I think it is more likely than not that he has confidentiality requirements, though it is possible they did not, it seems unlikely to me as well.
It is true that beggars often can’t be choosers in different situations in terms of that requirement. So negotiation power often can affect the willingness of lenders to sign them. But for NWBO, depending on how many possible sources and terms they might get, it is certainly somewhat risky not to insist on one and I’d think they would. I am not one who thinks this way, but we saw the suggestive attacks on the lender after the loan. I know Linda probably wants to protect the company above all, and protect those who lend, and the best way to do that, even when a lender might balk, is with an NDA.
There is always a back and forth in financing negotiations, because lenders do never like to sign NDA’s and I have put many into place over the years on the lender’s side. But lenders often do sign them in many instances. Clients may not think so but it also depends on the times a bit. And it depends on the circumstances and relative power of the parties in the negotiation.
The terms of the loan I think are very friendly. One can interpret that in multiple ways, terms were friendly because the parties were familiar, and comfortable with one another, and have a course of dealing already well established, possibly including NDA’s previously negotiated and then just easily signed again. Or, Fife gave friendly terms and on the non-transparent side, like the NDA’s that might be requested, they’ve dispensed with the formalities so that it was easier and quicker to conclude the deal. Or he really likes NWBO, is happy to sign an NDA and give friendly terms, because he is just a nice guy and wants to beat cancer.
And Fife gets the option to convert on good news and presumably still relatively early. That’s not bad. He gets the upside of equity then. Lesser risk in debt, upside early in equity, but after news.
I won’t claim to know the answer, though the 2nd two are not so likely, but I am sure there are more permutations. I think the first permutation I described is the most likely proper answer, they have previously negotiated a mutually acceptable NDA, which they could quickly and without pain sign again, and that course of dealing made the deal easy to close.
On the other hand, some financial institutions right now are trying to more tightly manage NDA’s and not to sign them at all, only in rare circumstances, which is a big change from past dealings. That is a very difficult ask, and can kill deals even that a lender really wants to close with a top client. For a small lender like Fife’s firm, that is likely less of an issue, but for major companies in finance, keeping track of these obligations, how long they last, who is bound by them, etc., they are a nuisance. Those companies have compliance functions, it is a different scale of a problem. Typically such firms don’t do deals this small though.
What I have seen more frequently in recent deals is Companies are also more frequently embedding entire confidentiality sections in deal documents these days to get around the pushback. It ends up being a take it or leave it situation, and best handled when they have multiple possible lenders. Who will accept most easily?
Having some look inside, if he already has a substantial holding, would allow Fife to know his overall disposition on the company going forward even if he can’t immediately act. There can be some advantages to signing an NDA therefore if you get to do more due diligence. You’d know a bit better if you’d want to convert to equity with more certainty maybe. The debt gives him seniority to equity, which is safer and has less downside for now. He doesn’t have to know all the details people presume he knows to feel comfortable lending, even if he obviously might want to know those details. However, knowing some ancillary details for due diligence, as we all see every day, might be very important information to have as a lender.