UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C.
20549
FORM 10-Q/A
AMENDMENT NO. 1
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March
31, 2014
OR
| ¨ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ______to
_______
Commission File Number: 001-35737
NORTHWEST BIOTHERAPEUTICS, INC.
(Exact name of registrant
as specified in its charter)
Delaware
(State
or Other Jurisdiction of Incorporation or Organization)
|
94-3306718
(I.R.S.
Employer Identification No.) |
4800 Montgomery
Lane, Suite 800, Bethesda, MD 20814
(Address of principal
executive offices) (Zip Code)
(240) 497-9024
(Registrant's telephone
number)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes x No ¨
Indicate by check
mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting
company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting
company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ¨ |
Accelerated filer ¨ |
Non-accelerated filer ¨ |
Smaller reporting company x |
(do not check if a smaller reporting company) |
Indicate by check mark whether the Registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act) Yes ¨ No x
As of May 14, 2014,
the total number of shares of common stock, par value $0.001 per share, outstanding was 57,195,817.
NORTHWEST BIOTHERAPEUTICS, INC.
FORM 10-Q
EXPLANATORY NOTE
This Amendment No. 1 (“Amendment”)
on Form 10-Q/A amends the quarterly report on Form 10-Q of Northwest Biotherapeutics, Inc. (the “Company”) for the
period ended March 31, 2014, as filed with the Securities and Exchange Commission (the “Commission”) on May 15, 2014
(the “Form 10-Q”).
This Amendment is an exhibit-only filing solely for the purpose of filing revised versions of Exhibits 10.40,
10.41, 10.42 and 10.43. No revisions are being made to the Company’s financial statements and this Amendment does not reflect
events occurring after the filing of the Form 10-Q, or modify or update those disclosures that may be affected by subsequent events,
and no other changes are being made to any other disclosure contained in the Form 10-Q.
Part II - Other Information
Item 6. Exhibits
10.40* |
|
DCVax®-L Manufacturing and Services Agreement, dated January 17, 2014, by
and between Northwest Biotherapeutics, Inc. and Cognate BioServices, Inc. |
|
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10.41* |
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DCVax®-Direct Manufacturing and Services Agreement, dated January 17, 2014, by and between Northwest Biotherapeutics, Inc. and Cognate BioServices, Inc. |
|
|
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10.42* |
|
Ancillary Services Agreement, dated January 17, 2014, by and between Northwest Biotherapeutics, Inc. and Cognate BioServices, Inc. |
|
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10.43* |
|
Manufacturing Expansion Services Agreement, dated January 17, 2014, by and between Northwest Biotherapeutics, Inc. and Cognate BioServices, Inc. |
31.1 |
|
Certification of President (Principal Executive Officer and Principal Financial and Accounting Officer), Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| * | Confidential treatment has been requested with respect
to portions of this exhibit. Those portions have been omitted and filed separately with the SEC. |
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
|
NORTHWEST BIOTHERAPEUTICS, INC |
|
|
|
Dated: December 12, 2014 |
By: |
/s/ Linda M. Powers |
|
|
Name: |
Linda M. Powers |
|
|
Title: |
President and Chief Executive Officer |
|
|
|
Principal Executive Officer |
|
|
|
Principal Financial and Accounting Officer |
Exhibit 10.40
*Portions of this exhibit marked [*] are
requested to be treated confidentially.
DCVAX®-L MANUFACTURING AND SERVICES
AGREEMENT
This Amended and Restated
Services Agreement (this “Agreement”), originally dated April 1, 2011 is entered into, effective as of January 17,
2014 (the “Effective Date”), by and between Cognate BioServices, a Delaware corporation (Cognate”),
and Northwest Biotherapeutics, a Delaware corporation (“NW Bio”).
RECITALS
WHEREAS, NW Bio is in
the business of developing immune cell therapies for cancer, and Cognate is in the business of manufacturing clinical grade cellular
products on a contract services basis;
WHEREAS, NW Bio and Cognate
previously entered into a Services Agreement for the production of NW Bio’s DCVax® Products by Cognate (the “Prior
Services Agreement”) and a Conversion and Lock-Up Agreement (the “Lock-Up Agreement”);
WHEREAS, Cognate has
dedicated cGMP facilities and other facilities to NW Bio programs, and conducted all of NW Bio’s physical operations including
all collections of patient tumor tissues and leukapheresis materials from clinical sites, all manufacturing, quality control,
cryopreservation and banking of all DCVax® products, and all distribution and logistics to the point of care throughout the
US, [*].
WHEREAS, both the quantity
and the scope of services NW Bio has requested Cognate to provide greatly exceed the maximum amounts contemplated or provided
for in the Prior Services Agreement, and the parties have jointly determined that the Prior Services Agreement needs to be amended
accordingly, and certain services beyond the core manufacturing services need to be covered in separate agreements;
WHEREAS, Cognate has
delivered, and will continue to deliver during the Term of this Agreement, its invoices to NW Bio on a current monthly basis for
the services and facilities for NW Bio’s programs (collectively, the “Manufacturing Bills”);
[*]
WHEREAS, the parties
desire to provide incentivized compensation in consideration of entering into series of amended and new Services Agreements to
cover the increased amount of contract manufacturing and the wider range and increased amounts of related services by Cognate
for the manufacture, distribution and handling of DCVax®-L Products for clinical trials and for subsequent commercialization;
and
[*] Confidential treatment required; certain information omitted and filed separately with the SEC.
WHEREAS, the parties
also desire to update and reformulate their existing Services Agreement into a more comprehensive and complete set of four agreements
consisting of (i) this DCVax-L Manufacturing and Services Agreement, (ii) a new DCVax-Direct Manufacturing and Services Agreement,
(iii) a new Ancilliary Services Agreement, and (iv) a new Manufacturing Expansion Services Agreement;
WHEREAS, the parties
also desire to update their existing Quality Agreement associated with the manufacture of DCVax®-L and ensure that the new
or amended Services Agreements meet the requirements set forth in such Quality Agreement.
AGREEMENT
Now,
Therefore, in consideration of the foregoing recitals and the mutual promises, representations, warranties, and covenants
hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereby agree as follows:
SECTION 1: SERVICES
Cognate will provide
to NW Bio, on the terms and conditions set forth herein, Manufacturing Services as provided in Section 1.1. The Manufacturing
Services may be referred to herein as the “Services.” Under separate agreements, Cognate will also provide Ancillary
Services and Manufacturing Expansion Services as provided in Section 1.2.
1.1 Manufacturing
Services
1.1.1 Scope
of Manufacturing Services.
(A.) In the U.S.,
Cognate will provide Manufacturing Services for the production of DCVax®-L products for various cancers, including brain cancer
(the “DCVax®-L Product(s)”). Such Manufacturing Services, together with related Ancillary Services, will comprise
the services necessary for the production and release of the DCVax®-L Products for administration to human patients [*]. The
Manufacturing Services do not include any services after product release at Cognate’s cGMP manufacturing facility and delivery
by Cognate to the shipping company.
(B.) Outside the U.S.,
under the Prior Services Agreement Cognate has been providing extensive and ongoing technology transfer, technical support and
general management and oversight of third party providers and manufacturers, and the services required by NW Bio have been growing
and expanding substantially. Following the Effective Date of this Agreement, such services relating to third parties will be provided
under the separate agreements for Ancillary Services. [*]
[*] Confidential treatment required; certain information omitted and filed separately with the SEC.
1.1.2 Manufacturing
Services Capacity. Cognate will commit to providing the necessary facilities and personnel for production
of DCVax®-L Products for such number of Product Lots as is equal to the Maximum Product Lots for which NW Bio pays Facilities
Capacity Payments and Product and Supplies Fees pursuant to Section 2 hereof. If NW Bio requests production of DCVax®-L Products
in excess of the Maximum Product Lots, Cognate will use commercially reasonable efforts to accomplish such excess production as
requested, provided that NW Bio pays for such services in accordance with Section 2 hereof.
1.1.3 Regulatory
Standards. The Manufacturing Services will be carried out in accordance with current Good Manufacturing Practices (“cGMP”)
requirements established by the U.S. Food and Drug Administration (“FDA”), or the equivalent requirements established
by the applicable regulators outside the U.S.
1.2 Additional
Agreements
Certain additional services
relating to the DCVax-L program will be provided at NW Bio’s request under separate agreements. These include an Ancillary
Services Agreement and a Manufacturing Expansion Services Agreement. The Ancillary Services will include shipping distribution
and logistics services; cryopreservation and storage services; clinical support services; development and validation services;
recordkeeping services, and others. The Manufacturing Expansion Services will include oversight, management and support of third
party manufacturing outside the U.S., [*].
1.3 Quality
Agreement
Under the prior Services
Agreement, the parties had entered into a Quality Agreement establishing the quality standards to be met in DCVax®-L Products,
the requirements for product release, the respective roles and responsibilities of NWBO and Cognate in these processes, the standards
and procedures for the handling of any deviations from the usual quality standards or product release requirements, and/or any
complaints, the processes and allocation of responsibilities for reporting of these matters, and related subjects. Within one
hundred eighty (180) days after the Effective Date of this Agreement, the parties will update the existing Quality Agreement consistent
with the terms of this Agreement. Such updated Quality Agreement will be attached hereto as Exhibit A and incorporated
herein by reference.
SECTION 2: PAYMENTS
2.1 Payments
for Manufacturing Services in the U.S.
2.1.1 Facilities
Capacity Payments.
For regular ongoing
costs associated with facilities and equipment to be used in NW Bio programs, NW Bio will pay a monthly Facilities Capacity Payment.
Such monthly payment does not include start-up costs, shut down costs, capital expenditures or other non-recurring costs (which
are expected to be covered in the separate Manufacturing Expansion Services Agreement). The amount of the monthly Facilities Capacity
Payment will be determined in relation to the capacity to provide for a specified number of Product Lots as follows, and will
escalate with a consumer price index jointly selected by the parties:
[*] Confidential treatment required; certain information omitted and filed separately with the SEC.
[*]
2.1.2 Fixed
Fees for Manufacturing Services and Supplies; Minimum Commitments.
(A.) For each Product
Lot in the U.S. for which DCVax®-L Product is to be made, Cognate will undertake the Manufacturing Services as provided in
Section 1. NW Bio will pay Cognate a fixed fee per Product Lot for the product costs as part of the Manufacturing Services relating
to that Product Lot (the “Product Fee”). The Product Fee will initially be as follows, and will escalate with a consumer
price index jointly selected by the parties.
[*]
(B.) In addition,
NW Bio will pay a fixed fee per Product Lot for materials and consumables (including reagents and other) used in the Manufacturing
Services for that Product Lot (the “Supplies Fee”). The amount of such Supplies Fee will be as follows, and will escalate
with the consumer price index jointly selected by the parties.
[*]
(C.) The Manufacturing
Services do not include any repetition of some or all of the manufacturing processes [*] except as expressly provided for and
paid for, nor any additional processing beyond the standard processing, [*].
(D.) Cognate will
hire, train and maintain sufficient technical staff for the manufacture of such volume of DCVax®-L products as specified in
the Minimum Commitment below (or such higher volume as NW Bio may request and may be jointly agreed), and for ongoing regulatory
compliance for such volume of DCVax®-L products.
(E.) Notwithstanding
anything to the contrary, NW Bio hereby commits to a minimum volume of DCVax®-L Products (the “Minimum Commitment”)
equal to [*].
(F.) [*]
2.1.3 Start-up,
Change, Reduction and/or Shut-down Costs, Capital Expenditures:
For each program and/or
facility that NW Bio desires to start up, expand, upgrade, change, reduce or shut down, Cognate will prepare budgets for the capital
expenditures required. NW Bio will review and approve the applicable budgets for the capital expenditures involved in each such
program or site start-up, expansion, upgrade, change, reduction or shut-down. NW Bio will pay the budgeted capital expenditures
[*].
[*] Confidential treatment required; certain information omitted and filed separately with the SEC.
During the Term of
this Agreement, if NWBO for any reason shuts down, suspends or incurs substantial delay in the DCVax®-L program in whole or
in part, the following shutdown, suspension or delay fees shall apply to cover costs associated with such a shutdown or suspension.
[*].
[*].
2.1.4 Expansion
Planning and Implementation Costs:
Until the Manufacturing
Expansion Services Agreement is executed between the parties, for each program and/or facility that NW Bio desires to expand,
upgrade or change, Cognate will prepare budgets for the costs involved and the capital expenditures required. NW Bio will review
and approve the applicable budgets for the costs and the capital expenditures involved in each such expansion. NW Bio will pay
the budgeted costs and capital expenditures.
2.2 Payment for
Manufacturing, and/or Supervisory Services Outside the U.S.
