EXHIBIT 10.2
CONVERTIBLE SECURED PROMISSORY NOTE
$__________ Maturity Date:
November ___, 2004
FOR VALUE RECEIVED, Northwest Biotherapeutics, Inc. (the "Maker")
hereby promises to pay to the order of _____________________ or his/her
successors, assigns and legal representatives (the "Holder"), at
[_________[address]_________], or at such other location as the Holder may
designate from time to time, the aggregate principal sum of $______________
(___________ Dollars), in lawful money of the United States of America, together
with interest thereon.
1. Maturity Date. The aggregate principal amount of this Note and
accrued interest thereon shall be due and payable on November ___, 2004 (the
"Maturity Date").
2. Calculation of Interest. This Note shall bear interest at a
rate equal to the Prime Rate, as published in the Wall Street Journal (the
"Prime Rate") plus two percent (2%) per annum. Interest hereunder shall be
calculated on the basis of a 360-day year for the actual number of days elapsed.
3. Interest on Overdue Amounts. If the Maker fails to pay any
amount hereunder when due, whether on the Maturity Date, upon acceleration or
otherwise, and such failure continues for a period of five (5) business days or
more, interest shall thereafter accrue on any overdue amounts at a rate equal to
the Prime Rate plus eight percent (8%) per annum until paid in full.
4. Prepayment. The Maker may prepay this Note and all interest
accrued hereon in whole, but not in part, upon not less than five business days'
prior written notice to the Holder.
5. Conversion.
(a) At any time on or prior to the Maturity Date, the
Holder shall have the right to convert all, but not less than all, of the
principal of and accrued interest on this Note into a number (rounded down in
the case of any fractional shares) of fully paid and non-assessable shares of
Common Stock, par value $.001 per share, of the Maker ("Common Stock") equal to
the amount being converted divided by $0.________. [Insert closing price on date
of closing.]
(b) To effect the conversion of this Note, the Holder
shall surrender this Note to the Maker together with a written notice of
conversion specifying the date on which such conversion is to be effected, which
date may not be less than two business days after the date of such notice,
unless the Maker consents to an earlier date (such date,
the "Conversion Date") and a representation letter to the Maker containing
customary private placement representations and warranties so that the issuance
of the shares of Common Stock upon conversion of this Note shall be exempt from
registration under the Securities Act of 1933, as amended. Promptly following
the Conversion Date, the Maker shall issue to the Holder the shares of Common
Stock into which this Note has been converted, registered on the books of the
Maker in the name of the Holder or its nominee and shall mail the certificate(s)
representing such shares to the Holder at the address specified by the Holder.
From and after the Conversion Date, the Holder shall be treated for all purposes
as the owner of the shares of Common Stock into which this Note has been
converted and the certificate(s) for such shares shall be issued as of the
Conversion Date. As used herein, "business day" means a day, other than a
Saturday or Sunday, on which commercial banks in Seattle are open for the
general transaction of business.
(c) Notwithstanding the other provisions of this Section
5, the principal of and accrued interest on this Note shall automatically be
converted into that number of fully paid and non-assessable shares of Common
Stock equal to the amount being converted divided by the price per share of any
shares issued or deemed to be issued in a Qualifying Financing. As used herein,
the term "Qualifying Financing" means the receipt by Maker of gross proceeds
aggregating at least $1 million resulting from any combination of (i) sales by
Maker to one or more accredited investors of shares of its Common Stock and/or
securities convertible into, exercisable for or exchangeable for shares of
Common Stock; and (ii) licensing revenues arising under any License or Licenses,
as the term License is defined in the Security Agreement, that are newly entered
into after the date of the Transaction Documents. In the event that Maker
engages in a Qualifying Financing solely by virtue of receiving licensing
revenues pursuant to clause (ii) above, then, subject to the following sentence,
this Note shall automatically be converted in accordance with the conversion
price required by Section 5(a). The conversion price as required by Section 5(a)
or the price per share of shares issued, if any, in a Qualifying Financing (in
each case the "Conversion Price") shall be appropriately adjusted for stock
splits, reverse stock splits, reclassifications, recapitalizations, or other
similar occurrences affecting the number of shares of Common Stock outstanding
or the number of shares of Common Stock outstanding.
