First Amended and Restated Security Agreement, dated October 17, 2007


    Exhibit
      10.4

    


    FIRST
      AMENDED AND RESTATED SECURITY AGREEMENT

    


    


    This
      First Amended and Restated Security Agreement (the “Agreement”) is made as of
      October 17, 2007 by BioTime, Inc., as the “Debtor,” in favor and for the benefit
      of Alfred D. Kingsley, George Karfunkel, Richard Lowish, Broadwood Partners,
      L.P., individually and collectively, as the “Secured Party,” and amends and
      restates that certain Security Agreement dated April 12, 2006. 

    


    


    PREMISES

    


    A. Debtor
      and Secured Party have entered into that certain First Amended and Restated
      Revolving Line of Credit Agreement of even date (the “Credit Agreement”),
      pursuant to which Debtor may borrow funds from Secured Party;

    


    B. Debtor
      has delivered to certain Secured Parties Amended and Restated Revolving Credit
      Notes, dated April 12, 2006, in the aggregate principal amount of $200,000,
      and
      has delivered to certain Secured Parties Revolving Credit Notes, dated October
      __, 2007, in the aggregate principal amount of $800,000 (collectively, the
      “Notes” and each a “Note”) evidencing Debtor’s obligation to pay funds advanced
      by Secured Party under the Credit Agreement;

    


    C. Debtor
      is
      entering into this Agreement to secure its obligations under the Credit
      Agreement.

    


    AGREEMENT

    


    NOW,
      THEREFORE, in consideration of the premises and for other good and valuable
      consideration, the receipt and adequacy of which is hereby acknowledged, Debtor
      hereby agrees as follows:

    

      1.    Creation
        of Security Interest.
        Debtor
        hereby conveys, assigns, transfers, and grants to Secured Party a first priority
        perfected security interest in all of Debtor’s present and hereafter acquired
        right, title, and interest in and to the Collateral (as defined in Section
        3
        below). Secured Party may record a UCC-1 Financing Statement concerning the
        Collateral.

      


      2.    Secured
        Obligations.
        This
        Agreement and the security interests granted and created under this Agreement
        secure the prompt payment in full in cash and the full performance of each
        and
        all of the following obligations (collectively, the “Secured
        Obligations”):

       

                     
        2.1   each
        and
        every obligation, covenant, and agreement of Debtor contained in, arising
        under,
        in connection with, or evidenced by each of the Notes;

       

                                    
        2.2   the
        obligations, covenants and agreements of Debtor under the Credit Agreement;
        and


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

                                    
        2.3   each
        and
        every obligation, covenant, and agreement of Debtor contained in, arising
        under,
        or in connection with, or evidenced by this Agreement.

       

          3.               
        Collateral. 
        As used in this Agreement, the term Collateral means (a) of Debtor’s right,
        title, and interest in and to all royalties, license fees, and other amounts
        payable by Hospira, Inc. or any successor under that certain Exclusive License
        Agreement, dated April 23, 1997, between Debtor and Abbott Laboratories,
        Inc.
        (as the predecessor in interest to Hospira, Inc.), as modified by a letter
        agreement and as amended by that certain Amendment to BioTime License Agreement,
        dated January 9, 2006 (the “Hospira License”), and (b) all accounts, accounts
        receivable, notes, and instruments evidencing any obligation of payment by
        Hospira, Inc. under the Hospira License ; and (c) all proceeds of the Collateral
        described in clauses (a) and (b) of this Section 3, including but not limited
        to, money, accounts, general intangibles, securities, deposit accounts,
        investment property, documents, chattel paper, instruments, and insurance
        proceeds and interests therein. Debtor represents and warrants to and for
        the
        benefit of Secured Party that Debtor’s title to the Collateral described in
        clause (a) of the preceding sentence is free and clear of all liens, pledges,
        encumbrances, equities, and claims of any kind whatsoever except for the
        security interest created by this Agreement.

