Exhibit 10.3
THIS WARRANT AND THE UNDERLYING 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.
NORTHWEST BIOTHERAPEUTICS, INC.
WARRANT

      No. BW-2008-_____    October 1, 2008

This Certifies That, for value received, SDS Capital Group SPC, Ltd., with its
principal office in Old Greenwich, CT 06870, and/or its assigns (collectively,
the “Holder”), is entitled to subscribe for and purchase from Northwest
Biotherapeutics, Inc., a Delaware corporation, with its principal office in
Bethesda, Maryland (the “Company”), such number of Exercise Shares as provided
herein at the Exercise Price as provided herein. This Warrant is being issued
pursuant to the terms of that certain Loan Agreement and Promissory Note, of
even date herewith, by and among the Company and Holder (the “Note”).
1. Definitions. Capitalized terms used but not defined herein shall have the
meanings set forth in the Note, as applicable. As used herein, the following
terms shall have the following respective meanings:
(a) “Common Stock” shall mean the common stock of the Company, par value $0.001
per share.
(b) “Exercise Period” shall mean the period commencing on the date of issuance
of this Warrant and ending five (5) years after the date of issuance of this
Warrant.
(c) “Exercise Price” of this Warrant shall be equal to $0.53 per share, subject
to adjustment as provided herein.
(d) “Exercise Share” shall mean each of the 697,775 shares of Common Stock for
which this Warrant is exercisable.
2. Exercise of Warrant. This Warrant will be fully vested and exercisable upon
issuance. The rights represented by this Warrant may be exercised in whole or in
part at any time or times during the Exercise Period, by delivery of the
following to the Company at its address set forth above (or at such other
address as it may designate by notice in writing to the Holder):
(a) An executed Notice of Exercise in the form attached hereto;
(b) Payment of the Exercise Price either (i) in cash or by check, or (ii) by
cancellation of indebtedness; and
(c) This Warrant.

 

 

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Upon the exercise of the rights represented by this Warrant, a certificate or
certificates for the Exercise Shares so purchased, registered in the name of the
Holder or Holder’s designee(s), shall be issued and delivered to the Holder
within a reasonable time after the rights represented by this Warrant shall have
been so exercised. In the event that this Warrant is being exercised for less
than all of the then-current number of Exercise Shares purchasable hereunder,
the Company shall, concurrently with the issuance by the Company of the number
of Exercise Shares for which this Warrant is then being exercised, issue a new
Warrant exercisable for the remaining number of Exercise Shares purchasable
hereunder.
The person in whose name any certificate or certificates for Exercise Shares are
to be issued upon exercise of this Warrant shall be deemed to have become the
holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Exercise Price was made, irrespective of the date
of delivery of such certificate or certificates, except that, if the date of
such surrender and payment is a date when the stock transfer books of the
Company are closed, such person shall be deemed to have become the holder of
such shares at the close of business on the next succeeding date on which the
stock transfer books are open.
2.1 Net (Cashless) Exercise. Notwithstanding any provisions herein to the
contrary, if the fair market value of one Exercise Share is greater than the
Exercise Price (at the date of calculation as set forth below), in lieu of
exercising this Warrant by payment of cash, the Holder may elect to receive
shares equal to the value (as determined below) of this Warrant (or the portion
thereof being canceled) by surrender of this Warrant at the principal office of
the Company together with the properly endorsed Notice of Exercise in which
event the Company shall issue to the Holder a number of Exercise Shares computed
using the following formula:

     
 
  X = Y (A-B)
           A
 
   
Where X =
  the number of Exercise Shares to be issued to the Holder
 
   
Y =
  the number of Exercise Shares purchasable under the Warrant or, if only a
portion of the Warrant is being exercised, that portion of the Warrant being
canceled (at the date of such calculation)
 
   
A =
  the fair market value of one Exercise Share (at the date of such calculation)
 
   
B =
  Exercise Price (as adjusted to the date of such calculation)

For purposes of the above calculation, the fair market value of one Exercise
Share shall be determined by the Company’s Board of Directors in good faith;
provided, however, that in the event that this Warrant is exercised pursuant to
this Section 2.1 in connection with a public offering of Common Stock, the fair
market value per share shall be the product of (i) the per share offering price
to the public in such public offering, and (ii) the number of shares of Common
Stock into which each Exercise Share is convertible at the time of such
exercise.

