NORTHWEST BIOTHERAPEUTICS, INC. FORM OF LOAN AGREEMENT and PROMISSORY NOTE
NORTHWEST
BIOTHERAPEUTICS, INC.
FORM
OF LOAN AGREEMENT and
PROMISSORY
NOTE
| US $500,000 |
December 22,
2008
|
SECTION
1. GENERAL.
Toucan
Partnersl a Maryland Company [company][resident] (the “Holder”) hereby grants to
Northwest Biotherapeutics,
Inc., a Delaware company (the “Maker” or the “Company”) an unsecured bridge
term loan facility of five hundred thousandDollars (US$500,000) (the “Principal Amount”) subject to
the terms of this Loan Agreement and Promissory Note (this “Note”). Holder will
deliver the Principal Amount to the Company promptly following execution of this
Note, in US dollars in immediately available funds, at the account notified to
Holder by the Company. The Principal Amount will bear interest until repaid at
an annualized rate of twelve percent (12%) per annum (the Principal Amount and
such interest together the “Repayment
Amount”). The term of this Note will be six (6) months from
the date hereof (the “Maturity
Date”), or such earlier date as may be applicable under Sections 2 and 4
hereof. In addition, upon execution of this Note, Maker will issue to
Holder a warrant exercisable for common stock of Maker as provided in Section 10
hereof (the “Warrant”).
Upon
receipt of the Principal Amount and for value received, the Company hereby
promises to issue the Warrant, and promises to pay the Repayment Amount to the
order of the Holder or its assigns, in accordance with this Note, on the
Maturity Date.
SECTION
2. PRE-PAYMENT.
This Note
may be pre-paid in whole or in part prior to the Maturity Date at any time, at
the election of the Maker in its discretion, provided however that any such
pre-payment will not reduce the number of shares for which the Warrant pursuant
to Section 10 will be exercisable.
SECTION
3. DEFAULT
PAYMENT.
Upon the
occurrence of an Event of Default (as defined in Section 4 hereof) after notice
as provided in Section 15.1 hereof (“Event of Default”), default
payments shall become due and payable on any unpaid Repayment Amount that
remains outstanding after the applicable Maturity Date (the “Default Principal”). The
default payments shall be assessed on a monthly basis at the beginning of each
month or partial month in which any Default Principal remains
outstanding. Such default payments shall be a fixed amount relating
to such month or partial month, and shall not be pro rated if the Default
Principal is repaid by the Maker during such month. The amount of
such default payments shall be equal to the lowest of (i) 0.25% percent of the
Default Principal per month or partial month that such Default Principal remains
outstanding, representing an annualized rate of Default Payments of three
percent (3%) per annum, or (ii) the maximum rate permitted under applicable
rules and regulations of the United States Small Business Administration (“SBA”), or (iii) the maximum
rate allowed by law (the “Default Payments”). Such
Default Payments shall commence upon the occurrence of an Event of Default and
continue until such Event of Default is fully cured or waived.
SECTION
4. DEFAULTS.
4.1 Definitions. Each occurrence of any of
the following events shall constitute an “Event of
Default”:
(a) if
a default occurs in the issuance of the Warrant or in the payment of any
Repayment Amount, or other amounts due under this Note, whether at the due date
thereof or upon acceleration thereof, and such default remains uncured for ten
(10) business days after written notice thereof from Holder;
(b) if
any representation or warranty of Maker made herein shall have been false or
misleading in any material respect, or shall have contained any material
omission, as of the date hereof;
(c) if
a material default occurs in the due observance or performance on the part of
Maker of any covenant or agreement to be observed or performed pursuant to the
terms of this Note and such default remains uncured for ten (10) business days
after written notice thereof from Holder;
(d) if
Maker shall (i) discontinue its business, (ii) apply for or consent to the
appointment of a receiver, trustee, custodian or liquidator of Maker or any of
its property, (iii) make a general assignment for the benefit of creditors, or
(iv) file a voluntary petition in bankruptcy, or a petition or an answer seeking
reorganization or an arrangement with creditors, or take advantage of any
bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or
liquidation laws or statutes, or file an answer admitting the material
allegations of a petition filed against it in any proceeding under any such
law;
(e) if
there shall be filed against Maker an involuntary petition seeking
reorganization of Maker or the appointment of a receiver, trustee, custodian or
liquidator of Maker or a substantial part of its assets, or an involuntary
petition under any bankruptcy, reorganization or insolvency law of any
jurisdiction, whether now or hereafter in effect (any of the foregoing petitions
being hereinafter referred to as an “Involuntary Petition”) and
such Involuntary Petition shall not have been dismissed within ninety (90) days
after it was filed;
4.2 Remedies on
Default.