       

          4.               
        Further
        Assurances.  Debtor hereby further agrees to procure, execute, and
        deliver on demand and Debtor hereby irrevocably appoints Secured Party as
        Debtor’s attorney in fact to execute, acknowledge, deliver, and, if appropriate,
        file and record such endorsements, assignments, consents, security agreements,
        financing statements, control agreements, or other instruments, documents,
        or
        writings as Secured Party may request or require in order to perfect or continue
        the perfection and the priority of the security interests created or agreed
        to
        be created by this Agreement.

       

          5.               
        Transfers
        and Other Liens.  Without the prior written consent of Secured Party,
        Debtor shall not (a) sell, contract to sell, pledge, encumber, assign,
        hypothecate, alienate, convey, dispose, or otherwise transfer the Collateral,
        or
        any interest therein, whether voluntarily, involuntarily, or by operation
        of
        law, except for sales of inventory in the ordinary course of business, (b)
        consent or agree to any alteration, modification, or amendment to the Hospira
        License that would reduce the royalties payable by Hospira , (c) waive any
        right
        of payment, or grant any grace period or extension of time for the payment,
        of
        any royalties by Hospira under the Hospira License, (d) create or permit
        to
        exist any lien, encumbrance, mortgage, pledge, security interest or charge
        of
        any kind upon or concerning any of the Collateral, except for the security
        interest created by this Agreement, or (e) take any action concerning the
        Collateral that is inconsistent with the provisions and purposes of this
        Agreement. Any sale, contract to sell, pledge, conveyance, hypothecation,
        alienation, encumbrance, disposition, assignment, or other transfer of any
        of
        the Collateral or any alteration, modification, or amendment of any of the
        Collateral in a manner that would delay or reduce royalty payments, or the
        grant
        of any grace period or extension of time for the performance of any obligation
        due for the benefit of Debtor or Secured Party under or concerning any of
        the
        Collateral made, permitted, or suffered without Secured Party’s prior written
        consent shall constitute an Event of Default under this Agreement. 

       

      
        
           

        

        
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          6.               
        Additional
        Covenants of Debtor.  In addition to all other covenants and agreements
        of Debtor set forth in this Agreement, Debtor agrees to (a) give Secured
        Party
        thirty (30) days prior written notice of any change in Debtor’s name, state of
        incorporation or organization, or place of business, or, if Debtor has more
        than
        one place of business, its head office or office in which Debtor’s records
        relating to the Collateral are kept; (b) to appear in and defend any action
        or
        proceeding which may affect Debtor’s title to or Secured Party’s interest in any
        Collateral; and (c) to keep separate, accurate, and complete records of the
        Collateral, and to provide Secured Party with such records and such other
        reports and information relating to Collateral as Secured Party may request
        from
        time to time.

       

          7.               
        Certain
        Notifications and Distributions With Respect To Collateral. Upon the
        occurrence and continuance of an Event of Default, Secured Party shall have
        the
        rights set forth in this Section. Secured Party may at any time, and from
        time
        to time, notify Hospira or any successor account debtor that (a) an account
        or
        instrument constituting Collateral has been assigned to Secured Party, and
        (b)
        all distributions and payments and the performance of all obligations in
        any way
        related to the Collateral are to be made directly to Secured Party. If Debtor
        receives any payments of money, securities, or any tangible or intangible
        property on account of or with respect to any of the Collateral at any time
        during which an Event of Default shall have occurred and be continuing, such
        payments will be received by Debtor in trust for, and immediately paid over
        to
        Secured Party. Any collections received by Secured Party or received by Debtor
        and delivered to Secured Party shall be applied to the Secured Obligations,
        first to the expenses of collection, second to the payment of accrued interest,
        and third to the payment of principal; provided, that any amounts remaining
        after payment in full of all expenses, interest, and principal shall be returned
        to Debtor. Secured Party shall have the right to receive, receipt for, endorse,
        assign, deposit, and deliver, in Secured Party’s name or in the name of Debtor,
        any and all checks, notes, drafts, and other instruments for the payment
        of
        money constituting proceeds of or otherwise relating to the Collateral. Debtor
        hereby authorizes Secured Party to affix, by facsimile signature or otherwise,
        the general or special endorsement of Debtor, in such manner as Secured Party
        shall deem advisable, to any such instrument in the event the same has been
        delivered to Secured Party without appropriate endorsement, and Secured Party
        and any collecting bank are hereby authorized to consider such an endorsement
        as
        being by Debtor to the same extent as though it were manually executed by
        Debtor, regardless of by whom or under what circumstances or by what authority
        such facsimile signature or other endorsement is actually affixed, without
        duty
        of inquiry or responsibility as to such matters, and Debtor hereby waives
        demand, presentment, protest, and notice of protest or dishonor and all other
        notices of every kind and nature with respect to any such instrument.


