Document:

Exhibit 10.5

 

September       , 2005

 

To the
Purchasers as Defined

in the Purchase Agreement

 

Re:                               Lock-up Letter

 

Purchasers:

 

Reference is
made to the Securities Purchase Agreement, dated September 15, 2005 (the “Purchase
Agreement”), among Advanced Cell Technology, Inc. (the “Company”)
and the purchasers signatory thereto (the “Purchasers”). Capitalized terms used herein but not otherwise defined shall have the
meaning ascribed to them in the Purchase Agreement.

 

In order to
induce the Purchasers to enter into the Purchaser Agreement, from the date
hereof until the one year anniversary following the Effective Date of the
Registration Statement, the undersigned will not offer, sell, contract to sell,
pledge or otherwise dispose of, (or enter into any transaction which is
designed to, or might reasonably be expected to, result in the disposition
(whether by actual disposition or effective economic disposition due to cash
settlement or otherwise) by the undersigned or any affiliate of the undersigned
or any person in privity with the undersigned or any affiliate of the
undersigned), directly or indirectly, including the filing (or participation in
the filing) of a registration statement with the Commission in respect of, or
establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange Act
and the rules and regulations of the Commission promulgated thereunder
(each, a “Transfer”) with respect to, any shares of Common Stock beneficially
owned or held by the undersigned. 
Beneficial ownership shall be calculated in accordance with Section 13(d) of
the Exchange Act.  In order to enforce
this covenant, the Company will impose irrevocable stop-transfer instructions
preventing the transfer agent from effecting any actions in violation of this
agreement.

 

Notwithstanding the foregoing, following the
Effective Date, in the event that the undersigned is no longer an officer or
director of the Company (the date on which such person is no longer an officer
or director the “Trigger Date”), and beneficially owns less than 500,000 shares
of Common Stock on the Trigger Date, then the undersigned shall be permitted to
make Transfers of the shares of the Company’s Common Stock held by the undersigned
on a quarterly basis, beginning on the calendar quarter following the later of (i) the
3 month anniversary of the Trigger Date and (ii) the date the undersigned
is no longer subject to the  requirements
of Section 16 of the Exchange Act, in an amount equal to 25% of the
aggregate number of shares of Common Stock owned by the undersigned as of the
Trigger Date (the undersigned acknowledges and agrees that the foregoing limits
on Transfers are noncumulative

 

 

and may not be carried over
from quarter to quarter).  All share
amounts shall be subject to adjustment for reverse and forward stock splits,
stock dividends, recapitalizations and the like.

 

The
undersigned acknowledges that the execution, delivery and performance of this
letter agreement is a material inducement to the Purchasers to complete the
transaction contemplated by the Purchase Agreement and that the Purchasers
(which shall be third party beneficiaries of this letter agreement) and the
Company shall be entitled to specific performance of my obligations
hereunder.  The undersigned hereby
represents that the undersigned has the power and authority to execute, deliver
and perform this letter agreement, that the undersigned has received adequate
consideration therefor and that the undersigned will indirectly benefit from
the closing of the transactions contemplated by the Purchase Agreement.

 

This letter
agreement may not be amended or otherwise modified in any respect without the
written consent of each of the Company, the Purchasers and the undersigned.  This letter agreement shall be construed and
enforced in accordance with the laws of the State of New York, without regard
to the principles of conflicts of laws. 
The undersigned hereby irrevocably submit to the exclusive jurisdiction
of the state and federal courts sitting in the City of New York, Borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waive, and agree not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, or that such suit, action or proceeding is improper.  The undersigned hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by receiving a copy thereof sent to the Company at
the address in effect for notices to it under the Purchase Agreement and agrees
that such service shall constitute good and sufficient service of process and
notice thereof.  The undersigned hereby
waives any right to a trial by jury. 
Nothing contained herein shall be deemed to limit in any way any right to
serve process in any manner permitted by law.  The
undersigned agrees and understands that this letter does not intend to create
any relationship between the undersigned and the Purchasers and that the
Purchasers are not entitled to cast any votes on the matters herein
contemplated and that no issuance or sale of the Securities is created or
intended by virtue of this letter.

