EXHIBIT 10.1
EXECUTION VERSION
NORTHWEST BIOTHERAPEUTICS, INC.
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "AGREEMENT") is made and entered
into as of January 26, 2005 (the "CLOSING DATE"), by and between NORTHWEST
BIOTHERAPEUTICS, INC., a Delaware corporation (the "COMPANY") and TOUCAN CAPITAL
FUND II, L.P. (the "PURCHASER").
RECITALS
WHEREAS, the Company and the Purchaser are parties to that certain Amended
and Restated Recapitalization Agreement, dated as of July 30, 2004 (as amended
from time to time, the "RECAPITALIZATION AGREEMENT"), pursuant to which, among
other things, the Purchaser has extended certain bridge loans to the Company.
All capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Recapitalization Agreement.
WHEREAS, the Recapitalization Agreement contemplates that an equity
financing of the Company may be made, and that the Purchaser will, at its
election, serve as the lead investor in such equity financing.
WHEREAS, the Purchaser has indicated a willingness to make an equity
investment in the Company, subject to the terms and conditions of this
Agreement, and this Agreement is intended to serve as a definitive agreement as
part of the "Anticipated Equity Financing" (as such term is defined in the
Recapitalization Agreement) and that the parties hereto agree that this
Agreement is a "Related Recapitalization Document."
WHEREAS, the Company has authorized the sale and issuance of an aggregate
of fifty million (50,000,000) shares of its Series A Cumulative Convertible
Preferred Stock (the "PREFERRED STOCK").
WHEREAS, it is intended that the Purchaser will purchase thirty-two
million five hundred thousand (32,500,000) shares (the "SHARES") of Preferred
Stock at a purchase price of $0.04 per Share (for an aggregate purchase price of
$1,300,000) at the Closing, and that the Purchaser and/or one or more other
investors approved by the Purchaser will have the opportunity to participate in
future closings ("FUTURE CLOSINGS") during a period of time following the
Closing Date in accordance with the term of the Preferred Stock Term Sheet.
WHEREAS, it is contemplated that Future Closings, if any, may be effected
pursuant to a different form of securities purchase agreement from this
Agreement.
WHEREAS, it is contemplated that the parties hereto (and other investors
participating in Future Closings, if any) shall enter into an Investors' Rights
Agreement and Voting Agreement, if applicable, at a mutually agreed upon time in
the future.
WHEREAS, as contemplated by the Recapitalization Agreement, the Purchaser
will also be issued a warrant by the Company to purchase shares of Preferred
Stock (the "WARRANT").
EXECUTION VERSION
WHEREAS, the Purchaser desires to purchase the Shares and the Warrant on
the terms and conditions set forth herein.
WHEREAS, the Company desires to issue and sell the Shares and the Warrant
to the Purchaser on the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises, representations, warranties, and covenants hereinafter set forth and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. AGREEMENT TO SELL AND PURCHASE.
1.1 AUTHORIZATION OF SHARES AND WARRANT. The Company has
authorized (a) the sale and issuance to the Purchaser of the Shares and the
Warrant, (b) the issuance of the shares of Preferred Stock to be issued upon
exercise of the Warrant (the "WARRANT SHARES"), and (c) the issuance of such
shares of Common Stock to be issued upon conversion of the Shares and the
Warrant Shares (the "CONVERSION SHARES"). The Shares and the Warrant Shares have
the rights, preferences, privileges and restrictions set forth in the
Certificate of Designations, Preferences and Rights, in the form attached hereto
as EXHIBIT B (the "CERTIFICATE OF DESIGNATIONS"). The Warrant will be in the
form attached hereto as EXHIBIT C.
1.2 SALE AND PURCHASE. Subject to the terms and conditions hereof,
at the Closing (as hereinafter defined) the Company hereby agrees to issue and
sell to the Purchaser, and the Purchaser agrees to purchase from the Company an
aggregate of 32,500,000 Shares, at a purchase price of $0.04 per Share, and the
Warrant to purchase 13,000,000 Warrant Shares.
