NORTHWEST BIOTHERAPEUTICS, INC. FORM OF LOAN AGREEMENT and FORM OF PROMISSORY NOTE
NORTHWEST
BIOTHERAPEUTICS, INC.
FORM
OF LOAN AGREEMENT and
FORM
OF PROMISSORY NOTE
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US
$____________
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___,
2009
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SECTION
1. GENERAL.
__________________
(the “Holder”) hereby
grants to Northwest
Biotherapeutics, Inc., a Delaware company (the “Maker” or the “Company”) a convertible loan
of $_______________ Dollars (US$_____________) (the “Principal Amount”) on the
terms and conditions set forth in this Loan Agreement and Promissory
Note (this “Note”). Holder will
deliver the Principal Amount to the Company promptly following execution of this
Note, in US dollars in immediately available funds, at the account notified to
Holder by the Company. The Principal Amount will bear interest from the date
hereof until repaid, at an annualized rate of six percent (6%) per annum (the
“Interest”). The term of this Note will be two years (2) years from
the date hereof. Subject to exercise by Maker or its assigns of the
conversion rights set forth in Section 5 hereof, the Company hereby
promises to pay or deliver to the order of Holder, on March ___, 2011 (the
“Maturity Date”), or
such earlier date as may be applicable under Sections 2 or 4 hereof, the
Repayment Amount (a) wholly or partly in US Dollars in immediately available
funds, at the account notified to the Company by Holder or its assigns, and/or
(b) wholly or partly in common stock of the Company, at the election of the
Company pursuant to Section 5 hereof. The Principal Amount together
with interest from the date hereof to the Maturity Date together
constitute the “Repayment Amount.”
SECTION
2. PRE-PAYMENT.
Subject
to the conversion rights set forth in Section 5 hereof, this Note may be
pre-paid in whole or in part prior to the Maturity Date, at the election of the
Maker in its discretion.
SECTION
3. DEFAULT
PAYMENT.
Upon the
occurrence of an Event of Default (as defined in Section 4 hereof) after notice
and opportunity for cure as provided in Section 15.1 hereof (“Event of Default”), default
payments will become due and payable on any unpaid Repayment Amount that remains
outstanding after the applicable Maturity Date (the “Default Principal”). The
default payments will be assessed on a monthly basis at the end of each month or
partial month in which any Default Principal remains outstanding, and will be
pro rated if the Default Principal is repaid by the Maker during a
month. The amount of such default payments (the “Default Payments”) will be
equal to the lowest of (i) 0.25% percent of the Default Principal per month that
such Default Principal remains outstanding, representing an annualized rate of
Default Payments of three percent (3%) per annum, (ii) the maximum rate
permitted under applicable rules and regulations of the United States Small
Business Administration (“SBA”), or (iii) the maximum
rate permitted under applicable law. Accrual of such Default Payments will
commence upon the occurrence of an Event of Default and continue until such
Event of Default is cured or waived.
SECTION
4. DEFAULTS.
4.1 Definitions. Each occurrence of any of
the following events will constitute an “Event of
Default”:
(a) if
a default occurs in the payment of any Repayment Amount, or other amounts due
under this Note, whether at the due date thereof or upon acceleration thereof,
and such default remains uncured for fifteen (15) business days after written
notice thereof from Holder;
(b) if
any representation or warranty of Maker made herein will have been false or
misleading in any material respect, or will have contained any material
omission, as of the date hereof;
(c) if
a material default occurs in the due observance or performance on the part of
Maker of any covenant or agreement to be observed or performed pursuant to the
terms of this Note and such default remains uncured for fifteen (15) business
days after written notice thereof from Holder;
(d) if
Maker (i) discontinues its business, (ii) applies for or consent to the
appointment of a receiver, trustee, custodian or liquidator of Maker or any of
its property, (iii) makes a general assignment for the benefit of creditors, or
(iv) files a voluntary petition in bankruptcy, or a petition or an answer
seeking reorganization or an arrangement with creditors, or take advantage of
any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or
liquidation laws or statutes, or file an answer admitting the material
allegations of a petition filed against it in any proceeding under any such
law;
(e) if
there is filed against Maker an involuntary petition seeking reorganization of
Maker or the appointment of a receiver, trustee, custodian or liquidator of
Maker or a substantial part of its assets, or an involuntary petition under any
bankruptcy, reorganization or insolvency law of any jurisdiction, whether now or
hereafter in effect (any of the foregoing petitions being hereinafter referred
to as an “Involuntary
Petition”) and such Involuntary Petition will not have been dismissed
within ninety (90) days after it was filed;
4.2 Remedies on
Default.