[*] Such services will
be covered under a separate Agreement as needed, but in the absence of such a separate Agreement, the parties agree that such
Services will be paid on market terms proportional in the applicable country market to the terms under to this Agreement, adjusted
for the higher costs of such manufacturing services being performed [*].
2.3 Reimbursement
of Travel Costs
In addition to the payments
for various services and expenses provided in this Section 2, NW Bio will reimburse all travel-related costs incurred by Cognate
in performing any services hereunder. Such reimbursements will include appropriate per diem travel cost payments, to be jointly
agreed by the parties in connection with each set of services, and reimbursement of all travel-related costs not covered by agreed
per diem payments.
2.4 [*]
[*]
2.5 Credit
Terms and Collection Costs
If NW Bio does not make
a payment or reimbursement when due, the outstanding unpaid amounts will accrue interest at a default interest rate of one and
one-half percent (1-1/2%) per month. If any collection action is undertaken to collect unpaid amounts, NW Bio will pay all fees
and costs associated with such collection actions including, without limitation, reasonable attorneys’ fees, as incurred.
[*] Confidential treatment required; certain information omitted and filed separately with the SEC.
2.6 Yearly
Adjustment
All payment amounts
referenced in this Agreement shall be subject to a yearly increase of three percent (3%). The first increase shall be effective
on the first invoice after the 12 month anniversary of this Agreement.
2.7 Milestone
and Initiation Payments
The
disinterested members of the Board of Directors of NW Bio agree that the magnitude of the undertakings now being asked of
Cognate, particularly in view of the extraordinary performance by Cognate to date, and the scale and scope of services
needed, which far exceeds the parties’ expectations when the Prior Agreement was entered into, requires a substantial
initiation payment in connection with the major expansion of the DCVax-L program needed by NW Bio (the
“Initiation Payment”). The disinterested Members of the Board agree that the excess services and accelerated
timelines are of great value to NW Bio. Previously, NW Bio has left approximately half of Cognate’s invoices unpaid for
more than a year. NW Bio desires to recognize and compensate Cognate for its superior performance, and to rectify the payment
situation at Cognate going forward. NW Bio will make an Initiation Payment in connection with the substantial expansion of
the DCVax program pursuant to this Agreement: 1,020,273 shares of NW Bio common stock, and a warrant exercisable for 486,802
shares of NW Bio common stock at $4.00 per share, with an exercise period of five (5) years from issuance, cashless exercise
provisions and most favored nation provisions for anti-dilution protection. [*] NW Bio will also make milestone payments to
Cognate upon the achievement of mutually agreed operational milestones, such as [*]. The securities issued to Cognate hereunder will be subject to a lock-up for up to thirty (30) months from
issuance, or such longer period as the parties may mutually agree. NW Bio will compensate Cognate for such-lock up on market based
terms, and such terms will be subject to most favored nation provisions with respect to any securities issuances, agreements or
exercises involving any other investor or creditor. Under the lock-up, Cognate will be prohibited from selling or trading the covered
securities in the market.
2.8 Other
Payment Terms
2.8.1 Payment
of Manufacturing Bills Pursuant to Work Performed Under the Terms of this Agreement: Payment of Manufacturing Bills will
be due within fifteen (15) after the invoice date. In the event that NW Bio fails to pay any Manufacturing Bills within fifteen
(15) days after the invoice date, then commencing thirty (30) days after the invoice date and continuing until paid in full by
cash and/or stock, the overdue amount will bear default interest at the rate of one and one-half percent (1-1/2%) per month. At
least half of all Manufacturing Bills during the first eighteen (18) months following the Effective Date of this Agreement (the
“Conversion Period”) will be paid in shares of NW Bio common stock, with the remaining portions of such Manufacturing
Bills paid in cash. [*]. The conversion price for any conversions after the Conversion Period will be jointly determined by the
parties, based upon market factors. With respect to any shares of NW Bio stock to be issued hereunder, Cognate may elect to receive
unregistered shares immediately (with registration rights as provided herein) or to receive registered shares on the earliest
date that any registered shares are issued to any other investors after the date of the Manufacturing Bill being converted [*].
2.8.2 Most Favored
Nation Conversion Terms: Notwithstanding anything to the contrary herein, or in any other document or source, any amounts
owed that are paid by NW Bio in shares, warrants and/or other securities of any kind (such as restricted stock units, convertible
debt securities or other) issued or issuable in connection with this Agreement (including any subsequent amendments hereof) ,
will be subject to adjustment on a most favored nation basis relative to the terms provided or applied to any other investor or
creditor of NW Bio during the Term of this Agreement or the Lock-Up Agreement, so that the terms of all shares, warrants and other
securities issued or issuable under this Agreement will have terms no less favorable to Cognate than the terms of any shares,
warrants and/or other securities issued or issuable to any other investor or creditor during the Term of this Agreement or the
Lock-Up Agreement. For the avoidance of doubt, the application of most favored nation treatment will include not only the price
and terms of securities issued but also the addition of, and terms relating to, additional securities, and additional rights and/or
benefits to the investor or creditor (including warrants, rights of first refusal, pre-emptive rights, and/or other securities,
rights or benefits). Such most favored nation adjustments may be implemented at any time or times after being times after being
triggered by terms provided to other investors or creditors, and may be triggered on multiple occasions with respect to a particular
security issued hereunder.
[*] Confidential treatment required; certain information omitted and filed separately with the SEC.
SECTION 3: CONFIDENTIALITY
In connection with this
Agreement, the parties will maintain a mutual Confidentiality Agreement.
SECTION 4: REPRESENTATIONS
AND WARRANTIES
4.1 Agreement
Duly Authorized; Valid and Binding Obligations
Cognate and NW Bio each
hereby represents and warrants, severally and not jointly, that:
4.2.1 Such
party is a corporation or entity duly organized, validly existing and in good standing under the laws of the jurisdiction where
such party is domiciled, and has all necessary power and authority to (i) own, operate and occupy its properties and to carry
on its business as presently conducted and (ii) enter into this Agreement and the other agreements, instruments and documents
contemplated hereby, and to consummate the transactions contemplated hereby and thereby. Such party is qualified to do business
and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect.
4.2 All
necessary corporate or other proceedings, votes, resolutions, consents, waivers and approvals relating to the sale and purchase
of shares have been completed by the applicable party. Upon execution, this Agreement will constitute a valid and legally binding
obligation of the party, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally,
and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.
4.2 Valid
Issuances; No Violation
NW Bio hereby represents
and warrants that:
Upon issuance hereunder,
each conversion share will be validly issued, fully paid and non-assessable. The execution, delivery, performance, issuance, sale
and delivery of this Agreement and compliance with the provisions hereof by NW Bio will not (a) violate any provision of NW Bio’s
certificate of incorporation or bylaws or, to the knowledge of the NW Bio, any law, statute, rule or regulation applicable to
or NW Bio any order, judgment or decree of any court, arbitrator, administrative agency or other governmental body applicable
to NW Bio or any of its assets or (b) conflict with or result in material breach of any of the terms or conditions of any agreement
or instrument to which NW Bio is a party, or given 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 NW Bio.
4.3 No
Warranties of Merchantability or Fitness
EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT, COGNATE MAKES NO WARRANTIES OR REPRESENTATIONS OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED
TO, WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE OR MERCHANTABILITY, WITH RESPECT TO ANY DCVAX®-L PRODUCTS OR ANY SERVICES
RENDERED HEREUNDER, OR ANY TECHNOLOGY THAT MAY BE USED IN SUCH SERVICES OR INCORPORATED INTO SUCH DCVAX®-L PRODUCTS.
SECTION 5: INSURANCE,
INDEMNIFICATION, LIABILITY
5.1 NW
Bio Insurance Obligations
NW Bio is required to obtain
and to maintain throughout the term of this Agreement, in such amounts as are reasonably acceptable to Cognate, (a) clinical trial
insurance covering all clinical trials of DCVax®-L Products, (b) all-risks umbrella insurance, (c) product liability insurance
covering the distribution, use and administration of DCVax®-L Products to patients, and (d) such other insurance as is reasonable
or customary in the industry. Cognate shall be a named insured and beneficiary on all such insurance coverages.
5.2 Cognate
Insurance Obligations
Cognate is required to
obtain and to maintain throughout the term of this Agreement, in such amounts as are reasonably acceptable to NW Bio, (a) product
liability insurance covering the manufacture of DCVax®-L Products by Cognate, and (b) such other insurance as is reasonable
or customary in the industry. NW Bio shall be a named insured and beneficiary on all such insurance coverages.
5.3 Indemnification
In addition to all rights
and remedies available to Cognate at law or in equity, NW Bio will indemnify and hold harmless Cognate and its successors, assigns,
affiliates and their respective present and former directors, officers, partners, employees, agents, representatives, shareholders,
successors and assigns (each an "Indemnified Party") to the fullest extent permitted by law from and against all costs,
expenses, losses, claims, damages, liabilities, [*] (a) arising from or relating to this Agreement and/or any transactions or
services contemplated hereunder, (b) arising from or relating to any changes from the original agreement of the parties as described
herein, or arising from or relating to a delayed agreement, or arising from or relating to delayed payment, delayed conversions
and/or delayed issuances hereunder beyond the applicable Manufacturing Bill dates or other applicable reference dates, and (c)
arising from or relating to any use or administration to patients of DCVax®-L Products manufactured by Cognate, provided that
Cognate has manufactured such DCVax® Products substantially in accordance with the applicable specifications or SOPs for such
DCVax®-L Products and/or with commercially reasonable deviation from such SOPs. NW Bio will pay all fees and expenses (including
reasonable attorneys’ fees), as incurred, which are incurred by or on behalf of an Indemnified Party, or to which an Indemnified
Party may become subject, in connection with any matters covered by this indemnification and/or in connection with investigating,
preparing, pursuing, defending and resolving any threatened or pending claim, action, proceeding or investigation (collectively,
“Proceedings") arising therefrom, whether or not such Indemnified Party is a formal party to such Proceedings.
5.4 No
Consequential Damages
Notwithstanding anything
to the contrary, in no event shall either party shall be liable hereunder, on any basis, for any indirect or consequential damages.
SECTION 6: TERM
AND TERMINATION
6.1 Term
This Agreement
will remain in force until the later of seven (7) years from the Effective Date (the “Term”) or five (5)
years after the first commercial sales of DCVax®-L Products
pursuant to a Biologics License Application or marketing authorization (not a compassionate use, hospital exemption or
similar authorization), unless terminated earlier pursuant to Section 6.2.
6.2 Termination
Either party may terminate
this Agreement in the event of a material breach by the other party which remains uncured after notice of such breach for a period
of thirty (30) days in the case of a monetary breach, or a period of one hundred twenty (120) days in the case of a non-monetary
breach that is material to the contract taken as a whole.
[*] Confidential treatment required; certain information omitted and filed separately with the SEC.
SECTION 7: REGISTRATION
7.1. Unregistered
Shares.
For any conversion shares issued hereunder
which are unregistered under the Securities Act of 1933, as amended (the “Securities Act”) at the time of issuance,
the certificates evidencing such unregistered conversion shares may, if necessary, bear the following legend (or a substantially
similar legend) and such other legends as may be required by applicable laws:
“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.”
7.2 Registration.
Cognate will be entitled to “piggyback”
registration rights, with respect to all unregistered conversion shares issued hereunder and all other shares and securities of
NW Bio owned by Cognate and its affiliates, in any registrations effected by NW Bio until all such shares and securities have
been registered. NW Bio will use commercially reasonable efforts to complete registration of such unregistered conversion shares
by the earlier of six (6) months after the Effective Date of this Agreement or six (6) months after issuance during the Term of
this Agreement.
7.3 Registration
Costs.
NW Bio will bear all costs and expenses (including
attorneys’ fees) relating to the preparation and filing of all registrations which NW Bio is required to undertake pursuant
to this Agreement.
SECTION 8: MISCELLANEOUS
8.1 Governing
Law
This Agreement will be
governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of law.
8.2 Entire
Agreement
This Agreement (including
the Exhibits hereto), constitutes the entire agreement of the parties with respect to the subject matter hereof, and supersedes
all prior agreements, understandings, promises or undertakings with respect to the subject matter hereof, including the prior
Services Agreement, provided however, that the provision in the Prior Services Agreement (and the agreement prior to that) for
a penalty payment of $2 million from NW Bio to Cognate, to which Cognate was entitled in connection with failure by NW Bio to
complete enrollment in NW Bio’s Glioblastoma multiforme clinical trial by a specified date, survives and remains applicable,
and has not been and is not waived, and provided further that this Agreement is part of a package of agreements which also a DCVax®-Direct
Services Agreement and multiple Ancillary Services agreements (including a Distribution, Software and Specialty Services Agreement,
a Manufacturing Expansion and Support Agreement and related agreements).
