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THIRD AMENDED AND RESTATED REVOLVING LINE OF CREDIT AGREEMENT

BIOTIME, INC.

Dated as of March 31, 2008

 
 

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TABLE OF CONTENTS

1.
 
General Definitions.
 
1
         
2.
 
Draws and Disbursements.
 
2
         
3.
 
Terms of Payment.
 
5
         
4.
 
Shares.
 
6
         
5.
 
Events of Default.
 
6
         
6.
 
Representations and Warranties of Borrower.
 
7
         
7.
 
Affirmative Covenants.
 
8
         
8.
 
Maximum Permitted Interest.
 
10
         
9.
 
Governing Law.
 
10
         
10.
 
Successors and Assigns.
 
10
         
11.
 
Entire Agreement; Amendment.
 
10
         
12.
 
Survival.
 
11
         
13.
 
Notices.
 
11
         
14.
 
Delays and Omissions.
 
11
         
15.
 
Rules of Construction.
 
12
         
16.
 
Counterparts.
 
12
         
17.
 
Exchange of Debt for Equity.
 
12
         
18.
 
Registration Rights.
 
13
         
19.
 
Legends.
 
15
         
20.
 
Investment Representations.
 
15

 
 

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THIRD AMENDED AND RESTATED REVOLVING LINE OF CREDIT AGREEMENT

This Third Amended and Restated Revolving Line of Credit Agreement (“Credit
Agreement”) is made and entered into as of March 31, 2008, by and among each of
the persons who have executed this Agreement as a Lender (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, the First Amended and Restated Credit Agreement
dated October 17, 2007, and the Second Amended and Restated Credit Agreement
dated February 15, 2008.

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
$2,500,000from 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 $2,500,000 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.

 
 

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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) November 15, 2008, and
(ii) such date on which Borrower shall have received an aggregate of $4,000,000
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
$2,500,000 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 promissory note evidencing a portion of the
Loan previously advanced by certain Lenders, and (b) each Revolving Credit Note
in the form attached as EXHIBIT A-1evidencing the new Loan amounts to be
advanced by certain Lenders.

1.10           “Security Agreement” means that certain Third 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 Two Million Five Hundred Thousand Dollars ($2,500,000), 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
November 15, 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 Default, one of Lenders’ remedies includes Lenders’ right to
terminate the Draw Period and Borrower’s right to make Draws under this Credit
Agreement.

 
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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.

 
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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.

2.7           Amended Promissory Notes.  Each Lender who executes this Third
Amended and Restated Credited Agreement and who holds a Note previously issued
(“Original Note”), shall tender their Original Note for an amended Note
referencing the terms of this Third Amended and Restated Revolving Line of
Credit Agreement.  Until such time an Original Note is tendered to Borrower and
an amended Note is delivered to the Lender in exchange, the capitalized terms in
the Original Note shall be deemed to have the meaning ascribed in this Third
Amended and Restated Revolving Line of Credit Agreement.

 
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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 as
follows:  (i) interest accrued on Draws made prior to March 31, 2008 shall be
paid on April 30, 2008; and (ii) all other 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.

 
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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 99,999 Shares to Lenders who were
parties to this Agreement on April 12, 2006, has issued 200,000 Shares to
Lenders who were parties to this Agreement on October 17, 2007, and has issued
10,000 Shares to a Lender who became a party to this Agreement on February 15,
2008.  As consideration for making the amended Credit Facility available to
Borrower under this Credit Agreement (including the extension of the Maturity
Date in the case of Loan commitments made prior to the date of this Agreement),
Borrower shall issue and deliver to each Lender one Share for each five dollars
of the Lender’s Loan commitment with respect to Loan commitments made prior to
April 8, 2008, and the lesser of (a) one Share for each five dollars of the
Lender’s Loan commitment, or (b) a number of Shares having an aggregate market
value (which shall be deemed to be the closing price of the Shares on the OTCBB
on the last day on which a closing price of the Shares was reported) equal to
six percent (6%) of the Lender’s Loan commitment, with respect to Loan
commitments made on or after April 8, 2008.  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
of 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.

 
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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.

 
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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 either
(a) a copy of Borrower’s 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 nine months ended September 30, 2007, and all Current Reports on Form 8-K
filed by Borrower since September 30, 2007, or (b)  a copy of Borrower’s annual
report on Form 10-KSB for the fiscal year ended December 31, 2007 and all
Current Reports on Form 8-K and quarterly reports on Form 10-Q filed by Borrower
since the filing of the latest Form 10-KSB (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 decree 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.

