Document:

Exhibit 4.3

 

ADVANCED
CELL TECHNOLOGY, INC.

WARRANT AGREEMENT

 

This Warrant Agreement,
dated as of December 13, 2004 (the “Effective Date”), certifies
that                         (the
“Holder”), is the owner
of                    warrants
(subject to adjustment as provided herein), each of which represent the right
to subscribe for and purchase from Advanced Cell Technology, Inc., a
Delaware corporation (the “Company”), one share of the Company’s common stock,
$.001 par value, (such common stock, including any stock into which it may be
changed, reclassified or converted, is herein referred to as the “Common
Stock”) (“Warrants”) at the purchase price of $0.25 per share (subject to
adjustment as provided herein) (the “Exercise Price”), which have been issued
by the Company as compensation for consulting services provided by the Holder
to the Company.

 

THE SECURITIES REPRESENTED BY THIS AGREEMENT ARE OFFERED FOR
INVESTMENT ONLY AND HAVE NOT BEEN REGISTERED PURSUANT TO THE PROVISIONS OF THE
SECURITIES ACT OF 1933 FROM REGISTRATION AS AMENDED (“ACT”), AND HAVE BEEN
OFFERED AND SOLD IN RELIANCE UPON THE EXEMPTION, SPECIFIED IN SECTION 4(2) OF THE ACT AND RULE 506 OF
REGULATION D PROMULGATED PURSUANT THERETO. WITHOUT SUCH REGISTRATION, SUCH
SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF, EXCEPT UPON DELIVERY TO THE COMPANY AND ITS TRANSFER AGENT OF AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT THAT SUCH REGISTRATION IS
NOT REQUIRED FOR SUCH TRANSFER; OR THE SUBMISSION TO THE COMPANY OR ITS
TRANSFER AGENT OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE
COMPANY AND ITS TRANSFER AGENT TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT
BE IN VIOLATION OF THE ACT, APPLICABLE STATE SECURITIES LAWS OR ANY RULE OR
REGULATION PROMULGATED PURSUANT THERETO.

 

The
Warrants are subject to the following provisions, terms and conditions:

 

1. EXERCISE OF WARRANTS

 

Exercise of Warrants. The Warrants may be exercised by the Holder,
in whole or in part (but not as to a fractional share of Common Stock), by
surrender of this Warrant Agreement at the principal office of the Company
located at One Innovation Drive, Worcester, MA 01605 (or such other office or
agency of the Company as may be designated by notice in writing to the Holder
at the address of such Holder appearing on the books and records of the
Company), with the appropriate form attached hereto duly exercised, at any time
within the period beginning on the Effective Date and ending on that date exactly
twenty-four (24) months from the Effective Date (the “Exercise Period”) and by
payment to the Company by (1) certified check or bank draft of the
purchase price for such shares of the Common Stock or (2) an election to
exercise the Warrants on a cashless basis. The Company agrees that the shares
of Common Stock so purchased shall be deemed to be issued to the Holder as the
record owner of such shares of Common Stock as of the close of business on the
date on which the Warrant Agreement shall have been surrendered and payment
made for

 

 

such shares of Common Stock.
Certificates representing the shares of Common Stock 2 so purchased shall be
delivered to the Holder promptly and in no event later than thirty (30) days
after the Warrants shall have been so exercised.

 

2. ADJUSTMENTS AND NOTICES

 

A. Adjustments.
The Exercise Price and the number of shares of Common Stock issuable upon
exercise of each Warrant shall be subject to adjustment from time to time, as
follows:

 