8.3 Amendments
Except as otherwise expressly
provided herein, this Agreement may not be amended except by a written instrument signed by both parties hereto.
8.4 Adjustments
for Stock Splits and Similar Transactions
In the event of a stock
split, reverse split or other similar transaction during the Term of this Agreement, the prices and other numbers herein will
be adjusted accordingly.
8.5 Survival
The provisions of Sections
2 - 5 herein will survive the expiration or termination of this Agreement until expiration of the applicable statute of limitations.
8.6 Notices
Any notices, consents,
waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will
be deemed to be effective upon delivery when delivered (a) personally; (b) by facsimile or email, provided a copy is mailed no
later than the next business day through a nationally recognized overnight delivery service; or (c) by overnight delivery through
a nationally recognized overnight delivery service, in each case properly addressed to the receiving party at such address or
facsimile number as the receiving party has furnished to the sending party in writing.
8.7 Severability
If one or more provisions
of this Agreement are held to be unenforceable under applicable law, then such provision shall be excluded from this Agreement,
the balance of the Agreement shall be enforceable in accordance with its terms, and the parties shall negotiate in good faith
to amend or add to the provisions of this Agreement 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.
8.8 Successors
and Assigns
Except as otherwise expressly
provided herein, the provisions hereof will be binding upon, and inure to the benefit of the respective successors, assigns, heirs,
executors and administrators of the parties hereto. Neither party hereto may transfer all or any portion of its rights under this
Agreement to a third party other than an affiliate without the prior written consent of the other party hereto.
8.9 Interpretations
All pronouns and any variations
thereof will be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or persons
or entity or entities may require. All references to “$” or dollars herein will be construed to refer to United States
dollars. The titles of the Sections and subsections of this Agreement are for convenience or reference only and are not to be
considered in construing this Agreement. All references to “including” shall be deemed to mean “including, without
limitation.”
8.10 Counterparts
This Agreement may be executed
in counterparts, each of which when so executed and delivered will constitute a complete and original instrument but all of which
together will constitute one and the same agreement, and it will not be necessary when making proof of this Agreement or any counterpart
thereof to account for any counterpart other than the counterpart of the party against whom enforcement is sought.
[signatures on the following
page]
IN WITNESS WHEREOF, the
parties have executed this Services Agreement effective as of the date first set forth above.
NORTHWEST |
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Exhibit 10.41
*Portions of this exhibit marked [*] are requested
to be treated confidentially.
DCVAX-DIRECT MANUFACTURING AND SERVICES
AGREEMENT
This Services Agreement
(this “Agreement”) is entered into, effective as of January 17, 2014(the “Effective Date”),
by and between Cognate BioServices, a Delaware corporation (Cognate”), and Northwest Biotherapeutics, a Delaware corporation
(“NW Bio”).
RECITALS
WHEREAS, NW Bio is in
the business of developing immune cell therapies for cancer, and Cognate is in the business of manufacturing clinical grade cellular
products on a contract services basis;
WHEREAS, NW Bio and Cognate
previously entered into a Services Agreement for the production of NW Bio’s DCVax® Products by Cognate (the “Prior
Services Agreement”) and a Conversion and Lock-Up Agreement (the “Lock-Up Agreement”);
WHEREAS, Cognate has dedicated
cGMP facilities and other facilities to NW Bio programs, and conducted all of NW Bio’s physical operations including all
collections of patient tumor tissues and leukapheresis materials from clinical sites, all manufacturing, quality control, cryopreservation
and banking of all DCVax® products, and all distribution and logistics to the point of care throughout the US, as well as management
and oversight of all such functions in Europe and Israel;
WHEREAS, both the quantity
and the scope of services NW Bio has requested Cognate to provide greatly exceed the maximum amounts contemplated or provided for
in the Prior Services Agreement, and the parties have jointly determined that the Prior Services Agreement needs to be amended
accordingly, and certain services beyond the core manufacturing services need to be covered in separate agreements;
WHEREAS, Cognate has delivered,
and will continue to deliver during the Term of this Agreement, its invoices to NW Bio on a current monthly basis for the services
and facilities for NW Bio’s programs (collectively, the “Manufacturing Bills”);
[*]
WHEREAS, Cognate has also
undertaken and completed on a highly accelerated basis [*] NW Bio’s DCVax®-Direct product and the manufacturing thereof,
[*];
WHEREAS, building upon
the initial stages of work already completed, the parties desire to carry out the [*]work required, including research and development,
manufacture, distribution and handling of DCVax®-Direct Products for clinical trials and for subsequent commercialization.
[*];
[*]
Confidential treatment requested; certain information omitted and filed separately with the SEC.
WHEREAS, the parties also
desire to update and reformulate their existing Services Agreement into a more comprehensive and complete set of four agreements
consisting of (i) this DCVax-L Manufacturing and Services Agreement, (ii) a new DCVax-Direct Manufacturing And Services Agreement,
(iii) a new Ancilliary Services Agreement, and (iv) a new Manufacturing Expansion Services Agreement; and
WHEREAS, the parties also
desire to update their existing Quality Agreement associated with the manufacture of DCVax®-Direct and ensure that the new
or amended Services Agreements meet the requirements set forth in such Quality Agreement.
AGREEMENT
Now,
Therefore, in consideration of the foregoing recitals and the mutual promises, representations, warranties, and covenants
hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereby agree as follows:
SECTION 1:
SERVICES
Cognate will provide
to NW Bio, on the terms and conditions set forth herein, Manufacturing Services as provided in Section 1.1. The Manufacturing Services
may be referred to herein as the “Services.” Under separate agreements, Cognate will also provide Ancillary Services
and Manufacturing Expansion Services as provided in Section 1.2.
1.1 Manufacturing
Services
1.1.1 Scope of Manufacturing
Services.
(A.) In the U.S., Cognate
will provide Manufacturing Services for the production of DCVax®-Direct products for various solid tumor cancers, (the “DCVax®-Direct
Product(s)”). Such Manufacturing Services, together with related Ancillary Services, will comprise the services necessary
for the production and release of the DCVax®-Direct Products for administration to human patients (including, without limitation,
materials management, quarantined inventory, quality control, quality assurance, sterility testing, potency assays and lot release).
The Manufacturing Services do not include any services after product release at Cognate’s cGMP manufacturing facility and
delivery by Cognate to the shipping company.
(B.) Outside the U.S.,
under the Prior Services Agreement Cognate has been providing extensive and ongoing technology transfer, technical support and
general management and oversight of third party providers and manufacturers, and the services required by NW Bio have been growing
and expanding substantially. Following the Effective Date of this Agreement, such services relating to third parties will be provided
under the separate agreements for Ancillary Services. [*]. The amounts to be billed by Cognate for such direct Manufacturing Services
outside the U.S. will be jointly agreed by the parties based upon market factors and costs, and are anticipated to be substantially
higher than in the U.S., particularly with respect to direct and indirect personnel costs. This Agreement will include (and will
be further amended and restated as needed to include) direct Manufacturing Services outside the U.S. as soon as Cognate is ready
to begin preparations for and implementation of such Services.
[*]
Confidential treatment requested; certain information omitted and filed separately with the SEC.
1.1.2 Manufacturing
Services Capacity. Cognate will commit to providing
the necessary facilities and personnel for production of DCVax®-Direct Products [*]. If NW Bio requests production of DCVax®-Direct
Products in excess of the Maximum Product Lots, Cognate will use commercially reasonable efforts to accomplish such excess production
as requested, provided that NW Bio pays for such services in accordance with Section 2 hereof.
1.1.3 Regulatory
Standards. The Manufacturing Services will be carried out in accordance with current Good Manufacturing Practices (“cGMP”)
requirements established by the U.S. Food and Drug Administration (“FDA”), or the equivalent requirements established
by the applicable regulators outside the U.S.
1.2 Additional
Agreements
Certain additional services
relating to the DCVax-L program will be provided at NW BIO’s request under separate agreements. These include an Ancillary
Services Agreement and a Manufacturing Expansion Services Agreement. The Ancillary Services will include shipping distribution
and logistics services; cryopreservation and storage services; clinical support services; development and validation services;
recordkeeping services, and others. The Manufacturing Expansion Services will include oversight, management and support of third
party manufacturing outside the U.S., [*] and supporting new and/or upgraded or expanded manufacturing capacity for NW BIO’s
programs.
1.3 Quality
Agreement
Under the prior Services
Agreement, the parties had entered into a Quality Agreement establishing the quality standards to be met in DCVax®-Direct Products,
the requirements for product release, the respective roles and responsibilities of NW Bio and Cognate in these processes, the standards
and procedures for the handling of any deviations from the usual quality standards or product release requirements, and/or any
complaints, the processes and allocation of responsibilities for reporting of these matters, and related subjects. Within one hundred
eighty (180) days after the Effective Date of this Agreement, the parties will update the existing Quality Agreement consistent
with the terms of this Agreement. Such updated Quality Agreement will be attached hereto as Exhibit A and incorporated
herein by reference.
[*] Confidential treatment
requested; certain information omitted and filed separately with the SEC.
SECTION 2: PAYMENTS
2.1
Payments for Manufacturing Services in the U.S.
2.1.1
Facilities Capacity Payments.
For regular ongoing
costs associated with facilities and equipment to be used in NW Bio programs, NW Bio will pay a monthly Facilities Capacity Payment.
Such monthly payment does not include start-up costs, shut down costs, capital expenditures or other non-recurring costs (which
are expected to be covered in the separate Manufacturing Expansion Services Agreement). The amount of the monthly Facilities Capacity
Payment will be determined in relation to the capacity to provide for a specified number of Product Lots as follows, and will escalate
with a consumer price index jointly selected by the parties:
· [*]
· [*]
2.1.2 Fixed Fees
for Manufacturing Services and Supplies; Minimum Commitments.
(A.) [*]
(B.) [*]
[*]
[*]
(C.) [*]
(D.) Cognate will hire,
train and maintain sufficient technical staff for the manufacture of such volume of DCVax®-Direct products as specified in
the Minimum Commitment below (or such higher volume as NW Bio may request and may be jointly agreed), and for ongoing regulatory
compliance for such volume of DCVax®-Direct products.
(E.) Notwithstanding
anything to the contrary, NW Bio hereby commits to a minimum volume of DCVax®-Direct Products (the “Minimum Commitment”)
equal to [*]
(F.) [*]
[*] Confidential treatment requested; certain information
omitted and filed separately with the SEC.
2.1.3 Start-up,
Change, Reduction and/or Shut-down Costs, Capital Expenditures:
For each program and/or
facility that NW Bio desires to start up, expand, upgrade, change, reduce or shut down, Cognate will prepare budgets for the capital
expenditures required. NW Bio will review and approve the applicable budgets for the capital expenditures involved in each such
program or site start-up, expansion, upgrade, change, reduction or shut-down. NW Bio will pay the budgeted capital expenditures.
If NW Bio decides for any reason to shut-down or suspend the DCVax®-Direct program in whole or in part, the following shutdown
or suspension fees shall apply to cover costs associated with such a shutdown or suspension. These fees are separate from and additional
to any other payments under this Agreement, including any remedies in connection with any breach of this Agreement whether such
breach is associated with such shut down, suspension or substantial delay or otherwise.
[*]
[*]
[*]
[*]
2.1.4 Expansion
Planning and Implementation Costs:
Until the Manufacturing
Expansion Services Agreement is executed between the parties, for each program and/or facility that NW Bio desires to expand, upgrade,
or change, Cognate will prepare budgets for the costs involved and the capital expenditures required. NW Bio will review and approve
the applicable budgets for the costs and the capital expenditures involved in each such expansion. NW Bio will pay the budgeted
costs and capital expenditures.
2.2 Payment for
Manufacturing, and/or Supervisory Services Outside the U.S.
[*]. Such services will
be covered under a separate Agreement, as needed, but in the absence of such a separate Agreement, the parties agree that such
Services will be paid on market terms proportional in the applicable country market to the terms under to this Agreement, adjusted
for the higher costs of such manufacturing services being performed [*].
2.3 Reimbursement
of Travel Costs
In addition to the payments
for various services and expenses provided in this Section 2, NW Bio will reimburse all travel-related costs incurred by Cognate
in performing any services hereunder. Such reimbursements will include appropriate per diem travel cost payments, to be jointly
agreed by the parties in connection with each set of services, and reimbursement of all travel-related costs not covered by agreed
per diem payments.
2.4 [*]
[*]
[*] Confidential treatment requested; certain information
omitted and filed separately with the SEC.
