Exhibit 10.1
AMENDMENT NO. 9 TO AMENDED AND RESTATED RECAPITALIZATION AGREEMENT
THIS AMENDMENT NO. 9 TO AMENDED AND RESTATED RECAPITALIZATION AGREEMENT
(this "AMENDMENT") is made and entered into as of September 7, 2005 (the "NINTH
AMENDMENT DATE") by and between NORTHWEST BIOTHERAPEUTICS, INC., and its
affiliates, if any (collectively, the "COMPANY"), a Delaware corporation with
offices at 22322 20th Ave SE, Suite 150, Bothell, Washington, 98021, and TOUCAN
CAPITAL FUND II, L.P., and its designees (collectively, "INVESTOR"), a Delaware
limited partnership with offices at 7600 Wisconsin Avenue, Bethesda, MD 20814.
All capitalized terms used herein but not otherwise defined shall have the
meaning given such terms in the Agreement (as defined below).
RECITALS
WHEREAS, the Company and Investor have entered into that certain Amended
and Restated Recapitalization Agreement, dated as of July 30, 2004 (the
"AGREEMENT");
WHEREAS, on October 22, 2004, the Company and Investor entered into
Amendment No. 1 to the Agreement;
WHEREAS, on November 10, 2004, the Company and Investor entered into
Amendment No. 2 to the Agreement;
WHEREAS, on December 27, 2004, the Company and Investor entered into
Amendment No. 3 to the Agreement;
WHEREAS, on January 26, 2005, the Company and Investor entered into
Amendment No. 4 to the Agreement;
WHEREAS, on April 12, 2005, the Company and Investor entered into
Amendment No. 5 to the Agreement;
WHEREAS, on May 13, 2005, the Company and Investor entered into Amendment
No. 6 to the Agreement;
WHEREAS, on June 16, 2005, the Company and Investor entered into Amendment
No. 7 to the Agreement;
WHEREAS, on July 26, 2005, the Company and Investor entered into Amendment
No. 8 to the Agreement;
WHEREAS, the Company and Investor desire to further amend the Agreement to
make such changes to the Agreement as are set forth herein; and
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WHEREAS, Section 4.13(f) of the Agreement provides that the Agreement may
be amended or modified only by a written instrument signed by the Company and
Investor.
AMENDMENT
NOW, THEREFORE, for and in consideration of the mutual promises and
covenants set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and
Investor hereby agree as follows:
1. Section 1.2 of the Agreement is hereby amended by inserting "and the
Loan Agreement, Security Agreement and 10% Convertible, Secured Promissory
Note dated September 7, 2005 attached hereto as Exhibit A-13, and the
September 7 Bridge Warrant (as defined herein) in the form attached hereto
as Exhibit K-8" immediately following the phrase "in the form attached
hereto as Exhibit K-7" in subsection (g) thereof.
2. Section 2.2(a) of the Agreement is hereby amended by replacing "A-12"
with "A-13."
3. Section 2.3(b) of the Agreement is hereby amended by adding the
following text immediately following the twenty-first sentence thereof:
"On September 7, 2005 (the "NINTH AMENDMENT DATE"), Investor is providing
an additional $500,000 of Bridge Funding (the "SEPTEMBER 7 BRIDGE
FUNDING") to cover general operating expenses and certain other expenses
of the Company agreed in advance by Investor during the period from
September 7, 2005 through September 30, 2005. The September 7 Bridge
Funding shall be evidenced by a Note in the form attached hereto as
Exhibit A-13 and shall be provided on the terms and conditions set forth
herein. The September 7 Bridge Funding shall be used only for the purposes
and in the amounts agreed to in writing by Investor and the Company."
4. Section 2.3(b) of the Agreement is hereby further amended by replacing
the phrase "July 26 Bridge Funding" with "July 26 Bridge Funding or
September 7 Bridge Funding") in the twenty-fifth sentence thereof (i.e.,
the twenty-eighth sentence thereof after giving effect to the inclusion of
the three new sentences therein per Section 3 of this Amendment).
