or incomplete
representation or warranty shall not constitute an Event of Default if it is
corrected within thirty (30) days after any officer or employee of the Maker
obtains knowledge of such inaccuracy or incompleteness, and the corrected or
revised representation or warranty made by the Maker is acceptable to the
Noteholder; or

 

(c)                                  The
Maker shall fail to observe or perform in any material respect any of the other
terms or provisions of this Note and such failure shall continue for thirty
(30) days; or

 

(d)                                 Any
default in any payment of principal of or interest on any other indebtedness of
the Maker if such default could materially impair the ability of the Maker to
pay its obligations under this Note in accordance with the terms hereof; or

 

(e)                                  (i) The
Maker shall (A) commence any case, proceeding or other action under any
existing or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) commence any case, proceeding or other action
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its assets, or (C) make a
general assignment for the benefit of its creditors; or (ii) there shall
be commenced against the Maker any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an
order for relief or any such adjudication or appointment, or (B) remains
undismissed, undischarged or unbonded for a period of sixty (60) days; or (iii) there
shall be commenced against the Maker any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in the entry of
an order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within sixty (60) days from the entry thereof;
or (iv) the Maker shall take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the acts set forth in
clauses (i), (ii) or (iii) above; or (v) the Maker shall
generally not, or shall be unable to, or shall admit in writing its inability
to, pay its debts as they become due;

 

THEN, automatically upon
the occurrence of an Event of Default under clause (e) of this Section 9
and, in all other cases, at the option of the Noteholder, in each case without
notice to or demand upon the Maker or any other party, the entire principal
balance hereof together with all accrued and unpaid interest thereon shall
become immediately due and payable.

 

7

 

10.                                 Capitalized Interest. On each
anniversary of the date of any default hereunder and while such default is
continuing, all interest which has become payable and is then delinquent shall,
without curing the default hereunder by reason of such delinquency, be added to
the principal amount due under this Note, and shall thereafter bear interest at
the same rate as is applicable to principal.

 

11.                                 Costs and Expenses. If any
default occurs in any payment due under this Note, the Maker and all guarantors
and endorsers hereof, and their successors and assigns, promise to pay all
costs and expenses, including attorneys’ fees, incurred by the Noteholder
hereof in collecting or attempting to collect the indebtedness under this Note,
whether or not any action or proceeding is commenced, and hereby waive the
right to plead any and all statutes of limitation as a defense to a demand
hereunder to the full extent permitted by law.

 

12.                                 Acceptance of Past Due Payments and Indulgences Not
Waivers. None of the provisions hereof and none of the
Noteholder’s rights or remedies hereunder on account of any past or future
defaults shall be deemed to have been waived by the Noteholder’s acceptance of
any past due installments or by any indulgence granted by the Noteholder to the
Maker.

 

13.                                 Waivers by the Maker; No Setoffs or Counterclaims.
The Maker and all guarantors and endorsers hereof, and their successors and
assigns, hereby waive presentment, demand, protest and notice thereof or of
dishonor, and agree that they shall remain liable for all amounts due hereunder
notwithstanding any extension of time or change in the terms of payment of this
Note granted by the Noteholder, any change, alteration or release of any
property now or hereafter securing the payment hereof or any delay or failure
by the Noteholder to exercise any rights under this Note. All payments required
by this Note shall be made without setoff or counterclaim.

 

14.                                 Assignment. The Maker may not
assign its rights or obligations under this Note without the prior written
consent of the Noteholder and any such purported assignment by the Maker
without obtaining the prior written consent of the Noteholder shall be void ab
initio. This Note shall inure to the heirs, legal representatives, successors
and assigns of the Noteholder.

