---------------
Warrant Agreement
Dated as of August 13, 2001
---------------
WARRANT AGREEMENT, dated as of August 13, 2001, between BioTime, Inc.,
a California corporation (the "Company"), and the persons named on Exhibit A
(the "Lenders").
The Company proposes to issue Common Stock Purchase Warrants, as
hereinafter described (the "Warrants"), to purchase up to an aggregate of
769,231 of its Common Shares, no par value (the "Common Stock") (the shares of
Common Stock issuable upon exercise of the Warrants being referred to herein as
the "Warrant Shares"), in connection with the issue and sale of Series 2001-A
Debentures to the Lenders (the "Debentures").
In consideration of the foregoing and for the purpose of defining the
terms and provisions of the Warrants and the respective rights and obligations
thereunder of the Company and each registered owner of a Warrant (the "Holder"),
the Company and the Lenders hereby agree as follows:
Section 1. Issuance of Warrants; Term of Warrants. Concurrently with
the execution and delivery of this Agreement and the issue of the Debentures,
the Company is issuing and delivering to each Lender a Warrant to purchase a
number of Warrant Shares determined by dividing the principal amount of
Debentures purchased by such Lender by the initial Warrant Price (as shown in
Section 4). The Warrant shall be represented by a certificate in substantially
the form of Exhibit A hereto. Subject to the terms of this Agreement, a Holder
of any of such Warrant (including any Warrants into which a Warrant may be
divided) shall have the right, which may be exercised at any time prior to 5:00
p.m., New York Time on August 1, 2004 (the "Expiration Date"), to purchase from
the Company the number of fully paid and nonassessable Warrant Shares which the
Holder may at the time be entitled to purchase upon exercise of any of such
Warrant.
Section 2. Form of Warrant. The text of the Warrants and of the
Purchase Form shall be substantially as set forth in Exhibit A attached hereto.
The price per Warrant Share and the number of Warrant Shares issuable upon
exercise of each Warrant are subject to adjustment upon the occurrence of
certain events, all as hereinafter provided. The Warrants shall be executed on
behalf of the Company by its Chairman of the Board, President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or any Assistant Secretary. The signature of any such officers on the
Warrants may be manual or facsimile, provided, however, that the signature of
any such officers must be manual until such time as a warrant agent is
appointed.
2.1 Signatures; Date of Warrants. Warrants bearing the manual
or facsimile signatures of individuals who were at any time the proper officers
of the Company shall bind the Company, notwithstanding that such individuals or
any one of them shall have ceased to hold such offices prior to the delivery of
such Warrants or did not hold such offices on the date of this Agreement. In the
event that the Company shall appoint a warrant agent to act on its behalf in
connection with the division, transfer, exchange or exercise of Warrants, the
Warrants issued after the date of such appointment shall be dated as of the date
of countersignature thereof by the warrant agent upon division, exchange,
substitution or transfer. Until such time as the Company
1
shall appoint a warrant agent, Warrants shall be dated as of the date of
execution thereof by the Company either upon initial issuance or upon division,
exchange, substitution or transfer.
2.2 Countersignature of Warrants. In the event that the
Company shall appoint a warrant agent to act on its behalf in connection with
the division, transfer, exchange or exercise of Warrants, the Warrants issued
after the date of such appointment shall be countersigned by the warrant agent
(or any successor to the warrant agent then acting as warrant agent) and shall
not be valid for any purpose unless so countersigned. Warrants may be
countersigned, however, by the warrant agent (or by its successor as warrant
agent hereunder) and may be delivered by the warrant agent, notwithstanding that
the persons whose manual or facsimile signatures appear thereon as proper
officers of the Company shall have ceased to be such officers at the time of
such countersignature, issuance or delivery. The warrant agent (if so appointed)
shall, upon written instructions of the Chairman of the Board, the President, an
Executive or Senior Vice President, the Treasurer or the Controller of the
Company, countersign, issue and deliver the Warrants and shall countersign and
deliver Warrants as otherwise provided in this Agreement.
Section 3. Exercise of Warrants; Listing.
3.1 Exercise of Warrants. A Warrant may be exercised upon
surrender of the certificate or certificates evidencing the Warrants to be
exercised, together with the form of election to purchase on the reverse thereof
duly filled in and signed, which signature shall be guaranteed by a bank or
trust company or a broker or dealer which is a member of the National
Association of Securities Dealers, Inc., to the Company at its principal office
(or if appointed, the principal office of the warrant agent) and upon payment of
the Warrant Price (as defined in and determined in accordance with the
provisions of Section 4 and Section 10) to the Company (or if appointed, to the
warrant agent for the account of the Company), for the number of Warrant Shares
in respect of which such Warrants are then exercised. Payment of the aggregate
Warrant Price (defined in Section 4 herein) shall be made in cash or by
certified or bank cashier's check or by delivery of Debentures in such amount
(including principal and accrued interest). In the event that the principal
amount of Debentures delivered as payment of the Warrant Price exceeds the
Warrant Price, the Company shall issue and deliver to the Holder a new Debenture
in the amount not applied toward the Warrant Price.