5. The Agreement is hereby amended by adding a new Section 2.18,
immediately following Section 2.17 thereof, as follows:
"2.18 September 7 Bridge Warrant:
(a) Issuance of September 7 Bridge Warrant. On the Ninth Amendment
Date, Investor shall receive a warrant with coverage equal to one hundred
percent (100%) of the principal amount due under the Note evidencing the
September 7 Bridge Funding (the "SEPTEMBER 7 BRIDGE Warrant"). The Company
shall, therefore, issue $500,000 in warrant coverage on the $500,000 of
September 7 Bridge Funding provided on the Ninth Amendment Date. The
number of shares subject to the September 7 Bridge Warrant to be so issued
shall be determined on the basis of $0.10
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per share (subject to adjustment for stock splits, stock dividends and the
like). The total number of shares for which Investor shall initially be
able to exercise the September 7 Bridge Warrant shall therefore be
5,000,000 shares as of the Ninth Amendment Date.
(b) Exercise of September 7 Bridge Warrant. The September 7 Bridge
Warrant shall be immediately exercisable upon issuance and continue to be
exercisable for a period of seven (7) years after its issuance date. The
exercise price of the September 7 Bridge Warrant shall be $0.04 (subject
to adjustment for stock splits, stock dividends and the like, as provided
more fully in the September 7 Bridge Warrant). In the event the
Convertible Preferred Stock is approved and authorized, and the terms and
conditions are the same as set forth herein and in the Convertible
Preferred Stock Term Sheet, and Other Investors have purchased in cash
(and not by conversion of debt, exercise of warrants or options, or
conversion or exercise of other securities or instruments) a minimum of
$15 million of such Convertible Preferred Stock, on the terms and
conditions set forth herein and in the Convertible Preferred Stock Term
Sheet, then the September 7 Bridge Warrant shall be exercisable solely for
such Convertible Preferred Stock (subject to Section 5 thereof). However,
if, for any reason, such Convertible Preferred Stock is not approved or
authorized, and/or is approved or authorized on any terms different than
any terms set forth herein and in the Convertible Preferred Stock Term
Sheet, and/or if Other Investors have not purchased in cash (and not by
conversion of debt, exercise of warrants or options, or conversion or
exercise of other securities or instruments) a minimum of $15 million of
such Convertible Preferred Stock, on the terms and conditions set forth
herein and in the Convertible Preferred Stock Term Sheet, the September 7
Bridge Warrant shall be exercisable for any Equity Security and/or Debt
Security (each as defined in Section 2.7 hereof) and/or any combination
thereof, in each case that Investor shall designate in Investor's sole
discretion (the securities so elected being the "INVESTOR DESIGNATED
SECURITIES").
(c) No Impairment. The Company shall not, by amendment of its
Charter 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 the September 7 Bridge Warrant, 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 such September 7 Bridge Warrant
and in taking all such action as may be necessary or appropriate to
protect Investor's rights, preferences and privileges under and/or in
connection with the September 7 Bridge Warrant against impairment.
Investor's rights, preferences and privileges granted under and/or in
connection with the September 7 Bridge Warrant may not be amended,
modified or waived without Investor's prior written consent, and the
documentation providing for such rights, preferences and privileges will
specifically provide as such.
(d) Tax Treatment of September 7 Bridge Warrant and Note. The
Company and Investor, as a result of arm's length bargaining, agree that
the fair market value of the Note to be issued in connection with the
September 7 Bridge Funding, if issued
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apart from the September 7 Bridge Warrant, is $495,000, and the fair
market value of the September 7 Bridge Warrant, if issued apart from such
Note, is $5,000. The Company and Investor further agree that all tax
filings and records relating to or including this Agreement, the Note to
be issued in connection with the September 7 Bridge Funding and/or the
September 7 Bridge Warrant shall be prepared on the basis of, and
consistently reflect, the agreed fair market values set forth in this
Section 2.18(d), and the Company shall instruct its accountants and other
tax-preparation professionals to prepare all tax filings and returns on
the basis of the foregoing."
6. Section 3.4(b) of the Agreement is hereby amended by:
(a) replacing "$4.85 million" with "$4.35 million" in the first sentence
thereof; and
(b) replacing "48,500,000" with "43,500,000" in the third sentence
thereof.