(1) Stock Dividends; Stock Splits; Reverse Stock Splits; and
Reclassifications. In the
event that the Company shall (a) pay a dividend with respect to its
capital stock in shares of Common Stock, (b) subdivide its issued and
outstanding shares of Common Stock, (c) combine its issued and outstanding
shares of common stock into a smaller number of shares of any class of Common
Stock or (d) issue any shares of its capital stock in a reclassification
of the Common Stock (including any such reclassification in connection with a
merger, consolidation or other business combination in which the Company is the
continuing corporation) (any one of which actions is herein referred to as an
“Adjustment Event”), the number of shares of Common Stock purchasable upon
exercise of each Warrant immediately prior to the record date for such
Adjustment Event shall be adjusted so that the Holder shall thereafter be
entitled to receive the number of shares of Common Stock or other securities of
the Company (such other securities thereafter enjoying the rights of shares of
Common Stock pursuant to this Warrant Agreement) that such Holder would have
owned or have been entitled to receive after the happening of such Adjustment
Event, had such Warrant been exercised immediately prior to the happening of
such Adjustment Event or any record date with respect thereto. An adjustment
made pursuant to this Section 2A(1) shall become effective
immediately after the effective date of such Adjustment Event retroactive to
the record date, if any, for such Adjustment Event.

 

(2) Adjustment of Exercise Price. Whenever the number of shares of Common
Stock purchasable upon the exercise of each Warrant is adjusted pursuant to
Section 2A(1) of this Warrant Agreement, the Exercise Price for each
share of Common Stock payable upon exercise of each Warrant shall be adjusted
by multiplying such Exercise Price immediately prior to such adjustment by a
fraction, the numerator of which shall be the number of shares of Common Stock
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and the denominator of which shall be the number of shares of
Common Stock so purchasable immediately thereafter.

 

(3) De Minimis Adjustments. No adjustment in the number of shares of Common Stock purchasable
pursuant to this Warrant Agreement shall be required, unless such adjustment
would require an increase or decease of at least one percent (1%) in the number of shares of Common Stock
purchasable upon an exercise of each Warrant; provided, however, that any
adjustments which by reason of this Section 2A(3) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations shall be made to the nearest full share.

 

B. Notice of Adjustment. Whenever the number of shares of Common Stock purchasable upon the
exercise of each Warrant or the Exercise Price is adjusted, as herein

 

2

 

provided,
the Company shall promptly notify the Holder in writing (such writing referred
to as an “Adjustment Notice”) of such adjustment or adjustments and shall
deliver to the Holder a certificate of a firm of independent public accountants
selected by the Board of Directors of the Company (who may be the regular
accountants employed by the Company) or of the Independent Financial Expert, if
any, which makes a determination of Current Market Value with respect to any
such adjustment setting forth the number of shares of Common Stock purchasable
upon the exercise of each Warrant and the Exercise Price after such adjustment,
setting forth a brief statement of the facts requiring such adjustment and
setting forth the computation by which such adjustment was made.

 

C. Amendment of Warrant Agreement. This Warrant Agreement may not be changed
because of any change in the Exercise Price or in the number of shares of
Common Stock purchasable upon the exercise of a Warrant. The Company may at the
time in the Company’s sole discretion make any change in the form of a warrant
agreement that the Company may deem appropriate and that does not affect the
substance thereof and any warrant agreement thereafter issued, whether in
exchange or substitution for any outstanding warrant agreement or otherwise,
may be in the form so changed.

 

D. Notice to Holder of Record Date, Dissolution, Liquidation
or Winding Up. The
Company shall cause to be mailed (by first class mail, postage prepaid) to the
Holder notice of the record date for any dividend, distribution or payment, in
cash or in kind (including, without limitation, evidence of indebtedness and
assets), with respect to shares of Common Stock at least twenty (20) calendar
days before any such date. In the event that at any time after the date hereof,
there shall be a voluntary or involuntary dissolution, liquidation or winding
up of the Company, then the Company shall cause to be mailed (by first class
mail, postage prepaid) to the Holder at the Holder’s address as shown on the
books of the Company, at the earliest practicable time (and, in any event, not
less than twenty (20) calendar days before any date set for definitive action),
notice of the date on which such dissolution, liquidation or winding up shall
take place, as the case may be. The notices referred to above shall also
specify the date as of which the holders of the shares of Common Stock of
record or other securities underlying the Warrants shall be entitled to receive
such dividend, money or the property deliverable upon such dissolution,
liquidation or winding up, as the case may be (the “Entitlement Date”). In the
case of a distribution of evidence of indebtedness or assets (other than in
dissolution, liquidation or winding up), if the Holder elects to exercise the
Warrants in accordance with Section 1 of this Warrant Agreement and become
a holder of the Common Stock on the Entitlement Date, the Holder shall
thereafter receive the evidence of indebtedness or assets distributed in
respect of shares of Common Stock.