 

2.

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2.2 Securities for Which Warrant is Exercisable. This Warrant shall be
exercisable, in whole or in part, and from time to time, for Common Stock of the
Company.
3. Covenants of the Company.
3.1 Covenants as to Exercise Shares. The Company covenants and agrees that all
Exercise Shares that may be issued upon the exercise of the rights represented
by this Warrant will, upon issuance, be validly issued and outstanding, fully
paid and nonassessable, and free from all taxes, liens and charges with respect
to the issuance thereof. The Company further covenants and agrees that the
Company will at all times during the Exercise Period, have authorized and
reserved, free from preemptive rights, a sufficient number of shares of Common
Stock to provide for the exercise of the rights represented by this Warrant. If
at any time during the Exercise Period the number of authorized but unissued
shares of Common Stock shall not be sufficient to permit exercise of this
Warrant, then, in addition to such other remedies as may be available to Holder,
including, without limitation, pursuant to the Note, the Company will take such
corporate action as shall be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purposes.
3.2 Notices of Record Date. In the event of any taking by the Company of a
record of the holders of any class of securities for the purpose of determining
the holders thereof who are entitled to receive any dividend or other
distribution, the Company shall mail to the Holder, at least ten (10) days prior
to the date specified herein, a notice specifying the date on which any such
record is to be taken for the purpose of such dividend or distribution.
3.3 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 this
Warrant, 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 this Warrant and in
taking all such action as may be necessary or appropriate to protect Holder’s
rights, preferences and privileges under and/or in connection with this Warrant
against impairment. The Holder’s rights, preferences and privileges granted
under and/or in connection with this Warrant may not be amended, modified or
waived without the Holder’s prior written consent, and the documentation
providing for such rights, preferences and privileges will specifically provide
as such.
3.4 Registration Rights. The Company will use commercially reasonable best
efforts to obtain treatment of the Exercise Shares as “registrable securities”
(or terms of similar impact) under any agreement executed by the Company for
financing of the Company, for purposes of providing registration rights under
the Securities Act of 1933, as amended (the “Act”) to holders of the Warrant
and/or Common Stock issued pursuant to exercise of the Warrant.

 

3.

