EXHIBIT
10.1
WARRANT REPURCHASE
AGREEMENT
THIS WARRANT REPURCHASE AGREEMENT (this
“ Agreement ”), dated as of April 1, 2009, is
entered into by and between HepaLife Technologies, Inc., a Florida
corporation (“ HepaLife ”), and Arbios Systems,
Inc., a Delaware corporation (“ Arbios
”).
RECITALS
A. Pursuant to that certain Asset
Purchase Agreement, dated October 3, 2008 (the “ Asset
Purchase Agreement ”), Arbios sold to HepaLife the
Acquired Assets (as defined in the Asset Purchase Agreement). All
capitalized terms not otherwise defined in this Agreement shall
have the meanings attributed to them in the Asset Purchase
Agreement.
B. In consideration for the
Acquired Assets, HepaLife (i) paid Arbios $250,000 in cash at the
Closing, (ii) issued to Arbios a Series D warrant to purchase up to
750,000 shares of HepaLife’ common stock at an exercise price
of $0.35 per share (the “ Warrant ”), (iii)
assumed the Assumed Liabilities, and (iv) agreed to pay to Arbios
the sum of Two Hundred Thousand Dollars ($200,000) (the “
Deferred Cash Purchase Price ”) on or before the
Deferred Payment Date.
C. On January 9, 2009, Arbios filed a
voluntary petition for relief under chapter 11of the Bankruptcy
Code in the United States Bankruptcy Court for the District of
Delaware (the“ Bankruptcy Court ”).
D. On March 16, 2009, Arbios entered into
a term sheet with Arbios Acquisitions Partners LLC that describes
the terms under which Arbios Acquisitions Partners LLC (i) is
providing Arbios with certain funds and (ii) intends to acquire
control over Arbios’ assets (including the Warrant) (The
“Plan Term Sheet”).
E. On April 1, 2009, Arbios made a
motion for approval of the Plan Term Sheet,which motion is
currently pending before the Bankruptcy Court.
F. HepaLife desires to repurchase from
Arbios the Warrant, and Arbios desires to sell to HepaLife the
Warrant, all on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the
mutual promises of the parties hereto, and of good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 1.
WARRANT REPURCHASE; COVENANTS
1.1. Repurchase of Warrant.
Subject to the terms and conditions contained in this Agreement,
including the approval of the Bankruptcy Court, Arbios hereby
agrees to sell the Warrant to HepaLife, and HepaLife hereby agrees
to repurchase the Warrant from Arbios. In consideration for the
repurchase of the Warrant, HepaLife hereby agrees to accelerate the
Deferred Payment Date to the date on which the repurchase of the
Warrant is completed and,accordingly, agrees to pay Arbios the
entire Deferred Purchase Price in cash on that date.
1.2. Bankruptcy Court Approval;
Termination of Agreement. Arbios hereby agrees to promptly make
a motion before the Bankruptcy Court to obtain the approval for the
repurchase of the Warrant in accordance with the terms of this
Agreement. In the event that the Bankruptcy Court (i) denies the
request to complete the Warrant repurchase, or (ii) the Bankruptcy
Court has not granted its approval for the Warrant repurchase by
June 15, 2009, this Agreement shall automatically terminate on such
date, and all obligations of the parties hereto to complete the
repurchase of the Warrant shall cease.
1.3. Completion of Repurchase. The
consummation of the repurchase of the Warrant contemplated hereby
shall be effected on the third business day following the date on
which the Bankruptcy Court issues an Final Order approving the
transactions contemplated hereby, or on such other date as the
parties may, after the issuance of the Final Order, mutually agree
upon in writing. On the date of the consummation of the repurchase,
(i) HepaLife shall pay Arbios the entire $200,000 Deferred Purchase
Price by wire transfer of immediately available funds, and (ii)
Arbios shall deliver to HepaLife the originally executed Warrant,
du