2. CLOSING, DELIVERY AND PAYMENT.
2.1 CLOSING. The closing of the sale and purchase of the Shares
and the Warrant under this Agreement (the "CLOSING") shall take place at 10:00
a.m. on the date hereof, at the offices of Cooley Godward LLP, 11951 Freedom
Drive, Reston, VA 20190, or at such other time or place as the Company and the
Purchaser may mutually agree.
2.2 DELIVERY. At the Closing, subject to the terms and conditions
hereof, the Company will deliver to the Purchaser (a) a stock certificate
representing 32,500,000 Shares, against payment of the purchase price therefor
in cash as set forth on EXHIBIT A hereto, (b) a warrant certificate, in the form
attached hereto as EXHIBIT C, exercisable for 13,000,000 Warrant Shares.
2.3 USE OF PROCEEDS. The proceeds from the sale of the Shares to
the Purchaser shall be used by the Company for its growth, modernization and/or
expansion and/or for general corporate purposes as permitted by applicable Small
Business Administration rules and regulations.
3. CONDITIONS TO CLOSING.
EXECUTION VERSION
3.1 INCORPORATION OF CLOSING CONDITIONS. The Company and the
Purchaser acknowledge that the Closing constitutes the "first closing of the
Convertible Preferred Stock" for purposes of the Recapitalization Agreement and
all Related Recapitalization Documents. Accordingly all closing conditions set
forth in the Recapitalization Agreement, including without limitation, those
conditions set forth in Sections 2.4 and 4.9 thereof, are applicable to the
Closing and incorporated by reference herein.
3.2 ADDITIONAL CLOSING CONDITIONS. Notwithstanding anything to the
contrary, and unless expressly waived in writing in advance by the Purchaser
(any such waiver by the Purchaser shall be applicable only as to the Closing and
shall not be deemed a waiver of such condition as to future closings, if any),
and only to the extent expressly waived, the Closing shall be conditional upon
and subject to the satisfaction or waiver of each of the following conditions
precedent, with each such satisfaction or waiver to be determined by the
Purchaser in its sole discretion, on or before the Closing. The Purchaser shall
make all such determinations in its sole discretion. These conditions are in
addition to the conditions set forth in the Recapitalization Agreement. The
conditions precedent to the Closing contemplated hereby shall include the
following, unless waived by the Purchaser in its sole discretion:
(a) The Company shall have in all material respects
performed, and be in compliance with, all obligations, agreements, covenants,
closing conditions and other provisions contained in the Recapitalization
Agreement, the notes evidencing Bridge Funding, and the other Related
Recapitalization Documents, to the extent applicable, including, without
limitation, the financing documents associated with the issuance of the
Preferred Stock, required to be performed or fulfilled on or before the Closing
Date.
(b) All representations and warranties set forth in the
Recapitalization Agreement, the notes evidencing Bridge Funding, and the other
Related Recapitalization Documents shall be true and complete as of the Closing.
(c) There shall have been no change that has had or is
reasonably likely to have a material adverse effect on the business, affairs,
prospects, operations, properties, assets, liabilities, structure or condition,
financial or otherwise, of the Company (as such business is presently conducted
and/or as it is proposed to be conducted) since July 30, 2004 except as
disclosed by the Company in writing to Purchaser prior to the Closing.
(d) All corporate and other proceedings, and all documents
relating to the issuance and sale of the Shares, the Warrant Shares and the
Conversion Shares pursuant hereto and pursuant to the Recapitalization Agreement
shall be satisfactory in substance and form to the Purchaser. The Purchaser's
counsel shall have received all such counterpart originals or certified or other
copies of such documents as they may have requested including, without
limitation:
(i) the resolutions of the Board of Directors of the
Company, authorizing and approving all matters in connection with the sale of
the Preferred Stock certified by the Secretary of the Company as of the Closing
Date; and
EXECUTION VERSION
(ii) all stockholder consents, votes or other approval
required by applicable state or federal law (including any and all SEC rules and
regulations) and any consents required by applicable securities exchanges or
markets or corporate partners required to authorize and approve all matters in
connection with the sale of Series A Stock as contemplated by the Amended and
Restated Binding Convertible Preferred Stock Term Sheet by and between the
Company and the Purchaser, dated as of October 22 and as amended from time to
time.
