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IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

TERRICE THARP and CLARENCE HENKEL, Individually, on Behalf of All Others Similarly Situated, and Derivatively on Behalf of Nominal Defendant NORTHWEST BIOTHERAPEUTICS, INC.,

) ) ) ) ) ) )

Plaintiff,

) )

v.

) )

C.A. No. 11179-VCP

COGNATE BIOSERVICES, INC., TOUCAN PARTNERS, LLC, TOUCAN CAPITAL FUND III, L.P., LINDA F. POWERS, ALTON L. BOYNTON, ROBERT A. FARMER, NAVID MALIK and JERRY JASINOWSKI, Defendants,

) ) ) ) ) ) ) ) ) ) ) )

PUBLIC INSPECTION VERSION FILED NOVEMBER 16, 2015

and

) )

NORTHWEST BIOTHERAPEUTICS, INC.,

) ) )

Nominal Defendant. )

VERIFIED AMENDED CLASS ACTION

AND DERIVATIVE COMPLAINT

Plaintiffs Terrice Tharp and Clarence Henkel (“Plaintiffs”), by and through

their undersigned counsel, upon knowledge as to themselves and upon information

and belief as to all other matters, allege as follows:

EFiled: Nov 16 2015 04:08PM EST Transaction ID 58170305

Case No. 11179-VCP

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1. Plaintiffs bring this action individually, as a class action on behalf of

themselves and all other similarly situated minority stockholders of Northwest

Biotherapeutics, Inc. (“NWBO” or the “Company”) (the “Class,” as defined

herein), and derivatively on behalf of nominal defendant NWBO against its

controlling stockholders and the members of its Board of Directors (the “Board”),

to remedy defendants’ breaches of fiduciary duty. Over the past decade, NWBO’s

controlling stockholder Linda Powers (“Powers”) – with the help of the

Company’s conflicted Board – has orchestrated a scheme by which NWBO has

habitually overpaid for “services” provided to it by another Powers-controlled

entity called Cognate BioServices, Inc. (“Cognate”), resulting in a massive and

unfair transfer of economic value and voting power to Powers at the expense of

NWBO and its minority stockholders.

NATURE OF THE ACTION

2. NWBO is a publicly traded biotechnology company that has never

turned a profit since its inception in March 1996. As disclosed within its filings

with the United States Securities and Exchange Commission (“SEC”), the

Company “may never achieve or sustain profitability.”

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3. In Forms 10-K filed by NWBO with the SEC for fiscal years 2003

through 2014, the Company’s independent auditors have routinely expressed

substantial doubt as to NWBO’s ability to continue as a going concern.1

4. At all times relevant hereto, NWBO has been controlled by defendant

Powers, who is NWBO’s Chairperson, Chief Executive Officer (“CEO”) and

Principal Accounting Officer. Together with her affiliated entities, defendants

Toucan Capital Fund III, L.P. (“Toucan Capital”) and Toucan Partners, LLC

(“Toucan Partners,” and together with Toucan Capital, “Toucan”) and Cognate,

which Powers also controls, she is NWBO’s largest stockholder and Powers and

her affiliates are identified by the Company as the “principal holders” of NWBO’s

common stock.

5. From 2004 to the present, NWBO has received ongoing financing

from Toucan and Cognate through the purchase of common stock, preferred stock

(which was all converted to common stock), loans and debt securities. Cognate,

however, is not only a creditor of the Company and a large stockholder, it is also

NWBO’s primary manufacturer. NWBO does not manufacture its own products

or run its own clinical trials. Rather, NWBO contracts with Cognate to provide

these services, and it does so at above-market prices. 1 These opinions were expressed by the following independent auditors: KPMG LLP (for fiscal years 2002 and 2003); Peterson Sullivan LLP (for fiscal years 2004 through 2012); and Marcum LLP (for fiscal years 2013 and 2014).

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6. Despite several successful debt offerings, including issuances of

promissory notes in October 2008 ($1,000,000 principal amount at 12% annual

interest), November 2008 ($1,650,000 principal amount at 12% annual interest),

March 2009 ($110,000 principal amount at 6% annual interest), April 2009

($1,100,000 principal amount at 6% annual interest), August 2012 ($1,105,000

principal amount at 8% annual interest), September 2012 ($500,000 principal

amount at 8% annual interest), and August 2014 ($17,500,000 principal amount at

5% annual interest), NWBO has historically suffered from a chronic shortage of

cash. The Company, therefore, was not timely paying Cognate’s invoices, but

rather was allowing the invoices to remain payable for months or years.

7. In early 2013, NWBO filed a prospectus and registration statement for

the sale of up to $100 million of NWBO common stock and warrants. The

registration statement became effective on February 5, 2013. On April 22, 2013,

the Company filed a supplement to the prospectus for the sale of 2,564,103 units,

with each unit consisting of one share of NWBO common stock and a warrant to

purchase 0.4 shares of common stock. All of the units reflected in the April 22,

2013 prospectus supplement were sold to a single, unidentified institutional

investor, which acquired 2,564,103 shares of common stock and warrants to

purchase a total of 1,025,641 shares of NWBO common stock at an exercise price

of $4.29 per share. The effect of the sale of the common stock (i.e., excluding the

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sale of the warrants) in the April 2013 offering was to reduce Powers’ ownership

from 52.93% to 49.30% on a fully diluted basis.

8. In July 2013, pursuant to an agreement reached between the Powers-

led Board and Powers-led Cognate, NWBO agreed to “convert” half of Cognate’s

outstanding invoices and at least half of future invoices into NWBO equity valued

at a fixed value of $4.00 per share (the “Conversion Price Arrangement”). At the

time, $4.00 per share was slightly above the market price of NWBO stock. The

immediate effect of the Conversion Price Arrangement was to increase Powers’

ownership from 49.30% to 52.95% on a fully diluted basis. It also ensured that

Powers would be protected against dilution resulting from future stock offerings by

the Company, including one that was announced just ten days later.

9. Additionally, on or about January 24, 2014, NWBO entered into four

manufacturing and service agreements with Cognate, pursuant to which at least

half of NWBO’s payments to Cognate thereunder would be in NWBO equity, also

at a fixed value of $4.00 per share (the “2014 Agreements”). At the time,

NWBO’s stock was trading at $5.05 per share.

10. As the market price of NWBO stock rose well above $4.00 in the

second half of 2013 and throughout 2014 and the first half of 2015, the Conversion

Price Arrangement and the 2014 Agreements resulted in NWBO repeatedly paying

Cognate invoices using NWBO stock and warrants that provided significant

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premiums above the invoiced amounts (the “Conversions”) and further diluted the

minority stockholders while allowing Powers to maintain control of the Company.

11. As the controlling stockholders of NWBO, Defendants Powers,

Toucan and Cognate stood on both sides of the Conversion Price Arrangement,

2014 Agreements and all Conversions undertaken pursuant thereto. Thus, the

Board was required – but failed – to ensure that the Conversion Price

Arrangement, 2014 Agreements and each of the Conversions were entirely fair to

NWBO and its minority stockholders.

12. On September 19, 2014 and November 17, 2014, respectively,

Plaintiffs Tharp and Henkel, stockholders of NWBO, made demands to inspect the

books and records of NWBO pursuant to 8 Del. C. § 220 (the “220 Demands”) to

obtain documents regarding a number of transactions between NWBO on the one

hand and Toucan, Cognate and/or certain of NWBO’s directors and officers on the

other, including documents pertaining to the Conversion Price Arrangement and

the 2014 Agreements.

13. In response to Plaintiffs’ 220 Demands and the subsequent initiation

of Section 220 litigation, the Company agreed to produce, among other things,

“[b]ooks and records, if any, constituting the Board and committee minutes and

materials concerning” the Conversion Price Arrangement, 2014 Agreements and

certain other transactions.

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14. The documents produced by the Company in response to Plaintiffs’

220 Demands reveal that the Board did not (i) form a special committee of

independent directors to evaluate and approve the Conversion Price Arrangement,

2014 Agreements or subsequent Conversions pursuant thereto; (ii) retain any

independent legal counsel, financial advisor, or other advisors or experts to advise

it in connection with the Conversion Price Arrangement, 2014 Agreements or

Conversions; (iii) obtain any “fairness opinions” regarding the Conversion Price

Arrangement, 2014 Agreements or Conversions; (iv) engage in any meaningful

negotiations with Cognate or Powers regarding the terms of the Conversion Price

Arrangement, 2014 Agreements or the Conversions; or (v) consider any alternative

transactions or terms. In other words, the Board did nothing to ensure that the

terms of the Conversion Price Arrangement, 2014 Agreements or Conversions

were entirely fair to NWBO and its minority stockholders, even though those terms

provided Cognate significant premiums above the amounts that it invoiced.

15. Indeed, the Conversion Price Arrangement and 2014 Agreements

were not entirely fair to NWBO and its minority stockholders, because as the

Company’s stock price has risen, the Conversion Price Arrangement and 2014

Agreements have resulted in Cognate receiving millions of dollars of stock and

warrants in excess of the amounts owed on Cognate’s invoices.

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16. In breach of their fiduciary duties owed to NWBO and its minority

stockholders, the Defendants (as defined herein) wrongfully caused and allowed

the Company to agree to the Conversion Price Arrangement and 2014 Agreements

and engage in the self-dealing Conversions to benefit Powers and her affiliates at

the expense of NWBO and its minority stockholders. As a result of the issuance of

the excessive NWBO stock and warrants paid to Cognate under the Conversion

Price Arrangement and 2014 Agreements, the minority stockholders of NWBO

have suffered substantial economic and voting power dilution.

17. Plaintiffs bring this action to (i) remedy the improper Conversion

Price Arrangement, 2014 Agreements and self-dealing Conversions, and (ii)

compel Powers, Toucan and Cognate to disgorge to NWBO the excessive

payments and/or benefits received in connection with the Conversions.