 

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

 

 

	
   

  	
   

  
	
  Signature

  
	
   

  
	
   

  	
   

  
	
  Print Name

  
	
   

  
	
   

  	
   

  
	
  Position in Company

  
	
   

  
	
   

  	
   

  
	
  Number of shares of Common Stock

  
			

 

2

 

Number of shares of Common Stock underlying subject to warrants,
options, debentures or other convertible securities

 

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

 

	
   

  	
  ADVANCED CELL TECHNOLOGY, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William
  M. Caldwell, IV

  	
   

  
	
   

  	
   

  	
  Name: 
  William M. Caldwell, IV

  
	
   

  	
   

  	
  Title:  Chief Executive Officer

  

 

3Exhibit 10.6

 

SETTLEMENT
AGREEMENT

 

This Agreement is entered into this 14th
day of September, 2005, and is by and among Gary D. Aronson, individually and
as Trustee of the Gary D. Aronson IRA (“Aronson”), John Gorton, Trustee of John
S. Gorton Separate Property Trust Dated 3/3/93 (“Gorton” and together with
Aronson, the “Plaintiffs”), A.C.T. Group, Inc. (“Group”), Advanced Cell, Inc.,
a Delaware Corporation (“Cell”), Michael D. West (“West”), William M. Caldwell,
IV (“Caldwell”), Advanced Cell Technology, Inc., a Nevada corporation, formerly known as A.C.T. Holdings, Inc.,
(“Holdings”), Anthem Venture Partners (“Anthem”) and Greg Bonfiglio
(“Bonfiglio”).  Together, Group, Cell, and
West shall be referred to herein as the “Defendants”, and together Caldwell,
Anthem, Bonfiglio and Holdings shall be referred to herein as the “Third
Parties”.  Together, Defendants and the
Third Parties shall be referred to as the “ACT Parties”.

 

WHEREAS, Group is obligated to the Plaintiffs
pursuant to the promissory notes attached hereto as Exhibit A (the
“Notes”); and 

 

WHEREAS, Plaintiffs have commenced an action
against the Defendants in the Commonwealth of Massachusetts, Superior Court,
Worcester County, C.A. No. 04-0523 (the “Action”); and

 

WHEREAS, in connection with said Action, on February 18,
2005, the Plaintiffs filed a complaint for Contempt (the “First Complaint for
Contempt”); and 

 

WHEREAS, in connection with said Action, on April 20,
2005, the Plaintiffs filed a second complaint for Contempt (the “Second
Complaint for Contempt” and together with the “First Complaint for Contempt”,
the “Contempt Complaints”); and 

 

WHEREAS, the parties hereto wish to settle
the Action and Contempt Complaints pursuant to the terms and conditions
contained herein.

 

NOW THEREFORE, for good and valuable
consideration, the parties hereto hereby agree as follows:

 

1.                                       Actions
Required By Plaintiffs.  The
Plaintiffs hereby agree to take the following actions upon the receipt by the
Plaintiffs of all of the documents referred to in Section 2 below
(collectively referred to herein as the “ACT Party Documents”):

 

 

(a)                                  Dismiss
with prejudice the First Complaint for Contempt and the Second Complaint for
Contempt and file with the Court a Stipulation of Dismissal signed by all
parties which shall be in the form attached hereto as Exhibit B.  This stipulation of dismissal shall be
executed by the Plaintiffs and delivered to Holdings within three (3) business
days following the receipt by the Plaintiffs of the ACT Party Documents.

 

(b)                                 Assign
to Holdings all of the Plaintiffs’ right, title and interest in the Judgment
issued to the Plaintiffs in the Action. 
The assignment of the Judgment shall be in the form attached hereto as Exhibit C-1.  The assignment shall be executed and
delivered by the Plaintiffs within three (3) business days following the
receipt by the Plaintiffs of the ACT Party Documents.  

 

(c)                                  Assign
to Holdings all of the Plaintiffs’ right, title and interest in and to the
Notes.  The assignment of the Notes shall
be in form attached hereto as Exhibit C-2, provided however that
Plaintiffs shall not make any representations, warranties or covenants with
respect to the Notes, other than that that the Plaintiffs (severally) are the
sole holders of the Notes and have the right and power to assign the same to
Holdings.  The assignment and the
original Notes shall be delivered by the Plaintiffs within three (3) business
days following receipt by the Plaintiffs of the ACT Party Documents.  

 

(d)                                 Plaintiffs
shall execute and deliver to the ACT Parties the Release, the form of which is
attached hereto as Exhibit D (the “Aronson Release”).  The Aronson Release shall be delivered by the
Plaintiffs within three (3) business days following receipt by the
Plaintiffs of the ACT Party Documents.