(e) The Company shall have executed, delivered and
maintained in force (i) a Convertible Preferred Stock purchase agreement, (ii)
an Investors' Rights Agreement, (iii) an amended and restated certificate of
incorporation (or if appropriate, a certificate of designation), (iv) a voting
agreement, if applicable, and (v) such other documents as may be necessary or
desirable in the determination of the Purchaser.
(f) The Purchaser shall have received from counsel to the
Company an opinion letter containing opinions customary for transactions similar
to the transactions contemplated hereby in the form reasonably acceptable to the
Purchaser (including, but not limited to, an opinion that the issuance of the
Shares, the Warrant, the Warrant Share and the Conversion Shares are exempt from
the registration provisions of the federal and state securities laws).
(g) The Company shall have delivered a certificate of its
Chief Executive Officer, or other authorized and responsible officer of the
Company acceptable to the Purchaser, in its sole discretion, certifying that all
closing conditions in this Agreement have been fulfilled and that all
representations and warranties are applicable and true as of the date of the
Closing.
(h) The Company shall have provided prior to the Closing
Date all due diligence information requested by the Purchaser, and/or necessary
to enable the Purchaser to complete a thorough due diligence review and obtain a
complete and accurate understanding of the business, operations, prospects,
assets, liabilities, structure, legal aspects and condition, financial or
otherwise, of the Company.
(i) Within the six month period prior to the Closing, the
Company shall not have entered into, increased, expanded, extended, renewed or
reinstated (or agreed, promised, committed or undertaken to do so), any
severance, separation, retention, change of control or similar agreement with
any employee, other than such agreements entered into with the prior written
approval of the Purchaser.
(j) Within the six month period prior to the Closing, the
Company shall not have hired, or agreed to hire, any employee or engaged, or
agreed to engage, any consultant, independent contractor or any other
non-employee personnel, except in accordance with the Company's budget that has
been approved by the Company's board of directors and the Purchaser.
(k) Within the six month period prior to the Closing, the
Company shall not have purchased, leased, hired, rented or otherwise acquired
directly or indirectly any rights in or to any asset or facility in an amount in
excess of $10,000, or agreed, promised or
EXECUTION VERSION
committed to do so, except in accordance with the Company's budget that has been
approved by the Company's board of directors and the Purchaser.
(l) All Intellectual Property licenses, agreements, patent
applications and filings shall be current and in good standing.
(m) The Company shall have obtained the approval of the
required number of its stockholders of the Proposed Equity Financing.
(n) Subject to the accuracy of the representations and
warranties of the Purchaser set forth in Section 4, on the applicable Closing
Date, the sale and issuance of the Shares and the Warrant and the proposed
issuance of the Warrant Shares and the Conversion Shares shall be legally
permitted by Delaware law and federal and state securities laws, except that the
Company shall have up to fifteen (15) days from the Closing Date to file notices
of the sale of the Shares and warrant pursuant to Regulation D promulgated under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), and applicable
state securities laws.
(o) The Certificate of Designations shall have been filed
with the Secretary of State of the State of Delaware and shall continue to be in
full force and effect as of the Closing Date.
(p) The Warrant Shares issuable upon exercise of the
Warrant, and the Conversion Shares issuable upon conversion of the Shares and
the Warrant Shares, shall have been duly authorized and reserved for issuance
upon such conversion.