 

E. Fractional Interest. The Company shall not be required to issue
fractional shares of Common Stock on the exercise of the Warrants. If more than
one Warrant shall be presented for exercise in full at the same time by the
same holder, the number of full shares of Common Stock which shall be issuable
upon such exercise shall be computed on the basis of the aggregate number of
whole shares of Common Stock purchasable on exercise of the Warrants so
presented. If any fraction of a share of Common Stock would, except for the
provisions of this Section 2E be issuable on the exercise of the Warrants
(or specified proportion thereof), the Company shall pay an amount in cash
calculated by it to be equal to the then fair value of one share of Common
Stock, as determined by the Board of Directors

 

3

 

of the Company in good
faith, multiplied by such fraction computed to the nearest whole cent.

 

3. RESERVATION AND AUTHORIZATION OF COMMON STOCK The Company covenants and agrees
(a) that all shares of Common Stock which may be issued upon the exercise
of the Warrants will, upon issuance, be validly issued, fully paid and
nonassessable and free of all insurance or transfer taxes, liens and charges
with respect to the issue thereof; (b) that during the Exercise Period,
the Company will at all times have authorized, and reserved for the purpose of
issue or transfer upon exercise of the Warrants, sufficient shares of Common
Stock to provide for the exercise of the Warrants, and (c) that the
Company will take all such action as may be necessary to ensure that the shares
of Common Stock issuable upon the exercise of the Warrants may be so issued
without violation of any applicable law or regulation, or any requirements of
any domestic securities exchange upon which any capital stock of the Company
may be listed; provided, however, that nothing contained herein shall impose
upon the Company any obligation to register the Warrants or the Common Stock
pursuant applicable securities laws. In the event that any securities of the
Company, other than the Common Stock, are issuable upon exercise of the Warrants,
the Company will take or refrain from taking any action referred to in clauses
(a) through (c) of this Section 3 as though such clauses
applied, mutatis mutandis, to such other securities then issuable upon the
exercise the Warrants.

 

4. NO VOTING RIGHTS This Warrant Agreement shall not entitle the Holder to any voting
rights or other rights as a stockholder of the Company.

 

5. EXERCISE OR TRANSFER OF WARRANTS OR COMMON STOCK The Holder agrees to be obligated by any and
all provisions with respect to any and all limitations, including limitations
imposed by the Securities Act of 1933, as amended, regarding the Warrants and
the shares of Common Stock or other securities issuable upon exercise of the
Warrants. The Holder acknowledges and agrees that he or she is aware that there
are substantial restrictions on the transferability of the Warrants and the
shares of Common Stock or other securities issuable upon exercise of the
Warrants. The undersigned also acknowledges and 5 agrees that he or she shall be
responsible for compliance with all conditions on transfer imposed by a
Securities Administrator of any state, province or territory and for any
expenses incurred by the Company for legal and accounting services in
connection with reviewing such a proposed transfer and issuing opinions in
connection therewith.

 

6. LOCK-UP PROVISION In the event that the Board of Directors of
the Company determines, in its sole and absolute discretion, that it is in the
best interests of the Company and its shareholders to cause Holder to execute a
lockup/leak-out agreement related to the common stock underlying the Warrants
(whether such underlying common stock is registered or not), Holder
specifically agrees to execute such an agreement as presented by the Company.
The terms and conditions of such lockup/leak-out agreement, if necessary, shall
be set by the Company, in its sole and absolute discretion, and will include,
but not be limited to, at least a 12 month lockup/leak-out provision. In the
event that Holder refuses to execute the lockup/leak-out agreement (which may
be a condition precedent to the issuance o the stock underlying the Warrants),
the Holder herewith specifically agrees that the Company may refuse to issue
the common stock issuable upon exercise of the Warrants.