 
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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 the interest rate then applicable to the principal.  Costs,
expenses, and reasonable fees of professionals covered by this provision include
such charges for the following:

7.7           The preparation, modification, or renewal of this Credit Agreement
and the Note, or any other documentation incident to the loan transaction;

 
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7.8           Any litigation, dispute, proceeding or action, whether instituted
by Lender, Borrower, or any other person, relating to the Note or this
Agreement, including representation of Lender in any bankruptcy, insolvency, or
reorganization case or proceeding instituted by or against Borrower, and any
attempt by Lender to enforce any rights against Borrower;

7.9           In the event of bankruptcy or insolvency proceedings (whether
state or federal) instituted by or against Borrower or involving the Borrower or
Property of the Borrower, the Lender may recover all costs, expenses, and
reasonable attorney fees incurred to protect or defend Lender’s rights under the
Note, and other documents underlying the loan transactions whether such costs,
expenses, and attorney fees be contractual or bankruptcy related, including
costs, expenses, and attorney fees for meetings, sessions, matters, proceedings
and litigation involving issues solely distinct to federal bankruptcy law, rules
and proceedings as well as other federal and state litigation and proceedings;

7.10         The inspection, verification, protection, collection, processing,
sale, liquidation, or disposition of security given for the Note;

7.11         The preparation and filing of all reports required to be filed by
Lender under the Exchange Act during the term of this Credit Agreement in
connection with the ownership, acquisition, or disposition of the Shares, or
other equity securities issued by Borrower.

8.             Maximum Permitted Interest. No provision of this Credit Agreement
or any other Loan Document, or any transaction related thereto, shall be
construed or so operate as to require the Borrower to pay interest at a greater
rate than the maximum allowed by applicable state or federal law.  Should any
interest or other charges paid or payable by the Borrower in connection with the
Loan result in the computation or earning of interest in excess of the maximum
allowed by applicable state or federal law, then any and all such excess shall
be and the same is hereby waived by Lender, and any and all such excess paid
shall be credited automatically against and in reduction of the outstanding
principal balance due of the Loan, and the portion of said excess which exceeds
such principal balance shall be paid by Lender to the Borrower.

9.             Governing Law.  This Credit Agreement shall be construed and
governed in all respects by the laws of the State of California.

10.           Successors and Assigns.  The provisions of this Credit Agreement
shall inure to the benefit of, and be binding upon, the respective successors,
assigns, heirs, executors and administrators of Borrower and Lenders.

11.           Entire Agreement; Amendment.  This Credit Agreement and the other
Loan Documents constitute the full and entire understanding and agreement among
the parties with regard to the subject matter thereof.  This Credit Agreement
and any term of this Credit Agreement may be amended, waived, discharged or
terminated only by a written instrument signed by the party to be charged,
provided, however, that Schedule I may be amended from time to time by Borrower
to reflect the loan commitments of new Lenders who execute a counterpart of this
Agreement, or to reflect an increase in the loan commitment of any Lender who
agrees to increase their loan commitment.

 
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12.           Survival.  Borrower’s representations and warranties contained in
this Credit Agreement shall survive the funding of each Draw and any
investigation made by any party until the Loan is repaid in full.

13.           Notices.  All notices and other communications required or
permitted to be given pursuant to this Agreement shall be in writing and shall
be deemed given four (4) days after being deposited in the United States mail,
certified postage prepaid, return receipt requested, or when delivered by hand,
by messenger or express air freight service, in any case addressed to the
Lenders at their respective addresses shown on Schedule I, or to Borrower as
follows:

 
BioTime, Inc.
 
6121 Hollis Street
 
Emeryville, California 94608
 
Attention:  Steven Seinberg, Chief Financial Officer
 
FAX:  (510) 350-2948
     
with a copy to:
 
Richard S. Soroko, Esq.
 
Lippenberger, Thompson, Welch, Soroko & Gilbert LLP
 
201 Tamal Vista, Blvd.
 
Corte Madera, California  94925

Any party may change its address for the purpose of this Section 13 by giving
notice to each other party in accordance with this Section 13.

14.           Delays and Omissions.  No delay or omission to exercise any right,
power, or remedy accruing to a Lender, upon any breach or default of Borrower
under this Credit Agreement or any other Loan Document, shall impair any such
right, power, or remedy of the Lender, nor shall it be construed to be a waiver
of, or an acquiescence in, any such breach or default or any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring.  Any waiver, permit, consent, or approval of any kind or
character on the part of a Lender of any breach or default by Borrower under
this Credit Agreement or any other Loan Document, or any waiver of any
provisions or conditions of this Credit Agreement or any other Loan Document by
a Lender, must be made in writing, and shall be effective only to the extent
specifically set forth in such writing.  All remedies either under this
Agreement or by law and otherwise afforded to any party shall be cumulative and
not alternative.

 
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15.           Rules of Construction.

15.1         Titles and Subtitles.  The titles or headings of the Sections and
paragraphs of this Credit Agreement are for convenience of reference only and
are not to be considered in construing this Credit Agreement.

15.2         Singular; Plural.  Whenever appropriate in this Agreement, terms in
the singular form shall include the plural (and vice versa) and any gender form
shall include all others.

15.3         Section Headings.  Section headings are for the convenience of the
parties and do not form a part of this Agreement.