(d) The Maker shall, prior to any conversion of this Note
by the Holder or any automatic conversion of this Note pursuant to Section 5(c),
have reserved a sufficient number of duly authorized shares of Common Stock to
satisfy the conversion rights granted to the Holder hereunder.
(e) In the event that this Note is converted pursuant to
a Qualifying Financing, and investors purchasing in such Qualifying Financing
receive registration rights with respect to securities purchased in that
financing, then the Holder of shares of Common Stock received upon conversion of
this Note shall be entitled to the benefit of registration rights with respect
thereto, such rights to be not less favorable to the Holder than those afforded
investors in the Qualifying Financing.
2
6. Representations and Warranties. The Maker hereby represents
and warrants to the Holder as follows:
(a) The Maker is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, with full
power and authority to own or lease its property and assets and to carry on its
business as presently conducted.
(b) The Maker has full corporate power and authority to
execute and deliver this Note, the warrants to be issued to the Holder in
consideration of this Note (the "Warrants"), the Security Agreement, dated of
even date herewith (the "Security Agreement and, together with the Note and the
Warrants, the "Transaction Documents"), and to perform its obligations hereunder
and thereunder, all of which have been duly authorized by all requisite
corporate action. Each of the Transaction Documents has been duly authorized,
executed and delivered by the Maker and constitutes a valid and binding
obligation of the Maker, enforceable against the Maker in accordance with its
terms.
(c) No notice to, filing with, or authorization,
registration, consent or approval of any governmental authority or other person
or entity is necessary for the execution, delivery or performance of this Note
or the other Transactions Documents or the consummation of the transactions
contemplated hereby or thereby, other than customary post-sale filings required
under federal and state securities laws all of which shall be made when due.
(d) The shares of Common Stock issuable upon conversion
of this Note in accordance with its terms have been duly authorized and reserved
for issuance, and when issued upon the due conversion of this Note, shall be
validly issued, fully paid and non-assessable. The shares of Common Stock
issuable upon the exercise of the Warrants in accordance with their terms have
been duly authorized and reserved for issuance, and when issued upon the due
exercise of the Warrants, shall be validly issued, fully paid and
non-assessable.
7. Events of Default. Each of the following shall constitute an
"Event of Default" hereunder:
(a) The Maker shall fail to pay any amount under this
Note when due (whether at the Maturity Date, upon acceleration or otherwise);
(b) Any representation or warranty made by the Maker in
this Note or the other Transaction Documents shall have been untrue or
misleading in any material respect when made;
(c) The Maker fails to make a required payment or
payments on indebtedness for borrowed money of Twenty-Five Thousand Dollars
($25,000) or more in aggregate principal amount;
3
(d) There shall have occurred an acceleration of the
stated maturity of any indebtedness for borrowed money of the Maker of
Twenty-Five Thousand Dollars ($25,000) or more in aggregate principal amount
(which acceleration is not rescinded, annulled or otherwise cured within ten
(10) days of receipt by the Maker of notice of such acceleration);
(e) Any Event of Default shall have occurred and be
continuing under the Security Agreement;
(f) The Maker shall merge or consolidate with or into any
other person or entity, sell, transfer, lease or otherwise dispose of all or any
substantial portion of its assets in one transaction or a series of related
transactions, participate in any share exchange, consummate any
recapitalization, reclassification, reorganization or other business combination
transaction or adopt a plan of liquidation or dissolution or agree to do any of
the foregoing, except as may be deemed to occur as a result of the consummation
of a Qualifying Financing;
(g) One or more judgments in an aggregate amount in
excess of Twenty-Five Thousand Dollars ($25,000) shall have been rendered
against the Maker and such judgment or judgments remain undischarged or unstayed
for a period of sixty (60) days after such judgment or judgments become or
became, as the case may be, final and unappealable; or
(h) The Maker shall have applied for or consented to the
appointment of a custodian, receiver, trustee or liquidator, or other
court-appointed fiduciary of all or a substantial part of its properties; or a
custodian, receiver, trustee or liquidator or other court appointed fiduciary
shall have been appointed with or without the consent of the Maker; or the Maker
is generally not paying its debts as they become due by means of available
assets, or has made a general assignment for the benefit of creditors; or the
Maker files a voluntary petition in bankruptcy, or a petition or an answer
seeking reorganization or an arrangement with creditors or seeking to take
advantage of any insolvency law, or an answer admitting the material allegations
of a petition in any bankruptcy, reorganization or insolvency proceeding or has
taken action for the purpose of effecting any of the foregoing; or if, within
sixty (60) days after the commencement of any proceeding against the Maker
seeking any reorganization, rehabilitation, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under the Federal
bankruptcy code or similar order under future similar legislation, the
appointment of any trustee, receiver, custodian, liquidator, or other
court-appointed fiduciary of the Maker or of all or any substantial part of its
properties, such order or appointment shall not have been vacated or stayed on
appeal or otherwise or if, within sixty (60) days after the expiration of any
such stay, such order or appointment shall not have been vacated (collectively,
"Insolvency Events").