(a) Subject to Section 5, upon the surrender of the Warrant
and payment of the Warrant Price as aforesaid, the Company (or if appointed, the
warrant agent) shall promptly cause to be issued and delivered to or upon the
written order of the Holder and in such name or names as the Holder may
designate, a certificate or certificates for the number of full Warrant Shares
so purchased upon the exercise of such Warrant, together with cash, as provided
in Section 12, in respect of any fractional Warrant Shares otherwise issuable
upon such surrender. Such certificate or certificates shall be deemed to have
been issued and any person so designated to be named therein shall be deemed to
have become a holder of record of such Warrant Shares as of the date of the
surrender of such Warrants and payment of the Warrant Price, as aforesaid. The
rights of purchase represented by the Warrant shall be exercisable, at the
election of the Holder thereof, either in full or from time to time in part and,
in the event that a certificate evidencing
2
the Warrant is exercised in respect of less than all of the Warrant Shares
purchasable on such exercise at any time prior to the date of expiration of the
Warrant, a new certificate evidencing the unexercised portion of the Warrant
will be issued, and the warrant agent (if so appointed) is hereby irrevocably
authorized to countersign and to deliver the required new Warrant certificate or
certificates pursuant to the provisions of this Section 3 and Section 2.2, and
the Company, whenever required by the warrant agent (if appointed), will supply
the warrant agent with Warrant certificates duly executed on behalf of the
Company for such purpose.
3.2 Listing of Shares on Securities Exchange; Exchange Act
Registration. The Company will promptly use its best efforts to cause the
Warrant Shares to be listed, subject to official notice of issuance, on all
national securities exchanges on which the Common Stock is listed and whose
rules and regulations require such listing, as soon as possible following the
date hereof. The Company will promptly notify the Holders in the event that the
Company plans to register the Warrants with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
Section 4. Warrant Price. Subject to any adjustments required by
Section 10, the price per share at which Warrant Shares shall be purchasable
upon exercise of a Warrant (as to any particular Warrant, the "Warrant Price")
shall be six dollars and fifty-cents ($6.50) per share.
Section 5. Payment of Taxes. The Company will pay all documentary stamp
taxes, if any, attributable to the initial issuance of Warrant Shares upon the
exercise of Warrants; provided, however, that the Company shall not be required
to pay any tax or taxes which may be payable in respect of any transfer involved
in the issue or delivery of any Warrant or certificates for Warrant Shares in a
name other than that of the registered Holder of such Warrants.
Section 6. Redemption of Warrants.
6.1 Right to Redeem. The Warrants may be redeemed by the
Company, at its election, at any time after June 30, 2002 if (a) a registration
statement under Section 18.1 or a registration statement under Section 18.2 that
includes Warrants and Warrant Shares is then effective under the Securities Act
of 1933, as amended, and (b) the closing price of the Common Stock on a national
securities exchange (including the Nasdaq Stock Market National Market System),
or the average bid price as quoted in Nasdaq Stock Market if the Common Shares
are not listed on a national securities exchange, equals or exceeds 150% of the
Warrant Price for any fifteen (15) consecutive trading days ending not more than
thirty (30) days prior to the date of the notice given pursuant to Section 6.2.
6.2 Notice of Redemption. Notice of proposed redemption of the
Warrants shall be sent by or on behalf of the Company, by first class mail,
postage prepaid, to the Holders of record of the Warrants at the addresses of
such Holders appearing in the records of the Company or the warrant agent, if
any. Such notice shall be sent not less than forty-five (45) days prior to the
date fixed by the Company for redemption (the "Redemption Date"). Such notice
shall notify the Holder of the Warrants that the Company will redeem the
Warrants, and shall state (i) the date
3
of redemption, (ii) the redemption price, (iii) the place or places at which the
redemption price shall be paid upon presentation and surrender of the Warrants,
and (iv) the name and address of the warrant agent, if any, and the name and
address of any bank or trust company appointed by the Company to receive and
disburse the redemption price.
6.3 Effect of Redemption. From and after the Redemption Date,
the Warrants shall no longer be deemed outstanding and all rights of the Holder
of the Warrants shall cease and terminate, except for the right of the
registered Holder to receive payment of the redemption price of one cent ($0.01)
per Warrant Share upon presentation and surrender of the Warrants.
6.4 Abatement of Redemption. The Redemption Date shall abate,
and the notice of redemption shall be of no effect, if the closing price or
average bid price of the Common Stock, as applicable under Section 6.1, does not
equal or exceed 120% of the Warrant Price on the Redemption Date and each of the
five trading days immediately preceding the Redemption Date, but the Company
shall have the right to redeem the Warrants at a future date if the conditions
set forth in Section 6.1 are subsequently met and a new notice setting a new
Redemption Date is sent to Warrant holders as provided in Section 6.2.
Section 7. Transferability of Warrants.
7.1 Registration. Each Warrant shall be numbered and shall be
registered on the books of the Company (the "Warrant Register") as issued. The
Company and the warrant agent (if appointed) shall be entitled to treat the
Holder of any Warrant as the owner in fact thereof for all purposes and shall
not be bound to recognize any equitable or other claim or interest in such
Warrant on the part of any other person, and shall not be liable for any
registration of transfer of any Warrant which is registered or to be registered
in the name of a fiduciary or the nominee of a fiduciary upon the instruction of
such fiduciary, unless made with the actual knowledge that a fiduciary or
nominee is committing a breach of trust in requesting such registration or
transfer, or with such knowledge of such facts that its participation therein
amounts to bad faith. Each Warrant shall initially be registered in the name of
the Lender to whom it is originally issued.