15.4         Sections and Other References.  References in this Agreement to
sections, paragraphs, and exhibits are references to articles, sections, and
paragraphs in this Agreement and schedules and exhibits attached to this
Agreement unless specified otherwise.

15.5         Severability.1.18Severability.  If one or more provisions of this
Credit Agreement are held to be unenforceable under applicable law, each such
unenforceable provision shall be excluded from this Credit Agreement and the
balance of this Credit Agreement shall be interpreted as if each such
unenforceable provision were so excluded, and the balance of this Credit
Agreement as so interpreted shall be enforceable in accordance with its terms.

16.           Counterparts.  This Credit Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.  Any document, including, without limitation,
counterparts of this Agreement, may be transmitted by facsimile or other
electronic means and upon receipt shall be deemed an original; provided that
upon demand of the recipient, the sender within a reasonable time of such demand
shall mail or deliver an originally signed copy of such document.

17.           Exchange of Debt For Equity.  Borrower agrees that at any time on
or before the Maturity Date, each Lender may exchange their Note(s), in whole or
in part, including both unpaid principal and accrued interest, for common
shares, no par value of Borrower (“BioTime Exchange Shares”) at a price of $1.00
per share, and for common shares, no par value of Embryome Sciences, Inc. (“ESI
Exchange Shares”) at a price of $2.00 per share.  All BioTime Exchange Shares
and all ESI Exchange Shares issued in exchange for Notes will be duly authorized
and validly issued, fully paid and non-assessable.  The right of the Lenders to
exchange their Notes for BioTime Exchange Shares and ESI Exchange Shares, and
the obligation of Borrower to deliver BioTime Exchange Shares or ESI Exchange
Shares in exchange for Notes, shall be subject to the following conditions:

17.1         The exchange of the Note for BioTime Exchange Shares or ESI
Exchange Shares shall be exempt from registration under the Securities Act of
1933, as amended (the “Act”) and from qualification under the California
Corporate Securities Law of 1968, and from registration or qualification under
the securities laws or “blue sky” laws of other states, in reliance upon the
exemptions from such registration and qualification requirements for non-public
offerings.  Lender shall provide Borrower with such other information and
documents concerning Lender as Borrower or Embryome Sciences, Inc. (“ESI”) may
reasonably request to confirm that such exemptions from registration and
qualification are available.

 
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17.2         The Lender shall confirm in writing to Borrower (and to ESI if ESI
Exchange Shares are being acquired) that the Lender’s representations and
warranties under Section 20 of this Agreement are true and correct as of the
date that the Lender tenders a Note in exchange for BioTime Exchange Shares or
ESI Exchange Shares.

17.3         If on the date a Lender tenders a Note in exchange for BioTime
Exchange Shares, Borrower determines that its annual, quarterly, and current
reports filed under Section 13 of the Securities Exchange Act of 1934, as
amended (“Exchange Act Reports”), do not contain all material facts concerning
Borrower that Borrower reasonably believes a prudent investor may want to
consider in deciding whether to exchange a Note for BioTime Exchange Shares,
BioTime may delay acceptance of a tender of a Note for exchange until such time
as (a) BioTime has filed such amended or additional Exchange Act Reports as may
be required to disclose all such material facts, and (b) BioTime has delivered
such amended or new Exchange Act Reports to the Lender.  If on the date a Lender
tenders a Note in exchange for ESI Exchange Shares, Borrower determines that the
Lender has not received disclosure documents containing all material facts
concerning ESI that Borrower reasonably believes a prudent investor may want to
consider in deciding whether to exchange a Note for ESI Exchange Shares, BioTime
may delay acceptance of a tender of a Note for exchange until such time as
BioTime has prepared and delivered to the Lender documents disclosing all such
material facts.

17.4         A Lender may exchange a Note for BioTime Exchange Shares or ESI
Exchange Shares by delivering the Note to Borrower accompanied by a written
notice of the Lender’s election to exchange the Note (“Notice of
Exchange”).  The Notice of Exchange shall be duly executed by an authorized
officer of the Lender, and shall specify: (a) the amount of the Note being
exchanged or that the entire amount of the Note (which will include the unpaid
principal balance plus accrued interest as of the date the notice of exchange is
received by Borrower) is being exchanged; (b) whether the Note is being tendered
in exchange for BioTime Exchange Shares or ESI Exchange Shares; and (c) if the
Note is being tendered in part for BioTime Exchange Shares and in part for ESI
Exchange Shares, the portion of the Note being exchanged for each.  Lender shall
also provide such signature guarantees and other information, documents and
instruments as any transfer agent or registrar of the BioTime Exchange Shares or
ESI Exchange Shares may required for the issuance or transfer of such shares.

17.5         A tender of a Note in exchange for BioTime Exchange Shares or ESI
Exchange Shares may not be revoked by the Lender.

