NOVAVAX INC (Form: 10-Q, Received: 05/11/2009 16:45:00)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


þ		QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarterly Period Ended March 31, 2009


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 0-26770

NOVAVAX, INC.

(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)		22-2816046 (I.R.S. Employer Identification No.)

9920 Belward Campus Drive, Rockville, MD (Address of principal executive offices)		20850 (Zip code)

(240) 268-2000
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

þ Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

o Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated flier,” “accelerated flier” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

o Large accelerated filer

þ Accelerated filer

o Non-accelerated filer
(Do not check if a smaller reporting company)

o Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes þ No

The number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Shares of Common Stock Outstanding at May 5, 2009: 86,518,220

NOVAVAX, INC.
Form 10-Q
For the Quarters Ended March 31, 2009 and 2008 (unaudited)

Table of Contents


PART I. FINANCIAL INFORMATION

Item 1	Financial Statements

	Consolidated Balance Sheets as of March 31, 2009 (unaudited) and December 31, 2008	1

	Consolidated Statements of Operations for the three-months ended March 31, 2009 and 2008 (unaudited)	2

	Consolidated Statements of Stockholders’ Equity as of March 31, 2009 (unaudited)	3

	Consolidated Statements of Cash Flows for the three months ended March 31, 2009 and 2008 (unaudited)	4

	Notes to the Consolidated Financial Statements (unaudited)	6

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3	Quantitative and Qualitative Disclosures about Market Risk	32

Item 4	Controls and Procedures	33

PART II. OTHER INFORMATION

Item 1	Legal Proceedings	34

Item 1A	Risk Factors	34

Item 6	Exhibits	34

SIGNATURES

PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

NOVAVAX, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share information)


	March 31,			December 31,
	2009			2008
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	19,629		$	26,938
Short-term investments classified as available for sale		5,958			6,962
Accounts and other receivables, net of allowance for doubtful accounts of $218 as of March 31, 2009 and December 31, 2008		61			290
Prepaid expenses and other current assets		994			774
Current assets of discontinued operations		—			132

Total current assets		26,642			35,096

Property and equipment, net		8,019			8,228
Goodwill		33,141			33,141
Other non-current assets		160			160


Total assets	$	67,962		$	76,625

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		1,024			1,750
Accrued expenses and other current liabilities		3,208			2,969
Current portion of notes payable		385			650
Current liabilities of discontinued operations		—			242
Convertible notes, current		21,881			21,778
Deferred rent		334			328

Total current liabilities		26,832			27,717

Non-current portion of notes payable		468			480
Deferred rent		2,868			2,939


Total liabilities		30,168			31,136


Commitments and contingencies		—			—

Stockholders’ equity:
Preferred stock, $0.01 par value, 2,000,000 shares authorized; no shares issued and outstanding		—			—
Common stock, $0.01 par value, 100,000,000 shares authorized; 69,310,521 shares issued and 68,855,091 shares outstanding at March 31, 2009 and 69,220,221 shares issued and 68,764,591 shares outstanding at December 31, 2008		693			692
Additional paid-in capital		285,248			284,595
Notes receivable from directors		(1,572	)		(1,572	)
Accumulated deficit		(244,125	)		(235,776	)
Treasury stock, 455,430 shares at March 31, 2009 and December 31, 2008, cost basis		(2,450	)		(2,450	)


Total stockholders’ equity		37,794			45,489


Total liabilities and stockholders’ equity	$	67,962		$	76,625

The accompanying notes are an integral part of these consolidated financial statements.

NOVAVAX, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share information)
(unaudited)


	Three months ended
	March 31,
	2009			2008

Revenues	$	21		$	458


Operating costs and expenses:
Research and development		4,266			4,434
Selling, general and administrative		2,892			3,244


Total operating costs and expenses		7,158			7,678


Loss from continuing operations before other (expense) income, net		(7,137	)		(7,220	)

Other (expense) income, net		(1,212	)		117


Loss from continuing operations		(8,349	)		(7,103	)
Loss from discontinued operations		—			(652	)

Net loss	$	(8,349	)	$	(7,755	)


Basic and diluted net loss per share:
Loss per share from continuing operations	$	(0.12	)	$	(0.12	)
Loss per share from discontinued operations		—			(0.01	)

Net loss per share	$	(0.12	)	$	(0.13	)


Basic and diluted weighted average number of common shares outstanding		68,692,455			61,280,155

The accompanying notes are an integral part of these consolidated financial statements.

NOVAVAX, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
For the Three Months Ended March 31, 2009
(in thousands, except share information)
(unaudited)


					Additional		Notes									Total
	Common Stock				Paid-in		Receivable			Accumulated			Treasury			Stockholders’
	Shares		Amount		Capital		From Directors			Deficit			Stock			Equity
Balance, December 31, 2008		69,220,021	$	692	$	284,595	$	(1,572	)	$	(235,776	)	$	(2,450	)	$	45,489

Non-cash compensation costs for stock options		—		—		350		—			—			—			350
Exercise of stock options		20,000		—		35		—			—			—			35
Issuance of stock		70,500		1		121		—			—			—			122
Amortization of restricted stock for compensation		—		—		147		—			—			—			147
Net loss		—		—		—		—			(8,349	)		—			(8,349	)


Balance, March 31, 2009		69,310,521	$	693	$	285,248	$	(1,572	)	$	(244,125	)	$	(2,450	)	$	37,794

The accompanying notes are an integral part of these consolidated financial statements.

NOVAVAX, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)


	Three months ended
	March 31,
	2009			2008

Operating Activities:
Net loss	$	(8,349	)	$	(7,755	)
Plus net income from discontinued operations		—			652

Net loss from continuing operations		(8,349	)		(7,103	)
Reconciliation of net loss to net cash used in operating activities:		—			—
Depreciation		294			209
Amortization of debt discount		103			102
Loss on disposal of property and equipment		29			18
Amortization of net discounts on short-term investments		—			(147	)
Reserve for notes receivable and accrued interest		—			194
Amortization of deferred financing costs		64			65
Deferred rent		(66	)		(1	)
Impairment of short-term investments		879			—
Non-cash stock compensation		497			450
Changes in operating assets and liabilities:
Accounts and other receivables		216			20
Inventory		(2	)		(18	)
Prepaid expenses and other current assets		(150	)		196
Accounts payable and accrued expenses		(242	)		(1,172	)
Other non-current assets		—			(28	)

Net cash used in operating activities from continuing operations		(6,727	)		(7,215	)
Net cash provided by operating activities from discontinued operations		—			2,013

Net cash used in operating activities		(6,727	)		(5,202	)


Investing Activities:
Capital expenditures		(63	)		(1,631	)
Proceeds from disposal of property and equipment		6			—
Purchases of short-term investments		—			(15,650	)
Proceeds from maturities of short-term investments		125			31,745

Net cash provided by investing activities from continuing operations		68			14,464
Net cash provided by investing activities from discontinued operations		—			1,134

Net cash provided by investing activities		68			15,598


Financing Activities:
Principal payments of notes payable		(807	)		(658	)
Net proceeds from sales of common stock		122			—
Proceeds from the exercise of stock options		35			35
Bank overdraft		—			579

Net cash (used in) financing activities		(650	)		(44	)

Net (decrease) increase in cash and cash equivalents		(7,309	)		10,352
Cash and cash equivalents at beginning of period		26,938			4,350

Cash and cash equivalents at end of period	$	19,629		$	14,702


Supplemental disclosure of cash flow information:
Cash interest payments	$	523		$	688


Supplemental disclosure of non-cash activities:
Equipment purchases included in accounts payable	$	47		$	1,128

The accompanying notes are an integral part of these consolidated financial statements.

NOVAVAX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

1. Organization

Novavax, Inc., a Delaware corporation (“Novavax” or the “Company”), was incorporated in 1987, and is a clinical-stage biopharmaceutical company focused on creating differentiated, value-added vaccines that improve upon current preventive options for a range of infectious diseases. These vaccines leverage the Company’s virus-like-particle (“VLP”) platform technology coupled with a unique, disposable production technology.

VLPs are genetically engineered three-dimensional nanostructures, which incorporate immunologically important lipids and recombinant proteins. The Company’s VLPs resemble the virus but lack the genetic material to replicate the virus. The Company’s proprietary production technology uses insect cells rather then chicken eggs or mammalian cells. The Company’s current product targets include vaccines against the H5N1 and other subtypes of avian influenza with pandemic potential, human seasonal influenza, Varicella Zoster (“VZV”), which causes Shingles, and Respiratory Syncytial Virus (“RSV”).

Subsequent Events

Cadila Pharmaceuticals Ltd.

On March 31, 2009, the Company and Cadila Pharmaceuticals Ltd., a company incorporated under the laws of India (“Cadila”), entered into a Joint Venture Agreement (the “JVA”) pursuant to which the Company and Cadila formed CPL Biologicals Limited, a joint venture (the “JV”), of which 80% will be owned by Cadila and 20% is owned by the Company. The JV must obtain approval from India’s Foreign Investment Promotion Board (the “FIPB”) prior to issuing shares to Novavax. The JV will develop and commercialize the Company’s seasonal influenza virus-like-particle (VLP)-based vaccine candidate and Cadila’s therapeutic vaccine candidates against cancer as well as its adjuvants, biogeneric products and other diagnostic products for the territory of India. Novavax will also contribute to the JV technology for the development of several other VLP vaccine candidates against diseases of public health concern in the territory, such as hepatitis E and chikungunya fever. Cadila will contribute approximately $8 million over three years to support the JV’s operations. The JV will be responsible for clinical testing and registration of products that will be marketed and sold in India.

The board of directors of the JV consists of five members, three of whom (including the Chairman of the board) are nominated by Cadila and two of whom are nominated by Novavax. If the board is not in unanimous agreement on an issue, the Chief Executive Officers (“CEOs”) of the Company and Cadila will work to resolve the issue. If the CEOs cannot resolve the issue in five business days, a vote by the majority of the board will decide. However, the approval of the Company and Cadila, as shareholders of the JV, and the board of directors of the JV is required for (1) the sale of all or most of the assets of the JV, (2) a change in control of the JV, (3) the liquidation, dissolution, or winding up of the JV, (4) any occurrence of indebtedness that results in the JV having a debt-to-equity ratio of 3-to-1 or greater, or (5) most amendments of the JVA or the JV’s Articles of Association.

The JV has the right to negotiate a definitive agreement for rights to certain future Novavax products (other than RSV) and certain future Cadila products in each case for the territory of India prior to Novavax or Cadila licensing such rights to a third party. Novavax has the right to negotiate the licensing of vaccines developed by the joint venture using Novavax’s technology for commercialization in every country except for India and vaccines developed by the joint venture using Cadila’s technology for commercialization in certain countries, including the United States.

In connection with the JVA, on March 31, 2009, the Company also entered into license agreement, an option to enter into a license agreement, a technical services agreement and a supply agreement with the JV.

Also on March 31, 2009, Novavax entered into a binding, non-cancellable Stock Purchase Agreement (the “SPA”) with Satellite Overseas (Holdings) Limited (“SOHL”), a subsidiary of Cadila, pursuant to which SOHL agreed to purchase 12.5 million shares of Company common stock, par value $0.01 (the “Common Stock”) at the market price of $0.88 per share.

NOVAVAX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

The stock purchase was consummated on April 1, 2009. The Company raised gross proceeds of $11 million in the offering. The net proceeds to the Company from the sale of the Common Stock, after deducting estimated offering expenses payable by the Company, was approximately $10.5 million.

The SPA provides that, as long as SOHL owns more than 5% of the Company’s then-outstanding Common Stock, SOHL may purchase a pro-rata portion of any Company Common Stock sale or issuance. Under the SPA, certain issuances are exempt from SOHL’s pre-emptive right, including shares issued (1) as stock dividends, stock splits, or otherwise payable pro rata to all holders of Common Stock; (2) to employees, officers, directors or consultants of the Company pursuant to an employee benefit program; (3) upon the conversion or exercise of any options, warrants or other rights to purchase Common Stock; and (4) as consideration for a merger, consolidation, purchase of assets, or in connection with a joint venture or strategic partnership. However, any issuances pursuant to (4) above, must be approved by a majority of the full board and, if the transaction exceeds 5% of the Company’s then issued and outstanding shares of Common Stock, the per share purchase price cannot be less than $0.88.

Under the SPA, for so long as SOHL owns 5% of the Company’s Common Stock, SOHL may designate one member of the Company’s board of directors.

Finally, on March 31, 2009, Novavax and Cadila entered into a Master Services Agreement (the “Master Services Agreement”) pursuant to which Novavax may request services from Cadila in the areas of biologics research, preclinical development, clinical development, process development, manufacturing scale up, and general manufacturing related services in India. If, at the third anniversary of the Master Services Agreement, the amount of services provided by Cadila is less than $7.5 million, Novavax will pay Cadila a portion of the shortfall. Novavax will have to pay Cadila the portion of the shortfall amount that is less than or equal to $2.0 million and 50% of the portion of the shortfall amount that exceeds $2.0 million. When calculating the shortfall, the amount of services provided by Cadila includes amounts that have been paid under all project plans, the amounts that will be paid under ongoing executed project plans and amounts for services that had been offered to Cadila, that Cadila was capable of performing, but exercised its right not to accept such project. The term of the Master Services Agreement is five years, but may be terminated by either party if there is a material breach that is not cured within 30 days of notice or, at any time after three years, provided that 90 days prior notice is given to the other party.

As a result of the contribution of the intellectual property to the joint venture, the company could recognize a taxable gain. Furthermore, since the Company has not analyzed whether it has had a change in ownership under Internal Revenue Code section 382, a gain could result in a tax liability to the Company since the Company’s tax net operating losses could be limited by section 382.

At the Market Issuance

On January 12, 2009 the Company entered into an At Market Issuance Sales Agreement (the “Sales Agreement”), with Wm Smith & Co. (“Wm Smith”), under which the Company may sell an aggregate of up to $25.0 million in gross proceeds of the Company’s common stock from time to time through Wm Smith, as the agent for the offer and sale of the common stock. The board of directors has authorized the sale of up to 12.5 million shares of common stock under the Sales Agreement. Based on the trading price of the Company’s common stock, the Company may not be able to raise the full $25.0 million in gross proceeds permitted under the Sales Agreement. Wm Smith may sell the common stock by any method permitted by law, including sales deemed to be an “at the market” offering as defined in Rule 415 of the Securities Act, including without limitation sales made directly on NASDAQ Global Market, on any other existing trading market for the common stock or to or through a market maker. Wm Smith may also sell the common stock in privately negotiated transactions, subject to the Company’s prior approval. The Company will pay Wm Smith a commission equal to 3% of the gross proceeds of the sales price of all common stock sold through it as sales agent under the Sales Agreement. During the first quarter of 2009, the Company sold 70,500 shares and received net proceeds in the amount of $121,457, under the Sales Agreement. As of May 5, 2009, the Company sold approximately an additional 3.1 million shares for net proceeds approximately of $7.5 million.

NOVAVAX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Amendments to Convertible Notes

As of March 31, 2009, the Company had $22.0 million of senior convertible notes outstanding (the “Notes”). The Notes carried a 4.75% coupon; are convertible into shares of Novavax common stock at $4.00 per share; and mature on July 15, 2009. On April 29, 2009, the Company entered into amendment agreements (the “2009 Amendments”) with holders of the outstanding 4.75% Note representing $17.0 million of the $22.0 million outstanding principal amount of the Notes to amend the terms of the Notes to allow for early payment under specific terms described below.

The 2009 Amendments (i) provide for payment of $17.0 million aggregate principal amount of the Notes on April 29, 2009, (ii) provide for 70% of this principal amount plus accrued and unpaid interest to be paid in cash and (iii) provide for the remaining portion of this principal amount to be paid in that number of shares of common stock that equals 30% of this principal amount divided by $2.50. The Company paid $12.1 million in principal and accrued interest and issued 2,040,000 shares in accordance with the 2009 Amendments on April 29, 2009. After payment of this $17.0 million in principal amount, $5.0 million aggregate principal amount remains outstanding under the Notes and will mature on July 15, 2009.

Under the terms of the Notes, Novavax, at its option, can pay up to 50% of the remaining $5.0 million outstanding Notes in Novavax common stock on the due date of July 15, 2009, subject to the satisfaction of certain conditions, including, among other things, a requirement that the shares issued upon conversion be registered or freely tradable without registration, that Novavax’s shares of common stock have not been suspended from trading on NASDAQ Global Market during the applicable measurement period and there is no threatened delisting or suspension, and that the Company is otherwise in compliance with its agreements with the Note holders. The amount of shares that may be issued at maturity may be subject to adjustment depending on the Note holder’s percentage ownership of the Company on an as-converted basis and if the Company’s stock price falls below $2.00 during the measurement period. As a result, the Company will have to pay at least $2.5 million in cash to satisfy the remaining Notes on the due date unless the notes are converted into common stock, redeemed or amended prior to July 15, 2009.

Liquidity Matters

The Company has incurred losses since its inception and as of March 31, 2009 has an accumulated deficit of $244 million.

The Company’s vaccine products currently under development or in clinical trials will require significant additional research and development efforts, including extensive pre-clinical and clinical testing and regulatory approval, prior to commercial use. There can be no assurance that the Company’s research and development efforts will be successful or that any potential products will prove safe and effective in clinical trials. Even if developed, these vaccine products may not receive regulatory approval or be successfully introduced and marketed at prices that would permit the Company to operate profitably. The commercial launch of any vaccine product is subject to certain risks including, but not limited to, manufacturing scale-up and market acceptance. The Company does not expect to generate revenue in the near future.

At March 31, 2009 the Company had cash and cash equivalents totaling $19.6 million and auction rate securities with a face value of $8.1 million and a fair value of $6.0 million. There has been insufficient demand at auction for each of the Company’s five auction rate securities. The Company recorded impairment charges of $1.2 million in the fourth quarter of 2008 and $0.9 million during the first quarter of 2009 due primarily to their illiquidity and believes the $6.0 million it has recorded at March 31, 2009 represents their fair market value and the value the Company could liquidate the investments for, if necessary. The Company is currently evaluating what purchase price it could get for these securities currently, along with the risks and benefits of holding versus selling these securities. Without liquidity of these auction rate securities, the Company’s cash position will be negatively affected.

NOVAVAX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

During the three months ended March 31, 2009, the Company sold 70,500 shares of common stock and received net proceeds in the amount of $121,457 pursuant to the Sales Agreement with Wm Smith. On March 31, 2009, the Company entered into a non-cancellable binding Stock Purchase Agreement for the sale of 12.5 million shares of common stock to a wholly-owned subsidiary of Cadila Pharmaceuticals Ltd., at the market price of $0.88 per share for a net purchase price of $10.5 million (See Subsequent Events — At the Market Issuance and Cadila Pharmaceuticals, Ltd. ). These proceeds were received on April 1, 2009.

As of May 5, 2009, the Company has sold approximately 3.1 million shares under the Sales Agreement with Wm Smith for net proceeds of approximately $7.5 million.

As of March 31, 2009, the Company had $22.0 million of senior convertible notes outstanding (the “Notes”). (See Subsequent Events — Amendments to Convertible Notes ).

Based on the amount of funds on hand and the Company’s proceeds from the Cadila transaction and the sales of shares under the Sales Agreement with Wm Smith, the Company believes that its cash and cash equivalents, excluding the value of its current illiquid auction rate securities, will be sufficient to cover its estimated funding needs for at least twelve months. The Company is planning to raise additional capital in order to continue its current level of operations and to pursue the business plan beyond 2009. The Company has not, however, secured any additional commitments for new financing at this time nor can it provide any assurance that new financing will be available on commercially acceptable terms, if at all. If the Company is unable to immediately secure additional capital, it will continue to assess its capital resources and the Company may be required to downsize its operations, reduce general and administrative costs or delay or reduce the scope of, or eliminate one or more of its product research and development programs, thereby causing delays in the Company’s efforts to introduce its future products to market.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim consolidated financial statements include the accounts of the Company and its wholly owned subsidiary (Fielding Pharmaceutical Company). All significant inter-company accounts and transactions have been eliminated in consolidation. They have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements reflect all adjustments that are in the opinion of management, necessary for a fair statement of such information. All such adjustments are of a normal recurring nature. Although Novavax believes that the disclosures are adequate to make the information presented not misleading, certain information and footnote disclosures, including a description of significant accounting policies normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted pursuant to such rules and regulations. Certain information and disclosures required by accounting principles generally accepted in the United States for complete consolidated financial statements are not included herein. The interim statements should be read in conjunction with the financial statements and notes thereto included in the company’s latest Annual Report on Form 10-K. The results of operations for the three months ended March 31, 2009 are not necessarily indicative of the results for any subsequent quarter or the entire fiscal year ending December 31, 2009.

Use of Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

NOVAVAX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Cash and Cash Equivalents

Cash equivalents consist of highly liquid investments with original maturities of three months or less from the date of purchase.

Net Loss per Share

The Company calculates net loss per share in accordance with SFAS No. 128, Earnings per Share. Basic loss per share is computed based on the weighted average number of common shares outstanding during the period. The dilutive effect of common stock equivalents is included in the calculation of diluted loss per share only when the effect of the inclusion would be dilutive. Outstanding stock options with an exercise price above market, are excluded from the Company’s diluted computation as their effect would be anti-dilutive. For the three months ended March 31, 2009, there were approximately 5.5 million outstanding stock options and 3.3 million outstanding warrants that were excluded from the calculation of net loss per share. For the three months ended March 31, 2008, there were approximately 4.3 million outstanding stock options that were excluded from the calculation of net loss per share.

Short-term investments

Short-term investments at March 31, 2009 and December 31, 2008 consist of investments in five auction rate securities with a par value of $8.1 million and $8.2 million, respectively, and a fair value of $6.0 million and $7.0 million, respectively. The Company recorded an other than temporary impairment charge to other expenses related to these securities during the three months ended March 31, 2009 of $0.9 million as a result of the current turmoil in the credit markets and management’s belief these securities cannot presently be sold at par value, but are saleable at a discount from their par value. The Company did not record any impairment charges during the three months ended March 31, 2008. The auction rate securities are AAA-rated securities.

The Company has classified these securities as short-term investments and have accounted for the investments in these securities as available for sale securities under the guidance of Statement of Financial Accounting Standards, Accounting for Certain Investments in Debt and Equity Securities (“SFAS No. 115”). Although the auction rate securities have variable interest rates, which typically reset every 16 to 32 days through a competitive bidding process known as a “Dutch auction,” they have long-term contractual maturities. These investments are classified within current assets because the Company may need to liquidate these securities within the next year to fund working capital requirements.

The available for sale securities are carried at fair value and unrealized gains and losses on these securities, if determined to be temporary, are included in accumulated other comprehensive income (loss) in stockholders’ equity. The Company assesses the recoverability of its available-for-sale securities and, if impairment is indicated, the Company measures the amount of such impairment by comparing the fair value to the carrying value. Other than temporary impairments are included in the consolidated statements of operations. The impairment for the three months ended March 31, 2009 was concluded to be other than temporary, thus the charge was recorded in the consolidated statement of operations.

The Company had invested in auction rate securities for short periods of time as part of its cash management program. Uncertainties in the credit markets have prevented the Company from liquidating certain holdings of auction rate securities subsequent to December 31, 2008 as the amount of securities submitted for sale during the auction has exceeded the amount of purchase orders. Although an event of an auction failure does not necessarily mean that a security is impaired, the Company considered various factors to assess the fair value and the classification of the securities as short-term assets. Fair value was determined through independent valuation using two valuation methods — a discounted cash flow method and a market comparables method. Certain factors used in these methods include, but are not limited to, comparable securities traded on secondary markets, timing of the failed auction, specific security auction history, quality of underlying collateral, rating of the security and the bond insurer, our ability and intent to retain the securities for a period of time to allow for anticipated recovery in the market value, and other factors.

NOVAVAX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Interest and dividend income is recorded when earned and included in interest income. Premiums and discounts, if any, on short-term investments are amortized or accreted to maturity and included in interest income. The specific identification method is used in computing realized gains and losses on sale of the Company’s securities.

Fair Value Measurements

On January 1, 2008, the Company adopted SFAS No. 157, Fair Value Measurements (“SFAS No. 157”), which clarifies the definition of fair value, establishes a framework for measuring fair value, and expends the disclosures on fair value measurements. In February 2008, the FASB issued FSP 157-2 that deferred the effective date of SFAS No. 157 for one year for nonfinancial assets and liabilities recorded at fair value on a non-recurring basis. SFAS No. 157 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. SFAS No. 157 also establishes a fair value hierarchy which, as outlined below, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Level 1 — Quoted prices in active markets for identical assets or liabilities. The Company does not have any Level 1 assets as of March 31, 2009.

Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. The Company considers its auction rate securities to be Level 2 assets.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. The Company’s Level 3 assets are composed of goodwill.

If the inputs used to measure the financial assets and liabilities fall within the different levels described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

NOVAVAX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Financial assets and liabilities measured at fair market value on a recurring basis as of March 31, 2009 are summarized below:


	Fair Value Measurement at
	March 31, 2009 using
	(in thousands)
	Quoted Prices in		Significant
	Active Markets		Other		Significant
	For Identical		Observable		Unobservable
	Assets		Inputs		Inputs		Assets
Assets	Level 1		Level 2		Level 3		At Fair Value
Auction rate securities	$	—	$	5,958	$	—	$	5,958
Goodwill		—		—		33,141		33,141


Total assets	$	—	$	5,958	$	33,141	$	39,099

Property and Equipment

Property and equipment are recorded at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, generally three to ten years. Amortization of leasehold improvements is provided over the shorter of the estimated useful lives of the improvements or the term of the respective lease. Repairs and maintenance costs are expensed as incurred.

Property and equipment are comprised of the following:


	As of
	March 31,			December 31,
	2009			2008
	(unaudited)
	(in thousands)
Construction in progress	$	1,219		$	5,394
Machinery and equipment		4,037			3,880
Leasehold improvements		4,523			637
Computer software and hardware		338			339

		10,117			10,250
Less accumulated depreciation and amortization		(2,098	)		(2,022	)


	$	8,019		$	8,228

Construction in progress is related to costs incurred in the construction of the Company’s Good Manufacturing Practice (“GMP”) pilot manufacturing facility, which started during the third quarter of 2007. The GMP pilot manufacturing facility was ready for use in January 2009, when the Company announced that all equipment in the pilot plant was installed and ready for operations supporting scale-up and validation.

Goodwill and Other Intangible Assets

Goodwill originally results from certain business acquisitions. Assets acquired and liabilities assumed are recorded at their fair values; the excess of the purchase price over the identifiable net assets acquired is recorded as goodwill. In accordance with SFAS No. 142, Goodwill and Other Intangible Assets (“SFAS No. 142”), goodwill is deemed to have an indefinite life and is subject to impairment tests annually, or more frequently should indicators of impairment arise. The Company’s judgments regarding the existence of impairment indicators are primarily dependent on the successful commercialization of its vaccine technologies, probability of success, growth and profitability. Achievability of prospective results is subject to a great deal of risk and, because events or circumstances may not occur as expected, differences between actual and expected results may be material.

NOVAVAX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Due to continued volatility in the financial and credit markets including the Company’s stock price, the Company determined it should perform an interim test for impairment of the Company’s goodwill as of March 31, 2009.

At March 31, 2009 and December 31, 2008, the Company used both the market approach and the income approach to determine if the Company had an impairment of its goodwill. The income approach was used as a confirming look to the market approach. The Company used a market approach to determine the market value of capitalization of its single reporting unit. Step one of the impairment test states that if the fair value of a reporting unit exceeds its carrying amount, goodwill is considered not to be impaired. The Company’s forecasts were used to create a risk adjusted discounted cash flow analysis to indicate the market value capitalization. The fair value of the Company’s reporting unit was compared to the carrying amount of the reporting unit. Under both approaches, the fair value of the reporting unit was higher than the carrying value, resulting in no impairment recorded against goodwill at March 31, 2009.

Revenue Recognition

The Company recognizes revenue in accordance with the provisions of Staff Accounting Bulletin No. 104, Revenue Recognition (“SAB No. 104”). For product sales, revenue is recognized when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred, the seller’s price to the buyer is fixed or determinable and collectability is reasonably assured. The Company recognizes these sales, net of allowances for returns and rebates. The Company estimates the amount of rebates and returns and records them as a liability and reduction of revenue upon sale of the products. For upfront payments and licensing fees related to contract research or technology, the Company follows the provisions of SAB No. 104 in determining if these payments and fees represent the culmination of a separate earnings process or if they should be deferred and recognized as revenue as earned over the life of the related agreement. Milestone payments are recognized as revenue upon achievement of contract-specified events and when there are no remaining performance obligations. Revenue earned under research contracts is recognized in accordance with the terms and conditions of such contracts for reimbursement of costs incurred and defined milestones.

Stock-Based Compensation

Stock Options

The Company accounts for its stock options in accordance with Statement of Financial Accounting Standard No. 123 (revised), Accounting for Stock-Based Compensation (“SFAS No. 123R”). This standard requires the Company to measure the cost of employee services received in exchange for equity share options granted based on the grant-date fair value of the options. The cost is recognized as compensation expense over the requisite service period (generally the vesting period) of the options. Compensation cost included in operating expenses was $350,000 and $365,000 for the three months ended March 31, 2009 and March 31, 2008, respectively.

As of March 31, 2009, there were 6,771,669 stock options outstanding with the aggregate fair value of the remaining compensation cost of unvested options, as determined using a Black-Scholes option valuation model, was approximately $345,471 (net of estimated forfeitures). This unrecognized compensation cost of unvested options is expected to be recognized over a weighted average period of 1.58 years. During the three months ended March 31, 2009, the Company granted 751,025 stock options, with a fair value of approximately $292,468 (net of estimated forfeitures), and 65,734 options were forfeited. During the three months ended March 31, 2008, the Company granted 784,150 options, with a fair value of approximately $1,072,000 (net of estimated forfeitures), and 156,950 options were forfeited.

The weighted average fair value of stock options on the date of grant and the assumptions used to estimate the fair value of stock options issued during the three months ended March 31, 2009 and 2008, using the Black-Scholes options valuation model, were as follows:

NOVAVAX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


	Three Months Ended
	March 31,
	2009			2008
Weighted average fair value of options granted	$	0.39		$	1.72
Expected life (years)		4.0 — 6.29			4.03 — 5.94
Expected volatility		85.68% — 95.08	%		81.14% — 89.34	%
Risk free interest rate		1.56% — 2.27	%		2.37% — 2.50	%%
Expected dividend		0.0	%		0.0	%
Expected forfeiture rate		21.96	%		20.34	%

The expected life of options granted was based on the Company’s historical share option exercise experience using the historical expected term from the vesting date. The expected volatility of the options granted during the three months ended March 31, 2009 and 2008 was determined using historical volatilities based on stock prices over a look-back period corresponding to the expected life. The risk-free interest rate was determined using the yield available for zero-coupon U.S. government issues with a remaining term equal to the expected life of the options. The forfeiture rate was determined using historical rates since the inception of the plans. The Company has never paid a dividend, and as such the dividend yield is zero.

Restricted Stock

Non-cash compensation expense related to all restricted stock issued to employees and directors has been recorded as compensation using the straight-line method of amortization. The Company accounts for stock-based awards issued to non-employees in accordance with Emerging Issues Task Force (“EITF”) Issue No. 96-18, Accounting for Equity Instruments That are Issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods or Services. For the three months ended March 31, 2009, $147,000 of non-cash stock compensation expense was included in total operating costs and expenses and additional paid-in capital was increased accordingly. For the three months ended March 31, 2008, $85,000 of non-cash stock compensation expense was included in total operating costs and expenses and additional paid in capital was increased accordingly.

Recent Accounting Pronouncements

In April 2009, the Financial Accounting Standards Board (“FASB”) issued FSP SFAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies , to amend the provisions related to the initial recognition and measurement, subsequent measurement and disclosure of assets and liabilities arising from contingencies in a business combination under SFAS 141(R). Under the new guidance, assets acquired and liabilities assumed in a business combination that arise from contingencies should be recognized at fair value on the acquisition date if fair value can be determined during the measurement period. If fair value cannot be determined, companies should typically account for the acquired contingencies using existing guidance. The Company is reviewing this pronouncement as it relates to its recent agreement Joint Venture (JV) with Cadila Pharmaceuticals Ltd. The adoption of this pronouncement is not expected to have a material effect on the Company’s financial position and results from operations.

In April 2009, the FASB issued FSP SFAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly which provides additional guidance for estimating fair value in accordance with FASB Statement No. 157, Fair Value Measurements , when the volume and level of activity for the asset or liability have significantly decreased. This FSP also includes guidance on identifying circumstances that indicate a transaction is not orderly. This pronouncement is effective for periods ending after June 15, 2009. The Company does not expect this pronouncement to have a material effect on the Company’s financial position and results of operations.

NOVAVAX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

This pronouncement is effective for periods ending after June 15, 2009. The Company does not expect this pronouncement to have a material effect on the Company’s financial position and results of operations.

In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1 Interim Disclosures about Fair Value of Financial Instruments (“FSP FAS 107”) , which amends SFAS No. 107, “Disclosures about Fair Value of Financial Instruments,” to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This FSP also amends APB Opinion No. 28, “Interim Financial Reporting,” to require those disclosures in summarized financial information at interim reporting periods and is effective for interim periods ending after June 15, 2009. The Company does not believe this pronouncement will have a material impact on the financial position and results of operations.

Significant Transactions

Graceway Agreements

In February 2008, the Company entered into an asset purchase agreement with Graceway Pharmaceuticals, LLC (“Graceway”), pursuant to which Novavax sold Graceway its assets related to Estrasorb in the United States, Canada and Mexico. The assets sold include certain patents related to the micellar nanoparticle technology (the “MNP Technology”), trademarks, know-how, manufacturing equipment, customer and supplier relations, goodwill and other assets. Novavax retained the rights to commercialize Estrasorb outside of the United States, Canada and Mexico.

In February 2008, Novavax and Graceway also entered into a supply agreement, pursuant to which Novavax agreed to manufacture additional units of Estrasorb with final delivery completed in August 2008. Graceway will pay a preset transfer price per unit of Estrasorb for the supply of this product. Once Novavax delivered the required quantity of Estrasorb, Novavax cleaned the manufacturing equipment and prepared the equipment for transport. Graceway removed the equipment from the manufacturing facility and Novavax exited the facility in August 2008.

In February 2008, Novavax and Graceway also entered into a license agreement, pursuant to which Graceway granted Novavax an exclusive, non-transferable (except for certain allowed assignments and sublicenses), royalty-free, limited license to the patents and know-how that Novavax sold to Graceway pursuant to the asset purchase agreement. The licensed grant allows Novavax to make, use and sell licensed products and services in certain, limited fields. Upon commencement of the Graceway agreement, the license and supply agreements with Allergan, Inc., successor-in-interest to Esprit Pharma, Inc., were terminated in February 2008 and October 2007, respectively.

In connection with the closing of the transaction, Novavax received an upfront payment from Graceway. The Company determined that the Graceway agreements should be accounted for as a single arrangement with multiple elements as defined in EITF 00-21, Revenue Arrangements with Multiple Deliverables (“EITF 00-21”). Under EITF 00-21, in an arrangement with multiple deliverables, the delivered item(s) should be considered a separate unit of accounting if it has stand-alone value and the fair value of the undelivered performance obligations can be determined. If the fair value of the undelivered performance obligations can be determined, such obligations would be accounted for separately as performed. If the fair value of undelivered performance obligations cannot be determined, the arrangement is accounted for as a single unit of accounting. The Company evaluated the deliverables related to the Graceway supply and asset purchase agreements under the criteria of EITF 00-21 to determine whether they met the requirements for separation within a multi-element arrangement.

NOVAVAX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

The Company concluded that the deliverables would not be treated as separate units of accounting as there was no objective and reliable evidence of the fair value of the undelivered items related to the manufacture of the additional Estrasorb lots and the cleaning and preparation of the equipment under the terms of supply agreement. Accordingly, all revenue associated with the deliverables, under both the supply and asset purchase agreement, was deferred and was not recognized until the Company’s obligations were completed in August 2008.

License Agreement with University of Massachusetts Medical School

Effective February 26, 2007, the Company entered into a worldwide agreement to exclusively license a VLP technology from the University of Massachusetts Medical School (“UMMS”). Under the agreement, the Company has the right to use this technology to develop VLP vaccines for the prevention of any viral diseases in humans. As of March 31, 2009 and December 31, 2008, the Company made payments to UMMS in an aggregate amount that is not material. In addition, the Company will make certain payments based on development milestones as well as future royalties on any sales of products that may be developed using the technology. The Company believes that all payments under the UMMS agreement will not be material to the Company in the foreseeable future. The UMMS agreement will remain effective as long as at least one claim of the licensed patent rights cover the manufacture, sale or use of any product unless terminated sooner at the Company’s option or by UMMS for an uncured breach by Novavax.

License Agreement with Wyeth Holdings Corporation

On July 5, 2007, the Company entered into a License Agreement with Wyeth Holdings Corporation, a subsidiary of Wyeth (“Wyeth”). The license is a non-exclusive, worldwide license to a family of patent applications covering VLP technology for use in human vaccines in certain fields of use. The agreement provides for an upfront payment, annual license fees, milestone payments and royalties on any product sales. If each milestone is achieved for any particular product candidate, the Company would be obligated to pay an aggregate of $14 million to Wyeth Holdings for each product candidate developed and commercialized under the agreement. Achievement of each milestone is subject to many risks, including those described in the Company’s risk factors described in Item 1A of Part I of the Company’s Annual Report of Form 10-K for the year ended in December 31, 2008. Annual license maintenance fees under the Wyeth Holdings agreement aggregate $0.3 million per year. The royalty to be paid by the Company under the agreement, if a product is approved by the FDA for commercialization, will be based on single digit percentage of net sales. Payments under the agreement to Wyeth as of March 31, 2009 aggregated $4.8 million and could aggregate up to an additional $0.3 million in 2009, depending on the achievement of clinical development milestones. The agreement will remain effective as long as at least one claim of the licensed patent rights cover the manufacture, sale or use of any product unless terminated sooner at Novavax’s option or by Wyeth for an uncured breach by Novavax.

Notes Payable

Notes payable consist of the following:


	March 31,			December 31,
	2009			2008
	(unaudited)
	(In thousands)
Note payable; insurance financing; bears interest at 4.9% per annum; principal and interest due in monthly installments of $51,677 through September 2009	$	305		$	570
Notes payable; Opportunity Grant Funds; non-interest bearing; principal only payments due in monthly installments of $6,666 through May 2012		240			260
Other		308			300

Total		853			1,130
Less current portion		(385	)		(650	)

Long-term portion	$	468		$	480

NOVAVAX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Opportunity Grant Funds

In July 2005, the Company received a $400,000 Opportunity Grant from the Commonwealth of Pennsylvania for the reimbursement of certain costs incurred in connection with the move of the Company’s corporate headquarters and product development activities to Malvern, Pennsylvania.

The Company announced in December 2006, that it had signed a long-term lease for its then new corporate headquarters and research and development facility in Rockville, Maryland. As a result of the Company’s failure to comply with the conditions of the grant, the Department of Community & Economic Development (“DCED”) of the Commonwealth of Pennsylvania requested that the Company repay the full amount of the Opportunity Grant.

In April 2007, the Company entered into a Settlement and Release Agreement with the Commonwealth of Pennsylvania, acting by and through DCED, whereby the Company agreed to repay the sum of the original grant in 60 monthly installments starting on May 1, 2007. The loan was reclassified to notes payable. The terms of the agreement stipulate the amount of the monthly repayment to be $6,667 for 60 months. Interest does not accrue on the outstanding balance. During the three months ended March 31, 2009 and 2008, the Company made payments totaling $20,000. The $240,000 balance of the loan is included in notes payable at March 31, 2009.

Convertible Notes

Convertible notes consist of the following (in thousands):


	March 31,			December 31,
	2009			2008
	(In thousands)
Note payable; 4.75% senior convertible, issued July 19, 2004, due July 15, 2009, currently convertible by the holders into 4,029,304 shares of Novavax common stock at $4.00 per share	$	22,000		$	22,000
Less: Discount		(119	)		(222	)

Note payable, net	$	21,881		$	21,778

As of March 31, 2009 and December 31, 2008, the Company had an aggregate principal amount of $22.0 million of senior convertible notes outstanding (the “Notes”). The Notes carry a 4.75% coupon; are convertible into shares of Novavax common stock at $4.00 per share; and mature in five years on July 15, 2009. On June 15, 2007, the Company entered into amendment agreements (the “2007 Amendments”) with each of the holders of the outstanding Notes to amend the terms of the Notes. The 2007 Amendments (i) lowered the conversion price from $5.46 to $4.00 per share, (ii) eliminated the holders’ right to require the Company to redeem the Notes if the weighted average price of the Company’s common stock is less than the conversion price on 30 of the 40 consecutive trading days preceding July 19, 2007 or July 19, 2008 and (iii) mandated that the Notes be converted into Company common stock if the weighted average price of the Company’s common stock is greater than $7.00 (a decrease from $9.56) in any 15 out of 30 consecutive trading days after July 19, 2007. The Notes are also redeemable upon the occurrence of specified events of default as well as a “change of control” (as that term is defined in the Notes) of Novavax. At March 31, 2009 and December 31, 2008, the Company had accrued interest of $213,000 and $478,123, respectively, relating to these Notes.

On April 29, 2009, the Company entered into amendment agreements (the “2009 Amendments”) with holders of the outstanding 4.75% Notes representing $17.0 million of the $22.0 million outstanding principal amount of the Notes to amend the terms of the Notes to allow for early payment under specific terms described below.

NOVAVAX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

The 2009 Amendments (i) provide for payment of $17,000,000 aggregate principal amount of the Notes on April 29, 2009, (ii) provide for 70% of this principal amount plus accrued and unpaid interest to be paid in cash and (iii) provide for the remaining portion of this principal amount to be paid in that number of shares of Common Stock that equals 30% of this principal amount divided by $2.50. On April 29, 2009, the Company paid $12.1 million in principal and accrued interest and issued 2,040,000 shares of common stock in accordance with the terms of the 2009 Amendments. After payment of this $17.0 million in principal amount, $5.0 million aggregate principal amount remains outstanding under the Notes and will mature on July 15, 2009.

Under the terms of the Notes, Novavax, at its option, can pay up to 50% of the remaining $5.0 million outstanding Notes in Novavax common stock on the due date of July 15, 2009, subject to the satisfaction of certain conditions, including, among other things, a requirement that the shares issued upon conversion be registered or freely tradable without registration, that Novavax’s shares of common stock have not been suspended from trading on NASDAQ Global Market during the applicable measurement period and there is no threatened delisting or suspension, and that the Company is otherwise in compliance with its agreements with the Note holders. The amount of shares that may be issued at maturity may be subject to adjustment depending on the Note holder’s percentage ownership of the Company on an as-converted basis and if the Company’s stock price falls below $2.00 during the measurement period. As a result, the Company will have to pay at least $2.5 million in cash to satisfy the Notes on the due date unless the Notes are converted into common stock, redeemed or amended.

In connection with the 2007 Amendments, the Company recorded a debt discount of $852,000 and increased additional paid-in capital accordingly. The debt discount is being amortized over the remaining term of the Notes. Interest expense includes $102,000 related to the amortization of the debt discount for the three months ended March 31, 2009 and 2008.

Operating Leases

Future minimum rental commitments under non-cancelable leases as of March 31, 2009 are as follows (in thousands):


	Operating				Net Operating
Year	Leases		Sub-Leases		Leases

2009	$	1,701	$	248	$	1,453
2010		2,088		338		1,750
2011		2,087		259		1,828
2012		2,132		—		2,132
2013		2,179		—		2,179
Thereafter		6,399		—		6,399


Total minimum lease payments	$	16,586	$	845	$	15,741

In April 2009, we negotiated an amendment to our sublease with PuriCore to expand the term of the sublease until September 30, 2011, to expand the sublease premises to include all of the approximately 32,900 rentable square feet and to grant PuriCore the option to renew the sublease for an additional three-year term. We are currently awaiting the landlord’s approval of this amendment, which is required before it can become effective.

Sales and Issuance of Common Stock

During the three months ended March 31, 2008, the Company received net proceeds of $35,000 from the exercise of 20,571 shares of common stock options, at a range of $1.34 to $2.67 per share.

During the three months ended March 31, 2009, the Company received net proceeds of $35,000 for the exercise of 20,000 shares of common stock options at $1.75 per share.

NOVAVAX, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Income Taxes

The American Recovery and Reinvestment Act of 2009 was enacted and signed into law on February 17, 2009. The Act include the extension of a provision passed by the United States Congress in 2008 which allows companies to accelerate the recognition of a portion of research and development (“R&D”) credits in lieu of bonus depreciation and convert the R&D credits carry forward into currently refundable credits. The amount that may be converted is based on the amount invested in property that would otherwise qualify for bonus depreciation and is capped at the lesser of 6% of historic R&D credits or $30 million. The Company is evaluating the R&D credit provisions of the Act but has not yet reached a decision whether it will forego the bonus depreciation to obtain any R&D credit that may be refundable.

3. Discontinued Operations

In October 2007, the Company entered into agreements to terminate its supply agreements with Allergan. In connection with the termination, the Company decided to wind down operations at its manufacturing facility in Philadelphia, Pennsylvania. The results of operations for the manufacturing facility are being reported as discontinued operations and the consolidated statements of operations for prior periods have been adjusted to reflect this presentation.

The assets and liabilities related to the Company’s manufacturing facility in Philadelphia, Pennsylvania had identifiable cash flows that were largely independent of the cash flows of other groups of assets and liabilities and the Company did not have a significant continuing involvement beyond one year after the closing of the Graceway transaction.

Therefore, in accordance with Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (“SFAS No. 144”), the accompanying consolidated balance sheets report the assets and liabilities related to the Company’s Philadelphia manufacturing facility as discontinued operations in all periods presented, and the results of operations have been classified as discontinued operations in the accompanying consolidated statements of operations for all periods presented. The Company delivered the required quantity of Estrrasorb as required under the Graceway agreements, and exited the facility in August 2008.

The following table presents summarized financial information for the Company’s discontinued manufacturing operations presented in the consolidated statements of operations for the three months ended March 31, 2009 and 2008:


	2009		2008
	(Unaudited)
	(In thousands)
Revenues	$	—	$	86


Cost of products sold		—		738


Net loss	$	—	$	(652	)

The following table presents major classes of assets and liabilities that have been presented as assets and liabilities of discontinued operations in the accompanying consolidated balance sheets.


	March 31,		December 31,
	2009		2008
	(Unaudited)
	(In thousands)

Prepaid expenses and other current assets	$	—	$	132

Current assets of discontinued operations	$	—	$	132


Accounts payable	$	—	$	209
Accrued expenses and other liabilities		—		33

Current liabilities of discontinued operations	$	—	$	242

In February 2008, the Company completed the sale of certain assets used in the production of Estrasorb to Graceway (See Note 2). As discussed above, the Company received an upfront payment from Graceway in connection with the execution of the agreements. As part of the asset purchase agreement, the Company transferred to Graceway, manufacturing equipment valued at $1.1 million related to the production of Estrasorb on the closing date, which had been included as assets held for sale in the Company’s consolidated balance sheet.

4. Related Party Transactions

Effective April 1, 2009, the Board elected Rajiv I. Modi Ph.D., managing director of Cadila, as a Class I director. Dr. Modi was elected to the board pursuant to the Stock Purchase Agreement dated March 31, 2009 between Novavax and SOHL, a subsidiary of Cadila, which requires that, for so long as SOHL owns 5% of the Company’s Common Stock, SOHL may designate one member of the Board.

On March 31, 2009, Novavax entered into several material agreements with Cadila, SOHL and CPL Biologicals Limited, the JV formed by the Company and Cadila, 80% of which will be owned by Cadila (the “JV”). Cadila has committed to fund approximately $8 million of working capital to the JV over three years. Dr. Modi serves as managing director of Cadila and his family has a substantial ownership interest in Cadila and therefore he has an indirect material interest in these material agreements further described below. Due to Dr. Modi’s interest in Cadila and the JV, he is not “independent” as that term is defined in the NASDAQ listing standards.

As stated above, on March 31, 2009, Novavax entered into a Stock Purchase Agreement (the “SPA”) with SOHL, pursuant to which SOHL agreed to purchase 12.5 million shares of Company Common Stock at $0.88 per share, which closed on April 1, 2009. The Company raised gross proceeds of $11 million in the offering. The net proceeds to the Company from the sale of the Common Stock, after deducting estimated offering expenses payable by the Company, is approximately $10.5 million. The SPA provides that, as long as SOHL owns more than 5% of the Company’s then-outstanding Common Stock, SOHL may purchase a pro-rata portion of most Company Common Stock sales or issuances.