2.5 Credit
Terms and Collection Costs
If NW Bio does not make
a payment or reimbursement when due, the outstanding unpaid amounts will accrue interest at a default interest rate of one and
one-half percent (1-1/2%) per month. If any collection action is undertaken to collect unpaid amounts, NW Bio will pay all fees
and costs associated with such collection actions including, without limitation, reasonable attorneys’ fees, as incurred.
2.6 Yearly
Adjustment
All payment amounts referenced
in this Agreement shall be subject to a yearly increase of three percent (3%). The first increase shall be effective on the first
invoice after the 12 month anniversary of this Agreement.
2.7 Milestone
and Initiation Payments
The disinterested members
of the Board of Directors of NW Bio agree that the magnitude of the undertakings now being asked of Cognate, particularly in view
of the extraordinary performance by Cognate to date, and the scale and scope of services needed, which far exceeds the parties’
expectations when the Prior Agreement was entered into, requires a substantial initiation payment in connection with the launch and expansion of the DCVax-Direct
program (the “Initiation Payment”). The disinterested Members of the Board agree that the excess services and accelerated
timelines are of great value to NW Bio. Previously, NW Bio has left approximately half of Cognate’s invoices unpaid for more
than a year. NW Bio desires to recognize and compensate Cognate for its superior performance, and to rectify the payment situation
at Cognate going forward. NW Bio will make an Initiation Payment pursuant to this Agreement: 1,683,541 shares of NW Bio common
stock and a warrant exercisable for 803,224 shares of NW Bio common stock at $4.00 per share, with an exercise period of five (5)
years from issuance, cashless exercise provisions and most favored nation provisions for anti-dilution protection. NW Bio will also make milestone payments to Cognate upon the achievement
of mutually agreed operational milestones, [*]. The securities issued to Cognate hereunder will be subject to a lock-up for up to thirty (30) months from
issuance, or such longer period as the parties may mutually agree. NW Bio will compensate Cognate for such lock-up on market based
terms, and such terms will be subject to most favored national provisions with respect to any securities issuances, agreements
or exercises involving any other investor or creditor. Under the lock-up, Cognate will be prohibited from selling or trading the
covered securities in the market.
2.8 Other
Payment Terms
2.8.1 Payment
of Manufacturing Bills Pursuant to Work Performed Under the Terms of this Agreement: Payment of Manufacturing Bills will
be due within fifteen (15) after the invoice date. In the event that NW Bio fails to pay any Manufacturing Bills within fifteen
(15) days after the invoice date, then commencing thirty (30) days after the invoice date and continuing until paid in full by
cash and/or stock, the overdue amount will bear default interest at the rate of one and one-half percent (1-1/2%) per month. At
least half of all Manufacturing Bills during the first eighteen (18) months following the Effective Date of this Agreement (the
“Conversion Period”) will be paid in shares of NW Bio common stock, with the remaining portions of such Manufacturing
Bills paid in cash. [*]. The conversion price for any conversions after the Conversion Period will be jointly determined by the
parties, based upon market factors. With respect to any shares of NW Bio stock to be issued hereunder, Cognate may elect to receive
unregistered shares immediately (with registration rights as provided herein) or to receive registered shares on the earliest date
that any registered shares are issued to any other investors after the date of the Manufacturing Bill being converted. [*].
[*] Confidential treatment requested; certain information
omitted and filed separately with the SEC.
2.8.2 Most Favored
Nation Conversion Terms: Notwithstanding anything to the contrary herein, or in any other document or source any amounts
owed that are paid by NW Bio in shares, warrants and/or other securities of any kind (such as restricted stock units, convertible
debt securities or other) issued or issuable under in connection with this Agreement (including any subsequent amendments hereof),
will be subject to adjustment on a most favored nation basis relative to the terms provided or applied to any other investor or
creditor of NW Bio during the Term of this Agreement or the Lock-Up Agreement, so that the terms of all shares, warrants and other
securities issued or issuable under this Agreement will have terms no less favorable to Cognate than the terms of any shares, warrants
and/or other securities issued or issuable to any other investor or creditor during the Term of this Agreement or the Lock-Up Agreement.
For the avoidance of doubt, the application of most favored nation treatment will include not only the price and terms of securities
issued but also the addition of, and terms relating to, additional securities, and additional rights and/or benefits to the investor
or creditor (including warrants, rights of first refusal, registration rights, pre-emptive rights, and/or other securities, rights
or benefits). Such most favored nation adjustments may be implemented at any time or times after being triggered by terms provided
to other investors or creditors, and may be triggered on multiple occasions with respect to a particular security issued hereunder.
SECTION 3:
CONFIDENTIALITY
In connection with this
Agreement, the parties will maintain a mutual Confidentiality Agreement.
SECTION 4:
REPRESENTATIONS AND WARRANTIES
4.1 Agreement
Duly Authorized; Valid and Binding Obligations
Cognate and NW Bio each
hereby represents and warrants, severally and not jointly, that:
4.2.1 Such
party is a corporation or entity duly organized, validly existing and in good standing under the laws of the jurisdiction where
such party is domiciled, and has all necessary power and authority to (i) own, operate and occupy its properties and to carry on
its business as presently conducted and (ii) enter into this Agreement and the other agreements, instruments and documents contemplated
hereby, and to consummate the transactions contemplated hereby and thereby. Such party is qualified to do business and is in good
standing in each jurisdiction in which the failure to so qualify would have a material adverse effect.
4.2 All
necessary corporate or other proceedings, votes, resolutions, consents, waivers and approvals relating to the sale and purchase
of shares have been completed by the applicable party. Upon execution, this Agreement will constitute a valid and legally binding
obligation of the party, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited
by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.
4.2 Valid
Issuances; No Violation
NW Bio hereby represents
and warrants that:
Upon issuance hereunder,
each conversion share will be validly issued, fully paid and non-assessable. The execution, delivery, performance, issuance, sale
and delivery of this Agreement and compliance with the provisions hereof by NW Bio will not (a) violate any provision of NW Bio’s
certificate of incorporation or bylaws or, to the knowledge of the NW Bio, any law, statute, rule or regulation applicable to or
NW Bio any order, judgment or decree of any court, arbitrator, administrative agency or other governmental body applicable to NW
Bio 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 NW Bio 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 NW Bio.
4.3 No
Warranties of Merchantability or Fitness
EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT, COGNATE MAKES NO WARRANTIES OR REPRESENTATIONS OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED
TO, WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE OR MERCHANTABILITY, WITH RESPECT TO ANY DCVAX®-DIRECT PRODUCTS OR ANY SERVICES
RENDERED HEREUNDER, OR ANY TECHNOLOGY THAT MAY BE USED IN SUCH SERVICES OR INCORPORATED INTO SUCH DCVAX®-DIRECT PRODUCTS.
SECTION 5:
INSURANCE, INDEMNIFICATION, LIABILITY
5.1 NW
Bio Insurance Obligations
NW Bio is required to
obtain and to maintain throughout the term of this Agreement, in such amounts as are reasonably acceptable to Cognate, (a) clinical
trial insurance covering all clinical trials of DCVax®-Direct Products, (b) all-risks umbrella insurance, (c) product liability
insurance covering the distribution, use and administration of DCVax®-Direct Products to patients, and (d) such other insurance
as is reasonable or customary in the industry. Cognate shall be a named insured and beneficiary on all such insurance coverages.
5.2 Cognate
Insurance Obligations
Cognate is required to
obtain and to maintain throughout the term of this Agreement, in such amounts as are reasonably acceptable to NW Bio, (a) product
liability insurance covering the manufacture of DCVax®-Direct Products by Cognate, and (b) such other insurance as is reasonable
or customary in the industry. NW Bio shall be a named insured and beneficiary on all such insurance coverages.
5.3 Indemnification
In addition to all rights
and remedies available to Cognate at law or in equity, NW Bio will indemnify and hold harmless Cognate and its successors, assigns,
affiliates and their respective present and former directors, officers, partners, employees, agents, representatives, shareholders,
successors and assigns (each an "Indemnified Party") to the fullest extent permitted by law from and against all costs,
expenses, losses, claims, damages, liabilities, [*]) (a) arising from or relating to this Agreement and/or any transactions or
services contemplated hereunder, (b) arising from or relating to any changes from the original agreement of the parties as described
herein, or arising from or relating to a delayed agreement, or arising from or relating to from delayed payment, delayed conversions
and/or delayed issuances hereunder beyond the applicable Manufacturing Bill dates or other applicable reference dates, and (c)
arising from or relating to any use or administration to patients of DCVax®-Direct Products manufactured by Cognate, provided
that Cognate has manufactured such DCVax® Products substantially in accordance with the applicable specifications or SOPs for
such DCVax®-Direct Products and/or with commercially reasonable deviation from such SOPs. NW Bio will pay all fees and expenses
(including reasonable attorneys’ fees), as incurred, which are incurred by or on behalf of an Indemnified Party, or to which
an Indemnified Party may become subject, in connection with any matters covered by this indemnification and/or in connection with
investigating, preparing, pursuing, defending and resolving any threatened or pending claim, action, proceeding or investigation
(collectively, “Proceedings") arising therefrom, whether or not such Indemnified Party is a formal party to such Proceedings.
5.4 No Consequential
Damages
Notwithstanding anything
to the contrary, in no event shall either party shall be liable hereunder, on any basis, for any indirect or consequential damages.
SECTION 6: TERM
AND TERMINATION
6.1 Term
This Agreement will
remain in force until the later of seven (7) years from the Effective Date (the “Term”) or five (5) years after
the first commercial sales of DCVax®-Direct Products
pursuant to a Biologics License Application or marketing authorization (not a compassionate use, hospital exemption or
similar authorization), unless terminated earlier pursuant to Section 6.2.
6.2 Termination
Either party may terminate
this Agreement in the event of a material breach by the other party which remains uncured after notice of such breach for a period
of thirty (30) days in the case of a monetary breach, or a period of one hundred twenty (120) days in the case of a non-monetary
breach that is material to the contract taken as a whole.
[*] Confidential treatment requested; certain information
omitted and filed separately with the SEC.
SECTION 7: REGISTRATION
7.1. Unregistered Shares.
For any conversion shares issued hereunder
which are unregistered under the Securities Act of 1933, as amended (the “Securities Act”) at the time of issuance,
the certificates evidencing such unregistered conversion shares may, if necessary, bear the following legend (or a substantially
similar legend) and such other legends as may be required by applicable laws:
“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.”
7.2 Registration.
Cognate will be entitled to “piggyback”
registration rights, with respect to all unregistered conversion shares issued hereunder and all other shares and securities of
NW Bio owned by Cognate and its affiliates, in any registrations effected by NW Bio until all such shares and securities have been
registered. NW Bio will use commercially reasonable efforts to complete registration of such unregistered conversion shares by
the earlier of six (6) months after the Effective Date of this Agreement or six (6) months after issuance during the Term of this
Agreement.
7.3 Registration
Costs.
NW Bio will bear all costs and expenses (including
attorneys’ fees) relating to the preparation and filing of all registrations which NW Bio is required to undertake pursuant
to this Agreement.
SECTION 8:
MISCELLANEOUS
8.1 Governing
Law
This Agreement will be governed
by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of law.
8.2 Entire
Agreement
This Agreement constitutes
the entire agreement of the parties with respect to the subject matter hereof, and supersedes all prior agreements for DCVax®-Direct,
understandings, promises or undertakings with respect to the subject matter hereof, provided however, that this Agreement is part
of a package of agreements which also includes a DCVax®-L Services Agreement and multiple Ancillary Services agreements (including
a Clinical Support, Shipping, Distribution and Logistics, and Scheduling Specialty Services Agreement, a Manufacturing Expansion
and Support Agreement and related agreements).
8.3 Amendments
Except as otherwise expressly
provided herein, this Agreement may not be amended except by a written instrument signed by both parties hereto.
8.4 Adjustments
for Stock Splits and Similar Transactions
In the event of a stock
split, reverse split or other similar transaction during the Term of this Agreement, the prices and other numbers herein will be
adjusted accordingly.
8.5 Survival
The provisions of Sections
2 - 5 herein will survive the expiration or termination of this Agreement until expiration of the applicable statute of limitations.
8.6 Notices
Any notices, consents,
waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will
be deemed to be effective upon delivery when delivered (a) personally; (b) by facsimile or email, provided a copy is mailed no
later than the next business day through a nationally recognized overnight delivery service; or (c) by overnight delivery through
a nationally recognized overnight delivery service, in each case properly addressed to the receiving party at such address or facsimile
number as the receiving party has furnished to the sending party in writing.
8.7 Severability
If one or more provisions
of this Agreement are held to be unenforceable under applicable law, then such provision shall be excluded from this Agreement,
the balance of the Agreement shall be enforceable in accordance with its terms, and the parties shall negotiate in good faith to
amend or add to the provisions of this Agreement 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.