 
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17.6         Provided, that Borrower then controls ESI, Borrower shall cause ESI
to enter into a Registration Rights Agreement, in the form attached as Exhibit
B, with a Lender at the time the Lender acquires ESI Exchange Shares from
Borrower.

18.           Registration Rights.

18.1         Borrower agrees, at its expense, upon written request from the
Lenders, to use commercially reasonable efforts to register under the Act, the
Shares and BioTime Exchange Shares and to take such other actions as may be
necessary to allow the Shares and BioTime Exchange 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 and BioTime
Exchange Shares intended to be sold, the plan of distribution and the identity
of the sellers, which may include the Lender 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).  Borrower shall not be obligated to file
more than two such registration statements, other than registration statements
on Form S-3.  Borrower 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).  Borrower shall utilize Form S-3 if it qualifies for such
use.  Borrower 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 and BioTime Exchange 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 and BioTime Exchange Shares covered by the
registration statement.  Borrower 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 Act and such other related documents as
the Selling Securities Holders may reasonably request in order to effect the
sale of the Shares and BioTime Exchange Shares.  To effect any offering pursuant
to a registration statement under this Section, Borrower 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 Lender
and reasonably acceptable to Borrower, containing such customary representations
and warranties, and indemnification and contribution provisions  Borrower shall
have no obligation to make any cash settlement or payment to the Lenders or any
holder of Shares and BioTime Exchange Shares, or to issue any additional Shares
or BioTime Exchange Shares, in the event that Borrower is unable to effect or
maintain in effect the registration of the Shares or BioTime Exchange Shares
under the Act or any state securities law despite Borrower’s commercially
reasonable efforts so to do.

18.2         If, at any time, Borrower proposes to register any of its
securities under the Act (otherwise than pursuant to Section 18.1 above or on a
Form S-8 if such form cannot be used for registration of the Shares and BioTime
Exchange Shares pursuant to its terms), Borrower shall, as promptly as
practicable, give written notice to the Lender.  Borrower shall include in such
registration statement the Shares and BioTime Exchange Shares proposed to be
sold by the Selling Securities Holders.  Notwithstanding the foregoing, if the
offering of Borrower’s securities is to be made through underwriters, Borrower
shall not be required to include the Shares and BioTime Exchange 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.

 
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18.3         Borrower 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 Borrower,
listing fees and expenses, and fees and expenses of Borrower’s counsel,
independent accountants and other persons retained or employed by
Borrower.  Selling Securities Holders shall pay any underwriters discounts
applicable to the Shares and BioTime Exchange Shares.

19.           Legends.  The Shares, the BioTime Exchange Shares, and the ESI
Exchange Shares issued pursuant to this Agreement shall bear an appropriate
legend, conspicuously disclosing the restrictions on transfer under the Act
until the same are registered for sale under the Act.  Borrower agrees that upon
the sale of the Shares and BioTime Exchange 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.  Borrower
further agrees to remove the legend at such time as registration under the Act
shall no longer be required.

20.           Investment Representations.  Each Lender represents and warrants
to Borrower that:

20.1         Lender is relying on the information provided in the Disclosure
Documents or otherwise communicated to Lender in writing by Borrower.  Lender
has not relied on any statement or representations inconsistent with those
contained in the Disclosure Documents.  Lender has had a reasonable opportunity
to ask questions of and receive answers from the executive officers and
directors of Borrower, or one or more of its officers, concerning Borrower and
to obtain additional information, to the extent possessed or obtainable without
unreasonable effort or expense, necessary to verify the information in the
Disclosure Documents.  All such questions have been answered to Lender’s
satisfaction;

20.2         Lender understands that the Shares, BioTime Exchange Shares, and
ESI Exchange Shares are being offered and sold without registration under the
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.  Lender
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 Lender hereby makes with the
intent that they may be relied upon by Borrower and its officers and directors,
and by ESI and its officers and directors, in determining Lender’s suitability
to acquire the Shares, BioTime Exchange Shares and ESI Exchange Shares.  Lender
understands and acknowledges that no federal, state or other agency has reviewed
or endorsed the offering of the Shares, BioTime Exchange Shares, or ESI Exchange
Shares, or made any finding or determination as to the fairness of the offering
or completeness of the information in the Disclosure Documents;

 
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20.3         Lender understands that the Shares, BioTime Exchange Shares, and
ESI Exchange Shares may not be offered, sold, or transferred in any manner
unless subsequently registered under the Act, or unless there is an exemption
from such registration available for such offer, sale or transfer;

20.4         Lender has such knowledge and experience in financial and business
matters to enable Lender to utilize the information contained in the Disclosure
Documents, or otherwise made available to Lender to evaluate the merits and
risks of an investment in the Shares, BioTime Exchange Shares, and ESI Exchange
Shares, and to make an informed investment decision with respect thereto.

20.5         Lender is acquiring the Shares, and if Lender exchanges a Note in
whole or in part of BioTime Exchange Shares or ESI Exchanges Shares Lender will
be acquiring those shares, solely for Lender’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, BioTime Exchange Shares, or ESI Exchange Shares; and

20.6         Lender is an “accredited investor,” as such term is defined in
Regulation D promulgated under the Act.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

BORROWER:

BIOTIME, INC.