 

4

 

7. PIGGY-BACK REGISTRATION RIGHTS Subject to the exceptions specified in this
Section 7, in the event that the Company decides to file a registration
statement with the Securities and Exchange Commission (“Commission”) pursuant
to the 1933 Act, the Company shall provide Holder with written notice of its
intent to file a registration statement. Holder will then have fifteen (15)
days from the date appearing on the notice to request, in writing, that the
Company use its best efforts to include in that registration statement, for
registration, all or any portion of the common stock issuable upon exercise of
these Warrants. If Holder does not provide the Company with written notice
within fifteen (15) days, Holder loses Holder’s right to request registration
of the shares issuable upon the exercise of these Warrants. If proper notice is
given, the Company agrees to use its best efforts to prepare and file with the
Commission such amendments and supplements to the registration statement and
the prospectus used in connection with such registration statement necessary to
comply with the provisions of the 1933 Act and to cause such registration
statement to become effective. The Company shall pay all expenses and fees
incurred by Holder in registering all or any portion of the shares issuable
upon exercise of these Warrants. The exceptions to the piggy-back registration
rights granted herein (i.e., Holder will not have the right to request that the
Company register the common stock underlying the Warrants) are as follows:
(i) the registration statement filed by the Company is related or a
condition to a secondary offering conducted by the Company; or (ii) the
registration statement filed by the Company seeks to register stock whose
aggregate value (exclusive of the common stock issuable upon exercise of the
Warrants) is less than Ten Million Dollars ($10,000,000).

 

8. MERGERS, CONSOLIDATIONS, ETC. A. Except as may otherwise be provided, if
the Company shall merge or consolidate with another corporation, the Holder
shall thereafter have the right, upon exercise of the rights specified in this
Warrant Agreement and payment of the Exercise Price, to receive solely the kind
and amount of shares of stock (including, if applicable, Common Stock), other
securities, property or cash or any combination thereof receivable by a holder
of the number of shares of Common Stock for which this Warrant Agreement might
have been exercised immediately prior 6 to such merger or consolidation
(assuming, if applicable, that the holder of such Common Stock failed to
exercise its rights of election, if any, as to the kind or amount of shares of
stock, other securities, property or cash or combination thereof receivable
upon such merger or consolidation). B. In case of any reclassification or
change of the shares of Common Stock issuable upon exercise of (other than
elimination or par value, a change in par value, or from par value to no par
value, or as the result of a subdivision or combination of shares (which is
provided for elsewhere herein), but including any reclassification of the
shares of Common stock into two (2) or more classes or series of shares)
or in case of any merger or consolidation of another corporation into the
Company in which the Company is the surviving corporation and in which there is
a reclassification or change of the shares of Common Stock (other than a change
in par value, or from par value to no par value, or as a result of a
subdivision or combination (which is provided for elsewhere herein), but
including any reclassification of the shares of Common Stock, the Holder shall
thereafter have the right, upon exercise hereof and payment of the Exercise
Price, to receive solely the kind and amount of shares of stock (including, if
applicable, Common Stock), other securities, property or cash or any
combination thereof receivable upon such reclassification, change, merger or
consolidation by a holder of the number of shares of Common Stock for which the
rights specified in this Warrant Agreement might have been exercised
immediately prior to

 

5

 

such reclassification,
change, merger or consolidation (assuming, if applicable, that the holder of
such Common Stock failed to exercise its rights of election, if any, as to the
kind or amount of shares of stock, other securities, property or cash or
combination thereof receivable upon such reclassification, change, merger or
consolidation).

 

9. RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF WARRANTS The rights and obligations of the Company, of
the Holder, and of the holders of shares of Common Stock or other securities
issued upon exercise of the Warrants, specified in this Warrant Agreement shall
survive the exercise of the Warrants.

 

 

ADVANCED CELL TECHNOLOGY,
INC.,

a Delaware corporation

 

	
  By:

  	
   

  	
   

  
	
  Michael D. West

  
	
  Its President

  

 

6Exhibit
4.4

 

ADVANCED CELL TECHNOLOGY, INC.