8.8 Successors
and Assigns
Except as otherwise expressly
provided herein, the provisions hereof will be binding upon, and inure to the benefit of the respective successors, assigns, heirs,
executors and administrators of the parties hereto. Neither party hereto may transfer all or any portion of its rights under this
Agreement to a third party other than an affiliate without the prior written consent of the other party hereto.
8.9 Interpretations
All pronouns and any variations
thereof will be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or persons
or entity or entities may require. All references to “$” or dollars herein will be construed to refer to United States
dollars. The titles of the Sections and subsections of this Agreement are for convenience or reference only and are not to be considered
in construing this Agreement. All references to “including” shall be deemed to mean “including, without limitation.”
8.10 Counterparts
This Agreement may be executed
in counterparts, each of which when so executed and delivered will constitute a complete and original instrument but all of which
together will constitute one and the same agreement, and it will not be necessary when making proof of this Agreement or any counterpart
thereof to account for any counterpart other than the counterpart of the party against whom enforcement is sought.
[signatures on the following
page]
IN WITNESS WHEREOF, the
parties have executed this Services Agreement effective as of the date first set forth above.
NORTHWEST |
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Exhibit 10.42
*Portions of this exhibit marked [*] are
requested to be treated confidentially.
ANCILLARY SERVICES AGREEMENT
This Ancillary Services
Agreement (this “Agreement”) is entered into, effective as of January 17, 2014 (the “Effective Date”),
by and between Cognate BioServices, a Delaware corporation (Cognate”), and Northwest Biotherapeutics, a Delaware corporation
(“NW Bio”).
RECITALS
WHEREAS, NW Bio is in
the business of developing immune cell therapies for cancer, and Cognate is in the business of manufacturing clinical grade cellular
products on a contract services basis;
WHEREAS, NW Bio and Cognate
previously entered into a Services Agreement for the production of NW Bio’s DCVax® Products by Cognate (the “Prior
Services Agreement”), effective April 1, 2011, and a Conversion and Lock-Up Agreement (the “Lock-Up Agreement”);
WHEREAS, Cognate has dedicated
cGMP facilities and other facilities to NW Bio programs,[*];
WHEREAS, both the quantity
and the scope of services NW Bio has requested that Cognate provide greatly exceed the maximum scope and amounts contemplated or
provided for in the Prior Services Agreement;
WHEREAS, at NW Bio’s
request, certain services [*] were undertaken by Cognate on a highly expedited basis in order to meet certain NW Bio timelines
prior to this Agreement;
WHEREAS, Cognate has successfully
accomplished all milestones planned by the parties or requested by NW Bio, and NW Bio wishes to recognize such accomplishments
and incentivize Cognate to achieve further milestones by awarding milestone based bonuses during the Term of this Agreement;
WHEREAS, NW Bio is continuing
to substantially expand its clinical programs both in the US and abroad, NW Bio also anticipates undertaking and/or expanding compassionate
use and/or other early access or expanded access programs [*], and NW Bio needs corresponding ongoing expansion of the quantity
and scope of services provided by Cognate for these programs.
WHEREAS, NW Bio’s
DCVax Products may potentially be applicable to tens or hundreds of thousands of patients or more. [*];
[*] Confidential treatment requested; certain information omitted
and filed separately with the SEC.
WHEREAS, the parties desire
to enter into a specialty services agreement, in the form of this Ancillary Services Agreement, for the clinical and commercial
support services, including cryopreservation, shipping, manufacturing and quality control/quality assurance validation, product
distribution, logistics and scheduling of the DCVax® Products for clinical trials and for subsequent commercialization as defined
herein;
WHEREAS, the parties also
desire to update and reformulate their existing Services Agreement into a more comprehensive and complete set of four agreements
consisting of (i) this Ancillary Services Agreement, (ii) a new DCVax-L Manufacturing and Services Agreement, (iii) a new DCVax-Direct
Manufacturing and Services Agreement, and (iv) a new Manufacturing Expansion Services Agreement;
[*].
AGREEMENT
Now,
Therefore, in consideration of the foregoing recitals and the mutual promises, representations, warranties, and covenants
hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the
parties hereby agree as follows:
SECTION 1: SERVICES
1.1 General
1.1.1 NW Bio
will obtain from Cognate, and Cognate will provide to NW Bio, on the terms and conditions set forth herein, Cryopreservation and
Storage Services as provided in Section 1.2, Clinical and Commercial Support Services as provided in Section 1.3; Supplier Sourcing,
Validation and Monitoring as provided in Section 1.4; Shipping, Distribution and Logistics Services as provided in Section 1.5;
Scheduling System and Other Software Design, Development and Services as provided in Section 1.6; Recordkeeping as provided in
Section 1.7; Product and Process Validation Services, as provided in Section 1.8; and such other services as may be necessary,
as provided in Section 1.9, in connection with the clinical site interactions and the development, manufacturing, storage, tracking,
shipping, logistics, distribution and follow-up of DCVax® Products for clinical trials, early access and expanded access programs
(including compassionate use programs), and commercialization (collectively, the “DCVax Products”). All of the foregoing
services, collectively, comprise the “Ancillary Services” or the “Services.”
1.1.2 During the
Term of this Agreement, on an ongoing basis, the parties will jointly determine the Ancillary Services required for NW Bio’s
programs, and will enter into sub-agreements or work orders for such Services which will be attached hereto as Exhibits and incorporated
herein by reference. Where applicable, Cognate may sub-contract with or retain one or more experts or third parties to assist in
the provision of Ancillary Services and will include such experts and third parties in the applicable sub-agreements or work orders,
[*]
[*] Confidential treatment requested; certain information omitted
and filed separately with the SEC.
1.1.3 The parties
acknowledge and agree that the clinical site interactions and the development, manufacturing, storage, tracking, shipping, logistics,
distribution and follow-up of DCVax® Products [*]
1.2 Cryopreservation
and Storage Services
1.2.1 Cognate
will provide (a) cryopreservation and storage of the DCVax® Products and related reagents and materials, including both short-term
and long-term storage of DCVax® Products and of materials related to or to be used in the DCVax® Products; (b) evaluation
and testing, design, procurement, development, installation, operation and maintenance of necessary cryopreservation equipment
and facilities (especially for dedicated storage); (c) procurement and maintenance of the materials and reagents used in the production
and processing of the DCVax® Products [*]; (d) processing and preparation of the DCVax® Products for freezing; (e) freezing
and frozen maintenance of the DCVax® Products; (f) [*] and (g) preparation of the DCVax® Products for shipment and tracking
as provided below (the foregoing, collectively, “Cryopreservation and Storage Services”). Such Cryopreservation and
Storage Services will include materials and reagents used in the manufacture of DCVax® Products, as well as patient-specific
biomaterials (including immune cells, tumor tissue and other) [*].
1.2.2 Cognate
will perform capacity assessments to determine the cryopreservation and storage equipment and facilities needed for specified numbers
of patients for the DCVax® Products, will advise NW Bio of the equipment and facilities required, and will develop and implement
designs and plans for such equipment and facilities, and the procurement, development, installation and set-up, calibration, validation
and certification thereof, both initially and on an ongoing basis.
1.2.3 [*]
1.3 Clinical
and Commercialization Support Services
1.3.1 Cognate
will assist NW Bio in training clinical trial sites about the DCVax technology and products [*] Cognate will help provide communication
and coordination support between and among NW Bio, the trial sites, the contract research organization managing the applicable
trial (particularly in regard to the management and allocation of manufacturing capacity, and the timing and delivery of products
to the sites, and reagents needed to transport patient’s tissues to Cognate, as needed). Cognate will provide similar assistance
for NW Bio and the sites for commercialization of the DCVax® Products.
[*] Confidential treatment requested; certain information omitted
and filed separately with the SEC.
1.3.2 Cognate
will assist NW Bio in training new clinical sites on the requirements of the clinical protocol during site initiation visits in
NW Bio’s clinical programs. Cognate will provide similar training services for the initiation of commercial sites following
approvals of the DCVax® Products. [*]
1.3.3 [*]
1.3.4 [*]
1.4 Supplier
Sourcing, Validation and Monitoring
1.4.1 Requirements.
All supplies and ingredients used in the production, cryopreservation and use of DCVax® Products [*] must be procured from
suppliers who are in compliance with applicable [*] regulatory requirements, and acceptable to the regulatory authorities in the
applicable countries. [*]
1.4.2 Cognate
Services. Cognate will identify potentially suitable suppliers and will conduct
such initial and ongoing supplier evaluations, inspections, validation and monitoring in accordance with applicable regulatory
requirements. Cognate will also identify potentially suitable supplies and ingredients for DCVax® Products, and conduct the
initial and ongoing testing of each lot or batch of such supplies and ingredients, in accordance with applicable regulatory requirements.
[*]
1.5 Shipping,
Distribution and Logistics Services
1.5.1 Cognate will
coordinate and manage or oversee (a) the preparation of the tumor collection kits, leukapheresis collection kits and other materials
as well as the finished DCVax® Products for shipment to the clinical and commercial sites, (b) the scheduling, pick-up and
other aspects of arrangements with the shipping companies for shipments to the sites and back from the clinical and commercial
sites to the manufacturing facilities, (c) the tracking of shipments and deliveries, and (d) such other services as may be necessary
for the outgoing shipment and distribution of all kits and other materials to the sites, the incoming shipments of kits from the
sites to the manufacturing facilities, and the outgoing shipments of finished DCVax® Products to the sites. Notwithstanding
the foregoing, Cognate will not be responsible in any way on any basis, either directly or indirectly, for the handling or condition
of any DCVax® Products after such DCVax® Products leave the manufacturing facility [*]
1.5.2 Cognate will
procure the necessary materials and assemble and/or produce the kits needed for tumor tissue collection and for leukapheresis collection
for the DCVax® Products.
[*] Confidential treatment requested; certain information omitted
and filed separately with the SEC.
1.5.3 (a) Specialized
“dry shipper” shipping containers, filled with liquid nitrogen (LN2), are required for the shipment of frozen DCVax®
Products in order to maintain sufficiently cold temperatures [*]
(b) [*]
(c) [*]
(d) [*]
1.6 Scheduling
and Software Services
1.6.1 Extensive
scheduling is required for each patient who is to be treated with DCVax® Products, and the scheduling process includes but
is not limited to:
· [*]
· [*]
·
[*]
·
[*]
· [*]
This scheduling requires extensive interaction
between and among the clinical sites, Cognate and NW Bio. The sites must be able to coordinate their scheduling of patient procedures
(tumor removal, leukapheresis and DCVax treatments) with the availability of production capacity at the manufacturing facilities.
The number of tumor tissues and/or leukapheresis kits that arrive at the manufacturing facilities on a given day must be tightly
controlled. [*]
When the DCVax® Products reach commercialization,
the extensive scheduling on the foregoing (operational) bases will also have to be coordinated with billing and payments.
1.6.2 [*]
1.6.3 [*]
1.7 Documentation
and Recordkeeping
1.7.1 Regulatory
compliance requires numerous documents and extensive recordkeeping. [*] Such records must cover all aspects of the production process,
the product ingredients and their sourcing and testing, quality control, quality assurance and product release, and the finished
DCVax® Products themselves. In addition, recordkeeping must include information about any serious adverse events related or
possibly related to the DCVax® Products. The parties acknowledge and agree that special arrangements are necessary for fulfillment
of such comprehensive and long-term recordkeeping obligations. NW Bio will obtain legal and regulatory advice, and determine the
scope and extent of recordkeeping required for each country, and so advise Cognate. Cognate will analyze the systems, capacity
and other requirements necessary to fulfill the recordkeeping specified by NW Bio, and determine whether other parties may be needed
to provide such services. Both NW Bio and Cognate will have full access to all such records and information at all times, whether
or not the records are being stored and managed by third parties, or third parties are otherwise involved in the long-term recordkeeping
and related regulatory compliance.
[*] Confidential treatment requested; certain information omitted
and filed separately with the SEC.
1.7.2 In conjunction
with production of DCVax® Products, Cognate will create initial sets of applicable records. Such records will include batch
production records and other records required for initial regulatory compliance at the time of production and product release.
Both NW Bio and Cognate will have full access to all such records and information at all times, whether or not the records are
being stored and managed by third parties, or third parties are otherwise involved in this recordkeeping and related regulatory
compliance.