By
               
Title
               
By
               
Title
   

 
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LENDERS:
                         
Alfred D.  Kingsley
                 
GREENWAY PARTNERS, L.P.
 
By:
Greenhouse Partners, L.P.,
   
General Partner
                   
By
       
Alfred D. Kingsley, General Partner
                       
George Karfunkel
                       
Richard Lowish
                 
Broadwood Partners, L.P.
         
By:
Broadwood Capital, Inc.,
   
General Partner of Broadwood Partners, L.P.
                   
By:
       
Neal C. Bradsher, President
                 
The Life Extension Foundation
                 
By:
       
Saul Kent
         
Title
     

 
 
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Goren Brothers, LP
                   
By:
             
Title:
General Partner
                             
Milton Dresner
                             
Joseph Nemeth
   

 
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SCHEDULE I

Name and Address Of Lender
  Amount of Loan Commitment        
Alfred D. Kingsley
   
$250,000
150 East 57th Street, Suite 24E
     
New York, NY 10022
     
FAX:  (212) 207-3901
             
Greenway Partners, LP
   
$300,000
c/o Alfred D. Kingsley
     
150 East 57th Street, Suite 24E
     
New York, NY 10022
     
FAX:  (212) 207-3901
             
George Karfunkel
   
$250,000
59 Maiden Lane
     
New York, NY 10038
     
FAX (718) 921-8340
             
Richard Lowish
   
$250,000
85 Elm Grove Road
     
Barnes SW13 OBX, London
     
England
     
FAX  011-44-207-929-3994
             
Broadwood Partners, L.P.
   
$550,000
724 Fifth Avenue
     
9th Floor
     
New York, NY 10019
     
FAX:  (212) 508-5756
             
The Life Extension Foundation
   
$100,000
1100 West Commercial Blvd.
     
Ft. Lauderdale, FL 33309
     
FAX:  (954) 202-7745
             
Goren Brothers, LP
   
$200,000
150 E. 52nd Street, 29th Fl.
     
New York, NY 10022
     
FAX: (212) 759-0572
     

 
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Milton Dresner
   
$  50,000
c/o The Lewis Companies
     
28777 Northwestern Highway, Suite 100
     
Southfield, MI 48034
     
FAX (248) 356-4611
             
Joseph Nemeth
   
$100,000
29829 Telegraph Road, Suite 111
     
Southfield, MI 48034
     
FAX: (248) 357-1626
     

 
 
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EXHIBIT A-1

 

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REVOLVING CREDIT NOTE

$___________
 
__________, 2008

FOR VALUE RECEIVED, the undersigned, BioTime, Inc., a California corporation
(Borrower") hereby promises to pay to the order of ___________("Lender") the
principal sum of _____________ DOLLARS ($_______________) or such lesser amount
as may from time to time be outstanding as the Loan pursuant to that certain
Third Amended and Restated Revolving Line of Credit Agreement, dated March 31,
2008, between Borrower and Lender (the "Credit Agreement"), together with
interest on the unpaid balance of the Loan at the rate or rates hereinafter set
forth.  This Revolving Credit Note is one of the Notes described in the Credit
Agreement.  All capitalized terms not otherwise defined in this Note shall have
the meanings defined in the Credit Agreement.

1.             Terms of Payment.

(a)           Interest Rate.  Interest shall accrue and be payable at the rate
of 12% per annum on the outstanding principal balance of the Loan.  Interest
shall accrue from the date of each disbursement of principal pursuant to a
Draw.  Accrued interest shall be paid with principal. 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.

(b)           Payments of Principal.  The outstanding principal balance of the
Loan, together with accrued interest, shall be paid in full on the Maturity
Date.

(c)           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.

(d)           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 paragraph (c) of this
Section 1.
 
(e)           Default Interest Rate.  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.

 
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(f)            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.

(g)           Application of Payments.  All payments shall be applied first to
costs of collection, next to late charges or other sums owing Lender, next to
accrued interest, and then to principal, or in such other order or proportion as
Lender, in its sole discretion, may determine.

(h)           Currency.  All payments shall be made in United States Dollars.

2.             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 Note or the Credit Agreement or any other Note arising under the
Credit Agreement; (b) the failure of Borrower to perform or observe any other
term or provision of this Note, or any other Note arising under the Credit
Agreement, or any term, provision, covenant, or agreement in the Credit
Agreement or any other Loan Document; (c) any act, omission, or other event that
constitutes an "Event of Default" under the Credit Agreement; (d) any
representation or warranty of Borrower contained in the Credit Agreement or in
any other Loan Document, or in any certificate delivered by Borrower pursuant to
the 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 (as defined below);
(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 of 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. As used in this Note, the term
"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.