(a) Upon
each and every such Event of Default and at any time thereafter during the
continuance of such Event of Default: (i) any and all indebtedness and related
amounts (including, without limitation, Default Payments) due from Maker to
Holder under this Note or otherwise shall immediately become due and payable;
and (ii) Holder may exercise all the rights of a creditor under applicable
law.
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(b) In
case any one or more Events of Default shall occur and be continuing, and
acceleration of this Note or any other indebtedness or obligation of Maker to
Holder shall have occurred, Holder may, inter alia, proceed to
protect and enforce its rights by an action at law, suit in equity and/or other
appropriate proceeding, whether for the specific performance of any agreement
contained in this Note, or for an injunction against a violation of any of the
terms hereof or thereof or in furtherance of the exercise of any power granted
hereby or thereby or by law. No right conferred upon Holder by this
Note shall be exclusive of any other right referred to herein or therein or now
or hereafter available at law, in equity, by statute or otherwise.
SECTION
5. DEFENSES.
The obligations of Maker under this
Note shall not be subject to reduction, limitation, impairment, termination,
defense, set-off, counterclaim or recoupment for any reason.
SECTION 6. EXTENSION
OF MATURITY.
Should the Repayment Amount or any
other amounts due under this Note become due and payable on other than a
business day, the due date thereof shall be extended to the next succeeding
business day. For the purposes of the preceding sentence, a business day shall
be any day that is not a Saturday or Sunday, or a legal holiday in the State of
New York in the United States.
SECTION 7. ATTORNEYS’
FEES AND COLLECTION FEES.
In the event that all or part of the
indebtedness evidenced by this Note is collected at law or in equity, or in
bankruptcy, receivership or other court proceedings, arbitration or mediation,
or any settlement of any of the foregoing, Maker agrees to pay, in addition to
the Repayment Amount and any other amounts due and payable hereunder, all costs
of collection incurred by Holder in collecting or enforcing this Note,
including, without limitation, reasonable attorneys’ fees and
expenses.
SECTION 8.
WAIVERS,
DISPUTES, JURISDICTION.
8.1 Waivers by
Maker. Maker hereby waives presentment, demand for
payment, notice of dishonor, notice of protest and all other notices or demands
in connection with the delivery, acceptance, performance or default of this
Note.
8.2 Actions of Holder
not a Waiver. No delay by Holder in exercising any
power or right hereunder shall operate as a waiver of any power or right, nor
shall any single or partial exercise of any power or right preclude other or
further exercise thereof, or the exercise of any other power or right hereunder
or otherwise; and no waiver or modification of the terms hereof shall be valid
unless set forth in writing by Holder and then only to the extent set forth
therein.
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8.3 Consent
to Jurisdiction. Maker hereby submits to the jurisdiction of
any state or federal court sitting in the State of New York over any suit,
action, or proceeding arising out of or relating to this Note or any other
agreements or instruments with respect to Holder. Maker hereby waives, to the
fullest extent permitted by law, any objection that Maker may now or hereafter
have to the laying of venue of any such suit, action, or proceeding brought in
any such court and any claim that any such suit, action, or proceeding brought
in any such court has been brought in an inconvenient forum. Final
judgment in any such suit, action, or proceeding brought in any such court shall
be conclusive and binding upon Maker, and may be enforced in any court in which
Maker is subject to jurisdiction by a suit upon such judgment, provided that
service of process is effected upon Maker as provided in this Note or as
otherwise permitted by applicable law.
8.4 Waiver of Jury
Trial. MAKER WAIVES ANY RIGHTS IT MAY HAVE TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF THIS AGREEMENT OR ANY
DEALINGS BETWEEN MAKER AND HOLDER RELATING TO THE SUBJECT MATTER OF THIS
NOTE. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF
ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE
SUBJECT MATTER OF THIS NOTE, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS,
TORT CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER DOCUMENT OR AGREEMENT
RELATING TO THE LOAN.