18. Plaintiff Tharp is a stockholder of NWBO and has been a stockholder

of NWBO continuously since December 12, 2012.

PARTIES

19. Plaintiff Henkel is a stockholder of NWBO and has been a

stockholder of NWBO continuously since December 3, 2013.

20. Nominal Defendant NWBO is a Delaware corporation with its

principal place of business located at 4800 Montgomery Lane, Suite 800,

Bethesda, Maryland 20814. Shares of NWBO’s common stock are traded on the

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NASDAQ under the ticker symbol “NWBO.” NWBO describes itself as “a

biotechnology company focused on developing immunotherapy products to treat

cancers more effectively than current treatments, without toxicities of the kind

associated with chemotherapies, and, through a proprietary batch manufacturing

process, on a cost-effective basis, initially in both the United States and Europe.”

According to the Company’s most recent annual report, NWBO has twelve full-

time employees.

21. Defendant Powers has served as Chairperson of the Board since May

17, 2007 and as the Company’s CEO since June 8, 2011. She also serves as

NWBO’s Principal Executive Officer and Principal Accounting Officer. Powers

served as a managing director of Toucan Capital Fund II from 2001 to 2010, and

has served as a managing director of Toucan Capital thereafter. She is also the

sole director of Cognate. At all times relevant hereto, Defendant Powers and her

affiliates (i.e., Cognate, Toucan Capital and Toucan Partners) have been the

controlling stockholders of NWBO. In the Company’s proxy statements filed with

the SEC on January 18, 2012, August 16, 2012, December 3, 2013, and November

26, 2014 (the “2011 Proxy,” “2012 Proxy,” “2013 Proxy,” and “2014 Proxy,”

respectively), NWBO listed Powers and her affiliates as the beneficial owners of at

least 50% of the Company’s outstanding common stock. The Company’s proxy

statement filed with the SEC on November 6, 2015 (the “2015 Proxy”) lists

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Powers and her affiliates as the beneficial owners of 44.88% of the Company’s

outstanding stock, consisting of

(i) 1,572,200 shares held by Ms. Powers; (ii) 592,500 shares of common stock underlying currently exercisable options held by Ms. Powers; (iii) 804,145 shares of common stock held by Toucan Capital Fund III, L.P.; (iv) 1,732,246 shares of common stock underlying currently exercisable warrants held by Toucan Capital; (v) 2,211,784 shares of common stock held by Toucan Partners, LLC; (vi) 1,505,739 shares of common stock underlying currently exercisable warrants held by Toucan Partners; (vii) 12,645,996 shares of common stock underlying warrants held by Cognate Bioservices, Inc.; and (viii) 27,194,366 shares of common stock held by Cognate Bioservices, Inc.

Powers entered into a two-year employment agreement in May 2011. According

to the Company’s most recent annual report, that contract expired under its terms.

The Company’s most recent annual report and proxy statement do not disclose the

terms of Powers’ employment since the expiration of that contract. Powers holds a

B.A. in economics from Princeton University, where she graduated magna cum

laude and Phi Beta Kappa. She also earned a J.D., magna cum laude, from

Harvard Law School. As a lawyer, Powers specialized in corporate mergers,

acquisitions, and financings and certain kinds of intellectual property transactions.

Powers also formerly served as Senior Vice President of Global Finance at Enron

Corporation, though it is not reflected in the Company’s description of Powers in

any of its proxy statements or the Company’s website.

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22. Defendant Toucan Capital is a Delaware limited partnership with its

corporate headquarters located at 4800 Montgomery Lane, Suite 801, Bethesda,

Maryland 20814, in the same building and on the same floor as NWBO. It is a

venture capital fund focused on regenerative medicine and immune therapy

investments. NWBO’s Forms 10-K filed with the SEC on March 17, 2015, April

8, 2013, and April 13, 2012 (the “2015 10-K,” “2013 10-K,” and “2012 10-K,”

respectively) state that Powers controls Toucan Capital.

23. Defendant Toucan Partners is a Delaware limited liability company

with its corporate headquarters also located at 4800 Montgomery Lane, Suite 801,

Bethesda, Maryland 20814. The 2015 10-K, 2013 10-K, and 2012 10-K state that

Powers controls Toucan Partners.

24. Defendant Cognate is a Delaware corporation with its corporate

headquarters located at 7513 Connelley Drive, Hanover, Maryland 21076.

According to its website, Cognate is “a fully-integrated contract bioservices

organization” that “provides full development and cGMP [current good

manufacturing practice] services to companies and institutions engaged in the

development of cell-based products.” Cognate provides manufacturing and other

services to NWBO. The State of Delaware’s Annual Franchise Tax Report for

Cognate for tax year 2014 states that Cognate has no officers and only one director,

Defendant Powers. Toucan Capital holds a majority interest in Cognate, and thus

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Powers, through her controlling interest in Toucan Capital and control of the

Cognate board of directors, controls Cognate.

25. Defendant Alton L. Boynton is a co-founder of NWBO and has served

as its Chief Scientific Officer and a director since its inception in 1998. He was

appointed as NWBO’s Chief Operating Officer in August 2001, President in May

2003, and served as the Company’s CEO from June 2007 to June 2011.

26. Defendant Robert A. Farmer has served as a director of NWBO since

December 2009.

27. Defendant Navid Malik has served as a director of NWBO since April

2012. From 2005 to 2008, Malik was a Senior Life Sciences Analyst at Collins

Stewart, NWBO’s “house broker”, and Malik frequently promoted the Company’s

stock. From 2008 to 2011, Malik was a Partner and Head of Life Sciences in the

Matrix Investment Banking Division of Matrix Group, a financial services firm in

London. As discussed below, as an employee of Matrix Corporate Capital, also

part of the Matrix Group, in 2010 Malik issued a research report on NWBO that

the Company used for marketing purposes. In addition, Malik served as the

incorporator for an entity that NWBO has disclosed is majority owned by

Defendant Powers.

28. Defendant Jerry Jasinowski has served as a director of NWBO since

April 2012.

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29. Defendants Powers, Boynton, Farmer, Malik and Jasinowski are

referred to collectively herein as the “Individual Defendants” or the “Board.” The

Individual Defendants, Cognate, Toucan Partners and Toucan Capital are referred

to collectively herein as “Defendants.”

SUBSTANTIVE ALLEGATIONS

30. NWBO is a development stage biotechnology company. The

Company purports to have developed a platform technology, DCVax®, which uses

activated dendritic cells to mobilize a patient’s own immune system to attack

cancer. The DCVax technology is expected to be applicable to most cancers, and

is embodied in several distinct product lines. One of the product lines (DCVax®-

L) is designed to cover all solid tumor cancers in which the tumors can be

surgically removed. Another product line (DCVax®-Direct) is designed for all

solid tumor cancers that are considered inoperable and cannot be surgically

removed.

NWBO, Toucan and Cognate

31. Toucan is a venture capital fund focused on regenerative medicine and

immune therapy investments, allocating investment money into pioneering

research areas that have difficulty obtaining funding from other sources. As

Managing Director and Co-Founder of Toucan, Powers helped form Cognate in

2002.

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32. Cognate is a fully integrated contract bioservices organization that

purportedly provides “scientific and management expertise.” In 2004, NWBO

entered into a service agreement with Cognate. Under this service agreement,

which was renewed in 2007, 2011 and 2014, NWBO agreed to utilize Cognate’s

services in the manufacturing of DCVax technology, research and development

preclinical activities, and managing clinical trials. The annual costs recognized by

NWBO in relation to the Services Agreement with Cognate increased drastically

between 2011 and 2013. According to the Company’s 2012 and 2013 Forms 10-K,

the annual costs recognized were $4 million in 2011, $16.5 million in 2012, and

$25.4 million in 2013.

33. Since 2011, when NWBO started its Phase III trial of DCVax, NWBO

has recorded a total of $220 million of research and development costs. A July

2014 “Examination of Clinical Trial Costs and Barriers for Drug Development” by

the U.S. Department of Health and Human Services, reflected the costs of a Phase

III oncology study to be $22.1 million. According to a report published October

28, 2015, by recognized pharma research firm Phase Five titled “Northwest

Biotherapeutics House of Cards is Ready to Collapse” (the “Phase Five Report”)

research and development costs associated with comparable Phase III clinical trials

generally range between $30 and $60 million. In addition, a 2013 report issued by

Cutting Edge Information, a medical management consulting firm, found that the

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average per-patient cost of a Phase III oncology clinical trial is $74,800. There are

currently 348 patients enrolled in NWBO's Phase III clinical trial for DCVax-L,

which would result in total costs of approximately $26 million. All of this

indicates a massive undue transfer of value from NWBO to Cognate (i.e., Powers).

34. According to the Company, NWBO relies upon Cognate to produce

all of its DCVax® product candidates in the United States and to supervise the

production of its DCVax® product candidates outside the United States.

35. The Company relies so heavily on Cognate that difficulties, delays or

interruptions in the manufacturing and supply of the DCVax product candidates by

Cognate could require NWBO to stop enrolling new patients into its trials, and/or

require it to stop the trials or other programs, increase its costs, damage its

reputation and, if product candidates are approved for sale, cause it to lose revenue

or market share. Any of these events could be catastrophic for NWBO’s

operations and/or stock price.

36. Powers is the Chairperson, President, CEO, Principal Executive

Officer and Principal Accounting Officer of NWBO. Powers’ combined roles

provide her broad authority and the Company affords her deference with respect to

matters that come before the Board. According to the 2014 Proxy, “Powers

…is…best positioned to develop Company strategies, business plans and priorities,

and corresponding Board agendas that ensure that the Board’s time and attention

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are focused on the most critical matters.” (Emphasis added). Powers is therefore

the “gatekeeper” to the Board, as the Board agenda naturally dictates the content of

meetings and the related discourse. The Board has not appointed a lead

independent director.