 
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3.            Remedies 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 under this Note shall become immediately due and payable without
presentment, demand, notice of non-payment, protest, or notice of
non-payment.  Lender also shall have all other rights, powers, and remedies
available under the Credit Agreement and any other Loan Document, or accorded by
law or at equity.  All rights, powers, and remedies of Lender may be exercised
at any time by Lender and from time to time after the occurrence of an Event of
Default.  All rights, powers, and remedies of Lender in connection with this
Note and any other Loan Document are cumulative and not exclusive and shall be
in addition to any other rights, powers, or remedies provided by law or equity.

4.            Miscellaneous.

(a)           Borrower and all guarantors and endorsers of this Note severally
waive (i) presentment, demand, protest, notice of dishonor, and all other
notices; (ii) any release or discharge arising from any extension of time,
discharge of a prior party, release of any or all of the security for this Note,
and (iii) any other cause of release or discharge other than actual payment in
full of all indebtedness evidenced by or arising under this Note.

(b)           No delay or omission of Lender to exercise any right, whether
before or after an Event of Default, shall impair any such right or shall be
construed to be a waiver of any right or default, and the acceptance of any
past-due amount at any time by the Lender shall not be deemed to be a waiver of
the right to require prompt payment when due of any other amounts then or
thereafter due and payable.  The Lender shall not be deemed, by any act or
omission, to have waived any of Lender's rights or remedies under this Note
unless such waiver is in writing and signed by Lender and then only to the
extent specifically set forth in such writing.  A waiver with reference to one
event shall not be construed as continuing or as a bar to or waiver of any right
or remedy as to a subsequent event.

(c)           Lender may accept, indorse, present for payment, and negotiate
checks marked "payment in full" or with words of similar effect without waiving
Lender's right to collect from Borrower the full amount owed by Borrower.

 
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(d)           Time is of the essence under this Note.  Upon any Event of
Default, the Lender may exercise all rights and remedies provided for in this
Note and by law, including, but not limited to, the right to immediate payment
in full of this Note.

(e)           The rights and remedies of the Lender as provided in this Note, in
the Credit Agreement, and in the Security Agreement and in law or equity, shall
be cumulative and concurrent, and may be pursued singularly, successively, or
together at the sole discretion of the Lender, and may be exercised as often as
occasion therefor shall occur; and the failure to exercise any such right or
remedy shall in no event be construed as a waiver or a release of any such right
or remedy.

(f)            It is expressly agreed that if this Note is referred to an
attorney or if suit is brought to collect this Note or any amount due under this
Note, or to enforce or protect any rights conferred upon Lender by this Note
then Borrower promises and agrees to pay on demand all costs, including without
limitation, reasonable attorneys' fees, incurred by Lender in the enforcement of
Lender's rights and remedies under this Note, and such other agreements.

(g)           The terms, covenants, and conditions contained in this Note shall
be binding upon the heirs, executors, administrators, successors, and assigns of
Borrower, and each of them, and shall inure to the benefit of the heirs,
executors, administrators, successors and assigns of Lender.

(h)           This Note shall be construed under and governed by the laws of the
State of California without regard to conflicts of law.

(i)            No provision of this Note shall be construed or so operate as to
require the Borrower to pay interest at a greater rate than the maximum allowed
by applicable state or federal law.  Should any interest or other charges paid
or payable by the Borrower in connection with this Note or the Loan result in
the computation or earning of interest in excess of the maximum allowed by
applicable state or federal law, then any and all such excess shall be and the
same is hereby waived by Lender, and any and all such excess paid shall be
credited automatically against and in reduction of the outstanding principal
balance due of the Loan, and the portion of said excess which exceeds such
principal balance shall be paid by Lender to the Borrower.

BORROWER:
 
BIOTIME, INC.
           
 
 
By
     
Title
               
By
     
Title
   

 
 
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EXHIBIT B

 

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REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement ("Agreement") is entered into as of _______,
200__ by and between Embryome Sciences, Inc., a California corporation ("ESI"),
and ________________ (“Shareholder”).

WHEREAS, concurrently herewith, Shareholder is acquiring shares of ESI common
stock from ESI”s parent corporation BioTime, Inc. in exchange for a promissory
note issued by BioTime, Inc. pursuant to a Third Amended Credit Agreement (the
“Credit Agreement”);

WHEREAS, BioTime may issue and sell additional shares of ESI common stock to
other lenders pursuant to the Credit Agreement;

WHEREAS, ESI agrees to grant the Shareholder and other persons who acquire ESI
common stock from BioTime pursuant to the Credit Agreement certain registration
rights;

NOW, THEREFORE, the parties agree as follows:

1.             Registration Rights.

1.1           Certain Definitions.  As used in this Agreement, the following
terms shall have the following respective meanings:

(a)           "Act" shall mean the Securities Act of 1933, as amended, or any
similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time

(b)           "Commission" shall mean the United States Securities and Exchange
Commission.