Finally, on March 31, 2009, Novavax and Cadila entered into a Master Services Agreement (the “Master Services Agreement”) pursuant to which Novavax may request services from Cadila in the areas of biologics research, preclinical development, clinical development, process development, manufacturing scale up, and general manufacturing related services in India. If, at the third anniversary of the Master Services Agreement, the amount of services provided by Cadila is less than $7.5 million, Novavax will pay Cadila a portion of the shortfall. Novavax will have to pay Cadila the portion of the shortfall amount that is equal to $2.0 million and 50% of the portion of the shortfall amount that exceeds $2.0 million. When calculating the shortfall, the amount of services provided by Cadila includes amounts that have been paid under all project plans, the amounts that will be paid under ongoing executed project plans and amounts for services that had been offered to Cadila, that Cadila was capable of performing, but exercised its right not to accept such project.

The aggregate dollar value of the these agreements above is approximately $11 million for the Stock Purchase Agreement, $7.5 million for the Master Services Agreement, and $8 million for the Joint Venture Agreement.

On April 27, 2007 and effective as of March 31, 2007, the Company entered into a consulting agreement with Mr. John Lambert, the Chairman of the Company’s Board of Directors. The agreement terminates on March 8, 2010, unless terminated sooner by either party upon 30 days written notice. Under the agreement, Mr. Lambert is expected to devote one-third of his time to the Company’s activities. As a consultant, Mr. Lambert is required to work closely with the senior management of the Company on matters related to clinical development of its vaccine products, including manufacturing issues, FDA approval strategy and commercialization strategy. His annual compensation is $220,000 in consideration for his consulting services. On March 6, 2008, the Company granted Mr. Lambert 25,000 stock options under the 2005 Plan with a fair value of approximately $41,000. On March 5, 2009, the Company granted Mr. Lambert 25,000 stock options under the 2005 plan with a fair value of approximately, 10,000. For the three months ended March 31, 2009 and 2008, the Company recorded consulting expenses for Mr. Lambert of $55,000 in accordance with the consulting agreement.

On March 21, 2002, pursuant to the Novavax, Inc. 1995 Stock Option Plan, the Company approved the payment of the exercise price of options by two of its directors, through the delivery of full-recourse, interest-bearing promissory notes in the aggregate amount of $1,480,000. The borrowings accrued interest at 5.07% per annum and were secured by an aggregate of 261,667 shares of common stock owned by the directors. The notes were payable upon the earlier to occur of the following: (i) the date on which the director ceases for any reason to be a director of the Company, (ii) in whole, or in part, to the extent of net proceeds, upon the date on which the director sells all or any portion of the pledged shares or (iii) payable in full on March 21, 2007.

In May 2006, one of these directors resigned from the Company’s Board of Directors. Following his resignation, the Company approved an extension of the former director’s $448,000 note to December 31, 2007 or earlier to the extent of the net proceeds of the pledged shares. In connection with this extension, the former director executed a general release of all claims against the Company.

On May 7, 2008, the Company and the former director entered into an Amended and Restated Promissory Note and an Amended and Restated Pledge Agreement (the “Amendment”). The Amendment restates the entire amount outstanding as of December 31, 2007, including accrued interest, or $578,848, as the new outstanding principal amount. Furthermore, the Amendment extends the maturity date of the note to June 30, 2009, permits the Company to sell the pledged shares if the market price of the common stock as reported on NASDAQ Global Market exceeds certain targets, increases the interest rate to 8.0% and stipulates quarterly payments beginning on June 30, 2008. The Company received a first payment of $50,000 in July 2008 and a second payment of $5,000 in October 2008, with a balance due by December 31, 2008 of $45,000. In January 2009, the Company received an additional payment of $10,000.

In March 2007, the second director resigned from the Board of Directors. In an agreement dated May 7, 2007, the Board agreed to extend the note that was due March 21, 2007 to June 30, 2009 and secured additional collateral in the form of a lien on certain outstanding stock options. Also under the May 7, 2007 agreement, the Company has the right to exercise the stock options, sell the acquired shares and the other shares held as collateral and use the proceeds to pay the debt, if the share price exceeds $7.00 at any time during the period between May 7, 2007 and June 30, 2009. As of December 31, 2007, the note and the corresponding accrued interest receivable totaling $1,334,117 was included in non-current other assets in the accompanying consolidated balance sheet. The note continues to accrue interest at 5.07% per annum and continues to be secured by 166,666 shares of common stock owned by the former director.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain statements contained herein or as may otherwise be incorporated by reference herein constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements regarding product sales, future product development and related clinical trials, and future research and development, including Food and Drug Administration approval. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from those expressed or implied by such forward-looking statements.

Factors that may cause actual results to differ materially from the results discussed in the forward-looking statements or historical experience include risks and uncertainties, including the Company’s ability to raise capital through public or private equity and/or debt financings; the maturity of the convertible notes on July 15, 2009, the failure by Novavax to secure and maintain relationships with collaborators; risks relating to the early stage of Novavax’s product candidates under development; uncertainties relating to commencing clinical trials and their outcome; risks relating to the supply and commercialization, if any, of Novavax’s proposed product candidates; dependence on the efforts of third parties; dependence on intellectual property; competition for clinical resources and patient enrollment from drug candidates in development by other companies with greater resources and visibility and other factors referenced herein.

All forward-looking statements contained in this quarterly report are based on information available to the Company on the date hereof, and the Company assumes no obligation to update any such forward-looking statements, except as specifically required by law. Accordingly, past results and trends should not be used to anticipate future results or trends.

Overview

VLPs are genetically engineered three-dimensional nanostructures, which incorporate immunologically important lipids and recombinant proteins. Our VLPs resemble the virus but lack the genetic material to replicate the virus. Our proprietary production technology uses insect cells rather then chicken eggs or mammalian cells. The Company’s current product targets include vaccines against the H5N1 and other subtypes of avian influenza with pandemic potential, human seasonal influenza, Varicella Zoster (“VZV”), which causes shingles, and a Respiratory Syncytial Virus (“RSV”).

We made significant progress since 2007 in our vaccine that targets the H5N1 avian influenza with pandemic potential. In December 2007, we announced favorable interim results for a Phase I clinical trial which began in July 2007 for our pandemic influenza vaccine, that demonstrated immunogenicity and safety. In August 2008, we received favorable results from a Phase I/IIa trial which was conducted to gather additional patient immunogenicity and safety data, as well as to determine a final dose, which demonstrated strong neutralizing antibody titers across all three doses tested. Although the safety data are still blinded pending complete safety follow-up, there were no serious adverse events reported. In February 2009, we announced that the vaccine induced robust hemagglutination inhibition (“HAI”) responses, which have been shown to be important for protection against influenza disease. In April 2009, we reported preclinical study results, conducted by scientists from both the Centers for Disease Control and Prevention, and the Company under a Collaborative Research and Development Agreement showing that an investigational H1N1 VLP vaccine based on the 1918 Spanish influenza strain protected against both the Spanish flu and a highly pathogenic H5N1 avian influenza strain. We have begun the work on creating a VLP vaccine candidate against the 2009 H1N1 swine flu virus and expect to complete production of the first batch of vaccine within 12 weeks of receiving the protein sequences. This faster cycle time from strain identification to first vaccine batch would be another demonstration of our abilities to create strain specific vaccines to potential pandemic influenza viruses. Over the past few years, we have gone through the process of creating recombinant VLP vaccines for multiple strains of influenza, both of seasonal as well as avian strains. This experience and knowledge has prepared us to execute this real life challenge.

We only intend to initiate further human clinical trials for our pandemic influenza vaccine, which would be required for regulatory approval, with a collaborative partner.

We also progressed development of our VLP trivalent vaccine that targets seasonal influenza virus in 2008 and 2007. In December 2008, we announced favorable safety and immunogenicity results from our Phase IIa seasonal study in healthy adults which we commenced in September 2008 to evaluate the safety and immunogenicity of different doses of our seasonal influenza vaccine. We observed a slightly different safety profile (non-serious adverse events) from our Phase IIa trial of our pandemic VLP vaccine, and are reviewing and analyzing the dose response curve as well as the safety data from the healthy adult seasonal trial before commencing a seasonal influenza dose ranging study in the elderly ( > 65 years of age) in the second half of 2009.

On May 5, 2009, we announced the initiation of enrollment in the second Phase II study of its trivalent seasonal influenza VLP vaccine candidate. This clinical trial is designed to evaluate the safety and immunogenicity of a broader range of vaccine doses and to provide data to help select doses for future studies in older adults and a Phase III efficacy study. The Company plans to report top-line immunogenicity and safety results from this study by the fourth quarter of this year. We continue to seek a collaborative partner for our seasonal influenza vaccine upon completion of additional Phase II clinical studies, which are expected to be completed by the end of 2009.

We have also developed vaccine candidates for both RSV and VZV, both of which are currently being evaluated in preclinical studies. To date, preliminary data have shown that an RSV vaccine candidate has shown positive results in two separate studies with mice. In December 2008, Novavax and the University of Massachusetts jointly announced favorable results from a preclinical study to evaluate the immunogenicity and efficacy of an RSV vaccine candidate in mice. The RSV VLP vaccine induced strong antibody responses against RSV. In February 2009, we announced favorable results from an RSV preclinical study performed in mice against the viral fusion (“F”) protein, which fuses with cells in the respiratory tract and causes illness. A VZV vaccine candidate has also induced antibody and T-cell responses. We plan on moving forward with further preclinical development of both vaccines in 2009.

Our vaccine products currently under development or in clinical trials will require significant additional research and development efforts, including extensive pre-clinical and clinical testing and regulatory approval, prior to commercial use. There can be no assurance that our research and development efforts will be successful or that any potential products will prove to be safe and effective in clinical trials. Even if developed, these vaccine products may not receive regulatory approval or be successfully introduced and marketed at prices that would permit us to operate profitably. The commercial launch of any vaccine product is subject to certain risks including but not limited to, manufacturing scale-up and market acceptance. No assurance can be given that we can generate sufficient product revenue to become profitable or generate positive cash flow from operations at all or on a sustained basis.

Subsequent Events

Cadila Pharmaceuticals Ltd.

On March 31, 2009, Company and Cadila Pharmaceuticals Ltd., a company incorporated under the laws of India (“Cadila”) entered into a Joint Venture Agreement (the ‘JVA”) pursuant to which the Company and Cadila formed CPL Biologicals Limited, a joint venture (the “JV”), of which 80% will be owned by Cadila and 20% is owned by the Company. The JV must obtain approval from India’s Foreign Investment Promotion Board (the “FIPB”) prior to issuing shares to Novavax. The JV will develop and commercialize our seasonal influenza virus-like-particle (VLP)-based vaccine candidate and Cadila’s therapeutic vaccine candidates against cancer as well as its adjuvants, biogeneric products and other diagnostic products for the territory of India. We will also contribute to the JV technology for the development of several other VLP vaccine candidates against diseases of public health concern in the territory, such as hepatitis E and chikungunya fever. Cadila will contribute approximately $8 million over three years to support the JV’s operations. The JV will be responsible for clinical testing and registration of products that will be marketed and sold in India.

The JV has the right to negotiate a definitive agreement for rights to certain future Novavax products (other than RSV) and certain future Cadila products in India prior to Novavax or Cadila licensing such rights to a third party. Novavax has the right to negotiate the licensing of vaccines developed by the joint venture using Novavax’s technology for commercialization in every country except for India and vaccines developed by the joint venture using Cadila’s technology for commercialization in certain other countries, including the United States.

In connection with the JVA, on March 31, 2009, we also entered into license agreement, an option to enter into a license agreement, a technical services agreement and a supply agreement with the JV.

Also on March 31, 2009, we entered into a binding, non-cancellable Stock Purchase Agreement (the “SPA”) with Satellite Overseas (Holdings) Limited (“SOHL”), a subsidiary of Cadila, pursuant to which SOHL has agreed to purchase 12.5 million shares of our common stock, par value $0.01 (the “Common Stock”) at the market price of $0.88 per share. We delivered the shares of Common Stock on April 1, 2009. We raised gross proceeds of $11 million in the offering. The net proceeds to us from the sale of the Common Stock, after deducting estimated offering expenses payable by us, is approximately $10.5 million.

The SPA provides that, as long as SOHL owns more than 5% of the Company’s then-outstanding Common Stock, SOHL may purchase a pro-rata portion of any Company common stock sale issuance. Under the SPA, certain issuances are exempt from SOHL’s pre-emptive right, including shares issued (1) as stock dividends, stock splits, or otherwise payable pro rata to all holders of Common Stock; (2) to our employees, officers, directors or consultants pursuant to an employee benefit program; (3) upon the conversion or exercise of any options, warrants or other rights to purchase Common Stock; and (4) as consideration for a merger, consolidation, purchase of assets, or in connection with a joint venture or strategic partnership. However, any issuances pursuant to (4) above, must be approved by a majority of the full board and, if the transaction exceeds 5% of our then issued and outstanding shares of Common Stock, the per share purchase price cannot be less than $0.88. Under the SPA, for so long as SOHL owns 5% of our common stock, SOHL may designate one member of our board of directors.

Finally, on March 31, 2009, Novavax and Cadila entered into a Master Services Agreement (the “Master Services Agreement”) pursuant to which we may request services from Cadila in the areas of biologics research, preclinical development, clinical development, process development, manufacturing scale up, and general manufacturing related services in India. If, at the third anniversary of the Master Services Agreement, the amount of services provided by Cadila is less than $7.5 million, we will pay Cadila a portion of the shortfall. We will have to pay Cadila the portion of the shortfall amount that is less than or equal to $2.0 million and 50% of the portion of the shortfall amount that exceeds $2.0 million. When calculating the shortfall, the amount of services provided by Cadila includes amounts that have been paid under all project plans, the amounts that will be paid under ongoing executed project plans and amounts for services that had been offered to Cadila, that Cadila was capable of performing, but exercised its right not to accept such project. The term of the Master Services Agreement is five years, but may be terminated by either party if there is a material breach that is not cured within 30 days of notice or, at any time after three years, provided that 90 days prior notice is given to the other party.

At the Market Issuance

On January 12, 2009, we entered into an At Market Issuance Sales Agreement (the “Sales Agreement”), with Wm Smith & Co. (“Wm Smith”), under which we may sell an aggregate of up to $25 million in gross proceeds of our common stock from time to time through Wm Smith, as the agent for the offer and sale of the common stock. The Board of Directors has authorized the sale of up to 12,500,000 shares of common stock under the Sales Agreement. Based on the trading price of our common stock, we may not be able to sell all 12,500,000 shares or we may not be able to raise the full $25 million in gross proceeds permitted under the Sales Agreement. Wm Smith may sell the common stock by any method permitted by law, including sales deemed to be an “at the market” offering as defined in Rule 415 of the Securities Act, including without limitation sales made directly on NASDAQ Global Market, on any other existing trading market for the common stock or to or through a market maker. Wm Smith may also sell the common stock in privately negotiated transactions, subject to our prior approval. We will pay Wm Smith a commission equal to 3% of the gross proceeds of the sales price of all common stock sold through it as sales agent under the Agreement. In the first quarter of 2009, we sold 70,500 shares and received net proceeds in the amount of $121,457, under the Sales Agreement. As of May 5, 2009, we sold approximately an additional 3.1 million shares for net proceeds of approximately $7.5 million.

Amendments to Convertible Notes

On April 29, 2009, we entered into amendment agreements (the “2009 Amendments”) with holders of the outstanding 4.75% senior convertible notes (the “Notes”) representing $17.0 million of the $22.0 million outstanding principal amount of the Notes to amend the terms of the Notes to allow for early payment under specific terms described below.

The 2009 Amendments (i) provide for payment of $17,000,000 aggregate principal amount of the Notes on April 29, 2009, (ii) provide for 70% of this principal amount plus accrued and unpaid interest to be paid in cash and (iii) provide for the remaining portion of this principal amount to be paid in that number of shares of Common Stock that equals 30% of this principal amount divided by $2.50. On April 29, 2009, we paid $12.1 million in principal and accrued interest and issued 2,040,000 shares in accordance with the terms of the 2009 Amendments.

After payment of this $17.0 million in principal amount, $5.0 million aggregate principal amount remains outstanding under the Notes and will mature on July 15, 2009. Under the terms of the Notes, Novavax, at its option, can pay up to 50% of the remaining $5.0 million outstanding Notes in Novavax common stock on the due date of July 15, 2009, subject to the satisfaction of certain conditions, including, among other things, a requirement that the shares issued upon conversion be registered or freely tradable without registration, that Novavax’s shares of common stock have not been suspended from trading on NASDAQ Global Market during the applicable measurement period and there is no threatened delisting or suspension, and that the Company is otherwise in compliance with its agreements with the Note holders.

Significant Transactions in 2009 and 2008

Facility Exit Costs

In July 2008, we decided to consolidate our research and development and manufacturing activities into our facility at Belward Campus Drive in Rockville, Maryland by closing our Taft Court facility in Rockville, Maryland. The Taft Court location was used to support the manufacturing requirements for early stage clinical trial materials for our VLP vaccine candidates. Our new GMP pilot manufacturing facility located at our Belward Campus Drive location will be used to support clinical trials and may also be used for future commercialization quantities of our VLP vaccines. The move commenced in September 2008 and was completed on October 17, 2008. Our accrued expenses on the consolidated balance sheet as of March 31, 2009 and December 31, 2008 include $237,000 and $296,000, respectively, related to the remaining lease payments.

Graceway Agreements

In February 2008, we entered into an asset purchase agreement with Graceway Pharmaceuticals, LLC (“Graceway”), pursuant to which Novavax sold Graceway its assets related to Estrasorb in the United States, Canada and Mexico. The assets sold include certain patents related to the MNP technology, trademarks, know-how, manufacturing equipment, customer and supplier relations, goodwill and other assets. Novavax retained the rights to commercialize Estrasorb outside of the United States, Canada and Mexico.

In February 2008, Novavax and Graceway also entered into a supply agreement, pursuant to which Novavax had agreed to manufacture additional units of Estrasorb. Final delivery was made in July 2008. Graceway paid a preset transfer price per unit of Estrasorb for the supply of this product. After we delivered the required quantity of Estrasorb, we were required to clean the manufacturing equipment and prepare the equipment for transport. Graceway removed the equipment from the manufacturing facility and we exited the facility in August 2008.

In February 2008, Novavax and Graceway also entered into a license agreement, pursuant to which Graceway granted us an exclusive, non-transferable (except for certain allowed assignments and sublicenses), royalty-free, limited license to the patents and know-how that Novavax sold to Graceway pursuant to the asset purchase agreement. The licensed grant allows us to make, use and sell licensed products and services in certain, limited fields.

The net cash proceeds from these transactions were in excess of $2.5 million. The license and supply agreements with Allergan, Inc., successor-in-interest to Esprit Pharma, Inc., were terminated in February 2008 and October 2007, respectively.

License Agreement with University of Massachusetts Medical School

Effective February 26, 2007, we entered into a worldwide agreement to exclusively license a VLP technology from the University of Massachusetts Medical School (“UMMS”). Under the agreement, we have the right to use this technology to develop VLP vaccines for the prevention of any viral diseases in humans. As of March 31, 2009 and December 31, 2008, we made payments to UMMS in an aggregate amount that is not material. In addition, we will make certain payments based on development milestones as well as future royalties on any sales of products that may be developed using the technology. We believe that all payments under the UMMS agreement will not be material to us in the foreseeable future. The UMMS agreement will remain effective as long as at least one claim of the licensed patent rights cover the manufacture, sale or use of any product unless terminated sooner at our option or by UMMS for an uncured breach by Novavax.

License Agreement with Wyeth Holdings Corporation

On July 5, 2007, we entered into a License Agreement with Wyeth Holdings Corporation, a subsidiary of Wyeth (“Wyeth”). The license is a non-exclusive, worldwide license to a family of patent applications covering VLP technology for use in human vaccines in certain fields of use. The agreement provides for an upfront payment, annual license fees, milestone payments and royalties on any product sales. If each milestone is achieved for any particular product candidate, we would be obligated to pay an aggregate of $14 million to Wyeth Holdings for each product candidate developed and commercialized under the agreement. Achievement of each milestone is subject to many risks, including those described in our Item IA of Part I of our annual report on Form 10-K for the year ended December 31, 2008. Annual license maintenance fees under the Wyeth Holdings agreement aggregate $0.3 million per year. The royalty to be paid by us under the agreement, if a product is approved by the FDA for commercialization, will be based on single digit percentage of net sales. Payments under the agreement to Wyeth as of March 31, 2009 aggregated $4.8 million and could aggregate up to an additional $0.3 million in 2009, depending on the achievement of clinical development milestones. The agreement will remain effective as long as at least one claim of the licensed patent rights cover the manufacture, sale or use of any product unless terminated sooner at our option or by Wyeth for an uncured breach by Novavax.

Sublease Agreement with PuriCore, Inc.

In April 2006, we entered into a sublease agreement with Sterilox Technologies, Inc. (now known as PuriCore, Inc.) to sublease 20,469 square feet of the Company’s Malvern, Pennsylvania corporate headquarters at a premium price per square foot. The sublease, with a commencement date of July 1, 2006, expires on September 30, 2009. This sublease resulted from our corporate move to Rockville, Maryland. In October 2006, we entered into a lease for an additional 51,000 square feet in Rockville, Maryland. Accordingly, in October 2006, we entered into an amendment to the Sublease Agreement with PuriCore, Inc. to sublease an additional 7,500 square feet of the Malvern corporate headquarters at a premium price per square foot. This amendment has a commencement date of October 25, 2006 and expires concurrent with the initial lease on September 30, 2009. In April 2009, we negotiated an amendment to our sublease with PuriCore to expand the term of the sublease until September 30, 2011, to expand the sublease premises to include all of the approximately 32,900 rentable square feet and to grant PuriCore the option to renew the sublease for an additional three-year term. We are currently awaiting the landlord’s approval of this amendment, which is required before it can become effective.

Notes with Former Directors

In March 2002, pursuant to the Novavax, Inc. 1995 Stock Option Plan, we approved the payment of the exercise price of options by two of directors through the delivery of full-recourse, interest-bearing promissory notes in the aggregate amount of $1,480,000. The notes were secured by an aggregate of 261,667 shares of our common stock.

In May 2006, one of these directors resigned from our board of directors. Following his resignation, we approved an extension of the former director’s $448,000 note to be payable on December 31, 2007, or earlier to the extent of the net proceeds from any sale of the pledged shares. We entered into negotiations with the former director to extend the loan in January 2008. On May 7, 2008 the Company and the former director entered into an Amended and Restated Promissory Note and an Amended and Restated Pledge Agreement (the “Amendment”).

The Amendment restates the entire amount outstanding as of December 31, 2007, including accrued interest, or $578,848, as the new outstanding principal amount. Furthermore, the Amendment extends the maturity date of the note to June 30, 2009, permits us to sell the pledged shares if the market price of the common stock as reported on NASDAQ Global Market exceeds certain targets, increases the interest rate to 8.0% and stipulates quarterly payments beginning June 30, 2008. We received the first payment of $50,000 in July 2008 for the first half of 2008 and a second payment of $5,000 in October 2008, with a balance for the next payment due by December 31, 2008 of $45,000. In January 2009, we received an additional payment of $10,000.

In March 2007, the other director resigned. Following his resignation, we approved an extension of the former director’s $1,031,668 note. The note continues to accrue interest at 5.07% per annum and is secured by shares of common stock owned by the former director and is payable on June 30, 2009, or earlier to the extent of the net proceeds from any sale of the pledged shares. In addition, we have the option to sell the pledged shares on behalf of the former director at any time that the market price of our common stock, as reported on NASDAQ Global Market, exceeds $7.00 per share.

We continue to actively work with these two individuals to collect the amounts outstanding and reserve our rights to pursue the remedies available to us. Due to heightened sensitivity in the current environment surrounding related-party transactions and the extensions of the maturity dates, these transactions could be viewed negatively in the market and our stock price could be negatively affected.

Critical Accounting Policies and Changes to Accounting Policies

Our discussion and analysis for our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.

The preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and equity and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates, particularly estimates relating to revenue recognition, allowance for doubtful accounts and rebates, accounting for stock based compensation, goodwill, valuation of net deferred tax assets, and valuation of marketable securities, have a material impact on our financial statements and are discussed in detail throughout our analysis of the results of operations discussed below.

We base our estimates on historical experience and various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets, liabilities and equity that are not readily apparent from other sources. Actual results and outcomes could differ from these estimates and assumptions.

For a more detailed explanation of the judgments made in these areas and a discussion of our accounting estimates and policies, refer to Critical Accounting Policies and Use of Estimates included in Item 7 and Summary of Significant Accounting Policies (Note 2) included in Item 15 of our Annual Report on Form 10-K for the year ended December 31, 2008. Since December 31, 2008, there have been no significant changes to our critical accounting estimates and policies.

Recent Accounting Standards

Under the new guidance, assets acquired and liabilities assumed in a business combination that arise from contingencies should be recognized at fair value on the acquisition date if fair value can be determined during the measurement period. If fair value cannot be determined, companies should typically account for the acquired contingencies using existing guidance. We are reviewing this pronouncement as it relates to our recent agreements with Cadila Pharmaceuticals Ltd. The adoption of these pronouncements is not expected to have a material effect on the Company’s financial position and results from operations.

In April 2009, the FASB issued FSP SFAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly which provides additional guidance for estimating fair value in accordance with FASB Statement No. 157, Fair Value Measurements , when the volume and level of activity for the asset or liability have significantly decreased. This FSP also includes guidance on identifying circumstances that indicate a transaction is not orderly. This pronouncement is effective for periods ending after June 15, 2009. We do not expect this pronouncement to have a material effect on our financial position and results of operations.

In April 2009, the FASB issued FSP SFAS 115-2 and SFAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments , to amend the other-than-temporary impairment guidance in debt securities to be based on intent to sell instead of ability to hold the security and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. This pronouncement is effective for periods ending after June 15, 2009. We do not expect this pronouncement to have a material effect on our financial position and results of operations.

Results of Operations

The following is a discussion of the historical consolidated financial condition and results of operations of Novavax, Inc. and its wholly owned subsidiary and should be read in conjunction with the consolidated financial statements and notes thereto set forth in this Quarterly Report on Form 10-Q. Additional information concerning factors that could cause actual results to differ materially from those in the Company’s forward-looking statements is contained from time to time in our SEC filings, including but not limited to our Annual Report on Form 10-K for the fiscal year ended December 31, 2008.

Three months ended March 31, 2009 (“Q1 2009”) compared to the three months ended March 31, 2008 (“Q1 2008”): (Amounts in the tables are presented in thousands, except percentage changes and share and per share information)

Revenues:


	Q1		Q1
	2009		2008		$ Change			% Change
	(unaudited)		(unaudited)

Revenues	$	21	$	458	$	(437	)		(95	)%

Revenues for the first quarter 2009 were $21,000 as compared to $458,000 in the comparable period in 2008. The decrease in revenue from the comparable period in 2008 was principally due to lower contract revenue. Contract research and development revenue is comprised of revenue from government and commercial contracts and for the three months ended March 31, 2008 is comprised of revenue from two National Institutes of Health (“NIH”) grants, one of which was completed in 2008. Contract research and development revenue for the three months ended March 31, 2009 is comprised of revenue from one NIH contract, which was completed in 2009.

Operating costs and expenses:


	Q1		Q1
	2009		2008		$ Change			% Change
	(unaudited)		(unaudited)
Research and development	$	4,266	$	4,434	$	(168	)		(4	)%
General and administrative		2,892		3,244		(352	)		(11	)%


	$	7,158	$	7,678	$	(520	)		(7	)%

Research and Development Expenses

Research and development costs decreased from $4.4 million in 2008 to $4.3 million in 2009, a decrease of $0.1 million or 4%. Our research and development costs are incurred in support of the development of VLP based vaccines. A portion of the decrease can be attributed to a $0.2 million decrease in employee costs and a $0.1 million decrease associated with the closing of our Taft Court facility. In October 2008, we consolidated our manufacturing operations into our facility at Belward Campus Drive in Rockville, Maryland and accrued the remaining lease payments related to our Taft Court facility.

These decreases were partially offset by a $0.1 million increase in outside testing costs associated with the continuing preclinical testing, human clinical trials, process development, manufacturing and quality-related programs and a $0.1 million increase in facility costs. The increase in facility costs relate to increased rent and depreciation charges.

General and Administrative Expenses

General and administrative costs were $2.9 million in 2009 compared to $3.2 million in 2008. The $0.3 million decrease in general and administrative costs can be attributed to a $0.1 million decrease in employee costs and a $0.1 million decrease in facility costs associated with general and administrative functions. General and administrative costs for the three months ended March 31, 2008 included $0.2 million related to the allowance established for two notes receivable from former directors. During 2008, we determined that the notes receivable should be classified as a reduction of equity. We have not recorded any reserved charges during the three months ended March 31, 2009. These decreases were partially offset by an increase of $0.1 million related to professional fees associated with the preparation of SEC filings during the three months ended March 31, 2009.

Other income (expense):


	Q1			Q1
	2009			2008			$ Change			% Change
	(unaudited)			(unaudited)
Interest income	$	104		$	543		$	(439	)		(81	)%
Interest expense		(437	)		(426	)		(11	)		(3	)%
Impairment loss on short-term investments		(879	)		—			(879	)		(100	)%


	$	(1,212	)	$	117		$	(1,329	)		(1,136	)%

Net interest income was $0.1 million for 2009 compared to interest income of $0.5 million for 2008. The $0.4 million decrease in net interest income in the first quarter of 2009 as compared to the quarter ended March 31, 2008, was principally due to a decrease in the average balance outstanding for cash and short-term investments. The average cash and short-term investment balances outstanding decreased as a result of our continuing investment in our research and development activities surrounding our vaccine candidates. Interest expense for the three months ended March 31, 2009 and 2008 primarily represents interest on the outstanding convertible debt of $22.0 million and the amortization of the debt discount of $102,000. The debt discount resulted from the amendment of our convertible notes in June 2007, which resulted in the recording of a debt discount, which is being amortized over the remaining period of the notes. Additionally, we recorded $0.9 as an impairment loss for the quarter ended March 31, 2009, related to an other than temporary impairment loss on our auction rate securities.

Discontinued Operations:

In October 2007, we entered into agreements to terminate our supply agreements with Allergan, successor-in-interest to Esprit. In connection with the termination, we decided to wind down operations at our manufacturing facility in Philadelphia, Pennsylvania. The results of operations for the manufacturing facility are being reported as discontinued operations. In August 2008, we completed our final obligation to Graceway and exited the facility.

The following table presents summarized financial information for our discontinued operations for the three months ended March 31, 2009 and 2008:


	Q1		Q1
	2009		2008		$ Change			% Change
	(unaudited)		(unaudited)

Revenues	$	—	$	86	$	(86	)		100	%

Costs of products sold		—		738		(738	)		100	%


Net loss	$	—	$	652	$	(652	)		100	%

We recorded a loss from discontinued operations of $0.7 million for the three months ended March 31, 2008. We recorded revenue from discontinued operations of $86,000 for 2008 from the sale of Estrasorb.

Costs of products sold, which includes fixed idle capacity costs, were $0.7 million for the three months ended March 31, 2008. Of the $0.7 million cost of products sold in 2008, $0.6 million represented idle plant capacity costs at our manufacturing facility. The remaining $0.1 million represented the cost of Estrasorb sales to Allergan. In accordance with the Supply Agreement with Allergan, which terminated in February 2008, we were required to sell Estrasorb at a price that is lower than our manufacturing costs.

Net loss:


	Q1			Q1
	2009			2008			$ Change			%Change
	(unaudited)			(unaudited)

Net loss	$	(8,349	)	$	(7,755	)	$	(594	)		(8	)%


Net loss per share	$	(0.12	)	$	(0.13	)	$	0.01			8	%


Weighted shares outstanding		68,692,455			61,280,155			6,952,264			11	%

Our net loss for the three months ended March 31, 2009 was $8.3 million, or 0.12 per share, as compared to $7.8 million, or $0.13 per share, for the three months ended March 31, 2008, an increase in the net loss of $0.6 million. The increase was principally due to the impairment loss on short-term investments recorded for the three months ended March 31, 2009, and a decrease in contract revenue, partially offset by a decrease in operating expenses.

Liquidity and Capital Resources

Our future capital requirements depend on numerous factors including but not limited to the maturing of the remaining Notes on July 15, 2009, the commitments and progress of our research and development programs, the progress of preclinical and clinical testing, the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights, and manufacturing cost. We plan to continue to have multiple vaccines and products in various stages of development and we believe our research and development as well as general and administrative expenses and capital requirements will continue to increase. We will need to engage in capital raising transactions in the near term. Future activities, particularly vaccine and product development, are subject to our ability to raise funds through public or private financings using equity and/or debt securities, or collaborative licensing and development arrangements with industry partners and government agencies.


	Three Months Ended
	March 31, 2009
	(unaudited)
Summary of Cash Flows:	(In thousands)
Net cash (used in) provided by:
Operating activities	$	(6,727	)
Investing activities		68
Financing activities		(650	)


Net decrease in cash and cash equivalents		(7,309	)
Cash and cash equivalents at beginning of period		26,938


Cash and cash equivalents at end of period	$	19,629

As of March 31, 2009, we held $19.6 million in cash and investments as compared to $26.9 million at December 31, 2008. The $7.3 million decrease in cash and investments during 2008 was primarily due to the operating loss of $8.3 million and principal payments on debt of $0.9 million. As of March 31, 2009, our working capital deficit was $0.2 million compared to $7.3 million surplus as of December 31, 2008. This $7.5 million decrease primarily resulted from our net loss. Additionally, our working capital was used for $0.8 million in principal payments on our outstanding debt obligations for the three months ended March 31, 2009.

We will seek to raise additional capital through public or private equity and/or debt financing. We intend to use the proceeds from these financing transactions to pay all or a portion of the principal and interest due on the Notes and for general corporate purposes, including but not limited to our internal research and development programs, such as preclinical and clinical testing and studies for our vaccine and other product candidates, the development of new technologies, capital improvements and general working capital. We will also seek to fund our operations through licensing and development arrangements. There can be no assurance that we will be able to obtain additional capital or, if such capital is available, that the terms of any financing will be satisfactory to us. Any capital raised by an equity offering will likely be substantially dilutive to the stockholders and any licensing or development arrangement may require us to give up rights to a product or technology at less than its full potential value.

As of May 5, 2009, we have sold approximately 3.1 million shares of common stock and received net proceeds of approximately $7.5 million pursuant to the sales agreement with Wm Smith. On March 31, 2009, we entered into a binding, non-cancellable stock purchase agreement to sell 12.5 million shares to a wholly-owned subsidiary of Cadila for a market price of $0.88 per share. We closed this transaction on April 1, 2009 and received net proceeds in the amount of $10.5 million.

As of March 31, 2009, we had $22.0 million of senior convertible notes outstanding (the “Notes”). The Notes carry a 4.75% coupon; are convertible into shares of Novavax common stock at $4.00 per share; and mature on July 15, 2009. We may require that the Notes be converted into our common stock if the weighted average price of the our common stock is greater than $7.00 in any 15 out of 30 consecutive trading days after July 19, 2007. On April 29, 2009, we entered into amendment agreements (the “ 2009 Amendments”) with holders of the outstanding Notes representing $17.0 million of the $22.0 million outstanding principal amount of the Notes to amend the terms of the Notes to allow for early payment under specific terms described below.

Based on the amount of funds on hand, the proceeds from the Cadila transaction and the sale of stock under the Wm Smith agreement, our intention to pay 50% of the remaining $5.0 million outstanding Notes in Novavax common stock, and our planned business operations, we believe we will have adequate capital resources to operate at planned levels for at least the next twelve months. We are planning to raise additional capital in 2009 in order to continue our current level of operations and to pursue the business plan beyond 2009. We have not, however, secured any additional commitments for new financing at this time nor can we provide any assurance that new financing will be available on commercially acceptable terms, if at all.

Any equity financing would cause significant dilution to our shareholders at current market prices. If we are not able to secure additional capital, we will continue to assess our capital resources and we may be required to downsize our operations, reduce general and administrative costs or to delay or reduce the scope of, or eliminate one or more of our product research and development programs, thereby causing delays in our efforts to introduce our future products to market. Should we be unable to accomplish these activities, we may not be able to continue our business.

Contractual Obligations and Commitments

We utilize different financing instruments, such as debt and operating leases, to finance various equipment and facility needs. The following table summarizes our current financing obligations and commitments (in thousands) as of March 31, 2009:


				Less than			1 - 3			4 - 5		More than
Commitments and Obligations	Total			1 Year			Years			Years		5 Years
	(unaudited)
Convertible notes	$	22,000		$	22,000	*	$	—		$	—	$	—
Operating leases		16,586			2,253			6,296			4,288		3,749
Notes payable		853			385			468			—		—

Total principal payments		39,439			24,638			6,764			4,288		3,749
Less: Subleases		(845	)		(328	)		(517	)		—		—

Total commitments and obligations		38,594			24,310			6,247			4,288		3,749


*		This is the gross obligation for the convertible notes at March 31, 2009.

On March 31, 2009, we entered into a Master Service Agreement with Cadila in which we may request services from Cadila in areas of biologics research, preclinical development, clinical development, process development, manufacturing scale up and general related services in India. This commitment is for $7.5 million in services over the next three years. If, at the third anniversary of the Master Service Agreement, the amount of services provided by Cadila is less than $7.5 million, we will pay Cadilia a portion of the shortfall. We will have to pay Cadilia the portion of the shortfall amount that is less than or equal to the shortfall amount that exceeds $2.0 million and 50% of the portion of the shortfall that exceeds $2.0 million.

In addition to the amounts reflected in the table above in the future, we may owe royalties and other contingent payments to our collaborators or license holders based on the achievement product sales, milestones and other specific objectives.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The primary objective of our investment activities is to preserve our capital until it is required to fund operations while at the same time maximizing the income we receive from our investments without significantly increasing risk. As of March 31, 2009, we had cash and cash equivalents and short-term investments of $25.6 million as follows:


Cash and cash equivalents	$	19.6 million

Short-term investments classified as available for sale	$	6.0 million

Our exposure to market risk is confined to our investment portfolio. As of March 31, 2009, our short-term investments are classified as available for sale. We do not believe that a change in the market rates of interest would have any significant impact on the realizable value of our investment portfolio. Changes in interest rates may affect the investment income we earn on our investments and, therefore, could impact our cash flows and results of operations.

Short-term investments at March 31, 2009 consist of investments in five auction rate securities with a par value of $8.1 million and a fair value of $6.0 million. We recorded an additional other than temporary impairment charge to operating related to these securities during the first quarter of 2009 of $0.9 million because of the current turmoil in the credit markets and management’s belief these securities cannot presently be sold at par value but are saleable at a discount from their par value.

We have classified these securities as short-term investments and have accounted for our investments in these securities as available for sale securities under the guidance of Statement of Financial Accounting Standards, Accounting for Certain Investments in Debt and Equity Securities (“SFAS No. 115”). Although the auction rate securities have variable interest rates which typically reset every 16 to 32 days through a competitive bidding process known as a “Dutch auction,” they have long-term contractual maturities. These investments are classified within current assets because we may need to liquidate these securities within the next year.

The available for sale securities are carried at fair value and unrealized gains and losses on these securities, if determined to be temporary, are included in accumulated other comprehensive income (loss) in stockholders’ equity. We assess the recoverability of our available-for-sale securities and, if impairment is indicated, we measure the amount of such impairment by comparing the fair value to the carrying value. Other than temporary impairments are included in the consolidated statements of operations. Our cumulative other than temporary impairment charges approximate $2.1 million, which include an impairment charge of 1.2 million recorded in 2008.

We had invested in auction rate securities for short periods of time as part of our cash management program. Recent uncertainties in the credit markets have prevented us from liquidating certain holdings of auction rate securities subsequent to December 31, 2008 as the amount of securities submitted for sale during the auction has exceeded the amount of the purchase orders. Although an event of an auction failure does not necessarily mean that a security is impaired, we considered various factors to assess the fair value and the classification of the securities as short-term assets. Fair value was determined through an independent valuation using two valuation methods -— a discounted cash flow method and a market comparables method. Certain factors used in these methods include, but are not necessary limited to, comparable securities traded on secondary markets, timing of the failed auction, specific security auction history, quality of underlying collateral, rating of the security and the bond insurer, our ability and intent to retain the securities for a period of time to allow for anticipated recovery in the market value, and other factors.

We are headquartered in the United States where we conduct the vast majority of our business activities. Accordingly, we have not had any material exposure to foreign currency rate fluctuations.

At March 31, 2009, we had a total debt of $22.7 million, most of which bears interest at fixed interest rates. We do not believe that it is exposed to any material interest rate risk as a result of our borrowing activities.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s chief executive officer and interim principal accounting officer, who performs functions similar to a principal financial officer, have reviewed and evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this quarterly report. Based on that review and evaluation, which included the participation of management and certain other employees of the Company, the chief executive officer and interim principal accounting officer have concluded that the Company’s current disclosure controls and procedures, as designed and implemented, are effective.

Changes in Internal Control over Financial Reporting

The Company’s management, including our principal executive officer and interim principal accounting officer, has evaluated any changes in the Company’s internal control over financial reporting that occurred during the three months ended March 31, 2009, and has concluded that there was no change that occurred during the quarter ended March 31, 2009 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1 — Legal Proceedings

The Company does not have any pending legal matters at this time.

Item 1A. — Risk Factors

There are no material changes to the Company’s risk factors as described in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008, as filed with the SEC, other than as mentioned below.

Item 6 — Exhibits

Confidential treatment has been requested for portions of exhibits marked with a double asterisk (**).


10.1		Stock Purchase Agreement between Novavax, Inc. and Satellite Overseas (Holdings) Limited, dated March 31, 2009

10.2		Registration Rights Agreement between Novavax, Inc. and Satellite Overseas (Holdings) Limited, dated March 31, 2009

10.3**		Joint Venture Agreement between Novavax Inc. and Cadila Pharmaceuticals Limited, dated March 31, 2009

10.4**		Master Services Agreement between Novavax, Inc. and Cadila Pharmaceuticals Limited, dated March 31, 2009

10.5**		Supply Agreement between Novavax, Inc. and CPL Biologicals Limited, dated March 31, 2009

10.6**		Technical Services Agreement between Novavax, Inc. and CPL Biologicals Limited, dated March 31, 2009

10.7**		Seasonal / Other License Agreement between Novavax, Inc. and CPL Biologicals Limited, dated March 31, 2009

10.8**		Option to Obtain License between Novavax, Inc. and CPL Biologicals Limited, dated March 31, 2009

10.9		At the Market Issuance Sales Agreement, dated January 12, 2009, by & between Novavax, Inc. and Wm. Smith & Co. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed January 13, 2009)

10.10		Consulting Agreement of Len Stigliano, effective January 28, 2009 (Incorporated by reference to the Company’s Current Report on Form 8-K, filed February 20, 2009)

31.1		Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Interim Principal Accounting Officer (performing functions similar to a principal financial officer) pursuant to Exchange Act Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.


32.1		Certification of Chief Executive Officer, pursuant to Exchange Act Rule 13a-14(a) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *

32.2		Certification of Interim Principal Accounting Officer (performing functions similar to a principal financial officer), pursuant to Exchange Act Rule 13a-14(a) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*


*		This exhibit is not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and is not and should not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	NOVAVAX, INC. (Registrant)
Date: May 11, 2009	By:	/s/ Rahul Singhvi
		Rahul Singhvi
		President and Chief Executive Officer (Principal Executive Officer)


Date May 11, 2009	By:	/s/ Evdoxia E. Kopsidas
		Evdoxia E. Kopsidas
		Director of Finance and Interim Principal Accounting Officer (performing functions similar to a principal financial officer)

Exhibit 10.1

STOCK PURCHASE AGREEMENT

This Stock Purchase Agreement (this “ Agreement ”) is dated March 31, 2009, by and between Satellite Overseas (Holdings) Limited (the “ Investor ”) and Novavax, Inc., a Delaware corporation (the “ Company ”), whereby the parties agree as set forth herein. Certain terms are defined in Section 10 of this Agreement.

WHEREAS , the Company and the Investor have entered into an agreement (the “JV Agreement”) to form a joint venture to develop and commercialize vaccines, including vaccines that leverage the Company’s VLP technology and vaccines based on Investor’s technology, for sale within the Indian market and to establish local manufacturing capability in India based on the Company’s novel disposable vaccine production system under licensing rights to be obtained from the Company;

WHEREAS, the Company and the Investor have entered into a Master Services Agreement under which Investor and/or its affiliates will perform certain services for the Company; and

WHEREAS , in connection with the anticipated joint venture, Investor has agreed to make an equity investment in the Company, in accordance with the terms and conditions set forth in this Agreement.

NOW, THEREFORE , in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the Parties agree as follows.

1. Subscription .

(a) Investor agrees to buy and the Company agrees to sell and issue to Investor 12,500,000 shares (the “ Shares ”) of the Company’s common stock, $0.01 par value per share (the “ Common Stock ”), for an aggregate purchase price of $11,000,000, at a per share purchase price of $0.88 (the “ Purchase Price ”).

(b) The Shares have been registered on a Registration Statement on Form S-3, Registration No. 333-138893 (the “ Registration Statement ”), which registration statement has been declared effective by the Securities and Exchange Commission and is effective on the date hereof (together with any registration statement filed by the Company pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the “ Securities Act ”)). A final prospectus supplement will be delivered to the Investor as required by law.

(c) On the closing date, which, in accordance with Rule 15c6-1 promulgated under the Securities Exchange Act of 1934, as amended, is expected to occur on or about March 31, 2009 (the “ Closing Date ”), upon satisfaction or waiver of all the conditions to closing set forth in this Agreement, (i) the Purchase Price for the Shares purchased by the Investor will be delivered by or on behalf of the Investor to the Company against delivery of the Shares, and (ii) the Company shall cause its transfer agent to release to the Investor the number of Shares being purchased by the Investor (such release shall be made through the facilities of The Depository Trust Company’s DWAC system). The provisions set forth in Exhibit B hereto shall be incorporated herein by reference as if set forth fully herein.

2. Representations, Warranties and Agreements of the Company . The Company represents and warrants to and agrees with Investor as of the date hereof and as of the Closing Date and any other date specified below, that:

(a) The Company has been duly incorporated and has a valid existence and the authorization to transact business as a corporation under the laws of the State of Delaware, with corporate power and authority to own its properties and conduct its business as described in the Prospectus, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except for such jurisdictions wherein the failure to be so qualified and in good standing would not individually or in the aggregate have a Material Adverse Effect.

(b) Each subsidiary of the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation, with corporate power and authority to own its properties and conduct its business as described in the Prospectus, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except for such jurisdictions wherein the failure to be so qualified and in good standing would not individually or in the aggregate have a Material Adverse Effect. All subsidiaries and their respective jurisdictions of incorporation are identified on Schedule I hereto. Except as disclosed in Schedule I , all of the outstanding capital stock or other voting securities of each subsidiary is owned by the Company, directly or indirectly, free and clear of any lien and free of any other limitation or restriction (including any restriction on the right to vote, sell or otherwise dispose of such capital stock or other voting securities). Other than the Company’s 4.75% senior convertible notes (the “ Convertible Notes ”) and warrants to purchase 3,343,325 of Company Common Stock (the “ 2008 Warrants ”), there are no outstanding (i) securities of the Company or any subsidiary of the Company which are convertible into or exchangeable for shares of capital stock or voting securities of any subsidiary of the Company or (ii) options or other rights to acquire from the Company or any subsidiary of the Company, or other obligation of the Company or any subsidiary of the Company to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock or voting securities of any subsidiary of the Company (collectively, the “ Subsidiary Securities ”). There are no outstanding obligations of the Company or any subsidiary of the Company to repurchase, redeem or otherwise acquire any outstanding Subsidiary Securities.

(c) The execution, delivery and performance of this Agreement by the Company and the consummation of the transactions contemplated hereby are within the corporate powers of the Company and have been duly authorized by all necessary corporate action on the part of the Company, and the Agreement, when duly executed and delivered by the Company, will constitute a valid and legally binding instrument of the Company enforceable in accordance with its terms, except as enforcement hereof may be limited by the effect of any applicable bankruptcy, insolvency, reorganization or similar laws or court decisions affecting enforcement of creditors’ rights generally and except as enforcement hereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).