1.8 Product
and Process Validation Services
1.8.1 [*]
1.8.2 [*]
1.9 Quality
Agreement
A Quality Agreement
between the parties is required in order to comply with regulatory requirements. The Quality Agreement establishes and specifies
the quality standards to be met in the DCVax® Products, the requirements for product release, the respective roles and responsibilities
of NW Bio and Cognate in these processes, the standards and procedures for the handling of any deviations from the usual quality
standards or product release requirements, and/or any complaints, the processes and allocation of responsibilities for reporting
of these matters, and related subjects. The parties have previously entered into a Quality Agreement, but will need to enter into
one or more updated Quality Agreements during the term of this Agreement. As promptly as practicable after the Effective Date of
this Agreement, the parties will execute an updated or new Quality Agreement consistent with the terms of this Agreement, and such
Quality Agreement will be attached as an exhibit hereto.
1.10 Other
Services
In addition to the
services provided for under the foregoing Sections 1.1 through 1.9, the parties will determine any other services which may be
required for the clinical site interactions and the development, manufacturing, storage, tracking, shipping, logistics, distribution
and follow-up of DCVax® Products, and the parties will develop work plans, timelines and budgets for execution of such other
services by Cognate pursuant to this Agreement.
[*] Confidential treatment requested; certain information omitted
and filed separately with the SEC.
SECTION 2: PAYMENTS
2.1 Payment
Terms for Ancillary Services
2.1.1 The parties
will determine and agree upon the payment terms for the Ancillary Services described in Section 1 hereof, subject to the provisions
of Section 2.5.2 hereof (for payment of at least half of all Ancillary Services Invoices in stock, with fifty percent (50%) warrant
coverage, [*], and such payment terms will be included in the sub-agreements or work orders for such Services that are to be attached
hereto as Exhibits. The parties will negotiate and decide all such payment terms in good faith on market based terms with due consideration
of any special factors, such as accelerated timetables and related extra costs and difficulties.
2.1.2 For Ancillary
Services which require dedicated equipment and/or facilities, the payment terms will include billing of the costs and fees relating
to such equipment and facilities to NW Bio. Likewise, for Ancillary Services which require dedicated personnel and/or clean rooms,
cold storage, quarantined storage, and/or other dedicated spaces and/or timeslots, the payment terms will include capacity charges
as well as usage charges. The payment terms for Ancillary Services will cover a specified amount of such Services [*] chosen by
NW Bio. For Services in excess of the amounts NW Bio has chosen and contracted for, the payment terms will require payment at substantial
premium levels to cover the excess costs and difficulties of Cognate providing Services in excess of the amounts that NW Bio has
chosen and contracted for, and that have been budgeted and planned for.
2.1.3 If Cognate
sub-contracts, retains or otherwise arranges for third party experts or others to perform certain Ancillary Services, Cognate will
undertake technology transfer to such third parties as needed, and will supervise and oversee performance of such Services by such
third parties as needed (collectively, the “Supervisory Services”). NW Bio will pay Cognate fees for the Supervisory
Services, and the amounts of such Supervisory Fees will be included in the applicable sub-agreement or work order that is attached
hereto as an exhibit and covers such Services.
2.2 Milestone
and Initiation Payments
Upon execution
of this Agreement, NW Bio will make an aggregate upfront payment (the “Milestone and Initiation Payment”) to
Cognate covering extensive preparatory work and an initiation payment relating to the initiation of a broad range
of Ancillary Services under this Agreement. NW Bio acknowledges and agrees that Cognate’s performance of
Ancillary Services to date, including on an accelerated timetable, before even having an agreement in place, have been of
great value to NW Bio. NW Bio now needs a greatly expanded scope and amount of such Ancillary Services. NW Bio will make a
Milestone and Initiation payment in connection with the launch of greatly expanded Ancillary Services pursuant to this
Agreement. The Milestone and Initiation Payment will be made in the form of 1,326,355 shares of NW Bio Common Stock and
Warrants exercisable for 632,843 shares of NW Bio Common Stock, with an exercise price of four dollars ($4.00) per share, an
exercise period of five (5) years from issuance, cashless exercise provisions and most favored nation provisions. NW Bio will
also make milestone payments to Cognate upon the achievement of mutually agreed operational milestones. Such milestones may
be included in the ongoing sub-agreements or work orders attached hereto as Exhibits, or may be otherwise agreed by the
parties. The securities issued to Cognate hereunder will be subject to a lock-up for up to thirty (30) months from
issuance, or such longer period as the parties may mutually agree. NW Bio will compensate Cognate for such-lock up on market based
terms, and such terms will be subject to most favored nation provisions with respect to any securities issuances, agreements or
exercises involving any other investor or creditor. Under the lock-up, Cognate will be prohibited from selling or trading the covered
securities in the market.
[*] Confidential treatment requested; certain information omitted
and filed separately with the SEC.
2.3 Reimbursement
of Expenses
In addition to the
payments for the services and expenses provided in this Section 2, NW Bio will reimburse all expenses, including travel-related
costs, incurred by Cognate in performing any Services hereunder and will pay an appropriate per diem amount.
2.4 Annual
Cost of Living Increases
All payment amounts
provided for pursuant to this Agreement will be subject to an annual increase of three percent (3%). The first increase will be
effective on the 12 month anniversary of the Effective Date this Agreement.
2.5 Form
and Timing of Payments
2.5.1 Payment
of Ancillary Services Bills will be due within fifteen (15) after the invoice date. In the event that NW Bio fails to pay any Ancillary
Services Bills within fifteen (15) days after the invoice date, then commencing thirty (30) days after the invoice date and continuing
until paid in full by cash and/or stock, the overdue amount will bear default interest at the rate of one and one-half percent
(1-1/2%) per month. If any collection action is undertaken to collect unpaid amounts, NW Bio will pay all fees and costs associated
with such collection actions including, without limitation, reasonable attorneys’ fees, as incurred.
2.5.2 At least
half of all Ancillary Services Bills during the first eighteen (18) months following the Effective Date of this Agreement (the
“Conversion Period”) will be paid in shares of NW Bio Common Stock, with the remaining portions of such Ancillary Services
Bills paid in cash. [*]. The conversion price for any conversions after the Conversion Period will be jointly determined by the
parties, based upon market factors. With respect to any shares of NW Bio Common Stock to be issued hereunder, Cognate may elect
to receive unregistered shares immediately (with registration rights as provided herein) or to receive registered shares on the
earliest date that any registered shares are issued to any other investors after the invoice date of the Ancillary Services Bill
(or Milestone and Initiation Payments) being converted.
[*] Confidential treatment requested; certain information omitted
and filed separately with the SEC.
2.6 Most
Favored Nation Terms
Notwithstanding anything
to the contrary herein, or in any other document or source, any amounts owed that are paid by NW Bio in shares, warrants and/or
other securities of any kind (including RSUs, convertible debt securities or other) issued or issuable in connection with this
Agreement (including any subsequent amendments hereof), will be subject to adjustment on a most favored nation basis relative to
the terms provided to any other investor or creditor of NW Bio during the Term of this Agreement, at Cognate’s election,
so that the terms of all shares, warrants and/or other securities issued or issuable under this Agreement will have terms no less
favorable to Cognate than the terms of any shares, warrants and/or other securities issued or issuable to any other investor or
creditor during the Term of this Agreement or the Lock-Up Agreement. For the avoidance of doubt, the application of most favored
nation treatment will include not only the price and terms of securities issued but also the addition of, and terms relating to,
additional securities, and additional rights and/or benefits to the investor or creditor (including warrants, rights of first refusal,
registration rights, pre-emptive rights, and/or other securities, rights or benefits). Such most favored nation adjustments may
be implemented at any time or times after being triggered by terms provided to other investors or creditors, and may be triggered
on multiple occasions with respect to a particular security issued hereunder.
2.7 [*]
[*]
SECTION 3: CONFIDENTIALITY
In connection with this
Agreement, the parties will execute and maintain a mutual Confidential Disclosure Agreement substantially in the form attached
hereto as an exhibit.
SECTION 4: REPRESENTATIONS
AND WARRANTIES
4.1 Agreement
Duly Authorized; Valid and Binding Obligations
Cognate and NW Bio each
hereby represents and warrants, severally and not jointly, that:
4.1.1 Such
party is a corporation or entity duly organized, validly existing and in good standing under the laws of the jurisdiction where
such party is domiciled, and has all necessary power and authority to (i) own, operate and occupy its properties and to carry on
its business as presently conducted and (ii) enter into this Agreement and the other agreements, instruments and documents contemplated
hereby, and to consummate the transactions contemplated hereby and thereby. Such party is qualified to do business and is in good
standing in each jurisdiction in which the failure to so qualify would have a material adverse effect.
4.1.2 All
necessary corporate or other proceedings, votes, resolutions, consents, waivers and approvals relating to the sale and purchase
of shares have been completed by the applicable party. Upon execution, this Agreement will constitute a valid and legally binding
obligation of the party, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited
by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.
[*] Confidential treatment requested; certain information omitted
and filed separately with the SEC.
4.2 Valid
Issuances; No Violation
NW Bio hereby represents
and warrants that:
Upon issuance hereunder,
each conversion share will be validly issued, fully paid and non-assessable. The execution, delivery, performance, issuance, sale
and delivery of this Agreement and compliance with the provisions hereof by NW Bio will not (a) violate any provision of NW Bio’s
certificate of incorporation or bylaws or, to the knowledge of NW Bio, any law, statute, rule or regulation applicable to NW Bio,
or any order, judgment or decree of any court, arbitrator, administrative agency or other governmental body applicable to NW Bio
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 NW Bio 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 NW Bio.
4.3 No
Warranties of Merchantability or Fitness
EXCEPT AS EXPRESSLY
SET FORTH IN THIS AGREEMENT, COGNATE MAKES NO WARRANTIES OR REPRESENTATIONS OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, BUT NOT
LIMITED TO, WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE OR MERCHANTABILITY, WITH RESPECT TO ANY ANCILLARY SERVICES RENDERED
HEREUNDER, OR ANY TECHNOLOGY THAT MAY BE USED IN OR INCORPORATED INTO SUCH SERVICES, OR ANY EQUIPMENT OR FACILITIES DEVELOPED,
PROVIDED OR USED IN CONNECTION WITH SUCH SERVICES, OR ANY PRODUCTS PRODUCED HEREUNDER.
SECTION 5: INSURANCE,
INDEMNIFICATION, LIABILITY
5.1 NW
Bio Insurance Obligations
NW Bio is required
to obtain and to maintain throughout the term of this Agreement, in such amounts as are reasonably acceptable to Cognate, (a) clinical
trial insurance covering all clinical trials of its DCVax® Products, (b) all-risks umbrella insurance, (c) product liability
insurance covering the distribution, use and administration of DCVax® Products to patients in expanded access, early access
and compassionate use programs as well as in commercialization, and (d) such other insurance as is reasonable or customary in the
industry. Cognate will be a named insured and beneficiary on all such insurance coverages.
5.3 Indemnification
In addition to all
rights and remedies available to Cognate at law or in equity, NW Bio will indemnify and hold harmless Cognate and its successors,
assigns, affiliates and their respective present and former directors, officers, partners, employees, agents, representatives,
shareholders, successors and assigns (each an "Indemnified Party") to the fullest extent permitted by law from and against
all costs, expenses, losses, claims, damages, liabilities, [*] (the foregoing, collectively, “Damages”) (a) arising
from or pursuant to or relating to this Agreement and/or any transactions or services contemplated hereunder, including any treatment
of patients and any claims for refunds or Damages by or on behalf of patients and/or medical personnel; (b) arising from or relating
to any changes from the original agreement of the parties as described herein, or arising from or relating to a delayed agreement,
or arising from or relating to delayed payment, delayed conversions and/or delayed issuances hereunder beyond the applicable Ancillary
Services Bill dates or other applicable reference dates and/or the most favored nation price applicable to such Ancillary Bill
conversions, (or to the Milestone and Initiation Payments), and (c) arising from or relating to any use or administration to patients
of DCVax® Products manufactured by Cognate, provided that Cognate has manufactured such DCVax® Products substantially in
accordance with the applicable specifications or SOPs for such DCVax® Products and/or with commercially reasonable deviation
from such SOPs. NW Bio will pay all fees and expenses (including reasonable attorneys’ fees), as incurred, which are incurred
by or on behalf of an Indemnified Party, or to which an Indemnified Party may become subject, in connection with any matters covered
by this indemnification and/or in connection with investigating, preparing, pursuing, defending and resolving any threatened or
pending claim, action, proceeding or investigation (collectively, “Proceedings") arising therefrom, whether or not such
Indemnified Party is a formal party to such Proceedings.
SECTION 6: TERM
AND TERMINATION
6.1 Term
This Agreement
will remain in force until the later of seven (7) years from the Effective Date (the “Term”) or five (5)
years after the first commercial sales of DCVax® Products
pursuant to a Biologics License Application or marketing authorization (not a compassionate use, early access, expanded
access or similar authorization), unless terminated earlier pursuant to Section 6.2.