(c)           "Common Stock" shall mean shares now or hereafter authorized of
any class of common stock of ESI and any other shares of ESI, howsoever
designated, which have the right (subject always to prior rights of any class or
series of preferred stock) to participate in the distribution of the assets and
earnings of ESI without limit as to per share amount.

(d)           "Holders" shall mean the holders (and their transferees as
permitted by Section 4) of Registrable Securities who have registration rights
under this Agreement.

(e)           "Initiating Holders" shall mean any Holders who individually or in
the aggregate are holders of not less than twenty percent (20%) of the aggregate
of all Registrable Securities then outstanding.

 
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(f)            The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Act, and the declaration or ordering of the effectiveness of
such registration statement.

(g)           "Registrable Securities" means the Common Stock acquired by
Holders or their predecessors in interest from BioTime, Inc. in exchange for a
promissory note pursuant to the Credit Agreement, but excluding, in all cases,
any such Common Stock sold by a Holder (x) in a transaction in which his, her or
its rights under this Agreement are not assigned, (y) pursuant to a registration
statement under the Act that has been declared effective, or (z) in a
transaction pursuant to Rule 144 (or any similar provision then in force) under
the Act.

2.             Registration Rights.

2.1           Demand Rights.  ESI agrees, at its expense, upon written request
from Initiating Holders, to use commercially reasonable efforts to register the
Registrable Securities under the Act, and to take such other actions as may be
necessary to allow the Registrable Securities to be freely tradable, without
restrictions, in compliance with all federal and state regulatory
requirements.  Initiating Holders may exercise their rights under this Section
2.1 only after ESI has completed at least one pubic offering of its Common Stock
registered under the Act and is required to file periodic reports with the
Commission under Section 12 or 15(d) of the Securities Exchange Act of 1934, as
amended.  ESI shall have no obligation to make any cash settlement or payment to
the Initiating Holders or any other Holders, or to issue any additional Common
Stock, in the event that ESI is unable to effect or maintain in effect the
registration of the Registrable Securities under the Act or any state securities
law despite ESI’s commercially reasonable efforts so to do.

(a)           A written request for registration shall specify the quantity of
the Registrable Securities intended to be sold, the plan of distribution and the
identity of the seller(s) (collectively, ASelling Shareholders@), and whether
the registration shall be pursuant to an underwritten public offering or a
Ashelf= registration pursuant to Rule 415 (or similar rule that may be adopted
by the Commission).

(b)           ESI shall not be obligated to file more than two registration
statements under this Section 2.1, other than registration statements on Form
S-3.

(c)           ESI shall use commercially reasonable efforts keep all
registration statements effective for a period of twelve 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).  ESI shall utilize Form S-3 if it qualifies for such use.  ESI 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 Registrable Securities 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 the distribution of the Registrable
Securities covered by the registration statement.

 
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(d)           ESI will furnish to the Selling Shareholders 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
Shareholders may reasonably request in order to effect the sale of the
Registrable Securities.

(e)           To effect any offering pursuant to a registration statement under
this Section 2.1, ESI shall enter into an agreement containing customary
representations and warranties, and indemnification and contribution provisions,
all for the benefit of Selling Shareholders, and, in the case of an underwritten
public offering, an underwriting agreement with an investment banking firm
selected by the Selling Shareholders and reasonably acceptable to ESI,
containing such customary representations and warranties, and indemnification
and contribution provisions.

2.2           “Piggy-Back” Rights’  If, at any time, ESI proposes to register
any of its securities under the Act for its own account or for the account any
other security holder (otherwise than pursuant to Section 2.1 above or on a Form
S-8 if such form cannot be used for registration of the Registrable Securities
pursuant to its terms), ESI shall, as promptly as practicable, give written
notice to all Holders.  ESI shall include in such registration statement the
Registrable Securities proposed to be sold by the Selling Shareholders.

(a)           If the registration of which ESI gives notice is for a registered
public offering involving an underwriting, ESI shall so advise all holders of
Registrable Securities as a part of the written notice given pursuant to this
Section and in such event the right of any Selling Shareholder to registration
pursuant to this Section shall be conditioned upon such Selling Shareholder's
participation in such underwriting and the inclusion of such Selling
Shareholder's Registrable Securities in the underwriting to the extent provided
herein.  All Selling Shareholders proposing to distribute their securities
through such underwriting shall (together with ESI and the other security
holders distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for underwriting by ESI.

(b)           Notwithstanding the foregoing, if the offering of ESI’s securities
is to be made through underwriters, ESI shall not be required to include the
Registrable Securities if and to the extent that the managing underwriter
reasonably believes in good faith that such inclusion would materially adversely
affect such offering.