WARRANT AGREEMENT

 

This
Warrant Agreement certifies that Gunnar Engstrom (the “Holder”), is the owner
of 100,000 warrants (subject to adjustment as provided herein), each of which
represent the right to subscribe for and purchase from A.C.T.
Holdings, Inc., a Nevada corporation (the “Company”), one share of the
Company’s common stock, $.001 par value, (such common stock, including any
stock into which it may be changed, reclassified or converted, is herein
referred to as the “Common Stock”) (“Warrants”) at the purchase price of $0.25
per share (subject to adjustment as provided herein) (the “Exercise Price”).

 

THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN
REGISTERED PURSUANT TO THE PROVISIONS OF THE SECURITIES ACT OF 1933 FROM
REGISTRATION AS AMENDED (“ACT”), AND HAVE BEEN ISSUED IN RELIANCE UPON THE
EXEMPTION, SPECIFIED IN SECTION 4(2) OF THE ACT AND RULE 506 OF
REGULATION D PROMULGATED PURSUANT THERETO. WITHOUT SUCH REGISTRATION, SUCH SECURITIES
MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF, EXCEPT UPON DELIVERY TO THE COMPANY AND ITS TRANSFER AGENT OF AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT THAT SUCH
REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER; OR THE SUBMISSION TO THE
COMPANY OR ITS TRANSFER AGENT OF SUCH OTHER EVIDENCE AS MAY BE
SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT TO THE EFFECT THAT ANY SUCH
TRANSFER SHALL NOT BE IN VIOLATION OF THE ACT, APPLICABLE STATE SECURITIES LAWS
OR ANY RULE OR REGULATION PROMULGATED PURSUANT THERETO.

 

The
Warrants are subject to the following provisions, terms and conditions:

 

1. EXERCISE OF WARRANTS

 

Exercise of Warrants. The
Warrants may be exercised by the Holder, in whole or in part (but not as to a
fractional share of Common Stock), by surrender of this Warrant Agreement at
the principal office of the Company located at 381 Plantation Street,
Worcester, MA 01605 (or such other office or agency of the Company as may be
designated by notice in writing to the Holder at the address of such Holder
appearing on the books and records of the Company), with the appropriate form
attached hereto duly exercised, at any time within the period of April 1,
2005 through April 1, 2010 (the “Exercise Period”) and by payment to the
Company by certified check or bank draft of the purchase price for such shares
of the Common Stock or an election to exercise the warrants on a cashless
basis. The Company agrees that the shares of Common Stock so purchased shall be
deemed to be issued to the Holder as the record owner of such shares of Common
Stock as of the close of business on the date on which the Warrant Agreement
shall have been surrendered and payment made for such shares of Common Stock or
the cashless exercise option is duly exercised. Certificates representing the
shares of Common Stock so purchased shall be delivered to the Holder promptly
and in no event later than ten(10) days after the Warrants shall have been
so exercised. The Company shall be responsible for any damages caused as a
direct result of a failure to deliver certificates on a timely basis.

 

 

This
Warrant Agreement is entered into pursuant to that certain Settlement Agreement
dated as of January 28, 2005, by and among the Company and the Holder, and
is subject to the provisions thereof.

 

2. ADJUSTMENTS AND NOTICES

 

A. Adjustments.
The Exercise Price and the number of shares of Common Stock issuable upon
exercise of each Warrant shall be subject to adjustment from time to time, as
follows:

 

(1) Stock Dividends; Stock Splits; Reverse Stock Splits; and
Reclassifications. In the
event that the Company shall (a) pay a dividend with respect to its
capital stock in shares of Common Stock, (b) subdivide its issued and
outstanding shares of Common Stock, (c) combine its issued and outstanding
shares of common stock into a smaller number of shares of any class of Common
Stock or (d) issue any shares of its capital stock in a reclassification
of the Common Stock (including any such reclassification in connection with a
merger, consolidation or other business combination in which the Company is the
continuing corporation) (any one of which actions is herein referred to as an
“Adjustment Event”), the number of shares of Common Stock purchasable upon exercise
of each Warrant immediately prior to the record date for such Adjustment Event
shall be adjusted so that the Holder shall thereafter be entitled to receive
the number of shares of Common Stock or other securities of the Company (such
other securities thereafter enjoying the rights of shares of Common Stock
pursuant to this Warrant Agreement) that such Holder would have owned or have
been entitled to receive after the happening of such Adjustment Event, had such
Warrant been exercised immediately prior to the happening of such Adjustment
Event or any record date with respect thereto. An adjustment made pursuant to
this Section 2A(1) shall become effective immediately after the
effective date of such Adjustment Event retroactive to the record date, if any,
for such Adjustment Event.