Upon the occurrence of any Event of Default, the Holder may,
at its option, declare all amounts due hereunder to be due and payable
immediately and, upon any such declaration, the same shall become and be
immediately due and payable. If an
4
Insolvency Event occurs, then all amounts due hereunder shall become immediately
due and payable without any declaration or other act on the part of the Holder.
Upon the occurrence of any Event of Default, the Holder may, in addition to
declaring all amounts due hereunder to be immediately due and payable, pursue
any available remedy, whether at law or in equity, including, without
limitation, exercising its rights under the Security Agreement. If an Event of
Default occurs, the Maker shall pay to the Holder the reasonable attorneys' fees
and disbursements and all other out-of-pocket costs incurred by the Holder in
order to collect amounts due and owing under this Note or otherwise to enforce
the Holder's rights and remedies hereunder and under the Security Agreement.
8. Secured Obligation. This Note is one of the Notes referred to
in the Security Agreement and is secured by the collateral described therein
(collectively, the "Collateral"). The Security Agreement grants the Holder
certain rights with respect to the Collateral upon an Event of Default.
9. Waiver of Presentment, Demand and Dishonor. The Maker hereby
waives presentment for payment, protest, demand, notice of protest, notice of
non-payment and diligence with respect to this Note, and waives and renounces
all rights to the benefit of any statute of limitations or any moratorium,
appraisement, exemption or homestead now provided or that hereafter may be
provided by any federal or applicable state statute, including but not limited
to exemptions provided by or allowed under the Federal Bankruptcy Code, both as
to itself and as to all of its property, whether real or personal, against the
enforcement and collection of the obligations evidenced by this Note and any and
all extensions, renewals and modifications hereof.
No failure on the part of the Holder hereof to exercise any right or
remedy hereunder with respect to the Maker, whether before or after the
happening of an Event of Default, shall constitute a waiver of any future Event
of Default or of any other Event of Default. No failure to accelerate the debt
of the Maker evidenced hereby by reason of an Event of Default or indulgence
granted from time to time shall be construed to be a waiver of the right to
insist upon prompt payment thereafter; or shall be deemed to be a novation of
this Note or a reinstatement of such debt evidenced hereby or a waiver of such
right of acceleration or any other right, or be construed so as to preclude the
exercise of any right the Holder may have, whether by the laws of the state
governing this Note, by agreement or otherwise; and the Maker hereby expressly
waives the benefit of any statute or rule of law or equity that would produce a
result contrary to or in conflict with the foregoing.
10. Amendment; Waiver. No modification, alteration, waiver or
change of any of the provisions hereof shall be effective unless in writing and
signed by the Maker and the Holder and, then, only to the extent set forth in
such writing.
11. Governing Law; Consent to Jurisdiction; Dispute Resolution.
This Note shall be binding upon the Maker and its successors, assigns and legal
representatives. The validity, construction and interpretation of this Note will
be governed, and construed
5
in accordance with, the laws of the State of Washington. This Note shall be
governed by dispute resolution procedure set forth in Section 9.11(b) of the
Security Agreement.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR
FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
ATTEST: NORTHWEST BIOTHERAPEUTICS, INC.
_____________________ By: _____________________________
Name: Name:
Title:
Dated: November ___, 2003
6