8.5 Service of
Process. Maker hereby consents to process being served
in any suit, action, or proceeding instituted in connection with this Note by
delivery of a copy thereof by certified mail, postage prepaid, return receipt
requested, to Maker, and/or by delivery of a copy thereof to a registered agent
of Maker. Refusal to accept delivery, and/or avoidance of delivery,
shall be deemed to constitute delivery. Maker irrevocably agrees that
service in accordance with this Section 8.5 shall be deemed in every respect
effective service of process upon Maker in any such suit, action or proceeding,
and shall, to the fullest extent permitted by law, be taken and held to be valid
personal service upon Maker. Nothing in this Section 8.5 shall affect the right
of Holder to serve process in any manner otherwise permitted by law or limit the
right of Holder otherwise to bring proceedings against Maker in the courts of
any jurisdiction or jurisdictions.
SECTION
9. COVENANTS.
9.1 Affirmative
Covenants. So long as this Note shall remain
outstanding:
(a) Office. Maker
shall maintain its head office in the United States.
(b) Use of
Proceeds. Maker shall use the proceeds from this Note for
operating expenses and other obligations of the Company incurred in pursuing the
Company’s business plans and strategies inside or outside the U.S. including,
without limitation, product rollouts, activities involving facilities and
capacity, clinical trial expenses, research and development expenses, expenses
related to regulatory filings and processes with the US Food and Drug
Administration (“FDA”)
and applicable regulators in various international markets, preparations for
commercial delivery of the Company’s products in various international markets,
expenses related to US Securities and Exchange Commission (“SEC”) filings and processes,
expenses related to salaries and other general and administrative operations,
expenses related to litigation, and expenses of accountants, attorneys,
consultants and other professionals.
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(c) Regulatory
Information. So long as any principal or other obligation
under this Note shall remain outstanding, Maker shall provide to Holder, within
the applicable timeframe specified by Holder, all such information and
assessments as may be necessary or desirable in order for Holder to comply with
its reporting obligations to any governmental agency or authority including,
without limitation, the SBA. To the extent that any such information
constitutes material non-public information, Holder agrees to keep such
information confidential in accordance with applicable securities
laws.
(d) Business
Activity. So long as any principal or other obligation
under this Note shall remain outstanding, Maker shall make no change in its
business activity that would render it or any of its business activities
non-compliant with SBA regulations and guidelines.
9.2 Negative
Covenants. So long as any principal or other obligation
under this Note shall remain outstanding:
(a) No Liens. Maker
shall not grant to any person or entity a security interest, lien, license, or
other encumbrance of any kind, direct or indirect, contingent or otherwise, in,
to or upon any assets of Maker, including, without limitation, any intellectual
property of any kind (collectively, “Liens”), except (i) Liens to
secure further financing for the purpose of (x) repaying the Principal Amount
and any other amounts due pursuant to this Note and any other notes under which
the repayment of principal and other consideration is pari passu with the
repayment under this Note, or (y) funding the further operations of the Company,
or (ii) Liens imposed by law for taxes that are not yet due or are being
contested in good faith by the Company.
(b) No Conflicting
Agreements. Maker shall not enter into any agreement that
would materially impair, interfere or conflict with Maker’s obligations
hereunder.
SECTION
10. WARRANT
In partial consideration for the loan
made by Holder pursuant to this Note, Maker will issue to Holder at Closing a
warrant exercisable for the purchase of common stock of the Maker, in the form
attached hereto as Exhibit
A (the “Warrant”). As provided in the Warrant, the
exercise price will be equal to the lowest closing price of Maker’s common stock
on the US NASDAQ OTC Bulletin Board market or the London AIM market on the
trading day prior to the date of execution of this Note (the
“Exercise Price”). The number of shares for which the Warrant will be
exercisable will be the number of shares of Maker’s common stock which, when
multiplied by the Exercise Price ($0.40), have a value equal to ten percent
(10%) of the Repayment Amount at the original Maturity Date of this Note as
provided in Section 1 hereof. In the event that the Maturity Date is
accelerated pursuant to Section 2 or 4 hereof, such acceleration shall not
reduce the number of shares for which the Warrant will be
exercisable.
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SECTION
11. MAKER’S REPRESENTATIONS AND
WARRANTIES.
Except as
disclosed in the Maker’s public filings with the SEC, Maker represents and
warrants the following:
11.1
Organization, Good Standing and
Qualification. Maker is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware in the
United States, and has all requisite corporate power and authority to carry on
its business. Maker is duly qualified to transact business and is in
good standing in each jurisdiction in which the failure so to qualify would have
a material adverse effect on its business, properties, operations, prospects or
condition (financial or otherwise).
