EXHIBIT 10.37
EXECUTION COPY
AMENDMENT NO. 5 TO AMENDED AND RESTATED RECAPITALIZATION AGREEMENT
THIS AMENDMENT NO. 5 TO AMENDED AND RESTATED RECAPITALIZATION AGREEMENT
(this "AMENDMENT") is made and entered into as of April 12, 2005 (the "FIFTH
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, 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
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
April 12, 2005 attached hereto as Exhibit A-9, and the April 12 Bridge Warrant
(as defined herein) in the form attached hereto as Exhibit K-4" immediately
following the phrase "in the form attached hereto as Exhibit K-3" in subsection
(g) thereof.
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2. Section 2.2(a) of the Agreement is hereby amended by replacing "A-8" with
"A-9."
3. Section 2.3(b) of the Agreement is hereby amended by adding the following
text immediately following the twelfth sentence thereof:
"On April 12, 2005 (the "FIFTH AMENDMENT DATE"), Investor is providing an
additional $450,000 of Bridge Funding (the "APRIL 12 BRIDGE FUNDING") to
cover general operating expenses and certain other expenses of the Company
agreed in advance by Investor during the period from March 25, 2005
through April 30, 2005. The April 12 Bridge Funding shall be evidenced by
a Note in the form attached hereto as Exhibit A-9 and shall be provided on
the terms and conditions set forth herein. The April 12 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 "or December 27 Bridge Funding" with "December 27 Bridge Funding or April
00 Xxxxxx Xxxxxxx" in the thirteenth sentence thereof (i.e., the sixteenth
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 2.14, immediately
following Section 2.13 thereof, as follows:
"2.14 April 00 Xxxxxx Xxxxxxx:
(a) Issuance of April 12 Bridge Warrant. On the Fifth 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
April 12 Bridge Funding (the "APRIL 00 XXXXXX XXXXXXX"). The Company
shall, therefore, issue $450,000 in warrant coverage on the $450,000 of
April 12 Bridge Funding provided on the Fifth Amendment Date. The number
of shares subject to the April 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 April 12 Bridge
Warrant shall therefore be 4,500,000 shares as of the Fifth Amendment
Date.
(b) Exercise of April 12 Bridge Warrant. The April 12 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 April 12 Bridge Warrant shall be $0.04 (subject to
adjustment for stock splits, stock dividends and the like, as provided
more fully in the April 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 April
12 Bridge Warrant shall be exercisable solely for such Convertible
Preferred Stock (subject to Section 5 thereof). However, if, for any
reason, such Convertible
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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 April 12 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 April 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 April 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 April 00 Xxxxxx Xxxxxxx against impairment. Investor's rights,
preferences and privileges granted under and/or in connection with the
April 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 April 12 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 April 12
Bridge Funding, if issued apart from the April 00 Xxxxxx Xxxxxxx, is
$445,500, and the fair market value of the April 00 Xxxxxx Xxxxxxx, if
issued apart from such Note, is $4,500. 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 April 12 Bridge
Funding and/or the April 12 Bridge Warrant shall be prepared on the basis
of, and consistently reflect, the agreed fair market values set forth in
this Section 2.14(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."
6. Section 3.4(b) of the Agreement is hereby amended by:
(a) replacing "$6.75 million" with "$6.3 million" in the first sentence
thereof; and
(b) replacing " "67,500,000" with "63,000,000" in the third sentence
thereof.