(d) The Shares have been duly authorized by the Company, and when issued and delivered by the Company against payment therefor as contemplated by this Agreement, the Shares will (i) be validly issued, fully paid and nonassessable, (ii) not be subject

Stock Purchase Agreement

to any statutory or contractual preemptive rights or other rights to subscribe for or purchase or acquire any shares of Common Stock, which have not been waived or complied with, and (iii) conform to the description of the Common Stock contained in the Prospectus. The capital stock of the Company, including the Common Stock, conforms as to the legal matters to the description thereof, if any, contained in the Registration Statement and the Prospectus, and as of the date thereof, the Company had authorized capital stock as set forth therein. The Shares are in due and proper form and the holders of Shares will not be subject to personal liability by reason of being such holders.

(e) The execution and delivery of the Agreement does not, and the compliance by the Company with the terms hereof will not, (i) violate the Certificate of Incorporation (as amended to date) of the Company or the By-Laws (as amended to date) of the Company, (ii) result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or its subsidiary is bound, or (iii) result in a violation of, or failure to be in compliance with, any applicable statute or any order, judgment, decree, rule or regulation of any court or governmental, regulatory or self-regulatory agency or body having jurisdiction over the Company or its subsidiary, except in the case of (ii) and (iii) where such breach, violation, default or the failure to be in compliance would not have a Material Adverse Effect; and no consent, approval, authorization, order, registration, filing or qualification of or with any such court or governmental, regulatory or self-regulatory agency or body is required for the valid authorization, execution, delivery and performance by the Company of the Agreement or the issuance of the Shares, except for such consents, approvals, authorizations, registrations, filings or qualifications as may be required under the Securities Act or state securities or “blue sky” laws and have been or will be obtained and which have been or will be made in connection with the listing of the Shares on the Nasdaq Global Market.

(f) The Company meets the requirements for the use of Form S-3 under the Securities Act for the primary issuance of securities. The Registration Statement has been declared effective by the Commission and at the time it became effective, and as of the date hereof, the Registration Statement complied and complies with Rule 415 under the Securities Act. No stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been initiated or, to the Company’s knowledge, threatened by the Commission. On the effective date of the Registration Statement, the Registration Statement complied, on the date of the Prospectus, the Prospectus will comply, and at the date of the Closing, the Registration Statement and the Prospectus will comply, in all material respects with the applicable provisions of the Securities Act and the applicable rules and regulations of the Commission thereunder; on the effective date of the Registration Statement, the Registration Statement and the additional information disclosed by the Company to the Investor in a document titled “Investor Information” (the “Investor Information”) did not, on the date of the Prospectus, the Prospectus did not, and at the date of the Closing, the Registration Statement and the Prospectus and the Investor Information, will not, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made (with respect to the Prospectus), not misleading; and when filed with the Commission, the documents incorporated by reference in the Registration Statement and the Prospectus, complied or will comply in all material respects with the applicable provisions of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and the applicable rules and regulations of the Commission thereunder. There is no material document of a character required to be described in the Registration Statement or the Prospectus or to be filed as an exhibit to the Registration Statement

Stock Purchase Agreement

that is not described or filed as required. The Company’s form 10-K for year ended 2008 will not contain any material information that is not included in the Investor Information.

(g) The consolidated financial statements of the Company included or incorporated by reference in the Registration Statement, the Prospectus and the Investor Information comply as to form with the applicable accounting requirements of the Securities Act and have been prepared in conformity with generally accepted accounting principles (except, with respect to the unaudited consolidated financial statements and the accompanying footnotes which are subject to customary audit adjustments) applied on a consistent basis, are consistent in all material respects with the books and records of the Company, and accurately present in all material respects the consolidated financial position, results of operations and cash flow of the Company and its subsidiary as of and for the periods covered thereby. There are no other financial statements (historical or pro forma) that are required to be included in the Registration Statement and the Prospectus.

(h) There are no material liabilities of the Company or any subsidiary of the Company of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, and there is no existing condition, situation or set of circumstances which could reasonably be expected to result in such a liability, other than liabilities disclosed in the consolidated financial statements and financial schedules of the Company included or incorporated by reference in the Registration Statement and the Prospectus, and other undisclosed liabilities which, individually or in the aggregate, are not material to the Company and its subsidiary, taken as a whole.

(i) Neither the Company nor its subsidiary has sustained, since the respective dates of the latest audited financial statements included or incorporated by reference in the Registration Statement and Prospectus, any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as disclosed in or contemplated by the Registration Statement and Prospectus; and, since the respective dates as of which information is given in the Registration Statement and Prospectus, there has not been any material change in the capital stock or long-term debt of the Company or its subsidiary, the Company and its subsidiary have not incurred any material liabilities or obligations, direct or contingent, nor entered into any material transactions, except for entering into purchase orders in the ordinary course of business, and there has not been any material adverse change in or affecting the general affairs, assets, business, management, financial position or condition, stockholders’ equity or results of operations of the Company and its subsidiary considered as a whole, otherwise than as disclosed in the Registration Statement and Prospectus.

(j) Other than as disclosed in the Prospectus, there are no legal, governmental or regulatory proceedings pending to which the Company or its subsidiary is a party or of which any material property of the Company or its subsidiary is the subject which, taking into account the likelihood of the outcome, the damages or other relief sought and other relevant factors, would individually or in the aggregate reasonably be expected to have a Material Adverse Effect or adversely affect the ability of the Company to issue and sell the Shares; to the best of the Company’s knowledge, no such proceedings are threatened or contemplated by governmental or regulatory authorities or threatened by others.

(k) The Company and its subsidiary have good and marketable title to all the real property and owns all other properties and assets, reflected as owned in the financial statements included or incorporated by reference in the Registration Statement, the Prospectus

Stock Purchase Agreement

and the Investor Information, subject to no lien, mortgage, pledge, charge or encumbrance of any kind except those, if any, reflected in such financial statements or which are not material to the Company and its subsidiary taken as a whole. The Company and its subsidiary hold their respective leased real and personal properties under valid and binding leases, except where the failure to do so would not reasonably be expected to individually or in the aggregate have a Material Adverse Effect.

(l) The Company has filed all necessary federal and state income and franchise tax returns and has paid all taxes shown as due thereon or has filed all necessary extensions, and there is no tax deficiency that has been, or to the knowledge of the Company might be, asserted against the Company or any of its properties or assets that would in the aggregate or individually reasonably be expected to have a Material Adverse Affect.

(m) There are no authorized options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of the Company or its subsidiary other than the 2008 Warrants and those accurately described in the Registration Statement and the Prospectus. There are no holders or beneficial owners of securities of the Company having rights to registration thereof whose securities have not been previously registered or who have not waived such rights with respect to the registration of the Company’s securities on the Registration Statement, except where the failure to obtain such waiver would not individually or in the aggregate reasonably be expected to have a Material Adverse Effect.

(n) Other than as disclosed in the Prospectus, the Company together with its subsidiary owns and possesses all right, title and interest in and to, or, to the Company’s knowledge, has duly licensed from third parties, all patents, patent rights, trade secrets, inventions, know-how, trademarks, trade names, copyrights, service marks and other proprietary rights (“ Intellectual Property ”) material to the business of the Company and its subsidiary taken as a whole as currently conducted and as described in the Prospectus. To the Company’s knowledge and except as would not individually or in the aggregate have a Material Adverse Effect, there is no infringement or other violation by third parties of any of the Intellectual Property of the Company. Neither the Company nor its subsidiary has received any notice of infringement or misappropriation from any third party that has not been resolved or disposed of. Further, there is no pending or, to the Company’s knowledge and except as would not individually or in the aggregate have a Material Adverse Effect, threatened action, suit, proceeding or claim by governmental authorities or others that the Company is infringing a patent, and there is no pending or, to the Company’s knowledge and except as would not individually or in the aggregate have a Material Adverse Effect, threatened legal or administrative proceeding relating to patents and patent applications of the Company, other than proceedings initiated by the Company before the United States Patent and Trademark Office and the patent offices of certain foreign jurisdictions which are in the ordinary course of patent prosecution. To the Company’s knowledge, the patent applications of the Company presently on file disclose patentable subject matter, and the Company is not aware of any inventorship challenges, any interference which has been declared or provoked, or any other material fact that (i) would preclude the issuance of patents with respect to such applications, or (ii) would lead outside patent counsel for the Company to reasonably conclude that such patents, when issued, would not be valid and enforceable in accordance with applicable regulations.

(o) The Company conducts its business in compliance in all respects with applicable laws, rules and regulations of governmental and regulatory bodies to which it is subject, except where the failure to be in compliance would not have a Material Adverse Effect.

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(p) All offers and sales of the Company’s capital stock prior to the date hereof were at all relevant times registered pursuant to the Securities Act or exempt from the registration requirements of the Securities Act and were issued in compliance in all material respects with applicable state securities or blue sky laws.

(q) The Company has filed with the Nasdaq Global Market a Notification of Listing of Additional Shares with respect to the Shares required by the rules of the Nasdaq Global Market and has not received a notice from the Nasdaq Global Market that such notification is insufficient. The offer and sale of the Shares does not require stockholder approval under Rule 4350 of the Nasdaq Stock Market Rules.

(r) Neither the Company nor its subsidiary nor, to the best of the Company’s knowledge, any employee or agent of the Company or its subsidiary, has (i) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns from corporate funds, (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or (iv) made any other unlawful payment.

(s) There is no broker, finder or other party that is entitled to receive from the Company any brokerage or finder’s fee or other fee or commission as a result of any transactions contemplated by this Agreement.

(t) The Company maintains a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of consolidated financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as described in the Registration Statement and the Prospectus, since the most recent audit of the effectiveness of the Company’s internal control over financial reporting, there has been (i) no material weakness in the Company’s internal control over financial reporting (whether or not remediated) and (ii) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

(u) The Company has established, maintains and evaluates “disclosure controls and procedures” (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act), which (i) are designed to ensure that material information relating to the Company is made known to the Company’s principal executive officer and its principal financial officer by others within those entities, particularly during the periods in which the periodic reports required under the Exchange Act are being prepared, (ii) have been evaluated for effectiveness as of the end of the last fiscal period covered by the Registration Statement; and (iii) such disclosure controls and procedures are effective to perform the functions for which they were established. There are no significant deficiencies and material weaknesses in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize, and report financial data to management and the board of directors of the Company. The Company is not aware of any fraud, whether or not material, that involves management or other employees who have a role in the Company’s internal controls; and since the date of the most recent evaluation of such disclosure controls and procedures, there have been

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no significant changes in internal controls or in other factors that could significantly affect internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses.

(v) The Company and, to its knowledge, all of the Company’s directors or officers, in their capacities as such, is in compliance in all material respects with all applicable effective provisions of the Sarbanes-Oxley Act and any related rules and regulations promulgated by the Commission.

(w) The Company is not, nor after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Prospectus, will be, (i) required to register as an “investment company” as defined in the Investment Company Act of 1940, as amended (the “ Investment Company Act ”), and the rules and regulations of the Commission thereunder or (ii) a “business development company” (as defined in Section 2(a)(48) of the Investment Company Act).

(x) The Company maintains insurance in such amounts and covering such risks as it reasonably considers to be adequate for the conduct of its business and the value of its properties and as is customary for companies engaged in similar businesses in similar industries. All such insurance is fully in force on the date hereof and will be fully in force as of the Closing Date. The Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

(y) The Company has not sold or issued any securities that would be integrated with the offering of the Securities contemplated by this Agreement pursuant to the Securities Act, the published rules and regulations thereunder, or the interpretations thereof by the Commission.

(z) The section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates for Discontinued Operations” in the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q and in the Investor Information accurately and fully describes (A) the accounting policies that the Company believes are the most important in the portrayal of the Company’s financial condition and results of operations and that require management’s most difficult, subjective or complex judgments (“ Critical Accounting Policies ”); and (B) the judgments and uncertainties affecting the application of Critical Accounting Policies.

(aa) Neither the Company nor, to the Company’s knowledge, any of its officers, directors, affiliates or controlling persons has taken or will take, directly or indirectly, any action designed to cause or result in, or which has constituted or which might reasonably be expected to constitute the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares.

(bb) No relationship, direct or indirect, exists between or among the Company on the one hand and the directors, officers, stockholders, customers or suppliers of the Company on the other hand which is required to be described in the Registration Statement and the Prospectus which has not been so described. There are no outstanding loans, advances (except

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normal advances for business expenses in the ordinary course of business) or guarantees or indebtedness by the Company to, or for the benefit of, any of the current officers or directors of the Company.

(cc) The Company has filed in a timely manner all reports required to be filed pursuant to Sections 13(a), 13(e), 14 and 15(d) of the Exchange Act during the preceding 12 months (except to the extent that Section 15(d) requires reports to be filed pursuant to Sections 13(d) and 13(g) of the Exchange Act, which shall be governed by the next clause of this sentence); and the Company has filed in a timely manner all reports required to be filed pursuant to Sections 13(d) and 13(g) of the Exchange Act during the preceding 12 months, except where the failure to timely file could not reasonably be expected individually or in the aggregate to have a Material Adverse Effect.

(dd) The Company and its subsidiary (a) are in compliance with any and all applicable foreign, federal, state and local laws, orders, rules, regulations, directives, decrees and judgments relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“ Environmental Laws ”), (b) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their business and the same are effective and in use on the date of this Agreement and (c) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, individually or in the aggregate, result in a Material Adverse Effect. There are no costs or liabilities associated with Environmental Laws (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties) which would, individually or in the aggregate, result in a Material Adverse Effect.

Neither the Company nor its subsidiary is engaged in any unfair labor practice; except for matters that would not, individually or in the aggregate, result in a Material Adverse Effect and (i) there is (A) no unfair labor practice complaint pending or, to the Company’s knowledge after due inquiry, threatened against the Company or its subsidiary before the National Labor Relations Board, and no grievance or arbitration proceeding arising out of or under collective bargaining agreements is pending or threatened, (B) no strike, labor dispute, slowdown or stoppage pending or, to the Company’s knowledge after due inquiry, threatened against the Company or its subsidiary and (C) no union representation dispute currently existing concerning the employees of the Company or its subsidiary, and (ii) to the Company’s knowledge (A) no union organizing activities are currently taking place concerning the employees of the Company or its subsidiary and (B) there has been no violation of any federal, state, local or foreign law relating to discrimination in the hiring, promotion or pay of employees or any applicable wage or hour laws concerning the employees of the Company or its subsidiary.

(ff) The Company and its subsidiary are in compliance in all material respects with all applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations thereunder (“ ERISA ”); no “reportable event” (as defined in ERISA) has occurred with respect to any “pension plan” (as defined in ERISA) for which the Company or its subsidiary would have any liability; neither the Company nor its subsidiary has incurred and does not expect to incur liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “pension plan” or (ii) Sections 412 or 4971 of the

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Internal Revenue Code of 1986, as amended, including the regulations thereunder (the “ Code ”); and each “pension plan” for which the Company would have any liability that is intended to be qualified under Section 401(a) of the Code is the subject of a favorable opinion or determination letter issued by the Internal Revenue Service and nothing has occurred, whether by action or by failure to act, which is reasonably expected to result in the revocation of such determination letter.

(gg) Any statistical, industry-related and market-related data included or incorporated by reference in the Registration Statement, the Prospectus and the Investor Information, are based on or derived from sources that the Company reasonably and in good faith believes to be reliable and accurate, and such data agree with the sources from which they are derived.

(hh) The clinical, pre-clinical and other studies and tests conducted by or on behalf of or sponsored by the Company or its subsidiary or in which the Company or its subsidiary or products or product candidates have participated that are described in the Registration Statement and the Prospectus were and, if still pending, are being conducted in accordance in all material respects with all statutes, laws, rules and regulations administered by the Food and Drug Association (“ FDA ”) and with standard medical and scientific research procedures. The descriptions in the Registration Statement, the Prospectus and the Investor Information of the results of such studies and tests are accurate and complete in all material respects and fairly present the published data derived from such studies and tests. Neither the Company nor its subsidiary has received any notices or other correspondence from the FDA with respect to any ongoing clinical or pre-clinical studies or tests requiring the termination, suspension or material modification of such studies or tests, which such termination, suspension or material modification would reasonably be expected to result in a Material Adverse Effect. The Company and its subsidiary is in compliance with all applicable laws, regulations, orders and decrees governing its business as prescribed by the FDA except where noncompliance would not, singly or in the aggregate, result in a Material Adverse Effect.

(ii) Other than as set forth on Schedule II attached hereto, as of the date of this Agreement, the only outstanding indebtedness of the Company consists of (i) the Convertible Notes, which, unless converted into Common Stock or amended, will be paid on or before July 19, 2009 with funds then held by the Company, and (ii) ordinary course trade payables.

(jj) The board of directors of the Company has taken all actions necessary to be taken to pre-approve the transactions contemplated by this Agreement such that (i) the restrictions contained in Section 203 of the Delaware General Corporation Law (“DGCL”) applicable to a “business combination” (as defined therein), and (ii) the applicable anti-takeover provisions contained in the Company’s Shareholder Rights Plan adopted on August 7, 2002 (the “Shareholder Rights Plan”) will not apply to the execution, delivery or performance of this Agreement or the consummation of the transactions contemplated by this Agreement.

3. Investor Representations, Warranties and Acknowledgments .

(a) The Investor represents and warrants that: (i) it has full right, power and authority to enter into this Agreement and to perform all of its obligations hereunder; (ii) this Agreement has been duly authorized and executed by the Investor and, when delivered in accordance with the terms hereof, will constitute a valid and binding agreement of the Investor enforceable against the Investor in accordance with its terms, except as such enforceability may

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be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights and remedies of creditors generally or subject to general principles of equity; (iii) the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby do not result in a breach of (A) the Investor’s certificate of incorporation or by-laws (or other governing documents), or (B) any material agreement or any law or regulation to which the Investor is a party or by which any of its property or assets is bound; (iv) it has had full access to the base prospectus included in the Registration Statement, the Prospectus and the Company’s periodic reports and other information incorporated by reference therein, and was able to read, review, download and print such materials; (v) in making its investment decision in this offering, the Investor and its advisors, if any, have relied solely on the Company’s public filings with the Securities and Exchange Commission and the Investor Information; (vi) it is knowledgeable, sophisticated and experienced in making, and is qualified to make, decisions with respect to investments in securities representing an investment decision like that involved in the purchase of the Shares; (vii) except as set forth below, the Investor has had no position, office or other material relationship within the past three years with the Company or persons known to it to be affiliates of the Company and (viii), except as set forth below, the Investor is not a, and it has no direct or indirect affiliation or association with any, National Association of Securities Dealers, Inc. member as of the date hereof.

(If no exceptions, write “none.” If left blank, response will be deemed to be “none.”)

(b) The Investor also represents and warrants that, other than the transactions contemplated hereunder, the Investor has not directly or indirectly, nor has any person acting on behalf of or pursuant to any understanding with the Investor, executed any disposition, including “short sales” as defined in Rule 200 of Regulation SHO under the Securities Exchange Act of 1934 (the “ Short Sales ”), in the securities of the Company during the period commencing from the time that the Investor first became aware of the proposed transactions contemplated hereunder until the date hereof (“ Discussion Time ”). The Investor has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).

4. Investor Covenant Regarding Short Sales and Confidentiality . The Investor covenants that neither it nor any affiliates acting on its behalf or pursuant to any understanding with it will execute any Short Sales during the period after the Discussion Time and ending on the date the transactions contemplated by this Agreement are publicly disclosed. The Investor covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company through a press release, the Investor will maintain the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).

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5. Pre-emptive Right .

(a) Except with respect to Exempt Issuances, for so long as Investor “beneficially owns” (as determined under Rule 13d-3 of the Securities and Exchange Act of 1934, as amended) an aggregate number of shares of Common Stock equal to or greater than five percent (5%) of the then issued and outstanding shares of Common Stock (the “ Threshold Amount ”), the Company hereby grants Investor the right to purchase its Pro-Rata Portion of any new Equity Securities that the Company may from time to time propose to issue or sell to any party.

(b) Additional Issuance Notices . The Company shall give written notice (an “ Issuance Notice ”) of any proposed issuance or sale described in subsection (a) above to the Investor. The Issuance Notice shall, if applicable, be accompanied by a written offer from any prospective purchaser seeking to purchase Equity Securities, to the extent known to the Company at the time, and shall set forth the material terms and conditions of the proposed issuance, including, without limitation:

(i) the number and description of the new Equity Securities proposed to be issued and the percentage of the Company’s outstanding equity interests such issuance would represent;

(ii) the proposed issuance date; and

(iii) the proposed purchase price per share.

The Company shall provide written notice to Investor if the terms set forth in the Issuance Notice are updated or changed in any material respect (a “ Material Update ”) as the details listed in Sections 5(b)(i), (ii) and (iii) are known.

(c) Exercise of Pre-emptive Rights . Investor shall, for a period of fifteen (15) business days following the initial receipt of an Issuance Notice (the “ Exercise Period ”), have the right to elect irrevocably to purchase up to its Pro Rata Portion of the new Equity Securities at the purchase price and on the other terms set forth in the Issuance Notice by delivering a written notice to the Company. If the Company provides a Material Update, the Exercise Period shall be extended by five calendar days from the date of receipt of the Material Update, if such extension is longer than the expiration of the Exercise Period. The closing of any purchase by Investor shall be consummated concurrently with the consummation of the issuance or sale described in the Issuance Notice; provided, however that, the closing of any purchase by Investor may be extended beyond the closing of the transaction described in the Issuance Notice to the extent necessary to obtain required government approvals and other required third party approvals or consents (and the Company shall use its reasonable best efforts to obtain such approvals and consents).

(d) Sales to the Prospective Buyer . If Investor fails to elect to purchase all or part of its Pro Rata Portion allotment of the new Equity Securities described in the Issuance Notice within the time period described in subsection (c), the Company shall be free to complete the proposed issuance or sale of new Equity Securities described in the Issuance Notice at a price and on other terms no less favorable to the Company than those set forth in the Issuance Notice. If the Company does not enter into an agreement for the sale of such new Equity Securities within twenty (20) business days after the expiration of the time period described in subsection (c), or if such agreement is not consummated within sixty (60) days after the execution thereof, the pre-emptive right provided hereunder shall be deemed to be revived and such new

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Equity Securities shall not be issued or sold unless first reoffered to the Investor in accordance with this Section 5 .

6. Board Seat . During the period of time (the “ Investor Board Representation Period ”) beginning on the date the Investor “beneficially owns” (as determined under Rule 13d-3 of the Securities Exchange Act of 1934, as amended) the Threshold Amount, and ending on the date the Investor owns less than the Threshold Amount, the Investor may designate one member of the Board (the “ Investor Director ”), who shall also serve on such committees of the Board as designated by the Board. In connection therewith, the Company hereby agrees to create a vacancy and appoint Dr. Rajiv I. Modi (the “ Representative ”) as a Class I director of the Company. As a Class I director, the Representative will be subject to stockholder vote at the Annual Meeting of Stockholders to be held in June 2011. The Company agrees to cause the Representative to be nominated and recommended for reelection for so long as the Investor beneficially owns Common Stock in excess of the Threshold Amount, and to promptly take any action as may be necessary after any stockholder meeting to effect the first sentence of this Section 6. The Investor will cause the Representative to supply any customary or required information and consents reasonably required by the Company to be included in the Company’s Proxy Statements and filings with the Commission under the Securities Act and the Exchange Act of 1934. The Company agrees that in the event it receives a request by the Investor to replace the Representative, the Company will reasonably cooperate with Investor to effect such replacement provided that the replacement individual is reasonably acceptable to the Board of Directors.

7. Public Disclosure . The Company shall (i) before the opening of trading on the Nasdaq Global Market on the next trading day after the date hereof, issue a press release, disclosing all material aspects of the transactions contemplated hereby, to the extent permitted by applicable law, and (ii) make such other filings and notices in the manner and time required by the Securities and Exchange Commission with respect to the transactions contemplated hereby. The Company shall not identify the Investor by name in any press release or public filing, or otherwise publicly disclose the Investor’s name, without the Investor’s prior written consent, unless required by law or the rules and regulations of any self-regulatory organization or exchange to which the Company or its securities are subject.

8. Conditions . The obligation of the Investor to purchase and acquire the Shares hereunder shall be subject to the condition that all representations and warranties and other statements of the Company shall be true and correct as of and on each of the date of this Agreement and the date of the Closing, the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions:

(a) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) under the Securities Act within the applicable time period prescribed for such filing, no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission, and the Investor shall have received the Prospectus in accordance with the federal securities laws.

(b) Prior to the Closing Date, there shall not have occurred any change, or any development involving a prospective change, which would constitute a Material Adverse Effect, and that makes it impracticable to market the Shares on the terms and in the manner contemplated in the Prospectus.

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(c) No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental agency or body which would, as of the Closing Date, prevent the issuance or sale of the Shares or materially and adversely affect or reasonably be believed to materially and adversely affect the business or operations of the Company; and no injunction, restraining order or order of any other nature by any federal or state court of competent jurisdiction shall have been issued as of the Closing Date which would prevent the issuance or sale of the Shares or materially and adversely affect or reasonably be believed to materially and adversely affect the business or operations of the Company.

(d) The Investor shall have received from Ballard Spahr Andrews & Ingersoll, LLP, counsel to the Company, such counsel’s written opinion and written statement, addressed to the Investor and dated the Closing Date, in form and substance as set forth in Exhibit B .

(e) The Shares shall have been authorized for quotation on the Nasdaq Global Market, Inc.

(f) The JV Agreement and the agreements contemplated thereby, and the Services Agreement shall have been executed and delivered by the parties thereto.

(g) The actions taken by the Company’s board of directors to pre-approve the transactions contemplated by this Agreement for purposes of Section 203 of the DGCL and the Company’s Shareholder Rights Agreement shall not have been amended or modified in any respect and remain in full force and effect.

9. Indemnification .

(a) Indemnification of the Investor . The Company agrees to indemnify and hold harmless each of the Investors and its owners, officers, directors, managers, members, agents, advisors, successors and assigns (each, an “ Indemnified Party ”), against any losses, claims, damages or liabilities, joint or several, to which such Indemnified Party may become subject, under the Securities Act or otherwise (including in settlement of any litigation if such settlement is effected with the written consent of the Company, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, including the information deemed to be a part of the Registration Statement at the time of effectiveness and at any subsequent time pursuant to Rules 430A and 430B of the Rules and Regulations promulgated under the Securities Act, if applicable, any Preliminary Prospectus, the Prospectus, or any amendment or supplement thereto (including any documents filed under the Exchange Act and deemed to be incorporated by reference into the Prospectus), any Issuer Free Writing Prospectus or in any materials or information provided to investors by, or with the approval of, the Company in connection with the marketing of the offering of the Common Stock ( “ Marketing Materials ” ), including any roadshow or investor presentations made to investors by the Company (whether in person or electronically) or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Indemnified Party for any legal or other expenses reasonably incurred by it in connection with investigating or defending against such loss, claim, damage, liability or action; or (ii) in whole or in part upon any inaccuracy in the representations and warranties of the Company contained herein; or (iii) in whole or in part upon any failure of the Company to perform their respective obligations hereunder or under law; provided, however, that the

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Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability or action arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Prospectus Supplement in reliance upon and in conformity with written information furnished to the Company by the Indemnified Party, specifically for use in the preparation thereof.

In addition to their other obligations under this Section 9(a) , the Company agrees that, as an interim measure during the pendency of any claim, action, investigation, inquiry or other proceeding brought or threatened against the Indemnified Party and which arises out of or based upon any statement or omission, or any alleged statement or omission, described in this Section 9(a) , they will reimburse each Indemnified Party on a monthly basis for all reasonable legal fees or other expenses incurred in connection with investigating or defending any such claim, action, investigation, inquiry or other proceeding, notwithstanding the absence of a judicial determination as to the propriety and enforceability of the Company’s obligation to reimburse such Indemnified Party for such expenses and the possibility that such payments might later be held to have been improper by a court of competent jurisdiction. To the extent that any such interim reimbursement payment is so held to have been improper, each Indemnified Party that received such payment shall promptly return it to the party or parties that made such payment, together with interest, determined on the basis of the prime rate (or other commercial lending rate for borrowers of the highest credit standing) announced from time to time by The Wall Street Journal (the “ Prime Rate” ). Any such interim reimbursement payments which are not made to an Indemnified Party within 30 days of a request for reimbursement shall bear interest at the Prime Rate from the date of such request. This indemnity agreement shall be in addition to any liabilities which the Company may otherwise have.

(b) Notice and Procedures . Promptly after receipt by an Indemnified Party under subsection (a) above of notice of the commencement of any action, such Indemnified Party shall, if a claim in respect thereof is to be made against the Company under such subsection, notify the Company in writing of the commencement thereof; but the omission so to notify the Company shall not relieve the Company from any liability that it may have to any Indemnified Party except to the extent the Company has been materially prejudiced by such failure. In case any such action shall be brought against any Indemnified Party, and it shall notify the Company of the commencement thereof, the Company shall be entitled to participate in, and, to assume the defense thereof, with counsel satisfactory to such Indemnified Party, and after notice from the Company to such Indemnified Party of the Company’s election so to assume the defense thereof, the Company shall not be liable to such Indemnified Party under such subsection for any legal or other expenses subsequently incurred by such Indemnified Party in connection with the defense thereof other than reasonable costs of investigation; provided, however , that if, in the sole judgment of the Indemnified Party, it is advisable for the Indemnified Party to be represented by separate counsel, the Indemnified Party shall have the right to employ a single counsel to represent such Indemnified Party, in which event the reasonable fees and expenses of such separate counsel shall be borne by the Company and reimbursed to the Indemnified Party as incurred (in accordance with the provisions of the second paragraph in subsection (a) above).

The Company under this Section 9 shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Company agrees to indemnify each Indemnified Party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified Party shall have requested the Company to reimburse such Indemnified Party for fees and expenses of counsel as contemplated by this Section 8 , the Company agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than

Stock Purchase Agreement

30 days after receipt by the Company of the aforesaid request and (ii) the Company shall not have reimbursed the Indemnified Party in accordance with such request prior to the date of such settlement. The Company shall not, without the prior written consent of the Indemnified Party, effect any settlement, compromise or consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect of which any Indemnified Party is or could have been a party and indemnity was or could have been sought hereunder by such Indemnified Party, unless such settlement, compromise or consent (a) includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such action, suit or proceeding and (b) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any Indemnified Party.

(c) Contribution; Limitation on Liability . If the indemnification provided for in this Section 9 is unavailable or insufficient to hold harmless an Indemnified Party under subsection (a) above, then the Company shall contribute to the amount paid or payable by such Indemnified Party as a result of the losses, claims, damages or liabilities referred to in subsection (a) above, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Indemnified Party on the other from the offering of the Shares or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Indemnified Party on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Indemnified Party and the parties’ relevant intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Company and the Indemnified Party agree that it would not be just and equitable if contributions pursuant to this Section 9(c) were to be determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the first sentence of this Section 9(c) . The amount paid by an Indemnified Party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this Section 9(c) shall be deemed to include any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending against any action or claim which is the subject of this Section 9(c) . Notwithstanding the provisions of this Section 9(c) , no Indemnified Party shall be required to contribute any amount in excess of the amount received by it (net of expenses) from the public sale of Shares purchased by it pursuant to this Agreement. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

(d) Non-Exclusive Remedies . The obligations of the Company under this Section 9 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Indemnified Party within the meaning of the Securities Act. Each Indemnified Party shall also have all rights and remedies available to it under the law and in equity, in addition to the rights and benefits of this Section 9 .

Stock Purchase Agreement

(e) Survival . Except in the case of fraud, gross negligence or willful misconduct, the provisions of this Section 9 shall survive until the first anniversary of the Closing.

10. Miscellaneous .

(a) Definitions . As used herein, the following terms have the meanings indicated:

(i) “ Commission ” means the Securities and Exchange Commission.

(ii) “ Exempt Issuances ” means issuances in which Equity Securities are issued (i) as a dividend, stock split or other distribution payable pro rata to all holders of Common Stock, (ii) to employees, officers, directors or consultants of the Company pursuant to any employee benefit plans or programs approved by the Board or any committee thereof, to the extent that the total number of Equity Securities issuable pursuant to such plans or programs does not exceed 15% of the shares of Common Stock outstanding on the date hereof, (iii) upon the conversion or exercise of any options, warrants or other rights to purchase Common Stock (A) outstanding on the date hereof or (B) issued in accordance with the foregoing clause (ii), (iv) as consideration for a merger, consolidation or purchase of assets; and (v) in connection with any strategic partnership or joint venture (the primary purpose of which is not to raise equity capital), provided that (A) any transaction described in this clause (v) has been approved by a majority of the full Board of Directors of the Company and (B) in any twelve (12)-month period, (I) the aggregate number of Equity Securities issued in any transaction or series of related transactions described in this clause (v) at a price per share of less than $0.88 (appropriately adjusted for any stock splits, reverse stock splits, stock dividends, combinations, recapitalizations or the like, the “Per Share Purchase Price”) shall not exceed 5% of the number of issued and outstanding shares of Common Stock at the beginning of such period (the “Initial Capitalization”), and (II) the aggregate number of Equity Securities issued in all transactions described in this clause (v) at a price per share less than the Per Share Purchase Price shall not exceed 10% of the Initial Capitalization.

(iii) “ Equity Securities ” means any and all shares of Common Stock of the Company and any securities of the Company convertible into, or exchangeable or exercisable for, such shares, and options, warrants or other rights to acquire such shares or such convertible, exchangeable or exercisable securities.

(iv) “ Material Adverse Effect ” means a material adverse effect on the results of operations, assets, business, or financial condition of the Company and the its subsidiary, taken as a whole, or a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under the Transaction Documents or to consummate any transactions contemplated by the Transaction Documents or the Prospectus.

(v) “ Pro Rata Portion ” means that portion of Equity Securities that equals the proportion that the number of shares of Common Stock issued and held, or issuable upon the conversion, exchange or exercise of any convertible, exchangeable or exercisable securities then held, by the Investor bears to the total number of shares of Common Stock of the Company then outstanding (assuming full conversion, exchange and exercise of all outstanding convertible, exchangeable and exercisable securities).

Stock Purchase Agreement

(vi) “ Prospectus ” means the prospectus forming a part of the Registration Statement and the prospectus supplement relating to the Offered Shares in the form first filed pursuant to Rule 424(b) under the Securities Act, as amended (the “ Securities Act ”), as further amended or supplemented prior to the execution of this Agreement, and shall include all information and documents incorporated by reference in such prospectus.

(b) This Agreement constitutes the entire understanding and agreement between the parties with respect to the subject matter hereof, and there are no agreements or understandings with respect to the subject matter hereof which are not contained in this Agreement. Notwithstanding any investigation made by any party to this Agreement, all covenants, agreements, representations and warranties made by the Company and the Investor herein will survive the execution of this Agreement, the delivery to the Investor of the Shares being purchased and the payment therefor until the first anniversary of the Closing. This Agreement may be modified only in writing signed by the parties hereto.

(c) This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and shall become effective when counterparts have been signed by each party and delivered to the other parties hereto, it being understood that all parties need not sign the same counterpart. Execution may be made by delivery by facsimile, PDF or other electronically transmitted means.

(d) The provisions of this Agreement are severable and, in the event that any court or officials of any regulatory agency of competent jurisdiction shall determine that any one or more of the provisions or part of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this Agreement and this Agreement shall be reformed and construed as if such invalid or illegal or unenforceable provision, or part of such provision, had never been contained herein, so that such provisions would be valid, legal and enforceable to the maximum extent possible, so long as such construction does not materially adversely effect the economic rights of either party hereto.

(e) All communications hereunder, except as may be otherwise specifically provided herein, shall be in writing and shall be mailed, hand delivered, sent by a recognized overnight courier service such as Federal Express, or sent via facsimile and confirmed by letter, to the party to whom it is addressed at the following addresses or such other address as such party may advise the other in writing:

To the Seller: as set forth on the signature page hereto.

To the Investor: as set forth on the signature page hereto.

All notices hereunder shall be effective upon receipt by the party to which it is addressed.

(f) This Agreement shall be governed by and interpreted in accordance with the laws of the State of Delaware for contracts to be wholly performed in such state and without giving effect to the principles thereof regarding the conflict of laws. To the extent determined by such court, the prevailing party shall reimburse the other party for any reasonable legal fees and disbursements incurred in enforcement of, or protection of any of its rights under this Agreement.

Stock Purchase Agreement

If the foregoing correctly sets forth our agreement, please confirm this by signing and returning to us the duplicate copy of this Agreement.


		NOVAVAX, INC.

		By:		/s/ Rahul Singhvi Rahul Singhvi
				President and Chief Executive Officer

				Address for Notice:
				Novavax, Inc.
				9920 Belward Campus Drive
				Rockville, MD 20850
				Facsimile: 240-268-2128
				Email: rsinghvi@novavax.com
				Attention: Chief Executive Officer


SATELLITE OVERSEAS (HOLDINGS) LIMITED

By:		/s/ Rajiv I. Modi Rajiv I. Modi
		Director

Address for Notice:
c/o Barleigh Wells Limited
7 Hill Street
Douglas, Isle of Man
Facsimile: +44 20 74905102
Email: PankajShah@LubbockFine.co.uk
Attention: Pankaj Shah

Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT (this “ Agreement ”), dated as of March 31, 2009, by and between Novavax, Inc., a Delaware corporation with its headquarters located at 9920 Belward Campus Drive, Rockville, Maryland 20850 (the “ Company ”), and Satellite Overseas (Holdings) Limited (together with its affiliates and any assignee or transferee of all of its rights hereunder, the “ Investor ”).

WHEREAS:

In connection with the Stock Purchase Agreement by and between the parties hereto of even date herewith (the “ Stock Purchase Agreement ”), the Company has agreed, upon the terms and subject to the conditions contained therein, to issue and sell to the Investor 12,500,000 shares (the “ Shares ”) of the Company’s common stock, $0.01 par value per share (the “ Common Stock ”); and

To induce the Investor to execute and deliver the Stock Purchase Agreement, the Company has agreed to provide certain registration rights under the Securities Act and applicable state securities laws.

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows:

1. Definitions . As used in this Agreement, the following terms shall have the following meanings:

(a) “ Affiliate ” means, with respect to any individual, corporation, limited liability company, partnership, association, trust, or any other entity (in each case, a “ Person ”), any other Person which, directly or indirectly, controls, is controlled by or is under common control with such Person.

(b) “ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

(c) “ Form S-3 ” means such form under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently adopted by the SEC which permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.

(d) “ SEC ” means the Securities and Exchange Commission.

(e) “ SEC Rule 144 ” means Rule 144 promulgated by the SEC under the Securities Act.

(f) “ SEC Rule 145 ” means Rule 145 promulgated by the SEC under the Securities Act.

(g) “ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

2. Registration Rights

(a) Demand Registration Rights .

(i) If the Company shall receive, at any time after December 31, 2009, a written demand from the Investor that the Company file a registration statement under the Securities Act, then the Company shall:

(1) as soon as practicable, but in any event within sixty (60) days of the receipt of such request, file a registration statement under the Securities Act covering all of the Shares which the Investor requests to be registered; and

(2) use its best efforts to cause such registration statement to be declared effective by the SEC as soon as practicable.

(ii) Notwithstanding the foregoing, if the Company shall furnish to the Investor requesting a registration statement pursuant to this Section 2(a) a certificate signed by the Chief Executive Officer of the Company stating that in the good faith judgment of the board of directors of the Company it would be materially detrimental to the Company and its stockholders for such registration statement to become effective or to remain effective as long as such registration statement would otherwise be required to remain effective because such action would (i) materially interfere with a significant acquisition, corporate reorganization or other similar transaction involving the Company, (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act, the Company shall have the right to defer taking action with respect to such filing for a period of not more than forty-five (45) days after receipt of the request of the Investor; provided , however , that the Company may not utilize this right more than twice in any twelve-month period and provided further that the Company shall not register any securities for the account of itself or any other stockholder during any such forty-five (45) day period other than a registration statement relating either to the sale of securities to employees of the Company pursuant to a stock option, stock purchase or similar plan or an SEC Rule 145 transaction, a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Shares, or a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered.

(iii) All expenses incurred in connection with a registration requested pursuant to this Section 2(a) shall be paid as set forth in Section 2(f) hereof.

(iv) Notwithstanding anything in this Section 2(a) to the contrary, the Company shall only be required to consummate one (1) offering pursuant to this Section 2(a) during any three (3) year period. A registration statement shall not be counted until such time as such registration statement has been declared effective by the SEC (unless the Investor withdraws its request for such registration (other than as a result of information

concerning the business or financial condition or prospects of the Company which is made known to the Investor after the date on which such registration was requested) and elects not to pay the registration expenses therefor pursuant to Section 2(f) .

(v) If the Investor intends to distribute the Shares covered by its request by means of an underwriting, the Investor shall so advise the Company as part of its request.

(b) Piggyback Registration .

(i) If the Company proposes to register (including for this purpose a registration effected by the Company for stockholders other than the Investor) any of its stock or other securities under the Securities Act in connection with the public offering of such securities solely for cash (other than a registration statement relating either to the sale of securities to employees of the Company pursuant to a stock option, stock purchase or similar plan or an SEC Rule 145 transaction, a registration on any form which does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Shares or a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities which are also being registered) (a “ Piggyback Registration ”), the Company shall, at such time, promptly give the Investor written notice of such registration. Upon the written request of the Investor given within twenty (20) days after mailing of such notice by the Company, the Company shall, subject to the provisions of Section 2(e) , cause to be registered under the Securities Act all of the Shares that the Investor has requested to be included in such Piggyback Registration. The Company shall pay the expenses of any such Piggyback Registration as set forth in Section 2(g) hereof. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2(b) prior to the effectiveness of such registration whether or not the Investor has elected to include Shares in such registration. The expenses of such withdrawn registration shall be borne by the Company.

(ii) In the event that the Investor elects to participate in a Piggyback Registration that is effected by the Company for a stockholder of the Company other than the Investor, the Investor agrees to consider in good faith waiving its rights to participate in such Piggyback Registration if the Company informs the Investor of its good faith opinion that the inclusion of the Shares in such offering would be detrimental to the offering.

(c) Obligations of the Company . Whenever required under this Section 2 to effect the registration of any of the Shares, the Company shall, as expeditiously as reasonably possible:

(i) prepare and file with the SEC a registration statement with respect to such Shares and use its reasonable best efforts to cause such registration statement to become effective, and, upon the request of the Investor, keep such registration statement effective for a period of up to one hundred twenty (120) days or, if earlier, until the distribution contemplated in the registration statement has been completed; provided , however , that (i) such 120-day period shall be extended for a period of time equal to the period the Investor refrains from selling any securities included in such registration at the request of an underwriter of

Common Stock (or other securities) of the Company and (ii) in the case of any registration of the Shares on Form S-3 which are intended to be offered on a continuous or delayed basis, subject to compliance with applicable SEC rules, such 120-day period shall be extended, if necessary, to keep the registration statement effective until all such Shares are sold;

(ii) prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement;

(iii) furnish to the Investor (a) a draft copy of the registration statement and (b) such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as the Investor may reasonably request in order to facilitate the disposition of Shares owned by it;

(iv) use its reasonable best efforts to register and qualify the securities covered by such registration statement under such other securities or blue sky laws of such jurisdictions as shall be reasonably requested by the Investor; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

(v) in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering;

(vi) provide a transfer agent and registrar for all Shares registered pursuant hereunder and a CUSIP number for all such Shares, in each case not later than the effective date of such registration;

(vii) notify the Investor, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed;

(viii) after such registration statement becomes effective, notify the Investor of any request by the SEC that the Company amend or supplement such registration statement or prospectus.

(ix) notify the Investor, at any time when a prospectus relating such registration statement is required to be delivered under the Act, of (i) the issuance of any stop order by the SEC in respect of such registration statement, or (ii) the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing;

(x) to the extent not already listed, cause all Shares registered hereunder to be listed on each securities exchange on which similar securities issued by the Company are then listed; and

(xi) use its reasonable best efforts to furnish, at the request of the Investor, on the date that Shares are delivered to the underwriters for sale in connection with an underwritten registration pursuant to Section 2(b) , if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the date that the registration statement with respect to such Shares becomes effective, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering and reasonably satisfactory to the Investor, addressed to the underwriters and to the Investor, and (ii) a “comfort” letter dated as of such date from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering and reasonably satisfactory to the Investor, addressed to the Investor, provided , however , that such “comfort” letter shall be at the Investor’s own expense.

(d) Furnish Information . It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 2 with respect to the Shares that the Investor shall furnish to the Company such information regarding itself, the Shares held by it, and the intended method of disposition of such securities as shall be reasonably required to effect the registration of the Shares.

(e) Underwriting Requirements . In connection with any offering involving an underwriting of shares of the Company’s capital stock pursuant to Section 2(b) , the Company shall not be required to include any of the Shares in such underwriting unless the Investor accepts the terms of the underwriting as agreed upon between the Company and its underwriters. If the total number of securities, including the Shares, requested by stockholders to be included in such offering exceeds the amount of securities to be sold, other than by the Company, that the underwriters determine in their reasonable discretion is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including the Shares, which the underwriters determine in their sole discretion will not jeopardize the success of the offering , except that no securities held by the Investor shall be excluded until all securities held by all other Persons other than the Company have been excluded.

(f) Expenses of Demand Registration . All expenses, other than taxes, underwriting discounts and commissions, incurred in connection with registrations, filings or qualifications pursuant to Section 2(a) , including (without limitation) all registration, filing and qualification fees (including “blue sky” fees), printers’ and accounting fees, fees and disbursements of counsel for the Company and the reasonable fees and disbursements of one counsel for the Investor shall be borne equally by the Company and the Investor; provided, however, that the Investor shall not be required to pay any such expenses in excess of $20,000 per each registration requested pursuant to Section 2(a) ; provided further , that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 2(a) if the registration request is subsequently withdrawn at the request of the Investor; and

provided further , however , that if at the time of such withdrawal, the Investor has learned of information concerning the business or financial condition or prospects of the Company not known to the Investor at the time of its request and has withdrawn the request with reasonable promptness after learning of such information, then the Investor shall not be required to pay any of such expenses and shall retain its rights pursuant to Section 2(a) .

(g) Expenses of Piggyback Registration . The Company shall bear and pay all expenses incurred in connection with any registration, filing or qualification of Shares with respect to the registrations pursuant to Section 2(b) hereof for the Investor, including (without limitation) all registration, filing, and qualification fees (including “blue sky” fees), printers and accounting fees relating or apportionable thereto and the fees and disbursements, of counsel for the Investor as selected by it, but excluding taxes, underwriting discounts and commissions relating to Shares.

(h) Indemnification . In the event any Shares are included in a registration statement under this Section 2 :

(i) To the extent permitted by law, the Company will indemnify and hold harmless the Investor, and the partners, members, officers, directors, and stockholders of the Investor; legal counsel and accountants for the Investor; any underwriter (as defined in the Securities Act) for the Investor; and each Person, if any, who controls the Investor or underwriter within the meaning of the Securities Act or the Exchange Act, against any Damages (as defined below), and the Company will pay to the Investor, underwriter, controlling Person, or other aforementioned Person any legal or other expenses reasonably incurred by them in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided , however , that the indemnity agreement contained in this Section 2(h)(i) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable for any Damages to the extent that they arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of the Investor, underwriter, controlling Person, or other aforementioned Person expressly for use in connection with such registration.

(ii) To the extent permitted by law, the Investor will indemnify and hold harmless the Company, and each of its directors, each of its officers who has signed the registration statement, each Person (if any), who controls the Company within the meaning of the Securities Act, legal counsel and accountants for the Company, and any underwriter (as defined in the Securities Act), against any Damages, in each case only to the extent that such Damages arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of the Investor expressly for use in connection with such registration; and the Investor will pay to the Company and each other aforementioned Person any legal or other expenses reasonably incurred by them in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided , however , that the indemnity agreement contained in this Section 2(h)(ii) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Investor, which consent shall not be unreasonably withheld;

and provided further that in no event shall the aggregate amounts payable by the Investor by way of indemnity or contribution under Sections 2(h)(ii) and 2(h)(iv) exceed the proceeds from the offering received by the Investor (net of any underwriting discounts and commissions paid by the Investor), except in the case of fraud or willful misconduct by the Investor.