7.2 Restrictions on Exercise and Transfer. The Warrants may
not be exercised, sold, pledged, hypothecated, transferred or assigned, in whole
or in part, unless a registration statement under the Securities Act of 1933, as
amended (the "Act"), and under any applicable state securities laws is effective
therefor or, an exemption from such registration is then available. Any
exercise, sale, pledge, hypothecation, transfer, or assignment in violation of
the foregoing restriction shall be deemed null and void and of no binding
effect. The Company shall be entitled to obtain, as a condition precedent to its
issuance of any certificates representing Warrant Shares or any other securities
issuable upon any exercise of a Warrant, a letter or other instrument from the
Holder containing such covenants, representations or warranties by such Holder
as reasonably deemed necessary by Company to effect compliance by the Company
with the requirements of applicable federal and/or state securities laws.
4
7.3 Transfer. Subject to Section 7.2, the Warrants shall be
transferable only on the Warrant Register upon delivery thereof duly endorsed by
the Holder or by his duly authorized attorney or representative, or accompanied
by proper evidence of succession, assignment or authority to transfer, which
endorsement shall be guaranteed by a bank or trust company or a broker or dealer
which is a member of the National Association of Securities Dealers, Inc. In all
cases of transfer by an attorney, the original power of attorney, duly approved,
or a copy thereof, duly certified, shall be deposited and remain with the
Company (or the warrant agent, if appointed). In case of transfer by executors,
administrators, guardians or other legal representatives, duly authenticated
evidence of their authority shall be produced, and may be required to be
deposited and remain with the Company (or the warrant agent, if appointed) in
its discretion. Upon any registration of transfer, the Company shall execute and
deliver (or if appointed, the warrant agent shall countersign and deliver) a new
Warrant or Warrants to the persons entitled thereto.
Section 8. Exchange of Warrant Certificates. Each Warrant certificate
may be exchanged, at the option of the Holder thereof, for another Warrant
certificate or Warrant certificates in different denominations entitling the
Holder or Holders thereof to purchase a like aggregate number of Warrant Shares
as the certificate or certificates surrendered then entitle each Holder to
purchase. Any Holder desiring to exchange a Warrant certificate or certificates
shall make such request in writing delivered to the Company at its principal
office (or, if a warrant agent is appointed, the warrant agent at its principal
office) and shall surrender, properly endorsed, the certificate or certificates
to be so exchanged. Thereupon, the Company (or, if appointed, the warrant agent)
shall execute and deliver to the person entitled thereto a new Warrant
certificate or certificates, as the case may be, as so requested, in such name
or names as such Holder shall designate.
Section 9. Mutilated or Missing Warrants. In case any of the
certificates evidencing the Warrants shall be mutilated, lost, stolen or
destroyed, the Company may in its discretion issue and deliver (and, if
appointed, the warrant agent shall countersign and deliver) in exchange and
substitution for and upon cancellation of the mutilated Warrant certificate, or
in lieu of and substitution for the Warrant certificate lost, stolen or
destroyed, a new Warrant certificate of like tenor, but only upon receipt of
evidence reasonably satisfactory to the Company and the warrant agent (if so
appointed) of such loss, theft or destruction of such Warrant and an indemnity
or bond, if requested, also reasonably satisfactory to them. An applicant for
such a substitute Warrant certificate shall also comply with such other
reasonable regulations and pay such other reasonable charges as the Company (or
the warrant agent, if so appointed) may prescribe.
Section 10. Adjustment of Warrant Price and Number of Warrant Shares.
The number and kind of securities purchasable upon the exercise of each Warrant
and the Warrant Price shall be subject to adjustment from time to time upon the
happening of certain events, as hereinafter defined.
10.1 Adjustments. The number of Warrant Shares purchasable
upon the exercise of each Warrant and the Warrant Price shall be subject to
adjustment as follows:
5
(a) In the event that the Company shall (i) pay a
dividend in shares of Common Stock or make a distribution in shares of Common
Stock, (ii) subdivide its outstanding shares of Common Stock, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares of Common
Stock or (iv) reclassify or change (including a change to the right to receive,
or a change into, as the case may be (other than with respect to a merger or
consolidation pursuant to the exercise of appraisal rights), shares of stock,
other securities, property, cash or any combination thereof) its Common Stock
(including any such reclassification or change in connection with a
consolidation or merger in which the Company is the surviving corporation), the
number of Warrant Shares purchasable upon exercise of each Warrant immediately
prior thereto shall be adjusted so that the Holder of each Warrant shall be
entitled to receive the kind and number of Warrant Shares or other securities of
the Company or other property which he would have owned or have been entitled to
receive after the happening of any of the events described above, had such
Warrant been exercised immediately prior to the happening of such event or any
record date with respect thereto. An adjustment made pursuant to this paragraph
(a) shall become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event.
(b) In case the Company shall issue rights, options or
warrants to all holders of its outstanding Common Stock, without any charge to
such holders, entitling them to subscribe for or purchase shares of Common Stock
at a price per share which is lower at the record date mentioned below than the
then current market price per share of Common Stock (as defined in paragraph (d)
below), the number of Warrant Shares thereafter purchasable upon the exercise of
each Warrant shall be determined by multiplying the number of Warrant Shares
theretofore purchasable upon exercise of each Warrant by a fraction, of which
the numerator shall be the number of shares of Common Stock outstanding on the
date of issuance of such rights, options or warrants plus the number of
additional shares of Common Stock offered for subscription or purchase in
connection with such rights, options or warrants, and of which the denominator
shall be the number of shares of Common Stock outstanding on the date of
issuance of such rights, options or warrants plus the number of shares which the
aggregate offering price of the total number of shares of Common Stock so
offered would purchase at the current market price per share of Common Stock at
such record date. Such adjustment shall be made whenever such rights, options or
warrants are issued, and shall become effective immediately after the record
date for the determination of stockholders entitled to receive such rights,
options or warrants.