 

(2) Adjustment of Exercise Price. Whenever the number of shares of Common
Stock purchasable upon the exercise of each Warrant is adjusted pursuant to
Section 2A(1) of this Warrant Agreement, the Exercise Price for each
share of Common Stock payable upon exercise of each Warrant shall be adjusted
by multiplying such Exercise Price immediately prior to such adjustment by a
fraction, the numerator of which shall be the number of shares of Common Stock
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and the denominator of which shall be the number of shares of
Common Stock so purchasable immediately thereafter.

 

(3) De Minimis Adjustments. No adjustment in the number of shares of Common Stock purchasable
pursuant to this Warrant Agreement shall be required, unless such adjustment
would require an increase or
decease of at least one percent (1%) in the number of shares of Common Stock
purchasable upon an exercise of each Warrant; provided, however, that any
adjustments which by reason of this Section 2A(3) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations shall be made to the nearest full share.

 

B. Notice of Adjustment. Whenever the number of shares of Common Stock purchasable upon the
exercise of each Warrant or the Exercise Price is adjusted, as herein

 

2

 

provided,
the Company shall promptly notify the Holder in writing (such writing referred
to as an “Adjustment Notice”) of such adjustment or adjustments and shall
deliver to the Holder a certificate of a firm of independent public accountants
selected by the Board of Directors of the Company (who may be the regular accountants
employed by the Company) or of the Independent Financial Expert, if any, which
makes a determination of Current Market Value with respect to any such
adjustment setting forth the number of shares of Common Stock purchasable upon
the exercise of each Warrant and the Exercise Price after such adjustment,
setting forth a brief statement of the facts requiring such adjustment and
setting forth the computation by which such adjustment was made.

 

C. Amendment of Warrant Agreement. This Warrant Agreement may not be changed
because of any change in the Exercise Price or in the number of shares of
Common Stock purchasable upon the exercise of a Warrant. The Company may at the
time in the Company’s sole discretion make any change in the form of a warrant
agreement that the Company may deem appropriate and that does not affect the
substance thereof and any warrant agreement thereafter issued, whether in
exchange or substitution for any outstanding warrant agreement or otherwise,
may be in the form so changed.

 

D. Notice to Holder of Record Date, Dissolution, Liquidation or Winding
Up. The Company shall
cause to be mailed (by first class mail, postage prepaid) to the Holder notice
of the record date for any dividend, distribution or payment, in cash or in
kind (including, without limitation, evidence of indebtedness and assets), with
respect to shares of Common Stock at least twenty (20) calendar days before any
such date. In the event that at any time after the date hereof, there shall be
a voluntary or involuntary dissolution, liquidation or winding up of the
Company, then the Company shall cause to be mailed (by first class mail,
postage prepaid) to the Holder at the Holder’s address as shown on the books of
the Company, at the earliest practicable time (and, in any event, not less than
twenty (20) calendar days before any date set for definitive action), notice of
the date on which such dissolution, liquidation or winding up shall take place,
as the case may be. The notices referred to above shall also specify the date
as of which the holders of the shares of Common Stock of record or other
securities underlying the Warrants shall be entitled to receive such dividend,
money or the property deliverable upon such dissolution, liquidation or winding
up, as the case may be (the “Entitlement Date”). In the case of a distribution
of evidence of indebtedness or assets (other than in dissolution, liquidation
or winding up), if the Holder elects to exercise the Warrants in accordance
with Section 1 of this Warrant Agreement and become a holder of the Common
Stock on the Entitlement Date, the Holder shall thereafter receive the evidence
of indebtedness or assets distributed in respect of shares of Common Stock.