37. Since 2007, the year Powers became Chairperson, NWBO has raised a

total of approximately $250 million in cash and recorded losses of more than $570

million.

38. Based on NWBO management’s evaluation as of December 31, 2014,

the Company suffered from numerous material weaknesses in its internal control

over financial reporting, including lack of controls in place, including those

surrounding related-party transactions, to ensure that all material transactions and

developments impacting the financial statements are reflected and properly

recorded.

39. Powers is also the Co-Founder and Managing Director of Toucan.

Powers is currently the sole director of Cognate, a majority of which is owned by

Toucan Capital.

40. According to the 2014 Proxy and 2013 Proxy, as of October 31, 2014

and October 31, 2013, respectively, defendant Powers beneficially owned 50.67%

and 51.35% of NWBO’s common stock on a fully diluted basis through her direct

ownership of NWBO common stock and exercisable options and warrants, as well

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as those of Toucan and Cognate, over which Powers holds voting and dispositive

power. NWBO’s 2014 10-K incorporated by reference the stock ownership

information reported in the 2014 Proxy.

41. On April 30, 2015, NWBO filed with the SEC a Form 10-K/A for

fiscal year 2014 that updated the stock ownership information to reflect the

consummation of a private placement of newly issued shares of common stock,

reporting that Powers beneficially owned 48.07% of NWBO’s common stock on a

fully diluted basis. In addition, the Form 10-K/A revealed that the shares of

common stock underlying the options and warrants—controlled by Powers through

Cognate and Toucan—are “currently exercisable” at the will of Powers. This is

because the Company’s stock price exceeds the strike price identified in the

agreements underlying the options and warrants, permitting conversion at any

time. Also, upon information and belief, any standstill provision initially entered

into between Cognate and/or Toucan on the one hand and the Company on the

other prohibiting Cognate and/or Toucan from converting and selling the

underlying shares of common stock has long expired. Furthermore, as the NWBO

CEO and as the controller of Cognate, Powers can cause the Company to pay

Cognate in common stock under the Conversion Price Arrangement and the 2014

Agreements. Thus, Powers, “at her will,” can exercise Cognate and Toucan’s

rights under the conversion agreements and convert the options and warrants to

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maintain majority ownership of the Company’s common stock. During all times

alleged herein, Powers did and does now have the ability to dominate, control and

exert substantial influence over any matter coming before the NWBO Board.

42. In light of her (i) ownership, both directly and through Toucan and

Cognate, of a majority or near-majority of NWBO’s common stock, including

warrants and options exercisable “at her will;” (ii) control of Cognate, which

serves as NWBO’s primary provider of manufacturing and clinical trial services,

without which NWBO would have no operations; (iii) control over the Board; and

(iv) control of Toucan, Powers is, and has been at all times relevant hereto, the

controlling stockholder of NWBO.

43. Throughout its history, NWBO has received substantial funding from

Toucan and Cognate and their affiliates, as well as from its own officers and

directors, and has conducted substantial business with Cognate. The documents

produced in response to Plaintiffs’ 220 Demands reveal numerous related-party

transactions, and fail to evidence that the Board took any actions to ensure that the

terms of such transactions were entirely fair to NWBO and its minority

stockholders. On the contrary, the documents evidence the Board’s sustained and

systematic pattern and practice of entering into transactions with Toucan and

Cognate on terms that are unduly beneficial to those Powers-controlled entities

A History of Related-Party Transactions

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without even attempting to employ any substantive or procedural protections for

NWBO or its minority stockholders. The following is just a sample of these types

of transactions.

Historical Cognate/Toucan Conversions

44. For many years, instead of NWBO issuing shares to outside investors

to raise funds and pay Cognate in cash for research and manufacturing services,

Cognate and NWBO (both under common control of Powers) agreed to convert

invoices issued by Cognate to shares and warrants at a prearranged and

unreasonably low prices, thereby expropriating massive economic value and voting

power from NWBO’s minority stockholders.

45. On November 23, 2011, NWBO converted $9.2 million of amounts

owed to Cognate into 46 million shares of NWBO common stock using an agreed-

upon conversion rate of $0.20 per share (the “2011 Cognate Conversion”). The

Company’s common stock closed at $0.37 per share on November 23, 2011.

Accordingly, NWBO recognized a loss of $7.8 million in connection with the 2011

Cognate Conversion, which was the difference between the market value of the

shares issued to Cognate and the carrying amount of the liability.

46. In response to Plaintiffs’ 220 Demands, the Company agreed to

produce all Board minutes and materials concerning the 2011 Cognate Conversion.

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NWBO produced no documents evidencing negotiation, review, and/or approval

by the Board (or any committee thereof) of the 2011 Cognate Conversion.

47. On September 25, 2012, NWBO affected a 1-for-16 reverse split of its

issued and outstanding common stock (the “Reverse Split”) pursuant to an

amendment to the Company’s Certificate of Incorporation. NWBO announced the

Reverse Split in a Form 8-K filed with the SEC on September 26, 2012. NWBO

had approximately 165 million shares of common stock issued and outstanding

prior to the Reverse Split and approximately 11 million shares of common stock

issued and outstanding thereafter.

48. On October 16, 2012, NWBO and Cognate entered into a Conversion

Agreement for Outstanding Invoices and a Conversion Agreement for Outstanding

Expenses, pursuant to which a total of approximately $7.5 million of unpaid

invoices and payables were converted into NWBO equity consisting of 2.8 million

shares of NWBO common stock and 1.4 million warrants to purchase NWBO

common stock (the “2012 Cognate Conversion”). The difference between the fair

value of the shares of common stock and warrants issued in excess of the carrying

amount of the liabilities was $3.1 million, which the Company recorded as a

“conversion inducement expense.”

49. Also on October 16, 2012, NWBO entered into conversion

agreements with Toucan pursuant to which a total of $10.7 million of convertible

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notes and payables were converted into equity consisting of 3.6 million shares of

NWBO common stock and 1.8 million warrants to purchase NWBO common

stock (the “2012 Toucan Conversion”). The difference between the fair value of

the shares of NWBO common stock and NWBO warrants issued in excess of the

carrying amount of the liabilities was $1.9 million, which the Company recorded

as a “conversion inducement expense.”

50. In response to Plaintiffs’ 220 Demands, the Company agreed to

produce all Board minutes and materials concerning the 2012 Cognate Conversion

and the 2012 Toucan Conversion. NWBO produced only the minutes of the

October 16, 2012 Board meeting, which indicate that the Board considered no

materials in connection with its approval of the 2012 Cognate Conversion and the

2012 Toucan Conversion.

51. There is no indication in the October 16, 2012 Board minutes that the

Board (or any committee thereof) obtained any sort of fairness opinion or

independent legal or financial advice with respect to the 2012 Cognate Conversion

or the 2012 Toucan Conversion, or that it even made any attempt to negotiate with

Cognate or Toucan regarding the terms of such conversions. Rather, the minutes

indicate that the terms of the 2012 Cognate Conversion and the 2012 Toucan

Conversion had been predetermined by the parties (i.e., NWBO led by Powers, on

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one side, and Cognate and Toucan, both led by Powers, on the other side), and the

Board merely approved the predetermined terms.

Settling Debts on Behalf of Cognate

52. In 2012, the Company issued 500,000 shares of NWBO common

stock and 100,000 warrants to purchase NWBO common stock with an exercise

price of $6.40 per share to an “outside party” in order to settle a note payable that

Cognate owed to the “unrelated party” (the “2012 Cognate Note Payment”).

According to NWBO’s Form 10-K/A filed with the SEC on April 30, 2013 (the

“2013 10-K/A”), “[t]he Company does not expect reimbursement from Cognate[.]”

Accordingly, NWBO recorded an “inducement expense” of $2.2 million in

connection with the issuance. The 2013 10-K/A did not disclose, among other

things, the identity of the “outside party,” what Cognate actually owed the “outside

party,” whether the “outside party” received a premium on the amount owed, why

NWBO made this payment on behalf of Cognate, why NWBO did not expect

reimbursement from Cognate or why an “inducement expense” was even

necessary.

53. In response to Plaintiffs’ 220 Demands, the Company agreed to

produce all Board minutes and materials concerning the 2012 Cognate Note

Payment. NWBO produced no documents evidencing negotiation, review, and/or

approval by the Board (or any committee thereof) of the 2012 Cognate Note

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Payment, which indicates that the Board did not review, negotiate, ratify or

approve the 2012 Cognate Note Payment.

54. In 2011, the Company issued notes to and received loans from Toucan

on terms that, based on NWBO’s public filings, were substantially beneficial to

Toucan and not fair to NWBO and, based on the documents received in response to

Plaintiff’s 220 Demand, were not reviewed, negotiated, ratified and/or approved by

the Board or any committee thereof.

Loans From Toucan

55. According to the 2012 10-K, on March 31, 2011, Toucan loaned the

Company $500,000 under the terms of a convertible promissory note with a 10%

original issue discount (“OID”) and a 10% one-time interest charge. The

conversion price of the note was 80% of the average five-day closing price of the

Company’s common stock for 25 days prior to conversion. According to the 2012

10-K, the balance of the note payable amounting to $550,000 was converted into

2,016,667 shares of NWBO common stock on October 28, 2011. However, 80%

of the average five-day closing price for the 25 days prior to conversion was $0.36

per share. Thus, the $550,000 balance should have been converted into only

1,527,778 shares of NWBO common stock, 488,889 fewer shares than Toucan

actually received.

