NORTHWEST BIOTHERAPEUTICS, INC. WARRANT
Exhibit 10.3
THIS WARRANT AND THE UNDERLYING 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.
NORTHWEST BIOTHERAPEUTICS, INC.
WARRANT
| No. BW-2008-_____ | October 1, 2008 |
This Certifies That, for value received, SDS Capital Group SPC, Ltd., with its principal
office in Xxx Xxxxxxxxx, XX 00000, and/or its assigns (collectively, the “Holder”), is entitled to
subscribe for and purchase from Northwest Biotherapeutics, Inc., a Delaware corporation, with its
principal office in Bethesda, Maryland (the “Company”), such number of Exercise Shares as provided
herein at the Exercise Price as provided herein. This Warrant is being issued pursuant to the terms
of that certain Loan Agreement and Promissory Note, of even date herewith, by and among the Company
and Holder (the “Note”).
1. Definitions. Capitalized terms used but not defined herein shall have the meanings set
forth in the Note, as applicable. As used herein, the following terms shall have the following
respective meanings:
(a) “Common Stock” shall mean the common stock of the Company, par value $0.001 per share.
(b) “Exercise Period” shall mean the period commencing on the date of issuance of this Warrant
and ending five (5) years after the date of issuance of this Warrant.
(c) “Exercise Price” of this Warrant shall be equal to $0.53 per share, subject to adjustment
as provided herein.
(d) “Exercise Share” shall mean each of the 697,775 shares of Common Stock for which this
Warrant is exercisable.
2. Exercise of Warrant. This Warrant will be fully vested and exercisable upon issuance. The
rights represented by this Warrant may be exercised in whole or in part at any time or times during
the Exercise Period, by delivery of the following to the Company at its address set forth above (or
at such other address as it may designate by notice in writing to the Holder):
(a) An executed Notice of Exercise in the form attached hereto;
(b) Payment of the Exercise Price either (i) in cash or by check, or (ii) by cancellation of
indebtedness; and
(c) This Warrant.
Upon the exercise of the rights represented by this Warrant, a certificate or certificates for
the Exercise Shares so purchased, registered in the name of the Holder or Holder’s designee(s),
shall be issued and delivered to the Holder within a reasonable time after the rights represented
by this Warrant shall have been so exercised. In the event that this Warrant is being exercised for
less than all of the then-current number of Exercise Shares purchasable hereunder, the Company
shall, concurrently with the issuance by the Company of the number of Exercise Shares for which
this Warrant is then being exercised, issue a new Warrant exercisable for the remaining number of
Exercise Shares purchasable hereunder.
The person in whose name any certificate or certificates for Exercise Shares are to be issued
upon exercise of this Warrant shall be deemed to have become the holder of record of such shares on
the date on which this Warrant was surrendered and payment of the Exercise Price was made,
irrespective of the date of delivery of such certificate or certificates, except that, if the date
of such surrender and payment is a date when the stock transfer books of the Company are closed,
such person shall be deemed to have become the holder of such shares at the close of business on
the next succeeding date on which the stock transfer books are open.
2.1 Net (Cashless) Exercise. Notwithstanding any provisions herein to the contrary, if the
fair market value of one Exercise Share is greater than the Exercise Price (at the date of
calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder
may elect to receive shares equal to the value (as determined below) of this Warrant (or the
portion thereof being canceled) by surrender of this Warrant at the principal office of the Company
together with the properly endorsed Notice of Exercise in which event the Company shall issue to
the Holder a number of Exercise Shares computed using the following formula:
| X = Y (A-B) A |
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Where X =
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the number of Exercise Shares to be issued to the Holder | |
Y =
|
the number of Exercise Shares purchasable under the Warrant or, if only a portion of the Warrant is being exercised, that portion of the Warrant being canceled (at the date of such calculation) | |
A =
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the fair market value of one Exercise Share (at the date of such calculation) | |
B =
|
Exercise Price (as adjusted to the date of such calculation) |
For purposes of the above calculation, the fair market value of one Exercise Share shall be
determined by the Company’s Board of Directors in good faith; provided, however, that in the event
that this Warrant is exercised pursuant to this Section 2.1 in connection with a public offering
of Common Stock, the fair market value per share shall be the product of (i) the per share offering
price to the public in such public offering, and (ii) the number of shares of Common Stock into
which each Exercise Share is convertible at the time of such exercise.
2.
2.2 Securities for Which Warrant is Exercisable. This Warrant shall be exercisable, in
whole or in part, and from time to time, for Common Stock of the Company.
3. Covenants of the Company.
3.1 Covenants as to Exercise Shares. The Company covenants and agrees that all Exercise
Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon
issuance, be validly issued and outstanding, fully paid and nonassessable, and free from all taxes,
liens and charges with respect to the issuance thereof. The Company further covenants and agrees
that the Company will at all times during the Exercise Period, have authorized and reserved, free
from preemptive rights, a sufficient number of shares of Common Stock to provide for the exercise
of the rights represented by this Warrant. If at any time during the Exercise Period the number of
authorized but unissued shares of Common Stock shall not be sufficient to permit exercise of this
Warrant, then, in addition to such other remedies as may be available to Holder, including, without
limitation, pursuant to the Note, the Company will take such corporate action as shall be necessary
to increase its authorized but unissued shares of Common Stock to such number of shares as shall be
sufficient for such purposes.