(c) In case the Company shall distribute to all holders
of its shares of Common Stock, (including any distribution made in connection
with a merger in which the Company is the surviving corporation), evidences of
its indebtedness or assets (excluding cash, dividends or distributions payable
out of consolidated earnings or earned surplus and dividends or distributions
referred to in paragraph (a) above) or rights, options or warrants, or
convertible or exchangeable securities containing the right to subscribe for or
purchase shares of Common Stock (excluding those referred to in paragraph (b)
above), then in each case the number of Warrant Shares thereafter purchasable
upon the exercise of each Warrant shall be determined by multiplying the number
of Warrant Shares theretofore purchasable upon the exercise of each
6
Warrant by a fraction, of which the numerator shall be the then current market
price per share of Common Stock (as defined in paragraph (d) below) on the date
of such distribution, and of which the denominator shall be the then current
market price per share of Common Stock, less the then fair value (as determined
by the Board of Directors of the Company or, in the case of Warrants held by the
Lender, an independent investment banker which shall be mutually agreeable to
the parties, whose determination, in each case, shall be conclusive) of the
portion of the assets or evidences of indebtedness so distributed or of such
subscription rights, options or warrants, or of such convertible or exchangeable
securities applicable to one share of Common Stock. Such adjustment shall be
made whenever any such distribution is made, and shall become effective on the
date of distribution retroactive to the record date for the determination of
shareholders entitled to receive such distribution.
(d) For the purpose of any computation under paragraphs
(b) and (c) of this Section 10.1, the current market price per share of Common
Stock at any date shall be the average of the daily last sale prices for the 20
consecutive trading days ending one trading day prior to the date of such
computation. The closing price for each day shall be the last reported sales
price regular way or, in case no such reported sale takes place on such day, the
average of the closing bid and asked prices regular way for such day, in each
case on the principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading or, if not so listed or admitted to
trading, the last sale price of the Common Stock on the Nasdaq Stock Market or
any comparable system. If the current market price of the Common Stock cannot be
so determined, the Board of Directors of the Company shall reasonably determine
the current market price on the basis of such quotations as are available.
(e) No adjustment in the number of Warrant Shares
purchasable hereunder shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the number of Warrant
Shares purchasable upon the exercise of each Warrant; provided, however, that
any adjustments which by reason of this paragraph (e) are not required to be
made shall be carried forward and taken into account in the determination of any
subsequent adjustment. All calculations shall be made with respect to the number
of Warrant Shares purchasable hereunder, to the nearest tenth of a share and
with respect to the Warrant Price payable hereunder, to the nearest whole cent.
(f) Whenever the number of Warrant Shares purchasable
upon the exercise of each Warrant is adjusted, as herein provided, the Warrant
Price payable upon exercise of each Warrant shall be adjusted by multiplying
such Warrant Price immediately prior to such adjustment by a fraction, of which
the numerator shall be the number of Warrant Shares purchasable upon the
exercise of each Warrant immediately prior to such adjustment, and of which the
denominator shall be the number of Warrant Shares purchasable immediately
thereafter.
(g) No adjustment in the number of Warrant Shares
purchasable upon the exercise of each Warrant need be made under paragraphs (b)
and (c) if the Company issues or distributes to each Holder of Warrants the
rights options, warrants, or convertible or exchangeable securities, or
evidences of indebtedness or assets referred to in those paragraphs
7
which each Holder of Warrants would have been entitled to receive had the
Warrants been exercised prior to the happening of such event or the record date
with respect thereto. No adjustment need be made for a change in the par value
of the Warrant Shares.
(h) For the purpose of this Section 10.1, the term
"shares of Common Stock" shall mean (i) the class of stock designated as the
Common Stock of the Company at the date of this Agreement, or (ii) any other
class of stock resulting from successive changes or reclassifications of such
shares consisting solely of changes in par value, or from par value to no par
value, or from no par value to par value. In the event that at any time, as a
result of an adjustment made pursuant to paragraph (a) above, the Holders shall
become entitled to purchase any securities of the Company other than shares of
Common Stock, thereafter the number of such other shares so purchasable upon
exercise of each Warrant and the Warrant Price of such shares shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Warrant Shares contained in
paragraphs (a) through (i), inclusive, and the provisions of Section 3 and
Section 10.2 through Section 10.5, inclusive, with respect to the Warrant
Shares, shall apply on like terms to any such other securities.
(i) Upon the expiration of any rights, options, warrants
or conversion or exchange privileges, if any thereof shall not have been
exercised, the Warrant Price and the number of Warrant Shares purchasable upon
the exercise of each Warrant shall, upon such expiration, be readjusted and
shall thereafter be such as it would have been had it been originally adjusted
(or had the original adjustment not been required, as the case may be) as if (A)
the only shares of Common Stock so issued were the shares of Common Stock, if
any, actually issued or sold upon the exercise of such rights, options, warrants
or conversion or exchange rights and (B) such shares of Common Stock, if any,
were issued or sold for the consideration actually received by the Company upon
such exercise plus the aggregate consideration, if any, actually received by the
Company for the issuance, sale or grant of all such rights, options, warrants or
conversion or exchange rights whether or not exercised.