(a) Upon
each and every such Event of Default and at any time thereafter during the
continuance of such Event of Default: (i) any and all indebtedness and related
amounts (including, without limitation, Default Payments) due from Maker to
Holder under this Note or otherwise will immediately become due and payable; and
(ii) Holder may exercise all the rights of a creditor under applicable
law.
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(b) In
the event that any one or more Events of Default will occur and be continuing,
and acceleration of this Note or any other indebtedness or obligation of Maker
to Holder will have occurred, Holder may, inter alia, proceed to
protect and enforce its rights by an action at law, suit in equity and/or other
appropriate proceeding. No right conferred upon Holder by this Note
will be exclusive of any other right referred to herein or therein or now or
hereafter available at law, in equity, by statute or otherwise.
SECTION
5. CONVERSION; REGISTRATION
5.1 Holder’s
Election. Maker will have the right to elect, in its
sole discretion, to pay or deliver on the Maturity Date, or such earlier date as
may be applicable under Sections 2 or 4 hereof, the Repayment Amount (a) wholly
or partly in US Dollars in immediately available funds, and/or (b) wholly or
partly in common stock of the Company through conversion of the Repayment
Amount, in whole or in part, into common stock of the Company (the “Conversion
Shares”). Maker will notify Holder of such election no later than ten
(10) business days prior to the Maturity Date. In the event that
Maker fails to make an election as provided in this Section 5.1, Maker will be
deemed to have elected to pay or deliver the full Repayment Amount in common
stock of the Company.
12.2 Conversion
Price, Conversion Shares. The conversion price of the
Conversion Shares will be the average of the daily closing price on the US NASD
Over the Counter Bulleting Board (the “OTC market”), or other
applicable US public market, on each of the five trading days prior to the
Maturity Date, or such earlier date as may be applicable under
Sections 2 or 4 hereof (the “Conversion Price”). Upon
issuance pursuant to this Section 5, the Conversion Shares will be duly
authorized, validly issued, fully paid and non-assessable.
5.3 Registration.
5.3.1. Unregistered
Shares. The Conversion Shares will not be registered upon
issuance or within any designated timeframe thereafter under the Securities Act
of 1933, as amended (the “Securities Act”).
5.3.2 Legends.
The certificates evidencing the Conversion Shares may bear the following legend
(or a substantially similar legend) and such other legends as may be required by
applicable laws of any state or foreign jurisdiction:
“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 SUCH SECURITIES UNDER
THE ACT OR UNLESS SUCH TRANSACTION IS IN COMPLIANCE WITH APPLICABLE FEDERAL AND
STATE SECURITIES LAWS.”
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5.3.3 Demand
Registration. If, at any
time after issuance of the Conversion Shares, holders of at least 30% of Maker’s unregistered
common stock request that Maker file a Registration Statement covering at least
30% of such unregistered common stock, Maker will undertake commercially
reasonable efforts, as promptly as practicable, to cause such unregistered
common stock to be registered, provided, however, that the Company will not be
obligated to effect more than one registration per year under these demand right
provisions. Any registration of common stock by Maker must be made using a
Form S-1 registration statement, as the common stock of the Company is trading
on the OTC Market.
5.3.4 Registration on
Form S-3. If, at any time after issuance of the Converison
Shares, Maker becomes eligible to file Registration Statements on Form S-3 (or
any equivalent successor short form), the Holders of a majority of the
unregistered common stock of Maker will have the right to require Maker
to file such a Registration on Form S-3, provided that the anticipated
aggregate offering price in each such registration on Form S-3 exceeds $5
million, and provided further that the Company will not be obligated to effect
more than two registrations per year under these S-3 registration
provisions.
5.3.5 PiggyBack
Registration. Holders will be entitled to unlimited
“piggyback” registration rights, with respect to the Conversion Shares, on
all registrations of Maker. Pursuant to such “piggyback registration
rights,” if the Company at any time shall register and list any other common
stock on any US public market, the Company will simultaneously register and list
the Conversion Shares on such US public market, and will maintain such listing
on the same basis as such other common stock.
5.3.6 Transfer of
Registration Rights. The registration rights provided herein
may be transferred to any transferee permitted under applicable securities laws,
provided that Holder provides advance written notice to Maker thereof, and
provided that the transferee agrees in writing to be bound by the terms of this
Agreement.