3.2 Notices of Record Date. In the event of any taking by the Company of a record of the
holders of any class of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, the Company shall mail to the Holder, at
least ten (10) days prior to the date specified herein, a notice specifying the date on which any
such record is to be taken for the purpose of such dividend or distribution.
3.3 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 this 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 this Warrant and in taking all
such action as may be necessary or appropriate to protect
Holder’s rights, preferences and privileges under and/or in connection with this Warrant
against impairment. The Holder’s rights, preferences and privileges granted under and/or in
connection with this Warrant may not be amended, modified or waived without the Holder’s prior
written consent, and the documentation providing for such rights, preferences and privileges will
specifically provide as such.
3.4 Registration Rights. The Company will use commercially reasonable best efforts to
obtain treatment of the Exercise Shares as “registrable securities” (or terms of similar impact)
under any agreement executed by the Company for financing of the Company, for purposes of providing
registration rights under the Securities Act of 1933, as amended (the “Act”) to holders of the
Warrant and/or Common Stock issued pursuant to exercise of the Warrant.
3.
4.
Representations of Holder.
4.1 Acquisition of Warrant for Personal Account. The Holder represents and warrants that
it is acquiring the Warrant and the Exercise Shares solely for its account for
investment and not with a view to or for sale or distribution of said Warrant or Exercise
Shares, or any part thereof, except in compliance with applicable federal and state securities
laws. The Holder also represents and warrants that the all legal and beneficial interests in the
Warrant and the Exercise Shares which the Holder is acquiring are being acquired for, and will be
held for, its account only.
4.2 Securities Are Not Registered.
(a) The Holder understands that the Warrant and the Exercise Shares have not been
registered under the Act on the basis that no distribution or public offering of the stock of the
Company is to be effected by the Holder. The Holder realizes that the basis for the exemption may
not be present if, notwithstanding its representations, the Holder has a present intention of
acquiring the securities for a fixed or determinable period in the future, selling (in connection
with a distribution or otherwise), granting any participation in, or otherwise distributing the
securities. The Holder represents and warrants that it has no such present intention.
(b) The Holder recognizes that the Warrant and the Exercise Shares must be held
indefinitely unless they are subsequently registered under the Act or an exemption from such
registration is available.
(c) The Holder is aware that neither the Warrant nor the Exercise Shares may be sold
pursuant to Rule 144 adopted under the Act unless certain conditions are met, including, among
other things, the availability of certain current public information about the Company, the resale
following the required holding period under Rule 144 and the
number of shares being sold during any three month period not exceeding specified limitations.
4.3 Disposition of Warrant and Exercise Shares.
The Holder understands and agrees that all certificates evidencing the shares to be issued to
the Holder may bear the following legend:
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 THE SECURITIES UNDER THE ACT OR UNLESS SUCH TRANSACTION IS
IN COMPLIANCE WITH APPLICABLE FEDERAL AND STATE SECURITIES LAWS.
4.4 Accredited Investor Status. The Holder is an “accredited investor” as defined in
Regulation D promulgated under the Act.
5.
Adjustment of Exercise Price and Exercise Shares.
5.1 Changes in Securities. In the event of changes in the Common Stock by reason of stock
dividends, splits, recapitalizations, reclassifications, combinations or exchanges of shares,
separations, reorganizations, liquidations, or the like, the number of Exercise Shares
available under the Warrant in the aggregate and the Exercise Price shall be correspondingly
adjusted to give the Holder of the Warrant, on exercise for the same aggregate Exercise Price, the
same shares as the Holder would have owned had the Warrant been exercised prior to the event and
had the Holder continued to hold such shares until after the event requiring adjustment. For
purposes of this Section 5, the “Aggregate Exercise Price” shall mean the aggregate Exercise Price
payable in connection with the exercise in full of this Warrant. The form of this Warrant need not
be changed because of any adjustment in the number of Exercise Shares subject to this Warrant.
4.
5.2 Certificate of Adjustments. Upon each adjustment of the Exercise Price and/or
Exercise Shares, the Company shall promptly notify the Holder in writing and furnish the Holder
with a certificate of its Chief Executive Officer or Chief Financial Officer setting forth such
adjustment and the facts upon which such adjustment is based.
6. Fractional Shares. No fractional shares shall be issued upon the exercise of this
Warrant as a consequence of any adjustment pursuant hereto. All Exercise Shares (including
fractions) to be issued upon exercise of this Warrant shall be aggregated for purposes of
determining whether the exercise would result in the issuance of any fractional share. If, after
aggregation, the exercise would result in the issuance of a
fractional share, the Company shall, in lieu of issuance of any fractional share, pay the
Holder otherwise entitled to such fraction a sum in cash equal to the product resulting from
multiplying the then current fair market value of one Exercise Share by such fraction.