7. Section 4.7.6 of the Agreement is hereby amended and restated in its
entirety as follows:
"4.7.6. Capitalization. The authorized capital stock of the Company
consists of 300,000,000 shares of Common Stock, par value $0.001 per share
and 100,000,000
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shares of Preferred Stock, par value of $0.001 per share. As of the date
hereof, 19,028,779 shares of Common Stock and 32,500,000 shares of series
A preferred stock are issued and outstanding. No other shares of any class
or series of the Company's capital stock are authorized and/or issued and
outstanding. All issued and outstanding shares of capital stock of the
Company have been duly authorized and validly issued, and are fully paid
and non-assessable, and have been offered, sold and delivered by the
Company in compliance with all applicable federal and state securities
laws. Except as set forth in Schedule 4.7.6, no subscription, warrant,
option, convertible security, or other right (direct or indirect,
contingent or otherwise) to purchase or otherwise acquire any equity
securities of the Company is authorized or outstanding, and there is no
agreement, promise, commitment, undertaking or letter of intent of any
kind (direct or indirect, contingent or otherwise) by the Company to issue
any shares, subscriptions, warrants, options, convertible securities, or
other such rights, or to distribute to holders of any of its equity
securities any evidence of indebtedness or asset. Except as set forth in
Schedule 4.7.6, the Company has no obligation of any kind (direct or
indirect, contingent or otherwise) to purchase, redeem or otherwise
acquire any of its equity securities or any interest therein or to pay any
dividend or make any other distribution in respect thereof. Schedule 4.7.6
includes a true, accurate and complete statement describing the total
number of shares of the Company outstanding as of the date of this
Agreement (on a fully diluted basis, including, without limitation, all
warrants and options outstanding (whether or not currently exercisable),
all convertible instruments of any kind (whether or not currently
convertible), shares of all classes of stock, and any agreements,
promises, commitments, undertakings or letters of intent to issue any of
the foregoing."
8. 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 $494,000, (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 Fifth Amendment Date, do not exceed
$350,525 (excluding amounts payable to Cognate), of which (x) $231,356 are
currently due payables (including $204,812 for attorney and auditor fees),
(y) $43,505 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) $75,664 are accrued vacation and sick pay."
9. The Agreement is hereby amended by adding new Exhibit A-9, immediately
following Exhibit A-8 thereto, in the form attached as Exhibit A-9 hereto.
10. Exhibit B to the Agreement, as amended on December 27, 2004 and January
26, 2005, is hereby further amended by Exhibit B-3 hereto (the "THIRD AMENDMENT
TO THE AMENDED AND RESTATED CONVERTIBLE PREFERRED STOCK TERM SHEET"). Exhibit B,
as so amended, shall be deemed to constitute
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the "CONVERTIBLE PREFERRED STOCK TERM SHEET" for all purposes under the
Agreement and all other Related Recapitalization Documents.
11. The Agreement is hereby amended by adding new Exhibit K-4, immediately
following Exhibit K-3 thereto, in the form attached as Exhibit K-4 hereto.
12. The April 12 Bridge Warrant in the form attached hereto as Exhibit K-4
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
April 12 Bridge Funding in the form attached hereto as Exhibit A-9 issued on the
Fifth Amendment Date shall be deemed to be a "NOTE" for all purposes under the
Agreement and any Related Recapitalization Document. Each of the April 12 Bridge
Warrant and the Note evidencing the April 12 Bridge Funding shall be deemed to
be "RELATED RECAPITALIZATION DOCUMENTS" for all purposes under the Agreement and
all other Related Recapitalization Documents.
13. 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.
14. 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.
15. This Amendment shall be governed by and construed under the laws of the
State of Delaware, without regard to its conflicts of law provisions.
16. 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.
17. This Amendment shall take effect immediately upon execution by the Company
and Investor.
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IN WITNESS WHEREOF, the parties hereto have executed this AMENDMENT NO. 5
TO AMENDED AND RESTATED RECAPITALIZATION AGREEMENT as of the Fifth Amendment
Date above written.
NORTHWEST BIOTHERAPEUTICS, INC.
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: President
TOUCAN CAPITAL FUND II, LP
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Managing Director
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EXHIBIT A-9
FORM OF $450,000 LOAN AGREEMENT, SECURITY AGREEMENT AND 10% CONVERTIBLE,
SECURED PROMISSORY NOTE DATED APRIL 12, 2005
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EXHIBIT B-3
FORM OF THIRD AMENDMENT TO AMENDED AND RESTATED CONVERTIBLE PREFERRED
STOCK TERM SHEET
8.
EXECUTION COPY
EXHIBIT K-4
FORM OF APRIL 12 BRIDGE WARRANT
9.
