Exhibit 10.1
FIRST
AMENDED AND RESTATED REVOLVING LINE OF CREDIT
AGREEMENT
by
and among
BIOTIME,
INC.
as
“Borrower”
and
ALFRED
D. KINGSLEY, GEORGE KARFUNKEL,
RICHARD
LOWISH, and BROADWOOD PARTNERS, LP
as
“Lenders”
Dated
as of October 17, 2007
TABLE OF CONTENTS
|
1.
|
General Definitions.
|
1
|
|
2.
|
Draws and Disbursements.
|
2
|
|
6.
|
Representations and Warranties of Borrower.
|
6
|
|
7.
|
Affirmative Covenants.
|
8
|
|
8.
|
Maximum Permitted Interest.
|
9
|
|
10.
|
Successors and Assigns.
|
10
|
|
11.
|
Entire Agreement; Amendment.
|
10
|
|
14.
|
Delays and Omissions.
|
11
|
|
15.
|
Rules of Construction.
|
11
|
|
17.
|
Investment Representations.
|
12
|
|
18.
|
Registration Rights.
|
13
|
FIRST AMENDED AND RESTATED REVOLVING LINE OF CREDIT
AGREEMENT
This
First Amended and Restated Revolving Line of Credit Agreement
(“Credit Agreement”) is made and entered into as
of October 17, 2007, by and among Alfred D. Kingsley, George
Karfunkel, Richard Lowish, and Broadwood Partners, L.P. (each
a “Lender,” and collectively
“Lenders”), and BioTime, Inc., a California
corporation (“Borrower”), and amends and restates
that certain Revolving Line of Credit Agreement dated April
12, 2006.
RECITALS
Borrower
has requested a credit facility consisting of a revolving line
of credit, and Lenders are willing to make the requested
credit facility to Borrower, but only upon the terms, and
subject to the conditions, contained herein.
AGREEMENT
Now,
therefore, in consideration of the premises and the mutual
covenants hereinafter contained, the parties hereto agree as
follows:
1.
General Definitions. The
following words shall have the following meanings:
1.1
“Business Day” means
any day that is not a Saturday, a Sunday, or a day on which banks
are required, or permitted, to be closed in the State of New
York.
1.2
“Credit Facility” means
the right of Borrower to borrow up to $1,000,000 from Lenders under
the terms and conditions of this Credit Agreement and the
Note.
1.3
“Debtor Relief Law” means
the Bankruptcy Code of the United States of America, as amended, or
any other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief law affecting the rights
of creditors generally.
1.4
“Earmarked Funds” means
funds received by Borrower through (i) the sale of capital stock,
(ii) loans from other lenders, or (iii) funds in excess of
$1,000,000 received by Borrower through the collection of license
fees, signing fees, milestone fees, or similar fees (excluding
royalties) under any other present or future agreement pursuant to
which Borrower grants one or more licenses to use Borrower’s
patents or technology.
1.5
“Event of Default” or
“Events of Default” means
any of the events specified in Section 5.
1.6
“Loan” means
the loans made by Lenders to Borrower pursuant to this Credit
Agreement, and evidenced by the Note.
1.7
“Loan Documents” means
this Credit Agreement, the Note, and the Security Agreement, and
all other agreements, instruments, and documents in favor of a
Lender, now or hereafter executed by or on behalf of Borrower and
delivered to a Lender in connection with this Credit Agreement or
in connection with any of the transactions contemplated
hereby.
1.8
“Maturity Date” means
the earlier of (i) April 30, 2008, and (ii) such date on which
Borrower shall have received an aggregate of $2,000,000 through (A)
the sale of capital stock, (B) the collection of license fees,
signing fees, milestone fees, or similar fees (excluding royalties)
in excess of $1,000,000 under any present or future agreement
pursuant to which Borrower grants one or more licenses to use
Borrower’s patents or technology, (C) funds borrowed from
other lenders, or (D) any combination of sources under clauses (A)
through (C).
1.9
“Note” means
(a) each Amended and Restated Credit Note, dated April 12, 2006, in
the form attached as EXHIBIT A-1, evidencing the amount of the Loan
previously advanced by certain Lenders, and (b) each Revolving
Credit Note, of even date, in the form attached as EXHIBIT A-2,
evidencing the amount of the Loan from each Lender, to be executed
concurrently with this Credit Agreement.
1.10
“Security Agreement” means
that certain Amended and Restated Security Agreement of even date
among Borrower and Lenders pursuant to which Borrower is granting
Lenders a first priority perfected security interest in certain
specified collateral to secure Borrower’s obligations under
this Agreement and the Note.
