the issuance of a series of convertible promissory notes to Toucan Capital Fund II, L.P. (Toucan Capital), a venture capital fund, in aggregate principal amount of approximately $6.75 million (and associated warrants to purchase an aggregate of 122.5 million shares of capital stock at exercise prices ranging from 0.01 to $0.04 per share) from February 2004 through September 2005. The notes accrued interest at 10% per annum from the respective original issuance dates of the notes
EX-10.24 11 v16023exv10w24.txt EXHIBIT 10.24 Exhibit 10.24 AMENDED AND RESTATED BINDING TERM SHEET CONVERTIBLE PREFERRED STOCK Northwest Biotherapeutics, Inc. October 22, 2004 THIS AMENDED AND RESTATED BINDING CONVERTIBLE PREFERRED STOCK TERM SHEET AMENDS AND RESTATES THAT CERTAIN BINDING CONVERTIBLE PREFERRED STOCK TERM SHEET BY AND BETWEEN THE PARTIES HERETO DATED AS OF APRIL 26, 2004. Issuer: Northwest Biotherapeutics, Inc. (the "Company"), a Delaware corporation. Purchasers: Toucan Capital Fund II, L.P and/or its designee(s) (collectively, "Investor"), and such other investors as may subsequently be identified (the "Other Investors"). Election to lead At Investor's election on or before the end of the equity financing: Bridge Funding Period, Investor shall have the right to lead the equity financing and assemble the syndicate of Other Investors. Securities to be 10% Cumulative Convertible Preferred Stock Issued: ("Convertible Preferred" or "Convertible Preferred Stock"), convertible into common stock of the Company ("Common" or "Common Stock"). Share price: The price per share shall be the lesser of $0.10 per share or 35% discount to the average closing price during the twenty trading days prior to closing; provided, however, that in no event will the price per share be less than $.04. The share price provided herein is subject to adjustment for dividends, splits, etc. Amount of Issuance: Up to $40 million (including any shares issuable upon conversion of Bridge Funding, but not including any shares issuable upon exercise of warrants, options, and similar instruments or obligations) (the "Maximum Issuance"), in one or more tranches. First Closing: First closing ("First Closing") to occur upon completion of Bridge Period, documentation and fulfillment of conditions to closing. Subsequent Closings: Additional closings of the Convertible Preferred Stock after the First Closing ("Subsequent Closings") may take place at any time on or before 12 months after the First Closing (the "Equity Financing Period"), so long as the aggregate amount raised does not exceed the Maximum Issuance. All subsequent closings of the Convertible Preferred Stock shall be on the same terms and conditions as in the First Closing and shall use the same documentation as in the First Closing. Warrants: The Company shall issue $7 million (or, in the event that the November Bridge Funding is not provided, $7.5 million) in warrant coverage on the first $7 million
A-1 (or, in the event that the November Bridge Funding is not provided, $7.5 million) Convertible Preferred Stock purchased for cash (the "Preferred Stock Warrants"). Preferred Stock Warrants shall not be issued upon conversion of notes, exercise of warrants, or other conversion or exercise. The number of warrants to be so issued shall be determined on the basis of $0.10 per share. If the total of $7 million (or, in the event that the November Bridge Funding is not provided, $7.5 million) is invested in Convertible Preferred Stock, the number of warrants issued shall be exercisable for 70 million (or, in the event that the November Bridge Funding is not provided, 75 million) shares of Convertible Preferred Stock. The exercise price of such Preferred Stock Warrants shall be the lesser of $0.10 per share (subject to adjustment for stock splits, stock dividends and the like) and 35% discount to the average closing price during the twenty trading days prior to the First Closing; provided, however, that in no event will the exercise price be less than $.04 per share (subject to adjustment for stock splits, stock dividends and the like). The exercise period shall commence upon issuance of the Preferred Stock Warrants, and shall continue for a period of seven (7) years after their respective issuance dates. Tax Treatment of Warrants: The Company and the purchasers of the Convertible Preferred Stock shall agree upon the fair market value of the Preferred Stock Warrants, and the Company shall make all of its tax filings on this basis, and instruct its accountants and other tax-preparation professionals to prepare all tax filings and returns on the basis of the foregoing. Right of First Refusal: Investor shall have a right of first refusal to purchase up to $15 million of the Convertible Preferred Stock. This right of first refusal shall apply at each closing during the Equity Financing Period, until the $15 million amount is reached. Such purchases shall be determined in addition to, and shall not be deemed to include, any purchases of Convertible Preferred Stock by Investor (including its designees) through conversion of Bridge Funding, or exercise of any warrants or similar instruments. Such right of first refusal shall apply regardless of whether or not Investor leads the financing during any part of the Equity Financing Period. Conditions to Closings: The following conditions shall apply to each closing for the purchase and sale of Convertible Preferred Stock. Each such condition must be satisfied or waived, and such satisfaction and/or waiver of each such condition shall be determined by Investor and, as applicable, Other Investors in their respective sole discretion, individually and not jointly. - The Company shall have in all material respects performed, and be in compliance with, all obligations, agreements, covenants, closing conditions and other provisions contained in the Amended and Restated Recapitalization Agreement by and between the parties hereto dated July 30, 2004, as amended on October 22, 2004 (the "Recapitalization Agreement"), the Notes evidencing Bridge Funding (to the extent any such notes remain outstanding), and the other Related Recapitalization.