(iii) Promptly after receipt by an indemnified party under this Section 2(h) of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2(h) , give the indemnifying party notice of the commencement thereof. The indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires, participate jointly with any other indemnifying party to which notice has been given, and to assume the defense thereof with counsel mutually satisfactory to the parties; provided , however , that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such action. The failure to give notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of any liability to the indemnified party under this Section 2(h) , to the extent that such failure materially prejudices the indemnifying party’s ability to defend such action. The failure to give notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2(h) .

(iv) In order to provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i) any party otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Section 2(h) but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that this Section 2(h) provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any party hereto for which indemnification is provided under this Section 2(h) , then, and in each such case, such parties will contribute to the aggregate losses, claims, damages, liabilities, or expenses to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of each of the indemnifying party and the indemnified party in connection with the statements, omissions, or other actions that resulted in such loss, claim, damage, liability, or expense, as well as to reflect any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or allegedly untrue statement of a material fact, or the omission or alleged omission of a material fact, relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission; provided , however , that, in any such case, (x) the Investor will be required to contribute any amount in excess of the public offering price of all such Shares offered and sold by the Investor pursuant to such registration statement and (y) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be

entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation; and provided further that in no event shall the Investor’s liability pursuant to this Section 2(h)(iv) , when combined with the amounts paid or payable by the Investor pursuant to Section 2(h)(ii) , exceed the proceeds from the offering received by the Investor (net of any underwriting discounts and selling commissions paid by the Investor), except in the case of willful misconduct or fraud by the Investor.

(v) Unless otherwise superseded by an underwriting agreement entered into in connection with the underwritten public offering, the obligations of the Company and the Investor under this Section 2(h) shall survive the completion of any offering of Shares in a registration statement under this Section 2 , and otherwise and shall survive the termination of this Agreement.

(vi) As used in this Section 2 , “ Damages ” means any loss, damage, or liability (joint or several) to which a Person may become subject under the Securities Act, the Exchange Act, or other federal or state law, insofar as such loss, damage, or liability (or any action in respect thereof) arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any registration statement of the Company, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (ii) an omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (iii) any violation or alleged violation by the indemnifying party (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any state securities law.

(i) Reports Under Exchange Act . With a view to making available to the Investor the benefits of SEC Rule 144 promulgated under the Securities Act and any other rule or regulation of the SEC that may at any time permit the Investor to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company agrees to:

(i) make and keep public information available, as those terms are understood and defined in SEC Rule 144, at all times after the effective date of the first registration statement filed by the Company for the offering of its securities to the general public so long as the Company is subject to the periodic reporting requirements under Sections 13 or 15(d) of the Exchange Act;

(ii) file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and

(iii) furnish to the Investor, so long as the Investor owns Shares, forthwith upon request (i) a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144, the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably

requested in availing the Investor of any rule or regulation of the SEC which permits the selling of any such securities without registration or pursuant to Form S-3 (at any time after the Company so qualifies to use such form).

(j) Assignment of Registration Rights . The Investor may not assign the rights under this Agreement to any Person that is not an Affiliate of the Investor.

(k) “Lockup” Agreement . In any underwritten registration in which the Investor participates, the Investor shall execute a reasonable and customary “lockup” agreement as required by the underwriters; provided, however, that such agreement is no more restrictive than the form of agreement required by the underwriters of the other participants in the offering and the directors and officers of the Company.

(l) Limitation on Subsequent Registration Rights . From and after the date of this Agreement, the Company shall not, without the prior written consent of the Investor, enter into any agreement with any holder or prospective holder of any securities of the Company that would allow such holder or prospective holder to include such securities in any registration filed under Section 2(b) , unless under the terms of such agreement, such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of such securities will not reduce the number of Shares held by the Investor that are included.

(m) Termination of Registration Rights . The rights set forth in this Article 2 shall terminate on the first date on which all Shares held by the Investor and its Affiliates may be sold in any ninety (90) day period without registration in compliance with SEC Rule 144.

3. Miscellaneous .

(a) Governing Law . This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware, without regard to its principles of conflicts of laws.

(b) Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may also be executed and delivered by facsimile signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

(c) Titles and Subtitles . The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

(d) Notices . All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified; (b) when sent by confirmed facsimile if sent during normal business hours of the recipient, and if not sent during normal business hours, then on the next business day; (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) two (2) business days after deposit with a nationally

recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address or facsimile number as set forth on the signature page hereto, or to such facsimile number or address as subsequently modified by written notice given in accordance with this Section 3(d) . If notice is given to the Company, a copy shall also be sent to Ballard Spahr Andrews & Ingersoll, LLP, Attn: Jennifer Miller, Esq., 1735 Market Street, 51 ^st Floor, Philadelphia, PA 19103, facsimile (215) 864-8999. If notice is given to the Investor, a copy shall also be sent to Morrison & Foerster, LLP, Attn: Nicholas J. Spiliotes, Esq., 2000 Pennsylvania Avenue N.W., Suite 5500, Washington, DC 20006, facsimile (202) 887-0763.

(e) Amendments and Waivers . Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance, and either retroactively or prospectively) only with the written consent of the Company and the Investor.

(f) Severability . The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.

(g) Aggregation of Stock . All Shares held or acquired by an Affiliate of an Investor shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

(h) Entire Agreement . This Agreement constitutes the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled.

(i) Delays or Omissions . No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first above written.


	Novavax, Inc.
	By:	/s/ Rahul Singhvi
		Rahul Singhvi
		President and Chief Executive Officer 9920 Belward Campus Drive Rockville, Maryland 20850 Fax No.: 240-268-2128

	Satellite Overseas (Holdings) Limited
	By:	/s/ Rajiv I. Modi
		Rajiv I. Modi
		Director c/o Barleigh Wells Limited, 7 Hill Street, Douglas, Isle of Man, United Kingdom Im1 1EF Fax No.: +44 20 7491 5102

Registration Rights Agreement

Exhibit 10.3

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

CADILA NOVAVAX

JOINT VENTURE
AGREEMENT

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JOINT VENTURE AGREEMENT

This agreement (“Agreement”) is made this 31st day of March, 2009

BETWEEN

Cadila Pharmaceuticals Limited, a COMPANY incorporated under the laws of India having its office at ‘Cadila Corporate Campus’, Sarkhej-Dholka Road, Bhat, Ahmedabad – 382210, Gujarat, INDIA herein represented by Dr. Rajiv I. Modi in his capacity as Managing Director (hereinafter referred to as “Cadila”).

Novavax Inc., incorporated and existing under the laws of the State of Delaware, United States of America (USA), having its principal office at 9920 Belward Campus Drive, Rockville, MD 20850, USA herein represented by Dr. Rahul Singhvi, in his capacity as President and CEO (hereinafter referred to as “Novavax”)

“Cadila” and “Novavax” together are referred to as “Parties”, and individually as a “Party”)

PREAMBLE

Whereas Cadila is engaged in research, development, manufacture and marketing of various pharmaceutical preparations in India and in various other countries. It possesses technical know-how and expertise in setting up manufacturing facilities, producing pharmaceutical, herbal, biotech and medicinal products as well as selling and marketing such products in different markets around the world.

Whereas Novavax is engaged in manufacturing seasonal and non-seasonal influenza vaccine Products as well as a platform for developing and manufacturing virus-like particle based products and selling and marketing such products in the different markets around the world;

Whereas Cadila has formed a Joint Venture Company (the “COMPANY”) in India for developing, manufacturing, marketing and selling pharmaceutical and medicinal Products as mentioned hereinafter to cater the needs of the market in India. The parties intend that the COMPANY will establish US and India cGMP acceptable manufacturing facilities in India and the structure for developing, producing, marketing and selling pharmaceutical products either directly or through partners / contractors as further described broadly in this Agreement;

Whereas, concurrently herewith, the Parties have approved the Amended Articles of Incorporation and/or Statutes of the COMPANY attached as Exhibit A and other necessary documents required for registration of the COMPANY;

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NOW, THEREFORE, the Parties hereby agree as follows:

Article 1

Conditions Precedent & Interpretations / Definitions

1.1		Interpretations / Definitions

1.1.1		For the purpose of this Agreement, the following definitions of certain terms used herein shall apply unless the context otherwise requires.

	(i)		“Ancillary Agreements” shall have the meaning assigned to such term in Section 18.1;

	(ii)		“Backup Licenses” shall collectively mean license agreements that replicate the Licenses, substituting the Cayman JV as the licensee therein, as attached hereto as Exhibit A .

	(iii)		“Business” shall have the meaning provided in Article 7.

	(iv)		“Business Plan” shall mean a business plan and budget that includes a plan and budget for strategy, sales, expenses, profit and loss, capital expenditure and cash flows of the COMPANY for the Financial Year to which it relates and the subsequent two (2) Financial Years, and any other matters determined by the Board of Directors.

			The Business Plan shall include in particular, in relation to the Financial Year to which it relates, the following:

	(a)		an operating budget and balance sheet forecast;

	(b)		annual projected profit and loss account and cash flow statement broken down monthly;

	(c)		an estimate of working capital requirements and capital expenditures;

	(d)		the amount (if any) that is considered prudent to retain for the purpose of meeting the working capital requirements, out of those profits of the previous Financial Year (where applicable) that are available for distribution to Shareholders;

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	(e)		a management report giving business objectives for the Financial Year; and

	(f)		A financial report which shall include an analysis of the financial performance of the COMPANY for the previous Financial Year (where applicable) compared with the Business Plan for such Financial Year, identifying variations in sales, expenses, profit and loss, cash flows and other material financial items.

			The Business Plan shall be prepared under the guidance of the Chief Executive Officer of the COMPANY and shall be considered official when approved by the Board of Directors of the COMPANY.

	(v)		“Cayman JV” shall mean CPL Biologics Ltd., an exempted company organized under the laws of the Cayman Islands.

	(vi)		“Completion” means the completion of all activities set forth in Section 3.4.

	(vii)		“Completion Date” shall have the meaning provided in Section 3.3.

	(viii)		“Confidential Information” shall have the meaning provided in Section 18.1.

	(ix)		“Effective Date” means the date of this Agreement.

	(x)		“Financial Year” in relation to the COMPANY shall mean a financial accounting period of twelve (12) months beginning on April 1; provided that the first Financial Year will consist of period beginning on the date of formation of the COMPANY to March 31 of next year.

	(xi)		“Group” in relation to a person or entity means any direct or indirect wholly owned subsidiary of such person or entity, any person or entity of which such person or entity is a direct or indirect wholly owned subsidiary (its “Holding Company”) and any other direct or indirect wholly owned subsidiaries of any such Holding Company. The term “Group” shall also include affiliates of Cadila consisting of the family members of the promoters, their Hindu undivided families (HUFs), family trust and closely held companies owned by the family members and trusts either singly or jointly.

	(xii)		“Know-How” means all tangible and intangible (a) techniques, technology, practices, trade secrets, inventions (whether patentable or not), methods,

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			protocols, processes, formulas, knowledge, know-how, skill, experience, records, documents, data and results (including pharmacological, toxicological, non-clinical and clinical test data and results), analytical and quality control data, results or descriptions, software and algorithms and (b) compositions of matter, cells, cell lines, assays, animal models and physical, biological or chemical material. Know-How shall in any event exclude any Patents.

	(xiii)		“Licenses” shall collectively mean:

	(a)		“Cadila License” which shall mean the Cadila Product License to be entered into by the COMPANY and Cadila the form of which is attached hereto as Exhibit B ;

	(b)		“Seasonal and Other Vaccine License” which shall mean the Vaccine License for the current seasonal influenza vaccine and [* * *] vaccine targets to be entered into by the COMPANY and Novavax the form of which is attached hereto as Exhibit C ; and

	(c)		“Additional Vaccine License” which shall mean a license to an additional VLP vaccine product which may be entered into by the COMPANY and Novavax after the Completion Date.

			The Seasonal and Other Vaccine License and Additional Vaccine License shall be referred to as the “Novavax Licenses”.

	(xiv)		“Party” and “Parties” shall mean when used in the singular either Cadila or Novavax as may be applicable and wherever used in the plural shall mean Cadila and Novavax.

	(xv)		“Patents” shall mean any and all (a) issued patents and inventors’ certificates and re-examinations, reissues, renewals, extensions, registrations, substitutions, supplementary protection certificates and term restorations with respect to any of the foregoing , and (b) pending applications for patents and inventors’ certificates, including, without limitation, provisional applications, continuations, continuations-in-part, divisional and substitute applications with respect to any of the foregoing.

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(xvi)

“Products” shall collectively mean:

	(a)		“Novavax Products” which shall mean (i) seasonal influenza vaccine, (ii) the additional vaccine that is the subject of the Additional Vaccine License if such Additional Vaccine License is entered into, and (iii) VLP vaccines including a viral antigen selected from a chikun gunya virus, a [* * ] ([ * ] dengue fever), a hepatitis E [ * *] (each an “Additional Novavax Product”), all as specifically defined in the Novavax Licenses;

	(b)		“Cadila Products” which shall mean (i) Cadila’s current vaccine product known as Cadi-05, including its use for melanoma, head and neck, small cell lung, bladder and HRPC cancers, (ii) Cadila’s proprietary Mycobacterium W immuvac adjuvant for use with therapeutic vaccines against cancer, (iii) Cadila’s biogeneric erythropoietin product, G-CSF product, hyaluronic acid product, and streptokinase product that are generic versions of approved biologic pharmaceutical products (excluding in any event any small molecule products, generic or otherwise), and (iv) Cadila’s biological diagnostic products: the Typhigen Kit, the ELIK HIV kit, the ELIK HCV kit, the CADISPOT 1&2 HIV kit and the NEVA HIV kit, all as specifically defined in the Cadila License;

	(c)		any products developed, purchased or in-licensed by the COMPANY including, without limitation, any vaccine, adjuvant, biosimilar diagnostic, biological product, and a combination of (a), (b), (c) and (d) (or component(s) of any of them); and

	(d)		Any Future Contributed Products that are licensed to the COMPANY in the future in accordance with Section 7.8.

(xvii)

“Future Contributed Products” shall collectively mean:

(a)

“Cadila Future Products” which shall mean any (i) therapeutic vaccine against cancer product, (ii) Cadila proprietary adjuvant for use with vaccines, and (iii) Cadila biogeneric product that is a generic version of an approved biologic pharmaceutical product (excluding in any event any small molecule products, generic or otherwise), in each case

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			developed, purchased or in-licensed by Cadila that is not a Cadila Product; and

	(b)		“Novavax Future Products” which shall mean any VLP-based vaccine product developed, purchased or in-licensed by Novavax that is not a Novavax Product, excluding in any event any RSV VLP-based vaccine product.

	(xviii)		“Shareholder” shall mean a shareholder of the COMPANY.

	(xix)		“Shares” shall mean the equity shares of the COMPANY.

	(xx)		“Supply Agreements” shall collectively mean:

	(a)		“Cadila Supply Agreement” which shall mean the Supply Agreement to be entered into by the COMPANY and Cadila the form of which is attached hereto as Exhibit D ; and

	(b)		“Novavax Supply Agreement” which shall mean the Supply Agreement to be entered into by the COMPANY and Novavax the form of which is attached hereto as Exhibit E .

(xxi)

“Technical Services Agreements” shall collectively mean:

	(a)		“Cadila Technical Services Agreement” which shall mean the Technical Services Agreement to be entered into by Cadila and the COMPANY, the form of which is attached hereto as Exhibit F ; and

	(b)		“Novavax Technical Services Agreement” which shall mean the Technical Services Agreement to be entered into by Novavax and the COMPANY, the form of which is attached hereto as Exhibit G .

	(xxii)		“Territory” shall have the meaning provided in Article 4.

	(xxiii)		“Transfer” means to transfer, grant any security interest over, or otherwise dispose of, voluntarily or involuntarily, by operation of law or otherwise, or grant any person any rights in or over. A “Transfer” means any such transfer, grant or disposal.

	(xxiv)		“VLP” shall mean virus-like particle.

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1.2		References to “Statutes” or Statutory provisions shall be construed to include references to those statutes or provisions as amended or re-enacted (whether with or without modification) from time to time or as their application is modified by other provisions (whether before or after the date of this Agreement) and shall include any statute or provision of which they are re-enactments (whether with or without modification) and shall also include any orders, regulations, instruments or other subordinate legislation under the relevant statute or statutory provision.

1.3		The headings in this Agreement are for ease of reference only and shall not in any way affect its construction or interpretation.

1.4		Reference to a Party to this Agreement shall include its successors in title and permitted assigns.

1.5		Unless expressly stated to the contrary in this Agreement:

1.5.1		words denoting the singular include the plural and vice versa, words denoting any one gender include all genders and vice versa;

1.5.2		a reference to a recital or clause is a reference to a recital or clause of this Agreement and a reference to a sub-clause is a reference to a sub-clause of the clause in which the reference appears;

1.5.3		the words and phrases “other”, “including” and “in particular” shall not limit the generality of any preceding words or be construed as being limited to the same class as the preceding words where a wider construction is possible;

1.5.4		references to persons include individuals, bodies corporate, unincorporated associations and partnerships; and

1.5.5		all obligations, representations and warranties on the part of two or more persons are entered into, given or made by such persons jointly and severally.

Article 2

Establishment of the COMPANY

2.1

The name of the COMPANY shall be “CPL Biologicals Limited”.

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2.2		Equity Shares . Pursuant to the amended articles of association, the issued share capital of the COMPANY shall be Rupees [ * * ] (Rupees [ * ]) and authorized share capital shall be Rupees [ * ] Rupees [ * *]).

2.3		The issued share capital, subject to the provisions of Article 11, shall be subscribed as set forth on Schedule I, as amended from time to time in accordance with the terms hereof.

2.4		Any stamp duty payable upon such issue and allotment shall be borne by the COMPANY.

Article 3

EFFECTIVE DATE; COMPLETION

3.1		On the Effective Date the Parties shall execute the Ancillary Agreements, which shall be effective on and from the Completion Date, and the Parties shall have contributed, or caused to be contributed, the executed Back-up Licenses to the Cayman JV.

3.2		Conditions Precedent : The obligation of Novavax to subscribe to the Shares is subject to the complete satisfaction / fulfilment (with proof of fulfilment), or waiver of the following pre-closing conditions (“Conditions Precedent”):

3.2.1		The COMPANY shall have obtained an approval of the foreign investment promotion board of India (“FIPB”) for issue of Shares to Novavax in consideration of transfer of the Novavax Licenses to the COMPANY;

3.2.2		The COMPANY shall have been converted into a private limited company under the Companies Act, 1956; and

3.2.3		Cadila shall have caused the shareholders of the COMPANY other than Cadila to transfer their shares to Cadila.

3.3		Completion : Completion shall take place at a venue as shall be agreed in writing by the Parties within fifteen (15) days of notice from the COMPANY to the Parties that all the Conditions Precedent have been fulfilled, or on such other date as the Parties may agree in writing (“Completion Date”). The transactions contemplated under this Agreement to be consummated on the Completion Date shall be deemed to occur simultaneously

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		and no such transaction shall be consummated unless all such transactions are consummated.

3.4		On the Completion Date:

3.4.1		The COMPANY shall hold a meeting of the Board of Directors to approve the calling of an extra ordinary general meeting of the Shareholders for (i) issue of Shares to Cadila and Novavax as contemplated under Section 3.4.4 of this Agreement and (ii) adoption of the amended articles of association in the form attached to this Agreement as Exhibit H , and (iii) appointment of the persons nominated by Cadila and Novavax as Directors in accordance with this Agreement who have obtained their respective Director Identification Numbers and Digital Signature Certificates and who are otherwise qualified to act as the directors of the Company;

3.4.2		The COMPANY shall hold a meeting of the Shareholders for (i) issue of Shares to Cadila and Novavax as contemplated under Section 3.4.4 of this Agreement; (ii) adoption of the amended articles of association in the form attached to this Agreement as Exhibit H , and (iii) appointment of the persons nominated by Cadila and Novavax as Directors in accordance with this Agreement who have obtained their respective Director Identification Numbers and Digital Signature Certificates and who are otherwise qualified to act as the directors of the Company;

3.4.3		The Company shall provide certified copies of resolutions passed at the meetings contemplated by section 3.4.1 and 3.4.2;

3.4.4		The COMPANY shall issue to each Party the number of shares shown opposite such Party’s name on Schedule I, free and clear from all encumbrances; and

3.4.5		The COMPANY shall provide the Parties with share certificates in respect of the Shares and duly register such Shares in the name of the Parties in the COMPANY’s Register of Members.

3.5		Post Completion Events :

3.5.1		Within five (5) business days from the Completion Date, the COMPANY shall file all requisite forms and returns as may be required to be filed with any government authority under applicable law, including without limitation:

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	(a)		Form 2, Form 23 and Form 32 of the Companies (Central Government’s) General Rules & Forms with the relevant Registrar of Companies; and

	(b)		all relevant filings required to be made before the Reserve Bank of India.

3.5.2		The COMPANY shall deliver to the Parties a certified true copy of all the acknowledged filings including those with the Ministry of Corporate Affairs and the Reserve Bank of India and a certified true copy of the amended memorandum and articles of association of the COMPANY.

3.6		Conduct between Effective Date and Completion Date :

3.6.1		During the period between the Effective Date and the Completion Date, Cadila shall ensure and shall procure that the COMPANY does not, without the prior written consent of Novavax:

	(i)		do anything that is contrary to this Agreement including without limitation (a) take any decision or action in respect of any matter listed in Schedule II; (b) entering into any commitment or transaction or do anything which is not contemplated by this Agreement; (c) entering into any Related Party Transaction save and except as provided in this Agreement or; (d) passing of or join in the passing of or permitting the passing of any resolution of the shareholders of the COMPANY which is not contemplated by this Agreement; or

	(ii)		do or permit anything to be done which would be contrary to the provisions of applicable law.

3.6.2		If Cadila or COMPANY becomes aware that the happening of an event has resulted in a breach of any representations and warranties of Cadila in Section 25.6 or there has been any event or circumstance which would cause the representations and warranties of Cadila in Section 25.6 to be untrue or inaccurate in any material respect, then they shall immediately notify Novavax of that fact in writing with all relevant information in relation to that event or, as the case may be, breach of such representations and warranties.

3.6.3		Cadila shall cause the COMPANY to, simultaneously furnish to Novavax all such documents and information as is provided to Directors or Shareholders, and notice and

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		minutes of all meetings of Shareholders, the Board and any committees thereof (including attachments and exhibits as are held, during this period) relating to the period between Effective Date and the Completion Date.

3.7		The Parties shall use commercially reasonable efforts in good faith to fulfil the Conditions Precedent within 120 days after the Effective Date (the “Long Stop Date”). If Completion in accordance with section 3.4 does not occur on or before the Long Stop Date, the Parties shall:

3.7.1		effect the joint venture contemplated by this Agreement and the Ancillary Agreements through the Cayman JV, and in connection therewith the Parties shall amend and restate the Memorandum and Articles of Association of the Cayman JV and execute and deliver such other documents, agreements and instruments so as to replicate in the Cayman JV as nearly as possible the terms and conditions set forth in this Agreement and the Ancillary Agreements, and shall execute and deliver such other documents, agreements and instruments as may be necessary and desirable to effect the foregoing as promptly as reasonably practicable; and

3.7.2		promptly cause the Cayman JV to take such steps as are reasonably necessary to establish a subsidiary organized under the laws of India or ensure that the COMPANY becomes a wholly owned subsidiary of the Cayman JV.

3.8		In the event that Completion takes place in accordance with section 3.4, the Parties shall cause (i) all agreements in relation to the Cayman JV to be terminated and (ii) the Cayman JV to be dissolved and liquidated.

Article 4

Territory

The COMPANY shall carry on its business in the Territory of India (the “Territory”). The Territory may only be changed by mutual, written agreement between the Parties.

Article 5

Roles of the Parties

5.1

The COMPANY shall use commercially reasonable efforts to obtain all permits, approvals and licenses necessary for the operation of the COMPANY.

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5.2

Cadila and Novavax shall reasonably assist the COMPANY to arrange for the necessary licences and permissions to be granted by the Ministry of Health and other government authorities.

Article 6

Issue and Transfer of Shares

6.1		No Shareholder shall (a) Transfer any Share or interest in any Share in the COMPANY or (b) permit the Transfer of any interest in the Shareholder unless (i) it is expressly permitted under this Agreement or (ii) the other Shareholder gives its prior written consent; provided, however, that as to the interests in the COMPANY that are owned directly by Novavax or Cadila, the restriction set forth in Section 6.1(b) shall not apply.

6.2		Notwithstanding Section 6.1, a Shareholder may permit the Transfer of an interest in it to a person in its Group without compliance with the provisions of Section 6.4 and Section 6.5 with the prior written consent of the other Shareholder, which consent shall not be unreasonably withheld.

6.3		Notwithstanding Section 6.1, a Shareholder may Transfer all of its Shares in the COMPANY to a person in its Group without compliance with the provisions of Section 6.4 and Section 6.5 with the prior written consent of the other Shareholder, which consent shall not be unreasonably withheld, provided that, at the time of the Transfer and in relation to the Shares being transferred:

6.3.1		the transferring Shareholder procures that the transferee enters into this Agreement on the same terms as applicable to the transferring Shareholder in relation to those Shares immediately prior to the Transfer; and

6.3.2		the transferring Shareholder guarantees and indemnifies the other Party in respect of all the obligations and any liability of the transferee under this Agreement.

6.3.3		if the transferee at any time ceases to be a part of the Group of the transferring Shareholder, that transferee shall Transfer all its Shares back to the transferring Shareholder.

6.4		If either Shareholder (“Offeror”) wishes to dispose of or Transfer some or all of its Shares pursuant to a bona fide written offer (the “Proposed Offer”) from an unaffiliated third party (the “Proposed Transferee”), it shall first offer such Shares to the other Shareholder (“Offeree”) by notice in writing (“Transfer Notice”) at a price per Share

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		not less favourable to the Offeree than that set forth in the Proposed Offer and, to the extent the consideration in the Proposed Offer is non-cash consideration, such non-cash consideration shall be replaced with cash representing a fair value of the non-cash consideration if governmental approval is needed by either of the parties to effect the purchase or sale of the Shares which are the subject of the Proposed Offer, and on other reasonably similar and no less favorable terms and conditions to the Offeree than, as those set forth in the Proposed Offer. On or before expiry of thirty (30) days from the date of receipt of the Transfer Notice, the Offeree shall notify the Offeror in writing of its intentions to accept or reject the offer, and in the event of it accepting the offer (“Acceptance Notice”), the Offeree shall be entitled to an additional period of ninety (90) days or such other mutually agreed extended period from the date of the Acceptance Notice (“Completion Period”) to obtain the approval of the relevant government authority(ies) and to complete the purchase of the Shares from the Offeror.

6.5		In the event that the Offeree fails to complete the purchase of the Shares within the Completion Period or if the Offeree has rejected the offer, the Offeror shall be entitled to dispose of the offered shares to the Proposed Transferee, provided that the price of the Shares is not more favourable to the Proposed Transferee than that offered to the Offeree, and on other reasonably similar and no more favorable terms and conditions to the Proposed Transferee than, as those offered to the Offeree. If the Offeror fails to dispose of such Shares within one hundred twenty (120) days after the Completion Period (or one hundred twenty (120) days after the date on which the Offeree rejected the offer), the Offeror shall not offer to dispose of or Transfer such Shares except pursuant to Section 6.4 and this Section 6.5.

6.6		In the event the Offeree is unwilling or unable to purchase the Offered Shares identified in the Transfer Notice and the Offeror proposes to proceed to Transfer the Offered Shares to a Proposed Transferee, the Offeror may only Transfer its Shares to the Proposed Transferee if the Offeror causes the Proposed Transferee to give the Offeree the right, but not the obligation (“Tag-Along Right”), to require the Proposed Transferee to purchase all of the Shares of the Offeree (“Tag Along Shares”) simultaneously with the purchase of the Shares from the Offeror (“Offered Shares”) at the same price per Share; provided, however, that if the Proposed Transferee is only willing to buy less than the Offered Shares and Tag Along Shares (such shares which the proposed Transferee is not willing to purchase is hereinafter referred to “Excess Shares”), then the number of Offered Shares and the Tag Along Shares shall be reduced

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		on a pro rata basis to the extent of the Excess Shares. The Offeree shall exercise the Tag-Along Right within ninety (90) days from date of receipt of the Transfer Notice.

6.7		In order to be entitled to exercise its tag-along right pursuant to Section 6.5, the Offeree must agree to make to the Proposed Transferee on behalf of itself the same representations, warranties, indemnities, covenants and assurances as the Offeror agrees to make in connection with the Transfer and agree to the same conditions to the Transfer as the Offeror (except that in the case of representations, warranties, indemnities, covenants and assurances pertaining specifically to the Offeror, including, without limitation, representations, warranties, indemnities, covenants and assurances pertaining to the rights licensed by the Offeror under the Licenses, the Offeree shall make comparable representations, warranties, indemnities, covenants and assurances pertaining specifically to itself and its rights licensed to the Offeror under the Licenses); provided, however, that (a) the Offeree shall not be required to make any non-competition, non-solicitation or similar restrictive covenants that would exceed the scope of the covenants set forth in Article 22, and (b) the Offeree shall not be required to make any representations, warranties, indemnities, covenants and assurances with respect to the rights it licensed to the Offeror under the Licenses that would exceed the scope of the corresponding representations, warranties, indemnities, covenants and assurances in the Licenses. All such representations, warranties, indemnities, covenants and assurances shall be made by the Offeror and the Offeree severally and not jointly. Except with respect to individual representations, warranties, indemnities, covenants and other assurances of the Offeree relating to (i) the unencumbered title to its Shares and (ii) the power, authority and legal right to transfer its Shares, the aggregate liability of the Offeree shall not exceed the Offeree’s pro rata share of any such liability to be determined in accordance with the Offeree’s portion of the total number of Shares included in such transfer; provided that, in any event, the aggregate liability of the Offeree shall not exceed the proceeds the Offeree received in connection with the transfer.

6.8		The aggregate liability of the Offeree under any representations, warranties, indemnities, covenants or other assurances which it may give to a Proposed Transferee shall be limited to the consideration payable by the Proposed Transferee to the Offeree for the number of Shares to be sold to the Proposed Transferee.

6.9		It is expressly clarified and agreed between the Parties that if, for any reason whatsoever, the Proposed Transferee is unable to acquire the Tag Along Shares at a price stated in the Transfer Notice (in accordance with this Article 6), the Proposed

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		Transferee shall not acquire any of the Offered Shares, and if any such Transfer is not consummated before the Completion Period, then such Transfer shall not be made without first repeating and re-extending to the Offeree the rights set out in this Article 6.

6.10		The COMPANY shall place a legend on all share certificates in respect of the Shares, stating as follows:

		“THIS CERTIFICATE AND THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT IN ALL RESPECTS TO THE RESTRICTIONS CONTAINED IN THE JOINT VENTURE AGREEMENT DATED MARCH 31, 2009 BY AND BETWEEN CADILA PHARMACEUTICALS LIMITED AND NOVAVAX, INC. AND SHALL BE VALID DURING THE SUBSISTENCE OF THE SAID AGREEMENT.”

6.11		The COMPANY shall ensure that all share certificates in respect of the Shares shall bear the legend as provided in Section 6.10. The COMPANY shall further ensure that all Share certificates, as mentioned herein, issued without the above legend shall be replaced with new Share certificates bearing the above legend.

6.12		In the event that any of the Shares are to be dematerialised, then prior to any such dematerialization, the Shareholders shall enter into appropriate undertakings and documents with the Depository and the Depository Participant to the effect that all such Shares (to be dematerialized) are subject in all respects to the restrictions contained in this Agreement and shall be valid during the subsistence of this Agreement.

6.13		Upon the sale of all Shares held by a Shareholder, as may be permitted by and in accordance with the provisions of this Article 6, the rights and obligations of such selling Shareholder under this Agreement shall terminate; provided, however, that the selling Shareholder shall remain liable for the following obligations and liabilities: (i) any liabilities and obligations of the selling Shareholder accrued as of the date of such sale; (ii) any obligations of the selling Shareholder under Article 18; (iii) any obligations of the selling Shareholder under Section 22.2 for a period of one (1) year after the date of such sale; (iv) any obligations of the selling Shareholder under Section 23.3; (v) liability for breach of any representations and warranties of the selling Shareholder under this Agreement; and (vi) the obligations of the selling Shareholder under Section 25.6; and provided, further, that such termination shall not affect any Ancillary Agreements or other agreements, except to the extent expressly stated otherwise therein.

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Article 7

Business of the COMPANY

7.1		The business of the COMPANY (the “Business”) shall include researching, developing, manufacturing, marketing and selling of Products in the Territory.

7.2		The Business shall be conducted in accordance with the Business Plan prepared under the guidance of the Chief Executive Officer and approved by the Board of Directors of the COMPANY pursuant to Article 8 hereof, as amended by the Board of Directors from time to time. The first Business Plan shall be proposed to the Board of Directors within ninety (90) days from the Effective Date. At the time the first Business Plan is proposed to the Board of Directors, the Chief Executive Officer shall also propose a schedule of development milestones (the “Milestones”), and corresponding amounts of cash investment to be made by Cadila, pursuant to Section 11.2, upon achievement of such Milestones. The Milestones and corresponding investment amounts shall become binding upon approval by unanimous approval of the Board of Directors.

7.3		The COMPANY shall use its commercially reasonable efforts to establish a manufacturing facility in India that complies with US and India cGMP, through which the manufacturing part of the Business of the COMPANY shall be undertaken, within the ‘time-frame’ set in the Business Plan. The manufacturing facility shall be consistent with the applicable equipment, processes and procedures used by Novavax and Cadila in their manufacturing facilities, based in part on technology licensed to the COMPANY under the Licenses. Until the manufacturing facility is established, Novavax and Cadila will supply the COMPANY with Novavax Products and Cadila Products, respectively, for research and development purposes pursuant and subject to the Supply Agreements in accordance with the terms and conditions set forth therein.

7.4		Cadila and Novavax, pursuant and subject to the respective Technical Services Agreements, shall provide reasonable assistance to COMPANY in establishing such manufacturing facility.

7.5		Except as may be otherwise provided herein, the COMPANY shall be operated as an independent entity.

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7.6		The COMPANY shall use its commercially reasonable efforts to obtain at its own expense regulatory approvals and registration for licensing of Products in the Territory. Cadila and Novavax, pursuant and subject to the Technical Services Agreement, shall provide reasonable assistance to the COMPANY in obtaining such regulatory approvals and registrations.

7.7		The COMPANY shall use its commercially reasonable efforts to establish within 12 months from the date of this agreement, a commercialization plan for each Product in the Territory either directly or with help of a commercial partner as approved by the Board of Directors of the COMPANY.

7.8		The COMPANY, Cadila and Novavax shall grant certain negotiation rights to each other for certain future products as follows:

7.8.1		The COMPANY and Cadila hereby grant to Novavax a first right of refusal for Future Novavax Products that are (a) vaccines corresponding to the type of vaccine provided under (iii) of Novavax Products (as the same may be amended under Section 23.3 of this Agreement) developed by or within the COMPANY for development and exploitation outside the Territory, and (b) vaccines included in Cadila Products developed by or within the COMPANY for development and exploitation in the United States, Spain, China and any other country in the world excluding those countries set forth in Schedule IV , in each case as provided in 7.8.3 below. For the avoidance of doubt and notwithstanding anything to the contrary, no such right of first negotiation or similar restriction shall apply to (I) Cadila’s own development, manufacture or commercialization of Cadila Products developed by or within the COMPANY (by itself or through its affiliates) for development and exploitation in the countries set forth in Schedule IV , (II) the adjuvant described in (ii) of Cadila Products (including, without limitation, combinations of the adjuvant with one or more antigens, but excluding the Cadi-05 products described in (i) of Cadila Products), or (III) any vaccine products developed by the Company which are not described in (a) or (b) above.

7.8.2		Novavax hereby grants to COMPANY a first right of refusal for Novavax Future Products developed by or within Novavax for exploitation in the Territory as provided in Section 7.8.3 below. Cadila hereby grants to the COMPANY a first right of refusal for Cadila Future Products developed by or within Cadila for exploitation in the Territory as provided in Section 7.8.3 below.

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7.8.3		Prior to entering into any agreement with a third party granting a license or other right to develop or commercialize any product described in 7.8.1 and 7.8.2 above (each, an “RFR Product”), the Party, or COMPANY, as the case may be, subject to the right of first negotiation with respect to its applicable RFR Product under Sections 7.8.1 or 7.8.2 above (“Owner”) shall first notify the beneficiary of such right of first negotiation (the “RFR Holder”) of its desire to do so and thereupon enter into good faith negotiations with the RFR Holder for a period of at least one hundred twenty (120) days from the date of such notice, for terms of an agreement governing the development and commercialization of such RFR Product under mutually acceptable terms and conditions. If the parties cannot reach agreement on terms by the end of such 120 day period (or, if earlier, upon notice from the RFR Holder that it does not desire to exercise its negotiation rights hereunder), despite each party’s good faith efforts to do so, then the Owner shall be free to enter into license agreements with Third Parties with respect to such RFR Product with respect to the development and/or commercialization thereof (or otherwise develop or commercialize such RFR Product itself or through one of its Affiliates); provided, however, that for six months after the end of such one hundred twenty (120) day period, the Owner shall not enter into any agreement with a Third Party on business terms (e.g., financial terms, scope of rights granted, and similar terms typically found in a term sheet for such a transaction) more favorable to such Third Party than the business terms of the last written proposal (if any) made by the RFR Holder. For the avoidance of doubt, the Owner shall be free to conduct discussions and negotiations with Third Parties for any RFR Product before and/or during the 120 day period described above so long as no agreement is entered into for such RFR Product prior to the end of such 120 day period (or earlier if the RFR Holder provides notice of its desire not to exercise its negotiation rights) and the Owner otherwise complies with its negotiation obligations described above.

7.9		Agreements Regarding Development of Products. The COMPANY, at its own expense, shall be responsible for the preclinical and clinical development, and regulatory activities, necessary for the development and regulatory approval of the Products in the Territory, in addition to any clinical development work already completed by Cadila and Novavax (or subsequently completed by Cadila and Novavax outside the Territory). Cadila and Novavax, pursuant and subject to the Technical Services Agreements, shall provide the COMPANY reasonable cooperation and assistance with respect to such development and regulatory activities of the COMPANY. Pursuant and subject to the Novavax Licenses, Novavax has certain

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		rights to approve the clinical trial protocols for any clinical trial of certain Novavax Products.

7.10		Other than the restrictions set forth in Article 22.2, and subject to the exclusive license grants in the Licenses, Novavax and Cadila are not restricted in their ability to develop and commercialize biotechnology, vaccine and pharmaceutical products in and out of the Territory alone or under partnership, joint venture or licensing arrangements with other persons and entities.

Article 8

Board of Directors

8.1		The Board of Directors of the COMPANY (the “Board”) shall consist of 5 (five) members (“Directors”).

8.2		Cadila shall nominate three (3) of the Directors, including the Chairman of the Board (the “Cadila Directors”), and Novavax shall nominate two (2) Directors (the “Novavax Directors”). Each of Cadila and Novavax shall have the right to appoint an alternate director who can attend meetings of the Board of Directors if the director cannot attend.

8.3		The required quorum for any meeting of the Board shall be a quorum with a minimum of one (1) Cadila Director and a minimum of one (1) Novavax Director. Each Director shall have one vote. No business shall be conducted at any meeting of Directors unless a quorum is present at the beginning of the meeting and at the time when there is to be voting on any business. In case of Board Meeting could not be conducted in spite of notices being issued on account of non availability of either Novavax or Cadila Directors, notices shall be again issued to all the Directors for conducting such meeting and if either Novavax or Cadila Directors are still unable to attend the same then the available Directors shall proceed and conduct such Board Meeting; provided that in each case, the other requirements of Article 8 are complied with.

8.4		In the event that that the Board does not reach a unanimous decision with respect to a matter, the matter shall be referred to the Chief Executive Officers of Cadila and Novavax. The Chief Executive Officers, each acting in his sole discretion, shall seek to resolve the issue. If the Chief Executive Officers are unable to resolve the issue within five (5) business days after the matter is referred to them, then a majority of the Board of Directors, including the Chairman of the Board shall determine the matter; except for

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		the matters specified in Schedule II. Matters specified in Schedule II shall require unanimous approval of the Shareholders and the Directors.

8.5		Subject to the limitations provided in the Companies Act, 1956, the Board shall be entitled to adopt resolutions without convening a meeting, and such resolutions shall in all respects have the same effect as resolutions adopted in a convened meeting, provided that all Directors were notified of the proposed resolution(s) in writing and approved such resolution(s) in writing. Such resolution(s) shall be produced and recorded at the next convened meeting of the Board.

8.6		The Board shall meet at least four times a year. Meeting dates including continued, adjourned and replacement meetings shall be set after reasonably considering the schedules of all board members. Thirty (30) days prior written notice of each meeting of the Board shall be sent with the agenda to each Director at his/her address as supplied to the COMPANY. A meeting of the Board may be convened on notice shorter than thirty (30) days but at least six (6) days in advance in cases where all Directors so agree in writing. Notices of Board meetings shall be sent by facsimile and confirmed by letter except that in the case of Directors not residing in India notices shall be given by courier or registered letter against receipt. Minutes of each meeting shall be dispatched by the COMPANY to all Directors within three (3) weeks after the meeting. For the initial 24 months, it is expected that the Directors will meet more frequently on an informal, unofficial basis by teleconference.

8.7		[Reserved.]

8.8		The directors shall not be required to hold any shares in the COMPANY.

8.9		Each Party may nominate a Director, and may seek removal of a Director whom it nominated, by giving notice to the COMPANY and the other Party. The appointment or removal of Directors under Sections 8.2 and this 8.9 takes effect on the date on which such Director is appointed or his resignation is accepted at the meeting of the Board of Directors.

		If any nomination or removal of a Director is to be approved by the Board and/or the Shareholders in a meeting, the COMPANY shall include the approval of the nomination or removal of a Director in the agenda for the immediately following Shareholders meeting or, if required, convene an extraordinary Shareholders meeting to approve such nomination or removal.

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8.10		The Party seeking removal of a director pursuant to Section 8.9 shall indemnify and keep indemnified the COMPANY against any claim connected with the Director’s removal from office.

8.11		[Reserved.]

8.12		If a quorum is not present within 30 minutes after the time specified for a Directors’ meeting in the notice of the meeting then it shall be adjourned to such date as shall be agreed by the Directors, provided that such date shall not be more than 30 days from the date of the adjournment. The meetings of the Board of Directors will be held in Ahmedabad, India, or at such other place as the Board of Directors may determine. The COMPANY shall give a notice of at least seven (7) days in advance of the date, time and place of the adjourned meeting to all the Directors.

8.13		A meeting of directors shall be adjourned to another time or date at the request of the majority of the Directors present at the meeting. No business may be conducted at a meeting after such an adjournment has been made. No more than one such adjournment may be made in respect of a meeting.

8.14		The Directors shall be permitted to invite to attend a meeting of Directors any person who is not a Director, but is required to attend in order to fully brief the Directors on the operational and financial status of or other matters of significance to the COMPANY.

8.15		No Director, Shareholder or director, officer, greater than 10% shareholder, or subsidiary, sister, parent or other affiliated entity of a Shareholder, or any person acting on behalf of any of the foregoing may directly or indirectly engage in any transaction (including without limitation the purchase, sale, lease, license, or exchange of any property, lending of funds, rendering of any service, establishment of any salary, other compensation or other terms of employment, purchase of any stock or security, or any business combination) with the COMPANY (a “Related Party Transaction”); provided, however, notwithstanding that it may constitute a conflict of interest, that a Related Party Transaction may be consummated if each of the following conditions are met:

8.15.1		the Related Party Transaction is not expressly prohibited by this Agreement; and

8.15.2		the Related Party Transaction is on terms that are on an arm’s length basis; and

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8.15.3		if the Related Party Transaction is a purchase, sale, lease, license or exchange of any personal or intellectual property and the aggregate value of property transferred under the transaction exceeds [* * *], the other Shareholder has consented to the Related Party Transaction; and

8.15.4		if the Related Party Transaction is a purchase, sale, lease, license or exchange of any real property and the aggregate value of property or payments to be made by the COMPANY over the term of the arrangement exceeds [* * *] and such additional amounts as reasonably agreed by the Parties, the other Shareholder has consented to the Related Party Transaction; and

8.15.5		if the Related Party Transaction is to loan cash or property to or by the COMPANY and the total value of the loan exceeds [* * *], the other Shareholder has consented to the Related Party Transaction, which consent can be withheld in such Shareholder’s sole discretion; and

8.15.6		if the Related Party Transaction is for services to or by the COMPANY and the aggregate annual amount of services to or by the COMPANY exceeds [* * *], the other Shareholder has consented to the Related Party Transaction; and

8.15.6.1		if the Related Party Transaction is for providing marketing services to or by the COMPANY and the aggregate amount of service to or by the COMPANY exceeds an annual amount to be reasonably agreed by the Parties, the other Shareholder has consented to the Related Party Transaction; and

8.15.7		if the Related Party Transaction is to establish salary, or other compensation or employment arrangements, and the aggregate annual amount per employee exceeds [* * *], the other Shareholder has consented to the Related Party Transaction; and

8.15.8		if the Related Party Transaction is any transaction for the sale to a Shareholder or director, officer, greater than 10% shareholder, or subsidiary, sister, parent or other affiliated entity of a Shareholder, or any person acting on behalf of any of the foregoing, by the COMPANY of stock or any other security of the COMPANY or any right, convertible or otherwise, related to the sale of stock or any other security of the COMPANY, either (A) the per share consideration for such sale for all parties is no lower than the price Novavax can subscribe to without any governmental approval and the COMPANY has provided to the other Shareholder twenty (20) business days’ prior written notice of the right to purchase its Pro Rata Portion of such stock, security or

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		right at the same price (as it shall be so determined) and on the same terms and conditions, which right such Shareholder (or a wholly owned subsidiary of such Shareholder) may exercise by notice to COMPANY within such 20-day period, where the “Pro Rata Portion” of a Shareholder means the percentage interest in the COMPANY held by the Shareholder or (B) the consideration for such sale (i) is non-cash consideration, or (ii) is lower than as set forth in clause (A), and in each case the other Shareholder has consented to the Related Party Transaction, which consent can be withheld in such Shareholder’s sole discretion; and

8.15.9		if the Related Party Transaction is any merger, consolidation, recapitalization, or business combination, or the sale or disposition or all or substantially all of the Company’s assets, the other Shareholder has consented to the Related Party Transaction, which consent can be withheld in such Shareholder’s sole discretion; and

8.15.10		if the Related Party Transaction does not fall within the transactions set forth in the preceding Sections 8.15.3 through 8.15.9 and the value of such transaction exceeds [* * *], the other Shareholder has consented to the Related Party Transaction.

8.16		The restrictions on Related Party Transactions set forth in this Agreement shall not apply to the funding of the Cadila Commitment (as defined in Section 11.2) toward the subscription to the Cadila Notes (as defined in Section 11.2) in accordance with Section 11.2.

Article 9

General Meetings and Resolutions

General Meetings of the COMPANY shall be held in Ahmedabad, India and shall be convened by the Chairman of the Board or a majority of the Directors or as set out in the Articles of Association of the COMPANY. The Chairman of the Board shall notify the Shareholders of the COMPANY of the meeting at least twenty-one days (21) days in advance, by facsimile and letter to their address on the records of the COMPANY.

Article 10

Chief Executive Officer and Employees

10.1

The COMPANY shall employ its own staff.

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10.2		The Board shall appoint the senior management of the COMPANY, including a Chief Executive Officer. Novavax shall use its commercially reasonable efforts to assist in the recruitment of the senior management. The Chief Executive Officer shall be responsible for the day-to-day business of the COMPANY and shall represent the COMPANY in accordance with the Management Policies as may be decided and agreed by the Board of Directors. The Chief Executive Officer will be based in Ahmedabad, India and shall report to the Board of Directors. His terms of appointment, remunerations, powers, duties, obligations, restrictions and authorities will be as per the agreement to be entered into by the COMPANY and the Chief Executive Officer.

10.3		[Reserved.]

10.4		The COMPANY shall be responsible for the salaries or wages paid to, and business expenses incurred by, the employees of the COMPANY and for the actions or omissions of such employees in their capacity as employees of the COMPANY. The COMPANY shall fully indemnify and keep indemnified the Shareholders against all losses, damages, actions, proceedings, costs, claims, demands, awards, fines, orders, expenses and liabilities whatsoever (including but not limited to salaries, wages, bonuses and other emoluments, all statutory contributions and all income tax and national insurance contributions) in relation to the employees arising directly or indirectly out of or in connection with their employment by the COMPANY.

