EXECUTION VERSION
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-9 MAY 13, 2005
THIS CERTIFIES THAT, for value received, TOUCAN CAPITAL FUND II, L.P., with its
principal office at 0000 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, XX 00000, and/or
its designees or assigns (collectively, the "HOLDER"), is entitled to subscribe
for and purchase from NORTHWEST BIOTHERAPEUTICS, INC., a Delaware corporation,
with its principal office at 00000 00xx Xxxxxx XX, Xxxxx 000, Xxxxxxx,
Xxxxxxxxxx 00000 (the "COMPANY"), such number of Exercise Shares as provided
herein at the Exercise Price (each subject to adjustment as provided herein).
This Warrant is being issued pursuant to the terms of the Amended and Restated
Recapitalization Agreement, dated July 30, 2004, as amended on October 22, 2004,
November 10, 2004, December 27, 2004, January 26, 2005, April 12, 2005 and May
13, 2005, by and among the Company and the Holder (the "RECAPITALIZATION
AGREEMENT").
1.18. DEFINITIONS. Capitalized terms used but not defined herein shall
have the meanings set forth in the Recapitalization Agreement or Related
Recapitalization Document, as applicable. As used herein, the following terms
shall have the following respective meanings:
(A) "CAPITAL STOCK" shall mean the securities for which this
Warrant is exercisable as provided in Section 2.2 hereof.
(B) "DENOMINATOR SHARE PRICE" shall mean $0.10.
(C) "EXERCISE PERIOD" shall mean the period commencing on the
date of issuance of this Warrant and ending seven (7) years after the date
of issuance of this Warrant.
(D) "EXERCISE PRICE" shall mean $0.04 (subject to adjustment
pursuant to Section 5).
(E) "EXERCISE SHARES" shall mean a number of shares of Capital
Stock equal to the quotient of (i) 100% (i.e., 1.0) multiplied by the Note
Amount, divided by (ii) the Denominator Share Price, which in this case
equals 4,500,000 shares of Capital Stock, subject to adjustment pursuant
to the terms herein.
(F) "NOTE AMOUNT" shall mean $450,000.
2.19. EXERCISE OF WARRANT. 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
EXECUTION VERSION
(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 persons affiliated with the Holder, if the Holder so designates, 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 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
Where X = 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 = 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 the Company's initial public offering of its
Common Stock, the fair market value per share shall be the product of (i) the
per share offering price to the public of the Company's initial 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 SECURITIES FOR WHICH WARRANT IS EXERCISABLE. In the event the
Convertible Preferred Stock is approved and authorized, and the terms and
conditions are the same as set forth in the Recapitalization Agreement 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 in the Recapitalization Agreement and in the Convertible Preferred Stock
Term Sheet, then, subject to Section 5 hereof, this Warrant shall be exercisable
solely for such Convertible Preferred Stock. 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 in the
Recapitalization Agreement 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 in the Recapitalization
Agreement and in the Convertible Preferred
EXECUTION VERSION
Stock Term Sheet, this Warrant shall be exercisable for any Equity Security
and/or Debt Security and/or any combination thereof, in each case that Holder
shall designate in Holder's sole discretion.
3.20. COVENANTS OF THE COMPANY.
3.120.1 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 the series of equity securities
comprising the Exercise Shares and the Company's Common Stock to provide
for the exercise of the rights represented by this Warrant and the
subsequent conversion of the Exercise Shares. If at any time during the
Exercise Period the number of authorized but unissued shares of such
series of the Company's equity securities or the Company's Common Stock
shall not be sufficient to permit exercise of this Warrant or the
subsequent conversion of the Exercise Shares, then, in addition to such
other remedies as may be available to Holder, including, without
limitation, the exercise of Holder's right of first refusal set forth in
Section 2.7(f) of the Recapitalization Agreement, the Company will take
such corporate action as shall be necessary to increase its authorized but
unissued shares of such series of the Company's equity securities or the
Company's Common Stock, as appropriate, to such number of shares as shall
be sufficient for such purposes.
3.220.2 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.
3.320.3 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.
3.420.4 REGISTRATION RIGHTS. The Company agrees that the Underlying Shares
(as defined below) shall be "registrable securities" (or terms of similar
impact) under any agreement executed by the Company as part of the
Anticipated Equity Financing, or any other agreement executed by the
Company in lieu of, and/or in addition to, the Anticipated Equity
Financing, in each case, for purposes of providing registration rights
under the Act to holders of shares of Capital Stock, and the Company shall
ensure that any such agreement conforms with the requirements of this
Section 3.4. Such registration rights may not be amended, modified or
waived without the prior written consent of the Holder.
4.21. REPRESENTATIONS OF HOLDER.
4.121.1 ACQUISITION OF WARRANT FOR PERSONAL ACCOUNT. The Holder represents
and warrants that it is acquiring the Warrant, the Exercise Shares and the
shares of Common Stock issuable upon conversion of the Exercise Shares
(the "UNDERLYING SHARES") solely for its account for investment and not
with a view to or for sale or distribution of said Warrant, Exercise
Shares or Underlying Shares, or any part thereof except in compliance with
applicable federal and state securities laws. The Holder also represents
that the
EXECUTION VERSION
entire legal and beneficial interests of the Warrant, the Exercise Shares
and the Underlying Shares the Holder is acquiring is being acquired for,
and will be held for, its account only.
4.221.2 SECURITIES ARE NOT REGISTERED.
(A) The Holder understands that the Warrant, the Exercise Shares and the
Underlying Shares have not been registered under the Securities Act of
1933, as amended (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 has
no such present intention.