A-2 Documents including, without limitation, the financing documents associated with the issuance of the Convertible Preferred Stock (the "Financing Documents"), required to be performed or fulfilled on or before the applicable closing date. - All representations and warranties set forth in the Recapitalization Agreement, the Notes evidencing Bridge Funding (to the extent any such notes remain outstanding), and the other Related Recapitalization Documents shall be true and complete as of each closing. - There shall have been no change that has had or is reasonably likely to have a material adverse effect on the business, affairs, prospects, operations, properties, assets, liabilities, structure or condition, financial or otherwise, of the Company (as such business is presently conducted and/or as it is proposed to be conducted) between the date of the Recapitalization Agreement and each closing of purchases of Convertible Preferred Stock. - All corporate and other proceedings, and all documents relating to the issuance and sale of Convertible Preferred Stock pursuant to the Recapitalization Agreement shall be satisfactory in substance and form to Investor and Other Investors, as applicable. Investor's counsel and each Other Investors' counsel (if applicable) shall have received all such counterpart originals or certified or other copies of such documents as they may have requested including, without limitation: - The resolutions of the Board of Directors of the Company, authorizing and approving all matters in connection with the sale of the Convertible Preferred Stock certified by the Secretary of the Company as of the Closing Date. - All stockholder consents, votes or other approval required by applicable state or federal law (including any and all SEC rules and regulations) and any consents required by applicable securities exchanges or markets or corporate partners required to authorize and approve all matters in connection with the sale of Convertible Preferred Stock as contemplated by this term sheet. - The Company shall have executed, delivered and maintained in force (i) a Convertible Preferred Stock purchase agreement, (ii) an Investors' Rights Agreement, (iii) an amended and restated certificate of incorporation (or if appropriate, a certificate of designation), (iv) a voting agreement, if applicable, and (v) such other documents as may be necessary or desirable in the determination of Investor and Other Investors, as applicable. - The Investor and Other Investors shall have received from counsel
A-3 to the Company an opinion letter containing opinions customary for transactions similar to the Proposed Equity Financing in the form reasonably acceptable to Investor and Other Investors (including, but not limited to, an opinion that the issuance of the Convertible Preferred Stock, the Preferred Stock Warrants and the securities issuable upon conversion and/or exercise thereof pursuant to the Proposed Equity Financing are exempt from the registration provisions of the federal and state securities laws). - The Company shall have taken all necessary steps to set the number of directors on the Company's board of directors at seven (7) and elect directors according to the "Board of Directors" section below, including, without limitation, execution of a Voting Agreement if necessary or desirable in the determination of Investor and Other Investors, as applicable. - The Company shall have delivered a certificate of its Chief Executive Officer, or other authorized and responsible officer of the Company acceptable to Investor and Other Investors, as applicable, in their respective sole discretion, certifying that all closing conditions have been fulfilled and that all representations and warranties are applicable and true as of the date of such closing. - The Company shall have provided prior to the applicable closing date all due diligence information requested by any investor, and/or necessary to enable such investor to complete a thorough due diligence review and obtain a complete and accurate understanding of the business, operations, prospects, assets, liabilities, structure, legal aspects and condition, financial or otherwise, of the Company. - Within the six month period prior to any closing of Convertible Preferred Stock, the Company shall not have entered into, increased, expanded, extended, renewed or reinstated (or agreed, promised, committed or undertaken to do so), any severance, separation, retention, change of control or similar agreement with any employee, other than such agreements entered into with the prior written approval of Investor and Other Investors, as applicable. - Within the six month period prior to any closing of Convertible Preferred Stock, the Company shall not have hired, or agreed to hire, any employee or engaged, or agreed to engage, any consultant, independent contractor or any other non-employee personnel, except in accordance with the Company's budget that has been approved by the Company's board of directors and the Investor and Other Investors, as applicable;
A-4 - Within the six month period prior to any closing of Convertible Preferred Stock, the Company shall not have purchased, leased, hired, rented or otherwise acquired directly or indirectly any rights in or to any asset or facility in an amount in excess of $10,000, or agreed, promised or committed to do so, except in accordance with the Company's budget that has been approved by the Company's board of directors and the Investor and Other Investors, as applicable. - [***]* - All Intellectual Property licenses, agreements, patent applications and filings shall be current and in good standing. - The Company shall have obtained the approval of the required number of its stockholders (the Company shall be obligated to use its best efforts in good faith comply with these terms and conditions to obtain stockholder consent and, in the event that it uses its best efforts in good faith to do so and fails to achieve stockholder approval, the Company shall not be required to sell the Convertible Preferred Stock). - The satisfaction of other customary conditions of transactions of this sort that Investor may reasonably require. Conversion: The Convertible Preferred Stock shall be convertible at any time, in whole or in part, at the option of the holder (without any further payment by the holder) into Common Stock of the Company. The initial conversion ratio shall be one share of Common Stock for each share of Convertible Preferred Stock (the "Conversion Ratio"). The Conversion Ratio shall be subject to appropriate adjustment in the event of (i) any subdivision or combination of the Company's outstanding Common Stock, (ii) any distribution by the Company of a stock dividend or assets, (iii) any capital reorganization or reclassification of the Company affecting the conversion price, or other similar transactions, as applicable. The Conversion Ratio shall also be subject to adjustment pursuant to the anti-dilution provisions (below). Rights, Preferences, (1) Dividends: A cumulative dividend shall accrue Privileges and at the rate of 10% per annum, compounding quarterly Restrictions: on the Convertible Preferred Stock. No dividends shall be paid on the Common or any other securities issued by the Company other than the Convertible Preferred Stock. Dividends shall be payable as and when determined