Article 11

Financing/Capital Increase

11.1

The Shareholders shall make the following initial capital contributions to the COMPANY:

	(a)		Cadila shall contribute, by execution and delivery of, the Cadila License; and

	(b)		Novavax shall contribute, by execution and delivery of, the Novavax Licenses.

11.2

Cadila shall pay an aggregate sum of Rs 400,000,000 over the first three years after the Effective Date (the “Cadila Commitment”) toward the subscription of debt of COMPANY that is subordinated to all other debt and liabilities of the COMPANY (the

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“Cadila Notes”). The Cadila Notes shall carry an interest of 1% per annum and shall be repayable upon the expiry of 50 years from the date of disbursement. Provided, however, interest on the Cadila Notes shall be payable to Cadila only at the time of repayment of Cadila Notes. It is further agreed that on liquidation of the COMPANY, Novavax shall be entitled to its Pro Rata Portion of the Cadila Notes received by Cadila so as to ensure that Cadila and Novavax receive the proceeds in the appropriate ratio. The timing and amount of payments towards meeting the Cadila Commitment shall be based on the achievement by the COMPANY of the Milestones approved under Section 7.2. If (a) a Milestone is met and Cadila does not make the payment triggered by achievement of the Milestone within fifteen (15) calendar days, (b) a Milestone is not met, no new Milestones are approved unanimously by the Board, the COMPANY does not have the capital to meet its operating or product development needs, and Cadila does not make any further payments toward meeting the Cadila Commitment, or (c) upon the third anniversary of the Effective Date the full Cadila Commitment has not been funded by Cadila, Novavax would have the right (but not the obligation and exercised or not in its sole discretion) to terminate this Agreement and the Ancillary Agreements pursuant to a written termination notice to Cadila (the “Termination Notice”); provided, however, that the parties shall remain liable for (i) any liabilities and obligations accrued as of the date of such termination, (ii) any obligations under Article 18 and (iii) liability for breach of any representations and warranties under this Agreement. Cadila, its subsidiary Satellite Overseas (Holdings) Limited (“SOHL”) and any other members of Cadila’s Group (collectively, the “Cadila Parties”) shall have the right (but not the obligation and exercised or not in such parties’ sole discretion), exercisable by written notice to Novavax (the “Sale Notice”) within fifteen (15) calendar days after delivery to Cadila of the Termination Notice (the “Sale Election Period”), to sell to Novavax all shares of Common Stock of Novavax then held by the Cadila Parties up to an aggregate 12,500,000 shares at a per share price of $0.88 (appropriately adjusted for any stock splits, reverse stock splits, stock dividends, combinations, recapitalizations or the like). In the event the Cadila Parties do not elect to sell such shares to Novavax, this Agreement and the Ancillary Agreements shall terminate at the end of the Sale Election Period, all of the shares in the COMPANY held by Novavax shall be cancelled automatically without further action by the COMPANY or either Party, and Novavax shall promptly return to the COMPANY for cancellation all share certificates representing such shares. In the event the Cadila Parties elect to sell such shares to Novavax, the closing of the transactions contemplated by the Termination Notice (including the termination of this Agreement) shall be conditional upon and be consummated simultaneously with the transactions

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contemplated by the Sale Notice on a mutually agreed date no later than fifteen (15) calendar days after delivery to Novavax of the Sale Notice.

11.3		Pre-emptive Right. Except with respect to Exempt Issuances, for so long as a Shareholder holds an aggregate number of Shares equal to or greater than five percent (5%) of the then issued and outstanding Shares (the “Threshold Amount”), the Shareholder shall have the right to purchase its Pro-Rata Portion of any new Shares that the Company may from time to time propose to issue or sell to any party.

11.3.1		Additional Issuance Notices. The COMPANY shall give written notice (an “Issuance Notice”) of any proposed issuance or sale described in Section 11.3 to the Shareholders. The Issuance Notice shall, if applicable, be accompanied by a written offer from any prospective purchaser seeking to purchase Shares, to the extent known to the Company at the time, and shall set forth the material terms and conditions of the proposed issuance, including, without limitation:

	(i)		the number and description of the new Shares proposed to be issued and the percentage of the COMPANY’s outstanding equity interests such issuance would represent;

	(ii)		the proposed issuance date; and

	(iii)		the proposed purchase price per share.

11.3.2		The COMPANY shall provide written notice to Shareholders if the terms set forth in the Issuance Notice are updated or changed in any material respect (a “Material Update”) as the details listed in Section 11.3.1 (i), (ii) and (iii) are known.

11.3.3		Exercise of Pre-emptive Rights. A Shareholder shall, for a period of fifteen (15) business days following the initial receipt of an Issuance Notice (the “Exercise Period”), have the right to elect irrevocably to purchase up to its Pro Rata Portion of the new Shares at the purchase price and on the other terms set forth in the Issuance Notice by delivering a written notice to the Company. If the Company provides a Material Update, the Exercise Period shall be extended by five calendar days from the date of receipt of the Material Update, if such extension is longer than the expiration of the Exercise Period. The closing of any purchase by a Shareholder shall be consummated concurrently with the consummation of the issuance or sale described in the Issuance Notice; provided, however that, the closing of any purchase by Shareholder may be extended beyond the closing of the transaction described in the Issuance Notice to the

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		extent necessary to obtain required government approvals and other required third party approvals or consents (and the Company shall use its reasonable best efforts to obtain such approvals and consents). A Shareholder may purchase Shares under this Section 11.3 indirectly through a member of the Shareholder’s Group that is a wholly owned subsidiary.

11.3.4		Sales to the Prospective Buyer. If the Shareholder fails to elect to purchase all or part of its Pro Rata Portion allotment of the new Shares described in the Issuance Notice within the time period described in Section 11.3.3, the Company shall be free to complete the proposed issuance or sale of new Shares described in the Issuance Notice at a price and on other terms no less favorable to the Company than those set forth in the Issuance Notice. If the Company does not enter into an agreement for the sale of such new Shares within forty (40) business days after the expiration of the time period described in Section 11.3.3, or if such agreement is not consummated within sixty (60) days after the execution thereof, the pre-emptive right provided hereunder shall be deemed to be revived and such new Shares shall not be issued or sold unless first reoffered to the Shareholders in accordance with this Section 11.3.

11.3.5		“Exempt Issuances” means issuances in which Shares are issued (i) as a dividend, stock split or other distribution payable pro rata to all holders of Shares, (ii) to employees, officers, directors or consultants of the Company pursuant to any employee benefit plans or programs approved by the Board or any committee thereof, to the extent that the total number of Shares issuable pursuant to such plans or programs does not exceed 15% of the Shares outstanding on the date hereof, (iii) upon the conversion or exercise of any options, warrants or other rights to purchase Shares (A) outstanding on the date hereof or (B) issued in accordance with the foregoing clause (ii), (iv) as consideration for a merger, consolidation or purchase of assets; (v) in connection with any strategic partnership or joint venture (the primary purpose of which is not to raise equity capital), and (vi) issuances for a per share consideration that is lower than the price Novavax can subscribe to without any governmental approval unless Novavax is able to, and does, obtain such approval without causing a delay to the transaction contemplated by the Issuance Notice; provided, further that if Novavax timely provides an irrevocable election notice, Novavax may participate in the transaction on the same terms and conditions as if it had participated at the closing of the transaction described in the Issuance Notice except that Novavax will participate upon (and only if) it receives the appropriate governmental approval within 90 days of such closing and shall use commercially reasonable efforts to obtain such approval promptly.

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11.3.6		“Pro Rata Portion” with respect to a Party means the proportion that the number of shares of the COMPANY issued and held by the Party, and any wholly owned subsidiaries of such Party, bears to the total number of shares of the COMPANY then issued and outstanding.

11.4		Except as otherwise provided for herein, the COMPANY shall be responsible for procuring any additional funds needed other than the issued and paid-up share capital.

11.5		No Party shall be under any obligation to guarantee the repayment of borrowings contracted by the COMPANY.

11.6		A separate Bank account in the name of the COMPANY will be opened in one or more banks and the Board shall authorize the Chief Executive Officer or any Director or other official of the COMPANY to operate the same with prescribed limits.

11.7		Subject to the express terms and conditions of this Agreement, the Chief Executive Officer may be authorized by the Board to make decisions on any expenses, purchases or commitments on behalf of the COMPANY and will have the freedom to sign cheques up to the limit that may be decided by the Board as per the Standard Operating Procedure (SOP) of the COMPANY in the said context. However if any transactions or commitments are above the aforesaid limit, specific approval of the Board will be required. The Board may also decide sub limits of financial authorities for such other key officials of the COMPANY who may be authorized to operate Bank accounts of the COMPANY.

Article 12

Bookkeeping, Accounting and Reporting

12.1		The books and records of the COMPANY shall at all times be accurately, completely and consistently maintained in English in accordance with Institute of Chartered Accountants of India (ICAI). Each of the Parties or their duly authorized representatives shall have the right, to review and examine the books and records of the COMPANY for any legitimate purpose related to the Business or this Agreement at any time during normal business hours in a manner not disruptive to the COMPANY.

12.2		The COMPANY shall provide to each of the Parties, quarterly (within 10 (ten) days after the end of each quarter) or upon request, reports on the financial status of the COMPANY including balance sheet, profit and loss statement and cash flow

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		statements. The Chief Executive Officer shall provide a monthly report containing performance of the COMPANY during the month along with data pertaining to manufacturing, sales, cash flow, profit and other critical areas to all the Directors of the COMPANY. Such a report shall be submitted within 10 (ten) days after the end of each quarter to all the Directors of the COMPANY. Upon request of Novavax, the COMPANY will provide financial statements based on International Accounting Standards.

12.3		Unless otherwise agreed by the Parties, the COMPANY shall have 1 (one) or more statutory auditor/s. The statutory auditor shall have the powers and duties specified under the relevant Indian laws and regulations and the Statutes. The Parties agree to vote their shares in the COMPANY so as to cause the appointment of mutually decided nominated auditor.

Article 13

Steering Committee

13.1		Within thirty (30) days after the Effective Date, the Parties shall form a Steering Committee for the development of products by the COMPANY. The Steering Committee shall consist of an equal number of representatives of each Party and the COMPANY and shall be responsible for overall direction and management of the development program. The Steering Committee shall report to the Board of Directors. The operation and authority of the Steering Committee shall be as follows:

13.2		Development Plans. The Steering Committee shall work with the management of the COMPANY in the development and commercialization of Products. The Steering Committee shall periodically review development and commercialization plans and progress made under such plans from a strategic and operational perspective and suggest modifications.

13.3		Review of Activities. The Steering Committee shall periodically review the results of each development plan to monitor the COMPANY’s progress and whether the Parties are providing their commitments, if any, of both human and financial support for the research and development of Products and the fulfillment of all contractual obligations between the Parties.

13.4		Representation. Cadila, Novavax and COMPANY shall each appoint three (3) representatives as their representatives to serve on the Steering Committee. It is the

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		intent that such representatives will be relevant function heads in the respective organizations. The representatives of a Party may be changed from time to time at the discretion of that Party upon written notification by the Party making such change to the other.

13.5		Meetings. The Steering Committee shall meet from time to time as determined by the Steering Committee members. It is expected that the Steering Committee shall meet at least monthly for the first nine months by conference call, bimonthly thereafter and, in any case, in person at least once in each calendar quarter. Consultants and non-member employees of the Parties may attend meetings of the Steering Committee as required to further the development program. COMPANY will bear all expenses associated with attendance of its employees at any in person meetings. Any conference call meeting will be held by means of telephone conference or similar communications equipment by means of which all persons participating in the meeting can hear each other.

13.6		Decisions. Decisions of the Steering Committee shall be made by unanimous vote, with the representatives of each Party having one collective vote. If the Steering Committee is unable to reach a unanimous vote on any issue, then the issue shall be referred to the Board of Directors, whose decision shall control the matter in accordance with the terms of this Agreement.

Article 14

Profits

The Board will consider the following before recommending any dividends:

(a)		Business Plan;

(b)		Needs of the Business; and

(c)		Dividend Policy: The dividend on shares shall only be declared or paid by the COMPANY for any Financial Year out of the profits of the COMPANY for that Financial Year, arrived at after providing for depreciation as required under the Companies Act 1956 or out of the undistributed profits of the COMPANY for previous Financial Years, arrived at after providing for depreciation in accordance with the provisions of the Companies Act. The Board will normally follow prudent corporate practice of distribution of about [* * *] of the distributable profits for the year after providing for depreciation as a dividend.

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Article 15

Environmental and Health and Safety (EHS) Matters

The COMPANY shall at all times comply with EHS and / or any such equivalent law in existence in respect of EHS Matters and keep all the required EHS Permits in full force and effect.

Article 16

Term and Termination

16.1		This Agreement will terminate upon the liquidation, dissolution or winding up of the COMPANY.

16.2		Upon termination of this Agreement, the rights granted to the COMPANY under Section 23.5 shall terminate and the COMPANY shall discontinue the use of trademark “Cadila” or “Novavax” as the case may be and shall not claim any right, goodwill in the said name or use it in any way whatsoever.

Article 17

Taxes

All income taxes payable under the applicable laws required to be paid by a Party arising out of or in connection with this Agreement shall be for the account of that Party. Any sum required under Indian tax laws to be withheld by the COMPANY for the account of the relevant Party from payments due to that Party hereunder shall be withheld and promptly paid by such COMPANY to the competent tax authorities.

Article 18

Confidentiality

18.1

The Parties anticipate that under this Agreement and under the Licenses, the Supply Agreements and the Technical Services Agreements (collectively, the “Ancillary Agreements”) each Party will provide confidential and/or proprietary information to the COMPANY and/or other Party(s) and the COMPANY will provide confidential and/or proprietary information to the Parties. Each Party and the COMPANY agrees that it shall at no time, either during or after the term of this Agreement and the Ancillary

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		Agreements, use, publish or disclose to any third party any “Confidential Information” of any other Party or of the COMPANY (with respect to any Parties) disclosed to it by such other Party or the COMPANY, as the case may be, except as and to the extent expressly authorized under this Agreement. For purposes of this Agreement and the Ancillary Agreements, and subject to the exclusions set forth below, “Confidential Information” shall mean any confidential and/or proprietary information or other Know-How to the extent (A) marked or identified in writing as Confidential Information by the disclosing party (upon or within thirty (30) days of initial disclosure) or is of a type, and is disclosed under circumstances, for which the recipient would reasonably be expected to know such information or other Know-How was confidential in nature, and (B) relating to the Business or disclosed for the purpose of entering into the Business, forming the COMPANY or conducting the Business. The provisions of this Agreement and the Ancillary Agreements shall be considered Confidential Information of each Party. Confidential Information shall in any event exclude any information or other Know-How which (i) is or becomes publicly available through no fault of the receiving party; (ii) is lawfully obtained from third parties who received the information or other Know-How from a person or entity that was not bound by an obligation not to disclose such information or Know-How; or (iii) is or becomes known or developed by the receiving party independently of (and without use of or reference to) the Confidential Information of the disclosing party.

18.2		Protection of Confidential Information. Each Party and the COMPANY agree to maintain the confidential nature of any Confidential Information of the disclosing party disclosed to it hereunder, and to use the same degree of care to protect the confidentiality such Confidential Information which such party uses to protect its own confidential or proprietary information of a similar nature, but in no event less than reasonable care. Disclosures of Confidential Information to and between each Party shall be restricted to those having a need or right to know.

18.3		Permitted Use and Disclosure. Each Party and the COMPANY shall have the right to use any Confidential Information disclosed to it hereunder for purposes of exercising any rights or licenses granted to it hereunder and under the Ancillary Agreements and for purposes of performing any of its obligations hereunder and thereunder (which, for the COMPANY, shall include the right of the COMPANY to use such Confidential information for the Business). Furthermore, each Party and the COMPANY shall have the right to disclose Confidential Information (i) to applicable patent offices solely for the purpose of filing, prosecuting and maintaining Patents, (ii) to applicable regulatory

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authorities for the purpose of filing and pursuing regulatory (iii) as necessary to the extent prosecuting or defending litigation, (iv) to employees, consultants, contractors, agents, permitted sublicensees, licensees, professional advisors and commercial partners who are bound by obligations of confidentiality and non-use at least as protective as those contained herein and solely for purposes of the Business (or otherwise to exercise rights or licenses or to perform obligations under this Agreement and the Ancillary Agreements).

18.4

Disclosure Required by Law. This Article 18 shall not restrict or limit the use or disclosure of Confidential Information to the extent required by applicable law, regulation or legal process, including the rules and regulations of a stock exchange or stock market; provided, however, that, to the extent practicable, the party required to make such disclosure shall promptly notify the owner of such information prior to making any such disclosure and shall provide reasonable cooperation to the owner of such information, at the owner’s expense, to assist the owner in seeking a protective order or other appropriate remedy; and provided, further, that if such protective order or other remedy is not obtained in a timely manner, the party required to make such disclosure shall have the right to disclose such information, but shall disclose only that portion of the information which it is advised by counsel it is legally required to disclose, and shall exercise its reasonable best efforts, in consultation with the owner of such information, to obtain assurance that confidential treatment will be accorded such information to the extent permitted by law, rule or regulation. In addition the parties recognize that Novavax is a publicly traded company and, as such, is subject to requirements under the U.S. federal securities laws and regulations to make periodic filings with the U.S. Securities and Exchange Commission which may include information about this Agreement and the COMPANY’s activities.

Article 19

Reserved

Article 20

Events of Default

20.1

Each Shareholder shall be deemed to have delivered a Transfer Notice with respect to all of its shares to the other Shareholder, and the other Shareholder shall have the right

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		to purchase such shares in accordance with the procedures set forth in Section 6.4, upon happening of any of the following events of default:

20.1.1		It commits a material breach of any obligation under this Agreement and fails to remedy such breach within sixty (60) business days of notice to remedy the breach delivered by the other Shareholder;

20.1.2		A receiver, manager, administrative receiver, trustee, custodian or administrator (or such other similar thing in any other jurisdiction) being appointed for such Shareholder or over all or any part of its undertaking or assets;

20.1.3		An insolvency or bankruptcy proceeding being commenced against such Shareholder, or such Shareholder commencing such proceeding, or such Shareholder ceasing to conduct business in the normal course or making an assignment for the benefit of its creditors;

20.1.4		Such Shareholder entering into liquidation or dissolution (or such other similar thing in any other jurisdiction) (other than a Voluntary Liquidation for the purpose of a bona fide scheme of solvent, amalgamate or reconstruction); or

20.1.5		unless otherwise agreed by all the Shareholders, any Change in Control of any Shareholder. “Change in Control” means (a) the sale of all or substantially all of the assets or business of the Shareholder, or (b) any merger, consolidation, recapitalization, or business combination of the Shareholder, or (c) the sale of capital stock or other equity securities of the Shareholder, or (d) any other transaction or series of transactions; provided that for each of (b) through (d), the result of which is that the stockholders of the Shareholder prior to such transaction do not, immediately following any such transaction(s), directly or indirectly hold voting securities of the surviving or purchasing entity sufficient to elect a majority of the board of directors of such surviving or purchasing entity.

20.2		The deemed Transfer Notice has the same effect as a Transfer Notice, except that:

20.2.1		The valuation of the shares held by the defaulting Shareholder, and the price to paid by the other Shareholder if such Shareholder exercises its right to buy such shares, shall be determined in accordance with Article 21;

20.2.2		The defaulting Shareholder does not have a right of withdrawal following a valuation; and

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20.2.3

On the completion of any sale in accordance with this Article 20, the other Shareholder is not required to procure the discharge of any security given by the defaulting Shareholder or to procure the release of any debts of the COMPANY to it.

Article 21

Valuation of Shares

21.1		The valuation of shares to be transferred under Article 20 to the other Shareholder shall be determined as follows: Each Shareholder shall select one investment bank of international reputation, and each investment bank shall determine the fair market value of the shares and deliver its written valuation to the Shareholders within thirty (30) days after the date of the deemed delivery of the Transfer Notice under Section 20.1. In the event the two investment banks do not agree on a fair market value, the fair market value shall be the average of the two valuations, except that if one valuation is higher than the other valuation by an amount greater than ten percent (10%) of the lower valuation, the two investment banks shall select a third investment bank of international reputation, which shall determine the fair market value independently of the other two investment banks and without knowledge of the valuation of the other two investment banks within thirty (30) days of appointment, and the fair market value of the shares shall be the average of the two valuations that are closest to each other (whether such valuations are the two highest valuations or the lowest two valuations), and the third valuation shall be disregarded. The third investment bank shall not have performed services for either party within the five (5) years preceding its appointment. Each Shareholder shall pay the fees and expenses incurred in connection with the valuation by the investment bank selected by it. The Shareholder who appointed the investment bank whose valuation was disregarded shall pay the fees and expenses incurred in connection with the valuation by the third investment bank, unless the valuation of the third investment bank was disregarded, in which case each Shareholder shall pay one-half of the fees and expenses incurred in connection with the valuation by the third investment bank.

21.2		Each investment bank shall base its valuation on the following assumptions:

21.2.1		The sale is between a willing seller and a willing buyer;

21.2.2		The shares are sold free of all restrictions, liens, charges and other encumbrances; and

21.2.3		The sale is taking place on the date on which the valuation of the shares in determined.

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Article 22

Restrictions on the Parties

22.1		Each Party hereby further agrees and undertakes that during the Term it shall not, and shall procure that its affiliates shall not, whether directly or indirectly, by themselves or in association with or through any person, in any manner whatsoever do or undertake or attempt to do or undertake any of the following activities:

22.1.1		Tender for, canvass, solicit, entice away or attempt to canvass, solicit or entice away from the Company, any employee of the Company and/or any of its affiliates, whether or not such employee would commit a breach of contract by reason of such act; or

22.1.2		Induce, procure or endeavour to induce any person who was an employee of the Company and/or any of its affiliates to leave the service of, or cease to provide service to, the Company or such affiliate; or

22.1.3		Provide or offer positions of employment/consultancy or any managerial, financial participation to any of the employee of the Company and/or any of its affiliates; or

22.1.4		Otherwise interfere in any manner with the contractual, employment or other relationship of the employee of the Company and/or any of its affiliates on the one hand and the Company and/or any of its affiliates on the other hand; or

22.1.5		Accept into employment or otherwise engage or use the services of any employee of the Company and/or any of its affiliates who is or was in the twelve (12) months preceding the date of termination of this Agreement, an employee of, or under contract of services to, the Company and/or any of its affiliates; or

22.1.6		Solicit or endeavour to entice away from dealing with the Company, any person who is or was at any time a customer or supplier of the Company.

22.2		Other than engaging in the Business through the COMPANY, during the term of this Agreement and for one year thereafter, Cadila shall not, directly or indirectly (including, without limitation, by the granting of licenses or similar rights), engage in, promote, finance or manage research, development, manufacturing or commercialization in any other vaccine products for seasonal or non-seasonal influenza in the Territory. Other than engaging in the Business through the COMPANY, for the term of the Agreement and for one year thereafter, Novavax shall not, directly or indirectly (including, without limitation, by the granting of licenses or similar rights),

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		engage in, promote, finance or manage research, development, manufacturing or commercialization in any therapeutic vaccine products for hepatitis or cancer in the Territory.

22.3		The undertakings in this Article are given by each Shareholder to the other and to the COMPANY and apply to actions carried out by each Shareholder (or any persons in its Group) in any capacity and whether directly or indirectly, on behalf of the Shareholder (or any persons in its Group), on behalf of any other person or jointly with any other person.

22.4		Each of the covenants in this Article 22 is considered fair and reasonable by the Parties, but if any such restriction shall be found to be unenforceable but would be valid if any part of it were deleted or the period or area of application reduced, the restriction shall apply with such modifications as may be necessary to make it valid and effective.

22.5		Each Party shall, to the extent that it is able to do so, exercise all voting rights and other powers in relation to persons in its Group to procure that such persons comply with the terms of this Article 22.

22.6		Notwithstanding any provision to the contrary in this Agreement, the provisions of this Article 22 shall not apply to a party with respect to any former employee of such party.

Article 23

Licenses

23.1		Licenses from Novavax to COMPANY. Novavax shall execute and deliver the Novavax Licenses on the Completion Date.

23.2		License from Cadila to COMPANY. Cadila shall execute and deliver the Cadila License on the Completion Date.

23.3		Election to Change Additional Novavax Products. The COMPANY may elect to change one or more of the targeted viruses of the Additional Novavax Products that COMPANY desires to develop and commercialize, by providing a written notice to Novavax, identifying the new desired targeted virus and disease indication and the targeted virus to be removed. The requested change requires the approval of Novavax which it can grant or withhold in its sole discretion. Upon receipt of Novavax’s written approval, the Seasonal and Other Vaccine License shall be amended to change the definition of Licensed Product accordingly. COMPANY will be solely responsible for

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		all research, development, manufacturing and commercialization of all Additional Novavax Products in the Territory and Novavax will not be obligated to provide any assistance or services related to such products.

23.4		Technical Services. Novavax and Cadila will execute and deliver the Technical Services Agreements pursuant to which each will provide certain technical services to the COMPANY related to the Novavax Products and Cadila Products.

23.5		Trademark License. Each Party shall grant and hereby grants to the COMPANY a non-exclusive license to use its trademark “Cadila” or “Novavax” (the “Marks”) solely upon Products (and materials relating thereto) to indicate that the COMPANY is a joint venture between Cadila and Novavax. The license granted under this Section 23.5 shall include the right to grant sublicenses solely in connection with the grant of an approved sublicense under a License to commercialize a Product, and any attempt to otherwise grant or authorize any sublicense shall be null and void. Novavax shall not use the trademark “Cadila” in isolation during the term of this Agreement and thereafter. Cadila shall not use the trademark “Novavax” in isolation during the term of this Agreement and thereafter. All uses of the Marks by the COMPANY shall comply with all applicable laws and regulations (including, without limitation, those laws and regulations particularly applying to the proper use and designation of trademarks in the applicable countries). The ownership and all goodwill accruing to the Marks arising directly from its use by the COMPANY shall vest in and inure to the benefit of the respective owner of the Mark. The COMPANY and each Party hereby acknowledges the other Party’s ownership rights in their respective corporate logo owned in the form existing as of the Effective Date, and accordingly, agrees that at no time during the term to challenge or assist others to challenge such corporate logo owned in the form existing as of the Effective Date, or the registration thereof or attempt to register any trademarks, marks or trade names confusingly similar to such corporate logo owned in the form existing as of the Effective Date.

Article 24

Intellectual Property Matters

24.1

Inventions or Discoveries. Except to the extent expressly provided for otherwise in the Licenses and any other agreement between the Parties, each of COMPANY, Novavax and Cadila shall retain ownership of any Patents, Know-How and other intellectual property rights generated by such party under this Agreement or in connection with the

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Joint Venture Business, as such ownership (and inventorship where applicable) are determined in accordance with applicable laws, subject in any event to the licenses expressly granted in the Licenses. Except to the extent expressly provided for otherwise in the Licenses and any other agreement between the Parties, in the event two or more of the Parties hereunder jointly generate any Patent or Know-How, and therefore are considered joint owners thereof under applicable law, such Parties shall retain joint ownership thereof (subject in any event to the licenses expressly granted herein, in the Licenses or in any Ancillary Agreement) and shall reasonably cooperate with respect to the filing, prosecution, maintenance and enforcement with respect thereto.

Article 25

Warranties and Representations

Each Party hereby represents and warrants to the other Party and the COMPANY that:

25.1		It is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has the corporate power to enter into this Agreement and to perform its obligations hereunder;

25.2		It has obtained all corporate authorisations and approvals necessary to execute and to deliver this Agreement and to perform its obligations hereunder;

25.3		It has duly executed and delivered this Agreement;

25.4		The execution and delivery of this Agreement, any Ancillary Agreements (and any other agreements between the Parties or between either Party and the Company in connection with this Agreement) and the performance of its obligations, and exercise of its rights, hereunder or under any such Ancillary Agreement or other agreement do not and will not:

	(a)		Conflict with any of the provisions of its constitutive documents or of any resolutions made thereunder; or

	(b)		Result in a breach of any of the provisions of, or constitute a default under, or conflict with any agreement to which it is a party; or

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(c)

Result in any claim, action or proceeding brought by a Third Party who has or had an agreement with it prior to the Completion Date which claim, action or proceeding relates to such agreement.

25.5		As of the Effective Date, it has sufficient rights to grant the licenses granted to the COMPANY hereunder.

25.6		Cadila hereby represents and warrants to Novavax that, as of the Effective Date and immediately prior to the Completion:

25.6.1		The COMPANY is duly organized, validly existing and in good standing under the laws of India and has the corporate power to own its property and to conduct the Business and is duly qualified to do business in the jurisdiction where it operates and enter into the Ancillary Agreements (and any other agreements between the COMPANY and one or more of the parties contemplated by this Agreement) and perform the transactions and activities contemplated hereby and thereby;

25.6.2		The COMPANY has obtained all material licenses, permissions, authorisations and consents required for carrying on the business effectively in the places and in the manner in which such business is carried on prior to the Completion. Such licenses, permissions, authorisations and consents are in full force and effect, are not limited in duration or subject to any unusual or onerous conditions and have been complied with in all respects. There are no circumstances which indicate that any such licenses, permissions, authorisations or consents will or are likely to be revoked or not renewed, in whole or in part, in the ordinary course of events (whether as a result of the Agreement or otherwise);

25.6.3		The COMPANY has not conducted any business, entered into any contracts or incurred or assumed any liabilities or obligations before the Effective Date. There are no other commitments or contracts or arrangements entered into by Cadila or the COMPANY, which may be in breach of the terms of this Agreement or the obligations of Cadila hereunder;

25.6.4		The COMPANY is not engaged in any activity in which foreign investment by a non-resident is restricted or prohibited.

25.6.5		The COMPANY does not have any subsidiaries within the meaning of Section 4 of the Companies Act, 1956 nor own any direct or indirect shareholding interest in any other entity or body corporate.

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25.6.6		The statutory books, minute books, register of members and other registers of the COMPANY, as required under any applicable law, have been properly and accurately maintained in all material respects and contain full and accurate records of all matters required to be entered under applicable law, including all issuances and transfers of shares or other securities of the COMPANY and, as regards minutes books, all resolutions passed by the directors and the shareholders of the COMPANY.

25.6.7		Immediately after the Completion Date, the only Shareholders of the COMPANY will be Cadila and Novavax; and

25.6.8		The execution and delivery of any Ancillary Agreement by COMPANY and any other agreement to which it is a party that is contemplated by this Agreement and the performance of its obligations under such Ancillary Agreements and other agreements in accordance with the terms thereof have been approved by all requisite corporate and applicable government approvals and do not and will not conflict with any of the provisions of its constitutive documents or of any resolutions made thereunder; result in any breach of any of the provisions of, or constitute a default under, or conflict with any agreements to which it is a party.

25.7		The COMPANY is entitled and authorised to issue the Shares in the manner and upon the terms and conditions contained in this Agreement. There are no options, agreements or understandings (exercisable now or in the future and contingent or otherwise) which entitle or may entitle any person to create or require to be created any encumbrance over any of the Shares once issued by the COMPANY. Other than as contemplated by this Agreement, there is no agreement, arrangement, scheme or obligation requiring the creation, allotment, issue, transfer, redemption or repayment of, or the grant to a person of the right (conditional or not) to require the allotment, issue, transfer, redemption or repayment of, any Shares in the share capital of COMPANY (including an option or right of pre-emption).

25.8		Novavax shall acquire a valid and marketable title to the Shares to be issued pursuant to this Agreement and will be, when delivered, duly authorised, validly issued, and will be free and clear of all encumbrances and third party rights and interests.

25.9		All of the issued and paid-up Shares are, and when issued, sold and delivered in accordance with the terms of this Agreement will be, duly authorized, validly issued, and free of pre-emptive rights (except as expressly set forth herein). The issuance, sale and delivery of the Shares to Novavax will be duly authorized on or prior to the

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		Completion Date by all necessary corporate and shareholder action on the part of the COMPANY.

25.10		Each party will indemnify, defend and hold harmless the COMPANY and the other Party from and against any and all liability, loss, damage or expense (including without limitation reasonable attorneys fees) they may suffer as the result of any third party claims, demands and actions (collectively, “Losses”) to the extent such Losses result from the breach of any of the representations or warranties set forth in this Article 25.

EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES (AND EACH PARTY HEREBY EXPRESSLY DISCLAIMS) ANY OTHER REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT, OR FITNESS FOR A PARTICULAR PURPOSE, AND ANY WARRANTIES THAT MAY ARISE FROM COURSE OF PERFORMANCE, COURSE OF DEALING, OR USAGE OF TRADE.

Article 26

Governing Law

This Agreement shall be governed by and construed in accordance with the laws of India.

Article 27

Dispute Resolution

Any dispute arising between the Parties out of or in connection with the implementation or interpretation of this Agreement shall, if not settled amicably within ninety (90) days from the date that the dispute arose, be finally settled by three (3) arbitrators. Each Party shall be entitled to appoint one (1) arbitrator and the two (2) so appointed shall appoint the third arbitrator in accordance with the Indian Arbitration and Conciliation Act, 1996. It is hereby agreed that Part I of the Indian Arbitration and Conciliation Act, 1996 shall not apply to the arbitration under this Agreement. The language of the arbitration proceedings shall be English and its place shall be Singapore. The arbitral award or determination shall be final and subject to no appeal and shall deal with the question of costs of arbitration and all matters related thereto.

The Parties agree that it would be impossible or inadequate to measure and calculate their

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damages from any breach of the Agreement though great and irreparable. Accordingly, each Party agrees that if the other Party breaches this Agreement, the non-breaching party will have available, in addition to any other right or remedy available, the right to obtain an injunction from a court of competent jurisdiction restraining such breach or threatened breach and specific performance of any provision of this Agreement.

Article 28

Force Majeure

Neither Party shall be in default of this Agreement by reason of its failure or delay in complying with its obligations under this Agreement if such failure or delay is caused by matters out of its reasonable control, including but not limited to acts of God, change in laws and regulations, strikes, lock-outs, fire, riots, or civil war or civil commotion; provided that such Party gives the other Party prompt written notice of the failure or delay in performance and the reason therefor and uses its reasonable efforts to limit the resulting failure or delay in its performance.

Article 29

Miscellaneous

29.1		In no event shall either Party be liable under any theory of liability (whether in contract, tort, statute or otherwise) for any indirect, special, exemplary, punitive, incidental or consequential damages of any kind, or for any loss of profits, loss of revenue, loss resulting from interruption of business or loss of use or data, arising out of or relating to this Agreement or the subject matter hereof, however caused, even if the other Party has been advised of or should have known of the possibility of such damages.

29.2		Except as expressly stated in this Agreement, whether or not the transactions contemplated hereby are consummated, each of the Parties shall pay the fees and expenses of its own counsel, accountants or other experts, and all other expenses incurred by such Party in connection with the negotiation, preparation and execution of this Agreement and the transactions contemplated hereby, except that the cost (other than attorneys’ fees) of the preparation of this Agreement and its Annexes if any shall be equally shared by Cadila and Novavax. The COMPANY shall bear the expenses of its formation.

29.3		Any notice, request, demand, waiver, consent, approval or other communication permitted or required under this Agreement (“Notice”) will be in writing, will refer

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		specifically to this Agreement and will be deemed given only if sent by electronic mail (with receipt confirmed), facsimile transmission (with transmission confirmed) or by an internationally recognized delivery service that maintains records of delivery, addressed to the Parties at their respective addresses specified on the signature page hereto or to such other address as the Party to whom notice is to be given may have provided to the other Party in accordance with this Section 29.3. Any notice delivered by electronic mail or facsimile will be confirmed by a hard copy delivered as soon as practicable thereafter by an internationally recognized overnight delivery service. Such Notice will be deemed to have been given on the second Business Day (at the place of delivery) after deposit with an internationally recognized delivery service. This Section 29.3 is not intended to govern the day-to-day business communications necessary between the Parties in performing their obligations under the terms of this Agreement.

29.4		No amendment or waiver of any provision of this Agreement, and no consent to any departure therefrom, shall be effective unless the same shall be in writing and signed by an authorized representative of each Party, and such waiver or consent shall be effective only for the specific purpose for which it is given. No failure on the part of a Party to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies provided for in this Agreement are cumulative and are not exclusive of any remedies provided for by law.

29.5		If any of the provisions of this Agreement are found to be inconsistent with, or void under, applicable laws, the validity of the remaining provisions shall not thereby be affected. In such a case the Parties shall re-negotiate the ineffective provision in good faith in order to replace it with a provision affording the same rights, obligations and economic benefits to the Parties and the COMPANY as the ineffective provision.

29.6		This Agreement and the documents executed and delivered on the date hereof pursuant hereto or in connection herewith, contain the entire agreement among the Parties with respect to the matters addressed herein and therein and supersede all prior representations, inducements, promises or agreements, oral or otherwise, which are not embodied herein or therein.

29.7		Except in connection with a transfer of shares of the COMPANY expressly permitted hereunder, this Agreement and all rights and obligations hereunder may not be transferred or assigned by any Party to any person without the prior written consent of

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		the other Party. Any transfer or assignment without such consent shall be null and void. Notwithstanding the foregoing, the Parties expressly agree that Satellite Overseas (Holdings) Limited or any other member of Cadila’s Group that holds shares of the COMPANY are intended third-party beneficiaries with the right to enforce the terms and conditions of Section 11.2.

29.8		(a) Any acts, deeds or anything which is not covered under this Agreement pertaining to the COMPANY and its technical, commercial or any other activities shall be discussed by the Parties separately at the relevant point of time and shall be reduced to writing and signed by way of separate agreement, wherein such agreement shall form part of this Agreement.

		(b) The Parties will have the right to amend, modify and change the terms and conditions of this Agreement by way of a separate or supplementary agreement wherein such additional agreement will be part of the this Agreement; provided, however, that this Agreement may be amended from time to time without such separate or supplementary agreement as necessary to reflect (1) the admission to the COMPANY of one or more new Shareholders in accordance with this Agreement, or any other adjustments in the ownership interests of the Shareholders in connection with capital contributions or as otherwise appropriate in accordance with the terms and conditions of this Agreement or (2) any decrease in the authorized share capital or any increase in the authorized share capital to a number not in excess of three times the issued share capital..

		(c) Nothing in this Agreement shall confer upon any person any right to be employed or to continue employment by the COMPANY or any person in its Group or to interfere in any manner in any right of the COMPANY or any person in its Group to terminate such employment at any time.

29.9		Each Party agrees to execute, deliver and file or cause to be executed, delivered and filed such further documents and instruments, and to obtain such consents, authorizations and approvals from governmental authorities and other third parties, as may be reasonably required in order to effectuate the terms and conditions of this Agreement.

29.10		The Shareholders hereby agreed and undertake to ensure that they, their representatives, proxies and agents representing them at meetings of the Shareholders shall at all times

Page 46 of 56

exercise their votes in respect of the Shares in such manner so as to comply with, and to fully and effectually implement, the provisions of this Agreement.

Page 47 of 56

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the day, month and year first above written.


Cadila Pharmaceuticals Limited		Novavax Inc.
Cadila Corporate Campus, Sarkhej-Dholka		9920 Belward Campus Drive, Rockville,
Road, Bhat, Ahmedabad – 382 210		MD 20850, USA
Fax No. +91 – 2718 – 225031		Fax No. +1 240-268-2128
Email: rimodi@cadilapharma.co.in		Email: rsinghvi@novavax.com

For Cadila Pharmaceuticals Limited		For Novavax, Inc.
/s/ Rajiv I Modi		/s/ Rahul Singhvi
Dr. Rajiv I. Modi		Dr. Rahul Singhvi
Managing Director		President and Chief Executive Officer

/s/ Dr. Bakulesh Khamar		/s/ Thomas Johnston
Witness 1		Witness 1

/s/ Chinubhai R. Shah		/s/ James Robinson
Witness 2		Witness 2

Page 48 of 56

SCHEDULE II

MATTERS REQUIRING APPROVAL OF ALL OF THE SHAREHOLDERS AND THE BOARD OF
THE DIRECTORS OF THE COMPANY

1.		The sale, transfer, lease, assignment or disposal of all or substantially all of the property or assets of the COMPANY, whether by way of a single transaction or a series of related transactions.

2.		A Change in Control of the COMPANY. “Change in Control” means (a) the sale of all or substantially all of the assets or business of COMPANY, or (b) any merger, consolidation, recapitalization, or business combination of COMPANY, or (c) the sale of capital stock or other equity securities of the COMPANY, or (d) any other transaction or series of transactions; provided that for each of (b) through (d), the result of which is that the Shareholders of the COMPANY prior to such transaction do not, immediately following any such transaction(s), directly or indirectly hold voting securities of the surviving or purchasing entity sufficient to elect a majority of the board of directors of such surviving or purchasing entity.

3.		The liquidation, dissolution or winding-up of the COMPANY.

4.		Any incurrence of indebtedness of the COMPANY that would result in the COMPANY having a debt-to-equity ratio of 3-to-1 or greater.

5.		Other than as set forth in Section 29.8(b), the amendment or waiver of any provision of this Agreement, the Articles of Association or the Stockholders Agreement.

6.		Any change to or deviation from the Dividend Policy set forth in Article 14.

Page 49 of 56

Exhibit 10.4

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

MASTER SERVICES AGREEMENT

This Master Services Agreement, dated as of March 31, 2009 (the “Effective Date”), is between Cadila Pharmaceuticals Limited, a company incorporated under the laws of India having its registered office at “Cadila Corporate Campus, Sarkhej — Dholka Road, Bhat, Ahmedabad-382210, Gujarat, India (“Cadila”), and Novavax, Inc., a Delaware corporation having its principal place of business at 9920 Belward Campus Drive, Rockville, Maryland, 20850, United States (“Novavax”).

1. Description of Services.

1.1 General . This Master Services Agreement contemplates that Novavax may request various services from Cadila from time to time in the areas of biologics research, preclinical development, clinical development, process development and manufacturing scale up and general manufacturing related services in India, and that the provision of such periodic services by Cadila shall be governed by this Agreement.

1.2 Project Plans .

Novavax shall request services from Cadila by means of one or more written Services Requests, which shall set forth a description of the desired services, timeline for completion, and any other information that Novavax believes is relevant to the requested services. Novavax and Cadila will confer as necessary for Cadila to understand the details of the requested services. Cadila shall promptly respond to Novavax with a Project Estimate that sets forth an estimated cost and timeline for the requested services. In March 2009 Novavax visited the Cadila Campus in Ahmedabad to conduct due diligence of Cadila personnel and facilities, and understand Cadila’s capabilities of performing the desired services at the required level of performance and Novavax was generally satisfied with Cadila’s capabilities to perform the desired services. Novavax may request minor changes in procedures, equipment or similar to enhance the performance capabilities of a project by Cadila from time to time. Novavax may also consider other service providers for the desired services. Novavax will remit the initial Services Request within sixty (60) days of execution of this Agreement. The Project Plans as may be approved by the parties will be attached hereto as Exhibit A (Project Plans) forming part of this Agreement within sixty (60) days of Cadila’s receipt of the initial Service Request.

Novavax shall issue Services Requests to Cadila and Cadila shall then promptly prepare a detailed draft Project Plan that describes the services, cost and payment schedule based on fully loaded actual costs (including escalated costs, if any) plus [* * *], timelines, primary contacts, scheduled teleconferences and meetings, and deliverables. Novavax and Cadila will then work together to finalize the Project Plan for approval and final agreement by both the parties. In addition, if the services require the use of tangible research materials (e.g., biological or chemical materials) provided by Novavax, the Project Plan shall contain a description of such materials, delivery arrangements, timelines, and special treatment instructions (if any). Each Project Plan shall become effective after execution by both parties. The services described in each executed

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

Project Plan shall be defined as “Services” under this Agreement. Each Project Plan shall constitute an addendum to this Agreement, and shall therefore be governed by and incorporated into the terms of this Agreement.

Cadila will assign a qualified Project Manager to each Project Plan who shall be named in the Project Plan. The Project Manager will coordinate performance of the Project Plan and all communication between Cadila and Novavax regarding the Project Plan.

2. Performance by Cadila .

Cadila shall diligently perform the Services according to the applicable Project Plan using commercially reasonable efforts. Novavax shall timely provide Cadila with any materials specified in the applicable Project Plan and shall timely furnish Cadila with any information or additional materials as reasonably requested by Cadila for the performance of the Services. Cadila shall not be responsible for any delays caused by Novavax. If Novavax delays a Project Plan or desires to reschedule a Project Plan, Cadila will use good faith efforts to accommodate the needs of Novavax, but makes no commitment to commence or complete the Services under the Project Plan on the original schedule. Cadila shall conduct the Services in a professional manner consistent with applicable industry standards and consistent with all applicable Indian laws and regulations and United States federal Food and Drug Administration regulations, including Good Laboratory Practices (GLP), Good Manufacturing Practices (GMP) and Good Clinical Practices (GCP).

3. Records and Reports .

Cadila shall prepare and maintain complete and accurate records containing all results generated by Cadila in the performance of the Services (the “Project Results”). Cadila shall meet with Novavax by teleconference and furnish Novavax with interim reports of the Project Results periodically as provided in the applicable Project Plan, or as otherwise agreed by the parties. After the Services are completed under a Project Plan, Cadila shall provide Novavax with a final report on the Project Results in accordance with the requirements of the applicable Project Plan.

4. Payment by Novavax; Guaranty of Services .

Novavax shall pay to Cadila the costs of the Services in accordance with the fees on the schedule set forth in the applicable Project Plan. All amounts shall be due and payable within thirty (30) days after invoice by Cadila. All payments shall be made in US dollars unless otherwise agreed by the parties. If the actual costs of the Services under a Project Plan exceed the estimated costs as included in the Project Plan, then Novavax shall pay the actual costs; provided, however, that Cadila shall not incur nor invoice any costs in excess of [* * *] of the estimated cost in the Project Plan without the prior written consent of Novavax. If any amount payable under this Agreement is not paid when due and payable, Cadila reserves the right, without prejudice to its other rights and remedies, to charge interest on such amount at the rate of [* * *] per annum. In

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

addition, Cadila may suspend its performance of the Services under all Project Plans if any amounts due and payable by Novavax have not been timely paid.

It is the intent of the parties that, during the first three years of the term of this Agreement (the “Services Period”), Novavax will have engaged Cadila to perform Services hereunder that will in the aggregate equal $7.5 million in fees paid to Cadila. If, at the end of the Services Period, the Services Amount (defined below) does not equal or exceed $7.5 million, then Novavax shall pay Cadila an amount (the “Final Amount”) equal to the sum of (a) the portion of the Shortfall Amount that is less than or equal to $2.0 million, plus (b) the product of fifty percent (50%) times the portion, if any, of the Shortfall Amount that exceeds $2.0 million. For purposes of this Section 4 and Section 9.2, “ Services Amount ” equals the sum of (A) the amounts paid under all Project Plans, and (B) amounts to be paid under executed Project Plans if the Services under such Project Plans are completed as provided therein, and (C) any amounts that would have been paid for services under a reasonable Service Request provided to Cadila under this Agreement, which Service Request (i) concerns legitimate products or projects within Novavax’s scope of its own business and (ii) involves services that Cadila is reasonably able to provide within its scope of resources and expertise, but for the fact that Cadila exercised its right not to prepare a Project Estimate or agree to a Project Plan reasonably offered to Cadila by Novavax containing terms substantially consistent with those contained in Cadila’s Project Estimate therefor (which amounts shall be reasonably determined based on amounts that would be reasonably charged for such services had Cadila actually provided a Project Estimate and the parties had entered into a Project Plan therefor); and “ Shortfall Amount ” equals the difference between $7.5 million and the Services Amount.

5. Ownership of Work Product .

5.1 Disclosures . Cadila will promptly notify Novavax of any invention, discovery, improvement, formula, know-how, design, process or technique, whether patentable or not, which is conceived or reduced to practice by Cadila in the course of Cadila’s performance of Services.