(B) The Holder recognizes that the Warrant, the Exercise Shares and the
Underlying Shares must be held indefinitely unless they are subsequently
registered under the Act or an exemption from such registration is
available; provided, however, the parties acknowledge and agree that the
Company has an obligation to register the Underlying Shares as provided in
the Recapitalization Agreement and the Convertible Preferred Stock Term
Sheet.
(C) The Holder is aware that neither the Warrant, the Exercise Shares nor
the Underlying Shares may be sold pursuant to Rule 144 adopted under the
Act unless certain conditions are met, including, among other things, the
existence of a public market for the shares, 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.
4.321.3 DISPOSITION OF WARRANT, EXERCISE SHARES AND UNDERLYING SHARES.
(A) The Holder further agrees not to make any disposition of all or any
part of the Warrant, the Exercise Shares or the Underlying Shares in any
event unless and until:
(I) The Company shall have received a letter secured by the Holder from
the Securities and Exchange Commission stating that no action will be
recommended to the Commission with respect to the proposed disposition;
(II) There is then in effect a registration statement under the Act
covering such proposed disposition and such disposition is made in
accordance with said registration statement; or
(III) The Holder shall have notified the Company of the proposed
disposition and shall have furnished the Company with a detailed statement
of the circumstances surrounding the proposed disposition, and such
disposition shall not be contrary to any applicable federal and/or state
securities laws.
(B) 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.
EXECUTION VERSION
4.421.4 ACCREDITED INVESTOR STATUS. The Holder is an "accredited investor"
as defined in Regulation D promulgated under the Act.
5.22. ADJUSTMENT OF EXERCISE PRICE AND EXERCISE SHARES.
5.122.1 CHANGES IN SECURITIES. In the event of changes in the series of
equity securities of the Company comprising the Exercise Shares by reason
of stock dividends, splits, recapitalizations, reclassifications,
combinations or exchanges of shares, separations, reorganizations,
liquidations, or the like, the number and class 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 total number, class, and kind
of 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.
5.222.2 AUTOMATIC CONVERSION. Upon the automatic conversion of all
outstanding shares of the series of equity securities comprising the
Exercise Shares into Common Stock, if applicable, this Warrant shall
become exercisable for that number of shares of Common Stock of the
Company into which the Exercise Shares would then be convertible, so long
as such shares, if this Warrant had been exercised prior to such offering,
would have been converted into shares of the Company's Common Stock
pursuant to the Company's Certificate of Incorporation. In such case, all
references to "Exercise Shares" shall mean shares of the Company's Common
Stock issuable upon exercise of this Warrant, as appropriate.
5.322.3 DILUTIVE ISSUANCES. If at any time prior to exercise of this
Warrant, the Company issues or sells, or is deemed to have issued or sold,
additional shares of Capital Stock for a nominal or effective price less
than the then effective Exercise Price (a "DILUTIVE ISSUANCE"), then and
in each such case, the then existing Exercise Price shall be reduced, as
of the opening of business on the date of such issue or sale, to the price
at which such shares are issued or sold, or deemed to be issued or sold.
For purposes of this Section 5.3, the Company will be deemed to have
issued or sold additional shares of Capital Stock if it issues any
security or instrument convertible, exercisable or exchangeable for
Capital Stock, or if it promises, undertakes, commits, agrees or enters
into any letter of intent to do so. Notwithstanding the foregoing, (i) no
further adjustment of the Exercise Price shall be made as a result of the
actual issuance of shares of Capital Stock upon the conversion, exercise
or exchange of any such instrument or in satisfaction of any such
undertaking, commitment, agreement or letter of intent, and (ii) no
adjustment of the Exercise Price shall be made as a result of the actual
issuance of any shares of Common Stock pursuant to either (X) the exercise
of those certain options to purchase up to 35,000 shares of Common Stock
at a purchase price of $0.0001 per share that were outstanding on April
26, 2004 and held by members of the Board of Directors of the Company; or
(Y) the exercise of the Initial Bridge Warrants.
5.422.4 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
Financial Officer setting forth such adjustment and the facts upon which
such adjustment is based.
6.23. 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.
EXECUTION VERSION
7.24. 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.
8.25. 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.
9.26. AMENDMENT. Any term of this Warrant may be amended or waived only
with the written consent of the Company and the Holder.
10.27. 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 ten (10) days advance written notice to
the other parties hereto.
11.28. GOVERNING LAW. This Warrant and all rights, obligations and
liabilities hereunder shall be governed by and construed under the laws of the
State of Delaware as applied to agreements among Delaware residents, made and to
be performed entirely within the State of Delaware without giving effect to
conflicts of laws principles.
[SIGNATURE PAGE FOLLOWS]
EXECUTION VERSION
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.
By:
--------------------------------
Name: Xxxxx Xxxxxxx
Title: President
Address: 00000 00xx Xxxxxx XX
Xxxxx 000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
ACKNOWLEDGED AND AGREED:
TOUCAN CAPITAL FUND II, L.P.
By:
----------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director
Address: 0000 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
[SIGNATURE PAGE TO WARRANT NO. BW-9]
EXECUTION VERSION
NOTICE OF EXERCISE
TO: NORTHWEST BIOTHERAPEUTICS, INC.
(1) [ ] The undersigned hereby elects to purchase ________ shares of ___________
(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.
[ ] The undersigned hereby elects to purchase ________ shares of
__________ (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:
------------------------
(Name)
------------------------
------------------------
(Address)
(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) (Signature)
--------------------------------
(Print name)
EXECUTION VERSION
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and 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:
--------------------------------------------------------------------------
(Please Print)
Address:
-----------------------------------------------------------------------
(Please Print)
Dated: __________, 20__
Holder's
Signature:
---------------------------------------------------------------------
Holder's
Address:
-----------------------------------------------------------------------
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.