 

2.                                       Actions
Required by Certain ACT Parties. 
Those ACT Parties separately identified below hereby agree to take the
following actions, all of which shall be completed on or before 5:00 p.m.
EST, September 14, 2005:

 

(a)                                  Holdings
will transfer by electronic funds to Plaintiffs’ Attorneys, Craig and Macauley
Professional Corporation, in accordance with the wiring instruction attached
hereto as

 

 

Exhibit E, the
sum of (i) $194,298.44 (the “Legal Fee Amount”) and (ii) $138,226.00
(the “Cash Payment”).  The Legal Fee
Amount represents the legal fees and expenses incurred by Plaintiffs in
connection with the enforcement and attempted collection of the Notes and in
connection with the representation of the Plaintiffs in any way related to the
Notes as well as fees and expenses anticipated to be incurred by the Plaintiffs
in connection with this Agreement, the agreements contemplated hereby, and the
settlement of the Action.   If the actual
amount of the legal fees and costs exceed the Legal Fee Amount as of the start
of the seventh month following the date hereof, the ACT Parties shall upon
demand pay to the Plaintiffs such additional amounts provided that such
additional amounts shall not exceed $30,000.00.

 

(b)                                 Holdings
shall execute and deliver to Plaintiffs the promissory notes attached hereto as
Exhibit F (the “Holdings Notes”). 
The outstanding principal and accrued interest under such notes may be
converted into shares of Holdings pursuant to the terms contained in the
Warrants attached hereto at Exhibit G-1 and Exhibit G-2.

 

(c)                                  Holdings
shall execute and deliver to Plaintiffs the Warrants attached hereto as Exhibit G-1
and Exhibit G-2 (together, the “Warrants”).

 

(d)                                 The
ACT Parties shall execute and deliver to the Plaintiffs the Release, the form
of which is attached hereto as Exhibit H.

 

(e)                                  Holdings, Group and Cell and
Anthem shall deliver to the Plaintiffs evidence of authority and necessary
action to bind such parties to the actions taken hereunder and under the
documents to be delivered hereunder, in form and substance satisfactory to the
Plaintiffs, including without limitation, certificates of the secretary of each
certifying as to the corporate votes/resolutions, incumbency of officers, article of
incorporation and by-laws.  

 

3.                                       Remedies.  In the event of a breach of this Agreement by
any of the parties hereto, the non-breaching party shall be entitled, in
addition to any other

 

 

remedy that may be available to
it, to a decree or order of specific performance to enforce the observance and
performance of such obligations hereunder. 

 

4.                                       Representations
and Warranties- ACT Parties.  Each of
the ACT Parties hereby represents and warrants to the Plaintiffs as of the date
hereof that:

 

4.1                                 Each
has all requisite power and authority to execute and deliver, and to perform
all of its obligations under, this Agreement and all instruments and other
documents executed and delivered to the Plaintiffs in connection herewith.

 

4.2                                 The
execution, delivery and performance of this Agreement and the documents to be
executed and delivered in connection herewith by each has been duly authorized
by all necessary action on the part of each and does not and will not require
any consent or approval of any other person that has not been obtained or
violate any provision of its charter or bylaws.

 

4.3                                 This
Agreement and each of the documents to be delivered in connection herewith
constitutes a legal, valid and binding obligation enforceable against it in
accordance with its terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general applicability
relating to or affecting the enforcement of creditor’s rights and general
equitable principles which may limit the availability of equitable remedies.

 

5.                                       Representations
and Warranties- Plaintiffs.  Each of
the Plaintiffs hereby represents and warrants to the ACT Parties as of the date
hereof that:

 

5.1                                 Each
has all requisite power and authority to execute and deliver, and to perform
all of its obligations under, this Agreement and all instruments and other
documents executed and delivered to the ACT Parties in connection herewith. In
addition, each Plaintiff who signs this Agreement in a representative capacity
represents and warrants that he or she is duly authorized to do so.

 

5.2                                 The
execution, delivery and performance of this Agreement and the documents to be
executed and delivered in connection herewith by each has been duly authorized
by all necessary action on the part of each and does not and will not require
any consent or approval of any other person that has not been obtained or
violate any provision of its organizational documents, to the extent
applicable.

 

 

5.3                                 This
Agreement and each of the documents to be delivered in connection herewith
constitutes a legal, valid and binding obligation enforceable against he, she,
or it in accordance with its terms, except as limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws of general
applicability relating to or affecting the enforcement of creditor’s rights and
general equitable principles which may limit the availability of equitable
remedies.