5.3.7 Regstration
Costs. Maker will bear all reasonable and customary
expenses relating to the preparation and filing of any registrations which Maker
is required to undertake pursuant to this Agreement.
SECTION
6. EXTENSION OF
MATURITY.
In the event that the Repayment Amount
or any other amounts due under this Note become due and payable on other than a
business day, the due date thereof will be extended to the next succeeding
business day in the United States. For purposes of the preceding sentence, a
business day will be any day that is not a Saturday or Sunday, or a legal
holiday in the State of New York in the United States.
SECTION
7. ATTORNEYS’ FEES AND
COLLECTION FEES.
In the event that all or part of the
indebtedness evidenced by this Note is collected at law or in equity, or in
bankruptcy, receivership or other court proceedings, arbitration or mediation,
or any settlement of any of the foregoing, Maker agrees to pay, in addition to
all amounts due and payable hereunder, all costs of collection incurred by
Holder in collecting or enforcing this Note, including, without limitation,
reasonable attorneys’ fees and expenses actually incurred.
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SECTION
8. WAIVERS, DISPUTES,
JURISDICTION.
8.1 Actions of Holder
not a Waiver. No delay by Holder in exercising any
power or right hereunder will operate as a waiver of any power or right, nor
will any single or partial exercise of any power or right preclude other or
further exercise thereof, or the exercise of any other power or right hereunder
or otherwise; and no waiver or modification of the terms hereof will be valid
unless set forth in writing by Holder and then only to the extent set forth
therein.
8.2 Consent
to Jurisdiction. Maker hereby submits to the jurisdiction of
the state or federal courts sitting in the State of Delaware over any suit,
action, or proceeding arising out of or relating to this Note or any other
agreements or instruments with respect to Holder. Maker hereby waives, to the
fullest extent permitted by law, any objection that Maker may now or hereafter
have to the laying of venue of any such suit, action, or proceeding brought in
any such court and any claim that any such suit, action, or proceeding brought
in any such court has been brought in an inconvenient forum. A final,
non-appealable judgment in any such suit, action, or proceeding brought in any
such courts will be conclusive and binding upon Maker, and may be enforced in
any court in which Maker is subject to jurisdiction by a suit upon such
judgment, provided that service of process is effected upon Maker as provided in
this Note or as otherwise permitted by applicable law.
8.3 Waiver of Jury
Trial. MAKER WAIVES ANY RIGHTS IT MAY HAVE TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF THIS AGREEMENT OR ANY
DEALINGS BETWEEN MAKER AND HOLDER RELATING TO THE SUBJECT MATTER OF THIS
NOTE. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF
ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE
SUBJECT MATTER OF THIS NOTE, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS,
TORT CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THIS WAIVER WILL APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER DOCUMENT OR AGREEMENT RELATING
TO THE LOAN.
8.4 Service of
Process. Maker hereby consents to process being served
in any suit, action, or proceeding instituted in connection with this Note by
delivery of a copy thereof by certified mail, postage prepaid, return receipt
requested, to Maker, and/or by delivery of a copy thereof to a registered agent
of Maker. Refusal to accept delivery, and/or avoidance of delivery,
will be deemed to constitute delivery. Nothing in this Section 7.4
will affect the right of Holder to serve process in any manner otherwise
permitted by law or limit the right of Holder otherwise to bring proceedings
against Maker in the courts of any applicable jurisdiction or
jurisdictions.
SECTION
9. COVENANTS.
9.1
Head
Office. So long as this Note will remain outstanding, Maker
will maintain its head office in the United States.
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9.2
Use of
Proceeds. Maker will use the proceeds from this Note for
operating expenses and other obligations of the Company incurred in pursuing the
Company’s business plans and strategies inside or outside the U.S. including,
without limitation, product rollouts, activities involving facilities and
capacity, clinical trial expenses, research and development expenses, expenses
related to regulatory filings and processes with the US Food and Drug
Administration (“FDA”)
or with applicable regulators in various countries outside the US, preparations
for commercial delivery of the Company’s products in various countries outside
the US, expenses related to filings and processes with US Securities and
Exchange Commission (“SEC”) or the London
Alternative Investment Market (“AIM”), expenses related to
salaries and other general and administrative operations, expenses related to
litigation, and expenses of accountants, attorneys, consultants and other
professionals.