(q) The Warrant in the form attached hereto as EXHIBIT C
shall have been executed and delivered by the Company in favor of the Purchaser.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser
hereby represents and warrants to the Company that:
4.1 AUTHORIZATION. The Purchaser has full power and authority to
enter into this Agreement and this Agreement constitutes a valid and legally
binding obligation of the Purchaser, enforceable in accordance with its terms
except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws of general application affecting enforcement of
creditors' rights generally, and (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies.
4.2 PURCHASE ENTIRELY FOR OWN ACCOUNT. The Shares to be received
by the Purchaser and the Conversion Shares (collectively, the "SECURITIES") will
be acquired for investment for the Purchaser's own account, not as a nominee or
agent, and not with a view to the resale or distribution of any part thereof,
and the Purchaser has no present intention of selling, granting any
participation in or otherwise distributing the same except in compliance with
applicable federal and state securities laws. The Purchaser further represents
that the Purchaser does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participations to such
person or to any third person, with respect to any of
EXECUTION VERSION
the Securities other than with respect to potential future distributions of the
Securities to its partners in compliance with applicable federal and state
securities laws.
4.3 DISCLOSURE OF INFORMATION. The Purchaser has conducted its own
due diligence review of the Company and received copies or originals of all
documents it has requested from the Company. Notwithstanding the foregoing, this
representation shall not in any way be deemed to prohibit, limit, restrict or
otherwise impact the Purchaser's rights to indemnification, and/or to any other
rights or remedies available at law or equity, from the Company and its
affiliates in the event of a breach by the Company of any representation,
warranty, covenant or other term hereof or of any Related Recapitalization
Document.
4.4 INVESTMENT EXPERIENCE. The Purchaser is an investor in
securities of companies in the development stage and acknowledges that it is
able to fend for itself, can bear the economic risk of its investment, including
a total loss, and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in the Securities. The Purchaser also represents that it has not been organized
for the purpose of acquiring the Securities.
4.5 ACCREDITED INVESTOR. The Purchaser is an "ACCREDITED INVESTOR"
within the meaning of Rule 501 of Regulation D promulgated under the Securities
Act.
4.6 RESTRICTED SECURITIES. The Purchaser understands that the
issuance of the Securities has not been, and will not be, registered under the
Securities Act, by reason of a specific exemption from the registration
provisions of the Securities Act which depends upon, among other things, the
bona fide nature of the investment intent and the accuracy of the Purchaser's
representations as expressed herein. The Purchaser understands that the
Securities are characterized as "RESTRICTED SECURITIES" under applicable U.S.
federal and state securities laws and that, pursuant to these laws, Purchaser
must hold the Securities indefinitely unless subsequently registered for resale
with the Securities and Exchange Commission and qualified by state authorities,
or an exemption from such registration and qualification requirements is
available. Other than the registration rights set forth in the Convertible
Preferred Stock Term Sheet and the covenant set forth in Section 5.1 hereof, the
Purchaser acknowledges that the Company has no obligation to register or qualify
the Securities for resale.
4.7 LEGENDS. It is understood that the certificates evidencing the
Securities may bear one or all of the following legends (or substantially
similar legends):
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO SUCH SECURITIES UNDER THE ACT OR UNLESS SUCH TRANSACTION IS IN
COMPLIANCE WITH APPLICABLE FEDERAL AND STATE SECURITIES LAWS."
(b) Any legend required by the laws of any state or foreign
jurisdiction, to the extent such laws are applicable to the shares represented
by the certificate so legended.
EXECUTION VERSION
(c) Any legend required by the Related Recapitalization
Documents.
5. MISCELLANEOUS.
5.1 REGISTRATION RIGHTS. The Company and the Purchaser agree that
they will each use their respective best efforts to promptly enter into an
Investors' Rights Agreement providing for the registration rights on the terms
set forth in the Convertible Preferred Stock Term Sheet at a mutually agreed
upon time in the future, which in any event shall be no later than ten business
days following the request by the Purchaser.