 

E. Fractional Interest. The Company shall not be required to issue fractional shares of Common
Stock on the exercise of the Warrants. If more than one Warrant shall be
presented for exercise in full at the same time by the same holder, the number
of full shares of Common Stock which shall be issuable upon such exercise shall
be computed on the basis of the aggregate number of whole shares of Common
Stock purchasable on exercise of the Warrants so presented. If any fraction of
a share of Common Stock would, except for the provisions of this
Section 2E be issuable on the exercise of the Warrants (or specified
proportion thereof), the Company shall pay an amount in cash calculated by it
to be equal to the then fair value of one share of Common Stock, based upon the
average closing price of the Common Stock on the OTC Bulletin Board (or other
exchange if the Common Stock

 

3

 

becomes
listed on an exchange) for the thirty (30) days preceding the date of
determination, multiplied by such fraction computed to the nearest whole cent.

 

3. RESERVATION AND AUTHORIZATION OF COMMON STOCK

 

The
Company covenants and agrees (a) that all shares of Common Stock which may
be issued upon the exercise of the Warrants will, upon issuance, be validly
issued, fully paid and nonassessable and free of all insurance or transfer
taxes, liens and charges with respect to the issue thereof; (b) that
during the Exercise Period, the Company will at all times have authorized, and
reserved for the purpose of issue or transfer upon exercise of the Warrants,
sufficient shares of Common Stock to provide for the exercise of the Warrants,
and (c) that the Company will take all such action as may be necessary to
ensure that the shares of Common Stock issuable upon the exercise of the
Warrants may be so issued without violation of any applicable law or
regulation, or any requirements of any domestic securities exchange upon which
any capital stock of the Company may be listed; provided, however, that nothing
contained herein shall impose upon the Company any obligation to register the
Warrants or the Common Stock pursuant applicable securities laws. In the event
that any securities of the Company, other than the Common Stock, are issuable
upon exercise of the Warrants, the Company will take or refrain from taking any
action referred to in clauses (a) through (c) of this Section 3
as though such clauses applied, mutatis mutandis, to such other securities then
issuable upon the exercise the Warrants.

 

4. NO VOTING RIGHTS

 

This
Warrant Agreement shall not entitle the Holder to any voting rights or other
rights as a stockholder of the Company.

 

5. CALL OF WARRANTS BY THE COMPANY

 

The
Company shall have the right to force the purchase, at the Exercise Price, of
any or all Warrants on or after the date (the “Call Date”) on which: (i) the
price (“price” shall be determined by taking the average between the bid and
ask prices over the preceding 30 day period) of the Company’s common stock as
reported on the Over the Counter Bulletin Board, or other nationally recognized
exchange, as the case may be, equals or exceeds $3.17 per share; and
(ii) the average trading volume of the Company’s common stock on the Over
the Counter Bulletin Board or other nationally recognized exchange, as the case
may be, equals or exceeds 20,000 shares per day over the previous 30 day
period, (collectively, the “Conditions to Call”). Should the Company determine
that the Conditions to Call have been satisfied, the Company shall provide the
Holder with written notice of its intent to call the warrants. The Holder shall
have ten (10) days from the date appearing on such notice to exercise the
Warrants as specified herein and tender the Exercise Price to the Company. If
the Holder fails to exercise the warrants within the specified period, all
Warrants issued in the name of Holder shall, without any other action by the
Company, terminate.

 

6. EXERCISE OR TRANSFER OF WARRANTS OR COMMON STOCK

 

The
Holder agrees to be obligated by any and all provisions with respect to any and
all limitations, including limitations imposed by the Securities Act of 1933,
as amended, regarding the Warrants and the shares of Common Stock or other
securities issuable upon

 

4

 

exercise of the Warrants. The Holder
acknowledges and agrees that he or she is aware that there are substantial
restrictions on the transferability of the Warrants and the shares of Common
Stock or other securities issuable upon exercise of the Warrants. The
undersigned also acknowledges and 5 agrees that he or she shall be responsible
for compliance with all conditions on transfer imposed by a Securities
Administrator of any state, province or territory and for any expenses incurred
by the Company for legal and accounting services in connection with reviewing
such a proposed transfer and issuing opinions in connection therewith.