9.3
SBA
Compliance. So long as any principal or other obligation under
this Note remains outstanding, Maker will make no change in its business
activity that would render it or any of its business activities non-compliant
with SBA regulations and guidelines. So long as any principal or
other obligation under this Note remains outstanding, Maker will provide to
Holder, within a reasonable time following a request by Holder, such information
as may be necessary for Holder to comply with its reporting obligations to any
governmental agency or authority including, without limitation, the
SBA. To the extent that any such information constitutes material
non-public information, Holder agrees to keep such information
confidential, and to comply with all applicable securities
laws.
SECTION
10. MAKER’S REPRESENTATIONS AND
WARRANTIES.
Except as
disclosed in the Maker’s public filings with the SEC, Maker represents and
warrants the following:
10.1
Organization, Good Standing and
Qualification. Maker is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware in the
United States, and has all requisite corporate power and authority to carry on
its business. Maker is duly qualified to transact business and is in
good standing in each jurisdiction in which the failure so to qualify would have
a material adverse effect on its business, properties, operations, prospects or
condition (financial or otherwise).
10.2
Authorization. The
execution, delivery and performance by Maker of this Note, and the transactions
contemplated hereunder (including, without limitation, the issuance of common
stock pursuant to exercise of the Warrant), have been duly authorized by all
requisite corporate action by Maker in accordance with Delaware
law. This Note is a valid and binding obligation of Maker,
enforceable against Maker in accordance with its terms, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or other laws of
general application affecting enforcements of creditors’ rights or general
principles of equity.
10.3 No
Conflicts. The execution, delivery, performance, issuance,
sale and delivery of this Note and compliance with the provisions hereof by
Maker will not, to the knowledge of Maker, (a) violate any provision of any law,
statute, rule or regulation applicable to Maker or any order, judgment or decree
of any court, arbitrator, administrative agency or other governmental body
applicable to Maker or any of its assets or (b) conflict with or result in any
material breach of any of the terms or conditions of any agreement or instrument
to which Maker is a party, or give rise to any right of termination,
cancellation or acceleration under any such agreement or instrument, or result
in the creation of any lien or other encumbrance upon any of the material assets
of Maker.
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10.4
“Small Business”.
(a) Small Business
Status. Maker together with its “affiliates” (as that term is
defined in Section 121.103 of Title 13 of Code of Federal Regulations (the
“Federal Regulations”))
is a “small business concern” within the meaning of the Small Business
Investment Act of 1958, as amended (the “Small Business Act” or “SBIA”), and the regulations
promulgated thereunder, including Section 121.301(c) of Title 13, Code of
Federal Regulations.
(b) Information for SBA
Reports. Maker has delivered and/or will deliver to Holder
certain information, set forth by and regarding the Maker and its affiliates in
connection with this Note, on SBA Forms 480, 652 and Part A and B of Form
1031. This information delivered was true, accurate, complete and
correct in all material respects, and any information yet to be delivered will
be true, accurate, complete and correct in all material respects, and in
form and substance acceptable to Holder.
(c) Eligibility. Maker
is eligible for financing by Holder pursuant to Section 107.720 of Title 13 of
the Federal Regulations and any other SBA regulations.
SECTION
11. HOLDER’S REPRESENTATIONS AND
WARRANTIES
11.1 Accredited
Investor. Holder hereby represents and warrants that Holder
has substantial experience in evaluating and investing in securities, and is
capable of evaluating the merits and risks of its loan to Maker under this Note
and any investment in Conversion Shares, and has the capacity to protect its own
interests. Holder is an “accredited investor” within the meaning of Regulation D
under the Securities Act.
11.2 Investment
Purpose. This Note is being made for business and investment
purposes, and not for household or other purposes. In the event that
Holder exercises any conversion rights prusuan to Section 5 hereof, Holder will
be acquiring the Conversion Shares for its own account for investment only, and
not with a view towards distribution. Holder is not aware of publication of any
advertisement in connection with the Conversion Shares.
11.3 Unregistered
Shares. Holder understands and agrees that, in the event that
it exercises any conversion rights pursuant to Section 5 hereof, the
Conversion Shares will not be registered upon issuance or within any designated
timeframe thereafter under the Securities Act of 1933, as amended (the “Securities Act”), provided,
however, that the Conversion Shares will be subject to certain registration
rights as provided in Section 5 hereof. Holder also
understands and agrees that issuance of the Conversion Shares will be pursuant
to an exemption from registration contained in the Securities Act based in part
upon Holder’s representations herein.