5.2 TAX TREATMENT OF SHARES AND WARRANT. Each of the Company and
the Purchaser covenant that, if the Purchaser determines in its sole discretion
that doing so is appropriate, they will, as a result of arm's length bargaining,
agree on the fair market value of the Shares being issued in the Closing (if
issued apart from the Warrant), and the fair market value of the Warrant (if
issued apart from such Shares). The Company and the Purchaser further agree that
all tax filings and records relating to or including this Agreement, the Shares
and/or or the Warrant shall be prepared on the basis of, and consistently
reflect, the agreed fair market values determined in accordance with this
Section 5.2, and the Company shall instruct its accountants and other
tax-preparation professionals to prepare all tax filings and returns on such
basis.
5.3 NO IMPAIRMENT. The Company shall not, by amendment of its
certificate of incorporation or through a reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action, omission, or agreement, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed by the Company
under and/or in connection with this Agreement, but shall at all times in good
faith use best efforts to assist in carrying out of all the provisions of and/or
relating to this Agreement and in taking all such action as may be necessary or
appropriate to protect each Purchaser's rights, preferences and privileges under
and/or in connection with this Agreement against impairment.
5.4 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which when so executed and delivered will constitute a complete and
original instrument but all of which together will constitute one and the same
agreement, and it will not be necessary when making proof of this Agreement or
any counterpart thereof to account for any counterpart other than the
counterpart of the party against whom enforcement is sought.
5.5 GOVERNING LAW. This Agreement will be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to principles of conflicts of law. Each party to this Agreement hereby
irrevocably and unconditionally agrees that any legal action, suit or proceeding
arising out of or relating to this Agreement or any agreements or transactions
contemplated hereby will be brought in any federal or state court located in
Delaware, and hereby irrevocably and unconditionally expressly submits to the
personal jurisdiction and venue of such courts for the purposes thereof and
hereby irrevocably and unconditionally waives any claim (by way of motion, as a
defense or otherwise) of improper venue, that it is not subject personally to
the jurisdiction of such court, that such courts are an inconvenient forum or
that this Agreement or the subject matter may not be enforced in or by such
courts. Each party hereby irrevocably and unconditionally consents to the
service of
EXECUTION VERSION
process of any of the aforementioned courts in any such action, suit or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to the address set forth or provided for in Section 5.6 of this
Agreement, such service to become effective upon delivery, in accordance with
Section 5.6 below. Nothing herein contained will be deemed to affect the right
of any party to serve process in any manner permitted by law or commence legal
proceedings or otherwise proceed against any other party in any other
jurisdiction to enforce judgments obtained in any action, suit or proceeding
brought pursuant to this Section.
5.6 NOTICES. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to be effective upon delivery
when delivered (a) personally; (b) by facsimile, provided a copy is mailed on
the same day by overnight delivery with a nationally recognized overnight
delivery service; (c) by overnight delivery with a nationally recognized
overnight delivery service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications
will be, in the case of the Purchaser:
Linda F. Powers
Managing Director
Toucan Capital Corp.
7600 Wisconsin Ave, 7th floor
Bethesda, MD 20814
Tel: 240-497-4060
Fax: 240-497-4065
lpowers@toucancapital.com
And in the case of the Company:
Northwest Biotherapeutics, Inc.
Attention: Alton Boynton
22322 20th Avenue, SE, Suite 150
Bothell, Washington 98021
Fax: 425-608-3009
or at such other address and facsimile number as the receiving party will have
furnished to the sending party in writing. Each party will provide five (5)
business days' prior written notice to the other parties of any change in
address or facsimile number.
5.7 SURVIVABILITY. The representations, warranties, covenants and
agreements made and incorporated by reference herein will survive any
investigation made by or on behalf of the Purchaser or the Company, and will
survive for two years after the Closing Date.