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56. In response to Plaintiffs’ 220 Demands, the Company agreed to

produce all Board minutes and materials concerning the March 31, 2011 Toucan

note conversion. NWBO produced no documents evidencing negotiation, review,

ratification and/or approval by the Board (or any committee thereof) of the March

31, 2011 Toucan note conversion, which indicates that the Board did not review,

negotiate, or approve the note conversion or the issuance of 488,889 excess shares

to Toucan. The record indicates that the Board was wholly uninformed about the

Toucan note conversion and could not possibly exercise any meaningful business

judgment under the circumstances.

57. On December 29, 2011, the Company entered into a Convertible Loan

Agreement and Promissory Note with Toucan for an aggregate of $100,000 with

an OID of 10% and one-time interest charge of 10%. Warrants to purchase

250,000 shares of NWBO common stock at an exercise price of $0.40 per share

were issued in connection with the note.

58. In response to Plaintiffs’ 220 Demands, the Company agreed to

produce all Board minutes and materials concerning the $100,000 loan. NWBO

produced no documents evidencing negotiation, review, and/or approval by the

Board (or any committee thereof) of the loan, which indicates that the Board did

not review, negotiate, ratify or approve the loan.

25

59. In addition to the loans from Toucan, the Company has entered into

numerous transactions with NWBO insiders on terms that, based on NWBO’s

public filings, were highly beneficial to the insiders and not fair to NWBO, and

based on the documents received in response to Plaintiffs’ 220 Demands, were not

reviewed, negotiated, ratified and/or approved by the Board or any committee

thereof.

Transactions With Insiders

60. According to the 2013 10-K/A, on January 3, 2012, NWBO received

proceeds of approximately $200,000 in connection with issuing an unsecured

convertible note to Senior Vice President, Business Development Les Goldman

(“Goldman”). The note included 44,532 warrants to purchase NWBO common

stock with an exercise price of $6.40 per share. The note carried an OID of 10%

and a one-time interest charge of 10%. The conversion price of the note was 95%

of the average of the lowest five days’ closing prices of NWBO common stock in

the 20 days prior to conversion.

61. In response to Plaintiffs’ 220 Demands, the Company produced a

Form of Convertible Loan Agreement and Promissory Note dated January 13,

2012, and minutes from a Board meeting two days later stating that the loan from

Mr. Goldman had already been obtained but its “terms remain to be determined

pending Board approval.” The minutes of the next meeting, dated April 15, 2012,

26

state that NWBO issued shares and warrants to Mr. Goldman in accordance with

the Board’s prior discussion and authorization, but there is no evidence of any such

discussion or authorization, nor what terms were eventually determined.

According to the 2013 10-K/A, the principal amount of the note plus undisclosed

accrued interest was converted into 49,500 shares of NWBO common stock on an

undisclosed date in December 2012.

62. On or about June 28, 2012, NWBO received proceeds of $280,000 in

connection with issuing an unsecured convertible demand note to Goldman. The

conversion price was $0.33 per share pre-split ($5.28 per share post-split) and the

interest rate was 10%. The note included 43,570 warrants to purchase NWBO

common stock at an exercise price of $0.35 per share pre-split ($5.60 per share

post-split). According to the 2013 10-K/A, the principal amount of the note plus

undisclosed accrued interest was converted into 66,341 shares of common stock on

an undisclosed date in December 2012. Based upon the conversion price of $5.28

per share, the balance of the note plus accrued interest was $350,280.48. However,

in the six months that the note was outstanding, it should have accumulated only

approximately $14,000 in interest, thus indicating NWBO overpaid Goldman by

approximately $36,000. In response to Plaintiffs’ 220 Demands, the Company

produced no documents evidencing review, negotiation, ratification and/or

27

approval by the Board (or any committee thereof) of the issuance of the $36,000 in

excess shares to Goldman.

The 2013 Stock and Warrant Offering

63. On January 4, 2013, the Company filed with the SEC a registration

statement and preliminary prospectus announcing that the Company “may offer up

to $100,000,000 of any combination of [] securities” which included both common

stock and common stock upon the exercise of warrants (the “Prospectus”). The

registration statement (and therefore the Prospectus) became effective as of

February 5, 2013.

64. On April 22, 2013, the Company filed with the SEC a prospectus

supplement to sell 2,564,103 shares of common stock (the “April Prospectus

Supplement”). The April Prospectus Supplement also offered warrants to purchase

0.4 shares of common stock, which had an exercise price of $4.29 per share and

were not exercisable until six months after the date of issuance. If all warrants

were sold and exercised, an additional 1,025,641 shares of common stock would be

outstanding.

65. According to the April 30, 2013 10-K/A, Powers (both directly and

through Toucan and Cognate), then controlled 10,749,987 of the 27,140,417

(39.60%) outstanding shares of common stock. After conversion of the 7,681,665

shares of common stock underlying warrants and options controlled by Powers,

28

Toucan and/or Cognate (who would control 18,431,652 shares), the shares

outstanding would increase to 34,822,082, and therefore Powers beneficially

owned 52.93% of NWBO’s shares on a fully diluted basis.

66. The units of common stock and warrants offered in the April

Prospectus Supplement were all issued to a single, unidentified “healthcare-

dedicated institutional investor.” As a result of the offering, Powers’ ownership

was reduced to below 50% on a fully diluted basis.2

The Conversion Price Arrangement,

2014 Agreement and Self-Dealing Conversions

67. As discussed above, since 2011, NWBO has repeatedly converted

notes held by Toucan, Cognate, and other related parties and settled unpaid

invoices and payables owed to Toucan, Cognate, and other related parties by

delivering to these entities NWBO equity valued at significantly more than the face

value of the notes or the amounts owed.

68. Having been recently diluted to just below 50% ownership, (on a

fully-diluted basis), Powers looked to formalize her ability to convert debt into

equity to solidify control in the face of future equity offerings.

2 This figure is derived after conversion of Powers’ (et al.) warrants and options and adding the 2,564,103 shares issued in the offering. Thus, 18,431,652 ÷ (27,140,417 + 7,681,665 + 2,564,103) = 49.30%. This calculation excludes the warrants, as they were not exercisable for six months.

29

69. At a late-night July 30, 2013 meeting of NWBO’s Board she did just

that. Pursuant to the minutes of that meeting, the Board

discussed potential arrangements for at least half of the monthly invoices from Cognate to be paid in stock rather than in cash for a period of at least 18 months . . . . Such an agreement will have to provide for a fixed conversion price for the invoice amounts that are to be paid in stock, as variable rate agreements are prohibited by the financing documents executed last April, and may be prohibited again by the upcoming financing documents in August. The conversion price would be $4.00 per share. . . . However, in order for such an arrangement to be accepted by Cognate, there would need to be downside protection through most favored nation provisions . . . .

70. The minutes further state that “[t]he Board decided to proceed with

the above arrangements.”3

71. The minutes do not reflect that the Board, or any subset of the Board,

took any measures whatsoever to ensure that the Conversion Price Arrangement or

any subsequent Conversions made pursuant thereto were fair to the Company or its

minority stockholders. The minutes do not evidence any negotiation between the

Company and Cognate regarding the conversion price or any other terms of the

Conversion Price Arrangement. Rather, the minutes reflect that Powers, who

controlled both NWBO and Cognate, served as Chairperson of the meeting and

dominated the discourse.

3 NWBO has not produced any formal contract setting forth the terms of the Conversion Price Arrangement.

30

72. Based on the documents produced in response to Plaintiffs’ 220

Demands, neither the Board nor any subset thereof formed an independent

committee to evaluate and negotiate the terms of the Conversion Price

Arrangement, retained any independent legal counsel or financial advisor to advise

it in connection therewith, received any “fairness opinion” regarding the

Conversion Price Arrangement, or considered any alternative transactions or terms.

73. The July 30, 2013 meeting began at 9:30 p.m. and lasted only 45

minutes. The members of the Board who approved the Conversion Price

Arrangement consisted of two admittedly non-independent directors (Powers and

Boynton) and two outside directors (Farmer4

74.

and Jasinowski). Defendant Malik

did not attend the meeting purportedly due to the late hour in the UK.

4 As discussed below, defendant Farmer has received cash and stock awards from the Company not granted to the other non-employee directors; thus, his independence is questionable, at best.

31

75. On July 31, 2013, pursuant to the Conversion Price Arrangement, the

Company agreed to issue (and soon thereafter did issue) 2,902,072 shares of

common stock to Cognate, negating the dilution caused by the April Prospectus

Supplement offering. Indeed, Powers’ beneficial ownership was increased back to

52.95% on a fully diluted basis, or .02% higher than it was immediately before the

April Prospectus Supplement offering.5

5 The warrants issued in the April Prospectus Supplement are not counted because they were not exercisable for six months and were nevertheless under water as of July 31, 2013.

This figure is derived after (i) conversion

of Powers’ (et al.) warrants and options and (ii) by adding (a) the 2,564,103 shares

issued in the April offering and (b) the 2,902,072 shares of common stock issued to

Cognate. Thus, 21,333,724 ÷ (27,140,417 + 7,681,665 + 2,564,103 + 2,902,072) =

52.95%.

32

76. Even as the Company continues offering shares to investors via the

Prospectus, Powers can continue to convert Cognate’s debt into equity at her

discretion, thus maintaining or re-attaining mathematical control as she desires.

The Conversion Price Arrangement provides that for ongoing manufacturing bills

[a]t least half of all Manufacturing Bills during and/or relating to the Term of this Agreement will be paid in shares of NW Bio common stock, with the remaining portions of such Manufacturing Bills paid in cash.

77. The Conversion Price Arrangement simply underscores the Board’s

persistent and admitted failure to adopt, implement or maintain any sort of internal

controls to ensure the fairness of related-party transactions, despite the fact that

NWBO and its most frequent transaction partners, Toucan and Cognate, are all

under common ownership and control.