 

5.4                                 The
Plaintiffs hereby represent and warrant to the Company that each is an
“accredited investor” as defined in Section 501 of Regulation D of the
Securities Act of 1933, as amended (the “Securities Act”). 

 

5.5                                 The
Plaintiffs further hereby represent and warrant to the Company that each such
Plaintiff (1) has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of an investment in
the Company; and (2) can afford to bear the economic risk of this
investment for an indefinite period of time and has no need for liquidity in
this investment.

 

5.6                                 The
Plaintiffs further hereby represent and warrant to the Company that each such
Plaintiff (1) is acquiring the Holdings Notes and Warrants for his, her or
its own account, for investment, and not with a view to resale or distribution;
and (2) is aware that the right to transfer the Holdings Notes and
Warrants is restricted by the Securities Act of 1933, as amended, and
applicable state securities laws.

 

6.                                       Notices:  All notices or deliveries required or
permitted hereunder shall be in writing and may be given either by personal
delivery or by depositing same in the United States Mail, with sufficient
postage prepaid and sent by registered or certified mail, return receipt
requested, addressed to the party set forth below, or such other address as
either party may hereafter designate by notice to the other party, making
specific reference to this paragraph of the Agreement.

 

PLAINTIFFS:

 

	
   

  	
  Gary D. Aronson

  
	
   

  	
  774 Mays Blvd.-10-PMB 128

  
	
   

  	
  Incline Village, NV 89451

  
	
   

  	
   

  
	
   

  	
  and

  

 

 

	
   

  	
  John Gorton

  
	
   

  	
  2658 Del Mar Heights Road

  
	
   

  	
  #366

  
	
   

  	
  Del Mar, CA 92014

  
	
   

  	
   

  
	
  with a copy to:

  	
   

  
	
   

  	
   

  
	
   

  	
  Martin P. Desmery, Esquire

  
	
   

  	
  Craig and Macauley Professional Corporation

  
	
   

  	
  Federal Reserve Plaza

  
	
   

  	
  600 Atlantic Avenue

  
	
   

  	
  Boston, Massachusetts 02210

  
	
   

  	
   

  
	
  ACT PARTIES:

  	
  Advanced Cell Technology, Inc.

  
	
   

  	
  381 Plantation Street

  
	
   

  	
  Worcester, MA 01605

  
	
   

  	
  Attn: William M. Caldwell IV

  
	
   

  	
   

  
	
  with a copy to:

  	
   

  
	
   

  	
   

  
	
   

  	
  Christopher E. Howard, Esquire

  
	
   

  	
  Pierce Atwood LLP

  
	
   

  	
  One Monument Square

  
	
   

  	
  Portland, ME 04101

  

 

 

7.                                       Severability:  Each part of this Agreement is intended to be
several.  If any term, covenant,
condition or provision hereof is unlawful, invalid, or unenforceable for any
reason whatsoever, such illegality, invalidity, or unenforceability shall not
affect the legality, validity, or enforceability of the remaining parts of this
Agreement, and all such remaining parts hereof shall be valid and enforceable
and have full force and effects as if the invalid or unenforceable part had not
be included.

 

8.                                       Assignment:  This Agreement and the terms, covenants,
conditions, provisions, obligations, undertakings, rights and benefits hereof,
including the attachments hereto, shall be binding upon, and shall inure to the
benefit of, the undersigned parties and their respective heirs, executors,
administrators, representatives, successors, and assigns, provided however that
none of the parties hereto may assign their rights or obligations hereunder
without the prior written consent of all of the parties hereto, and no such
attempted assignment shall be valid.

 

 

9.                                       Prior
Understandings:  This Agreement
supersedes any and all prior discussions and agreements between the parties
hereto with respect to the matters contained herein, and this Agreement
contains the sole and entire understanding between the parties hereto with
respect to the transactions contemplated hereby.

 

10.                                 Governing
Law:  This Agreement shall be
governed by and construed and enforced in accordance with the internal laws of
the Commonwealth of Massachusetts.

 

11.                                 Jurisdiction:  With regard to any action related to this
Agreement or the ACT Party Documents, service of process may be made upon the
parties hereto by certified mail, return receipt requested, addressed to such
party, as the case may be, at the address set forth in this Agreement, and the
parties hereby agree to submit to the jurisdiction of any state or federal
court located in the Commonwealth of Massachusetts.