- ---------- * Confidential Treatment Requested. A-5 by the Board of Directors, and upon the occurrence of a liquidation. A liquidation shall be deemed to include, without limitation, a merger resulting in a change in control of the Company, sale of all or substantially all of the assets of the Company, or transfer of control (not including any transfer of control that is the result of the sale and issuance of the Convertible Preferred Stock contemplated hereunder, the conversion of any of the Bridge Funding or exercise of any Bridge Warrants or Preferred Stock Warrants). (2) Liquidation Preference: In the event of liquidation or winding up of the Company, the holders of shares of Convertible Preferred shall be entitled (at such holders' option) to convert such shares to Common Stock or to receive, in preference to the holders of Common, (i) an amount equal to the original purchase price with respect to such Convertible Preferred Stock, plus (ii) (to the extent of current and/or retained earnings) any dividends accrued but not paid on such Convertible Preferred Stock, or such lesser amount as is the maximum amount acceptable under applicable SBA and SEC rules and regulations. Thereafter, all remaining assets shall be distributed pro-rata to the holders of Common Stock and all Convertible Preferred Stock on an as converted basis. A liquidation shall be deemed to include, without limitation, a merger resulting in a change in control of the Company, sale of all or substantially all of the assets of the Company, or transfer of control (not including any transfer of control that is the result of the sale and issuance of the Convertible Preferred Stock contemplated hereunder, the conversion of any of the Bridge Funding or exercise of any Bridge Warrants or Preferred Stock Warrants). (3) Anti-dilution: Notwithstanding anything herein to the contrary, except for issuances to management and employees, which must be approved by the Board pursuant to written benefit plans, and except for issuances relating to the Bridge Funding under the Recapitalization Agreement, if the Company issues (or, directly or indirectly promises, commits, or undertakes to issue) any additional securities or instruments at a nominal or effective purchase price less than the price resulting from the application of the Conversion Ratio, calculated on a fully diluted basis with respect to the Convertible Preferred Stock, then the Conversion Ratio of such Convertible Preferred Stock shall be reduced on a full ratchet basis to eliminate the effect of such dilutive issuance on such Convertible Preferred Stock. (4) Protective Provisions: Until fewer than 1,000,000 shares of Convertible Preferred Stock are outstanding (as adjusted for stock splits, stock dividends and the like), the Company shall not, without the approval of the Board of Directors and the affirmative vote or written consent of the holders of a majority of the then outstanding shares of Convertible Preferred Stock: (i) authorize or issue (including, without limitation, by way of recapitalization), or obligate itself to authorize or issue, any equity security of the Corporation, or any other security exercisable for or convertible into an equity security of the Corporation, that has redemption rights or that is senior to or on parity with the Convertible Preferred Stock as to dividend rights, voting rights, liquidation preferences or any other
A-6 rights, preferences or privileges; (ii) increase or decrease (other than by conversion) the total number of authorized shares of Convertible Preferred Stock or Common Stock; (iii) effect any sale, lease, assignment, transfer or other conveyance or encumbrance of all or substantially all of the assets of the Corporation or any of its subsidiaries in one or more related transactions, or any consolidation or merger resulting in a change in control of the Company, or any reclassification, recapitalization or other change of any capital stock of the Corporation; (iv) change the authorized number of directors of the Corporation; (v) amend or repeal the Certificate (including by way of any Certificate of Designation) or the Corporation's Bylaws; (vi) redeem, purchase or otherwise acquire (or pay into or set aside for a sinking fund for such purpose) any of the Common Stock or common stock equivalents; provided, however, that this restriction shall not apply to the repurchase of up to a maximum of $100,000 of Common Stock per year from employees, officers, directors, consultants, advisors or other persons performing services for the Corporation, pursuant to agreements under which the Corporation has the option to repurchase such shares at cost upon the occurrence of certain events, such as the termination of employment; (vii) effect the liquidation, dissolution or winding up of the Corporation; or (viii) agree, promise, commit or undertake to do any of the foregoing. (5) Voting Rights: The holders of Convertible Preferred will have the right to that number of votes equal to the number of shares of Common Stock issuable upon conversion of such Preferred Stock. Private Placement: The Convertible Preferred Stock shall not be registered under the Securities Act of 1933, as amended (the "Act") and may not be resold without such registration or an exemption under the provisions of the Act. The Convertible Preferred Stock shall be sold only to "accredited investors," as defined in Regulation D under the Act. Registration Rights At the request of Investor, the Company will use its best efforts to prepare and file, within 60 days following the First Closing and each Subsequent Closing, a registration statement on Form SB-2 or Form S-1 (or if Form S-3 is available, on Form S-3) (the "Registration Statement") for the resale of the shares of Common Stock issuable to the Investor and Other Investors upon conversion of the Convertible Preferred Stock and upon exercise of the Warrants, and use its commercially reasonable efforts to cause the Registration Statement to become effective within 120 days after such closing. The Company agrees to make such filings as are necessary to keep the Registration Statement effective until the earlier of (A) the date that the investors have completed the distribution related to the Common Stock, or (B) such time that all Common Stock then held by the investors (including shares of Common Stock issuable upon conversion of Preferred Stock held by the investors) can be sold without compliance with the registration requirements of the Securities Act pursuant to Rule 144(k) under the Securities Act.
A-7 Liquidated Damages: In the event that the Company shall fail to cause the Registration Statement to be timely filed, timely declared effective, or to be kept effective (other than pursuant to customary permissible suspension periods), the Company shall pay as liquidated damages the amount of 1% per month of the aggregate purchase price for the securities remaining to be sold pursuant to the Registration Statement or such lesser amount that is the maximum permitted under applicable SBA rules and regulations. In the event that the Company's Common Stock is no longer registered under the Securities Exchange Act of 1934, as amended following completion of the First Closing, or for any reason the Company does not register for resale all shares of Common into which the Convertible Preferred converts, as provided for above, Investor and each Other Investor shall have the following registration rights with respect to the Common Stock into which such investor's Convertible Preferred converts: (1) Demand Registration Rights. If, at any time after the initial purchase of the Convertible Preferred Stock, holders of at least 20% of the Common Stock issued or issuable upon conversion of the Convertible Preferred Stock request that the Company file a Registration Statement covering at least 10% of the Common issued or issuable upon conversion of the Convertible Preferred (or any lesser percentage if the anticipated aggregate offering price would exceed $2,000,000), the Company shall cause the shares attributable to the Convertible Preferred Stock to be registered. The Company shall not be obligated to effect more than two registrations per year under these demand right provisions. (2) Registration on Form S-3: Holders of Common issued or issuable upon conversion of the Convertible Preferred Stock shall have the right to require the Company to file unlimited Registration Statements on Form S-3 (or any equivalent successor form), provided the Company is otherwise eligible to use Form S-3 for such a registration and the anticipated aggregate offering price in each registration on Form S-3 exceeds $1,000,000. (3) Piggy-Back Registration: Holders of Common issued or issuable upon conversion of the Convertible Preferred Stock shall be entitled to unlimited 'piggy-back' registration rights on all registrations of the Company. (4) Transfer of Registration Rights: The registration rights may be transferred to any transferee permitted under applicable Federal and state securities laws, provided that the Company is given written notice thereof and provided that the transferee agrees in writing to be bound by the terms of the stock purchase agreement and other agreements relating to this transaction.