 

15.                                 Notices. All notices given by
the Maker or the Noteholder hereunder to the other shall be in writing,
delivered by facsimile transmission (confirmed in writing) or delivered
personally or by depositing the same in the United States mail, registered,
with postage prepaid, addressed as follows:

 

	
  Noteholder:

  	
   

  	
  PDPI, LLC

  
	
   

  	
   

  	
  252 Seventh Avenue, #
  14A

  
	
   

  	
   

  	
  NY, NY 10001

  
	
   

  	
   

  	
   

  
	
  Maker:

  	
   

  	
  Advanced Cell
  Technology, Inc.

  
	
   

  	
   

  	
  1201 Harbor Bay
  Parkway, Ste. 120

  
	
   

  	
   

  	
  Alameda, CA 94502

  

 

8

 

Either the Noteholder or
the Maker may change the address to which notices are to be sent by notice of
such change to the other given as provided herein. Such notices shall be
effective on the date received or, if mailed, on the third business day
following the date mailed.

 

16.                                 Governing Law.  This Note is governed by the laws of the
State of California, without regard to the choice of law rules of that
State.

 

17.                                 Waiver of Jury Trial.  THE MAKER HEREBY WAIVES ANY RIGHT TO HAVE A
JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT
OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THIS
NOTE. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL
WITHOUT A JURY.

 

9

 

IN WITNESS WHEREOF, the
Maker has caused this Convertible Note to be duly executed the day and year
first above written.

 

	
   

  	
  ADVANCED CELL
  TECHNOLOGY,

  
	
   

  	
  INC., a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William M.
  Caldwell, IV

  
	
   

  	
  Name: William M.
  Caldwell, IV

  
	
   

  	
  Title: Chairman and CEO

  

 

10Exhibit
10.7

 

THESE SECURITIES HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY
STATE, AND ARE BEING OFFERED AND SOLD IN RELIANCE ON REGISTRATION EXEMPTIONS
AVAILABLE THEREUNDER. AS SUCH THE HOLDER MAY NOT BE ABLE TO RESELL THE
SECURITIES UNLESS PURSUANT TO REGISTRATION UNDER FEDERAL AND STATE SECURITIES
LAWS OR UNLESS A RESALE EXEMPTION UNDER SUCH LAWS EXISTS.

 

ADVANCED
CELL TECHNOLOGY, INC.

BRIDGE
NOTE

 

	
  Up to $70,000.00

  	
   

  	
  Los Angeles,
  California

  
	
   

  	
   

  	
  March 17th,
  2008

  

 

1.                                       Promise to Pay.  FOR VALUE RECEIVED, the undersigned, ADVANCED
CELL TECHNOLOGY, INC., a Delaware corporation (referred to alternatively as the
“Maker” or the “Company”),
promises to pay to the Shapiro Family Trust Dated September 25, 1989 or
its assigns (the “Noteholder”),
at such place as the Noteholder hereof shall notify the Maker in writing the
principal amount of up to

 

SEVENTY
Thousand Dollars ($70,000)

 

or so much of that sum as
may be advanced and outstanding under this Convertible Promissory Note (this “Note”).  This Note evidences a loan (the “Loan”) from the Noteholder to the
Maker. Advances under this Note shall be added to the principal amount of the
Loan, as and when made, as reflected in the Advance Schedule attached hereto as
Exhibit A.  Each payment under this
Note shall be credited against principal. 
All amounts payable under this Note shall be paid in lawful money of the
United States of America during normal business hours on a business day, in immediately
available funds.  A Member of the
Noteholder on behalf of the Noteholder shall advance the Maker the sum of
Seventy Thousand Dollars ($70,000.00) upon execution of this Note.

 

2.                                       Principal.  All outstanding principal and all accrued and
unpaid interest and all other amounts owed hereunder (the “Outstanding
Balance”), unless earlier converted pursuant to the terms
described herein, shall be due and payable in one lump sum on April 7th,
2008 (the “Maturity Date”) unless the
Note has earlier been paid.

 

3.                                       Permitted Uses.  The proceeds of the Loan may be used only for
payment of Permitted Expenses, as defined herein. As used herein, the term
Permitted Expenses means reasonable and customary operating expenses and
capital expenditures related to the ongoing operation of the Maker.