78. According to the 2013, 2014, and 2015 Proxies, the Company does

not subject related-party transactions to review by a special committee, the Audit

Committee, or any other committee of independent directors. Rather, related-party

transactions are reviewed by the entire Board, of which Powers is the Chairperson.

33

Specifically, the proxies state “[w]ith respect to reviewing and approving related-

party transactions, the Board reviews related-party transactions for potential

conflicts of interests or other improprieties.”

79. The Company has consistently admitted deficiencies in its internal

controls that constitute material weaknesses, but has failed to correct such

deficiencies. Indeed, NWBO’s 2010 10-K disclosed, inter alia, that the Company

had “inadequate approval and control over transactions and commitments made on

our behalf by related parties.” Although the Company’s discussion of its material

weaknesses in 2011-2013 did not mention related party transactions specifically, it

did disclose a “lack of controls in place to ensure that all material transactions and

developments impacting the financial statements are reflected.”

80. The 2014 10-K disclosed not only that these material weaknesses have

not yet been corrected, but also that additional material weaknesses, including

weaknesses pertaining specifically to related-party transactions, have been

identified:

• Insufficient segregation of duties, oversight of work performed and lack of compensating controls in our finance and accounting function due to limited personnel.

• Lack of controls in place, including those surrounding related party transactions, to ensure that all material transactions and developments impacting the financial statements are reflected and properly recorded.

34

• Lack of documentation to support occurrences of review and approval procedures.

• Design deficiencies that do not meet stated control objectives that elevate the level of risk of a material misstatement to our financial statements.

• Policies and procedures with respect to the review, supervision and monitoring of our accounting operations throughout the organization were either not designed and in place or not operating effectively.

• We did not maintain an adequate risk oversight function to evaluate and report on risks to financial reporting throughout the organization, including completion of a comprehensive risk assessment to identify all potential risk areas and evaluate the adequacy of controls to mitigate identified risk.

• We did not maintain an effective anti-fraud program designed to detect and prevent fraud relating to (i) an effective whistle-blower program or other comparable mechanism and (ii) an ongoing program to manage identified fraud risks.

(Emphasis added).

81. Consistent with the Company’s abysmal internal controls over related-

party transactions, the process by which the Conversion Price Arrangement was

approved and the very terms of the Conversion Price Arrangement were unfair, and

constituted a breach of the Defendants’ fiduciary duties to NWBO and its minority

stockholders.

82. The terms of the Conversion Price Arrangement were unfair to

NWBO and its minority stockholders, and have resulted in numerous Conversions

35

at substantial premiums above the amounts purportedly payable to Cognate.

Indeed, the Board agreed to the conversion price of $4.00, which was only slightly

above the Company’s stock price at the time, regardless of what would happen to

the market price of the Company’s stock over the “at least 18 month” term of the

Conversion Price Arrangement. Thus, if the price of the Company’s stock rose

above $4.00 per share, Cognate would receive NWBO equity at a discount to

market value, and if the Company sold stock for less than $4.00, Powers and

Cognate were protected through the most favored nation provision.

83. This is precisely what happened. NWBO’s stock price rose above

$4.00 per share during the fourth quarter of 2013 and traded well above $4.00 per

share consistently throughout 2014.

84. On January 24, 2014, the Board approved NWBO’s entry into the

2014 Agreements effective January 17, 2014 pursuant to which Cognate would

perform certain manufacturing and other services for NWBO. The 2014

Agreements consisted of: (1) a DCVax-L Manufacturing and Services Agreement;

(2) a DCVax-Direct Manufacturing and Services Agreement; (3) an Ancillary

Services Agreement; and (4) a Manufacturing Expansion Services Agreement.

Each of the 2014 Agreements provided for large upfront payments to Cognate and

further provided that at least half of the amounts payable by NWBO during the

first 18 months of the 2014 Agreements (referred to as the “Conversion Period”),

36

would be paid in shares of NWBO common stock, with a conversion price of

$4.00, just as with the 2013 Conversion Price Arrangement.

85. Specifically, the 2014 Agreements provided as follows:

(a) The DCVax-L Manufacturing and Services Agreement provided that NWBO would make an initiation payment to Cognate in the amount of 1,020,273 shares of NWBO common stock, and a warrant exercisable for 486,802 shares of NWBO common stock at $4.00 per share, as well as undisclosed milestone payments. It further provided that at least half of all manufacturing bills during the Conversion Period would be paid in shares of NWBO common stock, and the conversion price during the Conversion Period would be $4.00 per share, with 50% warrant or restricted stock unit coverage, subject to most favored nation provisions, at the election of Cognate.

(b) The DCVax-Direct Manufacturing and Services Agreement provided that NWBO would make an initiation payment to Cognate in the amount of 1,683,541 shares of NWBO common stock, and a warrant exercisable for 803,224 shares of NWBO common stock at $4.00 per share, as well as undisclosed milestone payments. It further provided that at least half of all manufacturing bills during the Conversion Period would be paid in shares of NWBO common stock, and the conversion price during the Conversion Period would be $4.00 per share, with 50% warrant or restricted stock unit coverage, subject to most favored nation provisions, at the election of Cognate.

(c) The Ancillary Services Agreement provided that NWBO would make an upfront milestone and initiation payment to Cognate in the amount of 1,326,355 shares of NWBO common stock, and warrants exercisable for 632,843 shares of NWBO common stock at $4.00 per share, as well as additional undisclosed milestone payments. It further provided that at least half of all ancillary services bills during the Conversion Period would be paid in shares of NWBO common stock, and the conversion price during the Conversion Period would be $4.00 per share, with 50% warrant or restricted stock unit coverage, subject to most favored nation provisions, at the election of Cognate.

(d) The Manufacturing Expansion Services Agreement provided that NWBO would make an upfront milestone and initiation payment to

37

Cognate in the amount of 1,071,287 shares of NWBO common stock, and warrants exercisable for 511,142 shares of NWBO common stock at $4.00 per share, as well as additional undisclosed milestone payments. It further provided that at least half of all manufacturing expansion services bills during the Conversion Period would be paid in shares of NWBO common stock, and the conversion price during the Conversion Period would be $4.00 per share, with 50% warrant or restricted stock unit coverage, subject to most favored nation provisions, at the election of Cognate.

86. The Board approved the 2014 Agreements at a 40-minute telephonic

meeting that began at noon on January 24, 2014. NWBO’s stock had opened at

$5.05 per share that day. There is no indication in the January 24 meeting minutes

(or any prior meeting minutes) that the Board considered a conversion price at or

closer to the market price of NWBO’s common stock, or any alternative methods

of payment under the 2014 Agreements. Nor do the minutes reflect that the Board

retained any independent advisors or otherwise took any action to evaluate whether

the terms of the 2014 Agreements were fair to NWBO or its minority stockholders.

Rather, the Board approved the 2014 Agreements that immediately provided in-

the-money warrants to Cognate. Although Powers recused herself from the vote

on the 2014 Agreements, she had presided over every meeting at which the 2014

Agreements were discussed.

87. NWBO’s common stock continued to rise throughout 2014 and into

2015, reaching a high of $12.55 on July 23, 2015. The stock price has only fallen

38

below $4.00 per share on two days since the 2014 Agreements became effective;

otherwise, NWBO’s stock has traded substantially above $4.00 per share.

88. The 2014 10-K disclosed:

(a) “During the quarter ended December 31, 2013, the Company converted accounts payable to Cognate BioServices into approximately 1,818,000 shares, with fifty percent warrant coverage, subject to most favored nation treatment (including with respect to warrants). The Company also converted notes payable to Cognate into 150,000 shares. The fair value of the common stock on the date of these transactions was approximately $6.7 million and $0.5 million, respectively. The Company recorded $1.5 million of inducement expense related to the conversion of accounts payable.”

(b) “During the quarter ended March 31, 2014, the Company converted accounts payable due to Cognate BioServices of approximately $5.9 million into 1,481,644 shares, subject to most favored nation treatment. The Company recorded $2.8 million of inducement expense associated with the issuance of the common shares. In addition, the Company issued warrants that were valued at $2.5 million at the date of issuance related to the conversion of accounts payable. Total inducement charge was $5.3 million.”

(c) “During the quarter ended June 30, 2014, the Company converted accounts payable due to Cognate BioServices of approximately $2.9 million into 727,291 shares of common stock and 363,646 warrants, subject to most favored nation treatment. The Company recorded $1.4 million of inducement expense associated with the issuance of the common shares. In addition, as noted in Note 4 the Company issued warrants that were valued at $1.1 million at the date of issuance related to the conversion of accounts payable. Total inducement charge was $2.5 million.”

(d) “During the quarter ended September 30, 2014, the Company converted accounts payable due to Cognate BioServices of approximately $7.9 million into 1,986,205 shares of common

39

stock and 1.1 million warrants, subject to most favored nation treatment. The Company recorded $4.5 million of inducement expense associated with the issuance of the common shares. In addition, as noted in Note 4, the warrants were valued at $3.8 million at the date of issuance, resulting in a total inducement charge for the quarter of $8.3 million.”

89. The “inducement” charges taken by the Company in connection with

the above Conversions – which totaled $17.6 million as of the filing of the 2014

10-K – consist of the difference between the carrying value of the accounts payable

and the fair value of the stock and warrants on the date such shares and warrants

were issued. Accordingly, because of the Conversion Price Arrangement, which

the Powers-led Board approved, NWBO has overpaid Cognate by $17.6 million,

more than 12 times NWBO’s 2014 revenues.

90. Furthermore, the issuance to Cognate of an excess $17.6 million

worth of NWBO stock and warrants has expropriated the economic and voting

power of the Company’s minority stockholders.