10.2 Voluntary Adjustment by the Company. The Company may at
its option, at any time during the term of the Warrants, reduce the then current
Warrant Price to any amount deemed appropriate by the Board of Directors of the
Company.
10.3 Notice of Adjustment. Whenever the number of Warrant
Shares purchasable upon the exercise of each Warrant or the Warrant Price of
such Warrant Shares is adjusted, as herein provided, the Company shall, or in
the event that a warrant agent is appointed, the Company shall cause the warrant
agent promptly to, mail by first class, postage prepaid, to each Holder notice
of such adjustment or adjustments. Such notice shall set forth the number of
Warrant Shares purchasable upon the exercise of each Warrant and the Warrant
Price of such Warrant Shares 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.
8
10.4 No Adjustment for Dividends. Except as provided in
Section 10.1, no adjustment in respect of any dividends shall be made during the
term of a Warrant or upon the exercise of a Warrant.
10.5 Preservation of Purchase Rights Upon Merger,
Consolidation, etc. In case of any consolidation of the Company with or merger
of the Company into another corporation or in case of any sale, transfer or
lease to another corporation of all or substantially all the property of the
Company, the Company or such successor or purchasing corporation, as the case
may be, shall execute an agreement that each Holder shall have the right
thereafter, upon such Holder's election, either (i) upon payment of the Warrant
Price in effect immediately prior to such action, to purchase upon exercise of
each Warrant the kind and amount of shares and other securities and property
(including cash) which he would have owned or have been entitled to receive
after the happening of such consolidation, merger, sale, transfer or lease had
such Warrant been exercised immediately prior to such action (such shares and
other securities and property (including cash) being referred to as the "Sale
Consideration") or (ii) to receive, in cancellation of such Warrant (and in lieu
of paying the Warrant price and exercising such Warrant), the Sale Consideration
less a portion thereof having a fair market value (as reasonably determined by
the Company) equal to the Warrant Price (it being understood that, if the Sale
Consideration consists of more than one type of shares, other securities or
property, the amount of each type of shares, other securities or property to be
received shall be reduced proportionately); provided, however, that no
adjustment in respect of dividends, interest or other income on or from such
shares or other securities and property shall be made during the term of a
Warrant or upon the exercise of a Warrant. The Company shall mail by first class
mail, postage prepaid, to each Holder, notice of the execution of any such
agreement. Such agreement shall provide for adjustments, which shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section 10. The provisions of this paragraph shall similarly apply to successive
consolidations, mergers, sales, transfers or leases. The warrant agent (if
appointed) shall be under no duty or responsibility to determine the correctness
of any provisions contained in any such agreement relating to the kind or amount
of shares of stock or other securities or property receivable upon exercise of
Warrants or with respect to the method employed and provided therein for any
adjustments and shall be entitled to rely upon the provisions contained in any
such agreement.
10.6 Statement on Warrants. Irrespective of any adjustments in
the Warrant Price or the number or kind of shares purchasable upon the exercise
of the Warrants, Warrants issued before or after such adjustment may continue to
express the same price and number and kind of shares as are stated in the
Warrants initially issuable pursuant to this Agreement.
Section 11. Reservation of Warrant Shares; Purchase and Cancellation of
Warrants.
11.1 Reservation of Warrant Shares. There have been reserved,
and the Company shall at all times keep reserved, out of its authorized Common
Stock, a number of shares of Common Stock sufficient to provide for the exercise
of the rights of purchase represented by the outstanding Warrants and any
additional Warrants issuable hereunder. The Transfer Agent for the Common Stock
and every subsequent transfer agent for any shares of the Company's capital
stock issuable upon the exercise of any of the rights of purchase aforesaid will
be irrevocably authorized and directed at all times to reserve such number of
authorized shares as shall be required for such purpose. The Company will keep a
copy of this Agreement on file with the Transfer Agent for the Common Stock and
with every subsequent transfer agent for any shares of the
9
Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The warrant agent, if appointed, will be
irrevocably authorized to requisition from time to time from such Transfer Agent
the stock certificates required to honor outstanding Warrants upon exercise
thereof in accordance with the terms of this Agreement. The Company will supply
such Transfer Agent with duly executed stock certificates for such purposes and
will provide or otherwise make available any cash which may be payable as
provided in Section 12. The Company will furnish such Transfer Agent a copy of
all notices of adjustments and certificates related thereto, transmitted to each
Holder pursuant to Section 10.3.
11.2 Purchase of Warrants by the Company. The Company shall
have the right, except as limited by law, other agreements or herein, with the
consent of the Holder, to purchase or otherwise acquire Warrants at such times,
in such manner and for such consideration as it may deem appropriate.
11.3 Cancellation of Warrants. In the event the Company shall
purchase or otherwise acquire Warrants, the same shall thereupon be cancelled
and retired. The warrant agent (if so appointed) shall cancel any Warrant
surrendered for exchange, substitution, transfer or exercise in whole or in
part.
Section 12. Fractional Interests. The Company shall not be required to
issue fractional Warrant Shares on the exercise of 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 Warrant Shares which shall be issuable upon the
exercise thereof shall be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would, except for the provisions of this Section 12,
be issuable on the exercise of any Warrant (or specified portion thereof), the
Company shall pay an amount in cash equal to the average of the daily closing
sale prices (determined in accordance with paragraph (d) of Section 10.1) per
share of Common Stock for the 20 consecutive trading days ending one trading day
prior to the date the Warrant is presented for exercise, multiplied by such
fraction.