6.2 Termination
Either party may terminate
this Agreement in the event of a material breach by the other party which remains uncured after notice of such breach for a period
of thirty (30) days in the case of a monetary breach, or a period of one hundred twenty (120) days in the case of a non-monetary
breach that is material to the contract taken as a whole. The non-breaching party will have all remedies for breach available at
law and in equity, including injunction or specific performance, regardless of whether such party elects to terminate this Agreement
or not.
[*] Confidential treatment requested; certain information omitted
and filed separately with the SEC.
SECTION 7: REGISTRATION
7.1. Unregistered
Shares.
For any conversion
shares issued hereunder which are unregistered under the Securities Act of 1933, as amended (the “Securities Act”)
at the time of issuance, the certificates evidencing such unregistered conversion shares may, if necessary, bear the following
legend (or a substantially similar legend) and such other legends as may be required by applicable laws:
“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.”
7.2 Registration.
Cognate will be entitled
to “piggyback” registration rights, with respect to all unregistered conversion shares issued hereunder and all other
shares and securities of NW Bio owned by Cognate and its affiliates, in any registrations effected by NW Bio until all such shares
and securities have been registered. NW Bio will use commercially reasonable efforts to complete such registrations by the earlier
of six (6) months after the Effective Date of this Agreement or six (6) months after issuance during the Term of this Agreement.
7.3 Registration
Costs.
NW Bio will bear all costs
and expenses (including attorneys’ fees) relating to the preparation and filing of all registrations which NW Bio is required
to undertake pursuant to this Agreement.
SECTION 8: MISCELLANEOUS
8.1 Governing
Law
This Agreement will be governed
by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of law.
8.2 Entire
Agreement
This Agreement (including
all exhibits hereto, which are automatically incorporated herein by reference when added hereto during the Term of this Agreement
in accordance with this Agreement) constitutes the entire agreement of the parties with respect to the subject matter hereof, and
supersedes all prior agreements, understandings, promises or undertakings with respect to the subject matter hereof, provided however,
that this Agreement is part of a package of agreements which also includes a DCVax®-L Services Agreement, DCVax®-Direct
Services Agreement and Manufacturing Expansion Services Agreement.
8.3 Amendments
Except as otherwise expressly
provided herein, this Agreement may not be amended except by a written instrument signed by both parties hereto.
8.4 Survival
The provisions of Sections
2 – 5, and 7-8 hereof will survive the expiration or termination of this Agreement until expiration of the applicable statutes
of limitations.
8.5 Notices
Any notices, consents,
waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will
be deemed to be effective upon delivery when delivered (a) personally; (b) by facsimile or email, provided a copy is mailed no
later than the next business day through a nationally recognized overnight delivery service; or (c) by overnight delivery through
a nationally recognized overnight delivery service, in each case properly addressed to the receiving party at such address or facsimile
number as the receiving party has furnished to the sending party in writing.
8.6 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.
8.7 Successors
and Assigns
Except as otherwise expressly
provided herein, the provisions hereof will be binding upon, and inure to the benefit of the respective successors, assigns, heirs,
executors and administrators of the parties hereto. Neither party hereto may transfer all or any portion of its rights under this
Agreement to a third party other than an affiliate without the prior written consent of the other party hereto.
8.8 Interpretations
All pronouns and any variations
thereof will be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or persons
or entity or entities may require. All references to “$” or dollars herein will be construed to refer to United States
dollars. The titles of the Sections and subsections of this Agreement are for convenience or reference only and are not to be considered
in construing this Agreement. All references to “including” will be deemed to mean “including, without limitation.”
8.9 Severability
If any provision of this
Agreement is determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions
will not in any way be affected or impaired thereby.
8.10 No
Waiver
No delay by a party hereto
in exercising or enforcing any rights hereunder will be deemed to be any waiver of such rights. No partial waiver of any right
or occurrence hereunder will be deemed to be any broader waiver or waiver of any other right or occurrence, and no waiver on one
occasion shall be deemed to be a waiver on any other occasion.
8.11 Counterparts
This Agreement may be executed
in counterparts, each of which when so executed and delivered will constitute a complete and original instrument but all of which
together will constitute one and the same agreement, and it will not be necessary when making proof of this Agreement or any counterpart
thereof to account for any counterpart other than the counterpart of the party against whom enforcement is sought.
[signatures on following
page]
IN WITNESS WHEREOF, the
parties have executed this Services Agreement effective as of the date first set forth above.
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Exhibit 10.43
Portions of this exhibit marked [*] are requested
to be treated confidentially.
MANUFACTURING EXPANSION SERVICES AGREEMENT
This Services Agreement
(this “Agreement”) is entered into, effective as of January 17, 2014 (the “Effective Date”),
by and between Cognate BioServices, a Delaware corporation (Cognate”), and Northwest Biotherapeutics, a Delaware corporation
(“NW Bio”).
RECITALS
WHEREAS, NW Bio is in
the business of developing immune cell therapies for cancer, and Cognate is in the business of manufacturing clinical grade cellular
products on a contract services basis;
WHEREAS, NW Bio and Cognate
previously entered into a Services Agreement for the production of NW Bio’s DCVax® Products by Cognate (the “Prior
Services Agreement”) and the Conversion and Lock-Up Agreement (the “Lock-Up Agreement”);
WHEREAS, Cognate has dedicated
cGMP facilities and other facilities to NW Bio programs, and conducted all of NW Bio’s physical operations including all
collections of patient tumor tissues and leukapheresis materials from clinical sites, all manufacturing, quality control, cryopreservation
and banking of all DCVax® Products, and all distribution and logistics to the point of care throughout the US, as well as management
and oversight of all such functions in Europe and Israel;
WHEREAS, both the quantity
and the scope of services NW Bio has requested that Cognate provide greatly exceed the maximum scope and amounts contemplated or
provided for in the Prior Services Agreement [*];
WHEREAS, NW Bio desires
[*];
WHEREAS, NW Bio has requested
Cognate to provide all necessary services to identify and evaluate potential sites for the manufacturing expansion [*];
[*];
[*];
WHEREAS, the parties also
desire to update and reformulate their existing Prior Services Agreement into a more comprehensive and complete set of four agreements
including (i) this Manufacturing Expansion Services Agreement; (ii) a DCVax-L Manufacturing and Services Agreement, (iii) a new
DCVax-Direct Manufacturing and Services Agreement, and (iv) a new Ancilliary Services Agreement.
[*] Confidential treatment requested; certain information omitted
and filed separately with the SEC.
AGREEMENT
Now,
Therefore, in consideration of the foregoing recitals and the mutual promises, representations, warranties, and covenants
hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereby agree as follows:
SECTION 1: SERVICES
1.1 Scope
of Services.
Cognate will provide
to NW Bio, on the terms and conditions set forth herein, the services required to identify, select, develop, obtain regulatory
approvals for, and put into operation [*] expanded manufacturing facilities (collectively, the “Manufacturing Expansion Services”
or the “Services”). Cognate will engage experts and other third parties as appropriate to assist with such services
[*]. Such Services will include the following:
1.1.1 Identification,
Evaluation, Selection and Acquisition of [*] Sites: Cognate will identify [*] sites which may be suitable for, or may be adapted
for, manufacturing of DCVax® Products. Cognate will will undertake evaluation of such [*] sites [*].
1.1.2 Design
and Engineering: For the [*] sites that are acquired, Cognate will develop the facility layout and design, [*].
[*]
[*]
[*]
[*]
[*]
1.1.8 Other
Services: In addition to the services provided for under the foregoing Sections 1.1.1 through 1.1.7, the parties will determine
any other services which may be required for manufacturing expansion, and the parties will develop work plans, timelines and budgets
for execution of such other services by Cognate pursuant to this Agreement.
1.2 Manufacturing
Expansion Locations
The parties currently
anticipate that the manufacturing of DCVax® Products will be structured on a regional basis, [*]. This regional approach will
enable the tumor tissue collections and leukapheresis collections to reach the manufacturing facilities within the necessary time
windows, while also enabling efficient operations with economies of scale.
[*] Confidential treatment requested; certain information omitted
and filed separately with the SEC.
[*]
[*]
[*]
[*]
SECTION 2: PAYMENTS
2.1 Payment
Terms for Manufacturing Expansion Services
2.1.1 The parties
will determine and agree upon the payment terms for the Manufacturing Expansion Services described in Section 1 hereof, subject
to the provisions of Section 2.5.2 hereof (for payment of at least half of all Ancillary Services Invoices in stock, with fifty
percent (50%) warrant coverage, [*], and such payment terms will be included in the sub-agreements or work orders for such Services
that are to be attached hereto as Exhibits. The parties will negotiate and decide all such payment terms in good faith on market
based terms, with due consideration of any special factors, such as accelerated timetables and related extra costs and difficulties.
2.1.2 For Manufacturing
Expansion Services which require dedicated equipment and/or facilities, the payment terms will include billing of the costs and
fees relating to such equipment and facilities to NW Bio. Likewise, for Manufacturing Expansion Services which require dedicated
personnel and/or systems or operations, the payment terms will include capacity charges as well as usage charges. The payment terms
for Manufacturing Expansion Services will cover a specified amount of such Services (e.g., for a specified site or facility), determined
by NW Bio. For Services in excess of the amounts NW Bio has contracted for, the payment terms will require payment at substantial
premium levels to cover the excess costs and difficulties of Cognate providing Services in excess of the amounts that NW Bio has
chosen and contracted for, and that have been budgeted and planned for.
2.1.3 If Cognate
sub-contracts, retains or otherwise arranges for third party experts or others to perform certain Manufacturing Expansion Services,
Cognate will undertake technology transfer to such third parties as needed, and will supervise and oversee performance of such
Services by such third parties as needed (collectively, the “Supervisory Services”), [*]. NW Bio will pay Cognate fees
for the Supervisory Services, and the amounts of such Supervisory Fees will be included in the applicable sub-agreement or work
order that is attached hereto as an exhibit and covers such Services.
[*] Confidential treatment requested; certain information omitted
and filed separately with the SEC.
2.2 Milestone
and Initiation Payment
Upon execution of
this Agreement, NW Bio will make an aggregate upfront payment (the “Milestone and Initiation Payment”) to Cognate
covering extensive preparatory work and an initiation payment relating to the initiation of substantial Manufacturing
Expansion Services on an urgent basis under this Agreement. NW Bio acknowledges and agrees that Cognate’s performance
of Manufacturing Expansion Services to date, including on an accelerated timetable, before even having an agreement in place,
have been of great value to NW Bio. NW Bio now needs a further expanded scope and amount of Manufacturing Expansion Services.
NW Bio will make Milestone and Initiation payments in connection with the launch of greatly expanded Manufacturing Expansion
Services pursuant to this Agreement, and in connection with milestones reached hereunder. The initial Milestone and
Initiation Payment will be made in the form of 1,071,287 shares of NW Bio Common Stock and Warrants exercisable for 511,142
shares of NW Bio Common Stock, with an exercise price of four dollars ($4.00) per share, an exercise period of five (5) years
from issuance, cashless exercise provisions and most favored nation provisions. NW Bio will also make milestone payments to
Cognate upon the achievement of mutually agreed operational milestones. Such milestones will be included in the ongoing
sub-agreements or work orders attached hereto as Exhibits, and/or may be otherwise agreed by the parties. The securities issued to Cognate hereunder will be subject to a lock-up for up to thirty (30) months from
issuance, or such longer period as the parties may mutually agree. NW Bio will compensate Cognate for such-lock up on market based
terms, and such terms will be subject to most favored nation provisions with respect to any securities issuances, agreements or
exercises involving any other investor or creditor. Under the lock-up, Cognate will be prohibited from selling or trading the covered
securities in the market.
2.3 Reimbursement
of Expenses
In addition to the
payments for the services and expenses provided in this Section 2, NW Bio will reimburse all expenses, including travel-related
costs, incurred by Cognate in performing any Services hereunder, and will pay an appropriate per diem amount.
2.4 Annual
Cost of Living Increases
All payment amounts
provided for pursuant to this Agreement will be subject to an annual increase of three percent (3%). The first increase will be
effective on the 12 month anniversary of the Effective Date this Agreement.
2.5 Form
and Timing of Payments
2.5.1 Payment
of Manufacturing Expansion Services Bills will be due within fifteen (15) after the invoice date. In the event that NW Bio fails
to pay any Manufacturing Expansion Services Bills within fifteen (15) days after the invoice date, then commencing thirty (30)
days after the invoice date and continuing until paid in full by cash and/or stock, the overdue amount will bear default interest
at the rate of one and one-half percent (1-1/2%) per month. If any collection action is undertaken to collect unpaid amounts, NW
Bio will pay all fees and costs associated with such collection actions including, without limitation, reasonable attorneys’
fees, as incurred.