5.8 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof will inure to the benefit of, and be binding upon,
the respective successors, assigns, heirs, executors and administrators of the
parties hereto. Notwithstanding anything to the contrary in this Agreement, the
Recapitalization Agreement or the Related Recapitalization Documents, the
Purchaser may transfer or assign all or any portion of its rights under this
Agreement, the Recapitalization Agreement and the other Related Recapitalization
Documents to
EXECUTION VERSION
any person or entity, or designate another party to exercise all or any portion
of the Purchaser's rights under this Agreement, the Recapitalization Agreement
and the other Related Recapitalization Documents, so long as such transfer or
assignment is permissible under applicable federal and state securities laws.
Without limiting the generality of the foregoing, all representations,
warranties, covenants and agreements benefiting the Purchaser will inure to the
benefit of any and all subsequent holders from time to time of the Shares, the
Warrant, the Warrant Shares and the Conversion Shares contemplated by this
Agreement.
5.9 ENTIRE AGREEMENT; AMENDMENTS. This Agreement (including the
Schedules and Exhibits hereto, which are an integral part of this Agreement),
the Recapitalization Agreement (including the Schedules and Exhibits thereto)
and the Related Recapitalization Documents (including the Schedules and Exhibits
thereto) constitute the full and entire understanding and agreement between the
parties with regard to the subjects hereof and thereof. Except as otherwise
expressly provided herein, neither this Agreement, the Recapitalization
Agreement or the Related Recapitalization Documents nor any term hereof or
thereof may be amended, waived, discharged or terminated, except by a written
instrument signed by the Company and the Purchaser. Notwithstanding anything to
the contrary, no provision that applies to any person or entity specifically
designated by name will be amended, waived, discharged or terminated without the
express written consent of such named person or entity. Also notwithstanding
anything to the contrary, this Agreement, the Recapitalization Agreement and/or
the other Related Recapitalization Documents will be amended as and to the
extent necessary to comply with the Small Business Investment Act and all
regulations, advice, direction and guidance applicable to SBICs.
5.10 INTERPRETATION. All pronouns and any variations thereof will
be deemed to refer to the masculine, feminine, neuter, singular or plural, as
the identity of the person or persons or entity or entities may require. All
references to "$" or dollars herein will be construed to refer to United States
dollars. The titles of the Sections and subsections of this Agreement are for
convenience or reference only and are not to be considered in construing this
Agreement.
5.11 RIGHTS, SEVERABILITY. In case any provision of this Agreement,
the Recapitalization Agreement or the Related Recapitalization Documents will be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions will not in any way be affected or impaired thereby.
[SIGNATURE PAGE FOLLOWS]
EXECUTION VERSION
IN WITNESS WHEREOF, the parties hereto have executed this SECURITIES
PURCHASE AGREEMENT as of the date set forth in the first paragraph hereof.
COMPANY:
NORTHWEST BIOTHERAPEUTICS, INC.
Signature: /s/ Alton Boynton
-----------------
Print Name: Alton Boynton
-------------
Title: President
---------
Address: 22322 20TH Avenue, SE
Suite 150
Bothell, WA 98021
PURCHASER:
TOUCAN CAPITAL FUND II, L.P.
By: /s/ Linda Powers
Linda Powers
Managing Director
[Securities Purchase Agreement Signature Page]
EXECUTION VERSION
EXHIBIT A
SCHEDULE OF PURCHASERS
NUMBER OF AGGREGATE
WARRANT PURCHASE
NAME AND ADDRESS SHARES SHARES PRICE
- ------------------------------ ---------- ---------- -----------
TOUCAN CAPITAL FUND II, L.P. 32,500,000 13,000,000 $1,300,000
Attn: Linda Powers
Managing Director
7600 Wisconsin Ave, 7th floor
Bethesda, MD 20814
Tel: 240-497-4060
Fax: 240-497-4065
lpowers@toucancapital.com
EXHIBIT B
(See Exhibit 3.1 filed herewith.)
1.
EXHIBIT C
(See Exhibit 10.2 filed herewith)
15.