 

4.                                       Interest. (a) The principal
sum outstanding from time to time under this Note shall bear interest at a rate
equal to NINE percent (9%) per annum.

 

 

5.                                       ENTITLEMENT OF THE NOTEHOLDER. Upon funding of the Note, the Noteholder will have fulfilled any
obligation however defined of purchasing the Purchaser’s Pro Rata Share in the
Next Financing The Noteholder will be entitled to all rights and privileges
given to any other Purchaser in the Next Financing including the exercise of
anti-dilution protection, reset of any conversion price of any existing
debentures and warrants owned by the Noteholder at the date of the closing of
the Next Financing, and issuance of warrants under the same terms and
conditions as if the investment had been converted into that financing round.

 

6.                                       SECURITY: With the funding of this
Note and until full repayment is made, this note will rank pari pasu with the
2005, 2006 and 2007 Debentures which are the most senior obligations of the
company.

 

7.                                       Representations and Warranties.  As an inducement to the Noteholder to make
the Loan, the Maker represents and warrants to the Noteholder that:

 

(a)                                  The
Maker is duly organized, validly existing and in good standing as a corporation
under the laws of the State of Delaware. The Maker (i) has the corporate
power and authority and the legal right to own and operate its property and to
conduct business in the manner in which it does and proposes so to do, and (ii) is
in compliance in all material respects with all requirements of law and
contractual obligations.

 

(b)                                 The
Maker has the corporate power and authority and the legal right to execute,
deliver and perform this Note and has taken all necessary corporate action to
authorize the execution, delivery and performance of this Note. This Note has
been duly executed and delivered on behalf of the Maker and constitutes the
legal, valid and binding obligation of the Maker enforceable against the Maker
in accordance with its terms, subject to the effect of applicable bankruptcy
and other similar laws affecting the rights of creditors generally and the
effect of equitable principles whether applied in an action at law or a suit in
equity.

 

(c)                                  The
execution, delivery and performance of this Note, the borrowing hereunder and
the use of the proceeds hereof, will not violate any provision of Maker’s
Certificate of Incorporation, Bylaws or requirement of law.

 

8.                                       Affirmative Covenants; Noteholder Acknowledgement;
Noteholder Representation. The Maker agrees to provide the
Noteholder with prompt notice of any written commitments entered into which, if
closed, would constitute the Next Financing, and to provide the Noteholder with
at least twenty four hours’ prior notice of the closing of the Next Financing.
The Noteholder hereby represents and warrants to the Maker that the Noteholder,
is an ‘accredited investor’ as that term is defined in Rule 501(a) of
Regulation D promulgated under the Securities Act.

 

9.                                       Negative Covenants. The Maker
agrees that, as long as any obligations under this Note remain unpaid, it shall
not, directly or indirectly without the prior written consent of Noteholder:

 

 

(a)                                  liquidate
or dissolve or enter into any sale, consolidation, merger, partnership, joint
venture, syndicate or other combination, unless the Maker is the surviving
entity;

 

(b)                                 sell,
lease, assign, transfer or otherwise dispose of all or substantially all of
Maker’s assets; provided that the Maker may sell, lease, assign or transfer any
portion of its real or personal property; and

 

(c)                                  engage
in any business activities substantially different from the Maker’s business as
described in its current business plan delivered to Noteholder
contemporaneously herewith.

 

10.                                 Events of Default. Upon the
occurrence of any of the following events (each, an “Event of
Default”):

 

(a)                                  The
Maker shall fail to pay any amount due under this Note; or

 

(b)                                 Any
representation or warranty made by the Maker in this Note shall be materially
inaccurate or incomplete; provided, that any such inaccurate or incomplete
representation or warranty shall not constitute an Event of Default if it is
corrected within five (5) days after any officer or employee of the Maker
obtains knowledge of such inaccuracy or incompleteness, and the corrected or
revised representation or warranty made by the Maker is acceptable to the
Noteholder; or

 

(c)                                  The
Maker shall fail to observe or perform in any material respect any of the other
terms or provisions of this Note and such failure shall continue for five (5) days;
or

 

THEN, automatically upon
the occurrence of an Event of Default at the option of the Noteholder, in each
case without notice to or demand upon the Maker or any other party, the entire
principal balance hereof together with all accrued and unpaid interest thereon
shall become immediately due and payable.