7. Section 4.7.15 of the Agreement is hereby amended and restated in its
entirety as follows:
"4.7.15 Liabilities. The Company has the following accrued
liabilities: (i) tax liabilities to the State of Washington in the maximum
amount of $322,017, (ii) amounts payable to Cognate Therapeutics and
Investor, (iii) future sublease payments to MediQuest Corporation and a
contingent lease liability to Benaroya Capital Co. LLC for the Company's
premises should Mediquest Corporation default on its lease with Benaroya
Capital Co. LLC and which is not yet due, and (iv) the Company's aggregate
accrued, contingent and/or other liabilities of any nature, either mature
or immature, as of the Ninth Amendment Date, not in excess of $278,524
(excluding amounts payable to Cognate and Investor), of which (x) $168,282
are currently due payables (including $100,042 for attorney and auditor
fees), (y) $25,134 are the aggregate balances of capital leases payable in
monthly installments in the amounts set forth in the budget included in
the Schedule of Exceptions through the first calendar quarter of 2006,
decreasing thereafter, the last of which is fully amortized in May 2007,
and (z) $85,522 are accrued vacation and sick pay."
8. The Agreement is hereby amended by adding new Exhibit A-13, immediately
following Exhibit A-12 thereto, in the form attached as Exhibit A-13
hereto.
9. Exhibit B to the Agreement, as amended on December 27, 2004, January
26, 2005, April 12, 2005, May 13, 2005, June 16, 2005 and July 26, 2006 is
hereby further amended by Exhibit B-7 hereto (the "SEVENTH AMENDMENT TO
THE AMENDED AND RESTATED CONVERTIBLE PREFERRED STOCK TERM SHEET"). Exhibit
B, as so amended, shall be deemed to constitute the "CONVERTIBLE PREFERRED
STOCK TERM SHEET" for all purposes under the Agreement and all other
Related Recapitalization Documents.
10. The Agreement is hereby amended by adding new Exhibit K-8, immediately
following Exhibit K-7 thereto, in the form attached as Exhibit K-8 hereto.
11. The September 7 Bridge Warrant in the form attached hereto as Exhibit
K-8 shall be deemed to be a "BRIDGE WARRANT" and a "Warrant" for all
purposes under the Agreement and
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any Related Recapitalization Document. The Note evidencing the September 7
Bridge Funding in the form attached hereto as Exhibit A-13 issued on the
Ninth Amendment Date shall be deemed to be a "NOTE" for all purposes under
the Agreement and any Related Recapitalization Document. Each of the
September 7 Bridge Warrant and the Note evidencing the September 7 Bridge
Funding shall be deemed to be "RELATED RECAPITALIZATION DOCUMENTS" for all
purposes under the Agreement and all other Related Recapitalization
Documents.
12. Except as amended and/or restated hereby, all other terms and
conditions of the Agreement shall be unaffected hereby and remain in full
force and effect.
13. This Amendment (including the Exhibits hereto, which are an integral
part of the Amendment), together with the Agreement (including the
Schedules and Exhibits thereto, which are an integral part of the
Agreement) and the Related Recapitalization Documents, constitute the
entire agreement among the parties hereto and thereto with regard to the
subjects hereof and thereof and supersede all prior agreements and
understandings relating to the subject matter hereof and thereof.
14. This Amendment shall be governed by and construed under the laws of
the State of Delaware, without regard to its conflicts of law provisions.
15. This Amendment may be executed in one or more counterparts, each of
which will be deemed an original but all of which together shall
constitute one and the same agreement.
16. This Amendment shall take effect immediately upon execution by the
Company and Investor.
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IN WITNESS WHEREOF, the parties hereto have executed this AMENDMENT NO. 9
TO AMENDED AND RESTATED RECAPITALIZATION AGREEMENT as of the Ninth Amendment
Date above written.
NORTHWEST BIOTHERAPEUTICS, INC.
By:____________________________
Name: Alton L. Boynton
Title: President
TOUCAN CAPITAL FUND II, LP
By:____________________________
Name: Linda F. Powers
Title: Managing Director
EXHIBIT A-13
FORM OF $500,000 LOAN AGREEMENT, SECURITY AGREEMENT AND 10% CONVERTIBLE,
SECURED PROMISSORY NOTE DATED SEPTEMBER 7, 2005
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EXHIBIT B-7
FORM OF SEVENTH AMENDMENT TO AMENDED AND RESTATED CONVERTIBLE PREFERRED
STOCK TERM SHEET
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