5.2 Novavax Ownership . Except as set forth in Section 5.3, Novavax shall have sole ownership of all right, title, and interest in and to all (a) Project Results, and (b) inventions, discoveries, improvements, formulas, know-how, designs, processes and techniques, whether or not patentable, patent rights, copyrights, and any other intellectual property rights (all the foregoing, collectively, “IP Rights”) directed or specific to Novavax’s VLP vaccines, Novavax’s VLP platform or the particular products or programs of Novavax described in the Project Plan (“Novavax Technology”) conceived or reduced to practice by Cadila in the course of performance of the Services, and (c) IP Rights directed or specific to Novavax Technology conceived or reduced to practice jointly by Cadila and Novavax in the course of performance of the Services (collectively, the “Novavax IP Rights”). Cadila hereby assigns, transfers, and conveys to Novavax all right, title, and interest in the Novavax IP Rights (subject, as applicable, to the license granted by Novavax to the joint venture to be formed under the Joint Venture Agreement between Novavax and Cadila). Cadila further agrees to execute any documents and

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

to provide Novavax with any other assistance that is reasonably necessary for Novavax to perfect and enjoy its rights under this Section.

5.3 Cadila Ownership; Non-Exclusive License . Novavax acknowledges that, in the course of providing Services, Cadila (solely or jointly with Novavax) may conceive of, or reduce to practice, IP Rights in the course of performance of the Services that are not directed to or specific to the Novavax Technology, including, without limitation, any improvements to Cadila’s existing technologies or capabilities (collectively, “Cadila IP Rights”). Therefore, notwithstanding the provisions of Section 5.2, Cadila shall have sole ownership of all Cadila IP Rights. Novavax hereby assigns, transfers, and conveys to Cadila all right, title, and interest in Cadila IP Rights. Novavax further agrees to execute any documents and to provide Cadila with any other assistance that is reasonably necessary for Cadila to perfect and enjoy its rights under this Section. Cadila hereby grants to Novavax a fully paid, nonexclusive right and license to use any Cadila IP Rights in connection with the research, development, manufacture and sale of Novavax vaccine products anywhere in the world. Except as expressly provided herein, Cadila retains all of its rights, title and interest in, to and under its intellectual property, technology and other assets, and no transfer of ownership or license is provided hereunder with respect thereto (by implication or otherwise), except as expressly provided for herein.

6. Confidential Information .

6.1 “ Confidential Information ” means any confidential or proprietary information furnished by one party (the “Disclosing Party”) to the other party (the “Receiving Party”) in connection with any Services Request or Project Plan or otherwise in connection with the performance of Services hereunder, any information within the Project Results and any Novavax IP Rights and any Cadila Improvements and Cadila IP Rights. All information within the Project Results, other than Cadila Improvements and Cadila IP Rights, shall be the Confidential Information of Novavax and Novavax shall be deemed the Disclosing Party with respect to such information. All information relating to Cadila Improvements and Cadila IP Rights shall be the Confidential Information of Cadila and Cadila shall be deemed the Disclosing Party with respect to such information. Such Confidential Information may include, without limitation, trade secrets, know-how, inventions, product or technical data or specifications, testing methods, and research and development activities and results.

6.2 Restrictions . During the term of this Agreement and thereafter for a period of ten (10) years, the Receiving Party shall (i) maintain all Confidential Information in strict confidence, except that the Receiving Party may disclose or permit the disclosure of any Confidential Information to its directors, officers, employees, consultants, and advisors who are obligated to maintain the confidential nature of such Confidential Information and who need to know such Confidential Information for the purposes of this Agreement; (ii) use all Confidential Information solely for the purposes of this Agreement (or any other agreements entered into by the parties); and (iii) allow its directors, officers, employees, consultants, and advisors to reproduce the Confidential Information only to the extent necessary to fulfill the purposes of this Agreement, with all such reproductions being considered Confidential Information.

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

6.3 Exceptions . The obligations of the Receiving Party under Section 6.2 above shall not apply to the extent that the Receiving Party can demonstrate by written records that certain Confidential Information (i) was in the public domain prior to the time of its disclosure under this Agreement; (ii) entered the public domain after the time of its disclosure under this Agreement through means other than an unauthorized disclosure resulting from an act or omission by the Receiving Party; (iii) was independently developed or discovered by the Receiving Party without use of the Confidential Information; or (iv) is or was disclosed to the Receiving Party at any time, whether prior to or after the time of its disclosure under this Agreement, by a third party having no fiduciary relationship with the Disclosing Party and having no obligation of confidentiality with respect to such Confidential Information. The parties shall be permitted to disclose Confidential Information if such information is required to be disclosed to comply with applicable laws or regulations, or with a court or administrative order, provided that the Disclosing Party receives reasonable prior written notice of such disclosure and the party who wishes to disclose the Confidential Information under this provision shall have cooperated with the Disclosing Party to seek to avoid or limit the disclosure or to obtain confidential treatment of its disclosure.

6.4 Ownership and Return . The Receiving Party acknowledges that the Disclosing Party (or any third party entrusting its own information to the Disclosing Party) claims ownership of its Confidential Information in the possession of the Receiving Party. Upon the expiration or termination of this Agreement, or earlier at the request of the Disclosing Party, the Receiving Party shall return to the Disclosing Party all originals, copies, and summaries of documents, materials, and other tangible manifestations of Confidential Information in the possession or control of the Receiving Party (unless and to the extent continued use thereof is expressly authorized by another agreement entered into by the parties), except that the Receiving Party may retain one copy of the Confidential Information in the possession of its legal counsel solely for the purpose of monitoring its obligations under this Agreement.

7. Proprietary Materials .

7.1 “ Proprietary Materials ” shall mean any tangible chemical, biological, or physical research materials furnished by Novavax to Cadila in connection with this Agreement. Proprietary Materials shall also include other materials derived by Cadila in the performance of Services hereunder from the original materials, including without limitation any progeny derived from a cell line and substances routinely purified from any source material included in the original materials. Except as expressly provided herein, Novavax retains all of its rights, title and interest in, to and under the Proprietary Materials, and no transfer of ownership or license is provided hereunder with respect thereto (by implication or otherwise), except as expressly provided for herein.

7.2 Limited Use . Cadila shall (and shall have the right to) use Proprietary Materials solely for the purpose of providing the Services as requested by Novavax.

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

7.3 Limited Disposition . Cadila shall not transfer or distribute any Proprietary Materials to any third party without the prior written consent of Novavax.

7.4 Return of Proprietary Materials . Upon the termination of this Agreement, or earlier at the request of Novavax, Cadila shall at the instruction of Novavax either destroy or return any unused Proprietary Materials that remain in its possession. If materials are destroyed, Cadila shall provide Novavax with a certificate of an officer of Cadila as to such destruction.

7.5 Instructions Regarding Proprietary Materials . Cadila represents and warrants that it will follow any reasonable instructions, directions, or protocols from Novavax regarding the Proprietary Materials specified by Novavax in any Project Plan hereunder and Cadila will not administer or allow or facilitate administration of any such Proprietary Materials to any human unless expressly directed or permitted to do so (including in any Project Plan).

8. Term and Termination .

8.1 Term . This Agreement shall commence on the Effective Date and shall remain in effect for a period of five (5) years, unless earlier terminated as provided in this Article.

8.2 Termination for Breach . In the event that either party commits a material breach of its obligations under this Agreement and fails to cure that breach within thirty (30) days after receiving written notice thereof (which notice must contain a reasonably detailed description of the alleged breach with appropriate supporting documentation), the other party may terminate this Agreement effectively immediately without additional notice. If Novavax terminates this Agreement for breach by Cadila, then Novavax’s obligation to pay the Final Amount shall also terminate. To the extent that Cadila disagrees with Novavax’s position that Cadila is in breach or did not adequately cure such breach, then the dispute resolution provisions of Sections 9.6 and 9.7 will apply to resolutions of that disagreement to determine whether or not Novavax has a right to terminate under this Section 8.2.

8.3 Voluntary Termination of this Agreement . After the third anniversary of this Agreement, either party may terminate this Agreement for any reason upon ninety (90) days written notice to the other party; provided, however, that if Novavax terminates this Agreement before the end of the Services Period, then the effective date of the termination shall be considered the end of the Services Period and Novavax shall pay any Final Amount that may be due.

8.4 Effect of Termination . Any termination of this Agreement shall trigger a termination of any ongoing Services and Project Plans, unless the parties specifically provide otherwise. In the event of termination of this Agreement, Cadila shall, to the extent practicable, immediately cease work on all Project Plans and use reasonable efforts to wind down the services thereunder as cost effectively as possible, unless otherwise instructed by Novavax. Cadila shall send a final invoice to Novavax for work performed and for any non-cancellable or non-refundable commitments. Cadila shall use commercially reasonable efforts to mitigate costs. After Cadila receives the full final payment, Cadila will transfer to Novavax the Project

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

Results as of the termination date, but Cadila shall have no obligation to deliver a final report or to organize, interpret, or analyze any of the Project Results if such work is not already completed.

8.5 Survival . The following provisions shall survive the expiration or termination of this Agreement: Articles 5, 6, and 7; Sections 9.6, 9.7, 9.8, 9.9, and 9.10.

8.6 Termination of Project Plans . Novavax may terminate one or more Project Plans, rather than the entire Agreement, upon ninety (90) days written notice to Cadila. In such event, (a) any unpaid amounts under such Project Plan shall be excluded from calculation of the Final Amount under Section 4 (i.e., no such unpaid amounts shall be subtracted from the $5.5 million in calculating the Final Amount), and (b) Cadila will use reasonable efforts to wind down the Services under the Project Plan(s) that were terminated as cost-effectively as possible unless otherwise instructed by Novavax. Cadila shall send a final invoice to Novavax for work performed and for any non-cancellable or non-refundable commitments. Cadila shall use commercially reasonable efforts to mitigate costs. After Cadila receives the full final payment, Cadila will transfer to Novavax the Project Results as of the termination date, but Cadila shall have no obligation to deliver a final report or to organize, interpret, or analyze any of the Project Results if such work is not already completed.

9. Miscellaneous .

9.1 Independent Contractor . For the purposes of this Agreement, each party is an independent contractor and not an agent or employee of the other party. This Agreement shall not be deemed to create a joint venture or partnership between the parties. Neither party shall have authority to make any statements, representations, or commitments of any kind, or to take any action which shall be binding on the other party, except as may be explicitly provided for in this Agreement or authorized in writing by the other party.

9.2 Force Majeure . Neither party will be responsible for delays or failures in performance resulting from causes beyond the reasonable control of such party (except for any delay or failure to pay amounts due hereunder), including without limitation fire, explosion, flood, war, strike, or riot, provided that the nonperforming party uses commercially reasonable efforts to avoid or remove such causes of nonperformance and continues performance under this Agreement with reasonable dispatch whenever such causes are removed. Either party shall have the right to immediately terminate this Agreement should such force majeure event continue for more than ninety (90) days. If, at the time of such a termination, the Services Amount (defined in Section 4) does not equal or exceed a pro rata portion of $5.5 million (taking into consideration the time between the Effective Date and such termination versus the three year Services Period (the “Pro Rata Amount”)) plus $2.0 million, then Novavax shall pay Cadila an amount (the “FM Final Amount”) equal to the sum of (a) the portion of the FM Shortfall Amount that is less than or equal to $2.0 million, plus (b) the product of fifty percent (50%) times the portion, if any, of the FM Shortfall Amount that exceeds 2.0 million. For purposes of this

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

Section 9.2, “ FM Shortfall Amount ” equals the difference between the Pro Rata Amount and the Services Amount.

9.3 Headings . All headings are for convenience only and shall not affect the meaning of any provision of this Agreement.

9.4 Assignment . This Agreement may not be assigned by either party without the prior written consent of the other party, except that a party may assign this Agreement to an affiliate or to a successor in connection with the merger, consolidation, or sale of all or substantially all of its assets or that portion of its business to which this Agreement relates.

9.5 Amendment . This Agreement may be amended, supplemented, or otherwise modified only by means of a written instrument signed by authorized representatives of both parties. Any waiver of any rights or failure to act in a specific instance shall relate only to such instance and shall not be construed as an agreement to waive any rights or fail to act in any other instance, whether or not similar.

9.6 Governing Law . This Agreement shall be governed by and construed in accordance with the laws of England, irrespective of any conflicts of law principles. The U.N. Convention on the Sale of Goods shall not apply to this Agreement.

9.7 Arbitration . The parties recognize that disputes as to certain matters may from time to time arise during the course of performance of this Agreement. It is the objective of the parties to establish procedures to facilitate the resolution of disputes arising under this Agreement in an expedient manner by mutual cooperation and without resort to litigation.

(a) The parties will refer any dispute, controversy or claim under, arising out of or relating to the validity, construction, enforceability or performance of this Agreement to the most senior management of each party who will attempt in good faith to resolve the dispute.

(b) After senior management of the parties have attempted in good faith to resolve the dispute, and resolution is not obtained within thirty (30) days of either’s party’s referral of such dispute to senior management, either party may initiate resolution of any dispute, controversy or claim only by final binding arbitration administered by the International Chamber of Commerce (“ICC”) and in accordance with the provisions of the ICC Rules of Arbitration (or such other reputable arbitration organization as the parties may mutually agree in writing). Any such arbitration will be conducted in London, in the English language.

(c) Notwithstanding anything to the contrary in this Section 9.7, either party has the right to seek temporary injunctive relief or any other equitable remedy (collectively, the “Equitable Claims”) in any court of competent jurisdiction as may be available to such party under the laws applicable to such jurisdiction.

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

(d) The arbitration will be presided over by one arbitrator mutually agreed to by the parties. If the parties are unable to agree to a single arbitrator, then there will be three arbitrators, one chosen by Cadila, one chosen by Novavax and the third chosen by the first two arbitrators..

(e) The substantive laws of England will govern the resolution of all disputes, controversies and claims under, arising out of or relating to the validity, construction, enforceability or performance of this agreement and any related remedies.

(f) Each party will abide by any arbitral award rendered pursuant to this Section 9.7. If a party resists enforcement of an arbitral award, any costs, fees or taxes incident to enforcement will be charged against that party to the extent permitted by law. Each part will bear its own legal fees for arbitration, and the arbitrator(s) will assess their costs, fees and expenses against the party losing the arbitration.

9.8 Notices . Any notices required or permitted under this Agreement shall be in writing, shall specifically refer to this Agreement, and shall be sent by recognized international overnight courier, confirmed facsimile transmission, or confirmed electronic mail. All notices under this Agreement shall be deemed effective upon receipt. The parties will designate their respective contact information below, which information is subject to change immediately upon written notice to the other party in the manner provided in this Section.

9.9 Indemnification; Insurance .

Cadila shall indemnify, defend, and hold harmless Novavax and its affiliates, directors, officers, employees, and agents against any and all losses, costs, expenses, and damages, including but not limited to reasonable attorneys fees and costs of investigation, arising out of any third party suit, action or proceeding and attributable to the negligence or willful misconduct of Cadila or arising out of Cadila’s failure to perform the Services in compliance with the terms and conditions of this Agreement.

Novavax shall indemnify, defend, and hold harmless Cadila and its affiliates, directors, officers, employees, and agents against any and all losses, costs, expenses, and damages, including but not limited to reasonable attorneys fees and costs of investigation, arising out of any third party suit, action or proceeding and attributable to the negligence or willful misconduct of Novavax in connection with its obligations under this Agreement or to the use, development, manufacture or commercialization by or for Novavax or any licensee of any Novavax IP Rights, or any products or services utilizing or covered by the same.

Any party seeking indemnification under this Agreement shall provide prompt written notice to the indemnifying party identifying the claim or potential claim giving rise to the indemnification; provided that failure to provide such notice shall not remove the obligation to indemnify unless and to the extent such failure prejudices the indemnifying party. The indemnifying party shall have the right to assume the defense of any claims that are the subject of indemnification at its expense, provided that if there are defenses available to the indemnified party in conflict with the

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

indemnifying party’s defense, then the indemnified party may retain its own counsel at the indemnifying party’s expense. No party shall settle or compromise any claim for which indemnification has been requested without the prior approval of the other party.

Each party shall secure and maintain in full force and effect throughout the performance of each Project Plan policies of general liability, product liability and other insurance having policy limits, deductibles and other terms appropriate to the conduct of the Services and the party’s business and to cover the liability that could arise under this Agreement and this Section 9.9 specifically.

9.10 Warranties .

Each of Cadila and Novavax represents and warrants that (a) they each shall use commercially reasonable efforts to perform their respective obligations under this Agreement, and (b) the execution, delivery and performance of this Agreement has been duly authorized and, upon execution and delivery, will be enforceable against Cadila or Novavax, as the case may be, in accordance with the terms and conditions of this Agreement. Moreover, Cadila will comply with all applicable Indian laws and regulations and the United States Federal Food, Drug and Cosmetic Act and the regulations promulgated thereunder, including GLP, GMP and GCP, in its performance of Services hereunder.

Except as expressly set forth herein, NEITHER PARTY MAKES ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OF ANY KIND INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE, OR ANY WARRANTIES WITH RESPECT TO THE SERVICES PROVIDED PURSUANT TO THIS AGREEMENT.

9.11 Limitation of Liability . In no event shall either party, including its employees, agents, or representatives, be liable for any consequential, incidental, special, exemplary, or punitive damages, including any loss of profit, business, or goodwill. This limitation shall apply regardless of whether such liability arises from a claim based upon contract, warranty, tort, or any other theory of liability (including negligence).

9.12 Severability . In the event that any provision of this Agreement shall be held invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect any other provision of this Agreement, and the parties shall negotiate in good faith to modify the Agreement to preserve (to the extent possible) their original intent.

9.13 Integration . This Agreement, the Project Plans and all Exhibits attached hereto constitutes the entire agreement between the parties with respect to its subject matter and supersedes all prior agreements or understandings between the parties relating to its subject matter.

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9.14 Use of Names . Neither party shall use the name of the other party or the names of the employees of the other party in any advertising or sales promotional material or in any publication without the prior written permission of such party.

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the date first written above.



NOVAVAX, INC.		CADILA PHARMACEUTICALS LIMITED

By:	/s/ Rahul Singhvi Rahul Singhvi	By:	/s/ Rajiv I. Modi Rajiv I. Modi
	President and Chief Executive Officer		Managing Director

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EXHIBIT A

PROJECT PLANS

[Project Plans, upon approval by the parties as set forth in Section 1.2, will be attached hereto as Exhibit A documents and become incorporated into the Agreement]

Exhibit 10.5

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SUPPLY AGREEMENT

This Supply Agreement (this “ Agreement ”) is made as of this 31 ^st day of March, 2009 (the “Execution Date”), by and among Novavax, Inc., a Delaware corporation having an address at 9920 Belward Campus Drive, Rockville, Maryland 20850, United States of America (“ Novavax ”) and CPL Biologicals Limited, a limited company incorporated under the laws of India having an address at “Cadila Corporate Campus”, Sarkhej-Dholka Road, Bhat, Ahmedabad - 382210, Gujarat, India (“ Company ”) . Novavax and Company are sometimes referred to herein each individually as a “Party” and collectively as the “Parties.”

RECITALS

WHEREAS , Company, a joint venture formed pursuant to a Joint Venture Agreement (the “ Joint Venture Agreement ”) dated as of the date hereof between Novavax and Cadila Pharmaceuticals Limited, organized under the laws of India, was formed for developing, manufacturing, marketing and selling the Products (as defined in the Joint Venture Agreement) in India to cater the needs of the market in India; and

WHEREAS , Novavax has granted to Company a license to certain of Novavax’s patents, patent applications and know-how for the Company to develop and commercialize certain Novavax Products (as defined in the Joint Venture Agreement) (the “ License ”); and

WHEREAS , in connection with the foregoing, Novavax is willing to supply certain pre-clinical and clinical supplies of the Novavax Seasonal Product to Company and Company wishes to buy Products from Novavax under the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants set forth below, and for other good and valuable consideration, the receipt of which is hereby acknowledged, and intending to be legally bound hereby, Novavax and Company hereby agree as follows:

Definitions . References in the body of this Agreement to “ Sections ” will refer to the sections of this Agreement. In addition, as used herein, the following initially capitalized terms will have the following meanings

1.1

“ Bankruptcy Event ” means, with respect to a specified person, (i) the filing by such person in any court or agency, pursuant to any statute or regulation of any state or country, a petition in bankruptcy or insolvency or for reorganization or for an the appointment of a receiver or trustee of such other Party or of its assets, (ii) the filing against such person of an involuntary petition for any bankruptcy or insolvency proceeding which petition is not dismissed within sixty (60) days after filing, (iii) the making by such person of an assignment for the benefit of its creditors, (iv) the taking of possession of a substantial part of the assets of such person by a lien holder or other encumbrancer, or (v) the levy or enforcement of

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			any distress, execution or other process upon or against a substantial part of the assets of such person.

	1.2		“ cGMP ” means then current Good Manufacturing Practices.

	1.3		“ Company Indemnitee ” has the meaning set forth in Section 8.2 .

	1.4		“ Defect ” or “ Defective ” means any non-conformance with the Specifications or the existence of any impurity, contaminant or any other defect that renders the Products unfit for human use.

	1.5		“ Effective Date ” means the date on which the condition precedent set forth in Article 11 is first satisfied.

	1.6		“ First Commercial Sale ” means the first sale for monetary value for use or consumption by the general public of the Novavax Products in India.

	1.7		“ Fully-Loaded Cost ” means the direct costs and expenses for manufacturing the Products (including quality assurance/quality control charges and including escalation costs, if any), and indirect costs that are reasonably attributable and fairly allocable to the manufacture of Product reasonably determined by Novavax’s internal accounting in accordance with United States generally accepted accounting practices.

	1.8		“ Indeminitee ” means a Company Indemnitee or Novavax Indemnitee, as applicable.

	1.9		“ Indemnitor ” means Company or Novavax, as applicable.

	1.10		“ Joint Venture Agreement ” has the meaning set forth in the Recitals.

	1.11		“ Laws ” means all (a) applicable laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law of the United States and India; and (b) any guideline or directive of the World Health Organization or other applicable non-governmental agency.

	1.12		“ License ” has the meaning set forth in the Recitals.

	1.13		“ Losses ” has the meaning set forth in Section 8.1 .

	1.14		“ Manufacturin g Facility ” means the manufacturing facility or facilities of Novavax used to manufacture the Products.

	1.15		“ Novavax Indemnitee ” has the meaning set forth in Section 8.1 .

	1.16		“ Novavax Products ” has the meaning set forth in the Joint Venture Agreement.

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	1.17		“ Novavax Seasonal Product ” means the Seasonal Influenza Licensed Product as defined in the License.

	1.18		“ Order Requirements ” has the meaning set forth in Section 3.2 .

	1.19		“ Products ” means Novavax’s pre-clinical and clinical supplies of the Novavax Seasonal Product which conform to the Specifications.

	1.20		“ Purchase Order ” has the meaning set forth in Section 3.2 .

	1.21		“ Specifications ” means Novavax’s standard specifications and manufacturing criteria for the Products (consistent with cGMP), a written copy of which shall be provided by Novavax to the Company within thirty (30) days after the Effective Date, as amended from time to time by mutual written agreement of the Parties.

	1.22		“ Third Party ” means a person or entity other than (a) Novavax, (b) Company, (c) an Affiliate of Novavax or (d) an Affiliate of Company

	1.23		“ Transfer Price ” has the meaning set forth in Section 4.1 .

Manufacture and Supply .

	2.1		General Obligations . Novavax shall sell to Company, and Company shall purchase from Novavax, the Products in accordance with the terms and conditions of this Agreement.

	2.2		Manufacturing Standards . All Products supplied by Novavax to Company will be manufactured in accordance with any applicable Laws including, without limitation, cGMP and any requirements set forth herein.

Product Supply, Orders and Delivery .

3.1

Purchase Orders . Purchase and delivery of the Products shall be made pursuant to written or electronic individual purchase orders issued by Company to Novavax (each a “ Purchase Order ”). Company shall submit such Purchase Orders to Novavax as far in advance as reasonably practicable, but in any event not less than twelve (12) weeks in advance of the delivery date(s) requested in such Purchase Order. A Purchase Order shall be deemed to be accepted by Novavax when Novavax returns a written or electronic order acknowledgement to Company. Novavax shall promptly return a written or electronic order acknowledgement to Company for each Purchase Order received unless Novavax will be unable to timely meet Company’s requirement for Product as set forth in the applicable Purchase Order. Purchase Orders shall specify quantities ordered, delivery dates, and delivery and shipping instructions. Inconsistencies between a Purchase Order and this Agreement shall be resolved in favor of this Agreement.

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			Company acknowledges that Novavax may be prevented from meeting a delivery date and/or order quantity set forth in a Purchase Order (the “ Order Requirements ”) as a result of the Manufacturing Facility production schedule, and in such event Novavax will use commercially reasonable efforts to meet the Order Requirements at such time as the Manufacturing Facility production schedule reasonably permits. If Novavax anticipates that it will be unable to meet Order Requirements for a reason other than the Manufacturing Facility production schedule, Novavax will notify Company immediately of such inability, and the Parties will negotiate in good faith a new mutually acceptable delivery date and/or quantity.

	3.2		Certificate of Analysis . Novavax shall deliver with each shipment a certificate of analysis consistent with cGMP executed by an authorized representative of Novavax, accompanied by a statement that the Products were manufactured according to the Specifications.

	3.3		Delivery . The Products shall be packaged according to the Specifications and supplied FCA (Incoterms 2000) the Manufacturing Facility. Insurance on Products in transit shall be the responsibility of Company and Company shall be responsible for clearing the Products for import into India. Novavax shall provide any assistance reasonably requested by Company to clear the Products for import into India at Company’s expense. Company agrees to designate a carrier prior to or at the time of entry of each Purchase Order hereunder; however, if Company fails to designate a carrier prior to or on its purchase order, Novavax may select a carrier for the account and risk of Company.

Price and Payment .

	4.1		Price. The price at which the Products will be sold to Company by Novavax hereunder will be 110% of the Fully-Loaded Cost therefore (the “ Transfer Price ”). Novavax will include with each shipment of Product an invoice setting forth the Transfer Price for the Product in the shipment.

	4.2		Payment. Payment shall be due to Novavax thirty (30) days after Company’s receipt of the Products.

	4.3		Books and Records . Novavax will keep accurate books and accounts of record in connection with its manufacture of Products in sufficient detail to permit verification of the Fully-Loaded Cost and the Transfer Price for Product purchased by Company as set forth in this Article 4. Novavax will maintain its records for the sale of Products for a period of three (3) years from the end of each year in which such sales occurred.

	4.4		Audits . Company, at its expense, through an internationally recognized, independent accountant reasonably acceptable to Novavax, will have the right to

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access Novavax’s relevant books and records upon reasonable advanced notice once per year for the sole purpose of verifying the Fully-Loaded Cost and the Transfer Price for Product purchased by Company; such access will be conducted during Novavax’s ordinary business hours, and the books and records for a given time period may only be audited once. Said accountant will execute a confidentiality agreement with Novavax in customary form and will only disclose to Company whether Novavax’s invoices were accurate and if they were not, any information necessary to explain the source of the inaccuracy. If such audit determines that Novavax charged Company more than the amount properly owed in respect of any quarter, then Novavax will reimburse Company any excess amount paid by Company within thirty (30) days of the completion of the audit, and if the amount paid exceeds ten percent (10%) of the amount actually owed over the audited period, Novavax will also reimburse Company for the reasonable costs of such audit (including the fees and expenses of the certified public accountant). In the event such audit determines that Novavax charged Company less than the amount properly owed in respect of any quarter, then Company will pay Novavax any such difference within thirty (30) days of the completion of the audit.

Quality, Inspections & Returns .

	5.1		Quality . All Products manufactured under this Agreement shall be manufactured in accordance with applicable Laws including, without limitation, cGMP and the Specifications and shall conform, when delivered, to the Specifications.

	5.2		Defective and Nonconforming Products .

	(a)		Except in the case of latent Defects, claims for Defective or nonconforming Products shall be made to Novavax as soon as practicable after discovery, but in any event no later than forty-five (45) days after receipt. Claims for latent Defects shall be made within thirty (30) days of discovery of the latent Defect. Company’s reasonable belief that a Product is Defective or nonconforming accompanied by sufficient evidence to reasonably demonstrate that the Products are Defective or does not conform to the Specifications shall serve as the basis for such claims.

	(b)		If Novavax agrees with Company’s determination that that the Products do not satisfy the Specifications (or such a determination of non-satisfaction is made in accordance with (c) below), Novavax will, at Novavax’s election, either replace the Products or credit and refund the amount billed and paid by Company for the Products, including shipping costs.

	(c)		If Novavax disagrees with Company’s determination that the Products do not satisfy the Specifications, the Products in question shall be submitted

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to a mutually acceptable Third Party laboratory, which shall determine whether such Products meet the Specifications. The Parties agree that such Third Party laboratory’s determination shall be final and determinative. The Party against whom the Third Party laboratory rules shall bear the reasonable costs of the Third Party testing.

5.3

Recall. In the event of complaints regarding the Products, Company shall promptly notify Novavax and Novavax shall investigate and shall inform Company within thirty (30) days of the steps taken relating to the complaint. In the event of any recall of any Product recommended or ordered by any governmental authority, or any recall to which both parties agree in writing, Company will perform the recall following Company’s standard operating procedures, and the reasonable documented costs thereof will be borne by Novavax if the recall is the fault of Novavax or by Company if the recall is the fault of Company. Novavax or Company, as the case may be, will promptly upon demand reimburse the other in connection therewith.

6.		Novavax’s Warranty . Novavax warrants to Company that the Products, at the time of shipment to Company (i) will be manufactured in accordance with cGMP; (ii) will be in compliance with the Specifications and (iii) will be free from Defects. THE WARRANTIES SET FORTH HEREIN ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY AND ANY WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE.

7.		Mutual Representations . Each of Novavax and Company hereby represents, warrants and covenants to the other as of the Execution Date that:

	7.1		it has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof, and this Agreement is legally binding upon it and enforceable in accordance with its terms;

	7.2		the execution, delivery and performance of this Agreement by it does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any Law of any governmental authority having jurisdiction over it; and

	7.3		all necessary consents, approvals and authorizations of all governmental authorities and other persons required to be obtained by such Party to enter into, or perform its obligations under, this Agreement have been obtained.

Indemnification .

8.1

Indemnification by Company. Company will indemnify, defend and hold harmless Novavax, its affiliates, directors, officers, and employees (each a

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			“ Novavax Indemnitee ”) from and against any and all liability, loss, damage or expense (including without limitation reasonable attorneys fees) it may suffer as the result of Third Party claims, demands, actions and proceedings brought against it (collectively, “ Losses ”) to the extent such Losses result from the use of the Products by Company or any human subject in a clinical trial, or which arise out of Company’s making, testing, using or selling products or processes incorporating the Products; except to the extent that Novavax is obligated to indemnify Company as provided below.

	8.2		Indemnification by Novavax. Novavax will indemnify, defend and hold harmless Company, its affiliates, directors, officers, and employees (each a “ Company Indemnitee ”) from and against any and all Losses which arise out of the gross negligence, willful misconduct or breach of a covenant, representation or warranty in this Agreement by Novavax, its affiliates or employees.

	8.3		Procedures. Indemnitor’s agreement to indemnify, defend and hold harmless an Indemnitee is conditioned on Indemnitee (a) providing prompt written notice of any claim giving rise to an indemnification obligation hereunder but only if a failure to so notify causes prejudicial harm to the Indemnitor’s ability to defend, (b) permitting Indemnitor to assume full responsibility to investigate, prepare for and defend against any such claim, (c) providing reasonable assistance in the defense of such claim at Indemnitor’s reasonable expense, and (d) not compromising or settling such claim without Indemnitor’s advance written consent.

	8.4		Insurance. The Parties each agree to furnish to the other at any time promptly upon request all certificates or memoranda of insurance which are maintained to insure against any loss, damage or action which may arise out of, relate to or be caused by the Products, the containers or labeling thereof, or the Specifications thereto.

Confidentiality .

The Parties anticipate that under this Agreement each Party will provide confidential and/or proprietary information to the other Party and that the use and disclosure of such information shall be governed by Article 18 of the Joint Venture Agreement which is hereby incorporated by reference.

10.

Limitation of Liability.

NEITHER PARTY NOR ITS RESPECTIVE AFFILIATES WILL BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES UNDER THIS AGREEMENT, WHETHER IN CONTRACT, WARRANTY, TORT, STRICT LIABILITY OR OTHERWISE.

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11.

Condition Precedent.

This Agreement, including the obligations and benefits herein, shall only become effective if, and shall automatically become effective upon, satisfaction of the following condition precedent; provided that such condition is satisfied before [* * *]:

Obtain the approval of the Foreign Investment Promotion Board for the issuance to Novavax of [* * *] shares of Company.

If the foregoing occurs before [* * *], the first Party receiving documented evidence thereof shall notify the other and include in such notice the date thereof which date shall thereupon be the Effective Date hereunder.

12.

Term and Termination .

	12.1		Term . The term of this Agreement shall commence on the Effective Date and continue in effect until the earlier of (i) the first date when Company’s own manufacturing facility is capable of manufacturing, and fully licensed to manufacture, all Novavax Products supplied hereunder; or (ii) the date of the First Commercial Sale, unless terminated earlier under Section 12.2 . Shipments made prior to termination and received by Company subsequent to termination shall conform to this Agreement.

	12.2		Termination .

(a)

Termination by Novavax . Novavax shall have the right to terminate this Agreement upon the happening of any of the following events:

	(i)		Company is in material breach of or default under this Agreement of payment obligation of a material amount and has not cured such breach or default within thirty (30) days after written notice from Novavax to Company specifying the nature of such breach or default;

	(ii)		Company is in material breach of or default under this Agreement other than any payment obligation referred to in clause (i) above and has not cured such breach or default within ninety (90) days after written notice from Novavax to Company specifying the nature of such breach or default;

	(iii)		Immediately upon notice to Company if a Bankruptcy Event occurs with respect to Company; and

	(iv)		Upon termination of the Joint Venture Agreement.

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	(b)		Termination by Company . Company may terminate this Agreement for any reason or no reason upon sixty (60) days prior written notice from Company to Novavax.

	(c)		Termination Upon Termination of the Joint Venture Agreement . This Agreement will terminate automatically if Novavax terminates the Joint Venture Agreement by providing a Notice of Termination under and pursuant to Section 11.2 of the Joint Venture Agreement

12.3

Effect of Termination. Termination of this Agreement shall not release either Party from fulfilling any obligations it may have incurred prior to such termination except that Novavax shall not be obligated to complete deliveries in the event of an uncured material breach by Company. This Section 12.3 and Articles 5, 6, 8, and 13 shall survive termination or expiration of this Agreement.

13.

Miscellaneous .

	13.1		Governing Law . This Agreement shall be governed by and construed in accordance with the laws of India.

	13.2		Dispute Resolution . Any dispute arising between the Parties out of or in connection with the implementation or interpretation of this Agreement shall, if not settled amicably within ninety (90) days from the date that the dispute arose, be finally settled by three (3) arbitrators. Each Party shall be entitled to appoint one (1) arbitrator and the two (2) so appointed shall appoint the third arbitrator in accordance with the Indian Arbitration and Conciliation Act, 1996. It is hereby agreed that Part I of the Indian Arbitration and Conciliation Act, 1996 shall not apply to the arbitration under this Agreement. The language of the arbitration proceedings shall be English and its place shall be Singapore. The arbitral award or determination shall be final and subject to no appeal and shall deal with the question of costs of arbitration and all matters related thereto.

			The Parties agree that it would be impossible or inadequate to measure and calculate their damages from any breach of the Agreement though great and irreparable. Accordingly, each Party agrees that if the other Party breaches this Agreement, the non-breaching party will have available, in addition to any other right or remedy available, the right to obtain an injunction from a court of competent jurisdiction restraining such breach or threatened breach and specific performance of any provision of this Agreement.

	13.3		Force Majeure . Neither party will be responsible for delays or failures in performance resulting from causes beyond the reasonable control of such party (except for any delay or failure to pay amounts due hereunder), including without limitation fire, explosion, flood, war, strike, or riot, provided that the nonperforming party uses commercially reasonable efforts to avoid or remove

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			such causes of nonperformance and continues performance under this Agreement with reasonable dispatch whenever such causes are removed. Either party shall have the right to immediately terminate this Agreement should such force majeure event continue for more than ninety (90) days.

	13.4		Notices. Any notice, request, demand, waiver, consent, approval or other communication permitted or required under this Agreement (“Notice”) will be in writing, will refer specifically to this Agreement and will be deemed given only if sent by electronic mail (with receipt confirmed), facsimile transmission (with transmission confirmed) or by an internationally recognized delivery service that maintains records of delivery, addressed to the Parties at their respective addresses specified in this Section 13.4 or to such other address as the Party to whom notice is to be given may have provided to the other Party in accordance with this Section 13.4. Any notice delivered by electronic mail or facsimile will be confirmed by a hard copy delivered as soon as practicable thereafter by an internationally recognized overnight delivery service. Such Notice will be deemed to have been given on the second Business Day (at the place of delivery) after deposit with an internationally recognized delivery service. This Section 13.4 is not intended to govern the day-to-day business communications necessary between the Parties in performing their obligations under the terms of this Agreement.


		If to Novavax:		Novavax, Inc.
				9920 Belward Campus Drive
				Rockville, Maryland 20850
				Attn: Ray Hage, Senior Vice President
				Email: Rhage@Novavax.com
				Facsimile No.: 240-268-2122

		If to Company:		CPL Biologicals Limited
				Cadila Corporate Campus
				Sarkhej-Dholka Road
				Bhat, Ahmedabad – 382210
				Gujarat, India
				Attn: Dr. Rajiv I. Modi, Managing Director
				Email: rimodi@cadilapharma.co.in
				Facsimile No.: +91 (02718) 225031

13.5

Third Party Contractors. The Parties will perform their obligations under this Agreement as Third Party contractors and nothing contained in this Agreement will be construed to be inconsistent with such relationship or status. This Agreement will not constitute, create or in any way be interpreted as a joint venture or partnership of any kind.

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	13.6		Headings. The headings for each article and section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular article or section.

	13.7		No Strict Construction. This Agreement has been prepared jointly and will not be strictly construed against either Party.

	13.8		Ambiguities. Ambiguities and uncertainties in this Agreement, if any, will not be interpreted against either Party, irrespective of which Party may be deemed to have caused the ambiguity or uncertainty to exist.

	13.9		English Language. All notices required or permitted to be given hereunder, and all written, electronic, oral or other communications between the Parties regarding this Agreement will be in the English language. This Agreement is in the English language only, which language will be controlling in all respects, and all versions hereof in any other language will be for accommodation only and will not be binding upon the Parties.

	13.10		Amendment and Waiver. No amendment or waiver of any provision of this Agreement, and no consent to any departure therefrom, shall be effective unless the same shall be in writing and signed by an authorized representative of each Party, and such waiver or consent shall be effective only for the specific purpose for which it is given. No failure on the part of a Party to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies provided for in this Agreement are cumulative and are not exclusive of any remedies provided for by law.

	13.11		Severability . If any of the provisions of this Agreement are found to be inconsistent with, or void under, applicable laws, the validity of the remaining provisions shall not thereby be affected. In such a case the Parties shall re-negotiate the ineffective provision in good faith in order to replace it with a provision affording the same rights, obligations and economic benefits to the Parties as the ineffective provision.

	13.12		Entire Agreement . This Agreement and the documents executed and delivered on the date hereof pursuant hereto or in connection herewith, contain the entire agreement among the Parties with respect to the matters addressed herein and therein and supersede all prior representations, inducements, promises or agreements, oral or otherwise, which are not embodied herein or therein.

	13.13		Assignment .

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	(a)		Novavax may not assign this Agreement, in whole or in part, without the advance written consent of the Company; provided, however, that this Agreement shall be automatically assigned to Novavax’s successor in connection with the acquisition, merger or sale of Novavax or the sale, transfer, lease, assignment or disposal of all or substantially all of the property or assets of Novavax, whether by way of a single transaction or a series of related transactions, and such successor shall be fully bound by the terms and conditions hereof.

	(b)		The Company may not assign this Agreement, in whole or in part, without the advance written consent of Novavax; provided, however, that this Agreement shall be automatically assigned to the Company’s successor in connection with the sale, transfer, lease, assignment or disposal of all or substantially all of the property or assets of the Company, whether by way of a single transaction or a series of related transactions, including a Change in Control of the Company (as that term is defined in Schedule II of the Joint Venture Agreement), and such successor shall be fully bound by the terms and conditions hereof; provided that any such automatic assignment by Company within the scope of Schedule II of the Joint Venture Agreement shall only be effective if such transaction was approved by Novavax under and pursuant to the Joint Venture Agreement for so long as such approval rights of Novavax under the Joint Venture Agreement have not been terminated.

	(c)		Any assignment or purported assignment by either Party in violation of this Section 13.13 will be null and void.

	13.14		Expenses. Except for the Transfer Price payments, each of the Parties hereto will bear all costs, charges and expenses incurred by such Party in connection with this Agreement and the consummation of the transactions contemplated herein.

	13.15		Counterparts. This Agreement may be executed in one or more identical counterparts, each of which will be deemed to be an original, and which collectively will be deemed to be one and the same instrument.

[Signature Page to Follow]

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

In Witness Whereof, the Parties have by duly authorized persons executed this Supply Agreement as of the Execution Date.



Novavax, Inc.		CPL Biologicals Limited

By:	/s/ Rahul Singhvi Rahul Singhvi	By:	/s/ Rajiv I. Modi Rajiv I. Modi
	President and CEO		Managing Director

[Signature Page to Supply Agreement]

Exhibit 10.6

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

TECHNICAL SERVICES AGREEMENT

This Technical Services Agreement (the “Agreement”) is made as of March 31, 2009 (the “Execution Date”), by and between Novavax, Inc. , a Delaware corporation having an address at 9920 Belward Campus Drive, Rockville, Maryland 20850, United States of America (“Novavax”) and CPL Biologicals Limited, a limited company incorporated under the laws of India having an address at “Cadila Corporate Campus”, Sarkhej-Dholka Road, Bhat, Ahmedabad — 382210, Gujarat, India (“Company”). Novavax and Company are sometimes referred to herein each individually as a “Party” and collectively as the “Parties.”

RECITALS

Whereas , the Company, a joint venture formed pursuant to a Joint Venture Agreement dated as of the date hereof (the “Joint Venture Agreement”) between Novavax and Cadila Pharmaceuticals Limited, organized under the laws of India (“Cadila”), was formed for developing, manufacturing, marketing and selling certain pharmaceutical and medicinal products to cater the needs of the market in India;

Whereas , Novavax and Cadila intend that Company will establish U.S. and India cGMP acceptable manufacturing facilities (the “Manufacturing Facilities”) in India and the structure for developing, producing, marketing and selling pharmaceutical products either directly or through partners / contractors as further described in the Joint Venture Agreement;

Whereas , Novavax has granted the Company a license to certain of Novavax’s Patents and Know-How for the Company to develop and commercialize Novavax Products under the Novavax Licenses (as each such term is defined in the Joint Venture Agreement); and

Whereas , Novavax has significant subject matter expertise in biologics, preclinical development, clinical development, process development and manufacturing scale up and general manufacturing related services.

Now, Therefore , in consideration of the foregoing premises and the mutual covenants set forth below, and for other good and valuable consideration, the receipt of which is hereby acknowledged, Novavax and Company hereby agree as follows:

ARTICLE 1
DEFINITIONS

Section 1.1. References in the body of this Agreement to “Sections” will refer to the sections of this Agreement. In addition, as used herein, the following initially capitalized terms will have the following meanings:

(a) “Affiliate” means any corporation or other business entity controlled by, controlling, or under common control with a Party, with “control” (for purposes of this Section 1.1) meaning (a) direct or indirect beneficial ownership of fifty percent (50%) or

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

more of the voting stock (or, in the case of a non-corporate entity, of the equity interests with the power to direct the management and policies) of such corporation or other business entity, or (b) possession, directly or indirectly, of the power to direct, or cause the direction of, the management and policies of such corporation or other business entity, whether through the ownership of voting securities, by contract, or otherwise; provided that for purposes of this Agreement, Novavax and Cadila shall not be deemed to be an Affiliate of Company.

(b) “Bankruptcy Event” means, with respect to a specified Person, (i) the filing by such Person in any court or agency, pursuant to any statute or regulation of any state or country, a petition in bankruptcy or insolvency or for reorganization or for an the appointment of a receiver or trustee of such other Party or of its assets, (ii) the filing against such Person of an involuntary petition for any bankruptcy or insolvency proceeding which petition is not dismissed within sixty (60) days after filing, (iii) the making by such Person of an assignment for the benefit of its creditors, (iv) the taking of possession of a substantial part of the assets of such Person by a lien holder or other encumbrancer, or (v) the levy or enforcement of any distress, execution or other process upon or against a substantial part of the assets of such Person.

(c) “Business Day” means any day other than a Saturday, Sunday or other day on which the principal commercial banks located in Mumbai, India are not open for business during normal business hours.

(d) “Company Indemnitee” has the meaning set forth in Section 6.2.

(e) “Consulting Services” shall mean the services set forth in Section 2.3.

(f) “Development and Regulatory Services” shall mean the services set forth in Section 2.2.

(g) “Effective Date” means the date on which the condition precedent set forth in Article 7 is first satisfied.

(h) “Governmental Authority” means any court, agency, department or other instrumentality of any foreign, federal, state, county, city or other political subdivision.

(i) “Improvements” means any enhancements or modifications in the production process concerning Novavax Products.

(j) “Indeminitee” means a Company Indemnitee or Novavax Indemnitee, as applicable.

(k) “Indemnitor” means the Company or Novavax, as applicable.

(l) “Joint Venture Agreement” has the meaning set forth in the Recitals.

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

(m) “Know-How” means any tangible and intangible (a) techniques, technology, practices, trade secrets, inventions (whether patentable or not), methods, protocols, processes, formulas, knowledge, know-how, skill, experience, records, documents, data and results (including pharmacological, toxicological, non-clinical and clinical test data and results), analytical and quality control data, results or descriptions, software and algorithms and (b) compositions of matter, cells, cell lines, assays, animal models and physical, biological or chemical material.

(n) “Laws” means applicable laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law of the United States and India.

(o) “Losses” has the meaning set forth in Section 6.1.

(p) “Manufacturing Facilities” has the meaning set forth in the Recitals.

(q) “Manufacturing Services” shall mean the services set forth in Section 2.1.

(r) “Novavax Indemnitee” has the meaning set forth in Section 6.1.

(s) “Novavax Licenses” has the meaning set forth in the Recitals.

(t) “Novavax Product” has the meaning set forth in the Joint Venture Agreement.

(u) “Patents” mean any and all (a) issued patents and inventors’ certificates in the Territory and re-examinations, reissues, renewals, extensions, registrations, substitutions, supplementary protection certificates and term restorations with respect to any of the foregoing, and (b) pending applications for patents and inventors’ certificates in the Territory and patents that issue therefrom, including, without limitation, provisional applications, continuations, continuations-in-part, divisional and substitute applications with respect to any of the foregoing.

(v) “Regulatory Approval” means any and all approvals (including supplements, amendments, pre- and post-approvals, pricing and reimbursement approvals), licenses, registrations or authorizations of any national, supra-national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity, that are necessary for the manufacture, distribution, use or sale of a Novavax Product in a regulatory jurisdiction in the Territory.

(w) “Services” means Consulting Services, Development and Regulatory Services and Technology Transfer Services.

(x) “Technology Transfer Services” means the Manufacturing Services and other technology transfer services described in Section 2.1:

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

(y) “Territory” means India.

(z) “Third Party” means a person or entity other than (a) Novavax, (b) Company, (c) an Affiliate of Novavax or (d) an Affiliate of Company.

ARTICLE 2
SERVICES

Section 2.1. Technology Transfer Services .

(a) Promptly after the Effective Date (but in any event within sixty (60) days thereof), Novavax shall disclose and provide to the Company the Know-How set forth on Exhibit 1 (the “Manufacturing Know-How”) and any other relevant manufacturing-related Know How licensed to the Company by Novavax to allow the Company to establish a Manufacturing Facility for Novavax Products. As reasonably requested by the Company, Novavax shall disclose and provide to the Company any Improvements to the Manufacturing Know-How made by Novavax.

(b) To effectuate the transfer and implementation of the Manufacturing Know-How and the establishment of the Manufacturing Facility for Novavax Products, Novavax shall provide the Manufacturing Services set forth on Exhibit 2 . As soon as practicable after the date of this Agreement, the Representative and the Company shall develop a reasonable schedule pursuant to which the Manufacturing Services will be provided.

(c) Promptly after the Effective Date (but in any event within sixty (60) days thereof), and thereafter as reasonably requested by the Company, Novavax shall disclose and provide to the Company any Know-How licensed to the Company by Novavax under the Novavax Licenses (which is not addressed in Section 2.1(a) above), and shall provide reasonable assistance and cooperation to the Company for the purpose of effectively transferring such Know-How and enabling the Company to use such Know-How within the scope of the Novavax Licenses.