 

11.                                 Costs and Expenses.  If any default occurs in any payment due
under this Note, the Maker and all guarantors and endorsers hereof, and their
successors and assigns, promise to pay all costs and expenses, including
attorneys’ fees, incurred by the Noteholder hereof in collecting or attempting
to collect the indebtedness under this Note, whether or not any action or
proceeding is commenced, and hereby waive the right to plead any and all
statutes of limitation as a defense to a demand hereunder to the full extent
permitted by law.

 

12.                                 Acceptance of Past Due Payments and Indulgences Not
Waivers.  None of the
provisions hereof and none of the Noteholder’s rights or remedies hereunder on
account of any past or future defaults shall be deemed to have been waived by the
Noteholder’s acceptance of any past due installments or by any indulgence
granted by the Noteholder to the Maker.

 

13.                                 Waivers by the Maker; No Setoffs or Counterclaims.  The Maker and all guarantors and endorsers
hereof, and their successors and assigns, hereby waive presentment, 

 

 

demand, protest and
notice thereof or of dishonor, and agree that they shall remain liable for all
amounts due hereunder notwithstanding any extension of time or change in the
terms of payment of this Note granted by the Noteholder, any change, alteration
or release of any property now or hereafter securing the payment hereof or any
delay or failure by the Noteholder to exercise any rights under this Note. All
payments required by this Note shall be made without setoff or counterclaim.

 

14.                                 Assignment. The Maker may not
assign its rights or obligations under this Note without the prior written
consent of the Noteholder and any such purported assignment by the Maker
without obtaining the prior written consent of the Noteholder shall be void ab
initio. This Note shall inure to the heirs, legal representatives, successors
and assigns of the Noteholder.

 

15.                                 Notices.  All notices given by the Maker or the
Noteholder hereunder to the other shall be in writing, delivered by facsimile
transmission (confirmed in writing) or delivered personally or by depositing
the same in the United States mail, registered, with postage prepaid, addressed
as follows:

 

	
  Noteholder:

  	
   

  	
  Shapiro Family Trust
  Dated September 25, 1989

  
	
   

  	
   

  	
  17567 Camino de y Yatasto

  
	
   

  	
   

  	
  Pacific Palisades,
  California 90272

  
	
   

  	
   

  	
   

  
	
  Maker:

  	
   

  	
  Advanced Cell
  Technology, Inc.

  
	
   

  	
   

  	
  11100 Santa Monica
  Boulevard, Suite 850

  
	
   

  	
   

  	
  Los Angeles, CA 90025

  

 

Either the Noteholder or
the Maker may change the address to which notices are to be sent by notice of
such change to the other given as provided herein. Such notices shall be
effective on the date received or, if mailed, on the third business day
following the date mailed.

 

16.                                 Governing Law.  This Note is governed by the laws of the
State of California, without regard to the choice of law rules of that
State.

 

17.                                 Waiver of Jury Trial.  THE MAKER HEREBY WAIVES ANY RIGHT TO HAVE A
JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT
OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THIS
NOTE. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL
WITHOUT A JURY.

 

 

IN WITNESS WHEREOF, the
Maker has caused this Convertible Note to be duly executed the day and year
first above written.

 

	
   

  	
  ADVANCED CELL
  TECHNOLOGY,

  
	
   

  	
  INC., a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William M.
  Caldwell, IV

  
	
   

  	
  Name: William M.
  Caldwell, IV

  
	
   

  	
  Title: Chairman and CEO

  

 

5

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