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4. Representations of Holder.
4.1 Acquisition of Warrant for Personal Account. The Holder represents and
warrants that it is acquiring the Warrant and the Exercise Shares solely for its
account for investment and not with a view to or for sale or distribution of
said Warrant or Exercise Shares, or any part thereof, except in compliance with
applicable federal and state securities laws. The Holder also represents and
warrants that the all legal and beneficial interests in the Warrant and the
Exercise Shares which the Holder is acquiring are being acquired for, and will
be held for, its account only.
4.2 Securities Are Not Registered.
(a) The Holder understands that the Warrant and the Exercise Shares have not
been registered under the Act on the basis that no distribution or public
offering of the stock of the Company is to be effected by the Holder. The Holder
realizes that the basis for the exemption may not be present if, notwithstanding
its representations, the Holder has a present intention of acquiring the
securities for a fixed or determinable period in the future, selling (in
connection with a distribution or otherwise), granting any participation in, or
otherwise distributing the securities. The Holder represents and warrants that
it has no such present intention.
(b) The Holder recognizes that the Warrant and the Exercise Shares must be held
indefinitely unless they are subsequently registered under the Act or an
exemption from such registration is available.
(c) The Holder is aware that neither the Warrant nor the Exercise Shares may be
sold pursuant to Rule 144 adopted under the Act unless certain conditions are
met, including, among other things, the availability of certain current public
information about the Company, the resale following the required holding period
under Rule 144 and the number of shares being sold during any three month period
not exceeding specified limitations.
4.3 Disposition of Warrant and Exercise Shares.
The Holder understands and agrees that all certificates evidencing the shares to
be issued to the Holder may bear the following legend:
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 THE
SECURITIES UNDER THE ACT OR UNLESS SUCH TRANSACTION IS IN COMPLIANCE WITH
APPLICABLE FEDERAL AND STATE SECURITIES LAWS.
4.4 Accredited Investor Status. The Holder is an “accredited investor” as
defined in Regulation D promulgated under the Act.
5. Adjustment of Exercise Price and Exercise Shares.
5.1 Changes in Securities. In the event of changes in the Common Stock by reason
of stock dividends, splits, recapitalizations, reclassifications, combinations
or exchanges of shares, separations, reorganizations, liquidations, or the like,
the number of Exercise Shares available under the Warrant in the aggregate and
the Exercise Price shall be correspondingly adjusted to give the Holder of the
Warrant, on exercise for the same aggregate Exercise Price, the same shares as
the Holder would have owned had the Warrant been exercised prior to the event
and had the Holder continued to hold such shares until after the event requiring
adjustment. For purposes of this Section 5, the “Aggregate Exercise Price” shall
mean the aggregate Exercise Price payable in connection with the exercise in
full of this Warrant. The form of this Warrant need not be changed because of
any adjustment in the number of Exercise Shares subject to this Warrant.

 

4.

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5.2 Certificate of Adjustments. Upon each adjustment of the Exercise Price
and/or Exercise Shares, the Company shall promptly notify the Holder in writing
and furnish the Holder with a certificate of its Chief Executive Officer or
Chief Financial Officer setting forth such adjustment and the facts upon which
such adjustment is based.
6. Fractional Shares. No fractional shares shall be issued upon the exercise of
this Warrant as a consequence of any adjustment pursuant hereto. All Exercise
Shares (including fractions) to be issued upon exercise of this Warrant shall be
aggregated for purposes of determining whether the exercise would result in the
issuance of any fractional share. If, after aggregation, the exercise would
result in the issuance of a fractional share, the Company shall, in lieu of
issuance of any fractional share, pay the Holder otherwise entitled to such
fraction a sum in cash equal to the product resulting from multiplying the then
current fair market value of one Exercise Share by such fraction.
7. Transfer of Warrant. Subject to applicable laws, this Warrant and all rights
hereunder are transferable, in whole or in part, at any time or times by the
Holder, upon delivery of this Warrant and the form of assignment attached hereto
to any transferee designated by Holder. The transferee shall sign a customary
investment letter in form and substance reasonably satisfactory to the Company.
8. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost,
stolen, mutilated or destroyed, the Company may, on such terms as to indemnity
or otherwise as it may reasonably impose (which shall, in the case of a
mutilated Warrant, include the surrender thereof), issue a new Warrant of like
denomination and tenor as the Warrant so lost, stolen, mutilated or destroyed.
Any such new Warrant shall constitute an original contractual obligation of the
Company, whether or not the allegedly lost, stolen, mutilated or destroyed
Warrant shall be at any time enforceable by anyone.
9. Amendment. Any term of this Warrant may be amended or waived only with the
written consent of the Company and the Holder.
10. Notices, etc. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given upon actual delivery to the
recipient. All communications shall be sent to the Company and to the Holder at
the addresses listed on the signature page hereof or at such other address as
the Company or Holder may designate by written notice to the other parties
hereto.

 

5.

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11. Governing Law. This Warrant and all rights, obligations and liabilities
hereunder shall be governed by and construed under the laws of the State of New
York as applied to agreements among New York residents, made and to be performed
entirely within the State of New York without giving effect to conflicts of laws
principles.
[Signature Page Follows]

 

6.