(c)           Notwithstanding any other provision of this Section 2.2, if the
managing underwriter determines that marketing factors require a limitation of
the number of shares to be underwritten, the managing underwriter may (subject
to the allocation priority set forth below) exclude some or all Registrable
Securities from such registration and underwriting.  ESI shall so advise all
Selling Shareholders and the other holders of securities distributing their
securities through such underwriting, and the number of shares of Registrable
Securities and other securities that may be included in the registration and
underwriting shall be allocated in the following manner.  ESI may exclude shares
of all holders of registration rights without any exclusion of shares offered by
ESI.  In the event of any exclusion of shares held by holders of registration
rights, the number of shares that may be included in the registration and
underwriting shall be allocated among all Selling Shareholders and other
security holders having registration rights in proportion, as nearly as
practicable, to the respective amounts of securities which would otherwise be
entitled to inclusion in such registration at the time of filing the
registration statement.  If any Selling Shareholder disapproves of the terms of
any such underwriting, such Selling Shareholder may elect to withdraw therefrom
by written notice to ESI and the underwriter.  Any Registrable Securities or
other securities excluded or withdrawn from such underwriting shall be withdrawn
from such registration.

 
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(d)           ESI will furnish to the Selling Shareholders 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
Shareholders may reasonably request in order to effect the sale of the
Registrable Securities.

3.             Expenses. ESI 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 ESI, listing
fees and expenses, and fees and expenses of ESI=s counsel, independent
accountants and other persons retained or employed by ESI.  Selling Shareholders
shall pay any underwriters discounts and commissions applicable to the
Registrable Securities sold.

4.             Transfer of Registration Rights.  The rights to require ESI to
register securities under this Agreement may be assigned:  (a) to an "affiliate"
(defined as an entity that controls, is controlled by, or under common control
with the transferor); (b) to any trust of which the transferor is a settlor and
the beneficiaries of which are the transferor or any parent, child, grandchild
or spouse of the transferor; or (c) to any other transferee or assignee (other
than a transferee or assignee who acquires the securities in a transaction
registered under the Act or in a transaction under Rule 144) if the transfer (1)
involves 100% of the transferor's Registrable Securities, or (2) involves at
least 50,000 shares of Registrable Securities, or (3) to constituent members,
partners, or shareholders of the transferor who agree to act through a single
representative; provided, that ESI shall be under no obligation to provide any
such transferee with any notice required to be given to Holders unless and until
the transferor or transferee has given ESI written notice of such transfer and
the name and address of the transferee or assignee, and identifies the
securities with respect to which such registration rights are being
assigned.  Nothing in this Section shall be construed in any way to limit any
restriction or condition on transfer of any Registrable Securities imposed by
any other agreement between a Holder and ESI, the Act, any rule or regulation
promulgated under the Act or any state securities or blue sky law or any rule or
regulation thereunder.

5.             Information.  Each Selling Shareholder shall furnish to ESI, upon
request by ESI, such information regarding such Selling Shareholder and the
distribution proposed by such Selling Shareholder as shall be required to be
included in any registration statement, prospectus, offering circular or other
document in connection with any registration, qualification or compliance
referred to in this  Agreement.

 
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6.             Termination and Application of Agreement.  The registration
obligations of ESI shall expire three years after an underwritten public
offering pursuant to an effective registration statement under the Act, at an
aggregate public offering price of at least $5,000,000 in gross proceeds and a
per share price of at least $5.00.  No holder of registration rights shall be
entitled to exercise such rights at any time that their Registrable Securities
may be sold under Rule 144 and the number of shares of Registrable Securities
they hold is less than or equal to the maximum number of such shares that may be
sold under paragraph (e) of Rule 144 or any applicable volume limitation of any
successor rule or regulation promulgated by the Commission.

7.             Miscellaneous.

7.1           Governing Law.  This Agreement shall be governed in all respects
by the laws of California.

7.2           Successors and Assigns.  Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.

7.3           Entire Agreement; Amendment.  This Agreement constitutes the full
and entire understanding and agreement between the parties with regard to the
subject matter hereof.  Neither this Agreement nor any term hereof may be
amended, waived, discharged or terminated orally, but only by a written
instrument signed by ESI and Holders of two-thirds of the Registrable Securities
which have not been resold to the public.

7.4           Notices, etc.  All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first-class mail,
postage prepaid, or otherwise delivered by hand, by messenger or overnight air
freight services, addressed (a) if to a Holder at such address as such Holder
shall have furnished to ESI in writing, or (b) if to ESI, at 6121 Hollis Street,
Emeryville, California 94608, or at such other address as ESI shall have
furnished to the Holders in writing.

7.5           Severability.  In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

7.6           Titles and Subtitles.  The titles of the sections and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.

 
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7.7           Counterparts.  This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.  This Agreement may be executed with signatures
transmitted among the parties by facsimile, and no party shall deny the validity
of a signature or this Agreement signed and transmitted by facsimile on the
basis that a signed document is represented by a copy or facsimile and not an
original.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

ESI:

Embryome Sciences, Inc.

By:
     
Michael D. West
   
Chief Executive Officer
             
By:
     
Judith Segall, Secretary
             
SHAREHOLDER:
                   

 
 
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