EXECUTION VERSION
EXHIBIT 10.1
AMENDMENT NO. 7 TO AMENDED AND RESTATED RECAPITALIZATION AGREEMENT
THIS AMENDMENT NO. 7 TO AMENDED AND RESTATED RECAPITALIZATION AGREEMENT
(this "AMENDMENT") is made and entered into as of June 16, 2005 (the "SEVENTH
AMENDMENT DATE") by and between NORTHWEST BIOTHERAPEUTICS, INC., and its
affiliates, if any (collectively, the "COMPANY"), a Delaware corporation with
offices at 00000 00xx Xxx XX, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx, 00000, and TOUCAN
CAPITAL FUND II, L.P., and its designees (collectively, "INVESTOR"), a Delaware
limited partnership with offices at 0000 Xxxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000.
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, the Company and Investor desire to further amend the Agreement to
make such changes to the Agreement as are set forth herein; and
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
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EXECUTION VERSION
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
June 16, 2005 attached hereto as Exhibit A-11, and the June 16 Bridge Warrant
(as defined herein) in the form attached hereto as Exhibit K-6" immediately
following the phrase "in the form attached hereto as Exhibit K-5" in subsection
(g) thereof.
2. Section 2.2(a) of the Agreement is hereby amended by replacing "A-10" with
"A-11."
3. Section 2.3(b) of the Agreement is hereby amended by adding the following
text immediately following the eighteenth sentence thereof:
"On June 16, 2005 (the "SEVENTH AMENDMENT DATE"), Investor is providing an
additional $500,000 of Bridge Funding (the "JUNE 16 BRIDGE FUNDING") to
cover general operating expenses and certain other expenses of the Company
agreed in advance by Investor during the period from June 16, 2005 through
July 29, 2005. The June 16 Bridge Funding shall be evidenced by a Note in
the form attached hereto as Exhibit A-11 and shall be provided on the
terms and conditions set forth herein. The June 16 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 "May 00 Xxxxxx Xxxxxxx" with "May 13 Bridge Funding or June 16 Bridge
Funding") in the nineteenth sentence thereof (i.e., the twenty-second 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 2.16, immediately
following Section 2.15 thereof, as follows:
"2.16 June 00 Xxxxxx Xxxxxxx:
(a) Issuance of June 16 Bridge Warrant. On the Seventh 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
June 16 Bridge Funding (the "JUNE 00 XXXXXX XXXXXXX"). The Company shall,
therefore, issue $500,000 in warrant coverage on the $500,000 of June 16
Bridge Funding provided on the Seventh Amendment Date. The number of
shares subject to the June 00 Xxxxxx Xxxxxxx to be so issued shall be
determined on the basis of $0.10 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 June 16 Bridge
Warrant shall therefore be 5,000,000 shares as of the Seventh Amendment
Date.
(b) Exercise of June 16 Bridge Warrant. The June 16 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 June 16 Bridge
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EXECUTION VERSION
Warrant shall be $0.04 (subject to adjustment for stock splits, stock
dividends and the like, as provided more fully in the June 00 Xxxxxx
Xxxxxxx). 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 June 16 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 June 16 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 June 00 Xxxxxx Xxxxxxx, 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 June 00 Xxxxxx Xxxxxxx 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 June 00 Xxxxxx Xxxxxxx against impairment. Investor's rights,
preferences and privileges granted under and/or in connection with the
June 00 Xxxxxx Xxxxxxx 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 June 16 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 June 16
Bridge Funding, if issued apart from the June 00 Xxxxxx Xxxxxxx, is
$495,000, and the fair market value of the June 00 Xxxxxx Xxxxxxx, 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 June 16 Bridge
Funding and/or the June 16 Bridge Warrant shall be prepared on the basis
of, and consistently reflect, the agreed fair market values set forth in
this Section 2.16(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."
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EXECUTION VERSION
6. Section 3.4(b) of the Agreement is hereby amended by:
(a) replacing "$5.85 million" with "$5.35 million" in the first
sentence thereof; and
(b) replacing "58,500,000" with "53,500,000" 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 $512,000, (ii) amounts payable to Cognate
Therapeutics and (iii) future sublease payments to MediQuest
Corporation for the Company's premises sublease not yet due, and a
contingent lease liability to Benaroya Capital Co. LLC for premises
currently occupied by MediQuest Corporation should Mediquest
Corporation default on its lease with Benaroya Capital Co. LLC and
which is not yet due, (iv) the Company's aggregate accrued,
contingent and/or other liabilities of any nature, either mature or
immature, as of the Seventh Amendment Date, do not exceed $448,602
(excluding amounts payable to Cognate), of which (x) $331,383 are
currently due payables (including $284,497 for attorney and auditor
fees), (y) $35,219 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) $82,000 are accrued vacation
and sick pay."
8. The Agreement is hereby amended by adding new Exhibit A-11, immediately
following Exhibit A-10 thereto, in the form attached as Exhibit A-11
hereto.
9. Exhibit B to the Agreement, as amended on December 27, 2004, January
26, 2005, April 12, 2005 and May 13, 2005 is hereby further amended by
Exhibit B-5 hereto (the "FIFTH 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-6, immediately
following Exhibit K-5 thereto, in the form attached as Exhibit K-6 hereto.
11. The June 16 Bridge Warrant in the form attached hereto as Exhibit K-6
shall be deemed to be a "BRIDGE WARRANT" and a "WARRANT" for all purposes
under the Agreement and any Related Recapitalization Document. The Note
evidencing the June 16 Bridge Funding in the form attached hereto as
Exhibit A-11 issued on the Seventh Amendment Date shall be deemed to be a
"NOTE" for all purposes under the Agreement and any Related
Recapitalization Document. Each of the June 16 Bridge Warrant and the Note
evidencing the June 16 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.
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EXECUTION VERSION
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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EXECUTION VERSION
IN WITNESS WHEREOF, the parties hereto have executed this AMENDMENT NO. 7
TO AMENDED AND RESTATED RECAPITALIZATION AGREEMENT as of the Seventh Amendment
Date above written.
NORTHWEST BIOTHERAPEUTICS, INC.
By:_____________________
Name: Xxxxx X. Xxxxxxx
Title: President
TOUCAN CAPITAL FUND II, LP
By:____________________
Name: Xxxxx X. Xxxxxx
Title: Managing Director
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EXECUTION VERSION
EXHIBIT A-11
FORM OF $500,000 LOAN AGREEMENT, SECURITY AGREEMENT AND 10% CONVERTIBLE,
SECURED PROMISSORY NOTE DATED JUNE 16, 2005
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EXECUTION VERSION
EXHIBIT B-5
FORM OF FIFTH AMENDMENT TO AMENDED AND RESTATED CONVERTIBLE PREFERRED
STOCK TERM SHEET
8.
EXECUTION VERSION
EXHIBIT K-6
FORM OF JUNE 16 BRIDGE WARRANT
9.