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In Witness Whereof, the Company has caused this Warrant to be executed by its
duly authorized officer as of the date first written above.

            Northwest Biotherapeutics, Inc.
      By:   /s/ Alton Boynton         Name:  Alton Boynton        Title: 
President         Address:  7600 Wisconsin Ave
Suite 750
Bethesda, MD 20814     

ACKNOWLEDGED AND AGREED:
SDS Capital GROUP SPC, LTD.

         
By:
  /s/ Steve Derby
 
   
 
  Name: Steve Derby    
 
  Title:   Chief Investment Officer    
 
           
Address: 53 Forest Avenue, Suite 201
Old Greenwich, CT 06870
   

[Signature Page to Warrant No. BW-2007-___]

 

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NOTICE OF EXERCISE
TO: Northwest Biotherapeutics, Inc.
(1) o The undersigned hereby elects to purchase  _____  shares of Common Stock
(the “Exercise Shares”) of Northwest Biotherapeutics, Inc. (the “Company”)
pursuant to the terms of the attached Warrant, and tenders herewith payment of
the exercise price in full, together with all applicable transfer taxes, if any.
o The undersigned hereby elects to purchase  _____  shares of Common Stock (the
“Exercise Shares”) of Northwest Biotherapeutics, Inc. (the “Company”) pursuant
to the terms of the net exercise provisions set forth in Section 2.1 of the
attached Warrant, and shall tender payment of all applicable transfer taxes, if
any.
(2) Please issue a certificate or certificates representing said Exercise Shares
in the name of the undersigned or in such other name as is specified below:

         
 
 
 
(Name)    
 
       
 
 
 
   
 
 
 
(Address)    

(3) The undersigned represents that (i) the aforesaid Exercise Shares are being
acquired for the account of the undersigned for investment and not with a view
to, or for resale in connection with, the distribution thereof and that the
undersigned has no present intention of distributing or reselling such shares,
except in accordance with applicable federal and state securities laws; (ii) the
undersigned is aware of the Company’s business affairs and financial condition
and has acquired sufficient information about the Company to reach an informed
and knowledgeable decision regarding its investment in the Company; (iii) the
undersigned is experienced in making investments of this type and has such
knowledge and background in financial and business matters that the undersigned
is capable of evaluating the merits and risks of this investment and protecting
the undersigned’s own interests; (iv) the undersigned understands that Exercise
Shares issuable upon exercise of this Warrant have not been registered under the
Securities Act of 1933, as amended (the “Securities Act”), by reason of a
specific exemption from the registration provisions of the Securities Act, which
exemption depends upon, among other things, the bona fide nature of the
investment intent as expressed herein, and, because such securities have not
been registered under the Securities Act, they must be held indefinitely unless
subsequently registered under the Securities Act or an exemption from such
registration is available; (v) the undersigned is aware that the aforesaid
Exercise Shares may not be sold pursuant to Rule 144 adopted under the
Securities Act unless certain conditions are met and until the undersigned has
held the shares for the number of years prescribed by Rule 144, that among the
conditions for use of the Rule is the availability of current information to the
public about the Company; and (vi) the undersigned agrees not to make any
disposition of all or any part of the aforesaid shares of Exercise Shares unless
and until there is then in effect a registration statement under the Securities
Act covering such proposed disposition or unless such transaction is in
compliance with applicable federal and state securities laws.

     
 
   
(Date)
  (Signature)
 
   
 
   
 
  (Print name)

 

1.

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ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and
supply required information. Do not use this form to
purchase shares.)
For Value Received, the foregoing Warrant and all rights evidenced thereby are
hereby assigned to

     
Name:
   
 
   
 
  (Please Print)
 
   
Address:
   
 
   
 
  (Please Print)

Dated:                     , 20__

         
Holder’s
       
Signature:
       
 
 
 
   
Holder’s
       
Address:
       
 
 
 
   

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatever. Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.

 

2.