Section 13. No Rights as Shareholders; Notices to Holders. Nothing
contained in this Agreement or in any of the Warrants shall be construed as
conferring upon the Holders or their transferees the right to vote or to receive
dividends or to consent or to receive notice as shareholders in respect of any
meeting of shareholders for the election of directors of the Company or any
other matter, or any rights whatsoever as shareholders of the Company. If,
however, at any time prior to the expiration of the Warrants and prior to their
exercise, any of the following events shall occur:
(a) the Company shall declare any dividend payable in any
securities upon its shares of Common Stock or make any distribution (other than
a regular cash dividend,
10
as such dividend may be increased from time to time, or a dividend payable in
shares of Common Stock) to the holders of its shares of Common Stock; or
(b) the Company shall offer to the holders of its shares
of Common Stock on a pro rata basis any cash, additional shares of Common Stock
or other securities of the Company or any right to subscribe for or purchase any
thereof; or
(c) a dissolution, liquidation or winding up of the
Company (other than in connection with a consolidation, merger, sale, transfer
or lease of all or substantially all of its property, assets, and business as an
entirety) shall be proposed,
then in any one or more of said events the Company shall (i) give notice in
writing of such event as provided in Section 15 and (ii) if the Warrants have
been registered pursuant to the Act, cause notice of such event to be published
once in The Wall Street Journal (national edition), such giving of notice and
publication to be completed at least 10 days prior to the date fixed as a record
date or the date of closing the transfer books for the determination of the
stockholders entitled to such dividend, distribution, or subscription rights or
for the determination of stockholders entitled to vote on such proposed
dissolution, liquidation or winding up or the date of expiration of such offer.
Such notice shall specify such record date or the date of closing the transfer
books or the date of expiration, as the case may be. Failure to publish, mail or
receive such notice or any defect therein or in the publication or mailing
thereof shall not affect the validity of any action in connection with such
dividend, distribution or subscription rights, or such proposed dissolution,
liquidation or winding up, or such offer.
Section 14. Appointment of Warrant Agent. At such time as the Company
shall register Warrants under the Act, the Company shall appoint a warrant agent
to act on behalf of the Company in connection with the issuance, division,
transfer and exercise of Warrants. At such time as the Company appoints a
warrant agent, the Company shall enter into a new Warrant Agreement with the
warrant agent pursuant to which all new Warrants will be issued upon
registration of transfer or division, which will reflect the appointment of the
warrant agent, as well as additional customary provisions as shall be reasonably
requested by the warrant agent in connection with the performance of its duties.
In the event that a warrant agent is appointed, the Company shall (i) promptly
notify the Holders of such appointment and the place designated for transfer,
exchange and exercise of the Warrants, and (ii) take such steps as are necessary
to insure that Warrants issued prior to such appointment may be exchanged for
Warrants countersigned by the warrant agent.
Section 15. Notices; Principal Office. Any notice pursuant to this
Agreement by the Company or by any Holder to the warrant agent (if so
appointed), or by the warrant agent (if so appointed) or by any Holder to the
Company, shall be in writing and shall be delivered in person, or mailed first
class, postage prepaid (a) to the Company, at its office, Attention: President
or (b) to the warrant agent, at its offices as designated at the time the
warrant agent is appointed. The address of the principal office of the Company
is 935 Pardee Street, Berkeley, California 94710. Any notice mailed pursuant to
this Agreement by the Company or the warrant agent to the
11
Holders shall be in writing and shall be mailed first class, postage prepaid, or
otherwise delivered, to such Holders at their respective addresses on the books
of the Company or the warrant agent, as the case may be. Each party hereto and
any Holder may from time to time change the address to which notices to it are
to be delivered or mailed hereunder by notice to the other party.
Section 16. Successors. Except as expressly provided herein to the
contrary, all the covenants and provisions of this Agreement by or for the
benefit of the Company and the Lender shall bind and inure to the benefit of
their respective successors and permitted assigns hereunder.
Section 17. Merger or Consolidation of the Company. The Company will
not merge or consolidate with or into, or sell, transfer or lease all or
substantially all of its property to, any other corporation unless the successor
or purchasing corporation, as the case may be (if not the Company), shall
expressly assume, by supplemental agreement, the due and punctual performance
and observance of each and every covenant and condition of this Agreement to be
performed and observed by the Company.
Section 18. Registration Rights.