2.5.2 At least
half of all Manufacturing Expansion Services Bills during the first eighteen (18) months following the Effective Date of this Agreement
(the “Conversion Period”) will be paid in shares of NW Bio Common Stock, with the remaining portions of such Manufacturing
Expansion Services Bills paid in cash. [*] The conversion price for any conversions after the Conversion Period will be jointly
determined by the parties, based upon market factors. With respect to any shares of NW Bio Common Stock to be issued hereunder,
Cognate may elect to receive unregistered shares immediately (with registration rights as provided herein) or to receive registered
shares on the earliest date that any registered shares are issued to any other investors after the invoice date of the Manufacturing
Expansion Services Bill being converted.
[*] Confidential treatment requested; certain information omitted
and filed separately with the SEC.
2.6 Most
Favored Nation Terms
Notwithstanding anything
to the contrary herein, or in any other document or source, any amounts owed that are paid by NW Bio in shares, warrants and/or
other securities of any kind (including RSUs, convertible debt securities or other) issued or issuable in connection with this
Agreement (including any subsequent amendments hereof), will be subject to adjustment on a most favored nation basis relative to
the terms provided to any other investor or creditor of NW Bio during the Term of this Agreement or the Lock-Up Agreement, at Cognate’s
election, so that the terms of all shares, warrants and/or other securities issued or issuable under this Agreement will have terms
no less favorable to Cognate than the terms of any shares, warrants and/or other securities issued or issuable to any other investor
or creditor during the Term of this Agreement. For the avoidance of doubt, the application of most favored nation treatment will
include not only the price and terms of securities issued but also the addition of, and terms relating to, additional securities,
and additional rights and/or benefits to the investor or creditor (including warrants, rights of first refusal, registration rights,
pre-emptive rights, and/or other securities, rights or benefits). Such most favored nation adjustments may be implemented at any
time or times after being triggered by terms provided to other investors or creditors, and may be triggered on multiple occasions
with respect to a particular security issued hereunder.
2.7 [*]
[*]
SECTION 3: CONFIDENTIALITY
In connection with this
Agreement, the parties will execute and maintain a mutual Confidential Disclosure Agreement substantially in the form attached
hereto as an exhibit.
SECTION 4: REPRESENTATIONS
AND WARRANTIES
4.1 Agreement
Duly Authorized; Valid and Binding Obligations
Cognate and NW Bio each
hereby represents and warrants, severally and not jointly, that:
4.1.1 Such
party is a corporation or entity duly organized, validly existing and in good standing under the laws of the jurisdiction where
such party is domiciled, and has all necessary power and authority to (i) own, operate and occupy its properties and to carry on
its business as presently conducted and (ii) enter into this Agreement and the other agreements, instruments and documents contemplated
hereby, and to consummate the transactions contemplated hereby and thereby. Such party is qualified to do business and is in good
standing in each jurisdiction in which the failure to so qualify would have a material adverse effect.
[*] Confidential treatment requested; certain information omitted
and filed separately with the SEC.
4.1.2 All
necessary corporate or other proceedings, votes, resolutions, consents, waivers and approvals relating to the sale and purchase
of shares have been completed by the applicable party. Upon execution, this Agreement will constitute a valid and legally binding
obligation of the party, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited
by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.
4.2 Valid
Issuances; No Violation
NW Bio hereby represents
and warrants that:
Upon issuance hereunder,
each conversion share will be validly issued, fully paid and non-assessable. The execution, delivery, performance, issuance, sale
and delivery of this Agreement and compliance with the provisions hereof by NW Bio will not (a) violate any provision of NW Bio’s
certificate of incorporation or bylaws or, to the knowledge of NW Bio, any law, statute, rule or regulation applicable to NW Bio,
or any order, judgment or decree of any court, arbitrator, administrative agency or other governmental body applicable to NW Bio
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 NW Bio 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 NW Bio.
4.3 No
Warranties of Merchantability or Fitness
EXCEPT AS EXPRESSLY
SET FORTH IN THIS AGREEMENT, COGNATE MAKES NO WARRANTIES OR REPRESENTATIONS OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, BUT NOT
LIMITED TO, WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE OR MERCHANTABILITY, WITH RESPECT TO ANY MANUFACTURING EXPANSION SERVICES
RENDERED HEREUNDER, OR ANY TECHNOLOGY THAT MAY BE USED IN OR INCORPORATED INTO SUCH SERVICES, OR ANY EQUIPMENT OR FACILITIES DEVELOPED,
PROVIDED OR USED IN CONNECTION WITH SUCH SERVICES, OR ANY PRODUCTS PRODUCED HEREUNDER.
SECTION 5: INSURANCE,
INDEMNIFICATION, LIABILITY
5.1 NW
Bio Insurance Obligations
NW Bio is required
to obtain and to maintain throughout the term of this Agreement, in such amounts as are reasonably acceptable to Cognate, (a) clinical
trial insurance covering all clinical trials of its DCVax® Products, (b) all-risks umbrella insurance, (c) product liability
insurance covering the distribution, use and administration of DCVax® Products to patients in expanded access, early access
and compassionate use programs as well as in commercialization, and (d) such other insurance as is reasonable or customary in the
industry. Cognate will be a named insured and beneficiary on all such insurance coverages.
5.2 Cognate
Insurance Obligations
Cognate is required
to obtain and to maintain throughout the term of this Agreement, in such amounts as are reasonably acceptable to NW Bio, (a) product
liability insurance covering the manufacture of its DCVax® Products by Cognate, and (b) such other insurance as is reasonable
or customary in the industry. NW Bio will be a named insured and beneficiary on all such insurance coverages.
5.3 Indemnification
In addition to all
rights and remedies available to Cognate at law or in equity, NW Bio will indemnify and hold harmless Cognate and its successors,
assigns, affiliates and their respective present and former directors, officers, partners, employees, agents, representatives,
shareholders, successors and assigns (each an "Indemnified Party") to the fullest extent permitted by law from and against
all costs, expenses, losses, claims, damages, liabilities, [*] (the foregoing, collectively, “Damages”) (a) arising
from or pursuant to or relating to this Agreement and/or any transactions or services contemplated hereunder, including any treatment
of patients and any claims for refunds or Damages by or on behalf of patients and/or medical personnel; (b) arising from or relating
to any changes from the original agreement of the parties as described herein, or arising or relating to a delayed agreement, or
arising from or relating to delayed payment, delayed conversions and/or delayed issuances hereunder beyond the applicable Manufacturing
Services Bill dates or other applicable reference dates and/or the most favored nation price applicable to such Manufacturing Bill
conversions, or to the Milestone and Initiation Payments, and (c) arising from or relating to any use or administration to patients
of DCVax® Products manufactured by Cognate, provided that Cognate has manufactured such DCVax® Products substantially in
accordance with the applicable specifications or SOPs for such DCVax® Products and/or with commercially reasonable deviation
from such SOPs. NW Bio will pay all fees and expenses (including reasonable attorneys’ fees), as incurred, which are incurred
by or on behalf of an Indemnified Party, or to which an Indemnified Party may become subject, in connection with any matters covered
by this indemnification and/or in connection with investigating, preparing, pursuing, defending and resolving any threatened or
pending claim, action, proceeding or investigation (collectively, “Proceedings") arising therefrom, whether or not such
Indemnified Party is a formal party to such Proceedings.
SECTION 6: TERM
AND TERMINATION
6.1 Term
This Agreement
will remain in force until the later of until the later of seven (7) years from the Effective Date (the “Term”)
or five (5) years after the first commercial sales of DCVax®
Products pursuant to a Biologics License Application or marketing authorization (not a compassionate use, early
access, expanded access or similar authorization), unless terminated earlier pursuant to Section 6.2.
6.2 Termination
Either party may terminate
this Agreement in the event of a material breach by the other party which remains uncured after notice of such breach for a period
of thirty (30) days in the case of a monetary breach, or a period of one hundred twenty (120) days in the case of a non-monetary
breach that is material to the contract taken as a whole. The non-breaching party will have all remedies for breach available at
law and in equity, including injunction or specific performance, regardless of whether such party elects to terminate this Agreement
or not.
SECTION 7: REGISTRATION
7.1. Unregistered
Shares.
For any conversion
shares issued hereunder which are unregistered under the Securities Act of 1933, as amended (the “Securities Act”)
at the time of issuance, the certificates evidencing such unregistered conversion shares may, if necessary, bear the following
legend (or a substantially similar legend) and such other legends as may be required by applicable laws:
“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.”
7.2 Registration.
Cognate will be entitled
to “piggyback” registration rights, with respect to all unregistered conversion shares issued hereunder and all other
shares and securities of NW Bio owned by Cognate and its affiliates, in any registrations effected by NW Bio until all such shares
and securities have been registered. NW Bio will use commercially reasonable efforts to complete such registrations by the earlier
of six (6) months after the Effective Date of this Agreement or six (6) months after issuance during the Term of this Agreement.
7.3 Registration
Costs.
NW Bio will bear all costs
and expenses (including attorneys’ fees) relating to the preparation and filing of all registrations which NW Bio is required
to undertake pursuant to this Agreement.
SECTION 8: MISCELLANEOUS
8.1 Governing
Law
This Agreement will be governed
by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of law.
8.2 Entire
Agreement
This Agreement (including
all exhibits hereto, which are automatically incorporated herein by reference when added hereto during the Term of this Agreement
in accordance with this Agreement) constitutes the entire agreement of the parties with respect to the subject matter hereof, and
supersedes all prior agreements, understandings, promises or undertakings with respect to the subject matter hereof, provided however,
that this Agreement is part of a package of agreements which also includes a DCVax®-L Services Agreement, DCVax®-Direct
Services Agreement and Manufacturing Expansion Services Agreement.
8.3 Amendments
Except as otherwise expressly
provided herein, this Agreement may not be amended except by a written instrument signed by both parties hereto.
8.4 Survival
The provisions of Sections
2 – 5, and 7 hereof will survive the expiration or termination of this Agreement until expiration of the applicable statute
of limitations.
8.5 Notices
Any notices, consents,
waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will
be deemed to be effective upon delivery when delivered (a) personally; (b) by facsimile or email, provided a copy is mailed no
later than the next business day through a nationally recognized overnight delivery service; or (c) by overnight delivery through
a nationally recognized overnight delivery service, in each case properly addressed to the receiving party at such address or facsimile
number as the receiving party has furnished to the sending party in writing.
8.6 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.
8.7 Successors
and Assigns
Except as otherwise expressly
provided herein, the provisions hereof will be binding upon, and inure to the benefit of the respective successors, assigns, heirs,
executors and administrators of the parties hereto. Neither party hereto may transfer all or any portion of its rights under this
Agreement to a third party other than an affiliate without the prior written consent of the other party hereto.
8.8 Interpretations
All pronouns and any variations
thereof will be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or persons
or entity or entities may require. All references to “$” or dollars herein will be construed to refer to United States
dollars. The titles of the Sections and subsections of this Agreement are for convenience or reference only and are not to be considered
in construing this Agreement. All references to “including” will be deemed to mean “including, without limitation.”
8.9 Severability
If any provision of this
Agreement is determined to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions
will not in any way be affected or impaired thereby.
8.10 No
Waiver
No delay by a party hereto
in exercising or enforcing any rights hereunder will be deemed to be any waiver of such rights. No partial waiver of any right
or occurrence hereunder will be deemed to be any broader waiver, or waiver of any other right or occurrence, and no waiver on one
occasion shall be deemed to be a waiver on any other occasion.
8.11 Counterparts
This Agreement may be executed
in counterparts, each of which when so executed and delivered will constitute a complete and original instrument but all of which
together will constitute one and the same agreement, and it will not be necessary when making proof of this Agreement or any counterpart
thereof to account for any counterpart other than the counterpart of the party against whom enforcement is sought.
[signatures on following
page]
IN WITNESS WHEREOF, the
parties have executed this Manufacturing Expansion Services Agreement effective as of the date first set forth above.
NORTHWEST |
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COGNATE BIOSERVICES, INC. |
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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EXHIBIT 31.1
SECTION 302 CERTIFICATION
I, Linda F. Powers, certify that:
(1) I
have reviewed this quarterly report on Form 10-Q of Northwest Biotherapeutics, Inc.;
(2) Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
the period covered by this report;
(3) Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented
in this report;
(4) I
am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15 (f)), for
the registrant and have:
(a) Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its condensed consolidated subsidiaries, is made known
to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
and
(d) Disclosed
in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
(5) I
have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors
and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
(a) All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and
(b) Any
fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: December 12, 2014 |
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/s/ Linda F. Powers |
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Name: |
Linda F. Powers |
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Title: |
President and Chief Executive Officer |
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Principal Executive Officer |
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Principal Financial and Accounting Officer |
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