11.2
Authorization. The
execution, delivery and performance by Maker of this Note, and the transactions
contemplated hereunder (including, without limitation, the issuance of common
stock pursuant to exercise of the Warrant), have been duly authorized by all
requisite corporate action by Maker in accordance with Delaware
law. This Note is a valid and binding obligation of Maker,
enforceable against Maker in accordance with its terms, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or other laws of
general application affecting enforcements of creditors’ rights or general
principles of equity.
11.3
No
Conflicts. The execution, delivery, performance, issuance,
sale and delivery of this Note and compliance with the provisions hereof by
Maker will not, to the knowledge of Maker, (a) violate any provision of any law,
statute, rule or regulation applicable to Maker or any order, judgment or decree
of any court, arbitrator, administrative agency or other governmental body
applicable to Maker or any of its assets or (b) conflict with or result in any
material breach of any of the terms or conditions of any agreement or instrument
to which Maker is a party, or give rise to any right of termination,
cancellation or acceleration under any such agreement or instrument, or result
in the creation of any lien or other encumbrance upon any of the material assets
of Maker.
11.4 “Small
Business”.
(a) Small Business
Status. Maker together with its “affiliates” (as that term is
defined in Section 121.103 of Title 13 of Code of Federal Regulations (the
“Federal Regulations”)) is a “small business
concern” within the meaning of the Small Business Investment Act of 1958, as
amended (the “Small Business
Act” or “SBIA”),
and the regulations promulgated thereunder, including Section 121.301(c) of
Title 13, Code of Federal Regulations.
(b) Information for SBA
Reports. Maker has delivered and/or will deliver to Holder
certain information, set forth by and regarding the Maker and its affiliates in
connection with this Note, on SBA Forms 480, 652 and Part A and B of Form
1031. This information delivered was true, accurate, complete and
correct in all material respects, and any information yet to be delivered will
be true, accurate, complete and correct in all material respects, and in
form and substance acceptable to Holder.
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(c) Eligibility. Maker
is eligible for financing by Holder pursuant to Section 107.720 of Title 13 of
the Federal Regulations and any other SBA regulations.
SECTION
12. HOLDER’S REPRESENTATIONS AND
WARRANTIES
12.1 Unregistered
Shares. Holder understands that the shares of common stock to
be issued to Holder pursuant to the Warrant (the “Warrant Shares”) will not be
registered within any designated timeframe thereafter under the Securities Act
of 1933, as amended (the “Securities
Act”). Holder also understands that issuance of the
Warrant Shares will be pursuant to an exemption from registration contained in
the Securities Act based in part upon Holder’s representations
herein.
12.2 Accredited
Investor. Holder hereby represents and warrants that Holder
has substantial experience in evaluating and investing in securities, and is
capable of evaluating the merits and risks of its loan to Maker under this Note
and any investmentin the Warrant Shares, and has the capacity to protect its own
interests. Holder is an “accredited investor” within the meaning of Regulation D
under the Securities Act.
12.3 Investment
Purpose. Holder is acquiring the Warrant and the Warrant
Shares for its own account for investment only, and not with a view towards
distribution. Holder is not aware of publication of any advertisement in
connection with the issuance of the Warrant or the Warrant Shares.
SECTION
13. INDEMNIFICATION
13.1 Indemnification.
(a) In
addition to all rights and remedies available to Holder at law or in equity,
Maker shall indemnify Holder and each subsequent holder of this Note, and their
respective affiliates, stockholders, limited partners, general partners,
officers, directors, managers, employees, agents, representatives, successors
and assigns (collectively, the “Indemnified Persons”) and pay
on behalf of or reimburse such party for any losses, damages, or expenses,
including, without limitation, reasonable attorneys’ fees and all amounts paid
in investigation, defense or settlement of any of the foregoing which any
Indemnified Person may suffer, sustain or become subject to as a result of or in
connection with any material misrepresentation in, or material omission
from, any of the representations and warranties, or any material breach of any
covenant or agreement on the part of Maker under this Note, provided, however,
that notwithstanding the foregoing or any other agreement or provision to the
contrary, in no event shall Maker be liable for indirect or consequential losses
or damages of any kind, and in no event shall Maker be liable for any losses or
damages resulting from the gross negligence or willful misconduct of Holder or a
subsequent holder of this Note.
