May 11, 2006
May
11,
2006
BioTime,
Inc.
0000
Xxxxxx Xxxxxx
Xxxxxxxxxx,
Xxxxxxxxxx 00000
Attention:
Xxxxxx Xxxxxx, Vice President-Operations
Dear
Xxxxxx:
This
letter sets forth the terms on which the letter agreement between BioTime,
Inc.
(“BioTime”) and Greenbelt Corp. (“Financial Adviser”), dated April 30, 1998, as
amended, (the “Agreement”) shall be extended and modified.
1. Expiration
Date.
The term
of the Agreement will continue in effect from April 1, 2006 through March 31,
2007.
2. Compensation.
BioTime
agrees to pay Greenbelt (a) a cash fee of $90,000, and (b) 200,000 common
shares. The shares shall be issued as follows: 150,000 shares on January 2,
2007
for services rendered through December 31, 2006, and 50,000 shares on April
2,
2007 for services rendered from January 1, 2007 through March 31, 2007. The
cash
fee shall be due and payable as follows: $30,000 on January 2, 2007, $30,000
on
April 2, 2007, and $30,000 on October 1, 2007; provided, that BioTime may defer
either or both of the cash payments that would otherwise be due on January
2,
2007 and April 2, 2007 until a date that BioTime may determine, but not later
than October 1, 2007. If BioTime elects to so defer a cash payment for a period
of more than five business days, BioTime shall issue to Greenbelt 30,000
additional common shares within ten business days after the date on which the
deferred cash payment was originally due. In the event that the Agreement is
terminated by either party and such termination takes effect on a date other
than the last day of a calendar quarter, the amount of cash and number of Shares
issuable with respect to the calendar quarter will be pro rated, to the nearest
whole Share, by multiplying the amount of cash payable and Shares issuable
for
that quarter by a fraction the numerator of which is the number of days that
have elapsed from the first day of the calendar quarter through the date of
termination, and the denominator of which is the number of days in the calendar
quarter. Payment of any prorated amount shall be due on the next proceeding
date
for payment under this paragraph, subject to the right of BioTime to defer
the
cash payment as provided in this paragraph.
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3. Investment
Representations.
Financial Adviser represents and warrants to BioTime that:
(a) Financial
Adviser has received and read a draft of BioTime’s Quarterly Report on Form
10-QSB for the three months ended March 31, 2006 and BioTime’s Annual Report on
Form 10-K for the year ended December 31, 2005, including the risks described
in
the “Risk Factors” section, and all Current Reports on Form 8-K filed by BioTime
since January 1, 2006 (collectively, the “SEC Filings”). Financial Adviser is
relying on the information provided in the SEC Filings or otherwise communicated
to Financial Adviser in writing by BioTime. Financial Adviser has not relied
on
any statement or representations inconsistent with those contained in the SEC
Filings. Financial Adviser has had a reasonable opportunity to ask questions
of
and receive answers from the executive officers and directors of BioTime, or
one
or more of its officers, concerning BioTime and to obtain additional
information, to the extent possessed or obtainable without unreasonable effort
or expense, necessary to verify the information in the SEC Filings. All such
questions have been answered to Financial Adviser’s satisfaction;
(b) Financial
Adviser understands that the Shares are being offered and sold without
registration under the Securities Act of 1933 (the “1933 Act”) or qualification
under the California Corporate Securities Law of 1968, or under the laws of
other states, in reliance upon the exemptions from such registration and
qualification requirements for non-public offerings. Financial Adviser
acknowledges and understands that the availability of the aforesaid exemptions
depends in part upon the accuracy of certain of the representations,
declarations and warranties contained herein, which Financial Adviser hereby
makes with the intent that they may be relied upon by BioTime and its officers
and directors in determining Financial Adviser’s suitability to purchase the
Shares. Financial Adviser understands and acknowledges that no federal, state
or
other agency has reviewed or endorsed the offering of the Shares or made any
finding or determination as to the fairness of the offering or completeness
of
the information in the SEC Filings;
(c) Financial
Adviser understands that the Shares may not be offered, sold, or transferred
in
any manner, unless subsequently registered under the 1933 Act, or unless there
is an exemption from such registration and an opinion of counsel for BioTime
has
been rendered stating that such offer or transfer will not violate any federal
or state securities laws;
(d) Financial
Adviser understands and agrees that all certificates evidencing the Shares
shall
bear an appropriate legend to the effect that the securities have not been
registered under the 1933 Act and may not be sold or transferred in the absence
of such registration or an exemption therefrom.
(e) Financial
Adviser has such knowledge and experience in financial and business matters
to
enable it to utilize the information contained in the SEC Filings, or otherwise
made available to Financial Adviser to evaluate the merits and risks of an
investment in the Shares and to make an informed investment decision with
respect thereto.