A-8 (5) Costs: The Company shall bear all expenses relating to all such preparation and filings. (6) Indemnification: The Company shall provide the Investors with the maximum indemnification allowed under applicable law with regard to the registration rights. Regulatory Costs The Company shall be responsible for completing and shall bear all costs associated with all regulatory filings that are necessary in connection with the transactions described herein, including, without limitation, U.S. Securities and Exchange Commission filings (whether these filings are made by the Company, the purchasers of the Convertible Preferred Stock or their affiliates), blue sky filings and/or other necessary filings under applicable securities market or exchange rules and regulations. Board of Directors: The authorized number of directors shall be seven (7). Four (4) of the seven directors shall be designated by the holders of a majority of the Convertible Preferred Stock, two (2) of the directors shall be outsiders with significant industry experience who are reasonably acceptable to the holders of a majority of the Convertible Preferred Stock, and one (1) of the directors shall be the CEO of the Company. D&O Insurance: As promptly as practicable after the First Closing, the Company shall use best efforts to obtain and maintain in force $10 million in director and officer liability insurance coverage. SBA Provisions: The Company shall make such representations, warranties and covenants, and shall provide such documentation and information rights as may be necessary (e.g., certification that at the time of Investor's investment the Company is a "small" business, has the majority of its operations in the US, and is not engaged in oil and gas exploration, movie production or certain other prohibited activities), to satisfy the requirements of the SBA in regard to investment by Investor in the Company. Documentation: The purchase of the Convertible Preferred Stock shall be made pursuant to a Stock Purchase Agreement, Investor Rights Agreement, Voting Agreement (if applicable) and Amended and Restated Certificate of Incorporation (or if appropriate, certificate of designation) to be drafted by counsel to the Investor. Such agreements and other documents shall contain, among other things, appropriate representations and warranties (including, without limitation, reps and warranties concerning the Intellectual Property, the financial condition of the Company, the absence of litigation or threats thereof, and full disclosure of all material information), covenants, protective provisions, and conditions of closing including those noted above.
A-9 Miscellaneous: Customary provisions, including applicable law (Delaware), severability, assignment (except as provided under the rights of first refusal above, holders of Convertible Preferred Stock shall be free to assign or transfer their Convertible Preferred Stock or rights hereunder to any party permitted under applicable federal and state securities laws, as long as transferee agrees to the terms and obligations of the Convertible Preferred Stock, respectively), etc. Transaction Expenses: The Company shall pay, reimburse or otherwise satisfy, upon demand of Investor, all fees, costs and expenses incurred and/or undertaken by Investor relating to the preparation for, development of and implementation of the Recapitalization Plan set forth in the Recapitalization Agreement, including, without limitation, all due diligence expenses and all expenses relating to the Bridge Funding and the Anticipated Equity Financing and the transactions contemplated hereby and by the Recapitalization Agreement and the documentation of all of the foregoing (including, without limitation all legal fees and expenses). This obligation shall apply regardless of whether or not all of the transactions contemplated in the Recapitalization Agreement close. At each closing of the Anticipated Equity Financing, at Investor's sole discretion, and with respect to any or all of such fees, costs and expenses accrued through such closing, the Company shall (a) pay Investor in cash concurrently with such closing (or at Investor's sole discretion, Investor may withhold such amount from the wire of investments proceeds), (b) issue a promissory note in the form of the Notes in principal amount equal to such fees, costs and expenses; or (c) treat such fees, costs and expenses as an unsecured payable. At any time following such closing, Investor may require any amounts that it elected to have the Company treat as unsecured amounts payable to be paid in cash or satisfied by issuance of a Note in the principal amount of some or all of such unsecured obligation. Cross-default: The Company acknowledges that the financing contemplated by this term sheet is part of an integrated Recapitalization Plan, as set forth in the Recapitalization Agreement. The Company further acknowledges and agrees that this term sheet is subject to all terms and conditions set forth in the Recapitalization Agreement and the other Related Recapitalization Documents and that the Recapitalization Agreement and the other Related Recapitalization Documents are subject to all terms and conditions set forth in this Term Sheet. The Company agrees that any default by the Company under any provision of this Term Sheet, the Recapitalization Agreement or any of the other Related Recapitalization Documents will constitute a default under this Term Sheet, each other Related Recapitalization Document and the Recapitalization Agreement. Standstill/exclusivity: The standstill/exclusivity provision in the Recapitalization Agreement shall remain in full force and effect during the Equity Financing Period. Termination The Company's obligations to issue any securities in connection with the Anticipated Equity Financing may terminate only in accordance with Section 3.2 of the Recapitalization Agreement; however, such termination shall not have any
A-10 impact on the other rights and obligations of the parties under the Recapitalization Agreement or the Related Recapitalization Documents, except as explicitly set forth in Section 3.2 of the Recapitalization Agreement. No Offer For purposes of applicable securities laws, this Term Sheet does not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein. Binding Agreement This Term Sheet constitutes a binding commitment on the part of the Company. The obligations of Investor and Other Investors under this Term Sheet are subject to the conditions contained herein and in the Related Recapitalization Documents.