 

12.                                 Collection
Costs and Arbitration: Subject to Section 2(a) above, any
attorney’s fees and costs incurred by any of the Plaintiffs hereafter in
connection with the enforcement of the terms of this agreement and any of the
ACT Party Documents, shall, together with interest at the applicable legal rate
from the date incurred (or if there is no such legal rate, at 12% per annum) be
paid on demand by Holdings.  This
Agreement and all of the ACT Party Documents may, at the option of any of the
Plaintiffs, be enforced via an expedited binding arbitration under the auspices
of the Judicial Arbitration and Mediation Service (JAMS), under the JAMS
streamlined arbitration rules and procedures, which judgment shall be
final, non-appealable (except in cases of manifest arbitrator impropriety) and
enforceable in any court of competent jurisdiction.

 

13.                                 Time
of Essence:  Time is of the essence
of this Agreement.

 

14.                                 Several
Obligations:  The obligations of the
ACT Parties hereunder shall be several and not joint.  The obligations of the Plaintiffs hereunder
shall be several.

 

15.                                 Non-Disparagement:  The Plaintiffs and the ACT Parties, having
knowledge of this Agreement, agree that they shall not disparage, slander,
libel and will not interfere with the business of the other party, corporation
or entity, in trade, or to any member of the general public.  Nothing herein shall prevent any of the
parties hereto from pursuing claims, or defending itself in connection with any
claims asserted against it; provided, however, in no event shall either party
pursue any claim or take any other action that is other prohibited under the
applicable Releases executed in connection herewith.

 

 

16.                                 Independent
Decision:  Each of the Plaintiffs and
the ACT Parties, in making the decision to enter into this Agreement, has
relied upon independent investigations made by it, has conducted its own due
diligence investigation, has been given access and the opportunity review all
information it deemed relevant, and has consulted with his, her or its own
attorney(s) or other advisers prior to entering into this Agreement.

 

17.                                 Execution:  This document may be executed in several
counterparts, each of which shall constitute an original and all of which, when
taken together, shall constitute on agreement. 
A facsimile signature on a signature page hereof shall be
considered an original signature for all purposes.

 

(signature pages to
follow)

 

 

Executed under seal the date
first written above.

 

 

	
  /s/ Sharyl Grayson

  	
   

  	
  /s/ Gary D. Aronson

  	
   

  
	
  Witness

  	
  Gary D. Aronson, Individually and as

  Trustee of the Gary D. Aronson IRA

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ illegible

  	
   

  	
  /s/ John Gorton

  	
   

  
	
  Witness

  	
  John Gorton, Trustee of John S. Gorton

  Separate Property Trust dated 03/03/93

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  A.C.T. GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Karen Carter

  	
   

  	
  By:

  	
  /s/ Michael D. West

  	
   

  
	
  Witness

  	
   

  	
  Michael D. West, President

  
	
   

  	
   

  
	
   

  	
  ADVANCED CELL, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
  (f/k/a Advanced Cell Technology, Inc.)

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Jonathan Atzen

  	
   

  	
  By:

  	
  /s/ William M. Caldwell, IV

  	
   

  
	
  Witness

  	
   

  	
  Name: William M. Caldwell, IV

  
	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Karen Carter

  	
   

  	
  /s/ Michael D. West

  	
   

  
	
  Witness

  	
  Michael D. West

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Jonathan Atzen

  	
   

  	
  /s/ William M. Caldwell, IV

  	
   

  
	
  Witness

  	
  William M. Caldwell, IV

  

 

 

	
   

  	
   

  	
  ADVANCED CELL TECHNOLOGY, INC.,

  
	
   

  	
   

  	
  a Nevada corporation, formerly known as

  
	
   

  	
   

  	
  A.C.T. Holdings, Inc.

  
	
   

  	
   

  	
   

  
	
  /s/ Jonathan Atzen

  	
   

  	
  By:

  	
  /s/ William M. Caldwell, IV

  	
   

  
	
  Witness

  	
   

  	
   

  	
  William M. Caldwell, IV

  
	
   

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ANTHEM VENTURE PARTNERS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ illegible

  	
   

  	
  By:

  	
  /s/ Gregory Bonfiglio

  	
   

  
	
  Witness

  	
   

  	
   

  	
  Name: Gregory Bonfiglio

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ illegible

  	
   

  	
  /s/ Gregory Bonfiglio

  	
   

  
	
  Witness

  	
   

  	
  Greg Bonfiglio

  

 

 

 

Settlement

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