1.11
“Shares” means
common shares, no par value, of the Borrower.
2.
Draws and Disbursements.
2.1
Maximum Loan Amount. On
the terms and conditions set forth in this Credit Agreement,
Lenders shall make available to Borrower the Credit Facility, as a
revolving line of credit in a principal amount not to exceed at any
one time One Million Dollars ($1,000,000), less all amounts of
principal prepaid or required to be prepaid under Section 3.2.1 of
this Credit Agreement (the “Maximum Loan Amount”). Each
Lender shall be severally, and not jointly and severally, obligated
to lend the amount shown on Schedule I.
2.2
Draw Period. Borrower
may request from Lenders advances of funds (“Draws”)
under the Credit Facility from the date of this Agreement until
April 30, 2008 (the “Draw Period”). As amounts drawn by
Borrower hereunder are repaid, they may be reborrowed subject to
the terms and conditions of this Credit Agreement; provided, that
at no time shall the aggregate principal amount of Loan outstanding
under this Credit Agreement exceed the Maximum Loan Amount. The
Draw Period may be terminated by Borrower at any time by written
notice to Lenders. Subject to the terms and conditions of this
Credit Agreement, and provided that no Event of Default has
occurred, Lenders shall make advances to Borrower upon request as
provided in this Section 2.
Upon
the occurrence of an Event of, one of Lenders’ remedies
includes Lenders’ right to terminate the Draw Period and
Borrower’s right to make Draws under this Credit
Agreement.
2.3
Increments. Draws
must be in increments of not less than One Hundred Thousand Dollars
($100,000), or the remaining amount available under the Credit
Facility, whichever is less. Each Lender shall advance a portion of
each Draw such that, immediately after funding the Draw, the total
outstanding principal amount of the Loan funded by each Lender
shall be in proportion to their respective loan commitments shown
on Schedule I.
2.4
Use of Funds .
All funds borrowed under this Credit Agreement will be used as
working capital to pay Borrower’s expenses arising in the
ordinary course of business.
2.5
Disbursement Procedures.
2.5.1
Borrower
hereby appoints the Chief Executive Officer, each member of
its Office of the President, and the Chief Financial Officer
as the officers authorized to make Draws under this Credit
Agreement during the Draw Period. Any one of such officers
(the “Authorized Officers”) is authorized to make
Draws. Lender, at its sole option, may require that all
requests for Loan funds be in writing, signed by an Authorized
Officer, in a form acceptable to Lenders. Facsimile documents
may be accepted by Lenders as originals. Any Draw by an
Authorized Officer shall constitute an ongoing representation
and warranty by Borrower that at the time of request for or
payment of any Draw no Event of Default has
occurred.
2.5.2
Draws
shall be paid according to the Authorized Officer’s
instructions, except that checks representing Loan funds shall
always be made payable to Borrower, and wire transfers shall
only be permitted if Borrower has authorized payment into the
account into which the funds are to be deposited. The
appointment of the above-named Authorized Officer(s) shall
remain in full force and effect until written notice of
revocation of appointment signed by the Chief Executive
Officer or Chief Financial Officer of Borrower has been
received by Lender.
2.5.3
Lenders
shall advance Loan funds available under the Credit Facility
in accordance with Borrower’s Draws within four (4)
Business Days after the receipt of the Draw.
2.5.4
Each
Draw shall be accompanied by the certificates required by
Section 2.6.
2.5.5
Borrower
shall indemnify and hold Lenders harmless from loss or
liability of any kind arising from or related to any action or
inaction taken by Lenders in good faith in reliance upon
instructions received from any Authorized
Officer.
2.6
Conditions Precedent. The
following conditions must be satisfied before Lenders shall be
obligated to disburse any Loan to Borrower pursuant to a
Draw:
2.6.1
Due execution. Lenders
shall have received duly executed originals of this Credit
Agreement and all other Loan Documents.
2.6.2
Approvals. Lenders
shall have received evidence satisfactory to them that all consents
and approvals which are necessary for, or required as a condition
of, the validity and enforceability of this Credit Agreement and
all other Loan Documents have been obtained and are in full force
and effect.
2.6.3
Representations and Warranties Correct.
All of Borrower’s representations and warranties contained in
this Credit Agreement and in any other Loan Document shall be true
and correct in all material respects on the date the Loan funds are
disbursed, and Borrower shall have delivered to Lenders a
certificate executed by an Authorized Officer to such
effect.
2.6.4
No Event of Default. No
Event of Default shall have occurred, and Borrower shall have
delivered to Lenders a certificate executed by an Authorized
Officer to such effect.