91. The 2015 Proxy discloses that in 2014 NWBO made the following

payments to Cognate pursuant to the 2014 Agreements:

a. “a milestone and initiation payment of 1,020,273 unregistered shares of our common stock and a warrant to purchase 486,802 shares of our common stock. The warrants are exercisable at $4.00 per share, and have an exercise period of five years from issuance;”

b. “a milestone and initiation payment of 1,683,451 unregistered

shares of our common stock and a warrant to purchase 803,224 shares of our common stock. The warrants are exercisable at

40

$4.00 per share, and have an exercise period of five years from issuance;”

c. “a milestone and initiation payment of 1,326,355 unregistered

shares of our common stock and a warrant to purchase 632,84 3 shares of our common stock. The warrants are exercisable at $4.00 per share, and have an exercise period of five years from issuance and a cashless exercise provision;”

d. “a Milestone and Initiation Payment comprised of 1,071,287

unregistered shares of our common stock and a warrant to purchase 511,14 2 shares of our common stock. The warrants are exercisable at $4.00 per share, and have an exercise period of five years from issuance and a cashless exercise provision.”

92. The 2015 Proxy further discloses:

We also entered into a Lock-Up Agreement with Cognate on January 17, 2014, under which Cognate agreed to have all of the shares that are issued as part of the Milestone and Initiation Payments in the [2014] Agreements (collectively, the “Lock-Up Shares”) locked up for up to 36 months, in return for 15% warrant coverage for each 6-month period of lock-up, on the same terms as the warrants in the [2014] Agreements. During the lock-up, the Lock-Up Shares may not be sold or traded on the market. These lock-up terms are subject to the same most favored nation treatment as provided in the [2014] Agreements as described above. We also agreed to extend the exercise period of all current and past warrants held by or on behalf of Cognate for three additional years from their existing expiration dates. From July 31, 2013 through September 30, 2014, pursuant to this arrangement, we have issued to Cognate an aggregate of 8,907,750 unregistered shares and warrants to purchase an aggregate of 4,582,176 shares. The amounts paid by us in shares and warrants under each of the [2014] Agreements will be subject to

41

adjustment on a most favored nation basis relative to the terms provided by us to any other investor or creditor (including in regard to warrants) during the term of such Agreement, so that the terms of all securities issued or issuable under the agreements will have terms no less favorable to Cognate than the terms of any securities issued or issuable to any other investor or creditor during the term of the respective Agreement, including not only the price and terms of securities issued but also additional securities, 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). On November 12, 2014, the Board approved the issuance of 8,052,092 shares of common stock to Cognate for services and most favored nation provisions in accordance with the [2014] Agreements.

93. According to NWBO’s Forms 10-Q for the first quarter of 2015 (the

“1Q 2015 10-Q”), filed with the SEC on May 11, 2015, and the second quarter of

2015 (the “2Q 2015 10-Q”), filed with the SEC on August 10, 2015, the Company

has just $1,172,000 in notes payable. Accordingly, NWBO has ample ability to

raise additional capital in the debt market, as the Company has done consistently

over the last several years. Nevertheless, NWBO continues to overpay Cognate in

connection with its monthly invoices under the 2014 Agreements, and Cognate

continues to expropriate the minority stockholders’ economic and voting power.

94. According to calculations in the Phase Five Report, by June 2015, the

Company had issued $81.4 million worth of shares and warrants to Cognate for the

settlement of $47 million of outstanding invoices, incurring losses of $34.4 million

as a result.

42

95. The 1Q 2015 10-Q discloses that “[f]or the three months ended March

31, 2015 . . . the Company incurred non-cash equity based compensation

(restricted common stock and warrants) related to Cognate BioServices of $6.4

million. . .,” which included “one-time initiation payments of shares and warrants

relating to the four new agreements the Company entered into with Cognate in

January, 2014” as well as “lock-up warrants (for the lock-up of Cognate shares)

and most favored nation shares and warrants.”

96. The 1Q 2015 10-Q further discloses that for the first quarter of 2015

NWBO “recognized a non-cash loss on derivative liabilities of $23.2 million . . .

due primarily to the change in value of the warrants, due to an increase in our stock

price, issued to Cognate in connection with the extinguishment of accounts

payable.”

97. The 2Q 2015 10-Q discloses that for the three months ended June 30,

2015, the Company “incurred non-cash equity based expense (restricted common

stock and warrants) for the ongoing vesting (in equal monthly installments over 3

years) of the one-time initiation payments of shares and warrants under the four

agreements the Company entered into with Cognate in January 2014” in the

amount of $9.4 million, which “was higher in the three months ended June 2015

than the period ended June 2014 because the price per share of the Company’s

stock has risen.”

43

98. The 2Q 2015 10-Q further discloses that “[t]he Company issued

318,116 common shares to Cognate’s designee in partial satisfaction of the 8.1

million shares that were approved by the Company’s Board in November 2014 to

satisfy certain anti-dilution obligations to Cognate under the most favored nation

provisions in the Company’s agreements with Cognate that had not yet been

issued. The Company recorded a $2.7 million charge to stock based compensation

based upon the fair value of the common shares on the date of issuance.”

99. The 2Q 2015 10-Q further discloses that for three months ended June

30, 2015, NWBO recognized a non-cash loss of $25.7 million “due primarily to the

change in value of the warrants, due to an increase in our stock price, issued to

Cognate in connection with the extinguishment of accounts payable.”

100. The stock and warrant payments made to Cognate under the 2014

Agreements have cost the Company millions of dollars and have expropriated from

NWBO’s minority stockholders economic value and voting power that has

benefitted the Company’s controlling stockholders.

101. Plaintiffs bring certain claims herein derivatively in the right and for

the benefit of NWBO to redress Defendants’ breaches of fiduciary duties.

DERIVATIVE ALLEGATIONS

102. Plaintiffs will adequately and fairly represent the interests of the

Company and its stockholders in enforcing and prosecuting its rights.

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Demand On The Board Is Excused As Futile

103. As a result of the facts set forth herein, Plaintiffs have not made any

demand on the Board to institute this action against the Defendants. Such demand

would be a futile and useless act because the Board is incapable of making an

independent and disinterested decision to institute and vigorously prosecute this

action.

104. The Board currently consists of five directors: Defendants Powers,

Boynton, Farmer, Jasinowski and Malik. None of these directors are capable of

disinterestedly and independently considering a demand to commence and

vigorously prosecute this action for the reasons set forth below.

Powers

105. Powers, the controlling stockholder of the Company, had a conflicting

self-interest in and stood on both sides of the Conversion Price Arrangement and

each of the Conversions that have occurred pursuant thereto. Accordingly, the

business judgment rule does not protect the Board’s decision to cause NWBO to

enter into the Conversion Price Arrangement and Conversions. Rather, the

Defendants bear the burden of proving that the Conversion Price Arrangement,

2014 Agreements and Conversions were entirely fair to NWBO, which they have

not done and cannot do. As alleged in detail herein, in allowing NWBO to enter

into the Conversion Price Arrangement, 2014 Agreements and Conversions, the

45

Board failed to act loyally, in good faith, and with due care, and instead knowingly

acquiesced to NWBO’s controlling stockholder Powers’ proposing, negotiating

and consummating the Conversion Price Arrangement, 2014 Agreements and

Conversions, which were intended to and did benefit Cognate and Powers to the

detriment of NWBO and its minority stockholders. Consequently, no demand on

the Board is required.

106. Defendant Powers is incapable of disinterestedly and independently

considering a demand to commence and vigorously prosecute this action because

she is directly interested in the self-dealing Conversion Price Arrangement, 2014

Agreements and Conversions complained of herein, and has received substantial

personal benefits as a result of the self-dealing Conversion Price Arrangement,

2014 Agreements and Conversions.

107. Defendants Boynton, Farmer and Malik are likewise incapable of

disinterestedly and independently considering a demand to commence and

vigorously prosecute this action as set forth below:

108. Defendant Boynton, as an executive of the Company, works for and at

the behest of the Chairperson and CEO (i.e., Powers). Boynton is therefore under

the influence and control of Powers.

Boynton

46

109. Further, Boynton is personally and professionally indebted and loyal

to Powers and Toucan. Between 2004 and 2007, Powers, through Toucan and its

affiliates, loaned Boynton and NWBO, which Boynton co-founded, approximately

$10 million to preserve’s Boynton’s scientific vision. Indeed, by the Company’s

own admission, had it not been for Powers and Toucan there was “substantial

doubt about the Company’s ability to continue as a going concern.”

110. In exchange for Boynton’s loyalty to Powers, Toucan and Cognate,

Boynton remains the Chief Scientific Officer of NWBO, pursuant to which he has

received and continues to receive substantial monetary compensation and other

benefits. Specifically, in fiscal years 2014, 2013, 2012 and 2011, defendant

Boynton received compensation in the amount of $325,000, $295,685, $295,685

and $1,882,695, respectively. Thus, defendant Boynton lacks independence from

Powers, whom he works for and under in his role as Chief Scientific Officer, and

from Powers, Toucan and Cognate, as controlling stockholders of NWBO.

111. Indeed, the Company concedes in its SEC filings that defendant

Boynton is not independent under Section 5605(a)(2) of the NASDAQ

Marketplace Rules. In addition to monetary compensation, defendant Boynton

receives and enjoys professional and academic esteem in his position as NWBO’s

Chief Scientific Officer. Loss of his position as NWBO’s Chief Scientific Officer

would cause him substantial reputational and financial harm. Accordingly, there is

47

a reasonable doubt that Boynton can independently consider a demand to

commence and vigorously prosecute this action.

112. Defendant Farmer is also beholden to Powers. For example, Powers

was the sole member of the Nomination Committee at the time Farmer was

appointed to the NWBO Board and, upon information and belief, Powers was

solely responsible for Farmer’s nomination to the NWBO Board in December

2009.