7. Transfer of Warrant. Subject to applicable laws, this Warrant and all rights hereunder
are transferable, in whole or in part, at any time or times by the Holder, upon delivery of this
Warrant and the form of assignment attached hereto to any transferee designated by Holder. The
transferee shall sign a customary investment letter in form and substance reasonably satisfactory
to the Company.
8. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost,
stolen, mutilated or destroyed, the Company may, on such terms as to indemnity or otherwise as
it may reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender
thereof), issue a new Warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated or destroyed. Any such new Warrant shall constitute an original contractual obligation of
the Company, whether or not the allegedly lost, stolen, mutilated or destroyed Warrant shall be at
any time enforceable by anyone.
9. Amendment. Any term of this Warrant may be amended or waived only with the written
consent of the Company and the Holder.
10. Notices, etc. All notices required or permitted hereunder shall be in writing and
shall be deemed effectively given upon actual delivery to the recipient. All communications shall
be sent to the Company and to the Holder at the addresses listed on the signature page hereof or at
such other address as the Company or Holder may designate by written notice to the other parties
hereto.
5.
11. Governing Law. This Warrant and all rights, obligations and liabilities
hereunder shall be governed by and construed under the laws of the State of New York
as applied to agreements among New York residents, made and to be performed entirely
within the State of New York without giving effect to conflicts of laws principles.
[Signature Page Follows]
6.
In Witness Whereof, the Company has caused this Warrant to be executed by its duly authorized
officer as of the date first written above.
| Northwest Biotherapeutics, Inc. |
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| By: | /s/ Xxxxx Xxxxxxx | |||
| Name: | Xxxxx Xxxxxxx | |||
| Title: | President | |||
| Address: | 0000 Xxxxxxxxx Xxx Xxxxx 000 Xxxxxxxx, XX 00000 |
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ACKNOWLEDGED AND AGREED:
SDS Capital GROUP SPC, LTD.
By:
|
/s/ Xxxxx Xxxxx
|
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| Name: Xxxxx Xxxxx | ||||
| Title: Chief Investment Officer | ||||
Address: 00 Xxxxxx Xxxxxx, Xxxxx 000 Xxx Xxxxxxxxx, XX 00000 |
[Signature Page to Warrant No. BW-2007-___]
NOTICE OF EXERCISE
TO: Northwest Biotherapeutics, Inc.
(1) o The undersigned hereby elects to purchase
_____
shares of Common Stock (the
“Exercise Shares”) of Northwest Biotherapeutics, Inc. (the “Company”) pursuant to the terms of the
attached Warrant, and tenders herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any.
o The undersigned hereby elects to purchase
_____
shares of Common Stock (the
“Exercise Shares”) of Northwest Biotherapeutics, Inc. (the “Company”) pursuant to the terms of the
net exercise provisions set forth in Section 2.1 of the attached Warrant, and shall tender payment
of all applicable transfer taxes, if any.
(2) Please issue a certificate or certificates representing said Exercise Shares in the name
of the undersigned or in such other name as is specified below:
(3) The undersigned represents that (i) the aforesaid Exercise Shares are being acquired for
the account of the undersigned for investment and not with a view to, or for resale in connection
with, the distribution thereof and that the undersigned has no present intention of distributing or
reselling such shares, except in accordance with applicable
federal and state securities laws; (ii) the undersigned is aware of the Company’s business affairs
and financial condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision regarding its investment in the Company; (iii) the undersigned
is experienced in making investments of this type and has such knowledge and background in
financial and business matters that the undersigned is capable of evaluating the merits and risks
of this investment and protecting the undersigned’s own interests; (iv) the undersigned understands
that Exercise Shares issuable upon exercise of this Warrant have not been registered under the
Securities Act of 1933, as amended (the “Securities Act”), by reason of a specific exemption from
the registration provisions of the Securities Act, which exemption depends upon, among other
things, the bona fide nature of the investment intent as expressed herein, and, because such
securities have not been registered under the Securities Act, they must be held indefinitely unless
subsequently registered under the Securities Act or an exemption from such registration is
available; (v) the undersigned is aware that the aforesaid Exercise Shares may not be sold pursuant
to Rule 144 adopted under the Securities Act unless certain conditions are met and until the
undersigned has held the shares for the number of years prescribed by Rule 144, that among the
conditions for use of the Rule is the availability of current information to the public about the
Company; and (vi) the undersigned agrees not to make any disposition of all or any part of the
aforesaid shares of Exercise Shares unless and until there is then in effect a registration
statement under the Securities Act covering such proposed disposition or unless such transaction is
in compliance with applicable federal and state securities laws.
(Date)
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(Signature) | |
| (Print name) |
1.
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and
supply required information. Do not use this form to
purchase shares.)
supply required information. Do not use this form to
purchase shares.)
For
Value Received, the foregoing Warrant and all rights evidenced thereby are hereby assigned
to
Name: |
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| (Please Print) | ||
Address: |
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| (Please Print) |
Dated: , 20__
Holder’s |
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Signature: |
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Holder’s |
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Address: |
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NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face
of the Warrant, without alteration or enlargement or any change whatever. Officers of corporations
and those acting in a fiduciary or other representative capacity should file proper evidence of
authority to assign the foregoing Warrant.
2.