2.6.5
Independent Verification. Borrower
must provide for Lenders’ review and acceptance such
documentation as may be required by Lenders to ensure Borrower is
in compliance with the terms and conditions of this Credit
Agreement, including, without limitation, resolutions of
Borrower’s board of directors or a duly constituted and
authorized committee thereof, certified by the secretary or an
assistant secretary of the corporation, authorizing the execution
and delivery of this Agreement and the other Loan Documents and
performance of Borrower’s obligations hereunder and
thereunder.
2.6.6
Shares. Prior
to the initial Draw under this Credit Agreement, Borrower must have
issued the Shares to Lenders as described in Section 4 of this
Credit Agreement.
2.6.7
Closing Costs. Borrower
must have paid all attorneys’ fees (not to exceed $2,500 for
all Lenders in the aggregate) incurred by Lenders in connection
with the preparation, execution, and delivery of the Loan
Documents, and all reports and notices required to be filed by
Lenders or their respective affiliates under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”),
in connection with this Agreement and Lenders’ receipt of the
Shares.
2.7
Amended Promissory Notes .
Except for such Notes as may be paid in full upon the Maturity
Date, each original Note dated April 12, 2006 (“Original
Note”) shall be exchanged for an amended Note in the form of
EXHIBIT A-1. Each Lender holding an Original Note shall tender
their Original Note for an amended Note. Until such time an
Original Note is
tendered
to Borrower and an amended Note is delivered to the Lender in
exchange, the Original Note shall be deemed to include all of
the terms set forth in EXHIBIT A-1.
3.
Terms of Payment.
3.1
Interest. Interest
shall accrue and be payable at the rate of (a) 10% per annum on the
outstanding principal balance of the Loan through October 31, 2007,
and (b) 12% per annum on the outstanding principal balance of the
Loan from October 31, 2007 until the Maturity Date or any earlier
date on which the principal balance is paid in full. Interest shall
accrue from the date of each disbursement of principal pursuant to
a Draw. Accrued interest shall be paid with principal on the
Maturity Date. Interest will be charged on that part of outstanding
principal of the Loan which has not been paid and shall be
calculated on the basis of a 360-day year and a 30-day
month.
3.2
Payment of Principal. The
outstanding principal balance of the Loan, together with accrued
interest, shall be paid in full on the Maturity Date.
3.2.1
Mandatory Prepayment of Principal. In
the event that Borrower receives Earmarked Funds, Borrower shall
use the Earmarked Funds to prepay principal, plus accrued interest,
within two business days after such Earmarked Funds are received by
Borrower, and the amount of principal so prepaid shall reduce the
Maximum Loan Amount.
3.3
Optional Prepayment of Principal .
Borrower may prepay principal, with accrued interest, at any time
and the amount of principal so prepaid shall be available for
further Draws by Borrower during the Draw Period to the extent that
the prepayment of principal was not required under Section
3.2.1.
3.4
Default Interest Rate; Late Payment Charge.
In
the event that any payment of principal or interest is not paid
within five (5) days from on the date on which the same is due and
payable, such payment shall continue as an obligation of the
Borrower, and interest thereon from the due date of such payment
and interest on the entire unpaid balance of the Loan shall accrue
until paid in full at the lesser of (i) fifteen percent (15%) per
annum, or (ii) the highest interest rate permitted under applicable
law (the “Default Rate”). From and after the Maturity
Date or upon acceleration of the Note, the entire unpaid principal
balance of the Loan with all unpaid interest accrued thereon, and
any and all other fees and charges then due at such maturity, shall
bear interest at the Default Rate.
3.5
Date of Payment. If
the date on which a payment of principal or interest on the Loan is
due is a day other than a Business Day, then payment of such
principal or interest need not be made on such date but may be made
on the next succeeding Business Day.
3.6
Application of Payments. All
payments shall be applied first to costs of collection, next to
late charges or other sums owing Lenders, next to accrued interest,
and then to principal, or in such other order or proportion as
Lenders, in their sole discretion, may determine.
3.7
Currency. All
payments shall be made in United States Dollars.
4.
Shares. As
consideration for Lenders making the Credit Facility available to
Borrower, Borrower has issued 33,333 Shares to Lenders who were
parties to this Agreement on April 12, 2006. As consideration for
Lenders making the amended Credit Facility available to Borrower,
Borrower shall issue and deliver to Lenders one Share for each five
dollars of the Loan commitment of the Lender shown on Schedule I.
No fractional Shares shall be issued.
5.