Farmer

113. As a result of his loyalty to Powers, Farmer has received substantial

monetary compensation and other benefits from NWBO at the behest of Powers.

Specifically, during the third quarter of 2012, the Company awarded Defendant

Farmer 63,364 shares of common stock valued at approximately $300,000

purportedly in exchange for him arranging of multiple financings for the Company,

referred to in the 2013 Proxy as “consulting services.” The minutes of the August

9, 2012 Board meeting state that “Management” – i.e., Powers – was to negotiate

the terms and the form of such compensation for Defendant Farmer’s “role in the

financings as well as compensation for the long delay in providing the

compensation.”

114. Furthermore, that 2014 and 2015 Proxies disclose that in 2013 and

2014, Defendant Farmer received compensation of $120,000 in cash, while Malik

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and Jasinowski received no compensation in those years. The 2014 and 2015

Proxies do not disclose why Defendant Farmer received the $120,000 cash

payments that the other non-employee directors did not receive.

115. Defendant Farmer’s repeated receipt of cash and stock compensation

from the Company, at the behest of Powers, over and above the amounts paid to

the other non-executive directors, raises a reasonable doubt that he can

independently consider a demand to commence and vigorously prosecute this

action.

116. The relationship between Malik and Powers dates back to at least

2007, when Malik was an analyst at Collins Stewart, NWBO’s “house broker,” and

Malik frequently promoted NWBO’s stock.

Malik

117. On June 15, 2007, NWBO and Collins Stewart entered into a

Nominated Advisor and Broker Agreement, pursuant to which Collins Stewart was

appointed as nominated advisor and broker to the Company in connection with the

admission of NWBO’s common stock to trade on the Alternative Investments

Market (“AIM”) of the London Stock Exchange.6

118. In connection therewith, Malik frequently promoted NWBO while at

Collins Stewart. For example, in the wake of the Company’s July 9, 2007

6 NWBO voluntarily delisted its stock from the AIM in 2009.

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announcement that it had received the necessary approvals to make DCVax-Brain

commercially available to brain cancer patients in Switzerland, Malik was quoted

frequently in the press, calling the approval “the biggest breakthrough for

immunotherapy in cancer in 30 years.” (Shortly thereafter, NWBO issued a

correction disclosing that it had only received conditional approval for the import

of the vaccine into Switzerland and had not yet even applied for marketing

approval.)

119. On May 7, 2010, Malik incorporated Regen Med Acquisition Corp.

(“Regen Med”) as a Delaware corporation, and he is listed as the incorporator.

120. One month later, on June 7, 2010, Malik, then an employee of

London-based Matrix Corporate Capital, issued a detailed, very bullish “research

report” on NWBO. The report assigned a rating of “buy” with a price target of

$70.40 per share, 478% higher than the then-current stock price of $14.72 (as

adjusted for the Reverse Split).

121. The disclosures in the report stated that Matrix publishes “non-

independent research reports” which are “not prepared in accordance with the legal

requirements designed to promote the independence of investment research.”

Accordingly, the report cautioned that it “should be treated as a marketing

communication.”

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122. The Company immediately issued a press release the day the report

was issued, touting it as “part of an in-depth review of the history and competitive

landscape of what he calls the ‘cancer vaccine revolution,’” in which Malik, citing

purported “‘key advantages of NWB[O]’s technology which have not yet been

appreciated by the market,’ … conclude[d] that this gives DCVax a ‘competitive

advantage … versus virtually of the other personalized cancer vaccine players.’”

Upon information and belief, NWBO coordinated with Malik in connection with

his glowing report on the Company.

123. Approximately five weeks after Malik issued his report, on July 14,

2010, NWBO entered into unsecured loan agreements and convertible promissory

notes with Regen Med, the company newly incorporated by Malik, pursuant to

which Regen Med provided bridge funding to NWBO in the amount of $1.75

million (the “Bridge Loan”). The Bridge Loan initially had a term of 60 days, but

the term was subsequently extended to October 1, 2010. The Bridge Loan carried

a 6% interest rate and was convertible into NWBO equity at the discretion of

Regen Med at a conversion price of $0.75 per share (roughly 12% below market).

NWBO’s SEC filings disclose that Regen Med received five-year warrants to

purchase 145,833 shares of NWBO stock (as adjusted for the Reverse Split) in

connection with the Bridge Loan.

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124. According to the Company’s SEC filings, $350,000 of the Bridge

Loan was repaid on September 28, 2010 using proceeds from loans from two

undisclosed private lenders. The remaining $1.4 million was repaid on October 1,

2010, in part using proceeds from additional loans from one or more7

125. The 2010 10-K contains conflicting information regarding the

ownership of Regen Med. Page 47 states that Powers is the majority owner of

Regen Med, while page 48 and NWBO’s subsequent SEC filings that mention

Regen Med, refer to Regen Med as “a non-affiliate third party.”

non-

affiliated investors ($500,000), and in part by Toucan Partners ($900,000),

pursuant to a loan agreement between Toucan Partners and the Company. The

October 1, 2010 loan with Toucan Partners was convertible into shares of NWBO

stock at $0.75 per share. In addition, Toucan Partners received 100% warrant

coverage at $0.82 per share.

126. The 2010 Form 10-K also discloses that in December 2010, Toucan

Capital transferred to Regen Med 402,072 shares of NWBO common stock and

459,064 warrants to purchase NWBO common stock (as adjusted for the Reverse

Split), together worth approximately $5 million.

7 The Company’s 2010 10-K states that the subsequent $500,000 loan was from “non-affiliated investors,” while the Prospectus filed on December 10, 2012 state that it was from “an individual.”

52

127. Malik was appointed as a director of NWBO in April 2012. Several

subsequent filings with the SEC in 2012 list Alia Minhas (“Minhas”) as holding

the voting and dispositive power over the NWBO shares held by Regen Med. On

information and belief, Minhas is the partner of defendant Malik. Among other

things, Malik and Minhas: (i) together acquired a residential property in 2007

located at Hawthorne House, 1 Cholmeley Park, Highgate, London N6 5ET; and

(ii) together incorporated RSC Capital LLP, a UK partnership with a registered

address at the same Hawthorne House address. Despite this close relationship

between Malik and Minhas, NWBO’s public filings fail to disclose the affiliations

and historical transactions between and among Malik, Minhas, Regen Med,

Powers, and Toucan.

128. Powers’ affiliation with Regen Med continued at least through 2013.

On April 3, 2012, less than two weeks before Malik’s appointment to the Board,

Regen Med acquired numerous internet domain names (including

regenmedacquisitioncorp.com; regenmedacquisition.net; regenmedacquisition.org;

regenmedacquisitioncorp.com; regenmedacquisitioncorp.net;

regenmedacquisitioncorp.org; rmacfund.com; rmacfund.net; rmacfund.org;

rmacmgmt.com; rmacmgmt.net; and rmacmgmt.org.) that list Powers as the

registrant and administrator, provide Toucan’s address as their mailing address,

and provide an email address of support@toucancapital.com. Furthermore, Regen

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Med’s annual franchise tax reports filed with the Delaware Secretary of State for

tax years 2010-2014 identify Powers as its sole director and state that there are no

officers. Other documents filed in 2013 with the Delaware Secretary of State refer

to Powers as the President of Regen Med.

129. In addition, a NWBO prospectus filed with the SEC on December 10,

2012 discloses that an additional 6,774 warrants (as adjusted for the Reverse Split)

were issued in 2011 in connection with “Regen Med November 2010 Loans.”

There is no detail provided in that prospectus or any other NWBO SEC filing

regarding the terms of such loans.

130. Although Defendants have obscured the relationships between and

among Malik, Minhas, Regen Med, Powers, and Toucan, it appears that Regen

Med is, and since its inception has been, an affiliate of Powers and Toucan and that

Malik and Minhas have received substantial benefits from Powers and Toucan,

including millions of dollars of NWBO shares and warrants, in connection with

their involvement in Regen Med’s founding, incorporation and operations.

131. Accordingly, there is a reasonable doubt that Malik can independently

consider a demand to commence and vigorously prosecute this action.

132. Plaintiffs bring certain claims in this action on their own behalf and as

a class action, pursuant to Court of Chancery Rule 23, on behalf of all holders of

CLASS ACTION ALLEGATIONS

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NWBO common stock (the “Class”) since July 30, 2013 and their successors in

interest. Excluded from the Class are Defendants and any person, firm, trust,

corporation, or other entity related to, or affiliated with, any of the Defendants.

133. This action is properly maintainable as a class action.

134. The Class is so numerous that joinder of all members is impracticable.

As of October 31, 2013, there were approximately 11.4 million shares of NWBO

common stock held by the Company’s minority stockholders. Upon information

and belief, there are thousands of members of the Class.

135. There are questions of law and fact which are common to the Class

including, but not limited to:

(a) whether Defendants breached their fiduciary duties to Plaintiffs and the other members of the Class; and

(b) whether Plaintiffs and the other members of the Class are entitled to damages as a result of Defendants’ breaches of fiduciary duties.

136. Plaintiffs are committed to prosecuting this action and have retained

competent counsel experienced in litigation of this nature. Plaintiffs’ claims are

typical of claims of the other members of the Class, and Plaintiffs have the same

interests as the other members of the Class. All members of the Class have

suffered the same harms in that Powers and Cognate orchestrated and executed the

Conversion Price Arrangement, 2014 Agreements and Conversions to benefit

themselves and Toucan to the detriment of the Company’s minority stockholders.

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Moreover, the Defendants caused the same equitable harm and damages to the

Class through their breaches of their fiduciary duties of loyalty and care.

Accordingly, Plaintiffs are adequate representatives of the Class and will fairly and

adequately protect the interests of the Class.