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(f) Financial
Adviser is purchasing the Shares solely for Financial Adviser’s own account and
for long-term investment purposes, and not with a view to, or for sale in
connection with, any distribution of the Shares; and
(g) Financial
Adviser is an “accredited investor,” as such term is defined in Regulation D
promulgated under the 1933 Act.
4. Registration
Rights.
(a) BioTime
agrees, at its expense, upon written request from the Financial Adviser, to
use
commercially reasonable efforts to register under the 1933 Act the Shares and
to
take such other actions as may be necessary to allow the Shares to be freely
tradable, without restrictions, in compliance with all regulatory requirements.
A written request for registration shall specify the quantity of the Shares
intended to be sold, the plan of distribution and the identity of the sellers,
which may include the Financial Adviser and assignees of its rights hereunder
(collectively, “Selling Securities Holders”), and whether the registration shall
be pursuant to an underwritten public offering or a “shelf” registration
pursuant to Rule 415 (or similar rule that may be adopted by the Securities
and
Exchange Commission). BioTime shall not be obligated to file more than two
such
registration statements, other than registration statements on Form S-3. BioTime
shall use commercially reasonable efforts keep such registration statements
effective for a period of at least nine months, except that registration
statements on Form S-3 shall be kept effective for at least three years (or
such
lesser period as the parties may agree, but in no event beyond the completion
of
the distribution or distributions being made pursuant thereto). BioTime shall
utilize Form S-3 if it qualifies for such use. BioTime shall make all filings
required with respect to the registration statements and will use commercially
reasonable efforts to cause such filings to become effective, so that the Shares
being registered shall be registered or qualified for sale under the securities
or blue sky laws of such jurisdictions as shall be reasonably appropriate for
distribution of the Shares covered by the registration statement. BioTime shall
have no obligation to make any cash settlement or payment to the Financial
Adviser or any Selling Securities Holders or to issue any additional Shares
in
the event that BioTime is unable to effect or maintain in effect the
registration of the Shares under the 1933 Act or any state securities law
despite BioTime’s commercially reasonable efforts so to do.
BioTime
will furnish to the Selling Securities Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the 1933 Act and such other related documents as the Selling
Securities Holders may reasonably request in order to effect the sale of the
Shares. To effect any offering pursuant to a registration statement under this
Section, BioTime shall enter into an agreement containing customary
representations and warranties, and indemnification and contribution provisions,
all for the benefit of Selling Securities Holders, and, in the case of an
Underwritten public offering, an underwriting agreement with an investment
banking firm selected by the Financial Adviser and reasonably acceptable to
BioTime, containing such customary representations and warranties, and
indemnification and contribution provisions
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(b) If,
at
any time, Bio Time proposes to register any of its securities under the 1933
Act
(otherwise than pursuant to paragraph 4(a) above or on a Form S-8 if such form
cannot be used for registration of the Shares pursuant to its terms), BioTime
shall, as promptly as practicable, give written notice to the Financial Adviser.
BioTime shall include in such registration statement any Shares proposed to
be
sold by the Selling Securities Holders. Notwithstanding the foregoing, if the
offering of BioTime’s securities is to be made through underwriters, BioTime
shall not be required to include Shares if and to the extent that the managing
underwriter reasonably believes in good faith that such inclusion would
materially adversely affect such offering unless the Selling Securities Holders
agree to postpone their sales until 10 days after the distribution is completed.
(c) BioTime
shall pay the cost of the registration statements filed pursuant to this
Agreement, including without limitation all registration and filing fees, fees
and expenses of compliance with securities or blue sky laws (including counsel’s
fees and expenses in connection therewith), printing expenses, messenger and
delivery expenses, internal expenses of BioTime, listing fees and expenses,
and
fees and expenses of BioTime’s counsel, independent accountants and other
persons retained or employed by BioTime. Selling Securities Holders shall pay
any underwriters discounts applicable to Shares.
(d) BioTime
agrees that upon the sale of Shares pursuant to a registration statement or
an
exemption, upon the presentation of the certificates containing such legend
to
its transfer agent, it will remove such legend. BioTime further agrees to remove
the legend at such time as registration under the 1933 Act shall no longer
be
required.
5. Other
Provisions.
Except
as expressly modified by this letter, all terms and provisions of the Agreement
shall remain in effect.
[Signatures
on Following Page]
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| BIOTIME, INC. | ||
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| By | /s/ Xxx Xxxxxxxxx | |
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Xxx Xxxxxxxxx, Vice President, Member of |
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| the Office of the President | ||
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| By | /s/ Xxxxxx Xxxxxx | |
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Xxxxxx Xxxxxx, Vice President, Secretary, and |
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| Member of the Office of the President | ||
| GREENBELT CORP. | ||
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| By | /s/ Xxxxxx X. Xxxxxxxx | |
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Xxxxxx X. Xxxxxxxx, President |
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