AGREED AND ACCEPTED: TOUCAN CAPITAL FUND II, LP NORTHWEST BIOTHERAPEUTICS, INC. By: /s/ Linda Powers By: /s/ Alton Boynton --------------------------------- ------------------------------------ Name: Linda F. Powers Name: Alton Boynton Title: Managing Director Title: President Date: October 22, 2004 Date: October 22, 2004 A-11 AMENDMENT TO AMENDED AND RESTATED BINDING TERM SHEET This AMENDMENT TO AMENDED AND RESTATED BINDING TERM SHEET (this "AMENDMENT") is made effective as of December 27, 2004 by and between NORTHWEST BIOTHERAPEUTICS, INC., a Delaware corporation (the "COMPANY"), and TOUCAN CAPITAL FUND II, L.P., a Delaware limited partnership ("TOUCAN"). RECITALS WHEREAS, the Company and Toucan are party to that certain Binding Convertible Preferred Stock Term Sheet originally dated April 26, 2004 and amended and restated on October 22, 2004 (as so amended and restated, the "CONVERTIBLE PREFERRED STOCK TERM SHEET"). WHEREAS, concurrently herewith, the Company and its affiliates, if any, and Toucan and its designees, are entering into Amendment No. 3 (the "THIRD AMENDMENT") to that certain Amended and Restated Recapitalization Agreement by and between the parties thereto; and WHEREAS, in connection with the Third Amendment, the Company and Toucan desire to amend the Convertible Preferred Stock Term Sheet as provided herein. AGREEMENT NOW, THEREFORE, for and in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Toucan agree as follows: 1. The paragraph of the Convertible Preferred Stock Term Sheet entitled "Warrants:" is hereby amended and restated in its entirety as follows: "The Company shall issue $6.75 million in warrant coverage on the first $6.75 million Convertible Preferred Stock purchased for cash (the "Preferred Stock Warrants"). Preferred Stock Warrants shall not be issued upon conversion of notes, exercise of warrants, or other conversion or exercise. The number of warrants to be so issued shall be determined on the basis of $0.10 per share. If the total of $6.75 million is invested in Convertible Preferred Stock, the number of warrants issued shall be exercisable for 67.5 million shares of Convertible Preferred Stock. The exercise price of such Preferred Stock Warrants shall be the lesser of $0.10 per share (subject to adjustment for stock splits, stock dividends and the like) and 35% discount to the average closing price during the twenty trading days prior to the First Closing; provided, however, that in no event will the exercise price be less than $.04 per share (subject to adjustment for stock splits, stock dividends and the like). The exercise period shall commence upon issuance of the Preferred Stock Warrants, and shall continue for a period of seven (7) years after their respective issuance dates." 2. The thirteenth bullet in the paragraph entitled "Conditions to Closing" of the Convertible Preferred Stock term Sheet is hereby deleted in its entirety and shall not be a condition precedent to the obligation of any Investor to Purchase Convertible Preferred Stock from the Company. 3. Unless specifically modified or changed by the terms of this Amendment, all terms and conditions of the Convertible Preferred Stock Term Sheet shall remain in effect and shall apply fully as described and set forth in the Convertible Preferred Stock Term Sheet. 4. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK] 2. The Company and Toucan have executed this AMENDMENT TO AMENDED AND RESTATED BINDING TERM SHEET as of the day and year first written above. TOUCAN CAPITAL FUND II, L.P. NORTHWEST BIOTHERAPEUTICS, INC. By: /s/ Linda Powers By: /s/ Alton Boynton --------------------------------- ------------------------------------ Name: Linda Powers Name: Alton L. Boynton Title: Managing Director Title: President 3. SECOND AMENDMENT TO AMENDED AND RESTATED BINDING TERM SHEET This SECOND AMENDMENT TO AMENDED AND RESTATED BINDING TERM SHEET (this "AMENDMENT") is made effective as of January 26, 2005 by and between NORTHWEST BIOTHERAPEUTICS, INC., a Delaware corporation (the "COMPANY"), and TOUCAN CAPITAL FUND II, L.P., a Delaware limited partnership ("TOUCAN"). RECITALS WHEREAS, the Company and Toucan are party to that certain Binding Convertible Preferred Stock Term Sheet originally dated April 26, 2004 and amended and restated on October 22, 2004 as further amended on December 27, 2004 (the "CONVERTIBLE PREFERRED STOCK TERM SHEET"). WHEREAS, concurrently herewith, the Company and its affiliates, if any, and Toucan and its designees, are entering into Amendment No. 4 (the "FOURTH AMENDMENT") to that certain Amended and Restated Recapitalization Agreement by and between the parties thereto; and WHEREAS, in connection with the Fourth Amendment, the Company and Toucan desire to amend the Convertible Preferred Stock Term Sheet as provided herein. AGREEMENT NOW, THEREFORE, for and in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Toucan agree as follows: 1. The paragraph of the Convertible Preferred Stock Term Sheet entitled "Board of Directors:" is hereby amended and restated in its entirety as follows: "The authorized number of directors shall initially be one (1). The authorized number of directors may not be increased or decreased without the consent of the holders of a majority of the shares of Convertible Preferred Stock. The holders of a majority of the shares of Convertible Preferred Stock, acting in their sole discretion, may require the Company to increase the total number of authorized directors at any time following the first closing of the Convertible Preferred Stock, up to a maximum of seven (7) directors. Subject to the limitation in the following sentence, any newly created directorships shall be designated by the holders of a majority of the shares of Convertible Preferred Stock, acting in their sole discretion, to be filled by either: (i) an outside director with significant industry experience, who is reasonably acceptable to the holders of a majority of the Convertible Preferred Stock, to be elected by the holders of the Company's Common Stock (which may, subject to applicable law, the Certificate of Incorporation or the Bylaws, be filled initially by vote of the remaining director(s)) (a "COMMON DIRECTORSHIP"); or (ii) a director to be designated by the holders of a majority of the Convertible Preferred Stock (a "PREFERRED DIRECTORSHIP"). Notwithstanding the foregoing, no more than four (4) directorships shall be designated as Preferred Directorships, no more than two (2) directorships shall be designated as Common Directorships, and one (1) director shall be the chief executive officer of the Company." 