18.1 Filing of Registration Statement. The Company agrees, at
its expense, to file a registration statement with the Securities and Exchange
Commission to register the Warrants and the Warrant Shares under the Act, and to
take such other actions as may be necessary to allow the Warrants and the
Warrant Shares to be freely tradable, without restrictions, in compliance with
all regulatory requirements. Such registration statement shall be filed promptly
and the Company will use its best efforts to cause the registration statement to
become effective within 120 days after the date of this Agreement. The Company
will make all filings required under applicable state securities or "blue sky"
laws so that the Warrants and Warrant 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
Warrants and Warrant Shares covered by the registration statement. The
registration statement shall be a "shelf" registration pursuant to Rule 415 (or
similar rule that may be adopted by the Securities and Exchange Commission) and
shall provide that each Holder's plan of distribution is to offer and sell
Warrant Shares from time to time at market prices or prices related to market
prices; provided, that the registration statement may be amended to provide for
an underwritten public offering of Warrant Shares if the Holders submit to the
Company a written notice to such effect with a copy of the applicable
underwriting documents and such other relevant information concerning the
offering as the Company may request. The Company shall keep such registration
statement effective until the earlier of (a) completion of the distribution or
distributions being made pursuant thereto, and (b) such time as all of the
Holders are eligible to sell their Warrant Shares under Rule 144(k) under the
Act. The Company shall utilize Form S-3 if it qualifies for such use. The
Company will furnish to the Holders of Warrants and Warrant Shares registered
for sale under the Act (the "Selling Securities Holders") such numbers of copies
of a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act and such other related documents as the Selling
Securities Holders may reasonably request in order to effect the sale of the
Warrants and Warrant Shares. To effect any offering pursuant to a registration
statement under this Section, the Company shall enter into an agreement
containing customary
12
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 Selling Security Holders and reasonably acceptable
to the Company, containing such customary representations and warranties, and
indemnification and contribution provisions
18.2 "Piggy-Back Registration." If, at any time, the Company
proposes to register any of its securities under the Act (otherwise than
pursuant to Section 18.1 or on a Form S-8 if such form cannot be used for
registration of the Warrant or Warrant Shares pursuant to its terms), and the
registration statement described in Section 18.1 shall not then be effective
under the Act, the Company shall, as promptly as practicable, give written
notice to the Lender. The Company shall include in such registration statement
the Warrants and any Warrant Shares proposed to be sold by the Selling
Securities Holders. Notwithstanding the foregoing, if the offering of the
Company's securities is to be made through underwriters, the Company shall not
be required to include the Warrants and Warrant 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.
18.3 Costs of Registration. The Company 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 the Company, listing fees and expenses, and fees and
expenses of the Company's counsel, independent accountants and other persons
retained or employed by the Company. Selling Securities Holders shall pay any
underwriters discounts applicable to the Warrants and Warrant Shares.
Section 19. Legends. The Warrants and Warrant Shares issued pursuant to
this Agreement shall bear an appropriate legend, conspicuously disclosing the
restrictions on exercise and transfer under Section 7.2 of this Agreement until
the same are registered for sale under the Act. The Company agrees that upon the
sale of the Warrants and Warrant Shares pursuant to a registration statement or
an exemption, upon the presentation of the certificates containing such a legend
to it's transfer agent, it will remove such legend. The Company further agrees
to remove the legend at such time as registration under the Act shall no longer
be required.
Section 20. Applicable Law. This Agreement and each Warrant issued
hereunder shall be governed by and construed in accordance with the laws of the
State of California, without giving effect to principles of conflict of laws.
Section 21. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
warrant agent (if appointed) and the Holders any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the warrant agent and the Holders of the
Warrants.
13
Section 22. Counterparts. This Agreement may be executed in any number
ofcounterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 23. Captions. The captions of the Sections and subsections of
this Agreement
have been inserted for convenience only and shall have no substantive effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
BIOTIME, INC.
By: s/Paul Segall
------------------------
Name: Paul Segall, Ph.D
Title: Chairman and Chief Executive Officer
Attest:
By: s/Judith Segall
-------------------------------
Name: Judith Segall
Title: Secretary
14
EXHIBIT A
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR UNDER APPLICABLE STATE SECURITIES LAWS. THIS WARRANT MAY NOT BE
EXERCISED, SOLD, PLEDGED, HYPOTHECATED, TRANSFERRED OR ASSIGNED EXCEPT UNDER AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES
LAWS, UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
VOID AFTER 5:00 P.M. NEW YORK TIME, August 1, 2004
Certificate No.
------ Warrant to Purchase
[Insert number of Shares]
Shares of Common Stock
BIOTIME, INC.
COMMON STOCK PURCHASE WARRANTS
This certifies that, for value received, [Insert name of Holder] or
registered assigns (the "Holder"), is entitled to purchase from BioTime, Inc. a
California corporation (the "Company"), at a purchase price per share [Insert
Warrant Price determined pursuant to Sections 4 and 10 of the Warrant Agreement]
(the "Warrant Price"), the number of its Common Shares, no par value per share
(the "Common Stock"), shown above. The number of shares purchasable upon
exercise of the Common Stock Purchase Warrants (the "Warrants") and the Warrant
Price are subject to adjustment from time to time as set forth in the Warrant
Agreement referred to below. Outstanding Warrants not exercised prior to 5:00
p.m., New York time, on August 1, 2004 shall thereafter be void.
Subject to restriction specified in the Warrant Agreement, Warrants may
be exercised in whole or in part by presentation of this Warrant Certificate
with the Purchase Form on the reverse side hereof duly executed, which signature
shall be guaranteed by a bank or trust company or a broker or dealer which is a
member of the National Association of Securities Dealers, Inc., and simultaneous
payment of the Warrant Price (or as otherwise set forth in Section 10.5 of the
Warrant Agreement) at the principal office of the Company (or if a warrant agent
is appointed, at the principal office of the warrant agent). Payment of the
Warrant Price shall be made in cash or by certified or bank cashier's check or
by delivery of Debentures in such amount as provided in Section 3 of the Warrant
Agreement. As provided in the Warrant Agreement, the Warrant Price and the
number or kind of shares which may be purchased upon the exercise of the Warrant
evidenced by this Warrant Certificate are, upon the happening of certain events,
subject to modification and adjustment.