      


      8.            Rights
        Upon Event of Default.

       

                                    
        8.1          Upon
        the occurrence of an Event of Default under this Agreement, Secured Party
        shall
        have, in addition to all other rights and remedies that Secured Party may
        have
        at law or in equity, under Section 7 of this Agreement, or under any other
        agreement executed by Debtor in favor of Secured Party, all rights and remedies
        of a secured party under the California Commercial Code, which rights and
        remedies of Secured Party shall be cumulative and non-exclusive. In addition,
        upon the occurrence of an Event of Default, Secured Party shall have the
        following rights and remedies, all of which may be exercised with or without
        further notice to Debtor: (i) to directly receive any and all payments and
        distributions of money, securities or any tangible or intangible property
        on or
        in any way related to the Collateral; (ii) to 

       

       

      
        
           

        

        
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      settle,
        compromise, or release, on terms acceptable to Secured Party, in whole or
        in
        part, any amounts owing on the Collateral; (iii) to enforce payment and to
        prosecute any action or proceeding with respect to any and all of the
        Collateral; (iv) to foreclose the liens and security interests created under
        this Agreement or under any other agreement relating to the Collateral by
        any
        available procedure, with or without judicial process; (v) to sell, assign,
        or
        otherwise dispose of the Collateral or any part thereof, either at public
        or
        private sale for cash, on credit, or otherwise, with or without representations
        or warranties, and upon such terms as shall be acceptable to Secured Party;
        all
        at Secured Party’s sole option and as Secured Party in their sole discretion may
        deem advisable. 

       

                8.2         
        Debtor
        shall be given reasonable notice of the time and place of any public sale
        of the
        Collateral, or of the time on or after which any private sale or other intended
        disposition is to be made. If required under applicable law, Secured Party
        may
        be the purchaser at any public sale. Ten days notice of any public or private
        sale or other disposition shall be considered to be reasonable notice.


      


      9.   Disposition
        of Proceeds.  After satisfaction in full of the Secured Obligations,
        the balance of the proceeds of sale then remaining shall be paid first to
        satisfy obligations secured by any other subordinate security interests or
        subordinate liens (including but not limited to attachment liens and execution
        liens) in the Collateral as provided in the California Commercial Code, and
        then
        any remaining balance of the proceeds shall be paid to the Debtor. 

      


      10.       
        Events
        of Default. The occurrence of any of the following shall constitute an Event
        of Default under this Agreement:

       

                10.1   Secured
        Party shall fail or cease to have a first priority perfected security interest
        in the Collateral or any part of the Collateral unless caused by any action
        taken by Secured Party; 

       

                10.2   Debtor
        defaults in the performance of any covenant or agreement contained in this
        Agreement;

       

                10.3   Debtor
        defaults in the payment or performance of any Secured Obligation; 

       

                10.4   An
        Event
        of Default as defined in the Notes has occurred with respect to any of the
        Notes; and

       

                10.5   The
        occurrence of any other event under this Agreement that is specifically
        described elsewhere within this Agreement as an Event of Default.

      


      11.   Amendments. This
        Agreement may not be altered or amended except with the written consent of
        Debtor and the Secured Party. 


      
        
          
          

        

        
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        12.   Binding
        on Successors and Assigns.  This Agreement shall be binding upon and
        inure to the benefit of Debtor and Secured Party and their respective heirs,
        executors, personal representatives, successors and assigns.

       

                   
        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 to the address for notice shown in the Credit Agreement.
        Any
        party may change its address for notice by giving notice to the other party
        in
        the same manner as provided in this section.