2. Unless specifically modified or changed by the terms of this Amendment, all terms and conditions of the Convertible Preferred Stock Term Sheet shall remain in effect and shall apply fully as described and set forth in the Convertible Preferred Stock Term Sheet. 3. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK] 2. The Company and Toucan have executed this SECOND AMENDMENT TO AMENDED AND RESTATED BINDING TERM SHEET as of the day and year first written above. TOUCAN CAPITAL FUND II, L.P. NORTHWEST BIOTHERAPEUTICS, INC. By: /s/ Linda Powers By: /s/ Alton Boynton --------------------------------- ------------------------------------ Name: Linda Powers Name: Alton L. Boynton Title: Managing Director Title: President 3. THIRD AMENDMENT TO AMENDED AND RESTATED BINDING TERM SHEET This THIRD AMENDMENT TO AMENDED AND RESTATED BINDING TERM SHEET (this "AMENDMENT") is made effective as of April 12, 2005 by and between NORTHWEST BIOTHERAPEUTICS, INC., a Delaware corporation (the "COMPANY"), and TOUCAN CAPITAL FUND II, L.P., a Delaware limited partnership ("TOUCAN"). RECITALS WHEREAS, the Company and Toucan are party to that certain Binding Convertible Preferred Stock Term Sheet originally dated April 26, 2004 and amended and restated on October 22, 2004 as further amended on December 27, 2004 and January 26, 2005 (the "CONVERTIBLE PREFERRED STOCK TERM SHEET"). WHEREAS, concurrently herewith, the Company and its affiliates, if any, and Toucan and its designees, are entering into Amendment No. 5 (the "FIFTH AMENDMENT") to that certain Amended and Restated Recapitalization Agreement by and between the parties thereto; and WHEREAS, in connection with the Fifth Amendment, the Company and Toucan desire to amend the Convertible Preferred Stock Term Sheet as provided herein. AGREEMENT NOW, THEREFORE, for and in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Toucan agree as follows: 1. The paragraph of the Convertible Preferred Stock Term Sheet entitled "Warrants:" is hereby amended and restated in its entirety as follows: "The Company shall issue $6.3 million in warrant coverage on the first $6.3 million Convertible Preferred Stock purchased for cash (the "Preferred Stock Warrants"). Preferred Stock Warrants shall not be issued upon conversion of notes, exercise of warrants, or other conversion or exercise. The number of warrants to be so issued shall be determined on the basis of $0.10 per share. If the total of $6.3 million is invested in Convertible Preferred Stock, the number of warrants issued shall be exercisable for 63 million shares of Convertible Preferred Stock. The exercise price of such Preferred Stock Warrants shall be $.04 per share (subject to adjustment for stock splits, stock dividends and the like). The exercise period shall commence upon issuance of the Preferred Stock Warrants, and shall continue for a period of seven (7) years after their respective issuance dates." 2. Unless specifically modified or changed by the terms of this Amendment, all terms and conditions of the Convertible Preferred Stock Term Sheet shall remain in effect and shall apply fully as described and set forth in the Convertible Preferred Stock Term Sheet. 3. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK] 2. The Company and Toucan have executed this THIRD AMENDMENT TO AMENDED AND RESTATED BINDING TERM SHEET as of the day and year first written above. TOUCAN CAPITAL FUND II, L.P. NORTHWEST BIOTHERAPEUTICS, INC. By: /s/ Linda Powers By: /s/ Alton Boynton --------------------------------- ------------------------------------ Name: Linda Powers Name: Alton L. Boynton Title: Managing Director Title: President 3. FOURTH AMENDMENT TO AMENDED AND RESTATED BINDING TERM SHEET This FOURTH AMENDMENT TO AMENDED AND RESTATED BINDING TERM SHEET (this "AMENDMENT") is made effective as of May 13, 2005 by and between NORTHWEST BIOTHERAPEUTICS, INC., a Delaware corporation (the "COMPANY"), and TOUCAN CAPITAL FUND II, L.P., a Delaware limited partnership ("TOUCAN"). RECITALS WHEREAS, the Company and Toucan are party to that certain Binding Convertible Preferred Stock Term Sheet originally dated April 26, 2004 and amended and restated on October 22, 2004 as further amended on December 27, 2004, January 26, 2005 and April 12, 2005 (the "CONVERTIBLE PREFERRED STOCK TERM SHEET"). WHEREAS, concurrently herewith, the Company and its affiliates, if any, and Toucan and its designees, are entering into Amendment No. 6 (the "SIXTH AMENDMENT") to that certain Amended and Restated Recapitalization Agreement by and between the parties thereto; and WHEREAS, in connection with the Sixth Amendment, the Company and Toucan desire to amend the Convertible Preferred Stock Term Sheet as provided herein. AGREEMENT NOW, THEREFORE, for and in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Toucan agree as follows: 1. The paragraph of the Convertible Preferred Stock Term Sheet entitled "Warrants:" is hereby amended and restated in its entirety as follows: "The Company shall issue $5.85 million in warrant coverage on the first $5.85 million Convertible Preferred Stock purchased for cash (the "Preferred Stock Warrants"). Preferred Stock Warrants shall not be issued upon conversion of notes, exercise of warrants, or other conversion or exercise. The number of warrants to be so issued shall be determined on the basis of $0.10 per share. If the total of $5.85 million is invested in Convertible Preferred Stock, the number of warrants issued shall be exercisable for 58.5 million shares of Convertible Preferred Stock. The exercise price of such Preferred Stock Warrants shall be $.04 per share (subject to adjustment for stock splits, stock dividends and the like). The exercise period shall commence upon issuance of the Preferred Stock Warrants, and shall continue for a period of seven (7) years after their respective issuance dates." 2. Unless specifically modified or changed by the terms of this Amendment, all terms and conditions of the Convertible Preferred Stock Term Sheet shall remain in effect and shall apply fully as described and set forth in the Convertible Preferred Stock Term Sheet. 3. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK] The Company and Toucan have executed this FOURTH AMENDMENT TO AMENDED AND RESTATED BINDING TERM SHEET as of the day and year first written above. TOUCAN CAPITAL FUND II, L.P. NORTHWEST BIOTHERAPEUTICS, INC. By: By: --------------------------------- ------------------------------------ Name: Linda Powers Name: Alton L. Boynton Title: Managing Director Title: President FIFTH AMENDMENT TO AMENDED AND RESTATED BINDING TERM SHEET This FIFTH AMENDMENT TO AMENDED AND RESTATED BINDING TERM SHEET (this "AMENDMENT") is made effective as of June 16, 2005 by and between NORTHWEST BIOTHERAPEUTICS, INC., a Delaware corporation (the "COMPANY"), and TOUCAN CAPITAL FUND II, L.P., a Delaware limited partnership ("TOUCAN"). RECITALS WHEREAS, the Company and Toucan are party to that certain Binding Convertible Preferred Stock Term Sheet originally dated April 26, 2004 and amended and restated on October 22, 2004 as further amended on December 27, 2004, January 26, 2005, April 12, 2005 and May 13, 2005 (the "CONVERTIBLE PREFERRED STOCK TERM SHEET"). WHEREAS, concurrently herewith, the Company and its affiliates, if any, and Toucan and its designees, are entering into Amendment No. 7 (the "SEVENTH AMENDMENT") to that certain Amended and Restated Recapitalization Agreement by and between the parties thereto; and WHEREAS, in connection with the Seventh Amendment, the Company and Toucan desire to amend the Convertible Preferred Stock Term Sheet as provided herein. AGREEMENT NOW, THEREFORE, for and in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Toucan agree as follows: 1. The paragraph of the Convertible Preferred Stock Term Sheet entitled "Warrants:" is hereby amended and restated in its entirety as follows: "The Company shall issue $5.35 million in warrant coverage on the first $5.35 million Convertible Preferred Stock purchased for cash (the "Preferred Stock Warrants"). Preferred Stock Warrants shall not be issued upon conversion of notes, exercise of warrants, or other conversion or exercise. The number of warrants to be so issued shall be determined on the basis of $0.10 per share. If the total of $5.35 million is invested in Convertible Preferred Stock, the number of warrants issued shall be exercisable for 53.5 million shares of Convertible Preferred Stock. The exercise price of such Preferred Stock Warrants shall be $.04 per share (subject to adjustment for stock splits, stock dividends and the like). The exercise period shall commence upon issuance of the Preferred Stock Warrants, and shall continue for a period of seven (7) years after their respective issuance dates." 2. Unless specifically modified or changed by the terms of this Amendment, all terms and conditions of the Convertible Preferred Stock Term Sheet shall remain in effect and shall apply fully as described and set forth in the Convertible Preferred Stock Term Sheet. 3. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK] 2. The Company and Toucan have executed this FIFTH AMENDMENT TO AMENDED AND RESTATED BINDING TERM SHEET as of the day and year first written above. TOUCAN CAPITAL FUND II, L.P. NORTHWEST BIOTHERAPEUTICS, INC. By: By: --------------------------------- ------------------------------------ Name: Linda Powers Name: Alton L. Boynton Title: Managing Director Title: President 3. SIXTH AMENDMENT TO AMENDED AND RESTATED BINDING TERM SHEET This SIXTH AMENDMENT TO AMENDED AND RESTATED BINDING TERM SHEET (this "AMENDMENT") is made effective as of July 26, 2005 by and between NORTHWEST BIOTHERAPEUTICS, INC., a Delaware corporation (the "COMPANY"), and TOUCAN CAPITAL FUND II, L.P., a Delaware limited partnership ("TOUCAN"). RECITALS WHEREAS, the Company and Toucan are party to that certain Binding Convertible Preferred Stock Term Sheet originally dated April 26, 2004 and amended and restated on October 22, 2004 as further amended on December 27, 2004, January 26, 2005, April 12, 2005, May 13, 2005 and June 16, 2005 (the "CONVERTIBLE PREFERRED STOCK TERM SHEET"). 1 WHEREAS, concurrently herewith, the Company and its affiliates, if any, and Toucan and its designees, are entering into Amendment No. 8 (the "EIGHTH AMENDMENT") to that certain Amended and Restated Recapitalization Agreement by and between the parties thereto; and WHEREAS, in connection with the Eighth Amendment, the Company and Toucan desire to amend the Convertible Preferred Stock Term Sheet as provided herein. AGREEMENT NOW, THEREFORE, for and in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Toucan agree as follows: 1. The paragraph of the Convertible Preferred Stock Term Sheet entitled "Subsequent Closings:" is hereby amended by replacing the phrase "12 months after the First Closing" with "December 31, 2006 (or such later date as is mutually agreed by the parties hereto)" in the first sentence thereof. 2. The paragraph of the Convertible Preferred Stock Term Sheet entitled "Warrants:" is hereby amended and restated in its entirety as follows: "The Company shall issue $4.85 million in warrant coverage on the first $4.85 million Convertible Preferred Stock purchased for cash (the "Preferred Stock Warrants"). Preferred Stock Warrants shall not be issued upon conversion of notes, exercise of warrants, or other conversion or exercise. The number of warrants to be so issued shall be determined on the basis of $0.10 per share. If the total of $4.85 million is invested in Convertible Preferred Stock, the number of warrants issued shall be exercisable for 48.5 million shares of Convertible Preferred Stock. The exercise price of such Preferred Stock Warrants shall be $.04 per share (subject to adjustment for stock splits, stock dividends and the like). The exercise period shall commence upon issuance of the Preferred Stock Warrants, and shall continue for a period of seven (7) years after their respective issuance dates." 3. Unless specifically modified or changed by the terms of this Amendment, all terms and conditions of the Convertible Preferred Stock Term Sheet shall remain in effect and shall apply fully as described and set forth in the Convertible Preferred Stock Term Sheet. 4. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK] 2 The Company and Toucan have executed this SIXTH AMENDMENT TO AMENDED AND RESTATED BINDING TERM SHEET as of the day and year first written above. TOUCAN CAPITAL FUND II, L.P. NORTHWEST BIOTHERAPEUTICS, INC. By: By: --------------------------------- ------------------------------------ Name: Linda Powers Name: Alton L. Boynton Title: Managing Director Title: President 3 SEVENTH AMENDMENT TO AMENDED AND RESTATED BINDING TERM SHEET This SEVENTH AMENDMENT TO AMENDED AND RESTATED BINDING TERM SHEET (this "AMENDMENT") is made effective as of September 7, 2005 by and between NORTHWEST BIOTHERAPEUTICS, INC., a Delaware corporation (the "COMPANY"), and TOUCAN CAPITAL FUND II, L.P., a Delaware limited partnership ("TOUCAN"). RECITALS WHEREAS, the Company and Toucan are party to that certain Binding Convertible Preferred Stock Term Sheet originally dated April 26, 2004 and amended and restated on October 22, 2004 as further amended on December 27, 2004, January 26, 2005, April 12, 2005, May 13, 2005, June 16, 2005 and July 26, 2005 (the "CONVERTIBLE PREFERRED STOCK TERM SHEET"). WHEREAS, concurrently herewith, the Company and its affiliates, if any, and Toucan and its designees, are entering into Amendment No. 9 (the "NINTH AMENDMENT") to that certain Amended and Restated Recapitalization Agreement by and between the parties thereto; and WHEREAS, in connection with the Ninth Amendment, the Company and Toucan desire to amend the Convertible Preferred Stock Term Sheet as provided herein. AGREEMENT NOW, THEREFORE, for and in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Toucan agree as follows: 1. The paragraph of the Convertible Preferred Stock Term Sheet entitled "Warrants:" is hereby amended and restated in its entirety as follows: "The Company shall issue $4.35 million in warrant coverage on the first $4.35 million Convertible Preferred Stock purchased for cash (the "Preferred Stock Warrants"). Preferred Stock Warrants shall not be issued upon conversion of notes, exercise of warrants, or other conversion or exercise. The number of warrants to be so issued shall be determined on the basis of $0.10 per share. If the total of $4.35 million is invested in Convertible Preferred Stock, the number of warrants issued shall be exercisable for 43.5 million shares of Convertible Preferred Stock. The exercise price of such Preferred Stock Warrants shall be $.04 per share (subject to adjustment for stock splits, stock dividends and the like). The exercise period shall commence upon issuance of the Preferred Stock Warrants, and shall continue for a period of seven (7) years after their respective issuance dates." 2. Unless specifically modified or changed by the terms of this Amendment, all terms and conditions of the Convertible Preferred Stock Term Sheet shall remain in effect and shall apply fully as described and set forth in the Convertible Preferred Stock Term Sheet. 3. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK] 1 The Company and Toucan have executed this SEVENTH AMENDMENT TO AMENDED AND RESTATED BINDING TERM SHEET as of the day and year first written above. TOUCAN CAPITAL FUND II, L.P. NORTHWEST BIOTHERAPEUTICS, INC. By: By: --------------------------------- ------------------------------------ Name: Linda Powers Name: Alton L. Boynton Title: Managing Director Title: President 2 EIGHTH AMENDMENT TO AMENDED AND RESTATED BINDING TERM SHEET This EIGHTH AMENDMENT TO AMENDED AND RESTATED BINDING TERM SHEET (this "AMENDMENT") is made effective as of November 14, 2005 by and between NORTHWEST BIOTHERAPEUTICS, INC., a Delaware corporation (the "COMPANY"), and TOUCAN CAPITAL FUND II, L.P., a Delaware limited partnership ("TOUCAN"). RECITALS WHEREAS, the Company and Toucan are party to that certain Binding Convertible Preferred Stock Term Sheet originally dated April 26, 2004 and amended and restated on October 22, 2004 as further amended on December 27, 2004, January 26, 2005, April 12, 2005, May 13, 2005, June 16, 2005, July 26, 2005 and September 7, 2005 (the "CONVERTIBLE PREFERRED STOCK TERM SHEET"). WHEREAS, concurrently herewith, the Company and its affiliates, if any, and Toucan and its designees, are entering into Amendment No. 10 (the "TENTH AMENDMENT") to that certain Amended and Restated Recapitalization Agreement by and between the parties thereto; and WHEREAS, in connection with the Tenth Amendment, the Company and Toucan desire to amend the Convertible Preferred Stock Term Sheet as provided herein. AGREEMENT NOW, THEREFORE, for and in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Toucan agree as follows: 1. The paragraph of the Convertible Preferred Stock Term Sheet entitled "Warrants:" is hereby amended and restated in its entirety as follows: "The Company shall issue $3.95 million in warrant coverage on the first $3.95 million Convertible Preferred Stock purchased for cash (the "Preferred Stock Warrants"). Preferred Stock Warrants shall not be issued upon conversion of notes, exercise of warrants, or other conversion or exercise. The number of warrants to be so issued shall be determined on the basis of $0.10 per share. If the total of $3.95 million is invested in Convertible Preferred Stock, the number of warrants issued shall be exercisable for 3.95 million shares of Convertible Preferred Stock. The exercise price of such Preferred Stock Warrants shall be $.04 per share (subject to adjustment for stock splits, stock dividends and the like). The exercise period shall commence upon issuance of the Preferred Stock Warrants, and shall continue for a period of seven (7) years after their respective issuance dates." 2. Unless specifically modified or changed by the terms of this Amendment, all terms and conditions of the Convertible Preferred Stock Term Sheet shall remain in effect and shall apply fully as described and set forth in the Convertible Preferred Stock Term Sheet. 3. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK] 1 The Company and Toucan have executed this EIGHTH AMENDMENT TO AMENDED AND RESTATED BINDING TERM SHEET as of the day and year first written above. TOUCAN CAPITAL FUND II, L.P. NORTHWEST BIOTHERAPEUTICS, INC. By: /s/ Linda Powers By: /s/ Alton L. Boynton --------------------------------- ------------------------------------ Name: Linda Powers Name: Alton L. Boynton Title: Managing Director Title: President