Section 2.2. Development and Regulatory Services .

(a) To assist the Company in developing and obtaining Regulatory Approval for Novavax Products in the Territory, Novavax shall provide the Development and Regulatory Services set forth on Exhibit 3 .

(b) The Company and the Representative shall coordinate the execution and delivery of the Development and Regulatory Services. The Development and Regulatory Services shall be provided at reasonable times as shall be mutually agreed to by the Company and the Representative.

Section 2.3. Consulting Services .

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

(a) At the Company’s request, Novavax may provide consulting services to Company in the areas of biologics, preclinical development, clinical development, process development, manufacturing scale up and general manufacturing related services and any other areas in which Novavax has subject matter expertise.

(b) Upon the Company’s request for and upon Novavax’s agreement to provide such Consulting Services, the Company and the Representative shall develop a description of the desired Consulting Services and a plan for completing the requested Consulting Services, including an outline of the level of staffing required and an estimated timeline for completion.

Section 2.4. Novavax Representative . Novavax designates James Robinson (the “Representative”) as the Company’s primary contact for all Services provided under this Agreement and Novavax shall make such Representative reasonably available to the Company. The Company shall direct all high-level communications regarding the Services and this Agreement to the Representative. Novavax may substitute the Representative at any time upon notice to the Company.

Section 2.5. Impracticability . Novavax shall not be obligated to provide any Service to the extent the performance of such Service becomes commercially impracticable as a result of events or circumstances outside of the control of Novavax, including, to the extent the performance of such Services would require Novavax to breach any applicable Law or could reasonably be expected to result in the breach of any applicable contract, license, or other agreement; provided however, that Novavax represents and warrants to Company that, as of the date of this Agreement, Novavax has no knowledge of any event or circumstance that would cause the performance of Services to violate any applicable Law or could reasonably be expected to result in the breach of any applicable contract, license or other agreement. Novavax shall provide Company with reasonable notice of the occurrence of any event which would cause Novavax to curtail or cease any Service pursuant to this Section 2.5.

Section 2.6. Rights to Know-How . Novavax shall retain all of its right, title and interest in any Know-How provided to the Company hereunder, subject to the Novavax Licenses. Company shall use such Know-How solely in accordance with the terms and conditions of such Novavax Licenses. New developments derived by the Company from the Know-How provided by Novavax hereunder shall be subject to the terms and conditions of the Novavax License with respect thereto, if and to the extent applicable.

ARTICLE 3
EXPENSES

Section 3.1. Expenses . The Company shall reimburse Novavax for its reasonable out-of-pocket expenses incurred in connection with the performance of the Services hereunder, including travel.

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

Section 3.2. Invoices . By the tenth business day of each month, Novavax shall submit to the Company a report (the “ Invoice ”) showing a list of all out-of-pocket expenses incurred in performance of the Services during the preceding month.

Section 3.3. Payment Dates . The Company shall pay all Invoices within thirty (30) days of receipt. Late payments shall bear interest at the lesser of [* * *] per annum or the maximum rate allowed by applicable Law. All payments due under this Agreement will be made in U.S. dollars by wire transfer to a bank account designated by Novavax.

ARTICLE 4
REPRESENTATIONS AND WARRANTIES

Section 4.1. Mutual Warranties . Each of Novavax and Company hereby represents, warrants and covenants to the other as of the Execution Date that:

(a) it has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof, and this Agreement is legally binding upon it and enforceable in accordance with its terms.

(b) the execution, delivery and performance of this Agreement by it does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any Law of any governmental authority having jurisdiction over it;

(c) all necessary consents, approvals and authorizations of all governmental authorities and other persons required to be obtained by such Party to enter into, or perform its obligations under, this Agreement have been obtained.

Section 4.2. DISCLAIMER OF WARRANTIES . Novavax represents that it will use commercially reasonable efforts to provide a high standard of professional service. However, Novavax, as a provider of such services, cannot guarantee success, thus, except as expressly set forth herein, THE SERVICES AND KNOW-HOW PROVIDED BY NOVAVAX HEREUNDER, AND THE IMPROVEMENTS KNOW-HOW PROVIDED BY THE COMPANY HEREUNDER, ARE PROVIDED “AS IS.” EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF DESIGN, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICES, IN ALL CASES WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT.

ARTICLE 5
CONFIDENTIALITY

The Parties anticipate that under this Agreement each Party will provide confidential and/or proprietary information to the other Party and that the use and disclosure of such

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
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EXCHANGE COMMISSION.

information shall be governed by Article 18 of the Joint Venture Agreement which is hereby incorporated by reference.

ARTICLE 6
INDEMNIFICATION

Section 6.1. Indemnification by Company . Company will indemnify, defend and hold harmless Novavax, its affiliates, directors, officers, and employees (each a “Novavax Indemnitee”) from and against any and all liability, loss, damage or expense (including without limitation reasonable attorneys fees) it may suffer as the result of Third Party claims, demands, actions and proceedings brought against it (collectively, “Losses”) to the extent such Losses result from the use of the Products by Company or any human subject in a clinical trial, or which arise out of Company’s making, testing, using or selling products or processes incorporating the Products; except to the extent that Novavax is obligated to indemnify Company as provided below.

Section 6.2. Indemnification by Novavax . Novavax will indemnify, defend and hold harmless Company, its affiliates, directors, officers, and employees (each a “Company Indemnitee”) from and against any and all Losses which arise out of the gross negligence, willful misconduct or breach of a covenant, representation or warranty in this Agreement by Novavax, its affiliates or employees.

Section 6.3. Procedures . Indemnitor’s agreement to indemnify, defend and hold harmless an Indemnitee is conditioned on Indemnitee (a) providing prompt written notice of any claim giving rise to an indemnification obligation hereunder but only if a failure to so notify causes prejudicial harm to the Indemnitor’s ability to defend, (b) permitting Indemnitor to assume full responsibility to investigate, prepare for and defend against any such claim, (c) providing reasonable assistance in the defense of such claim at Indemnitor’s reasonable expense, and (d) not compromising or settling such claim without Indemnitor’s advance written consent

Section 6.4. LIMITATION OF LIABILITY . EXCEPT TO THE EXTENT (A) SUCH PARTY MAY BE REQUIRED TO INDEMNIFY THE OTHER PARTY UNDER THIS ARTICLE 6, OR (B) OF A BREACH OF A PARTY’S RESPONSIBILITIES PURSUANT TO ARTICLE 5, NEITHER PARTY NOR ITS RESPECTIVE AFFILIATES WILL BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES UNDER THIS AGREEMENT, WHETHER IN CONTRACT, WARRANTY, TORT, STRICT LIABILITY OR OTHERWISE.

ARTICLE 7
CONDITION PRECEDENT

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

Obtain the approval of the Foreign Investment Promotion Board for the issuance to Novavax of [* * *] shares of Company.

ARTICLE 8
TERM

Section 8.1. Term . The initial term of this Agreement is four years commencing on March 31, 2009, and unless terminated earlier pursuant to Section 8.2 or 8.3, shall continue until March 31, 2013 (the “Initial Term”). This Agreement shall automatically renew for successive additional one-year periods (each a “Renewal Term”) unless either party gives the other party written notice of their intention to terminate the Agreement at least thirty (30) days prior to the end of any such term (each Renewal Term and the Initial Term shall collectively be referred to herein as the “Term”).

Section 8.2. Termination by Novavax . Novavax shall have the right to terminate this Agreement upon the happening of any of the following events:

(a) Company fails to pay or cause to be paid any material sum which has become due to Novavax under this Agreement and has not cured such failure to pay within thirty (30) days after written notice from Novavax to Company identifying such payment failure;

(b) Company is in material breach of or default under this Agreement other than any payment obligation referred to in clause (a) above and has not cured such breach or default within ninety (90) days after written notice from Novavax to Company specifying the nature of such breach or default; and

Section 8.3. Termination by Company . Company may terminate this Agreement if Novavax is in material breach of or default under this Agreement and has not cured such breach or default within ninety (90) days after written notice from Company to Novavax specifying the nature of such breach or default.

Section 8.4. Termination Upon Dissolution of Company . This Agreement will terminate automatically upon the dissolution, winding up, or liquidation of the Company.

Section 8.5. Termination Upon Termination of the Joint Venture Agreement . This Agreement will terminate automatically if Novavax terminates the Joint Venture Agreement by providing a Notice of Termination under and pursuant to Section 11.2 of the Joint Venture Agreement

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

Section 8.6. Consequences of Termination . Upon termination of this Agreement by Company pursuant to Section 8.3, Company will remain liable for the payment of any outstanding Invoices pursuant to Section 3.5, but may offset such payment obligations by any contract damages that are determined to be due to Company pursuant to Section 9.2. Upon termination of this Agreement by Novavax pursuant to Section 8.2, all outstanding Invoices shall be due and payable immediately and shall bear interest at a rate of the lesser of [* * *] per annum and the maximum rate permitted by applicable Law. Termination of this Agreement shall be without prejudice to or limitation on any other remedies or any accrued obligations of either Party. In addition, Articles 5, 6, 8.6 and 9 and any necessary definitions in Article 1 will survive any termination or expiration of this Agreement.

ARTICLE 9
MISCELLANEOUS

Section 9.1. Governing Law . This Agreement shall be governed by and construed in accordance with the laws of India.

Section 9.2. Dispute Resolution . Any dispute arising between the Parties out of or in connection with the implementation or interpretation of this Agreement shall, if not settled amicably within ninety (90) days from the date that the dispute arose, be finally settled by three (3) arbitrators. Each Party shall be entitled to appoint one (1) arbitrator and the two (2) so appointed shall appoint the third arbitrator in accordance with the Indian Arbitration and Conciliation Act, 1996. It is hereby agreed that Part I of the Indian Arbitration and Conciliation Act, 1996 shall not apply to the arbitration under this Agreement. The language of the arbitration proceedings shall be English and its place shall be Singapore. The arbitral award or determination shall be final and subject to no appeal and shall deal with the question of costs of arbitration and all matters related thereto.

The Parties agree that it would be impossible or inadequate to measure and calculate their damages from any breach of the Agreement though great and irreparable. Accordingly, each Party agrees that if the other Party breaches this Agreement, the non-breaching party will have available, in addition to any other right or remedy available, the right to obtain an injunction from a court of competent jurisdiction restraining such breach or threatened breach and specific performance of any provision of this Agreement.

Section 9.3. Force Majeure . Neither party will be responsible for delays or failures in performance resulting from causes beyond the reasonable control of such party (except for any delay or failure to pay amounts due hereunder), including without limitation fire, explosion, flood, war, strike, or riot, provided that the nonperforming party uses commercially reasonable efforts to avoid or remove such causes of nonperformance and continues performance under this Agreement with reasonable dispatch whenever such causes are removed. Either party shall have the right to immediately terminate this Agreement should such force majeure event continue for more than ninety (90) days.

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

Section 9.4. Notices . Any notice, request, demand, waiver, consent, approval or other communication permitted or required under this Agreement ( " Notice " ) will be in writing, will refer specifically to this Agreement and will be deemed given only if sent by electronic mail (with receipt confirmed), facsimile transmission (with transmission confirmed) or by an internationally recognized delivery service that maintains records of delivery, addressed to the Parties at their respective addresses specified in this Section 9.4 or to such other address as the Party to whom notice is to be given may have provided to the other Party in accordance with this Section 9.4. Any notice delivered by electronic mail or facsimile will be confirmed by a hard copy delivered as soon as practicable thereafter by an internationally recognized overnight delivery service. Such Notice will be deemed to have been given on the second Business Day (at the place of delivery) after deposit with an internationally recognized delivery service. This Section 9.4 is not intended to govern the day-to-day business communications necessary between the Parties in performing their obligations under the terms of this Agreement.


If to Novavax:		Novavax, Inc.
		9920 Belward Campus Drive
		Rockville, Maryland 20850
		Attn: Ray Hage, Senior Vice President
		Email: Rhage@Novavax.com
		Facsimile No.: 240-268-2122

If to Company:		CPL Biologicals Limited
		Cadila Corporate Campus
		Sarkhej-Dholka Road
		Bhat, Ahmedabad — 382210
		Gujarat, India
		Attn: Dr. Rajiv I. Modi, Managing Director
		Email: rimodi@cadilapharma.co.in
		Facsimile No.: +91 (02718) 225031

Section 9.5. Third Party Contractors . The Parties will perform their obligations under this Agreement as Third Party contractors and nothing contained in this Agreement will be construed to be inconsistent with such relationship or status. This Agreement will not constitute, create or in any way be interpreted as a joint venture or partnership of any kind.

Section 9.6. Headings . The headings for each article and section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular article or section.

Section 9.7. No Strict Construction . This Agreement has been prepared jointly and will not be strictly construed against either Party.

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

Section 9.8. Ambiguities . Ambiguities and uncertainties in this Agreement, if any, will not be interpreted against either Party, irrespective of which Party may be deemed to have caused the ambiguity or uncertainty to exist.

Section 9.9. English Language . All notices required or permitted to be given hereunder, and all written, electronic, oral or other communications between the Parties regarding this Agreement will be in the English language. This Agreement is in the English language only, which language will be controlling in all respects, and all versions hereof in any other language will be for accommodation only and will not be binding upon the Parties.

Section 9.10. Amendment and Waiver . No amendment or waiver of any provision of this Agreement, and no consent to any departure therefrom, shall be effective unless the same shall be in writing and signed by an authorized representative of each Party, and such waiver or consent shall be effective only for the specific purpose for which it is given. No failure on the part of a Party to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies provided for in this Agreement are cumulative and are not exclusive of any remedies provided for by law.

Section 9.11. Severability . If any of the provisions of this Agreement are found to be inconsistent with, or void under, applicable laws, the validity of the remaining provisions shall not thereby be affected. In such a case the Parties shall re-negotiate the ineffective provision in good faith in order to replace it with a provision affording the same rights, obligations and economic benefits to the Parties as the ineffective provision.

Section 9.12. Entire Agreement . This Agreement and the documents executed and delivered on the date hereof pursuant hereto or in connection herewith, contain the entire agreement among the Parties with respect to the matters addressed herein and therein and supersede all prior representations, inducements, promises or agreements, oral or otherwise, which are not embodied herein or therein.

Section 9.13. Assignment .

(a) Novavax may not assign this Agreement, in whole or in part, without the advance written consent of the Company; provided, however, that this Agreement shall be automatically assigned to Novavax’s successor in connection with the acquisition, merger or sale of Novavax or the sale, transfer, lease, assignment or disposal of all or substantially all of the property or assets of Novavax, whether by way of a single transaction or a series of related transactions, and such successor shall be fully bound by the terms and conditions hereof.

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whether by way of a single transaction or a series of related transactions, including a Change in Control of the Company (as that term is defined in Schedule II of the Joint Venture Agreement), and such successor shall be fully bound by the terms and conditions hereof; provided that any such automatic assignment by Company within the scope of Schedule II of the Joint Venture Agreement shall only be effective if such transaction was approved by Novavax under and pursuant to the Joint Venture Agreement for so long as such approval rights of Novavax under the Joint Venture Agreement have not been terminated.

Section 9.14. Counterparts . This Agreement may be executed in one or more identical counterparts, each of which will be deemed to be an original, and which collectively will be deemed to be one and the same instrument.

[Signature Page to Follow]

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

In Witness Whereof, the Parties have by duly authorized persons executed this Technical Services Agreement as of the Execution Date.


Novavax, Inc.		CPL Biologicals Limited

By:	/s/ Rahul Singhvi Rahul Singhvi	By:	/s/ Rajiv I. Modi Rajiv I. Modi
	President and CEO		Managing Director

[Signature Page to Technical Services Agreement]

Exhibit 10.7

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
SEASONAL / OTHER LICENSE AGREEMENT

This License Agreement (the “ Agreement ”) is executed this March 31, 2009 (the " Execution Date ”), to be effective as set forth in Article 4, by and between Novavax, Inc. , a Delaware corporation having an address at 9920 Belward Campus Drive, Rockville, Maryland 20850, United States of America (“ Novavax ”) and CPL Biologicals Limited , a limited company incorporated under the laws of India having an address at “Cadila Corporate Campus”, Sarkhej-Dholka Road, Bhat, Ahmedabad — 382210, Gujarat, India (“ Company ”). Novavax and Company are sometimes referred to herein each individually as a “Party” and collectively as the “Parties.”

RECITALS

Whereas, Novavax is a specialty biopharmaceutical company engaged in the research, development and commercialization of its virus like particle technology into vaccine products for the prevention of infectious diseases such as seasonal influenza and other infectious diseases;

Whereas, Novavax Controls the Licensed Rights, as defined below;

Whereas, Company wishes to obtain a license under the Licensed Rights, to practice the processes included or claimed in the Licensed Rights and to Develop and Commercialize Licensed Products; and

Whereas, Novavax is willing to grant such license on the terms and conditions of this Agreement.

Now, Therefore, in consideration of the foregoing premises and the mutual covenants set forth below, and for other good and valuable consideration, the receipt of which is hereby acknowledged, Novavax and Company hereby agree as follows:

ARTICLE 1

DEFINITIONS

References in the body of this Agreement to “Sections” will refer to the sections of this Agreement. In addition, as used herein, the following initially capitalized terms will have the following meanings:

1.1 “Affiliate” means any corporation or other business entity controlled by, controlling, or under common control with a Party, with “control” (for purposes of this Section 1.1 only) meaning (a) direct or indirect beneficial ownership of fifty percent (50%) or more of the voting stock (or, in the case of a non-corporate entity, of the equity interests with the power to direct the management and policies) of such corporation or other business entity, or (b) possession, directly or indirectly, of the power to direct, or cause the direction of, the management and policies of such corporation or other business entity, whether through the ownership of voting securities,

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by contract, or otherwise; provided that for purposes of this Agreement, Novavax and Cadila Pharmaceuticals Limited shall not be deemed to be an Affiliate of Company.

1.2 “Business Day” means any day other than a Saturday, Sunday or other day on which the principal commercial banks located in Mumbai, India and Washington, DC, United States are not open for business during normal business hours.

1.3 “Commercialize” or “Commercialization” means all activities that are undertaken to prepare for launch before Regulatory Approval (including pricing and reimbursement approvals) undertaken after Regulatory Approval for a particular Licensed Product and that relate to the commercial marketing and sale of such Licensed Product including advertising, sales, marketing, promotion, distribution, and phase IV clinical trials.

1.4 “Control” means, with respect to any intellectual property right, that a Party owns or has a license to such item or right, and has the ability to grant a license or sublicense in or to such right without violating the terms of any agreement or other arrangement with any Third Party existing at the time that this Agreement first requires such Party to grant the other Party such license or sublicense, provided that, for the avoidance of doubt, if the ability to grant such license or sublicense without violating the terms of any such agreement or other arrangement arises after such time, the license or sublicense shall be deemed granted hereunder at such later date.

1.5 “Develop” or “Development” means the performance of all non-clinical, pre-clinical and clinical development, manufacturing and regulatory activities for a Licensed Product that are required to obtain Regulatory Approval of a Licensed Product in the Territory.

1.6 “Developed Know-How” has the meaning in Section 5.1.

1.7 “Effective Date ” means the date on which the condition precedent set forth in Article 4 is first satisfied.

1.8 “Governmental Authority” means any applicable court, agency, department or other instrumentality of any foreign, federal, state, county, city or other political subdivision.

1.9 “IND” means a U.S. Food and Drug Administration investigational new drug application, or its foreign equivalent.

1.10 “Joint Venture Agreement” means the Joint Venture Agreement by and between Novavax and Cadila Pharmaceuticals Limited, dated March 31, 2009.

1.11 “Know-How” means all tangible and intangible (a) techniques, technology, practices, trade secrets, inventions (whether patentable or not), methods, protocols, processes, formulas, knowledge, know-how, skill, experience, records, documents, data and results (including pharmacological, toxicological, non-clinical and clinical test data and results), analytical and quality control data, results or descriptions, software and algorithms and (b) compositions of matter, cells, cell lines, assays, animal models and physical, biological or chemical material.

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1.12 “Laws” means all applicable laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law of any federal, national, multinational, state, provincial, or other political subdivision, domestic or foreign.

1.13 “Licensed Product” means (a) Novavax’s current trivalent, intra-muscular seasonal influenza vaccine containing a virus like particle (VLP) consisting of an avian influenza M1 protein or influenza M1 protein containing an avian influenza M1 L-domain sequence and a seasonal influenza HA and seasonal influenza NA described in the U.S. IND No. BB-IND 13787 and appropriate diluent(s) wherein the seasonal HA and seasonal NA under the IND are recommended by the World Health Organization (WHO) Collaborating Centers for Reference and Research on Influenza located at the Centers for Disease Control and Prevention (CDC) in Atlanta, Georgia, (“ Seasonal Influenza Licensed Product ”) and (b) vaccines consisting of a virus like particle (VLP) consisting of an avian influenza M1 protein or influenza M1 protein containing an avian influenza M1 L-domain sequence and one or more antigens from (i) chikun gunya virus, (ii) [* * *] dengue fever), (iii) hepatitis E [* * *] (“ Other Products ”), together with, in each case of both (a) and (b), any minor modifications thereto including, by way of example but not limitation, changes to any excipient, changes arising from a change in manufacturing process, or change in dosage, or substitution of one or more seasonal influenza HAs and/or NAs designated by the CDC for seasonal influenza HAs and/or NAs designated by the corresponding authority in India (e.g., the WHO in India). Licensed Product shall include any Other Product used in combination with another active ingredient, antigen or adjuvant. [* * *] Licensed Product shall include the trivalent, intra-muscular seasonal influenza vaccine containing a virus like particle (VLP) consisting of an avian influenza M1 protein or influenza M1 protein containing an avian influenza M1 L-domain sequence and a seasonal influenza HA and seasonal influenza NA that Novavax launches for commercial sale in the United States after Regulatory Approval of such vaccine; it being understood that for so long as (but only for so long as) such vaccine is being developed in clinical trials by or for Novavax in support for commercial launch in the United States, such vaccine shall be deemed a Licensed Product hereunder prior to commercial launch (for the purpose of allowing the Company to develop and launch such product in the Territory in accordance with the terms and conditions of this Agreement promptly following its launch by Novavax in the United States).

1.14 “Licensed Rights” means the Novavax Patents and any and all Know-How, including any Developed Know-How, owned or Controlled by Novavax at any time during the term of this Agreement which is used or embodied in, or useful for developing or manufacturing, any Licensed Products, including, without limitation, Know-How regarding Novavax’s proprietary baculovirus insect cell expression and manufacturing system and improvements thereto.

1.15 “Novavax Patents” means any and all Patents in the Territory owned or Controlled by Novavax at any time during the term of this Agreement covering or claiming a Licensed Product and/or the manufacture or use thereof including, without limitation, the Patents listed on Schedule 1 .

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applications for patents and inventors’ certificates and patents that issue therefrom, including, without limitation, provisional applications, continuations, continuations-in-part, divisional and substitute applications with respect to any of the foregoing.

1.17 " Program Data ” means (a) research, preclinical, clinical, manufacturing and similar data, information, material and results, (b) regulatory filings and approvals, and (c) sales and marketing information.

1.18 “Regulatory Approval” means any and all approvals (including supplements, amendments, pre- and post-approvals, pricing and reimbursement approvals), licenses, registrations or authorizations of any national, supra-national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity, that are necessary for the manufacture, distribution, use or widespread sale of a Licensed Product in a regulatory jurisdiction in the Territory.

1.19 “Regulatory Authority” means any Governmental Authority with responsibility for granting any licenses or approvals necessary for the marketing and sale of pharmaceutical products in the Territory.

1.20 “Regulatory Documentation” means, with respect to a Licensed Product, all Regulatory Filings and supporting documents created, submitted to a Regulatory Authority, and all data contained therein, including, without limitation, any Investigational New Drug Application, New Drug Application, Marketing Authorization Application, foreign counterparts thereof, Investigator’s Brochures, drug master files, correspondence to and from a Regulatory Authority, minutes from teleconferences with Regulatory Authorities, registrations and licenses, regulatory drug lists, advertising and promotion documents shared with Regulatory Authorities, adverse event files, complaint files and manufacturing records.

1.21 “Regulatory Filing” means the foreign counterparts of an Investigation New Drug Application, New Drug Application, Marketing Authorization Application and any other filings required by Regulatory Authorities relating to the study, Development, manufacture or Commercialization of any Licensed Product in the Territory.

1.22 “Technical Services Agreement” means that certain Technical Services Agreement between Novavax and Company dated as of the date hereof.

1.23 “Territory” means India.

1.24 “Third Party” means a person or entity other than (a) Novavax, (b) Company, (c) an Affiliate of Novavax or (d) an Affiliate of Company.

1.25 “U.S.” means the United States of America.

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ARTICLE 2

LICENSES

2.1 License Grant to Company. Novavax hereby grants to Company an exclusive, fully paid-up, royalty-free (except as expressly set forth in Section 2.7), non-transferable, right and license under the Licensed Rights during the term of this Agreement to (a) research, develop, use, sell, have sold, offer to sell and import Licensed Products in the Territory, and (b) make (and have made solely by Cadila or an Affiliate of Cadila, subject to Novavax’s approval described below) Licensed Products in the Territory solely to develop, use, sell, have sold, offer to sell and import Licensed Products in the Territory. The foregoing license shall be exclusive for Licensed Products in the Territory, even as to Novavax, provided that Novavax retains the right to perform its obligations under this Agreement, the Technical Services Agreement and any other agreement between Company and Novavax.

Novavax shall be reasonable in granting or withholding its approval to permit Cadila or an Affiliate of Cadila to make Licensed Products in the Territory. Novavax’s approval shall be subject to its consideration of, among other things, any documentation or agreement surrounding such manufacturing of the Licensed Product (which, in any case, shall be solely for the benefit of the Company), the safeguards in place with regard to any such manufacturing, the protection of the Licensed Rights, and Novavax’s ability to conduct reasonable due diligence on any Affiliate of Cadila. In no event does the license grant to the Company under this Section 2.1 permit the Company to have Licensed Products made by a Third Party.

2.2 License Grant to Novavax. The Company hereby grants to Novavax a fully paid-up, royalty-free exclusive right and license under Developed Know-How owned or Controlled by the Company, including any Patents that issue therefrom, to (a) research, develop, use, sell, have sold, offer to sell and import (i) Seasonal Influenza Licensed Products and (ii) other seasonal influenza vaccines outside the Territory, and (b) make and have made (i) Seasonal Influenza Licensed Products and other seasonal influenza vaccines outside the Territory solely to develop, use, sell, have sold, offer to sell and import Seasonal Influenza Products outside the Territory. For clarity, the license grant to Novavax under this Section 2.2 does not include the right research, develop, use, make, have made, sell, have sold, offer to sell and import the Other Products outside the Territory.

2.3 Sublicenses. Company shall not sublicense the Licensed Rights to any Third Party without the prior written consent of Novavax, which consent may be withheld in its sole discretion. Upon execution of a sublicense, after receipt of Novavax consent, Company will notify Novavax of the execution of the sublicense and provide a copy to Novavax promptly following execution thereof.

2.4 No Implied Rights or Licenses. No right or license, other than those expressly set forth in this Agreement are granted to either party hereunder, and no additional rights will be deemed granted to either party by implication, estoppel or otherwise. All rights not expressly granted by either party to the other hereunder are reserved.

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2.5 Research Data; Right of Reference.

(a) Company shall keep complete and accurate notes, accounts and records of all Program Data with respect to Licensed Products, including the manufacture thereof. Novavax shall have the right to access, use and reference for its Development and Commercialization of its products outside the Territory Program Data related to Licensed Products in the possession or control of the Company. The Company shall provide such cooperation and assistance as reasonably requested by Novavax from time to time to effectuate the foregoing, including, without limitation by providing access to and disclosure of Program Data to Novavax and by providing such authorization and consents required for reference to regulatory filings and approvals.

(b) Company shall have the right to access, use and reference for its Development and Commercialization of Licensed Products in the Territory Program Data related to Licensed Products in the possession or control of Novavax. Novavax shall provide such cooperation and assistance as reasonably requested by Company from time to time to effectuate the foregoing, including, without limitation by providing access to and disclosure of Program Data to Company and by providing such authorization and consents required for reference to regulatory filings and approvals.

2.6 Grey Market. The Parties reasonably cooperate to formulate and implement reasonable precautions designed to prevent Licensed Products made or sold by or for such Party or its respective Affiliates and permitted sublicensees from being sold outside of its respective territory (i.e., outside the Territory for the Company and inside the Territory for Novavax). Further, each Party will take reasonable measures so that its distributors, Affiliates and wholesalers to whom the Company or Novavax provides its respective Licensed Products are aware of the respective territorial limitations.

2.7 Third Party License Agreements. The license granted under Section 2.1 may be subject to applicable terms and conditions of a license agreement with a Third Party, under which any Licensed Rights are sublicensed to the Company hereunder by Novavax (each a “ Third Party License Agreement ”). Novavax shall be responsible for maintaining the Third Party License Agreements and for any payments owed by Novavax thereunder; provided, however, that if a royalty is owed on sales of Licensed Product by or for the Company in the Territory under such Third Party License Agreement, such payments will be paid by Company.

2.8 Combination Products Reservation. Novavax shall not, directly or indirectly, (i) engage in, promote, or finance the research, development, or commercialization of, or (ii) grant any license, or any similar rights with respect to, to a Third Party, in each case of (i) and (ii), a Licensed Product in combination with another active ingredient, antigen or adjuvant in the Territory.

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ARTICLE 3

LICENSED PRODUCT DEVELOPMENT AND COMMERCIALIZATION

3.1 Development and Commercialization of Licensed Products.

(a) General. Company will have sole responsibility, at Company’s sole expense, for all Development and Commercialization of Licensed Products in the Territory in accordance with the terms of this Agreement.

(b) Development and Commercialization of Seasonal Influenza Licensed Products. Prior to [* * *], Company shall present to Novavax for its written approval Development plans for the Seasonal Influenza Licensed Product which shall specify preclinical studies (including a toxicology program and other preclinical testing), human clinical trials, manufacturing scale up, Regulatory Approval strategy and any other significant Development activities, that Company plans to perform to obtain Regulatory Approval of such Licensed Products in the Territory (the “ Seasonal Development Plans ”). Novavax may reasonably request adjustments to activities described in such Development plans as a condition to granting its approval. In no event shall Company materially alter a Seasonal Development Plan without Novavax’s prior written consent. Company shall conduct Development of such Licensed Products in a manner that is materially consistent with the Seasonal Development Plans. All clinical trial protocols for Seasonal Influenza Licensed Products conducted by Company shall require the prior written approval of Novavax. Prior to [* * *] Company shall present to Novavax for its written approval a plan to Commercialize the Seasonal Influenza Licensed Product which shall specify a multi-year marketing and public relations strategy, operational plans to implement such strategies and any other significant Commercialization activities (the “ Seasonal Commercialization Plan ”). Novavax may reasonably request adjustments to the Commercialization plan as a condition to granting its approval. In no event shall Company materially alter the Seasonal Commercialization Plan without Novavax’s prior written consent. Company shall conduct Commercialization of such Licensed Products in a manner that is materially consistent with the Seasonal Commercialization Plan. Novavax acknowledges that the Licensed Products are being contributed by Novavax to the Company in accordance with the Joint Venture Agreement and that if the Company cannot Develop and Commercialize such Licensed Products it will not obtain the value of such contribution. Company acknowledges that Novavax (or its affiliates or licensees) are Developing and Commercializing Licensed Products outside the Territory and Company’s activities could raise safety concerns and have an impact on Novavax’s activities including the Regulatory Approval and regulatory profile of an approved Licensed Product outside the Territory. Accordingly, taking into account Novavax’s and Company’s respective interests including, without limitation, as provided in the two preceding sentences, Novavax shall not unreasonably withhold, delay or condition any of its consents or approvals hereunder.

(c) Development and Commercialization of Other Products. Before beginning any Development or Commercialization activities with respect to an Other Product, Company shall present to Novavax Development plans and Commercialization plans, as the case may be, for such Other Product and material alterations to such plans. Novavax may review and comment on such Other Product Development plans and Commercialization plans and material

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alterations to such plans and Company will consider in good faith the reasonable comments of Novavax. Company shall conduct Development and Commercialization of such Other Product in a manner that is materially consistent with such Other Product Development plans and Commercialization plans.

3.2 Regulatory Affairs. Company will be responsible for developing Regulatory Documentation and preparing and submitting Regulatory Filings, seeking Regulatory Approvals, and maintaining Regulatory Approvals for Licensed Products in the Territory. As set forth in the Technical Services Agreement, Novavax will cooperate with Company in preparing and filing all such reports.

3.3 Manufacture and Supply. Company will be responsible for the manufacture of Licensed Product in the Territory and for all costs associated therewith. Certain amount of supply of preclinical and clinical supply of Licensed Product will be made under the Supply Agreement, dated as of March 31, 2009, between Company and Novavax (the “ Supply Agreement ”).

3.4 Adverse Event Reporting. Company will maintain a record of all non-medical and medical Licensed Product-related complaints and reports of Adverse Events in the Territory with respect to any Licensed Product Developed or Commercialized by the Company. At the request of either party, Novavax and the Company shall enter into reasonable and customary pharmacovigilance agreement with respect to sharing of adverse event data and information for Licensed Products as required to comply with applicable laws and regulations.

3.5 Development and Commercial Reporting. During the Term of this Agreement, Company will provide a half-yearly written progress report to Novavax summarizing the Development and Commercialization of Licensed Product(s) during the prior six months. Each such progress report will be provided to Novavax by Company no later than March 1 ^st or September 1 ^st (as the case may be) of each year following the Effective Date.

3.6 Minor Modifications; Intent. During the Term of this Agreement, Novavax will promptly provide Company with details of any minor modifications it makes to the Seasonal Influenza Licensed Product as Novavax develops it for Regulatory Approval. [* * *]

ARTICLE 4

CONDITION PRECEDENT

This Agreement, including the license grants, obligations and benefits herein, shall only become effective if, and shall automatically become effective upon, satisfaction of the following condition precedent; provided that such condition is satisfied before [* * *]:

Obtain the approval of the Foreign Investment Promotion Board for the issuance to Novavax of [* * *] shares of Company.

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ARTICLE 5

INTELLECTUAL PROPERTY

5.1 Disclosure. During the Term, the Parties will promptly disclose to one another all Know-How (whether patentable or not) developed, conceived or reduced to practice during the Development, manufacture or Commercialization of a Licensed Product which is regarding or directed to a Licensed Product (“ Developed Know-How ”). Novavax shall also disclose to the Company any Know-How within the Licensed Rights obtained, licensed or generated after the Effective Date which is not included within the Developed Know-How.

5.2 Ownership. Novavax shall own all Developed Know-How and any other intellectual property that is conceived and reduced to practice solely by Novavax. The Company shall own all Developed Know-How and any other intellectual property that is conceived and reduced to practice solely by Company. Novavax and the Company shall jointly own in accordance with U.S. Laws regarding joint ownership of the applicable type of intellectual property, all Developed Know-How and any other intellectual property that is conceived or reduced to practice by Novavax and Company jointly.

5.3 Prosecution and Maintenance of Patents. Novavax shall have the sole and exclusive right and authority to control the filing, prosecution, maintenance, and renewal of all Novavax Patents and any Patents that result from Developed Know-How which is owned by Novavax or jointly owned as provided in Section 5.2, at its own expense. Company shall have the sole and exclusive right and authority to control the filing, prosecution, maintenance and renewal of any Patents that result from Developed Know-How owned by Company as provided in Section 5.2. With respect to any such Patents in the Territory and with respect to any such Patents that are subject to the license granted to Novavax in Section 2.2 anywhere in the world (the “ ROW Patents ”), the prosecuting party shall (i) provide the other party with copies of all material filings, documentation and correspondence from, sent to or filed with patent offices in the Territory or anywhere in the world for the ROW Patents, and (ii) provide the other party with a reasonable opportunity to comment upon all filings and actions with such patent offices in advance of submissions to such patent offices. For purposes of this Section 5.3, “filing, prosecution and maintenance” of patents shall be deemed to include, without limitation, appeals to administrative or judicial entities having jurisdiction over patentability, the conduct of interferences or oppositions, and/or requests for re-examinations, reissues or extensions of patent terms.

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and maintenance of such Patent and timely file any required documents and responses with the relevant government patent office in the Territory, or with respect to ROW Patents anywhere in the world, with respect thereto, and the other party may elect (in its sole discretion) to prosecute and maintain such Patent, at the other party’s sole expense. In such event, upon the request of and, at the expense of the other party, the prosecuting party shall assign to the other party all of its right, title and interest in, to and under such Patent which the prosecuting party has decided to abandon and provide reasonable cooperation to the other party with respect thereto (including, without limitation, providing necessary information and executing relevant documents).

5.5 Enforcement of Patents.

(a) Infringement by Third Parties. In the event that Novavax or the Company becomes aware of or has reasonable suspicions of third party activities in the Territory that could constitute infringement of the Novavax Patents or Patents that issue from Developed Know-How in the Territory, or with respect to ROW Patents anywhere in the world, or misappropriation of the Novavax Know-How or Developed Know-How in the Territory, or with respect to Developed Know-How any that is subject to the license granted to Novavax in Section 2.2 anywhere in the world (“ ROW Know-How ”), then such party shall promptly notify the other parties of such third party activities, including identification of the third party and delineation of the facts relating to such third party activities. The Company shall have the right (but shall not be obligated) to enforce the Novavax Patents, Novavax Know-How and Developed Know-How against any actual or alleged infringement or misappropriation thereof in the Territory by a third party (by bringing a suit, action or proceeding against such third party), at the Company’s sole expense. Novavax shall have the right (but shall not be obligated) to enforce the ROW Patents and ROW Know-How within the scope of the licenses granted to Novavax in Section 2.2 against any actual or alleged infringement or misappropriation thereof outside the Territory by a third party (by bringing a suit, action or proceeding against such third party), at Novavax’s sole expense. If the Company does not enforce the Novavax Patents or Know-How by (i) one hundred (100) days following the notice of alleged infringement or (ii) thirty (30) days before the time limit, if any, set forth in the appropriate laws and regulations for the filing of such an action, whichever comes first, then Novavax shall have the right (but not the obligation) to enforce the Novavax Patents and Novavax Know-How against any actual or alleged infringement or misappropriation thereof in the Territory by a third party (by bringing a suit, action or proceeding against such party), at Novavax’s sole expense. The non-prosecuting party shall reasonably cooperate with the prosecuting party in such enforcement activities, at the prosecuting party’s expense, including by agreeing to be named as a party to (or bringing in its own name) such suit, action or proceeding for the benefit of the non-prosecuting party if required for such enforcement action to proceed. The prosecuting party shall keep the non-prosecuting party reasonably informed regarding any such enforcement action and shall consider in good faith the reasonable comments and suggestions of the non-prosecuting party related to such suit, action or proceeding. All recoveries received by the prosecuting party from any such enforcement action shall be retained by the prosecuting party.

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other attack upon the validity, title or enforceability of the Licensed Rights or the ROW Patents or ROW Know-How by a Third Party. Owner of the subject Patent will have the right (but not the obligation) to defend any such challenge in the Territory. If the owner of the subject Patent commences a defense against the alleged or threatened challenge (i) within sixty (60) days following the detection of the alleged challenge, or (ii) ten (10) Business Days before the time limit, if any, set forth in appropriate Laws and regulations for making a filing in defense of such a challenge, whichever comes first, then the owner of the subject Patent will so notify the other party promptly. Notwithstanding the foregoing, if any such action for declaratory judgment, nullity action, or other attack upon the validity, title or enforceability of the Licensed Right includes or will include counterclaims of infringement of the Licensed Rights, ROW Patents or ROW Know-How by the Third Party, control of such action or other attack shall be governed by Section 5.5(a).

ARTICLE 6

CONFIDENTIALITY; PUBLICATION

6.1 Confidentiality . The Parties anticipate that under this Agreement each Party will provide confidential and/or proprietary information to the other Party and that the use and disclosure of such information shall be governed by Article 18 of the Joint Venture Agreement which is hereby incorporated by reference.

6.2 Publication.

(a) Each Party shall have the right to publish the data and results related to Licensed Products, subject to the rest of this Section 6.2. Prior to public disclosure or submission for publication of a proposed publication describing the results of any scientific or clinical activity relating to a Licensed Product, the Party proposing such publication shall send the other Party by expedited delivery a copy of the proposed publication to be submitted and shall allow the other Party a reasonable time period (but not more than sixty (60) days from the date of confirmed receipt) in which to determine whether the proposed publication contains subject matter for which patent protection should be sought (prior to publication of such proposed publication) for the purpose of protecting an invention, or whether the proposed publication contains the Confidential Information of such other Party, or whether the proposed publication contains information that is reasonably likely to have a material adverse impact on the development or commercialization of Licensed Products. Following the expiration of applicable time period for review, the Party proposing such publication shall be free to submit such proposed publication for publication and publish or otherwise disclose to the public such scientific or clinical results, subject to the procedures set forth in Section 6.2(b).

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proposing publication shall remove such Confidential Information from such proposed publication prior to any publication thereof, unless the other Party agrees otherwise in writing. On receipt of written notice from the other Party that such proposed publication contains a patentable invention owned by it or in which it otherwise has exclusive rights hereunder, the Party proposing publication shall delay public disclosure of such information or submission of the proposed publication for an additional period of thirty (30) days to permit preparation and filing of a patent application on such invention. The Party proposing publication shall thereafter be free to publish or disclose such information.

ARTICLE 7

REPRESENTATIONS AND WARRANTIES

7.1 Mutual Warranties. Each of Novavax and Company hereby represents, warrants and covenants to the other as of the Execution Date that:

(c) it has not granted, and during the Term it will not grant, any right to any Third Party that would conflict with the rights granted to the other Party hereunder. It has (or will have at the time performance is due) maintained and will maintain and keep in full force and effect all agreements necessary to perform its obligations hereunder; and

(d) all necessary consents, approvals and authorizations of all governmental authorities and other persons required to be obtained by such Party to enter into, or perform its obligations under, this Agreement have been obtained.

7.2 Representations by Novavax. In addition to the representations and warranties made in Section 7.1, Novavax hereby represents, warrants and covenants to Company that:

(a) as of the Execution Date, the Licensed Rights are subsisting and are not the subject of any interference, re-issue, re-exam, opposition or appeal proceedings;

(b) as of the Execution Date, no Third Party has filed, pursued or maintained or, to the best of its knowledge, threatened in writing to file, pursue or maintain any claim, lawsuit, charge or other action involving any Licensed Right including any claim, lawsuit, charge, or action alleging that any Licensed Right is invalid or unenforceable;

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(c) as of the Execution Date and to the best of its knowledge, all employees and agents of Novavax who have performed any activities on its behalf in connection with research regarding the Licensed Rights have properly assigned to Novavax the whole of their rights in any intellectual property made, discovered or developed by them as a result of such research, and no Third Party has any rights to any such intellectual property;

(d) as of the Effective Date, the Licensed Rights are free and clear of any liens, charges, encumbrances or rights of others, to possession or use that may interfere with Novavax’s possession or use under this Agreement;

(e) as of the Effective Date, it has sufficient rights to grant the licenses granted to the Company hereunder; and

(f) as of the Effective Date, all third party agreements licensing any Licensed Rights to Novavax, which are sublicensed to the Company hereunder, are currently in full force and effect, and it has not received notice of material breach or termination thereof.

7.3 DISCLAIMER OF WARRANTIES . Except as expressly set forth herein, EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF DESIGN, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICES, IN ALL CASES WITH RESPECT THERETO. Without limiting the generality of the foregoing, each Party expressly does not warrant, and disclaims any warranties with regards to: (a) the success of any study or test commenced under this Agreement, (b) the safety or usefulness for any purpose of the technology or Materials it provides or discovers under this Agreement; and/or (c) the validity, enforceability, or non-infringement of any intellectual property rights or technology it provides or licenses to the other Party under this Agreement.

ARTICLE 8

INDEMNIFICATION

8.1 Indemnification by Company. Company will indemnify, defend and hold harmless Novavax, its affiliates, directors, officers and employees (each a “ Novavax Indemnitee ”) from and against any and all liability, loss, damage or expense (including without limitation reasonable attorneys fees) it may suffer as the result of Third Party claims, demands, actions and proceedings brought against it (collectively, “ Losses ”) to the extent such Losses result from the (a) negligence or willful misconduct by Company, its Affiliates, employees, agents, or Third Party contractors, or (b) manufacture, use, sale, or offer for sale of a Licensed Product in the Territory due to a design defect or a manufacturing defect, including but not limited to, a Loss related to the death of or injury to a Third Party. Company’s obligation to indemnify Novavax pursuant to this Section 8.1 will not apply to the extent of any Loss that arises from the (i) material breach by Novavax of its representations, warranties or covenants contained within this Agreement, (ii) negligence or willful misconduct of any Novavax Indemnitee, or (iii) a manufacturing defect of Licensed Product supplied by Novavax under the Supply Agreement.

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

8.2 Indemnification by Novavax. Novavax will indemnify, defend and hold harmless Company, its affiliates, directors, officers and employees (each a “ Company Indemnitee ”) from and against any and all Losses to the extent such Losses result from the (a) negligence or willful misconduct by Novavax, its Affiliates, employees, agents or Third Party contractors, or (b) manufacture, use, sale, or offer for sale of a Licensed Product outside the Territory due to a design defect or a manufacturing defect, including but not limited to, a Loss related to the death of or injury to a Third Party. Novavax’s obligation to indemnify the Company Indemnitee pursuant to this Section 8.2 will not apply to the extent of any Loss that arises from the (i) material breach by Company of its representations, warranties or covenants contained within this Agreement or (ii) negligence or willful misconduct of any Company Indemnitee.

8.3 Procedures. Indemnitor’s agreement to indemnify, defend and hold harmless an Indemnitee is conditioned on Indemnitee (a) providing prompt written notice of any claim giving rise to an indemnification obligation hereunder but only if a failure to so notify causes prejudicial harm to the Indemnitor’s ability to defend, (b) permitting Indemnitor to assume full responsibility to investigate, prepare for and defend against any such claim, (c) providing reasonable assistance in the defense of such claim at Indemnitor’s reasonable expense, and (d) not compromising or settling such claim without Indemnitor’s advance written consent.

8.4 Insurance. Each Party will maintain comprehensive general liability insurance coverage, including products liability, in amounts it reasonably determines are appropriate with respect to the Development and Commercialization of Licensed Products in its respective territory.

8.5 Limitation of Liability. EXCEPT TO THE EXTENT (A) SUCH PARTY MAY BE REQUIRED TO INDEMNIFY THE OTHER PARTY UNDER THIS ARTICLE 8, OR (B) AS REGARDS A BREACH OF A PARTY’S RESPONSIBILITIES PURSUANT TO ARTICLE 6, NEITHER PARTY NOR ITS RESPECTIVE AFFILIATES WILL BE LIABLE TO THE OTHER PARTY FOR ANY LOSS OF PROFITS, LOSS OF BUSINESS OR INTERRUPTION OF BUSINESS, OR FOR ANY OTHER INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES UNDER THIS AGREEMENT, WHETHER IN CONTRACT, WARRANTY, TORT, STRICT LIABILITY OR OTHERWISE, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS OR DAMAGES.

ARTICLE 9

TERM; BREACH

9.1 Term and Termination. The term of this Agreement will commence on the Execution Date and will continue until (a) the Company provides sixty (60) days prior written notice of termination to Novavax, (b) the Parties mutually agree in writing to terminate the Agreement, or (c) Novavax terminates the Joint Venture Agreement by providing a Notice of Termination under and pursuant to Section 11.2 of the Joint Venture Agreement. In no event shall either Party have the right to terminate this Agreement based upon any breach by the other Party, and to the extent that any right to terminate is provided under any Laws, the Parties hereby waive such right.

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

9.2 Breach and Remedies. In addition to any remedies available under any laws, the following remedies shall be available to a party in the event of the following breaches

(a) In the event that Section 2.6 is materially breached by either party, the non-breaching party shall be entitled to damages equal to its lost profit from lost sales of Licensed Products in or out of the Territory (as applicable) due to the “grey market” breach.