Events of Default. The
following shall constitute Events of Default: (a) the default of
Borrower in the payment of any interest or principal due under this
Credit Agreement or the Note held by any Lender; (b) the failure of
Borrower to perform or observe any other term or provision of, or
covenant, agreement, or obligation under, this Credit Agreement or
any other Loan Document; (c) any act, omission, or other event that
constitutes an “Event of Default” under the Note or the
Security Agreement; (d) any representation or warranty of Borrower
contained in this Credit Agreement or in any other Loan Document,
or in any certificate delivered by Borrower pursuant to this Credit
Agreement or any other Loan Document, is false or incorrect in any
material respect when made or given; (e) Borrower becoming the
subject of any order for relief in a proceeding under any Debtor
Relief Law; (f) Borrower making an assignment for the benefit of
creditors, other than repayment of the Loan, in whole or in part,
to Lenders; (g) Borrower applying for or consenting to the
appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator, or similar officer for it or for all or
any part of its property or assets; (h) the appointment of any
receiver, trustee, custodian, conservator, liquidator,
rehabilitator, or similar officer for Borrower, or for all or any
part of the property or assets of Borrower, without the application
or consent Borrower if such appointment continues undischarged or
unstayed for sixty (60) calendar days; (i) Borrower instituting or
consenting to any proceeding under any Debtor Relief Law with
respect to Borrower, or all or any part of its property or assets,
or the institution of any similar case or proceeding without the
consent of Borrower, if such case or proceeding continues
undismissed or unstayed for sixty (60) calendar days; (j) the
dissolution or liquidation of Borrower, or the winding-up of the
business or affairs of Borrower; (k) the taking of any action by
Borrower to initiate any of the actions described in clauses (e)
through (j) of this paragraph; (l) the issuance or levy of any
judgment, writ, warrant of attachment or execution or similar
process against all or any material part of the property or assets
of Borrower if such process is not released, vacated or fully
bonded within sixty (60) calendar days after its issue or levy; or
(m) any breach or default by Borrower under any loan agreement,
promissory note, or other instrument evidencing indebtedness
payable to a third party.
5.1
Remedies On Default.
1.6Remedies On Default. Upon
the occurrence of an Event of Default, at Lender’s option,
all unpaid principal and accrued interest, and all other amounts
payable to Lender under this Credit Facility and any other Loan
Document shall become immediately due and payable without
presentment, demand, notice of non-payment, protest, or notice of
non-payment, provided that no notice or demand shall be required if
the Event of Default is a proceeding under any Debtor Relief Law.
Each Lender also shall have all other rights, powers, and remedies
available under this Credit Agreement and the Note or any other
Loan Document, or accorded by law or at equity. All
rights,
powers, and remedies of a Lender may be exercised at any time
by the Lender and from time to time after the occurrence of an
Event of Default. All rights, powers, and remedies of a Lender
in connection with this Credit Agreement and the Note and any
Loan Document are cumulative and not exclusive and shall be in
addition to any other rights, powers, or remedies provided by
law or equity.
6.
Representations and Warranties of Borrower.
Borrower
represents and warrants to Lenders the following:
6.1
Organization; Capitalization. Borrower
is a corporation duly organized, validly existing and in good
standing under the laws of the state of California and has all
requisite corporate power and authority to own its property and to
carry on its business as now being conducted.
6.2
Authority; Enforceability. Borrower
has the power and authority to execute and deliver this Credit
Agreement and each of the other Loan Documents, and to perform all
of Borrower’s obligations under this Credit Agreement and the
other Loan Documents. This Credit Agreement and each of the other
Loan Agreements has been duly authorized by, and is the valid and
binding agreement and obligation of, Borrower, enforceable in
accordance with its respective terms, except to the extent limited
by any bankruptcy, insolvency, or similar law affecting the rights
of creditors generally. There are no corporate, contractual,
statutory, regulatory, judicial, or other restrictions of any kind
upon the power and authority of Borrower to execute and deliver
this Credit Agreement or any other Loan Document, and to consummate
the transactions contemplated by this Credit Agreement and the
other Loan Documents, including, without limitation: (a) the
payment of all principal and interest that may become due on the
Loan; and (b) the issuance of the Shares. No action, approval or
consent by, or notice to or filing with, any federal, state,
municipal or other governmental department, commission, agency,
regulatory authority, or court is necessary to make this Credit
Agreement or the other Loan Documents the valid agreements binding
upon Borrower in accordance with their respective terms, or to
consummate the transactions contemplated by this Credit Agreement
and the other Loan Documents.
