ADVANCED CELL TECHNOLOGY, INC. CONVERTIBLE NOTE

Exhibit 10.17

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

        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 PDP I, 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

Six Hundred Thousand Dollars ($600,000)

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. The Noteholder shall advance the Maker the sum of Three Hundred Thousand Dollars ($300,000.00) upon execution of this Note. The Maker shall have the right (but not the obligation), in its sole discretion, to request that the Noteholder fund the remaining Three Hundred Thousand ($300,000) to the Maker upon the request by the Noteholder at any time prior to the Maturity Date.

        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 September 30, 2007 (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 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

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  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.

            (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 Secti