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SECTION
12 INDEMNIFICATION
12.1 Indemnification.
(a) In
addition to all rights and remedies available to Holder at law or in equity,
Maker will indemnify Holder and each subsequent holder of this Note, and their
respective affiliates, stockholders, limited partners, general partners,
officers, directors, managers, employees, agents, representatives, successors
and assigns (collectively, the “Indemnified Persons”) and pay
on behalf of or reimburse such party for any losses, damages, or expenses,
including, without limitation, reasonable attorneys’ fees actually incurred and
all amounts paid in investigation, defense or settlement of any of the foregoing
which any Indemnified Person may suffer, sustain or become subject to as a
result of or in connection with any material misrepresentation in, or
material omission from, any of the representations and warranties, or any
material breach of any covenant or agreement on the part of Maker under this
Note, provided, however, that notwithstanding the foregoing or any other
agreement or provision to the contrary, in no event will Maker be liable for
indirect or consequential losses or damages of any kind, and in no event will
Maker be liable for any losses or damages in excess of the Repayment Amount
pursuant to this Note.
(b) Within
five (5) business days after receipt of notice of commencement of any action or
the assertion of any claim by a third party, Holder will give Maker written
notice thereof together with a copy of such claim, process or other legal
pleading of such claim. Maker will have the right to assist in the
defense thereof by representation of its own choosing, at its own
expense.
12.2 Survival. All
indemnification rights hereunder will survive the execution and delivery of this
Note and the consummation of the transactions contemplated hereunder, for a
period of two (2) years, regardless of any investigation, inquiry or examination
made for or on behalf of, or any knowledge of Holder and/or any of the
Indemnified Persons, or the acceptance by Holder of any certificate or
opinion.
SECTION
13. REPLACEMENT OF
NOTE.
Upon
receipt by Maker of reasonable evidence of the loss, theft, destruction, or
mutilation of this Note, Maker will deliver a new Note containing the same terms
and conditions in lieu of this Note. Any Note delivered in accordance
with the provisions of this Section 14 will be dated as of the date of this
Note.
SECTION
14. MISCELLANEOUS.
14.1 Notices. All
notices, demands and requests of any kind to be delivered to any party in
connection with this Note will be in writing and will be deemed to be effective
upon delivery if (i) personally delivered, (ii) sent by confirmed facsimile with
a copy sent by nationally or internationally recognized overnight courier,
(iii) sent by nationally or internationally recognized overnight courier, or
(iv) sent by registered or certified mail, return receipt requested and postage
prepaid, addressed as follows:
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if
to Maker:
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Northwest
Biotherapeutics, Inc.
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if to Holder:
with a copy to:
or to
such other address as the party to whom notice is to be given may have furnished
to the other parties hereto in writing in accordance with the provisions of this
Section.
14.2 Parties In Interest; Assignment. This
Note will bind and inure to the benefit of Holder, Maker and their respective
successors and permitted assigns. Maker will not transfer or assign
this Note without the prior written consent of Holder. Holder may
transfer and assign this note without the prior consent of Maker.
14.3 Entire
Agreement. This Note contains the entire understanding of the
parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings among the parties with respect
thereto.
14.4 Severability. If one
or more provisions of this Note are held to be unenforceable under applicable
law, then (i) such provision will be excluded from this Note, (ii)
the balance of the Note will be interpreted as if such provision were so
excluded, (iii) the balance of the Note will be enforceable in
accordance with its terms, and (iv) the parties will negotiate in good faith to
amend or add to the provisions of this Note to effectuate as nearly as
reasonably practicable, and as nearly as permitted under applicable law, the
original intent of the parties with respect to the provision
excluded.
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14.5
Amendments. No
provision of this Note may be amended or waived without the express written
consent of both Maker and Holder, provided, however, that Holder may waive any
provision hereof that inures to the benefit of Holder without the prior written
consent of Maker.
14.6
Headings. The
section and paragraph headings contained in this Note are for reference purposes
only and will not affect in any way the meaning or interpretation of this
Note.
14.7
Governing
Law. This
Note will be governed by and construed in accordance with the laws of the State
of Delaware, other than any rules relating to choice of
law.
14.8
Nature
of
Obligation. This Note is being made for business and
investment purposes, and not for household or other
purposes.
14.9
Counterparts. This
Note may be executed and delivered in any number of counterparts, each of which
is an original and which, together, have the same effect as if each party had
signed the same document.
IN
WITNESS WHEREOF, Maker has caused this Note to be duly executed by its
duly authorized person(s) as of the date first written
above.
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NORTHWEST
BIOTHERAPEUTICS, INC.
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By:
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By:
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Name: ▇▇▇▇▇
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Name:
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Title: President
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Title:
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