The Warrants evidenced by this Warrant Certificate may be redeemed by
the Company, at its election, at any time after June 30, 2002, if (a) a
registration statement under Section 18.1 of the
A-1
Warrant Agreement or a registration statement under Section 18.2 of the Warrant
Agreement that includes Warrants and Warrant Shares is then effective under the
Securities Act of 1933, as amended, and (b) the closing price of the Common
Stock on a national securities exchange (including the Nasdaq Stock Market
National Market System) , or the average bid price as quoted in Nasdaq Stock
Market if the Common Shares are not listed on a national securities exchange,
equals or exceeds 150% of the Warrant Price for any fifteen (15) consecutive
trading days ending not more than thirty (30) days prior to the date of the
notice given pursuant to Section 6.2 of the Warrant Agreement. From and after
the date specified by the Company for redemption of the Warrants (the
"Redemption Date"), the Warrants evidenced by this Warrant Certificate shall no
longer be deemed outstanding and all rights of the Holder of this Warrant
Certificate shall cease and terminate, except for the right of the registered
Holder to receive payment of the redemption price of one cent ($0.01) per
Warrant Share upon presentation and surrender of this Warrant Certificate. The
Redemption Date shall abate, and the notice of redemption shall be of no effect,
if the closing price or average bid price of the Common Stock, as applicable
under Section 6.1 of the Warrant Agreement, does not equal or exceed 120% of the
Warrant Price on the Redemption Date and the five trading days immediately
preceding the Redemption Date, but the right Company shall have the right to
redeem the Warrants at a future date if the conditions set forth in Section 6.1
of the Warrant Agreement are subsequently met and a new notice setting a new
Redemption Date is sent to Warrant holders.
This Warrant Certificate is issued under and in accordance with a
Warrant Agreement dated as of August 13, 2001 between the Company and the
persons named as "Lenders" therein, and is subject to the terms and provisions
contained in the Warrant Agreement, to all of which the Holder of this Warrant
Certificate by acceptance of this Warrant Certificate consents. A copy of the
Warrant Agreement may be obtained by the Holder hereof upon written request to
the Company. In the event that pursuant to Section 14 of the Warrant Agreement a
warrant agent is appointed and a new warrant agreement entered into between the
Company and such warrant agent, then such new warrant agreement shall constitute
the Warrant Agreement for purposes hereof and this Warrant Certificate shall be
deemed to have been issued pursuant to such new warrant agreement.
Upon any partial exercise of the Warrant evidenced by this Warrant
Certificate, there shall be issued to the Holder hereof a new Warrant
Certificate in respect of the shares of Common Stock as to which the Warrant
evidenced by this Warrant Certificate shall not have been exercised. This
Warrant Certificate may be exchanged at the office of the Company (or the
warrant agent, if appointed) by surrender of this Warrant Certificate properly
endorsed either separately or in combination with one or more other Warrant
Certificates for one or more new Warrant Certificates evidencing the right of
the Holder thereof to purchase the aggregate number of shares as were
purchasable on exercise of the Warrants evidenced by the Warrant Certificate or
Certificates exchanged. No fractional shares will be issued upon the exercise of
any Warrant, but the Company will pay the cash value thereof determined as
provided in the Warrant Agreement. This Warrant Certificate is transferable at
the office of the Company (or the warrant agent, if appointed) in the manner and
subject to the limitations set forth in the Warrant Agreement.
A-2
The Holder hereof may be treated by the Company, the warrant agent (if
appointed) and all other persons dealing with this Warrant Certificate as the
absolute owner hereof for any purpose and as the person entitled to exercise the
rights represented hereby, or to the transfer hereof on the books of the
Company, any notice to the contrary notwithstanding, and until such transfer on
such books, the Company (and the warrant agent, if appointed) may treat the
Holder hereof as the owner for all purposes.
Neither the Warrant nor this Warrant Certificate entitles any Holder to
any of the rights of a stockholder of the Company.
[This Warrant Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the warrant agent.]*
DATED:
BIOTIME, INC.
(Seal) By:________________________
Title: ______________________
Attest:____________________
[COUNTERSIGNED:
WARRANT AGENT
By:_________________________]*
Authorized Signature
- --------------------
* To be part of the Warrant only after the appointment of a warrant agent
pursuant to Section 14 of the Warrant Agreement.
A-3
PURCHASE FORM
(To be executed upon exercise of Warrant)
To BioTime, Inc.:
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant Certificate for, and to purchase
thereunder, _______ shares of Common Stock, as provided for therein, and tenders
herewith payment of the Warrant Price in full in the form of cash or a certified
or bank cashier's check or outstanding Series 2001-A Debentures in the amount of
$______________.
Please issue a certificate or certificates for such shares of Common
Stock in the name of, and pay any cash for any fractional share to:
- ------------------------------------
(Please Print Name)
- ------------------------------------
(Please Print Address)
- ------------------------------------
(Social Security Number or
Other Taxpayer Identification Number)
- ------------------------------------
(Signature)
NOTE: The above signature should correspond exactly with the name on the
face of this Warrant Certificate or with the name of the assignee
appearing in the assignment form below.
And, if said number of shares shall not be all the shares purchasable under the
within Warrant Certificate, a new Warrant Certificate is to be issued in the
name of said undersigned for the balance remaining of the share purchasable
thereunder less any fraction of a share paid in cash.
A-4
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate)
For value received, _____________ hereby sells, assigns and transfers
unto _______________ the within Warrant Certificate, together with all right,
title and interest therein, and does hereby irrevocably constitute and appoint
_________________ attorney, to transfer said Warrant Certificate on the books of
the within-named Company, with full power of substitution in the premises.
Dated:___________________ ________________________________
(Signature)
NOTE: The above signature should correspond
exactly with the name on the face of this
Warrant Certificate.
A-5