(b) Within
five (5) business days after receipt of notice of commencement of any action or
the assertion of any claim by a third party, Holder shall give Maker written
notice thereof together with a copy of such claim, process or other legal
pleading of such claim. Maker shall have the right to assist in the
defense thereof by representation of its own choosing, at its own
expense.
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13.2 Survival. All indemnification
rights hereunder shall survive the execution and delivery of this Note and the
consummation of the transactions contemplated hereunder, for a period of two (2)
years, regardless of any investigation, inquiry or examination made for or on
behalf of, or any knowledge of Holder and/or any of the Indemnified Persons, or
the acceptance by Holder of any certificate or opinion.
SECTION
14. REPLACEMENT OF
NOTE.
Upon
receipt by Maker of reasonable evidence of the loss, theft, destruction, or
mutilation of this Note, Maker will deliver a new Note containing the same terms
and conditions in lieu of this Note. Any Note delivered in accordance
with the provisions of this Section 14 shall be dated as of the date of this
Note.
SECTION
15. MISCELLANEOUS.
15.1 Notices. All
notices, demands and requests of any kind to be delivered to any party in
connection with this Note shall be in writing and shall be deemed to be
effective upon delivery if (i) personally delivered, (ii) sent by confirmed
facsimile with a copy sent by nationally or internationally recognized
overnight courier, (iii) sent by nationally or internationally recognized
overnight courier, or (iv) sent by registered or certified mail, return receipt
requested and postage prepaid, addressed as follows:
if to
Maker: Northwest
Biotherapeutics, Inc.
0000 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx,
XX 00000
Tel: x0-000-000-0000
Fax: x0-000-000-0000
Attention: Xxxxx
Xxxxxxx
xxxxxxxx@xxxxx.xxx
with a copy
to: Xxxxx Xxxxxxx, Esq.
Xxxxxxxxx &
Xxxxxxx
0000 Xxxxxxxxxxxx
Xxxxxx, X.X.
Xxxxxxxxxx,
XX 00000-0000
Tel: x0-000-000-0000
Fax: x0-
000-000-0000
xxxxxxxx@xxx.xxx
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if to Holder:
with a copy to:
or to
such other address as the party to whom notice is to be given may have furnished
to the other parties hereto in writing in accordance with the provisions of this
Section.
15.2
Parties In Interest; Assignment. This
Note shall bind and inure to the benefit of Holder, Maker and their respective
successors and permitted assigns. Maker shall not transfer or assign
this Note without the prior written consent of Holder. Holder may
transfer and assign this note without the prior consent of Maker.
15.3 Entire
Agreement. This Note contains the entire understanding of the
parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings among the parties with respect
thereto.
15.4
Severability. If one
or more provisions of this Note are held to be unenforceable under applicable
law, then (i) such provision shall be excluded from this Note, (ii)
the balance of the Note shall be interpreted as if such provision were so
excluded, (iii) the balance of the Note shall be enforceable in
accordance with its terms, and (iv) the parties shall negotiate in good faith to
amend or add to the provisions of this Note to effectuate as nearly as
reasonably practicable, and as nearly as permitted under applicable law, the
original intent of the parties with respect to the provision
excluded.
15.5 Amendments. No
provision of this Note may be amended or waived without the express written
consent of both Maker and Holder, provided, however, that Holder may waive any
provision hereof that inures to the benefit of Holder without the prior written
consent of Maker.
15.6
Headings. The
section and paragraph headings contained in this Note are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Note.
15.7
Governing
Law. This Note shall be governed by and construed in
accordance with the laws of the State of New York, other than any rules relating
to choice of law.
15.8
Nature of
Obligation. This Note is being made for business and
investment purposes, and not for household or other purposes.
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15.9
No Third Party
Rights. A person who is not a party to this Note shall not
have any rights under or in connection with it by virtue of the Contracts
(Rights of Third Parties) Xxx 0000. The rights of the parties to
terminate, rescind or agree any variation, waiver or settlement under this Note
is not subject to the consent of any person that is not a party to this
Note.
15.10
Counterparts. This
Note may be executed and delivered in any number of counterparts, each of which
is an original and which, together, have the same effect as if each party had
signed the same document.
[signatures
on following page]
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IN WITNESS WHEREOF, Maker has
caused this Note to be duly executed by its duly authorized person(s) as of the
date first written above.
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NORTHWEST
BIOTHERAPEUTICS, INC.
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By:
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By:
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Name:
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Name: Xxxxx
Xxxxxxx
Title: President
and CEO
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Title:
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