Item 1.01. Entry into a Definitive Material Agreement
As previously reported, on August 19, 2014, the Company issued $17.5 million
aggregate principal amount of 5.00% Convertible Senior Notes due 2017 (the
"Notes"). The Notes are governed by an indenture, dated as of August 19, 2014,
between the Company and The Bank of New York Mellon, as trustee.
The interest rate on the Notes is 5.00% per year, payable semiannually in
arrears on February 15 and August 15 of each year, beginning on February 15,
The Notes will mature on August 15, 2017, unless previously converted or
repurchased. The Notes are unsecured obligations of the Company, except that the
interest payments are secured by funds that have been set aside in an escrow
account for that purpose.
Holders may convert the Notes at their option prior to February 15, 2017 when or
if certain thresholds have been met or circumstances occur, such as the
Company's stock price exceeds 130% of the conversion price under the Notes for a
period of time, or the trading price of the Notes is less than 98% of the
conversion price under the Notes for a designated period of time, or certain
other specified corporate events occur. In addition, holders may convert their
Notes at any time on or after February 15, 2017 and prior to maturity.
The initial conversion price is $7.30 per share (defined in the indenture as a
conversion rate of 136.9113 shares of the Company's common stock per $1,000
principal amount of Notes). The conversion price is subject to customary
adjustment events specified in the indenture (including in connection with a
"make-whole fundamental change" as defined in the Indenture). In addition, the
conversion price is subject to a one-time possible re-set on February 15, 2015,
to 110% of the Company's stock price at that time, if that price per share would
be lower than the initial conversion price of $7.30, but in no event may the
conversion price be re-set more than 20% downward from the initial conversion
price of $7.30. Holders who convert their Notes after February 15, 2015 will, in
certain circumstances specified in the indenture, be entitled to receive an
interest make-whole payment payable in shares of common stock of the Company.
The Indenture also contains other customary terms for transactions of this type,
including a right of note holders, subject to certain conditions, to require the
Company to repurchase the Notes in the event of a "fundamental change" (as
defined in the indenture) involving the Company.
The indenture also provides for customary events of default which include,
without limitation, the following: default in any payment of interest which
continues for a period of 30 days; default in the payment of principal of any
note when due and payable (whether at stated maturity, upon any required
purchase or otherwise); the Company's failure to comply with its conversion
obligations under the notes; certain defaults by the Company or any of its
significant subsidiaries with respect to certain indebtedness in excess of $10.0
million; and certain events of bankruptcy, insolvency, or reorganization with
respect to the Company or any of its significant subsidiaries; or the pledge and
escrow agreement relating to the interest escrow provided for the interest
payments for the Notes ceases to be in full force and effect or enforceable
prior to its expiration due to a default that fails to be cured within 30 days
The summary of the foregoing is qualified in its entirety by reference to the
text of the Indenture, which is filed as Exhibit 4.1 with this Current Report on
Form 8-K and is incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under the heading "Indenture" in Item 1.01 of this
Current Report on Form 8-K is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
4.1 Indenture dated August 19, 2014, by and between Northwest
Biotherapeutics, Inc. and The Bank of New York Mellon for 5.00%
Convertible Senior Notes due 2017.
4.2 Form of 5.00% Convertible Senior Note due 2017 (included in Exhibit
10.1 Pledge and Escrow Agreement dated August 19, 2014, by and among
Northwest Biotherapeutics, Inc., The Bank of New York Mellon, as
trustee, and The Bank of New York Mellon, as escrow agent.