      


      14.   Governing
        Law.  This Agreement shall be governed by and construed under the laws
        of the State of California without regard to conflicts of law. Where applicable
        and except as otherwise defined in this Agreement, the terms used in this
        Agreement shall have the meanings given them in the California Commercial
        Code.


      


      15.   Attorneys
        Fees and Costs of Enforcement.  Debtor agrees to pay
        all reasonable attorneys’ fees incurred by Secured Party in connection with
        enforcement of any of Secured Party’s rights and remedies under this Agreement,
        whether or not any proceeding is commenced to enforce or protect such rights
        and
        remedies. All advances, charges, costs, and expenses, including without
        limitation, reasonable attorneys’ fees, incurred or paid by Secured Party in
        exercising any right, power, or remedy conferred by this Agreement, or in
        the
        enforcement thereof, shall be added to and shall become a part of the Secured
        Obligations, payable by Debtor on demand with interest thereon at a rate
        of
        interest equal to the lesser of: (i) the rate provided in the Note for interest
        payable after an Event of Default, or (ii) the maximum rate of interest
        permitted by law. 

      


      16.   Waivers
        by Debtor.  Debtor expressly waives any right to require Secured Party
        to (a) proceed against any person, (b) marshal assets or proceed against
        or
        exhaust Collateral or any part thereof, or (c) pursue any other remedy in
        Secured Party’s power; and Debtor waives any defense arising by reason of any
        disability or other defense of any other person or entity, or by reason of
        the
        cessation from any cause whatsoever of the liability of Debtor or any other
        person or entity. Debtor consents and agrees that Secured Party may, at any
        time
        and from time to time, without notice or demand, and without affecting the
        enforceability or continuing effectiveness of this Agreement: (i) accept
        new or
        additional instruments, documents, or agreements in exchange for or relative
        to
        any or all of the Secured Obligations; (ii) accept partial payments on or
        partial performance of any or all of the Secured Obligations; (iii) receive
        and
        hold additional security or guaranties for any or all of the Secured Obligations
        or any part thereof; (iv) release, reconvey, terminate, waive, abandon,
        fail to perfect, subordinate, exchange, substitute, transfer, and enforce
        any
        security or guaranties; (v) apply any Collateral or other security and direct
        the order or manner of sale thereof as Secured Party may determine;(vi) consent
        to the transfer of any Collateral or other security for any or all of the
        Secured Obligations; and (vii) bid and purchase at any sale of
        Collateral.

      
        
           

        

        
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        17.         Cumulative
        Rights of Secured Party.  The rights, powers, and remedies given to
        Secured Party by this Agreement shall be in addition to all rights, powers,
        and
        remedies given to Secured Party by virtue of any statute, rule of law, or
        any
        other agreement between Debtor and Secured Party. Any forbearance or failure
        or
        delay by Secured Party in exercising any right, power, or remedy under this
        Agreement shall not preclude the further exercise thereof; and every right,
        power, and remedy of Secured Party shall continue in full force and effect
        until
        such right, power, or remedy is specifically waived by an instrument in writing
        signed by Secured Party.

      


      18.       
        Termination. 
        Secured Party’s security interest in the Collateral shall terminate upon the
        satisfaction in full of all Secured Obligations, and at that time Secured
        Party
        shall return to Debtor all Collateral then in Secured Party’s
        possession.

       

                   
        19.         Power
        of Attorney.  Debtor hereby irrevocably appoints Secured Party as
        attorney-in-fact of Debtor, with full power of substitution, to sign any
        document necessary to transfer title to any of the Collateral and to do all
        acts
        necessary or incident to the powers granted under this Agreement to Secured
        Party, as fully as Debtor might, including without limitation, the execution
        and
        recordation of any claim of lien on behalf of and in the name of
        Debtor.

      




    DEBTOR

    


    BIOTIME,
      INC.

    


    


    By:      
      /s/ Michael D.
      West                                         

    Chief
      Executive Officer

    


    


    By:     
      /s/ Judith
      Segall                                                 

    Secretary

     

     

                                                                                                            
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