137. The prosecution of separate actions by the individual members of the

Class would create a risk of inconsistent or varying adjudications with respect to

the individual Class members that would establish incompatible standards of

conduct for Defendants. Adjudications with respect to individual Class members

would, as a practical matter, be dispositive, or would substantially impair the

interests of the Class members.

138. Defendants have acted or refused to act on grounds that apply

generally to the Class, such that injunctive or declaratory relief is appropriate with

respect to the Class as a whole.

139. The questions of law and fact common to the members of the Class

predominate over any questions affecting only its individual members, such that a

class action is superior to any other available method for fairly and efficiently

adjudicating the controversy.

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Derivative Claim Against the Individual Defendants for Breach of the

COUNT I

Fiduciary Duty of Loyalty

140. Plaintiffs incorporate by reference and reallege each and every

allegation set forth above, as though fully set forth herein.

141. Plaintiffs bring this Count I derivatively on behalf of NWBO.

142. As directors and/or officers of NWBO, each of the Individual

Defendants had a fiduciary duty to, among other things, act in furtherance of the

best interests of the Company and its stockholders so as to benefit all stockholders

equally and not in furtherance of their personal interests and/or the interests of the

controlling stockholders.

143. Each of the Individual Defendants breached his or her fiduciary duty

of loyalty by causing and/or allowing NWBO to enter into the unfair services

agreements with Cognate, the conflicted Conversion Price Arrangement, 2014

Agreements and the Conversions, the terms of all of which were not, and could not

have been, exercises of good faith business judgment. Rather, Cognate routinely

overcharged the Company for services, and the Conversion Price Arrangement,

2014 Agreements and Conversions were intended to, and did, unduly benefit

controlling stockholders Powers and Cognate at the expense of the Company and

its minority stockholders, and were not entirely fair to the Company.

57

144. Further, the Individual Defendants did nothing to mitigate Powers’

and Cognate’s conflict of interest in orchestrating the Conversion Price

Arrangement, 2014 Agreements and Conversions.

145. As a direct and proximate result of the Individual Defendants’

breaches of fiduciary duty, the Company has sustained substantial damages, as

alleged herein.

Derivative Claim Against Powers, Toucan and Cognate for Breach of

COUNT II

Fiduciary Duty as Controlling Stockholders

146. Plaintiffs incorporate by reference and reallege each and every

allegation set forth above, as though fully set forth herein.

147. Plaintiffs bring this Count II derivatively on behalf of NWBO.

148. As the controlling stockholders of NWBO, each of defendants

Powers, Toucan and Cognate had a fiduciary duty to, among other things, act in

furtherance of the best interests of the Company and its stockholders so as to

benefit all stockholders equally and not in furtherance of their personal interests.

149. Defendants Powers, Toucan and Cognate breached their fiduciary

duty of loyalty by causing NWBO to enter into the self-dealing services

agreements, the Conversion Price Arrangement, 2014 Agreements and the

Conversions in order to unduly benefit themselves at the expense of the Company.

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150. As a direct and proximate result of Powers, Toucan and Cognate’s

breaches of fiduciary duty, the Company has sustained substantial damages, as

alleged herein.

Individual and Class Claim Against the Individual Defendants for

COUNT III

151. Plaintiffs incorporate by reference and reallege each and every

allegation set forth above, as though fully set forth herein.

Breach of Fiduciary Duty

152. Plaintiffs bring this Count III individually and on behalf of the Class.

153. The Individual Defendants, as directors of NWBO, owed the minority

stockholders of NWBO fiduciary duties of loyalty and care. The Conversion Price

Arrangement, 2014 Agreements and Conversions were intended to, and did,

unduly benefit controlling stockholders Powers and Cognate at the expense of the

Class through the improper transfer of economic and voting power from the

individual Class members to the Company’s controlling stockholders. Thus, in

approving the Conversion Price Arrangement and 2014 Agreements and allowing

the self-dealing Conversions to take place, the Individual Defendants breached

their fiduciary duty to the Class.

154. The Individual Defendants’ breach of their fiduciary duty to the

minority stockholders entitles the Class to damages and other monetary relief, as

well as equitable relief, including rescission of the Conversion Price Arrangement

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and 2014 Agreements, cancellation of the excess shares issued to Cognate, and

declaratory and injunctive relief to prevent dilution of voting rights.

155. Plaintiffs have no adequate remedy at law.

Individual and Class Claim Against Powers, Toucan and Cognate for

COUNT IV

156. Plaintiffs incorporate by reference and reallege each and every

allegation set forth above, as though fully set forth herein.

Breach of Fiduciary Duty as Controlling Stockholders

157. Plaintiffs bring this Count IV individually and on behalf of the Class.

158. As the controlling stockholders of NWBO, each of Defendants

Powers, Toucan and Cognate had a fiduciary duty to, among other things, act in

furtherance of the best interests of the Company’s minority stockholders so as to

benefit all stockholders equally and not in furtherance of their personal interests.

159. Defendants Powers, Toucan and Cognate breached their fiduciary

duty by causing NWBO to enter into self-dealing service agreements at prices

unfair to the Company, and to subsequently enter into the Conversion Price

Arrangement, 2014 Agreements and Conversions in order to unduly benefit

themselves at the expense of the Company’s minority stockholders through the

improper transfer of economic and voting power from the individual Class

members to themselves.

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160. As alleged herein, defendant Powers, who controlled both NWBO and

Cognate, ran the meeting at which the Board approved the Conversion Price

Agreement and therefore controlled the terms thereof.

161. The Conversion Price Arrangement and 2014 Agreements and

Conversions were intended to, and did, unduly benefit Powers, Toucan and

Cognate, at the expense of the Class. Thus, Powers, Toucan and Cognate breached

their fiduciary duties to the Class.

162. Furthermore, the awards of excess shares to Cognate constituted an

improper expropriation of economic value and voting power from NWBO’s public

stockholders to its controlling stockholders: Powers, Toucan and Cognate.

Therefore, the Conversions did not result in an equal dilution of each of the

Company’s shares. Instead, the public stockholders suffered a separate harm

resulting from the extraction from the public stockholders, and redistribution to the

controlling stockholder, of a portion of the economic value and voting power

embodied in the minority interest. Consequently, NWBO’s public stockholders are

entitled to recover the value represented by the overpayment.

WHEREFORE, Plaintiffs demand judgment as follows:

PRAYER FOR RELIEF

A. Certifying this action as a class action;

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B. Awarding Plaintiffs and the Class monetary and equitable relief

against Powers, Toucan and Cognate for the expropriation of value that Plaintiffs

and the Class sustained as a result of such Defendants’ breaches of their fiduciary

duties;

C. Awarding Plaintiffs and the Class monetary and equitable relief

against the Individual Defendants for their breaches of fiduciary duties owed to the

minority stockholders;

D. Awarding NWBO the amount of damages it sustained as a result of

Defendants’ breaches of fiduciary duties to the Company;

E. Ordering Powers, Toucan and Cognate to disgorge to the Company

improper benefits they received as a result of the Conversions and other

transactions complained of herein;

F. Granting appropriate equitable relief to remedy Defendants’ breaches

of fiduciary duties, including rescinding the Conversion Price Arrangement and

2014 Agreements, cancelling the excess shares issued by NWBO to Cognate,

ordering the Company to cease converting accounts purportedly payable to

Cognate at the conversion rate of $4.00 per share, and preventing voting power

dilution of the minority stockholders;

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G. Awarding to Plaintiffs the costs and disbursements of this action,

including reasonable attorneys’ fees, accountants’ and experts’ fees, costs and

expenses; and

H. Granting such other and further relief as the Court deems just and

proper.

Dated: November 6, 2015 OF COUNSEL: KESSLER TOPAZ MELTZER & CHECK, LLP Eric L. Zagar Kristen L. Ross Christopher M. Windover 280 King of Prussia Road Radnor, Pennsylvania 19087 (610) 667-7706

PRICKETT, JONES & ELLIOTT, P.A. By:

Michael Hanrahan (DE Bar No. 941) /s/ Paul A. Fioravanti, Jr.

Paul A. Fioravanti, Jr. (DE Bar No. 3808) Kevin H. Davenport (DE Bar No. 5327) 1310 N. King Street Wilmington, Delaware 19801 (302) 888-6500

Attorneys for Plaintiff Terrice Tharp

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OF COUNSEL: FRIEDMAN OSTER & TEJTEL PLLC Jeremy Friedman Spencer Oster David Tejtel 240 East 79th Street, Suite A New York, NY 10075 (888) 529-1108

ANDREWS & SPRINGER LLC By:

Peter B. Andrews (DE Bar No. 4623) Craig J. Springer (DE Bar No. 5529) 3801 Kennett Pike

/s/ Craig J. Springer

Building C, Suite 305 Wilmington, Delaware 19807 (302) 504-4957

Attorneys for Plaintiff Clarence Henkel

CERTIFICATE OF SERVICE

I, Paul A. Fioravanti, Jr., do hereby certify that on this 16th day of

November, 2015, that I caused a copy of the foregoing to be filed and served on

counsel of record as listed below via File & ServeXpress:

William M. Lafferty (#2755) Lauren K. Neal (#5940) Morris, Nichols, Arsht & Tunnell LLP 1201 North Market Street Wilmington, Delaware 19801

Paul D. Brown (# 3903) Joseph B. Cicero (# 4388) Chipman Brown Cicero & Cole LLP 1007 N. Orange Street Suite 1110 Wilmington, DE 19801

Paul A. Fioravanti, Jr. (#3808) /s/ Paul A. Fioravanti, Jr.

General Information

Court Delaware Court of Chancery

Docket Number 11179

CONF ORD/ Tharp, Terrice vs Cognate Bioservices Inc

© 2015 The Bureau of National Affairs, Inc. All Rights Reserved. Terms of Service // PAGE 65