EXHIBIT 10.26
AMENDMENT NO. 10 TO AMENDED AND RESTATED RECAPITALIZATION AGREEMENT
THIS AMENDMENT NO. 10 TO AMENDED AND RESTATED RECAPITALIZATION AGREEMENT
(this "AMENDMENT") is made and entered into as of November 14, 2005 (the "TENTH
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, on June 16, 2005, the Company and Investor entered into Amendment
No. 7 to the Agreement;
WHEREAS, on July 26, 2005, the Company and Investor entered into
Amendment No. 8 to the Agreement;
WHEREAS, on September 7, 2005, the Company and Investor entered into
Amendment No. 9 to the Agreement;
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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
November 14, 2005 attached hereto as Exhibit A-14, and the November 14 Bridge
Warrant (as defined herein) in the form attached hereto as Exhibit K-9"
immediately following the phrase "in the form attached hereto as Exhibit K-8" in
subsection (g) thereof.
2. Section 2.2(a) of the Agreement is hereby amended by replacing "A-13" with
"A-14."
3. Section 2.3(b) of the Agreement is hereby amended by adding the following
text immediately following the twenty-fourth sentence thereof:
"On November 14, 2005 (the "TENTH AMENDMENT DATE"), Toucan Partners, LLC
("TOUCAN PARTNERS"), the designee of Toucan Capital Fund II, L.P., is
providing an additional $400,000 of Bridge Funding (the "NOVEMBER 00
XXXXXX XXXXXXX") to cover general operating expenses and certain other
expenses of the Company agreed in advance by Investor during the period
from November 14, 2005 through December 7, 2005. The November 14 Bridge
Funding shall be evidenced by a Note in the form attached hereto as
Exhibit A-14 and shall be provided on the terms and conditions set forth
herein. The November 14 Bridge Funding shall be used only for the purposes
and in the amounts agreed to in writing by Toucan Partners and the
Company."
4. Section 2.3(b) of the Agreement is hereby further amended by replacing the
phrase "September 7 Bridge Funding" with "September 7 Bridge Funding or November
14 Bridge Funding") in the twenty-eighth sentence thereof (i.e., the
thirty-first 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 2.19, immediately
following Section 2.18 thereof, as follows:
"2.19 November 00 Xxxxxx Xxxxxxx:
(a) Issuance of November 14 Bridge Warrant. On the Tenth Amendment
Date, Toucan Partners shall receive a warrant with coverage equal to one
hundred percent (100%) of the principal amount due under the Note
evidencing the November 14 Bridge Funding (the "NOVEMBER 00 XXXXXX
XXXXXXX"). The Company shall, therefore, issue $400,000 in warrant
coverage on the $400,000 of November 14 Bridge Funding provided on the
Tenth Amendment Date. The number of shares subject to the November 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 Toucan Partners shall
initially be able to exercise the November 14 Bridge Warrant shall
therefore be 4,000,000 shares as of the Tenth Amendment Date.
(b) Exercise of November 00 Xxxxxx Xxxxxxx. The November 14 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 November 14 Bridge Warrant shall be $0.04 (subject
to adjustment for stock splits, stock dividends and the like, as provided
more fully in the November 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
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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 November 14 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 November 14 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 November 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 November 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 November 00 Xxxxxx Xxxxxxx against impairment.
Investor's rights, preferences and privileges granted under and/or in
connection with the November 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 November 00 Xxxxxx Xxxxxxx and Note. The
Company and Toucan Partners, as a result of arm's length bargaining, agree
that the fair market value of the Note to be issued in connection with the
November 14 Bridge Funding, if issued apart from the November 00 Xxxxxx
Xxxxxxx, is $396,000, and the fair market value of the November 00 Xxxxxx
Xxxxxxx, if issued apart from such Note, is $4,000. The Company and Toucan
Partners further agree that all tax filings and records relating to or
including this Agreement, the Note to be issued in connection with the
November 14 Bridge Funding and/or the November 14 Bridge Warrant shall be
prepared on the basis of, and consistently reflect, the agreed fair market
values set forth in this Section 2.19(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 "$4.35 million" with "$3.95 million" in the first sentence
thereof; and
(b) replacing "43,500,000" with "39,500,000" 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
approximate amount of $329,243, (ii) amounts payable to Cognate
Therapeutics and Investor, (iii) future sublease payments to MediQuest
Corporation and a contingent lease liability to Benaroya Capital Company,
LLC for the Company's premises should Mediquest Corporation default on its
lease with Benaroya Capital Company, LLC and which is not yet due, and
(iv) the Company's aggregate accrued, contingent and/or other liabilities
of any nature, either mature or immature, as of the Tenth Amendment Date,
not in excess of $407,126 (excluding amounts payable to Cognate and
Investor), of which (x) $296,028 are currently due payables (including
$212,021 for attorney fees), (y) $18,103 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) $92,995 are accrued vacation and sick
pay."
8. The AGREEMENT is hereby amended to add a new Section 4.14 as follows:
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"4.14 Designee. The parties hereto agree that Toucan Partners, LLC,
a Delaware limited liability company, as a designee of Toucan Capital Fund II,
L.P., is entitled to all rights, privileges and remedies afforded Investor by
this Agreement and all Related Recapitalization Documents, to the extent it
participates in any closing contemplated hereby."
9. The Agreement is hereby amended by adding new Exhibit A-14, immediately
following Exhibit A-13 thereto, in the form attached as Exhibit A-14 hereto.
10. Exhibit B to the Agreement, as amended on December 27, 2004, January 26,
2005, April 12, 2005, May 13, 2005, June 16, 2005, July 26, 2005 and September
7, 2005 is hereby further amended by Exhibit B-8 hereto (the "EIGHTH 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.
11. The Agreement is hereby amended by adding new Exhibit K-9, immediately
following Exhibit K-8 thereto, in the form attached as Exhibit K-9 hereto.
12. The November 14 Bridge Warrant in the form attached hereto as Exhibit K-9
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
November 14 Bridge Funding in the form attached hereto as Exhibit A-14 issued on
the Tenth Amendment Date shall be deemed to be a "NOTE" for all purposes under
the Agreement and any Related Recapitalization Document. Each of the November 14
Bridge Warrant and the Note evidencing the November 14 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. 10 TO
AMENDED AND RESTATED RECAPITALIZATION AGREEMENT as of the Tenth 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
TOUCAN PARTNERS, LLC
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Name: Xxxxx X. Xxxxxx
Title: Managing Member
EXHIBIT A-14
FORM OF $400,000 LOAN AGREEMENT, SECURITY AGREEMENT AND 10% CONVERTIBLE,
SECURED PROMISSORY NOTE DATED NOVEMBER 14, 2005
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EXHIBIT B-8
FORM OF EIGHTH AMENDMENT TO AMENDED AND RESTATED CONVERTIBLE PREFERRED
STOCK TERM SHEET
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EXHIBIT K-9
FORM OF NOVEMBER 14 BRIDGE WARRANT
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