 

7. PIGGY-BACK REGISTRATION RIGHTS

 

Subject
to the exceptions specified in this Section 7, in the event that the
Company decides to file a registration statement with the Securities and
Exchange Commission (“Commission”) pursuant to the 1933 Act, the Company shall
use its best efforts to include in that registration statement, for
registration, all or any portion of the common stock issuable upon exercise of
these Warrants. The Company agrees to use its best efforts to prepare and file
with the Commission such amendments and supplements to the registration
statement and the prospectus used in connection with such registration
statement necessary to comply with the provisions of the 1933 Act and to cause
such registration statement to become effective. The Company shall pay all
expenses and fees incurred by Holder in registering all or any portion of the
shares issuable upon exercise of these Warrants. The exceptions to the piggy-back
registration rights granted herein (i.e., Holder will not have the right to
request that the Company register the common stock underlying the Warrants) are
as follows: (i) the registration statement filed by the Company is related
or a condition to a secondary offering conducted by the Company; or
(ii) the registration statement filed by the Company seeks to register
stock whose aggregate value (exclusive of the common stock issuable upon
exercise of the Warrants) is less than Ten Million Dollars ($10,000,000).
Provided, however, that the foregoing exceptions shall not apply in the event
any shares of common stock (or shares of common stock underlying warrants or
options issued by the Company) held by directors, officers or reporting persons
under Section 16 of the Securities Exchange Act of 1934, as amended, are
registered in any such offering.

 

8. MERGERS, CONSOLIDATIONS, ETC.

 

Except
as may otherwise be provided, if the Company shall merge or consolidate with
another corporation, the Holder shall thereafter have the right, upon exercise
of the rights specified in this Warrant Agreement and payment of the Exercise
Price, to receive solely the kind and amount of shares of stock (including, if
applicable, Common Stock), other securities, property or cash or any
combination thereof receivable by a holder of the number of shares of Common
Stock for which this Warrant Agreement might have been exercised immediately
prior to such merger or consolidation (assuming, if applicable, that the holder
of such Common Stock failed to exercise its rights of election, if any, as to
the kind or amount of shares of stock, other securities, property or cash or
combination thereof receivable upon such merger or consolidation). B. In case
of any reclassification or change of the shares of Common Stock issuable upon
exercise of (other than elimination or par value, a change in par value, or
from par value to no par value, or as the result of a subdivision or
combination of shares (which is provided for elsewhere herein), but including
any

 

5

 

reclassification of the
shares of Common stock into two (2) or more classes or series of shares)
or in case of any merger or consolidation of another corporation into the
Company in which the Company is the surviving corporation and in which there is
a reclassification or change of the shares of Common Stock (other than a change
in par value, or from par value to no par value, or as a result of a
subdivision or combination (which is provided for elsewhere herein), but including
any reclassification of the shares of Common Stock, the Holder Shall thereafter
have the right, upon exercise hereof and payment of the Exercise Price, to
receive solely the kind and amount of shares of stock (including, if
applicable, Common Stock), other securities,
property or cash or any combination thereof receivable upon such
reclassification, change, merger or consolidation by a holder of the
number of shares of Common Stock for which the rights specified in this Warrant
Agreement might have been exercised immediately prior to such reclassification,
change, merger or consolidation (assuming, if applicable, that the holder of
such Common Stock failed to exercise its rights of election, if any, as to the
kind or amount of shares of stock, other securities, property or cash or
combination thereof receivable upon such reclassification, change, merger or
consolidation).

 

10. RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF WARRANTS

 

The
rights and obligations of the Company, of the Holder, and of the holders of
shares of Common Stock or other securities issued upon exercise of the
Warrants, specified in this Warrant Agreement shall survive the exercise of the
Warrants.

 

Dated:
November 30, 2004

 

	
   

  	
  COMPANY

  
	
   

  	
   

  
	
   

  	
  A.C.T. HOLDINGS, INC., a
  Nevada corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William M. Caldwell,
  IV

  	
   

  
	
   

  	
  William M. Caldwell, IV

  	
   

  
	
   

  	
  Its Chief Executive
  Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HOLDER

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Gunnar Engstrom

  	
   

  
	
   

  	
  Gunnar Engstrom

  

 

6

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