(b) In the event that Company (i) materially alters a Seasonal Development Plan or Seasonal Commercialization Plan for Seasonal Influenza Licensed Product without Novavax’s prior written consent, or (ii) initiates a clinical trial of Seasonal Influenza Licensed Product without Novavax’s approval or materially deviates from an approved clinical trial protocol for Seasonal Influenza Licensed Product without the prior written consent of Novavax, then Novavax shall have right to obtain injunctive relief with respect to such breach before any court of competent jurisdiction in accordance with Section 10.3.

9.3 Survival. The following provisions of this Agreement shall survive expiration or termination of this Agreement for any reason: Article 8 and Sections 6.1 and 7.3. In the event that this Agreement is terminated under 9.1(c), the license grant under Section 2.2 shall survive as a fully paid, exclusive license solely under Developed Know-how owned or Controlled by Company, including any Patents that issue therefrom, as of the effective date of termination (i.e., excluding any intellectual property developed or acquired after such date of termination).

ARTICLE 10

DISPUTE RESOLUTION

10.1 Disputes. The Parties recognize that disputes as to certain matters may from time to time arise during the Term which relate to either Party’s rights and/or obligations hereunder. It is the objective of the Parties to establish procedures to facilitate the resolution of disputes arising under this Agreement in an expedient manner by mutual cooperation and without resort to litigation. To accomplish this objective, the Parties agree to follow the procedures set forth in this Article 10 if and when a dispute arises under this Agreement.

10.2 Arbitration. Any dispute arising between the Parties out of or in connection with the implementation or interpretation of this Agreement shall, if not settled amicably within ninety (90) days from the date that the dispute arose, be finally settled by three (3) arbitrators. Each Party shall be entitled to appoint one (1) arbitrator and the two (2) so appointed shall appoint the third arbitrator in accordance with the Indian Arbitration and Conciliation Act, 1996. It is hereby agreed that Part I of the Indian Arbitration and Conciliation Act, 1996 (except for the provisions of Section 9 thereof) shall not apply to the arbitration under this Agreement. The language of the arbitration proceedings shall be English and its place shall be Singapore. The arbitral award or determination shall be final and subject to no appeal and shall deal with the question of costs of arbitration and all matters related thereto.

The Parties agree that it would be impossible or inadequate to measure and calculate their damages from any breach of the Agreement though great and irreparable. Accordingly, each Party agrees

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

that if the other Party breaches this Agreement, the non-breaching party will have available, in addition to any other right or remedy available, the right to obtain an injunction from a court of competent jurisdiction restraining such breach or threatened breach and specific performance of any provision of this Agreement.

10.3 Equitable Claims. Notwithstanding anything to the contrary in this Article 10, either Party has the right to seek temporary injunctive relief or any other interim equitable remedy in any court of competent jurisdiction as may be available to such Party under the laws applicable to such jurisdiction that may be necessary to protect the rights or property of that Party until such time as any dispute underlying such temporary injunctive relief or any other interim equitable remedy has been resolved in accordance with Section 10.2.

10.4 Governing Law. The substantive laws of India will govern the resolution of all disputes, controversies and claims under, arising out of or relating to the validity, construction, enforceability or performance of this Agreement and any related remedies, without giving effect to any choice of law rules.

10.5 Award. Each Party will abide by any arbitral award rendered pursuant to this Article 10. If a Party resists enforcement of an arbitral award, any costs, fees or taxes incident to enforcement will be charged against that Party to the extent permitted by Law. Each Party will bear its own legal fees for arbitration, and the arbitrator(s) will assess their costs, fees and expenses against the Party losing the arbitration.

10.6 Injunctive Relief. If a Party makes a sufficient showing under the rules and standards set forth in the rules of civil procedure and applicable Law, the arbitrator may, and the Parties will abide by, injunctive measures after either Party submits in writing for arbitration claims requiring immediate relief. Notwithstanding the foregoing, and in accordance with Section 10.3, a Party will also be free at any time to bring an Equitable Claim to any court of competent jurisdiction without submitting such request to an arbitrator.

10.7 Confidentiality. Any arbitration proceeding, including without limitation the existence of any dispute submitted to arbitration and any arbitral award or decision, will be Confidential Information of both Parties, and the arbitrator(s) will issue appropriate protective orders to safeguard each Party’s Confidential Information, provided that such Confidential Information may be disclosed solely as necessary in connection with the enforcement of an arbitral award or as otherwise required by Law (subject to Section 6.3).

ARTICLE 11

MISCELLANEOUS

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

subsequent alteration, amendment, change or addition to this Agreement will be binding upon the Parties unless reduced to writing and signed by the respective authorized officers of the Parties.

11.2 Third Party Contractors. The Parties will perform their obligations under this Agreement as Third Party contractors and nothing contained in this Agreement will be construed to be inconsistent with such relationship or status. This Agreement will not constitute, create or in any way be interpreted as a joint venture or partnership of any kind.

11.3 Notices. Any notice, request, demand, waiver, consent, approval or other communication permitted or required under this Agreement ( “Notice” ) will be in writing, will refer specifically to this Agreement and will be deemed given only if sent by electronic mail (with receipt confirmed), facsimile transmission (with transmission confirmed) or by an internationally recognized delivery service that maintains records of delivery, addressed to the Parties at their respective addresses specified in this Section 11.3 or to such other address as the Party to whom notice is to be given may have provided to the other Party in accordance with this Section 11.3. Any notice delivered by electronic mail or facsimile will be confirmed by a hard copy delivered as soon as practicable thereafter by an internationally recognized overnight delivery service. Such Notice will be deemed to have been given on the second Business Day (at the place of delivery) after deposit with an internationally recognized delivery service. This Section 11.3 is not intended to govern the day-to-day business communications necessary between the Parties in performing their obligations under the terms of this Agreement.


If to Novavax:		Novavax, Inc.
		9920 Belaward Campus Drive
		Rockville Maryland 20850
		Attn: Ray Hage, Senior Vice President
		Email: Rhage@Novavax.com
		Facsimile No.: 240-268-2122

If to Company:		CPL Biologicals Limited
		Cadila Corporate Campus
		Sarkhej-Dholka Road
		Bhat, Ahmedabad — 382210
		Gujarat, India
		Attn: Dr. Rajiv I. Modi, Managing Director
		Email: rimodi@cadilapharma.co.in
		Facsimile No.: +91 (02718) 225031

11.4 Assignment.

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

property or assets of Novavax, whether by way of a single transaction or a series of related transactions, and such successor shall be fully bound by the terms and conditions hereof.

(b) The Company may not assign this Agreement, in whole or in part, without the advance written consent of Novavax; provided, however, that this Agreement shall be automatically assigned to the Company’s successor in connection with the sale, transfer, lease, assignment or disposal of all or substantially all of the property or assets of the Company , whether by way of a single transaction or a series of related transactions, including a Change in Control of the Company (as that term is defined in Schedule II of the Joint Venture Agreement), and such successor shall be fully bound by the terms and conditions hereof; provided that any such automatic assignment by Company within the scope of Schedule II of the Joint Venture Agreement shall only be effective if such transaction was approved by Novavax under and pursuant to the Joint Venture Agreement for so long as such approval rights of Novavax under the Joint Venture Agreement have not been terminated.

11.5 Force Majeure. Both Parties will be excused from the performance of their obligations under this Agreement (except for the obligation to pay money) to the extent that such performance is prevented by force majeure and the nonperforming Party promptly provides notice of the prevention to the other Party. Such excuse will be continued so long as the condition constituting force majeure continues and the nonperforming Party takes reasonable efforts to remove the condition. For purposes of this Agreement, force majeure will include conditions beyond the control of the Parties, including without limitation, an act of God, voluntary or involuntary compliance with any regulation, Law or order of any government, war, civil commotion, labor strike or lock-out, acts of terrorism, epidemic, failure or default of public utilities or common carriers, destruction of production facilities or materials by fire, earthquake, storm or like catastrophe.

11.6 Headings. The headings for each article and section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular article or section.

11.7 No Strict Construction. This Agreement has been prepared jointly and will not be strictly construed against either Party.

11.8 Ambiguities. Ambiguities and uncertainties in this Agreement, if any, will not be interpreted against either Party, irrespective of which Party may be deemed to have caused the ambiguity or uncertainty to exist.

11.9 English Language. All notices required or permitted to be given hereunder, and all written, electronic, oral or other communications between the Parties regarding this Agreement will be in the English language. This Agreement is in the English language only, which language will be controlling in all respects, and all versions hereof in any other language will be for accommodation only and will not be binding upon the Parties.

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

11.10 No Waiver. Any delay in enforcing a Party’s rights under this Agreement or any waiver as to a particular default or other matter will not constitute a waiver of such Party’s rights to the future enforcement of its rights under this Agreement, excepting only as to an express written and signed waiver as to a particular matter for a particular period of time.

11.11 Severability. If one or more of the provisions in this Agreement are deemed unenforceable by Law, then such provision will be deemed stricken from this Agreement and the remaining provisions will continue in full force and effect and shall be interpreted to give full effect to the commercial agreement between the Parties.

11.12 Counterparts. This Agreement may be executed in one or more identical counterparts, each of which will be deemed to be an original, and which collectively will be deemed to be one and the same instrument.

[Signature Page to Follow]

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

In Witness Whereof, the Parties have by duly authorized persons executed this License Agreement as of the Execution Date.


Novavax, Inc.		CPL Biologicals Limited

By:	/s/ Rahul Singhvi Rahul Singhvi	By:	/s/ Rajiv I. Modi Rajiv I. Modi
	President and CEO		Managing Director

[Signature Page to Seasonal / Other License Agreement]

Exhibit 10.8

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
OPTION TO OBTAIN LICENSE

This Option Agreement (the “ Agreement ”) is effective this March 31, 2009 (the “ Effective Date ”), by and between Novavax, Inc. , a Delaware corporation having an address at 9920 Belward Campus Drive, Rockville, Maryland 20850, United States of America (“ Novavax ”) and CPL Biologicals Limited , a limited company incorporated under the laws of India having an address at “Cadila Corporate Campus”, Sarkhej-Dholka Road, Bhat, Ahmedabad — 382210, Gujarat, India (“ Company ”). Novavax and Company are sometimes referred to herein each individually as a “Party” and collectively as the “Parties.”

RECITALS

Whereas, Company wishes to obtain an option to obtain a license to Novavax’s pandemic influenza vaccine product when and if the same comes under the Control of Novavax in the Territory; and

Whereas, Novavax is willing to grant such option as partial consideration for shares of Company in accordance with the Joint Venture Agreement.

ARTICLE 1

DEFINITIONS

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

1.3 “Control” means, with respect to any intellectual property right, that a Party owns or has a license to such item or right, and has the ability to grant a license or sublicense in or to such right without violating the terms of any agreement or other arrangement with any Third Party existing at the time that this Agreement first requires such Party to grant the other Party such license or sublicense, provided that, for the avoidance of doubt, if the ability to grant such license or sublicense without violating the terms of any such agreement or other arrangement arises after such time, the license or sublicense shall be deemed granted hereunder at such later date.

1.4 “Joint Venture Agreement” means the Joint Venture Agreement by and between Novavax and Cadila Pharmaceuticals Limited, dated March 31, 2009.

1.5 “Know-How” means all tangible and intangible (a) techniques, technology, practices, trade secrets, inventions (whether patentable or not), methods, protocols, processes, formulas, knowledge, know-how, skill, experience, records, documents, data and results (including pharmacological, toxicological, non-clinical and clinical test data and results), analytical and quality control data, results or descriptions, software and algorithms and (b) compositions of matter, cells, cell lines, assays, animal models and physical, biological or chemical material.

1.6 “Laws” means all applicable laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law of any federal, national, multinational, state, provincial, or other political subdivision, domestic or foreign.

1.7 “Licensed Product” means Novavax’s current intra-muscular pandemic influenza vaccine containing a virus like particle (VLP) consisting of an avian influenza M1 protein or influenza M1 protein containing an avian influenza M1 L-domain sequence and a pandemic influenza HA and pandemic influenza NA described in the U.S. IND No. BB-IND 13419 wherein the pandemic HA and pandemic NA under the IND are classified as pandemic by the World Health Organization (WHO) Collaborating Centers for Reference and Research on Influenza located at the Centers for Disease Control and Prevention (CDC) in Atlanta, Georgia, together with any minor modifications thereto including, by way of example but not limitation, changes to any excipient, changes arising from a change in manufacturing process, or change in dosage. [* * *] Licensed Product shall include the pandemic influenza vaccine containing a virus like particle (VLP) consisting of an avian influenza M1 protein or an influenza M1 protein containing an avian influenza M1 L-domain sequence and a pandemic influenza HA and pandemic influenza NA that is launched by or for Novavax for commercial sale in the United States after Regulatory Approval of such vaccine; ; it being understood that for so long as (but only for so long as) such vaccine is being developed in clinical trials by or for Novavax in support for commercial launch in the United States, such vaccine shall be deemed a Licensed Product hereunder prior to commercial launch (for the purpose of allowing the Company to develop and launch such product in the Territory in accordance with the terms and conditions of this Agreement promptly following its launch by Novavax in the United States).

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

1.8 “Licensed Rights” means the Novavax Patents and any and all Know-How, including any Developed Know-How, owned or Controlled by Novavax at any time during the term of this Agreement which is used or embodied in, or useful for developing or manufacturing, any Licensed Product.

1.9 “Novavax Patents” means any and all Patents in the Territory owned or Controlled by Novavax at any time during the term of this Agreement covering or claiming a Licensed Product and/or the manufacture or use thereof including, without limitation, the Patents listed on Schedule 1 .

1.10 “Patent” means any and all (a) issued patents and inventors’ certificates and re-examinations, reissues, renewals, extensions, registrations, substitutions, supplementary protection certificates and term restorations with respect to any of the foregoing, and (b) pending applications for patents and inventors’ certificates and patents that issue therefrom, including, without limitation, provisional applications, continuations, continuations in part, divisional and substitute applications with respect to any of the foregoing.

1.11 “Territory” means India.

1.12 “Third Party” means a person or entity other than (a) Novavax, (b) Company, (c) an Affiliate of Novavax or (d) an Affiliate of Company.

ARTICLE 2

OPTION

2.1 Option Grant to Company. Novavax hereby grants to Company an exclusive, fully paid-up, royalty-free (except as expressly provided in the License Agreement) non-transferable, right and option to obtain an exclusive license in the Territory (the “Option”) under the form of License Agreement attached hereto as Exhibit A that has been executed by Novavax, exercisable at Company’s option and sole discretion, upon the later of (a) the approval of the Foreign Investment Promotion Board for the issuance to Novavax of 120,000,000 shares of Company and (b) the earlier of termination or expiration (the “ Exercise Trigger Date ”) of the Third Party agreement to which a portion of the technology that is the subject of the License Agreement is subject. Novavax shall promptly provide notice to Company upon occurrence of the Exercise Trigger Date having been met together with reasonable documentation establishing that the Exercise Trigger Date has been met (the “ Trigger Notice ”)

2.2 Exercise of Option. At any time after the Exercise Trigger Date for two (2) years of Company having received the Trigger Notice, Company may exercise the Option by sending a written notice to Novavax, along with a fully executed copy of such License Agreement.

2.3 Effectiveness of License. Immediately upon receipt of the signed Notice and fully executed License by Novavax, the License Agreement shall become immediately and automatically effective as of such date.

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

2.4 No Implied Rights or Licenses. No right or license, other than those expressly set forth in this Agreement, are granted to either party hereunder, and no additional rights will be deemed granted to either party by implication, estoppel or otherwise. All rights not expressly granted by either party to the other hereunder are reserved.

ARTICLE 3

CONFIDENTIALITY

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

4.1 Mutual Warranties. Each of Novavax and Company hereby represents, warrants and covenants to the other as of the Effective Date that:

4.2 Representations by Novavax. In addition to the representations and warranties made in Section 4.1, Novavax hereby represents, warrants and covenants to Company that:

(a) as of the Effective Date, the Licensed Rights are subsisting and are not the subject of any interference, re-issue, re-exam, opposition or appeal proceedings;

(b) as of the Effective Date and the Exercise Trigger Date, no Third Party has or will have filed, pursued or maintained or, to the best of its knowledge, threatened in writing to file, pursue or maintain any claim, lawsuit, charge or other action involving any Licensed Right including any claim, lawsuit, charge, or action alleging that any Licensed Right is invalid or unenforceable;

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

(c) as of the Effective Date and to the best of its knowledge, all employees and agents of Novavax who have performed any activities on its behalf in connection with research regarding the Licensed Rights have properly assigned to Novavax the whole of their rights in any intellectual property made, discovered or developed by them as a result of such research, and no Third Party has any rights to any such intellectual property;

(d) as of the Exercise Trigger Date, the Licensed Rights will be free and clear of any liens, charges, encumbrances or rights of others, to possession or use that may interfere with Novavax’s possession or use under this Agreement;

(e) as of the Exercise Trigger Date, it will have sufficient rights to grant the licenses granted to the Company hereunder;

(f) as of the Effective Date and the Exercise Trigger Date, it has not granted, and during the Term it will not grant, any right to any Third Party that would conflict with the rights granted to the other Party hereunder. It has (or will have at the time performance is due) maintained and will maintain and keep in full force and effect all agreements necessary to perform its obligations hereunder; and

(g) as of the Effective Date and the Exercise Trigger Date, all third party agreements licensing any Licensed Rights to Novavax, which are sublicensed to the Company hereunder, are currently in full force and effect, and it has not received notice of material breach or termination thereof.

4.3 DISCLAIMER OF WARRANTIES . Except as expressly set forth herein, EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF DESIGN, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICES, IN ALL CASES WITH RESPECT THERETO. Without limiting the generality of the foregoing, each Party expressly does not warrant, and disclaims any warranties with regards to: (a) the success of any study or test commenced under this Agreement, (b) the safety or usefulness for any purpose of the technology or Materials it provides or discovers under this Agreement; and/or (c) the validity, enforceability, or non-infringement of any intellectual property rights or technology it provides or licenses to the other Party under this Agreement.

ARTICLE 5

INDEMNIFICATION

5.1 Indemnification by Novavax. Novavax will indemnify, defend and hold harmless Company, its Affiliates, directors, officers and employees (each a “ Company Indemnitee ”) from and against any and all liability, loss, damage or expense (including without limitation reasonable attorneys fees) it may suffer as the result of Third Party claims, demands, actions and proceedings brought against it (collectively, “ Losses ”) to the extent such Losses result from the negligence or willful misconduct by Novavax, its Affiliates, employees, agents or Third Party contractors.

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

Novavax’s obligation to indemnify the Company Indemnitee pursuant to this Section 5.1 will not apply to the extent of any Loss that arises from the (i) material breach by Company of its representations, warranties or covenants contained within this Agreement or (ii) negligence or willful misconduct of any Company Indemnitee.

5.2 Procedures. Indemnitor’s agreement to indemnify, defend and hold harmless an Indemnitee is conditioned on Indemnitee (a) providing prompt written notice of any claim giving rise to an indemnification obligation hereunder but only if a failure to so notify causes prejudicial harm to the Indemnitor’s ability to defend, (b) permitting Indemnitor to assume full responsibility to investigate, prepare for and defend against any such claim, (c) providing reasonable assistance in the defense of such claim at Indemnitor’s reasonable expense, and (d) not compromising or settling such claim without Indemnitor’s advance written consent.

5.3 Limitation of Liability. EXCEPT AS REGARDS A BREACH OF A PARTY’S RESPONSIBILITIES PURSUANT TO ARTICLE 3, NEITHER PARTY NOR ITS RESPECTIVE AFFILIATES WILL BE LIABLE TO THE OTHER PARTY FOR ANY LOSS OF PROFITS, LOSS OF BUSINESS OR INTERRUPTION OF BUSINESS, OR FOR ANY OTHER INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES UNDER THIS AGREEMENT, WHETHER IN CONTRACT, WARRANTY, TORT, STRICT LIABILITY OR OTHERWISE, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS OR DAMAGES.

ARTICLE 6

TERM

6.1 Term and Termination. The term of this Agreement will commence on the Effective Date and will continue until (a) expiration of the Option as provided in Section 2.2, (b) the Parties mutually agree in writing to terminate the Agreement, or (c) Novavax terminates the Joint Venture Agreement by providing a Notice of Termination under and pursuant to Section 11.2 of the Joint Venture Agreement (the “Term” ).

ARTICLE 7

DISPUTE RESOLUTION

7.1 Disputes. The Parties recognize that disputes as to certain matters may from time to time arise during the Term which relate to either Party’s rights and/or obligations hereunder. It is the objective of the Parties to establish procedures to facilitate the resolution of disputes arising under this Agreement in an expedient manner by mutual cooperation and without resort to litigation. To accomplish this objective, the Parties agree to follow the procedures set forth in this Article 7 if and when a dispute arises under this Agreement.

7.2 Arbitration. Any dispute arising between the Parties out of or in connection with the implementation or interpretation of this Agreement shall, if not settled amicably within ninety (90) days from the date that the dispute arose, be finally settled by three (3) arbitrators. Each Party

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

shall be entitled to appoint one (1) arbitrator and the two (2) so appointed shall appoint the third arbitrator in accordance with the Indian Arbitration and Conciliation Act, 1996. It is hereby agreed that Part I of the Indian Arbitration and Conciliation Act, 1996 (except for the provisions of Section 9 thereof) shall not apply to the arbitration under this Agreement. The language of the arbitration proceedings shall be English and its place shall be Singapore. The arbitral award or determination shall be final and subject to no appeal and shall deal with the question of costs of arbitration and all matters related thereto.

7.3 Equitable Claims. Notwithstanding anything to the contrary in this Article 7, either Party has the right to seek temporary injunctive relief or any other interim equitable remedy in any court of competent jurisdiction as may be available to such Party under the laws applicable to such jurisdiction that may be necessary to protect the rights or property of that Party until such time as any dispute underlying such temporary injunctive relief or any other interim equitable remedy has been resolved in accordance with Section 7.2.

7.4 Governing Law. The substantive laws of India will govern the resolution of all disputes, controversies and claims under, arising out of or relating to the validity, construction, enforceability or performance of this Agreement and any related remedies, without giving effect to any choice of law rules.

7.5 Award. Each Party will abide by any arbitral award rendered pursuant to this Article 7. If a Party resists enforcement of an arbitral award, any costs, fees or taxes incident to enforcement will be charged against that Party to the extent permitted by Law. Each Party will bear its own legal fees for arbitration, and the arbitrator(s) will assess their costs, fees and expenses against the Party losing the arbitration.

7.6 Injunctive Relief. If a Party makes a sufficient showing under the rules and standards set forth in the rules of civil procedure and applicable Law, the arbitrator may, and the Parties will abide by, injunctive measures after either Party submits in writing for arbitration claims requiring immediate relief. Notwithstanding the foregoing, and in accordance with Section 7.3, a Party will also be free at any time to bring an Equitable Claim to any court of competent jurisdiction without submitting such request to an arbitrator.

7.7 Confidentiality. Any arbitration proceeding, including without limitation the existence of any dispute submitted to arbitration and any arbitral award or decision, will be Confidential Information of both Parties, and the arbitrator(s) will issue appropriate protective orders to safeguard each Party’s Confidential Information, provided that such Confidential Information may be disclosed solely as necessary in connection with the enforcement of an arbitral award or as otherwise required by Law (subject to Section 7.3).

ARTICLE 8

MISCELLANEOUS

8.1 Entire Agreement. This Agreement (including its Exhibits) sets forth all the covenants, promises, agreements, warranties, representations, conditions and understandings

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between the Parties with respect to the subject matter hereof and supersedes and terminates all prior agreements and understanding between the Parties with respect to such subject matter. No subsequent alteration, amendment, change or addition to this Agreement will be binding upon the Parties unless reduced to writing and signed by the respective authorized officers of the Parties.

8.2 Third Party Contractors. The Parties will perform their obligations under this Agreement as Third Party contractors and nothing contained in this Agreement will be construed to be inconsistent with such relationship or status. This Agreement will not constitute, create or in any way be interpreted as a joint venture or partnership of any kind.

8.3 Notices. Any notice, request, demand, waiver, consent, approval or other communication permitted or required under this Agreement ( “Notice” ) will be in writing, will refer specifically to this Agreement and will be deemed given only if sent by electronic mail (with receipt confirmed), facsimile transmission (with transmission confirmed) or by an internationally recognized delivery service that maintains records of delivery, addressed to the Parties at their respective addresses specified in this Section 8.3 or to such other address as the Party to whom notice is to be given may have provided to the other Party in accordance with this Section 8.3. Any notice delivered by electronic mail or facsimile will be confirmed by a hard copy delivered as soon as practicable thereafter by an internationally recognized overnight delivery service. Such Notice will be deemed to have been given on the second Business Day (at the place of delivery) after deposit with an internationally recognized delivery service. This Section 8.3 is not intended to govern the day-to-day business communications necessary between the Parties in performing their obligations under the terms of this Agreement.


If to Novavax:		Novavax, Inc.
		9920 Belaward Campus Drive
		Rockville Maryland 20850
		Attn: Ray Hage, Senior Vice President
		Email: Rhage@Novavax.com
		Facsimile No.: 240-268-2122

If to Company:		CPL Biologicals Limited
		Cadila Corporate Campus
		Sarkhej-Dholka Road
		Bhat, Ahmedabad — 382210
		Gujarat, India
		Attn: Dr. Rajiv I. Modi, Managing Director
		Email: rimodi@cadilapharma.co.in
		Facsimile No.: +91 (02718) 225031

8.4 Assignment.

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property or assets of Novavax, whether by way of a single transaction or a series of related transactions, and such successor shall be fully bound by the terms and conditions hereof.

8.5 Headings. The headings for each article and section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular article or section.

8.6 No Strict Construction. This Agreement has been prepared jointly and will not be strictly construed against either Party.

8.7 Ambiguities. Ambiguities and uncertainties in this Agreement, if any, will not be interpreted against either Party, irrespective of which Party may be deemed to have caused the ambiguity or uncertainty to exist.

8.8 English Language. All notices required or permitted to be given hereunder, and all written, electronic, oral or other communications between the Parties regarding this Agreement will be in the English language. This Agreement is in the English language only, which language will be controlling in all respects, and all versions hereof in any other language will be for accommodation only and will not be binding upon the Parties.

8.9 No Waiver. Any delay in enforcing a Party’s rights under this Agreement or any waiver as to a particular default or other matter will not constitute a waiver of such Party’s rights to the future enforcement of its rights under this Agreement, excepting only as to an express written and signed waiver as to a particular matter for a particular period of time.

8.10 Severability. If one or more of the provisions in this Agreement are deemed unenforceable by Law, then such provision will be deemed stricken from this Agreement and the remaining provisions will continue in full force and effect and shall be interpreted to give full effect to the commercial agreement between the Parties.

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8.11 Counterparts. This Agreement may be executed in one or more identical counterparts, each of which will be deemed to be an original, and which collectively will be deemed to be one and the same instrument.

[Signature Page to Follow]

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In Witness Whereof, the Parties have by duly authorized persons executed this License Agreement as of the Effective Date.


Novavax, Inc.		CPL Biologicals Limited

By:	/s/ Rahul Singhvi Rahul Singhvi	By:	/s/ Rajiv I. Modi Rajiv I. Modi
	President and Chief Executive Officer		Managing Director

[Signature Page to License Agreement]

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
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Exhibit A

Form of License Agreement executed by Novavax

LICENSE AGREEMENT

This License Agreement (the “ Agreement ”) is executed this March 31, 2009 (the “ Execution Date ”), to be effective as set forth in Article 4, by and between Novavax, Inc. , a Delaware corporation having an address at 9920 Belward Campus Drive, Rockville, Maryland 20850, United States of America (“ Novavax ”) and CPL Biologicals Limited , a limited company incorporated under the laws of India having an address at “Cadila Corporate Campus”, Sarkhej-Dholka Road, Bhat, Ahmedabad — 382210, Gujarat, India (“ Company ”). Novavax and Company are sometimes referred to herein each individually as a “Party” and collectively as the “Parties.”

RECITALS

Whereas, on the Effective Date, Novavax will Control the Licensed Rights, as defined below;

Whereas, Company wishes to obtain a license as of the Effective Date under the Licensed Rights, to practice the processes included or claimed in the Licensed Rights and to Develop and Commercialize Licensed Product; and

Whereas, Novavax is willing to grant such license on the terms and conditions of this Agreement.

ARTICLE 1

DEFINITIONS

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voting stock (or, in the case of a non-corporate entity, of the equity interests with the power to direct the management and policies) of such corporation or other business entity, or (b) possession, directly or indirectly, of the power to direct, or cause the direction of, the management and policies of such corporation or other business entity, whether through the ownership of voting securities, by contract, or otherwise; provided that for purposes of this Agreement, Novavax and Cadila Pharmaceuticals Limited shall not be deemed to be an Affiliate of Company.

1.6 “Developed Know-How” has the meaning in Section 5.1.

1.7 “Effective Date ” means the date on which the condition precedent set forth in Article 4 is first satisfied.

1.8 “Governmental Authority” means any applicable court, agency, department or other instrumentality of any foreign, federal, state, county, city or other political subdivision.

1.9 “IND” means a U.S. Food and Drug Administration investigational new drug application, or its foreign equivalent.

1.10 “Joint Venture Agreement” means the Joint Venture Agreement by and between Novavax and Cadila Pharmaceuticals Limited, dated March 31, 2009.

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(including pharmacological, toxicological, non-clinical and clinical test data and results), analytical and quality control data, results or descriptions, software and algorithms and (b) compositions of matter, cells, cell lines, assays, animal models and physical, biological or chemical material.

1.13 “Licensed Product” means Novavax’s current intra-muscular pandemic influenza vaccine containing a virus like particle (VLP) consisting of an avian influenza M1 protein or an influenza M1 protein containing an avian influenza M1 L-domain sequence and a pandemic influenza HA and pandemic influenza NA described in the U.S. IND No. BB-IND 13419 wherein the pandemic HA and pandemic NA under the IND are classified as pandemic by the World Health Organization (WHO) Collaborating Centers for Reference and Research on Influenza located at the Centers for Disease Control and Prevention (CDC) in Atlanta, Georgia, together with any minor modifications thereto including, by way of example but not limitation, changes to any excipient, changes arising from a change in manufacturing process, or change in dosage. [* * *] Licensed Product shall include the pandemic influenza vaccine containing a virus like particle (VLP) consisting of an avian influenza M1 protein or an influenza M1 protein containing an avian influenza M1 L-domain sequence and a pandemic influenza HA and pandemic influenza NA that is launched by or for Novavax for commercial sale in the United States after Regulatory Approval of such vaccine; it being understood that for so long as (but only for so long as) such vaccine is being developed in clinical trials by or for Novavax in support for commercial launch in the United States, such vaccine shall be deemed a Licensed Product hereunder prior to commercial launch (for the purpose of allowing the Company to develop and launch such product in the Territory in accordance with the terms and conditions of this Agreement promptly following its launch by Novavax in the United States).

1.14 “Licensed Rights” means the Novavax Patents and any and all Know-How, including any Developed Know-How, owned or Controlled by Novavax at any time during the term of this Agreement which is used or embodied in, or useful for developing or manufacturing, any Licensed Product, including, without limitation, Know-How regarding Novavax’s proprietary baculovirus insect cell expression and manufacturing system and improvements thereto.

1.16 “Patent” means any and all (a) issued patents and inventors’ certificates and re-examinations, reissues, renewals, extensions, registrations, substitutions, supplementary protection certificates and term restorations with respect to any of the foregoing, and (b) pending applications for patents and inventors’ certificates and patents that issue therefrom, including, without limitation, provisional applications, continuations, continuations in part, divisional and substitute applications with respect to any of the foregoing.

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

1.17 “ Program Data ” means (a) research, preclinical, clinical, manufacturing and similar data, information, material and results, (b) regulatory filings and approvals, and (c) sales and marketing information.

1.22 “Technical Services Agreement” means that certain Technical Services Agreement between Novavax and Company dated as of the date hereof.

1.23 “Territory” means India.

1.24 “Third Party” means a person or entity other than (a) Novavax, (b) Company, (c) an Affiliate of Novavax or (d) an Affiliate of Company.

1.25 “U.S.” means the United States of America.

ARTICLE 2

LICENSES

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sell, have sold, offer to sell and import Licensed Product in the Territory, and (b) make (and have made solely by Cadila or an Affiliate of Cadila, subject to Novavax’s approval described below) Licensed Product in the Territory solely to develop, use, sell, have sold, offer to sell and import Licensed Product in the Territory. The foregoing license shall be exclusive for Licensed Product in the Territory, even as to Novavax, provided that Novavax retains the right to perform its obligations under this Agreement, the Technical Services Agreement and any other agreement between Company and Novavax.

Novavax shall be reasonable in granting or withholding its approval to permit Cadila or an Affiliate of Cadila to make Licensed Product in the Territory. Novavax’s approval shall be subject to its consideration of, among other things, any documentation or agreement surrounding such manufacturing of the Licensed Product (which, in any case, shall be solely for the benefit of the Company), the safeguards in place with regard to any such manufacturing, the protection of the Licensed Rights, and Novavax’s ability to conduct reasonable due diligence on any Affiliate of Cadila. In no event does the license grant to the Company under this Section 2.1 permit the Company to have Licensed Product made by a Third Party

2.5 Research Data; Right of Reference.

(a) Company shall keep complete and accurate notes, accounts and records of all Program Data with respect to Licensed Product, including the manufacture thereof. Novavax shall have the right to access, use and reference for its Development and Commercialization of its products outside the Territory Program Data related to Licensed Product in the possession or control of the Company. The Company shall provide such cooperation and assistance as reasonably requested by Novavax from time to time to effectuate the foregoing, including, without limitation by providing access to and disclosure of Program Data to Novavax and by providing such authorization and consents required for reference to regulatory filings and approvals.

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
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(b) Company shall have the right to access, use and reference for its Development and Commercialization of Licensed Product in the Territory Program Data related to Licensed Product in the possession or control of Novavax. Novavax shall provide such cooperation and assistance as reasonably requested by Company from time to time to effectuate the foregoing, including, without limitation by providing access to and disclosure of Program Data to Company and by providing such authorization and consents required for reference to regulatory filings and approvals.

2.6 Grey Market. The Parties reasonably cooperate to formulate and implement reasonable precautions designed to prevent Licensed Product made or sold by or for such Party or its respective Affiliates and permitted sublicensees from being sold outside of its respective territory (i.e., outside the Territory for the Company and inside the Territory for Novavax). Further, each Party will take reasonable measures so that its distributors, Affiliates and wholesalers to whom the Company or Novavax provides its respective Licensed Product are aware of the respective territorial limitations.

ARTICLE 3

LICENSED PRODUCT DEVELOPMENT AND COMMERCIALIZATION

3.1 Development and Commercialization of Licensed Product.

(a) General. Company will have sole responsibility, at Company’s sole expense, for all Development and Commercialization of Licensed Product in the Territory in accordance with the terms of this Agreement.

(b) Development and Commercialization of Licensed Product. Within [* * *] days of the Effective Date, Company shall present to Novavax for its written approval Development plans for the Licensed Product which shall specify preclinical studies (including a toxicology program and other preclinical testing), human clinical trials, manufacturing scale up, Regulatory Approval strategy and any other significant Development activities, that Company plans to perform to obtain Regulatory Approval of such Licensed Product in the Territory (the

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“ Development Plans ”). Novavax may reasonably request adjustments to activities described in such Development plans as a condition to granting its approval. In no event shall Company materially alter a Development Plan without Novavax’s prior written consent. Company shall conduct Development of such Licensed Product in a manner that is materially consistent with the Development Plans. All clinical trial protocols for Licensed Product conducted by Company shall require the prior written approval of Novavax. At least [* * *] prior to anticipated commercial launch, Company shall present to Novavax for its written approval a plan to Commercialize the Licensed Product which shall specify a multi-year marketing and public relations strategy, operational plans to implement such strategies and any other significant Commercialization activities (the “ Commercialization Plan ”). Novavax may reasonably request adjustments to the Commercialization plan as a condition to granting its approval. In no event shall Company materially alter the Commercialization Plan without Novavax’s prior written consent. Company shall conduct Commercialization of such Licensed Product in a manner that is materially consistent with the Commercialization Plan. Novavax acknowledges that the Licensed Product is being contributed by Novavax to the Company in accordance with the Joint Venture Agreement and that if the Company cannot Develop and Commercialize such Licensed Product it will not obtain the value of such contribution. Company acknowledges that Novavax (or its affiliates or licensees) are Developing and Commercializing Licensed Product outside the Territory and Company’s activities could raise safety concerns and have an impact on Novavax’s activities including the Regulatory Approval and regulatory profile of an approved product outside the Territory. Accordingly, taking into account Novavax’s and Company’s respective interests including, without limitation, as provided in the two preceding sentences, Novavax shall not unreasonably withhold, delay or condition any of its consents or approvals hereunder.

3.2 Regulatory Affairs. Company will be responsible for developing Regulatory Documentation and preparing and submitting Regulatory Filings, seeking Regulatory Approvals, and maintaining Regulatory Approvals for Licensed Product in the Territory. As set forth in the Technical Services Agreement, Novavax will cooperate with Company in preparing and filing all such reports.

3.4 Adverse Event Reporting. Company will maintain a record of all non-medical and medical Licensed Product-related complaints and reports of Adverse Events in the Territory with respect to any Licensed Product Developed or Commercialized by the Company. At the request of either party, Novavax and the Company shall enter into reasonable and customary pharmacovigilance agreement with respect to sharing of adverse event data and information for Licensed Product as required to comply with applicable laws and regulations.

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such progress report will be provided to Novavax by Company no later than March 1 ^st or September 1 ^st (as the case may be) of each year following the Effective Date.

3.6 Minor Modifications; Intent. During the Term of this Agreement, Novavax will promptly provide Company with details of any minor modifications it makes to the Licensed Product as Novavax develops it for Regulatory Approval. [* * *]

ARTICLE 4

CONDITION PRECEDENT

This Agreement, including the license grants, obligations and benefits herein, shall only become effective if, and shall automatically become effective upon, exercise and delivery of the option granted by Novavax to Company in accordance with the Joint Venture Agreement and that certain Option to Obtain License dated as of March31, 2009, unless earlier terminated.

ARTICLE 5

INTELLECTUAL PROPERTY

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opportunity to comment upon all filings and actions with such patent offices in advance of submissions to such patent offices. For purposes of this Section 5.3, “filing, prosecution and maintenance” of patents shall be deemed to include, without limitation, appeals to administrative or judicial entities having jurisdiction over patentability, the conduct of interferences or oppositions, and/or requests for re-examinations, reissues or extensions of patent terms.

5.4 Abandoned Patents. In the event the prosecuting party determines not to initiate patent prosecution for any particular patentable Developed Know-How invention or to cease prosecution or maintenance of, or otherwise abandon, any Patents that are the subject of Section 5.3 in the Territory, or with respect to ROW Patents anywhere in the world (which the prosecuting party may do in its sole discretion), the prosecuting party shall provide reasonable prior written notice to the other party sufficient for the other party to timely initiate or take over the prosecution and maintenance of such Patent and timely file any required documents and responses with the relevant government patent office in the Territory, or with respect to ROW Patents anywhere in the world, with respect thereto, and the other party may elect (in its sole discretion) to prosecute and maintain such Patent, at the other party’s sole expense. In such event, upon the request of and, at the expense of the other party, the prosecuting party shall assign to the other party all of its right, title and interest in, to and under such Patent which the prosecuting party has decided to abandon and provide reasonable cooperation to the other party with respect thereto (including, without limitation, providing necessary information and executing relevant documents).

5.5 Enforcement of Patents.

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Novavax’s sole expense. The non-prosecuting party shall reasonably cooperate with the prosecuting party in such enforcement activities, at the prosecuting party’s expense, including by agreeing to be named as a party to (or bringing in its own name) such suit, action or proceeding for the benefit of the non-prosecuting party if required for such enforcement action to proceed. The prosecuting party shall keep the non-prosecuting party reasonably informed regarding any such enforcement action and shall consider in good faith the reasonable comments and suggestions of the non-prosecuting party related to such suit, action or proceeding. All recoveries received by the prosecuting party from any such enforcement action shall be retained by the prosecuting party.

(b) Challenge by Third Parties. Novavax and Company will each notify the other Party in writing within ten (10) Business Days of learning of any alleged or threatened opposition, reexamination request, action for declaratory judgment, nullity action, interference or other attack upon the validity, title or enforceability of the Licensed Rights or the ROW Patents or ROW Know-How by a Third Party. Owner of the subject Patent will have the right (but not the obligation) to defend any such challenge in the Territory. If the owner of the subject Patent commences a defense against the alleged or threatened challenge (i) within sixty (60) days following the detection of the alleged challenge, or (ii) ten (10) Business Days before the time limit, if any, set forth in appropriate Laws and regulations for making a filing in defense of such a challenge, whichever comes first, then the owner of the subject Patent will so notify the other party promptly. Notwithstanding the foregoing, if any such action for declaratory judgment, nullity action, or other attack upon the validity, title or enforceability of the Licensed Right includes or will include counterclaims of infringement of the Licensed Rights, ROW Patents or ROW Know-How by the Third Party, control of such action or other attack shall be governed by Section 5.5(a).

ARTICLE 6

CONFIDENTIALITY; PUBLICATION

6.2 Publication.

(a) Each Party shall have the right to publish the data and results related to Licensed Product, subject to the rest of this Section 6.2. Prior to public disclosure or submission for publication of a proposed publication describing the results of any scientific or clinical activity relating to a Licensed Product, the Party proposing such publication shall send the other Party by expedited delivery a copy of the proposed publication to be submitted and shall allow the other Party a reasonable time period (but not more than sixty (60) days from the date of confirmed receipt) in which to determine whether the proposed publication contains subject matter for which patent protection should be sought (prior to publication of such proposed publication) for the purpose of protecting an invention, or whether the proposed publication contains the Confidential Information of such other Party, or whether the proposed publication contains information that is

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reasonably likely to have a material adverse impact on the development or commercialization of Licensed Product. Following the expiration of applicable time period for review, the Party proposing such publication shall be free to submit such proposed publication for publication and publish or otherwise disclose to the public such scientific or clinical results, subject to the procedures set forth in Section 6.2(b).

(b) If the Party reviewing such publication believes that the subject matter of the proposed publication by the other Party contains Confidential Information of the Party or a patentable invention owned by the Party or in which it otherwise has exclusive rights hereunder, then prior to the expiration of the applicable time period for review, such Party shall notify the Party proposing such publication in writing of such belief. On receipt of written notice from the other Party that such proposed publication contains its Confidential Information, the Party proposing publication shall remove such Confidential Information from such proposed publication prior to any publication thereof, unless the other Party agrees otherwise in writing. On receipt of written notice from the other Party that such proposed publication contains a patentable invention owned by it or in which it otherwise has exclusive rights hereunder, the Party proposing publication shall delay public disclosure of such information or submission of the proposed publication for an additional period of thirty (30) days to permit preparation and filing of a patent application on such invention. The Party proposing publication shall thereafter be free to publish or disclose such information.

ARTICLE 7

REPRESENTATIONS AND WARRANTIES

7.1 Mutual Warranties. Each of Novavax and Company hereby represents, warrants and covenants to the other as of the Execution Date that:

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7.2 Representations by Novavax. In addition to the representations and warranties made in Section 7.1, Novavax hereby represents, warrants and covenants to Company that:

(a) as of the Execution Date, the Licensed Rights are subsisting and are not the subject of any interference, re-issue, re-exam, opposition or appeal proceedings;

(e) as of the Effective Date, it has sufficient rights to grant the licenses granted to the Company hereunder; and

ARTICLE 8

INDEMNIFICATION

8.1 Indemnification by Company. Company will indemnify, defend and hold harmless Novavax, its affiliates, directors, officers and employees (each a “ Novavax Indemnitee ”)

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from and against any and all liability, loss, damage or expense (including without limitation reasonable attorneys fees) it may suffer as the result of Third Party claims, demands, actions and proceedings brought against it (collectively, “ Losses ”) to the extent such Losses result from the (a) negligence or willful misconduct by Company, its Affiliates, employees, agents, or Third Party contractors, or (b) manufacture, use, sale, or offer for sale of a Licensed Product in the Territory due to a design defect or a manufacturing defect, including but not limited to, a Loss related to the death of or injury to a Third Party. Company’s obligation to indemnify Novavax pursuant to this Section 8.1 will not apply to the extent of any Loss that arises from the (i) material breach by Novavax of its representations, warranties or covenants contained within this Agreement, (ii) negligence or willful misconduct of any Novavax Indemnitee, or (iii) a manufacturing defect of Licensed Product supplied by Novavax under the Supply Agreement.

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ARTICLE 9

TERM; BREACH

9.2 Breach and Remedies. In addition to any remedies available under any laws, the following remedies shall be available to a party in the event of the following breaches

(a) In the event that Section 2.6 is materially breached by either party, the non-breaching party shall be entitled to damages equal to its lost profit from lost sales of Licensed Product in or out of the Territory (as applicable) due to the “grey market” breach.

(b) In the event that Company (i) materially alters a Development Plan or Commercialization Plan for Licensed Product without Novavax’s prior written consent, or (ii) initiates a clinical trial of Licensed Product without Novavax’s approval or materially deviates from an approved clinical trial protocol for Licensed Product without the prior written consent of Novavax, then Novavax shall have right to obtain injunctive relief with respect to such breach before any court of competent jurisdiction in accordance with Section 10.3.

ARTICLE 10

DISPUTE RESOLUTION

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orders to safeguard each Party’s Confidential Information, provided that such Confidential Information may be disclosed solely as necessary in connection with the enforcement of an arbitral award or as otherwise required by Law (subject to Section 6.3).

ARTICLE 11

MISCELLANEOUS

11.1 Entire Agreement. This Agreement (including its Exhibits) sets forth all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties with respect to the subject matter hereof and supersedes and terminates all prior agreements and understanding between the Parties with respect to such subject matter. No subsequent alteration, amendment, change or addition to this Agreement will be binding upon the Parties unless reduced to writing and signed by the respective authorized officers of the Parties.


If to Novavax:		Novavax, Inc.
		9920 Belaward Campus Drive
		Rockville Maryland 20850
		Attn: Ray Hage, Senior Vice President
		Email: Rhage@Novavax.com
		Facsimile No.: 240-268-2122

If to Company:		CPL Biologicals Limited
		Cadila Corporate Campus
		Sarkhej-Dholka Road
		Bhat, Ahmedabad — 382210
		Gujarat, India

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.


		Attn: Dr. Rajiv I. Modi, Managing Director
		Email: rimodi@cadilapharma.co.in
		Facsimile No.: +91 (02718) 225031

11.4 Assignment.

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

11.7 No Strict Construction. This Agreement has been prepared jointly and will not be strictly construed against either Party.

[Signature Page to Follow]

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED
WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

In Witness Whereof, the Parties have by duly authorized persons executed this License Agreement as of the Execution Date.


Novavax, Inc.		CPL Biologicals Limited

By:	/s/ Rahul Singhvi	By:
	Rahul Singhvi		Rajiv I. Modi
	President and Chief Executive Officer		Managing Director

[Signature Page to License Agreement]

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Rahul Singhvi, certify that:

1.		I have reviewed this Quarterly Report on Form 10-Q of Novavax, Inc;

2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.		The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

	a)		designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)		designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)		evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluations; and

	d)		disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

	a)		all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)		any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: May 11, 2009	By:	/s/ Rahul Singhvi
		Rahul Singhvi
		President and Chief Executive Officer

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Evdoxia E. Kopsidas, certify that:

1		I have reviewed this Quarterly Report on Form 10-Q of Novavax, Inc;

2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.		The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

	a)		designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)		designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)		evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluations; and

	d)		disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	a)		all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: May 11, 2009	By:	/s/ Evdoxia E. Kopsidas
		Evdoxia E. Kopsidas
		Director of Finance and Interim Principal Accounting Officer

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350
(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

In connection with the Quarterly Report of Novavax, Inc. (the “Company”) on Form 10-Q as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Rahul Singhvi, as President and Chief Executive Officer, hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

1)		The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2)		The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the dates and periods covered by the Report


Date: May 11, 2009	By:	/s/ Rahul Singhvi
		Rahul Singhvi
		President and Chief Executive Officer

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350
(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

In connection with the Quarterly Report of Novavax, Inc. (the “Company”) on Form 10-Q as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Evdoxia E. Kopsidas, as Interim Principal Accounting Officer, hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

1)		The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2)		The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the dates and periods covered by the Report


Date: May 11, 2009	By:	/s/ Evdoxia E. Kopsidas
		Evdoxia E. Kopsidas
		Director of Finance and Interim Principal Accounting Officer