6.3
No Conflict. The
execution and delivery of this Credit Agreement and the other Loan
Documents, and the consummation of the transactions contemplated by
this Credit Agreement and the other Loan Documents, do not and will
not (a) violate any provisions of (i) any rule, regulation,
statute, or law, or (ii) the terms of any order, writ or decree of
any court or judicial or regulatory authority or body, or (iii) the
Articles of Incorporation or Bylaws of Borrower, and (b) conflict
with or result in a breach of any condition or provision or
constitute a default under or pursuant to the terms of any
contract, mortgage, lien, lease, agreement, debenture or instrument
to which Borrower or any Subsidiary is a party, or which is or
purports to be binding upon Borrower, any Subsidiary, or upon any
of their respective properties, and (c) result in the creation or
imposition of any lien, charge or encumbrance upon any of the
assets or properties of Borrower or any Subsidiary.
6.4
Shares. When
issued pursuant to this Agreement, the Shares will be validly
issued and outstanding, fully paid and non-assessable.
6.5
Accuracy of Information. Borrower
has delivered to Lenders a copy of its annual report on Form 10-KSB
for the fiscal year ended December 31, 2006, and quarterly reports
on Form 10-QSB for the fiscal quarter and six months ended June 30,
2007, and all Current Reports on Form 8-K filed by Borrower since
June 30, 2007 (the “Disclosure Documents”). The
financial statements contained in the Disclosure Documents were
prepared in accordance with generally accepted accounting
principles, consistently applied, and accurately reflect the
financial condition and results of operations of Borrower at and as
of the dates reported. All financial information and other
information contained in the Disclosure Documents was true and
correct in all material respects when such reports were filed under
the Exchange Act.
6.6
Taxes. Borrower
has filed when due all federal, state and local income tax returns
and has filed when due all other returns with respect to taxes
which are required to be filed with the Internal Revenue Service
and the appropriate authorities of the jurisdictions where business
is transacted by them. All items and entries provided for or
reflected in such returns are correct and are made on a proper
basis. All amounts, if any, required to be paid, as shown on such
returns, have been paid. None of such tax returns has been audited.
There are no suits, actions, claims, or investigations, inquiries
or proceedings now pending against Borrower in respect of taxes,
governmental charges or assessments, nor are there any matters
under discussion with any governmental authority relating to taxes,
governmental charges or assessments asserted by any such
authority.
6.7
Litigation. Except
as disclosed in the Disclosure Documents, there are no lawsuits,
arbitration proceedings, administrative proceedings, actions or
claims pending or threatened against Borrower. No fine, penalty or
other sanction has been imposed by any federal, state, local or
municipal court, judicial, administrative or regulatory body or
authority against Borrower. There is no outstanding order, writ,
injunction or degree of any court, administrative agency or
governmental body or arbitration tribunal against or affecting
Borrower or any of its respective properties, assets, business or
prospects.
7.
Affirmative Covenants. During
the Draw Period, and until such time as the entire principal
balance and accrued interest on the Loan, and all other amounts
payable by Borrower under this Credit Agreement or any other Loan
Document have been paid in full, Borrower shall comply with the
following covenants and agreements:
7.1
Furnish Information. Borrower
will, at any Lender’s request, furnish information to Lender
relating to Borrower’s business and financial affairs and
permit Lender to examine Borrower’s books and
records.
7.2
Comply with Terms and Conditions .
Borrower will comply with all terms and conditions of all other
Loan Documents.
7.3
Financial Reports .
Borrower will file with the Securities and Exchange Commission,
when due, all quarterly reports, annual reports, current reports,
and other documents required pursuant to the Exchange
Act.
7.4
Limitation on Dividends and Other Distributions by
Borrower .
Borrower shall not declare or pay any dividend or other
distribution of cash, other property (excluding shares of capital
stock and options, warrants or other rights to acquire capital
stock or stock purchase warrants of Borrower), or evidences of
indebtedness, on account of or with respect to any shares of
capital stock.
7.5
Insurance .
Borrower will, and will cause its Subsidiaries, to maintain
insurance with responsible carriers against such risks and in such
amounts as is customarily carried by similar businesses with such
deductible as are customarily carried by similar businesses of
similar size, including, without limitation, property and casualty
loss, workers’ compensation and interruption of business
insurance.
7.6
Fees and Charges of Attorneys and Others.
1.9Fees
and Charges of Attorneys and Others. In
the event that a Lender employs attorneys, accountants, appraisers,
consultants, or other professional assistance, excluding the
services of any such person who is a direct employee of a Lender,
in connection with any of the following, then, the reasonable
amount of costs, expenses, and fees incurred by the Lender shall be
payable on demand. A Lender may, at its option, add the amount of
such costs, expenses, and reasonable fees to the principal amount
of the Loan. A Lender thereafter may charge interest on such amount
at t
|
